Behind the Scenes of Surveillance Midday with Bloomberg's Tom Keene

We like to think of Tom Keene as one of the champions of long form interviews in financial media. One year on from his initial foray into television with the launch of Surveillance Midday, we spoke with Tom on Benzinga Radio to discuss the show and the importance of doing longer interviews, as well as some of the issues he sees as coming increasingly into focus in the world of economics, finance, and investment over the next year. Surveillance Midday recently celebrated a year on Bloomberg TV. How has the transition from radio been?

We started [Surveillance Midday] about a year ago, and we've been fortunate that they've given us a financial crisis, so every day there is something new to talk about. It's really different--it's a completely different medium. The one that got in my head about doing radio and TV was the late Tony Snow, over at FOX. I ran into him at a political convention eight years ago, and he really emphasized to me to do both media. It's just really great to do radio and learn everything I can from radio pros, and then to go over to TV--I think it's much harder to go the other way. It's much harder to be on TV and then go do something as narrow and naked as radio. There were some real challenges to it, but it's been a real joy to make the switch [to TV].

How long have you been doing radio at Bloomberg?

I've been doing radio at Bloomberg for over eight years with Bloomberg on the Economy. Al Mayers and I sat down eight years ago. He had come to me and said that he liked the way I was interviewed when they interviewed me. We developed a program around doing longer, more thoughtful interviews with all of the kinds of guests that we have. The thing that surprised us is that it was relatively successful right away. We sort of carried that over four or five years later to Bloomberg Surveillance (on radio). Then, when Ted Fine came over from CNN, Ted and I sat down and we tried to take all of the advantages we could from radio and bring them over to the realities of TV at 12 noon.

Surveillance Midday is notable in the daytime financial news lineup for its long form interviews with guests.

I'm really, really big on some form of power function there--I'm going to call it a squared function--in that it's really easy to do a two-minute interview, and then a four-minute interview is twice as hard, but an eight-minute interview is four times as hard as a four-minute interview, etc. What's interesting is that [longer interviews] are harder to do for a lot of people, but also, for the audience, they are more beneficial. You get a lot better insight in minute four or minute five of an interview than you typically do in minute one or minute two. So, the more you can extend out the interview to seven minutes, or fifteen minutes, you can really get to some important insights that you just don't get in the typical two or three minute interview.

Why don't more programs do it that way?

I think there is a set of answers. It's very interesting that financial media has a lot of people involved in it--very good people--who really don't have a financial background. They haven't really studied often economics, finance, or investment. They are sort of groping their way through it, tick by tick, day by day. We pride ourselves at Bloomberg on having at least a fair number of people that have really dug into the data--maybe Sara Eisen in foreign exchange or someone like Michael McKee, with years and years of experience. It's the idea of having people that know the material and then can sustain a longer interview.

You spent some time in the investment industry before joining Bloomberg. What was that like?

I was working up in Boston in the investment business. It was retail and institutional--mostly equities, but I was doing a lot of economic analysis. The industry was great, and then it changed. You know, we're coming up on another 1987 anniversary. I remember clear as a bell the crash of 1987. What's remarkable is that the business has changed so much from then, but it's also changed a lot from, say, the summer of 1998. The industry has just evolved and evolved to where, when I was given the opportunity at Bloomberg, it wasn't a tough decision to make. I think it's still a great industry to be in, but it's only an intellectually interesting industry to be in for certain jobs and certain positions globally. If you can do that, great, but like I say, I'm the luckiest guy on Wall Street to have the ability to work at Bloomberg each and every day.

Which are the intellectually interesting positions?

