Outlook for Israel-Iran Conflict and Energy Prices
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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. Ed Morse with Heart Tree right now in publishing. And without question, we welcome all of you worldwide. Edward Morse, welcome to Bloomberg. Thank you so much for joining.

Thanks for having me. It's good to see you again. Ed, I just want to focus on Iran. I think there's a huge misunderstanding of Persia, the simplistic stuff in the media as well. If you were to speak to the president or to every American today, what's the greatest misconception we get wrong about Iranian oil and gas?

I don't know what the misconceptions can be. I think people think that Iran is just overflowing with oil and gas. And that may be true in theory, but it's not true in practice. So they've had a stifling of their oil production. They

They've had a disaster in their gas production, despite the fact that they're sitting on probably the second largest set of reserves in the world. And actually what might do them in has been the Israeli bombing of their natural gas facilities. Paul asked the smartest question of the day. Can there be a regime change? I mean, let's go back to 1979. Paul's too young to remember this. But you and I, the absolute shock.

of moving from the Shah over to a theocracy, to be polite about it. Can we have a regime change, as Paul asks? Well, certainly the Israelis are aiming for a regime change. Whether they get it now or whether it happens at another time remains to be seen. The underlying position of the government is very, very weak.

They do not enjoy the legitimacy of the public. They do not enjoy happiness in the public. They have unbelievably high inflation, reaching 40% or higher. They have a currency that remains in a world of depreciating currencies.

They have no access to health and other things that people who are middle class want, and there are a lot of them. So we have a government that's a combination, a very strong combination of elected officials, a theocracy headed by somebody who certainly is going to be not with us very long, given his health situation and his age, and it has the Islamic Revolutionary Guard Corps, which is not exactly the most...

popular group in the world in terms of governments or governance. So yes, I'd say that there's weakness in the governance structure, but saying it's going to be overthrown overnight is another matter. What is the role of OPEC, OPEC Plus, in times of these types of risks, geopolitical risks in the Middle East? What are they doing?

Well, OPEC+ is a bunch of countries, and their main objective has been to put a floor under prices.

They are in a complicated position at the moment. That complication results from, on the geopolitical side, all of the major countries having new relationships with Iran. That includes Russia. That includes Saudi Arabia and the UAE, where China has pushed them to normalize relationships. They are articulating...

a position of criticism. I wouldn't call it much more than that of Israel for its what they call aggressive acts, but they want to stay out of it, and they have a more complicated situation at hand. So we have to remember that before this started, before that spike we saw last Friday in oil prices, they are...

on the one hand, concerned about weakness in the oil market, and on the other hand, pushing for weakness in the oil market. And they continue to want to push for weakness for a variety of complicated reasons. For Bloomberg, our conversation of the day, Edward Morse with us of Princeton, tangentially with Rice University, many other institutions over the years, and of course, the Council on Foreign Relations with Hartree. Dr. Morse, simply as I can make it, you were teaching at Princeton in the middle 70s,

And the State Department called, and you had the privilege in 1978 of really driving forward our energy policy. I think, I guess I say, what would you say to Secretary Rubio? But I'm not sure what Secretary Rubio's doing other than watching a parade. What would you say to the president now, given our original diplomacy and foreign policy?

Well, actually, some of the things that the government is doing now are laudatory. And, you know, the president had and he had the view of energy dominance as the international position of the U.S. And he doesn't have to fight hard for energy dominance, even though it's a difficult word to try to digest. But the U.S. is the largest oil producing country in the world.

the U.S. oil production, total liquids production is greater than the combined production of Saudi Arabia and Russia? So I need to interrupt. This is too important. Are you critical...

of the Iranian diplomacy of the United States is associated with President Obama. Secretary of State Kerry and Wendy Sherman as well. Are you critical of that era of six, seven, eight, 10 years ago? I'm critical of one thing that I think looms very large, and John Kerry's name is associated with it.

when we had the push for a clean energy world and the U.S. was in a leadership position on it. We also had the view, official view, that we not only want to get rid of oil and the emissions from burning oil as a transport fuel, but we had the view that we should get rid of natural gas emissions

as a fossil fuel. And that really set us back because fossil fuels, we can't get to net zero without actually using a lot of natural gas. We have to use it carefully. We have to make sure that methane emissions are controlled. But

but not allowing pipelines to be built for natural gas, not pushing for natural gas in the overall displacement of oil and discouraging oil's use.

was a mistake in my mind and set us back on the road to a cleaner world. And when we come to natural gas, by the way, the U.S. is the largest producer in the world. We are the largest exporter in the world, both of oil and natural gas.

