WEBVTT - Fallout From the DC Gala Attack; King Charles Visits Washington 0:00:00.080 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.880 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business App, 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.040 us live on YouTube. 0:00:27.320 --> 0:00:29.520 Michelle Hossein is with us. She flew in to go 0:00:29.600 --> 0:00:33.200 to a quiet White House correspondence dinner, despect to Pig 0:00:33.240 --> 0:00:36.520 Field of the American Express definitive in the United Kingdom 0:00:36.520 --> 0:00:38.320 where they work at the BBC, and of course the 0:00:38.320 --> 0:00:41.519 host of the Michelle Hussein Show across all of the 0:00:41.520 --> 0:00:45.040 Bloomberg platform. We're thrilled she could pick up the pieces 0:00:45.080 --> 0:00:50.000 for us on this Monday morning. Michelle, I think we've 0:00:50.040 --> 0:00:53.239 all seen the video, seen the tape, relived it. I 0:00:53.240 --> 0:00:56.400 don't want to do that. What Americans want to know 0:00:56.600 --> 0:01:00.880 of every persuasion is how does the unit did Kingdom 0:01:01.160 --> 0:01:05.800 have less violence than we have? I guess it goes 0:01:05.880 --> 0:01:09.000 back to a horrific event in the nineties, But what 0:01:09.200 --> 0:01:14.920 is the legislative parliamentary courage that your nation has that 0:01:15.000 --> 0:01:16.600 we just can't do? 0:01:18.480 --> 0:01:21.480 Good morning, tom Good morning, Paul. Wow, you are really 0:01:21.959 --> 0:01:24.120 putting me through my paces right at the beginning of 0:01:24.120 --> 0:01:25.800 this it's so good to be with you from DC, 0:01:26.040 --> 0:01:28.959 And yeah, it was a really dramatic event. I will 0:01:29.000 --> 0:01:32.160 say that, you know, there was this sense of anticipation, 0:01:32.280 --> 0:01:35.039 a real sort of freesaw around this particular dinner because 0:01:35.080 --> 0:01:38.880 the president was coming. But as I was crouched under 0:01:38.880 --> 0:01:42.640 the tables for those minutes, it took before the room 0:01:42.760 --> 0:01:46.120 was cleared of the VIPs and it appeared that the 0:01:46.520 --> 0:01:49.360 person was dealt with and we kind of emerged back 0:01:49.440 --> 0:01:52.800 into putting our heads above the parapet as it were. 0:01:53.120 --> 0:01:56.040 In those moments, I was thinking, as an outsider to 0:01:56.080 --> 0:01:59.120 the United States about the nature of gun culture in 0:01:59.120 --> 0:02:02.280 this country, how different it is in the UK. And 0:02:03.240 --> 0:02:07.760 I will say that you have a long running history 0:02:08.240 --> 0:02:11.400 where you know the right to bear arms. It is 0:02:11.440 --> 0:02:15.200 there as part of as part of your history for 0:02:15.240 --> 0:02:18.160 such a long time. The UK never had that for starters. 0:02:18.240 --> 0:02:22.160 But in nineteen ninety six there was a horrific school 0:02:22.200 --> 0:02:25.600 shooting at a primary school in Scotland and that did 0:02:25.680 --> 0:02:30.760 lead to the licensing of firearms regime that we continue 0:02:30.800 --> 0:02:32.720 to have in the United Kingdom and which some people 0:02:32.760 --> 0:02:36.400 continue to criticize as being too lax. But essentially the 0:02:37.040 --> 0:02:41.960 framework is that licensing of firearms is done through your 0:02:42.000 --> 0:02:44.600 local police force. So every local police force in the 0:02:44.680 --> 0:02:48.000 United Kingdom knows who is licensed to bear arms within 0:02:48.240 --> 0:02:54.280 their community. That's the hallmark of it. So Dunblane, that 0:02:54.480 --> 0:02:57.359 town in Scotland became the tourists for a school shooting. 0:02:58.280 --> 0:03:03.040 But the culture, the environ, the trajectory, the rights are 0:03:03.160 --> 0:03:05.680 very different in the United States. But yeah, all of 0:03:05.680 --> 0:03:07.720 this was going through my mind as I was under 0:03:07.720 --> 0:03:09.240 that table on Saturday. 