WEBVTT - Stocks Rise at Start of Week as Nvidia, Data Await 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:21.240 on Apple car Play or Android Auto with the Bloomberg 0:00:21.320 --> 0:00:24.799 Business App. Listen on demand wherever you get your podcasts, 0:00:25.280 --> 0:00:27.000 or watch us live on YouTube. 0:00:27.200 --> 0:00:29.720 Michael Purvis joins us now from tall back end, is 0:00:29.760 --> 0:00:32.839 your narrative a bullmarket? I mean, my head is spinning. 0:00:33.080 --> 0:00:35.800 I got copious number of people, a lot of seven 0:00:35.840 --> 0:00:39.840 thousand plus SPX and others thinking the world's gonna add Yeah. 0:00:39.880 --> 0:00:41.560 Look, I mean if you step back for a second 0:00:41.560 --> 0:00:43.920 and you think about we have some level of fiscal 0:00:43.960 --> 0:00:49.959 stimulus through a big beautiful bill, offset admittedly by tariffs, 0:00:50.159 --> 0:00:53.159 you have the concurrence of that with monetary stimulus. And 0:00:53.200 --> 0:00:57.440 I'm sorry, even if we get a Powell era type 0:00:57.480 --> 0:01:00.240 cutting cycle, it's still a cutting cycle into four point 0:01:00.280 --> 0:01:04.040 three percent unemployment and three percent plus GDP and three 0:01:04.040 --> 0:01:07.800 percent inflation. Uh there, And then you have the this 0:01:08.080 --> 0:01:11.800 I call it alternative fiscal stimulus through this AI cap 0:01:11.920 --> 0:01:15.400 X boom, which is you know, which is just almost 0:01:15.520 --> 0:01:18.200 almost you know, you know, just from the from from 0:01:18.280 --> 0:01:21.679 four companies, you're talking about seven hundred billion dollars. 0:01:21.280 --> 0:01:23.640 Over the next twenty four months. That's where they're guiding 0:01:23.640 --> 0:01:25.199 the street to. You know, those are the big guys, 0:01:25.240 --> 0:01:29.480 Microsoft and Amazon, et cetera. So so look, that's a 0:01:29.680 --> 0:01:30.880 that's a macro setup. 0:01:30.880 --> 0:01:33.080 I think the question we're all waiting for is ken 0:01:33.080 --> 0:01:36.240 earnings continued to deliver in an age where the k 0:01:36.959 --> 0:01:40.360 economy is getting worse and also where you know, some 0:01:40.440 --> 0:01:45.720 of these residual risks like tariffs hitting margins and or 0:01:45.760 --> 0:01:49.200 the consumer you know, are starting, you know, likely to. 0:01:49.160 --> 0:01:50.160 Persist and creep in. 0:01:50.320 --> 0:01:53.880 So far, you know that dance has worked right, and 0:01:53.920 --> 0:01:56.919 it's hard to find a lot of broader evidence that 0:01:56.920 --> 0:01:59.680 that it's going to look suddenly fall apart anytime soon. 0:01:59.840 --> 0:02:01.840 But I think, I think, you know, that's that's really 0:02:01.920 --> 0:02:04.400 the tension as we talk you know, into as we 0:02:04.440 --> 0:02:07.040 had into twenty twenty six, that's really where the tension is. 0:02:07.240 --> 0:02:09.280 The macro setup is really really strong. 0:02:09.960 --> 0:02:11.800 One point I'm just going to make you know, Paul, 0:02:11.800 --> 0:02:14.799 you and I were talking about the nineties, Yeah, offline, 0:02:14.840 --> 0:02:17.440 but one thing we had in the in the in 0:02:17.480 --> 0:02:19.720 the in the mid and late nineties is you know, 0:02:19.760 --> 0:02:22.720 you have this sort of persistent you know inflation not 0:02:22.760 --> 0:02:25.600 getting to the fenced target, and you had, you know, 0:02:25.680 --> 0:02:26.799 a good economic condition. 0:02:26.880 --> 0:02:28.480 They're One thing that's different. 