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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along

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Speaker 2: with Paul Sweeney. Join us each day for insight from

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Speaker 2: the best in economics, finance, investment, and international relations. You

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Speaker 2: can also watch the show live on YouTube.

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Speaker 3: Visit the Bloomberg.

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Speaker 2: Podcast channel on YouTube to see the show weekday mornings

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Speaker 2: from seven to ten am Eastern from our global headquarters

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Speaker 2: in New York City. Subscribe to the podcast on Apple, Spotify,

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Speaker 2: or anywhere else you listen and always I'm Bloomberg Radio,

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Speaker 2: the Bloomberg Terminal and the Bloomberg Business App. In charge

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Speaker 2: of the screen at CFRA is Kenneth Leon. Ken Leon's

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Speaker 2: been doing this for years, and we're going to not

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Speaker 2: only look at Morgan Stanley, but with Ken Leon, look

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Speaker 2: across all of banking. Are the days over kenn Leon

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Speaker 2: where they announced a six percent layoff? Or is everybody

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Speaker 2: cuter about it now? Twenty year, ten year in Asia, etc.

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Speaker 4: Well, Tom, it's good to be with you, and you

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Speaker 4: know these businesses are cyclical, so we can always see

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Speaker 4: that as a scenario, but the narrative is not about

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Speaker 4: going into recession significant layoffs or streamlining. It's about taking

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Speaker 4: advantage of technology, and most importantly today with disappointing Back

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Speaker 4: of America results and probably very strong Morgan Standard results,

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Speaker 4: it's the capital markets that's going to give you out performance.

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Speaker 2: I look at the capital markets and to me, what's

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Speaker 2: important here is on an employee basis, Yeah, there may

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Speaker 2: be layoffs, but they're going to rehire the same the

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Speaker 2: same amount of people or more in other areas like

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Speaker 2: technology and intellectual content.

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Speaker 3: Is that what's happening? It is?

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Speaker 4: And even on one of the calls yesterday, they were

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Speaker 4: talking about artificial intelligence or AI and how you can

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Speaker 4: work that into processes of the bank, particularly the back

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Speaker 4: office sector.

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Speaker 1: Dispersions usually at its ties during peak periods of market distress.

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Speaker 1: Can I'm curious, you know, it's been abnormally high in

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Speaker 1: US equity since the pandemic. Talk to us a little

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Speaker 1: bit about the role of sector allocation diversification in the

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Speaker 1: current environment.

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Speaker 4: It's a good question. And as a research director and

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Speaker 4: looking top down, I'm thinking of the financial sector. For listeners,

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Speaker 4: there are twelve constituents. Berkshire Hathaway is the largest. The

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Speaker 4: sixth largest banks.

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Speaker 3: Are in there.

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Speaker 4: They're sixty five percent of the sector. So we're going

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Speaker 4: to have a full week of bank earnings. But quite frankly,

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Speaker 4: for your question, the most important one is the performance

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Speaker 4: and outlook of the six largest global US banks.

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Speaker 1: Interesting, so you know rate sensitive sectors, other rate sensitive

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Speaker 1: sectors storry like utilities in real estate are probably the

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Speaker 1: two worst performing sectors in the S and P this year,

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Speaker 1: I believe, talk to us about the those sectors. Do

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Speaker 1: they stand at you in the current environment.

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Speaker 4: Yeah, we have an under weight on those sack theres,

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Speaker 4: mostly because well, gee, you know, we have the scenario

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Speaker 4: of a very healthy economy and we think that looking

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Speaker 4: out even if we have a correction and Sam Stole,

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Speaker 4: our chief investment strategist, there's been twenty four corrections since

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Speaker 4: World War Two, but they come back to well regain

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Speaker 4: those losses in four months, that's the average. So we'd

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Speaker 4: like to be with growth, which is technology. We also

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Speaker 4: like communications services and also consumer discretionary.

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Speaker 2: You know, I look Ken Lee on with the Morgan

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Speaker 2: Stanley earnings and I guess it comes down to the

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Speaker 2: strategic difference, the distinction between gold and sacks. With a

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Speaker 2: bang up effort the other day, maybe awful lot of

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Speaker 2: gloom about David Solomon. Will you push that aside in

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Speaker 2: Morgan Stanley here? What's the distinction between Golden Sachs and

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Speaker 2: Morgan Stanley And what does mister pick show this morning?

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Speaker 3: Well, there's two things.

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Speaker 4: First of all, what is the body language and really

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Speaker 4: delivery of a new CEO versus one of the Hall

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Speaker 4: of Fame James Gorman. Second, I think Tom, we're entering

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Speaker 4: a very interesting period. I said, capital markets is really

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Speaker 4: going to drive these particular verbs. But when you look

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Speaker 4: at Goldman Sachs and Acid Management, it's their really closer

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Speaker 4: link to alternative investments, private equity and equity and debt financing.

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Speaker 4: There is one trillion dollars business from sponsors still to

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Speaker 4: be released into the market that will benefit Morgan Stanley

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Speaker 4: and Goldman Sachs.

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Speaker 3: What do you think about this day?

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Speaker 2: I mean, what's your distinction right now between Goldman Sachs

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Speaker 2: and Morgan Stanley.

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Speaker 1: Well, I mean I think the interesting thing is well,

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Speaker 1: the two very different banks right now.

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Speaker 3: But I agree with that that's important.

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Speaker 1: And I think really for me, I'm looking at credit

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Speaker 1: card delinquencies above pre COVID levels, bankruptcies, rising housing activity

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Speaker 1: and decline so I take a little bit of your point, Ken,

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Speaker 1: with the fact that this economy is completely healthy. I mean,

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Speaker 1: talk to me about these recessions. I mean they've fallen substantially.

