WEBVTT - Green Investing, The Fed, and Real Estate 0:00:00.840 --> 0:00:04.000 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:05.240 my co host Matt Miller. 0:00:05.640 --> 0:00:09.600 Every business day we bring you interviews from CEOs, market pros, 0:00:09.720 --> 0:00:13.600 and Bloomberg experts, along with essential market moven news. 0:00:14.160 --> 0:00:17.279 Find the Bloomberg Markets podcast called Apple Podcasts or wherever 0:00:17.360 --> 0:00:20.480 you listen to podcasts, and at Bloomberg dot com slash podcast. 0:00:21.079 --> 0:00:23.360 All right, Matt, we're going to elect electric vehicles. Matt, 0:00:23.360 --> 0:00:25.560 it's happening. I mean, you were so kind to let 0:00:26.120 --> 0:00:28.040 fired me up with the Bloomberg I mean with the 0:00:28.080 --> 0:00:29.040 Ford f one fifty. 0:00:29.880 --> 0:00:30.680 That was awesome. 0:00:30.960 --> 0:00:34.080 But I'm not going there unless there's like the batteries 0:00:34.120 --> 0:00:37.440 are better into charging stations everywhere we got gas stations. 0:00:38.000 --> 0:00:39.600 I'm not going to be a first adopter. Number of 0:00:39.800 --> 0:00:41.720 reasons I'm not going to be a first adopter there 0:00:42.400 --> 0:00:42.919 about it. 0:00:43.120 --> 0:00:46.360 Yes, call it that, but sorry my mic was off. 0:00:46.400 --> 0:00:46.920 Thank you, Ken. 0:00:47.159 --> 0:00:49.000 There are a number of reasons to be tentative about it. 0:00:49.040 --> 0:00:53.040 But how fun was it to drive the fifty light? 0:00:53.200 --> 0:00:54.960 Yeah, it's a beast. I have to admit that was 0:00:55.200 --> 0:00:57.880 pretty cool. Jeff Chramberlin joins us. He's the CEO of 0:00:58.080 --> 0:01:01.000 Volta Energy technology. He joined just live here in our 0:01:01.040 --> 0:01:02.600 Bloomberg Interactive Broker studio. 0:01:02.640 --> 0:01:03.120 Appreciate that. 0:01:03.200 --> 0:01:04.840 See, when it's a climate, we can get people coming 0:01:04.840 --> 0:01:07.160 into New York. When it's un week, people come into 0:01:07.200 --> 0:01:09.000 New York, you get them in studio. Jeff, tell us 0:01:09.000 --> 0:01:11.960 about your company, Vaulta Energies Technologies. What do you guys 0:01:12.040 --> 0:01:13.440 do here in this EV space? 0:01:14.880 --> 0:01:18.720 We invest in battery and associated tech technologies, including the 0:01:18.800 --> 0:01:21.560 kind of infrastructure you were talking about, charging stations, et cetera. 0:01:22.200 --> 0:01:24.680 A whole bunch of new technology requirements there that will 0:01:24.720 --> 0:01:28.240 be and RB are being adopted. And so our whole 0:01:28.280 --> 0:01:31.319 goal is to invest in companies at that inflection point 0:01:31.319 --> 0:01:33.080 when they come out of science and they're all ready 0:01:33.080 --> 0:01:37.119 for scale, and we're industrialists and we're investors by training 0:01:37.200 --> 0:01:39.720 and by experience, And ultimately I ran all the battery 0:01:39.760 --> 0:01:42.760 work at Ragon National Laboratory for ten years, got to 0:01:42.800 --> 0:01:45.720 see supply chains developing around the entire world and what 0:01:45.760 --> 0:01:48.360 the customer's needs were, so that we believe we can 0:01:48.400 --> 0:01:50.560 place capital more effectively than most. 0:01:50.720 --> 0:01:52.280 So unlike Paul, I am there. 0:01:52.360 --> 0:01:54.880 I'm ready, and I've got my eye on a few 0:01:54.920 --> 0:01:57.720 evs that I think are just amazing in terms of 0:01:58.560 --> 0:02:03.960 the powertrain. And my one concern is that I buy 0:02:04.000 --> 0:02:06.840 something and it becomes obsolete by the time it gets delivered. 0:02:07.080 --> 0:02:08.839 Do you see the same kind. 0:02:08.560 --> 0:02:13.799 Of what's it called Moore's law, you know in batteries 0:02:13.919 --> 0:02:17.400 that we famously saw in chips. Do they just double 0:02:17.400 --> 0:02:20.280 in capacity every year or have in price? 