Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
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Speaker 2: the Bloomberg Terminal, and the Bloomberg Business app. Ken Leone
Speaker 2: Research Director CFR joints us here Ken, what do you
Speaker 2: make of the results from Mickey Mouse and Friends.
Speaker 3: Great to be with you, and this was a good
Speaker 3: block and Tackle quarter. It showed progression on the broader
Speaker 3: financial metrics of reducing costs and getting to their target
Speaker 3: this year of eight billion dollars of free cash flow.
Speaker 3: So there's financial discipline at Disney. But of course, as
Speaker 3: you've noted, there's a lot of moving parts, and ultimately
Speaker 3: what investors would like to see is growth that can
Speaker 3: get through this transition of linear networks. Declining, streaming businesses increasing,
Speaker 3: but how profitable will they be?
Speaker 4: How profitable do you think they're going to be?
Speaker 3: It's going to take time. Streaming is a very competitive business.
Speaker 3: Unlike other subscriber businesses of the past, like cable TV
Speaker 3: or even wireless, you have very high churn. Disney at
Speaker 3: least is discipline on the programming and content spending, which
Speaker 3: has come down significantly and in many cases pivoting their
Speaker 3: spend to sports from general entertainment. But I think the
Speaker 3: jury is still out there, and what we didn't see
Speaker 3: in the release today is yeah, the magic is there,
Speaker 3: but what investors want to see is how is Disney
Speaker 3: executing on a technology platform not just US or Global?
Speaker 3: Is there an AI component to their technology plans? And
Speaker 3: you know what, Netflix is doing that and they're there.
Speaker 3: So if you're going to be great at streaming, you
Speaker 3: have to be like Netflix.
Speaker 2: Ken, I guess you know, one of the challenges for
Speaker 2: the Walt Disney Company and pretty much most of the
Speaker 2: traditional media companies is just kind of that linear TV
Speaker 2: broadcast cable television business. And Disney reported, you know, weaker
Speaker 2: result sales fell about eight percent in the quarter. How
Speaker 2: do you think these traditional media companies kind of manage
Speaker 2: the longer term decline of those businesses.
Speaker 3: So what we're seeing, and it's a great question. And
Speaker 3: if we were all in business class, this would be
Speaker 3: a classic where you have a mature to declining business
Speaker 3: but it's still throwing off lots of cash trying to
Speaker 3: reinvest that and new growing businesses that hopefully have good
Speaker 3: business models. And I think what we're seeing is because
Speaker 3: of digitalization of advertising, that shift problem linear or legacy
Speaker 3: networks broadcasts to streaming is happening much faster. So that's
Speaker 3: a problem.
Speaker 4: You know, Paul, you are recovering media investment banker, right,
Speaker 4: I mean I've heard about the death of linear forever. Yeah,
Speaker 4: So I mean, what do you think makes this time different?
Speaker 4: When you look at the outset?
Speaker 2: What makes this time different is simply the revenue stream
Speaker 2: which really supported television for the last thirty forty years
Speaker 2: was subscribers from cable television and satellite TV, and that
Speaker 2: subscription revenue offset to decline in advertising revenue as advertising
Speaker 2: revenue went to different places, first cable and then did digital.
Speaker 2: Now that subscriber revenue is going away because of the
Speaker 2: cord cutting. So now you really have nothing to lean against,
Speaker 2: and that's what I guess most of the media companies
Speaker 2: are kind of dealing with with their linear networks. So, Ken,
Speaker 2: I mean, if you're the Walt Disney company here, one
Speaker 2: of the things is the studio. I mean, the Walt
Speaker 2: Disney Film studio dominated Hollywood for the last fifteen twenty
Speaker 2: years thanks to the Star Wars and the marvel and
Speaker 2: all the Pixars and all that kind of stuff. The
Speaker 2: studio kind of stumbled over the last four or five
Speaker 2: years and maybe people are getting a little bit tired
Speaker 2: of some of the titles in the franchises.
Speaker 4: What do you need to be good?
Speaker 1: I'll go see it, just be good exactly. Okay, well,
Speaker 1: there you go. So what do you think the strategy
Speaker 1: is there?
