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Speaker 2: You usually would dive in with Richard Clarina of Pimcoe's, Hey,
Speaker 2: what's the market going to do? What's the fed gonna do?
Speaker 2: We're gonna stop and this is why we're talking to
Speaker 2: Richard Clareda, and today Kachola Coda of Rochester, when he
Speaker 2: was fed a Reserve Bank of Minnesota said, of the
Speaker 2: theories wrapped around Professor Clareda, modern macro models do not
Speaker 2: capture an intermediate, messy reality that's out there right now.
Speaker 2: There's a messy, messy reality that we're all facing there.
Speaker 2: And to me, looking at the magnificent architecture of dssee, folks,
Speaker 2: I'll say, at once dynamics, stochastic general equilibrium theory in
Speaker 2: the beauty of it, and not the physics envy, but
Speaker 2: just the wonderful thinking of it. You come here and
Speaker 2: as Ned Phelps would say, go to the XX short term,
Speaker 2: medium term, long term, you're in the Oval Office right now,
Speaker 2: and you've got to explain to Trump and the gentleman
Speaker 2: from Pennsylvania Hasset the short term, the medium term, the
Speaker 2: long term of what they are doing right now. How
Speaker 2: do you explain that.
Speaker 3: Well, what you say is the goal is to onshore,
Speaker 3: bring production back to the US, reduce the trade deficit.
Speaker 3: What we know is they can put on tariffs.
Speaker 4: They have. The liberation day is.
Speaker 3: Tomorrow, but it will take several years for that production
Speaker 3: if it eventually does ramp up. To boost the supply
Speaker 3: side of the economy, we have supply chains. Tariffs are
Speaker 3: essentially attacks on inputs to production, so that slows it down.
Speaker 3: Also the uncertainty about what the policy will look like
Speaker 3: in the future as well. So right now what you're
Speaker 3: getting is a lot of uncertainty. It's slowing the demand
Speaker 3: and the economy. Eventually you may get more jobs and
Speaker 3: more production, but that's several years down the road. So
Speaker 3: I think I want the folks in the Oval Office
Speaker 3: to understand the time dimensions at work here.
Speaker 5: For sure.
Speaker 2: Stephanie Kelton has a theory which is very much against
Speaker 2: people like you on what modern monetary theory should look like,
Speaker 2: and part of that theory is the intrusion of politics
Speaker 2: into monetary economics. Right now, we're doing almost Vorescian tariff law,
Speaker 2: mkindling tariff law, certainly from a nineteenth century. Can the
Speaker 2: political system be patient enough to get declared as medium
Speaker 2: term success?
Speaker 4: Well, I'm not sure.
Speaker 3: And in particular it gets it another fundamental idea in
Speaker 3: economic which is the idea of time consistency, that eventually
Speaker 3: people figure out that your promise now may not be
Speaker 3: delivered in the future. And so that's why, in particular,
Speaker 3: if the twenty percent tariffs that we're hearing about are
Speaker 3: really the beginning of a negotiation, that also adds an
Speaker 3: additional layer of uncertainty on top of just knowing what
Speaker 3: the tariff number is is now. You know, Tom, we
Speaker 3: saw him when I was at the Fed in twenty
Speaker 3: nineteen that, in fact, just the uncertainty about the trade
Speaker 3: policy itself was a damper to the economy. And that's
Speaker 3: a very tangible factor fact of life in macro and
Speaker 3: I think we're seeing an elevated version of it now.
Speaker 6: And Richard, I think we're seeing some the folks on
Speaker 6: Wall Street start to take down their GDP numbers being
Speaker 6: ratchet up their inflation expectations. Are they too early here
Speaker 6: or is that a reasonable I guess near to intermediate
Speaker 6: term outlook.
Speaker 3: Well, you know, Paul, everything in macro is a probability,
Speaker 3: and so I think it is appropriate to move up
Speaker 3: the probability of a recession. Certainly it would not d
Speaker 3: my base case now, but it's certainly somewhat more elevated
Speaker 3: than it was in particular. I think the other piece
Speaker 3: of this time, getting back to your point about the
Speaker 3: but the AX axis, is there's a lot of talk
Speaker 3: about fiscal you know, no tax on tips, social Security,
Speaker 3: you know, tax deductions to buy a car.
Speaker 4: But again that's going to.
Speaker 3: Take most of the rest of this year to work
Speaker 3: its way through through Congress, and so again there'll be
Speaker 3: uncertainty over that piece of it as well.
Speaker 6: And given that backdrop of uncertainty, Richard, is there anything
Speaker 6: FED and policy can do to it to really, I
Speaker 6: don't counteractor to impact the economy because it doesn't feel
Speaker 6: like there's much that FED it can do in the
Speaker 6: face of what could be a slowing economy in higher inflation.
Speaker 3: Well, I think here we want to distinguish between what
Speaker 3: the FED can do and what they will do. You know,
Speaker 3: what the FED could do is cut rates preemptively. That's
Speaker 3: more or less what the power FED did during my
Speaker 3: teim there in twenty nineteen. The economy began to slow
Speaker 3: because of trade policy uncertainty, inflation began to fall, and
Speaker 3: so we cut rates, essentially an insurance cut. I don't
Speaker 3: think the FED really now has the runway to do
Speaker 3: an insurance cut. In other words, we may need to
Speaker 3: see a very tangible slowing in the economy, in the
Speaker 3: labor market, rising the unemployment.
Speaker 4: Rate to get the Fed off of Hold right here.
Speaker 2: If you just joining it, because across the nation, we're with
Speaker 2: Richard clair To, the former vice chairman of the FED.
Speaker 2: We have a spectacular set of conversations for you today.
Speaker 2: Nancy Lazar will be with us later. Among us Michael Nathanson.
Speaker 2: Paul had a tantrum yesterday and said, get Nathanson. We
Speaker 2: have Michael Nathanson here with a interesting essay on YouTube.
Speaker 2: We welcome all of you on YouTube. Subscribe to Bloomberg Podcast.
Speaker 2: It's our wonderful new distribution. Thank you for a successful march, Paul.
Speaker 6: Richard, So you know, it's interesting some of the hit
Speaker 6: you know, the data that the FED looks at. Historical
Speaker 6: data still shows the economies in pretty solid shape. But boy,
Speaker 6: I get kind of spooking. I think the market gets
Speaker 6: a little spooky when they see survey data like the
Speaker 6: University of Michigan data showing that WIT consumers really are concerned,
Speaker 6: their sentiment is following, their inflation expectations are arising. How
Speaker 6: does the FED look at that type of data.
Speaker 3: It's an input into the projection. I think cher Palell
Speaker 3: mentioned at the press conference last week that they look
Speaker 3: at the survey data, but the survey data doesn't necessarily
Speaker 3: translate into hard data eventually. I think what we have seen,
Speaker 3: even Paul in the hard data is a pretty noteworthy
Speaker 3: slowing in consumption side of the economy relative to a
Speaker 3: really strong fourth quarter.
