The Fed Decides and Rate Cuts Remain Uncertain
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Bloomberg Audio Studios. Podcasts. Radio. News. This is the Bloomberg Surveillance Podcast. Catch us live weekdays at 7 a.m. Eastern on Apple CarPlay or Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. What an honor to have with this Noel Rabini. Professor, he's not emeritus. You travel like he does.

He's such a young kid. I don't know how emeritus he is. At New York University, of course, Chairman Rubini at Global Economics. One of the great moments for me was with Professor Rubini in Davos a million years ago, where he simply outlined 2007, 8, and 9 to come. Norrell, I don't care. The reason you're here... Mm-hmm.

is I'm looking May 31st, Munich. I mean, a hitter like you, you gotta be looking the private skybox on StubHub Inter Milan versus PSG for $29,000. You got two seats in the private skybox. Are you gonna roll that?

- I'll watch it on TV. - It's very exciting. He's a diehard from his youth in the old world, Inter Milan fan. I want to go back. This is really serious, folks, and it's off the radar right now. It shouldn't be. Brad Setzer, who you started, has been on fire. You and Brad Setzer wrote a book

11 years ago, whatever, Fred Bergsten wrote the wonderful introduction on EM. How does EM affect it? When I see Taiwan dollar go out five standard deviations, whatever, how is emerging a market off the radar affected by China, U.S., U.S., Canada, U.S., EU? What happens to your EM? Well, the good news for EM is that this time around,

the trade shock have not led to a strengthening of the dollar, but rather a weakening of the dollar. And where the dollar weakens, EM currencies tend to appreciate. It's also true that some of these Asian nations are sitting on trillions of dollars of US treasuries, their foreign reserves are very high. And there's been some diversification because we've dented, how to say, the dollar as a major global reserve currency given our unstable policies.

So, these people move out of U.S. Treasury and sell them and then go back to their own local currency. There has been some appreciation, and that has taken some momentum. There's also hope in Asia, I think, that there will be trade deals, and the announced reciprocal tariffs are going to be much smaller than announced on April 2nd. That's also strengthening some of these currencies because some of them were weakening because of the risk of a trade war and so on. So, I think there's a variety of factors leading to that happening.

How concerned are you, if at all, about the U.S. economy in the face of the uncertainty of all this trade discussion, the back and forth, the back and forth? It seems like consumers might be pulling back. It seems like corporate executives are pulling back on guidance. They're not sure how it's going to impact their businesses. How do you think that's going to affect the U.S. economy?

Well, there are some headwinds coming from trade and its uncertainty, and there are some tailwinds coming from strong CapEx, especially AI-driven and still good income growth creation and so on.

I would say that over the medium term, actually, I'm quite bullish about the US economy. I think that because of technology, US potential growth by the end of the decade could be 4%, an increase of 200 basis points. And even poor trade and migration policy can reduce growth only by 50 basis points. So the ratio within the good stuff, 200 basis points to the bad 50 is 4 to 1. So I think we'll be on the verge of a secular boom over the next few years.

So I'm quite optimistic. But then in the short term, we'll have probably a new recession by your end. There is an increase in... Well, you mentioned a medium term. You've got to be from Europe to mention a medium term. We don't do that in America. My basic conundrum, Noura Rabini, is we've got the short-term reality within an American political system, which you live with President Clinton,

out to the long-term view of whatever Trump economics is in maybe a more optimistic future. How do we get, as they would say up in Maine, Norio, you don't know this, up in Maine where Lisa collects black flies, they get from here to there. How do we get from short-term to long-term success?

The way we get it is this year there will be a massive slowdown of growth. As you point out, consumer and business confidence is down. Inflation is going to go, core PC, to 4% by year-end. That's going to be a significant hit on real disposable income. So by Q4, we're going to be in a near recession.

The good news is that the Fed is now credibly committed to fight inflation. They're not cutting rates. Therefore, inflation expectations are anchored. Therefore, once inflation is higher but growth is lower and you have a beginning of an increase in unemployment rate, the Fed is going to be able to cut rates. I think it's going to be a short and shallow recession, maybe a couple of quarters. Right.

