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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Paul Sweeney along

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Speaker 2: with Tom Keene. Join us each day for insight from

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Speaker 2: the best in economics, geopolitics, finance, and investment. You can

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Speaker 2: also watch the show live on YouTube. Visit the Bloomberg

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Speaker 2: Podcast channel on YouTube to see the show weekday mornings

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Speaker 2: from seven to ten Eastern Remarked Global headquarters in New

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Speaker 2: York City. Subscribe to the podcast on Apple, Spotify, or

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Speaker 2: anywhere else you listen, and as always on Bloomberg Radio,

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Speaker 2: the Bloomberg Terminal, and the Bloomberg Business app. Ken Leone

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Speaker 2: Research Director CFR joints us here Ken, what do you

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Speaker 2: make of the results from Mickey Mouse and Friends.

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Speaker 3: Great to be with you, and this was a good

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Speaker 3: block and Tackle quarter. It showed progression on the broader

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Speaker 3: financial metrics of reducing costs and getting to their target

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Speaker 3: this year of eight billion dollars of free cash flow.

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Speaker 3: So there's financial discipline at Disney. But of course, as

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Speaker 3: you've noted, there's a lot of moving parts, and ultimately

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Speaker 3: what investors would like to see is growth that can

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Speaker 3: get through this transition of linear networks. Declining, streaming businesses increasing,

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Speaker 3: but how profitable will they be?

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Speaker 4: How profitable do you think they're going to be?

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Speaker 3: It's going to take time. Streaming is a very competitive business.

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Speaker 3: Unlike other subscriber businesses of the past, like cable TV

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Speaker 3: or even wireless, you have very high churn. Disney at

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Speaker 3: least is discipline on the programming and content spending, which

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Speaker 3: has come down significantly and in many cases pivoting their

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Speaker 3: spend to sports from general entertainment. But I think the

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Speaker 3: jury is still out there, and what we didn't see

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Speaker 3: in the release today is yeah, the magic is there,

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Speaker 3: but what investors want to see is how is Disney

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Speaker 3: executing on a technology platform not just US or Global?

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Speaker 3: Is there an AI component to their technology plans? And

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Speaker 3: you know what, Netflix is doing that and they're there.

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Speaker 3: So if you're going to be great at streaming, you

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Speaker 3: have to be like Netflix.

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Speaker 2: Ken, I guess you know, one of the challenges for

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Speaker 2: the Walt Disney Company and pretty much most of the

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Speaker 2: traditional media companies is just kind of that linear TV

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Speaker 2: broadcast cable television business. And Disney reported, you know, weaker

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Speaker 2: result sales fell about eight percent in the quarter. How

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Speaker 2: do you think these traditional media companies kind of manage

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Speaker 2: the longer term decline of those businesses.

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Speaker 3: So what we're seeing, and it's a great question. And

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Speaker 3: if we were all in business class, this would be

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Speaker 3: a classic where you have a mature to declining business

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Speaker 3: but it's still throwing off lots of cash trying to

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Speaker 3: reinvest that and new growing businesses that hopefully have good

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Speaker 3: business models. And I think what we're seeing is because

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Speaker 3: of digitalization of advertising, that shift problem linear or legacy

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Speaker 3: networks broadcasts to streaming is happening much faster. So that's

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Speaker 3: a problem.

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Speaker 4: You know, Paul, you are recovering media investment banker, right,

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Speaker 4: I mean I've heard about the death of linear forever. Yeah,

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Speaker 4: So I mean, what do you think makes this time different?

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Speaker 4: When you look at the outset?

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Speaker 2: What makes this time different is simply the revenue stream

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Speaker 2: which really supported television for the last thirty forty years

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Speaker 2: was subscribers from cable television and satellite TV, and that

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Speaker 2: subscription revenue offset to decline in advertising revenue as advertising

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Speaker 2: revenue went to different places, first cable and then did digital.

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Speaker 2: Now that subscriber revenue is going away because of the

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Speaker 2: cord cutting. So now you really have nothing to lean against,

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Speaker 2: and that's what I guess most of the media companies

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Speaker 2: are kind of dealing with with their linear networks. So, Ken,

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Speaker 2: I mean, if you're the Walt Disney company here, one

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Speaker 2: of the things is the studio. I mean, the Walt

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Speaker 2: Disney Film studio dominated Hollywood for the last fifteen twenty

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Speaker 2: years thanks to the Star Wars and the marvel and

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Speaker 2: all the Pixars and all that kind of stuff. The

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Speaker 2: studio kind of stumbled over the last four or five

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Speaker 2: years and maybe people are getting a little bit tired

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Speaker 2: of some of the titles in the franchises.

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Speaker 4: What do you need to be good?

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Speaker 1: I'll go see it, just be good exactly. Okay, well,

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Speaker 1: there you go. So what do you think the strategy

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Speaker 1: is there?

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Speaker 3: Ken, So we need to say better performance not only

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Speaker 3: from Disney, but also the industry. And really, when you

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Speaker 3: look at global box office X China, it's running twenty

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Speaker 3: twenty five percent below where we were pre pandemic levels. Additionally,

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Speaker 3: when you look at movies, you always go to the sequels,

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Speaker 3: the ones that can break in large audiences, but sometimes

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Speaker 3: they're flops and they're very costly. So I think theatrical

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Speaker 3: which for Disney feeds not only into film, but it

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Speaker 3: feeds into the genre of their parks.

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Speaker 5: You know, it's a big deal.

