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Speaker 2: Kathy Jones joins is to give a first look it yield.
Speaker 2: I look at total return on bond funds since the
Speaker 2: bond market broke three years ago whatever now two and
Speaker 2: a half years ago, and it ain't working. What's the
Speaker 2: value proposition in bonds versus buy in two year of
Speaker 2: Paul Sweeney two year yield forever?
Speaker 3: Yeah, well, we didn't have positive returns last.
Speaker 4: Year, and by look, you gotta do better than that.
Speaker 5: Yeah, I know, but we did.
Speaker 3: The agg was up in most categories except for very
Speaker 3: long long term bonds or international bonds had positive returns.
Speaker 3: And you know, the reason you buy bonds are for income,
Speaker 3: and right now they have income. You buy them for
Speaker 3: a capital preservation, just because.
Speaker 6: Borrowing you want to get your money back.
Speaker 3: You can get your money back, and for that sort
Speaker 3: of certainty, right and for diversification. So at some point
Speaker 3: in the sometime in the future, the stock market might
Speaker 3: go down, and generally bonds do pretty well in that environment, Kathy.
Speaker 5: For a long time we had an inverted yield curve
Speaker 5: in some folks like Cam Harvey at Duke University would
Speaker 5: tell you that means the recessions coming. We didn't get it.
Speaker 5: Now we've got the yeld curve steeping. I got the
Speaker 5: four I got the ten year at four to sixty,
Speaker 5: the two year four and a quarter. What is that
Speaker 5: steepening yield curve telling us?
Speaker 3: Yeah, this was one for the record books. We didn't
Speaker 3: get the recession after the inverted yield curve. I think
Speaker 3: it's telling us two things. It's telling us, yes, the
Speaker 3: market still looks for the Fed to cut a couple
Speaker 3: of times at the short end, but the long end
Speaker 3: is reflecting all of the risks that we have for
Speaker 3: inflation and for policy that may prove to be inflationary
Speaker 3: down the road. So we're going back to a more normal,
Speaker 3: steeper yield curve, and I think that continues.
Speaker 5: So what am I doing in terms of credit? Here?
Speaker 5: Do I take credit risk? Here? Do I just be
Speaker 5: comfortable in my treasury market?
Speaker 3: Yeah? I think you can take some credit risk. We
Speaker 3: are cautious on overdoing it on credit going too far
Speaker 3: down the spectrum, because we are starting to see defaults
Speaker 3: rise in the high yield market, in the lower credit
Speaker 3: quality part of the market. But investment grade companies, you know,
Speaker 3: they have cash flow that have strong earnings. It's really
Speaker 3: hard to fight that. So we'd continue at the investment rate.
Speaker 3: And you know, in the intermediate duration category.
Speaker 4: The real yield, what does that indicate to you? The
Speaker 4: nominally yield, folks, I think it's Paul, it's the beginning
Speaker 4: of the year. Like every jargon we use. We got
Speaker 4: to redefine it, right, even if it's slows a show
Speaker 4: down to Alisa Monteo crawl. We don't want to do that.
Speaker 2: But the real yield is the inflation adjusted yield. There's
Speaker 2: different ways to measure, but the answer is it's.
Speaker 4: Up up and a way. Does that impinge on Lizzie
Speaker 4: and Saunders economy?
Speaker 3: Well, I think at some stage of the game, other
Speaker 3: asset classes may look at the positive real yield of
Speaker 3: say two and a half percent, maybe moving up to
Speaker 3: three percent?
Speaker 2: Really are you well, we've gotta make some news here finely,
Speaker 2: can I put that on on YouTube?
Speaker 4: Kathy Jones models three percent ten year real yield.
Speaker 3: I don't think that it's out of the question at all.
Speaker 3: If you get a five percent ten year which is
Speaker 3: not out, which is within the range of potential outcomes
Speaker 3: that we have, and inflation continues to drift lower, you're
Speaker 3: going to get very close to that three percent real yield.
Speaker 3: And I would think at some point other asset classes
Speaker 3: would pay attention to that and say it's competition. But
Speaker 3: in terms of the economy, I notice Kathy both chantick
Speaker 3: I always have trouble with their name.
Speaker 5: But Centory.
Speaker 2: We got to take a pall here right now, Lisa Matteo,
Speaker 2: do you have trouble with Kathys Johnson's name?
Speaker 5: Best Paul, do you have trouble with you? And say, hey, friend, welcome.
Speaker 3: To a terrific e.
Speaker 4: She's a killer.
Speaker 2: I'm sitting there butchering. Mark Crumpton keeps a list of
Speaker 2: all the names that God I can pronounce Jones. But
Speaker 2: Mark Crumpton keeps a list of all the things I butchered.
Speaker 4: And at the top of the list is Kathley has
Speaker 4: studyed Good.
Speaker 2: Morning Kathy, a nationwide tell us about Kathy's announce well.
Speaker 3: She talked about productivity. So we can have high real
Speaker 3: yield if we have strong productivity, And that's the question mark.
Speaker 3: Does that continue or not?
