WEBVTT - Goldman CEO Sounds Warning on Pay, Job Cuts 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.440 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanobek. We're here every day bringing 0:00:07.280 --> 0:00:09.799 you the latest news from the world of business and finance, 0:00:09.840 --> 0:00:13.640 plus technology, politics, economics, all partnising the power of Business 0:00:13.640 --> 0:00:17.119 Week reporters and editors, not to mention our journalists and 0:00:17.120 --> 0:00:19.599 analyst in more than one and twenty countries. You can 0:00:19.640 --> 0:00:23.200 download Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot com. 0:00:23.400 --> 0:00:25.120 You can also listen to our radio show at two 0:00:25.160 --> 0:00:27.840 pm Eastern Time on Bloomberg Radio or watch us on 0:00:27.880 --> 0:00:31.479 YouTube and now also on Bloomberg Quick Take. We just 0:00:31.520 --> 0:00:33.840 talked about the big bank CEOs, Tim in a big way. 0:00:33.880 --> 0:00:35.960 We are getting a good feel of the outlook from 0:00:36.000 --> 0:00:38.519 them thanks to that Goldman sax conference. If there's a 0:00:38.560 --> 0:00:41.120 one sort of theme that drives them together, it's sort 0:00:41.159 --> 0:00:44.680 of a downbeat note about the economic outlook, Goldman sax 0:00:44.720 --> 0:00:47.800 Group CEO David Solomon saying that smaller bonuses and even 0:00:47.800 --> 0:00:50.360 potential job cuts could come as no surprise. He didn't 0:00:50.360 --> 0:00:52.680 make those comments Carol at the Goldman sax Us Financial 0:00:52.680 --> 0:00:55.560 Services Conference here in New York City, speaking exclusively to 0:00:55.560 --> 0:00:58.320 our Bloomberg Shanali bassk alright, so covering the event as well, 0:00:58.320 --> 0:01:00.520 bloom Big News finance reporter Shree not or John he 0:01:00.680 --> 0:01:04.240 is inter Bloomberg Interactive Broker Studio. Sure, so, first of all, 0:01:04.800 --> 0:01:06.840 we're all talking about it, and a good reason. These 0:01:07.080 --> 0:01:10.920 great exclusive interviews by Bloomberg Sinnelli bask It does feel 0:01:10.959 --> 0:01:13.479 like they're kind of Debbie downers most of these guys. 0:01:13.760 --> 0:01:15.840 There's certainly no ifs and buds out here. We've had 0:01:15.840 --> 0:01:18.920 a parade of CEOs with talking to Bloomberg today and 0:01:18.959 --> 0:01:22.640 it's clear from their tone and what their messaging has 0:01:22.720 --> 0:01:25.040 been that there are a lot more cautious. In fact, 0:01:25.120 --> 0:01:28.560 David Solomon, the CEO of Goldman Sex, made a point 0:01:28.600 --> 0:01:31.880 to say that while his firm Zone economists believe that 0:01:32.560 --> 0:01:34.560 we will be able to avoid a recession in the 0:01:34.680 --> 0:01:37.520 US narrowly next year, he says he himself is a 0:01:37.560 --> 0:01:40.480 little more pessimistic, and that was clear in the messaging 0:01:40.520 --> 0:01:43.759 he put out there, that the talk of possible additional 0:01:44.400 --> 0:01:49.000 job cuts, the need to pay people down, it's not 0:01:49.320 --> 0:01:52.160 what you were hoping to hear. And one and saying listen, 0:01:52.160 --> 0:01:53.840 guys were worried, we can't pay peop a lot this year, 0:01:54.920 --> 0:02:00.280 my first such a cynic that's a factor, right, because 0:02:00.400 --> 0:02:04.920 we do know that, especially bloombergree doesn't know that Goldman 0:02:05.080 --> 0:02:08.040 has begun compensation conversations, and it is clear that even 0:02:08.080 --> 0:02:10.560 those who performed really well this year will be paid 0:02:10.600 --> 0:02:13.400 down because the entire firm as a whole has not 0:02:13.600 --> 0:02:17.200 done as well as twenty one was an exceptional year. 0:02:18.240 --> 0:02:20.640 But I am going to run a little bit further 0:02:20.680 --> 0:02:23.919 away from the cynical lane only because what he said 0:02:25.360 --> 0:02:28.200 has been echoed by almost everyone else who spoken with 0:02:28.240 --> 0:02:30.960 Bloomberg today. And look at the reports out of Morgan Stanley. 