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Speaker 1: Can the FED really truly engineer a self landing?

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Speaker 4: I think Jay pal is getting better in his messaging.

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Speaker 4: He needs to be more Alan Greenspan because when things

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Speaker 4: are quite honestly working well, that you know, and to

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Speaker 4: keep caring from the financial media rates higher, you know,

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Speaker 4: you know, even at these levels, corporates are beginning to

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Speaker 4: go through the capital market. The first quarter was a

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Speaker 4: record for dead underwriting since nineteen eighty. And I think

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Speaker 4: for the consumer there are parts of the of the

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Speaker 4: population that do suffer. But I think we're in a wait.

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Speaker 4: There's no need to cut rates immediately.

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Speaker 3: You know.

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Speaker 2: One of the things is important, your folks, is we

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Speaker 2: await to Ken Leon's sixty two page annual letter.

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Speaker 3: It's like James Diamond's letter.

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Speaker 2: It's just Ken Leon, Kevi Leon, what would you put

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Speaker 2: in your sixty two page letter after seeing these bank earnings,

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Speaker 2: their reports on revenue, Moynihand's effort on.

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Speaker 3: Digital, what do they look like five years out?

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Speaker 4: Wow, it's a great question and I think what we'll

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Speaker 4: see is that these banks are positioned to flourish and

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Speaker 4: grow as we see innovation and change in the market.

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Speaker 1: You know, you asked me a little bit earlier about

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Speaker 1: what the difference between those banks are, and the way

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Speaker 1: I see it is, you know, net interesting income versus

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Speaker 1: wealth management. I mean to some extent, right, and I'm

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Speaker 1: talking being able to bank versus a very big bank though,

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Speaker 1: And so my question for you, Ken is, talk to

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Speaker 1: me about this curve. I mean, everyone seems to think

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Speaker 1: the curve is going to steepen. That should be pretty

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Speaker 1: pretty bullish for Bank of America, for City Group, for JPM.

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Speaker 4: Now, well, Bank of America probably went zero for ten

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Speaker 4: on the results today.

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Speaker 3: But onest okay, we're going to stop the show here.

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Speaker 3: This is the second time you've mentioned is where did

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Speaker 3: moynihan fail today?

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Speaker 4: They missed it on net interest income, They missed it

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Speaker 4: on wealth management, they missed it on investment banking, and

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Speaker 4: on trading.

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Speaker 3: It was just average compared.

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Speaker 4: To even JP Morgan Chase or Cities. So but to

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Speaker 4: that question net intrast income, they're getting pressure on clusted deposits.

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Speaker 4: I went through the sixty page supplemental and I'm just

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Speaker 4: not finding anything to cheer about. And believe me, I

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Speaker 4: look at it right.

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Speaker 3: Oh, come on.

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Speaker 2: The solution, Kenn Leon is a got two hundred and

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Speaker 2: twelve thousand people.

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Speaker 3: They're going to go in there after they hear the

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Speaker 3: Ken Leon report.

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Speaker 2: How many bodies does it take the right size Bank

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Speaker 2: of America after a challenge?

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Speaker 4: You know in hisstory for Back in America. And I've

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Speaker 4: been covering them fifteen years. You do sometimes get quarters

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Speaker 4: like that and then they come back strongly next quarter.

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Speaker 4: But they are one of the best in terms of

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Speaker 4: their disclosure and explaining their performance.

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Speaker 1: Ken, not even equity trading. I thought equity trading beat.

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Speaker 4: It's very minor. It's actually equity training is a very

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Speaker 4: small component.

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Speaker 1: No, I'm joking. I'm looking for one silver lining in

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Speaker 1: the report. I agree with you, Ken.

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Speaker 2: Ken Leon, thank you so much, really really appreciate this

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Speaker 2: wonderful finish.

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Speaker 3: Gene Munster now with deep Water asset man.

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Speaker 2: Gene Gene, thank you so much for joining us in

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Speaker 2: to talk on Apple today. They got a May second

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Speaker 2: earnings report. I want to forget about all the gloom

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Speaker 2: about China revenue worries in that can they hold margins

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Speaker 2: and continue to develop free cash flow, which is basically

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Speaker 2: doubled since pre pandemic. Can they still generate Apple free

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Speaker 2: cash flow growth?

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Speaker 5: The simple answer is yes, they can. They generate about

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Speaker 5: one hundred billion in operating income, and so this is

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Speaker 5: about a three hundred and fifty four hundred billion dollar

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Speaker 5: revenue company. They'll probably do about ninety five billion this year.

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Speaker 5: Free cash flow will be around fifty five billion, So

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Speaker 5: this is still a machine. When it comes to and

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Speaker 5: I want to I think I bury the lead to

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Speaker 5: that data point about their free cash flow is revenue growth.

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Speaker 5: If you take what it will be in the March quarter,

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Speaker 5: what they're going to report in a few weeks here,

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Speaker 5: revenue growth over the past eight quarters has been down,

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Speaker 5: will be down zero point four percent on average. So

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Speaker 5: they continue to drive that kind of fifty billion plus

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Speaker 5: free cash flow despite revenue being flat. I think it

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Speaker 5: speaks to the strength of the business model that they have.

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Speaker 2: So I got to go back to use of cash

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Speaker 2: and running a company for profit not growth, which I

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Speaker 2: think most of the media doesn't understand. Here Gena Martin

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Speaker 2: Adams adamant, we're going to see use of cash. Click

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Speaker 2: in here are we going to see a use of

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Speaker 2: cash bombshell from Apple.

