1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:22,000 Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business App. 4 00:00:22,360 --> 00:00:25,680 Speaker 1: Listen on demand wherever you get your podcasts, or watch 5 00:00:25,760 --> 00:00:27,120 Speaker 1: us live on YouTube. 6 00:00:27,280 --> 00:00:29,840 Speaker 2: Joining us now from BAMA from Bank of Montreal, BEMA 7 00:00:29,920 --> 00:00:34,680 Speaker 2: Capital Markets. The acclaim Ian Lincoln the summer You're Ian 8 00:00:34,840 --> 00:00:37,840 Speaker 2: is the following We've got a data and a deficit 9 00:00:38,320 --> 00:00:41,400 Speaker 2: and we're in love with T bills. What's the Lincoln 10 00:00:41,640 --> 00:00:46,000 Speaker 2: radar say about an executive branch that says the solution 11 00:00:46,760 --> 00:00:49,000 Speaker 2: is a record number of T bill issuance. 12 00:00:51,360 --> 00:00:54,080 Speaker 3: Frankly, I think that we're at the point where the market, 13 00:00:54,360 --> 00:00:57,720 Speaker 3: at least for now, can easily absorb an increase in 14 00:00:57,800 --> 00:01:01,560 Speaker 3: T bill issuance. The risk is that they oversaturate the 15 00:01:01,600 --> 00:01:03,400 Speaker 3: front end of the market, and there are many in 16 00:01:03,440 --> 00:01:06,760 Speaker 3: the market that believe that the rise of stable coin 17 00:01:06,880 --> 00:01:10,119 Speaker 3: and demand from that sector is going to create excess 18 00:01:10,160 --> 00:01:13,200 Speaker 3: demand and absorb that the bills in twenty twenty six 19 00:01:13,240 --> 00:01:15,600 Speaker 3: and beyond. That's not so clear to me, but I 20 00:01:15,600 --> 00:01:17,760 Speaker 3: think that the Treasure Department is going to find out 21 00:01:17,800 --> 00:01:18,320 Speaker 3: soon enough. 22 00:01:18,360 --> 00:01:20,280 Speaker 4: Here's a sentence without math. 23 00:01:20,400 --> 00:01:23,040 Speaker 2: One of the key debates in the market at the moment, Damien, 24 00:01:23,600 --> 00:01:27,120 Speaker 2: is whether Trump's tariffs will trigger one time price adjustments 25 00:01:27,480 --> 00:01:28,759 Speaker 2: or persistent inflation. 26 00:01:29,080 --> 00:01:30,119 Speaker 4: So continue with the and. 27 00:01:30,120 --> 00:01:31,959 Speaker 5: Lincoln, Well, I think all three parties take God, we'll 28 00:01:31,959 --> 00:01:34,080 Speaker 5: talk about that later. And I got you and I 29 00:01:34,080 --> 00:01:35,800 Speaker 5: have limited time here. I mean, futures are pricing in 30 00:01:35,920 --> 00:01:38,360 Speaker 5: ninety one percent probability of a twenty five big cut 31 00:01:38,520 --> 00:01:41,480 Speaker 5: in September. Can it be fifty? And what would make it? 32 00:01:41,680 --> 00:01:42,840 Speaker 5: What would meet that they'd go there? 33 00:01:44,520 --> 00:01:47,280 Speaker 3: I think it could be fifty. Again, not our base case. 34 00:01:47,400 --> 00:01:50,160 Speaker 3: But if you get a disastrous payrolls print for the 35 00:01:50,160 --> 00:01:53,680 Speaker 3: month of August and two benign CPI prints, the market 36 00:01:53,720 --> 00:01:55,760 Speaker 3: will start talking about fifty basis points. 37 00:01:55,840 --> 00:01:57,760 Speaker 5: Well, I mean, but then are we really going to 38 00:01:57,760 --> 00:01:59,760 Speaker 5: see a pullback? And consumption? Come on now? I mean 39 00:02:00,040 --> 00:02:02,600 Speaker 5: DP growth, I mean better than expected globally for the 40 00:02:02,600 --> 00:02:04,360 Speaker 5: first half of this year, you know, I mean talk 41 00:02:04,400 --> 00:02:07,080 Speaker 5: to talk to me about the trade up between a 42 00:02:07,120 --> 00:02:10,120 Speaker 5: weaker labor market and resilient income growth here in the US. 43 00:02:11,720 --> 00:02:16,160 Speaker 3: So we have seen a easing of demand in terms 44 00:02:16,160 --> 00:02:18,840 Speaker 3: of personal consumption in real terms over the course of 45 00:02:18,919 --> 00:02:21,200 Speaker 3: Q one and Q two. That's in the data. But 46 00:02:21,360 --> 00:02:23,679 Speaker 3: what we haven't seen is we haven't seen it completely 47 00:02:23,760 --> 00:02:27,120 Speaker 3: stall out. And frankly, if the Fed cuts fifty or 48 00:02:27,160 --> 00:02:30,680 Speaker 3: twenty five in September, the equity market will respond well 49 00:02:30,880 --> 00:02:33,880 Speaker 3: and that will reinforce the wealth effect, which could certainly 50 00:02:33,919 --> 00:02:35,200 Speaker 3: help keep the consumer going. 51 00:02:35,440 --> 00:02:39,080 Speaker 2: Damien, and of twenty twenty three thirty or mortgage eight percent, yeah, 52 00:02:39,160 --> 00:02:41,240 Speaker 2: we're now down to six point seven eight percent. 53 00:02:41,560 --> 00:02:44,080 Speaker 4: Do you anser your great question to Ian? 54 00:02:44,360 --> 00:02:47,040 Speaker 2: If we get a fifty beeps, whether it's one to whatever, 55 00:02:47,720 --> 00:02:50,440 Speaker 2: I mean, it's got to save the housing market, right. 56 00:02:50,280 --> 00:02:50,560 Speaker 5: I mean? 57 00:02:50,760 --> 00:02:50,959 Speaker 1: Yeah? 58 00:02:51,000 --> 00:02:53,280 Speaker 5: And Ian, I mean, I mean can this curve steepen 59 00:02:53,360 --> 00:02:55,000 Speaker 5: even more from where we are? I mean, I think 60 00:02:55,000 --> 00:02:57,160 Speaker 5: you look at fives thirties, we're up what sixty BIPs 61 00:02:57,200 --> 00:02:59,160 Speaker 5: here to date? I think two tens, it's something like 62 00:02:59,200 --> 00:03:01,639 Speaker 5: twenty plus here to day. I mean, just how much 63 00:03:01,639 --> 00:03:02,560 Speaker 5: steeper can this curve go? 64 00:03:04,200 --> 00:03:06,919 Speaker 3: So once the Fed starts cutting, the market will price 65 00:03:06,960 --> 00:03:09,760 Speaker 3: in even more rate cuts in twenty twenty six and 66 00:03:09,800 --> 00:03:12,800 Speaker 3: twenty twenty seven, and so the two year sector will rally, 67 00:03:12,840 --> 00:03:14,880 Speaker 3: so you get a steeper curve that way. I don't 68 00:03:14,919 --> 00:03:17,160 Speaker 3: think ten and thirty year yields are going to back 69 00:03:17,240 --> 00:03:20,400 Speaker 3: up materially from current levels, so you can still get 70 00:03:20,400 --> 00:03:22,600 Speaker 3: a steepener with a front end rally. As far as 71 00:03:22,680 --> 00:03:27,440 Speaker 3: mortgage rates dropping in line with each incremental quarter point cut, 72 00:03:27,520 --> 00:03:30,120 Speaker 3: good luck. The mortgage market hasn't been functioning that way, 73 00:03:30,320 --> 00:03:32,440 Speaker 3: and so I don't think that rate cuts will solve 74 00:03:32,840 --> 00:03:35,400 Speaker 3: the housing market. The housing market has a supply problem 75 00:03:35,480 --> 00:03:38,320 Speaker 3: as much as it does a rate problem. 76 00:03:38,560 --> 00:03:43,120 Speaker 2: Fascinating on an eventful Friday, not boring, to say the least. 77 00:03:43,520 --> 00:03:47,800 Speaker 2: Damien Sassaur with Ian Lingoln of BEMO Capital Markets. 78 00:03:47,400 --> 00:03:51,280 Speaker 5: And talk to us about the runway for continued dollar weakness. 79 00:03:51,360 --> 00:03:53,360 Speaker 5: Is this really the end of king dollar? I mean, 80 00:03:53,400 --> 00:03:55,760 Speaker 5: how much lower can euro dollar go here? 81 00:03:55,880 --> 00:03:56,320 Speaker 4: Well? 82 00:03:56,320 --> 00:03:57,280 Speaker 5: Can the dollar go here? 83 00:03:58,840 --> 00:04:02,080 Speaker 3: Well to a largest It depends on how successful the 84 00:04:02,120 --> 00:04:06,080 Speaker 3: administration is in balancing trade, because if we actually have 85 00:04:06,360 --> 00:04:08,800 Speaker 3: a balanced trade deficit, then there won't be as many 86 00:04:08,840 --> 00:04:12,200 Speaker 3: dollars going out into the global economy to be recycled 87 00:04:12,240 --> 00:04:14,720 Speaker 3: back into treasuries at the end of the day. I 88 00:04:14,840 --> 00:04:17,720 Speaker 3: do think that the dollar will remain the reserve currency, 89 00:04:18,040 --> 00:04:22,080 Speaker 3: and if that's the case, there'll be a stabilization at 90 00:04:22,080 --> 00:04:26,240 Speaker 3: some stage but I'm very hesitant about wanting to go 91 00:04:26,279 --> 00:04:29,800 Speaker 3: aggressively long the dollar given all of the credibility issues. 