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

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

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

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

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Speaker 1: us live on YouTube.

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Speaker 2: He's got a huge impact on American economics. Tour duty

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Speaker 2: at Deutsche Bank of Great Acclaim and then wandered over

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Speaker 2: to Apollo Global Management to brief the troops there on

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Speaker 2: a not even a daily basis, almost an hourly basis.

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Speaker 2: His morning short, three paragraph note is a must read

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Speaker 2: on Global Wall Street. Torsten Sluck joins, this morning, what'd

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Speaker 2: you write this morning? So?

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Speaker 3: What was this morning? Oh? This was about what has

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Speaker 3: happened after Liberation Day? And two things have happened after

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Speaker 3: Liberation Day. This is just an observation naming that if

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Speaker 3: you look at the weekly data for contensus earning expectations,

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Speaker 3: they have come down quite significantly, both for Q two

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Speaker 3: and Q three for this and P five hundred. So

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Speaker 3: the first thing that has happened is a downward revisions

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Speaker 3: to earnings. The second thing that has happened is that

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Speaker 3: we normally have a very tight colation between correlation between

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Speaker 3: interest rates and the dollar, and that correlation actually also

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Speaker 3: broke down after Liberation Day. So now the dollar is

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Speaker 3: trading not so much on interest rates but on other factors.

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Speaker 2: Yeah, and Pacific rim dynamics. We'll get into that later

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Speaker 2: on the show. Folks, some of those currencies continue painful.

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Speaker 2: This morning, Janahatsias, the Goldman Sachs publishes out on an

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Speaker 2: inventory dynamic at two percent plus Q two GDP, do

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Speaker 2: you see like a normal growth for this second quarter?

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Speaker 3: What is very unusual about the second quarter is that

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Speaker 3: we're coming from a place where we had significant front

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Speaker 3: loading of purchases among consumers, and we had significant inventory

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Speaker 3: build among corporates simply because people were preparing for April second,

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Speaker 3: which happens to be the second day in the second quarter,

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Speaker 3: namely when tariff, of course began to cut kick in.

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Speaker 3: So the conclusion is there are some fairly significant bumps

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Speaker 3: when it comes especially to the inventory part of GDP

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Speaker 3: and to the import part of GDP in the first

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Speaker 3: and the second quarter.

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Speaker 4: On the consumer confidence basis, we're seeing consumer confidence get

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Speaker 4: hit as a result of tariff policy. Still though in

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Speaker 4: the hard data we're not necessarily seeing it hit there,

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Speaker 4: when do we see it hit?

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Speaker 3: So Barclays yesterday had a very important note that looked

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Speaker 3: just like several others at the high frequency data, and

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Speaker 3: what they are seeing in the daily data is that

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Speaker 3: we're beginning to see a slow down for high end consumers,

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Speaker 3: especially when it comes to airline bookings, hotel reservation, recreational

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Speaker 3: travel more broadly, and also higher end durable goods. So

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Speaker 3: one way of looking at this is that you should

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Speaker 3: ultimately expect to see, especially those that are now impacted

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Speaker 3: by the stock market correcting, you should begin to see

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Speaker 3: them begin to slow down their consumer spending. And that

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Speaker 3: is exactly what the data is show. So yes, it

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Speaker 3: is still early in terms of when tariffs were implemented,

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Speaker 3: with still only a few weeks in. But the longer

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Speaker 3: this shock persists, the higher is the risk of course

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Speaker 3: that this is going to drag down also hot data, what.

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Speaker 4: Is the risk there? I mean, I mean contextualize this

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Speaker 4: for us because the president yesterday we heard from Bill Ackman.

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Speaker 4: You said, okay, I want to see one hundred and

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Speaker 4: eighty day pause. Now I want to see this ninety

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Speaker 4: day pause extended to one hundred and eighty days. At

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Speaker 4: what point, in your view do you see the damage

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Speaker 4: from these policies actually becoming something that's entrenched rather than temporary.

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Speaker 3: Well, and that's a very important question toom because what

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Speaker 3: I think is going on is that companies are actually

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Speaker 3: already responding to turiffs. And what do I mean by that, Well,

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Speaker 3: if you look at the surveys from the regional fits,

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Speaker 3: they are showing the new orders is collapsing. Excuse me,

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Speaker 3: they're showing that kapex plans are collapsing, and they're showing

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Speaker 3: that prices paid are going up. This is the definition

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Speaker 3: of taflation. That means that there's going to be slower sales,

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Speaker 3: that's going to be more increasing prices. And this is

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Speaker 3: happening on the corporate side. Consubas have not quite yet

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Speaker 3: seen this, but it's coming. Especially with the significant slowdown

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Speaker 3: in the number of containers coming from Chinese to the US.

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Speaker 3: That means that the inventory will in the next few weeks,

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Speaker 3: in my view, we will begin to see emptyholves. I

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Speaker 3: don't even know how we're having this discussion. Of course,

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Speaker 3: if we get normally thirty thousand containers from China coming

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Speaker 3: in and were no longer get Thirsdy and thirty thousand

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Speaker 3: containers from China coming in. Of course we'll begin to

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Speaker 3: see MPT sholves. Sin stoll Is.

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Speaker 2: Tim mentioned some Centovic folks sent for Paul Sweeney's and

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Speaker 2: they Tim mentioned there's a rationalization going out among the

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Speaker 2: leads over t tariff theory.

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Speaker 5: You and I read Ricardo cover to cover. There's no rationalization.

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Speaker 2: Either tariff theory of a pseudo McKinley doesn't work, or

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Speaker 2: you believe it it's gonna work.

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Speaker 5: There's no in between, right.

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Speaker 3: And that's why. And in some sense you could take

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Speaker 3: exactly of this, as in the model that you and

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Speaker 3: I would have talked about for years, Tom, that if

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Speaker 3: this shock is temporary and if it lasts a week,

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Speaker 3: we would all say, okay, this was a week. Now

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Speaker 3: we go back to normal, right, but give it this

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Speaker 3: shock as one hundred fort five percent, and so far

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Speaker 3: it feels quite permanent. We will say, well it's permanent.

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Speaker 3: You got to adjust to a new equilibrium and that

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Speaker 3: new equlibrium. It will have the consequence that prices are

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Speaker 3: higher and sales are low.

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Speaker 5: Well, what's a shift? Can I go Nerd right now?

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Speaker 4: Please go Nerd?

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Speaker 5: Kruman we're going.

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Speaker 2: Wank right now, there's a dead weight loss in this

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Speaker 2: Euclidean calculus. Exactly there's a shift who allocates the dead

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Speaker 2: weight loss policy or brute economics.

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Speaker 3: So exactly when that dead weight loss has to be allocated?

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Speaker 3: The very important simple way of thinking about that is

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Speaker 3: that does that have to be allocated to firms taking

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Speaker 3: a decline in their earnings or does it have to

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Speaker 3: be instead allocated to consumers basically facing higher prices. So,

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Speaker 3: put in very plain english, the container arrives in Los Angeles,

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Speaker 3: someone needs to pay the tariff. Is that tariff now

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Speaker 3: passed one hundred percent unto consumers? Is it passed fifty

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Speaker 3: percent unto consumers? Is it only past twenty five percent

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Speaker 3: unto consumers? So companies will take a hit on their

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Speaker 3: earnings if it's not passed on one hundred percent to consumers.

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Speaker 3: So that weight laws, that cost of higher teriffs has

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Speaker 3: to be born by someone, and if it is not corporates,

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Speaker 3: it will ultimately be the consumer.

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Speaker 4: I mean, it seems politically companies don't want to be

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Speaker 4: public about increasing prices as a result of these tariffs.

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Speaker 3: So would you.

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Speaker 4: Argue that at this point it looks like companies are

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Speaker 4: going to absorb this or they're going to try to

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Speaker 4: pass it along to consumers in a way that's not

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Speaker 4: necessarily prominent.

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Speaker 3: So that's why one way of answering that question is

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Speaker 3: to simply look at what a company is actually doing.

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Speaker 3: And for example, from the Dallas Fit, the Field del

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Speaker 3: f Fit, the New York FED, the Cancer City FED,

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Speaker 3: the price is paid component, in other words, what a

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Speaker 3: company is saying in terms of what is the price

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Speaker 3: that I'm paying for goods that are inputs in my production.

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Speaker 3: And if they answer is price is paid is growing

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Speaker 3: up and that the moment price is paying is skyrocketing

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Speaker 3: because company is saying I'm paying more. And if I'm

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Speaker 3: paying more, then I'm saying in this survey from the FAT,

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Speaker 3: the prices are going up. So that's not a political

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Speaker 3: discussion or political statement, it's just the facts that companies

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Speaker 3: are saying they're paying more. So as a result of that,

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Speaker 3: we should expect it happens to be the case when

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Speaker 3: that together with the CPI inflation, that that will be

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Speaker 3: lifting inflation eventually.

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Speaker 5: Let's shift to the FED meeting.

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Speaker 2: For those of you on your community crass nation, what

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Speaker 2: a joy with apollowed Global Management. Turston slock with us,

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Speaker 2: good morning on YouTube. Thank you so much for the

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Speaker 2: interest in YouTube. Really really appreciate it. It's sort of

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Speaker 2: like a new media for me and it's winning. I

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Speaker 2: mean for stun of it. It was like, you know, yeah,

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Speaker 2: we can do YouTube.

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Speaker 3: Right YouTube. You're twenty years old at this more.

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Speaker 5: What does a cappuccino cost in Brooklyn?

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Speaker 3: Probably about five.

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Speaker 5: Five bucks and maybe you stretch out to eight bucks

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Speaker 5: for something.

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Speaker 4: We Earnest Torston knows he's a Brooklyn guy.

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Speaker 3: Are you a Brooklyn guy too, Brooklyn Heights?

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Speaker 5: You know, Lisa, we are just you guys.

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Speaker 3: Are you guys are out numbers Brooklyn?

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Speaker 6: They don't have the cappuccino in Brooklyn. They have the

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Speaker 6: flat white.

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Speaker 3: Is that not correct?

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Speaker 5: Correct?

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Speaker 2: We got to get to the FED meeting because we

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Speaker 2: have to talk to Touriston about the parliamentary crisis in Germany

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Speaker 2: as well. I'm calling this FED meeting the ex post

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Speaker 2: squared meeting, and that I got two ex posts. I

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Speaker 2: got a massive weight to see what inflation will do,

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Speaker 2: and at the same time I got a separate, discrete

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Speaker 2: massive weight to see what labor will do. Are they

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Speaker 2: summed are they discrete or is one more important than

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Speaker 2: the other?

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Speaker 3: Absolutely, because if you look back, including on the employment

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Speaker 3: report last Friday, things are not that bad. In the

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Speaker 3: hot data, it looks like things are still okay, So hey,

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Speaker 3: why should the Fed change anything? But when you look

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Speaker 3: forward and you begin to worry about containers coming in

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Speaker 3: is collapsing. If you look at also all the stresses

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Speaker 3: in trucking earnings in this earning season. If you look

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Speaker 3: across the bond and the anecdotes coming from Southwest Airlines

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Speaker 3: saying we're already in a recession, she totally is saying

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Speaker 3: that traffic is weaker, PepsiCo saying that snack sales are weaker.

