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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.

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Speaker 2: This is Bloomberg Business Week Inside from the reporters and

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Speaker 2: editors who bring you America's most trusted business magazine, plus

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Speaker 2: global business, finance and tech news. The Bloomberg Business Week

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Speaker 2: Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.

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Speaker 1: We are once.

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Speaker 3: Again starting with China today because for a third day

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Speaker 3: we're looking at headlines over stimulus, got those overnight. It is,

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Speaker 3: of course, the world's second largest economy. What happens in

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Speaker 3: China tells us so much about what's going on in

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Speaker 3: the global economy. China's gross trajectory being closely watched around

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Speaker 3: the world. This is something Nobelle laureate and economist Joseph

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Speaker 3: Stieglitz singled out earlier today at the Bloomberg New Economy Forum.

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Speaker 4: Unfortunately, we're a real challenge for the emerging markets and

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Speaker 4: developing countries is going to be China because we, you know,

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Speaker 4: and bypartisan view is that China represents a risk or

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Speaker 4: a threat, a threat and you know, I think at

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Speaker 4: this point there's very little evidence of that.

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Speaker 3: That of course, was Nobel Laurie Joseph Stieglitz at the

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Speaker 3: Bloomberg New Economy Forum happening today. So talking about China.

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Speaker 3: He often talks about what's going on around the world,

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Speaker 3: but certainly emphasizing what's going on there.

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Speaker 5: Yeah, and I look, the.

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Speaker 6: Question of a risk or a threat is an interesting

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Speaker 6: dilemma to look at in terms of the announcements that

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Speaker 6: we had today from the Chinese Center Bank cutting interest

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Speaker 6: rates at one year policy loans by thirty basis points.

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Speaker 6: That's by the most on record in terms of a

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Speaker 6: scale of a cut. This follows that package of teramulus

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Speaker 6: that we had announced by the PBOC governor yesterday as well.

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Speaker 6: This all with a backdrop of the questions continuing to

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Speaker 6: be asked about whether or not China is going to

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Speaker 6: meet that growth target of around five percent this year.

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Speaker 6: Let's get into that. We've got Bloomberg New Senior Editor

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Speaker 6: Chris Ansy with us from our Boston bureau. Chris, great

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Speaker 6: to have you on. Just talk us through the announcements

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Speaker 6: that we had today and how that fits into what

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Speaker 6: we learned yesterday from the PBOC governor.

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Speaker 7: Well, the one year loan rate was widely expected. This

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Speaker 7: was a follow through from the shock and awe as

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Speaker 7: it were on Tuesday of announcements of a host of

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Speaker 7: different interest rate cuts, a reduction in the banks required

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Speaker 7: reserve ratio, and other monetary policy initiatives. As you say,

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Speaker 7: this was the biggest on record reduction of this one

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Speaker 7: year policy rate. But I would also just focus on

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Speaker 7: the magnitude there that was thirty basis points, and the

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Speaker 7: benchmark seven day rate that was announced on Tuesday that

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Speaker 7: was cut by just twenty basis points. You know, for

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Speaker 7: those of us who are used to monitoring the Federal

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Speaker 7: Reserve or ECB, and we talked about fifty or seventy

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Speaker 7: five being magnitudes of scale, twenty and thirty really doesn't

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Speaker 7: sound like a whole lot.

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Speaker 3: Is that why I was looking at the NAZEC Golden

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Speaker 3: Dragon China Index, those Chinese names that trade in the

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Speaker 3: United States yesterday at more than nine percent today giving

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Speaker 3: back about two percent in a market that's got a

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Speaker 3: fair amount of no direction, if you will, but nonetheless

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Speaker 3: giving back. So not as impressive as what we've seen

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Speaker 3: Chris as of late in terms of doing something to

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Speaker 3: change the narrative in China.

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Speaker 7: Well, I think our colleagues at Bloomberg Economics had a

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Speaker 7: great way of framing it. They talked about this as

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Speaker 7: a growth bump, but not an economy fix. So it's

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Speaker 7: enough to move the needle maybe a little bit on

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Speaker 7: GDP growth, but the bigger problems that China has the

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Speaker 7: property sector, very low consumer confidence levels that never recovered

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Speaker 7: since the pandemic hit, and consumer spending that remains, you

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Speaker 7: know very much, you know, on a weak trend. You've

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Speaker 7: got demographics, all of these kinds of things. This is

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Speaker 7: not going to be addressed by a twenty or thirty

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Speaker 7: basis point rate cut.

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Speaker 3: And yet though Chris, as you well know, it's not

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Speaker 3: the only thing that's happened over a series of time,

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Speaker 3: not just this past week, but over months, and some

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Speaker 3: would say over the last year or so. So what

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Speaker 3: is the fix for China? Is there one? Is it

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Speaker 3: just going to be a series of many, many moves

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Speaker 3: already done to come before we see China maybe the

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Speaker 3: growth story change, or is it a case that China

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Speaker 3: is a very large economy and moving the nut and

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Speaker 3: fixing the real estate thing is something that may take

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Speaker 3: much much longer to change, or maybe maybe not at all.

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Speaker 7: Yeah, all good questions and questions that China watchers are

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Speaker 7: all asking. There does seem to be a kind of

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Speaker 7: a universality of expect expectation that there will be some

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Speaker 7: sort of next step on the fiscal front, something to

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Speaker 7: try to jolt consumer confidence, something more concerted, perhaps to

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Speaker 7: fix the property market. And you know, we'll see if

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Speaker 7: that eventuates. But you know, you've got the economists saying

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Speaker 7: that the scale of response really needs to be very large,

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Speaker 7: I mean potentially in the trillions of dollars to really

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Speaker 7: address the property market. And we've had no real sign

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Speaker 7: yet that Chi Jinping and his lieutenants are prepared to

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Speaker 7: endorse you know, that big a fiscal stimulus.

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Speaker 6: Yeah, well, that's one of the really interesting questions, isn't it.

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Speaker 6: But you know, every time that we talk about stimulus

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Speaker 6: in China, it's that question of essentially, has there been

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Speaker 6: a shift in position from cheating Ping into what he's

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Speaker 6: willing to do to stimulate the economy. I'm looking at

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Speaker 6: a story here about one off cash handouts being given

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Speaker 6: to people in extreme poverty. That's a direct date measure.

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Speaker 6: It's not going to do anything to boost consumer spending

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Speaker 6: on a macro level. But is that perhaps an indication

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Speaker 6: of the reticence that now exists in China to try

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Speaker 6: and put more money from the fiscal side in.

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Speaker 7: I think that's exactly right. And you know, some important

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Speaker 7: context to keep in mind here is that the parts

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Speaker 7: of the economy that Chi Jinping particularly cares about new

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Speaker 7: energy vehicles, renewables, you know, solar, wind, nuclear power generations,

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Speaker 7: the defense industry, all of those are going gangbusters. In fact,

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Speaker 7: the latest monthly data showed double digit increases in areas

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Speaker 7: of the economy. The new productive forces that Chigent Ping

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Speaker 7: has said are the priority for his government, all of

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Speaker 7: those are doing very well. Indeed, so it's not entirely

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Speaker 7: clear that he particularly concerned that retail sales are only

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Speaker 7: growing at a two percent plus year on your pace,

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Speaker 7: rather than the nine percent we saw a pre pandemic.

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Speaker 3: I do also wonder a very different China going forward.

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Speaker 3: When I see that they're going to do different initiatives

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Speaker 3: or the rules seem to change. Foreign investors have to

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Speaker 3: be looking perhaps at China very differently going forward. And

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Speaker 3: yet I don't know that we've seen dramatic outflows from

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Speaker 3: global companies or moving their operations elsewhere, or their involvement elsewhere.

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Speaker 3: But I do wonder what are we seeing in terms

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Speaker 3: of investment flows that we really think about China's role,

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Speaker 3: at least in the global marketplace as being something very

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Speaker 3: very different.

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Speaker 7: Well, direct investment into China has turned out to a

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Speaker 7: net outflow in recent quarters. As you say, it's not

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Speaker 7: a huge outflow. Some of this might be simply reflecting

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Speaker 7: less in terms of retained profits being patriated abroad. So

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Speaker 7: it's not a wholesale kind of shunning of China. But

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Speaker 7: at the same time, it is a shift in direction.

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Speaker 7: And if you look at the recent announcements of troubles

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Speaker 7: with China sales on the part of BMW, on the

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Speaker 7: part of Mercedes, you look at the Calvin Klein Maker

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Speaker 7: running into problems with the Chinese authorities with regard to

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Speaker 7: sourcing cotton from Shinjiang, China is a much less attractive

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Speaker 7: place for a whole host of reasons than it was

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Speaker 7: you say, you know, even as much as few as

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Speaker 7: five years ago.

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Speaker 3: As we say often, we're living in interesting times and

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Speaker 3: changing times. Chris Antsy, Thank you so much, so appreciated,

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Speaker 3: Bloomberg News Senior Editor, Chris Antsy. There, all right, now,

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Speaker 3: we want to get to a story that is getting

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Speaker 3: a lot of attention on the Bloomberg today.

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Speaker 6: Yeah, look, this is a question about trust. Once upon

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Speaker 6: a time, the story was a growing economy lifted everyone,

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Speaker 6: the whole rising tide, lifting all boats things. These days, though,

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Speaker 6: the rich only seem to be rising, and the presentage

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Speaker 6: of Americans are told gallup that they have a great dealer.

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Speaker 6: Quite a lot of confidence in major companies has dropped

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Speaker 6: from thirty percent in nineteen ninety nine to sixteen percent

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Speaker 6: this year. Writing about their republic of distrust is Bloomberg Opinion.

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Speaker 6: Senior conlist Beth Coot is here with us in studio. Beth,

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Speaker 6: great to see you, Thanks very much for joining us.

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Speaker 3: It's depressing.

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Speaker 6: This is depressing. But like, lay it out first, why

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Speaker 6: do we need to trust companies?

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Speaker 8: I mean, I think that this is a huge problem, right,

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Speaker 8: This is what if you don't If people don't trust business,

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Speaker 8: if they don't trust companies, our economy basically can't run.

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Speaker 8: It can't function. People need to believe that big institutions

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Speaker 8: in general have their best interested heart, and I think

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Speaker 8: that we're seeing that's just not the case in business

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Speaker 8: and a lot of other institutions as well.

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Speaker 3: Well, let's talk about this because I do think that

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Speaker 3: you know you and I feel like Stephen. Over the

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Speaker 3: last couple of days, I've been talking about this, but

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Speaker 3: I do think about we understand the push back in

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Speaker 3: politics where people feel like government doesn't represent them anymore,

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Speaker 3: and that goes hand in hand. They feel like there

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Speaker 3: is an economy and marketplace that doesn't include them anymore.

