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Speaker 2: Joining us now from BAMA from Bank of Montreal, BEMA
Speaker 2: Capital Markets. The acclaim Ian Lincoln the summer You're Ian
Speaker 2: is the following We've got a data and a deficit
Speaker 2: and we're in love with T bills. What's the Lincoln
Speaker 2: radar say about an executive branch that says the solution
Speaker 2: is a record number of T bill issuance.
Speaker 3: Frankly, I think that we're at the point where the market,
Speaker 3: at least for now, can easily absorb an increase in
Speaker 3: T bill issuance. The risk is that they oversaturate the
Speaker 3: front end of the market, and there are many in
Speaker 3: the market that believe that the rise of stable coin
Speaker 3: and demand from that sector is going to create excess
Speaker 3: demand and absorb that the bills in twenty twenty six
Speaker 3: and beyond. That's not so clear to me, but I
Speaker 3: think that the Treasure Department is going to find out
Speaker 3: soon enough.
Speaker 4: Here's a sentence without math.
Speaker 2: One of the key debates in the market at the moment, Damien,
Speaker 2: is whether Trump's tariffs will trigger one time price adjustments
Speaker 2: or persistent inflation.
Speaker 4: So continue with the and.
Speaker 5: Lincoln, Well, I think all three parties take God, we'll
Speaker 5: talk about that later. And I got you and I
Speaker 5: have limited time here. I mean, futures are pricing in
Speaker 5: ninety one percent probability of a twenty five big cut
Speaker 5: in September. Can it be fifty? And what would make it?
Speaker 5: What would meet that they'd go there?
Speaker 3: I think it could be fifty. Again, not our base case.
Speaker 3: But if you get a disastrous payrolls print for the
Speaker 3: month of August and two benign CPI prints, the market
Speaker 3: will start talking about fifty basis points.
Speaker 5: Well, I mean, but then are we really going to
Speaker 5: see a pullback? And consumption? Come on now? I mean
Speaker 5: DP growth, I mean better than expected globally for the
Speaker 5: first half of this year, you know, I mean talk
Speaker 5: to talk to me about the trade up between a
Speaker 5: weaker labor market and resilient income growth here in the US.
Speaker 3: So we have seen a easing of demand in terms
Speaker 3: of personal consumption in real terms over the course of
Speaker 3: Q one and Q two. That's in the data. But
Speaker 3: what we haven't seen is we haven't seen it completely
Speaker 3: stall out. And frankly, if the Fed cuts fifty or
Speaker 3: twenty five in September, the equity market will respond well
Speaker 3: and that will reinforce the wealth effect, which could certainly
Speaker 3: help keep the consumer going.
Speaker 2: Damien, and of twenty twenty three thirty or mortgage eight percent, yeah,
Speaker 2: we're now down to six point seven eight percent.
Speaker 4: Do you anser your great question to Ian?
Speaker 2: If we get a fifty beeps, whether it's one to whatever,
Speaker 2: I mean, it's got to save the housing market, right.
Speaker 5: I mean?
Speaker 1: Yeah?
Speaker 5: And Ian, I mean, I mean can this curve steepen
Speaker 5: even more from where we are? I mean, I think
Speaker 5: you look at fives thirties, we're up what sixty BIPs
Speaker 5: here to date? I think two tens, it's something like
Speaker 5: twenty plus here to day. I mean, just how much
Speaker 5: steeper can this curve go?
Speaker 3: So once the Fed starts cutting, the market will price
Speaker 3: in even more rate cuts in twenty twenty six and
Speaker 3: twenty twenty seven, and so the two year sector will rally,
Speaker 3: so you get a steeper curve that way. I don't
Speaker 3: think ten and thirty year yields are going to back
Speaker 3: up materially from current levels, so you can still get
Speaker 3: a steepener with a front end rally. As far as
Speaker 3: mortgage rates dropping in line with each incremental quarter point cut,
Speaker 3: good luck. The mortgage market hasn't been functioning that way,
Speaker 3: and so I don't think that rate cuts will solve
Speaker 3: the housing market. The housing market has a supply problem
Speaker 3: as much as it does a rate problem.
Speaker 2: Fascinating on an eventful Friday, not boring, to say the least.
Speaker 2: Damien Sassaur with Ian Lingoln of BEMO Capital Markets.
Speaker 5: And talk to us about the runway for continued dollar weakness.
Speaker 5: Is this really the end of king dollar? I mean,
Speaker 5: how much lower can euro dollar go here?
Speaker 4: Well?
Speaker 5: Can the dollar go here?