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Speaker 3: Across the board, a lot of the forward looking indicators,

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Speaker 3: including the fact that companies are not providing forward guidance,

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Speaker 3: are telling you a very different story. So to your point, Tom,

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Speaker 3: if you begin to think about what this means for

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Speaker 3: the FAT, it does imply that the backward looking and

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Speaker 3: the rear mirror eraror picture here is looking very different

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Speaker 3: from if you look through the front mirror here, where

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Speaker 3: things look much weaker.

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Speaker 4: So from a policy perspective, or at least from a

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Speaker 4: communications perspective, how does JA Powell thread that needle tomorrow?

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Speaker 4: For the American public.

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Speaker 3: I think he will continue to look backwards and say, hey,

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Speaker 3: the data is actually still okay, the economy is still

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Speaker 3: performing fine. The th repult was actually okay. Inflation has

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Speaker 3: not really started moving up, so we are still in

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Speaker 3: weight and see mode. The biggest risk, of course, is

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Speaker 3: that if corporate America really is frozen as a result

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Speaker 3: of uncertainty, then the quick question is what comes after frozen?

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Speaker 3: And of course the fear is that after frozen comes recession.

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Speaker 3: So then J. Powell is called in this difficult dilemma

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Speaker 3: of saying, hey, if I look back, everything looks fine.

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Speaker 3: But if I look ahead and I know that things

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Speaker 3: are frozen on the corporate side, the risk a frozen

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Speaker 3: is going to create a drop off in the economy.

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Speaker 5: People don't know.

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Speaker 2: It's because we cut away from it at the end

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Speaker 2: of the press conference. But at the end of the

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Speaker 2: press conference they always sing kumba ah do that.

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Speaker 5: And this year they're gonna say this, this meeting, they're

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Speaker 5: gonna sing a let of go.

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Speaker 4: Is that why I see Michael McKee practicing.

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Speaker 2: Practicing You know this week it's going to let it

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Speaker 2: go go.

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Speaker 4: Please frozen, the frozen reference for everybody in the cheap

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Speaker 4: seats hey tourist in Okay. If we think about the

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Speaker 4: FED moving forward from a policy perspective, stagflation is the

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Speaker 4: sort of the worst case scenario here. And what we've

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Speaker 4: learned is they essentially have to say, okay, when it

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Speaker 4: comes to the dual mandate, we have to decide what's

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Speaker 4: more important. Is more important attacking prices or is it

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Speaker 4: attacking employment? What do you see moving forward? If we

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Speaker 4: do enter a stagflationary environment.

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Speaker 3: That's absolutely right, tim and we are absolutely in stackflation.

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Speaker 3: If you look at the quantifications from the Yale Budget

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Speaker 3: lab from the pen Warton Budget Model, from the Text

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Speaker 3: Foundation from the Pierce Institute, they find that inflation over

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Speaker 3: the next twelve months will go up by one percentage point.

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Speaker 3: So if we have inflation going up, they FETCH would

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Speaker 3: be hiking. But if at the same time we have

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Speaker 3: less economic activity, the FETCH would be cutting. So executory

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Speaker 3: point which one is what's really most interesting also about

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Speaker 3: this discussion is that the dot plot is actually revealing

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Speaker 3: that they're leaning towards looking at growth, because the dot

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Speaker 3: plot is saying that the next move is a cut.

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Speaker 3: So if that's the case, we have our answer right

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Speaker 3: there that they're fed things that in a stackflation scenario,

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Speaker 3: the focus should be on growth. And that's of course

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Speaker 3: where the author pans and the pul Volca discussions will

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Speaker 3: come in, because is that a mistake if inflation is

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Speaker 3: not to go Remember a Copeca today's two point eight

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Speaker 3: and if we add one percent of that we get

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Speaker 3: to three point eight. Can you pee counting if inflations

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Speaker 3: will go up to to three point eight? That gets

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Speaker 3: a really really complex decision.

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Speaker 5: Can we do a surveillance audible?

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Speaker 3: Let's do a surveillance.

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Speaker 5: We'll now doing audible for those of you. Good afternoon

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Speaker 5: in Europe. I was flabber guested towards the slock.

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Speaker 2: I can take long nominal GDP in Italy and make

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Speaker 2: the statement Italy's gone nowhere in a decade or fifteen years.

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Speaker 2: I was thunderstruck it the household networth, not poverty, but

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Speaker 2: lassitude of Germany and that they don't own equities, they

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Speaker 2: don't own this, they don't own real estate.

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Speaker 5: I was.

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Speaker 2: I don't think our listeners in America understand the lack

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Speaker 2: of wealth creation in Germany.

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Speaker 3: Am I right, as you know. I'm from then, Michael.

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Speaker 3: Originally I did wait for a Jolemen bank for fifteen years.

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Speaker 3: But you're absolutely right. There's some very very important differences

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Speaker 3: between household net worth in Germany and in the US.

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Speaker 3: In the US, there's a significant allocation, of course to

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Speaker 3: your home and also to your stock market portfolio, either

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Speaker 3: through your four one K or through direct holdings of equities.

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Speaker 3: In Germany that's really different. All your equities and all

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Speaker 3: your fixed income is held by an institution named a

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Speaker 3: pension fund, So that means that there is a different

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Speaker 3: relationship to financial markets. There's a different relationship into interest rates,

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Speaker 3: and likewise in the housing market. A lot of people

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Speaker 3: in the housing market are rent us, so they don't

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Speaker 3: own the homes. So that's why the way you think

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Speaker 3: about assets, both financial assets and housing assets is very

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Speaker 3: different in Germany relative to what is in the US.

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Speaker 4: I want to know about an economic indicator that I

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Speaker 4: think we should invent here, Tom. I get a text

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Speaker 4: message last Friday morning from a friend of mine, former colleague,

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Speaker 4: works at a mainstream publication. It's not a business publication.

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Speaker 4: It says, do you have Torsten Slocks contact information? Where

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Speaker 4: are we in the economic cycle when these are the

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Speaker 4: guys who are looking for touristed they are you know,

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Speaker 4: they are looking for tortona, a crisis.

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Speaker 2: And end of the FED meaning let's remember the vix

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Speaker 2: is on a twenty five level as well.

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Speaker 5: Post miracle, is there a new Germany or just a

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Speaker 5: Germany that doesn't know itself?

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Speaker 3: There is absolutely a new Germany. It is very very

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Speaker 3: important the decision that was made now about a month

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Speaker 3: or two ago, where the German government decided to spend

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Speaker 3: five hundred billion on infrastructure and unlimited on defense. I

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Speaker 3: mean unlimited. That's a pretty big amount. That's a very

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Speaker 3: significant sale win to growth for the next several years.

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Speaker 5: I gotta get this in Focus land Out.

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Speaker 2: The morning after Putin I called him up, I begged

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Speaker 2: him to come on Focus land Out. Led with the

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Speaker 2: fiscal stimulus of Europe that had to come, he stated,

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Speaker 2: Europe finally has to grow up and start popping nomenal

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Speaker 2: GDP is it there now?

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Speaker 3: And in that sense, it's very very important that because

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Speaker 3: we both have the US now slowing down for a

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Speaker 3: number of different reasons, but partly because of the way

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Speaker 3: the trade will has been implemented. But at the same time.

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Speaker 3: We now have Europe beginning to accelerate. Normody in FX,

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Speaker 3: there's only one part of the leg of the trade

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Speaker 3: that's moving, but here you actually had both pots moving

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Speaker 3: at the same time. So that's why my tail when

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Speaker 3: coming to European growth at the same time while the

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Speaker 3: US is slowing down.

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Speaker 5: This is great. Sorry Peter Fisher years ago.

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Speaker 2: Torston, for those of you on radio, Tourst's land in

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Speaker 2: a Luftanza airplane at Frankfurt.

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Speaker 5: Here he's got his hands out and all that. You

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Speaker 5: see it on YouTube. On radio, it doesn't play, but

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Speaker 5: we'll just make it up as we go. Turston's luck.

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Speaker 2: Thank you so much for joining us today the extended

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Speaker 2: conversation to get things going as well.

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Speaker 5: He is with Apollo Global Management.

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

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

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

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Speaker 1: watch us live on YouTube.

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Speaker 2: Jeffrey Rosenberg joins us out of Tepper Carnegie Mellon and

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Speaker 2: of course all of his great work at Blackrocker. Are

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Speaker 2: thrilled we could get a Prefred brief here this morning.

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Speaker 2: I guess it's gospel out of Carnegie Mellon this distinction

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Speaker 2: between risk and certainty, Jeff Rosenberg explain the difference between

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Speaker 2: risk and I'm trying to measure it and the unmeasurable

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Speaker 2: uncertainty discussed that.

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Speaker 7: Yeah, Yeah, I mean it's it's Frank Knight uncertainty. And

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Speaker 7: the difference is risk, which we study a lot, you know,

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Speaker 7: proxy with standard deviation of returns, is you know, some

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Speaker 7: way of measuring it, and Frank Knight uncertainty is just

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Speaker 7: unmeasurable uncertainty. And I think, yeah, that's what we're dealing

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Speaker 7: with with the with the policy uncertainty, trade and tariff uncertainty.

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Speaker 7: It's really unmeasurable. And so we're you know, having a

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Speaker 7: nice little rebound from the April you know, Liberation Day surprises,

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Speaker 7: and you know, we're we're not out of the woods

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Speaker 7: in terms of the uncertainty here. And that's that's it's

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Speaker 7: it's tough to measure, and that's what that kind of

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Speaker 7: academic concept captures.

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Speaker 2: Jeff Rosenberg, You and I have an acclaim for Ian

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Speaker 2: Lingoln and BMO capital market. He has a vector after

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Speaker 2: all of this towards disinflation for a ten year full

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Speaker 2: faith and credit that goes from a four point thirty

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Speaker 2: ish to a three sixty five ish. Do you agree

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Speaker 2: that a disinflation vectors in place or is that just

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Speaker 2: there's just not enough information to come up with that call.

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Speaker 7: You know, I think there's just a lot of confounding

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Speaker 7: factors there when you try to map disinflation into yield movements,

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Speaker 7: and which yield movements are we talking about, because you know,

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Speaker 7: if we're talking about kind of a growth scare in

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Speaker 7: the context of tariffs, it's it's tough to see the

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Speaker 7: initial disinflationary about. It's more looking inflationary. And I think

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Speaker 7: that's part of this kind of unmeasurable uncertainty here. And

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Speaker 7: if it is measurable, it's really about this, and we're

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Speaker 7: going to hear about this tomorrow. It's about the tension

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Speaker 7: between kind of the growth slowdown impact from tariff and

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Speaker 7: uncertainty and the inflationary impact. And yes, it may be transitor.

