June 2, 2025 • 26 mins
Watch Tom and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg Surveillance hosted by Tom Keene & Paul SweeneyJune 2nd, 2025
Featuring:
1) Stephen Stanley, Chief Economist at Santander, joins for an extended conversation on the outlook for the US economy, lower consumer spending, and potential for a shallow recession in the US. Global stocks started the new month under pressure due to a flare-up in global trade tensions and geopolitical uncertainty. Gold is heading for its biggest gain in almost four weeks as geopolitical and trade tensions revived demand for haven assets.
2) Kathy Jones, Chief Investment Strategist, Fixed Income at Charles Schwab, discusses bond market warnings and why the Fed won't be coming to the rescue any time soon. The dollar fell 0.5%, extending a streak of five monthly losses, while Treasury yields rose across the curve, with the 10-year rate up four basis points to 4.44% in the early part of the morning as risk appetite dissipates.
3) Maya MacGuineas, President of the Committee for a Responsible Federal Budget, talks about the House bill "debt fiasco" and why markets haven't fully awaken to the debt and deficit problem in the US. It comes as Treasury Secretary Scott Bessent says the US "is never going to default" as the deadline for increasing the federal debt ceiling approaches. Bessent declines to specify an "X date" for when the Treasury will run out of cash, but says the goal is to bring the deficit down over the next four years.
4) Henrietta Treyz, co-founder at Veda Partners, talks about President Trump threatening an increase to steel and aluminum tariffs, how the tax bill could be transformed in the Senate, and other DC headlines. Uncertainty prompted by President Donald Trump’s trade agenda picked up after China and the US accused each other of violating a trade deal concluded last month. Trump also said he would double tariffs on steel and aluminum imports. Meanwhile, Ukraine staged a dramatic series of strikes across Russia, deploying drones hidden in trucks deep inside the country to hit strategic airfields.
5) Lisa Mateo joins with the latest headlines in newspapers across the US, including an NYT story on Gen Z's interest in chain restaurants and a Business Insider story on AI already taking human jobs.
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're gonna look.
Speaker 3 (00:27):
Here right now with Stephen Stanley at the American economy.
Stephen Stanley's just fabulous. It taken Fisherian macroeconomics and bringing
it down to where we are right now.
Speaker 2 (00:40):
There's been an underestimation of GDP.
Speaker 3 (00:43):
Is a productivity miracle still in place? You know.
Speaker 4 (00:49):
I think that there's been a lot of talk about
a big acceleration productivity, and of course AI is a
big part of that conversation, and I think we might
get there, but I don't think we're there yet. It
takes a long time for these sorts of revolutions to
kind of take hold in the economy. You think back
to the nineties and how long it was after the
(01:11):
NASDAC began to shoot up until the productivity numbers actually
showed it. So I think at the moment productivity is
okay but not great. And you know, the question is
when and by how much might it accelerate going forward?
Speaker 3 (01:25):
The split between hard and soft data. Michael McKee's completely
focused on this right now. One shows oomph, the other not.
Which is right.
Speaker 4 (01:35):
Well, I think at this point generally I'm a big
believer in the hard data, and for example, I think
that the correlation between consumer confidence and consumer spending is
pretty weak over time. But when things are moving fast,
sometimes the soft data is telling you something and in
a more timely manner than the hard data. And I
(01:56):
think right now we're just waiting for the hammer to
drop from the impact of tariffs, and you can see
that in the soft data. You haven't seen it yet
in the hard data. I'm very interested to see what
the May data look like, because I have to say
I was surprised at how little, really, almost not at all,
the April hard data was affected by tariffs. We had,
(02:21):
you know, the employment number was good, retail sales was fine,
the CPI was normal. So I am expecting to see
some of that washed through in the May data.
Speaker 5 (02:30):
Are you concerned about inflation, are you concerned about slowing
economic growth associated with the tariffs, or are they just
so I don't know, I mean, they're out there, and
there are some real tariffs on real goods and services.
How do you expect that the blow through?
Speaker 4 (02:43):
Well, my hope is that on both counts, both of
inflation and for growth, that the impact will be mostly temporary.
We'll see, I mean, obviously all of this remains to
be seen at this point, but certainly, I think for
the FED, the key question is, I think on the
inflation side, really focused on how long the inflation impetus lasts.
Speaker 5 (03:06):
So what's our federal reserve to do, if anything, as
a result of some of this uncertainty.
Speaker 4 (03:11):
Well, right now I think they're you know, as they've said,
they're being patient, they're in wait and see mode. I
think they feel like they're in relatively good position coming
into the But you know, before any of the tariff
stuff began, the idea was, Okay, we're modestly restrictive, and
that's where we want to be because inflation is above
our target. We need to see more progress on inflation.
(03:32):
That all that whole narrative was interrupted by the tariff situation,
and now you know, we'll we'll see how long that
inflation data continues to run high.
Speaker 2 (03:41):
This is what surveillance is about.
Speaker 3 (03:42):
We got Blanchard coming on on Stanley Fisher with all
that excellence of academic theory and thinking about where we're going.
Speaker 2 (03:51):
You are a definitive.
Speaker 3 (03:53):
Acclaim market economist out of Washington and Lee. Do the
models that Blenchard and Fisher invented, codified and move forward?
Are they working today? Or is the FED and others?
Are we just making it up as we go?
Speaker 2 (04:08):
Well?
Speaker 4 (04:09):
I think that, you know, certainly the models provide a
good backdrop on how to interpret things, but there's always
something new, right every every cycle, every episode. Right now, technology, well,
I think it's the it's the uncertainty around policy right
in the moment, in the short term, you know, in
the long run, as you say, I mean, technology is
(04:31):
a big question. But I think in the near tournament's
the uncertainty around policy and how that's likely to impact
the economy.
Speaker 3 (04:38):
Steven Sandley, thank you so much, greatly appreciate him.
Speaker 1 (04:46):
You're listening to the Bloomberg Surveillance Podcast. Catch us live
weekday afternoons from seven to ten am Eastern Listen on
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watch us live on YouTube.
Speaker 3 (04:58):
Charles Schwarz, Kathy Jones, who had an eventful weekend of
ambiguity a weeker dollar, but the news flow it was
sort of incomplete this weekend.
Speaker 2 (05:08):
There was this, that, and the other thing.
Speaker 3 (05:11):
Do we have confidence in acquiring full faith in credit
out the curve this morning? I just don't see it.
Speaker 6 (05:17):
Yeah, we don't go We're not going out the curve
very far. And the reason is simply that there is
all that uncertainty. The risk premium has increased, the term
premium has moved up, So you do you get paid
a little bit more to take that risk, But I
don't think you get paid enough until we get some
sort of clarity. And clarity is the word at this
(05:40):
the fad uses all the time.