Speaker 3: Well to a largest It depends on how successful the
Speaker 3: administration is in balancing trade, because if we actually have
Speaker 3: a balanced trade deficit, then there won't be as many
Speaker 3: dollars going out into the global economy to be recycled
Speaker 3: back into treasuries at the end of the day. I
Speaker 3: do think that the dollar will remain the reserve currency,
Speaker 3: and if that's the case, there'll be a stabilization at
Speaker 3: some stage but I'm very hesitant about wanting to go
Speaker 3: aggressively long the dollar given all of the credibility issues.
Speaker 5: But way, look, it yields here in the US to
Speaker 5: relative to the rest of the world. I mean they're high,
Speaker 5: you know. And the carry trade works. I mean, it's
Speaker 5: still working this year, despite what anybody else would have
Speaker 5: told you coming into twenty twenty five. I mean the
Speaker 5: carry trade works. And I mean you're not funding in
Speaker 5: dollars anymore, are you.
Speaker 3: Yeah, that's a fair point. The carry trade works, but
Speaker 3: it only works as long as, as you point out,
Speaker 3: rates are relatively high. When the Fed starts cutting rates,
Speaker 3: that should put downside pressure on the dollar, not upside pressure.
Speaker 3: And the question becomes how much of that is priced in?
Speaker 3: And I think not enough.
Speaker 2: You're pushing against in the panic of price down, yield
Speaker 2: up and say the ten year piece, even the seven
Speaker 2: year as well. Do you still stick with a vector
Speaker 2: of lower yields out eighteen months?
Speaker 3: Yeah, our year in call for tins is still three
Speaker 3: eighty five. Well, I think by eighteen months from now
Speaker 3: we could be closer to three fifty three twenty five.
Speaker 2: And the time I got left with you, mister lingol
Speaker 2: and I want to talk about Canada. You've got a
Speaker 2: pooling of research at the Bank of Montreal. For those
Speaker 2: of you folks are even one hundred and fifty years ago,
Speaker 2: Bank of Montreal was sort of like the Bank of
Speaker 2: England of Canada and Ian Lincoln with all of your
Speaker 2: research capabilities, give us a BMO update on the impact
Speaker 2: of Trump tariffs on mister Kearney and your Canada.
Speaker 3: So it hasn't been good in terms of what the
Speaker 3: tariffs mean for the Canadian economy. We've already seen the
Speaker 3: Bank of Canada respond, would expect more. There's a lot
Speaker 3: of uncertainty and I think at the end of the day,
Speaker 3: the relationship between Canada and the US will weather the storm,
Speaker 3: but it has been recast in a material way because
Speaker 3: of Trump's trade war.
Speaker 4: Ailing and thank you so much to Female Capital. Martin two.
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live
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Speaker 4: Joining us now is people and my people.
Speaker 2: I'm going to argue in for months about trying to
Speaker 2: get him in your Lawrence McDonald joins us he made
Speaker 2: waves years ago, a colossal failure of common sense.
Speaker 4: That was my biography, How to listen.
Speaker 2: To Americans speak as the latest effort. Larry McDonald in
Speaker 2: the studio today. Great to have you here, and I
Speaker 2: want to go right to where Damien was. You had
Speaker 2: my essay of the Year two years ago where you
Speaker 2: walk through in about twelve paragraphs the wall of money
Speaker 2: that's out there.
Speaker 4: It hasn't changed, has it.
Speaker 6: Well, you know what's fascinating Tom. In the last two
Speaker 6: to three weeks. The rrp's coming down again and we
Speaker 6: don't have that release valve that we've normally have had.
Speaker 6: So in the last couple of weeks something has changed
Speaker 6: a little bit because that's the liquidity really, juggernaut is
Speaker 6: the RP. That's been the case.
Speaker 4: For a long se r RP.
Speaker 6: For Lisa Miteo the offensive a reverse repo facility.
Speaker 5: Oh good, And so I.
Speaker 4: Have no idea what that is, Lisa, So stay with it.
Speaker 5: So it's McDonald, it's going to go with it.
Speaker 6: But you know, as a former Lehman trader, I just
Speaker 6: want to say, I tell my wife wants some money
Speaker 6: if we sell a million books will break even on
Speaker 6: our Lehman stock.
Speaker 5: Right, that's good, Yeah, thank you.
Speaker 6: But but to get back to liquidity and Lehman and
Speaker 6: what's happened now, this is you're gonna love this time.
Speaker 6: We did an ideas dinner in San Francisco two weeks
Speaker 6: ago and I was with some of the big family
Speaker 6: CIOs that run money for them in the valley, for
Speaker 6: the big AI type players, and what they said was,
Speaker 6: you know, when academics look at liquidity, they look at
Speaker 6: the RP. The guys in the valley that are tracking momentum,
Speaker 6: they track meticulously these fifteen verticals of tertiary assets versus
Speaker 6: versus established. All that means in English is say arc
Speaker 6: stocks versus the queues, or say companies with ten billion
Speaker 6: market caps and no sales. That's another one.
