Speaker 1: This is Bloomberg Business Wait inside from the reporters and
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Speaker 1: Open the morning and out the room.
Speaker 2: The teacher is teaching them.
Speaker 3: I'm all right, everybody, we are going to talk about
Speaker 3: school a little bit. And now of the third quarter
Speaker 3: is officially in the books, everyone is thinking about the
Speaker 3: fourth quarter. And one of the things that could help
Speaker 3: create a bit of a reality check for the world
Speaker 3: at large, for investors, for consumers, and that is what
Speaker 3: happens when it comes to paying back those student loans.
Speaker 4: Absolutely, I mean, there's been a real question mark among
Speaker 4: all the companies that have brought this up. But also
Speaker 4: more important, did you know graduate students are taking on
Speaker 4: an outsized share of federal student loans. In fact, even
Speaker 4: I feel forty seven percent of the total overall share
Speaker 4: of student loans went to graduate students. And our Bloomberg
Speaker 4: News Higher Education finance reporter Janet Lauren has a great
Speaker 4: story on this, so definitely read it, but first listen
Speaker 4: to her here she joins us via zoom in New
Speaker 4: York City. So, Jennet, your story looks specifically at graduate
Speaker 4: students who borrowed money. What did you find out?
Speaker 5: So, graduate students are borrowing a lot of money. In fact,
Speaker 5: if you look at the annual disbursements between who's borrowing,
Speaker 5: they're almost they're set to borrow more than undergraduates. And
Speaker 5: it sounds kind of crazy because there's a lot of
Speaker 5: people going to college and not as many people going
Speaker 5: to graduate school. But they're borrowing quite a lot of money.
Speaker 5: And the reason is because undergrad are limited to roughly
Speaker 5: thirty thousand dollars of federal loans over four years. But
Speaker 5: if you're going to graduate school, you can borrow quite
Speaker 5: a lot up to the cost of attendance, and in
Speaker 5: some cases you're talking eighty thousand or more per year,
Speaker 5: and that also includes housing and living expenses. So that's
Speaker 5: one reason. And another reason is the interest rates. This year,
Speaker 5: if you're going to graduate school, you would be taking
Speaker 5: out a grad plus loan with an interest rate that's
Speaker 5: over eight percent for the first time in a dozen years,
Speaker 5: and grad plus loans accrued during college, so you know
Speaker 5: you're taking out a lot of money, and it's a
Speaker 5: lot more people are going to graduate school and taking
Speaker 5: these large amounts, and it's accruing, so it's roughly half
Speaker 5: of the annual disbursements and Education Department economists are boried
Speaker 5: as it's set to eclipse undergraduate borrowing.
Speaker 3: You know, I just feel like it speaks to this
Speaker 3: bigger problem of cost of college, the loans that are
Speaker 3: taken out, and then ultimately, Janet, does it pay off
Speaker 3: in terms of the jobs they get. We've seen all
Speaker 3: the studies about gett a college education and you tend
Speaker 3: to do better when it comes to your income over time.
Speaker 3: But having said that, these graduate students who are taking
Speaker 3: on these loans, do they ultimately get jobs that make
Speaker 3: financial sense so they pay it off pretty easily.
Speaker 5: Well, it's a great question. We know that college is
Speaker 5: viewed as a ticket to a better living, but it's
Speaker 5: just not clear about graduate degrees. It's, first of all,
Speaker 5: it's going to depend on the type of degree and
Speaker 5: where you're going to school. If you're going to Harvard
Speaker 5: Law School or a top law school, or a top
Speaker 5: MBA program or a top engineering school, chances are you'll
Speaker 5: have a better chance of getting a job to pay
Speaker 5: it off. But we spoke to some labor economists who
Speaker 5: looked at online resumes and online job postings, and there's
Speaker 5: a lot more people with graduate degrees in their resumes
Speaker 5: and the job listings that looked for, you know, graduate
Speaker 5: degrees were really stagnating. And the question is, uh, you know,
Speaker 5: what are they What are the people who are employing you,
Speaker 5: what are they valuing? Do they want to know you
Speaker 5: have skills? Or do they even care about a graduate? Well,
Speaker 5: and of course if you want to, yeah, oh go ahead.
Speaker 3: No, I was, you know, I was thinking about my
Speaker 3: own career. Like It's like, at one point I said
Speaker 3: to somebody, should I go back and get a graduate degree?
Speaker 3: And I knew I was already doing journalism, and she's like,
Speaker 3: you're doing it, that's the best.
Speaker 4: I had a similar experience. I don't know if Janet,
Speaker 4: do you get a graduate No?
Speaker 3: I didn't.
Speaker 4: Ultimately thought about it, decided not to do it. But Janet,
Speaker 4: I don't know if you've had the same experience.
Speaker 5: Well, I did, but I went right out of college
Speaker 5: and it was a lot less expensive then.
Speaker 4: Well, and that's something your story says too, is that
Speaker 4: the costs for these degrees have gone way way up,
Speaker 4: and so you have people not necessarily earning as much
Speaker 4: money in their overall careers, but then they're also having
Speaker 4: to pay off these bills that just seem to be
Speaker 4: wildly more expensive.
