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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along

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Speaker 2: with Paul Sweeney. Join us each day for insight from

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Speaker 2: the Bloomberg Terminal, and the Bloomberg Business app.

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Speaker 3: Brook Sutherland she is a Bloomberg Opinion the Colm. She

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Speaker 3: covers the industrials for Bloomberg Opinion. So, Brooke, this feels

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Speaker 3: like really big news for our friends at boeen What

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Speaker 3: does it mean to you when you see such a

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Speaker 3: management shape pick up here for Boeing?

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Speaker 4: It's definitely big news. I mean, I would say perhaps

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Speaker 4: overdue big news, but it's important that they're making the

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Speaker 4: change now, and it signals that I think they're giving

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Speaker 4: the message that this needs to be deeper rooted cultural

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Speaker 4: change at Boeing and really get to the bottom of

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Speaker 4: what's been driving these manufacturing glitches, a series of problems

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Speaker 4: that have been plaguing the Commercial Airplanes division. And to

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Speaker 4: see them make it change not just at the top,

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Speaker 4: but also at the head of the commercial Airplane division

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Speaker 4: signals that they're really trying to do an overhaul here

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Speaker 4: and it's about time, but they're doing it now.

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Speaker 3: So Brooke, is there a feeling again this story here,

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Speaker 3: this quality story has we're now several months into this year,

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Speaker 3: with a little bit of hindsight, do we have any

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Speaker 3: sense to what changed over the last maybe six to

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Speaker 3: twelve months of this company versus the last, oh, I

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Speaker 3: don't know, fifty years.

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Speaker 4: I mean, I do think it's been notable the public

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Speaker 4: criticism that's been coming out of their airline customers. I mean,

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Speaker 4: certainly there was a lot of that in the wake

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Speaker 4: of the seven thirty seven Max crashes in the grounding

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Speaker 4: of that airplane, but not to the degree that we

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Speaker 4: have seen in the wake of these recent quality control issues.

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Speaker 4: And I think it's just been striking the level of

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Speaker 4: criticism that we've seen directed at Boeing ME and its

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Speaker 4: management team. And there were reports late last week that

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Speaker 4: those airlines customers that actually asked for a meeting with

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Speaker 4: the Bowing Board directly without CEO Dave Calhoun, and I

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Speaker 4: think that that was an important Sigma R.

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Speaker 2: How do you color a finance person with three decades

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Speaker 2: of experienced Stephanie Pope coming in but critically to me,

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Speaker 2: the key announcement Brooke is Steve Malinkoff of Qualcom with

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Speaker 2: an electrical engineering background Virginia Tech. You know he's steeped

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Speaker 2: in the engineering processes that are discussed here. What will

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Speaker 2: he do? What's not day one for Steve Malincamp as

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Speaker 2: the new chairman, but what the tone that he has

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Speaker 2: to shift?

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Speaker 4: I think, I mean job number one is figuring out

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Speaker 4: who you hire to be the ultimate CEO, and I

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Speaker 4: think it has to be somebody with, you know, an

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Speaker 4: engineer's mindset towards manufacturing, and you really need somebody who's

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Speaker 4: going to drill into every single process and root out

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Speaker 4: defects and just improve the way that Boeing works. And

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Speaker 4: I don't think this is a situation where you bring in,

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Speaker 4: you know, a complete outsider CEO from the auto industry

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Speaker 4: or healthcare or whatever it might be. It needs to

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Speaker 4: be somebody who really knows manufacturing and frankly, you need

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Speaker 4: somebody like Larry Colp a GE. But I don't know, Okay,

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Speaker 4: he would want to.

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Speaker 2: Take it, Okay, Loving and Paul, And I mean, it's

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Speaker 2: teasing Brook here because I got to go to Kansas here.

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Speaker 2: This job was built for Alan Malally, Kansas Aeronautics. Brooke

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Speaker 2: knows this that Lawrence called Alan Malally or the kind

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Speaker 2: of engineering process guys that this job begs for.

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Speaker 3: So Brooke, is there a sense that Boeing can to

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Speaker 3: lack of a better word, fix their weakness. Is their

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Speaker 3: deficiencies in the manufacturing process within any reasonable amount of time?

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Speaker 3: Or is this kind of a I don't know, a

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Speaker 3: multi quarter, maybe multi year kind of thing. Do we

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Speaker 3: have any sense as to the magnitude?

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Speaker 4: I mean, I think it probably does take a while.

