Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along
Speaker 2: with Paul Sweeney. Join us each day for insight from
Speaker 2: the best in economics, finance, investment, and international relations. You
Speaker 2: can also watch the show live on YouTube. Visit the
Speaker 2: Bloomberg Podcast channel on YouTube to see the show weekday
Speaker 2: mornings from seven to ten am Eastern from our global
Speaker 2: headquarters in New York City. Subscribe to the podcast on Apple, Spotify,
Speaker 2: or anywhere else you listen and always I'm Bloomberg Radio,
Speaker 2: the Bloomberg Terminal, and the Bloomberg Business App. We're gonna
Speaker 2: start strong. Stuart Kaiser is going to be with the
Speaker 2: sunny equity market, set her moment, Tom Vercelli on later
Speaker 2: of course, on FED Day and the myriad challenges that
Speaker 2: Jay Paul has. But we start especially strong. You know,
Speaker 2: she's an iron Woman, really, Gargey's out of Jones Beach. Okay,
Speaker 2: she She's like, you know, we're punting. I mean, Gargy
Speaker 2: is toughest nails with black Rock, and you know she's
Speaker 2: doing the Iron Man thing and and all that. Yeah,
Speaker 2: you know, it's like like pray eth a lot but tough.
Speaker 2: I don't know Garge's with us this morning. Gardy, thank
Speaker 2: you so much for starting strong. What happens to your
Speaker 2: world if rates keep going higher?
Speaker 3: Good morning, Paul and Tom. Longtime listener, first time joiner,
Speaker 3: Really excited to be here. So what happens to my
Speaker 3: world if rates continue to go higher? Two things. Number One,
Speaker 3: there's going to be continued focused on selectivity within equities,
Speaker 3: and the areas of the equity market in the US
Speaker 3: that have earnings growth are continue are going to continue
Speaker 3: to outperform. So that's number one. Number two, And you know,
Speaker 3: we've been talking about this for a while, and Tom,
Speaker 3: you know, you and I have chatted about this before.
Speaker 3: But the long end, anything sort of longer than the
Speaker 3: five to six year part of the interest rate curve
Speaker 3: is going to become more and more difficult for investors,
Speaker 3: especially given that, you know, given that there has been
Speaker 3: five percent that you can earn or more in cash.
Speaker 3: So I think two things for investors to keep in
Speaker 3: mind is staying in high quality in the equity markets
Speaker 3: and staying in the very front end to maybe the
Speaker 3: belly of the curve in fixed and come markets. I
Speaker 3: think that's going to be the exact.
Speaker 2: I'm looking at the real rate. Kenneth Roguoff of Harvard
Speaker 2: was with David West and Wall Street week. Look for
Speaker 2: that this week, and Professor Rogoff is riveted on the
Speaker 2: real yield, the inflation adjusted yield. I'm sorry, Gargey. If
Speaker 2: it walks like a duck, works like a duck, it's
Speaker 2: a duck. And the ten year real yield I'm rounded
Speaker 2: up to two point two eight percent is the real
Speaker 2: yield walking away from us.
Speaker 3: It looks like, you know, obviously, it has arisen pretty
Speaker 3: meaningfully for good reason. If we look at the month
Speaker 3: of April, everything that we have gotten so far, whether
Speaker 3: it's the payroll data, whether it was ISM in the
Speaker 3: beginning of the month, whether it was CPI and PCE,
Speaker 3: all of that have contributed to yields moving higher. What
Speaker 3: I will say, though, and you know this is something
Speaker 3: that we lay out in our Spring Investment Directions, is
Speaker 3: owning real rates in the very short end, so sort
Speaker 3: of the zero to five year part of the curve
Speaker 3: we think make a lot of sense. And if you
Speaker 3: look at returns for the month of April, and if
Speaker 3: you compare sort of what s step has done versus
Speaker 3: many of the other front end securities or longer fixed
Speaker 3: income securities. You've actually been a little bit more preserved
Speaker 3: being in the front end of the inflation link curve.
Speaker 3: Why because inflation has surprise to the upside, and you know,
Speaker 3: for a big part of the month, oil was surprising
Speaker 3: to the upside as well. So we do think that
Speaker 3: front end inflation can be a good place for investors
Speaker 3: to be invested in, especially at these really strong real rates.
Speaker 3: But again, keeping your duration short is very important.
Speaker 4: So Gark, I like to keep in the duration short
Speaker 4: call here, Should I just park my money in the
Speaker 4: two year United States Treasury at five point zero three percent?
