1 00:00:02,720 --> 00:00:10,520 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,560 --> 00:00:14,480 Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 3 00:00:14,560 --> 00:00:17,800 Speaker 1: Eastern on Apple, Cocklay and Android Auto with the Bloomberg 4 00:00:17,880 --> 00:00:21,000 Speaker 1: Business App. Listen on demand wherever you get your podcasts, 5 00:00:21,320 --> 00:00:23,480 Speaker 1: or watch us live on YouTube. 6 00:00:25,000 --> 00:00:28,440 Speaker 2: Matt Miller here in the Interactive Broker Studio with Nora Melinda, 7 00:00:28,560 --> 00:00:32,200 Speaker 2: we are taking you through this trading day where equity 8 00:00:32,280 --> 00:00:37,159 Speaker 2: indexes are absolutely ripping as rates come down. Nora, did 9 00:00:37,200 --> 00:00:39,040 Speaker 2: you see the tenure yield at one point was down 10 00:00:39,080 --> 00:00:42,440 Speaker 2: fifteen bases points and that was the biggest drop that 11 00:00:42,520 --> 00:00:43,640 Speaker 2: we've seen since August. 12 00:00:43,880 --> 00:00:44,160 Speaker 3: Wow. 13 00:00:44,280 --> 00:00:46,160 Speaker 4: I mean we are really on a roll here, Lisa, 14 00:00:46,159 --> 00:00:48,519 Speaker 4: in the equity market. I'm seeing a Nazek up more 15 00:00:48,520 --> 00:00:52,080 Speaker 4: than two percent, SMP up one point six percent. Let's 16 00:00:52,080 --> 00:00:54,440 Speaker 4: to keep an eye on after that CPI data today exactly. 17 00:00:54,520 --> 00:00:59,520 Speaker 2: CPI came out well, the headline figure was still up 18 00:01:00,120 --> 00:01:03,200 Speaker 2: month over month zero point four percent, but the core 19 00:01:03,280 --> 00:01:05,680 Speaker 2: figure was only up zero point two percent. We were 20 00:01:05,680 --> 00:01:09,119 Speaker 2: looking for zero point three and that's what is behind 21 00:01:09,120 --> 00:01:11,000 Speaker 2: the move. I want to talk about that right now 22 00:01:11,040 --> 00:01:14,000 Speaker 2: with William Lee. He's the chief economist at the Milken 23 00:01:14,560 --> 00:01:18,960 Speaker 2: Institute and Bill. Great to have you on the program. 24 00:01:19,120 --> 00:01:21,440 Speaker 2: We'll just talk a little bit about the US, and 25 00:01:21,440 --> 00:01:24,480 Speaker 2: then brought it out to the picture globally, because you 26 00:01:24,480 --> 00:01:28,400 Speaker 2: have so much experience internationally. What do you think about 27 00:01:28,680 --> 00:01:32,520 Speaker 2: the inflation picture? Because until today the worry was inflation 28 00:01:32,680 --> 00:01:34,640 Speaker 2: was back on the rise, the Fed wouldn't be able 29 00:01:34,640 --> 00:01:37,160 Speaker 2: to cut as much as we had thought, and maybe 30 00:01:37,319 --> 00:01:40,679 Speaker 2: some said maybe even would have to raise rates this year. 31 00:01:42,240 --> 00:01:44,080 Speaker 5: It's always dangerous to go against the markets. But I 32 00:01:44,120 --> 00:01:48,160 Speaker 5: still think the inflation rate is on the rise. It 33 00:01:48,200 --> 00:01:51,200 Speaker 5: really hasn't shown really signs of coming down ever since 34 00:01:51,240 --> 00:01:55,240 Speaker 5: the fall. We have corn inflation still covering above three 35 00:01:55,280 --> 00:01:58,440 Speaker 5: percent and persistently above three percent. But if you take 36 00:01:58,440 --> 00:02:01,920 Speaker 5: away the goods and just look at services, that's where 37 00:02:02,000 --> 00:02:03,800 Speaker 5: I'm really concerned, and that's where I think the FED 38 00:02:03,880 --> 00:02:07,960 Speaker 5: is concerned. We have services, ex housings, forget about the 39 00:02:08,000 --> 00:02:12,960 Speaker 5: housing component over four percent, and that has been rising 40 00:02:13,400 --> 00:02:16,760 Speaker 5: since late last year. So what we're seeing then is 41 00:02:17,320 --> 00:02:21,640 Speaker 5: a situation where the downward trajectory to two percent, which 42 00:02:21,639 --> 00:02:24,400 Speaker 5: the FED really wants, really isn't in sight. When you 43 00:02:24,480 --> 00:02:27,880 Speaker 5: take away the goods. This inflation which we have seen 44 00:02:28,400 --> 00:02:31,160 Speaker 5: take place because the supply chains have come back online. 45 00:02:31,320 --> 00:02:35,120 Speaker 5: The real stubborn parts of inflation, the service sector x 46 00:02:35,160 --> 00:02:37,840 Speaker 5: housing is the one that still shows quite a bit 47 00:02:37,880 --> 00:02:39,800 Speaker 5: of persistence. And I think the FED is going to 48 00:02:39,840 --> 00:02:42,800 Speaker 5: keep things tight until they see that going into a 49 00:02:42,840 --> 00:02:44,799 Speaker 5: downward trajectory. And we haven't seen that yet. 50 00:02:44,919 --> 00:02:46,680 Speaker 4: So, Bill, when we look at today's print, and as 51 00:02:46,680 --> 00:02:49,320 Speaker 4: you were mentioning and talking about some of the details, 52 00:02:49,360 --> 00:02:51,840 Speaker 4: do we think that the equity market rallying today is 53 00:02:51,880 --> 00:02:52,919 Speaker 4: a bit of an overreaction. 54 00:02:54,400 --> 00:02:58,720 Speaker 5: Well, maybe yesterday's a partial reaction to PPI, and now 55 00:02:58,760 --> 00:03:02,760 Speaker 5: today's is just a sigh of relief that we are 56 00:03:02,840 --> 00:03:06,880 Speaker 5: not accelerating upwards, that the overall index looks like as 57 00:03:06,880 --> 00:03:09,920 Speaker 5: relatively contained, because I said, there are some vulnerabilities in 58 00:03:09,960 --> 00:03:12,960 Speaker 5: that picture, especially when it comes to services, and and 59 00:03:12,960 --> 00:03:16,680 Speaker 5: and and I think if you're a real investor out there, 60 00:03:16,960 --> 00:03:19,600 Speaker 5: you're going to be looking to see this rally fate. 61 00:03:20,080 --> 00:03:21,399 Speaker 2: And and more. 62 00:03:21,720 --> 00:03:25,040 Speaker 5: More uncertainty that is coming because of fiscal uh and 63 00:03:25,040 --> 00:03:28,280 Speaker 5: and international events is going to keep investors on edge 64 00:03:28,360 --> 00:03:30,919 Speaker 5: and not willing to commit a lot of money. Yes, 65 00:03:31,120 --> 00:03:31,560 Speaker 5: just yet. 66 00:03:31,880 --> 00:03:35,000 Speaker 2: Well, so what do you think about tariffs? What do 67 00:03:35,040 --> 00:03:37,880 Speaker 2: you think about you know, the labor market right now, 68 00:03:37,880 --> 00:03:40,280 Speaker 2: we saw a blowout number. Let's not forget last week, 69 00:03:40,480 --> 00:03:45,200 Speaker 2: and the incoming administration wants to deport people, maybe buy 70 00:03:45,240 --> 00:03:50,360 Speaker 2: the millions. How does that affect inflation at a time 71 00:03:50,400 --> 00:03:53,760 Speaker 2: when we're trying to extend tax cuts and also deregulate. 72 00:03:54,720 --> 00:03:54,920 Speaker 6: Yeah. 73 00:03:54,920 --> 00:03:57,480 Speaker 5: I talked to a lot of investors, especially global investors, 74 00:03:57,680 --> 00:04:00,320 Speaker 5: and and I think the consensus view around the world 75 00:04:00,480 --> 00:04:03,040 Speaker 5: is that the United States still is the best place 76 00:04:03,040 --> 00:04:06,160 Speaker 5: to plet your money. You know, I don't believe much 77 00:04:06,200 --> 00:04:08,280 Speaker 5: in academic studies. So despite the fact that I'm a 78 00:04:08,320 --> 00:04:09,600 Speaker 5: card carrying PhD. 79 00:04:10,160 --> 00:04:12,600 Speaker 2: Did I study under Robert Mondella Columbia. 