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Victoria Fernandez, Jordan Rochester, Michael McKee, Francis Donald, and Lincoln. We go into this inflation reports strong with Neil Dutta of Renaissance Macro. Neil, you're more cautious now on real GDP, on the growth of the nation, all the inflation numbers pretty much on the survey, but I really want to focus out on real personal spending decline way off survey in personal income with a nice lift as well. I've got retail inventories which I don't understand. We're going to
skip that. I got a little bit of an equity lift. I went right to the ten year real yield came in a little bit, but it comes right back. Neil Dunta, am I right that this was a nothing burger?
I mean, real personal consumption fell quite a bit to start the quarter. That's that's probably gonna put downward pressure on tracking estimates of first quarter GDP and will probably prompt some marketing to market of forecasts among among the consensus. So you know, I don't right, is it a nothing burger? I mean, I think the inflation numbers came in in line with expectations, but real GDP is probably getting worse.
Not This is critical folks with real spending. I mean, what we see on the eco screen of the the Bloomberg, real personal spending came in light personal spending itself came in like a little bit of a constructive revision. But you know, Neil, Neil, it's unfair to ask this, but why it's onfair Friday? I mean, do you go, can you model out subtwo JDP looking at two quarters of data to the fourth of July.
Yes, I think that's possible. I mean, look, most of the upside surprise in GDP growth last year was in two areas, consumption and government spending an investment. That's what drove most of the growth. So if you think those two areas are going to slow, it doesn't really take much. At the same time, you lay around the fact that residential construction is likely to get worse, not better. And you know, I mean export activity was a driver for
growth last year. I mean, if this trade stuff keeps up, I mean there may be some risk to exports as well. So I don't think it's that much of a stretch. I mean you're talking about a zero point five percent monthly contraction and real consumer spending. I mean these tracking estimates might be at one percent for the quarter after today.
Yeah, that's kind of where I wanted to go, Neil, because I am to this amateur economist here. That's the number that kind of jumps out. I mean, I'll just highlight it for the audience, real personal spending. The consensus was for decline of zero point one percent, came in a decline of zero point five percent, So missed there any Compare it to last period where it was revised higher to positive zero point five percent, So a big
delta there. I do know that, you know, you economists tell me that the consumers seventy percent of the economy. So that really does get your attention? Does that? Is that a number that moves around a lot?
Real? Well, I mean consumer spending tends to be you know, more more stable. I mean a lot of acyclical areas of consumption, right, I mean, so that you know, people have to go out and kind of spend, but ultimately, you know, generally speaking, consumption follows u income growth, and you know, I mean what what what you can basically say is that you know, in January, I mean there was a there was an increase in in precautionary saving maybe,
I mean that that's basically what it's income. But again that goes to totally against what people are sort of worried about right now, which is inflation expectations. Right I mean, that's allegedly the reason why the FED is holding off everyone's planning to you mish. Now, guys, think about what inflation expectations should mean. It should mean number one, people are going to bid up their wages because we know that wage growth is set with short run inflation expectations
in mind. I mean, I don't know, good luck to any worker that's going to try that right now. I mean you're in for a root awaken. Importantly, it's you try to spend more to beat the higher prices later, there's no evidence that that's happening. You're seeing precautionary saving, not precautionary spending. So this notion that inflation expectations arising, and this is why the Fed needs to hold off.
Is all right, Neil, I want to get one more question in here. I think it's so important, Ian Lingoln's being patient to wait for Neil Dudda. Is there a wealth effect of the fancy people in the personal income, personal spending? Do you see the stock market? Do you see the way Paul Sweeney made money on Nvidia? Is that in those statistics this morning?
Well, I mean there was a great article from the Welfare Journal about a week ago, I believe, about just talking about how consumption is being driven increasingly by the high end, and so you know, obviously it's affected by what's going on with asset prices. But what I know about asset prices is that you know, stocks are not making new highs. They haven't been number two. You know a lot of these sort of alternative assets like crypto
have come under pressure. And more importantly for everyone else, home prices are moderating because inventories are jumping. So you know, to the extent that the wealth effect was an important driver of consumer spending, that's looking a little bit shaky now as well, Neil.
