1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:21,240 Speaker 1: on Apple car Play or Android Auto with the Bloomberg 4 00:00:21,320 --> 00:00:24,880 Speaker 1: Business app. Listen on demand wherever you get your podcasts, 5 00:00:25,280 --> 00:00:27,040 Speaker 1: or watch us live on YouTube. 6 00:00:27,320 --> 00:00:30,280 Speaker 2: It is FED Day, folks. It is the first FED 7 00:00:30,320 --> 00:00:34,080 Speaker 2: meeting for mister Walsh. Kevinash's the new chair of the FED, 8 00:00:34,080 --> 00:00:35,360 Speaker 2: and we want to break down kind of what were 9 00:00:35,360 --> 00:00:37,800 Speaker 2: you gonna expect later on today we have bloombergs Michael 10 00:00:37,840 --> 00:00:40,080 Speaker 2: mckeheestan in DC. He'll bring all the recording to us 11 00:00:40,120 --> 00:00:43,280 Speaker 2: this afternoon. Robert Kaplan right now joined c's vice chairman 12 00:00:43,880 --> 00:00:47,760 Speaker 2: at Goldman Sachs. He's a former president of the Dallas Fed. Robert, 13 00:00:47,760 --> 00:00:50,559 Speaker 2: thank you so much for joining us here. What do 14 00:00:50,560 --> 00:00:53,520 Speaker 2: you expect to hear from mister Walsh today? 15 00:00:56,880 --> 00:00:58,800 Speaker 3: I think today it will be a little bit of 16 00:00:58,840 --> 00:01:02,960 Speaker 3: a philosophical day and that he's going to. 17 00:01:05,319 --> 00:01:06,039 Speaker 4: He's going to have to. 18 00:01:05,959 --> 00:01:08,240 Speaker 3: Talk about what happened in the meeting. I would think 19 00:01:08,280 --> 00:01:11,720 Speaker 3: he's gonna he's going to give his take on what 20 00:01:11,840 --> 00:01:15,160 Speaker 3: the current situation is in the economy with employment, inflation, 21 00:01:15,760 --> 00:01:17,720 Speaker 3: and I would think he's going to make a few 22 00:01:17,760 --> 00:01:27,520 Speaker 3: points about his approach, his philosophical approach, in that, for example, 23 00:01:28,240 --> 00:01:31,119 Speaker 3: he's going to want to see robust debate and disagreement 24 00:01:31,160 --> 00:01:33,400 Speaker 3: inside the room. He's going to want to see less 25 00:01:33,440 --> 00:01:38,119 Speaker 3: predicting by the FED, less prognostication. He's going to want 26 00:01:38,120 --> 00:01:43,200 Speaker 3: to see, though patience and that over the horizons some 27 00:01:43,280 --> 00:01:49,040 Speaker 3: of the structural drivers AI adoption, Chinese over capacity. You know, 28 00:01:49,080 --> 00:01:52,040 Speaker 3: he wants to be patient to see the disinflationary impacts, 29 00:01:52,320 --> 00:01:55,000 Speaker 3: and he's going to have to though acknowledge that we're 30 00:01:55,000 --> 00:02:01,320 Speaker 3: in an inflationary, sticky inflationary period right now. The war 31 00:02:02,080 --> 00:02:04,560 Speaker 3: and straight opening will help, but he's going to have 32 00:02:04,600 --> 00:02:07,000 Speaker 3: to also I would hope he'll say, listen, if that 33 00:02:07,080 --> 00:02:09,880 Speaker 3: inflation we think is going to be persistent, you know 34 00:02:09,960 --> 00:02:11,639 Speaker 3: that he's going to have to make clear he's prepared 35 00:02:11,680 --> 00:02:12,000 Speaker 3: to acts. 36 00:02:12,040 --> 00:02:14,160 Speaker 4: He's going to He's going to have to give people a. 37 00:02:14,120 --> 00:02:17,480 Speaker 3: Little bit of a feel for him, establish his credibility, 38 00:02:17,520 --> 00:02:19,400 Speaker 3: and I think this is a good opportunity to do that. 39 00:02:20,120 --> 00:02:24,520 Speaker 2: Robert, how is his his I guess reputation within the 40 00:02:24,560 --> 00:02:27,120 Speaker 2: members of the FED today as he walks. 41 00:02:26,840 --> 00:02:30,000 Speaker 5: In for his first meeting here. How is he perceived 42 00:02:30,040 --> 00:02:31,639 Speaker 5: within this FED reserve? 43 00:02:33,120 --> 00:02:37,720 Speaker 3: Well, if you were just reading the newspapers and watching TV, 44 00:02:37,960 --> 00:02:40,840 Speaker 3: you would you might get a sense. You know, he's 45 00:02:41,080 --> 00:02:43,600 Speaker 3: been an outside critic of the FED. He's been critical 46 00:02:43,639 --> 00:02:47,040 Speaker 3: of some of the mistakes they've made. I think now 47 00:02:47,080 --> 00:02:52,040 Speaker 3: that he's inside, people may find this hard to believe it. 48 00:02:52,080 --> 00:02:54,919 Speaker 3: My own view is a lot of that gets washed away. 49 00:02:55,320 --> 00:03:00,400 Speaker 3: He's now one of us, he's our leader. I want 50 00:03:00,480 --> 00:03:02,720 Speaker 3: him to do well. We want him to do well. 51 00:03:03,000 --> 00:03:07,200 Speaker 3: I want to work well with him. And so I think, uh, 52 00:03:07,240 --> 00:03:11,359 Speaker 3: I think the judgments on him from here by people 53 00:03:11,400 --> 00:03:14,040 Speaker 3: at the FED will be based on what he does now. 54 00:03:14,560 --> 00:03:16,960 Speaker 3: How does he communicate with us, how does he run 55 00:03:17,000 --> 00:03:21,600 Speaker 3: the meeting? How how easy is he to work with? 56 00:03:21,760 --> 00:03:25,680 Speaker 3: How constructive is he? And and so they'll they'll they'll 57 00:03:25,720 --> 00:03:27,720 Speaker 3: be open minded, and they're going to want to I 58 00:03:27,720 --> 00:03:31,040 Speaker 3: would think if in my former seat, I'd want to 59 00:03:31,120 --> 00:03:33,760 Speaker 3: do whatever I could to help him get off to 60 00:03:33,800 --> 00:03:34,600 Speaker 3: a good start. 61 00:03:34,840 --> 00:03:36,760 Speaker 4: And I think that'll be the dynamic. 62 00:03:37,760 --> 00:03:42,160 Speaker 2: So d O T s one of the favorite functions 63 00:03:42,200 --> 00:03:44,680 Speaker 2: on the Bloomberg terminal, the dots getting a sense of 64 00:03:44,720 --> 00:03:48,120 Speaker 2: kind of where the FED is? Is that something that 65 00:03:48,160 --> 00:03:51,200 Speaker 2: you think he may wants mister Walsh may want to 66 00:03:51,240 --> 00:03:54,320 Speaker 2: do away with as he thinks about how the FED 67 00:03:54,400 --> 00:03:57,320 Speaker 2: you should be communicating to Global Wall Street. 68 00:03:58,160 --> 00:04:02,000 Speaker 3: Probably yes, The question is how does he get from 69 00:04:02,080 --> 00:04:04,760 Speaker 3: here to there? Given the dot plot's been around now 70 00:04:04,840 --> 00:04:07,520 Speaker 3: for a number of years. But yeah, I think he 71 00:04:07,600 --> 00:04:10,800 Speaker 3: wants them to go less. And I agree with this 72 00:04:10,840 --> 00:04:15,720 Speaker 3: to some extent. Less on the prognostications. Don't get yourself 73 00:04:15,880 --> 00:04:22,120 Speaker 3: boxed in by some predictions you've made. Leave yourself the 74 00:04:22,160 --> 00:04:25,760 Speaker 3: opportunity to change your mind. I always said the dot 75 00:04:25,839 --> 00:04:30,039 Speaker 3: plot had the shelf life of an unrefrigerated cart and 76 00:04:30,040 --> 00:04:33,120 Speaker 3: of milk. Meaning I go in there to the meeting, 77 00:04:33,560 --> 00:04:36,200 Speaker 3: I give my views on the outlook, I give my 78 00:04:36,320 --> 00:04:38,799 Speaker 3: views on the long run, neutral raid on the dots, 79 00:04:39,400 --> 00:04:42,880 Speaker 3: and if something happens two weeks later, I may change 80 00:04:42,880 --> 00:04:46,159 Speaker 3: my mind. And I think he knows that, and I 81 00:04:46,200 --> 00:04:48,320 Speaker 3: don't think I think there'll be a lot of people 82 00:04:48,400 --> 00:04:53,960 Speaker 3: around the FOMC table who will actually be won't be 83 00:04:54,160 --> 00:04:59,360 Speaker 3: sorry that he wants to curtail that because it's put 84 00:04:59,400 --> 00:05:03,000 Speaker 3: him in some aca ward situations at times around the committee. 85 00:05:03,120 --> 00:05:06,360 Speaker 3: But how he orchestrates it and how he works with 86 00:05:06,400 --> 00:05:09,160 Speaker 3: the members to make sure that he gets buy in 87 00:05:09,240 --> 00:05:11,760 Speaker 3: for that. I don't know how he plans to do that, 88 00:05:12,400 --> 00:05:14,839 Speaker 3: but I would think you'll see the trend will be 89 00:05:15,000 --> 00:05:18,680 Speaker 3: toward re reviewing that and predicting. 90 00:05:18,240 --> 00:05:23,360 Speaker 2: Less rob The inflation story is a challenge here for 91 00:05:23,600 --> 00:05:27,520 Speaker 2: consumers in the marketplace. It's also a challenge for this 92 00:05:27,560 --> 00:05:30,560 Speaker 2: federal reserves as they think about their dual mandate. How 93 00:05:30,560 --> 00:05:33,000 Speaker 2: do you think they're looking at inflation here is we 94 00:05:33,080 --> 00:05:35,480 Speaker 2: do have oil, you know, coming down off of those 95 00:05:35,720 --> 00:05:37,960 Speaker 2: highs from earlier in New Year, but still probably higher 96 00:05:37,960 --> 00:05:38,960 Speaker 2: than people would. 