80 00:04:13,960 --> 00:04:16,919 Speaker 5: That's right, And one of the great luminaries of the 81 00:04:16,960 --> 00:04:19,240 Speaker 5: field came over with a paradox, you said, you know, 82 00:04:19,560 --> 00:04:22,520 Speaker 5: isn't it strange that emerging markets where this capital poor. 83 00:04:23,360 --> 00:04:25,919 Speaker 5: You find that a lot of the investors in emerging 84 00:04:25,920 --> 00:04:27,839 Speaker 5: markets and the rest of the world are coming to 85 00:04:27,920 --> 00:04:31,359 Speaker 5: where capital is really rich, the United States developed economies, 86 00:04:31,480 --> 00:04:33,920 Speaker 5: and that's called the Lucas paradox. And I think what 87 00:04:33,960 --> 00:04:36,280 Speaker 5: we're seeing today is also the fact that a lot 88 00:04:36,320 --> 00:04:39,000 Speaker 5: of people are saying, you know, despite always talking about diversification, 89 00:04:39,440 --> 00:04:41,080 Speaker 5: I want to go where the returns of the highest, 90 00:04:41,080 --> 00:04:43,719 Speaker 5: where innovation is the highest, where we're getting the most 91 00:04:43,760 --> 00:04:47,440 Speaker 5: for our investment dollars, and it's the United States. And 92 00:04:47,480 --> 00:04:49,840 Speaker 5: I think global investors really feel that way and continue 93 00:04:49,880 --> 00:04:52,279 Speaker 5: to feel that way. They always talk about Trump and 94 00:04:52,320 --> 00:04:54,880 Speaker 5: the uncertainties about tariffs and how it might be the 95 00:04:55,000 --> 00:04:56,760 Speaker 5: end of the world and we have a repeat of 96 00:04:56,800 --> 00:04:58,880 Speaker 5: smooth Holly of the nineteen thirties and throwing the world 97 00:04:58,920 --> 00:05:03,600 Speaker 5: into depression. I think that those are analytics that don't 98 00:05:03,640 --> 00:05:06,480 Speaker 5: even pass econ one oh one. Those would be f 99 00:05:06,640 --> 00:05:09,960 Speaker 5: marks if I were still teaching at Columbia. And the 100 00:05:10,040 --> 00:05:13,480 Speaker 5: reason why is because I think people should read Trump's book, 101 00:05:13,839 --> 00:05:16,320 Speaker 5: The Art of the Deal. Right, you always come out 102 00:05:16,360 --> 00:05:19,440 Speaker 5: with a hard negotiating line and then you sort of 103 00:05:19,440 --> 00:05:22,560 Speaker 5: make a deal with people. And remember, make America a 104 00:05:22,600 --> 00:05:26,839 Speaker 5: great agenda? What's that all about? Maximizing high pain jobs 105 00:05:26,880 --> 00:05:30,800 Speaker 5: for Americans. That's really the agenda. And if foreign investors 106 00:05:30,880 --> 00:05:33,720 Speaker 5: can come to this country and offer the opportunity to 107 00:05:34,200 --> 00:05:37,440 Speaker 5: create more jobs for Americans, I'm absolutely sure that Trump 108 00:05:37,520 --> 00:05:40,200 Speaker 5: administration would be jumping at that. Now if it was 109 00:05:40,360 --> 00:05:43,640 Speaker 5: China coming in, there's some high hurdles that they're gonna 110 00:05:43,680 --> 00:05:47,280 Speaker 5: have to meet. But in terms of our allies, the Canadians, 111 00:05:47,360 --> 00:05:51,480 Speaker 5: the Mexicans, the Europeans, we are continuing to welcome investment 112 00:05:51,880 --> 00:05:54,560 Speaker 5: funds to come into United States to create new jobs, but. 113 00:05:54,680 --> 00:05:57,680 Speaker 2: Not the labor right. I mean, we want to During 114 00:05:57,720 --> 00:06:00,960 Speaker 2: the campaign with Trump was talking about fifteen million illegal immigrants, 115 00:06:01,040 --> 00:06:04,640 Speaker 2: mass deportations were the signs being waived at the RNC, 116 00:06:05,279 --> 00:06:09,039 Speaker 2: and in a tightening labor market, it just doesn't strike 117 00:06:09,120 --> 00:06:12,000 Speaker 2: me as the smartest idea to send that many workers out, 118 00:06:13,720 --> 00:06:17,920 Speaker 2: and not to mention the fact that we educate so 119 00:06:18,080 --> 00:06:24,039 Speaker 2: many foreign citizens. Do we give them all the tools 120 00:06:24,200 --> 00:06:27,000 Speaker 2: that they need to succeed and then send them straight 121 00:06:27,120 --> 00:06:30,080 Speaker 2: home when they're done at our Ivy League universities. 122 00:06:30,800 --> 00:06:32,720 Speaker 5: And Matt That's the paradox that I think all of 123 00:06:32,800 --> 00:06:35,520 Speaker 5: the executives from Silicon Valley are trying to correct. 124 00:06:35,600 --> 00:06:35,880 Speaker 6: Right now. 125 00:06:36,160 --> 00:06:38,080 Speaker 5: The key word that you just sad about immigration was 126 00:06:38,360 --> 00:06:41,320 Speaker 5: illegal immigration. We want to sort of I think the 127 00:06:41,320 --> 00:06:43,880 Speaker 5: administrations want to put a clamp on the amount of 128 00:06:43,960 --> 00:06:47,440 Speaker 5: illegal immigration, but they certainly want to optimize the amount 129 00:06:47,520 --> 00:06:51,000 Speaker 5: of legal immigration, especially when we train a lot of 130 00:06:51,040 --> 00:06:53,080 Speaker 5: the students. We want to be able to give them 131 00:06:53,400 --> 00:06:55,080 Speaker 5: green cards to be able to stay here to make 132 00:06:55,200 --> 00:06:58,160 Speaker 5: use of their talents. This country was built on the 133 00:06:58,800 --> 00:07:01,720 Speaker 5: talents of immigrants from the world, and the Trump administration 134 00:07:01,839 --> 00:07:04,640 Speaker 5: has been saying all along they really want that. So 135 00:07:04,720 --> 00:07:08,679 Speaker 5: the key is, how do you emphasize more talented legal 136 00:07:08,720 --> 00:07:11,600 Speaker 5: immigration into this country. Although some people on the ALSA 137 00:07:11,720 --> 00:07:14,400 Speaker 5: might call it a brain train, but we've been draining 138 00:07:14,440 --> 00:07:16,320 Speaker 5: the brains of the rest of the world now for 139 00:07:16,720 --> 00:07:19,720 Speaker 5: decades and even centuries, and so that's not new for 140 00:07:19,760 --> 00:07:22,680 Speaker 5: the United States. What's new for the Trump administration. The 141 00:07:22,880 --> 00:07:27,040 Speaker 5: challenge is going to be to shift from the immigration 142 00:07:27,280 --> 00:07:30,920 Speaker 5: being illegal status, less skilled, into the more skilled and 143 00:07:31,120 --> 00:07:33,680 Speaker 5: talented immigrants that we've always wanted in this country. 144 00:07:33,960 --> 00:07:37,160 Speaker 2: William Lee, so great to get some time with you. 145 00:07:37,320 --> 00:07:39,200 Speaker 2: Never enough. Hope I can talk to you again soon. 146 00:07:39,320 --> 00:07:41,800 Speaker 2: Build Y there from the Milkin Institute, where he is 147 00:07:42,120 --> 00:07:42,880 Speaker 2: chief Economist. 148 00:07:44,520 --> 00:07:48,320 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch the program 149 00:07:48,520 --> 00:07:51,920 Speaker 1: live weekdays at ten am Eastern on Applecarplay and Android 150 00:07:51,960 --> 00:07:54,920 Speaker 1: Auto with the Bloomberg Business app. You can also listen 151 00:07:55,040 --> 00:07:58,280 Speaker 1: live on Amazon Alexa from our flagship New York station, 152 00:07:58,840 --> 00:08:01,480 Speaker 1: Just say Alexa Play Bloomberg eleven thirty. 153 00:08:02,920 --> 00:08:05,880 Speaker 2: Obviously the whole market is ripping, not just on the 154 00:08:06,800 --> 00:08:12,200 Speaker 2: CPI number and the lower rates, but probably also something 155 00:08:12,280 --> 00:08:16,040 Speaker 2: to do with financials. Right, definitely, they all beat up. 156 00:08:16,080 --> 00:08:18,760 Speaker 2: I love them, and they're all up pretty big. Even 157 00:08:18,840 --> 00:08:22,320 Speaker 2: City is up like five percent, right yeah. Alison Williams 158 00:08:22,680 --> 00:08:25,920 Speaker 2: joins US right now from Bloomberg Intelligence. She manages like 159 00:08:26,040 --> 00:08:31,040 Speaker 2: everything there, but her main beat is the banks. And Alison, 160 00:08:32,800 --> 00:08:35,640 Speaker 2: how I guess it's a twenty billion dollar buyback that's 161 00:08:35,640 --> 00:08:39,000 Speaker 2: helped investors feel good about City. But didn't they take 162 00:08:39,120 --> 00:08:41,079 Speaker 2: down some of their goals for the year. 163 00:08:41,760 --> 00:08:44,720 Speaker 7: Well, I think they they sort of notched down their 164 00:08:45,120 --> 00:08:47,959 Speaker 7: return on tangible equity target in the near term, but 165 00:08:48,040 --> 00:08:52,160 Speaker 7: I think it's realistic. You know, it's interesting even Goldman Sachs, 166 00:08:52,200 --> 00:08:56,160 Speaker 7: who had like a blowout quarter really strong numbers. It's 167 00:08:56,320 --> 00:09:00,679 Speaker 7: it's it's tough to see them. You know, they say 168 00:09:00,720 --> 00:09:03,120 Speaker 7: they have a path to reach their target. But I 169 00:09:03,200 --> 00:09:06,160 Speaker 7: think what all these banks did was after twenty twenty one, 170 00:09:06,240 --> 00:09:08,040 Speaker 7: which was a blowout year, you saw a lot of 171 00:09:08,080 --> 00:09:11,000 Speaker 7: people raise their targets, but at these very bullish targets. 172 00:09:11,720 --> 00:09:14,959 Speaker 7: And JP Morgan has met their targets. But for everybody else. 173 00:09:15,320 --> 00:09:17,679 Speaker 7: You know, it's tough and even with the markets as 174 00:09:17,679 --> 00:09:18,760 Speaker 7: strong as they are, so. 175 00:09:20,440 --> 00:09:23,360 Speaker 2: But targets were pretty high, right, yeah, I mean Shannali 176 00:09:23,960 --> 00:09:27,680 Speaker 2: keeps telling me that JP Morgan missed on equities trading, 177 00:09:28,000 --> 00:09:31,040 Speaker 2: but equities trading rose two percent. 