♪ >> it's pretty simple to recognize we are in the midst of a boom in the u.s. >> this economy is very resilient, and now it is working with the private and public-sector. >> whether you are growing at 9% or 6%, the labor market is going to remain strong for the next few quarters. >> is this a year or 18 months? it is certainly not long-term. >> until the changes happen, you ignore them. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz.

tom: good morning, everyone. on radio, on television, a simulcast. a monday before a jobs day this friday. a set of things to talk about. let's rip up the script right now. jon golub with equities higher than the street. jonathan: some real confidence. the moment we are in right now i don't think demands conviction. it requires humility. that is the conversation around the federal reserve and what we may or may not see for the next 12 months. how'd nimble and humble will they be about the incoming data? tom: the survey shifted on jobs. one million jobs, many people now looking for that. some of that 7 million jobs jp morgan suggests is out there. the conversation could shift this friday. jonathan: the high, 2.1 million. the median estimate, nine haired

78,000. this economy is booming. a headline crossing the bloomberg. we talked about it last week briefly. verizon media, yahoo!, aol, all of that stuff we talked about, to be acquired by apollo funds for $5 billion. tom: a marked down from $10 billion. i was going back and forth a few days ago on what was the all in cost for verizon and their media soiree. that points out the winners and losers as we come out of this pandemic. lisa: and the idea that a lot of companies have a lot of cash and want to use it to make purchases of all sorts. that is why i think you will see more mergers and acquisitions. i think warren buffett kind of crystallized that over the weekend, with 145 billion dollars of cash not even being the headline. because what company out there doesn't have $145 billion? i am being tongue-in-cheek, but you know what i am saying. jonathan: me and my $140

billion. [laughter] tom: i look at the partition here, and hugo was great two hours ago or so on the digital differentiation that is out there right now. it is the same thing in inflation, where there is an inflation differentiation of goods and services. jonathan: you said the markdown of the media. can we stay on that for a second? $5 billion. can you imagine the conversation around these companies years ago? let's not let the moment go. $5 billion. what happened to those companies? tom: thank you for stopping on this. this is really important. i look at the late pete peterson , who i thought was wonderful and extremely generous, someone who is incredibly shrewd. tim armstrong is the shrewdest guy on the block. tim armstrong's exit from this train wreck is going to be canonized in business programs in the coming decade. lisa: there's are larger --

there's a larger point here. do you, for when everyone used to have yahoo! accounts -- do you remember when everyone used to have yahoo! accounts? now they have gmail accounts. what happens if there is some sort of shift in the popular view of what social media is the right one? we don't talk about that anymore because the behemoths keep gaining market share. jonathan: it's done, that seems to be the belief. can you imagine if we broke things up? let's say alphabet has to sell youtube. what if facebook had to get rid of instagram? if it happened, would it be that bad? tom: you've got to be careful there. the answer is huge. dow futures up 197. the vix giving me nothing. a little bit better statistic this morning. yields are up as well. let's cut the data short to get to our wonderful guest. david rosenberg with rosenberg

research, as i've said for years, slicing and dicing inflation. that's how he made his name at merrill lynch. we are thrilled he could be with us today. an open question today. some up your analysis of our fears of higher inflation. david: well, i think that there are fears and there is reality. i actually think on this, powell has probably got it right. there's no doubt that in addition to the depressed base affects, we are going to have higher inflation readings for the next few months. but the question is a change in the fundamental trendline, or is this a deviation temporarily from the long-term trendline? it is just human nature. everyone focuses on the here and now. you go back a year ago and we have negative cpi readings, negative core cpi readings through much of the winter into the spring. did that bring on sustained inflation? the answer is no.

