Speaker 1: This is Bloomberg Business Week Daily, reporting from the magazine
Speaker 1: that helps global leaders stay ahead with insight on the people, companies,
Speaker 1: and trends shaping today's complex economy. Plus global business finance
Speaker 1: and tech news as it happens. Bloomberg Business Week Daily
Speaker 1: with Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 2: Hi, everyone, welcome to the weekend edition of Bloomberg Business Week.
Speaker 2: This week mark the first one hundred days of President
Speaker 2: Trump in office his second term, something we dig into
Speaker 2: along with his tough talk and actions on tariffs and
Speaker 2: the uncertainty that ensued.
Speaker 3: Also, most of the remaining mag savit, including Microsoft, Meta, Apple,
Speaker 3: and Amazon, all reporting earninggs. We highlight Apple and its
Speaker 3: legendary supply chain that may get a big reboot.
Speaker 2: Plus the Saudi Prince who's back in the spotlight and
Speaker 2: also happens to be friends with President Trump's first buddy.
Speaker 3: And from Grand American resorts to lux cruzes offering up
Speaker 3: diamond dust facials and bottomless caveat are in Champagne, the
Speaker 3: Bloomberg Pursuits team on the travel guide to Maximize your Summer.
Speaker 2: That's pretty good to be I was going to say
Speaker 2: sign you up right totally totally.
Speaker 1: Hey.
Speaker 2: First up, As we mentioned, this week mark President Trump's
Speaker 2: first one hundred days in office. It's a period that
Speaker 2: has included an avalanche of executive orders that started on
Speaker 2: inauguration day, letting go of federal workers, hiring back some,
Speaker 2: scaling back departments, then kind of beefing them up again
Speaker 2: kind of, I guess, introducing tariffs, then dropping back on some,
Speaker 2: and just generally taking actions that are potentially reshaping the
Speaker 2: US government and how it's viewed around the world.
Speaker 3: We broke down President Trump's second term so far with
Speaker 3: Bloomberg News national politics reporter Hadrianna Loenkron and Beth Fuey,
Speaker 3: partner at FGS Global. She's in the company's strategic communications division,
Speaker 3: where she advises clients on messaging and media strategy and
Speaker 3: reported on politics for years at many outlets, including CNN
Speaker 3: and The Associated Press.
Speaker 2: You know, Beth, I wonder what's more important, meaning whether
Speaker 2: or not he has had the president that is, successes
Speaker 2: are failures in the first one hundred days, or whether
Speaker 2: or not we look at the first one hundred days
Speaker 2: as an indicator of what's to come in the next
Speaker 2: three and a half or more than three and a
Speaker 2: half years of what's left in the Trump White House.
Speaker 4: Well, look, most of the success of a presidential administration
Speaker 4: really is in the early part of the administration, when
Speaker 4: the president typically has the highest job approval. Congress is
Speaker 4: more than willing, especially Congress like this a fully Republican
Speaker 4: the president's own party, willing to let the president's agenda
Speaker 4: take precedence. It typically slows down after the early days
Speaker 4: of the first part of the administration. President Trump, as
Speaker 4: we've all discussed, has done more than probably any other
Speaker 4: president in one hundred days to make his mark. The
Speaker 4: question is how long is that going to last. Much
Speaker 4: of it's being challenged in court. We've seen poll after
Speaker 4: poll after poll showing President Trump is losing popularity quickly,
Speaker 4: that many of the things that he has undertaken in
Speaker 4: this first hundred days have been met by skepticism and
Speaker 4: frankly fear by a lot of Americans. So it's unclear
Speaker 4: whether he's going to be able to keep this up
Speaker 4: for much longer.
Speaker 3: Heyron to give us, as we do reflect on these
Speaker 3: first one hundred days, give us what you see as
Speaker 3: some of the successes, some of the wins, but also
Speaker 3: areas where the president really has not succeeded some of
Speaker 3: those losses in the first one hundred days.
Speaker 5: Absolutely, and as someone I mean I covered him very
Speaker 5: closely on the campaign trail, and I think that there
Speaker 5: are some things that he said he would do that
Speaker 5: he has headed in that direction of the border is
Speaker 5: the first thing that comes to mind, and that was
Speaker 5: something where even when I was talking to people and voters,
Speaker 5: it was often ranked above the economy for them, whether
Speaker 5: they were in Iowa or they were in Phoenix. And
Speaker 5: so this was something where we can see the border
Speaker 5: crossings have gone down. On the deportation front, those numbers
Speaker 5: appeared to have also gone down. And so you know,
Speaker 5: has he hit the millions and millions of numbers that
Speaker 5: he's touted that has not yet happened happened, but his
Speaker 5: administration has pointed to the border crossings as an area
Speaker 5: of success. And then, as we all know, the tariffs,
Speaker 5: tariffs or something that he has said he would do
Speaker 5: on the campaign trail, and he has done them in
Speaker 5: a sense that you know, he has put in some
Speaker 5: of those terraffs and he's flip flopped and taken some back.
Speaker 5: He's offered pauses for some exemptions, and really that's offered
Speaker 5: a lot of confusion for the markets as we all know.
Speaker 5: And more importantly then the question is what does that
Speaker 5: mean going forward? Does that suggest to other industries that
Speaker 5: they can come in and you know, have meetings and
Speaker 5: then they can get some of the same reductions that
Speaker 5: people just recently in the auto industry received.
Speaker 2: When you advise your firm's clients and policy and messaging
Speaker 2: around White House moves and actions, I am curious what's
Speaker 2: top of mind and is there an expectations that things
Speaker 2: will settle down in a bit or not necessarily?
Speaker 4: Sure. Well, we advise a lot of different types of clients,
Speaker 4: and of course many of them are concerned about the
Speaker 4: impact of tariffs on their consumers and their customers.
Speaker 6: UH.
Speaker 4: The issue of DEI, of course, is a is a
Speaker 4: major factor for a lot of companies in the United States.
Speaker 4: There was an effort to really push DEI and and
Speaker 4: and and embrace the ethos of diversity, equity and inclusion. UH.
Speaker 4: Just in the last few years, that of course has
Speaker 4: has changed the Trump administration and many companies are trying
Speaker 4: to figure out how to embrace the value that they
Speaker 4: place on on diversity while not sort of advertising that
Speaker 4: this is something that's important to them as a company,
Speaker 4: for fear of retribution from the administration. There's a lot
Speaker 4: of fear out there. Generally, I would say, it's it's
Speaker 4: a it's a it's a very different atmosphere than we've
Speaker 4: seen under other presidencies, where you might like the president
Speaker 4: or not, or approve of his policies or not. The
Speaker 4: sense of fear of not knowing what's coming and and
Speaker 4: trying to prepare but not ever one hundred percent sure
Speaker 4: of what you're preparing for leaves a lot of a
Speaker 4: lot of consumers, a lot of companies off balance.
Speaker 3: Hadriana on that, just just advise us a little bit
Speaker 3: about what you're what you've been reporting on at the
Speaker 3: White House. To BET's point about the way, and I
Speaker 3: think a lot of people would say, we kind of
Speaker 3: see that on display when it comes to cabinet meetings,
Speaker 3: when we see really the way that these cabinet officials
Speaker 3: talk so much about the serving at the pleasure of
Speaker 3: the president.
Speaker 5: I mean, it was very complimentary. I would say, just
Speaker 5: listening to the past marathon of a cabinet meeting, and
Speaker 5: they definitely are seeking his approval, and you know, he
Speaker 5: has been complimentary toward them as well, shouting out a
Speaker 5: couple of people, and you know, even someone who not
Speaker 5: in the room, Tom Homan, the kind of appointed borders
Speaker 5: are with someone who you know, the President has has
Speaker 5: given praise sword and so yes, we we are seeing that.
Speaker 5: And you know a lot of the reporting that I've
Speaker 5: done has also looked at the different people in industry
Speaker 5: and and those who have been you know, the you know,
Speaker 5: victims of some of the that has been done. And
Speaker 5: you can see that as well.
Speaker 3: Thanks to Bloomberg News National politics reporter Adrianna lowen Kron
Speaker 3: and Beth Fouey, partner at FGS Global.
Speaker 2: We're going to continue our coverage of President Trump's second term.
Speaker 2: So far, one notable impact is on energy policy. His
Speaker 2: desire to quote drill baby, drill and amp up fossil
Speaker 2: fuel exploration in the United States that we've certainly seen,
Speaker 2: along with rolling back support for clean energy initiatives and
Speaker 2: programs and climate change. And our next guest is a
Speaker 2: former administrator of the EPA, the Environmental Protection Agency. She's
Speaker 2: quote in The New York Times saying, quote this is
Speaker 2: worse than any previous administration and that President Trump quote
Speaker 2: can do a lot of damage to the agency. When
Speaker 2: he leaves, he will have left devastation in his way.
Speaker 3: We got back with us Gina McCarthy. She's a former
Speaker 3: EPA administrator in the US and the first White House
Speaker 3: National Climate Advisor. She's also managing co chair of America
Speaker 3: Is All In Coalition. This is a group of leaders
Speaker 3: from all over the US that supports climate It is
Speaker 3: supported by Michael R. Bloomberg and Bloomberg Philanthropies. She and
Speaker 3: also Senior advisor at Bloomberg Philanthropy, the philanthropic arm of
Speaker 3: Bloomberg LP, the parent company at Bloomberg TV, and at
Speaker 3: Bloomberg Radio. She joins us from Boston. Gina, good to
Speaker 3: have you back with us. What specific presidential actions, in
Speaker 3: your view, would or have already had the biggest impact
Speaker 3: on our environment.
Speaker 7: Well, I think that on the whole, we see this
Speaker 7: entire administration trying to benefit fossil fuels at the expense
Speaker 7: of low cost plan energy, and I think that's the
Speaker 7: big takeaway. Look, I know that right now the economy
Speaker 7: is not going great, and it doesn't surprise me given
Speaker 7: Trump's policies. But from my small perspective. I'm looking at
Speaker 7: USPA and they're dismantling the agency. They're finding a way
Speaker 7: to get rid of everyone that's ever talked about environmental
Speaker 7: justice before. The research is the scientists. So what we
Speaker 7: have here is a tremendous cha challenge ahead to basically
Speaker 7: make sure that our communities are protected, our economy can
Speaker 7: continue to thrive, that we have healthy kids living long lives.
Speaker 7: This is definitely for me, not just the dismantling of EPA,
Speaker 7: but it is a potential to dismantle the entire federal government.
Speaker 7: And so we have to all step up.
Speaker 8: We have to.
Speaker 7: Recognize the challenges of today, and we have to look
Speaker 7: at how we can stop these rollbacks of rulemakings every
Speaker 7: single week that we're seeing from this administration that threatens
Speaker 7: our lives and livelihoods all across the United States and
Speaker 7: threatens our ability to have allies we can count on internationally.
Speaker 2: Gina, remind the world, Remind our audience about kind of
Speaker 2: what the EPA does, and not just for the United States,
Speaker 2: but on a global scale. Just give us just a
Speaker 2: quick quick overview of the things that I think, you know,
Speaker 2: we just assume things are going to be here We're
Speaker 2: gonna have clean water, We're gonna have electricity, we're gonna
Speaker 2: have highways and all that good stuff. I'm just talking
Speaker 2: about general of how the US works, but the EPA
Speaker 2: specifically what that does for every American citizen, our hopes
Speaker 2: to do for every American citizen.
Speaker 7: Well, EPA does have a very focused mission. It's to
Speaker 7: protect our health in the environment. That's its mission.
