1 00:00:05,040 --> 00:00:08,639 Speaker 1: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 2 00:00:08,680 --> 00:00:12,040 Speaker 1: with Paul Sweeney. Join us each day for insight from 3 00:00:12,039 --> 00:00:16,240 Speaker 1: the best in economics, finance, investment, and international relations. You 4 00:00:16,239 --> 00:00:19,599 Speaker 1: can also watch the show live on YouTube. Visit the 5 00:00:19,600 --> 00:00:24,360 Speaker 1: Bloomberg Podcast channel on YouTube to see the show weekday 6 00:00:24,360 --> 00:00:27,400 Speaker 1: mornings from seven to ten am Eastern from our global 7 00:00:27,440 --> 00:00:32,080 Speaker 1: headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 8 00:00:32,440 --> 00:00:36,000 Speaker 1: or anywhere else you listen, and always on Bloomberg Radio, 9 00:00:36,200 --> 00:00:40,680 Speaker 1: the Bloomberg Terminal, and the Bloomberg Business App. For this introduction, 10 00:00:41,000 --> 00:00:44,480 Speaker 1: I need to go to a note which was codified 11 00:00:44,520 --> 00:00:48,239 Speaker 1: in market economics long ago at CJ. Lawrence. You had 12 00:00:48,240 --> 00:00:52,319 Speaker 1: a headline, and then you had a subhead, and then 13 00:00:52,360 --> 00:00:54,360 Speaker 1: you had a chart. And it was of course the 14 00:00:54,480 --> 00:00:57,680 Speaker 1: discussion around the chart that led to the invention of 15 00:00:57,760 --> 00:01:02,040 Speaker 1: modern market economics and many people. This began with Eddheimen 16 00:01:02,120 --> 00:01:05,040 Speaker 1: at CJ. Lawrence just a few years ago. Ed, let 17 00:01:05,080 --> 00:01:08,280 Speaker 1: me get to your most recent note, coveted on Wall Street. Remember, folks, 18 00:01:08,360 --> 00:01:11,480 Speaker 1: we protect the copyright of all of our guests. Get 19 00:01:11,600 --> 00:01:16,280 Speaker 1: the Edheimen note through Evercore Isi Edheimen. We're back in 20 00:01:16,319 --> 00:01:20,560 Speaker 1: the old normal inflation range. Is it all clear on 21 00:01:20,600 --> 00:01:22,759 Speaker 1: the Edheimen front for Jerome Powell? 22 00:01:24,200 --> 00:01:27,040 Speaker 2: I wouldn't say it's all clear, but it's pretty dark clear. 23 00:01:27,720 --> 00:01:31,800 Speaker 3: It's clear enough for them to continue to pursue the pause. 24 00:01:32,760 --> 00:01:35,560 Speaker 3: Whether they cut in March, it's a little early. It 25 00:01:35,640 --> 00:01:39,280 Speaker 3: might you'll want to wait another meeting or two. But 26 00:01:39,880 --> 00:01:44,600 Speaker 3: my strongest conviction is that inflation is slowing and we'll 27 00:01:44,640 --> 00:01:49,000 Speaker 3: continue to slow. You have rents, wages, but I don't 28 00:01:49,000 --> 00:01:52,280 Speaker 3: want to overlook that there are some prices that are 29 00:01:52,280 --> 00:01:56,600 Speaker 3: going up like crazy. But in general I think that 30 00:01:56,680 --> 00:01:58,760 Speaker 3: inflation is coming down. 31 00:01:59,200 --> 00:02:00,240 Speaker 2: And tell that know. 32 00:02:00,360 --> 00:02:03,720 Speaker 3: I have a warm spot of a warm spot in 33 00:02:03,800 --> 00:02:08,400 Speaker 3: my heart for Milton Friedman, and money growth has slowed down. 34 00:02:08,480 --> 00:02:12,560 Speaker 3: So I'm sort of following his right and his footsteps, and. 35 00:02:12,480 --> 00:02:15,320 Speaker 1: I'm looking at shelter inflation as a part and parcel 36 00:02:15,400 --> 00:02:18,880 Speaker 1: the goofiness of a you've always ignored that you've gone 37 00:02:18,919 --> 00:02:22,800 Speaker 1: out for granular data and you feature mortgage rates coming down? 38 00:02:23,280 --> 00:02:26,160 Speaker 1: Is the mortgage rates coming down from eight percent? Say? 39 00:02:26,680 --> 00:02:29,440 Speaker 1: Is it a linear function or is there a tip 40 00:02:29,480 --> 00:02:32,840 Speaker 1: point where home building becomes normal again? 41 00:02:34,280 --> 00:02:36,960 Speaker 3: It seems to be a tip point somewhere, a little 42 00:02:36,960 --> 00:02:41,600 Speaker 3: bit above seven. Boys race War eight, maybe a little 43 00:02:41,639 --> 00:02:46,720 Speaker 3: over eight, and now they're around seven. And all the 44 00:02:46,760 --> 00:02:50,839 Speaker 3: information that we have shows that housing has bounced back 45 00:02:50,960 --> 00:02:55,959 Speaker 3: pretty nicely. Even Tom, we're getting a little bit of 46 00:02:56,040 --> 00:02:59,040 Speaker 3: an improvement in rents, which surprises me. 47 00:02:59,120 --> 00:03:00,240 Speaker 2: For three weeks. 48 00:03:01,520 --> 00:03:06,040 Speaker 3: We survey, the survey we've done of apartment companies has 49 00:03:06,080 --> 00:03:07,000 Speaker 3: picked up a little bit. 50 00:03:07,160 --> 00:03:11,480 Speaker 2: Right, excuse excuse me, it's okay. 51 00:03:11,520 --> 00:03:14,079 Speaker 1: We a love gasping on the show at Heimen. I'm 52 00:03:14,120 --> 00:03:17,920 Speaker 1: gasping when it's okay, you know, just have some tang 53 00:03:17,960 --> 00:03:18,360 Speaker 1: and move on. 54 00:03:18,480 --> 00:03:20,920 Speaker 4: Paul, Hey, save us ed talk to us about the 55 00:03:21,000 --> 00:03:24,959 Speaker 4: labor market. I have been so amazed and surprised, pleasantly 56 00:03:24,960 --> 00:03:29,520 Speaker 4: so by the strength the resilience of the US labor market. 57 00:03:29,960 --> 00:03:32,760 Speaker 4: How do you put that into context with everything else 58 00:03:32,760 --> 00:03:33,560 Speaker 4: that's going on out there? 59 00:03:35,160 --> 00:03:38,200 Speaker 3: Economy is still pretty good. But I'm just I'm just 60 00:03:38,560 --> 00:03:40,960 Speaker 3: telling you what you just told me. It's pretty good 61 00:03:40,960 --> 00:03:42,680 Speaker 3: because the labor market is still pretty good. 62 00:03:42,760 --> 00:03:43,040 Speaker 1: YEP. 63 00:03:43,880 --> 00:03:46,160 Speaker 3: In about twenty five minutes, we'll get another reading for 64 00:03:46,240 --> 00:03:53,000 Speaker 3: unemplomba claims. But uneplomba claims are the government's best economic indicator, 65 00:03:53,520 --> 00:03:57,360 Speaker 3: and last week they fell below two hundred thousand and 66 00:03:57,480 --> 00:04:02,080 Speaker 3: was just incredible how low they are. And so until 67 00:04:02,280 --> 00:04:06,360 Speaker 3: the lever market eases up a little bit, the Fed 68 00:04:06,480 --> 00:04:09,000 Speaker 3: is going to be reluctant to cut rates. I think 69 00:04:09,040 --> 00:04:12,480 Speaker 3: they'd be happy to be pausing because inflation is coming down. 70 00:04:13,720 --> 00:04:16,360 Speaker 2: Now there are I thought you were going. 71 00:04:16,320 --> 00:04:20,000 Speaker 3: To say that you've been surprised at how much wages 72 00:04:20,040 --> 00:04:23,680 Speaker 3: have slowed given how strong labor markets are. But there 73 00:04:23,720 --> 00:04:26,880 Speaker 3: are some signs that the laver markets are easing up. 74 00:04:26,920 --> 00:04:31,240 Speaker 3: For example, the Basebook came out last week and like 75 00:04:31,320 --> 00:04:35,320 Speaker 3: some others, it showed some easing in the labor markets. 76 00:04:35,720 --> 00:04:41,400 Speaker 3: And we survey employment agencies every week like a Manpower Inc. 77 00:04:42,440 --> 00:04:47,600 Speaker 3: And they and they have reported a clear easing up 78 00:04:47,640 --> 00:04:53,239 Speaker 3: in the labor market and in wages, and a measured 79 00:04:53,279 --> 00:05:00,080 Speaker 3: by Indeed Lever Market company has showed a way h 80 00:05:00,240 --> 00:05:02,120 Speaker 3: tracker has come from five and a half down to 81 00:05:02,160 --> 00:05:04,760 Speaker 3: three and a half. There's a lot of signs that 82 00:05:04,839 --> 00:05:10,200 Speaker 3: labor has eased, but not enough. I'm not I guess 83 00:05:10,760 --> 00:05:13,720 Speaker 3: I guess I've been I'm not sure shocked, but I've 84 00:05:13,720 --> 00:05:17,080 Speaker 3: been surprised. But whatever it is, it's the key. You've 85 00:05:17,080 --> 00:05:20,120 Speaker 3: got to get labor to ease up. Some to get 86 00:05:20,120 --> 00:05:23,200 Speaker 3: the economy to slow down more than it has. If 87 00:05:23,200 --> 00:05:27,039 Speaker 3: you're plumbing, increases have slowed. From about five hundred thousand 88 00:05:27,080 --> 00:05:29,920 Speaker 3: a month, they were increasing five hundred thousand a month. 89 00:05:30,520 --> 00:05:33,160 Speaker 3: In the past three months they've been about one seventy. 90 00:05:33,800 --> 00:05:38,280 Speaker 3: So you know, it's like, you know, watching a frog. 91 00:05:38,400 --> 00:05:42,279 Speaker 2: Cook in a path. They don't notice it, but I 92 00:05:42,400 --> 00:05:42,840 Speaker 2: noticed it. 93 00:05:43,400 --> 00:05:49,640 Speaker 1: Wonderful. We're going to continue. We are commercial free. Don't 94 00:05:49,640 --> 00:05:53,080 Speaker 1: don't go away. We are commercial free across this entire hour. 95 00:05:53,400 --> 00:05:56,120 Speaker 1: Lukashaw to join us on the side of the economic 96 00:05:56,400 --> 00:05:59,640 Speaker 1: data here but on YouTube and on card play. We're 97 00:05:59,680 --> 00:06:02,880 Speaker 1: thrilled bring you Ed Hyman this morning, Paul Sweeney. 