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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg

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Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern

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Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business app.

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Speaker 1: Listen on demand wherever you get your podcasts, or watch

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Speaker 1: us live on YouTube.

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Speaker 2: We have right now the perfect guests, given the uncertainties

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Speaker 2: out there, the unknown unknowns and selected and movable know knowns.

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Speaker 2: Edward your Denny joins us after decades of work with

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Speaker 2: c J. Lawrence partran out of Yale University and his

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Speaker 2: own yard Denny Research, and he's been absolutely brilliant. Kudos

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Speaker 2: as well to Ralph and Kompora for calling the October

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Speaker 2: low and I think it was twenty twenty four. Edgar Denny,

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Speaker 2: thank you so much for joining Bloomberg. Thank you this morning.

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Speaker 3: Ed at the.

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Speaker 2: Bottom you go contrarian of your note yesterday, and I

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Speaker 2: want to paint this. I said that one of the interns,

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Speaker 2: excuse me, they're junior analysts. They're not interns anymore. Year

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Speaker 2: Denny doesn't call him interns, the junior analysts, and ed

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Speaker 2: I talked to a junior analysts and I tried to

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Speaker 2: explain how odd this uncertainty is around presidential whim. How

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Speaker 2: do you invest for the long term given in the

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Speaker 2: buffeting of Trump tweets.

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Speaker 4: Well, I think you have to tune it out. It's

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Speaker 4: become more noise than signal. You know, the news changes

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Speaker 4: on a daily basis, and I think the market is

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Speaker 4: figured that out. You know, we had Liberation Day on

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Speaker 4: April second. It was postponed on April ninth until July ninth,

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Speaker 4: and now that's been postponed until August first. And the

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Speaker 4: market reacted badly to that news yesterday, but not that

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Speaker 4: badly all things considered. And it's not down much today

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Speaker 4: because everybody's talking about this is the art of the deal,

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Speaker 4: this is the way negotiations go when Trump is in charge.

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Speaker 2: I will not mince words, folks. A subscription to your

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Speaker 2: Denny Research is worth its weight in gold, not because

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Speaker 2: of what he tells you to do, but what he

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Speaker 2: tells you not to do, which just to go to

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Speaker 2: cash in market time. Here's the final paragraph written yesterday.

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Speaker 2: We are going to stick with our contrying position and

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Speaker 2: bet that the dollar will rebound. I just have to

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Speaker 2: stop it there. Talk about contrarian ed yard. Denny. You

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Speaker 2: look at a dollar rebound, and do you look for

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Speaker 2: a healthy earning season.

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Speaker 4: Well, I'm not sure I know of anybody who's bullish

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Speaker 4: on the dollar. I think everybody's not just neutral, but

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Speaker 4: just outright bearish. It's as though the dollar is about

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Speaker 4: to be replaced as a reserve currency by the euro

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Speaker 4: and the yu one and the yen, and I just

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Speaker 4: don't buy any of that. I think that there's been

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Speaker 4: a kind of a reaction to Trump's haranguing of the Fed,

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Speaker 4: particularly Fed charge your own Powell. I mean, that's clearly

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Speaker 4: weight on the dollar, as has the trade turmoil. But

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Speaker 4: as we've seen in recent months, Trump is negotiating, there's

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Speaker 4: a bluster and bullying going on there. That's the nature

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Speaker 4: of deal making, particularly in New York City real estate negotiations,

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Speaker 4: which is where his background is. So I think the

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Speaker 4: market's kind of getting used to it, and I think

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Speaker 4: that people are going to realize that there's not that

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Speaker 4: much positive things going on in Europe other than maybe

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Speaker 4: more defense spending, and the Japanese economy doesn't look all

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Speaker 4: that wonderful. Meanwhile, the US economy is resilient, We've got

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Speaker 4: a huge capital market. So i'd be bullish on the

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Speaker 4: dollar here and on earnings, I think it's a layup.

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Speaker 4: The estimates for the second quarter have been revised down

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Speaker 4: to such an extent, I think they're only expecting a

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Speaker 4: three percent increase in just like the first quarter. I

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Speaker 4: think we're going to get a big upside surprise.

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Speaker 5: I see you've got your research assistant in the background,

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Speaker 5: their ed coming into the picture.

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Speaker 2: We appreciate that.

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Speaker 5: That gives us confidence. Hey, I mean, Bloomberg Economics is

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Speaker 5: out with some some research today saying they think, you know,

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Speaker 5: at the end of the day, tariffs are going to

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Speaker 5: probably level out somewhere around fifteen fifteen and a half percent,

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Speaker 5: up from about two percent two point three percent today.

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Speaker 5: That's got to have a negative impact on global economies.

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Speaker 5: How do you price that in?

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Speaker 4: Well, it's it's interesting. Global stock markets are basically around

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Speaker 4: the world at an all time record high. The MSCI

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Speaker 4: for the world is at an all time record high.

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Speaker 4: It's pretty impressive, and stock investors obviously believe that this

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Speaker 4: tariff war isn't going to last very long. I don't

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Speaker 4: think it will last very long because the administration has

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Speaker 4: to recognize they do recognize that the midterm elections are

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Speaker 4: coming up now it seems like, well that's November of

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Speaker 4: next year. But the administration can't afford to have this

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Speaker 4: trade war cause a recession in coming months because that

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Speaker 4: will obviously hurt them in the midterm elections, and they've

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Speaker 4: got a very few majority and the House and the Senate.

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Speaker 2: Edgar Denny with us. We continue with Edge your Denny

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Speaker 2: for a lengthy conversation in this hour. Welcome all of

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Speaker 2: you in your commute. Good morning on Serious XM Channel one, one,

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Speaker 2: Apple Car Play, Android Auto. I'm seeing the dashboards of

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Speaker 2: the new cars, Paul, you know, like the beast you

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Speaker 2: have it. It's like it looks like a spaceship. It

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Speaker 2: is all and you gus the radio. You get fourteen flavors,

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Speaker 2: and thank you for picking your flavor to listen and

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Speaker 2: do us. Why don't you continue with that here.

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Speaker 5: Ed, given kind of what we know about, maybe we're

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Speaker 5: trade tariffs and so on, and policy may kind of

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Speaker 5: flow here. It's going to be a little bit more restrictive.

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Speaker 5: What does the Federal Reserve do here, Ed?

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Speaker 2: Nothing?

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Speaker 4: That's that's been my view since the beginning of the year.

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Speaker 2: None and done.

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Speaker 4: When they lowered the interest rates one hundred basis points

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Speaker 4: at the end of last year. I thought that made

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Speaker 4: no sense. I think they were reacting to some numbers

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Speaker 4: that suggested things were getting weaker. But I thought the

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Speaker 4: economy was actually going to prove resilient. And I also

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Speaker 4: thought that the bondial would actually go up rather than down.

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Speaker 4: And that's exactly what happened. Boniill went up one hundred

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Speaker 4: basis points as they cut the Fed funds rate by

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Speaker 4: one hundred basis points.

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Speaker 2: That's the risk they have now if.

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Speaker 4: They continue, if they resume easing, And so I endorsed

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Speaker 4: their current approach, which is to say that there are

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Speaker 4: no rush to lower interest rates. I would actually prefer

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Speaker 4: if they said that there are no rush to do anything,

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Speaker 4: because by saying they are no rush to lower industrates,

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Speaker 4: they are indicating they think interest rates are restrictive when

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Speaker 4: it's pretty clear the we're in nirvana right now. Unemployment

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Speaker 4: rate is four point one percent, inflation is a little

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Speaker 4: above two percent. Why mess with success?

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Speaker 2: And you're Denny on the span of your study, I mean,

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Speaker 2: I think of you inhibits and his equivalency, you know,

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Speaker 2: in terms of the reach back to World War two

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Speaker 2: and even back before that. The market treats the focus

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Speaker 2: the narrowness of growth is unusual. But is it unusual

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Speaker 2: to have so few stocks giving us growthiness and our

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Speaker 2: focus into those twenty thirty forty stocks.