Speaker 4: Is that is that the trader? Should I take some
Speaker 4: take some credit risk here? And maybe you know, I
Speaker 4: don't know, corporates are high yields. How do I think
Speaker 4: about credit versus just the treasury market?
Speaker 3: Yeah, look, it's it's really attractive. You know, you look
Speaker 3: at two years, you look at where they are, where
Speaker 3: it is, and it's certainly very attractive. But I would
Speaker 3: also say that as of right now, the economy looks good. Yes,
Speaker 3: the first look at the first quarter GDP was a
Speaker 3: little bit softer than expected, but we're still growing much
Speaker 3: higher than what expectations were coming into the years. So credit,
Speaker 3: we think will remain okay. And if you look at
Speaker 3: owning sort of that front end, corporate credit maybe in
Speaker 3: the one to three are part of the curve, you
Speaker 3: are picking up a little bit of extra carry, and
Speaker 3: we think that makes sense and I want to highlight
Speaker 3: those that, especially given how tight spreads are both in
Speaker 3: ig credit as well as high as well as high yield.
Speaker 3: You know, when you look at for centile levels, they're
Speaker 3: at their riches that they have been on a spread basis,
Speaker 3: but then when you look at in yield basis, they're
Speaker 3: obviously a lot more attractive. So I think selectivity really
Speaker 3: plays a role here. So looking at you know, we're
Speaker 3: telling investors, if you're looking at high yield, go into
Speaker 3: defensive high yield, and look at if you're looking into
Speaker 3: corporate credit or even securitized asset, go with an active
Speaker 3: manager that can actually pick the bonds for you where
Speaker 3: you can earn your income, earn your carry, but at
Speaker 3: the same time be a little bit preserved for some
Speaker 3: of that downside given the level of the tightness of spreads.
Speaker 4: All right, for those out there that want to take
Speaker 4: some equity risk here. I mean, I'm not sure what.
Speaker 2: To do here.
Speaker 4: I mean, we've all kind of grown up over the
Speaker 4: last fifteen twenty years with technology leading the way. Do
Speaker 4: I just stick with the big tech names, or do
Speaker 4: I try to find some value out there, whether it's
Speaker 4: financials or energy or consumer staples.
Speaker 2: Yeah.
Speaker 3: So, you know, again, if we look at the just
Speaker 3: even since the earnings that have come up just over
Speaker 3: the last week or so, I think what we're finding
Speaker 3: is that earnings growth is coming. You know, it is
Speaker 3: surprising to the upside, which is part of the reason
Speaker 3: why last week we had an okay week in the markets.
Speaker 3: I think focusing on areas of the market, of the
Speaker 3: equity market where earnings growth remains stable, which companies which
Speaker 3: are able to generate cash flow, companies that very importantly
Speaker 3: have low leverage, and we call that high quality companies.
Speaker 3: I think that is what investors should focus on. And
Speaker 3: you know, the question that we get over and over
Speaker 3: again from investors from clients when they're building their portfolios
Speaker 3: is that, you know, is this the time to get
Speaker 3: into cyclicals and is this the time to get into
Speaker 3: small caps? And that is where you know, when we
Speaker 3: look at a portfolio analysis, we see that investors are
Speaker 3: largely overweight small caps, and we think that in this
Speaker 3: rising rate and higher rate period, away from the small
Speaker 3: cap and into larger companies, larger cap quality companies is
Speaker 3: what makes sense.
Speaker 2: We're out of time. Thank you so much, Gary Chattery.
Speaker 2: This is the black rock. Stuard Chuycer with us right now.
Speaker 2: Let's get right into it. An important conversation. He has
Speaker 2: been incredibly on on this great bull market, a very
Speaker 2: articulate voice on having the courage to stay in. Oh
Speaker 2: my word, a drawdown four point two percent SPX. I
Speaker 2: know you're gonna tell me there's an opportunity here because
Speaker 2: you are a bull. What does your world do if
Speaker 2: Powell or Paul Sweeney force interest rates higher? What what
Speaker 2: happens to the equity world if the real yield breaks
Speaker 2: through to two point three to zero two point three
Speaker 2: two percent?
Speaker 5: I mean, there's definitely gonna be pressure on markets. I
Speaker 5: think if really yields keep rising, to us, it's more
Speaker 5: the velocity move than the level though. I mean, I
Speaker 5: think if we moved twenty basis points higher and then stabilized,
Speaker 5: I think equities can deal with that just fine. But
Speaker 5: you know, what we've had is just a very rapid,
Speaker 5: you know, sort of acceleration that's been disrupted.