Speaker 2: Right, is the money gonna move? The wall of money
Speaker 2: that you identified, is it going to move?
Speaker 6: Okay, So this gets back to my point. The tertiary
Speaker 6: assets the last ten days have been starting to underperform
Speaker 6: established solana versus bitcoin. So that tells you the wall
Speaker 6: of money is receding, and it also lines up with
Speaker 6: the decline in the So something's going on. Liquidity is
Speaker 6: drying up to some extent. This is just the genesis
Speaker 6: of it.
Speaker 5: Well, Larry, I'd love to ask you what wine they
Speaker 5: were serving at that dinner with all the Silicon Valley types.
Speaker 5: But you know we're not gonna talk about California Cats.
Speaker 5: Total assets at the four world's four largest central banks.
Speaker 5: I'm talking the FED, the ECB, the BOJ and the
Speaker 5: PBOC has been in decline since March of twenty twenty two,
Speaker 5: when the Feds first started raising rates. But that seems
Speaker 5: to be declining. I just put out of deck this morning.
Speaker 5: I have a great shart in them. Yeah, toot my
Speaker 5: own horn here. But it looks like central bank boundaries
Speaker 5: are going to start expanding yet again. Is that a
Speaker 5: good thing or a bad thing? Oh my god, sorry, Softball.
Speaker 6: It's going to be a good It'll be a good
Speaker 6: thing if we're in a crisis, right, it'll be a
Speaker 6: bad thing if if if we're at this point in
Speaker 6: the cycle, it's going to reaccelerate inflation.
Speaker 2: Larry, this is a good point then, folks. It's the
Speaker 2: Bear Trapp Report. You can get it from mister McDonald's people.
Speaker 2: He doesn't talk to anybody by appointment.
Speaker 4: Larry, are we in a crisis.
Speaker 6: We're in a We're in a situation where we're going
Speaker 6: to have a reacceleration of inflation and that's going to
Speaker 6: create a crisis.
Speaker 4: Mister Sas.
Speaker 5: Yeah, FX reserves and central banks, let's talk about that.
Speaker 5: We want to get into a plumbing of these markets, right.
Speaker 5: I mean, it seems that you know, reserve levels at
Speaker 5: least you look at China obviously, but broadly speaking, it
Speaker 5: looks like central banks outside of the US they don't
Speaker 5: need to hold US treasuries anymore. I mean, what else
Speaker 5: where do they go? What do they I mean, is
Speaker 5: there no demand for liquid you know, cash like assets
Speaker 5: from central banks anymore? Is that the climbing?
Speaker 6: Yes, and so we have less friends in the world.
Speaker 6: That's why the Cent has been out there with the
Speaker 6: bag of tricks. So when you talk to we have
Speaker 6: a business on Bloomberg, a Bloomberg chat with some of
Speaker 6: the largest hedge funds in the world. One of the
Speaker 6: things I've been talking about in the last six weeks
Speaker 6: is the Cents bag of tricks, where they're using a
Speaker 6: number of new facilities to try to replace foreign treasury
Speaker 6: buying because.
Speaker 5: What of their facilities look like like what else is
Speaker 5: there gold?
Speaker 6: Well, you know, using forcing the banks to buy more
Speaker 6: treasuries one, that's just to keep it simple. But when
Speaker 6: you force the banks to buy more treasuries than that,
Speaker 6: in essence, that's financial repression and the only way out
Speaker 6: of a thirty seven This is what we talked about
Speaker 6: in our book how to Listen to market Speak. The
Speaker 6: only way out of a thirty seven trillion dollar debth
Speaker 6: hole is massage interest rates below the rate of inflation.
Speaker 6: Financial repression. That's very bullish for hard assets. That's why gold, bitcoin,
Speaker 6: and platinum pladium are starting to outperform.
Speaker 4: The silver miners. Tom The silver miners.
Speaker 6: Are up sixty two percent this year versus the fangs
Speaker 6: are only up five hard assets versus financials stock market up.
Speaker 2: I mean, it's a grind higher, but it's a constructive grind,
Speaker 2: and you know, earning season, they're delivering the goods, but
Speaker 2: it's like twelve stocks are getting done and the rest
Speaker 2: are flat on their back. Our listeners that they're not
Speaker 2: as esoteric as SaaS Hour or you our listeners and
Speaker 2: viewers are. They're just like, okay, into the weekend, What
Speaker 2: God's name do I do with my four oh one
Speaker 2: k speak.
