August 8, 2025 • 32 mins
Watch Tom and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg Surveillance hosted by Tom Keene & Paul SweeneyAugust 8th, 2025
Featuring:
1) Ian Lyngen, Head of US Rates at BMO Capital Markets, talks about the 2-year and 10-year yield paths amid economic weakening and the outlook for rate cuts. A gauge of the dollar was was flat and Treasury yields were little changed after Thursday’s a weak sale of 30-year debt signaled waning appetite for US debt.
2) Larry McDonald, founder at the Bear Traps Report, joins to talk about how the bond market is pricing in recent tariff and economic policies out of the Trump admin and speculates how President Trump could reshape the Fed and its impact on markets. The S&P 500 is near a record high following a 30% surge from its April lows, supported by robust corporate earnings and hopes the Federal Reserve will cut interest rates to support the economy.
3) Dan Tannebaum, Partner and Global Anti-Financial Crime Practice Leader at Oliver Wyman, talks about the Trump admin's approach to the war in Ukraine and how global economies are managing US tariffs. President Trump said he’d be willing to meet with Vladimir Putin, even if Putin hadn’t yet agreed to also sit down with Ukrainian President Volodymyr Zelenskiy. Trump told reporters he was “very disappointed” with Putin’s behavior and left open the possibility of additional penalties over the war in Ukraine as soon as Friday.
4) Stefanie Stantcheva, Economist at Harvard University, talks about how "zero-sum thinking" is reshaping economics and how a rearing back of inflation could further weigh on American consumers.
5) Lisa Mateo joins with the latest headlines in newspapers across the US, including a WSJ story on doctors warning about "AI psychosis" and a Business Insider story on how TikTok users are booking hotels.
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):
Joining us now from BAMA from Bank of Montreal, BEMA
Capital Markets. The acclaim Ian Lincoln the summer You're Ian
is the following We've got a data and a deficit
and we're in love with T bills. What's the Lincoln
radar say about an executive branch that says the solution
is a record number of T bill issuance.
Speaker 3 (00:51):
Frankly, I think that we're at the point where the market,
at least for now, can easily absorb an increase in
T bill issuance. The risk is that they oversaturate the
front end of the market, and there are many in
the market that believe that the rise of stable coin
and demand from that sector is going to create excess
demand and absorb that the bills in twenty twenty six
(01:13):
and beyond. That's not so clear to me, but I
think that the Treasure Department is going to find out
soon enough.
Speaker 4 (01:18):
Here's a sentence without math.
Speaker 2 (01:20):
One of the key debates in the market at the moment, Damien,
is whether Trump's tariffs will trigger one time price adjustments
or persistent inflation.
Speaker 4 (01:29):
So continue with the and.
Speaker 5 (01:30):
Lincoln, Well, I think all three parties take God, we'll
talk about that later. And I got you and I
have limited time here. I mean, futures are pricing in
ninety one percent probability of a twenty five big cut
in September. Can it be fifty? And what would make it?
What would meet that they'd go there?
Speaker 3 (01:44):
I think it could be fifty. Again, not our base case.
But if you get a disastrous payrolls print for the
month of August and two benign CPI prints, the market
will start talking about fifty basis points.
Speaker 5 (01:55):
Well, I mean, but then are we really going to
see a pullback? And consumption? Come on now? I mean
DP growth, I mean better than expected globally for the
first half of this year, you know, I mean talk
to talk to me about the trade up between a
weaker labor market and resilient income growth here in the US.
Speaker 3 (02:11):
So we have seen a easing of demand in terms
of personal consumption in real terms over the course of
Q one and Q two. That's in the data. But
what we haven't seen is we haven't seen it completely
stall out. And frankly, if the Fed cuts fifty or
twenty five in September, the equity market will respond well
and that will reinforce the wealth effect, which could certainly
(02:33):
help keep the consumer going.
Speaker 2 (02:35):
Damien, and of twenty twenty three thirty or mortgage eight percent, yeah,
we're now down to six point seven eight percent.
Speaker 4 (02:41):
Do you anser your great question to Ian?
Speaker 2 (02:44):
If we get a fifty beeps, whether it's one to whatever,
I mean, it's got to save the housing market, right.
Speaker 5 (02:50):
I mean?
Speaker 1 (02:50):
Yeah?
Speaker 5 (02:51):
And Ian, I mean, I mean can this curve steepen
even more from where we are? I mean, I think
you look at fives thirties, we're up what sixty BIPs
here to date? I think two tens, it's something like
twenty plus here to day. I mean, just how much
steeper can this curve go?
Speaker 3 (03:04):
So once the Fed starts cutting, the market will price
in even more rate cuts in twenty twenty six and
twenty twenty seven, and so the two year sector will rally,
so you get a steeper curve that way. I don't
think ten and thirty year yields are going to back
up materially from current levels, so you can still get
a steepener with a front end rally. As far as
mortgage rates dropping in line with each incremental quarter point cut,
(03:27):
good luck. The mortgage market hasn't been functioning that way,
and so I don't think that rate cuts will solve
the housing market. The housing market has a supply problem
as much as it does a rate problem.
Speaker 2 (03:38):
Fascinating on an eventful Friday, not boring, to say the least.
Damien Sassaur with Ian Lingoln of BEMO Capital Markets.
Speaker 5 (03:47):
And talk to us about the runway for continued dollar weakness.
Is this really the end of king dollar? I mean,
how much lower can euro dollar go here?
Speaker 4 (03:55):
Well?
Speaker 5 (03:56):
Can the dollar go here?
Speaker 3 (03:58):
Well to a largest It depends on how successful the
administration is in balancing trade, because if we actually have
a balanced trade deficit, then there won't be as many
dollars going out into the global economy to be recycled
back into treasuries at the end of the day. I
do think that the dollar will remain the reserve currency,
and if that's the case, there'll be a stabilization at
(04:22):
some stage but I'm very hesitant about wanting to go
aggressively long the dollar given all of the credibility issues.
Speaker 5 (04:30):
But way, look, it yields here in the US to
relative to the rest of the world. I mean they're high,
you know. And the carry trade works. I mean, it's
still working this year, despite what anybody else would have
told you coming into twenty twenty five. I mean the
carry trade works. And I mean you're not funding in
dollars anymore, are you.
Speaker 3 (04:47):
Yeah, that's a fair point. The carry trade works, but
it only works as long as, as you point out,
rates are relatively high. When the Fed starts cutting rates,
that should put downside pressure on the dollar, not upside pressure.
And the question becomes how much of that is priced in?
And I think not enough.
Speaker 2 (05:03):
You're pushing against in the panic of price down, yield
up and say the ten year piece, even the seven
year as well. Do you still stick with a vector
of lower yields out eighteen months?
Speaker 3 (05:19):
Yeah, our year in call for tins is still three
eighty five. Well, I think by eighteen months from now
we could be closer to three fifty three twenty five.
Speaker 2 (05:29):
And the time I got left with you, mister lingol
and I want to talk about Canada. You've got a
pooling of research at the Bank of Montreal. For those
of you folks are even one hundred and fifty years ago,
Bank of Montreal was sort of like the Bank of
England of Canada and Ian Lincoln with all of your
research capabilities, give us a BMO update on the impact
(05:52):
of Trump tariffs on mister Kearney and your Canada.
Speaker 3 (05:57):
So it hasn't been good in terms of what the
tariffs mean for the Canadian economy. We've already seen the
Bank of Canada respond, would expect more. There's a lot
of uncertainty and I think at the end of the day,
the relationship between Canada and the US will weather the storm,
but it has been recast in a material way because
of Trump's trade war.
Speaker 4 (06:18):
Ailing and thank you so much to Female Capital. Martin two.
Speaker 1 (06:26):
You're listening to the Bloomberg Surveillance podcast. Catch us live
weekday afternoons from seven to ten am Eastern Listen on
Applecarplay and Android Otto with the Bloomberg Business app, or
watch US live on YouTube.
Speaker 4 (06:38):
Joining us now is people and my people.
Speaker 2 (06:40):
I'm going to argue in for months about trying to
get him in your Lawrence McDonald joins us he made
waves years ago, a colossal failure of common sense.
Speaker 4 (06:49):
That was my biography, How to listen.
