1 00:00:01,400 --> 00:00:04,120 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along 2 00:00:04,120 --> 00:00:06,240 Speaker 1: with my co host of Bonnie Quinn. Every business day 3 00:00:06,240 --> 00:00:10,400 Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts, 4 00:00:10,400 --> 00:00:13,600 Speaker 1: along with essential market moving news. Kind the Bloomberg Markets 5 00:00:13,600 --> 00:00:17,000 Speaker 1: Podcast on Apple Podcasts or wherever you listen to podcasts, 6 00:00:17,000 --> 00:00:20,759 Speaker 1: and on Bloomberg dot Com. We're gonna take a look 7 00:00:20,760 --> 00:00:23,919 Speaker 1: at the energy business, Vonnie. You know, we talked to 8 00:00:23,960 --> 00:00:27,479 Speaker 1: so many portfolio managers Vonnie about you know, is it 9 00:00:27,600 --> 00:00:31,080 Speaker 1: time to get into energy stocks? And I haven't found 10 00:00:31,080 --> 00:00:32,839 Speaker 1: too many that are brave enough to do so. But 11 00:00:32,880 --> 00:00:34,600 Speaker 1: maybe in the private equity business they view it a 12 00:00:34,680 --> 00:00:38,640 Speaker 1: little bit differently. Dan Eberhart, CEO of Canary LLLC, based 13 00:00:38,640 --> 00:00:42,160 Speaker 1: in Denver, Colorado. Dan, thanks so much for joining us here. 14 00:00:42,640 --> 00:00:44,559 Speaker 1: You know a lot of folks here, particularly in the 15 00:00:44,560 --> 00:00:48,080 Speaker 1: public equity markets and obviously in the credit markets, are 16 00:00:48,159 --> 00:00:52,320 Speaker 1: really down on energy, particularly uh, the oil field services 17 00:00:52,520 --> 00:00:55,440 Speaker 1: guys that are really filling the brunt of lower oil prices. 18 00:00:55,680 --> 00:00:59,440 Speaker 1: What's your view, Well, I think it really depends on 19 00:00:59,520 --> 00:01:02,280 Speaker 1: your time. If you're a short term investor and looking 20 00:01:02,280 --> 00:01:03,960 Speaker 1: to the end for weeks, I think you you know, 21 00:01:04,040 --> 00:01:06,760 Speaker 1: you've got to be very careful that the bloodbath continues, 22 00:01:06,800 --> 00:01:09,280 Speaker 1: and particularly with a lot of the smaller e m 23 00:01:09,360 --> 00:01:11,560 Speaker 1: p s and with the oil service companies, I think 24 00:01:11,560 --> 00:01:13,759 Speaker 1: you've got to be on bankruptcy watch and really just 25 00:01:14,319 --> 00:01:17,000 Speaker 1: invest in. If you're investing in the sector, invest in 26 00:01:17,040 --> 00:01:20,160 Speaker 1: things have liquidity first and foremost, uh, and then and 27 00:01:20,200 --> 00:01:22,320 Speaker 1: then look at how good they're operating businesses. But if 28 00:01:22,319 --> 00:01:25,039 Speaker 1: you're investing for the long term, I think that look this, 29 00:01:25,040 --> 00:01:28,760 Speaker 1: this downturn is the we're seeing the seeds planned for 30 00:01:28,840 --> 00:01:32,120 Speaker 1: the you know, for an eventual boom, and you know, 31 00:01:32,160 --> 00:01:34,320 Speaker 1: it's it's all about supplying demand. And as you know, 32 00:01:34,400 --> 00:01:38,800 Speaker 1: demand contracted. Everybody shut the doors, everybody stopped kind of 33 00:01:38,840 --> 00:01:42,440 Speaker 1: constructing air quotes for new oil. But what we're really 34 00:01:42,440 --> 00:01:45,959 Speaker 1: looking for here going forward is the supply demand picture 35 00:01:46,000 --> 00:01:48,440 Speaker 1: is going to completely change. So you know, production has 36 00:01:48,480 --> 00:01:51,840 Speaker 1: fallen from thirteen million barrels a day to nine point seven, 37 00:01:51,920 --> 00:01:55,360 Speaker 1: kind of rebounded to about eleven. But as uh, you know, 38 00:01:55,400 --> 00:01:59,160 Speaker 1: oil and gas deman comes back to where it was, 39 00:01:59,600 --> 00:02:01,440 Speaker 1: We're going to have a shortage of oil, a shortage 40 00:02:01,480 --> 00:02:03,720 Speaker 1: of natural gas, and you're really going to see an 41 00:02:03,760 --> 00:02:07,160 Speaker 1: inflection point. I think in Q four Q one sometime 42 00:02:07,200 --> 00:02:11,200 Speaker 1: when these shale wells, which traditionally are you know, twelve 43 00:02:11,200 --> 00:02:14,680 Speaker 1: month that's really run dry, and the industry is going 44 00:02:14,720 --> 00:02:17,120 Speaker 1: to need to drop oil and you're gonna see the 45 00:02:17,240 --> 00:02:20,200 Speaker 1: service sector and smaller MPs really you know, take take 46 00:02:20,280 --> 00:02:23,360 Speaker 1: up and take off and and shoot up on on 47 00:02:23,440 --> 00:02:28,320 Speaker 1: evaluation run how far can they go though, because there's 48 00:02:28,360 --> 00:02:30,519 Speaker 1: a limit to what people will be able to spend 49 00:02:30,520 --> 00:02:33,880 Speaker 1: on energy in this environment at any rate. Down right, 50 00:02:36,240 --> 00:02:38,359 Speaker 1: I think it is. But I also think a large 51 00:02:38,400 --> 00:02:41,120 Speaker 1: amount of the demand is fixed, and I think that 52 00:02:41,160 --> 00:02:43,840 Speaker 1: we've overcut supply. Look typically in a in a recession, 53 00:02:43,880 --> 00:02:47,880 Speaker 1: we see demand falls of one to three maximum. To 54 00:02:47,919 --> 00:02:51,440 Speaker 1: see the demand fall kind of freaked everyone out, and 55 00:02:51,480 --> 00:02:55,320 Speaker 1: the sector is gonna suffer from chronic under investment. And 56 00:02:55,400 --> 00:02:59,040 Speaker 1: that's really going to lead to you know, demand is 57 00:02:59,080 --> 00:03:01,480 Speaker 1: gonna rise a win or two percent and the supply 58 00:03:01,600 --> 00:03:03,080 Speaker 1: is going to fall at the same time, and that 59 00:03:03,400 --> 00:03:05,120 Speaker 1: that in that way, it's going to become a lot 60 00:03:05,160 --> 00:03:08,440 Speaker 1: of pricing power for the local service companies in particular, 61 00:03:08,520 --> 00:03:10,400 Speaker 1: and for some of the smaller EPs to make quite 62 00:03:10,440 --> 00:03:13,440 Speaker 1: a bit of money. Again, this is this is if 63 00:03:13,480 --> 00:03:15,440 Speaker 1: you've got a time frame of you know, nine months, 64 00:03:15,480 --> 00:03:18,000 Speaker 1: eighteen months. If you've got a time frame three weeks, 65 00:03:18,000 --> 00:03:20,120 Speaker 1: I think you need to battle liquidity. So what are 66 00:03:20,120 --> 00:03:22,640 Speaker 1: you doing right now? From a private equities perspective here, 67 00:03:22,680 --> 00:03:26,240 Speaker 1: because I guess from your perspective, evaluations are very attractive. 