WEBVTT - Stocks Get Relief Rally on BOJ 0:00:02.920 --> 0:00:08.680 Bloomberg Audio Studios, podcasts, radio news. 0:00:09.960 --> 0:00:13.840 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:00:13.920 --> 0:00:17.000 weekdays at ten am Eastern on Apple Car playing Android 0:00:17.000 --> 0:00:20.120 Auto with the Bloomberg Business App. Listen on demand wherever 0:00:20.160 --> 0:00:24.520 you get your podcasts, or watch us live on YouTube. 0:00:24.840 --> 0:00:25.720 All right, let's get to Gena. 0:00:25.720 --> 0:00:30.160 Martin Adams, So Boomberg Intelligence Chief equity strategist, Gina, how 0:00:30.240 --> 0:00:33.520 much complacency at this point is still left in the market. 0:00:34.800 --> 0:00:37.320 Oh, I don't think there's too much complacency at all, Alex. 0:00:37.360 --> 0:00:40.320 It's pretty rare to see the VIC spike well north 0:00:40.360 --> 0:00:42.879 of sixty. Yes, we did on Monday morning and not 0:00:42.960 --> 0:00:45.360 have a full washout in sentiment. 0:00:45.400 --> 0:00:46.400 And I think we did see that. 0:00:46.479 --> 0:00:48.960 By the time we got to the point of Monday close, 0:00:49.080 --> 0:00:53.080 the vixlas above thirty. The fourteen day RSI momentum score 0:00:53.120 --> 0:00:55.520 for the S and P five hundred was just at thirty. 0:00:56.080 --> 0:01:00.600 That kind of oversoul momentum and extreme pop and vis 0:01:00.960 --> 0:01:03.680 has historically led to positive returns eighty percent of the 0:01:03.760 --> 0:01:08.680 time over the next three months, so we've generally sort 0:01:08.680 --> 0:01:09.479 of washed out. 0:01:09.360 --> 0:01:10.680 A lot of the complacency. 0:01:11.200 --> 0:01:13.959 I do think that to the degree that valuations are 0:01:14.000 --> 0:01:16.759 still a little bit too elevated. In tech that may 0:01:16.800 --> 0:01:21.080 be a space where complacency still exists. And you know, frankly, 0:01:21.200 --> 0:01:24.120 as much as we nitpick at these company earnings, the 0:01:24.160 --> 0:01:25.600 earnings have been very. 0:01:25.520 --> 0:01:26.200 Very strong. 0:01:26.840 --> 0:01:29.040 So there's not a lot in the earnings that you 0:01:29.080 --> 0:01:32.560 can say really sort of dismantled the confidence in the 0:01:32.600 --> 0:01:36.240 tech space. If there's any complacency, it might be there, 0:01:36.280 --> 0:01:38.880 but I'd say markets at large, you have gone a 0:01:38.920 --> 0:01:44.240 long way to pricing out any sort of elevated enthusiasm. 0:01:44.680 --> 0:01:47.920 So I'm still trying to figure out what happened, Like, 0:01:47.960 --> 0:01:50.120 what happened Monday, Tuesday and today? 0:01:50.240 --> 0:01:50.880 Was it technical? 0:01:51.040 --> 0:01:51.920 You forget Friday? 0:01:52.320 --> 0:01:54.520 Friday too? I wonder why I forgot Friday. 0:01:54.520 --> 0:01:58.160 It's on the beach, So is it a technical thing? 0:01:58.800 --> 0:02:01.520 Japan carried thing that people are telling me about the 0:02:01.600 --> 0:02:02.840 Nieck trading crazy? 0:02:03.120 --> 0:02:03.760 What was it? 0:02:04.600 --> 0:02:07.480 I think it's predominantly about Japan, and you can almost 0:02:07.520 --> 0:02:09.079 one for one mark all the way back to the 0:02:09.080 --> 0:02:12.320 middle of July when the market started weakening as the 0:02:12.440 --> 0:02:17.440 yen turned significant to made a significant turn in direction, right, 0:02:17.520 --> 0:02:20.959 So it's very much about an unwinded the carry trade. 