WEBVTT - Bloomberg Surveillance TV: May 21st, 2026 0:00:00.040 --> 0:00:06.720 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.640 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordernt. Join us each day 0:00:18.720 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.919 anywhere else you listen, and as always on the Bloomberg 0:00:34.000 --> 0:00:36.879 Terminal and the Bloomberg Business app. We begin this hour 0:00:36.920 --> 0:00:39.640 with stocks edgin Kaya as investors digest the latest earnings 0:00:39.640 --> 0:00:42.600 from Nvidia and the IPO pipeline is heating up as 0:00:42.640 --> 0:00:45.800 SpaceX and open Ai make moves to go public. Peter 0:00:45.880 --> 0:00:48.239 Cheerb Academy Securities joins us around the table for more. 0:00:48.520 --> 0:00:49.320 Good morning, Goo to see you. 0:00:49.360 --> 0:00:49.920 Hey, good morning. 0:00:50.040 --> 0:00:52.320 You saw that opening exchange that we just had around 0:00:52.360 --> 0:00:55.360 these IPOs. The tech investment story has changed. We've gone 0:00:55.400 --> 0:00:58.320 from buybacks to lots of capex. We're moving away from 0:00:58.360 --> 0:01:01.240 shrinkage towards maybe tons of supply. What does that mean 0:01:01.520 --> 0:01:02.680 for the investor in this space? 0:01:03.000 --> 0:01:04.920 You know? Right now I think it's all hands on deck. 0:01:04.959 --> 0:01:07.559 Everyone's growing, everyone's spending the money to do it, and 0:01:07.640 --> 0:01:08.720 you're asking the question, you. 0:01:08.720 --> 0:01:09.839 Know, what's the disconnect? 0:01:09.840 --> 0:01:11.560 I think right now, there's so much money to be 0:01:11.600 --> 0:01:13.960 made in the AI space that whether it's four percent, 0:01:14.040 --> 0:01:16.280 six percent, eight percent on interest rates is a trivial 0:01:16.400 --> 0:01:18.160 same sort of thing. I think we've been talking about 0:01:18.160 --> 0:01:20.560 this for the last little while. Electricity prices, right, you 0:01:20.600 --> 0:01:22.639 and I are being affected, but the AI data centers 0:01:22.640 --> 0:01:24.839 they could care less, right, It's such a trivial input 0:01:25.040 --> 0:01:28.200 relative to what they're making. So I think this tailor 0:01:28.240 --> 0:01:31.600 to economers. You've got the AI data center growth, it's booming, 0:01:31.680 --> 0:01:34.319 everyone's trying to get into it. Everyone's rushing headlong. You're 0:01:34.319 --> 0:01:36.200 seeing more and more companies get into it. Just also 0:01:36.200 --> 0:01:37.920 why I think in Vidia's earnings aren't as important because 0:01:37.959 --> 0:01:40.440 there were so many tells what's going on. But the 0:01:40.480 --> 0:01:42.479 rest of the economy is kind of languishing. It feels 0:01:42.480 --> 0:01:45.479 like the jobs aren't there, and the degree of uncertainty 0:01:45.520 --> 0:01:46.480 I think is hitting spending. 0:01:46.560 --> 0:01:47.960 We'll spend some time of that in just a moment. 0:01:48.040 --> 0:01:50.200 Let's just talk about potential constraints. At least it gave 0:01:50.240 --> 0:01:52.320 a not to them. You mentioned energy that's been want 0:01:52.400 --> 0:01:55.360 to discussed. Lisa mentioned capital. What are the prospects of 0:01:55.440 --> 0:01:58.920 capital constraints given how much money is being demanded right now, 0:01:58.920 --> 0:02:01.680 both in fixed income inequity in the coming year. 0:02:01.800 --> 0:02:03.160 So one thing I think we're seeing is a little 0:02:03.160 --> 0:02:05.160 bit of a shift where people are much more comfortable 0:02:05.160 --> 0:02:08.239 owning corporate credit than treasuries, and I think treasuries become 0:02:08.280 --> 0:02:10.160 a very generic asset. I think that's one reason you 0:02:10.160 --> 0:02:12.440 see some pressure on treasuries. As far as I can tell, 0:02:12.560 --> 0:02:15.359 when we're talking to our large asset managers, they're all 0:02:15.400 --> 0:02:15.919 in on credit. 