Speaker 2 (05:41):
It's a word we.
Speaker 6 (05:42):
All want to use because we're waiting to see where
a policy goes.
Speaker 3 (05:46):
I mean clarity. Friday, Paul had I had clarity. The
Knicks are on a roll, things are great, red Sox
maybe who would win one game? And then boom June
came along. Everything changed and it to me it's this morning.
Speaker 5 (06:00):
Book absolutely is Kathy.
Speaker 7 (06:03):
I mean.
Speaker 5 (06:06):
Credit risk? Do I need to take credit risk here?
When I considered it to your treasure and get almost
four percent here you.
Speaker 6 (06:12):
Don't necessarily have to, but I don't think it's a
big problem if you do. In investment grade credit, we're
I'm pretty cautious on high yield, growing.
Speaker 5 (06:20):
More cautious some of the best performance.
Speaker 6 (06:22):
It has because the coupon is that okay, So you know,
we're really meandering in terms of the rates right now,
just going sideways, up and down, up and down. They're
going sideways, but that puts the emphasis and returns on
the coupon. So high yield has high coupons, so that's
performing well. The other area that's performing well is international,
and that's because the dollar is weakened. But otherwise you're
(06:45):
earning the coupon. That's all that's going on right now.
Speaker 5 (06:48):
What's the important driver for the fixed income market today?
It doesn't feel like it's the FED. It feels like
it might be more of I don't know, t tariffs
and tax bills and things like that. How do you
think about Washington, DC as you think about the bond market.
Speaker 6 (07:03):
I try not to think, but good to see as
much as possible, But obviously it's the factor there. I
think at the end of the day, treasure yields are
driven by what the Fed's doing, what inflation's doing, what
economic growth is doing. And I do think in the
long run, if we do have these tariffs, and that's
(07:24):
the question mark, what will the tariffs be, how long,
how big, we will get slower economic growth and we'll
get lower inflation from that. But the offsets are that
tariffs initially bump up prices and give us that inflation,
and a week or dollar gives us some important inflation.
So this is why we're going nowhere. Because you have
(07:46):
one one policy that does one thing, you have another
policy does another thing.
Speaker 5 (07:51):
So do we just are we kind of in a
trading range here? For the treasuries, I mean, what do
I do here? I guess I just buy them and
clip the coupons.
Speaker 6 (07:57):
I guess, yeah. I think you stay benchmark are lower
in terms of duration. There's not really a lot of
enough reward for the risk to go too far out
the curve. A same story and credit. You get paid
pretty decently in investment grade credit. If you want to
take risk in high yield, I just say stay at
the upper end of high yield, and then you can
(08:20):
look at international Because we do see the dollar continuing
to weaken from here.
Speaker 3 (08:24):
I look at this and I want you to talk
about Lizzie Saunders world. I know, you know, you get it.
There's a Chinese wall, folks, between what Kathy Jones is doing.
Speaker 2 (08:32):
But there isn't.
Speaker 3 (08:34):
And the answer is there's dividend or share buyback as
a yield proxy. There's the enthusiasms peoples this weekend, Paul
saying heavy into mag seven.
Speaker 2 (08:44):
Da da da da da. Folks, these are just opinions here.
Speaker 3 (08:47):
Now, do you sense a point where there is a
shift to people finding value in the coupon versus the
game of equities?
Speaker 6 (08:56):
Yeah, we do. We see a lot of investors who
have just gotten very cautious because of the volatility in
the equity market and they have and the concern about
all these policies and not knowing where it goes. So
we have seen people shifting more into fixed income, clipping
the coupon, reducing some of the volatility and risk in
(09:17):
the portfolio.
Speaker 5 (09:19):
So again to my Federal Reserve, they can just sit
on their hands for there a while. Now it seems like.
Speaker 6 (09:25):
Yeah, it looks like that's the name of the game.
They sit on their hands for a while. Maybe September,
wait and see if unemployment goes up. I mean that's
going to be They've talked about the dual mandate a lot,
and that's going to be the driver.
Speaker 5 (09:37):
I think undergraduate from Northwestern and an NBA from Northwestern.
There are other schools out.
Speaker 6 (09:43):
There, you now, I mean, yes, I know, but I'm
on Midwestern A.
Speaker 2 (09:50):
I've never asked you this. Did you study with Robert Gordon?
Speaker 6 (09:53):
Yes?
Speaker 3 (09:54):
Tell our audience, folks, we more in Stanley Fisher. The
giant of midw growth economics was Robert Gordon. Massive influence.
Good morning, Jim Glass and formerly with JP Morgan out
on the left coast. Tell me about being in a
classroom with the great Midwest growth economist.
Speaker 6 (10:14):
Yeah, he was a fantastic professor, so smart and so nice.
Speaker 3 (10:19):
He believed in the manufacturing process. Did he believe that
manufacturing was different and it created a multiplier of jobs,
just different than all these other service sector Bologney jobs
like what Paul and I do me.
Speaker 6 (10:34):
Yeah, No, I think he did believe in that. You remember,
you know, growing up in the Midwest, the rust belt
and all that, and I think he had a real
affinity for that and felt that the widening of the
trade deficit. The loss of those jobs which were right
producing solid middle class incomes was a big problem.
Speaker 3 (10:52):
We'll touch on this today, Kathy Joes, thank you so
much for those comments, Professor Gordon. With the death the
passing of Stanley a fisherman, we'll find some other people
in the coming days to speak to, honest.
Speaker 1 (11:04):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Applecarplay and Android Auto
with the Bloomberg Business App. You can also listen live
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say Alexa Play Bloomberg eleven thirty.
Speaker 3 (11:21):
Joining us justin di you are this morning is Maya
McGuinness Committee for Responsible Federal Budget. We're thrilled Mia mckindness,
really an authority on the mess we're in, could join
us here. Maya. The critics of your world say CBO
is too gloomy in their growth, and that we will
(11:42):
continue to grow our way out of this mess, or
at least sustain it.
Speaker 2 (11:47):
Do you buy it?
Speaker 8 (11:50):
Yeah, there's a lot of CBO bashing going on these days. No, certainly,
I wish it were true. I think everyone wishes that
you could cut taxes and that would unleash such huge
growth that it would fix our fiscal problems. But clearly
that's not the case. There are a number of outside
estimators who are looking at the tax bill, the reconciliation bill,
and trying to figure out what the effects on economic
(12:11):
growth would be.
Speaker 9 (12:12):
And here's the way it works.
Speaker 8 (12:14):
Tax cuts have positive effects on growth, but not enough
to generate enough revenues that they offset all of the
loss from the tax cuts themselves, usually about twenty percent.