0:02:21.320 --> 0:02:23.920 And then last week when we did get final confirmation 0:02:24.200 --> 0:02:26.720 from the Bank of Japan that they were raising interest 0:02:26.800 --> 0:02:30.320 rates for the first time in seventeen years. That created 0:02:30.360 --> 0:02:34.119 a lot of instability that was then exacerbated on Friday 0:02:34.280 --> 0:02:37.440 with some relatively weak economic data in the US. So 0:02:37.480 --> 0:02:41.640 it's that spread in interest rate differentials between the US 0:02:41.680 --> 0:02:44.679 and Japan that is really key to this market meltdown 0:02:45.280 --> 0:02:49.520 that clearly widened substantially over the weekend. US bond markets 0:02:49.520 --> 0:02:53.480 starting to price for fed ease, where the Japanese market 0:02:53.560 --> 0:02:56.960 is now starting to expect a tightening in Japan created 0:02:57.040 --> 0:03:02.000 tremendous weakness in the currency marks, which then exacerbated declines 0:03:02.040 --> 0:03:03.000 in the equity markets. 0:03:03.040 --> 0:03:03.639 I mean, I think that. 0:03:03.600 --> 0:03:06.480 There there is a link between all of these markets 0:03:06.480 --> 0:03:09.360 that is very, very notable. When you have this carry 0:03:09.360 --> 0:03:12.600 trade in place for nearly two decades and it's starting 0:03:12.639 --> 0:03:16.520 to unwine, it creates some issues of force selling, some 0:03:16.600 --> 0:03:20.919 liquidity issues broadly that generally impact the equity markets, and 0:03:20.960 --> 0:03:24.880 I think that's largely what's driven the instability. Thankfully, overnight 0:03:24.919 --> 0:03:26.880 we did get some news from the Bank of Japan 0:03:26.960 --> 0:03:29.760 that they have they've committed at the very least not 0:03:29.880 --> 0:03:34.120 to tighten during periods of general financial market distress going forward. 0:03:34.680 --> 0:03:37.200 But you know, frankly, we are in a different path 0:03:37.360 --> 0:03:39.760 for central bank policy than we have been in the 0:03:39.760 --> 0:03:41.920 points in the past, So we're going to have to 0:03:41.960 --> 0:03:45.400 be on guard for bouts of indigestion as we adjust 0:03:45.440 --> 0:03:46.240 to this new normal. 0:03:46.920 --> 0:03:48.520 All right, Gene, I've been doing a stock market thing 0:03:48.560 --> 0:03:50.520 for thirty five years. I have no idea what's going 0:03:50.560 --> 0:03:52.200 on at there, Gina Martin Adams. 0:03:52.240 --> 0:03:52.680 She's a pro. 0:03:52.880 --> 0:03:53.680 That's not helpful. 0:03:54.840 --> 0:03:56.040 I have no idea what's going on? 0:03:56.240 --> 0:03:58.960 Gena Martin Adams, chief equity strategist for Bloomberg Intelligence. 0:03:59.480 --> 0:03:59.880 Joining us. 0:04:01.720 --> 0:04:05.600 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:04:05.680 --> 0:04:09.240 weekdays at ten am Eastern on applecar Play and Android 0:04:09.240 --> 0:04:12.000 Auto with the Bloomberg Business Act. You can also listen 0:04:12.120 --> 0:04:15.240 live on Amazon Alexa from our flagship New York station, 0:04:15.600 --> 0:04:18.640 Just say Alexa, play Bloomberg eleven thirty. 0:04:19.600 --> 0:04:22.239 And Alex Steel Pulse. We need is Bloomberg Intelligence Radio. 0:04:22.240 --> 0:04:24.839 We are broadcasting to you live from our rainy interactive 0:04:24.839 --> 0:04:27.080 broker studio right here in New York. Although I don't 0:04:27.080 --> 0:04:28.840 know if it's actually raining right now, but doesn't look 0:04:28.839 --> 0:04:29.720 pretty dark. 0:04:29.839 --> 0:04:31.440 It looks dark. It looks a little grim, looks a 0:04:31.480 --> 0:04:31.960 little dark. 0:04:32.600 --> 0:04:34.360 R Let's go to the bond market for a moment, 0:04:34.440 --> 0:04:38.360 because four years ago those twenty year bond auctions were 0:04:38.400 --> 0:04:38.839 a thing. 0:04:39.200 --> 0:04:39.960 Of the past. 0:04:40.040 --> 0:04:44.000 But Treasury Secretary at the time, Steve Manushan, reintroduced those 0:04:44.040 --> 0:04:47.880 twenty year bonds and monthly auctions. Their sale apparently, if 0:04:47.880 --> 0:04:50.839 you just do back in the envelope calculations tacked on 0:04:50.920 --> 0:04:53.640 roughly two billion dollars a year in interest expenses. And 0:04:53.680 --> 0:04:56.240 now Steve Manushan saying, you know what, guys, maybe we 0:04:56.240 --> 0:04:59.080 don't need them anymore, maybe they're too expensive. Well here 0:04:59.200 --> 0:05:02.560 joining us in studio. Yesha a Bloomberg Markets reporter. He 0:05:02.920 --> 0:05:05.960 is the lead on this story for Bloomberg. It's reading 0:05:06.040 --> 0:05:07.599 quite how you guys should definitely check it out on 0:05:07.680 --> 0:05:09.520 the terminal or on Bloomberg dot com. 0:05:09.800 --> 0:05:11.320 Yeah, what is he saying. 