Speaker 1: This is Bloomberg Business Week Inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news as it happened. Bloomberg
Speaker 1: Business Week with Carol Messier and Bloomberg Quick Takes Tim
Speaker 1: Stinovic on Bloomberg Radio. Hi, everyone, Welcome to the weekend
Speaker 1: edition of Bloomberg Business Week. J Powell's Federal Reserve making
Speaker 1: its boldest move yet in the fight to curb inflation,
Speaker 1: calling for the first seventy five bases point interest rate increase.
Speaker 1: Since it was a big one, it was a big one.
Speaker 1: Powell also signaling that another such increase could come in July.
Speaker 1: And yet the federal funds rate is far from America's
Speaker 1: biggest economic concern right now. Our cover story will explain
Speaker 1: why in just a moment. Also ahead on our broadcast,
Speaker 1: the outgoing see of the world's largest cruise vacation company
Speaker 1: talking about the prospects for a global recession. Also the
Speaker 1: CEO of SunPower telling us why the time to shift
Speaker 1: to solar it's now, And we'll check in on the
Speaker 1: retail environment. We'll do that with fashion entrepreneur Ray Burn.
Speaker 1: Some great voices on this weekend edition of the program
Speaker 1: All About to Come. We begin with this week's cover story,
Speaker 1: though it does come from the Remarks section of Bloomberg
Speaker 1: Business Week, courtesy of assistant managing editor at the magazine,
Speaker 1: Jim Ellis. High inflation rattling Americans in part because it
Speaker 1: makes them feel like things are spiraling out of control,
Speaker 1: and there are plenty of signs that they are. Jim
Speaker 1: and Business we getitor Joe Weber explain, it makes you
Speaker 1: go to some dark places really quick. Uh. And that
Speaker 1: is because of the nature of the last year and
Speaker 1: the spike that we've seen in inflation. Um has been
Speaker 1: something that Americans who have not had a sense of
Speaker 1: of what infliction means is suddenly it is gripping the
Speaker 1: country and it is leading to all kinds of anxieties,
Speaker 1: and that's reverberating across markets and everything else. And so, uh,
Speaker 1: you know, I turned to Jim Ellis early in the
Speaker 1: cycle and said, you know, Jim, you're uh elder statesman
Speaker 1: on the staff. You live through the seventies and eighties.
Speaker 1: At Business Week, You've written We've asked you to write
Speaker 1: about this stuff before. Can you kind of give us
Speaker 1: a toe hold in it and then you know, between
Speaker 1: the Fed and the markets and everything. This week, it
Speaker 1: really to me what Jim ended up writing was really
Speaker 1: this sense of uh what it all means? Right? And
Speaker 1: and uh so, Jim, I'm just curious, like I'll take
Speaker 1: Tim's question on children and kind of bring that back
Speaker 1: to you. Why why is inflation such a like almost
Speaker 1: like a cancer for sanity? I guess that it's core
Speaker 1: it's because it's one of those things that people, hey
Speaker 1: don't truly understand, certainly don't understand it in the way
Speaker 1: that economists do and um, but don't really have a
Speaker 1: clear definition for what it is. But they sort of
Speaker 1: know when it's there, they sort and they're afraid of it.
Speaker 1: And I think they're most afraid of it because it's
Speaker 1: one of those things that can affect the quality of
Speaker 1: their life. Um. At the same time they have very
Speaker 1: little control over and because of at people are terrified
Speaker 1: of it. And um, you know, obviously, um, you know,
Speaker 1: an economist might tell you, well, there can be some
Speaker 1: good things about inflation. Inflation starts moving, um, you know,
Speaker 1: if prices are if wages start moving up, then you know,
Speaker 1: particularly for people who are either outside the labor force
Speaker 1: or people at the bottom of labor force. Maybe that's
Speaker 1: a good thing. But you won't find anyone, as Stiller
Speaker 1: in his research to Ride, you know, they didn't find
Speaker 1: a single soul of the hundreds of people the interviewed
Speaker 1: who actually thought that inflation was a good thing. Jim,
Speaker 1: I wanted to go back to something that Joel said,
Speaker 1: you know, he said that you were at you were
Speaker 1: writing about the stuff in the nineteen seventies. You were
Speaker 1: at Business Week, and you wrote about this in the fall,
Speaker 1: inflation in the fall, and you made some parallels to
Speaker 1: what you experienced in the nineteen seventies. And I'm wondering
Speaker 1: now a few months later, as inflation has continued to
Speaker 1: creep up and move higher, if you are starting to
Speaker 1: fear more then you did back in the fall, that
Speaker 1: we are indeed entering some sort of thing that was
Speaker 1: similar to what you experienced in the seventies in a way.
Speaker 1: I mean, obviously there are some rather significant differences between
Speaker 1: now and the seventies. I mean, back then we did have, um,
Speaker 1: you know, we had product shortages that were really important
Speaker 1: because we had energy shortages both in a seventy three
Speaker 1: and and seventy nine where we had you know, gas lines.
Speaker 1: I mean today you can get gas. If you can
Speaker 1: afford five dollars six dollars gallon, you can get it.
Speaker 1: And also, um, we had significantly higher unemployment rates um
Speaker 1: back then than we have now. And now we have
Speaker 1: a labor shortage still from post pandemic. And so in
Speaker 1: a lot of ways, you know, we're in a better
Speaker 1: place than we were in the seventies, obviously, but one
Speaker 1: thing that really rings true here, uh, you know, in
Speaker 1: a similarity to the seventies, is that there is a
Speaker 1: feeling that there are other things afoot. There are other
Speaker 1: things beyond just um, the continual rising prices that are
Speaker 1: making people feel uneasy and out of control and uh,
Speaker 1: with their existence. I mean, right now we have everything
Speaker 1: from um, you know, the pandemic, the pandemic that doesn't
Speaker 1: seem to want to end. Um, the idea that you know,
Speaker 1: we have government system that we don't know if we
Speaker 1: are in control of, if we can trust what the
Speaker 1: president who says that the you know, the very basis
Speaker 1: of democracy, you know, the idea of you know, transfer power,
Speaker 1: that the integrity of elections is all put to question.
Speaker 1: We have um, a lot of things that are making
Speaker 1: people feel uneasy and so UM to sort of get
Speaker 1: a handle on this, I talked to a number of
Speaker 1: sort of researchers, including um Um, you know, economists to
Speaker 1: think about behavior and um. They're saying that when people
Speaker 1: are afraid, they tend to be afraid of everything, and
Speaker 1: that being afraid of one thing, if you have multiple
Speaker 1: sources of discomfort, it actually sort of makes you feel
Speaker 1: even worse. And so right now it's very real to
Speaker 1: say we do have rising prices, so we do have
Speaker 1: um inflation. But at the same time, people feel uncomfortable
Speaker 1: about government, they feel uncomfortable about safety of you know,
Speaker 1: with guns and safety of schools, and all of a sudden,
Speaker 1: it means that you're pushed to the end where you
Speaker 1: sort of think everything's going to hell. I mean the
Speaker 1: FED is uh, you know, they're in the position of
Speaker 1: being at least if if the seventies is any guide,
Speaker 1: I mean that is um Um. You know, the one
Speaker 1: body that can bring it into this. I mean, you
Speaker 1: can beat inflation. You know. The problem is that to
Speaker 1: beat inflation, you often have to beat down the economy
Speaker 1: to the point that the people who will love you
Speaker 1: for it, well, eventually hate you for it. That was
Speaker 1: Bloomberg Business Week Assistant Managing editor Jim Ellis, along with
Speaker 1: the editor of the magazine, Joel Webber, coming up a
Speaker 1: warning from the CEO of sun Power on what could
Speaker 1: be a difficult summer for America's power grid and how
Speaker 1: his company stands to benefit. You're listening to Bloomberg Business Week.
Speaker 1: This is Bloomberg. This is Bloomberg Business Week with Carol
Speaker 1: Masser and Bloomberg Quick Takes. Tim Stinovik from Bloomberg Radio. Well,
Speaker 1: we caught up with him back in March, and as
Speaker 1: someone who has worked at Amazon, he wants to make
Speaker 1: using solar power for the home as easy as buying
Speaker 1: the book. Peter Pharisee as chairman, president and CEO of
Speaker 1: sun Power. It's a renewable energy company. It's got a
Speaker 1: market cap of just about three billion dollars and that
Speaker 1: could go up if the cost of energy continues to
Speaker 1: rise as it has been for much of Well, you're right, Uh,
Speaker 1: it's shocking to see the increases. You know, utility bills
Speaker 1: are rising ten and it's really hitting consumers. Are energy
Speaker 1: energy went up three x? Yeah, it's it's you hear. Yeah,
Speaker 1: you hear a lot of these stories across the country.
Speaker 1: But what I can say on of the man's side
Speaker 1: is it's very strong. We grew in the first quarter
Speaker 1: and despite rising sorry raising some of our prices due
Speaker 1: to supply chain costs, demand in the second quarter. You know,
Speaker 1: we haven't finished the second quarter yet, but I expected
Speaker 1: to grow even faster than it did in Q one.
