Markets Watch Middle East Tensions
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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. The honor of going to Robert Harmatz, Ambassador Harmatz, of course, a tour of duty at the State Department recently with Secretary Clinton and with Kissinger Associates. We're thrilled he could join us in the studios this morning.

If we quote-unquote take out a theocracy back to 1979, what's left of Persia after the Ayatollah? Well, the answer to that question is we don't know, and we don't have a very good record in the Middle East of regime replacement with better regimes. If you look at all the regimes that have fallen in the Middle East,

over the years where we have been explicitly or implicitly involved, they have not necessarily been better. And it's very hard to predict what would happen in Iran. There's a strong nationalistic feeling, however, in Iran. And there are a lot of people who may not support the regime, but believe Iran should have

a nuclear power capability, and those people are going to still be in the game. We're going to have Robert Hormats with us, and we're going to come back with Ambassador Hormats here with all the news flow we've got. Again, we welcome you across the country. You're at Fletcher at Tufts outside Boston. You're in the classroom with Stravitas.

And you got Admiral Stravitas, an ambassador of Hormats, you got a piece of chalk in your hand. What are our aircraft carriers doing in the Middle East on a diplomatic basis, not a Stravitas basis, but on a Hormats basis? What is our show of force doing? They're projecting power. They're projecting the fact that the United States has not only the ships there, but the ability to use them. The question is, how?

How will we use them? We know that they have been used to a degree to shoot down Iranian drones aimed at Israel. The bigger question now going forward is, A, what is the United States going to do with respect to involvement in the war? And that would really depend less on those carriers and more on B-2 bombers.

If the U.S. is going to use bunker busters, those are the ones that would deliver it. And that decision has not yet been made, but it, I'm sure, is what the Israelis are asking us to do since they don't have the power or the ability to take out these underground enrichment facilities. And therefore, they want us involved. And Trump, of course, seems to be reluctant to do that, although of late, seeming a little less reluctant.

Regime change, is that something that's even on the table, do you think? Are the Iranian people in a position to even consider that?

At the moment, the Iranian people are, but they do not want foreigners to be the ones to do it. There's a history in Iran of foreigners intervening with respect, say, to Mossadegh. They still remember that the United States was involved in the overthrow of Mossadegh and bringing back the Shah, the new Shah.

or the old Sean L. And they do not like the idea of foreign intervention. So they're very proud people. As you pointed out, they're an old 3,000-plus-year-old empire. And regime change

We have no template here, Ambassador Dewey. We have no template. We have no ability to change the regime. And the Iranians would resist that if Israel did it or the United States did it. They don't want foreigners to intervene. If they do it themselves, it's a very different matter. If we do it, it's a very different matter and a negative matter.

I want to get this in now. We're going to come back with Ambassador Horowitz and the state of our diplomacy in Washington, maybe try to move a little bit away from the conflict at hand. Future's negative 30. Folks, we have at 730 scheduled the son of the former Shah, named the crown prince in 1967. I guess he's a crown prince in exile. But whatever, the family is gone. But is the remains there of a middle class family?

Not a people that would seek out some form of aristocracy, but would westernize their government. I see no evidence of that.

Well, I think a lot of younger people would like to see a more westernized government. I think a lot of older people might think bringing back the Shah's son was a good thing. Don't forget they did the same thing in Spain. When Franco left, they brought back the king. I don't think Iran's that way. There's a whole new generation that's pretty well forgotten about the Shah. Right.

And the Shah's son is actively urging that he be brought back to preserve continuity and bring stability. But whether you can get a large number of people to support that, particularly younger people, that's a big...

Well, can you stay for the next section here? Yes, I'd love to. I've got to sell toothpaste. Please, Bob Hormats with us today. What a joy to have Ambassador Hormats with us with just decades and decades of experience on this and speaking with authority of the generations, the decades of Persia as well. I have to go, Bob Hormats, with your...

not only your service to Secretary Clinton, but to Republicans over the years. You play both sides of the aisle within your diplomacy, working forever with Secretary Kissinger, with Dr. Kissinger. What do you make of the State Department, where our Alexander Hamilton, I think he's got three jobs, if not four jobs. How does the Secretary of State do that?

