Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg
Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern
Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business app.
Speaker 1: Listen on demand wherever you get your podcasts, or watch
Speaker 1: us live on YouTube.
Speaker 2: Even if you didn't read the eight hundred and thirty pages.
Speaker 2: It had a lovely purple lavender cover and you could
Speaker 2: walk around campus toading your Absfeld and rogueoff and you
Speaker 2: get cool points just for that. Joining us now. One
Speaker 2: of the Foundation academics we have on our international macroeconomics
Speaker 2: Maurice Obsfeld. He's with the Peterson Institute with Posen and Blanchard.
Speaker 2: He is at Berkeley forever and always professor. Thank you
Speaker 2: so much for joining us. What I see in percolate
Speaker 2: right now, Maurice Sobsfeld, is real tensions about supply lines
Speaker 2: falling apart, supply lines fragile because of tariffs, the interstitial,
Speaker 2: the interstitual.
Speaker 3: Wiring of our trade system. Is it broken.
Speaker 4: It's not broken yet, but it's understrained. It's understrained because
Speaker 4: of tariffs. It's understrained because of geopolitical tensions. It's understrained
Speaker 4: because of the trade war. And we can see this
Speaker 4: and the threats flying back between President Trump and China
Speaker 4: right now over everything from shipping to rar earths to
Speaker 4: cooking oil.
Speaker 2: There just seems to be two Americas, one affected by
Speaker 2: goods and trade worry and angst, in another a financial boom.
Speaker 2: Like Morgan Stanley, can we exist like this?
Speaker 4: Well, you know, the US economy has become increasingly financialized
Speaker 4: over the decades, and you know, at some level, the
Speaker 4: US is the world's banker at this point. And interestingly,
Speaker 4: finance hasn't seen the kind of backlash that we've seen
Speaker 4: against trade. You know, trade is blamed for deficits with
Speaker 4: other countries, it's blamed for the declient of manufacturing. You know,
Speaker 4: we don't see people wanting to curb financial transactions. Quite
Speaker 4: the contrary, we're seeing deregulation stable coins and the like.
Speaker 4: So there really really is a divorce between those two sectors.
Speaker 4: And you know, the question I have is can that
Speaker 4: go on forever?
Speaker 3: Yeah?
Speaker 4: Or will the trade tensions eventually feed into the financial sphere?
Speaker 5: I think they will.
Speaker 6: And Professor, that's kind of where we are right now.
Speaker 6: The folks that are supporting tariffs. They say, we are
Speaker 6: not seeing.
Speaker 7: The economy slow down.
Speaker 6: We recently had a very strong third quarter GDP print,
Speaker 6: not seeing a material increase in inflation data, although we
Speaker 6: are now lacking data because of the shutdown. So again
Speaker 6: the supporters of tariffs are saying, we're just not seeing
Speaker 6: those economic headwinds coming from tariffs. So my question to
Speaker 6: you is is it just a matter of time or
Speaker 6: are corporations adapting?
Speaker 5: Oh? I think it's a matter of time.
Speaker 4: There is some adaptation, of course, as corporations look for
Speaker 4: cheaper suppliers.
Speaker 5: But you know, just look at what we've seen.
Speaker 4: We have not seen any material fall in the dollar
Speaker 4: prices that foreign countries charge for US. We've seen some
Speaker 4: limited increase in consumer prices of imported goods and close
Speaker 4: substitutes for those imported goods, but not enough to offset
Speaker 4: the tariff. But we've also seen substantial revenue coming into
Speaker 4: the treasury from tariffs, which is being paid by our importers.
Speaker 5: So how do you square that circle?
Speaker 3: Right?
Speaker 4: You square it with a hit to profitability and with
Speaker 4: the observation that firms have been swallowing these tariffs to
Speaker 4: some extent while they wait for tariff policy to stabilize
Speaker 4: and figure out what it's going to be going forward
Speaker 4: now that we kind of know where we are with tariffs.
Speaker 4: To some extent, I think firms are going to be
Speaker 4: adjusting by passing those cost increases on.