And if you look at the next five years, the US is going to keep that up and remain the largest exporter with the largest growth. 50% of the growth of gas utilization and production, but we're going to be exporting most of it, is coming from the US. It's a very important tool for economics and for the energy transition. Does the US play any type of role vis-a-vis OPEC now that the US is not only energy independent but the largest exporter?

producer? Sure. Well, we have a complicated role to play. The role, by definition, is that we stopped the Saudis and OPEC from having an effect of reducing their production. You may remember several years ago when the Saudis and seven other countries, eight actually to begin with, down to seven other countries, said we're going to put out voluntary cuts. They've cut

2.2 million barrels a day several years ago and they don't know how to put that oil back in the market so they're now trying to put that oil back in the market 2.2 million barrels a day in a market with very limited demand is hard to do without lowering prices saudi arabia and the uae

know that Trump wants to lower prices, and they're using their own desire to reduce the capacity of other countries to produce oil, even the United States, by closing more closely their relationship with the U.S. So it's complicated. What they want to do should anger the U.S., but it's pleasing Trump.

The Strait of Hormuz. I think all of our listeners and viewers have re-educated ourselves. This is brilliant. Brilliant. Have you swum the Strait of Hormuz? I haven't tried to do that, but I've seen it.

That's important for global oil, isn't it? And what's the risk that that Strait of Hormuz may be compromised by a wreck? Yeah, well, let me put numbers on it. So 20-plus million barrels a day flow through the Strait of Hormuz every single day. Wow. That is not quite half of global oil flows, but, you know, it's more than a third. And the alternative routes...

are a pipeline from the east to the west coast of Saudi Arabia and a pipeline through Fujairah, part of the UAE, which sticks up and creates a straight-and-forward moose, but you can avoid it by a pipeline that they have going through it.

The combined two pipelines is $8 million a day. So the best that we can do is limit if the Strait is closed to a disruption of $14 million a day. That would bring prices to $130. Who knows what the number would be, but it would happen. And it would take months to clear the Strait of Hormuz. So the issue is not the importance of the Strait of Hormuz so much as

are the Iranians going to dare to do this? And the Chinese have absolutely said, don't you dare. And the Russians have said, don't you dare. And the Russians also have an interest in the Strait of Hormuz because part of the Russian exports to the world are exports to Saudi Arabia. And here we come to the complicated summer where we have a record amount of crude burn in Saudi Arabia and the rest of the Middle East. And they need dirty oil from somewhere else

to enable them to produce and export the oil. We estimate that the increase in oil demand this summer is about a million barrels a day because it's the hottest summer on record. And that's, you know, another bind. But I think there's a lot of pressure to say to the Iranians, hands off the straight open, Morris. Don't you dare. Edward Morris, one final question with great honor to your decades at the Wilson Institute at Princeton and all.

Robert D. Kaplan talks about the people of Persia. You've talked about them as being the legitimate middle class and sophistication of the Middle East. Do the people of Persia have a voice in this, as Paul mentioned earlier, where they find something after the Khomeini theocracy? They do and they don't. They're afraid to...

have generalized protests, even of the sort we had in the United States over the weekend. We have clear evidence that the bombing in the north has led to a massive exodus of people. So there are people who are unhappy. Do they want to be ruled by Netanyahu? No. So what's Amor's prescription for the United States to assist the people of Persia?

I think the US should be doing what it's doing, namely staying out of it, telling them both that they want to negotiate an agreement on Iran's nuclear future. And I think there is something to that, because Iran is getting to be in a desperate position. They have logically failed. They have visibly failed to protect the people of Iran. They visibly failed to protect themselves.

as a government given the failure of the proxies and the way the Israelis eliminated them. So I think it's inevitable that there's going to be an agreement, and the U.S., I think, needs to have its hands in that agreement to make it work. Dr. Morris, thank you so much for joining Bloomberg this morning. Edward Morris of Hartree, of course, definitive on the Mediterranean and our hydrocarbons in America.