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Speaker 4: I mean, and I just I always go back to

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Speaker 4: gees an example, just because you know, it's a company

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Speaker 4: close to my heart, but also there's a lot of

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Speaker 4: similarities between these two companies and their cultures. Be given

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Speaker 4: that a lot of former GE executives we're in the

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Speaker 4: top ranks of management at GOING and I think, you know,

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Speaker 4: to really drill down into every single detail of the

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Speaker 4: manufacturing process, and to do it right does take time,

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Speaker 4: and you need to completely rewire how you work and

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Speaker 4: train the staff there. It's a cultural shift. You need

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Speaker 4: to teach people to feel comfortable, to feel transparent about

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Speaker 4: pointing out defects, you know, before you have a situation

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Speaker 4: like a mid air blowout on Alaska Airlines, and that

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Speaker 4: does take time. It's not just a switch that you

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Speaker 4: can flip. It's not a switch that gets slipped just

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Speaker 4: by the CEO stepping right when.

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Speaker 2: You write your phone and page book on this book,

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Speaker 2: I know the movie writes have already been sold. Did

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Speaker 2: the pandemic cause this was there a pandemic breakdown as

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Speaker 2: with other manufacturing companies because of the illness, people in,

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Speaker 2: people out whatever. You've alluded to this before. Is there

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Speaker 2: a big asterisk next to all this? It's not Calhoun's fault.

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Speaker 2: It was a pandemic's fault.

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Speaker 4: No. I mean, I think the pandemic is exacerbated things.

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Speaker 4: But I mean the seven thirty seven Max crisis happened

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Speaker 4: before the pandemic, and I think that, you know, if

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Speaker 4: you want to talk about cultural issues that a bowling,

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Speaker 4: you've got to go back, I mean almost to the

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Speaker 4: late nineteen nineties and the merger with McDonald douglas. But

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Speaker 4: also you know the Partnering for Success program where they

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Speaker 4: squeezed margins out of their suppliers. And I mean, I

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Speaker 4: think this is sort of a long running cultural issue

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Speaker 4: at Boeing, But I do think, you know, COVID certainly

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Speaker 4: took its toll, and probably more so on the supply

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Speaker 4: chain who already had their profit margins squeeze to then

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Speaker 4: have to go through the volatility of the pandemic and the.

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Speaker 2: Lay Julie Johnson extra Chicago Tribune giving us great leadership

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Speaker 2: out of Sicago here on aviation Brook Sutherland did Julie

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Speaker 2: Johnson's heritage here? Did this company never make the leap

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Speaker 2: from Seattle to Chicago?

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Speaker 4: I think that, you know, it certainly didn't help to

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Speaker 4: have management not be in the same vicinity as the

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Speaker 4: manufacturing factory. And they since even moved the factory again

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Speaker 4: to Arlington, Virginia, or so I moved the headquarters again

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Speaker 4: to Arlington, Virginia, which is even further away from Seattle,

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Speaker 4: which I don't think was the right message to send

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Speaker 4: or the right mindset to have when you know your

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Speaker 4: bread and butter is this Commercial Airplanes Division. That's that's

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Speaker 4: having manufacturing.

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Speaker 2: I think the brook Sutherland book here is up to

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Speaker 2: five hundred pages. I mean, I'm here, we got We've

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Speaker 2: got brooks got a schedule. We got to leave her now,

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Speaker 2: brook Sutherland, thank you so much from Boston. Joining us

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Speaker 2: today are in our true expertise on America's manufacturing process.

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Speaker 2: One of the great truisms of Bloomberg Surveillance. Paul and

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Speaker 2: I will steal from anyone we can, and we do

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Speaker 2: that all the time. And right now with liz Anne Saunders,

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Speaker 2: Chief Investment Strategies that Charles Schwab. It's an over our

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Speaker 2: conversation one b rid Holts Berry Rid Holts Masters in

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Speaker 2: Business with liz Anne Saunders, and all I got to say, folks,

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Speaker 2: if you want to know where you need to be

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Speaker 2: in the market, just trust me get incredible perspective that

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Speaker 2: only Barry red Holts can bring to it. Miss Saunders

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Speaker 2: and Liz aenne Berry had one question which I just

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Speaker 2: thought was ALLEGI it was just brilliant tears on it.

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Speaker 2: Oh my god, this is a question I would never ask.