Speaker 2: Am I stunned that the VIX is sixteen point eight
Speaker 2: When I look at the interest rates soup into the
Speaker 2: one point thirty the Fed sides folks today on Bloomberg Radio.
Speaker 2: When I look at where we are in a sixteen
Speaker 2: point oh eight, let's feeling like a twenty. Why is
Speaker 2: the VIC sixteen point oh eight?
Speaker 5: Yeah, Look, I think it's the reason the VIX is is,
Speaker 5: I think lower than most people expect, is because the
Speaker 5: markets not realizing a lot of volatility. Right The realized
Speaker 5: volatility over the last ten days is probably twelve and
Speaker 5: a half. So it's pretty hard to get the vics higher.
Speaker 2: When day to day the equity markets just aren't moving
Speaker 2: that much. You know.
Speaker 5: Rule of thumb, sixteen vix is a one percent move
Speaker 5: per day implied over the next month. That's actually high
Speaker 5: when you consider what we've had recently. So I agree
Speaker 5: it feels low from a risk perspective, but just you know,
Speaker 5: with the markets as stable as they are, it's just
Speaker 5: hard to get it meaningfully higher.
Speaker 4: From here, stewartis you walk out to the City Trading
Speaker 4: Floor at three ninety Greenwich Street in Lower Manhattan. Are
Speaker 4: your traders there when they're talking to their clients. Are
Speaker 4: their clients wanting to take risk here or they We're
Speaker 4: just I'm sitting on the sidelines here until I get
Speaker 4: better sense of what this Fed's going to do.
Speaker 5: You know, I think I think today for the morning,
Speaker 5: I think people will be sitting on their hands a
Speaker 5: little bit. There's no reason to take risk in the
Speaker 5: you know, a few hours before the FED. I think
Speaker 5: in general people were happy to take risk until you know,
Speaker 5: two to three weeks ago, and then you had kind
Speaker 5: of oil move higher, you had some bad news out
Speaker 5: of the Middle East, and then frankly or you're seeing
Speaker 5: in in am d et cetera overnight is a repeat
Speaker 5: of what we saw out of Taiwan, Senmi and ASML
Speaker 5: and Netflix, which were some big sort of semis focused
Speaker 5: stocks making really large moves on earnings. And I think
Speaker 5: when that happened it impacted us as well. We took
Speaker 5: a step back as wait a second, you know, if
Speaker 5: these these kind of high flying stocks are under this
Speaker 5: much pressure with what I would consider decent results YEPN,
Speaker 5: then maybe we just need to be a little careful,
Speaker 5: So I think I think investors are trying to digest
Speaker 5: all these various risks. And then obviously the GDP report
Speaker 5: definitely got people's attention without a doubt.
Speaker 4: How about earnings were halfway through kind of earning season.
Speaker 4: Here we've got we had Amazon last night, Apple after
Speaker 4: the clothes tomorrow. What are you guys seeing in earnings
Speaker 4: and what's that doing to your call here? Is it
Speaker 4: impacting your call at all?
Speaker 5: I say we were a little concerned going into TMT
Speaker 5: earnings last week. You know, frankly, they put up solid,
Speaker 5: solid results and that got the market higher. So I
Speaker 5: think by and large, we're getting what you would call
Speaker 5: a pretty solid quarter, like a modest beat on revenue,
Speaker 5: solid beat on EPs, and the biggest stocks in the
Speaker 5: market are delivering, So you know, I think that's gotten
Speaker 5: people fairly comfortable. After what I mentioned was a little bit.
Speaker 2: Of a wobble kind of coming into the scenes. Came
Speaker 2: up with the dining room table last night. It was
Speaker 2: really check cadd that was great after thought picked out
Speaker 2: the food. Stuart Kaiser came up with the dining room table,
Speaker 2: which is how partitioned did this market? My basic take
Speaker 2: is the forget about magnificent seven, the magnificent twenty are
Speaker 2: ever separate from the other four hundred number on SPX.
Speaker 5: Yeah, I think that's right. You know, time we've been
Speaker 5: sort of in this broadening theme. The problem with the
Speaker 5: broadening theme for us has been it doesn't work in
Speaker 5: two conditions when you have risk rising and too frankly
Speaker 5: during earnings, because the fact is your Microsoft's, your Apples,
Speaker 5: your Amazons, your Google's are just putting up huge numbers
Speaker 5: and it's very hard to get the market to broaden.
Speaker 2: Oway, how do you use your theory in textbooks? Somebody
Speaker 2: had out a summary of the new revenue of the
Speaker 2: three major cloud companies. We've never imagined those numbers before.