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Speaker 3: And I think when we look at what Bob Iger

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Speaker 3: wants to do there, he has talented people now now

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Speaker 3: running those businesses. But even if you've got a big hit,

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Speaker 3: you know, you look at paramount with top Gun Maverick

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Speaker 3: over a year ago, it has not that much impact

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Speaker 3: on the stock or what analysts think in terms of

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Speaker 3: the fundamental outlook of a company. So it's important, but

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Speaker 3: you know, it's kind of stirs the pot, but it's

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Speaker 3: really you know, let's not forget we haven't had a

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Speaker 3: conversation today why where many investors are in Disney is

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Speaker 3: for experience or for the parks and having these durable

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Speaker 3: businesses where they have less competition versus some of the

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Speaker 3: problems they have in entertainment, whether it be filmed or

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Speaker 3: be streaming. So let's not forget about the parks because

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Speaker 3: that's really the core of their stability.

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Speaker 4: I mean, let's be honest, guys, Maverick had an issue

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Speaker 4: because Barbie. I mean, that's what really happened. Barbie trumps

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Speaker 4: Tom Cruise. Let's call it, as you mentioned something earlier,

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Speaker 4: and I wonder how that's going to tie into the

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Speaker 4: parks experience. But also you mentioned in terms of streaming,

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Speaker 4: and that's the AI component. How would AI help Disney

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Speaker 4: do all the things you just said?

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Speaker 3: There is incredible work that I'm sure Disney is doing

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Speaker 3: to be competitive and on part too great companies, whether

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Speaker 3: they be Amazon, Meta, Google, or Netflix. So it's an

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Speaker 3: enormous effort on the technology side to have intelligence for personalization,

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Speaker 3: and I think AI will play a role in personalization

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Speaker 3: of subscriber viewership, but they can't tell that message because

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Speaker 3: they're playing multi year catch up to the companies I've mentioned.

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Speaker 3: So it's a big deal right now. It's a competitive

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Speaker 3: weakness for the traditional entertainment companies. You have to remember

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Speaker 3: Netflix has been at this for well over ten fifteen years,

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Speaker 3: and of course the names like Amazon with AWS, they're

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Speaker 3: in the lynch pin with AI. So that will get

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Speaker 3: the stock up more than it's interesting. In my earnings note,

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Speaker 3: I said maybe we'll get a profitability in streaming this

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Speaker 3: quarter instead of the fourth quarter. We did, but it

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Speaker 3: was small, so you know, we have to see what's

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Speaker 3: next for Disney and coming quarters.

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Speaker 1: All right, Ken, Thanks so much for joining us.

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Speaker 2: Really appreciate that as always, Ken Leam, he's a director

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Speaker 2: of research at c f r A Research.

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Speaker 1: We appreciate it.

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Speaker 2: Let's check in over our next guest here, Steve Iceman,

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Speaker 2: senior portfolio manager at Newburger Berman.

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Speaker 1: All right, I'm.

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Speaker 2: Looking at I guess Steve, you're on the Odd Lots

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Speaker 2: podcast recently and you said that you are bullish on

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Speaker 2: stocks that gain from artificial intelligence power needs.

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Speaker 1: What does that mean?

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Speaker 5: Well, good question, Thank you.

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Speaker 1: I'm front running Alex because Alex is our energy.

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Speaker 5: The current the current GPUs use about three times more

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Speaker 5: electricity than your typical CPU. So the grid in the

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Speaker 5: United States has been under pressure now for years. You know,

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Speaker 5: utilities keep increasing their cap bax budgets, and now you've

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Speaker 5: put an entire new pressure on the on the grid.

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Speaker 5: So whatever money is being spent on the grid is

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Speaker 5: going to keep going up, probably for the next ten years.

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Speaker 5: So just to give you just one stock for example,

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Speaker 5: you know, when utilities announce that they're increasing their cap

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Speaker 5: bax budgets, utilities don't actually do anything. You know. What

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Speaker 5: they do is they send you electricity and send you

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Speaker 5: a build. But in terms of construction, that's sun by

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Speaker 5: a company called Quanta, which is the largest engineering construction

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Speaker 5: company for utilities. So the only thing I would tell

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Speaker 5: you is that every time the CEO gets on the

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Speaker 5: quarterly conference call, he just looks happier.

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Speaker 4: That's fair. Yes, if you demand's gonna.

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Speaker 5: Growup by it has no to do with himself. He

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Speaker 5: can't satisfy all of the demands. So that's just just

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Speaker 5: one example. But there are other companies that benefit as well.

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Speaker 5: But that I look, I think there are three major

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Speaker 5: themes of our time, AI, infrastructure, and crypto, and I

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Speaker 5: believe in the first two and I don't believe in

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Speaker 5: the third.

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Speaker 4: So just for framing here, I mean, you really made

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Speaker 4: your name through the housing crisis and betting against housing

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Speaker 4: dead back in two thousand and eight. You're portrayed in

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Speaker 4: the Big short film by Steve Carelling.

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Speaker 5: You had to bring that up, but okay.

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Speaker 4: I did, But just to give context, if our viewers

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Speaker 4: or listeners don't know, like you have a history of betting,

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Speaker 4: having contrarian bets that pay off big time. Yes, what

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Speaker 4: would be that contrarian bet? Out of the three things

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Speaker 4: you just said, what's that big contrarian bet?

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Speaker 5: I don't have a contrarian bet here. I mean I

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Speaker 5: don't like crypto.

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Speaker 4: I like in crypto feels contrarian.

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Speaker 5: Well, it's contrarian, and that says that I don't believe

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Speaker 5: in it. I think the whole thesis behind it is wrong.

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Speaker 5: But you know, shortening a cult when there's no when

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Speaker 5: there's no data to prove that it's wrong, because a

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Speaker 5: death wish, you know. So what do I mean by that?