Speaker 5: Right, Yeah, I mean, if if you want to go
Speaker 5: to a graduate school, find someone else to pay for it,
Speaker 5: if your parents are able to pay for it, if
Speaker 5: your employer is able to pay for it, if you
Speaker 5: can go to a state program that doesn't cost a
Speaker 5: lot of money, then you know, then in some ways
Speaker 5: it could be an easy decision, but you have to
Speaker 5: do this calculus. And you know, some of the borrowers
Speaker 5: we spoke to in the story, they just weren't sure
Speaker 5: what to do after college, and they thought that these
Speaker 5: degrees would give them higher earnings, and it just doesn't
Speaker 5: always happen that way.
Speaker 3: Gosh, you talk about Brielle in your story, who went
Speaker 3: to Eckard College in twenty twelve. Anyway, she went off
Speaker 3: to get a law degree. I mean, you note Janet
Speaker 3: that she says it's going to take until twenty forty
Speaker 3: five to pay off her loan. She got a law degree, right,
Speaker 3: and she expects it to grow to about two hundred
Speaker 3: and forty five thousand dollars worth interest. I mean that's
Speaker 3: some serious money.
Speaker 5: Yeah, and she found a job that with a law
Speaker 5: firm that she really enjoys. But as it turns out,
Speaker 5: it doesn't require a law degree. It's working in comple flience,
Speaker 5: which was something she would not have found otherwise if
Speaker 5: she hadn't gone to law school. But you know, it's
Speaker 5: just it's just a calculus and in some cases the
Speaker 5: risk that people are taking because they thought it would
Speaker 5: it would pay off, and it doesn't always pay off.
Speaker 4: What we have you can we talk about another story
Speaker 4: you wrote. Uh, the school that is so steeped in
Speaker 4: wells and prestige has also been steeped in scandal and
Speaker 4: now searching for a new president. The area in which
Speaker 4: it resides in and which it's so connected to, the
Speaker 4: US tech epicenter also going through a reboot that will
Speaker 4: no doubt impact Stanford as well. Talk to me about
Speaker 4: the standing of this institution in our world at large
Speaker 4: and how that might change. Uh if given all these factors.
Speaker 5: Well, Stanford is going to be just fine.
Speaker 3: There's going okay, all right, We're just gonna.
Speaker 5: Get They're going to get a good president. You know,
Speaker 5: tens of thousands of kids are still clamoring to go there.
Speaker 5: But they've had to deal with a lot of a
Speaker 5: lot of scandals. Frankly, their president resigned. He there were
Speaker 5: a lot of questions in his research. He's a really
Speaker 5: prominent UH scientist, and he actually had to retract a
Speaker 5: couple of articles, which is a pretty big deal in
Speaker 5: the scientific community and the and this was all discovered
Speaker 5: in the student newspaper, which is really impressive. And a
Speaker 5: lot of the big scandals in tech or you know,
Speaker 5: the Stanford name is dragged into it ft X, the
Speaker 5: Crypto Exchange. That's you know, Sam bankmin Fred is going
Speaker 5: on trial next week his parents. Our law schools there
Speaker 5: in our Bloomberg colleagues had a great story a few
Speaker 5: weeks ago about their involvement. Of course, there's you know,
Speaker 5: Stanford dropout had a big tie to Silicon Valley, and
Speaker 5: there's just a lot of stuff going on there. So
Speaker 5: you know, we'll see. But Stanford raises more money in
Speaker 5: some years than Harvard. They get more you know, government
Speaker 5: research funding than schools that are hundreds of years older
Speaker 5: than them. You know, in one sense, you know, four
Speaker 5: Nobel Prizes in the last couple of years raising a
Speaker 5: billion dollars. But on the other hand, you know there's
Speaker 5: a lot going on there.
Speaker 3: Yeah, I love Stanford's fundraising alone over the last six
Speaker 3: fiscal years exceeded seven billion dollars. Pretty serious money. And
Speaker 3: I have to say, when Bloomberg BusinessWeek does the annual
Speaker 3: NBA survey, it is often number one, and I think
Speaker 3: as well, Yes, it's consistently number one, So it's kind
Speaker 3: of where students want to go, and they seem to
Speaker 3: like it a lot. Jennet Lauren, thank you so much.
Speaker 3: Have a good and safe weekend. Higher Education Finance reporter
Speaker 3: app Blomberg News. Joining us on zoom from New York City.
Speaker 3: I'm Carol Massa along with Simone Foxman in for Tim Stenevik.
Speaker 3: You're listening and watching Bloomberg Radio.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 3: When it comes to newsflow, there's a lot. When it
Speaker 3: comes to anything and everything to do with AI, the
Speaker 3: European Union, in fact checking, out and examining alleged anti
Speaker 3: competitive abuses and ships used for AI. It's a market
Speaker 3: that we know is dominated by Nvidia, even so maybe
Speaker 3: some concerns. We'll see where that goes. It may go nowhere.
Speaker 3: The world does seem to be all in when it
Speaker 3: comes to artificial intelligence. That Our next guest works with
Speaker 3: companies to better use data nai efficiency, yes, but also
Speaker 3: to help companies become more sustainable. So let's get to it.