Speaker 2: So then how do you do your day to day work?
Speaker 2: How odd this tech juggernaut is?
Speaker 5: Yeah, I mean, look, it's it's It harkens back a
Speaker 5: little bit to the late nineties when you were basically
Speaker 5: introducing a new technology into the system and you assumed
Speaker 5: it forecasts really large revenue growth, but you were a
Speaker 5: little uncertain about, you know, both the size and timing
Speaker 5: of it. So I think what you're having is to
Speaker 5: your point, people are compartmentalizing a little bit, right, Like
Speaker 5: I need to have some AI exposure on let me
Speaker 5: choose the way to do that, and then off to
Speaker 5: the side of that, I kind of need to model
Speaker 5: the rest of the market, you know, as a little
Speaker 5: bit independently. So it is a challenge, but it's a
Speaker 5: good challenge to have, right. I think it's a good
Speaker 5: challenge to have that you have this large thematic revenue
Speaker 5: growth impulse kind of coming through the system, and look
Speaker 5: at this is why you know, we've kind of joked
Speaker 5: the Nvidia earnings report in late May is priced as
Speaker 5: as big an event as payrolls on Friday. So to
Speaker 5: your point, it just it just knocks.
Speaker 2: Say that again, that's important.
Speaker 5: So if you look at S and P five hundred options,
Speaker 5: they're pricing as much risk into the Nvidia earnings print
Speaker 5: as they are into payrolls this Friday. So to your point,
Speaker 5: this not only is it a big theme, it's also
Speaker 5: an uncertain theme. And even at the SMP level, that
Speaker 5: risk is being priced very aggressively.
Speaker 4: So, I mean, Tom's been he's been long the Magnificent seven.
Speaker 4: I mean, he doesn't even come into work much many
Speaker 4: of these days. He's planning his trips to Paris and everything.
Speaker 4: The rest of us, though, what do we do? I mean,
Speaker 4: if we've do I look at energytoe, look at healthcare.
Speaker 4: I mean, what are the smart people at cities saying
Speaker 4: these days?
Speaker 5: Yeah, I think you know, there's a couple of sectors
Speaker 5: people were kind of sniffing around, you know, wonder's healthcare
Speaker 5: because you know, healthcare underperformed so much last year. And
Speaker 5: you also have the GLP one story, which is not
Speaker 5: quite an AI theme, but it is sort of in
Speaker 5: the same general sort.
Speaker 2: Of category as that.
Speaker 5: I think industrials is a big focus right now, just
Speaker 5: because of the IRA spending that's coming through the system
Speaker 5: that's just hitting company revenues right now, and some of
Speaker 5: the reshoring story kind of falls into there as well.
Speaker 5: So I think industrials and healthcare two big areas of
Speaker 5: focus for a lot of clients. It's not just by
Speaker 5: the sector. You know, you're choosing stocks and subtection, but
Speaker 5: those are very important.
Speaker 2: I'm looking at fifteen upgrades today on Amazon across Global
Speaker 2: Wall Street, including City Group, and they're all different levels,
Speaker 2: and it's a parle game. Where are you a year now?
Speaker 2: On SPX? Does Stewart Kaiser have to lift your SPX
Speaker 2: numbers simply because of tech.
Speaker 5: Look, I think it's definitely potentially an upward lift on
Speaker 5: the EPs number. So Scott Cronert, who runs Equity Strategy,
Speaker 5: he's a two forty five. We're a little bit above
Speaker 5: consensus on the EPs number.
Speaker 2: And you're gonna nudge out higher. You're suggesting, you know,
Speaker 2: they understand, you know, we shall see.
Speaker 6: You know.
Speaker 5: It looks like we're going to be consensus by more
Speaker 5: than five percent for this quarter. We revised up census
Speaker 5: by three percent last week. So certainly the pressure is
Speaker 5: to the upside. I think for the average.
Speaker 2: Can you run out Stuart Kaiser and a bloomberg red sticky?
Speaker 2: Kaiser says two fifty from.
Speaker 7: City group exactly?
Speaker 4: You know city group, I mean three eighty eight grantwhich
Speaker 4: is where I work. But the people who actually get
Speaker 4: stuff done, or at three ninety grandish, the traders and salespeople.
Speaker 4: What are your traders saying to you as you walk
Speaker 4: through the floor these days?
Speaker 3: You know?
