WEBVTT - Bloomberg Surveillance TV: June 11th, 2026

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

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<v Speaker 2>This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along

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<v Speaker 2>with Lisa Bromwitz and Amerie Hordern. Join us each day

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<v Speaker 2>for insight from the best in markets, economics, and geopolitics

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<v Speaker 2>from our global headquarters in New York City. We are

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<v Speaker 2>live on Bloomberg Television weekday mornings from six to nine

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<v Speaker 2>am Eastern. Subscribe to the podcast on Apple, Spotify or

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<v Speaker 2>anywhere else you listen, and as always on the Bloomberg

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<v Speaker 2>Terminal and the Bloomberg Business App. Francis Donald ARBC writing,

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<v Speaker 2>for the past six years, US consumers have borne the

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<v Speaker 2>brunt of accumulating inflationary shocks that chapter may now be ending.

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<v Speaker 2>Francis joins us now for more. Francis, welcome to the program.

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<v Speaker 2>What's changing, Well.

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<v Speaker 3>The consumer is losing the capacity to absorb any additional

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<v Speaker 3>shocks that savings riders down, real wages are now negative,

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<v Speaker 3>and the capacity to absorb that has existed in the

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<v Speaker 3>entire post pandemic experience, we believe, is now fading.

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<v Speaker 4>Now.

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<v Speaker 3>That doesn't necessarily mean the consumer is going to collapse.

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<v Speaker 3>There's a very strong top ten percent consumer. It just

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<v Speaker 3>means that you're going to get more resistance going forward

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<v Speaker 3>on passing through these additional price shocks to the consumer.

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<v Speaker 3>Businesses are going to face harder choices because if they

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<v Speaker 3>continue to rely on the consumer to absorb these price shocks,

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<v Speaker 3>they're either going to see the consumer say no, thank you,

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<v Speaker 3>some demand destruction, or you're going to see consumers that

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<v Speaker 3>say that's fine, but we're going to need higher wages.

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<v Speaker 3>And that's why this tipping point is so critical and

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<v Speaker 3>isn't necessarily reliant on your inflation forecast. It simply means

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<v Speaker 3>that the psychology that has existed for over half a

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<v Speaker 3>decade now in the macro environment may need to pivot,

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<v Speaker 3>and we could see it as early as three to

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<v Speaker 3>four months from now.

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<v Speaker 2>The bankdrop you described Francis to me, at least listening

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<v Speaker 2>to it, would make it difficult for any central bank

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<v Speaker 2>to high interest rates. Why does it leave Kevin Walsh

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<v Speaker 2>and his committee.

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<v Speaker 3>Well, certainly very challenging. We're hearing a lot from central banks,

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<v Speaker 3>like the Bay Canada yesterday about the policy dilemma of

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<v Speaker 3>what happens when you have higher prices that weigh on growth.

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<v Speaker 3>But to me, the real policy dilemma is that monetary

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<v Speaker 3>policy is just not as functional and way more complicated.

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<v Speaker 3>When you have a substantial K economy, you have a

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<v Speaker 3>top end consumer that could wishstand and probably needs higher

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<v Speaker 3>interest rates, and then you have a bottom end consumer

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<v Speaker 3>that is going to go through some cyclical weakness and

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<v Speaker 3>maybe even some structural weakness here. So how this central

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<v Speaker 3>bank and what we hear from Kevin worsh and how

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<v Speaker 3>he thinks about this and this policy dilemma is going

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<v Speaker 3>to be very important moving forward, not just what action

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<v Speaker 3>they take, but the philosophy around a growing divide within

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<v Speaker 3>American consumers and how does monetary policy best serve them?

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<v Speaker 3>I think an underappreciated question we should be asking Kevin warsh.

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<v Speaker 1>For instance, do you think that the ecpakon potentially hike

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<v Speaker 1>rates even if the US doesn't because of the K

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<v Speaker 1>shaped economy, that there isn't such a market divide in

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<v Speaker 1>the euroregion as there is in the United States.