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Speaker 4: Well, it's really not unusual when you look at it

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Speaker 4: on a global basis. In most stock markets, there are

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Speaker 4: a handful of big cap stocks that really account for

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Speaker 4: most of the market cap of those markets. And I

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Speaker 4: think we're in the same same story here. But look,

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Speaker 4: I think that the reality is we've had a pretty

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Speaker 4: broad bull market. It's just that the Magnificent seven have

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Speaker 4: done so extraordinarily well that everything looks kind of punky.

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Speaker 2: But that's not the case.

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Speaker 4: I mean, we've had, you know, plenty of stocks twenty

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Speaker 4: thirty percent, but since we bottomed on October twenty twenty two.

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Speaker 4: But you know, the Magnificent Seven obviously have outperformed them all,

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Speaker 4: and I have accounted for a lot of the global outperformance. Now,

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Speaker 4: they kind of stumbled at the beginning of this year

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Speaker 4: and the whole deep seek controversy whether that meant that

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Speaker 4: these companies are spending too much on AI infrastructure, and

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Speaker 4: they came back in the first quarter and their announcements

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Speaker 4: and their earnings announcements and earning's calls and said, no,

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Speaker 4: we're we're going to spend this kind of money because

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Speaker 4: we think there really is a tremendous business to be

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Speaker 4: had with AI. So they're moving forward.

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Speaker 2: Do you think the mag seven continue forward here as

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Speaker 2: you see US shares gaining overall market share away from Europe? Yeah?

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Speaker 2: I do, I do.

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Speaker 4: I'm I have been recommending overweighting the US since twenty

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Speaker 4: ten and it's worked out extremely well. But I could

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Speaker 4: overstay my welcome here. Certainly during the first quarter it

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Speaker 4: made more sense to overweight Europe than it made sense

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Speaker 4: to overweight the United States. But I kind of view

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Speaker 4: that as just a temporary situation. I think the US

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Speaker 4: will continue to outperform, though it is. It's that perform

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Speaker 4: for so long that it's about seventy five percent of

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Speaker 4: the market cap of the global stock market, So I mean,

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Speaker 4: there's a limit to how much better it can get.

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Speaker 4: I suppose it's been quite a run ed.

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Speaker 5: We're going to have earning start next week. Our good

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Speaker 5: friends at JP Morgan will kick things off in size here.

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Speaker 5: What do you expect to see from this earning cycle?

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Speaker 5: What do you expect to hear from companies as a

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Speaker 5: talk about the you know, the coming quarters here, because

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Speaker 5: last quarter they were arguably and understandably reticent about forecasting

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Speaker 5: the future.

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Speaker 2: Right.

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Speaker 4: Well, you know, first off, the bat will be the

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Speaker 4: big banks, and among them will be JP Morgan, and

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Speaker 4: undoubtedly Jamie Diamond will be pessimistic as he tends to

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Speaker 4: be be nice, and then report amazing results.

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Speaker 2: And I got to stop the show. Ed. I looked

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Speaker 2: at the Bloomberg FA screen yesterday for JP Morgan. They're

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Speaker 2: making so much money huge. They don't want people to

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Speaker 2: know how much money they're making. Am I off the

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Speaker 2: mark on that? I don't know.

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Speaker 4: All I know is that Jamie Diamond and of some

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Speaker 4: other vocal billionaires keep telling us how bad things are. Listen,

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Speaker 4: and he doesn't have a noisy because, like I mean,

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Speaker 4: Michael by Rich they got Michael Barbat is appalling.

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Speaker 2: And your Denny doesn't get an invite to the Bezos

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Speaker 2: reading in Venice and he's going after billion billionaires to

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Speaker 2: close it out. I had to close it out. Torsten Slock,

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Speaker 2: brilliant German economist over at poly Global Management, says the

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Speaker 2: bond market and the stock market now are inconsistent This

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Speaker 2: is not consistent. Either the bond market is wrong in

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Speaker 2: rates must move higher due to accelerating growth, or equity

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Speaker 2: markets are wrong and stocks have to move lower because

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Speaker 2: growth is slowing down. A wise one.

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Speaker 6: Brief doctor slock which one is it? I think everything

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Speaker 6: is kind of the way it should be. We've got

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Speaker 6: the bond market basically has normalized since the abnormality we

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Speaker 6: had between the Great Financial Crisis and the Great Virus Crisis.

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Speaker 6: I have no problems with the bond market being here

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Speaker 6: at four and a half percent plus minus twenty five

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Speaker 6: basis points that's been our forecast since the beginning of

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Speaker 6: the year, and low and behold, we're still there. And

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Speaker 6: I have no problems with the stock market making an

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Speaker 6: all time record high because of the resilience of the economy.

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Speaker 6: So again, I think we have to pinch ourselves. We're

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Speaker 6: in nirvana where the Fed funds rate is where it

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Speaker 6: should be, the bondials are where they should be, and

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Speaker 6: the stock market's reflecting the optimism about what I call

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Speaker 6: the Roaring twenty twenties and the technological revolution we've been

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Speaker 6: in since let's say the mid nineteen sixties with IBM

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Speaker 6: mainframes leading to this digital revolution.

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Speaker 2: For all of you across this nation and worldwide. Paul

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Speaker 2: Sweene and I are really committed to reviewing what the

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Speaker 2: bulls got right during this time and this turbulence. Names

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Speaker 2: like Belski, names like Laidler, names like your Denny that

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Speaker 2: had been smart enough to stay on board. Paul, I'd

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Speaker 2: include lyz En Saunders. Sure, yeah, not the young guy

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Speaker 2: working for him. I mean Kevin, you know I mean suspect.

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Speaker 2: But I seriously, folks, this is really really important. If

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Speaker 2: you agree or disagree with you your Denny, listen carefully.

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Speaker 2: Can't say enough about your Denny at Research Doctor, your Denny,

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Speaker 2: Thank you so much for joining us this morning.

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Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live

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Speaker 1: weekday afternoons from seven to ten am Eastern. Listen on

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Speaker 1: Applecarplay and Android Otto with the Bloomberg Business app, or

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Speaker 1: watch us live on YouTube.

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Speaker 3: So when Kelsey.

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Speaker 2: Barrow walks in, you gotta be prepared. I mean, Bob,

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Speaker 2: Michael Swanzers and we talked Greek and Latin with Kelsey.

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Speaker 2: We gotta do the math. Paul watches the two s

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Speaker 2: ten spread the Vanilla's difference. Youel between the ten year

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Speaker 2: and the two year, we've had curve steepening where the

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Speaker 2: two year was a full percentage point higher than the

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Speaker 2: ten year, and we've steadily come up where right now

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Speaker 2: the ten years half a percentage point higher than the

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Speaker 2: two year. Two standard deviations of this curve steepening is

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Speaker 2: sixty five basis points or a little over six tens

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Speaker 2: of a percent. What are the ramifications to our listeners

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Speaker 2: and viewers if curve steepening gets out there where it

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Speaker 2: breaks through two standard deviation steepness.

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Speaker 7: Yeah, so the curve has been steepening, it's been steepening

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Speaker 7: from inverted levels. But when you look at the twos

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Speaker 7: tens curve at fifty basis points versus history, that's still

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Speaker 7: not a particularly steep yield curve. And I think that's

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Speaker 7: because the FED policy setting at four and three eighths

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Speaker 7: is still fairly restrictive. And so you know, we've had

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Speaker 7: a modest move lower in the front end of the

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Speaker 7: yield curve. We've had a modest move higher in front

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Speaker 7: end in longer yields, but that normalization, it's essentially getting

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Speaker 7: us back to a normal kind of environment, which now.

