Bloomberg Audio Studios, Podcasts, radio News.

Bloomberg Audio Studios, Podcasts, radio News.

This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along with Lisa Bromwitz and Amrie Hordern. Join us each day for insight from the best in markets, economics, and geopolitics from our global headquarters in New York City. We are live on Bloomberg Television weekday mornings from six to nine am Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen, and as always on the Bloomberg Terminal and the Bloomberg Business app. Steves with us around the table. Steve, good Morning's here, Good morning. I'm going to ask you then, first question, who wins?

This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along with Lisa Bromwitz and Amrie Hordern. Join us each day for insight from the best in markets, economics, and geopolitics from our global headquarters in New York City. We are live on Bloomberg Television weekday mornings from six to nine am Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen, and as always on the Bloomberg Terminal and the Bloomberg Business app. Steves with us around the table. Steve, good Morning's here, Good morning. I'm going to ask you then, first question, who wins?

So caveat first. Okay, I'm not speaking for Newburger Berman. I'm speaking just for myself. I don't want to get into trouble. And what I'm about to say is just pure political analysis. And the analogy I'll draw is to the financial crisis. You know, in August of two thousand and seven, the subprime paper market collapse, and at that point, when you look back on it, the financial crisis was baked. Everything else was completely inevitable. So I think that it is completely inevitable at this point that Donald Trump will win every single swing state and we'll get elected. And the reason I think this way we'll unfold is part one of the story is that the protesters and all the universities are becoming the face of the Democratic Party. But that's not one hundred percent at this point. But what's going to solidify it is in August at the Democratic Convention, which is in Chicago. Ironically, you'll see all these protesters again, and a lot of them will be screaming in yelling things like not just at the Israel, but death to America because they can't help themselves, and the country will be a polled and that'll be it.

So caveat first. Okay, I'm not speaking for Newburger Berman. I'm speaking just for myself. I don't want to get into trouble. And what I'm about to say is just pure political analysis. And the analogy I'll draw is to the financial crisis. You know, in August of two thousand and seven, the subprime paper market collapse, and at that point, when you look back on it, the financial crisis was baked. Everything else was completely inevitable. So I think that it is completely inevitable at this point that Donald Trump will win every single swing state and we'll get elected. And the reason I think this way we'll unfold is part one of the story is that the protesters and all the universities are becoming the face of the Democratic Party. But that's not one hundred percent at this point. But what's going to solidify it is in August at the Democratic Convention, which is in Chicago. Ironically, you'll see all these protesters again, and a lot of them will be screaming in yelling things like not just at the Israel, but death to America because they can't help themselves, and the country will be a polled and that'll be it.

It'll be over.

It'll be over.

Let's say, you right, Crystal Bull dead on. Next question is what do I do with that information? And when do I put the trades on? And what are the trades? How do you sort of I.

Let's say, you right, Crystal Bull dead on. Next question is what do I do with that information? And when do I put the trades on? And what are the trades? How do you sort of I.

Would say, you do largely nothing, because I don't think that whether Trump wins or Biden wins has any real impact on the economy at all. You know, there'll be things that people will will want to trade, which I'm not going to talk about because I haven't put on.

Would say, you do largely nothing, because I don't think that whether Trump wins or Biden wins has any real impact on the economy at all. You know, there'll be things that people will will want to trade, which I'm not going to talk about because I haven't put on.

Those straights yet.

Those straights yet.

Because it's because it's too early. But there'll be things to do, but that'll just be short term trade.

Because it's because it's too early. But there'll be things to do, but that'll just be short term trade.

Some investing. Can I jump in? That's what I'm interested in. You said it's too early, when it's the right time to really think about expressing these as trades.

Some investing. Can I jump in? That's what I'm interested in. You said it's too early, when it's the right time to really think about expressing these as trades.

Oh, I think when in August, when at the convention, when this one when I said happens happens, everybody will realize that that's the case.

Oh, I think when in August, when at the convention, when this one when I said happens happens, everybody will realize that that's the case.

So you said that it doesn't really matter who gets elected. Yes, that's fascinating to me because some people are saying that Donald Trump would put on pretty significant tariffs, particularly to China, and that this would increase inflation sort of de facto in the United States. I see you rolling your eyes. You can respond in a second. And then at the same time you're going to have, you know, the tax cuts, reinstadts.

So you said that it doesn't really matter who gets elected. Yes, that's fascinating to me because some people are saying that Donald Trump would put on pretty significant tariffs, particularly to China, and that this would increase inflation sort of de facto in the United States. I see you rolling your eyes. You can respond in a second. And then at the same time you're going to have, you know, the tax cuts, reinstadts.

And dogs will be lying together and it will be end of the world and doom, gloom and whatever lunging together.

And dogs will be lying together and it will be end of the world and doom, gloom and whatever lunging together.

I don't know, it could usum gloom depending on your view.

I don't know, it could usum gloom depending on your view.

But what do you make of this?

But what do you make of this?

Why do you discount this?

Why do you discount this?

I mean, do I think that Donald Trump would increase tarifts to China?

I mean, do I think that Donald Trump would increase tarifts to China?

Sure?

Sure?

Do I think that would have a massive inflationary impact in the United States.

Do I think that would have a massive inflationary impact in the United States.

I think that's ridiculous.

I think that's ridiculous.

So you know, on the margin, would it impact you know, for example, I'll give you a company, First Solar, So First Solar sells solar panels to utilities. Now, they're already massive tarists that are helping them. Now, could Trump increase the tariffs or make them longer so that stock would do better? Could be But you know the price of T shirts going to go up, as a price of food going to go up. No, I mean you have to remember that the United States is of all the developed world, the United States is the most insular economy of any.

So you know, on the margin, would it impact you know, for example, I'll give you a company, First Solar, So First Solar sells solar panels to utilities. Now, they're already massive tarists that are helping them. Now, could Trump increase the tariffs or make them longer so that stock would do better? Could be But you know the price of T shirts going to go up, as a price of food going to go up. No, I mean you have to remember that the United States is of all the developed world, the United States is the most insular economy of any.

Of any developed world.

Of any developed world.

So the fact that tariffs will go on in China, big deal.

So the fact that tariffs will go on in China, big deal.

But one thing you recently spoke about was infrastructure spending, and how do you like all of those trains? What happens to all of that if Trump becomes elected because all that is attached to the Biden administration.

But one thing you recently spoke about was infrastructure spending, and how do you like all of those trains? What happens to all of that if Trump becomes elected because all that is attached to the Biden administration.

Well true, but a don't forget that the solar tariffs were put on by Trump Originally, most more than fifty percent of all the government spending is actually going to Red States. So I don't think he's going to want to mess with his own voters. Could there be tinkering at the edges?

Well true, but a don't forget that the solar tariffs were put on by Trump Originally, most more than fifty percent of all the government spending is actually going to Red States. So I don't think he's going to want to mess with his own voters. Could there be tinkering at the edges?

Sure?

Sure?

Are there enough votes in the United States Senate to repeal the IIJ Act and the IRA Act not even close?