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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Starting price for 25 megabits per second LTE internet plan with smartphone plan savings, plus taxes, fees, and economic adjustment charge. Terms apply. For J.D. Power 2024 award information, visit jdpower.com slash awards. AI is redefining what's possible for your business. Are you up for the challenge? Microsoft is helping leaders like you get AI ready faster with unified data and simplified platform management, unlocking up to 150% improved output.

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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 Podcasts,

CarPlay and Android Auto with the Bloomberg Business app. Or watch us live on YouTube. Henrietta Trace joins us right now at Veda Partners. Henrietta, I really want to stay in the Eastern Mediterranean because that's where the news is. But I guess I've got to ask, how will President Trump be greeted by the G6?

- That's a very valid question. I have to assume that there's gonna be a lot of skepticism around him thinking that Vladimir Putin is going to be the chief arbiter of negotiations and peace between Iran and Israel. That has to be first and foremost one of their questions. As we are on the US side sending tankers and interceptors over across the Atlantic right now, presumably to keep the peace, should we ever get to that option. - And Paul, again, the USS Nimitz moving from Asia

West to the Middle East. Absolutely. Henrietta, what's the feeling in Washington, D.C. these days about the role that the U.S. either is playing or may not be playing fully enough in the Middle East? What are the folks in D.C. thinking?

Well, as usual, the Democratic Party is sort of spinning its wheels on this, but the Republican Party is really trying to come up with a cohesive position around whatever it is that the president's platform is. We see in Washington that the Republican Party very much, especially when it comes to foreign policy, takes its direction from the president. So first and foremost, I'd say that the sanctions bill that we had pending towards Russia is

is off the table for right now. Not only can you not do that when gas prices spike, which is a risk that we have at this juncture, but I think any pressure on the administration from a

um let me force your hand on political and foreign policy is not what they're going to do so that sanctions bill that's sponsored by about 82 members of the senate and had clearance in the house is not going to move i think is the first casualty as they await to see um how things play out over the next couple days with israel whether it escalates and things get more tense or not but they're probably going to just pivot to the tax bill at this point that's kind of where i want to go henrietta i mean i guess we have the g7 we have the mid-east there's a lot of um

issues out there for folks to focus on and this administration to focus on. But the folks in Congress, they got to get a tax bill moved. Where are we on that? There's a lot of legislation there. Yeah. So tonight at around six o'clock, the Senate Finance Committee is going to release a portion of their bill. It's not going to be comprehensive. They're going to keep the stickiest stuff for later. That includes the SALT cap.

as I know you guys like to talk about, the tax bill is gonna start to become public and it's gonna get slammed. And the thing that's really tough about this for members is that they only have a three-day week work schedule tonight, this week. - Oh, that's tough. - So they're only gonna be here tonight, tomorrow and Wednesday, and then they're out of town. So releasing legislation in that kind of an environment is tricky because then you put sunlight on it

And you leave. And that allows whoever is your detractor to come in and spend the next five straight days smashing the legislation, which is going to be what happens here. We continue with Henrietta Trey's Aveda Partners. Good morning on your commute across the nation. Good morning. And Henrietta Trey's Louisiana as well. Sirius XM Channel 121. Good morning, particularly across Canada and Banff or Banff.

we'll see david girl be with us uh later and again on youtube we're just humbled by the youtube uh build out i i just really can't say enough about that subscribe to bloomberg podcast henrietta i want to pause and this came into my puny head this weekend watching golf and watching devvers in a red sox uniform and all that henry had a i

I think we have three wars. We have a real war in Ukraine. We have a real war spanning Israel and Persia. And I guess Gaza is a sort of kind of like war as well. Have we ever done this in America? Had a three-front war?

You know, I would say that we haven't had a three-front war with a president who has said, I alone can fix it. I think that's maybe the distinguishing feature here. I was with former Speaker Kevin McCarthy recently, and he said the reason that we voted for Trump is because nobody would dare mess with anybody. Nobody would step out of line as long as President Trump is in office. And obviously, that's not the case. There's no peace in Ukraine. There's no peace in...

and it's expanding in Israel and Iran. And I think that's probably the core of the problem here. How is the Pentagon in harm's way, how are they dealing with a two and a half front war?

Right. And also preparing for whatever it is that's going on with China. I think as we watch all this, the stuff that keeps the NSA up at night is really what is China seeing from all this? Wait, wait, wait. I got to interrupt. How can the NSA be up at night when Marco Rubio's yawning on the parade stand? He's running NSC?

