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00:00:00
Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. This is the Bloomberg Surveillance Podcast. I'm Tom Keene along with Paul Sweeney. Join us each day for insight from the best in economics, finance, investment, and international relations. You can also watch the show live on YouTube. Visit the Bloomberg Podcast channel on YouTube to see the show weekday mornings from seven to ten am Eastern from our global headquarters in New York City. Subscribe to the podcast on Apple, Spotify, or anywhere else you listen and always I'm Bloomberg Radio, the Bloomberg Terminal, and the Bloomberg Business App. We have two really important guests, and you know when we put this together, Eric put this together, I'm like, yeah, yeah, yeah, that was before CPI yesterday. Ian Lingoln joins us now absolutely massive award winning in the fixed income space and lighting it up with me in Toronto a number of days ago. Francis Donald joins for Manual Life. For half our discussion, We'll take a break so Lisa can give you the markets here midway. Let me start Francis Donald with you as well. If we have higher inflation, does that mean higher nominal GDP or does inflation adjusted GDP depress so much that we don't get an animal spirit lift.
00:01:34
Speaker 2: You know, Tom, once again, I think it's going to take me longer to figure out what that question is then answer it. Maybe what the heart of it is is, is this all a system that is just operating as it should in a new economy, that is operating at higher levels? Or are we overheating? Maybe that's how I'm gonna interpret that question, because that's what is weighing on me. Are we overheata And if we're overheating, then the risk of a more painful twenty twenty five twenty twenty six is larger. And that's what keeps me up at night, is if we're overheating, and I think this does have elements of overheating and excesses, then it's all well and good to say the economy's added three hundred and three thousand jobs, there's demand in the system, we're not in deflation. But if we don't get rate cuts now, then my sensus twenty twenty five and twenty twenty six is going to be more painful. And we've said a lot of times Tom on this show and on other ones, you can't have your cake and either eat it too. We were in a soft landing narrative, but one of two things was going to happen. Either we were going to be in a situation where the data was too good and rate hikes got put or rate cuts got pushed out and the market wouldn't like that, or the data was going to deteriorate and we were going to have a session concern. That's exactly what's happening and what's so important here.
00:02:53
Speaker 1: After Francis throw me, Francis threw me under the bus there, right, job, I'm going to go right over to Ian and ask the same damn question and he'll throw me under the bus as well. Okay, we got all the moving parts everybody. All our listeners are viewers on YouTube. Their heads are spinning here, Ian lingoln and the bottom line is inflation's up. So we've got a set of outcomes that we can have. In one set, is we get a more buoyant animal spirit the overheating that Francis Donald is talking about, or we get a really diminish GDP. What do you see off these two inflation reports about what the animal spirit of America is gonna be?
00:03:34
Speaker 3: I think at this point, the biggest takeaway.
00:03:36
Speaker 1: So this is where you say, Tom, you don't know what you're talking about. I'll continue.
00:03:39
Speaker 3: Actually, let me rephrase that, Tom, that was a brilliant question. I think that Francis is right. You're gonna have one of those two outcomes. You're either going to see things go a bit weaker as the net takeaway over the course of the next several quarters, or we're going to find ourselves in a situation where we realize that five point five percent is the upper bound for the FED funds is not as restrictive as the FED believed it was in twenty twenty three. What I worry about, however, is that if we continue to get inflation prints at these levels, the FED is going to find itself backed into a corner where they need to cause a recession if they're going to hold that two percent inflation target.
00:04:21
Speaker 4: So it's Francis, I think from a past discussion, I got the sense that you guys are very concerned, more conservative than maybe the consensus on this economy. I took the recession talk off the table a year ago. Was that a little premature?
00:04:36
Speaker 2: No, it would have been the right call, because yes, we do believe there is downward surprises for growth ahead, but they're not quite here yet. And this is what the FED has to contend with. I'm with Ian on this one. Is in the near term, inflation we think is going to continue to surprise to the upside and the FED won't be able to cut. They're going to lose the data support to cut in the near term. However, that increases the probability of a recession. And I remember members of my team back in December said the Fed is pivoted early. This is going to provide indirect easing. We should lower our probability of recession calls for twenty twenty four. But now that we're back in an environment where we're losing those embedded rate cuts, we actually have to increase the chance of something bad happening here. I think the FED is going to be in a situation with inflation data like this PPI numbers claims numbers where they have to stay higher for longer, and they may have to stay higher until something breaks. That's the problem.