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Speaker 5: I think that the so first this is going to

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Speaker 5: be the period when they report their March quarter they

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Speaker 5: typically give guidance about what they're going to do in

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Speaker 5: terms of expanding their buyback and their dividend, and I

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Speaker 5: would expect an increase the buyback and dividend somewhere around

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Speaker 5: twenty five billion. We're continuing to see them expand and

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Speaker 5: that's over a multi year period, but can the bottom

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Speaker 5: line is I expect to continue to see that move higher.

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Speaker 5: That's coming at the same time where we're going to

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Speaker 5: hear more about their investments in AI. They of course

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Speaker 5: broke the seal last quarter after a full year of

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Speaker 5: not proactively talking about AI, and now they have this

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Speaker 5: event coming up in June where they're going to announce

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Speaker 5: some products. But those products come at a cost, and

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Speaker 5: there will be an investment cycle here and I think

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Speaker 5: Apple investors should be aware of that investment cycle. What

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Speaker 5: does it mean ultimately for the business in the near

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Speaker 5: term is you have these gross margins kind of right

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Speaker 5: around forty percent. There's probably going to be a little

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Speaker 5: bit of a step back in gross margins, maybe by

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Speaker 5: fifty one hundred basis points about one percent. But I

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Speaker 5: do think that that we do need to factor in

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Speaker 5: what they're investing in AI when we think about the

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Speaker 5: context of the capital distribution.

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Speaker 2: They'll announcement pre pandemic gross margin thirty eight percent now

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Speaker 2: out of a model forty four.

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Speaker 1: Percent, you know, I mean Gene. We're a little over

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Speaker 1: a week away from April twenty fifth, when Microsoft, Google,

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Speaker 1: and Amazon report after the bell. But before then, this Thursday,

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Speaker 1: we're going to see earnings from Taiwan Semi Tom's favorite book,

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Speaker 1: Chip War, I mean, Chris Miller, I mean, talk to

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Speaker 1: us a little bit about Intel, A and D. What

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Speaker 1: does China and all that's going on with the chipwar

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Speaker 1: mean to those companies and how are their stocks expected

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Speaker 1: to perform?

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Speaker 5: So I think Intel they're two different stories. They're both

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Speaker 5: within the context of chips. In terms of when you

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Speaker 5: look at what's happening in China, Intel has greater exposure

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Speaker 5: relative to AMD from China, so I think that there

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Speaker 5: is more of a headwind both of margat to face

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Speaker 5: the headwind and specifically within China. Some of these revised

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Speaker 5: recommendations from the government puts Intel an AMD like eighth

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Speaker 5: and ninth on the list of chip providers that they

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Speaker 5: recommend six our Chinese chip providers, So that is going

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Speaker 5: to be a headwind. I think that's part of what

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Speaker 5: has negatively impacted iPhone sales over the past year, is

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Speaker 5: that there has been this spoken focus towards Huawei within

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Speaker 5: government employees. It's a massive base. So I think this

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Speaker 5: is going to have a negative impact on Intel and

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Speaker 5: A m D In our flagship Titan fund, we own AMD.

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Speaker 5: We do not own Intel. We have sold Intel not

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Speaker 5: because of this China, but because of I think just

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Speaker 5: some of the challenges that they have had. I think

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Speaker 5: there is some managerial challenges that they've had just to

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Speaker 5: try to capture some of those faster chips and to

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Speaker 5: build those those better chips. So big picture is this

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Speaker 5: China is going to be an issue. It's going to

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Speaker 5: be an issue for AMD, Intel, Apple, Tesla, all these

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Speaker 5: companies are going to have to navigate this. It's going

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Speaker 5: to get worse there over the next few years.

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Speaker 1: Jean the shift gears, Let's talk a little bit about

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Speaker 1: M and A activty Microsoft back rubik is peking up

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Speaker 1: to seven hundred and thirteen million dollars in an IPO

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Speaker 1: that just announced talk to us a little bit about

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Speaker 1: the potential for M and A activity within the tech

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Speaker 1: sector over the balance of twenty twenty four. Do you

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Speaker 1: expect a lot more new issuance? I mean, what's really there?

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Speaker 1: How deep is the pool?

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Speaker 5: So two pieces to that. First, in terms of the

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Speaker 5: M and A side is I don't expect much. And

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Speaker 5: particularly because the best companies already have valuations that are

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Speaker 5: five billion dollar plus. That's going to require some of

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Speaker 5: the bigger companies to take action to be the acquirers there.

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Speaker 5: And of course, given what's happened in the regulatory environment,

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Speaker 5: I just see that less likely. Whether it's actually less

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Speaker 5: likely to happen, I think there's just it's I think

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Speaker 5: the management teams feel that this is not worth to

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Speaker 5: invest the time in that. So I don't expect a

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Speaker 5: lot of M and A activity. I do expect not

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Speaker 5: this year, but in twenty twenty five to be the

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Speaker 5: first year where we're going to see a class of

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Speaker 5: AI first companies go public. Interesting and I think that

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Speaker 5: we what we have seen of course with the move

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Speaker 5: relative to AI. A lot of that value has been

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Speaker 5: created with the megacaps, but we haven't seen really an

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Speaker 5: AI IPO class yet, and I think we will see it.

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Speaker 5: They can make from companies like data breaks. It can

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Speaker 5: be obviously open AI and thropic some of these kind

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Speaker 5: of the ordained AI companies likely Wigle Public twenty twenty five.

