1 00:00:00,080 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:11,960 --> 00:00:15,560 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 3 00:00:15,600 --> 00:00:18,960 Speaker 2: with Paul Sweeney. Join us each day for insight from 4 00:00:18,960 --> 00:00:23,160 Speaker 2: the best in economics, finance, investment, and international relations. You 5 00:00:23,160 --> 00:00:26,520 Speaker 2: can also watch the show live on YouTube. Visit the 6 00:00:26,520 --> 00:00:31,280 Speaker 2: Bloomberg Podcast channel on YouTube to see the show weekday 7 00:00:31,280 --> 00:00:34,320 Speaker 2: mornings from seven to ten am Eastern from our global 8 00:00:34,360 --> 00:00:39,000 Speaker 2: headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 9 00:00:39,360 --> 00:00:42,920 Speaker 2: or anywhere else you listen and always I'm Bloomberg Radio, 10 00:00:43,080 --> 00:00:46,280 Speaker 2: the Bloomberg Terminal, and the Bloomberg Business app. 11 00:00:46,520 --> 00:00:48,600 Speaker 3: The best chartist in the world. 12 00:00:48,600 --> 00:00:51,920 Speaker 4: You're in Timor He is the director Global macro ur In. 13 00:00:52,040 --> 00:00:55,280 Speaker 2: I believe it's a bullmarket off this jobs report. This 14 00:00:55,520 --> 00:00:58,480 Speaker 2: is reaffirm your enthusiasm for stocks. 15 00:01:00,560 --> 00:01:03,960 Speaker 5: Yes, this is a report in line with the soft 16 00:01:04,080 --> 00:01:07,600 Speaker 5: landing thesis, or you know, it's kind of a Goldilocks report. 17 00:01:08,040 --> 00:01:11,479 Speaker 5: Three point nine U three rate, of course gets us 18 00:01:11,560 --> 00:01:15,800 Speaker 5: another step closer to you know, as we were discussing 19 00:01:15,800 --> 00:01:19,240 Speaker 5: the tailor rule to minimizing that gap between you know, 20 00:01:19,360 --> 00:01:23,039 Speaker 5: the actual unemployment rate and full employment and so that 21 00:01:23,200 --> 00:01:26,720 Speaker 5: you know, it's one little step in the right direction 22 00:01:27,000 --> 00:01:29,479 Speaker 5: for the FED to say, Okay, you know we're at 23 00:01:29,480 --> 00:01:32,240 Speaker 5: five and three eights, maybe we can start giving back 24 00:01:32,480 --> 00:01:34,240 Speaker 5: a couple of rate cuts. I don't think it's going 25 00:01:34,319 --> 00:01:38,640 Speaker 5: to be more than a couple, but this report points 26 00:01:38,680 --> 00:01:41,360 Speaker 5: in that direction, and it is not weak enough to 27 00:01:41,440 --> 00:01:45,480 Speaker 5: really question whether the economic expansion remains in place. 28 00:01:45,280 --> 00:01:47,560 Speaker 2: The lift to the equity market with the vics thirteen 29 00:01:47,640 --> 00:01:50,240 Speaker 2: point eighty six again commercial free for you for the 30 00:01:50,760 --> 00:01:53,440 Speaker 2: our Urie and Timmer. Thank you so much from Fidelity. 31 00:01:53,520 --> 00:01:57,160 Speaker 2: Greatly appreciate that in perfect timing, and I get goosebum. 32 00:01:57,680 --> 00:01:58,440 Speaker 3: Our books are. 33 00:01:58,360 --> 00:02:01,120 Speaker 2: Just killing us. I mean they call it Mark Sandy, 34 00:02:01,160 --> 00:02:04,600 Speaker 2: and they play here's the book paying the price, ending 35 00:02:04,600 --> 00:02:08,120 Speaker 2: the Great Recession and beginning a new American Century. We're 36 00:02:08,120 --> 00:02:10,800 Speaker 2: looking for the new volume of this. Mark Sandy joins 37 00:02:10,880 --> 00:02:14,840 Speaker 2: us now from Moody Analytics. Mark with the resiliency of 38 00:02:14,880 --> 00:02:18,960 Speaker 2: this economy, with what we saw from Apple yesterday, I 39 00:02:18,960 --> 00:02:22,920 Speaker 2: guess we get a Jerome Powell friendly jobs report. Is 40 00:02:22,960 --> 00:02:25,720 Speaker 2: it a new American Century? 41 00:02:28,639 --> 00:02:30,960 Speaker 6: I need to write another book, Tom, but thank you 42 00:02:31,000 --> 00:02:34,320 Speaker 6: for plugging the book that's probably you can buy for 43 00:02:34,360 --> 00:02:35,480 Speaker 6: five cents on eBay. 44 00:02:35,600 --> 00:02:38,000 Speaker 7: But appreciate that. Yeah, I need to write another book. 45 00:02:38,040 --> 00:02:40,120 Speaker 6: But yeah, it feels like the American century to me, 46 00:02:40,200 --> 00:02:44,400 Speaker 6: doesn't it. I mean, the US economy is what's the word, 47 00:02:44,480 --> 00:02:46,120 Speaker 6: it's rip roarin. 48 00:02:46,440 --> 00:02:48,880 Speaker 2: Well, let me go there, Mark, doctor Zandy, let me 49 00:02:48,919 --> 00:02:51,400 Speaker 2: go there. You and I studied at the altar of 50 00:02:51,600 --> 00:02:55,120 Speaker 2: ed YARDNNY. He says, it's like the Roaring twenties off 51 00:02:55,120 --> 00:02:57,040 Speaker 2: the pandemic of nineteen nineteen? 52 00:02:57,360 --> 00:03:00,120 Speaker 3: Is it the Roaring twenties? For Mark Sandy. 53 00:03:01,400 --> 00:03:08,840 Speaker 6: Well roring ended in it? That kind of ended badly? No, No, 54 00:03:09,000 --> 00:03:10,639 Speaker 6: I don't think that at all. I think the American 55 00:03:10,680 --> 00:03:13,840 Speaker 6: economy is on very solid ground. It feels really, you know, 56 00:03:14,040 --> 00:03:18,360 Speaker 6: very good to me. This report, you know, feels like 57 00:03:18,639 --> 00:03:21,480 Speaker 6: soft landing written all over it. If she allowed the 58 00:03:21,520 --> 00:03:25,359 Speaker 6: Fed to begin easing interest rates. And you know, I've 59 00:03:25,400 --> 00:03:28,920 Speaker 6: been reluctant to declare victory, saying soft landing until the 60 00:03:28,919 --> 00:03:31,680 Speaker 6: FED starts cutting interest rates, I think that would be premature. 61 00:03:31,720 --> 00:03:34,120 Speaker 6: But you know, a report like this, to get a 62 00:03:34,120 --> 00:03:37,280 Speaker 6: couple of good inflation and they start cutting, I think 63 00:03:37,320 --> 00:03:38,360 Speaker 6: we can declare victory. 64 00:03:38,400 --> 00:03:41,680 Speaker 3: We soft landed a ten year yield in twelve basis points. 65 00:03:41,760 --> 00:03:45,400 Speaker 2: We're declaring victories for open houses this weekend, exactly, the 66 00:03:45,440 --> 00:03:48,520 Speaker 2: real estate business. Paul Mark Sandy two thousand and eight, 67 00:03:48,680 --> 00:03:51,720 Speaker 2: two thousand and nine, he was the committed optimist. We 68 00:03:51,760 --> 00:03:54,240 Speaker 2: will come out of that horrific great. 69 00:03:54,040 --> 00:03:55,240 Speaker 3: Recession, exactly. 