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<v Speaker 3>Well, this is thefferentiator between the United States, and there's

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<v Speaker 3>a few of them. One is that big divide between

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<v Speaker 3>that top ten percent that is accumulated massive savings, massive

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<v Speaker 3>amounts of benefits from financial markets doing well. That we

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<v Speaker 3>don't see in the rest of the developed world. That's true,

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<v Speaker 3>but there's also a different growth dynamic that's happening here,

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<v Speaker 3>which is the United States growth dynamic has been upheld

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<v Speaker 3>by structural guardrails, the AI story, big government spending, that

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<v Speaker 3>top ten percent, very wealthy consumer.

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<v Speaker 4>But now we're starting to see.

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<v Speaker 3>A broadening of that growth dynamic in the United States. Now,

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<v Speaker 3>some of it might be FIFA, some of it might

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<v Speaker 3>be some movement around tariffs that i eep A ruling

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<v Speaker 3>coming down, some distortions, but there's enough happening in the

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<v Speaker 3>US economy right now that suggests that their economy is

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<v Speaker 3>actually becoming stronger, while DM economies outside of the United

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<v Speaker 3>States are suffering under the weight of this energy shock.

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<v Speaker 3>So certainly how central banks choose to respond to that

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<v Speaker 3>will be interesting. But the divergence occurring between US growth,

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<v Speaker 3>which is being allowed to run hot, and the rest

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<v Speaker 3>of the world is child with more of stagflationary dynamics

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<v Speaker 3>is interesting and also a new dynamic than what we've

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<v Speaker 3>seen over the past one to two years.

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<v Speaker 1>Since you talk about the tipping point where either potentially

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<v Speaker 1>you're going to start to see people pulling back because

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<v Speaker 1>their savings are out or they're going to demand higher

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<v Speaker 1>wages and get them. Is a really interesting one, especially

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<v Speaker 1>as we get PPI later today and you have heard

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<v Speaker 1>about profit margins expanding at a number of companies.

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<v Speaker 4>Why won't workers go to.

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<v Speaker 1>Their bosses and say, the number of tokens you would

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<v Speaker 1>need to pay to do what I do is actually

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<v Speaker 1>more than I'm getting paid, So pay me the amount

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<v Speaker 1>that my tokens would be worth. I mean, why is

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<v Speaker 1>this a value proposition not going to necessarily lead to

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<v Speaker 1>higher wages.

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<v Speaker 4>Well, it's actually interesting.

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<v Speaker 3>My team this week has all been talking about token

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<v Speaker 3>use to the cost of tokens. Are we going to

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<v Speaker 3>reach that moment where we say, actually there is a

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<v Speaker 3>cost of labor, and there's a cost of actually substituting out.

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<v Speaker 4>Of labor as well.

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<v Speaker 3>This is critical and the most important data that we're

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<v Speaker 3>watching right now is what are companies planning to do

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<v Speaker 3>with pass through? So numbers like PPI are more important

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<v Speaker 3>small businesses intentions to pass through, but also uomer's ability

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<v Speaker 3>to absorb that. So the relationship between business costs, how

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<v Speaker 3>they're using those very large corporate margins and the choices

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<v Speaker 3>around them are going to be critifical from transcripts to

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<v Speaker 3>survey data.

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<v Speaker 4>This is a moment to really zero in.

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<v Speaker 3>On do businesses see the capacity to reduce costs in

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<v Speaker 3>other areas and do they have the capacity or they

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<v Speaker 3>seeing any signs that they're going to have to slow

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<v Speaker 3>through the pass through? To me, that's the biggest Q

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<v Speaker 3>three question.

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<v Speaker 5>You talk about in your note. How businesses choose to

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<v Speaker 5>carry this. We'll define the next chapter of the cycle

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<v Speaker 5>when it comes to higher prices. Mohammed Alaran has talked

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<v Speaker 5>about in the past. Listen to what the c suite says.

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<v Speaker 5>What are they telling you right now?