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Speaker 2: Paul I just kind of tweet a message in here

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Speaker 2: down from Washington emails in and says how far out

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Speaker 2: the yield curve does the FED have influence directly?

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Speaker 7: They only have influence over the very short short end.

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Speaker 7: And so I think that is something that we've experienced

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Speaker 7: even very recently, with the FED cutting rates at the

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Speaker 7: end of twenty twenty four and the tenure yield actually

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Speaker 7: moving higher in response to that as a function of

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Speaker 7: I think what I would describe as those rate cuts

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Speaker 7: were not necessarily cuts into a recession. Those were cuts

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Speaker 7: into what I would describe as mid cycle adjustment cuts.

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Speaker 7: We've been moving the policy rate towards neutral, and that's

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Speaker 7: only further extended the cycle. So I think you know,

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Speaker 7: the listener, and thank you for the question. I mean,

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Speaker 7: it's a very key observations. It's a very key observation

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Speaker 7: that you know there is no direct influence in the

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Speaker 7: longer end of the curve. And let's step back and

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Speaker 7: think about that structural shift that we've been seeing. There's

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Speaker 7: a structural shift we've been seeing in the bond market

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Speaker 7: away from the price insensitive holders, which were central banks

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Speaker 7: the public sector, to price sensitive holders being the dominant

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Speaker 7: driver of the market, that's the retail investor, that's the

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Speaker 7: asset manager. They are taking on a larger role in

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Speaker 7: the fixed income market, particularly as holders in the treasury market,

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Speaker 7: and as a result, you've seen demand for higher term premium.

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Speaker 8: Here how much.

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Speaker 5: Credit risk does JP Morgan Asset Management want to take

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Speaker 5: these days?

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Speaker 7: So we're looking at companies and we're still seeing them

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Speaker 7: in fairly good shape. So and I don't want to

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Speaker 7: take that for granted, but when we press our credit

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Speaker 7: analysts across every single sector and we ask them, and

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Speaker 7: we've been asking them, what happens if the tarifrate stays

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Speaker 7: at ten, what happens actually if the tarifrate goes up

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Speaker 7: to twenty percent? How will your companies handle this? And

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Speaker 7: what we found when we model out those scenarios is

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Speaker 7: that even under a fairly stressed scenario, and I'm talking

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Speaker 7: about investment grade companies right now, in a fairly stressed scenario,

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Speaker 7: investment grade earnings and revenues will decline but will not

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Speaker 7: turn negative under our assumptions, which just is an example

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Speaker 7: of how strong the starting point is for companies these days. So, yes,

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Speaker 7: I do see a lot of challenges for the economy.

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Speaker 7: We're in a subtrend growth environment. I would say that

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Speaker 7: with jobs data suggesting that the economy is very narrowly focused,

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Speaker 7: it does suggest that there are risks that we are

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Speaker 7: more susceptible to those risks. But at the same time,

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Speaker 7: companies have been preparing for challenging environments for multiple years now,

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Speaker 7: and that set them up to be in a fairly

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Speaker 7: good position from a bondholder perspective.

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Speaker 3: I look at the.

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Speaker 5: End go function on the Bloomberg terminal, the Bloomberg Index browser,

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Speaker 5: and fixed income in the US, US corporate high yield

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Speaker 5: has been by far the best performer. So it seems

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Speaker 5: like the market is still rewarding, you know, even a

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Speaker 5: low investment grade.

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Speaker 3: Yeah.

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Speaker 7: Absolutely, So I would describe this as a carry environment.

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Speaker 2: Okay.

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Speaker 7: And so if you look at the current index yield

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Speaker 7: on the ion screen right so you pull it up

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Speaker 7: and you look at the yield to worst right now

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Speaker 7: on the US High Eield Index at seven percent, I

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Speaker 7: would say it is.

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Speaker 5: I'm an equity.

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Speaker 2: It's a massive jargon alert.

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Speaker 7: Yes, ah, yeah, all right, just just your yield yield.

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Speaker 2: To worst yield is afterthought, didn't clean the dishwash?

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Speaker 7: What's yield worst regardless of which one of the yields

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Speaker 7: you look at, one that adjusts for callable risk, one

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Speaker 7: that doesn't. If you look at the yields, seven seven

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Speaker 7: percent is essentially where you're at if we just stay here, right,

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Speaker 7: spreads don't Why didn't too much? We don't narrow too

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Speaker 7: much from your ear here you have treasury yields around

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Speaker 7: these levels. You should expect your returns over the next

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Speaker 7: twelve months in a high yield index to look similar

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Speaker 7: to the to the current yield. And that's essentially where

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Speaker 7: we're tracking today. When I look at returns now, there

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Speaker 7: is one area where you've you've done actually even better,

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Speaker 7: which is just to have an eye towards the global market.

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Speaker 7: Is some of these global fixed income indices have done

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Speaker 7: even better, and that's been a function of the weaker US.

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Speaker 2: We got to get this into the next minute then,

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Speaker 2: But then, how does JP Morgan suggest you participate in

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Speaker 2: internationally yield given a modeled week dollar. I mean, as

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Speaker 2: Casmin looking for.

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Speaker 7: A week dollar, we're looking for a week dollar. We've

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Speaker 7: been expecting a week dollar. It's been a really good

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Speaker 7: call of our currency team at a time where at

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Speaker 7: the beginning of the year was actually quite.

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Speaker 2: Out of the Ferraris as well.

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Speaker 7: They get it, and so you know, I think that

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Speaker 7: what we do want to differentiate is the difference between

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Speaker 7: sell America and a week dollar. So you can have

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Speaker 7: a world and I think we are in a world

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Speaker 7: where there is demand for fixed income assets in the US.

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Speaker 7: We're seeing it in the strong end user demand for

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Speaker 7: treasury auctions, We're seeing it in the strong demand for

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Speaker 7: investment grade credit. But you can also have a week dollar.

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Speaker 7: And that is a function we've seen of foreign investors

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Speaker 7: keeping their US fixed income assets but hedging them back

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Speaker 7: to their little currencies.

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Speaker 2: Brilliantly explain Kenny's one done bond. I get thirty seconds.

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Speaker 2: If Apple came out today with a I'm miss making

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Speaker 2: the number of folks, I'm an amateur, a four billion

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Speaker 2: dollar bond offering of tranchees or whatever you call it,

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Speaker 2: don't they just make one phone call to the fidel,

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Speaker 2: to a Fidelity or JP Morgan. I mean, the demand

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Speaker 2: for that would be insatiable, right.

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Speaker 7: I think we've seen that the demand is very strong

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Speaker 7: and typically right when you have periods of volatility like

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Speaker 7: we've had so far this year. Cool one, yes, but

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Speaker 7: you also see supply step back, you know, come to

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Speaker 7: go to the sidelines. We haven't seen that. You know,

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Speaker 7: supply has actually continue to chug along. People are out

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Speaker 7: there issuing and that's because you know they see the

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Speaker 7: demand side.

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Speaker 2: Yes, Paul, this is just the strangest s mark. I mean,

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Speaker 2: I mean five firms could buy in all of Meg's

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Speaker 2: seven debt and like literally not exaggerating one phone call.

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Speaker 3: Sorry.

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Speaker 5: Rob Shifman has a job.

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Speaker 2: It Bloomberg Intelligence Robert Shipping Publishing.

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Speaker 4: There.

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Speaker 2: I have to look at that. Kelsey Barrow brilliant. That

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Speaker 2: was really, really quite good.

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Speaker 8: She is with J. B.

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Speaker 2: Morgan. She put the flags on the new tower for

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Speaker 2: fourth of July.

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Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

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Speaker 1: starting at seven am Eastern on Apple Corplay and Android

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Speaker 1: Auto with the Bloomberg Business app. You can also listen

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Speaker 1: live on Amazon Alexa from our flagship New York station.

