1 00:00:02,400 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:11,920 --> 00:00:16,320 Speaker 2: This is the Bloomberg Surveillance Podcast. Catch us live weekdays 3 00:00:16,360 --> 00:00:19,640 Speaker 2: at seven am Eastern on Apple car Player, Android Auto 4 00:00:19,760 --> 00:00:23,080 Speaker 2: with the Bloomberg Business App. Listen on demand wherever you 5 00:00:23,120 --> 00:00:26,239 Speaker 2: get your podcasts, or watch us live on YouTube. 6 00:00:26,680 --> 00:00:29,440 Speaker 3: When you're a young cherub and you go to Colorado College, 7 00:00:29,480 --> 00:00:33,440 Speaker 3: you study physics, which is what David Malpast joining as 8 00:00:33,440 --> 00:00:36,480 Speaker 3: the former president of the World Bank iconic at bear 9 00:00:36,520 --> 00:00:40,479 Speaker 3: Sterns years ago. David malpast darkens the door this morning. 10 00:00:42,159 --> 00:00:49,160 Speaker 3: Casey has yet to concede. In Pennsylvania. Tuberville, the football coach, dragged. 11 00:00:48,680 --> 00:00:52,920 Speaker 4: You into the Senate. He said, we need senate testimony. 12 00:00:52,360 --> 00:00:58,120 Speaker 3: From David malpass On. You know, global economics in all that, 13 00:00:58,800 --> 00:01:00,600 Speaker 3: you're one of the few people I know that's actually 14 00:01:00,680 --> 00:01:03,840 Speaker 3: been in the trenches in the United States Senate. Do 15 00:01:03,920 --> 00:01:07,120 Speaker 3: you see with this new administration, David, with your affiliation 16 00:01:07,240 --> 00:01:12,560 Speaker 3: with the Republicans, do you see a suddenness rapid movement 17 00:01:12,959 --> 00:01:16,160 Speaker 3: between the executive and the legislative. 18 00:01:15,400 --> 00:01:19,240 Speaker 4: Branch or will it be slower and more iterative? 19 00:01:20,240 --> 00:01:24,160 Speaker 5: Hi? Tom, And that's a great question and issue. I 20 00:01:24,160 --> 00:01:27,080 Speaker 5: think it'll be pretty fast because there really is a 21 00:01:27,160 --> 00:01:29,920 Speaker 5: mandate from the country to bring change. 22 00:01:30,080 --> 00:01:31,840 Speaker 4: Then how do you see a mandate. 23 00:01:31,959 --> 00:01:36,160 Speaker 3: I've got Vice President Harrison narrow it down to fifty 24 00:01:36,319 --> 00:01:39,280 Speaker 3: forty it's something like two hundred and thirty eight thousand 25 00:01:39,360 --> 00:01:39,720 Speaker 3: votes and. 26 00:01:39,760 --> 00:01:40,800 Speaker 4: Three swing states. 27 00:01:40,959 --> 00:01:43,479 Speaker 3: I got a guy in a San Joaquin Valley right now, 28 00:01:43,560 --> 00:01:45,280 Speaker 3: Republican winning. 29 00:01:45,000 --> 00:01:46,679 Speaker 4: By under three hundred votes. 30 00:01:46,880 --> 00:01:50,840 Speaker 3: If the Democrats take west of Fresno, it's one more 31 00:01:50,880 --> 00:01:51,760 Speaker 3: Democrat in the House. 32 00:01:51,840 --> 00:01:53,680 Speaker 4: It's not a mandate, David. 33 00:01:54,480 --> 00:01:58,120 Speaker 5: I beg to differ. So it means all seven of 34 00:01:58,160 --> 00:02:01,040 Speaker 5: the swing states were one. And if you look at 35 00:02:01,120 --> 00:02:04,160 Speaker 5: all the demographics, in other words, each but if you 36 00:02:04,240 --> 00:02:07,040 Speaker 5: parse it by age, if you parsh it by by u, 37 00:02:07,480 --> 00:02:13,040 Speaker 5: by by skills, you get people wanting change. And so 38 00:02:13,120 --> 00:02:15,960 Speaker 5: that means the Senate is going to come Let's come 39 00:02:15,960 --> 00:02:19,400 Speaker 5: to your question. There's a turnover, a very important turnover 40 00:02:19,520 --> 00:02:21,760 Speaker 5: of the majority leader, and you know, the staff on 41 00:02:21,840 --> 00:02:24,200 Speaker 5: all the committees turns over, and so there will be 42 00:02:24,240 --> 00:02:28,880 Speaker 5: people whose lifeblood is not regulating and so that means 43 00:02:29,160 --> 00:02:32,000 Speaker 5: a big change in how the Senate operates. Of course, 44 00:02:32,040 --> 00:02:34,239 Speaker 5: it's the deliberative body, and it will take time to 45 00:02:34,280 --> 00:02:36,760 Speaker 5: get some stuff done. But I'd imagine there's going to 46 00:02:36,760 --> 00:02:40,440 Speaker 5: be a tax movement on the tax front very quickly, 47 00:02:40,720 --> 00:02:43,960 Speaker 5: of course, on energy and on on on trade where 48 00:02:43,960 --> 00:02:47,160 Speaker 5: the system is broken, so you'll see all of that moving, 49 00:02:47,800 --> 00:02:50,560 Speaker 5: you know, month by month pretty rapidly. 50 00:02:50,960 --> 00:02:52,959 Speaker 6: What do you think of some of the president's cabinet 51 00:02:53,360 --> 00:02:55,720 Speaker 6: nominations to date? What is it? What have you kind 52 00:02:55,760 --> 00:02:56,200 Speaker 6: of sensed? 53 00:02:56,960 --> 00:03:00,520 Speaker 5: He's well, I think they're great. But what you see 54 00:03:00,639 --> 00:03:04,320 Speaker 5: is him wanting change, change, change, And so that to 55 00:03:04,400 --> 00:03:07,399 Speaker 5: me is the signal coming out of each area. Put 56 00:03:07,480 --> 00:03:10,320 Speaker 5: strong people in that want change. Look at the energy 57 00:03:10,800 --> 00:03:16,520 Speaker 5: pick so Chris, Chris, Right, Bergham are really strong, Lee's Eldon, 58 00:03:16,639 --> 00:03:19,960 Speaker 5: and these are the energy side that can make you know, 59 00:03:20,000 --> 00:03:22,880 Speaker 5: if you think about how do you make America strong again? 60 00:03:23,919 --> 00:03:26,400 Speaker 5: And this is peace through strength? Where do you get 61 00:03:26,440 --> 00:03:28,000 Speaker 5: the strength from production? 62 00:03:28,360 --> 00:03:29,160 Speaker 4: How do you do that? 63 00:03:29,280 --> 00:03:31,840 Speaker 5: You get the energy sector going so that you can 64 00:03:31,880 --> 00:03:34,480 Speaker 5: build all the other things that go into an economy. 65 00:03:34,560 --> 00:03:36,680 Speaker 3: Yeah, but we're like, aren't we like the number one 66 00:03:36,880 --> 00:03:39,800 Speaker 3: energy power in the world now bigger than Saudi Arabia. 67 00:03:39,800 --> 00:03:40,840 Speaker 4: There's an oversupply. 68 00:03:41,200 --> 00:03:43,840 Speaker 3: McLoone says a barrel of oil is going to twelve 69 00:03:43,840 --> 00:03:45,400 Speaker 3: bucks a barrel I'm. 70 00:03:45,280 --> 00:03:48,480 Speaker 4: Kidding, be well, stranger. 71 00:03:48,680 --> 00:03:52,640 Speaker 5: You know, remember when to ten dollars a barrel in 72 00:03:52,760 --> 00:03:55,720 Speaker 5: the year two nineteen ninety nine, in two thousand, when 73 00:03:55,720 --> 00:03:58,280 Speaker 5: the dollar is super strong, overly strong. So I don't 74 00:03:58,280 --> 00:04:00,680 Speaker 5: know that we want that low, but it would be 75 00:04:00,680 --> 00:04:03,600 Speaker 5: good if it comes down. And the bigger thing is 76 00:04:03,960 --> 00:04:06,960 Speaker 5: the US could be doing so much more. You just 77 00:04:07,080 --> 00:04:09,840 Speaker 5: named parts of the world that are plentifully supplied, but 78 00:04:09,880 --> 00:04:12,160 Speaker 5: they are huge parts of the world that don't have 79 00:04:12,320 --> 00:04:15,120 Speaker 5: enough energy. And think of the craziness that we've got 80 00:04:15,160 --> 00:04:17,960 Speaker 5: because of the lack of pipelines. We've got the energy. 81 00:04:18,279 --> 00:04:20,800 Speaker 5: The L and G goes through the Panama Canal. It's 82 00:04:20,839 --> 00:04:24,200 Speaker 5: such a wasteful use of the water. You know, Panama 83 00:04:24,200 --> 00:04:27,800 Speaker 5: Canal is driven by free flowing water that comes from rain, 84 00:04:28,080 --> 00:04:30,640 Speaker 5: and you wash the ships down both sides of the canal. 85 00:04:30,920 --> 00:04:33,760 Speaker 5: And you're doing it to get LNG to Asia from 86 00:04:33,839 --> 00:04:36,040 Speaker 5: the unit from the East coast. 87 00:04:37,480 --> 00:04:41,320 Speaker 3: Harbor overlooking they're already San Francisco Giants Stadium. 88 00:04:42,040 --> 00:04:45,320 Speaker 5: There needs to be some way to get energy onto 89 00:04:45,360 --> 00:04:48,200 Speaker 5: the west coast of either the US or Canada. They're 90 00:04:48,200 --> 00:04:51,039 Speaker 5: building one into Mexico, but how does that really help 91 00:04:51,120 --> 00:04:53,560 Speaker 5: the US? If you have to go down through Mexico 92 00:04:53,680 --> 00:04:55,800 Speaker 5: to get your energy out of the out of the 93 00:04:55,880 --> 00:04:56,600 Speaker 5: hymnstry too. 94 00:04:56,560 --> 00:05:00,600 Speaker 3: Much geography with David Melb'll save the conversations. 