Speaker 3: Our guest is Christina Shims. She has Global HAAD, a
Speaker 3: product and strategy at IMBM Sustainability Software. She is with
Speaker 3: us on Zoom in Atlanta. Christina, Yeah, good to have
Speaker 3: you here with us. Tell us a little bit about
Speaker 3: what you guys are doing when it comes to AI
Speaker 3: and helping companies to be more sustainable.
Speaker 6: Absolutely, thanks for having me.
Speaker 3: Yeah.
Speaker 7: So, look, sustainability is one of those things that is
Speaker 7: not going away with anything. It's becoming more and more
Speaker 7: of an issue. We're seeing it affect everyone from communities
Speaker 7: to businesses, to governments and regulations coming out. You're seeing
Speaker 7: it with extreme weather. You're seeing that in New York
Speaker 7: today with the flooding and the rain that's happening and
Speaker 7: this past summer was the hottest.
Speaker 6: In recorded history.
Speaker 7: And so what we are doing is ensuring that we
Speaker 7: can work with our partners to make sure that they
Speaker 7: are headed towards and leveraging technology in reaching their sustainability goals.
Speaker 7: More than two thirds of employees wanting now work for
Speaker 7: companies that have sustainability goals committed towards.
Speaker 3: But what does that mean? So what does it mean
Speaker 3: when you are helping them? Like, what specifically? Give us
Speaker 3: an idea if you would an example.
Speaker 7: Yeah, absolutely, So, Look, the biggest challenge here is data. Basically,
Speaker 7: organizations have a really difficult time working through multiple different silos.
Speaker 7: I'm talking hundreds of different systems and spreadsheets all around
Speaker 7: the organizations to really get a sense for where the
Speaker 7: baseline is.
Speaker 6: For their sustainability posture.
Speaker 7: So, if you have hundreds of different systems where you
Speaker 7: have data, you can't necessarily make sense of it in
Speaker 7: one single system of record. It's really difficult for organizations
Speaker 7: to understand where they are, where they need to go,
Speaker 7: and how to get there. And so while organizations have
Speaker 7: these committed sustainability targets, they also have to think about
Speaker 7: it as core to the business. This is not just
Speaker 7: good for good's sake. It's also good for business, and
Speaker 7: so what AI helps to do is to unlock the
Speaker 7: potential of all of that data. One is, how do
Speaker 7: you make sure that you are bringing all that data
Speaker 7: into that single system of records so that you can
Speaker 7: understand where you are, where you need to go, and
Speaker 7: how to get there and how to get there? Is
Speaker 7: what are the insights that you are able to draw
Speaker 7: from the data so that.
Speaker 6: You can actually action on it.
Speaker 7: Right now, there's not a lot of time, I want
Speaker 7: to say, not a lot of time left. We have
Speaker 7: to act very quickly and urgently around climate and towards
Speaker 7: sustainability for businesses and for communities. And unlocking the potential
Speaker 7: of all of that data through AI is where this
Speaker 7: is all going. And that's what we do with our
Speaker 7: partners and our customers to help enable that.
Speaker 4: Okay, but this doesn't sound that sexy to some degree,
Speaker 4: like this sounds like data management, data crunching. What about
Speaker 4: this is like artificial intelligence?
Speaker 6: Yeah, so AI really helps.
Speaker 7: It's not I joke that it's really the non sexy stuff,
Speaker 7: but that's really what helps us to get towards the
Speaker 7: action that's needed. So AI enables better and faster decisions
Speaker 7: on both the sustainability and on the business front. It
Speaker 7: helps across a couple areas, right, so you mentioned the efficiencies. Yes,
Speaker 7: it helps with energy costs, it helps with emissions. It
Speaker 7: can help to do a couple things like monitor and
Speaker 7: make pain physical assets around your infrastructure, around your factory.
Speaker 6: Things like that.
Speaker 7: It can optimize how inventory is routed around the world.
Speaker 7: It can detect anomalies that drive zo defect goals, right,
Speaker 7: It can write how computing, It can schedule task So yeah,
Speaker 7: these are not really sexy things to do, but at
Speaker 7: the end of the day, this is what really helps
Speaker 7: to make a difference in actioning what that zero commitment
Speaker 7: or what goals organizations help set.
Speaker 3: Christy to help us though, because AI not a new thing,
Speaker 3: been around for decades, right, artificial intelligence, and so we
Speaker 3: always kind of remind everybody, but the world has become
Speaker 3: so excited with generative AI and how that takes us
Speaker 3: maybe to a different level in terms of data management
Speaker 3: and usefulness. So what has changed in terms of you
Speaker 3: guys have been working with AI for a long time,
Speaker 3: no doubt about it. Has something changed though in your
Speaker 3: ability to help customers when it comes to maintaining their
Speaker 3: sustainability targets are monitoring of those targets.
Speaker 6: Yeah, so that's a great question.