0:02:28.200 --> 0:02:31.520 Now is that you know, we have arguably, you know, 0:02:31.600 --> 0:02:35.720 a refreshed cutting cycle here here, and you didn't, you know, 0:02:35.800 --> 0:02:37.839 you had what the FED was sort of tweaking back 0:02:38.160 --> 0:02:40.520 and much of the of the last few years of 0:02:40.520 --> 0:02:44.440 the nineteen nineties. If we get a it doesn't seem 0:02:44.480 --> 0:02:46.200 to right now based on some of the FED messaging, 0:02:46.240 --> 0:02:49.880 but if we do get you know, sort of a 0:02:49.919 --> 0:02:54.600 refreshed FED and a refreshed sort of cutting narrative with 0:02:54.680 --> 0:02:57.079 this type of economic data, that is going to be 0:02:57.120 --> 0:03:00.519 a really interesting period unfolding. 0:03:01.400 --> 0:03:03.919 So what do you think about volatility here? We have 0:03:03.960 --> 0:03:06.200 a VIX sitting right at twenty. Doesn't seem to get 0:03:06.240 --> 0:03:10.320 anybody's attention too much, but it's certainly not you know, 0:03:10.360 --> 0:03:12.320 fourteen or fifteen on the VIX here. 0:03:12.960 --> 0:03:15.000 What do you see in terms of volatility? Yeah, look, 0:03:15.040 --> 0:03:17.320 you know, the VIX has been sort of it's sort 0:03:17.320 --> 0:03:18.079 of been interesting. 0:03:18.120 --> 0:03:20.200 You know, we never really got down to those eleven 0:03:20.200 --> 0:03:23.360 and twelves that you normally associate with a with a strong. 0:03:23.440 --> 0:03:24.320 Bull market here. 0:03:25.760 --> 0:03:27.320 Part of that was that, you know, you had the 0:03:27.400 --> 0:03:30.040 right tail of the of the VIX call buying kind 0:03:30.040 --> 0:03:33.200 of you know, support the VIX. Yeah, for most of 0:03:33.240 --> 0:03:37.040 the time you had a pretty robust volatility risk premium. 0:03:37.040 --> 0:03:39.320 That's the spread in my mind of the VIX to 0:03:39.560 --> 0:03:41.440 realize volatility. 0:03:42.360 --> 0:03:42.600 There. 0:03:43.240 --> 0:03:44.920 And you know, just over the last week or so, 0:03:45.000 --> 0:03:47.280 you saw this sort of like you know, like you know, 0:03:47.360 --> 0:03:50.520 sort of push above twenty two and then quickly fade 0:03:50.520 --> 0:03:53.040 those levels here. So I look at it right now, 0:03:53.200 --> 0:03:56.120 look skew, I meaning the difference between puts and calls. 0:03:57.080 --> 0:03:59.640 The implied volatility for those are you know, that's been 0:03:59.680 --> 0:04:02.560 really getting higher here, you know, thanks a little bit 0:04:02.560 --> 0:04:05.040 to some of the volatility we saw last week. That's 0:04:05.080 --> 0:04:09.040 healthy there. If if the everything else stuff performs, we 0:04:09.040 --> 0:04:12.280 don't get any real horrible news in two years end, 0:04:12.400 --> 0:04:14.720 that's going to help reinforce I think a sprint into 0:04:14.760 --> 0:04:17.320 the finish line, you know, maybe another one to two 0:04:17.360 --> 0:04:19.240 hundred points higher in the S and P if. 0:04:19.200 --> 0:04:22.360 The stock market gets on front. You've got a franchise 0:04:22.400 --> 0:04:24.600 on this. You've been really good on this cross asset 0:04:24.640 --> 0:04:28.200 of looking out. If the stock market is doing what 0:04:28.240 --> 0:04:30.920 it's doing, is it's simply modeling out we're going to 0:04:31.000 --> 0:04:33.280 get the economic data, and this is what it's going 0:04:33.320 --> 0:04:36.800 to signal, is a market banking a bet on all 0:04:36.800 --> 0:04:38.760 that delayed economic data right now? 0:04:39.720 --> 0:04:42.920 Well, yeah, there's a there's a little bit of sort 0:04:42.920 --> 0:04:44.440 of you know, the markets are trying to sort of 0:04:44.520 --> 0:04:48.400 vibe their way through without this, without this data that 0:04:48.520 --> 0:04:49.120 we're getting. 0:04:49.240 --> 0:04:51.280 Whoa Lisa, Lisa. 0:04:51.040 --> 0:04:54.520 Is Michael Purvis young enough to say vibe your way through? 