Q1, Q4 and Q1 of next year, and then we'll have a strong recovery because the tailwinds coming from technology are massive. The US is leading in all the technologies of the future. - Claims are out there on plan. Unit labor costs and productivity were elevated. That's what we'll talk about here. Unit labor costs jumped from a revised 2% up to 5.7%. I got a tariff regime of 3%. You arguably were one of the people that set up coming off the Atlantic Charter

the global trade, the globalization mantra of a lower tariff regime. Even if we pop from 145% drama in China and we come back down to like a blended 13%, I don't get it. Isn't the gap from a 3% blended tariff up to a 10% or 13% blended tariff, isn't that insurmountable?

Probably the blend is going to be more than 13% because my baseline is 10% to 15% for all the world and 60% for China. So the blend could be in the high teens. It's a bad world, but let's put it this way. Suppose that there is an average tariff, say, reciprocal on Europe of

10% as opposed to 20%. Big deal. The euro can go up and down 10% in a matter of months. So is it good? No. Is it terrible? Is it going to destroy the world? Probably not, because currency can move more than 10% in a matter of months. So, of course, it's a world that is fragmented. It's a world that is deglobalized. But if the average tariff were being, say, 10%, 15%, rather than only 3%, the impact on growth is going to be

how to say, moderate, I would say. This will be moderate. Of course, with China, it's a different story. With China at 60%, we're going to decouple from China. And the shock on their growth and the shock on inflation is going to be significant. So I'm more worried about the fact we're not going to de-escalate with China to a certain extent. With all of your political economics, Nouriel Roubini, do you believe common sense will come to the rescue in Washington?

Well, more than common sense, in December I said there'll be four guardrails against stupid policy like tariffs, market discipline, good economic advisors, Fed discipline, and thin majority in Congress. Guess what? When the stock market crashed, bond yields were higher, credit spreads are higher, they're always higher, they blinked.

they started to de-escalate. Two, in that game of chicken between Trump and Powell, Trump blinked because he knew he was going to fire Powell, there'll be a shock to the market. So he blinked and therefore Fed independence was a binding constraint. Eventually the Peter Navarro of the world were sidelines and the Scott Besson of the world had the upper hand, good economic advisors.

the fact that he was boxed in by four guardrails. That's exactly what they said in December. I'm running out of time. I got goosebumps because I got Nora Rubini and Richard Portis back to back. I mean, it's an academic wonk fest here right now. Have you ever done a panel with Peter Navarro? I've not done a panel. I met him during the Trump administration in the White House a couple of times. So

It's strange, he has a PhD in economics from Harvard. Did you teach Navarro economics at New York University? No, no, he was a PhD at Harvard, but we didn't overlap. Yeah, surprising, a PhD in economics from Harvard, but Steve Milan has also a PhD in economics from Harvard, so do I. I got 20 seconds. How does Inter Milan beat PSG? What? How does Inter Milan beat PSG?

I don't know. You're going to be there. You spent $28,000. Noor Ravini, thank you. Hopefully, Inter is going to win. Lisa wants to know, when's the new book out? I don't have a new one. Megathreads came out two years ago. It's still going. And all the themes of the book, Megathreads, are still very important today. All the threads I talked about are materializing. Okay. So...

Thank you so much. Greatly appreciate it. Norio Rabini, I can't say enough his commitment to what we do here in economics, finance, investment, and his international...

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Ken Shinoda joins us right now with a pedigree of TCW over to DoubleTree, DoubleLine Capital. Thrilled to have you with us, Ken. You've got a different gloss from Southern California than the rest of us. When you look at Port of Los Angeles, Long Beach dynamics within the finance and investment community of LA, what's the tone on this trade where it's different than New York?

Yeah, well, you know, you're seeing a slowdown in port activity. We saw a big pull forward of imports ahead of the tariffs, which is one of the things that led to the decline in GDP in the first quarter. And we're waiting, watching to see how the hard data now comes in. You know, sentiment has rolled over pretty dramatically as you look at consumer and business sentiment. And I think the market right now is just waiting and watching for what the future data holds.

