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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern

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Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business App.

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Speaker 1: Listen on demand wherever you get your podcasts, or watch

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Speaker 1: us live on YouTube.

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Speaker 2: Jim Karen joins us right now.

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Speaker 3: Process of Solutions, Morgan Stanley Investment Management.

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Speaker 2: How many times did you rip up your midyear report?

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Speaker 2: Many times? I mean you're all worked from.

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Speaker 3: Home because you couldn't stand each other by the time

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Speaker 3: you were done it. What midyear report?

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Speaker 4: So, I think one of the big questions that we have,

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Speaker 4: or really thoughts, is that we're going to start to

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Speaker 4: see more clarity in the second half of the year

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Speaker 4: as opposed to some of the uncertainty.

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Speaker 2: Now.

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Speaker 4: The reality is that going into the first half of

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Speaker 4: the year we had tariff Paul See, we didn't know

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Speaker 4: exactly what that was going to be, how the economic

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Speaker 4: data was going to shape out, and what the what

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Speaker 4: the market reaction would be. Now a lot of that

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Speaker 4: is going to be behind us in the second half

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Speaker 4: of the year. For better or for worse, you're going

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Speaker 4: to know what the tariff policy is. For better or

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Speaker 4: for worse, you're going to know what the FED is

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Speaker 4: thinking and what they're going to do in response to that.

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Speaker 4: So that reduction in uncertainty does add some visibility to

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Speaker 4: the future and earnings and cash flows. And once the

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Speaker 4: budget bill passes, this is the last nugget of uncertainty.

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Speaker 4: Once that passes, I think then corporations will have more

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Speaker 4: visibility into the future. And then from there you just

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Speaker 4: adjust your prices. You adjust, and you adapt like markets do,

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Speaker 4: and you move on.

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Speaker 5: It seems like, I boy, if you look at the

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Speaker 5: S and P five hundred and had that twenty percent

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Speaker 5: sell off, we've retraced all that up five percent on

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Speaker 5: the year. Here has a market already done that? It

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Speaker 5: seems wraps and markets already done that.

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Speaker 4: So I'm in the camp that I have a little

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Speaker 4: bit more optimism to the upside, okay. And the reason

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Speaker 4: I say that is because when we saw the upside

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Speaker 4: surprise and earnings in the first quarter, typically what analysts

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Speaker 4: would do is they would increase their full year earnings

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Speaker 4: run rates and their earnings forecast.

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Speaker 6: They didn't.

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Speaker 4: They actually took it down because of the tariff uncertainty.

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Speaker 4: So even right now there's still a lot of uncertainty

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Speaker 4: relative to the pricing and earnings going forward. We think

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Speaker 4: that earnings are underestimated by about by about ten to

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Speaker 4: twelve dollars. Another way of saying that is that if

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Speaker 4: we didn't have this tariff uncertainty, the earnings estimates today

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Speaker 4: would be ten to twelve dollars higher. So if you

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Speaker 4: were to put a multiple on that of twenty one

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Speaker 4: or twenty two, you could start to envision sixty five,

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Speaker 4: sixty eight, even sixty eight hundred. Now that's not my forecast.

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Speaker 4: What I'm saying is that that's the upside risk that

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Speaker 4: I believe is underappreciated by markets.

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Speaker 3: And look, you, Karen, at the moment, in course, the

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Speaker 3: cliche is clipping coupons versus a total return. I'm absolutely

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Speaker 3: thunderstruck at the recovery of the Bloomberg Total Returning Corporate

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Speaker 3: Index from the laps that we had COVID and all that.

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Speaker 2: Do you just assume we.

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Speaker 3: Get back to trend price up and with the yield

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Speaker 3: coming in to assist that we get back to normal

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Speaker 3: fixed income.

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Speaker 4: I don't think that we get to the long term

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Speaker 4: normal of fixed income. The long term normal of fixed

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Speaker 4: income really existed in a downward trending interest rate cycle.

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Speaker 4: I think the interest rate cycle at best is moving sideways.

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Speaker 4: So you have two components of return and bonds. You

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Speaker 4: have the price return, right, which is what we call

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Speaker 4: the duration return, and then you've got the coupon, so

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Speaker 4: you've got to carry. I think what you can really

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Speaker 4: get out of bonds if interest rates move sideways is

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Speaker 4: effectively just the coupon component. So that's going to reduce

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Speaker 4: the long term expected return in fixed income because you

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Speaker 4: don't get the additional tail end of the price return,

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Speaker 4: You just get the coupon.

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Speaker 7: Credit risk? Are you taking credit risk in this market? Here?

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Speaker 6: We are?

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Speaker 4: Look, I mean it's treacherous. I will say that the

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Speaker 4: spread are tight. Their near historical tights to fault rates

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Speaker 4: are around average levels. The way that we think about this,

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Speaker 4: based on our view for no recession, we think that

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Speaker 4: the fault risks will stay relatively low. High yield yields

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Speaker 4: in the seven percent area. It's not the most exciting,

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Speaker 4: but it does represent a decent return. If we avoid

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Speaker 4: a recession, which we do think we will in the

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Speaker 4: second half of the year, I can get potentially just

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Speaker 4: based on the coupon about another three percent return added

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Speaker 4: to the portfolio by taking some higher yielding credit risk

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Speaker 4: less obviously if we do investment rate.

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Speaker 5: How about the US versus Europe. For the first time

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Speaker 5: in a long time, you're performing outperforming the US, and

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Speaker 5: I'm wondering, is that a short term trade coming from

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Speaker 5: the volatility in the US markets are own a year

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Speaker 5: or is it something more so?

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Speaker 4: This has been a big trade in our portfolios. It's

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Speaker 4: probably the number one theme that we ran in the

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Speaker 4: start of the year. Fourth quarter of last year, we

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Speaker 4: started to get overweight Europe versus the US, and people

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Speaker 4: thought we were nuts. This trade worked very, very well,

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Speaker 4: and still I think that Europe is in a secular

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Speaker 4: changing position where they are doing more fiscal spending. They

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Speaker 4: want to develop business, they want to grow. Now, I

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Speaker 4: think just for this year, for the next six months,

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Speaker 4: I would say that the accelerated returns in Europe are

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Speaker 4: likely to slow relative to the US, but I think

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Speaker 4: the long term trend for Europe is still good. More tactically,

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Speaker 4: over the next six months, I want to reverse that

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Speaker 4: and go more overweight US versus Europe.

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Speaker 3: Interesting, did Jim Karen youre a bit more with Morgan

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Speaker 3: Stanley yesterday friends in La Couhah with a spectacular panel

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Speaker 3: at center, including with Christine Laguard. Leguards made a cottage

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Speaker 3: industry of saying Europe needs a real bond market for

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Speaker 3: our American audience, what's a.

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Speaker 2: Likelihood did they become capitalists in the format we are?

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Speaker 2: I don't see it. There's a culture involved here.

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Speaker 4: This is a great question, a great topic. So one

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Speaker 4: of the big pushes for Europe is to really create

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Speaker 4: a securitize asset backed securities market. Europe has about thirty

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Speaker 4: three trillion dollars in savings. We know that there's been

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Speaker 4: a lot of fiscal stimulus that's come through about a

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Speaker 4: trillion euro or so. The goal is to basically leverage

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Speaker 4: that by having what we used to have in the

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Speaker 4: global financial crisis, which is these public private partnerships, basically

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Speaker 4: getting mobilizing that thirty three trillion euro in savings, creating

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Speaker 4: like an asset backed securities market where private citizens can

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Speaker 4: invest alongside the government to rebuild infrastructure and industry and

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Speaker 4: everything else in Europe. That is the big play. That's

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Speaker 4: what Leguard is talking about. This is what Dragi spoke

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Speaker 4: about too, and the Dry.

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Speaker 2: Report last year.