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Speaker 1: Just say Alexa play Bloomberg eleven thirty.

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Speaker 2: The Governor of Connecticut joins us. Right now. Governor is

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Speaker 2: so serious, I think I just really want to lean

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Speaker 2: on this, which is the future of your Democratic party.

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Speaker 2: When you grew up and you grew up advantaged there

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Speaker 2: was a Republican Long Island and Republican Connecticut and such.

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Speaker 2: Do the Democrats have the gift to give up their

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Speaker 2: majority because of a weakness of Democratic Party leadership? Could

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Speaker 2: that happen?

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Speaker 8: I don't think so. I think there's some seasonality back

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Speaker 8: and forth when it comes to a politics. Obviously, Donald

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Speaker 8: Trump had a big win and he got his budget

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Speaker 8: bill passed. I think within a year you'll see the

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Speaker 8: effects of that budget bill, and you'll see a Democrat saying,

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Speaker 8: you know, this is really hammering a working families in

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Speaker 8: the middle class, and you'll see the political tides twist

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Speaker 8: and churn.

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Speaker 2: New York City has turned upside down. I look in

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Speaker 2: the Connecticut Mirror, a CT Mirror conversation with you, you

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Speaker 2: say that mister mucdonnie ran a hell of a rasist

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Speaker 2: folks as the arch progressive running for mayor of New

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Speaker 2: York after a victory over Governor Cuomo and others. How

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Speaker 2: should centrist Democrats respond to a generational change?

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Speaker 8: Look, I think that he did run a bright campaign,

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Speaker 8: and we've got a lot to learn from, especially guys

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Speaker 8: my age, like what he did in terms of social media.

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Speaker 8: Young people hadn't voted for a long time. They don't

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Speaker 8: often vote in primaries, and they often don't vote in

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Speaker 8: the cities, and they sure as head voted, So credit

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Speaker 8: or credits do. Look, he and I have very different styles,

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Speaker 8: but you know, at the end of the day, I've

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Speaker 8: got a universal pre k, a down payment there, pre

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Speaker 8: natal education, doing everything we can to they get easier

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Speaker 8: for people to get ahead in life and make life

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Speaker 8: a little more affordable. So there we have a lot

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Speaker 8: in common, but we have.

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Speaker 5: Different styles governor. President Trump obviously has a great skill

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Speaker 5: at just you know, commanding the narrative here and just

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Speaker 5: kind of taking for in terms of other folks, maybe

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Speaker 5: taking a lot of the oxygen out of the room.

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Speaker 5: What are the Democrats need to do from a messaging

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Speaker 5: standpoint heading into the midterm elections.

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Speaker 8: Look, he's got a very loud voice, sort of hurky

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Speaker 8: jerky every day it changes, but he dominates the landscape.

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Speaker 8: Very tough for you know, me as a governor when

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Speaker 8: you just don't don't know what the budget's going to

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Speaker 8: be one day to the that's what the tariffs are

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Speaker 8: going to be. It's tough to invest and make long

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Speaker 8: term commitments there. I think the Democrats has just got

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Speaker 8: to be clear as day. We're fighting for the middle class.

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Speaker 8: We believe in them bottom up. We believe in this

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Speaker 8: state of Connecticut. We've had more new small business startups

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Speaker 8: than ever before. Those are a lot of small businesses

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Speaker 8: starting up on Awaley Avenue, New Haven. And I think

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00:25:25,480 --> 00:25:27,760
Speaker 8: that's how you grow wealth, and I think that's how

439
00:25:27,800 --> 00:25:29,640
Speaker 8: you get our cities back to life, and I think

440
00:25:29,680 --> 00:25:32,200
Speaker 8: that's how you fight for working families in the middle class.

441
00:25:33,320 --> 00:25:39,080
Speaker 5: Governor, it seems like for both parties, perhaps the extreme

442
00:25:39,240 --> 00:25:42,040
Speaker 5: right the extreme left seems to be driving the politics

443
00:25:42,040 --> 00:25:45,560
Speaker 5: for each of those parties. Is there even a center

444
00:25:45,880 --> 00:25:48,480
Speaker 5: left for either party or both parties?

445
00:25:53,000 --> 00:25:57,800
Speaker 8: It's getting smaller because I'm there, and yeah, you're right,

446
00:25:57,840 --> 00:26:02,119
Speaker 8: I think. You know, after Donald Trump's election, the Republicans

447
00:26:02,160 --> 00:26:02,359
Speaker 8: are a.

448
00:26:02,359 --> 00:26:03,879
Speaker 2: Lot less likely to want to talk to me.

449
00:26:03,960 --> 00:26:05,920
Speaker 8: You know, I always have a big table in an

450
00:26:05,920 --> 00:26:07,399
Speaker 8: open door and a lot of people look at me

451
00:26:07,440 --> 00:26:10,199
Speaker 8: and say that it looks a little like Republican. And

452
00:26:10,280 --> 00:26:14,160
Speaker 8: the Democrats are sort of really fighting Trump every day,

453
00:26:14,200 --> 00:26:17,320
Speaker 8: and if you don't go after them on a daily basis,

454
00:26:17,359 --> 00:26:19,560
Speaker 8: you're sort of being weak in terms of your principles.

455
00:26:19,640 --> 00:26:22,400
Speaker 8: So you're right, the middles getting very small, and that's

456
00:26:22,400 --> 00:26:22,960
Speaker 8: not a good.

457
00:26:22,840 --> 00:26:25,520
Speaker 2: Name for America, and that Lamont with us from Connecticut,

458
00:26:25,520 --> 00:26:27,840
Speaker 2: we continue. We welcome all of you across the nation

459
00:26:28,040 --> 00:26:31,040
Speaker 2: and certainly in the Bloomberg eleventh three to zero area.

460
00:26:31,160 --> 00:26:35,679
Speaker 2: Here an interesting conversation of Republicans and Democrats. In the

461
00:26:35,680 --> 00:26:40,520
Speaker 2: summer of twenty twenty five, Governor Lamont Bloomberg wrote this

462
00:26:40,640 --> 00:26:45,399
Speaker 2: up on Paul Tudor Jones noted hedgehund dude exiting to

463
00:26:45,440 --> 00:26:49,719
Speaker 2: Palm Beach, Florida. There's a fear in the Tri state area,

464
00:26:50,040 --> 00:26:53,639
Speaker 2: and frankly there's a fear in Boston and Washington that

465
00:26:53,760 --> 00:26:58,960
Speaker 2: with adverse policy that migration will continue. How have you

466
00:26:59,119 --> 00:27:03,240
Speaker 2: tried to respect bond to fancy people in Greenwich? Is

467
00:27:03,240 --> 00:27:06,960
Speaker 2: a climb on their Hinckley picnic boat in a heads South.

468
00:27:07,200 --> 00:27:09,480
Speaker 2: How have you responded to that threat?

469
00:27:11,160 --> 00:27:15,359
Speaker 8: Tom? I think twofold one we were raising taxes on

470
00:27:15,400 --> 00:27:18,120
Speaker 8: an every other year basis, going back at ten years

471
00:27:18,119 --> 00:27:20,399
Speaker 8: in this state. That hasn't happened on my watch. We

472
00:27:20,480 --> 00:27:23,760
Speaker 8: haven't raised tax rates. I think that gives people some

473
00:27:23,880 --> 00:27:26,119
Speaker 8: comfort that we're getting our fiscal house in order and

474
00:27:26,119 --> 00:27:30,000
Speaker 8: we're not going to balance the budget. By raising taxes

475
00:27:30,400 --> 00:27:34,520
Speaker 8: and also tell people, look, this is the state, the

476
00:27:34,560 --> 00:27:36,480
Speaker 8: tower where you grew up. This is where your children

477
00:27:36,560 --> 00:27:38,879
Speaker 8: or your grandchildren are. You can watch them, you know,

478
00:27:38,960 --> 00:27:41,400
Speaker 8: on zoom from Palm Beach. You can be right here

479
00:27:41,440 --> 00:27:44,280
Speaker 8: with them every day. And it's something to be said

480
00:27:44,280 --> 00:27:45,919
Speaker 8: for making sure this is a place where you can

481
00:27:45,960 --> 00:27:47,920
Speaker 8: stay in the community where you grew up and where

482
00:27:47,920 --> 00:27:48,760
Speaker 8: your family is.