Speaker 8: Now.
Speaker 7: I know there are folks like Liezelden, who's running the agency,
Speaker 7: who wants to shift it to fossil fuels, but that's
Speaker 7: essentially what it is, and for decades, what it's been
Speaker 7: focused on is actually looking at how we keep our
Speaker 7: water plane, how we keep our EA clean, how we
Speaker 7: look Internationally. A challenge is like the ozone layer. A
Speaker 7: challenge is like hydrofluoricobbins. All these challenges plus FLIM These
Speaker 7: are international efforts that EPA has been participating in for decades.
Speaker 7: And EPA is really the most well respected environmental agency,
Speaker 7: and our sole goal is to protect people, not just
Speaker 7: in the United States for sure, that's where our major
Speaker 7: focus is, but internationally they understand the global challenges we're
Speaker 7: faithing and to work hand in hand with communities and
Speaker 7: countries all across the world, so that we can learn
Speaker 7: how best to keep our mission, which is protecting the
Speaker 7: health of our communities, in restoring and engaging in our
Speaker 7: environmental efforts so that we have the ability to live long.
Speaker 9: Healthy lives.
Speaker 7: That's what it does every single day.
Speaker 3: Thanks to Gina McCarthy, former EPA administrator in the US
Speaker 3: and the first White House National Climate Advisor. She's also
Speaker 3: managing co chair of America is All In Coalition. It's
Speaker 3: a group of leaders from all over the US that
Speaker 3: supports climate action and it's supported by Michael R. Bloomberg
Speaker 3: and Bloomberg Philanthropies. Gina is also a senior advisor at
Speaker 3: Bloomberg Philanthropy is the philanthropic arm of Bloomberg LP, the
Speaker 3: parent company Bloomberg Radio.
Speaker 2: Coming up, Apple reported earnings this week. It was one
Speaker 2: of the big ones. All eyes on a lot when
Speaker 2: it comes to Apple, including its supply chain and AI.
Speaker 2: We talk about all of it with Bloomberg's Mark German.
Speaker 8: Changes need to be made, so they're breaking up their
Speaker 8: AI team. They are moving the robotics units of hardware engineering.
Speaker 8: They can't miss on robotics now, that's going to be
Speaker 8: a big deal down the road maybe five ten years.
Speaker 8: They moved Siri, which is emblematic, right and something a
Speaker 8: tangible way to see how behind there are INNAI. To
Speaker 8: Tim's example, they're moving that to their software engineering department,
Speaker 8: and now their AI department is basically just focused on
Speaker 8: models and improvement.
Speaker 3: You're listening to Bloomberg BusinessWeek. This is Bloomberg.
Speaker 1: This is Bloomberg Business Week Daily with Carol Masser and
Speaker 1: Tim Stenovek on Bloomberg Radio.
Speaker 2: Apple's much awaited quarterly earnings report failed to soothe investor
Speaker 2: concerns about its biggest challenges, including escalating tariff costs and
Speaker 2: a slowdown in China. Now the iPhone maker warned the
Speaker 2: tariffs will increase costs this quarter. It is something CEO
Speaker 2: Tim Cook spoke about on the earnings call, saying he
Speaker 2: estimates the impact could quote add nine hundred million dollars
Speaker 2: to the company's costs. Once the numbers broke out on Thursday,
Speaker 2: we got instant reaction from our in house Apple expert
Speaker 2: Mark Germitt.
Speaker 8: I mean, overall revenue is up five percent over a year,
Speaker 8: so obviously that's a good thing. You saw iPhone sales
Speaker 8: beat slightly expectations from Wall Street, so that's a good thing.
Speaker 8: Shows some solid momentum for the iPhone sixteen E. Notice
Speaker 8: that Tim Cook mentioned the sixteen e in particular versus
Speaker 8: the pro models, which generate the most amount of revenue
Speaker 8: for Apple. Obviously, Mac did a little bit better than expected,
Speaker 8: iPad better than expected, but we saw some softness on
Speaker 8: China services as well as wearables, Home and Accessories, wearable's
Speaker 8: Home and Accessories. The softness there continues. It's been this
Speaker 8: way for several quarters. That's sort of surprising given the
Speaker 8: momentum that we've seen in the past on the Apple
Speaker 8: Watch and the AirPods and some of those peripheral products.
Speaker 8: Services still pretty considerable double digit growth, but not at
Speaker 8: the same level that Wall Street was anticipating. Services in
Speaker 8: particular is quite interesting because that's going to probably be
Speaker 8: a real headwind for Apple in the coming years now
Speaker 8: that they're needing to adjust some of their app store
Speaker 8: policies in relation to commissions. And then, of course we
Speaker 8: have the Google Search deal overhanging all of this stuff.
Speaker 8: That's a double digit billion dollar annual revenue stream for
Speaker 8: Apple that may also go away depending on where the
Speaker 8: US government goes with this trial against Google.
Speaker 2: That's Mark German, Bloomberg News Managing editor for Global Consumer Tech.
Speaker 2: Before Apple's earnings, though, we spoke with Mark about his
Speaker 2: reporting that Apple is seeking to import most of the
Speaker 2: iPhones it sells in the United States from India by
Speaker 2: the end of next year.
Speaker 3: Mark, the India shift is huge. The goal means that
Speaker 3: Apple would roughly double its annual iPhone output in India
Speaker 3: to more than eighty million units, people familiar with the
Speaker 3: matter said, asking not to be identified discussing internal plans.
Speaker 3: You and the team reported that lately last week. Still,
Speaker 3: that is not the United States, it's India. So would
Speaker 3: President Trump and your view be happy with iPhones coming
Speaker 3: from anywhere if it's not the US.
Speaker 8: Yeah, So this has been a plan in action for
Speaker 8: the last several weeks, now, even before we knew the
Speaker 8: finite detail what the tariffs would be on China that
Speaker 8: Trump introduced in early April, reprioritizing production happening in India.
Speaker 9: Right for the US market.
Speaker 8: Now, the US market requires about a third a little
Speaker 8: bit more than that of the overall iPhone production. They
Speaker 8: can easily make that in China. But today they've been
Speaker 8: able to fulfill you know, roughly half of what you're
Speaker 8: able to get out of India for the US, right,
Speaker 8: so half of what the US needs they can make
Speaker 8: in India. So they're going to accelerate that over the
Speaker 8: next several months, and they're hoping to be able to
Speaker 8: do the majority of iPhone production now in India. Now,
Speaker 8: when I say the majority, that's important. They're not going
Speaker 8: to be able to do everything.
Speaker 9: Apple has not shipped.
Speaker 8: An entirely new design phone out of India to date,
Speaker 8: so that's something that eventually is going to probably have
Speaker 8: to change.
Speaker 9: So what they're going to.
Speaker 8: Probably do is for these more intricate models coming out
Speaker 8: end of next year twenty twenty seven, they're still going
Speaker 8: to have to rely on China.
Speaker 9: But for the most part, the flagship.
Speaker 8: Phones, the lower end phones for the US market at least,
Speaker 8: that's going to be India made.
Speaker 9: The rest of the world, that's going to be China.
Speaker 2: Okay, So it's not like Mark they're turning their back
Speaker 2: on China, not in any fashion.
Speaker 8: Well, in some fashion, right, they're going to take out
Speaker 8: probably twenty to thirty billion dollars a year of inventory.
Speaker 9: Out out of China and move that to India.
Speaker 8: But this is part of something they've been doing already, right,
Speaker 8: So China is not disappearing, they're simply accelerating it. But
Speaker 8: you know, you're in a bit of a of a
Speaker 8: pickle here, right, because you never know what the administration
Speaker 8: is going to do. They could change the tear percentage
Speaker 8: on India tomorrow in response to a new policy like
Speaker 8: this from Apple, right, So I kind of have to
Speaker 8: be on your toes a little bit. That's why I
Speaker 8: think that this globalization approach to production is something that
Speaker 8: Apple is eventually going to have to move to. And
Speaker 8: what I mean by that is producing locally for every
Speaker 8: GEO that you're in, right.
Speaker 9: Something similar to what Tesla does.
Speaker 8: Tesla makes cars for the US, and the US makes
Speaker 8: cars for China in China, right, they have cars made
Speaker 8: in Europe for the European market.
Speaker 9: Eventually Apple's gonna have to get there too. If this,
Speaker 9: if this TEARFF situation sticks around long.
Speaker 2: Term, does this, you know, spreading out and maybe further
Speaker 2: into indiamark complicate Apple's relationship with Chinese officials in China
Speaker 2: in general? Or is it that they're going to still
Speaker 2: have a huge footprint there and so things will be okay?
Speaker 2: I just I just think about the optics, the visualtics
Speaker 2: on this.
Speaker 9: We'll see, yeah, right, we'll see.
Speaker 8: It's very possible that China's upset about this and retaliates
Speaker 8: against Apple. Don't forget, China holds all the cars cards here.
Speaker 8: They can shut off Apples network access. They can shut
Speaker 8: down its ability to sell from the retail stores. They
Speaker 8: can slow roll Apple's ability to import components into the
Speaker 8: supply chain for final production. They can slow roll visas,
Speaker 8: they can slow roll the ability for Apple engineers to
Speaker 8: get into the country. There's so many things that China
Speaker 8: can do here to just absolutely disrupt Apple. So they
Speaker 8: are playing a fine line here, and I'm sure Apple
Speaker 8: denying this to whoever they work with in the Chinese government.
Speaker 8: But this is something that's happening. I don't think it's
Speaker 8: as full bore as some have made it seem. I
Speaker 8: don't think that there's a full steam ahead effort to
Speaker 8: pull the iPhone out of China.
Speaker 9: Right, And don't forget rest of world. Right, that is
Speaker 9: a significant amount.
Speaker 8: That's still mult five hundreds of billions of dollars of devices, right, Yeah,
Speaker 8: And so that's how it's going to be, at least
Speaker 8: for now India, for the US, by for elsewhere, except
Speaker 8: when it comes to new super high end foldable models
Speaker 8: and other new designs they're doing at least from the get.
Speaker 3: Go, And when would we see that?
Speaker 8: Just based on your reporting, there is twenty end of
Speaker 8: twenty six, end of twenty seven within that twelve month period.
Speaker 2: Is that I just want to follow because Tim and
Speaker 2: I have been talking a lot with the EV space
Speaker 2: and just the sophisticated manufacturing that China has on just
Speaker 2: so many different levels. Is that why Apple would have
Speaker 2: to do a more advanced phone. They'd have to continue
Speaker 2: doing it out of China because they had the capabilities.
Speaker 8: The capabilities, the engineering talent, the availability of certain components,
Speaker 8: the availability of special machinery, the expertise that fox Con
Speaker 8: has shown, particularly in China to produce at the volumes
Speaker 8: and at the quality that Apple needs. There's a level
Speaker 8: of intricacy that goes into some of these products that
Speaker 8: can just not be replicated outside of China at this point.
Speaker 8: That's why you see things like the Apple Vision bro
Speaker 8: that's only made in China.
Speaker 9: That's in part because of how intricate that device is.
Speaker 8: Now, say what you will about its commercial success but
Speaker 8: from intricacy and technology standpoint, it's up there with anything
Speaker 8: on the market, and I think you'll find the same
Speaker 8: to be the true unfold the bulls and the like
Speaker 8: from Apple.
Speaker 3: Okay, Mark, I want to shift a little bit. We
Speaker 3: got a few minutes left with you. I want to
Speaker 3: talk a little bit about AI. Carol and I've been
Speaker 3: playing with chat GPT quite a bit. You have documented
Speaker 3: the struggles that Apple has faced when it comes to AI.