Speaker 3: Ken, So we need to say better performance not only
Speaker 3: from Disney, but also the industry. And really, when you
Speaker 3: look at global box office X China, it's running twenty
Speaker 3: twenty five percent below where we were pre pandemic levels. Additionally,
Speaker 3: when you look at movies, you always go to the sequels,
Speaker 3: the ones that can break in large audiences, but sometimes
Speaker 3: they're flops and they're very costly. So I think theatrical
Speaker 3: which for Disney feeds not only into film, but it
Speaker 3: feeds into the genre of their parks.
Speaker 5: You know, it's a big deal.
Speaker 3: And I think when we look at what Bob Iger
Speaker 3: wants to do there, he has talented people now now
Speaker 3: running those businesses. But even if you've got a big hit,
Speaker 3: you know, you look at paramount with top Gun Maverick
Speaker 3: over a year ago, it has not that much impact
Speaker 3: on the stock or what analysts think in terms of
Speaker 3: the fundamental outlook of a company. So it's important, but
Speaker 3: you know, it's kind of stirs the pot, but it's
Speaker 3: really you know, let's not forget we haven't had a
Speaker 3: conversation today why where many investors are in Disney is
Speaker 3: for experience or for the parks and having these durable
Speaker 3: businesses where they have less competition versus some of the
Speaker 3: problems they have in entertainment, whether it be filmed or
Speaker 3: be streaming. So let's not forget about the parks because
Speaker 3: that's really the core of their stability.
Speaker 4: I mean, let's be honest, guys, Maverick had an issue
Speaker 4: because Barbie. I mean, that's what really happened. Barbie trumps
Speaker 4: Tom Cruise. Let's call it, as you mentioned something earlier,
Speaker 4: and I wonder how that's going to tie into the
Speaker 4: parks experience. But also you mentioned in terms of streaming,
Speaker 4: and that's the AI component. How would AI help Disney
Speaker 4: do all the things you just said?
Speaker 3: There is incredible work that I'm sure Disney is doing
Speaker 3: to be competitive and on part too great companies, whether
Speaker 3: they be Amazon, Meta, Google, or Netflix. So it's an
Speaker 3: enormous effort on the technology side to have intelligence for personalization,
Speaker 3: and I think AI will play a role in personalization
Speaker 3: of subscriber viewership, but they can't tell that message because
Speaker 3: they're playing multi year catch up to the companies I've mentioned.
Speaker 3: So it's a big deal right now. It's a competitive
Speaker 3: weakness for the traditional entertainment companies. You have to remember
Speaker 3: Netflix has been at this for well over ten fifteen years,
Speaker 3: and of course the names like Amazon with AWS, they're
Speaker 3: in the lynch pin with AI. So that will get
Speaker 3: the stock up more than it's interesting. In my earnings note,
Speaker 3: I said maybe we'll get a profitability in streaming this
Speaker 3: quarter instead of the fourth quarter. We did, but it
Speaker 3: was small, so you know, we have to see what's
Speaker 3: next for Disney and coming quarters.
Speaker 1: All right, Ken, Thanks so much for joining us.
Speaker 2: Really appreciate that as always, Ken Leam, he's a director
Speaker 2: of research at c f r A Research.
Speaker 1: We appreciate it.
Speaker 2: Let's check in over our next guest here, Steve Iceman,
Speaker 2: senior portfolio manager at Newburger Berman.
Speaker 1: All right, I'm.
Speaker 2: Looking at I guess Steve, you're on the Odd Lots
Speaker 2: podcast recently and you said that you are bullish on
Speaker 2: stocks that gain from artificial intelligence power needs.
Speaker 1: What does that mean?
Speaker 5: Well, good question, Thank you.
Speaker 1: I'm front running Alex because Alex is our energy.
Speaker 5: The current the current GPUs use about three times more
Speaker 5: electricity than your typical CPU. So the grid in the
Speaker 5: United States has been under pressure now for years. You know,
Speaker 5: utilities keep increasing their cap bax budgets, and now you've
Speaker 5: put an entire new pressure on the on the grid.
Speaker 5: So whatever money is being spent on the grid is
Speaker 5: going to keep going up, probably for the next ten years.
Speaker 5: So just to give you just one stock for example,
Speaker 5: you know, when utilities announce that they're increasing their cap
Speaker 5: bax budgets, utilities don't actually do anything. You know. What
Speaker 5: they do is they send you electricity and send you
Speaker 5: a build. But in terms of construction, that's sun by
Speaker 5: a company called Quanta, which is the largest engineering construction
Speaker 5: company for utilities. So the only thing I would tell
Speaker 5: you is that every time the CEO gets on the
Speaker 5: quarterly conference call, he just looks happier.