Speaker 2: Professor Obsfeld synthesize here, say the work of Douglas or
Speaker 2: when at Dartmouth with down the hall from you at Berkeley,
Speaker 2: Barry Kengreen, and this whole trade up set and the
Speaker 2: risk to the dollar. This goes back to Obsfeld, Rogueoff,
Speaker 2: and frankly back to Mundell. I'm assuming you don't have
Speaker 2: a fear of the gloom crew on a dollar.
Speaker 3: Is that correct? The gloom crew?
Speaker 4: You know, I'm worried long term about the status of
Speaker 4: the dollar. I think they're very strong forces keeping the
Speaker 4: dollar in the prime position it's in in global markets
Speaker 4: as the world's currency. But foreign countries are increasingly worried
Speaker 4: about the kind of course of punitive actions that this
Speaker 4: administration has been taken to enforce its will globally, not
Speaker 4: just in the trade sphere, but looking at issues like
Speaker 4: internal politics. You know, we see this across the board
Speaker 4: for positive and negative. The Treasury right now is bailing
Speaker 4: out Argentina for largely political reasons. So I think I
Speaker 4: think the bottom line is that that foreign countries no
Speaker 4: longer trust the US as a responsible steward of the
Speaker 4: global economy are going to seek to decouple and sure
Speaker 4: themselves against policy volatility emanating from right.
Speaker 2: Here, Mars, I gotta get a breaking news, Paul. Can
Speaker 2: I ask a rude question of Professor Hobsfeld? Yeah, professor,
Speaker 2: and iiching green question for you, Maurice Hobsfeld on gold
Speaker 2: at four dollars announce?
Speaker 3: What would Barry say?
Speaker 4: I'm not going to speak for Barry, my good and
Speaker 4: longtime friend, but I think he would say that.
Speaker 5: I guess I am speaking for him. I want to
Speaker 5: speak for myself.
Speaker 4: Barry and I agree about a lot of things, not everything.
Speaker 4: You know, gold is a bell weather of fear, and
Speaker 4: the escalation in its price is far beyond what you
Speaker 4: would expect to see coming from inflationary fears. Although I
Speaker 4: think that's part of the picture. I think it be
Speaker 4: tokens a shift into something that is perceived as safer
Speaker 4: than the dollar and not subject to.
Speaker 5: Extra territorial action by the US.
Speaker 4: I mean, you know, we've seen the escalation and price
Speaker 4: We've also seen increasing purchases of gold by emerging market
Speaker 4: central banks. A lot of that is China, but not
Speaker 4: all of it is China, Okay, So that I think
Speaker 4: tells us something.
Speaker 5: About the fear out there.
Speaker 4: And you know, the escalation and bitcoin prices is a
Speaker 4: similar phenomenon.
Speaker 3: Professor got to leave it there too short a visit.
Speaker 3: Thank you so much.
Speaker 2: Thank you to you and the Peterson Institute, Adam Posen,
Speaker 2: Professor Blanchard and others for just great support of what
Speaker 2: we do. Marky Sobsfeld forever from the University of California
Speaker 2: at Berkeley.
Speaker 3: Stay with us.
Speaker 2: More from Bloomberg Surveillance coming up after this.
Speaker 1: Are 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 Otto with the Bloomberg Business app, or
Speaker 1: watch us live on YouTube.
Speaker 2: Chris Whalen is definitive on the American financial system. I'm
Speaker 2: standing or surrounded by dinosaurs in Houston, and I'm going
Speaker 2: I think I got Chris Whalen in a couple of days.
Speaker 2: Must listen for Global Wall Street, he joins us. Now
Speaker 2: I can't say enough about his value to the American
Speaker 2: financial system, his history, his books, and also his work
Speaker 2: at Whaling Global Advisors. Chris, I'm just going to cut
Speaker 2: to the chase. First Brands try Coller have a Are
Speaker 2: we living two thousand and six?
Speaker 8: Chris Whalen, Yeah, we're kind of repeating the same mistakes.