178 00:09:31,080 --> 00:09:34,280 Speaker 7: Right, I think because I think because they restated their 179 00:09:34,360 --> 00:09:38,640 Speaker 7: numbers and so if you look at the restatement, what 180 00:09:38,840 --> 00:09:41,760 Speaker 7: happened was they shifted a little bit from equities to 181 00:09:42,080 --> 00:09:45,280 Speaker 7: thick and so I think that's why it appears that 182 00:09:45,400 --> 00:09:47,760 Speaker 7: they missed on the equities. 183 00:09:47,720 --> 00:09:52,000 Speaker 4: Line, but really beat on fick and explained to her 184 00:09:52,280 --> 00:09:56,199 Speaker 4: fixed income. Okay, see what's a thank you? 185 00:09:56,320 --> 00:09:59,120 Speaker 2: Yeah, it's an acronym that also doesn't do well in Germany. 186 00:10:00,920 --> 00:10:02,800 Speaker 7: Yeah, I'm not sure what it would be, although Deutsche 187 00:10:02,840 --> 00:10:05,240 Speaker 7: Bank only does fit with oneesay because. 188 00:10:05,000 --> 00:10:05,800 Speaker 2: They're not good. 189 00:10:05,920 --> 00:10:08,360 Speaker 4: More you know, the more you know, so who's the 190 00:10:08,400 --> 00:10:10,560 Speaker 4: front runner here and who are the laggards? 191 00:10:10,800 --> 00:10:14,719 Speaker 7: So you know, JP Morgan really continues to post the 192 00:10:14,840 --> 00:10:18,079 Speaker 7: leading returns of the group. As I said, there, you know, 193 00:10:18,200 --> 00:10:20,760 Speaker 7: exceeding their target in the near term. We expect they'll 194 00:10:20,800 --> 00:10:24,360 Speaker 7: meet their target again next year. But I would say 195 00:10:24,440 --> 00:10:26,960 Speaker 7: that for I say you that all the banks really 196 00:10:27,160 --> 00:10:29,680 Speaker 7: had a good quarter. And it's not just the quarter, 197 00:10:29,800 --> 00:10:33,600 Speaker 7: it's the guidance and so interest income coming in better 198 00:10:33,679 --> 00:10:38,839 Speaker 7: than expected. You know, Wills Fargo and JP Morgan in 199 00:10:38,920 --> 00:10:43,160 Speaker 7: particular raising their guidance for at interest income for next year. 200 00:10:43,920 --> 00:10:47,400 Speaker 7: The City Group, as we pointed out, you know they 201 00:10:47,480 --> 00:10:50,560 Speaker 7: had the buyback is about fourteen percent of their market cap, 202 00:10:50,679 --> 00:10:53,000 Speaker 7: So that's pretty significant. I mean, keep in mind the 203 00:10:53,080 --> 00:10:57,960 Speaker 7: valuation at City and so that's why I think investors 204 00:10:58,000 --> 00:10:59,640 Speaker 7: are even more excited about that. 205 00:11:00,000 --> 00:11:02,920 Speaker 2: Well, you know what that brings up an interesting question. 206 00:11:03,520 --> 00:11:06,760 Speaker 2: We have the inauguration in just a few days and 207 00:11:07,360 --> 00:11:09,200 Speaker 2: will be a different regulatory regime. 208 00:11:09,760 --> 00:11:10,120 Speaker 8: Not just. 209 00:11:11,600 --> 00:11:14,640 Speaker 2: Throwing out the Basil three endgame, but I wonder if 210 00:11:14,720 --> 00:11:17,640 Speaker 2: these banks are gonna be able to do more buybacks, 211 00:11:17,640 --> 00:11:19,600 Speaker 2: Are they going to be able to pay more in dividend? 212 00:11:19,600 --> 00:11:21,640 Speaker 2: Are they gonna be able to return more cash. 213 00:11:21,480 --> 00:11:25,439 Speaker 7: To show that is that is definitely the thesis. 214 00:11:25,120 --> 00:11:25,559 Speaker 2: If you will. 215 00:11:25,640 --> 00:11:27,599 Speaker 7: And so a lot of the run up that we 216 00:11:27,760 --> 00:11:32,880 Speaker 7: saw in the banks was due to this lighter regulatory environment. 217 00:11:32,960 --> 00:11:35,559 Speaker 7: A big part of that, to your point, is the 218 00:11:35,679 --> 00:11:39,920 Speaker 7: capital rules. So Basil three endgame as we call it, 219 00:11:40,120 --> 00:11:43,760 Speaker 7: sounds like a movie, Yes, right, So it will eventually happen. 220 00:11:44,080 --> 00:11:44,520 Speaker 7: I mean. 221 00:11:45,920 --> 00:11:46,520 Speaker 2: For the banks. 222 00:11:46,559 --> 00:11:48,880 Speaker 7: It's probably a good thing actually if it happens under 223 00:11:48,880 --> 00:11:53,439 Speaker 7: the current administration, because the current administration, as we know, 224 00:11:53,920 --> 00:11:58,120 Speaker 7: is very US focused and a lot of the issues 225 00:11:58,160 --> 00:12:01,000 Speaker 7: that the banks had with the capital rules was that 226 00:12:01,080 --> 00:12:06,079 Speaker 7: it was very punitive versus some other jurisdictions. So it 227 00:12:06,160 --> 00:12:08,160 Speaker 7: felt like it put them at a disadvantage, especially in 228 00:12:08,240 --> 00:12:11,040 Speaker 7: something like prime brokerage, and that's not a business that 229 00:12:11,160 --> 00:12:15,199 Speaker 7: regulators are necessary. You know, regulators generally they're looking to 230 00:12:15,320 --> 00:12:18,439 Speaker 7: protect the smaller banks and do things, and you know 231 00:12:18,559 --> 00:12:22,559 Speaker 7: they're not as concerned with trading and prime brokerage. But 232 00:12:23,040 --> 00:12:27,679 Speaker 7: to the extent that this at this administration, you know, 233 00:12:28,240 --> 00:12:30,880 Speaker 7: we would see the lighter rules come through. It could 234 00:12:30,920 --> 00:12:34,480 Speaker 7: be good to get them solidified. The other thing, M 235 00:12:34,559 --> 00:12:37,599 Speaker 7: and A less antitrust should be good for M and A. 236 00:12:38,000 --> 00:12:38,880 Speaker 7: It's actually a little. 237 00:12:38,679 --> 00:12:40,400 Speaker 2: Bit of a how many banks are there in the US, 238 00:12:40,559 --> 00:12:42,319 Speaker 2: in the United States of America, how many banks do 239 00:12:42,360 --> 00:12:42,520 Speaker 2: we have? 240 00:12:42,880 --> 00:12:46,400 Speaker 7: Well, it's not it's not it's not necessarily even the 241 00:12:46,440 --> 00:12:49,400 Speaker 7: bank insolidation. It's the fees that they'll make advising other people. 242 00:12:50,040 --> 00:12:52,760 Speaker 2: Right, Okay, so you're saying advising M and A for 243 00:12:52,880 --> 00:12:55,720 Speaker 2: other industries. I think you're talking about in banks, because 244 00:12:56,040 --> 00:12:57,960 Speaker 2: you know, in some countries they. 245 00:12:57,880 --> 00:12:59,920 Speaker 4: Have like four or five, but just a couple of 246 00:13:00,040 --> 00:13:01,359 Speaker 4: you can count on your hands. 247 00:13:01,160 --> 00:13:03,400 Speaker 2: And this country we have we have a lot, a lot. 248 00:13:03,640 --> 00:13:06,800 Speaker 2: I I'm not far off with five thousand, right, Yes. 249 00:13:06,880 --> 00:13:08,280 Speaker 4: So you're not far off. 250 00:13:08,559 --> 00:13:11,920 Speaker 7: But I mean the size of these g SIPs as 251 00:13:12,000 --> 00:13:15,440 Speaker 7: we call them, which globally systemically important banks. I mean, 252 00:13:15,480 --> 00:13:18,880 Speaker 7: the big really have gotten bigger. They have consolidated share, 253 00:13:18,920 --> 00:13:20,960 Speaker 7: and they've gotten bigger globally. 254 00:13:22,360 --> 00:13:24,599 Speaker 2: I don't know if Nora remembers, but there was a 255 00:13:24,720 --> 00:13:28,280 Speaker 2: time when we were concerned about banks being too big 256 00:13:28,440 --> 00:13:30,440 Speaker 2: to fail. Okay, I mean you were probably in middle 257 00:13:30,480 --> 00:13:33,760 Speaker 2: school at the time. But now they're even bigger. I 258 00:13:33,840 --> 00:13:36,599 Speaker 2: don't know that. I shouldn't assume that your age is. 259 00:13:36,840 --> 00:13:39,559 Speaker 2: But you know, twenty ten now is fifteen years ago, 260 00:13:39,720 --> 00:13:43,720 Speaker 2: so into two eight, right, seventeen years ago? What grade 261 00:13:43,760 --> 00:13:44,040 Speaker 2: were you. 262 00:13:44,120 --> 00:13:45,600 Speaker 4: In seventeen years ago? 263 00:13:45,600 --> 00:13:47,439 Speaker 2: I don't think I'm allowed to ask. Actually, forget that. 264 00:13:48,320 --> 00:13:51,440 Speaker 2: In any case, these g sibs are g sippier than ever. Right. 265 00:13:51,559 --> 00:13:53,920 Speaker 4: I'm also so I keep an eye on real estate stocks, 266 00:13:53,960 --> 00:13:56,319 Speaker 4: so I'm covering office rates and one thing that I'm 267 00:13:56,320 --> 00:13:58,520 Speaker 4: always looking at is return to office. So we did 268 00:13:58,600 --> 00:14:00,959 Speaker 4: have JP Morgan saying that they're pushing people back into 269 00:14:01,040 --> 00:14:04,000 Speaker 4: the office. What has been the general mandate and what 270 00:14:04,120 --> 00:14:06,640 Speaker 4: has been the conversation for the banking industry in general? 