0:04:54.920 --> 0:04:57.800 Yes, okay, thank you, thank you, But I have a 0:04:57.800 --> 0:05:01.000 lot of children. Sound they keep you form. 0:05:01.279 --> 0:05:05.080 But the the you know, right, whatever print we get 0:05:05.080 --> 0:05:10.159 on Thursday on jobs, you know, we will arguably Nvidia 0:05:10.160 --> 0:05:12.039 will be a lot more instructive in terms of where 0:05:12.040 --> 0:05:13.560 the market is going to go than whatever the job 0:05:13.600 --> 0:05:15.760 The jobs data if it's fifty thousand or minus fifty 0:05:15.800 --> 0:05:17.440 thousand or one hundred and twenty thousand, like it all 0:05:17.480 --> 0:05:20.320 comes with a lot of footnotes, right, So so we'll 0:05:20.360 --> 0:05:22.200 have to probably need a couple of months for that 0:05:22.320 --> 0:05:23.840 to sort of self out. But Tom, I think you're 0:05:23.880 --> 0:05:27.240 touching on a broader question, which is can some of 0:05:27.240 --> 0:05:29.440 the jobs data get back, can some of the economic 0:05:29.520 --> 0:05:33.960 data be bad? And can the AI narrative, the AI 0:05:34.040 --> 0:05:37.240 empowered stock market if you will, can that keep going higher? 0:05:37.320 --> 0:05:37.480 Right? 0:05:37.560 --> 0:05:38.960 I mean one of the things I like to say 0:05:39.040 --> 0:05:41.680 is that Microsoft's mandate is to scale earnings, not to 0:05:41.720 --> 0:05:47.640 scale employees, right, so I think that will. You know, arguably, 0:05:47.680 --> 0:05:50.840 the main Street Wall Street disconnect may even get worse 0:05:51.320 --> 0:05:53.240 than an era of AI, and I think that's something 0:05:53.279 --> 0:05:55.599 to be watching for right now. If you're getting job 0:05:55.640 --> 0:05:58.919 losses because every company is just you know, is just 0:05:59.040 --> 0:06:01.480 falling apart, and then DAT is horrible, that's different. But 0:06:02.640 --> 0:06:06.400 right now you've got a very compelling sort of tech 0:06:06.440 --> 0:06:07.040 bull market. 0:06:07.160 --> 0:06:09.560 Michael Purvis with us for an extended discussion to get 0:06:09.640 --> 0:06:12.560 your market week going, as well as he mentions in 0:06:12.680 --> 0:06:16.920 video reports this week, lots of retail as well. This 0:06:17.000 --> 0:06:21.159 is a surveillance across America. Glenna Hubbard will be with 0:06:21.279 --> 0:06:25.359 us a really important important interview on the FED and 0:06:25.400 --> 0:06:28.960 the path forward from Professor Hubbard of Columbia Business School. 0:06:29.240 --> 0:06:30.320 He is the most. 0:06:30.080 --> 0:06:33.800 Intelligent supply side guy I know. Thrilled to have him on. 0:06:34.200 --> 0:06:36.240 In the nine o'clock hour, we say good morning to 0:06:36.279 --> 0:06:40.039 the United Kingdom. Sir Howard Stringer will join us and 0:06:40.080 --> 0:06:42.080 Paul and I decided, I mean, we could go how 0:06:42.080 --> 0:06:44.640 many hours, could Google three hours. 0:06:44.760 --> 0:06:48.040 He had so many careers, Sir Howard CBS exactly. 0:06:48.120 --> 0:06:50.880 Okay, should Letterman have been allowed to retire? You know 0:06:50.960 --> 0:06:53.039 that kind of thing. No, We're going to talk to 0:06:53.080 --> 0:06:56.799 Sir Howard Stringer about what's going on with the BBC 0:06:57.200 --> 0:07:00.080 in the United Kingdom. I can't say enough about the 0:07:00.080 --> 0:07:01.240 timeliness of that. 0:07:01.320 --> 0:07:04.880 Paul Sweeney with Michael Purpose Michael, in terms of derivatives, 0:07:04.920 --> 0:07:06.480 here are. 0:07:06.920 --> 0:07:10.760 Are clients looking to buy risk? Are they buying protection? Here? 0:07:10.800 --> 0:07:11.280 More or less? 0:07:11.560 --> 0:07:13.720 Well, it was a lot of the former, a lot 0:07:13.760 --> 0:07:16.480 of the upside call buying, you know, that was you 0:07:16.480 --> 0:07:19.880 know into the sort of September or October peak there 0:07:20.280 --> 0:07:24.040 that has shifted on balance, like I think, I think 0:07:24.040 --> 0:07:27.880 there's stull seems to be the retail bid for risk 0:07:27.960 --> 0:07:31.400 has not completely evaporated here, It's gotten you