This week on Leaders with me, Francine Lacqua, I speak to tennis legend Rafa Nadal about how he stayed competitive despite injury. I was able to enjoy the victories probably more than if I will not have this issue. One iconic match. In my mind was, I am almost dead. And whether he misses playing. I don't miss tennis because there was nothing else to offer. Listen and watch Leaders with me, Francine Lacqua, on Bloomberg Television or wherever you get your podcasts. Bloomberg Audio Studios. Podcasts. Radio. News. This is the Bloomberg Surveillance Podcast. I'm Jonathan Farrow, along with Lisa Abramowitz and Anne-Marie 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 6 to 9 a.m. 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. Under Savannah's this morning, escalation with Iran. They want to settle so badly. They don't like what we're doing. And they do want to settle. We'll find out whether or not we settle with them or we just finish it off. The country is booming and we'll have Iran defeated soon. A lot of people thought oil would go up to $350 a barrel. It went up a little bit because I had to take tough action. When that settles down, I think you're going to have $55 oil. So here's the latest this morning. The U.S. striking Iran for a fifth consecutive day and hitting a sanctioned oil tanker sailing towards Karg Island as Tehran shows no signs of backing down. The possibility, the potential, that this could spread from limited action to a bigger, excuse the president's word, excursion. that this could be a return to revisiting the kind of things that we were talking about in March-April time, which is seizing Kark Island. What kind of military capabilities, resources do we need to achieve that? Because at this point, it still seems unclear to me that we have the ability, certainly have the willingness, to maintain an open passage through the Strait of Hormuz. Given the asymmetric nature of this, the fact that Iran can make that very difficult for both shippers and the US alike with very cheap drones, Have we done enough sufficiently to establish, provide any evidence whatsoever that that's achievable? Well, I think for it to be more achievable, you would need more troops in the region, amphibious assault ships. And also, if you're thinking about trying to take control of an island, you would need ground troops. Absolutely. So I guess that's at this moment, that is what the president is weighing. He has given Iran a very long leash to try to come to the negotiating table. And at some point, the president might want to escalate because he's left with no other option. Here's the take from Norman Rule of CSIS. He says, this is no longer a ceasefire suffering violations. It is a limited enforcement war with no apparent diplomatic exit. Norm joins us now for more. Norm, always appreciate your time, sir. So please elaborate and tell us what kind of phase you think we're in right now and what is the potential for this to become something bigger, something less limited? Good morning. So we're looking at the Iranians using attacks as part of their negotiating strategy. These attacks are not saturation strikes. They're limited, but they're sufficient to demonstrate that Iran has the capability to close or to restrict traffic in the Gulf, the Strait, and in the Arabian Sea. At the same time, the United States is undertaking a series of expanding and widespread attacks that are both degrading Iran's capability to attack shipping and to demonstrate to the Iranians that there is a material price to be paid for their lack of diplomatic engagement. Now, the diplomatic channel remains narrow, but it is open. And through the release of the American citizen, that is evidence of that. But as a ceasefire, this construct no longer is working. So what the United States is hoping, apparently, is that its actions will provoke a debate in Iran amongst its leadership. Basically, do they want to take this a lot farther? I think the answer is going to be yes in the near term, but events will dictate the course of this dynamic. Norm, can you provide some more context on the debate happening right now within the elites of Iran? Because some individuals are calling the likes of Mohammed Galibov a traitor for even having these negotiations with the United States. Well, you want to be careful about anyone outside of that dynamic, especially 6,000 miles away, talking with great clarity. But it is clear that we have, especially in the wake of the funeral of the previous Supreme Leader, a space where individuals in this political world are each trying to outdo each other for a tough position on the United States and the region. Now, that is likely going to remain constant for some time. But again, in the long term, in the medium term, rather, Iran has got to decide, do they want the United States to continue to move attacks north, to cut down maybe some of the bridges, to restrict the flow of trade into country, which touches their inflation, unemployment. It is a conversation that its leaders are going to have to undertake. I think in the short term, the dynamic is going to be for Iran to continue its pressure against the West and its neighbors. Norm, how much can President Trump escalate without Congress signing off on some sort of resolution of war? I think the administration would feel that it has considerable flexibility with the personnel that are in the region, as long as the