Well, it is very difficult to do and we've tried this experiment once and it did not work with Kissinger, as you pointed out. He was Secretary of State and National Security Advisor at the same time.

The roles are entirely different. Secretary of State represents the State Department. The National Security Advisor pulls all the agencies together and is supposed to be the intermediary for the Defense Department, the State Department, the CIA, and numerous others. And it is a very time-consuming job. One is to take a longer-term strategic view.

The Secretary of State is more proactive and more immediate in the kinds of things he does, and he has to travel a lot. So I think that Kissinger himself decided that it was not a sustainable thing to do, and he...

encouraged Brent Scowcroft to take over the job of National Security Advisor while he was Secretary of State, and it worked out very well. So you need the two of them to collaborate, but you don't want them to be the same person. It's too much. Whatever your politics, Paul, to mention the caliber of a Scowcroft, of a Hormats, and the others, compared to some of the talent we're dealing with today, is just...

Shocking. Yep. Bob, you represented the U.S. as a president's advisor and summit planner, otherwise known as the Sherpa.

at six group of seven economic summits what's a G7 economic summit what's the goal of these G7 uh meetings well actually I I I started out as the first chirpa at rambouillet in 1975. that's because he could pronounce it yeah he was the only one in America and I was the only one that just spoke French and English and the discussion was in French and English

And the French originally didn't want note-takers or Sherpas. Giscard said, what do we want all these 20-year-olds running around? We want this to be a very high-level thing. They wanted only the heads of state, not even the ministers.

So the answer to your question is that they can't remake the world themselves, but they can fortify or re-fortify the level of common commitment to democracies, to freedom, to free markets, to the kind of common values that we share among the U.S., France, Britain, Germany, Japan, Canada, and Italy.

And that is what they do for the most part by having the meetings themselves. The second thing they can do is they can be the nucleus of new ideas. How do you improve the trading system? How do you deal with all these trade issues that are circulating around there? We're going to talk about, and Mark Carney, who worked with me at Goldman, is very interested in AI, so he wanted to have conversations about how they can work together to develop standards

on ai set the third they wanted to strengthen at least almost all of them except one us um wanted to strengthen sanctions against russia um and russia was actually a member for a period of time and and trump started out this meeting complaining that uh russia was kicked out it should be brought back they were kicked out because they

Annex Crimea. And the notion that if they were in there now, they wouldn't have invaded Ukraine while they were in it, the annex Crimea. So this...

And also, how do you deal with a resurgent China? How do you deal with all the trade issues and other issues with China? That's a good point. China's a whole overlay here. China's an overlay in there. Most of them are European or Atlantic, but Japan's in there, and China's affecting everyone. So how do we deal with them? Professor Hormats, I've got a quality C in the Hormats 102. So, Paul, we've got to impress him right now. If you look at the Imperial War Museum in London,

They've got that map of Lawrence of Arabia with Sykes-Picot. Exactly. And the answer is the French go from Syria in some vicinity of Persia. The British have the Persian Gulf, UAE. There's all that tension down there. We're in God's name of the French in this debate compared to what my childhood of Charles de Gaulle dominant. I'm thunderstruck.

how tentative the French seem to be. Am I right? Well, I would have a somewhat different perspective on that. I actually totally agree with you. De Gaulle made himself a presence. He was the head of the Free French by force of will and his strong personality. I just got back from Paris, from France, where I had conversations with the French and actually with the German national security people

And Macron, who actually was a Sherpa when I was a Sherpa, so we worked together very closely, he does want to strengthen the role of the G7. After all, it was a creation of the French, Giscard d'Estaing. So he wants to strengthen, and I think he will play a very effective role, as certainly will Mark Carney and Merz, the new German Bundeschancellor. So I think that you will see...

him playing a very active role in this, both because he believes in it, he is committed institutionally to it, and I think he wants to strengthen, first of all, Europe's unity amongst itself.

