1
00:00:00,080 --> 00:00:13,040
Speaker 1: Ye, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene

2
00:00:13,480 --> 00:00:17,560
Speaker 1: Jay Leye. We bring you insight from the best in economics, finance, investment,

3
00:00:18,000 --> 00:00:23,520
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

4
00:00:23,600 --> 00:00:27,960
Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. We

5
00:00:28,080 --> 00:00:30,760
Speaker 1: start the day where we started every single morning on

6
00:00:30,840 --> 00:00:33,400
Speaker 1: Phase one Deal watch. There is no Phase one deal

7
00:00:33,440 --> 00:00:36,720
Speaker 1: agreement yet I strongly support that, and I put this

8
00:00:36,760 --> 00:00:39,760
Speaker 1: in the script on TV. To me, it's the idea

9
00:00:39,920 --> 00:00:43,239
Speaker 1: of a one and done tariff adjustment or is it

10
00:00:43,360 --> 00:00:46,360
Speaker 1: some form of sequence forward? And we still don't know.

11
00:00:46,520 --> 00:00:48,600
Speaker 1: This came from Royt's in the last twenty four hours,

12
00:00:48,600 --> 00:00:50,760
Speaker 1: and agreement between the United States and China to roll

13
00:00:50,800 --> 00:00:53,440
Speaker 1: back existing tariffs as part of a Phase one trade

14
00:00:53,479 --> 00:00:57,520
Speaker 1: deal faces fierce internal opposition in the White House. That

15
00:00:57,640 --> 00:00:59,520
Speaker 1: is where we are right now here in New York

16
00:00:59,520 --> 00:01:02,400
Speaker 1: on police to say is Stephen Stanley, chief economist at

17
00:01:02,400 --> 00:01:05,360
Speaker 1: Amherst Peer Punk, Good morning to Stephen, Good morning your

18
00:01:05,400 --> 00:01:07,760
Speaker 1: take on the back and forth all of this. The

19
00:01:07,800 --> 00:01:11,360
Speaker 1: market is quite clearly made a decisive move yields higher

20
00:01:11,440 --> 00:01:14,759
Speaker 1: equities advance, Yet we still don't have a phase one agreement.

21
00:01:14,880 --> 00:01:17,920
Speaker 1: What is going on? Well, you you need to let

22
00:01:17,920 --> 00:01:20,080
Speaker 1: the fund play out a little more. I think every

23
00:01:20,160 --> 00:01:22,280
Speaker 1: day this week you come in in the morning and

24
00:01:22,400 --> 00:01:24,320
Speaker 1: the markets either up or down based on what the

25
00:01:24,360 --> 00:01:26,959
Speaker 1: latest trade headline is. And unfortunately it feels like we're

26
00:01:26,959 --> 00:01:28,720
Speaker 1: going to be dealing with that for at least another month.

27
00:01:28,800 --> 00:01:31,000
Speaker 1: You would seem to be higher though on positive news

28
00:01:31,040 --> 00:01:33,319
Speaker 1: than they are lower on negative news. There's a real

29
00:01:33,440 --> 00:01:36,680
Speaker 1: difference in terms of the market bias investor attitude than

30
00:01:36,760 --> 00:01:39,280
Speaker 1: compared to maybe three months ago. Yeah, I think people

31
00:01:39,319 --> 00:01:41,480
Speaker 1: are getting a little more optimistic. There's a sense in

32
00:01:41,520 --> 00:01:44,319
Speaker 1: the markets that maybe the global economy, while it's not

33
00:01:44,480 --> 00:01:47,800
Speaker 1: greats has maybe seen its worst days and if we

34
00:01:47,840 --> 00:01:50,240
Speaker 1: are going to get a trade deal, that that signals,

35
00:01:50,360 --> 00:01:53,440
Speaker 1: you know, maybe better days ahead. Going into your take

36
00:01:53,560 --> 00:01:57,000
Speaker 1: is interesting. The details of a deal are probably less

37
00:01:57,000 --> 00:02:00,480
Speaker 1: important than the degree of the clarity that it provides.

38
00:02:01,400 --> 00:02:04,360
Speaker 1: Why South because if you look at the U. S economy,

39
00:02:04,480 --> 00:02:06,720
Speaker 1: the bulk of the damage that's been done because of

40
00:02:06,800 --> 00:02:09,680
Speaker 1: the trade situation is not so much the direct impact

41
00:02:09,760 --> 00:02:12,560
Speaker 1: of the tariffs. It's the uncertainty that has kept businesses

42
00:02:12,639 --> 00:02:16,760
Speaker 1: sideline from investing. So if they see something that allows

43
00:02:16,840 --> 00:02:20,239
Speaker 1: them to move forward with clarity. Then it doesn't really

44
00:02:20,280 --> 00:02:22,679
Speaker 1: matter what the details are. It's just getting them back

45
00:02:22,720 --> 00:02:25,120
Speaker 1: to the table in investing again. And Friday's the game

46
00:02:25,160 --> 00:02:27,480
Speaker 1: will start, I don't know, three o'clock this afternoon. It'll

47
00:02:27,480 --> 00:02:29,920
Speaker 1: clicking on all the blogs, all the analysis. What I

48
00:02:29,960 --> 00:02:33,000
Speaker 1: call the gloom Friday tone. It's been there every week

49
00:02:33,040 --> 00:02:35,040
Speaker 1: and the you know, walls of worry up up up

50
00:02:35,040 --> 00:02:37,880
Speaker 1: in the markets. Steve Sandley, you're gonna drive over that

51
00:02:37,919 --> 00:02:40,960
Speaker 1: with a bulldozer. With an above two and a half

52
00:02:41,040 --> 00:02:45,200
Speaker 1: percent GDP call for the next X number of quarters,

53
00:02:45,240 --> 00:02:48,720
Speaker 1: how alone do you feel and calling for a better

54
00:02:48,880 --> 00:02:52,400
Speaker 1: American economy over the next number of quarters. Well, it's

55
00:02:52,400 --> 00:02:55,239
Speaker 1: certainly an above consensus call. I would say that it's

56
00:02:55,280 --> 00:02:58,600
Speaker 1: interesting the FED has been much more optimistic in their

57
00:02:58,639 --> 00:03:02,760
Speaker 1: tone about the economy in UM the consensus market view

58
00:03:02,840 --> 00:03:05,359
Speaker 1: for quite a while, but the markets have focused more

59
00:03:05,520 --> 00:03:07,960
Speaker 1: on the fact that the FED has been talking about

60
00:03:08,000 --> 00:03:11,400
Speaker 1: downside risks UM. Now that the FED has paused, it

61
00:03:11,480 --> 00:03:14,440
Speaker 1: feels like the shift has gone away from the risks

62
00:03:14,440 --> 00:03:16,760
Speaker 1: a little bit and more to the UM to the

63
00:03:16,960 --> 00:03:19,359
Speaker 1: point estimate forecast, I think a little bit. Where's the

64
00:03:19,400 --> 00:03:22,079
Speaker 1: source of growth in the U. S economy from here, well,

65
00:03:22,120 --> 00:03:25,560
Speaker 1: the consumer continues to be the the sector that's kind

66
00:03:25,600 --> 00:03:28,200
Speaker 1: of driving the train. But I think to get to

67
00:03:28,240 --> 00:03:30,639
Speaker 1: a faster pace of growth from here, you need to

68
00:03:30,680 --> 00:03:33,000
Speaker 1: see a little bit of a revival and business investment,

69
00:03:33,040 --> 00:03:34,920
Speaker 1: which has been negative for the last couple of quarters.

70
00:03:34,960 --> 00:03:38,040
Speaker 1: And when we talk about consumers, there are discussions about

71
00:03:38,080 --> 00:03:42,760
Speaker 1: cracks in the consumer. Uh. Do you buy that the

72
00:03:42,840 --> 00:03:46,480
Speaker 1: labor market is very strong? Uh? Consumer balance sheets as

73
00:03:46,480 --> 00:03:48,960
Speaker 1: a whole are pretty clean. I I think the consumers

74
00:03:49,000 --> 00:03:50,640
Speaker 1: can't get shape. You get the failing though that this

75
00:03:50,760 --> 00:03:53,920
Speaker 1: might be too little, too light. And as far as

76
00:03:53,960 --> 00:03:56,720
Speaker 1: the tride War is concerned that manufacturing abroad is taken

77
00:03:56,840 --> 00:03:59,400
Speaker 1: such a massive hit that it might be inevitable that

78
00:03:59,440 --> 00:04:01,280
Speaker 1: it bleeds to us to what the pots of the economy.

79
00:04:01,320 --> 00:04:03,839
Speaker 1: What do you make of the document? Um, I don't

80
00:04:03,920 --> 00:04:07,640
Speaker 1: think that that's inevitable. I guess the bleed point, it

81
00:04:07,720 --> 00:04:10,080
Speaker 1: seems like would be the labor market, right because business

82
00:04:10,120 --> 00:04:14,200
Speaker 1: has gotten pretty cautious un investment, but they're still hiring. Um.