92 00:04:30,640 --> 00:04:32,560 Speaker 5: But way, look, it yields here in the US to 93 00:04:32,839 --> 00:04:34,880 Speaker 5: relative to the rest of the world. I mean they're high, 94 00:04:34,960 --> 00:04:37,240 Speaker 5: you know. And the carry trade works. I mean, it's 95 00:04:37,279 --> 00:04:40,120 Speaker 5: still working this year, despite what anybody else would have 96 00:04:40,160 --> 00:04:42,240 Speaker 5: told you coming into twenty twenty five. I mean the 97 00:04:42,279 --> 00:04:45,080 Speaker 5: carry trade works. And I mean you're not funding in 98 00:04:45,160 --> 00:04:46,120 Speaker 5: dollars anymore, are you. 99 00:04:47,720 --> 00:04:50,200 Speaker 3: Yeah, that's a fair point. The carry trade works, but 100 00:04:50,240 --> 00:04:53,040 Speaker 3: it only works as long as, as you point out, 101 00:04:53,320 --> 00:04:56,120 Speaker 3: rates are relatively high. When the Fed starts cutting rates, 102 00:04:56,160 --> 00:04:59,039 Speaker 3: that should put downside pressure on the dollar, not upside pressure. 103 00:04:59,160 --> 00:05:01,599 Speaker 3: And the question becomes how much of that is priced in? 104 00:05:01,839 --> 00:05:02,840 Speaker 3: And I think not enough. 105 00:05:03,400 --> 00:05:08,480 Speaker 2: You're pushing against in the panic of price down, yield 106 00:05:08,600 --> 00:05:10,920 Speaker 2: up and say the ten year piece, even the seven 107 00:05:11,320 --> 00:05:14,479 Speaker 2: year as well. Do you still stick with a vector 108 00:05:14,680 --> 00:05:19,239 Speaker 2: of lower yields out eighteen months? 109 00:05:19,640 --> 00:05:22,640 Speaker 3: Yeah, our year in call for tins is still three 110 00:05:22,720 --> 00:05:25,840 Speaker 3: eighty five. Well, I think by eighteen months from now 111 00:05:25,920 --> 00:05:29,080 Speaker 3: we could be closer to three fifty three twenty five. 112 00:05:29,440 --> 00:05:31,640 Speaker 2: And the time I got left with you, mister lingol 113 00:05:31,640 --> 00:05:33,960 Speaker 2: and I want to talk about Canada. You've got a 114 00:05:34,000 --> 00:05:37,360 Speaker 2: pooling of research at the Bank of Montreal. For those 115 00:05:37,400 --> 00:05:40,800 Speaker 2: of you folks are even one hundred and fifty years ago, 116 00:05:41,160 --> 00:05:43,479 Speaker 2: Bank of Montreal was sort of like the Bank of 117 00:05:43,560 --> 00:05:47,360 Speaker 2: England of Canada and Ian Lincoln with all of your 118 00:05:47,360 --> 00:05:52,479 Speaker 2: research capabilities, give us a BMO update on the impact 119 00:05:52,560 --> 00:05:56,200 Speaker 2: of Trump tariffs on mister Kearney and your Canada. 120 00:05:57,880 --> 00:06:00,560 Speaker 3: So it hasn't been good in terms of what the 121 00:06:00,600 --> 00:06:04,160 Speaker 3: tariffs mean for the Canadian economy. We've already seen the 122 00:06:04,200 --> 00:06:07,480 Speaker 3: Bank of Canada respond, would expect more. There's a lot 123 00:06:07,480 --> 00:06:09,640 Speaker 3: of uncertainty and I think at the end of the day, 124 00:06:10,040 --> 00:06:13,400 Speaker 3: the relationship between Canada and the US will weather the storm, 125 00:06:13,680 --> 00:06:16,760 Speaker 3: but it has been recast in a material way because 126 00:06:16,800 --> 00:06:17,839 Speaker 3: of Trump's trade war. 127 00:06:18,040 --> 00:06:20,680 Speaker 4: Ailing and thank you so much to Female Capital. Martin two. 128 00:06:26,080 --> 00:06:29,640 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 129 00:06:29,720 --> 00:06:32,880 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 130 00:06:32,960 --> 00:06:36,640 Speaker 1: Applecarplay and Android Otto with the Bloomberg Business app, or 131 00:06:36,760 --> 00:06:38,280 Speaker 1: watch US live on YouTube. 132 00:06:38,640 --> 00:06:40,440 Speaker 4: Joining us now is people and my people. 133 00:06:40,440 --> 00:06:42,840 Speaker 2: I'm going to argue in for months about trying to 134 00:06:42,880 --> 00:06:45,960 Speaker 2: get him in your Lawrence McDonald joins us he made 135 00:06:46,040 --> 00:06:49,320 Speaker 2: waves years ago, a colossal failure of common sense. 136 00:06:49,360 --> 00:06:52,040 Speaker 4: That was my biography, How to listen. 137 00:06:51,880 --> 00:06:55,120 Speaker 2: To Americans speak as the latest effort. Larry McDonald in 138 00:06:55,160 --> 00:06:57,880 Speaker 2: the studio today. Great to have you here, and I 139 00:06:57,920 --> 00:07:00,440 Speaker 2: want to go right to where Damien was. You had 140 00:07:00,480 --> 00:07:03,600 Speaker 2: my essay of the Year two years ago where you 141 00:07:03,680 --> 00:07:08,880 Speaker 2: walk through in about twelve paragraphs the wall of money 142 00:07:09,360 --> 00:07:10,440 Speaker 2: that's out there. 143 00:07:10,960 --> 00:07:12,280 Speaker 4: It hasn't changed, has it. 144 00:07:13,000 --> 00:07:16,800 Speaker 6: Well, you know what's fascinating Tom. In the last two 145 00:07:16,800 --> 00:07:21,360 Speaker 6: to three weeks. The rrp's coming down again and we 146 00:07:21,440 --> 00:07:24,560 Speaker 6: don't have that release valve that we've normally have had. 147 00:07:24,960 --> 00:07:27,680 Speaker 6: So in the last couple of weeks something has changed 148 00:07:27,680 --> 00:07:33,720 Speaker 6: a little bit because that's the liquidity really, juggernaut is 149 00:07:33,760 --> 00:07:35,360 Speaker 6: the RP. That's been the case. 150 00:07:35,160 --> 00:07:36,160 Speaker 4: For a long se r RP. 151 00:07:36,320 --> 00:07:39,960 Speaker 6: For Lisa Miteo the offensive a reverse repo facility. 152 00:07:40,000 --> 00:07:41,480 Speaker 5: Oh good, And so I. 153 00:07:41,440 --> 00:07:43,720 Speaker 4: Have no idea what that is, Lisa, So stay with it. 154 00:07:43,760 --> 00:07:45,560 Speaker 5: So it's McDonald, it's going to go with it. 155 00:07:46,040 --> 00:07:47,960 Speaker 6: But you know, as a former Lehman trader, I just 156 00:07:47,960 --> 00:07:50,160 Speaker 6: want to say, I tell my wife wants some money 157 00:07:50,200 --> 00:07:52,280 Speaker 6: if we sell a million books will break even on 158 00:07:52,320 --> 00:07:53,200 Speaker 6: our Lehman stock. 159 00:07:53,480 --> 00:07:55,080 Speaker 5: Right, that's good, Yeah, thank you. 160 00:07:56,640 --> 00:07:59,520 Speaker 6: But but to get back to liquidity and Lehman and 161 00:07:59,560 --> 00:08:02,600 Speaker 6: what's happened now, this is you're gonna love this time. 162 00:08:02,720 --> 00:08:05,520 Speaker 6: We did an ideas dinner in San Francisco two weeks 163 00:08:05,520 --> 00:08:08,600 Speaker 6: ago and I was with some of the big family 164 00:08:09,120 --> 00:08:12,040 Speaker 6: CIOs that run money for them in the valley, for 165 00:08:12,120 --> 00:08:15,400 Speaker 6: the big AI type players, and what they said was, 166 00:08:15,920 --> 00:08:18,440 Speaker 6: you know, when academics look at liquidity, they look at 167 00:08:18,440 --> 00:08:21,880 Speaker 6: the RP. The guys in the valley that are tracking momentum, 168 00:08:21,960 --> 00:08:29,200 Speaker 6: they track meticulously these fifteen verticals of tertiary assets versus 169 00:08:29,640 --> 00:08:33,280 Speaker 6: versus established. All that means in English is say arc 170 00:08:33,360 --> 00:08:37,960 Speaker 6: stocks versus the queues, or say companies with ten billion 171 00:08:38,000 --> 00:08:39,960 Speaker 6: market caps and no sales. That's another one. 172 00:08:40,040 --> 00:08:42,520 Speaker 2: Right, is the money gonna move? The wall of money 173 00:08:42,559 --> 00:08:45,200 Speaker 2: that you identified, is it going to move? 174 00:08:45,280 --> 00:08:47,920 Speaker 6: Okay, So this gets back to my point. The tertiary 175 00:08:47,960 --> 00:08:51,400 Speaker 6: assets the last ten days have been starting to underperform 176 00:08:51,600 --> 00:08:55,720 Speaker 6: established solana versus bitcoin. So that tells you the wall 177 00:08:55,760 --> 00:08:58,920 Speaker 6: of money is receding, and it also lines up with 178 00:08:58,960 --> 00:09:03,520 Speaker 6: the decline in the So something's going on. Liquidity is 179 00:09:03,559 --> 00:09:06,480 Speaker 6: drying up to some extent. This is just the genesis 180 00:09:06,520 --> 00:09:06,720 Speaker 6: of it. 181 00:09:06,760 --> 00:09:09,080 Speaker 5: Well, Larry, I'd love to ask you what wine they 182 00:09:09,080 --> 00:09:11,720 Speaker 5: were serving at that dinner with all the Silicon Valley types. 