I think there are a couple [of industry jobs] that really intrigue me right now, and they're away from just the simple things like just investment banking vs. sales or retail trading. I think it is fascinating how foreign exchange continues to come on and how foreign exchange folds into all of the other parts of the market. So, I think anything around foreign exchange and economics, folded over to equities or fixed income or derivatives, really is interesting. The one that fascinates me is commodities. I haven't decided yet if commodities can possibly sustain the interest from the boom linked to the China and emerging-market boom. If that's the case, I think there are going to be all sorts of opportunities around commodities, but you really wonder if it's just--not a one off, but whether we see commodities give way to something more normal. I think the jury is really out on that. I think one of the great, great things to watch for next year is the challenges of big, responsible money--money that is under prudent man-rule, or under some form of actuarial assumption. There are a couple of moving parts here. One is that the actuarial assumption probably has to come down, and that's very painful because they've got to put up more cash. The other thing is, with Operation Twist, and with yields coming down, they are going to have an incredibly difficult time matching their obligations out seven years, or ten years, or twenty years or thirty years. I really think this is a story for 2012--that pension funds and insurance companies are going to really have to come up with very creative ways to manage what are some real long-term liabilities.

How did you end up at Bloomberg?

The key person there was David Tamburelli, who is one of our most valuable people in Bloomberg LP, over on the side that moves our terminals each and every day and services that community of over 300,000 terminals. David said to me one day, "You know, you really ought to work at Bloomberg," and I, of course, said no. Then, the business got slow, particularly after September 11, [2001]. So, I called up David and I said, "Well, what do you think?" I came down and interviewed in New York for derivatives. The wonderful guy that interviewed me said, "You know, you really ought to talk to Matt Winkler." I didn't know who that was. So, I ended up in front of the editor-in-chief of Bloomberg News, and he hired me essentially on the spot. We just sort of built the whole thing from there: this whole idea of Bloomberg taking economics, finance, and investment seriously, and doing two things. One was the mandate to talk to pros, but also to talk to people who aren't pros, but that are just very curious about Wall Street. This was all before the crisis. Now they are really curious about it because their jobs are on the line. I was actually auditioned for TV literally the first or second week that I got here. It just took a long time to get someone with a vision like Ted Fine and Andy Lack, our head of media, to say, "You know, you're a nutcase. We have no idea what you're doing. But let's go with it." The radio show was a huge leap of faith for a lot of people. There was just a real question from good, well-meaning people: "Wait a minute. You're going to do a show for an hour on the economy, and people aren't going to turn to sports radio?" There was a genuine belief in that. We got very, very lucky in that we got immediate response from industry professionals--some people that I thank each and every day--who really were aggressive about making clear that they enjoyed Bloomberg on the Economy, and that really helped.

It's somewhat counterintuitive to expect the audience to have the stamina to listen to that, but like you said, it's important to do the longer interviews.

I've got two basic theories, and this is absolute core foundation of what I do, and frankly, I think a lot of us at Bloomberg do, which is that the audience is smarter than we think. The audience is a) really, really smart, and b) they are working at it every day--particularly the younger audience. What is fascinating is that there is an audience out there that is very intellectually bright, and they are in other professions, but they just desperately are curious about the serious issues of the moment. Whether it is housing, or jobs, or the American economy--the deficit, whatever--they are just very curious to listen to interesting conversations. We sort of knew that when we started, but it has become a lot more evident. I think what we are doing at noon, and the original concept of Surveillance Midday, was to be a place that people could stop from three audiences: global Wall Street; the wonderful audience which is people not on Wall Street, but that are really, really engaged in investment, and to an extent, economics and finance; then, the other audience was this professional audience that, again, is really curious. The goal is to be a midday place where people can go and find out what the markets are doing across equities, bonds, currencies, and commodities, and separate from that: hear interesting conversations. And here is the key phrase: about things they care about. One of my criticisms of all news, and to an extent, financial news, is that we do a lot of reporting on stuff that people don't care about. They really, really, really care about jobs, they really care about the deficit, they really care about housing, and there are some other secondary issues. But, we really try to stay on those ideas.

You have a great lineup of guests on Surveillance Midday. How do you go about building that lineup?