now we have a situation in contrast to a year ago where the demand side is clearly coming back much faster than the supply side, but i think it is a faulty presumption to think that the supply side, as the economy reopens, is not going to come back with a lag, and inflation is going to come right back down again. but the prints are going to be higher than it few months, no doubt about it. i don't know why that would be a surprise to anybody. but i don't know how the first pandemic in a century managed to change the entire debate from a disinflation or low-inflation backdrop to somehow we are going into some pernicious inflationary backdrop. it is really tough for me to wrap my head around that. my sense is that just as we had a demand-supply gap i year ago where demand plunged more than supply, we have the reverse right now, and i think inflation there is going to last as long as the dip did last year. jonathan: what has surprised you in this recovery? david: well, i would say that

what has surprised me is the extent to which the risk on trade in the market revived as dramatically as it did. it is not that we shouldn't have seen investor animal spirits come back. it is just that the magnitude, so if you ask me when i take the pe multiple, north of 36, did i think that we would actually gallop ahead this quickly to the highest multiples we have ever seen in the stock market outside of the dotcom bubble, i would say no. so it is more about the euphoria and the market place that has surprised me. lisa: other people would say it is the magnitude of the earnings and fundamentals of these companies has surprised a lot of people to the upside, which is why we were just speaking with jonathan golub about upgrading the s&p forecast to 4600.

what would you say to people who say that the numbers justify what has been baked into market expectations given the amount of money being printed in combination with the treasury and the federal reserve? david: when you are taking a look at earnings estimates, say for the end of this year and into next year, they are really bringing us back to the levels that the consensus was pricing in at the start of 2020. so this notion that companies are radically beating down estimates, ok, i get that. what quarter do we ever see where companies aren't beating down estimates? this time it is clearly a record, but the record of earnings -- but the level of earnings themselves for this year or next year aren't that much different than they were at the beginning of last ear, and the market has ripped 30% from those levels. so the reality is i am not looking at the trending multiple. let's look at the forward multiple because the forward multiple incorporates what you

were just saying, which is this tremendous -- this dramatic increase in earnings expectations. the forward multiple is 40% above the historic norm. you can't rely on the fact that interest rates are at microscopic levels because they are not where they were six or nine months ago. this market really is valued for perfection, and then some. tom: but if we get the rosenberg inflation call, the reticence that i hear, how will that fold directly into the equity market come the end of summer, early autumn? david: i think it is more where do you want to be invested. my forecast is basically that we are going to have a fiscal cliff that we are going to fall off of. i don't know why most estimates don't reflect not just the inflation, but the growth. everybody is waxing about the

growth we have seen an income. it was basically -- it will world off in the second half of the year. when you consider the massive fiscal withdrawal we will see, maybe you have an assumption that the biden team will continue to rollout fiscal stimulus in perpetuity. i am not in that camp. so i think there's going to be tremendous fiscal withdrawal by the fourth quarter, so i don't think tapering by the fed is a critical risk. i think it is going to be that earnings and economic estimates into the end of the year are going to come down. i think we are going to have a bold flattening in the curve. i know that is against consensus. in the equity market, who knows? jonathan golub might end up being right. it is going further than i thought it would go. so if my forecast come to

fruition, you don't want to be in the cyclical trade anymore. you really want to be in growth and defensive growth. that is the segment of the market that should outperform. jonathan: always appreciate your perspective, david. good to catch up. dated rosenberg, rosenberg research chief economist. it won't 1% increase in personal income last month, the most since 1946. phenomenal. to david's point, none of that is artificial. tom: the only comparative we have is 4748 and a boom effective out of world war ii, some of that on europe flat on its back. i don't think that is an apt comparison. where we are now is absolutely original, and that is where you get this conversation. jonathan: so many distortions that we need to work through into year-end. lisa: the key question is the

fiscal plan that may be passed, if it is borne out over the next eight to 10 years, will have the same distortions. jonathan: how wide is that range now? no idea. that's what you've got to grapple with for the year ahead. a massive range on fiscal. yields, 1.64 91%. the s&p 500 up 0.5%. on radio, on tv, this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. warren buffett says if he were to step down as ceo of berkshire hathaway, he would likely be replaced by vice-chairman greg abel. he told cnbc that berkshire's board agrees abel is in charge of the noninsurance businesses. he has been seen as the leading candidate to replace buffett.