Speaker 8: You know, if you don't have a trustee to hold
Speaker 8: the paper, then you have double pledges of collateral. Remember
Speaker 8: bear Stearns. Yeah, I'm familiar, same same things. So it's
Speaker 8: called fraud. And you know, the terms on a lot
Speaker 8: of deals in the past ten fifteen years have loosened
Speaker 8: in favor of the issuers to the disadvantage of investors.
Speaker 8: And First Brand is a case in point.
Speaker 2: Chris Wayman, there was no other question at my CFA
Speaker 2: meeting in Houston, no other question. What's the contagion You're
Speaker 2: expert at the history of this. Come on, Is it
Speaker 2: like Continental Illinois? Is it like bear Stearns? As you mentioned,
Speaker 2: what's a contagion factor? In October of twenty twenty.
Speaker 8: Five, it's brewing. We won't really see it until we do.
Speaker 3: So.
Speaker 8: The commercial side of the equation is where the problems
Speaker 8: are for the banks, right now they are trying to
Speaker 8: hide them as best they can. We've just changed the
Speaker 8: accounting rules for loan modifications, by the way, so if
Speaker 8: it pays for twelve months, we pretend the loan was
Speaker 8: never modified. How cool is that? And I think that
Speaker 8: the industry of the rate laters are all walking past
Speaker 8: the graveyard because private equity, commercial real estate, all of
Speaker 8: these sectors are still having significant problems. On the other hand,
Speaker 8: consumer is quiet. We've been releasing reserves and reducing provisions
Speaker 8: for loan loss on the consumer side because there's nothing
Speaker 8: happening yet that may come next year. But the commercial
Speaker 8: side is where the action is right now, Tom.
Speaker 6: Chris, I've learned a new term, I guess in the
Speaker 6: last few weeks, and that is the basement trade. Where
Speaker 6: is my understanding is investors are saying, I'm worried about
Speaker 6: all this government spending around the world, So maybe I
Speaker 6: don't want to own government securities like currencies, maybe even
Speaker 6: the government debt, and that includes the US stuff.
Speaker 7: Maybe I'll buy some other stuff like gold. What do
Speaker 7: you make of that?
Speaker 8: I've been telling my readers to put at least ten
Speaker 8: to fifteen percent of their total allocation in the gold
Speaker 8: for most of this year, and I think it's solely
Speaker 8: beginning to start for the simple reason that there isn't
Speaker 8: a lot of deliverable supplying gold. People are worried about deficits.
Speaker 8: They are worried about the dollar, and I think they're
Speaker 8: right to do so. The dollar is probably going to
Speaker 8: continue to go down. We have structural problems in this country.
Speaker 8: You notice Chairman Powell is talking about continuing to shrink
Speaker 8: the balance sheet.
Speaker 3: Why.
Speaker 8: As Bill Nelson at Bank Policy Institute wrote this week,
Speaker 8: the Fed funds market may collapse thanks to the big
Speaker 8: balance sheet. So we have a lot of issues. In
Speaker 8: the background. The markets look great AI, everybody's still making
Speaker 8: tons of money. But in the background, people are worried
Speaker 8: because when you have these old time highs one after another,
Speaker 8: they tend to not be confirmed after a while.
Speaker 2: For Global Wall Street Worldwide on YouTube, across all of
Speaker 2: our audio product Christopher Whalan joins us his one volume
Speaker 2: on the American Financial system, my book of the Year.
Speaker 2: Ages ago were begging him, He's going to put a book.
Speaker 2: DiCaprio skeed.
Speaker 7: Oh, I got to signed up and continue with Chris Whaley.
Speaker 3: Chris talked to us.
Speaker 6: About liquidity in the marketplace, and I'm thinking about not
Speaker 6: so much as stock market, but just kind of across
Speaker 6: the fixed income space, maybe the currency space.
Speaker 7: Is that a worry for you, Yes.
Speaker 3: Very much. So.