know, sort 0:07:31.440 --> 0:07:33.480 of you know, kicked it ahead a little bit over 0:07:33.520 --> 0:07:35.560 the last few weeks there. You know, you can see 0:07:35.560 --> 0:07:38.080 this with with with various stock training pairs. You know, 0:07:38.120 --> 0:07:39.840 if you look at like you know, in the in 0:07:39.880 --> 0:07:44.240 the nuclear uranium space, you look at sort of established 0:07:44.280 --> 0:07:48.760 companies with real cash flows like a Chemico relative to 0:07:49.120 --> 0:07:51.880 say an oaklow which had a twenty billion dollar market 0:07:51.960 --> 0:07:55.760 cap out of you know nowhere and and had zero revenues. Right, So, 0:07:55.760 --> 0:07:59.240 so I think what's happening here in the in the 0:07:59.280 --> 0:08:02.720 market here is that risk is stole on. But there's 0:08:02.760 --> 0:08:05.000 a lot of clean right so there's a lot of 0:08:05.040 --> 0:08:06.640 people sort of I don't think a lot of people 0:08:06.680 --> 0:08:08.920 are going to want to end the year with massively 0:08:09.000 --> 0:08:12.040 long a lot of very speculative names. 0:08:12.080 --> 0:08:14.880 We run up, you know, three hundred percent in nine months, Paul. 0:08:15.520 --> 0:08:17.280 First thing I did when I came in, I did 0:08:17.280 --> 0:08:20.280 a weekly chart, because that's what Michael Purvios does. I 0:08:20.280 --> 0:08:23.800 did a weekly chart of Nasdaq futures NASDAQ one hundred. 0:08:24.320 --> 0:08:28.520 We have cratered the maximum drawdown is the negative six 0:08:28.560 --> 0:08:32.880 point seven percent. We've rebounded from that, and we have 0:08:33.120 --> 0:08:36.559 cratered down about four percent from futures times you go 0:08:36.760 --> 0:08:38.280 the anks is ridiculous. 0:08:38.480 --> 0:08:40.120 I mean, it's just absurd, it is. 0:08:40.440 --> 0:08:40.560 So. 0:08:40.800 --> 0:08:46.000 I mean, Michael, what's the conversation you're having with clients today? 0:08:46.120 --> 0:08:49.160 Are they looking to to kind of go long here, 0:08:49.200 --> 0:08:51.080 they're looking to protect what they have, or are they 0:08:51.120 --> 0:08:52.640 just a limp just get me to year end? 0:08:52.679 --> 0:08:53.040 What are they? 0:08:53.320 --> 0:08:56.240 Well, look, I think it depends on on on the 0:08:56.360 --> 0:09:00.640 type of strategy you're running, right, if you've a solid 0:09:00.760 --> 0:09:02.440 if you're a long short hedge fund and you and 0:09:02.480 --> 0:09:07.120 you're you're you're up nicely. Uh. This year, I think 0:09:07.120 --> 0:09:09.480 a lot of them are just going into very conservative mode, 0:09:09.520 --> 0:09:11.920 trying to like lock in their gains and and and 0:09:11.960 --> 0:09:15.280 all that. Some of the other managers I think are 0:09:15.880 --> 0:09:19.719 that are that are you know, longer term and and uh, 0:09:19.960 --> 0:09:22.720 their strategies are you know, not as as as agile 0:09:22.800 --> 0:09:26.080 or fast. They those tend to be you know a 0:09:26.080 --> 0:09:29.480 little bit like sort of cautious, you know, but but 0:09:29.600 --> 0:09:31.320 still sort of structurally constructive. 0:09:31.760 --> 0:09:33.160 Uh uh you know. 0:09:33.440 --> 0:09:35.600 On the markets, I mean there certainly are sort of 0:09:36.160 --> 0:09:40.080 you know, you know, whether it's sort of some more 0:09:40.120 --> 0:09:43.520 hawkish comments from the from from from fed folks, or 0:09:43.559 --> 0:09:45.560 whether it's at some of these credit blow ups they're 0:09:45.559 --> 0:09:47.840 sort of like, wait a second, this this party is 0:09:47.880 --> 0:09:50.080 not you know, the cop the cops are starting. You 0:09:50.080 --> 0:09:51.640 can hear the sirens on the street a little bit. 0:09:51.760 --> 0:09:54.280 The question is how much. And I think that one 0:09:54.320 --> 0:09:58.400 message I'm really trying to explain to my clients is 0:09:58.400 --> 0:10:02.440 that is that this ca shaped economy we're having twenty 0:10:02.520 --> 0:10:06.160 twenty six, maybe a lot more K shaped in the 0:10:06.480 --> 0:10:08.600 within the economy. And I think you have to manage 0:10:08.600 --> 0:10:09.959 portfolios with that in mind. 0:10:10.679 --> 0:10:15.200 Then what do you do if for steroidal case shape. 