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Speaker 5: So when you when I bet against subprime mortgages, every

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Speaker 5: month securitizations produce data. They give every single credit quality

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Speaker 5: data possible, so every month you could check it.

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Speaker 4: You could look at it.

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Speaker 5: Every month you looked at the fact and that and

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Speaker 5: that fact credit quality was the major determinant of the

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Speaker 5: value of subprime mortgage paper. So you had a data

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Speaker 5: point every month, a massive data dump. Crypto trades on ether.

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Speaker 5: You know what is a trade The thesis that crypto

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Speaker 5: of crypto is that it's a hedge against fear currency,

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Speaker 5: so it's like digital gold. But it doesn't trade like that.

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Speaker 5: It trades in perfect correlation with NASDAC, so it trades

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Speaker 5: against its own thesis. So what data point is there

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Speaker 5: to show that crypto is wrong. I mean, if the

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Speaker 5: deficit came down, it's not relevant because that's not how

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Speaker 5: it trades anyway. So there's nothing to do. What's your

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Speaker 5: macro call here?

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Speaker 2: I mean, there's a lot of folks in the marketplace saying,

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Speaker 2: you know, this Federal Reserve is going to cut rates

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Speaker 2: in twenty twenty four, maybe not as many times as

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Speaker 2: we originally thought, maybe not as much as we originally thought,

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Speaker 2: but that this economy is in good shape, but still

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Speaker 2: there might be some rate cuts here.

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Speaker 1: Is that kind of the backdrop that's for you? Or

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Speaker 1: how do you think about it?

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Speaker 5: I mean, the why I think about it is that

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Speaker 5: Powell is a dove. He has always been a dove.

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Speaker 5: Raising rates was completely against his nature. He wants to

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Speaker 5: cut rates because he always wants to cut rates. The

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Speaker 5: data is not completely in his favor. So maybe they

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Speaker 5: cut once. Do I think they should cut it all?

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Speaker 5: I would personally, I would wait, but trust me, nobody

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Speaker 5: consults me.

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Speaker 4: No one consults us either. It's very fair.

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Speaker 5: So I think they'll probably cut once. It's my guess.

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Speaker 4: So does that affect so the thesis that you have,

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Speaker 4: like at the infrastructure, the power demand and AI general

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Speaker 4: and AI in general, does what the Fed does.

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Speaker 5: It's irrelevant, irrelevant.

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Speaker 4: Does it change how you play those themes or of timing?

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Speaker 5: Okay, I mean this is how what I think credit

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Speaker 5: quality in the United States is fine other than office

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Speaker 5: real estate, and office real estate is not big enough

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Speaker 5: to sink the economy. It's a problem. It's a regional problem.

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Speaker 5: It's a regional bank problem. It's some investors problem. If

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Speaker 5: consumers not over levered, the housing market is not in fuego,

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Speaker 5: there's a shortage of housing. So all the all the

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Speaker 5: and the financial system of the United States has never

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Speaker 5: been this healthy in anyone's lifetime period. So all the

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Speaker 5: things that existed prior to two thousand and eight don't

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Speaker 5: exist today. You have a very dynamic economy with some

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Speaker 5: very very powerful themes. The Fed cutting or not cutting

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Speaker 5: rate makes headlines for a couple of days. But when

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Speaker 5: you think about it, if the FED cuts rates once

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Speaker 5: or twice or no, no times, I mean the end

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Speaker 5: of the day, who cares. It's it's it's the minimis

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Speaker 5: it's not. I mean the Fed raising rates five hundred

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Speaker 5: bases points Yep, that got that got everybody's attention. The

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Speaker 5: FED cutting rates twenty five basis points or fifty basis

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Speaker 5: points and then stopping like like everybody get a life.

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Speaker 1: Right, all right?

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Speaker 2: In terms of getting a life on AI, a lot

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Speaker 2: of well, I'll just speak for myself. I'm trying to

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Speaker 2: figure out how much of this AI stuff and I'm

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Speaker 2: putting in air quotes here for our listeners. Is incremental

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Speaker 2: tech spending or is it just taking some money from

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Speaker 2: it or other tech budgets and putting it to.

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Speaker 5: It depends on which subsector talking. Okay, So if you're

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Speaker 5: talking about the semiconductor sector, where it's video or a

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Speaker 5: m D, it's it's massively incremental, you know. If you're

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Speaker 5: talking about overall tech spending at this point, not clear.

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Speaker 5: What's what is pretty clear is that companies like some

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Speaker 5: of the IT consulting companies have no revenue growth because

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Speaker 5: it's taking Peter to PayPal. So and software unclear, So

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Speaker 5: it's it's only very clear in hardware.

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Speaker 4: Let's overlay the presidential election with these thesis.

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Speaker 5: The thesis.

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Speaker 4: Thesis is plural and okay, it's important. I took Latin

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Speaker 4: from the.

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Speaker 5: CS, but this is a thes THECS.

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Speaker 4: Okay, So what is your prediction for the election, and

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Speaker 4: how does that impact because a lot of what you're

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Speaker 4: talking about is driven by fiscal policy.