Speaker 6: Okay, First of all, if you look at the Bloomberg terminal,
Speaker 6: which I do twenty times a day, volatility in August
Speaker 6: in September seasonally it's a trouble spot. You want to
Speaker 6: be raising cash into very for volatility. Probably the worst
Speaker 6: or I guess the best month of the year for
Speaker 6: is the Vicks in August, right the second best might
Speaker 6: be September. So for people listening to us right now,
Speaker 6: that's when you want to raise cash and you want
Speaker 6: to put money to work when there's real fear like
Speaker 6: we had in April and last August.
Speaker 5: Last August we had a.
Speaker 6: Very meaningful drawdown, and so you want to have raise
Speaker 6: cash and be there for the pain.
Speaker 5: How do you build balance and fixed and come portfolios today?
Speaker 5: I mean if no one's buying treasuries, and I mean,
Speaker 5: let's be clear, if you look at em local debt
Speaker 5: for example, which is you know, you know it should
Speaker 5: be yielding way over US treasury, it's only one hundred
Speaker 5: and eighty three BIPs over.
Speaker 7: I don't know that.
Speaker 5: No, it's almost have one of its tightest done record.
Speaker 5: And so I mean if you look at em US
Speaker 5: ten year, you spreads. I mean fourteen of eighteen fourteen
Speaker 5: of eighteen countries are well below the three or average.
Speaker 5: So I mean, just thinking out loud here, what else
Speaker 5: do you buy?
Speaker 2: Right?
Speaker 6: The EMLC, the Emerging Market Local Currency bond fund is
Speaker 6: outperforming the TLT Treasury Fund in a one year, three year,
Speaker 6: and five year bucket air we got. And that's that
Speaker 6: weakness in the dollar we've seen this year.
Speaker 4: I'm almost out of time.
Speaker 2: Your charm is you have an optimism about the American system.
Speaker 2: People say, always gloomy in that and it's a Friday
Speaker 2: gloom crew, except you believe in the system. Okay, what
Speaker 2: do we do after Trump? What does our financial system
Speaker 2: do after the day to day shocks that we receive
Speaker 2: from President Trump?
Speaker 6: So that's what we talk about in our book, Tom,
Speaker 6: We're talking about a whole new portfolio construction. People have
Speaker 6: to get along in nineteen sixty eight to eighty one
Speaker 6: type portfolio where your long companies that own assets. You're
Speaker 6: all kinds of metals, copper copper companies. Right now, the
Speaker 6: COPX is in the perfect spot. Globally, we're undersupplied. The
Speaker 6: artificial intelligen's boom, Tom, we have a power grid in
Speaker 6: the United States that needs a two trillion dollar rebuild,
Speaker 6: all of these growth assumption shumpsons.
Speaker 4: Can you seven this morning? Can you kill?
Speaker 6: But I want to own the COPX because that's going
Speaker 6: to give you the power to fund AI.
Speaker 2: I know you sold the movie rights to the latest book, DiCaprio.
Speaker 4: Is that what we're looking for?
Speaker 6: Well, you know, the latest book right now number number
Speaker 6: within the top three on Amazon right now. How to
Speaker 6: listen when market speak top three again. By the way,
Speaker 6: I'm really proud to I've got two books right now,
Speaker 6: Larry McDonald, two books in the top forty.
Speaker 4: Okay, let's good.
Speaker 2: Lisa Motel's books number one and Glenden Free Breakfast. Lawrence McDonald,
Speaker 2: thank you so much.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto
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Speaker 1: say Alexa play Bloomberg eleven thirty Bloomberg reporting.
Speaker 2: Trump Putin meeting in the next few days. Russia and
Speaker 2: US agreed on the place for a potential meeting between
Speaker 2: the presidents but won't announce it yet. We're here to
Speaker 2: break news. They'll be holding that at dan Tanabaum summer place.
Speaker 4: He joins us.
Speaker 2: Now from Oliver Wyman, Dan, you're sort an expert on this,
Speaker 2: I mean at Oliver Wyman, between you and Hugh von
Speaker 2: steinas it's shocking expertise about inside baseball between the United
Speaker 2: States and Russia. What's your observation it would be the
Speaker 2: best thing for mister Trump to bring up.
Speaker 7: Well, firstly, Tom and we haven't planned for the meeting
Speaker 7: here yet. There isn't really a good reason to even
Speaker 7: have this summit. Let's remember there's been threat after threat
Speaker 7: that President Trump has made towards the Russian government, towards
Speaker 7: President Putin, decease hostilities, to work towards the ceasefire. They
Speaker 7: haven't done any of that. Today day was actually supposed
Speaker 7: to be a day where the President was to announce sanctions,
Speaker 7: which you know, by my account, there have been zero
Speaker 7: designations by the US government with respect to Russia since
Speaker 7: Trump has taken office again. So to give this summit
Speaker 7: with Putin in the first place sends really the wrong
Speaker 7: message because Russia hasn't done anything favorably towards ending the conflict.