483
00:27:50,359 --> 00:27:54,160
Speaker 5: So governor what's the what do you think the future

484
00:27:54,240 --> 00:27:56,639
Speaker 5: is of this Democratic Party here? How does the Democratic

485
00:27:56,680 --> 00:28:01,400
Speaker 5: Party regain some momentum, any momentum here, because it just

486
00:28:01,480 --> 00:28:05,639
Speaker 5: feels like it has absolutely zero momentum at this point.

487
00:28:08,240 --> 00:28:11,840
Speaker 8: I think you're already seeing it happen. I think you

488
00:28:11,880 --> 00:28:15,159
Speaker 8: know the the Trump you know budget, it's going to

489
00:28:15,200 --> 00:28:17,919
Speaker 8: really impact middle class families. You're gonna see what it

490
00:28:17,960 --> 00:28:21,160
Speaker 8: means in terms of folks getting thrown off of healthcare.

491
00:28:21,320 --> 00:28:22,840
Speaker 2: You're gonna see what it means in terms.

492
00:28:22,680 --> 00:28:25,240
Speaker 8: Of folks and not getting the food benefits. We have

493
00:28:25,359 --> 00:28:28,359
Speaker 8: fifty million dollars of cuts. Just the portal turned off

494
00:28:28,600 --> 00:28:33,040
Speaker 8: three days ago for after school programs. I think this

495
00:28:33,080 --> 00:28:36,200
Speaker 8: is going to impact middle class families. So right now

496
00:28:36,240 --> 00:28:39,200
Speaker 8: it's all beaches and grain and tax cuts, But when

497
00:28:39,240 --> 00:28:41,240
Speaker 8: do you see how this impacts your everyday life?

498
00:28:41,360 --> 00:28:43,440
Speaker 2: Governor? One final question, We have to go back to

499
00:28:43,520 --> 00:28:46,680
Speaker 2: our discussion of a few days ago, heated debate within

500
00:28:46,720 --> 00:28:51,920
Speaker 2: Bloomberg Surveillance and a huge nationwide response. Governor Lamont is

501
00:28:51,960 --> 00:28:55,960
Speaker 2: a traditionalist of old money in America. Do you go

502
00:28:56,080 --> 00:28:59,960
Speaker 2: for the cold Main lobster role or are you loyalty

503
00:29:00,160 --> 00:29:02,720
Speaker 2: the warm Connecticut lobster role.

504
00:29:04,520 --> 00:29:06,920
Speaker 8: You mentioned the word Connecticut. That makes it easy for me.

505
00:29:08,440 --> 00:29:11,520
Speaker 8: But you know the lobsters are fleeing Maine too. They're

506
00:29:11,520 --> 00:29:14,160
Speaker 8: going north to Canada. So you got to watch out.

507
00:29:14,800 --> 00:29:15,800
Speaker 8: The times are turning.

508
00:29:15,880 --> 00:29:19,400
Speaker 2: We'll need a new post. Go ahead, well, we'll need

509
00:29:19,440 --> 00:29:21,800
Speaker 2: a new policy on the Governor. We're out of time.

510
00:29:21,880 --> 00:29:24,120
Speaker 2: Thank you so much for joining us. I believe that

511
00:29:24,240 --> 00:29:27,600
Speaker 2: was a voice for the warm role. That you were

512
00:29:27,680 --> 00:29:28,080
Speaker 2: right sure.

513
00:29:28,280 --> 00:29:29,840
Speaker 3: I mean you know either.

514
00:29:31,280 --> 00:29:34,400
Speaker 2: Exactly, you take both of one of each. Governor, Thank

515
00:29:34,440 --> 00:29:36,840
Speaker 2: you so much for Connecticut there and the future of

516
00:29:36,920 --> 00:29:42,600
Speaker 2: his Democratic Party.

517
00:29:45,120 --> 00:29:49,040
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

518
00:29:49,040 --> 00:29:52,080
Speaker 1: starting at seven am Eastern on Apple Corplay and Android

519
00:29:52,080 --> 00:29:55,120
Speaker 1: Auto with the Bloomberg Business app. You can also watch

520
00:29:55,160 --> 00:29:58,120
Speaker 1: us live every weekday on YouTube and always on the

521
00:29:58,160 --> 00:29:59,240
Speaker 1: Bloomberg terminal.

522
00:29:59,400 --> 00:30:02,520
Speaker 2: Red Case joins USUS. Now we always have a huge

523
00:30:02,560 --> 00:30:06,320
Speaker 2: response when he's on studying under Robert Schuller at Yale

524
00:30:07,160 --> 00:30:11,920
Speaker 2: at doctor cases with Middelburg communities. They do residential multi

525
00:30:11,920 --> 00:30:15,920
Speaker 2: family real estate in Virginia really into the pulse of

526
00:30:15,960 --> 00:30:19,360
Speaker 2: the market within the zeitgeist. Brad case, what do we

527
00:30:19,400 --> 00:30:22,760
Speaker 2: get most wrong about America's housing market?

528
00:30:24,240 --> 00:30:27,400
Speaker 9: Well, I think that there are a lot of ways

529
00:30:27,400 --> 00:30:32,680
Speaker 9: in which we could work to increase the supply of housing,

530
00:30:32,760 --> 00:30:35,720
Speaker 9: both owner occupied housing and rental housing. And we see

531
00:30:35,760 --> 00:30:38,680
Speaker 9: the importance of that with how expensive houses have become.

532
00:30:39,000 --> 00:30:42,600
Speaker 9: It's really really very difficult for somebody to purchase a

533
00:30:42,640 --> 00:30:47,200
Speaker 9: house nowadays, and especially when they're concerned that the prices

534
00:30:47,240 --> 00:30:51,120
Speaker 9: of housing may go down in the future. So there's

535
00:30:51,160 --> 00:30:54,400
Speaker 9: a lot that governments at all levels can do to

536
00:30:54,480 --> 00:30:58,320
Speaker 9: make it easier to build housing. What we're seeing is

537
00:30:58,360 --> 00:31:01,000
Speaker 9: that there's a tremendous increase into de manned for housing,

538
00:31:01,040 --> 00:31:03,560
Speaker 9: and we're just not seeing an increase in the supply

539
00:31:03,600 --> 00:31:05,120
Speaker 9: of housing. In fact, it's been going down.

540
00:31:05,240 --> 00:31:08,000
Speaker 2: So what's your prescription for New York City is one example?

541
00:31:08,880 --> 00:31:11,840
Speaker 9: Well, you know, New York City is a very special case.

542
00:31:12,800 --> 00:31:16,360
Speaker 9: We focus, in fact, not just in Virginia, but the

543
00:31:16,480 --> 00:31:19,360
Speaker 9: entire mid Atlantic and southeastern part of the country because

544
00:31:19,440 --> 00:31:23,040
Speaker 9: there's such growth in population.

545
00:31:22,600 --> 00:31:24,120
Speaker 3: And employment in that part of the country.

546
00:31:24,120 --> 00:31:26,640
Speaker 9: And that's not a story that's really going to be

547
00:31:26,640 --> 00:31:29,680
Speaker 9: told about New York City or some of the other older,

548
00:31:29,920 --> 00:31:33,640
Speaker 9: very very pleasant cities in the Northeast and the West.