0:03:08.880 --> 0:03:12.640 Night, Michelle, Another big day in Washington, DC today is 0:03:12.639 --> 0:03:15.200 the King and Queen of England arrive here. What do 0:03:15.240 --> 0:03:18.800 you think the agenda is for the King and Queen? 0:03:20.080 --> 0:03:23.840 You know, this visit was already complex for a number 0:03:23.840 --> 0:03:27.800 of reasons, primarily because of tensions between the US and 0:03:27.840 --> 0:03:31.760 the UK governments over the Iran War. The difference of opinion, 0:03:31.919 --> 0:03:35.400 the fact that British ministers and the Prime Minister openly 0:03:35.480 --> 0:03:40.520 refer to this as being President Trump's war. That has 0:03:40.560 --> 0:03:42.760 been a real disappointment to the President, who would like 0:03:42.840 --> 0:03:45.400 the UK to be firmly on side. The UK position 0:03:45.680 --> 0:03:48.240 is that British bases are only to be used for 0:03:48.560 --> 0:03:53.360 defensive action against Iran so that was complex. The fallout 0:03:53.360 --> 0:03:56.200 from Jeffrey Epstein already made that complex. That's what the 0:03:56.320 --> 0:03:59.680 King is flying into today. But then I was with 0:03:59.680 --> 0:04:03.080 Britain diplomats on Saturday night. They were amongst the guests 0:04:03.160 --> 0:04:06.040 in the room, Bloomberg's guests and the guests of other 0:04:06.240 --> 0:04:10.680 news organizations, and of course they were immediately thinking and 0:04:10.720 --> 0:04:14.160 we immediately started to think about any review of the 0:04:14.280 --> 0:04:17.800 arrangements for this particular visit. So there has been a 0:04:17.839 --> 0:04:21.440 last minute review of security. Some arrangements perhaps have been 0:04:21.520 --> 0:04:24.240 changing around the margins, but this is a tight itinery 0:04:24.440 --> 0:04:28.000 in DC, in Virginia, in New York in the coming 0:04:28.160 --> 0:04:31.840 four days. And basically the King's mission is going to 0:04:31.839 --> 0:04:36.120 be to use his lifelong diplomatic skills to try and 0:04:37.000 --> 0:04:40.840 to try and improve the relationship. And really that means 0:04:40.839 --> 0:04:45.000 the relationship between the Prime Minister and the President, which 0:04:45.040 --> 0:04:47.120 is not as the UK would want it. 0:04:47.360 --> 0:04:48.880 In the way they're going to improve. This is up 0:04:48.880 --> 0:04:52.920 Massachusetts Avenue. Michell Hussein with us with Bloomberg again the 0:04:53.000 --> 0:04:56.200 Michelle Hossein Show, and we continue with her this morning. Now, Michelle, 0:04:56.200 --> 0:04:58.599 I want to cut to the chase. It's the Royal 0:04:58.720 --> 0:05:03.200 Garden party ending it is well, if I went, can 0:05:03.240 --> 0:05:05.800 you see me in the Lack and Company London black 0:05:05.839 --> 0:05:09.680 beaver furfelt at it's thirteen hundred dollars? Could I pull 0:05:09.720 --> 0:05:12.400 off the top? At Michelle? 0:05:13.839 --> 0:05:16.760 The dress code, I'm sorry to disappoint you, is I 0:05:16.760 --> 0:05:19.640 think going to be more ordinary. We've actually been told 0:05:20.000 --> 0:05:21.960 hats are not encouraged, whereas if you go to a 0:05:22.000 --> 0:05:27.080 Buckingham Palace garden party it's very much hats encouraged for 0:05:28.360 --> 0:05:30.480 the guests. So there's going to be a different vibe. 0:05:30.480 --> 0:05:33.320 But this is one of the first engagements that the 0:05:33.400 --> 0:05:35.920 King and Queen will have here in the United States. 0:05:35.960 --> 0:05:39.279 It'll be in the beautiful setting of the British Embassy, 0:05:40.400 --> 0:05:42.799 just you know, about fifteen minutes drive away from where 0:05:42.880 --> 0:05:48.559 I am, the incredible Edwin Luttein's designed residence, So that's 0:05:48.600 --> 0:05:51.680 the setting. The King, with his interest in gardens, will 0:05:51.680 --> 0:05:54.920 no doubt be looking around the gardens very carefully. So 0:05:55.520 --> 0:05:57.039 I think the hope will be that it sets a 0:05:57.120 --> 0:06:03.160 tone for the visit and therefore for the next few days, 0:06:03.240 --> 0:06:06.000 and again this sense that perhaps the King is the 0:06:06.040 --> 0:06:08.320 one who can sort of smooth over the troubled waters. 