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Speaker 2: Let me fit in this question, does private money front

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Speaker 2: run that public process?

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Speaker 5: They're private money does? I want to be careful about

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Speaker 5: how answer this, because yes, the goal of private investors

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Speaker 5: is to invest as before valuation as valuations continue to

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Speaker 5: increase into the public markets. That's how venture makes money.

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Speaker 5: Of course, sometimes that gets turned upside down. And venture investors,

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Speaker 5: we have venture funds too, it's a different investment style.

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Speaker 5: It's more of tech vision. We are not only tech visionaries,

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Speaker 5: but we're also tech investors. I just want to make

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Speaker 5: the quick point is that I think the mistake that

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Speaker 5: a lot of venture makes is they just look at

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Speaker 5: everything as being rosy and can oftentimes overpay. And there

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Speaker 5: is a painful look what happened with SPACs in twenty

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Speaker 5: twenty two. There's a painful correction that a lot of

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Speaker 5: those earlier investors. So I think that they're just as

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Speaker 5: risky owning the stuff, and venture doesn't necessarily mean that

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Speaker 5: it's going to go up when it goes public.

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Speaker 2: I thanks so much, Geene Monster, really really wonderful comments

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Speaker 2: are particularly on Apple.

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Speaker 3: Gene Monster with deep water acid management.

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Speaker 2: Joining us away from the longer view of economics and

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Speaker 2: really on short term paper truly owns the high ground.

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Speaker 2: Anthony Crescenzi with US of Pimco, Tony, Should I be

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Speaker 2: nervous about a five percent to your yield?

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Speaker 3: Hey?

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Speaker 6: Tom, Hey, dammy, and no, you should be happy. You

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Speaker 6: should be pinching yourself, you should be full. We haven't

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Speaker 6: seen these yields in a quite a long time, and

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Speaker 6: it's one of the reasons why many people think that

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Speaker 6: the US economy is faring better. As the story on

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Speaker 6: Bloomberg today about it. Interesting, income in the United States

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Speaker 6: is about one point eight trillion dollars today. That's up

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Speaker 6: three hundred billion dollars from two years ago. It's three

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Speaker 6: hundred billion dollars.

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Speaker 3: But I'm going to blame the media for this interesting, Yes,

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Speaker 3: of course, up.

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Speaker 2: Yeah, But you know, and you've codified in all your books,

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Speaker 2: included the Great Stigams two thousand pages, you've codified that

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Speaker 2: there's an ambiguity here.

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Speaker 3: Explain the ambiguity that price down yield up can be

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Speaker 3: good for our listeners.

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Speaker 6: Well, here's the here's a statistic going back several decades,

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Speaker 6: the five year looking out five years in terms of

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Speaker 6: what you're likely to get in terms of a total return,

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Speaker 6: looking at the Bloomberg aggregate, which is a pretty much

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Speaker 6: a compilation.

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Speaker 3: Let me tell you what that is.

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Speaker 6: Well, take, by the way, on Lihman. I worked for

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Speaker 6: Lehman Brothers in the nineteen eighties in the World Trade

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Speaker 6: Center one hundred and fourth floor with a view of uptown.

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Speaker 6: Remarkable period that was. But so looking back at the

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Speaker 6: looking at the Bloomberg aggregate today, which is forty percent

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Speaker 6: US treasuries, twenty five percent mortgages, twenty five percent corporate bonds,

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Speaker 6: the yield is five and a quarter percent. Now, if

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Speaker 6: you take that figure, it's that starting yield should be

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Speaker 6: the return you get the next five years based on

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Speaker 6: the thirty year history of it. The rolling return over

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Speaker 6: multi year period should equate to what you see as

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Speaker 6: a stated yield today. So five and a quarter percent.

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Speaker 6: Is that good enough for some investors? Maybe not. That's

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Speaker 6: why yields are rising prices If rolling is selling, they

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Speaker 6: think yields would go higher. But I would suggest to

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Speaker 6: investors that they'd be careful about the story now. And

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Speaker 6: what I would suggest is thinking about three don'ts about

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Speaker 6: what to do in terms of investing in that we're

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Speaker 6: offer next, about what to do what not to do.

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Speaker 6: For one, don't try to time the market awfully difficult

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Speaker 6: to do. And I sure perhaps don't catch a falling knife,

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Speaker 6: but do catch these yields while you can. This yields

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Speaker 6: could slip away. And finally, don't fight the Fed. And

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Speaker 6: Tom and Damon you might think this means, well, the

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Speaker 6: Federal Reserve is keeping policy tight, so that's a bad thing.

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Speaker 6: But it's tough love the more it stays tight, and

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Speaker 6: it is getting tighter. Based on a definition of what

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Speaker 6: is tight a high falling inflation rate, and it is

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Speaker 6: falling a two point eight percent PCE versus five percent yields.

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Speaker 6: It was they were almost equal last year. Fighting the

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Speaker 6: Fed today means believing this the central Bank will be

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Speaker 6: successful in his quest to bring inflation down, has every

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Speaker 6: means of an ability to do that.

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Speaker 1: Tom, did you see did you see Tony wink at

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Speaker 1: me when he said, don't be a short termist to

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Speaker 1: actually invest for the long term.

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Speaker 7: I mean he's at wind.

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Speaker 1: I'm reading your note, Tony, and I gotta say, don't

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Speaker 1: fixate on the fed's two percent objective. Focus instead on

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Speaker 1: the notion.

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Speaker 3: Of quote unquote right.

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Speaker 6: One of my favorite idea.