0:02:15.960 --> 0:02:17.080 They love credit, it's cheap. 0:02:17.120 --> 0:02:19.400 You're getting the higher yields from the treasuries, and you've 0:02:19.400 --> 0:02:21.560 got a compelling story there. And you're even seeing some 0:02:21.600 --> 0:02:23.720 of this play out in the super sovereign space, and 0:02:23.760 --> 0:02:25.400 you know, kind of walk you to even talk about 0:02:25.400 --> 0:02:27.280 some of the super sovereigns, but they are trading at 0:02:27.280 --> 0:02:30.440 their closest spreads ever to US treasuries, So you have 0:02:30.680 --> 0:02:33.280 I think this kind of not a version of US treasurees, 0:02:33.280 --> 0:02:35.280 but it's just a generic asset. Right. If you're in Germany, 0:02:35.280 --> 0:02:37.880 now buy buns. If you're in Japan by jgbs. So, 0:02:37.880 --> 0:02:39.800 I think treasuries don't have as much interests, but people are 0:02:39.840 --> 0:02:42.640 piling into credit and they're looking at these opportunities saying, well, 0:02:43.000 --> 0:02:44.840 maybe I want to own xyz S bonds. 0:02:44.840 --> 0:02:45.720 I'm getting extra. 0:02:45.520 --> 0:02:47.760 Fifty sixty eighty one hundred BIPs and I think the 0:02:47.840 --> 0:02:50.080 risk is better and I want And for credit people, 0:02:50.160 --> 0:02:52.040 it's the only way to play some of these AI stories. 0:02:52.120 --> 0:02:53.720 And it seems like right now the bigger risk is 0:02:53.720 --> 0:02:55.800 inflation rather than any kind of hit to growth. Nobody 0:02:55.880 --> 0:02:57.840 is pricing in recession. No one's pricing in some sort 0:02:57.880 --> 0:03:01.720 of serious downturn. Do you agree that credit and equity 0:03:01.840 --> 0:03:04.880 are better hedges for the inflation risk and that is 0:03:04.880 --> 0:03:06.000 where people should be looking. 0:03:06.360 --> 0:03:10.000 So I like credit on that perspective. I think it's 0:03:10.080 --> 0:03:12.440 kind of an interesting place to be. Again, we're not 0:03:12.480 --> 0:03:14.840 seeing recession, though there is this tale of two economies. 0:03:15.120 --> 0:03:15.360 Again. 0:03:15.560 --> 0:03:20.480 I feel like what you're seeing is in the rates market. 0:03:20.680 --> 0:03:22.359 If you went back three months ago and I thought 0:03:22.440 --> 0:03:25.120 before the war started, we could cut, and if we cut, 0:03:25.160 --> 0:03:27.480 even if it was an aggressive cut, we could control. 0:03:27.200 --> 0:03:28.360 The long end of the bond market. 0:03:28.560 --> 0:03:30.480 Right now, I don't think we can cut without controlling 0:03:30.520 --> 0:03:31.919 the long end of the bond market. I think if 0:03:31.919 --> 0:03:34.320 we cut rates right now, we would lose control over 0:03:34.320 --> 0:03:34.760 the long end. 0:03:34.680 --> 0:03:36.400 Of the bond market. So I think we're higher for longer. 0:03:36.560 --> 0:03:38.200 And that's here. It's across the globe. 0:03:38.320 --> 0:03:41.560 Defense spending's ramping up everywhere, so I think you've got 0:03:41.560 --> 0:03:43.480 some pleasure there. But again, I still think we're in 0:03:43.520 --> 0:03:46.320 that three to five percent inflation period. You know, there 0:03:46.400 --> 0:03:47.960 is a lot of excitement. I think the bond market 0:03:47.960 --> 0:03:50.560 has one more leg to higher yields because the one 0:03:50.560 --> 0:03:52.520 thing people keep arguing to me is, well, we're going 0:03:52.560 --> 0:03:54.000 to get all this benefit from AI, and we're going 0:03:54.040 --> 0:03:56.520 to get kind of deflationary pressure from AI. That may 0:03:56.560 --> 0:03:58.240 be true, but I think the next year to two 0:03:58.320 --> 0:04:01.360 years it's all about the cost of out rather than 0:04:01.640 --> 0:04:02.560 the benefits of AI. 0:04:02.760 --> 0:04:04.600 You talk about the tail of two economies and this 0:04:04.680 --> 0:04:07.080 idea that we could get significantly higher rates as a 0:04:07.080 --> 0:04:09.520 result of this push higher. I just wonder at what 0:04:09.560 --> 0:04:11.520 points the story start to come together. It seems like 0:04:11.560 --> 0:04:13.680 either there's a bubble in human capital or there's a 0:04:13.680 --> 0:04:16.120 bubble in the costs that companies are paying for tokens 0:04:16.360 --> 0:04:18.760 and access to some of these AI models. They are 0:04:18.920 --> 0:04:22.360 justifying the increased cost by increased productivity and then laying 0:04:22.400 --> 0:04:25.560 off staff in order to free up the cash. At 0:04:25.560 --> 0:04:28.040 what point does that become an unsustainable equation. 0:04:28.160 --> 0:04:28.719 Well, I think over the. 0:04:28.720 --> 0:04:30.640 Next six months to a year, people will actually, for 0:04:30.720 --> 0:04:32.320 the first time really be able to say, here's what 0:04:32.360 --> 0:04:34.520 I spent on tokens, here's what I kind of could 0:04:34.520 --> 0:04:37.880 have spent on employees and make that decision because until 0:04:37.880 --> 0:04:40.840 fairly recently, right it was all kind of who knows 0:04:40.960 --> 0:04:42.240 what we're spending you'll. 0:04:41.960 --> 0:04:43.000 Get these kind of deals. 0:04:43.160 --> 0:04:45.040 So I think this will actually let people to take 0:04:45.040 --> 0:04:47.080 a closer look, and it will be scary if AI 0:04:47.160 --> 0:04:49.640 turns out being much cheaper than people. The problem is 0:04:49.680 --> 0:04:52.960 you know someone's cost as someone else's like customer, and 0:04:53.040 --> 0:04:54.840 I don't know where all that heads. I had to 0:04:54.839 --> 0:04:57.440 write about UBI Universal Basic in Come two weeks ago 0:04:57.440 --> 0:04:59.200 because it felt like this is a topic that's. 0:04:59.080 --> 0:04:59.640 Going to come up. 0:05:00.040 --> 0:05:02.400 Really kind of hate the concept, but you can clearly 0:05:02.440 --> 0:05:04.640 see a path where if we are doing these layoffs, 0:05:04.920 --> 0:05:07.760 and unlike dot com or I think everyone was excited. 0:05:07.920 --> 0:05:09.560 There is so much angst around this. 0:05:09.880 --> 0:05:13.560 From a personal level, I don't think we've ever seen 0:05:13.560 --> 0:05:16.680 anything like this, and we're heading into an election season 0:05:16.720 --> 0:05:19.080 and the country is already very divided on many things 0:05:19.240 --> 0:05:20.839 AI electricity generation. 0:05:20.920 --> 0:05:23.120 These just seem to be massive political risks. 0:05:23.160 --> 0:05:24.880 We just skipped to the final chapter of the book. 0:05:24.960 --> 0:05:27.000 But since we're there, let's flick a few pages over. 0:05:27.400 --> 0:05:29.200 What's the policy response going to be to all of that? 0:05:29.240 --> 0:05:30.920 If that is indeed the end destination? 0:05:32.120 --> 0:05:34.159 You know, I think you're going to get politicians who 0:05:34.279 --> 0:05:36.240 are going to fight electricity, who are going to fight 0:05:36.279 --> 0:05:38.520 data centers because it's populous. You're going to get some 0:05:38.560 --> 0:05:40.280 who decided to embrace it. And I think you're going 0:05:40.320 --> 0:05:42.080 to see I think you're going to see a shift 0:05:42.520 --> 0:05:44.400 in where people are moving this country. I think this 0:05:44.520 --> 0:05:47.920 is part of our overall as we reindustrialize. I think 0:05:47.960 --> 0:05:49.880 you're going to see the heartland of America do very well. 0:05:49.880 --> 0:05:52.480 I think you're going to see between the Appellations and 0:05:52.560 --> 0:05:53.840 the Rockies continue to do wow. 0:05:53.920 --> 0:05:54.760 Last year I think was the. 0:05:54.680 --> 0:05:57.159 First time in thirty or forty years that that part 0:05:57.160 --> 0:05:59.000 of the country beat the rest of the country in 0:05:59.080 --> 0:06:02.080 population growth and GDP growth. I think you're seeing some 0:06:02.120 --> 0:06:05.599 of the low per capita red states in particular embrace 0:06:05.680 --> 0:06:06.200 these things. 