Are there enough votes in the United States Senate to repeal the IIJ Act and the IRA Act not even close?

So you know, rhetoric, You'll hear lots of rhetoric.

So you know, rhetoric, You'll hear lots of rhetoric.

About repealing the IRA or changing the IRA, and you know stocks will move on that. But at the end of the day, nothing will happen.

About repealing the IRA or changing the IRA, and you know stocks will move on that. But at the end of the day, nothing will happen.

So spending will continue, Yes, tax cuts will get extended, Tariffs on the margin will be there. This to me raises questions that a lot of people have talked about, which is a deficit not going away at the time where you're going to have to see some of the issue ins numbers really start to pick up. You seem to discount that too.

So spending will continue, Yes, tax cuts will get extended, Tariffs on the margin will be there. This to me raises questions that a lot of people have talked about, which is a deficit not going away at the time where you're going to have to see some of the issue ins numbers really start to pick up. You seem to discount that too.

You don't think.

You don't think.

That's one hundred percent not an issue?

That's one hundred percent not an issue?

Oka, You don't think the deficit issues.

Oka, You don't think the deficit issues.

Not inn is shot.

Not inn is shot.

So can I tell you why?

So can I tell you why?

Look, I'm not an economist. I can only say this that the people who have been complaining about the deficit, and I like to call them the OI, the deficit people, Okay.

Look, I'm not an economist. I can only say this that the people who have been complaining about the deficit, and I like to call them the OI, the deficit people, Okay.

Because that's what it sounds, that's what they sound like.

Because that's what it sounds, that's what they sound like.

I literally have been literally been saying O the deficit for forty years. Okay, forty years now. Look, in my business, being too early is the equivalent of being wrong. But in my business, when you're too early, you're a year too early. You're two years too early, You're not forty years too early. When you're forty years too early, you probably should just shut up and keep your mouth shut.

I literally have been literally been saying O the deficit for forty years. Okay, forty years now. Look, in my business, being too early is the equivalent of being wrong. But in my business, when you're too early, you're a year too early. You're two years too early, You're not forty years too early. When you're forty years too early, you probably should just shut up and keep your mouth shut.

But I would say this that the sign that.

But I would say this that the sign that.

The OI the deficit group.

The OI the deficit group.

Will be right is when rates actually go up a lot.

Will be right is when rates actually go up a lot.

Until then, everybody should just keep quiet.

Until then, everybody should just keep quiet.

But how do you know when that's going to happen.

But how do you know when that's going to happen.

It will be on the show and you'll say, wow, long term rates went up fifty basis points in one day, and then it will sound so.

It will be on the show and you'll say, wow, long term rates went up fifty basis points in one day, and then it will sound so.

Natural right after forty fifty years. Until then it's not relevant.

Natural right after forty fifty years. Until then it's not relevant.

Well, but this, to me is a real question because people increasingly are focused on this in the market. People who actually can determine what those rates are can send those rates to up fifty.

Well, but this, to me is a real question because people increasingly are focused on this in the market. People who actually can determine what those rates are can send those rates to up fifty.

Bases treasuries, Well, there are rates going up.

Bases treasuries, Well, there are rates going up.

There was a time when you're talking, so they're doing so you think, are you basically saying that you are long long term rates? Because you think that all of this discussion about OI the deficit is still way too early, and all these people are.

There was a time when you're talking, so they're doing so you think, are you basically saying that you are long long term rates? Because you think that all of this discussion about OI the deficit is still way too early, and all these people are.

Become a meme. Now I hope. So I just literally just made it out. It's really good. So answer the question I lost the train of Okay, Well.

Become a meme. Now I hope. So I just literally just made it out. It's really good. So answer the question I lost the train of Okay, Well.

I'm just saying, you know, if you you know, at what point do you say, Okay, if we think that the discussion of OI the deficit is overblown, go into long treasuries, buy them.

I'm just saying, you know, if you you know, at what point do you say, Okay, if we think that the discussion of OI the deficit is overblown, go into long treasuries, buy them.

Because all the people who are worried about that are going to be proven wrong.

Because all the people who are worried about that are going to be proven wrong.

I mean, look, I'm not really a bond person. I'm more of a stock jockey. So what caused the market to go down? In twenty twenty two? The FED raised rates five hundred basis points. I don't think the Fed's going to be raising rates. Do I think the Fed's going to cut rates? Maybe? I actually do think it doesn't really matter because if they cut, their only cutting a little bit. They're not certainly not cutting five hundred basis points. You know, people like to talk about it on Fed Day as if you know, Moses came down from Sinai with the tablets and let let's examine whether the ten commandments are on there, because we'll look at whether there was Oh, there was a comma removed.

I mean, look, I'm not really a bond person. I'm more of a stock jockey. So what caused the market to go down? In twenty twenty two? The FED raised rates five hundred basis points. I don't think the Fed's going to be raising rates. Do I think the Fed's going to cut rates? Maybe? I actually do think it doesn't really matter because if they cut, their only cutting a little bit. They're not certainly not cutting five hundred basis points. You know, people like to talk about it on Fed Day as if you know, Moses came down from Sinai with the tablets and let let's examine whether the ten commandments are on there, because we'll look at whether there was Oh, there was a comma removed.

That's so significant.

That's so significant.

Let's buy the.

Let's buy the.

S and P.

S and P.

You know miss that.

You know miss that.

He said, bah, wow, what does that mean? So then you say, oh, you know what, it's not relevant.

He said, bah, wow, what does that mean? So then you say, oh, you know what, it's not relevant.

Okay, So you don't necessarily see the potential rate cutting cycle is particularly relevant to your stock picking.

Okay, So you don't necessarily see the potential rate cutting cycle is particularly relevant to your stock picking.

At the same time, there is no aggressive rate cycle coming of cutting that would matter. If the FED is going to cut rates once twice to tinker at the edges.

At the same time, there is no aggressive rate cycle coming of cutting that would matter. If the FED is going to cut rates once twice to tinker at the edges.

We can live five percent, it's the message.

We can live five percent, it's the message.

We seem to be living just fine with it right now. The economy is fine, which is I think is a surprise to everybody.

We seem to be living just fine with it right now. The economy is fine, which is I think is a surprise to everybody.

It rais an important question. I was listening to the podcast you did with Tracy and Joe. It's fantastic, by the way, and if you haven't listened to it at home, you should do odd lots. And you talked about good times is for storytelling bad times, it's for the focus on a bandance sheet. Is this a good time?

It rais an important question. I was listening to the podcast you did with Tracy and Joe. It's fantastic, by the way, and if you haven't listened to it at home, you should do odd lots. And you talked about good times is for storytelling bad times, it's for the focus on a bandance sheet. Is this a good time?

Or it's definitely a good time? And I'll just repeat what I said on that show because I like it. Is it There are three great themes of our time. There's ai, there's everything having to do with infrastructure, and there's crypto, and I believe in the first two and I don't believe in the third.