0:05:12.080 --> 0:05:14.640 He's saying, as you just said, just to kill it. 0:05:14.640 --> 0:05:20.559 It's expensive paper for the government to keep selling every month. 0:05:20.680 --> 0:05:23.719 It's almost like one trillion over the past four years 0:05:23.760 --> 0:05:27.320 they sold and based our calculation based on the average 0:05:27.600 --> 0:05:31.960 yields of tens and thirty year bonds, the government overpaid 0:05:32.240 --> 0:05:35.520 roughly two billion a year and it adds up to 0:05:36.400 --> 0:05:39.520 forty billing over the life of the bonds. So and 0:05:39.839 --> 0:05:42.840 if the government keeps selling it, it's just really costs 0:05:42.880 --> 0:05:44.440 a lot of money for taxpayers. 0:05:44.800 --> 0:05:46.880 Why why is it costing more money? 0:05:47.080 --> 0:05:51.120 Yeah, because you are selling the most expensive bonds on 0:05:51.200 --> 0:05:54.840 the trairie Yo cuve. You would sell the bonds cheaply 0:05:54.960 --> 0:05:57.920 raise the money cheaply for the governments if you sell 0:05:57.960 --> 0:06:01.599 the ten years for example. And the two billion doesn't 0:06:01.600 --> 0:06:03.839 sound a lot of money, and just considering in the 0:06:03.880 --> 0:06:08.000 context of the government's spanning is almost seven trillion a year, 0:06:08.200 --> 0:06:11.200 So two billion is not a big deal in big 0:06:11.480 --> 0:06:14.359 scheme of things. But at the same time, it's not 0:06:14.520 --> 0:06:18.880 small money. Right, we look at the budget of the governments. 0:06:19.080 --> 0:06:22.440 It's roughly equal to the annual cost for running the 0:06:22.520 --> 0:06:26.800 national parks. It's also equal to the subsidy for the 0:06:26.960 --> 0:06:29.360 veteran housing. So it's real money. 0:06:29.839 --> 0:06:31.320 Why did he like it to begin with? 0:06:31.360 --> 0:06:31.520 Then? 0:06:32.000 --> 0:06:39.120 So the government and it's two twenty. The government's looking 0:06:39.279 --> 0:06:43.040 for new ways to diversive that by their funding and 0:06:43.160 --> 0:06:46.560 try to raise a lot of money because the it's pandemic. 0:06:46.760 --> 0:06:50.320 The government spanning is really ramping up and they try 0:06:50.360 --> 0:06:52.440 to find a new source of the funding, and they 0:06:52.560 --> 0:06:56.240 studied a lot of ways, including selling fifty year bounds 0:06:56.360 --> 0:07:00.920 or one hundred year bonds. The government have a committee 0:07:00.960 --> 0:07:05.040 they try to convince that MANUSI that it's not a 0:07:05.080 --> 0:07:07.960 good deal to sell really long bounds fifty one hundred 0:07:08.000 --> 0:07:11.760 year bounds because it's even more expensive. Nobody's going to 0:07:11.800 --> 0:07:16.240 buy buy it. So the Mnusian took the idea and 0:07:16.920 --> 0:07:19.800 sell the twenty year bounds. Remember, in the past, as 0:07:19.800 --> 0:07:24.040 you mentioned earlier, the government sold the twenty year bounds 0:07:24.080 --> 0:07:28.720 in the nineteen eighties, but it only lasted four years 0:07:29.040 --> 0:07:32.160 because they run the same problem as we run now. 0:07:32.720 --> 0:07:36.600 There are no sufficient demand for the twenty year bonds, 0:07:36.680 --> 0:07:39.760 and at that time the government also have the limit 0:07:39.920 --> 0:07:43.320 of how much long term bonds they can sell with. 0:07:43.920 --> 0:07:47.720 So at that time the US Treasury decided to just 0:07:47.960 --> 0:07:50.920 abandon the twenty year bounds in favor of keeping selling 0:07:50.960 --> 0:07:55.080 the thirty year bounds. Thirteen bonds has more demand at 0:07:55.200 --> 0:07:57.960 least it looks like now that because a lot of 0:07:57.960 --> 0:08:03.080 the pensions insurance company realize these long duration, long interest 0:08:03.120 --> 0:08:09.360 and sensitive security to match their balance sheet liability. So yeah, 0:08:09.600 --> 0:08:10.000 there we. 0:08:09.960 --> 0:08:11.440 Are one of the things. 