70 00:03:55,560 --> 00:03:58,520 Speaker 4: Tom, I'm just looking at the top live reporting and 71 00:03:59,480 --> 00:04:02,160 Speaker 4: end the current and from Global Economy reporter saying this 72 00:04:02,240 --> 00:04:05,720 Speaker 4: is important for the inflation debate. Average hourly earnings for 73 00:04:05,760 --> 00:04:09,040 Speaker 4: all employees on private non farm payrolls rose zero point 74 00:04:09,280 --> 00:04:12,600 Speaker 4: two percent versus the consensus of zero point three. I 75 00:04:12,640 --> 00:04:14,400 Speaker 4: think the whisper number was probably a little bit higher 76 00:04:14,440 --> 00:04:16,560 Speaker 4: than that. So that's kind of a key data point 77 00:04:16,560 --> 00:04:19,280 Speaker 4: that the folks of Bloomberg News are focusing on. And Mark, 78 00:04:19,320 --> 00:04:22,360 Speaker 4: I'm looking at again the two year treasury the one 79 00:04:22,360 --> 00:04:24,760 Speaker 4: most sensitive to kind of the maybe rate changes in 80 00:04:24,800 --> 00:04:27,479 Speaker 4: the FED off thirteen basis points. Is that the market 81 00:04:27,520 --> 00:04:31,760 Speaker 4: telling us that, yeah, probably this FED cut is back 82 00:04:31,800 --> 00:04:32,320 Speaker 4: on the table. 83 00:04:33,360 --> 00:04:36,120 Speaker 6: Yeah, indeed, I mean it's premature to conclude that way. 84 00:04:36,160 --> 00:04:37,680 Speaker 6: I mean, at the end of the day, we got 85 00:04:37,680 --> 00:04:39,720 Speaker 6: to get those inflation numbers that the Fed are looking 86 00:04:39,720 --> 00:04:42,760 Speaker 6: for something close to their target, and they need more 87 00:04:42,800 --> 00:04:45,880 Speaker 6: than a month, probably a couple three months. But This 88 00:04:46,000 --> 00:04:50,120 Speaker 6: is really consistent with that kind of forecast. So feels 89 00:04:50,240 --> 00:04:53,560 Speaker 6: really really good all the way around. And I do 90 00:04:53,600 --> 00:04:55,839 Speaker 6: think we're going to get better inflation numbers. And I 91 00:04:55,880 --> 00:04:57,160 Speaker 6: do think what we saw on the start of the 92 00:04:57,240 --> 00:05:01,480 Speaker 6: year was residual effects of the pen endemics and measurement issues. 93 00:05:01,839 --> 00:05:04,200 Speaker 6: I really think inflation's coming in. 94 00:05:04,200 --> 00:05:07,120 Speaker 2: Futures up sixty down, futures up five hundred and twelve, 95 00:05:07,160 --> 00:05:10,320 Speaker 2: one point three percent. The Apple nastack lists one point 96 00:05:10,360 --> 00:05:13,440 Speaker 2: six percent, as doctor Zandy says, a whold statistic. Paul, 97 00:05:13,520 --> 00:05:15,919 Speaker 2: here's the number with the revisions. Thank you to end 98 00:05:15,960 --> 00:05:18,720 Speaker 2: the current and all. And it's Scott Landman running our 99 00:05:18,760 --> 00:05:21,120 Speaker 2: economic data. Now I teared up when I saw that. 100 00:05:21,520 --> 00:05:24,960 Speaker 2: How about this one seventy five takeaway twenty two and 101 00:05:25,040 --> 00:05:28,279 Speaker 2: I think that's a one thirty three, one fifty three, 102 00:05:28,560 --> 00:05:32,080 Speaker 2: one hundred and fifty three thousand with revision, and that's 103 00:05:32,320 --> 00:05:34,320 Speaker 2: way below what Sarah Wolfe was saying. 104 00:05:34,440 --> 00:05:36,240 Speaker 3: Yep, it was a run rate for America. 105 00:05:36,279 --> 00:05:39,359 Speaker 4: And Richard Flynn managing director Charles shaub Uk says the 106 00:05:39,400 --> 00:05:42,800 Speaker 4: report as they sign that demand is slowing in the 107 00:05:42,880 --> 00:05:45,440 Speaker 4: labor to market. So Mark, I'm looking at I guess 108 00:05:45,440 --> 00:05:47,240 Speaker 4: the unemployment rate came in a tick high here at 109 00:05:47,279 --> 00:05:50,080 Speaker 4: three point nine percent. Is there a number out there? 110 00:05:50,120 --> 00:05:52,800 Speaker 4: Do you think where the federal reserve, whether it's four percent, 111 00:05:52,880 --> 00:05:55,520 Speaker 4: four point five percent, will say, boy, we got to 112 00:05:55,600 --> 00:05:57,760 Speaker 4: just jump in and start easing right now. Is there 113 00:05:57,760 --> 00:06:00,000 Speaker 4: a number you think that get some a little uncomfort. 114 00:06:01,200 --> 00:06:03,599 Speaker 6: I think anything over four. You know, my sense is 115 00:06:03,640 --> 00:06:06,400 Speaker 6: full employment. Unemployment is south of four. I mean that 116 00:06:06,800 --> 00:06:09,839 Speaker 6: we got there back before the pandemic, with no wage growth, 117 00:06:09,920 --> 00:06:12,680 Speaker 6: no inflation. We got back there. This go around, wage 118 00:06:12,680 --> 00:06:16,880 Speaker 6: growth has been decelerating, consistent with you know, the an economy. 119 00:06:16,880 --> 00:06:19,960 Speaker 6: That's the full employment, so inning over four. And it's 120 00:06:20,000 --> 00:06:22,680 Speaker 6: also not only the level, but the change in I 121 00:06:22,720 --> 00:06:25,080 Speaker 6: heard you had Claudia say, sound coming on later. 122 00:06:25,200 --> 00:06:26,360 Speaker 7: That's of course something that you do. 123 00:06:26,560 --> 00:06:27,960 Speaker 3: Yeah, she didn't want to come out. She wants to 124 00:06:28,000 --> 00:06:30,080 Speaker 3: listen to you first. Continue, Is that right? 125 00:06:30,920 --> 00:06:32,760 Speaker 7: Give her my best. She's she's great. 126 00:06:32,960 --> 00:06:35,120 Speaker 6: And you know, of course, if you get these big 127 00:06:35,400 --> 00:06:38,400 Speaker 6: if you get increases in unemployment but more than a 128 00:06:38,440 --> 00:06:41,120 Speaker 6: few tens of percent in a short period of time, 129 00:06:41,240 --> 00:06:43,840 Speaker 6: then that kind of signals historically that you're getting into 130 00:06:43,960 --> 00:06:46,800 Speaker 6: kind of a self reinforcing negative cycle. So I think 131 00:06:46,839 --> 00:06:49,960 Speaker 6: anything north of four anytime soon, I think that would 132 00:06:50,120 --> 00:06:52,800 Speaker 6: just start to say, hey, you know, my view is 133 00:06:52,839 --> 00:06:54,480 Speaker 6: if that should have been easing all, you know, even 134 00:06:54,480 --> 00:06:56,880 Speaker 6: before all of this. You know, I think they achieved 135 00:06:56,880 --> 00:06:59,719 Speaker 6: their mandate. I think they got the economy full employment, 136 00:06:59,720 --> 00:07:03,000 Speaker 6: and I right, underlying inflation is at target. You know, 137 00:07:03,080 --> 00:07:07,000 Speaker 6: exclude owners equivalent rate, go to harmonized inflation. You are 138 00:07:07,040 --> 00:07:09,920 Speaker 6: at target. And they're taking a chance here with the 139 00:07:10,080 --> 00:07:11,880 Speaker 6: keeping rates up. So I think that won't take a 140 00:07:11,880 --> 00:07:13,440 Speaker 6: whole lot for them to start cutting rates. 