0:06:08.360 --> 0:06:11.039 I mean, let's face it, the most likely scenario is 0:06:11.080 --> 0:06:14.200 that God willing, everything goes well for the next few days. 0:06:14.440 --> 0:06:17.400 The President says nice things about the UK, the King 0:06:17.520 --> 0:06:20.440 says nice things. We know he will about the United States. 0:06:20.800 --> 0:06:22.280 There's a lot of there'll be a lot of talk 0:06:22.320 --> 0:06:24.880 about America at two fifty. That is the reason for 0:06:24.960 --> 0:06:29.760 this particular visit. Most likely things will go back, but 0:06:30.080 --> 0:06:31.880 too after they leave. 0:06:32.000 --> 0:06:33.960 I got to get to sim Michelle David Charter over 0:06:33.960 --> 0:06:36.200 at the Times of London. This is the heart of 0:06:36.240 --> 0:06:39.520 the matter. A royal visit after a presidential shooting. It's 0:06:39.600 --> 0:06:43.680 nineteen seventy six all over again. Your visit is changed, 0:06:43.880 --> 0:06:44.240 is it not. 0:06:46.480 --> 0:06:51.960 Yes, no doubt. There's you know, that evidence that we 0:06:52.000 --> 0:06:55.240 had on Saturday night of just how inflamed the political 0:06:55.279 --> 0:06:58.120 climate is in the United States. That's going to be 0:06:58.360 --> 0:07:02.200 in everyone's forefront of everyone's minds. The fact that this 0:07:02.640 --> 0:07:05.720 hugely important state visit comes less than forty eight hours 0:07:05.960 --> 0:07:10.000 after that White House correspondence dinner. I think, you know, 0:07:10.080 --> 0:07:13.560 from the British hope and expectation will be that the 0:07:13.640 --> 0:07:17.480 King sort of elevates that situation, that there's something about 0:07:17.480 --> 0:07:22.200 his presence that makes everyone around him rise above politics, 0:07:22.760 --> 0:07:25.200 and that will have been the hope for the UK 0:07:25.560 --> 0:07:28.480 US bond at this particular moment in time. Maybe even 0:07:28.520 --> 0:07:32.080 it's got something to offer the United States domestically as well, 0:07:32.120 --> 0:07:35.239 a reminder that there are conversations that happen like above 0:07:35.280 --> 0:07:38.560 and beyond the political phrase. So perhaps that's what he 0:07:38.600 --> 0:07:40.400 brings with him as he flies in today. 0:07:40.560 --> 0:07:43.000 Michelle, thank you so much with her coverage here of 0:07:43.040 --> 0:07:45.600 the visit of the King and Queen. Stay with us. 0:07:45.880 --> 0:07:49.120 More from Bloomberg Surveillance coming up after this. 0:07:56.320 --> 0:07:59.640 You are listening to the Bloomberg Surveillance podcast. Catch us 0:07:59.680 --> 0:08:03.000 Live weekday afternoons from seven to ten am Eastern Listen 0:08:03.080 --> 0:08:06.640 on Applecarplay and Android Otto with the Bloomberg Business app, 0:08:06.840 --> 0:08:08.560 or watch us Live on YouTube. 0:08:08.840 --> 0:08:12.080 I have three words when I speak to Cherubs and 0:08:12.120 --> 0:08:16.760 I talk about concision. I talk about acuity. I talk 0:08:16.840 --> 0:08:21.720 about avoiding conflation, which is something that you conflate two 0:08:21.760 --> 0:08:24.360 ideas together and you get in trouble. You are the 0:08:24.440 --> 0:08:27.720 queen because the queen's visiting in Washington. You are the 0:08:27.880 --> 0:08:31.720 queen of acuity, and you walked in the studio having 0:08:31.760 --> 0:08:38.000 a full Patterson tantrum over sovereign wealth. Funds beware, Yeah, 0:08:38.040 --> 0:08:40.440 what do I need to know about the rich guys 0:08:40.520 --> 0:08:41.520 country to country? 