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Speaker 1: Stability that reads like the South China Morning post price stability.

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Speaker 1: What is price stability?

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Speaker 3: Daman?

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Speaker 6: So, I'm really old. Tom is much younger than me.

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Speaker 6: But I recall a period before twenty twelve, and I'm

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Speaker 6: gonna tell you what that means. When we didn't have

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Speaker 6: a two percent price objective to go on, we had

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Speaker 6: to go on something else. And what was that something else?

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Speaker 6: A notion that prices are stable or they're not. So

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Speaker 6: it was in twenty twelve that Ben Bernanke, the former

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Speaker 6: FED chair, implemented the idea of a price objective. Prior

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Speaker 6: to that called the nineteen sixty seventies, eighties, nineteen fifties,

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Speaker 6: what did an investor have to go on to drive

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Speaker 6: prices higher or lower? They had to decide our price

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Speaker 6: is stable. Now, if we fixate as investors on the

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Speaker 6: two percent target, you could miss a great deal of

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Speaker 6: return in your investment portfolio. And many that have fixated

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Speaker 6: on the two percent target in the past six months

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Speaker 6: have lost a significant amount of investment turn in their

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Speaker 6: portfolios because we haven't gotten to two percent, but we

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Speaker 6: might be achieving price stability, which Alan Greenspan and Paul

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Speaker 6: Voker defined as a level of price changes or degree

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Speaker 6: of price changes that ceases to have an impact on

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Speaker 6: business and household decision making. And that's where we're moving,

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Speaker 6: and that's why the equity market is feeling better, because

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Speaker 6: we're getting closer to the ear of price stability, even

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Speaker 6: if it's not two percent.

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Speaker 1: Tony behind closed door, some of the conversations I have

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Speaker 1: with the people I know and I respect, we talk

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Speaker 1: about that two percent inflation target and we try to

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Speaker 1: determine what it would take for the FED to consider

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Speaker 1: removing that target. Now, I know it's far facts, but

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Speaker 1: do you feel that the FED in this environment can

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Speaker 1: even remotely consider that of inflation staate persistently high.

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Speaker 6: It's highly improbable. Now they can't walk back on the notion,

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Speaker 6: especially with the inflation rate higher, because then market participants

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Speaker 6: agree would would lose their senses as to where the

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Speaker 6: anchor is because it's becoming grained in thinking. But again,

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Speaker 6: as investors, we have to take a step back and

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Speaker 6: decide is the inflation that we're experiencing enough to get

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Speaker 6: in the way future cash flows for businesses to pay

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Speaker 6: you back at maturity, to pay the interest on your bonds,

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Speaker 6: et cetera.

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Speaker 3: Give and this goes to economics.

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Speaker 2: And I want to go to your Staten Island in

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Speaker 2: Richmond County. I'm sorry, but if I'm at the FED

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Speaker 2: and I'm looking at Cresenzi's Staten Island, it's a great

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Speaker 2: labor picture. Overlying your brilliance in the financial space.

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Speaker 3: Is there this huge.

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Speaker 2: Elephant in the room, which is the labor economy of America.

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Speaker 6: The story for the twenty twenties, which is a lot

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Speaker 6: different than the twenty tens, is a story of retirements

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Speaker 6: and immigration, with retirements outweighing the immigration over the longest

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Speaker 6: span of time. There's a shortage of labor. And the

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Speaker 6: context is this notion of stakeholder capitalism, which is different

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Speaker 6: than the notion of shareholder capitalism which Milton Friedman shepherded

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Speaker 6: in the nineteen seventies when he said the sole purpose

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Speaker 6: of a company is to grow its profits. No company

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Speaker 6: can say that today. They have to be seen as

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Speaker 6: a partner with the community as seen to be helping

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Speaker 6: with the with climate change and also contributing to a

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Speaker 6: diverse and inclusive workforce. And so in that context, it's

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Speaker 6: more likely that companies, given that this labor shortages, will

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Speaker 6: want to share income more. And final stat Tom is

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Speaker 6: I think nineteen fifty seven the biggest birth year last century,

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Speaker 6: sixty five, and here years later they're receiving so security

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Speaker 6: and retiring. And this wave lasts until the last boomer

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Speaker 6: born in sixty four retires in the early twenty thirty.

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Speaker 6: So we've got a shortage of labor that'll last a while.

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Speaker 6: But final final word is immigrations helping lift GDP potential.

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Speaker 3: Tony, thank you, he is with Pimco.

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Speaker 6: Tony Crescenzi Cass, thanks so much for having me here today.

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Speaker 2: Books about grabbing the coupon is really what this is about.

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Speaker 2: Dare you look at the front page is a stack

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Speaker 2: of newspapers. At the desk a Lisa Matteo fired up.

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Speaker 2: She got a whole list of twisted stories here.

440
00:23:03,600 --> 00:23:05,479
Speaker 3: People love this, so they hate this. People are like,

441
00:23:05,800 --> 00:23:08,320
Speaker 3: can you just talk about Japanese yen? And I'm like,

442
00:23:08,720 --> 00:23:12,320
Speaker 3: come on, Lie's got some Jewels. Here's what do you

443
00:23:12,400 --> 00:23:12,840
Speaker 3: start with?

444
00:23:12,920 --> 00:23:14,320
Speaker 7: All right, This one was on Bloomberg.

445
00:23:15,240 --> 00:23:17,440
Speaker 8: This has been going on the US preparing for anti

446
00:23:17,440 --> 00:23:20,600
Speaker 8: trust suit against Live Nation over Ticketmaster. So this Live

447
00:23:20,680 --> 00:23:24,000
Speaker 8: Nation Ticketmaster whole situation has been going on for some time.