Speaker 2 (06:51):
To Americans speak as the latest effort. Larry McDonald in
the studio today. Great to have you here, and I
want to go right to where Damien was. You had
my essay of the Year two years ago where you
walk through in about twelve paragraphs the wall of money
that's out there.
Speaker 4 (07:10):
It hasn't changed, has it.
Speaker 6 (07:13):
Well, you know what's fascinating Tom. In the last two
to three weeks. The rrp's coming down again and we
don't have that release valve that we've normally have had.
So in the last couple of weeks something has changed
a little bit because that's the liquidity really, juggernaut is
(07:33):
the RP. That's been the case.
Speaker 4 (07:35):
For a long se r RP.
Speaker 6 (07:36):
For Lisa Miteo the offensive a reverse repo facility.
Speaker 5 (07:40):
Oh good, And so I.
Speaker 4 (07:41):
Have no idea what that is, Lisa, So stay with it.
Speaker 5 (07:43):
So it's McDonald, it's going to go with it.
Speaker 6 (07:46):
But you know, as a former Lehman trader, I just
want to say, I tell my wife wants some money
if we sell a million books will break even on
our Lehman stock.
Speaker 5 (07:53):
Right, that's good, Yeah, thank you.
Speaker 6 (07:56):
But but to get back to liquidity and Lehman and
what's happened now, this is you're gonna love this time.
We did an ideas dinner in San Francisco two weeks
ago and I was with some of the big family
CIOs that run money for them in the valley, for
the big AI type players, and what they said was,
you know, when academics look at liquidity, they look at
(08:18):
the RP. The guys in the valley that are tracking momentum,
they track meticulously these fifteen verticals of tertiary assets versus
versus established. All that means in English is say arc
stocks versus the queues, or say companies with ten billion
market caps and no sales. That's another one.
Speaker 2 (08:40):
Right, is the money gonna move? The wall of money
that you identified, is it going to move?
Speaker 6 (08:45):
Okay, So this gets back to my point. The tertiary
assets the last ten days have been starting to underperform
established solana versus bitcoin. So that tells you the wall
of money is receding, and it also lines up with
the decline in the So something's going on. Liquidity is
drying up to some extent. This is just the genesis
(09:06):
of it.
Speaker 5 (09:06):
Well, Larry, I'd love to ask you what wine they
were serving at that dinner with all the Silicon Valley types.
But you know we're not gonna talk about California Cats.
Total assets at the four world's four largest central banks.
I'm talking the FED, the ECB, the BOJ and the
PBOC has been in decline since March of twenty twenty two,
when the Feds first started raising rates. But that seems
to be declining. I just put out of deck this morning.
I have a great shart in them. Yeah, toot my
(09:28):
own horn here. But it looks like central bank boundaries
are going to start expanding yet again. Is that a
good thing or a bad thing? Oh my god, sorry, Softball.
Speaker 6 (09:38):
It's going to be a good It'll be a good
thing if we're in a crisis, right, it'll be a
bad thing if if if we're at this point in
the cycle, it's going to reaccelerate inflation.
Speaker 2 (09:46):
Larry, this is a good point then, folks. It's the
Bear Trapp Report. You can get it from mister McDonald's people.
He doesn't talk to anybody by appointment.
Speaker 4 (09:55):
Larry, are we in a crisis.
Speaker 6 (09:59):
We're in a We're in a situation where we're going
to have a reacceleration of inflation and that's going to
create a crisis.
Speaker 4 (10:06):
Mister Sas.
Speaker 5 (10:07):
Yeah, FX reserves and central banks, let's talk about that.
We want to get into a plumbing of these markets, right.
I mean, it seems that you know, reserve levels at
least you look at China obviously, but broadly speaking, it
looks like central banks outside of the US they don't
need to hold US treasuries anymore. I mean, what else
where do they go? What do they I mean, is
there no demand for liquid you know, cash like assets
from central banks anymore? Is that the climbing?
Speaker 6 (10:28):
Yes, and so we have less friends in the world.
That's why the Cent has been out there with the
bag of tricks. So when you talk to we have
a business on Bloomberg, a Bloomberg chat with some of
the largest hedge funds in the world. One of the
things I've been talking about in the last six weeks
is the Cents bag of tricks, where they're using a
number of new facilities to try to replace foreign treasury
(10:52):
buying because.
Speaker 5 (10:53):
What of their facilities look like like what else is
there gold?
Speaker 6 (10:56):
Well, you know, using forcing the banks to buy more
treasuries one, that's just to keep it simple. But when
you force the banks to buy more treasuries than that,
in essence, that's financial repression and the only way out
of a thirty seven This is what we talked about
in our book how to Listen to market Speak. The
only way out of a thirty seven trillion dollar debth
hole is massage interest rates below the rate of inflation.
(11:18):
Financial repression. That's very bullish for hard assets. That's why gold, bitcoin,
and platinum pladium are starting to outperform.
Speaker 4 (11:25):
The silver miners. Tom The silver miners.
Speaker 6 (11:27):
Are up sixty two percent this year versus the fangs
are only up five hard assets versus financials stock market up.
Speaker 2 (11:35):
I mean, it's a grind higher, but it's a constructive grind,
and you know, earning season, they're delivering the goods, but
it's like twelve stocks are getting done and the rest
are flat on their back. Our listeners that they're not
as esoteric as SaaS Hour or you our listeners and
viewers are. They're just like, okay, into the weekend, What
God's name do I do with my four oh one
(11:57):
k speak.
Speaker 6 (11:58):
Okay, First of all, if you look at the Bloomberg terminal,
which I do twenty times a day, volatility in August
in September seasonally it's a trouble spot. You want to
be raising cash into very for volatility. Probably the worst
or I guess the best month of the year for
(12:19):
is the Vicks in August, right the second best might
be September. So for people listening to us right now,
that's when you want to raise cash and you want
to put money to work when there's real fear like
we had in April and last August.
Speaker 5 (12:31):
Last August we had a.
Speaker 6 (12:33):
Very meaningful drawdown, and so you want to have raise
cash and be there for the pain.
Speaker 5 (12:37):
How do you build balance and fixed and come portfolios today?
I mean if no one's buying treasuries, and I mean,
let's be clear, if you look at em local debt
for example, which is you know, you know it should
be yielding way over US treasury, it's only one hundred
and eighty three BIPs over.
Speaker 7 (12:49):
I don't know that.
Speaker 5 (12:50):
No, it's almost have one of its tightest done record.
And so I mean if you look at em US
ten year, you spreads. I mean fourteen of eighteen fourteen
of eighteen countries are well below the three or average.
So I mean, just thinking out loud here, what else
do you buy?
Speaker 2 (13:03):
Right?
Speaker 6 (13:04):
The EMLC, the Emerging Market Local Currency bond fund is
outperforming the TLT Treasury Fund in a one year, three year,
and five year bucket air we got. And that's that
weakness in the dollar we've seen this year.
Speaker 4 (13:17):
I'm almost out of time.
Speaker 2 (13:18):
Your charm is you have an optimism about the American system.
People say, always gloomy in that and it's a Friday
gloom crew, except you believe in the system. Okay, what
do we do after Trump? What does our financial system
do after the day to day shocks that we receive
from President Trump?
Speaker 6 (13:36):
So that's what we talk about in our book, Tom,
We're talking about a whole new portfolio construction. People have
to get along in nineteen sixty eight to eighty one
type portfolio where your long companies that own assets. You're
all kinds of metals, copper copper companies. Right now, the
COPX is in the perfect spot. Globally, we're undersupplied. The
(13:59):
artificial intelligen's boom, Tom, we have a power grid in
the United States that needs a two trillion dollar rebuild,
all of these growth assumption shumpsons.
Speaker 4 (14:07):
Can you seven this morning? Can you kill?
Speaker 6 (14:10):
But I want to own the COPX because that's going
to give you the power to fund AI.
Speaker 2 (14:16):
I know you sold the movie rights to the latest book, DiCaprio.
Speaker 4 (14:20):
Is that what we're looking for?
Speaker 6 (14:23):
Well, you know, the latest book right now number number
within the top three on Amazon right now. How to
listen when market speak top three again. By the way,
I'm really proud to I've got two books right now,
Larry McDonald, two books in the top forty.
Speaker 4 (14:36):
Okay, let's good.