98 00:06:02,600 --> 00:06:05,400 Speaker 4: So, Ed, can we officially take I don't know, for 99 00:06:05,440 --> 00:06:07,279 Speaker 4: the remainder of twenty twenty four, can we take the 100 00:06:07,920 --> 00:06:11,080 Speaker 4: recession talk off the table? I've had enough of this. 101 00:06:11,200 --> 00:06:11,680 Speaker 4: How about you? 102 00:06:13,200 --> 00:06:17,000 Speaker 3: Well, I probably have been giving you a problem in this, 103 00:06:17,160 --> 00:06:21,080 Speaker 3: but I don't think so. I appreciate the question, and 104 00:06:21,480 --> 00:06:27,600 Speaker 3: let me give you my best shot. So, the yell 105 00:06:27,680 --> 00:06:30,400 Speaker 3: curve has worked seven times, six times in a row. 106 00:06:30,480 --> 00:06:33,080 Speaker 3: Every time you've had a recession, your curves been inverted. 107 00:06:33,120 --> 00:06:36,400 Speaker 3: So I'm just saying that we've had extreme monetary titan. 108 00:06:37,240 --> 00:06:41,440 Speaker 3: Now it's taken eighteen months for that to work, so 109 00:06:41,720 --> 00:06:45,240 Speaker 3: long that by the time you get to like month fourteen, 110 00:06:46,000 --> 00:06:48,120 Speaker 3: all you and I want to say is like, get 111 00:06:48,160 --> 00:06:50,159 Speaker 3: out of here. It's not going to happen. It's different 112 00:06:50,240 --> 00:06:55,479 Speaker 3: this time. But the Yell curve inverted, for example, in 113 00:06:55,600 --> 00:07:02,040 Speaker 3: the summurb of six, and the recession didn't start until 114 00:07:02,320 --> 00:07:05,839 Speaker 3: eight eighteen months later. So we still have another four 115 00:07:05,880 --> 00:07:09,440 Speaker 3: months and if we can stand it. But I guess 116 00:07:09,440 --> 00:07:11,720 Speaker 3: the main thing I'm trying to say from a practical 117 00:07:11,760 --> 00:07:14,480 Speaker 3: point of view is that I think the economy is 118 00:07:14,480 --> 00:07:15,640 Speaker 3: at a slowing pattern. 119 00:07:15,920 --> 00:07:20,640 Speaker 2: I mentioned the plummet increases slowing, and so I. 120 00:07:20,600 --> 00:07:25,480 Speaker 3: Could continue to be part of Tom's thought process. 121 00:07:25,760 --> 00:07:27,320 Speaker 2: Our company surveys have slowed. 122 00:07:27,840 --> 00:07:31,000 Speaker 3: They were we survey companies and zero to one hundred 123 00:07:31,040 --> 00:07:32,400 Speaker 3: and fifty is in the middle. 124 00:07:32,960 --> 00:07:38,040 Speaker 2: And the surveys two years ago were sixty one and 125 00:07:38,160 --> 00:07:39,520 Speaker 2: last week there were forty nine. 126 00:07:40,040 --> 00:07:43,320 Speaker 1: And I want to digress over to your wonderful page 127 00:07:43,320 --> 00:07:47,280 Speaker 1: and your research note on China and what ed Heymen does, folks, 128 00:07:47,320 --> 00:07:49,760 Speaker 1: and this is textbook at Hymen is he looks at 129 00:07:49,760 --> 00:07:52,360 Speaker 1: the equity market and all the media overwhelm of the 130 00:07:52,400 --> 00:07:55,280 Speaker 1: hangsing in, the indecks, the Hong Kong Index, and the 131 00:07:55,320 --> 00:07:58,560 Speaker 1: Shanghi composite, and you bring it right over ed hein 132 00:07:58,640 --> 00:08:01,800 Speaker 1: to the decline and interest rates in China. Are they 133 00:08:01,840 --> 00:08:04,600 Speaker 1: going to export a new low yield? Are they going 134 00:08:04,640 --> 00:08:08,560 Speaker 1: to export disinflation? Wow? In deflation to the United States? 135 00:08:09,640 --> 00:08:13,320 Speaker 2: Well, I was you got me there. I was going 136 00:08:13,360 --> 00:08:15,200 Speaker 2: in a different direction. But let me explain. 137 00:08:16,640 --> 00:08:19,760 Speaker 3: Their yields, like you point out, have been making new lows, 138 00:08:20,600 --> 00:08:24,200 Speaker 3: and that helps explain why US yields have been pretty quiet. 139 00:08:25,640 --> 00:08:29,440 Speaker 3: And also the weakness in China has helped explain why 140 00:08:29,480 --> 00:08:34,200 Speaker 3: commodity prices have been weak. And it's been pretty clear 141 00:08:34,240 --> 00:08:38,400 Speaker 3: to me that China has been exporting at least disinflation 142 00:08:38,920 --> 00:08:44,480 Speaker 3: or slower inflation and in some cases deflation. There's a 143 00:08:44,480 --> 00:08:47,680 Speaker 3: lot of news in the papers a day about lithium 144 00:08:47,720 --> 00:08:53,680 Speaker 3: prices which are down eighty percent, and so there's you're right, 145 00:08:53,760 --> 00:08:57,280 Speaker 3: they're exporting either disinflation or deflation. 146 00:08:58,040 --> 00:08:58,800 Speaker 2: But also. 147 00:09:00,080 --> 00:09:02,840 Speaker 3: You go back to the George Soros reflexivity, which is 148 00:09:02,880 --> 00:09:07,760 Speaker 3: that when something can't go on forever, it doesn't, And 149 00:09:08,000 --> 00:09:11,720 Speaker 3: there's a chance that we've reached that point in China 150 00:09:12,320 --> 00:09:16,400 Speaker 3: this week with their cut in the triple R and 151 00:09:16,520 --> 00:09:21,360 Speaker 3: so the stock market there has rallied almost ten percent. 152 00:09:22,440 --> 00:09:27,120 Speaker 3: And this morning the price of oil the WTI in 153 00:09:27,160 --> 00:09:30,520 Speaker 3: the US is up to about forty six dollars. It 154 00:09:30,640 --> 00:09:31,840 Speaker 3: was in the low forties. 155 00:09:34,400 --> 00:09:37,360 Speaker 4: So so anyway, so, Ed, I mean, you know, that 156 00:09:37,480 --> 00:09:38,720 Speaker 4: kind of brings up a good point. I want to 157 00:09:38,720 --> 00:09:42,480 Speaker 4: follow on Tom's question here. If we've got China slower 158 00:09:42,480 --> 00:09:45,720 Speaker 4: than people anticipated, if we've got Europe weaker than people 159 00:09:45,760 --> 00:09:47,920 Speaker 4: would like to see, particularly Germany, I mean, boy, you 160 00:09:47,960 --> 00:09:50,920 Speaker 4: see that the challenge is there, can the US be 161 00:09:51,040 --> 00:09:53,600 Speaker 4: that decoupled from the rest of the world in being 162 00:09:54,320 --> 00:09:56,599 Speaker 4: a growth marketplace when so much of the rest of 163 00:09:56,640 --> 00:09:59,360 Speaker 4: the world is, you know, if not in recession, darned 164 00:09:59,360 --> 00:09:59,880 Speaker 4: close to it. 165 00:10:01,559 --> 00:10:08,880 Speaker 3: No to Alan Greenspan, who enjoyed being inscrutable, but he 166 00:10:09,000 --> 00:10:14,200 Speaker 3: also coined some pretty good dogs, one of which in 167 00:10:14,280 --> 00:10:18,480 Speaker 3: the late nineties was that the US cannot be an 168 00:10:18,480 --> 00:10:22,840 Speaker 3: oasis of prosperity. And that's what we have now. I 169 00:10:22,840 --> 00:10:27,280 Speaker 3: think you're correctly pointing that out. And the data of 170 00:10:27,280 --> 00:10:31,320 Speaker 3: this morning out of Europe is week we also survey 171 00:10:31,400 --> 00:10:35,280 Speaker 3: companies that have sales week in Europe and that survey 172 00:10:35,360 --> 00:10:40,200 Speaker 3: is about thirty two. The US comparable survey is forty nine, 173 00:10:40,280 --> 00:10:44,800 Speaker 3: to put it in perspective. And then over in China, 174 00:10:45,280 --> 00:10:49,200 Speaker 3: our survey there is about thirty two, and so that 175 00:10:49,320 --> 00:10:51,000 Speaker 3: gives the world economy, you know. 176 00:10:50,960 --> 00:10:52,720 Speaker 2: A soft inclination. 177 00:10:53,160 --> 00:10:56,160 Speaker 3: But like I mentioned this morning, because I live up 178 00:10:56,240 --> 00:11:00,360 Speaker 3: right on the edge, the news out of China is 179 00:11:00,720 --> 00:11:01,559 Speaker 3: a little bit better. 180 00:11:03,440 --> 00:11:05,360 Speaker 2: I mentioned, all prices have bounced. 181 00:11:05,120 --> 00:11:08,080 Speaker 3: Up a little bit, and there's not market has bounced 182 00:11:08,120 --> 00:11:10,520 Speaker 3: up a little bit. So I can't tell if if 183 00:11:10,559 --> 00:11:13,920 Speaker 3: this triple R cut this week is the beginning of a. 184 00:11:13,920 --> 00:11:17,040 Speaker 2: Real serious effort. 185 00:11:17,440 --> 00:11:20,120 Speaker 3: They've had some false starts before, but it's a move 186 00:11:20,160 --> 00:11:22,440 Speaker 3: in the right direction and we'll see if it bears fruit. 187 00:11:22,600 --> 00:11:24,439 Speaker 1: And Man, I want you to talk about one of 188 00:11:24,440 --> 00:11:26,680 Speaker 1: the great fears you harken back the nineties, and I'd 189 00:11:26,720 --> 00:11:29,000 Speaker 1: even take it back to mister Isaacs in the eighties 190 00:11:29,040 --> 00:11:32,920 Speaker 1: as well. In the zeitgeist of American global Wall Street, 191 00:11:33,320 --> 00:11:37,920 Speaker 1: there is a real fear of our small banks linked 192 00:11:38,000 --> 00:11:42,400 Speaker 1: in to bad real estate loans. Is it a legitimate fear? 193 00:11:42,960 --> 00:11:45,600 Speaker 1: Is this something that we need to study or is 194 00:11:45,640 --> 00:11:46,280 Speaker 1: it noise? 195 00:11:48,720 --> 00:11:51,959 Speaker 2: It's not noise. So every week. 196 00:11:53,760 --> 00:11:57,320 Speaker 3: On Friday afternoon, I get the GUMMA data on bank 197 00:11:57,400 --> 00:12:02,200 Speaker 3: deposits and they are going down. They're down about two 198 00:12:02,280 --> 00:12:05,880 Speaker 3: or three percent, which is the biggest drop since the nineteen. 199 00:12:05,520 --> 00:12:08,760 Speaker 2: Thirties, which is a sobering point by itself. 200 00:12:09,640 --> 00:12:13,480 Speaker 3: So I guess back, the bank deposits are essentially the 201 00:12:13,520 --> 00:12:16,480 Speaker 3: money supply. It's eighty five percent of the money supply. 202 00:12:17,240 --> 00:12:21,640 Speaker 3: So it's if you've got to watch it. This is 203 00:12:21,679 --> 00:12:27,719 Speaker 3: my thirteenth bed tightening cycle, so I'm not this is 204 00:12:27,920 --> 00:12:33,520 Speaker 3: I'm a I'm a gnarl veteran of these cycles, and 205 00:12:34,880 --> 00:12:38,760 Speaker 3: right every single one of them has had financial shocks 206 00:12:38,840 --> 00:12:39,479 Speaker 3: or crises. 