0:08:11.840 --> 0:08:14.160 If it's more expensive sell in the twenties, why isn't 0:08:14.200 --> 0:08:17.120 the Treasury just not sell any than just auction off 0:08:17.120 --> 0:08:17.960 tens and thirties. 0:08:18.040 --> 0:08:22.680 Yeah, So the Treasury in their debt management principle, they 0:08:22.760 --> 0:08:27.440 really want to make the debt issuance more predictable, more reliable. 0:08:27.680 --> 0:08:30.120 So once they start issuing new bonds, they want to 0:08:30.160 --> 0:08:33.880 see it stick for a while, so everyone have the 0:08:33.920 --> 0:08:36.960 same expectations. So you just can't turn it on and 0:08:37.000 --> 0:08:41.520 turn it off on a whim. So that's the argument 0:08:41.640 --> 0:08:47.640 for keep doing it. And the the other argument is 0:08:47.679 --> 0:08:50.640 that if you're looking down in the next few years, 0:08:50.679 --> 0:08:54.480 the deficity is going to continue grow very quickly and 0:08:54.600 --> 0:08:57.640 they need every help from every part of the curve 0:08:58.040 --> 0:09:02.199 since you have already this new instry instrument, so they 0:09:02.320 --> 0:09:05.480 like to stick with it. And also that the argument 0:09:05.640 --> 0:09:07.600 is that if you don't sell the twenty year bonds, 0:09:07.679 --> 0:09:10.640 you have to sell more ten years, thirty years, then 0:09:10.679 --> 0:09:14.240 you're going to increase the cost for that part of 0:09:14.280 --> 0:09:15.200 the curve as well. 0:09:15.760 --> 0:09:18.959 An argument are they issuing more front end or back end? 0:09:19.559 --> 0:09:24.880 Yeah, so the so there's some academic study the most 0:09:25.080 --> 0:09:28.560 cost efficient way is sell in the middle of the curve, 0:09:28.720 --> 0:09:31.520 in the badley of the curve, like five years, ten years, 0:09:31.760 --> 0:09:35.880 anything beyond that. It's costs a lot of money. But 0:09:36.040 --> 0:09:39.319 they also want a more diversified of the case. So 0:09:39.559 --> 0:09:42.120 if you sell, like all of a sudden, sell lots 0:09:42.160 --> 0:09:45.040 of the ten year bonds in one auction, you could 0:09:45.080 --> 0:09:50.600 see that auction fair fairly poorly, And this is something 0:09:50.600 --> 0:09:53.840 they want to avoid. So that's the argument to just 0:09:54.080 --> 0:09:54.640 keep doing that. 0:09:54.760 --> 0:09:58.760 Yeah, these deficits are they're becoming a thing here. I 0:09:58.800 --> 0:10:02.440 mean the annual de it's almost two trillion dollars. 0:10:02.559 --> 0:10:03.160 That's per year. 0:10:03.240 --> 0:10:06.560 Kids, that's double the level of just five years ago. 0:10:07.480 --> 0:10:09.839 What is What does your bond markets say about that? 0:10:10.240 --> 0:10:12.959 Yeah, that's there's a lot of a debate on that. 0:10:13.240 --> 0:10:17.360 We saw that last summer, the law and the curve 0:10:17.600 --> 0:10:21.600 really kind of keep rising. Remember at the time, the 0:10:21.640 --> 0:10:24.640 federal was raising interest rates, so a lot of people 0:10:24.720 --> 0:10:28.880 were concerned that we are don't have a sufficient demand 0:10:29.160 --> 0:10:31.640 for these bonds. And I think I think this is 0:10:31.679 --> 0:10:34.400 still the concern in the market, the this talk of 0:10:34.600 --> 0:10:38.760 bond vigilanty. It becomes a thing nowadays that the idea 0:10:38.880 --> 0:10:40.840 that that we are going to have a bier strikes 0:10:41.360 --> 0:10:45.680 all these auctions because think about it, some of the 0:10:45.720 --> 0:10:48.840 foreign investors, especially central bank in China, Japan, they are 0:10:48.840 --> 0:10:51.600 not going to they are not coming to the US 0:10:51.640 --> 0:10:57.000 treasure market anymore. And uh, the it's really the private 0:10:57.280 --> 0:11:01.160 sectors buying all these bonds and they're there price sensitive. 