Speaker 1: So we've been very pleased so far. I think between
Speaker 1: high energy prices and worries about blackouts, you know, people
Speaker 1: are really getting the message solar and battery storage, you know,
Speaker 1: is the way to go. You know, it's interesting that
Speaker 1: you say that my energy company reached me, reach out
Speaker 1: to me recently and wanted to put me in connection
Speaker 1: with the solar company to see if I wanted to,
Speaker 1: you know, kind of put some panels about my roof
Speaker 1: and stuff. So and that just happened in the last week.
Speaker 1: Was at the weekend? Or what's the what's their interest
Speaker 1: in doing that? Like, why would they want you to
Speaker 1: do that? Is it to decrease the demand. I think
Speaker 1: they all are increasingly right and help us out here, Peter.
Speaker 1: I mean, all companies increasingly have to reduce their carbon footprints,
Speaker 1: so if they can somehow wright source out to more
Speaker 1: greener rays um, that's part of their business strategy. I
Speaker 1: think many of the forward thinking you told these exactly,
Speaker 1: they want to reduce the amount of carbon footprint, getting
Speaker 1: a lot of political pressure. But also, you know, when
Speaker 1: the grid is at its most stressed point, they have
Speaker 1: to light up these peaker plants. And these peaker plants
Speaker 1: are typically either coal or gas. They're very destructive on
Speaker 1: the environment because they can't run them very efficiently. So
Speaker 1: their goal is really to get you know, the forward
Speaker 1: thinking utilities are thinking how can we get as much
Speaker 1: residential solar out there? And I'm not sure if you
Speaker 1: guys have heard about these concepts of virtual power plants,
Speaker 1: but it's kind of a concept that utilities will pay
Speaker 1: for consumers to take their solar battery energy and send
Speaker 1: it back to the grid when the grid is most stressed,
Speaker 1: which is usually six to seven PM, and we all
Speaker 1: get home upon our you know, our TVs and air
Speaker 1: conditioning and everything else. So there's a lot of really
Speaker 1: good ideas out there that I think are win win.
Speaker 1: I'm glad Carrol you live in a place where your
Speaker 1: utility is thinking that direction sunny New Jersey. Yeah, it's
Speaker 1: and my roof isn't very big. But I got tell you,
Speaker 1: if you know the price is right, I kind of
Speaker 1: love to do it. One thing I do want to
Speaker 1: ask you, and I love this about peaker plants speakers.
Speaker 1: I was just like googling. I had no idea that
Speaker 1: that's what they're that's what they're referred to. Hey, Peter,
Speaker 1: I gotta they'll take a step back. And we do
Speaker 1: this with all the leaders. So much market volatility. You know,
Speaker 1: we're all like on pins and needles about what the
Speaker 1: Fed's going to do tomorrow. And I do wonder, how
Speaker 1: does I mean your stock has seen a lot of pressure?
Speaker 1: I think down from the early April high, your market
Speaker 1: capit shrunk, so has most of the equity universe. To
Speaker 1: be fair, so volatility, tricky outlook, higher rate environment. How
Speaker 1: does what kind of pressures is putting on you? Guys?
Speaker 1: How do you think about it? And do you have outlook?
Speaker 1: Do you feel like we're going to hit a recession? Well,
Speaker 1: I'm not qualified the answer of the recession. Yes, you are.
Speaker 1: You run a business. You run a business, you have
Speaker 1: to make decisions. Yeah, here's what I would say, right now,
Speaker 1: we have the high class problem of trying to keep
Speaker 1: up with customer demand. So I am chasing labor to
Speaker 1: get more and more installation capacity across the US. And
Speaker 1: as you guys know from all the people you talk to,
Speaker 1: you're never sleeping very well with the supply chain every night,
Speaker 1: so we're constantly seeking more production of more panels and
Speaker 1: more components. So are really my my exclusive focus right
Speaker 1: now is not on the market. It's really on there's
Speaker 1: so much demand out there. You know, we're at a
Speaker 1: point now where we're going to have our third straight
Speaker 1: quarter of record backlog. Obviously that's a wonderful signal about
Speaker 1: how much people love our products and bottom but you know,
Speaker 1: listening to consumers want stuff done fast. Let's say there
Speaker 1: is a recession or there is this pullback and consumer demand.
Speaker 1: We're seeing it in terms of consumer sentiment. With the
Speaker 1: way that consumers are feeling. We know they're concerned about inflation.
Speaker 1: We know high energy prices are eating into their while
Speaker 1: it's and it's not just energy for you know, powering
Speaker 1: the home, it's of course filling up the car as well. Peter, well,
Speaker 1: at what point do they start to pull back on
Speaker 1: purchasing solar or financing solar, Like, what is the calculation
Speaker 1: that you guys have done when it comes to this
Speaker 1: type of data. Yeah, So most of our customers are
Speaker 1: telling us today that they're saving you know, a hundred
Speaker 1: couple hundred dollars a month when they install solar. I think,
Speaker 1: even after paying for solar. Yeah. So I think as
Speaker 1: long as they continue to save money, I don't expect
Speaker 1: that any kind of you know, recession issue will have
Speaker 1: an impact because at the end of the day, the
Speaker 1: equation for consumers is really easy. Am I going to
Speaker 1: save money on this if I take at least or alone? Okay,
Speaker 1: So let I ask the question right now, that's what
Speaker 1: people are seeing. Let me ask a question different way
Speaker 1: because our Bloomberg Intelligence senior commodity strategist Mike mcgloon came
Speaker 1: on earlier with us and talked about this being peak
Speaker 1: oil right now, and that's his prediction that we'll start
Speaker 1: to see energy prices come down. What happens when we
Speaker 1: if and when we start to see energy prices come
Speaker 1: down and and my energy bill goes back to what
Speaker 1: it was two years ago rather than what it was
Speaker 1: last month, then just demand dry up for solar. I
Speaker 1: don't think so. And here's why. So over the last decade,
Speaker 1: UH solar prices have come down roughly seventy so it's
Speaker 1: really a much more affordable product than it used to be. Hey,
Speaker 1: one thing we want to ask you, I'm going to
Speaker 1: be you know, props to our Brian Eckhouse, who was like, hey,
Speaker 1: you gotta you're talking to Peter, You got to ask
Speaker 1: him about this present Biden, you know, looking to kind
Speaker 1: of diffuse. I guess it's safe to say a really
Speaker 1: very complicated trade dispute that has paralyzed the US solar industry.
Speaker 1: UM and you know, he's imposing this two year freeze
Speaker 1: and new tiers for solar imports, invoking the Defense Production
Speaker 1: Acts to support US made pals. I don't know that
Speaker 1: it affects you guys specifically, But how does it or
Speaker 1: how do you think about this? And do you think
Speaker 1: your company's share prices maybe suffered because of it? Well,
Speaker 1: I'm excited about where they want to get to, especially
Speaker 1: in two years, where they really want to incent you know,
Speaker 1: on shore production of solar panels. I think that's fantastic, Carol.
Speaker 1: We announced at our analyst day a couple of months
Speaker 1: ago that we're in late stage discussions with a company
Speaker 1: called First Solar. Uh. They're very famous because they're based
Speaker 1: here in the US and they make their panels here
Speaker 1: in the US. So I think there's just a great
Speaker 1: opportunity as we move forward to get more and more
Speaker 1: of this industry production on shore. Having said all that,
Speaker 1: you're right, the decision that he made to sort of
Speaker 1: postpone any action there had no impact on our business.
Speaker 1: But what it basically did is it will continue to
Speaker 1: keep prices low because it will allow companies to source
Speaker 1: panels from all parts of the world, including China, and
Speaker 1: it will make sure that there's continues to be great
Speaker 1: value in buying solar, particularly again compared to traditional energy prices.
Speaker 1: Still ahead on Bloomberg Business Week and update from what
Speaker 1: our next guest calls the American Riviera, South Florida and
Speaker 1: specifically Miami Beach. One of the region's most prolific real
Speaker 1: estate agents tells us how much rising mortgage rates, inflation,
Speaker 1: and recession fears are squeezing her clients. This is Bloomberg
Speaker 1: Broadcasting from the financial capital of the world, Bloomberg eleven
Speaker 1: Frio in New York to Washington, d C. Bloomberg to Boston,
Speaker 1: Bloomberg one oh six one to San Francisco, Bloomberg nine
Speaker 1: sixty to the country Sirius XM Chado one nine team,
Speaker 1: and around the globe, the Bloomberg Business app and Bloomberg
Speaker 1: Radio dot Com. This is Bloomberg Business Week. We want
Speaker 1: to get to our next guest. She was named the
Speaker 1: number one national agent at Douglas Element some seven fifty
Speaker 1: million dollars in sales volume last year alone, deals in
Speaker 1: and around Miami Beach bar Harmer, fall Harbor, right, ball Harbor.
Speaker 1: I don't know. I'm shaking my head. She's gonna help
Speaker 1: me with this. Uh, and we're gonna get into a
Speaker 1: look at really real estate overall and in particular Florida.
Speaker 1: Dina Golden Tears, the executive director of sales at Douglas Allman.