141 00:07:13,800 --> 00:07:15,680 Speaker 3: Headline from Bloomberg. Thanks Rich for this. 142 00:07:15,840 --> 00:07:20,240 Speaker 2: Traders pull forward first Federate cut to September from November. 143 00:07:20,560 --> 00:07:22,800 Speaker 2: Zandi thinking they should have done that in September of 144 00:07:22,800 --> 00:07:36,320 Speaker 2: twenty twenty three. Mark Sandy, you drank the kool aid 145 00:07:36,360 --> 00:07:40,720 Speaker 2: at Pennsylvania. We just came off Apple with one hundred 146 00:07:40,720 --> 00:07:45,480 Speaker 2: and ten billion share buyback. Can you aggregate the American 147 00:07:45,600 --> 00:07:50,480 Speaker 2: labor economy or are we so polarized between the madness 148 00:07:50,520 --> 00:07:55,520 Speaker 2: of tech success, American exceptionalism and half of America is 149 00:07:55,600 --> 00:07:58,440 Speaker 2: you've studied for years at Moody's flat on their back. 150 00:07:59,280 --> 00:08:00,600 Speaker 7: Yeah, it's a great point. 151 00:08:01,240 --> 00:08:03,800 Speaker 6: You know, these are great times for the folks in 152 00:08:03,840 --> 00:08:05,800 Speaker 6: the top third of the income distribution. I mean, I 153 00:08:05,840 --> 00:08:08,120 Speaker 6: don't know, just hyperbole, but it feels like it's about 154 00:08:08,120 --> 00:08:09,840 Speaker 6: as good a time as it's ever been. Maybe that 155 00:08:09,960 --> 00:08:13,080 Speaker 6: is the Roaring twenties middle third. You know, it's okay, 156 00:08:13,200 --> 00:08:16,520 Speaker 6: it's times have been better, but they they've been worse. 157 00:08:16,520 --> 00:08:18,920 Speaker 6: It's more typical folks in the bottom third of the 158 00:08:18,920 --> 00:08:23,840 Speaker 6: distribution obviously very tough time. That inflation that we suffered 159 00:08:23,880 --> 00:08:25,760 Speaker 6: back in twenty one to twenty two early twenty three 160 00:08:25,800 --> 00:08:27,960 Speaker 6: really did a lot of damage. They had to turn 161 00:08:28,040 --> 00:08:30,400 Speaker 6: to credit cards and consumer finance loans, and now they're 162 00:08:30,400 --> 00:08:32,640 Speaker 6: paying a lot of interest on that with the high 163 00:08:32,960 --> 00:08:36,839 Speaker 6: rates of the engineering here, so those folks are really struggling. Now. 164 00:08:36,840 --> 00:08:39,280 Speaker 6: The American economy can move forward without the bottom third, 165 00:08:39,280 --> 00:08:42,360 Speaker 6: but it can't flourish. So yeah, that's that's a problem. 166 00:08:42,360 --> 00:08:44,719 Speaker 6: That's a big deal, and are one of our key 167 00:08:44,760 --> 00:08:46,120 Speaker 6: vulnerabilities with us. 168 00:08:46,160 --> 00:08:50,160 Speaker 2: Mark Zandi of Moody's Analytics scheduled Claudia Asym. She says 169 00:08:50,160 --> 00:08:52,760 Speaker 2: she wouldn't come on until she got a brief from 170 00:08:52,800 --> 00:08:53,600 Speaker 2: doctor Zandy. 171 00:08:53,640 --> 00:08:56,360 Speaker 3: Claudia's waiting to come on is well. 172 00:08:56,440 --> 00:08:59,000 Speaker 2: Paul Swenia and Tom King was futures of fifty eight down, 173 00:08:59,080 --> 00:09:02,439 Speaker 2: futures up around five hundred nastac up one point six 174 00:09:02,520 --> 00:09:04,520 Speaker 2: two percent. Yields plunged. 175 00:09:04,600 --> 00:09:05,760 Speaker 3: There's no other word to use. 176 00:09:05,800 --> 00:09:08,600 Speaker 2: A two year yield down twelve basis points from five 177 00:09:08,600 --> 00:09:12,560 Speaker 2: oh three days ago to four point seventy five percent. 178 00:09:12,640 --> 00:09:16,600 Speaker 2: We thank our sponsors. We are commercial free until nine am, Paul. 179 00:09:17,120 --> 00:09:20,080 Speaker 4: So Mark, let's step back here and kind of put 180 00:09:20,120 --> 00:09:23,120 Speaker 4: into your economic model what we've seen from the labor 181 00:09:23,120 --> 00:09:25,679 Speaker 4: market today, what we've seen from inflation data over the 182 00:09:25,720 --> 00:09:28,720 Speaker 4: past couple of months. What's the growth outlook for you 183 00:09:28,760 --> 00:09:31,440 Speaker 4: guys at Moody's here for this economy for the remainder 184 00:09:31,440 --> 00:09:31,960 Speaker 4: of this year. 185 00:09:32,880 --> 00:09:33,160 Speaker 3: Good. 186 00:09:33,840 --> 00:09:36,640 Speaker 6: You know, if GDP is our benchmarkt was up two 187 00:09:36,679 --> 00:09:39,719 Speaker 6: and a half percent last year, which, you know, pretty incredible, 188 00:09:40,040 --> 00:09:44,400 Speaker 6: thinking that most economists, a lot of CEOs thought we'd 189 00:09:44,440 --> 00:09:47,160 Speaker 6: have a recession last year. Not only was it no reception, 190 00:09:47,280 --> 00:09:48,880 Speaker 6: it was a great year. Two and a half percent. 191 00:09:49,480 --> 00:09:51,040 Speaker 6: It's going to be at least two and a half 192 00:09:51,080 --> 00:09:54,120 Speaker 6: percent this year, so very very solid growth. It feels 193 00:09:54,120 --> 00:09:56,559 Speaker 6: like a job growth is slowing, it's going to moderate, 194 00:09:56,600 --> 00:09:57,040 Speaker 6: but that. 195 00:09:57,280 --> 00:09:58,640 Speaker 7: Goes to improving productivity. 196 00:09:58,679 --> 00:10:03,520 Speaker 6: Growth, and you know, most fundamentally, what's really encouraging is 197 00:10:03,520 --> 00:10:06,920 Speaker 6: we're getting these after suffering these massive negative supply shocks, 198 00:10:06,960 --> 00:10:09,600 Speaker 6: the pandemic in the Russian War in Ukraine, we're now 199 00:10:09,640 --> 00:10:13,920 Speaker 6: benefiting from some real substantive positive supply shocks, you know, 200 00:10:14,040 --> 00:10:19,880 Speaker 6: the productivity improvement and foreign immigration. Although that poses boatloaded challenges, 201 00:10:20,240 --> 00:10:22,840 Speaker 6: the benefit of that is it, you know, breaks a 202 00:10:22,840 --> 00:10:25,480 Speaker 6: lot of folks in the workforce, and they're taking jobs 203 00:10:25,480 --> 00:10:26,720 Speaker 6: and pulling off the labor market. 204 00:10:26,920 --> 00:10:32,240 Speaker 2: Mark, I'm assuming you studied under Lawrence Summer's father at Pennsylvania. Ah. 205 00:10:32,400 --> 00:10:33,839 Speaker 7: Yeah, and his mom. 206 00:10:34,000 --> 00:10:37,880 Speaker 2: Yeah, his mom had that honor. Is well, Larry's carrying 207 00:10:37,920 --> 00:10:41,679 Speaker 2: the torch of stagflation powells for Summers under. 208 00:10:41,520 --> 00:10:43,559 Speaker 3: The bus at the press conference. 209 00:10:43,800 --> 00:10:46,880 Speaker 2: There is no stag. There is no flation. And that 210 00:10:46,960 --> 00:10:50,600 Speaker 2: sounds like Mark Sandy, Mark Sandy, is their stag? Is 211 00:10:50,640 --> 00:10:51,240 Speaker 2: there flation? 