Bloomberg's Waral on FB, AMC's Mohtashami on Home Sales (Audio)

twenty one in Dana Port, Dana Point, California. This essential conference is complementary for r I A S, but space is limited. Register now at b n y melon dot com.

Slash E t F SMP five hundred Index down a point at two thousand eighty eight a drop of less than point one percent, nav stack down five a decline of point one percent down, Industrials down thirty two, a drop of two tenths of one percent, Old down four ten the ounce it is a twelve sixty eight to drop of three tents of one percent and crew down fourteen right now. I dropped there of one. I'm Charlie Pellot. That's a Bloomberg business flash. This is taking Stock with

Kathleen Hayes and Grim Flox on Bloomberg Radio Facebook. All right, here's the question for our next guest at J. Tendra Warrel is global Internet and consumers electronics analysts Lord Bloomberg. He is, uh, well, I could say that probably the best in the business of Bloomberg Intelligence. He joins us from our Bloomberg nine sixties studio in San Francisco. All Right, Tender, before we get to celebrities and media execs, I gotta just do this question because I don't get it often.

What is sixties six sixty d kilometers long and lives under the ocean God. The fiber, Yes, the fiber that Facebook and Microsoft announced that they are going to build in that it's going to connect northern Virginia, it's going to go to Bill Balance in Spain, and it's gonna

just give this incredible capacity to Southern Europe. Tell us about that, and then I want you to segue, because of course all the people in Southern Europe are gonna be wanting to look at videos that are going to be sponsored both both of the teams are actually the same overatching issue, which is bandwidth, right, I mean, we want more bandwidth so that all the high resolution video that hogging traffic right now we get to higher speed gateways and and can enable growth that you know, these

companies are chasing. So you know, that's what basically spurring these movements. So you know, I must confess that I don't spend a lot of time watching lots and lots of videos online. So it's just so interesting to see that the figures of how many people are doing this now and the potential revenue you can get from it pretty big for Facebook, who's still pretty much a neo fight in this field compared a lot of the others. Yeah, so if you look at digital video advertising versus you know, TV,

it's about twelve percent of TVs. It's still a small portion, but it's growing very rapidly. And all the big companies, uh, you know, you have Facebook, Google, you have Twitter, Snapchat. Everybody is sort of pursuing video very very aggressively so that they can you know, still more budgets or diverork more budgets from TV to video. But that's not happening as rapidly as we have thought it would so, and

one of the big reasons there's measurements. So it's difficult to sort of measure what the ratings are like across you know, different video types and and what the audiences are like and henceforth. So they're trying to fix those issues. And also getting team inventory at scale is another one. So as and when they are able to crack this code, the opportunity is big for all these players. Well, to Tender tell us about the players in the live streaming

video business and how they connect with Facebook. So live video streaming is still nascent right now. I mean it was interesting. I was looking at the survey done by Huntington's post and it's like sund respondents who are saying that they would not use the platform for live video. What's interesting is that, um, you have every big company

of Facebook with live streaming. You have Amazon with t Whitch, you have YouTube Live, you have Twitter at periscope, and Snapchat has its own sort of take on the live stories. Everybody's pursuing this, um and right now the leaders is in terms of usage is really Facebook and YouTube alright. To Tender warl thank you so very much for joining us to tender warl is global internet and consumer electronics

analysts talking to us about Facebook. There's where he's an expert signing deals with celebrities and media companies for the new Facebook Live. Another big story today from housing was existing home sales the highest level since two thousand seven? Wass driving? And can it continue? Joining us from Riverside, California is Logan Modeshami. He's a senior loan officer at a MC lending group. He also is a well known blogger and tweeter Logan welcome back. Good to be here.