549
00:31:34,600 --> 00:31:35,880
Speaker 3: They're just not growth centers.

550
00:31:36,520 --> 00:31:38,880
Speaker 9: So the prescription for a place like New York is

551
00:31:39,000 --> 00:31:41,680
Speaker 9: entirely different from the prescription for a place that people

552
00:31:41,680 --> 00:31:42,560
Speaker 9: are trying to move to.

553
00:31:43,320 --> 00:31:45,720
Speaker 5: Brad, why is there a supply shortage? I mean, with

554
00:31:45,800 --> 00:31:48,760
Speaker 5: the nail gun. If nothing else, houses go up in

555
00:31:48,880 --> 00:31:51,720
Speaker 5: fifteen minutes these days. Why aren't there more houses out there?

556
00:31:51,760 --> 00:31:53,200
Speaker 5: Why aren't there more housing out there?

557
00:31:54,240 --> 00:31:57,240
Speaker 9: Well, you know, it has to do with providing the

558
00:31:57,320 --> 00:32:03,320
Speaker 9: permission to build housing and the infrastructure. And so what

559
00:32:03,360 --> 00:32:05,640
Speaker 9: we've seen is that is that there are lots of

560
00:32:05,680 --> 00:32:09,800
Speaker 9: places where the people who currently own houses don't want

561
00:32:09,840 --> 00:32:12,760
Speaker 9: to see any more housing because if there's a lack

562
00:32:12,800 --> 00:32:15,120
Speaker 9: of housing around them, that drives up the price of

563
00:32:15,160 --> 00:32:17,480
Speaker 9: their own house. So the problem is that you've got

564
00:32:17,480 --> 00:32:19,880
Speaker 9: a lot of people who need housing who are younger,

565
00:32:20,120 --> 00:32:22,880
Speaker 9: who want to rent a place, want to buy a place,

566
00:32:23,160 --> 00:32:25,000
Speaker 9: but they're being shot out of the market by other

567
00:32:25,040 --> 00:32:27,400
Speaker 9: people whose goal is to increase the.

568
00:32:27,440 --> 00:32:28,760
Speaker 3: Value of their asset.

569
00:32:29,640 --> 00:32:32,960
Speaker 9: So there's a lot of opposition to construction of new

570
00:32:32,960 --> 00:32:34,600
Speaker 9: housing everywhere in the country.

571
00:32:35,560 --> 00:32:36,200
Speaker 3: Boy, I don't know.

572
00:32:36,320 --> 00:32:39,560
Speaker 5: It just seems like I just see these residential communities

573
00:32:39,600 --> 00:32:43,240
Speaker 5: going up all over the place, and yet I still,

574
00:32:43,360 --> 00:32:45,000
Speaker 5: you know, four or five six years in we still

575
00:32:45,000 --> 00:32:49,680
Speaker 5: hear about housing shortages here. How did we get here, Brad?

576
00:32:49,680 --> 00:32:52,800
Speaker 5: In terms of housing shortage, this wasn't a thing I

577
00:32:52,800 --> 00:32:54,640
Speaker 5: don't know, five six, seven, eight years ago. I just

578
00:32:54,640 --> 00:32:56,000
Speaker 5: don't remember ever hearing about it.

579
00:32:56,960 --> 00:32:59,760
Speaker 9: Well, no, I think it's it's actually something that's been

580
00:32:59,800 --> 00:33:03,880
Speaker 9: going on for fifty years. We back into the early

581
00:33:04,000 --> 00:33:06,520
Speaker 9: nineteen seventies, we were building quite a bit of housing,

582
00:33:06,520 --> 00:33:09,400
Speaker 9: and there was a tremendous increase in the number of

583
00:33:09,440 --> 00:33:14,920
Speaker 9: households looking for housing, especially after World War Two. What

584
00:33:15,000 --> 00:33:18,520
Speaker 9: people don't realize is that over the last ten years

585
00:33:18,600 --> 00:33:22,880
Speaker 9: we've had an even bigger increase in the demand for housing.

586
00:33:23,360 --> 00:33:25,440
Speaker 9: But we haven't gone back to those days in the

587
00:33:25,480 --> 00:33:29,000
Speaker 9: sixties and seventies when lots of housing was just being built.

588
00:33:29,160 --> 00:33:31,720
Speaker 2: Have we not gone back to the sixties and seventies

589
00:33:31,720 --> 00:33:35,600
Speaker 2: because the land is not available clearly in the greater

590
00:33:35,760 --> 00:33:38,320
Speaker 2: Tri State area. That's true, it's just maybe up in

591
00:33:38,400 --> 00:33:42,160
Speaker 2: Boston as well. Is it a land issue? Is it

592
00:33:42,240 --> 00:33:44,160
Speaker 2: foundationally about land?

593
00:33:44,880 --> 00:33:46,560
Speaker 3: It's not really about land.

594
00:33:46,720 --> 00:33:49,160
Speaker 9: It is you know, in a place like New York

595
00:33:49,240 --> 00:33:53,360
Speaker 9: or Boston, there's a very strong public transportation system that

596
00:33:53,560 --> 00:33:57,440
Speaker 9: makes suburban areas available to people, so you can put

597
00:33:57,440 --> 00:34:00,320
Speaker 9: housing there and people can still get the jobs. In

598
00:34:00,840 --> 00:34:03,480
Speaker 9: lots of places, they haven't yet built the same level

599
00:34:03,520 --> 00:34:07,240
Speaker 9: of transportation infrastructure, which makes it harder to move out

600
00:34:07,400 --> 00:34:10,279
Speaker 9: farther into the too where the land is available.

601
00:34:09,880 --> 00:34:11,640
Speaker 2: For your community. Across the nation, this is one of

602
00:34:11,680 --> 00:34:14,520
Speaker 2: the chief econdom in history. At Fannie May and with

603
00:34:14,680 --> 00:34:19,400
Speaker 2: Schiller at Yale University. Bread case is with US Middelburg Communities.

604
00:34:19,480 --> 00:34:23,279
Speaker 2: Bread Every weekend there's an article, OMG, the Cell's gonna die.

605
00:34:23,360 --> 00:34:26,400
Speaker 2: Housing prices are down, rents are down. Do you buy it?

606
00:34:26,480 --> 00:34:28,680
Speaker 2: Is there a permanence to that debacle?

607
00:34:29,239 --> 00:34:29,399
Speaker 8: Oh?

608
00:34:29,520 --> 00:34:31,239
Speaker 3: Not at all. In fact, what we've seen.

609
00:34:31,840 --> 00:34:36,080
Speaker 9: What we saw was a tremendous increase in demand for

610
00:34:36,200 --> 00:34:40,200
Speaker 9: housing in the Southeast and in mid Atlantic, especially because

611
00:34:40,239 --> 00:34:44,719
Speaker 9: of the COVID shutdown. But what that did was it

612
00:34:44,840 --> 00:34:48,040
Speaker 9: stimulated a big supply response, and so we had a

613
00:34:48,080 --> 00:34:50,560
Speaker 9: supply surge a few years ago.

614
00:34:50,840 --> 00:34:53,680
Speaker 3: But that supply surge has really entirely ended.

615
00:34:54,920 --> 00:34:58,480
Speaker 9: You know, the new construction of housing, especially in our

616
00:34:58,520 --> 00:35:00,600
Speaker 9: part of the country, has come to a rashing halt,

617
00:35:01,560 --> 00:35:05,920
Speaker 9: and so we very recently, very very quickly moved into

618
00:35:05,960 --> 00:35:09,960
Speaker 9: an undersupply housing shortage situation, even in the part of

619
00:35:10,040 --> 00:35:12,200
Speaker 9: the country where housing is easiest to develop.

620
00:35:13,120 --> 00:35:17,280
Speaker 5: So, Brad, I'm looking at the thirty year fixed mortgage

621
00:35:17,280 --> 00:35:20,640
Speaker 5: from the Mortgage Bankers Association six point seventy nine percent.

