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Speaker 1: Welcome to the Bloomberg P and L Podcast. I'm pim Fox.

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Speaker 1: Along with my co host Lisa Abramowitz. Each day we

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Speaker 1: bring you the most important, noteworthy, and useful interviews for

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Speaker 1: you and your money, whether you're at the grocery store

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Speaker 1: or the trading floor. Find the Bloomberg P and L

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Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Crude

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Speaker 1: oil contracts are higher by nearly two on the NIMEX

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Speaker 1: right now Here to tell us more about the oil

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Speaker 1: complex is Stephen Shorky is the president of the Short Group.

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Speaker 1: Joining us from Villanova, Pennsylvania. Stephen shork always a pleasure.

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Speaker 1: Let's begin with news today about Saudi Arabia curbing output

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Speaker 1: last month. This is according to OPEC delegates, and also

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Speaker 1: the trade dispute that now has become political between Saudi

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Speaker 1: Arabia and Canada. What does this mean for oil prices? Well,

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Speaker 1: if we're left just to the seasonality of it all

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Speaker 1: him right now, oil demand in the United States, if

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Speaker 1: it has not peaked for the year, it shall peak

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Speaker 1: over the next couple of months, excuse me, a couple

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Speaker 1: of weeks. That is to say so, we typically see

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Speaker 1: the highest demand for crudal. At the peak of the summer,

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Speaker 1: we demand for gasolene is at its strongest. So as

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Speaker 1: we transition into August, Now, of course we look ahead

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Speaker 1: into September, we're not going to the shore, we're not

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Speaker 1: going to the Poconos anymore. The kids are back at school,

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Speaker 1: so demand for gasolene falls, and then demand for crudal

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Speaker 1: falls precipitously as we go into the fall maintenance season. Now, remember,

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Speaker 1: the refinery is the only guy in the world that

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Speaker 1: actually buys crudal to use it, and their consumption of

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Speaker 1: crudal drops tremendously in the months of September and October.

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Speaker 1: And based on the published UH schedules for maintenance coming

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Speaker 1: this fall, this maintenance season will be extraordinarily high. So

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Speaker 1: we can expect to see a sharp drop off in

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Speaker 1: demand for crude all in the months ahead. So what

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Speaker 1: does this mean for price? Well, intuitively, if you're at

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Speaker 1: the peak of the season and we're already well off prices,

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Speaker 1: that is, are already well off their highs and we're

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Speaker 1: only looking at weakening demand in the months ahead, that

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Speaker 1: would imply lower prices in the nearby future. Okay, So

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Speaker 1: does this mean that the best trade is to play

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Speaker 1: on investors fears of increased prices. That's going the other way,

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Speaker 1: that's the contrary bet. Make sure that you could stick

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Speaker 1: it to an investor to pay sixty nine to seventy

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Speaker 1: dollars a barrel when the price, based on what you

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Speaker 1: just described, looks like it's going to fall right exactly,

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Speaker 1: So we did. We came out of the worst worst

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Speaker 1: of it, and and I think on investor's mind, what

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Speaker 1: was really not focused on was the loss of Canadian

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Speaker 1: crude oil. Uh, the market seem to be really focused,

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Speaker 1: of course on the situation in Iran, the situation in Venezuela,

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Speaker 1: the situation in Libya. But we had a major upgrader,

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Speaker 1: a production plant in Calgary that went down for an

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Speaker 1: unplanned outage back in the late spring, right as we

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Speaker 1: were going into the peak demand season for oil. And

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Speaker 1: keep in mind, demand for oil, demand for guests lane

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Speaker 1: in the United States has never been stronger. And yet

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Speaker 1: we lost a key supplier of that oil at the

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Speaker 1: start of the season, and hence we did have a

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Speaker 1: sharp run upping price. But the market has endured that

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Speaker 1: right now, so prices at this level from a fundamental

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Speaker 1: from the seasonality standpoint, you would expect to see lower prices,

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Speaker 1: a softening in prices as it wore. But clearly with

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Speaker 1: the headlines the reported assassination attempt down in Venezuela. Of course,

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Speaker 1: the situation between this White House and Tehran, the situation

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Speaker 1: in um in Libya, all plays into fear. And when

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Speaker 1: you have in fear in the market, that fear gets

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Speaker 1: priced in as a premium into the market. So there

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Speaker 1: there is that still continue to overhang in this market. Okay,

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Speaker 1: So if you're a driver and you're looking to put

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Speaker 1: the gasoline or fuel in your automobile, should you expect

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Speaker 1: prices to remain stable or at least lower going into

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Speaker 1: the fall? Well going fall, we have to keep in mind,

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Speaker 1: the investor listeners here has to keep in mind that

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Speaker 1: come September fifteen, the rules begin to change with the

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Speaker 1: type of gasolene that we put into our cars. And

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Speaker 1: then that that transitions again in the month of October

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Speaker 1: and once again in November, as you transition from a

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Speaker 1: summer grade gasolene to quote unquote a winter grade gasolene

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Speaker 1: now winter grade gasolene. Given the amount of chemical feedstocks

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Speaker 1: to go into manufacturer, they're plentiful, so the manufacturer where

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Speaker 1: the grade gasolene is a cheaper proposition. So inherently we

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Speaker 1: are going to see lower oil prices. We're going to

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Speaker 1: gasolene prices because of the transition for the types of

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Speaker 1: gasolene that are going into the refinery, uh coming out

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Speaker 1: of the refiner, I should say. So that's at him.