0:02:30.960 --> 0:02:33.040 They're cutting about two thousand jobs to percent of their 0:02:33.040 --> 0:02:36.040 work force, not a whole lot, but again, job cuts 0:02:36.040 --> 0:02:38.639 in the news cannot be very fun to hear. Let's 0:02:38.680 --> 0:02:41.440 go to his words, because Goldman Sachs CEO David Solomon 0:02:41.520 --> 0:02:44.760 spoken speaking exclusively to Bloombergstionnelly Bastik on the sidelines of 0:02:44.840 --> 0:02:47.760 the Goldman sax Us Financial Services conference in the city 0:02:47.800 --> 0:02:51.120 earlier today. I'll check out what he told her. We're 0:02:51.120 --> 0:02:54.000 at a very uncertain time, and uncertain time given we're 0:02:54.080 --> 0:02:57.680 changing monetary and economic conditions, very very quickly, and that's 0:02:57.680 --> 0:03:00.720 certainly having an impact of slowing down economic activity. And 0:03:00.760 --> 0:03:03.440 so if you're running a big financial services firm, I 0:03:03.480 --> 0:03:06.880 think you have to assume that we have some bumpy 0:03:06.919 --> 0:03:09.880 times ahead. We could see her session in also, and 0:03:09.880 --> 0:03:11.520 so I think you've got to be cautious and prepare. 0:03:12.080 --> 0:03:14.440 That was Goldman sax CYO David Solomon from the firm's 0:03:14.480 --> 0:03:16.880 US Financial Services conference here in New York City. Check 0:03:16.880 --> 0:03:19.000 out more from that interview on the Bloomberg Terminal and 0:03:19.080 --> 0:03:21.600 at Bloomberg dot com. Carol, you're got a smile on 0:03:21.600 --> 0:03:24.560 your face, thinking of bet Davis, fasten your seatbelts, it's 0:03:24.560 --> 0:03:26.360 going to be a bumpy night or bumpy ride like 0:03:26.560 --> 0:03:30.600 that kind of ominous tone. But I do think about 0:03:30.720 --> 0:03:33.359 this is something we have said Tree. What these big 0:03:33.360 --> 0:03:35.160 banks CEOs have to say is we get ready for 0:03:35.200 --> 0:03:36.920 the next round of earnings, as we get ready for 0:03:36.920 --> 0:03:39.520 the next and last FED meeting of the year. I mean, 0:03:39.640 --> 0:03:42.400 you've been covering this sector when they are so negative. 0:03:42.440 --> 0:03:46.640 Does it usually pan out to some extent? Yes, because 0:03:46.720 --> 0:03:49.560 I do think that they use these occasions, these public 0:03:49.560 --> 0:03:53.040 appearances to try and signal and flag what is ahead. 0:03:53.040 --> 0:03:56.280 So they are preparing us for what's ahead. But I'll 0:03:56.320 --> 0:03:58.560 tell tell you, and you guys tell me whether this 0:03:58.640 --> 0:04:00.800 reader is right aroun we're actually to your readers. To me, 0:04:00.880 --> 0:04:03.880 the most fascinating thing in that interview was David Solomon 0:04:03.960 --> 0:04:06.400 talking about this idea that it should come as no 0:04:06.480 --> 0:04:08.760 surprise to anyone that they have to pay people down 0:04:08.800 --> 0:04:12.640 this year. That is going to happen definitively, while also 0:04:12.800 --> 0:04:16.600 repeatedly saying in that interpret in the remarks, not not 0:04:16.640 --> 0:04:19.200 necessarily record, but this idea that there is this massive 0:04:19.240 --> 0:04:22.560 competition for talent. What's the point of saying that. Is 0:04:22.640 --> 0:04:25.320 that him signaling that there is still room for tinkering 0:04:25.360 --> 0:04:28.359 and he could still potentially tweak the compensation pool to 0:04:28.360 --> 0:04:30.960 make it look better. Or is he telling people who 0:04:31.000 --> 0:04:34.160 are complaining and whining, if you really want to complain, 0:04:34.240 --> 0:04:36.919 I'm telling you the pay pool is going down. The 0:04:37.000 --> 0:04:39.200 market out there is great. You're free to go ahead 0:04:39.200 --> 0:04:40.919 and find a job out there. I don't know what 0:04:40.960 --> 0:04:42.839 do you guys make of it. That's why I like 0:04:42.960 --> 0:04:44.560 that sort of cynical view of it. But I do 0:04:44.680 --> 0:04:49.039 wonder how you explain the distance between what the firm's 0:04:49.080 --> 0:04:53.000 own economists say versus what the CEO says. That's it's 0:04:53.000 --> 0:04:55.000 interesting that now I'm the cynic in house. I thought 0:04:55.000 --> 0:04:58.440 that was Carol, so that's unfortunate. But I know, well, 0:04:58.600 --> 0:05:04.440 you know it's I will say this time, though, I 0:05:04.480 --> 0:05:09.000 think David Solomon's always had this posture of being more 0:05:09.120 --> 0:05:12.640 cautious even when things are going great through the run up. 0:05:12.640 --> 0:05:15.120 We've seen in the post pandemic times. Every quarter David 0:05:15.120 --> 0:05:17.720 Solomon would come out and say, it has been great. 