1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:22,000 Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business app. 4 00:00:22,360 --> 00:00:25,680 Speaker 1: Listen on demand wherever you get your podcasts, or watch 5 00:00:25,760 --> 00:00:27,040 Speaker 1: us live on YouTube. 6 00:00:27,080 --> 00:00:31,600 Speaker 2: We are advantaged with Neil Dot of Renaissance Macro. Neil, 7 00:00:31,640 --> 00:00:34,640 Speaker 2: you were my economist of the Year with resilient optimism 8 00:00:34,680 --> 00:00:38,279 Speaker 2: in the depths of COVID. You've turned more cautious When 9 00:00:38,320 --> 00:00:41,120 Speaker 2: I see a stock market go to record highs, how 10 00:00:41,120 --> 00:00:42,200 Speaker 2: can I be cautious? 11 00:00:43,600 --> 00:00:45,960 Speaker 3: No, it's a great point. I mean, and clearly, Tom, 12 00:00:46,000 --> 00:00:48,479 Speaker 3: the pain trade is stocks go higher. I mean, you 13 00:00:48,520 --> 00:00:53,400 Speaker 3: have the market at basically new highs, and you know 14 00:00:54,640 --> 00:00:57,960 Speaker 3: it looks like bear's out number of bulls, so that's, 15 00:00:58,040 --> 00:01:01,280 Speaker 3: you know, I mean, pretty good sign the pain trade 16 00:01:01,320 --> 00:01:01,760 Speaker 3: is higher. 17 00:01:02,080 --> 00:01:02,240 Speaker 2: You know. 18 00:01:02,360 --> 00:01:03,160 Speaker 4: Look, I mean. 19 00:01:04,959 --> 00:01:06,720 Speaker 3: You know the I think you know, the stock market 20 00:01:06,760 --> 00:01:09,679 Speaker 3: is a very useful discounting mechanism, so it's always important 21 00:01:09,680 --> 00:01:11,800 Speaker 3: to keep an eye on it, especially when you have 22 00:01:11,840 --> 00:01:14,480 Speaker 3: a cautious economic view like I do. But you know, 23 00:01:14,520 --> 00:01:16,440 Speaker 3: it's also worth pointing out that it's not a perfect 24 00:01:16,480 --> 00:01:19,760 Speaker 3: discounting mechanism. Right, So when I think about why stocks 25 00:01:19,760 --> 00:01:22,880 Speaker 3: have gone up, you know, it's earnings rates and risk 26 00:01:22,920 --> 00:01:28,560 Speaker 3: premium and earnings estimates keep going higher. Has been coming down. 27 00:01:28,880 --> 00:01:31,399 Speaker 3: You know, you're getting soothing words on trade and interest 28 00:01:31,480 --> 00:01:35,360 Speaker 3: rates have been coming down as the market's bet. You know, 29 00:01:35,400 --> 00:01:37,479 Speaker 3: I guess more in the direction of our FED view. 30 00:01:37,640 --> 00:01:41,240 Speaker 3: So that's what's powering the stock market higher, which kind 31 00:01:41,280 --> 00:01:44,760 Speaker 3: of raises the stakes for what earnings looks like going forward. 32 00:01:44,800 --> 00:01:48,520 Speaker 3: I mean, obviously, economic data generally over the last number 33 00:01:48,520 --> 00:01:52,560 Speaker 3: of weeks on net has been negative, and you know, 34 00:01:52,600 --> 00:01:57,920 Speaker 3: you'd expect, you know, some of that to bleed into. 35 00:01:55,880 --> 00:02:00,280 Speaker 2: The way, doesn't David Dona just reised Jeff de Graf's research. Yeah, 36 00:02:00,280 --> 00:02:02,800 Speaker 2: he doesn't know anything about this stock, right, he just 37 00:02:02,840 --> 00:02:03,760 Speaker 2: listens to the graph. 38 00:02:03,880 --> 00:02:05,440 Speaker 5: David gir I love that you call your it was 39 00:02:05,480 --> 00:02:07,040 Speaker 5: your formerly your economists of the year. Do you get 40 00:02:07,040 --> 00:02:09,760 Speaker 5: a trophy for that? Is there like a no, he 41 00:02:09,800 --> 00:02:11,720 Speaker 5: gets a beverage of beverage of his choice at the 42 00:02:12,000 --> 00:02:14,000 Speaker 5: the time of his choosing. You let me stick with 43 00:02:14,040 --> 00:02:15,760 Speaker 5: the soothingness that you talked about in terms of the 44 00:02:15,800 --> 00:02:17,440 Speaker 5: rhetoric that we've heard from the FED on and what 45 00:02:17,440 --> 00:02:20,560 Speaker 5: we've heard from policymakers on tariffs as well. How much 46 00:02:20,560 --> 00:02:22,320 Speaker 5: of a disconnect is there as you see it, between 47 00:02:22,360 --> 00:02:24,320 Speaker 5: what we're hearing from from them and as you see 48 00:02:24,320 --> 00:02:25,680 Speaker 5: the state of the economy today. 49 00:02:27,560 --> 00:02:29,760 Speaker 3: Well, I mean, my big gripe is really the state 50 00:02:29,840 --> 00:02:31,920 Speaker 3: of the economy as it is not so much what 51 00:02:32,040 --> 00:02:35,080 Speaker 3: tariffs are doing to the economy, because, in my opinion, 52 00:02:35,200 --> 00:02:38,359 Speaker 3: I mean, before tariffs even happened, I mean, we were 53 00:02:38,400 --> 00:02:41,720 Speaker 3: talking about a frozen housing market, a frozen labor market, 54 00:02:42,320 --> 00:02:46,400 Speaker 3: a capex cycle that was really just about tech not 55 00:02:46,560 --> 00:02:51,079 Speaker 3: much else. And uh, you know, I mean, tariffs make 56 00:02:51,320 --> 00:02:54,760 Speaker 3: that bad situation worse. But you know, look, I mean, David, 57 00:02:54,760 --> 00:02:58,360 Speaker 3: I mean for the US economy, what I'm really focused 58 00:02:58,400 --> 00:03:02,639 Speaker 3: on right now is the ongoing deterioration in labor markets. 59 00:03:03,120 --> 00:03:06,640 Speaker 3: We have continuing claims rising to fresh highs week after 60 00:03:06,680 --> 00:03:09,359 Speaker 3: a week. That means that unemployment is probably going up, 61 00:03:10,440 --> 00:03:16,200 Speaker 3: and housing continues to get worse, particularly new family housing. 62 00:03:16,400 --> 00:03:19,320 Speaker 3: Right so, that to me is an important thing to consider. 63 00:03:19,400 --> 00:03:21,760 Speaker 2: I got a year over your PCE coming up here 64 00:03:21,760 --> 00:03:24,920 Speaker 2: in one minute quickly Neil dot A thirty seconds two 65 00:03:24,960 --> 00:03:28,200 Speaker 2: point one percent to a surveyed two point three percent. 66 00:03:28,639 --> 00:03:31,120 Speaker 2: Is that on the edge of stagflation inflation? 67 00:03:32,880 --> 00:03:35,200 Speaker 3: No, I mean this would be the third consecutive month 68 00:03:35,600 --> 00:03:40,120 Speaker 3: where core inflation is running point one, I mean stagflation. 69 00:03:41,240 --> 00:03:43,640 Speaker 3: We have more stag than we have flation right now. 70 00:03:43,680 --> 00:03:49,600 Speaker 3: So yeah, deflation, theflation part is very much in the 71 00:03:49,680 --> 00:03:52,160 Speaker 3: range of a forecast. And I think it's important for 72 00:03:52,200 --> 00:03:56,280 Speaker 3: people to explain why the tariff induced inflation likely is 73 00:03:56,320 --> 00:03:57,720 Speaker 3: anything more than a one off. 74 00:03:57,760 --> 00:04:03,440 Speaker 2: Nil douta with Renaissance macro nailing the stag of stagflation. 75 00:04:04,040 --> 00:04:07,720 Speaker 2: I see real personal spending with a negative statistic Neil, 76 00:04:07,760 --> 00:04:10,600 Speaker 2: what does that signal for future GDP? 77 00:04:12,480 --> 00:04:14,560 Speaker 3: Well, it's going to mean that you're going to see 78 00:04:14,600 --> 00:04:19,120 Speaker 3: some downward revisions to estimates of GDP. And remember that 79 00:04:19,160 --> 00:04:22,560 Speaker 3: the estimates weren't that strong to begin with. You know, 80 00:04:22,560 --> 00:04:25,760 Speaker 3: I'm a little bit surprised that the consensus missed the 81 00:04:25,800 --> 00:04:29,080 Speaker 3: real consumption number because we did see unit auto sales 82 00:04:29,120 --> 00:04:34,640 Speaker 3: come down quite meaningfully over the month, and so you know, look, 83 00:04:34,680 --> 00:04:37,479 Speaker 3: I mean, if you look at this data, what it 84 00:04:37,560 --> 00:04:42,080 Speaker 3: shows is real consumption came in a bit weaker than expected, 85 00:04:42,080 --> 00:04:44,800 Speaker 3: and core inflation came in a bit firmer than expected. 86 00:04:44,920 --> 00:04:47,480 Speaker 3: So without having you know, dialed into all the details. 87 00:04:47,760 --> 00:04:51,240 Speaker 3: It just tells you that consumers are resistant to higher prices, right, 88 00:04:51,360 --> 00:04:56,600 Speaker 3: and that's because ultimately consumer you know, inflation, in my opinion, 89 00:04:56,640 --> 00:04:59,960 Speaker 3: really boils down to the household budget constraint. You know 90 00:05:00,160 --> 00:05:05,320 Speaker 3: right now, you know if you look at real income 91 00:05:06,760 --> 00:05:10,400 Speaker 3: NETA transfers, that's up only one and a half percent 92 00:05:10,480 --> 00:05:14,839 Speaker 3: against last year, and you know that kind of sets 93 00:05:14,880 --> 00:05:18,200 Speaker 3: the table for what what consumer spending will more or 94 00:05:18,320 --> 00:05:21,520 Speaker 3: less do. And you know you're talking about, I think, 95 00:05:21,680 --> 00:05:23,640 Speaker 3: at a minimum of a low potential growth. 