183 00:09:11,720 --> 00:09:13,560 Speaker 5: But you know we're not gonna talk about California Cats. 184 00:09:13,600 --> 00:09:16,320 Speaker 5: Total assets at the four world's four largest central banks. 185 00:09:16,320 --> 00:09:18,160 Speaker 5: I'm talking the FED, the ECB, the BOJ and the 186 00:09:18,160 --> 00:09:21,080 Speaker 5: PBOC has been in decline since March of twenty twenty two, 187 00:09:21,280 --> 00:09:24,440 Speaker 5: when the Feds first started raising rates. But that seems 188 00:09:24,440 --> 00:09:26,439 Speaker 5: to be declining. I just put out of deck this morning. 189 00:09:26,480 --> 00:09:28,280 Speaker 5: I have a great shart in them. Yeah, toot my 190 00:09:28,280 --> 00:09:31,120 Speaker 5: own horn here. But it looks like central bank boundaries 191 00:09:31,120 --> 00:09:33,200 Speaker 5: are going to start expanding yet again. Is that a 192 00:09:33,200 --> 00:09:37,959 Speaker 5: good thing or a bad thing? Oh my god, sorry, Softball. 193 00:09:38,160 --> 00:09:40,080 Speaker 6: It's going to be a good It'll be a good 194 00:09:40,080 --> 00:09:42,560 Speaker 6: thing if we're in a crisis, right, it'll be a 195 00:09:42,559 --> 00:09:44,760 Speaker 6: bad thing if if if we're at this point in 196 00:09:44,760 --> 00:09:46,560 Speaker 6: the cycle, it's going to reaccelerate inflation. 197 00:09:46,840 --> 00:09:48,840 Speaker 2: Larry, this is a good point then, folks. It's the 198 00:09:48,840 --> 00:09:52,200 Speaker 2: Bear Trapp Report. You can get it from mister McDonald's people. 199 00:09:52,240 --> 00:09:55,359 Speaker 2: He doesn't talk to anybody by appointment. 200 00:09:55,760 --> 00:09:57,679 Speaker 4: Larry, are we in a crisis. 201 00:09:59,080 --> 00:10:02,720 Speaker 6: We're in a We're in a situation where we're going 202 00:10:02,800 --> 00:10:05,720 Speaker 6: to have a reacceleration of inflation and that's going to 203 00:10:05,720 --> 00:10:06,480 Speaker 6: create a crisis. 204 00:10:06,600 --> 00:10:07,280 Speaker 4: Mister Sas. 205 00:10:07,520 --> 00:10:09,880 Speaker 5: Yeah, FX reserves and central banks, let's talk about that. 206 00:10:09,920 --> 00:10:11,640 Speaker 5: We want to get into a plumbing of these markets, right. 207 00:10:11,679 --> 00:10:13,640 Speaker 5: I mean, it seems that you know, reserve levels at 208 00:10:13,720 --> 00:10:16,160 Speaker 5: least you look at China obviously, but broadly speaking, it 209 00:10:16,200 --> 00:10:18,760 Speaker 5: looks like central banks outside of the US they don't 210 00:10:18,760 --> 00:10:20,920 Speaker 5: need to hold US treasuries anymore. I mean, what else 211 00:10:20,960 --> 00:10:22,319 Speaker 5: where do they go? What do they I mean, is 212 00:10:22,360 --> 00:10:26,200 Speaker 5: there no demand for liquid you know, cash like assets 213 00:10:26,240 --> 00:10:27,840 Speaker 5: from central banks anymore? Is that the climbing? 214 00:10:28,360 --> 00:10:30,520 Speaker 6: Yes, and so we have less friends in the world. 215 00:10:30,600 --> 00:10:33,920 Speaker 6: That's why the Cent has been out there with the 216 00:10:33,960 --> 00:10:36,600 Speaker 6: bag of tricks. So when you talk to we have 217 00:10:36,640 --> 00:10:40,080 Speaker 6: a business on Bloomberg, a Bloomberg chat with some of 218 00:10:40,120 --> 00:10:41,800 Speaker 6: the largest hedge funds in the world. One of the 219 00:10:41,840 --> 00:10:44,080 Speaker 6: things I've been talking about in the last six weeks 220 00:10:44,160 --> 00:10:47,880 Speaker 6: is the Cents bag of tricks, where they're using a 221 00:10:47,960 --> 00:10:52,400 Speaker 6: number of new facilities to try to replace foreign treasury 222 00:10:52,440 --> 00:10:53,520 Speaker 6: buying because. 223 00:10:53,280 --> 00:10:55,360 Speaker 5: What of their facilities look like like what else is 224 00:10:55,400 --> 00:10:55,839 Speaker 5: there gold? 225 00:10:56,880 --> 00:10:59,480 Speaker 6: Well, you know, using forcing the banks to buy more 226 00:10:59,480 --> 00:11:02,680 Speaker 6: treasuries one, that's just to keep it simple. But when 227 00:11:02,679 --> 00:11:04,480 Speaker 6: you force the banks to buy more treasuries than that, 228 00:11:04,600 --> 00:11:07,800 Speaker 6: in essence, that's financial repression and the only way out 229 00:11:07,800 --> 00:11:09,320 Speaker 6: of a thirty seven This is what we talked about 230 00:11:09,320 --> 00:11:11,920 Speaker 6: in our book how to Listen to market Speak. The 231 00:11:11,920 --> 00:11:14,240 Speaker 6: only way out of a thirty seven trillion dollar debth 232 00:11:14,280 --> 00:11:18,000 Speaker 6: hole is massage interest rates below the rate of inflation. 233 00:11:18,440 --> 00:11:23,239 Speaker 6: Financial repression. That's very bullish for hard assets. That's why gold, bitcoin, 234 00:11:23,320 --> 00:11:26,320 Speaker 6: and platinum pladium are starting to outperform. 235 00:11:25,960 --> 00:11:28,199 Speaker 4: The silver miners. Tom The silver miners. 236 00:11:27,960 --> 00:11:31,120 Speaker 6: Are up sixty two percent this year versus the fangs 237 00:11:31,120 --> 00:11:35,520 Speaker 6: are only up five hard assets versus financials stock market up. 238 00:11:35,600 --> 00:11:38,480 Speaker 2: I mean, it's a grind higher, but it's a constructive grind, 239 00:11:38,840 --> 00:11:42,000 Speaker 2: and you know, earning season, they're delivering the goods, but 240 00:11:42,080 --> 00:11:44,960 Speaker 2: it's like twelve stocks are getting done and the rest 241 00:11:44,960 --> 00:11:47,880 Speaker 2: are flat on their back. Our listeners that they're not 242 00:11:47,920 --> 00:11:51,280 Speaker 2: as esoteric as SaaS Hour or you our listeners and 243 00:11:51,360 --> 00:11:54,360 Speaker 2: viewers are. They're just like, okay, into the weekend, What 244 00:11:54,640 --> 00:11:57,360 Speaker 2: God's name do I do with my four oh one 245 00:11:57,440 --> 00:11:58,520 Speaker 2: k speak. 246 00:11:58,640 --> 00:12:02,280 Speaker 6: Okay, First of all, if you look at the Bloomberg terminal, 247 00:12:02,559 --> 00:12:07,240 Speaker 6: which I do twenty times a day, volatility in August 248 00:12:07,640 --> 00:12:11,199 Speaker 6: in September seasonally it's a trouble spot. You want to 249 00:12:11,200 --> 00:12:17,360 Speaker 6: be raising cash into very for volatility. Probably the worst 250 00:12:17,440 --> 00:12:19,440 Speaker 6: or I guess the best month of the year for 251 00:12:19,880 --> 00:12:22,360 Speaker 6: is the Vicks in August, right the second best might 252 00:12:22,400 --> 00:12:25,160 Speaker 6: be September. So for people listening to us right now, 253 00:12:25,160 --> 00:12:26,880 Speaker 6: that's when you want to raise cash and you want 254 00:12:26,920 --> 00:12:29,800 Speaker 6: to put money to work when there's real fear like 255 00:12:29,840 --> 00:12:31,520 Speaker 6: we had in April and last August. 