Speaker 2 (14:36):
Lisa Motel's books number one and Glenden Free Breakfast. Lawrence McDonald,
thank you so much.
Speaker 1 (14:42):
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 Bloomberg reporting.
Speaker 2 (15:00):
Trump Putin meeting in the next few days. Russia and
US agreed on the place for a potential meeting between
the presidents but won't announce it yet. We're here to
break news. They'll be holding that at dan Tanabaum summer place.
Speaker 4 (15:15):
He joins us.
Speaker 2 (15:15):
Now from Oliver Wyman, Dan, you're sort an expert on this,
I mean at Oliver Wyman, between you and Hugh von
steinas it's shocking expertise about inside baseball between the United
States and Russia. What's your observation it would be the
best thing for mister Trump to bring up.
Speaker 7 (15:38):
Well, firstly, Tom and we haven't planned for the meeting
here yet. There isn't really a good reason to even
have this summit. Let's remember there's been threat after threat
that President Trump has made towards the Russian government, towards
President Putin, decease hostilities, to work towards the ceasefire. They
haven't done any of that. Today day was actually supposed
(16:01):
to be a day where the President was to announce sanctions,
which you know, by my account, there have been zero
designations by the US government with respect to Russia since
Trump has taken office again. So to give this summit
with Putin in the first place sends really the wrong
message because Russia hasn't done anything favorably towards ending the conflict.
Speaker 4 (16:21):
Do we have leverage?
Speaker 7 (16:23):
We absolutely do. I mean, it is ironic that the
President has done more to hurt the Swiss economy than
the Russian economy the last six months.
Speaker 4 (16:32):
There absolutely is leverage.
Speaker 7 (16:33):
The focus on India, for instance, in trying to get
them to stop purchasing Russian oil by using tariffs, which
really will enrich the US at the cost of Ukraine.
There's primary and secondary sanctions that could be used on
Indian entities to essentially threaten to cut them off from
access to the US economy, a far greater threat if
the objective is to get them to stop buying Russian oil.
Speaker 4 (16:55):
So the leverage is there.
Speaker 7 (16:56):
The President hasn't done anything yet.
Speaker 5 (16:59):
Dan, And part of the press and strategy was to
increase domestic manufacturing here at home. We know that Oliver
Wyman one of the most successful management consulting firms here
in the US. And then I see your note and
I look at this word and the quotes Empanada. Everyone
makes promises and never actually does anything. Is that what
you're telling clients right now? And Panada, I'm.
Speaker 4 (17:20):
Not telling them.
Speaker 7 (17:21):
Another media outlet had actually coined that the other day
but love I think about it, some of the scale
of these announcements of investment in the US are fairly high.
You haven't seen anyone really moving on some of these
committed investments thus far, and from what we've seen going
back to the first Trump term, no one's really validating
(17:42):
that these investments have been made good on. So it
does seem like some of my clients in an attempt
to curry favor, to stay out of negative focus of
the administration or announcing deals. They may be serious about them,
but when you see hundred six hundred billion dollar investments
over however long a time horizon, I'm not since the
(18:04):
companies are going to make good on all of these.
Speaker 2 (18:06):
This is sakermer Commune Tokyo for Bloomberg folks. The Prime
Minister of Japan is hoping to stay on as calls
grow for him to exit, and part of it is
because of the deal we did with Japan that's not
in writing and open to completely polarized interpretation.
Speaker 7 (18:27):
I mean, that's what it challenge. We have frameworks, we
don't have specifics. Even on the tariff strategy, there's a
forty percent tariff on transhipped goods. There's no guidance out
of the US government on what even constitutes transhipt goods.
So you take all of these together, there's still a
ton of uncertainty for my clients, for the market on
what actually will be moving forward. And we've seen there's
(18:50):
a tendency to pull some of these deals away to
readdress them going forward. So there's not really smooth air
that companies are seeing.
Speaker 5 (18:57):
So Dan, I mean, then, but then correctly if I'm wrong.
I mean this effective tax rate that everybody's talking about
fifteen percent, sixteen to twenty percent, you know, I mean,
how are people coming up and actually calculating that with
any confidence? Is it a range in your mind? I mean,
is it fifteen to twenty? Is a ten to fifteen?
How do you look at things?
Speaker 7 (19:13):
I mean, that is the challenge is the movement is
so great that trying to take a look at some
of what this go forward taxes look like is complicated.
What I'm looking at, probably more closely, are the losses
that businesses in the US have been announcing in their
earnings over the last few weeks, because that seems to
be a bit more real as at least a looking
(19:35):
backwards issue to try and go where ultimately companies can
try and recoup some of these losses going forward in
the form of price increases.
Speaker 2 (19:44):
Dan, if you do have the Trump Putin meeting at
your summer place, I would suggest a liquor manifest that I.
Speaker 4 (19:50):
Saw Churchill had at Yalta. I think that would be
some that would smooth things.
Speaker 5 (19:55):
Hault. Sure.
Speaker 7 (19:56):
I mean I don't have diet coke here and can't
took a well done Hamburger, so I'm not sure what
my abilities would be to host.
Speaker 2 (20:05):
Dan. Thank you so us d'antanobaum and Oliver Wyman with
you Von Steins So just great, great perspective there.
Speaker 1 (20:17):
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 watch us
live every weekday on YouTube and always on the Bloomberg Terminal.
Speaker 2 (20:31):
Arguably my academic paper of the summer, even though it
came out two years ago, joining us now from Harvard
with all of the recent acclaim of the John Bates
Clerk Awards. Stephanie Stansheva, her expertise in the taxation economics,
her social Economics lab and Stephanie this paper, which I
(20:51):
absolutely adore with non Chanoy and Sequera is zero some
thinking in the roots of US political differences. This goes
to a static analysis analysis. It goes to almost a
mercantilis thinking, and an eye for an eye, a.
Speaker 4 (21:09):
Tooth for a tooth.
Speaker 2 (21:10):
How do we get beyond our new vogue of zero
sum thinking.
Speaker 8 (21:17):
That's a great question, and indeed you're right to point
out that what we show in the paper is that
this zero sum mentality, this feeling that if you get more,
this means I must be getting less. You know that
we live in a world which is a fixed pie.
So someone gets a larger slice of the pie, someone
else must be getting a smaller one. This mindset has
actually been increasing. You can see it in the US
(21:40):
in the fact that younger generations today are much more
likely to hold such zero some views than the older generations.
And we can trace this back to the economic environment
that people live in, which is also a way to
think about potential solutions. The younger generations today have grown
up in times with lower mobility, lower growth, and the
(22:00):
older generations and so at this macro level, this has
really influenced their thinking about these issues. You can also
see it at the individual level. We have people's whole
family histories and ancestries in our project, and you can
see that, regardless of the macro environment, if your own
family has done better over time, you know, if you
are doing better than your parents, you're also less likely
(22:23):
to think in zero sometimes.
Speaker 4 (22:24):
Well, there's the thing, Steffanie, that I find so interesting here.
Speaker 2 (22:27):
And you know, the romance of getting back to the
economics and political economics of Benjamin Freeman are over at
MIT Simon Johnson, the recent Nobel Prize winner. But the
thing to me is, what is the prescription to get
back to the optimism we created out of the Atlantic
Charter in nineteen forty one? Or is this what we
(22:49):
have for the future, this zero sum thinking.
Speaker 8 (22:54):
Yeah, I want to be really cautious here because we're
not saying that zero sum thinking is necessarily a bias.
Shouldn't be dismissed as just a bias in the people.
We show that it's deeply correlated to people's experiences. People
who have zero sum experiences, including in their ancestry, are
much more likely to hold this mindset than people who
have had positive some experiences. So it's something that's deeply
(23:17):
rooted in people's realities, and this is something that we
have to think about very seriously. So when we think
about policies, policies themselves can make the world more zero sum,
or they can make the world less zero sum. It's
rare to find entirely win win policies, but there are
policies that lead us more in a win win direction,
especially over the longer term, you know, researchers for instance,
(23:40):
funding for children, like the child tax credit. These are
things that over the long run sort of pay for
themselves in better opportunities, in better economic outcomes for those families.
Innovation policy is something that we think can create win
win solutions, you know, and benefit benefit more people. So
there's policies that can turn the world, you know, into
(24:02):
a more positive some direction.