Speaker 1: She joins, this vast bar harbor. Yeah, Dina, how are
Speaker 1: you great? Thank you so much for having me. Yeah,
Speaker 1: it's good to have you with us. Will help us
Speaker 1: understand what the market's looking like, because we did just
Speaker 1: read that article by our own talking about how we
Speaker 1: are seeing a decline in sales of homes in West
Speaker 1: Palm Beach, Florida. So just give us an idea of
Speaker 1: what you're seeing. Sure, So the market that I specialize
Speaker 1: in really is, uh, the Miami Beach marketplace, which is
Speaker 1: pretty much our American riviera. Um, what we have seen
Speaker 1: the last two years has been uncharacteristic because people couldn't travel,
Speaker 1: so rather than going to Europe or to ask her
Speaker 1: to the Hampton's, we had some of the wealthiest people
Speaker 1: in the world quarantining and hanging out in Miami Beach.
Speaker 1: So we had this NonStop flow of activity, whereas usually
Speaker 1: things dudes slowed down for us in June, July, and
Speaker 1: August and then everyone starts trickling back down for fall.
Speaker 1: So I am hoping that the slowdown that I'm seeing
Speaker 1: here is the reflection of that time tested pattern and
Speaker 1: hopefully not much more. Well. Yeah, so that's what we're
Speaker 1: trying to figure out, Like what is the financial market
Speaker 1: so much? You know, we talk about a Dina all
Speaker 1: the time. We just talked about how some of the
Speaker 1: elite private schools in Florida are getting crowded because so
Speaker 1: much of Wall Street has gone to Wall Street South
Speaker 1: down in Florida. UM, So trying to get an idea
Speaker 1: of is there a slowdown though because of the financial
Speaker 1: market impact and people like I don't know you, you've
Speaker 1: you've seen a lot of cycles. What's your expertise telling you?
Speaker 1: I mean, I'm naturally inclined to be an optimist, so
Speaker 1: I'm hoping that again, it's kind of out of sight,
Speaker 1: out of mind. With some of the deals I was
Speaker 1: working on. The buyers jetted off to Europe early this
Speaker 1: year because they haven't been in two years. They went
Speaker 1: out west early this year, and when you're not in Miami,
Speaker 1: it's really hard to get someone excited about a ten
Speaker 1: million dollar house. UM. I do believe that when they return,
Speaker 1: let's say in October, that I can revive those deals.
Speaker 1: But I did see some things that I was working
Speaker 1: on not come together. When people's stock portfolios were making
Speaker 1: a cry. I'm wondering what's going on when it comes
Speaker 1: to you know, we were talking about decline in prices
Speaker 1: and decline in interest around the country. The housing market
Speaker 1: is certainly seeing moderating demand. I'm wondering how much this
Speaker 1: has to do with with rising mortgages and how you're
Speaker 1: thinking about you know, at what level do we start
Speaker 1: to see mortgages really start to hit demand. I mean,
Speaker 1: I know it has already, but like, what's the number
Speaker 1: you think about? Well, where in seeing the mortgage interest rates,
Speaker 1: the high effect price points so far has really just
Speaker 1: been in one sector of my marketplace, which is three
Speaker 1: to five millions, which in Miami Beach is not you know,
Speaker 1: it's not the top tier of the marketplace. It's like
Speaker 1: a mid place. And in that price point, we've seen
Speaker 1: inventory really dramatically increase and buyers have several listenings to
Speaker 1: choose from, whereas in ninety days they did not. So
Speaker 1: that's just one sector, and I hate to use one
Speaker 1: sector to generalize the whole marketplace because my listening is
Speaker 1: above ten million, my listening is above twenty million. I'm
Speaker 1: showing more than my listing the law priced wines. So
Speaker 1: you know, it's interesting. Tim and I had a conversation
Speaker 1: yesterday about rents in New York City particular, and I
Speaker 1: know Florida, in Southern Florida's is really your world, but
Speaker 1: it was about the kind of record rents and just
Speaker 1: crazy and we're like, what happened to you? Everybody leaving
Speaker 1: New York City? It's like, what has happened in this
Speaker 1: real estate market. Well, I think if you if you're
Speaker 1: a believer that people are not going to be buying
Speaker 1: as much because they're concerned about interest rates, then you
Speaker 1: have to be a believer that they want to rent.
Speaker 1: So if they're gonna be renting, it's going to make
Speaker 1: the rental market even hotter. So people aren't buying. You're saying, right, No,
Speaker 1: I'm saying if you're if you're a believer that people
Speaker 1: that are, the market is going to slow down because
Speaker 1: people don't want to buy. The race are too high,
Speaker 1: and then what are they gonna do? They're going to
Speaker 1: go rent? What do you hear from your colleagues in
Speaker 1: New York just in the last twenty seconds that we
Speaker 1: have with you about slowing Are we going to see
Speaker 1: a slowdown in New York when it comes to sales?
Speaker 1: I'm not sure nobody's complaining. I mean, everyone's still, you know,
Speaker 1: really crushing it. But we haven't really seen in the
Speaker 1: after effects. You know, the deals that are closing in
Speaker 1: my market, there's sales millions of dollars above apps. So
Speaker 1: we're still riding high because those deals happen sixty years
Speaker 1: ago and they're just closing now, dena five seconds at
Speaker 1: US buyers are outside the U s real quickly. It's
Speaker 1: always the US, but the outside US buyers are back
Speaker 1: now and hopefully one of them will buy my hundred
Speaker 1: million dollars less than the Golden Beach. That was Dina
Speaker 1: Golden Tear. She's executive director of sales over Douglas Element.
Speaker 1: You're listening to Bloomberg Business Week. As we just heard,
Speaker 1: Miami is home to a hot housing market and it's
Speaker 1: also home to the world's largest cruise ship company. Of next,
Speaker 1: our exclusive interview with Carnival President and CEO Arnold'donald. You're
Speaker 1: listening to Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes Tim Stinovik from Bloomberg Radio. Back in late April,
Speaker 1: Carnival named a new CEO to take over August one
Speaker 1: on A. Donald has been in that top spot since July,
Speaker 1: steering the company through a series of tough times, and that,
Speaker 1: of course, tim includes the pandemic. Donald is poised to
Speaker 1: become the company's vice chairman in August. Until then, he
Speaker 1: remains in charge of the world's largest cruise vacation company.
Speaker 1: He joined US for an exclusive interview this past week,
Speaker 1: and Carol, you began by asking him about the chances
Speaker 1: that we may be facing a global recession in the
Speaker 1: near term. We're prepared to try the weather that storm,
Speaker 1: and we have sufficient liquidity. We've done with twenty nine
Speaker 1: billion dollars of financial transactions UM since ROM the beginning
Speaker 1: of of COVID on this COVID period UH and so
Speaker 1: we are well positioned with liquidity UM. As we said
Speaker 1: in the last I can't of a full business update
Speaker 1: now because we're between corners. But from the last business
Speaker 1: update we gave at that time we had three quarters
Speaker 1: of the fleet sailing UM. Occupancy on those ships that
Speaker 1: were sailing was starting an increase. Obviously, the pandemic has
Speaker 1: taken an earned for the better more recently, and you
Speaker 1: can see protocols beginning to be relaxed and restrictions lifted
Speaker 1: in many areas, which bodes well for traveling general in
Speaker 1: our business UH. And so you know, we see an
Speaker 1: opportunity to generate cash, accelerate repayment of debt over time UM,
Speaker 1: ultimately obviously creating sharehold of value. So recessions if recession comes,
Speaker 1: if there's additional UM global tensions, which you know, there's
Speaker 1: always something where in the world every year, something going on,
Speaker 1: natural disasters, all of that. Um, you know, we're uh
Speaker 1: an industry and where a business and a company you know,
Speaker 1: engineer to weather through storms and and eventually will be
Speaker 1: getting back to the kind of gas cash generation that
Speaker 1: we're known for. You know, when I wish I knew
Speaker 1: when I wish I had that crost the ball, Carol,
Speaker 1: come on, yeah, but I don't know exactly when. But um,
Speaker 1: you know, as we say in the last business update,
Speaker 1: we're expecting to be you know, pretty much at full
Speaker 1: operations and three if out before and as we say
Speaker 1: in the last business update, we will be giving an
Speaker 1: update here on another week or so and and and
Speaker 1: we'll well, we'll see where we are. But but you know,
Speaker 1: it's um uh we see a lot of fundamentals that
Speaker 1: are positive despite these other macel dynamics which are obviously
Speaker 1: less positive and currently reflected in the market. Are your
Speaker 1: pricing your pricing power? Is that one of the positives?
Speaker 1: Because I am curious about how you are dealing with
Speaker 1: the increasing bunker fuel costs. You know, are you able
Speaker 1: to raise prices to kind of offset offset some of
Speaker 1: the higher costs and again I talked about higher food costs,
Speaker 1: higher labor. Are you able to to raise ticket prices?