68 00:03:26,320 --> 00:03:28,880 Speaker 1: Right here is it's simply a case if you've got 69 00:03:28,880 --> 00:03:31,359 Speaker 1: capital and you're smart with your capital, you can make 70 00:03:31,400 --> 00:03:33,040 Speaker 1: some some big bets. Here. Is that work? How you 71 00:03:33,080 --> 00:03:36,800 Speaker 1: guys are approaching it? Yeah, we're we're nibbling. But I 72 00:03:36,800 --> 00:03:39,200 Speaker 1: think there's a huge valuation goals and people remember what 73 00:03:39,240 --> 00:03:42,160 Speaker 1: their businesses were in you know, valued that in February, 74 00:03:42,160 --> 00:03:43,800 Speaker 1: and people are wanting close to that. I think the 75 00:03:43,800 --> 00:03:47,240 Speaker 1: new reality is quite different. And again it really depends 76 00:03:47,240 --> 00:03:49,920 Speaker 1: on your time time frame. But the short term profits 77 00:03:49,920 --> 00:03:52,640 Speaker 1: are basically mil particularly in the local service sector, so 78 00:03:53,080 --> 00:03:54,680 Speaker 1: I think you you've really got to have a long 79 00:03:54,720 --> 00:03:56,680 Speaker 1: time rise and to put money on the space. Now, 80 00:03:57,040 --> 00:03:59,120 Speaker 1: what you're really seeing is kind of this Jamie Diamond 81 00:03:59,800 --> 00:04:03,600 Speaker 1: uh um uh. You know Totra's balance sheet type mentality 82 00:04:03,600 --> 00:04:06,680 Speaker 1: where you're seeing marathons seal it's gas stations to seven 83 00:04:06,720 --> 00:04:09,960 Speaker 1: eleven to buy liquidity and um, you're seeing Noble run 84 00:04:10,000 --> 00:04:12,440 Speaker 1: into the arms of Chevron. You've seen about eighteen I 85 00:04:12,440 --> 00:04:15,840 Speaker 1: think public EMP companies to clear bankruptcy. The sector has 86 00:04:15,880 --> 00:04:18,560 Speaker 1: moved from about eight percent of the SMP five two 87 00:04:18,600 --> 00:04:21,960 Speaker 1: point five. So really you're seeing a flight to quality 88 00:04:22,120 --> 00:04:24,880 Speaker 1: and a flight to the stronger getting stronger and the 89 00:04:24,920 --> 00:04:27,680 Speaker 1: weaker getting weaker. And that's that's really the tail to 90 00:04:27,760 --> 00:04:31,279 Speaker 1: tape and oil gas right now? Where would that have 91 00:04:31,440 --> 00:04:34,560 Speaker 1: you betting? Whether it be by stage, by company, by 92 00:04:34,600 --> 00:04:39,880 Speaker 1: oil patch, so you know, the costs are higher in 93 00:04:39,920 --> 00:04:42,039 Speaker 1: the baking and lower in the Permian if you're trying 94 00:04:42,040 --> 00:04:44,640 Speaker 1: to bet on the geography. But I think you're going 95 00:04:44,680 --> 00:04:49,400 Speaker 1: to see those with bigger balance sheets, so exs on Chevron, 96 00:04:49,520 --> 00:04:51,800 Speaker 1: people like this gets stronger, You're gonna see the medium 97 00:04:51,800 --> 00:04:54,240 Speaker 1: sized people get brought out, and then you're going to 98 00:04:54,320 --> 00:04:57,159 Speaker 1: see the people with over the leverage balance sheets like Apache, 99 00:04:57,560 --> 00:04:59,520 Speaker 1: you know fall by the wayside, or like you know, 100 00:04:59,600 --> 00:05:03,680 Speaker 1: White and UM Chesapeake Barty fouled bankruptcy. And then I 101 00:05:03,720 --> 00:05:06,400 Speaker 1: think I would I would really be short the oil 102 00:05:06,400 --> 00:05:12,719 Speaker 1: cold service sector, particularly names like Superior and UM Neighbors 103 00:05:12,760 --> 00:05:15,960 Speaker 1: that have impaired balance sheets. You're they're they're really under 104 00:05:15,960 --> 00:05:18,960 Speaker 1: a lot of stress right now. How about the concern 105 00:05:19,080 --> 00:05:23,520 Speaker 1: Dan that maybe twenty nineteen was peak oil um? Is 106 00:05:23,560 --> 00:05:27,960 Speaker 1: that a concern that you think that's valid? I do 107 00:05:28,080 --> 00:05:30,440 Speaker 1: think it's a concerns valid, although you know, history is 108 00:05:30,480 --> 00:05:33,760 Speaker 1: literally with people trying to call peak oil. UM. I 109 00:05:33,800 --> 00:05:35,960 Speaker 1: think we will be back to kind of this never 110 00:05:36,160 --> 00:05:39,480 Speaker 1: ending worldwide economic growth in the you know, one to 111 00:05:39,760 --> 00:05:41,599 Speaker 1: three range. I think we're gonna get back to a 112 00:05:41,640 --> 00:05:44,599 Speaker 1: half of that when this pandemic gets out. And I 113 00:05:44,640 --> 00:05:48,159 Speaker 1: think that you know, renewables get a way bigger market 114 00:05:48,200 --> 00:05:50,920 Speaker 1: share and depressed than what they're actually capable of, and 115 00:05:51,000 --> 00:05:53,920 Speaker 1: kind of the three five six year range in terms 116 00:05:53,960 --> 00:05:57,560 Speaker 1: of producer in terms of demand destruction for oil and gas, 117 00:05:57,960 --> 00:05:59,800 Speaker 1: and again, you know, natural gas is one of the 118 00:05:59,839 --> 00:06:02,280 Speaker 1: three main feed stocks for power plants. So I think 119 00:06:02,320 --> 00:06:03,680 Speaker 1: the industry has got a long way to go, and 120 00:06:03,720 --> 00:06:05,919 Speaker 1: I think we're gonna keep being consumers. And you know, 121 00:06:05,960 --> 00:06:08,480 Speaker 1: as people ahead in the emerging markets, as people hit 122 00:06:08,480 --> 00:06:11,480 Speaker 1: ten thousand dollars in GDP per capital, they want to 123 00:06:11,520 --> 00:06:13,320 Speaker 1: buy a car, and that's just the way it is. 124 00:06:13,360 --> 00:06:14,960 Speaker 1: And I think that those cars are going to be 125 00:06:15,320 --> 00:06:17,920 Speaker 1: internal combustion engines for quite a long time. To come. 126 00:06:17,960 --> 00:06:20,880 Speaker 1: So I think demand is going to be relatively and 127 00:06:20,960 --> 00:06:24,760 Speaker 1: elastic withinside a narrow band, and that augurs well for 128 00:06:25,920 --> 00:06:29,120 Speaker 1: oil and gas. Where I really would be short is offshore. 129 00:06:29,960 --> 00:06:32,359 Speaker 1: I think those are higher costs and longer term projects, 130 00:06:32,360 --> 00:06:36,880 Speaker 1: and you're going to see onshore, particularly US shale um 131 00:06:36,880 --> 00:06:39,400 Speaker 1: received more of the capital because it's short cycle capital 132 00:06:39,400 --> 00:06:41,560 Speaker 1: that can be turned on and all dependently commodic Brint. 