0:02:21.240 --> 0:02:22.880 Yeah? Thanks for the question, Matt, and by the way, 0:02:22.880 --> 0:02:25.639 thanks for having me on. I appreciate it. I come 0:02:25.639 --> 0:02:28.360 from the chip industry, and so we have tried to 0:02:28.440 --> 0:02:31.520 design or declare what a More's law looks like. But no, 0:02:31.760 --> 0:02:34.720 in Moore's law, it's double the density of transistors on 0:02:34.760 --> 0:02:37.560 a way for every twelve to eighteen months. What's happened 0:02:37.560 --> 0:02:40.960 in the battery industry is they were first commercialized lit 0:02:40.960 --> 0:02:43.160 the Mind batteries first commercialized in nineteen ninety two for 0:02:43.200 --> 0:02:46.640 cam quarters. So thirty years have progressed. The average is 0:02:46.680 --> 0:02:50.200 something like in the low single digits, maybe low double 0:02:50.240 --> 0:02:54.240 digits percentage improvements year over year as opposed to a doubling. 0:02:54.600 --> 0:02:56.280 So there is a kind of Moore's law for battery, 0:02:56.280 --> 0:02:58.679 but it's not as extreme as what you're describing me. 0:02:58.760 --> 0:03:00.840 But I do want to say one thing in two 0:03:00.880 --> 0:03:04.120 thousand and four when Tesla started the battery costs the 0:03:04.160 --> 0:03:06.440 unit of meritage dollars per killo what hour they were 0:03:06.440 --> 0:03:09.200 at about four to six thousand dollars per kilo what hour? 0:03:09.560 --> 0:03:12.120 Parody with gas powered vehicles, you need to be about 0:03:12.120 --> 0:03:13.720 one hundred to one hundred and fifty dollars a killo 0:03:13.760 --> 0:03:17.280 what hour. So they had the hubrit the hubris to 0:03:17.440 --> 0:03:19.920 believe economies of scale and better engineering could get you there. 0:03:19.919 --> 0:03:23.200 And guess what it did. The costs are down over 0:03:23.320 --> 0:03:25.760 ninety five percent since they were very close to parody 0:03:25.760 --> 0:03:26.360 with gas. 0:03:26.400 --> 0:03:28.079 So what are we looking at now for killo what hour? 0:03:28.600 --> 0:03:31.440 It's depending on the supplier. It ranges between eighty and 0:03:31.440 --> 0:03:33.240 one hundred and eighty dollars a kilo one hour. So 0:03:33.240 --> 0:03:34.399 we're essentially there. 0:03:34.200 --> 0:03:36.640 Okay, because the ones I like, well, GM has these 0:03:36.800 --> 0:03:39.720 massive two hundred and ten kilowat hour battery packs. I 0:03:39.720 --> 0:03:42.120 don't know how efficient they are, but I just like 0:03:42.760 --> 0:03:45.800 it's like a big block V eight, you know in 0:03:45.880 --> 0:03:48.720 the truck they get four hundred and fifty miles of range. 0:03:48.840 --> 0:03:52.360 The new Escalade EQ I think it's called or Escalate IQ, 0:03:52.520 --> 0:03:53.560 can't remember anyway, The. 0:03:53.520 --> 0:03:56.920 New EV Escalade does zer to sixty and five seconds 0:03:56.920 --> 0:04:00.440 and it weighs damn near ten thousand pounds. It's just 0:04:00.760 --> 0:04:05.000 unbelievable the amount of thrust you get from these electric motors. 0:04:06.720 --> 0:04:10.880 What do you think about the obsolescence of the battery 0:04:10.920 --> 0:04:13.120 though over a few years, Like, you can't just swap 0:04:13.160 --> 0:04:15.480 out a battery from these the way you could with 0:04:15.600 --> 0:04:17.159 an ice engine. 0:04:17.760 --> 0:04:19.800 You can swap them out. I mean you could if 0:04:19.800 --> 0:04:21.720 you wanted to keep your truck and put a more 0:04:21.760 --> 0:04:23.480 modern battery in it. There are ways to do that, 0:04:23.520 --> 0:04:25.960 But my guess is it'll be less costly for you 0:04:26.040 --> 0:04:28.560 as a consumer to buy a new vehicle. I don't 0:04:28.600 --> 0:04:31.440 think obsolescens going to move that quickly. And the battery tech, 0:04:31.800 --> 0:04:34.640 the key that they're aiming for is cost and range today. 