Maybe because he's up at night. I don't know. But certainly the expansion here and the tariffs that are on across the globe and China as the core focus. I'll go back to that sanctions bill. We were going to do a secondary sanctions package potentially on China and Iran to help contain Russia. And that's plainly not in the cards if gas prices are rising.

So I think those are other pieces that, you know, at least former NSA officials have been very concerned about. I assume Rubio is as well. The good folks down in Washington, D.C., collectively, Henrietta, how do they feel about, I mean, it seems like inflation is just right over the horizon, whether it's rising oil prices coming out of the Mideast, the tariffs, sanctions, all these types of things. Boy, it really runs the risk for higher inflation. I wonder if our good friends in Washington are aware of that.

Yeah, I think that they are. They try not to talk about it downplay. There's a really good example coming from Ron Johnson, who has a lot of negative things to say about the tax bill. And he's been told by the president, look, you can have negative opinions about the tax bill, but don't bring them up in public. And I think that's a lot of what you're seeing from members. They end up shifting and deflecting onto other topics.

So whenever you have a conversation about inflation, they quickly pivot to, oh, well, this will wrap up or, oh, well, this is not going to be extended. A lot of, you know, we'll be getting deals soon on the tariff front. And the reality on the tariff front, I can't stress enough, is that tariffs are going to rise from here. For many countries, most nations, we're going to get a permanent flat rate that could be between 10 and 25 percent. And then other tariff rates are going to rise on Vietnam, Indonesia, Malaysia, South Korea.

sector specific there's a lot more to come we got to help you andreanda with your research we're going around the room quickly here we go to surveillance costco correspondent lisa matteo lisa mattel is there inflation at costco yes there is believe me what's an item that's killing you uh the item that's killing me it's probably no the eggs have gotten better actually i have to do say that produce but yeah no the meats the meats yeah i don't need meat anymore michael barr where's the inflation in the bar house

Besides you losing money on the San Francisco 49ers. I'm just going to come out and say it, liquor. Yeah, sure. Yeah, it really is. The beverage of your choice? The beverage of my choice, man. It is going up. Paul, where's the inflation? I just paid over $3 a gallon yesterday, which is the first time in probably six months. Okay, let's go there. Henry and Atreus. I mean, Paul goes to the heart of the matter. That matters in Capitol Hill, doesn't it?

It absolutely does. For me, I'm a good millennial. I don't even shop at Starbucks. And now I'm paying $20 for a bag of coffee. It grinds my gears. Not to put a pot on it.

I have a big bottle of olive oil, $31. It used to be 23 bucks. Okay. Talk to Hot Haze Laws about that. It's not a fancy one. It's not like some, it's not like what Lisa has, you know, where you can't pronounce it. Spanish or Italian, I don't know. Henrietta Trey's brilliant. Thank you for the brief this morning. Henrietta, quickly, I hope she's not gone. Is it, is it ban or banth?

Above my pay grade. Okay, thank you. Adriana Trace, thank you so much. Greatly appreciate it. Veda Partners. 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. Paul bugs me. He says, get the guy from Duke on, the guy with the bass violin in the background or cello, whatever it is.

But what's really important here is Cam Harvey, professor at Duke's Business School, is incredibly informed about the stuff tangential to our monetary policy. Paul? Cam Harvey joins us here, professor of finance at the Fuqua School of Business at Duke University. Hey, Cam, we're going to hear from the Fed on Wednesday. I know you've been critical of this Fed for looking, I guess, maybe a little bit too much in the rearview mirror. What do you expect to hear from the Fed this week?

So almost nothing. And it's going to be very, very frustrating. And there's a lot of pressure on the Fed from the political side. So the president has called for like 100 basis point cut.

The vice president has accused the chair of the Fed of conducting monetary malpractice. So this is kind of serious sort of schism between the executive branch and the supposedly independent Fed.