Speaker 8: It's almost like we're back to December twenty eighteen when
Speaker 8: Jerome Powell almost ran the ship aground. You recall they
Speaker 8: pivoted very quickly in January nineteen and started easing. That's
Speaker 8: when they went to this ample reserve policy that they've
Speaker 8: had since then.
Speaker 3: And I think that what we're worried about.
Speaker 8: Is that the model that the FED uses to judge
Speaker 8: whether liquidity is adequate or not is based on GDP,
Speaker 8: which has nothing to do with anything. Liquidity is highly compartmentalized.
Speaker 8: It does not flow one way in another, so you
Speaker 8: really don't know until there's not enough.
Speaker 5: Chris, I think that's where we are today.
Speaker 2: I gotta get two things in here. It's too important.
Speaker 2: Sweeney's lined up. Sweeny's got notes this morning for Chris Whalen.
Speaker 2: I have Christopher Waller tomorrow. What is Chris Whalen's question
Speaker 2: for Governor Waller A presultive chairman, What's your question?
Speaker 3: Whalen?
Speaker 8: He was very bullish on shrinking the balance sheet earlier
Speaker 8: this year. Ask him how he feels now? Ask him
Speaker 8: where round is now?
Speaker 3: I don't have to work.
Speaker 8: We're landing in the fall. We don't have an altimeter. Okay,
Speaker 8: where is the ground? Does he know? That's the key question?
Speaker 5: Broll.
Speaker 3: Yeah, we'll try to get to that again.
Speaker 2: You're going to see that in the nine o'clock hour
Speaker 2: tomorrow with Christopher wall in his speech at the Council
Speaker 2: and Foreign Relations, and then I will grill him as
Speaker 2: best I can. He's really quite He's a prodigious intellect, folks,
Speaker 2: particularly in the game theory of central banking.
Speaker 3: Okay, Chris, let's go to it right now.
Speaker 2: I suggest that the major banks, led by JP Morgan
Speaker 2: and Bank of America literally are hiding how proud comfitable
Speaker 2: they are. In the Whalen history, back to Granpa Whale
Speaker 2: great great Grandpa Whalen was with Alexander Hamilton. A few
Speaker 2: years ago, Chris Whalen described the profitability of this modern
Speaker 2: era of ginormous big banks.
Speaker 8: I'm not sure that they're that much more profitable today
Speaker 8: than they have been in the past. Asset returns are
Speaker 8: barely one percent. They are giving back capital because they're underutilized.
Speaker 8: Why are they lending all this money to non bank,
Speaker 8: non depository institutions because loan demand otherwise is pretty slack.
Speaker 8: You know, deposits are growing twice as fast as demand
Speaker 8: for loans. So hopefully when rates fall, we'll see volumes
Speaker 8: pick up a bit like last September. This September two,
Speaker 8: by the way, is going to turn out to be
Speaker 8: a very good month for banks and non banks. But
Speaker 8: you know, the bottom line is that there are so
Speaker 8: many alternatives to traditional banks now that have been spawned
Speaker 8: in the equity markets and are funded with actity and debt,
Speaker 8: that you have plenty places to go spawn.
Speaker 3: Yes, exactly, only way they would say spawn, private credit.
Speaker 7: Was spawned exactly. Hey, here, get your thoughts on the
Speaker 7: housing market.
Speaker 6: Broady defined here that affordability issue continues to be a huge,
Speaker 6: huge issue for people, particularly young people. I got a
Speaker 6: mortgage rate still got a six handle out there, and
Speaker 6: I've got housing costs that are fifty percent since twenty nineteen.
Speaker 7: This is a problem, isn't it.
Speaker 8: It is, But it's a problem that's going to be fixed.
Speaker 8: Donald Trump is going to goos to housing market with
Speaker 8: his friend Bill Polti. They want to support homebuilders at
Speaker 8: a time when the homebuilders have already got too much inventory.
Speaker 8: Supply has caught up with demand. And remember the prediction
Speaker 8: of my good friend Stan Middleman, the founder of Freedom
Speaker 8: Mortgage Misery on the eighths. I think we see a
Speaker 8: maxi home price reset in twenty twenty eight. If you've
Speaker 8: got that high coupon mortgage, wait a little bit and
Speaker 8: maybe go into a floater, and then you'll be able
Speaker 8: to refinance it much lower in a couple of years.