00:05:32
Speaker 1: Now.
00:05:32
Speaker 2: Meanwhile we're talking about PPI data. But yesterday we had the Bank of Canada. This morning we have the ECB. They're all saying we have the data to begin cutting. I think in the next couple of months we might not be talking about recessions, but we'll be talking about how US exceptionalism, which was once a good thing, is going to become more problematic for the Fed versus these other central banks and
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economies.
00:05:52
Speaker 4: Hey, Ian, I got the US ten year trading about four point five three percent. Where's it going to be year end? Do you think?
00:05:58
Speaker 3: I think there's a strong case to be made that we end twenty twenty four with ten year yields in a range of let's call it three seventy five to three ninety five. The big question right now is how far do they back up until we start to get some dip buying interest.
00:06:14
Speaker 1: For the traders worldwide that hang on every Ian Lincoln note Francis Donald's taking notes up there with manual life. Right now, you have published a lower ten year yield call, and you've also said if you get a yield yield, lift load the boat after yesterday, after today. You've got to be loving the acquisition of full faith and credit paper here right.
00:06:36
Speaker 3: I do think that we're right up against a range where it makes sense to really load the boat between that five sixty five and five, assuming four sixty five and four to seventy five level and tens, I expect a fair amount of dip buying interest to come in. The caveat is that the ten year auction yesterday needed a much bigger concession to be taken down, and I think that that was simply the investors stepping back given how much volatility there was in the market at the moment.
00:07:05
Speaker 4: Yeah, that's what I just it's just amazing. I try not to pay attention to those auctions. I'd rather pay somebody to.
00:07:10
Speaker 5: Do it for me.
00:07:11
Speaker 4: But I did note that they weren't necessarily as strong as maybe people will have liked. Francis, give us your sense here of how well, let me ask you this, what is the data that you're going to be looking at over the next several days and weeks and kind of get a sense of what the Fed's going to be looking at. What are you going to be looking at.
00:07:30
Speaker 2: We're looking at the job market because the focus has turned back towards inflation, which is not providing enough cover for cuts in the near term, probably not for June, although I'm already getting messages from my team here that the contributions from PPI that help us understand what PCE will look like or actually looking fairly like. So the Fed's PCE number might not be as spy as yesterday's CBI. We're still worried about that labor market. Hiring activity is down, layoffs are up, people are not as confident about their job prospects, and some of these leading indicators inside job reports, even though we look at the headlines like full time employment down year over year, these are all really problematic. Labor markets don't break in straight lines. They break in nonlinear fashion. So while the market is focused on some of these inflation dynamics, our eyes are going to be on when does labor really start to break? Because when it breaks, it won't matter whether you're a CEO, won't matter whether you wear in the inflation higher for longer, the FED will have to refocus towards the growth side of
the.
00:08:33
Speaker 1: Candy Francis you know I'm out on a live chat on YouTube. These guys are talking fishing in Texas and Wyoming, and every once in a while somebody shows up with an adult observation. Stargate kills it this morning, and Francis this is a You know, I can go to Francis because they get such confidence she can nail this. In the old days, Francis teenagers got jobs. They were in a restaurant, they were busy, and they got better. The model's broken from immigration. Now restaurants are hiring really serious, full time forty fifty sixty hour week, full time people. I mean, the whole labor component of service has changed. It's a different America.
00:09:22
Speaker 5: Isn't it.
00:09:24
Speaker 2: Yeah, And you know forty percent of Americans don't work.
00:09:27
Speaker 4: Tom.
00:09:28
Speaker 2: The employment population ratio in the US is about sixty and that's because we have the largest share of those over the age of sixty five than the US has had in modern economic history. And beyond that, Yes, the immigration component is becoming increasingly relevant, and there are plenty of academic economists who are saying the extent of immigration is going to change the amount of jobs we have to create. You can actually just look north of the border to Canada to see just how powerful huge amounts of immigration it's substantially larger in Canada can distort your data. In Canada, for example, GDP is looking just fine, but GDP per capita has been declining since September of twenty twenty two. So there's a myriad of factors that are going in to change the composition of this labor market. And yet, at the end of the day, tom if people don't have jobs, they aren't going out to restaurants, they aren't buying things, they aren't spending. And therefore, at the end of the day, no matter how dynamic the labor market is, if unemployment rises, it is bad. And so first principles still apply even as the accomplish shifting in ling.