Speaker 4: That's fair. Yes, if you demand's gonna.
Speaker 5: Growup by it has no to do with himself. He
Speaker 5: can't satisfy all of the demands. So that's just just
Speaker 5: one example. But there are other companies that benefit as well.
Speaker 5: But that I look, I think there are three major
Speaker 5: themes of our time, AI, infrastructure, and crypto, and I
Speaker 5: believe in the first two and I don't believe in
Speaker 5: the third.
Speaker 4: So just for framing here, I mean, you really made
Speaker 4: your name through the housing crisis and betting against housing
Speaker 4: dead back in two thousand and eight. You're portrayed in
Speaker 4: the Big short film by Steve Carelling.
Speaker 5: You had to bring that up, but okay.
Speaker 4: I did, But just to give context, if our viewers
Speaker 4: or listeners don't know, like you have a history of betting,
Speaker 4: having contrarian bets that pay off big time. Yes, what
Speaker 4: would be that contrarian bet? Out of the three things
Speaker 4: you just said, what's that big contrarian bet?
Speaker 5: I don't have a contrarian bet here. I mean I
Speaker 5: don't like crypto.
Speaker 4: I like in crypto feels contrarian.
Speaker 5: Well, it's contrarian, and that says that I don't believe
Speaker 5: in it. I think the whole thesis behind it is wrong.
Speaker 5: But you know, shortening a cult when there's no when
Speaker 5: there's no data to prove that it's wrong, because a
Speaker 5: death wish, you know. So what do I mean by that?
Speaker 5: So when you when I bet against subprime mortgages, every
Speaker 5: month securitizations produce data. They give every single credit quality
Speaker 5: data possible, so every month you could check it.
Speaker 4: You could look at it.
Speaker 5: Every month you looked at the fact and that and
Speaker 5: that fact credit quality was the major determinant of the
Speaker 5: value of subprime mortgage paper. So you had a data
Speaker 5: point every month, a massive data dump. Crypto trades on ether.
Speaker 5: You know what is a trade The thesis that crypto
Speaker 5: of crypto is that it's a hedge against fear currency,
Speaker 5: so it's like digital gold. But it doesn't trade like that.
Speaker 5: It trades in perfect correlation with NASDAC, so it trades
Speaker 5: against its own thesis. So what data point is there
Speaker 5: to show that crypto is wrong. I mean, if the
Speaker 5: deficit came down, it's not relevant because that's not how
Speaker 5: it trades anyway. So there's nothing to do. What's your
Speaker 5: macro call here?
Speaker 2: I mean, there's a lot of folks in the marketplace saying,
Speaker 2: you know, this Federal Reserve is going to cut rates
Speaker 2: in twenty twenty four, maybe not as many times as
Speaker 2: we originally thought, maybe not as much as we originally thought,
Speaker 2: but that this economy is in good shape, but still
Speaker 2: there might be some rate cuts here.
Speaker 1: Is that kind of the backdrop that's for you? Or
Speaker 1: how do you think about it?
Speaker 5: I mean, the why I think about it is that
Speaker 5: Powell is a dove. He has always been a dove.
Speaker 5: Raising rates was completely against his nature. He wants to
Speaker 5: cut rates because he always wants to cut rates. The
Speaker 5: data is not completely in his favor. So maybe they
Speaker 5: cut once. Do I think they should cut it all?
Speaker 5: I would personally, I would wait, but trust me, nobody
Speaker 5: consults me.
Speaker 4: No one consults us either. It's very fair.
Speaker 5: So I think they'll probably cut once. It's my guess.
Speaker 4: So does that affect so the thesis that you have,
Speaker 4: like at the infrastructure, the power demand and AI general
Speaker 4: and AI in general, does what the Fed does.
Speaker 5: It's irrelevant, irrelevant.
Speaker 4: Does it change how you play those themes or of timing?
Speaker 5: Okay, I mean this is how what I think credit
Speaker 5: quality in the United States is fine other than office
Speaker 5: real estate, and office real estate is not big enough
Speaker 5: to sink the economy. It's a problem. It's a regional problem.