Speaker 4: I think a lot of reason why.
Speaker 3: Cell side houses are marking down their forecast is not
Speaker 3: so much the survey data. It's the tangible data on
Speaker 3: consumption being very very soft in Q one.
Speaker 2: You more than anyone, have got to go from the
Speaker 2: academics of DSGE and your work at literally building the
Speaker 2: modern Columbia program. Did you bring Woodford over were You're
Speaker 2: the one? And it said Michael come on over.
Speaker 4: I wish I could take credit for that.
Speaker 3: That was my success was Don Davis who brought Woodford over,
Speaker 3: but I was leading the cheerleading effort to do it.
Speaker 2: There was a cheerleading effort and they used torpedo bets
Speaker 2: at the Columbia Right now, so Richard did bring in Stiglitz. Okay, well,
Speaker 2: that takes credit for that. Okay, that's good. But the
Speaker 2: thing in Richard clar Day is to bring this over
Speaker 2: to the application of what we're doing now that the
Speaker 2: theories to me are literally out the window. What is
Speaker 2: the theory of the dual mandate right now?
Speaker 4: Well, right now, the labor markets where the Fed wants
Speaker 4: it to be.
Speaker 3: We have about a four percent unemployment rate and all
Speaker 3: broad measures of the labor market. So the Fed wants
Speaker 3: to keep the market labor market where it is right now.
Speaker 3: Chair Pale has said a number of times that the
Speaker 3: Committee doesn't think that the labor market now is a
Speaker 3: source of inflation. So they're very happy where the labor
Speaker 3: market is. What they were thinking six months ago is
Speaker 3: that they were on a glide path to this soft landing,
Speaker 3: although they didn't use that term, and I think the
Speaker 3: glide path has been delayed somewhat.
Speaker 2: My ten year real yield here Jerome Schneider called me
Speaker 2: up from PIMCO. Yet up early, he says, Tom, the
Speaker 2: ten year real yield one point seventy eight percent. It's
Speaker 2: coming down, down, down. If you're talking to Pimco troops
Speaker 2: right now, are you modeling out a higher unemployment rate?
Speaker 2: I got Atlanta GDP, GRIMM, I got feder Re zero
Speaker 2: Bank of New York disagreeing with that. Where is Richard
Speaker 2: Clarida on the I guess the vector of the unemployment rate?
Speaker 4: I think the risk is to the upside.
Speaker 3: And indeed, if you look at the Fed's projections two
Speaker 3: weeks ago, where they show a chart that what is
Speaker 3: the risk to the unemployment outlook, it's to the upside.
Speaker 3: So I think there's some upside risk right here.
Speaker 2: You know, at.
Speaker 3: Minimum, given what's going on with DOGE right now, we're
Speaker 3: going to see some increase in unemployment through those efforts.
Speaker 3: Also important to note that even coming into the year, Tom,
Speaker 3: if you look at private employloyment in particular, excluding healthcare
Speaker 3: and education, which have a pretty big government backstop, private
Speaker 3: employment had been really slowing throughout much of last year.
Speaker 4: So that. I think that's also irrelevant.
Speaker 6: How do you view the consumer here today, Richard? It
Speaker 6: just seems like anytime over the last twelve fifteen years
Speaker 6: to get concerned about the economy, but the consumer hangs
Speaker 6: in there and generally keep spending pretty well. How do
Speaker 6: you think about the US consumer?
Speaker 3: Well, in the aggregate, you know, there are three hundred
Speaker 3: million consumers, and in the aggregate they're in great shape.
Speaker 3: You know, in particular high levels of net worth. If
Speaker 3: you own a house, if you have money in the
Speaker 3: stock market, you've had a really good run for the
Speaker 3: last several years. But about a third of Americans don't
Speaker 3: own their own home or don't hold any stock, and
Speaker 3: for them it's a very different outcome. So what you're
Speaker 3: starting to see in the data now is a pretty strong,
Speaker 3: if I may use the term bifurcation between upper ear
Speaker 3: consumers and consumers who don't own their own homes or
Speaker 3: have a lot of stock market wealth, and then they're
Speaker 3: getting pinched.
Speaker 2: Okay, this is the heart of the matter. I mean,
Speaker 2: Alan Meltzer almost took it, almost took a swing at me.
Speaker 2: Jackson holds over this because Alan Meltzer want to go
Speaker 2: back to forty seven and aggregate data. You've been teaching
Speaker 2: that for twenty five years back when you were at Illinois.
Speaker 2: We're aggregating data. You just described a barbelle John Edwards
Speaker 2: to Americas. Yeah, around the table at the Eccles building.
Speaker 2: Besides arguing over who's got redskins dads? Forget about that.
Speaker 2: But around the table at the Eccles building, are you
Speaker 2: looking at two Americas or some economic aggregated fiction.
Speaker 3: Well, I'll put and say you look at both. But
Speaker 3: certainly during my time there, the staff did very very
Speaker 3: good work on looking a very disaggregated data. Forget you know,
Speaker 3: two Americas that were looked at like thirty eight different
Speaker 3: parts of the economy.
Speaker 2: So you do both? Oh, come on, I mean Jason
Speaker 2: Furman in his wonderful New York got bed. We'll get
Speaker 2: Professor Furman in up in a schools up at a
Speaker 2: school in New England somewhere. Jason says, flat out, tariffs
Speaker 2: kill the poor and the tax cut goes to the rich.
Speaker 2: It's a single sense in surveillance correction, Lisa, thank you
Speaker 2: for noting it. It's not the Washington Redskins, it's the
Speaker 2: Commander's my folks, it's my excuse me.
Speaker 4: Maybe we'll go back.
Speaker 2: Who knows, maybe I'll still have a job.
Speaker 6: The world's changed. So Richard, where do we go from here?
Speaker 6: What's the key thing that you're looking at here for
Speaker 6: this economy? Is it the tariffs? Is it the consumer?
Speaker 6: Is it the labor market? What's the key thing you're
Speaker 6: focusing on?
Speaker 2: Look?
Speaker 3: I think I think the issue is we're in a
Speaker 3: period now where measured inflation is going to go up
Speaker 3: because of the pass through of the tariffs, and activity
Speaker 3: is going to slow. So the real question for me, Paul,
Speaker 3: is are we going through what I call a whiff
Speaker 3: of stagflation or are we really entering what would be
Speaker 3: a pretty very pretty persistent stagflationary crunch. You know, I'm
Speaker 3: still relatively optimistic. I think it's more of a whiff
Speaker 3: than a new normal, but it's certainly something that that
Speaker 3: is would be would be quite relevant.
Speaker 6: It seems like a tough political call there to slow
Speaker 6: this economy and the rise inflation. Is the longer term
Speaker 6: gain that this administration sees from perhaps restoring more manufacturing.
Speaker 6: Is that a realistic expectation?