00:10:30
Speaker 1: And John Templeton once told me to my face, there'll be a shortage of bonds. We have a deficit, we have a debt. Do we have a shortage of bonds?
00:10:39
Speaker 3: Our stance has always been, if you missed bonds at an auction, you don't have to worry about it because it will always make more, and they're always going to be making more. Now, there might be some scarcity in particular sectors at a given point. But what I think is really interesting is as we approach the election, there aren't any deficit hawks left in Washington, and everyone is worried about a next level of deficit spending ending up with more treasury bonds hitting the market. We're going to saturate what the bill market can handle, and we're going to need to see larger ten and thirty year auctions, and I think that will be a big headwind for a constructive outlook on bonds.
00:11:22
Speaker 4: Are you or is the market concerned about deficits and things like that. I mean, I've been hearing about this my entire life, and I've seen the clock here in Manhattan my entire life about the debt in his country. Does the treasury market care about it at all?
00:11:37
Speaker 3: Well, to some extent no. I would argue that ten and thirty year yields are set off of global macro expectations of growth and inflation, with some degree of a term premium priced in depending on where we are in the cycle. I will make the observation that term premium and supply becomes far more important in a no landing or a Goldilock sectanomic outcome, because that means that the market has the bargaining power to demand higher rates.
00:12:06
Speaker 4: Interesting, Francis, you know one of the issues out there is the consumer here. What's your view of the consumer? Amid the consumer buy and large, if they want a job, they have a job wages are going up, I think in excessive inflation. How do you view the consumer here?
00:12:24
Speaker 2: It depends which consumer paul, because we're starting to see a pretty large bifurcation between low income consumers and high end consumers. High end consumers are benefiting from higher rates, great stock markets, house prices. They still have excess savings and therefore their confidence levels are very high. And yet low income consumers are out of excess savings, they are seeing their job prospects weaken, and they are hampered by higher interest rates. This is why consumer credit card delinquencies are starting to rise. So there's this huge spread that's happening. It's the same spread that's happening between CEO confidence in small business confidence that have this largest spread that we've seen in the history of these two indicators being compared against each other. So right now we know that the top quintile, so the top twenty percent of US consumers, spend thirty five percent of all the PCEE. And what that means is the high end consumer can probably carry the economy better than if we were relying on the low end consumer. And that's why understanding these two dieparent groups and why the data doesn't say the same thing for each of them. It's gonna be really important in the next six months.
00:13:28
Speaker 1: Leguards, speaking in Frankfurt, I love this headline. This says all about our Bloomberg coverage. Leguard repeats wording of ECB statement. Hopefully we'll get to I like that. Hopefully we'll get to Q and A here in a moment, aling and I've got to go back to this combination's CPI PPI report. Francis is going to brilliantly lay out how it gets to what Powell cares about PCE, Trim, Dallas, Fancy Cleveland, you know the other inflation indices. Does this CPIPPI combo change how you write your note? Have you made a fundamental shift in your inflation belief after the last forty eight hours?
00:14:13
Speaker 3: So I think that the takeaway from the inflation updates has been that we thought January and to some extent February or one off reports there were some seasonality. But the reality is inflation looks a lot stickier than we thought
it was going to be at this point. And I think the more interesting question is has the Fed's reaction function to realize inflation changed? Are they going to need to now signal that we have only fifty basis points or even twenty five basis points worth of rate cuts when we get the updated doc lot in June. I would say that the short answer is, yes, we are looking at fewer rate cuts this year, but the way that the Fed approaches inflation hasn't changed. The biggest risk is if they ever revisit the two percent inflation target and we just don't see that happening.
00:15:03
Speaker 1: Ian, Thank you so much, great experience, Francis Donald. We'll get the two of you back together again. Maybe we get you both in the office here in Montreal. Francis Donald with Manual Life. Ian lnoln with us here this morning, is well joining us now. Dennis Gartman on gold in yen. Dennis, you have absolutely nailed this gold to the moon yen down down to a thirty four year weakness yesterday. Do you when do you cover this massive moonshot gain that you've got years from now.