0:04:34.960 --> 0:04:37.359 But there's another key that Paul mentioned it that's the 0:04:37.360 --> 0:04:39.839 infrastructure surrounding it. Where can I go to charge my 0:04:39.960 --> 0:04:43.720 vehicle quickly? What is potentially more important than range is 0:04:43.800 --> 0:04:47.679 ubiquitous fast charging. Can I fill my vehicle with energy 0:04:47.839 --> 0:04:50.080 to go three four, five hundred miles in five to 0:04:50.120 --> 0:04:52.720 twenty minutes. That technology is on the rise, It's being 0:04:52.760 --> 0:04:53.640 adopted right now. 0:04:53.839 --> 0:04:55.919 What do we know at this stage of development of 0:04:55.960 --> 0:04:59.160 the evs and batteries, about the supply chain, the raw 0:04:59.200 --> 0:05:02.320 materials need. I've heard from some people that that's going 0:05:02.400 --> 0:05:04.400 to be a gating issue. What do you know about 0:05:04.400 --> 0:05:04.840 that from your. 0:05:04.920 --> 0:05:06.960 Yeah, there's a lot of folks out there that talk 0:05:07.000 --> 0:05:10.320 about lithium being a resource. Lithium is the key, let's 0:05:10.320 --> 0:05:12.280 start there. In fact, I was hoping to talk today 0:05:12.320 --> 0:05:14.920 about a comparison with oil. The last time the human 0:05:15.000 --> 0:05:17.560 race has experienced an energy transition like the one that 0:05:17.600 --> 0:05:21.520 has started was a shift from whale oil to rock oil. 0:05:21.640 --> 0:05:25.159 And this transition is on the scale of that transition. 0:05:25.960 --> 0:05:27.920 By rock oil, I mean petroleum. 0:05:29.360 --> 0:05:33.760 What the shift from foil from whale oil? Which no, no, 0:05:33.920 --> 0:05:37.200 but now what's comparable now to the shift from oil? 0:05:37.320 --> 0:05:40.560 The shift from oil to renewable power and electric transportation 0:05:41.080 --> 0:05:43.440 is on par in terms of the size of the 0:05:43.440 --> 0:05:48.160 shift and the overall impacts on a wide variety of industries. 0:05:48.400 --> 0:05:51.160 As oil was. Oil was started for lanterns right look 0:05:51.160 --> 0:05:52.000 at where it ended up. 0:05:52.080 --> 0:05:55.280 So I'm wondering actually about that in terms of you know, 0:05:55.400 --> 0:05:59.080 how much lithium there is in the ground, how easy 0:05:59.120 --> 0:06:01.040 it's going to be. I guess it's going to get 0:06:01.040 --> 0:06:02.720 easier and easier to get it out of the ground. 0:06:02.880 --> 0:06:06.200 You know, is it as reliable as oil has. 0:06:06.040 --> 0:06:07.239 Been for the last century. 0:06:07.279 --> 0:06:09.400 Short answer is yes. I think there's a lot of 0:06:10.160 --> 0:06:12.120 handwringers that are telling us so there's not enough lithium 0:06:12.120 --> 0:06:15.240 and there's crust there. Definitely is. Your point's a good one. 0:06:15.240 --> 0:06:18.120 Though some is economic today in terms of extracting and 0:06:18.160 --> 0:06:20.520 refining it, some is not. One of the things we 0:06:20.560 --> 0:06:22.640 invest in, and we're not the only ones. Is new 0:06:22.680 --> 0:06:25.920 technology to make the extraction of lithium more economic, and 0:06:26.000 --> 0:06:28.200 so that getting back to the supply chain issue, you know, 0:06:28.240 --> 0:06:31.839 there's the headline is China controls a lot of the materials, 0:06:32.200 --> 0:06:34.280 but in the case of lithium, the vast majority of 0:06:34.360 --> 0:06:37.640 lithium that's ready to use in batteries comes out of China. 