WEBVTT - Fed’s Favored Price Gauge Rises at Mild Pace, Spending Holds Up 0:00:00.600 --> 0:00:10.719 Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business 0:00:10.720 --> 0:00:13.960 Wait inside from the reporters and editors who bring you 0:00:14.000 --> 0:00:18.319 America's most trusted business magazine, plus global business, finance and 0:00:18.400 --> 0:00:22.840 tech news. The Bloomberg Business Week podcast with Carol Messer 0:00:23.040 --> 0:00:25.800 and Tim Stenebeck from Bloomberg Radio. 0:00:27.120 --> 0:00:30.280 Well, the bets preferred measure of underlining US inflation core PCE, 0:00:30.920 --> 0:00:33.600 rose at a modest pace in a June. Consumer spending 0:00:33.680 --> 0:00:36.720 also remained healthy, encouraging signs for officials who are looking 0:00:36.720 --> 0:00:40.440 to cool inflation without breaking the economy. As far as 0:00:40.440 --> 0:00:43.239 the numbers look, core PCE, of course, it strips out 0:00:43.280 --> 0:00:46.600 volatile food and energy rose two tenths of one percent 0:00:46.600 --> 0:00:48.560 from May. From a year ago, it rose two point 0:00:48.600 --> 0:00:51.360 six percent. That's according to Bureau of Economic Analysis data 0:00:51.360 --> 0:00:54.480 that came out this morning. Wall Street certainly happy about 0:00:54.480 --> 0:00:57.200 the data. We see stocks hire, we see yields lower. 0:00:57.640 --> 0:01:00.680 For more, we turn to Bloomberg News International and Policy 0:01:00.680 --> 0:01:04.360 correspondent Michael McKee, who joins us here in the studio. Mike, 0:01:04.440 --> 0:01:06.360 is this exactly what Jay Powell wants to see? 0:01:07.440 --> 0:01:07.800 Yeah? 0:01:08.040 --> 0:01:10.360 Basically I was going to say not quite, but I 0:01:10.400 --> 0:01:11.400 think he'll settle for this. 0:01:11.520 --> 0:01:12.600 He wanted to see it even lower. 0:01:12.920 --> 0:01:15.360 Well, they wanted to get back to two percent. But 0:01:15.400 --> 0:01:17.560 they did say that they were going to start cutting 0:01:17.640 --> 0:01:21.360 interest rates before they got to two percent, and he 0:01:21.520 --> 0:01:24.120 had said a little while ago that the range of 0:01:24.520 --> 0:01:26.800 two and a half percent, as long as they got 0:01:26.800 --> 0:01:28.080 into that range, they'd be gone. 0:01:28.200 --> 0:01:31.319 So any change for next week based on this data. 0:01:31.000 --> 0:01:33.240 No, because they didn't set the markets up for that. 0:01:33.319 --> 0:01:35.520 They don't like to surprise the markets. Now. I suppose 0:01:35.560 --> 0:01:38.240 there could always be a leak to the Wall Street Journal. 0:01:39.040 --> 0:01:41.400 That's only happened once in the last fifteen years or so, 0:01:41.560 --> 0:01:44.960 but people do think of it as a realistic possibility occasionally. 0:01:45.160 --> 0:01:47.880 But in this case, I think they will be satisfied 0:01:47.920 --> 0:01:50.520 to wait, because what ends up happening is that bond 0:01:50.600 --> 0:01:53.960 yields go down if they signal that they're going to 0:01:54.680 --> 0:01:57.760 cut rates in September, and so they get the effect 0:01:57.800 --> 0:01:59.640 of a rate cut even without doing it. 0:02:00.200 --> 0:02:02.640 So square the data that we got today with the 0:02:02.680 --> 0:02:05.480 GDP data that we had earlier this week, are we 0:02:05.520 --> 0:02:09.320 in a goldilocks scenario now with inflation moving in the 0:02:09.400 --> 0:02:11.600 right direction and the economy still strong. 0:02:11.639 --> 0:02:14.960 Well, i'll see your cliche and raise you one and 0:02:15.000 --> 0:02:18.720 say soft landing. I think either one is probably a 0:02:18.720 --> 0:02:21.840 good description, but only as to where we are right now, 0:02:21.880 --> 0:02:24.480 because we don't know what's coming around the corner, and 0:02:24.520 --> 0:02:26.880 there are certainly analysts who think that we could be 0:02:26.960 --> 0:02:31.320 closer to an economic contraction than anything else. But right 0:02:31.360 --> 0:02:33.639 now it looks pretty good. The GDP numbers were strong 0:02:33.720 --> 0:02:38.320 and led mostly by consumption, business and consumer spending, which 0:02:38.360 --> 0:02:39.959 is what you want to see. You want to see 0:02:40.160 --> 0:02:45.600 the demand remain It wasn't too bad. Personal spending rows 0:02:45.800 --> 0:02:49.000 just three tenths in the month of June. May and 0:02:49.120 --> 0:02:53.880 April had been revised higher, which help the GDP numbers. 