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Speaker 4: This is all really really big studies.

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Speaker 6: Exactly cut to the chase.

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Speaker 7: I am skeptical.

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Speaker 4: And the reason I'm skeptical over that is that European investors,

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Speaker 4: and I know them very well, they don't really like

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Speaker 4: securitized markets. So there would have to be a regulatory

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Speaker 4: change that maybe entices or maybe forces pension funds, insurance

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Speaker 4: companies to actually start to do this. But I think

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Speaker 4: on an individual business people may not as much.

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Speaker 2: Paul I talked to the Guard.

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Speaker 3: I can't remember Jackson Home maybe Marka And I said,

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Speaker 3: you got a name.

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Speaker 2: At the big Head. I mean, you know, if you

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Speaker 2: have a secure.

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Speaker 3: Lance market, it's got to be you know, in honor

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Speaker 3: of Guard, it's got to be begin. Jim Karen, thank

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Speaker 3: you so much. Morgan Stanley with us today, too short

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Speaker 3: a visit, come back again. You're based in New York, right?

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Speaker 3: Are you in New York?

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Speaker 2: Are you in New York orre you in Maine?

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Speaker 7: A little bit of both a little bit mostly in

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Speaker 7: New York.

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Speaker 3: Yes, Jim Karen, thank you.

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Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live

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Speaker 1: weekday afternoons from seven to ten am Eastern listen on

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Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or

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Speaker 1: watch us live on YouTube.

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Speaker 3: For those of you on radio today, you're lucky you're

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Speaker 3: on radio today joining us now.

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Speaker 2: And I saw Dan ives on web bush is this

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Speaker 2: is this the holiday attire we're going with this.

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Speaker 6: It's a little pre July fourth.

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Speaker 3: For the jacket you're styling it. This is not Bellanciaga.

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Speaker 3: This is is it snow something?

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Speaker 6: Yeah, snowmilk. So this is and they made it for me.

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Speaker 6: So this is a little little unique. I I was

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Speaker 6: I was thinking, maybe like I bring one in for

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Speaker 6: Keenan Sweeney, But I don't think.

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Speaker 5: I'm getting worried about our friend Dan I have here.

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Speaker 7: I mean it's going over the edge.

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Speaker 3: Here, Tesla. The numbers were down, the stock is up.

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Speaker 3: I guess just start with there.

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Speaker 6: Well, these were these in terms of whisper numbers, the

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Speaker 6: street thought it would be about three sixty five K.

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Speaker 6: So it's about twenty thousand ahead of where the street thought.

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Speaker 6: So even though in theory it is just in line

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Speaker 6: with quote unquote consensus, this is much better than I

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Speaker 6: think the street was fearing.

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Speaker 2: It's trading.

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Speaker 3: November twenty twenty one levels, it's the long range bound.

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Speaker 2: You've been an optimist. What will drive this dog higher?

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Speaker 6: Yeah, Look, I think it all comes down to autonomous.

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Speaker 6: I mean it's my view when it comes to physical AI,

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Speaker 6: Tesla and a Video the two best physical AI plays

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Speaker 6: out there. Look in deliveries clearly and some of the

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Speaker 6: Musk Trump stuff, which has been a major overhang on Tessa.

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Speaker 6: But I think we're now going into what I view

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Speaker 6: is going to be a golden age for Tesla, and

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Speaker 6: we think it's a trillion dollars incremental valuation just an

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Speaker 6: autonomous alone.

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Speaker 5: Talk to us about that business, talk to about the

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Speaker 5: autonomous play first. Where are we now with Tesla and

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Speaker 5: kind of what's the timeline that you're looking for.

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Speaker 6: Yeah, so look in Austin, our team was there and

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Speaker 6: we saw the Robotoxi's front and center. The goal is

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Speaker 6: that in a year from now, twenty twenty five cities

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Speaker 6: is where you'll have these. Now they could be geofense

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Speaker 6: in different cities in terms of areas, but going forward,

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Speaker 6: that's one where I believe twenty twenty five percent ride

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Speaker 6: sharing over the next few year is gonna be autonomous.

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Speaker 6: I mean, that's that's the vision right, and again I

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Speaker 6: think it's one where Wemo has had the first mover advantage,

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Speaker 6: but still five cities and cars that are eight x

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Speaker 6: more than Tesla's, so scale and scope. I believe they're

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Speaker 6: going to own the autonomous market in the.

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Speaker 2: Last I'm with their impressment in the Boston Globe. Folks.

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Speaker 3: All you gotta know, if you've never experienced, is rotaries

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Speaker 3: are a unique New England thing, sort of like near

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Speaker 3: against lager beer. How is a weymo going to handle

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Speaker 3: the fresh pond rotary in Boston?

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Speaker 6: Look, that's rotary at the Cape Borne Bridge. Look, and

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Speaker 6: that's that's gonna be. When you think about like where

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Speaker 6: you're gonna see these over the next three to four years,

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Speaker 6: you won't necessarily see them in small towns in Cape Cod.

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Speaker 6: It's gonna be really more city based where you're gonna

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Speaker 6: ultimately see I believe cybercabs. And at one point weimos

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Speaker 6: are you a.

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Speaker 2: Proof of concept? Now? Like can you say this works?

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Speaker 2: I mean there's still evidence to go.

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Speaker 6: I mean our team was in Austin. We saw a

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Speaker 6: front center, and I believe they'll expand the geofens era.

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Speaker 6: There's gonna be some speed bumps, But I believe the

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Speaker 6: path to level four autonomous is here.

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Speaker 7: What's level four?

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Speaker 6: Well, it's essentially no steering. We know in other words,

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Speaker 6: like you get in Keen gets into a you know,

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Speaker 6: a fancy cyber cab, gets into the back, and then

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Speaker 6: that's it.

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Speaker 2: Wow.

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Speaker 5: Okay, So talk to us about Elon Musk. He he's

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Speaker 5: presumably back at the company. What can you tell us

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Speaker 5: about Elon Musk and Tesla and his commitment?

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Speaker 7: What do we know?

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Speaker 6: Look, he I do believe he is a recommitted CEO,

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Speaker 6: and because he also understands that the future when it

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Speaker 6: comes to AI, is ultimately right now ahead of them.

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Speaker 6: But as we saw yesterday, the political theater is not helping.

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Speaker 2: Yeah, I gotta go, We gotta break news. We got

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Speaker 2: to get off Elon Musk.

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Speaker 3: You get to a real company, Microsoft to cut nine

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Speaker 3: thousand workers and second wave of major layups.

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Speaker 2: Based on your context, Dan ives Bush, are.

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Speaker 3: They laying off nine thousand or are they really repositioning

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Speaker 3: nine thousand over to something new like AI?

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Speaker 6: They're essential reposition I mean, I mean the point is

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Speaker 6: that we would call layoffs and it sounds like they're

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Speaker 6: cutting the reality is that they're also looking to significantly

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Speaker 6: higher in AI in software development. This is essentially out

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Speaker 6: with the old, in with the new, right, That's essentially

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Speaker 6: what's happening.

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Speaker 3: To see a couple of studies in the last couple

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Speaker 3: of days of the implementation of AI.

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Speaker 2: And it's jaw dropping.

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Speaker 3: The speed with which this is going is the cell

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Speaker 3: side behind how fast this is moving?

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Speaker 6: They are so bhind looks. It speaks of you know,

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Speaker 6: we've been here for you know, decade talking about like

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Speaker 6: especially you know, the last three four years. This is

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Speaker 6: just just the beginning of trillions that are going to

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Speaker 6: be spent over the next three years. And I think

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Speaker 6: you're going to continuee them catch up estimates and the bears,

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Speaker 6: you know, whether there's cell side or by side, they're

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Speaker 6: in their caves in hibernation mood. They can find AI

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Speaker 6: in the spreadsheets. Dan.