Speaker 5: It's a regional bank problem. It's some investors problem. If
Speaker 5: consumers not over levered, the housing market is not in fuego,
Speaker 5: there's a shortage of housing. So all the all the
Speaker 5: and the financial system of the United States has never
Speaker 5: been this healthy in anyone's lifetime period. So all the
Speaker 5: things that existed prior to two thousand and eight don't
Speaker 5: exist today. You have a very dynamic economy with some
Speaker 5: very very powerful themes. The Fed cutting or not cutting
Speaker 5: rate makes headlines for a couple of days. But when
Speaker 5: you think about it, if the FED cuts rates once
Speaker 5: or twice or no, no times, I mean the end
Speaker 5: of the day, who cares. It's it's it's the minimis
Speaker 5: it's not. I mean the Fed raising rates five hundred
Speaker 5: bases points Yep, that got that got everybody's attention. The
Speaker 5: FED cutting rates twenty five basis points or fifty basis
Speaker 5: points and then stopping like like everybody get a life.
Speaker 1: Right, all right?
Speaker 2: In terms of getting a life on AI, a lot
Speaker 2: of well, I'll just speak for myself. I'm trying to
Speaker 2: figure out how much of this AI stuff and I'm
Speaker 2: putting in air quotes here for our listeners. Is incremental
Speaker 2: tech spending or is it just taking some money from
Speaker 2: it or other tech budgets and putting it to.
Speaker 5: It depends on which subsector talking. Okay, So if you're
Speaker 5: talking about the semiconductor sector, where it's video or a
Speaker 5: m D, it's it's massively incremental, you know. If you're
Speaker 5: talking about overall tech spending at this point, not clear.
Speaker 5: What's what is pretty clear is that companies like some
Speaker 5: of the IT consulting companies have no revenue growth because
Speaker 5: it's taking Peter to PayPal. So and software unclear, So
Speaker 5: it's it's only very clear in hardware.
Speaker 4: Let's overlay the presidential election with these thesis.
Speaker 5: The thesis.
Speaker 4: Thesis is plural and okay, it's important. I took Latin
Speaker 4: from the.
Speaker 5: CS, but this is a thes THECS.
Speaker 4: Okay, So what is your prediction for the election, and
Speaker 4: how does that impact because a lot of what you're
Speaker 4: talking about is driven by fiscal policy.
Speaker 5: Okay, so let's let's backtrack for a second. So, first
Speaker 5: of all, caveat whatever I'm about to say. I am
Speaker 5: not speaking for Newburger Barman. I'm speaking just for myself
Speaker 5: because I don't want to get into trouble. So it's
Speaker 5: May seventh, We're how many months? Five months? Six months
Speaker 5: from the election, very f and as far as I'm concerned,
Speaker 5: the election is baked. It's done, which is and Trump's
Speaker 5: gonna win, and I think he'll win every single swing state,
Speaker 5: and this is how it's going to play. So at
Speaker 5: this point, the protesters and what I'm about to say
Speaker 5: has nothing to do with who I'm going to vote for,
Speaker 5: what my predilections are. This is just pure analysis. The
Speaker 5: protesters on the college campuses have rapidly become the face
Speaker 5: of the Democratic Party, not completely, but that will be
Speaker 5: solidified because I am one hundred percent sure that in
Speaker 5: August at the Democratic Convention in Chicago, Irony, when you
Speaker 5: think about nineteen sixty eight, they will all be protesting
Speaker 5: there and they'll be screaming and yelling, and they'll be
Speaker 5: screaming and yelling a lot of things that are anti American,
Speaker 5: and the country is going to be appolled, and at
Speaker 5: that point it will be very very clear that Trump
Speaker 5: will win. But as far as I'm concerned, this reminds
Speaker 5: me a little bit of August two thousand and seven.
Speaker 5: If you look back at the financial crisis, the crisis
Speaker 5: took place in the fall of eight, but in August
Speaker 5: of seven, subprime paper had collapsed. The crisis was baked
Speaker 5: in August of seven. The rest was just an inevitable play.
Speaker 5: So I kind of feel about like that about the
Speaker 5: presidential lecture right now. It's baked, but the only people
Speaker 5: who don't know the voters.
Speaker 2: All right, We'll see how that plays out in the
Speaker 2: market life. Steve Iisman, thank you so much for joining.
Speaker 2: Steve Heisman is a senior portfolio manager at Newburger Berman.
Speaker 1: Joining us live here in our.