Or it's definitely a good time? And I'll just repeat what I said on that show because I like it. Is it There are three great themes of our time. There's ai, there's everything having to do with infrastructure, and there's crypto, and I believe in the first two and I don't believe in the third.

Why not the third?

Why not the third?

Look, the crypto is there's two questions with respect to crypto. Is is it a currency? And if it's a currency, should you own it? So let's skip the first part. But that's like that's like, you know, is it a currency is like having an dis question about how many angels dance on the head of a pin.

Look, the crypto is there's two questions with respect to crypto. Is is it a currency? And if it's a currency, should you own it? So let's skip the first part. But that's like that's like, you know, is it a currency is like having an dis question about how many angels dance on the head of a pin.

You know, there's no structure to it.

You know, there's no structure to it.

So okay, So if it's a currency, why should you own it? So let's ask the people who own crypto why do they own it? They all say the same thing. They say, fear currency all the deficit people's definitely gonna be a memere my first meme. Yeah, and it's so it's a hedge against the demise of fear currency. You know, cats and dogs one day will lie together, you'll be in a kay, but at least you'll have your crypto. It's like digital gold. That's that's the thesis. So okay, let's let's take them at their word. So if that's the thesis, then on days where everybody's worried about inflation, they're worried about the deficit, and NASDAK is down.

So okay, So if it's a currency, why should you own it? So let's ask the people who own crypto why do they own it? They all say the same thing. They say, fear currency all the deficit people's definitely gonna be a memere my first meme. Yeah, and it's so it's a hedge against the demise of fear currency. You know, cats and dogs one day will lie together, you'll be in a kay, but at least you'll have your crypto. It's like digital gold. That's that's the thesis. So okay, let's let's take them at their word. So if that's the thesis, then on days where everybody's worried about inflation, they're worried about the deficit, and NASDAK is down.

Three hundred points and interest.

Three hundred points and interest.

Rates are up. Crypto should be up.

Rates are up. Crypto should be up.

And on days where everybody's feeling great and video is up and NASDAK is up and rates are down and nobody cares about inflation, Crypto should be down.

And on days where everybody's feeling great and video is up and NASDAK is up and rates are down and nobody cares about inflation, Crypto should be down.

And does it act that way?

And does it act that way?

It does not.

It does not.

It acts exactly the opposite of its own these It's correlation to NAASAC is like seventy five percent. So to me, it's just another way for people to speculate on speculating. So what do I do that there's no data point of research that says that it's right or that it's wrong.

It acts exactly the opposite of its own these It's correlation to NAASAC is like seventy five percent. So to me, it's just another way for people to speculate on speculating. So what do I do that there's no data point of research that says that it's right or that it's wrong.

So at this point you don't like crypto debt whatever.

So at this point you don't like crypto debt whatever.

I never have, but I'm not short. I don't short it because there's something to short.

I never have, but I'm not short. I don't short it because there's something to short.

How do you get an edge at a time where everyone loves ai and where everyone's scouring for the place.

How do you get an edge at a time where everyone loves ai and where everyone's scouring for the place.

One example of a stock that I think eventually will become a great AI play, which I mean the whole thing about getting an edge I think is overrated. Because most people have all the facts. It's a question of how you interpret the facts. I mean, people think that I had some sort of unbelievable edge about the subprime mortgage sector. I had the same facts that everybody else had, I just looked at them differently. So you know, right now, everybody's focused on Nvidia and a MD and data centers. But one day, and that day is not too far from now, there will be a lot of AI apps that you and I will use, and we're not going to use them at a data center in the cloud. We're going to want to use them on our phone because that we wanted at the head end right here. So at that point there's going to be I think an entire new sales cycle of phones laptops that are going to need to be upgraded to be able to do all this stuff that eventually we will want to do.

One example of a stock that I think eventually will become a great AI play, which I mean the whole thing about getting an edge I think is overrated. Because most people have all the facts. It's a question of how you interpret the facts. I mean, people think that I had some sort of unbelievable edge about the subprime mortgage sector. I had the same facts that everybody else had, I just looked at them differently. So you know, right now, everybody's focused on Nvidia and a MD and data centers. But one day, and that day is not too far from now, there will be a lot of AI apps that you and I will use, and we're not going to use them at a data center in the cloud. We're going to want to use them on our phone because that we wanted at the head end right here. So at that point there's going to be I think an entire new sales cycle of phones laptops that are going to need to be upgraded to be able to do all this stuff that eventually we will want to do.

That's Apple.

That's Apple.

So you're buying Apple aggressively.

So you're buying Apple aggressively.

Well, we've owned it for a long time and we continue to own it now. But it's not it's not actionable at this second because that hasn't been an app. What app I don't know. When it shows up, I'll let you know, but until then, but at that point, the phone I have, the new phone, that phone is not going to be probably it's probably not going to be capable to do some of the apps that you're going to want to do.

Well, we've owned it for a long time and we continue to own it now. But it's not it's not actionable at this second because that hasn't been an app. What app I don't know. When it shows up, I'll let you know, but until then, but at that point, the phone I have, the new phone, that phone is not going to be probably it's probably not going to be capable to do some of the apps that you're going to want to do.

It appears, and that's the direction of travel. I know you've talked about this in the past. I'd love to hear it again. The electricity grid. Yes, the demand on electricity in this country, given where policy is, EVS, where AI is going, how great is it going to be? We in a position to supply it.

It appears, and that's the direction of travel. I know you've talked about this in the past. I'd love to hear it again. The electricity grid. Yes, the demand on electricity in this country, given where policy is, EVS, where AI is going, how great is it going to be? We in a position to supply it.

So the utility budget CAPEX budgets go up every single year they update them. They do like a three year forward look and the that comes out you know January when they report, and the utility budgets three year budgets are up twenty percent. That's an enormous, enormous sum. They're going to go up even more because the U n VIDA MD chips are use a lot more electricity than the CPUs do, so there's even more pressure on the grid. So the cycle of you know, improving the grid, building you know, green type of utility struck is whether it's wind and solar or just upgrading what you have, is going to go on for a very very long time. I've just mentioned one stock that I've talked about before, you know, I mean what.

So the utility budget CAPEX budgets go up every single year they update them. They do like a three year forward look and the that comes out you know January when they report, and the utility budgets three year budgets are up twenty percent. That's an enormous, enormous sum. They're going to go up even more because the U n VIDA MD chips are use a lot more electricity than the CPUs do, so there's even more pressure on the grid. So the cycle of you know, improving the grid, building you know, green type of utility struck is whether it's wind and solar or just upgrading what you have, is going to go on for a very very long time. I've just mentioned one stock that I've talked about before, you know, I mean what.

Do utilities do.

Do utilities do.

They send you electricity and they send you a bill, but when they actually have to do something, they hire somebody to do it. So when you hear that utility A is in creeping, it's increasing its CAPEX budget, and it is building a solar whatever or a gas whatever, nine times out of ten they hire a company called Quanta, which is the largest utility related engineering company in the country. We've owted for a long time. But what I would say, the amusing thing is I'm on the quarterly call.