0:06:06.240 --> 0:06:07.880 They're like, hey, we want the jobs. 0:06:07.920 --> 0:06:09.880 We're comfortable, we will deal with the pollution, we will 0:06:09.920 --> 0:06:12.200 deal with the after effects of some of these. And 0:06:12.279 --> 0:06:14.120 I think that you're going to see an opportunity to 0:06:14.200 --> 0:06:16.880 reshape where people live and the demographics in this country. 0:06:17.160 --> 0:06:18.920 And if anything, on the real estate side of things, 0:06:18.920 --> 0:06:21.560 I'm very bullish on the Great Lakes region, on the heartlands, 0:06:21.560 --> 0:06:24.479 the traditional manufacturing, because they have the fresh water, the 0:06:24.520 --> 0:06:27.640 weather's actually conducive to this, they've got the engineering schools. 0:06:27.839 --> 0:06:29.080 I think that could be one of the shifts that 0:06:29.120 --> 0:06:31.080 we see over the next five years, is this kind 0:06:31.080 --> 0:06:33.960 of flood to the coasts and deep south changes a 0:06:34.000 --> 0:06:36.159 little bit as people realize, hey, there are places to 0:06:36.240 --> 0:06:38.080 do this, and if we're going to do industry, we 0:06:38.120 --> 0:06:40.600 need electricity and we need fresh water, and that's an 0:06:40.600 --> 0:06:42.320 abundance in some of these regions that people have to. 0:06:42.279 --> 0:06:44.120 Get it down the rabbit hole. What are you bearish 0:06:44.200 --> 0:06:46.320 on you alluded to it. What would you be short 0:06:46.480 --> 0:06:47.320 in that kind of world? 0:06:47.480 --> 0:06:47.640 You know? 0:06:47.720 --> 0:06:50.359 Right now, I'm very cautious about anything that requires a 0:06:50.560 --> 0:06:53.480 deep spend. From a personal standpoint, I think even the 0:06:53.560 --> 0:06:57.040 people with jobs are looking carefully at their spending. So 0:06:57.120 --> 0:07:01.400 I think construction homes affordability is so real, and again 0:07:01.440 --> 0:07:03.320 that kind of drives me. I think some of the 0:07:03.320 --> 0:07:07.719 really expensive places that you grew up very quickly, especially 0:07:07.800 --> 0:07:11.320 with the COVID sort of experience, I think I would 0:07:11.360 --> 0:07:13.960 avoid those areas. I think there's a chance that people 0:07:14.000 --> 0:07:16.960 decided this was too expensive. I made bad decisions where 0:07:17.000 --> 0:07:18.680 I live. I actually live more in the swamp than 0:07:18.720 --> 0:07:21.840 on the ocean, and you have some potential for that 0:07:21.960 --> 0:07:26.440 to ship first. Sorry about that, but I think that's 0:07:26.720 --> 0:07:28.080 I want to be a little bit buriash there. I 0:07:28.120 --> 0:07:31.280 think some of the growth set areas done, and I 0:07:31.360 --> 0:07:33.800 just I get really uncomfortable with where the spending is 0:07:33.800 --> 0:07:34.440 going to come from. 0:07:34.720 --> 0:07:35.960 And once again I'm. 0:07:35.800 --> 0:07:38.040 Going to spend this weekend doing something completely boring, but 0:07:38.080 --> 0:07:40.840 looking through the jobs data because so many people are 0:07:40.840 --> 0:07:43.680 now asking why is the disconnect? Why do we see 0:07:43.720 --> 0:07:46.160 nothing but doom and gloom on jobs? But the last 0:07:46.160 --> 0:07:48.760 two headline reports from NFP have been really, really strong. 0:07:49.160 --> 0:07:50.880 What shouldn't tell you that? 0:07:51.000 --> 0:07:52.800 I think is once again very overstated. 0:07:52.840 --> 0:07:54.640 I think we're you know, to me, one of the 0:07:54.640 --> 0:07:59.200 biggest mistakes that the BLS does is this birth death model, 0:07:59.200 --> 0:08:02.080 which tries to to make jobs created by new companies. 