May 27, 2025 • 43 mins
Watch Tom and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg Surveillance hosted by Tom Keene & Paul SweeneyMay 27th, 2025
Featuring:
1) Steve Chiavarone, Senior Portfolio Manager at Federated Hermes, talks about why he remains constructive on the US economy and the potential for a cyclical recovery in the US. The dollar bounced back, and equity-index futures for the S&P 500 and Nasdaq 100 jumped more than 1%, as President Donald Trump extended a deadline on implementing aggressive Euro-area tariffs.
2) Nicholas Burns, former US ambassador to China, joins for an extended discussion on US-China relations and where they stand in a second Trump administration. The plans for a new version of China's "Made in China 2025" campaign indicate that China will largely stick to its strategy of prioritizing manufacturing, despite criticism from the US and Europe, and will focus on developing core technologies such as semiconductors and new energy materials.
3) Jane Foley, Head of FX Strategy at RaboBank, talks about dollar weakness and the yen carry trade amid noise coming out of the Japanese bond market. Tong-term government bonds yields in Europe and Asia also fell, while the yen and other currencies declined, as investors reacted to the news from Japan. Japan’s 20-year bond yield slid as much as 21 basis points after Bloomberg News reported the nation’s finance ministry asked market participants for their views on the appropriate amount of government debt issuance.
4) Henrietta Treyz, co-founder at Veda Partners, joins to discuss the trade deals likely not to materialize for President Trump's administration, and what types of tariff rates the US could expect this summer
5) Lisa Mateo joins with the latest headlines in newspapers across the US, including a Business Insider story on bringing plus-ones on work trips and a WSJ story on the skyrocketing cost of a Hamptons girls weekend trip.
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg
Surveillance Podcast. Catch us live weekdays at seven am Eastern
on Apple CarPlay or Android Auto with the Bloomberg Business App.
Listen on demand wherever you get your podcasts, or watch
(00:25):
us live on YouTube.
Speaker 2 (00:27):
We start strong with Frankly Folks. The most important interview
of the day. Acid allocators are Diamond does and every
firm's got ten twenty thirty people loving. They want to
get out there and allocate your assets. Steve chiveron is
it federated federate inter medicine? He does it with a
shocking clarity and directness. Are we over diversified right now?
(00:50):
O wise?
Speaker 3 (00:51):
One depends on where you're investing. I think in the US,
I think investors are about right. I think being overweight
the US. I think that home bio is actually appropriate
right now. And I think the non US equity outperformance
of the first half will prove to be relatively short lived.
Speaker 2 (01:09):
I was in you say the worst is behind US.
Speaker 3 (01:12):
Worst of the tariffun certainty. Yeah, I agree, I think
it is, and I think you're in a de escalation
phase there. I wasn't surprised by the presidents kind of
slapping around of Europe on Friday. There was a little
bit of complacency I think, both amongst the negotiating parties
and the market that you know, once he had de escalated,
that was it and you could kind of slow walk it.
(01:32):
So he needed to kind of shock the system a
little bit. I also wasn't surprised when that had its
intended effect and he pushed back out to July. But
Tom talking to investors outside the United States, they were
shockingly under allocated to the US. You know, you have
folks on the mainland with maybe only twenty percent in
US equities, which is sixty percent, seventy percent of the
(01:56):
global market cap of the kind of MSCI world or
MSCA country world. And so I think there's still buyers
to come into this market. And I think the most
likely outcome here is a slow Sole crushing grind higher
in US equities that will pull the skeptics in over
the course of the year.
Speaker 2 (02:13):
Sol Crushing Grind that was on Everston Lincoln Palmer's third album,
Crazy Crushing.
Speaker 4 (02:20):
There's a reserve going to do here, given some of
the economic data we're seeing here and some of the
I guess some of the uncertainty that from the tariff discussions.
Speaker 3 (02:29):
You know, look, I find some of the rhetoric uncertainty
out of the Federal Reserve a little surprising. I get
wanting to be patient. I think that's right. I think
if you think thoughtfully about any impact of tariffs, the
impacts are much more severe on growth than they are inflation.
And I think you have an economy that has slowed
in a consumer that's under some pressure. So I hear
(02:52):
them talk about patients, I think they're going to cut
this year. They just don't know it yet.
Speaker 2 (02:56):
You have an advantage of adults, it federated. Are people
old and grizzled? I mean, you're doing asset allocation and
that and your clear memo is by American, by technology.
Is that what your portfolio managers are doing.
Speaker 3 (03:09):
That's what we did this cycle. I mean, you know,
we said at the beginning of the year I was
on this show that we were strapping ourselves to the mast.
We weren't going to get caught in the emotional you know, turmoil,
and that we wanted to add to equities through the distress.
And we did and where we added Tom was in
large cap growth. You got the mag seven and the
(03:30):
large cap Growth index somewhere around six multiple points below
it's three year average. You don't pass on a six
multiple point discount with companies that are generating the kind
of cash flow and growth that those companies are. And
so that was the buy this time around. I'll tell
you I still think and I know it's been waiting
for goodou, but I think the second half story is
(03:51):
going to be ones where small caps and cyclicals assert
themselves as well.
Speaker 4 (03:56):
So what do we we had the U that downgraded,
I mean, does that kind of call into any question
recession risk here? I mean? Or we're just kind of
a slowing economy grind higher.
Speaker 3 (04:09):
As goes the US consumer goes the US economy, and
as goes the US labor market goes the US consumer.
Speaker 5 (04:17):
You know.
Speaker 3 (04:17):
And here's the thing, and here's why I don't buy
into the kind of recession views. Companies had a wonderful
excuse if they wanted it to lay off workers last month.
They had terriff uncertainty, they had growth slowed downs, They
could have slashed their guidance.
Speaker 2 (04:32):
They didn't.
Speaker 3 (04:33):
They pulled it in some cases, and they didn't take it.
And I think this is the lesson of twenty twenty
when folks, you know, companies fired folks and then it
took them three years and thirty percent more to hire
them back. And so unless you see that labor market break,
I don't think you have recession on the table. I'd
also say Paul, that you know there's this there's this
(04:53):
wonderful romanticism around the bond vigilantes, and that's what's pushing
yields up. But that doesn't explain German bunniel. That doesn't
explain Japanese government bond yields. And if that really is
a story of three separate bond market issues, would you
rather buy the bond when they're raising debt to buy bullets,
or would you rather buy the US treasury where they're
(05:15):
raising debt to stimulate.
Speaker 2 (05:16):
I don't care. The reason we hedge in is I
want you to talk about it is a new way.
I did this the other day at a fabulous meeting
with your good competitor PIMCO, and we talked about all
these new derivative instruments. Federated and your good competitor, PIMCOH
Fidelity and others are incredibly vanilla you avoid the derivative plague.
(05:38):
Right now, we got lots of buy right strategies. Everybody's
got a buffer thing going in that tell me about
asset allocation and the solution being all these gimmicky investments.
Speaker 5 (05:50):
Yeah.
Speaker 3 (05:51):
Look, I think for very specific client needs, whether it's
enhancing income or you've got real risk aversion, you know,
derivatives can play a role over the long run in
terms of building sustainable, quiet wealth, if you will. The
story is about staying invested. I mean everything around that
(06:11):
is just behavioral. It's about staying invested. So the question
is how do you understand the client, how do you
understand what their what their risk tolerance is, and then
build them a long term asset allocation and then be
tactical enough tom that you don't whips all your way
out of returns, but you provide the client with enough
(06:31):
comfort to say, Okay, we're not just sitting here blindly.
Because at the end of the day, the story is
really simple. Just because it's difficult doesn't mean that it's complicated.
Investing is difficult because it's hard to stay invested, it's
hard to stay unemotional, but it's not nearly as complicated
as we make it out to be. That's just us
making ourselves feel better that it's hard.
Speaker 2 (06:49):
See how he gets he just ramps it up there.
Sure he gets a totally mental engage like stand up.
That was brilliant. I think we're going to use that
on single best idea to Steve shiveron Thank you so
much with feeder airms. What you just heard there, folks, Karanzi.
Speaker 1 (07:04):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Applecarplay.
Speaker 6 (07:11):
And Android Auto with the Bloomberg Business app.
Speaker 1 (07:13):
You can also listen live on Amazon Alexa from our
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Speaker 2 (07:21):
He is definitive as a public service of the nation.
Nicholas Burns joins us now with this work across our
State Department, our diplomacy for decades, culminating and extended to
her duty as ambassador to China. We welcome Nick Burns
of Wellesley, Massachusetts this morning.
Speaker 5 (07:39):
Nick.
Speaker 2 (07:39):
What I loved great about your eight day work week
in China was there you would be working doing the
diplomatic thing in Beijing, and then you get on the
train here's a caption. Folks, most people in China. Folks
like me, we go to Hong Kong, Shanghai, to blocks
of Beijing, and we say we went to China. Nick
(08:00):
Burns has done further. We crossed the Yellow River at
Hanan at one hundred and ninety one miles an hour
on the high speed train. What do we most get wrong,
Nick Burns, about the inner China that you experienced, Well.
Speaker 7 (08:17):
Good morning, Tom, and it's great pleasure to be with
you after a long, long stretch. You know, China is
a multifacet society. On the one hand, you have the
Communist Party of China, major competitor of the United States
and military, tech, economic, human rights ground. So I had
a you know, kind of a combative relationship at times
(08:37):
with that government, and we had to be aggressive in
holding the line. On the other hand, the other job
of being an ambassador is not just to the government
of China, to the to the one point four billion
people of China. And I found the Chinese people outside
the Communist Party to be extraordinarily entrepreneurial, to be very
(08:58):
very hard working, creative, innovative, and very civil when you
met them. My wife, Liby and I didn't encounter any
direct anti americanism when you're talking to the Chinese people.
I encountered a lot of it when I work with
the government of China, and so we decided that, you know,
we had to travel in China to get to know
party secretaries, governors, business leaders, universities, and we went most
(09:23):
often by high speed rail because they have a magnificent
trains and that's how you get to know people on
the train and see the countryside and get to understand
the country.
Speaker 2 (09:34):
Do we have a knowledge behind those red doors in Beijing?