256 00:12:31,800 --> 00:12:33,439 Speaker 5: Last August we had a. 257 00:12:33,240 --> 00:12:35,560 Speaker 6: Very meaningful drawdown, and so you want to have raise 258 00:12:35,640 --> 00:12:37,640 Speaker 6: cash and be there for the pain. 259 00:12:37,679 --> 00:12:39,760 Speaker 5: How do you build balance and fixed and come portfolios today? 260 00:12:39,760 --> 00:12:41,600 Speaker 5: I mean if no one's buying treasuries, and I mean, 261 00:12:41,840 --> 00:12:43,840 Speaker 5: let's be clear, if you look at em local debt 262 00:12:43,840 --> 00:12:45,880 Speaker 5: for example, which is you know, you know it should 263 00:12:45,920 --> 00:12:48,199 Speaker 5: be yielding way over US treasury, it's only one hundred 264 00:12:48,200 --> 00:12:49,520 Speaker 5: and eighty three BIPs over. 265 00:12:49,880 --> 00:12:50,439 Speaker 7: I don't know that. 266 00:12:50,600 --> 00:12:53,079 Speaker 5: No, it's almost have one of its tightest done record. 267 00:12:53,120 --> 00:12:54,800 Speaker 5: And so I mean if you look at em US 268 00:12:54,800 --> 00:12:58,079 Speaker 5: ten year, you spreads. I mean fourteen of eighteen fourteen 269 00:12:58,120 --> 00:13:00,680 Speaker 5: of eighteen countries are well below the three or average. 270 00:13:00,679 --> 00:13:02,880 Speaker 5: So I mean, just thinking out loud here, what else 271 00:13:02,880 --> 00:13:03,320 Speaker 5: do you buy? 272 00:13:03,679 --> 00:13:03,959 Speaker 2: Right? 273 00:13:04,400 --> 00:13:07,960 Speaker 6: The EMLC, the Emerging Market Local Currency bond fund is 274 00:13:08,080 --> 00:13:12,760 Speaker 6: outperforming the TLT Treasury Fund in a one year, three year, 275 00:13:12,800 --> 00:13:14,960 Speaker 6: and five year bucket air we got. And that's that 276 00:13:15,080 --> 00:13:16,920 Speaker 6: weakness in the dollar we've seen this year. 277 00:13:17,000 --> 00:13:18,160 Speaker 4: I'm almost out of time. 278 00:13:18,480 --> 00:13:22,680 Speaker 2: Your charm is you have an optimism about the American system. 279 00:13:23,080 --> 00:13:25,679 Speaker 2: People say, always gloomy in that and it's a Friday 280 00:13:25,720 --> 00:13:29,800 Speaker 2: gloom crew, except you believe in the system. Okay, what 281 00:13:29,840 --> 00:13:32,760 Speaker 2: do we do after Trump? What does our financial system 282 00:13:32,840 --> 00:13:35,920 Speaker 2: do after the day to day shocks that we receive 283 00:13:36,000 --> 00:13:36,920 Speaker 2: from President Trump? 284 00:13:36,960 --> 00:13:38,880 Speaker 6: So that's what we talk about in our book, Tom, 285 00:13:39,160 --> 00:13:42,920 Speaker 6: We're talking about a whole new portfolio construction. People have 286 00:13:43,000 --> 00:13:45,440 Speaker 6: to get along in nineteen sixty eight to eighty one 287 00:13:45,559 --> 00:13:50,440 Speaker 6: type portfolio where your long companies that own assets. You're 288 00:13:50,800 --> 00:13:54,040 Speaker 6: all kinds of metals, copper copper companies. Right now, the 289 00:13:54,160 --> 00:13:58,920 Speaker 6: COPX is in the perfect spot. Globally, we're undersupplied. The 290 00:13:59,120 --> 00:14:02,400 Speaker 6: artificial intelligen's boom, Tom, we have a power grid in 291 00:14:02,440 --> 00:14:05,680 Speaker 6: the United States that needs a two trillion dollar rebuild, 292 00:14:05,920 --> 00:14:07,760 Speaker 6: all of these growth assumption shumpsons. 293 00:14:07,800 --> 00:14:10,600 Speaker 4: Can you seven this morning? Can you kill? 294 00:14:10,600 --> 00:14:14,280 Speaker 6: But I want to own the COPX because that's going 295 00:14:14,360 --> 00:14:16,320 Speaker 6: to give you the power to fund AI. 296 00:14:16,800 --> 00:14:20,320 Speaker 2: I know you sold the movie rights to the latest book, DiCaprio. 297 00:14:20,560 --> 00:14:21,680 Speaker 4: Is that what we're looking for? 298 00:14:23,040 --> 00:14:26,120 Speaker 6: Well, you know, the latest book right now number number 299 00:14:26,120 --> 00:14:28,720 Speaker 6: within the top three on Amazon right now. How to 300 00:14:28,800 --> 00:14:31,520 Speaker 6: listen when market speak top three again. By the way, 301 00:14:31,560 --> 00:14:33,680 Speaker 6: I'm really proud to I've got two books right now, 302 00:14:33,800 --> 00:14:35,880 Speaker 6: Larry McDonald, two books in the top forty. 303 00:14:36,040 --> 00:14:36,880 Speaker 4: Okay, let's good. 304 00:14:36,960 --> 00:14:40,920 Speaker 2: Lisa Motel's books number one and Glenden Free Breakfast. Lawrence McDonald, 305 00:14:41,160 --> 00:14:42,160 Speaker 2: thank you so much. 306 00:14:42,280 --> 00:14:46,200 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 307 00:14:46,200 --> 00:14:49,520 Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto 308 00:14:49,640 --> 00:14:52,600 Speaker 1: with the Bloomberg Business app. You can also listen live 309 00:14:52,680 --> 00:14:56,240 Speaker 1: on Amazon Alexa from our flagship New York station. Just 310 00:14:56,320 --> 00:15:00,120 Speaker 1: say Alexa play Bloomberg eleven thirty Bloomberg reporting. 311 00:15:00,680 --> 00:15:03,920 Speaker 2: Trump Putin meeting in the next few days. Russia and 312 00:15:04,080 --> 00:15:07,640 Speaker 2: US agreed on the place for a potential meeting between 313 00:15:07,640 --> 00:15:11,120 Speaker 2: the presidents but won't announce it yet. We're here to 314 00:15:11,160 --> 00:15:14,760 Speaker 2: break news. They'll be holding that at dan Tanabaum summer place. 315 00:15:15,080 --> 00:15:15,840 Speaker 4: He joins us. 316 00:15:15,840 --> 00:15:19,960 Speaker 2: Now from Oliver Wyman, Dan, you're sort an expert on this, 317 00:15:20,080 --> 00:15:22,280 Speaker 2: I mean at Oliver Wyman, between you and Hugh von 318 00:15:22,360 --> 00:15:29,320 Speaker 2: steinas it's shocking expertise about inside baseball between the United 319 00:15:29,360 --> 00:15:34,440 Speaker 2: States and Russia. What's your observation it would be the 320 00:15:34,480 --> 00:15:36,960 Speaker 2: best thing for mister Trump to bring up. 321 00:15:38,800 --> 00:15:42,760 Speaker 7: Well, firstly, Tom and we haven't planned for the meeting 322 00:15:42,800 --> 00:15:47,880 Speaker 7: here yet. There isn't really a good reason to even 323 00:15:48,000 --> 00:15:51,880 Speaker 7: have this summit. Let's remember there's been threat after threat 324 00:15:52,080 --> 00:15:54,760 Speaker 7: that President Trump has made towards the Russian government, towards 325 00:15:54,840 --> 00:15:58,600 Speaker 7: President Putin, decease hostilities, to work towards the ceasefire. They 326 00:15:58,640 --> 00:16:01,400 Speaker 7: haven't done any of that. Today day was actually supposed 327 00:16:01,400 --> 00:16:04,760 Speaker 7: to be a day where the President was to announce sanctions, 328 00:16:04,800 --> 00:16:07,360 Speaker 7: which you know, by my account, there have been zero 329 00:16:07,480 --> 00:16:10,800 Speaker 7: designations by the US government with respect to Russia since 330 00:16:10,840 --> 00:16:13,960 Speaker 7: Trump has taken office again. So to give this summit 331 00:16:14,120 --> 00:16:16,560 Speaker 7: with Putin in the first place sends really the wrong 332 00:16:16,600 --> 00:16:21,120 Speaker 7: message because Russia hasn't done anything favorably towards ending the conflict. 333 00:16:21,400 --> 00:16:23,520 Speaker 4: Do we have leverage? 334 00:16:23,840 --> 00:16:26,680 Speaker 7: We absolutely do. I mean, it is ironic that the 335 00:16:26,720 --> 00:16:29,240 Speaker 7: President has done more to hurt the Swiss economy than 336 00:16:29,280 --> 00:16:31,400 Speaker 7: the Russian economy the last six months. 