0:08:02.440 --> 0:08:05.360 They continue to look at EIN or Employment Identification Number 0:08:05.360 --> 0:08:08.160 applications to judge that, and I think we live in 0:08:08.160 --> 0:08:10.680 a world where EI kind of like law school applications 0:08:10.720 --> 0:08:11.200 go up when. 0:08:11.080 --> 0:08:12.320 People are worried about their jobs. 0:08:12.480 --> 0:08:13.960 If all of a sudden you're like, well, maybe I'll 0:08:14.040 --> 0:08:15.520 drive uber on the side or do something. 0:08:15.680 --> 0:08:16.480 There's whole companies. 0:08:16.480 --> 0:08:18.480 Now. I can't remember someone just telling me one of 0:08:18.480 --> 0:08:21.840 the big FinTechs they have a whole setup. You go 0:08:21.920 --> 0:08:23.720 click the asset, sets you up in an LLC, It 0:08:23.760 --> 0:08:25.720 gets you in EIN, you can do all your taxes 0:08:25.760 --> 0:08:28.320 and get all that. So I think we're once again 0:08:28.360 --> 0:08:31.280 making this mistake and seeing, oh, people are creating new businesses. 0:08:31.400 --> 0:08:34.000 I think it's much more people are so nervous they're 0:08:34.360 --> 0:08:36.520 joining the gig economy to supplement their income. 0:08:36.760 --> 0:08:39.240 This was a depressing stant at the program post. Thank 0:08:39.280 --> 0:08:41.000 you sir, now, thank you pretty chip. I do like 0:08:41.000 --> 0:08:45.160 Spade here. It's a lot to think about their promo 0:08:45.600 --> 0:08:50.160 on this technology revolution. Stay with us. More Bloomberg surveillance 0:08:50.200 --> 0:09:02.920 coming up after this Tearan reportedly assessing the latest US 0:09:02.920 --> 0:09:06.000 proposal to reopen the strata from Sam Marie joined US 0:09:06.000 --> 0:09:08.800 Now from Washington for more a Marie that breaking news 0:09:08.840 --> 0:09:12.079 months ago turned around this market equities lower, crew turning 0:09:12.120 --> 0:09:13.360 a little bit high. What do you make of that 0:09:13.400 --> 0:09:14.280 report from. 0:09:14.080 --> 0:09:18.240 Reutter's Yeah, crude turning higher, Jonathan, because the Israelis have 0:09:18.280 --> 0:09:20.440 made it very clear in order for them to view 0:09:20.480 --> 0:09:23.920 that this war is over, the highly enriched uranium that 0:09:23.920 --> 0:09:26.920 iron has needs to be gone or be taken out 0:09:26.920 --> 0:09:28.839 of the country and put into a third party, or 0:09:28.880 --> 0:09:31.120 the United States needs to deal with it. So I'm 0:09:31.160 --> 0:09:34.880 guessing the market is just viewing this as a negative 0:09:34.920 --> 0:09:38.040 towards any time soon that we can get a deal 0:09:38.120 --> 0:09:40.959 between Tehran and Washington and we can bring in a 0:09:41.080 --> 0:09:43.040 RITA send now of energy aspects for a little more 0:09:43.040 --> 0:09:45.400 insight on this, and Rita's Jonathan said, the market turned 0:09:45.440 --> 0:09:48.840 around on this report from Reuters that the Supreme leaders 0:09:48.880 --> 0:09:52.320 issued a directive that the country's near weapons grade uranium 0:09:52.600 --> 0:09:56.000 should not be sent abroad. Does the market now start 0:09:56.040 --> 0:09:58.200 to view that potentially the President's going to have to 0:09:58.200 --> 0:09:59.280 go back to strikes. 0:10:00.000 --> 0:10:02.679 I think the market isn't pricing that fully and yet 0:10:02.760 --> 0:10:05.079 right it's not full escalation. But what I would say 0:10:05.600 --> 0:10:08.280 is that, look, we've been very skeptical each time there 0:10:08.280 --> 0:10:11.839 are these headlines from Pakistan from the US administration or 0:10:11.880 --> 0:10:14.880 we're near. We've been talking about being near to a 0:10:14.920 --> 0:10:17.080 deal for several weeks even months. 