83
00:04:14,520 --> 00:04:16,680
Speaker 1: Is there a point which they stopped hiring? And that

84
00:04:16,760 --> 00:04:18,880
Speaker 1: was a real concern. I think over the last few

85
00:04:18,920 --> 00:04:22,560
Speaker 1: months and the payroll report last Friday I think alleviated

86
00:04:22,600 --> 00:04:24,520
Speaker 1: that concern to a great degree, because not only did

87
00:04:24,520 --> 00:04:26,360
Speaker 1: you get it better than expected number in October, but

88
00:04:26,440 --> 00:04:29,000
Speaker 1: you've got significant upward divisions to the prior two months.

89
00:04:29,040 --> 00:04:31,560
Speaker 1: So all of a sudden, that slowing trajectory that we

90
00:04:31,640 --> 00:04:34,359
Speaker 1: thought we were seeing isn't there anymore? Enlightened us on

91
00:04:34,400 --> 00:04:38,960
Speaker 1: the makeup of the marginal decline in exports. There's a

92
00:04:39,000 --> 00:04:41,520
Speaker 1: wonderful article I am that was based off i AM

93
00:04:41,560 --> 00:04:42,920
Speaker 1: F research. I think it was in the f T.

94
00:04:43,440 --> 00:04:46,880
Speaker 1: It talked about global auto demand, unit demand down, etcetera.

95
00:04:47,279 --> 00:04:51,040
Speaker 1: But when we say exports are down, is that six

96
00:04:51,200 --> 00:04:53,840
Speaker 1: you know, tankers out of Portland with soybeans on him?

97
00:04:53,880 --> 00:04:57,760
Speaker 1: Is that automobiles? Is that IBM computers? What is that iPhone?

98
00:04:57,880 --> 00:05:00,680
Speaker 1: iPhones are coming this way? When we say we have

99
00:05:00,760 --> 00:05:04,240
Speaker 1: declining exports, what is that? Yeah? Well it's interesting because

100
00:05:04,800 --> 00:05:07,040
Speaker 1: US exports, you know, if you look at kind of

101
00:05:07,040 --> 00:05:09,960
Speaker 1: what are the big categories, A lot of it is

102
00:05:10,040 --> 00:05:12,040
Speaker 1: stuff that you would call kind of low on the

103
00:05:12,080 --> 00:05:16,120
Speaker 1: supply chain, raw materials and um we used to export

104
00:05:16,120 --> 00:05:18,159
Speaker 1: a lot of waste paper to China, for example, and

105
00:05:18,200 --> 00:05:20,640
Speaker 1: scrap metal and stuff like that, and then stuff at

106
00:05:20,640 --> 00:05:22,840
Speaker 1: the very high end, and certainly one thing there would

107
00:05:22,839 --> 00:05:25,600
Speaker 1: be Boeing. I mean, we know that Boeing exports obviously

108
00:05:25,640 --> 00:05:27,040
Speaker 1: are kind of dead in the water right now because

109
00:05:27,040 --> 00:05:29,560
Speaker 1: of the max um. But yeah, I mean, I think

110
00:05:29,560 --> 00:05:31,680
Speaker 1: you've seen a lot of altility from one month to

111
00:05:31,720 --> 00:05:33,479
Speaker 1: the next, and a lot of that is trying to

112
00:05:33,520 --> 00:05:37,160
Speaker 1: time these changes in tariffs. Um, it'll be interesting if

113
00:05:37,160 --> 00:05:38,880
Speaker 1: we do get a deal and we get some stability

114
00:05:38,920 --> 00:05:42,360
Speaker 1: to see what happens. Two reasons for optimism now, One

115
00:05:42,440 --> 00:05:44,599
Speaker 1: that we may get a face one truce between the

116
00:05:44,640 --> 00:05:47,360
Speaker 1: United States and China, and too, there are signs that

117
00:05:47,400 --> 00:05:50,760
Speaker 1: the global economy it's bottoming out in the trade day

118
00:05:50,800 --> 00:05:54,039
Speaker 1: to today, expectations that Chinese exports may completely roll over

119
00:05:54,080 --> 00:05:57,239
Speaker 1: once again better than expect It's still weaker, but better

120
00:05:57,400 --> 00:06:00,720
Speaker 1: than expect it. Do you see those signs as while Stephen,

121
00:06:00,800 --> 00:06:03,520
Speaker 1: and it's that more important than a potential for trite

122
00:06:03,520 --> 00:06:07,520
Speaker 1: truths that the global economy is shoving scientift bottoming out. Yeah,

123
00:06:07,880 --> 00:06:11,640
Speaker 1: I mean, you know, it's it's not getting worse anymore. Um,

124
00:06:11,800 --> 00:06:13,240
Speaker 1: you know, I don't I don't want to jump the

125
00:06:13,240 --> 00:06:17,120
Speaker 1: gun and say that things are getting hugely are hugely

126
00:06:17,160 --> 00:06:20,080
Speaker 1: improved from here, But it does feel like it's kind

127
00:06:20,080 --> 00:06:23,599
Speaker 1: of settling at the bottom, and hopefully we'll rebound from there.

128
00:06:23,839 --> 00:06:26,320
Speaker 1: I do think the trade thing is is critical here

129
00:06:26,360 --> 00:06:30,000
Speaker 1: because even the economies that aren't necessarily directly tied, and

130
00:06:30,000 --> 00:06:32,800
Speaker 1: and I would give the example of Germany. Um, there's

131
00:06:32,800 --> 00:06:34,880
Speaker 1: no reason that their economy should be affected by US

132
00:06:34,960 --> 00:06:37,440
Speaker 1: China trade negotiations, but but it is because they are

133
00:06:37,520 --> 00:06:41,440
Speaker 1: so highly leveraged trade. Steven Stanley, we are, we are

134
00:06:41,480 --> 00:06:44,240
Speaker 1: just immune on the American consumer. I won't shop below

135
00:06:44,279 --> 00:06:48,599
Speaker 1: fifty Night Street. Farrell won't go below Sex. Lisa was

136
00:06:48,640 --> 00:06:52,000
Speaker 1: seen in Soho like three months ago. I think shopping

137
00:06:52,080 --> 00:06:54,440
Speaker 1: What is the state of the American consumer away from

138
00:06:54,480 --> 00:06:57,640
Speaker 1: our little you know, two zip code view here? Yeah? Well,

139
00:06:57,680 --> 00:06:59,920
Speaker 1: I mean you've got a three point five percent unemployment

140
00:07:00,000 --> 00:07:02,960
Speaker 1: eight you've got high consumer confidence, and you've got a

141
00:07:03,000 --> 00:07:06,320
Speaker 1: savings rate above eight percent? So are we saving? Are we?

142
00:07:06,400 --> 00:07:08,880
Speaker 1: Are we gonna spend it? You know? This weekend below

143
00:07:08,920 --> 00:07:13,760
Speaker 1: fourteen Street. I would just say that, you know, most

144
00:07:13,840 --> 00:07:16,440
Speaker 1: retailers that I've heard from are expecting a very good

145
00:07:16,480 --> 00:07:19,080
Speaker 1: holiday season. Do you buy that? I was thinking about

146
00:07:19,120 --> 00:07:22,080
Speaker 1: that walking around you know above fifty ninth Street last night.

147
00:07:22,200 --> 00:07:23,760
Speaker 1: Do you really buy that we're gonna have a bang

148
00:07:23,800 --> 00:07:26,440
Speaker 1: up holiday season? I don't see why not. I mean,

149
00:07:26,600 --> 00:07:29,440
Speaker 1: almost everybody has a job and people are feeling pretty

150
00:07:29,440 --> 00:07:31,840
Speaker 1: good about things. So yeah, I think we will have

151
00:07:32,840 --> 00:07:39,080
Speaker 1: straight once once for an interview with the old g

152
00:07:39,280 --> 00:07:41,920
Speaker 1: E Office building, which is I think on fifty three.

153
00:07:43,880 --> 00:07:48,040
Speaker 1: It was like the studios are right in Jack. I

154
00:07:48,080 --> 00:07:51,520
Speaker 1: have a serious quick question, Steve, when you talk about

155
00:07:51,560 --> 00:07:55,000
Speaker 1: Gucci the high end shopper versus the low end shopper,

156
00:07:55,280 --> 00:07:58,920
Speaker 1: where will the strength come from? Well, I think the

157
00:07:59,000 --> 00:08:02,040
Speaker 1: good news. You know, there have been concerns about you know,

158
00:08:02,160 --> 00:08:03,920
Speaker 1: obviously in the political run there a lot of talk,

159
00:08:04,000 --> 00:08:06,160
Speaker 1: there's a lot of talk about income inequality, but even

160
00:08:06,280 --> 00:08:08,600
Speaker 1: within the economic circles, I think there's been some concern

161
00:08:08,640 --> 00:08:12,200
Speaker 1: about the narrow uh benefits. You know that the upper

162
00:08:12,560 --> 00:08:16,440
Speaker 1: um income households were benefiting all we're getting all the benefit.