Is it like when we were with the Russians before
the collapse where our intelligence was lacking. Is there's a
mystery to ji in the government or do we actually
have a handle on what's going on? Well, I'd say
two things.
Speaker 7 (09:51):
First, you know, we had daily contact with the government
of China, and you I spend a lot of time
with a Chinese leadership, with ministers, for instance, and so
you do get to know them. But the party, the
Communist Party, which is so powerful right now, is very
good at being opaque and Chinese politicians, political leaders do
(10:11):
not reveal the private side of them of their lives
as they do in the United States and most.
Speaker 2 (10:16):
Of the rest of the world.
Speaker 7 (10:17):
So there is a lack of transparency there and sometimes
it's a guessing game. But we did our best, obviously
and working with them to get a sense of what
their motivations were. You know, we were as I said before,
I figured about eighty percent of my job was competing
with China on behalf of the United States, and maybe
twenty percent was working on climate change and working on fentanyl,
(10:41):
which is a critical issue for US and on the
cooperative side. And so this is not an easy relationship
for the United States.
Speaker 4 (10:50):
Nicholas, how do you think that the Chinese government wants
to proceed with the US? Do they want to engage
with the West or are they comfortable? And what's kind
of becoming I guess a new Cold war, certainly technological
Cold war between China and the West. How do they
want to approach it?
Speaker 7 (11:08):
That's such a fascinating subject. On the one hand, given
the fact that China has the world's largest export economy
and manufacturing economy, they have to have ties with the
United States, Japan, Korea, and Europe because that's the market
for their economy and that keeps their GDP growth rate up,
So there is a sense a part of China inc.
(11:28):
Which wants to be integrated with the rest of the world.
But you're right. I mean what has emerged over the
last several years is a very close strategic partnership between
China and Russia and at times when they're on in
North Korea as well, and that's a formidable set of countries.
What they're trying to do, which Chijinping is trying to do,
is offset the real strength of the United States in
(11:51):
global competition, and that is that we have alliances in
the East Asia with Japan, South Korea, the Philippines, Thailand,
in Australia. These are treaty alliances and that gives us
a weight and leverage over the Chinese that they don't have,
and so they've tried to offset it with these other relationships.
But Russia and North Korea and Iran are not the
(12:13):
economic powers that Japan. Certainly is that India is as
a partner of the United States. So I think that's
our big advantage. Maybe that's the number one lesson that
I learned or relearned as ambassador to China. I'd also
been ambassador to NATO that we have to count on
our allies, and we have to be respectful of our
allies and build those relationships. That's the best way I
(12:37):
think to deter the Chinese.
Speaker 4 (12:38):
Well, that does not perhaps is the view of the
Trump administration in terms of how the Trump administration is
treating US allies. Here does President she in the Chinese
government view that is potentially an opening to weaken the US,
I guess influence globally.
Speaker 7 (12:57):
I think they do. You'll remember after April second, when
the President made his President Trump made his major tariff announcements,
the Chinese were very quick to say, to the Japanese
and South Koreans in particular, let's all get together the
three of US, China, South Korea, and Japan against the
United States. Of course, Japan and South Korea would not
have it, but they're seeking. The Chinese are seeking those openings.
(13:21):
And as the United States in a way diminishes our
faith in our alliances, the Chinese see that's a real
vulnerability for the United States. As we demolished USAID, the
US Agency for International Development, I think was a major
mistake to fire eight thousand people in two weeks. That
(13:41):
doesn't make much sense. The Chinese swooped in and began
to tell countries South, listen, if the United States is
not going to work with you or help you, we will.
And so we're in a battle for global influence against China,
there's no question, and we need a usaid, We need
our alliances to be compared in that battle.
Speaker 2 (14:00):
We continue with Nicholas Burne's ambassador to China here up
until the recent months, with all of his work in
American diplomacy as well. We all await a book. I'm
sure it's coming out here in two or three years,
and we can find a free time to do it,
Nick Burns, just as simple as I can. As you
mentioned allies earlier, is Vietnam our ally?
Speaker 7 (14:25):
I think Vietnam not in the strict sense of the word.
When I use the word ally as a diplomat, it's
a treaty ally, a military ally like the NATO countries
or Japan. Vietnam's a partner, and it's a country that
the years China has had to live next door to
China for all of its history, has a difficult, complicated
relationship with China. So Vietnam wants to be our military partner,
(14:47):
but at the same time, like all the other countries
of Southeast Asia, China's their lead trade partner. They have
to live with China, and so the Vietnamese are engaged
like the Malaysians and the Singaporeans and the end it's
kind of a balancing act between the United States and China.
Speaker 2 (15:04):
So how will this play out in the you know,
you can call it non multilateral, pseudo bilateral, unilateral Trump
approach to McKinley trade history, I mean, I mean, I
don't understand how we battle the natural leakages of a
bilateral agreement. As trade goes to Vietnam, trade goes to Malaysia,
(15:28):
trade goes to Mexico for that matter, that's a given right.
Speaker 7 (15:32):
Well, you know, I think there's a little bit of
a contradiction I would say in President Trump's policy. On
the one hand, President Trump is right to use tariffs
as a way to try to push the Chinese to
be more fair minded in the way they treat American
companies because they mistreat American companies. The Chinese and President
(15:52):
Biden put major tariffs on one hundred percent on Chinese
evs for instance, on China just a year ago. But
the problem is when President Trump went out and put
those one hundred and forty five percent tariffs on China.
He also put tariffs on Japan, South Korea, European Union, Canada,
and Mexico. Those are our natural allies. They all have
the same problems with China as we do on trade.
(16:15):
I think it would have been a better strategy to
we have really forced on China and had some and
coalesced with the Japanese, South Koreans and Europeans. It would
have given us more weight at the negotiating table with
the Jenese.
Speaker 2 (16:29):
Nick Burns, I've got to ask you about my essay
of the year three years ago. You were off in
some train somewhere having a long weekend with the panda's
outside check do Kai. I'm not going to butcher the
pronunciation Nick Kaiji c Ai xia acclaim Chinese dissident wrote
for Foreign Affairs magazine and essay the weakness of Jijingping.
(16:51):
I was thunderstruck Nick Burns by that essay and the
idea of almost the thugism, the simplicity of the Chinese
government are they what's the process you witnessed as ambassador
of the parochialism of the Xi regime.
Speaker 7 (17:11):
Well, I remember that essay as well, and I was
impressed by it. I would say this, Dung Chow Ping's
great insight after Miles's death half century ago was that
China could not afford one man rule. Mao nearly ruined
China with the Culture Revolution, and so Dung practice collective leadership.
Speaker 2 (17:30):
That's all gone.
Speaker 7 (17:31):
Now China's back to one man rule, and the one
man is Shixin Ping. And on the one hand, he's experienced,
he's obviously very smart, he's very ambitious, he's very strategicly
directed in terms of Chinese power. But on the other hand,
he surrounded himself with people who have worked for him
in the past. There are no peers around him. No
(17:52):
one's perfect, and so you see Shixin Ping making some
considerable mistakes. I'll just cite one. He went after the
Chinese tech intre in twenty twenty one twenty twenty three,
so that a lot of the tech entrepreneurs who made
China wealthy, like Jack ma of Alibama, were banished from
the country. Jack mad lives in Tokyo. So you see
(18:13):
the weaknesses and some of these strategic eras because you
don't have people around him to say you know, that
might not be the best thing to do to question him.
And I think, you know, as I've participated in our
own government, we're always better when you have people around
the American president who can say, you know, mister President,
I know you want to go down that road roade A,
(18:34):
but road B is going to be the easier place
root for you. That doesn't happen in China nowadays, and
you know, it's kind of a closed leadership. He does
travel a lot, but he's never lived overseas, he's never
been in business, so you see some of the limitations
in Chinese decision making.
Speaker 4 (18:51):
So where does a Commnis party under Ji go from here?
I mean, he's been in office for as long as
many people can remember. What's the consensus about how the
leadership in China plays out? How much longer does he
stay in power? Does he enjoy the support of the people,
what's next?
Speaker 7 (19:07):
Well, you know again, Dung Chaoping's practice was that general
Secretary is of the Commonist Party, the President of China
would stay in office for no more than two five
year terms, so ten years. And that was the case
for forty years, and Chichin Ping is now well beyond that.
My own impression is that he's probably president for life.
(19:28):
He's a Since I'm sixty nine, I can say he's
a relatively young man at seventy one. But still, you know,
when people get close to eighty, you know all bets
are off in terms of health, and so you got
to worry about well, you have to actually be concerned
about stability when your leader gets older. And there's no
(19:50):
root of secession, there's no transfer power prescribed in Chinese law.
They're going to have to make up happens when xin
Ping leaves power and how he leaves power.
Speaker 2 (20:00):
Nicholas burns with us an extended conversation. We continue with
him for a little bit more. Heir Paul swinging in
time keen across the nation. Good morning, as we speak
to our former ambassador of China. How he did his
first diplomacy at the Duck Pond in Wellesley, Massachusetts a
few years ago. What was your first day like, newly minted,
(20:20):
four languages, fancy degrees and there you were You were
not wearing bermuda shorts and socks in Mauritania, were you?
What was your first day like in Mauritania?
Speaker 7 (20:32):
Well, referring to my first job overseas for the US
government nineteen eighty forty five years ago in the Sahara Desert.
I was an intern, hoping to then take the oath
of office and become a full fledged diplomat. And so
they sent me to this tiny outpost, New Walkshot, Mauritania,
where we had a two person embassy, and I was
the second person, you know, doing all the different jobs.
(20:56):
And it was fascinating. I mean, I must say I
had wanted to go in the US government in college
and grad school. And when you finally get in and
you stand beside the American flag and you're there helping
to preside over July fourth celebrations, there's an immense pride
in serving our government. And I hope that you know,
(21:17):
with all the attack federal government by Elon Musk and others,
I hope people listening to us will know that the civils,
the foreign service officers, the military officers, we all take
an oath to the Constitution.
Speaker 2 (21:29):
So what do you need? Nick Burns from Marco Rubio,
here's a guy. Everybody adores him. He's one of the
few people in Washington. It's not worth a gazillion dollars.