0:02:54.240 --> 0:02:58.160 So overall it's exactly kind of what the Fed wants 0:02:58.160 --> 0:03:01.120 to see. Sustainable growth two point eight percent is a 0:03:01.160 --> 0:03:05.079 little high, but they anticipate it coming down. But sustainable 0:03:05.080 --> 0:03:07.520 growth with continually falling inflation. 0:03:07.919 --> 0:03:11.160 Okay. So separately, US consumer sentiment eased in July to 0:03:11.320 --> 0:03:15.480 an eight month low, showed that consumers see prices remaining 0:03:15.560 --> 0:03:17.919 high and that cooling inflation rate has not yet helped 0:03:18.840 --> 0:03:23.280 improve their mood. Why do consumers remain so unhappy in 0:03:23.320 --> 0:03:24.000 this environment? 0:03:24.639 --> 0:03:28.600 Well, there are a couple of reasons. One is you've 0:03:28.600 --> 0:03:31.040 heard this before that it's the price level, not the 0:03:31.040 --> 0:03:35.760 price change that bothers people. And another is the overhang 0:03:36.040 --> 0:03:39.640 of bad news that we have had in so many 0:03:39.760 --> 0:03:42.400 areas in the last six months or so. The wars 0:03:42.480 --> 0:03:46.920 and the violence and that sort of thing, and the 0:03:47.600 --> 0:03:54.360 attempted assassination of Donald Trump occurred when they were surveying. Now, 0:03:54.440 --> 0:03:58.960 what probably did not get picked up was the change 0:03:59.120 --> 0:04:01.680 in the head at the head of the Democratic ticket 0:04:02.120 --> 0:04:04.720 when you look under the hood. And the University of 0:04:04.760 --> 0:04:06.400 Michigan has been surveying this for a long time, but 0:04:06.480 --> 0:04:09.560 they ask people, if you're a Democrat, Republican or an independent, 0:04:09.840 --> 0:04:13.240 are you more confident or less confident? And Democrats were 0:04:13.320 --> 0:04:18.520 less confident, Republicans only slightly more confident, and independence less confident. 0:04:18.839 --> 0:04:22.680 And given the reaction that we have seen anecdotally and 0:04:22.800 --> 0:04:26.080 in some polls already, you would expect Democrats to be 0:04:26.160 --> 0:04:28.320 feeling a little bit better right now. So maybe we 0:04:28.360 --> 0:04:29.200 get that next month. 0:04:29.360 --> 0:04:31.360 Yeah, maybe we'll have to wait and see. Mike, what 0:04:31.400 --> 0:04:36.680 about the idea that generationally inflation hasn't been around in 0:04:36.720 --> 0:04:40.400 many lifetimes of consumers, perhaps consumers who are completing these surveys. 0:04:40.600 --> 0:04:42.040 Does that have to do with this too? 0:04:42.360 --> 0:04:44.520 It probably does, because you get used to a certain 0:04:44.560 --> 0:04:47.040 price level and you get used to inflation being so 0:04:47.600 --> 0:04:52.159 Alan Greenspan's goal always was that people could make decisions 0:04:52.320 --> 0:04:54.920 without factoring inflation into it, and that was the case 0:04:54.960 --> 0:04:59.360 for so long, and now people had to cut back 0:04:59.400 --> 0:05:02.520 on spending because prices were going up so much, so rapidly. 0:05:02.839 --> 0:05:06.159 It's also true that it hits the lower income people 0:05:06.360 --> 0:05:09.800 much worse than upper income people, because they spend most 0:05:09.800 --> 0:05:13.839 of what they earn and inflation's been tough on them. 0:05:14.000 --> 0:05:17.559 But I think the generational aspect is also true, because, 0:05:17.600 --> 0:05:21.000 of course, there are those of us who remember the twelve, thirteen, 0:05:21.080 --> 0:05:24.479 fourteen percent mortgage rates that we once had in the 0:05:24.520 --> 0:05:25.479 olden days. 0:05:25.839 --> 0:05:28.880 Yeah, Will I do not remember that. Thank you Emily 0:05:28.920 --> 0:05:31.440 for bringing that up, But it is something we hear 0:05:31.480 --> 0:05:34.040 a lot when people do complain about seven percent mortgages. 