One of the great advantages I've had, with the wonderful support of Matt Winkler, the editor-in-chief, and of Andrew Lack, the head of media, is their support of developing an original team around me. The people around me, we work very lean and very focused. We've got an entire process of how to find the guests, how to make mistakes--and we do have guests that don't work out--and just constantly monitor who are guests that seem interesting to our viewers and our listeners. We've done this with trial and error over the years. The big advantage I have is that my guests--whether they are stars, or up-and-comers, or whatever--really want to be on the show. The number one guest quality advantage I have is that they really want to come on the show and have a spirited conversation. We had on Ed Lazear today from Stanford University, and he's been very, very kind to come on for generous amounts of time. The privilege of having an extended conversation with Ed Lazear is just incalculable. By definition, 99 percent of the people in these jobs are smart. What we are looking for is a little bit of showbiz enthusiasm, but much more than that their ability to state clearly and cogently what they believe. It is extremely important to understand that the best guests are clear and cogent when they get things wrong. For example, if John Ryding of RDQ Economics is wrong on an interest rate call, say, four or five years ago, when he was at Bear Stearns, it is extremely valuable if Mr. Ryding can convey why he was wrong. That is a very important skill. They are all smart; it's just getting them where they can state it cogently and clearly.

Who are the important thinkers that you are reading right now?

There are too many to mention. What I would say is that I think, particularly with younger people, particularly in school, the common thread is that there are so many advantages to reading short--to reading all of the links on Twitter, and Vox, and Project Syndicate, and all of the different Internet-y kinds of digital things. You can't avoid the longer reads. I think that the new trap, if you will, is to think you can get by in learning about economics, finance, and investment by avoiding the longer reads. I'm sorry, but you've got to read some of the longer stuff.

That is something we deal with a lot as part of the "social media generation." It has really shortened our attention span.

It's amazing how additive this is. One of the great, great frustrations, I think, of people, whether they are 20, or 30, or whatever is understanding that just reading one book on development economics isn't going to get it done. If you've got a real curiosity, you've got to read a lot of books, a lot of articles, and only then do you realize how dumb you are--and that's when you really start reading. I'm sorry, but that's the way it is in all of this. One of my great, great criticisms of all of the media is that there is a lot of macroeconomic analysis from people who really don't have microeconomic foundations. You don't need to know Hicksian and Slutsky utility curves and indifference equations, but the bottom line is there is a lot of macro chit-chat that doesn't have underneath it the foundations of microeconomic dynamics.

What are your thoughts on Bloomberg's first GOP presidential debate and its sole focus on the economy?

It will be on at 7:00 p.m. on Tuesday evening. I'll be joined by Margaret Brennan for the pre-debate show. Joining us will be Austan Goolsbee and Richard Clarida, and I'm really excited to have the two of them on. I think there are some interesting nuances in their economics. This is going to be a great debate. We are going to go from 7 to 8; then, Charlie [Rose] takes over with the candidates. I am fascinated to see how the candidates address the economy that, from what I've seen so far, they really don't want to talk about. They are much more comfortable talking away from the economics of the nation and much more toward social policy and politics, and they are much more comfortable taking shots at the president. Charlie is going to leave time for the candidates to actually speak to each other about the economy. I think this is just brilliant, what we're doing, and I have no clue how it's going to turn out, but it is certainly an original idea. To be honest, we've gotten great enthusiasm from the staffs of the candidates, so I think it is going to be a most interesting Tuesday evening.

How far in depth should we expect the conversation to go?

I think that one of the most important things here is that politicians, of course, think short-term and give lip service to the medium and long-term. It will be very interesting to see the language that they use in addressing long-term challenges. It will also be very interesting to see if Charlie can get them to talk about the tactical economics of day one on the job. What would Ron Paul do day one on the job? Mitt Romney, I think, has been somewhat clear about that--more in a consulting, McKinsey-Bain kind of way--but, what would be their action plans for these interesting structural challenges that we have? I think that will be fascinating.

Is there anything you would like to hear from the candidates?

I don't have any strong opinions. One of the things I've really tried to do is keep my opinion, and particularly my politics, out of what I do. I think that's a hallmark of what Matt Winkler has built. I'll tell you, each and every day I understand more and more my decision and our decision to really try to be transparent and let the guests speak their minds without me getting in the way. What I would like to see as an end result of this debate Tuesday night is for there to be a smarter audience, and particularly for the candidates to understand better what the other candidates think. I really wonder how much, say, the Romney campaign knows about the Perry campaign, and vice versa.