Marco Ruby of Florida, he's serving in the crucible of
the emotions of President Trump hour by hour. What is
your counsel to, Marco Rubio for those kids starting out
(21:50):
in the most coveted job in America.
Speaker 7 (21:53):
That you can believe that young people who join and
middle aged people the federal government are non partisan, take
an oath to be nonpartisan. It's actually a law, the
Hatch Act of nineteen fifty two. And I served across
I served Republican presidents and Democratic presidents. I never asked
any of my colleagues, hey, what party do you belong to,
because it would have been really inappropriate to that. And
(22:16):
what bothers me about the mass firing of our civil
servants in Washington is that there's somehow this suspicion that
they're all Democrats and progressives, which is absolutely not the case.
People just want to serve the country. So I do think,
respectfully sectary Rubio and President Trump, they've really weakened the
(22:37):
ability of the United States to put good people in
the field on the military side, on the million side.
Speaker 2 (22:42):
Paul, get one more question in here, but I forgot
to tell you Paul Burns's people said, we can't ask
about the red sox.
Speaker 7 (22:49):
No, we don't.
Speaker 4 (22:52):
Ask so Nick, just real quickly here, what's the view
of the people you talk to outside of the US government,
in foreign governments, what's their view of the US these days?
Speaker 7 (23:01):
Well, I think, you know, there's a sense that the
United States is withdrawing from I would say, what made
us create our alliances. So people in NATO are really
worried that the United States is no longer going to be.
Speaker 2 (23:14):
The leader of NATO.
Speaker 7 (23:15):
The Ukrainians are worried that We're going to leave them
high and dry to face the Russian War a machine.
The Japanese and Filipinos are wondering will the United States
be there if China continues to press against their borders.
And so I think the United States has become kind
of a risk our government. It's the unpredictability of our government.
(23:38):
The seesaw back and forth in terms of what the
leader says, our leader says, and that worries me. I
you know, listen, I'm going to patriotic American. I want
President Trump to succeed in the world. I want his
government to succeed in the world. Who wouldn't if you're
an American citizen, but I think there's a disquiet and
uncertainty about sometimes the direction that our government is heading,
(23:59):
in part the other terrorf issue.
Speaker 2 (24:01):
Nick Burns, thank you so much generous time with us
this morning. Investor Burns, of course to China and the
Mauritania a few years ago.
Speaker 1 (24:16):
You're listening to the Bloomberg Surveillance podcast. Catch us live
weekday afternoons from seven to ten am.
Speaker 6 (24:21):
He's durn Listen on Applecarplay and Android Otto with the
Bloomberg Business app, or watch us live on YouTube.
Speaker 2 (24:28):
Paul and I both agreed we desperately need to talk
to Jane Foley. She's at Rabobank. Absolutely definitive and cross
currents of the foreign exchange market. Jane is a weaker
dollar vector in place.
Speaker 5 (24:42):
Well it would appear to be so. I mean, you know,
it is going to be difficult for the Fed because
the weekid dollar is a course inflationary. But what we
appear still to have is an awful lot of investors
really really evaluating those dollar trades, those po pro dollar
trades really of the last few years when everyone was
very much of the with buy America. Right now, it
(25:02):
seems that the theme for this year and it's still ongoing,
is that people are reevaluating options elsewhere, whether or not
that be defense in Europe or you know, Japan, and
with the Japanese JGB market perhaps a little bit topsy
turvy at the moment, but certainly Japanese assets have been
you know, on the radar again of investors this year.
And I think the weaker dollar is just a mimicking
(25:23):
of this commentary that we've been hearing, you know, quite
a lot that you know, buy America. The story of
the past few years has been really reevaluated.
Speaker 2 (25:33):
Okay, Jimi and s sorry, taught me how to do this.
I brought up Taiwan dollar, a boy, Korean Wan and
sing dollar. I'm sorry, Jane. Those charts are elegant strong,
Singapore strong, Taiwan strong. Career. What are the ramifications if
they break break through to new currency strength versus the dollar.
Speaker 5 (25:57):
Well, they don't necessarily want that, you know, this is
that be of significant mover and executic pressure, you know,
on their economies if that were the case. But certainly
that's been an idea which has been very much caught
up in you know, speculator's minds over the last few weeks.
Clearly we do need to see some of the progress
made on trade deals between the US and a variety
(26:18):
of other countries for this type of speculation, you know,
to be put to better at least to have, you know,
a little bit better of an anchor. So that's what
we need to see. There's been a lot of speculation
as to whether or not currencies are would form part
of these trade deals, whether or not the weeker dollar
that Trump has been talking about in previous years is
(26:41):
going to be part of that, And that's what the
market is is sort of a little bit frightened about.
But certainly, you know, I would have thought that if
Trump wanted a week a dollar to make American experts cheaper,
which has been part of his manager you know, for
a long time, he would want that under his control.
And and I think what we've seen recently this year
(27:02):
is not a dollar weakening because you know, Trump wants
it to weaken. It's been a dollar weekening because market
investors have been reevaluating the value that they're now seeing
in US assets as opposed to assets elsewhere. And that's
not necessarily what the treasure you want.
Speaker 2 (27:17):
Well, I'm not going to sing dollar. This from the
second week of April, it's been a five percent strengthening
of Singapore dollar. It's a wicked elegant chart. I went
to logs for Jane Foley. You know, that's the way
we roll, and it's our two standard deviations strength here
the trend is in place. Weaker US dollar.
Speaker 4 (27:36):
Week or US dollar see that in a Bloomberg Dollar
index are still plumbing some lows here, Jane. A lot
of Americans are getting ready to come over to Europe
for summer holiday. Here, they're not like in the euro
here at one thirteen. How high can a euro go here?
Speaker 5 (27:52):
Well, you know that of course is a big question.
If we go back a month or so. There were
some views out there thinking, oh, you know, your a
dollar is a course you know for one twenty this year.
I still think that one twenty is a fair way off.
I mean, we've got to consider this from the ECB's
perspective too, or from the Eurozone perspective. I mean, think
about Germany. Yes, there was that loosening of the debt
(28:13):
breaker a couple of months ago. Yes, you know that
really has reinvigorated investor interest and you know, defense, infrastructure etc.
In the outlook for German growth in the coming years.
But you know, the bundesbankers warn that Germany you could
still see recession this year. Most big forecasters think that
that boost to German growth won't start until next year.
(28:35):
And we've still got the headwinds possibly of trade wars
coming through as well. So if Germany sees recession this year,
well you know these heb definitely you don't want to
see a Euro strengthening significantly. And I think if we
did see the Euro, you know, ratcheting up at a
pace from these sorts of levels, we could see a
more duvish ECB to try and counter some of that move.
(28:57):
So yes, we might see one twenty. I don't think
going to see it this year. Would we see it
by the end of next year, well, certainly, colk, But
that would, of course, we depend on how that growth
engine starts to work in Germany and the rest of
Europe too.
Speaker 4 (29:11):
Boy, I got a lot of pounds sterling coins and
script scrolling all away. You know, all all my jewors
here too. It's up Tom, like eleven point four percent.
Speaker 2 (29:21):
Is this is the folks, This is why you watch surveillance.
Michael bar Lisa Matteo Paul. While you were yapping with Jane,
I did what Jane does every day. I looked at
an air mess tie. I go over to Paris. Yep,
take United fifty seven, go over to Paris. And that
bow tie right now is two hundred and forty euros.
(29:43):
If it's one point fifteen, if it's one point one
point five, it's two hundred and seventy six dollars. And
if it goes to one point two zero, Jane Foley
knows it goes to two hundred and eighty eight dollars.
That's real. I mean that is real money. That is
twelve dollars increase because of Macron. There's no other way
to put it. And get one more in here to
(30:04):
Jane Fowley while I prep the tire, I'm not going
to buy.
Speaker 4 (30:07):
Yeah, I do not think so. So talk to us
about the pound sterling, Jane, what's the story there?
Speaker 5 (30:14):
Well, of course, we did see that stronger than expected
CPI inflation data last week two, and we saw retail
sales managing to a bit a bit be hit my
robust too than the market had expected. And of course,
if we go back a couple of weeks before that
we had the GDP data for the first quarter coming
in a little bit more robust, and of course there's
(30:34):
been the news that the UK did manage to sign
a trade deal with the US and also in the
same week with one in India as well, So there
has been a fair amount of better than expected news
for the UK. I think that has given Sterling a
little bit of a fillip and we see that and
setting in in cable, you know, above the recent range,
and so Sterling's had some decent news. Now that's not
(30:57):
to say that we are not going to have those headwinds.
We know that growth this year and it's still going
to be difficult in June. We've got the Chancellor again.
She has to do a spending review in June.
Speaker 8 (31:09):
That's going to be.
Speaker 5 (31:09):
Tough because UK dad is so high. So it's not
all plain sailing, but Sterling certainly has seen some benefit recently.
Speaker 2 (31:17):
Have you recovered from Tottenham winning the Europa Jane? I
mean it was too much.
Speaker 5 (31:23):
Well we had the Crystal Palace winning a big match.
Did you see that it's my local team. Well that's
just a road from me, so that was pretty good.
Speaker 2 (31:31):
Have you watched ted Lasso or they filmed the TV
show at Crystal Palace.
Speaker 5 (31:38):
I didn't see that though, so much to watch for me.
Speaker 2 (31:40):
You have to watch ted Lasso. You'll love it. They
filmed in Crystal Palace. They're you know, I mean Crystal
Palace one on What's Next? World's going to a mess?
Jane Fowley, thank you so much, greatly appreciate.
Speaker 1 (31:53):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern.
Speaker 6 (31:58):
On Apple Corplay and with the Bloomberg Business App.
Speaker 1 (32:02):
You can also listen live on Amazon Alexa from our
flagship New York station, Just say Alexa play Bloomberg eleven thirty.
Speaker 2 (32:10):
Huge response from the Hendry out of Trace is on
let's bring it in with Veda partners here on the
madness in Washington between the left, the right, the center,
and four other flavors. So well, Henrietta, quickly here. You
were on a number of times ago and you said
sixty three congressional seats are in play. Do you stand
by that or is it a different number?
