Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg
Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern
Speaker 1: on Apple car Play or Android Auto with the Bloomberg
Speaker 1: Business App. Listen on demand wherever you get your podcasts,
Speaker 1: or watch us live on YouTube.
Speaker 2: We have an esteem guest who has serious knowledge about
Speaker 2: these tensions across Eurasia. His name is Daniel Tannebaum. He's
Speaker 2: been a wonderful support of the show and we feel
Speaker 2: that his time is so important versus the Q and
Speaker 2: A that we've been hearing. He is with Oliver Wyman,
Speaker 2: a senior fellow Atlantic Council dead tan Obaum, you are
Speaker 2: encyclopedic on sanctions and the economic tensions with Moscow. No
Speaker 2: doubt Vladimir Putin and his team is listening to.
Speaker 3: This press conference. How does it translate in Moscow?
Speaker 4: I mean, I think Moscow has been the winner for
Speaker 4: the last few weeks, tom because of the increasing oil
Speaker 4: prices through this conflict, and as we saw, there was
Speaker 4: about a month period where the Trump administration authorized the
Speaker 4: purchase of Russian oil pretty much by the world. So
Speaker 4: I think Russia has certainly been a beneficiary of this
Speaker 4: conflict also China. But I'm not sure there's anything new
Speaker 4: that Russia is gleaning here because obviously the US hasn't
Speaker 4: been involved in any sort of kinetic activities directly on
Speaker 4: the Russia front Visa VIV, the conflict in Ukraine. Dan.
Speaker 5: We just heard from the Secretary Defense as well as
Speaker 5: military leaders about the tremendous military success the US Armed
Speaker 5: Forces is having in that in Iran, which has led
Speaker 5: in large part to this seasfire. What are next steps
Speaker 5: do you think? How do you think this really plays out?
Speaker 4: So, I mean again, I think it also depends on
Speaker 4: success is dictated by what was the objective. You know,
Speaker 4: we've heard a message about regime change, bringing back my
Speaker 4: political science education from GW. Regime change is really a
Speaker 4: change in government, which I'm not sure we've seen here.
Speaker 4: Where I think this is going is I think it's
Speaker 4: a reversion to a deal similar to what President Obama
Speaker 4: hammered out in twenty fifteen under the Joint Comprehensive Plan
Speaker 4: of Action. We heard talks from Vice President Vance's negotiations
Speaker 4: over the weekend where the talks were really hinging around
Speaker 4: Iran's nuclear and Richmond capability, which again there was a
Speaker 4: deal that President Trump walked away from in twenty eighteen
Speaker 4: that did keep Iran further away from a nuclear weapons program.
Speaker 2: I mean, I looked in at where we are, and
Speaker 2: I think the lynchpin of so many conversations I have
Speaker 2: is China coming to the rescue of Iran. I believe
Speaker 2: the leadership in Beijing yesterday said that may not happen.
Speaker 2: What does Oliver Wyman know about the support Iran can
Speaker 2: receive from China.
Speaker 4: I mean, China's been providing support, but really inso much
Speaker 4: is continuing to buy Iranian oil throughout this crisis, and
Speaker 4: there have been tankers that have transited the Strait, albeit
Speaker 4: at a far smaller clip than what we've seen in
Speaker 4: the one hundred plus ships a day that was Iranian
Speaker 4: oil bound for China. Now there's an interesting moment with
Speaker 4: this blockade. Of the blockade, oil is not going to
Speaker 4: China at this point, but it takes time for this
Speaker 4: to flow through. We have not seen China act out
Speaker 4: much in support of Iran here other than being a consumer.
Speaker 4: I don't expect to see much more support along those lines.
Speaker 2: I've been dyinga ask this because d'An Tannabaum's the only
Speaker 2: one who I know who read Patrick O'Brien twenty one
Speaker 2: volumes Napoleonic War three times. Dan Tannabaum, Is a blockade
Speaker 2: like a sanction? Is it just as simple as that?
Speaker 4: Well, I mean it's another use of hard power. I
Speaker 4: mean we've obviously used blockades in different forms of American history.
Speaker 4: Is in another form of sanction. I mean the sanctions
Speaker 4: are trying to use economic warfare to force a change
Speaker 4: in behavior. Obviously, the blockade is more direct interaction with
Speaker 4: the threat of seizure, of boarding, of potentially interdicting vessels
Speaker 4: that are moving in contravention of this blockade, which thus
Speaker 4: far we haven't seen. Is in another form of sanctions.
Speaker 4: It's another cudgual tool in the foreign policy arsenal to
Speaker 4: try and force Iran back to the negotiating table. The
Speaker 4: frustration in this is essentially I think we're going to
Speaker 4: be back where we were eleven years ago, and potentially
Speaker 4: in a worse position than we were then.