207 00:12:40,240 --> 00:12:43,320 Speaker 2: And so the one we had earlier this year, earlier 208 00:12:43,400 --> 00:12:44,079 Speaker 2: last year. 209 00:12:43,960 --> 00:12:48,920 Speaker 3: Excuse me, with SBB and the small banks having a 210 00:12:49,000 --> 00:12:53,679 Speaker 3: deposit running their deposits, that was a shock crisis. 211 00:12:55,120 --> 00:12:58,520 Speaker 2: And I think we're probably gonna get another one before 212 00:12:58,559 --> 00:12:59,120 Speaker 2: this is over. 213 00:13:00,200 --> 00:13:03,080 Speaker 1: And I got one last thought here before I let 214 00:13:03,160 --> 00:13:06,120 Speaker 1: you go, And this is a great respect for what folks. 215 00:13:06,200 --> 00:13:09,360 Speaker 1: I can't say enough. And I understand Sweeney and McKee 216 00:13:09,400 --> 00:13:11,160 Speaker 1: and Lisa are too young for this, but we used 217 00:13:11,200 --> 00:13:14,600 Speaker 1: to actually get printed research reports and you would wait 218 00:13:14,679 --> 00:13:17,840 Speaker 1: on Tuesday to get the CJ. Lawrence Green Book, and 219 00:13:17,880 --> 00:13:20,320 Speaker 1: it would come out. It was Edjimen, and then a 220 00:13:20,320 --> 00:13:23,240 Speaker 1: guy named Ed yard Denny picked it up. Edjimen, do 221 00:13:23,320 --> 00:13:27,800 Speaker 1: you have the yard Denny optimism? The corporations will adapt 222 00:13:28,280 --> 00:13:31,440 Speaker 1: that we will see a ten fifteen to twenty percent 223 00:13:31,600 --> 00:13:36,400 Speaker 1: lift in the Yard Denny duration of stock prosperity in 224 00:13:36,440 --> 00:13:40,720 Speaker 1: America getting out to what now forty thousand dow forty 225 00:13:40,760 --> 00:13:44,600 Speaker 1: five thousand. Do you share that optimism with the gentleman 226 00:13:44,600 --> 00:13:45,760 Speaker 1: from Yale University? 227 00:13:47,200 --> 00:13:51,880 Speaker 3: I don't, but I like Ed Yardini a lot, and 228 00:13:52,000 --> 00:13:58,320 Speaker 3: I follow his work, I follow his thanking, I respect him. 229 00:13:58,559 --> 00:14:00,840 Speaker 3: When I left CJLR he replaced me. 230 00:14:03,120 --> 00:14:07,600 Speaker 2: I'm happy. So you know, the world goes around, But. 231 00:14:09,400 --> 00:14:13,520 Speaker 3: I really do think about what he's thinking about, and 232 00:14:13,600 --> 00:14:16,080 Speaker 3: it goes back to, you know, some thoughts about the 233 00:14:16,200 --> 00:14:17,080 Speaker 3: nineteen thirties. 234 00:14:18,080 --> 00:14:21,680 Speaker 2: As I mentioned, I think monetary tightening. 235 00:14:21,480 --> 00:14:25,960 Speaker 3: Is extremely strong right now, monetary tightening, and that keeps 236 00:14:25,960 --> 00:14:26,440 Speaker 3: me away. 237 00:14:26,880 --> 00:14:27,560 Speaker 2: At the moment. 238 00:14:28,800 --> 00:14:32,920 Speaker 3: My view and our house view is that the market's 239 00:14:32,960 --> 00:14:37,040 Speaker 3: going up, and that's because inflation's coming down. 240 00:14:37,360 --> 00:14:40,920 Speaker 2: The fence ont pause, and economy is still fine. But 241 00:14:41,040 --> 00:14:42,720 Speaker 2: I would guess, and Paul, you. 242 00:14:42,680 --> 00:14:45,160 Speaker 3: Are needling me a little bit there on the recession 243 00:14:45,200 --> 00:14:47,760 Speaker 3: of the story, but I think the economy can get weaker, 244 00:14:48,080 --> 00:14:50,760 Speaker 3: arnies will go down, and then it'll be a fight 245 00:14:51,040 --> 00:14:54,840 Speaker 3: between declining earnings and the FED cutting interest rates. 246 00:14:55,400 --> 00:14:58,920 Speaker 1: Edheimen, thank you so much with Evercore. I can't say 247 00:14:59,000 --> 00:15:02,680 Speaker 1: enough about how he changed modern market economics. I put 248 00:15:02,760 --> 00:15:07,160 Speaker 1: him and Alan green Span together. They simply changed how 249 00:15:07,200 --> 00:15:10,160 Speaker 1: we digest the game day by day. And I'm in 250 00:15:10,640 --> 00:15:22,800 Speaker 1: thank you on YouTube on card Player, this is a 251 00:15:22,880 --> 00:15:25,560 Speaker 1: joy and Paul like, I gotta I just did this 252 00:15:25,640 --> 00:15:31,400 Speaker 1: on LinkedIn and Twitter, which is it's borderline entertainment about entertainment. 253 00:15:31,880 --> 00:15:35,640 Speaker 1: Lucas Shaw pulls out the typewriter Saturday evening, eight pm. 254 00:15:36,160 --> 00:15:37,920 Speaker 1: And you don't know this, but he's doing this at 255 00:15:37,920 --> 00:15:41,720 Speaker 1: the bar of the Sunset Tower Ill. I mean it's exclusive. 256 00:15:41,720 --> 00:15:44,120 Speaker 1: I've sat there with a number of fancy people. I 257 00:15:44,160 --> 00:15:47,040 Speaker 1: mean the owner, Jeff Klein, knows that Lucas Shaw is 258 00:15:47,080 --> 00:15:49,200 Speaker 1: a player. I love what Jeff Clein says about the 259 00:15:49,200 --> 00:15:51,960 Speaker 1: Sunset Tower Grill. He says it's where a duchess can 260 00:15:52,000 --> 00:15:55,600 Speaker 1: be a devil. A celebrity like Lucas Shaw can dine 261 00:15:55,600 --> 00:15:59,880 Speaker 1: with his family one night and this mistress the next 262 00:16:00,280 --> 00:16:03,560 Speaker 1: and that's the la that Lucas Shaw covers here. Have 263 00:16:03,640 --> 00:16:06,200 Speaker 1: you ever been in the Sunset grill with fancy people 264 00:16:06,520 --> 00:16:11,000 Speaker 1: having fancy drinks? I was there. What happens two weeks ago? Okay, 265 00:16:11,320 --> 00:16:13,160 Speaker 1: you didn't fall in the swimming pool, right. 266 00:16:13,160 --> 00:16:14,160 Speaker 5: I did not follow the simmer. 267 00:16:14,200 --> 00:16:19,400 Speaker 1: Okay, what happens now with Paul Sweeney and Lucashaw's Hollywood 268 00:16:19,480 --> 00:16:23,160 Speaker 1: blown up? What are the conversation at Jeff Klein's grill? 269 00:16:24,000 --> 00:16:27,280 Speaker 5: The conversation depending on what company you work for, but 270 00:16:27,440 --> 00:16:30,160 Speaker 5: at a lot of them, is will my company still 271 00:16:30,200 --> 00:16:33,400 Speaker 5: be around, or at least still be independent in six 272 00:16:33,440 --> 00:16:37,560 Speaker 5: to twelve months, I'd say so. You've got Paramount, which 273 00:16:37,600 --> 00:16:42,400 Speaker 5: has been the subject of near constant deal speculation for 274 00:16:42,480 --> 00:16:44,840 Speaker 5: several months, and it's now starting to feel pretty real. 275 00:16:45,200 --> 00:16:47,800 Speaker 5: You've got Warner Brothers Discovery, led by David Zaslev, who 276 00:16:47,840 --> 00:16:50,840 Speaker 5: seems like he realizes his company is still not big enough, 277 00:16:50,920 --> 00:16:53,200 Speaker 5: or feels his company still not big enough and wants 278 00:16:53,200 --> 00:16:55,720 Speaker 5: to merge with something else. You've got Comcast sitting on 279 00:16:55,760 --> 00:16:58,720 Speaker 5: the sidelines figuring if it wants to do something. You've 280 00:16:58,760 --> 00:17:01,480 Speaker 5: got Disney and Bob Eyer making cuts and also talking 281 00:17:01,520 --> 00:17:03,720 Speaker 5: about different deals. So there's a lot going on. 282 00:17:03,920 --> 00:17:05,920 Speaker 1: I got eight questions. They've got to resell those folks. 283 00:17:05,960 --> 00:17:09,240 Speaker 1: We're commercial free this entire hour. We go from Edward 284 00:17:09,320 --> 00:17:12,360 Speaker 1: Hyman and then step it up to Lucas Shaw. I mean, 285 00:17:12,359 --> 00:17:14,880 Speaker 1: it's pretty good here and we're on car play on 286 00:17:14,920 --> 00:17:19,000 Speaker 1: YouTube as well. Paul Swingey with fourteen questions for Lucashaw. 287 00:17:18,520 --> 00:17:21,560 Speaker 4: And Lucashaw covers all a media entertainment for Bloomberg News 288 00:17:21,600 --> 00:17:26,080 Speaker 4: out of our stylish LA office. I will mention Lucas. 289 00:17:26,160 --> 00:17:28,040 Speaker 4: Let's start with Paramount Global. We have to go to 290 00:17:28,080 --> 00:17:31,840 Speaker 4: Sherry Redstone, the daughter of one of the greatest media mobiles. 291 00:17:31,880 --> 00:17:34,880 Speaker 4: I think over the last fifty years, Sumner Redstone, she's 292 00:17:34,920 --> 00:17:37,960 Speaker 4: the controlled shareholder. What do you think she's thinking here? 293 00:17:38,280 --> 00:17:41,240 Speaker 4: Why would she consider now after all these years, maybe 294 00:17:41,280 --> 00:17:43,000 Speaker 4: thinking about selling the company. 