Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg
Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern
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Speaker 2: Joining us out with our interview of the day without
Speaker 2: question is liz Ane Sanders icondic at Charles Schwabs spend
Speaker 2: there for at least I think it's five years, seven years,
Speaker 2: something like that. Joining us in studio Lizzie Saunders today. Okay,
Speaker 2: forget about all the equity discussion. I want to know
Speaker 2: the act of your Twitter feed. Yesterday your Twitter feed
Speaker 2: looked like the Federal Reserve analyzing economic data. It was
Speaker 2: a rock star feed of like fifteen studies of GDP
Speaker 2: and the dynamics into the equity mark good are you
Speaker 2: doing that in your spare time?
Speaker 3: Well, I'm not creating most of the charts, you know,
Speaker 3: that's Kevin's domain. If I had to create, it would
Speaker 3: be you know, from the terminals with crayon. So thankfully
Speaker 3: I've got a great uh pair of folks with Kevin
Speaker 3: and Adrian who do the charts. But you know, there
Speaker 3: are there are days where weeks happen, and this week
Speaker 3: is one of those unbelievable weeks.
Speaker 2: When I get breakfast at Sarah Bass in Central Park
Speaker 2: South today and do like a four hour conversation on
Speaker 2: this moment at hand, I got brain crude under sixty
Speaker 2: dollars a barrel global slow down, US slowdown? Is that
Speaker 2: what you model in? Yeah?
Speaker 3: I think what we're seeing now is there was a
Speaker 3: lot of debate in the onset of the escalation of
Speaker 3: the trade war as to whether the growth hit would
Speaker 3: come first of the inflation pop would come first. And
Speaker 3: it looks like the growth hit, YEP, maybe coming first.
Speaker 4: So Liz, we've got the S and P five hundred.
Speaker 4: I mean that good news.
Speaker 5: Bad news is we're down ten percent from the high
Speaker 5: early in the ear, but the good newses were ten
Speaker 5: percent higher.
Speaker 4: From the bottom. What do you make of this? What
Speaker 4: do you think we should be doing here?
Speaker 3: I think what we're seeing in the month of April,
Speaker 3: particularly since the low, is a sign that the retail
Speaker 3: trader is still very active. They're still in the by
Speaker 3: the dip mentality. You've got tech BAC and the leaderboard
Speaker 3: on a month to date basis even though it's toward
Speaker 3: the bottom on a year to date basis. Vand Track
Speaker 3: tracks what retail traders are doing. And that's in start
Speaker 3: contrast to hedge funds and other institutions and CTAs that
Speaker 3: have been going more risk off. And then when you
Speaker 3: see something, you know, Goldman Sachs has those great indexes
Speaker 3: and boxes of baskets, and their Meme stock basket has
Speaker 3: been soaring in the last month too, another proxy for
Speaker 3: retail traders.
Speaker 4: What do you make here of earnings?
Speaker 2: Right?
Speaker 4: Guess we're almost halfway through the earning cycle. Ie, I
Speaker 4: see a.
Speaker 5: Lot of companies probably doing what I would do, which
Speaker 5: is like, I don't know what's going on at there,
Speaker 5: so I'm going to pull my guidance or give you
Speaker 5: some ranges or some scenarios.
Speaker 4: What are you taking away from earning shot?
Speaker 3: I think companies have put themselves into time out, you know.
Speaker 3: Earning so far for first quarter a little bit better
Speaker 3: than expected, not quite the beat rate that we've seen
Speaker 3: over the last year. So, but that's through March data.
Speaker 3: So it's the guidance are lack thereof that I think
Speaker 3: is really important. And it is starting to feel a
Speaker 3: little bit like the early stages of the pandemic, when
Speaker 3: at that time you've had a re percentage of companies
Speaker 3: got and solved together.
Speaker 2: Is institutional under owned in the MEGS seven that retail
Speaker 2: owns up.
Speaker 3: To their eyeballs in many cases yes, because of certain
Speaker 3: funds requirements that they have a max on the amount
Speaker 3: they can hold percentage wise in any individual stock. Even
Speaker 3: some of the sector exchange traded funds are limited are limited,
Speaker 3: so they they're by default can't get couldn't have developed
Speaker 3: the same concentration problem is what was embedded in cap
Speaker 3: weighted in Texas the.
Speaker 2: Charon at the University of Delaware a few years ago,
Speaker 2: Liz Anne Saunders read Securities Analysis. This is a Seth
Speaker 2: Klarman version. I actually read the first edition, which starts
Speaker 2: with railroad stocks and the Reason I bring us forward
Speaker 2: by Warren Buffet, Graham Dodd and Coddalhealth two out of
Speaker 2: colaun of this good work out of Columbia Lizzianne and
Speaker 2: I read this cover to cover a few years ago,
Speaker 2: and out there Lizzyanne is a terminal value. I am
Speaker 2: appalled at the media's shortsightedness. What's Microsoft going to do
Speaker 2: next quarter? What's Apple going to do next quarter? How
Speaker 2: do we get back to actually looking at a five year,
Speaker 2: a seven year analysis of what some of these juggernaut
Speaker 2: stocks are doing.
Speaker 3: Can I plug our version of May Day today? Yes,
Speaker 3: so we are launching today the inaugural of be an
Speaker 3: annual event called national in Day. May first is purposeful
Speaker 3: because what it means in our world is that was
Speaker 3: the year fifty years ago or the day fifty years
Speaker 3: ago on May first, where the sec ended fixed Commission,
Speaker 3: much of Wall Street decided to raise commissions and Juck
Speaker 3: Schwab himself said, yeah, let's lower them.