Speaker 2: And we hear that from Admiral Bolton on Bloomberg this weekend, yep,
Speaker 2: just four or five.
Speaker 3: Days ago as well.
Speaker 5: Paul Sweeney with Dan Tanemam Hey, Dan, we kind of
Speaker 5: went into this war with Iran with effectively an open
Speaker 5: straight of Hormuz, which obviously benefits countries all around the world.
Speaker 5: That is not the case today. Do you think we
Speaker 5: can get back to an open straight Because it's not
Speaker 5: just the US and Ran here. This is countries all
Speaker 5: around the world depend upon goods and that flow through
Speaker 5: that straight.
Speaker 4: And it's pretty clear that Iran didn't realize the full
Speaker 4: extent of what they could do. Obviously, when your back
Speaker 4: is against the wall. Iran has never attacked other Gulf states.
Speaker 4: They've never militarily blockaded the Strait. I don't know if
Speaker 4: we go back to where we were unless there is
Speaker 4: a deal that both sides feel comfortable with. And if
Speaker 4: you'll remember, the negotiations were ongoing as the attacks began
Speaker 4: against Iran. And not to say that the Iranian regime
Speaker 4: should remain in place, because obviously it is a threat
Speaker 4: to safety and security around the world, but they have
Speaker 4: a lot more leverage now than they did a few
Speaker 4: months ago. And so if we revert back to this
Speaker 4: deal where they trade nuclear enrichment for sanctions relief for
Speaker 4: the release of blocked assets, similar to what President Obama
Speaker 4: did a decade ago. They have more leverage going into
Speaker 4: it this side. I don't know how we account for that.
Speaker 5: So I guess that one of the questions then will become,
Speaker 5: I to what extent do other countries come and become
Speaker 5: involved in this and maybe securing this straight? I mean,
Speaker 5: Secretary Hexit was raised that point several times, So I do.
Speaker 4: I think that will come over time. I've spent a
Speaker 4: substantial amount of time this week in DC with a
Speaker 4: number of European government officials, and the message is this,
Speaker 4: we agree with the objectives of what we believe the
Speaker 4: Trump administration is trying to do with Iran. But had
Speaker 4: they just consulted with US as this conflict began, this
Speaker 4: might have been a different situation, either for pushing diplomacy
Speaker 4: or a multilateral approach to dealing with the threat. I
Speaker 4: do believe there's kind of a waiting for some sort
Speaker 4: of a reach out in a more diplomatic matter to
Speaker 4: the allies to try and bring them on.
Speaker 3: Board, because obviously, to your point, Paul, the world.
Speaker 4: Suffers from this. This is not an American issue, but
Speaker 4: it's certainly been an initiated conflict for the US against Iran.
Speaker 2: Here I look, Dan at your study of this for
Speaker 2: thirty forty years, and I'm going to ask a really
Speaker 2: serious question because whether it's the treatment of the Secretary
Speaker 2: of Defense, the Chairman of the Joint Chiefs of Staff,
Speaker 2: or the new guy in the press conference, Edminal Cooper
Speaker 2: of Sentcom, with great respect to Tanabam, are we at
Speaker 2: war or are we at conflict?
Speaker 4: So look, I am not a kinetic warfare expert. I
Speaker 4: think historically and I worked in Congress when there was
Speaker 4: a vote on the Iraq war definitely declared war. Congress
Speaker 4: voted on it. I do think we are at war
Speaker 4: at this point. We've got a substantial amount of American soldiers, aviators,
Speaker 4: sailors in the Middle East to combat this crisis. Obviously,
Speaker 4: we're in a ceasefire at the moment where there is
Speaker 4: no active warfare happening, but they are on standby, as
Speaker 4: we heard in that press conference, so are I don't
Speaker 4: know the textbook definition of war, but if it kind
Speaker 4: of walks like a duck in quacks like a duck.
Speaker 2: Right, Thank you so much for coming into our studios
Speaker 2: in Washington. It is the meetings of the International Monetary
Speaker 2: Fund and World Bank and of course the if obam
Speaker 2: where this is a p with Oliver Wyman.
Speaker 3: Stay with us.
Speaker 2: More from Bloomberg Surveillance coming up after this.
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us Live
Speaker 1: weekday afternoons from seven to ten am Eastern Listen on
Speaker 1: Apple Karplay and Android Otto with the Bloomberg Business app,
Speaker 1: or watch us live on YouTube.
Speaker 2: Robert Dahl joined just CEO CIO at Crossmark Global Investments.
Speaker 3: Who's the only one of my rolodex who was there
Speaker 3: in nineteen twenty eight when.
Speaker 2: The last time this happened, Bob, you and I had
Speaker 2: never ever seen this.