So the way that I look at it, and this is nothing new, I'm actually in favor of aggressive cuts. And indeed, I've been in favor of cuts for over a year. So I do believe the rate is too high, and we need to fix that. And the reason, I think, is fairly evident. So we are in a structural deficit situation

where we've got a $1.9 trillion deficit at a time when we've got decent economic growth, record low unemployment, inflation with the two handle, that doesn't make any sense. That might make sense to have a $1.9 trillion deficit if we're in a crisis or a war, but we're not. So something has to happen. And we've discovered painfully that

cutting the expenditures, like doging, is not gonna get us there. It's not gonna get us to, like, a balanced budget. So something needs to be done

And what is the easiest thing in terms of lack of pain is increased growth. When you grow faster, the revenues come in. You don't need to increase the tax rate. When you grow faster, revenues come in. So we need a boost in terms of growth. And one way to facilitate that is to reduce the Fed funds rate. That's a good thing for growth. So-

We had some inflation data over the last week, PPI, CPI. It doesn't seem to be creeping into the economy just yet. I know a lot of folks were concerned about tariffs and their inflationary pressures. How do you think about tariffs and the impact on maybe economic growth, maybe inflation? So tariffs are a tax. So when we increase taxes, that's bad for growth.

But you also need to realize that imports are a fairly small part of our economy. So only 14% of GDP is linked to imports. So we can absorb an increase in tariffs without too much damage. Nevertheless, it's damage. So in the ideal scenario, and I said this months ago, the ideal scenario

is that this leads to a situation where there is a level playing field and tariffs are actually reduced. And importantly, it's not just tariffs, it's the non-tariff barriers. So the headline numbers kind of mask what is going on. And if we've got a situation like that, that could also boost economic growth. I know it's chaotic right now, and I'm not a tariff person, but we need growth.

I want to go back to your seminal work, Kim Harvey, on consumption, recovering expectations of consumption growth. Can you aggregate America now? Are we so paralyzed in our bellism that there's two Americas out there? Yeah, so it's a great point. And most of our models in economics have what's called a representative consumer, which is code for everybody's the same.

And that's just not the case anymore. So we're a dairy heifer genius. And I've argued that part of kind of the decreasing volatility of the business cycle. So our business cycles are way milder than in the past, even considering the global financial crisis and COVID.

So they're less frequent and they're milder. And this is because there are a couple of classes of consumers, at least. And there's one class that is very well off and they just don't respond. So inflation goes up. It's no big deal to them. They just buy. And so-

I got time for one more question. We got to move on here with breaking news, including a presidential tweet. Kim Harvey, I can think the only equivalent of Lawrence Summers a few years ago. You had a doctoral dissertation with not one, not two, but three Nobel Prize winners. You had to sit in a room with Fama, Merton Miller and Hanson. Is that true? Yes. How did you survive that?

So they did not have the Nobels when they were on my committee. They were mere mortals. Okay, great. And many of my professors did not either. But yet it was a challenge. Indeed, my strategy in one of my seminars was just to stand back and let them go at it. Let them argue about what you're talking about. Would you have been benefited by the AI your students are using at Duke right now?

- Oh, everybody will benefit from that. Yeah, definitely. So it's a great tool for kind of enhancing your research. It's like a research assistant. It's remarkable. - Never enough time. Kim Harvey, thank you so much out of Canada.

with his graduate work at Chicago. And folks, I'll tell you, the privilege of talking to Eugene Fama about Chicago economics over the years, and Lars Hansen, to an extent, as noted, Kim Harvey there, of Paul Sweeney's Duke University.

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.

Switch to Verizon Business and get more from your internet without paying more for your internet. Get LTE Business Internet starting at $39 a month when paired with select business mobile plans. That's unlimited data and with it, unlimited possibilities. Start saving today with Verizon Business. Ranked number one in small business internet customer satisfaction by J.D. Power. Starting price for 25 megabits per second LTE internet plan with smartphone plan savings plus taxes, fees, and economic adjustment charge.

Terms apply. For J.D. Power 2024 award information, visit jdpower.com slash awards. AI is redefining what's possible for your business. Are you up for the challenge? Microsoft is helping leaders like you get AI ready faster with unified data and simplified platform management, unlocking up to 150% improved output.

Just look at the NDA. They're using AI-powered insights to deliver more personalized fan experiences. Then there's BMW, driving change confidently with safe, secure AI tools and guidance. And the LEGO house? They're creating new interactive experiences for people to explore.

No matter where you are in your business journey, Microsoft is here to help you achieve real breakthroughs that drive impact. Their industry-leading trustworthy AI fuels innovation in ways that are safe and secure. Business leaders Microsoft surveyed saw an average of 3.7 times ROI per $1 invested in generative AI.