0:11:01.280 --> 0:11:04.320 They want to buy the price. They're not going to 0:11:04.320 --> 0:11:06.720 buy the price that's really low. They want to be 0:11:06.760 --> 0:11:09.480 compensated for the risks. So there's a term in the 0:11:09.520 --> 0:11:13.200 BOMBA called the term premium. This is how much actual 0:11:13.320 --> 0:11:17.240 compensation you wanted for holding the long term bonds. And 0:11:17.280 --> 0:11:20.080 we see it backed up a little bit over the 0:11:20.120 --> 0:11:24.200 course of the year, but now there's recession consuming the market, 0:11:24.280 --> 0:11:28.640 especially over the last couple of days. That term premium 0:11:28.720 --> 0:11:32.520 is capture at bay at the moment, but at some 0:11:32.600 --> 0:11:36.040 point there's some has to be some confrontation between the 0:11:36.080 --> 0:11:38.640 markets and all the supply coming to the market at 0:11:38.720 --> 0:11:39.120 some point. 0:11:39.320 --> 0:11:42.320 Totally, all right, Yashan, thanks a lot, Yasha his Bloomberg 0:11:42.360 --> 0:11:45.000 Markets reporter. Definitely check out everything that he writes because 0:11:45.000 --> 0:11:46.960 that's where I learn all my stuff. Just thank you 0:11:47.000 --> 0:11:49.640 very much for all your hard work and you're writing. 0:11:50.840 --> 0:11:54.720 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:11:54.840 --> 0:11:57.520 weekdays at ten am Eastern on fo card Playing and 0:11:57.640 --> 0:12:01.040 Brounoto with the Bloomberg Business App. Listen on demand wherever 0:12:01.080 --> 0:12:04.200 you get your podcasts, or watch us live on YouTube. 0:12:06.080 --> 0:12:09.439 Let's get more to the equity moves Lift also moving 0:12:09.640 --> 0:12:12.920 in the market. Airbnb though just really struggling, Man deep saying, 0:12:12.920 --> 0:12:17.160 Bloomberg Intelligence in your tech industry. Analyst joins us on Airbnb. 0:12:17.559 --> 0:12:20.840 So is this Airbnb misjudging something or is this just 0:12:20.920 --> 0:12:23.160 the US consumer surprisingly slowing? 0:12:23.760 --> 0:12:27.200 I think with Airbnb, the biggest concern has been the 0:12:27.280 --> 0:12:30.240 saturation in their core market. And you know, we are 0:12:30.240 --> 0:12:34.000 coming off of pandemic where the tailwind was behind them 0:12:34.520 --> 0:12:38.400 in terms of people traveling more. But now everyone realizes 0:12:38.520 --> 0:12:41.240 that their room night growth is tapering off. And the 0:12:41.280 --> 0:12:43.920 reason why it's tapering off is because they are highly 0:12:43.960 --> 0:12:48.040 penetrated in their core markets, whether it's in the US, Europe, 0:12:48.160 --> 0:12:52.800 and with any marketplace business, you got to grow supply. 0:12:53.200 --> 0:12:56.520 If you're not growing supply, then it becomes a problem 0:12:56.559 --> 0:12:59.360 because then your demand is sort of limited by how 0:12:59.440 --> 0:13:02.120 much supply you can grow. So what they told us 0:13:02.200 --> 0:13:05.440 last night is they're going to spend more in terms 0:13:05.480 --> 0:13:11.000 of acquiring new supply outside their core markets in Latin America, 0:13:11.240 --> 0:13:15.160 in Asia pack and there will be ROI down the line, 0:13:15.400 --> 0:13:18.160 but for the next two to three quarters, they're gonna 0:13:18.160 --> 0:13:21.080 be growing mid single digit. And that's where I think. 0:13:21.160 --> 0:13:25.439 When you're trading at eight nine time sales, the highest valuation, 0:13:25.960 --> 0:13:27.560 you get this kind of response. 