295 00:17:43,080 --> 00:17:44,840 Speaker 5: I think there are two primary reasons. I mean, there's 296 00:17:44,880 --> 00:17:47,640 Speaker 5: been a lot of talk about Paramount over the years, 297 00:17:47,640 --> 00:17:51,159 Speaker 5: most of it not real. There weren't she did not 298 00:17:51,280 --> 00:17:54,000 Speaker 5: seem open to selling. But I think now she's looking 299 00:17:54,000 --> 00:17:57,720 Speaker 5: at her business and it is more challenged than it's 300 00:17:57,760 --> 00:18:01,000 Speaker 5: ever been, and it doesn't seem like there's an obvious 301 00:18:01,280 --> 00:18:04,080 Speaker 5: or even a particularly difficult solution. You know, they own 302 00:18:04,160 --> 00:18:06,760 Speaker 5: all these cable networks that are shrinking by the day. 303 00:18:06,880 --> 00:18:11,240 Speaker 5: Their streaming service is the sixth best, fifth, sixth best 304 00:18:11,240 --> 00:18:13,960 Speaker 5: streaming service, and it loses a bunch of money. So 305 00:18:14,040 --> 00:18:16,080 Speaker 5: that's one issue. You know, they've had to cut the 306 00:18:16,119 --> 00:18:18,600 Speaker 5: dividend that gets paid to the holding company of her family, 307 00:18:18,640 --> 00:18:21,080 Speaker 5: which is sort of like it's piggybank. The other one 308 00:18:21,080 --> 00:18:22,760 Speaker 5: that I've been told by people close to her was 309 00:18:22,800 --> 00:18:25,760 Speaker 5: that she was pretty seriously She's Jewish, and she was 310 00:18:26,359 --> 00:18:30,280 Speaker 5: very affected by what happened in October and is starting 311 00:18:30,320 --> 00:18:33,760 Speaker 5: to devote more of her time and attention to matters 312 00:18:33,760 --> 00:18:36,600 Speaker 5: related to that and education. And so you combine the 313 00:18:36,600 --> 00:18:39,880 Speaker 5: fact that the family empire is sort of crumbling and 314 00:18:40,000 --> 00:18:42,280 Speaker 5: she now has something else that she figured she could 315 00:18:42,280 --> 00:18:44,000 Speaker 5: spend her time and money on, and I think that 316 00:18:44,119 --> 00:18:46,679 Speaker 5: combination means that she's now ready to part with it. 317 00:18:46,920 --> 00:18:50,960 Speaker 4: Well, the reporting today David Ellison, the son of Larry 318 00:18:51,000 --> 00:18:54,040 Speaker 4: Elson of Oracle, Maybe he's considered what do we know 319 00:18:54,080 --> 00:18:57,719 Speaker 4: about David Ellison and how legit he might be as 320 00:18:57,800 --> 00:18:58,679 Speaker 4: a potential buyer. 321 00:18:58,920 --> 00:19:03,320 Speaker 5: Look, he is is very impressive. I will say he entered. 322 00:19:03,760 --> 00:19:07,080 Speaker 5: You had these two Elison kids, David Ellison and Megan Ellison, 323 00:19:07,240 --> 00:19:09,480 Speaker 5: enter Hollywood ten fifteen years ago, and I think a 324 00:19:09,520 --> 00:19:11,960 Speaker 5: lot of people looked at them with suspicion. You know, 325 00:19:12,000 --> 00:19:14,119 Speaker 5: you trust fund kids. Their dad's one of the richest 326 00:19:14,119 --> 00:19:15,480 Speaker 5: guys in the world. They just want to play with 327 00:19:15,560 --> 00:19:20,520 Speaker 5: daddy's money and make movies. Megan Ellison went one direction. 328 00:19:20,640 --> 00:19:23,800 Speaker 5: She made all these art house movies with high end directors. 329 00:19:24,359 --> 00:19:27,600 Speaker 5: The product creatively was great. Commercially it was a disaster. 330 00:19:28,160 --> 00:19:31,800 Speaker 5: David Ellison basically went in the opposite direction. He decided 331 00:19:31,840 --> 00:19:35,520 Speaker 5: he liked making big, blockbuster movies, and so he went 332 00:19:35,600 --> 00:19:38,200 Speaker 5: and had a deal with Paramount where he co financed, 333 00:19:38,240 --> 00:19:41,800 Speaker 5: co produced their biggest movies, Star Trek and Mission Impossible, 334 00:19:42,119 --> 00:19:46,119 Speaker 5: and has done pretty well and continues to expand his business. Now, 335 00:19:46,280 --> 00:19:47,960 Speaker 5: if he is he the person who's going to have 336 00:19:47,960 --> 00:19:50,520 Speaker 5: a solution for Paramount, that's hard for me to say, 337 00:19:50,520 --> 00:19:52,840 Speaker 5: because I'm not sure anyone does. But it would be 338 00:19:52,920 --> 00:19:55,520 Speaker 5: foolish to bet against him because he's proven to be 339 00:19:55,520 --> 00:19:57,480 Speaker 5: a pretty good operator in the last fifteen years. 340 00:19:57,680 --> 00:20:01,880 Speaker 1: Down Sunset Boulevard is my favorite leather chairs in America. 341 00:20:01,960 --> 00:20:05,280 Speaker 1: It's a Cuban Seed cigar company, which has literally been 342 00:20:05,320 --> 00:20:07,359 Speaker 1: there in the middle of World War Two. It's a 343 00:20:07,400 --> 00:20:11,000 Speaker 1: great story of families that rolls their own cigars. It's 344 00:20:11,040 --> 00:20:14,719 Speaker 1: just a glorious Glories family. Every time I sit there, Lucas, 345 00:20:14,720 --> 00:20:18,040 Speaker 1: somebody fancy walks in. So two guys are sitting there 346 00:20:18,080 --> 00:20:21,480 Speaker 1: right now, what are they saying about David Zavslov. We've 347 00:20:21,480 --> 00:20:24,920 Speaker 1: seen New York media right that this guy, after everything 348 00:20:24,960 --> 00:20:28,480 Speaker 1: with Warner Brothers Discovery, is still an outsider with a 349 00:20:28,520 --> 00:20:32,800 Speaker 1: stock performance. Is mister Zavslov ever more an outsider? 350 00:20:33,040 --> 00:20:35,160 Speaker 5: I have to start by asking what is your favorite 351 00:20:35,240 --> 00:20:36,399 Speaker 5: or preferred type of cigar? 352 00:20:36,840 --> 00:20:39,280 Speaker 1: Well, what I go for is not treated. I mean, 353 00:20:39,320 --> 00:20:41,000 Speaker 1: you know, like Lisa's trying to get me on the 354 00:20:41,040 --> 00:20:44,000 Speaker 1: fancy cherry oaked ones and all that. No, So my 355 00:20:44,160 --> 00:20:47,320 Speaker 1: favorite run of the mill cigar is a Padrona nineteen 356 00:20:47,440 --> 00:20:50,560 Speaker 1: sixty four. It's a little lighter than the nineteen twenty six. 357 00:20:51,040 --> 00:20:53,520 Speaker 1: So I go with that. But you're a Cuban Seed. 358 00:20:53,520 --> 00:20:56,359 Speaker 1: I mean, one day on their cy stalone walks in. 359 00:20:56,800 --> 00:20:59,280 Speaker 1: I mean, what is that about? You know I didn't say, 360 00:20:59,280 --> 00:21:01,760 Speaker 1: mister Stallone. You know, all that Lisa would have gone mental? 361 00:21:02,119 --> 00:21:05,000 Speaker 1: Is the Rock walked in there? Once? We were here yesterday. 362 00:21:05,320 --> 00:21:07,760 Speaker 1: Lisa's going nuts about the Rock. Let's rip up the 363 00:21:07,760 --> 00:21:10,800 Speaker 1: script right, Yes, how big is the Rock in LA 364 00:21:10,960 --> 00:21:12,879 Speaker 1: right now? With this deal with Netflix? 365 00:21:13,240 --> 00:21:15,360 Speaker 5: His deal with Endeavor? Or does he have a deal 366 00:21:15,359 --> 00:21:16,439 Speaker 5: with Netflix that I missed? 367 00:21:17,040 --> 00:21:18,359 Speaker 1: Help me here, Lisa. 368 00:21:18,480 --> 00:21:21,600 Speaker 6: He's now part of the board for TKO. 369 00:21:21,320 --> 00:21:25,119 Speaker 5: Yes, which is sorry affiliated with Endeavor. Yeah, he's one 370 00:21:25,160 --> 00:21:27,719 Speaker 5: of the Well, I'll do the Rock briefly and then 371 00:21:27,760 --> 00:21:29,720 Speaker 5: we can go to Zaslav. The Rock is one of 372 00:21:29,720 --> 00:21:34,119 Speaker 5: the biggest movie stars in the world. His dependability I 373 00:21:34,119 --> 00:21:36,159 Speaker 5: think in the last couple of years has actually been 374 00:21:36,200 --> 00:21:40,280 Speaker 5: a little shakier than it was before. But he's he's 375 00:21:40,320 --> 00:21:43,359 Speaker 5: a huge star, huge following, and then obviously because of 376 00:21:43,400 --> 00:21:45,800 Speaker 5: his his history with the WWB, joining the board at 377 00:21:45,800 --> 00:21:46,840 Speaker 5: TKO makes lots and. 378 00:21:47,119 --> 00:21:52,560 Speaker 1: Things X I do over there, there's a Kleenex full lease. Okay, 379 00:21:52,600 --> 00:21:54,720 Speaker 1: go to Zavizlov. Now this is serious. I mean he 380 00:21:54,760 --> 00:21:57,679 Speaker 1: was CNN and all that. Where does mister Zazlov fit 381 00:21:57,800 --> 00:21:59,520 Speaker 1: in for twenty twenty four? 382 00:21:59,680 --> 00:22:03,400 Speaker 5: Look, he's had his bumps as the CEO of that company. 383 00:22:03,480 --> 00:22:07,359 Speaker 5: A lot of them, I think have been about how 384 00:22:07,480 --> 00:22:12,359 Speaker 5: he's executed, and the selling of those strategies have just 385 00:22:12,840 --> 00:22:15,359 Speaker 5: they have pissed off a lot of people in Hollywood 386 00:22:15,480 --> 00:22:19,600 Speaker 5: because of the way that he's treated certain filmmakers and 387 00:22:19,640 --> 00:22:24,080 Speaker 5: certain ideas. But his company faces basically the same challenges 388 00:22:24,240 --> 00:22:27,359 Speaker 5: as Sherry Redstone in Paramount. They're just maybe twice as big. 389 00:22:28,880 --> 00:22:31,280 Speaker 5: And the two things that I do think they have 390 00:22:31,320 --> 00:22:34,720 Speaker 5: going for them are their TV studio is much larger 391 00:22:34,760 --> 00:22:36,919 Speaker 5: and more productive and so they can keep selling stuff, 392 00:22:37,040 --> 00:22:39,159 Speaker 5: and they have a streaming service that is better than 393 00:22:39,160 --> 00:22:39,840 Speaker 5: Paramount Plus. 394 00:22:40,119 --> 00:22:43,000 Speaker 1: Mike just emailed and I said, my headphones. Mike says, 395 00:22:43,040 --> 00:22:45,600 Speaker 1: forget the Hollywood talk to the market, So hold on, Lucas. 