United States is not engaged in a long-term boots-on-the-ground endeavor. The personnel that we have in the region are sufficient to conduct clearing operations that would take some time. But this is not a boots-on-the-ground forever war such as Iraq or Afghanistan. But that's sort of the issue and the tension here. How much are boots-on-the-ground required to really escalate to the degree that really cripples the current Iranian regime, as AMH was talking about earlier? Well, the comments that were made earlier are appropriate. I would say that this is no longer the 1980s. We have drones. The Navy has demonstrated some unique and special drone capacity involving sea drones. We don't need to have personnel on the ground as long as we have a capability to strip the Iranians of their offensive punch. Now, we do have personnel out there that are capable of raiding operations, and that's different from occupation. And even when you think occupation, it's a very long coast. So, you know, putting personnel on 100 miles of coast is not going to be reasonable. So you want to really have your personnel go where the offensive punch is. And I'll close by saying we also need to keep in mind that drones and missiles can be fired from a long way from the region. So having personnel 10 miles in or 20 miles in doesn't necessarily stop the Iranians from conducting strikes. So this is a recipe that's going to require some complex work, but our CENTCOMP leadership are really quite capable and experienced in this regard. Stay with us. More Bloomberg Surveillance coming up after this. Hi, I'm Barry Ritholtz, inviting you to join me for the Masters in Business podcast. Every week, we bring you conversations with the people who shape markets, investing, and business. I speak with CEOs, Nobel laureates, market innovators, and legendary investors. Whether you own stocks, bonds, real estate, commodities, even crypto, these are discussions you absolutely need to hear. Subscribe to the Masters in Business podcast on Apple, Spotify, or anywhere you listen. Earnings season ramping up with results from the major airlines. United boosting its full-year outlook, citing strong consumer demand, even in the face of higher fuel prices. The United Airlines CEO, Scott Kirby, saying, quote, United is built to thrive in every environment. Our brand-loyal customers value their travel on United, whether they're in Polaris or in economy. The United Airlines CEO, Scott Kirby, joins the programme for more. Scott, welcome to the programme, sir. It's good to see you. Before we get into the results, I just want to take a step back, because if we were back in the middle of March, and I was sitting here and you were telling me what you were about to do, I'd be like, Scott Kirby's gone nuts because energy prices have gone sky high. People are going to stop flying. They just won't pay up. Scott, can you take us behind the scenes, how you and the company navigated that energy shock over the past few months? You know, thanks for having me this morning. And really, it is pretty remarkable. You look kind of at the full year at what happened. Fuel prices are up $6 billion compared to what we thought at the start of the year. And that compares to the best year in history, where we made a little under $5 billion. And the fact that we sitting here today raising guidance and talking about at least having a shot at growing earnings on a year basis is a remarkable testament to the strength of demand And the demand and the economy are really strong but also that United Airlines has had the right the brand-loyal United Next strategy that we had as the right strategy, and the people of United are doing a better job than any airline anywhere in the world at implementing that, at taking care of customers, and we've been able to get to attract enough of those brand-loyal customers to United that we've mostly been able to overcome the fuel price spike. So I'm really proud of the team for what they've done in a tough environment to make it feel just normal if you're flying on United or if you're working at United. Scott, I remember earlier this year we were talking about how you expected demand destruction as prices got higher. You didn't see that, and neither did other people. And you said you were surprised that you didn't see more demand destruction. Are you starting to see any signs of that or at least customer fatigue in pricing? No, we aren't. Demand is incredibly strong for us. In fact, our fourth quarter yields are booked 14 points higher at this point in time than they were at the same point in time for 3Q. Corporate demand so far in July is up 30%. We really haven't. And I think as you sort of take a step back from it and look at what's really happened, it's air travel share of the travel pie got really, really small coming out of COVID. And even with fares where they are today, air travel is 13, the prices are 13% lower in real terms than they were pre-COVID, while hotels are up significantly, cruise lines and rental cars and everything else is up. And so I think we're just returning to a normal historic share of the travel pie for air travel. So the total cost of the trip is staying consistent with inflation, but after under-indexing to airlines, it's now over-indexing to airlines. And so the total cost of the trip isn't changing. nearly as much as just airfares returning to the normal historical relationship that