0:13:27.760 --> 0:13:30.000 It looks like we're surrounded here in our studio by 0:13:30.080 --> 0:13:32.200 these bi anals. We got man Deep, we got Jonathan 0:13:32.240 --> 0:13:34.680 Palmer on the healthcare. It's almost like there's not a 0:13:34.720 --> 0:13:37.439 management team in there keeping tabs on where all the animals. 0:13:37.200 --> 0:13:42.599 Are for because they're all here. We make them come here. 0:13:40.800 --> 0:13:42.120 On the beach at the moment, I mean most of 0:13:42.160 --> 0:13:46.240 the management team, all right, So Man Deep Airbnb. To me, 0:13:46.280 --> 0:13:47.800 it feels like we're just kind of getting. 0:13:47.559 --> 0:13:49.360 Back to a new normal. I mean, if I like 0:13:49.400 --> 0:13:52.000 this story and I like the concept, I buy the 0:13:52.040 --> 0:13:54.000 stock on the weakness, what are some of the Are 0:13:54.040 --> 0:13:55.880 people concerned about the model. 0:13:55.679 --> 0:13:58.120 Per se or they just saying, Hey, I just don't 0:13:58.200 --> 0:13:59.600 like the cops, I don't like the numbers of stores. 0:13:59.679 --> 0:14:03.360 Yeah, it's more about the estimates getting revised lower. So 0:14:03.600 --> 0:14:06.640 if you were hoping you will see upward revisions. That's 0:14:06.679 --> 0:14:10.120 not happening with this stock. And the reason that's the 0:14:10.200 --> 0:14:12.440 case is when what they told us last night is 0:14:12.840 --> 0:14:15.280 even though they are talking about new products, you know, 0:14:15.440 --> 0:14:19.640 rooms and experiences, nothing is adding in terms of the 0:14:19.680 --> 0:14:22.640 incremental top line growth or the margins. In fact, the 0:14:22.680 --> 0:14:26.120 margins would take a hit because they talked about expenses 0:14:26.160 --> 0:14:29.240 being on the higher side. So if you are looking for, 0:14:29.480 --> 0:14:32.800 you know, a next one to two year investment, there 0:14:32.840 --> 0:14:35.720 isn't a lot to look forward to in Theirbnb story. 0:14:36.040 --> 0:14:39.640 And plus, there is a cyclical element to this stock, 0:14:39.800 --> 0:14:43.160 given you know, the economy is slowing down, consumer spending 0:14:43.240 --> 0:14:46.040 is slowing down. They had the best tailwind in terms 0:14:46.040 --> 0:14:49.760 of Olympics, you know, summer travel. Still they guide it 0:14:49.800 --> 0:14:52.440 to mid single digit room night growth, So that wasn't 0:14:52.880 --> 0:14:54.080 music to investors. 0:14:54.640 --> 0:14:58.200 Is the demand there still demand? That's the other side, right. 0:14:58.520 --> 0:15:01.120 So if you look across the in terms of how 0:15:01.160 --> 0:15:07.000 the marketplace travel marketplaces have done, booking, Uber Lift, every 0:15:07.360 --> 0:15:11.040 company has suggested that they are seeing some softness. Now 0:15:11.080 --> 0:15:14.000 nobody is saying we are seeing recessionary trends. And when 0:15:14.720 --> 0:15:18.800 you know, people pare down in terms of their travel spend. 0:15:19.240 --> 0:15:22.840 Maybe they're not going to take you know, three vacations 0:15:22.880 --> 0:15:25.280 as opposed to they'll trade down and take two. And 0:15:25.600 --> 0:15:27.880 you know, same thing with type of uber rights, they're 0:15:27.920 --> 0:15:30.560 not taking the most expensive. So there is that trading 0:15:30.560 --> 0:15:33.360 down that's happening right now. But nobody is calling for 0:15:33.440 --> 0:15:35.200 an outright recession yet. 0:15:35.600 --> 0:15:37.840 Lift, is there any future for this company? 0:15:37.960 --> 0:15:38.800 Can Lift get a lift? 0:15:38.840 --> 0:15:40.800 Can Lift get a lot? Sorry at all? 0:15:41.400 --> 0:15:44.280 I mean scale is your friend when it comes to 0:15:44.440 --> 0:15:47.880 marketplace is given how tough marketplace businesses are. And in 0:15:48.320 --> 0:15:52.520 Lift's case, they need to partner with somebody who's rolling 0:15:52.560 --> 0:15:56.880 out autonomous vehicles, whether it's Vemo or Tesla. 