0:10:15.280 --> 0:10:18.920 Well, I think if you're I think let's let's let's 0:10:18.920 --> 0:10:23.240 look at just sort of income. Well, yeah, there's I 0:10:23.400 --> 0:10:25.439 I think I think there's there's you want to say 0:10:25.440 --> 0:10:27.840 in larger cap companies there, but I think you also 0:10:28.960 --> 0:10:31.599 look I mean, I think if you look at uh, 0:10:31.640 --> 0:10:33.400 you know, we've seen you know, we've all seen these 0:10:34.360 --> 0:10:38.600 things floating around of uh uh uh you know, sub fight, 0:10:38.760 --> 0:10:43.240 sub six fifty fico score, uh. 0:10:41.960 --> 0:10:44.880 Uh, delinquency sort of accelerating and all that. 0:10:45.120 --> 0:10:47.839 If you one of them might big concerns right now 0:10:48.040 --> 0:10:51.840 is that lower income. If you look at the Aleta 0:10:51.880 --> 0:10:55.320 Atlanta Fed's wage tracker, they you know, they split up 0:10:55.320 --> 0:10:59.160 wage growth into income couartiles. The bottom quartile, the people 0:10:59.200 --> 0:11:03.679 making the least money are seeing their wages grow the least, right, 0:11:03.760 --> 0:11:06.839 and they I think are the most vulnerable to seeing 0:11:06.840 --> 0:11:11.559 those wages become a real wages become negative if inflation persists, 0:11:11.559 --> 0:11:13.760 and the and this downward pressure on their wage growth 0:11:13.760 --> 0:11:18.120 happens there and so if you're exposed to any company 0:11:18.160 --> 0:11:22.000 that is that is exposure to that that lower income grow, 0:11:22.320 --> 0:11:24.520 that's going to be something you probably want to avoid. 0:11:25.000 --> 0:11:27.600 Michael Purvis, thank you so much. I got to ask 0:11:27.640 --> 0:11:29.840 you this as we roll up, and what's Thanksgiving? It's 0:11:29.840 --> 0:11:32.520 like the fourth Thursday. Yeah, it's like out there the 0:11:32.600 --> 0:11:35.240 day after. Do you like to do the New Hampshire Thanksgiving? Like, 0:11:35.320 --> 0:11:39.760 are you at the squam Lake Marketplace? Ll being in Philson? 0:11:41.160 --> 0:11:43.120 Are you are holderness? 0:11:43.160 --> 0:11:43.280 Like? 0:11:43.520 --> 0:11:45.200 Do you hang out and have a cigar at the 0:11:45.240 --> 0:11:47.400 Squam Lake Public boat Launch? 0:11:47.800 --> 0:11:49.960 The public boat launch at this start of the year 0:11:50.000 --> 0:11:52.560 is pretty much wrapped up, but the I would say 0:11:52.600 --> 0:11:55.160 that the house gets locked up in October. 0:11:55.640 --> 0:11:59.120 There you lock everything down. Yeah, in October you don't 0:11:59.160 --> 0:12:03.200 go up. You don't. Do you have national geographics old 0:12:03.280 --> 0:12:06.319 national geographics. 0:12:04.480 --> 0:12:06.840 And I'm pretty sure we have a few of those, 0:12:07.720 --> 0:12:10.960 like you know of you know of a scrabble set 0:12:11.080 --> 0:12:14.720 missing seventeen letters or something, but you're still in. 0:12:14.760 --> 0:12:17.360 The parcheesy set in that wind. It just went away. 0:12:18.400 --> 0:12:21.359 This is the first I've said this. Have a wonderful Thanksgiving. 0:12:22.280 --> 0:12:26.600 Stay with us. More from Bloomberg Surveillance coming up after. 0:12:26.320 --> 0:12:37.000 This you're listening to the Bloomberg Surveillance Podcast. Catch US 0:12:37.080 --> 0:12:40.400 Live weekday afternoons from seven to ten am Eastern Listen 0:12:40.440 --> 0:12:44.000 on Apple Karplay and Android Auto with the Bloomberg Business app, 0:12:44.200 --> 0:12:45.880 or watch US live on YouTube. 