Speaker 6: So, Chris, I guess the question is that there seems
Speaker 6: to be a housing shortage in this country.
Speaker 7: I'm not sure how he got there. How do you
Speaker 7: think that happened in.
Speaker 8: Some parts of the country, not everywhere here in New York,
Speaker 8: in the Blue States where we don't build. Yes, it's
Speaker 8: astounding to me because this is a market that had
Speaker 8: very poor volumes before COVID, but the prices keep going
Speaker 8: up because nobody's building houses. Down south, we have the
Speaker 8: opposite problem. Chris Carolina is in Texas, Florida. We are
Speaker 8: up to our ear lobes and.
Speaker 2: Support Michael Barrowe's equal time. Chris Whalen quickly here every
Speaker 2: Brady undergraduate wants to know when's the new book come out?
Speaker 8: Well, the second edition should have inflated is out, of course,
Speaker 8: and I did that for you. David Kotok did the introduction,
Speaker 8: by the way, very cool, and we're working on a
Speaker 8: gold book for next year, which will be very good.
Speaker 3: You'll probably talk to Iike agreed. That's the way. Chris
Speaker 3: Whalen rules. Christopher Whalen, thank you so much.
Speaker 2: I can't say enough, folks the importance of his skepticism
Speaker 2: about some of the verbiage of our financial system.
Speaker 3: Stay with us.
Speaker 2: More from Bloomberg Surveillance coming up after this.
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 3: She had a.
Speaker 2: Huge impact the last time she was on. Fatima Bulani
Speaker 2: joins us. She is at City Group and she is
Speaker 2: hard wired into the technology and software industry. Fatima Bulani
Speaker 2: joins us for an important brief this morning. Burying your
Speaker 2: note Fatima work. Not only in the first inning, the
Speaker 2: guy the third batters of the ondeck circle. You've got
Speaker 2: six percent of software spend is on AI. Where is
Speaker 2: that software spend on AI in one year, in three years,
Speaker 2: in five years.
Speaker 9: Well, it's it's a race to catch up here. You know,
Speaker 9: we have the pleasure and privilege of running our CIO
Speaker 9: survey every quarter, so excellent time series data and information
Speaker 9: about you know, an average organization and very large organizations
Speaker 9: appetite and proclivity to invest in particular parts of their
Speaker 9: IT infrastructure. And you know, I think the trends we
Speaker 9: are seeing as we're inching closer and closer to having AI,
Speaker 9: generative AI and related efforts to operationalize this concept of
Speaker 9: AI really showing up in the budgets and the wallet
Speaker 9: and the wallet allocation, and so you know, I think
Speaker 9: it's it's tough tough to sort of, you know, look
Speaker 9: into the crystal valid say that six percent is going
Speaker 9: to become twelve percent in the next twelve months. But
Speaker 9: the infrastructure spending and the velocity with which we're seeing
Speaker 9: so much capital being thrown at, you know.
Speaker 5: Enabling the AI enterprise, you know, it's.
Speaker 9: Only a matter of time till organizations catch up, and really,
Speaker 9: you know, one of the gating factors, and ultimately there
Speaker 9: are several gating factories. There's a lot of spaghetti being
Speaker 9: thrown on the wall way zat Black.
Speaker 2: Recking and VIDIA forty billion today a small number moments ago,
Speaker 2: Oracle collaborates with Microsoft to enhance supply chain efficiency.
Speaker 7: There you go, I have no I no idea.
Speaker 3: Only Fatima knows what that is.
Speaker 6: Fatima, I know in your survey here the next twelve
Speaker 6: month IT budget growth weakens with the US and EMEA
Speaker 6: below historical levels.
Speaker 7: Why is that? Do you think? You know, I think the.