133 00:06:41,680 --> 00:06:43,880 Speaker 1: Can I just say then that the name of your 134 00:06:44,480 --> 00:06:48,080 Speaker 1: private equity company, Canary, does send shivers down this line. 135 00:06:48,080 --> 00:06:51,359 Speaker 1: It does seem like it's a little bit of a 136 00:06:51,440 --> 00:06:54,440 Speaker 1: portentous name. Can I very briefly ask you what percentage 137 00:06:54,440 --> 00:06:57,440 Speaker 1: of portfolio companies for private equity in this space will 138 00:06:57,440 --> 00:07:02,279 Speaker 1: go to zero? Um, I think you're going to see 139 00:07:02,320 --> 00:07:04,920 Speaker 1: an awful lot of private equity companies take a blood math, 140 00:07:04,960 --> 00:07:07,520 Speaker 1: particularly once and have shorter time horizons. So those with 141 00:07:07,680 --> 00:07:10,560 Speaker 1: eighteen twenty four month time horizons are going to be 142 00:07:10,720 --> 00:07:14,320 Speaker 1: really stressed to get out and be main whole or 143 00:07:14,680 --> 00:07:19,160 Speaker 1: make some money on their portfolio. Well, we will follow 144 00:07:19,160 --> 00:07:21,600 Speaker 1: the story, no doubt it will unfold of the next 145 00:07:21,600 --> 00:07:23,840 Speaker 1: few months. We were already talking earlier about a nearly 146 00:07:23,840 --> 00:07:26,640 Speaker 1: a hundred thousand job losses in this space already and 147 00:07:26,800 --> 00:07:30,280 Speaker 1: their permanent pretty much job losses done. Abraheart, CEO of 148 00:07:30,400 --> 00:07:34,800 Speaker 1: Canary based in Denver, private equity investor and UH Canary 149 00:07:34,840 --> 00:07:38,080 Speaker 1: of course oil field services firm, thank you so much 150 00:07:38,120 --> 00:07:42,200 Speaker 1: for joining us. It is ten forty eight on the 151 00:07:42,240 --> 00:07:44,720 Speaker 1: Wall Street. Time for Bloomberg Opinion. We are pleased to 152 00:07:44,720 --> 00:07:48,040 Speaker 1: be welcome by daniel D. Martino, Booth, CEO and Director 153 00:07:48,080 --> 00:07:52,240 Speaker 1: of Intelligence at Quill Intelligence, former advisor at the Dallas 154 00:07:52,320 --> 00:07:55,840 Speaker 1: Federal Reserve. Any Bloomberg Opinion columnists, Danielle, thanks so much 155 00:07:55,880 --> 00:07:58,200 Speaker 1: for joining us here. You have a fascinating column out 156 00:07:58,280 --> 00:08:01,360 Speaker 1: on the travel business, and I guess no industry has 157 00:08:01,360 --> 00:08:04,520 Speaker 1: been hit harder than the broad travel business by this pandemic. 158 00:08:04,560 --> 00:08:06,720 Speaker 1: But your thoughts are this thing is not going to 159 00:08:06,800 --> 00:08:11,480 Speaker 1: come back very quickly. What are your key points there? Well, 160 00:08:11,520 --> 00:08:14,440 Speaker 1: I think it has to do with two things demographics 161 00:08:14,480 --> 00:08:19,240 Speaker 1: and businesses right sizing their cost structures. Um, if you 162 00:08:19,280 --> 00:08:22,360 Speaker 1: think about older Americans fifty five plus, we account it 163 00:08:22,440 --> 00:08:25,920 Speaker 1: for eighty percent of luxury travel last year. UH, that's 164 00:08:25,960 --> 00:08:31,040 Speaker 1: been a growing trend. And separately, the business traveler accounted 165 00:08:31,120 --> 00:08:35,440 Speaker 1: for here in North America of the spend, if you will, 166 00:08:36,120 --> 00:08:38,800 Speaker 1: even though they were they were only twenty percent, but 167 00:08:38,880 --> 00:08:42,640 Speaker 1: the actual travelers, so your business travel traveler always was 168 00:08:42,679 --> 00:08:45,760 Speaker 1: the one in business class, in in on the airlines, 169 00:08:45,880 --> 00:08:48,959 Speaker 1: and they occupied nicer hotels for longer periods of time 170 00:08:49,280 --> 00:08:51,640 Speaker 1: because it was of course on on the company's dine. 171 00:08:52,080 --> 00:08:54,800 Speaker 1: A lot of a lot of CEOs I speak with today, 172 00:08:54,840 --> 00:08:57,240 Speaker 1: a lot of people learning large staffs are saying that 173 00:08:57,400 --> 00:08:59,920 Speaker 1: they don't know when they're traveling. Expense budgets are going 174 00:09:00,000 --> 00:09:03,439 Speaker 1: going to return because they've learned how to meet and 175 00:09:03,480 --> 00:09:08,680 Speaker 1: can be differently. Just from from a personal standpoint, I've 176 00:09:08,679 --> 00:09:12,920 Speaker 1: had speaking engagements at a dozen UH conferences canceled since 177 00:09:12,960 --> 00:09:15,400 Speaker 1: this whole thing started, And the trend does not seem 178 00:09:15,440 --> 00:09:18,520 Speaker 1: to be dissipating, because the virus, of course, continues to 179 00:09:18,559 --> 00:09:23,480 Speaker 1: ping pong all over the country and the world. Danielle. Yes, 180 00:09:23,559 --> 00:09:25,720 Speaker 1: everyone's got a little bit more used to zoom and 181 00:09:25,760 --> 00:09:28,640 Speaker 1: so on. But at some point, you know, assuming that 182 00:09:28,679 --> 00:09:31,160 Speaker 1: there is a vaccine or some kind of treatment for this, 183 00:09:32,400 --> 00:09:35,000 Speaker 1: won't people want to congregate again, and won't people to 184 00:09:35,040 --> 00:09:40,520 Speaker 1: want to go on business trips? Of course? Of course, 185 00:09:40,520 --> 00:09:42,280 Speaker 1: of course this is going to come back to a 186 00:09:42,320 --> 00:09:45,680 Speaker 1: certain extent. One of the things one of the points 187 00:09:45,679 --> 00:09:47,440 Speaker 1: that I tried to make in the column was that 188 00:09:47,520 --> 00:09:51,200 Speaker 1: over the past decade or so, unfortunately fis deep per 189 00:09:51,240 --> 00:09:55,280 Speaker 1: cent of the commercial mortgage backed securities that are tied 190 00:09:55,320 --> 00:09:59,440 Speaker 1: to lodging loans hotel loans for in the full service sector. 