00:15:47
Speaker 6: It's going to be quite some period of time. The Japan is concerned about the fact that the yen has traded to one fifty two, and they're actually speculating or ruminating about the fact that they may intervene to stop the end from week and beyond one fifty two. But when I first started trading foreign exchange back in the nineteen seventies, yen was trading three hundred and fifty end of the dollar. It traded two hundred and fifty end of the dollar, it traded one hundred and fifty end of the dollar.
00:16:12
Speaker 1: So the fact that we're.
00:16:12
Speaker 6: At one fifty two y end of the dollar and the possibilities of some intervention are I think inconsequential. I think, if the if the bagg of Japan will to intervene against the Japanese yen at one fifty two, maybe it goes to one to fifty. But I think we're trading. I think over the course of the next several years, we trade yen back to two hundred maybe two twenty five. Gold has gone from the lower left to the upper right in dollar terms. It's gone from the lower left to the very upper right in yen terms. It's gone from the lower left to the very upper right in euro terms. And it's going to continue. So it's inflationary problems around the world, not just here in the United States. Have been bullish of gold in yen euro and dollar terms and continue to be so.
00:16:51
Speaker 1: I can't say enough, folks about what you just heard. There is classic Gartman, which is if you're not a student a history, you don't get to win, and sometimes you lose money. Gartman lost money in two thousand, I think it was twenty one. He lost some money there as well. But the study of history, every chart on yen ends three years ago. Garbman has occuraged to go back thirty years to look at the different trends in vectors. Paul jump in on.
00:17:17
Speaker 4: Gold, Dennis, who is buying gold these days?
00:17:22
Speaker 6: Central banks
have been the major buyers. The Bank of Japan, the Bank of China has been a very large buyer of gold. The Bank of Russia has been a very large buyer of gold. Central banks have been buyers of gold, and they are the sponsors of the gold rally. Thus far, I think gold continues to go higher because of the fear that the United States may trap Russian assets here in the United States to pay for Ukraine. That's been a discussion several times, and if that were to occur, gold would go up another fifty to one hundred dollars that day when that announcement comes out, So I think gold wants to go a lot higher. Central bankers have been the buyers. I'm a little concerned that we're actually seeing the public in rather aggressively. So for my own account, I actually sold a few out of the money calls against my gold miners on Monday and Tuesday. But I think gold wants to go demostrably higher. And those those calls expire tomorrow and I'm slightly out of the money on them, so that that's turned out to be a good idea.
00:18:16
Speaker 4: So have the have the miners traded similar to the underlying bullion?
00:18:22
Speaker 6: Miners have lagged well behind bullion for the course of the past five years, to be quite honest, and now they're beginning to pick up and catch up. I think that if you're going to be involved in gold, g l D is is where I've been with the bank, with the with the endowment fund at the University of Akron. But I think for the public, if you're going to be a buyer of gold, be a buyer of the gold miners. I think they're they're starting to catch up to the to the movement that we're seen in bullion over the course of the past several years, they have become very cheap, and they want to go I think to monsterrably higher.
00:18:52
Speaker 1: Your extraordinary trade, folks, I'm talking about lifetime trade of gold, but priced in Japanese yen. Let's move on, Dennis, to the CPI report of yesterday. Is this a pandemic CPI or is it a CPI from years in my ute?
00:19:11
Speaker 6: I think this is a CPI from yours in my youth. I think we're starting to see inflationary pressures incumbent everywhere. Grain prices have stopped going down and started to go up. Meat prices have been going up for a while. Clearly, crude oil and heating oil prices have been going from the lower left to the upper right, and I think are going to continue to do so. Copper prices, ten prices, aluminum prices have been going up. This is I think a problematic circumstance, not something that's going to go away anytime soon. And that's been one of the driving forces behind the purchase.
00:19:42
Speaker 1: Of gold, and gold's bull moved.
00:19:45
Speaker 6: So I'm a little concerned again that the public has gotten enamored of gold in the course of the past week or two. But the fact that we've taken gold down fifteen or twenty dollars from it's high, probably took a few of the weekends that had come into the market in the past couple of days. I think if you you want to be a
buyer, you've probably got another fifteen to twenty dollars on the down side in gold. But then I'd be a buyer there, no question. And again I think the real trade is to own golden dollar terms, yen terms, and euro terms. This is something that's just beyond a dollar circumstance, beyond a US circumstance. This is a global circumstance. It's prevailing right now.