The problem is that this tax bill in particular isn't
as pro growth as what we saw in twenty seventeen
the corporate tax rate cuts.
Speaker 9 (12:33):
Those were very pro growth.
Speaker 8 (12:34):
This less so chops up the tax base in a
lot of ways, and our debt is now so large
that the negative effects of that even outweigh those positive
effects of tax cuts. So the bashing is just like
angry parents yelling at the ref.
Speaker 3 (12:49):
I love that sounds like my weekend.
Speaker 2 (12:52):
Maa McGuinness.
Speaker 3 (12:53):
Henrietta Trees was with us, And the basic idea is
we dashed to the Senate for the big, beautiful bill,
that there will be moderate Republicans out there to save
the budget. Day does that beast exist or are they prehistoric?
And they off the room.
Speaker 8 (13:10):
Yeah, no, I wish that's how I thought it were
going to play out. I'm worried because I think the
moderate Republicans, just like we saw in the House, may
actually be pushing to make the bill worse. So the
bill has a tax cuts and the medium spending cuts,
and what you're seeing from the moderates is they're more
concerned about fewer spending cuts than more fiscal responsibility. And
(13:31):
then on the very conservative side, where you have people
who are willing to do the spending cuts you would need,
they also are more prone to believe the myths of
the fairy tale that growth can fix everything and you
don't have to make any structural changes. So the problem
is nobody makes hard choices in the budget anymore. We
can do tax Right's stop.
Speaker 3 (13:50):
Paul wants to get in here, But I'm going to
ask the rude question, by what did God's name happened
in Washington? Where is the adultness of this debate?
Speaker 8 (14:00):
You know what killed adultness? I think partisan polarization. We
are so much more focused on Republican versus Democratic preferences
than we are How you fix the country. It's not
just fiscal we're not fixing any of the big problems
where there's anything you actually have to do, because the
political calculation of don't let that other side have a
(14:21):
win is outweighing the calculations of compromise and country first.
And I'm deeply concerned about it. Just like polarizations undermining
everything are weak fiscal positions keeping us from being prepared
for the AI race we're in. Then you need to
fix our social contract, global national security issues that are
riskier than they used to be, all of these things.
(14:41):
I think our polarization is put so much stand in
the wheels. We're not getting anything done, and that's not
allowing the adults to come forward. They exist behind closed doors.
They're talking about it, but politically it's not rewarded right
now in this populist and polarized moment, and we got
to figure out a fix for that.
Speaker 5 (14:59):
I've been in this market sas nineteen eighty six. Nobody
cares about deficits in a national debt. Why should we
real estate?
Speaker 8 (15:06):
Well, you know, the bond market is starting to be
a bit of a reminder. We actually are hearing so
many more reminders.
Speaker 9 (15:12):
I'm with you.
Speaker 8 (15:12):
It's been just deafening in terms of people being concerned
about it other than those of us who work on
this all the time for the past years. But you're
hearing many more concerns right now, with warnings, with downgrades,
with problems in the bond markets, with other countries looking
at the US debt and thinking this isn't as great
a this isn't as sure thing as it used to be.
We have the reserve currency where the safe haven. The
(15:35):
central Bank did a lot that kept rates down for
a long time. Many of these trends could gradually be shifting.
And the whole point is we should not wait to
find out if and when we get ourselves into trouble.
We should fix the situation where we still have all
of those privileges.
Speaker 5 (15:50):
And it's much easier to do so as long as
people keep showing up at our debt auctions. Maya we
don't have a problem. What do you say to those folks?
Speaker 8 (15:58):
Yeah, I say that those folks made that argument, and
as a result, we borrowed more when interest rates were low.
We now have trillions more in debt, and just small
increases in interest rates have huge impacts on our interest
payments as a result, which is why it's the largest
growing part of the budget, the second line item in
the budget. Those interest payments are much more possible to
(16:19):
changing interest rates because of the arguments. Don't worry, be happy,
keep borrowing. We shouldn't have done it then and we
shouldn't now.
Speaker 3 (16:25):
My don't be a stranger. We got to get you
on he or somehow. This is going to get worser
through this summer. And articulate as always with the Committee
for a Responsible Federal Budget. Brilliant work, Miami Guinness.
Speaker 1 (16:40):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Apple Cockplay and Android
Auto with the Bloomberg Business app. You can also watch
us live every weekday on YouTube and always on the
Bloomberg Terminal.
Speaker 3 (16:55):
Billion years ago, I decided I wouldn't learn Senate parliamentarian rules.
Paul good idea. It's just like the only one that
ever nailed this was Robert bird Well.
Speaker 2 (17:06):
I don't know we have of the Virginia. I mean,
Henrietta Trace is in studio now to explain.
Speaker 3 (17:13):
Henrietta. I thought a quiet weekend for our elected officials.
They're all pondering what's next for the Senate. Is they
look at a big, beautiful bill the parliamentary the procedure
of it, Will it be smooth?
Speaker 2 (17:29):
Yeah?
Speaker 7 (17:29):
The parliamentarian is one of my favorite jobs for sure,
So I will take on that burden for you because
I think it's a blast.
Speaker 9 (17:37):
The Senators are about to come in hot.
Speaker 7 (17:39):
It is all eyes on them for the next four
to six weeks, and they have trillions of dollars literally
with taxes, the medicaid cuts, all the various.
Speaker 9 (17:53):
Sanctions packages, and the tariff bills.
Speaker 7 (17:55):
All these pieces are before them right now and all
eyes are going to be on them.
Speaker 9 (17:58):
The parliamentarian is going to be very busy, as you know.
Speaker 7 (18:01):
The Democrats and the Republicans get an opportunity to go
before her and explain what it is they'd like to
see taken out this bill. It's really a game of
who knows the rule is the best who's the best
player right now? And that really makes million dollar difference,
billions of dollars difference thirteen years.
Speaker 3 (18:17):
Elizabeth McDonough m ACD. Elizabeth McDonough is the most powerful
person in America. Who's that she's a parliamentary. It's like
Alice at Wonderland. I mean, they have to go in
front of her, Henrietta.
Speaker 5 (18:32):
Are we going to hear from the Democrats ever in
this congress? Here, it's such a time for the Democrats
to make themselves useful at all.
Speaker 9 (18:42):
I mean, it would be about time.
Speaker 7 (18:44):
I continues to be shocked at how absent Democrats are.
I mean, Republicans are putting taxes on cans of beer?