163
00:08:16,680 --> 00:08:19,160
Speaker 1: And what we've seen lately, which is pretty classic for

164
00:08:19,160 --> 00:08:21,760
Speaker 1: an economic cycle, is as you get longer into the cycle,

165
00:08:22,400 --> 00:08:25,040
Speaker 1: the benefits start to move down the curve. And I

166
00:08:25,040 --> 00:08:28,800
Speaker 1: think what we're seeing is now you've got labor shortages

167
00:08:28,880 --> 00:08:32,280
Speaker 1: even for unskilled workers. You've got wages going up faster

168
00:08:32,400 --> 00:08:34,679
Speaker 1: for unskilled than for skilled wonders. So I think there

169
00:08:34,800 --> 00:08:38,040
Speaker 1: is some, uh if you want to call it democratization

170
00:08:38,120 --> 00:08:41,160
Speaker 1: of the expansion. Stephen Stanley, thank you so much for

171
00:08:41,200 --> 00:08:59,240
Speaker 1: the point. Greatly greatly appreciate that. Global Wall Street gearing

172
00:08:59,320 --> 00:09:02,480
Speaker 1: up for Friday and from the weekend. Steven Stanley joining

173
00:09:02,559 --> 00:09:05,160
Speaker 1: us in the last hour of Amir's pure punt and

174
00:09:05,160 --> 00:09:07,680
Speaker 1: he is a stunning above two and a half percent

175
00:09:07,840 --> 00:09:11,040
Speaker 1: GDP call for the next six months. Very few people

176
00:09:11,040 --> 00:09:15,000
Speaker 1: out there and that optimism Stanley adamant. It is all

177
00:09:15,040 --> 00:09:17,680
Speaker 1: linked into trade, which is a good way to bring

178
00:09:17,720 --> 00:09:24,520
Speaker 1: in our next guest on China. Miranda high Song, International

179
00:09:24,600 --> 00:09:27,400
Speaker 1: senior macro strategist joins us. Now, Miranda, great Tammy with

180
00:09:27,440 --> 00:09:29,600
Speaker 1: us on the program. Let's start with the data out

181
00:09:29,600 --> 00:09:32,960
Speaker 1: of China. Shall we expectations for exports to roll over.

182
00:09:33,000 --> 00:09:36,160
Speaker 1: They weaken, but not as much as expected. Please help

183
00:09:36,240 --> 00:09:38,360
Speaker 1: us understand whether we have seen the worst of the

184
00:09:38,480 --> 00:09:42,880
Speaker 1: data in China. Well, yeah, on the trade side, it

185
00:09:42,960 --> 00:09:46,000
Speaker 1: was actually the exports were only down point nine, which

186
00:09:46,040 --> 00:09:49,360
Speaker 1: is a lot better than expectations. Um and interestingly, a

187
00:09:49,360 --> 00:09:51,880
Speaker 1: lot of it seems to be being diverted. So it's

188
00:09:51,920 --> 00:09:54,600
Speaker 1: not coming from China, but it's going to the US maybe,

189
00:09:54,800 --> 00:09:58,719
Speaker 1: but it's going to other Asian um nations UM and

190
00:09:58,800 --> 00:10:01,160
Speaker 1: offer to to place US tide to Taiwan. So we're

191
00:10:01,200 --> 00:10:04,760
Speaker 1: actually seeing quite a lot of trade being diverted rather

192
00:10:04,840 --> 00:10:07,360
Speaker 1: than necessarily going to the going to the US market.

193
00:10:07,960 --> 00:10:11,080
Speaker 1: And the interesting thing is now this is basically you're

194
00:10:11,120 --> 00:10:13,880
Speaker 1: coming on for a year of the trade war really

195
00:10:13,920 --> 00:10:16,480
Speaker 1: sort of having an impact, and we're now getting into

196
00:10:16,559 --> 00:10:20,880
Speaker 1: much weaker year on year comparisons. So actually, if this

197
00:10:20,960 --> 00:10:23,280
Speaker 1: is as bad as it gets, then for the next

198
00:10:23,320 --> 00:10:25,800
Speaker 1: few months, we might actually see improving figures from China

199
00:10:26,400 --> 00:10:29,760
Speaker 1: rather than a continued, continued slow down. Miranda. Today was

200
00:10:29,800 --> 00:10:31,840
Speaker 1: the exports that were better than expected. It wasn't the

201
00:10:31,840 --> 00:10:34,560
Speaker 1: imports that really picked up. The imports still look weak.

202
00:10:34,880 --> 00:10:37,600
Speaker 1: That's a story of weak domestic demand for a lot

203
00:10:37,600 --> 00:10:40,439
Speaker 1: of people. Any signs that things are actually picking up

204
00:10:40,840 --> 00:10:45,360
Speaker 1: in the domestic economy, well on the import side is

205
00:10:45,360 --> 00:10:48,200
Speaker 1: actually so you've actually got if you look at the volume,

206
00:10:48,640 --> 00:10:52,439
Speaker 1: volumes were actually pretty good. Interesting crude crude oil was

207
00:10:52,520 --> 00:10:55,680
Speaker 1: up about twelve um, copper was done, but then you

208
00:10:55,720 --> 00:10:59,400
Speaker 1: had things like the plastics and and and so interestingly,

209
00:10:59,440 --> 00:11:05,080
Speaker 1: the the chips chip deliveries were actually really strong about twelve,

210
00:11:05,679 --> 00:11:08,160
Speaker 1: but it was the value that basically dragged the thing down.

211
00:11:08,200 --> 00:11:09,920
Speaker 1: So if you think the all prices and a lot

212
00:11:09,960 --> 00:11:12,440
Speaker 1: of the commodity prices have come down over the last year,

213
00:11:12,760 --> 00:11:15,560
Speaker 1: so that's making it look worse than it actually that

214
00:11:15,600 --> 00:11:17,720
Speaker 1: actually is. And you know, if you if you stip

215
00:11:17,760 --> 00:11:19,800
Speaker 1: that out, then you're basically talking maybe sort of want

216
00:11:19,920 --> 00:11:23,440
Speaker 1: two percentage points down rather than the minus six. But

217
00:11:23,640 --> 00:11:25,679
Speaker 1: I mean coming forward, I think that's going to then

218
00:11:25,720 --> 00:11:29,520
Speaker 1: also you do have some infrastructure side coming in and

219
00:11:29,559 --> 00:11:31,840
Speaker 1: then they're really big debate I think is what happens,

220
00:11:32,280 --> 00:11:34,520
Speaker 1: you know, in the in the auto market, and that

221
00:11:34,520 --> 00:11:38,160
Speaker 1: could really bring in some sort of a sort of flatlining,

222
00:11:38,160 --> 00:11:41,800
Speaker 1: a sort of activity in Q four after what's been

223
00:11:41,800 --> 00:11:44,880
Speaker 1: a really big drag this year. So how much is

224
00:11:44,920 --> 00:11:48,400
Speaker 1: this a story of PBOC liquidity making its way into

225
00:11:48,480 --> 00:11:50,400
Speaker 1: the economy and we're seeing the path there, and how

226
00:11:50,480 --> 00:11:53,040
Speaker 1: much is it's just that people got ahead of themselves

227
00:11:53,040 --> 00:11:57,760
Speaker 1: with the China slowing down into crisis story, Well, I

228
00:11:57,800 --> 00:12:00,120
Speaker 1: think the expectations where the China would be hit a

229
00:12:00,160 --> 00:12:03,160
Speaker 1: lot worse than it has actually been. Um. I mean,

230
00:12:03,200 --> 00:12:06,320
Speaker 1: you have had sort of reasonable um domestic demand. But

231
00:12:06,360 --> 00:12:08,080
Speaker 1: the interesting thing is the p D O C in

232
00:12:08,080 --> 00:12:10,600
Speaker 1: the government haven't done I mean as that they keep saying,

233
00:12:10,600 --> 00:12:13,320
Speaker 1: they haven't done the flood liquidity and they haven't just

234
00:12:13,400 --> 00:12:17,560
Speaker 1: pushed out the bank loans, and they've kept things quite restrained,

235
00:12:17,600 --> 00:12:20,360
Speaker 1: you know, things like the shadow banking um and also

236
00:12:20,400 --> 00:12:22,200
Speaker 1: the p P financing where this is where a lot

237
00:12:22,200 --> 00:12:25,920
Speaker 1: of consumer debt has built up. It's not actually loosened

238
00:12:26,000 --> 00:12:28,800
Speaker 1: us up. Just to be honest, what's keeping the whole

239
00:12:29,320 --> 00:12:31,720
Speaker 1: the whole economy on the road is actually the property

240
00:12:31,760 --> 00:12:35,840
Speaker 1: market where they've allowed you know, some loosening and that's

241
00:12:35,960 --> 00:12:39,080
Speaker 1: sort of keeping everything you know, going reasonably well. But

242
00:12:39,160 --> 00:12:41,880
Speaker 1: they've not, um, they've not done a sort of a

243
00:12:41,960 --> 00:12:45,959
Speaker 1: huge stimulus. So that's basically keeping things relatively stable at

244
00:12:45,960 --> 00:12:48,160
Speaker 1: the same time as you have obviously the trade war impact.