Speaker 9: Inference there is there's most likely some share shift happening. Right,
Speaker 9: Most I organizations have the unfortunate uh decision and dilemma of,
Speaker 9: you know, keeping the lights on. So you have to
Speaker 9: invest in existing uh in your existing footprint of it
Speaker 9: UH infrastructure and capabilities just to keep the lights on.
Speaker 9: But then at the same time you have to sort
Speaker 9: of invest where the puck is going. Look at me
Speaker 9: mixing my metaphors, right, and so that's very like, yeah,
Speaker 9: that's the partial Canadian and me talking, and so really
Speaker 9: it's uh, you know this this notion and this inference
Speaker 9: of we're going to see some wallet share shifting in
Speaker 9: terms of allocation and right, so, uh, how how do
Speaker 9: you avoid starving?
Speaker 6: Uh?
Speaker 9: You know, initiatives that help keep the lights on in
Speaker 9: the organization whilst also straddling this executive and boardroom mandate
Speaker 9: of we have to do something with AI, we have
Speaker 9: to invest in AI, we have to create capabilities and operationalize. Uh,
Speaker 9: these AI efforts to build busines, this value and delivered
Speaker 9: business value.
Speaker 6: It seems like all Tom and I talk about all
Speaker 6: day is AI. But your survey indicates that cybersecurity remains
Speaker 6: the number one investment priority.
Speaker 7: Talk to us about that.
Speaker 9: Yeah, I rtially joke that once cybersecurity falls off the
Speaker 9: number one perch, you know, wake me up when that happens.
Speaker 9: Because this has been a very very consistent theme and
Speaker 9: trend in over a decade of survey results and survey
Speaker 9: work that we've done. Right that being said, you know,
Speaker 9: cybersecurity has become this this snowballing, this juggernaut of a
Speaker 9: priority for boardrooms and now especially now because you're a
Speaker 9: tech surface, has you know, effectively metastasized, right, I mean
Speaker 9: back in the nineteen nineties, it was your corporate network
Speaker 9: and the Internet you just had to protect. You know,
Speaker 9: you just have to bear your corporate net the work
Speaker 9: against the Internet. And now it's cloud, it's remote workers,
Speaker 9: it's you know, your distributed offices, it's AI, right, and
Speaker 9: so the new blind spots, the exposure, the susceptibility of
Speaker 9: what used to be a pretty tightly controlled network is
Speaker 9: completely unfurled, right, and so you kind of get the
Speaker 9: dynamic of your entire attack surface not only has increased,
Speaker 9: it's also changed and it's so much more nuances. And
Speaker 9: so that's why, you know, cybersecurity is sort of going
Speaker 9: to be the perennial number one spot. And you know,
Speaker 9: one of the things that you sort of asked me
Speaker 9: earlier was, well, what's stopping organizations from taking six percent
Speaker 9: of their IT budgets allocated towards AI initiatives? The twenty
Speaker 9: twenty five fifty cybersecurity is one of those reasons.
Speaker 2: Okay, yeah, Fatima, that's just brilliant Mark Bergenfolks his brilliant effort.
Speaker 2: I read a cover to cover like comments, subscribe Mark
Speaker 2: Bergen's Definitive book on YouTube. Thank you for that, He
Speaker 2: writes this morning for Bloomberg news Fatima, Microsoft cuts forth
Speaker 2: n scaled deal with Texas AI data center they're going
Speaker 2: to build. I love this, Paul, thank you for Bloomberg
Speaker 2: AI n scale two hundred and forty megawatts of power.
Speaker 2: The site will deploy one hundred and four thousand new
Speaker 2: Nvidia Corp.
Speaker 3: Chips. The rest of it I don't understand.
Speaker 2: I mean, Fatima, how does a pro like you who's
Speaker 2: worried about cash flow at Microsoft, how do you bring
Speaker 2: in this utility constraint that Mark Bergen writes about this morning.
Speaker 7: You know, it's a fair question.
Speaker 9: And the way I will frame this for you is,
Speaker 9: you know, organizations are principally trying to solve for productivity gains, right,
Speaker 9: you know, business value, productivity gains, et cetera. So a
Speaker 9: lot of what we're seeing on the software side in
Speaker 9: terms of the monetization question, right, we're seeing the picks
Speaker 9: and shovels trade in the AI trade opportunity on fire.