Speaker 4: Do you think, well, that it is.
Speaker 3: A realistic expectation, But it will not happen overnight. It
Speaker 3: will take several years. And in particular, in fairness, we
Speaker 3: saw a version of this in the Reagan administration. People
Speaker 3: think of Reagan as being a free trader, and he
Speaker 3: may have been philosophically, but the Reagan administration, which I
Speaker 3: actually worked with back in my youth, was actually quite interventionist.
Speaker 3: In particular, they had a policy known as voluntary export
Speaker 3: restraints on Japanese cars. And what the big Japanese automaker's
Speaker 3: Toylet and Honda realized is the only way for them
Speaker 3: to have a presence in the US was to build
Speaker 3: a lot.
Speaker 4: Of factories in the US. And so it worked.
Speaker 3: An ambitious enough trade policy and lead over time to
Speaker 3: some onshoing, but it won't happen overnight.
Speaker 2: I got eight ways to go. For a final question,
Speaker 2: I want to go to zero sum, but it's too
Speaker 2: early in the morning for a zero sum discussion. Here
Speaker 2: the heart of the matter is a president is looking
Speaker 2: at this is a bilateral discussion. The giant William Klein
Speaker 2: at the Peterson Institute aggressively disagrees with that. What's our
Speaker 2: multilateral outcome of this bilateral naivete?
Speaker 3: I think we'll learn a little bit more tomorrow about
Speaker 3: how much of this is intended to be permanent and
Speaker 3: how much is an opening, you know, art of the
Speaker 3: deal negotiation. If it is, if it is as I
Speaker 3: suspect it will be the opening rounds of multiple negotiations
Speaker 3: across different countries, then it's certainly not going to be
Speaker 3: it's certainly not going to really be a multilateral plan
Speaker 3: or be a series of bilateral deals.
Speaker 2: Is get gone to, you know hard in the phrases
Speaker 2: get gone.
Speaker 3: And I think the evidence in favor of that is
Speaker 3: that the Biden administration really didn't try to resuscitate the WTO.
Speaker 2: So why didn't they? Why did Why did they resuscitate
Speaker 2: the Atlantic Charter off of Newfoundland in nineteen forty two
Speaker 2: when we were flat on our back?
Speaker 3: Well you would have to ask them, but they're the
Speaker 3: political center of gravity in the last four years before
Speaker 3: Trump two point zero was really not to engage in
Speaker 3: the WTO. We never staffed up the dispute settlement process.
Speaker 2: It's completely fair. I mean, it goes back to transpecific failure.
Speaker 3: Yeah, and very good reminder the Transpacific Partnership exactly.
Speaker 4: Yeah, you can come into all for liberation data. I'll
Speaker 4: do it by phone. How about that, Richard clear to
Speaker 4: thank you so much, generous.
Speaker 2: Of you to be with us.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
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Speaker 2: The only one on Wall Street with a torpedo bat
Speaker 2: at home first in line with Anthony Volpi's bat. Michael
Speaker 2: Nathanson joins us right now, Mike, I don't care about
Speaker 2: YouTube your wonderful essay with Maffatt Nathanson. All I want
Speaker 2: to know is a torpedo bat. Do we ban it
Speaker 2: and get back to traditional baseball?
Speaker 7: Oh? Tom, it's the best thing for baseball. How can
Speaker 7: we ban it? This is This is a sport that
Speaker 7: needs something right. It needs some excitement and energy. Say
Speaker 7: give he went to bat?
Speaker 2: So this is this is like the Wilson I think
Speaker 2: it was the A two thousand of Jimmy Connors. As
Speaker 2: we got a metal tennis racket, get used to it.
Speaker 7: Oh, without a doubt and Baseball could not have made
Speaker 7: a better outcome for themselves right now, right keep such
Speaker 7: thousand home runs for the Yankees.
Speaker 2: It's a gift the season. It's like homebred Derby. Would
Speaker 2: you like to start the interview.
Speaker 7: Paul Sweed exactly.
Speaker 6: Hey, Mike, your your your note on YouTube hit my
Speaker 6: inbox yesterday. I read every word of it. I know
Speaker 6: it's been picked up by a lot of media. Can
Speaker 6: you frame out for us how big YouTube has become
Speaker 6: as a media company.
Speaker 7: Okay, so those compoys look at it and good morning guys.
Speaker 7: One is simply by revenues, Believe it or not. It's
Speaker 7: fifty four billion in revenues with advertising, you know the
Speaker 7: bulk of that. But there is a subscription business. It's
Speaker 7: fifty four billion. It's literally you know, with the rounding
Speaker 7: era of Disney, and by this year that will pass
Speaker 7: Disney in revenues advertising subscription in terms of time spent.
Speaker 7: I think you knowed from where you guys have your
Speaker 7: your your show playing. If you look at connected TVs,
Speaker 7: more people watch YouTube than any other service. Wow, you know,
Speaker 7: it's bigger than Netflix, It's big than Disney. Plus if
Speaker 7: you can look more broadly, just content, linear content channels,
Speaker 7: cable plus satellite plus streaming. They are still the biggest
Speaker 7: service of of the TV glass, right, and they also
Speaker 7: position on your phone and your desktop, and they're also global, right,
Speaker 7: So it's it's a monster of a company. Unfortunately, because
Speaker 7: of Google's, you know, the focus at Google Search and
Speaker 7: kind of the worries about search, people have ignored just
Speaker 7: the strength of YouTube. But we keep pointing out every
Speaker 7: year just the monster that it is, and it's going
Speaker 7: to overtake Disney by twenty twenty five.
Speaker 6: Michael, what does I'm look at the subscription revenue for YouTube,
Speaker 6: which has become a force mine assume that most of
Speaker 6: that subscription revenue was folks that maybe cut the cord
Speaker 6: and said, but I find value on YouTube.
Speaker 7: It's a bit of a blend. So it's I think
Speaker 7: Thomas and before half of its YouTube premium, which includes
Speaker 7: YouTube music, and we'd say there's about nine to ten
Speaker 7: billion remains is YouTube TV, which I have. They just
Speaker 7: raise prices unfortunately, but we think by twenty twenty six
Speaker 7: and twenty six they'll be the biggest PTV company in America.
Speaker 7: There will pass Charter and contract.
Speaker 2: Right, they're ending a.
Speaker 7: Million subs a year, and noone else is losing subs
Speaker 7: so it's going to get to be a monster of
Speaker 7: a company on PTV as well.
Speaker 2: Michael, I want you to talk to entertainment Global Wall
Speaker 2: Street that listens to us. We thank all of you
Speaker 2: around the world and particularly in LA and New York,
Speaker 2: glued to Lucas Shaw and screen time and what we're
Speaker 2: doing here with Paul Sweeney's leadership on entertainment. I'm going
Speaker 2: to pick on CNN just because Mark Thompson had a
Speaker 2: wonderful interview I think in the New York Times nine
Speaker 2: months ago. I'm guessing where every other paragraph ended with
Speaker 2: the basic thought, we don't know what to do with YouTube.