Speaker 3: It's amazing. Why is this happening?
Speaker 6: Because good news is good news, bad news is good news,
Speaker 6: and no news is good news.
Speaker 3: You buy stocks, but look, you buy stocks.
Speaker 2: But we had a guest earlier who said, the structure
Speaker 2: here is what's changed. The retalization is Barry eichen Green
Speaker 2: would say, the financialization of the system is when you
Speaker 2: and I had a standard and pours outlook book.
Speaker 3: And that's fair enough.
Speaker 6: There are a lot new buyers that have significant buying
Speaker 6: power and volume power, if I can use that term, individuals,
Speaker 6: young people, hedge funds, quantitative tools. So the traditional quote
Speaker 6: unquote investor that looks at companies, we're shrinking tom as
Speaker 6: a percentage of what's going on.
Speaker 5: So what do you think is driving just kind of
Speaker 5: marketing trends here? Is it maybe just momentum trend trading?
Speaker 5: Is that becoming a bigger part of it.
Speaker 6: All the above, Paul, There's no question about it. But look,
Speaker 6: let's let's be fair. Prior to this war, the economy
Speaker 6: was pretty good, YEP. Earnings were better than pretty good.
Speaker 6: This war has been brief, and if it really is
Speaker 6: over or close to over, we'll go back to those tailwinds.
Speaker 6: And that's what the market is focusing on.
Speaker 5: So one of the big themes has just been you know, AI,
Speaker 5: and I'm not sure that I think when this war
Speaker 5: winds down, a lot of those themes got to come
Speaker 5: right to the forefront again, AI, private credit, those TEP
Speaker 5: types of things.
Speaker 3: What are you focusing on?
Speaker 6: You're absolutely right. Look, let's be short termed for a minute.
Speaker 6: Earnings have just started so far, so good. I talked
Speaker 6: a lot of analysts during the war and they said, I.
Speaker 3: Don't know what to do with my estimates.
Speaker 6: I'm gonna wait because the company is gonna report in
Speaker 6: a couple of weeks. See what they say about the
Speaker 6: first quarter and projected going forward. Then I'll deal with
Speaker 6: my estimates. My guess is there's some NIX out there
Speaker 6: and estimates have to come down a bit. I don't
Speaker 6: think it's a disaster, but enough to be a little worried.
Speaker 6: At twenty one times, yes, down from twenty three times
Speaker 6: and up from nineteen times, but I'd like a lower
Speaker 6: multiple with all this uncertainty.
Speaker 3: So a brilliant adults scattered out chart.
Speaker 2: This is Matt s Manaro with zero hedgehop thank you
Speaker 2: for their market year is a real good compendium of
Speaker 2: what's going on out there.
Speaker 3: Since nineteen twenty eight.
Speaker 2: When the S and P is up like this five
Speaker 2: percent verst fifteen days of April, the market is up
Speaker 2: thirty two percent on average the rest of the year.
Speaker 3: Where do I? Yeah, where are you signed? Bob Dahl?
Speaker 2: You and I know it's just not that easy, And
Speaker 2: I'm going to go to Frankly, James Kramer over at
Speaker 2: the Death Star has been very good about this in
Speaker 2: Time memorial. The answer is, very few stacks drive us higher.
Speaker 2: What are those very few stocks? In July or in.
Speaker 6: October A great, great question. Of course, I don't know
Speaker 6: for sure. I do observe in the market the last
Speaker 6: couple of days, as we've moved now to a new
Speaker 6: all time high, breadth has been pretty mediocre.
Speaker 3: It's not convincing.
Speaker 2: Now.
Speaker 3: I'm not gonna I'm not gonna poop poop a new high.
Speaker 3: I believing, I love it.
Speaker 6: But I think I think you're gonna see some of
Speaker 6: the technology stocks software coming back from the dead. I
Speaker 6: don't think the semis are over. They need a correction.
Speaker 6: They're going through that right now, and I think you
Speaker 6: will see then other cyclicals do reasonably well as long
Speaker 6: as the economy.
Speaker 2: Is okay, which it is. Joe Eisenthal saves Bloomberg surveillance today.
Speaker 2: Thank you Joe with a tweet out without Life. Us
Speaker 2: JAB has claims to zero seven two hundred seven thousand
Speaker 2: in April eleven week. The estimate was two thirteen, so
Speaker 2: they came in better, more optimistic than expected.
Speaker 3: Yep.
Speaker 5: So you know it's an interesting bob. I mean, coming
Speaker 5: late last year kind of into this new year, we
Speaker 5: had a rotation in the marketplace, getting out of some
Speaker 5: of those high multiple named high growth names into some
Speaker 5: value some small mid caps. How do you see that
Speaker 5: playing at.