97 00:05:38,720 --> 00:05:39,840 Speaker 6: Like to see. 98 00:05:40,080 --> 00:05:40,479 Speaker 7: Yeah. 99 00:05:40,600 --> 00:05:43,960 Speaker 3: So so to me, the way I look at this, 100 00:05:44,680 --> 00:05:49,760 Speaker 3: there's the monthly data, but the more important bigger picture 101 00:05:49,839 --> 00:05:57,440 Speaker 3: dynamic is we are in a cap x AI driven 102 00:05:57,920 --> 00:06:03,600 Speaker 3: powered data center of an CAPEX boom in the United 103 00:06:03,640 --> 00:06:06,720 Speaker 3: States and to some extent globally, but particularly in the 104 00:06:06,800 --> 00:06:10,720 Speaker 3: United States at the same time due to tear US 105 00:06:12,440 --> 00:06:17,839 Speaker 3: curtailment of immigration, so we have we have labor constraints, 106 00:06:18,360 --> 00:06:20,480 Speaker 3: and then the third has been oil, which hopefully is 107 00:06:20,520 --> 00:06:24,720 Speaker 3: getting resolved. You've got resource constraints while we've got a 108 00:06:24,760 --> 00:06:30,560 Speaker 3: capex boom that calls on those resources. And so to me, 109 00:06:31,240 --> 00:06:35,119 Speaker 3: it's not a shocker that the capex part of AI, 110 00:06:35,320 --> 00:06:40,159 Speaker 3: the infrastructure build, is going to make inflation stickier. The 111 00:06:40,279 --> 00:06:45,040 Speaker 3: adoption part over the horizon should be disinflationary. But we're 112 00:06:45,120 --> 00:06:47,400 Speaker 3: right now in the teeth of the cap x part, 113 00:06:48,000 --> 00:06:51,520 Speaker 3: and so the strait of Hormuz being open, oil price 114 00:06:51,600 --> 00:06:52,200 Speaker 3: is going down. 115 00:06:52,520 --> 00:06:54,119 Speaker 4: That'll definitely help. 116 00:06:54,839 --> 00:06:59,440 Speaker 3: And I think what it does is for those who 117 00:06:59,440 --> 00:07:02,480 Speaker 3: are more in to say we should be raising rates. 118 00:07:02,839 --> 00:07:06,159 Speaker 3: I would think this this bolster is the argument. Let's 119 00:07:06,240 --> 00:07:09,600 Speaker 3: kick the can a little longer for several months and 120 00:07:09,680 --> 00:07:13,960 Speaker 3: see how this oil price decline the bleed stops from that, 121 00:07:14,120 --> 00:07:16,480 Speaker 3: and let's see if we start to see a cooling 122 00:07:16,960 --> 00:07:20,880 Speaker 3: in the inflation reads. And so I would guess Kevin 123 00:07:20,920 --> 00:07:24,040 Speaker 3: worsh will be argued, be arguing for patients, and I 124 00:07:24,080 --> 00:07:28,080 Speaker 3: think the straight being open helps with that. But the 125 00:07:28,080 --> 00:07:31,040 Speaker 3: oil price is not the only issue. You've got this 126 00:07:31,200 --> 00:07:35,240 Speaker 3: structural issue which they have to be aware of and 127 00:07:35,280 --> 00:07:36,440 Speaker 3: monitor and contend with. 128 00:07:37,000 --> 00:07:39,960 Speaker 2: We're speaking with Robert Kaplan. He's the vice chair chairman 129 00:07:40,000 --> 00:07:42,600 Speaker 2: and Goldman Sachs. He's former president of the Dallas Fed 130 00:07:42,800 --> 00:07:46,560 Speaker 2: as well. Robert, you're mentioning AI and you and your 131 00:07:46,560 --> 00:07:49,880 Speaker 2: colleagues at Goldman Sachs are kind of read at the 132 00:07:49,960 --> 00:07:54,040 Speaker 2: nexus of the capital formation, kind of fueling the growth 133 00:07:54,040 --> 00:07:56,480 Speaker 2: of this AI. I think, how do you guys, as 134 00:07:56,880 --> 00:07:59,440 Speaker 2: I guess we're in year three or four, really having 135 00:07:59,440 --> 00:08:02,320 Speaker 2: an understand of what AI can be. How are you 136 00:08:02,360 --> 00:08:04,680 Speaker 2: guys thinking about this now as you work with your 137 00:08:04,720 --> 00:08:06,400 Speaker 2: clients at Golden Sex. 138 00:08:07,160 --> 00:08:10,320 Speaker 3: So there's a couple of different tracks, and yes, we're 139 00:08:10,720 --> 00:08:13,680 Speaker 3: we're in the middle of both of these. First, there's 140 00:08:13,720 --> 00:08:18,640 Speaker 3: the infrastructure build in that we need more compute for 141 00:08:18,760 --> 00:08:22,680 Speaker 3: as much compute is on the drawing boards, we need 142 00:08:22,720 --> 00:08:26,600 Speaker 3: to we need to create more compute. And adoption is 143 00:08:26,640 --> 00:08:30,200 Speaker 3: outpacing the demand for computer is outpacing the supply, so 144 00:08:30,240 --> 00:08:36,280 Speaker 3: that means data centers, power other infrastructure, and the capex 145 00:08:36,440 --> 00:08:41,160 Speaker 3: related to that is creating all sorts of opportunities for 146 00:08:41,240 --> 00:08:45,439 Speaker 3: Wall Street to raise capital, debt, equity, et cetera. 147 00:08:46,040 --> 00:08:49,360 Speaker 4: There's then the AI adoption. 148 00:08:50,520 --> 00:08:52,880 Speaker 3: And the companies that are in the middle of that, 149 00:08:54,480 --> 00:08:59,160 Speaker 3: and those companies are busy also growing and raising capital 150 00:08:59,160 --> 00:09:04,439 Speaker 3: all the voids civic names, but even most recently SpaceX 151 00:09:04,520 --> 00:09:09,120 Speaker 3: is part of that story, both the infrastructure and adoption stories, 152 00:09:09,520 --> 00:09:12,319 Speaker 3: and so we are we are raising capital for that, 153 00:09:12,440 --> 00:09:15,880 Speaker 3: and every client that I work on and that we're 154 00:09:15,920 --> 00:09:22,240 Speaker 3: working on UH is involved in rethinking their business and 155 00:09:22,280 --> 00:09:24,280 Speaker 3: their processes. 156 00:09:25,760 --> 00:09:29,840 Speaker 4: And using AI to. 157 00:09:28,800 --> 00:09:33,800 Speaker 3: To improve their productivity, improve their their distinctive value proposition. 158 00:09:34,200 --> 00:09:37,160 Speaker 3: And they and they believe that if they don't do that, 159 00:09:37,200 --> 00:09:39,440 Speaker 3: they're going to be left behind. And so this is 160 00:09:39,480 --> 00:09:43,520 Speaker 3: also driving in my opinion, substantial amount of merger activity, 161 00:09:44,160 --> 00:09:48,720 Speaker 3: and that's why you're seeing so many mergers. Not all 162 00:09:48,760 --> 00:09:50,840 Speaker 3: because of this, but it's it's a big part of 163 00:09:50,840 --> 00:09:53,400 Speaker 3: the story where I want more size and scale and 164 00:09:53,480 --> 00:09:59,320 Speaker 3: ability to invest and and bolster for this AI adoption 165 00:09:59,520 --> 00:10:03,520 Speaker 3: because we're going to have to disrupt our own businesses 166 00:10:03,559 --> 00:10:06,400 Speaker 3: so we can be competitive, and our competitors are going 167 00:10:06,440 --> 00:10:08,960 Speaker 3: to be doing that, and so we're seeing it in 168 00:10:09,000 --> 00:10:12,200 Speaker 3: a multiple different channels. 169 00:10:12,800 --> 00:10:16,120 Speaker 2: And Robert, as you mentioned, is unforeseen or just an 170 00:10:16,160 --> 00:10:21,160 Speaker 2: extraordinary historically investment cycle for AI. If you peel back 171 00:10:21,240 --> 00:10:24,560 Speaker 2: the AI cycle that we're in here, are you concerned 172 00:10:24,559 --> 00:10:28,200 Speaker 2: that maybe it's masking some weakness in this economy, because boy, 173 00:10:28,240 --> 00:10:31,120 Speaker 2: it just seems like the sums being invested are propping 174 00:10:31,240 --> 00:10:33,480 Speaker 2: up a lot of industries and a lot of companies 175 00:10:33,520 --> 00:10:34,200 Speaker 2: these days. 176 00:10:34,840 --> 00:10:37,200 Speaker 4: Well I'll put I'll put it this way. 177 00:10:37,480 --> 00:10:43,920 Speaker 3: The uh if you if you look at SMP earnings, 178 00:10:45,000 --> 00:10:49,559 Speaker 3: if you look at the economy, yeah, you'll see there's 179 00:10:49,600 --> 00:10:55,040 Speaker 3: the AI imprint, either infrastructure or adoption or innovation, and 180 00:10:55,080 --> 00:10:58,000 Speaker 3: then there's everything else, and you are seeing a divergence. 181 00:10:58,520 --> 00:11:02,200 Speaker 3: And I think the biggest issue that I'm seeing is, 182 00:11:03,679 --> 00:11:06,320 Speaker 3: let's say there's one hundred and thirty four million households 183 00:11:06,320 --> 00:11:10,480 Speaker 3: in the United States. The median income is eighty thousand 184 00:11:10,520 --> 00:11:14,600 Speaker 3: dollars a year. Okay, half the bottom half of those 185 00:11:14,679 --> 00:11:19,000 Speaker 3: one hundred and thirty four million households statistically does not 186 00:11:19,160 --> 00:11:21,720 Speaker 3: own much in the way financial assets. May not own 187 00:11:21,760 --> 00:11:25,200 Speaker 3: their home, and they've lost twenty five thirty percent purchasing 188 00:11:25,200 --> 00:11:27,520 Speaker 3: power over the last five years, and they're struggling to 189 00:11:27,559 --> 00:11:30,880 Speaker 3: make ends meet that part of the consumer although they've 190 00:11:30,920 --> 00:11:34,400 Speaker 3: just gotten tax, you know, refunds, tax on tips, tax 191 00:11:34,440 --> 00:11:39,439 Speaker 3: and overtime, it's helping them, but they're they're challenged, and 192 00:11:39,480 --> 00:11:42,560 Speaker 3: you can see a disproportionate amount of consumer spending is 193 00:11:42,600 --> 00:11:43,840 Speaker 3: coming from more affluent. 