Thank you so much, Neil. Data Adren Mac just brilliant there as we looked at PC and as Paul Sweeney you mentioned real consumer spending, real personal spending with a shock, a little bit negative maybe new GDP markdowns. So we'll get to the bond market in a moment. Here with Ian Linga our economic indicators, what we do each and every day, but particularly on these important key days. It's brought to you by IBKR. Will the year over year
change in the US business inflation us PPI? Will it exceed three percent in February of twenty twenty five At IBKR Forecast Trader, the yes was recently at thirty nine percent. What's your take? Trade your prediction at ibkr dot com slash Forecast. We welcome all of you on YouTube nationwide again, go to YouTube Bloomberg Podcasts. Subscribe there, growing each and everyday, seven days a week, grows on a week as well. Joining us now with BEMO Capital Markets, Ian lingas Ian,
I'm looking at lower yields. Neil Dudd has given me lower GDP. Do we finally have in place the vaunted Lincoln vector where we get shockingly lower trends in yield?
Well, I do think that we're overdue for a continued drift lower in rates. I wouldn't be very surprised to see the current move get ten year yields a lot closer to four percent.
So that gets your.
That gets your attention. So how do you think the Fed ian is going to look at some of this data today as they try to get a gauge on their balance between the labor market and prices.
Well, I think the core PCE was in line with expectations. I think that to a large extent, the inflation profile is known. What's unknown is what's going on in Washington. How does that lead through to sentiment in the employment market? And that jobless claims figures from yesterday we're a bit troubling. We're at two forty two. It's the highest since early December.
So again, that kind of suggests that it feels like the federal reserves, just like the rest of us, they're just kind of looking down to Washington, DC, trying to say, on top of all the newsflow coming out here, how long can they sit on the sidelines, do you think, Ian?
Well, I think that the Fed can avoid cutting rates again at least through the first two quarters. I think it's very reasonable to assume that they skip the next few meetings. The first rate cut maybe comes in September, but there's a lot of uncertainty between now and then. The only way that things are going to shift dramatically is if we see a for the correction the equity market that titans financial conditions, or an increase in the unemployment rate, both of which are possible.
We have to do an audible here. We're going to come back to interest rates of the ling and Ian. Canada just reported a whole series of economic datas and I'm sorry it's positive including I think I see here third quarter GDP revised from a gloomy one percent up to two point two percent. Is as well. You've got the Bank of Montreal combine working for you. How do
you filter in the response of Ontario, Quebec, Alberta. How do you when you see their response to propose tariffs from sixteen hundred Pennsylvania Avenue, What does that do to America? What does that do to our GDP? And then on to your four percent four point zero percent ten year yield?
Well, we do know that the Canadian economy is a lot more rate sensitive, and the Bank of Canada has been quite a bit more aggressive on the ray cutting side. So seeing the Canadian economy respond positively, isn't that surprising? What I worry about, and I think that most Canadian banks do, is what happens with this looming twenty five percent on the fourth of March. Does that really derail
growth in Canada? The short answer would be it probably takes a We probably see a material hit which should translate through to lower rates, and the US probably gets a bit of downdraft as well. So I think that there's a lot of cross currents brewing in favor of lower yields in the near term.
So what does Bank of Montreal say about Doug Ford of Ontario and what he's going to do in windsor Canada to put x tens of thousands of Americans out of work? How does Bank of Montreal see that sequence? If we get it.
Well, I think that the short answer is we're all in the position where there are a lot of political uncertainties, and the back and forth between leaders, whether it's coming from Trump, whether it's coming out of China, whether it's coming from Canada or Mexico, will continue to fuel this uncertainty.
So how do you think this, I guess. Coming back to the US here we had some the real personal spending came in materially weaker than expected.
There.
How does the FED look at that kind of data.
Well, I think the first thing that FED would say is the consumer remains on str footing. Take a look at the longer term trends and there's no real reason to start worrying about the consumer. Yet it's one data point. I'm looking at that and I'm saying, Okay, this is
not going in the right direction. If Q one ends up ad with a one percent annualized growth rate, that will matter to the FED because that is the type of economic slowing in an environment where we might see higher inflation in the medium term or near to medium term, and that's a recipe for stagflation, and that's got to be a concern for the fact.