another sign of a gradual return to normalcy in europe. the eric behan commission -- the european commission has proposed easing restrictions on tourism and leisure travel for those who have received vaccinations. the u.s. denies it is close to a deal with iran to revive the nuclear agreement. officials also denied an iranian report that the u.s. has agreed to a personal swap -- a prisoner swap and agreed to the relief of frozen iranian funds. bloomberg has learned that gray television is in advance to buy meredith broadcast stations for more than $2 billion. they are getting rid of the 17 stations in's magazine division, which includes cycles such as "people" and "better homes &

gardens." global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

♪ >> ultimately, someone is going

to have to pay for this. it is almost creating an addiction to spending. so it is massive new debt to china, as well as massive tax income of the largest tax increase in 50 years. anyone who says this is just going to be on the 1% or big corporations, that is just phony math. americans understand that with this kind of spending and borrowing and taxing, everyone is going to get hit in their wallet. jonathan: that is one opinion, from republican senator john barrasso of wyoming. from new york city this morning, good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. getting you set up for the price action this morning and into this trading week. here's your price action, up 22 on the s&p. we advance their .5%. yields up on tens to 1.65 percent. euro-dollar, $1.2043. verizon media to be acquired by apollo funds for $5 billion. a correspondent of bloomberg

with this report. "aol and yahoo! were valued at $102 billion. now they are selling for just $5 billion." tom: i don't want to waste too much time here, but to go from at 300 market valuation down to the $10 billion all in, now two $5 billion, this thing was a disaster. jonathan: i think disaster may be the appropriate word. tom: we will have much more on it through the day. romaine bostick on top of that for the market close as well. this is a joy and an honor. if you are ever so lucky, you get to work with eugene surely at the urban institute years ago. bonus round, he also did a tour of duty at boston college. howard gleckman is the guy in this country who combines tax analysis with our fractured retirement system. he's with urban brookings, and we are thrilled he could join us

this morning. you heard the senator from wyoming there. very simply, the taxes are not going to be on the 1%. they are going to be on others as well. is the senator from wyoming correct? howard: no, not in the short run. there's very little chance congress is going to raise all the taxes biden wants even on the 1%. he is certainly not proposing to raise taxes on everybody else. over the long run, sure. there's no doubt that we are running up huge deficits. we've been running up deficits for decades. at some point we are going to have to repay them, but not anytime soon. tom: let's go cbo on ourselves right now. very simply, can the new money coming in actually move the needle on paying down our deficit and our debt? howard: it is not going to pay it down. the only question is will it pay for some of what president biden and congress want to spend. it is not a question of paying

down the debt. the question is how much bigger is the debt going to get. lisa: so let's talk about how big the debt is going to get and the idea that taxes are going to have to go up at some point immeasurably in order to counter this. can you give us some scale of what we are talking about? howard: president biden has proposed two big plans. one of them is the american jobs plan. the other is the american families plan. it is about $4 trillion of new spending and some tax cuts. remember, much of what the president is proposing is actually cutting taxes on low and moderate income people, so it is not all spending. he's proposing to pay for some of it. we have not seen in his proposals any specific details about how much money he's going to raise, but during the campaign, when candidate biden had a series of tax proposals, we estimated that he was proposing a net of about $3 trillion in tax increases,

mostly on high income people and corporations, and about $1 trillion in tax cuts for about $2 trillion in tax increases. so somewhere in the neighborhood of $2 trillion to $3 trillion in new taxes is down the road, and almost all of it is going to be on upper income and corporations. lisa: we talk about the actual tax rates. they are kind of a fiction. if you look at the actual corporate tax rates paid by bigger companies, they are substantially lower than the headline number. why is there not a greater discussion around simply implementing the tax rates that currently exist? howard: going back to 1986, congress has been debating this question about whether to broaden the tax base. the reason there is such a difference between the statutory rate and the rates that companies pay if there are all these special provisions, these