They send you electricity and they send you a bill, but when they actually have to do something, they hire somebody to do it. So when you hear that utility A is in creeping, it's increasing its CAPEX budget, and it is building a solar whatever or a gas whatever, nine times out of ten they hire a company called Quanta, which is the largest utility related engineering company in the country. We've owted for a long time. But what I would say, the amusing thing is I'm on the quarterly call.

Every quarter, and every quarter the CEO looks happier, and you think I couldn't look happier.

Every quarter, and every quarter the CEO looks happier, and you think I couldn't look happier.

Because he was so happy last quarter, but even happier today because he has so much business he can't do it all.

Because he was so happy last quarter, but even happier today because he has so much business he can't do it all.

That's the winner. Is there a loser? Is there a short for you an active show?

That's the winner. Is there a loser? Is there a short for you an active show?

I'm not talking about shorts, No. I mean I do a little shorting for myself, but that's it.

I'm not talking about shorts, No. I mean I do a little shorting for myself, but that's it.

Could you think of a theme that associated with that where there could be a group of companies that would lose in that world?

Could you think of a theme that associated with that where there could be a group of companies that would lose in that world?

Well, I would say just as an uber theme about companies that I probably would not invest in.

Well, I would say just as an uber theme about companies that I probably would not invest in.

Okay, are you know the stock set did really well.

Okay, are you know the stock set did really well.

Call it twenty eighteen nineteen twenty twenty one. Were the very high revenue growth, negative earnings companies, kind of like venture public venture capital companies. Those got destroyed in twenty twenty two, down literally seventy five to ninety percent. You know they've come back, but you know, when you're down seventy five to ninety percent and then you go up fifty percent, it doesn't look so good on a chart. I would just avoid those companies until it becomes very clear that they actually have real business models where they can actually make money.

Call it twenty eighteen nineteen twenty twenty one. Were the very high revenue growth, negative earnings companies, kind of like venture public venture capital companies. Those got destroyed in twenty twenty two, down literally seventy five to ninety percent. You know they've come back, but you know, when you're down seventy five to ninety percent and then you go up fifty percent, it doesn't look so good on a chart. I would just avoid those companies until it becomes very clear that they actually have real business models where they can actually make money.

In just a moment, we'll catch up with our alyst of Bloomberg Intelligence on the World Disney company. That stock is down by about five percent this morning. Can we squeeze in a question on Marvel? Yes we can, which you have some expertise? I do this co say she could go a whole lot longer than maybe it.

In just a moment, we'll catch up with our alyst of Bloomberg Intelligence on the World Disney company. That stock is down by about five percent this morning. Can we squeeze in a question on Marvel? Yes we can, which you have some expertise? I do this co say she could go a whole lot longer than maybe it.

Could go for hours? What do you a background? I'm going to brag a little bit.

Could go for hours? What do you a background? I'm going to brag a little bit.

I own one of the largest digital comic book collections on planet Earth. It's eleven thousand comics on my iPad and I've read all eleven thousand, So I could write a dissertation on doctor Strange that would go for two hundred pages.

I own one of the largest digital comic book collections on planet Earth. It's eleven thousand comics on my iPad and I've read all eleven thousand, So I could write a dissertation on doctor Strange that would go for two hundred pages.

Read it, Yes, you probably would be very interesting.

Read it, Yes, you probably would be very interesting.

Maybe they should make it into So the problem.

Maybe they should make it into So the problem.

With Marvel movies to me is that.

With Marvel movies to me is that.

They had a great story and it ended and Iron Man is dead, Captain America is ninety and Thor is and this.

They had a great story and it ended and Iron Man is dead, Captain America is ninety and Thor is and this.

Really upsets me. And I really am serious about this.

Really upsets me. And I really am serious about this.

They made Thor into a comedic comedic buffoon, and it was always one of my favorite comics. So Thor being a comedic buffoon I find extremely upsetting. This is Hamsworth, yes, and there's no story anymore.

They made Thor into a comedic comedic buffoon, and it was always one of my favorite comics. So Thor being a comedic buffoon I find extremely upsetting. This is Hamsworth, yes, and there's no story anymore.

They they don't.

They they don't.

They had a story where they had all these different different tangents, but it all wove down into one eventual story and then it was over and they had been unable to find a new story. And the problem is that their three gate characters are gone. So even if they had a story, we would want to go watch. I would just say with final say this as an example, the last Guardians of the Galaxy movie was unwatchable.

They had a story where they had all these different different tangents, but it all wove down into one eventual story and then it was over and they had been unable to find a new story. And the problem is that their three gate characters are gone. So even if they had a story, we would want to go watch. I would just say with final say this as an example, the last Guardians of the Galaxy movie was unwatchable.

Steve Weisman with This World Disney Review. Steve Weisman of Newberger Berment, Stay this is great, It's going to see it. I'm pleased to say that. Joining us with his view on things is Mark Sandy of Moody's Analytics. Mark, it's been too long, sir, Thanks very much for catching up with this this morning. Why is the concern in your words, around inflation being above target? Why is that concern misplaced?

Steve Weisman with This World Disney Review. Steve Weisman of Newberger Berment, Stay this is great, It's going to see it. I'm pleased to say that. Joining us with his view on things is Mark Sandy of Moody's Analytics. Mark, it's been too long, sir, Thanks very much for catching up with this this morning. Why is the concern in your words, around inflation being above target? Why is that concern misplaced?

Well, I think inflation's at target appropriately measured at least underlying inflation.

Well, I think inflation's at target appropriately measured at least underlying inflation.

You know, I think if.

You know, I think if.

It's very problematic measuring the cost of housing services, particularly owner's equivalent rent, and if you look at harmonized inflation exclude OEER, we're there, and we've been there for quite some time, so, you know, I think the FED should be focused on the underlying rate of inflation, trying to abstract from the vagaries of the data, the ups and downs and all around. That's why they look at core excluding food and energy. But at this point in time, i'd also exclude OEER, and if you do that, we're there, and we've been again.

It's very problematic measuring the cost of housing services, particularly owner's equivalent rent, and if you look at harmonized inflation exclude OEER, we're there, and we've been there for quite some time, so, you know, I think the FED should be focused on the underlying rate of inflation, trying to abstract from the vagaries of the data, the ups and downs and all around. That's why they look at core excluding food and energy. But at this point in time, i'd also exclude OEER, and if you do that, we're there, and we've been again.

We've been there for you know, six nine months.

We've been there for you know, six nine months.

So to me, it feels like the FED has achieved its goal. It's mandated. We're at full employments of four percent unemployment, and we're at we're at target on inflation and inflation expectations are nailed down to that two percent target. So I think, to me, all the everything's pointing brain for FED, for the FED to start cutting rates here.

So to me, it feels like the FED has achieved its goal. It's mandated. We're at full employments of four percent unemployment, and we're at we're at target on inflation and inflation expectations are nailed down to that two percent target. So I think, to me, all the everything's pointing brain for FED, for the FED to start cutting rates here.