0:05:17.880 --> 0:05:20.520 We're not certain that that pace can be maintained next quarter. 0:05:20.720 --> 0:05:22.880 And yet quarter of the quarter off the quarter these 0:05:22.880 --> 0:05:26.080 big banks performed really well, and Goldman Sax in particular. 0:05:26.640 --> 0:05:29.279 So I personally, having observed him closely for four years, 0:05:29.279 --> 0:05:31.200 and not that surprised that he would strike a more 0:05:31.279 --> 0:05:34.400 cautious note than his economists. A little surprised that he 0:05:34.560 --> 0:05:36.960 is going away from the script because he tends to 0:05:37.000 --> 0:05:39.080 stick to what the economists say and often says, I 0:05:39.080 --> 0:05:41.800 don't have a crystal ball. But the fact that he 0:05:42.000 --> 0:05:45.200 was willing to be a little more downbeat was easily 0:05:45.240 --> 0:05:47.280 explained and everything else he said in the interview. With 0:05:47.320 --> 0:05:49.680 the idea of the pressure on cost the cost cuts 0:05:49.720 --> 0:05:54.080 the commentary had on the paper. That kind of shows 0:05:54.160 --> 0:05:56.920 you why he would be more cautious. All right. Well, 0:05:57.080 --> 0:06:00.600 having said that and speaking of cautious tones, ar Sinali 0:06:00.640 --> 0:06:03.080 Bossak also caught up at the conference with the CEO 0:06:03.440 --> 0:06:06.320 Bank of America Brian Morninghan. Great clue in terms of 0:06:06.320 --> 0:06:08.919 how consumers are feeling as well. So here's what he 0:06:08.960 --> 0:06:12.360 had to say about inflation and higher rates. The evidence 0:06:12.360 --> 0:06:14.960 shows that, yes, the economy is being slowed by the 0:06:15.080 --> 0:06:18.520 higher interest rates, by the fact that the inflation is 0:06:18.520 --> 0:06:21.160 eating up more of a person savings. They need to 0:06:21.160 --> 0:06:22.960 get that under control. That means higher interest rates. But 0:06:22.960 --> 0:06:24.400 on the other hand, you've seen them slow down which 0:06:24.400 --> 0:06:26.159 I had to put less price pressure. That means they 0:06:26.200 --> 0:06:28.000 could slow down. So that's going to be the debate. 0:06:28.160 --> 0:06:29.640 I think we need a few more months to see 0:06:29.760 --> 0:06:32.359 whether it's just a trend or not. All right. Of 0:06:32.360 --> 0:06:34.560 course that's the Bank of America CEO Brian Mornahan, who 0:06:34.600 --> 0:06:36.400 also said that they had to slow down hiring with 0:06:36.520 --> 0:06:41.400 fewer workers leaving their managing headcount moving investment bankers. Uh, 0:06:41.480 --> 0:06:47.200 they're hiring in private banking. So yeah, like I know, 0:06:47.360 --> 0:06:49.640 I'm just wondering what this means. I don't know, you 0:06:49.720 --> 0:06:52.679 added up. You cover this space, we will get earnings 0:06:52.720 --> 0:06:55.960 come January. Um, how do we take this forward? This 0:06:56.120 --> 0:06:58.560 tells you all of these executives, all of these senior 0:06:58.600 --> 0:07:04.200 manages are deep in daily weekly meetings planning for the 0:07:04.320 --> 0:07:08.080 year ahead and what they're seeing. They're not quite thrilled 0:07:08.240 --> 0:07:10.240 with what's been put in front of them, and that 0:07:10.360 --> 0:07:13.400 is reflected in their messaging right now. I don't mean 0:07:13.440 --> 0:07:15.400 to ask you why the markets are moving, but I'll 0:07:15.480 --> 0:07:17.400 go the same question that I said to Jas. I mean, 0:07:17.440 --> 0:07:20.160 it seemed like these comments have a real effect on 0:07:20.160 --> 0:07:22.600 the way that traders are