Speaker 8 (32:30):
If I'm not mistaken, it's actually sixty nine. That's based
off of the Florida First and Florida.
Speaker 9 (32:37):
Six special elections that happened two months ago or so,
and it puts at risk basically any district that's our
plus five orient Jeffrey's view R plus ten or more.
Speaker 2 (32:51):
Very cool. Let's move on just as the new slow
is extraordinary. I think America, including Tom Keane, is ignorant
about the nuances of the GOP Senate. We love to
parse the House. We know that story. How divided is
the Senate for the senator from the Dakotas, This is.
Speaker 8 (33:11):
An interesting question.
Speaker 9 (33:12):
Kevin Kramer, who I assume we're talking about, or he
could be speaking about later. Thune is different in that
there are members who are actively benefiting from things like
the Inflation Reduction Act, from the clean energy subsidies that
came from a purely Democrat only past bill, who are
extraordinarily opposed to the president's tariffs but are unwilling to
rain him in.
Speaker 8 (33:33):
And the Senators from the Dakota's represent that faction.
Speaker 9 (33:36):
So they are out there, you know, going to Canada
trying to pass legislation to almost provide something that the
Republican Party can talk about that is not related to
the tariffs and not related to the President's maybe more
social items on his agenda, and that's really what they're
representing right now. When you say Dakota's that's who I
think of.
Speaker 4 (33:55):
How about just in tariffs in general, Henriette, we have again,
once again, we're seeing this playbook play out time and
time again, announced big tariffs, big headlines, and never more
them back as it relates to Europeers, what's the how
do you think this whole tariff thing is going to
play out? Because it has been the number one item
on the President's agenda since.
Speaker 8 (34:15):
They won, since the nineteen eighties.
Speaker 9 (34:19):
My view is that Liberation two point zero is coming.
Liberation Day two point zero is fast approaching, and it
doesn't have to just be July ninth.
Speaker 8 (34:28):
Think about what is coming down the pipe.
Speaker 9 (34:30):
Number one, we have sectoral tariffs across pharmaceuticals and semiconductors.
Speaker 8 (34:34):
The comment period is over. Those tariffs could hit at
any moment.
Speaker 9 (34:38):
The pharmaceutical sector and the European Union are heavily concerned
about those tariffs hitting in the next two to three weeks,
if not before.
Speaker 8 (34:45):
Those would come in.
Speaker 9 (34:46):
If history is president at twenty five percent rates, that's
what the president has tariffed.
Speaker 8 (34:51):
Aluminum, steel automobiles and everything else on with the national
security tariffs.
Speaker 9 (34:55):
So those are pending, and there are a litany of
those that will come for the remainder of the summer
to the rest of this year across lumber, copper, trucking,
air jets, cargo, et cetera. Then we have July ninth,
and what's happening already is that even nations that we
are close to or should have trade deals with, as
(35:16):
suggested by Secretaries Bessett and Lutnik, are nowhere near completion. Indeed,
South Korea, the one that I anticipated or I understood
Lutnik and Bessett. We're talking about weeks ago when they
started saying trade deals could be announced, you know, just
a week after Liberation Day, are nowhere near completed. They
have an election on June third, and they're saying they
need a delay beyond July ninth. The same is true
(35:38):
for Japan, who doesn't even have a date for their
election yet. So when I think about what's coming down
the pike for investors, it's more tires, both sectoral and
a hike specifically with the EU above their current ten
percent rate, I think the President's itching to get to
twenty at least, if not higher, as evidenced by his
forty eight hours of considering fifty percent.
Speaker 4 (35:59):
How does all this CAFF talk, How is it playing
out politically? Is there any feedback, any polling that people care?
Are they concerned that the fundation is going to hit?
Speaker 2 (36:07):
Let me stop and say, this is the question of
the more than's the key questions.
Speaker 8 (36:13):
I'm so glad you ask.
Speaker 9 (36:14):
You know, we cover all kinds of macroeconomic policy items,
and we can talk about wonky stuff like current policy
baseline or carried interest, tax rates. The American public understands tariffs.
What's shocking to me is to go and you know,
go to my local grocery store. See the front page
news and the side advert is for buy your appliances
now before the tarifs hit, buy them now before President
(36:37):
Trump implements Liberation Day tarifs.
Speaker 8 (36:39):
I mean those are front page news items in states
like Louisiana. The American public knows what taris are.
Speaker 9 (36:45):
They know for sure that they are now tax cut,
and they know that they're coming.
Speaker 2 (36:49):
The history of this with McKinley taking it back to
someone that the president worships, Henry, it to Troy's McKinley
quarters or years after his heavy tariffs repealed them. Do
we even get to heavy tariffs or do you just
assume Hill verbally retrench retreat at some point like too.
Speaker 8 (37:12):
I feel really startling that we need to stop.
Speaker 9 (37:15):
I know I just did it, but like we need
to concentrate on the fact that these tariffs are on.
Y'all have some great reporting and charts in the Bloomberg
terminal today about exactly how much money is coming into
customs and border patrol just now for this month. It
is just starting to hit. Those prices will be passed
on to consumers, whether that's at Costco or Walmart. And
as I mentioned, the American public, Republicans, Democrats, and independents
(37:36):
have a very negative view of these tariffs. They don't
like when you know, Peter Tomorrow comes out and says
these are tax cuts.
Speaker 8 (37:43):
We know that they're not. We know that inflation is real,
and now it's because of the tariffs.
Speaker 2 (37:48):
I got to do this morning. Henry Ritta, thank you
so much. I just can't say enough about it. We're
Kenny of the Trey's there and the key item there
at the beginning, she's taken out from sixty three to
sixty nine seats in play as we go to the
mid terms of two thousand twenty six.
Speaker 1 (38:08):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on applecar.
Speaker 6 (38:15):
Play and Android Auto with the Bloomberg Business app.
Speaker 1 (38:17):
You can also watch us live every weekday on YouTube
and always on the Bloomberg terminal.
Speaker 2 (38:23):
He's the newspapers with Lisa Motev. She and I are
doing battling prime stories. Her stories are uglier than mine.
Speaker 10 (38:30):
It's a stressful time, let me tell you, especially for
the girls. Okay, so we have this trend right wealthy
people buying sports teams. Well, that could be taking a
little bit of a time out because the house builder
we've talked about is targeting tax breaks for team owners.
So what it does It includes the tech to the
tax fot. It could cut in half the tax write
off that is potentially worth hundreds of millions of dollars
(38:52):
to some team owners. This according to The New York Times,
I mean NFL, NBA, other major leaguers. They've been able
to write off like the entire value of their team's quote,
intangible assets, player contracts, media rights, sponsorships over fifteen years,
so now that could change, And what they're saying is
that maybe that could stop cooling this trend of wealthy
people wanting to buy teams because they won't get as
(39:14):
much of a tax.
Speaker 2 (39:15):
So we've heard this before, Paul, Right, yep, sure you
know this circles around Yep.
Speaker 4 (39:20):
Been there, It's been there, it's been there.
Speaker 2 (39:23):
I watched some ball this weekend, and I'm not sure
I understand the correlation of money to it, other than
there's teams that are loaded and there's teams that are not.
Speaker 4 (39:33):
Well it's I mean, they've the NFL.
Speaker 2 (39:35):
They brought private equity.
Speaker 4 (39:36):
Now invest in the NFL, so that's we're having to
ten percent of these franchises.
Speaker 2 (39:41):
So we're seeing a lot of that in the NFL.
Is there a week group like in Major League Baseball
p there are week teams, but no week franchises. The
values is so cool. It's not Chicago White Sox, you know.
Speaker 4 (39:52):
I mean, I just kind of feel like, even if
you're in a small market like Jacksonville, you know, the
value creation there is extraordinary. So we'll see, all right.
Speaker 10 (40:00):
So we go from sports, Yeah, I can okay, Okay,
business trips. Okay, you mentioned you have one coming out right, Okay,
I have one coming up next week. Tom's here.
Speaker 4 (40:11):
No, We're going to the nation's capital to the National Shores,
the Gay Lord Resort down there just outside of DC
for an event. Alex Steele and I will be there.
Speaker 2 (40:21):
Very cool. Yeah, so you pick up.
Speaker 10 (40:25):
You're that business trip right next week, I'm going to
San Francisco. Tom's staying here, yeah.
Speaker 4 (40:30):
John Tumer is going nowhere.
Speaker 2 (40:32):
So the golf So you're the one that has a
golf streams.
Speaker 5 (40:35):
Okay.
Speaker 10 (40:38):
So the question that's coming up from this story is
do you bring a plus one on your business trips?
So that's the question blended travel right, leisure is like
a big thing now business leisure. But a new study
is saying that gen z ers and millennials they're more
likely to bring a friend or spouse, and they say
(41:00):
that they won't tell their boss because they're afraid what
their boss might say. So then they have their friend
or spouse kind of dipping and ducking and hiding the boss.
Speaker 2 (41:08):
On the trap.
Speaker 10 (41:10):
But they're just talking about this whole idea, and it
brings a question like would you bring do you bring
a spouse? Or a plus one on a business trip.
Is it okay? Some companies are actually saying they encourage
it because it makes things more enjoyable and brings stress
level down.
Speaker 4 (41:25):
So yeah, I got a plus one?
Speaker 8 (41:27):
You got it?
Speaker 5 (41:27):
Okay?
Speaker 4 (41:27):
Sure, the going down to DC.
Speaker 10 (41:30):
And you're not a gen z and Rolani.
Speaker 2 (41:33):
Trend, do what I want to do.
Speaker 4 (41:34):
I'm at that point in my life when this.
Speaker 2 (41:36):
Is it's more stressful.
Speaker 10 (41:38):
You think it's more stress Yeah, because look if.
Speaker 2 (41:41):
I in London for five days and take plus one
with me, she's like plus Bond Street plus. Let's go
over to Dublin the Guinness, Let's go look at some
museum and get you know, a zillion dollars. You do,
it's definitely more stressful. That's one more.
Speaker 10 (42:00):
Okay, Big Memorial Day box office. Not sure if you
went out to the movies, but a lot of people did.
Three hundred and twenty six million dollars in North America.