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<v Speaker 3>They're still talking about pass through. They're talking about a

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<v Speaker 3>slightly more fragile consumer, but particularly at the lower end

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<v Speaker 3>of the sphere. So this is an early development. We're

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<v Speaker 3>not quite there yet, but in our view, we only

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<v Speaker 3>have a couple more months of savings with the consumer

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<v Speaker 3>before you start to see that consumer start of breakdown. So,

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<v Speaker 3>as I said Q three Q four, watch for this

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<v Speaker 3>transitional moment coming through. So far, surveys are saying, well,

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<v Speaker 3>we're getting a little bit more cautious, but not quite

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<v Speaker 3>there yet. Again, we really try to downplay soft surveys typically,

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<v Speaker 3>but We're going to have to watch for some dynamic

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<v Speaker 3>on that front more than we have in the past.

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<v Speaker 5>It'll show up a little bit more before the hard data. Francis,

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<v Speaker 5>where's the savings coming from? I remember during Christmas people

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<v Speaker 5>were saying that the consumers are going out and they're

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<v Speaker 5>spending their savings right now and also tax their higher

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<v Speaker 5>tax refunds, and then it was early in this year

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<v Speaker 5>they're spending that on higher electricity bills. Now everyone's saying

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<v Speaker 5>they're spending that on higher gas prices.

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<v Speaker 4>Hasn't this dried up?

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<v Speaker 3>It has, so we've seen we have near record low

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<v Speaker 3>savings rate right now. That's a flow type of story,

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<v Speaker 3>and this is exactly why it doesn't matter whether you

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<v Speaker 3>believe inflation has peaked or not. The stock of available

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<v Speaker 3>consumption now is now beginning to decline. If you go

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<v Speaker 3>back several years, consumers had government transfers coming through from

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<v Speaker 3>the pandemic. They had wages that were real and positive terms.

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<v Speaker 3>They were accruing some benefits from that stronger stock market,

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<v Speaker 3>but mostly to the top end. Those have now depleted.

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<v Speaker 3>So again we're not talking about a very bearish consumer outlook.

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<v Speaker 3>There are still elements of strength We are not talking

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<v Speaker 3>about a complete collapse. We're talking about is that the

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<v Speaker 3>baton has to be passed on price pass through from

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<v Speaker 3>the consumer.

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<v Speaker 4>To businesses because businesses are.

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<v Speaker 3>Going to see it in real time that the consumer

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<v Speaker 3>says cannot, I do not have the capacity to continue purchasing.

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<v Speaker 3>And there's been such a psychological focus. We've become so

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<v Speaker 3>accustomed to this idea that is inflation and prices rise

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<v Speaker 3>from tariffs to geopolitical shocks that they roll through to

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<v Speaker 3>consumers with a lag. This is the point that we're

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<v Speaker 3>trying to make, is that that six year paradigm maybe

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<v Speaker 3>on the edge of shifting in the other direction.

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<v Speaker 2>Stay with us more Bloomberg surveillance coming up after this

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<v Speaker 2>and most of Raymond James wrights in the following. If

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<v Speaker 2>Democrats win a House and or Senate majority, expect calls

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<v Speaker 2>for federal laws limiting data centers to be near the

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<v Speaker 2>top of the agenda at joint us. Now for more

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<v Speaker 2>and welcome to the show. To see you once again,

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<v Speaker 2>let's focus on this. How are things changing heading into

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<v Speaker 2>the midsums.

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<v Speaker 6>Well, we've argued at Raymond James that AI policy is

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<v Speaker 6>probably the biggest market event from the midterm elections. You

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<v Speaker 6>go back to last November, John Democrats did really well

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<v Speaker 6>in Virginia, in New Jersey arguing that energy costs are

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<v Speaker 6>too high, arguing against data centers. You're seeing Bernie Sanders

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<v Speaker 6>against that. You see Hakeem Jeffries, the Democratic leader in

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<v Speaker 6>the House, saying this will be a priority. They're trying

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<v Speaker 6>to make those data centers the death star to the

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<v Speaker 6>American public and say that's the problem, and then build

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<v Speaker 6>upon that trying to have new hawkishness on China and

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<v Speaker 6>a whole bunch of new AI policies, trying to kind

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<v Speaker 6>of wrap this against Trump and against Republicans, especially if

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<v Speaker 6>they win a majority. That's going to be the market

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<v Speaker 6>concern ed.