Why do you think they don't talk about it in the same way.

Why do you think they don't talk about it in the same way.

I think it's a matter of credibility. I think they said, look, we're getting this is this is our number. We're looking at core consumer expenditure to flatter. That's our target. That's the benchmark we're using for underlying inflation. We said we're going to get to two percent, and we're going to get there because they want to ensure that they are.

I think it's a matter of credibility. I think they said, look, we're getting this is this is our number. We're looking at core consumer expenditure to flatter. That's our target. That's the benchmark we're using for underlying inflation. We said we're going to get to two percent, and we're going to get there because they want to ensure that they are.

Credible going forward. I get it.

Credible going forward. I get it.

I understand that, and that's why I don't think they're going to move until later in the year, probably around September. That seems like the most logical point where they'd start cutting rates. But you know they are running a risk by doing so.

I understand that, and that's why I don't think they're going to move until later in the year, probably around September. That seems like the most logical point where they'd start cutting rates. But you know they are running a risk by doing so.

I mean, it keeps.

I mean, it keeps.

I do think the federal funds rate target at five and a half percent is high, and it's putting a lot of pressure on the banking system, financial system in broader economy, and they run the risk of breaking something.

I do think the federal funds rate target at five and a half percent is high, and it's putting a lot of pressure on the banking system, financial system in broader economy, and they run the risk of breaking something.

So they're taking a chance here. But I think at the end of the day.

So they're taking a chance here. But I think at the end of the day.

They want to make sure that they you know, they did what they're saying, they said they're going to do. They're going to hit two percent on the core PCEE to flatter Mark.

They want to make sure that they you know, they did what they're saying, they said they're going to do. They're going to hit two percent on the core PCEE to flatter Mark.

If Tom Mark herey, he would say, let's rip up the script because I'm getting a lot of hate mail from people who might fall into the OI the deficit camp. And we did just have Steve iispin on and he basically said, all the concern, the gloom and doom about the US deficit is what we've heard for the past thirty or forty years of OI the deficit at everyone's kitchen table, and it won't really matter, doesn't matter for now economically.

If Tom Mark herey, he would say, let's rip up the script because I'm getting a lot of hate mail from people who might fall into the OI the deficit camp. And we did just have Steve iispin on and he basically said, all the concern, the gloom and doom about the US deficit is what we've heard for the past thirty or forty years of OI the deficit at everyone's kitchen table, and it won't really matter, doesn't matter for now economically.

Do you agree or do.

Do you agree or do.

You think that the deficit is actually an economic concern going forward for this government at a time where we could be heading into potentially a less positive growth scenario than what we've had.

You think that the deficit is actually an economic concern going forward for this government at a time where we could be heading into potentially a less positive growth scenario than what we've had.

Yeah, I think it matters. The deficits in debt matter. I mean when the reason what happened in the past, we said OI because all the you know, if you if we didn't change something, then we would have a problem.

Yeah, I think it matters. The deficits in debt matter. I mean when the reason what happened in the past, we said OI because all the you know, if you if we didn't change something, then we would have a problem.

But we change something.

But we change something.

You know, if you go back and look at previous historical points where the deficit that we're becoming a realisue like the early mid nineteen nineties would be good, good, good case study. We responded collectively, we came together, and we did what was necessary in terms of taxes and in terms of spending to rein it in and put things on a more sustainable path. Here we are today. You know, right now, I don't think deficits in debt matter. But look look at the forecast, and I think the forecasts are you know, pretty reasonable. Take the Congressional Budget Office forecast, the by person the non person group that does the budgeting, and if we don't change something, that that to GDP goes from one hundred percent. And by the way, that's a lot higher than it was twenty twenty five years ago.

You know, if you go back and look at previous historical points where the deficit that we're becoming a realisue like the early mid nineteen nineties would be good, good, good case study. We responded collectively, we came together, and we did what was necessary in terms of taxes and in terms of spending to rein it in and put things on a more sustainable path. Here we are today. You know, right now, I don't think deficits in debt matter. But look look at the forecast, and I think the forecasts are you know, pretty reasonable. Take the Congressional Budget Office forecast, the by person the non person group that does the budgeting, and if we don't change something, that that to GDP goes from one hundred percent. And by the way, that's a lot higher than it was twenty twenty five years ago.

Twenty twenty five years ago was about half that.

Twenty twenty five years ago was about half that.

So we're a one hundred percent to GDP and all the trend lines look pretty bad. So we should say, OI, we got to change this, and hopefully we come together and change it. But of course, you know, in the fracture of politics, local environment that we live in, it just feels like that's going to be a pretty heavy lift, which.

So we're a one hundred percent to GDP and all the trend lines look pretty bad. So we should say, OI, we got to change this, and hopefully we come together and change it. But of course, you know, in the fracture of politics, local environment that we live in, it just feels like that's going to be a pretty heavy lift, which.

Raises a question, at what point it becomes reality. People have worried about it for a long time, but it's not going to be reality until yields actually materially shift higher in a way that's putted for the US government, And that speaks to some of these concerns. Do you see that on the horizon. Do you have a sense of what that rate would be where it becomes unduly punitive to the US government in terms of interest expenses, and where that takes money away.

Raises a question, at what point it becomes reality. People have worried about it for a long time, but it's not going to be reality until yields actually materially shift higher in a way that's putted for the US government, And that speaks to some of these concerns. Do you see that on the horizon. Do you have a sense of what that rate would be where it becomes unduly punitive to the US government in terms of interest expenses, and where that takes money away.

From Yeah, we're already it's getting a lot uncomfortable, right.

From Yeah, we're already it's getting a lot uncomfortable, right.

I mean, if you look at interest payments, the federal government's interest payments, it's I think that we're truly dollars now anally, and that's I think we just passed the amount we spend on defense, and that's the first time I think that's ever happened, right, I mean, that feels weird. I mean, we're spending more on interest payments on our debt than our own national defense. So I think, you know, pressure is starting rice. But you know, here's the thing. I don't think the deficits and debt are a clip event. It's not like you come up to a clip and you go over. It's a corrosive on the economy, and as debt levels continue to rise, interest rates will continue to rise. A lot of empirical work trying to understand what the relationship is. But here's a good rule of thumb. For every percentage point increasing the debt to GDP ratio, so you go from one hundred percent that to GDP to say one hundred and ten percent, that adds a basis point. So you go one hundred one hundred ten percent, that adds ten basis points to that ten year treasury yield.

I mean, if you look at interest payments, the federal government's interest payments, it's I think that we're truly dollars now anally, and that's I think we just passed the amount we spend on defense, and that's the first time I think that's ever happened, right, I mean, that feels weird. I mean, we're spending more on interest payments on our debt than our own national defense. So I think, you know, pressure is starting rice. But you know, here's the thing. I don't think the deficits and debt are a clip event. It's not like you come up to a clip and you go over. It's a corrosive on the economy, and as debt levels continue to rise, interest rates will continue to rise. A lot of empirical work trying to understand what the relationship is. But here's a good rule of thumb. For every percentage point increasing the debt to GDP ratio, so you go from one hundred percent that to GDP to say one hundred and ten percent, that adds a basis point. So you go one hundred one hundred ten percent, that adds ten basis points to that ten year treasury yield.