95 00:05:00,600 --> 00:05:02,599 Speaker 6: Down in that part of the world. The G twenty 96 00:05:02,640 --> 00:05:05,640 Speaker 6: is just finishing up down in Rio here. How do 97 00:05:05,680 --> 00:05:11,200 Speaker 6: you think President elect Trump views the entities organizations like 98 00:05:11,200 --> 00:05:13,440 Speaker 6: the G twenty and that try to think about things 99 00:05:13,480 --> 00:05:16,760 Speaker 6: on a global basis. How do you think he anticipates engaging. 100 00:05:16,880 --> 00:05:18,760 Speaker 5: I don't know how he thinks about it, but it 101 00:05:18,800 --> 00:05:22,840 Speaker 5: should be clear to everyone that the globalism isn't working. 102 00:05:22,960 --> 00:05:27,000 Speaker 5: This is the giant conferences. Think of that ten literally 103 00:05:27,120 --> 00:05:29,440 Speaker 5: tens of thousands of people. I've had to go to 104 00:05:29,520 --> 00:05:33,039 Speaker 5: these conferences. We recently saw the one in Baku. Think 105 00:05:33,080 --> 00:05:37,800 Speaker 5: of the absurdity of having the climate conference in Baku, Azerbaijan, 106 00:05:38,080 --> 00:05:41,160 Speaker 5: which is the conduit for Russian oil coming under the 107 00:05:41,200 --> 00:05:43,839 Speaker 5: sanctions out into the rest of the world. So you've 108 00:05:43,839 --> 00:05:48,160 Speaker 5: got this and literally it's ten thousand people from that 109 00:05:48,240 --> 00:05:51,640 Speaker 5: are all trying to get government contracts. So it's a 110 00:05:51,800 --> 00:05:56,920 Speaker 5: climate industrial complex, just like the military industrial complex that's 111 00:05:57,000 --> 00:06:01,560 Speaker 5: so expensive. You need to have defense for the US, 112 00:06:01,720 --> 00:06:03,520 Speaker 5: but you need to have it in a way that's 113 00:06:03,920 --> 00:06:05,480 Speaker 5: that's competitive in that world. 114 00:06:05,680 --> 00:06:08,119 Speaker 3: David Malpass, for the former President of the World Bank, 115 00:06:09,080 --> 00:06:11,120 Speaker 3: thrilled that he could join us this morning. 116 00:06:11,120 --> 00:06:11,840 Speaker 4: We welcome all. 117 00:06:11,760 --> 00:06:13,880 Speaker 3: Of you on your commute across the nation and of 118 00:06:13,960 --> 00:06:18,320 Speaker 3: course on YouTube subscribe to Bloomberg Podcast. I have literally 119 00:06:18,440 --> 00:06:22,159 Speaker 3: on the desk at home Lightheiser, No Trade is Free. 120 00:06:22,279 --> 00:06:25,320 Speaker 3: I'm going to read it cover to cover just to 121 00:06:25,360 --> 00:06:30,320 Speaker 3: get an understanding of Lightheiser economics. You're at Colorado College 122 00:06:30,680 --> 00:06:36,640 Speaker 3: lecturing EC one O two macroeconomics. David Malpass discussed the 123 00:06:36,800 --> 00:06:38,760 Speaker 3: efficacy of tariffs. 124 00:06:40,120 --> 00:06:43,359 Speaker 5: The system is broken in the world. It was set 125 00:06:43,440 --> 00:06:47,000 Speaker 5: up at a time before China was the number. 126 00:06:46,760 --> 00:06:47,920 Speaker 4: Two world power. 127 00:06:48,200 --> 00:06:51,320 Speaker 5: You had a concept in the sixties and seventies that 128 00:06:51,480 --> 00:06:55,120 Speaker 5: somehow there could be kumbaya that everybody could cover together. 129 00:06:55,279 --> 00:06:58,160 Speaker 5: Everyone formed a deal and everybody lower. 130 00:06:58,160 --> 00:06:59,960 Speaker 4: Vice President Harris would agree with you. 131 00:07:00,080 --> 00:07:05,520 Speaker 5: And it's completely broken down because you have this giantly 132 00:07:06,920 --> 00:07:11,720 Speaker 5: aggressive commercial power that's not playing by the rules on 133 00:07:11,840 --> 00:07:16,680 Speaker 5: intellectual property, on their overcapacity of manufactured goods. 134 00:07:16,680 --> 00:07:17,720 Speaker 4: So it's a it's. 135 00:07:17,640 --> 00:07:21,600 Speaker 5: A you know, taking away markets from the rest. 136 00:07:21,440 --> 00:07:22,920 Speaker 4: Of Do we need tariffs? 137 00:07:23,000 --> 00:07:26,320 Speaker 3: Did are gradual and marginal or do we need the 138 00:07:26,480 --> 00:07:30,280 Speaker 3: jump condition that the President elect talks about a magnitude 139 00:07:30,320 --> 00:07:32,600 Speaker 3: of tariffs that haven't seen in generations. 140 00:07:33,240 --> 00:07:36,400 Speaker 5: You need to get the world's attention that what they're 141 00:07:36,400 --> 00:07:38,200 Speaker 5: doing is broken. I don't know if you saw, but 142 00:07:38,280 --> 00:07:41,800 Speaker 5: President she was in South America last week and he 143 00:07:41,960 --> 00:07:44,200 Speaker 5: was making the case to all the other world leaders 144 00:07:44,440 --> 00:07:47,560 Speaker 5: to go gradual. And so China is kind of bidding 145 00:07:47,600 --> 00:07:50,160 Speaker 5: for time. They're saying, oh, this is gonna you know, 146 00:07:50,440 --> 00:07:54,280 Speaker 5: we're moving in your direction. And so whether the rest 147 00:07:54,320 --> 00:07:57,440 Speaker 5: of the world buys that, and you know, China often 148 00:07:57,480 --> 00:08:01,720 Speaker 5: pays for it with contracts, with with UH gifts, gifts 149 00:08:01,720 --> 00:08:05,560 Speaker 5: that can be UH shared in families and UH. And 150 00:08:05,600 --> 00:08:09,080 Speaker 5: so how do you stop that and really get onto 151 00:08:09,160 --> 00:08:12,160 Speaker 5: a new wavelength with China and with the rest of 152 00:08:12,200 --> 00:08:13,840 Speaker 5: the world in fairness. 153 00:08:13,480 --> 00:08:16,120 Speaker 6: Should the US approach to chrying to be one of 154 00:08:16,200 --> 00:08:20,400 Speaker 6: engagement or one of you know, just trying to really 155 00:08:20,440 --> 00:08:23,200 Speaker 6: step back from China. How do you think the approach 156 00:08:23,200 --> 00:08:23,480 Speaker 6: should be? 157 00:08:23,600 --> 00:08:26,800 Speaker 5: I think there has so for too many years now, 158 00:08:27,000 --> 00:08:29,480 Speaker 5: China has been getting what it wants. I saw that 159 00:08:29,680 --> 00:08:33,640 Speaker 5: in the World conferences. They really are winning on the 160 00:08:34,040 --> 00:08:37,480 Speaker 5: on the soft power. And so you have to take 161 00:08:37,520 --> 00:08:40,720 Speaker 5: that back because the US has all the all the 162 00:08:40,800 --> 00:08:44,000 Speaker 5: ability to do this, it just has been choosing not 163 00:08:44,120 --> 00:08:45,960 Speaker 5: to do it. You know, we've been trying to get 164 00:08:46,000 --> 00:08:49,120 Speaker 5: peace through weakness, and so if you switch to peace 165 00:08:49,160 --> 00:08:53,000 Speaker 5: through strength, China is going to change its side of 166 00:08:53,040 --> 00:08:56,240 Speaker 5: the of the discussion as well. They're not they're not. 167 00:08:57,040 --> 00:09:00,440 Speaker 5: I mean, they've followed very closely what's what's going on 168 00:09:00,559 --> 00:09:03,600 Speaker 5: in the US and will be responding to it. So 169 00:09:03,679 --> 00:09:06,560 Speaker 5: then you've got to say, Okay, we've got a bunch 170 00:09:06,600 --> 00:09:09,800 Speaker 5: of problems. Here's our list of problems. You're producing too 171 00:09:09,840 --> 00:09:12,880 Speaker 5: much steal with too much coal, with and claiming and 172 00:09:12,920 --> 00:09:16,600 Speaker 5: then pushing climate agenda through the Paris Agreement that you're 173 00:09:16,640 --> 00:09:17,520 Speaker 5: not complying with. 174 00:09:17,800 --> 00:09:18,480 Speaker 4: We don't like that. 175 00:09:18,720 --> 00:09:23,360 Speaker 5: Intellectual property you're stealing. You've never let down on stealing 176 00:09:23,400 --> 00:09:24,600 Speaker 5: the intellectual property. 177 00:09:24,720 --> 00:09:28,560 Speaker 3: David, I got one final question, with great respect Tom 178 00:09:28,679 --> 00:09:32,400 Speaker 3: Nichols the Death of Expertise Profound book. I interviewed him 179 00:09:32,400 --> 00:09:34,800 Speaker 3: when it came out. We're trying to get mister Nichols 180 00:09:34,800 --> 00:09:39,040 Speaker 3: on again to talk about it. This is an administration. 181 00:09:39,440 --> 00:09:42,680 Speaker 3: David Malpass has the best English skills of anyone I've 182 00:09:42,720 --> 00:09:43,320 Speaker 3: ever known. 183 00:09:43,760 --> 00:09:44,640 Speaker 4: On Wall Street. 184 00:09:44,679 --> 00:09:48,439 Speaker 3: You and John Writing were prodigious in your economic output 185 00:09:48,480 --> 00:09:53,160 Speaker 3: for Alan Schwartz at bear Sterns Physics, Colorado Collegey. You're 186 00:09:53,200 --> 00:09:57,160 Speaker 3: the real deal on a conservative tone. Some of these 187 00:09:57,280 --> 00:10:01,439 Speaker 3: people have zero expert piece. What would you say to 188 00:10:01,480 --> 00:10:04,400 Speaker 3: the President elect right now if these people are pushed 189 00:10:04,400 --> 00:10:05,800 Speaker 3: aside by Senate? 