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Speaker 3: And I feel like the idea of companies taking care

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Speaker 3: of employees, is it maybe there anymore?

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Speaker 1: Us?

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Speaker 3: You know, we work for a really great company. I'm

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Speaker 3: going to lay it out fully transparent. We say it

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Speaker 3: all the time, but that doesn't many people don't feel

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Speaker 3: that way.

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Speaker 8: I think that's true, and you know, one of the

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Speaker 8: questions I tried to answer is why do people believe that?

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Speaker 8: Why do they think that that business has their best

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Speaker 8: interest at heart? And I think, if you what we

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Speaker 8: really looked at was this sort of twenty five year

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Speaker 8: period after World War Two when you know, rising tides

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Speaker 8: really did seem to lift all boats right. Everybody prospered,

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Speaker 8: you know, obviously some more than others. It wasn't a

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Speaker 8: perfect era, but the gap between the wealthiest Americans and

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Speaker 8: the poorest actually closed. And for a number of factors

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Speaker 8: at play there. But I think a lot of people

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Speaker 8: look back to this period and want to return to it,

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Speaker 8: and there's some question is that even possible.

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Speaker 6: Yeah. I mean, look, there's even the prominent examples of

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Speaker 6: of scandals at companies. You able to think about everything

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Speaker 6: that happened to Boeing this year, for example, that shifts

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Speaker 6: how people think about a company. I mean, how important

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Speaker 6: is this for companies to get the handle on as well?

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Speaker 8: I think it's huge. I really think it's huge. I mean, yeah,

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Speaker 8: I point to some of those in the piece right

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Speaker 8: and ron financial crisis. There's just one after another where

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Speaker 8: people not only feel like it means that they can't

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Speaker 8: trust business, but that the rules don't apply fairly to everybody,

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Speaker 8: that somehow the wealthiest leave unscathed. Well, it's sort of

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Speaker 8: those at the bottom that bear the front of it.

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Speaker 3: What about things like productivity gains technology helping us out

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Speaker 3: unions where workers maybe had more of a voice at

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Speaker 3: the negotiating table, that we used to be an economy

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Speaker 3: that actually made a lot of stuff here before we

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Speaker 3: started outsourcing it. We've talked with the folks who talk

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Speaker 3: about all the consulting companies, said hey, here's a better idea.

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Speaker 3: Outsource it safe costs, but workers have been penalized I

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Speaker 3: think as a result here.

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Speaker 8: Absolutely, And I think again that sort of golden era,

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Speaker 8: that twenty five year period, unions were in their heyday.

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Speaker 4: You know.

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Speaker 8: I think we people coming back from the front. We

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Speaker 8: had a you know, an influx of workers. There was

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Speaker 8: a lot of demand for goods. We were making things

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Speaker 8: here in this country, as you mentioned, and I think

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Speaker 8: that really, you know, there was a very progressive tax code.

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Speaker 8: So I think that there were all these factors at play.

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Speaker 8: And you know, one one historian I was talking to said,

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Speaker 8: you can't ring that belt.

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Speaker 1: Whats right?

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Speaker 8: Like it was just sort of this confluence of events

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Speaker 8: that led to this era. And even people who didn't

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Speaker 8: weren't even alive during that time, I think do idolize

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Speaker 8: that period, and it's affected the way we do think

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Speaker 8: about how business and the economy should work.

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Speaker 6: It's interesting to think about the timeline over this as well,

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Speaker 6: because when we look at the polling from Gallop on

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Speaker 6: where trusting companies is through good times and in bad,

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Speaker 6: it's still been pretty weak. Every recently is like this.

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Speaker 6: It's not a question of when the economy is doing badly. Yeah,

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Speaker 6: that that's the moment when just trust spikes, there seems

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Speaker 6: to be something that's lasting kind of as I say it,

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Speaker 6: you're good times in bad yeah, And.

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Speaker 8: I think part of this is people feel like there

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Speaker 8: there is this promise, right, I'm going to work hard

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Speaker 8: and that should mean that I can, you know, buy

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Speaker 8: a house, May we send my kids to college, that

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Speaker 8: the next generation should prosper more than minded And I

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Speaker 8: think we're not seeing that.

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Speaker 9: You know.

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Speaker 8: One of the things I looked at as well is

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Speaker 8: CEO pay and the ratio of CEO to work our

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Speaker 8: compensation has only that gap has just increased exponentially. So

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Speaker 8: there's also this sense of you know, why am I

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Speaker 8: struggling so much when those at the very top just

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Speaker 8: seem to be getting paid more.

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Speaker 3: It's really wild. And you put this in the story.

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Speaker 3: And we used to cover the business Roundtable. We would

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Speaker 3: do broadcasts from there. But this whole idea of laying

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Speaker 3: out a few years ago, we talked about it all

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Speaker 3: stakeholders matter, yes, investors, yes.

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Speaker 6: Custom stakeholder capitalism that.

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Speaker 3: Right, Like, where is that? And I feel like we

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Speaker 3: have constant conversations with executives that companies say like our

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Speaker 3: employees matter. I mean they can't do it without them.

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Speaker 8: Right right, And I think this is a little bit.

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Speaker 8: I think there is this of hypocrisy where we have

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Speaker 8: seen a lot of companies retreat on some of these

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Speaker 8: promises very quickly when under pressure from you know, certain

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Speaker 8: conservative groups, right DEI ESG. We've seen a real role

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Speaker 8: back there. And it makes people wonder, did you actually

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Speaker 8: ever care about this or was this you know, simply

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Speaker 8: good marketing.

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Speaker 6: But that that's also, I think such an interesting point

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Speaker 6: because companies moved into this space and started taking positions

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Speaker 6: on it as they failed to importance and they thought

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Speaker 6: would drive customer loyalty.

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Speaker 3: Did a lot of the pandemic and the murder of

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Speaker 3: George Floyd.

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Speaker 10: But is that is that?

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Speaker 6: I mean, is that gone now? Is that just not

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Speaker 6: possible anymore?

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Speaker 8: I do think that companies are saying, Okay, maybe maybe

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Speaker 8: we went a little too far on this. Maybe we

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Speaker 8: don't want to take that, Maybe we don't want to

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Speaker 8: take a position, you know. I think the hard thing

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Speaker 8: is in this era we are so polarized, there is

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Speaker 8: no such thing as a neutral position. Right. If you

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Speaker 8: take a position, you're gonna someone's gonna feel like, you know,

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Speaker 8: this is against my beliefs. But if you don't, you're

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Speaker 8: also sort of taking a position. So that's a tricky line.

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Speaker 3: Beth, gotta ask, because we've got we've got We're going

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Speaker 3: to talk with a very senior exec at Cisco Systems

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Speaker 3: coming up. What do you think we should be asking

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Speaker 3: companies about this?

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Speaker 8: Yeah, if they are retreating, why you know, why are

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Speaker 8: why are we rolling back on some of these positions?

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Speaker 8: But also, you know, what do they hear from their workers?

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Speaker 8: Do are they feeling some of this erosion?

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Speaker 6: And the war for talent right is going to be

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Speaker 6: a key factor for that as well.

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Speaker 1: Absolutely, all right, good stuff.

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Speaker 3: As we said, it's among the most read stories of

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Speaker 3: the Bloomberok Beth, thank you as always, Bethcohit She's Bloomberg

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Speaker 3: Opinion senior columnist talking is about the Republic of Distress.

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Speaker 6: Yeah, you can find it on Bloomberg dot com for

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Speaker 6: it Slash Opinion as well if you want to read

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Speaker 6: the piece in full. Bath great to have you with

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Speaker 6: us in studio. Look, this is a question that I

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Speaker 6: think comes through so many of the conversations were at

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Speaker 6: a plaza yesterday talking to senior exacts as well. It

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Speaker 6: feeds into how people are perceiving companies too. I'm not

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Speaker 6: something that's you know, it means you're going to got

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Speaker 6: questions ast on that as well.

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Speaker 3: Yeah, and you know, important issues, but you know, employees

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Speaker 3: feeling taken care of. We talk increasingly too about pensions

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Speaker 3: going away. Right, People used to retire and they didn't

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Speaker 3: have to worry about things, but that's not necessarily given

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Speaker 3: anymore by a lot of companies.

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Speaker 2: You're listening to the bloom Business Week podcast. Catch us

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Speaker 2: live weekday afternoons from two to five pm Eastern Listen

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Speaker 2: on Apple car Play and then brought auto with a

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Speaker 2: Bloomberg Business app, or watch us live on YouTube.

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Speaker 3: We mcro call. It was just a couple of weeks ago,

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Speaker 3: Tim and I actually caught up with Accenture's global talently.

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Speaker 3: We talked about ais impact on work workers and the

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Speaker 3: workforce on that Accenture is part of a consortium along

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Speaker 3: with Cisco Systems on a build out of the AI

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Speaker 3: enabled workforce and the information and communication technology or I

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Speaker 3: see T space and our next guests definitely had some

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Speaker 3: thoughts on that. We're so delighted at back with us

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Speaker 3: in studio friend Casudas, she's executive vice president Chief People,

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Speaker 3: Policy and Purpose Officer over at Cisco Systems. As I

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Speaker 3: said here in studio, how are you good.

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Speaker 11: It's wonderful to be back.

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Speaker 3: It's great to have you here. A lot of things

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Speaker 3: we want to get to. First up, I want to

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Speaker 3: ask you, just as I often do the macro business environment,

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Speaker 3: how do you see things going right now?

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Speaker 11: So it's funny because I think there's so much going

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Speaker 11: on in the world at the moment, but when we

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Speaker 11: look at the macro business environment, what we see is

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Speaker 11: a tremendous amount of focus still on technology. I think

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Speaker 11: today the realization that we're hearing from our customers is

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Speaker 11: that cybersecurity AI can't wait, and so I think there's

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Speaker 11: a lot of learning. I think there's growth. I think

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Speaker 11: anytime you go into an election season there's some hesitancy.

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Speaker 11: And I will tell you around the world this year

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Speaker 11: sixty elections, and there are countries where we see projects

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Speaker 11: being held as people wait to see what happens in

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Speaker 11: those countries.

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Speaker 3: But just as in terms off of the US elections, you.

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Speaker 11: Know what, it's interesting from a US perspective, I don't

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Speaker 11: see this much. But I think part of that is

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Speaker 11: because when you're talking about cybersecurity. When you're talking about

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Speaker 11: the build out of infrastructure, it is pretty critical. I

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Speaker 11: think some of the bigger projects that we're looking at

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Speaker 11: around the world, you need to have a head of

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Speaker 11: state and government that really believes and commits to the change.