I'm looking at the INGO function, the Bloomberg Index browser. For fixed income, U.S. mortgage-backed securities have been the place to be this year so far to date. How do you guys think about that part of the business? Yeah, it's been a good run. Mortgages struggled dramatically during the rate rise and the coming out of QE into QT,

Sometime in the middle of 2023, at the peak of rate volatility, the MBS index was about 200 basis points behind the corporate bond index, annualized for five years. Wow. I mean, that's hard to do in fixed income. Nobody wants to talk to you. Yeah, but from these valuations, we're over 90th percentile on the MBS spread, and we think that's an interesting place to be, especially in...

And when you're worried about kind of more risk off potentially, MBS tends to outperform corporate credit. So where do you guys see value today? I think what our market probably has characterized most is just uncertainty out there in the marketplace, whether it's corporate America pulling back some of their earnings guidance, whether it's the volatility in the bond markets, the equity markets, uncertainty seems to be the story of the day. How does that impact kind of fixed income and agency markets?

Yeah, well, you know, fixed income finally has kind of been a stable place with the Fed, you know, not cutting, but done hiking. It's kind of been a place of stability in portfolios. So I think people are kind of understanding the value of it. Everyone's been hiding out in T-bills. So I think it's maybe time to move out of that T-bill trade and you don't have to go

totally out the curve after the 10 year, but kind of the belly of the curve, the two to five year portion of the curve, find a lot of opportunities there. But as we think about the credit landscape, you know, tariff uncertainty kind of hits the corporate market a little bit more in companies. If you go away from companies more to assets that are backed by consumer credit, things like mortgage backed securities, even credit cards, auto loans,

parts of the securitized market like commercial mortgage-backed securities, you can find sectors that aren't as exposed to tariffs. And one could argue that increased labor costs, increased material costs will inhibit the supply of new homes. And that'll actually be positive for home prices.

Ken Shinoda, with as thrilled as he could be with us with Double Line Capital, and of course you know it, associated with the wonderful and handsome Jeffrey Gundlach. Good morning, 92.9 FM, up in Hanover, New Hampshire, the land of Dartmouth, where Mr. Gundlach matriculated.

years ago. Give me the line from DoubleLine, and I know Jeffrey's really opinionated on this, on private equity and private credit. I'm going to state that's off your remit. This is not the way DoubleLine rolls.

But where are we ending up with private equity and private credit? You know, private equity is struggling to get cash back to investors because the M&A market's kind of slowed down. The IPO market's slowed down. And so you're seeing a lot of desire to sell in the secondary market. So there's going to be big growth in secondary sales. Give me a haircut. What's a percent?

Pardon me? What's a percent of haircut that you guys observe? Oh, I mean, I think you could easily get 10, 20% discounts to the NAV on those sales. And then the private credit markets, I think one of the reasons we didn't go into recession in 2023 was that, you know, the old school way of these cycles is the Fed hikes rates, the capital markets kind of shut down, companies can't access the credit markets. Yeah.

start laying people off. You go into recession. Well, guess what? That happened. Fed hiked rates. The high yield market, bank loan market was effectively shut down for a little bit, but private credit came to the rescue. I think the challenge is going to be for investors is that we haven't really seen the credit cycle. And at some point in time, there will be losses. And we'll see how investors feel about that. I mean, I'm just thinking about the mortgage related opportunities in your business. And we haven't really seen the

i don't know i i haven't seen like major blow-ups in the credit side of the mortgage business i mean banks haven't been taking huge write downs i haven't seen small banks blow out their numbers terribly because of of more mortgage loans where's the pain

You know, the banks healed themselves after the global financial crisis. They took less risk. The regulators have cramped down on them. So, you know, there's been some pain. Some banks have exposure to commercial real estate loans. But I think we did a good job in the U.S. kind of making sure that they don't take too many risks. What do you think of Buffett's cash flow?