Speaker 4: Do we have leverage?
Speaker 7: We absolutely do. I mean, it is ironic that the
Speaker 7: President has done more to hurt the Swiss economy than
Speaker 7: the Russian economy the last six months.
Speaker 4: There absolutely is leverage.
Speaker 7: The focus on India, for instance, in trying to get
Speaker 7: them to stop purchasing Russian oil by using tariffs, which
Speaker 7: really will enrich the US at the cost of Ukraine.
Speaker 7: There's primary and secondary sanctions that could be used on
Speaker 7: Indian entities to essentially threaten to cut them off from
Speaker 7: access to the US economy, a far greater threat if
Speaker 7: the objective is to get them to stop buying Russian oil.
Speaker 4: So the leverage is there.
Speaker 7: The President hasn't done anything yet.
Speaker 5: Dan, And part of the press and strategy was to
Speaker 5: increase domestic manufacturing here at home. We know that Oliver
Speaker 5: Wyman one of the most successful management consulting firms here
Speaker 5: in the US. And then I see your note and
Speaker 5: I look at this word and the quotes Empanada. Everyone
Speaker 5: makes promises and never actually does anything. Is that what
Speaker 5: you're telling clients right now? And Panada, I'm.
Speaker 4: Not telling them.
Speaker 7: Another media outlet had actually coined that the other day
Speaker 7: but love I think about it, some of the scale
Speaker 7: of these announcements of investment in the US are fairly high.
Speaker 7: You haven't seen anyone really moving on some of these
Speaker 7: committed investments thus far, and from what we've seen going
Speaker 7: back to the first Trump term, no one's really validating
Speaker 7: that these investments have been made good on. So it
Speaker 7: does seem like some of my clients in an attempt
Speaker 7: to curry favor, to stay out of negative focus of
Speaker 7: the administration or announcing deals. They may be serious about them,
Speaker 7: but when you see hundred six hundred billion dollar investments
Speaker 7: over however long a time horizon, I'm not since the
Speaker 7: companies are going to make good on all of these.
Speaker 2: This is sakermer Commune Tokyo for Bloomberg folks. The Prime
Speaker 2: Minister of Japan is hoping to stay on as calls
Speaker 2: grow for him to exit, and part of it is
Speaker 2: because of the deal we did with Japan that's not
Speaker 2: in writing and open to completely polarized interpretation.
Speaker 7: I mean, that's what it challenge. We have frameworks, we
Speaker 7: don't have specifics. Even on the tariff strategy, there's a
Speaker 7: forty percent tariff on transhipped goods. There's no guidance out
Speaker 7: of the US government on what even constitutes transhipt goods.
Speaker 7: So you take all of these together, there's still a
Speaker 7: ton of uncertainty for my clients, for the market on
Speaker 7: what actually will be moving forward. And we've seen there's
Speaker 7: a tendency to pull some of these deals away to
Speaker 7: readdress them going forward. So there's not really smooth air
Speaker 7: that companies are seeing.
Speaker 5: So Dan, I mean, then, but then correctly if I'm wrong.
Speaker 5: I mean this effective tax rate that everybody's talking about
Speaker 5: fifteen percent, sixteen to twenty percent, you know, I mean,
Speaker 5: how are people coming up and actually calculating that with
Speaker 5: any confidence? Is it a range in your mind? I mean,
Speaker 5: is it fifteen to twenty? Is a ten to fifteen?
Speaker 5: How do you look at things?
Speaker 7: I mean, that is the challenge is the movement is
Speaker 7: so great that trying to take a look at some
Speaker 7: of what this go forward taxes look like is complicated.
Speaker 7: What I'm looking at, probably more closely, are the losses
Speaker 7: that businesses in the US have been announcing in their
Speaker 7: earnings over the last few weeks, because that seems to
Speaker 7: be a bit more real as at least a looking
Speaker 7: backwards issue to try and go where ultimately companies can
Speaker 7: try and recoup some of these losses going forward in
Speaker 7: the form of price increases.
Speaker 2: Dan, if you do have the Trump Putin meeting at
Speaker 2: your summer place, I would suggest a liquor manifest that I.
Speaker 4: Saw Churchill had at Yalta. I think that would be
Speaker 4: some that would smooth things.
Speaker 5: Hault. Sure.
Speaker 7: I mean I don't have diet coke here and can't
Speaker 7: took a well done Hamburger, so I'm not sure what
Speaker 7: my abilities would be to host.