245
00:12:48,600 --> 00:12:51,320
Speaker 1: Can they afford to delay all this talk of the

246
00:12:51,400 --> 00:12:53,679
Speaker 1: week and you know, we're exhausted by the talk of

247
00:12:53,760 --> 00:12:57,360
Speaker 1: the week, but morinda, can they just toss this into

248
00:12:57,360 --> 00:13:02,840
Speaker 1: two thousand twenty they they I mean, obviously the so

249
00:13:02,920 --> 00:13:06,760
Speaker 1: the trade war UM side, they could you know, get

250
00:13:06,760 --> 00:13:09,160
Speaker 1: this in December. It's phase one. This is something that

251
00:13:09,320 --> 00:13:12,960
Speaker 1: China would have, um, you know, decided on last year.

252
00:13:13,000 --> 00:13:15,400
Speaker 1: They would have agreed to something similar you know, this

253
00:13:15,440 --> 00:13:16,840
Speaker 1: time last year, and you wouldn't have had to have

254
00:13:16,880 --> 00:13:19,760
Speaker 1: all this, all the all the rest of it. But

255
00:13:19,800 --> 00:13:23,240
Speaker 1: the but yea, but yes, in terms of the longer

256
00:13:23,360 --> 00:13:25,360
Speaker 1: term issues, in terms of you know, getting to the

257
00:13:25,360 --> 00:13:28,920
Speaker 1: phase two. Um, then the debate is whether China is

258
00:13:28,960 --> 00:13:33,880
Speaker 1: ever going to concede do anything as as significant as

259
00:13:34,080 --> 00:13:38,360
Speaker 1: as the US wants in terms of you know them

260
00:13:39,160 --> 00:13:42,679
Speaker 1: removing state ownership and removing state influence and removing all

261
00:13:42,760 --> 00:13:45,400
Speaker 1: the a lot of redlines for China. So yeah, I

262
00:13:45,400 --> 00:13:47,760
Speaker 1: mean it's phase one could get stein. But then phase two,

263
00:13:48,040 --> 00:13:50,520
Speaker 1: that's that's going to that's a longer term issue and

264
00:13:50,600 --> 00:13:53,880
Speaker 1: that may have to wait a lot longer. Well, Miranda,

265
00:13:54,000 --> 00:13:55,840
Speaker 1: Typically what we would think is that if we go

266
00:13:55,880 --> 00:13:58,679
Speaker 1: into phase two without tackling the big issues, that it

267
00:13:58,720 --> 00:14:00,920
Speaker 1: could blow up Phase one. The reason why some people

268
00:14:00,960 --> 00:14:03,800
Speaker 1: don't think that movie plays out this time around going

269
00:14:03,840 --> 00:14:07,439
Speaker 1: into next year is because next year is an election year.

270
00:14:07,520 --> 00:14:11,240
Speaker 1: Does that change things for you, Miranda, Well, the thing

271
00:14:11,320 --> 00:14:18,320
Speaker 1: is the China that being hard on China can play

272
00:14:18,360 --> 00:14:20,320
Speaker 1: well if you get the if you get the Phase

273
00:14:20,360 --> 00:14:23,040
Speaker 1: one deal signed, and so therefore the agricultural exports and

274
00:14:23,080 --> 00:14:28,120
Speaker 1: al and G benefits that part of the elector, then

275
00:14:28,400 --> 00:14:30,880
Speaker 1: that's fine for China and for the US. But in

276
00:14:31,000 --> 00:14:34,480
Speaker 1: terms of then the bigger scale, so that's a sort

277
00:14:34,520 --> 00:14:38,160
Speaker 1: of you know, the technology, the five G warth and

278
00:14:38,280 --> 00:14:40,600
Speaker 1: AI and a lot of the bigger sort of like

279
00:14:40,680 --> 00:14:43,720
Speaker 1: state influence. Then to be honest in going into an

280
00:14:43,720 --> 00:14:47,120
Speaker 1: election taking a strong stance on that may not actually

281
00:14:47,160 --> 00:14:50,040
Speaker 1: that be that bad if you've already sort of saved

282
00:14:50,080 --> 00:14:52,920
Speaker 1: a little bit of the economy by doing the by

283
00:14:52,960 --> 00:14:55,040
Speaker 1: doing the Phase one deal. And Miranda Kurr, thank you

284
00:14:55,080 --> 00:15:12,440
Speaker 1: so much, greatly appreciated. With High Time International, John. This weekend,

285
00:15:12,640 --> 00:15:16,480
Speaker 1: it's a keen household movie weekend. I'm signing up for

286
00:15:16,560 --> 00:15:20,760
Speaker 1: Excite streaming services. November twelve, that's when Disney Plus comes out.

287
00:15:20,760 --> 00:15:22,760
Speaker 1: You're gonna sign I got a free gave me a

288
00:15:22,880 --> 00:15:25,520
Speaker 1: free up on that early, like two weeks early. I've

289
00:15:25,560 --> 00:15:31,760
Speaker 1: got Disney Plus, Peacock, Hulu, Netflix, the abrama Witz Network.

290
00:15:32,200 --> 00:15:34,520
Speaker 1: What's the abrama Witz networks? You know, like sort of

291
00:15:34,520 --> 00:15:38,840
Speaker 1: super is that money Undercover on Tuesdays at one pm,

292
00:15:39,520 --> 00:15:44,720
Speaker 1: repeat over and over. Lots of people are rushing into that.

293
00:15:44,880 --> 00:15:47,480
Speaker 1: Keithan Rock Nathan joining us now bloom Bug Intelligence media

294
00:15:47,520 --> 00:15:50,640
Speaker 1: analysts with Disney. That's what we're here to talk about. Disney.

295
00:15:50,680 --> 00:15:53,640
Speaker 1: The stock up by six point five percent with an

296
00:15:53,680 --> 00:15:57,280
Speaker 1: earnings beat, and November twelfth, they're joining the streaming wars.

297
00:15:57,360 --> 00:16:01,440
Speaker 1: Gaither your view on the number so far? Yeah, thank you,

298
00:16:01,480 --> 00:16:03,000
Speaker 1: Thank you so much. John So, there was a lot

299
00:16:03,040 --> 00:16:06,920
Speaker 1: to like in Disney's report last night. They're firing on

300
00:16:07,000 --> 00:16:10,120
Speaker 1: all cylinders. But I think, just as we heard Bob

301
00:16:10,120 --> 00:16:14,600
Speaker 1: Iger speak, there's really a streaming first mentality with the management.

302
00:16:14,600 --> 00:16:17,120
Speaker 1: There's a lot of enthusiasm around the Disney Plus launch.

303
00:16:17,600 --> 00:16:19,120
Speaker 1: This is one This is going to be one of

304
00:16:19,200 --> 00:16:22,760
Speaker 1: the most affordable streaming services out there in the marketplace,

305
00:16:22,840 --> 00:16:27,560
Speaker 1: anchored by world class brands like Marvel, Pixar, Lucas Nacio,

306
00:16:28,200 --> 00:16:30,960
Speaker 1: and it's really perfect for the thirty five million US

307
00:16:31,040 --> 00:16:34,320
Speaker 1: households with children who want to immerse themselves in the

308
00:16:34,400 --> 00:16:37,960
Speaker 1: vast world of Disney. I did a long term of

309
00:16:38,080 --> 00:16:41,360
Speaker 1: all study of Disney, and I think I can editorialize

310
00:16:41,360 --> 00:16:45,360
Speaker 1: that they haven't popped like they've popped recently back pushing

311
00:16:45,600 --> 00:16:50,080
Speaker 1: twenty two years. I mean this surge, streaming surge, this

312
00:16:50,240 --> 00:16:53,360
Speaker 1: tiger surge that we've seen, what does that do to

313
00:16:53,480 --> 00:16:56,320
Speaker 1: buy hold cell? Not your by hold cell, but what

314
00:16:56,400 --> 00:16:58,760
Speaker 1: does that do to the street? Is it out front

315
00:16:58,880 --> 00:17:02,480
Speaker 1: because of the pop to ahead of itself? I don't

316
00:17:02,520 --> 00:17:06,160
Speaker 1: think it's ahead of itself. So you're absolutely right, tom

317
00:17:06,200 --> 00:17:08,119
Speaker 1: So for for for the past four years, I mean,

318
00:17:08,160 --> 00:17:10,480
Speaker 1: the stock has been languishing ever since two thousand and

319
00:17:10,520 --> 00:17:14,040
Speaker 1: fifteen when they first spoke about the ESPN subscriber losses.

320
00:17:14,400 --> 00:17:17,720
Speaker 1: And this year's April Investor Day was the real catalyst. Um,

321
00:17:17,760 --> 00:17:21,560
Speaker 1: you know, them announcing the service of the distribution partnerships,

322
00:17:21,600 --> 00:17:24,720
Speaker 1: the content. Everything seems to be kind of working in

323
00:17:24,760 --> 00:17:27,200
Speaker 1: their favor right now. I think in terms of near

324
00:17:27,320 --> 00:17:32,639
Speaker 1: term catalysts, of course the studio is outperforming um, but

325
00:17:32,720 --> 00:17:34,680
Speaker 1: more than anything, I mean, streaming is definitely going to

326
00:17:34,760 --> 00:17:37,439
Speaker 1: be the number one catalysts. I think in general, the

327
00:17:37,480 --> 00:17:41,720
Speaker 1: street is expecting about a ten million subscriber number by

328
00:17:41,720 --> 00:17:45,440
Speaker 1: the end of this year. Disney itself refused to give

329
00:17:45,480 --> 00:17:48,360
Speaker 1: any early reads on subscribers. They've only pointed to their

330
00:17:48,400 --> 00:17:52,400
Speaker 1: longer term sixty to ninety million Disney plus subscriber goal.