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Speaker 7: It'll be interesting to see if he uses that word.

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Speaker 7: Quite a loaded word given our history to describe the

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Speaker 7: terror of impact on inflation. But you could get through

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Speaker 7: the first order round of place increases and come out

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Speaker 7: the back of it with more of an economic slowdown

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Speaker 7: that becomes kind of overall DIT's inflation area. I think

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Speaker 7: that would be actually an easier playbook because it's a

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Speaker 7: more familiar playbook and it doesn't press on the conflict

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Speaker 7: between the dual mandate that is so much in focus today,

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Speaker 7: and I think it'll be the focus of tomorrow's Q

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Speaker 7: and A about you know, there's a very unfamiliar situation

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Speaker 7: where the FED is navigating between conflicting objectives inflation and growth.

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Speaker 2: That's why Tim I'm calling it x post squared. That's

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Speaker 2: it's like two strands of ex post which do we

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Speaker 2: weigh down in a conflicted really.

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Speaker 4: Captures So let's add that to the econ one on

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Speaker 4: one textbook.

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Speaker 5: I would.

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Speaker 4: The medium chef, I'm wondering about the what's in right now?

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Speaker 4: From your view? Do you think the uncertainty of the

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Speaker 4: situation is actually priced in? Given that we saw at

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Speaker 4: least on the equity side, nine days of gains uh

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Speaker 4: in a row interrupted yesterday.

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Speaker 7: Yeah, It's it's really an interesting, you know question, because

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Speaker 7: what's was priced in? They you know, at the beginning

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Speaker 7: of April, right after the first round of announcements was

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Speaker 7: obviously a very negative reaction. Uh, you know, and and

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Speaker 7: we've unwound that, and we've more than unwounded and and

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Speaker 7: and equities across many indices and measures have kind of

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Speaker 7: rebounded and they're above their their April lows. The dollar

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Speaker 7: is not. So that's kind of interesting. That's the piece

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Speaker 7: that is is kind of hung out here with still

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Speaker 7: a little bit of risk premium in it. But you

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Speaker 7: can't really look at with his rebounded markets and say, well,

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Speaker 7: we're really pricing anything then, And uh, you know, that's

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Speaker 7: in the initial kind of reaction. If you take a

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Speaker 7: little bit longer framework and you look at, you know,

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Speaker 7: what's price in, you know, go back to kind of

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Speaker 7: the pre election market pricing in a Trump win, and

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Speaker 7: what you had was basically from kind of September all

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Speaker 7: the way through to about mid February, a real Trump

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Speaker 7: growth premium that was priced in. And what we unwound

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Speaker 7: effectively is we kind of unwound the Trump growth premium.

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Speaker 7: You know, we priced in a lot more kind of

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Speaker 7: bad left tail outcomes in terms of recession that we've

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Speaker 7: kind of priced out. So now you look at where

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Speaker 7: we're sitting and It's kind of like we've just unwound

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Speaker 7: the Trump growth premium, but we haven't priced in anything

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Speaker 7: in terms of what you've seen in economic forecasts and

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Speaker 7: recession odds going up. Not really priced into anything in

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Speaker 7: the capital market.

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Speaker 2: Jeffrey Rosenberg with us and continues with us. He is

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Speaker 2: with Blackrock this morning. Good morning on your commute decrastination,

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Speaker 2: Android Auto, Good morning hearing more and more about the

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Speaker 2: Google technology that they're using everyday. Good morning on Apple

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Speaker 2: card Play as well, various exem Thank you for listening

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Speaker 2: and Spotify much more around the world than I ever

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Speaker 2: could think too.

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Speaker 4: Jeffrey Rosenberg. We spoke, as Tom said earlier to Apollo

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Speaker 4: or to Torston Slaka over at Apollo earlier today, and

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Speaker 4: we asked them specifically about what the Federal Reserve is

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Speaker 4: going to be considering today and then tomorrow when we

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Speaker 4: hear from Jay Powell. How do you look at how

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Speaker 4: they thread that needle communicating not just to businesses and

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Speaker 4: two Americans that you know they're really watching not just

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Speaker 4: the soft consumer sentiment data but also the stronger than

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Speaker 4: I think a lot of people expected, hard data that

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Speaker 4: we continue to see.

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Speaker 7: Yeah, and I'm not sure Towrston wrote about this or

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Speaker 7: certainly people are talking about the kind of typical pattern

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Speaker 7: when you get a shock to the system like the

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Speaker 7: one that we had, is the soft survey based data

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Speaker 7: starts to erode reflective of that shock on more of

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Speaker 7: a forward looking basis, because you're asking people in real time,

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Speaker 7: what are your expectations going forward that erodes before the

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Speaker 7: hard data does. Now, what we're coming off of here,

439
00:21:08,240 --> 00:21:12,040
Speaker 7: of course, is that following the soft data in the

440
00:21:12,040 --> 00:21:14,600
Speaker 7: most last in the most recent decline in soft data

441
00:21:14,680 --> 00:21:17,000
Speaker 7: was a really bad you know, strategy, because the soft

442
00:21:17,040 --> 00:21:19,719
Speaker 7: data ended up not being validated in the hard data.

443
00:21:19,800 --> 00:21:22,680
Speaker 7: So we have this period in time. It's typical where

444
00:21:22,720 --> 00:21:25,040
Speaker 7: you have the break between soft data and hard data.

445
00:21:25,080 --> 00:21:26,520
Speaker 7: And now what we're going to look for and what

446
00:21:26,560 --> 00:21:28,919
Speaker 7: the FED we'll talk about is does it show up

447
00:21:28,960 --> 00:21:31,600
Speaker 7: in the hard data. What's critical for FED policy is

448
00:21:31,680 --> 00:21:34,719
Speaker 7: they're not going to be forecast dependent here. They're not

449
00:21:34,760 --> 00:21:38,240
Speaker 7: going to forecast and move policy based on the soft data.

450
00:21:38,240 --> 00:21:42,360
Speaker 7: They're going to wait, and by waiting, they will be late,

451
00:21:42,440 --> 00:21:44,880
Speaker 7: and they're going to be happy to be late. Well,

452
00:21:45,080 --> 00:21:47,200
Speaker 7: whether financial markets are happy that they're late, that'll be

453
00:21:47,200 --> 00:21:47,840
Speaker 7: a different question.

454
00:21:48,119 --> 00:21:50,960
Speaker 5: Could you make a dot on a dot plot right now?

455
00:21:53,760 --> 00:21:56,159
Speaker 7: Well, you know they have to kind of make the

456
00:21:56,200 --> 00:21:58,560
Speaker 7: dot on dot plot. It'll be interesting to see how

457
00:21:58,600 --> 00:22:02,199
Speaker 7: those those e al. But again it's this kind of

458
00:22:02,200 --> 00:22:04,399
Speaker 7: difficulty of you know, waiting for the data.

459
00:22:04,440 --> 00:22:05,440
Speaker 5: So, yeah, I'm old enough.

460
00:22:05,520 --> 00:22:07,879
Speaker 2: Jeff Rosenberg, young turk that he is, and Tim at

461
00:22:07,960 --> 00:22:08,840
Speaker 2: least they have no clue.

462
00:22:08,840 --> 00:22:09,199
Speaker 5: Folks.

463
00:22:09,440 --> 00:22:11,880
Speaker 2: We used to sit in like second grade and there'd

464
00:22:11,920 --> 00:22:14,840
Speaker 2: be an air raid siren, like, you know, five blocks away,

465
00:22:15,119 --> 00:22:17,840
Speaker 2: and you'd have to practice getting under your desk because

466
00:22:18,280 --> 00:22:18,919
Speaker 2: that's what you did.

467
00:22:19,680 --> 00:22:21,600
Speaker 5: And then, yeah, Jeff.

468
00:22:21,400 --> 00:22:24,160
Speaker 8: Rose or Tom, I'm actually old enough for that, really exactly,

469
00:22:24,800 --> 00:22:28,879
Speaker 8: Jeff Rosenberg, duck and cover in the yield portfolio of

470
00:22:28,960 --> 00:22:31,640
Speaker 8: our clients that don't want to own Nvidia.

471
00:22:32,119 --> 00:22:33,960
Speaker 5: I mean, how do you duck and cover? The only

472
00:22:34,000 --> 00:22:36,320
Speaker 5: thing you do is buy money market funds, right.

473
00:22:37,280 --> 00:22:39,680
Speaker 7: Well, you can do some other thing. It's a great analogy,

474
00:22:39,920 --> 00:22:42,120
Speaker 7: Tom Duckett, I may have to use that duck and cover.

475
00:22:42,160 --> 00:22:44,280
Speaker 7: Where do you duck and cover in your fixed income portfolio?

476
00:22:44,280 --> 00:22:46,560
Speaker 7: I mean the big thing, and this is what we've

477
00:22:46,560 --> 00:22:48,640
Speaker 7: been harping on for a long time. We call it,

478
00:22:48,800 --> 00:22:51,240
Speaker 7: you know, the new conundrum, right, The new conundrum is

479
00:22:51,280 --> 00:22:54,320
Speaker 7: sort of the old conundrum was green Span was raising

480
00:22:54,400 --> 00:22:57,560
Speaker 7: rates and long term rates were falling. Now the new

481
00:22:57,600 --> 00:23:02,080
Speaker 7: conundrum is the opposite direction. Powell maybe cutting rates, saw

482
00:23:02,160 --> 00:23:04,639
Speaker 7: this last year cutting rates in the short end, long

483
00:23:04,760 --> 00:23:08,600
Speaker 7: term rates going up. So this disconnect in long term

484
00:23:08,640 --> 00:23:12,120
Speaker 7: interest rates don't necessarily follow the Fed's short term interest

485
00:23:12,200 --> 00:23:14,720
Speaker 7: rates in this environment, and that's one of the consequences

486
00:23:14,760 --> 00:23:17,040
Speaker 7: of stagflation. So for Duck and cover, what does it

487
00:23:17,080 --> 00:23:19,360
Speaker 7: mean for your portfolio? It means you got to really

488
00:23:19,359 --> 00:23:22,119
Speaker 7: be careful about thinking where in the fixed income market

489
00:23:22,160 --> 00:23:25,399
Speaker 7: am I getting the protection of my desk in the

490
00:23:25,400 --> 00:23:28,240
Speaker 7: elementary school? Where am I getting protection in my portfolio

491
00:23:28,280 --> 00:23:30,199
Speaker 7: the fixed inco market. It may not be in the

492
00:23:30,240 --> 00:23:32,440
Speaker 7: back end the way it was when you had that,

493
00:23:32,600 --> 00:23:36,199
Speaker 7: you know, to the earlier question, the clear disinflationary alignment

494
00:23:36,920 --> 00:23:39,360
Speaker 7: for monetary policy. So you can kind of hide out

495
00:23:39,359 --> 00:23:41,360
Speaker 7: in the front end, you know, cash, you can move

496
00:23:41,359 --> 00:23:44,320
Speaker 7: out the curve a bit. Two years, five years, you know,

497
00:23:44,359 --> 00:23:47,920
Speaker 7: we looked for alternative forms of diversification, ways of engineering

498
00:23:48,280 --> 00:23:51,720
Speaker 7: negative correlation, and we like that in our strategies. So

499
00:23:51,800 --> 00:23:54,080
Speaker 7: you got to be a little bit more kind of

500
00:23:54,119 --> 00:23:57,639
Speaker 7: forward looking not backward looking playbook that the long end,

501
00:23:57,680 --> 00:23:59,520
Speaker 7: the thirty year is going to be a great heads here.