Speaker 3: This came out in full force over the weekend.
Speaker 10: For me.
Speaker 3: My son asked me a question. I couldn't answer it.
Speaker 3: I was cooking, so I couldn't grab my phone. So
Speaker 3: I asked Siri, like a basic question that chat GBT
Speaker 3: would have been able to answer in a second, and
Speaker 3: all it did. I asked the question and all Siri
Speaker 3: did was open a web page. And I was thinking
Speaker 3: to myself, I got to ask Mark about it. It's like,
Speaker 3: it's it's night and day with Apple. What Apple does
Speaker 3: with AI versus what you can get if you download
Speaker 3: something in the App Store. What's going on here?
Speaker 9: Yeah? Yeah, Well they bet on the wrong horse for AI.
Speaker 8: They've made a philosophical bet against chap bolts and chat
Speaker 8: GBT like technology.
Speaker 9: They were too stubborn to enter this space.
Speaker 8: They didn't invest enough, They had some issues acquiring GPUs
Speaker 8: from places like Nvidia. They didn't have the right engineering talent,
Speaker 8: the right management or leadership in place, and they missed
Speaker 8: the boat on the biggest technological revolution since the iPhone
Speaker 8: twenty years ago.
Speaker 3: So for them could then just go buy one of.
Speaker 8: These Apple could buy their way into it. A lot
Speaker 8: of this LM stuff has become completely commoditized.
Speaker 9: No lead is safe.
Speaker 8: It doesn't matter how far ahead chech GPT is. Right now,
Speaker 8: Apple could catch up.
Speaker 3: So Apple could catch up without making an acquisition. They
Speaker 3: could catch up on their own.
Speaker 9: You know what I'm saying is that their levers they
Speaker 9: can pull to catch up.
Speaker 8: And that includes acquisitions, that includes larger investments, that includes
Speaker 8: a lot.
Speaker 9: Of those types of things.
Speaker 8: But the biggest thing they have to do is make
Speaker 8: a philosophical decision of do we want to be a
Speaker 8: true AI company? Do we want to compete in this space?
Speaker 8: Do we want to be successful artificial intelligence? And if
Speaker 8: they make that decision, I think anything for Apples possible,
Speaker 8: especially with their resources specifically financially well.
Speaker 2: And so let's go to a story that you've got
Speaker 2: out about how they're relocating their secret robotics unit from
Speaker 2: the AI organization to the hardware division. So how does
Speaker 2: this kind of fit into it? So allowing the AI
Speaker 2: folks to just focus on AI and the hardware on
Speaker 2: the hardware stiff.
Speaker 9: They messed up. They messed up.
Speaker 8: Their head of AI had philosophical issues with st GPT
Speaker 8: with the concept of chatbots.
Speaker 9: They didn't really know this was coming. They were essentially
Speaker 9: blindsided by this technology. Despite what Tim Cook has.
Speaker 8: Said on an earnings call a year ago, changes need
Speaker 8: to be made. So they're breaking up their AI team.
Speaker 8: They are moving their robotics unit to hardware engineering. They
Speaker 8: can't miss on robotics now. That's going to be a
Speaker 8: big deal down the road, maybe five ten years. They
Speaker 8: moved Siri, which is emblematic, right and something a tangible
Speaker 8: way to see how behind there are in AI, to
Speaker 8: Tim's example, they're moving that to their software engineering department,
Speaker 8: and now their AI department is simply just focused on
Speaker 8: models and improvement. It's underlying AI technology and we'll see
Speaker 8: how long that AI department lasts. I would not imagine
Speaker 8: more than another year or two.
Speaker 3: Robots you piqued my interest with robots, Mark, what what's Yeah?
Speaker 3: What are they working on?
Speaker 8: They're working on a tabletop robot. It's an iPad on
Speaker 8: a robotic arm that can move around above your desk.
Speaker 8: They're working and that that's coming. That's going to be
Speaker 8: twenty twenty seven. So that's like, that's a done deal. Uh, exploration.
Speaker 8: I would put a mobile telepresence robot that can roam
Speaker 8: around your home, something similar to the Amazon astro So
Speaker 8: the tabletop that's happening, the bubbile robot, that's Explora exploratory.
Speaker 8: Now this is in the let's sit around the table
Speaker 8: and talk about it category, and that would be humanoids.
Speaker 11: I'll take it.
Speaker 3: Yeah, I'll do it.
Speaker 9: Well.
Speaker 2: And what's I mean realistically, Tessa's working on it, met
Speaker 2: is working on it. It sounds like Apple's working on it.
Speaker 2: I mean, what's the realistic time to buy it? That
Speaker 2: you just said five years?
Speaker 9: Ten years?
Speaker 2: Like, is that really the timetable for something like this
Speaker 2: being part of our world?
Speaker 11: Humanoid?
Speaker 8: Yeah? Yeah, five ten years? What you think it's going
Speaker 8: to be longer or shorter?
Speaker 2: I don't know. I feel like I am I feel
Speaker 2: like things are moving really quickly.
Speaker 3: Well, Mark, When I think of humanoid, I think of
Speaker 3: something from like a figure AI, right, like an industrial
Speaker 3: use Like, yeah.
Speaker 8: Those robots exist, but since we get it to the
Speaker 8: point that you can mass manufacture it at prices that
Speaker 8: are you know, at least somewhat digestible, with applications that
Speaker 8: make sense. Think about all the safety requirements and regulatory requirements. Right,
Speaker 8: the transition from making it an enterprise manufacturing robots.
Speaker 9: Of something you have in your home, it's going to
Speaker 9: be a five year path.
Speaker 3: I think there's some there's a famous engineer who says
Speaker 3: like it's like the pot of coffee test. I don't
Speaker 3: remember this. It's like he says, like, the humanoid robot
Speaker 3: will be useful when it can go and make a
Speaker 3: pot of coffee.
Speaker 9: So is that or the other one I've heard is
Speaker 9: pick up a glass of water and bring it to you.
Speaker 3: There it is.
Speaker 9: I'm Carol ten years away from there.
Speaker 3: I'm most interested in the dishdoing robot.
Speaker 2: Yeah, we want the dishwasher root.
Speaker 8: Well, the whole point is that it would be able
Speaker 8: to do all that stuff, Like, what's the point of
Speaker 8: the robot if it can't load your dishes into the
Speaker 8: dishwasher or put the laundry and take the laundry out right.
Speaker 9: I want one of those.
Speaker 3: Yeah, totally our thanks to Mark German, Bloomberg News Managing
Speaker 3: editor for Global Consumer Tech. Check out all the big
Speaker 3: megacap tech earnings this week, Apple, Amazon, Microsoft, and Meta
Speaker 3: on the Bloomberg and at Bloomberg dot Com.
Speaker 2: Still ahead on Bloomberg BusinessWeek, The CFO of Huntington Bank
Speaker 2: Shares on lending sentiment, tariffs and a big buyback.
Speaker 3: This is Bloomberg.
Speaker 1: This is Bloomberg Business Week Daily with Carol Masser and
Speaker 1: Tim Stenevek on Bloomberg Radio.
Speaker 2: Huntington Bank Shares reported earnings last week, so Alice noting
Speaker 2: how the regional bank based in Ohio seemed to be
Speaker 2: more optimistic about growth than its peers for the first quarter,
Speaker 2: the bank being on earnings and interest margin and more.
Speaker 2: It also approved a one billion dollar share buy back.
Speaker 2: In our weekly check in on cfo's chief financial officers
Speaker 2: back with us as Zach Wasserman. He's Senior executive VPCFO
Speaker 2: of Huntington Bank Shares. It is the holding company of
Speaker 2: the consumer and business regional bank Huntington National Bank. It's
Speaker 2: got locations and a handful of states we'd like to
Speaker 2: remind you Ohio, Minnesota, North and South Carolina, and a
Speaker 2: few more. And Zach joining us from Columbus, Ohio. Also
Speaker 2: with us is Nita Trentman, senior editor at Bloomberg News,
Speaker 2: the author of the CFO Briefing newsletter, which you can
Speaker 2: get at Bloomberg dot com slash CFO Briefing. It comes
Speaker 2: out a new one every Sunday, and Zach is among
Speaker 2: those featured in the newsletter out on Sunday. Zach, Nina, welcome.
Speaker 2: Good to have you both. Zach, We want to get
Speaker 2: right to it. Great to have you here. I think
Speaker 2: we talked with you in about mid March last go round,
Speaker 2: and that was before so called Liberation Day. What's changed
Speaker 2: as a result of what we've got from the White
Speaker 2: House and the volatility and uncertainty that has followed.
Speaker 11: Yeah, well, it's triving to be back with you.
Speaker 12: And certainly it's been an eventful first start of the
Speaker 12: start of the second quarter here, but for us, it's
Speaker 12: continued business as usual for the most part. We had,
Speaker 12: as you noted, a really strong first quarter. It was, frankly,
Speaker 12: in my finance career within the top five of any
Speaker 12: quarter I've ever been a part of, you know, Revenues
Speaker 12: growing ten percent, earnings per share up twenty percent, with
Speaker 12: really strong customer acquisition trends, and great credit quality, so
Speaker 12: a lot of momentum actually carrying into the second quarriter,
Speaker 12: you know. With that being said, one of the ways
Speaker 12: we characterized the sentiment right now on our earnings call
Speaker 12: was cautious optimism. You know, certainly more uncertainty today than
Speaker 12: was the case earlier in the year. With that being said,
Speaker 12: we're still seeing growth, you know. Indication of that is
Speaker 12: loan pipelines. Our forward projection of likely loan closings actually
Speaker 12: higher in the first two weeks of the second quarter
Speaker 12: here from the end of the first quarter, So still
Speaker 12: seeing that come through, notwithstanding a bit more uncertainty.
Speaker 11: For sure.
Speaker 3: Given that you have a regional focus, what would you
Speaker 3: say is the biggest potential impact from tariff policy on
Speaker 3: your business? We talk about some of the bigger banks,
Speaker 3: and certainly the issues around M and A and sort
Speaker 3: of a pause when it comes to IPOs that have
Speaker 3: been pulled that affects their capital markets business. But that's
Speaker 3: not necessarily where you guys are playing what are the
Speaker 3: biggest risks based on what's happening in Washington to your business.
Speaker 11: It's a great question.
Speaker 12: It's a great question, Tim, and I think you know,
Speaker 12: for the most part, it is the uncertainty itself.
Speaker 11: You know, we're.
Speaker 12: Seeing somewhat delays in the decision making process that affects loan.
Speaker 11: Activity in our regional bank.
Speaker 12: For example, I was just talking with our key executive
Speaker 12: there mentioned that the loan closing process is taking about
Speaker 12: six days longer, about ten percent longer maybe than would
Speaker 12: historically have been the case.
Speaker 11: We're seeing some of our segments.
Speaker 12: That really service companies who are keyed to durable goods,
Speaker 12: particularly those that you know where they have a foreign
Speaker 12: supply chain that we're seeing some impacts in. We do
Speaker 12: have an m and a advisory business that supports middle market,
Speaker 12: largely private companies. We're seeing somewhat slower deal closing process there.
Speaker 12: So you know, we're seeing to some to read those
Speaker 12: impacts and that if that uncertainty continues, we would expect
Speaker 12: to see that those impacts continue and probably magnify. So absolutely,
Speaker 12: we'd like to see a resolution of some of these uncertainty.