Speaker 5 (24:03):
Well, Stephanie, I mean, the premise of this zero s
mindset is the belief that you know, resources are fixed,
that the pie is fixed. It's not a balloon that's expanding.
I mean, I grew up, I was born in nineteen
seventy four, but I'm still a product of the sixties,
you know, free love, all that good stuff. So is
Lisa from Leonia. But you know, the reality is this
generation the consequences of the zero some mindset are they
really that bad? Is it really breeding distrust, conflict, reduced
(24:26):
cooperation all of that.
Speaker 8 (24:28):
So we can trace the link between zero some thinking
and your policy views if you want, and what you
want to support. And one really important fact which is
pretty rare these days is this is not a part
is an issue. So zero some thinking is quite evenly
spread across both aisles of the political spectrum. So it
is not clearly a Democrat thing or Republican thing. It's
(24:50):
there on all sides. It's something that is more correlated
with more extreme ends of the political spectrum. And the
type of policies it makes you support is you know,
if you think the gains of rich people come at
the expense of the poor, then you're going to support
more distribution, you know, more progressive policies. If you think
that the gains of immigrants come at the expense of
(25:11):
non immigrants, you're going to also be quite anti immigrant,
which goes to show it really you know, cuts across
partisan lines here. You're going to be more anti free trade,
You're going to want to support you know, policies that
really benefit your in group or your own group more.
Speaker 5 (25:27):
Well, Stephanie, President Trump always talks about, you know, this
is good for America, but can also be good for
trade partners of America. Win win situations as it were.
I mean, you know, is this zero sum mindset?
Speaker 4 (25:38):
You know?
Speaker 5 (25:38):
I mean, is there such a thing as a win
win situation?
Speaker 8 (25:42):
There are win win situations? I think, you know, it
depends on the horizon we look at things. You know,
as I mentioned, there's policies which today might cost money,
so someone has to pay today, but over the medium run,
over the longer run, they create more benefits that can
you lift everyone. So it really on the horizon. And
then I think it also depends on necessarily how narrowly
(26:03):
we look at a situation. If I'm competing for a
promotion at work, then in the immediate this is zero sign.
If someone else gets the promotion, I won't get it.
But maybe if I take a step back and think
about how can we cooperate here, maybe there's a way,
you know, to make everybody more productive here and the
company do better, and then I could also benefit from this.
So not saying every situation can be win win and
(26:25):
again Zo some thinking is very rooted in people's realities
because they have experienced zero some situations. But I think
policy has a role to try to push us towards
more win win solutions.
Speaker 2 (26:36):
It s having got time for one more quick question.
You're having a cup of coffee with President Trump, You're
having two scoops of ice cream for dessert with President Trump.
What would you say to the president about slipping away
from a neo mercantilist policy.
Speaker 8 (26:53):
Well, to highlight basically the findings I think of this
research is really that we have to push towards more
positive some situations. And while that's not always possible, policy
is a really really powerful tool. So it shapes the world.
It has shaped the world. You can see through these
generations that have experienced very different growth, very different mobility,
(27:13):
and so I think this is a huge, you know,
a huge moment to try to create more win win
solutions and more positive some environments.
Speaker 2 (27:22):
Stephanie, thank you so much, Stephanie Stensheva at Harvard And
of course the Acclaim earlier this year of winning John
Bates Clark metal hugely. It's like I think under forty
maybe it's under seventy.
Speaker 5 (27:36):
I can't remember how I mean, I'm kidding.
Speaker 4 (27:38):
That's a huge, huge. I thrilled that she could be
with us this morning.
Speaker 1 (27:43):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Apple Corplay 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 condemn.
Speaker 2 (28:01):
At least it would tell you fired up with a
gluten free set on newspaper stories, What.
Speaker 5 (28:05):
Do you have all right?
Speaker 9 (28:06):
Okay, doctor is saying, I know you guys have dabbled
in AI, right. Have you used the chat GPT that much?
Speaker 5 (28:12):
It's too much? Idea? I have it?
Speaker 9 (28:14):
Well, doctor is saying there could be a side effect
to using chat butts like chat GPT. It's called AI psychosis.
Speaker 5 (28:21):
Very serious.
Speaker 9 (28:21):
Okay, So Wall Street Journal what they did to find
this out. They did a review and analysis of public
chats that were posted online. Okay, dozens of examples where
chat gpt actually made delusional, false, other worldly claims to users.
And the scary thing is that people believed it.
Speaker 2 (28:38):
You know.
Speaker 9 (28:39):
That's spitting out this information.
Speaker 5 (28:40):
People are saying this week girl playing it came out yesterday.
Speaker 1 (28:45):
Yes, yes.
Speaker 9 (28:45):
So one example is that chat ChiPT confirmed that it's
in contact with extraterrestrial beings, so that goes to show
you what's being out there. And the problem is that
people keep writing back and forth, so then you have
the queries and the queries and the queries, so it's
like this rabbit hole and it keeps over and that's
why they're saying. It's like Ai Si.
Speaker 2 (29:02):
Maxios did a great treatment on this today of anthrop
at catching.
Speaker 4 (29:05):
Up with whoever in coding. But there's different Ai Damien.
Speaker 2 (29:09):
There's coding, you know, making road, there's what Lisa is
talking about, which is idiot stuff, and then there's like
I'm using perplexity like a search engine.
Speaker 4 (29:20):
It's phenomenal.
Speaker 5 (29:20):
Well, I just you know, the response to chat GPT
gives you. It's like, look, look, look, some of the
greatest minds of our in history were delusional, So you're
doing the right thing by querying about you know, cosmic aliens.
Speaker 4 (29:32):
And I mean, I.
Speaker 2 (29:33):
Couldn't give this to Google's search I typed into perplexity
last week, folks.
Speaker 4 (29:37):
When was the last time Damien Sasa right back to
back birdies.
Speaker 5 (29:41):
It was, well, now that my sixty is going to
be back in my bag, we're going to get something
the next.
Speaker 9 (29:46):
Okay, TikTok. I know neither of you on TikTok, but
it is trying to.
Speaker 5 (29:52):
Oh Damien, oh my god. Sometimes I don't have a
TikTok account, but I get sent a lot of TikTok's and.
Speaker 9 (29:58):
Say, okay, so did you might be able to use
it to book your next trip to Argentina? Damien, you
were just talking about this. Okay, So TikTok trying to
attract users drive e commerce activity. Right, the new app
it says you can use it to book vacation because
in the past, right you would use it, you would
scroll and you would see people's videos of these beautiful
places and you just sit and go, oh, I wish
I could go. But now there's going to be a
(30:21):
link because they have a partnership with booking dot Com.
Creators are going to make money off of it too.
So all these creators who post these videos, uh, they're
going to be getting a person a commission or they
can get a voucher. It's part of this program called
TikTok go.
Speaker 5 (30:36):
So it's just.
Speaker 9 (30:36):
Making it easy for you to travel.
Speaker 5 (30:40):
So if you can get accent.
Speaker 4 (30:41):
I will say this.
Speaker 2 (30:43):
The announcement of the week was a New York Times
earnings report if a Brian Weezer shop at Madison and Wall.
They said it was a stunning, game changing report for
why everybody's doing all this digital stuff. It's about making.
Speaker 4 (30:59):
Money at times has a sterling report.
Speaker 9 (31:03):
Yeah, this TikTok has the TikTok talk shop, which they're
trying to you know, e commerce. It's all about people clicking.
Speaker 4 (31:08):
So what are you thinking next?
Speaker 9 (31:09):
Okay, Formula one? You know I still have not seen
the F one movie, not me neither, but okay.
Speaker 5 (31:14):
Formula one because you know they asked me to be
the lead in that, but they give the.
Speaker 9 (31:19):
Yeah, Amien, I'm sorry you missed out on that one.
Formula one group though they've seen a revenue bump this
quarter because of the movie Hollywood. The Hollywood Reporter is
saying forty one group they saw one time revenue increase
from the release of the movie late June contributed to
the group's forty percent rise in revenue year over year
to hit one billion dollars and the president of the
(31:42):
Formula One group is saying, you know what, it's helping
the popularity of the sport too because of the movie.
It's getting excitement around it. A new generation too is
getting flow.
