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Speaker 1: I'm Charlie Pelotadal the SMP and nezdak Hall Trading lawer.

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Speaker 1: Right now from mid fragile sentiment as traders way the

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Speaker 1: probability of the UK voting to remain in the European

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Speaker 1: Union the day before the referendum, and we are brought

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Speaker 1: Slash E t F SMP five hundred Index down a

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Speaker 1: point at two thousand eighty eight a drop of less

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Speaker 1: than point one percent, nav stack down five a decline

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Speaker 1: of point one percent down, Industrials down thirty two, a

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Speaker 1: drop of two tenths of one percent, Old down four

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Speaker 1: ten the ounce it is a twelve sixty eight to

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Speaker 1: drop of three tents of one percent and crew down

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Speaker 1: fourteen right now. I dropped there of one. I'm Charlie Pellot.

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Speaker 1: That's a Bloomberg business flash. This is taking Stock with

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Speaker 1: Kathleen Hayes and Grim Flox on Bloomberg Radio Facebook. All right,

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Speaker 1: here's the question for our next guest at J. Tendra

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Speaker 1: Warrel is global Internet and consumers electronics analysts Lord Bloomberg.

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Speaker 1: He is, uh, well, I could say that probably the

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Speaker 1: best in the business of Bloomberg Intelligence. He joins us

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Speaker 1: from our Bloomberg nine sixties studio in San Francisco. All Right, Tender,

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Speaker 1: before we get to celebrities and media execs, I gotta

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Speaker 1: just do this question because I don't get it often.

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Speaker 1: What is sixties six sixty d kilometers long and lives

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Speaker 1: under the ocean God. The fiber, Yes, the fiber that

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Speaker 1: Facebook and Microsoft announced that they are going to build

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Speaker 1: in that it's going to connect northern Virginia, it's going

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Speaker 1: to go to Bill Balance in Spain, and it's gonna

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Speaker 1: just give this incredible capacity to Southern Europe. Tell us

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Speaker 1: about that, and then I want you to segue, because

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Speaker 1: of course all the people in Southern Europe are gonna

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Speaker 1: be wanting to look at videos that are going to

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Speaker 1: be sponsored both both of the teams are actually the

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Speaker 1: same overatching issue, which is bandwidth, right, I mean, we

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Speaker 1: want more bandwidth so that all the high resolution video

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Speaker 1: that hogging traffic right now we get to higher speed

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Speaker 1: gateways and and can enable growth that you know, these

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Speaker 1: companies are chasing. So you know, that's what basically spurring

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Speaker 1: these movements. So you know, I must confess that I

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Speaker 1: don't spend a lot of time watching lots and lots

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Speaker 1: of videos online. So it's just so interesting to see

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Speaker 1: that the figures of how many people are doing this

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Speaker 1: now and the potential revenue you can get from it

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Speaker 1: pretty big for Facebook, who's still pretty much a neo

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Speaker 1: fight in this field compared a lot of the others. Yeah,

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Speaker 1: so if you look at digital video advertising versus you know, TV,

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Speaker 1: it's about twelve percent of TVs. It's still a small portion,

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Speaker 1: but it's growing very rapidly. And all the big companies, uh,

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Speaker 1: you know, you have Facebook, Google, you have Twitter, Snapchat.

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Speaker 1: Everybody is sort of pursuing video very very aggressively so

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Speaker 1: that they can you know, still more budgets or diverork

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Speaker 1: more budgets from TV to video. But that's not happening

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Speaker 1: as rapidly as we have thought it would so, and

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Speaker 1: one of the big reasons there's measurements. So it's difficult

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Speaker 1: to sort of measure what the ratings are like across

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Speaker 1: you know, different video types and and what the audiences

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Speaker 1: are like and henceforth. So they're trying to fix those issues.

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Speaker 1: And also getting team inventory at scale is another one.

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Speaker 1: So as and when they are able to crack this code,

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Speaker 1: the opportunity is big for all these players. Well, to

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Speaker 1: Tender tell us about the players in the live streaming

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Speaker 1: video business and how they connect with Facebook. So live

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Speaker 1: video streaming is still nascent right now. I mean it

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Speaker 1: was interesting. I was looking at the survey done by

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Speaker 1: Huntington's post and it's like sund respondents who are saying

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Speaker 1: that they would not use the platform for live video.