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Speaker 5: Okay, so let's let's backtrack for a second. So, first

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Speaker 5: of all, caveat whatever I'm about to say. I am

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Speaker 5: not speaking for Newburger Barman. I'm speaking just for myself

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Speaker 5: because I don't want to get into trouble. So it's

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Speaker 5: May seventh, We're how many months? Five months? Six months

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Speaker 5: from the election, very f and as far as I'm concerned,

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Speaker 5: the election is baked. It's done, which is and Trump's

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Speaker 5: gonna win, and I think he'll win every single swing state,

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Speaker 5: and this is how it's going to play. So at

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Speaker 5: this point, the protesters and what I'm about to say

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Speaker 5: has nothing to do with who I'm going to vote for,

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Speaker 5: what my predilections are. This is just pure analysis. The

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Speaker 5: protesters on the college campuses have rapidly become the face

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Speaker 5: of the Democratic Party, not completely, but that will be

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Speaker 5: solidified because I am one hundred percent sure that in

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Speaker 5: August at the Democratic Convention in Chicago, Irony, when you

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Speaker 5: think about nineteen sixty eight, they will all be protesting

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Speaker 5: there and they'll be screaming and yelling, and they'll be

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Speaker 5: screaming and yelling a lot of things that are anti American,

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Speaker 5: and the country is going to be appolled, and at

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Speaker 5: that point it will be very very clear that Trump

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Speaker 5: will win. But as far as I'm concerned, this reminds

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Speaker 5: me a little bit of August two thousand and seven.

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Speaker 5: If you look back at the financial crisis, the crisis

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Speaker 5: took place in the fall of eight, but in August

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Speaker 5: of seven, subprime paper had collapsed. The crisis was baked

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Speaker 5: in August of seven. The rest was just an inevitable play.

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Speaker 5: So I kind of feel about like that about the

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Speaker 5: presidential lecture right now. It's baked, but the only people

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Speaker 5: who don't know the voters.

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Speaker 2: All right, We'll see how that plays out in the

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Speaker 2: market life. Steve Iisman, thank you so much for joining.

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Speaker 2: Steve Heisman is a senior portfolio manager at Newburger Berman.

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Speaker 1: Joining us live here in our.

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Speaker 2: Bloomberg Interactive Brokers studio. Let's see where this economy is

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Speaker 2: going here. Francis Donald's going to help us out with that.

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Speaker 2: Chief econmerce at Manual Life Investment Management. Francis, thanks so

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Speaker 2: much for joining us here. I know I'm not really

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Speaker 2: sure where the market is here in terms of this

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Speaker 2: Federal reserve for a while there, we started out with

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Speaker 2: a lot of cuts factored into the market, then fewer

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Speaker 2: and fewer and fewer, and then there's even talk of

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Speaker 2: a rate hike. Maybe that seems to be off the

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Speaker 2: table here. I'd love to get a sense of how

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Speaker 2: you folks at Manual Life are thinking about our feder

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Speaker 2: reserve and kind of how they're thinking about this economy.

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Speaker 6: You mentioned two words earlier. We have two words too.

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Speaker 6: FED cuts are gonna come later, but then much faster

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Speaker 6: than this market has been pricing in now. We've already

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Speaker 6: been seeing that later to a certain extent. And let's

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Speaker 6: just simply because we do expect the labor market in

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Speaker 6: particular to decline, we do expect inflation to decline. But

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Speaker 6: we have a few more months before the data we'll

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Speaker 6: give the FED permission to begin this easing cycle. What

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Speaker 6: we haven't bought into is that this would be like

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Speaker 6: a two or three or done situation, that these would

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Speaker 6: be insurance cuts. We believe we are heading into a

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Speaker 6: proper downturn that will require a proper easing cycle, and frankly,

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Speaker 6: that call is this just you know, some insurance cuts

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Speaker 6: on the margin or are we going to see a

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Speaker 6: average historical easing cycle is far more important than do

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Speaker 6: they go in June, September, or even December in our.

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Speaker 4: View, So your two words are later and faster. Basically,

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Speaker 4: what gives you the confidence that we will see a

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Speaker 4: material downturn.

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Speaker 6: Leading economic indicators, So just about everything in the labor

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Speaker 6: market that explains where we are in the labor cycle

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Speaker 6: is pointing to a deterioration. Now, we're not calling for

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Speaker 6: the end of the world. We're not saying it's a

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Speaker 6: big crisis, calling for two quarters of negative GDP. Q

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Speaker 6: three and Q four could be Q four and Q one.

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Speaker 6: Well know, as we get closer to it, we've got

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Speaker 6: business Employment Development data, nine million companies telling us there

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Speaker 6: were job losses last year. Household employment has been flat,

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Speaker 6: Temporary employment really good, leading indicator flashing recessions. Average weekly

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Speaker 6: hours worked in the economy, just how many hours are

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Speaker 6: people working comes back to pre COVID levels. Quit rates

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Speaker 6: are dropping. Surveys from PMIS to small businesses say we're

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Speaker 6: just not hiring as much anymore. I mean, I tell

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Speaker 6: my team, you know, we've been calling for a recession

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Speaker 6: for a while. It's been later than we expected. But

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Speaker 6: I say, every day, come in to work, look at

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Speaker 6: the data, and just ignore your past call. What does

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Speaker 6: it tell you? Tells you re late cycle, and the

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Speaker 6: odds of a downturn are much higher than the odds

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Speaker 6: of a reacceleration.

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Speaker 2: From this point, we're hearing a similar type of commentary

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Speaker 2: coming out of the Walt Disney Company. I'm reading the

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Speaker 2: research react from Bloomberg Intelligence Keith wrong Anathen Disney commentary

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Speaker 2: on a normalization of demand that the theme parks will

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Speaker 2: weigh on sentiment. Even after the segment posted a solid

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Speaker 2: twelve percent operating income in fiscal Q two, guidance for

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Speaker 2: the parks in Q three is weak with no growth,

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Speaker 2: suggesting for your estimates might be at risk.

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Speaker 1: So there's an.