Speaker 5: What does our Federal Reserve do over the next couple
Speaker 5: of meetings here? Because now, I mean we kind of
Speaker 5: started thinking six nine months ago it could be multiple
Speaker 5: breat cuts. Now the market's down to maybe one or two.
Speaker 5: What do you think? Yeah, I think.
Speaker 3: They're very cautious from here.
Speaker 5: They have to be.
Speaker 3: We'll get the minutes later this week of the meeting,
Speaker 3: which should be very interesting, but they have to be
Speaker 3: very cautious because there's so much policy uncertainty on the
Speaker 3: horizon and the economy continues to do better than they thought.
Speaker 4: Thank you so much for coming in today. Thanks liz
Speaker 4: Ane would have done this. I mean she's cold. She's like, no.
Speaker 5: Way, she's down in Florida.
Speaker 4: She said, exactly, Yeah what liz An smart? The rest
Speaker 4: of us moll that's O there is, Kathy Jones. Thank
Speaker 4: you so much for getting to start.
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Speaker 2: Glor Calvisina of RBC Capital Markets, Laurie, up twenty percent,
Speaker 2: up twenty percent. How do you model up up again?
Speaker 7: Well, thanks for having me, Tom, and happy new year.
Speaker 5: Look.
Speaker 7: I think you can't really do it from a valuation perspective.
Speaker 7: My valuation model is the most conservative one in our
Speaker 7: targeting process. But I do think on the sentiment side,
Speaker 7: we have an important development in December, which was that
Speaker 7: everybody got worried, and so we saw aaii net bulls
Speaker 7: fall from a range you know that had been one
Speaker 7: standard deviation above the long term average back in October.
Speaker 7: It stayed elevated as we got into early December, and
Speaker 7: it's pulled back now to the long term average. If
Speaker 7: you look at the four week average, and if you
Speaker 7: look at the weekly data point that came out last week,
Speaker 7: I think the bulls and the bears were basically at
Speaker 7: parody with one another, and that actually improves the setup
Speaker 7: for stocks going forward. So I think we can get there.
Speaker 7: I think you can. You can also have earnings help
Speaker 7: drive the market higher. I just don't think you get
Speaker 7: it from a valuation expansion perspective. I think we've really
Speaker 7: done the valuation expansion that we're going to do in
Speaker 7: this cycle.
Speaker 5: Hey, Lorie, how about earnings? How important are they going
Speaker 5: to be?
Speaker 3: Here?
Speaker 5: It seems like the Fed's not going to be doing
Speaker 5: too much heavy lifting forming in twenty twenty five. It
Speaker 5: feels like, and I can't imagine getting multiple expansion from here.
Speaker 5: So it feels like if any performance we're going to
Speaker 5: get in twenty five, it is going to be earnings driven.
Speaker 5: Is that a fair assessment?
Speaker 7: I think that's I think you hit the nail on
Speaker 7: the head, Paul. And look, I do think earnings have
Speaker 7: some challenges as we go into this next recording season. Namely,
Speaker 7: margin expectations have been coming down if you look at
Speaker 7: the bottom up sell side consensus estimates, that's been under
Speaker 7: their way since the middle of last year, actually, but
Speaker 7: it's continued as we look at these past few weeks.
Speaker 7: And if you think about, you know, sort of the dollar.
Speaker 7: A stronger dollar typically causes downward revisions, and I know
Speaker 7: the dollar has been all over the place, you know,
Speaker 7: and showing some weakness at least last I checked this morning.
Speaker 7: But the four Q strengthening that we had, that cake
Speaker 7: is already baked. So we've got to sort of see
Speaker 7: what companies say about that. And look, Paul, I've been
Speaker 7: doing this a long time. It always amazes me that
Speaker 7: when we go through these periods of dollar strength, I
Speaker 7: go in and you know, read earnings call transcripts, and companies,
Speaker 7: especially in healthcare and tech, like to blame weakness on
Speaker 7: the dollar. You know that everybody saw in real time,
Speaker 7: but nobody marks their models until we actually, you know,
Speaker 7: get to the end of the quarter. But I think
Speaker 7: you've got some little issues like that, and I do
Speaker 7: frankly expect companies to keep the bar somewhat low, just
Speaker 7: that we do still have some uncertainty in terms of
Speaker 7: things like taxes and tariffs. So I think earnings are
Speaker 7: going to be good and solid, but maybe not a
Speaker 7: ton of excitement here in the very short term.
Speaker 2: I want to talk about religion, Laurie, and that what
Speaker 2: I saw in all the wrap ups of last year
Speaker 2: in this great bul market. Take it back to Ben
Speaker 2: Laidler and Christmas Eveo. I believe twenty eighteen is the
Speaker 2: worship of free cash flow. They have nots the people
Speaker 2: that aren't trading it in Vidia multiples. Do they have
Speaker 2: a new religion to emphasize free cash flow growth or
Speaker 2: do we awake that. Why aren't more companies saying we
Speaker 2: got to boost free cash flow?