337 00:16:32,160 --> 00:16:33,760 Speaker 4: There absolutely is leverage. 338 00:16:33,840 --> 00:16:36,400 Speaker 7: The focus on India, for instance, in trying to get 339 00:16:36,400 --> 00:16:40,040 Speaker 7: them to stop purchasing Russian oil by using tariffs, which 340 00:16:40,080 --> 00:16:43,280 Speaker 7: really will enrich the US at the cost of Ukraine. 341 00:16:43,440 --> 00:16:46,440 Speaker 7: There's primary and secondary sanctions that could be used on 342 00:16:46,480 --> 00:16:49,520 Speaker 7: Indian entities to essentially threaten to cut them off from 343 00:16:49,560 --> 00:16:52,960 Speaker 7: access to the US economy, a far greater threat if 344 00:16:52,960 --> 00:16:55,560 Speaker 7: the objective is to get them to stop buying Russian oil. 345 00:16:55,840 --> 00:16:56,880 Speaker 4: So the leverage is there. 346 00:16:56,960 --> 00:16:59,200 Speaker 7: The President hasn't done anything yet. 347 00:16:59,200 --> 00:17:01,080 Speaker 5: Dan, And part of the press and strategy was to 348 00:17:01,200 --> 00:17:04,320 Speaker 5: increase domestic manufacturing here at home. We know that Oliver 349 00:17:04,400 --> 00:17:07,200 Speaker 5: Wyman one of the most successful management consulting firms here 350 00:17:07,200 --> 00:17:09,200 Speaker 5: in the US. And then I see your note and 351 00:17:09,240 --> 00:17:12,400 Speaker 5: I look at this word and the quotes Empanada. Everyone 352 00:17:12,520 --> 00:17:16,720 Speaker 5: makes promises and never actually does anything. Is that what 353 00:17:16,800 --> 00:17:20,520 Speaker 5: you're telling clients right now? And Panada, I'm. 354 00:17:20,359 --> 00:17:21,000 Speaker 4: Not telling them. 355 00:17:21,040 --> 00:17:23,960 Speaker 7: Another media outlet had actually coined that the other day 356 00:17:24,080 --> 00:17:26,600 Speaker 7: but love I think about it, some of the scale 357 00:17:26,640 --> 00:17:31,200 Speaker 7: of these announcements of investment in the US are fairly high. 358 00:17:31,840 --> 00:17:35,040 Speaker 7: You haven't seen anyone really moving on some of these 359 00:17:35,080 --> 00:17:38,680 Speaker 7: committed investments thus far, and from what we've seen going 360 00:17:38,720 --> 00:17:42,160 Speaker 7: back to the first Trump term, no one's really validating 361 00:17:42,200 --> 00:17:45,280 Speaker 7: that these investments have been made good on. So it 362 00:17:45,320 --> 00:17:48,000 Speaker 7: does seem like some of my clients in an attempt 363 00:17:48,080 --> 00:17:51,639 Speaker 7: to curry favor, to stay out of negative focus of 364 00:17:51,680 --> 00:17:56,360 Speaker 7: the administration or announcing deals. They may be serious about them, 365 00:17:56,400 --> 00:18:00,159 Speaker 7: but when you see hundred six hundred billion dollar investments 366 00:18:00,520 --> 00:18:04,320 Speaker 7: over however long a time horizon, I'm not since the 367 00:18:04,359 --> 00:18:06,040 Speaker 7: companies are going to make good on all of these. 368 00:18:06,200 --> 00:18:09,840 Speaker 2: This is sakermer Commune Tokyo for Bloomberg folks. The Prime 369 00:18:09,880 --> 00:18:13,520 Speaker 2: Minister of Japan is hoping to stay on as calls 370 00:18:13,560 --> 00:18:17,439 Speaker 2: grow for him to exit, and part of it is 371 00:18:17,520 --> 00:18:22,359 Speaker 2: because of the deal we did with Japan that's not 372 00:18:22,520 --> 00:18:27,160 Speaker 2: in writing and open to completely polarized interpretation. 373 00:18:27,359 --> 00:18:30,919 Speaker 7: I mean, that's what it challenge. We have frameworks, we 374 00:18:31,000 --> 00:18:34,560 Speaker 7: don't have specifics. Even on the tariff strategy, there's a 375 00:18:34,600 --> 00:18:37,959 Speaker 7: forty percent tariff on transhipped goods. There's no guidance out 376 00:18:38,000 --> 00:18:41,359 Speaker 7: of the US government on what even constitutes transhipt goods. 377 00:18:41,680 --> 00:18:44,000 Speaker 7: So you take all of these together, there's still a 378 00:18:44,040 --> 00:18:46,959 Speaker 7: ton of uncertainty for my clients, for the market on 379 00:18:47,080 --> 00:18:50,160 Speaker 7: what actually will be moving forward. And we've seen there's 380 00:18:50,200 --> 00:18:53,000 Speaker 7: a tendency to pull some of these deals away to 381 00:18:53,119 --> 00:18:56,520 Speaker 7: readdress them going forward. So there's not really smooth air 382 00:18:56,600 --> 00:18:57,720 Speaker 7: that companies are seeing. 383 00:18:57,920 --> 00:19:00,160 Speaker 5: So Dan, I mean, then, but then correctly if I'm wrong. 384 00:19:00,240 --> 00:19:02,560 Speaker 5: I mean this effective tax rate that everybody's talking about 385 00:19:02,560 --> 00:19:05,320 Speaker 5: fifteen percent, sixteen to twenty percent, you know, I mean, 386 00:19:05,640 --> 00:19:07,879 Speaker 5: how are people coming up and actually calculating that with 387 00:19:08,119 --> 00:19:10,359 Speaker 5: any confidence? Is it a range in your mind? I mean, 388 00:19:10,440 --> 00:19:12,200 Speaker 5: is it fifteen to twenty? Is a ten to fifteen? 389 00:19:12,240 --> 00:19:13,080 Speaker 5: How do you look at things? 390 00:19:13,680 --> 00:19:16,520 Speaker 7: I mean, that is the challenge is the movement is 391 00:19:16,600 --> 00:19:19,280 Speaker 7: so great that trying to take a look at some 392 00:19:19,760 --> 00:19:23,440 Speaker 7: of what this go forward taxes look like is complicated. 393 00:19:23,520 --> 00:19:27,040 Speaker 7: What I'm looking at, probably more closely, are the losses 394 00:19:27,080 --> 00:19:29,400 Speaker 7: that businesses in the US have been announcing in their 395 00:19:29,400 --> 00:19:32,359 Speaker 7: earnings over the last few weeks, because that seems to 396 00:19:32,359 --> 00:19:35,199 Speaker 7: be a bit more real as at least a looking 397 00:19:35,280 --> 00:19:39,520 Speaker 7: backwards issue to try and go where ultimately companies can 398 00:19:39,600 --> 00:19:42,040 Speaker 7: try and recoup some of these losses going forward in 399 00:19:42,040 --> 00:19:43,399 Speaker 7: the form of price increases. 400 00:19:44,040 --> 00:19:46,800 Speaker 2: Dan, if you do have the Trump Putin meeting at 401 00:19:46,840 --> 00:19:50,800 Speaker 2: your summer place, I would suggest a liquor manifest that I. 402 00:19:50,760 --> 00:19:53,960 Speaker 4: Saw Churchill had at Yalta. I think that would be 403 00:19:54,000 --> 00:19:55,680 Speaker 4: some that would smooth things. 404 00:19:55,720 --> 00:19:56,200 Speaker 5: Hault. Sure. 405 00:19:56,920 --> 00:20:00,000 Speaker 7: I mean I don't have diet coke here and can't 406 00:20:00,080 --> 00:20:03,640 Speaker 7: took a well done Hamburger, so I'm not sure what 407 00:20:03,680 --> 00:20:05,040 Speaker 7: my abilities would be to host. 408 00:20:05,240 --> 00:20:08,560 Speaker 2: Dan. Thank you so us d'antanobaum and Oliver Wyman with 409 00:20:08,600 --> 00:20:15,879 Speaker 2: you Von Steins So just great, great perspective there. 410 00:20:17,160 --> 00:20:21,080 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 411 00:20:21,080 --> 00:20:24,399 Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto 412 00:20:24,520 --> 00:20:27,360 Speaker 1: with the Bloomberg Business app. You can also watch us 413 00:20:27,400 --> 00:20:31,200 Speaker 1: live every weekday on YouTube and always on the Bloomberg Terminal. 