0:10:17.120 --> 0:10:17.360 Now. 0:10:17.840 --> 0:10:21.199 The market tends to sell off faster, partly because Brent 0:10:21.360 --> 0:10:25.000 positioning is still long. But in reality, neither side is 0:10:25.160 --> 0:10:28.400 willing to make any significant concession. And I think this 0:10:28.679 --> 0:10:32.520 is exactly proof of that what Iran Supreme Leader has said, 0:10:32.800 --> 0:10:36.640 and it does suggest, at least from the interpretation the 0:10:36.679 --> 0:10:38.640 markets will probably come up with, is that no, the 0:10:38.760 --> 0:10:42.160 a deal isn't near anytime soon, which is what you know, 0:10:42.200 --> 0:10:43.839 which is why prices came off last evening. 0:10:45.200 --> 0:10:48.280 So it's basically living in, as one guest told us yesterday, 0:10:48.600 --> 0:10:52.120 continuous purgatory. Why then our price is still capped at 0:10:52.160 --> 0:10:54.640 this level around one hundred for WTI and one ten 0:10:54.720 --> 0:10:55.120 for Brent. 0:10:56.240 --> 0:10:58.880 Look, that's a great question and something we do a 0:10:58.880 --> 0:11:02.480 lot of analysis on internally as well, because you would think, 0:11:02.600 --> 0:11:06.040 given the scale of the supply losses, we should be 0:11:06.080 --> 0:11:10.679 potentially even double right, what we are seeing is record 0:11:10.760 --> 0:11:13.679 levels of the stocking. We did some analysis on this 0:11:13.840 --> 0:11:17.960 we did start the conflict with about close to four 0:11:18.040 --> 0:11:22.520 hundred million barrels of excess inventory, and so we've run 0:11:22.600 --> 0:11:26.280 down call it almost like half of it. But then 0:11:26.400 --> 0:11:29.720 we've also been drawing down spr at record levels, right, 0:11:29.960 --> 0:11:31.680 so what we are seeing is that the market's in 0:11:31.720 --> 0:11:36.600 a massive deficit. We really haven't gone into outright shortages yet. 0:11:36.800 --> 0:11:39.760 We calculate that's about a month and a half away, 0:11:39.800 --> 0:11:42.000 so it gives us till end June. But what I 0:11:42.080 --> 0:11:44.680 worry about is that everyone, right, and I've been on 0:11:44.720 --> 0:11:47.400 the road for a couple of weeks now, everyone's hopeful 0:11:47.440 --> 0:11:49.839 that okay, the Straits are going to reopen end of June. 0:11:49.880 --> 0:11:51.800 First it was end of May, then it's now end 0:11:51.800 --> 0:11:54.760 of June, and we are really living hand to mouth 0:11:54.880 --> 0:11:58.560 right now running down those infantries. End June comes close 0:11:58.600 --> 0:12:01.160 to that. Refiners around the world. I'm in Asia right 0:12:01.160 --> 0:12:04.720 now extremely underbought. Then when they do come to the market, 0:12:05.040 --> 0:12:08.000 I think the pickup in prices will be material, and 0:12:08.040 --> 0:12:11.079 that's when we can get the overshooting to the upside, 0:12:11.240 --> 0:12:13.800 because there is this sense complacency is the wrong world. 0:12:13.920 --> 0:12:16.640 But hope that things start to pick up a little 0:12:16.679 --> 0:12:19.600 bit and we can just get by just running down 0:12:19.640 --> 0:12:22.480 infantries and then restopping is a problem for the future. 0:12:23.600 --> 0:12:25.480 So really you're saying, by the end of June, we're 0:12:25.520 --> 0:12:27.480 going to hit tank bottoms, so we're going to see 0:12:27.480 --> 0:12:28.600 a risk higher for crude. 0:12:28.800 --> 0:12:29.640 How much higher? 0:12:30.920 --> 0:12:33.720 I don't think we'll hit tank bottoms globally, to be clear, 0:12:33.920 --> 0:12:35.960 but I think there are definitely parts of the world. 0:12:35.960 --> 0:12:38.600 I mean, look, China's got stocks for months and months, right, 0:12:38.679 --> 0:12:40.880 China's not going to have problems, But there are definitely 0:12:40.880 --> 0:12:43.000 other parts of the world, be it Asia for crude. 