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Speaker 1: I would expect to see lower prices because let's keep

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Speaker 1: in mind, as you said, at the beginning of the summer,

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Speaker 1: when demand was at all time high, we lost access

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Speaker 1: to a lot of crude oil. We we've withstood that,

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Speaker 1: and now we're going to a weak demand part of

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Speaker 1: the year when we're manufacturing a cheaper gasoline going into

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Speaker 1: that uh uh time frame. So I think at worst

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Speaker 1: expect prices, you know, a slow, steady decline. But but

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Speaker 1: certainly I would expect to see you're going to see

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Speaker 1: a decline. That's just economically a truth that we'll see

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Speaker 1: it over the next couple of months. All Right, I

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Speaker 1: want you to put oil to the side. For gasoline

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Speaker 1: to the side, I want you to talk about liquefied

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Speaker 1: natural gas and the potential Chinese tariffs on l en

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Speaker 1: g imports. Yeah, that that was a big surprise. Of course,

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Speaker 1: China has identified US energy imports as tariffs, but they

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Speaker 1: they had left out ellen G and I say that

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Speaker 1: as a surprise, and I think it is catching the

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Speaker 1: market a little bit off guard, given that China is

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Speaker 1: in a massive transition to wean itself off of coal

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Speaker 1: onto gas, and it's been a major buyer of l

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Speaker 1: en G cargoes over the past year. Some estimates now

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Speaker 1: have China as the world's largest buyer of l n G. Uh.

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Speaker 1: So this was a surprise. I am skeptical China's making

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Speaker 1: this threat. I am skeptical because we are we are

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Speaker 1: coming out of the summer, which means we're going into

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Speaker 1: the fall, and we're going into the peak demand season

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Speaker 1: for Chinese gas consumption the winter. And the flexibility that

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Speaker 1: us LG has it uh the cargoes can easily go

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Speaker 1: into China. And this is what we saw last year.

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Speaker 1: And when you have excess demand in the Chinese market,

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Speaker 1: it was the us LG that fit that gap because

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Speaker 1: of its flexibility. We gotta leave it there. Stephen Short

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Speaker 1: is the president of the Short Group. He's based in Villanova,

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Speaker 1: Pennsylvan and he's talking crude and liquefied natural gas. Right now,

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Speaker 1: let's talk about CBS and the decline in the value

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Speaker 1: of CBS shares since the accusations of sexual harassment against

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Speaker 1: the CBS chief executive less Moonvest. Here to help us

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Speaker 1: understand what's going on, is Tuna a MOBI. He is

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Speaker 1: the senior media and entertainment analysts for cf R Research.

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Speaker 1: Tuna always a pleasure. I was looking at the price

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Speaker 1: of CBS stock and all right, fifty two bucks to share.

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Speaker 1: But the decline since the revelation of these accusations against

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Speaker 1: less Moonvest. Do you believe that that is really what

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Speaker 1: is hurting the style? PIM? First off, good morning, Thanks

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Speaker 1: for having me. Um. Absolutely, I think um. I think

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Speaker 1: it does create an overhang on the stock, which is

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Speaker 1: kind of why we downgraded it shares um from it

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Speaker 1: by to a hold. Um. It's a little bit disappointing

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Speaker 1: PIM that the company chose to conduct business as usual

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Speaker 1: and the last earnings call as if wishing that the

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Speaker 1: matter of the ongoing investigation will will just go away.

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Speaker 1: But there is no questionably a cloud of overhang as

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Speaker 1: a results of this on for investigation, and we think

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Speaker 1: that as long as that cloud does not get resolved

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Speaker 1: in a substantive manner that investors should tread cautiously even

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Speaker 1: as the company has demonstrated continued strong fundamentals here. So

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Speaker 1: we are cautiously, um, you know, waiting for the uh

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Speaker 1: kind of the substance, and and based on that, we

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Speaker 1: just think it's uh, it's prudent to to not add

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Speaker 1: to current positions. Okay, but let me ask you a

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Speaker 1: little bit. If indeed the company is doing well. We

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Speaker 1: got the results last week. They're over the top business,

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Speaker 1: exceeding estimates. They're adding subscribers at an accelerated rate. Their

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Speaker 1: retransmission fees are also higher. Why wouldn't this be a

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Speaker 1: good opportunity to buy a stock that's trading at fifty