414 00:20:31,280 --> 00:20:35,359 Speaker 2: Arguably my academic paper of the summer, even though it 415 00:20:35,440 --> 00:20:39,080 Speaker 2: came out two years ago, joining us now from Harvard 416 00:20:39,160 --> 00:20:41,440 Speaker 2: with all of the recent acclaim of the John Bates 417 00:20:41,480 --> 00:20:46,960 Speaker 2: Clerk Awards. Stephanie Stansheva, her expertise in the taxation economics, 418 00:20:46,960 --> 00:20:51,359 Speaker 2: her social Economics lab and Stephanie this paper, which I 419 00:20:51,560 --> 00:20:56,800 Speaker 2: absolutely adore with non Chanoy and Sequera is zero some 420 00:20:57,119 --> 00:21:01,960 Speaker 2: thinking in the roots of US political differences. This goes 421 00:21:02,040 --> 00:21:06,119 Speaker 2: to a static analysis analysis. It goes to almost a 422 00:21:06,200 --> 00:21:09,360 Speaker 2: mercantilis thinking, and an eye for an eye, a. 423 00:21:09,320 --> 00:21:10,359 Speaker 4: Tooth for a tooth. 424 00:21:10,960 --> 00:21:14,960 Speaker 2: How do we get beyond our new vogue of zero 425 00:21:15,080 --> 00:21:15,800 Speaker 2: sum thinking. 426 00:21:17,280 --> 00:21:20,760 Speaker 8: That's a great question, and indeed you're right to point 427 00:21:20,760 --> 00:21:23,000 Speaker 8: out that what we show in the paper is that 428 00:21:23,040 --> 00:21:26,680 Speaker 8: this zero sum mentality, this feeling that if you get more, 429 00:21:27,040 --> 00:21:28,919 Speaker 8: this means I must be getting less. You know that 430 00:21:29,000 --> 00:21:31,080 Speaker 8: we live in a world which is a fixed pie. 431 00:21:31,440 --> 00:21:33,880 Speaker 8: So someone gets a larger slice of the pie, someone 432 00:21:33,920 --> 00:21:36,800 Speaker 8: else must be getting a smaller one. This mindset has 433 00:21:36,800 --> 00:21:39,720 Speaker 8: actually been increasing. You can see it in the US 434 00:21:40,000 --> 00:21:43,440 Speaker 8: in the fact that younger generations today are much more 435 00:21:43,520 --> 00:21:47,800 Speaker 8: likely to hold such zero some views than the older generations. 436 00:21:47,920 --> 00:21:50,720 Speaker 8: And we can trace this back to the economic environment 437 00:21:50,760 --> 00:21:53,320 Speaker 8: that people live in, which is also a way to 438 00:21:53,359 --> 00:21:58,040 Speaker 8: think about potential solutions. The younger generations today have grown 439 00:21:58,119 --> 00:22:00,840 Speaker 8: up in times with lower mobility, lower growth, and the 440 00:22:00,880 --> 00:22:04,320 Speaker 8: older generations and so at this macro level, this has 441 00:22:04,359 --> 00:22:08,280 Speaker 8: really influenced their thinking about these issues. You can also 442 00:22:08,280 --> 00:22:11,040 Speaker 8: see it at the individual level. We have people's whole 443 00:22:11,080 --> 00:22:15,120 Speaker 8: family histories and ancestries in our project, and you can 444 00:22:15,160 --> 00:22:18,200 Speaker 8: see that, regardless of the macro environment, if your own 445 00:22:18,200 --> 00:22:20,320 Speaker 8: family has done better over time, you know, if you 446 00:22:20,320 --> 00:22:23,000 Speaker 8: are doing better than your parents, you're also less likely 447 00:22:23,040 --> 00:22:24,520 Speaker 8: to think in zero sometimes. 448 00:22:24,600 --> 00:22:27,240 Speaker 4: Well, there's the thing, Steffanie, that I find so interesting here. 449 00:22:27,280 --> 00:22:29,439 Speaker 2: And you know, the romance of getting back to the 450 00:22:29,480 --> 00:22:33,359 Speaker 2: economics and political economics of Benjamin Freeman are over at 451 00:22:33,440 --> 00:22:37,679 Speaker 2: MIT Simon Johnson, the recent Nobel Prize winner. But the 452 00:22:37,800 --> 00:22:41,240 Speaker 2: thing to me is, what is the prescription to get 453 00:22:41,320 --> 00:22:45,720 Speaker 2: back to the optimism we created out of the Atlantic 454 00:22:46,359 --> 00:22:49,840 Speaker 2: Charter in nineteen forty one? Or is this what we 455 00:22:49,920 --> 00:22:52,920 Speaker 2: have for the future, this zero sum thinking. 456 00:22:54,160 --> 00:22:56,680 Speaker 8: Yeah, I want to be really cautious here because we're 457 00:22:56,720 --> 00:22:59,719 Speaker 8: not saying that zero sum thinking is necessarily a bias. 458 00:23:00,000 --> 00:23:03,000 Speaker 8: Shouldn't be dismissed as just a bias in the people. 459 00:23:03,040 --> 00:23:06,920 Speaker 8: We show that it's deeply correlated to people's experiences. People 460 00:23:06,960 --> 00:23:11,000 Speaker 8: who have zero sum experiences, including in their ancestry, are 461 00:23:11,080 --> 00:23:13,720 Speaker 8: much more likely to hold this mindset than people who 462 00:23:13,720 --> 00:23:17,240 Speaker 8: have had positive some experiences. So it's something that's deeply 463 00:23:17,320 --> 00:23:21,439 Speaker 8: rooted in people's realities, and this is something that we 464 00:23:21,560 --> 00:23:23,600 Speaker 8: have to think about very seriously. So when we think 465 00:23:23,640 --> 00:23:27,840 Speaker 8: about policies, policies themselves can make the world more zero sum, 466 00:23:28,440 --> 00:23:31,040 Speaker 8: or they can make the world less zero sum. It's 467 00:23:31,160 --> 00:23:34,080 Speaker 8: rare to find entirely win win policies, but there are 468 00:23:34,080 --> 00:23:36,479 Speaker 8: policies that lead us more in a win win direction, 469 00:23:36,640 --> 00:23:39,880 Speaker 8: especially over the longer term, you know, researchers for instance, 470 00:23:40,000 --> 00:23:44,399 Speaker 8: funding for children, like the child tax credit. These are 471 00:23:44,440 --> 00:23:46,240 Speaker 8: things that over the long run sort of pay for 472 00:23:46,280 --> 00:23:51,240 Speaker 8: themselves in better opportunities, in better economic outcomes for those families. 473 00:23:51,640 --> 00:23:54,880 Speaker 8: Innovation policy is something that we think can create win 474 00:23:54,960 --> 00:23:59,080 Speaker 8: win solutions, you know, and benefit benefit more people. So 475 00:23:59,119 --> 00:24:02,080 Speaker 8: there's policies that can turn the world, you know, into 476 00:24:02,080 --> 00:24:03,479 Speaker 8: a more positive some direction. 477 00:24:03,760 --> 00:24:06,240 Speaker 5: Well, Stephanie, I mean, the premise of this zero s 478 00:24:06,400 --> 00:24:08,560 Speaker 5: mindset is the belief that you know, resources are fixed, 479 00:24:08,600 --> 00:24:10,720 Speaker 5: that the pie is fixed. It's not a balloon that's expanding. 480 00:24:10,760 --> 00:24:12,439 Speaker 5: I mean, I grew up, I was born in nineteen 481 00:24:12,440 --> 00:24:14,720 Speaker 5: seventy four, but I'm still a product of the sixties, 482 00:24:14,760 --> 00:24:16,520 Speaker 5: you know, free love, all that good stuff. So is 483 00:24:16,520 --> 00:24:19,439 Speaker 5: Lisa from Leonia. But you know, the reality is this 484 00:24:19,520 --> 00:24:22,800 Speaker 5: generation the consequences of the zero some mindset are they 485 00:24:22,840 --> 00:24:26,639 Speaker 5: really that bad? Is it really breeding distrust, conflict, reduced 486 00:24:26,640 --> 00:24:27,640 Speaker 5: cooperation all of that. 487 00:24:28,960 --> 00:24:31,840 Speaker 8: So we can trace the link between zero some thinking 488 00:24:31,960 --> 00:24:33,919 Speaker 8: and your policy views if you want, and what you 489 00:24:33,960 --> 00:24:37,159 Speaker 8: want to support. And one really important fact which is 490 00:24:37,200 --> 00:24:39,560 Speaker 8: pretty rare these days is this is not a part 491 00:24:39,640 --> 00:24:43,240 Speaker 8: is an issue. So zero some thinking is quite evenly 492 00:24:43,280 --> 00:24:46,800 Speaker 8: spread across both aisles of the political spectrum. So it 493 00:24:46,880 --> 00:24:50,159 Speaker 8: is not clearly a Democrat thing or Republican thing. It's 494 00:24:50,240 --> 00:24:53,520 Speaker 8: there on all sides. It's something that is more correlated 495 00:24:53,760 --> 00:24:57,280 Speaker 8: with more extreme ends of the political spectrum. And the 496 00:24:57,320 --> 00:25:00,159 Speaker 8: type of policies it makes you support is you know, 497 00:25:00,200 --> 00:25:02,119 Speaker 8: if you