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<v Speaker 5>What's actually going to be the policy when it comes

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<v Speaker 5>to what some conservatives and free market individuals are saying

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<v Speaker 5>that this government's trying to nationalize some of these companies.

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<v Speaker 6>Yeah, well, this has been a weird push pull emory

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<v Speaker 6>because there has been a general angst about kind of

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<v Speaker 6>government stakes in US companies. But with President Trump, he's

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<v Speaker 6>had the support of Republicans in Congress because they generally

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<v Speaker 6>support him. I do look at the AI export program

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<v Speaker 6>that should have some of their first announcements this month,

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<v Speaker 6>which is going to get some government financing to back

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<v Speaker 6>AI programs around the world. Maybe we take some of

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<v Speaker 6>that financing that we're promoting and supporting some of these

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<v Speaker 6>hyperscalers and using that as the hook to get that

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<v Speaker 6>equity stake. I don't think we have that proposal that

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<v Speaker 6>Bernie Sanders talk's about that would require congressional action. That's

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<v Speaker 6>not going to happen. I do think that because Donald

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<v Speaker 6>Trump has created this President Emory, it is more accepted

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<v Speaker 6>than it otherwise would have ever been.

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<v Speaker 5>Absolutely, he's also talking about a meeting that is unconfirmed,

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<v Speaker 5>hasn't taken place yet. Why is he doing this? I mean,

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<v Speaker 5>the AI companies are saying, there's no me right now.

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<v Speaker 5>Why is he just putting this out there?

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<v Speaker 6>Well, Emory, he loves to be at the center of

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<v Speaker 6>the most important debates, to the extent that he can

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<v Speaker 6>be on the world stage with Putin or she or

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<v Speaker 6>with the leaders of AI. Especially as we're seeing some

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<v Speaker 6>of these major IPOs in the pipeline, inserting himself into

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<v Speaker 6>that policy is really important. Secondly, recently we got an

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<v Speaker 6>AI executive Order and we're seeing a massive policy shift

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<v Speaker 6>with President Trump, where at the beginning of his term

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<v Speaker 6>he did away with the Biden executive order that looked

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<v Speaker 6>at things through a national security lens. He's starting to

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<v Speaker 6>do that as well, and he's starting to engage here

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<v Speaker 6>because he's not quite sure if the free release of

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<v Speaker 6>these models is the right policy or should we have

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<v Speaker 6>a government review. The more that he gets concerned with that,

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<v Speaker 6>the more he's going to want to meet with these

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<v Speaker 6>AI executives. The more this becomes a political problem, the

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<v Speaker 6>more he's going to want to insert himself into that

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<v Speaker 6>trying to neutralize that policy point.

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<v Speaker 1>Is President Trump leading the charge for Republicans in terms

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<v Speaker 1>of supporting AI development or is he offside so some

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<v Speaker 1>of his Republican colleagues who are very concerned about this,

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<v Speaker 1>hearing from their constituents looking for more regulation.

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<v Speaker 4>Lisa, it might be both.

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<v Speaker 6>We've seen kind of a huge push at the beginning

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<v Speaker 6>of this administration to change some of the policy towards China,

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<v Speaker 6>making an argument that unless we get these leading edge

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<v Speaker 6>chips to China, China will develop their own. We have

0:11:27.960 --> 0:11:31.120
<v Speaker 6>the deep seek moment. Then he started to say, all right,

0:11:31.160 --> 0:11:33.360
<v Speaker 6>we could allow China kit to get more chips. The

0:11:33.559 --> 0:11:36.400
<v Speaker 6>h two hundred. Those haven't been developed or they haven't

0:11:36.440 --> 0:11:39.840
<v Speaker 6>been sold to China at the levels he thought they would.

0:11:40.160 --> 0:11:43.200
<v Speaker 6>And then on Capitol Hill, that's where you've gotten the pushback.