How is that not an immediate talking point? But here
we have over the weekend, Majority Minority Leader Schumer sending
a letter to his college saying, hey, y'all, it's time
to get in the game. And as you point out,
Elizabeth McDonough has been in the Senate since the nineteen
(19:05):
nineties and has worked for some really esteemed folks and
is now going to be the key arbiter or Democrats
are going to go in there and say X, Y
and Z is not permissible. Strike it from the bill,
and that's going to hit the tax plans of the
Republican Conference. One of the reasons that the bill has
to get more expensive and that even more to the deficit,
(19:25):
is because it doesn't have an economic impact by using
the current policy baseline, which is the strategy that Senate
Republicans are going to use, which will effectively write off
three point eight trillion dollars worth of this package and
say the cost is zero. You cannot pass legislation through
reconciliation instructions unless it has a budget impact, So they
kind of shoot themselves in the foot here. You get
(19:46):
three point eight trillion dollars in free money, but it's
not permissible under reconciliation. So that's going to be one
of the core things that Democrats try to go off
the works with with the parliamentarian and Leader Thoon. And
it's about time DEM's getting the game. So yeah, I
would be watching both for that.
Speaker 5 (20:01):
Who is a Democratic voice? Would you say? Is it
Senator Chuck Schumer or is there somebody else in Democratic
Party that I don't know? Maybe they're looking to step
up here.
Speaker 7 (20:11):
I mean, I think the Democratic Party is at war
with itself, trying to figure out if mckem Jeffries is
the kind of speaker or minority leader that Nancy Pelosi
could be or was. Certainly that's shown some lacking components.
Speaker 9 (20:24):
At a minimum.
Speaker 7 (20:25):
The party over there on the House side is warring
between the young folks and the older folks, and they
can't get a clearance or on committee chairs and on
the Senate side, they're struggling just to have relevance or
find a message.
Speaker 9 (20:36):
As I mentioned, I don't think it's too hard to
come up.
Speaker 7 (20:38):
With a message against tariffs and taxes on really obvious
things like back fool items.
Speaker 9 (20:42):
But they're nowhere. They have a lot of work to do.
Speaker 3 (20:45):
What do we not understand about the impact of the
president and a new fifty percent tariff on quote unquote steel?
What's the hendriy Ott of Trey's insight there.
Speaker 7 (20:55):
What's fascinating to me about that is that Lutnik and
Bessent and Greer keep throwing the same playbook at all
of these tariff actions that the President obviously wants.
Speaker 9 (21:04):
So the one I'm really ruminating on today is.
Speaker 7 (21:06):
This idea that Secretary Besson has trotted out that he
and President She are going to get on the phone
this week.
Speaker 9 (21:12):
That seems very unlikely. But also what is that going
to resolve? They spoke on the phone four months ago.
Speaker 7 (21:16):
And now we see hundreds of billions of dollars worth
of goods tariffed at you know, at some points one
hundred and forty five percent coming in from China. So
they have this playbook that's like, get Trump involved, but
then also make sure he's not involved, because we don't
know if we're going to get fifty percent tyres on
steel overnight.
Speaker 2 (21:32):
Henriette a hugely valuable.
Speaker 3 (21:34):
The Surveillance Parliamentarium will send you a fruit masket.
Speaker 2 (21:39):
We really appreciate it. Henrietta Trey's Vada Partners.
Speaker 1 (21:42):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Apple, Cocklay and Android
Auto with the Bloomberg Business app. You can also listen
live on Amazon Alexa from our flagship New York station.
Just say Alexa, play Bloomberg eleven thirty.
Speaker 3 (21:59):
The newspaper make me smile, Lisa, I will try my best.
Speaker 5 (22:02):
Okay.
Speaker 10 (22:02):
So this one's in the Wall Street Journal. If you
take a look at it, the headline is how much
of the world's richest men get paid? Right, So we're
talking about Elon Musk. Tesla has to decide, no, not
at all. Tesla has to decide right how much to
pay him. He's commanding this bigger steak. So he's actually
the lowest paid chief executive of an S and P
five hundred company. Last year, Tesla paid him zero because
(22:24):
of that legal battle. Right, so he's been back and
forth over this big stock award back in twenty eighteen.
So they go through basically how much different founder CEOs make,
Like the Wall Street Journal they ranked it and they
said the top one makes about one hundred and sixty
five million. But then you go to metas Mark Zuckerberg,
you made twenty seven million last year. Michael Dell got
three point one million, mostly cash. So they say they
(22:48):
go through a couple options like well, what do you do?
How do you approach this?
Speaker 5 (22:51):
Right?
Speaker 10 (22:51):
So they say you either make him show up and
go big, you pay him like a CEO, or you
pay him like everyone else. So this is the big
struggle that Tesla has to deal with coming up. But
it's it's a lot of the company world.
Speaker 5 (23:03):
Is richest person, correct, correct? Okay, I just want to
make sure I can.
Speaker 3 (23:07):
I just say to take an issue that they include
stock awards is compensation because if the stock goes down,
there's not much compensation.
Speaker 2 (23:16):
You know, there's a risk.
Speaker 5 (23:17):
To it, right, and that's always because it ties aps
growth or market whatever.
Speaker 2 (23:23):
They can The critics would say they rigid.
Speaker 10 (23:27):
Right the world's riches, Okay, to make sure you have that. Okay, Yeah,
so this one too. It's talking about Meta how they
want to fully automate ads using AI. So advertising makes
up the bulk of Meta's business, right, So Meta, their
ad platform already has a couple AI tools. But the
debate behind all this is that some brands worry that
(23:49):
these AI generated ads they won't match the human made
quality because it's not being made by human it's being
made by you know, a computer. But but smaller businesses say,
you know, we could benefit because it just makes it
easier for us to create the ads. So that's a
battle going on AI for the creative correct to create it,
(24:12):
to greet it. Basically, you just punching what you want
and you know the video comes up. So I will
help them do that, but you know it's a I
use it for checking quick thing, but I always have
to fact check it. But I have seen a lot
of these, like the Wall Street Journal did this and
they made like an entire movie trailer just AI like
you see this, and how they're able to do that
(24:33):
and make you sit back and why.
Speaker 3 (24:34):
When I started using it this weekend and it's it's
it's it's you know, I'm sure I'm way behind everyone else.
It's like, wow, do one what else it is?
Speaker 10 (24:43):
Okay, have you been to let's say, like a casual
dining place lately, like an outback steakhouse or an Applebee's
or anything like that. So these casual dining places, they're
starting to attract more gen Z customers. And the reason
why is because gen Z actually says they like going
back to the whole family, you know, sit down dinner.
(25:05):
It's more stable. It's tough economic time, so they like
that instead of going to like the fast casual, you know,
going to like a Kava or like a Chipotle. You know,
as far as you know, what's more economically friendly to
So just trying to figure that out. They say that
they enjoy going to like the sit down place. They
want to talk to people. Gen Z wants to sit
down and have conversation.