Speaker 6: These I think that will come back. You know, value
Speaker 6: tends to do better when growth is pretty good, and
Speaker 6: growth seems they'd be pretty good. Look the the trade
Speaker 6: around AI got concerning first it was we got all
Speaker 6: the money we need in cash, and then we'll give
Speaker 6: it to you in inequity. Then we'll raise fixed income
Speaker 6: to do all the capital expenditures. Post labor day was
Speaker 6: kind of trust us. We'll find it somewhere. The Oracle
Speaker 6: AI deal, I'll never forget.
Speaker 3: That still has me concerned.
Speaker 6: I think some of those CAPEX numbers have to come in.
Speaker 2: Is the use of CA I mean, when was the
Speaker 2: last time, Lisa, Oh, you weren't here, Lisa, excuse me,
Speaker 2: Lisa today for Alexis Christopher's Bob Dahl. I look at
Speaker 2: this and I'm just saying to myself, it still comes
Speaker 2: down to c IFA one, two and three, which is
Speaker 2: revenue growth down the income statement, cash generation and use
Speaker 2: of cash.
Speaker 3: It's not broken, is it.
Speaker 6: I totally agree with you. People are not spending enough time,
Speaker 6: in my judgment, focusing on cash flow, use of cash,
Speaker 6: price to cash frow, price to free cash flow. These
Speaker 6: are the instruments that will get us through.
Speaker 3: Is this bond issue?
Speaker 2: Ince Martin mcdigliani, doll nailed this, you know depends the Pennsylvania.
Speaker 3: School in nineteen twenty eight. Remind me which school were
Speaker 3: you at? Allenton?
Speaker 5: No, that don't make that mistake.
Speaker 3: I mean, you know, I'm sorry. Lehigh.
Speaker 2: It's like the home of Stephanie Rule, right, I think so? Yeah?
Speaker 5: I think you get them mixed up.
Speaker 2: Can you imagine Stephanie Rules in the student union at
Speaker 2: ten am after calculus class?
Speaker 3: Yeah? Too much, Bob out of Lehigh? You studied.
Speaker 2: This is the bond issue, Ince An alternative to use
Speaker 2: the cash to me a portion of it.
Speaker 3: Is no question about it.
Speaker 6: I agree with you, But I come back to it's
Speaker 6: just not where the cash is coming. It's free cash
Speaker 6: flow and the growth of it. You know, I try
Speaker 6: to run portfolios that have priced the free cash flow
Speaker 6: that's well below my benchmark and roe above my benchmark.
Speaker 6: That trade off tells me I've got quality and I've
Speaker 6: got growth. And if I can do that in combination,
Speaker 6: I think I went in the long term.
Speaker 5: What screens well for you under that scenario?
Speaker 6: The financials Okay, I mean Look how much they've been
Speaker 6: pummeled since the first of the year. Yeah, they had
Speaker 6: a great year last year, so they gave some back
Speaker 6: starting towards the end of last year. The numbers so
Speaker 6: far are pretty good.
Speaker 3: Yeah they are.
Speaker 6: So I would on this weakness year to date add
Speaker 6: to my financial position.
Speaker 3: Bo I got to bring this up, and I'm going
Speaker 3: to do with you. And it's such such such a
Speaker 3: great honor.
Speaker 2: We lost Mark Mobius at a wonderful age of eighty nine.
Speaker 3: For John Templeton and John Gilbraith.
Speaker 2: Years ago, he invented emerging market analysis.
Speaker 3: You used to be Paul, you're too.
Speaker 2: Young to remember this bow and I remember emerging market
Speaker 2: investment was by the telephone company and by the concrete company,
Speaker 2: and then you moved on to Anaconda, Cooper and Johnson
Speaker 2: and Johnson. Mark Mobius changed the language of.
Speaker 3: What we did.
Speaker 2: Sure did.
Speaker 6: Look, the planet in the developed world is not growing
Speaker 6: in population. So if the planet's going to grow, the
Speaker 6: emerging market consumer has to carry the day. And I
Speaker 6: think that's a great long term plate. Yeah, it's volatile.
Speaker 6: You have to have your seat belt and shoulder arn
Speaker 6: is on. But if the emerging market consumer does not
Speaker 6: buy stuff. The planet's doomed because population shrinking. China and Japan,
Speaker 6: we're not too far from that.
Speaker 3: Can you do this more often?
Speaker 2: I would kill for Bob Dolan Victoria Fernandez together.
Speaker 3: Oh, let's do it?
Speaker 2: Are you?
Speaker 3: In speaking terms? Many of most days? Most days? Okay?
Speaker 3: Thank you, thank you so much, just greatly, greatly appreciate it.
Speaker 2: This morning and this wrapped around waiting for the press
Speaker 2: conference and all that. He's a Crossmark Global investor.