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Speaker 1: two that maybe just about let's say the middle of July,

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Speaker 1: was trading nearly sixty dollars To share the simple answer,

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Speaker 1: pay me that Less move is an integral part of

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Speaker 1: the investments here. And there's a lot of investors that

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Speaker 1: we speak to that actually brought into CBS precisely because

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Speaker 1: Less and his team have demonstrated division to execute on

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Speaker 1: that course strategy that you just alluded to. Growth in um,

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Speaker 1: you know, non traditional revenue streams, whether it's UH streaming

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Speaker 1: or content licensing UM over the time up you know,

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Speaker 1: things of that nature retransmission. So I think the fundamentals

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Speaker 1: definitely UM are very healthy, as you have alluded to.

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Speaker 1: But right now I think, uh, there's a real uh

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Speaker 1: some likelihood that some of the sharehold the value uh

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Speaker 1: that Less Movements has created over the last decades, some

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Speaker 1: of that could be uh eroded in the event that

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Speaker 1: he could, you know, potentially be found uh uh you

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Speaker 1: know somewhat complexity or even if should he leave. And

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Speaker 1: remember there's still the issue of the potential merger with Votcom,

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Speaker 1: which National Amusements is pushing uh and the litigation that

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Speaker 1: is pending in that regard also creates an overhanging. There's

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Speaker 1: a lot of CBS investors who would not like to

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Speaker 1: see that merger happened. And to the extent that you

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Speaker 1: know less who is the chief opponent of that marger

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Speaker 1: to the extent that he's displaced, I think bringing together

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Speaker 1: the two companies could also read some questions in the

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Speaker 1: minds of CBS investors as to whether at is in

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Speaker 1: fact something that will uh grow share all the value

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Speaker 1: over the long term. Well to know I'm glad you

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Speaker 1: mentioned Viacom. They're going to be reporting their results on

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Speaker 1: Thursday before the market opens. What do you expect so

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Speaker 1: CEO Robert Bakish. I think he's on on the on

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Speaker 1: the good path, right. So he's articulated his vision to

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Speaker 1: focus on the flagship brands, and we are actually encouraged

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Speaker 1: by by some of the strides that have been made

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Speaker 1: under his tenure. Um, you know, we're seeing some stabilization

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Speaker 1: in the ratings that a Nickelodeon and and and MTV

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Speaker 1: and v h one. Uh, there's still some challenges there,

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Speaker 1: to be sure. At the Paramount Studio, I think we

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Speaker 1: actually have been encouraged by a stemming of of the

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Speaker 1: the the challenges that they've faced over the last several

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Speaker 1: years where they've on the performed uh the other Hollywood studios.

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Speaker 1: So I think there's also progress there in terms of

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Speaker 1: the turnaround strategy. But we do expect to your question

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Speaker 1: that there's still some underlying issues with maintaining some operating

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Speaker 1: consistency on the advertising side. Uh. The company is still

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Speaker 1: somewhat I think disadvantaged in this highly consolidated landscape where

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Speaker 1: I think you see more uh, the bigger scale becomes

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Speaker 1: even more important, which is why I think the merger

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Speaker 1: with CBS is arguably much more crucial for Vatcom compared

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Speaker 1: to CBS. Let's talk about another merger. Tell us about

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Speaker 1: Disney and Century Fox. We get Disney results tomorrow after

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Speaker 1: the close. The shares right now hitting a new fifty

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Speaker 1: two week hi. The stock is up seven and a

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Speaker 1: half percent this year. Correct. We are still very bullish

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Speaker 1: on the shares of Disney. Withink the the the deal

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Speaker 1: with Fox which just got approved by shareholders recently. I

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Speaker 1: think that sets the company up very nicely to execute

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Speaker 1: on its direct to consumer strategy as well as the

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Speaker 1: advantages of scale. But I think, um, you know, the

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Speaker 1: elephant in the room here is going to be how

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Speaker 1: potentially h you know, Fox reacts to the bid for

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Speaker 1: for Sky, which, as you know, Comcast have loved a

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Speaker 1: much higher bid, and I think Fox has on until

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Speaker 1: Thursday too to beat that offer. I I do believe

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Speaker 1: that there's a very good chance that Fox can come

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Speaker 1: back with a higher offer for uh First Sky, which

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Speaker 1: could escalate the bid in war. And remember now that

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Speaker 1: Disney has an agreement in place, there's also the likelihood

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Speaker 1: we think that Disney could actually leap frog and make

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Speaker 1: a food beat for Sky. So there's all kinds of

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Speaker 1: moving parts here that will determine how, you know, the

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Speaker 1: Sky UH issue gets resolved, and I think that's probably

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Speaker 1: going to UH overshadow the results of these companies that

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Speaker 1: have coming up in the next couple of days or so. Well,

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Speaker 1: Century Fox reports on Wednesday just after the market closes.