Speaker 1: You know, again we're a global business, and so we
Speaker 1: can't just hit a switch and automatically raise prices because
Speaker 1: fuel prices have gone up. If they're sustained increase in
Speaker 1: fuel prices as opposed to spikes and troughts. If there's
Speaker 1: the sustained high level of fuel pricing, obviously that Waltz
Speaker 1: may get reflected and and the cost to to the traveler.
Speaker 1: But right now we have you know, pent up demand,
Speaker 1: somewhat limited capacity because we're not operating yet. Uh, and
Speaker 1: those are good tail winds. Obviously, we do have the
Speaker 1: head winds of higher fuel prices, and still some restrictions
Speaker 1: in the number of the world in terms of my
Speaker 1: areas in the world, in terms of constraints on being
Speaker 1: able to sell at full occupancy, in terms of accessing
Speaker 1: complete pools of guests who would like to sail with us.
Speaker 1: So you know, we're managing through all that. The overall
Speaker 1: longer term picture, though, Carol is really you know, positive
Speaker 1: for the industry and certainly positive for one thing. I
Speaker 1: like talking about you and I said to you, Arnold,
Speaker 1: you've dealt with a lot of crises, certainly at the
Speaker 1: company and specific and you've seen a lot of different
Speaker 1: economic uh cycles, certainly as you said, as you were
Speaker 1: chairman or on the board at Carnival and then of
Speaker 1: course is running the company. So how is it where
Speaker 1: it's such an interesting time right now? Right dealing with
Speaker 1: higher inflation, is tight labor market, a FED that is
Speaker 1: increasingly going to be it seems more and more aggressive.
Speaker 1: It fields really uncomfortable and complicated. UM. How do you
Speaker 1: kind of make sense of it? And what can you say?
Speaker 1: Do you see any kind of easing in some of
Speaker 1: the supply chain pressures? Is there anything out there? You
Speaker 1: talk about consumer demand, do you have a lot of
Speaker 1: confidence that that keeps coming, you know, for a while,
Speaker 1: or do you start to see some weakness there? Now?
Speaker 1: We UM again as I mentioned, when not recession proved
Speaker 1: historically we've been recession resilient and UM right now, we
Speaker 1: certainly see pent up demand. People want to travel, you know,
Speaker 1: they want to UM share experiences. UH, you know, they
Speaker 1: really are looking for experiences. So those are the tail winds. UM.
Speaker 1: There's constraints around that UM today, But those constraints are
Speaker 1: becoming fewer and less in terms of UM just the
Speaker 1: ability to feel that they can travel with certainty, not
Speaker 1: be concerned if they leave the country that they can
Speaker 1: get back in, not being concerned when they get to
Speaker 1: the airport where they'll be able to board the plane
Speaker 1: or not whether the plane is actually going to go on.
Speaker 1: And so as those concerns evaporate when you start having
Speaker 1: the fly go to different countries, not sure what the
Speaker 1: rule is gonna be when you land, what are gonna
Speaker 1: be when you come back, you know obviously that impedes demand.
Speaker 1: So as those uncertainties to evaporate, that pent up latent
Speaker 1: demand for people to have experienced, for want to travel
Speaker 1: and experience UM. That's ultimately what drives our business and
Speaker 1: it's what we're really great at it, and we do
Speaker 1: it at a value that's UM much better than equivalent
Speaker 1: based vacation. Arnold. I'm wondering specifically when it comes to
Speaker 1: here because Caroline I last month we're at the Milican
Speaker 1: Institute Global Conference, and one thing that came up over
Speaker 1: and over again was concerned about Europe's economy. But you
Speaker 1: yourself said, you can't paint the entire region with a
Speaker 1: single brush. Talk to us about regional differences that you're
Speaker 1: seeing when it comes to economies right now. And if
Speaker 1: you're seeing pockets of strength, there's his pockets of weakness
Speaker 1: in some areas well, just through the lembs we look
Speaker 1: at from cruising. You know obviously, um, you know we're
Speaker 1: not going to Russia right now. You know, Saint Petersburg
Speaker 1: Um was a destination on a lot of itineraries, especially
Speaker 1: in the summertime. There were very high you and itineraries.
Speaker 1: It's a very popular destination, etcetera. You think what everyone
Speaker 1: do you think you'll ever go back? Ever is a
Speaker 1: long is a long time. So ever, I'm sure let
Speaker 1: me ask the question a different way. What would need
Speaker 1: to have to what would need to happen in order
Speaker 1: to get St. Petersburg back on your itinerary? Well, first
Speaker 1: of all, it used to be peace and um, you
Speaker 1: know that's first and foremost. Uh, and then um, from
Speaker 1: there we would have to see what you know, the
Speaker 1: restrictions are, the sanctions are, etcetera, if there are any
Speaker 1: and so on. But we believe in going to places
Speaker 1: where people want to go and where the locals want
Speaker 1: people to come. So we do believe in doing that
Speaker 1: and UM within of course our ultimate responsibilities and our
Speaker 1: top priority compliance and environmental protection and the health, safety
Speaker 1: and well being of everyone. So we're gonna be in
Speaker 1: compliance with local as well as international and and and
Speaker 1: our our home state and flag state, um, you know, regulations.
Speaker 1: So it'll it'll take that that's okay to go from
Speaker 1: a compliance a regulatory standpoint, UM, And it would take
Speaker 1: that it's safe for people to go and it serves
Speaker 1: the best interests of health for everyone involved. You CEEO
Speaker 1: for nine years on the board for much longer than that.
Speaker 1: What didn't you get to do that you wish you
Speaker 1: had That's a great question. There are always things that
Speaker 1: you wish you had had a chance to do. UM.
Speaker 1: One of the biggest things is that we are celebrating
Speaker 1: fifty year anniversary, fifty year birthday of a Carnival brand
Speaker 1: and our corporation, and the brand has done a very
Speaker 1: nice job of celebrating fifth years for the brand. But
Speaker 1: I really wanted to do uh kind of a blowout
Speaker 1: thank you celebration for fifty years for our corporation, and
Speaker 1: I didn't get to do that because it would have
Speaker 1: been an inappropriate and environment where we were in UM
Speaker 1: with the pandemic. And also, you know, given the fact
Speaker 1: that you know, we had paused for such a long
Speaker 1: time and and weren't generating you know, positive earnings, and
Speaker 1: so but I would have loved to have done a
Speaker 1: grand you know, celebration honoring the great legacy that UM
Speaker 1: Mickey Arison, Aarrison family, UM, all the people that have
Speaker 1: worked in this corporation, all of the partners who have
Speaker 1: supported it, the travel aged and professionals, the poorst destinations,
Speaker 1: the tour operators, all the people that depend on cruise
Speaker 1: to our livelihood. But but it have been you know,
Speaker 1: good partners for us. I would have loved have done that,
Speaker 1: and and unfortunately we kind of had to take a
Speaker 1: quieter approach on that. So I have to leave it
Speaker 1: for Josh for the seventy five celebration hopefuls to be
Speaker 1: around participate. So we've only got a had a minute
Speaker 1: left here, and you said, you know you're gonna be
Speaker 1: around for a while and make sure everything goes and
Speaker 1: you know, I know you wouldn't give me a time,
Speaker 1: but is there something after this, I mean, um, in
Speaker 1: terms of the corporate world or or something politics anything politics.
Speaker 1: I don't think so in politics, that's for sure. You know.
Speaker 1: I have a number of of partners, um, that I've
Speaker 1: worked with in the past, private equity and others, and
Speaker 1: and so I'll look at, you know, as a sitting CEO,
Speaker 1: I can only be on one corporate board other than
Speaker 1: my own, um and um, not as a sitting CEO.
Speaker 1: Maybe some additional board opportunities. But I'm also going to, um,
Speaker 1: you know, think about maybe becoming a news anchor, you know,
Speaker 1: but now kidding guys, wait, wait, there's there's the red
Speaker 1: headline across openings here. Okay, you can come, sorry, Tim,
Speaker 1: but I don't look at come and co anchor with
Speaker 1: me anytime? All right, maybe just once. UM. We look
Speaker 1: forward to future conversations wherever you go. You've always been
Speaker 1: gracious with us and finding time for us. We wish
Speaker 1: you well and I know we'll be talking again. Arnold,
Speaker 1: thank you so much. Be well, Errol, thank you. Some
Speaker 1: of you guys do a great job. Thank you very much.
Speaker 1: That's Arnold Donald presidency of Carnival Corporation. He will become
Speaker 1: vice chairman in August. And that wraps up our first
Speaker 1: hour of the weekend edition. Of Bloomberg Business Week from
Speaker 1: Bloomberg Radio. I'm Carol Masser and I'm Tim Stanivack. Ahead
Speaker 1: in our next hour, more on the Federal reserves fight
Speaker 1: to tamp down inflation and the potential consequences of its strategy.