Speaker 5: I think, honestly, I think people have been a little
Speaker 5: surprised at at a little bit of just the lack
Speaker 5: of activity. The last couple of weeks. You know, the
Speaker 5: markets have been moving, but volumes have probably been a
Speaker 5: little lower than you might have expected. I think the
Speaker 5: one notable thing in the last couple of weeks is
Speaker 5: you did get a bit a bid for sort of
Speaker 5: tail risk protection about a week week and a half ago,
Speaker 5: so people buying call options on the vis at Tom's point.
Speaker 5: So I think that was that was pretty notable. It's
Speaker 5: the first time we've seen people kind of, you know,
Speaker 5: making sure they had that tail risk protection on.
Speaker 2: I can just say, folks, it's fascinating. Right now, we're
Speaker 2: gonna have a lot of funds. May Bloomberg surveying on
Speaker 2: Stuart Kaiser, thank you, thank you so much for coming in.
Speaker 2: He's a city group. Sweetey demanded we have to talk paramount.
Speaker 2: We have talk media, the future of TV, and that
Speaker 2: can only mean Brian Weezer yep of Madison and Wallas.
Speaker 2: Let me get one question in here before Sweeney takes over. Brian,
Speaker 2: what is Sherry Redstone waiting for?
Speaker 1: I I don't know. I mean, here, here's the thing.
Speaker 1: There's this fine balance between making the most of her
Speaker 1: personal position or her family's position, and being mindful of
Speaker 1: any legal obligations that she has, and then there's any
Speaker 1: sentimental subjective preferences that she has. And I think it's
Speaker 1: it's what makes it so complicated. It's not just about
Speaker 1: the highest enterprise value.
Speaker 4: So, Brian, it kind of goes to the bigger picture here.
Speaker 4: I mean, some of the restand might look like the
Speaker 4: smartest person in the room because he sold out years
Speaker 4: ago before the media business, you know, the deterioration, you know,
Speaker 4: really accelerated here.
Speaker 1: Well you know, you could say he didn't sell out,
Speaker 1: you exited the business.
Speaker 4: Yep, yep, exactly, so you never sold Yeah. So, Brian,
Speaker 4: what do you think here? I mean, what's the future here?
Speaker 4: How are you thinking about some of these traditional advertising
Speaker 4: driven dependent companies, you know, like the Disney's, like the Paramounts,
Speaker 4: like the Warner Brothers Discoveries, as they transition to streaming,
Speaker 4: are they going to make it?
Speaker 1: I mean, here's the thing. If they keep doing what
Speaker 1: they have always done, they'll get what they've always gotten,
Speaker 1: at least in recent years, which is to say, a
Speaker 1: negative trajectory. I would argue that there is still lots
Speaker 1: of opportunity ahead for any of these companies paramount otherwise,
Speaker 1: as long as they invest in the right direction for
Speaker 1: the future, and basically none of them are. That doesn't
Speaker 1: mean that they can't, but I've argued that, you know,
Speaker 1: certainly for the ad supported platforms, the pathway forward is
Speaker 1: to become a platform, meaning you got to you got
Speaker 1: to eliminate this idea of being a television based company.
Speaker 2: Okay, well, I mean this is so inflammatory what you're saying, Brian,
Speaker 2: I'm going to cut you off. For example, I just
Speaker 2: saw in Variety there's five pilots this season of across
Speaker 2: seven networks. Two of the networks don't even have any pilots.
Speaker 2: What is the Weezer prescription to save streaming?
Speaker 1: Well, I think that subscription based pricing is one thing.
Speaker 1: There's a lot of room for pricing increases, that's one thing.
Speaker 1: There has to be a lot of investment in programming
Speaker 1: and good programming too, right, not just cheap programming. So
Speaker 1: that's part of it. I think that actually they this
Speaker 1: is going to be a little bit of a different view,
Speaker 1: but I think that if they actually kept investing and
Speaker 1: didn't put the brakes on it, if they actually tried
Speaker 1: to become a global platform, if they doubled their spending
Speaker 1: on streaming, programming, for example, and made sure that they
Speaker 1: were a more meaningful platform. They would have had lift
Speaker 1: off trajectory. I think in a way that would have
Speaker 1: helped Sustand the business problem is that it's never going
Speaker 1: to be as profitable as the business is replacing. And
Speaker 1: I don't think that most companies understood that that you're
Speaker 1: going from what would have been a thirty forty percent
Speaker 1: margin business to one that's more like a ten or
Speaker 1: twenty percent margin business. How do you make up for that?
Speaker 1: You make sure you're two or three times bigger, and
Speaker 1: it makes sure that you apply your platform globally. You
Speaker 1: limit how much you are giving up your economics to
Speaker 1: other partners, which Paramount was doing certainly in much of Europe.