190 00:10:07,120 --> 00:10:09,800 Speaker 5: Well, I don't think that'll happen. But what I think 191 00:10:09,840 --> 00:10:13,640 Speaker 5: what the president can see is that he's clearly on 192 00:10:13,679 --> 00:10:19,280 Speaker 5: the He's got a powerful path that's taxes, energy, that's making. 193 00:10:19,120 --> 00:10:22,079 Speaker 3: Why is he running then from expertise because there are 194 00:10:22,160 --> 00:10:25,920 Speaker 3: conservatives like you that have their head screwed on. 195 00:10:26,440 --> 00:10:30,680 Speaker 5: A problem is expertise often has meant your inside the 196 00:10:30,720 --> 00:10:34,480 Speaker 5: belt Way with their models, and so if we really 197 00:10:34,520 --> 00:10:36,719 Speaker 5: have to have an upheaval where you shake it up 198 00:10:36,960 --> 00:10:40,880 Speaker 5: with people that have views from outside, I got to make. 199 00:10:40,720 --> 00:10:41,360 Speaker 4: Some news today. 200 00:10:41,360 --> 00:10:44,240 Speaker 3: Have you been called by the president by Susan Are 201 00:10:44,280 --> 00:10:48,840 Speaker 3: you going to serve within the Trump administration? Come on news, okay, 202 00:10:48,920 --> 00:10:51,720 Speaker 3: David Malpas, thank you so much. Formerly with the World Bank. 203 00:10:57,320 --> 00:11:01,160 Speaker 2: You're listening to the Bloomberg Surveillance podcast. Catch us Live 204 00:11:01,280 --> 00:11:04,560 Speaker 2: weekday afternoons from seven to ten am. Easter Listen on 205 00:11:04,640 --> 00:11:07,840 Speaker 2: Apple CarPlay and Android Auto with a Bloomberg Business app, 206 00:11:07,960 --> 00:11:09,680 Speaker 2: or watch us live on YouTube. 207 00:11:09,760 --> 00:11:12,960 Speaker 3: Michael Darta with Roth Campbell and I don't think I've 208 00:11:13,000 --> 00:11:16,520 Speaker 3: ever seen as political a note Washington. A note out 209 00:11:16,520 --> 00:11:18,440 Speaker 3: of data is what I've got in front of me 210 00:11:18,920 --> 00:11:24,400 Speaker 3: in italics. To simply keep current law in place, new 211 00:11:24,480 --> 00:11:28,480 Speaker 3: revenue sources will be needed, Michael Data, what do you 212 00:11:28,600 --> 00:11:32,400 Speaker 3: expect in January, February and beyond. 213 00:11:34,640 --> 00:11:38,360 Speaker 7: Hi, Tom, thanks for having me on. Look, the Administration 214 00:11:38,840 --> 00:11:41,360 Speaker 7: and Congress are going to have to work through the 215 00:11:41,400 --> 00:11:45,160 Speaker 7: confines of budget reconciliation, and that's really just a technical 216 00:11:45,280 --> 00:11:47,720 Speaker 7: term for saying that they're not going to be able 217 00:11:47,760 --> 00:11:51,080 Speaker 7: to increase the fiscal deficit outside of a ten year window, 218 00:11:51,600 --> 00:11:54,760 Speaker 7: and that means they're going to need some revenue in 219 00:11:54,840 --> 00:11:58,680 Speaker 7: order to either make parts or the entirety of the 220 00:11:58,720 --> 00:12:03,320 Speaker 7: twenty seventeen ten A law permanent, or if you know, 221 00:12:03,400 --> 00:12:06,280 Speaker 7: the idea is to to cut new taxes, They're going 222 00:12:06,360 --> 00:12:08,600 Speaker 7: to need revenues for that, and I think we know 223 00:12:08,720 --> 00:12:11,880 Speaker 7: where those revenues are going to come from. The attempt 224 00:12:11,920 --> 00:12:16,000 Speaker 7: is going to be to generate them from tariffs, potentially 225 00:12:16,200 --> 00:12:21,960 Speaker 7: a fairly significant across the board tariff increase, and you know, 226 00:12:22,080 --> 00:12:24,720 Speaker 7: I think the notion that this is just a bluff 227 00:12:25,040 --> 00:12:28,959 Speaker 7: or a negotiating tactic is simply incorrect. 228 00:12:29,080 --> 00:12:29,280 Speaker 4: Yeah. 229 00:12:29,280 --> 00:12:32,400 Speaker 3: Greg Valier really emphasizes that from AGF this morning. 230 00:12:32,400 --> 00:12:34,240 Speaker 4: He says, this is not a bluff. 231 00:12:34,720 --> 00:12:38,960 Speaker 3: What do Trump tariffs do to the stock market? 232 00:12:40,600 --> 00:12:44,600 Speaker 7: You know, it's a great question, Tom. You know, I 233 00:12:44,640 --> 00:12:47,720 Speaker 7: think we have some risks here because the equity market 234 00:12:47,840 --> 00:12:52,560 Speaker 7: valuations are quite high. On any measure. If you look 235 00:12:52,559 --> 00:12:56,360 Speaker 7: at forward earnings estimates, which are quite optimistic, we're in 236 00:12:56,400 --> 00:13:00,040 Speaker 7: a twenty two plus multiple that's historically high. The so 237 00:13:00,120 --> 00:13:03,320 Speaker 7: called buffet indicator that just looks at market cap or 238 00:13:03,360 --> 00:13:07,840 Speaker 7: the stock market itself relative to the nominal GDP or 239 00:13:07,880 --> 00:13:11,040 Speaker 7: at the highest level since nineteen twenty nine, which, by 240 00:13:11,120 --> 00:13:15,040 Speaker 7: the way, was the year that smooth Hally passed Congress, 241 00:13:15,520 --> 00:13:18,320 Speaker 7: cleared the Senate the following year, and was signed into law, 242 00:13:19,000 --> 00:13:21,960 Speaker 7: and that made it, you know, infamous because that was 243 00:13:22,000 --> 00:13:24,760 Speaker 7: the beginning of the Great Depression. So I think we're 244 00:13:24,760 --> 00:13:27,400 Speaker 7: playing with fire a little bit here if we're going 245 00:13:27,440 --> 00:13:31,240 Speaker 7: to experiment with potential shocks to the supply side of 246 00:13:31,240 --> 00:13:35,280 Speaker 7: the economy when equity market valuations are as high as 247 00:13:35,320 --> 00:13:38,080 Speaker 7: they are, and you know, the FED is so far 248 00:13:38,240 --> 00:13:42,200 Speaker 7: successfully soft landed the nominal economy. If you look at 249 00:13:42,280 --> 00:13:46,200 Speaker 7: nominal GDP growth, you know, we've settled into just over 250 00:13:46,240 --> 00:13:50,040 Speaker 7: a five percent zone and that's happened with productivity rebounding 251 00:13:50,040 --> 00:13:54,720 Speaker 7: over the last six quarters. So anything that potentially disturbs 252 00:13:54,800 --> 00:13:58,240 Speaker 7: the supply side with a relative price shock from tariffs 253 00:13:58,800 --> 00:14:01,680 Speaker 7: or a slower growth growth shocked to the labor force 254 00:14:02,320 --> 00:14:04,960 Speaker 7: could end up being a problem for corporate profit margins 255 00:14:05,000 --> 00:14:08,440 Speaker 7: and these super high equity market valuations that are in 256 00:14:08,480 --> 00:14:09,160 Speaker 7: place today. 257 00:14:09,960 --> 00:14:13,240 Speaker 6: Michael, could you explain the math associate it with tariffs? 258 00:14:13,559 --> 00:14:16,760 Speaker 6: Is that direct revenue to the US government number number 259 00:14:16,840 --> 00:14:20,720 Speaker 6: one and number two? Do those increases in cost do 260 00:14:20,760 --> 00:14:24,360 Speaker 6: they get passed along to consumers and maybe cause of inflation? 261 00:14:25,560 --> 00:14:25,720 Speaker 8: Yeah? 262 00:14:25,760 --> 00:14:28,600 Speaker 7: Absolutely so, I mean the you know, the tariffs are 263 00:14:28,680 --> 00:14:31,880 Speaker 7: simply a tax. You know, they would be equivalent to 264 00:14:31,960 --> 00:14:35,920 Speaker 7: raising sales taxes, but they're not across the board, so 265 00:14:36,360 --> 00:14:39,560 Speaker 7: you know, it's a it's a narrow tax base relative 266 00:14:39,600 --> 00:14:43,240 Speaker 7: to the total consumption tax base, so total imports of 267 00:14:43,280 --> 00:14:46,640 Speaker 7: goods are around three trillion. You know, there's been some 268 00:14:46,880 --> 00:14:50,240 Speaker 7: discussion on the campaign trail of using tariffs to get 269 00:14:50,320 --> 00:14:52,360 Speaker 7: rid of the income tax, and that's just not going 270 00:14:52,440 --> 00:14:55,680 Speaker 7: to be doable because you know, the tax base is 271 00:14:55,720 --> 00:14:59,000 Speaker 7: simply not wide en up. So one principle of good 272 00:14:59,080 --> 00:15:03,720 Speaker 7: tax policy is to have the broadest possible base with 273 00:15:03,840 --> 00:15:08,640 Speaker 7: the lowest possible rates, and you know, trying to raise 274 00:15:08,680 --> 00:15:11,240 Speaker 7: a lot of revenue from tariffs does not meet that test, 275 00:15:12,040 --> 00:15:15,560 Speaker 7: so it will cause distortions. You know, the late great 276 00:15:15,760 --> 00:15:18,880 Speaker 7: Milton Friedman, I think put it best when he said 277 00:15:18,920 --> 00:15:24,520 Speaker 7: that the problem with protectionism is that the beneficiaries are concentrated, 278 00:15:24,960 --> 00:15:30,160 Speaker 7: visible and vocal, but the costs are very diffuse, right, 279 00:15:30,200 --> 00:15:33,760 Speaker 7: And that's examply right. So from that perspective, you know, 280 00:15:33,840 --> 00:15:36,720 Speaker 7: I think this is a risk to the market and 281 00:15:37,200 --> 00:15:37,840 Speaker 7: the business side. 282 00:15:37,880 --> 00:15:40,160 Speaker 3: I like what George Will said in the Washington Post. 283 00:15:40,200 --> 00:15:43,040 Speaker 3: He said, what are tariffs? They're like putting a blockade 284 00:15:43,080 --> 00:15:46,200 Speaker 3: around your own harbors. I thought that sort of summed 285 00:15:46,240 --> 00:15:49,120 Speaker 3: it up in a nice vignette as well. Michael Data, 286 00:15:49,160 --> 00:15:50,960 Speaker 3: then are you I want to talk to markets when 287 00:15:51,000 --> 00:15:53,880 Speaker 3: we come back and fed But Michael Darta, are you 288 00:15:54,240 --> 00:15:59,240 Speaker 3: advocating that people who are measured conservative like John Tucker, 289 00:15:59,280 --> 00:16:03,080 Speaker 3: they're in there tirement plan. There are days from retiring 290 00:16:03,440 --> 00:16:05,160 Speaker 3: that they lighten up on equities. 