Speaker 12: With that being said, as I know my first answer,
Speaker 12: We are seeing generally growth. You know, loans for us
Speaker 12: into the first quarter grew two percent from the end
Speaker 12: of last year, and our forecast for Q two, the
Speaker 12: quarter in right now is for another one to two
Speaker 12: percent growth. So overall still seeing growth, but at the margin,
Speaker 12: you know, some of those impacts.
Speaker 10: I'm Zach to follow up on that. One of the
Speaker 10: themes in the upcoming edition of the briefing will be
Speaker 10: controlling the controllables, which is a theme that is coming
Speaker 10: up in many earning calls that we're seeing these days,
Speaker 10: coming in wondering from your perspective, like, if you're looking
Speaker 10: at your business, what are the items that you can
Speaker 10: actually control.
Speaker 12: Yeah, it's a great question, Nina, and I think, you know,
Speaker 12: I think one of the things that's that's critical for us,
Speaker 12: and to some degree, situations like this really reveal which
Speaker 12: companies are managed the most rigorously. And we always think
Speaker 12: about multiple scenarios and scenario planning with contingent actions, and
Speaker 12: so to some degree, you know, this scenario that's playing
Speaker 12: out right now is part and parcel to the way
Speaker 12: we manage the company all the time, always thinking about
Speaker 12: what could potentially come to pass and how we'll pull
Speaker 12: the levers of the business to maintain you know, strong
Speaker 12: relative performance in any of them. With that being said,
Speaker 12: you know, I always think about three things. Firstly, the
Speaker 12: key pillars of financial strength for the bank, capital, liquidity
Speaker 12: and credit. And you know, those are the things that
Speaker 12: under all circumstances we want to have strength in and
Speaker 12: you know, in an environment like this, we know how
Speaker 12: we will operate to maintain those areas of strength. Now,
Speaker 12: the second is the growth orientation of the firm. What
Speaker 12: are the goals that we're putting out to the organization.
Speaker 12: Where do we want folks focused, and what's the pace
Speaker 12: of our investments into key growth initiatives. And the last
Speaker 12: thing is how can we be consistent with our customer base.
Speaker 12: You know, fundamentally, one of the most important things for
Speaker 12: a bank is to be there.
Speaker 11: For our customers through all cycles.
Speaker 12: And so for us that consistency of customer interaction, consistency
Speaker 12: of underwriting, and really making sure that for the customers
Speaker 12: we're always there to support them.
Speaker 13: Right.
Speaker 10: Just wondering, actually you pointed out the importance of credit
Speaker 10: and liquidity in the current situation. If we go back
Speaker 10: a few weeks time, basically ever since the April two
Speaker 10: terriffs we're announced. We've seen a strong sell off in
Speaker 10: US assets. We've seen investors questioning sort of the stability
Speaker 10: of the US financial system, and we're also seeing corrects
Speaker 10: emerging around institutions here in the US with questions around
Speaker 10: the rule of law.
Speaker 8: Do you process?
Speaker 10: So I'm wondering from a from a CFO perspective, how
Speaker 10: do you think about those impacts to your business now
Speaker 10: and also for the longer term.
Speaker 11: That's a great question.
Speaker 12: Look, I think to some degree, we see ourselves as
Speaker 12: a as a bastion of strength at times when there
Speaker 12: is those kind of uncertainties, you can count on us.
Speaker 12: As I know just just a minute ago, our decision
Speaker 12: making criteria are going to be are going to be consistent.
Speaker 9: Uh.
Speaker 12: We're there to provide advice and counsel to our to
Speaker 12: our customers, and it's this time I mean, to some degree,
Speaker 12: this actually is a time that bankers relish. And don't
Speaker 12: get me wrong, no one wants uncertainty and potential challenges
Speaker 12: to the economic environment.
Speaker 11: But this is the time when we really prove.
Speaker 12: Our worth to our customers when we help them think
Speaker 12: through you know, how are they going to address potential challenges.
Speaker 11: To their supply chain.
Speaker 12: You know, how are they going to continue to address
Speaker 12: the level of interest rates which have clearly risen it
Speaker 12: And if inflation does re emerge and begin to reaccelerate,
Speaker 12: how are they going to address that? So it really
Speaker 12: is a sort of go back to the core, focus
Speaker 12: on customers, focus on their best interests, and really help
Speaker 12: them to be ready amongst this potential uncertainty.
Speaker 2: Hey, one thing I want to ask you just to
Speaker 2: follow up Zach on Nina's question, and especially when it
Speaker 2: comes to the rule of law. We have a story
Speaker 2: that is among our most read on the Bloomberg about
Speaker 2: a state judge in Wisconsin arrested by federal agents after
Speaker 2: an investigation into whether she obstructed officials trying to detain
Speaker 2: an undocumented immigrant. And I guess whether that was legal
Speaker 2: or illegal. The point is we're living in a very
Speaker 2: different at this point. It feels like the United States
Speaker 2: of America. So how do you think about it? As
Speaker 2: a CFO, We're looking to our leaders trying to understand
Speaker 2: the way forward, and how do you think about what
Speaker 2: could be a very different, potentially country going forward and
Speaker 2: operating within one.
Speaker 12: It's hard to speculate on how things will go and
Speaker 12: how the operating environment could potentially change.
Speaker 11: You know, we walked into this.
Speaker 12: Year with an expectation that the regulatory environment would continue
Speaker 12: to evolve and be very constructive to growth, and so
Speaker 12: we're certainly looking to see that. But you know, we
Speaker 12: try to get out of the game of speculation and
Speaker 12: really just continue to focus on the core of what
Speaker 12: a bank is.
Speaker 2: We're really leaning on folks like you and all leaders
Speaker 2: that come on on Bloomberg just to try to understand
Speaker 2: is it upsetting and hard for leaders too to see
Speaker 2: things not kind of business as usual, potentially you know,
Speaker 2: becoming the target of the White House.
Speaker 12: We want to see certainty and clarity and to have
Speaker 12: an operating environment which is clear, and so to the
Speaker 12: extent that it's not, that's not that's not helpful for us.
Speaker 12: With that being said, and again I kind of come
Speaker 12: back to what's the role of our company. We're not
Speaker 12: a legislative bohding, We're not a political entity.
Speaker 11: We're there to help serve our customers.
Speaker 12: And this is the time when, to some degree, you know,
Speaker 12: the culture of Huntingdon certainly is all about service, and
Speaker 12: we just double down on that at times like this
Speaker 12: and just try to be that bastion of strength, that
Speaker 12: pillar that people could always count on, and that's what
Speaker 12: we draw inspiration.
Speaker 11: Well.
Speaker 3: Speaking of service, you mainly operate in the Midwest, and
Speaker 3: I'm wondering how you're servicing manufacturing and auto parts and
Speaker 3: auto related clients and how those are intending to manage
Speaker 3: supply chain challenges. What can you tell us about that?
Speaker 3: What color can you give us some what you've heard
Speaker 3: from them?
Speaker 12: Yeah, Look, I think certainly, sort of as I noted earlier,
Speaker 12: the folks that are really the most keyed toward foreign
Speaker 12: supply chains, you know, there are some concern and I
Speaker 12: think it's affecting decision making, it's affecting some of their
Speaker 12: investment plans. With that being said, I also generally speaking,
Speaker 12: I think we're seeing from our customer base that they
Speaker 12: that this is not totally unexpected. You know, we saw
Speaker 12: from the first Trump administration the tariffs were part of
Speaker 12: a major part of the agenda, and certainly during the
Speaker 12: election cycle that came up up as a major likely
Speaker 12: focused and so folks knew that something was coming and
Speaker 12: they were beginning to think through that. And so you know,
Speaker 12: for the most part, we're seeing us calm, more calm
Speaker 12: maybe than the headlines generally would indicate. And I think,
Speaker 12: you know, likewise, if you think of the commercial sector,
Speaker 12: you know there's been a number of challenges over the
Speaker 12: last five years of COVID, rapid rise of interest rates,
Speaker 12: high levels of inflation, and so I think for the
Speaker 12: most part we're seeing resiliency, more resiliency perhaps than the
Speaker 12: headlines would would imply. I don't want to be Pollyanna here.
Speaker 12: If this uncertainty continued for a long period of time,
Speaker 12: you would see things more markedly deteriorate, But thus far
Speaker 12: we have not seen that.
Speaker 3: Our thanks to Zach Wasserman, chief financial Officer of Huntington
Speaker 3: Bank Shares, and Nina Trentman, senior editor at Bloomberg News
Speaker 3: and the author of the CFO Briefing newsletter. Sign up
Speaker 3: now for the Bloomberg CFO Briefing newsletter at Bloomberg dot
Speaker 3: com slash CFO Dash Briefing. A new one comes out on.
Speaker 2: Sunday, and that our first hour of the weekend edition
Speaker 2: of Bloomberg Business Week from Bloomberg Radio coming up in
Speaker 2: the next sixty minutes. Sustainable investing in the Era of
Speaker 2: Donald Trump.
Speaker 6: One of the dirtiest secrets of the energy industry in
Speaker 6: America is that most of it's wasted. There's an extraordinary
Speaker 6: loss if you measure the amount of primary energy that
Speaker 6: is the original fuel of whatever form gas, nuclear fuel,
Speaker 6: even dare I say it renewable sources, and you measure
Speaker 6: that how much actually gets the point of use by
Speaker 6: the time it's lost in extraction, generation, transmission, and distribution.
Speaker 6: Did you know that over sixty percent of it is
Speaker 6: lost in America?
Speaker 3: Blas bumping iy on nice job, the iconic nineteen seventy
Speaker 3: seven film featuring none other than Arnold I believe it's
Speaker 3: thank you Carol is back. Well, at least the pursuit
Speaker 3: of such especially by women and older folks. We'll explain we.
Speaker 2: Women are bumping, I am, and we also take you
Speaker 2: inside Bloomberg Pursuits Summer travel guide, everything from grand resorts
Speaker 2: where monkeys used to roam, lux cruising on the high seas. Yes,
Speaker 2: Butler's included. This is Bloomberg BusinessWeek.
Speaker 3: I'm Carol Masser and I'm Tim Stenovk. Stay with us.
Speaker 3: Today's top stories and global business headlines are coming up
Speaker 3: right now.
Speaker 1: This is Bloomberg Business Week Daily with Carol Masser and
Speaker 1: Tim Stenovek on Bloomberg Radio.
Speaker 2: Plenty ahead in our second hour of the weekend edition
Speaker 2: of Bloomberg Business Week, including Saudi billionaire prints. All will
Speaker 2: lead back in the Spotlight emboldened by Donald Trump's return
Speaker 2: to the White House.
Speaker 3: Plus cardio out, pumping iron and while gyms are amping
Speaker 3: up on weightlifting equipment. Also, it's the Bloomberg Pursuit Summer
Speaker 3: travel Guide. Why even snobs are cruising now?
Speaker 2: Yeah, and can also get a diamond dust facial. Anyone
Speaker 2: interested in that.
Speaker 3: I don't know about that. Raising my hand, you have
Speaker 3: to like plug your nose so that diamond dust doesn't
Speaker 3: get in your Don't.
Speaker 2: Think so much about it. Just enjoy, enjoy all of
Speaker 2: that to go, and we begin with hedge funds investors
Speaker 2: seeking to invest in low carbon assets outside the United States,
Speaker 2: such as utility and grid equipment providers in Europe and Asia.
Speaker 2: Due to uncertainty cause by President Trump's policies.