Speaker 2: Bloomberg Interactive Brokers studio. Let's see where this economy is
Speaker 2: going here. Francis Donald's going to help us out with that.
Speaker 2: Chief econmerce at Manual Life Investment Management. Francis, thanks so
Speaker 2: much for joining us here. I know I'm not really
Speaker 2: sure where the market is here in terms of this
Speaker 2: Federal reserve for a while there, we started out with
Speaker 2: a lot of cuts factored into the market, then fewer
Speaker 2: and fewer and fewer, and then there's even talk of
Speaker 2: a rate hike. Maybe that seems to be off the
Speaker 2: table here. I'd love to get a sense of how
Speaker 2: you folks at Manual Life are thinking about our feder
Speaker 2: reserve and kind of how they're thinking about this economy.
Speaker 6: You mentioned two words earlier. We have two words too.
Speaker 6: FED cuts are gonna come later, but then much faster
Speaker 6: than this market has been pricing in now. We've already
Speaker 6: been seeing that later to a certain extent. And let's
Speaker 6: just simply because we do expect the labor market in
Speaker 6: particular to decline, we do expect inflation to decline. But
Speaker 6: we have a few more months before the data we'll
Speaker 6: give the FED permission to begin this easing cycle. What
Speaker 6: we haven't bought into is that this would be like
Speaker 6: a two or three or done situation, that these would
Speaker 6: be insurance cuts. We believe we are heading into a
Speaker 6: proper downturn that will require a proper easing cycle, and frankly,
Speaker 6: that call is this just you know, some insurance cuts
Speaker 6: on the margin or are we going to see a
Speaker 6: average historical easing cycle is far more important than do
Speaker 6: they go in June, September, or even December in our.
Speaker 4: View, So your two words are later and faster. Basically,
Speaker 4: what gives you the confidence that we will see a
Speaker 4: material downturn.
Speaker 6: Leading economic indicators, So just about everything in the labor
Speaker 6: market that explains where we are in the labor cycle
Speaker 6: is pointing to a deterioration. Now, we're not calling for
Speaker 6: the end of the world. We're not saying it's a
Speaker 6: big crisis, calling for two quarters of negative GDP. Q
Speaker 6: three and Q four could be Q four and Q one.
Speaker 6: Well know, as we get closer to it, we've got
Speaker 6: business Employment Development data, nine million companies telling us there
Speaker 6: were job losses last year. Household employment has been flat,
Speaker 6: Temporary employment really good, leading indicator flashing recessions. Average weekly
Speaker 6: hours worked in the economy, just how many hours are
Speaker 6: people working comes back to pre COVID levels. Quit rates
Speaker 6: are dropping. Surveys from PMIS to small businesses say we're
Speaker 6: just not hiring as much anymore. I mean, I tell
Speaker 6: my team, you know, we've been calling for a recession
Speaker 6: for a while. It's been later than we expected. But
Speaker 6: I say, every day, come in to work, look at
Speaker 6: the data, and just ignore your past call. What does
Speaker 6: it tell you? Tells you re late cycle, and the
Speaker 6: odds of a downturn are much higher than the odds
Speaker 6: of a reacceleration.
Speaker 2: From this point, we're hearing a similar type of commentary
Speaker 2: coming out of the Walt Disney Company. I'm reading the
Speaker 2: research react from Bloomberg Intelligence Keith wrong Anathen Disney commentary
Speaker 2: on a normalization of demand that the theme parks will
Speaker 2: weigh on sentiment. Even after the segment posted a solid
Speaker 2: twelve percent operating income in fiscal Q two, guidance for
Speaker 2: the parks in Q three is weak with no growth,
Speaker 2: suggesting for your estimates might be at risk.
Speaker 1: So there's an.
Speaker 2: Example, Francis of you know, at data point suggesting maybe
Speaker 2: the consumer's strength is kind of waning. Here is that
Speaker 2: where you think you might see it from the consumer
Speaker 2: per se, you're likely.
Speaker 6: To see it across businesses and consumers, because that's how
Speaker 6: raid hikes work. The average time between the first rate
Speaker 6: hike and its impact on businesses and consumers is two years,
Speaker 6: so we're not exiting the period in which rate hikes
Speaker 6: become really impactful in the economy. We are entering that period.
Speaker 6: The mistake was in thinking that we'd see the impact
Speaker 6: earlier because of how fast and intense the rate hikes came.