622
00:35:21,239 --> 00:35:23,360
Speaker 5: I got to feel like that's kind of got to

623
00:35:23,400 --> 00:35:27,799
Speaker 5: be the new normal. If so, when do buyers and

624
00:35:27,840 --> 00:35:29,239
Speaker 5: sellers kind of accept that.

625
00:35:29,200 --> 00:35:30,160
Speaker 3: As a new normal.

626
00:35:30,200 --> 00:35:32,520
Speaker 5: It doesn't seem like that's the case yet.

627
00:35:33,239 --> 00:35:36,600
Speaker 9: Well, there's no real pressure for sellers to accept the

628
00:35:36,600 --> 00:35:39,239
Speaker 9: lower prices that they would realistically be able to get,

629
00:35:40,000 --> 00:35:42,319
Speaker 9: and the problem for buyers is that they don't want

630
00:35:42,320 --> 00:35:45,160
Speaker 9: to buy into a situation where they will be the

631
00:35:45,160 --> 00:35:46,720
Speaker 9: ones accepting the lower prices.

632
00:35:47,040 --> 00:35:47,799
Speaker 3: I think you're right.

633
00:35:47,880 --> 00:35:50,600
Speaker 9: I don't think there's any reason to think that mortgage

634
00:35:50,600 --> 00:35:54,520
Speaker 9: interest rates will go down anytime soon, even if shorter

635
00:35:54,600 --> 00:35:58,200
Speaker 9: term interest rates go down. The Federal Reserve has indicated

636
00:35:58,239 --> 00:36:01,000
Speaker 9: that it wants to re use what they used to

637
00:36:01,360 --> 00:36:04,320
Speaker 9: what they called the quantitative easing, and that will increase

638
00:36:04,400 --> 00:36:05,120
Speaker 9: mortgage rates.

639
00:36:05,360 --> 00:36:08,120
Speaker 2: So and so many parts of the country. Bread case

640
00:36:09,000 --> 00:36:11,720
Speaker 2: is renting better than buying.

641
00:36:12,560 --> 00:36:15,439
Speaker 9: Well, that is usually the case, and the reason is

642
00:36:15,520 --> 00:36:18,040
Speaker 9: that people don't realize when they buy a house they

643
00:36:18,080 --> 00:36:19,960
Speaker 9: have to give up a huge chunk of money the

644
00:36:20,000 --> 00:36:22,839
Speaker 9: down payment, and if instead they put that money into

645
00:36:22,880 --> 00:36:25,880
Speaker 9: productive investments, especially in the stock market, then in the

646
00:36:25,920 --> 00:36:29,000
Speaker 9: long run they would probably build more wealth. So there

647
00:36:29,080 --> 00:36:32,279
Speaker 9: is this myth that the way to build wealth is

648
00:36:32,320 --> 00:36:35,239
Speaker 9: to buy a house, and the reality is that usually

649
00:36:35,320 --> 00:36:38,000
Speaker 9: that's not the case. If you're able to buy a

650
00:36:38,000 --> 00:36:44,240
Speaker 9: house when houses are cheap and the stock market is overvalued,

651
00:36:45,360 --> 00:36:47,240
Speaker 9: then great, take your money out of the stock market

652
00:36:47,280 --> 00:36:47,960
Speaker 9: and buy a house.

653
00:36:48,360 --> 00:36:49,919
Speaker 3: That's not our situation right now.

654
00:36:50,640 --> 00:36:55,320
Speaker 9: Right now, houses are very expensive and if houses crashed,

655
00:36:55,320 --> 00:36:57,279
Speaker 9: then you'll probably see the stock market crash at the

656
00:36:57,320 --> 00:37:01,040
Speaker 9: same time. So generally speaking, to build wealth, you're better

657
00:37:01,120 --> 00:37:04,440
Speaker 9: off renting. Now, there are other reasons to buy, and

658
00:37:04,520 --> 00:37:06,279
Speaker 9: some people want to buy just so they can say

659
00:37:06,280 --> 00:37:08,920
Speaker 9: their homeowners. That's not the same as building wealth.

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00:37:10,120 --> 00:37:12,680
Speaker 2: Brad Case, thank you so much. I really can't say

661
00:37:12,800 --> 00:37:13,919
Speaker 2: enough about it. How you get John?

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00:37:14,600 --> 00:37:18,480
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

663
00:37:18,520 --> 00:37:21,560
Speaker 1: starting at seven am Eastern on Apple Corplay and Android

664
00:37:21,560 --> 00:37:24,600
Speaker 1: Auto with the Bloomberg Business App. You can also listen

665
00:37:24,680 --> 00:37:27,919
Speaker 1: live on Amazon Alexa from our flagship New York station,

666
00:37:28,480 --> 00:37:31,480
Speaker 1: Just Say Alexa Play Bloomberg eleven thirty.

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00:37:31,760 --> 00:37:36,320
Speaker 2: Lisa Matale live and in color digitally perfect on YouTube.

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00:37:36,320 --> 00:37:37,799
Speaker 2: What do you got today? Lisa? All right?

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00:37:37,800 --> 00:37:40,560
Speaker 10: Do either of you pay for TSA TSA pre check? Yes,

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00:37:40,719 --> 00:37:43,560
Speaker 10: you do pay for it and clear and clear clear

671
00:37:43,680 --> 00:37:45,000
Speaker 10: which I'm clear.

672
00:37:44,880 --> 00:37:47,279
Speaker 2: I'm mixed, okay, clear sometimes good.

673
00:37:47,320 --> 00:37:49,319
Speaker 10: So the reason for the TSA pre check the big

674
00:37:49,400 --> 00:37:50,800
Speaker 10: jotto it is what the shoes?

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00:37:50,960 --> 00:37:51,160
Speaker 8: Right?

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00:37:51,200 --> 00:37:52,680
Speaker 5: You can leave the shoes.

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00:37:52,360 --> 00:37:54,720
Speaker 10: On if you have the TSA pre check, Well, pretty

678
00:37:54,719 --> 00:37:57,920
Speaker 10: soon everybody could be get that perk, not just the

679
00:37:57,960 --> 00:38:01,160
Speaker 10: ones who pay for it. Ruses are saying the TSA

680
00:38:01,360 --> 00:38:03,719
Speaker 10: is really considering to make these policy changes. They want

681
00:38:03,719 --> 00:38:06,239
Speaker 10: to kind of speed up the security screening times as

682
00:38:06,239 --> 00:38:09,280
Speaker 10: you go through. It's been rough for nearly two decades.

683
00:38:09,320 --> 00:38:10,120
Speaker 8: I mean you think about it.

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00:38:11,200 --> 00:38:14,759
Speaker 10: Eleven yeah, two thousand, the shoe bomber. You know, they

685
00:38:14,880 --> 00:38:17,520
Speaker 10: failed attempt, so that's kind of what sparked it. Critics

686
00:38:17,520 --> 00:38:19,280
Speaker 10: are saying, you know what, it does nothing for security.

687
00:38:19,320 --> 00:38:23,200
Speaker 10: It's this whole theatrical thing. So the TSA has not

688
00:38:23,320 --> 00:38:25,759
Speaker 10: made it official. These are just you know, sources saying.

689
00:38:25,800 --> 00:38:27,520
Speaker 10: But other airports, I mean you think about you know,

690
00:38:27,600 --> 00:38:31,719
Speaker 10: across the European Union, d Buy, Singapore, they all allow

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00:38:31,760 --> 00:38:35,239
Speaker 10: you to keep your shoes on. So come up to date.

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00:38:36,320 --> 00:38:38,640
Speaker 5: I understand, I understand how it kind of came about,

693
00:38:38,680 --> 00:38:42,120
Speaker 5: but it's come on, it's all the technology today.