194 00:11:44,200 --> 00:11:46,240 Speaker 4: I think that's a that's a watch out. 195 00:11:46,800 --> 00:11:51,320 Speaker 3: And I across clients and across the economy, I'm seeing 196 00:11:51,600 --> 00:11:53,239 Speaker 3: that dichotomy play. 197 00:11:52,960 --> 00:11:54,800 Speaker 5: Out with AI. 198 00:11:55,040 --> 00:11:57,000 Speaker 2: I mean, one of the benefits presumably is going to 199 00:11:57,000 --> 00:12:00,800 Speaker 2: be increased productivity if that is fact happens. Is that 200 00:12:00,920 --> 00:12:03,880 Speaker 2: enough the offset what appears to be kind of a 201 00:12:03,920 --> 00:12:08,319 Speaker 2: flat you know population with the immigration is effectively shut down, 202 00:12:08,520 --> 00:12:11,360 Speaker 2: and so the population we're like a lot of other 203 00:12:11,720 --> 00:12:14,840 Speaker 2: industrialized companies flat the declining populations. 204 00:12:14,920 --> 00:12:16,600 Speaker 5: Can AI make up for that? 205 00:12:17,520 --> 00:12:21,280 Speaker 3: It can help, and the jury is how much jury 206 00:12:21,320 --> 00:12:23,640 Speaker 3: is out on how much. So we're hoping and our 207 00:12:23,640 --> 00:12:27,120 Speaker 3: economists are thinking that in the out years, over the horizon, 208 00:12:27,720 --> 00:12:31,840 Speaker 3: AI can potentially add as much as fifty basis points 209 00:12:31,960 --> 00:12:36,680 Speaker 3: or more to GDP growth. Okay, so that's very helpful. 210 00:12:37,280 --> 00:12:40,240 Speaker 3: How much of that we capture is going to depend 211 00:12:40,360 --> 00:12:45,120 Speaker 3: on how adaptable our workforce is and our ability to 212 00:12:45,200 --> 00:12:47,680 Speaker 3: get workers who lose their job in one area or 213 00:12:47,720 --> 00:12:51,320 Speaker 3: their job gets redefined to make sure they stay in 214 00:12:51,400 --> 00:12:54,480 Speaker 3: the workforce, and they either and they get retrained if 215 00:12:54,520 --> 00:12:57,760 Speaker 3: they need to. And we're okay, but not great at 216 00:12:57,800 --> 00:13:00,559 Speaker 3: that in the United States. And this starts with early 217 00:13:00,679 --> 00:13:04,560 Speaker 3: childhood literacy improving, full day versus full day versus af 218 00:13:04,600 --> 00:13:08,680 Speaker 3: D pre K, affordable childcare for at risk populations improving 219 00:13:08,720 --> 00:13:12,520 Speaker 3: secondary education, skills training. The whole ecosystem has to get better. 220 00:13:13,040 --> 00:13:15,240 Speaker 3: So can that help off set the fact we have 221 00:13:15,360 --> 00:13:18,880 Speaker 3: very little labor force growth. It can help, but it 222 00:13:19,040 --> 00:13:26,120 Speaker 3: means that potential GDP growth may still be disappointing. And 223 00:13:26,160 --> 00:13:28,840 Speaker 3: the reason that's a big deal is we are historically 224 00:13:28,960 --> 00:13:30,600 Speaker 3: highly leveraged at the government level. 225 00:13:30,800 --> 00:13:31,560 Speaker 4: We need more. 226 00:13:32,080 --> 00:13:35,320 Speaker 3: We need more GDP growth to service this debt, and 227 00:13:35,400 --> 00:13:38,960 Speaker 3: so we need all of this innovation as much as 228 00:13:38,960 --> 00:13:41,640 Speaker 3: possible to translate into GDP growth. 229 00:13:42,600 --> 00:13:45,200 Speaker 2: Robert, thank you so much, Really appreciate getting so much 230 00:13:45,200 --> 00:13:47,120 Speaker 2: of your time here today. Robert Kaplan, he's the vice 231 00:13:47,160 --> 00:13:50,720 Speaker 2: chairman of Goldman Sachs. There giving us some thoughts here, 232 00:13:50,960 --> 00:13:54,120 Speaker 2: Stay with us. More from Bloomberg Surveillance coming up after this. 233 00:14:03,000 --> 00:14:06,560 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 234 00:14:06,640 --> 00:14:09,800 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 235 00:14:09,880 --> 00:14:13,560 Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or 236 00:14:13,679 --> 00:14:15,160 Speaker 1: watch us live on YouTube. 237 00:14:15,240 --> 00:14:18,200 Speaker 2: Mike Wilson joins us here, chief US Equity Strategists and 238 00:14:18,240 --> 00:14:22,880 Speaker 2: CIO at a little shop called Morgan Stanley. I started 239 00:14:23,320 --> 00:14:26,600 Speaker 2: yesterday was my fortieth anniversary on Global Wall Street, and 240 00:14:27,320 --> 00:14:30,320 Speaker 2: throughout my entire career, Morgan Stanley has in my opinion, 241 00:14:30,400 --> 00:14:34,640 Speaker 2: the best tech research on global Wall Street. You think 242 00:14:34,640 --> 00:14:36,880 Speaker 2: about Mary Meeker, Frank Latron on the banking side and 243 00:14:36,880 --> 00:14:37,680 Speaker 2: all that kind of stuff. 244 00:14:37,840 --> 00:14:41,400 Speaker 5: Mike, what are you guys saying about AI these days? 245 00:14:41,520 --> 00:14:41,720 Speaker 4: How? 246 00:14:42,000 --> 00:14:46,760 Speaker 5: What's that's the theme arguably of our career more than Internet. 247 00:14:46,760 --> 00:14:47,680 Speaker 5: What are you guys saying about that? 248 00:14:47,920 --> 00:14:49,960 Speaker 6: Yeah, I mean it's it's it's more of the same. So, 249 00:14:50,040 --> 00:14:52,000 Speaker 6: I mean a little known fact. I guess as I 250 00:14:52,320 --> 00:14:55,680 Speaker 6: started the I was the original tech sales tech you know, 251 00:14:55,760 --> 00:14:59,280 Speaker 6: desk analysts in the nineties, and so I saw front 252 00:14:59,320 --> 00:15:01,680 Speaker 6: Rosie to the all good boom and bust of. 253 00:15:01,640 --> 00:15:05,120 Speaker 8: That, Henry Blodgett, who Frank Quadtrone? 254 00:15:05,240 --> 00:15:07,680 Speaker 6: Yeah, I mean, so all these names and everything else. 255 00:15:07,720 --> 00:15:11,400 Speaker 6: So anyways, the point is that this is just another Capex, 256 00:15:11,520 --> 00:15:13,920 Speaker 6: This is just an this is the next tech cycle, okay. 257 00:15:13,960 --> 00:15:15,600 Speaker 6: And so there are a lot of similarities, there are 258 00:15:15,640 --> 00:15:18,160 Speaker 6: a lot of differences, but we're we're in the mix. 259 00:15:18,200 --> 00:15:19,120 Speaker 4: That we're in the middle of it right now. 260 00:15:19,120 --> 00:15:21,200 Speaker 6: And that's what we've been saying that and that continues 261 00:15:21,200 --> 00:15:23,040 Speaker 6: and the reason why I feel confident it's not at 262 00:15:23,040 --> 00:15:25,120 Speaker 6: the end of the road yet, is because the capital 263 00:15:25,160 --> 00:15:27,320 Speaker 6: markets are still funding this and the companies are being 264 00:15:27,360 --> 00:15:29,640 Speaker 6: rewarded for it, meaning and we look at this carefully. 265 00:15:29,680 --> 00:15:32,600 Speaker 6: You know, capex to sales ratio is a factor is 266 00:15:32,640 --> 00:15:34,119 Speaker 6: being rewarded in the marketplace. 267 00:15:34,200 --> 00:15:34,400 Speaker 4: Okay. 268 00:15:34,400 --> 00:15:37,040 Speaker 6: In other words, if you're spending more, the stock goes up. Now, 269 00:15:37,120 --> 00:15:39,360 Speaker 6: eventually that will start, it'll start to be a head wind, 270 00:15:39,400 --> 00:15:41,720 Speaker 6: and we'll figure out when that is. And when that 271 00:15:41,760 --> 00:15:42,320 Speaker 6: starts to happen. 272 00:15:42,360 --> 00:15:42,840 Speaker 7: You got to worry. 273 00:15:42,840 --> 00:15:44,680 Speaker 6: The other thing I would be paying attention to is 274 00:15:44,720 --> 00:15:48,640 Speaker 6: credit spreads, right, and so for some companies, their credit 275 00:15:48,720 --> 00:15:51,200 Speaker 6: spreads have blown out or cdss have gone up because 276 00:15:51,200 --> 00:15:54,000 Speaker 6: at the margin, we're seeing at the margins, some companies 277 00:15:54,040 --> 00:15:56,200 Speaker 6: are not being rewarded for higher campecks now because they're 278 00:15:56,280 --> 00:15:59,120 Speaker 6: viewed as a loser. Okay, but that broadly speaking, that's 279 00:15:59,160 --> 00:16:01,320 Speaker 6: not the case yet. So there's usually early warning signs. 