AI Capex Concerns Persist & Central Banks on Hold

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We are fortunate, we get lucky. We've got a great set of conversations today, but.

We don't know the news flow. Here's the news flow.

Bank of England they leave raids, they say interest rates quote likely to be reduced further, they do not talk about Liverpool's a defensive strategy. Bank of England sees inflation at one point eight percent Q one twenty twenty eight.

None of that matters. What matters is and.

This is particularly for the United States crew listening this morning. It was a five to four vote joining as Senior Vice president descent at a missoo. Jordan Rochester joins us this morning. Jordan, let's rip up the script and you can do this because you're encyclopedic.

Do Americans have to get used to a Bank of England descent with the upset over our new chairman?

No, I don't think they're going to be upset at all. The Bank of England is doing what Donald Trump would like his own Center Act to do, which is they're slowly cutting interest rates. And the annoying part about the banking is how slow it's kind of been in the past few months. There's a little bit of a political problem the budgets that we've had from Rachel Reeves. The Chancellor had raised inflation in twenty twenty four when she gave that budget, so last year we had sticky inflation.

It's now flipped the other way.

The Chancellor learned her lesson and in the budget she's cut taxes in certain areas. So the banking is looking at a more dubbish outlook. Inflation is going to hit their target pretty much by the spring into the summer, and in our view, we're going to get more rate cuts from them today.

We didn't get it from said would we be better in the United States? Were they more fractious Central Bank, Federal Open Market Committee where we see Bailey and Catherine Mann of City Group in brandeis where we see certain presidents and governors at the Fed descent more and more visibly.

I see what you mean. It's going to happen, I think.

And the new administration with Kevin Walsh coming in if he gets confirmed, of course, the banking is very we're very, very used to it.

All.

The individual members of Embassy are encouraged to have their own different views and in the sort of minutes we got today all their different views as to where rates should go and how quickly are all there from each member. That's something they took on from Ben Bernanke's review just last year. They implemented those changes to be more transparent where at the Fed, You're right, it's been much less of ascent.

Descent are kind of a sort of red sort of.

Headline on Bloomberg terminals and when we get them, but we've already started to get them with Stephen Myron and other and Waller, So I think under wall should have tricked. The hard part for him will be he might want to cut rates, but maybe the regional governers don't.

So Jordan, when you talk to clients, what do they feel like the trade is in the fixed income space? In twenty twenty six, we've got the bank giving and likely to continue to cut rags here the FED presumably will continue to cut rates here.

What's the trade in twenty.

Six I think the trade here is to kind of take the opposite sort of stances to what we've got into some spaces of last year. So in US rates it was all about how far they could go in terms of the neutral rate being three percent. The long term dots are therefore we should receive, which is going long US rates on the back of that, that's now turning the labor market data in the US it should pick up.

We've already got the.

Growth data storming higher in the data surprises of the US. Look at the ism manufacturing this past week. So I think the trade is actually to bet on a US rebound in growth and therefore in the labor markets as well, and were higher interest rates in the US to come.

So it's interesting here we can starting to see that a little bit in the US yield curve. Jordan, the twos and tens, you know you've got sixty seventy basis points of steepening. What is that telling you there?

Well, the steepness comes partially from the front end being quite anchored to the dots. There's still just shy of two cuts priced him for this year. The long end's been driven by what's going on with the one big beautiful bill, the fiscal stillness that we're getting, and also not just from America but from Japan, from Germany and other parts of the world.

Everyone's increasing them out there issuing this year.

It's just very difficult for long end yields not to go higher when you've got the issuance coming out the way it is and the growth picking upt the same time. I'm not sure why interest rates should fall. Then you've got, on top of that, Kevin Walsh's view on the balance sheet, which is all about reducing the size of it, which is active.

Sales of US treasuries.

If he was to do so, that would put further pressure on yields as well.

Did have it in the European Union here there was about earlier last year where boy Germany was talking about really stepping up spending on defense and other parts of its economy. Maybe a little fall on from some other parts of Europe. That is that still the feel there or what's the thought about europ right here?