Speaker 2: It was revolutionary, that was.
Speaker 3: But the day is about encouraging everyone to at least
Speaker 3: take one day a year and educate themselves about investing
Speaker 3: and learn a bit more, become engaged and you want
Speaker 3: to empowered investor?
Speaker 2: Why did that?
Speaker 6: How long time?
Speaker 2: This at the top of the interview. I'm running at
Speaker 2: a time here and mister Schwab deserves some love here
Speaker 2: for really what he courageously did there. I mentioned Arthur
Speaker 2: Levitt is well, so today is your May Day. It's
Speaker 2: a number one mistake the media makes in short termism right.
Speaker 3: Now, asking people like me the question should investors get
Speaker 3: in or get out. I mean, that's just shame on
Speaker 3: anybody that that's not investing, that's gambling, not just on
Speaker 3: a moment in time, but in two moments.
Speaker 2: And is back to the humor, but the sadness folks
Speaker 2: of America missing out on the Lizone Saunders great bull market,
Speaker 2: the joke of the triple leverage all cash fun The
Speaker 2: fact is it's not funny. It Can you come back
Speaker 2: like soon?
Speaker 7: Yeah?
Speaker 3: You know, I mean I love being in here in person.
Speaker 2: Have you seen Robert Plant this summer or you know,
Speaker 2: we got any tour guy with the floods.
Speaker 3: If he decides to pair back up with Page and
Speaker 3: John so cool, Jason speaking, well, they are, they're on
Speaker 3: speaking terms. Plant doesn't want to do it.
Speaker 2: The only reason they go out is when somebody gets
Speaker 2: divorced and they have to pay for it. I mean,
Speaker 2: that's you know.
Speaker 3: You know, there was rumor that Sir Richard Branson offered
Speaker 3: them almost a billion dollars a number of years ago
Speaker 3: to just do two concerts and wanted msg here. Wow,
Speaker 3: And it was apparently Robert Plant that said, wow, I.
Speaker 2: Know, there you go. Folks are surveying Bloeplin Sanaders. I
Speaker 2: would look for her in Birmingham with Ira Jersey at
Speaker 2: the Aston Villa. Was it pan Terror's playing?
Speaker 4: I know that's a big show.
Speaker 2: Lisa Mateo, Lizzie Sanders. They love Pantera.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
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Speaker 2: Now, Daniel Ives joins us, and he's the greatest thing
Speaker 2: about Ives is when he's right, he doesn't do the
Speaker 2: rhyme right and right and right thing. He just moves
Speaker 2: on to the next analysis. So I'm going to go
Speaker 2: CEFA on your Dan. I joining from Webb Bush.
Speaker 6: The thing I don't get is the terminal value of
Speaker 6: revenue growth for these juggernauts. The media is out one quarter,
Speaker 6: if we're lucky, three quarters a year, The streets out
Speaker 6: two years. I was trained to go out five or
Speaker 6: even seven years. Do they have persistency of revenue growth
Speaker 6: out to two thousand and thirty two?
Speaker 4: Look?
Speaker 8: I think, for really the first time, maybe ever big
Speaker 8: tech because of this AI revolution, the visibility and the
Speaker 8: demand that they're seeing gives them what I believe is
Speaker 8: almost hypergrowth into the next call it five six, seven years.
Speaker 8: And I think that's that's essentially what we're seeing play
Speaker 8: out here, whether it's on digital media, whether it's on cloud,
Speaker 8: across the board, even in the tariff uncertainty, Big tech
Speaker 8: Rock of Gibraltar. I mean, it's playing through as we
Speaker 8: see it.
Speaker 4: Hey, Dan, I'm looking at a Microsoft.
Speaker 5: I mean, here's a three trillion dollars market cap company,
Speaker 5: stocks up t pre market.
Speaker 4: I mean, it's just amazing here.
Speaker 5: Talk to us about what's got the street enthused tier
Speaker 5: about Microsoft this morning?
Speaker 8: Well, first off, I mean think about all the rumors
Speaker 8: abandoned data centers here and there that well, how about
Speaker 8: them apples? Right? You don't see I don't think those
Speaker 8: a banded datas. I think that story is gonna disappear,
Speaker 8: right because the reality is like Azure two hundred bits
Speaker 8: above street, accelerating into the next quarter or two. I
Speaker 8: mean to put some numbers in, I basically think like
Speaker 8: you could be looking at for a typical Microsoft customer,
Speaker 8: you could be looking at thirty to forty dollars of
Speaker 8: every hundred hours that they've already spent thirty to forty
Speaker 8: incremental just on AI spent. You put that together and
Speaker 8: you can essentially be looking at cloud numbers are essentially
Speaker 8: double every two years.
Speaker 4: Dan.
Speaker 5: Prior to the beginning of this year, all we talked
Speaker 5: about was AI for the past couple of years, and
Speaker 5: for the last you know, four months, we've talked about
Speaker 5: nothing but tariffs.
Speaker 4: How is the AI story unfolding? Now? Can you give
Speaker 4: us an update?
Speaker 8: Yeah, look, i'd say, and we talk about it. You
Speaker 8: know that that Tom reference. In the last few weeks,
Speaker 8: like all of our checks, I mean, we've we've seen
Speaker 8: some almost acceleration and a lot of the AI spend
Speaker 8: because I think companies are basically saying like this is
Speaker 8: you cannot touch this, because this is really what's driving
Speaker 8: the strategic shitter view of a lot of these coms
Speaker 8: over the coming years. And I think we're talking to
Speaker 8: two and a half trillion that's going to be spent
Speaker 8: with AI, with really a small amount of companies that
Speaker 8: are going to benefit. And I think when it comes
Speaker 8: to tariffs is not impound.