191 00:09:59,720 --> 00:10:02,360 Speaker 1: Mike concern is that there is so much over supply 192 00:10:02,480 --> 00:10:05,040 Speaker 1: and so much over capacity that that is why we're 193 00:10:05,080 --> 00:10:08,839 Speaker 1: seeing lodging default rapes for those loans higher even than 194 00:10:08,880 --> 00:10:11,920 Speaker 1: what we're seeing in the retail sector. It's because of 195 00:10:11,920 --> 00:10:16,040 Speaker 1: the of the concentration of luxury that I'm not sure 196 00:10:16,080 --> 00:10:18,600 Speaker 1: can be people filled for some time to come. Of course, 197 00:10:18,960 --> 00:10:22,200 Speaker 1: the desire and the wherewithal is there. And I just 198 00:10:22,240 --> 00:10:25,559 Speaker 1: came back from a week long script myself. The highways 199 00:10:25,559 --> 00:10:27,600 Speaker 1: are full of people. It's just a matter of whether 200 00:10:27,679 --> 00:10:31,240 Speaker 1: or not the guys are going to recover quickly. Well, Danielle, 201 00:10:31,240 --> 00:10:32,920 Speaker 1: this also has when we think about the you know, 202 00:10:32,960 --> 00:10:36,559 Speaker 1: the global leisure business, this is a big uh employment 203 00:10:36,640 --> 00:10:39,520 Speaker 1: sector as well as we think about the consumer economy here, 204 00:10:39,520 --> 00:10:42,360 Speaker 1: how do you factor that into kind of your calculations 205 00:10:42,440 --> 00:10:45,560 Speaker 1: for job growth or unemployment? And as we kind of 206 00:10:45,600 --> 00:10:48,760 Speaker 1: try to dig out on the other side of this well, 207 00:10:48,800 --> 00:10:50,640 Speaker 1: and I think that's one of the least understood things 208 00:10:50,679 --> 00:10:53,079 Speaker 1: that I learned the most researching this column is that 209 00:10:53,440 --> 00:10:57,679 Speaker 1: thirty million people worldwide we're employed by traveling tourism. At 210 00:10:57,679 --> 00:11:00,800 Speaker 1: the end of twenty nineteen, one intend job again all 211 00:11:00,840 --> 00:11:03,839 Speaker 1: around the globe, and in the last five years the 212 00:11:04,040 --> 00:11:08,240 Speaker 1: sector was responsible for one in five jobs created. So 213 00:11:08,440 --> 00:11:12,400 Speaker 1: the more protracted, uh, the weight is in terms of 214 00:11:12,400 --> 00:11:15,160 Speaker 1: getting to a vaccine where there's full confidence for everybody 215 00:11:15,160 --> 00:11:18,080 Speaker 1: to travel the world, the longer the permanent damage is 216 00:11:18,120 --> 00:11:21,240 Speaker 1: that we're going to be seeing in that travel tourism sector. 217 00:11:21,360 --> 00:11:25,120 Speaker 1: There's a good chart in the Bloomberg the Bloomberg column 218 00:11:25,120 --> 00:11:27,679 Speaker 1: this up on the terminal that kind of exemplifies that 219 00:11:27,960 --> 00:11:30,520 Speaker 1: permanent employment and traveling tourism here in the United States 220 00:11:30,679 --> 00:11:35,920 Speaker 1: is getting hit harder than it is in other sectors. Danielle, 221 00:11:36,040 --> 00:11:38,120 Speaker 1: is there anything that can be done to mitigate I mean, 222 00:11:38,120 --> 00:11:40,760 Speaker 1: there was talk of bailouts and so on, and particular 223 00:11:40,760 --> 00:11:43,200 Speaker 1: sector is getting more helps than others. I guess that's 224 00:11:43,200 --> 00:11:45,120 Speaker 1: sort of gone by the wayside now with PPP and 225 00:11:45,160 --> 00:11:49,720 Speaker 1: so on. It has and you know, if the Federal 226 00:11:49,800 --> 00:11:52,040 Speaker 1: Reserve was to be prompted to step in, they would 227 00:11:52,160 --> 00:11:55,120 Speaker 1: they were going into similar challenges as what they had 228 00:11:55,120 --> 00:11:57,000 Speaker 1: when they were asked to step in, specifically for the 229 00:11:57,080 --> 00:12:01,000 Speaker 1: energy industry. And that's that DODGS frank includes their ability 230 00:12:01,040 --> 00:12:05,160 Speaker 1: to address individual industries. And as we know from major announcements, 231 00:12:05,160 --> 00:12:07,720 Speaker 1: whether it the American airlines are united, the layoffs are 232 00:12:07,800 --> 00:12:11,080 Speaker 1: very much in place come September. Uh And as far 233 00:12:11,080 --> 00:12:13,080 Speaker 1: as ourselves go, just this morning on the wires, we've 234 00:12:13,080 --> 00:12:15,400 Speaker 1: got Marriott that had a big miss to its earnings, 235 00:12:15,440 --> 00:12:18,640 Speaker 1: its top and bottom line. So again, I'm not sure 236 00:12:18,640 --> 00:12:21,319 Speaker 1: how much can be addressed. Some of these are massive, 237 00:12:21,760 --> 00:12:26,199 Speaker 1: massive companies that employ thousands upon thousands of people. I'm 238 00:12:26,240 --> 00:12:29,240 Speaker 1: not sure what what what fiscal stimulus or monetary stimulus 239 00:12:29,320 --> 00:12:32,000 Speaker 1: can do at this juncture. So, Danielle, as you think 240 00:12:32,040 --> 00:12:34,000 Speaker 1: about just a broader economy, how important is it to 241 00:12:34,080 --> 00:12:36,800 Speaker 1: get some fiscal stimulus out of Washington at this point 242 00:12:36,840 --> 00:12:39,079 Speaker 1: it seems to be uh, not as clear cut as 243 00:12:39,120 --> 00:12:42,680 Speaker 1: as the last round. Well, you know, it's interesting you 244 00:12:42,720 --> 00:12:45,360 Speaker 1: ask it, certainly isn't Let's say that there's four hundred 245 00:12:45,559 --> 00:12:48,880 Speaker 1: dollars and it arrived yesterday. It seems that there's obviously 246 00:12:48,920 --> 00:12:51,839 Speaker 1: going to be very red tape delays, et cetera. You 247 00:12:51,880 --> 00:12:55,280 Speaker 1: would still see, according to the Moody's Analytics recent study, 248 00:12:55,320 --> 00:12:56,959 Speaker 1: you would still see an increase of six centered and 249 00:12:57,040 --> 00:12:59,800 Speaker 1: sixty thousand in permanently employed. You would still see g 250 00:13:00,120 --> 00:13:02,679 Speaker 1: peak take a hit at point eight three just from 251 00:13:02,720 --> 00:13:05,280 Speaker 1: having that six hundred a week go to four hundred 252 00:13:05,320 --> 00:13:08,640 Speaker 1: a week again, because we do have this growth in 253 00:13:08,720 --> 00:13:12,840 Speaker 1: permanent employment. In Friday's jobs report, we saw that out 254 00:13:12,840 --> 00:13:15,240 Speaker 1: of work want people who want to be working but 255 00:13:15,280 --> 00:13:17,079 Speaker 1: it's been out of work for fifteen weeks or more, 256 00:13:17,559 --> 00:13:20,600 Speaker 1: grew from eighteen point seven percent in June to forty 257 00:13:20,679 --> 00:13:24,080 Speaker 1: eight point eight percent in July. So it looks like 258 00:13:24,080 --> 00:13:26,720 Speaker 1: there's more sclerosis out there in the labor force, and 259 00:13:26,720 --> 00:13:29,400 Speaker 1: that stimulus dollars need to get out there as soon 260 00:13:29,440 --> 00:13:32,280 Speaker 1: as possible. Yeah, I mean, there's another fascinating story on 261 00:13:32,280 --> 00:13:35,240 Speaker 1: the Roomberg today about them all