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Speaker 1: What do you think comcasts UH strategic response will be

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Speaker 1: if they are not successful, as it looks as though

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Speaker 1: they will not be Fox, I wouldn't rule them out

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Speaker 1: as a matter of fact, Team. I would not even

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Speaker 1: say that they would not be successful, because I think

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Speaker 1: they made it pretty clear when they backed out of

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Speaker 1: the you know, of the chase for Fox that UM

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Speaker 1: Sky is now They're still focused, and I do believe

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Speaker 1: that's a real chance that they could come back yet

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Speaker 1: with a high offers. Should Disney and or Fox decide

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Speaker 1: to UH to top camp Comcast offer on the table,

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Speaker 1: I mean, Sky is an extremely strategic asset. We still

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Speaker 1: think that Sky is probably on balanced the better match

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Speaker 1: for Comcast rather than Disney, but I think expect both

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Speaker 1: companies to go all out because I think the Sky

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Speaker 1: assets are very unique skies as much as as as

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Speaker 1: a bona fide content provider as it is is a

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Speaker 1: satellite TV distributor, and the the most recent pact that

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Speaker 1: they just signed with the Premierly was very very compelling,

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Speaker 1: which makes it all the more valuable asset. Thanks very much.

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Speaker 1: Tuna Amobi, Senior Media Entertainment Analysts at c f r

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Speaker 1: A Research. What do the company's compona Arbor, how Arbor,

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Speaker 1: Holmes and Westwood Meets and Bound having common? They're all

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Speaker 1: companies that Warren Buffetts Berkshire Hathaway has acquired this year,

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Speaker 1: and while the names may not be familiar, that's probably

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Speaker 1: because they were not multibillion dollar deals. So here to

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Speaker 1: tell us what Warren Buffett and Berkshire Hathaway are going

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Speaker 1: to do with a hundred and eleven billion dollars worth

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Speaker 1: of cash Our own Tara La Chappelle, Boomberg opinion columnist,

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Speaker 1: Tara always a pleasure. Thanks for coming in, uh and

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Speaker 1: I just want to note to follow Tara on Twitter

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Speaker 1: just to go to at Tara lash L a c

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Speaker 1: h Alright, Tara lash what what kind of acquisition does

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Speaker 1: Warm Buffett need to make in order to really move

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Speaker 1: the needle at Berkshire Hathaway. Well, their cash is over

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Speaker 1: a hundred billion dollars, which has been the case for

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Speaker 1: a while now. I mean, obviously they need a big deal.

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Speaker 1: I think the challenge has been, you know, the same

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Speaker 1: over the past year, which is that everything is very

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Speaker 1: expensive compared to what a warm Buffett would like to

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Speaker 1: pay for deals. And I don't know if he just

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Speaker 1: bites the bullet and does something outside of evaluation he's

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Speaker 1: comfortable with, I don't know if that makes sense, or

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Speaker 1: does he finally give in and think about doing buy backs,

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Speaker 1: which I think is something investors are becoming more open

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Speaker 1: to as well, probably more so than the idea that's

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Speaker 1: been floated around of them paying a one time dividend. Now,

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Speaker 1: as I noted in the introduction, I mean, and I

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Speaker 1: was kind of kidding because, I mean I had never

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Speaker 1: heard of half of these companies. But uh, it's not

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Speaker 1: as if they've been completely out of the acquisition business, right,

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Speaker 1: I mean, because they bought Broun Group. They've also made

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Speaker 1: an offer for about fifty of Riverside Capital Global, Aerospace,

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Speaker 1: premium medical protection, medical liability, mutual insurance. I mean, these

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Speaker 1: are they making a lot of acquisitions. They're just tiny, right,

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Speaker 1: And I mean there was a large deal um last

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Speaker 1: year when they bought a steak in Flying J Pilot,

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Speaker 1: Flying J the stop company, which I think is a

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Speaker 1: really great deal for brickshere, but down the road they'll

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Speaker 1: be able to buy more of it. Um. It wasn't

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Speaker 1: you know, a fifty billion dollar transaction that's really going

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Speaker 1: to move the needle in the cash, But I think

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Speaker 1: it was something that really matched with their strategy. So

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Speaker 1: they're definitely active. You know, he has a lot of

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Speaker 1: people working for him that are tasked with looking for deals,

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Speaker 1: and I think there's just a lot of pressure right now,

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Speaker 1: not just because the cash is so high, but because

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Speaker 1: you know, Buffett is turning eighty eight later this month,

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Speaker 1: and you don't want to leave his successor with the

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Speaker 1: challenge of having all this cash and also trying to

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Speaker 1: make investors comfortable with someone other than Buffet running the company.