0:11:43.240 --> 0:11:46.079
<v Speaker 6>We've had introduction of legislation, the Match Act, that has

0:11:46.160 --> 0:11:49.280
<v Speaker 6>already cleared committee on a pretty decent vote that would

0:11:49.320 --> 0:11:52.080
<v Speaker 6>restrict some of the semiconductors going to China, would restrict

0:11:52.240 --> 0:11:54.800
<v Speaker 6>some of the semi kap equipment going to China, and

0:11:55.000 --> 0:11:58.240
<v Speaker 6>Republicans are telling him you have gone too far in

0:11:58.400 --> 0:12:01.280
<v Speaker 6>easing up some of these restricts. We don't like the

0:12:01.280 --> 0:12:04.720
<v Speaker 6>fact that you've merged the national security and economic lanes.

0:12:05.000 --> 0:12:07.800
<v Speaker 6>We understand that we need to win this AI race,

0:12:08.240 --> 0:12:11.640
<v Speaker 6>but giving it to China being too fast and loose

0:12:11.679 --> 0:12:14.240
<v Speaker 6>on some of the national security issues, that is a

0:12:14.280 --> 0:12:17.880
<v Speaker 6>concern for us, especially if this is kind of getting

0:12:17.880 --> 0:12:19.679
<v Speaker 6>deployed in the way in which we hear a lot

0:12:19.679 --> 0:12:21.400
<v Speaker 6>of folks in the market talk about it.

0:12:21.520 --> 0:12:23.520
<v Speaker 1>And there's also a concern about the personnel and the

0:12:23.559 --> 0:12:25.800
<v Speaker 1>brain trust close to the White House right now. There

0:12:25.840 --> 0:12:28.439
<v Speaker 1>have been a number of departures Thomas Lynd. The most

0:12:28.480 --> 0:12:31.920
<v Speaker 1>recent one is that concerning given how quickly this is

0:12:32.000 --> 0:12:34.360
<v Speaker 1>moving and the need for expertise to understand how it

0:12:34.440 --> 0:12:37.600
<v Speaker 1>is working and what exactly the potential applications, potential danger,

0:12:37.800 --> 0:12:39.040
<v Speaker 1>potential benefits could be.

0:12:40.160 --> 0:12:42.360
<v Speaker 6>Yeah, we have a lot of turnover in government as

0:12:42.400 --> 0:12:45.559
<v Speaker 6>a general source. It has been a uptick lately on

0:12:45.600 --> 0:12:48.520
<v Speaker 6>some of the AI policy individuals. I've talked to a

0:12:48.600 --> 0:12:50.880
<v Speaker 6>number of them after they have left or kind of

0:12:50.880 --> 0:12:54.520
<v Speaker 6>when they've been doing these things. I've actually been relatively

0:12:54.520 --> 0:12:58.400
<v Speaker 6>impressed with an AI policy infrastructure that he had put

0:12:58.480 --> 0:13:01.280
<v Speaker 6>into place. I do think the fact that we had

0:13:01.320 --> 0:13:04.680
<v Speaker 6>an AI action plan that came out pretty early in

0:13:04.720 --> 0:13:07.960
<v Speaker 6>the administration. Now we have an AI Executive Order. It's

0:13:07.960 --> 0:13:10.720
<v Speaker 6>been an area that they've been focused on. Let's see

0:13:10.720 --> 0:13:13.520
<v Speaker 6>what that staff gets replaced with. But so far it's

0:13:13.520 --> 0:13:16.400
<v Speaker 6>been pretty robust. And when I've talked to that staff,

0:13:16.440 --> 0:13:17.920
<v Speaker 6>one of the things that they've told me is a

0:13:18.040 --> 0:13:20.199
<v Speaker 6>they want to flood the zone. They want to make

0:13:20.520 --> 0:13:23.960
<v Speaker 6>US technology the default technology for the world, and just

0:13:24.080 --> 0:13:26.760
<v Speaker 6>as the dollar is the reserve currency of the world,

0:13:26.920 --> 0:13:30.320
<v Speaker 6>they want that US based token to be the reserve

0:13:30.440 --> 0:13:32.280
<v Speaker 6>token of the world. And that's why they're trying to

0:13:32.320 --> 0:13:35.640
<v Speaker 6>export this globally. If they win that, they tell me

0:13:35.760 --> 0:13:39.480
<v Speaker 6>that's the most important national security issue that they can

0:13:39.640 --> 0:13:42.959
<v Speaker 6>actually achieve in this administration. So I'm hoping they're right.