special tax breaks companies get. you look at them wanted to time and say it is price depreciation, it is r&d expenses. that's all good stuff. we should do that. we should encourage investment. but when you do that, what happens is the effective rate that corporations pay just go down and down. so congress, for 40 years, has been debating whether to get rid of some of those special interest tax breaks, and never does it. tom: how do you respond to tim cook of apple saying they pay a lot of taxes? how do you respond when you see that, as the grizzled pro of the nation? howard: it is an interesting question. you look at the financials and you don't see them. then he says, actually, we are paying the taxes. well, like they used to say in the old movie, "show me the money." it is hard to tease out public

disclosure from financial disclosure what companies actually pay in tax. one of the ideas that biden has would require companies to pay tax under public income. there are real problems with that, but at least it would make tax payments transparent. jonathan: some complex issues, and we appreciate your insight. thank you. lisa, you made this point last week, how difficult it is to determine who pays what where. lisa: if you take a look at the actual corporate taxes paid by the top companies, they have gone down 13% in 1990 to 17% last year. so what we are talking about is very different from the headline numbers even when president trump's tax cut, and i'm wondering why there isn't more discussion about implementing the actual tax rate and what it means to raise it to 25% or 28% if the existing practical rate is so much lower than the headline rate. jonathan: the official rate right now is 27%. jonathan golub was talking about his eps revision for next year that included a tax haircut, and

what he is modeling is a move from 21% to 25%. that is not the proposal on the table. tom: i don't hear anybody talking about the proposal on the table. what i love is that howard gleckman, our giant on tax analysis, is channeling jerry mcguire. jon, i just think, that's what the show is about. jonathan: this show? jerry mcguire? show me the money? tom: you help me help you. jonathan: good movie. tom: it is like the emotion of where we are lisa: where are we? jonathan: about taxes. tom: "you complete me." jonathan: i complete you? where is this going? are you doing the tom cruise run? tom: completely. lisa: this tom complete you? -- does tom complete you? jonathan: yes.

[laughter] i love them. people write in to ask if we actually like each other. he was off friday and we still ended the day together. and you came down, too. so there's an element within each other that we might like. lisa: they complete each other. tom: he'll never come back, they said. good morning. ♪

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jonathan: from new york city for our audience worldwide, live on tv and radio, here's a snapshot of the price action. we will walk you through some of the ranges, both on the actual numbers and what people are expecting. futures at 4196. up about .5%. on forecast, at the top end jonathan golub of credit suisse looking for 4600, at the bottom end, 3800. in the middle, 4150 on the s&p 500. some of the year-end forecast to get your head around. bond market going into payrolls, your 10 year yield 1.6349. the high of the year is 1.74. that was march 31.

yield came in over the last three weeks until last week, when yields started to climb about eight basis points. another basis point this morning. on 30's, 2.3060. we finish with the euro-dollar. euro-dollar, 1.2051. 1.21 56 was your high last wednesday. the high of the year early january, 1.23. the most important read will be not just the data, but how the market responds to that data if we do get something around one million for payrolls in america. tom: i want to point out, jonathan golub touching on spx 5000. jonathan: took a number or a time. never picked both. tom: thank you. this is a joy. dana peterson joined us on fed day. right now we talk the conference

board, going back before world war i. the conference board was definitive in corporate america addressed in the labor unrest of this nation across 100 years plus. dana peterson is their chief economist. you just did a definitive study of the great divide america that only the conference board can do. that is, i have a job, things are great. i am out of a job, things are bad. has that divide been ever greater? dana: i am sure there are times it have been greater but we have talking about the k-shaped economy where you had people that never lost their jobs, they receive stimulus checks and were able to pay down debt and spend on goods. meanwhile you had many people who did lose jobs and they were on unemployment. certainly we still have 8.5 billion people still unemployed in america. tom: if we do eight and a half months of one million jobs

formation and we get back to that point, then we have to grow from there. do you see an economy that can grow jobs once we get back to february? dana: i see an economy where we can grow jobs right now. we are seeing labor shortages among certain industries. certainly trucking, manufacturing, construction. when you look at services, gyms are reopening, restaurants are reopening. they cannot find people. part of that as a function of people not being able to go out for fear of getting sick and also skills shortages. it is a wild market. lisa: do you think the actual job increases may be more persistent then people are currently accounting for? dana: that is certainly something chair powell talked about. there could be wage pressures here, certainly as we get into later on in the year, where more people are more willing to go out.