Speaker 3: Stay with us.
Speaker 2: More from Bloomberg Surveillance coming up after this.
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us Live
Speaker 1: weekday afternoons from seven to ten am Eastern Listen on Apple,
Speaker 1: Karplay and Android Otto with the Bloomberg Business app, or
Speaker 1: watch us live on YouTube.
Speaker 2: I think she was supposed to be with us like
Speaker 2: a couple of days ago and the world blew up
Speaker 2: or whatever.
Speaker 3: But I'm sorry, this is like a big deal.
Speaker 2: This is Lauren Hackfelder with Morgan Stanley, and what this
Speaker 2: is a is real estate. So I'm going to start
Speaker 2: with a dumb question. The tone I got four or
Speaker 2: five months ago is well, that was harsh. It's over
Speaker 2: except on Twitter at cranes in your world. I'm still
Speaker 2: seeing all sorts of challenges in real estate.
Speaker 3: Is it not over? Well?
Speaker 7: We are four years into this real estate correction. It
Speaker 7: is a little bit like that line in The Godfather,
Speaker 7: just when you thought you were out with everything going
Speaker 7: on and are on right now. But real estate, actually
Speaker 7: an infrastructure for that matter as well, is set up
Speaker 7: pretty darn well today. So there is a lot of unknowns, obviously,
Speaker 7: But what we do know is that energy price is
Speaker 7: likely to stay higher, geopolitical risks likely to stay elevated.
Speaker 7: And while those create some headwinds for real estate we
Speaker 7: don't like higher borrowing costs, it really actually sets up
Speaker 7: real estate pretty well for a few reasons. You were
Speaker 7: just talking about elevated oil prices. Well, guess what that
Speaker 7: impacts construction costs. And as we've talked about many times
Speaker 7: on this show, one of the key bullish indicators is
Speaker 7: that new construction is way down. Okay, construction costs up.
Speaker 7: Push that out longer.
Speaker 5: I think of real estate, I throw it into the
Speaker 5: group of alternative investments, and I think about non correlated returns.
Speaker 5: Is that what your clients are thinking about these days,
Speaker 5: are thinking about? There's too much risk out there in
Speaker 5: a stock and bond market, at least in the near term.
Speaker 5: I'm looking for some non correlated risk in return.
Speaker 7: It's a really important point you're raised, so particularly when
Speaker 7: we've seen the breakdown of some of the classic correlations,
Speaker 7: right when when equities and bonds are, you know, moving
Speaker 7: in tandem. For example, real estate has continued to show
Speaker 7: its lower correlation. And in fact, when we've seen periods
Speaker 7: of equity pullback, private real estate tends to outperform. And
Speaker 7: when you're talking about real estate at a cyclical low,
Speaker 7: still down twenty to twenty five percent, with the S
Speaker 7: and P at all time by, it's certainly showing that benefit.
Speaker 2: So I get in the Bellety this morning and I'm
Speaker 2: coming down Fifth Avenue.
Speaker 3: I turn left of fifty ninth Street.
Speaker 2: The potholes are you know they're doing The mayor is
Speaker 2: doing a good job in the potholes good I could say.
Speaker 2: I slide by Steve Ross's new mega project tucked behind
Speaker 2: a GM buildings.
Speaker 3: I can't remember.
Speaker 2: It's Madison and something and it's going to be umpteen
Speaker 2: stories high. In all that, I think that's a class
Speaker 2: A property. Those are no brainers. Right now, like people
Speaker 2: with money are lined up to support Steve Ross and
Speaker 2: related on a project like that.
Speaker 7: I think you're still seeing a real bifurcation between the
Speaker 7: best and the rest. And that's true on office that's
Speaker 7: true and residential.
Speaker 3: Okay, So for you and.
Speaker 2: Morgan Stanley at the margin, which is your choice that
Speaker 2: the rest or the.
Speaker 7: Best generally speaking? The best generally?
Speaker 5: What do you? I mean, but some of the values
Speaker 5: out there. I guess there's a class of investors out
Speaker 5: there in real estate, like there's in every asset class
Speaker 5: that wants to take go in into the bottom and
Speaker 5: try to turn something around it. Do we have people
Speaker 5: like that in real estate that says I'm going to
Speaker 5: go take the Lipstick building just for example, at forty
Speaker 5: cents on the dollar because I can make a return
Speaker 5: on that entry price.
Speaker 8: Yeah.
Speaker 3: Absolutely.
Speaker 7: Look, let me say it this way. What we want
Speaker 7: is really attractive entry point but still really high quality
Speaker 7: real estate because at the end of the day, demand
Speaker 7: growth and limited supply is what's going to drive income growth.