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Speaker 11: And so I think in those places you are going

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Speaker 11: to see a little bit of a pause as well.

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Speaker 6: Are those clients the willing to put money into this

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Speaker 6: as well? Are they kind of up for spending to

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Speaker 6: try and catch that innovation?

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Speaker 1: Yeah?

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Speaker 11: You know, it's funny. I see two things at the moment.

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Speaker 11: So the first is I see around the world this

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Speaker 11: belief that AI creates amazing opportunity, and so you have

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Speaker 11: countries now around the world that are even creating AI

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Speaker 11: ministers that are thinking about how do we capture the opportunity,

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Speaker 11: and fortunately, I think a lot of them are also

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Speaker 11: thinking about how do we ensure that we don't leave

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Speaker 11: a subset of the community behind, and so I think

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Speaker 11: that's a big part of the focus. I think many

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Speaker 11: governments and companies are still sorting what does that build

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Speaker 11: out need to look like? What are the use cases

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Speaker 11: really that we'll be using over the next twelve months.

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Speaker 3: You know, you mentioned communities feeling left behind. And we

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Speaker 3: just talked about a Bloomberg story about how Americans trust

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Speaker 3: in big business went from bad to worse, and a

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Speaker 3: lot of it has to do with workers feeling left behind.

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Speaker 3: What are you hearing about that on your front? We've

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Speaker 3: talked with you a lot about people who issues employees shoes.

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Speaker 3: This is your world. What do you hear back in

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Speaker 3: terms of feedback from your workforce about what's important and

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Speaker 3: maybe why they maybe feel behind. Not yours particular, but

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Speaker 3: in general.

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Speaker 11: You know what, I think it's real. I think that

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Speaker 11: anytime you see such significant changes in technology that will

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Speaker 11: truly impact roles, I think it's natural for people to say,

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Speaker 11: will I be relevant? What is changing?

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Speaker 1: But it's funny.

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Speaker 11: I think I would say around eighteen months ago it

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Speaker 11: was a bit more negative. I think the delta is

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Speaker 11: that today our employees are playing with the technology, they're experimenting,

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Speaker 11: they're learning that in many cases the technology will make

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Speaker 11: them better. I do think we have to admit that

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Speaker 11: there's areas where jobs are going to go away.

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Speaker 3: But letting go a bunch of workers you talked about

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Speaker 3: in your earnings report, and a lot of it said

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Speaker 3: it wasn't financially related, right or profitability related, but it

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Speaker 3: was that you guys were having a strategy shift.

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Speaker 1: It was a mix of both.

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Speaker 3: It was a mix of both.

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Speaker 11: And I think that it's important for us to always

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Speaker 11: focus on growth innovation, what we're going to need moving forward.

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Speaker 11: And I think the commitment that we need to make

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Speaker 11: to our people is that we're going to help them

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Speaker 11: understand the changes that are coming and help them build

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Speaker 11: the skills that they need. And it's funny it ties

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Speaker 11: to where you started, Carol, But when we did that

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Speaker 11: AI Consortium body of work with Accenture and Google and

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Speaker 11: Microsoft IBM, what we found was that all of us

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Speaker 11: collectively believe that the large majority of technical roles are

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Speaker 11: going to shift, and what we can see is that

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Speaker 11: some of the skills and the task will evolve. The

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Speaker 11: beautiful thing is when you have that blueprint, it allows

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Speaker 11: you to start to train and prepare your people. And

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Speaker 11: that's the commitment that we're making. And I think Cisco

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Speaker 11: and all of us need to do a better job

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Speaker 11: of helping people get ready for what's coming.

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Speaker 6: But how much you need to prepare it in budget

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Speaker 6: terms for training as well. Surely some of these people.

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Speaker 6: It's a question of hiring in different skill sets. But

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Speaker 6: if you're going to invest in adopting, that's a commitment financially.

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Speaker 11: It's so funny because I think in some cases retraining

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Speaker 11: your people is a lot less expensive than hiring from

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Speaker 11: the outside, and I think it's it's a bit of

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Speaker 11: a win win. I think what's so different that we're

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Speaker 11: going to have to figure out how to scale to

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Speaker 11: both from a budget perspective, but maybe even more so

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Speaker 11: from a time perspective, is that we're not talking about

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Speaker 11: freshening up your skills once a year.

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Speaker 6: What we're talking it's not a power points learning.

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Speaker 11: Yeah, that's and we're talking about maybe it's weekly, maybe

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Speaker 11: it's monthly. Maybe there's one day a month where we're

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Speaker 11: going to have to all go through training to be

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Speaker 11: able to leverage the technology that's in front of us.

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Speaker 11: And I think it's the mindset shift that's actually going

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Speaker 11: to be bigger than the budget requirement.

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Speaker 3: I feel like we're hearing that a lot. I mean,

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Speaker 3: we do it sort of as an organization here that

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Speaker 3: there's whether it's something going on in markets and so

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Speaker 3: on and so forth. Having said that, then do workers

440
00:21:54,840 --> 00:21:55,760
Speaker 3: need a college degree.

441
00:21:57,160 --> 00:22:00,320
Speaker 11: So this transition, and it's funny because so many of

442
00:22:00,359 --> 00:22:04,760
Speaker 11: the transitions from a workforce perspective were there already and

443
00:22:05,200 --> 00:22:09,200
Speaker 11: the technology is really bringing it to fruition. What we've

444
00:22:09,280 --> 00:22:12,880
Speaker 11: seen over the last five years is that you don't

445
00:22:13,000 --> 00:22:16,639
Speaker 11: need a college degree the way that you did in

446
00:22:16,720 --> 00:22:19,320
Speaker 11: the past. I remember a time when at Cisco, if

447
00:22:19,359 --> 00:22:21,680
Speaker 11: you didn't have a college degree, you couldn't apply for

448
00:22:21,800 --> 00:22:24,439
Speaker 11: a role. I think Cisco and so many other companies

449
00:22:24,520 --> 00:22:27,440
Speaker 11: moved away from that when we had a talent shortage

450
00:22:27,480 --> 00:22:30,480
Speaker 11: because we realized there's amazing skills that are out there,

451
00:22:30,560 --> 00:22:34,199
Speaker 11: and if you can invest in training and onboarding talent,

452
00:22:35,040 --> 00:22:38,120
Speaker 11: you can get to tremendous talent. And so I think

453
00:22:38,320 --> 00:22:41,639
Speaker 11: that shift has started. I think it's very possible with

454
00:22:41,760 --> 00:22:43,800
Speaker 11: what we're talking about that you're going to see an

455
00:22:43,840 --> 00:22:47,240
Speaker 11: emergence of multiple paths for talent, and I think that's

456
00:22:47,640 --> 00:22:49,000
Speaker 11: great for the US and beyond.

457
00:22:49,280 --> 00:22:51,480
Speaker 6: That's something that actually links into while you're here in

458
00:22:51,520 --> 00:22:52,919
Speaker 6: New York for the globe, but cites an event as well,

459
00:22:52,960 --> 00:22:54,639
Speaker 6: because that's one of the things that Cisco is involved

460
00:22:54,680 --> 00:22:58,480
Speaker 6: in with that organization, fostering new talent as well. I

461
00:22:58,600 --> 00:23:00,600
Speaker 6: wonder you know, in an environ I and where we're

462
00:23:00,600 --> 00:23:04,040
Speaker 6: talking about perceptions of where companies are positioning themselves. How

463
00:23:04,119 --> 00:23:05,960
Speaker 6: important is it for a company like Cisco to be

464
00:23:06,040 --> 00:23:07,560
Speaker 6: involved in Global citizens?

465
00:23:08,320 --> 00:23:10,720
Speaker 11: You know, I think at this moment we see a

466
00:23:10,840 --> 00:23:13,840
Speaker 11: couple of really important trends. And so the first is

467
00:23:14,320 --> 00:23:18,879
Speaker 11: there's this realization that it's through public private partnerships and

468
00:23:19,000 --> 00:23:24,119
Speaker 11: in many cases including nonprofits that have incredible capability and scale,

469
00:23:24,880 --> 00:23:28,000
Speaker 11: that we're having the biggest impact on communities. So that's

470
00:23:28,040 --> 00:23:30,200
Speaker 11: the first thing. The second thing that I would say

471
00:23:30,320 --> 00:23:33,640
Speaker 11: is I see both employees and candidates wanting to work

472
00:23:33,680 --> 00:23:36,159
Speaker 11: for companies that are doing good. And then from a

473
00:23:36,240 --> 00:23:40,280
Speaker 11: Cisco perspective, because of our technology, because we drive connection,

474
00:23:41,200 --> 00:23:43,880
Speaker 11: one of the biggest ways that we can impact poverty

475
00:23:43,920 --> 00:23:47,360
Speaker 11: as an example, which is where Global Citizen truly focuses

476
00:23:48,040 --> 00:23:51,560
Speaker 11: is around education. And so this year, Cisco will have

477
00:23:51,720 --> 00:23:56,200
Speaker 11: trained twenty three and a half million students in technology

478
00:23:56,240 --> 00:23:58,560
Speaker 11: over the last twenty five years, and it's a great

479
00:23:58,600 --> 00:24:01,840
Speaker 11: way for us to really partner with Global Citizen and

480
00:24:01,960 --> 00:24:03,960
Speaker 11: having this impact around the world. And so I think

481
00:24:04,000 --> 00:24:07,960
Speaker 11: it's critical and more and more I see our corporate

482
00:24:08,080 --> 00:24:10,440
Speaker 11: partners out there doing a lot of good.

483
00:24:11,080 --> 00:24:12,880
Speaker 3: Come back soon because I feel like there's stuff too.

484
00:24:13,000 --> 00:24:15,159
Speaker 3: When you talk about communities around the world and the

485
00:24:15,280 --> 00:24:18,920
Speaker 3: education emerging world, love to dig even deeper into that.

486
00:24:19,240 --> 00:24:21,480
Speaker 3: Friend as always, thank you so much, really appreciate it.

487
00:24:22,960 --> 00:24:26,800
Speaker 2: You're listening to the Bloomberg Business Week podcast. Listen live

488
00:24:26,920 --> 00:24:30,080
Speaker 2: each weekday starting at two pm Eastern on applecar Play

489
00:24:30,160 --> 00:24:32,960
Speaker 2: and Androyd Auto with the Bloomberg Business App. You can

490
00:24:33,040 --> 00:24:36,280
Speaker 2: also listen live on Amazon Alexa from our flagship New

491
00:24:36,359 --> 00:24:39,960
Speaker 2: York station, Just Say Alexa playing Bloomberg eleven thirty.