It's still a feel. The problem is is it in the price? Is it a stale narrative? Could things turn against us? While we've started to get a similar story in European data surprises. We had a very strong German factory orders this morning, for example, thirteen percent of year to date. What we've been waiting for, We've been waiting to see if this huge defense order through companies like Lion Mattau for further tanks, drones, planes, etc.

Would it feed through to the data. And what about the.

Infrastructure spending as well, which is five hundred billion euros over twelve years.

Yes it is, I think, is the answer from the data so far.

If that carries on the market could revise up its ECB assumptions and we're talking about hikes being possible really not this year but next year.

Wow Bloomberg surveillance.

So as we continue with Jordan Rochester of Missoul, wonderful team working with Dominic Constant and Stephen Mershudo among others, we.

Welcome all of you across the nation. Good morning on the Pacific RAM.

Good evening, i should say, on Spotify it's a podcast. Thank you so much for your attention out on the Pacific RAM and of course on YouTube podcast as well. Jordan, I look at where we are and once again, I sit down. I got got bit dog with a sixty nine handle, which gets my attention, but far more Jordan Rochester, I got a dollar that just won't strengthen. I mean, I got a ninety seven point eight dx y I got yen. Excuse me, I got yen backed up to

Yeah, I think the FX space is one of the most difficult sectors to have a strong conviction on. You onist out there talking about a weeker dollar on the debasement trade. I subscribe to that, which is, I do see the sort of real assets outperforming due to the fiscal and monetary policy we're talking about.

But that's real assets. We'm talking about gold and silver, and is bitcoin real? Who knows. But when it comes to when it comes to the.

FX space, which is eure overs the dollar, the dollar versus the yen, the correlations that we're used to, that the frameworks that we use to try and understand how do we make money from this? The broken liberation? They completely changed it. Donald Trump told basically all the European investors through other words, of course, to hedge their exposures more. And so we're having much more dollar selling in foreign exchange, forwards, swaps, options.

However you want to do it.

But what I think is going to happen is the dollar is going to rebound in February and we're getting that dollary in's heading hire into this election. This weekend, we're having euro dollar four cables falling against the pound. Why because while I talked about US data surprises rebounding thanks to the FIST and monetary policy kicking in bigger picture, I do think the dollar weekens Tom Why global growth?

Where's the recession coming from? I don't see it.

And when you have a global rebound as I think we're going to have, typically that's an environment where the dollar underperforms and risk assets do well. So in the second half this year we could be looking at your dollar one twenty two quite easily.

I mean, wow, your meetings are tense. He goes into a room with like twelve people. Yeah, and nobody's taken notes, so just listening. They got their digital lie pads out taking Rochester no ites.

What's the number one question you get right now? Jordan Rochester.

Will the Bank Japan hike in April or not?

I think is one of the most common questions, and it's one of those ones where it's really up to dollar yen as to whether they will hike or not. If we look at the pricing, it's twenty basis points price, so it's eighty percent probability it's going to happen according to the market.

We thought for a long time.

July was going to be the base case, but it does each seem that expectations, expectations are shifting forward. And you want to learn I'd learned some new Japanese phrase whilst I was in Tokyo last week. If you want to hear it, go.

More commercial and let's make money.

Let's me.

There we go.

I mean you got to get out of the office and go see clients a run in the world. That's what you pick up here. And Jordan, how closely are European investors following the I guess the upcoming confirmation hearings of mister Warsh and what it may mean for US physical policy here? How critical is that to kind of twenty twenty six views for a lot of your clients.

I think for a lot of them. I think it's done.

Whether Mkowski or Tillis holds it up in the Banking Senate Committee is kind of for the Wall Street Post to talk about Wall Street Journal. But I don't think that it's going to really matter to markets too much because most people just think eventually the case will probably be dropped in some way and it will just go through. I think if Powell hangs on or not is more of a crucial question for markets rather than will walk thank you.

So much, thank you, thank you, thank you. Frame that out Jordan Rochester. What happens if he leaves, What happens if he stays.

Well, if he stays, he's probably got the attention of the room, probably more than Kevin Walsh possible, because he's built the connections of all the other governments. And if Powell's arguing against the idea of cutting interest rates when it comes to the June meeting when wash takes over, that's where you could see a descent for the first time.