Speaker 2: Dan. Thank you so us d'antanobaum and Oliver Wyman with
Speaker 2: you Von Steins So just great, great perspective there.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto
Speaker 1: with the Bloomberg Business app. You can also watch us
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Speaker 2: Arguably my academic paper of the summer, even though it
Speaker 2: came out two years ago, joining us now from Harvard
Speaker 2: with all of the recent acclaim of the John Bates
Speaker 2: Clerk Awards. Stephanie Stansheva, her expertise in the taxation economics,
Speaker 2: her social Economics lab and Stephanie this paper, which I
Speaker 2: absolutely adore with non Chanoy and Sequera is zero some
Speaker 2: thinking in the roots of US political differences. This goes
Speaker 2: to a static analysis analysis. It goes to almost a
Speaker 2: mercantilis thinking, and an eye for an eye, a.
Speaker 4: Tooth for a tooth.
Speaker 2: How do we get beyond our new vogue of zero
Speaker 2: sum thinking.
Speaker 8: That's a great question, and indeed you're right to point
Speaker 8: out that what we show in the paper is that
Speaker 8: this zero sum mentality, this feeling that if you get more,
Speaker 8: this means I must be getting less. You know that
Speaker 8: we live in a world which is a fixed pie.
Speaker 8: So someone gets a larger slice of the pie, someone
Speaker 8: else must be getting a smaller one. This mindset has
Speaker 8: actually been increasing. You can see it in the US
Speaker 8: in the fact that younger generations today are much more
Speaker 8: likely to hold such zero some views than the older generations.
Speaker 8: And we can trace this back to the economic environment
Speaker 8: that people live in, which is also a way to
Speaker 8: think about potential solutions. The younger generations today have grown
Speaker 8: up in times with lower mobility, lower growth, and the
Speaker 8: older generations and so at this macro level, this has
Speaker 8: really influenced their thinking about these issues. You can also
Speaker 8: see it at the individual level. We have people's whole
Speaker 8: family histories and ancestries in our project, and you can
Speaker 8: see that, regardless of the macro environment, if your own
Speaker 8: family has done better over time, you know, if you
Speaker 8: are doing better than your parents, you're also less likely
Speaker 8: to think in zero sometimes.
Speaker 4: Well, there's the thing, Steffanie, that I find so interesting here.
Speaker 2: And you know, the romance of getting back to the
Speaker 2: economics and political economics of Benjamin Freeman are over at
Speaker 2: MIT Simon Johnson, the recent Nobel Prize winner. But the
Speaker 2: thing to me is, what is the prescription to get
Speaker 2: back to the optimism we created out of the Atlantic
Speaker 2: Charter in nineteen forty one? Or is this what we
Speaker 2: have for the future, this zero sum thinking.
Speaker 8: Yeah, I want to be really cautious here because we're
Speaker 8: not saying that zero sum thinking is necessarily a bias.
Speaker 8: Shouldn't be dismissed as just a bias in the people.
Speaker 8: We show that it's deeply correlated to people's experiences. People
Speaker 8: who have zero sum experiences, including in their ancestry, are
Speaker 8: much more likely to hold this mindset than people who
Speaker 8: have had positive some experiences. So it's something that's deeply
Speaker 8: rooted in people's realities, and this is something that we
Speaker 8: have to think about very seriously. So when we think
Speaker 8: about policies, policies themselves can make the world more zero sum,
Speaker 8: or they can make the world less zero sum. It's
Speaker 8: rare to find entirely win win policies, but there are
Speaker 8: policies that lead us more in a win win direction,
Speaker 8: especially over the longer term, you know, researchers for instance,
Speaker 8: funding for children, like the child tax credit. These are
Speaker 8: things that over the long run sort of pay for
Speaker 8: themselves in better opportunities, in better economic outcomes for those families.
Speaker 8: Innovation policy is something that we think can create win
Speaker 8: win solutions, you know, and benefit benefit more people. So
Speaker 8: there's policies that can turn the world, you know, into
Speaker 8: a more positive some direction.
Speaker 5: Well, Stephanie, I mean, the premise of this zero s
Speaker 5: mindset is the belief that you know, resources are fixed,
Speaker 5: that the pie is fixed. It's not a balloon that's expanding.
Speaker 5: I mean, I grew up, I was born in nineteen
Speaker 5: seventy four, but I'm still a product of the sixties,
Speaker 5: you know, free love, all that good stuff. So is
Speaker 5: Lisa from Leonia. But you know, the reality is this
Speaker 5: generation the consequences of the zero some mindset are they
Speaker 5: really that bad? Is it really breeding distrust, conflict, reduced
Speaker 5: cooperation all of that.
