What we need right now a little macro economic analysis that's what
we need right now from American public media this is market flat
“in Los Angeles I'm Kai Rizdoll it is Wednesday today this one is the 8th of April”
it is always to have you along everybody well here we are the day after a moment
despite all of the continuing unknowns of both the known and unknown variety to perhaps take stock of where things stand to do that we've gotten Muhammad L. Arianna on the phone he's a professor at the Wharton School at the University of Pennsylvania also the chief economic advisor at Alleyons professor L. Arianna welcome back to the program sir thanks for having me on the answer to this
question we'll obviously be different than it would have been yesterday at this time but I I wonder given the events of the day the week the month your short-term medium term thoughts on the global economy wow that's a really difficult question because there's so much uncertainty about the war but let me
“think in terms of the four phases and we are now if the US and face two and face”
three elsewhere while we started the year well we got a massive shock in the shape of the war we had the first phase which is done and we are living with that higher energy prices than what have been otherwise and higher interest rates and what have been otherwise we then got phase two which is more inflation in the pipeline that's where the US is now as a larger
economy parts of Asia unfortunately have moved to phase three which is not only you get phase one and phase two but you also get demand destruction so you start worrying about economic growth and of course phase four which I hope
never get to would be financial instability undermining the economy so we are
looking at a world in which the US art performs the rest of the world and parts
“of the west of the world Asia in particular parts of the of Europe with”
recession a word here about the United States doing better than most of the rest of the world you wrote the other day a piece to headline of which was America should be aware of economic hubris and setting aside for a second the fact that hubris is basically American government policy now in virtually all areas what do you mean by that so Americans are proud and rightly so that we are
energy independent as such we don't have to worry about physical supplies but this sort of shock guy hits virtually every single country so the warning I was trying to send out is don't think that relative matters as much as absolute yes the US will outperform other countries but in absolute terms there will be high inflation there will be a bigger for the bit of the crisis and some
segments of the population are going to feel income insecure so let's not
celebrate too much our relative our performance because ultimately it's the
absolute performance that matters to people especially people in the low income segments of the household step back for a minute then and talk to me about America's place in this global economy because it certainly seems self-evident and there are those who will disagree when they hear this but America's place in the global economy has been intentionally lessened by the Trump administration
through its policies tariff specifically but also at least incidentally by this war and how it's been conducted and what it has done to the global economy so so what are we looking at now in a global economy where the American position is lessened at best the US is still at the core of the system while that role is being eroded it started in 2008 when the global financial crisis are which
native into the US it has continued with the weaponization of tariffs and investment sanctions and this war is eroding it further now the good news for us is there's no one to replace us you cannot replace something with nothing Europe can't step in China can't step in however what's happening is that countries are slowly building little pipes guy around the core which is the US and that
means that if this continues the US ability to inform an influence outcomes is going to come down the US ability to take advantage of which reserve currency status and our deepest financial system in the world that advantage will come
Down and the US will be worse often than would have been otherwise that seems
bleak it take the good news is there's a long one way because there's no one here
“to step in but you have to be careful and I didn't even mention that our fiscal”
position is bad and getting worse we're now looking at a fiscal deficit as high as 7% or GDP which is very high when you unemployment rate is as low as 4.3% how long is their own way sir and look I ask sorry I ask this not to be a downer but it took us winning a world war helping to win and 80 years of crafting policies that greatly favor the United States and now we have here in the
space of is you're just pointed out something less than 20 years started to tear it all apart yeah and answer the questions hard because these dynamics are non-linear it takes a lot longer than you expect to begin with and then it happens a lot faster you know we used to be respected for two principles one is what was called the washroom consensus it was very simple if you want to
“prosper follow America liberalize the regulate be physically responsible and”
respect the independence of your central bank we no longer lead on the washroom consensus we also let the globalization process and now we are the leader in undermining the notion of globalization at best we will end up with some type of managed globalization light so we no longer have these unifying themes that the US used to lead and they were good for most countries but they
were certainly good for the US. Mohamed Alarian is a professor at the Wharton School at the University of Pennsylvania he's also the chief economic advisor at Alions. Dr. Alarian thanks for your
time sir it's always good to have you. Please call me Mohamed thank you.