And second, to demonstrate to the United States that Europe actually does have an interest in and the capability of playing an active role vis-a-vis Russia and all these other issues. Bob, thank you so much for coming in. This is just really well-timed, and we're very fortunate to have you. Thank you for having me, as always. The former ambassador, of course, has a wonderful book on America's fiscal policy, which needs an update. Bob, we need an update on your book on...

Our debt, our deficit and our foreign policy. Happy to do that. We'll try to get there 2026. If this government spending in defense goes towards things like R&D that have dual use civilian purposes, who could get spillovers that actually end up enhancing productivity in Europe and so have a more long lasting impact on growth?

To learn more about the intersection of national security and global trade, subscribe to PGM's The Outthinking Investor in your favorite podcast app. How can you grow your business from idea to industry leader? Bring your vision to life with smart business buying tools and technology from Amazon Business. From fast, free shipping to in-depth buying insights and automated purchase approvals, they deliver everything you need to achieve your goals.

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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. The sun arises in New York with Stuart Kaiser. He's out of U.S. equity trading strategy. It's city. It is so confusing right now. I'm just going to ask the basic trading question.

Where's the bet? Where's the speculation on Wall Street? Is the street long? Is the street short? Is the street miss this rally? I would say positioning probably seven out of 10. So that would put the street pretty long, probably not quite as long as we were late February. In terms of missing the rally, you know, probably a little bit. You know, the first 17% of the rally, I think we chatted, you only needed to hold the market for 60 total minutes to get the first 17%. So, you know, you really needed to be invested at the right time. So yeah, I think we,

Probably missed a little bit of the rally, but positioning is pretty full right now. I'd say 7 out of 10. So what are people, you know, the flow you see on your desk, Stuart, from institutional investors, what are they buying these days? Are they buying the big tech stocks that seems to be the easy trade? Are they trying to be a little bit smarter, trying to find some value out there? What are they doing here? I'd say the core of the rally was definitely in that large cap growth at tech stock, without a doubt.

Tremendous re-engagement in the AI trade post earnings when those hyperscalers really doubled down on CapEx. And I think the theme that's really resonated recently is power generation. So it's these utilities that are incredibly levered to the AI trade. All of that said, the last two weeks, that theme has changed a little bit. We started to see kind of smaller cap stocks, some lower quality stocks, the shorts getting squeezed a little bit.

The Middle East tensions obviously stopped that kind of pro-risk rotation and we're kind of back into where we started. Stuart, I've never seen, I think, I can say this, the retail all in bad and the confusion of institutions. Sitting in the turret at Citigroup, what's the tone that you see among, I'm going to use this word with quotes, pros?

Yeah, look, I think, Tom, the difference there is just holding period. You know, the pot shops and a lot of institutional investors are so sensitive to, you know, weekly returns, if not daily, that the volatility we saw kind of pulled them out of the market. Retail doesn't really suffer that kind of mark to market risk. And they've been willing to kind of stay engaged in the markets. If you look at data, though, retail did reduce their margin loans in their personal trading accounts by about $90 billion in April.

So retail did pull back a little bit, but to your point, for the most part, they stayed invested, suffered the pain on the way down, but also caught the entire rebound. What are your hedge fund clients doing here? Are they trying to be smart money and finding value outside of just the market, or are they just playing SPX? Yeah.

Yeah, I think they're trying to be smart about stock picking. The hedge fund community, I think, got hurt during the initial 10% drawdown February to mid-March. They kind of got their risk right after that. And for that reason, we're actually able to play a little bit of offense in April going into May. But yeah, I mean, initially, it's just get my beta on. But right now, it's picking the right stocks. And now for the question of the day with Stuart Kaiser of Citigroup.