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Speaker 5: One of the bigger tech pieces of news that I

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Speaker 5: saw happened this week. Apple says it's effectively going to

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Speaker 5: outsource its AI.

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Speaker 2: I mean that to me, that is seismic.

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Speaker 6: It's side look, and I'm sure it's I believe it's

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Speaker 6: the best news that we've heard when it comes.

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Speaker 2: Downlifted in your defense it's lifted.

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Speaker 6: Because look, Tom, like we've talked about, you know, and

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Speaker 6: you've hit on so much as well. Is that the

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Speaker 6: reality is you have the best install based in the world.

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Speaker 6: You got two point four billion devices, one point five

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Speaker 6: billion iPhones. You cannot watch AI from the outside looking

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Speaker 6: and when everyone else is going one hundred miles an

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Speaker 6: hour in a Ferrari in the left lane. Perplexity, anthropic,

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Speaker 6: that's what they're gonna need to do.

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Speaker 3: I'm gonna ask a question, folks, and I'm completely making

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Speaker 3: this up as an amateur. Dan I is at webush

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Speaker 3: with us for a lengthy conversation on Tesla popping. This morning.

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Speaker 3: Microsoft cuts nine thousand workers. According to Bloomberg. Danaives they

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Speaker 3: did the search agreement with Google. I'm using Google Gemini.

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Speaker 3: How close are we to a bombshell where Apple picks

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Speaker 3: up some form of exclusive with Google Gemini. Because they've

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Speaker 3: got the touchy feely history with the search engine, why

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Speaker 3: don't they just overlay that over to Google AI like

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Speaker 3: they did with Google Search.

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Speaker 6: Well, it's I mean, but obviously you have the DOJ

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Speaker 6: and you have some of the antio.

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Speaker 2: You have to structure.

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Speaker 6: You have to structure it that's exactly.

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Speaker 2: Have you seen careful policy walk through where they do

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Speaker 2: structure it for authorities.

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Speaker 6: I believe that's the future. Because the future, when you

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Speaker 6: think about Gemini and you think might go the view

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Speaker 6: that that's a relationship that's going to actually, you know,

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Speaker 6: go essentially fall aparts the opposite. Those two are going

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Speaker 6: to join forces more and more.

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Speaker 3: To explain to culture in Cooper Tino where they say,

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Speaker 3: why are we going to redo chet redo Gemini? Just

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Speaker 3: do an agreement with them that's within the realm of regulation.

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Speaker 6: And they also look WWDC and you talk about with German,

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Speaker 6: I'm sure it was a yawner because the reality is

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Speaker 6: they were they had black eye from what happened a

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Speaker 6: year ago when they over promised and underdelivered. Now they've

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Speaker 6: recognized it's something that then they're not going to be

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Speaker 6: able to do internally. They're going to have to do

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Speaker 6: it externally. And also it speaks like the New York

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Speaker 6: City cab driver is barish on Apple right now. So

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Speaker 6: the bar is extremely low from AI to units to everything.

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Speaker 5: So for Apple, here is this one of the big

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Speaker 5: issues just out there in tech is some of the

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Speaker 5: regulatory overhang for this group The big issue for Apple,

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Speaker 5: or one of the issues for Apple is just kind

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Speaker 5: of it's it's deal with Google and search. Right where

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Speaker 5: are we on that issue for both.

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Speaker 8: Of those companies?

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Speaker 6: And Google has the trial where Apple can testify on

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Speaker 6: their behalf. So that's part of the issue right now,

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Speaker 6: is that Google's going through their own trial, and obviously

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Speaker 6: to worry is that that's going to impact the Apple allanship. Look,

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Speaker 6: they'll restructure it in a way that that continues to happen.

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Speaker 6: That's going to continue to be just a massive cash

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Speaker 6: flow for Apple.

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Speaker 5: So you don't think that cash flow to Apple is.

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Speaker 6: At risk now? Is that one where could it restructure? Yes,

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Speaker 6: but I'm believe it's at risk, and I just think

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Speaker 6: it's one where there's so many good things that could

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Speaker 6: happen from here for Apple, but none of it's priced

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Speaker 6: into the stock. That's why it's under performed. But especially

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Speaker 6: on AI given the treadmill approach, What were.

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Speaker 3: You thinking in April when we were cratering go through

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Speaker 3: the mindset? Your biggest criticism is your perbable Once again,

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Speaker 3: you nailed it by having the courage to stay with

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Speaker 3: the market. What was your mindset for people who didn't

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Speaker 3: the first week of April.

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Speaker 6: The mindset was, and we talked about that time like

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Speaker 6: Army getting if you go through it. The mindset was

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Speaker 6: that cool heads were going to prevail, and eventually they

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Speaker 6: recognized in the Trump administration that they would be cutting

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Speaker 6: tech off at the knees. And the reality is, for

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Speaker 6: the first time in thirty years, the US is ahead

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Speaker 6: of China when it comes to tech because of the

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Speaker 6: AI Revolution. So it's just one where if you're able

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Speaker 6: to kind of see through it, that's that's ultimately how

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Speaker 6: you're able to navigate these markets, and those those are

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Speaker 6: the best opportunities when everyone's like sort of going, you know,

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Speaker 6: yelling fire and a crowd, those are the opportunities.

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Speaker 3: Are you gonna yell fire in a crowded room in

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Speaker 3: a two hours special.

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Speaker 5: Tomorrow for Gene Monster and Dan ives together tomorrow, Well,

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Speaker 5: I think it's.

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Speaker 6: Just like yeah, yeah, and Gene and I do that,

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Speaker 6: you know, every six months, and I think for everyone

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Speaker 6: it's a real deep dive for the going into tech

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Speaker 6: AI Revolution winners and you g and I love doing

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Speaker 6: it together on these.

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Speaker 2: Because it works because you're both different.

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Speaker 6: I mean, big is understand exactly and are different and

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Speaker 6: you know, we're good friends, but we see things from

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Speaker 6: a different angle. But we're both ones. We don't get

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Speaker 6: caught up in the New York tournament. We see far

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Speaker 6: Astro the trees.

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Speaker 3: So the special on July fourth, look for that five

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Speaker 3: am running all through the day, ives and Monster as well.

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Speaker 3: One final question used to cash Apple. I would suggest

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Speaker 3: they're going to drop a bombshell here for the next

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Speaker 3: earnings or you know, weeks after that.

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Speaker 6: I believe before I believe this is something from like

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Speaker 6: an accelerate a buy back, something that I could see

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Speaker 6: them doing over the next call two three months, because

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Speaker 6: the reality is that they from a board in Cook's perspective,

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Speaker 6: they understand that the mark is not appreciating any of

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Speaker 6: that in the stock.

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Speaker 2: It's unbelievable.

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Speaker 3: The slope of their free cashule build versus the other

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Speaker 3: Max seven, even on a log basis, it's just unreal.

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Speaker 2: Monica wants to know where's your damn hat from?

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Speaker 6: So this is Zamaga, This is from Arnold Palmer Tournament,

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Speaker 6: big arm, Palmer fan. Ye, So this is Arnold Palmer one.

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Speaker 5: Great course, great tournament, great champion, Arnold Palmer, great drink.

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Speaker 2: I'm just having the silence seep in for his jacket.

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Speaker 5: I know there's a lot of color. Yes, and you

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Speaker 5: violate so many principles day and.

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Speaker 2: I thank you, and again a special on July fourth,

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Speaker 2: Must listen.

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Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

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Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto

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00:19:28,960 --> 00:19:31,920
Speaker 1: with the Bloomberg Business app. You can also listen live

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Speaker 1: on Amazon Alexa from our flagship New York station, Just

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Speaker 1: Say Alexa Play Bloomberg eleven thirty.

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Speaker 2: This is our Conversation of the day.