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Speaker 1: So I think he can make it a little bit

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Speaker 1: easier for the next in line if he can do

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Speaker 1: something to chip away at that cash with the deal

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Speaker 1: that investors really like. Well, just to note that Flying

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Speaker 1: J acquisition Pilot Flying JA acquisition that was only for

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Speaker 1: about the company right exactly, so they have the option

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Speaker 1: to buy more later on. But yeah, they don't. You know,

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Speaker 1: it's not completely in the Berkshire house. It wasn't you know,

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Speaker 1: the kind of deal that people were looking for, though

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Speaker 1: I think it was a good one. Do you get

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Speaker 1: the sense that investors in Berkshire Hathaway are eager for

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Speaker 1: warm Buffet to spend the money or are they content

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Speaker 1: to just sit and wait for a big market downturn

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Speaker 1: and see an opportunity evolve. It depends who you ask.

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Speaker 1: I've talked to a few different shareholders in recent weeks

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Speaker 1: and months about this, and I think a lot of

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Speaker 1: them are really patient, and then some other one, some

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Speaker 1: of the younger ones that are looking ahead at you know,

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Speaker 1: who's going to be running the company. I think they're

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Speaker 1: looking at it from the standpoint that I was saying

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Speaker 1: earlier that you know, it would be really hard for

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Speaker 1: someone other than Buffett to do, would deal of that size.

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Speaker 1: You know, he gets these deal sweeteners because of who

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Speaker 1: he is and because the honor it's it's sort of

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Speaker 1: perceived to be to be acquired by Berkshire. And I

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Speaker 1: don't know if it's going to be that easy for

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Speaker 1: his successor to to maintain that. So I think from

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Speaker 1: that standpoint and makes sense to do as much as

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Speaker 1: they can now with that money. But it's not as

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Speaker 1: if Berkshire Hathaway is not being opportunistic in actually selling

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Speaker 1: steaks as well. For example, that Philips sixties six divestiture

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Speaker 1: right which some people were also puzzled by that. UM

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Speaker 1: I was interested to see what they were going to

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Speaker 1: do with Kraft Hinds. I think it's getting to the

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Speaker 1: point where I really don't understand why Warren Buffett likes

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Speaker 1: the stock so much. UM I don't know why Berkshire

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Speaker 1: is still in it. I think that him stepping away

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Speaker 1: from the board, while that was mostly due to him

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Speaker 1: wanting to reduce his travel commitments, I think it could

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Speaker 1: be a precursor to them backing off of Kraft Hinds.

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Speaker 1: I just don't think if it never really did fit

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Speaker 1: the kind of Berkshire investment that we're used to seeing,

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Speaker 1: but he always was able to justify in what way

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Speaker 1: is it because it didn't give them total control? Well?

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Speaker 1: I think also the strategy you know, Kraft Times is

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Speaker 1: run by three G private equity firm. They're really good

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Speaker 1: at cutting costs and boosting profits. Craft Times became very

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Speaker 1: easily one of the most profitable companies in the food space.

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Speaker 1: But I think, you know, that's kind of maxing out now.

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Speaker 1: They're not really investing for long term growth, even though

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Speaker 1: they keep talking about it. And I think, you know,

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Speaker 1: Warren Buffett looks long term, and when you look at

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Speaker 1: Kraft Times, I don't know what that long term picture

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Speaker 1: could be. Campbell, right, I mean they could buy Campbell Soup.

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Speaker 1: I don't know that that does much for them. Sure,

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Speaker 1: they could fire a lot of Campbell's people, cut a

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Speaker 1: lot of costs U I'm sure they can make the

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Speaker 1: business leaner, but that's a temporary boost. I think, you know,

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Speaker 1: long term, Campbell Soup does not give them international exposure.

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Speaker 1: It's almost entirely North America. And then you know, on

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Speaker 1: top of it, it's not a growing business by any means.

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Speaker 1: So I don't know how this really helps them in

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Speaker 1: the long run. Is there a particular industry that you

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Speaker 1: think that Warren Buffett and Berkshire hath to Weigh are

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Speaker 1: focused on. I think they do. Like the consumer staples space.

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Speaker 1: I think companies with really strong brand names, um, you know,

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Speaker 1: Costco comes up a lot because Costco has this membership

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Speaker 1: that's almost functions like a float, and it's that kind

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Speaker 1: of brand, really strong brand equity that you could see

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Speaker 1: being something almost like the premium that is paid in

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Speaker 1: an insurance in exactly very similar. So I think he

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Speaker 1: could be drawn to that business. Um, companies like Nike

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Speaker 1: have come up. You know, uh, deer always comes up.