Growing and innovating your business is your job. Microsoft helps you achieve that with innovative AI tools and experiences to guide you confidently into the future. Whatever change comes next, let Microsoft help you keep pushing forward. For more details, visit Microsoft.com slash challengers.

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. For all of you nationwide, we are transfixed in New York City by a mayoral race. There is an election in November, which months ago was like no big deal because there's 12 Republicans in New York City. But all of a sudden it's like, OK,

This could be a really interesting election because this candidate's an independent. This one's an independent. There'll be four, even five people on the ballot. Governor Cuomo was in the other day. As a disclaimer, I want to make clear that he's received the endorsement of Mr. Bloomberg. Michael Bloomberg is the

owner of various Sundry Bloomberg events, including Bloomberg LP and Bloomberg Television and Radio. Whitney Tilson joins us right now after surviving the race. As Mr. Cuomey said, Whitney Tilson is a financial guy in the hedge fund community and such and has gone through the public process of being a candidate.

This word cross-endorse in rank voting. Can you cross-endorse Governor Cuomo this morning? Yes, and it's not a cross-endorsement because I haven't asked for his endorsement in return, but on the mayoral stage at the last debate on Thursday night, when asked, I was the only candidate who was willing to say who I would vote number two. Why is that?

Why are you the only candidate that's lining up behind Cuomo? Jessica did in the Queens, I believe it was as well. Because the rest of the candidates are more progressive lefty types, and Cuomo and I are the only two people in the moderate lane. So I'm happy to throw my support behind him and just say don't rank Zoran Mamdani, who's the far lefty 33-year-old inexperienced democratic socialist. Whitney?

Crime, homelessness, if you ask, I think the average New Yorker, those two topics would be at or near the top of their list of concerns. Yes, second only to housing and affordability. How do you deal with that issue broadly tied together?

Well, it's a tough one. There's no quick solution, but a bunch of legislation passed five years ago that effectively decriminalized all low-level crime, not surprisingly. Shocker, you had a huge increase, and New Yorkers got upset, and we're in the process slowly, too slowly, rolling some of that back. But it demoralized police, and we're down to a 34-year low in the number of police officers.

The good news, however, is that on his fourth attempt as fourth police commissioner in three years, Eric Adams, our current mayor, was sort of forced to hire a competent person, Jessica Tisch, who has came in in November. She's done a great job, got more police out in the streets, started enforcing quality of life stuff. The murder rate is down 28 percent year to date. Shootings are down 21 percent.

Almost every type of crime is down, smaller amounts. So I'm hopeful that we're going in the right direction for the first time in five years. Housing affordability, top of the list. I've been in this city for a long time. It's always been an issue. Everybody wants to come to New York, and we know why. I don't care what's going on in the world or what's going on with the city. People keep flooding into the city. You see them every single day.

How do we house these folks? Yeah, I should say, one more just got added to that list yesterday. My youngest daughter graduated from college in Minnesota on Saturday, and she has already accepted a job back in New York. My third daughter, all three of them are now back in New York working, building their lives here. It's the greatest city in the world. But housing is key. My youngest daughter is going to be living at home because she can't afford on a teacher's salary to live in New York. So what do you have to do about it? Four words, if I were to summarize. Unleash the private sector.

All the candidates have their various proposals because voters are screaming about this issue. I'm the only one who said there's not primarily a governmental solution. Trust me, the private sector wants to invest in the richest city in the world with a 60-year low vacancy rate.

But we've just put up so much, the zoning regs, environmental regs, the city bureaucracy where they have to hire expediters to try and navigate the city bureaucracy. We've got to clear that out and shorten what's a four-year process on average down to a two-year process, which is what it was under Mike Bloomberg.

And the difference in two years and four years to a project start to finish in a higher interest rate environment like today is a viable project or a non-viable project. I brought this up with Governor Cuomo, the election that Ed Koch won.

where Mario Cuomo, Governor Cuomo's father, took Staten Island and I believe Brooklyn, I can't remember. But Dio took Bronx and Bella Abzug took Manhattan, but Ed Koch won. With this Democratic primary, how does Whitney Tilson frame the first Tuesday of November? All of a sudden, it's complex.

Yes, it's particularly complex because we have the primary coming up in eight days and it's ranked choice, so voters can rank up to five candidates. The way the polling looks right now is whatever round of ranked choice as other candidates are eliminated, it's going to come down to Andrew Cuomo, the former governor, and Zoran Mamdani, the 33-year-old sort of phenom who's run a great campaign but is very dangerously inexperienced, has radical views.