Speaker 7: And this is a window where we're seeing, for the
Speaker 7: first time since the GFC, the opportunity to consistently buy
Speaker 7: assets below replacement cost, below what they would cost to build,
Speaker 7: and that's.
Speaker 5: Attract geographic Geographically, where do you see the best opportunities?
Speaker 3: I guess globally.
Speaker 7: Yeah. Look, I'd say first and foremost, this moment in
Speaker 7: time really reinforces the importance of global diversification. So last
Speaker 7: year everyone was talking about the end of American exceptionalism.
Speaker 7: I think today reinforces that the US is relatively better positioned.
Speaker 3: Right Asia and Europe showing.
Speaker 7: Greater vulnerabilities around energy exposure, et cetera. But yet we're
Speaker 7: saying you need to have global diversifications. So we've been
Speaker 7: very active, in particular here in the US in Japan
Speaker 7: that's a very active market for US, but also throughout.
Speaker 3: How'd you get into this?
Speaker 2: You're at Eale doing ethics, politics and ecademics. What there
Speaker 2: was like a Morgan Stanley recruiter said, hey, you real estate,
Speaker 2: go love it.
Speaker 3: How did this happen?
Speaker 8: How did this happen?
Speaker 7: I started as an investment banking analyst out of Yale,
Speaker 7: and Morgan Stanley has the best investment banking analyst program
Speaker 7: on the street, and that was amazing. And then I
Speaker 7: got to, you know, get exposure to investing in real
Speaker 7: estate and said this is fantastic.
Speaker 2: Okay, So you've been doing this for years and it's
Speaker 2: the fancy stuff like you say Japan and all that,
Speaker 2: nobody cares. Here's what we care about New York City.
Speaker 2: I think Boston actually could be worse. The housing, the office,
Speaker 2: the mathematics of your world at the local level is
Speaker 2: a disaster. What's your prescription? And a cup of coffee
Speaker 2: with the mayor of New York City? What would you
Speaker 2: say to him?
Speaker 7: Gosh, it is so simple. We have a profound affordability
Speaker 7: problem that is devastating for this city and the answer
Speaker 7: is supply.
Speaker 2: Okay, So do you want to East Germany with a
Speaker 2: million you know apartments up?
Speaker 7: Well, by the way, Germany has historically underbuilt and that
Speaker 7: is why. So if you look at Europe, Europe has
Speaker 7: historically regulated rental housing pricing and with that has really
Speaker 7: constrained supply. And it shouldn't surprise any of us that
Speaker 7: when you constrain rents, you constrain supply, and actually that
Speaker 7: makes it less aff.
Speaker 3: What kind of supply we got to go here? Lucas
Speaker 3: Shawan is entourage just got here. What kind of.
Speaker 2: Supply is efficacious for this city?
Speaker 7: You want attainable priced housing, so not necessarily rent regulated,
Speaker 7: but attainable housing. And that is doable with the right
Speaker 7: public private partnerships.
Speaker 3: Lauren, think you we gotta come back and talk about
Speaker 3: this more. We got to give her like it's not
Speaker 3: just New York, it's you know, twelve or eighteen minutes,
Speaker 3: you know, Lauren, Thank you, Lauren. Thankshold with us.
Speaker 2: Just Outstanding had a global real assets Morgan Stanley Investment Management.
Speaker 3: Stay with us.
Speaker 2: More from Bloomberg Surveillance coming up after this.
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us Live
Speaker 1: weekday afternoons from seven to ten am Eastern Listen on
Speaker 1: Apple Karplay and Android Auto with the Bloomberg Business app,
Speaker 1: or watch us Live on YouTube.
Speaker 2: It's time for link the interview and a great emotion.
Speaker 2: Wendy Schiller changed civics if you remember that name, folks
Speaker 2: or social studies in America by not writing six hundred
Speaker 2: page histories of Alexander Hamilton, but writing brilliant, short, terse
Speaker 2: textbooks that were in English and readable about the heritage
Speaker 2: concepts of this nation. She has done this at Brown
Speaker 2: University with enthusiasm. She is a bright, shining light and
Speaker 2: they have now given her the worst job in the planet,
Speaker 2: joining us now the new Deputy provost of Brown University.
Speaker 3: When Frank Doyle hauled you into the office.
Speaker 2: Frank Doyle, guys, is this acclaimed engineering juggernaut and they
Speaker 2: took him from Harvard down to Brown.
Speaker 3: And how did this happen?
Speaker 2: Wendy does Frank bro Wendy, I'd love to give you
Speaker 2: the worst job at Brown, please accept?
Speaker 3: How does that happen?
Speaker 8: That's pretty much how it happened. Tom, Good Morning, Tom
Speaker 8: Bolney's up. Yeah, so I've done a bunch of leadership.