You know, it's not perfectly right, but that's roughly right. And the other thing I'd say is.

You know, it's not perfectly right, but that's roughly right. And the other thing I'd say is.

Jargony is nonlinear, meaning going from you know, one hundred percent that to gb to one ten is one thing. Going from one fifty to one sixty that's a totally different thing. So you know, I don't think, at least for the foreseeable future, we've got to clip ahead of us.

Jargony is nonlinear, meaning going from you know, one hundred percent that to gb to one ten is one thing. Going from one fifty to one sixty that's a totally different thing. So you know, I don't think, at least for the foreseeable future, we've got to clip ahead of us.

But you know, this is a corrosive on our economy's ability to grow.

But you know, this is a corrosive on our economy's ability to grow.

Mark, I want to ask you about the labor market because you mentioned how we are running a tight labor market. The Conference Board recently came out and consumers were less concerned actually about inflation. They were concerned about cracks in the labor market. Is it concerning to you when you look through this data? I mean the last survey, the response rate was fifty four point nine percent, lowess since two thousand and two.

Mark, I want to ask you about the labor market because you mentioned how we are running a tight labor market. The Conference Board recently came out and consumers were less concerned actually about inflation. They were concerned about cracks in the labor market. Is it concerning to you when you look through this data? I mean the last survey, the response rate was fifty four point nine percent, lowess since two thousand and two.

You mean the survey rate survey you're asking about.

You mean the survey rate survey you're asking about.

Yeah, do we have no correct read on this data?

Yeah, do we have no correct read on this data?

Yeah?

Yeah?

No, it bothers me. Yeah, and it's getting worse and worse.

No, it bothers me. Yeah, and it's getting worse and worse.

And you know, if you go look at the other I think the Jolt survey, the Job Opening Labor Turner survey, we're down to like a third of respondents, you know, getting back. So absolutely, and this goes to it's a broader point. You know, all the surveys that we look at and all the polls that we're looking at, they're increasingly less reliable. So yeah, I think this is a this is a big problem and why al data in third party data sources are becoming more important because you know, we can't rely on the surveys. They're just much more particularly month to month. And this gets to the you know, the inflation persistence in the first quarter. You know that that's just a bunch of in my view, technical factors or usual effects and perhaps survey issues, seasonal adjustment issues. So it just you know, complicates using data the way we have been using data month to month to set for example, monetary policy.

And you know, if you go look at the other I think the Jolt survey, the Job Opening Labor Turner survey, we're down to like a third of respondents, you know, getting back. So absolutely, and this goes to it's a broader point. You know, all the surveys that we look at and all the polls that we're looking at, they're increasingly less reliable. So yeah, I think this is a this is a big problem and why al data in third party data sources are becoming more important because you know, we can't rely on the surveys. They're just much more particularly month to month. And this gets to the you know, the inflation persistence in the first quarter. You know that that's just a bunch of in my view, technical factors or usual effects and perhaps survey issues, seasonal adjustment issues. So it just you know, complicates using data the way we have been using data month to month to set for example, monetary policy.

Mark, we'd love you for you on an immigration as well, this has been a big theme over the last few months and some people, in fact, quite a few guests on this program basically saying ways have stayed low even with these really decent, tremendous payrolls figures because of immigration. Mark, do you see it in quite the same way?

Mark, we'd love you for you on an immigration as well, this has been a big theme over the last few months and some people, in fact, quite a few guests on this program basically saying ways have stayed low even with these really decent, tremendous payrolls figures because of immigration. Mark, do you see it in quite the same way?

I do?

I do?

I do.

I do.

I mean, there's obviously the immigration and what's going on into southern border is a real challenge for a lot of communities across the country. But the one clear benefit, particularly in this point in time when the liver market it's very tight, business been struggling to find and.

I mean, there's obviously the immigration and what's going on into southern border is a real challenge for a lot of communities across the country. But the one clear benefit, particularly in this point in time when the liver market it's very tight, business been struggling to find and.

Retain workers is the surge and immigration.

Retain workers is the surge and immigration.

And you know, there's a real clear link between immigration where those immigrants are going if you look across industries like leisure and hospitality or retailing and wage growth in those industries. So I think we can connect those dots and I think this has been very important. So it allows this immigration allows the economy to grow more quickly and at the same time take pressure off of inflation.

And you know, there's a real clear link between immigration where those immigrants are going if you look across industries like leisure and hospitality or retailing and wage growth in those industries. So I think we can connect those dots and I think this has been very important. So it allows this immigration allows the economy to grow more quickly and at the same time take pressure off of inflation.

So I think the particularly fortuitous and really important.

So I think the particularly fortuitous and really important.

And you know, if there's one thing we can do to address our long term fiscal problems, and it would be to have a rational immigration policy, because if we can have more immigrants and you know, the right kind of immigrants, it's like a really power economic growth, then that's going to solve a lot of problems, including our long term fiscal problems. And we won't say oi, we won't have to say oi, we've got to cut spending and raised taxes. We got a stronger economy, it's generating those tax revenues. Then we need to finance our government.

And you know, if there's one thing we can do to address our long term fiscal problems, and it would be to have a rational immigration policy, because if we can have more immigrants and you know, the right kind of immigrants, it's like a really power economic growth, then that's going to solve a lot of problems, including our long term fiscal problems. And we won't say oi, we won't have to say oi, we've got to cut spending and raised taxes. We got a stronger economy, it's generating those tax revenues. Then we need to finance our government.

I like how that's catching on. Macat. You just want to finish on this question. It's an utum one if it is important for what's happened in wages in very specific sectors and industries. What happens if bordering counters dropped, which they have based on the information we got yesterday, they've dropped by quite a bit. What happens next.

I like how that's catching on. Macat. You just want to finish on this question. It's an utum one if it is important for what's happened in wages in very specific sectors and industries. What happens if bordering counters dropped, which they have based on the information we got yesterday, they've dropped by quite a bit. What happens next.

Well, the lever mark is going to tighten up and it's put pressure on wages unless we see continued moderation and demand, and then I think we will. You know, I think that will happen here because interest rates are high. At five and a half percent fund rate target, I do believe is restrictive, and it becomes more restrictive over time. I mean, one reason why it hasn't bit really hard so far is that households and businesses did a really good job locking in the previously record low interest rates. But that only works for you know period of time is more households and businesses face higher interest rates, you know, they're going to start to pull back. So I think the economy will slow and you know, even with less immigration, I think the FED will be in a position to cut interest rates.