I think since Volker, you have to go back to Volka for.

When you last had the Federal Reserve chair have a descent go against them.

Now.

If Powell bows out, that means that's another seat that Trump can nominate somebody for. And then we start and if Lisa Cook's Supreme Court hearing doesn't go her way, then we're talking about a board that's highly governed by Trump appointees, and then things could get more interesting.

Jordan Rochester, thank you so much, greatly appreciated this morning with Miszoo fascinating. Stay with us more from Bloomberg's coming up after this.

You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from seven to ten am Eastern Listen on Apple, Karplay and Android Otto with the Bloomberg Business app, or watch us live on YouTube.

Danielize with this is Wedbush, of course, coming off the glory of a Baron's cover showed. Were you surprised by the Baron's article like they had like a float chart of all your business interests?

Are you on speaking terms with Wedbush? Compliance?

Of course?

Look, I mean it's one like look I understand like the nature of like when you expand opportunities outside just traditional analysts, it's something where like you know you're breaking new ground, right, but it's something like if I chew gum webbush news.

And the reality is is that I.

Get the criticism, but look, it's something like for twenty five years being bullsh in tech, being bullsh and AI revolution. It's led to obviously other opportunities, but it's something where you know, it's I get the crisis.

I want to go back to first principles here. There was a there's a couple of courses we took on network effect, on Metcalf's law, on ethernet study here, and the answers that devolved into spectacular profits for a very few Michael Mobison just being iconic on this early work as well. It's still in play right when I look at Google's profit machine, it's about Metcalf's law. They're playing a different rule book and we don't understand it exactly.

I mean.

And that's why, to further your point, if you look at the cloud growth forty eight percent, you look at Capex, now that's basically going to be you're.

Really almost doubling.

This just shows that these companies they see the modernization path. It's happening now. Just investors beg why would you not slow up? Because they have to accelerate because of the arms race, that's playing out. So when you look at earning season the last few weeks, it's further validated that this is not a bubble. This is an AI revolution. The monization's just started. And it's my view like to view it that software and it's essentially what I'll call

So how do you respond to the concern that some people have that AI posts a fundamental threat to certain aspects of software, specialized software, application software.

Look, I think on the edges down the road, is it a headwind? Yeah, But then on the other hand, like for a salesforce service now fro an Adobe for large and work that you could argue that AI is actually a talent, but they just haven't seen the modernization yet because it's ultimately the use cases are going to be well by software and pallunteer being the first one

Are you seeing the major software companies, let's pick on MSFT. Are they having conversations at Redman to say we're down twenty six percent? Do we take depth to buy back shares and other creative I mean are they are.

They do they want to be opportunistic? Given this AI frenzy?

Well, look, I think this is going to create a massive m and a cycle in software because to Tom's pointing, like if you look at the cash flow both on the on the pe side as well as in the strategic and you look now where the where these software comings right, if you think about maintenance ar are you to basically would have to assume that numbers come down twenty five percent the next three years not to buy the sector.

Danives with this folks worldwide or thrilled day of min robbers shipping with us later the best in conversation on technology.

Okay, you know where I am on Tesla.

You and I sit up in the food court over cheesus, I have cheese its Isaay has something.

Great a bullish scar you were wearing too.

Okay, but yeah, But the bottom line, Dan ives, is there going to take Tesla taking out two vehicles, something new's going to happen. They're going to run it into x AI whatever the hell that is, and they're going to fund it through starlink. Are things in space going to make this accounting work?

Well, it's my view that Tesla and SpaceX eventually merge, I guay. So this is x An, XAI, XAI space.

Is there going to be a legitimate red herring? Is there going to be a legitimate process or is just musk blather?

No, it's I think it's Jim and Pat. I think this is all step by step in terms of what's going to happen.

I think the reality is okay, Like, why would Must.

Do this because essentially when you look at XAI, that's so much of the AI technology now that's within SpaceX, SpaceX basically being the vehicle that obviously gets you to space. It's must view where this he's basically creating his own ecosystem. You do about circular financing and everything else. He's internally building this what I would argue is probably going to be the biggest AI company in the world.