Speaker 1: They kind of underinvested elsewhere before kind of throwing in
Speaker 1: the towel with the sky show time.
Speaker 4: So, Brian, what's the just in terms of total ad spend?
Speaker 4: Give us a sense of kind of is there enough
Speaker 4: ad dollars to support broadcasting cable television as we all
Speaker 4: know it, as we all grew up with, or is
Speaker 4: it all going digital?
Speaker 1: Well, this is where I'm going. If you're competing and
Speaker 1: we're talking about two kind of parallel but separate things.
Speaker 1: One is subscription to get a consumers to spend money
Speaker 1: on subscriptions. Right in the United States, there's about one
Speaker 1: hundred and forty billion dollars a year spent on subscriptions,
Speaker 1: video and various forms. Right streamers right now are only
Speaker 1: tapping in about thirty five forty billion dollars of that.
Speaker 1: There's still a lot of money to be gained. I'm
Speaker 1: buildings brilliant.
Speaker 2: And then we have such a respect for Brian Weezer
Speaker 2: going back to time. Shut up, Facebook will be successful, Brian.
Speaker 2: What's going on at the lunch tables in Hollywood? They're
Speaker 2: all sitting there with their perfect water for some perfect
Speaker 2: well in New Zealand. Okay, great, What are they actually
Speaker 2: talking about if they're so far off the mark of
Speaker 2: the economic opportunity?
Speaker 1: I honestly don't know. I'm not at those tables.
Speaker 2: I guess.
Speaker 1: No. But I think that there's this an inherent conservitism.
Speaker 1: It's true in most organizations right like, there's a handful
Speaker 1: of people who can make decisions to make radical pivots
Speaker 1: or meaningful investments or bet the farm kind of actions.
Speaker 1: And those people would be the likes of Sherry Redstone right.
Speaker 1: I actually think that Bob Backas was doing the best
Speaker 1: he could within the constraints that he had to work
Speaker 1: with from everything I know, and I think that the
Speaker 1: problem is there are a small number of people who
Speaker 1: can do it, and then they have to be able
Speaker 1: to persuade investors of their plan, and most aren't willing
Speaker 1: to do that. The thing investors need their short term returns.
Speaker 1: Investors need short term returns when they're not given a
Speaker 1: persuasive reason to believe otherwise. This is something that most
Speaker 1: companies at the CEO and chairman level do not fully understand.
Speaker 2: Mike, I mean it was a Paul. It comes out
Speaker 2: of the heart of the matter. It Michael's in Los Angeles,
Speaker 2: in Santa Monica. They're over there salmon and caviar capeccio
Speaker 2: at twenty seven dollars. What are they talking about? Shouldn't
Speaker 2: they be like in a full panic?
Speaker 4: Pol I think you know the question for and Brian
Speaker 4: knows this very well, is trying to kind of replace
Speaker 4: that traditional distribution model of cable and satellite and all
Speaker 4: that great money that was associated with their subscriptions with streaming.
Speaker 4: So Brian, as you step back here, you think about
Speaker 4: the paramounts, the Warner Brothers discoveries. I don't know, maybe
Speaker 4: even Comcasts. I don't know who kinda is going to
Speaker 4: be standing here five years from now, other than Netflix
Speaker 4: and maybe Disney.
Speaker 1: Well, Comcasts and Disney are definitely well positioned because they
Speaker 1: do have so many other revenue rooms. They can sustain
Speaker 1: and support this transition to a much less profitable industry,
Speaker 1: right and that will buy them time. And it's nothing
Speaker 1: else you can grow when you take share of a
Speaker 1: shrinking business, and so that's all good for them. I
Speaker 1: think that the industry level opportunity, though, is on the
Speaker 1: subscription side, invests more heavily, not less heavily, in content.
Speaker 1: You can build a bigger business and do it globally
Speaker 1: because there are real efficiencies. Netflix has taught us this,
Speaker 1: haven't they? Other than Amazon and out there, everyone else
Speaker 1: has given up. Okay, on the advertising side, the fact
Speaker 1: that it's video, it's professional premium video doesn't matter like
Speaker 1: it used to. It just doesn't matter. And here's what
Speaker 1: I'm saying that that the today's studio owners of networks
Speaker 1: need to think differently about their advertising platforms. They need
Speaker 1: to be indifferent about the fact that they've got professional video.
Speaker 1: They need to be able to embrace the likes of
Speaker 1: YouTube and user generated contry. Embrace.