And your commute across the nation. Good morning to those of you in Canada waking ump as well from the Maritimes out to British Columbia, we say, good morning. It's Bloomberg surveillance. With all of our digital efforts on radio, including Apple CarPlay, Android audio, and the shock is serious. How well that's doing for us? Good morning on YouTube. Subscribe to Bloomberg Podcast. Humbled by the audience today, Thank you so much for tuning in, Ian Linn with US Now Capital Markets.
Ian, we're looking at a ten year US treasury written around four and a quarter percent right here, and I guess you could say it's still kind of within a range we've seen for a while here. But where do you think we end up the year on the US ten year treasury?
Well, when the FED is on hold, like we expect them to be for the next couple of quarters, that tends to translate into a range of about one hundred and ten basis points for tins, and so I think that by the end of this year we'll be back towards the bottom of that range, which puts US at four percent ten year yields. I think the bigger drama is going to play out in a two year sector, and we see two year yields at three point fifty by the end of the year.
I mean, this is where Michael Purvis was a tall back. And I think he's scheduled next week. Okay, he's fly fishing somewhere. Good for him right now. But you know, to the point the short term paper, the Sweeney yield, I mean, did he just say three fifty? Did? Is that what I heard? Lah?
Four?
Four points? The two year are yeah? Points are right now yep. Equity markets churning here up eighteen right now. The VIX comes in a little bit of better tape twenty point eight zero on the VIX.
Palla and a lot of folks out there, both academics and practitioners say, this Federal Reserve historically is used kind of not bad data, but certainly historically dated data, backward looking data, and if you look at the real time stuff, you could make the call that inflation's already whipped, and you know, maybe they should be maybe even cutting rates here. How do you think about that.
I'm very open to the idea that it's difficult for monetary policy makers to use hard data because there is the lag in data collection, there's the lag in reporting. However, I don't think that the idea that if we look at the real time data, for example, oil prices for some of the more obvious markets, that the FED should be basing their monetary policy decisions.
Off of that.
Instead, it is those forward looking indicators, look at break evens, look at the survey based measures, and that's what the FED is worried about. And I think that that's why the Fed's going to be reluctant to start cutting again.
So on a yield basis, if we get a lined four point zero, just you know, you're sitting around and having a little bats. I mean, Ian, just cut to the chase. What does it mean for the housing market? Is it like boom recovery or is the ambiguity that wages are slow as Neil Datta talked about, where we don't get a housing recovery.
I think that the housing market is going to struggle. Part of the reason is that the mortgage rate to treasury spread is still relatively wide for a variety of reasons. And as long as mortgages are high, then translating this through to a stronger housing market is going to be difficult, especially if we see an increase in the unemployment market or the unemployment rate. That's where I start to get really worried about housing.
Great summary, Ian Lannon, thank you so much. With female capital market's working in fixed income there, we're going to come back to economics. Francis Donald with us here really off the shock as Paul mentioned of consumption of personal spending.
My attention there everybody writing.
This weekend, Paul I wonted do we start to see sub two percent statistics? Yeah, there's a lot going on here, folks. It's always important to talk to Francis Donald with RBC, the Royal Bank of Canada on inflation and growth. But based on conversation one, two three of this hour and following on to McKeon the Fed, Francis Donald, all of a sudden, maybe the conversation of the day. Are you going to write for Monday, Francis Donald of sub two percent real GDP.
I don't think we're there yet, Tom, So our forecast for twenty twenty five was two percent, and that's a bit of an annoying forecast because two percent is sort of the break even point for a lot of equity models. So a lot of are hoping you're going to go sub two percent or above two percent, But one point nine isn't going to make or break the US economy.
And you know what, Tom, I know there's a lot of January data that just landed, but the path of the US economy, there are so many potential outcomes based off of the sequence and size of Washington policy that even if you see downgrades from two percent to one point eight, that's probably not changing your outlook on what's ahead.