280 00:16:01,320 --> 00:16:03,000 Speaker 6: There's canaries in a cold mine to tell you, okay, 281 00:16:03,000 --> 00:16:05,800 Speaker 6: they're overspending. I'll say this, this is probably not a 282 00:16:05,800 --> 00:16:08,000 Speaker 6: house for few, but it's my view there's one hundred 283 00:16:08,000 --> 00:16:10,520 Speaker 6: percent chance there's gonna be mal investment here. Okay, This 284 00:16:10,600 --> 00:16:12,440 Speaker 6: is like every major camp except but that's not a 285 00:16:12,560 --> 00:16:14,920 Speaker 6: crazy statement. Okay, it's so different in fracking, it's so 286 00:16:14,960 --> 00:16:18,920 Speaker 6: different in railroads, no different electricity cycles. So but we're 287 00:16:19,000 --> 00:16:20,440 Speaker 6: we're probably not there yet, we don't know. And the 288 00:16:20,440 --> 00:16:21,960 Speaker 6: other thing to keep in mind is that the marginal 289 00:16:22,000 --> 00:16:25,440 Speaker 6: cost of compute, the marginal cost of the product itself, 290 00:16:25,520 --> 00:16:27,320 Speaker 6: has to go to zero for it to work. It 291 00:16:27,400 --> 00:16:29,080 Speaker 6: will go to zero the be there'll be all you 292 00:16:29,080 --> 00:16:31,760 Speaker 6: could eat plan. So, but we're in that transition period. 293 00:16:32,280 --> 00:16:33,880 Speaker 6: You know, there's going to be I think we're now 294 00:16:33,880 --> 00:16:36,160 Speaker 6: in the transition from the picks and shovels to the adopters. 295 00:16:36,520 --> 00:16:39,240 Speaker 6: We're seeing like actual adopters of the technology are becoming 296 00:16:39,280 --> 00:16:41,760 Speaker 6: more efficient, you know, driving revenue, not just cutting costs 297 00:16:41,760 --> 00:16:45,320 Speaker 6: by hiring fewer people. That transition could last probably several years, 298 00:16:45,600 --> 00:16:48,120 Speaker 6: and then ultimately, you know, we'll we'll have the other 299 00:16:48,160 --> 00:16:48,520 Speaker 6: side of it. 300 00:16:48,600 --> 00:16:51,920 Speaker 8: By the way, Jim Chainos was on with Tom and 301 00:16:51,960 --> 00:16:56,160 Speaker 8: Scarlett last Friday on Bloomberg Money, their new program every 302 00:16:56,200 --> 00:16:59,200 Speaker 8: Friday at noon, and of course he's a short seller 303 00:16:59,240 --> 00:17:01,440 Speaker 8: and he's talking his book to some extent, but he 304 00:17:01,560 --> 00:17:03,480 Speaker 8: did say that, you know, during the dot Com era, 305 00:17:03,600 --> 00:17:07,560 Speaker 8: at the tail end earnings were up thirty percent and 306 00:17:08,359 --> 00:17:11,239 Speaker 8: the next year they were down forty because people were 307 00:17:11,280 --> 00:17:13,840 Speaker 8: putting in these massive orders due to a huge Capex 308 00:17:13,960 --> 00:17:16,399 Speaker 8: ramp up, and then all of a sudden they disappeared. 309 00:17:16,960 --> 00:17:18,720 Speaker 8: How do you know when we're going to get there? 310 00:17:18,720 --> 00:17:22,120 Speaker 8: Because I know you look at forward earnings and earnings 311 00:17:22,119 --> 00:17:25,040 Speaker 8: revisions that are still are they still to the upside? 312 00:17:25,160 --> 00:17:25,320 Speaker 4: Yeah? 313 00:17:25,359 --> 00:17:27,360 Speaker 6: So we are seeing a peak way to change though 314 00:17:27,359 --> 00:17:30,080 Speaker 6: in a revision breath in a lot of different areas. 315 00:17:30,119 --> 00:17:31,920 Speaker 6: And you know, one of those is semiconductors where we 316 00:17:31,920 --> 00:17:33,320 Speaker 6: haven't seen it roll over, but it's at such a 317 00:17:33,400 --> 00:17:36,120 Speaker 6: high level it can't sustain. So think about this. Since 318 00:17:36,920 --> 00:17:39,719 Speaker 6: chat ChiPT was announced in I guess November of twenty two, 319 00:17:39,840 --> 00:17:44,679 Speaker 6: now we've had three decent corrections in this bull cycle 320 00:17:44,680 --> 00:17:47,119 Speaker 6: of Campex. Three different times we've seen these stocks go 321 00:17:47,160 --> 00:17:49,560 Speaker 6: down thirty to fifty percent. So we can have a 322 00:17:49,600 --> 00:17:52,040 Speaker 6: thirty to fifty percent draw down and still have the 323 00:17:52,080 --> 00:17:54,880 Speaker 6: long cycle, yeact, And that's what I expect to see, 324 00:17:55,280 --> 00:17:57,680 Speaker 6: you know, I suspect we'll see another one of those scares. 325 00:17:58,119 --> 00:18:01,600 Speaker 6: And by the way, you know in March the memory 326 00:18:01,640 --> 00:18:04,439 Speaker 6: stacks were down thirty to forty percent bottom and then 327 00:18:04,440 --> 00:18:05,320 Speaker 6: they went out five times. 328 00:18:05,400 --> 00:18:05,600 Speaker 3: I know. 329 00:18:06,640 --> 00:18:08,639 Speaker 6: So you know, like trying to trade that back and 330 00:18:08,720 --> 00:18:11,679 Speaker 6: forth is for the pros only. We try to do 331 00:18:11,720 --> 00:18:13,480 Speaker 6: that a little bit, but like for the average person. 332 00:18:13,520 --> 00:18:15,320 Speaker 6: So I don't think it's the end. But the boy, 333 00:18:15,440 --> 00:18:17,400 Speaker 6: I mean, you to think that you can't have these 334 00:18:17,400 --> 00:18:20,640 Speaker 6: big kind of you know, cycnical resets, it's pretty naive. 335 00:18:21,160 --> 00:18:24,520 Speaker 5: Morgan Stanley equity trading desk. Serious people, they know what 336 00:18:24,520 --> 00:18:24,960 Speaker 5: they're doing. 337 00:18:25,000 --> 00:18:27,480 Speaker 2: Serious people. Man, I traded against them for years. I'm 338 00:18:27,480 --> 00:18:29,840 Speaker 2: not sure I ever made it good on that. Hey, Mike, 339 00:18:30,160 --> 00:18:34,879 Speaker 2: when you see meg IPOs like SpaceX, like anthropic like 340 00:18:34,960 --> 00:18:38,639 Speaker 2: open Ayike coming, is that anything about the market in general? 341 00:18:39,040 --> 00:18:41,160 Speaker 6: Well, the appetite is still there. I mean, like that's 342 00:18:41,200 --> 00:18:43,720 Speaker 6: what I said earlier, Like, you know, the market is 343 00:18:43,760 --> 00:18:46,520 Speaker 6: absorbing a lot of paper. And it's not just in equities, 344 00:18:46,520 --> 00:18:47,480 Speaker 6: by the way, it's in credit. 345 00:18:47,680 --> 00:18:49,040 Speaker 5: I mean Video came out with a bond. 346 00:18:49,280 --> 00:18:52,000 Speaker 6: I mean we've seen massive credit offerings, which means what 347 00:18:52,160 --> 00:18:55,680 Speaker 6: it means that the market is funding these expenditures. It's 348 00:18:55,760 --> 00:18:57,880 Speaker 6: it's unlikely these companies are going to raise the money 349 00:18:57,880 --> 00:19:00,199 Speaker 6: and not spend it. Okay, So that's why you're so 350 00:19:00,240 --> 00:19:03,000 Speaker 6: excited about semi conductors. But to your point, Matt earlier, like, 351 00:19:03,160 --> 00:19:04,840 Speaker 6: you know, the market is not dumb okay like and 352 00:19:04,880 --> 00:19:07,040 Speaker 6: people say, oh, this is what happened in the news today. 353 00:19:08,200 --> 00:19:10,119 Speaker 7: I mean, do I care if I'm an equity. 354 00:19:09,880 --> 00:19:11,680 Speaker 6: Guye do I really care? Not really, because it's usually 355 00:19:11,720 --> 00:19:14,000 Speaker 6: the market is thinking six months in advance. And that's 356 00:19:14,000 --> 00:19:16,480 Speaker 6: why we look at these indicators like revision breath because 357 00:19:16,480 --> 00:19:19,000 Speaker 6: they're lead their canary that tells me things are accelerating. 358 00:19:19,000 --> 00:19:20,359 Speaker 6: I mean, one of the reasons we got so bullish 359 00:19:20,440 --> 00:19:22,679 Speaker 6: last year we were debating this on on the on 360 00:19:22,720 --> 00:19:25,399 Speaker 6: the other show, is we saw the revision breads just 361 00:19:25,440 --> 00:19:27,600 Speaker 6: going and we had a different view, but that was 362 00:19:27,640 --> 00:19:31,159 Speaker 6: our We're almost cheating, right, we can see like in 363 00:19:31,200 --> 00:19:33,200 Speaker 6: three months, which can happen to actual earnings. 364 00:19:33,040 --> 00:19:33,720 Speaker 7: It's it's a tell. 365 00:19:34,200 --> 00:19:36,639 Speaker 6: And so that's why I'm so focused right now that 366 00:19:36,680 --> 00:19:39,440 Speaker 6: we're such at such high levels on rate to change 367 00:19:39,560 --> 00:19:40,760 Speaker 6: that it has to come off a bit. 368 00:19:40,960 --> 00:19:42,080 Speaker 7: But I don't think it's the end. 369 00:19:42,119 --> 00:19:43,879 Speaker 6: It's a it's a reset a little bit on the 370 00:19:44,000 --> 00:19:44,800 Speaker 6: on the rate to change. 