448
00:23:24,080 --> 00:23:26,560
Speaker 8: They sources are saying they want to force Live Nation

449
00:23:26,720 --> 00:23:30,119
Speaker 8: to spin off the Ticketmaster ticketing business. The agency's been

450
00:23:30,119 --> 00:23:32,919
Speaker 8: investigating that entertainment enjoyment for years, so it's.

451
00:23:32,800 --> 00:23:35,000
Speaker 7: Been going on the reason why.

452
00:23:35,080 --> 00:23:38,840
Speaker 8: While there's concerns Live Nation illegally tied its concert promotion

453
00:23:39,000 --> 00:23:42,200
Speaker 8: services to use on Ticketmaster, But these two companies emerged

454
00:23:42,240 --> 00:23:45,720
Speaker 8: like fourteen years ago after this lengthy anti trust investigation,

455
00:23:45,880 --> 00:23:49,000
Speaker 8: they both agreed that they wouldn't tie those services together.

456
00:23:49,280 --> 00:23:50,960
Speaker 7: But now they're saying, well, I've.

457
00:23:50,800 --> 00:23:54,199
Speaker 2: Got a really strong opinion on this, Damien, before I voice,

458
00:23:54,600 --> 00:23:55,880
Speaker 2: what's your thoughts on Nation?

459
00:23:56,040 --> 00:23:57,520
Speaker 1: Well, when we go on tour, what does that mean

460
00:23:57,560 --> 00:23:59,200
Speaker 1: for us? Right, We're not going to be really reaching

461
00:23:59,240 --> 00:24:01,560
Speaker 1: our true audience out there. You on guitar, me on

462
00:24:01,600 --> 00:24:03,480
Speaker 1: the bongos. So I mean, I'm a little I don't

463
00:24:03,480 --> 00:24:04,200
Speaker 1: know what are your thoughts.

464
00:24:04,240 --> 00:24:05,720
Speaker 3: Here's my thoughts on this.

465
00:24:05,720 --> 00:24:08,199
Speaker 2: This is all about the artists, the artists want to

466
00:24:08,240 --> 00:24:12,040
Speaker 2: feel that they're being egalitarian, and I'm going to have

467
00:24:12,119 --> 00:24:15,400
Speaker 2: an eighty or one hundred dollars ticket so the people.

468
00:24:15,119 --> 00:24:16,040
Speaker 3: Can come see me.

469
00:24:16,760 --> 00:24:19,720
Speaker 2: And the demand for some of these acts is not

470
00:24:19,840 --> 00:24:21,439
Speaker 2: eighty or one hundred dollars.

471
00:24:21,760 --> 00:24:23,200
Speaker 3: It's way way higher.

472
00:24:23,800 --> 00:24:28,240
Speaker 2: It's almost it's just an artificial auction theory because actual

473
00:24:28,359 --> 00:24:29,880
Speaker 2: demand is way.

474
00:24:29,600 --> 00:24:32,360
Speaker 3: Way higher to see pick the artist, but.

475
00:24:32,359 --> 00:24:36,320
Speaker 2: The artist doesn't want to visibly show on Ticketmaster a

476
00:24:36,320 --> 00:24:38,200
Speaker 2: four hundred and eighty dollars ticket.

477
00:24:38,600 --> 00:24:41,080
Speaker 1: Try getting tickets for you two at the Sphere or

478
00:24:41,119 --> 00:24:45,440
Speaker 1: Billy Joel here at MSG. I mean the swift tickets, swifties.

479
00:24:46,000 --> 00:24:47,600
Speaker 3: I take this back to the artists.

480
00:24:47,640 --> 00:24:49,840
Speaker 2: I take it right back, and they're representatives, you know,

481
00:24:49,840 --> 00:24:53,320
Speaker 2: they're artists, and it's it's a mess, I mean, and

482
00:24:53,359 --> 00:24:53,919
Speaker 2: there what's.

483
00:24:53,760 --> 00:24:55,480
Speaker 3: There going to be litigation out of this leaset is

484
00:24:55,480 --> 00:24:58,400
Speaker 3: that the basic Okay, what do you got?

485
00:24:59,400 --> 00:25:01,000
Speaker 7: Bubble tea? Have you ever tried it?

486
00:25:01,080 --> 00:25:02,359
Speaker 3: Either of you?

487
00:25:02,400 --> 00:25:02,720
Speaker 2: No?

488
00:25:02,720 --> 00:25:06,479
Speaker 8: No, the milky beverage with the tapiok of bubbles in it.

489
00:25:06,600 --> 00:25:08,480
Speaker 7: No, No, I haven't tried it.

490
00:25:08,640 --> 00:25:12,160
Speaker 8: The kids love it? Oh really, my Apple pay goes.

491
00:25:12,240 --> 00:25:13,679
Speaker 8: I don't even know how much I spent on this

492
00:25:13,760 --> 00:25:16,560
Speaker 8: for my daughter. But here's the thing. So the market

493
00:25:16,600 --> 00:25:19,359
Speaker 8: for it in China competitive, they're fighting for customers. But

494
00:25:19,600 --> 00:25:21,600
Speaker 8: now they want to start to bring them, you know,

495
00:25:21,720 --> 00:25:23,879
Speaker 8: here to the mainland, to different areas. You have a

496
00:25:23,880 --> 00:25:26,720
Speaker 8: company like Chopanda, they're looking at Southeast Asia.