It's just marginally changing your starting place. So I am more focused on headlines related to tariffs today, a little bit of the upside surprises we've been seeing in Europe and Canada. Maybe changing the starting place for the two. Wouldn't get too hung up on a GDP forecast, said from an economy.
Rist, I listened to ed Yard Danny, who's been, of course talking of the roaring twenties here, and he was heated that yes, there's a lot of noise now and a lot of worry in that we're pulled back four percent off this grateful market. Francis Donald, what's your vision for the end of the year. Do we once again get a growth recovery as we have the last two years?
Well, Tom, were big believer that there's two economies at play in the United States. There's the wealthy who are benefiting from non income gains that is stock markets, house prices, their net savers, or they're doing great with those high interest rates. That part of the economy is incredibly resilient and that part of the economy is absolutely experiencing the roaring twenties and are likely to continue to do so
absent some sort of wealth shock. And then there's an entire segment of America, in fact, the other ninety percent, that are struggling under the weight of high interest rates, and you're going to see that start to creep into some of this data. They're still responsible for fifty percent of the economy. This is so critical to twenty twenty five because it's muddying our ability to read so much
of the soft data versus the hard data. High income Americans are going to lift aggregate data probably through to your end unless they see a wealth shock, of course, and other pockets of the economy are going to look very much like they're in recession. So we are looking at things like consumer credit data. We've actually seeing credit card usage as a share of retail sales popping higher.
That's higher rates coming into play. And if we don't get rate relief big segments of the United States, then big parts of the United States will see absolutely sub two percent growth. So for markets, the aggregate matters. For corporations who are thinking about their operating environment. When we talk to our clients. We're saying to them, who is your client group? Because I can't give you one headline number in the United States anymore to explain the entire
path of the US economy. We just got to get deeper.
So we got to get Francis Donald on twice. Yep, we can have it on now about the booming economy, and you and Alice can have around at eleven am about the gloom exact. That's the way we roll.
So Francis, can we still kind of refer to the US economy as you know one of exceptionalism. Is that still a storyline.
And you're still going to see US resilience in play, probably for several months at least, based on the path that we're seeing now. No, is that exceptionalism as high as maybe those who had expected it six months ago. No, there are some downside the prizes. One of them is that the Trump administration, a lot of the enthusiasm economically was that we'd see those corporate tax cuts in that deregulation.
But I remember a few months ago talking to the two of you in New York that it's going to matter what the sequence of policies are and we're not getting a sequence that's really market friendly right now. We're hearing about tariffs and maybe fiscal pullback before we get some of that juicy reflationary type of content. So this is going to be really important heading into twenty twenty five.
You got an entire combine. I remember the day Royal Bank Canada took out Minnesota, Piper Jeffrey. I believe it was. And you know you've done such a great job with a cross border view at RBC. Francis Donald, what is your summation of the power of Canada with a tariff response? Dare I say tariff retaliation to a quoted twenty five percent statistic? Can Canada get surgical about that to put Americans out of a job? To shift the president of the United States.
Well, just a reminder, I'll give you a list, Tom, Canada provides sixty percent of oil imports to the United States, ninety percent of electricity imports, ninety nine percent of natural gas, eighty five percent of potash, ninety eight percent of canola, thirty four percent of your meat, and let's not forget critical minerals, which is nineteen percent of US imports, twenty
seven percent of your uranium imports come from Canada. Canada helps to heat the United States, it helps to feed the United States, and this is not twenty eighteen anymore. The US is struggling under an electrical grid and have substantial energy needs that Canada can help to rectify. So I think the focus should be on how much can Canada support US exceptionalism going forward, and what is the
upside of actual increased collaboration between the two countries. That's the story that I think will resonate because President Trump has huge ambition for what the US economy can be common. There is a lot of upside for the US as well. Canada upside equals US upside.
We spent a lot of.
Time thinking that Canada benefits from the United States. The reverse is also true, and we got to push that narrative, not just for Canadians but for Americans as well.
She running for office, awesomes. That was wonderful, proud Canadian right there. So he Francis, I think I first became sensitive to this K shaped economy and what it really means and how pronounced it is maybe in the twenty sixteen election cycle, and now here we are, you know, gosh, almost ten years later, it still seems like it's still a thing. Is this a permanent part of the US economy going forward?