492
00:24:41,200 --> 00:24:43,360
Speaker 3: Hey, there's even a local New York City landmark. It's

493
00:24:43,359 --> 00:24:45,800
Speaker 3: got its own eighty three foot climbing wall that is

494
00:24:45,840 --> 00:24:49,119
Speaker 3: among the New York City pricey properties that can be

495
00:24:49,359 --> 00:24:54,320
Speaker 3: yours or yours for the right price. As for we

496
00:24:54,440 --> 00:24:57,640
Speaker 3: meet our mortals, we're just excited that rates are coming

497
00:24:57,680 --> 00:25:01,160
Speaker 3: down from mortgages because mortgage refinancings we have seen them

498
00:25:01,440 --> 00:25:03,359
Speaker 3: take up surging for a second week in a row.

499
00:25:03,480 --> 00:25:06,160
Speaker 3: So we wanted to talk real estate specifically what's going

500
00:25:06,200 --> 00:25:08,679
Speaker 3: on with the high end New York City residential real

501
00:25:08,800 --> 00:25:11,639
Speaker 3: estate market. And back with us is Louise Phillips Forbes.

502
00:25:11,760 --> 00:25:14,240
Speaker 3: She's an agent, real estate broker at Brown Harris Stevens.

503
00:25:14,320 --> 00:25:17,200
Speaker 3: Back here in our interactive Brokers studio. How are you.

504
00:25:17,680 --> 00:25:20,240
Speaker 1: I'm great, longtime no see, I have long time no see.

505
00:25:20,880 --> 00:25:23,040
Speaker 3: How are things going? How are things changed from we

506
00:25:23,119 --> 00:25:24,200
Speaker 3: just talked a little while ago.

507
00:25:24,760 --> 00:25:27,600
Speaker 1: Like I said, when I was here last fastened your seatbelt.

508
00:25:27,800 --> 00:25:29,960
Speaker 1: It just took a little bit longer for the Feds

509
00:25:30,040 --> 00:25:33,440
Speaker 1: to respond and be cautious in the dropping and the

510
00:25:33,560 --> 00:25:36,240
Speaker 1: process that they've given. Since October of twenty twenty three,

511
00:25:36,600 --> 00:25:39,399
Speaker 1: we have a shift in the buying power of literally

512
00:25:39,520 --> 00:25:43,600
Speaker 1: seventy thousand dollars for an individual today and that's so

513
00:25:43,840 --> 00:25:47,720
Speaker 1: what you would have paid in October of twenty twenty three.

514
00:25:48,080 --> 00:25:53,240
Speaker 1: Today it is upwards of eleven hundred dollars difference. It's cheaper,

515
00:25:53,320 --> 00:25:56,399
Speaker 1: you're buying that much more buying power. So it's exciting

516
00:25:56,480 --> 00:25:59,280
Speaker 1: to watch, and the buyers are out and active.

517
00:26:00,240 --> 00:26:02,479
Speaker 6: I'm always curious, as you know, we if you're going

518
00:26:02,520 --> 00:26:04,240
Speaker 6: to buy a home, I wonder how close you really

519
00:26:04,280 --> 00:26:05,960
Speaker 6: are watching the fad to say, you know, as soon

520
00:26:06,000 --> 00:26:07,520
Speaker 6: as the fad rights are caught, then I'm going to

521
00:26:07,600 --> 00:26:09,200
Speaker 6: jump into the house. Is there a really kind of

522
00:26:09,240 --> 00:26:11,800
Speaker 6: a as quick a function. Are you getting calls after

523
00:26:11,880 --> 00:26:13,359
Speaker 6: the you know, Jerome pals Listen.

524
00:26:13,800 --> 00:26:18,280
Speaker 1: Cash has been king for some time, but cash can't

525
00:26:18,400 --> 00:26:21,760
Speaker 1: compete when you have five people looking at the same property,

526
00:26:21,880 --> 00:26:24,639
Speaker 1: whereas it was two in a one week and we

527
00:26:24,800 --> 00:26:28,119
Speaker 1: have twenty in a day. I did twenty six buyer

528
00:26:28,240 --> 00:26:31,040
Speaker 1: tours in a two week period. My team and myself

529
00:26:31,160 --> 00:26:32,960
Speaker 1: is that a lot, I don't know for perspective, over

530
00:26:33,040 --> 00:26:37,600
Speaker 1: a hundred appointments of apartments for individual people, and that

531
00:26:38,320 --> 00:26:42,879
Speaker 1: performed for us. I'm three times higher buyer transactions than

532
00:26:42,920 --> 00:26:46,440
Speaker 1: i am exclusives. That's that's pretty significant and that started

533
00:26:46,880 --> 00:26:49,240
Speaker 1: the conversations that I had talking to the beginning of

534
00:26:49,240 --> 00:26:52,560
Speaker 1: the year. We had a huge surge unexpectedly in the

535
00:26:52,640 --> 00:26:56,160
Speaker 1: first quarter because people didn't want to compete with all

536
00:26:56,200 --> 00:26:58,160
Speaker 1: the buyers that are in the market. Now it's already

537
00:26:58,200 --> 00:27:02,320
Speaker 1: affecting our rental market, and there's an efficiency.

538
00:27:02,560 --> 00:27:03,879
Speaker 3: What what's going on in the rental markets?

539
00:27:04,480 --> 00:27:07,840
Speaker 1: When rates go down, so do rents. When rates go up,

540
00:27:08,080 --> 00:27:12,040
Speaker 1: we sit on the sideline. So that is a cause

541
00:27:12,080 --> 00:27:16,040
Speaker 1: and effect. And New York, unlike some places in the country,

542
00:27:16,600 --> 00:27:19,680
Speaker 1: have product to sell, so people are in, you know,

543
00:27:19,760 --> 00:27:22,120
Speaker 1: they're figuring out whatever they need to do to purchase

544
00:27:22,160 --> 00:27:22,480
Speaker 1: a home.

545
00:27:23,480 --> 00:27:26,480
Speaker 6: Talk to us about where cash like. It feels like

546
00:27:26,480 --> 00:27:28,000
Speaker 6: there's an AFO, a lout of cash buyers in the city.

547
00:27:28,240 --> 00:27:31,239
Speaker 1: So yes, absolutely, Well what proportion are we looking at

548
00:27:31,240 --> 00:27:33,640
Speaker 1: a quarter? I mean, well, the first and second quarter

549
00:27:33,720 --> 00:27:36,879
Speaker 1: I did about sixty seven percent of my transactions were cash.

550
00:27:37,400 --> 00:27:41,160
Speaker 1: That doesn't mean and there's also a tax opportunity there.

551
00:27:41,200 --> 00:27:44,160
Speaker 1: If you're paying cash, then you can pull money out

552
00:27:44,600 --> 00:27:47,600
Speaker 1: and you write off all of the interest on that.

553
00:27:48,080 --> 00:27:51,159
Speaker 1: Talk to your accountant. I'm not an accountant, but but

554
00:27:51,280 --> 00:27:52,240
Speaker 1: there's an opportunity.

555
00:27:52,440 --> 00:27:54,879
Speaker 3: Don't play one on TV either, Yep, Nope, don't want to.

556
00:27:54,880 --> 00:27:57,360
Speaker 1: Play one on TV. But there's an opportunity that people

557
00:27:57,400 --> 00:28:01,480
Speaker 1: are taking advantage of that tax credit and so not

558
00:28:01,880 --> 00:28:06,560
Speaker 1: that in today, we're seeing people even considering refinancing things

559
00:28:06,640 --> 00:28:09,280
Speaker 1: I sold less than twenty four months ago, even twelve

560
00:28:09,359 --> 00:28:12,360
Speaker 1: months ago. If it's not real property and they don't

561
00:28:12,400 --> 00:28:15,760
Speaker 1: have a mortgage recording tax, it doesn't cost anything to refinance.

562
00:28:15,880 --> 00:28:17,920
Speaker 3: What's the tyficult property that you when you talk about

563
00:28:17,920 --> 00:28:19,760
Speaker 3: all these showings you've done over the last couple of weeks,

564
00:28:19,920 --> 00:28:21,920
Speaker 3: give us is there an yeah, I know it runs

565
00:28:21,960 --> 00:28:22,359
Speaker 3: the gamut.

566
00:28:22,560 --> 00:28:25,440
Speaker 1: I know it does. We're from six hundred to twenty million,

567
00:28:25,560 --> 00:28:30,399
Speaker 1: so but but but these are five million down to

568
00:28:30,720 --> 00:28:33,600
Speaker 1: a million two and the million to two million to

569
00:28:33,760 --> 00:28:36,320
Speaker 1: two and a half. That is a market where people

570
00:28:36,359 --> 00:28:40,040
Speaker 1: are back in very strongly and they're being absorbed. Things

571
00:28:40,120 --> 00:28:42,320
Speaker 1: that have been on the market in some cases on

572
00:28:42,520 --> 00:28:47,080
Speaker 1: and off for three years are now in contract. So

573
00:28:47,840 --> 00:28:49,440
Speaker 1: it's it's it's an efficient market.

574
00:28:49,720 --> 00:28:51,720
Speaker 6: What does that mean for repricing? Are people rethinking?

575
00:28:51,880 --> 00:28:55,680
Speaker 1: It's you know, you're going to find more today than

576
00:28:56,120 --> 00:28:59,640
Speaker 1: less tomorrow because as interest rates continue to drop, prices

577
00:28:59,680 --> 00:29:01,000
Speaker 1: are going to continue to climb.

578
00:29:02,960 --> 00:29:04,560
Speaker 3: Remind us too, and I know what we always love

579
00:29:04,600 --> 00:29:08,360
Speaker 3: to talk about the demographic first time buyers, second time buyers,

580
00:29:08,480 --> 00:29:10,600
Speaker 3: foreign bar buyers, who's buying.