0:08:42.080 --> 0:08:45.480 So I think one of the biggest underappreciated risks right 0:08:45.520 --> 0:08:48.880 now for US financial markets and especially this tech rally, 0:08:49.440 --> 0:08:51.959 is the possibility. I'm not saying it will happen, but 0:08:52.040 --> 0:08:55.400 there is a probability that's not zero, that some of 0:08:55.440 --> 0:08:59.280 the golf sovereign wealth funds, particularly I think Saudi and UAE, 0:09:00.120 --> 0:09:02.560 if this war lasts a little longer, are going to 0:09:02.600 --> 0:09:05.559 need cash. They're going to need it to shore up defenses, 0:09:05.559 --> 0:09:09.079 to shore up damaged infrastructure. And right now the sovereign 0:09:09.080 --> 0:09:12.520 wealth fund cash is largely We're the biggest single recipient 0:09:12.559 --> 0:09:15.640 going to the US, and it's going fairly concentrated to 0:09:15.840 --> 0:09:19.800 technology and through a handful of financial intermediaries. Now I'm 0:09:19.800 --> 0:09:22.720 not saying it'll stop coming, but if that flow is 0:09:22.840 --> 0:09:26.080 cut by a third even it would have a material 0:09:26.160 --> 0:09:29.160 impact on the US. So that is a risk I'm 0:09:29.160 --> 0:09:31.840 watching carefully. Saudi Arabia has a pretty big budget deficit, 0:09:32.120 --> 0:09:34.040 so it's not like they have a ton of cash 0:09:34.080 --> 0:09:35.720 sitting around they can easily tap. 0:09:36.040 --> 0:09:39.120 Interesting just in the small little world of professional golf, 0:09:39.440 --> 0:09:42.480 we're starting to see it. There's reports out there, widely 0:09:42.520 --> 0:09:46.440 reported that they may withdraw their financial support of the 0:09:46.480 --> 0:09:48.960 Live Golf tour to the tune of a five billion 0:09:49.000 --> 0:09:53.120 dollar number, and that caught everybody by surprise, and I 0:09:53.120 --> 0:09:55.520 think in some of their discussions they were suggesting, Hey, 0:09:55.640 --> 0:09:57.880 is the pressure from the war, we need to rethink 0:09:57.920 --> 0:10:01.040 some of our investments. That ties in, yeah, exactly with. 0:10:01.000 --> 0:10:04.360 It and PIF, which is the Saudi main sovereign will fund. 0:10:04.360 --> 0:10:07.840 There's about thirteen big ones in the Gulf countries the GCC. 0:10:08.320 --> 0:10:10.920 But PIF, even before the war in December, came out 0:10:10.920 --> 0:10:13.079 with its five year plan saying it wanted to be 0:10:13.080 --> 0:10:18.040 more efficient, more and more domestically focused with its investment. 0:10:18.120 --> 0:10:20.800 So I just think we need to be thoughtful on 0:10:21.440 --> 0:10:24.400 assuming that capital just keeps coming to the same degree 0:10:24.440 --> 0:10:24.839 it has. 0:10:25.240 --> 0:10:27.440 And I'm not sure what that says about that whole 0:10:27.480 --> 0:10:30.800 region of the world, which was the money was just flowing. 0:10:30.320 --> 0:10:32.000 In there for years and years. 0:10:32.040 --> 0:10:34.360 Every financial firm in the world was setting up an 0:10:34.360 --> 0:10:36.080 office in that part of the world, and that was 0:10:36.559 --> 0:10:41.160 expected to be maybe a new financial globe, the. 0:10:41.120 --> 0:10:44.040 Capital of capital exactly right, that's what they wanted to be. 0:10:44.200 --> 0:10:46.600 So after I mean it's been going on for a while. 0:10:46.600 --> 0:10:50.080 But twenty fifteen, twenty sixteen, you guys remember oil prices 0:10:50.200 --> 0:10:53.280 crashing in that period, partly because US fracking took off 0:10:53.840 --> 0:10:56.120 and the Middle East had an Aha moment and they said, 0:10:56.120 --> 0:10:58.479 wait a second, we need to double down on diversifying 0:10:58.520 --> 0:11:02.199 our economies. Of that was the sovereign wealth funds making 0:11:02.200 --> 0:11:06.600 these big strategic investments and attracting US money to them. 0:11:06.960 --> 0:11:09.600 So it is a quid pro quo. And they've built 0:11:09.679 --> 0:11:12.800 up tourism, they've built up high value manufacturing, they've built 0:11:12.880 --> 0:11:16.640 up tech and finance, of course, but can it last? 0:11:16.800 --> 0:11:19.040 Partly it depends how long this war goes. Is it 0:11:19.120 --> 0:11:21.400 just temporary damage or is it something bigger? 