0:05:34.279 --> 0:05:36.840 But there are a lot of differences between that environment 0:05:36.880 --> 0:05:40.480 in the early nineteen eighties and the environment today. Here's 0:05:40.480 --> 0:05:42.200 what the team at Bloomberg Economics said about some of 0:05:42.200 --> 0:05:45.040 the data that we got today, Mike, Those spending continued 0:05:45.080 --> 0:05:47.680 to grow at a healthy, albeit slower clip. Income growth 0:05:47.760 --> 0:05:50.440 slowed more rapidly, and with the labor market cooling, we 0:05:50.480 --> 0:05:53.800 think consumption growth will ease further in the second half 0:05:53.880 --> 0:05:57.560 of the year. Is there concern that it will slow 0:05:58.839 --> 0:06:01.719 to the extent that we could start to see negative payrolls, 0:06:01.720 --> 0:06:03.000 We could start to see a recession. 0:06:03.040 --> 0:06:05.800 That would be a kind of far left tail risk. 0:06:05.839 --> 0:06:09.360 It's not what most people are anticipating. Slowing is what 0:06:09.400 --> 0:06:12.320 we should be getting. With the FED interest rates where 0:06:12.320 --> 0:06:14.919 they are, and even if they cut in September twenty 0:06:14.920 --> 0:06:17.240 five basis points isn't going to spur a lot of 0:06:17.279 --> 0:06:21.200 people six seven five mortgages just a bad almost as 0:06:21.240 --> 0:06:24.600 a seven percent. But it's going to be the process 0:06:24.760 --> 0:06:28.640 that starts sending it down that will make people feel better. 0:06:29.000 --> 0:06:31.960 Okay, before we let you go, we talked a little 0:06:31.960 --> 0:06:35.279 bit about the FED meeting coming next week. The payrolls 0:06:35.279 --> 0:06:37.880 report coming on Friday, one hundred and seventy five thousand. 0:06:38.000 --> 0:06:41.039 Is what I saw last look for jobs gained during 0:06:41.160 --> 0:06:43.520 the current month that we're in. What do we need 0:06:43.560 --> 0:06:45.400 to be on the lookout for a week from today. 0:06:45.520 --> 0:06:48.640 Well, two things we'll be looking to see. The last 0:06:48.960 --> 0:06:51.720 two or three months we have had forecasts in the 0:06:51.800 --> 0:06:54.240 range of one seventy five one eight, and they've come 0:06:54.279 --> 0:06:57.279 in significantly above that. So we'll have to see if 0:06:57.320 --> 0:07:01.640 that trend continues, and if the trend of the previous 0:07:01.680 --> 0:07:04.880 months being revised down continues. But the biggest thing is 0:07:04.920 --> 0:07:07.480 going to be the unemployment rate. This time, we're at 0:07:07.480 --> 0:07:10.920 four point one percent. Now that's the forecast for another month. 0:07:11.040 --> 0:07:14.960 But if it goes to four point two, we're going 0:07:15.000 --> 0:07:17.200 to trigger the som rule and. 0:07:18.920 --> 0:07:20.000 Claudia's phone will be ringing. 0:07:20.040 --> 0:07:24.119 Claudia's phone will be ringing, and it will, as I said, 0:07:24.240 --> 0:07:28.040 scare the market, scare the horses, and we'll see what 0:07:28.120 --> 0:07:30.960 kind of reaction we get. There will be people in 0:07:31.000 --> 0:07:32.920 that case who are saying it got cut right away, 0:07:32.920 --> 0:07:35.240 got cut right away, because it already means we're going 0:07:35.320 --> 0:07:38.560 into recession. FED doesn't think so, because they think it's 0:07:38.640 --> 0:07:42.080 not that people are getting laid off, but just more 0:07:42.080 --> 0:07:45.360 people coming into the labor force that is pushing up unemployment, 0:07:45.440 --> 0:07:47.680 and that in the long run is a good thing. 