0:13:44.200 --> 0:13:56.840
<v Speaker 2>Stay with us. Mulblemberg Surveillan's coming up after this ten

0:13:56.920 --> 0:13:59.120
<v Speaker 2>motison of bad rights. In the following the Capitol poll

0:13:59.440 --> 0:14:02.560
<v Speaker 2>is launching. Have to pull some capital away from tech winners,

0:14:02.600 --> 0:14:04.160
<v Speaker 2>tech joint us now for more, Ted, It's good to

0:14:04.200 --> 0:14:06.040
<v Speaker 2>see us, so welcome back to the program. Do we

0:14:06.080 --> 0:14:09.079
<v Speaker 2>have space for all this equity?

0:14:09.360 --> 0:14:10.000
<v Speaker 4>That's a million?

0:14:10.000 --> 0:14:12.720
<v Speaker 7>Another question? I mean Oracle last night, just pop seven

0:14:13.800 --> 0:14:19.000
<v Speaker 7>or seventy billion. If you look at Entropic, you look

0:14:19.040 --> 0:14:22.520
<v Speaker 7>at open AI, you look at SpaceX, it's a big number.

0:14:22.600 --> 0:14:26.920
<v Speaker 7>So portfolio managers are now struggling on how to allocate

0:14:26.960 --> 0:14:29.000
<v Speaker 7>these new offerings going forward.

0:14:29.320 --> 0:14:31.240
<v Speaker 2>At what are your thoughts, Ted, What are your thoughts

0:14:31.240 --> 0:14:33.640
<v Speaker 2>on how we should deploy some of that capital from here?

0:14:33.920 --> 0:14:35.640
<v Speaker 2>Should you be buying some of these names? Should you

0:14:35.680 --> 0:14:37.640
<v Speaker 2>take it away from the winners, the guys that have

0:14:37.680 --> 0:14:40.600
<v Speaker 2>been running up so quickly over the past few months.

0:14:41.360 --> 0:14:44.360
<v Speaker 7>I think this cycle is so powerful that you have

0:14:44.480 --> 0:14:46.800
<v Speaker 7>to be involved in these. It's just a matter of

0:14:47.400 --> 0:14:50.240
<v Speaker 7>how much and what the timing is. And I think

0:14:50.320 --> 0:14:54.920
<v Speaker 7>from my standpoint, other sectors that don't have this macro

0:14:55.160 --> 0:14:59.320
<v Speaker 7>associate with them, they need to be drained a little bit.

0:15:00.160 --> 0:15:03.680
<v Speaker 7>Portfolio managers have to get into these names just because

0:15:04.240 --> 0:15:06.920
<v Speaker 7>the forward weightings are going to be so dynamic that

0:15:07.360 --> 0:15:09.440
<v Speaker 7>if they don't play, they're going to underperform.

0:15:09.680 --> 0:15:11.520
<v Speaker 1>Let's get a little more specific. Is the room for

0:15:11.560 --> 0:15:13.920
<v Speaker 1>open AI and a potential IPO given the fact that

0:15:13.960 --> 0:15:16.480
<v Speaker 1>they're cutting prices to get some of the customer base

0:15:16.520 --> 0:15:17.160
<v Speaker 1>of Anthropic.

0:15:18.840 --> 0:15:19.960
<v Speaker 4>My opinion is yes.

0:15:20.880 --> 0:15:24.240
<v Speaker 7>If you look at what's happening just on this cycle

0:15:24.280 --> 0:15:27.960
<v Speaker 7>and the amount of infrastructure pull in, the software area

0:15:28.040 --> 0:15:30.920
<v Speaker 7>is going to go along for the ride, probably not

0:15:31.040 --> 0:15:34.720
<v Speaker 7>upfront like the infrastructure is, but over the long term

0:15:35.280 --> 0:15:37.480
<v Speaker 7>you're going to see a lot of free cash flow

0:15:37.520 --> 0:15:40.840
<v Speaker 7>generated from these next generation software companies.