Speaker 6: We're just entering that period. This is old fashioned economics.
Speaker 6: When money costs more to borrow, you borrow less of
Speaker 6: it and you invest less of it. Consumers can borrow less,
Speaker 6: they can spend less. Now we'll say there's a really
Speaker 6: important component here, which is that we are seeing a
Speaker 6: big bifurcation amongst both businesses and consumers. The spread between
Speaker 6: CEO confidence and small business confidence largest that we've seen
Speaker 6: in this data history. And for consumers, high income consumers
Speaker 6: they feel everything is fine. Why because they're benefiting from
Speaker 6: higher rates and a good stock market. Low end consumers
Speaker 6: telling a different story. So I love a good quality
Speaker 6: stock picker, even as a macro strategist. In this type
Speaker 6: of environment, it's going to be a little bit trickier
Speaker 6: than just looking at the aggregate. There's some elements underneath
Speaker 6: the surface that are telling slightly different stories.
Speaker 4: Well, I think that's such an interesting point too, especially
Speaker 4: as the high income consumers also have those low mortgage
Speaker 4: rates right, so they're also benefiting from that lower end
Speaker 4: consumers may not be owners at all. So I guess
Speaker 4: my question is, and this where it kind of ties
Speaker 4: to Disney also, is this a real retrenchment or just
Speaker 4: we had so much spending, we had so much safe
Speaker 4: theme park attendants. If we use Disney as the example
Speaker 4: and we're just moving off that high level, is there
Speaker 4: a distinction to be made?
Speaker 6: So I love this question. Are we just heading towards
Speaker 6: a normalization? Is effectively what I think about. If you
Speaker 6: look at the year over year charts, most of them
Speaker 6: signal this is a really strong contraction. Things like the
Speaker 6: Sam rule or a lot of things showing the unemployment
Speaker 6: rate is ten percent higher. Does that work when we've
Speaker 6: just come off of really low bases or really high highs.
Speaker 6: I'm a second derivative gal. I gotta say most of
Speaker 6: the time, momentum in year over year is the powerful indicator.
Speaker 6: But there is a chance that we are simply normalizing
Speaker 6: down for regular levels. And this is why we're not
Speaker 6: calling for a huge crisis. We're just saying that your
Speaker 6: GDP can be negative for two consecutive quarters, and the
Speaker 6: FED may want to begin an easing cycle in response
Speaker 6: to it. But this is a post COVID completely no
Speaker 6: precedent type of economy, and so I think there's a
Speaker 6: fraction of this that has to be old fashioned economics
Speaker 6: and what are standard relationships? And then we have to
Speaker 6: overlay the more subjective what could be different this time?
Speaker 6: You need a little bit of that science, a little
Speaker 6: bit of that art.
Speaker 1: Francis, what do you think about the labor market here?
Speaker 5: Again?
Speaker 2: It seems to be so resilient for so long here.
Speaker 2: Are you concerned that there may be some cracksness labor
Speaker 2: market or do you think this economy can continue to
Speaker 2: support a maybe a sub four percent unemployment rate.
Speaker 6: We're pretty close to four. We'd have to stay at
Speaker 6: three point nine percent now through the rest of the year.
Speaker 6: WHI seems a little tricky. So I think again, you
Speaker 6: have some old fashioned components here. If you look at
Speaker 6: temporary employment average, weekly quit rates, hiring rates, even conference
Speaker 6: board confidence data on jobs hard to find minus plentiful.
Speaker 6: Check the service employment index under the services PMI, that's
Speaker 6: deteriory to levels that we've only really seen in really
Speaker 6: serious recessions. These are not signaling that the employment is
Speaker 6: going to get better, they're signaling a further deterioration. At
Speaker 6: the same time, we have a very pronounced labor shortage.
Speaker 6: We are in an environment where businesses it was a
Speaker 6: heck of a hard time to hire people. In the
Speaker 6: past few years. They've said, if it's only a short
Speaker 6: term receession, we're going to hold on as long as possible.
Speaker 6: So I think you have a mix of Yes, things
Speaker 6: are going to get worse. Are they going to be
Speaker 6: a really standard massive deterioration. I don't think so. You
Speaker 6: got to overlay that structural post COVID economy as well.