502
00:24:00,320 --> 00:24:01,919
Speaker 4: I want to be backward looking a little bit and

503
00:24:01,960 --> 00:24:04,720
Speaker 4: go to a month ago when everybody was really, you know,

504
00:24:04,760 --> 00:24:06,960
Speaker 4: for lack of a better term, freaking out about what

505
00:24:07,000 --> 00:24:10,280
Speaker 4: the bond market was doing. I believe the President said

506
00:24:10,280 --> 00:24:14,440
Speaker 4: that bond market got a bit quote yippie Jeffrey, Yeah,

507
00:24:14,840 --> 00:24:17,879
Speaker 4: not again a technical term. I do wonder though, is

508
00:24:17,920 --> 00:24:21,000
Speaker 4: the bond market now behaving the way the bond market

509
00:24:21,040 --> 00:24:23,600
Speaker 4: is supposed to behave or is that is what we

510
00:24:23,640 --> 00:24:27,280
Speaker 4: saw thirty days ago. Is that something we can say, Okay,

511
00:24:27,320 --> 00:24:29,000
Speaker 4: that happened and now we need to move forward and

512
00:24:29,000 --> 00:24:30,920
Speaker 4: everything is fine.

513
00:24:31,320 --> 00:24:34,280
Speaker 7: Well, you know, is the bond market behaving the way

514
00:24:34,280 --> 00:24:37,320
Speaker 7: it's supposed to be behaving? God, that's a We could

515
00:24:37,359 --> 00:24:39,960
Speaker 7: spend a lot of time on what those words being

516
00:24:40,200 --> 00:24:42,959
Speaker 7: supposed to be behaving, right, because it's all about like,

517
00:24:43,000 --> 00:24:46,040
Speaker 7: what's the role of free market capitalism, what's the role

518
00:24:46,080 --> 00:24:49,320
Speaker 7: of financial markets, what's the role of pricing, and what's

519
00:24:49,359 --> 00:24:55,560
Speaker 7: the role of financial repression? To countervail those models of

520
00:24:55,640 --> 00:24:58,560
Speaker 7: how our system works, and so what we had, you know,

521
00:24:58,600 --> 00:25:00,560
Speaker 7: whether it was explicit or employe sit in the post

522
00:25:00,640 --> 00:25:04,440
Speaker 7: GFC world is we had a very large active balance

523
00:25:04,480 --> 00:25:08,360
Speaker 7: sheet by global central banks, and that kind of took

524
00:25:08,400 --> 00:25:13,399
Speaker 7: away a lot of the old bond market vigilanteism. And

525
00:25:13,440 --> 00:25:16,040
Speaker 7: so I kind of I've got a piece coming out shortly,

526
00:25:16,040 --> 00:25:18,680
Speaker 7: and I brought back, you know, the famous James Carville line.

527
00:25:18,720 --> 00:25:20,480
Speaker 7: You know, I want to if I if I die,

528
00:25:20,480 --> 00:25:22,359
Speaker 7: I want to come back as the bond market because

529
00:25:22,400 --> 00:25:24,840
Speaker 7: they can intimidate everybody, you know, And you think about

530
00:25:24,840 --> 00:25:28,080
Speaker 7: when he said that that was back pre GFC, pre

531
00:25:28,240 --> 00:25:30,720
Speaker 7: an environment where you had such large central bank balance

532
00:25:30,760 --> 00:25:34,240
Speaker 7: sheets kind of really truncating the ability of the financial

533
00:25:34,280 --> 00:25:39,359
Speaker 7: markets to signal through pricing disagreements around policy. You go

534
00:25:39,440 --> 00:25:42,119
Speaker 7: back to the Liz Trust moment in the UK and

535
00:25:42,119 --> 00:25:45,720
Speaker 7: we started to see some emergence or re emergence of

536
00:25:45,760 --> 00:25:49,120
Speaker 7: this older form of bond market behavior. Whe was that

537
00:25:49,119 --> 00:25:51,640
Speaker 7: that's you know, what bond markets are supposed to do

538
00:25:51,800 --> 00:25:54,280
Speaker 7: depends on you know, what school of thought you subscribe to.

539
00:25:54,400 --> 00:25:57,439
Speaker 7: But yes, I think it's really notable that in that

540
00:25:57,480 --> 00:26:00,119
Speaker 7: April time period that long term interest rates went up

541
00:26:00,119 --> 00:26:02,720
Speaker 7: when short term interest rates went Now, you've got to

542
00:26:02,760 --> 00:26:06,360
Speaker 7: take that observation and dwell on it for a little bit,

543
00:26:06,560 --> 00:26:09,240
Speaker 7: and the conclusion you need to make. This isn't your

544
00:26:09,840 --> 00:26:12,920
Speaker 7: last twenty years bond market. It may be that pre

545
00:26:13,119 --> 00:26:16,000
Speaker 7: GFC bond market that we're starting to see reemerge here.

546
00:26:16,160 --> 00:26:16,960
Speaker 5: Jeff, thank you so much.

547
00:26:17,040 --> 00:26:20,520
Speaker 2: Jeffrey Rosenberger, Black Rock in preparation for a fed reading.

548
00:26:20,800 --> 00:26:24,680
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

549
00:26:24,680 --> 00:26:28,000
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto

550
00:26:28,119 --> 00:26:31,080
Speaker 1: with the Bloomberg Business app. You can also listen live

551
00:26:31,160 --> 00:26:34,760
Speaker 1: on Amazon Alexa from our flagship New York station, Just

552
00:26:34,800 --> 00:26:37,320
Speaker 1: say Alexa play Bloomberg eleven thirty.

553
00:26:37,560 --> 00:26:39,879
Speaker 2: It'd be nice to know what people are actually doing

554
00:26:40,400 --> 00:26:45,040
Speaker 2: right now. There's a huge split between institutional with some

555
00:26:45,119 --> 00:26:48,760
Speaker 2: affiredness out there and rech out. I guess the stereotype

556
00:26:48,800 --> 00:26:53,080
Speaker 2: of the story. As they're buying, they're strong, they're there forever,

557
00:26:53,200 --> 00:26:56,439
Speaker 2: with some going into cash. Joe Mazzola's expert at this

558
00:26:56,520 --> 00:26:59,920
Speaker 2: had a trading and derivatives, a strategy of Charles Schwab.

559
00:27:00,160 --> 00:27:03,520
Speaker 2: Really about what people are doing in Chwab just simply

560
00:27:03,520 --> 00:27:04,240
Speaker 2: what are they doing?

561
00:27:04,960 --> 00:27:07,920
Speaker 9: Well, Tom, It's it's not really that much different than

562
00:27:07,960 --> 00:27:10,080
Speaker 9: what we saw on the institutional side, at least at

563
00:27:10,160 --> 00:27:12,560
Speaker 9: the beginning of the month, I can say because it

564
00:27:12,600 --> 00:27:15,000
Speaker 9: was all a real big drop in stacks, the biggest

565
00:27:15,080 --> 00:27:18,639
Speaker 9: drop that we've seen since March twenty twenty, you know

566
00:27:18,920 --> 00:27:22,520
Speaker 9: COVID time, so a fourteen percent drop in the number

567
00:27:22,640 --> 00:27:24,120
Speaker 9: from March into April.

568
00:27:25,000 --> 00:27:26,680
Speaker 3: The I would say the biggest.

569
00:27:26,280 --> 00:27:29,320
Speaker 9: Amount of selling was really that first week. It's kind

570
00:27:29,320 --> 00:27:34,480
Speaker 9: of across the board equity outflows. On the seventh we're

571
00:27:34,600 --> 00:27:37,240
Speaker 9: pretty strong, and I think something that was a little

572
00:27:37,240 --> 00:27:39,840
Speaker 9: bit different than maybe what we've seen in the past

573
00:27:40,080 --> 00:27:43,760
Speaker 9: was the idea that there wasn't as much maybe dip

574
00:27:43,840 --> 00:27:47,159
Speaker 9: buying as we'd seen. So yes, we did see some

575
00:27:47,320 --> 00:27:50,920
Speaker 9: inflows on the eighth and then but then the ninth,

576
00:27:50,920 --> 00:27:52,600
Speaker 9: when we had that you know, that nine percent kind

577
00:27:52,600 --> 00:27:55,880
Speaker 9: of rally off the bottom, we did see clients trim

578
00:27:56,040 --> 00:27:58,320
Speaker 9: and that I found that pretty interesting to see.

579
00:27:58,480 --> 00:28:00,600
Speaker 4: That's, you know, I thought I thought that dip buyers

580
00:28:00,640 --> 00:28:02,639
Speaker 4: were there, I thought, and I thought the flows were

581
00:28:02,680 --> 00:28:05,360
Speaker 4: really going into the S and P five hundred index funds.

582
00:28:05,400 --> 00:28:08,159
Speaker 9: So that's interesting. So one of the big differences that

583
00:28:08,200 --> 00:28:10,800
Speaker 9: we saw normally when we come across our list of

584
00:28:10,800 --> 00:28:14,960
Speaker 9: our top ten buys usually maybe one maybe two of

585
00:28:15,000 --> 00:28:18,719
Speaker 9: them are ETFs, this time four. So so what we

586
00:28:18,800 --> 00:28:23,360
Speaker 9: saw was concentrated buying between about maybe three or four symbols.

587
00:28:23,520 --> 00:28:25,800
Speaker 9: Netflix is always on top, and that was that was

588
00:28:26,000 --> 00:28:28,280
Speaker 9: excuse me in videos always on top. Excuse me in

589
00:28:28,359 --> 00:28:30,480
Speaker 9: video was always on top. It was interesting about that.

590
00:28:30,480 --> 00:28:32,960
Speaker 9: That was eight to one over the second place stock,

591
00:28:33,080 --> 00:28:37,440
Speaker 9: which was Amazon, so real big buying in video. Amazon

592
00:28:37,560 --> 00:28:41,240
Speaker 9: was second, Tesla was third, but then four of the

593
00:28:41,280 --> 00:28:44,640
Speaker 9: other top ten were ETFs, so that was interesting. It

594
00:28:44,680 --> 00:28:47,920
Speaker 9: was either you shift it within the small little sliver

595
00:28:48,000 --> 00:28:50,040
Speaker 9: of names or you broaden out of lot. What were

596
00:28:50,040 --> 00:28:54,320
Speaker 9: the etfsh spiders? So they were they were the index funds.