396 00:22:45,920 --> 00:22:48,600 Speaker 1: Paul Sweety's got a bunch of questions. Is Ira Jersey 397 00:22:48,640 --> 00:22:51,840 Speaker 1: told you the GDB price indext really something in yields 398 00:22:51,840 --> 00:22:54,400 Speaker 1: come in. Thank you Rich Truman for that to two 399 00:22:54,480 --> 00:22:56,880 Speaker 1: year yield in a solid two basis points ten You're 400 00:22:56,920 --> 00:22:59,040 Speaker 1: in a big, big three basis points. So there is 401 00:22:59,080 --> 00:23:01,399 Speaker 1: a yield move off the data, and you see it 402 00:23:01,400 --> 00:23:03,600 Speaker 1: in the equity markets with a lift here. We'll get 403 00:23:03,600 --> 00:23:05,960 Speaker 1: to the entertainment stocks in a moment, but it's it's 404 00:23:06,080 --> 00:23:10,159 Speaker 1: ugly on car play on YouTube. Lucas Shaw with this, 405 00:23:10,280 --> 00:23:12,200 Speaker 1: I can't say enough about screen time. Paul. 406 00:23:12,640 --> 00:23:16,120 Speaker 4: Hey, Lucas, you and your team, you're in Hollywood, you're 407 00:23:16,119 --> 00:23:18,480 Speaker 4: based in LA you really got your finger on the 408 00:23:18,480 --> 00:23:21,240 Speaker 4: pulse of what's happening in that town. I got to believe, 409 00:23:21,240 --> 00:23:24,200 Speaker 4: as you mentioned earlier, people got to be just really 410 00:23:24,240 --> 00:23:28,199 Speaker 4: scared about the future of their business. You know, as 411 00:23:28,240 --> 00:23:30,040 Speaker 4: an investor, I don't think I can invest in that 412 00:23:30,080 --> 00:23:31,879 Speaker 4: business right now. And I've been investing in media for 413 00:23:31,920 --> 00:23:33,840 Speaker 4: thirty five years. I can't do it right now because 414 00:23:33,840 --> 00:23:37,040 Speaker 4: I have no idea where the business is going. What's 415 00:23:37,080 --> 00:23:39,560 Speaker 4: the feeling in Los Angeles when you talk to the writers, 416 00:23:39,600 --> 00:23:42,600 Speaker 4: the directors, the people that are really involved in this business, 417 00:23:43,040 --> 00:23:44,919 Speaker 4: are they really scared about the future of media? 418 00:23:45,000 --> 00:23:46,760 Speaker 5: Well, I'd say the feelings are mixed, because you have 419 00:23:46,800 --> 00:23:49,280 Speaker 5: to remember that when you're talking about writers and actors 420 00:23:49,280 --> 00:23:51,480 Speaker 5: and directors, a lot of them spent twenty twenty three 421 00:23:51,600 --> 00:23:55,119 Speaker 5: out of work, right They were two prolonged labor stoppages. 422 00:23:55,119 --> 00:23:57,439 Speaker 5: The writers went on strike, followed by the actors, and 423 00:23:57,480 --> 00:24:01,439 Speaker 5: so I think some people entered this year are slightly 424 00:24:01,520 --> 00:24:04,520 Speaker 5: hopeful because they at least could get back to work now. 425 00:24:04,560 --> 00:24:07,920 Speaker 5: I think those paying attention to the macro story, to 426 00:24:08,000 --> 00:24:09,480 Speaker 5: kind of to what you said, are a little more 427 00:24:09,480 --> 00:24:14,400 Speaker 5: concerned because they're seeing almost every company, if not cutting back, 428 00:24:14,840 --> 00:24:17,000 Speaker 5: kind of leveling off to spend. And you have to, 429 00:24:17,080 --> 00:24:18,720 Speaker 5: you know, think about the fact that over the last 430 00:24:18,760 --> 00:24:21,760 Speaker 5: eight ten years, there's been this sort of unprecedented surge 431 00:24:21,840 --> 00:24:24,520 Speaker 5: in the amount of stuff being made. Yep, just you know, 432 00:24:24,520 --> 00:24:26,600 Speaker 5: the number of TV shows from like two hundred to 433 00:24:26,640 --> 00:24:29,360 Speaker 5: six hundred, and that's leveling off. I think people think 434 00:24:29,400 --> 00:24:32,280 Speaker 5: that's going to go down. This business is not collapsing, 435 00:24:32,320 --> 00:24:34,280 Speaker 5: you know, you talk about investing the you know, people 436 00:24:34,320 --> 00:24:36,399 Speaker 5: who've invested in Netflix have done pretty well over the 437 00:24:36,480 --> 00:24:39,000 Speaker 5: last couple of years, certainly over the last ten. But 438 00:24:39,160 --> 00:24:42,159 Speaker 5: what we don't know is which companies are going to 439 00:24:42,240 --> 00:24:45,560 Speaker 5: benefit or kind of survive the shakeout. And there's a 440 00:24:45,600 --> 00:24:47,600 Speaker 5: little bit of market distortion because you've got a couple 441 00:24:47,600 --> 00:24:50,359 Speaker 5: of players in Apple and Amazon who are who can 442 00:24:50,400 --> 00:24:52,840 Speaker 5: spend a lot of money without really worrying about how 443 00:24:52,880 --> 00:24:54,600 Speaker 5: profitable their entertainment businesses are. 444 00:24:54,720 --> 00:24:56,720 Speaker 4: That's true, That's that's really tough. How about our good 445 00:24:56,720 --> 00:24:59,240 Speaker 4: friends at Disney. That's one of the stories that I 446 00:24:59,240 --> 00:25:02,080 Speaker 4: think people have a lot of interest in Bob Iger 447 00:25:02,200 --> 00:25:06,400 Speaker 4: coming back. What's the call there on Disney there? What's 448 00:25:06,400 --> 00:25:09,639 Speaker 4: the feeling in Los Angeles about the future of this company, 449 00:25:09,640 --> 00:25:12,320 Speaker 4: maybe the future of Bob Byger and the management team there. 450 00:25:12,440 --> 00:25:15,880 Speaker 5: Well, Disney provokes a lot of uncertainty. 451 00:25:15,920 --> 00:25:16,119 Speaker 1: You know. 452 00:25:16,440 --> 00:25:18,560 Speaker 5: Iiger comes back and he had been one of the 453 00:25:18,600 --> 00:25:21,000 Speaker 5: great media CEO is really one of the great CEOs 454 00:25:21,200 --> 00:25:24,159 Speaker 5: of the twenty first century, and they thought that he 455 00:25:24,240 --> 00:25:27,119 Speaker 5: was going to study the company. Then he goes about 456 00:25:27,160 --> 00:25:29,800 Speaker 5: and fires a bunch of people and starts talking about 457 00:25:29,800 --> 00:25:31,639 Speaker 5: what he's going to sell, what he's not going to sell, 458 00:25:31,880 --> 00:25:35,520 Speaker 5: sort of almost seems to be flirting with potential suitors 459 00:25:35,600 --> 00:25:39,760 Speaker 5: through the press to figure out what's possible. But the 460 00:25:39,800 --> 00:25:43,280 Speaker 5: real problem for Iiger and Disney is that they had 461 00:25:43,280 --> 00:25:47,840 Speaker 5: been the most dependable studio in the town. You know, 462 00:25:47,880 --> 00:25:50,400 Speaker 5: their every movie they made seemed to become a big hit. 463 00:25:50,760 --> 00:25:53,240 Speaker 5: When they launched their streaming service, they did it perfectly 464 00:25:53,280 --> 00:25:56,200 Speaker 5: with The Mandalorian, the Right, Star Wars Show, and yet 465 00:25:56,320 --> 00:25:59,240 Speaker 5: all at the same time Lucasfilm which makes Star Wars, 466 00:25:59,240 --> 00:26:02,560 Speaker 5: Pixar Disney Animation, and the Disney Live Action movie seem 467 00:26:02,640 --> 00:26:04,760 Speaker 5: to have hit a wall. And it's hard to know 468 00:26:04,800 --> 00:26:06,440 Speaker 5: what to do about that, and it takes a few 469 00:26:06,520 --> 00:26:07,600 Speaker 5: years to turn it around. 470 00:26:07,880 --> 00:26:10,320 Speaker 1: I want to we got to be positive here, Lucas 471 00:26:10,840 --> 00:26:12,760 Speaker 1: and all swing and Lucas here. It's like the world's 472 00:26:12,760 --> 00:26:16,880 Speaker 1: coming doing at Hollywood. I showed Afterthought the other day 473 00:26:17,280 --> 00:26:20,879 Speaker 1: Greg Peck in twelve o'clock High, and it's just she 474 00:26:21,080 --> 00:26:24,280 Speaker 1: was she fell apart. I mean, come on, it's real 475 00:26:24,320 --> 00:26:29,359 Speaker 1: war footage nineteen fifties, Hank's and Spielberg. In two days, folks, 476 00:26:29,400 --> 00:26:35,200 Speaker 1: Apple TV, you're going to see Masters of the Air Lucas. 477 00:26:35,320 --> 00:26:38,480 Speaker 1: This is a bet by the old school on the 478 00:26:38,520 --> 00:26:41,680 Speaker 1: new technology through Apple TV and a ten year soap 479 00:26:41,720 --> 00:26:43,919 Speaker 1: opera of getting this thing made. I've been looking at 480 00:26:43,960 --> 00:26:47,000 Speaker 1: the British reviews, The Guardian, BBC in that which are 481 00:26:47,240 --> 00:26:51,479 Speaker 1: massively rave. What's the buzz on Screen Time about the 482 00:26:51,520 --> 00:26:54,240 Speaker 1: Hank Spielberg vehicle on World War Two? Why? 483 00:26:54,600 --> 00:26:58,680 Speaker 5: In general the buzz around Apple original programming is strong. 484 00:26:58,880 --> 00:27:02,679 Speaker 5: You know, they have come in and invested in really 485 00:27:02,800 --> 00:27:06,000 Speaker 5: high caliber filmmakers and movie stars to make their TV 486 00:27:06,080 --> 00:27:08,560 Speaker 5: shows pop and stand out. Because you have to remember, 487 00:27:08,600 --> 00:27:11,320 Speaker 5: there's nothing else to watch on Apple TV plus but 488 00:27:11,440 --> 00:27:15,760 Speaker 5: their original programming now not to go negative. The challenge 489 00:27:15,760 --> 00:27:19,600 Speaker 5: for Apple is that nobody watches their stuff outside of 490 00:27:19,600 --> 00:27:22,600 Speaker 5: like Lai York because the audio well, partially because they 491 00:27:22,600 --> 00:27:25,439 Speaker 5: don't have that library, and so it's harder for people 492 00:27:25,520 --> 00:27:28,160 Speaker 5: to People don't make it a habit of going into that. 493 00:27:28,040 --> 00:27:30,760 Speaker 1: Shy by paramount and put them out of their. 494 00:27:30,680 --> 00:27:34,280 Speaker 5: Misery because Apple doesn't like to do things like that. 495 00:27:34,320 --> 00:27:36,359 Speaker 5: They don't do big m and A. They don't seem 496 00:27:36,400 --> 00:27:39,400 Speaker 5: interested in a library. But the shows that they make 497 00:27:39,640 --> 00:27:42,320 Speaker 5: are really good. That's why you know. They just got 498 00:27:42,320 --> 00:27:45,200 Speaker 5: the I don't know, second third most Oscar nominations of 499 00:27:45,240 --> 00:27:48,400 Speaker 5: any studio, largely because of the Scarsesing movie, but also 500 00:27:48,400 --> 00:27:51,080 Speaker 5: the Ridley Scott movie. They've got a really impressive lineup 501 00:27:51,119 --> 00:27:53,160 Speaker 5: of movies coming out later this year. And the thing 502 00:27:53,160 --> 00:27:55,879 Speaker 5: to remember, I mean, all of these companies are still 503 00:27:55,880 --> 00:27:56,960 Speaker 5: making great products. 