Speaker 2: I got a return on invested capital, Folks, that one
Speaker 2: of the best screens in the Bloomberg terminal is w
Speaker 2: acc Way did the average cost a capital study. It's
Speaker 2: what's called a stern Stewart study from a million years ago,
Speaker 2: and I got a persistent twenty five percent return on
Speaker 2: invested capital for satchin company. Dan eives. I got revenue
Speaker 2: pre pandemic of one hundred and twenty six gazillion. They've
Speaker 2: done a double to where we are. Now do they
Speaker 2: get out to I can't believe I've never said this number.
Speaker 2: Are they going to get out to five hundred billion
Speaker 2: in annual revenue two thousand and thirty one, two thousand
Speaker 2: and thirty two? What's in the way of that?
Speaker 8: I mean, I think four fifty to five hundred. I
Speaker 8: mean it's it's hit able because just given I don't
Speaker 8: see what's gonna stop it, just given where companies are
Speaker 8: going and just to I mean, you put in perspective
Speaker 8: today like you only have two percent of US enterprises
Speaker 8: that have gone down the true aipath. It just should
Speaker 8: that's just US. None in Europe none, really, I mean
Speaker 8: outside of China it's minimum in termed agent. It just
Speaker 8: shows where this is going on. Despite obviously tariff uncertainty.
Speaker 5: Hey Dan, We're going to get our good friends from
Speaker 5: Cooper Tino. Apples can report after the close here today.
Speaker 4: What are you looking for?
Speaker 8: I know like they're not going to give guidance, right,
Speaker 8: I mean, I'd be shocked, and I think I think
Speaker 8: the big question for them is the quarter itself actually
Speaker 8: is pretty strong and even something that could be pulled forward.
Speaker 8: The big question for them is like, how do you
Speaker 8: navigate coming out with iPhone seventeen in a typical cycle
Speaker 8: with these tariffs? What are you waiting for from the administration?
Speaker 2: Is there?
Speaker 8: And I think that's the question. Does the timing get
Speaker 8: the way we've talked about for Apple obviously being bullsh
Speaker 8: you know, for a ducade, this is you don't look
Speaker 8: at over the next three months. You got to look
Speaker 8: as you know, as tom Owi's reverence, you got to
Speaker 8: look over the next twelve to eighteen months. I'll give
Speaker 8: free cash flow, I'll get the install base, and even
Speaker 8: if things move around and I didn't, negotiations ultimately come through,
Speaker 8: and I think they will be much more unsteed relative
Speaker 8: to you know, where we see things stay when it
Speaker 8: comes to towers.
Speaker 5: Tom Apple's gonna have over one hundred billion dollars a
Speaker 5: free cash flow.
Speaker 2: Yeah.
Speaker 4: I mean, well, Dan, what do they do here with
Speaker 4: this free cash flow here?
Speaker 8: I mean, look, M and A has obviously been minimal
Speaker 8: to that the way that they viewed in kuper Tina,
Speaker 8: it's it's basically from an R O I C. It's
Speaker 8: about to buy back and it's about ultimately how they
Speaker 8: how they're going to continue return that to Cheryl right.
Speaker 8: I mean, you.
Speaker 2: Notice you don't see this on Bluebird Radio, but you
Speaker 2: see it on YouTube. What I've does is he's at
Speaker 2: some golf courses. He in Arizona.
Speaker 4: I don't know where he is.
Speaker 8: I'm in an area airport.
Speaker 2: He drops in the wet bush backdrop of some class
Speaker 2: hotel room. He's like in a motel five or a
Speaker 2: Motel four somewhere instead of some two thousand dollars a
Speaker 2: night golf course in Scott's you know, one of the
Speaker 2: places sweeties been. Dan. I look at the belief here,
Speaker 2: and what I see more than anything is mag seven
Speaker 2: is under owned by disbelieving institution chefs. Retail America loves Apple. Okay,
Speaker 2: that's a generalization of my part. But what happens when
Speaker 2: we wake up this morning with thirty three percent as
Speaker 2: your growth rate, what we get from Amazon tomorrow, whatever,
Speaker 2: I just count the boxes at your bottom at discussion,
Speaker 2: where is the institutional Wall Street these companies?
Speaker 8: I think, well, I can nailed that retail, stuck with it, institutional.
Speaker 8: They've hit the exit and I think they got and
Speaker 8: they've got scared out a lot of the mags haven
Speaker 8: a lot attack and now guess what's going to happen
Speaker 8: over the coming weeks. They're they're going to have to
Speaker 8: double down. And I think that's why I think the
Speaker 8: run here that we can see intact over the next
Speaker 8: three four weeks, especially as we go through I think
Speaker 8: could be massive because it's under own institutionally. Because well
Speaker 8: is Paul talked about Stock being on nine in terms
Speaker 8: of mist there was a view that they were gonna
Speaker 8: miss azure. They absolutely I mean, this is an Aaron
Speaker 8: Judge like performance.
Speaker 4: Hey, yes it is Aaron Judge.
Speaker 5: Happened even a better year this year than last year
Speaker 5: if that season impossible exactly? Hey, Dan talk to us
Speaker 5: about Tesla and I think a lot of people are
Speaker 5: probably most interested in Elon Musk. We haven't heard from
Speaker 5: him much over the past month or two on the
Speaker 5: Doge front.
Speaker 7: Where do you and I know you've been very very.