Speaker 9: Chair RAN's Thomas Center was interproductor of the Watson and
Speaker 9: Stute now School, a public policy at Brown. And basically
Speaker 9: that's how it happened. You know, no, no good deed
Speaker 9: goes unpunished. And Frank Doyle has handled a lot of
Speaker 9: a lot of one after the other kind of external
Speaker 9: sort of shocks to Brown really well. And he wanted
Speaker 9: he wanted somebody who's been around a while and who
Speaker 9: he knew had exhibited leadership, and that was me, and
Speaker 9: he literally did offer me the job.
Speaker 8: So it's hard when your provost calls you and says,
Speaker 8: would you do this?
Speaker 9: To say, you know, I'd rather go on Bloomberg with
Speaker 9: Tom keene and and Lisa.
Speaker 2: Yeah, one more question then I'll get to the business
Speaker 2: at hand. When you have a faculty meeting, I mean,
Speaker 2: do you order out pizza? I mean, is that what
Speaker 2: they do at Brown University with the best pizza in
Speaker 2: the world in Providence, Rhode Island.
Speaker 9: You know what's interesting about academics now is that after COVID,
Speaker 9: a lot of those you know, group meetings.
Speaker 8: Companies are on zoom so and it's a changed well.
Speaker 9: It's a change in faculty governance, and it's it's you know,
Speaker 9: there are pros and constants, so more inclusive, but no
Speaker 9: shared pizza with Provos.
Speaker 3: Schiller Paul Sweetey.
Speaker 5: Professor talk to us about just kind of the latest
Speaker 5: stay of play, state of play in Iran here from
Speaker 5: the perspective of President Trump here, where is a reasonable
Speaker 5: off ramp for him in his administration here? And how
Speaker 5: incentive is he to do that?
Speaker 9: You know, right now the president is balancing a sort
Speaker 9: of show of might or display of force for you know,
Speaker 9: sending again more troops to be stationed in the Middle East.
Speaker 8: So he's not sort of saying.
Speaker 9: We're not going to do this, even though he's getting
Speaker 9: all sorts of signals from the Republican of Congress that
Speaker 9: they would not support this, and the American public at
Speaker 9: the moment in public opinion, Pulling says no, no ground troops.
Speaker 8: But he's not backing off a display of force.
Speaker 9: You know, I don't understand closing the strait in addition
Speaker 9: to Iran trying to close the straight, but I guess
Speaker 9: in that way it says this is a global property
Speaker 9: and we can't afford to have you arbitrarily close it.
Speaker 9: So I think he's trying to balance, you know, the
Speaker 9: idea that Iran is a quote unquote bad actor. Iron
Speaker 9: has sponsored a lot of global terrorism aroon. You know,
Speaker 9: according to the United States cannot have a nuclear weapon.
Speaker 9: That'nt that's our stand. So right now he's trying to balance,
Speaker 9: you know, the potential to go in, which I think
Speaker 9: the world knows the American people don't support.
Speaker 8: But with the actual tools to go in, and so far.
Speaker 9: It's a balancing act that has kept him out of
Speaker 9: any kind of commitment of ground troops, which I think
Speaker 9: is really you know, the red line for the United
Speaker 9: States and for the presidency. You know, I don't know
Speaker 9: if that is something that would actually bring the Trump
Speaker 9: presidency down perfectly in terms of support among the Republicans.
Speaker 8: And that's a real concern for the president.
Speaker 9: He may be willing to lose the House representatives, he
Speaker 9: is not willing or happy about losing the Senate as well.
Speaker 2: Wendy, I went back and this is off of Max
Speaker 2: Hastings and is wonderful one volume on Vietnam. And I
Speaker 2: actually found the New York Times article Paul of the
Speaker 2: first day American Army troops marines maybe came as short
Speaker 2: and they have the you know, they're coming out of
Speaker 2: the water and all that, and to day and like
Speaker 2: nineteen sixty three, ninety sixty five, whatever, Is it correct, professor,
Speaker 2: that we provide a Vietnam analog to our analysis of
Speaker 2: this war?
Speaker 9: You know, I'm not even sure we can, right, because,
Speaker 9: of course, as you well know, Eisenhower is the first
Speaker 9: one Republican president. Eisenhower sends the quote unquote advisors to Vietnam,
Speaker 9: and then Kennedy keeps the mayor and kind of loads
Speaker 9: up on them but doesn't go full scale.
Speaker 8: But that's a consistent build up over a long period
Speaker 8: of time.
Speaker 9: You know, we had as as you also know about
Speaker 9: almost five hundred more than five hundred thousand troops in
Speaker 9: Vietnam at one point, which is you know, triple the amount,
Speaker 9: almost triple the amount we had in Iraq at our peak.