Speaker 2: We got to leave it there, Brian. Thank you so much,
Speaker 2: Brian Weizer there with Madison and Walls. That's exactly what
Speaker 2: I heard from Mark Thompson in the ft interview from cmm.
Speaker 1: D.
Speaker 2: Look at the front pages, particularly on a fed day.
Speaker 2: I looked at Lisa's newspapers today. I get a preview
Speaker 2: from her people and just wow, I mean, I mean,
Speaker 2: there's like eighteen stories to pick.
Speaker 7: There's a staff behind this. I'm telling you staff one.
Speaker 7: All right, we'll start the Wall Street Journal. It has
Speaker 7: an interesting story.
Speaker 6: Americans divide their food shopping among different stores to save money,
Speaker 6: consumers making eight percent more trips to different stores because
Speaker 6: that's a big part of their budget.
Speaker 2: Right. Brother used to do this.
Speaker 7: I still do that.
Speaker 6: I go to the farmers market for all my produce. Okay,
Speaker 6: so because it's cheaper to get.
Speaker 7: A farmer's market, it does.
Speaker 2: Okay, there you go.
Speaker 7: Yeah, So I go to the farmers market for the produce.
Speaker 6: Then I get, you know, things I need here and
Speaker 6: there at you know, the local town.
Speaker 7: Supermarket, and then I go to costco for the big
Speaker 7: stuff that I can just save in the long haul.
Speaker 2: How much save at the farmers market?
Speaker 7: Oh, significantly?
Speaker 6: Sometimes half the price half really yeah, yeah, no, it's
Speaker 6: a big difference.
Speaker 2: Oranges half the price.
Speaker 7: Strawberries, berries, all the berries.
Speaker 4: The farmer's market in my town's more of a social thing,
Speaker 4: kind of.
Speaker 2: Exactly. Show up. Here's the difference, folks. Lisa is out
Speaker 2: there with bags of berries. I have my good friend
Speaker 2: Bob in Washington. It's all he eats is berries. Yeah,
Speaker 2: and that's all right, Lisa, like for you gats of berries.
Speaker 4: Right, we did weed to go there and get our
Speaker 4: apple cier for the kids and walk around world.
Speaker 2: Where Paul lives. A farmer's market is a bunch of redovers,
Speaker 2: the giants plates.
Speaker 6: It saves a bunch of money. I'm telling you, it
Speaker 6: gets tight. So the next one is from the Financial Times.
Speaker 6: Fires are actually looking to cut out that industry middleman
Speaker 6: who wants to sell some of its medicine straight to consumers.
Speaker 6: So it's developing this online platform you can order medicine
Speaker 6: like pack Slovid, a migrating nasal spray.
Speaker 7: It'll launch later this year.
Speaker 6: So it's connecting customers with telehealth consultants to prescribe it,
Speaker 6: and then a drug dispensing partner who's going to ship
Speaker 6: out the prescription. But Eli Lilly, I mean, they did
Speaker 6: something similar earlier this year, So they're just trying to
Speaker 6: kind of cut out that middleman.
Speaker 4: And hopefully hopefully at a lower price.
Speaker 2: First of all, President Biden and former President Trump both
Speaker 2: wanted to lower prices. I mean, Donald Trump made a
Speaker 2: big deal about this. Are we actually going to finally
Speaker 2: get prices like eighteen other countries?
Speaker 1: Oh god, I don't know.
Speaker 7: That's that is.
Speaker 2: I mean, I'll tell you what.
Speaker 4: Here's one issue that I had. I will never profess
Speaker 4: any knowledge of healthcare economics.
Speaker 7: I just don't understand.
Speaker 4: I mean, you can get a PhD.
Speaker 2: In that you can be Reinhardt. It was very generous
Speaker 2: to us years ago with the lady Ouve Reinhart.
Speaker 5: And who pays for it.
Speaker 2: It's it's a it's a mystery. Yeah, that was depressing.
Speaker 6: What's well, you know you can also get cheaper overseas
Speaker 6: is the weight loss drugs. That's another thing that leads
Speaker 6: to our next story. This is from the New York
Speaker 6: This is yes, Okay, so weight loss drugs are very popular,
Speaker 6: but the stress around social etiquette that is becoming an issue,
Speaker 6: like is it okay to ask.
Speaker 7: Someone if they're on weight loss drugs? Or is it rude?
Speaker 6: You know, that's the question being going around Barbara Streiss,
Speaker 6: and she sparked a debate. She was posting on commenting
Speaker 6: on Melissa McCarthy, the actress's picture, she said, are you
Speaker 6: on ozembek?