0:12:43.040 --> 0:12:45.360 If you look at product stocks in the US, we 0:12:45.480 --> 0:12:48.960 are very quickly racing towards tank bottoms and parts of 0:12:49.000 --> 0:12:51.280 the US as well. So yes, there will be pockets 0:12:51.320 --> 0:12:54.360 where we hit tank bottoms. But when that happens, then 0:12:54.480 --> 0:12:57.760 physical markets, not financial markets. Again, that's a separate story. 0:12:57.800 --> 0:13:00.760 It's a little bit broken right now. Liquidity is really thin, 0:13:00.840 --> 0:13:04.080 and again all the tweets coming out doesn't give markets 0:13:04.080 --> 0:13:06.280 a lot of confidence to put on positions. But the 0:13:06.320 --> 0:13:09.400 physical market, you're likely to see prices go up to 0:13:09.440 --> 0:13:12.319 previous size. We've seen crew trade at one sixty one seventy, 0:13:12.600 --> 0:13:16.360 potentially even higher if you are genuinely stocking out in 0:13:16.400 --> 0:13:17.199 parts of the world. 0:13:17.600 --> 0:13:21.120 Stay with us. More Bloomberg surveillance coming up after this. 0:13:30.280 --> 0:13:32.640 Let's turn the page and stay on the financials. America's 0:13:32.679 --> 0:13:35.040 oldest bank and the first listing on the New York 0:13:35.080 --> 0:13:37.319 Stock Exchange getting a little bit of a revamp today. 0:13:37.360 --> 0:13:39.600 The Bank of New York is said to begin training 0:13:39.720 --> 0:13:42.760 under its new ticker b n Y. Joining us now 0:13:42.840 --> 0:13:46.000 is b nycfo McDonough Dermot. Good to see us, so 0:13:46.040 --> 0:13:46.840 welcome to the program. 0:13:46.840 --> 0:13:48.280 Good moran, thanks for having you. 0:13:48.320 --> 0:13:51.200 Guys have had a fantastic run, whether it's under BNY 0:13:51.440 --> 0:13:53.240 or b K. And I don't think this story has 0:13:53.280 --> 0:13:57.320 talked about enough. Alongside Robin, the best performing large bank 0:13:57.360 --> 0:14:00.439 in this country over his tenure. Now, at the very 0:14:00.440 --> 0:14:04.240 beginning of life at BNY, you were the architects of 0:14:04.320 --> 0:14:07.440 the treasury market, one of the early movers in this 0:14:07.520 --> 0:14:10.680 whole financial space. How different is this institution now compared 0:14:10.679 --> 0:14:12.360 to banklen. 0:14:12.440 --> 0:14:16.000 So look, first of all, thanks for having me. America's 0:14:16.000 --> 0:14:23.040 oldest bank, seventeen eighty four storage institution founded by Alexander Hamilton, 0:14:23.080 --> 0:14:26.360 who became the first Treasury secretary, first loan to the 0:14:26.480 --> 0:14:30.640 US government, And so we're very proud of our place 0:14:30.640 --> 0:14:33.840 in the financial market ecosystem, and that's evolved over the 0:14:33.920 --> 0:14:37.360 last two hundred and forty two years. When tickers first 0:14:37.400 --> 0:14:39.560 became a thing in nineteen sixty nine, B and Y 0:14:39.760 --> 0:14:43.280 wasn't available, so we went with BK for America's oldest bank. 0:14:43.640 --> 0:14:46.200 And now we have the opportunity to sync up how 0:14:46.240 --> 0:14:49.320 we present ourselves to clients and shareholders with the Tickers, 0:14:49.320 --> 0:14:50.360 So it's a great day for us. 0:14:50.480 --> 0:14:54.160 Hamilton was an incredibly intelligent man. I have my dads 0:14:54.200 --> 0:14:56.400 whether he would have imagined the position that we're all 0:14:56.440 --> 0:14:59.160 in right now, staring down the technology that is just 0:14:59.200 --> 0:15:01.120 on the horizon. How different a thing is going to 0:15:01.160 --> 0:15:03.160 be for your institution. And when you think about AI, 0:15:03.320 --> 0:15:06.920 imagine not thinking in the terms of low value human capital. 0:15:07.080 --> 0:15:08.720 Can you tell us in the way you are thinking 0:15:08.760 --> 0:15:11.040 about the income and technology we have. 0:15:10.960 --> 0:15:15.080 A very very different strategy on AI. Jonathan, I think 0:15:15.080 --> 0:15:18.040 you've been down to our headquarters. You'll have seen the 0:15:18.120 --> 0:15:22.080 ledgers from that time. You'll have seen our C Talk Center, 0:15:22.120 --> 0:15:24.440 which is quite a modern where we manage the markets. 