00:20:20
Speaker 4: Dennis, given that inflation print we saw yesterday, what do you expect this Federal Reserve to do?
00:20:27
Speaker 6: Two months ago, I in my bi weekly newsletter, I said that it was comical that people were expecting five to sick cuts in the overnight Fed funds rate. I thought there'd be two to three at most. Now I think it's going to be one at most, And if we probably get one, it'll either be in June, at the June meeting or at the November meeting. Probably at the November meeting, simply because it takes place after the election, and it would eliminate the concern that the FED is political in nature. So I think there's only one to come this year in an all likelihood be in a November meeting for the FMC.
00:21:02
Speaker 1: Dennis, I want to go to the back end of the Gartment letter of years past. Mister Gartman is somewhat retired when he's not out trying to qualify for the Masters. And you know, Dennis, I got two questions left, and let me get first here with the politics of the Gartment letter. I think it's no surprise to our audience worldwide. Possibly Dennis Gartman leans to the right. Is there a separation between Republicans and the Trump supporters or are they one?
00:21:31
Speaker 6: No question, no question. I am not a Trump supporter. I will vote for mister Trump, but I'll do with my nose held tight as I do. So this is mister Trump believes in tariffs and protected trade. Republicans believe in free trade and non tariffs. Mister Trump believes in putting his fingers into the pie to too much with regulation. Good Republicans are opposed to that sort of thing. So yes, I think there is a dichotomy, a bridge a chasm being built between old style Republicans such as I Libertarians such an eye as I am, mister Trump.
00:22:08
Speaker 1: You are more qualified, Dennis Gartman, than anyone I know to answer this question. You served the University of Akron on how they run their money and he was not one but two NC State final four Dennis, do you observe that the mania over athletics in America? Like it an amazing NC State ends up helping the NC State English Department. Can you make the attachment from big time sports over to Caldwell Hall and the Melissa Crow poetry reading and contest at NC State. You've done your homework.
00:22:47
Speaker 6: That's very impressive.
00:22:48
Speaker 1: Thank you for that.
00:22:49
Speaker 6: I was I'm the chairman of the University of Akrons endowment, but I was on the board of directors of NC State's endowment for fifteen years and my heart is still with NC State.
00:22:58
Speaker 1: It was a great.
00:22:59
Speaker
6: Run, amazing fact that both the men and the women made it to the final four, and I think over time that's going to be beneficial to all of our programs at NC State. There'll probably be an increase in the money coming into the endowment and they'll probably be an increase in the number of people applying to the university. So it was a great run. God bless the NC state. And here's to the fact that we may vanquish our foes at the University of North Carolina and Duke in the in the coming years.
00:23:26
Speaker 1: Hugely impressive there. Did you hear that? I heard that. I believe I heard that.
00:23:29
Speaker 7: That was to the west, Tennis Gartman, Go away, Tennis Gartman. They're on gold Indian the trade of the last ten years, there is no other way to put it. ECB, domestic price pressures is strong.
00:23:48
Speaker 5: I love this.
00:23:49
Speaker 1: Paul, help me out ECB to follow data dependent approach to determining rate pass. Can we all go home?
00:23:55
Speaker 5: Exactly?
00:23:56
Speaker 4: Data dependent? So again kind of right in line, tomb leaves a the positive facility rate at four percent rate in landed expectations. Now that everybody's kind of saying, all right, let's get the jewe Now maybe they do.
00:24:08
Speaker 1: Maybe if the FED did this with a fed TO size and yes, we've got a couple of programs coming up here, Cambri Canna driving that forward. But you know, the fed TO side, if we had four hundred headlines come out like we get here at eight to fifteen Wall Street time. Maybe it'd be easier, it'd be clear traders hold ECB rate that's steady, that from Bloomberg, very important pricing, nineteen basis points of cuts by the time Marcus Ashworth has his first gray here joining us right now from London, Marcus Ashworth, Marcus, this is one of the most value traditions. Every thirty days or six weeks, whatever it is, to have you on how slow is Europe? How different is Europe right now? The continent ex Switzerland? How different is it as compared to America.