Speaker 5: Public and very outspoken about suggesting that he really needs
Speaker 5: to get back to his day job at Tesla. What
Speaker 5: do we know about Elon Musk and Tesla these days?
Speaker 8: Yeah, and then obviously you know the Journal article of
Speaker 8: j obviously a board denied. Then that came out last
Speaker 8: night about you know, looking for a CEO potentially, Look,
Speaker 8: the reality is a must. That was a code red
Speaker 8: situation and it was the most important comments call he
Speaker 8: ever had to do, and he handled it. I think
Speaker 8: the best I've ever seen him. Pick Tesla. He's going
Speaker 8: to lead them into this next chapter when it comes
Speaker 8: to autonomous robotics and ultimately I think that more and
Speaker 8: more a growth reband that we see in China and
Speaker 8: his days the White House are done. However you want
Speaker 8: to call it one to two days that we I mean,
Speaker 8: I think this is the be and the end. The
Speaker 8: board was not gonna take it, CHERYLD is not going
Speaker 8: to take it. But that's you're talking about one of
Speaker 8: the biggestess up the technology companies or a Muscus, Tesla's Musk.
Speaker 2: And your community across the nation. This morning, and of
Speaker 2: course on YouTube, Dan, I's with us with Webbush looking
Speaker 2: over here to see the Secretary of Treasury and conversation.
Speaker 2: I believe with Maria over at Fox Furs will monitor
Speaker 2: those headlines from the Secretary of Treasury. It seems Paul
Speaker 2: every time he speaks is that press conference the other day,
Speaker 2: he moves the markets.
Speaker 5: Guys, Hey, Dan, just on the EV front here, I
Speaker 5: mean there's a lot of I guess, fundamental concerns here.
Speaker 4: If you're a Tesla investor, I guess just from the
Speaker 4: car business.
Speaker 5: I know Elon's trying to have your focus on other areas,
Speaker 5: but boy, by D and the Chinese operators are just
Speaker 5: really tough, aren't they.
Speaker 8: Yeah, it look b what I mean we've seen in
Speaker 8: firsthand in China. You know many times BYD has done
Speaker 8: phenomenal and but I think it's not a mutually exclusive
Speaker 8: in other words, like Tessa is going to be also
Speaker 8: successful in China like they have been when it comes
Speaker 8: to the EV market. I mean, Paul, I think ninety
Speaker 8: the future value of Tessa is going to be autonomous
Speaker 8: about it. I mean that's my.
Speaker 5: And and Dan just just to be clear here, the
Speaker 5: board at Tesla thinking about a replacement.
Speaker 4: That's not even that's not even thought of. Is it really?
Speaker 2: Again?
Speaker 8: Keene came, he didn't want to do it, so after
Speaker 8: he was after he took his hat out of the ring,
Speaker 8: there was there was no one left. Look, I think,
Speaker 8: but Paul, they had to do something, whether it Tesla
Speaker 8: denies or they had to do a warning shot. It
Speaker 8: got to and we talked about with you guys while
Speaker 8: on the ship. They it hit. It hit that moment, true.
Speaker 2: Dan, I got a minute left on Tesla. Have you
Speaker 2: been in one of the Chinese EV's have you you know,
Speaker 2: you're such a hitter. Have you been like in a
Speaker 2: B Y D yep? Are they are they nice? Are
Speaker 2: they like?
Speaker 7: No?
Speaker 4: They're they're there so that you go, what are.
Speaker 2: They like you? He doesn't. Michael bar Ives doesn't even
Speaker 2: know what a ugo is. It's sort of like a pinto.
Speaker 2: I wish I didn't know what you go, Jives, what's
Speaker 2: the quality of a Chinese EV? Look?
Speaker 8: I mean by d high quality, I mean I think
Speaker 8: even someone like Sweeney would take that to the golf.
Speaker 2: Course where I go, Dan, I thank you so much,
Speaker 2: your trooper. I can't say enough about the hours Paul,
Speaker 2: you mentioned the hours he works.
Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live
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Speaker 2: Leland Miller is a China basebook. Where's thrilled he could
Speaker 2: join us this morning? What's the thing in the zeitgeist
Speaker 2: on the China US US China trade war that's not
Speaker 2: talked about enough?
Speaker 7: Well, I think too much is being made of the
Speaker 7: idea that she can't come to the table and Trump
Speaker 7: can't come to the table because each of them has
Speaker 7: to have the other one go to the table first.
Speaker 7: It's in the boat interest of both these countries to
Speaker 7: eventually move towards some sort of negotiation. That doesn't mean
Speaker 7: that the negotiation is going to move to anything, but
Speaker 7: the terriffs are in a very very high level of
Speaker 7: both directions. They don't even serve an economic purpose past
Speaker 7: a certain point. And if you have tariffs at one
Speaker 7: hundred and forty five percent, even at half that, you're
Speaker 7: not making an economic difference because no Chinese goods are
Speaker 7: cost competitive at even half of one hundred and forty
Speaker 7: five percent.
Speaker 2: So the tariffs are sort of arbitrary at a certain point.
Speaker 7: If the President wants to come to the table say look,
Speaker 7: we'll bring things down in return you do some things
Speaker 7: for us, that certainly is a possibility if he's feeling
Speaker 7: economic pressure, if he's feeling pressure to sort of coalesce
Speaker 7: the Republican Party in one direction towards towards the tax
Speaker 7: bill as well. So there's a lot of pressures that
Speaker 7: are building up as we get towards summertime, they're going
Speaker 7: to sort of change the dynamics around the tariff discussion.
Speaker 5: Lee, then, can you give us a sense of where
Speaker 5: you think China is in terms of its relative strength
Speaker 5: in negotiating with the United States.