we've had there to the total travel pie. Oil prices have continued to inflect upward as a result of a new resurgence in the conflict in the Middle East. And I'm just wondering, is there more room to go with respect to responding to those extra oil price costs with higher fares going forward? Well, you know, like I said, airfares are down 13 percent from in real terms from pre-COVID. So Short answer is yes. And in fact, there's been another fair increase this week. There were five or six when oil prices first spiked. And then when oil came down, they sort of paused. But there was another one this week. And so demand is strong. The consumer is strong. And it really is like our overall cost base is not just airfares, but our cost base with airport fees and maintenance and labor. Those have actually gone up even more. And so it really is just a case of recovering all the inflationary cost increases that have happened, you know, and recovering from the COVID trough in pricing. We were joking, Scott, earlier that the airline industry also is an AI trade for a lot of different reasons, but in part because of the business travel and how much is picked up. How much do you see that being driven by all the capital markets activity that we keep talking about with the big banks? The idea that everyone needs to fly around, meet their clients as they prepare for these incredible fundraising exercises. Well, I think it's probably more translated through and just what it means for the overall economy as opposed to just specifically the AI trade. But the economy is strong and part of it is AI and all the build-out that's happening with AI. But as I said, 30% up in business travel so far in July. Business demand is really strong. The U.S. economy is really strong and we're a beneficiary of that. One thing that we've seen is increasing creativity when it comes to how you approach different premium offerings, the latest being that in premium economy or economy plus, the middle seat gets blocked out and there's a shared table. I mean, is there something different about the creativity being used recently, whether it's different types of offerings, different segmentation, more specific offers to different slices of the consumer base? We really are trying to build a great brand loyal airline nose to tail. We're investing heavily in premium, but we're investing just as heavily in the economy cabinet. We recognize that today's basic economy customer is tomorrow's Polaris customer. And we're just trying to build a great airline for everyone. Starlink is an example. The Relax Row, which is in economy, is I think one of the coolest things we've done in a long time. A blocked middle seat in coach is just another example. And at United, we really are trying to just try everything that we can to make the experience better for customers and believing that if we do that, we will have a brand loyal customer base that does really well when times are good, but it's also worth proving how resilient we are in times when something like this oil price spike happens. I mean, the fact that we've got oil prices up $6 billion year over year, and we have a legitimate shot at growing earnings on a year-over-year basis, is just a remarkable testament to what it means to invest for the customer and get customers to want to fly us to decommoditize this industry. And really proud of the United team for what they've done to execute on that strategy. Scott, more people in New York might be more willing to fly you when you get back to JFK. Is that still in the works for next year? That is. We're very excited about it. Looking forward to getting back to JFK. Looking forward to once we're back to JFK. We'll be the only airline with Starlink on the airplanes. For those of you that care about true high-speed Wi-Fi, we'll be the only ones in those markets looking forward to it. Scott I love the idea to relax row. When I was a teenager young in my 20s flying when I saw an empty row of three seats and the plane taking off I'd never been more excited and as soon as you got up to about 35,000 feet I was on it trying to lie down and move the armrest to make this work. Scott have you had that idea for a long time? I've wanted to do it in fairness Air New Zealand this one came up with it and I've wanted to do it ever since they did it. And now we are. I'm excited about it. By the way, I spent a number of trips when I was young and non-reving doing the same thing. When we get to be our age, it's a lot harder to do that on those three seats. And so the relax row is going to be a lot better. And plus, you can hang out with your kids. Of all the stuff we've done, I personally think it is one of the coolest things we've done. It's going to be great for kids and families. Stay with us. More Bloomberg Surveillance coming up after this. We'll see you next time. on Apple, Spotify, or anywhere you listen. Bank of America, the stock sitting at record highs after delivering blockbuster results. Equity trading revenue rising 70% in the second quarter. Fixed income trading climbing nearly nine, making a record first half of the year for the sales and trading division. The Bank of America CEO, Brian Moynihan, saying against the healthy economic backdrop, resilient consumers and businesses are turning to Bank of America to spend, borrow and invest. Brian, I'm pleased to say, joins us now for more. Brian, good morning. It's great to be