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Speaker 1: Steak in Apple Apple. Yes, Um, a lot of industrial

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Speaker 1: companies fit with the Berkshire strategy. But of course, you know,

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Speaker 1: as we see with Apple, his investing lieutenants could take

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Speaker 1: them a different direction. I mean it seems like they

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Speaker 1: are open to tech or consumer electronics. So I think

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Speaker 1: there's a lot out there. It's just prices the sticking point. Well,

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Speaker 1: right now, the shares of Berkshire Hathaway, the A shares,

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Speaker 1: they are up about five and a half percent so

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Speaker 1: far this year, So I have to wait and see

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Speaker 1: what happens. Much appreciated Tara la Chapelle are Bloomberg opinion

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Speaker 1: columnists covering deals and that means Berkshire Hathaway as many

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Speaker 1: other companies. And also once again, you can follow Tara

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Speaker 1: on Twitter. Go ahead, I'm gonna let you say at

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Speaker 1: Tara Lash. The last name is too long. Diffit into

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Speaker 1: Twitter handle. It is t A r A l A

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Speaker 1: c H. I'm pim Fox. If you believe technology skills

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Speaker 1: will land you a job with regular pay increases, well

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Speaker 1: you're gonna have to listen to Harley Lippman, the chief

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Speaker 1: executive and the founder of Genesis ten. This is one

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Speaker 1: of the nation's largest I T services and staffing firms,

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Speaker 1: and he joins US now. Harley Lippman, thanks very much

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Speaker 1: for being with us. So, if you believe that having

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Speaker 1: those tech skills means you're gonna have a great job

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Speaker 1: with regular pay increases, should you rethink that? No, not

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Speaker 1: at all. Actually, um, even though wages have been flat

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Speaker 1: for quite a while, especially because US big co operations

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Speaker 1: have been able to leverage volume discounts, discounts when they

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Speaker 1: work with vendors, and vendors provide a large number of

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Speaker 1: I professionals, things are going to change. They're actually wages

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Speaker 1: have been bottomed out and they're only going to go up. Well,

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Speaker 1: when you say wages have bottomed out, why have wages

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Speaker 1: in the tech sector been under pressure? Well, UH companies

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Speaker 1: have been able to keep pressure on UH. As I

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Speaker 1: mentioned a moment ago on vendors who provide I T professionals,

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Speaker 1: they've been able to keep pressure on wages because they

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Speaker 1: could leverage volume business. If you're doing business with a

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Speaker 1: fortune company and you're providing them with I T professionals,

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Speaker 1: they will leverage that will say well, if you have

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Speaker 1: hundreds of people here, we want a really big discount.

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Speaker 1: So they keep the wages low and they keep the

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Speaker 1: rates low, and vendors have been seeing margin compression. So

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Speaker 1: business for vendors has hasn't been as good as it

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Speaker 1: used to be, but now wages are going to go

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Speaker 1: up the course they're seeing turnover. They need the skills,

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Speaker 1: and especially in emerging technologies if you talk about artificial intelligence,

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Speaker 1: we're really going to see the results of that probably

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Speaker 1: in about five years from now, but until then you're

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Speaker 1: going to need I T professionals to build out the

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Speaker 1: software to support artificial intelligence. And artificial intelligence simply stated,

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Speaker 1: is the ability to do things on computers that humans

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Speaker 1: were previously doing. So what kinds of specific technology skills

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Speaker 1: are going to be in demand? Well, clearly UM cybersecurity

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Speaker 1: is high up on the list. Analytics, UM, things like DevOps.

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Speaker 1: These are technical terms but there are a lot of

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Speaker 1: skills learning Java, learning Python, uh, that is going to

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Speaker 1: be in high demand. So things will just change. Even

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Speaker 1: if you learn something in technology and a new emerging

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Speaker 1: one comes about, you could still learn it. So there's

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Speaker 1: always going to be a need for trained I T professionals.

429
00:25:04,520 --> 00:25:07,880
Speaker 1: Just keep your eye on where the emerging trends are going. Well,

430
00:25:07,920 --> 00:25:13,040
Speaker 1: you mentioned artificial intelligence. Are there specific types of programming

431
00:25:13,080 --> 00:25:17,160
Speaker 1: skills that are going to be necessary? Yes, Java and Python.

432
00:25:17,840 --> 00:25:21,639
Speaker 1: So for people who are taking computer classes or studying

433
00:25:21,680 --> 00:25:24,919
Speaker 1: computer science, I'm sure they know that, but those are

434
00:25:24,920 --> 00:25:27,719
Speaker 1: the two areas to focus on learning Python and Java.

435
00:25:27,960 --> 00:25:30,959
Speaker 1: There's a big future there. What about the use of

436
00:25:31,560 --> 00:25:35,800
Speaker 1: H one B visus the ability to attract foreign talent

437
00:25:35,880 --> 00:25:39,679
Speaker 1: in the United States and technology, Well, the companies have

438
00:25:39,760 --> 00:25:43,560
Speaker 1: been using H one B visas because that has allowed

439
00:25:43,600 --> 00:25:47,600
Speaker 1: them to keep wages at a low level. But now

440
00:25:48,440 --> 00:25:52,119
Speaker 1: companies are not taking people with H one visas because

441
00:25:52,160 --> 00:25:54,880
Speaker 1: of the uncertainty. They don't know if the visas will