Speaker 2 (31:52):
And the latest thing I saw in this, John Ferrell
is the one that's really expert on this is all
of a sudden, the drivers that they're like, you date,
they're like celebri They're like, you know.
Speaker 5 (32:02):
Well, I mean it's the girls.
Speaker 4 (32:04):
Girls are paying huge attention to this.
Speaker 5 (32:06):
It's McLaren. I mean, it's Piastre, it's Norris. I mean,
they're going for the drivers come and then they're neck
and neck for it. I mean, and look, it's no
longer max for staffans world.
Speaker 2 (32:14):
Right, that's very good. And they're on summer break now.
We'll pick it up here in a couple of weeks.
Lisa mateou thank you so much.
Speaker 1 (32:20):
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
(32:41):
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):
Joining us now from BAMA from Bank of Montreal, BEMA
Capital Markets. The acclaim Ian Lincoln the summer You're Ian
is the following We've got a data and a deficit
and we're in love with T bills. What's the Lincoln
radar say about an executive branch that says the solution
is a record number of T bill issuance.
Speaker 3 (00:51):
Frankly, I think that we're at the point where the market,
at least for now, can easily absorb an increase in
T bill issuance. The risk is that they oversaturate the
front end of the market, and there are many in
the market that believe that the rise of stable coin
and demand from that sector is going to create excess
demand and absorb that the bills in twenty twenty six
(01:13):
and beyond. That's not so clear to me, but I
think that the Treasure Department is going to find out
soon enough.
Speaker 4 (01:18):
Here's a sentence without math.
Speaker 2 (01:20):
One of the key debates in the market at the moment, Damien,
is whether Trump's tariffs will trigger one time price adjustments
or persistent inflation.
Speaker 4 (01:29):
So continue with the and.
Speaker 5 (01:30):
Lincoln, Well, I think all three parties take God, we'll
talk about that later. And I got you and I
have limited time here. I mean, futures are pricing in
ninety one percent probability of a twenty five big cut
in September. Can it be fifty? And what would make it?
What would meet that they'd go there?
Speaker 3 (01:44):
I think it could be fifty. Again, not our base case.
But if you get a disastrous payrolls print for the
month of August and two benign CPI prints, the market
will start talking about fifty basis points.
Speaker 5 (01:55):
Well, I mean, but then are we really going to
see a pullback? And consumption? Come on now? I mean
DP growth, I mean better than expected globally for the
first half of this year, you know, I mean talk
to talk to me about the trade up between a
weaker labor market and resilient income growth here in the US.
Speaker 3 (02:11):
So we have seen a easing of demand in terms
of personal consumption in real terms over the course of
Q one and Q two. That's in the data. But
what we haven't seen is we haven't seen it completely
stall out. And frankly, if the Fed cuts fifty or
twenty five in September, the equity market will respond well
and that will reinforce the wealth effect, which could certainly
(02:33):
help keep the consumer going.
Speaker 2 (02:35):
Damien, and of twenty twenty three thirty or mortgage eight percent, yeah,
we're now down to six point seven eight percent.
Speaker 4 (02:41):
Do you anser your great question to Ian?
Speaker 2 (02:44):
If we get a fifty beeps, whether it's one to whatever,
I mean, it's got to save the housing market, right.
Speaker 5 (02:50):
I mean?
Speaker 1 (02:50):
Yeah?
Speaker 5 (02:51):
And Ian, I mean, I mean can this curve steepen
even more from where we are? I mean, I think
you look at fives thirties, we're up what sixty BIPs
here to date? I think two tens, it's something like
twenty plus here to day. I mean, just how much
steeper can this curve go?
Speaker 3 (03:04):
So once the Fed starts cutting, the market will price
in even more rate cuts in twenty twenty six and
twenty twenty seven, and so the two year sector will rally,
so you get a steeper curve that way. I don't
think ten and thirty year yields are going to back
up materially from current levels, so you can still get
a steepener with a front end rally. As far as
mortgage rates dropping in line with each incremental quarter point cut,
(03:27):
good luck. The mortgage market hasn't been functioning that way,
and so I don't think that rate cuts will solve
the housing market. The housing market has a supply problem
as much as it does a rate problem.
Speaker 2 (03:38):
Fascinating on an eventful Friday, not boring, to say the least.
Damien Sassaur with Ian Lingoln of BEMO Capital Markets.
Speaker 5 (03:47):
And talk to us about the runway for continued dollar weakness.
Is this really the end of king dollar? I mean,
how much lower can euro dollar go here?
Speaker 4 (03:55):
Well?
Speaker 5 (03:56):
Can the dollar go here?
Speaker 3 (03:58):
Well to a largest It depends on how successful the
administration is in balancing trade, because if we actually have
a balanced trade deficit, then there won't be as many
dollars going out into the global economy to be recycled
back into treasuries at the end of the day. I
do think that the dollar will remain the reserve currency,
and if that's the case, there'll be a stabilization at
(04:22):
some stage but I'm very hesitant about wanting to go
aggressively long the dollar given all of the credibility issues.
Speaker 5 (04:30):
But way, look, it yields here in the US to
relative to the rest of the world. I mean they're high,
you know. And the carry trade works. I mean, it's
still working this year, despite what anybody else would have
told you coming into twenty twenty five. I mean the
carry trade works. And I mean you're not funding in
dollars anymore, are you.
Speaker 3 (04:47):
Yeah, that's a fair point. The carry trade works, but
it only works as long as, as you point out,
rates are relatively high. When the Fed starts cutting rates,
that should put downside pressure on the dollar, not upside pressure.
And the question becomes how much of that is priced in?
And I think not enough.
Speaker 2 (05:03):
You're pushing against in the panic of price down, yield
up and say the ten year piece, even the seven
year as well. Do you still stick with a vector
of lower yields out eighteen months?
Speaker 3 (05:19):
Yeah, our year in call for tins is still three
eighty five. Well, I think by eighteen months from now
we could be closer to three fifty three twenty five.
Speaker 2 (05:29):
And the time I got left with you, mister lingol
and I want to talk about Canada. You've got a
pooling of research at the Bank of Montreal. For those
of you folks are even one hundred and fifty years ago,
Bank of Montreal was sort of like the Bank of
England of Canada and Ian Lincoln with all of your
research capabilities, give us a BMO update on the impact
(05:52):
of Trump tariffs on mister Kearney and your Canada.
Speaker 3 (05:57):
So it hasn't been good in terms of what the
tariffs mean for the Canadian economy. We've already seen the
Bank of Canada respond, would expect more. There's a lot
of uncertainty and I think at the end of the day,
the relationship between Canada and the US will weather the storm,
but it has been recast in a material way because
of Trump's trade war.
Speaker 4 (06:18):
Ailing and thank you so much to Female Capital. Martin two.
Speaker 1 (06:26):
You're listening to the Bloomberg Surveillance podcast. Catch us live
weekday afternoons from seven to ten am Eastern Listen on
Applecarplay and Android Otto with the Bloomberg Business app, or
watch US live on YouTube.
Speaker 4 (06:38):
Joining us now is people and my people.
Speaker 2 (06:40):
I'm going to argue in for months about trying to
get him in your Lawrence McDonald joins us he made
waves years ago, a colossal failure of common sense.
Speaker 4 (06:49):
That was my biography, How to listen.
Speaker 2 (06:51):
To Americans speak as the latest effort. Larry McDonald in
the studio today. Great to have you here, and I
want to go right to where Damien was. You had
my essay of the Year two years ago where you
walk through in about twelve paragraphs the wall of money
that's out there.
Speaker 4 (07:10):
It hasn't changed, has it.
Speaker 6 (07:13):
Well, you know what's fascinating Tom. In the last two
to three weeks. The rrp's coming down again and we
don't have that release valve that we've normally have had.
So in the last couple of weeks something has changed
a little bit because that's the liquidity really, juggernaut is
(07:33):
the RP. That's been the case.
Speaker 4 (07:35):
For a long se r RP.
Speaker 6 (07:36):
For Lisa Miteo the offensive a reverse repo facility.
Speaker 5 (07:40):
Oh good, And so I.
Speaker 4 (07:41):
Have no idea what that is, Lisa, So stay with it.