212 00:10:52,760 --> 00:10:55,480 Speaker 6: I mean just the opposite, right, the solid growth and 213 00:10:55,559 --> 00:10:57,840 Speaker 6: moderating infliction. And as I said earlier, and I think 214 00:10:57,840 --> 00:11:01,160 Speaker 6: inflation is already back to target. Mean mean, go look 215 00:11:01,200 --> 00:11:04,240 Speaker 6: at harmonized CPI. You know the way the Europeans measure 216 00:11:04,320 --> 00:11:07,080 Speaker 6: They don't throw, they don't put in owner's equivalent, because 217 00:11:07,080 --> 00:11:08,959 Speaker 6: we can't measure that even in the best of times, 218 00:11:09,280 --> 00:11:13,040 Speaker 6: certainly now when the housing market's upside down and all around. 219 00:11:13,120 --> 00:11:15,880 Speaker 6: So if you really want to get the underlying inflation, 220 00:11:15,960 --> 00:11:18,559 Speaker 6: take a look at harmonized CPI. The BOS produces it. 221 00:11:18,640 --> 00:11:22,600 Speaker 6: It's an experimental measure. It's been below two percent for 222 00:11:22,640 --> 00:11:24,520 Speaker 6: more than I don't know nine months. 223 00:11:24,679 --> 00:11:25,199 Speaker 7: We're there. 224 00:11:25,400 --> 00:11:28,160 Speaker 6: We're there, so stagflation is just the opposite. We're getting good, 225 00:11:28,160 --> 00:11:31,960 Speaker 6: solid growth with moderating inflation. So you know, this pessimism 226 00:11:32,440 --> 00:11:34,320 Speaker 6: that I hear from Larry, I just I don't you know, 227 00:11:34,360 --> 00:11:35,160 Speaker 6: I just don't get it. 228 00:11:35,760 --> 00:11:39,440 Speaker 2: We're harmonized right now. We are thrilled to have joining 229 00:11:39,559 --> 00:11:43,280 Speaker 2: us with Mark Sandy. Claudia sam joins us right now. 230 00:11:43,400 --> 00:11:46,720 Speaker 2: Her impact on economics in the last eighteen months has 231 00:11:46,760 --> 00:11:51,000 Speaker 2: been extraordinary. She's chief economist at New Century advised us. 232 00:11:51,040 --> 00:11:53,080 Speaker 2: We wanted to get you on together, Claudia. I ain't 233 00:11:53,080 --> 00:11:55,800 Speaker 2: to say this, but doctor Zandy was saying nice things 234 00:11:55,840 --> 00:11:56,320 Speaker 2: about you. 235 00:11:56,760 --> 00:12:00,040 Speaker 3: Mark Zandy a question for Claudia. 236 00:11:59,720 --> 00:12:05,079 Speaker 6: So please, Claudia, do you were you able to hear 237 00:12:05,120 --> 00:12:08,360 Speaker 6: what I was saying earlier? I mean, agreed, disagree, push back? 238 00:12:08,440 --> 00:12:11,080 Speaker 8: What do you think so I heard the last part 239 00:12:11,120 --> 00:12:15,920 Speaker 8: about tagflation. I wholeheartedly agree with that, and I think 240 00:12:15,920 --> 00:12:18,800 Speaker 8: you could put me on like just loop about how 241 00:12:18,840 --> 00:12:22,680 Speaker 8: I think Larry Summers has been too pessimistic through this 242 00:12:22,720 --> 00:12:25,840 Speaker 8: whole cycle. So you know, No, this was a good 243 00:12:25,880 --> 00:12:28,520 Speaker 8: This was like really the first data point we've gotten 244 00:12:28,559 --> 00:12:31,079 Speaker 8: this year that says, hey, we could get that soft landing. 245 00:12:33,120 --> 00:12:35,560 Speaker 7: Yeah, let's go more question Tom please? 246 00:12:35,559 --> 00:12:38,839 Speaker 2: Oh no, doctor Sandy, please take another show and ask 247 00:12:38,920 --> 00:12:40,000 Speaker 2: good questions here. 248 00:12:42,320 --> 00:12:44,440 Speaker 6: Well, I think the low one unemployment correct me if 249 00:12:44,440 --> 00:12:45,120 Speaker 6: I'm wrong, Claudia. 250 00:12:45,160 --> 00:12:46,280 Speaker 7: I know you look at it really carefully. 251 00:12:46,280 --> 00:12:48,880 Speaker 6: He is like three four not too long ago, maybe 252 00:12:49,080 --> 00:12:52,760 Speaker 6: six nine months ago, where at three to nine, you know, 253 00:12:52,880 --> 00:12:57,319 Speaker 6: your rule of thumb, you're heuristic would say we should 254 00:12:57,400 --> 00:13:01,800 Speaker 6: be nervous about recession here, toure? Do I have that right? 255 00:13:02,000 --> 00:13:04,760 Speaker 6: And what would it take for your alarm bells to 256 00:13:04,800 --> 00:13:07,560 Speaker 6: go off that unemployment's rising too high too fast? 257 00:13:08,679 --> 00:13:11,160 Speaker 8: Anytime we see the unemployment rate rise, we should keep 258 00:13:11,160 --> 00:13:12,920 Speaker 8: an eye on it, like that's not a good thing. 259 00:13:13,640 --> 00:13:14,080 Speaker 2: Now. 260 00:13:15,280 --> 00:13:17,680 Speaker 8: I look at this is for the unemployment rate, and 261 00:13:17,720 --> 00:13:20,720 Speaker 8: in general I look at the three month averages and 262 00:13:20,800 --> 00:13:23,240 Speaker 8: so the low that we saw last year was three 263 00:13:23,240 --> 00:13:25,800 Speaker 8: and a half percent of that three month average, and 264 00:13:25,880 --> 00:13:29,440 Speaker 8: today we're on average at three point eight percent, so 265 00:13:29,640 --> 00:13:34,480 Speaker 8: three tens percentage point rise. Sometimes it comes into a recession, 266 00:13:34,559 --> 00:13:38,520 Speaker 8: but it is not a reliable indicator that we are 267 00:13:38,559 --> 00:13:41,439 Speaker 8: in one. That reliable and indicator would be a five 268 00:13:41,520 --> 00:13:46,320 Speaker 8: tens percentage point. So it's like I said, we should 269 00:13:46,320 --> 00:13:48,760 Speaker 8: always pay attention to rise in the unemployment rate, and 270 00:13:48,840 --> 00:13:51,160 Speaker 8: yet there are not alarm bells here. 271 00:13:51,440 --> 00:13:53,560 Speaker 2: Let me bring in my colleague Paul Sweeney. He's just 272 00:13:53,600 --> 00:13:55,480 Speaker 2: sold out of his two year yield with a game 273 00:13:55,559 --> 00:13:58,920 Speaker 2: price up ye'ld down. Paul to doctor Zandy and Claudiasm. 