Speaker 7: One is that increasingly customers are more inclined to think
Speaker 7: about how generative AI can actually help them with their
Speaker 7: business and sustainability problems. There's much more appetite for customers
Speaker 7: to inherently and intentionally use AI for these problems. Two
Speaker 7: is that it can help make the automation and reporting
Speaker 7: of data and decreasing of emissions much faster and increasingly,
Speaker 7: I would say, especially in the last few years, even
Speaker 7: before generative AI became the hot topic or the trendy topic,
Speaker 7: customers were already starting to think about it because regulations and.
Speaker 6: Compliance were coming out.
Speaker 7: But this is really catapulted and accelerated, I would say
Speaker 7: in the last year or so, you're seeing regulations come
Speaker 7: out in the EU, increasingly in the US. You saw
Speaker 7: what happened this past month in California with their emissions law,
Speaker 7: and so using foundation models and using AI can actually
Speaker 7: help to solve these problems faster. But also appetite from
Speaker 7: the customer side has changed quite a bit. And so
Speaker 7: I think a combination of how we are addressing AI
Speaker 7: as part of what we're doing and increasing kind of
Speaker 7: the acceleration of that using foundation models with assisting products
Speaker 7: and new products.
Speaker 3: Does you know what I wonder? Does it move the
Speaker 3: needle for you guys at IBM financially, I mean, has
Speaker 3: generative AI and then when it comes to sustainability needs
Speaker 3: of customers, does that create a significant new revenue stream
Speaker 3: for you guys? And we just got about thirty seconds.
Speaker 7: Yeah, I will say that there's a real hunger for this, right,
Speaker 7: there's a real appetite, there's a real hunger for this,
Speaker 7: and customers know that this is a game changer, so they.
Speaker 6: Will do that.
Speaker 7: They will they will inherently look to adopt the technology
Speaker 7: in a way that they know has meaning in both
Speaker 7: their business and sustainability. And they know that we are
Speaker 7: working with them to ensure that we're doing this in
Speaker 7: an unpliased and a transparent way because I know that
Speaker 7: there are some areas of AI that you know, we
Speaker 7: need to make sure that we're doing it in the
Speaker 7: right way. And so the customers that are most for
Speaker 7: leaning and really interested in this, which I would say
Speaker 7: all the customers that we're talking to are, so they're
Speaker 7: making sure that they're integrating that as part of it,
Speaker 7: with that increased apple and intentionality, and I think that
Speaker 7: that is where the market is and where the appetite.
Speaker 5: Is for sure.
Speaker 3: All Right, appreciate that some context. Christina Shim, Global head
Speaker 3: of Product and Strategy and IBM Sustainability Software, joining us
Speaker 3: in zoom in Atlanta. I always feel like time will
Speaker 3: tell I kind of like chatbots, but we'll see.
Speaker 4: But it would be good if people wanted to save
Speaker 4: the environment, because it's cool.
Speaker 3: All in on that. This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 1: Just say Alexa, play Bloomberg eleven thirty to love.
Speaker 3: All right, everybody's public you me. Everyone remains largely in
Speaker 3: the dark about a process in the making of plastic.
Speaker 3: It is known as fluorination and the toxics pfas that
Speaker 3: are generated in the process. Those PFA's compounds found to
Speaker 3: be so dangerous that the US Environmental Protection Agency had
Speaker 3: moved to effectively ban them. Back in twenty fifteen, there
Speaker 3: is one company, little known that seems to be at
Speaker 3: the center of it. Got to get to this story.
Speaker 3: It is a feature in the new issue of Bloomberg
Speaker 3: Business Week, on newsstands, online at Bloomberg dot com, slash
Speaker 3: business Week, and on the Bloomberg with Us. To talk
Speaker 3: about it is Bloomberg News reporter Esme Duprez and also
Speaker 3: the editor of Bloomberg Business Week, Jill Weber on zoom
Speaker 3: in New York City. Jill, I feel like you just
Speaker 3: keep bringing to me and to our audience stories about
Speaker 3: things that make me a little worried, whether it's the
Speaker 3: Google search abilities and location abilities, or whether it's plastic
Speaker 3: and how is that maybe impacting me?
Speaker 2: Yeah, so as many as reporting on this story is
Speaker 2: sensational and it will really terrify everyone. And I've spent
Speaker 2: the past few weeks since reading this the first version
Speaker 2: of the story like going through my life and just
Speaker 2: basically like flipping over every plastic bottle and container and
Speaker 2: looking for a number two symbol, as may why is
Speaker 2: number two a problem?
Speaker 8: Yeah?
Speaker 9: Well that's a big picture. I mean, this story is
Speaker 9: about pfas, which are these enormous, you know, this enormous
Speaker 9: class of man made chemicals that have been used for
Speaker 9: decades to make all kinds of things you know better,
Speaker 9: but scientists are increasingly ringing alarm bills about them as
Speaker 9: we learn how toxic they are and the ways in
Speaker 9: which they harm our bodies and the environment. So this, uh,
Speaker 9: the story really is about the scientific discovery of a
Speaker 9: new root of exposure to p fas. And how there's
Speaker 9: just one company, Carol, as you said, in the US
Speaker 9: A responsible for making them, or for generating these illegal
Speaker 9: toxic compounds, and how despite demands from the US government
Speaker 9: and the Department of Justice EPA, the company just flat
Speaker 9: out refused to stop. And that number two symbol is
Speaker 9: really important because that's the type of plastic that this
Speaker 9: company typically treats. It's called HDPE plastic. It's rigid, it's
Speaker 9: usually opaque. It's used for everything from milk judge jugs
Speaker 9: to snowboards, and that's typically the plastic that they're treating
Speaker 9: and as a result, generating pfas and some of the
Speaker 9: worst p fas at that.