Speaker 2: What should traditional large media companies do with YouTube?
Speaker 7: Yeah, Tom, you have no choice. YouTube is the platform, right,
Speaker 7: you have to do what you're doing. You have to
Speaker 7: basically use it for fust capabilities, right. So you have
Speaker 7: to basic program a long form like you're doing. What's
Speaker 7: missing in media is short form.
Speaker 2: Right.
Speaker 7: There's not enough attention on kind of the YouTube shorts
Speaker 7: or or TikTok you know, or meta reels. You have
Speaker 7: to come up with a way to leverage short form video.
Speaker 7: And also you have to become a creator like you
Speaker 7: have to basically become a mister beast, which I don't
Speaker 7: know if you're familiar with, and basically you have to
Speaker 7: program for all types of consumption.
Speaker 2: Right.
Speaker 7: So I think what everyone can do is do long
Speaker 7: form content. But what's missing here in the DNA of
Speaker 7: these companies is that short form creator economy where you're
Speaker 7: using the difference, you know, kind of the short form
Speaker 7: essence of YouTube to break through the clutter. It's hard
Speaker 7: because there's no barriers to entry, right, Like great business
Speaker 7: that we've analyzed in our careers had a big moat
Speaker 7: cord cord cutting the.
Speaker 2: Cord, you know. Okay, but this is first of all.
Speaker 2: I was talking with Jimmy Donaldson the other day, really
Speaker 2: told him he's killing it with mister beasts. I'm looking
Speaker 2: Michael Nathanson hit the financial side of this. How does
Speaker 2: traditional media find Paul help me here the fixed cost
Speaker 2: benefit of YouTube? I don't see it. How do they
Speaker 2: cover fixed costs on revenue or down the income a
Speaker 2: statement to the Paul Sweeney's looking at this ebit that thing.
Speaker 2: How do they do that on YouTube? I see no evidence?
Speaker 7: Well, Tom, you have to basically create an alternative studio. Right,
Speaker 7: you have basically have to invest in startups, and it's
Speaker 7: not going to be in your P and L. Right,
Speaker 7: it has to be. To your point, the infrastructure of
Speaker 7: the companies we cover are just too large to make
Speaker 7: money in YouTube. But it has to be a confederation
Speaker 7: of small startups that you invest in.
Speaker 2: Right.
Speaker 7: You have to basically think of this as a portfolio
Speaker 7: that you're investing in off to the side that's going
Speaker 7: to grow one day. I don't think they have the
Speaker 7: DNA to your point, and the financial structure to play
Speaker 7: a small ball, right. This is a small all kind
Speaker 7: of approach. You have to break yourself away and basically
Speaker 7: hire a bunch of young people to do it. You
Speaker 7: know it's gonna be a fragmented view.
Speaker 6: Hey, Mike, As always, your research notice full of lots
Speaker 6: of numbers, lots of great analysis. The one that jumps
Speaker 6: out of me. If YouTube was a standalone business, public
Speaker 6: comps suggest the business would be worth four hundred and
Speaker 6: seventy the five hundred and fifty billion dollars, or about
Speaker 6: thirty percent of Alphabet's current valuation. I'm going to put
Speaker 6: on my investment banker hat here, Mike, I'm going to
Speaker 6: go out there and say, let's spin this thing out,
Speaker 6: let's ipo this thing. What's the company say about the
Speaker 6: structure of this company?
Speaker 7: The problem is, Paul, is that you know, all the
Speaker 7: infrastructure is built off of a common backbone, right, so,
Speaker 7: all the data centers, all the investments in AI, the
Speaker 7: go to market sales strategy. There's just too much shared
Speaker 7: services for it to happen, right. It's maybe the government
Speaker 7: will we don't know. Policy seems to be fluctuating, but
Speaker 7: maybe the government will break them up. But for today's purposes,
Speaker 7: they've built it on the back of one infrastructure is
Speaker 7: too hard to do right now.
Speaker 2: I mean, a guy named Moffatt and a guy named
Speaker 2: Nathanson came out with you know, I'm going to give
Speaker 2: rich Greenfield some love here as well a massive upfront
Speaker 2: on cord cutting. How does cord cutting now fold into
Speaker 2: this migration to the only thing my family watches YouTube
Speaker 2: and Netflix like ninety five percent? What's that dynamic look
Speaker 2: like in two thousand and thirty.
Speaker 7: Okay, so great question. We have about sixty seven million
Speaker 7: PHV homes right now, we're losing about five million a year.
Speaker 7: So in five years time, we'll be down to around
Speaker 7: forty million PTV homes. Those homes will be there for
Speaker 7: live sports, right news forty million. That leaves ninety one
Speaker 7: hundred million homes watching YouTube and Netflix, right, And the
Speaker 7: challenge would be those forty million homes that remain. Why
Speaker 7: are we there? And We've talked about this for a
Speaker 7: long time. I'm Tom the glue of sports, but sports
Speaker 7: keeps leaking into streaming. It's gonna be harder for all
Speaker 7: of us to defend paying one hundred dollars for TV.
Speaker 2: Right.
Speaker 7: So our view is then YouTube has the ability to
Speaker 7: become an aggregator where they basically take everyone's services and
Speaker 7: rebundle it into something called cable TV. But it's in streaming, right.
Speaker 7: So basically Matha said twenty years ago it turns out
Speaker 7: that that cable is a good business, it's going to
Speaker 7: take twenty years to realize that that's the right model.
Speaker 6: Right.
Speaker 2: But Paul, get one more question here, I'm depressed out
Speaker 2: on YouTube live chat. Dorsey says time should start streaming
Speaker 2: six hours a day. I'm not joking, really, yeah, working
Speaker 2: Dorsey is Dorsey Craig Moffatt in disguise.
Speaker 4: That's one more question.
Speaker 6: Hey, Craig That begs the question here. I mean, Michael,
Speaker 6: our good friends at Paramount, Warner Brothers, Discovery, everybody else.
Speaker 6: I mean, if I don't have a theme park business,
Speaker 6: what am I doing in the media business these days?
Speaker 6: What are these companies?
Speaker 7: They have to consolidate, right, we have We've been waiting
Speaker 7: for this dance to come to an end. You have
Speaker 7: three three services Max, Paramount, Plus and Peacock that now
Speaker 7: need to activate. And that's the last kind of the
Speaker 7: piece of the puzzle. But it's not clear again with
Speaker 7: this administration, how those companies can get bigger politically. So
Speaker 7: I think we're in this imperfect world where you have
Speaker 7: some people who've scaled. Tom mentions, Netflix and YouTube will
Speaker 7: put Disney there. The rest have to get bigger. And
Speaker 7: luckily Comcast has a theme park the building up that's
Speaker 7: gonna get bigger epic in Disney's e Think Park. But
Speaker 7: the others need to consolidate and take out capacity.