0:11:21.520 --> 0:11:24.280 I get an email coming in here in anticipation of 0:11:24.360 --> 0:11:27.560 Rebecca Patterson being with his threads down in Durham. First 0:11:27.559 --> 0:11:29.480 of all, I'd love to go down just to see 0:11:29.480 --> 0:11:33.160 the Durham Bulls play in the stadium. But they got 0:11:33.200 --> 0:11:35.360 a new arena which is still a jewel, very nice. 0:11:36.040 --> 0:11:39.160 It's right downtown and you know, good morning down in 0:11:39.200 --> 0:11:42.960 North Carolina. And he is an absolutely brilliant question which 0:11:43.000 --> 0:11:45.280 goes back to your time at Best in your trust. Okay, 0:11:45.679 --> 0:11:50.000 We have been schooled that for certain our actual assumption 0:11:50.200 --> 0:11:55.280 of equity returns will be single digit, two hundred beeps 0:11:55.280 --> 0:11:59.280 above nominal GDP. We all studied the test, drank the 0:11:59.360 --> 0:12:03.760 kool aid, and it's just been wrong, wrong, wrong, for years. 0:12:04.280 --> 0:12:08.520 Fred wants to know who's right this equity market are 0:12:08.760 --> 0:12:12.280 single digits subsided equity returns? Which is it? 0:12:12.760 --> 0:12:15.839 I mean the equity returns we've had over the last 0:12:15.840 --> 0:12:18.839 call it, fifteen years or so have been fueled by 0:12:19.160 --> 0:12:23.960 I think three main forces. Unusually large fiscal stimulus. Some 0:12:24.040 --> 0:12:27.280 of that was pandemic related, and some of it was 0:12:27.640 --> 0:12:31.880 national security economic security related, monetary policy. Remember it wasn't 0:12:31.920 --> 0:12:34.080 that long ago that we had zero and even in 0:12:34.120 --> 0:12:37.560 some countries negative interest rates that fueled equity assets. And 0:12:37.600 --> 0:12:41.560 then the structural tech trend. And I think those three 0:12:41.640 --> 0:12:46.280 things combined help explain the differential between the economy and 0:12:46.320 --> 0:12:49.160 the equity markets. Now going forward, are we able to 0:12:49.200 --> 0:12:51.720 continue this or do we go back to something more 0:12:51.920 --> 0:12:55.760 in line with historical averages. With bond yields at four 0:12:55.800 --> 0:12:59.320 point three one this morning, and the FED in my view, 0:12:59.400 --> 0:13:02.280 unlikely to go back to a zero world or something 0:13:02.320 --> 0:13:05.959 close to that anytime soon. Because inflation is structurally higher. 0:13:06.559 --> 0:13:09.480 I think it's going to be difficult to continue the 0:13:09.640 --> 0:13:13.920 ride we've had with stocks. I mean, again, this year, 0:13:13.920 --> 0:13:16.319 we're only up four percent year to date. It's funny, 0:13:16.360 --> 0:13:18.640 everyone's like an all time high, all time high. It 0:13:18.720 --> 0:13:21.920 feels like it should be more. It's only four percent. Right, 0:13:21.960 --> 0:13:23.720 If you had your money in Japan, you'd be up 0:13:23.720 --> 0:13:25.120 twenty percent already this year. 0:13:25.320 --> 0:13:27.120 Are you surprised though, that when we did have that 0:13:27.240 --> 0:13:29.000 sell off with the beginning of the war. 0:13:29.760 --> 0:13:30.240 I think a lot of. 0:13:30.240 --> 0:13:34.720 People were surprised the veracity of the snapback one hundred percent. 0:13:34.920 --> 0:13:35.680 One hundred percent. 0:13:35.720 --> 0:13:39.679 I mean the fact that we have oil prices at 0:13:39.679 --> 0:13:41.439 one hundred and seven hundred and eight dollars I'm looking 0:13:41.480 --> 0:13:44.240 at Brent crude, that we have higher bond yields, that 0:13:44.280 --> 0:13:48.439 we have a worsening fiscal position, we have a K 0:13:48.640 --> 0:13:51.520 shaped economy with those lower end consumers hit harder by 0:13:51.600 --> 0:13:54.960 high energy and high food prices. It is and job 0:13:55.040 --> 0:13:58.200 markets that aren't worsening but have stalled. The Fact that 0:13:58.240 --> 0:14:01.240 stocks are here and it rallies so hard is striking 0:14:01.320 --> 0:14:04.920 to me. I think investors have been conditioned in