504 00:27:57,000 --> 00:27:58,760 Speaker 1: I'm going to bring this over to Paul Sweeney's world. 505 00:27:58,960 --> 00:28:00,800 Speaker 1: What did Masters the Year cost? 506 00:28:02,480 --> 00:28:04,800 Speaker 5: I haven't seen what the estimates are, but I would 507 00:28:04,840 --> 00:28:06,680 Speaker 5: imagine a heck of a lot of money. 508 00:28:07,040 --> 00:28:10,640 Speaker 1: A lot of money. See they just see right there? Well, 509 00:28:10,640 --> 00:28:12,920 Speaker 1: come on, it costs one hundred million dollars plus more. 510 00:28:12,960 --> 00:28:16,320 Speaker 1: Money than God finance for low rates. Spielberg and Hanks, Ye, 511 00:28:16,480 --> 00:28:18,600 Speaker 1: Paul Sweeney, they're doing that on what nine to ninety 512 00:28:18,680 --> 00:28:19,240 Speaker 1: nine a month? 513 00:28:19,359 --> 00:28:22,000 Speaker 4: Yeah, they got Apple's got ten million dollars a free 514 00:28:22,000 --> 00:28:24,880 Speaker 4: cash flow. So to Lucas's point, they can invest whatever 515 00:28:24,920 --> 00:28:27,520 Speaker 4: they want. Let's go to one of the really positive 516 00:28:27,520 --> 00:28:29,879 Speaker 4: stories coming out of Hollywood or just entertainment business, that 517 00:28:29,920 --> 00:28:34,960 Speaker 4: a being Netflix. They've obviously revolutionized the television business, disrupted 518 00:28:35,000 --> 00:28:38,840 Speaker 4: it like no other business. They said, forever and ever 519 00:28:38,880 --> 00:28:40,600 Speaker 4: and ever, We're not gonna do live events, We're not 520 00:28:40,640 --> 00:28:42,760 Speaker 4: gonna do sports. Who needs that kind of stuff? Then 521 00:28:42,800 --> 00:28:45,760 Speaker 4: they do this deal with WWE. Did that change the 522 00:28:45,880 --> 00:28:48,120 Speaker 4: minds in Hollywood? Are people kind of saying, hmm, maybe 523 00:28:48,160 --> 00:28:52,440 Speaker 4: there will consider live events, maybe make a move for 524 00:28:52,520 --> 00:28:53,840 Speaker 4: live sports, that kind of thing. 525 00:28:54,000 --> 00:28:57,960 Speaker 5: I did a poll of some top entertainment industry executives 526 00:28:57,960 --> 00:28:59,760 Speaker 5: at the end of last year, and I asked them 527 00:29:00,080 --> 00:29:02,720 Speaker 5: how many years they thought it would be before Netflix 528 00:29:02,760 --> 00:29:06,000 Speaker 5: got into live sports live events, And the first of all, 529 00:29:06,040 --> 00:29:08,520 Speaker 5: I'd say eighty to ninety percent of people said that 530 00:29:08,560 --> 00:29:11,160 Speaker 5: they would as opposed to never, And of those, most 531 00:29:11,200 --> 00:29:12,920 Speaker 5: people thought it would be in the next three years. 532 00:29:12,960 --> 00:29:16,120 Speaker 5: I think there was this. Netflix has said they wouldn't 533 00:29:16,160 --> 00:29:18,280 Speaker 5: do a lot of things. They said they wouldn't do advertising, 534 00:29:18,320 --> 00:29:21,560 Speaker 5: now they're doing advertising. They said they wouldn't abandon binge 535 00:29:21,640 --> 00:29:23,880 Speaker 5: viewing or binge releases, which they haven't, but they now 536 00:29:23,960 --> 00:29:27,200 Speaker 5: space out some of their seasons, drop them in two parts. 537 00:29:27,440 --> 00:29:31,400 Speaker 5: And so I think over time, Netflix has embraced certain 538 00:29:31,440 --> 00:29:34,200 Speaker 5: traditional behaviors because it turns out that you don't have 539 00:29:34,280 --> 00:29:37,600 Speaker 5: to reinvent everything in the playbook, and once you go 540 00:29:37,720 --> 00:29:40,640 Speaker 5: into an advertising supported service, having a live event that 541 00:29:40,680 --> 00:29:44,000 Speaker 5: can command a lot of years, like wrestling is good. 542 00:29:44,040 --> 00:29:46,480 Speaker 5: Now whether they're going to go in and bid a 543 00:29:46,520 --> 00:29:48,840 Speaker 5: couple billion dollars a year for NBA rights that I'm 544 00:29:48,840 --> 00:29:51,280 Speaker 5: still a little skeptical of, but I'm less skeptical of 545 00:29:51,320 --> 00:29:53,040 Speaker 5: it than I was before one minute. 546 00:29:53,320 --> 00:29:55,560 Speaker 1: Thank you so much for joining us. Off of Tokyo 547 00:29:55,600 --> 00:29:57,920 Speaker 1: and Sundance and the rest of it. The glory we's got, 548 00:29:57,920 --> 00:30:00,040 Speaker 1: the rock star life of it was Lucas Shaw. It 549 00:30:00,160 --> 00:30:04,000 Speaker 1: was screen time, the death of the Los Angeles times. 550 00:30:04,400 --> 00:30:04,840 Speaker 1: I get. 551 00:30:05,200 --> 00:30:06,320 Speaker 5: I wasn't sure where you're going. 552 00:30:06,480 --> 00:30:09,720 Speaker 1: Yeah, nobody ever knows, Lucas Lisa never knows where I'm going. 553 00:30:10,120 --> 00:30:13,440 Speaker 1: I mean, come on, I grew up where the Los 554 00:30:13,480 --> 00:30:16,680 Speaker 1: Angeles Times mattered times. Is it dying? 555 00:30:17,200 --> 00:30:19,240 Speaker 5: Look, my dad worked there for almost forty years. It's 556 00:30:19,280 --> 00:30:23,760 Speaker 5: one of the saddest things I could see. I don't 557 00:30:23,800 --> 00:30:27,360 Speaker 5: know that it's dying, but it's in really, really, really 558 00:30:27,400 --> 00:30:28,400 Speaker 5: really bad shape. 559 00:30:28,440 --> 00:30:28,640 Speaker 7: You know. 560 00:30:28,720 --> 00:30:31,120 Speaker 5: It was one of these newspapers that got bought by 561 00:30:31,160 --> 00:30:34,120 Speaker 5: a billionaire who seemed to want to do the right thing, 562 00:30:35,520 --> 00:30:38,680 Speaker 5: and his and his daughter had certain ideas about it, 563 00:30:38,720 --> 00:30:42,600 Speaker 5: but they've just never figured out what the editorial and 564 00:30:42,680 --> 00:30:45,840 Speaker 5: business strategy is to make it a sustainable paper, which 565 00:30:45,840 --> 00:30:49,240 Speaker 5: is insane to me because it's the it's the only 566 00:30:49,320 --> 00:30:51,800 Speaker 5: real newspaper in the second biggest city in the country. 567 00:30:51,920 --> 00:30:54,880 Speaker 5: It's becoming kind of the only real newspaper in California, 568 00:30:54,960 --> 00:30:58,080 Speaker 5: which is home so many people. And you'd think you 569 00:30:58,120 --> 00:31:01,360 Speaker 5: could figure it out, and I'd it baffles me. 570 00:31:01,600 --> 00:31:04,280 Speaker 1: This is great. Lucas and I Paul, you can join 571 00:31:04,360 --> 00:31:06,920 Speaker 1: us here. We can bring Lisa as well, you know, 572 00:31:06,960 --> 00:31:09,320 Speaker 1: I mean, I just I can see us at the 573 00:31:09,360 --> 00:31:12,360 Speaker 1: Sunset grill where the Dutchess can be a devil and 574 00:31:12,440 --> 00:31:15,120 Speaker 1: a celebrity like Lucas Shack and dine with his family 575 00:31:15,160 --> 00:31:19,040 Speaker 1: one night and his mistress the next. Lisa, this is inappropriate. 576 00:31:19,200 --> 00:31:21,440 Speaker 1: That's why Lucas Shaw's here exactly. Thank you so much 577 00:31:21,440 --> 00:31:24,400 Speaker 1: with screen time. I put it out on Twitter and LinkedIn. 578 00:31:24,480 --> 00:31:27,600 Speaker 1: Can't say enough. This guy works on all the entertainment 579 00:31:28,200 --> 00:31:34,840 Speaker 1: that we consume. Joining us now in the train wreck 580 00:31:35,120 --> 00:31:39,360 Speaker 1: is Garrett Nelson, CFIA Research, senior equity analyst, Garrett, help 581 00:31:39,440 --> 00:31:44,720 Speaker 1: me here on Tesla? How bad was the conference call? 582 00:31:44,840 --> 00:31:47,880 Speaker 7: Well, our point is that this is a stock that 583 00:31:48,040 --> 00:31:50,520 Speaker 7: more than doubled last year, so we think what you're 584 00:31:50,600 --> 00:31:54,680 Speaker 7: seeing in terms of this profit taking is healthy price action. 585 00:31:54,960 --> 00:31:57,440 Speaker 7: We didn't think the call was that bad. We think 586 00:31:57,480 --> 00:32:02,280 Speaker 7: the stock is selling off because investors are alarmed about 587 00:32:02,320 --> 00:32:07,400 Speaker 7: the guidance for slowing auto shipment growth in twenty twenty four, 588 00:32:07,480 --> 00:32:10,560 Speaker 7: but that was already baked into everyone's estimates, so it 589 00:32:10,600 --> 00:32:12,680 Speaker 7: was understood that they were not going to continue to 590 00:32:12,680 --> 00:32:15,560 Speaker 7: grow their auto deliveries by thirty eight percent this year 591 00:32:15,600 --> 00:32:16,680 Speaker 7: like they did last year. 592 00:32:17,000 --> 00:32:19,680 Speaker 1: Is only there are people only buying Tesla's the cliche 593 00:32:19,760 --> 00:32:21,440 Speaker 1: out there, and we go to Lisa Matteo on this 594 00:32:21,440 --> 00:32:25,320 Speaker 1: because she's like EV Queen. But the basic idea I 595 00:32:25,320 --> 00:32:28,880 Speaker 1: have is EV's are a failure in America except Tesla, 596 00:32:29,360 --> 00:32:31,200 Speaker 1: and so the units are pretty good because that's the 597 00:32:31,200 --> 00:32:33,200 Speaker 1: only car people are buying. Is that right? 