291 00:16:05,720 --> 00:16:09,800 Speaker 7: Well, look, Tom, obviously, trying to time the stock market 292 00:16:10,120 --> 00:16:14,280 Speaker 7: typically does not work out for folks, so I think 293 00:16:14,280 --> 00:16:16,280 Speaker 7: we have to be really careful with that. A slow 294 00:16:16,320 --> 00:16:19,320 Speaker 7: and steady approach is the way to go. If John's 295 00:16:19,400 --> 00:16:22,560 Speaker 7: very close to retirement, then you know, I'm assuming that 296 00:16:22,640 --> 00:16:24,800 Speaker 7: he's already got it all planned out in terms of 297 00:16:24,840 --> 00:16:28,880 Speaker 7: becoming more conservative over time. But what I would say 298 00:16:28,960 --> 00:16:33,040 Speaker 7: is this, I think these high equity valuations make a 299 00:16:33,280 --> 00:16:36,960 Speaker 7: very strong case for value investing, which is, you know, 300 00:16:37,080 --> 00:16:39,280 Speaker 7: kind of gone by the wayside as we've been in 301 00:16:39,320 --> 00:16:42,360 Speaker 7: the throes of this AI tech frenzy over the last 302 00:16:42,360 --> 00:16:46,360 Speaker 7: few years, and you could do a Barbell approach. So 303 00:16:46,520 --> 00:16:50,360 Speaker 7: if there's a small portfolio that you are going to manage, 304 00:16:50,400 --> 00:16:53,600 Speaker 7: and it shouldn't be the whole portfolio, I would say 305 00:16:53,640 --> 00:16:56,440 Speaker 7: defensives on one side. So if we get these rate 306 00:16:56,520 --> 00:16:58,840 Speaker 7: shocks like we have over the last two months, that's 307 00:16:58,840 --> 00:17:01,000 Speaker 7: a time to lean into the cases. 308 00:17:01,200 --> 00:17:06,520 Speaker 3: Should we continue with Michael dart a rough Capital this morning? Michael, 309 00:17:06,560 --> 00:17:08,240 Speaker 3: I want to talk about the FED and let's just 310 00:17:08,280 --> 00:17:11,760 Speaker 3: begin with the beginning idea of a nonlinear move to 311 00:17:11,800 --> 00:17:15,680 Speaker 3: wherever we're going is the FED restrictive right now? 312 00:17:17,240 --> 00:17:17,480 Speaker 4: Boy? 313 00:17:17,560 --> 00:17:21,399 Speaker 7: Tom, that's the one hundred million dollar question. You know, 314 00:17:22,240 --> 00:17:26,000 Speaker 7: fedhare Powell, I think would admit that they don't really 315 00:17:26,119 --> 00:17:29,760 Speaker 7: know the answer that question. I think they're probably still 316 00:17:30,200 --> 00:17:34,719 Speaker 7: modestly restrictive, but certainly less so than they were before 317 00:17:34,800 --> 00:17:37,760 Speaker 7: the first fifty basis point rate cut, followed up by 318 00:17:37,800 --> 00:17:42,040 Speaker 7: twenty five basis points, and now markets expect you know, 319 00:17:42,800 --> 00:17:46,080 Speaker 7: one more twenty five basis point cut. I think we 320 00:17:46,200 --> 00:17:49,359 Speaker 7: might be close to a potential FED pause. And the 321 00:17:49,400 --> 00:17:52,959 Speaker 7: reason I say that is when fedhare Powell and company 322 00:17:53,119 --> 00:17:56,960 Speaker 7: started this cutting effort, what he said was, we don't 323 00:17:57,000 --> 00:17:58,960 Speaker 7: know where the R star is, we don't know where 324 00:17:58,960 --> 00:18:03,040 Speaker 7: neutral is, but we're pretty confident that we're above neutral 325 00:18:03,119 --> 00:18:06,960 Speaker 7: based on all of the mainstream estimates. That is no 326 00:18:07,080 --> 00:18:11,280 Speaker 7: longer the case with seventy five bases nominal rate cuts 327 00:18:11,280 --> 00:18:15,680 Speaker 7: in the bag and a modest bump hire in bond 328 00:18:15,720 --> 00:18:16,920 Speaker 7: market inflation experts. 329 00:18:16,920 --> 00:18:18,199 Speaker 4: Oh, Michael, what's so important to me? 330 00:18:18,200 --> 00:18:20,200 Speaker 3: And this goes back to your work with jud Waitinsky 331 00:18:20,280 --> 00:18:25,320 Speaker 3: right out of Wisconsin Whitewater is do you aggregate the nation? 332 00:18:25,880 --> 00:18:28,560 Speaker 3: And can Powell aggregate our policy? 333 00:18:29,359 --> 00:18:30,080 Speaker 4: Or witness the. 334 00:18:30,040 --> 00:18:34,320 Speaker 3: Election and all attention. Are there two Americas where the 335 00:18:34,400 --> 00:18:39,240 Speaker 3: FED has to somehow make policy around those two Americas? 336 00:18:40,560 --> 00:18:43,720 Speaker 7: Yeah, well, the FED does have to deal with aggregates, 337 00:18:43,920 --> 00:18:47,560 Speaker 7: you know, inflation, total spending, nominal growth in the economy, 338 00:18:47,840 --> 00:18:50,800 Speaker 7: of the labor market. It can't target sectors. That's not 339 00:18:50,920 --> 00:18:54,240 Speaker 7: the role of the Federal Reserve. If we're talking about, 340 00:18:54,560 --> 00:18:58,960 Speaker 7: you know, issues in terms of redistribution and taxation and regulation, 341 00:18:59,080 --> 00:19:01,760 Speaker 7: that really falls on in Congress and elected officials to 342 00:19:01,800 --> 00:19:05,239 Speaker 7: deal with. And in terms of fiscal policy, you know, 343 00:19:05,280 --> 00:19:07,840 Speaker 7: the FED has to just operate with what it's given. 344 00:19:07,880 --> 00:19:11,399 Speaker 7: And there's a tremendous amount of uncertainty ahead as we 345 00:19:11,440 --> 00:19:14,760 Speaker 7: move into twenty twenty five. The conventional wisdom is that, 346 00:19:15,080 --> 00:19:19,200 Speaker 7: you know, we're moving into a more accommodative fiscal environment. 347 00:19:19,320 --> 00:19:22,120 Speaker 7: But for the reasons that we discussed at the opening, Tom, 348 00:19:22,160 --> 00:19:26,320 Speaker 7: I think that may be incorrect. So, you know, if 349 00:19:26,320 --> 00:19:30,000 Speaker 7: you go back to the strictures of budget reconciliation, the 350 00:19:30,080 --> 00:19:33,280 Speaker 7: administration is going to have to find revenue to permanently 351 00:19:33,320 --> 00:19:36,280 Speaker 7: extend any of these tax cuts, and if that means 352 00:19:36,840 --> 00:19:39,840 Speaker 7: big tariff increases, and the view is that those are 353 00:19:39,880 --> 00:19:43,880 Speaker 7: not contractionary and don't hurt the US economy. Not my view, 354 00:19:43,920 --> 00:19:46,960 Speaker 7: but you know, obviously that's the view of the incoming president. 355 00:19:47,320 --> 00:19:51,320 Speaker 7: You could end up with a substantial fiscal heightening, and 356 00:19:51,720 --> 00:19:55,160 Speaker 7: so this is a tricky environment for the FED. If 357 00:19:55,160 --> 00:19:58,760 Speaker 7: that tightening disrupts the productivity rebound that's underway, that's going 358 00:19:58,840 --> 00:20:02,560 Speaker 7: to make the Fed's job harder. So you know, there's 359 00:20:02,600 --> 00:20:05,600 Speaker 7: a substantial amount of uncertainty going forward. 360 00:20:06,119 --> 00:20:09,080 Speaker 6: Michael. There are some market observers that as they try 361 00:20:09,080 --> 00:20:11,920 Speaker 6: to parse through President Electrump's some of his economic policies, 362 00:20:11,920 --> 00:20:16,040 Speaker 6: whether it be lower taxes, higher tariffs, that they might 363 00:20:16,080 --> 00:20:17,120 Speaker 6: be inflationary. 