274 00:13:59,320 --> 00:14:01,720 Speaker 4: Claudia, I wondering if you're in the camp that thinks, 275 00:14:02,040 --> 00:14:05,600 Speaker 4: you know, this Federal Reserve is already behind the times 276 00:14:05,600 --> 00:14:08,840 Speaker 4: here that they should have already been cutting here, that 277 00:14:08,960 --> 00:14:12,719 Speaker 4: inflation has been whipped. Are you in that camp or no? 278 00:14:16,000 --> 00:14:18,560 Speaker 8: I saw the case. I think by the end of 279 00:14:18,640 --> 00:14:22,120 Speaker 8: last year that we should be cutting interest rates. They're 280 00:14:22,160 --> 00:14:24,840 Speaker 8: a good bit in the restrictive territory, and if you 281 00:14:24,920 --> 00:14:26,680 Speaker 8: want to be out of the way when you get 282 00:14:26,720 --> 00:14:29,720 Speaker 8: to the dual mandate, you know, I'd rather they do 283 00:14:29,800 --> 00:14:32,120 Speaker 8: that in a gradual way. As opposed to having to 284 00:14:32,240 --> 00:14:35,680 Speaker 8: cut massively if a recession happens. And yet you know, 285 00:14:35,760 --> 00:14:38,560 Speaker 8: this is a tough one. I get it. I thought 286 00:14:38,960 --> 00:14:42,600 Speaker 8: J Pow really threaded the needle this week and pushed 287 00:14:42,680 --> 00:14:45,240 Speaker 8: back on the we're going to need to hike these 288 00:14:45,280 --> 00:14:48,400 Speaker 8: are accelerating with inflation, and I think that narrative needed 289 00:14:48,440 --> 00:14:53,880 Speaker 8: to get, you know, set aside. So I like, in 290 00:14:53,920 --> 00:14:56,160 Speaker 8: the range of things that I could imagine the FED doing, 291 00:14:56,680 --> 00:14:57,640 Speaker 8: they're doing a good job. 292 00:14:57,720 --> 00:14:58,560 Speaker 3: I mean, the herod is here. 293 00:14:58,600 --> 00:15:01,800 Speaker 2: We've got folks with Claudia sim Michigan Economics and Mark 294 00:15:01,880 --> 00:15:06,800 Speaker 2: Zandy out of Pennsylvania. It's really really quite special Mark Sandy. 295 00:15:07,160 --> 00:15:09,640 Speaker 2: With that said, and let's say the FED as a 296 00:15:09,680 --> 00:15:14,200 Speaker 2: fan distribution of becoming measured, do you assume they revert 297 00:15:14,320 --> 00:15:18,960 Speaker 2: back to a green Spannian measured quarter point quarter point 298 00:15:19,040 --> 00:15:22,120 Speaker 2: quarter point torture of lower rates or can they be 299 00:15:22,240 --> 00:15:25,640 Speaker 2: more burnsy and like and actually get something done in 300 00:15:25,680 --> 00:15:26,880 Speaker 2: a Claudia zomb. 301 00:15:26,640 --> 00:15:30,680 Speaker 6: WAYH Well, I think that depends on the economy and inflation, right, Tom. 302 00:15:30,720 --> 00:15:34,120 Speaker 6: I mean, you know, if the economy kind of throttles 303 00:15:34,160 --> 00:15:37,960 Speaker 6: back stays close to its potential growth, and I think 304 00:15:37,960 --> 00:15:39,560 Speaker 6: it's a quarter point at a time. I think the 305 00:15:39,560 --> 00:15:42,280 Speaker 6: thing that's complicating things for them this go around, more 306 00:15:42,280 --> 00:15:45,760 Speaker 6: than in other times is what is that neutral rate, 307 00:15:45,840 --> 00:15:47,880 Speaker 6: you know, so called r star, that rate which is 308 00:15:47,920 --> 00:15:50,800 Speaker 6: consistent with policy, neither supporting or restraining growth. 309 00:15:51,280 --> 00:15:52,640 Speaker 7: You know, we came. 310 00:15:52,440 --> 00:15:55,520 Speaker 6: Into this period thinking two and a half percent, that's 311 00:15:55,600 --> 00:15:57,320 Speaker 6: kind of sort of what the Fed's got penciled in 312 00:15:57,320 --> 00:16:00,200 Speaker 6: in their summary of economic projections. But it's not two 313 00:16:00,240 --> 00:16:01,880 Speaker 6: and a half, right, it's not five and a half 314 00:16:01,880 --> 00:16:03,520 Speaker 6: where the funds rate is now, but it's not two 315 00:16:03,560 --> 00:16:03,840 Speaker 6: and a half. 316 00:16:03,880 --> 00:16:04,600 Speaker 7: It's higher than that. 317 00:16:04,640 --> 00:16:08,240 Speaker 6: It's so it's unclear where that is, very unclear, you know, 318 00:16:08,320 --> 00:16:11,800 Speaker 6: atypically unclear. And so given that, I think that would 319 00:16:11,840 --> 00:16:14,440 Speaker 6: call for more question in lowering interest rates, you know, 320 00:16:14,560 --> 00:16:16,960 Speaker 6: lowered a little bit at quarter point of quarter. Take 321 00:16:16,960 --> 00:16:19,480 Speaker 6: a look around, see what's going on, and I think 322 00:16:19,480 --> 00:16:22,160 Speaker 6: that's the way it goes. But if something breaks, you 323 00:16:22,200 --> 00:16:25,640 Speaker 6: know in the financial system and the economy or whatever, 324 00:16:25,680 --> 00:16:28,160 Speaker 6: you know, the labor market, you know, kind of softish 325 00:16:28,160 --> 00:16:30,080 Speaker 6: coming into this report, and if you look at the 326 00:16:30,200 --> 00:16:32,840 Speaker 6: Jolts numbers, I'm sure you roll over them when they 327 00:16:32,840 --> 00:16:34,840 Speaker 6: came out earlier in the week on hiring rates and 328 00:16:34,880 --> 00:16:37,440 Speaker 6: quit rates. The only thing that's keeping the labor market 329 00:16:37,520 --> 00:16:39,840 Speaker 6: kind of together is layoffs are so low. But that 330 00:16:39,880 --> 00:16:43,480 Speaker 6: can change very rapidly, you know, businesses, business psychology can 331 00:16:43,520 --> 00:16:46,160 Speaker 6: shift and you start seeing some layoffs, then then they 332 00:16:46,200 --> 00:16:48,680 Speaker 6: all start cutting more quickly. But I think barring that 333 00:16:48,800 --> 00:16:52,120 Speaker 6: kind of a scenario, it's going to be as you said, 334 00:16:52,160 --> 00:16:55,000 Speaker 6: Green Spanny, and I think that would be okayed. 335 00:16:55,320 --> 00:16:57,560 Speaker 2: What's important here is this goes to what we learned 336 00:16:57,600 --> 00:17:00,520 Speaker 2: the day at the fed to side show. When it goes, 337 00:17:01,200 --> 00:17:03,760 Speaker 2: it goes rapidly. Yeah, that was a clear message from 338 00:17:03,760 --> 00:17:05,560 Speaker 2: our many good guests, Claudia. 339 00:17:05,920 --> 00:17:10,480 Speaker 4: Given this labor backdrop, the update we received today, what's 340 00:17:10,520 --> 00:17:13,000 Speaker 4: your view of this US consumer here? Mark, you know, 341 00:17:13,080 --> 00:17:15,240 Speaker 4: was suggesting that there are some folks that are obviously 342 00:17:15,280 --> 00:17:17,560 Speaker 4: doing well in this economy, but a lot of folks 343 00:17:17,600 --> 00:17:19,440 Speaker 4: that aren't. They getting left behind. What does the labor 344 00:17:19,520 --> 00:17:20,439 Speaker 4: data tell you today? 