I'll just point your listeners, read the New York Times editorial today. New York Times, the liberal lefty paper of record, just destroyed Zoran Mamdani in their editorial today, said he's completely unqualified, his ideas are extremist, would be the ruin of this city, is effectively what they just said. So they said, don't rank Mamdani.

And then they said, whatever your feelings are about Cuomo, rank him somewhere. They had a mixed view of Cuomo. And then they said Whitney Tilson is the heir to Mike Bloomberg. And if you're a moderate, vote for him. So that was I was thrilled by that. What are we going to see in November if Whitney Tilson doesn't get traction? Well, I will. I am only running in the Democratic primary and.

realistically with eight days left there's a very narrow path for me to win the primary if I don't win the primary I will not be there in November what's interesting is is both Mamdani and Cuomo regardless of which one wins and loses is likely to be in November and then you have the current mayor Eric Adams

Curtis Sliwa on the Republican side in all likelihood, and it's not ranked choice. So you could have a scenario where someone gets 40% and becomes mayor with only a minority of the vote because three or four other candidates could split the remaining 60. We've seen some very...

Troubling images for many people coming out of Los Angeles as the deportation plan of President Trump ramps up. What's your view on how New York should deal with it? How would you deal with that? This is great, Paul. Thank you for bringing this up. Whitney Tilson, one of our staff, had a close friend's husband picked up this weekend in New York City. Mm-hmm.

Yeah, I strongly support New York's status as a sanctuary city. I do not think we should be cooperating in any way with the Trump administration's lawless, I would argue, campaign of terror against our immigrant communities. We, though, as Democrats, need to be smart and not lose the narrative and not appear to be, or in reality, be protecting the very small number of people who are here illegally who have joined gangs and are making our city less safe. So there needs to be limited cooperation there. But

I was asked on the debate stage, what would you do if the Los Angeles protests came here? And I'd be like, I'd get out in front. I'd be out there protesting as well what the Trump administration is doing, but critically in a peaceful way. And the flags we should be waving shouldn't be Mexican or Palestinian flags. We should be waving American flags. We are patriots fighting for our country, for our democracy against an authoritarian power grab, which is what I think is going on here.

What's the biggest issue from your perspective that you'd want to get across here when you go out and meet New Yorkers on the street? Well, I was one of the founders of Teach for America 36 years ago, my first job out of college a few blocks from here. I've been on the board of KIPP Charter School, so I've been trying to elevate the issue of education reform, improving our public schools where we spend more and get less than any city or state in the country.

It just hasn't been a big issue, honestly. And it always comes back to housing slash affordability and crime and safety. And so but I do my best to elevate an issue that I care about a lot is that by far the single biggest part of our city budget, 40 billion dollars of our hundred and fifteen billion dollar budget goes into the DOE and it's not well spent.

Whitney Tilson, I want to ask a delicate question here in that there's such a distrust of Governor Cuomo. There are those that support him. You know, we all know the debate here in New York. And I think, frankly, nationwide, people know the debate.

If we have Mayor Cuomo, how does he move on from the baggage that was earned in Albany? Are you optimistic that he can, if he's mayor, that he can move on from the train wreck that was his term in Albany?

Yes, and I would not characterize his years in Albany as a train wreck. He got a lot of stuff done. I didn't mean politically, I'm talking about social. The stuff on the cover of the New York Post. I know how it ended, but I have had some interactions with him over the years. Back when he was governor, he was a strong supporter of charter schools, and he...

At the end of the day, he's experienced, competent, and can get things done. And to those who, you know, he's referred to as a vindictive followed by an expletive by many people. And my argument back to them is, is there's a lot to be said for someone with a fearsome reputation.

trying to get things done here in a very fractious city where you've got to deal not only with the city council, but with Albany and now with the federal government is going to be a real challenge as well. We need, I think we need someone like Cuomo and I'm optimistic he'd be up to the job. I guess as it relates to the federal government, can he work with the Trump administration? Because

Perhaps that's maybe one of the things the city needs someone to work with the Trump administration on behalf of New York's interests. Is that something you think he could do? I think Trump is a bully and he respects other bullies and people who will stand up to him. And I think Governor Cuomo fits that bill. They've known each other for a long period of time. And I think Cuomo, I would hope, would be smart to

in standing up to Trump, but not needlessly provoking him. And when the alternative for us is a 33-year-old socialist, I think he would just get destroyed by city politics, would get destroyed in Albany, would be destroyed by Trump. And so that's an easy decision between those two.