442
00:25:54,920 --> 00:25:56,960
Speaker 1: be renewed, they don't know if they could get someone

443
00:25:57,000 --> 00:26:01,000
Speaker 1: of visa. It's a serious issue now. So we see

444
00:26:01,040 --> 00:26:05,960
Speaker 1: this among our clients where they want companies to replace

445
00:26:06,000 --> 00:26:08,840
Speaker 1: the h n D visa people because they don't want

446
00:26:08,840 --> 00:26:11,880
Speaker 1: them to stay on their premises, get involved in really

447
00:26:11,920 --> 00:26:15,080
Speaker 1: critical projects, and then their visas are coming out for

448
00:26:15,200 --> 00:26:17,480
Speaker 1: renewal and they have to go back to their home

449
00:26:17,520 --> 00:26:20,920
Speaker 1: country and they can't get back because Lego's government will

450
00:26:20,920 --> 00:26:24,879
Speaker 1: not renew the visas. Huge uncertainty. And if you and

451
00:26:24,880 --> 00:26:28,520
Speaker 1: and in technology, you need consistency and stability above all

452
00:26:28,880 --> 00:26:32,080
Speaker 1: predictability because you have deadlines, you have to get work done.

453
00:26:32,560 --> 00:26:34,920
Speaker 1: You can't depend on someone who may or may not

454
00:26:35,280 --> 00:26:37,800
Speaker 1: have to go back to their home country. Now, the

455
00:26:37,920 --> 00:26:42,840
Speaker 1: kinds of skills that you describe, software engineering, application development,

456
00:26:42,880 --> 00:26:46,240
Speaker 1: as well as app support and quality assurance, where are

457
00:26:46,240 --> 00:26:49,000
Speaker 1: people getting the skills in order to do that? Are

458
00:26:49,040 --> 00:26:52,960
Speaker 1: they getting that from university programs or is that something

459
00:26:53,000 --> 00:26:55,400
Speaker 1: that they have to then go out and get more

460
00:26:55,440 --> 00:26:59,720
Speaker 1: specialized consideration a little bit of both. You know, after

461
00:26:59,800 --> 00:27:04,680
Speaker 1: the the big recession of two thousand eight, American companies

462
00:27:04,720 --> 00:27:08,959
Speaker 1: by and large cut training, so people now have to

463
00:27:09,080 --> 00:27:11,639
Speaker 1: get that on their own. There's a big gap now,

464
00:27:12,280 --> 00:27:15,680
Speaker 1: and that presents real opportunity for people who really want

465
00:27:15,720 --> 00:27:18,400
Speaker 1: to get into the tech sector because that they could

466
00:27:18,400 --> 00:27:21,040
Speaker 1: get some training and there are vendors that provide it,

467
00:27:21,160 --> 00:27:25,080
Speaker 1: like we do a Genesis Tent. We provide training and

468
00:27:25,320 --> 00:27:28,719
Speaker 1: we provide domestic outsourcing. So that's what people could get trained.

469
00:27:29,000 --> 00:27:31,240
Speaker 1: So if they could get that training on their own

470
00:27:31,280 --> 00:27:33,520
Speaker 1: a little bit or through a vendor like Genesis Tent,

471
00:27:34,240 --> 00:27:36,560
Speaker 1: then they could take that and leverage that they could

472
00:27:36,600 --> 00:27:41,480
Speaker 1: get very good jobs at companies. Now you mentioned artificial intelligence,

473
00:27:41,720 --> 00:27:45,080
Speaker 1: what about robotics. Is that also an area that should

474
00:27:45,119 --> 00:27:47,679
Speaker 1: be trained for now? Oh? Yeah, that's the future of

475
00:27:47,760 --> 00:27:51,760
Speaker 1: costs robotics AI. That's the super hot area. But it's

476
00:27:51,800 --> 00:27:54,960
Speaker 1: not there yet. So a lot of people are are

477
00:27:55,080 --> 00:27:58,280
Speaker 1: getting caught up in this. And while it's important to

478
00:27:58,720 --> 00:28:01,240
Speaker 1: learn the skills as I ment and earlier learning Java,

479
00:28:01,359 --> 00:28:04,560
Speaker 1: learning Python will put you in a strong position for

480
00:28:04,680 --> 00:28:08,720
Speaker 1: artificial intelligence to your good points, it's also for robotics

481
00:28:08,840 --> 00:28:12,600
Speaker 1: very it's basically the same thing. Now there's a geographic

482
00:28:12,680 --> 00:28:15,600
Speaker 1: element to this as well, Is there not you're headquartered

483
00:28:15,680 --> 00:28:20,159
Speaker 1: in New York, you have operations in Miami Beach. Is

484
00:28:20,240 --> 00:28:24,160
Speaker 1: there a geographical tilt towards the coasts in terms of

485
00:28:24,640 --> 00:28:27,399
Speaker 1: where the talent is not at all? All over the