That's between Lilo and Stitch and the Mission Impossible movie. Big, big, big.
The theaters needed it. This was like kind of boosts
that they wanted.
Speaker 4 (42:17):
Yeah, I mean it's I think as we get farther
and farther from the pandemic getting a little bit closer
to normalization. I'm not sure normalization is pre pandemic levels,
but it's gonna be a it's gonna be a continue
to be a big, big, important window for these movies.
Speaker 2 (42:31):
The newspapers Lisa Manteo a strong start to the week.
Speaker 1 (42:35):
This is the Bloomberg Surveillance Podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live each
weekday seven to ten am Easter and on Bloomberg dot Com,
the iHeartRadio app, tune In, and the Bloomberg Business app.
You can also watch us live every weekday on YouTube
(42:56):
and always on the Bloomberg terminal
Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg
Surveillance Podcast. Catch us live weekdays at seven am Eastern
on Apple CarPlay or Android Auto with the Bloomberg Business App.
Listen on demand wherever you get your podcasts, or watch
(00:25):
us live on YouTube.
Speaker 2 (00:27):
We start strong with Frankly Folks. The most important interview
of the day. Acid allocators are Diamond does and every
firm's got ten twenty thirty people loving. They want to
get out there and allocate your assets. Steve chiveron is
it federated federate inter medicine? He does it with a
shocking clarity and directness. Are we over diversified right now?
(00:50):
O wise?
Speaker 3 (00:51):
One depends on where you're investing. I think in the US,
I think investors are about right. I think being overweight
the US. I think that home bio is actually appropriate
right now. And I think the non US equity outperformance
of the first half will prove to be relatively short lived.
Speaker 2 (01:09):
I was in you say the worst is behind US.
Speaker 3 (01:12):
Worst of the tariffun certainty. Yeah, I agree, I think
it is, and I think you're in a de escalation
phase there. I wasn't surprised by the presidents kind of
slapping around of Europe on Friday. There was a little
bit of complacency I think, both amongst the negotiating parties
and the market that you know, once he had de escalated,
that was it and you could kind of slow walk it.
(01:32):
So he needed to kind of shock the system a
little bit. I also wasn't surprised when that had its
intended effect and he pushed back out to July. But
Tom talking to investors outside the United States, they were
shockingly under allocated to the US. You know, you have
folks on the mainland with maybe only twenty percent in
US equities, which is sixty percent, seventy percent of the
(01:56):
global market cap of the kind of MSCI world or
MSCA country world. And so I think there's still buyers
to come into this market. And I think the most
likely outcome here is a slow Sole crushing grind higher
in US equities that will pull the skeptics in over
the course of the year.
Speaker 2 (02:13):
Sol Crushing Grind that was on Everston Lincoln Palmer's third album,
Crazy Crushing.
Speaker 4 (02:20):
There's a reserve going to do here, given some of
the economic data we're seeing here and some of the
I guess some of the uncertainty that from the tariff discussions.
Speaker 3 (02:29):
You know, look, I find some of the rhetoric uncertainty
out of the Federal Reserve a little surprising. I get
wanting to be patient. I think that's right. I think
if you think thoughtfully about any impact of tariffs, the
impacts are much more severe on growth than they are inflation.
And I think you have an economy that has slowed
in a consumer that's under some pressure. So I hear
(02:52):
them talk about patients, I think they're going to cut
this year. They just don't know it yet.
Speaker 2 (02:56):
You have an advantage of adults, it federated. Are people
old and grizzled? I mean, you're doing asset allocation and
that and your clear memo is by American, by technology.
Is that what your portfolio managers are doing.
Speaker 3 (03:09):
That's what we did this cycle. I mean, you know,
we said at the beginning of the year I was
on this show that we were strapping ourselves to the mast.
We weren't going to get caught in the emotional you know, turmoil,
and that we wanted to add to equities through the distress.
And we did and where we added Tom was in
large cap growth. You got the mag seven and the
(03:30):
large cap Growth index somewhere around six multiple points below
it's three year average. You don't pass on a six
multiple point discount with companies that are generating the kind
of cash flow and growth that those companies are. And
so that was the buy this time around. I'll tell
you I still think and I know it's been waiting
for goodou, but I think the second half story is
(03:51):
going to be ones where small caps and cyclicals assert
themselves as well.
Speaker 4 (03:56):
So what do we we had the U that downgraded,
I mean, does that kind of call into any question
recession risk here? I mean? Or we're just kind of
a slowing economy grind higher.
Speaker 3 (04:09):
As goes the US consumer goes the US economy, and
as goes the US labor market goes the US consumer.
Speaker 5 (04:17):
You know.
Speaker 3 (04:17):
And here's the thing, and here's why I don't buy
into the kind of recession views. Companies had a wonderful
excuse if they wanted it to lay off workers last month.
They had terriff uncertainty, they had growth slowed downs, They
could have slashed their guidance.
Speaker 2 (04:32):
They didn't.
Speaker 3 (04:33):
They pulled it in some cases, and they didn't take it.
And I think this is the lesson of twenty twenty
when folks, you know, companies fired folks and then it
took them three years and thirty percent more to hire
them back. And so unless you see that labor market break,
I don't think you have recession on the table. I'd
also say Paul, that you know there's this there's this
(04:53):
wonderful romanticism around the bond vigilantes, and that's what's pushing
yields up. But that doesn't explain German bunniel. That doesn't
explain Japanese government bond yields. And if that really is
a story of three separate bond market issues, would you
rather buy the bond when they're raising debt to buy bullets,
or would you rather buy the US treasury where they're
(05:15):
raising debt to stimulate.
Speaker 2 (05:16):
I don't care. The reason we hedge in is I
want you to talk about it is a new way.
I did this the other day at a fabulous meeting
with your good competitor PIMCO, and we talked about all
these new derivative instruments. Federated and your good competitor, PIMCOH
Fidelity and others are incredibly vanilla you avoid the derivative plague.
(05:38):
Right now, we got lots of buy right strategies. Everybody's
got a buffer thing going in that tell me about
asset allocation and the solution being all these gimmicky investments.
Speaker 5 (05:50):
Yeah.
Speaker 3 (05:51):
Look, I think for very specific client needs, whether it's
enhancing income or you've got real risk aversion, you know,
derivatives can play a role over the long run in
terms of building sustainable, quiet wealth, if you will. The
story is about staying invested. I mean everything around that
(06:11):
is just behavioral. It's about staying invested. So the question
is how do you understand the client, how do you
understand what their what their risk tolerance is, and then
build them a long term asset allocation and then be
tactical enough tom that you don't whips all your way
out of returns, but you provide the client with enough
(06:31):
comfort to say, Okay, we're not just sitting here blindly.
Because at the end of the day, the story is
really simple. Just because it's difficult doesn't mean that it's complicated.
Investing is difficult because it's hard to stay invested, it's
hard to stay unemotional, but it's not nearly as complicated
as we make it out to be. That's just us
making ourselves feel better that it's hard.
Speaker 2 (06:49):
See how he gets he just ramps it up there.
Sure he gets a totally mental engage like stand up.
That was brilliant. I think we're going to use that
on single best idea to Steve shiveron Thank you so
much with feeder airms. What you just heard there, folks, Karanzi.
Speaker 1 (07:04):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Applecarplay.
Speaker 6 (07:11):
And Android Auto with the Bloomberg Business app.
Speaker 1 (07:13):
You can also listen live on Amazon Alexa from our
flagship New York station, Just say Alexa play Bloomberg eleven thirty.
Speaker 2 (07:21):
He is definitive as a public service of the nation.
Nicholas Burns joins us now with this work across our
State Department, our diplomacy for decades, culminating and extended to
her duty as ambassador to China. We welcome Nick Burns
of Wellesley, Massachusetts this morning.
Speaker 5 (07:39):
Nick.
Speaker 2 (07:39):
What I loved great about your eight day work week
in China was there you would be working doing the
diplomatic thing in Beijing, and then you get on the
train here's a caption. Folks, most people in China. Folks
like me, we go to Hong Kong, Shanghai, to blocks
of Beijing, and we say we went to China. Nick
(08:00):
Burns has done further. We crossed the Yellow River at
Hanan at one hundred and ninety one miles an hour
on the high speed train. What do we most get wrong,
Nick Burns, about the inner China that you experienced, Well.
Speaker 7 (08:17):
Good morning, Tom, and it's great pleasure to be with
you after a long, long stretch. You know, China is
a multifacet society. On the one hand, you have the
Communist Party of China, major competitor of the United States
and military, tech, economic, human rights ground. So I had
a you know, kind of a combative relationship at times
(08:37):
with that government, and we had to be aggressive in
holding the line. On the other hand, the other job
of being an ambassador is not just to the government
of China, to the to the one point four billion
people of China. And I found the Chinese people outside
the Communist Party to be extraordinarily entrepreneurial, to be very
(08:58):
very hard working, creative, innovative, and very civil when you
met them. My wife, Liby and I didn't encounter any
direct anti americanism when you're talking to the Chinese people.
I encountered a lot of it when I work with
the government of China, and so we decided that, you know,
we had to travel in China to get to know
party secretaries, governors, business leaders, universities, and we went most
(09:23):
often by high speed rail because they have a magnificent
trains and that's how you get to know people on
the train and see the countryside and get to understand
the country.
Speaker 2 (09:34):
Do we have a knowledge behind those red doors in Beijing?
Is it like when we were with the Russians before
the collapse where our intelligence was lacking. Is there's a
mystery to ji in the government or do we actually
have a handle on what's going on? Well, I'd say
two things.
Speaker 7 (09:51):
First, you know, we had daily contact with the government
of China, and you I spend a lot of time
with a Chinese leadership, with ministers, for instance, and so
you do get to know them. But the party, the
Communist Party, which is so powerful right now, is very
good at being opaque and Chinese politicians, political leaders do
(10:11):
not reveal the private side of them of their lives
as they do in the United States and most.
Speaker 2 (10:16):
Of the rest of the world.