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Speaker 3: Mia mcguinnis joins as president of the Committee for a

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Speaker 3: Responsible Federal Budget. My we could go two hours. You

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Speaker 3: and I could sit on a stage in Washington and just.

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Speaker 2: Go, go go. Let me cut to the chase.

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Speaker 3: Is the long term price of this folly that our

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Speaker 3: social security check somewhere out there is at risk.

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Speaker 9: That's one of the many tremendous risks of this. I mean,

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Speaker 9: the list is so long it would take us two

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Speaker 9: hours to go through it, but let's start there. So

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Speaker 9: this is a bill that is actually when we have

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Speaker 9: just been told by the Trustees two weeks ago that

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Speaker 9: both Social Security and medicare face insolvency in eight years.

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Speaker 9: This is a bill that would hasten that insolvency for

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Speaker 9: Social Security by probably a full year. So how when

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Speaker 9: you have a president who is not alone in pandering

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Speaker 9: to seniors and making all sorts of ridiculously responsible promises

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Speaker 9: I will not fix Social Security when what we need

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Speaker 9: to do is fix it. This bill would actually jeopardize

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Speaker 9: people who depend on that program even more than they

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Speaker 9: are already vulnerable.

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Speaker 3: If I'm going to editorialize here in honor of Paul Sungas,

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Speaker 3: good Morning ninety two nine FM in Boston, Maya from

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Speaker 3: Peterson and Songas and Sam Nunn out to where we

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Speaker 3: are now. The litmus paper is our interest payments are

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Speaker 3: a moonshot. This embeds that moonshot ever further, doesn't it?

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Speaker 6: You know?

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Speaker 9: I was just talking about Paul Sagas at dinner last

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Speaker 9: night and how much I really appreciated the people who

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Speaker 9: people want like dynamism and huge sizzle and their political

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Speaker 9: candidates and I love boring and just the facts and

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Speaker 9: Ballsongus was so great at that, and there have been

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Speaker 9: others who have too. Yeah, interest payments which may be

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Speaker 9: boring to some but actually is one of the things

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Speaker 9: that people care about the most when they worry about

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Speaker 9: fiscal policy. Interest payments are squeezing out every other element

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Speaker 9: of the budget, and they are doing so at perhaps

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Speaker 9: the most important time for us to be thinking about,

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Speaker 9: how do we reposition ourselves geopolitically, What does this AI

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Speaker 9: race mean, What are the disruptions that are going to

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Speaker 9: happen to the workforce, and how do we make sure

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Speaker 9: that we use technology productively and help with those disruptions.

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Speaker 10: All of these things are where you should be.

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Speaker 9: Having the private sector of the public sector thinking through

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Speaker 9: these strategically for the long term.

442
00:22:02,119 --> 00:22:06,040
Speaker 10: Interest payments are undermining our ability to do exactly that.

443
00:22:06,240 --> 00:22:08,639
Speaker 9: They are the second largest item of the budget, they

444
00:22:08,640 --> 00:22:11,880
Speaker 9: are the single fastest item growing item of the budget,

445
00:22:12,160 --> 00:22:15,760
Speaker 9: and it is all about paying for our borrowing from

446
00:22:15,760 --> 00:22:18,320
Speaker 9: the past, which is keeping us from focusing on the

447
00:22:18,359 --> 00:22:19,520
Speaker 9: priorities of the future.

448
00:22:20,040 --> 00:22:22,000
Speaker 5: Miyan, what do you say to those folks who say, hey,

449
00:22:22,040 --> 00:22:24,040
Speaker 5: as long as people keep coming up to the FED

450
00:22:24,080 --> 00:22:26,280
Speaker 5: window and buying our treasuries, we have nothing to worry

451
00:22:26,320 --> 00:22:27,399
Speaker 5: about this definite thing.

452
00:22:28,440 --> 00:22:32,159
Speaker 9: Yeah, I understand that argument. It's the same thing to

453
00:22:32,160 --> 00:22:34,080
Speaker 9: be made by somebody who wants to walk all the

454
00:22:34,080 --> 00:22:36,160
Speaker 9: way up to a cliff and then over it before

455
00:22:36,160 --> 00:22:39,960
Speaker 9: they decide to slow down. It is nonsensical to wait

456
00:22:40,040 --> 00:22:43,000
Speaker 9: until there is a loss of confidence in our treasuries.

457
00:22:43,040 --> 00:22:46,280
Speaker 9: We have so many benefits being the reserve currency, being

458
00:22:46,320 --> 00:22:49,120
Speaker 9: the safe haven where people want to buy our debt

459
00:22:49,200 --> 00:22:52,640
Speaker 9: domestically and foreign, and that has helped keep interest rates down.

460
00:22:52,720 --> 00:22:54,800
Speaker 9: But we've also had to rely on the Fed to

461
00:22:54,880 --> 00:22:57,879
Speaker 9: keep rates down. We've seen real concerns and interest in

462
00:22:57,960 --> 00:23:01,440
Speaker 9: diversifying away from the dollar and con about those treasury markets.

463
00:23:01,680 --> 00:23:04,440
Speaker 9: We are having to manipulate the markets now in multiple

464
00:23:04,440 --> 00:23:07,720
Speaker 9: ways to create higher demands for treasuries at a time

465
00:23:07,720 --> 00:23:09,920
Speaker 9: when we know that the supply is going to be growing,

466
00:23:10,320 --> 00:23:13,560
Speaker 9: and it's as though instead of saying, hey, let's slow

467
00:23:13,640 --> 00:23:16,160
Speaker 9: down on our supply of treasuries, we're trying to think

468
00:23:16,160 --> 00:23:19,439
Speaker 9: of new fake ways to artificially create or require demand

469
00:23:19,480 --> 00:23:23,080
Speaker 9: for them. Let's structurally rebalance the budget so that we're

470
00:23:23,080 --> 00:23:26,840
Speaker 9: not so dependent on borrowing from everybody around the world.

471
00:23:27,119 --> 00:23:30,359
Speaker 3: Generous brief This morning, we continue with Maya McGinnis thrilled

472
00:23:30,359 --> 00:23:33,679
Speaker 3: dishes with us with a Committee for Responsible Federal Budget.

473
00:23:33,720 --> 00:23:35,640
Speaker 2: Good morning on your commute across the nation.

474
00:23:36,440 --> 00:23:38,040
Speaker 3: For the second half of the year, I'm going to

475
00:23:38,080 --> 00:23:42,280
Speaker 3: be emphasizing YouTube, our new technology in your office at home.

476
00:23:42,640 --> 00:23:46,040
Speaker 2: YouTube subscribe to Bloomberg Podcasts.

477
00:23:46,240 --> 00:23:49,199
Speaker 3: Okay, Maya, you're a hitter, I know, like you're in

478
00:23:49,240 --> 00:23:52,920
Speaker 3: the Saint Regi's part. It's another Maria, it's another Capuano.

479
00:23:53,280 --> 00:23:56,800
Speaker 3: We're talking, Maya about the gritty hotel and Oprah there

480
00:23:56,840 --> 00:23:59,800
Speaker 3: for the bezos wedding in Venice. Let's move to Amaya

481
00:24:00,240 --> 00:24:05,120
Speaker 3: out in the Saint Regis Barmya. In Washington, Republicans are

482
00:24:05,119 --> 00:24:10,360
Speaker 3: doing Republican politics of another time in place. Isn't there

483
00:24:10,520 --> 00:24:17,520
Speaker 3: modern constituency more conservative and more genuinely worried about our deficit.

484
00:24:17,840 --> 00:24:20,919
Speaker 2: Do the Republicans get that linkage?

485
00:24:21,840 --> 00:24:22,040
Speaker 11: You know?