0:06:38.279 --> 0:06:41.680 But it's process there, it's not mind there. And this 0:06:41.720 --> 0:06:43.400 is something I was hoping to talk about, getting back 0:06:43.400 --> 0:06:46.640 to the supply chain, where is in mind the primary 0:06:46.680 --> 0:06:50.440 resources the so called cone in South America. Chile has 0:06:50.480 --> 0:06:53.839 a massive resource, so does Bolivia. In Argentina, that's where 0:06:53.839 --> 0:06:56.159 the biggest resources are. There's some in Australia, there's some 0:06:56.200 --> 0:06:59.320 in China, there's a lot in the US there And 0:06:59.360 --> 0:07:01.000 this is really what I'm saying. We're at the early 0:07:01.040 --> 0:07:04.479 stages of this. It's like finding a new you know, 0:07:04.480 --> 0:07:07.360 it started with spindletop oil oil did in Texas. Then 0:07:07.360 --> 0:07:09.880 we found oil, humans found oil in Saudi Arabia. This 0:07:09.960 --> 0:07:11.600 same thing is going to be happening with lithium. 0:07:11.640 --> 0:07:15.440 So are you you know, at Volta, are you investing 0:07:15.560 --> 0:07:19.440 in or are you involved in other companies investing in 0:07:19.720 --> 0:07:20.640 the processing of. 0:07:20.640 --> 0:07:22.760 These materials here because we don't want it to all be. 0:07:23.440 --> 0:07:28.440 Absolutely, we absolutely are including new technologies to process them 0:07:28.840 --> 0:07:32.160 more efficiently and less costly. So this and that is 0:07:32.160 --> 0:07:34.800 something I want to say. The supply chain movement is 0:07:34.880 --> 0:07:38.000 evidence of the maturity state of this industry. And what 0:07:38.040 --> 0:07:40.400 I mean by that is a guy from the chip industry. 0:07:40.800 --> 0:07:43.040 We'd been preaching to anyone that would listen, investors in 0:07:43.080 --> 0:07:46.120 the government up in Capitol Hill for fifteen years. The 0:07:46.160 --> 0:07:48.640 supply chains are going to move out of China. And 0:07:48.680 --> 0:07:51.680 here's why. In the chip industry it makes sense to 0:07:51.720 --> 0:07:57.320 have centralized manufacturing. The mass of microchips versus their value. 0:07:57.440 --> 0:08:00.440 Their value is massive compared to their mass. So you 0:08:00.480 --> 0:08:03.520 can get economies of scale, centralized manufacturing and Taiwan shipping 0:08:03.520 --> 0:08:06.840 around the world. You can't do that with the battery technology. 0:08:06.840 --> 0:08:08.200 And you don't have to look any further than the 0:08:08.240 --> 0:08:11.640 automotive industry itself to believe me that by units, the 0:08:11.720 --> 0:08:14.400 largest manufacturer of cars in the US is Toyota. They 0:08:14.400 --> 0:08:16.720 don't make their cars in Japan for the American customers. 0:08:17.280 --> 0:08:19.480 It's the same thing with battery tech. Those supply chains 0:08:19.520 --> 0:08:20.440 are moving right now. 0:08:20.600 --> 0:08:22.600 And by the way, in terms of the change in technology, 0:08:23.960 --> 0:08:26.240 what you're saying reminds me of something that Gary Shilling, 0:08:27.120 --> 0:08:30.800 who's a famous eighty six year old economist, He tells 0:08:30.840 --> 0:08:34.120 me when he was a kid, people were wringing their 0:08:34.120 --> 0:08:36.600 hands and worried that there wasn't enough copper in the 0:08:36.640 --> 0:08:38.640 Earth's crust for the telecoms industry. 0:08:39.480 --> 0:08:41.880 And obviously we've moved on from that piece. 0:08:42.000 --> 0:08:44.760 Yes, in the fiber. And there's another thing. There are 0:08:44.800 --> 0:08:47.199 New York Times articles in the nineteen thirties when the 0:08:47.200 --> 0:08:49.880 horseless carriage was really taken off, that there's not enough 0:08:50.000 --> 0:08:52.320 lead in there is crust. And this is an important 0:08:52.360 --> 0:08:55.679 point as well regarding movement of supply chains. Lead is 0:08:55.720 --> 0:08:58.280 recycled lead acid batteries out of vehicles. It's like ninety 0:08:58.320 --> 0:09:00.720 eight point seven percent of those are recycled. The same 0:09:00.760 --> 0:09:02.719 thing is going to happen here. So we may not 0:09:02.840 --> 0:09:05.199 have access to cobalt in those batteries that comes out 0:09:05.200 --> 0:09:07.640 of the congo, but we will because we're going to 0:09:07.679 --> 0:09:12.520 move to so called urban mining waste materials to get copper, cobalt, lithium, 0:09:12.559 --> 0:09:13.040 et cetera. 