96 00:05:23,480 --> 00:05:25,840 Speaker 2: Environment, David Gerr. I see the line item in PC. 97 00:05:26,120 --> 00:05:28,599 Speaker 2: There's like two hundred line items and there's one for 98 00:05:28,720 --> 00:05:32,400 Speaker 2: summer camp. Would you care to comment on that. 99 00:05:32,520 --> 00:05:34,440 Speaker 5: I'll strained all my resources now that I have two 100 00:05:34,440 --> 00:05:36,960 Speaker 5: of them going. But no, that's that's an extreme one. 101 00:05:37,480 --> 00:05:38,960 Speaker 5: Let me go back to the housing market, which you 102 00:05:38,960 --> 00:05:40,360 Speaker 5: mentioned just a moment ago as one of the two 103 00:05:40,400 --> 00:05:42,279 Speaker 5: things that you're you're kind of focusing on and suggesting 104 00:05:42,360 --> 00:05:45,640 Speaker 5: counseling us to focus on here as well. How big 105 00:05:45,680 --> 00:05:47,400 Speaker 5: a drag is that likely to be on the economy. 106 00:05:47,400 --> 00:05:49,279 Speaker 5: More broadly, you're looking here at sort of new home 107 00:05:49,440 --> 00:05:51,640 Speaker 5: starts and projecting a lot of nuance into the way 108 00:05:51,640 --> 00:05:52,720 Speaker 5: that we should be thinking about them. 109 00:05:53,440 --> 00:05:55,159 Speaker 3: Well, sure, I mean, remember this is on the first 110 00:05:55,160 --> 00:05:58,280 Speaker 3: time during this cycle where we've seen residential investment go down. 111 00:05:58,600 --> 00:06:00,600 Speaker 3: The first time was back in twenty two when the 112 00:06:00,640 --> 00:06:03,960 Speaker 3: FED was gearing up massive you know, rate hiking campaigns, 113 00:06:03,960 --> 00:06:07,400 Speaker 3: so they basically crushed home sales. But what was important 114 00:06:07,440 --> 00:06:10,320 Speaker 3: about that period was you were still in a situation 115 00:06:10,520 --> 00:06:17,960 Speaker 3: where you know, home units under construction were rising. Right now, 116 00:06:18,000 --> 00:06:23,359 Speaker 3: you're in a situation where housing starts are running, you know, 117 00:06:23,440 --> 00:06:28,599 Speaker 3: below completions, which basically means that units under construction will 118 00:06:28,600 --> 00:06:32,520 Speaker 3: continue to come down. If you look also at the 119 00:06:32,600 --> 00:06:36,479 Speaker 3: slack in the new housing market, you have you know, 120 00:06:36,600 --> 00:06:40,919 Speaker 3: essentially cycle highs and unsold new housing inventory. So that 121 00:06:41,000 --> 00:06:44,120 Speaker 3: kind of begs the question as to why builders are 122 00:06:44,120 --> 00:06:45,880 Speaker 3: going to break ground on new homes to start with, 123 00:06:46,040 --> 00:06:48,000 Speaker 3: because it makes much more sense at this point for 124 00:06:48,080 --> 00:06:50,240 Speaker 3: them to kind of sell out of the homes they've 125 00:06:50,279 --> 00:06:52,640 Speaker 3: already made as opposed to breaking ground on new homes. 126 00:06:52,720 --> 00:06:57,200 Speaker 3: So that means units under construction will keep falling, and that, 127 00:06:57,360 --> 00:06:59,080 Speaker 3: you know, sort of begs the question as to what's 128 00:06:59,080 --> 00:07:02,400 Speaker 3: going to happen with construcuction employment, which has been you know, 129 00:07:02,560 --> 00:07:07,880 Speaker 3: relatively uh, you know, hanging in there, you know, over 130 00:07:07,880 --> 00:07:10,640 Speaker 3: the last number of years or so. And then you 131 00:07:10,680 --> 00:07:14,280 Speaker 3: talk about, you know, home prices are are are declining, uh, 132 00:07:14,440 --> 00:07:19,280 Speaker 3: you know nationally, particularly the south and the West, which 133 00:07:19,320 --> 00:07:21,880 Speaker 3: is where the builders have been making the home. So 134 00:07:22,920 --> 00:07:25,560 Speaker 3: I do think that construction activity and residential is going 135 00:07:25,600 --> 00:07:27,960 Speaker 3: to be coming down, and I think that's going to 136 00:07:28,000 --> 00:07:31,720 Speaker 3: have effects on unemployment over the over the coming months. 137 00:07:31,800 --> 00:07:33,520 Speaker 4: Neil dudda with us is the renaissance macro. 138 00:07:33,600 --> 00:07:37,160 Speaker 2: We continue commercial free for through a good part of 139 00:07:37,240 --> 00:07:40,000 Speaker 2: this hour, I should say, lots of economic data coming 140 00:07:40,080 --> 00:07:40,560 Speaker 2: up next week. 141 00:07:40,640 --> 00:07:44,440 Speaker 4: David Girl, one more question for mister Dutta. Neili. 142 00:07:44,520 --> 00:07:47,280 Speaker 5: I listened to Mary Daily yesterday on surveillances. I know 143 00:07:47,440 --> 00:07:49,160 Speaker 5: you likely did as well, and she talked about her 144 00:07:49,200 --> 00:07:51,720 Speaker 5: modal outlook has been for some time we would begin 145 00:07:51,800 --> 00:07:54,000 Speaker 5: to see be able to adjust the rates in the fall. 146 00:07:54,240 --> 00:07:58,120 Speaker 5: She hasn't really changed that view any I'm curious, sir, 147 00:07:58,240 --> 00:08:02,480 Speaker 5: what what your hearing or pulling from the commentary we've 148 00:08:02,480 --> 00:08:04,400 Speaker 5: heard from these FED officials and what sense you have 149 00:08:04,480 --> 00:08:05,840 Speaker 5: of their path going forward here? 150 00:08:07,040 --> 00:08:08,560 Speaker 3: Well, David, as you know, I mean, if you put 151 00:08:08,560 --> 00:08:11,720 Speaker 3: two economists in a room, you're lucky to get four opinions, right, So, 152 00:08:13,200 --> 00:08:15,080 Speaker 3: and I think that's kind of where you're at right 153 00:08:15,120 --> 00:08:16,680 Speaker 3: now with the FED. I mean, you have a very 154 00:08:16,800 --> 00:08:21,360 Speaker 3: kind of bimodal sort of distribution. I mean there's some 155 00:08:21,400 --> 00:08:23,160 Speaker 3: that don't think they could should be cutting at all, 156 00:08:23,200 --> 00:08:26,360 Speaker 3: and there's others that think that maybe two cuts are likely, 157 00:08:26,440 --> 00:08:31,600 Speaker 3: some thinking they should start sooner than later, you know. 158 00:08:31,800 --> 00:08:36,200 Speaker 3: To me, I think what's important is what Daily said 159 00:08:36,200 --> 00:08:40,800 Speaker 3: about tariffs, because she basically said that, look like everything 160 00:08:40,800 --> 00:08:42,520 Speaker 3: we know about this means it's going to be a 161 00:08:42,559 --> 00:08:46,360 Speaker 3: one off. So why are we holding off on easing 162 00:08:46,559 --> 00:08:52,040 Speaker 3: if you know, given that that first principle. At the 163 00:08:52,040 --> 00:08:56,559 Speaker 3: same time, you know, we know that unemployment is going higher, 164 00:08:56,640 --> 00:08:59,120 Speaker 3: and you know, if the FED has been saying for 165 00:08:59,160 --> 00:09:01,800 Speaker 3: the longest time that the labor markets aren't a source 166 00:09:01,840 --> 00:09:05,400 Speaker 3: of inflationary pressure, I agree with that. But if unemployment 167 00:09:05,480 --> 00:09:08,040 Speaker 3: is going higher, maybe the risk now is that the 168 00:09:08,080 --> 00:09:11,240 Speaker 3: labor markets are in fact becoming a source of disinflationary pressure. 169 00:09:11,520 --> 00:09:13,280 Speaker 3: And I think that's something that they need to heed. 170 00:09:13,520 --> 00:09:15,280 Speaker 4: Interesting. Neil Da, thank you so much. 171 00:09:20,400 --> 00:09:23,960 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 172 00:09:24,040 --> 00:09:27,200 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 173 00:09:27,280 --> 00:09:30,920 Speaker 1: Applecarplay and Android Otto with the Bloomberg Business app, or 174 00:09:31,080 --> 00:09:32,560 Speaker 1: watch us live on YouTube. 175 00:09:32,640 --> 00:09:33,240 Speaker 4: I have been. 176 00:09:33,160 --> 00:09:36,320 Speaker 2: Waiting for this interview right now in the studio where 177 00:09:36,320 --> 00:09:39,200 Speaker 2: this Monica Briguerrera compliance. 178 00:09:38,559 --> 00:09:41,560 Speaker 4: Called for you from Morgan Stanley and beg, beg begged. 179 00:09:41,920 --> 00:09:48,360 Speaker 4: Don't ask her. You have real world New York City service. Yes, 180 00:09:48,480 --> 00:09:49,640 Speaker 4: everyone talks. 181 00:09:49,840 --> 00:09:54,800 Speaker 2: Monica Guerra does Corrine Headgar in a Boston Globe today 182 00:09:55,120 --> 00:09:59,240 Speaker 2: as a blistering essay, I'm the gentleman who just won 183 00:09:59,440 --> 00:10:00,719 Speaker 2: democratic primary. 184 00:10:01,600 --> 00:10:01,920 Speaker 4: Here. 185 00:10:02,440 --> 00:10:06,880 Speaker 2: Can you fathom where we will be if mister mumcdoney 186 00:10:07,080 --> 00:10:09,480 Speaker 2: is elected mayor in November. 