Speaker 2: So as may so much of your reporting is terrifying.
Speaker 2: But how big is this company who owns the why
Speaker 2: hasn't the EPA just managed to shut it down if
Speaker 2: all this stuff is so troubling.
Speaker 9: Yeah, that's a great question. So Enhanced Technologies is actually
Speaker 9: a really small company. I got a hold of some
Speaker 9: documents from twenty eighteen. It showed they just had forty
Speaker 9: six million dollars in annual revenue in twenty eighteen. So
Speaker 9: obviously that's not a ton They only have a few
Speaker 9: hundred employees. But they really built up this domestic monopoly
Speaker 9: on this process called postmodilorination, which is this treatment of
Speaker 9: plastic to make it stronger, and like, this treatment is
Speaker 9: actually really useful. Uh, you know, plenty of companies have
Speaker 9: wanted this treatment for decades because it makes plastics less permeable,
Speaker 9: so you can transport you know, harsh chemicals and solvents
Speaker 9: and things like essential oils. You know, the reason for
Speaker 9: fluorination is that conventional plastic will permeate through the container
Speaker 9: walls if you don't provide a barrier of some sort.
Speaker 9: So that's the reason why they're fluorinating their plastic. That's
Speaker 9: why they're they're treating this plastic in this way, right,
Speaker 9: And so the EPA has gone after them and uh,
Speaker 9: you know, so as the Justice Department, they have essentially
Speaker 9: they're they're in violation of a really you know, wonky
Speaker 9: chemical law and basically they just they say this law
Speaker 9: doesn't apply to us, and so we're just going to continue,
Speaker 9: you know, going on business as usual. Obviously as they
Speaker 9: fight this you know, this battle with EPA and now
Speaker 9: they fight this litigation in in federal court.
Speaker 2: So the the litigation obviously makes this incredibly timely. Is
Speaker 2: there any sense of what the what the outcome of
Speaker 2: this looks like for the timeline and also like what
Speaker 2: about the health implications and the economic implications of whatever
Speaker 2: the outcome becomes.
Speaker 9: Yeah, so the litigation is ongoing, so Enhanced kind of
Speaker 9: is fighting two battles. They're fighting one battle against the
Speaker 9: EPA itself to try to get official clearance to continue florinating.
Speaker 9: There is a process for if you're generating these quote
Speaker 9: unquote long chain p fast compounds, which are kind of
Speaker 9: the worst of the worst, you can apply there is
Speaker 9: an effective ban on them, but you can apply to
Speaker 9: the EPA to kind of get an exemption. So that's
Speaker 9: what they are trying to get. So they're kind of
Speaker 9: fighting that battle. On one hand, and then they're fighting
Speaker 9: this other battle on their other hand against the DOJ
Speaker 9: in court and saying we're not you know, they're trying
Speaker 9: to convince a judge that the law that the EPA
Speaker 9: says they're breaking, that the DJ says they're breaking, that
Speaker 9: they are exempt from it. So they have who main
Speaker 9: arguments one, I mean, again it gets a little wonky,
Speaker 9: but they say, you know, you can a VPA only
Speaker 9: has the authority to regulate significant new uses of these chemicals,
Speaker 9: and they've been doing this for forty years, so they're not
Speaker 9: that doesn't qualify as new in their mind. And then yeah,
Speaker 9: so that's kind of their main argument. They're also saying that,
Speaker 9: you know that the quantities of these chemicals that they're
Speaker 9: generating are so small and they are quote unquote impurities,
Speaker 9: so they don't, you know, qualify for the law.
Speaker 3: I keep wondering, Wait, my government, I pay taxes, who's
Speaker 3: watching out for me? But having said that, sorry, I'll
Speaker 3: get off my soapbox. As may you are, Bloomberg New
Speaker 3: Senior Investigations reporter. In your investigations, I'm thinking of people
Speaker 3: who are listening and watching to this, and I'm just
Speaker 3: curious size and scope. So how widespread is the use
Speaker 3: Jill talked about going through his containers, I'm wondering. I look,
Speaker 3: you know, I turned something upside down. I see that
Speaker 3: recycle or whatever that code is, and I think, oh,
Speaker 3: I'm good. So give us some size and scope in
Speaker 3: terms of the types of containers, uh, and the different
Speaker 3: industries that are using it, and how you know is
Speaker 3: it likely on all of our shelves.
Speaker 9: Yeah, so it's it's quite hard to say for sure
Speaker 9: because Enhanced is owned by a private equity firm. Going
Speaker 9: back to your question, Jrol, sorry to answer that. So
Speaker 9: they're owned by private equity firms, a private company, they
Speaker 9: don't have to publicly disclose their customers, and the EPA
Speaker 9: has a list of their customers and what the fluorinated
Speaker 9: plastics are used for, but they call it confidential business information.