Speaker 5 (07:43):
So it's McDonald, it's going to go with it.
Speaker 6 (07:46):
But you know, as a former Lehman trader, I just
want to say, I tell my wife wants some money
if we sell a million books will break even on
our Lehman stock.
Speaker 5 (07:53):
Right, that's good, Yeah, thank you.
Speaker 6 (07:56):
But but to get back to liquidity and Lehman and
what's happened now, this is you're gonna love this time.
We did an ideas dinner in San Francisco two weeks
ago and I was with some of the big family
CIOs that run money for them in the valley, for
the big AI type players, and what they said was,
you know, when academics look at liquidity, they look at
(08:18):
the RP. The guys in the valley that are tracking momentum,
they track meticulously these fifteen verticals of tertiary assets versus
versus established. All that means in English is say arc
stocks versus the queues, or say companies with ten billion
market caps and no sales. That's another one.
Speaker 2 (08:40):
Right, is the money gonna move? The wall of money
that you identified, is it going to move?
Speaker 6 (08:45):
Okay, So this gets back to my point. The tertiary
assets the last ten days have been starting to underperform
established solana versus bitcoin. So that tells you the wall
of money is receding, and it also lines up with
the decline in the So something's going on. Liquidity is
drying up to some extent. This is just the genesis
(09:06):
of it.
Speaker 5 (09:06):
Well, Larry, I'd love to ask you what wine they
were serving at that dinner with all the Silicon Valley types.
But you know we're not gonna talk about California Cats.
Total assets at the four world's four largest central banks.
I'm talking the FED, the ECB, the BOJ and the
PBOC has been in decline since March of twenty twenty two,
when the Feds first started raising rates. But that seems
to be declining. I just put out of deck this morning.
I have a great shart in them. Yeah, toot my
(09:28):
own horn here. But it looks like central bank boundaries
are going to start expanding yet again. Is that a
good thing or a bad thing? Oh my god, sorry, Softball.
Speaker 6 (09:38):
It's going to be a good It'll be a good
thing if we're in a crisis, right, it'll be a
bad thing if if if we're at this point in
the cycle, it's going to reaccelerate inflation.
Speaker 2 (09:46):
Larry, this is a good point then, folks. It's the
Bear Trapp Report. You can get it from mister McDonald's people.
He doesn't talk to anybody by appointment.
Speaker 4 (09:55):
Larry, are we in a crisis.
Speaker 6 (09:59):
We're in a We're in a situation where we're going
to have a reacceleration of inflation and that's going to
create a crisis.
Speaker 4 (10:06):
Mister Sas.
Speaker 5 (10:07):
Yeah, FX reserves and central banks, let's talk about that.
We want to get into a plumbing of these markets, right.
I mean, it seems that you know, reserve levels at
least you look at China obviously, but broadly speaking, it
looks like central banks outside of the US they don't
need to hold US treasuries anymore. I mean, what else
where do they go? What do they I mean, is
there no demand for liquid you know, cash like assets
from central banks anymore? Is that the climbing?
Speaker 6 (10:28):
Yes, and so we have less friends in the world.
That's why the Cent has been out there with the
bag of tricks. So when you talk to we have
a business on Bloomberg, a Bloomberg chat with some of
the largest hedge funds in the world. One of the
things I've been talking about in the last six weeks
is the Cents bag of tricks, where they're using a
number of new facilities to try to replace foreign treasury
(10:52):
buying because.
Speaker 5 (10:53):
What of their facilities look like like what else is
there gold?
Speaker 6 (10:56):
Well, you know, using forcing the banks to buy more
treasuries one, that's just to keep it simple. But when
you force the banks to buy more treasuries than that,
in essence, that's financial repression and the only way out
of a thirty seven This is what we talked about
in our book how to Listen to market Speak. The
only way out of a thirty seven trillion dollar debth
hole is massage interest rates below the rate of inflation.
(11:18):
Financial repression. That's very bullish for hard assets. That's why gold, bitcoin,
and platinum pladium are starting to outperform.
Speaker 4 (11:25):
The silver miners. Tom The silver miners.
Speaker 6 (11:27):
Are up sixty two percent this year versus the fangs
are only up five hard assets versus financials stock market up.
Speaker 2 (11:35):
I mean, it's a grind higher, but it's a constructive grind,
and you know, earning season, they're delivering the goods, but
it's like twelve stocks are getting done and the rest
are flat on their back. Our listeners that they're not
as esoteric as SaaS Hour or you our listeners and
viewers are. They're just like, okay, into the weekend, What
God's name do I do with my four oh one
(11:57):
k speak.
Speaker 6 (11:58):
Okay, First of all, if you look at the Bloomberg terminal,
which I do twenty times a day, volatility in August
in September seasonally it's a trouble spot. You want to
be raising cash into very for volatility. Probably the worst
or I guess the best month of the year for
(12:19):
is the Vicks in August, right the second best might
be September. So for people listening to us right now,
that's when you want to raise cash and you want
to put money to work when there's real fear like
we had in April and last August.
Speaker 5 (12:31):
Last August we had a.
Speaker 6 (12:33):
Very meaningful drawdown, and so you want to have raise
cash and be there for the pain.
Speaker 5 (12:37):
How do you build balance and fixed and come portfolios today?
I mean if no one's buying treasuries, and I mean,
let's be clear, if you look at em local debt
for example, which is you know, you know it should
be yielding way over US treasury, it's only one hundred
and eighty three BIPs over.
Speaker 7 (12:49):
I don't know that.
Speaker 5 (12:50):
No, it's almost have one of its tightest done record.
And so I mean if you look at em US
ten year, you spreads. I mean fourteen of eighteen fourteen
of eighteen countries are well below the three or average.
So I mean, just thinking out loud here, what else
do you buy?
Speaker 2 (13:03):
Right?
Speaker 6 (13:04):
The EMLC, the Emerging Market Local Currency bond fund is
outperforming the TLT Treasury Fund in a one year, three year,
and five year bucket air we got. And that's that
weakness in the dollar we've seen this year.
Speaker 4 (13:17):
I'm almost out of time.
Speaker 2 (13:18):
Your charm is you have an optimism about the American system.
People say, always gloomy in that and it's a Friday
gloom crew, except you believe in the system. Okay, what
do we do after Trump? What does our financial system
do after the day to day shocks that we receive
from President Trump?
Speaker 6 (13:36):
So that's what we talk about in our book, Tom,
We're talking about a whole new portfolio construction. People have
to get along in nineteen sixty eight to eighty one
type portfolio where your long companies that own assets. You're
all kinds of metals, copper copper companies. Right now, the
COPX is in the perfect spot. Globally, we're undersupplied. The
(13:59):
artificial intelligen's boom, Tom, we have a power grid in
the United States that needs a two trillion dollar rebuild,
all of these growth assumption shumpsons.
Speaker 4 (14:07):
Can you seven this morning? Can you kill?
Speaker 6 (14:10):
But I want to own the COPX because that's going
to give you the power to fund AI.
Speaker 2 (14:16):
I know you sold the movie rights to the latest book, DiCaprio.
Speaker 4 (14:20):
Is that what we're looking for?
Speaker 6 (14:23):
Well, you know, the latest book right now number number
within the top three on Amazon right now. How to
listen when market speak top three again. By the way,
I'm really proud to I've got two books right now,
Larry McDonald, two books in the top forty.
Speaker 4 (14:36):
Okay, let's good.
Speaker 2 (14:36):
Lisa Motel's books number one and Glenden Free Breakfast. Lawrence McDonald,
thank you so much.
Speaker 1 (14:42):
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 Bloomberg reporting.
Speaker 2 (15:00):
Trump Putin meeting in the next few days. Russia and
US agreed on the place for a potential meeting between
the presidents but won't announce it yet. We're here to
break news. They'll be holding that at dan Tanabaum summer place.
Speaker 4 (15:15):
He joins us.
Speaker 2 (15:15):
Now from Oliver Wyman, Dan, you're sort an expert on this,
I mean at Oliver Wyman, between you and Hugh von
steinas it's shocking expertise about inside baseball between the United
States and Russia. What's your observation it would be the
best thing for mister Trump to bring up.