Speaker 7: It's an interesting question, ton. I'll tell you it's not
Speaker 7: a big part of my process, and that may be
Speaker 7: because I'm sort of overly influenced by my small cap
Speaker 7: days and I am a data nerd at heart. We've
Speaker 7: talked about that on this show before. But I will
Speaker 7: tell you that when I look at different databases and
Speaker 7: try to bring in free cash flow data, especially free
Speaker 7: cash flow estimates, it's really kind of garbage like when
Speaker 7: you try to aggregate it off to the market level.
Speaker 7: So I'm, not, to be honest, a big you know,
Speaker 7: sort of part of that philosophy.
Speaker 5: So, Laurie, as we think about twenty twenty five, it
Speaker 5: seems like, again two years in a row, we've had
Speaker 5: twenty percent plus returns in the SP five hundred, in
Speaker 5: large part tech driven. Quite frankly, it seems like this
Speaker 5: has been a tech driven market for fifteen years. Is
Speaker 5: tech going to be a leader in twenty twenty five?
Speaker 5: Does it need to be a leader in twenty twenty five.
Speaker 7: It's a great question, Paul. And if you actually go
Speaker 7: back and I think it was after Trump's first victory.
Speaker 7: We went back and looked at sector performance in the
Speaker 7: twelve month period after that first Trump victory that November election,
Speaker 7: and we found both financials and tech outperformed. So it
Speaker 7: doesn't shed a ton of light on the growth versus
Speaker 7: JALU trade at the sector level, but we did see
Speaker 7: growth stocks generally outperform in that period, and we've seen
Speaker 7: growth stocks, you know, big megacap tech type names, continue
Speaker 7: to hang on to their leadership here in the aftermath
Speaker 7: of this election as well. And look, I think a
Speaker 7: lot of people want this market to broaden out. You
Speaker 7: can count myself in that camp.
Speaker 4: Yeah.
Speaker 7: That being said, I think we have to understand and
Speaker 7: why we have had so many head fakes so far,
Speaker 7: and it is simply because the value part of the market,
Speaker 7: the rest of the S and P whatever you want
Speaker 7: to call it, has just not put up superior earnings
Speaker 7: growth and the mag seven you know that it has
Speaker 7: been fighting back, and we see it in terms of
Speaker 7: near term consensus expectations. They're still dominant even though a
Speaker 7: ramp down is anticipated, and long term earning growth expectations
Speaker 7: are still sitting at big highs relative to the rest
Speaker 7: of the market, and that is sustaining the premium valuation
Speaker 7: multiples until you break that. And I think a hotter
Speaker 7: economy than what we've been expecting, like more like a
Speaker 7: three percent economy than a two percent economy, I think
Speaker 7: can help that value part of the market. See earnings growth,
Speaker 7: you don't move up, but we're just not seeing it yet.
Speaker 7: And so I think, to be honest, if I look
Speaker 7: back at my December meetings, this whole go with value broadening,
Speaker 7: it just seems so consensus right now, especially in the
Speaker 7: fact that the earnings growth dynamics aren't shifting.
Speaker 2: Lloyd Kelvicina, I look at where we are, and what
Speaker 2: I'd suggest is sort of the zeitgeist now as everybody's
Speaker 2: pulling away the last five six days, I think like
Speaker 2: three hundred and sixty five days ago, we had the
Speaker 2: same thing going on. How do you interpret the pulling
Speaker 2: away we're seeing right now? People selling Meg seven, people
Speaker 2: lightening up.
Speaker 7: Yeah. Look, I think there is a natural inclination to
Speaker 7: take some profits when you've had this frothy sentiment in place,
Speaker 7: and I don't think people realize how much the sentiment
Speaker 7: started to unravel. But there's been a big concern about valuations,
Speaker 7: and we've got a lot of uncertainty on the policy front,
Speaker 7: so I do think it makes sense to sort of
Speaker 7: retrace here a little bit, take some profits and see
Speaker 7: where we need to redeploy in a bit.
Speaker 2: Laurie, thank you so much, Lori Kelvisina, RBC Capital Mark.
Speaker 4: It's just a huge value.
Speaker 2: Ed.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
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Speaker 2: Procest Nation on your commute this morning, the one everyone
Speaker 2: on transportation is watching. No, Paul, it's not the build
Speaker 2: out in ink or what they're doing with JFK terminal wone.
Speaker 4: Jenna Lieber joins us.
Speaker 2: Today running the MTA off of this congestion tax in
Speaker 2: New York, and we're thrilled the Bloomberg Surveillance will bring
Speaker 2: them to you for the entire risk of this hour.
Speaker 2: An incredibly busy day, important Monday for you. I've got
Speaker 2: one question which Krity grouped in London actually brought up
Speaker 2: because I know Paul's fired up here with a bunch
Speaker 2: of questions as well. Part of the bargain in Stockholm
Speaker 2: is they have a world class taxi service. Part of
Speaker 2: the bargain in London is they have a world class
Speaker 2: taxi service. I'm in taxis constantly here that are third world.
Speaker 2: How does this congestion tax get us is crity goop
Speaker 2: dimension to a better taxi experience?