of America and Bourbon 262 00:13:35,280 --> 00:13:38,280 Speaker 1: Street and all of these places that are just you know, 263 00:13:38,880 --> 00:13:43,319 Speaker 1: at levels of maybe fifteen percent of what they were 264 00:13:43,320 --> 00:13:47,160 Speaker 1: a year ago. However, golf courses are humming again, and 265 00:13:47,240 --> 00:13:50,920 Speaker 1: so are the nation's nonprofit food banks. So there's really 266 00:13:51,000 --> 00:13:54,120 Speaker 1: a huge gap in this economy right now, more than 267 00:13:54,160 --> 00:13:58,760 Speaker 1: we've ever seen possibly before. Danielle Right, it is the 268 00:13:59,080 --> 00:14:01,960 Speaker 1: inequality divid you just give me goose stumps, Bohnny. It's 269 00:14:02,000 --> 00:14:05,360 Speaker 1: the inequality divide that has been laid bare by this 270 00:14:05,679 --> 00:14:09,160 Speaker 1: crisis is just enormous. I mean, obviously, the well heard 271 00:14:09,200 --> 00:14:10,960 Speaker 1: going where the wealth it can go. They can easily 272 00:14:11,000 --> 00:14:13,200 Speaker 1: socially distance on a golf course, and that's an easy 273 00:14:13,280 --> 00:14:15,760 Speaker 1: enough thing to do. Um And you hear about certain 274 00:14:15,840 --> 00:14:18,120 Speaker 1: kinds of super luxury travel that are doing well. But 275 00:14:18,160 --> 00:14:20,600 Speaker 1: if you think about a restaurant's business model, restaurants tend 276 00:14:20,640 --> 00:14:22,320 Speaker 1: to have maybe a week to two weeks of cash 277 00:14:22,400 --> 00:14:24,640 Speaker 1: law on hand, and their business models are in the 278 00:14:24,640 --> 00:14:27,040 Speaker 1: French quarter for example. That was a great story that 279 00:14:27,360 --> 00:14:30,280 Speaker 1: was on the Bloomberg. Their their business models are predicated 280 00:14:30,320 --> 00:14:34,520 Speaker 1: on having a line around the door, not having fifteen capacity. 281 00:14:34,920 --> 00:14:37,080 Speaker 1: They could only hold on for so long, which is 282 00:14:37,080 --> 00:14:38,600 Speaker 1: why I think we're seeing a lot of the survey 283 00:14:38,680 --> 00:14:41,520 Speaker 1: data from Yelp and other providers show that they're expecting 284 00:14:41,520 --> 00:14:45,080 Speaker 1: permanent closures in the restaurant industry, which is another huge employer. 285 00:14:45,400 --> 00:14:48,120 Speaker 1: These are all such difficult, difficult things to read and 286 00:14:48,160 --> 00:14:50,760 Speaker 1: hear about all right, Danielle, It's always wonderful to speak 287 00:14:50,760 --> 00:14:53,680 Speaker 1: with you. That is Danielle new Martineau Booths, of course 288 00:14:53,720 --> 00:15:01,000 Speaker 1: of Quill Intelligence, former Dallas advisor. Just repeat warding about 289 00:15:01,040 --> 00:15:03,320 Speaker 1: Eastman Kodak. I pulled up the twelve months of trailing 290 00:15:03,440 --> 00:15:05,560 Speaker 1: chart for the stock and it's in order to past 291 00:15:05,600 --> 00:15:08,840 Speaker 1: twelve months, is traded between two three, maybe four dollars, 292 00:15:08,880 --> 00:15:10,800 Speaker 1: and then just in the past a couple of weeks 293 00:15:10,800 --> 00:15:14,280 Speaker 1: it shot up to about thirty four dollars per share. Uh, 294 00:15:14,360 --> 00:15:17,800 Speaker 1: it's now down to ten point ten dollars and thirty 295 00:15:17,800 --> 00:15:21,080 Speaker 1: eight cents per share. Just extraordinary volatility in the last 296 00:15:21,120 --> 00:15:23,000 Speaker 1: couple of weeks. It's got a sense of what is 297 00:15:23,040 --> 00:15:24,960 Speaker 1: going on there. We can do that with Eric newcomer 298 00:15:25,200 --> 00:15:29,240 Speaker 1: Bloomberg Tech politics reporters. So Eric just set the stage 299 00:15:29,240 --> 00:15:33,120 Speaker 1: force what caused the surge in this stock and then 300 00:15:34,080 --> 00:15:36,600 Speaker 1: following up on that what calls it's big plunge here. 301 00:15:37,760 --> 00:15:40,840 Speaker 1: You know, the Trump administration sort of came out of 302 00:15:40,840 --> 00:15:44,360 Speaker 1: nowhere and said we're going to give Kodak a seven 303 00:15:44,600 --> 00:15:49,200 Speaker 1: sixty five million dollar alone to transition this sort of 304 00:15:49,280 --> 00:15:55,080 Speaker 1: camera printer company into a pharmaceutical manufacturing company. And so 305 00:15:55,880 --> 00:16:00,280 Speaker 1: you know, we had Trump, we had Governor Cuomo, and work, 306 00:16:00,320 --> 00:16:02,680 Speaker 1: we have Peter Navarro all coming out and saying, Okay, 307 00:16:02,680 --> 00:16:04,920 Speaker 1: there's gonna be a big thing. And so then the 308 00:16:05,000 --> 00:16:08,200 Speaker 1: stock takes off, you know, with the idea, oh, maybe 309 00:16:08,200 --> 00:16:10,440 Speaker 1: there's this future for Kodak. We see a ton of 310 00:16:10,440 --> 00:16:13,640 Speaker 1: excitement from the Wall Street that's type crowd, you know, 311 00:16:13,680 --> 00:16:15,960 Speaker 1: it's just sort of a hot stock. And then all 312 00:16:16,000 --> 00:16:19,440 Speaker 1: of a sudden there were questions about you know, share 313 00:16:19,480 --> 00:16:24,560 Speaker 1: purchases from insiders, and then we got uh investigations out 314 00:16:24,560 --> 00:16:27,520 Speaker 1: of Congress and the SEC. And now we have the 315 00:16:27,640 --> 00:16:31,400 Speaker 1: agency that granted the loan saying actually, we're gonna put 316 00:16:31,440 --> 00:16:33,640 Speaker 1: everything on hold until we get to the bottom. You know, 317 00:16:33,720 --> 00:16:36,480 Speaker 1: everyone gets to the bottom of what want on here. 318 00:16:36,600 --> 00:16:39,400 Speaker 1: So then the thing that pumped the stock up is 319 00:16:39,440 --> 00:16:43,800 Speaker 1: now sort of not not looking to happen. So are 320 00:16:43,840 --> 00:16:47,480 Speaker 1: there any actual workers at Kodak, you know, even if 321 00:16:47,480 --> 00:16:50,280 Speaker 1: they're working remotely or from home at the moment, And 322 00:16:50,280 --> 00:16:53,680 Speaker 1: if so, what are they doing? I Mean, Kodak has 323 00:16:53,760 --> 00:16:57,920 Speaker 1: said that one to three percent of what they do 324 00:16:58,280 --> 00:17:02,280 Speaker 1: their revenue right now comes from this pharmaceutical names. Actually, 325 00:17:02,480 --> 00:17:06,200 Speaker 1: I mean that's from them, and i it's hard to say, 326 00:17:06,359 --> 00:17:10,760 Speaker 1: you know, with coronavirus, especially sort of where that is. So, 327 00:17:10,960 --> 00:17:14,120 Speaker 1: you know, I think it's a good question. Sort of 328 00:17:15,000 --> 00:17:17,040 Speaker 1: we don't know a lot about sort of their capacity 329 00:17:17,080 --> 00:17:20,000 Speaker 1: to produce these materials and sort of where they are 330 00:17:20,080 --> 00:17:22,359 Speaker 1: to stay. But but that's sort of the stubt we 331 00:17:22,400 --> 00:17:25,720 Speaker 1: have in terms of, you know, the share of revenue. 