thinking about sentiment today. They 0:07:22.640 --> 0:07:24.840 should because look at where the comments are coming from. 0:07:24.880 --> 0:07:27.840 The CEO of Bank America, one of the largest consumer 0:07:27.920 --> 0:07:31.080 banking operations in the country. The CEO of Goldman Sachs, 0:07:31.200 --> 0:07:35.040 the most important Wall street firm out there. These people 0:07:35.120 --> 0:07:39.040 have a real pulse for what consumers are doing, what 0:07:39.600 --> 0:07:43.680 the average American out there is doing, and also what 0:07:43.840 --> 0:07:47.320 the big institutions and the big companies are doing. If 0:07:47.400 --> 0:07:50.560 they don't have a view into what the year ahead 0:07:50.600 --> 0:07:52.679 looks like, or at least the weeks and months ahead, 0:07:52.800 --> 0:07:55.240 that no one does, and the fact that they are 0:07:55.400 --> 0:07:59.560 willing to summarize all their conversations and rapid in this 0:08:00.120 --> 0:08:04.880 uh a ball of negativity. I have to assume that 0:08:05.040 --> 0:08:08.160 place some rule in the market price action. And then 0:08:08.200 --> 0:08:10.400 you do have morning and saying, you know, consumers still 0:08:10.400 --> 0:08:12.360 spending more than a year ago rate of growth and 0:08:12.440 --> 0:08:14.480 spending those starting too slow, and then you do wonder 0:08:14.800 --> 0:08:17.160 ultimately how they're paying for it, so whether they'll add 0:08:17.240 --> 0:08:19.800 up um Street. Thank you so much. I really appreciate it. 0:08:19.840 --> 0:08:21.640 We knew and this event was going on. We wanted 0:08:21.640 --> 0:08:24.000 to check in with you and see what David Solomon's 0:08:24.040 --> 0:08:26.480 comments and the others had to say and what it 0:08:26.520 --> 0:08:29.119 all meant. Tree not a rag and he's financial reporter 0:08:29.120 --> 0:08:31.920 at Bloomberg News. Here in our interactive broker studio KBW 0:08:32.040 --> 0:08:34.560 Bank Index. By the way, it is down for one, two, 0:08:34.840 --> 0:08:36.600 three or four days in a row, and it's down 0:08:36.679 --> 0:08:42.440 almost nine percent in that time. This is Bloomberg. This 0:08:42.720 --> 0:08:46.440 is Bloomberg Business Week with Carol Masser and Bloomberg Quick 0:08:46.480 --> 0:08:50.360 Takes Tim Stinovic on Bloomberg Radio. Most read story in 0:08:50.360 --> 0:08:53.000 the Bloomberg Today it is about the Yale professor who 0:08:53.040 --> 0:08:55.640 became an enemy of the Russian state over a list. 0:08:55.760 --> 0:08:59.200 He's a guest that we've had on this individual on 0:08:59.240 --> 0:09:01.960 our air in past, and the story is in the 0:09:01.960 --> 0:09:04.160 newest shoe of Bloomberg business Week with more. We're joined 0:09:04.200 --> 0:09:07.240 by Bloomberg Business Week contributor Rob Mandelbaum. He joins us 0:09:07.280 --> 0:09:10.480 on the phone from Brooklyn. Joining us along with him 0:09:10.520 --> 0:09:13.959 is Bloomberg Business Week Senior editor demetric Casseds. She joins 0:09:13.960 --> 0:09:17.240 his via zoom from New York City. This is incredible. 0:09:17.360 --> 0:09:19.679 I know we we've Caroline, I've spoken several times to 0:09:19.800 --> 0:09:22.480 Jeffrey Snenfeld. You know, anyone who listens to our program 0:09:22.559 --> 0:09:25.600 or watches Bloomberg Television certainly knows his face, knows his voice. 0:09:26.360 --> 0:09:31.319 How did he find himself, Demitra just a few months ago? Uh? 0:09:31.559 --> 0:09:37.200 The enemy, an enemy of the Russian state. Sure, um, well, 0:09:37.240 --> 0:09:40.400 you know he You know him and many people know him. 0:09:40.760 --> 0:09:44.280 Given so much work than he does with respective CEOs 0:09:44.320 --> 0:09:47.320 and leadership in the round tables, he has the ear 0:09:47.360 --> 0:09:51.400 of many CEOs around the world and have been contacted 0:09:51.480 --> 0:09:53.960 if I'm not mistaken by some folks saying, you know, 0:09:54.480 --> 0:09:56.280 this is something we need to look at, is which 0:09:56.360 --> 0:09:59.079 what what companies are pulling out of Russia and what 0:09:59.120 --> 0:10:02.400 companies