Do hedge funds hedge anymore? I mean, just as simple, do they actually hedge or is it just basically guys running money for two and 20 that used to do it for 85 beeps? Well, I...

Well, they do hedge. And I think after February, they're going to be hedging a little bit more aggressively. Look, I think if you look back to the beginning of the year, DeepSeek actually, in hindsight, when that news came out, people thought, oh, my goodness, this is horrible for a video. And then three weeks later, we're at a new all-time high. And I think it kind of gave people a false sense of security. And perhaps to your point, Tom, the hedges weren't on as deeply as they needed to be in late February. But today they are after that drawdown.

So we're going to hear from the Fed tomorrow at 2 p.m. Press Conference, 2-2-30. Do your clients put trades on in front of that or around that, or they do not do that anymore? Definitely do. Definitely do. If you have a view on, you know, in this case, they're not going to cut rates, so that's not a trade. I think in this particular meeting, two things will matter. One will be the economic projections. They haven't updated their economic projections since the tariff news. And secondly, a little question.

more qualitative is going to be what is the messaging from Powell during the press conference? How dovish does he sound? So yeah, you'll get directional views on equities, but you also get people trading the rates outlook, which in this case is not really relevant. I have no clue on the answer to this question. Are there losses out there? Are we going to see into the end of the quarter, oops, we really had a bad quarter in trading losses or-

VAR losses, if you will? You know, this quarter, hopefully not, just given the degree of the rally we've seen and volatility coming down. But, you know, to your point, people make mistakes. It wouldn't surprise me if you did see some losses. But by and large, in the type of rally we've had, I think, you know, most institutional investors are feeling good. And to your point earlier, the regret is maybe not capturing enough of the rally as opposed to having lost money. Stuart Kaiser will be with us again soon, head of U.S. Equity Trading Strategy.

at the Citigroup. 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 11 30. someone that talks and does in the short-term paper market is jerome schneider the miracle of his performance at pimple i looked at your one-year track record a while back and you're just on a roll how are you creating i love this alpha in the short-term space yeah alpha is uh one of those things that basically means how do you obviously create outperformance and and

Here's the interesting thing, Tom. You know, we're in an environment right now where, as we just heard, fixed income is very poignant. It's very topical. We're finding ourselves in a transition, perhaps, of a market orientation, which has been dominated by equities for years. And now the income generation that's been focused on more recently is quite real. Literally real is in terms of inflation adjusted returns. But more importantly, how people are thinking about surviving the volatility in the marketplace. It's income.

and how they're doing that has been most importantly beginning to consider fixed income and the first place they do that is cash and so when you talk about return and alpha and and relative returns tom you know we're really thinking about ways to actively manage your cash in this environment given the uncertainty of outlook given the opportunities to earn in above market inflation adjusted returns and doing so in a lower volatility output

that doesn't necessarily underwrite equity risk. And that's really exciting right now for us in those cash markets. And doing so requires a bit of skill, a bit of diversification, obviously the backbone of PIMCO resources. But all that put together doesn't necessarily mean that you're doing and actively managing your cash if you're sitting simply in a money market fund. So the era of being in T-bills,

sweep accounts, certificates of deposit that we have seen for the past few years as rates moved higher, is rapidly changing. And our job is really to sort of alert clients that they need to be more adaptive to the changes and subtleties in these markets.

How short is short term for you guys? That's a great question. And, you know, we cater to a wide variety of clients at this point in time. Obviously, retail investors are a good deal. But, you know, family offices, central banks, et cetera. These are all clients who are focused on three things. One, capital preservation. The second is liquidity management and

And in that regard, how they think about it is they want relative returns based upon benchmarks. And those benchmarks are relatively money market funds. We're finding more and more clients are adapting and shifting their focus on moving out that space, finding ways to be more adaptive. And that requires flexibility, meaning not just buying T-Bank, but buying corporate bonds, et cetera. And that flexibility adds to the potential for returns. And so that's really where we're finding more engagement with clients. But you didn't answer the question.