So existing home sales way and how did they look to you when you tear them apart? Well, but we're seeing the slow and steady growth and housing as we've seen since the lows of two thousand and fourteen. UH. Internally, the housing market looks a little bit better for existing homes because mortgage buyers are growing and cash buyers are falling, and that's what you want to see in a growing

sales market. But again, when you look at in perspective wise, cash buyers are still above historical norms and mortgage demand is roughly back to where it was in interest rates were four percent higher. Tell us about the actual prices of times. Yes, well, prices are going up and prices will continue to go up as long as inventory stays

below six months. But again, the housing inflation story is not being properly discussed because, uh, since prices really started to take off, we've never had six months inventory annual months in America outside of a housing bus store recession. So this inflation story is real. But when you adjusted to inflation, home prices are still about twenty below where they were during the housing bubble years adjusted for inflation, housing prices are still twenty below where they were at

the height of the bubble. You're saying for at first, so what do you but pricing and affordability, So it's still an issue even so does that work? Rates are low? Well, rates are low, but again the bigger the home, the bigger the debt, the bigger the payment. So even though the nominal interest rates are low, I mean, we look at it in perspective life. We've had the worst mortgage demand curve of ever recorded in US history once you adjust its population. But interest rates have both have been

below five percent since two thousand eleven. So the housing affordability issue is much more. Uh, it's much more of an issue than when people are economists to talk about because they use a metric that assumes that every single American has down a starting debts in commercial and basically no revolved in credit card debt. And this is why mortgage demand is roughly where it was back. Part of

this is demographics. We're very young, we're very old. Something nobody talks about ever is that primate labor force growth peaked in two thousand and seven and we're slowly growing again. This is one of the reasons why the demand from first time homebuyers is very anemic. It's still ten percent

below historical norms. So logan taking all of this together, how would you characterize if someone asks you, from your perspective the performance of the US economy and you know, you can fill it in with federal federal reserve policy and all the things you want, but what what do you come away with? Well, once you adjust things to demographics, a lot of this economic cycle starts to make sense.

But if you're not versed in demographic economics, and when I talked about demographic economics and we need young people to come into the marketplace and spend. Japan, Germany, all these countries are very old. Old people don't spend money their net savers. So when you get when you get fifty five and over, you you're not buying homes, You're not buying refrigerators. Young people push you know, economic cycles. We are very big age of seventeen twenty nine in

the cycle. That's not going to be anything good for for a mature economy that has a lot of its infrastructure already built out. So the the economic cycle is doing exactly what I thought about. I've been a two percent uh one ten year two percent ten year guy for many years now. Because the demographics in this cycle, we're very old, we're very young, we're lacking in the middle. Of the middle got impacted during the housing bubble year. So the consumption models are actually looking on trend, at

least from my perspective. But a lot of people had to be way too high of expectations in this economic cycle, in housing and in the economy in general. So looking uh in your role senior loan officer at AMC Lending Group and we resigned. You know, you've been doing this for several years now. Who's coming through the door. Who's buying? Can they get credit? Are they priced out of the market? Are they saying, hey, there's some good deals out there.

What's what's what are you getting from the from the battlefield, from the here here in southern California and Orange County, it is really the cream of the crop. You know, people here make money. So the people that are coming to buy, uh, have good incomes, have enough down payment. Again, I'm I'm somebody that believes tight lending is not an issue. It is a fabricated myth. We've had low down payment, low cycle loans this entire cycle since two thousand eight,

poor cash flow Americans don't buy homes. Okay, So it's it's the it's the reverse of what Mark Sandy and Loye Goodman try to tell everyone. But banks are lending to capacity, not lending two people who can't afford at home anymore. So, Uh, it's it's not a surprise that mortgage demand is is this low because again, dual income housing is a must in this cycle with the price inflation we have, that's what that's a story that will happen in years twenty four. So the people are coming

near to buy in Orange County. They can buy. They're they're good. I don't I don't see too many struggling cash for Americans try to buy. These people are struggling with their rent inflation. The last thing they were thinking about is actually to buy a home, especially where prices are at this level. When you talk about prices at that level, just quickly ten seconds, what kind of level are you talking about? Well, I can tell here at my condo and Irvine, it's going for six five thousand.

My parents have been trying to sell their two million dollar home and they finally got an offer at one point seven seven five million. So it's expensive here in southern California. It's it's no country for first time home buyers in this area. Thank you very much. Logan Motas Shami. He is a senior loan officer a MC lending group in Irvine, California. You're listening to taking Stock on Bloomberg radioh