are staying behind and how do we how will 0:10:02.440 --> 0:10:06.920 we make these distinctions? Right after Russia invaded Ukraine. UM 0:10:07.200 --> 0:10:10.000 So he got a little bit of play about this, 0:10:10.040 --> 0:10:14.400 But as as we expanded our look at business school stories, 0:10:15.000 --> 0:10:18.439 he became somebody that I was focused on, and I thought, well, 0:10:18.960 --> 0:10:22.360 I'm curious to know what what Jeff Sonnenfeld was up to. 0:10:22.480 --> 0:10:25.240 And I saw little snippets about some of this work, 0:10:25.280 --> 0:10:28.319 but nothing really that dealt deeply into how this all 0:10:28.800 --> 0:10:32.720 became such a big list and became such a powerful list. Um. 0:10:32.840 --> 0:10:36.079 And that is how he got onto my radar with this. 0:10:36.240 --> 0:10:39.160 And then UM I contacted Rob, who has been a 0:10:39.200 --> 0:10:42.640 regular contributor to Business Week UM and asked him that 0:10:42.760 --> 0:10:44.880 he would be interested in taking a closer look. And 0:10:44.920 --> 0:10:47.360 I think that from the first minute, we'll let Rob 0:10:47.400 --> 0:10:49.600 answer this, but I think he was intrigued given that 0:10:50.440 --> 0:10:53.000 there were certain aspects of the story that had not 0:10:53.080 --> 0:10:56.520 been covered at all out there and that really were 0:10:56.640 --> 0:10:59.679 very meaningful to again, like what is it that this 0:10:59.720 --> 0:11:02.520 list do? Right? What kind of power does the whale? 0:11:02.640 --> 0:11:07.679 So I will let Rob talk about that, all right? Hi? Hi, 0:11:10.360 --> 0:11:12.959 Oh you would like me to talk about it? Yeah, Well, 0:11:12.960 --> 0:11:14.640 tell us about you get this assignment and you start 0:11:14.679 --> 0:11:17.520 looking into this story on Jeff Snenfeld, tell us what 0:11:17.600 --> 0:11:20.160 you found out. Well, I mean the first thing I 0:11:20.240 --> 0:11:24.920 found out was that, um, this was that that the 0:11:25.000 --> 0:11:31.080 list itself was this UM what was actually something that 0:11:31.200 --> 0:11:36.160 came from his sort of correspondence with other with c 0:11:36.200 --> 0:11:38.600 e O s. It wasn't something that he started to do. 0:11:39.160 --> 0:11:42.080 It was something that they asked him to do, because 0:11:42.920 --> 0:11:45.800 these were CEOs who had pulled out of Russia and 0:11:45.840 --> 0:11:50.760 they felt like, um, the business media, um, but not 0:11:50.840 --> 0:11:55.280 Bloomberg business Week were was conflating what they were doing 0:11:55.360 --> 0:11:58.560 actually pulling out with you know, other companies that were 0:11:58.600 --> 0:12:01.320 sort of, you know, sending thoughts and prayers to the 0:12:01.400 --> 0:12:04.360 Ukrainian people, but you know, counting the Russian roubles and 0:12:04.360 --> 0:12:06.440 that sort of thing. And and so that's where the 0:12:06.440 --> 0:12:08.320 list started for him, was just sort of trying to 0:12:08.360 --> 0:12:12.000 figure out who was actually leaving Russia and and who 0:12:12.080 --> 0:12:14.440 was sort of making noise like they were leading leaving 0:12:14.520 --> 0:12:18.200 Russia but but not really. It's pretty incredible because you know, 0:12:18.240 --> 0:12:21.240 sani Felt is certainly Professor son Felt was certainly associated 0:12:21.280 --> 0:12:23.120 with the list, as you right, But at the same 0:12:23.120 --> 0:12:25.320 time he's got a research assistant and then all of 0:12:25.320 --> 0:12:29.360 the volunteers who ended up helping with this list, so 0:12:29.360 --> 0:12:31.600 so who actually worked on it and work is working 0:12:31.600 --> 0:12:34.720 on it. Rob There were at one point up to 0:12:35.000 --> 0:12:37.640 forty two I think other people working on it, and 0:12:37.679 --> 0:12:41.520 many of them were undergrads at Yale and other schools. 