Is this whole new thing, this SpaceX slash xai, is that gonna go public this year?

Well yeah, I mean I think it's one that would make a ton of sense for SpaceX to go public. Then you think about Xai being a key component to that. I think then the other the thing for investors is trying to figure out how does this affect Tesla and when does that cross pollination start.

Okay, bitcoin is sixty nine thousand.

We haven't broken down below, but everybody's paying attention sixty nine five hundred. The fancy people at cryptos say, where's the underlying where's the underlying on the combination of SpaceX, XAI and Tesla, what's the underlying free cash flow generation?

I mean you look, it's my view, autonomous and robotics alone for Tesla numbers today. If you've got free cashow, free cash flow will be up five six acts the next four or five years.

Just basing that. Then when you actually will, if you.

Actually combine it all, you're essentially looking at something where they could when you think about the longer term model, they would generate free cash flow potentia on par with any of these.

So you're saying, Paul's got any questions. This is my last one.

Called Alexis, get out the surveillance cork and put it in my mouth. When I've done with this question, you got a red herring out right now. Basically there's no profit model and it's an innovation hope five years out is that weix struction.

I mean Xai, let's say a billion dollars a month or whatever that they're burning. So you but tom My view is like, it's no different than the one hundred ey five billion that Google's in a spending cap backs or Microsoft's doing cap backs right now. You are betting on the next two, three, four, five years. Now, does that is you have? Do you have to be a believer? And does that impact the near term in terms of these names?

Of course?

But the view from an investor perspective, it's my view is that we're in a fourth and ducal revolution. We're in year three of a ten year buildout.

We've had some great reporting from Bloomberg News on Elon Musk and SpaceX and Xai and this merger here, and I think two themes out there. The bulls are saying, hey, you're putting together the great SpaceX with the arguably the leading AI company.

Put those two together, what a great story.

Others might say, wait, it kind of feels like SpaceX is bailing out XAI or vice versa. Do we But we don't know because we don't know any numbers there.

Do we know? We don't.

I mean, obviously the burn you which which we know is probably you know, about billion a month. But for SpaceX, they're getting the AI technology from Xai so that they ultimately need. If you think about this being what i'll call it AI play, it was the first step then, but they eventually go down the aisle with Tesla.

Okay, just just published moments ago. We did this in real time, folks. We'll make it up as we go, Dan Eyes. So this was Bush Robert Schiffman, who'll be with us in the next hour, publishes moments ago. This is on the credit on the build out of Google on AI Alphabet now AI Capex poster child.

But risk is low.

He looks at one hundred and twenty seven billion cash balance, and again, Dan Eyes, I go back to these things are profit machine like do you say the KPEX is almost a rounding error spread out over two three five years.

Every hour you're spending in cap backs, you're basically going to generate forty fifty percent freak ask for in every hour that you're investing in CA.

I mean, if you if you go through the numbers, and that's why it's my.

View, you're going to continue to put as much into this given the cash flow machine that you've seen Alphabet produce. Would I believe Microsoft is going to produce? And I think so many other tech companies that are going down this path and they have no choice but to go down the path despite maybe like stocks this week.

Or whatever over the last week, this paragraph.

Below is Oracle.

Do you say you've envisioned the Ellisons that gotta at some point jettison Oracle because they don't have the EBITTA fund all those hopes.

But I think that's why they did the forty five to fifty billion. They laid it out in terms of the transparency of how they're going to raise the capitol. And I just continue to say, investors, Okay, let's say Oracle never touched.

Open Ai the three hundred billion. They didn't touch any of these deals.

Okay, So you're saying, would you spend thirty billion forty billion in the hopes that you could get five six hundred billion over the next four or five years. Any company in the world is going to take that.

Now. That's why like Oracle stock.

Being so such an overhang on this. The math of it is, this is essentially giving them the opportunity to change the trajector they're coming become a huge player when it comes to you know, the four to five trillion that's going to be spent.

That's why they're doing it.

Give us some of the solve here in software stocks, what are your top picks here?