371 00:19:44,840 --> 00:19:48,680 Speaker 8: By the way I normally anchor Bloomberg Open Interest which 372 00:19:48,760 --> 00:19:52,160 Speaker 8: airs on Bloomberg Television weekdays from nine am to eleven am. 373 00:19:52,280 --> 00:19:54,520 Speaker 8: Are you doing that today or Mike Wilson, frequent guest, Yeah, 374 00:19:54,520 --> 00:19:57,000 Speaker 8: I'm doing that today as well. But radio, well, I 375 00:19:57,040 --> 00:19:59,520 Speaker 8: prefer radio, to be honest. I know, I listened to 376 00:19:59,560 --> 00:20:02,159 Speaker 8: this program every day, so it's a real honor to 377 00:20:02,160 --> 00:20:05,320 Speaker 8: be on with you. Lou Wang from Bloomberg News were 378 00:20:05,359 --> 00:20:08,520 Speaker 8: a great piece last week. I think about all of 379 00:20:08,560 --> 00:20:11,080 Speaker 8: the equity coming to market in the next two years. 380 00:20:11,480 --> 00:20:13,879 Speaker 8: JP Morgan estimates one and a half trillion dollars of 381 00:20:13,920 --> 00:20:16,359 Speaker 8: net equity coming to market as opposed to the last 382 00:20:16,359 --> 00:20:19,560 Speaker 8: twenty years we've seen twelve trillion dollars taken out of 383 00:20:19,600 --> 00:20:24,800 Speaker 8: the market through corporate buybacks. Is that about face concerning 384 00:20:24,800 --> 00:20:25,040 Speaker 8: to you? 385 00:20:25,640 --> 00:20:28,199 Speaker 6: Yeah, I mean, once again that can lead to correction. So, 386 00:20:28,400 --> 00:20:31,640 Speaker 6: I mean we've been very focused in the last two months. 387 00:20:32,040 --> 00:20:34,679 Speaker 6: As you read our research, you'll know, like on liquidity. 388 00:20:34,880 --> 00:20:35,200 Speaker 7: Okay. 389 00:20:35,280 --> 00:20:37,680 Speaker 6: So, and by the way, earlier this year people were 390 00:20:37,760 --> 00:20:40,679 Speaker 6: kind of bearish on the economy, embarish on you know, 391 00:20:41,520 --> 00:20:44,040 Speaker 6: basically that things were going to be softer and earnings. 392 00:20:44,040 --> 00:20:46,520 Speaker 6: That turned out to be true. But what they should 393 00:20:46,520 --> 00:20:48,120 Speaker 6: have been focused on was that the FED was kind 394 00:20:48,119 --> 00:20:50,680 Speaker 6: of transitioning. They were going from being less dubbish on 395 00:20:50,840 --> 00:20:54,040 Speaker 6: rate guidance but then more dubish on liquidity. So that 396 00:20:54,080 --> 00:20:57,120 Speaker 6: actually helped stocks to bottom in March. I'll just tell 397 00:20:57,119 --> 00:20:59,320 Speaker 6: you right now that that liquidity picture is actually somewhat 398 00:20:59,320 --> 00:21:02,040 Speaker 6: deteriorating now. So today's meeting with the new FED chair 399 00:21:02,160 --> 00:21:03,480 Speaker 6: is going to be important to say, Okay, well, how 400 00:21:03,480 --> 00:21:05,320 Speaker 6: are you going to think about the r ANDP, the 401 00:21:05,400 --> 00:21:08,119 Speaker 6: reserve manageering program or purchases, and how you're going to 402 00:21:08,119 --> 00:21:11,200 Speaker 6: think about, you know, managing kind of liquidity picture in 403 00:21:11,240 --> 00:21:14,639 Speaker 6: the face of liquidity being sucked out of the marketplace. 404 00:21:15,040 --> 00:21:18,119 Speaker 6: And there's there's three draws on liquidity now. One is 405 00:21:18,520 --> 00:21:21,480 Speaker 6: all this issuance both in equity and fixed income. The 406 00:21:22,000 --> 00:21:25,280 Speaker 6: other one is is on the economy itself. Right, the 407 00:21:25,320 --> 00:21:27,480 Speaker 6: economy itself is absorbing capital in the way that we 408 00:21:27,520 --> 00:21:30,359 Speaker 6: haven't seen. So the other big change matt from not 409 00:21:30,560 --> 00:21:33,720 Speaker 6: just the fact that we're seeing net issuance perhaps, but 410 00:21:33,720 --> 00:21:36,400 Speaker 6: we're also seeing net consumption of liquidity in the real economy. 411 00:21:36,400 --> 00:21:38,399 Speaker 6: We have been investing for twenty years, right've been in 412 00:21:38,520 --> 00:21:40,919 Speaker 6: a world of financial oppression. So that just means it's 413 00:21:40,960 --> 00:21:43,399 Speaker 6: more volatile. You're going to get this more volatile world, 414 00:21:43,440 --> 00:21:46,680 Speaker 6: but it also leads to higher nominal GDP Growth's why 415 00:21:46,680 --> 00:21:48,720 Speaker 6: I'm not worried about earnings growth at all. I'm worried 416 00:21:48,760 --> 00:21:50,960 Speaker 6: about the multiple and these sort of draw downs that 417 00:21:51,040 --> 00:21:53,520 Speaker 6: you get because of this volatility on liquidity and then 418 00:21:53,520 --> 00:21:55,159 Speaker 6: the pequay to change on revisions. 419 00:21:55,400 --> 00:21:56,920 Speaker 7: Mike, thanks so much for joining us. Appreciate it. 420 00:21:57,000 --> 00:21:59,679 Speaker 8: Mike Wilson, Chief US Equity Stress Masterclass. 421 00:21:59,680 --> 00:22:02,400 Speaker 5: As you so, we stay with us. More from Bloomberg 422 00:22:02,440 --> 00:22:04,160 Speaker 5: Surveillance coming up after this. 423 00:22:13,040 --> 00:22:16,600 Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live 424 00:22:16,680 --> 00:22:19,840 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 425 00:22:19,920 --> 00:22:23,600 Speaker 1: Applecarplay and Android Otto with the Bloomberg Business app, or 426 00:22:23,720 --> 00:22:25,160 Speaker 1: watch us live on YouTube. 427 00:22:25,320 --> 00:22:29,640 Speaker 5: We welcome right now Craig Peters, post cio P Jim Credit. 428 00:22:29,880 --> 00:22:32,520 Speaker 2: He is a pro graduate of one of my favorite schools, 429 00:22:32,520 --> 00:22:33,920 Speaker 2: a College of New Jersey. 430 00:22:34,600 --> 00:22:35,480 Speaker 5: In you in New Jersey. 431 00:22:35,480 --> 00:22:37,800 Speaker 2: A hired a bunch of those kids at Bloomberg Intelligence 432 00:22:38,040 --> 00:22:38,520 Speaker 2: in Princeton. 433 00:22:38,560 --> 00:22:39,920 Speaker 4: They're doing a great job for us. 434 00:22:40,359 --> 00:22:43,000 Speaker 5: Greg in a credit markets here do I take credit risk? 435 00:22:43,040 --> 00:22:43,240 Speaker 4: Here? 436 00:22:43,320 --> 00:22:45,720 Speaker 2: I mean I feel like I can just sit and 437 00:22:45,840 --> 00:22:48,159 Speaker 2: hide away in a two year treasury at you know, 438 00:22:48,359 --> 00:22:49,040 Speaker 2: four percent. 439 00:22:49,160 --> 00:22:51,439 Speaker 5: Do I need to take credit risk above that? 440 00:22:53,080 --> 00:22:56,439 Speaker 9: I think, you know what, I think that's something that's 441 00:22:57,040 --> 00:23:00,000 Speaker 9: you know, very much top of mind. I think cash 442 00:23:00,000 --> 00:23:04,240 Speaker 9: which is attractive. I think base rates are attractive. Our 443 00:23:04,280 --> 00:23:07,399 Speaker 9: bias is to lean into that. I look at the 444 00:23:07,440 --> 00:23:11,480 Speaker 9: credit markets from a kind of a passive beta broad perspective, 445 00:23:12,000 --> 00:23:15,480 Speaker 9: and they look quite expensive. So spreads are just calling 446 00:23:15,560 --> 00:23:17,840 Speaker 9: the richest de style that we've seen over the past, 447 00:23:17,880 --> 00:23:20,480 Speaker 9: you know, twenty five years or so. So the value 448 00:23:20,520 --> 00:23:24,919 Speaker 9: proposition in credit from just a broad allocation standpoint is 449 00:23:24,960 --> 00:23:28,120 Speaker 9: not great. At the same time, I will tell you 450 00:23:28,160 --> 00:23:31,639 Speaker 9: that the dispersion in the market and the opportunities and 451 00:23:31,680 --> 00:23:35,040 Speaker 9: the ability to really take advantage of dislocations is the 452 00:23:35,080 --> 00:23:38,800 Speaker 9: best I've ever seen it. So it's it's quite a dichotomy, 453 00:23:38,840 --> 00:23:42,360 Speaker 9: I guess in a way. So at one side, I'm 454 00:23:42,400 --> 00:23:46,439 Speaker 9: really not you know, over in two's around the credit market, 455 00:23:46,480 --> 00:23:50,719 Speaker 9: and then on the other quite enthused. From an idiosyncratic perspective. 456 00:23:50,359 --> 00:23:53,880 Speaker 8: Dispersion is a word I hear a lot from credit investors. 457 00:23:53,960 --> 00:23:57,240 Speaker 8: I just talked to Bruce Richards from Marathon and he 458 00:23:57,400 --> 00:23:59,560 Speaker 8: was all in on that point as well. Can you 459 00:23:59,600 --> 00:24:02,600 Speaker 8: expand on that for somebody who lives in the equity 460 00:24:02,600 --> 00:24:04,159 Speaker 8: world or a couple of guys who do like me 461 00:24:04,200 --> 00:24:04,520 Speaker 8: and Paul. 462 00:24:05,680 --> 00:24:07,120 Speaker 4: Yeah, So the markets. 463 00:24:06,760 --> 00:24:10,800 Speaker 9: Are you know, separating you know, the strong from the weak, 464 00:24:12,000 --> 00:24:15,600 Speaker 9: and so as a credit investor, you really enjoy the 465 00:24:15,600 --> 00:24:20,880 Speaker 9: marketplace when companies are you know, not necessarily at top. 466 00:24:20,680 --> 00:24:21,879 Speaker 4: Of their game so to speak. 