Speaker 7 (15:38):
Well, firstly, Tom and we haven't planned for the meeting
here yet. There isn't really a good reason to even
have this summit. Let's remember there's been threat after threat
that President Trump has made towards the Russian government, towards
President Putin, decease hostilities, to work towards the ceasefire. They
haven't done any of that. Today day was actually supposed
(16:01):
to be a day where the President was to announce sanctions,
which you know, by my account, there have been zero
designations by the US government with respect to Russia since
Trump has taken office again. So to give this summit
with Putin in the first place sends really the wrong
message because Russia hasn't done anything favorably towards ending the conflict.
Speaker 4 (16:21):
Do we have leverage?
Speaker 7 (16:23):
We absolutely do. I mean, it is ironic that the
President has done more to hurt the Swiss economy than
the Russian economy the last six months.
Speaker 4 (16:32):
There absolutely is leverage.
Speaker 7 (16:33):
The focus on India, for instance, in trying to get
them to stop purchasing Russian oil by using tariffs, which
really will enrich the US at the cost of Ukraine.
There's primary and secondary sanctions that could be used on
Indian entities to essentially threaten to cut them off from
access to the US economy, a far greater threat if
the objective is to get them to stop buying Russian oil.
Speaker 4 (16:55):
So the leverage is there.
Speaker 7 (16:56):
The President hasn't done anything yet.
Speaker 5 (16:59):
Dan, And part of the press and strategy was to
increase domestic manufacturing here at home. We know that Oliver
Wyman one of the most successful management consulting firms here
in the US. And then I see your note and
I look at this word and the quotes Empanada. Everyone
makes promises and never actually does anything. Is that what
you're telling clients right now? And Panada, I'm.
Speaker 4 (17:20):
Not telling them.
Speaker 7 (17:21):
Another media outlet had actually coined that the other day
but love I think about it, some of the scale
of these announcements of investment in the US are fairly high.
You haven't seen anyone really moving on some of these
committed investments thus far, and from what we've seen going
back to the first Trump term, no one's really validating
(17:42):
that these investments have been made good on. So it
does seem like some of my clients in an attempt
to curry favor, to stay out of negative focus of
the administration or announcing deals. They may be serious about them,
but when you see hundred six hundred billion dollar investments
over however long a time horizon, I'm not since the
(18:04):
companies are going to make good on all of these.
Speaker 2 (18:06):
This is sakermer Commune Tokyo for Bloomberg folks. The Prime
Minister of Japan is hoping to stay on as calls
grow for him to exit, and part of it is
because of the deal we did with Japan that's not
in writing and open to completely polarized interpretation.
Speaker 7 (18:27):
I mean, that's what it challenge. We have frameworks, we
don't have specifics. Even on the tariff strategy, there's a
forty percent tariff on transhipped goods. There's no guidance out
of the US government on what even constitutes transhipt goods.
So you take all of these together, there's still a
ton of uncertainty for my clients, for the market on
what actually will be moving forward. And we've seen there's
(18:50):
a tendency to pull some of these deals away to
readdress them going forward. So there's not really smooth air
that companies are seeing.
Speaker 5 (18:57):
So Dan, I mean, then, but then correctly if I'm wrong.
I mean this effective tax rate that everybody's talking about
fifteen percent, sixteen to twenty percent, you know, I mean,
how are people coming up and actually calculating that with
any confidence? Is it a range in your mind? I mean,
is it fifteen to twenty? Is a ten to fifteen?
How do you look at things?
Speaker 7 (19:13):
I mean, that is the challenge is the movement is
so great that trying to take a look at some
of what this go forward taxes look like is complicated.
What I'm looking at, probably more closely, are the losses
that businesses in the US have been announcing in their
earnings over the last few weeks, because that seems to
be a bit more real as at least a looking
(19:35):
backwards issue to try and go where ultimately companies can
try and recoup some of these losses going forward in
the form of price increases.
Speaker 2 (19:44):
Dan, if you do have the Trump Putin meeting at
your summer place, I would suggest a liquor manifest that I.
Speaker 4 (19:50):
Saw Churchill had at Yalta. I think that would be
some that would smooth things.
Speaker 5 (19:55):
Hault. Sure.
Speaker 7 (19:56):
I mean I don't have diet coke here and can't
took a well done Hamburger, so I'm not sure what
my abilities would be to host.
Speaker 2 (20:05):
Dan. Thank you so us d'antanobaum and Oliver Wyman with
you Von Steins So just great, great perspective there.
Speaker 1 (20:17):
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 watch us
live every weekday on YouTube and always on the Bloomberg Terminal.
Speaker 2 (20:31):
Arguably my academic paper of the summer, even though it
came out two years ago, joining us now from Harvard
with all of the recent acclaim of the John Bates
Clerk Awards. Stephanie Stansheva, her expertise in the taxation economics,
her social Economics lab and Stephanie this paper, which I
(20:51):
absolutely adore with non Chanoy and Sequera is zero some
thinking in the roots of US political differences. This goes
to a static analysis analysis. It goes to almost a
mercantilis thinking, and an eye for an eye, a.
Speaker 4 (21:09):
Tooth for a tooth.
Speaker 2 (21:10):
How do we get beyond our new vogue of zero
sum thinking.
Speaker 8 (21:17):
That's a great question, and indeed you're right to point
out that what we show in the paper is that
this zero sum mentality, this feeling that if you get more,
this means I must be getting less. You know that
we live in a world which is a fixed pie.
So someone gets a larger slice of the pie, someone
else must be getting a smaller one. This mindset has
actually been increasing. You can see it in the US
(21:40):
in the fact that younger generations today are much more
likely to hold such zero some views than the older generations.
And we can trace this back to the economic environment
that people live in, which is also a way to
think about potential solutions. The younger generations today have grown
up in times with lower mobility, lower growth, and the
(22:00):
older generations and so at this macro level, this has
really influenced their thinking about these issues. You can also
see it at the individual level. We have people's whole
family histories and ancestries in our project, and you can
see that, regardless of the macro environment, if your own
family has done better over time, you know, if you
are doing better than your parents, you're also less likely
(22:23):
to think in zero sometimes.
Speaker 4 (22:24):
Well, there's the thing, Steffanie, that I find so interesting here.
Speaker 2 (22:27):
And you know, the romance of getting back to the
economics and political economics of Benjamin Freeman are over at
MIT Simon Johnson, the recent Nobel Prize winner. But the
thing to me is, what is the prescription to get
back to the optimism we created out of the Atlantic
Charter in nineteen forty one? Or is this what we
(22:49):
have for the future, this zero sum thinking.
Speaker 8 (22:54):
Yeah, I want to be really cautious here because we're
not saying that zero sum thinking is necessarily a bias.
Shouldn't be dismissed as just a bias in the people.
We show that it's deeply correlated to people's experiences. People
who have zero sum experiences, including in their ancestry, are
much more likely to hold this mindset than people who
have had positive some experiences. So it's something that's deeply
(23:17):
rooted in people's realities, and this is something that we
have to think about very seriously. So when we think
about policies, policies themselves can make the world more zero sum,
or they can make the world less zero sum. It's
rare to find entirely win win policies, but there are
policies that lead us more in a win win direction,
especially over the longer term, you know, researchers for instance,
(23:40):
funding for children, like the child tax credit. These are
things that over the long run sort of pay for
themselves in better opportunities, in better economic outcomes for those families.
Innovation policy is something that we think can create win
win solutions, you know, and benefit benefit more people. So
there's policies that can turn the world, you know, into
(24:02):
a more positive some direction.
Speaker 5 (24:03):
Well, Stephanie, I mean, the premise of this zero s
mindset is the belief that you know, resources are fixed,
that the pie is fixed. It's not a balloon that's expanding.
I mean, I grew up, I was born in nineteen
seventy four, but I'm still a product of the sixties,
you know, free love, all that good stuff. So is
Lisa from Leonia. But you know, the reality is this
generation the consequences of the zero some mindset are they
really that bad? Is it really breeding distrust, conflict, reduced
(24:26):
cooperation all of that.