here. It's good to see you, sir. What a fantastic start to this year. Now, forgive me, we're journalists. We've got to ask, can this really continue at this rate? You just saw two statistics that I've watched carefully, which is what the activity of the consumer is and then ultimately what the unemployment new claims are. People argue it's leading or trailing, but it's actually indicator of the health of the employment market. and a 4.2% unemployment rate with new claims at 1.8 on long-term claims and 208,000. Everybody looks at it and says, well, that's in line with 19. Remember, the workforce has actually grown a lot since 19 in terms of size. And so you argue about 7,000 on 160 million workers or something like that. So it's a pretty small number. And so nominally it's a low number, and percentage-wise it's a low number. And that's good news because that means the consumer spend. And what we see in our data is the consumers are spending. If the consumer spend in America, that means the economy is okay. And that probably means the rest of the markets and the construct and the final demand is there. The weather for the banking industry has been shining brightly. The sun is out. The backdrop's great. The environment has been good. I want to draw a distinction between the environment and execution. Because fees were up everywhere. What are you proud of after that quarter on execution? Where are you gaining market share? Every single business grew the revenue, grew operating leverage, which is critical because that means your revenue is growing faster in expenses. and increase their returns, every single business, including the customer bases and all those things. So what you seeing us is the power that the engine of Bank of America is across all the businesses So our consumer business made billion after tax this quarter Plus that half as much as Wells Fargo made and it a big number That's one of our four businesses that we disclose, and the smallest of which made $1.5 billion this quarter. So these are big businesses. They're scaled. They're accumulating new clients. They're accumulating new activity. The markets business had a great quarter, and the investment banking had a great year-over-year comparison. But at $2.1 billion for the quarter, we were at $2 billion last quarter, $2.1 billion. It looks like a huge increase because last year's second quarter, we all thought the world was coming in. And with Liberation Day, this year it's different. But what's really important is the pipeline they have is strong. The deals in discussion are strong. And you're seeing deals announced every day across all the spectrums, M&A, strategy, financing, all of which is important. Just elaborate on that a little bit more. How strong is this pipeline? Because things just look phenomenal. We've had a record IPO. Alphabet came out with a monster equity capital raise. We saw SK Hynix more recently do something similar. Are we going to see more of that in the year ahead? Yeah, I think, you know, so if you look at we and all our peers are deploying more balance sheets. Our balance sheet to the markets business went up $100 billion for the quarter over what they thought they were going to be at, just to give you a sense. And so we had that capital based on that capability just to meet the moment. But if you look at investment banking, when you talk to CEOs, because if you think about last year this time and the amount of things they had to think about, we've added one with the wars. But at that time, taxes weren't set yet. The immigration policy was people were trying to figure it out, trade and tariff policy, and then deregulation. You come to the fall, they felt that that was sort of working its way through. So whether the tax and the tariff policy kind of looked at and said, eh, it's sort of 10% to 15% of countries willing to do business in the United States, and 50% if they're not, I can figure that out. Let me go figure out how to run my business. With a court decision, all the work that's gone around in circles a little bit. So we added some uncertainty. But on top of that, what you added is a year's worth of growth and a year's worth of belief that this year is going to grow at 2% plus. Next year is going to grow at 2% plus. That's convincing people that despite higher energy prices, despite inflation, despite the Fed having to keep rates higher, despite all that, the economy is growing through it. That's the interesting part. And I think CEOs last year got clarity on taxes, got clarity on deregulation, got clarity on immigration. And now are thinking hard about, wait, I can do things. I can see a little more distant in the future. Does that mean there's a parade of possibilities to change that? That's out there every day. Let's talk about the parade of possibilities. Sorry, I'm a journalist, so I have to. There's this question about how market dependent some of this capital markets activity will be for the rest of this year. The idea that a lot of people are borrowing money they don't even need right now because the market is so wide open to them. What are the potential thresholds, whether it's in rates or whether it's a sell-off in equities, that could potentially stymie some of the pipeline? So if we were here a year ago, you'd say nobody's ever going to get a mortgage at 6.5%, just to give you a sense. We were 30% up in production of mortgages this quarter. So as people