Speaker 7: And people got offended by the like, how can you
Speaker 7: ask you know?
Speaker 4: Or something like that information.
Speaker 7: I guess that's what they're saying. It's that that the
Speaker 7: borderline now like.
Speaker 4: Oh you look great, he lost a lot of weight,
Speaker 4: good for you, And I'll just leave it at that. I guess, yeah, okay,
Speaker 4: no one's and I've actually I've actually experienced this with
Speaker 4: an acquaintance and I was told, do not mention the three,
Speaker 4: just say congratulations on your way lost, because.
Speaker 7: Then you're suggesting what they need, your help they need.
Speaker 2: It's all news, to be honest. John Farrell was way
Speaker 2: out front on this.
Speaker 4: I was like, look at it, John, he's got like
Speaker 4: nobody that he doesn't he's in the gym like at.
Speaker 2: Ten ten am. But you know, Pharaoh was way out
Speaker 2: front on this and I look at the whole thing,
Speaker 2: and I go, I can see if they're on no
Speaker 2: zembic at leasta?
Speaker 7: Can you tell in the faith?
Speaker 6: I mean my aunt's on it.
Speaker 7: She dropped like forty pounds. Wow, I mean you could
Speaker 7: tell right away.
Speaker 6: But it's that question, like I knew she lost weight,
Speaker 6: but I didn't say, hey, are you want to back?
Speaker 7: You know, it's kind of like she suggested it to me.
Speaker 2: Yes. Yes.
Speaker 4: And actually what we've learned is they will only put
Speaker 4: you on it, get you started when they feel like
Speaker 4: they can always have your refills done.
Speaker 2: So it's a supply issue. Once they get feel comfortable
Speaker 2: to supply, they'll put.
Speaker 4: A new person on it.
Speaker 2: And that seems to be how that was depressing.
Speaker 6: Here's another one that the Paris restaurants, yes, the tourists
Speaker 6: ahead of the twenty twenty four Olympics for tips. Okay,
Speaker 6: because tipping culture in France, as you know, it's different
Speaker 6: than in the US. Okay, they have a legally mandated
Speaker 6: fifteen percent service charge.
Speaker 7: Legally mandated what fifteen.
Speaker 6: Percent service charge? Menu prices often hire to cover it.
Speaker 6: It's called a poor bra.
Speaker 7: How do you say, Tom, help me with this school bra?
Speaker 7: In French.
Speaker 2: Okay, it's really interesting.
Speaker 7: It's a different tipping culture.
Speaker 6: But the restaurant tours are playing into the international guest
Speaker 6: kind of ignorance by them.
Speaker 7: To pay like they would in the States. So they're good.
Speaker 6: You may start to see like the tablets where they
Speaker 6: flip it around and it gives you that little percentage,
Speaker 6: even though the tipping culture is different in France.
Speaker 4: Obviously, the first thing I learned when I moved to
Speaker 4: London in eighty seven no tipping.
Speaker 2: It took me weeks to fit out. My take on
Speaker 2: this is they love Americans because most Americans tip over
Speaker 2: there like they tip in America, which the French love.
Speaker 2: But the worst I get upset in London. The way
Speaker 2: they have it set up in London is detrimental to
Speaker 2: the workers. It's not fair to no, no, it's terrible.
Speaker 2: They take change on the bar. You know, nobody has
Speaker 2: changed it, nobody, nobody cares money anymore, and it's really unfair.
Speaker 2: In London and in Paris. You know my experiences, they
Speaker 2: love Americans like cab drivers will fight to take the Americans,
Speaker 2: not that they could ever tell I was American.
Speaker 4: And Tom Messi's standing tables at all the best restaurants, Tarkers,
Speaker 4: you know, so you know he's got his people over.
Speaker 2: There, Starbucks, Late book to start. They know who I am,
Speaker 2: Lisa Matteo on newspapers. Thank you so much, greatly appreciate
Speaker 2: that this is the Bloomberg Surveillance Podcast, bringing you the
Speaker 2: best in economics, finance, investment, and international relations. You can
Speaker 2: also watch the show live on YouTube. Visit the Bloomberg
Speaker 2: Podcast channel on YouTube to see the show weekday mornings
Speaker 2: from seven to ten am Eastern from our global headquarters
Speaker 2: in New York City. Subscribe to the podcast on Apple, Spotify,
Speaker 2: or anywhere else you listen, and always on Bloomberg Radio,
Speaker 2: the Bloomberg Terminal, and the Bloomberg Business app.