581
00:29:12,280 --> 00:29:14,760
Speaker 1: Let me just say, there's there's a whole tech search

582
00:29:14,920 --> 00:29:17,640
Speaker 1: that's been happening here. I spoke about my project at

583
00:29:17,640 --> 00:29:20,120
Speaker 1: three ninety three West End Avenue, which is a small

584
00:29:20,160 --> 00:29:23,840
Speaker 1: boutique seventy five unit building. One out of three not

585
00:29:24,000 --> 00:29:28,760
Speaker 1: only purchases, but every appointment, which I'm talking hundreds in

586
00:29:28,920 --> 00:29:31,640
Speaker 1: the last year and a half are tech individuals. But

587
00:29:31,800 --> 00:29:34,400
Speaker 1: the first time buyers are in the market now parents

588
00:29:34,440 --> 00:29:38,280
Speaker 1: are facilitating by supporting their children co purchasing. We have

589
00:29:38,560 --> 00:29:44,680
Speaker 1: empty nesters. I mean, listen, we uh we just did

590
00:29:45,520 --> 00:29:50,400
Speaker 1: sixteen transactions in August and part of September, maybe the

591
00:29:50,600 --> 00:29:54,480
Speaker 1: tail end of July, and I would say that four

592
00:29:54,600 --> 00:29:58,400
Speaker 1: of those of the sixteen were parents co purchasing with

593
00:29:58,520 --> 00:30:00,720
Speaker 1: their kids because they don't I want to pay rent

594
00:30:01,120 --> 00:30:05,000
Speaker 1: and why not build equity in that asset so cord

595
00:30:05,000 --> 00:30:07,840
Speaker 1: to those transactions. Wow, yeah, that's a lot.

596
00:30:08,000 --> 00:30:09,800
Speaker 3: Where's foreign buyers and all this? I know, I always

597
00:30:09,800 --> 00:30:11,080
Speaker 3: like to ask because I'm always cious about it.

598
00:30:11,200 --> 00:30:13,800
Speaker 1: I mean, you know, listen, we have a very strong

599
00:30:13,920 --> 00:30:19,080
Speaker 1: presence of mechs. I did three transactions with people from Mexico.

600
00:30:19,200 --> 00:30:23,160
Speaker 1: I've had a big strong contingency in Asia, but we

601
00:30:23,280 --> 00:30:26,600
Speaker 1: also have Italian and people are Look. New York has

602
00:30:26,680 --> 00:30:30,920
Speaker 1: been on really a discount. It's been for sale and

603
00:30:31,200 --> 00:30:35,560
Speaker 1: on at very low entry level for us historically since

604
00:30:35,560 --> 00:30:39,120
Speaker 1: we've been on the national the international platform of the market.

605
00:30:39,600 --> 00:30:42,560
Speaker 1: And so people are parking their money here and they'll

606
00:30:42,600 --> 00:30:45,040
Speaker 1: park it for everybody wants to buy a piece of

607
00:30:45,080 --> 00:30:45,400
Speaker 1: the rock.

608
00:30:45,840 --> 00:30:49,440
Speaker 3: So I find this investment it's in no no, their user.

609
00:30:49,720 --> 00:30:53,479
Speaker 1: They may be investment temporarily while their kids tell their

610
00:30:53,560 --> 00:30:56,240
Speaker 1: kids go to school here or they leave. I have

611
00:30:56,320 --> 00:30:59,480
Speaker 1: a lot of Israeli money coming here, so I think

612
00:30:59,560 --> 00:31:02,320
Speaker 1: that it's the gam it because of the war. No,

613
00:31:02,600 --> 00:31:05,480
Speaker 1: I think it's it's it's wanting to buy a piece

614
00:31:05,560 --> 00:31:09,720
Speaker 1: of what is stable. We are stable, We are, you know,

615
00:31:09,960 --> 00:31:13,120
Speaker 1: a leader and in our economies of all sorts, whether

616
00:31:13,120 --> 00:31:16,760
Speaker 1: it's real estate, you know, the stock market, or the tech,

617
00:31:17,400 --> 00:31:18,000
Speaker 1: the tech scene.

618
00:31:18,120 --> 00:31:20,040
Speaker 6: I want to go back to this idea of that

619
00:31:20,120 --> 00:31:22,080
Speaker 6: all these tech people that are that are buying as well.

620
00:31:22,160 --> 00:31:24,480
Speaker 6: I mean, are they typical buyers? Are they people that

621
00:31:24,560 --> 00:31:25,800
Speaker 6: are buying everyone in their level?

622
00:31:26,040 --> 00:31:29,160
Speaker 1: You have you have new Wealth where you have gen

623
00:31:29,480 --> 00:31:33,280
Speaker 1: X individuals that started some dot com thing or maybe

624
00:31:33,320 --> 00:31:34,840
Speaker 1: that's not even the hip thing now.

625
00:31:35,360 --> 00:31:39,040
Speaker 3: But a AI, we don't even know if we can

626
00:31:39,080 --> 00:31:42,200
Speaker 3: say hip thing anymore. Yeah, it's just forget it or

627
00:31:42,360 --> 00:31:43,440
Speaker 3: edited constant.

628
00:31:43,200 --> 00:31:46,920
Speaker 1: Exactly, please edit. But but the bottom line is is

629
00:31:47,000 --> 00:31:50,360
Speaker 1: that that they're the amount of job security. I mean

630
00:31:50,400 --> 00:31:52,560
Speaker 1: when I in two thousand and five, when Google started,

631
00:31:52,600 --> 00:31:55,840
Speaker 1: they committed five hundred people here, I don't even know

632
00:31:55,960 --> 00:31:59,000
Speaker 1: how many they are, but they're more I mean, yes,

633
00:31:59,160 --> 00:32:03,840
Speaker 1: I mean, and and they have helped compliment the tri

634
00:32:04,000 --> 00:32:07,040
Speaker 1: States on top of the city, and they're not just downtown.

635
00:32:07,400 --> 00:32:10,040
Speaker 1: As they get older, they want to move to the

636
00:32:10,160 --> 00:32:13,000
Speaker 1: uptown market where the schools are. So it's a very

637
00:32:13,120 --> 00:32:18,000
Speaker 1: interesting transition that that's metamorphosed through the last twenty years.

638
00:32:18,960 --> 00:32:21,280
Speaker 3: Anybody they're waiting to say, okay, if that's going to

639
00:32:21,320 --> 00:32:22,880
Speaker 3: cut even more, so I can just hold off a

640
00:32:22,920 --> 00:32:24,600
Speaker 3: little bit. But or are They're like, Nope, we're going

641
00:32:24,680 --> 00:32:24,880
Speaker 3: to do it.

642
00:32:24,960 --> 00:32:27,640
Speaker 1: It doesn't make sense because it's okay if you can't

643
00:32:27,640 --> 00:32:31,080
Speaker 1: afford your payment. That's one question, that's one decision, right,

644
00:32:31,160 --> 00:32:34,080
Speaker 1: But the bottom line is what's priced today is going

645
00:32:34,160 --> 00:32:36,800
Speaker 1: to be higher when when the buying power gets stronger

646
00:32:36,960 --> 00:32:39,600
Speaker 1: because of the increased demands and more people are in

647
00:32:39,720 --> 00:32:43,240
Speaker 1: the market. So there is a concern about bubbles, like

648
00:32:43,880 --> 00:32:47,720
Speaker 1: immediate bubbles where a lack where you have a certain

649
00:32:47,800 --> 00:32:50,280
Speaker 1: niche of a market where there's not enough inventory and

650
00:32:50,360 --> 00:32:53,400
Speaker 1: there's so many people parents trying to support their kids.

651
00:32:53,680 --> 00:32:56,680
Speaker 1: They'll have eleven offers on an apartment that's coming, that's

652
00:32:56,720 --> 00:32:57,680
Speaker 1: coming across the nation.

653
00:32:57,800 --> 00:33:00,080
Speaker 3: A couple questions how much new inventory is coming in

654
00:33:00,160 --> 00:33:02,520
Speaker 3: terms of building because you know, obviously there's just New

655
00:33:02,600 --> 00:33:06,160
Speaker 3: York City is only so big, But that doesn't mean

656
00:33:06,240 --> 00:33:08,640
Speaker 3: that there isn't new construction still going up or building's

657
00:33:08,640 --> 00:33:10,560
Speaker 3: being torn, new stuff coming up? Do people?

658
00:33:10,760 --> 00:33:10,880
Speaker 10: You know?

659
00:33:11,000 --> 00:33:12,600
Speaker 3: So what are we seeing in terms of new supply?

660
00:33:13,480 --> 00:33:17,040
Speaker 3: And I am also curious about again the office concern,

661
00:33:17,200 --> 00:33:19,960
Speaker 3: the excess office that's still in New York City, how

662
00:33:20,000 --> 00:33:21,640
Speaker 3: that maybe impacts an area.

663
00:33:22,040 --> 00:33:24,680
Speaker 1: You would never know that you're sitting in the Bloomberg building,

664
00:33:24,800 --> 00:33:25,680
Speaker 1: just to be bilar but.

665
00:33:25,720 --> 00:33:27,920
Speaker 3: There is a fair amount of occupancy. Now there's been

666
00:33:28,000 --> 00:33:31,040
Speaker 3: nice pictures put up, but we the container store went out,

667
00:33:31,080 --> 00:33:33,360
Speaker 3: and Out of Republic went out, Victoria's Secret went out.

668
00:33:33,360 --> 00:33:35,680
Speaker 3: I mean, there's a whole host of retail ye that

669
00:33:35,920 --> 00:33:37,520
Speaker 3: is gone and it hasn't been replaced.

670
00:33:37,560 --> 00:33:37,600
Speaker 7: Me.

671
00:33:37,760 --> 00:33:40,160
Speaker 1: Part of that is the pattern that we've been anticipating,

672
00:33:40,240 --> 00:33:42,440
Speaker 1: the shifting on. I mean, listen, I just ordered a

673
00:33:42,520 --> 00:33:45,280
Speaker 1: brace for my son's niece, my son's knee.

674
00:33:45,480 --> 00:33:46,040
Speaker 3: Yeah came.

675
00:33:46,400 --> 00:33:48,760
Speaker 1: I ordered it last night and it was here today

676
00:33:49,200 --> 00:33:52,360
Speaker 1: at before by before we left it four o'clock to

677
00:33:52,360 --> 00:33:55,480
Speaker 1: go back to school. So yeah, an, the access of

678
00:33:55,720 --> 00:33:59,000
Speaker 1: what we have has changed, how the patterns of shopping

679
00:33:59,120 --> 00:34:01,880
Speaker 1: is done. But from a from the concern on office

680
00:34:02,040 --> 00:34:04,360
Speaker 1: is there we are going to see people trying to

681
00:34:04,440 --> 00:34:07,080
Speaker 1: convert office to residential. There are a lot of challenges

682
00:34:07,120 --> 00:34:09,920
Speaker 1: because they're deep and they need light wells, so the

683
00:34:10,000 --> 00:34:12,560
Speaker 1: construction costs on that is difficult, and the tax base

684
00:34:12,719 --> 00:34:16,520
Speaker 1: is going to be higher than your traditional residential markets.