Speaker 8: I think, Tom, thanks thanks for having me. I think
Speaker 8: that the taxis in New York are dominated, as we
Speaker 8: all know, by Uber and Lyft, and they actually are
Speaker 8: looking forward to having.
Speaker 4: You interrupt here. You're telling the poor people of New
Speaker 4: York City to take an Uber.
Speaker 8: Yeah, you know what, the right now that the cost
Speaker 8: difference between Uber and taxis is not all that great.
Speaker 8: I'm not in the taxi business, so I'm trying to
Speaker 8: answer your question. But the point is with more with
Speaker 8: less congestion on the roads, you're going to have the
Speaker 8: taxi industry, I think is going to do better. I mean,
Speaker 8: people will be able to move more quickly, pick up
Speaker 8: more rides, and for what is actually seventy five cents
Speaker 8: per ride when the average ride of a taxi taxi
Speaker 8: ride now in New York is like twenty five bucks,
Speaker 8: so seventy five cents a ride, and they're going to
Speaker 8: be able to move much more quickly, take more rides.
Speaker 8: I think it's going to be good for the industry.
Speaker 5: Part of the outcome that you guys are hoping for,
Speaker 5: that we're all hoping for as a city is reduced traffic,
Speaker 5: reduced congestion within the city. When don't we know if
Speaker 5: that's actually happening.
Speaker 6: It's a good question.
Speaker 8: It's going to take a while to obviously, to take effect.
Speaker 8: New York is adjust and they are resilient, but it's
Speaker 8: gonna take a little while. So we're gonna be watching
Speaker 8: it very closely, day by day, week by week. I
Speaker 8: don't expect to see some dramatic change on the first
Speaker 8: or the second day.
Speaker 6: Over time.
Speaker 8: We're expecting a ten to twenty percent reduction in traffic.
Speaker 8: That's what we're shooting for. But Paul, the big issue
Speaker 8: here is New York is leading New York Is and
Speaker 8: I think I know you're an international outfit. New York
Speaker 8: is becoming a twenty first century city. We just did
Speaker 8: you know two train terminals in the last couple of years,
Speaker 8: La Guardi Airport a total rebuild. It's number one in
Speaker 8: the country. JFK is getting rebuilt. I know your Newark
Speaker 8: Airport is getting investment. This is about being a twenty
Speaker 8: first century city where we don't spend all our time
Speaker 8: stuck in traffic. The business community that has always supported
Speaker 8: congestion pricing under Mike Bloomberg's lead in part because it,
Speaker 8: you know, congestion and time spending traffic is a tax
Speaker 8: on our economy.
Speaker 5: A lot of folks view this congestion price as simply
Speaker 5: a tax on consumers. Your budget is nineteen billion dollars.
Speaker 5: I believe that the MTA is for twenty twenty four.
Speaker 5: You need more money. That's what a lot of folks
Speaker 5: are saying.
Speaker 6: Listen, this is as you said.
Speaker 8: This is ninety percent of the people who come to
Speaker 8: the central business this or take transit. We're carrying six
Speaker 8: to seven million people a day on mass transit. So yeah,
Speaker 8: we have we have to pay a lot of people,
Speaker 8: and eighty percent of our cost is wages and pensions
Speaker 8: and benefits. No question, we'd have to pay a lot
Speaker 8: of people to deliver that service. But the bottom line
Speaker 8: is congestion pricing is about the benefits. It's about not
Speaker 8: just money for the MTA, but about lower traffic, cleaner air,
Speaker 8: safer streets, and a more functioning economy. That's the goal.
Speaker 8: That's why London did it, and that's why we're following.
Speaker 4: I was in.
Speaker 2: Paris last week and all I could say is what
Speaker 2: a difference in congestion. It was just beyond pleasant. When
Speaker 2: are we going to see results? Are we talking tuesday
Speaker 2: and we talk in twenty twenty seven?
Speaker 8: Listen, I want to sit here and tell you I
Speaker 8: have a crystal ball. The bottom line is adjustments are
Speaker 8: going to be made. It's gonna definitely take place over time.
Speaker 8: Let's watch it together. There's gonna be total transparency on
Speaker 8: the MTA side. We're gonna have a you know, a
Speaker 8: dashboard app for everybody to look at how many cars
Speaker 8: came in as compared to before the system went in,
Speaker 8: and how many of them are chargeable, and we're gonna
Speaker 8: be monitoring it close.
Speaker 2: Number one question I get is what happens, folks, For
Speaker 2: those of you across the nation and worldwide. The outer
Speaker 2: rege of Manhattan North South is the FDR in the
Speaker 2: West Side Highway. What happens to those two important thoroughfares
Speaker 2: where I believe there's no congestion text.