businesses and personal services are reopening, and we could see prices go up. also in terms of inflation, we are already seeing or hearing that corporations are thinking about raising prices due to the fact you have the supply chain bottlenecks and commodity prices rising, especially for energy. they are looking to pass all of onto customers. we will see faster prices, both in consumer prices and wages. lisa: janet yellen seem to weigh in, citing with the fed line that this is all transitory and we will return to a lower inflation standpoint and joe biden's spending plan will not materially juice inflation going forward because it will be spread out over a decade. do you buy that argument? dana: there are two parts to that argument. one is transitory factors. we think some of the inflation pressures we will see in the second quarter and over the course of this year and next

year are transitory. they are linked to the pandemic -- they are related to the pandemic. they are also related to supply chain disruption which are also related to the pandemic. other types of inflation, especially with respect to inflation around building homes is probably here to stay. people are working remotely and looking for more space and we do not have enough homes. meanwhile the chip shortage, the semiconductor shortage will not be solved overnight. you cannot build a chip plant overnight. some of the types of inflation we are seeing will be more persistent. when we are looking at the administration's plans, certainly if we have much faster growth you will see some inflation pressures. that is more or less what we are expecting. tom: what do you hear from the corporations of the conference board? there are so many walls of worry. the worries now are comical within this boom economy.

what you actually hear from business people? dana: we are hearing that they think this year will be great in terms of growth. our own forecast is 6% growth. for next year, we are hearing they are very much concerned about inflation pressures. they are also concerned about trade, given the fact the u.s. and china are still having frosty relations around trade and intellectual property matters, that this will spill over into next year and we will see the potential slowing in growth, material slowing. jonathan: that is what happens when you cut off the guest. they stop talking. unexpected. tom: this is really important. perspective is really important. jonathan: ethan harris of bank of america just publishing. let's bring into our audience. unfortunately there is a trade-off between the speed of

the recovery and its length. it goes through a number of bullet points. ironically the much faster economy means a shorter -- reflecting on the exceptionally long cycle we had in the previous one. i want to bring you in on this. morgan stanley push this idea. shorter, hotter this time around. dana, what is your view? dana: that makes sense given the fact this was a recession unlike any other. we essentially cut the spigots off, and we are turning them back on. it was not the case we had asset price blowup or something major underlying structural factor that caused the recession. it was a pandemic. government said this was dangerous so let's shut off half of the economy, the services sector. now we are turning things back on. things will be hotter for shorter periods of time but most likely we will probably get the pre-pandemic levels of activity and settle in at a lower growth

rate, a growth rate more consistent with where the economy was just before the pandemic. jonathan: the destination is not a bust -- you cannot subscribe to the boom bust argument? is a return to trend? dana: indeed. dana peterson. jonathan: you know how it works. when tom speaks you just keep talking. then keep going. then keep going. lisa: she had some interesting points, in particular about what would cause inflation and what is transitory. how consistent is this idea of a transitory inflationary push with the shorter, hotter cycle. jonathan: the argument is we cannot have persistently higher prices absent a tighter labor market. their view is we are nowhere near a tight labor market. i have no idea how quickly we will get there. i keep going back to the word humility. you have to be humble about how

quickly things have recovered. about how quickly the ump limit rate has come down. -- how quickly the unemployment rate has come down. tom: steve matthews is our best on fed coverage. he puts out on twitter a bloomberg chart of used-car prices, up 52% 12 months trailing. how do you synthesize that? jonathan: look at the numbers last week. they have to cut planned production for the second quarter by 50%. lisa, you mentioned the new intel ceo basically saying this will take a long time to sort out. is it true the automakers believe the story bottoms out later this year and the individuals who make the chips believe it goes on for a number of years. no idea if the truth is somewhere in between. there are various individuals with get in the game on other side of the debate.