Speaker 3: So some hedge funds are finding opportunities in natural gas,
Speaker 3: it's considered a green asset in Europe. They're investing in
Speaker 3: companies that are less affected by tariffs. Such as those
Speaker 3: with domestic supply chains. It's all about that shift that's
Speaker 3: happening as a result of policies here in the US
Speaker 3: and what hedge funds and other investors are doing with
Speaker 3: their money.
Speaker 2: No, it's a really good point, right, and we're just
Speaker 2: kind of watching it and where it's all going. Curious
Speaker 2: what Jonathan Maxwell has to say about all of this.
Speaker 2: He's the founder and chief executive officer of SDCL. It's
Speaker 2: short for Sustainable Development Capital LP. The company has about
Speaker 2: two billion, probably more than two billion in assets under management.
Speaker 2: He is also the author of a book. We've talked
Speaker 2: with him about at the Edge, how competition for resources
Speaker 2: is pushing the world and it's climate to the brink,
Speaker 2: and what we can do about it. And he joins
Speaker 2: us from London. So nice to have you here with us.
Speaker 2: How are you.
Speaker 3: I'm great?
Speaker 11: Thank you.
Speaker 6: Just got back from three days touring in the United States.
Speaker 6: So excited to be talking as a brit about investing
Speaker 6: in America.
Speaker 2: How did that go and what were you here in
Speaker 2: the US for.
Speaker 6: We've got a portfolio of on site energy projects we do.
Speaker 6: Our whole business is about building energy services that are cheaper, cleaner,
Speaker 6: and more reliable than the grid. So you know, we
Speaker 6: in principle, our businessess has been extremely robust and growing
Speaker 6: and diversified. I think one of the as far as
Speaker 6: the actual investments that we have in America, we're very
Speaker 6: happy with them today. I think the challenge that we've
Speaker 6: got right now is figuring out if we want to
Speaker 6: build something, say the next year, that we haven't already
Speaker 6: got all of our equipment in place, we haven't already
Speaker 6: got all of our contracts and construction in place. We
Speaker 6: don't know what it's going to cost us, and therefore
Speaker 6: we can't sign a new deal to build new systems,
Speaker 6: new power systems in America in twenty twenty six. And
Speaker 6: it's obviously a situation that I'm hoping comes to an
Speaker 6: end pretty shortly when there's more certainty as to what
Speaker 6: it's going to cost us to build the power plants
Speaker 6: that America needs so much.
Speaker 3: You're talking about this from the context of the you know,
Speaker 3: the investment that you need to make in order to
Speaker 3: build one of these things. You're not necessarily talking about
Speaker 3: this from the perspective of how the president now Donald
Speaker 3: Trump sees quote unquote sustainable forms of energy and the
Speaker 3: shift that we've seen here in the US. It's interesting
Speaker 3: that your concern that you at least led with was
Speaker 3: more about uncertainty when it comes to equipment, uncertainty when
Speaker 3: it comes to investment. What about just the idea that
Speaker 3: you know, this is a president who wants to really
Speaker 3: lean into carbons and fossil fuels.
Speaker 6: You know, I think from the I think there's a paradox.
Speaker 6: I actually wrote a substruck about this recent I think
Speaker 6: there's a basic paradox.
Speaker 11: Right, So you've got it.
Speaker 6: Sounds from that the administration isn't friends to large scale
Speaker 6: renewable power like offshore wind.
Speaker 11: The Inflation Reduction Act CO.
Speaker 3: President Trump has a hatred for offshore wind. Yes, he's
Speaker 3: been very open about that.
Speaker 6: Yes he does, and candidly what I would call conventional,
Speaker 6: good connected renewables. Now, having said that, the Energy Administration
Speaker 6: under Chris Right makes a distinction about delivering energy services
Speaker 6: energy security that America needs well at the same time
Speaker 6: has protected the environment. So there is a concept of
Speaker 6: trying to marry up energy security with some form of
Speaker 6: environmental conservation or preservation. In other words, don't sacrifice the economy,
Speaker 6: he says, or energy security on the altar of the environment,
Speaker 6: but to do what you can to try and minimize
Speaker 6: the footprint. There is a pragmatic way through this. And
Speaker 6: one of the dirty secrets of America, which I actually
Speaker 6: think that the Washington administration should spend more time on publicly.
Speaker 6: One of the dirtiest secrets of the energy and sty
Speaker 6: in America is that most of it's wasted. There's an
Speaker 6: extraordinary loss. If you measure the amount of primary energy
Speaker 6: that is the original fuel of whatever form gas, nuclear fuel,
Speaker 6: even dare I say it renewable sources, and you measure
Speaker 6: that how much actually gets the point of use by
Speaker 6: the time it's lost in extraction, generation, transmission and distribution.
Speaker 6: Did you know that over sixty percent of it is
Speaker 6: lost in America. It's an extraordinary feature. And so the concept,
Speaker 6: which you know, I don't invest in offshore wind farms
Speaker 6: is I'm not going to make any comments around them,
Speaker 6: but what I do invest in is generation that's close
Speaker 6: to the point of view, so that you don't waste
Speaker 6: all this energy on extraction, generation and transmission and distribution.
Speaker 6: And that concept of on site, low carbon, low cost,
Speaker 6: more reliable energy than the grid should be compatible with
Speaker 6: what the Washington administration wishes. However, here's the other side
Speaker 6: of the paradox and the pain point. Right now, I
Speaker 6: not write a check for that next year at the
Speaker 6: moment because I don't know what it's going to cost
Speaker 6: me to build it.
Speaker 11: So, you know, I think that this.
Speaker 6: I think there is a transformation of the energy system
Speaker 6: in America that's needed. I think that America is energy
Speaker 6: independent now. It is a huge producer of gas and oil.
Speaker 6: It has an incredibly economic advantage, but it also mustn't
Speaker 6: squander it by wasting so much energy. So I think
Speaker 6: that the clean energy movement is going to face a
Speaker 6: backlash against as you say, you've described it as a
Speaker 6: hatred of offshore wind farms. But I think there's a
Speaker 6: huge opportunity in America to decentralize the energy system and
Speaker 6: actually make the country more competitive and more productive while
Speaker 6: at the same time being greener. If Washington focused on that,
Speaker 6: that would be a huge when But you know, obviously
Speaker 6: the macro environment at the moment and taris means that
Speaker 6: we just don't know what it's going to cost us
Speaker 6: to build the stuff.
Speaker 3: We're speaking with Jonathan Maxwell. He's the founder and CEO
Speaker 3: of SDLC Sustainable Development Capital LLP. They focus on efficient
Speaker 3: and decentral generation of energy markets.
Speaker 2: You know, one thing I wonder, Jonathan, you mentioned you
Speaker 2: don't know the cost, right, so you can't move forward
Speaker 2: on stuff or move forward on deals. Is there though,
Speaker 2: once you have greater clarity and whatever that is, and
Speaker 2: what the macro backdrop is to create that clarity, is
Speaker 2: there though a possibility that the pricing is just too
Speaker 2: high that you can't move forward. It doesn't make sense anymore.
Speaker 6: Well, you know, I think, going back to what I
Speaker 6: said before, the unlock the American energy system, it's the
Speaker 6: same in frankly in Europe and the UK comes from
Speaker 6: this extraordinary problem, right there is so much energy that's
Speaker 6: wasted on the way to get to the point of view,
Speaker 6: so yet more is wasted at the point of view,
Speaker 6: so that that represents that there's a huge saving associated
Speaker 6: with that. So the economic opportunity is actually to build
Speaker 6: energy systems where you need them rather than in the
Speaker 6: middle of nowhere piping the wiring energy where you need it.
Speaker 6: And if you can build any systems on site, it's
Speaker 6: called decentralized generation. You could do it with gas, you
Speaker 6: can do it with cheer thermal ground and as well
Speaker 6: as heat solar. If you can do that, it's cheaper
Speaker 6: than the grid and the construction cost of the new facilities.
Speaker 6: All in is actually we can deliver power systems and
Speaker 6: it's heating cooling systems that are actually cheaper than the
Speaker 6: centralized energy network. It's a massive opportunity. So I think
Speaker 6: that shift of mindset are We're going to build a
Speaker 6: big power plant and then plug it into an aging
Speaker 6: and broken grid. That is the old energy I think
Speaker 6: I think the new energy think should be about on
Speaker 6: site generation that's low cost, low carbon, reliable, and that
Speaker 6: actually marries up these challenges that the trumpet.
Speaker 3: How is that power generated? In your view?
Speaker 6: So we build I'll give you an example. We'll build
Speaker 6: a solar panel or a solar plant on a rooftop
Speaker 6: or on a car port because it's very close to
Speaker 6: the point of view, so we don't have transmission and
Speaker 6: distribution losses. We can sign a long term power purchase agreement,
Speaker 6: which means we can spread the car of the asset
Speaker 6: over the life and all in we can produce power
Speaker 6: that's competitive with, if not cheaper than, the grid in
Speaker 6: an industrial context. Just to give a great example of
Speaker 6: an industry obviously that Washington's looking to protect at the moment.
Speaker 9: Steel.
Speaker 6: You know, steel glass furnaces throw off enormous amounts of
Speaker 6: waste heat and gas our projects. When we generate energy
Speaker 6: on site, we capture that heat and gas. It's free fuel.
Speaker 6: Actually it's into a pollution. We capture it and we
Speaker 6: use that to power turbines to make power and steamback
Speaker 6: for our clients. So the energy world is a wash
Speaker 6: with opportunities to do better, to improve these systems, and
Speaker 6: that's what my firm does. We invest in infrastructure, services
Speaker 6: and projects and companies that just make better energy.
Speaker 2: Jonathan, just have about forty five to fifty seconds left here.
Speaker 2: So if it makes so much sense and is so logical,
Speaker 2: wisen it happening more frequently in terms of what you
Speaker 2: are doing. Just playing Devil's advocate a little bit here
Speaker 2: and trying to understand and just quickly a few things.
Speaker 6: I think you know, the government represents a huge amount
Speaker 6: of energy footprint and most but having said that, most
Speaker 6: market incentives have gone into power generation and utilities roll
Speaker 6: than into the on site generation system. I think it's
Speaker 6: these projects are small and complex, so it takes companies
Speaker 6: like ours that can design systems and then lastly to
Speaker 6: get scale and replication. You know, one of the breakthrough
Speaker 6: markets where I think you're going to see much more
Speaker 6: of this energy is going to be delivered much smarter
Speaker 6: is data centers and that's where I think that's going
Speaker 6: to be driving the innovation because data centers need energy
Speaker 6: on site where they need it twenty four to seven.
Speaker 6: Because I think we're going to see a lot of
Speaker 6: these solutions breaking through.
Speaker 3: Our thanks to Jonathan Maxwell, founder and CEO of sd COL.
Speaker 2: All Right, so I think it's kind of interesting and
Speaker 2: we're all kind of curious about green investing, sustainability investing,
Speaker 2: like what it will mean as we just kind of
Speaker 2: we're talking about under a Trump white house. Do leaders
Speaker 2: still continue investors continue to invest, thinking well, maybe this
Speaker 2: is only policy for a few years. And you know,
Speaker 2: I think you layer on top of that kind of
Speaker 2: what happened in this past week. You know, Canadians went
Speaker 2: to the polls they elected Mark Carney, leader of the
Speaker 2: Liberal Party, to be their prime minister. He is a
Speaker 2: newcomer to politics, but is well well known in international
Speaker 2: finance circles, running both the Bank of Canada and the
Speaker 2: Bank of England. He's also a climate champion. We know
Speaker 2: because he has certainly been involved in Bloomberg activities, including
Speaker 2: being a member of the board.