685
00:34:16,200 --> 00:34:18,520
Speaker 6: So we need to see prices go significantly higher to

686
00:34:18,600 --> 00:34:20,960
Speaker 6: mat We were talking about the Goat former Goldman building

687
00:34:21,040 --> 00:34:22,200
Speaker 6: being converted recently as.

688
00:34:22,560 --> 00:34:25,239
Speaker 1: Two fifty West Street. Yeah, well every no excuse me,

689
00:34:25,360 --> 00:34:27,840
Speaker 1: that was the City Bank. But they were anticipating that

690
00:34:27,960 --> 00:34:30,520
Speaker 1: to be very, very challenging, but they made it a

691
00:34:30,600 --> 00:34:34,439
Speaker 1: lifestyle building because they had the square footage to create

692
00:34:34,560 --> 00:34:39,120
Speaker 1: fifty five thousand square feet of amenities. So you know,

693
00:34:40,440 --> 00:34:42,600
Speaker 1: I find that those are going to continue to have

694
00:34:42,680 --> 00:34:45,520
Speaker 1: an attraction, both domestic and international.

695
00:34:45,840 --> 00:34:47,920
Speaker 3: What's your favorite kind of property right now to be

696
00:34:48,239 --> 00:34:50,640
Speaker 3: involved in and represent in terms of selling?

697
00:34:51,760 --> 00:34:54,839
Speaker 1: Oh wow, I mean I love selling places that. I mean,

698
00:34:54,960 --> 00:34:56,360
Speaker 1: I love old architecture.

699
00:34:56,440 --> 00:34:59,319
Speaker 3: But I find that what you know, like I'm just saying,

700
00:34:59,320 --> 00:35:01,319
Speaker 3: when you're offered up like a got that one, that's

701
00:35:01,360 --> 00:35:02,120
Speaker 3: gonna be an easy one?

702
00:35:03,760 --> 00:35:05,960
Speaker 1: Oh gosh, I mean, you know, I find that if

703
00:35:06,000 --> 00:35:10,280
Speaker 1: we price prepare and present properly, then we can sell anything.

704
00:35:10,800 --> 00:35:14,279
Speaker 1: It's all about pricing because people want to have a

705
00:35:14,360 --> 00:35:17,160
Speaker 1: piece of this rock. And it's really such a great

706
00:35:17,239 --> 00:35:19,759
Speaker 1: city that has had a challenging time that we all

707
00:35:20,320 --> 00:35:23,360
Speaker 1: have recovery still occurring from the pandemic.

708
00:35:23,560 --> 00:35:24,680
Speaker 3: Is there an area though with this?

709
00:35:24,960 --> 00:35:27,040
Speaker 1: I am all over the city. I would say that

710
00:35:27,200 --> 00:35:29,640
Speaker 1: there's nothing better than a West Village townhouse, which I

711
00:35:29,680 --> 00:35:32,520
Speaker 1: did a couple of those this past the last quarter,

712
00:35:33,120 --> 00:35:35,759
Speaker 1: and I've got more coming. Those are amazing because the

713
00:35:35,920 --> 00:35:38,480
Speaker 1: history that's behind them, right and the stories that can

714
00:35:38,560 --> 00:35:40,960
Speaker 1: be told about who lived in them. I find that

715
00:35:41,040 --> 00:35:44,000
Speaker 1: to be fascinating. And then I love you know, my

716
00:35:44,080 --> 00:35:48,040
Speaker 1: backyard is the Upper west Side, but the East Village

717
00:35:48,120 --> 00:35:51,120
Speaker 1: also is like it's unique to me because I live

718
00:35:51,200 --> 00:35:53,640
Speaker 1: on the Upper west Side. So there's something for everyone,

719
00:35:54,040 --> 00:35:57,319
Speaker 1: which is what makes Manhattan so special. And there are

720
00:35:57,360 --> 00:35:59,719
Speaker 1: no boundaries. It's like, oh, you can't go this over this,

721
00:36:00,280 --> 00:36:02,439
Speaker 1: It's it's not safe. It's just not the case.

722
00:36:02,640 --> 00:36:05,200
Speaker 6: I'm going to ask a really European question, are people worried?

723
00:36:05,320 --> 00:36:07,000
Speaker 3: Are you shopping for a place in New York City?

724
00:36:07,239 --> 00:36:09,960
Speaker 6: Did the bosses want to know a co sponsor?

725
00:36:11,280 --> 00:36:12,000
Speaker 1: Can call me.

726
00:36:12,760 --> 00:36:16,640
Speaker 6: I'm the climate proofing older properties. This is such a

727
00:36:16,680 --> 00:36:18,320
Speaker 6: big conversation being hot in parts of the world of

728
00:36:18,360 --> 00:36:19,640
Speaker 6: how much money you need to put into it to

729
00:36:19,680 --> 00:36:21,759
Speaker 6: make sure that it's more heated fish and more energytician.

730
00:36:21,960 --> 00:36:23,680
Speaker 6: Are people are buyers interested in that?

731
00:36:23,760 --> 00:36:26,800
Speaker 1: Absolutely? They would be crazy not to be listen. I

732
00:36:26,960 --> 00:36:29,319
Speaker 1: just took We refinanced my own building where I live

733
00:36:29,600 --> 00:36:34,360
Speaker 1: from a from a two million dollar mortgage to a

734
00:36:34,480 --> 00:36:37,560
Speaker 1: seven million dollar mortgage to do a four million dollar improvement,

735
00:36:38,080 --> 00:36:41,520
Speaker 1: which we did it. And you know it's it's really

736
00:36:41,719 --> 00:36:45,200
Speaker 1: the local law eleven and ninety seven. All of these

737
00:36:45,239 --> 00:36:47,960
Speaker 1: are safety opportunities that are going to make the world

738
00:36:48,040 --> 00:36:51,640
Speaker 1: better and and ourselves. But you have to go in

739
00:36:51,719 --> 00:36:53,960
Speaker 1: with your eyes open and know what you're getting in.

740
00:36:54,160 --> 00:36:57,280
Speaker 1: And it's it's up to those brokers to educate themselves.

741
00:36:57,320 --> 00:36:59,399
Speaker 3: It is that safety or climate, just quickly both.

742
00:36:59,560 --> 00:37:03,040
Speaker 1: It's both safety. I mean the elevator laws have changed

743
00:37:03,440 --> 00:37:05,600
Speaker 1: how we do local law leven meaning the point work

744
00:37:06,080 --> 00:37:08,719
Speaker 1: so bricks don't fall off buildings, all of that, and

745
00:37:08,760 --> 00:37:11,759
Speaker 1: then the climate comes with what our exmissions are and

746
00:37:12,200 --> 00:37:14,240
Speaker 1: the quality of the energy savings.

747
00:37:14,320 --> 00:37:16,719
Speaker 3: We're talking with Louise Phillips Forbes. She's real estate broker

748
00:37:16,719 --> 00:37:18,880
Speaker 3: at Brown Harris Stevens. We do want to remind everybody

749
00:37:18,960 --> 00:37:22,080
Speaker 3: we are watching actually a live feed in Pittsburgh, Pennsylvania.

750
00:37:22,200 --> 00:37:25,279
Speaker 3: We are expecting Vice President Kamala Harris to make some

751
00:37:25,440 --> 00:37:29,880
Speaker 3: comments unveiling her economic plan. That's how it's been played

752
00:37:29,960 --> 00:37:31,880
Speaker 3: up and promoted. If you will, so as soon as

753
00:37:31,920 --> 00:37:34,120
Speaker 3: she takes to the podium, we will take you there

754
00:37:34,200 --> 00:37:37,520
Speaker 3: live to listen to her comments. Meantime, I'm Carol Masser

755
00:37:37,600 --> 00:37:41,000
Speaker 3: along with Stephen Carroll right here on Bloomberg BusinessWeek. You know,

756
00:37:41,160 --> 00:37:43,239
Speaker 3: I love talking with folks like you. You obviously love

757
00:37:43,320 --> 00:37:46,080
Speaker 3: what you do. You're excited real estate. It's like I

758
00:37:46,160 --> 00:37:48,080
Speaker 3: read the business pages, but it's my next thing that

759
00:37:48,120 --> 00:37:52,399
Speaker 3: I always like, right best it? No, it is, It's

760
00:37:52,520 --> 00:37:55,880
Speaker 3: just everybody wants to talk about it. You've seen different cycles.

761
00:37:56,840 --> 00:37:58,960
Speaker 3: Are we back to where we were pre pandemic?

762
00:37:59,560 --> 00:38:00,840
Speaker 1: Where are think so?

763
00:38:01,200 --> 00:38:01,719
Speaker 3: I don't think so.

764
00:38:01,800 --> 00:38:03,919
Speaker 1: I think there's certain things like listen that you read

765
00:38:03,960 --> 00:38:07,320
Speaker 1: about iconic pieces of property trading for seventy nine million

766
00:38:07,640 --> 00:38:10,520
Speaker 1: that didn't even come on the market. You know, those

767
00:38:10,640 --> 00:38:15,120
Speaker 1: are those are luxury buys that our trophy and to

768
00:38:15,360 --> 00:38:17,879
Speaker 1: some of the elite that we have. We attract those

769
00:38:17,960 --> 00:38:20,759
Speaker 1: kinds of owners, and that's a domestic, local person who

770
00:38:20,800 --> 00:38:24,920
Speaker 1: bought that too. I think that, you know, I think

771
00:38:24,960 --> 00:38:28,120
Speaker 1: it was still great opportunity and huge growth to come forth,

772
00:38:28,200 --> 00:38:30,279
Speaker 1: you know, come forth when you were when I was

773
00:38:30,320 --> 00:38:33,279
Speaker 1: selling real estate, when Bloomberg rezoned forty percent of the

774
00:38:33,360 --> 00:38:36,799
Speaker 1: land mass, the opportunities in the shift in the boundaries

775
00:38:36,880 --> 00:38:41,319
Speaker 1: of where people would live was amazing. And we've got

776
00:38:41,400 --> 00:38:43,120
Speaker 1: that continuing. Yeah.

777
00:38:44,120 --> 00:38:45,719
Speaker 3: I was just going to say, didn't this used to

778
00:38:45,760 --> 00:38:48,600
Speaker 3: be what was the department store?

779
00:38:48,880 --> 00:38:53,640
Speaker 1: Yes, it was think of Alexander's Alexander Sorry, like an

780
00:38:53,680 --> 00:38:55,759
Speaker 1: old brand. Yeah, that's what I mean.