Speaker 4: Give us a sense.
Speaker 5: Of how things are in China and how they might
Speaker 5: impact its ability to negotiate.
Speaker 9: With us well in a vacuum.
Speaker 7: The United States has much much more leverage over China
Speaker 7: than China has of the United States because the size
Speaker 7: of the of the of the trade surplus that that
Speaker 7: that China has the United States. And I think that
Speaker 7: the idea here is if that were all we were
Speaker 7: talking about, there is there's a very good chance that
Speaker 7: the United States could just weigh this out. The problem
Speaker 7: is there's a lot of other things going on in
Speaker 7: the world. You've got You've got tariff battles with with
Speaker 7: with about everybody right now, and so it's a question
Speaker 7: of who has a higher pain tolerance. And the Chinese
Speaker 7: have a higher pain tolerance in the US than the
Speaker 7: Americans do because of the fact that the American system
Speaker 7: doesn't quite allow for what the Chinese system does. So
Speaker 7: I think right now it's a question of who wants
Speaker 7: to take the most pain. The Chinese economy is under
Speaker 7: some duress right now, but the United States economy is
Speaker 7: going to be under more dress as we get into
Speaker 7: mid Bay and retail shelves are aren't restocked and freight
Speaker 7: starts breaking down. So there's a lot of pressure right
Speaker 7: now to come to some sort of you know, short
Speaker 7: term solution as we think through how this is going
Speaker 7: to end out.
Speaker 4: So how do you expect this to play out? Leland?
Speaker 5: I mean, do you expect a meeting between President Trump
Speaker 5: and President She? Do you think maybe it'll just be
Speaker 5: trade representatives hammering out something, just the meat and potatoes
Speaker 5: kind of stuff that always happens.
Speaker 4: How do you think this might play out?
Speaker 7: Well, Trump clearly wants to get in the room with she,
Speaker 7: and she doesn't want to get in the room with
Speaker 7: Trump because he's worried that will do something to embarrass him,
Speaker 7: that he'll say that something's happening, or and then he'll
Speaker 7: go back after she agrees. So there's there's a cadence
Speaker 7: to this that has to happen. I think in order
Speaker 7: for anything enduring to to move forward, somebody that will
Speaker 7: stay for longer than a few weeks or a few months,
Speaker 7: you have to get the two leaders in a room
Speaker 7: and you have to have them agree in front of
Speaker 7: a camera that this is the deal going forward. But
Speaker 7: that's not necessarily any you know, any going to happen
Speaker 7: in the near term because the Chinese side is very
Speaker 7: worried that the Americans are going to change the nature
Speaker 7: of the games.
Speaker 2: Involved Leland Miller to China, Beijing, where it's just thrilled
Speaker 2: that he's with us. Okay, here's the reality, folks, And
Speaker 2: Paul knows this. When I say I went to China,
Speaker 2: it's the airport a Mercedes. Maybe you go two miles,
Speaker 2: three miles Shanghai, a little longer some fancy hotel, a
Speaker 2: fancy office. Yep. Then I get in the.
Speaker 6: Cargo back to the airport and I've been deep into China.
Speaker 2: Leland Miller. I want to go deep into China right now?
Speaker 2: Southwest of Beijing. I guess north, a little bit west
Speaker 2: rather of Shanghai, and I'm gonna I think I'm mispronouncing it.
Speaker 2: Shang She's Sha n Xi, huge manufacturing appliance place. What
Speaker 2: do they do, I mean, when they're out of a job,
Speaker 2: are they like starving? Or is there a social net
Speaker 2: in this trade war for people deep into China and
Speaker 2: all those manufacturing jobs.
Speaker 7: Well, there is a social safety net, but there's also
Speaker 7: a lot of pain. So we're seeing right now manufacturing
Speaker 7: in China is actually under a lot of duress. The
Speaker 7: economy outside of manufacturing is actually looking more resilient than
Speaker 7: it did earlier this year. You know that if you
Speaker 7: look at the PMI has just reported all these things
Speaker 7: happening in manufacturing. We had that data last month and
Speaker 7: so we saw a huge fall off last month. We
Speaker 7: saw the end of most of the front loading happened
Speaker 7: at the end of last year. So what we're seeing
Speaker 7: right now is a is some resilience in the economy
Speaker 7: outside of manufacturing, but a lot of pain within manufacturing.
Speaker 7: So what do they do with manufacturing? The cost of
Speaker 7: credits going down, there's they're they're they're boosting it any
Speaker 7: way they can. They're gonna have to. Fiscal support is
Speaker 7: going up, so they're gonna have to continue to support
Speaker 7: manufacturing more and more and more because if this trade
Speaker 7: war does continue, then they're gonna be under significant page.
Speaker 2: Okay, so classic economy and a command control economy, I
Speaker 2: get that. The classic economics. Here, they're gonna give a
Speaker 2: surplus spur to the people of China, and the only
Speaker 2: outro there is a depreciation of the Chinese. You want?
Speaker 2: Is that just? Is that a Leland Miller certain to happen?
Speaker 6: Now, I don't think it's certain at all.
Speaker 7: As a matter of fact, I don't think they want
Speaker 7: it to happen unless there's a break the glass emergency.
Speaker 7: So one of the problems with just appreciating your way
Speaker 7: out of this. Yes, it would help manufacturing, it would
Speaker 7: it would badly hurt consumption. It would be a political
Speaker 7: disaster for China around the world because there'd be countere valuations,
Speaker 7: there'd be a enormous amount of political friction from that,
Speaker 7: especially for the United States, but but also for everywhere else.