0:15:40.960 --> 0:15:42.560
<v Speaker 1>Do you think there's going to be a bifurcation We

0:15:42.560 --> 0:15:46.040
<v Speaker 1>were talking about this Citadel note just moments ago, where

0:15:46.040 --> 0:15:48.920
<v Speaker 1>they're talking about a bifurcation where you've got the frontier

0:15:49.000 --> 0:15:52.720
<v Speaker 1>AI concentrated among a few firms with balance sheets that

0:15:52.880 --> 0:15:55.320
<v Speaker 1>are big enough to absorb it, and then you have

0:15:55.360 --> 0:15:58.200
<v Speaker 1>others looking for commoditized models that are cheaper and can

0:15:58.240 --> 0:16:01.120
<v Speaker 1>perform more basic tasks. Do you think that that's the

0:16:01.160 --> 0:16:03.040
<v Speaker 1>world of AI that we're going to be living in

0:16:03.040 --> 0:16:04.360
<v Speaker 1>for the next year or two.

0:16:05.920 --> 0:16:09.720
<v Speaker 7>I think it's going to be very, very volatile. It's

0:16:09.840 --> 0:16:12.720
<v Speaker 7>very hard to put your finger on how these models

0:16:13.040 --> 0:16:18.080
<v Speaker 7>are actually going to settle out. There is a fair

0:16:18.120 --> 0:16:21.080
<v Speaker 7>amount of deflation going on as it relates to models,

0:16:21.120 --> 0:16:25.200
<v Speaker 7>if you listen to Palenteer, for example, also on token pricing.

0:16:25.640 --> 0:16:27.520
<v Speaker 7>I think we've just got to let it play out

0:16:27.560 --> 0:16:35.960
<v Speaker 7>and verse speculating the macro though from a AI stack perspective,

0:16:36.560 --> 0:16:40.400
<v Speaker 7>is so disruptive that I think we've got to look

0:16:40.400 --> 0:16:42.800
<v Speaker 7>at it more from a long term and react to

0:16:42.840 --> 0:16:45.720
<v Speaker 7>the models as a materialized ted.

0:16:45.840 --> 0:16:47.920
<v Speaker 5>You rightfully point out in your note that tech CEO

0:16:47.960 --> 0:16:49.160
<v Speaker 5>messaging is out of touch.

0:16:49.000 --> 0:16:50.280
<v Speaker 4>With eighty percent of the population.

0:16:50.400 --> 0:16:53.520
<v Speaker 5>Is that why we have this letter overnight from anthropic.

0:16:54.120 --> 0:16:54.680
<v Speaker 4>I think so.

0:16:54.840 --> 0:16:57.360
<v Speaker 7>I mean, you know, I wish some of the tech

0:16:57.480 --> 0:17:03.280
<v Speaker 7>visionaries would really define not how their companies are doing,

0:17:03.320 --> 0:17:07.280
<v Speaker 7>but how AI will affect humanity in a positive way,

0:17:08.320 --> 0:17:13.320
<v Speaker 7>whether it be productivity or instead of job lost, job expansion.

0:17:14.680 --> 0:17:17.440
<v Speaker 7>I think when you look at the bottom seventy percent

0:17:17.560 --> 0:17:21.679
<v Speaker 7>of the population, they're getting hit not only on inflation

0:17:21.920 --> 0:17:26.840
<v Speaker 7>but I think there's an angst that AI could control

0:17:26.880 --> 0:17:30.280
<v Speaker 7>their destiny from a work in quality of life issue.

0:17:30.760 --> 0:17:34.600
<v Speaker 7>And this is happening so quickly that I think that

0:17:34.760 --> 0:17:38.000
<v Speaker 7>leadership has to take it under their wing to actually

0:17:38.000 --> 0:17:42.440
<v Speaker 7>communicate to that bottom seventy percent and not the top

0:17:42.520 --> 0:17:43.280
<v Speaker 7>thirty percent.