332 00:17:26,160 --> 00:17:28,359 Speaker 1: So what do we know? Like Eric, how did this 333 00:17:28,400 --> 00:17:30,719 Speaker 1: thing all come about? It was a shock to everybody 334 00:17:31,040 --> 00:17:33,160 Speaker 1: here got a company. I mean, if you're gonna give 335 00:17:33,240 --> 00:17:36,640 Speaker 1: a loan to a company to you know, create a 336 00:17:36,760 --> 00:17:41,400 Speaker 1: vaccine or ppe, presumably the company is in that business already. 337 00:17:41,520 --> 00:17:43,520 Speaker 1: So this seemed like a complete shock when had happened. 338 00:17:43,520 --> 00:17:46,439 Speaker 1: Do we know where this idea emanated from? Who was 339 00:17:46,480 --> 00:17:50,600 Speaker 1: pushing for it? Yeah? So, I mean it really came 340 00:17:50,640 --> 00:17:55,680 Speaker 1: out of Peter Navarro's office, you know, in trade Um, 341 00:17:55,800 --> 00:18:00,119 Speaker 1: and so he brought it to the International develop the 342 00:18:00,320 --> 00:18:03,080 Speaker 1: Finance Corporation, which is a sort of new body that's 343 00:18:03,119 --> 00:18:08,320 Speaker 1: mostly focused or pretty much exclusively focused on international development loans. 344 00:18:08,680 --> 00:18:11,959 Speaker 1: But then as part of the Defense Production Act, was 345 00:18:12,000 --> 00:18:14,359 Speaker 1: granted the ability to do some domestic loans to build 346 00:18:14,440 --> 00:18:18,520 Speaker 1: up the pharmaceutical supply chain. So I mean, I think 347 00:18:18,520 --> 00:18:22,199 Speaker 1: in the Trump administration's defense here, it was always going 348 00:18:22,280 --> 00:18:24,960 Speaker 1: to be sort of a weird thing because the idea 349 00:18:25,000 --> 00:18:26,560 Speaker 1: is to get the United States to do something it 350 00:18:26,560 --> 00:18:28,879 Speaker 1: hasn't done. You know, it's how can we find a 351 00:18:28,880 --> 00:18:32,520 Speaker 1: company that could perhaps get better pharmaceutical manufacturing so the 352 00:18:32,600 --> 00:18:34,880 Speaker 1: US could have a better position. And then you look 353 00:18:34,880 --> 00:18:37,480 Speaker 1: at Kodak, and it's just company with a great history, 354 00:18:37,480 --> 00:18:40,320 Speaker 1: it works in chemicals, and to maybe sort of act 355 00:18:40,359 --> 00:18:42,399 Speaker 1: and pivot that was that was sort of the idea. 356 00:18:42,560 --> 00:18:44,960 Speaker 1: But but certainly there are a lot of questions about 357 00:18:44,960 --> 00:18:49,000 Speaker 1: whether that's really something that could materialize. What can we 358 00:18:49,040 --> 00:18:54,080 Speaker 1: tell about insider trading and by that I mean trading 359 00:18:54,240 --> 00:18:58,480 Speaker 1: by people that are directors or management of the company. Yeah, 360 00:18:58,480 --> 00:19:04,320 Speaker 1: so there were disclosures um around this deal with insiders, 361 00:19:04,320 --> 00:19:08,800 Speaker 1: some board members buying shares right, so buying shares when 362 00:19:08,800 --> 00:19:11,919 Speaker 1: the price was low and then obviously it's skyrocketed when 363 00:19:11,960 --> 00:19:14,199 Speaker 1: they had this steal. And it seemed like in a 364 00:19:14,240 --> 00:19:16,520 Speaker 1: period where it was quite possible that they would have 365 00:19:16,600 --> 00:19:21,800 Speaker 1: known that this might happen um And you know, Kodak 366 00:19:21,880 --> 00:19:23,920 Speaker 1: hasn't come out and said anything like that. They had 367 00:19:24,240 --> 00:19:27,600 Speaker 1: a regular share purchase program. So there's certainly questions around, 368 00:19:28,320 --> 00:19:30,399 Speaker 1: you know, what they knew and where they should have 369 00:19:30,440 --> 00:19:35,000 Speaker 1: been buying shares. And then there were also disclosers around 370 00:19:35,800 --> 00:19:40,600 Speaker 1: grants for some insiders that they could have, you know 371 00:19:41,240 --> 00:19:44,040 Speaker 1: that it seemed like the board was saying, Okay, we 372 00:19:44,119 --> 00:19:46,920 Speaker 1: sort of agreed to these grands, but now we're filing 373 00:19:46,960 --> 00:19:51,879 Speaker 1: about it that obviously it seemed more valuable after the 374 00:19:52,000 --> 00:19:56,399 Speaker 1: share price explodes because of the snaps. It's really a 375 00:19:56,400 --> 00:19:59,919 Speaker 1: phenomenal story, Paul. I mean, the day that the headlines crossed, 376 00:20:00,000 --> 00:20:02,400 Speaker 1: you know that suddenly it was going to become, yeah, 377 00:20:02,520 --> 00:20:05,679 Speaker 1: pharmaceutic company. Even in part I know, it definitely reminded 378 00:20:05,720 --> 00:20:09,359 Speaker 1: me of the days when when companies were becoming suddenly 379 00:20:09,359 --> 00:20:11,879 Speaker 1: cryptocurrency companies. And so, yeah, the first thing I did 380 00:20:11,880 --> 00:20:13,119 Speaker 1: when I saw the news, I went to the f 381 00:20:13,240 --> 00:20:16,320 Speaker 1: A function or the PGeo function that gives you kind 382 00:20:16,320 --> 00:20:18,480 Speaker 1: of breakdown by revenue, and I said, I didn't even 383 00:20:18,520 --> 00:20:20,920 Speaker 1: know these guys were in the you know, pharmaceutical bass. 384 00:20:20,960 --> 00:20:24,240 Speaker 1: It turns out they really aren't give well exactly, chemicals 385 00:20:24,240 --> 00:20:27,000 Speaker 1: and pharmaceuticals are sometimes not the same thing. Our thanks 386 00:20:27,119 --> 00:20:29,719 Speaker 1: to Eric Newcomer, Tech and Politics startup reporter here from 387 00:20:29,720 --> 00:20:34,040 Speaker 1: Bloomberg News. A lot of stuff going on in the 388 00:20:34,080 --> 00:20:36,960 Speaker 1: real estate spaces you can imagine here we're having you know, 389 00:20:37,000 --> 00:20:40,800 Speaker 1: we had the retail industry bricks and mortar in secular 390 00:20:40,840 --> 00:20:43,879 Speaker 1: decline prior to the pandemic. Then the pandemic just accelerated 391 00:20:43,920 --> 00:20:46,840 Speaker 1: all of those trends and really rereaking havoc throughout the 392 00:20:47,040 --> 00:20:50,160 Speaker 1: entire uh kind of space of a commercial real estate. 