467 00:24:22,000 --> 00:24:26,119 Speaker 9: Right, So credit spreads are tight at the index level 468 00:24:26,560 --> 00:24:29,520 Speaker 9: level for a reason, and that is because fundamentals are 469 00:24:29,520 --> 00:24:33,120 Speaker 9: pretty good. But what that mass is that not all sectors, 470 00:24:33,200 --> 00:24:36,240 Speaker 9: not all companies, are doing well. And so the ability 471 00:24:36,240 --> 00:24:39,439 Speaker 9: for credit investors who actually do the credit work to 472 00:24:39,520 --> 00:24:45,280 Speaker 9: take advantage is is quite robust. Stated differently, you you 473 00:24:45,400 --> 00:24:48,960 Speaker 9: have you know, bonds or loans, you know, some trading 474 00:24:49,000 --> 00:24:52,000 Speaker 9: at six percent, some trading at twelve percent. So it's 475 00:24:52,000 --> 00:24:55,240 Speaker 9: giving you an opportunity to kind of sift through. And 476 00:24:55,320 --> 00:24:58,760 Speaker 9: the second point is this AI build out. Well, there's 477 00:24:58,800 --> 00:25:02,119 Speaker 9: just so much debt hitting the market in so many 478 00:25:02,160 --> 00:25:05,960 Speaker 9: different forms, whether it's in kind of a structured form SPV, 479 00:25:07,240 --> 00:25:12,200 Speaker 9: whether it's high yield loans, direct lending. So it's really 480 00:25:12,280 --> 00:25:14,800 Speaker 9: creating a fantastic opportunity. 481 00:25:15,600 --> 00:25:18,520 Speaker 2: How do you think about that paper, Greg, the all 482 00:25:18,560 --> 00:25:21,040 Speaker 2: the AI paper that's been hitting the market. 483 00:25:21,080 --> 00:25:24,879 Speaker 5: Here, there's a lot of issues here, great credits. 484 00:25:25,000 --> 00:25:27,680 Speaker 2: But they haven't really been big in the credit markets 485 00:25:27,760 --> 00:25:30,960 Speaker 2: until recently. But it seems like the market can absorb 486 00:25:31,119 --> 00:25:33,920 Speaker 2: anything they want to bring to market for now. 487 00:25:35,040 --> 00:25:38,959 Speaker 9: So this is going to be a continued onslaught. So 488 00:25:39,080 --> 00:25:43,080 Speaker 9: I think of it in three parts. You know, right 489 00:25:43,119 --> 00:25:46,960 Speaker 9: now we're very much in the early stages, so I 490 00:25:46,960 --> 00:25:51,040 Speaker 9: would not rush to, you know, enter particularly the unsecured 491 00:25:51,119 --> 00:25:53,359 Speaker 9: side of the market. So you know you're speaking about 492 00:25:53,359 --> 00:25:58,119 Speaker 9: the MAC seven. You know that that paper just continues 493 00:25:58,160 --> 00:26:01,159 Speaker 9: to hit let's say the invest some great corporate market. 494 00:26:01,440 --> 00:26:04,000 Speaker 9: I expect that to continue. I do not think that 495 00:26:04,119 --> 00:26:08,720 Speaker 9: is good value. I expect more paper to come. Those 496 00:26:08,720 --> 00:26:11,440 Speaker 9: spreads will continue to be under pressure. If you look 497 00:26:11,480 --> 00:26:14,480 Speaker 9: at some of the kind of the Max seven spreads, 498 00:26:14,680 --> 00:26:17,399 Speaker 9: those spreads have you know, more than doubled over the 499 00:26:17,440 --> 00:26:20,720 Speaker 9: past you know, twelve eighteen months. So the market's repricing 500 00:26:20,800 --> 00:26:23,600 Speaker 9: that risk. I think it will continue to reprice that risk, 501 00:26:23,680 --> 00:26:27,159 Speaker 9: and so I don't view that as a good proposition. 502 00:26:27,200 --> 00:26:30,439 Speaker 9: I see much much better value and areas in the 503 00:26:30,480 --> 00:26:34,199 Speaker 9: market where you can get similar risk tied to those 504 00:26:34,440 --> 00:26:38,960 Speaker 9: max seven names that actually have structure and collateral attached 505 00:26:39,000 --> 00:26:42,480 Speaker 9: to it, actually wider spread. So I think the market's 506 00:26:42,520 --> 00:26:46,040 Speaker 9: fundamentally mispricing that, and that's where we're focused. 507 00:26:46,200 --> 00:26:48,680 Speaker 2: So Greg, I mean, if I'm Morgan Stanley, Goldman, Sachs 508 00:26:48,760 --> 00:26:52,000 Speaker 2: JP Morgan Salesman, I call you, You're not picking up 509 00:26:52,000 --> 00:26:53,040 Speaker 2: the phone to buy this stuff. 510 00:26:53,680 --> 00:26:57,880 Speaker 9: Well, we're always picking up the phone, but it's it's 511 00:26:57,920 --> 00:27:01,199 Speaker 9: a relative value decision. And and I think you know, 512 00:27:01,400 --> 00:27:04,640 Speaker 9: investors like us, you know, big money managers like PGM, 513 00:27:05,320 --> 00:27:08,960 Speaker 9: We we have kind of the opportunity to look across 514 00:27:09,080 --> 00:27:12,440 Speaker 9: and take advantage, so we don't necessarily have to be invested, 515 00:27:12,480 --> 00:27:16,639 Speaker 9: so we can look at it. But if we are investing, uh, 516 00:27:16,760 --> 00:27:19,320 Speaker 9: it's a it's a recycling type of trade. What I 517 00:27:19,359 --> 00:27:23,040 Speaker 9: mean by that is, you know, the technicals, as you mentioned, 518 00:27:23,080 --> 00:27:26,359 Speaker 9: are still quite strong. So we'll we'll we'll buy it, 519 00:27:26,440 --> 00:27:29,960 Speaker 9: we'll we'll sell it, and we'll get another deal to come. 520 00:27:30,119 --> 00:27:34,879 Speaker 9: So uh, there there's no reason to dive headfirst into 521 00:27:34,920 --> 00:27:39,040 Speaker 9: this marketplace on the unsecured UH MAXIM and AI build 522 00:27:39,040 --> 00:27:42,359 Speaker 9: out because there's a lot of paper coming down the Pike. 523 00:27:44,160 --> 00:27:46,679 Speaker 8: By the way, what does uh, what's Kevin worsh going 524 00:27:46,720 --> 00:27:51,280 Speaker 8: to do today? Remember today hopefully first meeting. 525 00:27:51,480 --> 00:27:51,680 Speaker 7: Yep. 526 00:27:52,560 --> 00:27:55,639 Speaker 8: But we need to gauge, you know, Uh, we have 527 00:27:55,720 --> 00:27:59,159 Speaker 8: this fed spectrometer for example, on the Bloomberg terminal f 528 00:27:59,280 --> 00:27:59,800 Speaker 8: d S. 529 00:28:00,080 --> 00:28:00,840 Speaker 4: He go. 530 00:28:01,760 --> 00:28:05,240 Speaker 8: We finally put him in and he gets a minus 531 00:28:05,240 --> 00:28:05,879 Speaker 8: two rating. 532 00:28:05,920 --> 00:28:08,680 Speaker 5: And that's like Max dubvish. I thought he was a hawk. 533 00:28:08,800 --> 00:28:10,880 Speaker 5: I didn't know this functions. 534 00:28:11,920 --> 00:28:15,400 Speaker 9: Yeah, that's what makes it so interesting, right, So if 535 00:28:15,400 --> 00:28:18,920 Speaker 9: you look at his body of work and his communication 536 00:28:19,080 --> 00:28:24,439 Speaker 9: throughout the years, he decidedly leans hawkish. But you know, 537 00:28:24,560 --> 00:28:27,680 Speaker 9: in the you know, the interview process, let's just call 538 00:28:27,720 --> 00:28:32,200 Speaker 9: it that, he you know, definitely had a more dubbish tilt. 539 00:28:32,840 --> 00:28:35,120 Speaker 4: We think he cares. 540 00:28:35,200 --> 00:28:36,359 Speaker 5: How could he get the job? 541 00:28:36,520 --> 00:28:38,040 Speaker 8: That's the only way you can get the job, right, 542 00:28:38,040 --> 00:28:40,600 Speaker 8: when you're around President Trump, you have to agree with 543 00:28:40,720 --> 00:28:43,520 Speaker 8: President Trump. You have to say, Emperor, you have a 544 00:28:43,560 --> 00:28:44,840 Speaker 8: beautiful set of new clothes. 545 00:28:45,680 --> 00:28:46,240 Speaker 4: Yeah. 546 00:28:46,520 --> 00:28:48,680 Speaker 9: Yeah, And so I think he's playing a different game. 547 00:28:49,360 --> 00:28:52,480 Speaker 9: And so what I mean by that is, let's do 548 00:28:52,520 --> 00:28:55,280 Speaker 9: a thought experiment. So let's say he comes out today 549 00:28:55,400 --> 00:28:58,640 Speaker 9: and he cuts, you know, interest rates by one hundred 550 00:28:58,680 --> 00:29:02,600 Speaker 9: bases points, what happens to back end yields, They're just 551 00:29:02,640 --> 00:29:06,040 Speaker 9: going to explode higher. So I think he's trying to 552 00:29:06,040 --> 00:29:09,440 Speaker 9: convince the administration that the way that you actually keep 553 00:29:09,440 --> 00:29:12,320 Speaker 9: a cap on interest rates, in fact maybe even bring 554 00:29:12,360 --> 00:29:15,440 Speaker 9: interest rates down, is to have a more hawkish tilt, 555 00:29:15,480 --> 00:29:19,200 Speaker 9: not a dubbish tilt. So I don't know if he'll 556 00:29:19,240 --> 00:29:23,120 Speaker 9: be successful around that, but I think that's the idea. 557 00:29:24,040 --> 00:29:27,800 Speaker 9: The data are too strong inflations, too far away from 558 00:29:28,200 --> 00:29:32,920 Speaker 9: their mandate to really have this easing bias here. So 559 00:29:33,080 --> 00:29:35,840 Speaker 9: even if I think he wants to ease, which I 560 00:29:35,920 --> 00:29:41,080 Speaker 9: don't think he does, necessarily, that easing bias just looks 561 00:29:41,240 --> 00:29:44,120 Speaker 9: out of place given kind of the broad macro that 562 00:29:44,360 --> 00:29:45,160 Speaker 9: you know we're seeing. 