get used to environments, they start to behave differently. And so the consumer borrowing is strong, but there's a lot of capacity left. But mortgage production being up 30% is kind of an interesting statistic in a world where if you said rates were going to be this high, they'd be doing mortgage volume. If you go to the commercial side, which is where you were talking about, we're seeing good loan growth, high single digits year over year in our core middle market. small business area. We're the largest small business lender in the United States. That's good news because that means, back to John's question, that's a little bit that if I'm not going to borrow if I don't need the money, I'm not going to borrow if I don't need to do something. Despite what people talk about, you're not going to issue debt and increase interest cost and have just sit there because the arbitrage, if you don't issue below treasuries, which these guys, no borrower does, you're going to pay three, four hundred basis points to let money sit there. It's just not going to work. So people are borrowing because they see opportunity. whether it's equipment buying, whether it's hiring, whether it's building a plant, whether it's inventory buildup. And so they're going to be more worried about can they get the margin on that. That's the question of inflation coming through the system later on. They're going to be more worried about will the final demand sit. That's watching the consumer behavior if they're in consumer side driven or if they're in supply chains. Is the demand going to stay there? So I think the markets will stay there if the companies see opportunities, whether small, medium or large size. And they'll stay there as long as they have something to do with the money. Nobody borrows money just to have it sit around. Despite what people think about SK Hinex and what just happened. I mean, just saying, you know, one could say. You've got to have a view or they're going to do something. Well, they just ate in their profit margin. So whatever they're going to do with it, they're thinking about something. One thing that you noted, the mortgages, is something that Tommy Show mentioned earlier. And he was saying that you've seen a lot of the traditional financial institutions gain market share back from alternative asset managers. And that's one of the reasons why the regulatory pullback has been so beneficial. Has that been your experience as well? Well, I think also the investor money going into the private capital funds and stuff has been slowed and there's been withdrawals and people getting out. And that then slows down the activity. But I think also the questions are raised around how much leverage is too much. And I think if you looked at the average leverage of the different deals, it was different inside the banking system and out. So I think we've seen a little bit of pushback to the system. And I think we also had to come with competitive responses. So we put together pools that we and our peers announced two different pools where we could, when the opportunity was there, hit the bid for. The core difference is if we do a $5 billion transaction, we tend to syndicate it and get five banks in. That takes time and effort and creates a little bit of uncertainty. The other players are saying, I'll give you all $5 billion. I'll bring you the equity plus. I'll bring you all the debt. We built a practice where we can do more of that for our good middle market companies. It still will be laid off. It's just when you lay it off, up front or behind. And so we built a couple of things. I think between that and the efforts of the industry and the efforts of our company, you're seeing some of the market share come back in. So it's a lot of factors. But we grew commercial loans at 8%, and that's a pretty good growth rate. Brian, you continuously mention, if we were this time last year, Liberation Day, unsure about tax policy, where the deregulation was going, where immigration policy was going. Are you more focused on Washington now than you have been in the past because of how pronounced this administration has been on policy? Well, I think the company's been around for 242 years. So we've been around through every administration that you can name pretty much. So it affects the economy. When it affects the economy, it affects CEOs, CEOs of what they want to do. All that affects us. But I think, you know, so an interesting question is right now is that, you know, if you, there's this say-do paradox is as high as it's ever been. If you read the consumer surveys, it says, I'm worried about, and it's listed out, look what you just saw in retail sales. In the month of June, the money moving out of Bank of America customer accounts was 7%, high sixes. And in July, it was the same strength. That's stronger than it was in May and April and March. That is counterintuitive to what the people are. So people are upset about high gas prices or upset about affordability. That's a fact. That's a fact that may change their behavior. Right now, their behavior hasn't changed. And I think that's sort of a parallel to all the things about policy. People talk about it and think about it, but if the underlying business conditions are fine, they just go to work and get through it. And so the question is, when does it affect their things? when supply chains become uncertain for pricing because of tariffs, they