0:07:47.760 --> 0:07:50.440 Yeah, labor force participation. You want to see that go 0:07:50.520 --> 0:07:52.400 in the right direction. I thanks to Bloomberg News International 0:07:52.440 --> 0:07:56.200 Economics and Policy correspondent Michael McKee staying late for us 0:07:56.280 --> 0:07:58.840 on this Friday because he was in really really early 0:07:58.880 --> 0:08:02.080 this morning, so we appreciate that. Well. The opening ceremony 0:08:02.440 --> 0:08:05.200 is continuing as normal in Paris for the Olympics after 0:08:05.240 --> 0:08:08.240 a quote massive attack on the country's super fast rail 0:08:08.320 --> 0:08:11.720 network disrupted trains and cast a shadow over the event. 0:08:12.280 --> 0:08:15.080 It's not just the trains that the organizers are concerned about, though, 0:08:15.160 --> 0:08:18.880 The Olympics cyber team is bracing for an onslaught from hackers, 0:08:19.280 --> 0:08:23.000 so writes Jamie Terabey, Bloomberg News cybersecurity reporter. She joins 0:08:23.080 --> 0:08:26.080 us from our Washington, DC bureau. Jamie, good to see 0:08:26.080 --> 0:08:27.960 you on this afternoon. I want to start with the 0:08:28.000 --> 0:08:30.720 trains because lots of us in the US here waking 0:08:30.800 --> 0:08:34.880 up to the news that French Transport Minister patrese Vergray said, 0:08:35.120 --> 0:08:39.720 we're quote coordinated malicious acts that targeted several TGV lines 0:08:39.960 --> 0:08:43.840 and will seriously disrupt traffic until this weekend. What's the latest. 0:08:43.960 --> 0:08:46.640 Do we know who's behind the attacks, do we know 0:08:46.679 --> 0:08:49.000 the motives behind the attacks? And do we know when 0:08:49.040 --> 0:08:50.400 these trains will be up and running again. 0:08:52.120 --> 0:08:55.280 Look, right now, there has been no claim of responsibility, 0:08:55.440 --> 0:08:58.800 but it could frankly, be any number of groups that 0:08:59.200 --> 0:09:03.120 are seeking to destabilize these games. They are in the 0:09:03.120 --> 0:09:07.120 heart of Paris. The entire world is watching, and whether 0:09:07.240 --> 0:09:13.360 it's home grown, you know, disenfranchised actors. We've seen France 0:09:13.400 --> 0:09:18.000 go through a very particularly tumultuous period recently, and of 0:09:18.040 --> 0:09:21.960 course we have external forces as well. The physical security 0:09:22.000 --> 0:09:25.280 aspect of the games has been something that has been 0:09:25.320 --> 0:09:29.520 a really big concern amongst the French authorities. They've brought 0:09:29.559 --> 0:09:32.560 on tens of thousands of shot soldiers and police force 0:09:32.640 --> 0:09:35.800 and even private security guards to be part of that effort. 0:09:36.080 --> 0:09:40.760 They've had anti drone exercises happening within the city. Because 0:09:40.840 --> 0:09:44.640 the games are happening in the heart of town along landmarks, 0:09:44.720 --> 0:09:48.000 there is an even greater exposure to possible weaknesses in 0:09:48.040 --> 0:09:52.240 the system. And this wasn't this wasn't a coordinated arson attack. 0:09:52.760 --> 0:09:55.360 And I understand that they're still in the process of 0:09:55.880 --> 0:09:59.480 getting everything back on track, but you know, it's a 0:09:59.600 --> 0:10:03.080 it's a big glaring target for a lot of different 0:10:03.080 --> 0:10:06.560 people with a lot of different motives to destabilize and 0:10:06.640 --> 0:10:09.480 ruin this for France and for the international sporting community. 0:10:10.040 --> 0:10:12.920 Jimmy talk a little bit more about the extent of 0:10:13.480 --> 0:10:17.240 the damage that a cyber attack like this one has caused. 0:10:17.240 --> 0:10:20.360 We know that rail traffic was disrupted and that there 0:10:20.400 --> 0:10:25.199 were fires. Explain a little bit more what actually happens 0:10:25.200 --> 0:10:28.079 when there is a cyber attack at this scale. 