393 00:20:50,240 --> 00:20:52,080 Speaker 1: Let's get some latest on that. We can do that 394 00:20:52,119 --> 00:20:55,320 Speaker 1: with Iman, Rivan Low Rivan Lou, I'm sorry, the portfolio 395 00:20:55,359 --> 00:20:59,399 Speaker 1: manager of High Income Equities and Global Rates for tc W. Iman, 396 00:20:59,480 --> 00:21:02,320 Speaker 1: thanks so much for joining us here. There's some news that, 397 00:21:02,520 --> 00:21:06,080 Speaker 1: for example, mall operator Simon Property Group is in talks 398 00:21:06,080 --> 00:21:09,520 Speaker 1: with Amazon maybe turn some of their empty store space, um, 399 00:21:09,560 --> 00:21:12,119 Speaker 1: you know into a fulfillment center. What's going on in 400 00:21:12,280 --> 00:21:14,760 Speaker 1: the big malls and and and trying to deal with 401 00:21:14,800 --> 00:21:17,679 Speaker 1: the uh, the outbreak of the pandemic and the impact 402 00:21:17,720 --> 00:21:20,720 Speaker 1: on their business. Yeah, sure, thank you very much first 403 00:21:20,720 --> 00:21:23,600 Speaker 1: for having me, Paul and Vanni. So, um, it's a 404 00:21:23,680 --> 00:21:27,920 Speaker 1: very interesting phenomenon, you know, that that that you're referring to. So, 405 00:21:28,119 --> 00:21:29,560 Speaker 1: you know, if we just take a step back and 406 00:21:29,920 --> 00:21:32,720 Speaker 1: remember that these malls were built, you know, about forty 407 00:21:32,760 --> 00:21:35,280 Speaker 1: or fifty years ago, and you know, at the time, 408 00:21:35,400 --> 00:21:38,040 Speaker 1: you know, shops like Sears and J. C. Penny there 409 00:21:38,040 --> 00:21:41,080 Speaker 1: were the premier retailers in the country, right. So the 410 00:21:41,160 --> 00:21:42,920 Speaker 1: idea was that, you know, you would build the mall, 411 00:21:42,960 --> 00:21:45,320 Speaker 1: you would bring you know, one of these great retailers, 412 00:21:45,880 --> 00:21:49,600 Speaker 1: and you would generate some kind of network effect. You 413 00:21:49,640 --> 00:21:52,879 Speaker 1: would attract other retailers along with put traffic, and you know, 414 00:21:52,920 --> 00:21:57,960 Speaker 1: would have this virtual virtuous circle or cycle of shopping 415 00:21:58,000 --> 00:22:00,640 Speaker 1: and and and a great experience. And you know, as 416 00:22:00,680 --> 00:22:04,040 Speaker 1: you mentioned, you know, with e commerce and consumer preferences 417 00:22:04,119 --> 00:22:07,520 Speaker 1: essentially moving away you know, from these retailers, we're beginning 418 00:22:07,560 --> 00:22:10,679 Speaker 1: to see the online of that network effect. And so 419 00:22:10,760 --> 00:22:13,600 Speaker 1: you know what I find stunning is, you know, originally 420 00:22:13,760 --> 00:22:17,120 Speaker 1: the mall's response to to this, you know, to this 421 00:22:17,200 --> 00:22:19,879 Speaker 1: loss was to try to convert or transform the space 422 00:22:20,400 --> 00:22:24,040 Speaker 1: into something more of an experiential um uh you know 423 00:22:24,280 --> 00:22:27,960 Speaker 1: um factor for the visitors, the traffic. So they would 424 00:22:28,119 --> 00:22:31,320 Speaker 1: for example, they would shift the restaurants or theaters. And 425 00:22:31,600 --> 00:22:34,359 Speaker 1: you know, now we're seeing that essentially with COVID, perhaps 426 00:22:34,359 --> 00:22:36,800 Speaker 1: that equation is changing and perhaps they're throwing in a 427 00:22:36,880 --> 00:22:40,199 Speaker 1: towel on that idea, and you know seeking you know, 428 00:22:40,280 --> 00:22:44,640 Speaker 1: seeking other types of usage, specifically industrial and with Amazon 429 00:22:45,320 --> 00:22:50,640 Speaker 1: coming in, so presumably Amazon will strike serious deals here. 430 00:22:50,640 --> 00:22:53,600 Speaker 1: I mean, if they know that J. C. Penny sears 431 00:22:53,600 --> 00:22:56,560 Speaker 1: they're not going to be filled with you know, their 432 00:22:56,600 --> 00:23:01,800 Speaker 1: own items, then Amazon and used them for probably pennies 433 00:23:01,840 --> 00:23:05,520 Speaker 1: on the dollar. Now, yes, funny, I think that's that's 434 00:23:05,680 --> 00:23:08,280 Speaker 1: a very good deduction, you know, I think, um, when 435 00:23:08,280 --> 00:23:10,840 Speaker 1: you think about it, from Amazon advantage. You know, the 436 00:23:10,920 --> 00:23:14,560 Speaker 1: bottleneck in their operations has been the last mail delivery, right, 437 00:23:15,119 --> 00:23:17,800 Speaker 1: so they've been seeking you know these great a you know, 438 00:23:17,800 --> 00:23:20,520 Speaker 1: excellent locations and and let's face it, these malls, you know, 439 00:23:20,520 --> 00:23:23,240 Speaker 1: many of them are are very well located, their near 440 00:23:23,320 --> 00:23:28,400 Speaker 1: population centers. You know, they're close to freeways, very easily accessible. Um, 441 00:23:28,480 --> 00:23:30,439 Speaker 1: so in some ways that they're kind of perfect, you know, 442 00:23:30,480 --> 00:23:34,080 Speaker 1: for for a fulfilment center, distribution center. Now, you know, 443 00:23:34,160 --> 00:23:36,400 Speaker 1: many of the boxes are a little bit smaller than 444 00:23:36,440 --> 00:23:40,520 Speaker 1: then your typical um Amazon box or you know, Amazon 445 00:23:40,600 --> 00:23:43,440 Speaker 1: I think likes to have somewhere in the vicinity of 446 00:23:43,520 --> 00:23:46,240 Speaker 1: you know, eight hundred thousands, even a million, you know, 447 00:23:46,280 --> 00:23:49,359 Speaker 1: square feet many of these J. C. Pennier series boxes 448 00:23:49,400 --> 00:23:51,280 Speaker 1: are closer to a hundred and fifty or two hundred 449 00:23:51,280 --> 00:23:53,760 Speaker 1: thousand square feet. But still, you know, in a in 450 00:23:53,800 --> 00:23:57,679 Speaker 1: an area that is very supply limited, supply constraint, having 451 00:23:57,800 --> 00:24:00,520 Speaker 1: access to these locations is really you know, going to 452 00:24:00,640 --> 00:24:03,080 Speaker 1: benefit Amazon. And I think that your guests that they're 453 00:24:03,080 --> 00:24:06,440 Speaker 1: going to get great economic side of these is probably 454 00:24:06,480 --> 00:24:08,080 Speaker 1: a very good one because you know, what is the 455 00:24:08,160 --> 00:24:11,360 Speaker 1: alternative from the advantage point of Simon and the mall owners. 