Speaker 7 (25:29):
I don't know.
Speaker 2 (25:30):
Can I report on the instaurant quality. We had the
after prom party this weekend and it was catered.
Speaker 3 (25:37):
By LaBelle to Talk. I'm pleased to tell you that
the taco bell salsa sauce, it was ground beautifully into
the Chinese oriental carpet. I mean the way that somebody
got there stillttly right into it and got that salsa
sauce right in there.
Speaker 5 (25:55):
Did it come with the margaritas?
Speaker 2 (25:56):
Though, no, it did not come with the margharitas. That's
thank you. I would be in trouble if it had
come with the markert read as well.
Speaker 3 (26:04):
Lisa Mateo, the newspapers, thank you so much.
Speaker 1 (26:08):
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 Eastern on Bloomberg dot com, the
iHeartRadio app, tune In, and the Bloomberg Business app. You
can also watch us live every weekday on YouTube and
(26:28):
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're gonna look.
Speaker 3 (00:27):
Here right now with Stephen Stanley at the American economy.
Stephen Stanley's just fabulous. It taken Fisherian macroeconomics and bringing
it down to where we are right now.
Speaker 2 (00:40):
There's been an underestimation of GDP.
Speaker 3 (00:43):
Is a productivity miracle still in place? You know.
Speaker 4 (00:49):
I think that there's been a lot of talk about
a big acceleration productivity, and of course AI is a
big part of that conversation, and I think we might
get there, but I don't think we're there yet. It
takes a long time for these sorts of revolutions to
kind of take hold in the economy. You think back
to the nineties and how long it was after the
(01:11):
NASDAC began to shoot up until the productivity numbers actually
showed it. So I think at the moment productivity is
okay but not great. And you know, the question is
when and by how much might it accelerate going forward?
Speaker 3 (01:25):
The split between hard and soft data. Michael McKee's completely
focused on this right now. One shows oomph, the other not.
Which is right.
Speaker 4 (01:35):
Well, I think at this point generally I'm a big
believer in the hard data, and for example, I think
that the correlation between consumer confidence and consumer spending is
pretty weak over time. But when things are moving fast,
sometimes the soft data is telling you something and in
a more timely manner than the hard data. And I
(01:56):
think right now we're just waiting for the hammer to
drop from the impact of tariffs, and you can see
that in the soft data. You haven't seen it yet
in the hard data. I'm very interested to see what
the May data look like, because I have to say
I was surprised at how little, really, almost not at all,
the April hard data was affected by tariffs. We had,
(02:21):
you know, the employment number was good, retail sales was fine,
the CPI was normal. So I am expecting to see
some of that washed through in the May data.
Speaker 5 (02:30):
Are you concerned about inflation, are you concerned about slowing
economic growth associated with the tariffs, or are they just
so I don't know, I mean, they're out there, and
there are some real tariffs on real goods and services.
How do you expect that the blow through?
Speaker 4 (02:43):
Well, my hope is that on both counts, both of
inflation and for growth, that the impact will be mostly temporary.
We'll see, I mean, obviously all of this remains to
be seen at this point, but certainly, I think for
the FED, the key question is, I think on the
inflation side, really focused on how long the inflation impetus lasts.
Speaker 5 (03:06):
So what's our federal reserve to do, if anything, as
a result of some of this uncertainty.
Speaker 4 (03:11):
Well, right now I think they're you know, as they've said,
they're being patient, they're in wait and see mode. I
think they feel like they're in relatively good position coming
into the But you know, before any of the tariff
stuff began, the idea was, Okay, we're modestly restrictive, and
that's where we want to be because inflation is above
our target. We need to see more progress on inflation.
(03:32):
That all that whole narrative was interrupted by the tariff situation,
and now you know, we'll we'll see how long that
inflation data continues to run high.
Speaker 2 (03:41):
This is what surveillance is about.
Speaker 3 (03:42):
We got Blanchard coming on on Stanley Fisher with all
that excellence of academic theory and thinking about where we're going.
Speaker 2 (03:51):
You are a definitive.
Speaker 3 (03:53):
Acclaim market economist out of Washington and Lee. Do the
models that Blenchard and Fisher invented, codified and move forward?
Are they working today? Or is the FED and others?
Are we just making it up as we go?
Speaker 2 (04:08):
Well?
Speaker 4 (04:09):
I think that, you know, certainly the models provide a
good backdrop on how to interpret things, but there's always
something new, right every every cycle, every episode. Right now, technology, well,
I think it's the it's the uncertainty around policy right
in the moment, in the short term, you know, in
the long run, as you say, I mean, technology is
(04:31):
a big question. But I think in the near tournament's
the uncertainty around policy and how that's likely to impact
the economy.
Speaker 3 (04:38):
Steven Sandley, thank you so much, greatly appreciate him.
Speaker 1 (04:46):
You're listening to the Bloomberg Surveillance Podcast. Catch us live
weekday afternoons from seven to ten am Eastern Listen on
Applecarplay and Android Auto with the Bloomberg Business app, or
watch us live on YouTube.
Speaker 3 (04:58):
Charles Schwarz, Kathy Jones, who had an eventful weekend of
ambiguity a weeker dollar, but the news flow it was
sort of incomplete this weekend.
Speaker 2 (05:08):
There was this, that, and the other thing.
Speaker 3 (05:11):
Do we have confidence in acquiring full faith in credit
out the curve this morning? I just don't see it.
Speaker 6 (05:17):
Yeah, we don't go We're not going out the curve
very far. And the reason is simply that there is
all that uncertainty. The risk premium has increased, the term
premium has moved up, So you do you get paid
a little bit more to take that risk, But I
don't think you get paid enough until we get some
sort of clarity. And clarity is the word at this
(05:40):
the fad uses all the time.
Speaker 2 (05:41):
It's a word we.
Speaker 6 (05:42):
All want to use because we're waiting to see where
a policy goes.
Speaker 3 (05:46):
I mean clarity. Friday, Paul had I had clarity. The
Knicks are on a roll, things are great, red Sox
maybe who would win one game? And then boom June
came along. Everything changed and it to me it's this morning.
Speaker 5 (06:00):
Book absolutely is Kathy.
Speaker 7 (06:03):
I mean.
Speaker 5 (06:06):
Credit risk? Do I need to take credit risk here?
When I considered it to your treasure and get almost
four percent here you.
Speaker 6 (06:12):
Don't necessarily have to, but I don't think it's a
big problem if you do. In investment grade credit, we're
I'm pretty cautious on high yield, growing.
Speaker 5 (06:20):
More cautious some of the best performance.