0:10:28.320 --> 0:10:31.400 So we know that this was this was an arson attack, 0:10:31.480 --> 0:10:34.959 So this sounds like it was a deliberately set fire 0:10:35.040 --> 0:10:38.600 at each of these signal stations. A cyber attack would 0:10:38.640 --> 0:10:42.160 come in from the systems itself and cause a breakdown 0:10:42.320 --> 0:10:46.079 or a shutdown of an electric grid, of a network 0:10:46.320 --> 0:10:49.600 of computers. It could reboot, it could cause all kinds 0:10:49.600 --> 0:10:54.360 of chaos. We could see hackers try to get malware 0:10:54.400 --> 0:10:57.520 into a system to lock it up and paralyze it. 0:10:57.920 --> 0:11:02.120 We've seen that happen in past Olympic Games. In the 0:11:02.160 --> 0:11:05.680 Pyeongchang Winter Olympics, on opening day, on the opening ceremony, 0:11:05.720 --> 0:11:09.840 in fact, there was a very disruptive cyber attack which 0:11:09.920 --> 0:11:14.800 was later attributed to Russian actors. There are so many 0:11:14.880 --> 0:11:19.160 different points along the critical infrastructure that make up the Games. 0:11:19.640 --> 0:11:24.640 The French cybersecurity agency ante has TARGET has named five 0:11:24.800 --> 0:11:28.760 hundred different entities that they say are critical to the 0:11:28.800 --> 0:11:32.480 smooth operation of the games. They've been working with these 0:11:32.520 --> 0:11:35.640 groups for months, if not years, to show them up, 0:11:35.679 --> 0:11:39.040 to audit their systems and look at how they can 0:11:39.080 --> 0:11:42.120 be as strong and as muscular as possible when it 0:11:42.160 --> 0:11:46.920 comes to anticipating and expecting these attacks and being able 0:11:46.960 --> 0:11:49.400 to respond if and when they do see them. 0:11:49.559 --> 0:11:52.200 Jimmy, talk a little bit about the Russia element here, 0:11:52.320 --> 0:11:56.200 because as they have in Olympics past for other reasons, 0:11:56.720 --> 0:12:00.320 they are not necessarily present as they have been in 0:12:00.360 --> 0:12:02.319 the past at the Olympics this year, shut out in 0:12:02.360 --> 0:12:06.120 a sense, give us an understanding of where Russia is 0:12:06.200 --> 0:12:10.439 when it comes to potential cyber attacks and what the 0:12:10.520 --> 0:12:12.319 French and its allies are prepared for. 0:12:13.400 --> 0:12:15.679 This is It's been explained to me in a lot 0:12:15.720 --> 0:12:18.480 of different ways. Is that almost the perfect storm for 0:12:18.600 --> 0:12:23.680 Vladimir Prutin he has He and the Kremlin affiliated hackers 0:12:23.760 --> 0:12:27.000 have been attacking France for a very long time through 0:12:27.040 --> 0:12:31.640 the cyber landscape. They have had people, you know, particularly 0:12:31.720 --> 0:12:35.880 with President Marquin and his attitude towards Ukraine and his 0:12:35.960 --> 0:12:39.800 support for Ukraine and he's part in beefing up NATO, 0:12:40.240 --> 0:12:44.679 has been a particular target for Russia. With the Olympics 0:12:44.720 --> 0:12:48.719 happening it is a moment of international prestige. The opportunity 0:12:49.280 --> 0:12:53.320 for the Russians to disrupt this moment for the French 0:12:53.360 --> 0:12:57.240 and for the French leader in particular, is essentially just 0:12:57.320 --> 0:13:01.160 an irresistible moment for him. In the As you've said, 0:13:01.320 --> 0:13:07.120 we've had Russian hackers erase data sets or really disrupt 0:13:08.240 --> 0:13:12.520 past uh, you know, organize the roles of organizations like 0:13:12.559 --> 0:13:17.200 the Anti Doping Agency because right there the athlete, Russian 0:13:17.200 --> 0:13:22.320 athletes doping results were uh, somehow erased from the national 0:13:22.360 --> 0:13:25.920 data set or from particular data sets. We've seen disruptions 0:13:25.960 --> 0:13:29.880 from the the Olympic destroyer event during the peong Chang 0:13:29.920 --> 0:13:33.199 Winter Games. Right now, we're seeing a lot of disinformation 0:13:33.559 --> 0:13:36.480 campaigns that have been happening in the lead up to 0:13:36.640 --> 0:13:40.120 and are currently happening at at at present that began 0:13:40.240 --> 0:13:43.840 on Russian language social media platforms that are spilling over 0:13:43.920 --> 0:13:48.440 into the media, into mainstream social media platforms, really disseminating 0:13:48.520 --> 0:13:54.120 messaging like there's too much terrorism risks in Paris. Uh, 0:13:54.320 --> 0:13:58.199 there's the Frances on the verge of civil war. Paris 0:13:58.280 --> 0:14:03.079 is not clean, Paris Is is not particularly friendly. It's 0:14:03.120 --> 0:14:06.760 a terrible place to go as a tourist and all 0:14:06.800 --> 0:14:12.000 sorts of disinformation opportunities that are being attributed to Kremlin 0:14:12.040 --> 0:14:16.439 associated hackers. We're also seeing brute force attacks on websites. 