On the weakness look, I.

Think the one that is the most over sold relative to the install base, free cast flow and where they sit is Salesforce. Okay, am I saying, like has Bloom come off to Rose and benioven Salesforce? Is this disruptive to the business model? Yes, But to say that the stock right now is basically trading in almost you have to assume that this is a structurally broken company, which is not. And then I'd say cybersecurity looking name my

Do they respond to that? That's what I want to know. And they're gonna have their CFO has got to be who's their CFI? I don't even know? Are you their CFO?

No?

Again, it's it's one where to me, they're going to have to do something significant here to make a statement to the market about their stock and about their confidence. And I think, look, and I think it's ultimately Amyhood. What does Amy Hoods say to Adella? Are you kidding me? But Amy Hood, in my opinion, not just in tech, but across I think I think just across any major

Wait a minute, she went to duke exact problem exactly.

So what is the conversation you're having with clients?

Is it? Is it panic?

Is it I'm selling now and off I'll think about it later.

It's I mean, I'm hearing from clients I haven't heard from in a decade, seven years, ten years, because my mind is like they're that panicked or nervous not to explain some of these selloffs trying to say something that they're missing. And my whole point is like booking covering that's going back to late nineties, like we've been through times where like whether the it's bubble burst, you know,

Okay, in ninety days when Microsoft does Q two, so like you know, ending March thirty and your wait, thirty days or forty days, they're gonna come out with the report. It's the same old, same old cash generation, the.

Same or and I take accelerated relative to what they got. I think the only reason this st sold off so dramatically it's because not all the cap backs is being allocad the azure, which that's what investors want to see. And then it was kind of splitting hairs as you're not having a foreign front of it. And from a growth perspective, it's at thirty eight thirty nine percent, but I think that is like missing the overall point the enterprise AI revolution goes through Redmond.

That's in their core backyard.

So what's the what's the message you have today, which is hey ride this out or or try to pick.

Winners and losers.

What's the message?

The messages the winners you buy them table pound their levels.

Because it's my view, just like last year we had Deep Seat.

And Liberation Day and maybe some other sort of you know, geopolitical, you'll have these moments four or five times in a year. This is not the end of the AI trade. This is not a bubble that's burst thing. You remember, the bears will come out and the usual. To me, it's like look at her season, look at structure, looking montization

It's definitely no, it happened. It happened at an.

Awesome Italian restaurant that would actually be a very keen style of Sweeney styles.

But look when that happens, it shows I got.

Fifty seven seconds because Michael Barnet's this timer he's gonna have a tantrum.

I'm looking at Apple just for you.

I did a log charge of Apple Computer and the bottom line, folks, is in April of this year, the world says, shut up, it's gonna die. It's going to be terrible. And Dan I said, you know, one hundred and eighty out to two hundred and eighty as well on a long term trend, it's trading just below trend line.

I mean there's room to move to the upside. What will be that catalyst? Look at the stock.

Movement the last two three weeks right against the broader you know tech saf To me, it's just look what Google's yesterday.

AI is now coming to Coopertina. That's gonna be huge.

I think investors are underestimating what that is going to mean about monization four Apple, and I think that is ultimately what it comes down to. You are not factoring in any premium to AI that goes through Coopatino and what ultimately is the two point five billion iOS device.

It's like clockwork Saturday, I have to go to an Apple store because one of the cherubs on MG my phone is dead.

That's the reality.

Paul Yep I mean it's just, you know, it's endless like read by Toys. Dane ives go away. Thank you so much with Webers. Congratulations on your cover Barons.

Thanks stay with us.

More from Bloomberg Surveillance coming up after this.

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I want to show where this was Brown University, and of course your book on Civics absolutely definitive across the education of America, Professor Schuller. I want to look at ICE. So we had a small matter on September eleventh of two thousand and one. We had legislation a bit of a month's later two thousand and two, and in two thousand and three we merged customs in some justice department. I ins thing together, and I guess we named it ice.

Well, I mean Tommy Wright to sort of point out things also like the Coastguard. When I mean, basically, the whole idea is sort of internal security against external forces.