Speaker 6 (06:22):
It has because the coupon is that okay, So you know,
we're really meandering in terms of the rates right now,
just going sideways, up and down, up and down. They're
going sideways, but that puts the emphasis and returns on
the coupon. So high yield has high coupons, so that's
performing well. The other area that's performing well is international,
and that's because the dollar is weakened. But otherwise you're
(06:45):
earning the coupon. That's all that's going on right now.
Speaker 5 (06:48):
What's the important driver for the fixed income market today?
It doesn't feel like it's the FED. It feels like
it might be more of I don't know, t tariffs
and tax bills and things like that. How do you
think about Washington, DC as you think about the bond market.
Speaker 6 (07:03):
I try not to think, but good to see as
much as possible, But obviously it's the factor there. I
think at the end of the day, treasure yields are
driven by what the Fed's doing, what inflation's doing, what
economic growth is doing. And I do think in the
long run, if we do have these tariffs, and that's
(07:24):
the question mark, what will the tariffs be, how long,
how big, we will get slower economic growth and we'll
get lower inflation from that. But the offsets are that
tariffs initially bump up prices and give us that inflation,
and a week or dollar gives us some important inflation.
So this is why we're going nowhere. Because you have
(07:46):
one one policy that does one thing, you have another
policy does another thing.
Speaker 5 (07:51):
So do we just are we kind of in a
trading range here? For the treasuries, I mean, what do
I do here? I guess I just buy them and
clip the coupons.
Speaker 6 (07:57):
I guess, yeah. I think you stay benchmark are lower
in terms of duration. There's not really a lot of
enough reward for the risk to go too far out
the curve. A same story and credit. You get paid
pretty decently in investment grade credit. If you want to
take risk in high yield, I just say stay at
the upper end of high yield, and then you can
(08:20):
look at international Because we do see the dollar continuing
to weaken from here.
Speaker 3 (08:24):
I look at this and I want you to talk
about Lizzie Saunders world. I know, you know, you get it.
There's a Chinese wall, folks, between what Kathy Jones is doing.
Speaker 2 (08:32):
But there isn't.
Speaker 3 (08:34):
And the answer is there's dividend or share buyback as
a yield proxy. There's the enthusiasms peoples this weekend, Paul
saying heavy into mag seven.
Speaker 2 (08:44):
Da da da da da. Folks, these are just opinions here.
Speaker 3 (08:47):
Now, do you sense a point where there is a
shift to people finding value in the coupon versus the
game of equities?
Speaker 6 (08:56):
Yeah, we do. We see a lot of investors who
have just gotten very cautious because of the volatility in
the equity market and they have and the concern about
all these policies and not knowing where it goes. So
we have seen people shifting more into fixed income, clipping
the coupon, reducing some of the volatility and risk in
(09:17):
the portfolio.
Speaker 5 (09:19):
So again to my Federal Reserve, they can just sit
on their hands for there a while. Now it seems like.
Speaker 6 (09:25):
Yeah, it looks like that's the name of the game.
They sit on their hands for a while. Maybe September,
wait and see if unemployment goes up. I mean that's
going to be They've talked about the dual mandate a lot,
and that's going to be the driver.
Speaker 5 (09:37):
I think undergraduate from Northwestern and an NBA from Northwestern.
There are other schools out.
Speaker 6 (09:43):
There, you now, I mean, yes, I know, but I'm
on Midwestern A.
Speaker 2 (09:50):
I've never asked you this. Did you study with Robert Gordon?
Speaker 6 (09:53):
Yes?
Speaker 3 (09:54):
Tell our audience, folks, we more in Stanley Fisher. The
giant of midw growth economics was Robert Gordon. Massive influence.
Good morning, Jim Glass and formerly with JP Morgan out
on the left coast. Tell me about being in a
classroom with the great Midwest growth economist.
Speaker 6 (10:14):
Yeah, he was a fantastic professor, so smart and so nice.
Speaker 3 (10:19):
He believed in the manufacturing process. Did he believe that
manufacturing was different and it created a multiplier of jobs,
just different than all these other service sector Bologney jobs
like what Paul and I do me.
Speaker 6 (10:34):
Yeah, No, I think he did believe in that. You remember,
you know, growing up in the Midwest, the rust belt
and all that, and I think he had a real
affinity for that and felt that the widening of the
trade deficit. The loss of those jobs which were right
producing solid middle class incomes was a big problem.
Speaker 3 (10:52):
We'll touch on this today, Kathy Joes, thank you so
much for those comments, Professor Gordon. With the death the
passing of Stanley a fisherman, we'll find some other people
in the coming days to speak to, honest.
Speaker 1 (11:04):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Applecarplay and Android Auto
with the Bloomberg Business App. You can also listen live
on Amazon Alexa from our flagship New York station, Just
say Alexa Play Bloomberg eleven thirty.
Speaker 3 (11:21):
Joining us justin di you are this morning is Maya
McGuinness Committee for Responsible Federal Budget. We're thrilled Mia mckindness,
really an authority on the mess we're in, could join
us here. Maya. The critics of your world say CBO
is too gloomy in their growth, and that we will
(11:42):
continue to grow our way out of this mess, or
at least sustain it.
Speaker 2 (11:47):
Do you buy it?
Speaker 8 (11:50):
Yeah, there's a lot of CBO bashing going on these days. No, certainly,
I wish it were true. I think everyone wishes that
you could cut taxes and that would unleash such huge
growth that it would fix our fiscal problems. But clearly
that's not the case. There are a number of outside
estimators who are looking at the tax bill, the reconciliation bill,
and trying to figure out what the effects on economic
(12:11):
growth would be.
Speaker 9 (12:12):
And here's the way it works.
Speaker 8 (12:14):
Tax cuts have positive effects on growth, but not enough
to generate enough revenues that they offset all of the
loss from the tax cuts themselves, usually about twenty percent.
The problem is that this tax bill in particular isn't
as pro growth as what we saw in twenty seventeen
the corporate tax rate cuts.
Speaker 9 (12:33):
Those were very pro growth.
Speaker 8 (12:34):
This less so chops up the tax base in a
lot of ways, and our debt is now so large
that the negative effects of that even outweigh those positive
effects of tax cuts. So the bashing is just like
angry parents yelling at the ref.
Speaker 3 (12:49):
I love that sounds like my weekend.
Speaker 2 (12:52):
Maa McGuinness.
Speaker 3 (12:53):
Henrietta Trees was with us, And the basic idea is
we dashed to the Senate for the big, beautiful bill,
that there will be moderate Republicans out there to save
the budget. Day does that beast exist or are they prehistoric?
And they off the room.