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Speaker 2: Example, Francis of you know, at data point suggesting maybe

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Speaker 2: the consumer's strength is kind of waning. Here is that

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Speaker 2: where you think you might see it from the consumer

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Speaker 2: per se, you're likely.

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Speaker 6: To see it across businesses and consumers, because that's how

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Speaker 6: raid hikes work. The average time between the first rate

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Speaker 6: hike and its impact on businesses and consumers is two years,

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Speaker 6: so we're not exiting the period in which rate hikes

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Speaker 6: become really impactful in the economy. We are entering that period.

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Speaker 6: The mistake was in thinking that we'd see the impact

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Speaker 6: earlier because of how fast and intense the rate hikes came.

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Speaker 6: We're just entering that period. This is old fashioned economics.

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Speaker 6: When money costs more to borrow, you borrow less of

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Speaker 6: it and you invest less of it. Consumers can borrow less,

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Speaker 6: they can spend less. Now we'll say there's a really

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Speaker 6: important component here, which is that we are seeing a

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Speaker 6: big bifurcation amongst both businesses and consumers. The spread between

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Speaker 6: CEO confidence and small business confidence largest that we've seen

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Speaker 6: in this data history. And for consumers, high income consumers

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Speaker 6: they feel everything is fine. Why because they're benefiting from

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Speaker 6: higher rates and a good stock market. Low end consumers

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Speaker 6: telling a different story. So I love a good quality

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Speaker 6: stock picker, even as a macro strategist. In this type

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Speaker 6: of environment, it's going to be a little bit trickier

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Speaker 6: than just looking at the aggregate. There's some elements underneath

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Speaker 6: the surface that are telling slightly different stories.

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Speaker 4: Well, I think that's such an interesting point too, especially

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Speaker 4: as the high income consumers also have those low mortgage

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Speaker 4: rates right, so they're also benefiting from that lower end

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Speaker 4: consumers may not be owners at all. So I guess

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Speaker 4: my question is, and this where it kind of ties

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Speaker 4: to Disney also, is this a real retrenchment or just

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Speaker 4: we had so much spending, we had so much safe

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Speaker 4: theme park attendants. If we use Disney as the example

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Speaker 4: and we're just moving off that high level, is there

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Speaker 4: a distinction to be made?

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Speaker 6: So I love this question. Are we just heading towards

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Speaker 6: a normalization? Is effectively what I think about. If you

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Speaker 6: look at the year over year charts, most of them

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Speaker 6: signal this is a really strong contraction. Things like the

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Speaker 6: Sam rule or a lot of things showing the unemployment

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Speaker 6: rate is ten percent higher. Does that work when we've

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Speaker 6: just come off of really low bases or really high highs.

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Speaker 6: I'm a second derivative gal. I gotta say most of

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Speaker 6: the time, momentum in year over year is the powerful indicator.

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Speaker 6: But there is a chance that we are simply normalizing

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Speaker 6: down for regular levels. And this is why we're not

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Speaker 6: calling for a huge crisis. We're just saying that your

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Speaker 6: GDP can be negative for two consecutive quarters, and the

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Speaker 6: FED may want to begin an easing cycle in response

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Speaker 6: to it. But this is a post COVID completely no

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Speaker 6: precedent type of economy, and so I think there's a

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Speaker 6: fraction of this that has to be old fashioned economics

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Speaker 6: and what are standard relationships? And then we have to

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Speaker 6: overlay the more subjective what could be different this time?

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Speaker 6: You need a little bit of that science, a little

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Speaker 6: bit of that art.

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Speaker 1: Francis, what do you think about the labor market here?

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Speaker 5: Again?

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Speaker 2: It seems to be so resilient for so long here.

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Speaker 2: Are you concerned that there may be some cracksness labor

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Speaker 2: market or do you think this economy can continue to

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Speaker 2: support a maybe a sub four percent unemployment rate.

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Speaker 6: We're pretty close to four. We'd have to stay at

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Speaker 6: three point nine percent now through the rest of the year.

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Speaker 6: WHI seems a little tricky. So I think again, you

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Speaker 6: have some old fashioned components here. If you look at

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Speaker 6: temporary employment average, weekly quit rates, hiring rates, even conference

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Speaker 6: board confidence data on jobs hard to find minus plentiful.

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Speaker 6: Check the service employment index under the services PMI, that's

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Speaker 6: deteriory to levels that we've only really seen in really

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Speaker 6: serious recessions. These are not signaling that the employment is

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Speaker 6: going to get better, they're signaling a further deterioration. At

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Speaker 6: the same time, we have a very pronounced labor shortage.

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Speaker 6: We are in an environment where businesses it was a

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Speaker 6: heck of a hard time to hire people. In the

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Speaker 6: past few years. They've said, if it's only a short

437
00:23:29,480 --> 00:23:31,720
Speaker 6: term receession, we're going to hold on as long as possible.

438
00:23:32,200 --> 00:23:34,080
Speaker 6: So I think you have a mix of Yes, things

439
00:23:34,119 --> 00:23:35,480
Speaker 6: are going to get worse. Are they going to be

440
00:23:35,480 --> 00:23:38,760
Speaker 6: a really standard massive deterioration. I don't think so. You

441
00:23:38,840 --> 00:23:41,360
Speaker 6: got to overlay that structural post COVID economy as well.

442
00:23:41,720 --> 00:23:43,840
Speaker 2: Francis, thank you so much for joining us again. We

443
00:23:43,880 --> 00:23:47,000
Speaker 2: always appreciate getting your thoughts and commentary. Francis Donald, Chief

444
00:23:47,000 --> 00:23:49,320
Speaker 2: Economists and Manual Life Investment management.