0:12:46.200 --> 0:12:49.520 Joining us now. And I've really been anticipating missus Glenn 0:12:49.720 --> 0:12:55.520 Hubbard out of Florida with just terrific academics and frankly 0:12:56.280 --> 0:12:59.839 giving energy to Columbia University's business schools. They're dean for 0:13:00.160 --> 0:13:06.000 so long. He's doing different things now. But I'm going 0:13:06.080 --> 0:13:07.760 to cut to the chase or Paul's got lots of 0:13:07.800 --> 0:13:13.720 FED questions. Glenn, I am absolutely thunderstruck and crushed that 0:13:13.840 --> 0:13:17.240 you're not on the short list to be chairman of 0:13:17.320 --> 0:13:19.600 the FED. Have you ever talked to the Secretary of 0:13:19.640 --> 0:13:26.480 Treasury about your commitment to a more conservative economic ethos? 0:13:27.800 --> 0:13:31.040 Well, thanks for having me, Tom. I think the President's 0:13:31.040 --> 0:13:33.600 got a good short list for the FED. I look 0:13:33.679 --> 0:13:36.640 forward to the to the choice. This is probably the 0:13:36.640 --> 0:13:39.120 most challenging time to run the FED that I could 0:13:39.120 --> 0:13:40.040 ever imagine. 0:13:40.880 --> 0:13:43.920 So that was diplomatic that one's exactly you learned to 0:13:43.960 --> 0:13:45.400 do that when you're Dina Colombia. 0:13:45.520 --> 0:13:49.640 Exactly Glenn, how do you view here the Fed? 0:13:49.679 --> 0:13:49.800 Here? 0:13:49.840 --> 0:13:51.959 It's in a little bit of it a position has 0:13:52.120 --> 0:13:54.720 doesn't necessarily find itself very often, which is, you know, 0:13:54.760 --> 0:13:59.400 really under some political pressure from the White House here, 0:13:59.400 --> 0:14:00.840 how do you view FED these days? 0:14:01.559 --> 0:14:03.320 Well, I think there's a short run and a long 0:14:03.400 --> 0:14:05.640 run challenge. The short run challenge is the one in 0:14:05.679 --> 0:14:08.800 the news, which is what do you do about rates? 0:14:08.880 --> 0:14:11.120 You have inflation that's too high, you have a job 0:14:11.160 --> 0:14:13.960 market weakening. I think the case for a lot of 0:14:14.040 --> 0:14:17.200 rate cuts is pretty weak. To the extent that they're 0:14:17.240 --> 0:14:20.680 worries about employment. Many of those are structural, they're AI, 0:14:20.880 --> 0:14:23.440 they are changes that really are beyond the Fed's purviews. 0:14:24.160 --> 0:14:28.000 I think the Fed's watchful waiting makes sense longer term. 0:14:28.120 --> 0:14:31.080 The challenge is how do you keep an independent Fed 0:14:31.520 --> 0:14:34.480 in the presence of political pressures? And I think while 0:14:34.520 --> 0:14:37.680 the FED needs to be independent, it has made mistakes. 0:14:37.800 --> 0:14:41.320 You know, President Trump is not entirely incorrect, and so 0:14:41.400 --> 0:14:44.080 the next chair will have to do some reforms. 0:14:44.760 --> 0:14:49.800 So you mentioned AI, Glenn, it's certainly been a key 0:14:49.880 --> 0:14:52.360 key narrative of this market over the last two to 0:14:52.400 --> 0:14:54.520 three years, as companies step up their spending here. But 0:14:54.560 --> 0:14:57.440 What are the impacts do you think on the US 0:14:57.680 --> 0:14:58.440 labor force. 0:14:59.000 --> 0:15:01.000 There's a lot of consternation out there. 0:15:01.920 --> 0:15:03.960 Well, I think it's too soon to tell. I mean, basically, 0:15:04.040 --> 0:15:07.680 AI can either substitute on the one hand, for workers, 0:15:07.760 --> 0:15:10.440 or it can compliment workers' skills, and we're seeing both 0:15:10.440 --> 0:15:13.600 of those in the labor market. It won't surprise you 0:15:13.640 --> 0:15:17.160 to know economists completely different and what their views are 0:15:17.160 --> 0:15:19.960 on AI. I think in the long run, AI is 0:15:19.960 --> 0:15:23.480 going to displace many jobs but create many more jobs. 0:15:23.840 --> 0:15:27.240 Where I think people may be surprised is on market 0:15:27.360 --> 0:15:30.360 valuations and who wins from AI. Just like we learned 0:15:30.400 --> 0:15:32.800 in the Telco boom in the nineties, a lot of 0:15:32.800 --> 0:15:36.760 the first movers lose money, but ultimately it raises productivity. 