Well, the lever mark is going to tighten up and it's put pressure on wages unless we see continued moderation and demand, and then I think we will. You know, I think that will happen here because interest rates are high. At five and a half percent fund rate target, I do believe is restrictive, and it becomes more restrictive over time. I mean, one reason why it hasn't bit really hard so far is that households and businesses did a really good job locking in the previously record low interest rates. But that only works for you know period of time is more households and businesses face higher interest rates, you know, they're going to start to pull back. So I think the economy will slow and you know, even with less immigration, I think the FED will be in a position to cut interest rates.

Your verse and Mank, this is interesting, always good to hear from you, MANK, Sandy, that of Moody's analytics always catching on, you know, it's that good.

Your verse and Mank, this is interesting, always good to hear from you, MANK, Sandy, that of Moody's analytics always catching on, you know, it's that good.

Oi.

Oi.

Yeah, we don't have to say oi anymore, according to him, ours, Andy.

Yeah, we don't have to say oi anymore, according to him, ours, Andy.

Do you wonder for to catch up with you once again? I want to begin, if we may, talking about the theme part business and the consumer price tolerance that you see. Do you still have that pricing power at a time where many companies are reporting that yes, there is upper rent stability, but maybe some low rent fragility around the consumer.

Do you wonder for to catch up with you once again? I want to begin, if we may, talking about the theme part business and the consumer price tolerance that you see. Do you still have that pricing power at a time where many companies are reporting that yes, there is upper rent stability, but maybe some low rent fragility around the consumer.

Yeah, good morning, great to be with you all. Yeah, I actually believe we do. If we sort of zoom out a little bit. The quarter was really a strong one for US, seventeen percent of I growth, thirty percent EPs growth.

Yeah, good morning, great to be with you all. Yeah, I actually believe we do. If we sort of zoom out a little bit. The quarter was really a strong one for US, seventeen percent of I growth, thirty percent EPs growth.

That's what led us to raise guidance.

That's what led us to raise guidance.

To twenty five percent EPs growth for the full year, which is obviously quite strong.

To twenty five percent EPs growth for the full year, which is obviously quite strong.

Two big stories I think here. Number one, you were just.

Two big stories I think here. Number one, you were just.

Talking about our experiences business was up ten percent on a revenue basis, twelve percent on an AY basis, and the parks business was actually up thirteen percent on OI, So we do feel.

Talking about our experiences business was up ten percent on a revenue basis, twelve percent on an AY basis, and the parks business was actually up thirteen percent on OI, So we do feel.

Good about that.

Good about that.

Obviously, I watch other stocks report and have seen that the value consumer is really struggling a bit and making choices right now.

Obviously, I watch other stocks report and have seen that the value consumer is really struggling a bit and making choices right now.

We're not really seeing as.

We're not really seeing as.

Much of that in our portfolio of products. The other positive for US is obviously the streaming service. Last year, we lost about six hundred million dollars. This year we're about break even and we saw twelve percent revenue growth, So we're encouraged by the progress we've made in that business in a relatively short period of time.

Much of that in our portfolio of products. The other positive for US is obviously the streaming service. Last year, we lost about six hundred million dollars. This year we're about break even and we saw twelve percent revenue growth, So we're encouraged by the progress we've made in that business in a relatively short period of time.

Here, you said that you're not seeing that kind of price sensitivity, how much could you increase prices in from here?

Here, you said that you're not seeing that kind of price sensitivity, how much could you increase prices in from here?

It's a great question.

It's a great question.

We took prices up a little bit in the beginning of this year and didn't want to see much of an impact. So as to what the future brings, We're obviously very judicious with the way that we price. We want to provide access to as many guests as we possibly can, but we do believe that the great experiences we provide people are willing to pay for it.

We took prices up a little bit in the beginning of this year and didn't want to see much of an impact. So as to what the future brings, We're obviously very judicious with the way that we price. We want to provide access to as many guests as we possibly can, but we do believe that the great experiences we provide people are willing to pay for it.

Here, let's talk about the streaming business just a little bit more and more specifically, if we can Hulu. I want to get into Hulu and the future of that business. Can we just start with something like the likes of Taranaga and Showgun on Hulu. How impressive that content actually was. When you have something like that a big hit, How does it translate in some gains for the company? How does it fall to the bottom line?

Here, let's talk about the streaming business just a little bit more and more specifically, if we can Hulu. I want to get into Hulu and the future of that business. Can we just start with something like the likes of Taranaga and Showgun on Hulu. How impressive that content actually was. When you have something like that a big hit, How does it translate in some gains for the company? How does it fall to the bottom line?

Yeah, it really does create two things.

Yeah, it really does create two things.

Number One, it brings new subscribers in right, we call them for subscribers. Those types of jows do pull people into the service, and then once they're into the service, they realize just the great amount of content that's out there, so that those shows also tend to increase stickiness over time. So from both perspectives, they're truly additive. And the other piece of it that's terrific I think is it really does integrate well with the linear business as well. We use these different windows to choose when to show things, whether it's on FX or whether it's on ABC, and then into the streaming service. So we were actually getting quite good at reaching different audiences, streaming being a bit of a younger audience, the linear business being a bit of.

Number One, it brings new subscribers in right, we call them for subscribers. Those types of jows do pull people into the service, and then once they're into the service, they realize just the great amount of content that's out there, so that those shows also tend to increase stickiness over time. So from both perspectives, they're truly additive. And the other piece of it that's terrific I think is it really does integrate well with the linear business as well. We use these different windows to choose when to show things, whether it's on FX or whether it's on ABC, and then into the streaming service. So we were actually getting quite good at reaching different audiences, streaming being a bit of a younger audience, the linear business being a bit of.

A more mature audience.

A more mature audience.

It gives us the ability to reach the most people, which is obviously terrific from an advertising and a subscriber process.

It gives us the ability to reach the most people, which is obviously terrific from an advertising and a subscriber process.

That sets up brilliant the conversation about the future of Hulu, Hugh, So let's talk about it. A report yesterday from Reuter's that JP Morgan has valued the company for you close to twenty seven point five billion Morgan Stanley value when wholy for Comcast at more than forty billion? Is that an accurate assessment of where things are? They also reported that we're looking for an independent valuation now to try and close the gap. Could you just update us and tell us if that's an accurate representation of the current state of affairs.

That sets up brilliant the conversation about the future of Hulu, Hugh, So let's talk about it. A report yesterday from Reuter's that JP Morgan has valued the company for you close to twenty seven point five billion Morgan Stanley value when wholy for Comcast at more than forty billion? Is that an accurate assessment of where things are? They also reported that we're looking for an independent valuation now to try and close the gap. Could you just update us and tell us if that's an accurate representation of the current state of affairs.

Yeah, so we have a well defined process in terms of how this is going to play its way out. Beyond that, I'm not going to comment on that right now. One of the sciplines I have, as I talk about M and A, when it's done, not before it's done.

Yeah, so we have a well defined process in terms of how this is going to play its way out. Beyond that, I'm not going to comment on that right now. One of the sciplines I have, as I talk about M and A, when it's done, not before it's done.

Too early to talk about a timeline, Hugh, A little bit too early. So here, let's talk about going forward from here where the big opportunities are for the streaming business.