Speaker 8: Yeah.
Speaker 3: Canada, though we should notice, far from reaching its legally
Speaker 3: mandated goal to achieve net zero by twenty fifty. It's
Speaker 3: got one of the highest emissions per capita anywhere in
Speaker 3: the world. So, now that Carney has been elected, the
Speaker 3: question is will he be able to translate his international
Speaker 3: climate leadership into domestic policy or will climate fall by
Speaker 3: the wayside as he fortifies Canada in a trade war
Speaker 3: with the US.
Speaker 2: Yeah, exactly, So I guess we'll ultimately see, you know,
Speaker 2: how things will play out.
Speaker 3: You're listening to Bloomberg Business Week. Coming up, the Saudi
Speaker 3: Prince who's back in the spotlight, and friends with President
Speaker 3: Trump's first buddy.
Speaker 2: The Bloomberg Big Take is coming up next. This is
Speaker 2: Bloomberg Business Week.
Speaker 1: This is Bloomberg Business Week Daily with Carol Masser and
Speaker 1: Tim Stenoveek on Bloomberg Radio.
Speaker 2: We're going to talk about someone who has been a fixture,
Speaker 2: no doubt about it, of the global investment world. His
Speaker 2: financial moves watch closely. One of the very successful and
Speaker 2: uber rich members among Middle East royalty and yet, as
Speaker 2: Bloomberg's Devn Pendleton rights, Prince Awilid Bintelal is one of
Speaker 2: a kind figure among the rich and the powerful in
Speaker 2: the Middle East Gulf region. Devon has been at his
Speaker 2: top floor office in Kingdom Center. It's a landmark of
Speaker 2: the rial skyline several times. She is Bloomberg News Wealth Reporter.
Speaker 2: Her Bloomberg exclusive on Prince abi Leid is Today's Bloomberg
Speaker 2: Big Take. It's also among the most read on the
Speaker 2: Bloomberg on this Friday. She joins us here in studio,
Speaker 2: really great story about someone that I feel like at
Speaker 2: one point, Devin, we talked about him constantly, over and
Speaker 2: over again in terms of his investments, and then you know,
Speaker 2: he kind of got quiet. And then there, of course,
Speaker 2: was a big thing that happened over in Saudi Arabia.
Speaker 2: Take us back to who he is and then the
Speaker 2: moment it feels like things changed.
Speaker 14: Sure well, thank you, thank you, Carol, thank you Tim.
Speaker 14: So Prince Agilid is he's a Saudi billionaire and he's
Speaker 14: a member of the royal family. I mean, the royal
Speaker 14: family is huge. There's thousands of members, so He is
Speaker 14: related to the king, but not like in the kingly
Speaker 14: line of succession as we think of it, but a
Speaker 14: prominent member and very very entrepreneurial from a young age.
Speaker 14: He attended college in the US and started investing here
Speaker 14: and there in Saudi Arabia. But he really the reason
Speaker 14: we all talk about him and know him is that
Speaker 14: he made a bet on City Bank back in the
Speaker 14: eighties when it was really struggling. That bet did tremendously well.
Speaker 14: For a long time he was City's biggest shareholder. He
Speaker 14: went on to form relationships with Rupert Murdoch, with Bill Gates.
Speaker 14: He bought a steak in the Four Seasons, He bought
Speaker 14: a steak in news Co. He had a steak in Disney,
Speaker 14: he funded euro Disney, I mean all over and also
Speaker 14: very prominent hotel investors, some amazing properties and just like
Speaker 14: a larger than life character. He was a fixture, like
Speaker 14: you said, always showing up on financial television. Yeah, loved
Speaker 14: to be quoted. He always traveled with a motorcade like
Speaker 14: he had an entourage with him. Incredibly lavish lifestyle.
Speaker 3: And then pretty much overnight November twenty seventeen, everything changed.
Speaker 14: Everything changed. So in November twenty seventeen. This was about
Speaker 14: a year and a half after King Salman became King
Speaker 14: of Saudi Arabia and his son, Crown Prince Muhammad bin
Speaker 14: Salman was really just basically running the show in Saudi Arabia.
Speaker 14: Incredibly young and ambitious guy, and he locked up hundreds
Speaker 14: of the elite of Saudi Arabia, not just businessmen, but
Speaker 14: also governors, government ministers, prominent people, philanthropists, business people detained
Speaker 14: them at the RITZ, and that included Prince Albhalid, which
Speaker 14: was a big deal because Prince Albalid at that point,
Speaker 14: like kind of prior to this moment, was really like
Speaker 14: for the US, I mean, maybe the most famous Saudi,
Speaker 14: Like he was what a lot of investors thought of,
Speaker 14: or Wall Street thought of if you mentioned Saudi Arabia,
Speaker 14: because Saudi too was so private and closed off for
Speaker 14: so long, like it was difficult to crack. They weren't
Speaker 14: investing like it is, nothing like it is today. Albalid
Speaker 14: was detained there for eighty three days. Nobody really heard
Speaker 14: from him. They took everybody's phones. After eighty three days,
Speaker 14: he was released and Bloomberg actually had the first interview
Speaker 14: with him when he came out. He said, everything's good.
Speaker 14: He didn't look so great, he was quite thin, but
Speaker 14: he assured us everything's good. He said he'd struck an
Speaker 14: agreement with the government. He couldn't say anything about it,
Speaker 14: but just said, you know, business is normal. And it
Speaker 14: was like, oh, okay, all right, business as usual. But
Speaker 14: he has a very very big, prominent investment company called
Speaker 14: Kingdom Holding, which has stakes all over the world old
Speaker 14: and he pretty much went quiet, like after he got
Speaker 14: out of the ritz. He gave that one interview and
Speaker 14: then didn't nearly have the same public profile that he
Speaker 14: had before.
Speaker 2: What I love is you say? The terms of the
Speaker 2: agreement were secret, but it was clear that the Saudi government
Speaker 2: had a close interest in his portfolio, with his stakes
Speaker 2: in hotels, aviation, and entertainment, all sectors overlapping with Vision
Speaker 2: twenty thirty. So what do folks say that they wanted
Speaker 2: to exactly know what he was invested in.
Speaker 14: He owned ninety five percent of Kingdom Holding, this big
Speaker 14: publicly traded conglomerate before and in twenty twenty two, the
Speaker 14: Public Investment Fund or PIFF bought roughly eighteen percent of it,
Speaker 14: so they actively had a stake at this point. I mean,
Speaker 14: they definitely had an interest before. And I think a
Speaker 14: big reason that his investment empire was interesting to them
Speaker 14: is that he for long time is invested in hotels
Speaker 14: and airlines and entertainment, and these are all core sectors
Speaker 14: that are very important for Vision twenty thirty is they
Speaker 14: try to diverse FY away from oil and you know,
Speaker 14: become a tourist destination, and he's very useful for that.
Speaker 14: Like he's been a hotel investor for a really long time.
Speaker 14: He has relationships with Bill Gates in the four seasons
Speaker 14: of management, and so you've seen a lot more domestic
Speaker 14: investment by all the lead in very specific projects.
Speaker 3: Some of those projects include projects by none other than
Speaker 3: Elon Musk. And I was pretty taken by one of
Speaker 3: the one of the things that he told you. He
Speaker 3: said to you in February when you were having one
Speaker 3: of your Zoom calls. Musk is de facto vice president
Speaker 3: and running the show in.
Speaker 14: Washington, Yes, and he was saying that in the context
Speaker 14: of talking about the value of X at that point,
Speaker 14: because you know, from we're all looking at X and thinking, gosh,
Speaker 14: its value has kind of really fallen, Like since Elon
Speaker 14: took it private and we saw so many advertisers flee.
Speaker 14: That had a big impact. He was roughly forty four
Speaker 14: billion dollars gross valuation when he bought it. Alwillis had
Speaker 14: tremendous conviction that it was worth more than that. So,
Speaker 14: you know, one of the first things he said to
Speaker 14: me was like, Hey, this is a valuable entity and
Speaker 14: you can't say that it's not. Look at where Elon
Speaker 14: Musk is now.
Speaker 3: That was Devin Pendleton, Bloomberg News Wealth reporter.
Speaker 2: We sort of check out the story too online and
Speaker 2: on the Bloomberg Just a great read, so much detail,
Speaker 2: all right, jogging on a treadmill or sweating over a
Speaker 2: stationary bike and a room full of strangers. It is
Speaker 2: so out moving heavy objects. That's it. Jim's are bulking
Speaker 2: up on strength training to satisfy an increasingly muscle obsessed population,
Speaker 2: especially we women and also those older Americans.
Speaker 3: With what's going on? Is Red Brown, Bloomberg News Earnings reporter.
Speaker 3: He talks about the rewiring of gems and how he
Speaker 3: got the idea to write the story for Bloomberg BusinessWeek.
Speaker 13: Well, the idea for the story really started when I
Speaker 13: was listening to Planet Fitness Earnings call, like I'm constantly
Speaker 13: doing listening to Ernie's calls, and they were discussing how
Speaker 13: they are trying to make space for more lifting equipment.
Speaker 13: My experience with Planet Fitness has always just been kind
Speaker 13: of like a sea of treadmills of ellipticals. You know,
Speaker 13: they have this like purple and yellow gear, so it's
Speaker 13: like very striking and kind of iconic. But they were
Speaker 13: talking about, yeah, we're removing cardio equipment to make room
Speaker 13: for strength, and you know a lot of that is
Speaker 13: coming from you know, the one if you open up
Speaker 13: Instagram or TikTok or what have you, it's like it's everywhere, right,
Speaker 13: you see everyone in the gym lifting weights. So yeah,
Speaker 13: just kind of going down that rabbit hole.
Speaker 3: Well I was gonna say there was there was like
Speaker 3: a New York Times article recently about this, and I
Speaker 3: think the whole movement with longevity and a lot of
Speaker 3: millennials getting older and realizing, you know what, my back
Speaker 3: is hurting a little bit m hm, realizing that in
Speaker 3: order to prevent those things from happening, you do have
Speaker 3: to make sure you stay in shape and not just
Speaker 3: go on go jogging. You go into the sort of
Speaker 3: the history of jogging in the piece red and like
Speaker 3: how it's happened in the US. But I think, Carol,
Speaker 3: a big part of it is is this idea of
Speaker 3: people getting older and.
Speaker 2: The way that you older millennials And but.
Speaker 3: No, I mean this is true, It's really true. Like doctors,
Speaker 3: there's been a real shift with how people think about weightlifting.
Speaker 9: I have to say, we.
Speaker 2: Start talking about your story because what I think is
Speaker 2: really fascinates that it's being rus also kind of pushed
Speaker 2: by women and older folks. But we brought it up
Speaker 2: and everybody starts saying, well, yeah, as you get older,
Speaker 2: like you need the muscular strength, it's better in terms
Speaker 2: of your bone structure and everything and your health overall.
Speaker 2: It makes a huge difference.
Speaker 13: And no, and just like the fact that that information
Speaker 13: has just been getting disseminated through the population through social media, right,
Speaker 13: Like influencers are really pushing that that this is for everyone, right,
Speaker 13: Like there was this kind of notion. And again we
Speaker 13: also kind of trace the history of weightlifting the story
Speaker 13: a little bit. And I think everyone's like thinks about
Speaker 13: you know exactly right, They think about Conan the Barbarian,
Speaker 13: They think about the Hulk. It's like, you know, it's
Speaker 13: these people in the fringes of society, but no, it's
Speaker 13: really it is for everyone's it's for everyone who wants
Speaker 13: to lose weight. You know, cardio sometimes gets the thought
Speaker 13: of is the weight loss option, but really, you know,
Speaker 13: the more research comes out, it's strength training is what
Speaker 13: we'll do it for you.