Speaker 8: So we can trace the link between zero some thinking
Speaker 8: and your policy views if you want, and what you
Speaker 8: want to support. And one really important fact which is
Speaker 8: pretty rare these days is this is not a part
Speaker 8: is an issue. So zero some thinking is quite evenly
Speaker 8: spread across both aisles of the political spectrum. So it
Speaker 8: is not clearly a Democrat thing or Republican thing. It's
Speaker 8: there on all sides. It's something that is more correlated
Speaker 8: with more extreme ends of the political spectrum. And the
Speaker 8: type of policies it makes you support is you know,
Speaker 8: if you think the gains of rich people come at
Speaker 8: the expense of the poor, then you're going to support
Speaker 8: more distribution, you know, more progressive policies. If you think
Speaker 8: that the gains of immigrants come at the expense of
Speaker 8: non immigrants, you're going to also be quite anti immigrant,
Speaker 8: which goes to show it really you know, cuts across
Speaker 8: partisan lines here. You're going to be more anti free trade,
Speaker 8: You're going to want to support you know, policies that
Speaker 8: really benefit your in group or your own group more.
Speaker 5: Well, Stephanie, President Trump always talks about, you know, this
Speaker 5: is good for America, but can also be good for
Speaker 5: trade partners of America. Win win situations as it were.
Speaker 5: I mean, you know, is this zero sum mindset?
Speaker 4: You know?
Speaker 5: I mean, is there such a thing as a win
Speaker 5: win situation?
Speaker 8: There are win win situations? I think, you know, it
Speaker 8: depends on the horizon we look at things. You know,
Speaker 8: as I mentioned, there's policies which today might cost money,
Speaker 8: so someone has to pay today, but over the medium run,
Speaker 8: over the longer run, they create more benefits that can
Speaker 8: you lift everyone. So it really on the horizon. And
Speaker 8: then I think it also depends on necessarily how narrowly
Speaker 8: we look at a situation. If I'm competing for a
Speaker 8: promotion at work, then in the immediate this is zero sign.
Speaker 8: If someone else gets the promotion, I won't get it.
Speaker 8: But maybe if I take a step back and think
Speaker 8: about how can we cooperate here, maybe there's a way,
Speaker 8: you know, to make everybody more productive here and the
Speaker 8: company do better, and then I could also benefit from this.
Speaker 8: So not saying every situation can be win win and
Speaker 8: again Zo some thinking is very rooted in people's realities
Speaker 8: because they have experienced zero some situations. But I think
Speaker 8: policy has a role to try to push us towards
Speaker 8: more win win solutions.
Speaker 2: It s having got time for one more quick question.
Speaker 2: You're having a cup of coffee with President Trump, You're
Speaker 2: having two scoops of ice cream for dessert with President Trump.
Speaker 2: What would you say to the president about slipping away
Speaker 2: from a neo mercantilist policy.
Speaker 8: Well, to highlight basically the findings I think of this
Speaker 8: research is really that we have to push towards more
Speaker 8: positive some situations. And while that's not always possible, policy
Speaker 8: is a really really powerful tool. So it shapes the world.
Speaker 8: It has shaped the world. You can see through these
Speaker 8: generations that have experienced very different growth, very different mobility,
Speaker 8: and so I think this is a huge, you know,
Speaker 8: a huge moment to try to create more win win
Speaker 8: solutions and more positive some environments.
Speaker 2: Stephanie, thank you so much, Stephanie Stensheva at Harvard And
Speaker 2: of course the Acclaim earlier this year of winning John
Speaker 2: Bates Clark metal hugely. It's like I think under forty
Speaker 2: maybe it's under seventy.
Speaker 5: I can't remember how I mean, I'm kidding.
Speaker 4: That's a huge, huge. I thrilled that she could be
Speaker 4: with us this morning.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Apple Corplay and Android
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Speaker 1: Just say Alexa, play Bloomberg eleven thirty condemn.
Speaker 2: At least it would tell you fired up with a
Speaker 2: gluten free set on newspaper stories, What.
Speaker 5: Do you have all right?
Speaker 9: Okay, doctor is saying, I know you guys have dabbled
Speaker 9: in AI, right. Have you used the chat GPT that much?
Speaker 5: It's too much? Idea? I have it?
Speaker 9: Well, doctor is saying there could be a side effect
Speaker 9: to using chat butts like chat GPT. It's called AI psychosis.
Speaker 5: Very serious.
Speaker 9: Okay, So Wall Street Journal what they did to find
Speaker 9: this out. They did a review and analysis of public
Speaker 9: chats that were posted online. Okay, dozens of examples where
Speaker 9: chat gpt actually made delusional, false, other worldly claims to users.
Speaker 9: And the scary thing is that people believed it.
Speaker 2: You know.
Speaker 9: That's spitting out this information.
Speaker 5: People are saying this week girl playing it came out yesterday.
Speaker 1: Yes, yes.