271 00:14:07,440 --> 00:14:08,160 Speaker 2: In general? 272 00:14:08,600 --> 00:14:10,840 Speaker 7: You know those that are front office, if you will, 273 00:14:11,040 --> 00:14:13,080 Speaker 7: that are out there. You know, we have this banking 274 00:14:13,120 --> 00:14:16,160 Speaker 7: fee recovery. Banks are competing with each other, so a 275 00:14:16,240 --> 00:14:20,240 Speaker 7: lot of those senior people happen in office or traveling again, right, 276 00:14:20,360 --> 00:14:22,840 Speaker 7: so a lot of for investment bankers, a lot of 277 00:14:22,920 --> 00:14:25,600 Speaker 7: it is not necessarily sitting in your office, but being 278 00:14:25,680 --> 00:14:26,960 Speaker 7: out there and visiting clients. 279 00:14:27,720 --> 00:14:30,040 Speaker 2: So we definitely saw that return to travel. 280 00:14:30,200 --> 00:14:32,800 Speaker 7: And JP Morgan, even though the five days a week 281 00:14:32,880 --> 00:14:35,280 Speaker 7: is getting a lot of headlines, you know, the senior 282 00:14:35,320 --> 00:14:39,360 Speaker 7: people at JP Morgan have already been back. You know, 283 00:14:39,440 --> 00:14:41,480 Speaker 7: people that I talked to at the company were back, 284 00:14:41,640 --> 00:14:43,600 Speaker 7: you know, May of twenty twenty, they were back in 285 00:14:43,640 --> 00:14:48,240 Speaker 7: their office five days a week. So yeah, so definitely 286 00:14:48,440 --> 00:14:50,160 Speaker 7: there is the return to office. 287 00:14:50,600 --> 00:14:50,920 Speaker 2: Office. 288 00:14:50,960 --> 00:14:54,040 Speaker 7: Commercial real estate, as you know, was a big concern 289 00:14:54,640 --> 00:14:56,200 Speaker 7: about a year ago. 290 00:14:56,080 --> 00:14:59,080 Speaker 4: Or I guess talk to us about where that stands now, but. 291 00:14:59,160 --> 00:15:04,160 Speaker 7: We're definitely seeing some stabilization there and credit. You know, 292 00:15:04,400 --> 00:15:06,440 Speaker 7: we talked about the net interest income side of things. 293 00:15:06,800 --> 00:15:09,800 Speaker 7: When you don't hear about credit, it means it's good, okay. 294 00:15:10,080 --> 00:15:14,240 Speaker 7: So you know, the office commercial real estate is a 295 00:15:14,320 --> 00:15:16,920 Speaker 7: significant business for Wells Bargo. We're always looking at the 296 00:15:17,960 --> 00:15:21,160 Speaker 7: trends for them, and we saw solid quarter overall net 297 00:15:21,280 --> 00:15:26,800 Speaker 7: charge offs, very stable provisions less than expected at Wells 298 00:15:26,960 --> 00:15:30,680 Speaker 7: and JP Morgan. And that's a clear signal for Bank America. 299 00:15:31,600 --> 00:15:34,880 Speaker 7: And it also means that the credit outlook for twenty 300 00:15:34,960 --> 00:15:37,920 Speaker 7: twenty five feels good and lower rates have really helped 301 00:15:37,960 --> 00:15:40,760 Speaker 7: on the commercial on the office commercial real estate front. 302 00:15:40,920 --> 00:15:44,160 Speaker 2: Interesting, yeah, very interesting stuff. Alison, thanks very much. I'm 303 00:15:44,200 --> 00:15:46,360 Speaker 2: sure is today the busiest day of your year? 304 00:15:46,640 --> 00:15:49,880 Speaker 7: Today is the busiest day. But Martly, we have three 305 00:15:50,040 --> 00:15:52,720 Speaker 7: but today we have we have four big banks that 306 00:15:53,080 --> 00:15:53,680 Speaker 7: that I look at. 307 00:15:53,760 --> 00:15:56,680 Speaker 2: We had black Rock, we had Bank in New York. 308 00:15:56,800 --> 00:15:58,920 Speaker 2: So so busy bank day. 309 00:15:59,040 --> 00:16:03,040 Speaker 7: But it's always easy year when the numbers come in 310 00:16:03,160 --> 00:16:05,840 Speaker 7: solid right, and the trends are you're tackling it. 311 00:16:06,440 --> 00:16:09,480 Speaker 2: Alison Williams, thanks very much for that. She covers all 312 00:16:09,520 --> 00:16:11,960 Speaker 2: the big banks for US. At Bloomberg Intelligence. 313 00:16:13,640 --> 00:16:17,280 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 314 00:16:17,400 --> 00:16:20,480 Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android 315 00:16:20,520 --> 00:16:23,760 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 316 00:16:23,880 --> 00:16:27,000 Speaker 1: you get your podcasts, or watch us live on YouTube. 317 00:16:28,760 --> 00:16:32,760 Speaker 6: John Tucker, Nora, Melinda your subs today for Bloomberg Intelligence. 318 00:16:32,920 --> 00:16:36,400 Speaker 6: As Lisa just told you, risk assets well, bonds too, 319 00:16:36,680 --> 00:16:40,920 Speaker 6: also surging. And to today's inflation news, Let's get to 320 00:16:41,600 --> 00:16:45,440 Speaker 6: some more insight. Lauren siddel Baker is accountabis and senior 321 00:16:45,480 --> 00:16:50,480 Speaker 6: consulting speaker at ITR Economics. So, Lauren, you know, I 322 00:16:50,560 --> 00:16:54,400 Speaker 6: get it Core is down, but is this an overreaction. 323 00:16:54,720 --> 00:16:56,240 Speaker 6: I mean, it's not down that much. 324 00:16:57,760 --> 00:16:59,680 Speaker 8: It's not down that much. If anything, I see this 325 00:16:59,720 --> 00:17:02,000 Speaker 8: as a continuation of the trend we've been on. 326 00:17:02,160 --> 00:17:05,160 Speaker 3: We like to see those splitting hair surprises to sake 327 00:17:05,400 --> 00:17:08,040 Speaker 3: or not, you know, quite so so elevated as we 328 00:17:08,119 --> 00:17:11,520 Speaker 3: have been. Certainly beata expectations. The market's going to like 329 00:17:11,600 --> 00:17:14,080 Speaker 3: this for at least a few minutes. But I really 330 00:17:14,119 --> 00:17:16,159 Speaker 3: think this keeps us on track with the trend that 331 00:17:16,240 --> 00:17:16,879 Speaker 3: we've been seeing. 332 00:17:17,520 --> 00:17:20,359 Speaker 4: Lauren Rope really stuck out to you through this report today, 333 00:17:22,000 --> 00:17:22,560 Speaker 4: So it's good. 334 00:17:22,480 --> 00:17:25,359 Speaker 3: To see shelter costs those contribute for just such a 335 00:17:25,480 --> 00:17:27,800 Speaker 3: large percentage of overall CPI. 336 00:17:27,840 --> 00:17:30,520 Speaker 8: Still rising, still one of the stickier. 337 00:17:30,600 --> 00:17:34,400 Speaker 3: Aspects, the stickier components of inflation, but starting to cool 338 00:17:34,480 --> 00:17:37,880 Speaker 3: off a little bit more. Again, housing affordability is going 339 00:17:37,960 --> 00:17:40,400 Speaker 3: to be a concern going forward. We know that we're 340 00:17:40,440 --> 00:17:43,520 Speaker 3: seeing more folks looking for rents right demand for apartments 341 00:17:43,600 --> 00:17:46,119 Speaker 3: is up, Vacancy rates very very low for apartments, so 342 00:17:46,200 --> 00:17:49,000 Speaker 3: the rental component, I do expect that to be a 343 00:17:49,040 --> 00:17:50,600 Speaker 3: little bit stickier going forward. 344 00:17:50,960 --> 00:17:52,560 Speaker 8: Otherwise, though the big. 345 00:17:52,800 --> 00:17:56,600 Speaker 3: Drivers here things like airfare, medical care. Those are things 346 00:17:56,640 --> 00:17:57,920 Speaker 3: that we know do cost more. 347 00:17:58,080 --> 00:18:01,000 Speaker 8: So no big surprises on the core front. 348 00:18:01,320 --> 00:18:03,320 Speaker 3: I think this is a manageable result, and I think 349 00:18:03,359 --> 00:18:05,320 Speaker 3: this again keeps the FED on pace for those fifty 350 00:18:05,320 --> 00:18:05,960 Speaker 3: basis points of. 351 00:18:05,960 --> 00:18:06,560 Speaker 8: Cuts this year. 352 00:18:06,920 --> 00:18:11,119 Speaker 6: Okay, so maybe we're headed the trajectory is headed in 353 00:18:11,320 --> 00:18:14,600 Speaker 6: the right direction. But you know what, maybe teriffs are 354 00:18:14,920 --> 00:18:18,399 Speaker 6: are headed our way and there are a lot of 355 00:18:18,520 --> 00:18:20,239 Speaker 6: iffy situations coming up. 356 00:18:21,720 --> 00:18:24,240 Speaker 8: Yes, tariffs are a big one we have seen. 357 00:18:24,320 --> 00:18:27,119 Speaker 3: If we break down inflation to the goods components and 358 00:18:27,160 --> 00:18:31,040 Speaker 3: the service components, goods really have been mundane. 359 00:18:31,119 --> 00:18:34,040 Speaker 8: Now in this most recent print, energy prices starting to 360 00:18:34,080 --> 00:18:34,399 Speaker 8: come back. 361 00:18:34,480 --> 00:18:37,240 Speaker 3: We have been enjoying lower oil prices right lower gas 362 00:18:37,320 --> 00:18:38,560 Speaker 3: prices at the pump for a while. 