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Speaker 1: What's interesting is that, um, you have every big company

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Speaker 1: of Facebook with live streaming. You have Amazon with t Whitch,

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Speaker 1: you have YouTube Live, you have Twitter at periscope, and

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Speaker 1: Snapchat has its own sort of take on the live stories.

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Speaker 1: Everybody's pursuing this, um and right now the leaders is

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Speaker 1: in terms of usage is really Facebook and YouTube alright.

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Speaker 1: To Tender warl thank you so very much for joining

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Speaker 1: us to tender warl is global internet and consumer electronics

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Speaker 1: analysts talking to us about Facebook. There's where he's an

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Speaker 1: expert signing deals with celebrities and media companies for the

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Speaker 1: new Facebook Live. Another big story today from housing was

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Speaker 1: existing home sales the highest level since two thousand seven?

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Speaker 1: Wass driving? And can it continue? Joining us from Riverside,

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Speaker 1: California is Logan Modeshami. He's a senior loan officer at

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Speaker 1: a MC lending group. He also is a well known

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Speaker 1: blogger and tweeter Logan welcome back. Good to be here.

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Speaker 1: So existing home sales way and how did they look

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Speaker 1: to you when you tear them apart? Well, but we're

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Speaker 1: seeing the slow and steady growth and housing as we've

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Speaker 1: seen since the lows of two thousand and fourteen. UH. Internally,

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Speaker 1: the housing market looks a little bit better for existing

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Speaker 1: homes because mortgage buyers are growing and cash buyers are falling,

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Speaker 1: and that's what you want to see in a growing

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Speaker 1: sales market. But again, when you look at in perspective wise,

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Speaker 1: cash buyers are still above historical norms and mortgage demand

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Speaker 1: is roughly back to where it was in interest rates

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Speaker 1: were four percent higher. Tell us about the actual prices

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Speaker 1: of times. Yes, well, prices are going up and prices

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Speaker 1: will continue to go up as long as inventory stays

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Speaker 1: below six months. But again, the housing inflation story is

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Speaker 1: not being properly discussed because, uh, since prices really started

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Speaker 1: to take off, we've never had six months inventory annual

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Speaker 1: months in America outside of a housing bus store recession.

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Speaker 1: So this inflation story is real. But when you adjusted

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Speaker 1: to inflation, home prices are still about twenty below where

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Speaker 1: they were during the housing bubble years adjusted for inflation,

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Speaker 1: housing prices are still twenty below where they were at

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Speaker 1: the height of the bubble. You're saying for at first,

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Speaker 1: so what do you but pricing and affordability, So it's

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Speaker 1: still an issue even so does that work? Rates are low? Well,

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Speaker 1: rates are low, but again the bigger the home, the

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Speaker 1: bigger the debt, the bigger the payment. So even though

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Speaker 1: the nominal interest rates are low, I mean, we look

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Speaker 1: at it in perspective life. We've had the worst mortgage

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Speaker 1: demand curve of ever recorded in US history once you

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Speaker 1: adjust its population. But interest rates have both have been

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Speaker 1: below five percent since two thousand eleven. So the housing

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Speaker 1: affordability issue is much more. Uh, it's much more of

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Speaker 1: an issue than when people are economists to talk about

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Speaker 1: because they use a metric that assumes that every single

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Speaker 1: American has down a starting debts in commercial and basically

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Speaker 1: no revolved in credit card debt. And this is why

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Speaker 1: mortgage demand is roughly where it was back. Part of

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Speaker 1: this is demographics. We're very young, we're very old. Something

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Speaker 1: nobody talks about ever is that primate labor force growth

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Speaker 1: peaked in two thousand and seven and we're slowly growing again.