486
00:24:22,240 --> 00:24:25,240
Speaker 9: I think you can't even say the Republicans and mean

487
00:24:25,280 --> 00:24:28,240
Speaker 9: one thing at this point. There's so many different factions

488
00:24:28,240 --> 00:24:31,080
Speaker 9: to the Republican Party. It's true for the Democrats as well,

489
00:24:31,119 --> 00:24:33,240
Speaker 9: but the spotlight is on them and their.

490
00:24:33,119 --> 00:24:36,120
Speaker 10: Differences right now. It's been really interesting.

491
00:24:35,680 --> 00:24:40,320
Speaker 9: To watch the development of this reconciliation package because you

492
00:24:40,440 --> 00:24:43,840
Speaker 9: have the old Republicans, those who believed in lowering tax

493
00:24:43,920 --> 00:24:46,600
Speaker 9: rates and believe that that would funnel enough growth offset

494
00:24:46,640 --> 00:24:50,080
Speaker 9: significant amounts of this. You have the Maga Republicans who

495
00:24:50,119 --> 00:24:53,000
Speaker 9: are really much more populist and are worried about these

496
00:24:53,080 --> 00:24:56,600
Speaker 9: changes to entitlement benefits. Remember, Republicans used to acknowledge we

497
00:24:56,640 --> 00:24:59,840
Speaker 9: needed to fix entitlements. Now they're running away from Social

498
00:25:00,000 --> 00:25:01,800
Speaker 9: Security and Medicare, which are the two we need to

499
00:25:01,840 --> 00:25:04,800
Speaker 9: focus on. And there's disagreements about how far we should

500
00:25:04,840 --> 00:25:07,960
Speaker 9: go with food stamps or Medicaid, And there is just

501
00:25:08,400 --> 00:25:13,120
Speaker 9: a huge disagreement within the party. Are they the tech leaders,

502
00:25:13,400 --> 00:25:15,560
Speaker 9: are they the populace? Have they taken many from the

503
00:25:15,600 --> 00:25:17,480
Speaker 9: Democrats who want entirely different things?

504
00:25:17,880 --> 00:25:18,800
Speaker 10: And I think that the.

505
00:25:18,760 --> 00:25:21,679
Speaker 9: Tough thing with fiscal policy is nobody really wants the

506
00:25:21,680 --> 00:25:24,560
Speaker 9: policies that we have to contend with in order to

507
00:25:24,560 --> 00:25:27,240
Speaker 9: fix our debt and deficit, which is getting more revenues,

508
00:25:27,480 --> 00:25:29,680
Speaker 9: controlling our spending, and fixing our entitlements.

509
00:25:29,920 --> 00:25:31,840
Speaker 10: Nobody wants to tell voters the truth about them.

510
00:25:31,920 --> 00:25:33,800
Speaker 3: Paul Sart he wants to get eight questions in here.

511
00:25:34,800 --> 00:25:37,920
Speaker 3: Maya let me get one more question in before Paul Sweeney,

512
00:25:38,280 --> 00:25:41,520
Speaker 3: Is there any evidence that you can grow your way

513
00:25:41,640 --> 00:25:43,359
Speaker 3: out of a debt in a deficit?

514
00:25:43,760 --> 00:25:46,640
Speaker 2: Back to George Washington, you.

515
00:25:46,600 --> 00:25:48,600
Speaker 10: Know, you know what is stunning.

516
00:25:48,640 --> 00:25:51,240
Speaker 9: So one of the biggest fights because this bill that

517
00:25:51,240 --> 00:25:55,000
Speaker 9: they're on the edge of passing is so fiscally reckless.

518
00:25:55,160 --> 00:25:57,160
Speaker 9: One of the arguments has been, don't worry, We're going

519
00:25:57,200 --> 00:25:58,040
Speaker 9: to grow our way out of it.

520
00:25:58,080 --> 00:26:02,000
Speaker 10: We've heard that argument from the President hour ago. Exactly.

521
00:26:02,280 --> 00:26:05,720
Speaker 9: It's a steady drumbeat of we're going to have astronomical growth.

522
00:26:05,800 --> 00:26:10,320
Speaker 9: Never mind that no credible projections believe.

523
00:26:10,000 --> 00:26:12,840
Speaker 10: That that last time around. They say, oh, we had

524
00:26:12,920 --> 00:26:15,280
Speaker 10: much more growth than that was expected after the last

525
00:26:15,280 --> 00:26:15,680
Speaker 10: tax set.

526
00:26:16,080 --> 00:26:19,560
Speaker 9: That came from inflation, and that came from recovering from

527
00:26:19,600 --> 00:26:22,719
Speaker 9: a pandemic. Actually, the people who are estimating this were

528
00:26:22,760 --> 00:26:23,840
Speaker 9: pretty close to correct.

529
00:26:24,359 --> 00:26:26,280
Speaker 10: The dangerous thing now is that our debt.

530
00:26:26,160 --> 00:26:28,880
Speaker 9: Is so high that the growth we will have from

531
00:26:29,000 --> 00:26:32,720
Speaker 9: tax cuts is likely to be counterbalanced by the negative

532
00:26:32,760 --> 00:26:34,639
Speaker 9: effects from the higher debt levels.

533
00:26:34,840 --> 00:26:35,720
Speaker 10: And in fact, if.

534
00:26:35,560 --> 00:26:38,640
Speaker 9: You use dynamic scoring, which is something I would argue

535
00:26:38,640 --> 00:26:41,320
Speaker 9: the Committee for Responsible Federal Budget would argue, we should

536
00:26:41,320 --> 00:26:44,880
Speaker 9: look at, yeah, those dynamic scores so that this bill

537
00:26:44,920 --> 00:26:48,600
Speaker 9: will slow growth, that the effect would be more damaging

538
00:26:48,600 --> 00:26:51,919
Speaker 9: because the debt effects will be so damaging themselves.

539
00:26:51,960 --> 00:26:55,440
Speaker 3: The red SOX use dynamic scoring. I just so you understand,

540
00:26:55,560 --> 00:26:56,639
Speaker 3: get one more in here.

541
00:26:56,520 --> 00:26:59,359
Speaker 5: My real quickly, how do we get the electric that

542
00:26:59,480 --> 00:27:03,000
Speaker 5: care about the national debt and deficits. I've been on

543
00:27:03,040 --> 00:27:05,600
Speaker 5: global wall since since eighty six. We've been talking about

544
00:27:05,640 --> 00:27:07,440
Speaker 5: it forever. Nobody cares.

545
00:27:08,680 --> 00:27:11,639
Speaker 10: Yeah, that is the absolute most important question.

546
00:27:11,760 --> 00:27:13,800
Speaker 9: Because what you hear from members of Congress all the

547
00:27:13,800 --> 00:27:16,000
Speaker 9: time is, I know we need to make changes, but

548
00:27:16,080 --> 00:27:18,919
Speaker 9: nobody cares about this issue. I don't hear from everybody,

549
00:27:19,400 --> 00:27:21,040
Speaker 9: and I will say that my response to that is

550
00:27:21,400 --> 00:27:24,040
Speaker 9: to your job, tell them why it matters. Like you

551
00:27:24,119 --> 00:27:27,439
Speaker 9: can't expect voters from the bottom up to create huge

552
00:27:27,440 --> 00:27:30,680
Speaker 9: marches about this issue and say, please raise my taxes,

553
00:27:30,880 --> 00:27:31,720
Speaker 9: cut my spending.

554
00:27:31,960 --> 00:27:33,679
Speaker 10: There's no way that that is going to ripple up

555
00:27:33,720 --> 00:27:37,080
Speaker 10: from the bottom. But if you have trusted resources.

556
00:27:36,560 --> 00:27:38,840
Speaker 9: And the problem is there's so little trust these days,

557
00:27:39,040 --> 00:27:42,280
Speaker 9: but if you have politicians leveling with voters, listen, social

558
00:27:42,320 --> 00:27:44,440
Speaker 9: security will be insolvent in eight years.