363 00:18:39,359 --> 00:18:41,400 Speaker 8: Starting to see a little bit of pressure building there, 364 00:18:41,600 --> 00:18:44,040 Speaker 8: just with the macro cycle picking back up. But if 365 00:18:44,119 --> 00:18:45,240 Speaker 8: we do get in a. 366 00:18:45,280 --> 00:18:49,400 Speaker 3: Tariffs, excuse me, especially those universal tariffs, that could drive 367 00:18:49,560 --> 00:18:51,720 Speaker 3: more broad based inflation on the good. 368 00:18:51,640 --> 00:18:53,160 Speaker 8: Side of things service sector. 369 00:18:53,200 --> 00:18:55,440 Speaker 3: Again, labor market is tight, it is going to remain 370 00:18:55,520 --> 00:18:58,320 Speaker 3: tight for the foreseeable future. So our base case is 371 00:18:58,480 --> 00:19:01,560 Speaker 3: just for wages to cost work, for wage inflation to 372 00:19:01,640 --> 00:19:04,680 Speaker 3: be higher going forward. It's really the risk to me 373 00:19:04,760 --> 00:19:07,280 Speaker 3: of tariff's bringing good side back to keep up with 374 00:19:07,720 --> 00:19:10,040 Speaker 3: the wage side of things, with the service side, that's 375 00:19:10,080 --> 00:19:12,160 Speaker 3: when we could start to see inflation really reignite. 376 00:19:12,800 --> 00:19:15,280 Speaker 4: When we think about the idea of tariffs, Lauren, are 377 00:19:15,320 --> 00:19:18,000 Speaker 4: there any particular sectors or industries that you're keeping an 378 00:19:18,040 --> 00:19:18,320 Speaker 4: eye on? 379 00:19:21,000 --> 00:19:23,240 Speaker 8: So much of this remains political at this point. 380 00:19:23,800 --> 00:19:26,720 Speaker 3: You know, maybe we'll get one company asking for waivers 381 00:19:26,800 --> 00:19:29,639 Speaker 3: on one thing or another, but really, if we do 382 00:19:29,920 --> 00:19:33,560 Speaker 3: get tariffs that are universal tariffs that just affect everything 383 00:19:33,640 --> 00:19:36,639 Speaker 3: coming into this country, not targeting just China or just 384 00:19:36,840 --> 00:19:39,040 Speaker 3: you know, some other jurisdiction, some product line. 385 00:19:39,520 --> 00:19:41,160 Speaker 8: That's where I see the real risk. 386 00:19:41,440 --> 00:19:45,600 Speaker 3: So I'm waiting to see what the incoming administration releases 387 00:19:45,720 --> 00:19:48,000 Speaker 3: for their policy proposals. Some of this might just be 388 00:19:48,160 --> 00:19:50,760 Speaker 3: campaign rhetoric that they leave behind on the campaign trail. 389 00:19:51,000 --> 00:19:53,600 Speaker 3: They do target those kind of high value, you know, 390 00:19:53,720 --> 00:19:58,000 Speaker 3: really buzzy items like steel or things that are more 391 00:19:58,040 --> 00:20:00,600 Speaker 3: targeted to China. I just I think at this point 392 00:20:00,680 --> 00:20:03,360 Speaker 3: it's a political decision. I will be a political analyst. 393 00:20:03,440 --> 00:20:05,000 Speaker 3: I'll just analyze the economics of it. 394 00:20:05,680 --> 00:20:08,000 Speaker 4: Lauren, As we think about the trajectory for the Fed's 395 00:20:08,080 --> 00:20:11,080 Speaker 4: policy this year in twenty twenty five, is the focus 396 00:20:11,280 --> 00:20:14,359 Speaker 4: really on employment data inflation data? It feels like that 397 00:20:14,480 --> 00:20:17,480 Speaker 4: has shifted as we've been moving the past couple of years. 398 00:20:17,560 --> 00:20:19,560 Speaker 4: What are you keeping an eye on, which prints really 399 00:20:19,600 --> 00:20:20,560 Speaker 4: are most important to you? 400 00:20:21,880 --> 00:20:23,960 Speaker 8: I am absolutely focused on inflation. 401 00:20:24,200 --> 00:20:27,200 Speaker 3: So we have seen the focus shift from FED messaging 402 00:20:27,440 --> 00:20:29,199 Speaker 3: in recent months and quarters. 403 00:20:29,560 --> 00:20:32,000 Speaker 8: Really that's because when rates started coming down there. 404 00:20:32,000 --> 00:20:35,200 Speaker 3: They're looking at the excuse me, the employment side of 405 00:20:35,240 --> 00:20:38,640 Speaker 3: their dual mandate. They're saying, we don't want further loosening 406 00:20:38,800 --> 00:20:41,800 Speaker 3: in the labor market. As I follow the jobs market, 407 00:20:41,960 --> 00:20:44,480 Speaker 3: so much of that is just based on demographics, the 408 00:20:44,600 --> 00:20:46,960 Speaker 3: number of jobs we need to fill versus the number 409 00:20:47,000 --> 00:20:47,679 Speaker 3: of workers we. 410 00:20:47,720 --> 00:20:50,240 Speaker 8: Have to fill those jobs. Right now, that is still 411 00:20:50,400 --> 00:20:51,639 Speaker 8: not a one to one ratio. 412 00:20:51,760 --> 00:20:55,440 Speaker 3: We have more than one job opening for everyone unemployed worker. 413 00:20:55,880 --> 00:20:58,160 Speaker 3: So if we're looking at loosening in the labor market, 414 00:20:58,280 --> 00:21:01,480 Speaker 3: I don't expect a major recession, major economic event this year. 415 00:21:01,800 --> 00:21:04,119 Speaker 3: What could cause that loosening is more people coming in 416 00:21:04,359 --> 00:21:08,960 Speaker 3: rite more either students leaving school aging into the workforce, 417 00:21:09,680 --> 00:21:13,200 Speaker 3: more existing prime age workers looking for jobs who hadn't 418 00:21:13,200 --> 00:21:16,000 Speaker 3: been participating in the labor market. Neither of those things 419 00:21:16,080 --> 00:21:19,840 Speaker 3: seem particularly likely right now to really sway the tide. 420 00:21:20,000 --> 00:21:23,480 Speaker 3: So I see the labor market as yes, directionally loosening, 421 00:21:23,560 --> 00:21:27,160 Speaker 3: but still very tight by historical standards, and that isn't 422 00:21:27,240 --> 00:21:30,280 Speaker 3: going anywhere just due to the numbers of people and 423 00:21:30,320 --> 00:21:33,200 Speaker 3: how they balance up. So with that set, the FED 424 00:21:33,400 --> 00:21:36,440 Speaker 3: can't really put too much pressure on that side of 425 00:21:36,520 --> 00:21:36,959 Speaker 3: the scale. 426 00:21:37,280 --> 00:21:38,560 Speaker 8: And inflation is the side. 427 00:21:38,640 --> 00:21:41,320 Speaker 3: We have a lot of fundamental drivers that are starting 428 00:21:41,400 --> 00:21:44,159 Speaker 3: to signal inflation and picking back up, especially by the 429 00:21:44,240 --> 00:21:46,800 Speaker 3: latter half of this year. So my concern as an 430 00:21:46,800 --> 00:21:48,920 Speaker 3: economist is you know, we don't want to take the 431 00:21:49,000 --> 00:21:51,679 Speaker 3: eye off the ball of the inflation side, because if 432 00:21:51,720 --> 00:21:54,160 Speaker 3: that does pick up, I think there's a very reasonable 433 00:21:54,240 --> 00:21:56,560 Speaker 3: chance that we could see the FED start to talk 434 00:21:56,600 --> 00:22:00,200 Speaker 3: again about raising rates by late twenty twenty five. I 435 00:22:00,240 --> 00:22:01,560 Speaker 3: don't think that's off the table. 436 00:22:02,040 --> 00:22:06,480 Speaker 6: So as an employer, I can attract employees because I'm 437 00:22:06,640 --> 00:22:07,560 Speaker 6: going to pay them more. 438 00:22:09,400 --> 00:22:10,800 Speaker 8: At the end of the day, you can do a 439 00:22:10,880 --> 00:22:13,879 Speaker 8: lot for culture. You can reach out and have a mission. 440 00:22:13,960 --> 00:22:16,600 Speaker 6: Well, no, I'm getting to the inflation component culture. 441 00:22:16,640 --> 00:22:20,000 Speaker 3: Okay, no, But at the end of the day, that's 442 00:22:20,040 --> 00:22:22,320 Speaker 3: what folks are looking at. How do you attract someone 443 00:22:22,440 --> 00:22:25,359 Speaker 3: to you and of the group across the street. This 444 00:22:25,640 --> 00:22:27,600 Speaker 3: generation is a little bit more willing to. 445 00:22:27,760 --> 00:22:28,320 Speaker 2: Move, you know. 446 00:22:28,400 --> 00:22:30,159 Speaker 3: They sure, we love the mission, We love to be 447 00:22:30,240 --> 00:22:31,639 Speaker 3: part of something, But at the end of the day, 448 00:22:31,720 --> 00:22:34,439 Speaker 3: the dollars are what they get work. So, yes, that's 449 00:22:34,480 --> 00:22:37,360 Speaker 3: why wage inflation is so elevated, and I would expect. 