I mean, are they, I can't wait for the Giants to play the Dodgers where Mookie, Mookster's going up against Devers with the Giants. I mean, it's going to be painful to say the least. How far out is out? Is it out, to Paul's question, out two years, out two weeks? That's a great, so ultimately it's more than overnight.

And so what we're saying is if you have a need for overnight liquidity, stay in your traditional money market funds. If your liquidity horizons a week, a month, a year, two years, think about segmenting your liquidity into additional tiers of cash. And that's the power that managing liquidity is incredibly powerful to earning additional returns of 100, 200 basis points more than the cash benchmark rates. Jerome Schneider with us.

economist, short term paper guy is is well, is there a disinflationary vector? Like when you show up and you look at your three Bloomberg terminals, the two Monroe traders you've got in front of you, do you see disinflation? Yeah. You know, on the short term in the short visit is visible horizon. The answer is yes. Is it going to remain consistently lower? No. And I think that's really what we're saying is we're dealing with the Fed and hey, you know, we're going to use the word transitory once again, but they're dealing with a transitory era.

of inflation moving perhaps a little bit stickier and growth becoming a little bit more subdued. And that basically lends itself to be a little bit more thoughtful about how they're going to sequence out these rate cuts for the remainder of the year and push some of these into 2026. So I hate to be myopic and sort of betting on the Fed because that's not necessarily how you make money in our short-term markets, oddly speaking. But I would focus on the fact that

In this environment, yes, these are comforting trends for the inflationary discussion, but there's reasons to think that perhaps some of these prices aren't being passed on to the consumer in the near term, and we might see some of that stickiness evolve later on this year and into 2026. That just simply means that we're not really close to that 2% Fed target for inflation policy that they want to embrace. And so you're going to hear perhaps a little bit more compassionate comments

plea from the Fed chair, but not necessarily one that is going to give in entirely. Jerome Schneider, thank you so much. He's had a short-term portfolio management.

If this government spending in defense goes towards things like R&D that have dual-use civilian purposes, you could get spillovers that actually end up enhancing productivity in Europe and so have a more long-lasting impact on growth.

To learn more about the intersection of national security and global trade, subscribe to PGM's The Outthinking Investor in your favorite podcast app.

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Terms apply. For J.D. Power 2024 award information, visit JDPower.com slash awards. 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. Joining us now in studio today for a really important conversation on the state...

of Finance in America. Meredith Whitney is with us, CEO at Meredith Whitney Advisory Group, but far more than a student on the banking, the American banking system. I'm dying to ask you this. Private equity, private credit, I don't think it was around 20 years ago. Did it come out of 2007 and 2008? And what do you think of this beast right now? I think

You know, as you know, in the economy, there's a there's a void. It gets filled. And there was an amazing void created for private credit and private equity, but particularly private credit, because the banks were charged so much for loans and they de-risked. They had PTSD. And it's been a bonanza. I mean, how I focus on it, I've watched.

Firms like KKR and Apollo, of course, right? But the private credit side, which has now come into the consumer market, which is where it really impacts me, I think is fascinating. And so you see the consumer loan market being basically taken over by private credit. Let me cut to the chase. Is the Whitney radar up on this? Wildly up. I mean, what's going on now, I think, is so...

wildly exciting in terms of remember our product like that called home equity it's back with a vengeance and private credit is basically taking it off bank balance sheets so banks are still the 800 pound gorilla but the new entrance there's an entrance uh figure technology that's already number eight in terms of home equity originations and just to put into context home equity um

Home equity loans, home equity lines of credit declined for 17 years in a row. And just this past summer, they started to pick up. And this is Fed data. And at the same time, you started to see forward purchase agreements going out to consumer loans. Anyone who could originate loans, private credit wanted to do a forward purchase commitment. So over $40 billion of forward purchase commitments have been made since September.