559
00:27:44,480 --> 00:27:46,359
Speaker 10: There are ways to fix it, but we need to

560
00:27:46,400 --> 00:27:47,240
Speaker 10: start immediately.

561
00:27:47,560 --> 00:27:47,800
Speaker 3: Listen.

562
00:27:48,000 --> 00:27:50,520
Speaker 9: We have debts that are near record level, and if

563
00:27:50,520 --> 00:27:53,239
Speaker 9: we don't make changes, it weakens both our economy and

564
00:27:53,320 --> 00:27:57,440
Speaker 9: our national security. If voters heard that from the top down,

565
00:27:57,760 --> 00:28:00,520
Speaker 9: I think they'd start to believe this. You hear Secretary

566
00:28:00,600 --> 00:28:03,480
Speaker 9: Besant talking about, Hey, we need to bring our deficits

567
00:28:03,560 --> 00:28:06,359
Speaker 9: down to three percent of GDP. You hear Ray Dalio

568
00:28:06,480 --> 00:28:07,240
Speaker 9: saying the same thing.

569
00:28:07,480 --> 00:28:08,040
Speaker 10: Those are the.

570
00:28:08,000 --> 00:28:10,680
Speaker 9: Exact right goals. We need to stop moving in the

571
00:28:10,720 --> 00:28:14,040
Speaker 9: wrong direction. Pick a fiscal goal like that idea, Let's

572
00:28:14,040 --> 00:28:16,840
Speaker 9: get the deficit to three percent of GDP and evaluate

573
00:28:17,040 --> 00:28:20,359
Speaker 9: every piece of legislation relative to whether it accomplish it

574
00:28:20,440 --> 00:28:21,400
Speaker 9: is getting closer to.

575
00:28:21,359 --> 00:28:21,760
Speaker 6: That or not.

576
00:28:21,960 --> 00:28:23,720
Speaker 2: Miam Againnis, thank you so much.

577
00:28:28,359 --> 00:28:32,240
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

578
00:28:32,280 --> 00:28:35,600
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto

579
00:28:35,720 --> 00:28:38,560
Speaker 1: with the Bloomberg Business app. You can also watch us

580
00:28:38,600 --> 00:28:42,480
Speaker 1: live every weekday on YouTube and always on the Bloomberg Terminal.

581
00:28:42,800 --> 00:28:48,960
Speaker 3: John Jimmy Gliano is with KPMG. He's absolutely definitive on

582
00:28:49,160 --> 00:28:52,960
Speaker 3: tax policy in Washington. And you know, just to be

583
00:28:53,480 --> 00:28:56,600
Speaker 3: the audit of the number of mint julips he's had

584
00:28:57,120 --> 00:29:00,160
Speaker 3: at the round, Robin Barr at the Willard, it's uncommoner.

585
00:29:00,440 --> 00:29:01,360
Speaker 2: So he joins us this.

586
00:29:01,360 --> 00:29:05,959
Speaker 3: Morning on the back and forth lobbying in Washington. As

587
00:29:06,000 --> 00:29:09,400
Speaker 3: you say in your note, John, this House vote is

588
00:29:09,440 --> 00:29:13,000
Speaker 3: not a slim dunk, is it.

589
00:29:13,000 --> 00:29:13,400
Speaker 2: It is not.

590
00:29:14,320 --> 00:29:17,520
Speaker 11: Mike Johnson has got at least four factions he's got

591
00:29:17,560 --> 00:29:19,760
Speaker 11: to navigate here. He's got the moderates who are concerned

592
00:29:19,760 --> 00:29:22,080
Speaker 11: about some of the Medicaid and other spending cuts in

593
00:29:22,120 --> 00:29:26,120
Speaker 11: the Senate. He's got the fiscal hawks who are concerned about,

594
00:29:26,240 --> 00:29:28,040
Speaker 11: you know, the Senate bill not going far enough and

595
00:29:28,080 --> 00:29:30,600
Speaker 11: cutting spending. He's got the group concerned about the energy

596
00:29:30,600 --> 00:29:32,560
Speaker 11: credits that the Senate is pushing back on. And by

597
00:29:32,560 --> 00:29:35,320
Speaker 11: the way that group goes in both directions, some think

598
00:29:35,320 --> 00:29:37,200
Speaker 11: the Senate went too far something, the Senate thing did

599
00:29:37,200 --> 00:29:39,040
Speaker 11: not go far enough. And then probably of course, we've

600
00:29:39,080 --> 00:29:41,400
Speaker 11: got the Salt Caucus, who for one, seems to.

601
00:29:41,400 --> 00:29:43,400
Speaker 7: Be pretty reapy for now about the Senate bill.

602
00:29:44,080 --> 00:29:47,720
Speaker 3: But what you're great at, John, is the balancing of

603
00:29:47,800 --> 00:29:53,680
Speaker 3: their interests in cigar filled smoky rooms. And the answer

604
00:29:53,840 --> 00:29:56,560
Speaker 3: is the President feels this is going to go through

605
00:29:56,600 --> 00:29:57,200
Speaker 3: because of.

606
00:29:57,120 --> 00:30:02,640
Speaker 2: The net benefit to business and capitalism. I mean, basically

607
00:30:02,680 --> 00:30:04,680
Speaker 2: that's what's driving this thing forward. Right.

608
00:30:06,000 --> 00:30:08,280
Speaker 11: First of all, you make Washington sound way more fun

609
00:30:08,320 --> 00:30:10,320
Speaker 11: than it is, and Jullips of cigars and all that.

610
00:30:10,520 --> 00:30:12,200
Speaker 7: Really it must spend most of my time having coffee

611
00:30:12,240 --> 00:30:12,800
Speaker 7: on Capitol Hill.

612
00:30:12,800 --> 00:30:15,280
Speaker 11: But fair enough point that the President truly believes that

613
00:30:15,960 --> 00:30:19,160
Speaker 11: putting aside the individual text cuts right, those are politically important,

614
00:30:19,400 --> 00:30:22,200
Speaker 11: you know, from a policy point of view, some bipartisan

615
00:30:22,240 --> 00:30:25,239
Speaker 11: support for those, But the business side is something that

616
00:30:25,480 --> 00:30:28,120
Speaker 11: both Capitol Hill and the White House really want to

617
00:30:28,120 --> 00:30:30,960
Speaker 11: get through to drive economic activity in twenty twenty five

618
00:30:30,960 --> 00:30:32,200
Speaker 11: and twenty twenty six, of course.

619
00:30:32,080 --> 00:30:34,200
Speaker 7: Before those all important midterms in twenty twenty six.

620
00:30:35,200 --> 00:30:37,640
Speaker 5: Is this bill as it's currently written, John, Is this

621
00:30:37,720 --> 00:30:38,280
Speaker 5: pro growth?

622
00:30:40,080 --> 00:30:40,600
Speaker 7: I think some of.

623
00:30:40,640 --> 00:30:43,240
Speaker 11: I mean, you can point to several provisions in here

624
00:30:43,240 --> 00:30:46,360
Speaker 11: that are pro growth, probably none more than the ability

625
00:30:46,400 --> 00:30:48,800
Speaker 11: for companies to write off their capex. Right, if you

626
00:30:48,800 --> 00:30:51,280
Speaker 11: go out and build a factory, you buy equipment, that

627
00:30:51,360 --> 00:30:53,040
Speaker 11: sort of thing, you get to write off one hundred

628
00:30:53,040 --> 00:30:54,040
Speaker 11: percent of that in day one.

629
00:30:54,080 --> 00:30:56,120
Speaker 7: And I think that economists.

630
00:30:55,600 --> 00:30:58,600
Speaker 11: Of all stripes have said over the years repeatedly that

631
00:30:58,600 --> 00:31:00,000
Speaker 11: that is a pro growth policy.