lisa: the truth is rent a car. a lot of the rental car companies got rid of their fleet to stay afloat. now they are -- people cannot go international and cannot buy the car. there is a question, service sector inflation. jonathan: you remember last year when everyone laughed at retail traders for buying hertz, and they were thinking about exploring your capital raise. i was one of those individuals. do not bother looking for the sound. it exists. i was thinking this was ridiculous. it transpired they were right to buy some of that equity because the story turned around so much. lisa: so dramatically. people are renting cars because the actual inventory they have are worth that much more. tom: i am watching for the 4000th time, the sun bowl of tottenham.

can you do that? jonathan: i want to correct something quickly. they were right in the idea things would get better for hertz. i do not think anyone should buy the equity vostok going through bankruptcy -- the equity of a stock. i just want to clear that up so it on the record. tom: when you kick a soccer ball could you make it curve like he made it curve? jonathan: yes. i've not seen his goal. going youtube. roberto carlos. it was the warm-up tournament for world cup 1998 in france and watch roberto carlos' kick. that is where they started to manipulate the flight of the ball. tom: is at the ball making it curve? jonathan: the ball is changing and players have learned how to manipulate the flight of the ball by kicking it any specific way. lisa: is that what you do when we talk? watch football clips? [laughter]

jonathan: at least during the interview. he will be listening to the response. do not notice at the top of the 6:00 in the 7:00, i've asked the guest a question and it is like he is somewhere else, then he restarts interview. lisa: never change, tom. we love you. jonathan: coming up, chetan ahya of morgan stanley. good to be back with you. tom: that is one of your properties. jonathan: a really important weekend going into payrolls. the band is back together. i know i go home more relaxed when you have a day off. i don't know why. this is bloomberg. ritika: with the first word news, i'm ritika gupta. it is considered one of the most serious threats to apple in recent years. today a federal court in california their trial begins

over the company's app store. the maker of the popular videogame fortnite epic games says apple has turned the app store into an illegal monopoly that squeezes mobile developers for a big chunk of their earnings. apple denies those claims. the u.s. denies it is close to a deal with iran to revive the nuclear agreement. officials also denied in a radiant report the u.s. has agreed to a prison swap and a release of billions of frozen iranian funds. world powers are trying to broker a new u.s. iranian deal. container shipping rates are heading higher again. the rate for a 40 foot container from shanghai to los angeles hit $4400 last week. that is the highest going back to 2011. prices are being driven by unrelenting consumer demand and companies restocking. orders for new container ships have jumped by the most since 2007.

global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪

>> i think we have a couple of years until we catch up to the

surge of demand across every aspect of the business. 25 years ago the united states produced 30% of the semiconductor manufacturing in the u.s.. today that number has declined to just 12%. anybody who looks at supply chains says that is a problem. tom: you notice a big deal when intel is on 60 minutes. there pat gelsinger talking about the chip shortage. we welcome all of you. lisa abramowicz and tom keene. bloomberg surveillance. we finish up a strong hour. with us is david wilson, the only one i know who has read every single berkshire hathaway annual report. this is on the gentleman who will never play the ukulele at the convention. greg gable is not warren buffett, is he? david: he is not, but he has the potential to be warren buffett successor. that is what we learned when warren buffett top to cnbc.

this question has been hanging around for years. who will succeed buffett? the idea we have a bit more certainty is going over well. berkshire is up 1.6% in early trading. they are in mind berkshire put out first quarter results over the weekend. they ended the quarter with $145.4 billion in cash and they spent $6.6 billion on stock buybacks. tom: i've been going back and forth with craig moffett from moffitt nathanson. you are the l.a. one who knows how much they lost. how much is it? david: it is billions. we have earnings out of estee lowder not going well. stocks down 4% because the third quarter came out. sales trailed analyst average estimates for the second time in the past four years. his gross profit margin was lower than projected and makeup demand is weak because the

coronavirus pandemic reduce the number of occasions to use it. on the flipside you've moderna up 3%. the company agreed to provide as many as 500 million doses to a global program called covax to assist developing countries. those shots will be delivered starting in the fourth quarter. germany's novavax, fax start, all higher in early trading. tom: is that what you have? david wilson, thank you so much. more on verizon and apollo through the morning. right now anand srinivasan with bloomberg intelligence, senior analysis. i think we ought to talk about chip shortage. lisa, started off. lisa: let's get to what pat gelsinger was talking about come the idea of shortage could go on. housing of get will this be in terms of affecting everything from auto make -- how