445
00:24:00,040 --> 00:24:00,280
Speaker 5: Folks.

446
00:24:00,320 --> 00:24:02,560
Speaker 2: Your daily look at the front pages around the world,

447
00:24:02,680 --> 00:24:06,800
Speaker 2: mister John Tucker. Newspapers A lot of them out there, Not.

448
00:24:06,760 --> 00:24:08,400
Speaker 1: As many as there used to be, but a lot

449
00:24:08,400 --> 00:24:09,400
Speaker 1: of newspapers out there.

450
00:24:09,440 --> 00:24:12,360
Speaker 2: Although you go to a you go to an office

451
00:24:12,400 --> 00:24:14,639
Speaker 2: in London, let's say just you have a meeting in

452
00:24:14,680 --> 00:24:16,480
Speaker 2: an office on money. You go into the waiting room,

453
00:24:17,240 --> 00:24:19,639
Speaker 2: dozens of newspapers on the table.

454
00:24:19,960 --> 00:24:21,040
Speaker 1: There's it's still big.

455
00:24:20,840 --> 00:24:22,920
Speaker 7: In one it's an interest. You go down a city hall,

456
00:24:23,040 --> 00:24:26,080
Speaker 7: Room nine is the press press room, and outside is

457
00:24:26,119 --> 00:24:29,400
Speaker 7: a plaque of all the newspapers that have gone out

458
00:24:29,440 --> 00:24:32,960
Speaker 7: of business in New York City. It's it's a big list,

459
00:24:33,080 --> 00:24:33,960
Speaker 7: and it's kind of sad.

460
00:24:34,080 --> 00:24:35,080
Speaker 4: I don't know if you guys know that. But you

461
00:24:35,080 --> 00:24:36,720
Speaker 4: can also get papers on the interweb.

462
00:24:36,760 --> 00:24:39,359
Speaker 1: Now really, really, it's amazing.

463
00:24:39,440 --> 00:24:41,159
Speaker 2: I'm going to tell Caro Massa that she doesn't have

464
00:24:41,200 --> 00:24:44,320
Speaker 2: to print out every single piece of information that you

465
00:24:44,359 --> 00:24:45,640
Speaker 2: can have it like maybe on Ruth.

466
00:24:45,920 --> 00:24:49,840
Speaker 7: Okay, well let's start here. If from the Bloomberry cause morning,

467
00:24:50,000 --> 00:24:53,040
Speaker 7: if if you if you want to get somebody's attention

468
00:24:53,160 --> 00:24:54,640
Speaker 7: on Wall Street, what do you say?

469
00:24:56,760 --> 00:24:58,399
Speaker 1: Or everyone clicks on the Bloomberg terminal.

470
00:24:58,480 --> 00:25:02,000
Speaker 7: Oh I can imagine after after two pretty lackluster years,

471
00:25:02,560 --> 00:25:05,840
Speaker 7: they are set to jump, especially on desks that help

472
00:25:05,920 --> 00:25:09,920
Speaker 7: companies tap markets or trade their bonds. According to report

473
00:25:09,960 --> 00:25:14,280
Speaker 7: today from the compensation consultant Johnson Associates, bankers who underwrite

474
00:25:14,359 --> 00:25:18,240
Speaker 7: debts may see payouts swell as much as twenty five percent,

475
00:25:18,280 --> 00:25:22,119
Speaker 7: deals picking up this year. For bond traders. In equity underwriters,

476
00:25:22,119 --> 00:25:25,720
Speaker 7: the incentives may rise twenty percent. Alan Johnson is the

477
00:25:26,040 --> 00:25:29,440
Speaker 7: managing director of this firm. He says, in general, employees

478
00:25:29,760 --> 00:25:32,840
Speaker 7: in financial services should be pretty pleased.

479
00:25:33,600 --> 00:25:36,560
Speaker 2: This is way, way, way, way too early to be

480
00:25:36,560 --> 00:25:38,959
Speaker 2: even talking about bonuses. I've had managers come in when

481
00:25:38,960 --> 00:25:41,119
Speaker 2: I sit in my bonus meeting and we ripped it

482
00:25:41,200 --> 00:25:44,160
Speaker 2: the entire year. Some knucklehead lost a couple hundred million

483
00:25:44,200 --> 00:25:46,240
Speaker 2: dollars in like the last week of the year, and

484
00:25:46,280 --> 00:25:48,040
Speaker 2: that is the excuse. My boss is like, we're not

485
00:25:48,040 --> 00:25:48,680
Speaker 2: going to pay you.

486
00:25:48,720 --> 00:25:51,360
Speaker 1: Like what so, I mean, yeah.

487
00:25:51,280 --> 00:25:56,320
Speaker 7: See average cash bonus that declined two percent last year?

488
00:25:56,440 --> 00:25:59,160
Speaker 7: What was one hundred and seventy six five hundred dollars.

489
00:25:59,320 --> 00:26:01,000
Speaker 4: Maybe they're like, please don't go to a hedge fund

490
00:26:01,080 --> 00:26:02,520
Speaker 4: or something, right, Yeah.

491
00:26:02,320 --> 00:26:05,320
Speaker 7: But it's explain to everybody you live on your bonus.

492
00:26:05,560 --> 00:26:06,560
Speaker 1: You used to, it used to.

493
00:26:06,880 --> 00:26:08,720
Speaker 2: I mean back in my day it was ninety to

494
00:26:08,760 --> 00:26:12,159
Speaker 2: ninety five percent. My annual compensation was my bonus. That's

495
00:26:12,320 --> 00:26:15,360
Speaker 2: changed now they make it much more your salary versus

496
00:26:15,440 --> 00:26:17,640
Speaker 2: your bonus, but still the bonus is material.