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Speaker 2: So I'm stealing from rid Holts Liz enne And it's

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Speaker 2: simple you've been at Schwab forever. You and I saw

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Speaker 2: what Schwab invented. He's older, he's moving on. But the

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Speaker 2: answer Schwab continues with core values. What are those core

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Speaker 2: values that have kept you at Schwab all these years?

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Speaker 5: Well, we have it, as I guess, for lack of

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Speaker 5: a better word, our tagline, but it's what we live

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Speaker 5: breathe every day, which is through client size and having

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Speaker 5: almost nine trillion dollars essentially all individual investors. What is

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Speaker 5: important to them is quite different from what is important,

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Speaker 5: say to an institutional community. So we always think of

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Speaker 5: everything we do from the perspective of the individual investor.

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Speaker 2: Did the individual investors show exuberance right now?

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Speaker 5: A little bit yes, I'd say. The sentiment data more broadly,

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Speaker 5: is I guess, on the frauthier end of the spectrum. Certainly,

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Speaker 5: attitudinal measures of sentiment, maybe a little bit less so

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Speaker 5: behavioral measures of sentiment. I think it's important to understand

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Speaker 5: which indicators fall in which bucket, and it's almost necessity

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Speaker 5: for it to be a contrarian indicator to see it

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Speaker 5: in both categories, which were not quite seeing it in

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Speaker 5: both of those. But it's on the frauthier end of

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Speaker 5: the spectrum. The most important thing I would say, though,

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Speaker 5: is sentiment, not that anything's a good market timing indicator.

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Speaker 5: Sentiment is a terrible market timing indicator. We can get

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Speaker 5: fraughthy sentiment and it can stay there for years, as

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Speaker 5: we all learned in the late nineteen nineties. So it's

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Speaker 5: more of a backdrop.

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Speaker 3: Luzcyne. We had a bunch of central banks speaking and

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Speaker 3: issuing announcements last week, and let's start with the Federal Reserve.

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Speaker 3: Probably came out a little bit less hawkish. I guess

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Speaker 3: this is a right way to frame it than maybe

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Speaker 3: investors were discount of going into it. What did you

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Speaker 3: take away?

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Speaker 5: So it was definitely on the more dubbish end of

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Speaker 5: the spectrum, particularly as it relates to the dots and

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Speaker 5: the expectation heading into the meeting that we might see

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Speaker 5: one of the three rate cuts come out of expectations

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Speaker 5: per the dots. But I think what's more important is

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Speaker 5: Powell continuing to push back on the notion that the

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Speaker 5: dots represent some sort of policy path. They don't. They

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Speaker 5: never have, and certainly in an environment where the FED

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Speaker 5: is data dependent and not on any kind of preset. Course,

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Speaker 5: if the data changes, I think their perspective and things

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Speaker 5: like probabilities in terms of the FED fund's future market

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Speaker 5: could change. So at that moment in time it was

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Speaker 5: slightly more dubbish. But the combination of their dual mandates

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Speaker 5: I think has to continue to behave or in the

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Speaker 5: case of inflation, actually roll back over and start moving

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Speaker 5: down again for rate cuts to start as soon as

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Speaker 5: the June FOMAC meeting.

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Speaker 3: So given that backdrop, litt lezande of you have you

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Speaker 3: guys altered kind of your allocation here? Stocks, bonds, maybe alternatives?

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Speaker 3: What's the Schwab call these days? Maybe how has it

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Speaker 3: changed over the last several months.

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Speaker 5: So we don't play the short term sort of tactical

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Speaker 5: asset allocation game by saying, you know, abobveer blow low

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Speaker 5: or percentages, because again, almost nine trillion dollars of client assets.

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Speaker 5: What might be right for you know, some twenty five

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Speaker 5: year old aggressive investor that inherited ten million dollars from

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Speaker 5: the grandparents and doesn't need the money, versus say, a

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Speaker 5: you know, seventy five year old who is retired and

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Speaker 5: needs to earn income on an est egg that they

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Speaker 5: can't afford to lose any component of so two different, entirely,

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Speaker 5: two different messages there. What we have continued to do, though,

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Speaker 5: is focus on factors, even a little bit more than sectors,

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Speaker 5: and we still think you want to stay up in quality.

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Speaker 5: A momentum has been a dominant factor. But what's interesting

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Speaker 5: is that's more of a concept than a factor. Momentum

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Speaker 5: says thank you. It just says these shocks that have

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Speaker 5: been working, continue to work. What you can do though,

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Speaker 5: because a lot of comparisons are being made to the

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Speaker 5: late nineties, Uh oh, momentum as a factor is doing

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Speaker 5: well right now, that's the same thing happened in the nineties.