456 00:24:12,200 --> 00:24:14,640 Speaker 1: So yeah, I think it could be very lucutive for them. 457 00:24:14,320 --> 00:24:17,680 Speaker 1: So give us just kind of overview of kind of 458 00:24:18,560 --> 00:24:21,880 Speaker 1: you know, just commercial real estate. Um, you know, whether 459 00:24:21,880 --> 00:24:23,720 Speaker 1: it's from the Reeds perspective. I mean, it just seems 460 00:24:23,760 --> 00:24:26,679 Speaker 1: like the trends that we saw prior to the pandemic 461 00:24:26,960 --> 00:24:29,920 Speaker 1: are just on an accelerated mode right now. And it's 462 00:24:29,960 --> 00:24:33,760 Speaker 1: hard to paint a bullish call here, is it. No. 463 00:24:33,920 --> 00:24:36,120 Speaker 1: I think you're right, Paul. You know, it's it really 464 00:24:36,160 --> 00:24:39,600 Speaker 1: does depend on the specific stuff stuff factor within commercial 465 00:24:39,600 --> 00:24:42,840 Speaker 1: real estates. Um. You know, there are certainly those those 466 00:24:42,960 --> 00:24:45,080 Speaker 1: parts of it that I've prived. You know, we were 467 00:24:45,119 --> 00:24:48,240 Speaker 1: talking about the industrial space. You know, we should remember 468 00:24:48,280 --> 00:24:51,280 Speaker 1: that those landlords have done quite well. You know, companies 469 00:24:51,280 --> 00:24:56,080 Speaker 1: like pologists, um, you know, that entire ecosystem. Additionally, uh, 470 00:24:56,240 --> 00:24:59,080 Speaker 1: you know, data centers, powers, you know, as as work 471 00:24:59,160 --> 00:25:01,920 Speaker 1: from home models have been successful. You know, those companies 472 00:25:01,920 --> 00:25:04,840 Speaker 1: have thrived, and it has really come at the expanse 473 00:25:04,920 --> 00:25:07,480 Speaker 1: of you know, those that are more central being located 474 00:25:07,520 --> 00:25:09,960 Speaker 1: near the epicenter of the you know, of the pandemic. 475 00:25:10,720 --> 00:25:13,680 Speaker 1: You know, things like retail um you know, things like hotels, 476 00:25:13,760 --> 00:25:16,679 Speaker 1: lodging and so on that that have really been been 477 00:25:16,720 --> 00:25:19,360 Speaker 1: pressured and we envisioned that that pressure is going to continue. 478 00:25:19,440 --> 00:25:21,280 Speaker 1: By the way, and I think that these are parts 479 00:25:21,320 --> 00:25:24,679 Speaker 1: of as you mentioned, longer term secular trends that have 480 00:25:24,760 --> 00:25:27,399 Speaker 1: been impacting real estate that are not being accelerated because 481 00:25:27,400 --> 00:25:31,200 Speaker 1: of Yeah, I mean, what do you do when you 482 00:25:31,280 --> 00:25:34,320 Speaker 1: invest in these things and what is the next thing 483 00:25:34,920 --> 00:25:39,679 Speaker 1: that might replace you know, these investment dollars for you 484 00:25:39,680 --> 00:25:41,560 Speaker 1: you know, it's it's a great question, and we spend 485 00:25:41,560 --> 00:25:43,760 Speaker 1: a lot of time, you know, thinking about these trends. 486 00:25:43,800 --> 00:25:46,960 Speaker 1: You know, we find that real estate, like like all 487 00:25:47,000 --> 00:25:50,520 Speaker 1: of the sectors, does evolve, you know, even those perceived 488 00:25:50,560 --> 00:25:52,480 Speaker 1: to be very stable. You know, that's part of the 489 00:25:52,560 --> 00:25:54,560 Speaker 1: draw of it is you're supposed to have very stable 490 00:25:54,600 --> 00:25:58,080 Speaker 1: rents and you know, and and high visibility, and yet 491 00:25:58,240 --> 00:26:01,639 Speaker 1: you know, what you're seeing on folds here is fantastically opposite, right. 492 00:26:01,640 --> 00:26:05,040 Speaker 1: I mean, those those owners of our shareholders in fiement 493 00:26:05,359 --> 00:26:08,280 Speaker 1: or the retail reads thought that had visible rents and 494 00:26:08,280 --> 00:26:10,679 Speaker 1: and sure enough now you see the disruption. So we 495 00:26:10,800 --> 00:26:13,760 Speaker 1: spend a lot of time in thinking about the secular trends, 496 00:26:13,840 --> 00:26:15,760 Speaker 1: you know, that are that are hitting the market. You know, 497 00:26:15,800 --> 00:26:17,520 Speaker 1: so two of the easy ones are the ones that 498 00:26:17,560 --> 00:26:21,040 Speaker 1: we're experiencing right now. E commerce, we touched on a 499 00:26:21,160 --> 00:26:23,600 Speaker 1: big data and mobility, you know, that's the work from 500 00:26:23,680 --> 00:26:26,200 Speaker 1: home success, you know, things like data centers and towers. 501 00:26:26,680 --> 00:26:29,240 Speaker 1: But what are the secular trends that are perhaps in 502 00:26:29,280 --> 00:26:32,560 Speaker 1: their nacency right now, you know, we we spend sometimes 503 00:26:32,600 --> 00:26:35,679 Speaker 1: thinking about those. What will the impact of driver realist 504 00:26:35,720 --> 00:26:39,640 Speaker 1: technology be? UM Artificial intelligence is a very large trend 505 00:26:39,680 --> 00:26:41,720 Speaker 1: that is impacting other segments of the market. You know, 506 00:26:41,760 --> 00:26:44,080 Speaker 1: what would the impact of that on on real estate be? 507 00:26:44,680 --> 00:26:47,000 Speaker 1: And it's oftentimes we find that these are the forces 508 00:26:47,040 --> 00:26:49,320 Speaker 1: that really shape you know, the winners and losers of 509 00:26:49,520 --> 00:26:53,160 Speaker 1: you know, ten years from now and it's only you know, manifested, 510 00:26:53,520 --> 00:26:56,320 Speaker 1: you know, in a couple of years. Well, we're definitely 511 00:26:56,359 --> 00:26:58,760 Speaker 1: going to follow that story. Amen, Thank you for coming 512 00:26:58,760 --> 00:27:02,200 Speaker 1: on and giving us your intelligence. Emon Rivan Lully's pm 513 00:27:02,280 --> 00:27:06,840 Speaker 1: PIE Income Equities and Global Rates. Thanks for listening to 514 00:27:06,840 --> 00:27:10,680 Speaker 1: Bloomberg Markets podcast. You can subscribe and listen to interviews 515 00:27:10,680 --> 00:27:14,400 Speaker 1: at Apple Podcasts or whatever podcast platform you prefer. I'm 516 00:27:14,480 --> 00:27:17,640 Speaker 1: Bonnie Quinn. I'm on Twitter at Bonnie Quinn. And Paul 517 00:27:17,640 --> 00:27:20,520 Speaker 1: Sweeney I'm on Twitter at pt Sweeney. Before the podcast, 518 00:27:20,560 --> 00:27:23,080 Speaker 1: you can always catch us worldwide at Bloomberg Radio