331
00:17:52,440 --> 00:17:55,320
Speaker 1: But that's over five years. But I think the first

332
00:17:55,359 --> 00:17:58,000
Speaker 1: reads would be in in the first quarter of their

333
00:17:58,000 --> 00:18:02,440
Speaker 1: fiscal first ter um when as management decides to give

334
00:18:02,440 --> 00:18:04,800
Speaker 1: any early number, do we give you a little bit

335
00:18:04,840 --> 00:18:10,400
Speaker 1: of research here right now, Lisa, November one, Frozen two.

336
00:18:10,480 --> 00:18:12,320
Speaker 1: Do you go to the six pm show or the

337
00:18:12,400 --> 00:18:16,040
Speaker 1: nine PM show? How about the never show? Oh no,

338
00:18:16,200 --> 00:18:18,840
Speaker 1: come on, You're gonna go see the Frozen two in

339
00:18:18,880 --> 00:18:20,600
Speaker 1: the theater the first time I got to gotta pay

340
00:18:20,640 --> 00:18:23,440
Speaker 1: forty eight dollars a ticket or whatever. How big? How

341
00:18:23,440 --> 00:18:26,119
Speaker 1: big is Frozen two to all this? Oh? It is?

342
00:18:26,160 --> 00:18:29,240
Speaker 1: It is massive. I mean if you just heard management yesterday.

343
00:18:29,480 --> 00:18:33,000
Speaker 1: So they actually reported a seventeen percent increase in the

344
00:18:33,040 --> 00:18:36,480
Speaker 1: operating operating income for their park segment. But really the

345
00:18:36,560 --> 00:18:38,600
Speaker 1: driver there was not so much the parks, but it

346
00:18:38,680 --> 00:18:41,440
Speaker 1: was more the merchandise at thirty six percent increase in

347
00:18:41,520 --> 00:18:45,160
Speaker 1: Frozen and Toy Story merchant. So this is huge. Brando

348
00:18:45,280 --> 00:18:48,120
Speaker 1: with boys. You were in Elson and my older son

349
00:18:48,240 --> 00:18:50,960
Speaker 1: said to me when Frozen one was hot, all the

350
00:18:51,000 --> 00:18:54,600
Speaker 1: girls love Frozen. My favorite favorite movie is my favorite

351
00:18:54,600 --> 00:18:58,440
Speaker 1: movie is hot? What what is that? It's not It's

352
00:18:58,960 --> 00:19:03,240
Speaker 1: just not appropriate for radio. Like Frozen. How it's up

353
00:19:03,440 --> 00:19:12,320
Speaker 1: continuing at is very cool, but what's serious is Frozen

354
00:19:12,359 --> 00:19:14,520
Speaker 1: two moves the needle. I think that there's also an

355
00:19:14,560 --> 00:19:18,120
Speaker 1: interesting question about fixed expenses for Disney and how much

356
00:19:18,480 --> 00:19:20,960
Speaker 1: UH they're going to bring in versus pay out. There

357
00:19:21,040 --> 00:19:23,520
Speaker 1: was a story about how the fact they have come

358
00:19:23,520 --> 00:19:27,320
Speaker 1: to an agreement Amazon, Samsung and LG Devices and in

359
00:19:27,440 --> 00:19:30,439
Speaker 1: order to stream their service they already have agreements with

360
00:19:30,480 --> 00:19:33,800
Speaker 1: Apple and Roku. How much of a drag will that be?

361
00:19:34,920 --> 00:19:37,439
Speaker 1: Um So. I think the Amazon deal absolutely adds to

362
00:19:37,520 --> 00:19:42,119
Speaker 1: their distribution muscle. They've already pointed investors to the fact

363
00:19:42,160 --> 00:19:44,720
Speaker 1: that there is going to be some upfront costs with

364
00:19:44,800 --> 00:19:47,159
Speaker 1: the streaming service. I mean, this always happens when you

365
00:19:47,200 --> 00:19:51,280
Speaker 1: need to build up the scale. Um So. They've pointed

366
00:19:51,680 --> 00:19:54,880
Speaker 1: to the streaming services not actually bringing in any profits

367
00:19:54,880 --> 00:19:57,800
Speaker 1: for at least another three to four years. So is

368
00:19:57,840 --> 00:20:01,960
Speaker 1: when Disney Plus breaks even, it could break even earlier

369
00:20:02,000 --> 00:20:04,399
Speaker 1: if if they totally hit the ground running with the

370
00:20:04,440 --> 00:20:07,000
Speaker 1: subscriber number. So we'll have to wait and watch. Katha

371
00:20:07,040 --> 00:20:09,400
Speaker 1: always great to get your thoughts. Keithan Rock and Bloomberg

372
00:20:09,600 --> 00:20:26,960
Speaker 1: Intelligence media analyst went again on the economic data, I'm

373
00:20:27,000 --> 00:20:29,760
Speaker 1: pleased to say, joining us right now Atlanta FED President

374
00:20:29,840 --> 00:20:32,960
Speaker 1: Raphael Bostick sitting down with Bloomberg's Michael McKay and Alex

375
00:20:33,000 --> 00:20:36,080
Speaker 1: Steele Now are Bloomberg television and radio listeners and joining

376
00:20:36,160 --> 00:20:39,920
Speaker 1: us here for a special conversation is Raphael Bostic, president

377
00:20:40,000 --> 00:20:42,600
Speaker 1: of the Atlanta Fed. You're the perfect one to help

378
00:20:42,640 --> 00:20:45,919
Speaker 1: us answer all these questions. You said yesterday that you

379
00:20:45,960 --> 00:20:48,920
Speaker 1: would probably dissented and voted against an interest rate cut

380
00:20:49,119 --> 00:20:53,360
Speaker 1: at the last f O MC meeting. Why. Well, one

381
00:20:53,359 --> 00:20:54,720
Speaker 1: of the things that we try to do in the

382
00:20:54,760 --> 00:20:57,120
Speaker 1: sixth district is really get a sense of what's such

383
00:20:57,119 --> 00:21:00,639
Speaker 1: rejective of the economy and how much are the risks

384
00:21:00,680 --> 00:21:04,080
Speaker 1: out there being taken on by businesses and consumers, And

385
00:21:04,119 --> 00:21:07,280
Speaker 1: in my canvassing of our district and hearing from our directors,

386
00:21:07,520 --> 00:21:10,199
Speaker 1: we just weren't hearing that in a material way. And

387
00:21:10,240 --> 00:21:12,640
Speaker 1: so we had already done a fair amount of accommodation.

388
00:21:12,840 --> 00:21:16,040
Speaker 1: We've moved twice already, and it was my view that

389
00:21:16,080 --> 00:21:18,600
Speaker 1: we really should just let that go and let's wait

390
00:21:18,640 --> 00:21:20,679
Speaker 1: and see how it how it plays out, and if

391
00:21:20,720 --> 00:21:23,760
Speaker 1: then then if we see that there's more need for accommodation.

392
00:21:23,840 --> 00:21:26,080
Speaker 1: We could act at that point, We've already done a lot,

393
00:21:26,119 --> 00:21:28,639
Speaker 1: and I was willing to just let's see how that

394
00:21:28,680 --> 00:21:31,200
Speaker 1: plays through the economy. Well, you concerned that rates are

395
00:21:31,320 --> 00:21:35,760
Speaker 1: too low now that there's an issue with where rates

396
00:21:35,880 --> 00:21:39,360
Speaker 1: are with inflation quiesced, what would be the problem? Well,

397
00:21:39,400 --> 00:21:41,920
Speaker 1: I think, first of all, I think we are slightly

398
00:21:41,920 --> 00:21:45,200
Speaker 1: accommodative UM, and that's fine. I don't think that our

399
00:21:45,240 --> 00:21:48,960
Speaker 1: position now is likely to spark the economy to get

400
00:21:48,960 --> 00:21:51,680
Speaker 1: into an overheated mode where we might expect there to

401
00:21:51,760 --> 00:21:54,480
Speaker 1: be some weakening in response to that. I worry a

402
00:21:54,520 --> 00:21:57,520
Speaker 1: lot about the policy space that we have. H We

403
00:21:57,600 --> 00:21:59,879
Speaker 1: are at a half to three one and three quarters.

404
00:22:00,040 --> 00:22:02,400
Speaker 1: That's not a lot of space when you think historically

405
00:22:02,400 --> 00:22:05,760
Speaker 1: what responses have been in the recessionary to a recession.