187 00:10:09,520 --> 00:10:12,680 Speaker 4: Where will people like you in the machinery of city 188 00:10:12,720 --> 00:10:16,520 Speaker 4: Hall be in February or March of next year? Any idea? 189 00:10:17,000 --> 00:10:19,320 Speaker 6: Well, I just want to clarify I'm no longer working 190 00:10:19,360 --> 00:10:26,160 Speaker 6: for city Hall. R Morgan Stanley's opinion, you know. But 191 00:10:26,200 --> 00:10:28,680 Speaker 6: one of the things that I think was interesting about 192 00:10:28,720 --> 00:10:31,040 Speaker 6: this race is that it seemed that the sort of 193 00:10:31,080 --> 00:10:34,280 Speaker 6: democratic socialist label didn't really matter, right, that there is 194 00:10:34,400 --> 00:10:36,960 Speaker 6: a desire to have New York City be more affordable. 195 00:10:37,040 --> 00:10:39,760 Speaker 6: That's what I saw people running towards. Now what does 196 00:10:39,760 --> 00:10:42,120 Speaker 6: it mean long term? One of the biggest questions that 197 00:10:42,120 --> 00:10:44,559 Speaker 6: we're thinking about from a markets perspective is what happens 198 00:10:44,559 --> 00:10:46,400 Speaker 6: with free bussing. How do you get there? 199 00:10:46,480 --> 00:10:46,640 Speaker 7: Right? 200 00:10:46,679 --> 00:10:48,920 Speaker 6: And that's a big and that's a big question because 201 00:10:48,960 --> 00:10:51,240 Speaker 6: if we know the MTA right is both a city 202 00:10:51,320 --> 00:10:54,800 Speaker 6: and state run entity, and there's a lot of debt, 203 00:10:54,920 --> 00:10:57,600 Speaker 6: there is a lot of fiscal pressure and how are 204 00:10:57,600 --> 00:10:59,160 Speaker 6: they going to get there? So for me, my question 205 00:10:59,280 --> 00:11:02,480 Speaker 6: is what does the bonding situation look like long term 206 00:11:02,520 --> 00:11:03,920 Speaker 6: and what does that mean for credit spreads? 207 00:11:04,040 --> 00:11:05,800 Speaker 4: So there's adult talk, folks. 208 00:11:06,000 --> 00:11:08,520 Speaker 2: Here's what we're to do when David, when she gets 209 00:11:08,600 --> 00:11:11,560 Speaker 2: a day off from Morgan Stanley, she can come in 210 00:11:11,600 --> 00:11:13,840 Speaker 2: with her flip flops and we'll talk to her about 211 00:11:14,200 --> 00:11:17,320 Speaker 2: You said, why did you begin an adult interview? 212 00:11:17,440 --> 00:11:20,120 Speaker 5: David GERA, I'd love to talk a bit about trade, 213 00:11:20,160 --> 00:11:21,960 Speaker 5: first of all, and we had this interview yesterday. Howard 214 00:11:22,000 --> 00:11:24,559 Speaker 5: Lutnik was on with Kaylee Lines and Joe Matthew and 215 00:11:24,840 --> 00:11:26,599 Speaker 5: what he allowed during the course of that interview was 216 00:11:26,640 --> 00:11:29,120 Speaker 5: that the US and China had signed an agreement we 217 00:11:29,160 --> 00:11:31,040 Speaker 5: can call it a deal framework of a deal. What 218 00:11:31,120 --> 00:11:34,319 Speaker 5: have you seeming to codify what was discussed and agreed 219 00:11:34,360 --> 00:11:38,120 Speaker 5: upon in Geneva and then in London after that? Where 220 00:11:38,120 --> 00:11:40,120 Speaker 5: does that get us? As we kind of push headlong, 221 00:11:40,120 --> 00:11:42,040 Speaker 5: were less than two weeks away from July the ninth, 222 00:11:42,040 --> 00:11:44,360 Speaker 5: which is when this posit the President put in place 223 00:11:44,400 --> 00:11:46,959 Speaker 5: on these reciprocal tariffs ends and I should say China's 224 00:11:47,000 --> 00:11:50,120 Speaker 5: exempt from all of that. Where are we now? And 225 00:11:50,160 --> 00:11:52,280 Speaker 5: as we see the market move on that news from 226 00:11:52,440 --> 00:11:56,280 Speaker 5: Commerce Secretary Lutnik, what does it tell you about progress 227 00:11:56,280 --> 00:11:57,960 Speaker 5: and process and where things are heading. 228 00:11:58,280 --> 00:12:00,880 Speaker 6: I think it tells me that Marcus been essentially waiting 229 00:12:00,920 --> 00:12:04,000 Speaker 6: for any news, right so anything to hang their hat on, 230 00:12:04,360 --> 00:12:07,240 Speaker 6: any piece of certainty. And so if we're thinking about 231 00:12:07,280 --> 00:12:09,319 Speaker 6: this framework, the only I think some of the details 232 00:12:09,360 --> 00:12:12,200 Speaker 6: we know have to do with rare earth minerals concessions, right, 233 00:12:12,280 --> 00:12:16,200 Speaker 6: there's very very light information on what's in there. The 234 00:12:16,280 --> 00:12:18,960 Speaker 6: interesting thing about this is that even though we have 235 00:12:19,080 --> 00:12:22,240 Speaker 6: sort of a black box on all of the other negotiations, 236 00:12:22,600 --> 00:12:24,800 Speaker 6: they have said that they're willing to kick the can 237 00:12:24,880 --> 00:12:27,760 Speaker 6: on the ten percent. So we know that there is 238 00:12:27,840 --> 00:12:31,320 Speaker 6: essentially a set baseline going forward and that the rest 239 00:12:31,440 --> 00:12:34,840 Speaker 6: is just right this negotiating piece. We think that ultimately 240 00:12:34,840 --> 00:12:37,560 Speaker 6: you're going to land lower closer to ten percent than 241 00:12:37,600 --> 00:12:40,679 Speaker 6: say thirty forty percent in some instances, depending on the country. 242 00:12:41,200 --> 00:12:44,920 Speaker 6: For us, this means positive market response because you're not 243 00:12:44,960 --> 00:12:46,240 Speaker 6: getting the worst case scenario. 244 00:12:46,440 --> 00:12:46,640 Speaker 2: Right. 245 00:12:46,640 --> 00:12:50,520 Speaker 6: Markets have essentially adjusted and priced in this activity. But 246 00:12:50,559 --> 00:12:53,240 Speaker 6: it also means for us as investors, right, is that 247 00:12:53,280 --> 00:12:55,960 Speaker 6: we know which industries, which sectors are going to be 248 00:12:56,000 --> 00:12:57,960 Speaker 6: the most impacted, and where we have status quo. 249 00:12:58,400 --> 00:13:01,240 Speaker 5: I was at the seven summit, and so I watched 250 00:13:01,240 --> 00:13:03,400 Speaker 5: as the President left, and there were all these disappointed 251 00:13:03,400 --> 00:13:06,760 Speaker 5: delegations who had blown great distances, spending a lot of 252 00:13:06,760 --> 00:13:08,839 Speaker 5: time on airplanes with the hope that they could get 253 00:13:08,840 --> 00:13:10,959 Speaker 5: some time with President Trump and his team to talk 254 00:13:11,000 --> 00:13:13,600 Speaker 5: through these trade deals. As you listen to Secretary, let 255 00:13:13,679 --> 00:13:16,480 Speaker 5: me talk about how we're close to these ten deals, 256 00:13:16,520 --> 00:13:19,640 Speaker 5: ten major trading partners signing deals. We had Scott Bessent 257 00:13:19,840 --> 00:13:22,160 Speaker 5: on Fox Business this morning talking about all of this 258 00:13:22,200 --> 00:13:25,400 Speaker 5: getting wrapped up by Labor Day. How much has all 259 00:13:25,480 --> 00:13:27,400 Speaker 5: of the activity of these last few weeks. So that's 260 00:13:27,440 --> 00:13:29,320 Speaker 5: the G seven, that's the NATO summit. Of course, all 261 00:13:29,320 --> 00:13:32,400 Speaker 5: that's been happening in the Middle East set back this timetable. 262 00:13:32,440 --> 00:13:34,560 Speaker 5: How much realism is baked into the fact that we 263 00:13:34,559 --> 00:13:36,000 Speaker 5: could get some deals here sign soon. 264 00:13:36,520 --> 00:13:38,440 Speaker 6: I think that it is real that you can get 265 00:13:38,440 --> 00:13:40,800 Speaker 6: some deals signed soon, especially by August. The fact that 266 00:13:40,840 --> 00:13:43,200 Speaker 6: they've pushed out that that deadline, and I think they'll 267 00:13:43,240 --> 00:13:44,080 Speaker 6: continue to do so. 268 00:13:44,400 --> 00:13:45,080 Speaker 2: I don't think we're. 269 00:13:44,960 --> 00:13:50,600 Speaker 6: Really beholden to any specific timeframe other than that if 270 00:13:50,600 --> 00:13:52,840 Speaker 6: we're looking at the tax bills, so I'm going to 271 00:13:52,840 --> 00:13:56,640 Speaker 6: shift Turkey to OBBB, you know, the one big beautiful Well, 272 00:13:57,840 --> 00:14:00,000 Speaker 6: if you're looking at the fiscal hawks and getting them 273 00:14:00,080 --> 00:14:02,320 Speaker 6: to the table, there has to be some sort of assurance, 274 00:14:02,400 --> 00:14:04,440 Speaker 6: right that they can offset some of the debt and deficit. 275 00:14:04,720 --> 00:14:07,120 Speaker 6: And so while we may not know what those specific 276 00:14:07,240 --> 00:14:10,480 Speaker 6: parameters are, we do have a baseline expectation from the 277 00:14:10,520 --> 00:14:13,760 Speaker 6: CBO of what types of revenue could be raised an 278 00:14:13,800 --> 00:14:15,560 Speaker 6: event of heightened tariffs. 279 00:14:15,800 --> 00:14:18,199 Speaker 4: It's Friday, Might Brain. You're killing me, David. 