0:09:13.760 --> 0:09:15.160 Fascinating, So cool it is. 0:09:15.520 --> 0:09:17.240 I mean, I mean, I guess you get bachelor's in 0:09:17.320 --> 0:09:19.480 chemistry from Wake Forest, and what are youna do with that? 0:09:19.760 --> 0:09:22.120 So you triple down you get a PhD in physical 0:09:22.200 --> 0:09:25.480 chemistry from Georgia Tech. I mean, those are some serious 0:09:25.559 --> 0:09:28.200 engineering geeks down there in Georgia Tech. 0:09:28.240 --> 0:09:29.400 So he means that in a good way. 0:09:29.480 --> 0:09:33.120 Yeah, in a good way, some really big ones. So anyway, 0:09:33.280 --> 0:09:35.160 then you go into the electric car business, why not? 0:09:35.400 --> 0:09:38.760 Jeff Chamberlain, CEO Volta Energy Technologies, thanks so much for 0:09:38.840 --> 0:09:42.640 joining us, coming into the Bloomberg Interactive Broker's studio. So again, 0:09:42.880 --> 0:09:44.960 it is a climate week in New York, and so 0:09:44.960 --> 0:09:46.480 we get a lot of smart people coming through here 0:09:46.520 --> 0:09:49.000 talking to us about what's happening out there in the 0:09:49.360 --> 0:09:51.040 evolution of the energy space. 0:09:51.960 --> 0:09:55.400 You're listening to the Team Ken's are Live program Bloomberg 0:09:55.440 --> 0:09:58.800 Markets weekdays at ten am East ding on Bloomberg dot com, 0:09:58.880 --> 0:10:02.040 the iHeartRadio app and the Bloomberg Business App, or listen 0:10:02.120 --> 0:10:03.720 on demand wherever you get your. 0:10:03.559 --> 0:10:06.400 Podcast, Matt. 0:10:06.440 --> 0:10:09.800 Instead of buying the latest car with a scat pack 0:10:09.880 --> 0:10:12.600 or whatever it is, you could put your money into 0:10:12.640 --> 0:10:13.120 your treasure. 0:10:13.160 --> 0:10:15.120 You can get five points zero six percent today. How 0:10:15.120 --> 0:10:15.520 about that? 0:10:16.120 --> 0:10:19.400 I mean, it's probably a smart idea, which is why 0:10:19.440 --> 0:10:20.960 I won't be doing it, but a lot of others 0:10:21.040 --> 0:10:23.959 are not. Just in the twos, right, the fives hit 0:10:24.000 --> 0:10:26.120 the highest level since two thousand and seven. The tens 0:10:26.200 --> 0:10:28.200 hit the highest levels since two thousand and seven, and 0:10:28.240 --> 0:10:29.800 a reminder, you. 0:10:29.720 --> 0:10:35.200 Know that was sixteen years ago. So these rates are incredible. 0:10:35.640 --> 0:10:40.760 And keep in mind, right, prices move in the opposite direction. 0:10:40.920 --> 0:10:43.319 So when we see these high prices, that mean rates, 0:10:43.360 --> 0:10:46.720 It means that the prices are low. Why is everybody 0:10:46.800 --> 0:10:51.320 selling off treasuries right now? Let's ask Joanna Diegos. She's 0:10:51.320 --> 0:10:53.480 the co founder of bond Blocks and she joins us 0:10:53.559 --> 0:10:56.280 right now in the Interactive Brokers studio. So Joanna, I 0:10:56.320 --> 0:10:58.720 know you well from our ETF show or you're a 0:10:58.720 --> 0:11:03.640 frequent guest, and I also know from that show that 0:11:04.280 --> 0:11:08.240 everyone's been getting long in treasuries and they've been losing 0:11:08.280 --> 0:11:09.559 money on that big bet. 0:11:09.600 --> 0:11:12.960 Why yeah, over the last three months that that trade 0:11:13.000 --> 0:11:17.000 is down ten percent if you're going long treasuries twenty plus. 0:11:17.200 --> 0:11:20.480 I think that this is a trend that the treasury 0:11:20.760 --> 0:11:23.920 flow into the long end has been probably the biggest 0:11:23.920 --> 0:11:26.760 percentage of flow into treasuries year on year, So the 0:11:26.800 --> 0:11:30.040 twelve months trailing it's the biggest. It's a thirty percent 0:11:30.040 --> 0:11:32.480 of flows into treasuries for twenty twenty three. I think 0:11:32.520 --> 0:11:35.400 people are just taking a really really big view on 0:11:35.480 --> 0:11:38.120 trying to call the bottom and they're sticking with it, 0:11:38.440 --> 0:11:40.679 which is pretty fascinating that they're doing that. I think 0:11:40.720 --> 0:11:41.960 the good sign is that. 0:11:41.920 --> 0:11:45.760 Today it makes sense, right because we haven't seen yields 0:11:45.760 --> 0:11:48.400 this high and as we just said, sixteen years. 