406
00:22:06,080 --> 00:22:08,280
Speaker 1: We don't have that much space, and so I want

407
00:22:08,320 --> 00:22:11,000
Speaker 1: to make sure that when we do deploy our tools,

408
00:22:11,000 --> 00:22:14,600
Speaker 1: they're they're deployed in maximum effect. Uh. In a way

409
00:22:14,640 --> 00:22:17,480
Speaker 1: that leaves us with with policy apps moving forward. You

410
00:22:17,520 --> 00:22:20,359
Speaker 1: mentioned the R word recession, and Alex was just saying

411
00:22:20,520 --> 00:22:22,760
Speaker 1: you're the perfect one to answer the question. Uh, there

412
00:22:22,760 --> 00:22:25,960
Speaker 1: seems to be a change in mood certainly on Wall

413
00:22:25,960 --> 00:22:28,800
Speaker 1: Street and the idea of UH downturn being priced out

414
00:22:28,800 --> 00:22:31,200
Speaker 1: now people are getting optimistic. Have you seen that kind

415
00:22:31,200 --> 00:22:34,080
Speaker 1: of change on the ground in your district or did

416
00:22:34,080 --> 00:22:37,640
Speaker 1: Wall Street see something that the businessmen men you talked

417
00:22:37,640 --> 00:22:42,320
Speaker 1: to didn't see. So, my business contexts have been consistent

418
00:22:42,359 --> 00:22:45,800
Speaker 1: through this entire year. That consumer has been solid, their

419
00:22:45,840 --> 00:22:49,800
Speaker 1: revenues have been solid, their profits have been pretty stable.

420
00:22:50,040 --> 00:22:52,800
Speaker 1: Actually for many it's more than what they expected in

421
00:22:53,440 --> 00:22:56,520
Speaker 1: and at the beginning of this year, And what they've

422
00:22:56,560 --> 00:22:58,800
Speaker 1: told me is that they're expecting that to continue on

423
00:22:58,880 --> 00:23:02,840
Speaker 1: into So I've not really heard much of a change

424
00:23:02,880 --> 00:23:05,880
Speaker 1: in perspective. They've always been in that positive space and

425
00:23:06,040 --> 00:23:08,359
Speaker 1: that's pretty much what we're expecting moving forward. And to

426
00:23:08,400 --> 00:23:10,240
Speaker 1: add on to that, to the speech you gave yesterday,

427
00:23:10,240 --> 00:23:12,440
Speaker 1: we'll have a quote from it that sort of encapsulates

428
00:23:12,480 --> 00:23:14,760
Speaker 1: that to trade policies impacting the business sector as a

429
00:23:14,800 --> 00:23:18,360
Speaker 1: whole remains modest, flowing capital expenditures by a few percentage

430
00:23:18,359 --> 00:23:21,199
Speaker 1: points in leading to a small change in overall employment. So,

431
00:23:21,560 --> 00:23:23,359
Speaker 1: like you were saying, it's not really doing that much.

432
00:23:23,600 --> 00:23:27,040
Speaker 1: So walking through what higher yields do then, because we

433
00:23:27,200 --> 00:23:29,520
Speaker 1: freak out like when we go from you know, one

434
00:23:29,560 --> 00:23:31,840
Speaker 1: point three to one point eight and there's lots of

435
00:23:31,920 --> 00:23:34,600
Speaker 1: volatility Wall Street at the market, we freak out, what

436
00:23:34,760 --> 00:23:37,119
Speaker 1: what does it mean for you? Well, for for me

437
00:23:37,240 --> 00:23:39,639
Speaker 1: and and for many businesses, I think they take a

438
00:23:39,720 --> 00:23:43,520
Speaker 1: longer view. So this, this day to day volatility is

439
00:23:43,520 --> 00:23:46,200
Speaker 1: not stuff that really affects them because it's not what's

440
00:23:46,280 --> 00:23:48,560
Speaker 1: driving their consumers when they walk into their stores to

441
00:23:48,600 --> 00:23:50,919
Speaker 1: buy goods. So so I think that you take a

442
00:23:50,920 --> 00:23:53,639
Speaker 1: longer arc. And when you see the longer arc, the

443
00:23:53,800 --> 00:23:57,120
Speaker 1: risks they're out there. There's uncertainty that's out there, much

444
00:23:57,160 --> 00:23:59,600
Speaker 1: of it hasn't actually been resolved in ways so that

445
00:23:59,640 --> 00:24:02,520
Speaker 1: we know what the impacts are. And what I'm hearing

446
00:24:02,520 --> 00:24:06,080
Speaker 1: from businesses is that they're gonna they understand their uncertainties.

447
00:24:06,080 --> 00:24:09,240
Speaker 1: That's a wide set of them. So they're making contingency plans.

448
00:24:09,359 --> 00:24:12,639
Speaker 1: They're starting to think about diversifying supply chains and ways

449
00:24:12,680 --> 00:24:15,119
Speaker 1: to get goods to market. But it is not with

450
00:24:15,280 --> 00:24:18,440
Speaker 1: a level of panic or consternation that that uh, you

451
00:24:18,480 --> 00:24:22,400
Speaker 1: know I've heard articulated in kind of dis context. Well,

452
00:24:22,920 --> 00:24:25,320
Speaker 1: when you look at when you look at the uncertainty

453
00:24:25,320 --> 00:24:27,320
Speaker 1: out there, and everybody blames it on the trade wars

454
00:24:27,320 --> 00:24:31,879
Speaker 1: and things like that. Are companies saying that they need

455
00:24:31,920 --> 00:24:35,800
Speaker 1: to expand but they're afraid to or are they pretty

456
00:24:35,880 --> 00:24:39,159
Speaker 1: much comfortable with the resources the supply they have to

457
00:24:39,280 --> 00:24:43,080
Speaker 1: meet demand. I think it's more the ladder you. So,

458
00:24:43,200 --> 00:24:47,680
Speaker 1: for many businesses was a record year in terms of performance,

459
00:24:48,040 --> 00:24:50,760
Speaker 1: and so staying at a record level is not a

460
00:24:50,800 --> 00:24:53,560
Speaker 1: bad thing. And so I think that staying at this

461
00:24:53,680 --> 00:24:56,680
Speaker 1: level is something that businesses would be comfortable with. Of course,

462
00:24:56,720 --> 00:24:59,560
Speaker 1: if there were opportunities to grow and do things that

463
00:24:59,560 --> 00:25:02,520
Speaker 1: were pre they would want to do that. But in

464
00:25:02,560 --> 00:25:05,480
Speaker 1: that context, the biggest constraint that I'm hearing them say

465
00:25:05,560 --> 00:25:10,240
Speaker 1: is finding quality labor, finding workers. The labor market is tight,

466
00:25:10,560 --> 00:25:12,960
Speaker 1: I mean, and they're looking for ways to get the

467
00:25:13,040 --> 00:25:16,280
Speaker 1: right people into positions so they can take advantage of opportunities.

468
00:25:16,640 --> 00:25:19,160
Speaker 1: If you're watching Boomberg Television or listening to Boomberg Radio,

469
00:25:19,160 --> 00:25:20,840
Speaker 1: we want to welcome you. We're speaking with the Land

470
00:25:20,840 --> 00:25:24,960
Speaker 1: of Fed President Raphael Bostick. Where is the labor market

471
00:25:25,080 --> 00:25:29,159
Speaker 1: most type? What sectors? So um I would say, not

472
00:25:29,280 --> 00:25:32,159
Speaker 1: in sectors, I would say at segments of the labor market.

473
00:25:32,400 --> 00:25:33,960
Speaker 1: So one of the things that we're hearing a lot

474
00:25:34,000 --> 00:25:36,320
Speaker 1: of is trying to get entry level workers, like get

475
00:25:36,359 --> 00:25:40,680
Speaker 1: in restaurants are like has become extremely competitive, and so

476
00:25:41,480 --> 00:25:46,919
Speaker 1: businesses are changing their their screening requirements. Drug tests in

477
00:25:47,000 --> 00:25:50,840
Speaker 1: some sense are being dropped, looking at prison records as

478
00:25:50,920 --> 00:25:55,439
Speaker 1: being dropped. We've even heard of a restaurantur who is

479
00:25:56,320 --> 00:25:58,960
Speaker 1: hiring you and you started on the same day. So

480
00:25:59,040 --> 00:26:01,280
Speaker 1: they're getting very restive in terms of trying to get

481
00:26:01,280 --> 00:26:04,160
Speaker 1: that entry level worker, and the wage pressures for that

482
00:26:04,200 --> 00:26:11,000
Speaker 1: segment are significant. Certainly, we know that engineers, tech people, nurses,

483
00:26:11,280 --> 00:26:17,080
Speaker 1: places where either the economy is super super uh strong

484
00:26:17,160 --> 00:26:20,000
Speaker 1: for that and looking for those sorts of workers, or

485
00:26:20,040 --> 00:26:21,680
Speaker 1: where we know we have shortages of workers in the

486
00:26:21,680 --> 00:26:24,520
Speaker 1: case of nurses for example, or truck drivers, we're seeing

487
00:26:24,600 --> 00:26:28,800
Speaker 1: definite competition and that's showing up on wages as well. Well.