781
00:38:55,840 --> 00:38:57,560
Speaker 3: And then you look at kind of what's here now?

782
00:38:57,640 --> 00:38:58,759
Speaker 1: Yep, yeah, forget me.

783
00:38:58,960 --> 00:39:02,160
Speaker 6: No, this is trivia. I feel like I need to

784
00:39:02,200 --> 00:39:03,080
Speaker 6: store away and be able.

785
00:39:03,120 --> 00:39:06,319
Speaker 1: You can't go shopping anymore here? Well you can, well

786
00:39:06,800 --> 00:39:08,120
Speaker 1: right there, Yeah, fair enough.

787
00:39:08,480 --> 00:39:12,759
Speaker 6: I wanted to ask about the question around in your

788
00:39:12,760 --> 00:39:15,040
Speaker 6: conversations with buyers and sallus, does anyone bring up the election?

789
00:39:15,200 --> 00:39:16,839
Speaker 6: Is anyone thinking about they're going to hold off?

790
00:39:17,040 --> 00:39:17,200
Speaker 7: Well?

791
00:39:19,880 --> 00:39:22,319
Speaker 1: Well, I will say that there has been a little

792
00:39:22,400 --> 00:39:26,200
Speaker 1: more optimism since there was this shift, and I think

793
00:39:26,440 --> 00:39:30,240
Speaker 1: that you know if you know, if you didn't know Kamala,

794
00:39:30,280 --> 00:39:33,480
Speaker 1: which I didn't, she's held her own in hers and

795
00:39:33,600 --> 00:39:36,160
Speaker 1: how she speaks, what her what her principles are. So

796
00:39:36,280 --> 00:39:38,840
Speaker 1: I think there was a lot of unknown about that,

797
00:39:38,960 --> 00:39:43,080
Speaker 1: and I think people feel have embraced it. Secondly, my

798
00:39:43,280 --> 00:39:47,359
Speaker 1: experience is historically it has there's a pause where people

799
00:39:47,360 --> 00:39:49,720
Speaker 1: are like, let's wait and see what happens.

800
00:39:50,000 --> 00:39:50,920
Speaker 6: Are we in that zone now?

801
00:39:51,520 --> 00:39:53,919
Speaker 1: No? I mean you've got to remember, we're coming off

802
00:39:54,000 --> 00:40:00,560
Speaker 1: of twenty twenty now on top of that COVID, so

803
00:40:01,000 --> 00:40:04,160
Speaker 1: nobody they've been waiting a long time, and interest rates

804
00:40:04,200 --> 00:40:06,839
Speaker 1: are giving them that motivation that's going to override their

805
00:40:06,920 --> 00:40:11,280
Speaker 1: life decisions over who's going to be president.

806
00:40:11,400 --> 00:40:13,520
Speaker 3: What about though, Donald Trump coming out right, he came

807
00:40:13,600 --> 00:40:16,600
Speaker 3: to Long Island like it was kind of an unusual,

808
00:40:16,960 --> 00:40:19,280
Speaker 3: you know, campaign stop. I think many build it as.

809
00:40:19,840 --> 00:40:22,600
Speaker 1: Plus he's shut down four ninety five. I was stuck there.

810
00:40:22,600 --> 00:40:24,640
Speaker 1: I watched a movie with my husband on the street.

811
00:40:25,120 --> 00:40:28,719
Speaker 3: Not exactly probably in your plan, but he pledged salt

812
00:40:28,760 --> 00:40:30,920
Speaker 3: taxes to lift a cap on state and local taxes,

813
00:40:31,000 --> 00:40:34,000
Speaker 3: and that deduction that is means so much to those

814
00:40:34,080 --> 00:40:35,640
Speaker 3: of us who live in the New York Metro era

815
00:40:35,760 --> 00:40:37,960
Speaker 3: absolutely where there's a lot of taxes and we can't

816
00:40:38,120 --> 00:40:40,520
Speaker 3: deduct them. And I understand people say, you make those choices,

817
00:40:41,200 --> 00:40:44,719
Speaker 3: that isn't shifting people politically. You think about when they're

818
00:40:44,719 --> 00:40:46,040
Speaker 3: buying or mean, think about that.

819
00:40:46,320 --> 00:40:48,440
Speaker 1: I think there are everybody they think about it who

820
00:40:48,520 --> 00:40:50,920
Speaker 1: lives in New York who's in that top whether it's

821
00:40:51,320 --> 00:40:58,239
Speaker 1: two percent or ten percent. Elections financially will will sway some,

822
00:40:58,640 --> 00:41:01,520
Speaker 1: But to me, it's really about what's best for our country.

823
00:41:01,960 --> 00:41:04,200
Speaker 1: I mean, listen, I went from ninety thousand dollars worth

824
00:41:04,280 --> 00:41:07,399
Speaker 1: of real estate taxes that I rode off to ten

825
00:41:09,080 --> 00:41:12,680
Speaker 1: I didn't. I had multiple pieces of property. Yeah, so

826
00:41:12,840 --> 00:41:16,680
Speaker 1: that's forty five thousand dollars that I'm paying the government now.

827
00:41:17,239 --> 00:41:21,040
Speaker 1: So I think you have to it. It's going to

828
00:41:21,160 --> 00:41:24,200
Speaker 1: mean more to some than others. I don't live my

829
00:41:24,320 --> 00:41:25,840
Speaker 1: life through what's in my wallet.

830
00:41:25,960 --> 00:41:27,560
Speaker 3: You didn't sell your home, you didn't move, you didn't

831
00:41:27,560 --> 00:41:30,000
Speaker 3: move to another state, And I think.

832
00:41:29,880 --> 00:41:32,280
Speaker 1: That that your home is a long view.

833
00:41:33,640 --> 00:41:36,239
Speaker 6: When things are hot? Right now? Is that the simes

834
00:41:36,280 --> 00:41:38,719
Speaker 6: I'm getting right? You know, the Fed's coat rights were

835
00:41:38,719 --> 00:41:41,279
Speaker 6: into this cycle. Where what are you thinking about in

836
00:41:41,440 --> 00:41:43,440
Speaker 6: six months or a year. I mean, is that does

837
00:41:43,520 --> 00:41:44,719
Speaker 6: that demands to light?

838
00:41:44,800 --> 00:41:44,960
Speaker 4: There?

839
00:41:45,160 --> 00:41:45,360
Speaker 10: You do?

840
00:41:45,400 --> 00:41:47,000
Speaker 6: You have see that long line at your door?

841
00:41:47,200 --> 00:41:51,600
Speaker 1: Absolutely? You know. Look, I think that we have room

842
00:41:51,719 --> 00:41:56,160
Speaker 1: for a big recovery and we have room for growth

843
00:41:56,520 --> 00:42:00,399
Speaker 1: because as Carol said, there's only so much real estate

844
00:42:00,680 --> 00:42:04,560
Speaker 1: and floor to be built or converted or whatever, and

845
00:42:04,719 --> 00:42:08,880
Speaker 1: so owners buyers need to have a long view and

846
00:42:09,200 --> 00:42:12,120
Speaker 1: I push, I push my buyers today buy more. I

847
00:42:12,239 --> 00:42:14,440
Speaker 1: know you really want to only spend this much, but

848
00:42:14,680 --> 00:42:17,560
Speaker 1: why you want to have a second child? Reach this

849
00:42:17,719 --> 00:42:21,920
Speaker 1: is the time and refinance again. So that's my advice

850
00:42:22,280 --> 00:42:26,200
Speaker 1: is by long and stay and buy more today than

851
00:42:26,280 --> 00:42:26,880
Speaker 1: less tomorrow.

852
00:42:27,040 --> 00:42:28,920
Speaker 3: Before you go, I want to bring up there's a

853
00:42:28,960 --> 00:42:31,680
Speaker 3: story kind of teed up in the introduction. This is

854
00:42:31,680 --> 00:42:34,080
Speaker 3: written by our James Ptarmi about the New York City

855
00:42:34,120 --> 00:42:36,719
Speaker 3: townhouse with an eighty three foot climbing wall listing for

856
00:42:36,800 --> 00:42:40,399
Speaker 3: twenty million. It's the Manetta Lane Home. It's a local

857
00:42:40,520 --> 00:42:44,440
Speaker 3: landmark and as our James Ptarmi mentioned, it can now

858
00:42:44,560 --> 00:42:46,920
Speaker 3: be yours obviously if you can afford it. But I

859
00:42:47,040 --> 00:42:50,160
Speaker 3: do think about old buildings, as you said, you know,

860
00:42:50,280 --> 00:42:52,279
Speaker 3: with a history with people who lived in them or

861
00:42:52,719 --> 00:42:55,359
Speaker 3: some really cool stuff to it, whether it's a pool,

862
00:42:55,400 --> 00:42:58,279
Speaker 3: whether it's a climbing wall, what have you. Is there

863
00:42:58,320 --> 00:43:00,520
Speaker 3: something we've noticed in properties where there is even just

864
00:43:00,880 --> 00:43:03,440
Speaker 3: more and more being added in terms of a mendic Absolutely.

865
00:43:03,520 --> 00:43:06,120
Speaker 1: I mean, listen, the West Village. I just sold a transaction.

866
00:43:06,239 --> 00:43:08,919
Speaker 1: I did a transaction on Perry Street earlier this year,

867
00:43:09,360 --> 00:43:12,360
Speaker 1: and that is like mecca for a location of the

868
00:43:12,400 --> 00:43:15,800
Speaker 1: West Village, right down the street from uh Sex and

869
00:43:15,880 --> 00:43:21,000
Speaker 1: the City Townhouse. And you know, they hadn't it hadn't

870
00:43:21,000 --> 00:43:22,759
Speaker 1: been on the market for forty five years, right, so

871
00:43:23,040 --> 00:43:25,160
Speaker 1: they paid one hundred and thirty five thousand dollars for it.

872
00:43:25,480 --> 00:43:27,920
Speaker 1: That we had eight offers in eight days and it

873
00:43:28,040 --> 00:43:31,560
Speaker 1: went two million dollars over the asking price, and most

874
00:43:31,600 --> 00:43:33,680
Speaker 1: of the people that wanted to make those offers wanted

875
00:43:33,680 --> 00:43:35,960
Speaker 1: to spend seven million dollars and then flip it for

876
00:43:36,040 --> 00:43:38,760
Speaker 1: twenty six unbelievable, and that would have been possible.

877
00:43:39,480 --> 00:43:41,040
Speaker 3: Love that. That's such a great way to wrap up.