0:11:48.280 --> 0:11:48.880 Yes, yeah. 0:11:49.000 --> 0:11:52.080 I think I think the encouraging thing is that we've 0:11:52.160 --> 0:11:54.400 seen less of than twenty twenty three or recently is 0:11:54.480 --> 0:11:56.800 all of more flow into the short short end, so 0:11:57.000 --> 0:12:00.280 three months, six months and more flow balanced across US 0:12:00.600 --> 0:12:04.440 one one plus years into three, five ten, just as 0:12:04.480 --> 0:12:06.600 you described. I think that's encouraging and people are trying 0:12:06.640 --> 0:12:10.240 to just have feather in more duration into their into 0:12:10.320 --> 0:12:10.920 their portfolio. 0:12:10.920 --> 0:12:13.480 Now, just tell us quickly about your products at bond Blocks, 0:12:13.520 --> 0:12:16.839 because there are some very popular ETFs that people use 0:12:16.920 --> 0:12:17.800 to make these trades. 0:12:18.440 --> 0:12:21.840 Yeah, So for that very reason, we observe that you 0:12:21.880 --> 0:12:25.679 can't actually trade exact duration in the current and in 0:12:25.720 --> 0:12:29.840 the current ETF offering. So we launched eight duration specific 0:12:29.880 --> 0:12:31.920 treasury funds. So if you want one your duration to 0:12:31.960 --> 0:12:34.520 your duration three it duration, you can use our products 0:12:34.520 --> 0:12:37.360 more precisely for exactly the trades I think people are 0:12:37.360 --> 0:12:40.680 trying to put on. If you broadly put on duration 0:12:40.800 --> 0:12:43.199 in your portfolio, you may have you may you may 0:12:43.240 --> 0:12:45.880 overallocate to that duration. And so we want people in 0:12:45.920 --> 0:12:48.400 these markets to be able to be very very prescriptive 0:12:48.440 --> 0:12:51.280 and selective where they go into into high yield. 0:12:51.080 --> 0:12:53.240 Given rates where they are. Are you seeing flows? I 0:12:53.320 --> 0:12:56.920 mean it seems like you're perfectly positioned for where the 0:12:56.960 --> 0:12:58.720 market is today at bond Blocks. I mean are you 0:12:58.720 --> 0:13:01.120 seeing flows come in and if so, kind of where 0:13:01.120 --> 0:13:01.560 are they going? 0:13:01.600 --> 0:13:04.559 With a really cool trade this week in our double 0:13:04.559 --> 0:13:07.320 b high yield fund. We have a credit rating a series, 0:13:07.360 --> 0:13:11.000 and I think that's acknowledging the strength that you're seeing 0:13:11.040 --> 0:13:14.880 corporate balance sheets and the resiliency that has been in 0:13:14.920 --> 0:13:17.240 the economy this year. So I think I think people 0:13:17.240 --> 0:13:21.160 are taking on very measured risk and to see a 0:13:21.160 --> 0:13:23.400 trade like that is really compelling. 0:13:24.440 --> 0:13:24.840 Interesting. 0:13:25.520 --> 0:13:29.760 So for bond blocks, I mean, again, what are some 0:13:29.840 --> 0:13:32.640 of the products that are kind of most popular these 0:13:32.720 --> 0:13:34.679 days in your ETF portfolio. 0:13:35.040 --> 0:13:37.960 Yeah, we're starting to see increase interest across duration as 0:13:38.000 --> 0:13:40.680 I mentioned, like moving out a little bit into the 0:13:40.760 --> 0:13:44.520 duration trade, and as well, we're seeing interest in some 0:13:44.600 --> 0:13:46.680 of the corporate products that we have out. We have 0:13:46.720 --> 0:13:49.439 a really robust offering in high yield. We have over 0:13:49.480 --> 0:13:51.600 ten products in high yold. So you can trade sectors 0:13:51.600 --> 0:13:54.679 with bomb blocks, the bond blocks, you can trade credit ratings, 0:13:54.720 --> 0:13:57.600 as I mentioned, and I think Matt would be happy 0:13:57.679 --> 0:13:59.360 to hear that. In the summer, we saw a lot 0:13:59.400 --> 0:14:00.880 of interest in our triple C product. 