Tenuous though that ceasefire seems to be traders just didn't care we'll have the details when we do the numbers. Not that we need more items economic to keep our eye on right now but we've wandered into earnings season for the last quarter January to March which was oh how should I put it interesting also challenging for corporate America
Delta Airlines reported this morning a bell weather of the travel industry and also a company that is smack in the crosshairs of all of the wars disruptions soaring jet fuel prices consumers jittery about to a political conflict and that shut down induced hours long lines thing we went through at TSA. How then did Delta do? Well pretty darn well actually Marketplace Mitchell
Harmony explains what's going on there. Delta's certainly not immune to developments in the straight of hormones and soaring jet fuel prices says
analysts Nicholas Owens at Morningstar they did say they had a $2 billion
of incremental fuel cost and the price per gallon is almost double what it was a year ago and the airlines responding aggressively says Alex Fassiano at CFRA research. Delta plans to raise airfare raise baggage fees and that's not likely to drive away too many customers says Nicholas Owens at Morningstar. Delta is the most profitable North American airline and that gives them some
cushion to absorb the temporary hit from spike in fuel cost. A big reason is Delta's relatively affluent customer base in Q1 it's revenue at the front of the plane so the fancy seats was up 14% they're seeing persistent demand people are paying the higher fairs they have these premium seats and well
“healed less price sensitive customer. So what about the other major US airlines?”
They're dealing with the same soaring jet fuel costs and they're more dependent on selling economy seats. Some are also raising their prices which could turn off inflation-stressed consumers says Johnny Sawyer at public opinion firm Ipsos. He points to a recent poll that found two in three Americans spending less on experiences. Lower and color Americans were definitely
more likely to say that they'll either avoid booking just by plane or just cancel their trips entirely. Different pattern emerging for higher income Americans though. According to a morning consult they're spending on airfare and hotels shot up in March. Senior Economist Sophia Bague says geopolitical
Conflict clearly isn't much of a deterrent.
that's here to stay and so it's just a blip and they're just continuing to
“behave as normal and plan their summer vacations. I'm Mitchell Hartman for Marketplace.”
We, the United States, that is, spend way way more than we take in. The way we cover that shortfall, the deficit that accumulates every year and that adds up to the national debt. The way we cover that is by borrowing a lot and who the treasure department borrows from does make a difference. Over the past couple of decades, the share of U.S. government spending being backrolled by foreign
countries has been falling and as Marketplace and Supreme Venezuela reports, that affects almost everyone in this economy. The U.S. is 31 trillion dollars in debt to the public. That is for reference about as much as the entire U.S. economy
produces in a year. We all about 30 percent of that to other countries and foreign
“investors. But here's the thing, it used to be almost half of all the publicly”
held debt. Shia Cabas is with the bipartisan policy center. The rest of the world is not propping up U.S. spending like it used to. One reason is that there's just a lot more of that spending. There's been an explosion in the amount of U.S. government debt outstanding. Tony Rodriguez has had a fixed income strategy at Nouveen. Think about all of the fiscal stimulus and tax cuts that we've seen
over the last five to 10 years. The U.S. borrowed a bunch to deal with the great financial crisis. Then we borrowed a bunch to deal with COVID. Meanwhile, tax cuts and we're still borrowing. Foreign governments have just been like, we're kind of good on the lending you money. Like we will lend you more, but not that much more. Also, U.S. debt is looking a little more suss these days. The U.S.
You know, their fiscal sustainability has been called into question with debt rising as much as it has. U.S. has been downgraded by a couple of rating agencies.
“So, foreign governments have been diversifying. Is there anything else we can buy?”
So, we don't have all of our risk in the U.S. story. The annual Gerard is with state street markets. You know, China has expanded into British debt into European debt into gold a lot more. Foreign investors have also been putting money in stocks instead of treasuries, especially when interest rates were really low there for a while. So, lots of reasons the rest of the world hasn't been bankrolling the U.S. federal budget as much
as it used to. So, then, where is the money coming from, again, Chia-Cavis? We've been writing IOUs faster than the rest of the world wants to collect them. And that means that more of those pressure securities are being purchased domestically. America has been borrowing more from America from banks, from U.S. investors, even from the Fed recently. And to get U.S. investors to go along and buy all those
treasuries, U.S. government has had to pay up more than it otherwise would. And when the U.S. government has to pay higher interest, so does everyone else. Americans in households and businesses across the country are paying more for everything from mortgages to auto loans to credit card debt because all of those are based on U.S. treasury rates. So, somebody's got to pick up the tab here. And if it isn't the rest
of the world, it is us. In New York, I'm Sabri Beneshour from Marketplace.