Speaker 2: Francis, thank you so much for joining us again. We
Speaker 2: always appreciate getting your thoughts and commentary. Francis Donald, Chief
Speaker 2: Economists and Manual Life Investment management.
Speaker 5: Folks.
Speaker 2: Your daily look at the front pages around the world,
Speaker 2: mister John Tucker. Newspapers A lot of them out there, Not.
Speaker 1: As many as there used to be, but a lot
Speaker 1: of newspapers out there.
Speaker 2: Although you go to a you go to an office
Speaker 2: in London, let's say just you have a meeting in
Speaker 2: an office on money. You go into the waiting room,
Speaker 2: dozens of newspapers on the table.
Speaker 1: There's it's still big.
Speaker 7: In one it's an interest. You go down a city hall,
Speaker 7: Room nine is the press press room, and outside is
Speaker 7: a plaque of all the newspapers that have gone out
Speaker 7: of business in New York City. It's it's a big list,
Speaker 7: and it's kind of sad.
Speaker 4: I don't know if you guys know that. But you
Speaker 4: can also get papers on the interweb.
Speaker 1: Now really, really, it's amazing.
Speaker 2: I'm going to tell Caro Massa that she doesn't have
Speaker 2: to print out every single piece of information that you
Speaker 2: can have it like maybe on Ruth.
Speaker 7: Okay, well let's start here. If from the Bloomberry cause morning,
Speaker 7: if if you if you want to get somebody's attention
Speaker 7: on Wall Street, what do you say?
Speaker 1: Or everyone clicks on the Bloomberg terminal.
Speaker 7: Oh I can imagine after after two pretty lackluster years,
Speaker 7: they are set to jump, especially on desks that help
Speaker 7: companies tap markets or trade their bonds. According to report
Speaker 7: today from the compensation consultant Johnson Associates, bankers who underwrite
Speaker 7: debts may see payouts swell as much as twenty five percent,
Speaker 7: deals picking up this year. For bond traders. In equity underwriters,
Speaker 7: the incentives may rise twenty percent. Alan Johnson is the
Speaker 7: managing director of this firm. He says, in general, employees
Speaker 7: in financial services should be pretty pleased.
Speaker 2: This is way, way, way, way too early to be
Speaker 2: even talking about bonuses. I've had managers come in when
Speaker 2: I sit in my bonus meeting and we ripped it
Speaker 2: the entire year. Some knucklehead lost a couple hundred million
Speaker 2: dollars in like the last week of the year, and
Speaker 2: that is the excuse. My boss is like, we're not
Speaker 2: going to pay you.
Speaker 1: Like what so, I mean, yeah.
Speaker 7: See average cash bonus that declined two percent last year?
Speaker 7: What was one hundred and seventy six five hundred dollars.
Speaker 4: Maybe they're like, please don't go to a hedge fund
Speaker 4: or something, right, Yeah.
Speaker 7: But it's explain to everybody you live on your bonus.
Speaker 1: You used to, it used to.
Speaker 2: I mean back in my day it was ninety to
Speaker 2: ninety five percent. My annual compensation was my bonus. That's
Speaker 2: changed now they make it much more your salary versus
Speaker 2: your bonus, but still the bonus is material.
Speaker 4: Ninety nine percent was your bonus. Yes, yeah, holy mollypaans yep.
Speaker 7: All right, let's do this one from the wall Street
Speaker 7: Journal kind of skipping around here. Men happier at work
Speaker 7: than women. That's how they feel overall about their jobs.
Speaker 7: Most workers are positive. You dig deeper, though, you find
Speaker 7: about sixty five percent of men say they're happy with
Speaker 7: their jumps compared to sixty percent of women. The largest
Speaker 7: gaps and satisfaction between men and women related to financial benefits.
Speaker 7: Despite many companies introducing more family friendly policies such as
Speaker 7: daycare at work mental health services, the women surveyed were
Speaker 7: less satisfied with their jobs than men for the sixth
Speaker 7: year in a row. Women in particular might sense a
Speaker 7: more profound loss of remote work benefits as employers continue
Speaker 7: to push for their employees to show up more. And
Speaker 7: of course I'm gonna harp on this because I always do.
Speaker 7: Child care for moms is especially especially tough, and when
Speaker 7: you're a single mom, it can be like devastating, right.
Speaker 1: And we know, I'm shocked.
Speaker 4: I'm shocked by this survey.