Speaker 7 (10:17):
So there is a lack of transparency there and sometimes
it's a guessing game. But we did our best, obviously
and working with them to get a sense of what
their motivations were. You know, we were as I said before,
I figured about eighty percent of my job was competing
with China on behalf of the United States, and maybe
twenty percent was working on climate change and working on fentanyl,
(10:41):
which is a critical issue for US and on the
cooperative side. And so this is not an easy relationship
for the United States.
Speaker 4 (10:50):
Nicholas, how do you think that the Chinese government wants
to proceed with the US? Do they want to engage
with the West or are they comfortable? And what's kind
of becoming I guess a new Cold war, certainly technological
Cold war between China and the West. How do they
want to approach it?
Speaker 7 (11:08):
That's such a fascinating subject. On the one hand, given
the fact that China has the world's largest export economy
and manufacturing economy, they have to have ties with the
United States, Japan, Korea, and Europe because that's the market
for their economy and that keeps their GDP growth rate up,
So there is a sense a part of China inc.
(11:28):
Which wants to be integrated with the rest of the world.
But you're right. I mean what has emerged over the
last several years is a very close strategic partnership between
China and Russia and at times when they're on in
North Korea as well, and that's a formidable set of countries.
What they're trying to do, which Chijinping is trying to do,
is offset the real strength of the United States in
(11:51):
global competition, and that is that we have alliances in
the East Asia with Japan, South Korea, the Philippines, Thailand,
in Australia. These are treaty alliances and that gives us
a weight and leverage over the Chinese that they don't have,
and so they've tried to offset it with these other relationships.
But Russia and North Korea and Iran are not the
(12:13):
economic powers that Japan. Certainly is that India is as
a partner of the United States. So I think that's
our big advantage. Maybe that's the number one lesson that
I learned or relearned as ambassador to China. I'd also
been ambassador to NATO that we have to count on
our allies, and we have to be respectful of our
allies and build those relationships. That's the best way I
(12:37):
think to deter the Chinese.
Speaker 4 (12:38):
Well, that does not perhaps is the view of the
Trump administration in terms of how the Trump administration is
treating US allies. Here does President she in the Chinese
government view that is potentially an opening to weaken the US,
I guess influence globally.
Speaker 7 (12:57):
I think they do. You'll remember after April second, when
the President made his President Trump made his major tariff announcements,
the Chinese were very quick to say, to the Japanese
and South Koreans in particular, let's all get together the
three of US, China, South Korea, and Japan against the
United States. Of course, Japan and South Korea would not
have it, but they're seeking. The Chinese are seeking those openings.
(13:21):
And as the United States in a way diminishes our
faith in our alliances, the Chinese see that's a real
vulnerability for the United States. As we demolished USAID, the
US Agency for International Development, I think was a major
mistake to fire eight thousand people in two weeks. That
(13:41):
doesn't make much sense. The Chinese swooped in and began
to tell countries South, listen, if the United States is
not going to work with you or help you, we will.
And so we're in a battle for global influence against China,
there's no question, and we need a usaid, We need
our alliances to be compared in that battle.
Speaker 2 (14:00):
We continue with Nicholas Burne's ambassador to China here up
until the recent months, with all of his work in
American diplomacy as well. We all await a book. I'm
sure it's coming out here in two or three years,
and we can find a free time to do it,
Nick Burns, just as simple as I can. As you
mentioned allies earlier, is Vietnam our ally?
Speaker 7 (14:25):
I think Vietnam not in the strict sense of the word.
When I use the word ally as a diplomat, it's
a treaty ally, a military ally like the NATO countries
or Japan. Vietnam's a partner, and it's a country that
the years China has had to live next door to
China for all of its history, has a difficult, complicated
relationship with China. So Vietnam wants to be our military partner,
(14:47):
but at the same time, like all the other countries
of Southeast Asia, China's their lead trade partner. They have
to live with China, and so the Vietnamese are engaged
like the Malaysians and the Singaporeans and the end it's
kind of a balancing act between the United States and China.
Speaker 2 (15:04):
So how will this play out in the you know,
you can call it non multilateral, pseudo bilateral, unilateral Trump
approach to McKinley trade history, I mean, I mean, I
don't understand how we battle the natural leakages of a
bilateral agreement. As trade goes to Vietnam, trade goes to Malaysia,
(15:28):
trade goes to Mexico for that matter, that's a given right.
Speaker 7 (15:32):
Well, you know, I think there's a little bit of
a contradiction I would say in President Trump's policy. On
the one hand, President Trump is right to use tariffs
as a way to try to push the Chinese to
be more fair minded in the way they treat American
companies because they mistreat American companies. The Chinese and President
(15:52):
Biden put major tariffs on one hundred percent on Chinese
evs for instance, on China just a year ago. But
the problem is when President Trump went out and put
those one hundred and forty five percent tariffs on China.
He also put tariffs on Japan, South Korea, European Union, Canada,
and Mexico. Those are our natural allies. They all have
the same problems with China as we do on trade.
(16:15):
I think it would have been a better strategy to
we have really forced on China and had some and
coalesced with the Japanese, South Koreans and Europeans. It would
have given us more weight at the negotiating table with
the Jenese.
Speaker 2 (16:29):
Nick Burns, I've got to ask you about my essay
of the year three years ago. You were off in
some train somewhere having a long weekend with the panda's
outside check do Kai. I'm not going to butcher the
pronunciation Nick Kaiji c Ai xia acclaim Chinese dissident wrote
for Foreign Affairs magazine and essay the weakness of Jijingping.
(16:51):
I was thunderstruck Nick Burns by that essay and the
idea of almost the thugism, the simplicity of the Chinese
government are they what's the process you witnessed as ambassador
of the parochialism of the Xi regime.
Speaker 7 (17:11):
Well, I remember that essay as well, and I was
impressed by it. I would say this, Dung Chow Ping's
great insight after Miles's death half century ago was that
China could not afford one man rule. Mao nearly ruined
China with the Culture Revolution, and so Dung practice collective leadership.
Speaker 2 (17:30):
That's all gone.
Speaker 7 (17:31):
Now China's back to one man rule, and the one
man is Shixin Ping. And on the one hand, he's experienced,
he's obviously very smart, he's very ambitious, he's very strategicly
directed in terms of Chinese power. But on the other hand,
he surrounded himself with people who have worked for him
in the past. There are no peers around him. No
(17:52):
one's perfect, and so you see Shixin Ping making some
considerable mistakes. I'll just cite one. He went after the
Chinese tech intre in twenty twenty one twenty twenty three,
so that a lot of the tech entrepreneurs who made
China wealthy, like Jack ma of Alibama, were banished from
the country. Jack mad lives in Tokyo. So you see
(18:13):
the weaknesses and some of these strategic eras because you
don't have people around him to say you know, that
might not be the best thing to do to question him.
And I think, you know, as I've participated in our
own government, we're always better when you have people around
the American president who can say, you know, mister President,
I know you want to go down that road roade A,
(18:34):
but road B is going to be the easier place
root for you. That doesn't happen in China nowadays, and
you know, it's kind of a closed leadership. He does
travel a lot, but he's never lived overseas, he's never
been in business, so you see some of the limitations
in Chinese decision making.
Speaker 4 (18:51):
So where does a Commnis party under Ji go from here?
I mean, he's been in office for as long as
many people can remember. What's the consensus about how the
leadership in China plays out? How much longer does he
stay in power? Does he enjoy the support of the people,
what's next?
Speaker 7 (19:07):
Well, you know again, Dung Chaoping's practice was that general
Secretary is of the Commonist Party, the President of China
would stay in office for no more than two five
year terms, so ten years. And that was the case
for forty years, and Chichin Ping is now well beyond that.
My own impression is that he's probably president for life.
(19:28):
He's a Since I'm sixty nine, I can say he's
a relatively young man at seventy one. But still, you know,
when people get close to eighty, you know all bets
are off in terms of health, and so you got
to worry about well, you have to actually be concerned
about stability when your leader gets older. And there's no
(19:50):
root of secession, there's no transfer power prescribed in Chinese law.
They're going to have to make up happens when xin
Ping leaves power and how he leaves power.
Speaker 2 (20:00):
Nicholas burns with us an extended conversation. We continue with
him for a little bit more. Heir Paul swinging in
time keen across the nation. Good morning, as we speak
to our former ambassador of China. How he did his
first diplomacy at the Duck Pond in Wellesley, Massachusetts a
few years ago. What was your first day like, newly minted,
(20:20):
four languages, fancy degrees and there you were You were
not wearing bermuda shorts and socks in Mauritania, were you?
What was your first day like in Mauritania?
Speaker 7 (20:32):
Well, referring to my first job overseas for the US
government nineteen eighty forty five years ago in the Sahara Desert.
I was an intern, hoping to then take the oath
of office and become a full fledged diplomat. And so
they sent me to this tiny outpost, New Walkshot, Mauritania,
where we had a two person embassy, and I was
the second person, you know, doing all the different jobs.
(20:56):
And it was fascinating. I mean, I must say I
had wanted to go in the US government in college
and grad school. And when you finally get in and
you stand beside the American flag and you're there helping
to preside over July fourth celebrations, there's an immense pride
in serving our government. And I hope that you know,
(21:17):
with all the attack federal government by Elon Musk and others,
I hope people listening to us will know that the civils,
the foreign service officers, the military officers, we all take
an oath to the Constitution.
Speaker 2 (21:29):
So what do you need? Nick Burns from Marco Rubio,
here's a guy. Everybody adores him. He's one of the
few people in Washington. It's not worth a gazillion dollars.
Marco Ruby of Florida, he's serving in the crucible of
the emotions of President Trump hour by hour. What is
your counsel to, Marco Rubio for those kids starting out
(21:50):
in the most coveted job in America.
Speaker 7 (21:53):
That you can believe that young people who join and
middle aged people the federal government are non partisan, take
an oath to be nonpartisan. It's actually a law, the
Hatch Act of nineteen fifty two. And I served across
I served Republican presidents and Democratic presidents. I never asked
any of my colleagues, hey, what party do you belong to,
because it would have been really inappropriate to that. And
(22:16):
what bothers me about the mass firing of our civil
servants in Washington is that there's somehow this suspicion that
they're all Democrats and progressives, which is absolutely not the case.