280 00:14:18,240 --> 00:14:21,920 Speaker 2: All this stuff is way too nerdfest Monica. Are you 281 00:14:22,040 --> 00:14:25,120 Speaker 2: concerned about our debt and deficit? Or do we just 282 00:14:25,240 --> 00:14:28,720 Speaker 2: you know, the proverbial little g we just continue to 283 00:14:28,800 --> 00:14:30,800 Speaker 2: grow our way out of this mess. 284 00:14:31,040 --> 00:14:33,960 Speaker 6: The idea from this administration is yes, they will. They 285 00:14:34,000 --> 00:14:35,360 Speaker 6: want to grow their way out of this. 286 00:14:35,640 --> 00:14:40,840 Speaker 2: I know that now every administration since Zachary Taylor and 287 00:14:40,880 --> 00:14:42,960 Speaker 2: Tyler Taylor. 288 00:14:44,400 --> 00:14:45,560 Speaker 4: I remember John. 289 00:14:45,400 --> 00:14:47,400 Speaker 5: Tyler Thomas, Jonathan Taylor. 290 00:14:49,600 --> 00:14:52,480 Speaker 2: Help me or right now, we're going to grow our 291 00:14:52,520 --> 00:14:54,440 Speaker 2: way forward extended protection. 292 00:14:54,640 --> 00:14:56,560 Speaker 6: So let me just put it this way. I'm not 293 00:14:56,720 --> 00:14:59,800 Speaker 6: a modern monetary theorist. I don't prescribe to the the 294 00:15:00,000 --> 00:15:01,360 Speaker 6: idea that that doesn't matter. 295 00:15:01,840 --> 00:15:02,160 Speaker 3: Now. 296 00:15:02,400 --> 00:15:04,640 Speaker 6: What I do want to highlight is that you have 297 00:15:04,720 --> 00:15:07,920 Speaker 6: to have growth at levels that outpace the pace of 298 00:15:08,000 --> 00:15:11,320 Speaker 6: interest expense, right, And so if they're able to get 299 00:15:11,320 --> 00:15:14,080 Speaker 6: that balance correct, right, if you get the GDP to 300 00:15:14,160 --> 00:15:17,960 Speaker 6: interest expanse balance correct, then essentially you can keep going 301 00:15:18,000 --> 00:15:20,480 Speaker 6: for quite a while right on this productivity promise of 302 00:15:20,560 --> 00:15:23,440 Speaker 6: the United States. So we don't actually see that cracking yet, 303 00:15:23,920 --> 00:15:24,960 Speaker 6: but it is still a problem. 304 00:15:25,080 --> 00:15:28,480 Speaker 2: Medica, Greg got twenty seconds free bussing. Come on, we 305 00:15:28,480 --> 00:15:31,040 Speaker 2: can do this over a cup of sanc. It's not 306 00:15:31,120 --> 00:15:33,640 Speaker 2: that on a bus. Yeah, No, I haven't been on 307 00:15:33,640 --> 00:15:34,120 Speaker 2: a buses. 308 00:15:34,760 --> 00:15:37,400 Speaker 6: Pro Buses are great free bussing. 309 00:15:38,360 --> 00:15:40,600 Speaker 2: The rich pay for it, but they know it's a 310 00:15:40,720 --> 00:15:44,960 Speaker 2: dedicated text. They know every dollar of that tax is 311 00:15:45,000 --> 00:15:45,960 Speaker 2: going to buses. 312 00:15:46,440 --> 00:15:47,200 Speaker 4: It's a layup. 313 00:15:49,000 --> 00:15:52,240 Speaker 6: This is the thing. There's a lot of transportation holicies 314 00:15:52,240 --> 00:15:54,480 Speaker 6: that seem like layups, you know, when you're thinking about 315 00:15:54,520 --> 00:15:57,680 Speaker 6: congestion pricing from a hocals perspective. That was a layup. 316 00:15:57,840 --> 00:15:59,840 Speaker 6: It wasn't. It had tons of hiccups with people that 317 00:16:00,440 --> 00:16:03,240 Speaker 6: you know, proposing views. So not everyone is going to 318 00:16:03,280 --> 00:16:06,120 Speaker 6: feel that. You know that they're willing to be altruistic 319 00:16:06,280 --> 00:16:08,240 Speaker 6: and you know, support free bussing. 320 00:16:08,440 --> 00:16:10,360 Speaker 4: We got to go. This is br Please come back 321 00:16:10,440 --> 00:16:11,880 Speaker 4: like Monday, Monica. 322 00:16:12,320 --> 00:16:16,040 Speaker 5: Your face the roseve Island tram Right, I got a problem. 323 00:16:16,600 --> 00:16:20,480 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 324 00:16:20,520 --> 00:16:23,920 Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto 325 00:16:23,960 --> 00:16:26,920 Speaker 1: with the Bloomberg Business App. You can also listen live 326 00:16:27,000 --> 00:16:30,560 Speaker 1: on Amazon Alexa from our flagship New York station. Just 327 00:16:30,640 --> 00:16:33,280 Speaker 1: say Alexa, play Bloomberg eleven thirty Huch. 328 00:16:33,320 --> 00:16:36,360 Speaker 2: We're an international brief and we're so honored to have 329 00:16:36,400 --> 00:16:38,720 Speaker 2: her in studio where us. She was just a workhorse 330 00:16:39,120 --> 00:16:43,240 Speaker 2: through COVID free of beamis with US chief economist Ts Lombard, 331 00:16:43,320 --> 00:16:47,680 Speaker 2: always and forever of London. When you say to an 332 00:16:47,680 --> 00:16:51,360 Speaker 2: American you have to focus on the Pacific RIM. Let's 333 00:16:51,360 --> 00:16:54,120 Speaker 2: start with a why for you, you know, Trump trade 334 00:16:54,160 --> 00:16:57,320 Speaker 2: tariffs and all that. Why should we pay attention to 335 00:16:57,360 --> 00:17:00,280 Speaker 2: the Pacific RIM in the second half of this year. Yeah. 336 00:17:00,440 --> 00:17:05,840 Speaker 7: I think that nexus between the US and China is 337 00:17:05,840 --> 00:17:08,560 Speaker 7: one of the things that's really changing and shifting in 338 00:17:08,880 --> 00:17:12,119 Speaker 7: terms of the axis of the global economy. When we 339 00:17:12,200 --> 00:17:16,400 Speaker 7: think about the underlying drivers of some of the big 340 00:17:16,440 --> 00:17:18,320 Speaker 7: shifts that we see in the thing that I hyper 341 00:17:18,320 --> 00:17:22,840 Speaker 7: fixate on, which is bond equity correlations, the underlying driver 342 00:17:23,160 --> 00:17:27,600 Speaker 7: is the political economy inequality of both. 343 00:17:28,040 --> 00:17:30,760 Speaker 2: I saw another jump condition in Taiwan dollar today, way 344 00:17:30,800 --> 00:17:36,040 Speaker 2: outside two standard deviations take currency dynamics week dollar over 345 00:17:36,080 --> 00:17:39,120 Speaker 2: to some of these almost jump conditions in specific room 346 00:17:39,240 --> 00:17:41,800 Speaker 2: strength over to equity bond correlation. 347 00:17:42,640 --> 00:17:46,040 Speaker 7: Okay, so I think, all right, let's do this. I 348 00:17:46,119 --> 00:17:50,639 Speaker 7: think what's happening here is is in the currencies outside 349 00:17:50,680 --> 00:17:52,760 Speaker 7: of of the M and B within China. Like, I 350 00:17:52,840 --> 00:17:59,160 Speaker 7: just don't know why the administration wouldn't consider the currency 351 00:17:59,240 --> 00:18:01,840 Speaker 7: as part of trade deals when when you're considering China 352 00:18:01,880 --> 00:18:05,000 Speaker 7: it's a slightly more I guess aggressive proposition. 353 00:18:05,280 --> 00:18:05,919 Speaker 2: But you know what. 354 00:18:06,119 --> 00:18:10,760 Speaker 7: The Taiwan has had this current account surplus for years 355 00:18:10,760 --> 00:18:14,320 Speaker 7: and years and years. It's a massive percentage of GDP. 356 00:18:14,800 --> 00:18:16,680 Speaker 7: Why would that not be a part Why would the 357 00:18:16,720 --> 00:18:19,320 Speaker 7: currency not be a part of the of the deal. 358 00:18:20,040 --> 00:18:22,000 Speaker 7: And I think sort of what's changing here here I 359 00:18:22,000 --> 00:18:25,080 Speaker 7: go to the bond equity correlation, is that we're we're 360 00:18:25,119 --> 00:18:28,720 Speaker 7: shifting away from the hyperglobalization that has sustained those current 361 00:18:28,720 --> 00:18:32,120 Speaker 7: account surpluses and into a world where the policy reaction 362 00:18:32,320 --> 00:18:35,280 Speaker 7: to the hollowing out of Detroit and the rise of inequality, 363 00:18:35,640 --> 00:18:39,680 Speaker 7: the policy reaction is negative supply shocks. Negative supply shocks 364 00:18:40,160 --> 00:18:44,040 Speaker 7: push inflation into the system, destroy demand, and turn the 365 00:18:44,040 --> 00:18:47,280 Speaker 7: bond equity correlation positive because the investors need more to 366 00:18:47,320 --> 00:18:50,000 Speaker 7: compensate them for the deterioration of the hedging quality of 367 00:18:50,040 --> 00:18:53,280 Speaker 7: the of the bond. And so the likelihood of those 368 00:18:53,280 --> 00:18:56,800 Speaker 7: negative supply shocks is just higher now than it was previously, 369 00:18:56,920 --> 00:19:00,719 Speaker 7: not least because we're moving from a unipolar global political 370 00:19:00,840 --> 00:19:03,600 Speaker 7: order to a multipolar global political order, which also has 371 00:19:03,640 --> 00:19:07,920 Speaker 7: a lot of consequences in that specific rim area. So 372 00:19:08,000 --> 00:19:11,600 Speaker 7: this increase in instances of negative supply shots to me, 373 00:19:11,920 --> 00:19:13,480 Speaker 7: and this is where I have to be very careful 374 00:19:13,480 --> 00:19:15,800 Speaker 7: about sort of my truth on a three year time 375 00:19:15,840 --> 00:19:19,120 Speaker 7: horizon versus what actually gets priced at this moment in time. 376 00:19:19,400 --> 00:19:22,400 Speaker 7: To me, that means greater likelihood of negative supply shots. 