364 00:20:17,880 --> 00:20:23,200 Speaker 7: Do you share that concern, Well, it's sort of a hodgepodge, Paul. 365 00:20:23,440 --> 00:20:26,879 Speaker 7: So you know, a big jump in tariffs would be 366 00:20:27,040 --> 00:20:30,320 Speaker 7: equivalent to a relative price shock, so it would tend 367 00:20:30,359 --> 00:20:32,840 Speaker 7: to push up inflation on a one time basis and 368 00:20:33,400 --> 00:20:36,800 Speaker 7: retard real growth. That is not a recurring thing, so 369 00:20:36,840 --> 00:20:40,280 Speaker 7: it's not a monetary inflation. Typically, central banks would try 370 00:20:40,280 --> 00:20:43,440 Speaker 7: to look past that and beyond that, you know, could 371 00:20:43,480 --> 00:20:46,840 Speaker 7: actually lower the neutral interest rate that hurts the supply side. 372 00:20:47,080 --> 00:20:50,200 Speaker 7: So it's not just straightforward in terms of oh, this 373 00:20:50,280 --> 00:20:52,720 Speaker 7: might push inflation up, and so you know, the FED 374 00:20:52,760 --> 00:20:56,280 Speaker 7: should tighten monetary policy into that kind of a shock. 375 00:20:56,800 --> 00:20:59,800 Speaker 7: Some of the other proposals may boost the supply side, 376 00:21:00,119 --> 00:21:03,560 Speaker 7: talking about uh, you know, deregulation, if we're talking about 377 00:21:03,640 --> 00:21:07,320 Speaker 7: other tax changes or tax reforms that can boost efficiency. 378 00:21:08,000 --> 00:21:10,159 Speaker 7: So I think we're dealing with a bit of a 379 00:21:10,200 --> 00:21:14,639 Speaker 7: hodgepodge of potential supply side changes and or shocks, and 380 00:21:14,920 --> 00:21:16,760 Speaker 7: you know, we're going to have to have more information 381 00:21:16,880 --> 00:21:20,119 Speaker 7: and more details to figure out. You know, the over 382 00:21:20,520 --> 00:21:23,320 Speaker 7: riding trend is going to be whether you know it's 383 00:21:23,400 --> 00:21:25,399 Speaker 7: more of a headwind or a tailwind. 384 00:21:25,800 --> 00:21:29,080 Speaker 6: Michael, the FED feels like it's got inflation generally under control. 385 00:21:29,119 --> 00:21:30,960 Speaker 6: What's focusing on the labor market what's your view of 386 00:21:30,960 --> 00:21:32,280 Speaker 6: the US labor market these days? 387 00:21:33,720 --> 00:21:36,720 Speaker 7: Well, the US labor market has been hanging in there. Obviously, 388 00:21:36,800 --> 00:21:39,960 Speaker 7: we've got a very weak report for October, and the 389 00:21:40,040 --> 00:21:42,920 Speaker 7: pattern has been, you know, one in which we've had 390 00:21:42,960 --> 00:21:46,879 Speaker 7: a fairly gentle deceleration. But I think we're going to 391 00:21:46,920 --> 00:21:50,240 Speaker 7: need some more data to really come to a decisive conclusion. 392 00:21:50,400 --> 00:21:54,359 Speaker 7: As we moved into the summer, we were getting signals 393 00:21:54,400 --> 00:21:57,240 Speaker 7: from the unemployment rate that were very consistent with a 394 00:21:57,280 --> 00:22:01,200 Speaker 7: business cycle that had stalled or even started to enter recession, 395 00:22:01,840 --> 00:22:04,080 Speaker 7: and now the apoment rate is pulled back a few 396 00:22:04,160 --> 00:22:08,680 Speaker 7: tenths and essentially stabilized. So there's a big question mark 397 00:22:08,960 --> 00:22:09,359 Speaker 7: up there. 398 00:22:09,960 --> 00:22:13,520 Speaker 3: Michael, thank you so much and said go feed close Kloses. 399 00:22:13,560 --> 00:22:17,720 Speaker 3: You know klauses vegeance. Klaus is a dog. Michael Darta, 400 00:22:17,760 --> 00:22:20,080 Speaker 3: thank you so much for Roth Capital. 401 00:22:20,320 --> 00:22:24,600 Speaker 2: This is the Bloomberg Surveillance Podcast. Listen live each weekday 402 00:22:24,680 --> 00:22:27,880 Speaker 2: starting at seven am Eastern on applecar Play and Android 403 00:22:27,920 --> 00:22:30,760 Speaker 2: Auto with the Bloomberg Business app. You can also listen 404 00:22:30,880 --> 00:22:34,000 Speaker 2: live on Amazon Alexa from our flagship New York station. 405 00:22:34,359 --> 00:22:37,920 Speaker 2: Just say Alexa playing Bloomberg eleven thirty Paul, what time. 406 00:22:37,760 --> 00:22:41,919 Speaker 3: Are you speaking today at this Ai Men Deep sing 407 00:22:41,960 --> 00:22:46,240 Speaker 3: Aniragrana Extravagance, are you at four o'clock four thirty Tom? 408 00:22:46,280 --> 00:22:48,439 Speaker 6: I'm on the twelve forty three train to the Jersey 409 00:22:48,480 --> 00:22:51,200 Speaker 6: Shore every single day. I don't stay in New York 410 00:22:51,240 --> 00:22:52,199 Speaker 6: after twelve o'clock. 411 00:22:52,280 --> 00:22:52,760 Speaker 4: But you are too. 412 00:22:52,800 --> 00:22:54,960 Speaker 6: But for these two guys on Agrana, Man Deep sing 413 00:22:55,280 --> 00:22:56,879 Speaker 6: I said yes, because you have to. Because they're the 414 00:22:56,960 --> 00:22:59,680 Speaker 6: leaders of our technology research of Bloomberg Intelligence. They have 415 00:22:59,720 --> 00:23:02,800 Speaker 6: this nominal conference today some of the real leaders Tom 416 00:23:02,800 --> 00:23:05,480 Speaker 6: and his generative AI think which I'm trying to learn about, 417 00:23:05,480 --> 00:23:07,320 Speaker 6: I'm trying to get smart about. But they've got a 418 00:23:07,359 --> 00:23:08,879 Speaker 6: lot of the leaders in that industry coming to the 419 00:23:08,880 --> 00:23:09,880 Speaker 6: Bloomberg egequ today. 420 00:23:09,920 --> 00:23:12,200 Speaker 3: Yeah, Wayne Barrow getting it started global ahead of core 421 00:23:12,280 --> 00:23:14,960 Speaker 3: product like a real job at Bloomberg, unlike what Paulin 422 00:23:15,280 --> 00:23:17,359 Speaker 3: and I do. This is gonna be a great panel, 423 00:23:17,520 --> 00:23:20,000 Speaker 3: except at four thirty, everybody's going to turn to. 424 00:23:19,960 --> 00:23:23,520 Speaker 4: Their cell phones and ignore Wah or Matt. 425 00:23:23,320 --> 00:23:25,679 Speaker 3: Miller because they're gonna be looking at a video in 426 00:23:25,760 --> 00:23:29,040 Speaker 3: the same room together for the first time since Nixon 427 00:23:29,119 --> 00:23:32,280 Speaker 3: was president. Man Deep Singh and Anda Abrana, what do 428 00:23:32,359 --> 00:23:33,520 Speaker 3: you guys see each other? 429 00:23:33,680 --> 00:23:33,760 Speaker 8: Like? 430 00:23:33,880 --> 00:23:36,480 Speaker 4: What twice a year? Is it that rare? 431 00:23:36,800 --> 00:23:37,000 Speaker 3: No? 432 00:23:37,000 --> 00:23:39,240 Speaker 9: No, no, we see it far more than that. But 433 00:23:39,320 --> 00:23:41,000 Speaker 9: we talk at least three to four times a day. 434 00:23:41,119 --> 00:23:42,880 Speaker 4: Yeah, what are you talking about right now? 435 00:23:42,880 --> 00:23:46,440 Speaker 3: What is the conversation within the madness of technology right now? 436 00:23:46,520 --> 00:23:49,200 Speaker 8: Mind and Vidio print? I mean it has to be right. 437 00:23:49,359 --> 00:23:52,560 Speaker 8: It's reporting tonight and all eyes are on Nvidia and 438 00:23:52,960 --> 00:23:55,520 Speaker 8: that's what the themo for a conference is, you know, 439 00:23:55,680 --> 00:23:58,320 Speaker 8: just to connect the dots in terms of what is 440 00:23:58,359 --> 00:24:00,720 Speaker 8: the flow through when it comes to companies that are 441 00:24:00,720 --> 00:24:04,200 Speaker 8: buying these GPUs, what are the use cases that are emerging? 442 00:24:04,400 --> 00:24:07,400 Speaker 8: And is it really living up to the productivity promise. 443 00:24:07,920 --> 00:24:08,680 Speaker 8: That's the theme of. 444 00:24:08,640 --> 00:24:11,440 Speaker 9: The we know, we know that, yet it's too soon, 445 00:24:11,480 --> 00:24:13,639 Speaker 9: And that's what we've been talking about. Right now the 446 00:24:13,720 --> 00:24:17,360 Speaker 9: whole buzzes expand the infrastructure, expand the infrastructure. 447 00:24:17,600 --> 00:24:18,520 Speaker 4: But today we're going to. 448 00:24:18,480 --> 00:24:21,240 Speaker 9: Ask these executives tell us the use cases of these 449 00:24:21,240 --> 00:24:24,960 Speaker 9: productivity because then the audience can gauge whether some of 450 00:24:25,000 --> 00:24:27,639 Speaker 9: these use cases are worth the investment or not. Like, 451 00:24:27,680 --> 00:24:31,080 Speaker 9: does it save you ten minutes to write emails? That's 452 00:24:31,119 --> 00:24:32,719 Speaker 9: not going to drive the needle. It has to be 453 00:24:32,920 --> 00:24:35,639 Speaker 9: far more than that for people to invest on the 454 00:24:35,680 --> 00:24:38,120 Speaker 9: software side, on the application side. 455 00:24:38,320 --> 00:24:41,800 Speaker 6: Is there real concern from the clients the investors you 456 00:24:41,840 --> 00:24:44,560 Speaker 6: talk to that maybe this techn isstry, is going the 457 00:24:44,600 --> 00:24:47,160 Speaker 6: spending is too much too fast, or is it one 458 00:24:47,160 --> 00:24:49,400 Speaker 6: of Hey, you guys can spend whatever you want because 459 00:24:49,440 --> 00:24:50,720 Speaker 6: we think the opportunity is that big. 460 00:24:51,160 --> 00:24:53,760 Speaker 8: I mean, everyone agrees on the fact that this is 461 00:24:54,080 --> 00:24:58,560 Speaker 8: the biggest secular trend that we're seeing, you know, this decade, 462 00:24:58,680 --> 00:25:03,480 Speaker 8: and clearly it's got ramifications in terms of disrupting certain industries. 