Speaker 2: So all right, So you hear this like earnings call, right,
Speaker 2: and you're like, okay, interesting idea. But as you started
Speaker 2: to dig into it, how much like were you hearing
Speaker 2: like really from the gyms and stuff. They're like, oh, yeah,
Speaker 2: we're leaning in big time.
Speaker 13: I mean yeah, I mean Crunch is another one, another
Speaker 13: huge gym chain across the country. And you know they
Speaker 13: were saying, there's the flagship store is actually just down
Speaker 13: the street from US on fifty ninth, and they just
Speaker 13: did a two million dollar renovation to remove a yoga studio,
Speaker 13: to remove a spinning class cycling studio.
Speaker 3: Sorry, Peloton, you're going down my eye. My question for you, though,
Speaker 3: is this just a fad? Is this cyclical? Because as
Speaker 3: you point out in the piece, it was jogging in
Speaker 3: the seventies and eighties, then it was aerobic workout taps
Speaker 3: with Jane Fonda, then it's Billy Blank's Tybo, then Peloton
Speaker 3: during the pandemic, like is this just the latest iteration
Speaker 3: or does this one have staying power?
Speaker 15: You know?
Speaker 13: And then there is a lot of this like talk
Speaker 13: right now whether or not like nineties chic is back in,
Speaker 13: whether or not like being really skinny is the way
Speaker 13: to go. But again, the people that I was speaking
Speaker 13: to for this story, be it personal trainers, be it
Speaker 13: these influencers, Yeah, they all tend to think that this
Speaker 13: is does have staying power reason being, and it's not
Speaker 13: just an aesthetic thing for a lot of people anymore.
Speaker 13: It is health driven, right, It's it is people that
Speaker 13: want you know, I sit at a desk all day,
Speaker 13: you know, I can feel myself hunting over. But like,
Speaker 13: you know, if you can work out, it helps you
Speaker 13: have a stronger core and everything.
Speaker 3: Right. So I was talking to my physical therapists about
Speaker 3: this because she's she's like the type of physical therapist
Speaker 3: who is all about strength training, and my experience with
Speaker 3: physical therapy up till her has been all you need
Speaker 3: to do is stretch, stretch, stretch, stretch, and that never worked.
Speaker 3: The only thing that worked for me for getting rid
Speaker 3: of the back pain was actually doing these workouts seriously.
Speaker 3: Oh yeah, it's absolutely weight and yeah, like deadlifts, like
Speaker 3: working on your posterior chain, like all these things that
Speaker 3: she had to educate me about. Yeah, and she said,
Speaker 3: it makes sense given what we do for work. You know,
Speaker 3: what were your professionals. You're sitting at a desk. Stretching
Speaker 3: makes sense for people who are on their feet all
Speaker 3: day every day, those people who work in warehouses, those
Speaker 3: people who are moving, those people who are delivering boxes.
Speaker 3: But if you're sitting at computer all day, you need
Speaker 3: to work out your muscles.
Speaker 13: Yeah, I mean, and also with the running and things
Speaker 13: like that, they tend to be pretty high impact for
Speaker 13: a lot of people too. So it's like, you know,
Speaker 13: as you get older, you can't maybe necessarily do that,
Speaker 13: but you still can bench press. It's all I mean,
Speaker 13: obviously there's a lot of stress there, but there's smart
Speaker 13: ways to do it. Again, with the social media, you're
Speaker 13: also learning that these aren't these these activities are not
Speaker 13: are less intimidating, right, Like someone used to think that
Speaker 13: like a bench press is like I don't know how
Speaker 13: to do that.
Speaker 11: I don't know what the right technique is.
Speaker 13: Yeah, but you can see a million people now do
Speaker 13: it online with perfect technique and they are walking you
Speaker 13: through the different steps. So it really is just open
Speaker 13: this door to every kind of segment of the population.
Speaker 2: I have to say, like Saturday morning and I'm reading
Speaker 2: through news and I go through lookings. Then you get
Speaker 2: caught on Instagram. But it's like one influencer after another,
Speaker 2: and it usually is weight training. I love that though
Speaker 2: you include this as people age, their bone density and
Speaker 2: metabolic health. What doctors are monitoring when they check blood pressure,
Speaker 2: cholesterol and weight decline, weaight training can help manage both
Speaker 2: issues cardio less, so right and so really like I
Speaker 2: do also think when the medical profession that they are
Speaker 2: increasingly saying, well, wait, it's not just about take a walk,
Speaker 2: it's also about doing some weight training.
Speaker 13: Yeah, I mean, and and again to go back to
Speaker 13: why it's women that are really drawn to this, some
Speaker 13: of those issues are tend to be things that affect
Speaker 13: women more. The bone density is something that tends to
Speaker 13: affects women more as they as the age, and it's
Speaker 13: another just kind of great reason for that.
Speaker 2: Carrying the weight of the world.
Speaker 3: For sure, the weight of this show.
Speaker 2: No question, that's a given.
Speaker 3: No question. Red, We're going to stick with us. We're
Speaker 3: gonna do a double dose of Red Brown. Okay, this
Speaker 3: is a very special edition, a special Friday edition of
Speaker 3: Bloomberg Business Week. But before we do that with earnings
Speaker 3: Big Picture are thought.
Speaker 2: You were going to ask him how much he bench press?
Speaker 3: No, come on, Carol, We're beyond that.
Speaker 2: You know you're among friends.
Speaker 13: I can't tell you.
Speaker 11: Triple digits.
Speaker 3: Yeah, triple digits. There we go.
Speaker 13: On exactly one on one.
Speaker 3: Red Brown Bloomberg News Earnings Reporter.
Speaker 2: Still ahead on Bloomberg Business Week, The Bloomberg Pursuits Summer
Speaker 2: travel guide from Sea.
Speaker 3: To Shining Sea. The Grand Resort is making a comeback.
Speaker 2: And move over floating cities and bring on the butler
Speaker 2: and caviar. Cruising is now lux. This is Bloomberg.
Speaker 1: You're listening to Bloomberg Business Week Daily with Carol Masser
Speaker 1: and Tim Steneveek on Bloomberg Radio.
Speaker 9: Watches most of your time. Pest sieved as a time cupsil.
Speaker 16: It's very chic and posh.
Speaker 3: The most powerful car made in the US.
Speaker 15: The beautiful interior, the iconic designs.
Speaker 1: Now it's time to take a look at luxury with
Speaker 1: Bloomberg Pursuits.
Speaker 2: The official start to summer is just around the corner,
Speaker 2: and so for those seeking out suggestions on what to do,
Speaker 2: what your luck as, the BusinessWeek Pursuits team is out
Speaker 2: with its summer travel.
Speaker 3: Guide, everything from the grand American hotels that are having
Speaker 3: a notable resurgence to why even snobs like cruising now,
Speaker 3: especially when on an ultra lux ship.
Speaker 13: Sign me up.
Speaker 2: Butler's fortey bathrooms an endless caviar included here with the
Speaker 2: spoils of summer travel. As the editor of Bloomberg Pursuits
Speaker 2: Chris Rouser and Pursuits Travels are Nikki Eckstein. Guys, great
Speaker 2: to have you here with that for te for tee
Speaker 2: for te. It's not like a fritter. It's not like
Speaker 2: something you eat. Here's what frette is.
Speaker 15: If you go into your hotel bathroom and you see
Speaker 15: frete on the tag of your bathrobe, you know you're
Speaker 15: in a nice place.
Speaker 2: That's what frette is. Thank you, And obviously you have
Speaker 2: to ask, all right, so where do we want to start.
Speaker 2: We want to talk about these American resorts. First of all,
Speaker 2: I feel like I love when the old is kind
Speaker 2: of revitalized and brought back. What's going on, guys.
Speaker 15: So here's something you probably never knew. Americans invented the
Speaker 15: great resort. Like, this is not a European conceit resorting.
Speaker 15: I always thought it was. It's not.
Speaker 6: It's American.
Speaker 2: Europeans always know how to vacation.
Speaker 15: Yeah, absolutely, you think about going to the Riviera, the
Speaker 15: med blah blah blah. But like, actually, the beach resort
Speaker 15: is a US invention, and it's something that started right
Speaker 15: near where we are now in New York State or
Speaker 15: around hot Springstown's upstate, actually where railroad lines would end
Speaker 15: and where the old kind of moneyed people back in
Speaker 15: the eighteen hundreds could just like hop on a train
Speaker 15: and end up in beautiful mother Nature and dip in
Speaker 15: the hot springs and have a vacation.
Speaker 3: Well back then, if they wanted to go outside of
Speaker 3: New York, maybe they'd take a five day trip on
Speaker 3: a railroad out to Coronado, California. Yes, this is around
Speaker 3: sunny San Diego.
Speaker 15: Became a reality in the eighteen eighties, around a time
Speaker 15: when somebody became really fascinated with the land out on
Speaker 15: the most extreme southwestern coast of our country, decided it
Speaker 15: would be a beautiful place to put a resort and
Speaker 15: built up this incredible Victorian building that still stands today
Speaker 15: and is now the subject of a five hundred million
Speaker 15: dollars innovation that's wrapping up in June.
Speaker 2: Back then, they spent two dollars and fifty cents or
Speaker 2: three dollars in.
Speaker 3: Fiftures inclusive too for that price.
Speaker 2: Chris Rauser come in, because I think about you guys
Speaker 2: have been doing these specials and these summer travel issues
Speaker 2: and sections for a long time. I'm just curious when
Speaker 2: Nikki maybe brought this up, especially about the great old
Speaker 2: American resort coming back. It's like my question was, like,
Speaker 2: why are they coming back now?
Speaker 16: Yeah, Nikky and I have actually been talking about some
Speaker 16: version of this for a long time because we love
Speaker 16: those beautiful old giant American resorts. And I'm from New
Speaker 16: England and there used to be a lot of them
Speaker 16: because a lot of the train lines ended on coastal
Speaker 16: Maine up in Vermont, and a lot of them are
Speaker 16: gone because they burned down because they were made of wood.
Speaker 16: So sad and so I grew up seeing pictures of
Speaker 16: these incredible resorts all up the coast towns, and so
Speaker 16: we'd we've talked about how much we like them. And
Speaker 16: then the hotel Dell and Coronado had this incredible, huge renovation,
Speaker 16: and we thought this is the perfect time to actually
Speaker 16: write about it because it's one of the remaining ones
Speaker 16: and it is so visually stunning.
Speaker 2: Private equity.
Speaker 15: I mean, let me just put this out there, like
Speaker 15: five hundred million dollars is not a normal amount to
Speaker 15: spend renovating a hotel. It's not a records that are
Speaker 15: There are bigger projects that have been done in like
Speaker 15: Vegas maybe and in Singapore, but this ranks way up
Speaker 15: there with the highest investments ever for a hotel. But
Speaker 15: it was private equity, right, it isla private equity. Blackstone
Speaker 15: did it, and and they really spared no expense. It
Speaker 15: is a stunning, stunning place, completely restored over a period
Speaker 15: of about five.
Speaker 2: Years to its former glory.
Speaker 15: You walk into the lobby and the wood work is
Speaker 15: just as it was back then. You really feel transported
Speaker 15: and it is. I mean, it's really if it took
Speaker 15: five days to get there now it would still be
Speaker 15: worth the trip.
Speaker 3: No longer a dollar fifty to two dollars.