0:14:16.480 --> 0:14:19.040 So what that is is when there's so much traffic 0:14:19.080 --> 0:14:22.960 directed at websites that it cripples their traffic and their 0:14:22.960 --> 0:14:26.880 ability to operate. We've seen that recently on targets including 0:14:26.920 --> 0:14:29.920 the French Film Festival and also the Grand Palais, which 0:14:30.000 --> 0:14:32.320 is going to be one of the Olympic venues for 0:14:32.440 --> 0:14:37.720 taekwondo and I believe fencing. So they're not going to stop. 0:14:37.760 --> 0:14:40.360 They're going to do everything they can from here going 0:14:40.400 --> 0:14:44.520 forward to amplify, to disrupt, to create as much chaos 0:14:44.520 --> 0:14:47.600 as they can, because the ultimate aim here is to 0:14:47.640 --> 0:14:51.720 not give the French their moment in the international spotlight 0:14:51.800 --> 0:14:53.560 without some kind of disruption. 0:14:54.400 --> 0:14:57.120 Jamie, we only have about a minute left. But what 0:14:57.160 --> 0:15:01.680 do we know about the US's involvement keeping the Olympics 0:15:02.400 --> 0:15:05.960 safe and the participants safe as well. 0:15:05.720 --> 0:15:12.360 We understand that representatives and employees from SISA, the US 0:15:12.440 --> 0:15:16.960 government's cybersecurity agency, are on the ground in Paris, operating 0:15:17.040 --> 0:15:19.920 out of a joint operation center. We understand that there 0:15:19.920 --> 0:15:23.960 are also other American observers who are going to be 0:15:24.040 --> 0:15:26.640 there throughout the entire event. You've also got to remember 0:15:26.800 --> 0:15:29.720 that the next Summer Games will be in Los Angeles 0:15:29.720 --> 0:15:32.680 in twenty twenty eight. So there is a real opportunity 0:15:32.720 --> 0:15:36.400 here for lessons learned from for the Americans to be 0:15:36.440 --> 0:15:39.680 watching what's going on in Paris, how they anticipate and 0:15:39.720 --> 0:15:43.400 deal and encounter all of these challenges, and how they 0:15:43.400 --> 0:15:46.840 can apply them in four years time. So there's definitely 0:15:46.880 --> 0:15:49.360 an international effort. The French are lot alone in this. 0:15:49.960 --> 0:15:53.760 Everyone is supporting them on the Allied Western side, and 0:15:53.800 --> 0:15:56.240 they're certainly seeing that in the private sector as well 0:15:56.280 --> 0:15:57.360 as in the public sector. 0:15:57.760 --> 0:16:01.160 Jamie Terabe, Bloomberg News, a cybersecurity reporter, joining us from 0:16:01.160 --> 0:16:02.840 our Washington, DC bureau. 0:16:04.520 --> 0:16:08.040 You're listening to the Bloomberg Business Week podcast. Catch us 0:16:08.080 --> 0:16:11.320 live weekday afternoons from two to five pm Eastern Listen 0:16:11.360 --> 0:16:13.520 on Apple car Play and then Bright Auto with a 0:16:13.560 --> 0:16:17.680 Bloomberg Business act or watch us live on YouTube. 0:16:18.520 --> 0:16:20.520 You guys are all familiar with Joe Logan. He's widely 0:16:20.560 --> 0:16:23.040 believed to be the most popular podcaster on Earth. He's 0:16:23.040 --> 0:16:25.840 got a huge Spotify contract. We're talking hundreds of millions 0:16:25.840 --> 0:16:29.120 of dollars on message boards. People sometimes describe him as 0:16:29.240 --> 0:16:30.840 Oprah Winfrey for men. 0:16:31.400 --> 0:16:31.520 Well. 0:16:31.560 --> 0:16:34.560 About four years ago, during the pandemic, he decamped from 0:16:34.600 --> 0:16:38.040 Los Angeles and relocated he and his wife and three 0:16:38.120 --> 0:16:41.880 daughters to Austin, Texas, and since then he's cultivated a 0:16:41.920 --> 0:16:45.160 lifestyle tailor made for the new age of the comedy profession. 0:16:45.680 --> 0:16:49.400 It's ruled by podcasts instead of Hollywood movies and sitcoms. 