recent 0:14:05.000 --> 0:14:08.160 years to expect that we will have a resolution quickly 0:14:08.240 --> 0:14:10.360 because it's a midterm election year and it's not in 0:14:10.440 --> 0:14:13.240 the GOP's interest to have a prolonged war that could 0:14:13.280 --> 0:14:17.760 hurt voters. And they've been conditioned to expect that buying 0:14:17.760 --> 0:14:19.960 the dip pays. It worked in pandemic, it worked in 0:14:20.000 --> 0:14:22.440 Liberation Day. But I think you have to be really 0:14:22.480 --> 0:14:23.280 careful about that. 0:14:23.760 --> 0:14:26.640 You know. Rebecca's people called me up this weekend, stop 0:14:26.680 --> 0:14:29.280 me on the street, I should say, rather, and they said, Tom, 0:14:29.320 --> 0:14:31.960 if you don't plug the Council for Economic Education, she's 0:14:32.000 --> 0:14:34.280 not coming back. This is a cool event you got. 0:14:34.360 --> 0:14:38.240 Jan Axi is showing up of Goldman Sachs and I've 0:14:38.240 --> 0:14:41.040 done this years ago. I think this is your diamond 0:14:41.040 --> 0:14:44.680 Gala event. Yep. And is it like with the King 0:14:44.720 --> 0:14:47.280 and Queen Meat, is it like you know, tuxedos and 0:14:47.360 --> 0:14:47.720 all that. 0:14:47.800 --> 0:14:50.280 You No, we don't force tuxedos. We let people show 0:14:50.320 --> 0:14:53.120 up in their work clothes. And you all are obviously 0:14:53.120 --> 0:14:55.520 invited as guests to my table if you can be 0:14:55.600 --> 0:14:59.080 free on a six. But the SEED Council on Economic 0:14:59.200 --> 0:15:03.040 Education is focused on making sure K through twelve students 0:15:03.560 --> 0:15:07.520 finish high school understanding the basics of economics and personal finances. 0:15:08.920 --> 0:15:12.040 It's getting more traction. In recent years, we've seen state 0:15:12.120 --> 0:15:15.560 legislatures wake up. We now have thirty nine states in 0:15:15.600 --> 0:15:18.400 the US that require high school kids to take at 0:15:18.480 --> 0:15:22.200 least one personal finance class before they graduate. So thirty 0:15:22.320 --> 0:15:24.520 nine is a huge step forward from where we were, 0:15:24.800 --> 0:15:28.000 but it's not fifty, which is crazy because this is 0:15:28.080 --> 0:15:30.640 so fundamental. If we want a strong economy, if we 0:15:30.680 --> 0:15:34.720 want strong stock markets, we have to have financially healthy consumers. 0:15:35.080 --> 0:15:38.000 So you can talk about the moral arguments for this, 0:15:38.120 --> 0:15:41.240 the ability to narrow that opportunity gap. But at the 0:15:41.320 --> 0:15:43.320 end of the day, if I'm an equity investor listening 0:15:43.320 --> 0:15:45.520 to this conversation, this is in my interest. 0:15:46.280 --> 0:15:49.640 Interesting my daughter has. They just added that course a 0:15:49.680 --> 0:15:53.400 personal finance and it's an AP course, so advanced placement, yes, 0:15:53.440 --> 0:15:55.240 which is an incentive for kids to take it. And 0:15:55.280 --> 0:15:56.400 I was still happy to see that. 0:15:56.560 --> 0:15:59.600 Yeah. So we've just partnered with the college board on 0:15:59.680 --> 0:16:03.920 that course, and we agree if you can get kids 0:16:03.920 --> 0:16:06.560 focusing on this, they're going to have a better time 0:16:06.640 --> 0:16:09.160 in college, and they're going to have better prospects going ahead. 0:16:09.200 --> 0:16:11.400 They'll understand what the credit score is, how to borrow 0:16:11.440 --> 0:16:12.920 how to save those are. 0:16:12.880 --> 0:16:15.040 Great to the thirteen colonies, but you got to know 0:16:15.040 --> 0:16:18.320 how to also bounce the chess and what compounding. 