Do you think?
Oh?
Yes?
And actually in twenty sixteen and through to twenty twenty, we would talk about the K shape and the concept that there was actually like halves and have not so and that was a structural situation. The problem that we're encountering now, especially in the past two years, is that in the past, the haves and the have nots actually moved more or less the same throughout. So good times were good times for everybody. Bad times were the reverse.
The reason there's so much focused from economists like myself and from RBC on the K shape is that not only do we have this huge inequality, but their economic situations are not moving together. They're moving separately. So in the past you could look at one group and know more or less how the other ones were moving. That's just not the case anymore. It's broken our models, and it changes how we have to talk to clients about who their end customers are.
Francis got to leave it there, Thank you so much. Francis Donald with RBC.
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Why don't you drag in here? Jordan Rochester? Who's you know? I mean? He's rewriting his rewrite from exactly usearch.
You're at zoo, absolutely, Tom Jordan Rochester fit macro strategy for our friends over there at Zuo. Jordan, what's your feeling here about? You know, this flooding the zone approach from this White House and maybe some of the policy uncertainty that creates in the marketplace When you talk to your clients, how do you kind of suggest they deal with that?
Well, from a politics perspective, it's getting things done, which is pretty painful for us in markets keeping a track of it all. Flooding the zone means you split and divide your opposition. They're not sure which agenda to oppose in that day's media round. But for us in markets, each one has a different investable theme. You've got tariffs hanging over Europe, Mexico, Canada, China like a Damocles sword,
with the risk of near term dollar appreciation. But to be honest, this market is trying to call the bluff of this president and doubting whether these tarots will go ahead with the numbers he's put forward or at the pace that they've been announced. So this weekend could be a big one. The market still has quite a few people out there thinking it won't happen in the way that he said, such as the twenty five percent. Then you've got the DOGE labor cuts, and that's going to
really weigh on NFP prints in the months ahead. If you were to listen to the pr campaign from Elon Musk, the actual numbers so far are quite small, a lot smaller than what he would be suggesting. But we are aware that in the next couple of months, if things accelerate from Doge, it could be tricky for the Fed. This market will still probably try to price him rate cuts, not rate hikes, even though we think the Fed's on hold for the rest of the year. And then you've
got a deregulation agenda. Surely this is an administration that's good for business, but the tariff policy is kind of conflicting with so, and ask your question, he's studying the zone many different policies. Each one has a very big impact on markets. Some of them conflict with each other, and it kind of leaves us all scratching our heads.
So I guess from the currency perspective, Jordan, do I just kind of buy the US dollar and just go sit on the sit in a corner there and wait.
If it wasn't for tariffs, I'd be telling clients to sell the dollar, because there's a great sort of make Europe great again mega not megafeme in Europe. However, the tariffs are a big deal for everyone's terms of trade if they are to happen in the numbers that we expecting them to see. Imagine if Europe gets a ten percent tariff for example, across the board, reciprocal or not,
that would mean a lot for Euro valuations. So what we're saving to clients right now is, yes, by the dollar, we think euro could go down to one or two even parity if the number of tariffs is higher than what we expect, and then actually that would be a great opportunity at some stage to take the other side is a down in euro and then up in the second half of this year, because I think the EU will get their act together and respond to this American
threat by doing reform, more issuance of fiscal issuance, and we'll see a better investment outlook for Eurozone in the second quarter, you know.
Jordan, I I look at the ability to try for all of our listeners and viewers to get a single point terminal view. Let's call it December of this year. Dare I say into twenty twenty six, you have the luxury of constant Rizzuto in Rochester at Missuo. Do you guys have a combined view that gets us in the next year or are all bets off.
Well, it's hard to predict what the weather will be tomorrow time. Let them know what's going to happen next year. But I imagine what's going to probably happen is we have a lot of the events in politics in the first half of this year and the second half of this year more about the implications for the economy. What do I mean by that? We've got tariffs in the next one month or two. I think a reconciliation bill will probably pass through Congress in the second quarter. It
might even be April. Joe Biden got his done in March twenty twenty one. So it's very possible that all the politics happens in the first half, the second half will be about the implication of it, and I think that we'll see European growth start to outperform us this market. Tom is trying to bring forward that theme. I just think we're not there yet. We need the tariffs to go through first before I can jump on it.