That's really what ICE was not ICE, Sorry, I see when I'm doing it.

What homeland security was supposed to do. And the justification for homeo security was communication. That there were people who thought that the two thousand and one tragedy was a failure of communication across independent agencies that didn't talk to each other. And so if you are in the same cabinet department led by a single secretary, you're going to talk to each other and you're be better coordinated and that would make the country safer.

That was the rationale.

And so this is what it was always supposed to be, internal security, but against external forces. So the question is do you think people who have been living here for ten years or fifteen years are the external enemy?

And that's what the tru administration is arguing.

My oldest cash flow, I mean Shanghai, having a beverage of my choice at the Peace Hotel with cash flow and Wendy, he's explaining to me the police state of China, like the three or four levels of police officers on the streets of Shanghai or wherever have we become China with our domestic enforcement.

I don't think across the country we've become China. But I think if you're living.

In cities where you used to walk down the street and there were police officers that you knew, your local town or your local county, and maybe a state e as we call them in Rhode Island on the highway.

You accepted that that's part of what you expected.

You don't expect to mass people with, you know, machine guns on the street that can stop you and ask.

You who you are.

And I think that is what has really rattled the American voter, the independence some Republicans in polling and all Democrats thinking I don't want to live in a country where.

This is possible.

Certainly, the United States government has had surveillance powers over the last twenty years that are extraordinary.

Ben Franklin would.

Be absolutely appalled at the extent to which this government can survey any citizen for any reason, but to stop physically people dragging out of cars ask for identification.

That is not the kind of country America wants to live in. Sixty three percent of.

America says we don't want this, and so this is an interesting thing going into the midterms. Tom In twenty eighteen, it was about Trump, the person Trump. You know, we don't like Trump. We like Trump, but this is different. This election is about policy. This election about how the policy of the trumpministration are affecting your daily life and your sense of security. And I think that's really where the sort of presence of Ice and the way they look with the masks and sort of all the videos

For that matter?

What is the political I guess pushback that the administration is getting now as it relates to homeland security. We've seen President Trump ordered a partial pullback in Minneapolis. How are they viewing it these days in DC?

Well, I think you can see from some of the comments that the President's made.

And we'll hear more from the president and that interview, it's already been leaked before the Super Bowl, a traditional presidential interview. But what we're seeing is I think a difficulty in the White House, Right, are you going to be Stephen Miller and Steve Bannon or are you going to be Tom Holman?

Like?

Who are you going to be?

And what are your policies now, mister President, And he has really sort of swung to the right, and I think now he recognizes that this policy could cost him not just the House, but the Senate as well, and he doesn't want to be president with a completely democratic Congress.

And that's the argument. I think more of the meremadera.

Voices in the White House are saying to him, we can do this, we don't have to do it this way.

Okay.

So, Wendy Schiller, political advisor inside Baseball, Wendy Schiller, you're on the team trying to get Susan Collins re elected in Maine. What is your advice to Senator Collins?

Well, Senator Collins has made an argument, I think to the President. I wasn't on the phone call, but I think this is the argument. I'm the chair of the Appropriations Committee. I can help you hold the Republican Senate. And if you don't get your your ice folks out of Maine, I'm going to lose this election.

And if I lose this election.

You can lose Ohio, you can lose North Carolina.

I don't know. Texas is always a pipe.

Dream for the Democrats as far as I'm concerned, but now they're making noises.

So she's basically.

Saying, miss as a president, I'm not just another senator running in Maine. I'm the lynchpin to your keeping the Republican Senate.

And I think that's what.

She has been saying to the White House. And she probably has to come out stronger against ICE, but getting them out of Maine is a pretty strong first.

Step for her in reopening the government the mini shutdown, did the Democrats get what they wanted as it relates to homeland security and ICE agents.

Well, they didn't get what they wanted necessarily to sort of you know.

Now, Christine says they'll wear body.

Cameras, But the idea of sort of the warrants and stopping people, I think that's still pretty murky. And we still got people in detention centers, and they're planning to build another detention center, for example in New Hampshire, and the governor didn't even know about it, the Republican governor in New Hampshire.