563 00:29:45,640 --> 00:29:48,560 Speaker 2: All right, Greg, thanks so much, joining u appreciated as always, Greg, Peter, 564 00:29:48,600 --> 00:29:52,720 Speaker 2: she's the co ce io Key Jim Credit. They're in Newark, 565 00:29:52,760 --> 00:29:56,240 Speaker 2: New Jersey, monster amounts of capital there. If you're Goldman 566 00:29:56,320 --> 00:30:00,360 Speaker 2: Sachs salesman or more inctently salesman, and you're selling debt, your. 567 00:30:00,240 --> 00:30:03,720 Speaker 4: First phone calls is the PIJA. That's how big they are. 568 00:30:03,920 --> 00:30:07,080 Speaker 5: Stay with us. More from Bloomberg Surveillance coming up after this. 569 00:30:15,960 --> 00:30:19,520 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 570 00:30:19,600 --> 00:30:22,760 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 571 00:30:22,840 --> 00:30:26,520 Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or 572 00:30:26,640 --> 00:30:28,160 Speaker 1: watch us live on YouTube. 573 00:30:28,600 --> 00:30:31,560 Speaker 2: Roger Goyle joints us here in studio is a candidate 574 00:30:31,600 --> 00:30:34,640 Speaker 2: for the New York State Comptroller. Those are the dudes 575 00:30:34,720 --> 00:30:38,240 Speaker 2: that run and take care of and manage the money 576 00:30:38,280 --> 00:30:40,000 Speaker 2: of the State of New York. 577 00:30:40,040 --> 00:30:43,640 Speaker 8: Extraordinarily, they decide how much SpaceX will invest in. 578 00:30:43,960 --> 00:30:46,960 Speaker 2: We'll talk about that, Roger, thanks so much for joining 579 00:30:47,000 --> 00:30:50,520 Speaker 2: us here. Just about your platform here, Roger, as you 580 00:30:50,560 --> 00:30:53,280 Speaker 2: think about becoming the comptroller of the State of New York, 581 00:30:54,720 --> 00:30:56,200 Speaker 2: what are you thinking about these days? What's top of 582 00:30:56,240 --> 00:30:56,600 Speaker 2: your mind? 583 00:30:56,720 --> 00:30:58,960 Speaker 10: Well, I think you know this is a Democratic primary, 584 00:30:59,000 --> 00:31:01,320 Speaker 10: and again thanks for having me. People want change, and 585 00:31:01,360 --> 00:31:03,640 Speaker 10: they want people who will stand up and tackle this 586 00:31:03,720 --> 00:31:07,160 Speaker 10: affordability crisis that's choking all of New York. And for Democrats, 587 00:31:07,200 --> 00:31:09,080 Speaker 10: of course, you want to stand up to the Trump administration. 588 00:31:09,480 --> 00:31:11,800 Speaker 7: I think a pretty unique guy. I've been in public office. 589 00:31:11,840 --> 00:31:14,720 Speaker 10: I've started and run a company that I started from 590 00:31:14,720 --> 00:31:17,640 Speaker 10: scratch and successfully sold, and I've got a real vision 591 00:31:17,680 --> 00:31:19,560 Speaker 10: for the fact that we can lower utility rates, we 592 00:31:19,560 --> 00:31:21,880 Speaker 10: can build affordable housing, and frankly, we can have a 593 00:31:21,880 --> 00:31:25,200 Speaker 10: pension fund that reflects our values. Right now, we are 594 00:31:25,240 --> 00:31:27,360 Speaker 10: investing in some companies I think trouble a lot of 595 00:31:27,400 --> 00:31:30,160 Speaker 10: New Yorker pollunteer, for example, I definitely want to talk 596 00:31:30,200 --> 00:31:33,560 Speaker 10: about SpaceX. The current incumbent's been in alimand for forty years. 597 00:31:34,400 --> 00:31:36,480 Speaker 10: He's not known by most of the public, and I 598 00:31:36,480 --> 00:31:39,080 Speaker 10: think it's very concerning. Your previous guest was talking about 599 00:31:39,120 --> 00:31:42,720 Speaker 10: the SpaceX manipulation, which is what I'll call it on 600 00:31:42,840 --> 00:31:45,120 Speaker 10: the Nasdaq on the index. To get into that, that's 601 00:31:45,160 --> 00:31:48,600 Speaker 10: a key investor protection that's being eroded. Current state controller 602 00:31:48,640 --> 00:31:51,000 Speaker 10: is completely silent on that, and we need to change that. 603 00:31:51,160 --> 00:31:54,120 Speaker 8: So, I mean, I want to get into your background 604 00:31:54,320 --> 00:31:57,040 Speaker 8: and how you succeeded as a Democrat in a red 605 00:31:57,080 --> 00:32:01,200 Speaker 8: state previously. But let's wrap this up on SpaceX. Then, 606 00:32:01,240 --> 00:32:03,959 Speaker 8: I mean, it's going to go into the Nasdaq one 607 00:32:04,040 --> 00:32:07,000 Speaker 8: hundred without really any seasoning at all. It's going to 608 00:32:07,080 --> 00:32:13,440 Speaker 8: be float magnified. Essentially, this is a company worth now 609 00:32:13,680 --> 00:32:16,680 Speaker 8: almost three trillion dollars that only has eighty five billion 610 00:32:16,720 --> 00:32:20,160 Speaker 8: dollars in float, and that compares with other companies that 611 00:32:20,160 --> 00:32:23,040 Speaker 8: that level have a trillion dollars in float. What do 612 00:32:23,080 --> 00:32:25,600 Speaker 8: you do as comtroller to try and limit your exposure 613 00:32:25,640 --> 00:32:29,280 Speaker 8: to that because you're going to own I imagine ATFS, 614 00:32:29,320 --> 00:32:31,880 Speaker 8: the cues whatever, and you're going to have it automatically. 615 00:32:32,000 --> 00:32:32,160 Speaker 7: Well. 616 00:32:32,200 --> 00:32:34,520 Speaker 10: Look, even regardless of the exposure of the of the 617 00:32:34,520 --> 00:32:36,760 Speaker 10: penishoners in New York State common the role of the 618 00:32:36,760 --> 00:32:38,760 Speaker 10: New York State controllers should be to go to the 619 00:32:38,760 --> 00:32:41,640 Speaker 10: index funds and sound the alarm bell here. So we 620 00:32:41,760 --> 00:32:44,200 Speaker 10: have had a little bit of comment around the governance 621 00:32:44,200 --> 00:32:47,640 Speaker 10: structure of SpaceX that's gotten very little attention. The fact 622 00:32:47,680 --> 00:32:50,480 Speaker 10: that he can't he's chairman and CEO. You know, I 623 00:32:50,480 --> 00:32:52,080 Speaker 10: would have loved that when I was running my company. 624 00:32:52,200 --> 00:32:54,520 Speaker 5: I mean, Jamie Diamonds chairman and CEO. So all the 625 00:32:54,560 --> 00:32:56,440 Speaker 5: successful ones are right well, but. 626 00:32:56,400 --> 00:32:58,440 Speaker 10: The thing is, there's a lot more fiduciary duties, There's 627 00:32:58,480 --> 00:33:00,600 Speaker 10: a lot more there's a lot more accountable that Jamie 628 00:33:00,640 --> 00:33:04,760 Speaker 10: diamond face, even at even a JP than Elon Muskaz. 629 00:33:04,800 --> 00:33:05,920 Speaker 7: This is his private fiefdom. 630 00:33:06,000 --> 00:33:09,040 Speaker 10: Let's be let's be real here, there's no real accountability 631 00:33:09,040 --> 00:33:12,479 Speaker 10: for his conduct and so and how he runs the company. 632 00:33:12,520 --> 00:33:15,080 Speaker 10: So that's a governance issue. But as far as you're saying, 633 00:33:15,120 --> 00:33:18,320 Speaker 10: is it affects average investors. The State Controller controlling, as 634 00:33:18,320 --> 00:33:20,120 Speaker 10: we were talking about a three hundred million dollars pinchries 635 00:33:20,160 --> 00:33:22,520 Speaker 10: onn should be sounding the alarm belt to the markets 636 00:33:22,560 --> 00:33:26,200 Speaker 10: because there's eighty at least almost one hundred billion dollars 637 00:33:26,480 --> 00:33:29,240 Speaker 10: of New York State taxpayer money that is that are 638 00:33:29,240 --> 00:33:31,720 Speaker 10: in public indexes, that are in the indices. And so 639 00:33:31,960 --> 00:33:33,640 Speaker 10: it is the logical watchdog. 