597
00:28:54,560 --> 00:28:57,400
Speaker 4: Okay, So does that tell you that the is there

598
00:28:57,480 --> 00:29:00,200
Speaker 4: is there commentary about the state of the econ me,

599
00:29:00,200 --> 00:29:03,560
Speaker 4: the state of cash balance there that retail investors still

600
00:29:03,560 --> 00:29:05,239
Speaker 4: have money to play with to put to work, and

601
00:29:05,280 --> 00:29:06,600
Speaker 4: that's a good sign, I think so.

602
00:29:06,720 --> 00:29:09,440
Speaker 9: I think I think some of the liquidation that we

603
00:29:09,480 --> 00:29:12,800
Speaker 9: saw at the beginning, like I said, it kind of

604
00:29:12,840 --> 00:29:14,200
Speaker 9: it tailed off a little bit at the end, but

605
00:29:14,240 --> 00:29:16,200
Speaker 9: we didn't see the heavy buying. I think part of

606
00:29:16,200 --> 00:29:18,200
Speaker 9: that and I think this is an interesting topic. It's

607
00:29:18,240 --> 00:29:20,960
Speaker 9: kind of margin balances. So when you see a liquidation

608
00:29:21,080 --> 00:29:24,400
Speaker 9: day like we saw on April seventh, what you normally

609
00:29:24,440 --> 00:29:27,560
Speaker 9: see is a rotation into something like fixed and income

610
00:29:27,640 --> 00:29:30,160
Speaker 9: mutual funds. You didn't see that as much, probably because

611
00:29:30,160 --> 00:29:31,840
Speaker 9: of margin calls, is you know, it would be my

612
00:29:31,880 --> 00:29:35,000
Speaker 9: guess on that one. But margin balance has really started

613
00:29:35,040 --> 00:29:37,160
Speaker 9: to decline towards the end of the month. So what

614
00:29:37,240 --> 00:29:40,240
Speaker 9: that means to me is that there wasn't necessarily heavy selling.

615
00:29:40,320 --> 00:29:43,080
Speaker 9: It's just you didn't see them loading the boat back

616
00:29:43,280 --> 00:29:44,800
Speaker 9: as they're kind of getting back into the market.

617
00:29:45,040 --> 00:29:49,040
Speaker 2: This is gospel for me, folks, the asymmetric tendency of

618
00:29:49,120 --> 00:29:52,240
Speaker 2: this where there's a bit an ask and like when

619
00:29:52,280 --> 00:29:55,440
Speaker 2: things are going down, what you learn the hard way

620
00:29:55,560 --> 00:29:56,080
Speaker 2: is the.

621
00:29:55,920 --> 00:29:57,120
Speaker 5: Bid falls away.

622
00:29:57,200 --> 00:30:00,640
Speaker 2: That's right, Was there a essence of Lizzie's was there

623
00:30:00,640 --> 00:30:07,320
Speaker 2: as And I don't feel the emotion of Catharsis with

624
00:30:07,440 --> 00:30:09,120
Speaker 2: that empty pivot in my stomach.

625
00:30:09,240 --> 00:30:12,320
Speaker 5: Oh, the bid just walked away. We're rationalizing it.

626
00:30:12,640 --> 00:30:14,959
Speaker 9: So here's something as interesting. We get this question all

627
00:30:15,000 --> 00:30:17,640
Speaker 9: the time. People will say, well, you know, what makes

628
00:30:17,640 --> 00:30:21,040
Speaker 9: a market right? Are people stepping away? And what I

629
00:30:21,040 --> 00:30:22,600
Speaker 9: think is people are just kind of lowing their bids

630
00:30:22,600 --> 00:30:25,840
Speaker 9: and they're waiting for that opportunity. The other thing we saw,

631
00:30:25,920 --> 00:30:29,120
Speaker 9: guys was what I found was really interesting is we

632
00:30:29,720 --> 00:30:32,000
Speaker 9: started to see a lot of premium selling in the

633
00:30:32,040 --> 00:30:35,320
Speaker 9: options market. So maybe Tom, maybe that's a way that

634
00:30:35,560 --> 00:30:37,840
Speaker 9: clients are getting back into it by saying, Okay, maybe

635
00:30:37,880 --> 00:30:40,400
Speaker 9: we'll sell some puts down here. The Vix's trading sixty

636
00:30:40,440 --> 00:30:42,520
Speaker 9: as it kind of trickled its way back to you know,

637
00:30:42,560 --> 00:30:45,000
Speaker 9: twenty by the end of the month. Premium selling, whether

638
00:30:45,040 --> 00:30:47,080
Speaker 9: it was selling spreads, whether it was selling puts, is

639
00:30:47,080 --> 00:30:49,080
Speaker 9: a way to maybe buy the dip a little bit cheaper.

640
00:30:49,280 --> 00:30:51,600
Speaker 9: That was something that we saw with our retail clients.

641
00:30:51,280 --> 00:30:55,040
Speaker 4: Were the same people who were selling in the beginning

642
00:30:55,080 --> 00:30:56,840
Speaker 4: of the month buying later in the month. Do you

643
00:30:56,880 --> 00:30:59,600
Speaker 4: have that data, Well, what we can do is we

644
00:30:59,640 --> 00:31:02,440
Speaker 4: can kind of break it down. So one of the

645
00:31:02,480 --> 00:31:04,720
Speaker 4: things that we noticed is we broke it down by generation. Okay,

646
00:31:05,200 --> 00:31:08,680
Speaker 4: and you know, my generation Gen X, right, we came

647
00:31:08,720 --> 00:31:11,400
Speaker 4: in a little bit more heavily loaded up in terms

648
00:31:11,440 --> 00:31:15,560
Speaker 4: of margin and in terms of equity allocations. So they

649
00:31:15,680 --> 00:31:17,959
Speaker 4: kind of peeled back a little bit just because they

650
00:31:17,960 --> 00:31:21,000
Speaker 4: were a little bit more exposed. Some of the other generations,

651
00:31:21,480 --> 00:31:25,480
Speaker 4: Millennials and you know, the generation above, they didn't come

652
00:31:25,480 --> 00:31:28,440
Speaker 4: in as exposed, so they did a little bit more buying.

653
00:31:28,520 --> 00:31:30,400
Speaker 4: So what we really saw was that the people that

654
00:31:31,080 --> 00:31:34,000
Speaker 4: had more heavy equity allocations and even a little bit

655
00:31:34,000 --> 00:31:36,720
Speaker 4: more option allocations in the term of long options, those

656
00:31:36,720 --> 00:31:39,080
Speaker 4: are the ones that started to peel things back. People

657
00:31:39,080 --> 00:31:40,959
Speaker 4: that weren't as exposed they started to add when they

658
00:31:40,960 --> 00:31:42,040
Speaker 4: had that cash available.

659
00:31:42,400 --> 00:31:46,280
Speaker 2: The trade balance just came out and I'm doing Yeah,

660
00:31:46,280 --> 00:31:47,840
Speaker 2: I can do it on the Bloomberg. I've got a

661
00:31:47,880 --> 00:31:49,680
Speaker 2: thing where I can do it. I can't count the sigh,

662
00:31:49,960 --> 00:31:53,000
Speaker 2: Joe Mazzola with us right now. The trade balance on

663
00:31:53,120 --> 00:31:57,320
Speaker 2: trend back to two thousand and seven twenty ten is

664
00:31:57,480 --> 00:32:00,320
Speaker 2: you know, after the crisis, has been on a trend

665
00:32:00,400 --> 00:32:03,400
Speaker 2: of a greater trade balance, and then it fell out

666
00:32:03,400 --> 00:32:07,400
Speaker 2: of bed with COVID came back, and now it's really

667
00:32:07,440 --> 00:32:10,480
Speaker 2: fallen out of bed to a huge negative. Statistic survey

668
00:32:10,680 --> 00:32:14,200
Speaker 2: was one thirty seven billion, which is a ginormous number,

669
00:32:14,520 --> 00:32:16,800
Speaker 2: and it came in actually at one hundred and forty billion,

670
00:32:17,280 --> 00:32:21,160
Speaker 2: and Joe Mazzola, let's count one, two, three, four or five.

671
00:32:21,760 --> 00:32:24,520
Speaker 2: I can't even I gotta I gotta use my finger one,

672
00:32:24,600 --> 00:32:29,520
Speaker 2: the surveillance finger one, two, three, four, five, six eight.

673
00:32:30,240 --> 00:32:35,680
Speaker 2: We are out eight standard deviations on the trade balance.

674
00:32:36,320 --> 00:32:39,280
Speaker 2: You and I have never seen this, Schwab clients have

675
00:32:39,360 --> 00:32:40,520
Speaker 2: never seen this, have they?

676
00:32:41,000 --> 00:32:41,800
Speaker 4: It's front loading.

677
00:32:41,960 --> 00:32:43,400
Speaker 9: I mean, you know that would that would kind of

678
00:32:43,400 --> 00:32:47,280
Speaker 9: be My assumption is that while there's so much indecision

679
00:32:47,560 --> 00:32:50,320
Speaker 9: around what the trade war is going to offer, whether

680
00:32:50,360 --> 00:32:53,240
Speaker 9: it's businesses, whether it's you know, retail clients that are

681
00:32:53,560 --> 00:32:55,880
Speaker 9: that are making their purchases in advance while we're waiting

682
00:32:55,880 --> 00:32:56,800
Speaker 9: for this to happen.

683
00:32:56,560 --> 00:32:56,960
Speaker 3: It's heart.

684
00:32:57,080 --> 00:32:58,720
Speaker 9: I mean the hard part is we you know, we

685
00:32:58,760 --> 00:33:00,920
Speaker 9: talk about businesses and how it will affect their p

686
00:33:01,040 --> 00:33:03,640
Speaker 9: and ls and how that that affects, you know, what

687
00:33:03,680 --> 00:33:05,440
Speaker 9: they're doing in terms of their profit margins, but it

688
00:33:05,480 --> 00:33:07,760
Speaker 9: hits the retail as well too. At some point they

689
00:33:07,840 --> 00:33:10,160
Speaker 9: need to figure out with their monthly budgets, how are

690
00:33:10,200 --> 00:33:13,160
Speaker 9: they going to allocate those if they if their expectations

691
00:33:13,160 --> 00:33:15,200
Speaker 9: are their prices will go up going forward. And we've

692
00:33:15,200 --> 00:33:18,120
Speaker 9: seen that, You've seen it in the Michigan consumer sentiment numbers.

693
00:33:18,280 --> 00:33:21,400
Speaker 9: You've seen these expectations for inflation. So what do you do.

694
00:33:21,440 --> 00:33:23,240
Speaker 9: You buy it when you can, not when you have to.

695
00:33:23,520 --> 00:33:24,640
Speaker 9: And that's kind of what we're seeing.

696
00:33:24,760 --> 00:33:26,760
Speaker 4: Is that your view that prices are going to go

697
00:33:26,840 --> 00:33:27,560
Speaker 4: up moving forward.