Speaker 9: So when we ask for it, they said no. But basically,
Speaker 9: Enhanced says they fluorinate more than two hundred million plastic
Speaker 9: items every year. A lot of those containers are used
Speaker 9: in the agricultural chemical industry, so for things like pesticides
Speaker 9: and other harsh chemicals. But our investigation found that these
Speaker 9: items that they florinate touch virtually every facet of US economy.
Speaker 9: You know, they're used to hold weed, killers, gasoline, household cleaners, cosmetics, shampoo.
Speaker 9: We actually had some independent testing done on two shampoo
Speaker 9: bottles of companies and Bumble and Bumble and OGX Beauty
Speaker 9: that I had reason to believe my beflorignated, and indeed
Speaker 9: the results came back positive. So it's shampoo, you know,
Speaker 9: it's it's body wash. So lots of things, I mean
Speaker 9: enhanced says. So when you're when you're at home kind
Speaker 9: of going through your shelves and you know, figuring out
Speaker 9: whether you may have chlorinated plastic, you want to look
Speaker 9: for again that number two symbol that is that is
Speaker 9: the recycling code for h GPE. And then you want
Speaker 9: to go to the ingredient list. You want to look
Speaker 9: and see, you know, does it have essentral oils, pine oil,
Speaker 9: citrus oils. There's a really widely used citrus derivative called
Speaker 9: dley Mornin, and that's in a ton of you know, soaps,
Speaker 9: and uh, I see, yeah, it's it's in a ton
Speaker 9: of stuff, so you might want to, you know, look there.
Speaker 9: I was also able to find the names of some
Speaker 9: companies that Enhance has named as end users of the
Speaker 9: company's treated plastics, and those included Bath Bath and Bodyworks
Speaker 9: BAY or BMW, s A latter Hussavarna and moreal So,
Speaker 9: we're talking really really wide penetration. This goes way way
Speaker 9: farther than mosquito spray, which is which is the initial
Speaker 9: product that we that was what led to the whole
Speaker 9: discovery was mosquito spray.
Speaker 4: Asmis What are the health implications of this? What happens
Speaker 4: if these p fast I guess get in your bloodstream?
Speaker 3: Like where does this go if you were affected by it?
Speaker 9: Yeah, So, for all that we know today about the
Speaker 9: fast universe, it is really important to say, like there
Speaker 9: is so so much more that we don't yet know,
Speaker 9: so much more that we have let to get to
Speaker 9: learn and to discover. However, we do know that p
Speaker 9: fas are really good at getting into our bodies and
Speaker 9: sticking around. So it's not like, you know, even like
Speaker 9: caffeine or even lead, I mean, your body you know,
Speaker 9: gradually gets rid of those things. P FAST They're really
Speaker 9: good at sticking around in our bloods, They're really good
Speaker 9: at sticking around in the environment. They're really good at
Speaker 9: sticking around in water and it's really hard to get
Speaker 9: them out. So, you know, we now have enough long
Speaker 9: term data to link p fast exposure to really bad
Speaker 9: things like cancer, birth effects in fertility. Now we're talking
Speaker 9: a really really big class of chemicals. We don't have
Speaker 9: the data to show that all p fas caused those things,
Speaker 9: but the data that we do have is very disconcerting.
Speaker 9: And certainly for these long chain p faas, which is
Speaker 9: the specific subclass of p fas that fluorination of plastic generates,
Speaker 9: those are definitely the worst of the worst, and they
Speaker 9: are the ones that are you know, the data is
Speaker 9: showing a most strong correlation with things like with things
Speaker 9: like cancer.
Speaker 2: And of course, I think, you know, one of the
Speaker 2: most other frightening, troubling problem problems that the esme's reporting
Speaker 2: reveals is if the EPA is successful and this company
Speaker 2: disappears from the market, the implications for all these companies
Speaker 2: and how we deal with consumer products in general are
Speaker 2: is also going to be a big problem. It's like,
Speaker 2: you know, there's so much popic in the world, and
Speaker 2: here we are having to figure out perhaps a health
Speaker 2: implication we hadn't ever anticipated.
Speaker 3: A great investigative piece Bloomberg News senior investigations reporter Esme Duprez,
Speaker 3: and of course the editor of Bloomberg Business Week Jail
Speaker 3: whereber check it out. It's in the current issue. This
Speaker 3: is Bloomberg.
Speaker 5: Mark a journal.
Speaker 8: How about you let me drive?
Speaker 7: Oh no, no, no, no, who's going to drive?
Speaker 4: Honey?
Speaker 1: Please? How do the riding gravels? Let's mate, I want
Speaker 1: to drive.
Speaker 9: It's a good question time session.
Speaker 1: This is the drive to the Globe.
Speaker 6: Dot com for me. I think we'll buy around.
Speaker 1: On Bloomberg Radio.
Speaker 3: All right, everybody, just about eighteen minutes left to go
Speaker 3: in the Friday trading sessions. We're getting ready to wrap
Speaker 3: up the day, the week, and actually the third quarter.