00:24:53
Speaker 5: It's almost diametrically opposite at the moment. And that's why I'm disappointed that the ECB is t and to wait for yet more data dependent information which is going to tell it exactly what it already knows. You know, we're going to get a cut in June, that's long eight weeks away. We had their ECB's own bank lending survey out this week, which was just diabolical. I mean, it shows you that the demand for loans is dropping even further. They than they thought they thought it was going to see it arise, It actually fell it quite substantially. There's real problems in Germany, particularly the demand for borrowing, let alone allowing borrowing. It's the worst type of a problem you can't have when people then even want to borrow. So in that sense, I think with the German manufacturing heading back down again on the PMIS and a range of appalling fiscal numbers out of both Italy and France, which shows you that the government is not going to be there to help in the way that it clearly has been throughout the pandemic and onwards, that we don't have that big stimulus boom that you see in the States, which is continuing to make everything else look frankly dead in the water. That's where Europe is.
00:26:03
Speaker 1: Paul John Ferrell. First time I saw Pharaoh was at the ECB one in Frankfurt.
00:26:09
Speaker 5: S was this guy?
00:26:10
Speaker 1: Yeah, this first time I saw him. Pharaoh demands a red sticky. So we've got a red sticky, a headline of famous Bloomberg red sticky. ECB rates may fall if we're confident, Paul, inflation heading to two percent.
00:26:23
Speaker 4: Good law exactly. So, Marcus, I mean give us a sense of how the economies are across the European Union here, because I mean I think again. As you mentioned, the stimulus here in the US is boy, it's done its job. But give us a sense of how in need do you think of the European economy is for rad cuts?
00:26:43
Speaker 5: What level of desperation do you need? I mean, we have to get down on our knees and beg these people. But I mean literally four percent rates may not sound high compared to what they are in the UK and the US, but practice speaking, when they've come from negative fifty and eight years of sort of zero below rates in Europe, this is a very high rates relatively speaking. And you know, really there's no signs of life. I mean, the economies are either flatlining at best or they're sinking recession like Germany. And there's no prospect of any growth. That's the thing that's that's depressing. There's nothing good on the horizon coming, Marcus.
00:27:17
Speaker 1: Some guests have said there's still an austere trend there in austerity that's part of the culture. Are they following a theory that's in the textbook, like in London at LC Paul Beg b Egg. The Beg is the one volume. It's like the man Q or the you know, the one volume e kind one on one textbook. Are they file on a textbook Marcus Ashworth or are they making it up just like the FED, except with a cultural template of Asteria.
00:27:46
Speaker 5: They're busking it. They're not. They are making up in the sense that they are desperately trying to stick to this shibleuth of my word. Inflation is too high, and it's awful, and we must wait till absolutely every single inflation number is now that two percent below. They're not far off that. Inflation's at two point four in Europe two point nine on the core, but it's going to be down to two very quickly. The ECB forecast it to be at two point two in August. I think it will be there next month, and down below two percent it will go and it will stay below two percent. That's my fair is actually not just disinflation, but potentially deflation. If you get a proper recession, which is right on the verge of in Europe, then I think I'll get EASYB will lose control again.
00:28:28
Speaker 1: You see euro moving rather one oh seven thirteen. We're about ready to get a one o six handle and euro that would
be your Maine. The press come.
00:28:36
Speaker 4: Parity exactly Marcus talked to us about the UK. Hou's the economy over there, and what do you expect.
00:28:41
Speaker 5: From do I have to?
00:28:44
Speaker 4: Yes, Tim, and I will come over there and stimulate that economy.
00:28:48
Speaker 1: That's what you mean, Marcus, This is important. I read. I get up folks at like one thirty and read nine newspapers, and I finish with the British newspapers because they're the freshest. It's six am. Even is up reading them.
00:29:01
Speaker 5: And you know you read the ft.
00:29:02
Speaker 1: In that, Marcus. I read the Telegraph. I want to slit my wrists. Isn't that bad over in the UK?
00:29:08
Speaker 5: No, it's not at all, And then the newspapers are making far more out of it than there really is. It's fine here. In fact, I've many of these, a bit more growth in UK than there is in most of the rest of Europe. Things are fine, they're not brilliant. I think we'll have inflation much lower than two percent by the summer, probably down at one point five and lower. So the question is will and will the banking will ever wake up and cut interistrates. Well, we might get one in June of a lucky but a bit like ECB today, they're still in Denial.