Speaker 1: Plus we'll catch up with fashion entrepreneur Tory Birch on
Speaker 1: the state of her business and her philanthropic pursuits. This
Speaker 1: is Bloomberg. This is Bloomberg Business Week inside from the
Speaker 1: reporters and editors who bring you America's most trusted business magazine,
Speaker 1: plus global business, finance and tech news. As it happened,
Speaker 1: Sloomberg Business Week with Carol Messier and Bloomberg Quick Takes
Speaker 1: Tim Stenovic on Bloomberg Radio, and we got plenty ahead
Speaker 1: this hour of the weekend edition of Bloomberg Business Week,
Speaker 1: including a conversation with renowned fashion designer, entrepreneur and philanthropist
Speaker 1: Tory Burch. Plus how A, B and Bev's commitment to
Speaker 1: E s G extends all the way to your local bar.
Speaker 1: First up this hour, though more on the Fed's efforts
Speaker 1: to tame soaring prices. Were strongly committed to returning inflation
Speaker 1: to our two percent objective inflation has again surprised to
Speaker 1: the upside. Some indicators of inflation expectations have risen, and
Speaker 1: projections for inflation this year have been revised up notably.
Speaker 1: In response to these developments, the Committee decided that a
Speaker 1: larger increase in the target range was warranted at today's meeting. Clearly,
Speaker 1: today's seventy five basis point increase is an unusually large one,
Speaker 1: and I do not expect moves of this size to
Speaker 1: be common. Those words from Federal Reserve Chairman J Powell's
Speaker 1: press conference Wednesday after the Central Bank's biggest single rate
Speaker 1: hike in nearly three decades. It was a big, big meeting.
Speaker 1: We were all counting down to it. Now. In a
Speaker 1: story you'll find online at Bloomberg dot com, Slash Business
Speaker 1: Week also on the Bloomberg terminal, Bloomberg News, Senior Markets
Speaker 1: editor Ed Harrison explains why the Feds pushed to keep
Speaker 1: the US economy on stable ground could actually help usher
Speaker 1: in your recession. They haven't really tried historically to protect
Speaker 1: the main streiod, at least for the last forty years.
Speaker 1: What happened is that in the seventies, when we had
Speaker 1: our last inflation shot, there was a dreaded wage price
Speaker 1: spiral that people believe Paul Wilker was able to stamp out.
Speaker 1: And since then, they've sort of, you know, preemptively hyped
Speaker 1: rates at the end of every cycle, and so people
Speaker 1: who are just getting onto the employment ladder at the
Speaker 1: end of cycles were stopped out, you know, they were
Speaker 1: left behind. And then we had the Great Financial Crisis,
Speaker 1: which was a trauma for everyone, and we had to
Speaker 1: bailout for Wall Street. So there was a sense in
Speaker 1: which the FED actually wasn't working for or main Street.
Speaker 1: And they've changed that approach because to become more inclusive
Speaker 1: their staff and has become more inclusive. They've tried to
Speaker 1: lengthen business cycles on purpose in order to make it
Speaker 1: more inclusive. But unfortunately they ran into the buzz Stoll
Speaker 1: called inflation. Right, So, I mean, I love how your
Speaker 1: story reads, to be quite honest with you, you know
Speaker 1: that in terms of what happened during the financial crisis, right,
Speaker 1: I mean, Wall Street was protected for the most part,
Speaker 1: minus Lehman and a few other firms, um, but main
Speaker 1: Street felt it felt it so severely. Uh, it does
Speaker 1: feel you know a little bit different this time around.
Speaker 1: How do we need to kind of think about maybe
Speaker 1: the FED approach right now. And we just got a
Speaker 1: lot from J. Powell and company, you know, just a
Speaker 1: few hours ago. Yeah. I think his overriding message is
Speaker 1: that if we don't get inflation under control, it doesn't
Speaker 1: benefit anyone, especially those who are most disapin because not
Speaker 1: only is it hurting people in st up not being
Speaker 1: able to afford things, but it also means that the
Speaker 1: cycle can't be longer. You can't have a long business
Speaker 1: cycle that is more inclusive, that gets the participation rate up.
Speaker 1: So if he's to achieve what he needs to do,
Speaker 1: he needs to act now so that in the future
Speaker 1: this won't be a problem. So to what extent does
Speaker 1: the FET actually have the tools to do that? These
Speaker 1: are famously blunt instruments, And as we heard from Doug
Speaker 1: Cioca over at Covar Capital Partners, given the supply constraints
Speaker 1: that are leading to high inflation, we're helping contribute to
Speaker 1: high inflation when it comes to the supply chain, when
Speaker 1: it comes to high energy prices. What power does the
Speaker 1: the FED have to do this? Well, it was interesting
Speaker 1: to listen to J p talk about it. He was
Speaker 1: quite honest and sin that they don't have h all
Speaker 1: of the tools. You know. Obviously they can't work against
Speaker 1: the flash shop. They can't make more computer chips round
Speaker 1: clogged court, they can't pump more oil. Uh. The only
Speaker 1: thing they can do in this particular instance is get
Speaker 1: uh supply and demand and balanced by cramping demand. That's
Speaker 1: essentially what they're doing. And he's soft pedaling that policy
Speaker 1: by saying, look, we have the Jolts data which says
Speaker 1: that there are so many um jobs out there that
Speaker 1: we can just reduce the number of jobs that the
Speaker 1: supply of jobs then as opposed to the supply of labor,
Speaker 1: then we can get a nice balance there. I thought
Speaker 1: that was a very good turn of raise on his part.
Speaker 1: Is that something we can do though, because I mean, okay,
Speaker 1: from the perspective of of you know, interest rates and
Speaker 1: how I'm going to fill up my my tank right
Speaker 1: to what extent do higher interest rates lead me to
Speaker 1: not drive somewhere or lead me to not use energy
Speaker 1: in my home? Well, I think it's gonna be very difficult, because,
Speaker 1: you know, it sounds good at the aggregate level, when
Speaker 1: you break it down to where people actually need jobs
Speaker 1: and where companies need employees. Uh, you get you get
Speaker 1: a breakdown there. And I think that we're already seeing
Speaker 1: on two fronts a breakdown in terms of employment and
Speaker 1: in terms of business investments. If you looked at the
Speaker 1: business investment numbers that came out, uh, the d DP
Speaker 1: now figure went down to zero point zero percent, showing
Speaker 1: that they're looking for a contraction in business investment in
Speaker 1: Q two. And then jobless claims are are up forty
Speaker 1: five thousands on average over the last two months. Yeah,
Speaker 1: I think it's really significant. You know, I was thinking
Speaker 1: about that in terms of here's our supply chains, our
Speaker 1: problems right ed and you know, many ways the energy
Speaker 1: situation right refining, like we need to increase capacity, we
Speaker 1: need to make these investments, and yet companies aren't doing it.
Speaker 1: And this is where the FED can't necessarily help ease
Speaker 1: though supply chain constraints if companies aren't willing to kind
Speaker 1: of either amp up production. And so to me once
Speaker 1: again into reminder, inflation is going to stick around for
Speaker 1: a lot longer. And that's a lot of pain on
Speaker 1: Main Street. Just got about twenty five seconds. Yeah, and
Speaker 1: I think that that is a big problem. And you know,
Speaker 1: when you think about the oil patch, their scarred side,
Speaker 1: the shale boss, and I think that the investors want
Speaker 1: the money, so really the bed between a Rathna and Hardcoot.
Speaker 1: That was Bloomberg News Senior Markets editor Ed Harrison. You're
Speaker 1: listening to Bloomberg Business Week coming up. She built the
Speaker 1: fashion brand that bears her name. Tory Birch on the
Speaker 1: outlook for her empire and what she's doing to help
Speaker 1: other women achieve their own success. This is Bloomberg. This
Speaker 1: is Bloomberg Business Week with Carol Masser and Bloomberg Quick
Speaker 1: Takes Tim Stinovik from Bloomberg Radio. The Tory Birch Undation
Speaker 1: has provided more than one point two million dollars in
Speaker 1: grants to help women grow their businesses, and the Tory
Speaker 1: Birch Capital Program has distributed more than seventy five million
Speaker 1: dollars in loans to nearly forty women entrepreneurs. The Foundation
Speaker 1: hosted its third Embrace Ambition Summit this past week, and
Speaker 1: just ahead of the event, we had the chance to
Speaker 1: catch up with Tory Birch. She's, of course, founder, designer,
Speaker 1: and executive chairman of the company and brand that bears
Speaker 1: her name, also the president of the Tory Birch Foundation
Speaker 1: Lori Fabiano, and before we talked about the great things
Speaker 1: her philanthropic organization is doing, Tory brought us up to
Speaker 1: speed on the health of her enterprise. We talked retail.
Speaker 1: We had a record year last year, and then we
Speaker 1: see the first quarters it's a lot tougher and and
Speaker 1: but but that said, it's still very optimistic and we
Speaker 1: we don't see um. We obviously are very concerned about
Speaker 1: inflation and all that's coming to supply chain issues are
Speaker 1: extremely challenging, but we were taking one day at a
Speaker 1: time and and our business is still extremely strong. Tory,
Speaker 1: how have you managed supply the supply chain? I mean
Speaker 1: what changes have you had to make as a result
Speaker 1: of difficulty getting components as a difficulty in terms of shipping.