Speaker 7: So the the you know, the you want is talk
Speaker 7: about as if it's a tool in China's economic weaponry.
Speaker 7: It's really not. It's at the end of the lion
Speaker 7: to break the glass eburgency. If they do anything other
Speaker 7: than just sort of ease, you know, ease pressure off
Speaker 7: the currency and very gradual movements, they're going to get
Speaker 7: a lot of political friction for the rest of the world,
Speaker 7: particularly United States. I don't think they want that, and
Speaker 7: they don't want the domestic repercussions either.
Speaker 2: Don't be a stranger, Leila Miller. Thank you so much,
Speaker 2: China BASEBA.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto
Speaker 1: with the Bloomberg Business app. You can also listen live
Speaker 1: on Amazon Alexa from our flagship New York station, Just
Speaker 1: say Alexa play Bloomberg eleven thirty.
Speaker 2: He's joined us before and for all of you across
Speaker 2: the nation and your commute on YouTube across this nation,
Speaker 2: Canada and Mexico, around the world. The New York City
Speaker 2: mayoral primary, the Democratic Party primary, because there's like twelve
Speaker 2: Republicans within the tri state area. I'm kidding. The answer is,
Speaker 2: it's a really interesting study on a budget standpoint of
Speaker 2: what to come. We've had in a number of the
Speaker 2: candidates joining us again. Brad Lander joins us. He's a
Speaker 2: forty fifth New York City controller, understands budgets. He's to
Speaker 2: the left of left. But hey, you know what, it's
Speaker 2: a big city. We had a budget yesterday, and I
Speaker 2: get it. It's an election year. Mayor Adams put out
Speaker 2: a budget that is, if I'm elected, free beer. But
Speaker 2: how close are we to the headlines from another time
Speaker 2: in place? There's a movie out now on this four
Speaker 2: to city Drop Dead? Are we going to screw this
Speaker 2: up so bad? Whoever is a new mayor that we're
Speaker 2: going to see Trump to city full colon drop dead?
Speaker 9: The mayor that Eric Adams. The budget that Mayor Eric
Speaker 9: Adams put out yesterday is preposterous. It makes no allowances
Speaker 9: for the likelihood of an economic downturn, no allowances for
Speaker 9: the likelihood of federal budget cuts. He doesn't put one
Speaker 9: penny in reserves, and it's got a one point four
Speaker 9: billion dollar deficit in the current fiscal year. So yes,
Speaker 9: this is him trying to campaign even though he long
Speaker 9: destroyed his chances of people voting for him again. But yes,
Speaker 9: he is going to hand the next mayor or real problem,
Speaker 9: which is why New Yorkers need someone who knows how
Speaker 9: the budget works.
Speaker 4: Give us it. Just a sense of the state of
Speaker 4: the city right now from a financial perspective, where are we?
Speaker 9: Yeah, so before the tariff threats, we were actually in
Speaker 9: pretty good shape. Private sector jobs back up above the
Speaker 9: pandemic for the first time, commercial vacancies starting to decline.
Speaker 9: Now too much growth in low wage sectors healthcare and
Speaker 9: social services, but some promising signs. But if the tariffs
Speaker 9: tip us into an economic downturn or a recession, that'll
Speaker 9: blow a big hole in our budget. If there are
Speaker 9: a big federal budget cuts to course services, that'll blow
Speaker 9: a big hole in our budget.
Speaker 5: Do you at this point anticipate the federal government cutting
Speaker 5: back support of New York City for example?
Speaker 9: Yeah, going two different ways. Look, the budget that they've
Speaker 9: set the framework up for is going to cut money
Speaker 9: to all cities and states, leave politics aside, and that's
Speaker 9: you know, money for school lunches and money for healthcare
Speaker 9: in our public hospitals. And then yes, I mean Trump
Speaker 9: is clearly aiming at cities like New York, and that's
Speaker 9: a real risk. So I've recommended putting a billion dollars
Speaker 9: more in our Rainy Day Fund, a billion dollars more
Speaker 9: in our general reserve, just so we could be prepared
Speaker 9: for what's coming.
Speaker 2: The land or distinction, like a lot of most people
Speaker 2: grew up in one zip code, you know, on this
Speaker 2: side of that side of Central Park or one of
Speaker 2: the boroughs. You grew up in the shadow of kmox
Speaker 2: out in Saint Louis, you are different because you actually
Speaker 2: understand there's other cities out there, just like New York.
Speaker 2: How bad is this going to be for Saint Louis
Speaker 2: or for Dallas or for a very beleagued crime ridden
Speaker 2: in Chicago.
Speaker 9: Look, this is going to be a challenge for every city.
Speaker 9: If you lose the federal funding that pays your school lunches,
Speaker 9: or the money and your public hospitals, or your housing
Speaker 9: vouchers there were you know, New York stands to lose
Speaker 9: eight thousand housing vouchers. I don't know how many Saint.
Speaker 2: Louis President Trump have the power to do that. Does
Speaker 2: he have the power in two thousand and seventy five
Speaker 2: to say, Trump to city drop dead?
Speaker 9: Look, you know these eight thousand housing vouchers he's already
Speaker 9: said he's going to cut. He absolutely has that power.
Speaker 9: That'd be eight thousand more homeless families if we don't
Speaker 9: do something about it.
Speaker 5: Right outside our front doors here on Lexington Avenue, we've
Speaker 5: got these big cameras on Lexington Avenue for the congestion pricing.
Speaker 4: What's your view on that? Where are we on that?