Whitney Tilson, thank you so much for joining us today, whatever our political persuasions. And thank you for your public service of running for office. I accept your condolences. Getting out there and running. I hope it is restful as time moves on. This is the Bloomberg Surveillance Podcast. Listen live each weekday starting at 7 a.m. Eastern on Apple Podcasts.

It was an eventful weekend to say the least. She was watching softball tournaments and had hours to research the news.

The newspapers. Lisa Mattel, what do you have? Oh, in the rain, it was miserable. Okay, so I'm starting with the Wall Street Journal. This is an interesting take on luxury travel. It has a new offering. So yes, you have the pools, the spas, the drinks, the food, right? The excursions. Well, now there's also a family therapist on hand. So you can have family therapy sessions. I avoided this article. Brief us, please. I know you didn't.

okay there's this company called bluestone families they create these retreats at resorts right and they say the parents actually started asking for this they want to be more connected to their kids so they say why not do it on vacation where there's no distraction of work there's no distraction of school and everyone can kind of sit down and talk about the issues or whatever's on their mind but they're saying that kids of you know

rich families that they're the ones who have issues because they have this pressure to succeed um they're kind of isolated from the parents they don't really talk with them so this is a new thing so there's a resort in massachusetts they held a family connection week connection yes if you're right i go from the west wing of the keen mansion and you can hear the echo in the east wing of the key mansion now

And that's how you have a family discussion. Am I right, Paul? Sure, why not? Now as a certain. See, so you can say, you don't have to pay the $1,000 a night that these places are charging for decisions. Family therapist. Eric says White Lotus is a show, right? I think so. Yes, yes, yes. I missed it. Oh, yeah. It's okay. It's okay.

Okay, next. Okay, this one, you kind of mentioned this. You teased it a little bit about YouTube. This is in the Screen Time newsletter. What they're showing is this shift. It's not just for short-term video, but more people are watching the longer ones. So like 20 to 30 minutes, which is similar to like a sick

So you think about it, they're kind of encroaching on that side of it. They're getting into where sitcoms could be because more people are going to YouTube to watch these creators who are doing like 30 minute videos now. So this is from Tubular Labs. As he said, the average YouTube user spends about more than 50 percent of their time on the site watching videos that are longer than 20 minutes. So that's shifted.

And also the shift, how they're saying users spend 42% of their time watching it on TV. So more people watching YouTube on TV than on their phone or on their laptop. You buy it where you don't watch Gunsmoke on YouTube? Absolutely. That's where the kids are going. And we've seen it time and time again. And the oldsters are going there too. Yeah. Yeah. Yeah. Well, there's a few of us. Do you think, Paul, the advertisers, you know, not this month, but over the next five years...

will go there absolutely absolutely and it's become a huge business for for YouTube and for Google their advertising business on YouTube the advertisers since the beginning of time you have mass an audience you sell advertising against it I I mean I I'm humbled by this each and every day we got to move on but folks like humbled by YouTube but Lisa

Okay, the last thing. Are you familiar with these Labubu dolls? Yes. Oh, you're killing me. Okay. Somebody showed up at the house with them. You have to Google or AI this, whatever you want to do, because it's this furry doll with the fang-like teeth, right? They're made by Chinese Toemaker Pop Mart. Those are ugly. Huge. Yes, there you go. Check if you're watching on YouTube. It's a little scary, but there they are. And peep.

love them. So Rihanna, they pay huge amounts of money. But now you have the K-pop stars, they're collaborating to do their own line. So now it's huge. Lisa's Blackpink. Yes, she's posted pictures. So now they're becoming more popular in South Korea and people are like waiting in line for hours for these things. They do mail order and they show me what the prices are and we need one or two or a hat trick on our bag. Okay.

It's like, what was this? Beanie Babies. Oh, right, right, right. It's like Beanie Babies, but outrageously priced. Yes. And so it's all the rage now. So parents, get ready. That was a miserable newspaper. She must have made that up in a softball tournament. You're welcome. Lisa Mateo with the newspapers. 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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