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Speaker 5: But the actual fundamental factor that was most highly correlated

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Speaker 5: to momentum in the late nineties was negative earnings. The

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Speaker 5: factor right now most positively correlated to momentum is are

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Speaker 5: factors like high return on equity, strong free cash low

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Speaker 5: and a negative correlation right now is negative earning. So

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Speaker 5: momentum is just a concept. But you then have to

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Speaker 5: look at what are the fundamentals of the types of

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Speaker 5: stocks that continue to do well, And I think that's

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Speaker 5: an important differentiation, But in essence, it's high quality. Other

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Speaker 5: factors that are dominating in terms of momentum, and that

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Speaker 5: is what we say you want to stick with right now,

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Speaker 5: stay up in quality. This is not the time to

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Speaker 5: go down the quality spectrum.

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Speaker 2: What you just heard there, folks, as far as I'm concerned,

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Speaker 2: is gospel. I don't even know where to go with this,

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Speaker 2: this momentum stuff, Lezan. I'm aging listening to the certitude

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Speaker 2: of young turks telling me momentum is a Steve Ross

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Speaker 2: factor concept. You say quality matters. Are we going to

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Speaker 2: get earnings to deliver Q one, Q two, Q three

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Speaker 2: to develop that cash flow of quality.

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Speaker 5: I think earnings estimates on a forward looking basis maybe

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Speaker 5: have some legitimacy, but probably only out a quarter or two.

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Speaker 5: What we've seen in this sort of pandemic era not

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Speaker 5: as extreme as the case a couple of years ago,

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Speaker 5: when you had a record percentage of companies that just

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Speaker 5: withdrew guidens altogether. So estimates just became a total, you know,

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Speaker 5: dart throw because companies were saying, we have no idea,

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Speaker 5: We're not going to try to guide. I think a

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Speaker 5: lot of companies are using the environment as an excuse

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Speaker 5: not to go back to the kind of precise quarter

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Speaker 5: league guidance. What that's left analysts to do is go

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Speaker 5: into earning season, where lately they've been setting the bar

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Speaker 5: too low, listening to what companies are saying, maybe make

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Speaker 5: adjustments out a quarter or two, but then sort of leave,

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Speaker 5: you know, three quarters, four quarters the following calendar year

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Speaker 5: aside until they get more concrete information. So I think

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Speaker 5: there's probably some validity to first half estimates. I'm not

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Speaker 5: sure how much is based in reality on later out stimates.

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Speaker 2: This is brilliant Lizzie in too short a visit, Thank

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Speaker 2: you so much, Lizzie Sanders a Charles Schwab there on

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Speaker 2: factors and maybe an overwrought comment on momentum, joining us

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Speaker 2: now with leadership, on courage to stay in the market,

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Speaker 2: and with an upgrade on his earnings in S and P.

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Speaker 2: Call John Stulfus from Oppenheimer Today in the fearedom of

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Speaker 2: two Octobers ago, the affeared moment of an October ago,

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Speaker 2: John Stulfus, how did you not go to cash?

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Speaker 6: Simple reason is Tom that when when we looked at things,

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Speaker 6: we looked at the the overall friends, and we thought

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Speaker 6: that the calls that were essentially a bearish pitch book

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Speaker 6: were just not accurate. They were based on near term trading.

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Speaker 6: When we saw what the situation was in terms of

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Speaker 6: the corporate resilience, the the the consumers stance, and where

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Speaker 6: FENN was being effectively very much sensitive to applying its

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Speaker 6: mandate to inflation that was at untoward levels, we couldn't

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Speaker 6: help but think we rather stay in the market rather

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Speaker 6: than try to time the market. Recognizing the time in

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Speaker 6: the market historically has shown to be a good way

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Speaker 6: to get better returns over the intermediate to longer term.

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Speaker 3: So the Bloomberg reporting of your call here this morning,

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Speaker 3: John Oppenheimer Asset mentioned list s and P five hundred

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Speaker 3: target to Wall Street high of fifty five hundred. What's

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Speaker 3: driving that? Is that earning's driven?

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Speaker 4: Is that?