So I think they.

Still haven't decided, and that means the Democrats still have some fodder.

But I tell you what that they did get.

They got all the funding for research for science and health restored and increased, and they took away some of you know, the ability of the administration to cut that funding. That's a very big win for a lot of Democrats running in the House who want to say that they've helped their local communities.

Just one final thing here.

You mentioned sixty three percent against ice or whatever the coloring is that I believe tells me that thirty percent plus of Americans are really really happy with ice in these communities. What is the president's relationship right now with traditional die hard law and order It.

Sound like Nixon? What is the mess?

What is the relationship now of the president to law and order America?

You know, Tom, I think the president has thirty four percent of this country.

Period.

They have been loyal since he first ran in twenty sixteen.

They stayed loyal in twenty twenty.

And they came back and stayed loyal in twenty twenty four.

He's got thirty four percent. It's not enough to win obviously can't run for president.

But it's not enough for the Republicans to keep the House in the Senate.

Thirty four percent is not going to win you the day.

So you know, he may have these folks, but you know, you can't win the elections with them, So that's the problem. He expanded his coalition and now that coalition has contracted significantly, and that is really a challenge for the GOP heading into the midterm.

So this is this is where he is.

And I would also say, law and order in your community, no robberies, assaults, murders, rapes, all the horrible things we think about is different, I think for Americans than grabbing people up the street and deporting them.

I think they're different kinds of law and order, and I think that's where you're getting some of the differentiation within the.

Publican Party twenty Shiller Brown hugely valuable. Thank you so much. Stay with us. More from Bloomberg Surveillance coming up after this.

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YouTube with our newspapers.

Alexis Christopher's all right, I'm going to start with a super Bowl story.

We've been doing that.

That's sort of been the theme for our listeners this week. Right, we've at least pulled one Super Bowl story for newspapers, and this one's from the New York Post.

You knew what was going to happen sometime.

We have our first AI related ad on the Super Bowl this year. It's Anthropics, So it's going to take a jab at its rival Open Ai in its first ever Super Bowl ad. It's blasting the company for introducing advertising to its chat GPT chatbot. It's something that Anthropic has promised to never do with its chatbot called Claude. Remember when Netflix said no ads ever ever? Yep, yeah, that went out the window.

You're saying.

So, so they're going to spend big time thirty second ad on this year's Super Bowl. We've talked about it more than eight million dollars and you know what that turns out to per second? Two hundred and sixty five thousand dollars per second.

I did the matter?

Oh look at you?

Yeah, I can do that.

So yeah, I mean so among other ads that we're going to be lots of celebrities in the Super Bowl ads is here.

You're going to see some AI ads as well.

Okay, all right?

In the Washington Post today they're telling us what we've been getting wrong when it comes to exercise, and I think, if you're like me, you're gonna like this. It turns out taking the stairs can really do your body a world of good. So when given the choice between the escalator, like we have the the almost circular escalator here, one of the only in the world, or the stairs, take

Whe'res ten thousand steps now?

Are we still doing that?

Are we?

Yeah?

On your Apple watch? Are you still doing that?

I still try to do that.

I mean, look, it's something's better than nothing.

In this way. I mean I must froze to death.

I still speak some people running I don't know, but wait, I like this one just to give people out there like myself some hope. Climbing two to three flights of stairs just a few times a day lowers the risk of dying by forty percent.

Wow, do you need more incentives? Up the stairs.

Where did they come up with having a bag of cheese its today? How much does that?

Well?

Maybe if you eat the jesuits while you're walking up the stairs, all right.

And then this one, this is a fun one.

So it's from the Hollywood Reporter about a Christie's auction next month with some iconic memorabilia. So this collection belonged to the late Indianapolis Colts owner Jim Ursay. And here are just a few of the items. Sylvester Stallone's handwritten script notebook from Rocky that's pretty cool, the volleyball that kept Tom Hanks company in the film cast Away Your Mother, Wilson Wilson very good. And Ringo Star's drumhead from the Beatles debut on The Ed Sullivan Show. And I've a

Okay, very cool, Okay, thanks, any so, let's starve the newspapers.

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