had to slow down and wait it out. Now they've got to kind of figure it out, and they can pass it through. When the immigration policy meant they might not get workers, they had to think that through. They're used to that now, and a lot less immigration. They've rearranged their work supply. You still hear that from our small businesses that workforce availability is a big issue for them, especially for the construction and things like that. And so I think we've got to get that rational at some point. But right now, there's enough momentum behind it that we're going through it. I've always given you credit to really understand where your research team is at with regards to their outlook, to know what they're thinking about with regards to rates. Other banks don't really do that. You do. Their view on interest rates right now, just share that with us. And if you can build on that, what does it mean for the business if they're right? That trajectory for interest rates turns out to be right later this year. Well, number one, they're a great team. And that's why I listen to them because they know a hell of a lot more about this than I do. Number two is it's a big investment, so you better take advantage of that investment on an annual basis. I have to say, this Friday they re-upped their things. They had three rate rises this year, and I think that was an outlier. And with some of these numbers, they may change that. But the principle they're saying is inflation will be here longer. It take us into 28 to squeeze it out That probably a year later than they thought six months a year ago But they raised their if you think about the travel over the last 12 months 2 2 GDP growth of 26, down to 1.5, back up to 2, 2, 3. That's showing that they're believing that the AI build out, the consumer spending consistency, the employment consistency overweights this, and that's why rates will stay higher, because the economy is strong enough in inflation, and then they've got to wait through the second wave of inflation for gas prices. First, it comes to the fast-turn stuff, and then it comes to the slow-turn stuff. And what I mean by that is this keyboard is produced with petroleum-related products to produce the plastic. It just takes time to get through the supply chain, so we'll see that. Their views, three rate rises this year. I can't speak for them, but I think the new numbers may change that a little bit, but we'll see. They're independent. They make their decisions. But the principle was inflation is going to be sticky. And we think it's a year sticker was a few months ago. AI is a piece of that. And maybe you can speak to what's happening internally at the bank right now. We've seen plenty of examples of certain companies, certain firms, maybe backing away on spend, telling the staff internally not to do this, maybe to focus on that instead. How have you approached this moment just on a cost basis? We realized that was a risk from the start. So we built we built optimization models on top of the models, for lack of better terms. And then we also negotiated, for lack of better terms, sort of fixed-based pricing, so subscription model pricing. So like with your firm, we pay you subscription, and inside you have the Bloomberg, Ask Bloomberg or whatever the AI capability. With other firms, we did the same thing. And so will that hold forever? I don't know. But right now, we're not seeing a big cost increase. And so we expect to spend more on it, but it's more about implementation. And then if we look across, I think of two big differences in the accelerator. We've had Erica for almost a decade now, and we can talk about that and what we've learned from that. But if you think about the implementation since the chat GBT moment type of thing, you've had one implementation where we're just spending money to get people really used to this. And that was to roll out across 200,000 people the ability to have AI and use it and do things with it. Everything else we have had, and that's a very modest cost when you think about a $72 billion expense base, frankly, and with Microsoft and Copilot and all that stuff. We already had a big license fee. It increased some. But that, we said, it would be hard to measure the incremental return. Everything else, the 110 business cases, the 37 that are implemented, all have a business case that says, here's the cost, here's the benefits, revenue, expense, whatever it is. It makes sense. Let's make the investments. 37 are implemented. We implement about one a week. 110 are approved. It's just a matter of getting the work done. And they've had a profound impact on the company. Now, the reality is it's slower than people might think. and it has to be done much more carefully because the $3 billion we spent on data over the last decade allows us to have these models operate in our company. Otherwise, it'd be a problem because they'd be picking up wrong stuff and it'd be a problem. So you had to have your data right, you had to have your infrastructure right, you had to have your security right, isolate your data so it isn't taken into the world, so to speak. So there's a lot of pre-work that the team got right. Now, that allows us to go faster once an idea comes up. About a year ago, maybe a little bit more, you said that you thought that the effect on the overall employment picture for Bank of America was that you'd be able to do more with the same