Speaker 9: It's a great step forward. You know, I was one
Speaker 9: of the people. I've been fighting for it alongside Mike
Speaker 9: Bloomberg since two thousand and seven when the governor put
Speaker 9: it on pause. I convened the litigation coalition that got
Speaker 9: it off pause by bringing two lawsuits. And now we've
Speaker 9: got one hundred and sixty million dollars more headed toward
Speaker 9: fifteen billion to invest in modern signals, in subway elevators,
Speaker 9: in platform barriers and station gates. Is it better faster
Speaker 9: subway service? Travel Time across the bridges are up ten
Speaker 9: to thirty percent, Traffic is down twelve percent. More people
Speaker 9: are on the subways more people are on the buses,
Speaker 9: more people are taking a city bike. It is working
Speaker 9: better than anybody predicting.
Speaker 2: North to sixtieth Street, Park Avenue looks like downtown in
Speaker 2: nineteen ten. It's like jammed up outside the congestion or
Speaker 2: am I right on that?
Speaker 9: There have not been big traffic backups, even on the
Speaker 9: edges of the zone. Honestly, it is working better than
Speaker 9: anyone expected. Foot traffic is up, business is going well.
Speaker 9: This is one that I thought would be good. It's
Speaker 9: even better.
Speaker 2: Redlander, with this New York City controller and may oral
Speaker 2: candidate here, what do you do up to the June primary?
Speaker 2: I mean, well, what's the do you in this fractured
Speaker 2: cultural New York City? I mean, I don't think it's
Speaker 2: a city of a Beam or David Dinkins or others. Now,
Speaker 2: how do you campaign in this modern age?
Speaker 9: Well, first, you go everywhere, and it's an amazing city.
Speaker 9: Yesterday I was out in Brownsville, I'm up in the Bronx,
Speaker 9: I'm in all the as many neighborhood as I can
Speaker 9: be personally. Of course, I'm up on the air with
Speaker 9: TV ads next week. You're doing radio digital, You're getting
Speaker 9: out on every single place. I love being here.
Speaker 2: It's fun.
Speaker 9: New Yorkers are amazing. They're very diverse. They tell you
Speaker 9: how they feel. They're pissed off about how much how
Speaker 9: expensive it is, and how expensive housing and childcare are.
Speaker 9: They want to feel safer on the subways. So they
Speaker 9: love hearing my plan to end street homelessness for folks
Speaker 9: with serious mental illness.
Speaker 4: What they want solution?
Speaker 5: I mean, Tom and I we've been in this city
Speaker 5: for a long long time.
Speaker 4: Lisa as well.
Speaker 9: What does the city like New York do on that. Look,
Speaker 9: it's only about two thousand people who have serious mental
Speaker 9: illness and are sleeping on subways and streets. We can
Speaker 9: connect them to housing and services with a better continuum
Speaker 9: of care and a model called Housing First. I put
Speaker 9: out a plan to do it.
Speaker 6: One of the.
Speaker 2: Themes we're hearing from all the candidates, including your bread,
Speaker 2: is the basic idea we need more police officers. You're
Speaker 2: a liberal, how do you meet the Staten Island block
Speaker 2: It says we're three thousand short now NYPD? How do
Speaker 2: we affect that change?
Speaker 9: Yeah, I mean I'm honest about it. I do think
Speaker 9: progresses myself included. We're slow to reckon with rising disorder
Speaker 9: coming out of the pandemic mental health crime, crime crime,
Speaker 9: mental health disorder. But look, we're now, you know, fifteen
Speaker 9: hundred officers down and by January first, it'll probably be
Speaker 9: two or three thousand. So I have a plan to
Speaker 9: recruit and retain officers underpaid. Growing the NYPD Cadet program. Well,
Speaker 9: my big idea is, let's grow the NYPD Cadet program,
Speaker 9: which brings people in and pays their college tuition. But
Speaker 9: you have to be halfway through college first. Let's open
Speaker 9: that up to kids out of high school. They could
Speaker 9: become cadets. They start getting paid, they get their tuition covered,
Speaker 9: they become better officers, keep our cities.
Speaker 2: Say a two year old NYPD officer can go out
Speaker 2: to the suburbs for more money, right are they? Frankly,
Speaker 2: the nurses, the teachers, everybody else. It is the pay
Speaker 2: grid of New York City. Underpaid is a general statement.
Speaker 2: After X years, it's.
Speaker 9: Very expensive to live in New York City. That is
Speaker 9: a huge part of the challenge. That's why I'm focused
Speaker 9: on housing affordability. I've got a program called Homes for
Speaker 9: City Workers that'll invest pension funds alongside teachers and cops
Speaker 9: and double the home they could afford. So if they
Speaker 9: could afford a four hundred thousand dollars mortgage pension fund
Speaker 9: invest alongside, they can buy an eight hundred thousand dollars home,
Speaker 9: split the proceeds when they sell it. The pension funds
Speaker 9: will keep doing well and we could have the next
Speaker 9: generation of homeowners who are teachers, firefighters, cops, public hospital nurses.
Speaker 9: That's what we need in New York, Saint Louis Cardinals.
Speaker 9: But to this week, New York Knicks, I'm excited. You're
Speaker 9: doing great. Let's you know, prostitutle for that game. Controller
Speaker 9: comptroller buys his own seats in the noise greed section.
Speaker 2: Brad Lander, thank you so much, New York City Controller.
Speaker 1: This is the Bloomberg Survey Lengths podcast. Listen live each
Speaker 1: weekday starting at seven am Eastern on Applecarplay and Android
Speaker 1: Auto with the Bloomberg Business app. You can also watch
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Speaker 1: Bloomberg terminal.