450 00:22:37,040 --> 00:22:38,080 Speaker 8: It to continue to be so. 451 00:22:39,080 --> 00:22:42,760 Speaker 6: Culture. The culture, well, I get to work with Nora, 452 00:22:42,920 --> 00:22:43,680 Speaker 6: That's why I'm here. 453 00:22:43,920 --> 00:22:44,920 Speaker 4: I get to work with John. 454 00:22:46,080 --> 00:22:47,480 Speaker 6: It's a real love fest, isn't it. 455 00:22:48,560 --> 00:22:49,520 Speaker 4: And it's not even February. 456 00:22:49,600 --> 00:22:53,000 Speaker 6: Yet, what's your expectation for We'll put you on the spot. 457 00:22:53,440 --> 00:22:56,320 Speaker 6: When are they going to cut? Yeah, you mentioned raising actually, 458 00:23:00,000 --> 00:23:00,880 Speaker 6: so as for when. 459 00:23:00,800 --> 00:23:03,560 Speaker 8: They cut, I don't have a horse in that race. 460 00:23:03,880 --> 00:23:07,040 Speaker 3: I think two more cuts is a reasonable expectation, but 461 00:23:07,119 --> 00:23:09,240 Speaker 3: if it's only one, I'm not going to lose sleep 462 00:23:09,320 --> 00:23:13,520 Speaker 3: over that Directionally, we're seeing rates increase. We've already seen 463 00:23:13,920 --> 00:23:16,680 Speaker 3: inflation expectations bring kind of market rates back. 464 00:23:16,720 --> 00:23:18,639 Speaker 8: If you look at even mortgage rates, those are back 465 00:23:18,680 --> 00:23:20,360 Speaker 8: above seven percent this week. 466 00:23:20,480 --> 00:23:23,840 Speaker 3: So the impetus is really to the upside, especially by 467 00:23:23,920 --> 00:23:26,280 Speaker 3: second half of this year. So the ultimate timing of 468 00:23:26,359 --> 00:23:30,320 Speaker 3: that exact low the exact level within twenty five basis points. Again, 469 00:23:30,720 --> 00:23:32,919 Speaker 3: that doesn't matter. Big picture, we don't need to split hair, 470 00:23:33,000 --> 00:23:33,600 Speaker 3: So we need to look. 471 00:23:33,480 --> 00:23:35,520 Speaker 8: At the general direction. If you need to do borrowing, 472 00:23:35,600 --> 00:23:38,040 Speaker 8: either as an individual or business, this is probably the 473 00:23:38,119 --> 00:23:38,639 Speaker 8: time to do it. 474 00:23:39,359 --> 00:23:42,359 Speaker 4: Lauren, you mentioned that shelter costs are still a bit sticky. 475 00:23:42,400 --> 00:23:44,280 Speaker 4: Can you just give us a bit more detail about 476 00:23:44,280 --> 00:23:45,600 Speaker 4: what's going on in the housing space. 477 00:23:46,680 --> 00:23:47,760 Speaker 8: Sure, housing is tight. 478 00:23:47,960 --> 00:23:50,680 Speaker 3: We have been under building homes in this country, so 479 00:23:51,240 --> 00:23:54,720 Speaker 3: household starts have not kept up with new household formations. 480 00:23:54,800 --> 00:23:56,520 Speaker 8: We just need more inventory. 481 00:23:56,880 --> 00:23:59,240 Speaker 3: Now that's a hard thing to do today where mortgage rates, 482 00:23:59,280 --> 00:24:02,200 Speaker 3: as I just said, above seven percent, that is really 483 00:24:02,320 --> 00:24:04,919 Speaker 3: taking a bite out of affordability, not to mention the. 484 00:24:05,040 --> 00:24:06,200 Speaker 8: Value of those homes. 485 00:24:06,240 --> 00:24:09,520 Speaker 3: The list price has also really picked up since twenty twenty, 486 00:24:09,680 --> 00:24:13,600 Speaker 3: so it's a tough scenario out there for would be 487 00:24:13,720 --> 00:24:16,879 Speaker 3: first time home buyers just trying to make those dollars stretch. 488 00:24:17,400 --> 00:24:20,600 Speaker 3: And we're also seeing much less inventory come on the 489 00:24:20,680 --> 00:24:23,640 Speaker 3: market up for sale, so existing home sale have been. 490 00:24:23,600 --> 00:24:27,200 Speaker 8: More subdued with as I'll say again that rapid rise 491 00:24:27,280 --> 00:24:29,840 Speaker 8: in mortgage rates. Why would I sell my house with 492 00:24:29,960 --> 00:24:31,720 Speaker 8: a three or four percent mortgage rate. 493 00:24:31,680 --> 00:24:33,840 Speaker 3: If I have to buy another one with a seven 494 00:24:33,920 --> 00:24:36,520 Speaker 3: percent mortgage rate, that's a lot less house that I 495 00:24:36,560 --> 00:24:38,240 Speaker 3: can get for the same monthly payment. 496 00:24:38,440 --> 00:24:40,439 Speaker 8: So we're seeing folks just stay in. 497 00:24:40,480 --> 00:24:42,920 Speaker 3: Place a little bit longer in the past I'll say 498 00:24:43,080 --> 00:24:46,080 Speaker 3: six to nine months, a lot of folks have started 499 00:24:46,119 --> 00:24:47,080 Speaker 3: to just bite the bullet. 500 00:24:47,080 --> 00:24:49,200 Speaker 8: If I really need to move, I will do so. 501 00:24:49,520 --> 00:24:52,480 Speaker 8: But again, affordability is the big constraint there. 502 00:24:52,560 --> 00:24:56,159 Speaker 3: That's what's keeping many individuals in rental situations for longer 503 00:24:56,280 --> 00:24:58,520 Speaker 3: rather than going out buying that first. 504 00:24:58,320 --> 00:25:02,560 Speaker 8: Home, and those almost really aren't going away. So affordability 505 00:25:02,640 --> 00:25:03,360 Speaker 8: is the name of the game. 506 00:25:03,400 --> 00:25:06,480 Speaker 3: What's going to matter is balancing that aspect with the 507 00:25:06,560 --> 00:25:09,720 Speaker 3: wage inflation. I was just talking about more people being employed, 508 00:25:09,840 --> 00:25:12,880 Speaker 3: making more money. They have more money to spend on everything, 509 00:25:12,960 --> 00:25:17,040 Speaker 3: but housing is one major expense. So where we're seeing 510 00:25:17,200 --> 00:25:20,800 Speaker 3: some improvement in just our ability to afford housing, but 511 00:25:20,880 --> 00:25:23,520 Speaker 3: the affordability numbers themselves much worse than we were just 512 00:25:23,560 --> 00:25:24,240 Speaker 3: a few years ago. 513 00:25:24,760 --> 00:25:27,600 Speaker 6: Just anecdotally, I should point it at three point two percent. 514 00:25:28,440 --> 00:25:31,000 Speaker 6: They're going to bury me in the basement. Of course, 515 00:25:31,320 --> 00:25:33,159 Speaker 6: if the price is right, I can be out in 516 00:25:33,240 --> 00:25:34,320 Speaker 6: ten minutes, that's true. 517 00:25:34,440 --> 00:25:36,560 Speaker 4: You all like to brag anyone that has a great 518 00:25:36,880 --> 00:25:40,439 Speaker 4: mortgage rate in place. You know, we got to hear 519 00:25:40,440 --> 00:25:41,080 Speaker 4: about it for sure. 520 00:25:41,520 --> 00:25:44,119 Speaker 6: Oh, Mike McKee, seven percent, What does that do? 521 00:25:45,640 --> 00:25:48,320 Speaker 9: It keeps people sitting on their hands. Although the interesting 522 00:25:48,359 --> 00:25:49,720 Speaker 9: thing is it came out of the same day. We 523 00:25:49,800 --> 00:25:53,640 Speaker 9: saw a thirty three percent increase in mortgage applications next month. 524 00:25:53,760 --> 00:25:57,800 Speaker 9: Most of that was refi and I'm not sure why 525 00:25:57,920 --> 00:25:59,879 Speaker 9: people were refining when raches go. 526 00:26:00,200 --> 00:26:00,720 Speaker 4: I'm curious. 527 00:26:00,800 --> 00:26:05,320 Speaker 6: But Mike mcke's Lauren, I didn't mean to upstate you. 528 00:26:05,440 --> 00:26:09,360 Speaker 6: Lauren Citl Baker there the economist, senior consulting speaker from 529 00:26:09,560 --> 00:26:13,000 Speaker 6: ITR Economics. Thank you very much for stopping by today. 530 00:26:13,440 --> 00:26:17,800 Speaker 6: Mike McKee, our economics correspondent, among other things, hanging out 531 00:26:17,880 --> 00:26:21,400 Speaker 6: his shingle, what was your big takeaway from the inflation 532 00:26:21,520 --> 00:26:22,280 Speaker 6: report this morning? 533 00:26:22,720 --> 00:26:23,240 Speaker 2: Good enough? 534 00:26:24,119 --> 00:26:26,960 Speaker 9: It wasn't too hot, it wasn't too cold. We had 535 00:26:26,960 --> 00:26:30,200 Speaker 9: a little bit of extra strength in the headline, a 536 00:26:30,240 --> 00:26:34,119 Speaker 9: little bit less in the core. Both went up on 537 00:26:34,240 --> 00:26:36,840 Speaker 9: a year over a year basis, but less than anticipated. 538 00:26:36,960 --> 00:26:39,080 Speaker 6: So the markets are taking that. I mean, I wasn't 539 00:26:39,119 --> 00:26:41,960 Speaker 6: too excited this, but the equity market, even the bomb 540 00:26:42,040 --> 00:26:45,119 Speaker 6: market is pretty excited, up more than two percent. 