497
00:25:26,760 --> 00:25:28,760
Speaker 7: They're looking at opening a store in South Korea. A

498
00:25:28,760 --> 00:25:31,480
Speaker 7: few years ago. You have hay Tea. They opened up

499
00:25:31,560 --> 00:25:32,800
Speaker 7: in New York and December.

500
00:25:32,840 --> 00:25:35,720
Speaker 8: So they're starting to trickle in a few companies planning

501
00:25:35,800 --> 00:25:39,200
Speaker 8: IPOs in the coming months in Hong Kong. But they're

502
00:25:39,240 --> 00:25:41,679
Speaker 8: saying that they're going to start rivaling coffee chains, that

503
00:25:41,720 --> 00:25:43,760
Speaker 8: it's going to be this battle between the coffee chains

504
00:25:43,800 --> 00:25:44,600
Speaker 8: and the bubble Tea.

505
00:25:44,920 --> 00:25:47,240
Speaker 2: This is, you know, my bank just like, what did

506
00:25:47,280 --> 00:25:49,800
Speaker 2: you spend during the year you get it about now?

507
00:25:50,200 --> 00:25:53,000
Speaker 3: You know, for twenty twenty, bubble Tea was number eight

508
00:25:53,040 --> 00:25:53,760
Speaker 3: on my list.

509
00:25:53,880 --> 00:25:55,280
Speaker 1: I'm telling me I even know this.

510
00:25:55,520 --> 00:25:58,600
Speaker 2: I mean the fights blocked to block on the Upper

511
00:25:58,600 --> 00:26:00,160
Speaker 2: East side on bubble Tea.

512
00:26:00,240 --> 00:26:01,080
Speaker 3: Have you ever had it?

513
00:26:01,200 --> 00:26:03,000
Speaker 7: I've tried it. It's too sweet for me. I can't

514
00:26:03,000 --> 00:26:03,280
Speaker 7: do it.

515
00:26:03,280 --> 00:26:07,280
Speaker 2: It's basically sugar and tea right milk down.

516
00:26:07,960 --> 00:26:11,800
Speaker 3: And this is cherubs out the door. It's three PM

517
00:26:12,080 --> 00:26:12,800
Speaker 3: long lines.

518
00:26:13,280 --> 00:26:16,240
Speaker 7: Yes, and they're addicted. They're in the malls. They're overtaking

519
00:26:16,320 --> 00:26:19,040
Speaker 7: like they're just going there's Starbucks on them. That's what

520
00:26:19,080 --> 00:26:19,400
Speaker 7: I'm saying.

521
00:26:19,440 --> 00:26:22,040
Speaker 8: They're going to start rivaling in with the coffee chains.

522
00:26:22,080 --> 00:26:24,800
Speaker 8: So we'll see how this battle goes. I don't know

523
00:26:24,920 --> 00:26:25,520
Speaker 8: New Yorkers.

524
00:26:25,600 --> 00:26:28,200
Speaker 7: Do New Yorkers like their bubble tea or their coffee?

525
00:26:28,280 --> 00:26:28,880
Speaker 7: That's the question.

526
00:26:28,960 --> 00:26:32,560
Speaker 1: They lemon refreshers, the cherubs like their bubble tea.

527
00:26:32,960 --> 00:26:34,480
Speaker 3: Let's move on. This is too painful.

528
00:26:35,720 --> 00:26:37,280
Speaker 7: Okay, here's a new trend for you.

529
00:26:37,800 --> 00:26:42,560
Speaker 8: Longevity vacations. Okay, this is the trend. People are auditioning

530
00:26:42,640 --> 00:26:45,240
Speaker 8: out big money. We're talking about twelve hundred dollars to

531
00:26:45,280 --> 00:26:48,600
Speaker 8: go on vacation and get ozone therapy, or to eighteen

532
00:26:48,680 --> 00:26:53,200
Speaker 8: hundred dollars to get early detection cancer tests on their vacation. Wow,

533
00:26:53,440 --> 00:26:56,399
Speaker 8: and it's really really going on. Resorts are starting to

534
00:26:56,400 --> 00:26:59,919
Speaker 8: go to it. Resorts can now find biological age testing,

535
00:27:00,080 --> 00:27:02,119
Speaker 8: pool side vitamin ivy.

536
00:27:01,800 --> 00:27:03,880
Speaker 7: Drips, stell sem therapy.

537
00:27:03,960 --> 00:27:07,240
Speaker 8: This is all happening for us.

538
00:27:07,760 --> 00:27:11,480
Speaker 1: I mean, shout out to Dan Weinstein. Restore hyper wellness

539
00:27:11,560 --> 00:27:13,840
Speaker 1: ivy drips on vacation. You don't have to go to

540
00:27:13,920 --> 00:27:15,600
Speaker 1: vacation to get your ivy drip. You could do it

541
00:27:15,680 --> 00:27:19,200
Speaker 1: right in Westchester County Restore hyper Wellness. Dan Weinstein shout out.

542
00:27:19,359 --> 00:27:22,520
Speaker 2: Is there such a thing as a tang drip?

543
00:27:23,480 --> 00:27:23,680
Speaker 7: Those?

544
00:27:23,920 --> 00:27:24,240
Speaker 3: Okay?

545
00:27:24,400 --> 00:27:27,000
Speaker 2: But this is this is a serious I don't have

546
00:27:27,040 --> 00:27:29,560
Speaker 2: the guy in you in all seriousness. There's a lot

547
00:27:29,560 --> 00:27:32,760
Speaker 2: of people with a lot of disposable income come into.