Speaker 8 (13:10):
Yeah, no, I wish that's how I thought it were
going to play out. I'm worried because I think the
moderate Republicans, just like we saw in the House, may
actually be pushing to make the bill worse. So the
bill has a tax cuts and the medium spending cuts,
and what you're seeing from the moderates is they're more
concerned about fewer spending cuts than more fiscal responsibility. And
(13:31):
then on the very conservative side, where you have people
who are willing to do the spending cuts you would need,
they also are more prone to believe the myths of
the fairy tale that growth can fix everything and you
don't have to make any structural changes. So the problem
is nobody makes hard choices in the budget anymore. We
can do tax Right's stop.
Speaker 3 (13:50):
Paul wants to get in here, But I'm going to
ask the rude question, by what did God's name happened
in Washington? Where is the adultness of this debate?
Speaker 8 (14:00):
You know what killed adultness? I think partisan polarization. We
are so much more focused on Republican versus Democratic preferences
than we are How you fix the country. It's not
just fiscal we're not fixing any of the big problems
where there's anything you actually have to do, because the
political calculation of don't let that other side have a
(14:21):
win is outweighing the calculations of compromise and country first.
And I'm deeply concerned about it. Just like polarizations undermining
everything are weak fiscal positions keeping us from being prepared
for the AI race we're in. Then you need to
fix our social contract, global national security issues that are
riskier than they used to be, all of these things.
(14:41):
I think our polarization is put so much stand in
the wheels. We're not getting anything done, and that's not
allowing the adults to come forward. They exist behind closed doors.
They're talking about it, but politically it's not rewarded right
now in this populist and polarized moment, and we got
to figure out a fix for that.
Speaker 5 (14:59):
I've been in this market sas nineteen eighty six. Nobody
cares about deficits in a national debt. Why should we
real estate?
Speaker 8 (15:06):
Well, you know, the bond market is starting to be
a bit of a reminder. We actually are hearing so
many more reminders.
Speaker 9 (15:12):
I'm with you.
Speaker 8 (15:12):
It's been just deafening in terms of people being concerned
about it other than those of us who work on
this all the time for the past years. But you're
hearing many more concerns right now, with warnings, with downgrades,
with problems in the bond markets, with other countries looking
at the US debt and thinking this isn't as great
a this isn't as sure thing as it used to be.
We have the reserve currency where the safe haven. The
(15:35):
central Bank did a lot that kept rates down for
a long time. Many of these trends could gradually be shifting.
And the whole point is we should not wait to
find out if and when we get ourselves into trouble.
We should fix the situation where we still have all
of those privileges.
Speaker 5 (15:50):
And it's much easier to do so as long as
people keep showing up at our debt auctions. Maya we
don't have a problem. What do you say to those folks?
Speaker 8 (15:58):
Yeah, I say that those folks made that argument, and
as a result, we borrowed more when interest rates were low.
We now have trillions more in debt, and just small
increases in interest rates have huge impacts on our interest
payments as a result, which is why it's the largest
growing part of the budget, the second line item in
the budget. Those interest payments are much more possible to
(16:19):
changing interest rates because of the arguments. Don't worry, be happy,
keep borrowing. We shouldn't have done it then and we
shouldn't now.
Speaker 3 (16:25):
My don't be a stranger. We got to get you
on he or somehow. This is going to get worser
through this summer. And articulate as always with the Committee
for a Responsible Federal Budget. Brilliant work, Miami Guinness.
Speaker 1 (16:40):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Apple Cockplay and Android
Auto with the Bloomberg Business app. You can also watch
us live every weekday on YouTube and always on the
Bloomberg Terminal.
Speaker 3 (16:55):
Billion years ago, I decided I wouldn't learn Senate parliamentarian rules.
Paul good idea. It's just like the only one that
ever nailed this was Robert bird Well.
Speaker 2 (17:06):
I don't know we have of the Virginia. I mean,
Henrietta Trace is in studio now to explain.
Speaker 3 (17:13):
Henrietta. I thought a quiet weekend for our elected officials.
They're all pondering what's next for the Senate. Is they
look at a big, beautiful bill the parliamentary the procedure
of it, Will it be smooth?
Speaker 2 (17:29):
Yeah?
Speaker 7 (17:29):
The parliamentarian is one of my favorite jobs for sure,
So I will take on that burden for you because
I think it's a blast.
Speaker 9 (17:37):
The Senators are about to come in hot.
Speaker 7 (17:39):
It is all eyes on them for the next four
to six weeks, and they have trillions of dollars literally
with taxes, the medicaid cuts, all the various.
Speaker 9 (17:53):
Sanctions packages, and the tariff bills.
Speaker 7 (17:55):
All these pieces are before them right now and all
eyes are going to be on them.
Speaker 9 (17:58):
The parliamentarian is going to be very busy, as you know.
Speaker 7 (18:01):
The Democrats and the Republicans get an opportunity to go
before her and explain what it is they'd like to
see taken out this bill. It's really a game of
who knows the rule is the best who's the best
player right now? And that really makes million dollar difference,
billions of dollars difference thirteen years.
Speaker 3 (18:17):
Elizabeth McDonough m ACD. Elizabeth McDonough is the most powerful
person in America. Who's that she's a parliamentary. It's like
Alice at Wonderland. I mean, they have to go in
front of her, Henrietta.
Speaker 5 (18:32):
Are we going to hear from the Democrats ever in
this congress? Here, it's such a time for the Democrats
to make themselves useful at all.
Speaker 9 (18:42):
I mean, it would be about time.
Speaker 7 (18:44):
I continues to be shocked at how absent Democrats are.
I mean, Republicans are putting taxes on cans of beer?
How is that not an immediate talking point? But here
we have over the weekend, Majority Minority Leader Schumer sending
a letter to his college saying, hey, y'all, it's time
to get in the game. And as you point out,
Elizabeth McDonough has been in the Senate since the nineteen
(19:05):
nineties and has worked for some really esteemed folks and
is now going to be the key arbiter or Democrats
are going to go in there and say X, Y
and Z is not permissible. Strike it from the bill,
and that's going to hit the tax plans of the
Republican Conference. One of the reasons that the bill has
to get more expensive and that even more to the deficit,
(19:25):
is because it doesn't have an economic impact by using
the current policy baseline, which is the strategy that Senate
Republicans are going to use, which will effectively write off
three point eight trillion dollars worth of this package and
say the cost is zero. You cannot pass legislation through
reconciliation instructions unless it has a budget impact, So they
kind of shoot themselves in the foot here. You get
(19:46):
three point eight trillion dollars in free money, but it's
not permissible under reconciliation. So that's going to be one
of the core things that Democrats try to go off
the works with with the parliamentarian and Leader Thoon. And
it's about time DEM's getting the game. So yeah, I
would be watching both for that.