463 00:25:04,200 --> 00:25:08,080 Speaker 8: No one knows exactly when we'll hit the cafex digestion phase, 464 00:25:08,119 --> 00:25:08,640 Speaker 8: and that's. 465 00:25:08,440 --> 00:25:09,880 Speaker 4: What everyone is trying to figure out. 466 00:25:09,880 --> 00:25:12,080 Speaker 8: What we are doing in this summit is bringing together 467 00:25:12,200 --> 00:25:16,240 Speaker 8: both the large company perspective as well as the startup perspective, 468 00:25:16,280 --> 00:25:19,640 Speaker 8: and we've got some really interesting startups have the summer. 469 00:25:19,680 --> 00:25:22,400 Speaker 3: How do you guys, A dainty frances Covid business insider 470 00:25:22,480 --> 00:25:25,679 Speaker 3: making a splash four or five days ago, Microsoft's co 471 00:25:25,880 --> 00:25:31,520 Speaker 3: pilots underperformance is the latest red flag for investments in AI. 472 00:25:31,880 --> 00:25:35,080 Speaker 4: You guys are grizzled pros. I look at that tremble 473 00:25:35,400 --> 00:25:35,960 Speaker 4: in a rock. 474 00:25:36,119 --> 00:25:39,480 Speaker 3: What do you look at the legitimate worry about is 475 00:25:39,520 --> 00:25:40,480 Speaker 3: this gonna work out? 476 00:25:40,800 --> 00:25:42,880 Speaker 9: I think it's all a matter of how much it's 477 00:25:42,960 --> 00:25:44,920 Speaker 9: It's not so much that this is not going to work. 478 00:25:45,080 --> 00:25:47,000 Speaker 9: We are already at a phase that the top tech 479 00:25:47,000 --> 00:25:49,840 Speaker 9: companies are going to spend close to ninety billion extra 480 00:25:49,920 --> 00:25:52,480 Speaker 9: in a two year period compared to what they were before. 481 00:25:52,600 --> 00:25:54,639 Speaker 9: So now the question is what is the output of that, 482 00:25:54,800 --> 00:25:55,480 Speaker 9: What is the. 483 00:25:55,520 --> 00:25:58,240 Speaker 3: What is the okay, okay, right, guys, what is the 484 00:25:58,520 --> 00:26:01,879 Speaker 3: do you realize the easiest course these two guys took 485 00:26:01,920 --> 00:26:03,920 Speaker 3: in college was harder. 486 00:26:03,600 --> 00:26:04,960 Speaker 4: Than anything we do. Oh of course. 487 00:26:05,040 --> 00:26:05,240 Speaker 5: Yeah. 488 00:26:05,280 --> 00:26:09,119 Speaker 4: I mean, what's the what's the outcome of this cap bax? 489 00:26:09,480 --> 00:26:11,719 Speaker 9: But that's the whole issue. The software and the services 490 00:26:11,760 --> 00:26:14,320 Speaker 9: companies are saying. Oh, the companies are saying, is it's 491 00:26:14,359 --> 00:26:16,399 Speaker 9: going to take several years for this to show up 492 00:26:16,400 --> 00:26:18,760 Speaker 9: in the revenue stream, and all of us are trying 493 00:26:18,760 --> 00:26:21,480 Speaker 9: to figure out how true it is at this point, 494 00:26:21,520 --> 00:26:24,600 Speaker 9: because if you don't see that productivity benefit that we 495 00:26:24,640 --> 00:26:27,320 Speaker 9: are trying to unlock today in our conference, then you 496 00:26:27,359 --> 00:26:29,240 Speaker 9: will then the companies will say, well, we don't have 497 00:26:29,280 --> 00:26:31,840 Speaker 9: to spend as much, and that then puts a completely 498 00:26:31,880 --> 00:26:35,400 Speaker 9: different multiple or compression to all these stocks. And that's 499 00:26:35,440 --> 00:26:36,919 Speaker 9: what everybody wants to avoid. 500 00:26:37,480 --> 00:26:39,720 Speaker 6: So, Mandy, what are you going to be looking for 501 00:26:39,760 --> 00:26:42,680 Speaker 6: here from Nvidia? After the close here to you know, 502 00:26:42,800 --> 00:26:44,800 Speaker 6: Dan Ives was out from what Bus Security is saying. 503 00:26:44,920 --> 00:26:46,639 Speaker 6: He thinks that they're going to beat the current revenue 504 00:26:46,680 --> 00:26:48,280 Speaker 6: by a couple of billion, take the guidance up, buy 505 00:26:48,280 --> 00:26:50,560 Speaker 6: a couple of billion A do you think that could happen? 506 00:26:50,720 --> 00:26:52,119 Speaker 6: And is that enough for the stock? 507 00:26:52,440 --> 00:26:52,640 Speaker 4: Yeah? 508 00:26:52,680 --> 00:26:56,040 Speaker 8: I mean, clearly investors have become less sensitive to the 509 00:26:56,119 --> 00:26:59,919 Speaker 8: valuation that this company trades, that because they are so 510 00:27:00,200 --> 00:27:03,760 Speaker 8: good in terms of, you know, beating their numbers. And look, 511 00:27:03,960 --> 00:27:06,639 Speaker 8: when it comes to the future of generative AI, if 512 00:27:06,640 --> 00:27:08,879 Speaker 8: there's one thing that is for sure is and video 513 00:27:08,960 --> 00:27:11,880 Speaker 8: is at the heart and center of it. Whether they're 514 00:27:11,920 --> 00:27:14,919 Speaker 8: going to miss their numbers three quarters from now, that 515 00:27:15,000 --> 00:27:19,400 Speaker 8: will have, you know, I mean, an implication for their valuation. 516 00:27:19,560 --> 00:27:22,720 Speaker 8: But beyond that, I think they just have that lead 517 00:27:22,760 --> 00:27:25,680 Speaker 8: when it comes to chip makers that is unassailable. 518 00:27:25,800 --> 00:27:29,240 Speaker 4: Right now. Tell us about this word ecosystem. 519 00:27:29,280 --> 00:27:31,760 Speaker 3: I mean it's identified with the Apple and Services and 520 00:27:31,840 --> 00:27:35,119 Speaker 3: that is there a I'm speaking with Adobe today. Is 521 00:27:35,119 --> 00:27:38,840 Speaker 3: there an Adobe ecosystem? Is there a Microsoft ecosystem in ug? 522 00:27:39,040 --> 00:27:39,280 Speaker 4: Yeah? 523 00:27:39,320 --> 00:27:42,920 Speaker 9: So that is exactly the argument what these companies are saying. 524 00:27:42,960 --> 00:27:46,639 Speaker 9: Adobe is basically arguing that our ecosystem is that strong 525 00:27:46,720 --> 00:27:49,439 Speaker 9: that that no matter if there are open source tools 526 00:27:49,440 --> 00:27:51,240 Speaker 9: out there that can do something. 527 00:27:51,000 --> 00:27:53,879 Speaker 4: So old or whatever, Yeah. 528 00:27:53,040 --> 00:27:55,760 Speaker 9: That's not going to disrupt our business. And there is 529 00:27:55,760 --> 00:27:59,000 Speaker 9: a bold and bad argument against it. The same argument 530 00:27:59,040 --> 00:28:01,760 Speaker 9: you can make for other companies such as Salesforce or 531 00:28:01,800 --> 00:28:05,119 Speaker 9: Workday or Microsoft. Somebody is saying, well, I can just 532 00:28:05,240 --> 00:28:07,399 Speaker 9: use open AI and do my work. Why do I 533 00:28:07,440 --> 00:28:10,480 Speaker 9: need to you know, need this package software industry? And 534 00:28:10,760 --> 00:28:12,680 Speaker 9: that is the push and pull at this point. 535 00:28:13,440 --> 00:28:17,040 Speaker 6: So Man, Man Deep, what's the what's the next thing 536 00:28:17,160 --> 00:28:17,679 Speaker 6: for AI? 537 00:28:17,880 --> 00:28:18,240 Speaker 4: Do you think? 538 00:28:18,280 --> 00:28:19,760 Speaker 6: I mean, what are some of these startups that are gonna 539 00:28:19,760 --> 00:28:22,440 Speaker 6: come to your conference today? What's kind of the next 540 00:28:23,200 --> 00:28:23,879 Speaker 6: iteration of it? 541 00:28:23,920 --> 00:28:27,080 Speaker 8: I guess I'm sure they're gonna give us the message 542 00:28:27,160 --> 00:28:30,280 Speaker 8: they want some of this profit pool that Nvidia has. 543 00:28:30,480 --> 00:28:33,000 Speaker 8: And even if you get a small slice of you know, 544 00:28:33,080 --> 00:28:36,119 Speaker 8: this large addressable market that everyone believes is there in 545 00:28:36,200 --> 00:28:39,479 Speaker 8: data centers. These companies could you know, have a very 546 00:28:39,480 --> 00:28:40,960 Speaker 8: successful IPO down the line. 547 00:28:41,120 --> 00:28:43,680 Speaker 4: Man from an office upstairs is fancier than mine. 548 00:28:43,720 --> 00:28:47,720 Speaker 3: Email's in and says, where's the copyright protection for all 549 00:28:47,720 --> 00:28:52,520 Speaker 3: the intellectual capital? These animals like aniog Rana and Man 550 00:28:52,560 --> 00:28:54,520 Speaker 3: Deep singers stealing from us? 551 00:28:54,960 --> 00:28:56,080 Speaker 4: How's this gonna work out? 552 00:28:56,280 --> 00:28:58,080 Speaker 3: I mean, well, how they gonna pay the New York 553 00:28:58,120 --> 00:28:59,959 Speaker 3: Times or the Times of London? Man? 554 00:29:00,040 --> 00:29:03,640 Speaker 8: And yeah, we have a company called Runway that's in 555 00:29:03,720 --> 00:29:07,360 Speaker 8: that lineup today, which does you know video rendering based 556 00:29:07,360 --> 00:29:11,200 Speaker 8: on prompts and they are training their models based on 557 00:29:11,440 --> 00:29:14,960 Speaker 8: all the content, content that's out there when it comes 558 00:29:15,000 --> 00:29:17,440 Speaker 8: to you know, Hollywood and stuff like that. 559 00:29:17,600 --> 00:29:19,000 Speaker 4: And they're actually using it. 560 00:29:19,080 --> 00:29:22,320 Speaker 8: And and we'll discuss exactly what you just mentioned in 561 00:29:22,400 --> 00:29:24,960 Speaker 8: terms of what are their licensing, what is their own 562 00:29:24,960 --> 00:29:26,360 Speaker 8: IP versus. 