Speaker 1: Very luckily many years ago, about eight years ago, I
Speaker 1: really wanted to diversify with where we produce things, so
Speaker 1: we weren't dependent on one area, and I think that
Speaker 1: has helped us a great deal. Um, So we really
Speaker 1: really manufacture all over the world, and when one country
Speaker 1: is down, we're moving supply chain to the next. Well,
Speaker 1: and when you think about things like labor, are you
Speaker 1: getting all the workers you want, whether it's in stores
Speaker 1: and so on, UM or if you are, are you
Speaker 1: finding you have to pay up for it? Well, we are.
Speaker 1: We are not having trouble hiring people, are having the
Speaker 1: people we need right now. And you know, I think
Speaker 1: time will tell what the toll that inflation has in
Speaker 1: store for us. What do you mean by that you're
Speaker 1: not seeing go ahead? Well, we just don't. We We
Speaker 1: are not. We are not seeing the full impact that
Speaker 1: I think that's going to becoming our way. So we
Speaker 1: are preparing the best we can with the unknown, which
Speaker 1: we I think, do know that will get will get
Speaker 1: much worse. Well, how do you prepare, as you know,
Speaker 1: executive chairman of the company, how do you prepare for
Speaker 1: for what the unknown is? I mean the concept of
Speaker 1: less is more, less of everything and everything was more integrity,
Speaker 1: making sure that our teams are in great shape, really
Speaker 1: that they're they're doing doing well, but but focusing on
Speaker 1: on product and innovation. And I think that that's something
Speaker 1: that people are still are still shopping, They're still wanting
Speaker 1: to dream, and that's something UM that we hope will
Speaker 1: not change. I love what you said about less is more,
Speaker 1: and I do wonder I have a nineteen year old
Speaker 1: and she's very strategic and what she buys, she checks
Speaker 1: where things are made. She wants to understand the company
Speaker 1: and doesn't shop a lot, but what she buys is
Speaker 1: as a mother who pays for it last. Right. So, like,
Speaker 1: I think the consumer has changed, and what's exciting for
Speaker 1: us is a purpose driven company is resonating and super
Speaker 1: important for for the world. And and people that are
Speaker 1: buying products they want they want more to it than
Speaker 1: just a product. All right, can I ask you? And
Speaker 1: then we're going to move back to the summit. So, Tory,
Speaker 1: we've talked with you about going public. You've told us
Speaker 1: that you know that's never your fun isn't really completely
Speaker 1: off the table. I mean, I get the benefits of
Speaker 1: being a private company. I see it all the time,
Speaker 1: public versus private. But I'm just curious. Well, listen, I
Speaker 1: can never say never to anything. I don't think you can.
Speaker 1: But I think being private is a luxury, is something
Speaker 1: that I truly love, and I think that we um
Speaker 1: have no plans whatsoever to think in a different way.
Speaker 1: And I've got to say I've enjoyed the conversation story
Speaker 1: that we've had over the years when it comes to
Speaker 1: the work that you guys are doing with your Foundation
Speaker 1: for Women Entrepreneurs. I have to say your summit, I'm
Speaker 1: curious about the tone the conversations come off. The pandemic
Speaker 1: coming off of again questionable times when it comes to
Speaker 1: the economic outlook that tends to impact minorities and women
Speaker 1: much more severely. So tell us a little bit about
Speaker 1: what we can anticipate Tory next week. Yeah, I mean, listen,
Speaker 1: it's it's very good timing based on some of the
Speaker 1: things that we all have experienced the last two years.
Speaker 1: It's been a heartbreaking pandemic obviously, but women have been
Speaker 1: hit extra hard and two million women have left the
Speaker 1: job force alone, so you can imagine the impact that
Speaker 1: takes on women in general, but the economy. Laurie, what
Speaker 1: specifically are you doing at the foundation in order to
Speaker 1: help these women who have been affected? Um, well, we
Speaker 1: created one program particular, it's Grants for Women of Color Entrepreneurs,
Speaker 1: and we did that in partnership with the Fearless Fund
Speaker 1: and the Crew and also with some help from Goldman Sacks.
Speaker 1: And that is literally to provide grants very quickly to
Speaker 1: women of color business owners that are in danger of
Speaker 1: losing their businesses, and we want to see them sustain
Speaker 1: and thrive. But during the pandemic, we also really pivoted
Speaker 1: and became one of the primary resources for women trying
Speaker 1: to get p PP loans and for women in general
Speaker 1: trying to just get the information they needed to stay
Speaker 1: in business. We created a web series and for a
Speaker 1: while it was running literally every single week with with
Speaker 1: news and information that women entrepreneurs really need it. And
Speaker 1: tens of thousands of women have been on these on
Speaker 1: our web series. You know, Tory, one of the things
Speaker 1: I remembered from and it's years ago, and I think
Speaker 1: it's when you were starting your foundation and you're talking
Speaker 1: about you know, these grants for women and entrepreneurs, and
Speaker 1: you know you had this money to to allocate, and
Speaker 1: yet people weren't coming up, you know, coming up. Our
Speaker 1: are are applying for it. What has changed over the
Speaker 1: years when it comes to women annili there are sources
Speaker 1: out there and accessing um you know, financial help and assistance,
Speaker 1: whether it's starting a business. And I think about your summit,
Speaker 1: right it's now it's third year. The conversations around double
Speaker 1: standards and stereotypes. How is all of this evolving and
Speaker 1: and figures crossed getting better. Yeah. I mean, first of all,
Speaker 1: the summit we do every two years um and so
Speaker 1: it's going to be I think we the first one
Speaker 1: was in two thousand eighteen, so this will be our
Speaker 1: third summit um. But but I think, um, this the
Speaker 1: system and program wasn't right. Initially. We had to figure
Speaker 1: it out and we needed to sort of crack it
Speaker 1: and realized that women we needed to find the women
Speaker 1: at the right time in the cycle of their business
Speaker 1: and when they actually needed a loan. So once we
Speaker 1: did that, we saw the enormous need and just the
Speaker 1: program that Lorie just mentioned, I can't even tell you.
Speaker 1: I think there are thousands of applicants seventh salvand that
Speaker 1: the need is enormous. That's Tory Burch, the founder, designer,
Speaker 1: and executive chairman of Tory Burch, along with Lori Fabiano,
Speaker 1: president of the Tory Burch Foundation. Still to come on
Speaker 1: Bloomberg Business Week. How to state your case and make
Speaker 1: yourself heard in any situation. Tim and I we're gonna debate, Well,
Speaker 1: no we're not, No, we're not, but we are going
Speaker 1: to get some tips from a world class debate champion.
Speaker 1: On the other side. This is Bloomberg Broadcasting from the
Speaker 1: financial capital of the World, Bloomberg eleven Rio in New
Speaker 1: York to Washington, d C. Bloomberg to Boston, Bloomberg one
Speaker 1: oh six one does San Francisco, Bloomberg nine sixty to
Speaker 1: the country Sirius XM Chado one nineteen and around the
Speaker 1: globe of Bloomberg Business app and Bloomberg Radio dot Com.
Speaker 1: This is Bloomberg Business Week. This next guest man, does
Speaker 1: the world need his advice? He's a two time world
Speaker 1: champion debate or and a former coach of the Australian
Speaker 1: national debating team and the Harvard College Debating Union. Bo
Speaker 1: So is a journalist and author from Australia by way
Speaker 1: of South Korea. He overcame a significant language barrier to
Speaker 1: become one of the best in his field, and now
Speaker 1: he reveals some of the tricks of the trade in
Speaker 1: his new book Good Arguments. How Debate teaches us to
Speaker 1: listen and be heard. We're living at a time of
Speaker 1: really extraordinary polarization, and it's easy in times like that
Speaker 1: to see disagreement as the source of our troubles. And
Speaker 1: what I'm trying to suggest with this book is disagreements
Speaker 1: can be a force for good, not only because they're
Speaker 1: useful in terms of finding out truths and ensuring people
Speaker 1: are heard and and and we can be honest and
Speaker 1: frank and forthright with each other, but more importantly because
Speaker 1: good arguments, uh what good democracies are, They're good work
Speaker 1: They're what good workplaces are, what good families are, that we,
Speaker 1: despite our differences, resolved to live together and instead of
Speaker 1: ignoring our differences, to put them in conversation with one
Speaker 1: another with the hope that we might be able to
Speaker 1: get somewhere deeper, somewhere better, somewhere richer than we might
Speaker 1: be able to on our own. So my hope with
Speaker 1: this book is to restore people's confidence in what disagreements
Speaker 1: can do, and hopefully to give them a few skills
Speaker 1: that are going to allow them to handle them a
Speaker 1: little bit better too. I think that one thing that
Speaker 1: keeps people back from expressing disagreement in the workplace is
Speaker 1: perhaps the way that we interpret how other people are
Speaker 1: going to take that disagreement, the idea of people taking
Speaker 1: conflict personally. So, but what's a good way to you know,
Speaker 1: how should people express themselves in a way where they
Speaker 1: get to that better place by disagreeing with one another.
Speaker 1: I think that's a really important question. And debate is
Speaker 1: such a big part of the workplace now, isn't it,
Speaker 1: Because the nature of modern wide collar work is just
Speaker 1: we sit around in meetings and disagree all day um.