Pound Sterling here, Jordan, what's the call here?
I think Sterling lower. We're looking for something like one twenty two during the stage of the next few months, and that's on the back of the tariffs. I also think that there's a domestic weakness story that's creeping up. Last year, the best strategy I had was to tell clients to hold back from doing Dubvish calls on the Bank of England because we had very sticky inflation. The budget has changed things dramatically. There's been a tax height for employers and what we've seen is a collapse in
the employment intentions of firms After that tax hike. It costs everybody across the United Kingdom one point seven percent more to employ staff per year from April onwards. So I think what we'll see is in the April numbers that we get in May quite a substantial weakness in the labor market feeding through to growth, and then by the June meeting the banking and cuts. That's something that's a bit of a non consensus view because everyone thinks
the banking cuts every quarter. I think they accelerate it when they get to June's data round and that should push Stirling lower.
Jordan right here. A final question is you away tariffs? And I get that. I have great respect for the idea, wait for the facts. Is there a tradable big figure move in any of the major currencies right now?
I think there is, and it's on a Japanese bank, and I think Japan is the one. There's a structural change taking place in Japan that's decorrelated it from the rest of the cycle. Now dolly ed of course follows US interest rates just like everything else. But if you look at Japanese rates, structurally higher yields is the story, Tom, and I think that's a sharp ratio that's going to be pretty high.
This is really critical. Then do you suggest that the reflation theories plural of Japan have succeeded.
I think they're in their infancy, but they're going to succeed. If you look at the labor market, we are seeing some of the largest wage hikes Tom since the nineteen nineties. You've got part time workers getting six to seven percent. You've got the overall economy at five You've got full time salaried workers at three percent.
These are all.
Numbers above two. And we've got the upcoming shunt to negotiations. Tom will get somewhat wind as to what we're going to get out of those numbers. But I think the numbers going to be another strong five percent like it was last year or higher. You might have seen the Bloomberg story early in the week about steel workers asking for fourteen percent numbers we've just not heard of before
in Japan. So if the chinto goes well, I think that we're going to see this wage story become self fulfilling and Japanese core inflation will be stronger than what the bank pack expects.
I would respectfully suggest, folks, I haven't heard that conversation that we just had with Jordan Rochester good thirty thirty years.
Yeah, I think you're right.
I think I think you're right to go like that was Fabulous, Jordan Rochester and the Zoo.
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There is a wall. There's any number of walls in Washington, to say the least, there is a CIA Memorial Wall, of which there are one hundred and forty entries. There are a one hundred and six named, and there are thirty four names on the CIA Memorial Wall not named. Some do others talk. We now speak to one of the great doers of the American military, Mick mulroy. He is godfather to four of the kids of those people on the CIA Memorial Wall. Mick, I'm going to cut
to the chase. We just saw the Chairman of the Joint Chiefs of Staff shown the door. Can our listeners, can our viewers know that our military is at work in an organized, productive manner on this Friday morning.
So good to be with you all again, I'd say, of course, the president does get to choose who he's going to have as his key advisors to include the military. But I'd also say, and we'll disclosure. I know General Brown that he was an example of meritocracy at work. He was exceptional throughout his career. The facts speak for them.
Elves fighter pilot, squadron commander, Wing Commander, Deputy at Central Command, in charge of all the Air Force in the Indo Pacific and then of course Chief of Staff for the Air Force appointed in the first Trump administration, so highly qualified. If there was issues with DEI, that's a policy issue. Just so everybody knows, the US military, even the highest
ranking don't do policy. They essentially advise and they carry out orders by the civilian leadership of the Pentagon, including you know, obviously the Secretary of Defense at his staff. So if that was an issue, then then that could have been addressed without the need, of course to remove c Q.
Brown early.
He had many much time left on his post normally that is not something that changes.
How to be quick here because Paul wants to get in here. MC moulroy as simple as I can. And the first term we had Kelly, we had McMaster. You said at the table with General Madis. We don't have those people now, do we. This is a new approach to Trump too, isn't it.