volume of staff. Is your view the same today? We effectively just grew the earnings 30%, and we have a little less people we had last year. But meanwhile, in that is a very subtle exchange. So 18,000 programmers using AI coding. We didn't cut the programmers. We just are doing more coding. We're just doing more activity. Relationship managers picking up agent force, and that's going through the system right now. We didn't change the number of relationships. We were adding relationship managers all the time. But if you had 100%, in an example, 100 we have today could get 10% more efficient. They can do 10% more work. It doesn't mean we're not going to go to 105 because we want to have more production capacity. So it really is a very subtle answer depending on the activity. Our job is to handle it well and redeploy people. Last year we redeployed 14,000 people. We just hired 2,000 kids that will start next week from school. We hired 2,000 summer interns. We agreed to hire 10,000 military veterans. We are hiring a lot of people. We have to hire 1,300 people a month to have neutral headcount. How concerned are you and how much oxygen has been sucked out of the room from Mythos and some of the cybersecurity concerns from earlier this year? We heard some of your peers talking about that. And anecdotally, we hear a lot of fundamental concern about the risks to the financial system. I think the administration looked at it quickly. The Secretary of Treasury and others said, wait a second. And so we all got started on this, and we've all been working a long time. And yet it just speeds up the pace of the work you have to do to patch the systems and do the things. So it's a serious concern. I think the so-called AI industry and industry writ large have worked together. but you can't think that we're ever going to be able to control this because there's foreign models that people use and not everybody's going to have the same thought process that our country has but our country's tried to handle it and tried to be fairly systematic about it but it's a big change in the amount of work that will have to go on and the pace at which these tools will affect your vulnerabilities in your system and how fast you have to take care of that. That's the core work that's going on and then you've got proprietary software, open source software, We're open source, supported software, third-party software. And we're making sure the third parties are doing the work and working cooperatively with the team. We have a great team there. We have 3,000-plus people that work in that area, a billion dollars plus a year in spending. And they do a tremendous job under a fellow named Chris Fader, under Hari's leadership. And they do a tremendous job for us. And they work very cooperatively with their peers. And so you should rest assured we're all working hard on it. You should rest assured it's a serious issue. I've been saving the most important question. Are you ready? Yeah. How many World Cup games have you been to? I've only gone to one, but I'm going to some this weekend. I knew it. Too busy. One game. There's 102 of them. You sponsored the World Cup. One game. We share the fun. So we have teammates. It's been an unbelievable experience. And so we've got my fan band on. And we've given out about a million to three of these so far this year. We've had 102 games. Yeah, 102 games. Two left. Which game did you watch? It was in the quarterfinal in Boston. Okay. And look, it has been something that has been very interesting for our company. But the way the team went after it, with the military tickets or the soccer fields, this is part of our Sports With Us complex, which the Golf With Us is the Masters and the Golf With Us program, kids getting on muties for five bucks. I saw the Masters ad campaign. It was fantastic. The running campaign. You see what they did? They went back to like legendary golf shots and the kids replicated them. It was very cool. And so now the campaign you're starting to see now around the World Cup is sort of the you can do it. You know, with David talking to the young lady named Callie who's working with Street Kids United, which is a UK-based charity which runs a Street Kids World Cup that the commercial's filmed at with David and Bono. and U2, the new song, so it was kind of fun. But the idea is what we're trying to do is say fields and places. We're trying to soccer in schools. We're trying to help increase the availability of a game that is massively played in the United States, but just the availability on an access basis without having to spend for travel teams and stuff like that. You've got to pick a team, you know, Spain, Argentina. I don't pick teams. Of course not. David's a good friend, and unfortunately that was a tough result yesterday. I saw him basically crying last night. That was a tough result. Look, I've never played the game. I have no merit to talk about the quality of any decision or anything that went on, the refereeing or anything. I played football and rugby, and I have no idea how soccer's played. But you can call Bex now and get his opinion. He might have an opinion. I'll ask him. This is the Bloomberg surveillance podcast, bringing you the best in markets, economics, and geopolitics. You can watch the show live on Bloomberg TV, weekday mornings from 6 a.m. to 9 a.m. 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. We'll be right back.