significant will this be in terms of affecting everything from automakers to your washing machine? anand: none of the stuff pat gelsinger said was particular surprising. we have been caught flat-footed. it has been a long time coming. the auto industry, for all of the noise it makes -- this is all pervasive shortage. we are connected at the hip with respect to the global regions that make semiconductors, particularly taiwan and what happened in 2020 was we saw a shortage in supply or we saw a huge falloff in demand. we cut supply. that supply has gone into pc's and handsets and other areas. when demand did come back in autos, much stronger than anticipated, we got flat-footed. this is going to continue until

global chip supply catches up. lisa: what would you say to people would argue we were much more rooted to the physical world during the pandemic? we bought stuff and did not have experiences. when the world goes back to normal the chip shortage will be alleviated by the idea people will be buying less stuff. do you buy that argument? anand: i do not. one of the things the pandemic has taught us is it was a crisis coming and it was amplified by the pandemic. we had been running on old p c's, one pc per household. the pandemic showed the old clunker you have in your home is not good enough for your -- to work in your home, for your kids or you. fast-forward a year and a half. the pandemic has shown us we

need one pc per person. some of us will never go back pre-pandemic. tom: building up the factories where they manufacture this stuff, is it like a copper mine in chile or can it be done in real-time in 90 days? anand: 90 days it is not. a copper mine in chile it certainly is not pure the reason -- it certainly is not. the reason we went to taiwan is because of cost. we have to reinvigorate r&d for producing engineers and we have to have the capability from an infrastructure standpoint to build it in the u.s. tom: cut to the chase. do we have the will to do it? do you see any indication the business of technology will allow for that or do we just keep going to taiwan? anand: is it possible? absolutely.

is it likely? no idea. it is more likely now than in the last 10 years. tom: i have to go rent a car. thank you so much. greatly appreciated. anand srinivasan. first time ever talk to him and it was not about microsoft. you have to be kidding me, lisa. i do not have a car. welcome to new york. what i my going to end up? squeeze into a toyota camera. lisa: if you are lucky to get a toyota camry. rental car companies are now buying used cars at options because they are that short vehicles because they cannot buy the new ones. this is all due to the semiconductor shortage. the idea, they cannot get enough cars. it is amazing to me. tom: it is a boom economy. going to a camp just below the arctic circle. we will have to drive north. lisa: what was the last time you

drove? tom: last time i drove a car, first of all it was a long time ago. it was a vw beetle and you could see through the floor. i think the cassette tape in it was grateful dead. it may have been steve miller band. lisa: and your wife will let you drive your daughter? tom: no. we will get help to drive us up. it is great, they go to camp and everybody just flies in. francine -- so i have to drive. lisa: the semiconductor chip shortage is interesting. when we talk about transitory inflationary assets, how does this bear into the cost going forward if it is not transitory? tom: you and jon have been better than this on me. the whatever is becoming more serious. lisa: there are chips in everything. washing machines. everything. there is a chip in me. [laughter]

it is malfunctioning right now. tom: i have one right here. lisa: i need to replace some at home. tom: when are you coming home? ok. stay with us. this is bloomberg on radio, on television. ♪

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set for the start of u.s. trading. this is "bloomberg the open" with jonathan ferro. ♪ jonathan: from new york city for our audience worldwide, good morning, good morning. "the countdown to the open" starts right now. we advance on the s&p 500. the inflation debate heating up your secretary yellen shrugging off concerns. sec. yellen: the federal reserve has the tools to address inflation should it arrive. we'll monitor it very carefully. i do not believe inflation will be an issue. jonathan: the administration staying on message while a chorus of concerns grows louder elsewhere. warren buffett telling shareholders "people have money in their pocket and are paying higher prices. it is almost a buying frenzy." mohamed