Speaker 15: Fortunately not who is this for?
Speaker 3: What's the price point when you think about these types
Speaker 3: of resorts around the country.
Speaker 15: So one reason that that Blackstone spent so much money
Speaker 15: on it is that they did an expansion that kind
Speaker 15: of turned the hotel into a lot of little hotels
Speaker 15: within a hotel, And there's more affordable versions of it,
Speaker 15: and there's more expensive versions of it. You can spend
Speaker 15: around five hundred dollars a night to stay in the
Speaker 15: old Victorian building where the rooms are a little bit small,
Speaker 15: but they're very, very beautiful. Or you can spend like
Speaker 15: three thousand dollars on a two bedroom suite with like
Speaker 15: a wrap around pad. It's it's a five hundred. It's
Speaker 15: actually very doable.
Speaker 2: Chris, I have to ask you though, because you're right
Speaker 2: in New England, the whole up and down the coast,
Speaker 2: I feel like there's just so many.
Speaker 3: I thought you were going to say, because Chris is
Speaker 3: a Disney adult exact, I'm actually not.
Speaker 15: I'm the Disney I'm with you, Nikki, But I mean,
Speaker 15: is there one that you've stayed or you want to
Speaker 15: stay at as you like, look at.
Speaker 16: This, there's a new one that's really quite old, maybe
Speaker 16: almost two hundred years old, the Asticou in Maine, and
Speaker 16: that has just gone undergone a renovation as well, and
Speaker 16: it has these cabins that you can stay at and
Speaker 16: it looks really idyllic and where I would love to
Speaker 16: go there, all.
Speaker 2: Right, looking forward to that. Well, in the meantime, you.
Speaker 3: Want to get on a ship or do you want
Speaker 3: to go to Greenland?
Speaker 2: Carol, I think we should get on a ship first,
Speaker 2: because everybody loves to cruise, but this is different.
Speaker 15: I mean, not everybody loves to cruise, and that's kind
Speaker 15: of the whole point.
Speaker 2: I'm not a cruise person.
Speaker 15: I would say I'm a Disney person, but I'm not
Speaker 15: a cruise person, and this.
Speaker 2: New seeing the Disney cruise ship, yeah I would.
Speaker 15: I would do those because this trend kind of adds
Speaker 15: to the options for people who have been cruise of
Speaker 15: verse in the past. And the whole thing is that
Speaker 15: hotel companies have realized that one way that they can
Speaker 15: kind of build audience is by building ships. By building
Speaker 15: vessels that can take their loyal guests to various destinations
Speaker 15: where they have hotels as a business model.
Speaker 2: This makes total sense.
Speaker 15: But they're not going to build like, you know, six
Speaker 15: thousand people behemoths. They're going to build things that look
Speaker 15: more like yacht. Doesn't that lado deck there might.
Speaker 3: Be a leader.
Speaker 15: It looks different. And as hotels go into this space,
Speaker 15: Ritz Carlton has done it four seasons, is about to
Speaker 15: launch their first ship, a mon is going into this space.
Speaker 15: They're all launching these kind of yacht like they're large
Speaker 15: yachts really, and now cruise lines are trying to do
Speaker 15: the same thing to stay fresh and competitive, and so
Speaker 15: we've got this new yacht experience that's available to more
Speaker 15: of us than regular yachts would be available to Chris.
Speaker 2: How much does it.
Speaker 16: Cost, Well, it can be expensive. Carol trips like this
Speaker 16: off At start at fourteen thousand dollars per week per couple.
Speaker 16: That includes bottomless champagne and butler service and things like that.
Speaker 16: Orient Express is opening up a two hundred and twenty
Speaker 16: meters fifty four sweet vessel that's going to be about
Speaker 16: nineteen thousand per cabin that's coming soon. I will say
Speaker 16: one of the things that we talked about is is
Speaker 16: this whole the whole snob thing with cruises is like,
Speaker 16: if you can afford a yacht, why would you want
Speaker 16: to be on a cruise with a bunch of other people.
Speaker 2: Please don't hate us, all of you who are listening.
Speaker 16: And I just don't have a yacht, so this is
Speaker 16: not something that I could relate to, and I can't
Speaker 16: afford these kinds of trips. But what's interesting is some
Speaker 16: of the leaders of these companies say, people love love
Speaker 16: the group aspect of it. They love being like in
Speaker 16: this this sort of like select crew of people who
Speaker 16: are you know, big four Seasons people or whatever, and
Speaker 16: getting to know strangers. And I thought that was just
Speaker 16: something Weepilbeians like to do.
Speaker 15: Well, you know, there's something funny that like, there's an
Speaker 15: element that's that came up in this story that also
Speaker 15: came up in the Grand American Hotel story. Both historically
Speaker 15: and in the current moment. People would go to Grand
Speaker 15: American Hotels to find like minded folks, to find their
Speaker 15: similar slice of society and reb elbows with them. And
Speaker 15: that's what's happening on these cruise ships too. And in fact,
Speaker 15: one of the new company, Explore Journeys, their new president
Speaker 15: came over from the c suite of Amon Resorts, and
Speaker 15: she says that the thing that has surprised her the
Speaker 15: most about this business that she's now in is the
Speaker 15: community that forms on every cruise and the way that
Speaker 15: people mingle and talk, and how that becomes the defining
Speaker 15: part of their experience.
Speaker 2: I think I've heard where people meet people and cruises
Speaker 2: and stay friends like for life and stuff.
Speaker 1: But it's like summer camp.
Speaker 3: Look at Tim Tims like can we talk? Can we
Speaker 3: can we move on?
Speaker 11: All?
Speaker 12: Right?
Speaker 2: Do you want solitude?
Speaker 3: Okay? I you know one of you said something about
Speaker 3: fjords and cruising to fjords. You can do that on
Speaker 3: cruise ships. But you can also jump on a plane
Speaker 3: from the US now and go right to Greenland, which
Speaker 3: seems like it's kind of turning into a hot tourist
Speaker 3: destination despite the backtop of everything happening from a national
Speaker 3: security perspective. You're in the US.
Speaker 15: Well, can you take just take a guess how long
Speaker 15: it takes to fly to Greenland.
Speaker 3: I know exactly how because I read the story four
Speaker 3: and a half hours.
Speaker 15: For four hours and fifteen minutes, depending how the wind blows.
Speaker 3: That's really close.
Speaker 2: It's so close. So what's there when we get there?
Speaker 3: Not a lot of people, Carol not what's there? Why
Speaker 3: did you look at me like that's cold and not
Speaker 3: a lot of people. Why did I look at you?
Speaker 16: Oh out, Yeah, it's fifty seven thousand people live there
Speaker 16: year round, so and it's a vast obviously vast island.
Speaker 16: And in this trend, this modern trend of cool cations,
Speaker 16: where people want to travel somewhere that's not so hot.
Speaker 16: With global warming and leaving places like the Mediterranean in
Speaker 16: the summer, suddenly places like Scandinavia and Greenland are becoming very,
Speaker 16: very popular and the demand, according to travel agents that
Speaker 16: we talk to, is quote insane to go to Greenland.
Speaker 2: I find it fascinating about, like the warming of the earth,
Speaker 2: that people are increasingly looking for cooler places.
Speaker 3: I mean, this place is cool, Like you're talking fifty
Speaker 3: degrees as highs in the summer, which.
Speaker 15: If you think about it, is actually the perfect weather
Speaker 15: if you're going to go like hiking or doing outdoor activities.
Speaker 15: You know you're going to get break up a little
Speaker 15: bit of a sweat anyway, even if it's fifty degrees
Speaker 15: So that's kind of the perfect weather for outdoor adventure
Speaker 15: and there's a lot of that in Greenland. You can
Speaker 15: go paddle warning and fjords. You can meet kind of
Speaker 15: the local equivalent of dogs letters in the summer, they're
Speaker 15: going to have their packs out and about. There's really
Speaker 15: interesting dining that uses foraged cuisine and you can go
Speaker 15: out and kind of like find your own ingredients.
Speaker 16: There's a lotion for your dinner, tim which I know,
Speaker 16: let's go do.
Speaker 3: Let's go yah. I actually read of all the places
Speaker 3: that we've talked about in recent months, this is somewhere
Speaker 3: I really do want to go. Also because it just
Speaker 3: seems like the solitude of it seems really cool. I
Speaker 3: think one challenge is the lodging aspect. There just isn't
Speaker 3: a lot of it.
Speaker 15: But the places that do exist are kind of incredible.
Speaker 15: And if you think about it like a safari, if
Speaker 15: you think about it like these really lux tents where
Speaker 15: you're going to be, you know, able to see and
Speaker 15: witness the outdoors all around you, whether they're domes or
Speaker 15: you know, canvas walls that you can retract to take
Speaker 15: advantage of the beautiful vistas.
Speaker 2: Like it's a place to.
Speaker 15: Really connect with your surroundings. The different version of luxury great.
Speaker 3: I think logic, you know what, I think, I'm going
Speaker 3: to do this.
Speaker 2: Book ahead? Is it expensive? Book ahead? Is it expensive?
Speaker 2: It can be, but it doesn't have to be. Okay,
Speaker 2: look at it. He's like, I'm well in.
Speaker 3: The flights, what now two flights a week?
Speaker 15: Yeah, and there will be more, like Greenland is going
Speaker 15: to grow in the coming years. There will be more airports,
Speaker 15: international airports in different parts of the country, allowing us
Speaker 15: to kind of tap into different landscapes throughout Greenland more easily.
Speaker 15: Right now you connect via helicopters. There will be more
Speaker 15: flights in it.
Speaker 3: We gotta do that before they all push back on
Speaker 3: us doing that. I mean it's kind of like fifteen
Speaker 3: twenty years ago Iceland. Yes, it reminded me of Yeah,
Speaker 3: I mean we do twenty five years ago at this point,
Speaker 3: but there was a point where there were so many
Speaker 3: tourists there that got pretty overwhelming, I think for a
Speaker 3: lot of people.
Speaker 15: But Greenland offers you a lot more space to spread
Speaker 15: out than Iceland does.
Speaker 2: Don't get us wrong, we like people. We just when
Speaker 2: we travel, we don't like to turbout.
Speaker 3: She always tells me where she's sitting, so I don't
Speaker 3: book a seat.
Speaker 9: Next to this.
Speaker 2: So true, we travel, we got to leave it there,
Speaker 2: but check out the section because there's also where the
Speaker 2: Boss to break you guys talk to executives about where
Speaker 2: they go and then what to do about national parks,
Speaker 2: especially with all the changes in governments and cutbacks. So
Speaker 2: really great advice on how to explore that over the summer. Guys,
Speaker 2: Thank you so much.
Speaker 3: That's the editor of Bloomberg Pursuits Chris Rouser and Pursuits
Speaker 3: Travels are Nikki Ckstein.
Speaker 2: And that wraps up the weekend edition of Bloomberg Business
Speaker 2: Week from Bloomberg Radio. Thank you so much for joining us.
Speaker 3: Be sure to tune into Bloomberg Business Week daily and
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Speaker 3: Bloomberg dot com and always on the Bloomberg terminal. I'm
Speaker 3: Tim Stunabeck.
Speaker 2: I'm Carol Master. Tim is headed to Greenland and I'm
Speaker 2: going to check out one of those lit squeezes.
Speaker 11: I'm just gonna.
Speaker 3: Say, oh my god.
Speaker 2: I have a good and safe weekend. Everyone to stay
Speaker 2: with us. Today's top stories and global business headlines are
Speaker 2: coming out right now.