598 00:32:34,920 --> 00:32:38,240 Speaker 7: That's pretty much accurate. If you look, Tesla's market share 599 00:32:38,240 --> 00:32:41,200 Speaker 7: in the US was fifty five percent of the of 600 00:32:41,240 --> 00:32:45,440 Speaker 7: the US EV market last year. Where the real oversaturation 601 00:32:45,680 --> 00:32:48,120 Speaker 7: is is the other forty five percent. All the non 602 00:32:48,160 --> 00:32:51,480 Speaker 7: Tesla evs are just not selling well. They're sitting on 603 00:32:51,560 --> 00:32:55,600 Speaker 7: dealer lots. Inventories in December were one hundred and seventeen 604 00:32:55,720 --> 00:33:00,560 Speaker 7: days supply for EV's overall, which is way above the 605 00:33:00,680 --> 00:33:04,440 Speaker 7: historic average for automobiles of sixty days. So there's a 606 00:33:04,560 --> 00:33:06,960 Speaker 7: huge inventory glut of non Tesla evs. 607 00:33:07,520 --> 00:33:10,120 Speaker 4: So, Garrett, if I'm a bull, if I have a 608 00:33:10,160 --> 00:33:13,000 Speaker 4: buy rating and I think it's a fifty pe is 609 00:33:13,280 --> 00:33:16,440 Speaker 4: based upon my target, I have to be bullish about 610 00:33:16,480 --> 00:33:19,680 Speaker 4: EV's in general, don't I. It's not just a Tesla call. 611 00:33:19,720 --> 00:33:22,800 Speaker 4: I have to be a bull on EV's in North America, 612 00:33:22,840 --> 00:33:23,160 Speaker 4: don't I? 613 00:33:25,240 --> 00:33:29,240 Speaker 7: Not necessarily you have to be bullish, I think on Tesla. 614 00:33:29,320 --> 00:33:33,479 Speaker 7: We're actually fairly bullish on the EV fairly bearish on 615 00:33:33,520 --> 00:33:37,560 Speaker 7: the EV market overall in terms of adoption rates are 616 00:33:37,640 --> 00:33:40,360 Speaker 7: much slower than we thought we would see a few 617 00:33:40,440 --> 00:33:43,640 Speaker 7: years ago. If you look, seven point six percent of 618 00:33:43,680 --> 00:33:46,440 Speaker 7: all new vehicle sales last year, we're eves. We think 619 00:33:46,480 --> 00:33:49,160 Speaker 7: a lot of automakers were hoping that those percentages would 620 00:33:49,160 --> 00:33:52,800 Speaker 7: be above ten percent at that point. So, but there's 621 00:33:52,800 --> 00:33:56,160 Speaker 7: no question there's a lot of demand for Tesla EV's. 622 00:33:56,480 --> 00:33:59,440 Speaker 7: We know the cyber truck reservation count is somewhere north 623 00:33:59,480 --> 00:34:02,040 Speaker 7: of two million units, far and away the highest of 624 00:34:02,080 --> 00:34:06,040 Speaker 7: any vehicle model in the US. And then last night 625 00:34:06,040 --> 00:34:09,600 Speaker 7: they confirmed these rumors of this next gen mass market 626 00:34:09,640 --> 00:34:13,000 Speaker 7: EV where first production could come as soon as mid 627 00:34:13,400 --> 00:34:13,959 Speaker 7: next year. 628 00:34:14,760 --> 00:34:17,960 Speaker 4: So, I mean, Garrett, I just bought a new car, 629 00:34:18,239 --> 00:34:20,400 Speaker 4: and I did at the car, I was looking at 630 00:34:20,400 --> 00:34:22,120 Speaker 4: the automobile I was looking at. I did look at 631 00:34:22,120 --> 00:34:25,399 Speaker 4: the EV version, But the premium to go EV over 632 00:34:25,480 --> 00:34:28,759 Speaker 4: ICE was so big, and me I could care less 633 00:34:28,760 --> 00:34:31,399 Speaker 4: about EV's in the environment. I'll do it another way. 634 00:34:32,480 --> 00:34:34,359 Speaker 4: But I mean, what do you do here? I mean, 635 00:34:34,440 --> 00:34:37,480 Speaker 4: do you have to bring the price down? Don't you? 636 00:34:37,640 --> 00:34:40,200 Speaker 4: Is that even viable for this industry over the next 637 00:34:40,239 --> 00:34:40,840 Speaker 4: several years. 638 00:34:42,400 --> 00:34:44,600 Speaker 7: So if you look over the last year, the price 639 00:34:44,680 --> 00:34:47,280 Speaker 7: has come down. You look at the EV price premium. 640 00:34:47,440 --> 00:34:51,400 Speaker 7: In December it was only four percent. A year earlier 641 00:34:51,640 --> 00:34:54,120 Speaker 7: was over thirty percent. So twenty twenty three was a 642 00:34:54,200 --> 00:34:57,920 Speaker 7: year in which the EV price premium really collapsed. And 643 00:34:57,960 --> 00:35:02,440 Speaker 7: we think that we're getting near an inflection point where 644 00:35:02,440 --> 00:35:05,239 Speaker 7: evs are are gonna well, they're already very close to 645 00:35:05,320 --> 00:35:08,839 Speaker 7: price parody with internal combustion engine vehicles, and that's gonna 646 00:35:08,840 --> 00:35:10,960 Speaker 7: be a big positive. That's going to stimulate demand. 647 00:35:11,160 --> 00:35:13,600 Speaker 1: Garrett, Let's talk about mister Musk, and I do this 648 00:35:13,640 --> 00:35:17,040 Speaker 1: with great respect, folks, for his technological innovation and all 649 00:35:17,120 --> 00:35:19,960 Speaker 1: that he's done. You know, forget about the notoriety and 650 00:35:20,000 --> 00:35:24,920 Speaker 1: all the idiocy. Garrett, Is he devoting chairman or CEO 651 00:35:25,280 --> 00:35:26,400 Speaker 1: energy to Tesla? 652 00:35:26,640 --> 00:35:27,200 Speaker 5: Good question? 653 00:35:29,080 --> 00:35:31,640 Speaker 7: Yeah, that's a good question. There's nearly good in the day, 654 00:35:31,640 --> 00:35:32,640 Speaker 7: So go with it, Garrett. 655 00:35:32,680 --> 00:35:34,560 Speaker 1: That's it. He has all the good ones. 656 00:35:35,280 --> 00:35:39,120 Speaker 7: He's spread very thin across SpaceX, Tesla and all his 657 00:35:39,239 --> 00:35:43,680 Speaker 7: other businesses now X formerly Twitter, So there's no question 658 00:35:43,760 --> 00:35:47,680 Speaker 7: he's spread thin. But what's become clear if you look back, 659 00:35:47,920 --> 00:35:50,120 Speaker 7: you know, the investor days over the last two or 660 00:35:50,120 --> 00:35:54,439 Speaker 7: three years, there's a very deep bench at Tesla. While 661 00:35:54,480 --> 00:35:56,600 Speaker 7: he is the face of the company, the face of 662 00:35:56,680 --> 00:36:01,439 Speaker 7: the brand. Behind him is a very strong capable team 663 00:36:02,160 --> 00:36:03,600 Speaker 7: of brilliant engineers. 664 00:36:03,760 --> 00:36:08,200 Speaker 1: Bloomber Business Flash. This is from our European travel correspondent, 665 00:36:08,320 --> 00:36:12,400 Speaker 1: Charles Pellett Europe on five dollars a day Paris. Garrett 666 00:36:12,400 --> 00:36:16,319 Speaker 1: Nelson bans big, ugly American cars and they lead with 667 00:36:16,400 --> 00:36:19,319 Speaker 1: a cyber truck. How's the cyber truck doing? Besides I'm 668 00:36:19,320 --> 00:36:21,400 Speaker 1: not going to see it on Rudolphine in Paris. 669 00:36:23,840 --> 00:36:27,480 Speaker 7: Well, the Tesla faces a high class problem with the 670 00:36:27,480 --> 00:36:30,440 Speaker 7: cyber truck. We know the reservation count is off the charts. 671 00:36:31,239 --> 00:36:34,439 Speaker 7: The problem with this is the manufacturing methods are much 672 00:36:34,440 --> 00:36:36,839 Speaker 7: more difficult than the Model Y or the Model three. 673 00:36:37,480 --> 00:36:41,440 Speaker 7: So and Musk himself has admitted this. It's going to 674 00:36:41,520 --> 00:36:44,640 Speaker 7: be very difficult to ramp production of the cyber truck. 675 00:36:44,680 --> 00:36:47,120 Speaker 7: It's not going to look anything like the ramp up 676 00:36:47,239 --> 00:36:49,120 Speaker 7: of the Model three or the Model Y that we've 677 00:36:49,120 --> 00:36:52,240 Speaker 7: seen in the past years. So, you know, the challenge 678 00:36:52,239 --> 00:36:54,319 Speaker 7: for them is really how quickly can they ramp up 679 00:36:54,640 --> 00:36:57,680 Speaker 7: and get that vehicle in the hands of reservation holders. 680 00:36:58,480 --> 00:37:02,600 Speaker 4: So Garrett I looked at the Ford. I actually drove 681 00:37:02,680 --> 00:37:05,400 Speaker 4: the Ford F one fifty Lightning, which is an awesome vehicle, 682 00:37:06,360 --> 00:37:08,560 Speaker 4: but I was actually surprised at Ford cut back the 683 00:37:08,600 --> 00:37:11,440 Speaker 4: production there. So what does that tell you about the 684 00:37:11,440 --> 00:37:14,040 Speaker 4: EV space or is that a Ford specific issue? 685 00:37:15,160 --> 00:37:15,359 Speaker 6: Yeah? 686 00:37:15,400 --> 00:37:18,799 Speaker 7: We think again that goes back to the issue with 687 00:37:18,920 --> 00:37:22,160 Speaker 7: non Tesla EV's. The demand just isn't there, and so 688 00:37:22,239 --> 00:37:26,080 Speaker 7: you're seeing automakers, you're seeing GM Ford and others start 689 00:37:26,120 --> 00:37:30,120 Speaker 7: to cut back on those models in favor of gas 690 00:37:30,160 --> 00:37:32,520 Speaker 7: powered models which are selling much better. In Ford's case, 691 00:37:33,040 --> 00:37:33,520 Speaker 7: the Bronco. 692 00:37:34,120 --> 00:37:35,880 Speaker 1: Oh, I gotta leave it there, Garrett Nelson, Thanks for 693 00:37:35,920 --> 00:37:49,400 Speaker 1: the brief there in Tesla Worring is good for Rabobank. 694 00:37:49,480 --> 00:37:52,200 Speaker 1: Let's get right to it. Jane Foley joins us at 695 00:37:52,320 --> 00:37:58,000 Speaker 1: robobank in London. When is this quiet? Jane? The shop 696 00:37:58,080 --> 00:38:04,000 Speaker 1: does well right because people are hedging commercial transactions. You're 697 00:38:04,080 --> 00:38:06,440 Speaker 1: taking in a fee. I mean it must be glorious 698 00:38:06,480 --> 00:38:08,840 Speaker 1: now that foreign exchange is so boring. 699 00:38:09,680 --> 00:38:12,799 Speaker 6: Well not necessarily, I mean I've met clients before. He said, oh, 700 00:38:12,840 --> 00:38:14,799 Speaker 6: you know what, we didn't bother hedge in last year 701 00:38:14,880 --> 00:38:18,439 Speaker 6: because the phoney change was flat, and now this year 702 00:38:18,880 --> 00:38:22,280 Speaker 6: we wish we had because it's really eaten into our profits. 