Speaker 5 (20:01):
Who is a Democratic voice? Would you say? Is it
Senator Chuck Schumer or is there somebody else in Democratic
Party that I don't know? Maybe they're looking to step
up here.
Speaker 7 (20:11):
I mean, I think the Democratic Party is at war
with itself, trying to figure out if mckem Jeffries is
the kind of speaker or minority leader that Nancy Pelosi
could be or was. Certainly that's shown some lacking components.
Speaker 9 (20:24):
At a minimum.
Speaker 7 (20:25):
The party over there on the House side is warring
between the young folks and the older folks, and they
can't get a clearance or on committee chairs and on
the Senate side, they're struggling just to have relevance or
find a message.
Speaker 9 (20:36):
As I mentioned, I don't think it's too hard to
come up.
Speaker 7 (20:38):
With a message against tariffs and taxes on really obvious
things like back fool items.
Speaker 9 (20:42):
But they're nowhere. They have a lot of work to do.
Speaker 3 (20:45):
What do we not understand about the impact of the
president and a new fifty percent tariff on quote unquote steel?
What's the hendriy Ott of Trey's insight there.
Speaker 7 (20:55):
What's fascinating to me about that is that Lutnik and
Bessent and Greer keep throwing the same playbook at all
of these tariff actions that the President obviously wants.
Speaker 9 (21:04):
So the one I'm really ruminating on today is.
Speaker 7 (21:06):
This idea that Secretary Besson has trotted out that he
and President She are going to get on the phone
this week.
Speaker 9 (21:12):
That seems very unlikely. But also what is that going
to resolve? They spoke on the phone four months ago.
Speaker 7 (21:16):
And now we see hundreds of billions of dollars worth
of goods tariffed at you know, at some points one
hundred and forty five percent coming in from China. So
they have this playbook that's like, get Trump involved, but
then also make sure he's not involved, because we don't
know if we're going to get fifty percent tyres on
steel overnight.
Speaker 2 (21:32):
Henriette a hugely valuable.
Speaker 3 (21:34):
The Surveillance Parliamentarium will send you a fruit masket.
Speaker 2 (21:39):
We really appreciate it. Henrietta Trey's Vada Partners.
Speaker 1 (21:42):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Apple, Cocklay and Android
Auto with the Bloomberg Business app. You can also listen
live on Amazon Alexa from our flagship New York station.
Just say Alexa, play Bloomberg eleven thirty.
Speaker 3 (21:59):
The newspaper make me smile, Lisa, I will try my best.
Speaker 5 (22:02):
Okay.
Speaker 10 (22:02):
So this one's in the Wall Street Journal. If you
take a look at it, the headline is how much
of the world's richest men get paid? Right, So we're
talking about Elon Musk. Tesla has to decide, no, not
at all. Tesla has to decide right how much to
pay him. He's commanding this bigger steak. So he's actually
the lowest paid chief executive of an S and P
five hundred company. Last year, Tesla paid him zero because
(22:24):
of that legal battle. Right, so he's been back and
forth over this big stock award back in twenty eighteen.
So they go through basically how much different founder CEOs make,
Like the Wall Street Journal they ranked it and they
said the top one makes about one hundred and sixty
five million. But then you go to metas Mark Zuckerberg,
you made twenty seven million last year. Michael Dell got
three point one million, mostly cash. So they say they
(22:48):
go through a couple options like well, what do you do?
How do you approach this?
Speaker 5 (22:51):
Right?
Speaker 10 (22:51):
So they say you either make him show up and
go big, you pay him like a CEO, or you
pay him like everyone else. So this is the big
struggle that Tesla has to deal with coming up. But
it's it's a lot of the company world.
Speaker 5 (23:03):
Is richest person, correct, correct? Okay, I just want to
make sure I can.
Speaker 3 (23:07):
I just say to take an issue that they include
stock awards is compensation because if the stock goes down,
there's not much compensation.
Speaker 2 (23:16):
You know, there's a risk.
Speaker 5 (23:17):
To it, right, and that's always because it ties aps
growth or market whatever.
Speaker 2 (23:23):
They can The critics would say they rigid.
Speaker 10 (23:27):
Right the world's riches, Okay, to make sure you have that. Okay, Yeah,
so this one too. It's talking about Meta how they
want to fully automate ads using AI. So advertising makes
up the bulk of Meta's business, right, So Meta, their
ad platform already has a couple AI tools. But the
debate behind all this is that some brands worry that
(23:49):
these AI generated ads they won't match the human made
quality because it's not being made by human it's being
made by you know, a computer. But but smaller businesses say,
you know, we could benefit because it just makes it
easier for us to create the ads. So that's a
battle going on AI for the creative correct to create it,
(24:12):
to greet it. Basically, you just punching what you want
and you know the video comes up. So I will
help them do that, but you know it's a I
use it for checking quick thing, but I always have
to fact check it. But I have seen a lot
of these, like the Wall Street Journal did this and
they made like an entire movie trailer just AI like
you see this, and how they're able to do that
(24:33):
and make you sit back and why.
Speaker 3 (24:34):
When I started using it this weekend and it's it's
it's it's you know, I'm sure I'm way behind everyone else.
It's like, wow, do one what else it is?
Speaker 10 (24:43):
Okay, have you been to let's say, like a casual
dining place lately, like an outback steakhouse or an Applebee's
or anything like that. So these casual dining places, they're
starting to attract more gen Z customers. And the reason
why is because gen Z actually says they like going
back to the whole family, you know, sit down dinner.
(25:05):
It's more stable. It's tough economic time, so they like
that instead of going to like the fast casual, you know,
going to like a Kava or like a Chipotle. You know,
as far as you know, what's more economically friendly to
So just trying to figure that out. They say that
they enjoy going to like the sit down place. They
want to talk to people. Gen Z wants to sit
down and have conversation.
Speaker 7 (25:29):
I don't know.
Speaker 2 (25:30):
Can I report on the instaurant quality. We had the
after prom party this weekend and it was catered.
Speaker 3 (25:37):
By LaBelle to Talk. I'm pleased to tell you that
the taco bell salsa sauce, it was ground beautifully into
the Chinese oriental carpet. I mean the way that somebody
got there stillttly right into it and got that salsa
sauce right in there.
Speaker 5 (25:55):
Did it come with the margaritas?
Speaker 2 (25:56):
Though, no, it did not come with the margharitas. That's
thank you. I would be in trouble if it had
come with the markert read as well.
Speaker 3 (26:04):
Lisa Mateo, the newspapers, thank you so much.
Speaker 1 (26:08):
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 Eastern on Bloomberg dot com, the
iHeartRadio app, tune In, and the Bloomberg Business app. You
can also watch us live every weekday on YouTube and
(26:28):
always on the Bloomberg terminal
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