Speaker 2: Michael. One final question, rich Out on YouTube sends in
Speaker 2: this email, and I love it because we just spoke
Speaker 2: the Sebastian page of Surbert Canada as well. The Rangers
Speaker 2: have never been this bad? Is the kid from Boston College.
Speaker 2: Yannick Pro's kid, Gabriel perro is he is he the hope,
Speaker 2: the future of you.
Speaker 7: We're in New York Rangers, thank you for ruining my morning.
Speaker 7: I don't know, because I don't. I mean, he's a
Speaker 7: good scorer. We'll see about his size, you know, you
Speaker 7: know can gests hate. I mean we had a number
Speaker 7: one pick and a number two pick, right that doesn't
Speaker 7: happen that often two years in a row, and it
Speaker 7: didn't work out very well for us. So I am
Speaker 7: I am in a sad state right now by the
Speaker 7: New York Rangers. I think it's I think it's regime change.
Speaker 7: There really has to change.
Speaker 2: I totally agree with you on size. I just I
Speaker 2: mean Peoles modeled out at five eleven, one hundred and
Speaker 2: sixty five pounds. Let's say pops thirty pounds on weightlifting.
Speaker 2: Jeremy Rennick, I don't know if he could skate today.
Speaker 2: You get out of or in Boston. Yeah, I mean
Speaker 2: they Ron excuse me what Ronnick? Rennick? You know it's
Speaker 2: like wicked the answers. I just don't know. I just
Speaker 2: the size. I just I'm with Michael Nathanson. I know
Speaker 2: we need some big razor plan, you know the ring. Michael,
Speaker 2: thank you so much. Congratulations. We still need to get
Speaker 2: you and Craig Moffatt in the studio to do an
Speaker 2: entire hour State of Media because we get a huge
Speaker 2: response when you're on. Thank you for the wonderful comments
Speaker 2: out on YouTube. Greatly appreciate that. Michael Nathanson with Moffat Nathanson.
Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live
Speaker 1: weekday afternoons from seven to ten am Eastern Listen on
Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or
Speaker 1: watch us live on YouTube.
Speaker 2: Joining us now, we are thrilled to bring you a
Speaker 2: really a historic time for the nation. Nancy Lazar definitive
Speaker 2: at CJ. Lawrence over the many years now at Piper Sandler,
Speaker 2: and just just a perfect time to speak to Nancy
Speaker 2: Nancy Lazar. Is any of what we're doing with tariffs
Speaker 2: with a bilateral economic policy? Is any of this in
Speaker 2: the textbooks you studied a few years back.
Speaker 8: Well, it's in the textbooks, but it just has a
Speaker 8: negative connotation when they write about it in the text
Speaker 8: In the textbooks. Free trade is definitely a healthier economic backdrop.
Speaker 8: Fair trade is also key, and I would hope to
Speaker 8: some extent this does lead to if there is any
Speaker 8: potential string of positive from this tariff discussion, that we
Speaker 8: do start having freer trade around the world near term.
Speaker 8: That's obviously not happening. These are huge taxes on consumers.
Speaker 8: We actually import more capital goods than consumer goods. This
Speaker 8: is going to be a big hit on good He's
Speaker 8: trying to build stuff in this in this in the
Speaker 8: United States, so very counterproductive, clearly risk taking GDP into
Speaker 8: negative territory at least four quarter.
Speaker 2: I can't say enough, folks about what we're trying to
Speaker 2: do here Geographically and Malati just with us from Milwaukee,
Speaker 2: we're strong with Allspring. Now if Nancy Lazar with us
Speaker 2: out of Piper with all of their heritage of Minneapolis,
Speaker 2: Piper Sandler of course entered the wonderful New York City
Speaker 2: banking expertise, and of course her work at Kalamazoo in
Speaker 2: the west coast of Michigan as well. Nancy Lazard take
Speaker 2: the Northwest, a traditional manufacturing heart of the Great Lakes area.
Speaker 2: Where are they going to be in six months?
Speaker 8: Well, again, terrorists are going to be a tax on
Speaker 8: the economy. I'm afraid manufacturing activity is going to actually
Speaker 8: take a hit as we go into the second quarter.
Speaker 9: And this is really really unfortunate.
Speaker 8: We've had a US manufacturing renaissance theme for fifteen years.
Speaker 8: It started with the private sector and has been We've
Speaker 8: had on shoring, clear onshoing, new companies coming to the
Speaker 8: United States because it was just the US was generally
Speaker 8: viewed as a better place to do business.
Speaker 9: We have our own energy. Then we got the tax cut.
Speaker 8: China was increasingly a bad actor industrial policy under the
Speaker 8: last administration. You actually saw onshoing decline on It declined
Speaker 8: in part because of increased regulations, and so to be
Speaker 8: a little more balanced, we are going to see an
Speaker 8: increased we are going to see decreased regulations. They're already unfolding,
Speaker 8: and so we're hoping this is short term economic pain
Speaker 8: with these teriffs. But then as we move back half
Speaker 8: of the year, we can actually see things start to improve.
Speaker 2: This is the heart of the matter. We had the
Speaker 2: vice chairman, Richard Claard in earlier and he went right
Speaker 2: to the X axis. Tell us what Nancy Lazar's X
Speaker 2: axis looks like, short, medium, long term. The effect of
Speaker 2: these tariffs and their reciprocity.
Speaker 9: Yeah.
Speaker 8: So first, let me say an Aletti is a good
Speaker 8: friend of mine, so thanks for having her on this morning. Second,
Speaker 8: and Richard is a terrific, terrific economist, which he was
Speaker 8: still at the FED. Bottom line is near term, if
Speaker 8: we get twenty percent across the board tariffs, which is
Speaker 8: what the chit chat is today, who knows that would
Speaker 8: be a tax on the US economy to the tune
Speaker 8: of minus two percent GDP. And so we currently our
Speaker 8: base case for two Q would be about would be
Speaker 8: two plus two percent GDP. So this basically takes it
Speaker 8: down to stall to stall speed. If there is retaliation,
Speaker 8: which there probably will be, you will probably have a
Speaker 8: negative second second quarter, assuming they're put in place. Assuming
Speaker 8: they're put in place immediately. As we go through the year,
Speaker 8: what's going to happen is you're going to start to
Speaker 8: see the substitution effect and you'll start to see the
Speaker 8: thing out of those price increases come down. And so
Speaker 8: as you move into the back half of the year,
Speaker 8: maybe later in the back half of the year, inflationary pressures,
Speaker 8: the tax pressures from these terraces starts to fade.
Speaker 9: Inflation starts to fade.