0:15:57.400 --> 0:15:58.240 That's the hope. 0:15:58.280 --> 0:16:00.640 They need a part or even a door dash. 0:16:00.920 --> 0:16:03.360 That's the enough place to be. Now, what's management saying. 0:16:03.360 --> 0:16:04.440 Are they open to a partnership? 0:16:04.520 --> 0:16:04.800 They are. 0:16:04.920 --> 0:16:08.080 They said their fleet network is the best to roll 0:16:08.120 --> 0:16:11.840 out these autonomous and robotaxis. But clearly, you know, we 0:16:11.920 --> 0:16:14.080 know Tesla's ambitions or they want to do it on 0:16:14.120 --> 0:16:15.960 their own. They don't want to use any of the 0:16:16.120 --> 0:16:21.040 intermediary So time will tell if Lift will be partnering 0:16:21.080 --> 0:16:21.320 with them. 0:16:21.360 --> 0:16:22.200 All right, that's amazing. 0:16:22.200 --> 0:16:24.880 I just can't believe the different how those two companies 0:16:24.920 --> 0:16:27.000 have diverged since their IPOs. 0:16:26.640 --> 0:16:29.560 One reflected in the valuation. I mean, look at lifts valuation. 0:16:29.720 --> 0:16:33.480 It's a monster, just ten x in terms of market cap. 0:16:33.640 --> 0:16:36.600 Mandeep Cheing thinks so much. We appreciate technology channel somehow 0:16:36.640 --> 0:16:38.800 it covers all those marketplace things. I think it's all 0:16:38.960 --> 0:16:39.640 kind of a scam. 0:16:39.640 --> 0:16:42.040 But I don't know. People love the Airbnb. My kids 0:16:42.120 --> 0:16:44.200 use them all the time. Oh yeah, so good, good 0:16:44.200 --> 0:16:44.480 for them. 0:16:46.000 --> 0:16:49.880 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:16:49.960 --> 0:16:53.000 weekdays at ten am Eastern on Apple car Play and 0:16:53.000 --> 0:16:56.280 Android Auto with the Bloomberg Business. You can also listen 0:16:56.400 --> 0:16:59.480 live on Amazon Alexa from our flagship New York station 0:16:59.840 --> 0:17:02.240 Just Alexa playing Bloomberg eleven. 0:17:04.119 --> 0:17:05.720 Let's go to the other thing that I love, and 0:17:05.760 --> 0:17:10.680 that's energy. How to store energy is huge, and it's 0:17:10.760 --> 0:17:14.400 huge because if you want to diversify what energy you're using, 0:17:14.440 --> 0:17:17.800 like wind and solar and even hydrogen, you need batteries, 0:17:17.840 --> 0:17:19.879 and you need really big batteries to be able to 0:17:19.920 --> 0:17:21.639 store it. Now, you can maybe do it for a 0:17:21.720 --> 0:17:24.360 couple hours, maybe a day or two, but doing that 0:17:24.440 --> 0:17:27.639 longer has proved really difficult and really expensive, and one 0:17:27.720 --> 0:17:30.400 company is trying to change that. The company is called 0:17:30.560 --> 0:17:34.760 energy Vault now. It's backed back in twenty twenty one. 0:17:35.720 --> 0:17:38.920 Before it's backed, SoftBank was an investor. It's a Swiss 0:17:38.960 --> 0:17:42.280 startup basically that is trying to find different ways of 0:17:42.400 --> 0:17:46.160 storing energy. And the CEO joins us now, Rob Paconi, 0:17:46.200 --> 0:17:49.280 CEO of Energy Vault. He joins US from Switzerland. Rob, 0:17:49.280 --> 0:17:52.040 we appreciate the time. Can you just describe a little 0:17:52.080 --> 0:17:55.000 bit in dumb down language what it is that you 0:17:55.040 --> 0:17:55.520 guys do. 0:17:56.920 --> 0:17:57.280 Sure. 0:17:57.320 --> 0:18:01.200 So we broadly focus on energy storage, and we focus 0:18:01.240 --> 0:18:05.280 on it with varying technologies and software. So we do 0:18:05.440 --> 0:18:09.800 shorter duration energy storage using latimion. We do long duration 0:18:09.960 --> 0:18:13.520 energy storage meaning things to get sort of in a six, eight, twelve, 0:18:13.600 --> 0:18:16.440 even twenty four hours, so full day types of storage 0:18:16.440 --> 0:18:21.000 with a unique gravity solution where we lift in. 0:18:21.000 --> 0:18:24.919 Lower blocks or will shift water from different heights. And 0:18:25.000 --> 0:18:27.000 we also do ultralong. 