Yes, I mean, certainly, I think the three you mentioned are three of the best leaders of our generation, at least from my perspective, especially Secretary of Matis. But this is obviously a different cabinet. It seems to be. You know, you can pick on experience and accomplishment, you can pick on loyalty to the president and political ideology, and I think I think the latter is really came through in this And that's again, a president gets to choose that,
but every president gets to choose that. So it's kind of as an argument that you can make. But essentially so did President by right. So I would say he picked these individuals primarily for their loyalty to him and their political ideology, and that's his choice. But that is a difference, I think than the first cabinet, which was picked primarily for accomplishment and a long level of experience in the job that they were going into.
Nick, President Zelensky Ukraine, coming to the White House today, can you give us the latest sense of how you think this situation in Ukraine could play out in the coming days, weeks and maybe even months.
Sure, this was a big week. We had the French president and the uk Prime minister, and now we have President Zelenski coming today and maybe I think likely or he wouldn't be here signing this rare earth mineral agreement. So starting with that, it's essentially ended up being that American companies will get access whatever that means to fifty percent of the minerals in Ukraine, which is substantial. I mean,
I've seen reports from reputable groups that it's trillions. Half of it or more than half of it's under the part of Ukraine that's currently occupied by Russia. So from the Ukrainian perspective, if the US wants access to that, they need to help Ukraine gain their territory back. What's not in here and what Ukraine really wanted, of course,
were security guarantees. That is the biggest thing they need, and ultimately there probably won't be a ceasefire agreement unless there's some security guarantees because Russia has violated, specifically when it comes to Ukraine, the agreement not to attack them multiple times, starting in nineteen ninety four when they give up clear nuclear weapons. In twenty fourteen after they already
you know, annexed CRIMEA. They agreed not to do it again, they did in twenty twenty two, So there should be zero trust on whether they will carry this out unless there's a security guarantee by NATO or European partners or the United States are all the above. If there's not, then it's hard to see how Ukraine would accept a ceasefire that would simply allow Russia to prepare to then attack them again. But we all should hope that's the case.
We all should hope that, of course, President Trump and his administration are successful in getting us to a ceasefire that's lasting to stop this and this war that Russia started.
Mick, is there any scenario that you can think of where President Putin and President Trump could come up with some type of peace record that does not include Ukraine at the negotiating table.
No, because ultimately Ukraine has to decide and not to fight. I mean, they would be hard pressed to continue to fight, particularly by June when all of the ammunition we've already provided to start running out without the US support. But they can, especially if Europe really steps up, and they've already proven that they beat the odds, right, Most analysts, like myself we predicting three weeks and it would have been over an hour over three years, So don't count
them out. But the US needs to continue to support. It's not just altruistic, it is in our own interests. They are depleting the Russian military so substantially that within the last two years they lost more soldiers than we lost during the entirety of a war in Iraq. It is really taxing on them and it's difficult for them to maintain this, but it will be difficult for Ukraine to keep up that level without the US full support.
Nick, what is the signal to our allies of what we witnessed at the United Nations this week back to nineteen forty five, we went with Team Russia.
So certainly scared the Bejesus out of them, quite frankly. And there's two parts of that, right. So they are very used to their allies being what it has been, you know for decades, which is the United States in NATO, the most significant military alliance in history. Where I can say that they have fallen short they be in our European allies. If they have essentially left a lot of
their security over to the United States. They had the biggest brother on the block, so they were fine with spending their money on things other than their own national defense. They've woken up to that they are all increasing their expenditures on their own national security beyond what the NATO calls for, which is two percent, some going as three up,
potentially even a five percent. That's a good thing for them, it's a good thing for NATO, and many presidents, to include President Trump, have been pushing rightfully for them to do that. So that's a good thing. But the problem is they might get to a point where they just don't trust the United States when it comes to our allegiance to NATO. I know Secretary Ribo have said that's not the case, so as national security fighter Waltz, I
believe that's the case. But that has scared them so much that they are now concerned and potentially even starting an alternative to NATO.
Mick, we got to leave it there. We can talk for hours with the Lobo Institute, McLaury with his service to the nation, with the Marines, and with the CIA.