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Speaker 6: But it's certainly it's a mix of both that it

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Speaker 6: certainly is earning's driven. If you consider third quarter and

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Speaker 6: fourth quarter s and P five hundred earnings really surprised

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Speaker 6: very nicely to the upside. In addition, if you look

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Speaker 6: at a d P and you reflect on Fed policy,

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Speaker 6: the Fed has been remarkable with eleven hikes and what

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Speaker 6: is it six pauses or skips as they call them now,

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Speaker 6: has not pushed the economy into a recession. And then

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Speaker 6: beyond that, the fact that what we believe is that

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Speaker 6: it's interesting. You just had George ball on and you

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Speaker 6: all spoke about investors and retirement and things like that.

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Speaker 6: At one point, it's it's today two generations and more

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Speaker 6: than that, the younger ones that follow the millennials, with

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Speaker 6: the millennials and the boomers recognize the fact that social

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Speaker 6: security is likely not to be what it once was

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Speaker 6: as a core to retirement for prior generations over the decades,

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Speaker 6: and in addition to that, the recognition that they will

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Speaker 6: likely live longer, and so whether preparing for retirement or retirement,

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Speaker 6: there's a need for equities. Equities historically, again, you know,

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Speaker 6: with past performance no guarantee of future results, as we

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Speaker 6: always say, but equities tend to be a better place

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Speaker 6: for intermediate to long term investing and diversification in Paul's

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Speaker 6: and our view.

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Speaker 2: I mean, Paul's living this representative John, you and I

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Speaker 2: have to work every day. Sweeney could have retired fourteen

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Speaker 2: years ago. But the bottom line here, Paul Sweeney is

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Speaker 2: when was the last time bonds made a return?

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Speaker 6: Yeah?

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Speaker 2: And I mean I'm talking you're back five years, seven

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Speaker 2: years or whatever.

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Speaker 3: That I mean. John, It's interesting. It's you know, Thomas

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Speaker 3: is mentioning you think about the fixed income space just

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Speaker 3: got crushed in twenty twenty two, and thanks to miraculous

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Speaker 3: November December, they eked out some games last year. But

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Speaker 3: in the equity markets, I guess the question for a

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Speaker 3: lot of folks is where do I go here? Do

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Speaker 3: I follow the Magnificent seven or five or whatever they

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Speaker 3: are today, or do I try to find some value

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Speaker 3: in other parts of the market. Where are you at

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Speaker 3: this part of the stage?

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Speaker 6: Great question, Paul. We think you have to mix and match,

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Speaker 6: which really means diversification, and by that we mean we

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Speaker 6: emphasize cyclicals over defensives, but still want some defensive in

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Speaker 6: there for the higher yielding dividends. Growthier value for companies

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Speaker 6: that grow their dividends and still want growth because the

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Speaker 6: innovation points to the very clear fact that much more

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Speaker 6: sophisticated technology that we have today versus where the where

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Speaker 6: we were when the tech bubble happened, And being forty

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Speaker 6: years of this business, I can well remember the tech bubble,

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Speaker 6: which is not that long ago. This is an environment

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Speaker 6: where technology keeps morphing, and it can very well help

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Speaker 6: all the sectors, including both itself technology and communication services,

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Speaker 6: which is over fifty percent about sixty to seventy percent technology,

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Speaker 6: but all the others help companies become more efficient, help

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Speaker 6: consumers be more efficient in the relationship business as well

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Speaker 6: as each other.

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Speaker 2: I mean the question here in a broader question, folks,

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Speaker 2: and I'm showing my age. We're talking to. George Ball

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Speaker 2: was iconic, and so is John st John Stulfus was

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Speaker 2: in Tykondergus Securities. I remember that the romance Securities. And

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Speaker 2: what I really remember John Stulfis is a guy named

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Speaker 2: Myron Pico who was at OpCo and literally taught me

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Speaker 2: individual line item for accounting statements securities analysis. I mean,

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Speaker 2: Myron like own the high ground. Can we get as

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Speaker 2: I said to mister Ball, can we get back to

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Speaker 2: where people actually are riveted by individual security ownership? Or

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Speaker 2: is that just the time gone by?