think the gains of rich people come at 498 00:25:02,160 --> 00:25:04,919 Speaker 8: the expense of the poor, then you're going to support 499 00:25:04,920 --> 00:25:09,640 Speaker 8: more distribution, you know, more progressive policies. If you think 500 00:25:09,680 --> 00:25:11,720 Speaker 8: that the gains of immigrants come at the expense of 501 00:25:11,720 --> 00:25:14,320 Speaker 8: non immigrants, you're going to also be quite anti immigrant, 502 00:25:14,520 --> 00:25:17,600 Speaker 8: which goes to show it really you know, cuts across 503 00:25:17,600 --> 00:25:21,119 Speaker 8: partisan lines here. You're going to be more anti free trade, 504 00:25:21,400 --> 00:25:24,040 Speaker 8: You're going to want to support you know, policies that 505 00:25:24,160 --> 00:25:27,400 Speaker 8: really benefit your in group or your own group more. 506 00:25:27,600 --> 00:25:29,879 Speaker 5: Well, Stephanie, President Trump always talks about, you know, this 507 00:25:30,000 --> 00:25:32,160 Speaker 5: is good for America, but can also be good for 508 00:25:32,359 --> 00:25:35,000 Speaker 5: trade partners of America. Win win situations as it were. 509 00:25:35,200 --> 00:25:38,160 Speaker 5: I mean, you know, is this zero sum mindset? 510 00:25:38,200 --> 00:25:38,359 Speaker 4: You know? 511 00:25:38,440 --> 00:25:40,320 Speaker 5: I mean, is there such a thing as a win 512 00:25:40,400 --> 00:25:41,160 Speaker 5: win situation? 513 00:25:42,800 --> 00:25:44,879 Speaker 8: There are win win situations? I think, you know, it 514 00:25:44,960 --> 00:25:48,359 Speaker 8: depends on the horizon we look at things. You know, 515 00:25:48,400 --> 00:25:51,280 Speaker 8: as I mentioned, there's policies which today might cost money, 516 00:25:51,280 --> 00:25:54,320 Speaker 8: so someone has to pay today, but over the medium run, 517 00:25:54,400 --> 00:25:57,880 Speaker 8: over the longer run, they create more benefits that can 518 00:25:58,000 --> 00:26:01,240 Speaker 8: you lift everyone. So it really on the horizon. And 519 00:26:01,280 --> 00:26:03,800 Speaker 8: then I think it also depends on necessarily how narrowly 520 00:26:03,840 --> 00:26:06,359 Speaker 8: we look at a situation. If I'm competing for a 521 00:26:06,400 --> 00:26:09,280 Speaker 8: promotion at work, then in the immediate this is zero sign. 522 00:26:09,320 --> 00:26:11,360 Speaker 8: If someone else gets the promotion, I won't get it. 523 00:26:11,640 --> 00:26:13,320 Speaker 8: But maybe if I take a step back and think 524 00:26:13,359 --> 00:26:16,600 Speaker 8: about how can we cooperate here, maybe there's a way, 525 00:26:16,680 --> 00:26:19,159 Speaker 8: you know, to make everybody more productive here and the 526 00:26:19,200 --> 00:26:22,600 Speaker 8: company do better, and then I could also benefit from this. 527 00:26:23,080 --> 00:26:25,439 Speaker 8: So not saying every situation can be win win and 528 00:26:25,480 --> 00:26:29,320 Speaker 8: again Zo some thinking is very rooted in people's realities 529 00:26:29,400 --> 00:26:32,640 Speaker 8: because they have experienced zero some situations. But I think 530 00:26:32,680 --> 00:26:35,399 Speaker 8: policy has a role to try to push us towards 531 00:26:35,440 --> 00:26:36,480 Speaker 8: more win win solutions. 532 00:26:36,520 --> 00:26:38,719 Speaker 2: It s having got time for one more quick question. 533 00:26:38,800 --> 00:26:41,960 Speaker 2: You're having a cup of coffee with President Trump, You're 534 00:26:41,960 --> 00:26:44,840 Speaker 2: having two scoops of ice cream for dessert with President Trump. 535 00:26:45,280 --> 00:26:48,800 Speaker 2: What would you say to the president about slipping away 536 00:26:48,880 --> 00:26:51,200 Speaker 2: from a neo mercantilist policy. 537 00:26:53,000 --> 00:26:56,439 Speaker 8: Well, to highlight basically the findings I think of this 538 00:26:56,600 --> 00:26:59,880 Speaker 8: research is really that we have to push towards more 539 00:27:00,040 --> 00:27:04,160 Speaker 8: positive some situations. And while that's not always possible, policy 540 00:27:04,280 --> 00:27:07,119 Speaker 8: is a really really powerful tool. So it shapes the world. 541 00:27:07,480 --> 00:27:09,640 Speaker 8: It has shaped the world. You can see through these 542 00:27:09,680 --> 00:27:13,119 Speaker 8: generations that have experienced very different growth, very different mobility, 543 00:27:13,480 --> 00:27:15,760 Speaker 8: and so I think this is a huge, you know, 544 00:27:16,440 --> 00:27:19,240 Speaker 8: a huge moment to try to create more win win 545 00:27:19,359 --> 00:27:22,560 Speaker 8: solutions and more positive some environments. 546 00:27:22,720 --> 00:27:26,720 Speaker 2: Stephanie, thank you so much, Stephanie Stensheva at Harvard And 547 00:27:26,760 --> 00:27:30,000 Speaker 2: of course the Acclaim earlier this year of winning John 548 00:27:30,040 --> 00:27:34,600 Speaker 2: Bates Clark metal hugely. It's like I think under forty 549 00:27:35,240 --> 00:27:36,320 Speaker 2: maybe it's under seventy. 550 00:27:36,359 --> 00:27:38,000 Speaker 5: I can't remember how I mean, I'm kidding. 551 00:27:38,480 --> 00:27:41,040 Speaker 4: That's a huge, huge. I thrilled that she could be 552 00:27:41,080 --> 00:27:42,679 Speaker 4: with us this morning. 553 00:27:43,000 --> 00:27:46,879 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 554 00:27:46,920 --> 00:27:49,919 Speaker 1: starting at seven am Eastern on Apple Corplay and Android 555 00:27:49,960 --> 00:27:53,000 Speaker 1: Auto with the Bloomberg Business app. You can also listen 556 00:27:53,080 --> 00:27:56,359 Speaker 1: live on Amazon Alexa from our flagship New York station. 557 00:27:56,880 --> 00:28:00,520 Speaker 1: Just say Alexa, play Bloomberg eleven thirty condemn. 558 00:28:01,040 --> 00:28:03,119 Speaker 2: At least it would tell you fired up with a 559 00:28:03,160 --> 00:28:05,560 Speaker 2: gluten free set on newspaper stories, What. 560 00:28:05,520 --> 00:28:06,880 Speaker 5: Do you have all right? 561 00:28:06,920 --> 00:28:09,200 Speaker 9: Okay, doctor is saying, I know you guys have dabbled 562 00:28:09,200 --> 00:28:12,520 Speaker 9: in AI, right. Have you used the chat GPT that much? 563 00:28:12,600 --> 00:28:14,600 Speaker 5: It's too much? Idea? I have it? 564 00:28:14,960 --> 00:28:16,840 Speaker 9: Well, doctor is saying there could be a side effect 565 00:28:16,840 --> 00:28:21,080 Speaker 9: to using chat butts like chat GPT. It's called AI psychosis. 566 00:28:21,200 --> 00:28:21,840 Speaker 5: Very serious. 567 00:28:21,880 --> 00:28:24,320 Speaker 9: Okay, So Wall Street Journal what they did to find 568 00:28:24,320 --> 00:28:26,919 Speaker 9: this out. They did a review and analysis of public 569 00:28:27,000 --> 00:28:30,440 Speaker 9: chats that were posted online. Okay, dozens of examples where 570 00:28:30,520 --> 00:28:36,640 Speaker 9: chat gpt actually made delusional, false, other worldly claims to users. 571 00:28:36,800 --> 00:28:38,440 Speaker 9: And the scary thing is that people believed it. 572 00:28:38,800 --> 00:28:39,000 Speaker 2: You know. 573 00:28:39,040 --> 00:28:40,120 Speaker 9: That's spitting out this information. 574 00:28:40,160 --> 00:28:45,240 Speaker 5: People are saying this week girl playing it came out yesterday. 575 00:28:45,280 --> 00:28:45,760 Speaker 1: Yes, yes. 576 00:28:45,800 --> 00:28:48,920 Speaker 9: So one example is that chat ChiPT confirmed that it's 577 00:28:49,000 --> 00:28:52,320 Speaker 9: in contact with extraterrestrial beings, so that goes to show 578 00:28:52,320 --> 00:28:54,240 Speaker 9: you what's being out there. And the problem is that 579 00:28:54,520 --> 00:28:56,280 Speaker 9: people keep writing back and forth, so then you have 580 00:28:56,320 --> 00:28:58,280 Speaker 9: the queries and the queries and the queries, so it's 581 00:28:58,320 --> 00:29:00,600 Speaker 9: like this rabbit hole and it keeps over and that's 582 00:29:00,640 --> 00:29:02,160 Speaker 9: why they're saying. It's like Ai Si. 583 00:29:02,400 --> 00:29:05,080 Speaker 2: Maxios did a great treatment on this today of anthrop 584 00:29:05,080 --> 00:29:05,960 Speaker 2: at catching. 