This is the Bloomberg Surveillance Podcast. Listen live each weekday starting at seven am Eastern on Applecarplay and Android Auto with the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal.
You look at the front pages of Lisa Matteo Report, you're not mentioned in Taylor and Travis, are you?
No, we're not. Okay, definitely to stay it away from that. What we are talking about is, of course AI. We always talk about it, but people are finding new ways to use it. That includes cheating on job interviews. So the way they're doing it, they're using these generative AI tools like coding assistance, teleprompter apps that feed them live
answers when they're doing video interviews. So Business Insider are saying, Amazon they want to put a stop to it because they're seeing more of it, so they change their guidelines and their job applications so you can be disqualified if you use any of these things. The question is, how do you know if someone's using it? Yeah, So Amazon
actually put out some guidelines. So for example, those watching on YouTube, if I'm doing the job interview here, I'm usually looking and if you ask me a question, I'll be typing, you know, because you're typing in the question, you know, so what AI will response. So if you see someone typing, that's a red flag. And then if you see someone you know answering your question but they're kind of like looking like they're reading like this. If
you're on YouTube, that's another red flag. So what they're doing is they're trying to like cut back on this because more and more people and it's not just Amazon is saying it. Other these are saying that people are doing this, They're cheating on these resumes.
There's there's a certainly be a story on bloomber guest today. There's certain keywords that people are facing on. Then you know, you see it on somebody's resume. You can tell the resume was created by Yeah.
I'm getting the buzz that for college applications is definite. They can tell a heartbeat college. I don't know other than good luck with that.
Okay, this was interesting.
Screaming from the screen. We could tell you this is interesting.
The erosion that's eating away at those homes in Nantucket. So it gets like into a deeper look into it. Some of the pictures are amazing. If you look at this article, but they say emergency crews. They're scrambling. They basically use these steel beams. They put them under the homes, they jack them up, and they roll them back about a huge you know, a few hundred feet back. But it's happening more often since twenty twenty three. Houses on
the street is called Cheap Pond Road. They've been condemned, demolish. Some are moving back and some are They just have to sell for pennies on the dollar, so they're losing out. But here's what the residents are saying. And Paul, this goes to you in the Jersey Shore because Nantucket doesn't have those jetties and those sand like replenishment projects like the Jersey Shore. I mean, I remember sitting on the beach and the Jersey Store and seeing those ships come in and I was.
Like, what are they doing right right now as we speak.
Yeah, and that's what they're doing. But they're saying Nantucket doesn't have that.
They're out in the middle of nowhere where the erosion has been there for years. And I don't pretend to be an expert on it, but you know, I'm looking at it right here now on Chester Street in Nantucket. You know, Lee real Estate has it, and it's a nice little small bungalow on the street, distant from the water. It's like you could shoot a movie in front of it. Are you ready? Three point eight million dollars and it's I mean it's it's three bedroomish. Yeah, you know.
Well the problem a lot of these people bought during the Yeah, their their values going down because they're going to be falling into the water. Positive three million. Crazy.
If you're going to buy a home on Nantucket or kit caud my personal je, you have to also be able to have a fractional ownership in a plane. If you can't do that, then don't buy it, because if you're not flying up there easily, you can't drive. Yeah, it's a disaster.
Okay, what else?
Last one, this big mistake by City Group. It's actually coming to light now. The Financial Times has it. They credited client's account with eighty one trillion dollars. It was meant to send only two hundred.
And eighty dollars.
It has been last April never reported because it was like a near miss, but the Financial Times looked into it. It said it was missed by a payments employee, missed by a second official a third banker finally found it. The payment was reversed several hours later, so that is good news. No funds left the bank, but it just shows that you know they're going after that.
As a former bank teller, it happens. If I had a three thousand dollars miss at the end of the day, I could find that in five minutes. If I had a twenty three dollars eighty seven dollars miss, could never find it, and they take it out of your paycheck.
Eighty one trillion, I know the round numbers.
They can find easy, and they took it out of the paycheck. My sister went through this exactly. Thank you the newspapers withou. Lisa Matail greatly appreciate that.
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