0:15:37.000 --> 0:15:37.800 We may well see. 0:15:37.920 --> 0:15:40.800 Rightly, let's go there, I mean, I mean, Glenn ahlbrid 0:15:40.840 --> 0:15:42.800 with US folks, for the whole of you worldwide on 0:15:42.840 --> 0:15:47.120 YouTube and all of our radio affiliates in America. Thank 0:15:47.160 --> 0:15:50.720 you for joining this morning. Glenn, you're teaching at Columbia 0:15:51.240 --> 0:15:54.360 or frankly at your Central Florida and you have to 0:15:54.440 --> 0:15:59.680 discuss productivity. We're blind right now to where productivity is 0:16:00.280 --> 0:16:04.080 in twenty twenty five when won't we have an understanding 0:16:04.480 --> 0:16:06.240 of this new productivity. 0:16:07.360 --> 0:16:09.520 Well, it's a great question, Tom, and the honest answer 0:16:09.560 --> 0:16:11.960 is it takes time. So if you look at previous 0:16:12.000 --> 0:16:16.560 waves of what economists called general purpose technologies like electricity 0:16:16.760 --> 0:16:20.440 or mainframe computing or the Internet, they took a decade 0:16:20.520 --> 0:16:23.400 or more to really ripple through productivity. And the reason 0:16:23.520 --> 0:16:27.480 is it takes time for businesses, for individuals. Adat, I 0:16:27.480 --> 0:16:30.200 think it would take less time this time. So it 0:16:30.240 --> 0:16:32.880 may be within five years, but we shouldn't be expecting 0:16:32.880 --> 0:16:33.440 it overnight. 0:16:33.600 --> 0:16:37.040 Okay, But Paul and I've had this in many conversations. 0:16:37.040 --> 0:16:39.360 It's just brilliant work. And thank you to Richard Clarina 0:16:40.040 --> 0:16:44.840 for his support of the show. Glenn Hubbard a long ago, 0:16:44.960 --> 0:16:50.480 in globalization, we broke a bargain with the clothing labor 0:16:50.560 --> 0:16:53.520 of the Carolinas. We said, we're going to retrain you, 0:16:53.600 --> 0:16:55.520 We're going to do this. Are we going to do 0:16:55.560 --> 0:16:58.280 the same thing with AI where we go sort of 0:16:58.320 --> 0:17:02.800 AI globalization and we break the labor bargain with all 0:17:02.840 --> 0:17:04.640 those people pushed out of jobs. 0:17:05.400 --> 0:17:08.400 I'm super worried about this point. It is the political 0:17:08.440 --> 0:17:11.160 economy question of our time. If you look at the 0:17:11.200 --> 0:17:15.360 past three or four decades. Technological change is actually number one. 0:17:15.480 --> 0:17:19.960 Then globalization. We didn't retrain people. We were too slow moving. 0:17:20.000 --> 0:17:23.320 AI is going to happen faster. I do worry about it. 0:17:23.440 --> 0:17:26.359 I hope the administration will become more focused on how 0:17:26.400 --> 0:17:29.000 do you get Come on, I got tied. 0:17:29.280 --> 0:17:32.119 One minute left, Glenn, let me cut to the chase. 0:17:32.520 --> 0:17:35.520 The elites are from the fancy schools up north. Granted 0:17:35.600 --> 0:17:38.080 you did so well in the South. You went to Harvard. 0:17:38.400 --> 0:17:41.600 There's like three zip codes out near Palo Alto. There's 0:17:41.600 --> 0:17:44.520 the northeastern zip code. You're one of the few people 0:17:45.040 --> 0:17:50.440 we have who viscerally gets the South. What's your message 0:17:50.480 --> 0:17:54.040 to the elites about not doing a redoc so that 0:17:54.240 --> 0:17:56.760 busted globalization of years ago. 0:17:57.600 --> 0:18:01.240 Well, two things. One, there's smart people and in ideas everywhere. 