698
00:33:27,760 --> 00:33:30,680
Speaker 9: I mean, that's I think at least that's where we're

699
00:33:30,680 --> 00:33:33,000
Speaker 9: at right now until there's some type of pivot from

700
00:33:33,280 --> 00:33:33,880
Speaker 9: what we're seeing.

701
00:33:33,920 --> 00:33:37,520
Speaker 4: It was interesting hearing from Jane Frasier City Group CEO yesterday.

702
00:33:38,160 --> 00:33:41,560
Speaker 4: She she basically said what she's seeing clients do right now,

703
00:33:41,840 --> 00:33:44,640
Speaker 4: and these we're not We're talking huge businesses right at

704
00:33:44,720 --> 00:33:47,440
Speaker 4: U City Bank, they're taking a break. They're just not

705
00:33:47,560 --> 00:33:51,040
Speaker 4: making the investments they're they're at a standstill. They're waiting

706
00:33:51,040 --> 00:33:53,000
Speaker 4: for clarity, and that's a real concern.

707
00:33:53,920 --> 00:33:55,360
Speaker 2: You will have to see it. I mean, I mean,

708
00:33:55,400 --> 00:33:57,440
Speaker 2: Matt Winkler just sends me in Matt when he gets

709
00:33:57,440 --> 00:33:59,719
Speaker 2: angry at me, he sends me love notes. What did

710
00:33:59,720 --> 00:34:02,320
Speaker 2: you say under a Bloomberg News sounds of a brilliant

711
00:34:02,440 --> 00:34:05,560
Speaker 2: essay by Noah Smith, who's just smart, smart, smart, And

712
00:34:05,840 --> 00:34:08,600
Speaker 2: you know all the certitudes out there now, and one

713
00:34:08,640 --> 00:34:10,440
Speaker 2: of the great certitudes.

714
00:34:09,840 --> 00:34:11,840
Speaker 3: Of gloom is woe is me.

715
00:34:12,760 --> 00:34:18,040
Speaker 2: Imports are overwhelming exports and a lot of people, including me,

716
00:34:18,239 --> 00:34:22,360
Speaker 2: take a simplistic math on that where when you have

717
00:34:22,480 --> 00:34:26,120
Speaker 2: imports come in, they do strange stuff like investment just

718
00:34:26,160 --> 00:34:30,399
Speaker 2: as you mentioned or inventor is the math, folks, is

719
00:34:30,480 --> 00:34:33,640
Speaker 2: not as simple as what you hear from a lot

720
00:34:33,640 --> 00:34:36,319
Speaker 2: of people. And that's how you get to the uncertainty

721
00:34:36,800 --> 00:34:39,320
Speaker 2: like in Young Hatzi is this note from Goldman Sex

722
00:34:39,800 --> 00:34:42,000
Speaker 2: or Joe all of a sudden, Hatzias is Q two

723
00:34:42,080 --> 00:34:45,720
Speaker 2: it two point x percent abonomic growth.

724
00:34:45,760 --> 00:34:48,880
Speaker 4: Sure, I think those are all very feasible numbers. And

725
00:34:48,960 --> 00:34:50,520
Speaker 4: here's what I think we need to look at is

726
00:34:50,560 --> 00:34:54,560
Speaker 4: the idea that we prospered pretty well in the United

727
00:34:54,560 --> 00:34:57,440
Speaker 4: States even with the trade imbalance. And you know, you

728
00:34:57,760 --> 00:34:59,799
Speaker 4: can look not to get political, you can look at

729
00:34:59,840 --> 00:35:02,600
Speaker 4: any any sense that you want. But we've benefited from

730
00:35:02,640 --> 00:35:03,440
Speaker 4: low price goods.

731
00:35:03,560 --> 00:35:06,879
Speaker 2: Joe Mazzola, Lizzie Saunders, Kathy Jones, what a great team

732
00:35:06,920 --> 00:35:09,279
Speaker 2: at Charles Shrub Joe, thank you so much.

733
00:35:14,800 --> 00:35:18,720
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

734
00:35:18,760 --> 00:35:21,800
Speaker 1: starting at seven am Eastern on Apple Corplay and Android

735
00:35:21,800 --> 00:35:24,799
Speaker 1: Auto with the Bloomberg Business app. You can also watch

736
00:35:24,880 --> 00:35:27,840
Speaker 1: us live every weekday on YouTube and always on the

737
00:35:27,840 --> 00:35:29,400
Speaker 1: Bloomberg terminal.

738
00:35:29,560 --> 00:35:34,120
Speaker 2: Zorah and Memdani came out of an experience in New York.

739
00:35:34,200 --> 00:35:39,040
Speaker 2: This absolutely original and I live this with afterthought.

740
00:35:39,080 --> 00:35:41,360
Speaker 5: You heard me talk about afterthought.

741
00:35:41,360 --> 00:35:48,160
Speaker 2: Afterthoughts elementary school. Her first grade class had eleven languages

742
00:35:49,040 --> 00:35:52,520
Speaker 2: and you have to live it to understand it was

743
00:35:52,920 --> 00:35:58,399
Speaker 2: absolutely extraordinary experience. I treasure the experience of what they did.

744
00:35:58,440 --> 00:36:01,480
Speaker 2: This is on the Upper Side school five twenty eight.

745
00:36:01,480 --> 00:36:04,600
Speaker 2: I believe it was up in the nineties. Zori m

746
00:36:04,680 --> 00:36:08,920
Speaker 2: donnie lived this as well, much more in Queens and

747
00:36:08,960 --> 00:36:11,920
Speaker 2: of course his Bank Street Elementary School, and then went

748
00:36:11,960 --> 00:36:16,960
Speaker 2: on to great academic acclaim at Boden and now runs

749
00:36:16,960 --> 00:36:20,920
Speaker 2: for mayor with a decidedly left strategy. Zoren, thank you

750
00:36:20,960 --> 00:36:25,000
Speaker 2: so much for joining Bloomberg and Bloomberg Surveillance today. How

751
00:36:25,000 --> 00:36:28,280
Speaker 2: are you going to move to the center to compete

752
00:36:28,520 --> 00:36:31,240
Speaker 2: and win? How do you go from a more left

753
00:36:31,680 --> 00:36:38,799
Speaker 2: socialist structure a more strident progressive structure in capture centrist votes.

754
00:36:39,960 --> 00:36:42,160
Speaker 10: With as many Bloomberg interviews as possible.

755
00:36:42,840 --> 00:36:43,880
Speaker 5: That's a right answer.

756
00:36:44,000 --> 00:36:47,319
Speaker 2: Okay, continue, you can stay.

757
00:36:49,000 --> 00:36:50,400
Speaker 10: It's a real pleasure to be here, you know. I

758
00:36:50,480 --> 00:36:53,839
Speaker 10: think I think one of the key ways is explaining

759
00:36:54,000 --> 00:36:57,359
Speaker 10: how the crises that we are speaking about, whether it's

760
00:36:58,080 --> 00:37:01,040
Speaker 10: on affordability and understanding it with regards to housing, or

761
00:37:01,280 --> 00:37:04,319
Speaker 10: childcare or public trands. That these are crises that are

762
00:37:04,360 --> 00:37:07,320
Speaker 10: affecting New Yorkers wherever they identify politically, whether on the

763
00:37:07,400 --> 00:37:08,919
Speaker 10: left or in the center, or even on the right.

764
00:37:09,280 --> 00:37:11,279
Speaker 10: And I've found that while I don't believe there's an

765
00:37:11,280 --> 00:37:16,120
Speaker 10: ideological majority in our city of any one political persuasion,

766
00:37:16,160 --> 00:37:18,160
Speaker 10: I do think there's a majority of New Yorkers who

767
00:37:18,760 --> 00:37:21,160
Speaker 10: have been left behind by the economic policies of this

768
00:37:21,280 --> 00:37:24,920
Speaker 10: mayoral administration and of politics today. And this is what

769
00:37:25,000 --> 00:37:29,280
Speaker 10: this campaign seems to confront in the politics that requires

770
00:37:28,920 --> 00:37:30,360
Speaker 10: no no translation.

771
00:37:30,719 --> 00:37:33,480
Speaker 4: I can see it now though at you know, sort

772
00:37:33,480 --> 00:37:38,000
Speaker 4: of to Tom's question, the painting of you as a

773
00:37:38,000 --> 00:37:40,880
Speaker 4: democratic socialist or even a socialist, how do you avoid

774
00:37:41,880 --> 00:37:44,520
Speaker 4: the label or do you embrace the label? Do you

775
00:37:45,640 --> 00:37:48,719
Speaker 4: make it so centrist or not scared away by that?

776
00:37:50,600 --> 00:37:53,480
Speaker 10: I embrace the label because ultimately I do identify myself

777
00:37:53,520 --> 00:37:56,600
Speaker 10: as a democratic socialist, and I think, you know, I

778
00:37:56,600 --> 00:37:58,759
Speaker 10: think that the thing that New Yorkers hate more than

779
00:37:58,760 --> 00:38:01,280
Speaker 10: a politician they disagree with is one that they cannot trust.

780
00:38:01,520 --> 00:38:03,879
Speaker 10: And I think it's important to be honest about how

781
00:38:03,920 --> 00:38:06,520
Speaker 10: we're coming to this politics and also what that label

782
00:38:06,600 --> 00:38:09,560
Speaker 10: means to me, which is ultimately that each and every

783
00:38:09,640 --> 00:38:12,560
Speaker 10: New Yorker has what they need to live a dignified life,

784
00:38:12,600 --> 00:38:15,480
Speaker 10: and that it's city government's responsibility to provide that. And

785
00:38:15,520 --> 00:38:18,040
Speaker 10: I think we have a general consensus on many of

786
00:38:18,040 --> 00:38:21,480
Speaker 10: those building blocks in our society, whether it's public education

787
00:38:21,640 --> 00:38:24,560
Speaker 10: or libraries or sanitation. But then there are certain places

788
00:38:24,600 --> 00:38:28,280
Speaker 10: where we tend to believe that these are necessary parts

789
00:38:28,480 --> 00:38:31,160
Speaker 10: of living a dignified life, and yet we allow people

790
00:38:31,200 --> 00:38:33,200
Speaker 10: to be priced out of it. And I think housing

791
00:38:33,280 --> 00:38:35,279
Speaker 10: is one of the most obvious examples of that.

792
00:38:35,400 --> 00:38:37,719
Speaker 4: So let's talk about that. What is your policy for

793
00:38:37,880 --> 00:38:42,000
Speaker 4: increasing affordability and increasing supply of housing, because no question,

794
00:38:42,160 --> 00:38:44,919
Speaker 4: that is the issue supply of housing. That is why

795
00:38:44,920 --> 00:38:45,960
Speaker 4: it's expensive.