0:12:41.520 --> 0:12:44.560 They were people like a guy I talked to named 0:12:44.800 --> 0:12:49.720 Frank Sokovowski, and he is a was a freshman at 0:12:49.760 --> 0:12:52.760 the time. He was studying economics. He had actually heard 0:12:52.760 --> 0:12:56.320 about some of Sonofeld's earlier work sort of organizing c 0:12:56.360 --> 0:13:00.400 e O s after election to sort of protest, you know, 0:13:00.960 --> 0:13:03.520 the overturning of the election, and he had heard about 0:13:03.559 --> 0:13:06.040 that even before he got to New Haven and resolved 0:13:06.040 --> 0:13:09.000 to work with Salenfeld and it find it happened that 0:13:09.080 --> 0:13:12.400 this was the project, and you know he's from Poland, 0:13:13.080 --> 0:13:17.080 uh and so very close to Ukraine. He ended up 0:13:17.160 --> 0:13:20.360 getting so involved with it that he reschedules his classes, 0:13:20.880 --> 0:13:22.960 you know, for the spring, some of them for the summer, 0:13:23.000 --> 0:13:24.520 so he could work on the list in the spring, 0:13:24.840 --> 0:13:27.200 and he recruited a bunch of other students at Yale 0:13:27.480 --> 0:13:30.200 and at other schools to work on the list for him, 0:13:30.240 --> 0:13:33.120 and a lot of those people were Poles who spoke 0:13:33.200 --> 0:13:37.400 not just Polish, but Russian. And you know that gave 0:13:37.840 --> 0:13:40.080 this team and you know, an inside edge, you know, 0:13:40.120 --> 0:13:43.359 able to analyze Russian material that doesn't normally get translated. 0:13:43.440 --> 0:13:44.800 I want to bring to meet her back in in 0:13:44.840 --> 0:13:47.319 a second, but before you do, Rob, So, how did 0:13:47.320 --> 0:13:52.160 he ultimately then become um an enemy of the Russian 0:13:52.320 --> 0:13:55.080 state as a result. It's just where they so ticked 0:13:55.120 --> 0:13:57.640 off that he was accumulating this list. Why he Well, 0:13:57.800 --> 0:14:01.080 he had started with the list and and and then 0:14:01.080 --> 0:14:04.360 it became yeah, it was mostly the list, but then 0:14:04.400 --> 0:14:08.240 he started doing some research and he had published research 0:14:08.280 --> 0:14:11.679 I think in late May, uh indicating you know that 0:14:11.760 --> 0:14:15.640 if you were a company pulling out of Russia, Uh, 0:14:16.120 --> 0:14:19.080 you saw a benefit to your stock price or you 0:14:19.160 --> 0:14:21.480 paid less for debt, Like there was a market reward 0:14:22.240 --> 0:14:24.520 for pulling out of Russia that you could sort of 0:14:24.560 --> 0:14:28.760 tie to the announcement that you were leaving Russia. And 0:14:28.920 --> 0:14:32.280 he ended up on a stop list. Uh. This was 0:14:32.320 --> 0:14:35.200 in June of people who weren't allowed to go to Russia. 0:14:35.640 --> 0:14:37.360 I don't think that bothered him too much, you know, 0:14:37.360 --> 0:14:39.160 I don't think he was planning to go to Russia 0:14:39.280 --> 0:14:41.800 any type of suit. They're about a thousand people on 0:14:41.840 --> 0:14:44.120 that list. Now at the time there were far fewer. 0:14:44.280 --> 0:14:45.680 Hey he I mean he wears it as a badge 0:14:45.720 --> 0:14:49.280 of honor, rob Oh, he does. But at the same time, 0:14:49.320 --> 0:14:51.080 there's a little bit of nuance to it because he 0:14:51.120 --> 0:14:53.840 won't be the first lady above Mitch McConnell exactly, And 0:14:53.960 --> 0:14:56.080 he won't. But he won't come out and say that. 0:14:56.160 --> 0:14:59.400 He thinks it's a necessarily a good thing. Like he's 0:14:59.400 --> 0:15:02.240 not gonna come on say that companies should leave, right 0:15:02.240 --> 0:15:06.600 he kind of he stops almost at almost almost saying 0:15:06.640 --> 0:15:09.840 that it's a very semantic Yes, it's it's a very 0:15:09.880 --> 0:15:14.640 semantic distinction. But he, uh, he won't. You know, you 0:15:14.680 --> 0:15:16.520 can you can press him and press him, and he 0:15:16.560 --> 0:15:21.520 won't say, you know, uh, companies should leave Russia. Uh, 0:15:21.880 --> 0:15:24.840 at least not officially, you know. But he'll call, you know, 0:15:25.000 --> 0:15:26.520 as you talked to him about it, he'll call those 0:15:26.560 --> 0:15:30.320 companies that did courageous, you know. And I mean the 0:15:30.320 --> 0:15:34.560 whole idea that that um, you know, companies that leave 0:15:34.640 --> 