0:18:01.320 --> 0:18:04.200 We need applied research centers everywhere. We need to help 0:18:04.240 --> 0:18:09.360 place us left behind. And second, our politics depend on this. 0:18:09.840 --> 0:18:12.240 If we want to embrace AI and all it brings, 0:18:12.320 --> 0:18:13.200 we got to get this right. 0:18:13.520 --> 0:18:17.080 Glennhlbard, thank you so much. Great should I get off 0:18:17.119 --> 0:18:21.080 my soap aus? Glenn Albert, thank you so much, Always 0:18:21.080 --> 0:18:25.720 and forever with Columbia at University. Stay with us. More 0:18:25.800 --> 0:18:35.800 from Bloomberg Surveillance coming up after this. 0:18:35.800 --> 0:18:39.720 This is the Bloomberg Surveillance Podcast. Listen live each weekday 0:18:39.720 --> 0:18:43.040 starting at seven am Eastern on Applecarplay and Android Auto 0:18:43.160 --> 0:18:46.120 with the Bloomberg Business app. You can also listen live 0:18:46.200 --> 0:18:49.800 on Amazon Alexa from our flagship New York station, Just 0:18:49.840 --> 0:18:52.359 say Alexa play Bloomberg eleven thirty. 0:18:52.760 --> 0:18:55.480 I need to set this up for our American audience. 0:18:55.560 --> 0:18:58.560 Sir Howard Stringer is from the low side of Wales 0:18:58.640 --> 0:19:03.320 called Cardiff. David Blanchflow of Dartmouth is from Cardiff as well, 0:19:03.720 --> 0:19:07.639 and he had the most interesting, interesting start to his career. 0:19:07.720 --> 0:19:09.360 You know him of course, from Sony. 0:19:09.720 --> 0:19:10.159 You know him. 0:19:10.200 --> 0:19:12.960 Perhaps some CBS Paul Sweni and I can do a 0:19:13.040 --> 0:19:16.359 three hour discussion we string He's seventy nine and holding 0:19:16.440 --> 0:19:19.480 you know, Paul. Just so you understand, Sir Howard Stringer 0:19:19.560 --> 0:19:24.280 joins us this morning here but specifically on the BBC 0:19:24.680 --> 0:19:29.000 and what it means for his United Kingdom. Sir Howard Stringer, 0:19:29.119 --> 0:19:31.359 thank you so much for joining Bloomberg this morning. 0:19:32.880 --> 0:19:33.480 My pleasure. 0:19:34.320 --> 0:19:37.480 I look, Sir Howard, at the debacle of the BBC 0:19:37.600 --> 0:19:40.360 and let me just get out of the way. The 0:19:40.560 --> 0:19:43.880 arch question may be alluded to by the former Prime 0:19:43.920 --> 0:19:48.040 Minister Johnson as well. Should the BBC leave as a 0:19:48.080 --> 0:19:52.920 publicly funded effort and join private enterprise. 0:19:55.640 --> 0:19:59.520 Would I would say not. I would say that brilliance 0:19:59.560 --> 0:20:05.399 of the baby It was designed as an institution that 0:20:05.480 --> 0:20:10.439 would be fairer and offer truth and fairness to a 0:20:10.440 --> 0:20:14.800 British audience at subsequently to a worldwide audience with a 0:20:14.880 --> 0:20:20.600 worldwide news network, and in many ways American television was 0:20:20.720 --> 0:20:25.119 built on that standard. And so giving that trust up, 0:20:25.200 --> 0:20:27.600 giving that opportunity up, I think. 0:20:27.480 --> 0:20:28.480 Would be a mistake. 0:20:30.000 --> 0:20:34.959 How do they restructure emotionally? How do they recapture the 0:20:35.080 --> 0:20:38.320 minds of the United Kingdom to say you can trust us. 0:20:38.600 --> 0:20:43.000 It's been shattered with this debate with the president, the 0:20:43.040 --> 0:20:46.480 President Trump folks suggesting you will sue the BBC for 0:20:46.600 --> 0:20:50.560 many billions of dollars. Howard Stringer, what is the first 0:20:50.600 --> 0:20:56.359 step to rekindle a new trust with the British Well? 0:20:56.600 --> 0:21:02.720 I think with all great institutions, leadership is critical and 0:21:02.960 --> 0:21:06.280 presumably there will be discussions about who runs the BBC 0:21:06.400 --> 0:21:10.880 now very quickly and how the board is constructed, and 0:21:12.200 --> 0:21:16.480 lessons will be learned. I think that's been true across 0:21:16.520 --> 0:21:16.920 the board. 0:21:16.920 --> 0:21:17.480