497
00:26:17,720 --> 00:26:22,320
Speaker 4: Ninety nine percent was your bonus. Yes, yeah, holy mollypaans yep.

498
00:26:22,200 --> 00:26:24,200
Speaker 7: All right, let's do this one from the wall Street

499
00:26:24,280 --> 00:26:27,520
Speaker 7: Journal kind of skipping around here. Men happier at work

500
00:26:27,680 --> 00:26:31,199
Speaker 7: than women. That's how they feel overall about their jobs.

501
00:26:31,240 --> 00:26:33,879
Speaker 7: Most workers are positive. You dig deeper, though, you find

502
00:26:34,160 --> 00:26:36,439
Speaker 7: about sixty five percent of men say they're happy with

503
00:26:36,480 --> 00:26:40,120
Speaker 7: their jumps compared to sixty percent of women. The largest

504
00:26:40,119 --> 00:26:44,560
Speaker 7: gaps and satisfaction between men and women related to financial benefits.

505
00:26:45,200 --> 00:26:49,239
Speaker 7: Despite many companies introducing more family friendly policies such as

506
00:26:49,320 --> 00:26:52,800
Speaker 7: daycare at work mental health services, the women surveyed were

507
00:26:52,840 --> 00:26:55,360
Speaker 7: less satisfied with their jobs than men for the sixth

508
00:26:55,480 --> 00:26:58,639
Speaker 7: year in a row. Women in particular might sense a

509
00:26:58,720 --> 00:27:02,560
Speaker 7: more profound loss of remote work benefits as employers continue

510
00:27:02,600 --> 00:27:04,919
Speaker 7: to push for their employees to show up more. And

511
00:27:04,960 --> 00:27:07,720
Speaker 7: of course I'm gonna harp on this because I always do.

512
00:27:07,880 --> 00:27:12,680
Speaker 7: Child care for moms is especially especially tough, and when

513
00:27:12,680 --> 00:27:16,200
Speaker 7: you're a single mom, it can be like devastating, right.

514
00:27:16,080 --> 00:27:17,560
Speaker 1: And we know, I'm shocked.

515
00:27:17,560 --> 00:27:18,840
Speaker 4: I'm shocked by this survey.

516
00:27:19,040 --> 00:27:22,400
Speaker 7: Well, I think I think a lot of people at

517
00:27:22,400 --> 00:27:25,040
Speaker 7: the top might be shocked or maybe on informed.

518
00:27:25,080 --> 00:27:28,080
Speaker 4: Really you should talk to people and they wouldn't be

519
00:27:28,119 --> 00:27:28,640
Speaker 4: so shocking.

520
00:27:28,680 --> 00:27:30,720
Speaker 2: I mean, I remember, you know, when Matt Miller came

521
00:27:30,760 --> 00:27:35,000
Speaker 2: back from Germany for Bloomer, he worked and he was

522
00:27:35,240 --> 00:27:37,800
Speaker 2: again kind of it just shocked and to come back

523
00:27:37,840 --> 00:27:40,359
Speaker 2: here and to say, oh, in Germany we had just

524
00:27:40,440 --> 00:27:43,320
Speaker 2: wonderful health care is free of chargela. Now he's paying

525
00:27:43,320 --> 00:27:47,080
Speaker 2: a jillion dollars and his daughter is in like the

526
00:27:47,119 --> 00:27:49,840
Speaker 2: basement of some church in Westchester, you know, paying a

527
00:27:49,880 --> 00:27:50,720
Speaker 2: million dollars.

528
00:27:51,440 --> 00:27:52,800
Speaker 7: And that's that's a good slot.

529
00:27:53,000 --> 00:27:54,920
Speaker 1: Yeah, that's a good slot. And that's a good slot

530
00:27:54,960 --> 00:27:56,800
Speaker 1: for a good slot. Yes, so very tough.

531
00:27:56,960 --> 00:27:59,320
Speaker 7: All right, let's do this one. Also, Uh, what happened

532
00:27:59,359 --> 00:28:03,280
Speaker 7: to the tax crew. It's more governments are slapping fees

533
00:28:03,640 --> 00:28:07,159
Speaker 7: on electric vehicles. Reporting for Bloomberg this morning. You know,

534
00:28:07,200 --> 00:28:09,720
Speaker 7: we also thought governments were trying to encourage the use

535
00:28:09,720 --> 00:28:14,000
Speaker 7: of evs, but the shift away from combustion engines that

536
00:28:14,119 --> 00:28:16,640
Speaker 7: is actually leaving one hundred and ten billion dollars hole

537
00:28:16,640 --> 00:28:19,600
Speaker 7: in government revenues owing to a drop and receipts from

538
00:28:19,840 --> 00:28:22,560
Speaker 7: fuel taxes. So you'll have a lot of states and

539
00:28:22,640 --> 00:28:27,440
Speaker 7: governments across the world, among jurisdictions, introducing tax changes and

540
00:28:27,600 --> 00:28:32,000
Speaker 7: charges on evs and hybrid vehicles designed to raise funds

541
00:28:32,080 --> 00:28:36,920
Speaker 7: and compensate for the declines and gasoline and diesel excise.