Speaker 8: Yeah, well, the idea is that these are so called
Speaker 8: excluded roadways that are on the edge of Manhattan, that
Speaker 8: people should be able to use them to get around
Speaker 8: the congestion zone. Listen, we have to We always talk
Speaker 8: about drivers like the dominant reality. I know you guys
Speaker 8: take trans At ninety percent of people who come to
Speaker 8: the Central Business State history take transit. There are only
Speaker 8: one hundred and thirty thousand people coming to the CBD
Speaker 8: who drive their personal cars as opposed to a million
Speaker 8: and a half jobs. So I don't think that we're
Speaker 8: gonna have some catastrophic traffic impact because a portion of
Speaker 8: those people do elect to take transit, or that people
Speaker 8: are avoiding the charge. I think we're gonna see it
Speaker 8: all get baked in over time, but we're gonna watch
Speaker 8: it closely, and we're gonna talk to you about it.
Speaker 8: We have a new president coming in in a couple
Speaker 8: of weeks. I'll hear your tunnel exactly.
Speaker 5: Now, just what do you what do you think president
Speaker 5: in president like Trump will do if anything about this plan.
Speaker 6: I don't know.
Speaker 8: You know, we got sued by in every every court front.
Speaker 8: You know east of the Mississippi's.
Speaker 4: Gonna say, is there anyone who hasn't sued you? Yeah?
Speaker 4: But Lisa Tay, are.
Speaker 6: You filing this party?
Speaker 4: Yeah?
Speaker 8: But you know what, we went every lawsuit because we
Speaker 8: did a four thousand page study. The FEDS approved it.
Speaker 8: You know, it took five years to do the study.
Speaker 8: It takes about five minutes to figure out New York
Speaker 8: as a congestion problem if you stand in midtown. But
Speaker 8: the what President Trump is going to do, I'm not certain.
Speaker 8: There's a lot of Republican politicians who are against mass
Speaker 8: transit and who.
Speaker 6: Rail about this.
Speaker 8: President Trump is also in New Yorker ruins office buildings,
Speaker 8: and ninety percent of the people who work in his
Speaker 8: office buildings come on mass transit, So I'm optimistic that
Speaker 8: he will get it.
Speaker 2: We are on a General Libo's Lever's CEO of the
Speaker 2: MTA with us today for this extended block. Here we
Speaker 2: welcome all of you on Bloomberg Surveillance nationwide and you
Speaker 2: commute and on YouTube subscribe to Bloomberg Podcast. To say
Speaker 2: the least, I have talked to Mayor Adams not once,
Speaker 2: but twice about a New Orleans experiment. I believe over
Speaker 2: in Europe a free bus service for the poor. The
Speaker 2: congestion text is about fancy people like Paul Sweeney in
Speaker 2: his ginormous car or me being driven by the Bentley
Speaker 2: Down Fifth Avenue.
Speaker 4: Forget about it. What do we do to help.
Speaker 2: Really needy people who need to commute from to say,
Speaker 2: Rockaway Beach up to wherever?
Speaker 8: Okay, well, let's just be real, because ninety five plus
Speaker 8: percent of those people you're talking about, low income people
Speaker 8: who live in the boroughs, take transit. They don't drive
Speaker 8: because parking in midtown is Should we offer them free
Speaker 8: bus search you know what we're offering. What we're offering
Speaker 8: is we have them for the first time. The MTA,
Speaker 8: under Mayor Adams leadership, has been pushing a fairfares program
Speaker 8: that cuts the price of transit in half for low
Speaker 8: income people. And you know what, Tom, Transit is one
Speaker 8: of the very few things that makes New York affordable.
Speaker 8: It's fifteen percent the cost of owning a car. It's
Speaker 8: already a good deal at full price. At half price,
Speaker 8: it's out of sight. And so I'm confident we're dealing
Speaker 8: with the concerns of that community as well as the
Speaker 8: broader goal.
Speaker 2: What is a delta in going from Daniel is all
Speaker 2: over me here she's she and Michelle CASKI have done
Speaker 2: great work for Bloomberg and is Daniel Moran? What has
Speaker 2: been the delta from fifteen dollars down to nine dollars?
Speaker 4: How does that change the Jena Lieber World?
Speaker 6: Good question. Listen, Governor Hope, only good one of the day,
Speaker 6: stay with us. Yeah.
Speaker 8: So so Governor Hokeel, after we were moving towards implementing
Speaker 8: in June, decided that she wanted to take away the
Speaker 8: sticker shock and so she, after a pause, knocked it down,
Speaker 8: knocked the price down by forty percent, so instead of
Speaker 8: fifteen bucks for.
Speaker 4: Does she called you? Where did you learn about it?
Speaker 4: She called?
Speaker 6: She called, she called me.
Speaker 8: It was shortly before she announced it, and it certainly
Speaker 8: was a shock to the system for some of the
Speaker 8: folks who have been working on this, but in the
Speaker 8: end it has worked. What has done is it's message
Speaker 8: to the public that we are looking at an easy implementation,
Speaker 8: that she's worrying about affordability, but we're getting the benefits.
Speaker 8: Tom that you said, what's how does it affect the MTA?
Speaker 8: How does it affect me?
Speaker 6: We will.