563 00:29:25,960 --> 00:29:28,400 Speaker 4: Journalism get paid you know in our cars. 564 00:29:28,560 --> 00:29:31,800 Speaker 9: So Adobe is making that argument that come work with 565 00:29:31,880 --> 00:29:34,400 Speaker 9: us because we are training the models on the data 566 00:29:34,440 --> 00:29:37,200 Speaker 9: we own or the assets that are part of a company. 567 00:29:37,400 --> 00:29:39,880 Speaker 9: So you're not going to get sued because you're using 568 00:29:39,920 --> 00:29:42,280 Speaker 9: AI generated from that trained model. 569 00:29:42,560 --> 00:29:44,720 Speaker 4: And that is going to be a page. I cut 570 00:29:44,760 --> 00:29:47,040 Speaker 4: to the chase. So these two movies out, what are they? 571 00:29:47,080 --> 00:29:49,200 Speaker 4: Glad Wicked mandeems. 572 00:29:48,720 --> 00:29:51,440 Speaker 3: Can see both of them before we do. Okay, there's 573 00:29:51,480 --> 00:29:55,760 Speaker 3: two movies out. Variety does some stuff. AI steals the. 574 00:29:55,760 --> 00:29:58,520 Speaker 4: Content for Variety. How does Variety get paid? 575 00:29:59,320 --> 00:30:01,840 Speaker 8: Well in the this case, clearly you know they will 576 00:30:01,880 --> 00:30:04,760 Speaker 8: have to license some of the content where they're you know, 577 00:30:04,840 --> 00:30:07,880 Speaker 8: the same actors are being used or the same setup 578 00:30:07,920 --> 00:30:11,880 Speaker 8: as being used. But beyond that, AI doesn't really replicate 579 00:30:11,920 --> 00:30:14,400 Speaker 8: your content. And that's what I think these models are 580 00:30:14,440 --> 00:30:18,080 Speaker 8: showing is you know, the scene that you are generating 581 00:30:18,240 --> 00:30:21,160 Speaker 8: isn't an exact replica of what has been used in 582 00:30:21,200 --> 00:30:21,640 Speaker 8: the past. 583 00:30:21,920 --> 00:30:22,840 Speaker 4: Do you buy this pot? 584 00:30:23,720 --> 00:30:26,239 Speaker 6: I don't know, but I'm gonna hopefully we're gonna get 585 00:30:26,280 --> 00:30:28,960 Speaker 6: smarter here today. My my panel is raped for cocktails. 586 00:30:29,160 --> 00:30:30,040 Speaker 6: That's a dangerous place. 587 00:30:30,040 --> 00:30:34,800 Speaker 4: That's place to be. My word, Yes, you're brave. My 588 00:30:34,960 --> 00:30:36,800 Speaker 4: people just know to say no to that. 589 00:30:37,480 --> 00:30:38,040 Speaker 6: Exactly. 590 00:30:38,080 --> 00:30:39,480 Speaker 4: Are you kidding your nose before? 591 00:30:41,280 --> 00:30:44,200 Speaker 3: Okay, So I'm after lunch where they're already asleep when 592 00:30:44,240 --> 00:30:44,680 Speaker 3: I walk in. 593 00:30:44,880 --> 00:30:47,080 Speaker 4: Can you get tickets to the figure as it's sold out? 594 00:30:47,640 --> 00:30:50,800 Speaker 9: It's at this point it's virtual only for anybody trying 595 00:30:50,840 --> 00:30:53,400 Speaker 9: to join in because we don't have capacity now. 596 00:30:53,600 --> 00:30:54,880 Speaker 4: But it will be on the terminal. 597 00:30:55,120 --> 00:30:58,600 Speaker 8: It will be streamed live on the terminal live. 598 00:30:58,680 --> 00:31:02,240 Speaker 6: Got It's like Taylor Swift. 599 00:31:02,080 --> 00:31:04,000 Speaker 4: Yeah, exactly. 600 00:31:05,880 --> 00:31:08,440 Speaker 3: So let's do this more often, you know, I mean, 601 00:31:08,480 --> 00:31:10,600 Speaker 3: I know you guys are in speaking terms, but you know, 602 00:31:10,720 --> 00:31:12,240 Speaker 3: let's do it more often. 603 00:31:18,120 --> 00:31:22,400 Speaker 2: This is the Bloomberg Surveillance Podcast. Listen live each weekday 604 00:31:22,480 --> 00:31:25,239 Speaker 2: starting at seven am Eastern on Apple car Play and 605 00:31:25,240 --> 00:31:28,240 Speaker 2: Android Auto with the Bloomberg Business app. You can also 606 00:31:28,360 --> 00:31:31,880 Speaker 2: watch us live every weekday on YouTube and always on 607 00:31:31,920 --> 00:31:32,960 Speaker 2: the Bloomberg. 608 00:31:32,560 --> 00:31:34,800 Speaker 3: Term Tell me look at the front pages. It is 609 00:31:34,960 --> 00:31:36,840 Speaker 3: Lisa Matteo, our Lisa. 610 00:31:36,840 --> 00:31:37,960 Speaker 4: Please, Okay, I. 611 00:31:38,000 --> 00:31:40,840 Speaker 1: Got a lot for Paul Today's okay, hear that on her? 612 00:31:42,280 --> 00:31:44,520 Speaker 1: What's in the New York Post. Just when you thought 613 00:31:44,560 --> 00:31:46,840 Speaker 1: you haven't heard of Sherry Redstone her name in a while, 614 00:31:46,880 --> 00:31:49,360 Speaker 1: here it comes. They said that she paid off nearly 615 00:31:49,360 --> 00:31:51,680 Speaker 1: two hundred million dollars in debt from cash that was 616 00:31:51,800 --> 00:31:55,160 Speaker 1: mostly fronted by Larry Ellison. Now this was a loan 617 00:31:55,200 --> 00:31:58,280 Speaker 1: from back in Wait twenty eighteen. She made the full payment. 618 00:31:58,640 --> 00:32:00,920 Speaker 1: The bounce wasn't doing until May twenty five, so she 619 00:32:00,960 --> 00:32:02,760 Speaker 1: made the payment. But it was one hundred and eighty 620 00:32:02,760 --> 00:32:05,640 Speaker 1: six million dollars last month. It was owed to creditors 621 00:32:05,680 --> 00:32:06,920 Speaker 1: of National Amusements. 622 00:32:07,200 --> 00:32:08,719 Speaker 6: But this is just the latest thing. 623 00:32:08,720 --> 00:32:10,960 Speaker 1: So they're saying Larry Elison forked up a big chunk of. 624 00:32:10,880 --> 00:32:13,120 Speaker 6: The cash for I think Sherry Redstone and her family 625 00:32:13,120 --> 00:32:15,520 Speaker 6: made the decision two or three years ago. This business, 626 00:32:15,600 --> 00:32:19,480 Speaker 6: the Viacom powamount business is not good long term. Let's 627 00:32:19,520 --> 00:32:22,920 Speaker 6: just get out sell today. She got the deal done 628 00:32:23,120 --> 00:32:25,840 Speaker 6: to sky Dance, and she had a short term liquidity 629 00:32:25,880 --> 00:32:28,880 Speaker 6: problem here and Larry Ellison, who's backing his son at 630 00:32:28,920 --> 00:32:31,240 Speaker 6: sky Dance, says, I'll take care of that problem for you. 631 00:32:31,280 --> 00:32:34,360 Speaker 6: Here's the cash, and so that's it. She's just and 632 00:32:34,440 --> 00:32:36,520 Speaker 6: she'll just ride off to the sunset and take her 633 00:32:36,560 --> 00:32:38,680 Speaker 6: three hundred and fifty million dollars and do what you. 634 00:32:38,960 --> 00:32:43,920 Speaker 3: So the zeitgeist is they bolt off from Comcast, MSNBCCNBC 635 00:32:44,000 --> 00:32:47,360 Speaker 3: and the rest Oxygen I love E I watch twenty 636 00:32:47,400 --> 00:32:50,680 Speaker 3: four saying you okay, but they can't merge with Sherry 637 00:32:50,720 --> 00:32:51,920 Speaker 3: Redstone's CBS. 638 00:32:52,040 --> 00:32:52,880 Speaker 4: There's no way. 639 00:32:52,840 --> 00:32:57,280 Speaker 6: Washington, the cable actually the cable networks could. The broadcast 640 00:32:57,320 --> 00:33:00,200 Speaker 6: networks could not, So NBC, CBS because there's only for 641 00:33:00,360 --> 00:33:02,560 Speaker 6: broadcast networks that they won't let for of them merge. 642 00:33:02,560 --> 00:33:04,320 Speaker 6: But you can take some of the cable networks from 643 00:33:04,600 --> 00:33:07,680 Speaker 6: like MSNBC USA, and you can merge that into into 644 00:33:07,720 --> 00:33:11,120 Speaker 6: the new paramount whatever it is, because those are just 645 00:33:11,160 --> 00:33:14,480 Speaker 6: smaller networks. Okay, And that's story number two. 646 00:33:14,680 --> 00:33:18,040 Speaker 1: Okay, I didn't even realize that. So, yeah, there's MSNBC, 647 00:33:18,200 --> 00:33:19,560 Speaker 1: CNBC USA. 648 00:33:20,160 --> 00:33:20,920 Speaker 6: But not Bravo. 649 00:33:21,080 --> 00:33:23,640 Speaker 1: But not Bravo. You got to keep the housewives. 650 00:33:23,920 --> 00:33:27,600 Speaker 4: Explain why the Housewives? It's you? Is it because it 651 00:33:27,640 --> 00:33:28,280 Speaker 4: makes money? 652 00:33:28,360 --> 00:33:31,440 Speaker 1: It makes my peacock streaming TV also, that's not part 653 00:33:31,440 --> 00:33:33,880 Speaker 1: of it, so that'll stay with the parent company. 