796
00:38:45,560 --> 00:38:48,920
Speaker 10: Here, absolutely, And I think what we're seeing is that

797
00:38:48,960 --> 00:38:50,799
Speaker 10: when you ask New Yorkers if they were to pick

798
00:38:50,840 --> 00:38:52,640
Speaker 10: one of the many crises they're facing in their life,

799
00:38:52,680 --> 00:38:57,360
Speaker 10: it's the housing crisis that tends to predominate. And I

800
00:38:57,400 --> 00:38:58,920
Speaker 10: think that what we need to do. There are a

801
00:38:58,920 --> 00:39:00,920
Speaker 10: few things we need to do in terms of allowing

802
00:39:00,960 --> 00:39:03,960
Speaker 10: the private market to play a more significant role in

803
00:39:04,000 --> 00:39:06,960
Speaker 10: the construction of additional housing supply. That includes ending the

804
00:39:06,960 --> 00:39:10,279
Speaker 10: requirement to build parking lots when we're constructing housing. That

805
00:39:10,360 --> 00:39:14,120
Speaker 10: means increasing density around mass transit hubs. That means upzoning

806
00:39:14,120 --> 00:39:17,640
Speaker 10: wealthier neighborhoods that have historically not contributed to housing production.

807
00:39:18,000 --> 00:39:21,719
Speaker 10: What makes our campaign distinct is in tandem with that,

808
00:39:22,239 --> 00:39:24,520
Speaker 10: I also believe that the public sector has a role

809
00:39:24,560 --> 00:39:27,879
Speaker 10: to play in building immediately affordable housing. And the reason

810
00:39:27,920 --> 00:39:30,040
Speaker 10: I say immediately, sorry, please.

811
00:39:30,200 --> 00:39:32,000
Speaker 5: The time that we've got, I got to get in

812
00:39:32,120 --> 00:39:32,840
Speaker 5: two themes.

813
00:39:33,040 --> 00:39:37,000
Speaker 2: The reality is labors going down in flames in the

814
00:39:37,080 --> 00:39:41,160
Speaker 2: United Kingdom, and there is a wealth exit from the

815
00:39:41,280 --> 00:39:45,399
Speaker 2: United Kingdom. If we have Mayor Mamdani, do we get

816
00:39:45,440 --> 00:39:50,279
Speaker 2: a wealth exit from New York City? No?

817
00:39:50,440 --> 00:39:52,279
Speaker 10: I think what we actually get is an end to

818
00:39:52,320 --> 00:39:54,800
Speaker 10: the exodus we're seeing right now of working in middle

819
00:39:54,800 --> 00:39:57,480
Speaker 10: class New Yorkers leading our city in the hopes of

820
00:39:57,480 --> 00:39:59,239
Speaker 10: finding a place where their dollar can go a little

821
00:39:59,239 --> 00:40:03,200
Speaker 10: bit further. And what we know is that it's housing,

822
00:40:03,360 --> 00:40:06,680
Speaker 10: its childcare, its general cost of living. And so often

823
00:40:06,760 --> 00:40:09,000
Speaker 10: when I speak about our campaign to make the city

824
00:40:09,000 --> 00:40:12,640
Speaker 10: more affordable, to freeze the rent to make buses fast

825
00:40:12,640 --> 00:40:16,800
Speaker 10: and free, to deliver universal childcare. Sometimes it's framed oppositional

826
00:40:17,200 --> 00:40:20,120
Speaker 10: to that of let's say, business interests, But oftentimes when

827
00:40:20,120 --> 00:40:23,360
Speaker 10: I speak to business owners, one of their primary concerns

828
00:40:23,400 --> 00:40:26,160
Speaker 10: is how to retain their employees in a city that's

829
00:40:26,160 --> 00:40:29,880
Speaker 10: so expensive. And I think that these are proposals that

830
00:40:30,000 --> 00:40:32,319
Speaker 10: will make the city up not only more affordable, but

831
00:40:32,360 --> 00:40:35,200
Speaker 10: also more livable because there are so many knock on

832
00:40:35,520 --> 00:40:38,319
Speaker 10: consequences of having a city that's out of reach. There's

833
00:40:38,640 --> 00:40:41,280
Speaker 10: a real sense of almost permanent anxiety that the workers

834
00:40:41,280 --> 00:40:43,880
Speaker 10: are living in. And this addressed is that.

835
00:40:44,160 --> 00:40:46,880
Speaker 2: One of the great themes right now of all the

836
00:40:46,920 --> 00:40:50,840
Speaker 2: twenty eight flavors of candidates we've spoken to is crime,

837
00:40:50,960 --> 00:40:54,000
Speaker 2: and the great theme is how do we rEFInd three

838
00:40:54,120 --> 00:40:58,959
Speaker 2: thousand New York Police Department officers? Are you in support

839
00:40:59,239 --> 00:41:04,600
Speaker 2: of state in increasing the number of police officers.

840
00:41:04,080 --> 00:41:04,920
Speaker 5: In New York City?

841
00:41:06,239 --> 00:41:09,480
Speaker 10: So I'm in support of stabilizing And I've said time

842
00:41:09,480 --> 00:41:11,600
Speaker 10: and again that I think the ultimate concern has to

843
00:41:11,640 --> 00:41:14,680
Speaker 10: be delivering public safety, and police have a critical role

844
00:41:14,760 --> 00:41:17,439
Speaker 10: to play in that. Yet what we're doing right now

845
00:41:17,480 --> 00:41:20,000
Speaker 10: is relying on them for almost every failure of the

846
00:41:20,040 --> 00:41:23,319
Speaker 10: social safety net a reliance which is preventing them from

847
00:41:23,320 --> 00:41:26,120
Speaker 10: doing their actual jobs. And we can see the results

848
00:41:26,160 --> 00:41:29,000
Speaker 10: of that in our inability to increase our clearance rates

849
00:41:29,000 --> 00:41:31,640
Speaker 10: for the major seven categories of crime. And so what

850
00:41:31,680 --> 00:41:34,120
Speaker 10: we've put forward as a proposal is to create a

851
00:41:34,160 --> 00:41:38,760
Speaker 10: Department of Community Safety that would tackle the mental health crisis, homelessness,

852
00:41:38,880 --> 00:41:42,560
Speaker 10: gun violence, hate violence, and victim services, doing so in

853
00:41:42,600 --> 00:41:46,360
Speaker 10: a manner that's aggressively pursuing evidence based policies that have

854
00:41:46,560 --> 00:41:49,560
Speaker 10: proven successful elsewhere in the country, and allowing police to

855
00:41:49,560 --> 00:41:50,960
Speaker 10: focus on their actual jobs.

856
00:41:51,320 --> 00:41:55,560
Speaker 4: Free buses, increased childcare, more housing. How do you pay

857
00:41:55,600 --> 00:41:56,000
Speaker 4: for it all?

858
00:41:57,520 --> 00:41:59,000
Speaker 10: So, I think there are a few key ways. We've

859
00:41:59,040 --> 00:42:01,600
Speaker 10: put forward a revenue posal that seeks to raise about

860
00:42:01,640 --> 00:42:04,560
Speaker 10: ten billion dollars a year. Now, about nine billion of

861
00:42:04,600 --> 00:42:08,520
Speaker 10: that comes from increased taxes on five billion from the

862
00:42:08,520 --> 00:42:11,400
Speaker 10: most profitable corporations in New York State. We would tax

863
00:42:11,680 --> 00:42:14,160
Speaker 10: the top level of corporate tax would match that of

864
00:42:14,200 --> 00:42:16,960
Speaker 10: New Jersey, where across the river they have an eleven

865
00:42:17,000 --> 00:42:19,560
Speaker 10: point five percent top corporate tax rate. Here in New

866
00:42:19,600 --> 00:42:21,879
Speaker 10: York we have a seven point twenty five percent top

867
00:42:21,880 --> 00:42:24,680
Speaker 10: corporate tax rate. And then we'd raise four billion dollars

868
00:42:24,680 --> 00:42:27,600
Speaker 10: by raising income taxes on the top one percent of

869
00:42:27,640 --> 00:42:29,919
Speaker 10: New Yorkers, the New Yorkers who make a million dollars

870
00:42:29,920 --> 00:42:32,200
Speaker 10: a year or more, by a flat two percent increase.

871
00:42:32,360 --> 00:42:33,759
Speaker 10: It would just be about to your voice.

872
00:42:34,000 --> 00:42:35,719
Speaker 2: I've got to get this in zot and we're out

873
00:42:35,719 --> 00:42:38,360
Speaker 2: of time, but this is too important. You are on

874
00:42:38,440 --> 00:42:42,640
Speaker 2: a crusp of the national resurgence of a democratic party.

875
00:42:43,040 --> 00:42:46,200
Speaker 2: Is your voice the Senator from Vermont and other voices,

876
00:42:46,280 --> 00:42:48,799
Speaker 2: is a general woman from the Bronx. Is that the

877
00:42:48,840 --> 00:42:51,600
Speaker 2: future of the Democratic Party, or is the future of

878
00:42:51,640 --> 00:42:55,960
Speaker 2: the Democratic Party centrist more towards a tradition from the

879
00:42:56,040 --> 00:42:56,840
Speaker 2: last century.

880
00:42:58,239 --> 00:43:00,880
Speaker 10: You know, I would argue that that my voice, and

881
00:43:00,920 --> 00:43:03,680
Speaker 10: the voice that of so many others that you've cited,

882
00:43:03,719 --> 00:43:07,000
Speaker 10: whether Senator Sanders or Congressman Acostia Quartees, is very much

883
00:43:07,040 --> 00:43:09,440
Speaker 10: still in the tradition of the Democratic Party. And I

884
00:43:09,480 --> 00:43:11,720
Speaker 10: think so much of what we are also speaking about

885
00:43:12,200 --> 00:43:14,279
Speaker 10: is seeking to learn the lessons, whether it's of the

886
00:43:14,280 --> 00:43:17,600
Speaker 10: New Deal or also in New York City, specifically of

887
00:43:18,000 --> 00:43:21,440
Speaker 10: Little Flower mayor Fierro LaGuardia and how the public sector

888
00:43:21,520 --> 00:43:24,320
Speaker 10: was so critical in providing dignity and working people's lives,

889
00:43:24,360 --> 00:43:26,839
Speaker 10: and we're seeking to bring that back because too many

890
00:43:26,920 --> 00:43:30,080
Speaker 10: working class New Yorkers and Americans rightfully feel that they've

891
00:43:30,080 --> 00:43:32,239
Speaker 10: been betrayed and left behind, and it's time for us

892
00:43:32,239 --> 00:43:35,520
Speaker 10: to deliver that which they have so long been denied.

893
00:43:35,640 --> 00:43:38,560
Speaker 2: Next time you're on, We're talking cricket zortin, ma'm dini.

894
00:43:38,640 --> 00:43:40,400
Speaker 2: Thank you so much, greatly appreciated.

895
00:43:40,800 --> 00:43:44,680
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

896
00:43:44,719 --> 00:43:47,760
Speaker 1: starting at seven am Eastern on Apple Corplay and Android

897
00:43:47,760 --> 00:43:50,800
Speaker 1: Auto with the Bloomberg Business app. You can also listen

898
00:43:50,880 --> 00:43:54,160
Speaker 1: live on Amazon Alexa from our flagship New York station.