0:16:49.640 --> 0:16:51.640 He's got a new podcast studio, He's got a sauna, 0:16:51.760 --> 0:16:54.560 bow hunting range, and most important, a new club, the 0:16:54.600 --> 0:16:57.560 Comedy Mothership for doing stand up, all of it engineered 0:16:57.800 --> 0:17:00.800 to share with his friends. The past two years, a 0:17:00.800 --> 0:17:03.440 growing group of comedians and podcasters have followed Joe Rogan 0:17:03.800 --> 0:17:06.960 to set up shop in Austin. Felix Jelied and Ashley 0:17:06.960 --> 0:17:09.760 Carmen write about Joe Rogan for Bloomberg BusinessWeek. Check out 0:17:09.760 --> 0:17:12.120 their story. It's on the Bloomberg terminal and at Bloomberg 0:17:12.119 --> 0:17:16.560 dot Com slash BusinessWeek. Felix is Bloomberg BusinessWeek Media Entertainment 0:17:16.560 --> 0:17:18.960 and Telecom editor. He's also the author of the book 0:17:19.000 --> 0:17:22.919 It's Not TV. The Spectacular Rise, Revolution and Future of HBO. 0:17:23.359 --> 0:17:26.520 He joins us here in the studio, Felix, how much 0:17:26.760 --> 0:17:29.359 Joe Rogan did you listen to when writing this story? 0:17:30.119 --> 0:17:31.399 A lot, a lot of. 0:17:31.440 --> 0:17:34.080 Joe Rogan, months of jo really months. 0:17:34.119 --> 0:17:35.439 Yeah, because he wouldn't talk to us. 0:17:35.480 --> 0:17:37.920 He doesn't really do interviews, and he loves to talk 0:17:37.960 --> 0:17:40.200 about the comedy stuff, the comedy club. 0:17:40.119 --> 0:17:40.800 On his show. 0:17:41.160 --> 0:17:44.240 So it's mixed in with you know, moon landing conspiracies 0:17:44.280 --> 0:17:47.159 and a lot of mma, you know, minutia that I 0:17:47.160 --> 0:17:49.159 don't really need to know, but it was interesting. You 0:17:49.200 --> 0:17:50.920 get his whole perspective on the comedy world. 0:17:50.960 --> 0:17:54.199 So just not just recent podcast episodes, but episodes going 0:17:54.240 --> 0:17:54.840 back a few years. 0:17:54.880 --> 0:17:56.920 Yeah, for years he's been talking about this. I mean 0:17:56.960 --> 0:18:00.760 he moved from la to Austin about four years ago 0:18:01.280 --> 0:18:04.240 and yeah he got down there and he just like 0:18:04.240 --> 0:18:06.280 everyone who moves to Austin, they just can't shut up 0:18:06.280 --> 0:18:06.600 about it. 0:18:06.680 --> 0:18:08.120 Yeah. It's the greatest down ever. 0:18:08.200 --> 0:18:10.280 You know, we got the best barbecue, you know, like 0:18:10.359 --> 0:18:11.200 it's incredible. 0:18:11.520 --> 0:18:12.280 The customer. 0:18:12.480 --> 0:18:14.320 Yeah, it is hot in the summer. But the one 0:18:14.359 --> 0:18:16.840 thing he didn't have is he missed having a place 0:18:16.880 --> 0:18:19.840 to perform because he was a regular at the Comedy 0:18:19.880 --> 0:18:23.440 Store in La Austin had a stand up comedy scene 0:18:23.440 --> 0:18:26.000 over the years, but it was always pretty minor, especially 0:18:26.080 --> 0:18:28.800 compared to the you know, live music scene there. And 0:18:28.880 --> 0:18:30.359 so he was like, you know what, like, I'm just 0:18:30.440 --> 0:18:33.440 gonna build a comedy club for myself and my friends, 0:18:33.600 --> 0:18:36.560 and I'm gonna spare no expense. He said on his 0:18:36.640 --> 0:18:38.439 show that you know, it's not to make money. He 0:18:38.520 --> 0:18:40.159 just doesn't want to lose money on it. But he 0:18:40.200 --> 0:18:43.200 basically just puts all the money back into the comedians 0:18:43.440 --> 0:18:43.879 and it's. 0:18:43.760 --> 0:18:44.639 A really nice club. 0:18:45.720 --> 0:18:49.600 And because Joe Rogan is Joe Rogan and he has, 0:18:50.000 --> 0:18:53.879 you know, this huge platform that anybody who goes on 0:18:53.960 --> 0:18:55.919 Joe Rogan's show is going to get a bus, you know, 0:18:56.080 --> 0:18:59.680 bump for their their comedy show, their podcast, their book, 0:18:59.720 --> 0:19:00.400 whatever it is. 0:19:00.800 --> 0:19:04.440 So his ability to recruit people is amazing. 