Speaker 1: And I think the book gives a few different pieces
Speaker 1: of advice for someone in that situation. I think the
Speaker 1: first is you want to be really clear what the
Speaker 1: disagreement is about. As soon as there's that kind of
Speaker 1: imprecision about what the conversation is about, it tends to
Speaker 1: become unruly, and it tends to bring in personality, it
Speaker 1: tends to bring in all the things that has happened
Speaker 1: in the past. So the first thing I would say
Speaker 1: is every disagreement starts with an act of agreement, and
Speaker 1: that's often about what the discussion is about. The next
Speaker 1: thing that I would add is you want to have
Speaker 1: the kind of rules that we started our conversation with,
Speaker 1: so in competitive debate, you know that everybody gets equal
Speaker 1: time in which to speak. They're not interrupted while they're speaking,
Speaker 1: and they're given turns, so that when I speak and
Speaker 1: I give you a chance to speak, there's no need
Speaker 1: for me to interrupt because I know I'm going to
Speaker 1: get a turned back. It's a big part of this too,
Speaker 1: is that there doesn't have to be a winner or
Speaker 1: loser absolute um. And you know, one of the things
Speaker 1: that you learn as a competitive debate or is wins
Speaker 1: and losses are temporary. You know, just the way it
Speaker 1: is in the workplace. You might take a w in
Speaker 1: this particular conversation or a loss in this particular conversation,
Speaker 1: but your coworkers aren't going anywhere right, and so they're
Speaker 1: going to be back the next day or the next week,
Speaker 1: the next month with a different issue. Where you're on
Speaker 1: going to be on different sides, sometimes allied, sometimes on
Speaker 1: opposing sides. So I think the real lesson, in addition
Speaker 1: to taking seriously the needs sometimes to prevail in arguments
Speaker 1: and to stick up for yourself and to carry your message,
Speaker 1: is to recognize what we all need is a set
Speaker 1: of rules, a set of practices that allows us to
Speaker 1: keep the conversation going in the long term and for
Speaker 1: the betterment of our organizations and for the betterment of ourselves.
Speaker 1: I have to you know, I think about presidential debate
Speaker 1: or political debates like do you do. You watch them
Speaker 1: and you say, well, this isn't a debate, this is
Speaker 1: just a show. No, seriously, right, Like people don't have
Speaker 1: a chance to kind of say things. There's constantly somebody
Speaker 1: jumping in, and that's not a debate, or is it?
Speaker 1: I think I think that's exactly right. I don't think
Speaker 1: they are debates. And something isn't a debate just because
Speaker 1: it's called a debate or because two people are standing
Speaker 1: at an awkward distance from each other at different podiums, right,
Speaker 1: And I think often what happens in those debates is
Speaker 1: one or more of the participants turns what would otherwise
Speaker 1: be a debate into a kind of a brawl. And
Speaker 1: it becomes really important in those moments to pause, as
Speaker 1: you said at the at the at the top of
Speaker 1: the program, to say, to identify what is happening, to
Speaker 1: name the kinds of tactics that are being used, whether
Speaker 1: it be name calling and something like that, and to
Speaker 1: say is it a debate that we're having or is
Speaker 1: it something else? Because without that kind of a check um,
Speaker 1: what begins as a debate can devolve into something worse.
Speaker 1: And we see that not only on the presidential stage,
Speaker 1: but We see that around the kitchen table and with
Speaker 1: our families and our loved ones, and we see it
Speaker 1: at workplaces all the time. That's journalist and author both
Speaker 1: so on his new book Good Arguments, How Debate teaches
Speaker 1: us to listen and be heard. It's out now. You're
Speaker 1: listening to Bloomberg Business Week, and if you missed any
Speaker 1: of it, or you want to hear the whole conversation,
Speaker 1: check out our podcast online coming up. A b in
Speaker 1: Bev's all in on E s G. And it's not
Speaker 1: just about tackling climate change. What the world's largest brewery
Speaker 1: is doing to keep you safe at the bar and
Speaker 1: on the road. This is Bloomberg. You're listening to Bloomberg
Speaker 1: Business Week with Carol Messer and Bloomberg Quick Takes Tim
Speaker 1: Stinovik from Bloomberg Radio and as her busch in Bev
Speaker 1: thinks a lot about E s G as it relies
Speaker 1: on natural resources in a big way. I mean, no water,
Speaker 1: no beer. It's as simple as that, and that easily
Speaker 1: makes the business case for the company, and it has
Speaker 1: set out a series of sustainability goals for twenty five
Speaker 1: as a result. It's not just sustainability though, part of
Speaker 1: its s G mission is smart drinking. For more on
Speaker 1: what that entails and how the world's largest brewer is
Speaker 1: thinking about our climate, supply chains and the health of
Speaker 1: its consumers, we turned to John Blood. He's the chief
Speaker 1: Legal and Corporate Affairs officer and company secretary at A
Speaker 1: B and BEV. And one of the great things about
Speaker 1: the beer category is it's an affordable luxury. You can
Speaker 1: go out this weekend, you can have a stellar artois right,
Speaker 1: you can go in, you can enjoy yourself. The price
Speaker 1: point is right there. We have a portfolio approach at
Speaker 1: all different price points, so it's really a great luxury
Speaker 1: that you can have in these types of times. I mean,
Speaker 1: one of the things that I'm so floored with talking
Speaker 1: to you and your senior um executive space is that
Speaker 1: you guys have to understand your supply chaine so well, right,
Speaker 1: because it just if things don't go well, uh, it
Speaker 1: just all breaks down. And you also understand the impact
Speaker 1: of climate change on that supply chain in big way,
Speaker 1: which is why your sustainability initiatives are really impressive and
Speaker 1: you've had them in place for a long time. Having
Speaker 1: said that, how would you describe your supply chains today. Yeah,
Speaker 1: for us. If you think about beer, right, for us,
Speaker 1: take the United States for an example of what we
Speaker 1: sell in the US is brewed here. We're talking US farmers.
Speaker 1: We're talking folks in the US making it, distributing it,
Speaker 1: brewing it, getting it there. So that's but that doesn't
Speaker 1: mean we're not immune to the world, right, And that
Speaker 1: doesn't mean that we also look out and say what
Speaker 1: can we do to plan, what can we do to
Speaker 1: get ahead of things? What tools do we have in
Speaker 1: our toolkit? And because we're a global business, we have
Speaker 1: a business in China, we have a business in South America,
Speaker 1: we have a business in Europe. Talking to those folks
Speaker 1: about what's on the ground is important for us as well.
Speaker 1: I want to hear about what you're hearing from the
Speaker 1: farmers on the ground here in the US, because it's
Speaker 1: been a tough run for farmers with fertilizer prices going up,
Speaker 1: with severe weather in many parts of the country shortening
Speaker 1: this season. What are you hearing from barley farmers, from
Speaker 1: hops farmers? Yeah, so for barley and hops there, this
Speaker 1: is something that we try to plan out as best
Speaker 1: as we can, and particularly when you take a look
Speaker 1: at something like organic. Right. One of the beers that
Speaker 1: we have is an organic brew right called organic Pure Gold,
Speaker 1: which is a Michael ultraproduct. And to get someone right
Speaker 1: to the farmer to come in and say, hey, we
Speaker 1: want you to plan organic barley, right, that's gonna take
Speaker 1: some time. Right, we have to work with them. We
Speaker 1: have to give them those long term contracts. And we
Speaker 1: really see ourselves in the industry and you need to
Speaker 1: look at yourself as part of the whole chain. So
Speaker 1: we feel for those farmers. We try to give them
Speaker 1: those contracts to give them the stability going forward to say,
Speaker 1: particularly the organic side, we're gonna work with you in
Speaker 1: the long term so you can transition to that. John,
Speaker 1: I feel like this is so into some of the
Speaker 1: conversations we're just talking with Peter Farcy uh, the CEO
Speaker 1: of sun Power, and just talking about you know, certainly
Speaker 1: when it comes to trade tensions between the U S
Speaker 1: and China that impacts certainly the solar industry. UM, but
Speaker 1: I also think about that, you know, what is the
Speaker 1: responsibility when it comes to our global supply chains. You
Speaker 1: guys have just taken the initiatives a lot on your
Speaker 1: own right to make sure you ensure the stability and
Speaker 1: purity of those supply chains. What is the government role,
Speaker 1: especially when it comes to things like and I know
Speaker 1: this isn't your wheelhouse, but whether it's semiconductors or water
Speaker 1: or what have you, because some of becomes like national
Speaker 1: security issues, And I do wonder is your responsibility. You know,
Speaker 1: I'm sure you're dealing with folks in Washington from time
Speaker 1: to tu, So I do wonder the conversations that are
Speaker 1: coming out or that need to be have, that we
Speaker 1: need to be having when it comes to our national
Speaker 1: supply chains, especially coming off of the pandemic. Yeah, well,
Speaker 1: I love this question because it really hits home that
Speaker 1: if you think, as a business executive, you're gonna solve
Speaker 1: any of this by yourself, and you're gonna sit in
Speaker 1: your room and you're gonna get a power point open,
Speaker 1: you're gonna plan something out, you're mistaken. You need to
Speaker 1: work with partnerships. You need to work with your stakeholders.