0:15:38.040 Russia get an A grade and companies that stay get 0:15:38.040 --> 0:15:41.840 an F grade have implications. It seems to me right, Hey, 0:15:41.920 --> 0:15:44.160 Dmitra really quick, just got about twenty seconds left here. 0:15:44.360 --> 0:15:45.560 What I love is I feel like there's going to 0:15:45.600 --> 0:15:47.440 be a second story for you guys in the Business 0:15:47.480 --> 0:15:51.720 Week team, and Rob, because he's got Sanenfeld has another target, 0:15:51.960 --> 0:15:55.920 Saudi Arabia. Just quickly twenty seconds you guys thinking about this. 0:15:56.000 --> 0:15:59.720 Perhaps we are thinking about it. We're looking at it. 0:15:59.760 --> 0:16:02.360 I mean, as I said, you know, with um this 0:16:02.440 --> 0:16:04.840 is interesting because it started as a remit to kind 0:16:04.840 --> 0:16:09.240 of expand how we're covering the school and its perfectly highlights, 0:16:09.320 --> 0:16:12.480 just like the very interesting work that happens at many 0:16:12.480 --> 0:16:15.040 of these institutions. So we're thinking about it. I'm not 0:16:15.080 --> 0:16:16.920 quite sure what it's gonna lead to you, but what 0:16:17.360 --> 0:16:19.080 you know, stay tuned. Well it's gonna lead to I 0:16:19.080 --> 0:16:21.000 think us to reach out to Jeffson and Feld again 0:16:21.040 --> 0:16:23.120 and getting him back on. Guys, thank you so much 0:16:23.160 --> 0:16:26.080 to meet yours. And She is senior editor at Bloomberg News, 0:16:26.440 --> 0:16:29.760 joining us from New York City. Rob Mandelbaum, he's freelance 0:16:29.800 --> 0:16:32.760 contributor to Bloomberg Business Week on the phone from Brooklyn. 0:16:32.800 --> 0:16:34.520 This is among our most read stories, and it's in 0:16:34.560 --> 0:16:37.200 the upcoming new issue of Bloomberg Business Week. This is 0:16:37.240 --> 0:16:53.000 Bloomberg Radio. I'm bro journal now, but you let me drive? No, no, please, 0:16:53.120 --> 0:16:59.640 I'll do. I want to drive. It's a good question. 0:17:00.040 --> 0:17:08.720 Good drive. This is the Drive to the close on 0:17:08.840 --> 0:17:11.520 Bluebird Radio. All right, just under eight minutes left in 0:17:11.520 --> 0:17:14.000 today's trading session. Shortly we'll check in with our TV 0:17:14.119 --> 0:17:18.119 colleagues talk about pict trade. Oh, I'm we got like 0:17:18.359 --> 0:17:21.760 eighteen minutes. Yeah, we got like eighteen minutes left, Carol. Yeah, sorry, 0:17:21.960 --> 0:17:23.480 it's been that kind of day. It feels like it's 0:17:23.520 --> 0:17:26.600 moving fast and furious. Having said that, as Charlie mentioned, 0:17:26.880 --> 0:17:30.280 we're just surrounding around the worst levels of our session 0:17:30.320 --> 0:17:32.080 when it comes to the equity chair. But pretty broad 0:17:32.119 --> 0:17:34.639 based only utilities. When you look at the major industry 0:17:34.640 --> 0:17:38.359 groups in the spire, actually showing some green today, and 0:17:38.359 --> 0:17:41.520 it's not much. It's broad based selling. A real risk 0:17:41.600 --> 0:17:43.720 off day today, it's time for drive to the clothes. 0:17:43.760 --> 0:17:46.760 We're doing doing that today with Tony Roth What Wilmington's 0:17:46.760 --> 0:17:50.719 Trust and Investment Advisors, the investment advisory arm of Wilmington's 0:17:50.720 --> 0:17:53.080 Trust and M and T Bank joining us via zoom 0:17:53.200 --> 0:17:55.760 in Philadelphia. Good to have you with us, Tony how 0:17:55.800 --> 0:17:58.840 are you. I'm good, Jim, and Carol, thanks for having 0:17:58.840 --> 0:18:01.200 me well, thanks so much for joining us. I'm thinking 0:18:01.240 --> 0:18:04.240 about the program that Carol and I did last Wednesday 0:18:04.280 --> 0:18:06.320 after we heard from FED Chair J Powell, and the 0:18:06.320 --> 0:18:10.240 mood that we saw inequities after investors pretty much solidified 0:18:10.720 --> 0:18:13.120 the idea that December, you know, that rate heck that's 0:18:13.119 --> 0:18:15.000 coming next week is going to be fifty basis points 0:18:15.000 --> 0:18:18.480 instead of se uh. Look at the shift in tone 0:18:18.960 --> 0:18:21.159 since