0:19:04.520 --> 0:19:06.040 And every time he has someone on the show, he 0:19:06.119 --> 0:19:08.280 gives them the sales pitch come to us that you know, 0:19:08.400 --> 0:19:10.600 come hang out with me, you can perform at the club, 0:19:10.720 --> 0:19:12.680 you can come on my show, you can have your show. 0:19:12.720 --> 0:19:15.560 You don't have to be you know, tethered to the 0:19:15.600 --> 0:19:16.960 studios of LA. 0:19:16.840 --> 0:19:17.800 And New York anymore. 0:19:18.280 --> 0:19:21.639 Just move here and you know, some people resist, but 0:19:21.680 --> 0:19:24.760 a lot of people have heard that pitch been like yeah, okay, 0:19:25.119 --> 0:19:30.159 And you know, Shane Gillis, Brian Simpson, Tony Hinchcliff, some 0:19:30.200 --> 0:19:33.359 pretty big name comics have moved down there, and you know, 0:19:33.400 --> 0:19:36.800 they all are headliners at the club and hang out 0:19:36.800 --> 0:19:39.600 with Rogan outside the club. There's like this whole scene 0:19:39.680 --> 0:19:43.119 around the bar at the Comedy Mothership. It's kind of 0:19:43.119 --> 0:19:45.239 fascinating when you're there because you have this feeling that 0:19:45.280 --> 0:19:50.280 anyone that's kind of in that world, Elon Musk, Johnny Manzell, 0:19:50.960 --> 0:19:54.360 anyone that's been on Rogan's podcast recently could pop in 0:19:54.400 --> 0:19:57.760 at any time. That's kind of like their clubhouse. And 0:19:58.200 --> 0:20:00.720 it's been this very and then that's the top end. 0:20:01.160 --> 0:20:04.879 And then there's been this whole trickle down effect in 0:20:05.040 --> 0:20:09.320 Austin where since Rogan opened the Comedy Mothership, there's now 0:20:10.320 --> 0:20:13.520 maybe a dozen other comedy clubs that have also opened 0:20:13.600 --> 0:20:16.679 up in the Vicinity in downtown Austin. And now if 0:20:16.680 --> 0:20:20.640 you talk to like young aspiring stand up comedians, which 0:20:20.640 --> 0:20:23.560 we did for the article, you know, instead of moving 0:20:23.640 --> 0:20:25.760 to New York or LA to try and make it, 0:20:25.800 --> 0:20:27.240 a lot of them are now like you know what, 0:20:27.320 --> 0:20:30.160 I'm going to Austin. So there's all these group houses 0:20:30.200 --> 0:20:33.240 popping up in Austin, where you have you know, ten 0:20:33.440 --> 0:20:36.200 you know, up and coming stand up comedians all packed 0:20:36.240 --> 0:20:39.439 into a house doing the open mic nights around town 0:20:39.920 --> 0:20:43.840 and desperately trying to get a spot in the comedy Mothership. 0:20:44.040 --> 0:20:48.840 So Joe Rogan embraced Austin. But in your reporting and 0:20:48.880 --> 0:20:52.800 Ashley's reporting, did Austin embrace Joe Rogan? 0:20:53.480 --> 0:20:56.360 Yeah, I mean I think they have to a certain degree. 0:20:56.480 --> 0:20:59.200 I mean, Austin has been such a boomtown. You know, 0:20:59.280 --> 0:21:02.920 it's been like the growing city, you know, every year 0:21:02.960 --> 0:21:04.800 for like twelve years. I think they lost the title 0:21:04.840 --> 0:21:06.960 this year. But there's been a ton of people moving there, 0:21:07.160 --> 0:21:10.080 including a lot of people from California. And you know, 0:21:10.119 --> 0:21:14.520 there's this expression in Austin politics now, which is, you know, 0:21:14.600 --> 0:21:18.600 don't California my Texas, which initially people thought, oh, all 0:21:18.640 --> 0:21:21.800 these you know, California immigrants are going to make our 0:21:21.960 --> 0:21:25.880 you know, the state bluer. And actually, in the end 0:21:25.880 --> 0:21:29.280 what's happened is it hasn't been like the liberals who 0:21:29.280 --> 0:21:32.720 have moved out of California. It's the more libertarians tech 0:21:32.760 --> 0:21:36.560 folks that want low taxes that move to Austin, Elon Musk, 0:21:36.680 --> 0:21:37.919 all these tech companies. 0:21:38.240 --> 0:21:39.840 So actually Austin has gotten a. 0:21:39.760 --> 0:21:42.840 Little bit less liberal over time. And you know, I 0:21:42.920 --> 0:21:45.000 was talking to Evan Smith, who's the co founder of 0:21:45.080 --> 0:21:46.000 the Texas Tribune. 0:21:46.080 --> 0:21:48.120