0:17:43.560 --> 0:17:45.399
<v Speaker 5>How are you thinking about what the US government is

0:17:45.440 --> 0:17:48.199
<v Speaker 5>going to do, especially when President Trump is talking about

0:17:48.520 --> 0:17:50.720
<v Speaker 5>maybe he does line up with Centaer and Bernie Sanderson

0:17:50.800 --> 0:17:52.360
<v Speaker 5>they should be taking equity stakes.

0:17:53.840 --> 0:17:59.240
<v Speaker 7>Oh boy, that's a loaded question. I'm not a big

0:17:59.280 --> 0:18:06.440
<v Speaker 7>believer in government choosing winners and losers. I think there's

0:18:06.520 --> 0:18:13.679
<v Speaker 7>going to be some mechanism that if AI does materialize

0:18:13.680 --> 0:18:18.960
<v Speaker 7>in a way that we are projecting, that the bottom

0:18:19.040 --> 0:18:21.600
<v Speaker 7>seventy percent, if you will, will be taken care of.

0:18:22.560 --> 0:18:24.679
<v Speaker 7>I think it's conjecture at this point on what that

0:18:24.760 --> 0:18:25.479
<v Speaker 7>model looks like.

0:18:25.920 --> 0:18:27.720
<v Speaker 2>Ted, I just wonder if we can turn that round

0:18:27.760 --> 0:18:30.840
<v Speaker 2>just to touch the government picking winners and losers. There

0:18:30.880 --> 0:18:32.480
<v Speaker 2>is a loser right now and it appears to be

0:18:32.520 --> 0:18:35.439
<v Speaker 2>open AI and they're picking the government, and Ted, I

0:18:35.480 --> 0:18:37.399
<v Speaker 2>just wonder win. I'm trying to work that out. What

0:18:37.440 --> 0:18:39.680
<v Speaker 2>are they getting get here? There's been this talk reportedly

0:18:39.720 --> 0:18:41.960
<v Speaker 2>in the last year as well, that they were talking

0:18:42.000 --> 0:18:44.760
<v Speaker 2>about some individuals in the c suite that maybe the

0:18:44.800 --> 0:18:48.359
<v Speaker 2>government should be involved to support any potential losses because

0:18:48.359 --> 0:18:49.720
<v Speaker 2>this is getting too big to fail.

0:18:50.080 --> 0:18:50.240
<v Speaker 1>Ted.

0:18:50.280 --> 0:18:51.640
<v Speaker 2>How do you think about that dynamic?

0:18:53.680 --> 0:18:56.000
<v Speaker 7>I tell you it's moving so quickly that, to be

0:18:56.040 --> 0:18:59.040
<v Speaker 7>honest with you, Jonathan, I don't think anybody really has

0:19:00.280 --> 0:19:03.960
<v Speaker 7>the real view here. I think there's got to be

0:19:04.000 --> 0:19:08.439
<v Speaker 7>a lot of discussions company to company and with the

0:19:08.480 --> 0:19:12.080
<v Speaker 7>government to figure this out. It's moving so quickly and

0:19:12.119 --> 0:19:15.760
<v Speaker 7>it is so disruptive that, quite frankly, I don't think

0:19:15.800 --> 0:19:18.359
<v Speaker 7>anybody really has the answers. I think we're trying to

0:19:19.040 --> 0:19:22.240
<v Speaker 7>We're trying to nail an answer that may not exist

0:19:22.400 --> 0:19:25.920
<v Speaker 7>right now because of the pace of innovation. I think

0:19:25.920 --> 0:19:28.760
<v Speaker 7>it's gonna it's going to play out over the course

0:19:28.800 --> 0:19:32.439
<v Speaker 7>of the next couple quarters, and I think we just

0:19:32.520 --> 0:19:36.600
<v Speaker 7>have to go with with with how the market develops

0:19:36.680 --> 0:19:40.439
<v Speaker 7>and quite frankly, how we make the country as a

0:19:40.480 --> 0:19:41.080
<v Speaker 7>whole function.

0:19:42.440 --> 0:19:46.000
<v Speaker 2>This is the Bloomberg Seventans podcast, bringing you the best

0:19:46.000 --> 0:19:49.320
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