Speaker 4: And it's going to be looking like a negative end
Speaker 4: for the S and P five hundred and the Dow Jones.
Speaker 4: So uh, not necessarily optimism on this rainy Friday, at
Speaker 4: least here in New York.
Speaker 3: No, it's been a wacky third quarter, to be quite honest.
Speaker 3: So let's get to it. Michael Sheldon is back with US,
Speaker 3: executive director and chief investment Officer for High Tower RDM
Speaker 3: Financial Group. He is back with US on Zoom in
Speaker 3: West Connecticut. Michael how are you.
Speaker 8: Fine? Thanks? Trying to stay drying up here. It's probably
Speaker 8: pouring in the city.
Speaker 3: Also, it's crazy and we're all just, you know, trying
Speaker 3: to figure out how we're going to ultimately get home.
Speaker 3: But we'll get through it. We'll get through it, just
Speaker 3: like we'll get through this year in this market environment.
Speaker 3: It was an interesting day where I think there was
Speaker 3: some relief coming off of the core PC number. We
Speaker 3: know that's an important read for the US Central Bank.
Speaker 3: And then we had the New York Fed President come
Speaker 3: out and talking and reminding us about hire for longer,
Speaker 3: And I think now I almost feel like in Mike
Speaker 3: Michael mcke or Michael McKey pointed out this idea of
Speaker 3: I guess we're trying to figure out what higher for
Speaker 3: longer ultimately means longer? Is it a couple of months,
Speaker 3: six months a year? How do you see it?
Speaker 8: Well, I think sort of first looking at the markets,
Speaker 8: I think September has lived up to its reputation as
Speaker 8: being a difficult month for the markets, and we had
Speaker 8: a pretty good first few months of the year, but
Speaker 8: things that sort of tailed off here recently in terms
Speaker 8: of Fed policy, we had we've had five and a
Speaker 8: quarter percent points of rate increases over the past year
Speaker 8: and a half, and one of the things we wonder
Speaker 8: about is how much that is really truly filtered into
Speaker 8: the overall economy. So one thing that's important for investors
Speaker 8: to remember is we are towards the tail end of
Speaker 8: this aggressive rate hiking cycle, and I'm not sure if
Speaker 8: we're going to get one more rate hike or not.
Speaker 8: That's a possibility. By the way, the government shutdown could
Speaker 8: basically delay some of the important economic data that the
Speaker 8: FED needs, so that's something to keep an eye on.
Speaker 8: But I think we could get one more rate hike
Speaker 8: and then the FED would probably go on hold. I
Speaker 8: will tell you that historically, at least looking at the
Speaker 8: past thirteen rate hiking cycles, once the FED has stopped
Speaker 8: raising rates, they've actually started cutting rates on average about
Speaker 8: eight months later. So if the last rate hike was
Speaker 8: in September, that means the first rate cut would be
Speaker 8: on May. In May of next year, although this is
Speaker 8: anything but a normal cycle.
Speaker 4: Yeah, so then if they hike once more, we're looking
Speaker 4: at maybe July middle of next year. I mean, the
Speaker 4: question I have for you, though, is the one you raised.
Speaker 4: Do you think that all of this aggressive tightening has
Speaker 4: really played into what we're seeing among consumers, among corporate behavior,
Speaker 4: or do you think there's more that we just haven't
Speaker 4: seen yet.
Speaker 8: Yeah, that's a tough call. I mean, coming into this year,
Speaker 8: the consensus opinion and there was every reason to think
Speaker 8: that we were going to be headed for a downturn
Speaker 8: in the economy somewhere in the middle of the year.
Speaker 8: And a lot of those economic statistics, whether you look
Speaker 8: at the yield curve, leaning Economic Index, that Senior Loan Survey,
Speaker 8: those sort of indicators still points to some period of weakness.
Speaker 8: But the economy has been incredibly resilient and really on
Speaker 8: the heels of the US consumer. We have seen some
Speaker 8: pockets of weakness in areas like housing and manufacturing, and
Speaker 8: those are certainly areas to watch, I think in terms
Speaker 8: of the consumer, that's still really the lynchpin right now.
Speaker 8: You know, if you look at the monthly numbers, and
Speaker 8: we'll get out the jobs numbers next Friday, they have
Speaker 8: been slowing, but the weekly job la claims are close
Speaker 8: to the lowest levels we've seen in some times. So
Speaker 8: it is a mixed picture, and I think we need
Speaker 8: to keep an eye on the consumer.
Speaker 3: I think someone brings up a really good point. Like
Speaker 3: we talked so long coming off the pandemic about all
Speaker 3: the labor hoarding that was going on because employees are employers.
Speaker 3: Excuse me, We're so concerned about being able to find
Speaker 3: the workers they needed because it was such a tight
Speaker 3: laborer market. Do you think corporations are in that same
Speaker 3: situation that they'll hold on of workers a little bit
Speaker 3: more if they're not quite sure which way we are
Speaker 3: going to go, rather than quickly make the moves to
Speaker 3: make sure that their balance sheets look good to investors.