0:15:24.720 --> 0:15:27.480 Twenty percent of the world's investable assets flowing through our 0:15:27.520 --> 0:15:31.520 pipes every day, so you know You've talked earlier about 0:15:31.760 --> 0:15:33.760 a lot of uncertainty in the world. The only thing 0:15:33.760 --> 0:15:37.200 that's constant in today's world is uncertainty, and so we've 0:15:37.280 --> 0:15:40.400 embraced at B and YAI as a superpower. It's part 0:15:40.400 --> 0:15:44.880 of our strategy, it's part of our transformation, and I 0:15:44.920 --> 0:15:48.200 think we've done a pretty good job at demystifying AI 0:15:48.320 --> 0:15:52.000 for our people. We say inside the walls of AI 0:15:52.120 --> 0:15:55.640 is for everyone, for everywhere, for everything, And we have 0:15:55.680 --> 0:15:59.440 two strands to it, Individual AI and enterprise AI, where 0:15:59.440 --> 0:16:01.680 we focus on how can you use AI as an 0:16:01.720 --> 0:16:05.680 individual to become more productive and to upscale yourself? And 0:16:05.720 --> 0:16:07.920 then as a firm, how do we use AI as 0:16:07.920 --> 0:16:12.800 a strategic superpower to make clients have better services, better goods. 0:16:12.800 --> 0:16:15.320 How do we serve how do we grow More importantly, 0:16:15.600 --> 0:16:18.080 how do we create capacity within the firm to grow? 0:16:18.320 --> 0:16:20.840 That's the word that interests me. Capacity. So when we 0:16:20.880 --> 0:16:23.360 talk about AI, and when I hear the C suite 0:16:23.360 --> 0:16:25.960 discuss it, they'll talk a lot about efficiency. We'll have 0:16:26.000 --> 0:16:28.560 a conversation about job losses. Maybe they'll spend some time 0:16:28.600 --> 0:16:32.320 on an improved product offering for customers. Well, spend a 0:16:32.320 --> 0:16:34.640 bit of time on there capacity is the interesting component 0:16:34.680 --> 0:16:37.360 of this. Does it create capacity and allow you to 0:16:37.400 --> 0:16:39.520 do things that maybe you might not have been able 0:16:39.520 --> 0:16:41.880 to do several years ago. And when you think about 0:16:41.880 --> 0:16:44.400 the spaces that opens up for sake, B and Y, 0:16:44.720 --> 0:16:45.560 what does it mean for you? 0:16:46.880 --> 0:16:49.120 I would say, in a word, AI for us means 0:16:49.160 --> 0:16:52.800 growth and opportunity and things that we thought we couldn't 0:16:52.800 --> 0:16:55.080 do before were now able to do and do at 0:16:55.120 --> 0:16:57.480 a faster pace. If you kind of go back to 0:16:57.480 --> 0:16:59.360 what I said in tree, undred and twenty percent of 0:16:59.400 --> 0:17:03.120 the world and ale assets flowing through our pipes, we 0:17:03.200 --> 0:17:05.719 set in ninety five percent of the US treasury market 0:17:05.800 --> 0:17:08.760 every day. That gives us a lot of data, and 0:17:08.840 --> 0:17:11.440 we'll be able to with AI to unlock that data, 0:17:11.480 --> 0:17:14.959 provide greater insights and greater information, be able to develop 0:17:14.960 --> 0:17:17.560 greater data products for our clients in the whole world 0:17:17.600 --> 0:17:19.760 of digital assets as well. I think we can power 0:17:19.800 --> 0:17:22.760 that with AI. So actually, AI for us we were 0:17:22.800 --> 0:17:25.760 quite optimistic in terms of our ability to grow and transform, 0:17:25.960 --> 0:17:27.880 as you've seen in our results over the last couple 0:17:27.920 --> 0:17:28.320 of years. 0:17:28.359 --> 0:17:30.479 What's the main note of growth? Given the fact that 0:17:30.640 --> 0:17:32.600 people used to think of B and Y as being 0:17:33.359 --> 0:17:35.600 sort of where money markets funds go and get parked, 0:17:35.600 --> 0:17:37.880 and it's the collateral bast And you talk about twenty 0:17:37.880 --> 0:17:41.160