Wow. I mean, that's a staggering amount for an industry that's coming into, and also the securitization market is going bonkers. So, you know, my source on all of this is Bloomberg and, you know,

Thank God for that. Thank God. You look at a company like Rocket, their home equity closed-end mortgages are up 47% since last year. You know, let's go back to, you're too young for this. There was 1987, you're too young for this. There was 1998. My radar is up because I didn't see those things coming. Is that how Meredith Whitney feels now? No.

Well, I don't know that I saw the Asian debt crisis and Russian default in '97, and I was in high school in '87. So it was on my radar screen. What was very much on my radar screen was that the bond market was really impacted in '97, and the securitization market came to a grinding halt. So today, the capital at private credit is quasi-permanent capital. So if the securitization market closes,

there's still going to be liquidity. What is your view of the U.S. banking system today? It feels like since, you know, the great financial crisis, maybe the best shape it's ever been in. Is that fair to say? Yeah, there's no doubt. I mean, so the European banks are incredibly well capitalized, and they've outperformed the U.S. banks so far this year. It's a question of how the U.S. banks grow. And I think the bet on the U.S. banks will be if they get capital relief from regulatory reform. Right.

I think one of the things that... Do you think that will happen? Because I know President Trump was talking about that during the campaign. Yeah, I think it'll happen. So if you look at Michelle Bowman's recent comments and even her comments on the Hill, she wants to streamline regulation. Two-thirds of banks, of the 26 banks, so let's take Bank of America and J.P. Morgan out of the equation. Two-thirds of the...

26 banks over $100 billion are considered...

unsatisfactory in terms of regulatory. So they're in a penalty box. They can't do anything. She wants to change all of that. - Meredith Whitney with us this morning in studio, David Gurr waiting by in Banff. We'll get to Mr. Gurr here in a moment. Thrilled to have Meredith Whitney with us on your commute across the country on YouTube. It's our new digital distribution. Just humbled by that. Lisa's been doing some nice YouTube stories about the reach.

We're on Bloomberg Podcast. Subscribe to Bloomberg Podcast at YouTube. The joy of Meredith Whitney research, folks, is there's the whole image thing in the decades of Meredith, the controversy, if you will, but the research is bulletproof. The written research is why global Wall Street, whether they like it or not, agree with it or not, pay attention. You have a spectacular chart back in the day

back to 1980 of total mortgage debt.

And it's all wrapped around seniors and how everybody in the financial business wants to get seniors money. What's the state of seniors in America? Well, as you and many other shows have written, they talk about the boomers being so wealthy. And that's just not true in terms of there's a segment of the boomers that's incredibly wealthy, but only one in 10 boomers, seniors, can afford assisted living. Thank you. And they're taking on debt as a result.

at a more rapid rate than any other age cohort. So seniors own 25% of total consumer debt outstanding.

that's counterintuitive because you think as you get older, you get more conservative, you have less debt. So 25% compares to 12% in 2000. So it's, if, if the economy was so great, why would, why would seniors be taking on debt? One thing that seniors have is they're sitting on a tremendous amount of equity and they're starting to tap into that. So seniors have

at least 14 trillion of tappable equity that they can access that could make them be able to stay in their homes longer, age in place, maybe get private home care, home health care, and they're doing it. So 44% of home equity outstanding is held by seniors.

Would you let mom and dad buy private credit or private... Paul, help me here. You're better. Private credit wants to go to retail, right? Yeah, sure. Am I right on that? I think you have a longer-term horizon, I think so. If I've got five years left in my life, I mean, depending upon... Like, you just... I don't think... I don't...

You want liquidity, right? So look at the universities that are selling their private credit and private equity at a discount. They need liquidity. I think it's for an older audience, it's a tougher sell. Meredith, talk about the regional banks just for a moment. Because when we had the Silicon Valley Bank, I think we all got smarter about the regional banking business and maybe the risk associated. Do we need 4,000 or 5,000 regional banks in this country?