654 00:33:34,240 --> 00:33:36,640 Speaker 6: So I'm not sure as a as a media investor, 655 00:33:36,960 --> 00:33:39,520 Speaker 6: why would I buy this new code Because I'm getting 656 00:33:39,640 --> 00:33:43,400 Speaker 6: a lot of second tier cable networks that are facing 657 00:33:43,480 --> 00:33:46,000 Speaker 6: the you know, the cord cutting challenges that all of 658 00:33:46,720 --> 00:33:51,280 Speaker 6: traditional linear TV is facing. Where's the growth, what's the story? 659 00:33:51,320 --> 00:33:53,920 Speaker 6: So this is a bad bank good banks situation. I 660 00:33:53,920 --> 00:33:56,120 Speaker 6: think Comcast is simply saying, we've got a lot of 661 00:33:56,120 --> 00:33:58,520 Speaker 6: good assets of Comcasts. Let's keep them in Comcasts. The 662 00:33:58,560 --> 00:34:00,800 Speaker 6: stuff that is not so good will it off into it. 663 00:34:00,840 --> 00:34:04,640 Speaker 3: But Paul, they get thirty eight point eight debt at Comcast, 664 00:34:05,080 --> 00:34:06,880 Speaker 3: is this where they dump all the debt? 665 00:34:07,080 --> 00:34:08,160 Speaker 4: No I the spin off? 666 00:34:08,239 --> 00:34:10,440 Speaker 6: Now the third debt is actually fine. They actually have 667 00:34:10,480 --> 00:34:12,400 Speaker 6: a very good balance eet. Their net debt to EBITDA 668 00:34:12,560 --> 00:34:14,920 Speaker 6: is fine. That they have a great balance sheet. Actually 669 00:34:15,000 --> 00:34:18,160 Speaker 6: it's a strategic asset of the company. But they're just 670 00:34:18,280 --> 00:34:21,120 Speaker 6: simply saying, we think our stock is weighed down by 671 00:34:21,160 --> 00:34:23,839 Speaker 6: these cable networks, and so let's spin them off into 672 00:34:23,840 --> 00:34:26,120 Speaker 6: a separate company, get it off of our balance sheet. 673 00:34:26,239 --> 00:34:29,240 Speaker 6: So maybe our then existing Comcast can trade higher. 674 00:34:29,640 --> 00:34:32,640 Speaker 1: The journal thing can produce about seven billion in annual revenue. 675 00:34:32,640 --> 00:34:34,120 Speaker 1: Do you think that about you? 676 00:34:34,520 --> 00:34:36,840 Speaker 6: It is, but it is that revenue growing, and I 677 00:34:36,880 --> 00:34:37,799 Speaker 6: would argue it's not. 678 00:34:38,360 --> 00:34:40,480 Speaker 4: Or very low, it's very low synergy. 679 00:34:41,600 --> 00:34:43,640 Speaker 6: This is no. I think it's simply a good bank 680 00:34:43,680 --> 00:34:45,200 Speaker 6: bad bank thing. I just want to get some of 681 00:34:45,200 --> 00:34:47,520 Speaker 6: these assets that I know my investors do not like 682 00:34:47,840 --> 00:34:49,759 Speaker 6: and get them out of my company and put them 683 00:34:49,760 --> 00:34:51,160 Speaker 6: on as a standalone company. 684 00:34:51,239 --> 00:34:54,520 Speaker 1: So next, okay, we're moving on to Elon musk X. 685 00:34:54,560 --> 00:34:58,200 Speaker 1: Apparently it needs to boost advertising revenue. So it's turning 686 00:34:58,239 --> 00:35:00,400 Speaker 1: this is from Business Insider to an add tech company 687 00:35:00,400 --> 00:35:04,359 Speaker 1: called Pubmatic. They're joining Google in moby. They're these third 688 00:35:04,400 --> 00:35:06,799 Speaker 1: party vendors that allow them to sell their ads. But 689 00:35:06,840 --> 00:35:09,080 Speaker 1: the thing is it's different for the company. Right, So 690 00:35:09,160 --> 00:35:12,160 Speaker 1: before Musk had to take over Twitter broker deals with 691 00:35:12,280 --> 00:35:15,399 Speaker 1: advertisers directly. So now you see this shift as they're 692 00:35:15,400 --> 00:35:18,120 Speaker 1: turning to these like third party vendors. 693 00:35:17,880 --> 00:35:19,040 Speaker 6: To help sell us advertising. 694 00:35:19,120 --> 00:35:20,600 Speaker 1: So it really needs to make some money. 695 00:35:21,320 --> 00:35:24,600 Speaker 3: When Paul, do you know when like they when he 696 00:35:24,680 --> 00:35:26,880 Speaker 3: affected this transaction. 697 00:35:26,560 --> 00:35:29,600 Speaker 4: Yeah, there was lots of debt. 698 00:35:29,880 --> 00:35:33,360 Speaker 3: Wall Street, Morgan Stanley I think was involved transactions. 699 00:35:33,440 --> 00:35:36,800 Speaker 6: Right, This is all on his personal personal balance sheet. 700 00:35:36,920 --> 00:35:40,080 Speaker 6: And so now you know, this is just an opportunity 701 00:35:40,080 --> 00:35:41,160 Speaker 6: for them to try to say, hey, I got to 702 00:35:41,200 --> 00:35:43,520 Speaker 6: generate some revenue because I'm not. My advertising revenue is 703 00:35:43,560 --> 00:35:45,800 Speaker 6: just not grown. We don't know it because it's not public, 704 00:35:45,840 --> 00:35:49,000 Speaker 6: so we don't know what the revenue. But I suspect 705 00:35:49,760 --> 00:35:51,439 Speaker 6: that there are a lot of advertisers have backed away 706 00:35:51,440 --> 00:35:53,680 Speaker 6: from X for a variety of reasons, and this is 707 00:35:53,719 --> 00:35:54,439 Speaker 6: just away from the track. 708 00:35:54,480 --> 00:35:56,799 Speaker 3: I'm looking at the pubmatic website. I can't be on 709 00:35:56,840 --> 00:35:58,400 Speaker 3: that website. It's too cool for school. 710 00:35:58,760 --> 00:36:02,440 Speaker 1: The next one, quick one, okay, quick, Barbenheimer, you remember 711 00:36:02,440 --> 00:36:05,480 Speaker 1: the success it did well this weekend, we're going Clicked, 712 00:36:06,719 --> 00:36:10,040 Speaker 1: Gladiator and Wicked. I guess wikiator. 713 00:36:09,520 --> 00:36:11,239 Speaker 6: Doesn't quite have ring to it. 714 00:36:11,640 --> 00:36:12,239 Speaker 4: What do you think? 715 00:36:12,360 --> 00:36:14,879 Speaker 1: I think it's gonna be phenomenal because it's the same thing. 716 00:36:14,920 --> 00:36:18,160 Speaker 1: You have two completely different audiences. You know, they had 717 00:36:18,160 --> 00:36:20,400 Speaker 1: the Barbie and the Oppenheimer. Now you have the Wicked 718 00:36:20,800 --> 00:36:21,080 Speaker 1: and the. 719 00:36:21,040 --> 00:36:22,760 Speaker 4: Glad Hollywood cheerleading. 720 00:36:22,840 --> 00:36:28,480 Speaker 3: Get the Telegraph in London crushed Wicked just rushed it. 721 00:36:28,640 --> 00:36:30,160 Speaker 4: I don't know. I don't have an opinion. 722 00:36:30,280 --> 00:36:32,520 Speaker 1: It has the big stars already in a Grande like 723 00:36:32,560 --> 00:36:35,880 Speaker 1: it has. It has that pull to it Gladiator itself. 724 00:36:35,920 --> 00:36:40,359 Speaker 4: Just I mean, I readbot, Who's who's the gladiator this time? 725 00:36:40,440 --> 00:36:44,080 Speaker 1: My husband is a gladiator's playing Russell Crow. 726 00:36:44,440 --> 00:36:45,440 Speaker 4: I don't know Russell. 727 00:36:45,840 --> 00:36:48,160 Speaker 1: Oh there's that's the new guy who's playing that the younger, 728 00:36:48,200 --> 00:36:52,319 Speaker 1: the son of the ship young this whole other story. Yeah, 729 00:36:52,360 --> 00:36:57,520 Speaker 1: so's I already bought because it's it's been so long 730 00:36:57,600 --> 00:36:58,880 Speaker 1: since the Gladiator came. 731 00:36:58,680 --> 00:37:04,279 Speaker 6: Out, you know, Paul, Paul, Yes, all right, you're on 732 00:37:04,360 --> 00:37:04,880 Speaker 6: top of the time. 733 00:37:06,000 --> 00:37:09,240 Speaker 4: Already saved me, saved people that I know, this stuff 734 00:37:09,280 --> 00:37:11,200 Speaker 4: always in my ear. Hey, stupid, you. 735 00:37:11,160 --> 00:37:14,000 Speaker 6: Know it works well, hopefully that'll be a big box 736 00:37:14,000 --> 00:37:17,440 Speaker 6: office hoping so the estimates, Okay, they plan that it'll 737 00:37:17,680 --> 00:37:20,720 Speaker 6: bring in Wicked at least one hundred million opening weekend. 738 00:37:20,719 --> 00:37:22,960 Speaker 1: They're hoping Gladiated too could bring in eighty million. And 739 00:37:22,960 --> 00:37:26,359 Speaker 1: that's kind of similar to to how Barbie and Oppenheimer open. 740 00:37:26,400 --> 00:37:28,600 Speaker 4: Okaye, did we give you enough time today? 741 00:37:28,800 --> 00:37:29,240 Speaker 9: We did? 742 00:37:29,400 --> 00:37:33,200 Speaker 4: Thank you very much, Lisa Mateo. Thank you for the newspapers. 743 00:37:33,600 --> 00:37:38,040 Speaker 2: This is the Bloomberg Surveillance podcast, available on Apple, Spotify, 744 00:37:38,200 --> 00:37:42,320 Speaker 2: and anywhere else you get your podcasts. Listen live each weekday, 745 00:37:42,400 --> 00:37:45,480 Speaker 2: seven to ten am Eastern on Bloomberg dot Com, the 746 00:37:45,600 --> 00:37:49,360 Speaker 2: iHeartRadio app tune In, and the Bloomberg Business app. You 747 00:37:49,440 --> 00:37:52,719 Speaker 2: can also watch us live every weekday on YouTube and 748 00:37:52,880 --> 00:37:54,440 Speaker 2: always on the Bloomberg terminal