Speaker 2: Now the newspapers, here's Lisa to two.
Speaker 10: Okay, so we all know how AI is being used
Speaker 10: for so many things, right, so here is another.
Speaker 9: Use for it.
Speaker 10: It's helping job seekers find new careers, not just a
Speaker 10: new job, but an entirely new career. So you have
Speaker 10: AI tools from companies like Salesforce, Google, LinkedIn. They're helping
Speaker 10: workers basically sell their skills, tailor their resumes to new areas,
Speaker 10: identify roles that are kind of under the radar that
Speaker 10: they wouldn't have.
Speaker 7: Thought about before.
Speaker 10: It's already in positions, and people in positions are already using
Speaker 10: it within the company. For example, Salesforce has this AI
Speaker 10: tool called Career Connect, so it analyzes their skills, right,
Speaker 10: it recommends roles internally that they might not have thought of.
Speaker 10: And then you have LinkedIn has one too, Google has
Speaker 10: career Dreamer.
Speaker 2: Is Salesforce just to pick on that wonderful shop? Do
Speaker 2: they also use AI for career exit? Are they using
Speaker 2: it to get rid of people?
Speaker 10: Oh, that's a good question. That's usually yeah, it's usually
Speaker 10: the word to get them in, but not.
Speaker 4: To get them out. That's interesting. I mean, it's amazing.
Speaker 2: What a I couldn't use stock movers exactly?
Speaker 4: Well, I don't know.
Speaker 5: Maybe I do give those emails from like your LinkedIn
Speaker 5: and stuff.
Speaker 4: Hey this job might be good for you, you know,
Speaker 4: But suggests yeah, but I'm like I don't think so. Yeah,
Speaker 4: but it.
Speaker 10: Kind of like opens up their eyes, like you know,
Speaker 10: you're like, wow, I never would have thought of that.
Speaker 2: I got a LinkedIn email. This job would be good
Speaker 2: for you. It was a lifeguard in Philadelphia.
Speaker 10: Next, okay, we'll stick with tech, will go to eyeball
Speaker 10: scanning technology. Okay, I don't know if either of you
Speaker 10: would be up for it, but it's from the company
Speaker 10: Tools for Humanity start up for COVID or no, why
Speaker 10: would that?
Speaker 2: Part of it is like Star Wars.
Speaker 10: Straight out of Star Wars. So it's starting this week
Speaker 10: people in like six cities San Francisco, La Atlanta or
Speaker 10: some of them, and you can scan your eyes using
Speaker 10: this spherical orb device at certain locations. So it's basically
Speaker 10: to verify your identity, prove someone is human because there's
Speaker 10: so many aid fakes out there. Okay, so that's why
Speaker 10: they're doing this. And what's really interesting is that they're
Speaker 10: using it also for dating apps because there's so many
Speaker 10: people putting out of fake profiles. So this is going
Speaker 10: to kind of make sure that people are not lying
Speaker 10: and setting up these profiles that you know, people want
Speaker 10: to date and they want to make sure they're getting
Speaker 10: a real person. So like match Group is piloting with
Speaker 10: this company Tools for Humanity and starting to use it
Speaker 10: for that too.
Speaker 4: Age verification on Tinder in Japan, they're using it for
Speaker 4: oh my god people. So honest, I know, I guess
Speaker 4: on these apps.
Speaker 5: I mean, you know, I'm twenty six, No you're not,
Speaker 5: you're sixty college.
Speaker 2: What's your major?
Speaker 4: Yeah, that's exactly.
Speaker 10: So it was okay, So we've heard a lot of
Speaker 10: stories about, you know, the big money that CEOs make,
Speaker 10: right media and CEO paying the s and P five
Speaker 10: hundred hit a high of sixteen point four million last year.
Speaker 10: But the Wall Street Journal is saying a lot of
Speaker 10: these heads of the companies they'd rather just pass on
Speaker 10: the position than deal with what's going on in the
Speaker 10: climate today. So a new study said that last year,
Speaker 10: three hundred and seventy three public company chiefs left and
Speaker 10: that was twenty four percent more than twenty twenty three.
Speaker 10: So you see the number. But you know, they thought,
Speaker 10: they're saying, they thought that, you know, the worst was
Speaker 10: over when the pandemic was gone, and okay, we're back
Speaker 10: to normal, But then came AI. Then came tariffs, then
Speaker 10: came the positivety recession, then came scrutiny of DEI efforts,
Speaker 10: and they're all thrown into this tizzy. So the problem
Speaker 10: is that they're saying is that the turnover affects not
Speaker 10: only them but everybody around them because new bosses come
Speaker 10: in and they bosses sorry Brooklyn Accent bosses coming reorganize them.
Speaker 10: Even if a business is healthy, people get laid off.
Speaker 10: So there's starting to see.
Speaker 9: That trickle down effect.
Speaker 10: And that's that's basically.
Speaker 5: I think a lot of these CEOs that made so
Speaker 5: much money on their style over the past five ten
Speaker 5: years that they're like, I'm done, you know, and particularly
Speaker 5: in a time the economic times, we have the uncertain
Speaker 5: to hear, what's a managed through.
Speaker 10: It'll deal with it.
Speaker 4: They don't want to deal with it.
Speaker 10: A lot of them are saying they're empty nesters. Some
Speaker 10: are saying, you know what, I'd rather be a consultant
Speaker 10: and just we've done with this.
Speaker 4: So it's got to get up every morning, go on.
Speaker 4: The landscape is changing.
Speaker 2: Lisa Mateo with our tech newspapers this morning. Thank you
Speaker 2: so much, greatly appreciate it.
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