I don't think so, but you need community banks. So you need a presence, but you need 4,000. The Silicon Valley situation was hiding in plain sight. So that's on the regulators, right, for not addressing it. I strongly agree with that. It's like G Capital, how it was funded. I never get my opinion. Hiding in plain sight. Yeah. What's your single best buy right now? We've got to go. I like Rocket and SoFi.

Okay. Meredith Whitney, thank you. Thank you so much. Greatly appreciate it. Don't be a stranger. 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.

The newspapers here with Lisa Mateo, always important. Just an incredible set of stories to embarrass us by. Lisa, what do you have? Okay, so this Friday it marks a special movie anniversary. It's the 50th anniversary of a movie that made people afraid to go in the water.

- Oh, you know the theme song. - Oh man, that's awesome. - June 20th, 1975, that was the day Jaws was released. It basically invented the summer blockbuster. - That's the key point. - That's exactly what it was. Okay, so the Wall Street Journal has this inside look into the movie, kind of some fun facts that you might not have known. For example, that theme song, Steven Spielberg actually didn't like it. - Really? - He was like, what, what, two keys, that's it? Like, that's all you got for me? And he was 20, Spielberg was 26 when he started working on the movie.

It was a disaster production. There were equipment malfunctions. They thought the audience would laugh at these mechanical sharks. They had a tight $3.5 million budget. No star salaries. They were using people on, you know, Marger's Vineyard for extras. Yeah, no. And remember, of course, what's the most famous line from that movie, right? We're going to need a bigger boat. Yes, that was improvised. It wasn't really. It wasn't scripted. So all these little tidbits.

Now Martha's Vineyard, it's going to be packed. They have a lot of tourists going out there, you know, for the 50th anniversary. And they have NBC is showing it Friday. That scared, that movie scared the heck out of me. It did, me too. People know better than me, and Paul, you live this on the Jersey Shore, the South Beach of Martha's Vineyard when your kids are in the water.

You're just always watching. Watching closely. Always watching. Yes, all right. Next, please. Thank you so much for doing that. It did scare. Okay, so did you ever, I know you haven't, but people listening, have you ever sat in the line at the Costco gas station? They have a gas station? Yes. Because they have the best prices. It's cheaper gas. Really? Yes. Yes.

But the lines are really long. So Business Insider has this look that says they're planning to build a standalone 40-bay gas station in a suburb of Los Angeles, about two miles from where it is. But the problem is because it's backing up into the parking lots and people are upset. They're like, we just want to get the food. We don't want the gas. And now there's this big line and I can't get to the store. So they're saying gas is really a big business. It draws memberships. It's part of the reason why I get

the membership too so you can get the cheaper gas. Do you get your gas there? I do. Every time I go. I wait in the long line and it's cheap there. How much cheaper is it?

It could be probably about 10 cents or so. Yeah, yeah, yeah. It's a big difference and a good savings. Since when is she doing personal stories for newspapers? I get a little, there's a little tension in the voice there. Can you charm us with one more, Lisa? I can, okay. The latest Nielsen data, it shows a shift in how people watch TV. This is really interesting. So in May, more Americans watch TV on streaming than on cable and network television combined. Wow.

The first time it's happened for a full month in a row. So Nielsen began comparing these two, right, since 2021. Younger viewers, always the first to jump in. But here's the interesting point. Boomers are a big part of it. They're streaming more. Those over 65, particularly platforms that are free, for example, YouTube, they are the

fastest growing age group watching YouTube off of a TV set. Those are the boomers. They like other free streaming services like Tubi, Roku, Pluto. Those are some other ones. But the boomers, big thank you to them for kind of helping boosting the streaming numbers. Lisa Mateo, thank you so much. The newspaper is very informative there today. We should do it twice a show, you think? Yeah, we'll get a sponsor. I'll sponsor it. Oh, no.

This is the Bloomberg Surveillance Podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live each weekday, 7 to 10 a.m. Eastern, on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal.

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