377 00:19:22,520 --> 00:19:25,080 Speaker 7: But just as in the eighties it took quite a 378 00:19:25,080 --> 00:19:28,240 Speaker 7: long time for people to price out term premium, it's 379 00:19:28,280 --> 00:19:29,760 Speaker 7: going to take quite a long time. 380 00:19:29,680 --> 00:19:31,679 Speaker 4: To take longer than the modern media. 381 00:19:31,760 --> 00:19:34,200 Speaker 5: Thanks David, I'd love to stick with that, which is 382 00:19:34,240 --> 00:19:36,439 Speaker 5: your overarching thesis that move away from a kind of 383 00:19:36,560 --> 00:19:38,520 Speaker 5: unique polar world to an artipolar one. And so when 384 00:19:38,560 --> 00:19:40,400 Speaker 5: you look at the weakening in the dollar that we've seen, 385 00:19:40,480 --> 00:19:42,440 Speaker 5: is it part and parcel of that. Do you see 386 00:19:42,440 --> 00:19:45,040 Speaker 5: that as kind of emblematic of maybe more near term 387 00:19:45,119 --> 00:19:47,119 Speaker 5: or shorter term phenomena or is that part of this 388 00:19:47,200 --> 00:19:48,639 Speaker 5: kind of broader thesis that you have. 389 00:19:48,880 --> 00:19:51,840 Speaker 7: I think it's definitely part of this broader, broader thesis 390 00:19:51,880 --> 00:19:56,840 Speaker 7: that the underlying sort of driver of the dollar standard 391 00:19:57,080 --> 00:20:01,919 Speaker 7: and the strength of the dollar is the fact that 392 00:20:01,960 --> 00:20:05,320 Speaker 7: the US economy is just more dynamic. It's able to 393 00:20:05,520 --> 00:20:10,159 Speaker 7: sustain higher private consumption led growth without creating inflation, and 394 00:20:10,200 --> 00:20:12,920 Speaker 7: so risk adjusted returns in the US have just been 395 00:20:13,040 --> 00:20:17,040 Speaker 7: higher over that period of time. But I think what's 396 00:20:17,119 --> 00:20:20,440 Speaker 7: what's changing now. The US is going to remain exceptional. 397 00:20:20,720 --> 00:20:23,159 Speaker 7: It's just not going to be as exceptional as it 398 00:20:23,240 --> 00:20:26,920 Speaker 7: was in the twenty ten exceptionality exactly right. So I think, 399 00:20:26,960 --> 00:20:30,000 Speaker 7: you know, the underlying causes of the strength of the 400 00:20:30,040 --> 00:20:32,560 Speaker 7: dollar is not so much on the trade account like 401 00:20:32,640 --> 00:20:34,560 Speaker 7: that seems to me something that's sort of flapping in 402 00:20:34,600 --> 00:20:38,320 Speaker 7: the wind of capital flows. And it's actually capital inflows 403 00:20:38,560 --> 00:20:41,239 Speaker 7: predominantly actually in the last decade from Europe rather than 404 00:20:41,240 --> 00:20:44,560 Speaker 7: the Pacific rim that have have helped to cause this 405 00:20:44,560 --> 00:20:47,160 Speaker 7: this kind of strength of the dollar and the outperformance 406 00:20:47,160 --> 00:20:50,040 Speaker 7: of US assets to the extent that they contribute there 407 00:20:50,359 --> 00:20:53,159 Speaker 7: there as well. And so that's that's also unwinding and 408 00:20:53,200 --> 00:20:56,440 Speaker 7: reversing because US risk adjusted returns are coming down relative 409 00:20:56,440 --> 00:20:58,880 Speaker 7: to the rest of the world, where US risk adjusted 410 00:20:58,880 --> 00:21:03,960 Speaker 7: returns are probably better, and partly thanks to the partly 411 00:21:04,000 --> 00:21:06,920 Speaker 7: thanks to the kind of the chaos that is created 412 00:21:06,960 --> 00:21:10,680 Speaker 7: by Trumpian policy in Europe, but also thanks to the 413 00:21:10,800 --> 00:21:13,320 Speaker 7: rise in inequality and the rise of the AfD ten 414 00:21:13,320 --> 00:21:17,399 Speaker 7: percentage points in the German elections and Russian threat. 415 00:21:18,080 --> 00:21:20,720 Speaker 5: Can I ask you about what's transpired over the last 416 00:21:20,760 --> 00:21:22,760 Speaker 5: twenty four hours We had the Commerce Secretary on our 417 00:21:22,800 --> 00:21:25,480 Speaker 5: ara yesterday evening and he said there's been this deal 418 00:21:25,520 --> 00:21:27,560 Speaker 5: that's been inked, which I guess is codifying the agreement 419 00:21:27,600 --> 00:21:30,760 Speaker 5: that took place in Geneva, and then was react in London. 420 00:21:31,440 --> 00:21:33,520 Speaker 5: Great enthusiasm it scenes in the market because that's an 421 00:21:33,520 --> 00:21:36,040 Speaker 5: indication of something. What is the something that you see 422 00:21:36,080 --> 00:21:40,000 Speaker 5: that indicating bringing to bear your experience tracking what's going 423 00:21:40,040 --> 00:21:42,240 Speaker 5: on in Asia here, it seems to me it's a 424 00:21:42,320 --> 00:21:44,159 Speaker 5: very basic thing that's been to agree to, which is 425 00:21:44,480 --> 00:21:46,960 Speaker 5: a continuation of talks and I guess more openness to 426 00:21:47,040 --> 00:21:50,560 Speaker 5: some bassets of trade. What exactly has been inked here 427 00:21:50,560 --> 00:21:52,120 Speaker 5: and why is that so significant if at all? 428 00:21:52,359 --> 00:21:55,800 Speaker 7: Yeah, I guess the big kind of push point that 429 00:21:55,880 --> 00:21:59,159 Speaker 7: could shift in terms of the actual rate of tariffs 430 00:21:59,000 --> 00:22:01,720 Speaker 7: that's going to be charge on China is with relation 431 00:22:01,840 --> 00:22:04,000 Speaker 7: to the fentanyl side of things, which is a big 432 00:22:04,080 --> 00:22:09,800 Speaker 7: part of the thirty percent additional on China. So that 433 00:22:09,800 --> 00:22:12,320 Speaker 7: that's maybe where you could get some positive news kind 434 00:22:12,320 --> 00:22:16,119 Speaker 7: of coming through. But like with all the trade negotiations, 435 00:22:16,160 --> 00:22:18,679 Speaker 7: it's the July ninth is not like the deadline for 436 00:22:18,720 --> 00:22:20,480 Speaker 7: this to be done. It's the deadline for talks to 437 00:22:20,520 --> 00:22:23,480 Speaker 7: have started, which means again that you just get these 438 00:22:23,560 --> 00:22:25,919 Speaker 7: kind of uncertainty shocks coming through. 439 00:22:25,840 --> 00:22:28,199 Speaker 2: And the time we've got left with all of the 440 00:22:28,280 --> 00:22:31,480 Speaker 2: Tea Slambard, the heritage of Charles Dumont, what you're doing 441 00:22:31,840 --> 00:22:35,360 Speaker 2: for you, Beamish, Where do you think the blended tariff 442 00:22:35,480 --> 00:22:39,680 Speaker 2: level will settle down to? It's seventeen ish now I'm guessing, 443 00:22:40,320 --> 00:22:43,639 Speaker 2: I'm just making a weekend guess where does that end up? 444 00:22:43,680 --> 00:22:45,720 Speaker 4: Does it come back down near two three? 445 00:22:46,320 --> 00:22:46,359 Speaker 2: No? 446 00:22:46,560 --> 00:22:50,680 Speaker 7: I think there's a there's Tariffs have a multiple functions 447 00:22:50,720 --> 00:22:53,720 Speaker 7: in the toolbox. One is negotiations, That's what we saw 448 00:22:53,760 --> 00:22:56,120 Speaker 7: in the first half. Now we're kind of coming through 449 00:22:56,200 --> 00:23:00,640 Speaker 7: the black process of negotiations. Another is like actual balancing 450 00:23:00,640 --> 00:23:02,520 Speaker 7: of the US economy, whether you believe that's going to 451 00:23:02,560 --> 00:23:05,480 Speaker 7: happen or not. But the one with the baseline for 452 00:23:05,560 --> 00:23:09,600 Speaker 7: tariffs that persists is a fiscal reason and a reorientation 453 00:23:09,760 --> 00:23:11,720 Speaker 7: of fiscal policy. And I don't think it's an I 454 00:23:11,720 --> 00:23:16,800 Speaker 7: don't think it is a coincidence that tax cuts are 455 00:23:17,000 --> 00:23:21,120 Speaker 7: about zero point eight percent of GDP and spending cuts 456 00:23:21,359 --> 00:23:23,520 Speaker 7: offset that by zero point two percent, and then it 457 00:23:23,600 --> 00:23:26,680 Speaker 7: just so happens that tariff revenues as they as they 458 00:23:26,720 --> 00:23:29,280 Speaker 7: stand would probably be about zero point six percent. And 459 00:23:29,320 --> 00:23:32,320 Speaker 7: so that helps you to square the circle in Congress 460 00:23:32,320 --> 00:23:34,960 Speaker 7: between the fiscal hawks and the and the people that 461 00:23:35,000 --> 00:23:37,639 Speaker 7: are up for reelection in the in the primary. So 462 00:23:37,680 --> 00:23:41,480 Speaker 7: I think that that ten percent level is actually quite stafy. 463 00:23:42,000 --> 00:23:45,359 Speaker 4: I got twenty seconds. What does labor do in the 464 00:23:45,440 --> 00:23:46,280 Speaker 4: United Kingdom? 