Speaker 9: So the weapons of war have changed, we would never
Speaker 9: need that kind of build up, and we don't have
Speaker 9: a draft anymore.
Speaker 8: So I think that is hard.
Speaker 9: But I think the impotent that Trump has, which is
Speaker 9: the instinct I don't want to be in a ground war.
Speaker 8: I think that is a strong impulse in this president.
Speaker 9: And I think it is based on looking at even
Speaker 9: back of Korea, but certainly Vietnam, and look at Afghanistan
Speaker 9: and I Rock, which took you know, fifteen to twenty
Speaker 9: years each.
Speaker 8: So I think that's what he firmly wants to avoid.
Speaker 8: But you know, this is the problem with war.
Speaker 9: You know, you start military action and it unfolds on
Speaker 9: you and you can't control it.
Speaker 5: Wendy, the political costs here, how would you gauge them?
Speaker 5: At this point? It is an unpopular war. If you
Speaker 5: just look at current public polling here with the midterm elections,
Speaker 5: what do you really think the.
Speaker 3: Risk is to the Republican Party?
Speaker 2: Oh?
Speaker 9: I mean, I think, you know, the Democrats have been
Speaker 9: winning special elections, you know, for almost a year now
Speaker 9: at the state legislative level in places like Iowa, and
Speaker 9: they've been winning congressional elections not in Georgia, but they
Speaker 9: did pretty well in that seat in terms of former
Speaker 9: Representative Margor Taylor Green seat, so they you know, I
Speaker 9: think the signals are that people want something different. They
Speaker 9: want people to pay attention to inflation and housing and
Speaker 9: really fear of losing jobs. Now, I mean, this is
Speaker 9: a new layer and a new wrinkle for the Republicans,
Speaker 9: which is the fear of AI and the fear of
Speaker 9: being laid off. So you couple all that together and
Speaker 9: that's very high. Economic anxiety, very high, and the incumbent
Speaker 9: party doesn't do well under those circumstances. So I think
Speaker 9: I think there are real concerns. However, there are also
Speaker 9: concerns with the Democrat incumbents. We've seen older quote unquote
Speaker 9: age older Democrat incumbents being challenged across the country.
Speaker 8: I think voters are fed up with government.
Speaker 9: They feel like it does not work anymore, and Democrats
Speaker 9: have to be careful not to fall into that as well.
Speaker 2: I got time for One more question is Wendy Schiller
Speaker 2: goes off to a serious day job at Brown University.
Speaker 2: Let's go to your civics textbook, Wendy Schilder, which you
Speaker 2: own the Democratic Party Andrew Jackson eighteen twenty eight, and
Speaker 2: then FDR shows up, and there's a new you know,
Speaker 2: after the Depression nineteen thirty two and all that, and
Speaker 2: then there's civil rights post Kennedy nineteen sixty four, LBJ
Speaker 2: and all that. What I find fascinating in the AI
Speaker 2: is nobody mentions the shift of McGovern in the urban
Speaker 2: educated Democrats of nineteen seventy two and beyond, where's the
Speaker 2: next Democratic Party?
Speaker 8: The next Democrat Party is back towards the middle. I mean,
Speaker 8: I really think these are cyclical things.
Speaker 4: We have this.
Speaker 8: You know, you can go McGovern all the way.
Speaker 9: Through Docaccus, right, and then you see Bill Clinton. So
Speaker 9: I think there are a lot of candidates positioning themselves
Speaker 9: that are actually, by any standard, quite liberal, just not
Speaker 9: super liberal.
Speaker 8: And I think the same thing goes for the Republican Party.
Speaker 9: I think the split in the conservative wing of the
Speaker 9: Republican Party is going to give rise to someone who's
Speaker 9: quite conservative, but maybe not as conservative as prior candidates.
Speaker 8: So I think independent voters are key.
Speaker 9: They're growing as a group, and they keep switching back
Speaker 9: and forth in elections, which really still pushes these party
Speaker 9: candidates a little bit back towards the center.
Speaker 2: Congratulations on your new responsibilities of Brown University. It's a
Speaker 2: really serious position. As deputy provost. It is the lynchpin
Speaker 2: between the president, the faculty, and so many of the
Speaker 2: institutions of any given school. Wendy Schiller leaving us because
Speaker 2: of these new duties, and just for all of us,
Speaker 2: I'm gonna get emotionally here think I found Lexus is here.
Speaker 2: I'd be in tears. Wendy Sheller, thank you so much,
Speaker 2: greatly appreciate it.
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify,
Speaker 1: and anywhere else you get your podcasts. Listen live each weekday,
Speaker 1: seven to ten am Eastern on Bloomberg dot Com, the
Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You
Speaker 1: can also watch us live every weekday on YouTube and
Speaker 1: always on the Bloomberg terminal