345 00:17:22,440 --> 00:17:25,840 Speaker 8: The labor data is very much consistent with the rebalancing, 346 00:17:26,240 --> 00:17:30,359 Speaker 8: the moderation. We've seen some big gains in the past 347 00:17:30,400 --> 00:17:33,320 Speaker 8: that just frankly weren't sustainable. I mean, we've been great 348 00:17:33,320 --> 00:17:35,960 Speaker 8: if they were sustainable, but we're we are If you 349 00:17:36,000 --> 00:17:38,439 Speaker 8: look at the three month pace, you know with the 350 00:17:38,440 --> 00:17:42,040 Speaker 8: payrolls that we got about one eighty which is pretty 351 00:17:42,040 --> 00:17:45,720 Speaker 8: close to where we were running before the pandemic those years, 352 00:17:45,760 --> 00:17:49,119 Speaker 8: and that was a really good expansion. So we you 353 00:17:49,160 --> 00:17:52,760 Speaker 8: know where to solid place. Absolutely always there are people 354 00:17:52,840 --> 00:17:54,840 Speaker 8: left behind in the United States, Like that's a whole 355 00:17:54,840 --> 00:17:59,159 Speaker 8: other conversation. And yet we do still see the consumer 356 00:17:59,280 --> 00:18:02,359 Speaker 8: out thereby. They're not happy campers with what they're having 357 00:18:02,400 --> 00:18:07,199 Speaker 8: to pay, and yet inflation adjusted, you keep seeing the consumers. Now, 358 00:18:07,760 --> 00:18:09,719 Speaker 8: if we lose the labor market, like if we go 359 00:18:09,800 --> 00:18:13,240 Speaker 8: past moderation into something that's really weak, we are going 360 00:18:13,280 --> 00:18:16,520 Speaker 8: to lose the consumers and then we're lost. 361 00:18:17,080 --> 00:18:18,960 Speaker 2: I want to wrap this up in in the next 362 00:18:18,960 --> 00:18:21,000 Speaker 2: three or four minutes with a good response for both 363 00:18:21,040 --> 00:18:24,240 Speaker 2: doctors Andy and doctor Sam here on Jobs Day again 364 00:18:24,280 --> 00:18:28,200 Speaker 2: across America. Futures up fifty eight down, futures up five hundred, 365 00:18:28,520 --> 00:18:33,000 Speaker 2: yields lower yields, price up, Mark s Andy, let me 366 00:18:33,040 --> 00:18:36,760 Speaker 2: go to you first, which in you mentioned the harmonized CPI, 367 00:18:36,880 --> 00:18:40,240 Speaker 2: which Jason Furman I believe talks up as well at Harvard. 368 00:18:40,720 --> 00:18:43,240 Speaker 2: We're going to have a CPI report come out. Do 369 00:18:43,359 --> 00:18:48,920 Speaker 2: those numbers. Is inflation countable anymore? Or is Jerome Powell, 370 00:18:49,040 --> 00:18:53,120 Speaker 2: Mark Xandy and John Tucker? Are we flying blind when 371 00:18:53,160 --> 00:18:54,080 Speaker 2: we look at inflation? 372 00:18:54,200 --> 00:18:56,200 Speaker 3: How to measure it well? 373 00:18:56,520 --> 00:18:57,240 Speaker 7: Month to month? 374 00:18:57,600 --> 00:18:59,200 Speaker 6: You know, it's hard to put a lot of stock 375 00:18:59,280 --> 00:19:01,639 Speaker 6: in the I mean, because they're up and down and 376 00:19:01,680 --> 00:19:03,679 Speaker 6: all around the you know, like any economic data day 377 00:19:03,760 --> 00:19:04,960 Speaker 6: zig and they zag, and there's. 378 00:19:04,840 --> 00:19:06,240 Speaker 7: All kinds of measurement issues. 379 00:19:06,280 --> 00:19:10,080 Speaker 6: And you know, especially in this environment, in this period, 380 00:19:10,119 --> 00:19:13,359 Speaker 6: because we're post pandemic and seasonal adjustments very hard. We've 381 00:19:13,359 --> 00:19:16,399 Speaker 6: got residual effects of the pandemic, but you know, the 382 00:19:16,480 --> 00:19:19,000 Speaker 6: broader trends. Yeah, you know, I think we've got a 383 00:19:19,000 --> 00:19:20,640 Speaker 6: pretty good ground. I mean, just take a step, take 384 00:19:20,680 --> 00:19:23,720 Speaker 6: a chart to the CPI or the core consumer Expenditis 385 00:19:23,720 --> 00:19:27,200 Speaker 6: inflator for the last you know, ten years. You can 386 00:19:27,359 --> 00:19:30,760 Speaker 6: clearly see, you know, what's going on. Pre pandemic, we 387 00:19:30,760 --> 00:19:34,640 Speaker 6: were suboptimal inflation, too low the pandemic. Then we had 388 00:19:34,680 --> 00:19:37,640 Speaker 6: the Russian War and we were high inflation. Now we're 389 00:19:37,680 --> 00:19:40,639 Speaker 6: coming in. We're not quite backtoryt We're pretty close that 390 00:19:40,920 --> 00:19:44,560 Speaker 6: general kind of trajectory path that that's reality. 391 00:19:44,640 --> 00:19:45,680 Speaker 7: Feel pretty good about. 392 00:19:45,520 --> 00:19:48,360 Speaker 2: It, Claudia, You were at Michigan where they basically invented 393 00:19:48,440 --> 00:19:51,800 Speaker 2: inflate the study of inflation in the modern study as well, 394 00:19:51,840 --> 00:19:56,040 Speaker 2: which inflation statistic series rather do you use doctor some. 395 00:19:58,119 --> 00:20:00,520 Speaker 8: I think at this point I just I gotta look 396 00:20:00,520 --> 00:20:03,480 Speaker 8: at CPI like everybody else. Now, I will say, I 397 00:20:03,840 --> 00:20:06,520 Speaker 8: think it is very important to go into the guts 398 00:20:06,520 --> 00:20:09,560 Speaker 8: of the CPI. The FED does that too. They look 399 00:20:09,600 --> 00:20:12,880 Speaker 8: at every shred of data in there, and there are 400 00:20:13,080 --> 00:20:16,480 Speaker 8: very unusual factors in this cycle that all go back 401 00:20:16,480 --> 00:20:19,000 Speaker 8: to COVID, and I can still see echoes of COVID 402 00:20:19,040 --> 00:20:22,160 Speaker 8: in there. So I think that's an important piece. But honestly, 403 00:20:22,200 --> 00:20:24,480 Speaker 8: the CPI of the FED wants is the July one, 404 00:20:24,520 --> 00:20:27,280 Speaker 8: the September one. Like, we are just not good at 405 00:20:27,280 --> 00:20:30,479 Speaker 8: forecasting CPI, and that's so the best we can do 406 00:20:30,600 --> 00:20:33,000 Speaker 8: is really look under the hood and sift through all 407 00:20:33,000 --> 00:20:34,800 Speaker 8: the details and see what's in there. 408 00:20:35,280 --> 00:20:36,960 Speaker 4: I guess one of the thoughts here is just kind 409 00:20:36,960 --> 00:20:38,840 Speaker 4: of how do you think our good friends at the 410 00:20:38,840 --> 00:20:43,440 Speaker 4: Federal Reserver kind of taking in all this data here 411 00:20:43,520 --> 00:20:44,400 Speaker 4: is because you see. 412 00:20:44,240 --> 00:20:46,800 Speaker 2: Sandy as president of the Philadelphia Fed. 413 00:20:47,119 --> 00:20:48,720 Speaker 4: Absolutely, I mean it's almost. 414 00:20:51,119 --> 00:20:53,800 Speaker 7: I'm very tom, I'm very happy at my job. 415 00:20:53,840 --> 00:20:57,720 Speaker 6: I got the best, literally the best job on the planet. 416 00:20:58,080 --> 00:20:58,359 Speaker 3: All right. 417 00:20:58,400 --> 00:21:00,000 Speaker 4: So, Mark, so, how do you think our good friends 418 00:21:00,040 --> 00:21:02,680 Speaker 4: at the FEDER kind of digesting this morning's data. 419 00:21:04,280 --> 00:21:08,480 Speaker 6: I'm sure they're enjoying their coffee and cereal and begs benic. 420 00:21:09,280 --> 00:21:12,000 Speaker 6: This has got to feel really good. I mean, it's 421 00:21:12,119 --> 00:21:14,240 Speaker 6: you know, the economy is moving in the right direction. 422 00:21:14,720 --> 00:21:17,000 Speaker 6: They just need a little cooperation with the inflation numbers 423 00:21:17,040 --> 00:21:19,320 Speaker 6: and they'll get I you know, I forecast lots of stuff, 424 00:21:19,880 --> 00:21:23,480 Speaker 6: and I some of the stuff I'm confident in some forecasts. 