486
00:28:27,480 --> 00:28:30,520
Speaker 1: Hinded States and all over the world, Technology moves at

487
00:28:30,600 --> 00:28:35,760
Speaker 1: such speed that it's needed everywhere. It's needed in Des Moines, Minneapolis, Milwaukee,

488
00:28:35,840 --> 00:28:40,040
Speaker 1: Kansas City, Dallas, Atlanta. There's no one hub that is

489
00:28:40,160 --> 00:28:42,959
Speaker 1: using it, no one else is. The world is indeed

490
00:28:42,960 --> 00:28:45,840
Speaker 1: flattened that way, So it doesn't matter really where you are,

491
00:28:46,200 --> 00:28:49,120
Speaker 1: and that's the beauty of technology. Like like you know,

492
00:28:49,520 --> 00:28:52,880
Speaker 1: cell phones, emails, text, WhatsApp could be anywhere in the

493
00:28:52,920 --> 00:28:56,760
Speaker 1: world and communicate. It's the same thing with these technology skills.

494
00:28:56,800 --> 00:29:01,200
Speaker 1: But aren't costs related to geographic is is? Yes, you're

495
00:29:01,240 --> 00:29:04,640
Speaker 1: quite right on that. So a lot of companies are

496
00:29:04,760 --> 00:29:08,680
Speaker 1: looking to have more work done in lower cost areas

497
00:29:08,760 --> 00:29:12,400
Speaker 1: in the United States, the Midwest in particular, where that's

498
00:29:12,440 --> 00:29:15,560
Speaker 1: also rich in talent. But at the same time, there

499
00:29:15,600 --> 00:29:18,880
Speaker 1: are companies that have headquarters in major cities like New

500
00:29:18,920 --> 00:29:22,560
Speaker 1: York City, Atlanta, Dallas, and they need people there. So

501
00:29:22,640 --> 00:29:25,520
Speaker 1: it's a bit of a blend. You'll have some work

502
00:29:25,560 --> 00:29:29,000
Speaker 1: being done on shore but off site, as we say,

503
00:29:29,120 --> 00:29:31,680
Speaker 1: and you'll have work being done at the corporate headquarters,

504
00:29:31,720 --> 00:29:35,080
Speaker 1: which will be in the big cities. Now, Harley, just

505
00:29:35,120 --> 00:29:38,400
Speaker 1: give you about twenty seconds here. Employers around the United

506
00:29:38,440 --> 00:29:41,240
Speaker 1: States they posted more than three hundred thousand tech jobs.

507
00:29:41,240 --> 00:29:43,560
Speaker 1: This is in the month of May, for example, but

508
00:29:43,680 --> 00:29:46,960
Speaker 1: yet they only filled under nine thousand of those jobs.

509
00:29:47,000 --> 00:29:52,760
Speaker 1: What's the biggest lack of tech savvy jobs that are available?

510
00:29:52,840 --> 00:29:57,560
Speaker 1: What's the biggest vacuum here? It's it's interesting. I know

511
00:29:57,640 --> 00:30:00,160
Speaker 1: it's a it's a bit odd, isn't it. But I'll

512
00:30:00,160 --> 00:30:03,000
Speaker 1: given that there's a shortage, and you know, the unemployment

513
00:30:03,080 --> 00:30:05,560
Speaker 1: rate continues to go down to record levels and they're

514
00:30:05,560 --> 00:30:09,360
Speaker 1: not hiring basically because employers are looking for everything. If

515
00:30:09,360 --> 00:30:12,800
Speaker 1: they want fifteen things that someone has and you present

516
00:30:12,880 --> 00:30:16,440
Speaker 1: them with with twelve or thirteen, they may not take them.

517
00:30:16,440 --> 00:30:18,360
Speaker 1: They'll send the work off shore. It's just kind of

518
00:30:18,400 --> 00:30:22,840
Speaker 1: an easy but a false reaction and decision on their part.

519
00:30:22,920 --> 00:30:25,560
Speaker 1: It's got It'll catch up to them. Thanks very much.

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00:30:25,560 --> 00:30:28,640
Speaker 1: Harley Lippman is the chief executive and the founder of

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00:30:29,040 --> 00:30:35,200
Speaker 1: Genesis ten. Thanks for listening to the Bloomberg P and

522
00:30:35,320 --> 00:30:38,360
Speaker 1: L podcast. You can subscribe and listen to interviews at

523
00:30:38,400 --> 00:30:42,840
Speaker 1: Apple Podcasts, SoundCloud, or whatever podcast platform you prefer. I'm

524
00:30:42,880 --> 00:30:46,320
Speaker 1: pim Fox. I'm on Twitter at pim Fox. I'm on

525
00:30:46,360 --> 00:30:49,640
Speaker 1: Twitter at Lisa Abramo. It's one before the podcast You

526
00:30:49,680 --> 00:30:52,200
Speaker 1: can always catch us worldwide on Bloomberg Radio.