465 00:23:46,560 --> 00:23:49,560 Speaker 2: I read the British newspapers and it's as crazy as 466 00:23:49,640 --> 00:23:53,359 Speaker 2: I've ever seen. It'll be crazy. I don't understand it. 467 00:23:53,480 --> 00:23:57,960 Speaker 7: Okay. In the twenty seconds, they probably they probably replicate 468 00:23:58,280 --> 00:24:00,680 Speaker 7: what Gordon Brown does, which is tell them bond vigilant 469 00:24:00,800 --> 00:24:02,200 Speaker 7: is what they want to hear, and then spend like 470 00:24:02,240 --> 00:24:02,560 Speaker 7: a troop. 471 00:24:02,600 --> 00:24:05,119 Speaker 2: Okay, does reform is Nigel Ferrari is going to be 472 00:24:05,160 --> 00:24:06,119 Speaker 2: the next Prime Minister? 473 00:24:07,400 --> 00:24:09,359 Speaker 4: Twelve seconds? 474 00:24:09,800 --> 00:24:14,040 Speaker 7: I hope not. If Reeves manages to sort of shift 475 00:24:14,080 --> 00:24:17,119 Speaker 7: past this kind of myopic focus on the fiscal rules, 476 00:24:17,119 --> 00:24:19,679 Speaker 7: then maybe the economy can turn around. 477 00:24:20,040 --> 00:24:23,320 Speaker 4: Thank you so much, Frank. Does that cover the United Kingdom? 478 00:24:23,400 --> 00:24:23,600 Speaker 2: Yeah? 479 00:24:24,160 --> 00:24:27,640 Speaker 5: It's for thirty seconds, free beamers, Thank you so much. 480 00:24:33,960 --> 00:24:37,840 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 481 00:24:37,920 --> 00:24:41,200 Speaker 1: starting at seven am Eastern on Apple, Corplay and Android Otto. 482 00:24:41,320 --> 00:24:44,160 Speaker 1: With the Bloomberg Business app, you can also watch us 483 00:24:44,200 --> 00:24:47,560 Speaker 1: live every weekday on YouTube and always on the Bloomberg 484 00:24:47,640 --> 00:24:48,919 Speaker 1: terminal joining us. 485 00:24:49,000 --> 00:24:52,320 Speaker 2: James Steele of HSBC, it's one of the piece platinum 486 00:24:52,359 --> 00:24:55,000 Speaker 2: or palladium. I think I saw a record high like 487 00:24:55,119 --> 00:24:56,479 Speaker 2: yesterday or the day before. 488 00:24:57,040 --> 00:24:59,840 Speaker 4: Your world's on fire, isn't it? I mean even so 489 00:25:00,080 --> 00:25:00,880 Speaker 4: over got it going? 490 00:25:01,280 --> 00:25:02,199 Speaker 8: Yes, it certainly is. 491 00:25:02,280 --> 00:25:02,480 Speaker 4: Come. 492 00:25:03,000 --> 00:25:07,960 Speaker 8: The precious metals markets have all been very active this year, well, 493 00:25:08,119 --> 00:25:14,520 Speaker 8: for very different reasons. The gold obviously, you know, and 494 00:25:14,560 --> 00:25:17,600 Speaker 8: all the time I've been watching gold and analyzing it, 495 00:25:17,640 --> 00:25:20,960 Speaker 8: the same twelve or fifteen factors drive it year after year. 496 00:25:21,760 --> 00:25:24,600 Speaker 8: The trick in analyzing it and trying to get an 497 00:25:24,640 --> 00:25:27,480 Speaker 8: idea where the price might go is to which of 498 00:25:27,520 --> 00:25:31,119 Speaker 8: those factors is dominant and which is recessive right now? 499 00:25:31,280 --> 00:25:35,360 Speaker 8: And for this year it's been geopolitics and last year 500 00:25:35,400 --> 00:25:37,920 Speaker 8: as well, and it's been quite a long time since 501 00:25:37,960 --> 00:25:39,120 Speaker 8: that was in the driver's. 502 00:25:38,800 --> 00:25:41,119 Speaker 4: Seat in central banks are still buying at the margin. 503 00:25:41,880 --> 00:25:45,439 Speaker 8: Oh absolutely, that's the second issue too. I mean I 504 00:25:45,440 --> 00:25:48,160 Speaker 8: have no doubt that we would not be up here 505 00:25:48,200 --> 00:25:49,880 Speaker 8: if it went for a central bank buying. 506 00:25:49,680 --> 00:25:50,919 Speaker 4: Now I'm going to get this thing because I think 507 00:25:50,960 --> 00:25:51,680 Speaker 4: it's so important. 508 00:25:51,720 --> 00:25:54,120 Speaker 2: If I look at tell you'red Colorado and the Liberty 509 00:25:54,119 --> 00:25:56,879 Speaker 2: Bell Mine, which is gold and silver, and it's like, 510 00:25:57,160 --> 00:26:00,480 Speaker 2: you know, the unsinkable Miley Brown is like eighteen nine, 511 00:26:00,560 --> 00:26:01,240 Speaker 2: they shut. 512 00:26:01,040 --> 00:26:02,480 Speaker 4: It down in nineteen twenty one. 513 00:26:02,720 --> 00:26:05,600 Speaker 2: Is there still gold or silver out there? When Gura 514 00:26:05,600 --> 00:26:07,680 Speaker 2: goes out to Teller Ride. 515 00:26:07,920 --> 00:26:11,000 Speaker 8: Well, I don't know about that specific mine. But there's 516 00:26:12,320 --> 00:26:13,879 Speaker 8: one of the problems with gold. You know they talk 517 00:26:13,920 --> 00:26:16,600 Speaker 8: about peak oil. Well, I can tell you there's no 518 00:26:16,680 --> 00:26:19,120 Speaker 8: such thing as peak oil, but there is peak gold. Interesting, 519 00:26:19,560 --> 00:26:21,960 Speaker 8: we've been looking for gold for five thousand years. We've 520 00:26:22,000 --> 00:26:24,000 Speaker 8: only been looking for oil for one hundred and fifty 521 00:26:24,000 --> 00:26:28,399 Speaker 8: odd years. And the ore grade is dropping, it's getting 522 00:26:28,400 --> 00:26:32,119 Speaker 8: more difficult. We haven't had a mega discovery since nineteen nine. 523 00:26:32,480 --> 00:26:36,280 Speaker 8: That's twenty million ounces or more since nineteen ninety seven. 524 00:26:36,480 --> 00:26:39,199 Speaker 8: So there's no shortage of gold, and I don't mean 525 00:26:39,200 --> 00:26:42,240 Speaker 8: to give the impression that there is. And mine supply 526 00:26:42,400 --> 00:26:45,640 Speaker 8: is going up because it's very profitable to produce gold 527 00:26:45,720 --> 00:26:48,360 Speaker 8: right now. But we do see later in the decade, 528 00:26:48,400 --> 00:26:52,560 Speaker 8: we see the gold production from the mining side beginning 529 00:26:52,560 --> 00:26:54,360 Speaker 8: to plateau. And top out. 530 00:26:54,800 --> 00:26:56,639 Speaker 5: Let me go back to the central bank issue. And 531 00:26:56,680 --> 00:26:58,359 Speaker 5: I keep thinking about this Leslie Hook piece in the 532 00:26:58,359 --> 00:27:01,480 Speaker 5: Financial Times from a few weeks back, and the thrust 533 00:27:01,520 --> 00:27:05,040 Speaker 5: of that was you have central banks really scaling up 534 00:27:05,080 --> 00:27:08,119 Speaker 5: their purchases of gold all the while the forecast seems 535 00:27:08,119 --> 00:27:10,400 Speaker 5: to be they're going to be paring down how many 536 00:27:10,440 --> 00:27:13,160 Speaker 5: dollars they have on hand. What does that phenomenon tell 537 00:27:13,200 --> 00:27:15,639 Speaker 5: you or say just about the state of the world today. 538 00:27:16,160 --> 00:27:21,120 Speaker 8: Well, that brings in the d dollarization argument, and which 539 00:27:21,119 --> 00:27:25,080 Speaker 8: we think is gradual. We're not in the dollar, the 540 00:27:25,200 --> 00:27:27,960 Speaker 8: dollar will cease to be the world reserve currency count 541 00:27:28,040 --> 00:27:32,480 Speaker 8: at all for many reasons. According to our effects research team, 542 00:27:32,520 --> 00:27:37,360 Speaker 8: the dollar will remain the world reserve currency. But perhaps 543 00:27:37,400 --> 00:27:40,520 Speaker 8: every central bank doesn't need quite as many dollars as 544 00:27:40,600 --> 00:27:44,320 Speaker 8: it has. And if it decides on a portfolio basis 545 00:27:44,359 --> 00:27:48,000 Speaker 8: to readjust things, but is reluctant to go into another 546 00:27:48,080 --> 00:27:51,920 Speaker 8: specific currency, which many of them appear to be, then 547 00:27:51,960 --> 00:27:55,000 Speaker 8: gold is a marvelous way of slightly dewaighting your dollar 548 00:27:55,040 --> 00:27:58,520 Speaker 8: holdings without committing yourself to something like the euro, the yen, 549 00:27:58,720 --> 00:28:01,640 Speaker 8: or another fixed income instrument that you might not want 550 00:28:01,680 --> 00:28:06,600 Speaker 8: to own. So it's it's a perfect sweet spot. And 551 00:28:06,640 --> 00:28:09,440 Speaker 8: when you see geopolitical risks, I mean when you look 552 00:28:09,480 --> 00:28:13,600 Speaker 8: at the central banks that are buying, they tend to 553 00:28:13,640 --> 00:28:18,359 Speaker 8: be near neighbors that they may or may not have 554 00:28:18,480 --> 00:28:21,040 Speaker 8: issues with. They don't tend to keep the gold in 555 00:28:21,080 --> 00:28:23,880 Speaker 8: that country, see, they tend to come elsewhere. 556 00:28:24,440 --> 00:28:27,679 Speaker 2: James Steele with us on your community crascination near June thirty. 557 00:28:27,720 --> 00:28:31,960 Speaker 2: Here we reset for the second half of twenty twenty five, 558 00:28:32,040 --> 00:28:35,120 Speaker 2: even looking into twenty twenty six, which I find hard 559 00:28:35,119 --> 00:28:37,960 Speaker 2: to believe. Futures up twelve up twenty two earlier, give 560 00:28:38,000 --> 00:28:40,320 Speaker 2: back a little bit, but we'll see how the market 561 00:28:40,360 --> 00:28:44,000 Speaker 2: opens here in twenty three minutes of sixteen point at two. 562 00:28:43,960 --> 00:28:47,840 Speaker 4: Four James Steele. Are central banks supposed to own gold? 563 00:28:48,120 --> 00:28:48,840 Speaker 4: I mean they have a. 564 00:28:48,840 --> 00:28:54,120 Speaker 2: Societal policy to manage inflation and the mandates differ or 565 00:28:54,160 --> 00:28:57,320 Speaker 2: the jobs market. Everyone new Zealand's different than America. 