Speaker 8: Second, you hopefully do then also have the extension of
Speaker 8: the tax of the tax cuts. Again, these are not
Speaker 8: new tax cuts as of now. It's a full extension
Speaker 8: of tax cuts that are already in place. And it
Speaker 8: becomes more clear we are getting deregulation. So then in
Speaker 8: the back half of the year, maybe by the fourth quarter,
Speaker 8: could be potentially the third quarter, you see GDPs start
Speaker 8: to re accelerate, and we could get pretty bullish on
Speaker 8: the economy as we end the year something closer to
Speaker 8: three percent. Assuming these tariffs don't result in a global
Speaker 8: negative trade massive trade trade war, why could we get
Speaker 8: more positive again on showing is a very very big
Speaker 8: positive for the United States. We have a lot of
Speaker 8: productivity in this economy. AI is just going to make
Speaker 8: productivity even even stronger. Deregulation is going to be a
Speaker 8: huge quote unquote tax relief for middle sized companies. They've
Speaker 8: been squeezed dramatically from the surgeon regulation over the past
Speaker 8: over the past four years, small medium sized companies create
Speaker 8: eighty percent of the jobs in this country. And so
Speaker 8: at the end of the day, again you can see
Speaker 8: short term pain for sure. Let's hope that something doesn't
Speaker 8: crack as a result of this pain II.
Speaker 9: What weaklings crack usually do get hit.
Speaker 8: But as you move through the year, you can see
Speaker 8: prospects for a stronger economy again, assuming this thing doesn't
Speaker 8: really turn into a massive global trade war.
Speaker 6: Nancy, how do you what do you modeling out for?
Speaker 6: What are some of our big trade partners how they
Speaker 6: might respond here? It sounds like Kindada wants to take
Speaker 6: a tough stand here. We haven't heard too much out
Speaker 6: in Mexico, Europe. We're not sure. How do you model
Speaker 6: that out?
Speaker 9: Yeah, that's very, very difficult to model out.
Speaker 8: I was just in Europe last week, and quite frankly,
Speaker 8: I was trying to think, what did I see? That
Speaker 8: was American no cars, So they can't put tariffs on cars.
Speaker 8: They already have high tariffs on cars, and so it's
Speaker 8: not clear what they're going to do. Probably will be targeted.
Speaker 8: I was just talking to my ECO team about this,
Speaker 8: Probably will be targeted. They've already done motorcycles and some
Speaker 8: some whiskey, and it probably will continue to go down
Speaker 8: to go down that path. But again it's not clear
Speaker 8: how much of that stuff they actually buy from the
Speaker 8: United from the United States. I think the bigger issues
Speaker 8: are what we're going to see out of some of China,
Speaker 8: China in particular, just.
Speaker 2: In the Bloomberg here, folks with Nancy Lazar, I should say,
Speaker 2: a Piper Sandler with us right now, Nancy and this wonderful,
Speaker 2: generous conversation this morning. I'm looking at economic research come
Speaker 2: in and everybody's looking at charts that really show consumers
Speaker 2: slow down the granularity that you were so famous for
Speaker 2: over at the years, which is the Nancy Lazard chart
Speaker 2: right now that describes America, which is a chart that
Speaker 2: jumps out at you at Piper Sandler.
Speaker 8: So over the past two years, what we call public employment,
Speaker 8: public employment would include the government, federal, state, local education, healthcare,
Speaker 8: and consultants have generated ninety two percent of jobs over
Speaker 8: the past two years. The public sector has really been
Speaker 8: crowding out the private sector. You see it with that
Speaker 8: job growth. Private sector job growth has been flat for
Speaker 8: the past two years. Why because wages have been bid
Speaker 8: up because of this strong demand from these government oriented
Speaker 8: sectors of the economy. Again, federal government, state, local government, education, healthcare,
Speaker 8: and consultants. They've created ninety over ninety percent of the
Speaker 8: jobs over the past two years. That's just one way
Speaker 8: to highlight that government spending, which is about twenty five
Speaker 8: percent of GDP right now, which historically has happened only
Speaker 8: two times in the past, during COVID and during World
Speaker 8: War Two, has been this giant sucking sound from the
Speaker 8: private sector, keeping inflationary pressures higher for longer, keeping interest
Speaker 8: rates higher than they otherwise would be lowering productivity. And
Speaker 8: so our hope going forward and again looking on the
Speaker 8: bright side, because there's a lot of dark clouds right now,
Speaker 8: looking on the bright side, if indeed we can see
Speaker 8: some success in chipping away at government spending, you have
Speaker 8: more resources for the private sector, inflation really cools off,
Speaker 8: you get interest rates down for the right reason, not
Speaker 8: because of an extreme economic weakness, which may be unfolding
Speaker 8: right now. So that's really been my big concern about
Speaker 8: the US economy that we end up more like Europe
Speaker 8: where you have these bigger governments and you just don't
Speaker 8: have the strength of the private sector.
Speaker 9: So again I'm looking.
Speaker 8: At the glass half full longer term, with hopefully on
Speaker 8: the plus side, this administration can be successful in stopping
Speaker 8: this giant sucking sound of the government sector and have
Speaker 8: more resources available for the private sector because we have
Speaker 8: so much potential in the private sector. We're innovative onshore
Speaker 8: and has been a theme creating goods, producing jobs, and
Speaker 8: so back to me, is the single biggest headwind to
Speaker 8: the economy and it's got to change.
Speaker 6: So what we're hearing from a lot of companies on
Speaker 6: the most recent conference calls, and presumably we'll hear money
Speaker 6: upcoming earning conference calls, is this word uncertainty. And I
Speaker 6: think there's concern in the marketplace that gee, that could
Speaker 6: impact their ability to hire, their ability to spend money
Speaker 6: to invest in their businesses. How big of a concern
Speaker 6: is that for you? Just the level of uncertainty out.
Speaker 8: There huge, and when you have sustained period of high uncertainty,
Speaker 8: you definitely get the knock effects that you were just
Speaker 8: talking about. And so that again is a headwind to
Speaker 8: the economy right now. As we go through we're probably
Speaker 8: gonna see it in the Small Business Confidence Index data
Speaker 8: we're going to get next Tuesday, where small businesses are
Speaker 8: very uncertain. They've already pulled back on their cap X
Speaker 8: plans based on the work one of my colleagues, Dave
Speaker 8: Wigglesworth has done. The current increase in uncertainty does risk
Speaker 8: pulling GDP down about one and a half percentage point
Speaker 8: if it stays elevated. In particular, capital spending obviously large
Speaker 8: ticket items is most vulnerable. That could go down significantly
Speaker 8: if uncertainty stays high, to the tune of about seven
Speaker 8: percent drop in capital. In capital spending, big ticket item,
Speaker 8: you're going to postpone, potentially putting that in place until
Speaker 8: you understand what's going on with tariffs. And so the
Speaker 8: combination of the tariffs and this high uncertainty is a
Speaker 8: huge risk current to the second to the second quarter,
Speaker 8: and I agree with your point on company earnings.
Speaker 9: The one Q earning.