People just want to serve the country. So I do think,
respectfully sectary Rubio and President Trump, they've really weakened the
(22:37):
ability of the United States to put good people in
the field on the military side, on the million side.
Speaker 2 (22:42):
Paul, get one more question in here, but I forgot
to tell you Paul Burns's people said, we can't ask
about the red sox.
Speaker 7 (22:49):
No, we don't.
Speaker 4 (22:52):
Ask so Nick, just real quickly here, what's the view
of the people you talk to outside of the US government,
in foreign governments, what's their view of the US these days?
Speaker 7 (23:01):
Well, I think, you know, there's a sense that the
United States is withdrawing from I would say, what made
us create our alliances. So people in NATO are really
worried that the United States is no longer going to be.
Speaker 2 (23:14):
The leader of NATO.
Speaker 7 (23:15):
The Ukrainians are worried that We're going to leave them
high and dry to face the Russian War a machine.
The Japanese and Filipinos are wondering will the United States
be there if China continues to press against their borders.
And so I think the United States has become kind
of a risk our government. It's the unpredictability of our government.
(23:38):
The seesaw back and forth in terms of what the
leader says, our leader says, and that worries me. I
you know, listen, I'm going to patriotic American. I want
President Trump to succeed in the world. I want his
government to succeed in the world. Who wouldn't if you're
an American citizen, but I think there's a disquiet and
uncertainty about sometimes the direction that our government is heading,
(23:59):
in part the other terrorf issue.
Speaker 2 (24:01):
Nick Burns, thank you so much generous time with us
this morning. Investor Burns, of course to China and the
Mauritania a few years ago.
Speaker 1 (24:16):
You're listening to the Bloomberg Surveillance podcast. Catch us live
weekday afternoons from seven to ten am.
Speaker 6 (24:21):
He's durn Listen on Applecarplay and Android Otto with the
Bloomberg Business app, or watch us live on YouTube.
Speaker 2 (24:28):
Paul and I both agreed we desperately need to talk
to Jane Foley. She's at Rabobank. Absolutely definitive and cross
currents of the foreign exchange market. Jane is a weaker
dollar vector in place.
Speaker 5 (24:42):
Well it would appear to be so. I mean, you know,
it is going to be difficult for the Fed because
the weekid dollar is a course inflationary. But what we
appear still to have is an awful lot of investors
really really evaluating those dollar trades, those po pro dollar
trades really of the last few years when everyone was
very much of the with buy America. Right now, it
(25:02):
seems that the theme for this year and it's still ongoing,
is that people are reevaluating options elsewhere, whether or not
that be defense in Europe or you know, Japan, and
with the Japanese JGB market perhaps a little bit topsy
turvy at the moment, but certainly Japanese assets have been
you know, on the radar again of investors this year.
And I think the weaker dollar is just a mimicking
(25:23):
of this commentary that we've been hearing, you know, quite
a lot that you know, buy America. The story of
the past few years has been really reevaluated.
Speaker 2 (25:33):
Okay, Jimi and s sorry, taught me how to do this.
I brought up Taiwan dollar, a boy, Korean Wan and
sing dollar. I'm sorry, Jane. Those charts are elegant strong,
Singapore strong, Taiwan strong. Career. What are the ramifications if
they break break through to new currency strength versus the dollar.
Speaker 5 (25:57):
Well, they don't necessarily want that, you know, this is
that be of significant mover and executic pressure, you know,
on their economies if that were the case. But certainly
that's been an idea which has been very much caught
up in you know, speculator's minds over the last few weeks.
Clearly we do need to see some of the progress
made on trade deals between the US and a variety
(26:18):
of other countries for this type of speculation, you know,
to be put to better at least to have, you know,
a little bit better of an anchor. So that's what
we need to see. There's been a lot of speculation
as to whether or not currencies are would form part
of these trade deals, whether or not the weeker dollar
that Trump has been talking about in previous years is
(26:41):
going to be part of that, And that's what the
market is is sort of a little bit frightened about.
But certainly, you know, I would have thought that if
Trump wanted a week a dollar to make American experts cheaper,
which has been part of his manager you know, for
a long time, he would want that under his control.
And and I think what we've seen recently this year
(27:02):
is not a dollar weakening because you know, Trump wants
it to weaken. It's been a dollar weekening because market
investors have been reevaluating the value that they're now seeing
in US assets as opposed to assets elsewhere. And that's
not necessarily what the treasure you want.
Speaker 2 (27:17):
Well, I'm not going to sing dollar. This from the
second week of April, it's been a five percent strengthening
of Singapore dollar. It's a wicked elegant chart. I went
to logs for Jane Foley. You know, that's the way
we roll, and it's our two standard deviations strength here
the trend is in place. Weaker US dollar.
Speaker 4 (27:36):
Week or US dollar see that in a Bloomberg Dollar
index are still plumbing some lows here, Jane. A lot
of Americans are getting ready to come over to Europe
for summer holiday. Here, they're not like in the euro
here at one thirteen. How high can a euro go here?
Speaker 5 (27:52):
Well, you know that of course is a big question.
If we go back a month or so. There were
some views out there thinking, oh, you know, your a
dollar is a course you know for one twenty this year.
I still think that one twenty is a fair way off.
I mean, we've got to consider this from the ECB's
perspective too, or from the Eurozone perspective. I mean, think
about Germany. Yes, there was that loosening of the debt
(28:13):
breaker a couple of months ago. Yes, you know that
really has reinvigorated investor interest and you know, defense, infrastructure etc.
In the outlook for German growth in the coming years.
But you know, the bundesbankers warn that Germany you could
still see recession this year. Most big forecasters think that
that boost to German growth won't start until next year.
(28:35):
And we've still got the headwinds possibly of trade wars
coming through as well. So if Germany sees recession this year,
well you know these heb definitely you don't want to
see a Euro strengthening significantly. And I think if we
did see the Euro, you know, ratcheting up at a
pace from these sorts of levels, we could see a
more duvish ECB to try and counter some of that move.
(28:57):
So yes, we might see one twenty. I don't think
going to see it this year. Would we see it
by the end of next year, well, certainly, colk, But
that would, of course, we depend on how that growth
engine starts to work in Germany and the rest of
Europe too.
Speaker 4 (29:11):
Boy, I got a lot of pounds sterling coins and
script scrolling all away. You know, all all my jewors
here too. It's up Tom, like eleven point four percent.
Speaker 2 (29:21):
Is this is the folks, This is why you watch surveillance.
Michael bar Lisa Matteo Paul. While you were yapping with Jane,
I did what Jane does every day. I looked at
an air mess tie. I go over to Paris. Yep,
take United fifty seven, go over to Paris. And that
bow tie right now is two hundred and forty euros.
(29:43):
If it's one point fifteen, if it's one point one
point five, it's two hundred and seventy six dollars. And
if it goes to one point two zero, Jane Foley
knows it goes to two hundred and eighty eight dollars.
That's real. I mean that is real money. That is
twelve dollars increase because of Macron. There's no other way
to put it. And get one more in here to
(30:04):
Jane Fowley while I prep the tire, I'm not going
to buy.
Speaker 4 (30:07):
Yeah, I do not think so. So talk to us
about the pound sterling, Jane, what's the story there?
Speaker 5 (30:14):
Well, of course, we did see that stronger than expected
CPI inflation data last week two, and we saw retail
sales managing to a bit a bit be hit my
robust too than the market had expected. And of course,
if we go back a couple of weeks before that
we had the GDP data for the first quarter coming
in a little bit more robust, and of course there's
(30:34):
been the news that the UK did manage to sign
a trade deal with the US and also in the
same week with one in India as well, So there
has been a fair amount of better than expected news
for the UK. I think that has given Sterling a
little bit of a fillip and we see that and
setting in in cable, you know, above the recent range,
and so Sterling's had some decent news. Now that's not
(30:57):
to say that we are not going to have those headwinds.
We know that growth this year and it's still going
to be difficult in June. We've got the Chancellor again.
She has to do a spending review in June.
Speaker 8 (31:09):
That's going to be.
Speaker 5 (31:09):
Tough because UK dad is so high. So it's not
all plain sailing, but Sterling certainly has seen some benefit recently.
Speaker 2 (31:17):
Have you recovered from Tottenham winning the Europa Jane? I
mean it was too much.
Speaker 5 (31:23):
Well we had the Crystal Palace winning a big match.
Did you see that it's my local team. Well that's
just a road from me, so that was pretty good.
Speaker 2 (31:31):
Have you watched ted Lasso or they filmed the TV
show at Crystal Palace.
Speaker 5 (31:38):
I didn't see that though, so much to watch for me.
Speaker 2 (31:40):
You have to watch ted Lasso. You'll love it. They
filmed in Crystal Palace. They're you know, I mean Crystal
Palace one on What's Next? World's going to a mess?
Jane Fowley, thank you so much, greatly appreciate.
Speaker 1 (31:53):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern.
Speaker 6 (31:58):
On Apple Corplay and with the Bloomberg Business App.
Speaker 1 (32:02):
You can also listen live on Amazon Alexa from our
flagship New York station, Just say Alexa play Bloomberg eleven thirty.
Speaker 2 (32:10):
Huge response from the Hendry out of Trace is on
let's bring it in with Veda partners here on the
madness in Washington between the left, the right, the center,
and four other flavors. So well, Henrietta, quickly here. You
were on a number of times ago and you said
sixty three congressional seats are in play. Do you stand
by that or is it a different number?
Speaker 8 (32:30):
If I'm not mistaken, it's actually sixty nine. That's based
off of the Florida First and Florida.
Speaker 9 (32:37):
Six special elections that happened two months ago or so,
and it puts at risk basically any district that's our
plus five orient Jeffrey's view R plus ten or more.
Speaker 2 (32:51):
Very cool. Let's move on just as the new slow
is extraordinary. I think America, including Tom Keane, is ignorant
about the nuances of the GOP Senate. We love to
parse the House. We know that story. How divided is
the Senate for the senator from the Dakotas, This is.
Speaker 8 (33:11):
An interesting question.
Speaker 9 (33:12):
Kevin Kramer, who I assume we're talking about, or he
could be speaking about later. Thune is different in that
there are members who are actively benefiting from things like
the Inflation Reduction Act, from the clean energy subsidies that
came from a purely Democrat only past bill, who are
extraordinarily opposed to the president's tariffs but are unwilling to
rain him in.