Speaker 8 (24:28):
So we can trace the link between zero some thinking
and your policy views if you want, and what you
want to support. And one really important fact which is
pretty rare these days is this is not a part
is an issue. So zero some thinking is quite evenly
spread across both aisles of the political spectrum. So it
is not clearly a Democrat thing or Republican thing. It's
(24:50):
there on all sides. It's something that is more correlated
with more extreme ends of the political spectrum. And the
type of policies it makes you support is you know,
if you think the gains of rich people come at
the expense of the poor, then you're going to support
more distribution, you know, more progressive policies. If you think
that the gains of immigrants come at the expense of
(25:11):
non immigrants, you're going to also be quite anti immigrant,
which goes to show it really you know, cuts across
partisan lines here. You're going to be more anti free trade,
You're going to want to support you know, policies that
really benefit your in group or your own group more.
Speaker 5 (25:27):
Well, Stephanie, President Trump always talks about, you know, this
is good for America, but can also be good for
trade partners of America. Win win situations as it were.
I mean, you know, is this zero sum mindset?
Speaker 4 (25:38):
You know?
Speaker 5 (25:38):
I mean, is there such a thing as a win
win situation?
Speaker 8 (25:42):
There are win win situations? I think, you know, it
depends on the horizon we look at things. You know,
as I mentioned, there's policies which today might cost money,
so someone has to pay today, but over the medium run,
over the longer run, they create more benefits that can
you lift everyone. So it really on the horizon. And
then I think it also depends on necessarily how narrowly
(26:03):
we look at a situation. If I'm competing for a
promotion at work, then in the immediate this is zero sign.
If someone else gets the promotion, I won't get it.
But maybe if I take a step back and think
about how can we cooperate here, maybe there's a way,
you know, to make everybody more productive here and the
company do better, and then I could also benefit from this.
So not saying every situation can be win win and
(26:25):
again Zo some thinking is very rooted in people's realities
because they have experienced zero some situations. But I think
policy has a role to try to push us towards
more win win solutions.
Speaker 2 (26:36):
It s having got time for one more quick question.
You're having a cup of coffee with President Trump, You're
having two scoops of ice cream for dessert with President Trump.
What would you say to the president about slipping away
from a neo mercantilist policy.
Speaker 8 (26:53):
Well, to highlight basically the findings I think of this
research is really that we have to push towards more
positive some situations. And while that's not always possible, policy
is a really really powerful tool. So it shapes the world.
It has shaped the world. You can see through these
generations that have experienced very different growth, very different mobility,
(27:13):
and so I think this is a huge, you know,
a huge moment to try to create more win win
solutions and more positive some environments.
Speaker 2 (27:22):
Stephanie, thank you so much, Stephanie Stensheva at Harvard And
of course the Acclaim earlier this year of winning John
Bates Clark metal hugely. It's like I think under forty
maybe it's under seventy.
Speaker 5 (27:36):
I can't remember how I mean, I'm kidding.
Speaker 4 (27:38):
That's a huge, huge. I thrilled that she could be
with us this morning.
Speaker 1 (27:43):
This is the Bloomberg Surveillance Podcast. Listen live each weekday
starting at seven am Eastern on Apple Corplay 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 condemn.
Speaker 2 (28:01):
At least it would tell you fired up with a
gluten free set on newspaper stories, What.
Speaker 5 (28:05):
Do you have all right?
Speaker 9 (28:06):
Okay, doctor is saying, I know you guys have dabbled
in AI, right. Have you used the chat GPT that much?
Speaker 5 (28:12):
It's too much? Idea? I have it?
Speaker 9 (28:14):
Well, doctor is saying there could be a side effect
to using chat butts like chat GPT. It's called AI psychosis.
Speaker 5 (28:21):
Very serious.
Speaker 9 (28:21):
Okay, So Wall Street Journal what they did to find
this out. They did a review and analysis of public
chats that were posted online. Okay, dozens of examples where
chat gpt actually made delusional, false, other worldly claims to users.
And the scary thing is that people believed it.
Speaker 2 (28:38):
You know.
Speaker 9 (28:39):
That's spitting out this information.
Speaker 5 (28:40):
People are saying this week girl playing it came out yesterday.
Speaker 1 (28:45):
Yes, yes.
Speaker 9 (28:45):
So one example is that chat ChiPT confirmed that it's
in contact with extraterrestrial beings, so that goes to show
you what's being out there. And the problem is that
people keep writing back and forth, so then you have
the queries and the queries and the queries, so it's
like this rabbit hole and it keeps over and that's
why they're saying. It's like Ai Si.
Speaker 2 (29:02):
Maxios did a great treatment on this today of anthrop
at catching.
Speaker 4 (29:05):
Up with whoever in coding. But there's different Ai Damien.
Speaker 2 (29:09):
There's coding, you know, making road, there's what Lisa is
talking about, which is idiot stuff, and then there's like
I'm using perplexity like a search engine.
Speaker 4 (29:20):
It's phenomenal.
Speaker 5 (29:20):
Well, I just you know, the response to chat GPT
gives you. It's like, look, look, look, some of the
greatest minds of our in history were delusional, So you're
doing the right thing by querying about you know, cosmic aliens.
Speaker 4 (29:32):
And I mean, I.
Speaker 2 (29:33):
Couldn't give this to Google's search I typed into perplexity
last week, folks.
Speaker 4 (29:37):
When was the last time Damien Sasa right back to
back birdies.
Speaker 5 (29:41):
It was, well, now that my sixty is going to
be back in my bag, we're going to get something
the next.
Speaker 9 (29:46):
Okay, TikTok. I know neither of you on TikTok, but
it is trying to.
Speaker 5 (29:52):
Oh Damien, oh my god. Sometimes I don't have a
TikTok account, but I get sent a lot of TikTok's and.
Speaker 9 (29:58):
Say, okay, so did you might be able to use
it to book your next trip to Argentina? Damien, you
were just talking about this. Okay, So TikTok trying to
attract users drive e commerce activity. Right, the new app
it says you can use it to book vacation because
in the past, right you would use it, you would
scroll and you would see people's videos of these beautiful
places and you just sit and go, oh, I wish
I could go. But now there's going to be a
(30:21):
link because they have a partnership with booking dot Com.
Creators are going to make money off of it too.
So all these creators who post these videos, uh, they're
going to be getting a person a commission or they
can get a voucher. It's part of this program called
TikTok go.
Speaker 5 (30:36):
So it's just.
Speaker 9 (30:36):
Making it easy for you to travel.
Speaker 5 (30:40):
So if you can get accent.
Speaker 4 (30:41):
I will say this.
Speaker 2 (30:43):
The announcement of the week was a New York Times
earnings report if a Brian Weezer shop at Madison and Wall.
They said it was a stunning, game changing report for
why everybody's doing all this digital stuff. It's about making.
Speaker 4 (30:59):
Money at times has a sterling report.
Speaker 9 (31:03):
Yeah, this TikTok has the TikTok talk shop, which they're
trying to you know, e commerce. It's all about people clicking.
Speaker 4 (31:08):
So what are you thinking next?
Speaker 9 (31:09):
Okay, Formula one? You know I still have not seen
the F one movie, not me neither, but okay.
Speaker 5 (31:14):
Formula one because you know they asked me to be
the lead in that, but they give the.
Speaker 9 (31:19):
Yeah, Amien, I'm sorry you missed out on that one.
Formula one group though they've seen a revenue bump this
quarter because of the movie Hollywood. The Hollywood Reporter is
saying forty one group they saw one time revenue increase
from the release of the movie late June contributed to
the group's forty percent rise in revenue year over year
to hit one billion dollars and the president of the
(31:42):
Formula One group is saying, you know what, it's helping
the popularity of the sport too because of the movie.
It's getting excitement around it. A new generation too is
getting flow.
Speaker 2 (31:52):
And the latest thing I saw in this, John Ferrell
is the one that's really expert on this is all
of a sudden, the drivers that they're like, you date,
they're like celebri They're like, you know.
Speaker 5 (32:02):
Well, I mean it's the girls.
Speaker 4 (32:04):
Girls are paying huge attention to this.
Speaker 5 (32:06):
It's McLaren. I mean, it's Piastre, it's Norris. I mean,
they're going for the drivers come and then they're neck
and neck for it. I mean, and look, it's no
longer max for staffans world.
Speaker 2 (32:14):
Right, that's very good. And they're on summer break now.
We'll pick it up here in a couple of weeks.
Lisa mateou thank you so much.
Speaker 1 (32:20):
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
(32:41):
always on the Bloomberg terminal
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