566 00:28:57,320 --> 00:28:59,800 Speaker 4: I get that. But where does it say they're supposed 567 00:28:59,800 --> 00:29:01,200 Speaker 4: to have Fort Knox. 568 00:29:01,760 --> 00:29:04,960 Speaker 8: Well, they've always had gold. Gold was the original some 569 00:29:05,000 --> 00:29:08,120 Speaker 8: when central banks originated, going back to the Bank of France, 570 00:29:08,160 --> 00:29:13,120 Speaker 8: the Battle the America, they were all founded on their 571 00:29:13,160 --> 00:29:16,000 Speaker 8: gold reserves and in fact, it's only been relative. 572 00:29:16,000 --> 00:29:17,120 Speaker 4: You you, you, you could. 573 00:29:16,920 --> 00:29:19,640 Speaker 8: Almost ask that the currency as we know it now 574 00:29:20,200 --> 00:29:23,400 Speaker 8: is relatively new compared to their to their gold holdings. 575 00:29:23,600 --> 00:29:26,880 Speaker 2: Are their gold holdings now equivalent to what they held 576 00:29:26,880 --> 00:29:28,720 Speaker 2: in the nineteen thirties. 577 00:29:28,960 --> 00:29:33,680 Speaker 8: Well, as far as the actual tonnage goes, they're they're, they're, they're, 578 00:29:33,720 --> 00:29:37,760 Speaker 8: they're they're greater, but as a percentage of their reserves 579 00:29:38,320 --> 00:29:42,240 Speaker 8: much smaller, because we've gotten a lot more currency since 580 00:29:42,320 --> 00:29:43,200 Speaker 8: since since then. 581 00:29:44,200 --> 00:29:46,680 Speaker 5: You bring up to your politics, and you know, I 582 00:29:46,680 --> 00:29:48,960 Speaker 5: take that to mean what's been happening in the Middle East, 583 00:29:49,000 --> 00:29:51,320 Speaker 5: all of the upheaval that we've seen, the fighting and upheaval. 584 00:29:52,360 --> 00:29:55,960 Speaker 5: How much does the current trade picture, the tariff's picture, 585 00:29:56,240 --> 00:29:58,720 Speaker 5: affect the appetite for goldens to what we're seeing in 586 00:29:58,760 --> 00:29:59,960 Speaker 5: the market more broadly. 587 00:30:00,920 --> 00:30:04,800 Speaker 8: Well, it's been a positive for the gold market for 588 00:30:04,840 --> 00:30:09,000 Speaker 8: many reasons. It feeds into the geopolitical argument as well. 589 00:30:10,360 --> 00:30:15,920 Speaker 8: Tariffs are arguably disruptive to capital markets, credit spreads, They 590 00:30:16,000 --> 00:30:19,160 Speaker 8: can ultimately have an effect on equities. All of these 591 00:30:19,200 --> 00:30:22,760 Speaker 8: things increase on certainty, and that's good for gold. 592 00:30:22,800 --> 00:30:23,000 Speaker 4: You know. 593 00:30:23,080 --> 00:30:25,720 Speaker 8: It's not so much that gold reacts to good economic 594 00:30:25,760 --> 00:30:29,280 Speaker 8: policy or about economic policy, although obviously it does, but 595 00:30:29,360 --> 00:30:32,240 Speaker 8: it really reacts to his uncertainty. And if you look 596 00:30:32,240 --> 00:30:35,320 Speaker 8: at the economic policy on uncertainty index, and we've done 597 00:30:35,320 --> 00:30:39,000 Speaker 8: a lot of statistical work on this, the correlation's quite 598 00:30:39,120 --> 00:30:39,640 Speaker 8: quite good. 599 00:30:40,680 --> 00:30:43,120 Speaker 4: Where is gold now in the luxury space? 600 00:30:43,760 --> 00:30:46,960 Speaker 2: I mean, you know, we meant in a win tour 601 00:30:47,040 --> 00:30:51,320 Speaker 2: is finally retiring from Vogue US after a stellar, magical 602 00:30:51,920 --> 00:30:54,560 Speaker 2: adjustment in jewelry and fashion and all that. 603 00:30:54,760 --> 00:30:55,800 Speaker 4: Is in booming now. 604 00:30:57,560 --> 00:31:01,240 Speaker 8: Well, at the high end, it's always good because of 605 00:31:01,280 --> 00:31:06,040 Speaker 8: the income that's allowed to support it, but jewelry demand 606 00:31:06,080 --> 00:31:10,480 Speaker 8: itself is down double digit. The you don't forget seventy 607 00:31:10,520 --> 00:31:13,960 Speaker 8: percent of a physical fifty percent of all physical gold 608 00:31:14,000 --> 00:31:18,760 Speaker 8: demand is in jewelry and silly, yes, yes, half of it. 609 00:31:19,480 --> 00:31:21,400 Speaker 8: And I'm not talking about you know, hedge funds and 610 00:31:21,480 --> 00:31:25,120 Speaker 8: portfolio managers. I'm trying the price millions. It does. But 611 00:31:25,200 --> 00:31:28,760 Speaker 8: the difference is that on the institution, on the investment level, 612 00:31:29,320 --> 00:31:32,240 Speaker 8: relatively few players move in and out, and they move 613 00:31:32,280 --> 00:31:34,840 Speaker 8: a lot of buoyant so they can appear to dictate 614 00:31:34,880 --> 00:31:37,920 Speaker 8: the price on a daily level, whereas millions of people 615 00:31:37,960 --> 00:31:41,680 Speaker 8: buy and sell gold, and very fractional small amounts every 616 00:31:41,760 --> 00:31:44,640 Speaker 8: day around the world, and it can take many months 617 00:31:44,680 --> 00:31:45,520 Speaker 8: for that to feed in. 618 00:31:45,920 --> 00:31:48,840 Speaker 2: David, let's go to our expert on this, joining US 619 00:31:48,920 --> 00:31:51,600 Speaker 2: Weekend Gold expert Lisa Matteo. 620 00:31:52,160 --> 00:31:53,640 Speaker 4: Can you buy gold at costco? 621 00:31:53,960 --> 00:31:55,640 Speaker 9: You can buy the bars and you can buy it 622 00:31:55,720 --> 00:31:56,840 Speaker 9: like jewelry and stuff too. 623 00:31:57,440 --> 00:31:59,560 Speaker 4: Okay, David, One more for James Steel. 624 00:31:59,360 --> 00:32:03,320 Speaker 5: Talk at the beginning, mixing up palladium and platinum. What's 625 00:32:03,320 --> 00:32:05,320 Speaker 5: another metal that we should be paying attention to here 626 00:32:05,480 --> 00:32:08,000 Speaker 5: aside from gold to where have you seen an interesting 627 00:32:08,040 --> 00:32:09,200 Speaker 5: story merging so far? 628 00:32:09,480 --> 00:32:11,560 Speaker 8: It's sorry, it didn't mean to cut you off there. 629 00:32:11,680 --> 00:32:14,800 Speaker 8: So far it's been platinum, and part of that is 630 00:32:14,840 --> 00:32:19,080 Speaker 8: the jewelry story, a platinum jewelry, but gold jewelry has 631 00:32:19,080 --> 00:32:24,600 Speaker 8: gotten very expensive, very expensive indeed, and in price sensitive economies, 632 00:32:24,680 --> 00:32:27,800 Speaker 8: notably China, there's been there is an ongoing switch now 633 00:32:28,120 --> 00:32:32,600 Speaker 8: back to platinum. And when you compare the size of 634 00:32:32,640 --> 00:32:36,320 Speaker 8: the markets, I mean they're much smaller. Platinum is much 635 00:32:36,360 --> 00:32:41,040 Speaker 8: smaller than gold, and the supply of it is rather tight. 636 00:32:41,160 --> 00:32:44,640 Speaker 8: Most of it comes from South Africa, but also Zimbabwe 637 00:32:44,840 --> 00:32:47,160 Speaker 8: and Russia, and none of them are in a particularly 638 00:32:47,800 --> 00:32:50,920 Speaker 8: good state to increase output. So the stocks are much 639 00:32:50,960 --> 00:32:54,280 Speaker 8: lower and the sensitivity to prices higher. 640 00:32:54,320 --> 00:32:56,280 Speaker 4: Thank you for this brief. James Steele with us, so 641 00:32:56,360 --> 00:32:58,480 Speaker 4: they just be seen. Just love having your moon. 642 00:32:59,000 --> 00:33:02,880 Speaker 1: This is the Bloomber Surveillance Podcast. Listen live each weekday 643 00:33:02,920 --> 00:33:05,960 Speaker 1: starting at seven am Eastern on Apple Coarclay, and Android 644 00:33:05,960 --> 00:33:09,000 Speaker 1: Atto with the Bloomberg Business app. You can also listen 645 00:33:09,080 --> 00:33:12,360 Speaker 1: live on Amazon Alexa from our flagship New York station. 646 00:33:12,880 --> 00:33:15,560 Speaker 1: Just say Alexa play Bloomberg eleven thirty. 647 00:33:15,920 --> 00:33:18,840 Speaker 2: Let's get you at the newspapers, Lisa Matteo before she 648 00:33:19,000 --> 00:33:20,600 Speaker 2: jets to Venice, what are you doing? 649 00:33:20,960 --> 00:33:21,360 Speaker 6: All right? 650 00:33:21,400 --> 00:33:24,400 Speaker 9: So we've heard about the Trump administration's battle with Harvard, right, David, 651 00:33:24,400 --> 00:33:27,040 Speaker 9: You've reported on a number of times now. The New 652 00:33:27,120 --> 00:33:29,400 Speaker 9: York Times is saying the Trump administration putting the pressure 653 00:33:29,400 --> 00:33:32,560 Speaker 9: on the president of the University of Virginia to step down. 654 00:33:33,440 --> 00:33:36,720 Speaker 9: They're currently investigating the school for the DEI efforts. The 655 00:33:36,800 --> 00:33:40,560 Speaker 9: DOJ is saying that they want that president to step down, 656 00:33:40,560 --> 00:33:42,480 Speaker 9: and The New York Times is saying that's what's making 657 00:33:42,680 --> 00:33:44,920 Speaker 9: this different than all the other battles that they've done, 658 00:33:44,960 --> 00:33:47,280 Speaker 9: because this is the first time the administration has pushed 659 00:33:47,280 --> 00:33:50,880 Speaker 9: a university to remove its leader. He's been the president 660 00:33:50,880 --> 00:33:53,640 Speaker 9: there since twenty eighteen, so this is a big move 661 00:33:53,680 --> 00:33:56,200 Speaker 9: for that. With all the talks we're having courts. 