Speaker 8: Season we think is going to be very very uneasy,
Speaker 8: potentially negative. We already had United Airline highlight how even
Speaker 8: before the tariffs you had this cutback in government travel
Speaker 8: and at the end of the day that they saw
Speaker 8: business down fifty percent. And so yes, I think the
Speaker 8: one Q earning seasons could be very very difficult.
Speaker 2: Nancy, Thank you so much, Nancy Lazarea. It's just absolutely
Speaker 2: brilliant there on the combination the sum of so called
Speaker 2: government implements, schools, health, education, everything and ninety two percent
Speaker 2: growth at the march and just extraordinary perspective. Nancy Lazare
Speaker 2: with this paper. Sandler.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto
Speaker 1: with the Bloomberg Business App. You can also listen live
Speaker 1: on Amazon Alexa from our flagship New York station. Just
Speaker 1: say Alexa Play Bloomberg eleven thirty.
Speaker 2: Chrisman, former CIO, he was at Kelsters. He's retired. You know,
Speaker 2: he's like this for ever. This is great. Chris joins
Speaker 2: us this warning, Chris, what's so great about your experience
Speaker 2: is you know, one little thing you do, you can't
Speaker 2: move the needle because you got so much money. Where
Speaker 2: do you find alpha right now? In this Maelstrom.
Speaker 5: Tom, You know, it's a huge challenge, and global CIOs
Speaker 5: are just there. They're buff fuddles because the world is,
Speaker 5: how should I say, instead of chaotic. It's so flexible
Speaker 5: right now, and so a lot of we're sticking close
Speaker 5: to their traditional asset allocation. Others are using total portfolio approach,
Speaker 5: but they're really having to think about risks differently than
Speaker 5: they did before.
Speaker 6: And it's interesting, Chris. One of the phenomena that we've
Speaker 6: seen here in the first quart of trading is the
Speaker 6: dramatic underperformance of the US market versus the rest of
Speaker 6: the world levels we haven't seen since the eighties. Bloomberg
Speaker 6: News is reporting. Is this a short term trade, this
Speaker 6: underperformance or is it some more?
Speaker 5: Do you think make Europe grade again? You know, No,
Speaker 5: I think that it's part of the shift to more
Speaker 5: global and now more local economy. Like Tom knows, it's
Speaker 5: always the economy, Paul, and you know, it's interest rates and.
Speaker 2: Around the world.
Speaker 5: People were recognizing in the fourth quarter last year that
Speaker 5: the US had suddenly become two thirds of the global
Speaker 5: financial market. That's unusual, and we do revert to the
Speaker 5: norm over time. So we're starting to see that trade back.
Speaker 5: And I think people with a true global portfolio are happy.
Speaker 5: People that got concentrated in US tech are unhappy.
Speaker 2: Well, Meg seven come back. I mean, they got resilient.
Speaker 2: It appears they have above average revenue growth. It appears
Speaker 2: they have persistent free cash flow. Is this the opportunity, Chris,
Speaker 2: that you didn't have when they're traded in seventy times Pe?
Speaker 5: Well, they're still pretty rich. But you said at the
Speaker 5: beginning they've got free cash flow and they've got real earnings.
Speaker 5: That's the difference between you know, one oh two and
Speaker 5: the Internet bubble and now, so these are real stocks.
Speaker 5: They do have long but I think Wall Street like
Speaker 5: always overshot. It got over excited about AI. We're starting
Speaker 5: to see uptake. It's slow, it has profound implications, but
Speaker 5: it's over a long time period. It's not just revenue now.
Speaker 5: So you know, I think that people have to take
Speaker 5: a decision about how to buy those stocks. And do
Speaker 5: you buy all seven I doubt it. You buy a
Speaker 5: few of them, or you index? And you know me,
Speaker 5: I like indexing, so I just buy the whole market
Speaker 5: and trade with it.
Speaker 6: Hey, Chris, I know you host every other month call
Speaker 6: with some of these leading global CIOs.
Speaker 7: How do some of the.
Speaker 6: Non US money managers view what's happening here in the
Speaker 6: US here today? See there's a buying opportunity or are
Speaker 6: they you know, kind of fretful here?
Speaker 5: You know, they're applauding. I talked to a lot of
Speaker 5: people up in Canada, in Australia and New Zealand and
Speaker 5: in the EU, and they don't have a home country bias.
Speaker 5: They are truly global in their portfolio, but they're happy
Speaker 5: to finally see some diversification in some improvement because they
Speaker 5: have real assets, often in their home country, and their
Speaker 5: currency is a big focus. So the weakness and the
Speaker 5: dollar that's forecast is a huge trade for them and
Speaker 5: they see this as a bigger opportunity in their portfolios
Speaker 5: finally to diversify away from the USA.
Speaker 2: And what we do on Bloomberg Surveillance, folks, is to
Speaker 2: talk to somebody with a lot of experience about the
Speaker 2: marketing moment we're in, Paul. It's been at least a
Speaker 2: huge two year bull market.
Speaker 6: Right yeah, and it's been driven large bay.
Speaker 2: So what you do for scared people is you come
Speaker 2: up with the rude of strategies like call writing, option
Speaker 2: dividend enhancement, etc. It's runn them up right now. Everybody's
Speaker 2: doing it. They do it with bitcoin. Money flowing in,
Speaker 2: money flowing out right now on bitcoin. Chris Alman on
Speaker 2: the creative investments going on right now across Wall Street,
Speaker 2: including option writing and dividend enhancement. We've seen this before,
Speaker 2: haven't we? Oh?
Speaker 5: Yeah, no, Tom, You know, people reach ree yield and
Speaker 5: the old phrase pigs get slaughtered, lambs got get sheared.
Speaker 7: So people that are worried.
Speaker 5: You know, the institutional investors are very slow to uptake
Speaker 5: these new ideas. The one big common one is total
Speaker 5: portfolio theory, and it's just a different way to look
Speaker 5: at the world instead of traditional asset allocation. But they
Speaker 5: are not jumping into digital currencies. That's a hot debate
Speaker 5: for the three hundred club. They're not jumping into some
Speaker 5: of the derivative securities. They think they like good solid
Speaker 5: stuff like infrastructure. Paul and I used to talk about
Speaker 5: municipal bonds my favorite area. Good solid, steady income is
Speaker 5: still a sod after thing for a big institutional portfolio.
Speaker 6: Hey, christ In twenty twenty three and twenty four, the
Speaker 6: real theme there driving the markets high was AI as
Speaker 6: maybe epitomized by the mag seven. Is this a market
Speaker 6: or can the broader markets work if tech is not leading.
Speaker 5: It can Paul, because you know, we have seen what
Speaker 5: should be a decent economic boost with lower interest rates
Speaker 5: and some of the policy changes in theory, but it's
Speaker 5: been slow and I you know, you guys are seeing it.