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Speaker 6: I think? I think, if anything, ironically, et apps bring

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Speaker 6: them back to the thought of the need for diversification

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Speaker 6: and approach. We like alpha beta for example, so alpha

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Speaker 6: would be individual security selection or individual stock selection. Looking

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Speaker 6: for alpha piics in combination with a strategically allocated and

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Speaker 6: tactically weighted ETFs that track passive indices, and that way,

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Speaker 6: if you're in the right church but in the wrong pew,

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Speaker 6: you're okay. Or if you're in the wrong church but

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Speaker 6: at the right pew, you can also be okay. It

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Speaker 6: gives you more opportunity, we think via diversification of approach

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Speaker 6: to the markets, and we think people want to be

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Speaker 6: that thoughtful, and we think the financial media calls for

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Speaker 6: that many ways because most of the day spent highlighting

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Speaker 6: individual stocks and not ETFs. But the benchmarks are looked

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Speaker 6: at certain for certain but alpha beta. We think you

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Speaker 6: don't have to be a kid to have to know

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Speaker 6: your alphabet.

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Speaker 2: What would like to say from five thousand to fifty

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Speaker 2: two hundred, John Sulphus lifting up here on earnings, and

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Speaker 2: you wonder where he'll be six months out or eight

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Speaker 2: months out. John Stulfus, folks, I'm just simple as I can.

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Speaker 2: I said, this is Gina Martin Adams. You got to

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Speaker 2: be in the market. You can't time it, you can't

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Speaker 2: go to cash, You'll never make it. I've lived it.

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Speaker 2: John Stulphus, with a courage to be in the market.

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Speaker 2: He is with OpCo.

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Speaker 3: You're doing a look at.

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Speaker 2: The front pages around the world at LISTA.

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Speaker 3: I missed this.

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Speaker 2: I was reading I was reading Lemonne as Jitan in

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Speaker 2: a beret.

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Speaker 1: I'm in a cafe.

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Speaker 2: Okay, I'm reading Lamant English. I'm sorry, I'm not reading

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Speaker 2: Laman French. And I'm thinking all the newspapers were to

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Speaker 2: have out of France. What do you got today?

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Speaker 7: All right, this is the big debate in the housing

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Speaker 7: market because you remember the National Association of Realtors that

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Speaker 7: class action settlement. Well you had President Biden who said

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Speaker 7: the deal could save home buyers sellers as much as

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Speaker 7: ten thousand dollars. But experts are saying that the true

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Speaker 7: benefits they're really not clear, especially those first.

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Speaker 1: Time buyers who need help the most.

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Speaker 7: So this is that back and forth kind of a

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Speaker 7: discussion being going on right now.

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Speaker 2: It was amazing, Paul to see the government support of

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Speaker 2: housing in France versus the mess we have here. All

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Speaker 2: the houses look the same. I mean, it's scary, how

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Speaker 2: it's just you know, there's one contractor one look, miles

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Speaker 2: of mos took to train up to Rue. The whole

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Speaker 2: thing is build out houses supported by the government. They

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Speaker 2: do it exactly opposite of the chaos we have.

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Speaker 3: But then okay, so we are going to get some savings,

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Speaker 3: but we're just not sure how much it went.

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Speaker 1: That's the thing.

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Speaker 7: Yeah, because they're saying, oh, it could be up to

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Speaker 7: ten thousand dollars, but experts saying, you know what, no, nope, nope,

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Speaker 7: they're saying the NAAR actually says real estate agent commissions

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Speaker 7: are driven by the market and are not the cause

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Speaker 7: of the affordability crisis. So that's like kind of the

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Speaker 7: back and forth there. All right, So we also have

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Speaker 7: the AI boom, right, everybody's talking about AI, but there

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Speaker 7: is a Caribbean.

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Speaker 1: Island who is making millions of dollars.

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Speaker 7: This is an unlikely fig Yes, okay, so and Guilla

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Speaker 7: or I say and Gie, yeah, I'm not sure how

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Speaker 7: the correct way to spend and Gwilla there you go.

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Speaker 7: British Okay, yes, the British territory just to the east

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Speaker 7: of Puerto Rico.

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Speaker 1: That's where it is.

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Speaker 7: So it collects a fee from every registration for Internet

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Speaker 7: addresses that end in dot ai, which is the domain

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Speaker 7: name that's assigned to the.

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Speaker 1: Island, so you get it. So you have all these companies.

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Speaker 7: Who want these, you know, domain names to show that

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Speaker 7: they're on the forefront of AI.

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Speaker 1: So they want the dot AI. So how much are

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Speaker 1: they getting?

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Speaker 7: So each registration and Guilla's government gets anywhere from one

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Speaker 7: hundred and forty dollars two thousands of dollars from website

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Speaker 7: names that are sold over at auctions. Last year, the

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Speaker 7: government made about thirty two million dollars from those fees.