Speaker 8: It will take us a little longer to raise the
Speaker 8: statutorily required fifteen billion dollars, but we have enough work
Speaker 8: going on that we can continue to make progress on
Speaker 8: rebuilding the subway system. In the meantime, it's been a
Speaker 8: net net positive.
Speaker 5: We're going to be One of the intentions for congestion
Speaker 5: pricing is to drive more of transit folks to the subways.
Speaker 5: How about safety the subways?
Speaker 6: Where are we there?
Speaker 5: Because there's a you know, a concern is that you're
Speaker 5: well well aware that post pandemic maybe not listen.
Speaker 6: You know, the overall stats are positive.
Speaker 8: We had last year we were actually twelve and a
Speaker 8: half percent less crime than twenty nineteen, the last year
Speaker 8: before COVID. But there's no question that some of these
Speaker 8: high profile incidents, you know, terrible attacks, have gotten in
Speaker 8: people's heads and made the whole system feel less safe,
Speaker 8: and there's a little bit of disorder that's crept into
Speaker 8: the public space since COVID. There's no question about it.
Speaker 8: I say, the criminal justice system has to do its
Speaker 8: job and make sure these people who do that kind
Speaker 8: of stuff, most of them who have long rap sheets
Speaker 8: are put away. There are very very few of these folks,
Speaker 8: but they have an impact from people's sense of safety,
Speaker 8: and we need to deal with them in a way
Speaker 8: that protects the riders.
Speaker 2: First time I went down the stairs on a Tokyo subway, Yeah,
Speaker 2: there were the guard rails or the walls or whatever.
Speaker 4: We put a man on the moon. This is New
Speaker 4: York City.
Speaker 2: You mentioned the shining light of La Guardia nineteen billion
Speaker 2: on JFK as well.
Speaker 4: Can't we put up.
Speaker 2: Guard wheels guardrails quickly in our subways?
Speaker 8: You're absolutely right. The quickly part is the one challenge.
Speaker 8: I would say, we got well.
Speaker 5: New York City quick like, We've put a million.
Speaker 8: We put a billion dollars in our new capital program
Speaker 8: since fair evasion and this whole phenomenon has definitely accelerated
Speaker 8: post COVID. We put a billion dollars in our new
Speaker 8: capital program for that. So we are going to start
Speaker 8: to replace all these turnstiles which work when I was
Speaker 8: a kid, but clearly aren't effective now for in the
Speaker 8: era that we're living in.
Speaker 6: We got to replace him. You're absolutely right, But are
Speaker 6: we going to put in walls to protect people at
Speaker 6: the edge of the subway?
Speaker 2: Lisa Monteo and I are sitting at home with our offspring,
Speaker 2: go and take the uber.
Speaker 4: That's the reality. JOHNA.
Speaker 8: Okay, so listen, there's we have started to put up
Speaker 8: you know, barriers chop chop, which is really literally these
Speaker 8: these little little half half height walls along the platforms,
Speaker 8: and we're going to accelerate doing that. One complexity is
Speaker 8: those super high tech barriers that you get in you know,
Speaker 8: European train stations and the newer stuff literally are too
Speaker 8: heavy for the platforms that our one hundred year old
Speaker 8: system has, so we can't do that. But we're going
Speaker 8: to start to accelerate these barriers so that anybody can
Speaker 8: position themselves so they feel safe on a subway platform.
Speaker 8: We don't want people to feel otherwise.
Speaker 5: So I know, when conceiving of this plan here, there
Speaker 5: are a lot of exceptions for different people who would
Speaker 5: be exempt from this congestion pricing. For example, the Hampton
Speaker 5: Jitney is exempt, yet personal firefighters personal vehicles to get
Speaker 5: them into the firehouses are not. That seems kind of odd,
Speaker 5: but I noticed trade offs everywhere.
Speaker 8: Yeah, I mean the point is, well, there was across
Speaker 8: the word. This was done by a panel that was studied.
Speaker 8: There are one hundred and thirty separate requests for exemptions,
Speaker 8: and what they said is what we're going to exempt
Speaker 8: is low We're going to exempt disabled people. We're going
Speaker 8: to give a huge discount to low income people, and
Speaker 8: we're going to make sure that buses which are a
Speaker 8: form of mass transit, whether they're operated by the MTR otherwise,
Speaker 8: are exempt. That's where you get something like the Hampton Gitney. Now,
Speaker 8: in fairness, Hamptonjitney has fifty people on it, and if
Speaker 8: those people drove, it would take up a lot of rooms.
Speaker 8: So it makes sense. We don't talk about personal vehicles.
Speaker 8: We're not going to choose who is, you know, special.
Speaker 8: The real goal here is to have people make rational choices.
Speaker 8: If they want to get their employer to pay them
Speaker 8: to drive in, that's fine, but that's not for the
Speaker 8: government to decide.
Speaker 6: The broad decision was what it was.
Speaker 8: But let's you know, today is really a historic day,
Speaker 8: and we ought to be focused on the fact that
Speaker 8: New York is back to leading, that we're doing what
Speaker 8: Meyer Blumberg did in the old days, which is New
Speaker 8: York's a problem solved. We're in the problem solving business.