0:16:17.840 --> 0:16:21.200 Means ob comparedison. Thank you so much, Thank you, I 0:16:21.280 --> 0:16:23.880 appreciate it. With the Council on Foreign Relations, and again 0:16:24.880 --> 0:16:28.440 the CEE the Council of Economic Education with their event 0:16:29.040 --> 0:16:33.400 in early May. Stay with us. More from Bloomberg Surveillance 0:16:33.440 --> 0:16:34.800 coming up after this. 0:16:42.040 --> 0:16:45.640 You're listening to the Bloomberg Surveillance podcast. Catch US Live 0:16:45.680 --> 0:16:48.880 weekday afternoons from seven to ten am Eastern Listen on 0:16:48.920 --> 0:16:52.600 Applecarplay and Android Auto with the Bloomberg Business app, or 0:16:52.760 --> 0:16:54.240 watch US live on YouTube. 0:16:54.400 --> 0:16:58.440 Nancy Tegler joining US Chief Executive Offer Cio Laffer Tanglar 0:16:59.120 --> 0:17:03.280 Investments this morning. My deepest sympathies. You're joining Webbush and 0:17:03.320 --> 0:17:08.560 then Nutcase Dan Ives. Why pray tell you're dressed in black. 0:17:08.600 --> 0:17:10.040 That's not allowed it web. 0:17:09.760 --> 0:17:12.280 Bush, I know, I know, but it's the shoes for me, 0:17:12.359 --> 0:17:13.760 and you can't see those on radio. 0:17:14.040 --> 0:17:17.479 They saw your track record, which is the classic Nancy Tanglar. 0:17:17.640 --> 0:17:20.600 Just shut up and be optimistic and be in the market. 0:17:20.840 --> 0:17:22.080 I'm not going to go to the numbers now. We 0:17:22.119 --> 0:17:25.800 don't have time. But you are the definition of excellence. 0:17:26.080 --> 0:17:27.640 How did you do it well? 0:17:27.680 --> 0:17:29.879 Discipline? I mean, that's what it takes tom as you know, 0:17:29.960 --> 0:17:32.399 and you actually have to anticipate and be willing to 0:17:32.440 --> 0:17:34.560 go against the crowd. So we called for a bottom 0:17:34.560 --> 0:17:38.639 on April sixth, April fourth. Really we were in buying 0:17:38.680 --> 0:17:41.320 on April seventh, and that's how you make money in 0:17:41.359 --> 0:17:43.320 the market. We did the same thing with deep Seak. 0:17:43.880 --> 0:17:47.560 The naysayers, the hedge funds, they're always short, fast quick. 0:17:48.080 --> 0:17:50.880 We're investing for the next two to three to five years. 0:17:51.040 --> 0:17:52.680 We're going to get a big, big week of tech 0:17:52.720 --> 0:17:54.560 earnings this week. What are you looking for for some 0:17:54.600 --> 0:17:55.840 of those big names. 0:17:55.680 --> 0:17:58.680 Here, Molly, If you haven't beat beat and raised, you've 0:17:58.680 --> 0:18:01.359 gotten slaughtered in this mart And even some companies that 0:18:01.440 --> 0:18:04.080 did beat, beat and raise, it wasn't enough. So what 0:18:04.119 --> 0:18:05.840 we're going to look for is the same thing everyone 0:18:05.880 --> 0:18:07.520 else is looking for. We're going to look at guidance. 0:18:07.960 --> 0:18:10.520 Margins are at historic eyes, so we want to see 0:18:10.520 --> 0:18:13.359 if that can sustain. And then we're looking at you know, 0:18:13.440 --> 0:18:17.159 implementation cases for AI. So if you look at ge Veranova, 0:18:17.520 --> 0:18:20.360 they are benefiting from the AI craze, but on their 0:18:20.400 --> 0:18:24.159 call they were talking about how they were utilizing AI 0:18:24.280 --> 0:18:25.360 to improve margins. 0:18:25.640 --> 0:18:27.800 It seems like the we did have a rotation late 0:18:27.920 --> 0:18:30.080 last year coming into this year out of some of 0:18:30.080 --> 0:18:32.000 those growth names, some of those high multiple names, into 0:18:32.000 --> 0:18:35.120 some more cyclical. But now it seems like that that's 0:18:35.160 --> 0:18:38.240 just reversed. Here is that how you're viewing it here? 0:18:38.320 --> 0:18:41.080 Back to what has been driving this market, which is 0:18:41.080 --> 0:18:41.879 some of that growth in that. 0:18:41.920 --> 0:18:44.800 Sex You have to have technology work in order for 0:18:44.840 --> 0:18:46.800 the market to work, and so that's why we were 0:18:46.800 --> 0:18:49.560 in buying things like adding to Micron at three sixty 0:18:49.600 --> 0:18:52.560 six just three weeks ago, Stocks at four ninety six. 0:18:52.600 --> 0:18:54.679 We were adding to a number of the software names. 0:18:54.880 --> 0:18:58.560 As contrary as that may seem, like pound here, Microsoft. 