425 00:21:23,480 --> 00:21:23,800 Speaker 7: I'm not. 426 00:21:23,920 --> 00:21:28,199 Speaker 6: I am quite confident that inflation's coming in. Will you know, 427 00:21:28,280 --> 00:21:30,760 Speaker 6: we'll be back within spitting distance of the target here 428 00:21:31,280 --> 00:21:33,560 Speaker 6: in the note the future. Maybe on a year of 429 00:21:33,600 --> 00:21:36,000 Speaker 6: your basis, maybe I'll take you know, this time next year. 430 00:21:36,040 --> 00:21:37,920 Speaker 6: But I don't think they need to do that before 431 00:21:37,920 --> 00:21:38,920 Speaker 6: they start cutting guys. 432 00:21:38,920 --> 00:21:39,600 Speaker 3: Take a memo. 433 00:21:40,119 --> 00:21:43,560 Speaker 2: This really worked, Claudia some thank you so much for 434 00:21:43,640 --> 00:21:47,040 Speaker 2: joining us today with Mark Sandy at Claudia Sam with 435 00:21:47,119 --> 00:21:50,280 Speaker 2: new centry doctor Sandy with Moody's analytical course, and we 436 00:21:50,359 --> 00:21:52,320 Speaker 2: look forward to seeing him the. 437 00:22:04,640 --> 00:22:06,120 Speaker 3: You ja look at the front pages. 438 00:22:06,200 --> 00:22:09,800 Speaker 2: Not with Lisa Matteo, John Tucker with the headlines, what do. 439 00:22:09,720 --> 00:22:12,600 Speaker 1: You I feel we've given kind of short at least 440 00:22:12,600 --> 00:22:13,959 Speaker 1: I have short trip to this. 441 00:22:14,080 --> 00:22:16,200 Speaker 4: I three. I was just just thinking that I was 442 00:22:16,240 --> 00:22:17,080 Speaker 4: re reading the story. 443 00:22:17,160 --> 00:22:21,040 Speaker 1: Yeah, the most significant anti trust trial in the past 444 00:22:21,160 --> 00:22:24,440 Speaker 1: quarter century. You know, it's wrapping up in Washington. They 445 00:22:24,440 --> 00:22:29,720 Speaker 1: did closing arguments, began hearing closing arguments yesterday after the 446 00:22:29,760 --> 00:22:33,560 Speaker 1: ten week trial. The DOJ of course, accusing a Google 447 00:22:33,760 --> 00:22:37,960 Speaker 1: of suppressing search rivals by paying tens of billions dollars 448 00:22:38,000 --> 00:22:41,919 Speaker 1: a year for anti competitive agreements with the wireless carriers, 449 00:22:42,000 --> 00:22:45,720 Speaker 1: with the browser developers, and device manufacturers. And they also 450 00:22:45,840 --> 00:22:48,280 Speaker 1: they unsealed some of the court documents this week, so 451 00:22:48,320 --> 00:22:51,200 Speaker 1: we got to look at what they've been paying Apple 452 00:22:51,600 --> 00:22:55,520 Speaker 1: twenty billion dollars in twenty twenty two Alan to be 453 00:22:55,600 --> 00:22:58,840 Speaker 1: the default search engine on iPhone as well as the 454 00:22:58,840 --> 00:23:02,560 Speaker 1: Safari browser. Google, for its part, argue is competition and 455 00:23:02,640 --> 00:23:05,240 Speaker 1: search have never been more varied or significant. 456 00:23:05,960 --> 00:23:08,840 Speaker 4: What's the quick Well, here's the bottle I'm reading. I'm 457 00:23:08,840 --> 00:23:12,920 Speaker 4: reading the Bloomberg reporting on this. If they find that, 458 00:23:13,359 --> 00:23:16,399 Speaker 4: if the Justice parmer finds that broken anti trust laws, 459 00:23:16,520 --> 00:23:19,159 Speaker 4: in theory, they could break up the company and The 460 00:23:19,240 --> 00:23:21,960 Speaker 4: last major breakup of a US company was eighteen to 461 00:23:22,000 --> 00:23:24,680 Speaker 4: feter back in nineteen eighty four. That's the level we're 462 00:23:24,680 --> 00:23:26,800 Speaker 4: talking about. I need to get a legal mind on 463 00:23:26,840 --> 00:23:28,760 Speaker 4: this to say, hey, where's this going to shake out here? 464 00:23:28,880 --> 00:23:32,480 Speaker 1: Jennifer Rae from Bloomberg Intelligence, what is they doing wrong? 465 00:23:32,600 --> 00:23:35,280 Speaker 2: That's what I don't get. They pay them. 466 00:23:35,760 --> 00:23:36,840 Speaker 3: So the search. 467 00:23:36,560 --> 00:23:39,320 Speaker 2: Engines Google, which we all use every day day, what 468 00:23:39,359 --> 00:23:39,879 Speaker 2: are they going to do? 469 00:23:40,000 --> 00:23:44,800 Speaker 3: Give us bing? Let's hope not being a work on 470 00:23:44,840 --> 00:23:45,280 Speaker 3: your blood. 471 00:23:45,320 --> 00:23:47,440 Speaker 1: You should have been a witness for this. 472 00:23:47,520 --> 00:23:50,760 Speaker 3: I should have been a witness. We need bing next. 473 00:23:51,080 --> 00:23:54,919 Speaker 1: Let's do this Washington Post story. This is focusing on 474 00:23:55,160 --> 00:23:59,440 Speaker 1: Ukrainian men. Now, we heard recently about Rush's use chemical weapons, 475 00:24:00,359 --> 00:24:04,879 Speaker 1: but Ukraine desperate for soldiers, according to this report, to 476 00:24:04,920 --> 00:24:10,240 Speaker 1: reinforce the crumbling defenses, Ukrainian embassies have now temporarily suspended 477 00:24:10,280 --> 00:24:14,320 Speaker 1: consular services for fighting age men, so it places new 478 00:24:14,359 --> 00:24:17,960 Speaker 1: pressure on them to go home to fight. The Suspension 479 00:24:17,960 --> 00:24:22,520 Speaker 1: of citizen services this is like passport renewals. It's intended 480 00:24:22,560 --> 00:24:26,600 Speaker 1: as a preliminary step to a new mobilization law that 481 00:24:26,640 --> 00:24:30,240 Speaker 1: goes into effect May eighteenth. It does require all men 482 00:24:30,280 --> 00:24:33,840 Speaker 1: ages eighteen to sixty to update their personal information with 483 00:24:33,960 --> 00:24:37,199 Speaker 1: a local draft office within sixty days. 484 00:24:37,200 --> 00:24:38,200 Speaker 4: Eighteen sixty. 485 00:24:38,520 --> 00:24:42,560 Speaker 1: Yeah, there is martial law there prohibits men ages eighteen 486 00:24:42,560 --> 00:24:44,760 Speaker 1: to sixty from leaving the country. But a lot of 487 00:24:44,760 --> 00:24:46,560 Speaker 1: men who are afraid of being sent to the front, 488 00:24:47,440 --> 00:24:52,520 Speaker 1: they already fled. So that's that story. Fascinating read on 489 00:24:52,520 --> 00:24:54,760 Speaker 1: the Bloomberg this morning about the father and son duo 490 00:24:55,119 --> 00:24:59,760 Speaker 1: behind Carvana and the drive toward riches. We're talking about 491 00:25:00,119 --> 00:25:05,000 Speaker 1: Garcia the second and Earning Garcia the third. They've added 492 00:25:05,040 --> 00:25:07,560 Speaker 1: more than eleven billion dollars in their combined net worth 493 00:25:07,640 --> 00:25:11,399 Speaker 1: since December of twenty twenty two. That's when Carvana stock 494 00:25:11,480 --> 00:25:13,879 Speaker 1: fell below four dollars a share the company was forced 495 00:25:13,920 --> 00:25:17,840 Speaker 1: to restructure debt. That was then, This is now, the 496 00:25:17,880 --> 00:25:21,600 Speaker 1: shares jumping thirty four percent yesterday to the highest end 497 00:25:21,680 --> 00:25:24,800 Speaker 1: more than two years. The company reported the course stronger 498 00:25:24,840 --> 00:25:28,840 Speaker 1: first quarter earnings revenue atopic analyst expectations. That one day 499 00:25:28,920 --> 00:25:33,120 Speaker 1: surge pushed the older Garcia's fortune to ten point nine 500 00:25:33,160 --> 00:25:37,879 Speaker 1: billion dollars. His son's networth climbed to three point eight billion. 