662 00:33:55,920 --> 00:33:58,440 Speaker 2: I mean, forget about whatever the name of the school is. 663 00:33:59,520 --> 00:34:02,120 Speaker 2: Doesn't judiciary just show up at some point. 664 00:34:02,160 --> 00:34:04,120 Speaker 5: Well, we've seen that in the case of Harvard over 665 00:34:04,160 --> 00:34:07,080 Speaker 5: these last few weeks, sort of allowing Harvard to continue 666 00:34:07,120 --> 00:34:08,960 Speaker 5: to allow international students and for example. But I think 667 00:34:08,960 --> 00:34:11,040 Speaker 5: that's so fascinating about this story by Michael Schmid of 668 00:34:11,080 --> 00:34:14,239 Speaker 5: The Times, is just the power that's being exercised on 669 00:34:14,360 --> 00:34:18,600 Speaker 5: this public state university. As you say, at least bring 670 00:34:18,680 --> 00:34:20,040 Speaker 5: up the fact that they're trying to get this this 671 00:34:20,120 --> 00:34:21,600 Speaker 5: leader out who'd been at Harvard. By the way, he'd 672 00:34:21,600 --> 00:34:23,600 Speaker 5: been the i think the dean of the education school 673 00:34:23,600 --> 00:34:26,160 Speaker 5: at Harvard before this. So we'll see where this goes. 674 00:34:26,239 --> 00:34:30,719 Speaker 5: But sort of you see rationing up here, the administration's 675 00:34:30,760 --> 00:34:32,000 Speaker 5: kind of device that's putting on these. 676 00:34:32,040 --> 00:34:36,080 Speaker 2: Yeah, a wonderful conversation with an executive of a college 677 00:34:36,080 --> 00:34:38,239 Speaker 2: the other day, it doesn't matter where they are, and 678 00:34:38,280 --> 00:34:41,359 Speaker 2: we both agreed. It's a world turned upside down for 679 00:34:41,400 --> 00:34:44,640 Speaker 2: all sorts of reasons. Post COVID there's a fewer kids now, 680 00:34:45,239 --> 00:34:48,399 Speaker 2: you know, just the normal grinding of education is tough 681 00:34:48,480 --> 00:34:48,799 Speaker 2: right now. 682 00:34:48,880 --> 00:34:50,920 Speaker 5: Yeah, and everyone's sort of worried about where all this is. 683 00:34:51,120 --> 00:34:53,240 Speaker 4: This has headed. Don't have to see Lisa next please. 684 00:34:53,320 --> 00:34:55,839 Speaker 9: Okay, I'm about to do for a Costco run and 685 00:34:55,920 --> 00:34:58,160 Speaker 9: I have to prepare the budget because usually drop about 686 00:34:58,160 --> 00:34:59,200 Speaker 9: five hundred dollars. 687 00:34:58,920 --> 00:34:59,719 Speaker 5: Every time you go. 688 00:35:00,200 --> 00:35:01,640 Speaker 4: She's got full freezers. 689 00:35:01,680 --> 00:35:02,719 Speaker 5: I see, Yeah, she. 690 00:35:04,520 --> 00:35:10,840 Speaker 4: Turns your freezers on in the garage yeast. But here's 691 00:35:10,840 --> 00:35:11,359 Speaker 4: why I thought. 692 00:35:11,400 --> 00:35:14,000 Speaker 9: That's why I thought this story was interesting. Okay, it's 693 00:35:14,080 --> 00:35:17,759 Speaker 9: on the terminal sources telling Blue Werk that Target is 694 00:35:17,800 --> 00:35:20,920 Speaker 9: looking into the sale of more products in larger quantity. 695 00:35:21,040 --> 00:35:23,799 Speaker 9: So they want to start doing the bulk items on 696 00:35:23,840 --> 00:35:26,160 Speaker 9: their website because I say, it's going to provide greater 697 00:35:26,239 --> 00:35:29,600 Speaker 9: value like coffee and snacks and things like that, because 698 00:35:29,640 --> 00:35:33,040 Speaker 9: they want to compete with Costco but also Walmart. But 699 00:35:33,200 --> 00:35:36,160 Speaker 9: so you can get the bulk without the you're staring 700 00:35:36,120 --> 00:35:37,239 Speaker 9: at home. 701 00:35:37,000 --> 00:35:41,160 Speaker 2: And regret that you bought paper plates for two thoy 702 00:35:41,400 --> 00:35:44,319 Speaker 2: thirty When you're by ball, do you stare at it 703 00:35:44,400 --> 00:35:46,000 Speaker 2: and go that was dumb? No. 704 00:35:46,160 --> 00:35:48,000 Speaker 9: The only time I do is produce when it goes 705 00:35:48,040 --> 00:35:49,600 Speaker 9: bad and I get really mad. 706 00:35:50,040 --> 00:35:52,760 Speaker 5: Costco have produce, they do, and they have great produce. 707 00:35:52,880 --> 00:35:54,879 Speaker 9: So yes, that's the only time I get mad. 708 00:35:55,480 --> 00:35:57,840 Speaker 2: Old foods is if you can get avocados they have 709 00:35:57,920 --> 00:36:01,520 Speaker 2: them star Yeah, if they have them, Yes, and aren't 710 00:36:01,600 --> 00:36:02,520 Speaker 2: riper overdone? 711 00:36:02,760 --> 00:36:06,600 Speaker 4: Costco's killing it. I mean, I mean on the shareholder returned, 712 00:36:06,640 --> 00:36:07,320 Speaker 4: it's amazing. 713 00:36:08,040 --> 00:36:11,279 Speaker 9: I'm telling you, I was onto something a long time ago. 714 00:36:11,840 --> 00:36:13,799 Speaker 5: Next, you got your tassel from the Gritty Palace. She's 715 00:36:13,840 --> 00:36:16,200 Speaker 5: going to get the gold membership card from Costco. 716 00:36:18,520 --> 00:36:20,560 Speaker 4: Sixteen dollars at night. Next. 717 00:36:20,560 --> 00:36:22,480 Speaker 9: All right, so we go from Target to the elite 718 00:36:22,480 --> 00:36:26,960 Speaker 9: world of private jets. Okay, so celebrities, business owners love them. 719 00:36:27,080 --> 00:36:29,880 Speaker 9: But you've always heard about the environmental impact, remember the 720 00:36:29,880 --> 00:36:32,319 Speaker 9: stories with the Super Bowl and all that. Okay, so 721 00:36:33,080 --> 00:36:36,000 Speaker 9: Washington Post, yes, Davos too. They pointed to this report 722 00:36:36,040 --> 00:36:39,520 Speaker 9: and highlights that globally, private jets admitted up to nineteen 723 00:36:39,520 --> 00:36:42,080 Speaker 9: and a half million metric tons of greenhouse gases in 724 00:36:42,120 --> 00:36:45,920 Speaker 9: twenty twenty three. And here's what's interesting. That year private 725 00:36:45,960 --> 00:36:48,880 Speaker 9: jets they polluted more than the total of all commercial 726 00:36:48,920 --> 00:36:52,759 Speaker 9: flights that were departing from London's Heathrow Airport. So that 727 00:36:53,000 --> 00:36:55,359 Speaker 9: is huge and the US is ranking high. 728 00:36:55,600 --> 00:36:56,840 Speaker 4: Yeah, as far as. 729 00:36:56,719 --> 00:36:59,279 Speaker 5: This here, that's an exercise more discretion in terms of 730 00:36:59,280 --> 00:37:00,920 Speaker 5: your use of the US. 731 00:37:01,000 --> 00:37:01,600 Speaker 4: You don't have it. 732 00:37:01,680 --> 00:37:04,359 Speaker 2: I went back and forth with Bramo last night, and 733 00:37:04,480 --> 00:37:06,360 Speaker 2: you know, we're looking at the Dessau but it's not 734 00:37:06,440 --> 00:37:07,840 Speaker 2: the one Taylor Swift has. 735 00:37:07,840 --> 00:37:10,520 Speaker 4: It's a cheaper one. Yeah, and we're staying with Golf. 736 00:37:10,360 --> 00:37:12,640 Speaker 5: Street We've always which I think is smart. 737 00:37:12,680 --> 00:37:15,120 Speaker 4: Yeah, yeah, we do. And we didn't. We didn't price up. 738 00:37:15,200 --> 00:37:17,120 Speaker 2: I said to Micah said, I'm just not getting the 739 00:37:17,200 --> 00:37:19,960 Speaker 2: G six and the and the answer is the engine 740 00:37:20,000 --> 00:37:21,120 Speaker 2: pollution is a big deal. 741 00:37:21,320 --> 00:37:21,759 Speaker 5: It is. 742 00:37:21,880 --> 00:37:25,360 Speaker 9: It is that to the wedding defense, you can't. 743 00:37:25,719 --> 00:37:27,400 Speaker 4: But Sweetey took the Sikorski. 744 00:37:28,200 --> 00:37:30,280 Speaker 5: He had to get out there fast and Janeec couldn't 745 00:37:30,280 --> 00:37:32,360 Speaker 5: get a seat. He had to take the taxi. 746 00:37:32,560 --> 00:37:36,360 Speaker 2: Lisa Mateo, the newspapers, thank you so much. 747 00:37:36,560 --> 00:37:41,400 Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify, 748 00:37:41,520 --> 00:37:45,319 Speaker 1: and anywhere else you get your podcasts. Listen live each 749 00:37:45,320 --> 00:37:49,160 Speaker 1: weekday seven to ten am Easter and on Bloomberg dot com, 750 00:37:49,320 --> 00:37:53,120 Speaker 1: the iHeartRadio app, tune in, and the Bloomberg Business app. 751 00:37:53,440 --> 00:37:56,520 Speaker 1: You can also watch us live every weekday on YouTube 752 00:37:56,840 --> 00:37:58,840 Speaker 1: and always on the Bloomberg Terminal