Speaker 9: It is absolutely in fuego.
Speaker 3: Right.
Speaker 9: And you know one of the main overhands on the
Speaker 9: aggregate enterprise software space is when are software vendor is
Speaker 9: going to get paid for all this stuff? Right?
Speaker 2: Right? Okay, we got to go Fatima, that's precisely the
Speaker 2: worry that Lisa Matail has about AI.
Speaker 3: Do you worry that the software vendors will get paid?
Speaker 9: You know, we think software vendors are going to get paid,
Speaker 9: but it's important and critical to pick your spots.
Speaker 7: Uh.
Speaker 9: You know, we like to bifurcate the entire enterprise software
Speaker 9: space into application and infrastructure, and we're firm believers that
Speaker 9: the infrastructure software space is going to be the more
Speaker 9: insulated of the two you have. I'm certain you've heard
Speaker 9: the terms of vibe coding and large language models, you know,
Speaker 9: chasing application software companies, you know, you know, out of
Speaker 9: the room, right, And so there's a general view and
Speaker 9: we'd subscribe to this as well that if you provide tooling, software,
Speaker 9: plumbing and tooling that's sort of behind the scenes, that's
Speaker 9: a better position to be in terms of monetizing and commercials.
Speaker 3: Paul's yelling at me, go to Bar Fatima.
Speaker 2: I got twenty seconds your single best buy right now
Speaker 2: at City Group.
Speaker 9: A big fan of a company called Rubric RBRK. Not
Speaker 9: one that's on everyone's lips. It's not one that's talked
Speaker 9: about very much, but in an era where data is
Speaker 9: going to explode. The fidelity and integrity of your data
Speaker 9: is going to determine how good your AI applications are.
Speaker 9: Oh and by the way, if there's a cyber attack
Speaker 9: that happens and you have to recover all this business data,
Speaker 9: rubric is the play Ruber way to play RBRK.
Speaker 3: Is that right?
Speaker 7: Yeah, it's a that's right.
Speaker 6: Sixteen billion dollar market cap stocks up about twenty percent
Speaker 6: year to date, is doubled over the past twelve months.
Speaker 7: So it's been a oh good and a good one there.
Speaker 2: Yeah, she didn't call me on this Fatima, let me
Speaker 2: down and didn't call me up a stupid bye.
Speaker 3: This good morning. Palo Alto, yep three employed a stronger
Speaker 3: for the team of belining jes love it. Thank you
Speaker 3: so much. She is with City Group. Stay with us.
Speaker 2: More from Bloomberg Surveillance coming up after this.
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: Time out for the daily look. It is the front
Speaker 2: pages around the world.
Speaker 7: Do we thank Lisa for the newspaper.
Speaker 3: Tell me there's nothing on the banks.
Speaker 10: No, nothing on the bank we got. Okay, have you
Speaker 10: gotten those annoying scam text messages?
Speaker 7: I know it's like page Tim.
Speaker 3: Cook, I know you're listening.
Speaker 7: Do something, fix it, fix it.
Speaker 10: Okay, Well we now know who's behind this. So this
Speaker 10: is in the Wall Street Journal. Really interesting. The Department
Speaker 10: of Homeland Security is saying criminal organizations in China have
Speaker 10: made more than a billion dollars in the last three
Speaker 10: years through those test mech text scams. They have sim farms,
Speaker 10: that's how they do a lot of it. They use
Speaker 10: the credit card info. They buy iPhones, gift cards, clothing, cosmetics.
Speaker 2: Are well, yesterday it was absolutely verbatim text message hey
Speaker 2: that I can't remember the vendor.
Speaker 3: It wasn't the bank, it was somebody else, Paul.
Speaker 5: It was perfect.
Speaker 7: Yeah, mine was his easy pass. Yes, all over the place.
Speaker 7: My kids got them. It's so who knows. But I'm like,
Speaker 7: I'm not paying anybody door.