Speaker 8 (33:33):
And the Senators from the Dakota's represent that faction.
Speaker 9 (33:36):
So they are out there, you know, going to Canada
trying to pass legislation to almost provide something that the
Republican Party can talk about that is not related to
the tariffs and not related to the President's maybe more
social items on his agenda, and that's really what they're
representing right now. When you say Dakota's that's who I
think of.
Speaker 4 (33:55):
How about just in tariffs in general, Henriette, we have again,
once again, we're seeing this playbook play out time and
time again, announced big tariffs, big headlines, and never more
them back as it relates to Europeers, what's the how
do you think this whole tariff thing is going to
play out? Because it has been the number one item
on the President's agenda since.
Speaker 8 (34:15):
They won, since the nineteen eighties.
Speaker 9 (34:19):
My view is that Liberation two point zero is coming.
Liberation Day two point zero is fast approaching, and it
doesn't have to just be July ninth.
Speaker 8 (34:28):
Think about what is coming down the pipe.
Speaker 9 (34:30):
Number one, we have sectoral tariffs across pharmaceuticals and semiconductors.
Speaker 8 (34:34):
The comment period is over. Those tariffs could hit at
any moment.
Speaker 9 (34:38):
The pharmaceutical sector and the European Union are heavily concerned
about those tariffs hitting in the next two to three weeks,
if not before.
Speaker 8 (34:45):
Those would come in.
Speaker 9 (34:46):
If history is president at twenty five percent rates, that's
what the president has tariffed.
Speaker 8 (34:51):
Aluminum, steel automobiles and everything else on with the national
security tariffs.
Speaker 9 (34:55):
So those are pending, and there are a litany of
those that will come for the remainder of the summer
to the rest of this year across lumber, copper, trucking,
air jets, cargo, et cetera. Then we have July ninth,
and what's happening already is that even nations that we
are close to or should have trade deals with, as
(35:16):
suggested by Secretaries Bessett and Lutnik, are nowhere near completion. Indeed,
South Korea, the one that I anticipated or I understood
Lutnik and Bessett. We're talking about weeks ago when they
started saying trade deals could be announced, you know, just
a week after Liberation Day, are nowhere near completed. They
have an election on June third, and they're saying they
need a delay beyond July ninth. The same is true
(35:38):
for Japan, who doesn't even have a date for their
election yet. So when I think about what's coming down
the pike for investors, it's more tires, both sectoral and
a hike specifically with the EU above their current ten
percent rate, I think the President's itching to get to
twenty at least, if not higher, as evidenced by his
forty eight hours of considering fifty percent.
Speaker 4 (35:59):
How does all this CAFF talk, How is it playing
out politically? Is there any feedback, any polling that people care?
Are they concerned that the fundation is going to hit?
Speaker 2 (36:07):
Let me stop and say, this is the question of
the more than's the key questions.
Speaker 8 (36:13):
I'm so glad you ask.
Speaker 9 (36:14):
You know, we cover all kinds of macroeconomic policy items,
and we can talk about wonky stuff like current policy
baseline or carried interest, tax rates. The American public understands tariffs.
What's shocking to me is to go and you know,
go to my local grocery store. See the front page
news and the side advert is for buy your appliances
now before the tarifs hit, buy them now before President
(36:37):
Trump implements Liberation Day tarifs.
Speaker 8 (36:39):
I mean those are front page news items in states
like Louisiana. The American public knows what taris are.
Speaker 9 (36:45):
They know for sure that they are now tax cut,
and they know that they're coming.
Speaker 2 (36:49):
The history of this with McKinley taking it back to
someone that the president worships, Henry, it to Troy's McKinley
quarters or years after his heavy tariffs repealed them. Do
we even get to heavy tariffs or do you just
assume Hill verbally retrench retreat at some point like too.
Speaker 8 (37:12):
I feel really startling that we need to stop.
Speaker 9 (37:15):
I know I just did it, but like we need
to concentrate on the fact that these tariffs are on.
Y'all have some great reporting and charts in the Bloomberg
terminal today about exactly how much money is coming into
customs and border patrol just now for this month. It
is just starting to hit. Those prices will be passed
on to consumers, whether that's at Costco or Walmart. And
as I mentioned, the American public, Republicans, Democrats, and independents
(37:36):
have a very negative view of these tariffs. They don't
like when you know, Peter Tomorrow comes out and says
these are tax cuts.
Speaker 8 (37:43):
We know that they're not. We know that inflation is real,
and now it's because of the tariffs.
Speaker 2 (37:48):
I got to do this morning. Henry Ritta, thank you
so much. I just can't say enough about it. We're
Kenny of the Trey's there and the key item there
at the beginning, she's taken out from sixty three to
sixty nine seats in play as we go to the
mid terms of two thousand twenty six.
Speaker 1 (38:08):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on applecar.
Speaker 6 (38:15):
Play and Android Auto with the Bloomberg Business app.
Speaker 1 (38:17):
You can also watch us live every weekday on YouTube
and always on the Bloomberg terminal.
Speaker 2 (38:23):
He's the newspapers with Lisa Motev. She and I are
doing battling prime stories. Her stories are uglier than mine.
Speaker 10 (38:30):
It's a stressful time, let me tell you, especially for
the girls. Okay, so we have this trend right wealthy
people buying sports teams. Well, that could be taking a
little bit of a time out because the house builder
we've talked about is targeting tax breaks for team owners.
So what it does It includes the tech to the
tax fot. It could cut in half the tax write
off that is potentially worth hundreds of millions of dollars
(38:52):
to some team owners. This according to The New York Times,
I mean NFL, NBA, other major leaguers. They've been able
to write off like the entire value of their team's quote,
intangible assets, player contracts, media rights, sponsorships over fifteen years,
so now that could change, And what they're saying is
that maybe that could stop cooling this trend of wealthy
people wanting to buy teams because they won't get as
(39:14):
much of a tax.
Speaker 2 (39:15):
So we've heard this before, Paul, Right, yep, sure you
know this circles around Yep.
Speaker 4 (39:20):
Been there, It's been there, it's been there.
Speaker 2 (39:23):
I watched some ball this weekend, and I'm not sure
I understand the correlation of money to it, other than
there's teams that are loaded and there's teams that are not.
Speaker 4 (39:33):
Well it's I mean, they've the NFL.
Speaker 2 (39:35):
They brought private equity.
Speaker 4 (39:36):
Now invest in the NFL, so that's we're having to
ten percent of these franchises.
Speaker 2 (39:41):
So we're seeing a lot of that in the NFL.
Is there a week group like in Major League Baseball
p there are week teams, but no week franchises. The
values is so cool. It's not Chicago White Sox, you know.
Speaker 4 (39:52):
I mean, I just kind of feel like, even if
you're in a small market like Jacksonville, you know, the
value creation there is extraordinary. So we'll see, all right.
Speaker 10 (40:00):
So we go from sports, Yeah, I can okay, Okay,
business trips. Okay, you mentioned you have one coming out right, Okay,
I have one coming up next week. Tom's here.
Speaker 4 (40:11):
No, We're going to the nation's capital to the National Shores,
the Gay Lord Resort down there just outside of DC
for an event. Alex Steele and I will be there.
Speaker 2 (40:21):
Very cool. Yeah, so you pick up.
Speaker 10 (40:25):
You're that business trip right next week, I'm going to
San Francisco. Tom's staying here, yeah.
Speaker 4 (40:30):
John Tumer is going nowhere.
Speaker 2 (40:32):
So the golf So you're the one that has a
golf streams.
Speaker 5 (40:35):
Okay.
Speaker 10 (40:38):
So the question that's coming up from this story is
do you bring a plus one on your business trips?
So that's the question blended travel right, leisure is like
a big thing now business leisure. But a new study
is saying that gen z ers and millennials they're more
likely to bring a friend or spouse, and they say
(41:00):
that they won't tell their boss because they're afraid what
their boss might say. So then they have their friend
or spouse kind of dipping and ducking and hiding the boss.
Speaker 2 (41:08):
On the trap.
Speaker 10 (41:10):
But they're just talking about this whole idea, and it
brings a question like would you bring do you bring
a spouse? Or a plus one on a business trip.
Is it okay? Some companies are actually saying they encourage
it because it makes things more enjoyable and brings stress
level down.
Speaker 4 (41:25):
So yeah, I got a plus one?
Speaker 8 (41:27):
You got it?
Speaker 5 (41:27):
Okay?
Speaker 4 (41:27):
Sure, the going down to DC.
Speaker 10 (41:30):
And you're not a gen z and Rolani.
Speaker 2 (41:33):
Trend, do what I want to do.
Speaker 4 (41:34):
I'm at that point in my life when this.
Speaker 2 (41:36):
Is it's more stressful.
Speaker 10 (41:38):
You think it's more stress Yeah, because look if.
Speaker 2 (41:41):
I in London for five days and take plus one
with me, she's like plus Bond Street plus. Let's go
over to Dublin the Guinness, Let's go look at some
museum and get you know, a zillion dollars. You do,
it's definitely more stressful. That's one more.
Speaker 10 (42:00):
Okay, Big Memorial Day box office. Not sure if you
went out to the movies, but a lot of people did.
Three hundred and twenty six million dollars in North America.
That's between Lilo and Stitch and the Mission Impossible movie. Big, big, big.
The theaters needed it. This was like kind of boosts
that they wanted.
Speaker 4 (42:17):
Yeah, I mean it's I think as we get farther
and farther from the pandemic getting a little bit closer
to normalization. I'm not sure normalization is pre pandemic levels,
but it's gonna be a it's gonna be a continue
to be a big, big, important window for these movies.
Speaker 2 (42:31):
The newspapers Lisa Manteo a strong start to the week.
Speaker 1 (42:35):
This is the Bloomberg Surveillance Podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live each
weekday seven to ten am Easter and on Bloomberg dot Com,
the iHeartRadio app, tune In, and the Bloomberg Business app.
You can also watch us live every weekday on YouTube
(42:56):
and always on the Bloomberg terminal
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