640 00:33:33,800 --> 00:33:33,920 Speaker 7: You know. 641 00:33:34,000 --> 00:33:35,000 Speaker 10: I like to say that I'm going to be the 642 00:33:35,000 --> 00:33:38,680 Speaker 10: affordability watchdog, and that includes investor protections. And so this 643 00:33:38,760 --> 00:33:41,040 Speaker 10: office is a sleep at the switch, is not known 644 00:33:41,240 --> 00:33:43,640 Speaker 10: for being active on this, and this is a logical role. 645 00:33:43,920 --> 00:33:46,160 Speaker 10: And I think you know, in your previous guests mentioned this. 646 00:33:46,160 --> 00:33:47,640 Speaker 10: This is only I think of the canary and the 647 00:33:47,640 --> 00:33:51,840 Speaker 10: coal mine. NASDAQ, you know caved here, the SNP held firm. 648 00:33:51,920 --> 00:33:54,320 Speaker 10: Let's see what happens when these new giant IPOs come. 649 00:33:54,400 --> 00:33:56,320 Speaker 10: I think we're going to see a continued erosion of 650 00:33:56,360 --> 00:33:59,360 Speaker 10: investor protections and that really harms New Yorkers, and it 651 00:33:59,400 --> 00:34:01,600 Speaker 10: harms investor all across the country. And the New York 652 00:34:01,600 --> 00:34:03,560 Speaker 10: State Controller should be a leader on that, and he's not. 653 00:34:04,480 --> 00:34:04,920 Speaker 5: AI. 654 00:34:05,160 --> 00:34:09,560 Speaker 2: It's certainly the front and center issue for Global Wall 655 00:34:09,600 --> 00:34:12,960 Speaker 2: Street over the last several years. Sure, one of the concerns, 656 00:34:12,960 --> 00:34:15,480 Speaker 2: and one of the issues is how do you power 657 00:34:15,520 --> 00:34:19,640 Speaker 2: this thing? How do you electrify this AI revolution? And 658 00:34:19,800 --> 00:34:23,919 Speaker 2: who pays for that? And there's concerns that consumers, through 659 00:34:23,920 --> 00:34:26,480 Speaker 2: their higher electric bills are payings on this. 660 00:34:26,520 --> 00:34:28,000 Speaker 5: How does that work in the state of New York. 661 00:34:28,160 --> 00:34:30,920 Speaker 10: Oh, it's completely broken. I'm really glad you asked that, 662 00:34:31,040 --> 00:34:34,080 Speaker 10: because right now we've got about almost thirty data centers 663 00:34:34,080 --> 00:34:36,800 Speaker 10: that are in the docket. And what you're having is 664 00:34:36,840 --> 00:34:40,640 Speaker 10: actually right left rural urban outrage. Have you seen these 665 00:34:40,640 --> 00:34:42,680 Speaker 10: community meetings where they're saying, what are these data centers? 666 00:34:42,719 --> 00:34:45,040 Speaker 10: I mean any generous tax breaks? I'm going rate payers 667 00:34:45,040 --> 00:34:48,000 Speaker 10: are on the hook for these. There is, you know, 668 00:34:48,160 --> 00:34:50,960 Speaker 10: a small but very powerful commission in Albany, may know, 669 00:34:51,120 --> 00:34:54,720 Speaker 10: called the Public Service Commission that is a rubber stamp 670 00:34:54,760 --> 00:34:57,719 Speaker 10: for these utility companies that come in. Everybody knows the 671 00:34:57,840 --> 00:35:01,480 Speaker 10: utility industry is completely broken. They guarantee a rate of return. 672 00:35:01,760 --> 00:35:03,600 Speaker 10: You know, somebody said that the utility industry is the 673 00:35:03,680 --> 00:35:06,320 Speaker 10: only industry where you're paid to decorate your office because 674 00:35:06,360 --> 00:35:08,360 Speaker 10: the cap X you get a guarantee and rate of return. 675 00:35:08,840 --> 00:35:11,600 Speaker 10: And so I was the first in this race, and 676 00:35:11,640 --> 00:35:13,800 Speaker 10: I have been a very loud critic of these data centers. 677 00:35:13,840 --> 00:35:17,000 Speaker 10: I support the moratorium that just passed the legislature, and 678 00:35:17,120 --> 00:35:19,120 Speaker 10: of course we want to be innovation forward, but the 679 00:35:19,239 --> 00:35:22,560 Speaker 10: last thing we want to do is take is subsidized 680 00:35:22,600 --> 00:35:25,160 Speaker 10: Jeff Bezos, I don't think we need a subsidized elon Musk, 681 00:35:25,480 --> 00:35:27,800 Speaker 10: You and I, we all pay for this stuff, and 682 00:35:28,239 --> 00:35:30,440 Speaker 10: right now are conned bills and national grid bills going 683 00:35:30,520 --> 00:35:31,080 Speaker 10: through the roof. 684 00:35:31,520 --> 00:35:33,600 Speaker 7: Everybody's hacked off about this, and they should be. 685 00:35:34,480 --> 00:35:36,480 Speaker 8: I want to ask how you win as a Democrat 686 00:35:36,600 --> 00:35:38,560 Speaker 8: and you did this in a red state in Kansas, 687 00:35:38,640 --> 00:35:41,440 Speaker 8: not only as a Democrat, but also it's a very 688 00:35:41,480 --> 00:35:44,800 Speaker 8: progressive exactly a progress an anti NRA. I imagine in 689 00:35:44,880 --> 00:35:47,040 Speaker 8: Kansas is a place where they love their at least 690 00:35:47,040 --> 00:35:47,720 Speaker 8: their long guns. 691 00:35:48,080 --> 00:35:49,520 Speaker 7: Yeah, how do you do that? 692 00:35:49,840 --> 00:35:52,840 Speaker 8: I think Democrats as a whole nationally are struggling with this, 693 00:35:53,320 --> 00:35:57,320 Speaker 8: with this question, how do you unify, especially such a 694 00:35:57,400 --> 00:35:58,320 Speaker 8: broad party. 695 00:35:58,640 --> 00:36:00,879 Speaker 10: Well, I think it's very simple act, which is if 696 00:36:00,960 --> 00:36:03,719 Speaker 10: we talk about issues that voters actually care about. The 697 00:36:03,760 --> 00:36:07,640 Speaker 10: Democratic Party lost its way when it became captive of basically, 698 00:36:08,000 --> 00:36:10,239 Speaker 10: you know, a bunch of Beltway consultants. When we talk 699 00:36:10,280 --> 00:36:13,480 Speaker 10: about the affordability crisis, when we talk about lowering utility rates, 700 00:36:13,520 --> 00:36:17,480 Speaker 10: investing in affordable housing, getting for you know, especially demorcrats 701 00:36:17,560 --> 00:36:19,920 Speaker 10: ice out of New York, you know, and that is 702 00:36:19,960 --> 00:36:23,160 Speaker 10: again a not a Democrat. That's a left right consensus 703 00:36:23,360 --> 00:36:25,640 Speaker 10: that we shouldn't be terrorizing Americans. This is not what 704 00:36:25,840 --> 00:36:28,400 Speaker 10: people signed up for. And so that's what people are 705 00:36:28,440 --> 00:36:30,680 Speaker 10: looking for from a Democratic Party. That's why I'm running. 706 00:36:30,880 --> 00:36:33,400 Speaker 10: That's why I often say that we need better Democrats, 707 00:36:33,640 --> 00:36:36,960 Speaker 10: Democrats who fight and who actually reflect our values and 708 00:36:37,640 --> 00:36:39,799 Speaker 10: make life better for the average person. 709 00:36:40,080 --> 00:36:41,280 Speaker 7: They're being rewarded at the battle. 710 00:36:41,280 --> 00:36:42,880 Speaker 8: By the way, Rosh, how do you do it? Let 711 00:36:42,920 --> 00:36:45,239 Speaker 8: me ask you a personal questions. You went to Duke Yes, 712 00:36:45,880 --> 00:36:48,040 Speaker 8: and then you went to Harvard Law. You could be 713 00:36:48,200 --> 00:36:51,960 Speaker 8: minting money, and you went to work for the NAACP 714 00:36:52,200 --> 00:36:53,520 Speaker 8: for public citizen. 715 00:36:53,200 --> 00:36:56,680 Speaker 5: For the ac LU. You have kids, you live in 716 00:36:56,760 --> 00:36:58,040 Speaker 5: New York. It's expensive. 717 00:36:58,800 --> 00:37:00,960 Speaker 10: Well, look, I'm very proud of the fact I appreciate 718 00:37:01,080 --> 00:37:04,600 Speaker 10: you mentioning that I've just always been dedicated to making 719 00:37:04,640 --> 00:37:06,879 Speaker 10: things better. And you know, I did spend some time 720 00:37:06,920 --> 00:37:09,400 Speaker 10: in the private sector because I was fixing bloat and 721 00:37:09,520 --> 00:37:14,000 Speaker 10: corporate waste and legal budgets. And that's in fixing these 722 00:37:14,040 --> 00:37:16,160 Speaker 10: systems is what really animates me. And I think the 723 00:37:16,200 --> 00:37:19,120 Speaker 10: State Compover's office right now is frankly broken and it 724 00:37:19,239 --> 00:37:21,280 Speaker 10: is not relevant to people's concerns. 725 00:37:21,320 --> 00:37:22,960 Speaker 7: People should know about this office. 726 00:37:23,040 --> 00:37:27,200 Speaker 10: Frankly, it should be the national international leader on these issues, 727 00:37:27,280 --> 00:37:30,240 Speaker 10: like on SpaceX investor protections and so on. But instead 728 00:37:30,280 --> 00:37:32,719 Speaker 10: we've got a state comptroller who, frankly is part of 729 00:37:32,760 --> 00:37:36,120 Speaker 10: that Albani a machine forty years up there taking corporate cash, 730 00:37:36,280 --> 00:37:38,160 Speaker 10: super PACs, part of the inside machine. 731 00:37:38,160 --> 00:37:38,759 Speaker 7: We need change. 732 00:37:39,120 --> 00:37:40,080 Speaker 5: Roger, thanks so much for joining. 733 00:37:40,080 --> 00:37:42,600 Speaker 2: I appreciate a rog Goyle candidate for the New York 734 00:37:42,800 --> 00:37:45,560 Speaker 2: State Comptroller in the primary coming up. 735 00:37:45,560 --> 00:37:48,239 Speaker 5: We appreciate getting freemage of your time. 736 00:37:48,440 --> 00:37:53,239 Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify, 737 00:37:53,400 --> 00:37:57,120 Speaker 1: and anywhere else you get your podcasts. Listen live each 738 00:37:57,200 --> 00:38:00,279 Speaker 1: weekday seven to ten am Easter and on bluem Berg 739 00:38:00,360 --> 00:38:04,239 Speaker 1: dot Com, the iHeartRadio app tune In, and the Bloomberg 740 00:38:04,320 --> 00:38:07,680 Speaker 1: Business app. You can also watch US live every weekday 741 00:38:07,719 --> 00:38:10,680 Speaker 1: on YouTube and always on the Bloomberg terminal