I've got nothing on that. I'll tell you first though. Let's do the numbers.
All right, here you go. The really happy music because we'll get to that in a minute. But read the room, right? Downdust rose up 1,325 points today, 2.9%, 47,999. But as that surge, 617 points, 2.8% 22,635, the S&P 500. 165 points to the good 2.5% 67 and 82. Bonbrey's fell just a little bit. You'll learn the 10-year Tino rose just a little bit at 4.30%, that actually is pretty steady. You're listening to Marketplace.
This is Marketplace. I'm Kai Rizdoll. PCE, the personal consumption expenditure price index and CPI, the consumer price index, are this week's big inflation data points. They come tomorrow and Friday. PCE is going to be based on February data. CPI is going to be from
March Marketplace to Samantha Field.
in moments of, oh, I don't know, volatility like this.
Collecting data for the consumer price index is pretty straightforward if time consuming. Economists go to store is make phone calls and scour the web to check prices on thousands of items and services. The PC price index is more complicated. Bill English at Yale School of Management says that's because it's not just looking at the price as consumers pay. For example, for medical care, the CPI just picks up your copay.
That's your out-of-pocket expense when you go to the doctor. The PC index has to capture all of the cost paid by your insurance company or the government. Getting that data from companies in the government can take a little while. PCE also includes price data from CPI, so it's just inevitably going to come out later. We get this lag,
“but we also get this quality, right? Amy Geisinger at LaFayight College says quality is important.”
The more information we have, sooner is better, right? The vet wants the information to make decisions. And what we have here is this tug-and-pull between being fast and being kind of comprehensive. CPI is faster. PCE is more comprehensive. Carol Abinder at the University of Texas at Austin says having both along with private data is helpful. If you have a lot of different inflation measures, they're all a little bit noisy. You're
looking for that trend that they're all sharing, and that's going to give you a better idea of what that kind of true underlying inflation is doing. Getting a good idea of what inflation is doing in real time is particularly important in volatile moments like now with a war and oil prices rising. But Binder says it's hard. You kind of think, well, we know what's going on in the economy right now. The hard thing
is predicting the future, but it's actually hard to know what's going on right now.
“The more data sets you have, though, the closer you can get, I'm Samantha Fields from Market”
Place. It's been a good long while since a company with just a ton of hype, like Facebook
or maybe Uber has offered it shares on the public markets for the first time.
But all signs are that 2026 is going to be different. Three big-name tech companies are buying initial public offerings this year. There's SpaceX, the Elon Musk-led company that launches rockets and run satellites and also owns Musk's entry in the artificial intelligence wars. There's anthropic, the company behind the AI platform clawed an open AI, which makes chat GPT. All three have already raised a billions of dollars from private
investors. They're aiming for more, though, in the public markets as Market Place's Henry App reports. Investors have generally been a bit more risk-averse this year, which is not a great sign for companies looking to go public. But every market that Renaissance capital says investors are still interested in certain IPOs.
SpaceX, open AI and anthropic each check those boxes, their huge names, and they're all involved in an industry that investors are still pretty bullish about artificial intelligence.
These are the first really recognizable big-name AI companies coming to market.
And every day investors want a piece of them. These big companies need more money even after raising billions from venture capital and other private investors, says Cera Coonstit Cleo capital. To some extent, they've sort of knocked on every door in private capital, and it's kind of time for them to move on to a different source of capital.
And the next place to find it is in the public market. Plus, those private investors in these tech giants, they're itching to cash in some of their shares, which have risen in value, says Kyle Stanford at pitchbook. And that's harder to do if shares in a company aren't publicly traded. They're used to being able to get in and get out when they need. And so at some point,
those are the investors that really need to get that liquidity. One more factor, interest rates. Steven Blitz at Global Data TS Lombard expects them to rise in the next year. This is probably one of the cheaper moments in which to do an IPO versus a year from now. When there will still likely be demand for these mega IPOs, he says, it just might be more
expensive for companies to get all their ducks in a row. And Henry App for Marketplace.