548
00:27:32,520 --> 00:27:34,879
Speaker 1: This taking red light. They do cryo. There you go

549
00:27:34,880 --> 00:27:37,040
Speaker 1: into this freezing chamber. I've not done any of this.

550
00:27:37,080 --> 00:27:39,720
Speaker 3: By the way, Bloomberg Intelligence has a cryoth.

551
00:27:39,920 --> 00:27:43,240
Speaker 1: It puts yours on your life, Adam, three days a week.

552
00:27:43,840 --> 00:27:45,920
Speaker 3: Which are you done?

553
00:27:46,760 --> 00:27:51,879
Speaker 7: This last one is a zinger. Gonna love this, Thank you.

554
00:27:52,000 --> 00:27:53,240
Speaker 7: This is from the New York Post.

555
00:27:53,240 --> 00:27:55,399
Speaker 8: So apparently there was this blog post on X from

556
00:27:55,440 --> 00:27:58,040
Speaker 8: a tech executive who's saying he spoke to a guy

557
00:27:58,240 --> 00:28:00,679
Speaker 8: who admitted to spending ten thousd in a month on

558
00:28:00,840 --> 00:28:04,560
Speaker 8: AI girlfriends. Okay, so he went on different websites he

559
00:28:04,920 --> 00:28:07,679
Speaker 8: create them. He points to two ones, Candy AI and

560
00:28:07,760 --> 00:28:10,720
Speaker 8: Cupid at Eye. So this tech guy is saying that

561
00:28:10,800 --> 00:28:13,600
Speaker 8: if someone were to come up with a dating app

562
00:28:13,960 --> 00:28:16,920
Speaker 8: that was for digital AI girlfriends.

563
00:28:17,040 --> 00:28:19,640
Speaker 7: They could make dolls.

564
00:28:21,240 --> 00:28:24,240
Speaker 1: I have two daughters, Lisa, I can't talk about AI.

565
00:28:26,480 --> 00:28:27,720
Speaker 3: I don't know where this is going.

566
00:28:27,840 --> 00:28:31,119
Speaker 1: I mean wives on Saturday night, the AI girlfriend's on

567
00:28:31,160 --> 00:28:31,639
Speaker 1: Friday night.

568
00:28:31,680 --> 00:28:33,480
Speaker 2: We get it, Damian help me here, I get you,

569
00:28:36,160 --> 00:28:40,640
Speaker 2: I get AI for chet GPT and the computer people

570
00:28:40,680 --> 00:28:41,080
Speaker 2: tell me.

571
00:28:41,400 --> 00:28:43,920
Speaker 3: It's like a whole new world after all. But other

572
00:28:44,000 --> 00:28:46,920
Speaker 3: than that, aren't we just searching around for things that

573
00:28:47,040 --> 00:28:48,360
Speaker 3: maybe we'll stick to the wall?

574
00:28:48,640 --> 00:28:50,120
Speaker 1: You know, I have to say. I mean, there was

575
00:28:50,160 --> 00:28:51,600
Speaker 1: a big take on the terminal. I don't know if

576
00:28:51,600 --> 00:28:55,160
Speaker 1: he caught it, Lisa, Tom about sextortion scams and and

577
00:28:55,240 --> 00:28:57,320
Speaker 1: driving teenage I don't want to get all dour here,

578
00:28:57,360 --> 00:28:59,400
Speaker 1: but it's a real serious thing. And you got to

579
00:28:59,440 --> 00:29:02,720
Speaker 1: read this article. It's about driving teenage boys to suicide.

580
00:29:02,720 --> 00:29:05,520
Speaker 1: I mean Nigeria, like these guys are basically pretending to

581
00:29:05,600 --> 00:29:09,240
Speaker 1: be girls, reaching out to young students, high school students,

582
00:29:09,240 --> 00:29:11,760
Speaker 1: and causing them to do some really awful things. It's

583
00:29:11,840 --> 00:29:13,840
Speaker 1: really terrible. I got to read it. It's a big

584
00:29:13,880 --> 00:29:15,120
Speaker 1: take on Bloomberg. It's on topic.

585
00:29:15,360 --> 00:29:18,200
Speaker 3: There's the newspapers today, there's a different one. I mean,

586
00:29:18,240 --> 00:29:20,680
Speaker 3: you know. I mean, hey, I girlfriends, well.

587
00:29:20,600 --> 00:29:24,440
Speaker 2: I'm not worried more about bubble Teath's more reality. All

588
00:29:24,480 --> 00:29:26,800
Speaker 2: I know is Lisa Matteo drove the market hire with

589
00:29:26,920 --> 00:29:30,720
Speaker 2: our newspapers. This is the Bloomberg Surveillance Podcast, bringing you

590
00:29:30,840 --> 00:29:35,440
Speaker 2: the best in economics, finance, investment, and international relations. You

591
00:29:35,480 --> 00:29:38,800
Speaker 2: can also watch the show live on YouTube. Visit the

592
00:29:38,800 --> 00:29:43,600
Speaker 2: Bloomberg Podcast channel on YouTube to see the show weekday

593
00:29:43,600 --> 00:29:46,600
Speaker 2: mornings from seven to ten am Eastern from our global

594
00:29:46,640 --> 00:29:51,320
Speaker 2: headquarters in New York City. Subscribe to the podcast on Apple, Spotify,

595
00:29:51,640 --> 00:29:55,200
Speaker 2: or anywhere else you listen, and always on Bloomberg Radio,

596
00:29:55,400 --> 00:29:58,600
Speaker 2: the Bloomberg Terminal, and the Bloomberg Business app.