632
00:31:00,960 --> 00:31:05,520
Speaker 5: This bill adds to annual deficits, the total national debt.

633
00:31:05,800 --> 00:31:08,880
Speaker 7: Should anybody care, Well.

634
00:31:08,760 --> 00:31:11,160
Speaker 11: First of all, it adds only as much as you

635
00:31:11,200 --> 00:31:13,800
Speaker 11: want to believe it adds because we're dealing with multiple

636
00:31:14,120 --> 00:31:16,120
Speaker 11: versions of math on this bill. But I don't think

637
00:31:16,120 --> 00:31:18,560
Speaker 11: there's any debate that it will definitely add to the debt,

638
00:31:19,000 --> 00:31:20,560
Speaker 11: and it's just a question of how much.

639
00:31:20,600 --> 00:31:21,480
Speaker 7: And again, this is.

640
00:31:21,480 --> 00:31:23,960
Speaker 11: One of the needles that Mike Johnson is going to

641
00:31:24,040 --> 00:31:26,360
Speaker 11: have to thread to get this through the House because

642
00:31:26,400 --> 00:31:28,560
Speaker 11: the Senate accounting on this is, let's call it, novel,

643
00:31:28,880 --> 00:31:31,160
Speaker 11: and he's got to convince his depths at hawks in

644
00:31:31,160 --> 00:31:34,280
Speaker 11: the House that that accounting is reasonable. So we'll see

645
00:31:34,360 --> 00:31:36,800
Speaker 11: you hear people talking about it, but will they actually

646
00:31:36,800 --> 00:31:37,720
Speaker 11: stand in the way of this bill.

647
00:31:37,720 --> 00:31:42,160
Speaker 5: I'm usher the President's has as much influence as any

648
00:31:42,160 --> 00:31:47,200
Speaker 5: president recently across the board, including the House of Representatives.

649
00:31:47,520 --> 00:31:49,800
Speaker 5: There's no I can't see a scenario this scene doesn't

650
00:31:49,800 --> 00:31:52,560
Speaker 5: pass simply because President Trump wants it to pass.

651
00:31:54,160 --> 00:31:56,040
Speaker 7: It is my view that this bill will pass.

652
00:31:56,200 --> 00:31:59,120
Speaker 11: The only real question for me is when, of course,

653
00:31:59,160 --> 00:32:01,000
Speaker 11: the President desperately wants to get this done by fourth

654
00:32:01,000 --> 00:32:02,560
Speaker 11: of July. What a moment for him, of course, to

655
00:32:02,560 --> 00:32:05,240
Speaker 11: get his signature legislative achievement in this term. There's no

656
00:32:05,280 --> 00:32:09,080
Speaker 11: doubt about that done by the fourth of July. However,

657
00:32:09,680 --> 00:32:11,480
Speaker 11: it's going to be challenging, and to get this through

658
00:32:11,520 --> 00:32:13,960
Speaker 11: the House on this super compressed timeline. Remember, the House

659
00:32:14,000 --> 00:32:16,320
Speaker 11: was supposed to be out. They're flying members back from

660
00:32:16,320 --> 00:32:17,680
Speaker 11: all over the country. We don't even know how many

661
00:32:17,680 --> 00:32:18,880
Speaker 11: members are going to show up on the floor of

662
00:32:18,920 --> 00:32:21,560
Speaker 11: the House of Representatives for this vote. So it's going

663
00:32:21,640 --> 00:32:23,160
Speaker 11: to get done. I do think it will get done.

664
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Speaker 11: Will it be exactly this bill and will it be

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Speaker 11: this week?

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00:32:25,440 --> 00:32:29,080
Speaker 3: I don't now, John, have you ever seen tax cuts

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00:32:29,360 --> 00:32:33,240
Speaker 3: increase growth? I mean, m cbo is at a conservative

668
00:32:33,640 --> 00:32:38,320
Speaker 3: GDP look forward ten years. Can growthiness click in here?

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00:32:38,400 --> 00:32:41,280
Speaker 3: Do you see any history of that? Going back to

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00:32:41,320 --> 00:32:43,160
Speaker 3: your time at houseways and means.

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00:32:45,960 --> 00:32:47,640
Speaker 7: I think you go for them.

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00:32:47,640 --> 00:32:49,840
Speaker 11: The Tax Cuts and Jobs Act, right that Trump's one

673
00:32:49,880 --> 00:32:51,280
Speaker 11: point oh signature achievement.

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00:32:51,760 --> 00:32:53,840
Speaker 7: Definitely was some growth around the policies there.

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00:32:53,840 --> 00:32:57,760
Speaker 11: I think the harder question though, is will that growth

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00:32:59,040 --> 00:32:59,680
Speaker 11: be offset?

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00:33:00,120 --> 00:33:02,480
Speaker 7: It offset the increase in the deficit.

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00:33:02,720 --> 00:33:06,000
Speaker 11: That is a very hotly debated question that again they'll

679
00:33:06,080 --> 00:33:06,840
Speaker 11: argue about forever.

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00:33:07,080 --> 00:33:09,000
Speaker 7: But will it grow the economy? Yeah, I don't think

681
00:33:09,000 --> 00:33:10,160
Speaker 7: that's a super controversial thing.

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00:33:10,280 --> 00:33:12,680
Speaker 11: Not all provisions are created equally, by the way, some

683
00:33:12,800 --> 00:33:14,120
Speaker 11: are better at that than others.

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00:33:14,200 --> 00:33:16,040
Speaker 7: The real question is what is its net effect on

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00:33:16,080 --> 00:33:16,640
Speaker 7: the deficit?

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00:33:17,080 --> 00:33:19,160
Speaker 3: John, thank you someone to see it. The runner, Robin Barry,

687
00:33:19,200 --> 00:33:23,600
Speaker 3: the Willer, John Jo Principal had a federal legislative and

688
00:33:23,640 --> 00:33:27,440
Speaker 3: regulatory services This at kp MG.

689
00:33:27,960 --> 00:33:31,880
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

690
00:33:31,920 --> 00:33:35,200
Speaker 1: starting at seven am Eastern on Applecarlay, and Android Auto

691
00:33:35,320 --> 00:33:38,320
Speaker 1: with the Bloomberg Business app. You can also listen live

692
00:33:38,360 --> 00:33:41,960
Speaker 1: on Amazon Alexa from our flagship New York station. Just

693
00:33:42,000 --> 00:33:44,520
Speaker 1: say Alexa play Bloomberg eleven thirty.

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00:33:44,640 --> 00:33:47,080
Speaker 3: Let's get to the newspapers. Lisa Matao's never been on

695
00:33:47,120 --> 00:33:49,560
Speaker 3: a bus, ser life s this this morning.

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00:33:50,360 --> 00:33:51,200
Speaker 8: Good morning, all right.

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00:33:51,200 --> 00:33:52,640
Speaker 12: I want to start with the Wall Street Journal. This

698
00:33:52,680 --> 00:33:55,520
Speaker 12: is a new trend in food packaging. We're talking about

699
00:33:55,760 --> 00:33:58,480
Speaker 12: lower priced, smaller packages.

700
00:33:58,560 --> 00:33:59,720
Speaker 2: Oh they've been doing that for years.

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00:33:59,720 --> 00:34:00,880
Speaker 13: Come on, well, well here's the thing.

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00:34:00,960 --> 00:34:03,440
Speaker 7: Okay, but now Jesus.

703
00:34:03,480 --> 00:34:06,160
Speaker 8: In the Yeah, they're getting smaller and smaller.