0:14:01.360 --> 0:14:05.880 It's one of my favorite. So you just picked my favorite. Yeah, 0:14:05.880 --> 0:14:06.400 but they're. 0:14:06.240 --> 0:14:09.679 Tight, right, Yeah, So obviously they do what they say 0:14:09.679 --> 0:14:11.760 they're going to do. They track their indexes, they give 0:14:11.760 --> 0:14:15.439 you that exact exposure. Also, what I think is interesting 0:14:15.480 --> 0:14:18.160 is people are starting to realize that the fundamentals in 0:14:18.280 --> 0:14:21.200 high yield are really strong, and if you think about it, 0:14:21.240 --> 0:14:24.120 relative the other risks that are in your portfolios, those 0:14:24.200 --> 0:14:26.680 high coupon rates are providing you a ton of cushion 0:14:26.760 --> 0:14:30.600 for any relativity that might come going forward in fixed 0:14:30.600 --> 0:14:33.800 income plus relative to equities, which over the last ten 0:14:33.880 --> 0:14:37.400 or fifteen years portfolios have been heavily heavily allocated to 0:14:38.080 --> 0:14:42.760 eke out more return. These are great protocols to look 0:14:42.880 --> 0:14:46.880 for exposure to to get you to those levels of 0:14:46.880 --> 0:14:49.040 return seven ten percent a year, whatever you're looking for, 0:14:49.240 --> 0:14:53.320 with less risk. In fact, the broad high yield category 0:14:53.400 --> 0:14:55.600 has over less than half the risk of the S 0:14:55.640 --> 0:14:57.840 and P five hundred. Yet you're getting all this yield 0:14:57.840 --> 0:14:59.920 and all this cushion and strength and the balance. 0:15:00.400 --> 0:15:01.040 That's interesting. 0:15:01.400 --> 0:15:05.120 So high yield in general, which is what triple b's 0:15:05.480 --> 0:15:06.080 and lower. 0:15:06.480 --> 0:15:09.120 So no triple B is investment grade, so it's double 0:15:09.120 --> 0:15:10.440 B B and triple. 0:15:10.160 --> 0:15:12.240 C double B and lower. 0:15:12.400 --> 0:15:17.400 Yeah, that general category has less risk than buying the 0:15:17.520 --> 0:15:18.600 S and P five hundred. 0:15:18.680 --> 0:15:18.840 Yeah. 0:15:18.880 --> 0:15:22.000 From a Volatiley perspective, over the last ten years, you 0:15:22.040 --> 0:15:24.680 just don't think that you really have to reintroduce yourself 0:15:24.720 --> 0:15:27.040 to some of these categories and fixed income and remind 0:15:27.080 --> 0:15:28.760 yourself of the characteristics of them. 0:15:29.160 --> 0:15:29.320 You know. 0:15:29.400 --> 0:15:31.840 Also, this isn't the same credit cycle we've seen in 0:15:32.080 --> 0:15:36.560 the past. The defaults haven't shown up in past any 0:15:36.640 --> 0:15:39.120 kind of historical highs that they should be. They should be. 0:15:40.120 --> 0:15:43.160 The distressed names in the overall category is pretty low. 0:15:43.200 --> 0:15:46.200 It's only about seven and a half percent. So it's 0:15:46.600 --> 0:15:49.800 an interesting thing if you get familiar with the corporate 0:15:49.840 --> 0:15:52.960 issuers and the corporate categories investment grade two. There's a 0:15:53.040 --> 0:15:57.600 lot of relative risk and reward here that you haven't 0:15:57.640 --> 0:15:59.880 been able to deploy in your portfolio for a long time. 0:16:00.120 --> 0:16:02.720 Do you see demand for up and quality over high yield? 