Speaker 8: Yeah, I think you're going to see some of that
Speaker 8: in terms of the job market. If you look at
Speaker 8: the JOLT data which comes out that's the job opening
Speaker 8: in labor turnover numbers. Those come out next Tuesday, So
Speaker 8: that'll also give us some additional sense on the sort
Speaker 8: of availability of workers in labor.
Speaker 3: Do you trust me? Let me just break in for
Speaker 3: a sec. Because we had a great Bloomberg story on
Speaker 3: the terminal about ghosting, like ghosting in terms of job
Speaker 3: hostings where people would apply for listings and then like
Speaker 3: kind of never hear anything or they'd go away, and
Speaker 3: so it kind of feeds into Michael, the idea that
Speaker 3: do we trust the labor data that we're seeing from
Speaker 3: the You know that there's been some debate about is
Speaker 3: it really painting an accurate picture? So go ahead, continue on.
Speaker 8: That's a good point. About a year ago or a
Speaker 8: year and a half ago, I did read a report
Speaker 8: that was put out by the BLS, So there was
Speaker 8: a lot of talk about with the with the demand
Speaker 8: for workers so strong, which is really unprecedented in the
Speaker 8: last twenty years or so. But remember the Jolt state
Speaker 8: only goes back to about two thousand, so we don't
Speaker 8: have a multi decade track record for this. But there
Speaker 8: was a report I believe that the BLS put out
Speaker 8: saying that they believed the data they were providing was accurate,
Speaker 8: meaning there was a strong demand for workers that wasn't
Speaker 8: being filled. So I think we can only go by that.
Speaker 8: I mean, there are a lot of anecdotal reports out
Speaker 8: there as well, which we need to watch. There are
Speaker 8: other things that supply chain issues are improving. We see
Speaker 8: prices coming down. For example, the core PCE today came
Speaker 8: down at three point nine percent, which is the lowest
Speaker 8: since twenty twenty. So parts of the economy are softening up,
Speaker 8: which it means seen only likely that the demand for
Speaker 8: workers should slow somewhat compared to what we've seen over
Speaker 8: the past couple of years coming out of the pandemic.
Speaker 4: Do you think that companies have done enough to prepare
Speaker 4: for this would be recession or downturn that even if
Speaker 4: we get sort of the official definition of a recession,
Speaker 4: you know that they're prepared and that the earnings recession
Speaker 4: is potentially over.
Speaker 8: Well, that's a good question. I think you did see
Speaker 8: some of about six months to a year ago. You
Speaker 8: did see, especially some of the larger technology companies start
Speaker 8: to take the initiative and downsize. They probably hire too
Speaker 8: aggressively coming out of out of COVID, and they started
Speaker 8: to downsize some of their some of their hirings, and
Speaker 8: that's help profitability. So margins will certainly be important to
Speaker 8: watch in terms of the markets. I think one of
Speaker 8: the most important things going forward is earnings This year
Speaker 8: are currently forecasts to be flatish, but looking ahead to
Speaker 8: twenty twenty four and twenty five, corporate profits are currently
Speaker 8: forecast to jump double digits. So we do have some
Speaker 8: important headwinds right now from higher interest rates, the dollar
Speaker 8: and oil prices, but I will keep a close eye
Speaker 8: on corporate profits because stocks tend to follow the direction
Speaker 8: of profits, at least over time.
Speaker 3: I think I agree with you. That's a fundamental that
Speaker 3: really will drive potentially investor decisions. Having said that, b
Speaker 3: of A Michael out with their latest when it comes
Speaker 3: to global investment flows, global equities had inflows driven by
Speaker 3: US stocks, while all other ASEAD classes severed outflows. This
Speaker 3: is for the week ending two September twenty seventh, again
Speaker 3: from BAA, and this will also included the first withdrawals
Speaker 3: for bonds in twenty seven weeks. Just thirty seconds. What's
Speaker 3: your investment thesis here and play well.
Speaker 8: I think on the fixed income side, if you haven't
Speaker 8: already extended your duration, you want to start thinking about
Speaker 8: that because interest rates are the highest level in several years.
Speaker 8: Money market rates tend to follow the direction of the
Speaker 8: Fed funds rates, so ultimately when the Fed cuts rates
Speaker 8: down the road, you want to start adding some duration
Speaker 8: to your portfolios to lock in these higher yields. And
Speaker 8: that's an important part of your portfolio. You know that
Speaker 8: goes along with stocks over time.
Speaker 3: All right, But you're not ruling out stocks ten seconds now.
Speaker 8: I think we're sort of an arrange bound market right now,
Speaker 8: probably forty two to forty three hundred on the low side. Well,
Speaker 8: we have some headwinds right now. Keep an eye on
Speaker 8: the SED. We're starting the FEDS towards the end of
Speaker 8: its rate cycle. Interest rates will ultimately peak, and aflation
Speaker 8: is coming down.
Speaker 3: All right, Have a dry and safe weekend. Michael Sheldon,
Speaker 3: Executive Director, chief Investment Officer at High Tower RDM Financial
Speaker 3: Group on zoom in Westport, Connecticut.
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