Gazillions. Does DoubleLine, do you have a sideline bet with a gazillion dollars of cash you'd like to tell us about? Yeah, you know, he's probably happy. Cash has been a good place to be. And, you know, I think there's a lot of uncertainty out there. It's going to shake the markets up.

As that hard data comes in and he's going to have some good buying opportunities. Very good. Ken Shinoda, really wonderful to visit with you. Don't be a stranger. Thrilled that he's with us today with Double Line. Just as simple as that. They've had a huge impact and particularly, you know, following the Gunlock Shinoda view has been something a lot of people have done.

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You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from 7 to 10 a.m. Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app. Or watch us live on YouTube. Professor Portis of the London Business School with us today in studio. The president speaking at 10 o'clock.

The Starmer speaking a bit later, I believe, on a comprehensive trade agreement. And, of course, with Sterling moving in the Bank of England, it's a four-hour conversation. But we must start, Professor Portis, with a gentleman who was so kind to me, I can't say enough about what Joseph Knight did for me, along with many other people. And all of this was wrapped around his invention of international relations and soft trade.

What is the legacy of the giant of Harvard? I'm afraid it looks rather shaky now, sadly. Joe was a wonderful person and a terrific intellect, and the soft power concept really made headway during the day when soft power could exercise power. Now it seems that we've shifted away from that, and the environment, the international environment,

is not conducive to the use of soft power. I see a substitution here that's off the mark. I see the chaos of Liz Truss. I see what we see out of 1600 Pennsylvania Avenue. And the fallback is it's a Kissinger real politic. I don't buy it for a minute. I don't see an underlying theory towards Robert D. Kaplan and Henry Kissinger. Am I right? I think that is right. There's no underlying theory, but we are in chaos mode.

honestly, internationally, and to some extent domestically in this country, in the United States, and a bit in the UK, and some in Europe as well. So it's not good. The multilateral system is coming apart. And someone like Joe Nye, for example, was a great proponent and advocate of multilateral stability.

And it's going. Professor, at the London Business School, when you talk about tariffs, when you teach your students about tariffs, what context do you put tariffs in?

Tariffs are a legitimate trade tool in certain circumstances, but the kind of wide-ranging, blunt tariffs that the current administration is imposing seem to me to be very misguided. They will be inflationary. They will be contractionary. The funny thing is that they've been complaining

Stephen Miron, the chair of the Council of Economic Advisers, complained that the dollar has been too strong. Well, they've been very successful in bringing the dollar down, haven't they? Right. By causing some degree of chaos. So that's, you know, they shouldn't be complaining about that anymore.

And we'll see. We'll see how he adjusts. This trade deal with the UK that is supposed to be announced in just a little while will not be any kind of comprehensive trade deal. It'll be good for us in the UK on cars and steel. And we have problems with both those industries. But really, our main exports to the United States are services.

The good side just isn't that important. In the UK, how are they viewing kind of our trade posture these days? Are they trying-- do you think the UK is going to try to be accommodative, combative? What's in their best interest? I think Starmer is-- the prime minister of the UK is treading a very fine line and not quite clear which side of that line he's falling on as between the European Union and the United States.

And he's trying to have it both ways, good relationships with both, but it's not clear that that's going to be feasible.

So he may, in due course, have to make some tough choices. If he will portray this deal with the Trump is about to announce, he will portray that as a great step forward. As I've said, I don't think it's a great step forward. It's useful. But the baseline, as far as I can, as far as I understand from the press, the baseline 10% tariff will stay.

A spectacular Thursday for you. Nora Rabini and Richard Portis with us now. Professor Portis from the London Business School. Anna Wong. We'll get back to the markets here in the 9 o'clock hour. Michael Nathanson with us on media. And also Jens Nordwig will be with us on currency. I'm told Dr. Wong will be in studio. Very rare for her to break away from her entourage. Professor Portis, thank you.

I think for Americans, if you read the British papers, it's almost a febrile political vibration, if you will, across the different parts of Great Britain.