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00:34:06,200 --> 00:34:08,760
Speaker 12: I know. But here's the reason why you got people

705
00:34:08,800 --> 00:34:11,319
Speaker 12: like me whose grocery bill is like this, and you're

706
00:34:11,320 --> 00:34:13,120
Speaker 12: trying to get it smaller. Right, You're trying to shrink

707
00:34:13,160 --> 00:34:16,640
Speaker 12: the grocery bill. So companies they want you you know,

708
00:34:16,719 --> 00:34:19,240
Speaker 12: to keep buying. They got to you know, boost their volume,

709
00:34:19,320 --> 00:34:21,920
Speaker 12: so they want to offer these smaller packages. And it

710
00:34:21,960 --> 00:34:24,560
Speaker 12: also tends to have higher profit margins for them if

711
00:34:24,560 --> 00:34:27,320
Speaker 12: they do that. So for example, you have Pepsi selling

712
00:34:27,400 --> 00:34:29,960
Speaker 12: lazed potato chips and like a dozen different sizes.

713
00:34:30,040 --> 00:34:31,440
Speaker 8: Okay, so that's an example.

714
00:34:31,719 --> 00:34:37,000
Speaker 12: Campbell's has these little tiny like pepperg farm Oneski they.

715
00:34:36,880 --> 00:34:38,640
Speaker 13: Make yeah yeah, yeah, yeah, So that's it.

716
00:34:39,239 --> 00:34:44,160
Speaker 12: And even here's the kicker costco going for the smaller packages.

717
00:34:44,239 --> 00:34:46,279
Speaker 12: So like they have these muffins that are like two

718
00:34:46,400 --> 00:34:48,799
Speaker 12: packs like six and six, so now they have one

719
00:34:48,920 --> 00:34:51,680
Speaker 12: pack that's like nine, and they're saying it actually helped

720
00:34:51,760 --> 00:34:54,279
Speaker 12: increase their muffin sales really by them doing that.

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00:34:54,320 --> 00:34:57,160
Speaker 5: All right, here's my question in restaurants, why did they

722
00:34:57,160 --> 00:34:58,160
Speaker 5: give you so much food?

723
00:34:58,680 --> 00:35:01,200
Speaker 8: It's I mean, it's a believes a lot. You can

724
00:35:01,239 --> 00:35:05,399
Speaker 8: have some for lunch tomorrow, you guys an embarrassing it is.

725
00:35:05,640 --> 00:35:08,479
Speaker 5: It's crazy. Now the country boy breakfast at Cracker Browel,

726
00:35:08,480 --> 00:35:11,719
Speaker 5: I understand overload me, but I mean everywhere else it's

727
00:35:11,760 --> 00:35:12,799
Speaker 5: just like there's no.

728
00:35:12,880 --> 00:35:13,640
Speaker 8: Way I meeting this.

729
00:35:13,880 --> 00:35:15,760
Speaker 12: It's true, Like I went to the Bahamas on vacation

730
00:35:15,880 --> 00:35:19,160
Speaker 12: and we went to a buffet and they served us.

731
00:35:19,160 --> 00:35:20,839
Speaker 6: And they are these are.

732
00:35:22,719 --> 00:35:26,799
Speaker 12: These are American portions And I was like, yeah, we

733
00:35:26,840 --> 00:35:32,200
Speaker 12: do eat a lot. So, okay, are we part of

734
00:35:32,200 --> 00:35:32,840
Speaker 12: the cool crowd?

735
00:35:32,920 --> 00:35:33,640
Speaker 8: What do you guys think?

736
00:35:33,880 --> 00:35:34,160
Speaker 3: Right?

737
00:35:34,320 --> 00:35:34,640
Speaker 7: Yes?

738
00:35:34,719 --> 00:35:38,920
Speaker 12: Most definitely come on right? Okay, Well, there's this New

739
00:35:39,000 --> 00:35:42,759
Speaker 12: York Times article that has a list of things that

740
00:35:42,800 --> 00:35:45,320
Speaker 12: talks about what makes you part of the crowd?

741
00:35:45,440 --> 00:35:47,040
Speaker 8: Okay, so it's a new study.

742
00:35:47,360 --> 00:35:50,120
Speaker 13: It talks about there six traits that cool people.

743
00:35:49,880 --> 00:35:51,279
Speaker 8: Have in common. Are you ready for them?

744
00:35:51,280 --> 00:35:51,600
Speaker 6: Okay?

745
00:35:51,800 --> 00:35:58,320
Speaker 13: Cool people are largely perceived to be extroverted, hedonistic, powerful, adventurous, open,

746
00:35:58,440 --> 00:35:59,720
Speaker 13: and autonomous.

747
00:36:00,040 --> 00:36:04,120
Speaker 12: Okay, those are interesting words because like past research, you know,

748
00:36:04,239 --> 00:36:08,480
Speaker 12: cool means like, you know, friendly, trendy, attractive. So this

749
00:36:08,680 --> 00:36:09,960
Speaker 12: is like a little bit different.

750
00:36:09,960 --> 00:36:11,720
Speaker 5: Why are you think like the whole like high school

751
00:36:11,719 --> 00:36:15,759
Speaker 5: reunion or college reunion dynamics fascinating to me. It's just

752
00:36:16,000 --> 00:36:18,200
Speaker 5: what comes back with the most money, you know, That's

753
00:36:18,239 --> 00:36:18,719
Speaker 5: how it goes.

754
00:36:18,840 --> 00:36:24,319
Speaker 12: Bam, all right, big movie weekend right today, Jurassic World

755
00:36:24,440 --> 00:36:29,960
Speaker 12: Rebirth comes out, the seventh installment. All right, really, it's

756
00:36:30,000 --> 00:36:34,400
Speaker 12: the seventh installment of this series, okay, and it's getting

757
00:36:34,440 --> 00:36:36,160
Speaker 12: an extra jump, so it's starting today, so it has

758
00:36:36,200 --> 00:36:37,239
Speaker 12: that five days, right.

759
00:36:37,280 --> 00:36:38,719
Speaker 8: But Variety is saying, you.

760
00:36:38,680 --> 00:36:42,200
Speaker 12: Know what, it might not make enough as the past

761
00:36:42,320 --> 00:36:44,520
Speaker 12: ones because the reviews have been, you know, a little

762
00:36:44,520 --> 00:36:45,040
Speaker 12: bit mixed.

763
00:36:45,239 --> 00:36:47,160
Speaker 8: But if you look at the top, you know, the.

764
00:36:47,040 --> 00:36:50,080
Speaker 12: Past one's Jurassic World, Jurassic World, Fallen Kingdom, Jurassic World,

765
00:36:50,080 --> 00:36:52,759
Speaker 12: Dominion days are passed like a billion dollars. But what's

766
00:36:52,800 --> 00:36:55,200
Speaker 12: interesting is that Variety is saying, you know what, Universal

767
00:36:55,280 --> 00:36:56,680
Speaker 12: is not focused so much on that.

768
00:36:56,760 --> 00:36:59,359
Speaker 8: They're focused more on if.

769
00:36:59,280 --> 00:37:02,399
Speaker 12: It's going to sparkle your trilogy. So if this one

770
00:37:02,480 --> 00:37:06,359
Speaker 12: can bring three more, Scarlet Johansen, she's the big name

771
00:37:06,400 --> 00:37:10,920
Speaker 12: behind you, Okay, Scarlet Johanssen. Yes, you'll see you're starting

772
00:37:10,920 --> 00:37:14,560
Speaker 12: in it, but I mean yes, but then you have

773
00:37:14,640 --> 00:37:16,480
Speaker 12: you know, f one in there, so I don't know.

774
00:37:18,360 --> 00:37:23,160
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify,

775
00:37:23,280 --> 00:37:27,080
Speaker 1: and anywhere else you get your podcasts. Listen live each

776
00:37:27,120 --> 00:37:30,960
Speaker 1: weekday seven to ten am Eastern on Bloomberg dot Com,

777
00:37:31,080 --> 00:37:34,879
Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app.

778
00:37:35,200 --> 00:37:38,320
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779
00:37:38,600 --> 00:37:40,600
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