last Friday and the way that we've seen the 0:18:21.200 --> 0:18:24.479 sp down now for four days in a row. How 0:18:24.480 --> 0:18:28.760 do you explain it, Tony? I think it's actually surprising 0:18:28.800 --> 0:18:30.840 that it's taken so long to get to these levels 0:18:30.920 --> 0:18:33.920 of draw downs in the market when you can when 0:18:33.920 --> 0:18:36.720 you consider the labor market report that we had on Friday, 0:18:36.760 --> 0:18:38.520 so we did. We were down on Friday, but not 0:18:38.560 --> 0:18:42.359 by a lot, right, And when you consider how bad 0:18:42.400 --> 0:18:44.879 the labor report was, and then we had the I 0:18:45.080 --> 0:18:48.080 s M Services Report, which is really a very loser 0:18:48.200 --> 0:18:50.399 bad in meaning it was a strong report and wage 0:18:50.400 --> 0:18:56.199 and wage pressure, wage pressure, significantly lower participation, right. And 0:18:56.200 --> 0:18:58.679 then on the I s M Services Report, which is 0:18:58.720 --> 0:19:02.200 basically another view into wages, we saw a very strong 0:19:02.280 --> 0:19:05.640 services report, and the market is dealing with the reality 0:19:05.720 --> 0:19:09.560 that we are going to have a persistent inflation problems, 0:19:09.560 --> 0:19:12.840 specifically within the wage arena, and that is going to 0:19:12.920 --> 0:19:15.800 have an impact on where equities trade over the next 0:19:15.840 --> 0:19:19.480 probably two to four months. And equities are probably priced 0:19:19.520 --> 0:19:21.600 too high right now. Um, we need to move not 0:19:21.640 --> 0:19:23.480 just a little bit lower, but probably a lot lower. 0:19:24.480 --> 0:19:27.040 And and is that how you feel about across all 0:19:27.080 --> 0:19:30.440 of the equity landscape or there's certain names in particular 0:19:30.520 --> 0:19:34.520 that you think maybe provide some opportunity in this environment. 0:19:35.960 --> 0:19:38.199 Well on relative basis, there are things that we like. 0:19:38.400 --> 0:19:42.480 We like some healthcare areas, we actually like some some financials. 0:19:43.040 --> 0:19:45.200 Um we could tee to like energy in this environment, 0:19:45.240 --> 0:19:48.359 we like materials. But in an environment where we have 0:19:48.440 --> 0:19:52.560 higher rates and where profitability UH and price and power 0:19:52.600 --> 0:19:55.320 are going to matter, selectivity is much more important than 0:19:55.359 --> 0:19:57.440 what we've seen in many, many years. To take healthcare 0:19:57.480 --> 0:20:01.679 for example, healthcare is a very variegated space. So you 0:20:01.720 --> 0:20:05.480 have pharmaceutical companies which are almost like staples, but there's 0:20:05.480 --> 0:20:08.080 staples that are growing at a nice pace. And then 0:20:08.160 --> 0:20:10.760 you have medical device companies which are like big growth 0:20:10.760 --> 0:20:13.119 technology names which are not going to do well in 0:20:13.119 --> 0:20:17.080 this environment, and so it really requires very careful selection 0:20:17.119 --> 0:20:19.639 as you go through the this environment. But that's not 0:20:19.680 --> 0:20:21.560 to say that anything in the equity space is going 0:20:21.600 --> 0:20:25.080 to hold up particularly well over the next two months 0:20:25.200 --> 0:20:27.320 or so as we deal with the reality of a 0:20:27.359 --> 0:20:29.840 likely recession. And that also doesn't mean that we like 0:20:29.920 --> 0:20:32.479 bonds either, because we don't think bonds are particularly well 0:20:32.520 --> 0:20:34.560 positioned at the moment. And I could get into that 0:20:34.600 --> 0:20:37.600 if you like, talk a little bit about that. Well, 0:20:37.600 --> 0:20:39.400 when you look at the bond market right now, we're 0:20:39.480 --> 0:20:42.120 relatively three fifty on the tenure, and you think about 0:20:42.160 --> 0:20:45.359 where inflation is and have persistent inflation is going to be, 0:20:45.440 --> 0:20:47.520 which we think it's gonna come down, but it's gonna 0:20:47.560 --> 0:20:49.680 get stuck probably around three and a half percent or 0:20:49.720 --> 0:20:52.520