Speaker 8: We're dealing with our problems and like government seems paralyzed
Speaker 8: a lot of the United States. We are dealing with
Speaker 8: the realities and what it takes to be a twenty
Speaker 8: first century city.
Speaker 2: Daniel Moran is writing this up and she's like, Okay,
Speaker 2: we're leading the way.
Speaker 4: What's the next city to do this?
Speaker 6: You know, nation Why that's a good question. You know
Speaker 6: they all doors.
Speaker 2: Locked over there, Danielle says, you can't get out unless
Speaker 2: you answer the quest.
Speaker 8: Well, they all call me and they say and they
Speaker 8: and they ask for information because they're all taking a
Speaker 8: look at Boston. It could be because the key is
Speaker 8: we are so lucky, because cities all over the United
Speaker 8: States have traffic problems like crazy, and it's crushing their
Speaker 8: economy and their development pattern and their appeal to employers.
Speaker 6: But only New York.
Speaker 8: Has this out of sight mass transit system. Maybe Boston,
Speaker 8: maybe Washington, maybe Chicago, because they have the alternative.
Speaker 2: I'm cutting you some slack here, and folks, let me
Speaker 2: tell you, I'm not even part of this debate.
Speaker 4: I was below fifty seventh Street once last year. Yeah,
Speaker 4: I have no life. What I went to Brooklyn a
Speaker 4: couple of years ago.
Speaker 5: It's beautiful.
Speaker 2: Come on over, I thought it was Brooklyn, Massachusetts, and
Speaker 2: they said, no, it's Brooklyn, New York.
Speaker 5: General.
Speaker 4: Let me let me cut to the chase here in
Speaker 4: the heart of the matter.
Speaker 2: Somebody once explained to me that New York is not London.
Speaker 2: We're not la You've got X number of bridges, x
Speaker 2: number of tunnels. It's it's a challenge here like no
Speaker 2: other challenge. Where's the bottleneck.
Speaker 4: Going to be? With the congestion text?
Speaker 8: You know, I think that the great thing is if
Speaker 8: you reduce traffic in general, there's less chance of bottlenecks
Speaker 8: across the board. That's the benefit that even the people
Speaker 8: who have to drive or choose to drive, are going
Speaker 8: to get a better experience so their time is not
Speaker 8: wasted stuck in traffic.
Speaker 6: That's the goal.
Speaker 8: I don't know exactly where the bottle neck's going to be,
Speaker 8: but the goal is to have fewer of them.
Speaker 6: So we're Wall Street, we're global. Wall Street.
Speaker 5: Talk to us about this bond that's going to be
Speaker 5: issued a what is it? And when will you guys
Speaker 5: issue this some bonds to raise capital to then invest
Speaker 5: back into this good question.
Speaker 8: So ourf CFO at the MTA, Kevin Willans ran Munifinance
Speaker 8: at Goldman for many years.
Speaker 6: Kevin Is.
Speaker 8: When the governor dropped the toll by forty percent, he
Speaker 8: took a hard look when that started to unfold at
Speaker 8: whether we could still raise the money that the statute
Speaker 8: that the law requires fifteen billion dollars to be raised
Speaker 8: from the revenues. And the answer is yes, we can
Speaker 8: do it. It will take slightly different structure, it will
Speaker 8: take a different length of time, but we're going to
Speaker 8: be able to do it, probably in multiple bond offerings
Speaker 8: rather than a single one. Originally they planned a single
Speaker 8: bond offering fifteen billion. Now it's going to probably take
Speaker 8: a couple of years and a couple different offerings.
Speaker 2: You've been more than jens of your time. I want
Speaker 2: to talk about the reality, and I'm speaking for the
Speaker 2: headquarters here the investment mister Bloomberg has made. I should
Speaker 2: mention folks Mike Bloomberg the former mayor of New York
Speaker 2: and he is, of course the owner of Bloomberg Radio,
Speaker 2: Bloomberg Television, and I think does he sign your paycheck?
Speaker 2: I think he says as well, Yeah, it's just simple.
Speaker 2: We go up Third Avenue and it's ruined. I got
Speaker 2: a bike lane, I got bus lanes. I got some
Speaker 2: kind of parking in the middle. Basically, we've taken six
Speaker 2: lane streets five lane streets down to two and you're
Speaker 2: living it as well. I got an Amazon truck on
Speaker 2: the right and a FedEx truck on the left. Now
Speaker 2: everybody's going up Park Avenue because they can't get up
Speaker 2: Third Avenue.
Speaker 4: That's just my little soap opera.
Speaker 2: How do we get rid of the parking issue? Peter
Speaker 2: Coyt The New York Times has been brilliant on this.
Speaker 2: How do we change parking so Third Avenue is in
Speaker 2: a driveway?