00:29:37
Speaker 4: I see the old fire alarm is going off a Queen Victoria Street in London.
00:29:40
Speaker 5: Flames are behind it.
00:29:41
Speaker 1: I got that the fire alarm is there because franc In the quasi of and a tantrum that they're at a Eli espresso. That's where fire alarm's gone.
00:29:51
Speaker 4: Us Marcus talked to us about Germany, because that's you know, as goes Germany, as goes a lot of the the EU is kind of how a lot of us over here in the States figure it, their dependence on China, that type of thing. What's the latest on the German economy, Well.
00:30:05
Speaker 5: I mean they are in a very bad situation where their basic model of cheap Russian hydrocarbons it has gone probably forever, and their main export markets to China and Russia as well are nowhere near as strong as or non existent now. So you know, we've got a real situation with electric vehicles where Das Auto has got a major competitive problem now ironically with China, because they've they've sold them all a kit over the years to make the machines and now they're trying to those machines have been sold back to them, so it's it's really not great. Jammy at one point is got a great fiscal balance, it's got a resources. It'll be fine, But for the short term it's pretty bleak.
00:30:47
Speaker 1: Right in in Marcus. Just to help you here, when there's a fire alarm at Queen Victoria Street, I know that you all gather at the ned Yep in Secone's is the bar when you exit the buildings Worth with a little fire alarm theater in London with good perspective on the ECB. Now a look at the front pages. What's making news around the world. Your daily roundup of today's headlines from major publications. Bloomberg, Survanas with futures and negative twenty five PPI. Here in forty minutes. We're always brought to you the newspapers. Alisa Matteo hour brought to you by ibk R Financial Advisors switched to Interactive Brokers for lowest cost global trading and turn key custody solutions, no ticket charges, no conflicts of your interests. Do that at ibkr dot com slash r ia. I looked at the newspapers. They were nuts today at the angry Beavers. Lisa tell us about the.
00:31:53
Speaker 8: Newspapers, this is something we talk about all the time as we start to see people roll into the office. New York City's return to office years eighty percent, that's what they're saying, and that's thanks to banks. Actually, it's a good write up in Bloomberg. It points the Goldman sacks JP Morgan Chase one of two of the big ones, a rebound. Also in Miami, two people going back to the office. So the study says return to office rates last year for both cities were the highest among seven major markets, above the national average of about sixty three percent. Some more people coming in coming into the office, not buying it.
00:32:26
Speaker 1: You're not buying it.
00:32:28
Speaker 4: Look at that the senior BI management is in New York today, So that's a rare sighting. So good for them.
00:32:33
Speaker 1: When I find it interesting, I know, because of time, we can't go on all day about this. I'm watching every single tweet in elon musk X there's a feed of all the busted suburban class B properties, and to me that folds right over into what's happening in Manhattan or Chicago or a great article. I'll give you the journal credit on Saint Louis. The other day, there's something going on out here, Paul, way bigger than what we've got here.
00:33:03
Speaker 4: Yeah, I think the commercial real estate issue is going to be a multi year issue that we're gonna be dealing with.
00:33:08
Speaker 8: Ru Yeah, New York City airports, you've been there lately they look a little better. Yes, Yes, they look much better. Twenty sixteen, you remember JFK, Newark, LaGuardia. They're among the ten worst. So now things are getting better. You have LaGuardia's new Terminal B, Newark's new Terminal A. In March, LaGuardia actually earned the title for best airport in North America. But you have JFK too. They're undergoing a nineteen billion dollar worth of construction on the terminals, expanding ones, upgrading the roadways. By twenty twenty six, more than thirty billion investment is going to go into making them all state of the art airports.
00:33:41
Speaker 1: What I noticed in that article, which goes to the magic of very high feed Heathrow or Zurich, is the maintain and they're putting incentives in I think now so that these palaces that we've built won't be ruined in two thousand and thirty or twenty thirty five. To me, the maintenance of these gorgeosities is really to me important and the lines have been pretty good recently.
00:34:08
Speaker 4: Even at I'm heading over to Terminal A at Newark
in a few.
00:34:11
Speaker 1: Hours to ask where we go. We're going down the show.
00:34:15
Speaker 4: We're going down to Durham, North Carolina to see our friends at Duke. So but the Terminal A has been it is amazing.