541 00:26:45,440 --> 00:26:47,680 Speaker 9: I think you're not looking at any anyone in the 542 00:26:47,760 --> 00:26:50,960 Speaker 9: markets who's looking at what the actual impact of this 543 00:26:51,440 --> 00:26:54,800 Speaker 9: is on the economy, and they don't expect it to 544 00:26:55,680 --> 00:26:58,680 Speaker 9: affect the Fed meeting on January twenty ninth. Everybody's waiting 545 00:26:58,680 --> 00:27:02,719 Speaker 9: for next Monday, what does Donald Trump do? So there 546 00:27:02,840 --> 00:27:06,000 Speaker 9: was all this nervousness in the markets and everybody was 547 00:27:06,040 --> 00:27:09,920 Speaker 9: pushing yields up, which hit the stock market, and today 548 00:27:10,400 --> 00:27:10,879 Speaker 9: it gave. 549 00:27:10,760 --> 00:27:11,960 Speaker 6: Them a reason to exhale. 550 00:27:13,080 --> 00:27:15,600 Speaker 9: Wait till the end of the week. We'll see as 551 00:27:15,680 --> 00:27:17,960 Speaker 9: people get more and more nervous about what Trump may do, 552 00:27:19,080 --> 00:27:20,080 Speaker 9: whether that continues. 553 00:27:20,440 --> 00:27:22,760 Speaker 4: Yeah, as we think about this in about twenty seconds 554 00:27:22,920 --> 00:27:24,920 Speaker 4: or less, how are you thinking about the fact that 555 00:27:25,040 --> 00:27:27,480 Speaker 4: we are still not at at two percent target? What 556 00:27:27,520 --> 00:27:28,480 Speaker 4: do we need to do to get there? 557 00:27:29,280 --> 00:27:29,719 Speaker 6: Keep it up? 558 00:27:29,760 --> 00:27:32,359 Speaker 9: And that's why the Fed may keep rates on hold 559 00:27:32,480 --> 00:27:35,840 Speaker 9: for longer than possible or longer than thought, because they've 560 00:27:35,880 --> 00:27:38,399 Speaker 9: got to keep at this point the pressure on to 561 00:27:38,680 --> 00:27:40,280 Speaker 9: keep it going down towards two percent. 562 00:27:40,800 --> 00:27:46,200 Speaker 6: Okay, Mike McKay, Bloomberg International Economics and Policy corresponded, reacting 563 00:27:46,280 --> 00:27:49,520 Speaker 6: to seven percent mortgages and today's CPI. 564 00:27:51,480 --> 00:27:55,120 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 565 00:27:55,240 --> 00:27:58,320 Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android 566 00:27:58,359 --> 00:28:01,760 Speaker 1: Auto with the Bloomberg Business Listen on demand wherever you 567 00:28:01,840 --> 00:28:04,800 Speaker 1: get your podcasts, or watch us live on YouTube. 568 00:28:06,680 --> 00:28:08,960 Speaker 4: Well, we have gotten a great guest here. We have 569 00:28:09,040 --> 00:28:11,679 Speaker 4: Sema Shaw. She's a vice president of research and Insights 570 00:28:11,720 --> 00:28:14,480 Speaker 4: at Censor Tower, and she is here joining us to 571 00:28:14,560 --> 00:28:17,360 Speaker 4: talk TikTok. As we know there could be a ban 572 00:28:18,040 --> 00:28:20,000 Speaker 4: upcoming and so we're just trying to talk about the 573 00:28:20,040 --> 00:28:24,520 Speaker 4: mechanic waiting. We're waiting for them to get minute, waiting 574 00:28:24,560 --> 00:28:28,320 Speaker 4: for them to get back to us exactly Friday, right 575 00:28:28,400 --> 00:28:31,200 Speaker 4: before Friday, it would be ideal. So tell us what's 576 00:28:31,240 --> 00:28:34,000 Speaker 4: going on here and what expectations should be. Is there 577 00:28:34,040 --> 00:28:36,520 Speaker 4: any movement here with the Supreme Court? And is Byteedance 578 00:28:36,600 --> 00:28:37,520 Speaker 4: intending to budget? 579 00:28:37,560 --> 00:28:38,160 Speaker 2: All right? 580 00:28:38,320 --> 00:28:40,800 Speaker 10: So I can't speak for the Supreme Court, Unfortunately, I 581 00:28:40,800 --> 00:28:43,560 Speaker 10: don't have any insight into their decision making, but I 582 00:28:43,640 --> 00:28:47,840 Speaker 10: will say that what we're seeing what we expect to 583 00:28:47,840 --> 00:28:49,800 Speaker 10: see first, if it is ban, what we expect to see, 584 00:28:49,800 --> 00:28:51,560 Speaker 10: and I think I spoke about this was Paul earlier. 585 00:28:51,720 --> 00:28:57,480 Speaker 10: Is an ongoing shift to meta platforms, specifically Instagram because 586 00:28:57,520 --> 00:28:59,840 Speaker 10: of reels, and to YouTube's because of shorts. So if 587 00:28:59,880 --> 00:29:01,440 Speaker 10: you think about when we look at how much time 588 00:29:01,480 --> 00:29:04,160 Speaker 10: people are spending on an app, forty two percent of 589 00:29:04,240 --> 00:29:07,400 Speaker 10: people's time on Instagram is on reels, twenty eight percent 590 00:29:07,560 --> 00:29:09,760 Speaker 10: is on reels for Facebook, and twenty seven is on 591 00:29:09,880 --> 00:29:14,280 Speaker 10: shorts for YouTube. So short form video is obviously a 592 00:29:14,400 --> 00:29:16,760 Speaker 10: key driver of engagement, which is all that TikTok is. 593 00:29:16,880 --> 00:29:19,680 Speaker 10: So we expect that should it be banned, we would 594 00:29:19,720 --> 00:29:21,920 Speaker 10: expect more users to go there. But there's more at 595 00:29:21,920 --> 00:29:25,400 Speaker 10: stake than just users and hours engage. It's also in 596 00:29:25,560 --> 00:29:29,720 Speaker 10: app revenue. About twenty two percent of byteedance or TikTok's 597 00:29:29,760 --> 00:29:31,520 Speaker 10: in app revenue comes from the US, so that's a 598 00:29:31,640 --> 00:29:34,760 Speaker 10: huge chunk. And when we look at the digital advertising space, 599 00:29:35,240 --> 00:29:38,000 Speaker 10: we see about nine percent of ad spend is on TikTok. 600 00:29:38,080 --> 00:29:40,560 Speaker 10: So these are all dollars and hours engage that would 601 00:29:40,560 --> 00:29:41,280 Speaker 10: be up for grabs. 602 00:29:41,360 --> 00:29:44,960 Speaker 2: Hang on a second, TikTok twenty eight percent, twenty two 603 00:29:44,960 --> 00:29:46,400 Speaker 2: percent of their revenue comes from the. 604 00:29:46,480 --> 00:29:49,640 Speaker 10: US from their in app of their global in app. 605 00:29:49,480 --> 00:29:55,760 Speaker 2: Revenue, what percentage of in app Instagram's in app revenue 606 00:29:55,800 --> 00:29:56,520 Speaker 2: comes from China? 607 00:29:57,400 --> 00:30:00,160 Speaker 10: Now that would be an interesting question China data. It's 608 00:30:00,160 --> 00:30:02,440 Speaker 10: a little trickier for us to for cure, as you 609 00:30:02,440 --> 00:30:03,040 Speaker 10: can imagine. 610 00:30:03,040 --> 00:30:06,920 Speaker 2: But I was only posing that question because Instagram is 611 00:30:07,000 --> 00:30:10,120 Speaker 2: banned in China. Facebook is banned in China, Snapchat is 612 00:30:10,200 --> 00:30:14,360 Speaker 2: banned in China. Interest is banned in China. No US 613 00:30:14,520 --> 00:30:18,080 Speaker 2: social media apps are allowed in China, and yet we 614 00:30:18,680 --> 00:30:23,160 Speaker 2: allow Chinese social media apps to cash in here. If 615 00:30:23,600 --> 00:30:27,440 Speaker 2: the kids aren't using Instagram, I mean aren't using TikTok. 616 00:30:28,400 --> 00:30:32,760 Speaker 2: They've started downloading red Note red Note, which is also Chinese, 617 00:30:32,920 --> 00:30:35,520 Speaker 2: and Lemonade, which is also Chinese, also. 618 00:30:35,400 --> 00:30:39,280 Speaker 10: Owned by Byedance, so they're both Chinese Chinese apps, and 619 00:30:39,320 --> 00:30:42,360 Speaker 10: we've seen surges and download growth of those two apps 620 00:30:42,400 --> 00:30:45,520 Speaker 10: starting at the end of last year, and particularly in 621 00:30:45,600 --> 00:30:47,800 Speaker 10: the last week, we've seen a big bump in red 622 00:30:47,880 --> 00:30:52,280 Speaker 10: Notes downloads over one hundred percent ending through Sunday from 623 00:30:52,320 --> 00:30:56,440 Speaker 10: the prior week. So there's definitely surges of users downloading 624 00:30:56,520 --> 00:30:59,800 Speaker 10: these alternative apps. Even my teenager mentioned it, which like 625 00:30:59,840 --> 00:31:02,040 Speaker 10: the you know it's in the media, and teenager knows that, 626 00:31:02,200 --> 00:31:04,880 Speaker 10: so we're definitely seeing that search. But that doesn't really 627 00:31:05,040 --> 00:31:09,040 Speaker 10: make sense if that if the app because it's banned 628 00:31:09,080 --> 00:31:12,160 Speaker 10: because it's Chinese, because these are also Chinese owned, So 629 00:31:12,440 --> 00:31:14,000 Speaker 10: I'm not sure how that would work in the long 630 00:31:14,080 --> 00:31:16,000 Speaker 10: run or if people would just move over and eventually 631 00:31:16,000 --> 00:31:19,440 Speaker 10: those would also get banned if they do. But the 632 00:31:19,560 --> 00:31:22,120 Speaker 10: other social media apps like Instagram and YouTube don't have 633 00:31:22,280 --> 00:31:27,200 Speaker 10: the same in app monetization that TikTok does for creators 634 00:31:27,240 --> 00:31:29,600 Speaker 10: and stuff, so they would have to evolve their own 635 00:31:29,680 --> 00:31:32,800 Speaker 10: platforms to make it as lucrative for creators as TikTok is. 636 00:31:32,840 --> 00:31:35,040 Speaker 2: I just want I'll just clarify, for the sake of 637 00:31:35,520 --> 00:31:37,280 Speaker 2: those of you using a ton of TikTok. 