542
00:28:36,600 --> 00:28:38,800
Speaker 4: Taxes, so to this point. Actually, I think there was

543
00:28:38,800 --> 00:28:40,720
Speaker 4: an article on the Ft yesterday that talked about in

544
00:28:40,760 --> 00:28:43,120
Speaker 4: Germany in particular, they're rolling back some of the substus

545
00:28:43,120 --> 00:28:45,680
Speaker 4: that they gave, not just for things like evs for example,

546
00:28:45,680 --> 00:28:49,000
Speaker 4: but like heat pumps and stuff like that. So consumers

547
00:28:49,000 --> 00:28:51,640
Speaker 4: spent a lot of money to then get a rebate,

548
00:28:51,680 --> 00:28:53,000
Speaker 4: and then all of a sudden the rebate goes away.

549
00:28:53,000 --> 00:28:54,320
Speaker 4: They don't know if they're going to get it or not.

550
00:28:54,360 --> 00:28:57,880
Speaker 4: They wouldn't have done it otherwise. It gets complicated, and

551
00:28:57,920 --> 00:29:00,200
Speaker 4: the idea that you're you know, the government will have

552
00:29:00,240 --> 00:29:02,800
Speaker 4: to spend money to make all this work, full stop period.

553
00:29:02,920 --> 00:29:03,120
Speaker 5: Yep.

554
00:29:03,640 --> 00:29:06,560
Speaker 7: And we'll conclude with this one from Bloomberg. Oh my gosh,

555
00:29:06,600 --> 00:29:12,000
Speaker 7: Oh my gosh. Taylor News. Apparently the Paris Olympics is

556
00:29:12,120 --> 00:29:15,640
Speaker 7: drawing luxury travel demand. But guess who is the bigger

557
00:29:15,720 --> 00:29:20,480
Speaker 7: draw this week? The Superstar playing four shows at led

558
00:29:20,520 --> 00:29:24,000
Speaker 7: Defense Arena. This is just outside the capitol, so kicks

559
00:29:24,000 --> 00:29:27,280
Speaker 7: off the aristour of the European part of it. Total

560
00:29:27,360 --> 00:29:31,400
Speaker 7: seating capacity forty thousand per show, So this event is

561
00:29:32,000 --> 00:29:34,000
Speaker 7: just a fraction of the size of the Olympic Games,

562
00:29:34,320 --> 00:29:38,040
Speaker 7: and yet the concert's drawing five times as many Americans

563
00:29:38,560 --> 00:29:42,480
Speaker 7: as the Paris Olympics. This according to the luxury travel

564
00:29:42,520 --> 00:29:46,800
Speaker 7: agency Embark Beyond. Bark's co founder, Jack Hasen tells us

565
00:29:46,800 --> 00:29:50,640
Speaker 7: that she's overshadowing the Olympics. That among the more than

566
00:29:50,680 --> 00:29:54,560
Speaker 7: two hundred Paris trips that his company has planned for swifties,

567
00:29:54,600 --> 00:29:58,520
Speaker 7: the average length three nights, clients usually staying at luxury hotels.

568
00:29:58,960 --> 00:30:01,840
Speaker 7: Around a third of groups of mother daughter pears want

569
00:30:01,880 --> 00:30:04,840
Speaker 7: to schedule shopping sprees around the concert.

570
00:30:05,200 --> 00:30:07,080
Speaker 4: I looked to us selling Tucker earlier. I looked into

571
00:30:07,080 --> 00:30:10,520
Speaker 4: this just for fun, and it would be cheaper to

572
00:30:10,560 --> 00:30:12,520
Speaker 4: go to like Sweden and see the concert, or even

573
00:30:12,600 --> 00:30:14,960
Speaker 4: Paris or the UK and see her concert than to

574
00:30:15,000 --> 00:30:17,640
Speaker 4: go to Miami. Yep, in terms of the ticket prices.

575
00:30:17,640 --> 00:30:18,200
Speaker 4: Just putting that up.

576
00:30:18,200 --> 00:30:20,280
Speaker 2: But I'll note over the weekend, who drew like a

577
00:30:20,280 --> 00:30:23,000
Speaker 2: gajillionah one fans down in Madonna?

578
00:30:23,000 --> 00:30:23,479
Speaker 1: Where was she?

579
00:30:24,320 --> 00:30:25,120
Speaker 4: Oh, Brazil.

580
00:30:26,680 --> 00:30:30,560
Speaker 2: That question, Yeah exactly, but I mean Madonna still, I

581
00:30:30,560 --> 00:30:33,440
Speaker 2: mean like hundreds of thousands of yeah, came to see

582
00:30:33,480 --> 00:30:36,840
Speaker 2: her concert down in real She's Madonna, she is, I

583
00:30:36,880 --> 00:30:38,800
Speaker 2: mean Madonna, all right, And I was John Tucker with

584
00:30:38,840 --> 00:30:42,280
Speaker 2: our newspaper segment. This is the Bloomberg Surveillance Podcast, bringing

585
00:30:42,320 --> 00:30:45,440
Speaker 2: you the best in economics, geopolitics, finance, and investment. You

586
00:30:45,480 --> 00:30:48,680
Speaker 2: can also watch the show live on YouTube. Visit the

587
00:30:48,720 --> 00:30:52,080
Speaker 2: Bloomberg Podcast channel on YouTube to see the show weekday

588
00:30:52,160 --> 00:30:54,880
Speaker 2: mornings from seven to ten Eastern from our global headquarters

589
00:30:54,880 --> 00:30:58,160
Speaker 2: at New York City. Subscribe to the podcast on Apple, Spotify,

590
00:30:58,320 --> 00:31:01,520
Speaker 2: or anywhere else you listen, and is always on Bloomberg Radio,

591
00:31:01,600 --> 00:31:03,720
Speaker 2: the Bloomberg Terminal, and the Bloomberg Business app.

592
00:31:11,120 --> 00:31:11,320
Speaker 1: Hmm