703 00:38:22,320 --> 00:38:24,560 Speaker 6: And sometimes they come to us when the door is 704 00:38:24,600 --> 00:38:27,520 Speaker 6: already you know, the horse has already bolted. But so 705 00:38:27,640 --> 00:38:29,600 Speaker 6: not necessarily good. But you know, I would say that 706 00:38:29,600 --> 00:38:32,560 Speaker 6: there's still lots to be considering in the foreign exchange. Well, 707 00:38:32,640 --> 00:38:34,440 Speaker 6: we've seen the euro move a little bit this afternoon 708 00:38:34,440 --> 00:38:36,840 Speaker 6: on the back of the Laguard press conference, and of 709 00:38:36,880 --> 00:38:39,399 Speaker 6: course this week we've seen the yen moving too, as 710 00:38:39,400 --> 00:38:41,560 Speaker 6: the market begins to get a bit more excited about 711 00:38:41,560 --> 00:38:45,719 Speaker 6: an earlier possible interest rate hike. Well maybe soon as much. 712 00:38:45,840 --> 00:38:47,640 Speaker 1: Let me go there, so we're gonna make some money, folks. 713 00:38:47,640 --> 00:38:49,640 Speaker 1: For those of you global wall streets that don't look 714 00:38:49,640 --> 00:38:53,000 Speaker 1: at euro yen, Euro yen is my litmus paper a week. 715 00:38:53,080 --> 00:38:56,320 Speaker 1: Yen is a bigger number one fifty five, one sixty 716 00:38:56,360 --> 00:38:59,200 Speaker 1: hit one sixty one last week. What is the tension 717 00:38:59,320 --> 00:39:02,919 Speaker 1: for the institution two shoes of Japan with euro yen ever, 718 00:39:03,040 --> 00:39:04,799 Speaker 1: weaker yen stronger Euro. 719 00:39:05,719 --> 00:39:08,000 Speaker 6: Well, again, it depends who you are in Japan. So 720 00:39:08,120 --> 00:39:11,239 Speaker 6: you know the big exporters, the toyotas, etc. Of this world, Well, 721 00:39:11,239 --> 00:39:13,600 Speaker 6: they tend to do pretty well when the yen is 722 00:39:14,080 --> 00:39:16,680 Speaker 6: pretty weak, you know, and then they see demands picking up, 723 00:39:16,680 --> 00:39:19,480 Speaker 6: and that's pretty good for them because even if inflation 724 00:39:20,760 --> 00:39:24,279 Speaker 6: is high in Japan and has been relatively high in 725 00:39:24,280 --> 00:39:26,400 Speaker 6: the last couple of years, they can just export that 726 00:39:26,480 --> 00:39:29,959 Speaker 6: through their pric scenes. But it's the domestic companies who, 727 00:39:30,200 --> 00:39:32,920 Speaker 6: or at least the companies with the domestic audience, domestic 728 00:39:33,040 --> 00:39:35,719 Speaker 6: consumer facing consumer. They're the ones that in the last 729 00:39:35,760 --> 00:39:38,160 Speaker 6: couple of years who've been a little bit uncomfortable because 730 00:39:38,160 --> 00:39:40,480 Speaker 6: they've seen, you know, higher commodity prices, which of course 731 00:39:40,520 --> 00:39:43,600 Speaker 6: have calm off those peaks right now, but they cannot 732 00:39:43,800 --> 00:39:46,319 Speaker 6: or they find it much more difficult to pass on 733 00:39:46,840 --> 00:39:51,560 Speaker 6: the pricing into a country where people have to until 734 00:39:51,640 --> 00:39:55,279 Speaker 6: very recently been reluctant to accept that prices ever go up. 735 00:39:55,960 --> 00:39:59,080 Speaker 4: Hey, Jane, we did hear from the European Central Bank today, 736 00:39:59,120 --> 00:40:02,480 Speaker 4: Christine the guards standing by comments on a quote likely 737 00:40:03,120 --> 00:40:06,319 Speaker 4: summer rate cut. How does that kind of inform your 738 00:40:06,400 --> 00:40:08,640 Speaker 4: view of some of the European currencies. 739 00:40:09,520 --> 00:40:11,719 Speaker 6: You know that that that speech when she talked about 740 00:40:11,719 --> 00:40:14,279 Speaker 6: the likely summer rake cut was made last week to 741 00:40:15,040 --> 00:40:18,279 Speaker 6: you know, one of your colleagues in Davos, and I 742 00:40:18,320 --> 00:40:20,520 Speaker 6: think there was a little bit of you know, the headlines, 743 00:40:20,760 --> 00:40:22,680 Speaker 6: you know, take away some of the context of that. 744 00:40:22,800 --> 00:40:24,719 Speaker 6: I don't think you know, she was saying, yes, we 745 00:40:24,840 --> 00:40:26,879 Speaker 6: you know, we'll be cutting into interest rates in June. 746 00:40:26,920 --> 00:40:28,799 Speaker 6: I just think she was being a little bit more 747 00:40:28,880 --> 00:40:33,120 Speaker 6: vague really about that, about that timing. But you know, 748 00:40:33,360 --> 00:40:37,279 Speaker 6: I think what's interesting today, particularly from today's comments, at 749 00:40:37,360 --> 00:40:39,480 Speaker 6: least in the market reaction, because the market reaction has 750 00:40:39,520 --> 00:40:41,600 Speaker 6: seen this has been fairly darvas. And I think the 751 00:40:41,600 --> 00:40:45,239 Speaker 6: reason for that is that there wasn't a forceful pushback 752 00:40:45,640 --> 00:40:48,879 Speaker 6: against market pricing, and market pricing, as we know it has 753 00:40:48,880 --> 00:40:51,040 Speaker 6: been pricing in you know, a couple of interest rate 754 00:40:51,080 --> 00:40:54,239 Speaker 6: cuts to say in a six month few many economists 755 00:40:54,680 --> 00:40:56,960 Speaker 6: are more doubtful of that. But if she could have 756 00:40:57,040 --> 00:40:59,879 Speaker 6: used that opportunity to push back on that, and she didn't, 757 00:41:00,200 --> 00:41:01,680 Speaker 6: and I think therefore the market thought, well, you know, 758 00:41:01,760 --> 00:41:05,240 Speaker 6: she's not pushing back on us, maybe maybe the UCB 759 00:41:05,360 --> 00:41:07,120 Speaker 6: could go, could go earlier. So I think that's been 760 00:41:07,160 --> 00:41:10,160 Speaker 6: the takeaway today. But what she did say is that 761 00:41:10,160 --> 00:41:13,920 Speaker 6: they are data focused and I don't think any decision 762 00:41:13,960 --> 00:41:15,200 Speaker 6: yet has been made by them. 763 00:41:15,880 --> 00:41:18,400 Speaker 4: Jane the British pound sterling here, you've got a no 764 00:41:18,480 --> 00:41:21,920 Speaker 4: doubt saying hey, politics matter here and the debt of 765 00:41:22,040 --> 00:41:24,160 Speaker 4: the UK Matters talked to us about kind of your 766 00:41:24,239 --> 00:41:25,320 Speaker 4: views on the pound Sterling. 767 00:41:26,120 --> 00:41:28,560 Speaker 6: Well, you know, this comes on the back of some 768 00:41:28,680 --> 00:41:30,560 Speaker 6: data we had earlier in the week that said actually, 769 00:41:30,800 --> 00:41:35,120 Speaker 6: in December public financing figures were better than expected, which 770 00:41:35,160 --> 00:41:38,480 Speaker 6: they were. And because that feeds into Jeremy Hunt, the Chancellor, 771 00:41:38,480 --> 00:41:40,200 Speaker 6: who's already indicated in fact he was at to have 772 00:41:40,280 --> 00:41:44,480 Speaker 6: us last week saying this that he will be cutting taxes. Now, 773 00:41:44,680 --> 00:41:48,279 Speaker 6: obviously that is designed to help the Tory parties into 774 00:41:48,280 --> 00:41:50,919 Speaker 6: the election which is expected at the end of the year. 775 00:41:51,520 --> 00:41:54,200 Speaker 6: But the toy Party are so far behind Labor, you know, 776 00:41:54,200 --> 00:41:57,240 Speaker 6: good twenty points or so behind Labor, that it probably 777 00:41:57,239 --> 00:42:00,480 Speaker 6: won't make too much difference. But the the issue with 778 00:42:00,560 --> 00:42:03,520 Speaker 6: the fiscal situation, and we had you know, another thing 779 00:42:03,600 --> 00:42:06,720 Speaker 6: teach this morning saying that the new government, whoever wins election, 780 00:42:07,400 --> 00:42:10,680 Speaker 6: will be faced the worst fiscal position that a new 781 00:42:10,680 --> 00:42:14,160 Speaker 6: government has taken in seventy years. And that I think 782 00:42:14,239 --> 00:42:16,879 Speaker 6: is quite interesting because you recall a couple of years 783 00:42:16,920 --> 00:42:20,840 Speaker 6: ago we had the Liz trus Fiesco. The market basically 784 00:42:20,840 --> 00:42:24,240 Speaker 6: said no, you know, we're not going to tolerate unfunded spending. 785 00:42:24,600 --> 00:42:28,480 Speaker 6: And with that memory, I think whoever takes over the 786 00:42:28,560 --> 00:42:34,160 Speaker 6: chancellorship after this election, you know we'll have to take 787 00:42:34,280 --> 00:42:37,680 Speaker 6: upon fiscal discipline, which actually might mean that from the markets, 788 00:42:37,719 --> 00:42:38,800 Speaker 6: this is a boring election. 789 00:42:39,160 --> 00:42:42,040 Speaker 1: Jane. Thank you. Jane Fowley with an FX update. I've 790 00:42:42,040 --> 00:42:44,320 Speaker 1: been remiss and not doing enough on foreign exchange. You 791 00:42:44,400 --> 00:42:46,400 Speaker 1: will promise to do more of that. This is the 792 00:42:46,400 --> 00:42:51,400 Speaker 1: Bloomberg Surveillance Podcast, bringing you the best in economics, finance, investment, 793 00:42:51,600 --> 00:42:55,200 Speaker 1: and international relations. You can also watch the show live 794 00:42:55,440 --> 00:43:00,520 Speaker 1: on YouTube. Visit the Bloomberg Podcast channel on YouTube. The 795 00:43:00,600 --> 00:43:04,120 Speaker 1: show weekday mornings from seven to ten am Eastern from 796 00:43:04,120 --> 00:43:07,560 Speaker 1: our global headquarters in New York City. Subscribe to the 797 00:43:07,600 --> 00:43:11,520 Speaker 1: podcast on Apple, Spotify, or anywhere else you listen and 798 00:43:11,680 --> 00:43:15,719 Speaker 1: always on Bloomberg Radio, the Bloomberg Terminal, and the Bloomberg 799 00:43:15,960 --> 00:43:16,680 Speaker 1: Business App.