00:34:21
Speaker 1: It's really nice.
00:34:22
Speaker 4: It's European nice.
00:34:23
Speaker 1: Now you're going to talk you is Caliad? Did you come down to see about Arkansas now?
00:34:29
Speaker 4: And I'll check in with coach Shire down it.
00:34:31
Speaker 1: Can you do that? Lisa?
00:34:32
Speaker 8: What else do you We talked about the Masters before kicking off Augusta National today right, a little bit delayed because of the weather. But the Wall Street Journal has a good look into the golf industry itself. You know, the golf is a great game, but is it a good business? That's the question. So there's been a number of rounds played growing nationwide, uptick and new golf course development. Private clubs have waiting lists for memberships. Some are saying though that popularity is going to start to fall. But the people, the way people experience golf, that's also changing. Two which is helping the sport. You have the top golf era right, people go into top golf driving ranges. You have the mix of entertainment, drinks, friends, you know, everybody having a good time. Golf club membership is offering more. They're converting these boardrooms into family dining rooms. They're offering daycare, junior golf characters.
00:35:18
Speaker 1: They're offering more. I'm looking at have you done top golf?
00:35:21
Speaker 5: I've done it.
00:35:21
Speaker 4: Yes, it's a lot of fun.
00:35:23
Speaker 1: It's a lot of fun. I'm looking at it, and they want it to be one big party alcohol led Okay, great. Can they teach me to play golf like they can Damien SaaS Hour.
00:35:33
Speaker 4: I don't know about Damien SaaS Hour, but I mean the weightlist our club is eighteen months. It's the biggest it's been in about fifteen twenty years. So, but any think about the pandemic when everybody was locked down the golf course was past.
00:35:45
Speaker 1: Want everybody to understand you can, yes, and Sarah knows this in the control room. Sarah, the closest I get to a weight list of the club is Famiglia at Madison in ninety seventh Street. You have a weight list at your.
00:35:56
Speaker 4: Club, yes, eighteen months.
00:35:58
Speaker 1: Well, how much pray tell is the upfront money once you just wander off the weight list.
00:36:03
Speaker 4: I don't know what the number is. I'm gonna say fifty wow, maybe.
00:36:07
Speaker 1: Five oh five oh fifty dollars?
00:36:10
Speaker 4: Yes, put a couple of fifty coma yeah, I think yes, some something along with at Lisa.
00:36:17
Speaker 1: We're not breathing the same oxygen.
00:36:19
Speaker 5: God, what else?
00:36:20
Speaker 8: Since we're talking about the price of golf. Okay, so all the billionaires moving to Miami, the price of golf memberships there have skyrocketed. Okay, you have top clubs around Miami double or triple their membership fees since twenty twenty. Uh, here's the figure high six and seven figure joining fees. That's what they're charging. Nearly impossible to get in. Like you said, they do have the weight list too, but then there's more that are coming in, so they're starting to grow.
00:36:45
Speaker 4: You have just a million and one golf courses down there you fly into, like Miami for lauder doll everywhere you look, there's a lighting lists crazy.
00:36:53
Speaker 5: But they're building new ones.
00:36:54
Speaker 8: There's a New York base developer Witcoff. They're planning one in Pompeach area. And that's going to cost three hundred and fifty thousand.
00:37:01
Speaker 1: Caddy for years at Country Club in Rochester, and it'll kill honored to caddy there in sixty eight, not for the open, the Leech Travino Open. But I can't imagine how busy the courses are now. I can't, Paul. I can't imagine the pressure on a Saturday and to keep it moving. And there's some guy in the green lining up ten taking it out Friday.
00:37:23
Speaker 4: Now that nobody works on Fridays. Everybody hybrid works on Friday. Packed on Friday. It's kind of like the old days when we have like the cars all lined up.
00:37:32
Speaker 1: Anyway, So thanks, I don't know well, Lisa, thank you so much. This is a Bloomberg Surveillance podcast, bringing you the best in economics, finance, investment, and international relations. You can also watch the show live on YouTube. Visit the Bloomberg Podcast channel on YouTube to see the show weekday mornings from seven to ten am Eastern from our global headquarters in New York City. Subscribe to the podcast on Apple, Spotify or anywhere else. Thank you listen and always, I'm Bloomberg Radio. The Bloomberg Terminal and the Bloomberg Business app.