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Speaker 1: That's more than ten percent of their gross domestic.

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Speaker 7: Product just for being the dot AI. So you see

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Speaker 7: kind of the need and how people are asking for

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Speaker 7: it and they want to be.

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Speaker 1: Associated with it.

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Speaker 7: Next, all right, Jack Daniels, people are not drinking enough

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Speaker 7: of it, and that's the problem. So demand actually for

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Speaker 7: Jack Daniels Old number seven has been falling for months.

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Speaker 7: The company behind it, Brown Forman, they're forecasting sluggish US

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00:24:26,520 --> 00:24:30,640
Speaker 7: whiskey business for at least the next year. Yeah, well

437
00:24:30,680 --> 00:24:31,880
Speaker 7: here's a reason why tough comes.

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00:24:31,960 --> 00:24:32,920
Speaker 1: Yeah, yeah, exactly.

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00:24:33,040 --> 00:24:36,280
Speaker 7: So drinkers liked it during the pandemic. They saying the

440
00:24:36,320 --> 00:24:38,520
Speaker 7: party is over. They're saying people are kind of cutting

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00:24:38,560 --> 00:24:39,600
Speaker 7: back on alcohol.

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00:24:39,760 --> 00:24:40,680
Speaker 1: Maybe they're getting a.

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00:24:40,600 --> 00:24:45,240
Speaker 7: Little bit healthier. They're switching to marijuana instead of drinking heavily.

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00:24:45,400 --> 00:24:46,600
Speaker 1: That's another thing.

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00:24:47,080 --> 00:24:50,119
Speaker 7: They're spending less time at home. They're going out a

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00:24:50,119 --> 00:24:52,200
Speaker 7: little bit more, but they're spending less, so they want

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00:24:52,200 --> 00:24:57,880
Speaker 7: the cheaper canned cocktails, maybe some tequila instead of.

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00:24:58,320 --> 00:25:00,760
Speaker 1: And in your white cloth clauses.

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00:25:01,520 --> 00:25:06,560
Speaker 2: And I go into the store and it's it's a wall.

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00:25:06,600 --> 00:25:11,240
Speaker 2: Like if the wall fell over, people would die white, the.

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00:25:11,160 --> 00:25:14,440
Speaker 7: White claws, the high noons, thees. Yeah, you don't get

452
00:25:14,440 --> 00:25:16,680
Speaker 7: the same buzz effect, but it tastes good.

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00:25:17,000 --> 00:25:18,600
Speaker 2: Okay, okay.

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00:25:18,920 --> 00:25:22,760
Speaker 1: And finally, this is honor of you, Tom coming back

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00:25:22,760 --> 00:25:25,439
Speaker 1: from Paris. You missed it. On Sunday, there was a

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00:25:25,560 --> 00:25:26,119
Speaker 1: race there.

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00:25:26,640 --> 00:25:29,680
Speaker 7: It was a race that hasn't happened in over a decade,

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00:25:29,840 --> 00:25:32,040
Speaker 7: but it's it's when the waiters get out. There was

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00:25:32,080 --> 00:25:34,480
Speaker 7: about two hundred many women and they race for about

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00:25:34,480 --> 00:25:38,240
Speaker 7: a mile holding trays of croissants and coffee and water

461
00:25:38,680 --> 00:25:42,520
Speaker 7: and they race around. They were short on the budget,

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00:25:42,600 --> 00:25:45,080
Speaker 7: but they decided to bring it back because the Paris

463
00:25:45,080 --> 00:25:47,000
Speaker 7: Olympics is coming and they want to kind of promote

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00:25:47,040 --> 00:25:49,840
Speaker 7: everything going out there with the cafes and promote everyone

465
00:25:49,880 --> 00:25:51,760
Speaker 7: to come out. So that's why they brought it back.

466
00:25:52,000 --> 00:25:55,199
Speaker 2: It's really interesting it is a Paris bubble. It is

467
00:25:55,480 --> 00:26:01,480
Speaker 2: a tourist outpost and the restaurants are packed. Yep, they're

468
00:26:01,600 --> 00:26:04,200
Speaker 2: very different on a salary structure that you get the

469
00:26:04,240 --> 00:26:08,399
Speaker 2: whole feeling everybody's making a legitimate living on, like the struggle,

470
00:26:09,320 --> 00:26:11,560
Speaker 2: you know, to make it in New York City.