Speaker 5: It's going to be the manufacturing numbers are going to
Speaker 5: be probably pretty startling. I think the average consumer is
Speaker 5: pretty slow, and I'm seeing empty storefronts, and I think
Speaker 5: retail sales are moderate, but they're not running gangbusters. So
Speaker 5: you know, it always comes back. It's back to the
Speaker 5: economy stupid. So take a look at that. The FED
Speaker 5: has got to be frozen in here. I mean, it's
Speaker 5: so hard to figure out what to do. But I
Speaker 5: think the economy is slow and so the market should
Speaker 5: be slow.
Speaker 2: Thank you for unretiring Chris Ellman Advisors Chris Elman with
Speaker 2: us this morning with all of his work for the
Speaker 2: California Pension System.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Apple Corplay and Android
Speaker 1: Auto with the Bloomberg Business app. You can also watch
Speaker 1: us live every weekday on YouTube and always on the
Speaker 1: Bloomberg terminal.
Speaker 2: Right now important what's in the Newspaper's mateo in at
Speaker 2: one am trying to sort it out? What do you got?
Speaker 10: First of all, people are asking where's the bow tie?
Speaker 10: I want to just point that out on the live chat.
Speaker 2: Can you explain it? Ripped? For the first time ever,
Speaker 2: I put it on shoddy French material and it ripped in.
Speaker 6: A wardrobe malfunction is what it's called bullet time.
Speaker 2: Listen, do you have a backup? And I'm like, no,
Speaker 2: that would make too much sense.
Speaker 6: No, you need the back Sorry, we're efforting that with
Speaker 6: the team here.
Speaker 2: To get a backup.
Speaker 10: Well, speaking of the live chat YouTube, this is some
Speaker 10: interesting news about YouTube about to surpass Disney is the
Speaker 10: biggest media company in the world now. This is according
Speaker 10: to Mafitt. Nathan is an analyst. Michael Nathan, who actually
Speaker 10: is going to join us in the eight o'clock hours,
Speaker 10: didn't even realize that, but YouTube, the second biggest media
Speaker 10: company in the world last year, brought in fifty four
Speaker 10: point two billion twenty twenty four, and that was just
Speaker 10: five point five billion behind Disney. And he predicts twenty
Speaker 10: twenty five YouTube should really eclipse and become the biggest
Speaker 10: media company in the world.
Speaker 4: Pool.
Speaker 6: Yeah, and it's only twenty years old. But it just
Speaker 6: goes to show that's where the audience is going and
Speaker 6: where the audience goes advertising revenue, followers and as Michael
Speaker 6: points out in his research note which came I guess day,
Speaker 6: I read every word of it, subscription revenue too, So
Speaker 6: it is people cut the cord. It's not that they're
Speaker 6: not willing to pay for content, it's just which content
Speaker 6: they want to pay for, and they're happy to pay
Speaker 6: for this YouTube content.
Speaker 10: And what's interesting too, is that the audience they're shaying
Speaker 10: went from the younger audience and now it's growing beyond
Speaker 10: just kids. I mean, every one is kind of.
Speaker 2: Sure if they get their fidelities straightened out, YouTube music
Speaker 2: will win in two days. The search algorithm is so
Speaker 2: superior to the others, but they got to get the
Speaker 2: fidelities straight Now it doesn't.
Speaker 6: Sound And again we got Michael Nathanson, the author of
Speaker 6: that research note from off It Nathanson coming up in
Speaker 6: a few moments.
Speaker 10: Not bad, not bad. Also speaking to Disney, since we're
Speaker 10: on the same topic, Disney snow White. We talked about
Speaker 10: it yesterday right tanking at the box office. But Paul,
Speaker 10: like Fas said, it's no biggie Why because yes.
Speaker 6: Well, I mean this is content that they're going to
Speaker 6: have all across their platforms, including some new stuff at
Speaker 6: the theme park.
Speaker 2: Are we going to watch it on the streets?
Speaker 10: Yeah, digital copies, renting video on demand, then you have Disney, Hulu, ABC, like,
Speaker 10: it's going to play across.
Speaker 2: But if we don't watch it in the theater, why
Speaker 2: do we think we're going to watch it?
Speaker 10: Because they say studies show that films that have controversy,
Speaker 10: which this one did have behind it will take people
Speaker 10: out from the theaters, but they'll be more engaged to
Speaker 10: watch you by the streaming.
Speaker 4: I do.
Speaker 6: But at the end of the day, they wanted to
Speaker 6: make five yeah, maybe a billion global gross and they're
Speaker 6: not gonna get anywhere near it. So so from there
Speaker 6: it's a disappointment and the people in the film division
Speaker 6: are getting their knuckles wrapped because this was a big mess.
Speaker 2: So do they write it off so they don't pay
Speaker 2: as much tax on the money you're giving them at
Speaker 2: Disney World.
Speaker 6: Now you get into film accounting, which is the most
Speaker 6: craziest accounting in the world, just as any a list
Speaker 6: TV stars or move movie star thanks to their owed
Speaker 6: to back end and then studio says, so we didn't
Speaker 6: make any money, So what do you mean he had
Speaker 6: a billion dollars?
Speaker 2: I mean, Lisa's like screaming and spired it. Where's my backhand?
Speaker 2: I was looking exactly next?
Speaker 10: All right, last one I'm pulling all well, going all
Speaker 10: the way to the end. Canadians, they're drawing some inspiration
Speaker 10: from a hockey legends rough style of play. I'm sure
Speaker 10: you're familiar with him, Tom Canadian Gordie Howe aka mister
Speaker 10: Hockey Right, nice guy on the ice, but he was
Speaker 10: quick to throw his elbows up oponents who contested him,
Speaker 10: so he got this nickname Mister Elbow. So the Wall
Speaker 10: Street Journal is saying Canadians are now turning to this
Speaker 10: elbows up movement there. It's a rally against President Trump's
Speaker 10: tariffs threats to make Canada the fifty first state. So
Speaker 10: it's like another one of those things. Yeah, yeah, So
Speaker 10: it kind of took off. If you remember Mike Myers
Speaker 10: on Saturday Night Live, he like did something on it
Speaker 10: and that sparked it. You know, he like pointed to
Speaker 10: his elbow, wore like the shirt that said Canada is
Speaker 10: not for sale. He's from Canada, and so that sparked it.
Speaker 10: But then at the same time you have Wayne Gretzky
Speaker 10: who's getting the cold shoulder because he supports President Yeah.
Speaker 2: Dark Floorido Toronto came out I believe yesterday, and I'm
Speaker 2: sure quite the day the Leader of Ontario defended Wayne Gretzky.
Speaker 2: He said enough, he said he was, you know, misquoted
Speaker 2: or whatever. I don't know in details as well, elbows up?
Speaker 2: Is it? Like is Carnie? And you know the other
Speaker 2: politicians are the heading for a minor, a major minor
Speaker 2: a misconduct? Who knows? Lisa Poteo, thank you so much
Speaker 2: the news.
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify,
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