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Speaker 1: This is one of the reasons why the demand from

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Speaker 1: first time homebuyers is very anemic. It's still ten percent

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Speaker 1: below historical norms. So logan taking all of this together,

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Speaker 1: how would you characterize if someone asks you, from your

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Speaker 1: perspective the performance of the US economy and you know,

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Speaker 1: you can fill it in with federal federal reserve policy

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Speaker 1: and all the things you want, but what what do

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Speaker 1: you come away with? Well, once you adjust things to demographics,

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Speaker 1: a lot of this economic cycle starts to make sense.

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Speaker 1: But if you're not versed in demographic economics, and when

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Speaker 1: I talked about demographic economics and we need young people

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Speaker 1: to come into the marketplace and spend. Japan, Germany, all

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Speaker 1: these countries are very old. Old people don't spend money

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Speaker 1: their net savers. So when you get when you get

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Speaker 1: fifty five and over, you you're not buying homes, You're

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Speaker 1: not buying refrigerators. Young people push you know, economic cycles.

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Speaker 1: We are very big age of seventeen twenty nine in

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Speaker 1: the cycle. That's not going to be anything good for

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Speaker 1: for a mature economy that has a lot of its

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Speaker 1: infrastructure already built out. So the the economic cycle is

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Speaker 1: doing exactly what I thought about. I've been a two

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Speaker 1: percent uh one ten year two percent ten year guy

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Speaker 1: for many years now. Because the demographics in this cycle,

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Speaker 1: we're very old, we're very young, we're lacking in the middle.

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Speaker 1: Of the middle got impacted during the housing bubble year.

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Speaker 1: So the consumption models are actually looking on trend, at

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Speaker 1: least from my perspective. But a lot of people had

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Speaker 1: to be way too high of expectations in this economic cycle,

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Speaker 1: in housing and in the economy in general. So looking

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Speaker 1: uh in your role senior loan officer at AMC Lending

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Speaker 1: Group and we resigned. You know, you've been doing this

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Speaker 1: for several years now. Who's coming through the door. Who's buying?

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Speaker 1: Can they get credit? Are they priced out of the market?

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Speaker 1: Are they saying, hey, there's some good deals out there.

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Speaker 1: What's what's what are you getting from the from the battlefield,

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Speaker 1: from the here here in southern California and Orange County,

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Speaker 1: it is really the cream of the crop. You know,

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Speaker 1: people here make money. So the people that are coming

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Speaker 1: to buy, uh, have good incomes, have enough down payment. Again,

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Speaker 1: I'm I'm somebody that believes tight lending is not an issue.

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Speaker 1: It is a fabricated myth. We've had low down payment,

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Speaker 1: low cycle loans this entire cycle since two thousand eight,

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Speaker 1: poor cash flow Americans don't buy homes. Okay, So it's

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Speaker 1: it's the it's the reverse of what Mark Sandy and

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Speaker 1: Loye Goodman try to tell everyone. But banks are lending

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Speaker 1: to capacity, not lending two people who can't afford at

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Speaker 1: home anymore. So, Uh, it's it's not a surprise that

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Speaker 1: mortgage demand is is this low because again, dual income

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Speaker 1: housing is a must in this cycle with the price

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Speaker 1: inflation we have, that's what that's a story that will

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Speaker 1: happen in years twenty four. So the people are coming

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Speaker 1: near to buy in Orange County. They can buy. They're

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Speaker 1: they're good. I don't I don't see too many struggling

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Speaker 1: cash for Americans try to buy. These people are struggling

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Speaker 1: with their rent inflation. The last thing they were thinking

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Speaker 1: about is actually to buy a home, especially where prices

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Speaker 1: are at this level. When you talk about prices at

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Speaker 1: that level, just quickly ten seconds, what kind of level

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Speaker 1: are you talking about? Well, I can tell here at

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Speaker 1: my condo and Irvine, it's going for six five thousand.

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Speaker 1: My parents have been trying to sell their two million

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Speaker 1: dollar home and they finally got an offer at one

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Speaker 1: point seven seven five million. So it's expensive here in

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Speaker 1: southern California. It's it's no country for first time home

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Speaker 1: buyers in this area. Thank you very much. Logan Motas Shami.

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Speaker 1: He is a senior loan officer a MC lending group

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Speaker 1: in Irvine, California. You're listening to taking Stock on Bloomberg

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Speaker 1: radioh