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00:38:41,760 --> 00:38:45,120
Speaker 2: Yeah, you're sitting at Zurich and they're like laughing at us.

695
00:38:45,680 --> 00:38:46,799
Speaker 2: There's no other way to put it.

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00:38:46,920 --> 00:38:47,160
Speaker 3: I know.

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00:38:47,280 --> 00:38:48,839
Speaker 10: It is a little and then you know, for the

698
00:38:48,880 --> 00:38:50,640
Speaker 10: women you have, were your shoes and you got to

699
00:38:50,640 --> 00:38:52,399
Speaker 10: carry the socks in your bag because you don't want

700
00:38:52,400 --> 00:38:54,319
Speaker 10: to wear barefoot on the floor. I mean it's it's

701
00:38:54,480 --> 00:38:56,600
Speaker 10: it can be a little bit stressful.

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00:38:56,600 --> 00:38:58,080
Speaker 5: Okay, good point. That's a good one.

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00:38:58,080 --> 00:38:58,680
Speaker 3: That's a good one.

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00:38:58,760 --> 00:39:04,000
Speaker 10: It can it can't. Okay, I have this next one. Yes,

705
00:39:04,760 --> 00:39:06,360
Speaker 10: if you're wearing the fancy shoes.

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00:39:06,480 --> 00:39:12,480
Speaker 5: Of course, what you always do, you know.

707
00:39:14,160 --> 00:39:17,680
Speaker 10: Okay, next story. I've been kind of toying with the

708
00:39:17,680 --> 00:39:23,920
Speaker 10: idea of getting a tattoo. That's a story for another day.

709
00:39:24,719 --> 00:39:25,359
Speaker 3: I saw this.

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00:39:27,160 --> 00:39:30,400
Speaker 10: Old street journal. It says that there is an AI

711
00:39:30,760 --> 00:39:35,880
Speaker 10: driven tattoo robot that is taking appointments. Okay. It is

712
00:39:35,920 --> 00:39:39,279
Speaker 10: an awesome Texas space startup. It's called black Dot.

713
00:39:39,320 --> 00:39:39,560
Speaker 8: Okay.

714
00:39:39,560 --> 00:39:42,480
Speaker 10: They raise about seven million dollars for this company. But

715
00:39:42,640 --> 00:39:45,160
Speaker 10: here in New York City they are installing their first one.

716
00:39:45,239 --> 00:39:48,319
Speaker 10: It's taking appointments now. It's at this place called Bang

717
00:39:48,360 --> 00:39:54,040
Speaker 10: Bang in New York City. So the way it works,

718
00:39:54,080 --> 00:39:56,840
Speaker 10: just to give you a brief rundown, the human it

719
00:39:57,000 --> 00:39:59,880
Speaker 10: starts it okay, but then the arms scan this.

720
00:40:00,400 --> 00:40:01,359
Speaker 7: They have this like.

721
00:40:01,440 --> 00:40:04,799
Speaker 10: Extended triple pointed needle. The thing about it is that

722
00:40:04,840 --> 00:40:08,960
Speaker 10: it's supposed to be less. It hurts less because it

723
00:40:09,000 --> 00:40:11,280
Speaker 10: doesn't go as deep into the skinry.

724
00:40:11,360 --> 00:40:16,160
Speaker 2: What tattoo with miss Matato slut.

725
00:40:16,400 --> 00:40:18,839
Speaker 10: I'm thinking about it and maybe a little risk thing.

726
00:40:19,080 --> 00:40:21,520
Speaker 10: I don't know. It could be a mother daughter kind

727
00:40:21,520 --> 00:40:23,719
Speaker 10: of you know, bonding moment. I know, mother of the U.

728
00:40:23,960 --> 00:40:28,640
Speaker 5: Sorry, and I can neither confirm nor deny that I

729
00:40:28,680 --> 00:40:29,360
Speaker 5: have a tattoo.

730
00:40:29,360 --> 00:40:30,479
Speaker 3: Oh so we're just leaving at.

731
00:40:30,360 --> 00:40:35,280
Speaker 10: Then oh Swaine coming through, all right, but it's an interest.

732
00:40:35,320 --> 00:40:37,799
Speaker 10: But the thing that there's concerns from tattoo artists who

733
00:40:37,800 --> 00:40:39,439
Speaker 10: are like, wait a minute, this is my job.

734
00:40:39,520 --> 00:40:40,680
Speaker 5: What are these robots coming in?

735
00:40:40,800 --> 00:40:43,440
Speaker 10: So there's that side of the story too. Okay, I

736
00:40:43,480 --> 00:40:44,840
Speaker 10: want to end with this one. This is in the

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00:40:44,880 --> 00:40:47,120
Speaker 10: Washington Post. This is a great story. The sixty seven

738
00:40:47,200 --> 00:40:50,680
Speaker 10: year old historic U Street diner. It's anonymous right Washington's

739
00:40:50,680 --> 00:40:54,960
Speaker 10: cultural political landscape. We're talking about Ben's Chili Bowl. Started

740
00:40:55,000 --> 00:40:57,600
Speaker 10: with the Ali family back in nineteen fifty eight, still

741
00:40:57,719 --> 00:41:01,040
Speaker 10: family owned operated. But the thing is it's going to

742
00:41:01,120 --> 00:41:02,880
Speaker 10: be shut down for a while. They're in need of

743
00:41:02,880 --> 00:41:07,160
Speaker 10: these big renovations HVC, you know, HVAC, the roof, the

744
00:41:07,280 --> 00:41:10,040
Speaker 10: electric panels, plumbing, and they're going to be shut down

745
00:41:10,080 --> 00:41:13,080
Speaker 10: for several months. It's the longest stretch ever for this

746
00:41:13,120 --> 00:41:16,319
Speaker 10: restaurant before. So they're hoping that when the updates are

747
00:41:16,320 --> 00:41:19,960
Speaker 10: done that it doesn't change the interior feel of it

748
00:41:20,000 --> 00:41:21,839
Speaker 10: that people are used to. We kind of touched upon

749
00:41:21,840 --> 00:41:24,400
Speaker 10: this with with what I think it was a cracker barrel.

750
00:41:25,000 --> 00:41:27,080
Speaker 10: How they wanted to keep that, you know, same kind

751
00:41:27,080 --> 00:41:30,359
Speaker 10: of inside feel that people are used to, but they're

752
00:41:30,400 --> 00:41:33,440
Speaker 10: hoping that it doesn't change this for the restaurant.

753
00:41:33,560 --> 00:41:35,719
Speaker 2: It is magical. Have they shut down yet?

754
00:41:35,760 --> 00:41:37,600
Speaker 10: I don't think you've been July fourteenth.

755
00:41:37,719 --> 00:41:41,480
Speaker 2: Anybody in Washington has never been U Street Northwest. You

756
00:41:41,600 --> 00:41:47,040
Speaker 2: gotta go. It's it is absolutely magical. Lisa Matteo on

757
00:41:47,080 --> 00:41:49,319
Speaker 2: the way to the tattoo Parla of this after thank

758
00:41:49,360 --> 00:41:52,799
Speaker 2: you so much, greatly appreciate that it's ourly speakers with

759
00:41:52,880 --> 00:41:54,360
Speaker 2: Lisa Matea.

760
00:41:54,800 --> 00:41:59,640
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify,

761
00:41:59,760 --> 00:42:04,040
Speaker 1: and anywhere else you get your podcasts. Listen live each weekday,

762
00:42:04,160 --> 00:42:07,640
Speaker 1: seven to ten am Eastern on Bloomberg dot com, the

763
00:42:07,719 --> 00:42:11,759
Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You

764
00:42:11,800 --> 00:42:15,160
Speaker 1: can also watch us live every weekday on YouTube and

765
00:42:15,360 --> 00:42:17,080
Speaker 1: always on the Bloomberg terminal