Speaker 1: And the first thing to understand is who are your stakeholders.
Speaker 1: So your stakeholders are national governments, your stakeholders are farmers,
Speaker 1: Your stakeholders are these consumers. But your stakeholders are the
Speaker 1: communities as well where you're looking for these supplies to
Speaker 1: come out of. So if in fact you're working with
Speaker 1: folks who farm in another country, what are you doing
Speaker 1: with them to make sure that they're planning? How can
Speaker 1: you give them something as simple as maybe financial literacy.
Speaker 1: We have a program where we work with a lot
Speaker 1: of our farmers to say we want to help you
Speaker 1: become better farmers. But more importantly, we're not going to
Speaker 1: teach you that you're going to learn from other farmers
Speaker 1: in other countries. You're gonna learn from other farmers down
Speaker 1: the street, and we'll put that together so you can
Speaker 1: understand when the weather changes about what's the best technique
Speaker 1: you can share that because at the end of the day,
Speaker 1: that community is something that can learn from each other,
Speaker 1: and we can be a vehicle to that one thing
Speaker 1: we wanted to get to because you are a company
Speaker 1: that has really laid out sustainability goals. We talk a
Speaker 1: lot about e s G getting a reckoning and people
Speaker 1: wanting transparency as part of e s G. Though you
Speaker 1: guys think about safe drinking, talk to us are smart drinking?
Speaker 1: Talk to us about that and how it fits in
Speaker 1: because right we're living in a world where there are
Speaker 1: multiple stakeholders and that includes our consumer. Yeah, thanks Karen.
Speaker 1: When I think about smart drinking, right, when I think
Speaker 1: about what we do with our product, right, I think
Speaker 1: about my family. Right, My kids ride their bikes on
Speaker 1: the street. Right. I want to make sure that we
Speaker 1: have the best programs for anti drunk driving. Right. I
Speaker 1: want to make sure that we have the best programs
Speaker 1: for people to remind them about smart drinking. Really, what
Speaker 1: we call social norms marketing. This is something where you're
Speaker 1: not just in the old days of like, hey, we're
Speaker 1: going to raise awareness, right, that's ten twenty years ago.
Speaker 1: This is evidence based programs that give people actionable advice.
Speaker 1: Now it's simple action, a little advice. It'll be things
Speaker 1: like hydrate between drinks, have a non alcohol beer with
Speaker 1: the beer, eat before and while you drink. Simple things
Speaker 1: like don't drink if you're pregnant, plan to have a
Speaker 1: ride home. Those are the social norms advertising that's away
Speaker 1: from drink responsibly. Drink responsibly. We do want people to
Speaker 1: drink responsibly, but we need more than that today. You
Speaker 1: need to be more action oriented. What prompted that change,
Speaker 1: because drink responsibly is something that I remember going back,
Speaker 1: you know, decades at this point when it comes to marketing.
Speaker 1: What changed this to actionable advice? What was that pivotal point?
Speaker 1: Two things to him. One is the science right when
Speaker 1: we work with academics, they tell us this actionable advice,
Speaker 1: this social norm advice can make a difference. And the
Speaker 1: second is about five years ago, right, we were looking
Speaker 1: at our programs and we said, we have all these
Speaker 1: smart drinking programs around the world, and we think they
Speaker 1: were We've been doing them for years. And then we
Speaker 1: asked ourselves, does anyone have any data if they work
Speaker 1: or not? Have we has anyone tested this? And how
Speaker 1: do you test it? And that's where the process started.
Speaker 1: We wanted to test it. We wanted to make it
Speaker 1: evidence based, and by the way, we share the evidence
Speaker 1: with all those who want to look. We have a
Speaker 1: foundation that does it. We work with the academics whoever
Speaker 1: wants to look and look at it. We test the
Speaker 1: programs and go with the ones that have the biggest
Speaker 1: and best impact. What's the biggest piece of advice, you
Speaker 1: know for our kids? The guy grew up in a
Speaker 1: family where older parents, I don't know, like different era,
Speaker 1: like there was alcohol in the house, and I had
Speaker 1: my first drink with my parents, you know, at a
Speaker 1: platively young age, for better for worse. But I and
Speaker 1: I and I am responsible about drinking today. But like,
Speaker 1: what is how do we approach this with kids? Yeah,
Speaker 1: and this is a fascinating question because if you take
Speaker 1: a look at the US and you take a look
Speaker 1: at the rest of the world, right, there are cultural norms. Right,
Speaker 1: there are laws as well. Of course, we tell kids
Speaker 1: do not drink. Right when the law says, whatever it is,
Speaker 1: that's the law, you need to enforce it. However, right
Speaker 1: when we deal with alcohol, right, when we deal with
Speaker 1: what we call these social norms, it's so important right
Speaker 1: that when we deal with it, we remember that alcohol
Speaker 1: is often part of the special and beer in particular
Speaker 1: is part of those meaningful moments in life when someone says,
Speaker 1: let's grab a beer. Right there in part talking about
Speaker 1: the beer, but they're talking about the social connection oftentime.
Speaker 1: When someone says let's grab a beer, they want to
Speaker 1: have a meaningful interaction with you, right, They want to
Speaker 1: have a real conversation, they want to be together, and
Speaker 1: sort of balancing that in the right way is what
Speaker 1: you really need. To talk to everyone about right. You
Speaker 1: need to talk to them about this is how you
Speaker 1: respect the product. This is how you enjoy the product
Speaker 1: by treating it the right way. And that's what smart
Speaker 1: drinking is all about, reminding people, say, nudging them right.
Speaker 1: Social norms also is about some people might think, oh,
Speaker 1: on Thursday night, my friends go out and they drink
Speaker 1: six or seven beers. You know what, when you look
Speaker 1: at the data, it's not the case, right there drinking
Speaker 1: one or two. When you remind people of that, you
Speaker 1: can then nudge and change the social norms so people
Speaker 1: behave differently. And that's what social norms is all about.
Speaker 1: What about when it comes to drunk driving right now?
Speaker 1: Because annh hazard Bush has decided to ride campaign has
Speaker 1: partnered with Uber, and I think back to just my
Speaker 1: own experience in my twenties and I lived in the
Speaker 1: mountains and there was no Uber, there was no lift.
Speaker 1: There was a huge problem where I lived when it
Speaker 1: came to drunk driving. Uh. There was this terrible joke
Speaker 1: that you know, to be a local and veil you
Speaker 1: needed to have a c L surgery and a d
Speaker 1: U I because then you really lived there. And I
Speaker 1: wonder how much Uber and lift and ridehiling has changed
Speaker 1: this because it is so easy to find a ride.
Speaker 1: You know, it is all about sort of embracing the moment. Right.
Speaker 1: When technology gives you something that allows you to nudge
Speaker 1: society towards a healthier pattern, towards a social norm that's positive,
Speaker 1: you need to embrace it. And that's why we're so
Speaker 1: happy with Uber and Mothersn' getting strunk driving right as
Speaker 1: part of that program of decide to ride right saying
Speaker 1: to folks, you know what, there is a solution, and
Speaker 1: it's very important to remember to him as well. When
Speaker 1: we talk about decide to ride, it's not just oh hey,
Speaker 1: you get a free ride home or you get a
Speaker 1: discount ride home. It's about the mindset of I'm gonna plan,
Speaker 1: I'm gonna plan to ride. And I love your generational
Speaker 1: approach here because if you talk to the twenty three
Speaker 1: year olds, right, it's almost instinctual now like, well, no,
Speaker 1: I'm gonna use uber the why would I take the rid?
Speaker 1: Why would I do this? And it's a different mindset
Speaker 1: because I'm a little older than you, Tim, but I
Speaker 1: remember that attitude even worse. And what social norms about
Speaker 1: is nudging is changing the way people behave in act
Speaker 1: and that mindset is super powerful and that's why you
Speaker 1: see drunk driving numbers over the last years coming down
Speaker 1: our thanks to John Blood, a bnbev's a chief legal
Speaker 1: in corporate affairs officer and company secretary. You can catch
Speaker 1: that full conversation on our podcast feed that wraps up
Speaker 1: the weekend edition of Bloomberg Business Week from Bloomberg Radio.
Speaker 1: Thanks so much for joining us. I'm Carol Masser and
Speaker 1: I'm Tim Stenebek. Be sure to tune into Bloomberg Business
Speaker 1: Week Monday through Friday. It starts at two bm Wall
Speaker 1: Street time on Bloomberg Radio. You can also watch our
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Speaker 1: your podcasts. Bloomberg Business Week is available on newstands now,
Speaker 1: at Bloomberg dot com and on the Bloomberg Terminal. You
Speaker 1: can also see me on Bloomberg Quick Take available at
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Speaker 1: Apple TV, Samsung TV, and more. Have a great weekend, everyone,
Speaker 1: stay safe and If you do drink, drink responsibly. This
Speaker 1: is Bloomberg