0:18:58.000 --> 0:18:59.879 How do you view that risk because we did have 0:19:00.200 --> 0:19:01.960 one of like you software is one of those groups 0:19:02.000 --> 0:19:05.199 that sold off because perhaps it's going to be you know, 0:19:05.280 --> 0:19:08.479 really the competitive aspect visa the AI is not going 0:19:08.520 --> 0:19:10.120 to be favorable to some of these software nows. 0:19:10.119 --> 0:19:11.879 How do you view that? Well, we got out of 0:19:11.920 --> 0:19:14.520 some of them in anticipation of that. So we're out 0:19:14.520 --> 0:19:18.040 of Adobe, we're out of Salesforce, the seat model doesn't. 0:19:18.119 --> 0:19:20.080 I don't think isn't going to sustain. And we're hearing 0:19:20.119 --> 0:19:23.639 rumblings that Salesforce is pivoting away from seats, But we 0:19:23.720 --> 0:19:26.000 were adding to names like Microsoft, which we think will 0:19:26.000 --> 0:19:28.560 be a winner. We actually and this is very controversial. 0:19:28.600 --> 0:19:31.040 It goes up and down like a Yo yo, but 0:19:31.080 --> 0:19:35.440 we're actually adding to service now selectively. We do think 0:19:35.440 --> 0:19:37.040 it's a winner long term. And then of course the 0:19:37.119 --> 0:19:38.400 cyber names, so. 0:19:38.440 --> 0:19:41.080 Something like a Salesforce dot com whichsen had been such 0:19:41.080 --> 0:19:46.480 an extraordinary story, right, but the revenue is subscription by seat, right. 0:19:47.440 --> 0:19:50.919 Is there another way for those types of companies to go. 0:19:51.359 --> 0:19:54.680 Yeah, Actually they've purchased recently. One of my clients runs 0:19:54.680 --> 0:19:58.880 a software company that they measure volume, and so that 0:19:59.000 --> 0:20:01.000 I think will be one of the things that will 0:20:01.440 --> 0:20:04.520 shift sort of more of a platform model, which you've 0:20:04.560 --> 0:20:08.159 seen many of the software companies shift to. Margins may 0:20:08.160 --> 0:20:11.040 get compressed some, but we'll see going forward. I think 0:20:11.359 --> 0:20:13.639 AI will drive margin growth. 0:20:13.840 --> 0:20:16.600 The heart of the matter on the arc of a 0:20:16.680 --> 0:20:20.399 decade or two is people are scared stiff, and we 0:20:20.640 --> 0:20:25.040 have climbed in a bull market. A wall of worry 0:20:25.440 --> 0:20:27.840 is the wall of worry psychologically I mean you have 0:20:27.920 --> 0:20:31.480 a huge advantage. You're out in Arizona, where the minimum 0:20:31.480 --> 0:20:34.679 age is forty five. You can't enter the state unless 0:20:34.680 --> 0:20:38.560 you're forty five. I mean, break the breakfast club in Phoenix. 0:20:38.880 --> 0:20:42.199 No one's under seventy years old, okay, and then the 0:20:42.280 --> 0:20:45.879 avocado toast is nine dollars. The fact is, the wall 0:20:45.880 --> 0:20:47.800 of worry is still there, the wall of money, the 0:20:47.840 --> 0:20:50.119 wall of werry. I'm scared, stiff, I'm not going to 0:20:50.119 --> 0:20:52.679 be in the market. That's the heart of this discussion, 0:20:52.720 --> 0:20:53.119 isn't it. 0:20:53.240 --> 0:20:55.000 Yeah, And that's why you got to hire somebody like 0:20:55.080 --> 0:20:57.120 us to do it. Let me do the worrying, because 0:20:57.440 --> 0:21:00.159 it is a brutal business and the goal is us 0:21:00.160 --> 0:21:02.640 to manage all the money for the Bechdel Corporation and 0:21:02.680 --> 0:21:05.680 the family. And I said once that investing was about 0:21:05.720 --> 0:21:08.440 being mostly right. And you could hear an audible gas 0:21:08.480 --> 0:21:11.520 from all the engineers who are building bridges and buildings 0:21:11.520 --> 0:21:13.639 all over the world. But it's a tough business. As 0:21:13.680 --> 0:21:15.280 you know, Tom, We've been through it, and I think 0:21:15.359 --> 0:21:19.879 experience matters in markets like this instead of just reading 0:21:19.920 --> 0:21:20.800 the history books. 0:21:21.080 --> 0:21:23.600 Okay, looks like one word, it looks like we're gonna 0:21:23.600 --> 0:21:25.560