0:16:02.720 --> 0:16:06.360 Now up and quality over high yield like getting getting 0:16:06.680 --> 0:16:08.560 some of these? Yeah, so that's the thing. You can 0:16:08.600 --> 0:16:11.360 be really selective within these categories. With you know, at 0:16:11.360 --> 0:16:13.280 bomb blocks we have, you were able to choose the 0:16:13.320 --> 0:16:16.840 categories very very precisely, and so yeah, you can go 0:16:16.920 --> 0:16:20.120 seek out quality high yield and you can go seek 0:16:20.120 --> 0:16:24.480 out quality corporate exposure. And it sounds like those two 0:16:24.480 --> 0:16:26.240 things aren't supposed to go together, but there's just a 0:16:26.280 --> 0:16:29.360 lot of misconceptions about the category and what's going on 0:16:29.400 --> 0:16:29.960 with them right now. 0:16:30.040 --> 0:16:32.840 Yeah, I'm looking at ETFO on the Bloomberg terminal x 0:16:33.080 --> 0:16:38.280 c c C, the CC triple C rated US A 0:16:38.320 --> 0:16:41.360 dollar high yield corporate bond up twelve percent trailing twel 0:16:41.360 --> 0:16:41.960 month basis. 0:16:42.440 --> 0:16:45.760 Yeah, Yeah, that's that's that yield that is just really 0:16:45.800 --> 0:16:49.480 hard to look away from, especially with as I mentioned, 0:16:49.520 --> 0:16:52.920 the different level of volatility that that gives you in 0:16:52.960 --> 0:16:55.480 your portfolio. And you know, it's twenty twenty three, We're 0:16:55.480 --> 0:16:57.400 almost at the end of twenty twenty three at bomb blocks. 0:16:57.400 --> 0:16:59.880 If we don't see a recession or any downturn half 0:17:00.280 --> 0:17:01.680 through the end of this year or even into the 0:17:01.680 --> 0:17:04.720 beginning of next year, and you're going on your second 0:17:05.160 --> 0:17:08.760 almost third year of this market environment with yields at 0:17:08.800 --> 0:17:10.800 these levels, which are double where they were before the 0:17:11.520 --> 0:17:15.359 Fed started hiking rates. And really, if we think things 0:17:15.400 --> 0:17:17.480 are higher for longer with ja bomb blocks we do 0:17:18.480 --> 0:17:21.160 and we don't see these hard landings, you really need 0:17:21.200 --> 0:17:22.760 to think about what's going on with your portfolio for 0:17:22.760 --> 0:17:23.760 the next two to three years. 0:17:23.840 --> 0:17:26.199 All right, Joanna, always great stuff to chat with you. 0:17:26.280 --> 0:17:29.120 Joanna Diego's co founder of bond Blocks. 0:17:29.560 --> 0:17:32.680 You're listening to the tape cans are live program Bloomberg 0:17:32.760 --> 0:17:36.320 Markets weekdays at ten am Eastern on Bloomberg Radio, the 0:17:36.400 --> 0:17:39.640 tune in app, Bloomberg dot Com, and the Bloomberg Business App. 0:17:39.680 --> 0:17:42.479 You can also listen live on Amazon Alexa from our 0:17:42.520 --> 0:17:47.480 flagship New York station, Just say Alexa play Bloomberg eleven thirty. 0:17:48.359 --> 0:17:51.200 Danielle di Martino Booth made it here. 0:17:51.119 --> 0:17:54.760 To the studio. She's the CEO, Chief Strategistic QI Research. 0:17:55.119 --> 0:17:57.800 You came in from LaGuardia. Not a quick trip today. 0:17:57.800 --> 0:17:58.919 You need a police escort. 0:17:59.080 --> 0:18:02.719 Yeah, you need to dissk like in a helicopter press. Well, 0:18:02.760 --> 0:18:04.760 we know a guy that could help us out next. 0:18:04.960 --> 0:18:07.480 This is not the right time to like break a leg. Really, 0:18:07.760 --> 0:18:09.400 this is not the right time to need an ambulance 0:18:09.440 --> 0:18:10.240 in Matt. 0:18:10.080 --> 0:18:12.520 Forget about it, particularly on the East side. All right, Danielle, 0:18:12.840 --> 0:18:15.960 you were just talking about housing market. Give us some 0:18:16.000 --> 0:18:18.000 of those stats you were talking about, because Matt and 0:18:18.000 --> 0:18:20.240 I both now are real estate moguls. 0:18:20.720 --> 0:18:20.920 Home. 0:18:21.080 --> 0:18:24.040 Oh, yes, we own property. We own property. 0:18:24.720 --> 0:18:27.240 Exactly what are you seeing in the real estate market? 0:18:27.240 --> 0:18:28.439 Does that mean you topped the market? 0:18:29.080 --> 0:18:29.520 You know what? 0:18:29.560 --> 0:18:34.040 We're seeing is is kind of this this supply over 0:18:34.119 --> 0:18:36.400