Speaker 9: So one example is that chat ChiPT confirmed that it's
Speaker 9: in contact with extraterrestrial beings, so that goes to show
Speaker 9: you what's being out there. And the problem is that
Speaker 9: people keep writing back and forth, so then you have
Speaker 9: the queries and the queries and the queries, so it's
Speaker 9: like this rabbit hole and it keeps over and that's
Speaker 9: why they're saying. It's like Ai Si.
Speaker 2: Maxios did a great treatment on this today of anthrop
Speaker 2: at catching.
Speaker 4: Up with whoever in coding. But there's different Ai Damien.
Speaker 2: There's coding, you know, making road, there's what Lisa is
Speaker 2: talking about, which is idiot stuff, and then there's like
Speaker 2: I'm using perplexity like a search engine.
Speaker 4: It's phenomenal.
Speaker 5: Well, I just you know, the response to chat GPT
Speaker 5: gives you. It's like, look, look, look, some of the
Speaker 5: greatest minds of our in history were delusional, So you're
Speaker 5: doing the right thing by querying about you know, cosmic aliens.
Speaker 4: And I mean, I.
Speaker 2: Couldn't give this to Google's search I typed into perplexity
Speaker 2: last week, folks.
Speaker 4: When was the last time Damien Sasa right back to
Speaker 4: back birdies.
Speaker 5: It was, well, now that my sixty is going to
Speaker 5: be back in my bag, we're going to get something
Speaker 5: the next.
Speaker 9: Okay, TikTok. I know neither of you on TikTok, but
Speaker 9: it is trying to.
Speaker 5: Oh Damien, oh my god. Sometimes I don't have a
Speaker 5: TikTok account, but I get sent a lot of TikTok's and.
Speaker 9: Say, okay, so did you might be able to use
Speaker 9: it to book your next trip to Argentina? Damien, you
Speaker 9: were just talking about this. Okay, So TikTok trying to
Speaker 9: attract users drive e commerce activity. Right, the new app
Speaker 9: it says you can use it to book vacation because
Speaker 9: in the past, right you would use it, you would
Speaker 9: scroll and you would see people's videos of these beautiful
Speaker 9: places and you just sit and go, oh, I wish
Speaker 9: I could go. But now there's going to be a
Speaker 9: link because they have a partnership with booking dot Com.
Speaker 9: Creators are going to make money off of it too.
Speaker 9: So all these creators who post these videos, uh, they're
Speaker 9: going to be getting a person a commission or they
Speaker 9: can get a voucher. It's part of this program called
Speaker 9: TikTok go.
Speaker 5: So it's just.
Speaker 9: Making it easy for you to travel.
Speaker 5: So if you can get accent.
Speaker 4: I will say this.
Speaker 2: The announcement of the week was a New York Times
Speaker 2: earnings report if a Brian Weezer shop at Madison and Wall.
Speaker 2: They said it was a stunning, game changing report for
Speaker 2: why everybody's doing all this digital stuff. It's about making.
Speaker 4: Money at times has a sterling report.
Speaker 9: Yeah, this TikTok has the TikTok talk shop, which they're
Speaker 9: trying to you know, e commerce. It's all about people clicking.
Speaker 4: So what are you thinking next?
Speaker 9: Okay, Formula one? You know I still have not seen
Speaker 9: the F one movie, not me neither, but okay.
Speaker 5: Formula one because you know they asked me to be
Speaker 5: the lead in that, but they give the.
Speaker 9: Yeah, Amien, I'm sorry you missed out on that one.
Speaker 9: Formula one group though they've seen a revenue bump this
Speaker 9: quarter because of the movie Hollywood. The Hollywood Reporter is
Speaker 9: saying forty one group they saw one time revenue increase
Speaker 9: from the release of the movie late June contributed to
Speaker 9: the group's forty percent rise in revenue year over year
Speaker 9: to hit one billion dollars and the president of the
Speaker 9: Formula One group is saying, you know what, it's helping
Speaker 9: the popularity of the sport too because of the movie.
Speaker 9: It's getting excitement around it. A new generation too is
Speaker 9: getting flow.
Speaker 2: And the latest thing I saw in this, John Ferrell
Speaker 2: is the one that's really expert on this is all
Speaker 2: of a sudden, the drivers that they're like, you date,
Speaker 2: they're like celebri They're like, you know.
Speaker 5: Well, I mean it's the girls.
Speaker 4: Girls are paying huge attention to this.
Speaker 5: It's McLaren. I mean, it's Piastre, it's Norris. I mean,
Speaker 5: they're going for the drivers come and then they're neck
Speaker 5: and neck for it. I mean, and look, it's no
Speaker 5: longer max for staffans world.
Speaker 2: Right, that's very good. And they're on summer break now.
Speaker 2: We'll pick it up here in a couple of weeks.
Speaker 2: Lisa mateou thank you so much.
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify,
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