When you look right now at what we're seeing, which is reform, Nigel Farage coming on, what is the character? Are they, quote, like Trump? Are they like Barry Goldwater from another time and place? What is the character of the Farageites? Barry Goldwater we could live with. The reform is a different story. No, they're much more like Trump, actually. And they, to some extent, are modeling themselves on Trump.

and trying to get the Trump imprimatur. So I think, are they dangerous in the medium term to the established parties? They are very dangerous to the Conservative Party. They are clearly pulling off a lot of Conservative Party voters. And the Conservative Party may be in terminal decline, which would be a huge political revolution in the United Kingdom, given their

their dominance over political activity since the mid-19th century. So that would be a big thing. But I somehow, I think that the Farage effect and so forth will moderate as we get closer to serious general elections. And I honestly, I cannot see them holding the same position

save position in the polls a couple of years from now that they hold now. And they've just taken over a number of local councils and mayoralties. They're going to have to run these local governments. And they have no experience in doing that. And they're going to look bad. Professor, whenever we get you in the studio, we have to ask you, what is the view of Brexit today with a little bit of hindsight? Good question. I think the view of Brexit now is wider and wider understanding what a disaster it has been.

the economic effects, the political effects.

And reform is one, in a sense, one response in some dimensions to the politics of Brexit. And it's beating on the voters that still believe that Brexit must have been a good thing, even though they're not feeling it. So when English fans go over to Paris for a soccer match, do they have to go through customs? Sure. That in and of itself should have been a deal breaker. Absolutely. No, you can't.

You go through passport control. They're just like Americans. Oh, my goodness. We've lost some of our liberties. Yeah. Professor Portis, thank you so much. Richard Portis of London Business School. This is the Bloomberg Surveillance Podcast. Listen live each weekday starting at 7 a.m. Eastern on Apple CarPlay 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 1130. Michael Nathanson, he's a founding partner and senior research analyst at Moffitt Nathanson. And folks, just one of the leading, leading voice on global media. And today we want to really focus on this little company called Google. Some of the kids call it Alphabet. There's some interesting comments coming out of Apple yesterday from one of their leaders. And it kind of goes to the core topic.

of the Google story, which is search. It's the stuff we grew up on over the last 20 years. Michael, thanks for joining us here. Again, we had Eddie Kueh, Apple's Senior Vice President for Services, in testimony yesterday down in Washington talking about how they might think about AI as a replacement for maybe some of the traditional search that we all grew up with. What does that mean for our friends at Alphabet?

And then they also went on to say that, you know, search traffic was declining through their own Safari browser. What it means is that the next five years, we all will search differently and it's going to take a little bit of time, but more and more mainstream people will use chatbots to get, you know, single answer results.

answers on queries, right? So the idea of going to links and finding the answers as you travel the web will be old school. New school is gonna be, here's your answer

the question is that's for one type of search which is non-commercial but what about commercial search but yes the goal is to give you one answer using an ai chatbot to give you what you want and not have you search all over the web for the you know to find the information so how does i mean that's the core of google how do they respond how do they adapt okay so google's been responding

uh and they've been doing a very measured right so they've introduced something called ai overviews so if you do search now you will see some of the you know above above the links an overview section which gives you the answer that you want right their point is in the overview section people then tend to click from there

to a destination and they spend more time in the destination so that gives you an overview clearly but if you're interested in the history of the new york rangers you'll leave that overview and go to the ranger home page right that's what they're saying secondly in shopping e-commerce you will get the one you know if i'm looking for running shoes i will get the best running shoe for me but

But if I'm a retailer, I will pay more for that query, right? I want to find my intention in that search, right? So that's what's going to happen. So, Michael, we've got to move on to another important topic. But the basic idea here is do you believe Apple will lose the Google search mechanism in place right now?

yeah Tom that's you know Craig has a cell on Apple in part because we think when you read Judge Mehta's decision and where they're going in this case right that looks like you know Apple will not be able to get the 20 billion of tack they're getting now from Google so it's going to change yeah Michael I mean it was an option I could look at New York Ranger highlights for the season or

Or watch every episode of Andor. You need to explain to me how Disney spent $650 million that they admit for two seasons of what Cass and Andor is doing, and they somehow make money off my $19 a month. I still don't get the math. How do they do it? Yes.