Speaker 1: Yeah.
Speaker 10: So this is the thing they they're trying to like do.
Speaker 10: They can't do anything about it. It's a man of
Speaker 10: the moon exactly exactly. But they just if you look
Speaker 10: at the article. It really goes into the whole process
Speaker 10: of how there's videos showing the people doing it. I mean,
Speaker 10: it's it's such an intricate process. But yes, the question
Speaker 10: still remains, what are we going to do about it?
Speaker 7: Okay?
Speaker 10: So this I'm going to pull an audible on this
Speaker 10: because since we go from tech scams, remember the scam
Speaker 10: in London, all these phones being stolen all the time,
Speaker 10: eighty thousand phones stolen in the city last year. So
Speaker 10: the police are saying it goes to the black market
Speaker 10: for European cell phones in China.
Speaker 7: Here we go again, the same phones.
Speaker 10: Some are reset, they're sold to new users in Britain,
Speaker 10: but a lot of them they're shipped to China and
Speaker 10: also Algeria and China. The newest phones they could be
Speaker 10: sold for like five thousand dollars. So this is what's
Speaker 10: going on there. So the reasoning behind that, because you
Speaker 10: hear those stories the.
Speaker 2: Tech management, all these guys with the gajillion dollars they're
Speaker 2: showing up for FaceTime with the president.
Speaker 3: This is where they could really help people, yep, with
Speaker 3: their technology. I just don't get it.
Speaker 10: I don't either, Okay, I want to go to this
Speaker 10: new ranking. It shows the declining strength of the US passport.
Speaker 10: This isn't a Washington Post. It's the latest edition of
Speaker 10: the Henley Passport Index. So this index basically ranks nations
Speaker 10: based on the number of destinations someone can go to
Speaker 10: and visit without needing a visa. Okay, so it shows
Speaker 10: the US passport. It's fallen out of the top ten
Speaker 10: most powerful passports globally the first time in twenty years.
Speaker 10: It's now at number twelve, tied with Malaysia.
Speaker 5: There you go.
Speaker 3: A decade ago it was.
Speaker 10: At number one, so you could see the declining. Singapore
Speaker 10: is the number one spot one hundred and ninety three destinations,
Speaker 10: followed by South Korea and also Japan.
Speaker 6: I got the Irish passport back in the day, like
Speaker 6: thirty years ago. They were given them a litt Yeah,
Speaker 6: they were literally did you get.
Speaker 3: A case to gain us with that?
Speaker 5: No?
Speaker 7: But I used it after nine to eleven. I had
Speaker 7: a lot of travel.
Speaker 6: After nine eleven, I felt more comfortable with the Irish
Speaker 6: reelaking today yeah see yeah, so, but I.
Speaker 3: Know lots of people getting too bad. I do not
Speaker 3: do that.
Speaker 6: I mean again, this was thirty years ago. Send in
Speaker 6: like a ten dollars checking.
Speaker 2: I want to get a passport for Quebec because Montreal
Speaker 2: is killed.
Speaker 3: Sure right now? Are do you have any more?
Speaker 2: Yeah?
Speaker 7: Okay, one last one.
Speaker 10: This is about Remember those fancy long business lunches you
Speaker 10: probably used to do. They would extend into like dinner
Speaker 10: time and keep going. Well, the Financial Times are saying
Speaker 10: weight loss drugs are killing that business, you know, the
Speaker 10: business lunch because a lot more people they're ordering less.
Speaker 10: They might not want to go because they're eating less,
Speaker 10: they don't drink alcohol as much. So it really goes
Speaker 10: into that and how it's hurting restaurants to list.
Speaker 3: I'm gonna tell a wonderful newspapers. Thank you so much.
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify,
Speaker 1: and anywhere else you get your podcasts. Listen live each weekday,
Speaker 1: seven to ten am Easter and on Bloomberg dot Com,
Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app.
Speaker 1: You can also watch us live every weekday on YouTube
Speaker 1: and always on the Bloomberg terminal