638 00:31:37,960 --> 00:31:39,120 Speaker 4: Why who you're looking at? 639 00:31:39,200 --> 00:31:43,120 Speaker 2: Why majorities? If both parties are against it, so he's 640 00:31:43,120 --> 00:31:46,400 Speaker 2: looking at me. One concern is that the Chinese could 641 00:31:46,520 --> 00:31:49,800 Speaker 2: use your data to spy on you or to blackmail you. 642 00:31:50,000 --> 00:31:50,240 Speaker 4: Okay. 643 00:31:50,480 --> 00:31:54,920 Speaker 2: One concern is that China could shape the algorithm to 644 00:31:55,760 --> 00:31:59,200 Speaker 2: send out more misinformation or stir up social unrest. And 645 00:31:59,240 --> 00:32:03,400 Speaker 2: another concern is that China could use software updates for 646 00:32:03,520 --> 00:32:08,440 Speaker 2: TikTok or red Hat or Red No Red Nook to 647 00:32:08,600 --> 00:32:12,640 Speaker 2: infiltrate your devices and to implant malware on your stuff. 648 00:32:12,880 --> 00:32:15,000 Speaker 4: Valid concerns, right, but. 649 00:32:15,040 --> 00:32:16,720 Speaker 2: No one nobody cares. 650 00:32:17,080 --> 00:32:21,680 Speaker 10: Apparently it's a useful, moneyful demographic, so I guess they. 651 00:32:21,840 --> 00:32:26,160 Speaker 2: Donald Trump also doesn't seem to care, so we'll see. 652 00:32:26,520 --> 00:32:29,240 Speaker 10: Well, I think he did care, and then he pivoted, 653 00:32:29,360 --> 00:32:31,160 Speaker 10: and now now he doesn't doesn't care. 654 00:32:31,280 --> 00:32:35,320 Speaker 2: Right because Jeff Yes from Susquehanna, who has a fifteen 655 00:32:35,320 --> 00:32:38,040 Speaker 2: percent stake in Bite Dance, has given at least eight 656 00:32:38,120 --> 00:32:40,280 Speaker 2: million dollars to a Republican super. 657 00:32:40,080 --> 00:32:43,400 Speaker 10: Pac Well, also, Donald Trump has his own social media platform. 658 00:32:43,480 --> 00:32:45,440 Speaker 4: This is true, which is very small, but it has. 659 00:32:45,400 --> 00:32:49,680 Speaker 10: Grown significantly since during the time Social Truth Social. 660 00:32:49,840 --> 00:32:51,320 Speaker 2: Yes, I wonder how that doesn't China. 661 00:32:53,560 --> 00:32:55,600 Speaker 4: So I mean, as we think about the app, what 662 00:32:55,800 --> 00:32:58,200 Speaker 4: are the largest user based how much you mentioned twenty 663 00:32:58,240 --> 00:33:00,520 Speaker 4: two percent of their in app revue you comes from 664 00:33:00,560 --> 00:33:02,800 Speaker 4: in the United States? What about users are. 665 00:33:02,720 --> 00:33:05,680 Speaker 10: We users tend to skew younger. About ten percent of 666 00:33:05,720 --> 00:33:09,480 Speaker 10: their monthly active users come from the US. But we've 667 00:33:09,520 --> 00:33:11,800 Speaker 10: also seen this is sort of a separate, secular issue. 668 00:33:11,840 --> 00:33:14,440 Speaker 10: We've seen a little bit of i would say mobile 669 00:33:14,520 --> 00:33:17,400 Speaker 10: app fatigue, where you're seeing a pullback in usage of 670 00:33:17,520 --> 00:33:22,240 Speaker 10: cross dating apps streaming across the board, including social So 671 00:33:22,360 --> 00:33:24,920 Speaker 10: that's sort of a secular thing. And within TikTok, because 672 00:33:24,920 --> 00:33:26,640 Speaker 10: it grew so fast was sort of the first mover 673 00:33:26,800 --> 00:33:30,160 Speaker 10: in short form video, it's seen a pullback. Like it's 674 00:33:30,680 --> 00:33:32,840 Speaker 10: monthly active users were down in the fourth quarter one 675 00:33:32,880 --> 00:33:35,720 Speaker 10: percent year over year DA user down four percent, So 676 00:33:35,840 --> 00:33:38,480 Speaker 10: it's not seeing that same growth that the other platforms 677 00:33:38,520 --> 00:33:40,720 Speaker 10: are seeing because it was already sort of saturated. 678 00:33:40,760 --> 00:33:42,640 Speaker 4: Interesting, my main question is what does this mean for 679 00:33:42,720 --> 00:33:45,120 Speaker 4: small businesses because you've seen a lot of businesses that 680 00:33:45,280 --> 00:33:47,640 Speaker 4: have actually blown up through the use of TikTok, or 681 00:33:47,680 --> 00:33:50,040 Speaker 4: maybe you're introduced to new brands through the app. So 682 00:33:50,080 --> 00:33:52,360 Speaker 4: I'm curious how that will actually play out in effect. 683 00:33:52,560 --> 00:33:54,160 Speaker 10: I mean, I think they would be forced to try 684 00:33:54,200 --> 00:33:56,760 Speaker 10: to move to Instagram or to YouTube and try to 685 00:33:56,840 --> 00:33:59,680 Speaker 10: monetize on those platforms, but again, I don't know if 686 00:33:59,680 --> 00:34:01,959 Speaker 10: those are established are set up as to be as 687 00:34:02,080 --> 00:34:04,600 Speaker 10: lucrative for the creators. So they probably would have with 688 00:34:04,800 --> 00:34:08,040 Speaker 10: demand being forced to evolve their own platforms, but I 689 00:34:08,080 --> 00:34:11,040 Speaker 10: don't I think that would obviously be a huge impact 690 00:34:11,160 --> 00:34:11,960 Speaker 10: to those businesses. 691 00:34:12,000 --> 00:34:17,240 Speaker 2: And why are those why are those American owned apps? 692 00:34:17,680 --> 00:34:19,440 Speaker 2: And by the way, I use the term very loosely, 693 00:34:19,520 --> 00:34:21,200 Speaker 2: I'm being a little bit tongue in cheek. Right, they're 694 00:34:21,239 --> 00:34:27,520 Speaker 2: obviously publicly traded companies anyone can invest, not just American citizens. 695 00:34:27,560 --> 00:34:31,040 Speaker 2: But why aren't they as popular as these sort of 696 00:34:31,080 --> 00:34:32,640 Speaker 2: byte dance owned apps. 697 00:34:33,400 --> 00:34:35,880 Speaker 10: Well, I think TikTok in particular was a little of 698 00:34:35,960 --> 00:34:38,920 Speaker 10: a pioneer and short form video and that is what 699 00:34:40,040 --> 00:34:45,640 Speaker 10: kid we had, and that's why you were a kid then, right, Well, 700 00:34:45,680 --> 00:34:48,360 Speaker 10: that's why you saw the surge and investment for reels 701 00:34:48,440 --> 00:34:51,560 Speaker 10: for Facebook and Instagram for shorts, and I believe Snapchat 702 00:34:51,680 --> 00:34:54,200 Speaker 10: is building out spotlight. So short form video is where 703 00:34:54,320 --> 00:34:57,080 Speaker 10: people's attention and engagement is going. So because it's so 704 00:34:57,200 --> 00:35:00,640 Speaker 10: short attention span literally and in fact, because of that, 705 00:35:00,840 --> 00:35:03,200 Speaker 10: it's actually competitor or streaming and things like that. Think 706 00:35:03,239 --> 00:35:05,799 Speaker 10: because time is finite, dollars are finite, right, So it's 707 00:35:05,960 --> 00:35:09,760 Speaker 10: much easier to watch a less well produced one minute 708 00:35:09,960 --> 00:35:13,120 Speaker 10: video than a whole show, right. And you're even seeing 709 00:35:13,239 --> 00:35:15,919 Speaker 10: sort of the rise of short drama apps where there's 710 00:35:16,360 --> 00:35:19,040 Speaker 10: sort of very poorly acted stories that come out and 711 00:35:19,040 --> 00:35:19,880 Speaker 10: you watch you a minute of it. 712 00:35:20,200 --> 00:35:23,040 Speaker 2: Seema, we have unfortunately running up against your clock. We 713 00:35:23,120 --> 00:35:25,120 Speaker 2: could have had you on for the whole hour because 714 00:35:25,120 --> 00:35:27,480 Speaker 2: it is fascinating stuff and your data, your data is 715 00:35:27,520 --> 00:35:30,080 Speaker 2: really fascinating as well, seem As Shaw, vice president insights 716 00:35:30,400 --> 00:35:33,200 Speaker 2: over at Censor Towers and they collect that data. 717 00:35:34,000 --> 00:35:38,640 Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify, 718 00:35:38,880 --> 00:35:42,319 Speaker 1: and anywhere else you get your podcasts. Listen live each 719 00:35:42,400 --> 00:35:45,799 Speaker 1: weekday ten am to noon Eastern on Bloomberg dot com, 720 00:35:46,239 --> 00:35:49,719 Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app. 721 00:35:50,200 --> 00:35:53,080 Speaker 1: You can also watch us live every weekday on YouTube 722 00:35:53,520 --> 00:35:55,720 Speaker 1: and always on the Bloomberg Terminal