Yes. Well, again, Tom, you know what? If churn rate is only 1% or 2% or 3%, not everyone's watching and or, and they've taken pricing on Disney+, and basically people are happy with, you know, they're not churning out a product. It's kind of amazing, right? Now, Disney is an anomaly because they also have kids programming, but, you know, churn in streaming is pretty high. Look at Warner's results today. You know, we'd argue it wasn't a great result. So that's a whole other topic.

So, Michael, as it relates to Disney, did they finally turn the corner with your clients, with institutional investors out there yesterday by saying, hey, we are solidly profitable in streaming. We figured this stuff out. Parks is a great business. You all know the parks is a great business. And just don't even worry about the cable networks. Have they sold that story?

Well, Paul, that is exactly the story that I would sell. And you just framed it really well. I think people are still worried about the macro. It's hard not to when we listen to Bloomberg Radio in the morning. So I think yesterday also was a bit of a response. No, no, come on. It's...

it's you know these are nervous times right but we're so worried about the parks and historically parks tend to be a little bit later you know in terms of Canaries and coal mine so I think the recovery in stock yesterday was like hey we're not seeing it yet at Disney we're good for another quarter but Paul to your point if they can do seven bucks of earnings which has been a mythical number at Disney for years

And it's all parks at all streaming. The stock's worth a lot more than a hundred bucks right now, right? That's what I think people are waking up to. Michael Nathanson, I'm fascinated by the execution of Brian Roberts Incorporated. I mean, there's eight ways to go here. Folks, for those of you worldwide who

NBC is splitting apart some of their Moffat Nathanson world into different announcements, different geographies, lots of emotion within the Bloomberg 1130 region. But take it worldwide. Are we going to see every media company do this Michael Nathanson where they split apart the conglomerate? Tom, that's what's going to have to happen here, right? Because the market doesn't pay anything anymore for cable networks.

So basically those assets will be shedded, but what's left

there needs to be consolidation. This has been a theme we've had with you for years. So you can break out the cable and outside of Comcast, you still have a problem with Peacock. It's not big enough. It's not global. You need a partner. So I still think we have, yes, smaller companies with less assets, but at some point a consolidation of what's remaining. But we're not there yet because I don't see M&A on the table because of regulatory issues.

Well, Michael, that kind of goes to, I mean, you mentioned Warner Brothers Discovery. Again, their numbers were a little disappointing here today. But you think about the Warner Brothers Discoveries, the Paramounts, maybe even some pieces of Comcast. Is this an administration that would allow this industry to consolidate, do you think? No, for those of you who are listening in your car, I'm nodding my head. I'm shaking my head no. There's no way...

There's no way that this administration, they're holding up a deal with Paramount because of 60 Minutes, right? There's no way they're going to allow these companies to get healthier through consolidation. It's not going to happen. Michael, single best buy, please, before we go.

Tom, my single best buy at this point in time, we've been pushing Meta here. It's pulled back a bit. We've been pushing Meta. Robert, who now covers media, has a buy on Netflix. We've had him on at Disney. So I'd say we're going with the hands that are winning this year. That's what we're pushing. But to be fair, Meta has not been winning.

It's just, I think it's a safer, it's a safer play of your large cap tech stocks. AI is seen as a beneficiary to them. And that's a hard, you know, it's a hard ask for some of the other companies. Oh, Lisa Mateo is a hard ask as well. Can Mike Sullivan get it done for the New York Rangers? Oh, Tom, we need to change a lot of players on that team. It's not the coach. It's the administration. You got to get rid of the GM also. You just want to go there. Yeah. But yeah,

Yeah, but I'll tell you this, on the question of the day, which is Alphabet, I think the market is big time wrestling about how disruptive AI will be to these companies that have been bulletproof for most of my career, right? Like, that's the big change is that finally there's a question mark about sustainability and investment levels.