899
00:43:54,680 --> 00:43:57,360
Speaker 1: Just say Alexa play Bloomberg eleven thirty.

900
00:43:57,520 --> 00:43:59,879
Speaker 5: Let's go right now to the newspaper? Is Lisa much?

901
00:44:02,080 --> 00:44:04,080
Speaker 6: I'm not going to start there, Okay, let's start it.

902
00:44:04,120 --> 00:44:04,200
Speaker 2: So.

903
00:44:04,239 --> 00:44:06,520
Speaker 6: A record amount of money was raised at the gala

904
00:44:06,600 --> 00:44:10,680
Speaker 6: last night, huge one, yes, huge, thirty one million dollars,

905
00:44:10,760 --> 00:44:13,240
Speaker 6: the biggest gross seventy seven year history of the event.

906
00:44:13,760 --> 00:44:16,280
Speaker 6: It doesn't reflect, though, the seven figure costs of staging

907
00:44:16,280 --> 00:44:18,719
Speaker 6: the gallop, but that's still a big figure to begin with.

908
00:44:19,080 --> 00:44:21,080
Speaker 6: I want to get to the fashion because that's what

909
00:44:21,120 --> 00:44:24,200
Speaker 6: it's all about. At the met gala, right, you mentioned Zandaiya,

910
00:44:24,320 --> 00:44:25,759
Speaker 6: so I had we have a couple of pictures if

911
00:44:25,760 --> 00:44:28,880
Speaker 6: you're watching on YouTube. So it was this all white

912
00:44:28,920 --> 00:44:34,520
Speaker 6: pants suit custom Louis Vatan screaming. I totally with the

913
00:44:34,560 --> 00:44:36,799
Speaker 6: hat on top of it. I could totally see myself

914
00:44:36,800 --> 00:44:40,239
Speaker 6: with that A big focus to on men's fashion because

915
00:44:40,239 --> 00:44:41,680
Speaker 6: that was a big thing for it. So you had

916
00:44:41,760 --> 00:44:45,680
Speaker 6: Tom's favorite, Pharrell Williams. He was there, cousdom Louis Vatan,

917
00:44:46,440 --> 00:44:52,120
Speaker 6: Tiffany jewelry on top of it, so he was looking Tiffany.

918
00:44:52,239 --> 00:44:56,040
Speaker 2: I mean, yes, it's never too early for Mother's Day.

919
00:44:56,440 --> 00:44:59,480
Speaker 2: And I got the Tiffany Titan by Pharrell Farrell whatever

920
00:44:59,480 --> 00:45:02,760
Speaker 2: you're pronounce said sixteen thousand, five hundred.

921
00:45:02,840 --> 00:45:03,520
Speaker 3: It's a bargain.

922
00:45:03,600 --> 00:45:05,040
Speaker 5: It's a bargain for Mother's Day.

923
00:45:05,160 --> 00:45:05,880
Speaker 7: That's correct.

924
00:45:06,000 --> 00:45:06,920
Speaker 5: Screams value.

925
00:45:07,239 --> 00:45:07,720
Speaker 3: It does.

926
00:45:08,440 --> 00:45:10,120
Speaker 5: Also, I thought Usher was great.

927
00:45:10,200 --> 00:45:12,719
Speaker 3: Usher looked like, yes, Usher did.

928
00:45:13,000 --> 00:45:15,000
Speaker 6: But a bad Bunny set out stood out to me

929
00:45:15,040 --> 00:45:17,480
Speaker 6: because it was so colorful, like you know, everything everybody

930
00:45:17,520 --> 00:45:18,000
Speaker 6: else had.

931
00:45:18,040 --> 00:45:19,919
Speaker 2: Bunny stood out to me because he's the only one

932
00:45:19,920 --> 00:45:22,520
Speaker 2: at the damn event that listens to Bloomberg's surveillance.

933
00:45:23,080 --> 00:45:25,040
Speaker 4: He's the only one who gets in touch. They all listen,

934
00:45:25,080 --> 00:45:26,920
Speaker 4: they all watch. He's the only one who reaches out.

935
00:45:26,920 --> 00:45:28,480
Speaker 5: I keep it very quiet.

936
00:45:28,840 --> 00:45:30,840
Speaker 2: We are humbled, you know, I don't time for a

937
00:45:30,880 --> 00:45:34,680
Speaker 2: story now, but humbled by the number of people in

938
00:45:34,920 --> 00:45:36,879
Speaker 2: entertainment that listen to what we do.

939
00:45:37,440 --> 00:45:38,960
Speaker 5: Early morning la as well.

940
00:45:38,800 --> 00:45:39,920
Speaker 6: Continued John Cena.

941
00:45:40,000 --> 00:45:43,360
Speaker 3: Too, we listened to John Cena. John, I thought you

942
00:45:43,360 --> 00:45:43,839
Speaker 3: were great.

943
00:45:44,040 --> 00:45:45,800
Speaker 5: Chicago.

944
00:45:47,680 --> 00:45:50,440
Speaker 6: Okay, so we've been talking a lot. Yesterday we talked

945
00:45:50,480 --> 00:45:53,080
Speaker 6: about President Trump's plan to place tariffs right on movie

946
00:45:53,080 --> 00:45:56,239
Speaker 6: productions made outside of the US. So actor John Boyd said,

947
00:45:56,280 --> 00:45:58,080
Speaker 6: he is a plan to fix Hollywood.

948
00:45:58,120 --> 00:45:58,640
Speaker 7: So I want to.

949
00:45:58,640 --> 00:46:00,800
Speaker 6: Quickly break it down. This a great art and Bloomberg

950
00:46:01,400 --> 00:46:03,960
Speaker 6: he presented it over the weekend to the President. Federal

951
00:46:03,960 --> 00:46:07,600
Speaker 6: incentives for US theater owners to upgrade their facilities, because

952
00:46:07,640 --> 00:46:09,040
Speaker 6: you know, the theaters are the ones who have been

953
00:46:09,040 --> 00:46:11,240
Speaker 6: struggling a lot. So that was one of them changes

954
00:46:11,280 --> 00:46:14,000
Speaker 6: to the tax code to encourage investment in US firms,

955
00:46:14,680 --> 00:46:18,640
Speaker 6: job training initiatives. Tariffs on films produced overseas, so that

956
00:46:18,880 --> 00:46:21,439
Speaker 6: still was in there, but filmmakers who co produce foreign

957
00:46:21,480 --> 00:46:24,360
Speaker 6: companies are allowed to obtain their credits for US spending.

958
00:46:24,440 --> 00:46:26,400
Speaker 6: So those are some of the things he brought about.

959
00:46:26,719 --> 00:46:29,400
Speaker 6: The President said he supports the plan. He's going to

960
00:46:29,400 --> 00:46:32,600
Speaker 6: meet with industry executives that we talked about this yesterday too,

961
00:46:32,680 --> 00:46:34,759
Speaker 6: so that meeting is going to be coming up. But

962
00:46:34,800 --> 00:46:37,520
Speaker 6: you had California Governor Gavin Newsom calling for federal tax

963
00:46:37,600 --> 00:46:40,000
Speaker 6: credits at least seven and a half million dollars.

964
00:46:40,640 --> 00:46:46,279
Speaker 2: From a theoretical standpoint, tax credits are more surgical, more

965
00:46:46,360 --> 00:46:50,600
Speaker 2: immediately successful than the silliness of tariffs. But I don't

966
00:46:50,640 --> 00:46:54,520
Speaker 2: see tim, I don't see tax credits working within a

967
00:46:54,719 --> 00:46:59,840
Speaker 2: hugely entrepreneurial entertainment basis where failures is.

968
00:47:00,200 --> 00:47:02,520
Speaker 5: This is not like making a lum can No.

969
00:47:02,680 --> 00:47:05,320
Speaker 4: I mean when you have a when you produce a film,

970
00:47:05,360 --> 00:47:08,000
Speaker 4: you're making a big bet. You're putting money down that

971
00:47:08,440 --> 00:47:10,680
Speaker 4: you know, you think it's going to actually be successful

972
00:47:10,680 --> 00:47:13,480
Speaker 4: in the theaters or on demand, and the hit rate

973
00:47:13,520 --> 00:47:14,479
Speaker 4: isn't necessarily great.

974
00:47:14,560 --> 00:47:15,640
Speaker 5: Tie into the metcale.

975
00:47:15,719 --> 00:47:16,080
Speaker 4: Let's tie it.

976
00:47:16,280 --> 00:47:19,560
Speaker 2: Anna Sawa looked lovely like z India, Iraq and the

977
00:47:19,600 --> 00:47:21,719
Speaker 2: White and Anna there was Shogun.

978
00:47:22,320 --> 00:47:23,680
Speaker 5: Shogun was a success.

979
00:47:23,760 --> 00:47:27,960
Speaker 4: Shows it was made in like three geographies including Canada. Right,

980
00:47:28,360 --> 00:47:30,600
Speaker 4: wasn't there a big shogun was in Canada too.

981
00:47:30,480 --> 00:47:33,759
Speaker 5: Yeah, Vancouver. The X Files started that. You know, you

982
00:47:33,760 --> 00:47:34,400
Speaker 5: can tell by the.

983
00:47:34,400 --> 00:47:37,440
Speaker 4: Trees Port Moody located near Vancouver.

984
00:47:39,200 --> 00:47:41,759
Speaker 6: Squeeze in here, Oh, squeeze in because you're a big

985
00:47:41,920 --> 00:47:43,840
Speaker 6: education So I want to put this out there. This

986
00:47:43,960 --> 00:47:47,040
Speaker 6: was an exclusive of the Wall Street Journal. Trump administration.

987
00:47:47,360 --> 00:47:50,279
Speaker 6: They've been talking about these different threats to colleges universities.

988
00:47:50,440 --> 00:47:50,680
Speaker 7: Now.

989
00:47:50,719 --> 00:47:52,880
Speaker 6: They it's kind of like an ultimatum, I guess, but

990
00:47:52,880 --> 00:47:55,640
Speaker 6: they're saying if former students don't pay back the loans,

991
00:47:56,040 --> 00:47:59,080
Speaker 6: then future students might not get any of themselves.

992
00:47:59,320 --> 00:48:03,520
Speaker 5: So that was just came about Lisa Mateo in the newspapers.

993
00:48:03,560 --> 00:48:04,440
Speaker 5: Thank you so much.

994
00:48:04,719 --> 00:48:09,520
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify,

995
00:48:09,640 --> 00:48:13,920
Speaker 1: and anywhere else you get your podcasts. Listen live each weekday,

996
00:48:14,040 --> 00:48:17,520
Speaker 1: seven to ten am Eastern on Bloomberg dot com, the

997
00:48:17,600 --> 00:48:21,640
Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You

998
00:48:21,680 --> 00:48:25,040
Speaker 1: can also watch us live every weekday on YouTube and

999
00:48:25,239 --> 00:48:26,960
Speaker 1: always on the Bloomberg terminal