501 00:25:37,960 --> 00:25:40,880 Speaker 4: Guess is on the board here? A name from the past, Oh, 502 00:25:41,000 --> 00:25:41,719 Speaker 4: dan Quail. 503 00:25:42,160 --> 00:25:44,600 Speaker 1: Oh wow, yeah, I did not know. 504 00:25:44,720 --> 00:25:47,440 Speaker 2: They're not going to do one hundred billion dollars share buyback. 505 00:25:47,520 --> 00:25:51,680 Speaker 2: Their EBITDA margin is five cents on the dollar, and 506 00:25:52,119 --> 00:25:56,400 Speaker 2: their free cash flow is just now turning positive. 507 00:25:56,680 --> 00:25:59,120 Speaker 1: H I'll give him that, but they still have six 508 00:25:59,160 --> 00:25:59,760 Speaker 1: billion dollars. 509 00:26:00,560 --> 00:26:03,560 Speaker 2: Have you afraid to ask John Tucker? 510 00:26:03,640 --> 00:26:05,520 Speaker 3: Have you used Carvana? Good lord? 511 00:26:05,640 --> 00:26:09,840 Speaker 4: No, this stock peaked pandemic peak when you know you 512 00:26:09,840 --> 00:26:14,280 Speaker 4: couldn't get a car anywhere. In August, it's twenty one 513 00:26:14,320 --> 00:26:18,120 Speaker 4: at three and sixty dollars, and then it went down 514 00:26:18,160 --> 00:26:21,679 Speaker 4: to literally in December of twenty two to five dollars, 515 00:26:21,760 --> 00:26:23,720 Speaker 4: three sixty to five, and here we are back at 516 00:26:23,720 --> 00:26:25,080 Speaker 4: one sixty. 517 00:26:26,320 --> 00:26:27,480 Speaker 3: She mortgaged one of the kids. 518 00:26:27,840 --> 00:26:30,120 Speaker 1: Let's do this one from Politica A couple more here. 519 00:26:30,880 --> 00:26:34,080 Speaker 1: All right, So you're an aspiring politician. You're a politician. 520 00:26:34,119 --> 00:26:36,159 Speaker 1: You want to go even higher. So you write a 521 00:26:36,160 --> 00:26:38,880 Speaker 1: book and tell everybody how you shot your dog. Oh boy, 522 00:26:39,000 --> 00:26:43,399 Speaker 1: go figure. Christy Nolmes damage control tour in full swing, 523 00:26:43,440 --> 00:26:46,600 Speaker 1: appears destined for the same fate as her late dog, Cricket. 524 00:26:47,200 --> 00:26:49,119 Speaker 1: She of course says in her new books she shot 525 00:26:49,160 --> 00:26:53,040 Speaker 1: bad behaving cricket, and then that the reason she did this, 526 00:26:53,600 --> 00:26:56,600 Speaker 1: she thought it would show voters and everybody that she 527 00:26:57,200 --> 00:26:59,880 Speaker 1: was the type who could make a tough decision like that. 528 00:27:00,640 --> 00:27:03,399 Speaker 1: But at mar A Lago, even before the revelation at 529 00:27:03,440 --> 00:27:06,800 Speaker 1: about our Dog, Politico says Nome had long ago been 530 00:27:06,880 --> 00:27:10,480 Speaker 1: cast aside as a likely running mate. That's according to 531 00:27:10,520 --> 00:27:11,760 Speaker 1: six people close. 532 00:27:12,119 --> 00:27:15,159 Speaker 2: Can you have a pee from a state with three 533 00:27:15,320 --> 00:27:16,280 Speaker 2: electoral votes? 534 00:27:16,400 --> 00:27:17,440 Speaker 4: Yep, South Dakota. 535 00:27:17,640 --> 00:27:19,840 Speaker 3: I'm looking. I'm making the number up. 536 00:27:19,840 --> 00:27:22,800 Speaker 4: I'm looking on the bioscreen on the Bloomberg criminal for 537 00:27:23,119 --> 00:27:28,280 Speaker 4: Christy Lin Arnold Nome, the governor of South Dakota. Hobbies hunting. 538 00:27:28,320 --> 00:27:29,240 Speaker 3: That's how you get looked at. 539 00:27:29,160 --> 00:27:29,480 Speaker 5: It, Hunt. 540 00:27:31,240 --> 00:27:33,840 Speaker 1: Let's finish up real quick with the journal. Decades ago, 541 00:27:33,880 --> 00:27:36,560 Speaker 1: if you asked Americans who en visited a Wall Street commuter, 542 00:27:37,320 --> 00:27:40,639 Speaker 1: you picture a guy like Paul Man in a dapper 543 00:27:40,640 --> 00:27:43,560 Speaker 1: three piece suit reading the paper on the train from Connecticut. 544 00:27:43,800 --> 00:27:46,640 Speaker 1: But if you visit corporate offices today, you'd be forgiven 545 00:27:46,680 --> 00:27:49,119 Speaker 1: for thinking the mail execs had hiked in from a 546 00:27:49,320 --> 00:27:50,200 Speaker 1: yoga studio. 547 00:27:50,600 --> 00:27:52,760 Speaker 3: Damian Sassar has got it done. 548 00:27:53,119 --> 00:27:55,240 Speaker 1: He's in the office to this is a much mean, 549 00:27:55,440 --> 00:27:59,879 Speaker 1: financed pro uniform addressing is if challenging your spouse to 550 00:28:00,160 --> 00:28:03,880 Speaker 1: remain faithful. So they talked to a couple of personal stylists. 551 00:28:04,040 --> 00:28:06,480 Speaker 1: They said a lot of men are over invested in 552 00:28:06,520 --> 00:28:11,320 Speaker 1: closing hybrid tech fabrics that straddle exercise and office attire. 553 00:28:11,600 --> 00:28:13,720 Speaker 3: So John Tucker, thank you so much. 554 00:28:13,760 --> 00:28:18,080 Speaker 2: For brothers, Yes, Danian Sasa or look, John Tucker, thank 555 00:28:18,119 --> 00:28:18,600 Speaker 2: you so much. 556 00:28:18,680 --> 00:28:20,520 Speaker 3: The newspapers as well. 557 00:28:20,960 --> 00:28:24,200 Speaker 2: This is a Bloomberg Surveillance podcast, bringing you the best 558 00:28:24,200 --> 00:28:28,960 Speaker 2: in economics, finance, investment, and international relations. You can also 559 00:28:29,040 --> 00:28:31,119 Speaker 2: watch the show live on YouTube. 560 00:28:31,440 --> 00:28:32,959 Speaker 3: Visit the Bloomberg. 561 00:28:32,520 --> 00:28:37,040 Speaker 2: Podcast channel on YouTube to see the show weekday mornings 562 00:28:37,040 --> 00:28:40,440 Speaker 2: from seven to ten am Eastern from our global headquarters 563 00:28:40,440 --> 00:28:44,320 Speaker 2: in New York City. Subscribe to the podcast on Apple, Spotify, 564 00:28:44,680 --> 00:28:48,240 Speaker 2: or anywhere else you listen, and always on Bloomberg Radio, 565 00:28:48,400 --> 00:28:49,000 Speaker 2: the Bloomberg 566 00:28:49,120 --> 00:28:51,600 Speaker 3: Terminal, and the Bloomberg Business app.