Speaker 7: Well, I think I think a lot of people at
Speaker 7: the top might be shocked or maybe on informed.
Speaker 4: Really you should talk to people and they wouldn't be
Speaker 4: so shocking.
Speaker 2: I mean, I remember, you know, when Matt Miller came
Speaker 2: back from Germany for Bloomer, he worked and he was
Speaker 2: again kind of it just shocked and to come back
Speaker 2: here and to say, oh, in Germany we had just
Speaker 2: wonderful health care is free of chargela. Now he's paying
Speaker 2: a jillion dollars and his daughter is in like the
Speaker 2: basement of some church in Westchester, you know, paying a
Speaker 2: million dollars.
Speaker 7: And that's that's a good slot.
Speaker 1: Yeah, that's a good slot. And that's a good slot
Speaker 1: for a good slot. Yes, so very tough.
Speaker 7: All right, let's do this one. Also, Uh, what happened
Speaker 7: to the tax crew. It's more governments are slapping fees
Speaker 7: on electric vehicles. Reporting for Bloomberg this morning. You know,
Speaker 7: we also thought governments were trying to encourage the use
Speaker 7: of evs, but the shift away from combustion engines that
Speaker 7: is actually leaving one hundred and ten billion dollars hole
Speaker 7: in government revenues owing to a drop and receipts from
Speaker 7: fuel taxes. So you'll have a lot of states and
Speaker 7: governments across the world, among jurisdictions, introducing tax changes and
Speaker 7: charges on evs and hybrid vehicles designed to raise funds
Speaker 7: and compensate for the declines and gasoline and diesel excise.
Speaker 4: Taxes, so to this point. Actually, I think there was
Speaker 4: an article on the Ft yesterday that talked about in
Speaker 4: Germany in particular, they're rolling back some of the substus
Speaker 4: that they gave, not just for things like evs for example,
Speaker 4: but like heat pumps and stuff like that. So consumers
Speaker 4: spent a lot of money to then get a rebate,
Speaker 4: and then all of a sudden the rebate goes away.
Speaker 4: They don't know if they're going to get it or not.
Speaker 4: They wouldn't have done it otherwise. It gets complicated, and
Speaker 4: the idea that you're you know, the government will have
Speaker 4: to spend money to make all this work, full stop period.
Speaker 5: Yep.
Speaker 7: And we'll conclude with this one from Bloomberg. Oh my gosh,
Speaker 7: Oh my gosh. Taylor News. Apparently the Paris Olympics is
Speaker 7: drawing luxury travel demand. But guess who is the bigger
Speaker 7: draw this week? The Superstar playing four shows at led
Speaker 7: Defense Arena. This is just outside the capitol, so kicks
Speaker 7: off the aristour of the European part of it. Total
Speaker 7: seating capacity forty thousand per show, So this event is
Speaker 7: just a fraction of the size of the Olympic Games,
Speaker 7: and yet the concert's drawing five times as many Americans
Speaker 7: as the Paris Olympics. This according to the luxury travel
Speaker 7: agency Embark Beyond. Bark's co founder, Jack Hasen tells us
Speaker 7: that she's overshadowing the Olympics. That among the more than
Speaker 7: two hundred Paris trips that his company has planned for swifties,
Speaker 7: the average length three nights, clients usually staying at luxury hotels.
Speaker 7: Around a third of groups of mother daughter pears want
Speaker 7: to schedule shopping sprees around the concert.
Speaker 4: I looked to us selling Tucker earlier. I looked into
Speaker 4: this just for fun, and it would be cheaper to
Speaker 4: go to like Sweden and see the concert, or even
Speaker 4: Paris or the UK and see her concert than to
Speaker 4: go to Miami. Yep, in terms of the ticket prices.
Speaker 4: Just putting that up.
Speaker 2: But I'll note over the weekend, who drew like a
Speaker 2: gajillionah one fans down in Madonna?
Speaker 1: Where was she?
Speaker 4: Oh, Brazil.
Speaker 2: That question, Yeah exactly, but I mean Madonna still, I
Speaker 2: mean like hundreds of thousands of yeah, came to see
Speaker 2: her concert down in real She's Madonna, she is, I
Speaker 2: mean Madonna, all right, And I was John Tucker with
Speaker 2: our newspaper segment. This is the Bloomberg Surveillance Podcast, bringing
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Speaker 1: Hmm