0:18:26.520 --> 0:18:31.359 Duration meaning multi day storage using green hydrogen and microgrids. 0:18:32.600 --> 0:18:37.520 Who are your customers, Rob, Our main customers are first 0:18:37.520 --> 0:18:40.560 and foremost utility, so we can sell directly to utilities, 0:18:41.359 --> 0:18:45.199 and we also sell to independent power producers so the 0:18:45.240 --> 0:18:48.280 ones that will, for example, build out solar wind and 0:18:48.480 --> 0:18:52.280 pair storage with that and have long term contracts with utilities. 0:18:52.680 --> 0:18:56.080 And the third group are the large industrial users. 0:18:56.119 --> 0:19:00.560 So our investors include people like Saudi Aramco HP, the 0:19:00.640 --> 0:19:03.959 largest mining group in the world, and groups that are 0:19:04.000 --> 0:19:06.800 looking to make their own clean energy transition or that 0:19:06.920 --> 0:19:09.840 have desires to make streen hydrogen for example, where you 0:19:09.880 --> 0:19:13.560 can make that using solar an electoralizer, but you need. 0:19:13.520 --> 0:19:17.520 Long duration storage. So because our technology is focus. 0:19:17.160 --> 0:19:21.080 Across a series of durations, we can actually meet a 0:19:21.080 --> 0:19:24.360 lot of those needs and hence serving those three market segments. 0:19:24.560 --> 0:19:27.920 So let's go back to the gravity storage solution thing. 0:19:27.960 --> 0:19:29.720 So this is from an article here at bo boomer 0:19:29.760 --> 0:19:31.320 from a few years ago, but it describes it and 0:19:31.320 --> 0:19:34.320 I feel like accurately and pretty well. An electric crane 0:19:34.480 --> 0:19:37.760 hoists up blocks of concrete and stacks them into a 0:19:37.840 --> 0:19:40.639 tower when power is plentiful. When power is needed, it 0:19:40.720 --> 0:19:44.560 uses gravity to take the structure apart brick by brick, 0:19:44.680 --> 0:19:47.919 and the weight of the descending blocks converts kinetic energy 0:19:47.960 --> 0:19:51.320 into electricity. That sounds really hard and complicated. 0:19:53.000 --> 0:19:55.359 You know what, gravity has been around for a while. 0:19:55.640 --> 0:19:58.000 I tell people it's not an idea, it's the law. 0:19:58.160 --> 0:20:01.920 So the whole physics of moving weights up and down, 0:20:02.000 --> 0:20:04.399 it's been around, but you're right to do that in 0:20:04.440 --> 0:20:07.639 a way that's economical to do that now with software 0:20:07.680 --> 0:20:11.520 where we can automate that entire process and dynamically look 0:20:11.560 --> 0:20:15.439 at the timing and dynamically accelerate and accelerate that lifting 0:20:15.480 --> 0:20:19.520 and lowering. And also we actually don't use concrete, so 0:20:19.560 --> 0:20:22.520 we avoid it because it's not really sustainable. It's one 0:20:22.520 --> 0:20:25.000 of the contributors I think seven to eight percent to 0:20:25.080 --> 0:20:28.359 greenhouse gases. So we actually have a material science team 0:20:28.880 --> 0:20:31.960 and worked with SEMX to use dirt and even waste 0:20:32.040 --> 0:20:35.680 materials like coal ash, even concrete debris are the things 0:20:35.720 --> 0:20:39.919 that would go into landfills. We can utilize that to 0:20:40.000 --> 0:20:42.560 make these large blocks that are twenty five metric tons, 0:20:42.600 --> 0:20:45.640 So we try and avoid materials that are not sustainable 0:20:46.400 --> 0:20:48.760 to make those very same blocks. 0:20:49.680 --> 0:20:53.000 So, how is I guess your business changing to try 0:20:53.040 --> 0:20:57.400 to meet the changing sources and uses of energy these days. 0:20:59.000 --> 0:21:01.480 It's a great question and it is one of the challenges. 0:21:01.520 --> 0:21:07.280 It's definitely focused globally on countries wanting to achieve energy independence, 0:21:07.320 --> 0:21:10.080 and to do that, you need to be able. 0:21:09.840 --> 0:21:10.960 To produce locally. 0:21:11.040 --> 0:21:14.760