488
00:26:28,800 --> 00:26:32,639
Speaker 1: The question, though, is why aren't wages overall rising given

489
00:26:32,680 --> 00:26:35,240
Speaker 1: where we are with unemployment. Is there a lot of

490
00:26:35,280 --> 00:26:38,200
Speaker 1: extra slack out there or have we just gotten used

491
00:26:38,240 --> 00:26:41,199
Speaker 1: to a low wage environment. So I think it's actually

492
00:26:41,960 --> 00:26:44,880
Speaker 1: a combination of a number of factors. When I first

493
00:26:44,880 --> 00:26:47,280
Speaker 1: started this job two and a half years ago, yeah,

494
00:26:47,320 --> 00:26:48,840
Speaker 1: I asked this question. I was a new guy, I

495
00:26:48,880 --> 00:26:50,920
Speaker 1: haven't hadn't talked to businesses. I was like, we've got

496
00:26:50,920 --> 00:26:52,880
Speaker 1: to find out why this is happening. Because if you're

497
00:26:52,920 --> 00:26:56,040
Speaker 1: if you're complaining about shortage of workers, obviously just pay

498
00:26:56,119 --> 00:26:58,800
Speaker 1: them more. You'll get you you'll compete better. And some

499
00:26:58,880 --> 00:27:02,439
Speaker 1: of them said, look, I remember seven years ago when

500
00:27:02,480 --> 00:27:04,520
Speaker 1: I had to lay off, you know, a third of

501
00:27:04,600 --> 00:27:06,919
Speaker 1: my staff. That was so painful. I'm going to be

502
00:27:07,119 --> 00:27:10,960
Speaker 1: very reticent to quickly take people on that way. Others

503
00:27:11,280 --> 00:27:15,320
Speaker 1: said that, um, look, today's workers, many of them aren't

504
00:27:15,359 --> 00:27:19,440
Speaker 1: looking for wages. They're looking for flexibility in the work schedule.

505
00:27:19,600 --> 00:27:21,720
Speaker 1: They're looking to bring their pet to work. They're looking

506
00:27:21,720 --> 00:27:24,560
Speaker 1: for a lot of different things to allow pet to work.

507
00:27:24,640 --> 00:27:30,200
Speaker 1: Oh yeah, bring bring you got a cat, a cat,

508
00:27:31,600 --> 00:27:33,080
Speaker 1: the cat person too, so we can we have that

509
00:27:33,080 --> 00:27:36,440
Speaker 1: in but but yeah, so so finding ways to make

510
00:27:36,480 --> 00:27:40,359
Speaker 1: people work in their comfortable environment, and that's something that

511
00:27:40,359 --> 00:27:42,760
Speaker 1: that's happened a lot a lot as well. A third

512
00:27:42,880 --> 00:27:45,520
Speaker 1: is on the consumer side. So consumers also remember from

513
00:27:45,520 --> 00:27:49,160
Speaker 1: the Great Recession that you know, the three desks next

514
00:27:49,200 --> 00:27:51,159
Speaker 1: to them used to have people in it, and now

515
00:27:51,200 --> 00:27:54,320
Speaker 1: they don't anymore. So they're so their willingness to push

516
00:27:54,560 --> 00:27:57,480
Speaker 1: wages has actually changed a lot as well. Now that

517
00:27:57,600 --> 00:28:00,080
Speaker 1: was that was ten years ago, almost actually more and

518
00:28:00,160 --> 00:28:03,440
Speaker 1: ten years ago at the beginning. And what's happening is

519
00:28:03,840 --> 00:28:07,520
Speaker 1: that that psychology, the further way you get, the more

520
00:28:07,600 --> 00:28:10,879
Speaker 1: you get into a more regular type of mindset and

521
00:28:10,960 --> 00:28:14,120
Speaker 1: more historically normal mindset. And so what we're seeing now

522
00:28:14,240 --> 00:28:16,199
Speaker 1: is we're seeing pretty significant If you look at our

523
00:28:16,359 --> 00:28:19,520
Speaker 1: our wage tracker that we have on our website, you're

524
00:28:19,520 --> 00:28:24,360
Speaker 1: seeing significant jumps in um wages for people who are

525
00:28:24,440 --> 00:28:27,359
Speaker 1: changing jobs. Right, So this this notion that you're starting

526
00:28:27,400 --> 00:28:30,080
Speaker 1: to get some energy in the churn of the labor force,

527
00:28:30,320 --> 00:28:33,000
Speaker 1: that's an important sign that that things are actually not

528
00:28:33,480 --> 00:28:36,000
Speaker 1: so irregular and that we may be getting back into

529
00:28:36,320 --> 00:28:39,040
Speaker 1: a more normal phase. In this political season, there's a

530
00:28:39,080 --> 00:28:42,440
Speaker 1: lot of talk about two Americas and how some are

531
00:28:42,440 --> 00:28:44,719
Speaker 1: doing really well, particularly urban areas. You've got some big

532
00:28:44,880 --> 00:28:49,320
Speaker 1: urban areas in your district Atlanta, Miami, Tampa, Birmingham, and

533
00:28:49,360 --> 00:28:52,520
Speaker 1: you've got some very poor areas. Are there two America's?

534
00:28:52,560 --> 00:28:55,280
Speaker 1: Do people see things differently as you travel around your district?

535
00:28:55,680 --> 00:28:58,680
Speaker 1: There are definitely multiple America's, right, So you know, as

536
00:28:58,680 --> 00:29:01,840
Speaker 1: I've gone around, and our district is incredibly diverse. We

537
00:29:01,880 --> 00:29:03,800
Speaker 1: have the big places, we got a lot of smaller places.

538
00:29:03,840 --> 00:29:06,640
Speaker 1: We look at the map, most of my area is

539
00:29:06,680 --> 00:29:11,440
Speaker 1: not the big cities. It's smaller towns. It's rural, it's agricultural,

540
00:29:11,960 --> 00:29:14,400
Speaker 1: and and there are places many of them used to

541
00:29:14,440 --> 00:29:17,760
Speaker 1: have like a mill that used to employ a lot

542
00:29:17,760 --> 00:29:20,400
Speaker 1: of workers. But as the economy has evolved, as we can,

543
00:29:20,520 --> 00:29:24,280
Speaker 1: we've become more global um, those things have disappeared. And

544
00:29:24,320 --> 00:29:30,040
Speaker 1: so you go to places where South Georgia or northern Alabama,

545
00:29:30,040 --> 00:29:34,800
Speaker 1: north western Alabama, or the eastern half of Tennessee. Once

546
00:29:34,840 --> 00:29:39,160
Speaker 1: you get past um Chattanooga and the like, you see

547
00:29:39,160 --> 00:29:43,400
Speaker 1: places where they're not experiencing three percent growth and they're

548
00:29:43,640 --> 00:29:49,080
Speaker 1: got population stagnation and their demographics are aging very rapidly,

549
00:29:49,360 --> 00:29:51,400
Speaker 1: and they're facing a different kind of challenge than you

550
00:29:51,480 --> 00:29:54,360
Speaker 1: faced in Nashville or in midtown Atlanta, where where my

551
00:29:54,400 --> 00:29:57,680
Speaker 1: bank is. And so we try to talk about We

552
00:29:57,720 --> 00:30:00,840
Speaker 1: talked to them differently about the economy and about what

553
00:30:00,960 --> 00:30:03,160
Speaker 1: things they need. What are the skills that might be

554
00:30:03,200 --> 00:30:07,320
Speaker 1: required for being competitive in the workforce of tomorrow. How

555
00:30:07,320 --> 00:30:12,120
Speaker 1: do you think about the region to UM to really

556
00:30:12,160 --> 00:30:15,400
Speaker 1: project that reason and be in the mind of employers

557
00:30:15,400 --> 00:30:17,840
Speaker 1: that are looking for that next place to open. And

558
00:30:17,880 --> 00:30:20,479
Speaker 1: so it's a very different conversation that we have in

559
00:30:20,520 --> 00:30:22,840
Speaker 1: some of the hot places, where it's how do you

560
00:30:22,880 --> 00:30:27,240
Speaker 1: preserve affordability and access to neighborhoods and getting amenities more

561
00:30:27,280 --> 00:30:31,280
Speaker 1: evenly spread across the area. We're talking with Atlanta FED

562
00:30:31,320 --> 00:30:35,320
Speaker 1: President Raphael Bostika and Blueberg Television and Radio worldwide. Uh,

563
00:30:35,440 --> 00:30:37,040
Speaker 1: what do you do about that? Then? How do you

564
00:30:37,840 --> 00:30:41,520
Speaker 1: can you help these other areas, not necessarily the FED,

565
00:30:41,880 --> 00:30:44,680
Speaker 1: but can they be helped with economic policies? Or have

566
00:30:44,800 --> 00:30:48,840
Speaker 1: we moved on to a time period where you have

567
00:30:48,960 --> 00:30:50,880
Speaker 1: to live in the bigger cities if you want to

568
00:30:50,920 --> 00:30:53,640
Speaker 1: see economic growth. So I actually think you can do

569
00:30:53,720 --> 00:30:58,240
Speaker 1: something about this. So one is let's make sure that

570
00:30:58,320 --> 00:31:00,400
Speaker 1: the people who are living in these places that have

571
00:31:00,560 --> 00:31:04,560
Speaker 1: stagnated actually know where the opportunities are. One of the

572
00:31:04,600 --> 00:31:07,080
Speaker 1: senses that I've had is there's so much discussion about

573
00:31:07,240 --> 00:31:09,480
Speaker 1: you know, these global economy things are changing, things are changing,