471
00:26:11,160 --> 00:26:13,440
Speaker 3: But they but they you can see signs are gearing

472
00:26:13,480 --> 00:26:14,040
Speaker 3: up for the Olympics.

473
00:26:14,160 --> 00:26:17,120
Speaker 2: Oh huge, huge, and you know it's all getting spriced up.

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00:26:17,160 --> 00:26:20,960
Speaker 2: And I have to say it is hugely emotional still

475
00:26:20,960 --> 00:26:23,359
Speaker 2: to see the cathedral of Notre down. Oh yeah, are

476
00:26:23,359 --> 00:26:26,240
Speaker 2: we We're racing to get it done and I have

477
00:26:26,320 --> 00:26:28,680
Speaker 2: no idea where it is, but they really have made

478
00:26:28,680 --> 00:26:32,720
Speaker 2: some headways. Oh no, no. We were actually going to

479
00:26:32,760 --> 00:26:35,160
Speaker 2: go to the service on Sunday and there's no services still,

480
00:26:35,960 --> 00:26:39,640
Speaker 2: but they're clearly. I can't believe they're going to get

481
00:26:39,640 --> 00:26:41,840
Speaker 2: there by the summer, but maybe they'll get part of

482
00:26:41,880 --> 00:26:45,760
Speaker 2: it open. But you know it Actually Ben smith Ever

483
00:26:45,880 --> 00:26:48,680
Speaker 2: of France did a wonderful interview I want listened to

484
00:26:48,800 --> 00:26:52,040
Speaker 2: over the weekend and he says they completely guessed wrong

485
00:26:52,080 --> 00:26:56,520
Speaker 2: on tourism. It is fully back and fully past twenty nineteen.

486
00:26:57,400 --> 00:26:59,879
Speaker 2: Love us and it's great and can we just have

487
00:27:00,040 --> 00:27:02,800
Speaker 2: the train service they have? That's all I want. I

488
00:27:02,880 --> 00:27:05,560
Speaker 2: just want the trains of France, don't I don't want

489
00:27:05,560 --> 00:27:08,200
Speaker 2: the Red Sox to win, you know whatever, Just give

490
00:27:08,240 --> 00:27:10,280
Speaker 2: me this anything else?

491
00:27:11,080 --> 00:27:13,800
Speaker 7: That is it? That was one? Well do you like

492
00:27:13,840 --> 00:27:17,280
Speaker 7: in the NC double a NC double A?

493
00:27:17,400 --> 00:27:19,320
Speaker 1: I don't know. See, my husband is a big North

494
00:27:19,359 --> 00:27:20,080
Speaker 1: Carolina fans.

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00:27:20,080 --> 00:27:23,680
Speaker 7: Sorry, you're the big Michael Jordan fan.

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00:27:23,720 --> 00:27:24,680
Speaker 1: So that's the reason why.

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00:27:24,800 --> 00:27:28,159
Speaker 7: So our household is big that I was pushing for Connecticut.

498
00:27:28,160 --> 00:27:32,240
Speaker 7: I mean, hey, do we know who the Rock likes?

499
00:27:32,760 --> 00:27:33,240
Speaker 1: We don't.

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00:27:33,440 --> 00:27:38,760
Speaker 2: Okay, let's find that out. Lisa Mateo with the newspapers today.

501
00:27:38,920 --> 00:27:40,800
Speaker 2: You know, I get the Rock. Miami's not in this.

502
00:27:40,880 --> 00:27:44,119
Speaker 2: That's what they're rock. Now. This is the Bloomberg Surveillance Podcast,

503
00:27:44,359 --> 00:27:49,200
Speaker 2: bringing you the best in economics, finance, investment, and international relations.

504
00:27:49,440 --> 00:27:52,800
Speaker 2: You can also watch the show live on YouTube. Visit

505
00:27:52,840 --> 00:27:56,919
Speaker 2: the Bloomberg Podcast channel on YouTube to see the show

506
00:27:57,200 --> 00:28:00,320
Speaker 2: weekday mornings from seven to ten am Eastern of our

507
00:28:00,320 --> 00:28:04,080
Speaker 2: global headquarters in New York City. Subscribe to the podcast

508
00:28:04,119 --> 00:28:08,160
Speaker 2: on Apple, Spotify, or anywhere else you listen, and always

509
00:28:08,280 --> 00:28:12,360
Speaker 2: on Bloomberg Radio. The Bloomberg Terminal and the Bloomberg Business

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00:28:12,400 --> 00:28:12,680
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