Speaker 8: Well, I mean, listen, we got these are issues that
Speaker 8: the City of New York is going to have to
Speaker 8: wrestle with. You talked about how good your experience was
Speaker 8: in Paris, and Paris has done a lot to make
Speaker 8: it easier for bikes and pedestrians and to take away
Speaker 8: a little room for cars. That is part of the
Speaker 8: strategy that's been effectively followed. But I'll say this when
Speaker 8: we thankfully the city is getting rid of dining sheds,
Speaker 8: which took up a Yeah, getting rid of dining sheds.
Speaker 8: You know, we love our restaurants. They're rocking and soccing
Speaker 8: after COVID, But we don't need to give out free
Speaker 8: real estate in the middle of the street uh anymore
Speaker 8: because people can't go indoors. So so that is one factor.
Speaker 8: But I'm for more more uh by. You know, the
Speaker 8: bike lanes and certainly the bus lanes. If we can
Speaker 8: put fifty people on a bus who would otherwise be
Speaker 8: driving fifty individual cars, it's a net positive for the city,
Speaker 8: even for the drivers. So we got to keep focused
Speaker 8: on on a street scape that works. But you know,
Speaker 8: it's still it's still it's still a work in progress. Tom,
Speaker 8: We're still learning and coming out of COVID with the
Speaker 8: dining sheds, I think we're we got to make some progress.
Speaker 4: Sweeting demands. We got breaking news here. Can you solve
Speaker 4: the New York Giants and the Jets?
Speaker 5: Can you like a Giant?
Speaker 8: I'm a Giants fan and I stopped paying attention about
Speaker 8: two months ago.
Speaker 5: Well, there's some breaking news here. They decided this morning
Speaker 5: they're going to keep the GM, keep the coach, Joe
Speaker 5: Shane's GM, Brian Dabolos coach. They're going to be retained.
Speaker 4: Genna, thank you so much. Jenna leaves the MT.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto
Speaker 1: with the Bloomberg Business app. You can also watch us
Speaker 1: live every weekday on YouTube and always on the Bloomberg
Speaker 1: terminal you day.
Speaker 2: Look at the front page is Lisa mateo moment, Lisa,
Speaker 2: what do you have?
Speaker 5: Okay?
Speaker 9: This is a new Wall Street Journal analysis of test scores.
Speaker 5: This is really interesting.
Speaker 9: It shows girls have lost ground in reading, math, and science,
Speaker 9: and people are really concerned about it. This is since
Speaker 9: twenty nineteen, test scores have dropped sharply. They're calling that
Speaker 9: the pandemic learning loss. Boys' scores have also dropped, but
Speaker 9: the girls decline is worse. So the reason why they're
Speaker 9: saying it is because arise in behavior patterns during the pandemic.
Speaker 9: It forced teachers to pay more attention to the boys
Speaker 9: because they tended to act out more in class. And
Speaker 9: then during and after the pandemic, a lot of the
Speaker 9: girls took on those caregiving household responsibilities, so it took
Speaker 9: their focus away from school.
Speaker 5: So I just thought it was a just I mean,
Speaker 5: it's gonna be years, yeah, years out. That was oh
Speaker 5: sure that we learned what the real impact is going
Speaker 5: to be.
Speaker 2: I got this wrong, and I learned about this from
Speaker 2: Bloomberg employees, the anecdotal evidence of our twenty one thousand employees.
Speaker 2: I learned the pandemic and our children's education just changed that.
Speaker 4: What else do you I.
Speaker 3: Totally see it.
Speaker 9: The gambling industry is using a lot of artificial intelligence
Speaker 9: to get more money from Americans. So some of the
Speaker 9: ways they're doing it startups their profiling gamblers, so they're
Speaker 9: feeding them content games personalized to what they like, convincing
Speaker 9: them to stay longer, make bigger bets. They're using these
Speaker 9: large language models so generate a lot of things autoated summaries.
Speaker 9: And then even you get to the physical casinos using AI,
Speaker 9: because they're using machine learning to optimize where they place
Speaker 9: the slot machines, because even that kind of matters.
Speaker 5: It does I mean, you're walking in and out of
Speaker 5: the casino floor slot machines for every ingress and egress.
Speaker 5: I learned that from doing the casino investing.
Speaker 2: Do you think AI will do to this surgeon NFL football,
Speaker 2: which is a surgeon betting? Yeah, I mean they got
Speaker 2: to be used in it to learn every single.
Speaker 4: Thing you need to do to win money on the
Speaker 4: patriots because you knew they were going to beat the bills.
Speaker 6: Yep.
Speaker 5: And one tangible practical implementation of AI is advertising because
Speaker 5: they can figure out better target who you are and
Speaker 5: what you want and what adds will work for you.
Speaker 5: That's happening today from Google and Facebook.
Speaker 2: Lisa Manitaeo, thank you so much. Good to have that
Speaker 2: for us here the newspapers with Lisa Wantay, and we'll
Speaker 2: do much more of this into the week and into
Speaker 2: today as.
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify,
Speaker 1: and anywhere else you get your podcasts. Listen live each weekday,
Speaker 1: seven to ten am Eastern on Bloomberg dot com, the
Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You
Speaker 1: can also watch us live every weekday on YouTube and
Speaker 1: always on the Bloomberg terminal.