574
00:31:10,000 --> 00:31:12,920
Speaker 1: and in many instances it just stops there and it

575
00:31:12,960 --> 00:31:16,760
Speaker 1: doesn't say, well, change actually imposes costs, but it also

576
00:31:16,800 --> 00:31:20,040
Speaker 1: brings opportunities and you can position yourself to take advantage

577
00:31:20,040 --> 00:31:22,240
Speaker 1: of those opportunities. I go to a lot of places

578
00:31:22,280 --> 00:31:24,200
Speaker 1: and they don't know what the opportunities are. They've not

579
00:31:24,400 --> 00:31:27,120
Speaker 1: had people have that conversation with them. So that's the

580
00:31:27,160 --> 00:31:31,120
Speaker 1: first thing. Because there are things that these like automation,

581
00:31:31,240 --> 00:31:35,200
Speaker 1: all these new developments, jobs come with them. Those jobs

582
00:31:35,320 --> 00:31:37,600
Speaker 1: have a different set of skills, and we need to

583
00:31:37,640 --> 00:31:40,960
Speaker 1: make sure that they understand what those skills are, and

584
00:31:40,960 --> 00:31:44,600
Speaker 1: then that we also have pipelines of pathways so they

585
00:31:44,640 --> 00:31:47,760
Speaker 1: can get those skills. Because you know, historically in the

586
00:31:47,840 --> 00:31:52,400
Speaker 1: US we've always had technology technological disruption. So everybody used

587
00:31:52,400 --> 00:31:55,040
Speaker 1: to be a farmer. Technology can and we don't need farmers.

588
00:31:55,080 --> 00:31:57,360
Speaker 1: But in those days, we don't need as many farmers.

589
00:31:57,400 --> 00:31:59,960
Speaker 1: In those days, UM, the skills that you need to

590
00:32:00,240 --> 00:32:03,000
Speaker 1: do farming weren't so different than skills you needed to

591
00:32:03,040 --> 00:32:06,040
Speaker 1: work in a factory. Today, the skills you need to

592
00:32:06,080 --> 00:32:08,200
Speaker 1: do many of the jobs that are being disrupted out

593
00:32:08,280 --> 00:32:11,760
Speaker 1: are different, and so we need to have robust and

594
00:32:11,880 --> 00:32:16,120
Speaker 1: mature training programs and facilities to allow people to get

595
00:32:16,160 --> 00:32:19,520
Speaker 1: those skills. Is there anything that you can do well,

596
00:32:19,640 --> 00:32:23,920
Speaker 1: We don't do that at the favernment. UM, it needs

597
00:32:23,960 --> 00:32:28,400
Speaker 1: to be institutional it needs to be institutionalized. Sometimes that

598
00:32:28,440 --> 00:32:31,200
Speaker 1: will be the public sector of the government, other times

599
00:32:31,240 --> 00:32:34,600
Speaker 1: it will be the private sector. So I've had a

600
00:32:34,640 --> 00:32:38,360
Speaker 1: director in uh from my Nuance branch. She ran a hospital.

601
00:32:39,040 --> 00:32:41,280
Speaker 1: She said, we don't have enough nurses. She set up

602
00:32:41,280 --> 00:32:44,960
Speaker 1: a school and and so so what we're seeing is

603
00:32:45,040 --> 00:32:49,800
Speaker 1: many different blends private sector, public sector, public private partnerships,

604
00:32:49,960 --> 00:32:53,040
Speaker 1: nonprofits can get involved. And so one of the things

605
00:32:53,080 --> 00:32:55,200
Speaker 1: that we try to do when we go around is

606
00:32:55,280 --> 00:32:59,320
Speaker 1: really try to understand what's in that community that can

607
00:32:59,360 --> 00:33:02,560
Speaker 1: come together to be the building blocks for those strategies

608
00:33:02,600 --> 00:33:04,080
Speaker 1: to make that change. Well, let's bring it back to

609
00:33:04,120 --> 00:33:07,600
Speaker 1: monetary policy. Chairman Powell has talked about leaving rates low

610
00:33:07,880 --> 00:33:10,640
Speaker 1: to help those people out as much as possible, to

611
00:33:10,680 --> 00:33:14,360
Speaker 1: get the expansion into the corners of the economy. Where

612
00:33:14,400 --> 00:33:16,880
Speaker 1: would you like to see how comfortable are you? But

613
00:33:16,960 --> 00:33:19,080
Speaker 1: we put this way, with interest rates where they are,

614
00:33:19,240 --> 00:33:21,840
Speaker 1: and how long would you be able to leave them

615
00:33:21,840 --> 00:33:24,640
Speaker 1: there in order for that to happen. But first of all,

616
00:33:24,640 --> 00:33:27,080
Speaker 1: I think it's really great that the chair is willing

617
00:33:27,120 --> 00:33:30,280
Speaker 1: to talk about the distributional impacts of monetary policy and

618
00:33:30,320 --> 00:33:33,320
Speaker 1: the fact that there might be distributional impacts. We know

619
00:33:33,480 --> 00:33:37,000
Speaker 1: that in economic cycles there are certain segments of our

620
00:33:37,240 --> 00:33:40,120
Speaker 1: population that are the last ones to benefit, and so

621
00:33:40,200 --> 00:33:42,800
Speaker 1: the longer that you can have a growth cycle, the

622
00:33:42,880 --> 00:33:47,040
Speaker 1: more possibilities and opportunities there are for that group to

623
00:33:47,240 --> 00:33:50,520
Speaker 1: become part of the labor force and labor market. My

624
00:33:50,600 --> 00:33:53,920
Speaker 1: biggest concern is that if you run low and the

625
00:33:54,400 --> 00:33:57,640
Speaker 1: market gets too hot. Almost every time we get to

626
00:33:57,640 --> 00:33:59,960
Speaker 1: a place where the markets too hot, the labor market

627
00:34:00,040 --> 00:34:03,160
Speaker 1: gets too tight. UM. That's usually a signal that businessister

628
00:34:03,280 --> 00:34:06,600
Speaker 1: taking risks, and we often will find that there will

629
00:34:06,600 --> 00:34:09,240
Speaker 1: be a recession that comes after that. And when that happens,

630
00:34:09,239 --> 00:34:12,480
Speaker 1: it is often the case that UM, the last ones

631
00:34:12,520 --> 00:34:15,879
Speaker 1: in are the first ones out, so so the benefits

632
00:34:16,600 --> 00:34:19,080
Speaker 1: UM wind up not being as great. So one of

633
00:34:19,120 --> 00:34:22,320
Speaker 1: the things I'm hoping for is, let's get sustainable growth.

634
00:34:22,640 --> 00:34:25,360
Speaker 1: Let's have this go along. Does have go in the

635
00:34:25,400 --> 00:34:28,200
Speaker 1: steady way that we don't get to an overheating position,

636
00:34:28,480 --> 00:34:30,600
Speaker 1: so that when we get those new jobs, their jobs

637
00:34:30,600 --> 00:34:34,160
Speaker 1: that will sustain. Now, for me, that's that's sort of

638
00:34:34,239 --> 00:34:37,120
Speaker 1: part and personal what we're trying to do writ large,

639
00:34:37,440 --> 00:34:40,000
Speaker 1: and my hope is that we're not going to see

640
00:34:40,040 --> 00:34:42,840
Speaker 1: those signs of overheating. We're not going to see pockets

641
00:34:42,880 --> 00:34:44,959
Speaker 1: of the of the economy where it looks like there's

642
00:34:45,120 --> 00:34:48,239
Speaker 1: significant risk taking that's building up that might spill over

643
00:34:48,280 --> 00:34:51,799
Speaker 1: into a broader economic experience or event. So that's that's

644
00:34:51,840 --> 00:34:53,719
Speaker 1: kind of where where we are right now, where my

645
00:34:53,800 --> 00:34:56,759
Speaker 1: head is at Atlanta Fed President Ralphael Bostic, Thank you

646
00:34:56,800 --> 00:34:58,239
Speaker 1: so much. It was really great to spend this time

647
00:34:58,280 --> 00:35:00,440
Speaker 1: with you and for all of our Bloomberg to television

648
00:35:00,440 --> 00:35:02,799
Speaker 1: and radio listeners. Thanks for joining us as Atlanta FED

649
00:35:02,840 --> 00:35:06,400
Speaker 1: President Raphael Bostic. Alex still there alongside Michael McKee and

650
00:35:06,400 --> 00:35:10,000
Speaker 1: the Atlanta Fed President Raphael Bostick, and really interesting conversation

651
00:35:10,239 --> 00:35:13,840
Speaker 1: another Fed official, Tom really talking up the US economy

652
00:35:13,840 --> 00:35:18,240
Speaker 1: and most specifically the US labor market. Thanks for listening

653
00:35:18,280 --> 00:35:22,840
Speaker 1: to the Bloomberg Surveillance podcast. Subscribe and listen to interviews

654
00:35:22,840 --> 00:35:28,120
Speaker 1: on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer.

655
00:35:28,640 --> 00:35:32,000
Speaker 1: I'm on Twitter at Tom Keane. Before the podcast, you

656
00:35:32,040 --> 00:35:35,400
Speaker 1: can always catch us worldwide. I'm Bloomberg Radio