Too early to talk about a timeline, Hugh, A little bit too early. So here, let's talk about going forward from here where the big opportunities are for the streaming business.

OK.

OK.

I think there are a multitude of opportunities. Number one great programming, and that's an advantage that we have in our Disney portfolio because we create so much of our own IP. Number two is driving engagement, and bundling clearly does that, whether it's with sports, whether it's down in Latin America, we're actually putting sports, General Entertainment and Disney Plus together, or the tile that we added to the Hulu tile on Disney Plus. So that bundling is clearly an opportunity. Third is password sharing. That's an opportunity for us. We think it's pretty substantial and it's going to drive growth. Fourth is distribution cost. We do think by going direct to consumer, we can actually both build a stronger relationship with the consumer and also reduce our costs. And then fifth is technology clearly an opportunity in terms of recommendation engines. As we put all of that together, we're pretty well convinced that this is going to be a great growth business for the Disney Company for a.

I think there are a multitude of opportunities. Number one great programming, and that's an advantage that we have in our Disney portfolio because we create so much of our own IP. Number two is driving engagement, and bundling clearly does that, whether it's with sports, whether it's down in Latin America, we're actually putting sports, General Entertainment and Disney Plus together, or the tile that we added to the Hulu tile on Disney Plus. So that bundling is clearly an opportunity. Third is password sharing. That's an opportunity for us. We think it's pretty substantial and it's going to drive growth. Fourth is distribution cost. We do think by going direct to consumer, we can actually both build a stronger relationship with the consumer and also reduce our costs. And then fifth is technology clearly an opportunity in terms of recommendation engines. As we put all of that together, we're pretty well convinced that this is going to be a great growth business for the Disney Company for a.

Long long time.

Long long time.

Here you mentioned a number of things there, including password sharing. How much do you expect all of those initiatives you just mentioned to save money? What's the cost benefit of all of that?

Here you mentioned a number of things there, including password sharing. How much do you expect all of those initiatives you just mentioned to save money? What's the cost benefit of all of that?

Yeah, I mean things like password sharing obviously drive additional revenue growth. Things like distribution costs do save money for you. In addition to that, things like recommendation engines and direct to consumer marketing tends to reduce churn, which allows you to reduce marketing costs. So there really is some synergy between the revenue benefits and the cost benefits.

Yeah, I mean things like password sharing obviously drive additional revenue growth. Things like distribution costs do save money for you. In addition to that, things like recommendation engines and direct to consumer marketing tends to reduce churn, which allows you to reduce marketing costs. So there really is some synergy between the revenue benefits and the cost benefits.

But overall, we're looking.

But overall, we're looking.

To make this into a great business, not just a growth business, but a great margin business for.

To make this into a great business, not just a growth business, but a great margin business for.

The company as well, Hugh.

The company as well, Hugh.

Over the past six months, we've been talking about the cost cutting operations in Disney. Have we finished some of the shrinking, have we finished the pairing back and are you back on some sort of growth trajectory.

Over the past six months, we've been talking about the cost cutting operations in Disney. Have we finished some of the shrinking, have we finished the pairing back and are you back on some sort of growth trajectory.

We are definitely back of growth trajectory. That said, we're always going to be looking hard at our cost structure, in particular looking to reduce costs where perhaps they add less value than they used to and redeploy some of that money back into the business so that we can actually grow the balance of the business. So I think that's a never ending exercise of looking for ways to be more efficient as a company so that you can invest in your future.

We are definitely back of growth trajectory. That said, we're always going to be looking hard at our cost structure, in particular looking to reduce costs where perhaps they add less value than they used to and redeploy some of that money back into the business so that we can actually grow the balance of the business. So I think that's a never ending exercise of looking for ways to be more efficient as a company so that you can invest in your future.

When you talk about growing, where is that growth focused on?

When you talk about growing, where is that growth focused on?

Geographically?

Geographically?

We know that in the US you've got a very strong parks business. In Europe there also is a parks presence. But in Asia, in particular in China, that has been a growth area. Is it still How much can that be a bright spot at a time of increasing geopolitical tensions?

We know that in the US you've got a very strong parks business. In Europe there also is a parks presence. But in Asia, in particular in China, that has been a growth area. Is it still How much can that be a bright spot at a time of increasing geopolitical tensions?

Yeah, I do think not just China, but all of Asia represent growth opportunities for us, both in terms of the streaming service and select markets as well as in terms of the parks and cruises business. So we do see good growth opportunities there. Europe and Latin America continue to be good growth opportunities and make no mistake North America.

Yeah, I do think not just China, but all of Asia represent growth opportunities for us, both in terms of the streaming service and select markets as well as in terms of the parks and cruises business. So we do see good growth opportunities there. Europe and Latin America continue to be good growth opportunities and make no mistake North America.

We're not done growing yet.

We're not done growing yet.

We still think there are terrific opportunities here for us right at home.

We still think there are terrific opportunities here for us right at home.

When it comes to Asia Pacific, is it domestic demand within those countries, specifically China, or is it tourists in the region.

When it comes to Asia Pacific, is it domestic demand within those countries, specifically China, or is it tourists in the region.

Combination of both. I wouldn't tie it to one or the other. I think it's a combination of both.

Combination of both. I wouldn't tie it to one or the other. I think it's a combination of both.

And when you look at China, to Lisa's point, you know, we're going into a very heated political election coming up in November, very hot rhetoric regarding China. Is it becoming more challenging to deal with authorities in Beijing and business on the ground given the increased geopolitical tensions.

And when you look at China, to Lisa's point, you know, we're going into a very heated political election coming up in November, very hot rhetoric regarding China. Is it becoming more challenging to deal with authorities in Beijing and business on the ground given the increased geopolitical tensions.

It has not been for us.

It has not been for us.

You know, one of the benefits of what we do for a living is, you know, we make people smile. We bring them happiness, right, we bring them the most magical place on earth. Candidly, the government's investing in infrastructure to make it easier for guests to get to and from the park. We're continuing to invest in that park in order to drive growth.

You know, one of the benefits of what we do for a living is, you know, we make people smile. We bring them happiness, right, we bring them the most magical place on earth. Candidly, the government's investing in infrastructure to make it easier for guests to get to and from the park. We're continuing to invest in that park in order to drive growth.

It's doing better now than it ever has.

It's doing better now than it ever has.

So we're the fortunate beneficiaries of bringing people joy in a world that needs it.

So we're the fortunate beneficiaries of bringing people joy in a world that needs it.

Here, we've got to talk about the NBA deal as well. Can you talk to us about that? And it is going to be much high up. How do you make money from something like that? I just want to understand the numbers business of all of this.

Here, we've got to talk about the NBA deal as well. Can you talk to us about that? And it is going to be much high up. How do you make money from something like that? I just want to understand the numbers business of all of this.

Yeah, So the NBA, we're in the middle of discussions right now. So again I don't comment on specific deals until they're done.

Yeah, So the NBA, we're in the middle of discussions right now. So again I don't comment on specific deals until they're done.

What I would tell you is two things.