“Love radio and audio, though I do. The truth is we live in a video world now TV, YouTube,”
TikTok and all the other short form vertical platforms that are in front of our eyes and our ears every day. I said it ears there, because all of those video formats need just the right kind of background music to make all those emotional beats land the right way. That music
It turns out is its own category, sometimes called sync music.
Ryan Bradley wrote about it in the New York Times magazine the other day. Ryan, welcome to the
“program. Thanks so much for having me. I would like you to tell me please how you fell down”
this particular sync music rabbit hole. Yeah, of course. So I noticed a weirdly specific pop song while I was watching Love Island in a dramatic moment and I did the fact that you're watching Love Island, but anyway, go on. You know, it's fine. We all have her guilty pleasures, Love Island's mind. And I, she's ammed it on my phone as you do and nothing came up. And I'm kind of a music nerd so I was like, strange. What is this pop song? And I started poking around and I
couldn't find it anywhere. And then I started asking around and that kind of opened up the door
of this sync music world and eventually through some calls and reporting. I found the folks behind
the track and then went on to profile that company and go down this whole rabbit hole of sync music. And a rabbit hole indeed it was. Tell me about this industry because you know, I've heard
“that music and I'm like, hey, that's cool song. And you know, as I said in the introduction,”
we use some of it here. So it's, but it's an entire industry. It's like a whole business thing. Ray. And so as I started reporting, I was like, oh, cool. This will be a neat kind of corner of the music industry. And really early on, one of the musicians I talked to was like, no, let me stop you right there. It's not really the corner. It kind of is the music industry for a whole lot of working musicians, even artists that you've heard of, either dabble or their day job is making
sync music, making music to be scored to video. A lot of really serious musicians and I take this as their nine to five. Well, on that day job nine to five thing, it lends a certain stability to what otherwise has been for generations and generations, like a sort of a gig music side hustle. You got to really, really, really get out there and do your own thing lends a stability to that sort of business. Absolutely. And I mean, I would say more so now, even than in generations past
music is a really, really hard way to make a living. Even the biggest pop stars essentially use their album as marketing for their tours. And only the biggest stars really make money on tours. So that was the other thing that really drew me to this. I'm fascinated by how creative people called together a living. I mean, as a freelance writer, I'm a part of my day-to-day. So talking
to folks about how they make it work is always fascinating to me. You know, I heard the conversation
between you and Libby Breded, who produces this piece or is producing this piece before I actually jumped on the line talking about how you hope it continues to be real people. And I mentioned that because the tendency here might be to say, "Oh, look, AI can do this and why do we have to pay these people to do this?" Right. And I think that's sort of inevitable and that's already kind of happening. I was sort of worried as I started reporting that, "Oh, the secret sauce to this is going to be AI."
“And the truth is, a lot of these artists are using AI to make their process faster,”
the kind of on the back end. But at the heart of it, music is about producing an emotion, and it's about feeling, it's about catching a vibe. And I still think at the high end of sync, and even the middle ground, you cannot do better than people. Sure, people are going to try to make it cheaper and faster and buy non-humans, but I gotta say, I'm just, uh, I'm not interested. Amen. I'm with you there. I probably should have asked this question at the beginning, but I'll
ask you at the end. What did sync music, what does that mean? That's why I NC sync. Where did that come from? Yeah, it comes from just sync to video. So if it's music made to be cut to video, sync to video, then it's sync music. Ryan Bradley, freelance writer, most recently in the New York Times, writing about sync music, learn something new every day in this job. Ryan, thanks a lot of appreciate your time. Okay, thank you.
This final note on the way out today in which we did a quick perusal of the minutes of the most recent meeting of the Federal Reserve so that you don't have to. Here's the money quote, "the vast majority of participants noted that progress toward the committee's two percent objective could be slower than previously expected." And judge that the risk of inflation running persistently above the committee's objective had been increased. I do not have to
translate that for you, do I? Do I? Our media production team includes Brian Allison, John Focke, Montana Johnson, Dr. John Stead, Gary O'Keefe and Charlton Thorpalic Simpson is the manager of media production, and I'm Kai Rizdahl, we will see you tomorrow, everybody. This is APM.
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