And I think you've got, you know, Alphabet in that zone of like, look, there's uncertainty here for the first time, right? And it's been a great, great company, great stock. And now we have uncertainty. Don't be a stranger. Michael Nathanson, thank you so much. He co-writes with Craig Moffitt. Michael Nathanson, definitive on Wall Street.

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This is the Bloomberg Surveillance Podcast. Listen live each weekday starting at 7 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal. Lisa, newspapers, what do you have? Okay, we're starting with fashion, okay? We're starting actually with

This is shopping at secondhand stores for fashion. After the Met Gala. Yes, we go from Met Gala and Louis Vuitton to thrifting. Okay. I love doing it. My daughter loves doing it. But Business Insider says, you know what? A lot more people are starting to do it. Go to these thrift stores because tariffs on Chinese goods. So it's cheaper. It's more affordable. They have clearance prices. You have the senior leader at Goodwill saying that it usually happens when times are tough, right? People are watching their budgets. So they go to these thrift stores and

You have Reseller ThredUp. They predict the secondhand market to reach $350 billion by 2028. That's up from $197 billion in 2023. It's all about prices and what you can afford. How's Rent the Runway and all that doing? I never understood renting clothes, but there it is. It works because you don't have to kind of

buy something and then just keep it and just keep wearing the same thing. You always get something new. You, you know, give it back and you get something new. A lot of the young ladies here at Bloomberg News, I see they do Rent the Runway. Sure. They say it works great. They love it. I haven't particularly done it, but I've heard a lot of stories, especially if you, you know, go out to different events like the Met Gala. She's the one that turned me on to that.

Yeah. Next. Yeah, it's a big thing. Okay, we've talked about AI, right? All the different uses for AI. Another way AI is being put to use, I saw this in the New York Times, it's bringing British novelist Agatha Christie back to life, kind of.

Okay. So she passed away in 1976, right? But now you have this avatar of her teaching an online writing course with BBC Maestro. This is this online lecture series, like think masterclass, right? Same thing about $105. So how it actually worked, you had this team of researchers, right? They wrote a script, they used her writings, her archived interviews.

and they made a digital prosthetic, which was made with AI and then fitted over a real actor's performance. So...

this is what they're doing. The company, this BBC maestro says, you know what? We're not trying to pretend that this is really her, you know, brought to life. You know, we're just kind of bringing this to people, but her family though, who manages her say, say they're okay with it. They're fully on board. We maybe just read one of her classic books and how she ends a book like no one else. There you go. I mean, that would be like the strangest thing.

Michael Nathanson with us here in the nine o'clock hour on Google, Apple and AI. What do you got next? Okay. Um, real ID day, right? So we've been hearing so much about the delays at airports, especially Newark. Um, adding to the noise was the big switch to real IDs that started yesterday, but I have one. You're the only one I know, but a lot of people don't, the lines at DMV are crazy. Um,

But it turns out that first day yesterday wasn't actually that bad. The Wall Street Journal said they sent a travel columnist, they tested the system with no photo ID, got there in 20 minutes flat.

I mean, this is from 9-11. Yes. This whole move towards a different ID is from 9-11. And we're finally... And it kept getting pushed back. I mean, what's wrong with the driver's license? Was that really the problem, 9-11? I don't think so. I don't get it. I just don't get it. This is a solution in search of a problem here. Do you have it? No. But I've got the... You have your passport. I've got the passport. I'm not bringing my passport. I've got the global entry card. And that's...

And that still works. And that works. Okay. So, but I mean, talk about a solution in search of a problem. I strongly agree. Oh my goodness. No one's sold me yet that America needs us. No. It's just a complete... It's tough, but you have to go there with the right documentation because my son got turned away three times. New Jersey's compliance with this is like...

The worst in the country. Yeah, I've heard that. Texas is pretty good. Thank you very much, DMV. Okay, are you done? Is this... And now it's a real downer. Sweeney needs a Tang Mimosa. You can't hear me. New Jersey DMV, I've got a lifetime of scars there. Yes, me too. Is there such a thing as a Guinness Mimosa? Oh, yeah, there is. Lisa Mateo, the newspapers, thank you so much. This is the Bloomberg Surveillance Podcast.

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