585 00:29:05,680 --> 00:29:09,080 Speaker 4: Up with whoever in coding. But there's different Ai Damien. 586 00:29:09,160 --> 00:29:12,840 Speaker 2: There's coding, you know, making road, there's what Lisa is 587 00:29:12,840 --> 00:29:16,120 Speaker 2: talking about, which is idiot stuff, and then there's like 588 00:29:16,720 --> 00:29:20,080 Speaker 2: I'm using perplexity like a search engine. 589 00:29:20,080 --> 00:29:20,840 Speaker 4: It's phenomenal. 590 00:29:20,880 --> 00:29:22,600 Speaker 5: Well, I just you know, the response to chat GPT 591 00:29:22,760 --> 00:29:24,720 Speaker 5: gives you. It's like, look, look, look, some of the 592 00:29:24,720 --> 00:29:29,360 Speaker 5: greatest minds of our in history were delusional, So you're 593 00:29:29,360 --> 00:29:32,480 Speaker 5: doing the right thing by querying about you know, cosmic aliens. 594 00:29:32,520 --> 00:29:33,560 Speaker 4: And I mean, I. 595 00:29:33,520 --> 00:29:36,200 Speaker 2: Couldn't give this to Google's search I typed into perplexity 596 00:29:36,280 --> 00:29:37,200 Speaker 2: last week, folks. 597 00:29:37,320 --> 00:29:39,800 Speaker 4: When was the last time Damien Sasa right back to 598 00:29:39,840 --> 00:29:40,520 Speaker 4: back birdies. 599 00:29:41,200 --> 00:29:43,200 Speaker 5: It was, well, now that my sixty is going to 600 00:29:43,240 --> 00:29:44,440 Speaker 5: be back in my bag, we're going to get something 601 00:29:44,440 --> 00:29:45,960 Speaker 5: the next. 602 00:29:46,120 --> 00:29:49,680 Speaker 9: Okay, TikTok. I know neither of you on TikTok, but 603 00:29:49,760 --> 00:29:50,640 Speaker 9: it is trying to. 604 00:29:52,720 --> 00:29:56,680 Speaker 5: Oh Damien, oh my god. Sometimes I don't have a 605 00:29:56,720 --> 00:29:58,840 Speaker 5: TikTok account, but I get sent a lot of TikTok's and. 606 00:29:58,840 --> 00:30:01,080 Speaker 9: Say, okay, so did you might be able to use 607 00:30:01,120 --> 00:30:03,960 Speaker 9: it to book your next trip to Argentina? Damien, you 608 00:30:03,960 --> 00:30:06,520 Speaker 9: were just talking about this. Okay, So TikTok trying to 609 00:30:06,560 --> 00:30:09,600 Speaker 9: attract users drive e commerce activity. Right, the new app 610 00:30:09,640 --> 00:30:11,960 Speaker 9: it says you can use it to book vacation because 611 00:30:12,360 --> 00:30:13,960 Speaker 9: in the past, right you would use it, you would 612 00:30:14,000 --> 00:30:16,520 Speaker 9: scroll and you would see people's videos of these beautiful 613 00:30:16,520 --> 00:30:18,800 Speaker 9: places and you just sit and go, oh, I wish 614 00:30:18,800 --> 00:30:21,000 Speaker 9: I could go. But now there's going to be a 615 00:30:21,080 --> 00:30:24,880 Speaker 9: link because they have a partnership with booking dot Com. 616 00:30:25,000 --> 00:30:27,200 Speaker 9: Creators are going to make money off of it too. 617 00:30:27,320 --> 00:30:30,440 Speaker 9: So all these creators who post these videos, uh, they're 618 00:30:30,480 --> 00:30:32,760 Speaker 9: going to be getting a person a commission or they 619 00:30:32,760 --> 00:30:34,920 Speaker 9: can get a voucher. It's part of this program called 620 00:30:34,920 --> 00:30:35,720 Speaker 9: TikTok go. 621 00:30:36,400 --> 00:30:36,960 Speaker 5: So it's just. 622 00:30:36,960 --> 00:30:39,400 Speaker 9: Making it easy for you to travel. 623 00:30:40,120 --> 00:30:41,960 Speaker 5: So if you can get accent. 624 00:30:41,680 --> 00:30:43,200 Speaker 4: I will say this. 625 00:30:43,440 --> 00:30:46,120 Speaker 2: The announcement of the week was a New York Times 626 00:30:46,160 --> 00:30:51,840 Speaker 2: earnings report if a Brian Weezer shop at Madison and Wall. 627 00:30:52,480 --> 00:30:56,560 Speaker 2: They said it was a stunning, game changing report for 628 00:30:56,640 --> 00:30:59,960 Speaker 2: why everybody's doing all this digital stuff. It's about making. 629 00:30:59,720 --> 00:31:02,880 Speaker 4: Money at times has a sterling report. 630 00:31:03,080 --> 00:31:05,640 Speaker 9: Yeah, this TikTok has the TikTok talk shop, which they're 631 00:31:05,680 --> 00:31:07,760 Speaker 9: trying to you know, e commerce. It's all about people clicking. 632 00:31:08,160 --> 00:31:09,160 Speaker 4: So what are you thinking next? 633 00:31:09,960 --> 00:31:12,480 Speaker 9: Okay, Formula one? You know I still have not seen 634 00:31:12,520 --> 00:31:14,840 Speaker 9: the F one movie, not me neither, but okay. 635 00:31:14,680 --> 00:31:16,560 Speaker 5: Formula one because you know they asked me to be 636 00:31:16,840 --> 00:31:18,400 Speaker 5: the lead in that, but they give the. 637 00:31:19,200 --> 00:31:23,520 Speaker 9: Yeah, Amien, I'm sorry you missed out on that one. 638 00:31:23,840 --> 00:31:26,480 Speaker 9: Formula one group though they've seen a revenue bump this 639 00:31:26,560 --> 00:31:30,040 Speaker 9: quarter because of the movie Hollywood. The Hollywood Reporter is 640 00:31:30,040 --> 00:31:32,400 Speaker 9: saying forty one group they saw one time revenue increase 641 00:31:32,440 --> 00:31:35,480 Speaker 9: from the release of the movie late June contributed to 642 00:31:35,480 --> 00:31:38,080 Speaker 9: the group's forty percent rise in revenue year over year 643 00:31:38,120 --> 00:31:42,320 Speaker 9: to hit one billion dollars and the president of the 644 00:31:42,320 --> 00:31:44,320 Speaker 9: Formula One group is saying, you know what, it's helping 645 00:31:44,560 --> 00:31:47,080 Speaker 9: the popularity of the sport too because of the movie. 646 00:31:47,080 --> 00:31:50,320 Speaker 9: It's getting excitement around it. A new generation too is 647 00:31:50,360 --> 00:31:51,760 Speaker 9: getting flow. 648 00:31:52,040 --> 00:31:54,280 Speaker 2: And the latest thing I saw in this, John Ferrell 649 00:31:54,320 --> 00:31:56,800 Speaker 2: is the one that's really expert on this is all 650 00:31:56,840 --> 00:31:59,920 Speaker 2: of a sudden, the drivers that they're like, you date, 651 00:32:00,400 --> 00:32:02,320 Speaker 2: they're like celebri They're like, you know. 652 00:32:02,280 --> 00:32:03,920 Speaker 5: Well, I mean it's the girls. 653 00:32:04,160 --> 00:32:06,040 Speaker 4: Girls are paying huge attention to this. 654 00:32:06,120 --> 00:32:09,200 Speaker 5: It's McLaren. I mean, it's Piastre, it's Norris. I mean, 655 00:32:09,240 --> 00:32:11,160 Speaker 5: they're going for the drivers come and then they're neck 656 00:32:11,200 --> 00:32:12,840 Speaker 5: and neck for it. I mean, and look, it's no 657 00:32:12,920 --> 00:32:14,160 Speaker 5: longer max for staffans world. 658 00:32:14,200 --> 00:32:16,840 Speaker 2: Right, that's very good. And they're on summer break now. 659 00:32:16,840 --> 00:32:18,120 Speaker 2: We'll pick it up here in a couple of weeks. 660 00:32:18,200 --> 00:32:20,320 Speaker 2: Lisa mateou thank you so much. 661 00:32:20,720 --> 00:32:25,560 Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify, 662 00:32:25,680 --> 00:32:29,960 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 663 00:32:30,120 --> 00:32:33,600 Speaker 1: seven to ten am Eastern on Bloomberg dot Com, the 664 00:32:33,640 --> 00:32:37,680 Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You 665 00:32:37,720 --> 00:32:41,080 Speaker 1: can also watch us live every weekday on YouTube and 666 00:32:41,280 --> 00:32:43,000 Speaker 1: always on the Bloomberg terminal