878
00:43:41,400 --> 00:43:44,800
Speaker 3: Louise as always so appreciated. Thank you, Thank you, Louise

879
00:43:44,800 --> 00:43:48,640
Speaker 3: Phillips Forbes real estate broker at Brown Harris Stevens. Here

880
00:43:48,680 --> 00:43:51,880
Speaker 3: in our Interactive Broker studio working on properties for Stephen

881
00:43:51,920 --> 00:43:53,320
Speaker 3: Carroll to come to New York.

882
00:43:53,200 --> 00:43:55,080
Speaker 1: City be able to dose h here.

883
00:43:55,320 --> 00:43:57,320
Speaker 6: We might be waiting for a while, work.

884
00:43:57,200 --> 00:43:59,239
Speaker 3: Assic immigration things or whatever it is. I don't know

885
00:43:59,239 --> 00:43:59,680
Speaker 3: what it's worked for.

886
00:44:00,360 --> 00:44:04,120
Speaker 1: I think I'm happy that I'm going before Tamala. Then

887
00:44:04,160 --> 00:44:05,440
Speaker 1: after there might have been questions.

888
00:44:05,480 --> 00:44:08,080
Speaker 3: There might have been questions. Art Luis, thank you so much.

889
00:44:08,920 --> 00:44:12,400
Speaker 2: You're listening to the Bloomberg Business Week podcast. Catch us

890
00:44:12,480 --> 00:44:15,680
Speaker 2: live weekday afternoons from two to five pm Eastern. Listen

891
00:44:15,760 --> 00:44:17,920
Speaker 2: on Apple car Play and then Bright Auto with a

892
00:44:17,960 --> 00:44:20,960
Speaker 2: Bloomberg Business act or want us live on YouTube.

893
00:44:22,280 --> 00:44:25,080
Speaker 6: Let's bring in on Zachron, expanding partner co CEO at

894
00:44:25,120 --> 00:44:28,520
Speaker 6: IQ Capital from Foster City, California. As we drive to

895
00:44:28,600 --> 00:44:32,760
Speaker 6: the close here on Bloomberg Radio. So Alan, look, yesterday

896
00:44:32,840 --> 00:44:35,080
Speaker 6: was the forty first record for the S and P

897
00:44:35,160 --> 00:44:37,040
Speaker 6: five phonded. This year, we're not going to get forty two.

898
00:44:37,120 --> 00:44:38,640
Speaker 6: It looks like we're doing about a quarter of one

899
00:44:38,640 --> 00:44:40,800
Speaker 6: percent on the S and P five funded. What breaks

900
00:44:40,880 --> 00:44:42,800
Speaker 6: this bull run? What takes us out of this the

901
00:44:43,000 --> 00:44:44,920
Speaker 6: level that we're seeing so many records for stocks?

902
00:44:46,600 --> 00:44:48,400
Speaker 5: Thanks for having me on your show. It takes us

903
00:44:48,480 --> 00:44:49,640
Speaker 5: out of this market.

904
00:44:49,840 --> 00:44:54,359
Speaker 9: It is some unexpected event because when valuations are the site,

905
00:44:54,360 --> 00:44:56,600
Speaker 9: you just had less root for error. The reality is,

906
00:44:57,040 --> 00:44:59,400
Speaker 9: I think the feed is pretty much articulated. The soft

907
00:44:59,520 --> 00:45:02,600
Speaker 9: landing few people thought they could, and growth is still

908
00:45:02,680 --> 00:45:04,480
Speaker 9: there and inflation is moderating.

909
00:45:04,640 --> 00:45:07,239
Speaker 5: So what it's not what you know what you know,

910
00:45:07,320 --> 00:45:08,400
Speaker 5: and you know what you don't know. It's what you

911
00:45:08,480 --> 00:45:10,160
Speaker 5: don't know that you don't know that's going to hurt you.

912
00:45:10,200 --> 00:45:12,960
Speaker 9: If things stay as planned, the market is going to

913
00:45:13,160 --> 00:45:15,400
Speaker 9: slowly continue to work its way up. Most of the

914
00:45:15,480 --> 00:45:19,160
Speaker 9: valuation increase in multiples has probably been witnessed. But if

915
00:45:19,200 --> 00:45:22,239
Speaker 9: earnings can continue to grow at a moderate pace, the markets.

916
00:45:21,920 --> 00:45:24,600
Speaker 5: Can plot their way higher from here. So the unexpected

917
00:45:24,680 --> 00:45:25,680
Speaker 5: is what's going to take us down.

918
00:45:25,800 --> 00:45:27,000
Speaker 3: Hey, one thing I want to ask you is we

919
00:45:27,080 --> 00:45:30,400
Speaker 3: continue to monitor Vice Presid Kamala Harris there in Pittsburgh

920
00:45:30,480 --> 00:45:33,040
Speaker 3: trying to get more details of what the specifics are

921
00:45:33,280 --> 00:45:35,600
Speaker 3: on when it comes to our economic plan, and to

922
00:45:35,719 --> 00:45:38,319
Speaker 3: be fair, as our Mike Dorning pointed out, we want

923
00:45:38,360 --> 00:45:40,719
Speaker 3: more specifics when it comes to what a second term

924
00:45:40,800 --> 00:45:42,920
Speaker 3: of a Trump White House would be. Having said that,

925
00:45:43,080 --> 00:45:47,040
Speaker 3: you talk with investors, you guys, are investing money. Do

926
00:45:47,239 --> 00:45:51,600
Speaker 3: you often have your clients, institutional or otherwise saying, hey,

927
00:45:52,160 --> 00:45:54,080
Speaker 3: you know, I'm a little confused. I want to know

928
00:45:54,200 --> 00:45:57,120
Speaker 3: what the economic plans are. Our folks is saying here's

929
00:45:57,160 --> 00:45:58,200
Speaker 3: what I want to do with my money.

930
00:46:00,239 --> 00:46:03,200
Speaker 9: For the most part, we're finding both individual as well

931
00:46:03,200 --> 00:46:07,040
Speaker 9: as institutional investors are basically focused on economic growth and inflation,

932
00:46:07,200 --> 00:46:09,239
Speaker 9: because at the end of the day, no matter which

933
00:46:09,280 --> 00:46:13,440
Speaker 9: administration is in office, let alone, and which Democrats are

934
00:46:13,440 --> 00:46:18,080
Speaker 9: Republicans controlling Congress, who makes the rules taxes, inflation.

935
00:46:17,800 --> 00:46:21,600
Speaker 5: And economic growth of what drive asset dount and so both.

936
00:46:21,560 --> 00:46:23,279
Speaker 9: Parties more or less look like we're going to be

937
00:46:23,320 --> 00:46:25,600
Speaker 9: in an environment where the deficit ind continued to grow

938
00:46:26,120 --> 00:46:27,880
Speaker 9: and where the biggest differences.

939
00:46:27,480 --> 00:46:30,800
Speaker 10: Are sector wise, whether you're going to focus on traditional

940
00:46:30,920 --> 00:46:35,160
Speaker 10: energy versus electric vehicles and de electrification is a big

941
00:46:35,239 --> 00:46:37,920
Speaker 10: issue of change or perhaps moderate changes of.

942
00:46:38,000 --> 00:46:39,400
Speaker 5: Respect to the healthcare system.

943
00:46:39,800 --> 00:46:42,160
Speaker 9: But for the most part, the administrations aren't that much

944
00:46:42,200 --> 00:46:45,000
Speaker 9: a part, other than probably potential tax changes from the

945
00:46:45,080 --> 00:46:48,480
Speaker 9: TCGA that we're imposed during the Trump administration. So we

946
00:46:48,560 --> 00:46:50,840
Speaker 9: see handfuls of clients that take on let's wait and

947
00:46:50,880 --> 00:46:53,400
Speaker 9: see what happens with the US president's election outcome.

948
00:46:53,880 --> 00:46:55,560
Speaker 5: The reality is the markets move in the end on

949
00:46:55,640 --> 00:46:58,240
Speaker 5: economic growth, not on who's in the office as a president.

950
00:46:58,600 --> 00:47:01,560
Speaker 6: And look, the economic picture pretty solids by all accounts.

951
00:47:01,600 --> 00:47:04,080
Speaker 6: They always de forecasts out today seeing US GDP for

952
00:47:04,200 --> 00:47:06,520
Speaker 6: rising two point six percent this year, one point six

953
00:47:06,600 --> 00:47:09,400
Speaker 6: percent next year. Though, where are you on your outlook

954
00:47:09,440 --> 00:47:12,000
Speaker 6: on a soft landing and your concerns about where growth

955
00:47:12,120 --> 00:47:12,879
Speaker 6: is going up from here?

956
00:47:14,120 --> 00:47:16,680
Speaker 9: I think the soft landing has actually been achieved, and

957
00:47:16,760 --> 00:47:19,440
Speaker 9: you're seeing things like rates have come down now on

958
00:47:19,480 --> 00:47:21,200
Speaker 9: the long end of the curve, and you're seeing actually

959
00:47:21,400 --> 00:47:25,000
Speaker 9: refinancing applications of spiked. They've had more big index on

960
00:47:25,120 --> 00:47:27,720
Speaker 9: mortgage refinancings is the highest point has been since April

961
00:47:27,760 --> 00:47:30,000
Speaker 9: of twenty twenty two. So you can begin to see

962
00:47:30,040 --> 00:47:33,600
Speaker 9: the fact of slower rates rekindling economic growth.

963
00:47:33,680 --> 00:47:35,120
Speaker 5: Where we come out as you're going to be in

964
00:47:35,200 --> 00:47:36,320
Speaker 5: a GDP growth.

965
00:47:36,160 --> 00:47:38,680
Speaker 9: Environment of two to three percent, you are going to

966
00:47:38,719 --> 00:47:41,760
Speaker 9: be in a higher inflationary environment closer to three percent

967
00:47:41,840 --> 00:47:44,080
Speaker 9: peranum than what it was prior to COVID.

968
00:47:44,360 --> 00:47:47,640
Speaker 5: So what COVID and it's saving COVID.

969
00:47:47,400 --> 00:47:51,320
Speaker 9: By printing tons trillions of dollars has created a higher

970
00:47:51,400 --> 00:47:54,320
Speaker 9: inflationary environment going forward, and so that ultimately needs to

971
00:47:54,360 --> 00:47:58,200
Speaker 9: probably have moderately higher yields, and that in turn tells

972
00:47:58,239 --> 00:48:00,759
Speaker 9: you that there's probably less room from here twenty times

973
00:48:00,840 --> 00:48:04,080
Speaker 9: forward earnings for the S ANDP to expand its PE multiple,

974
00:48:04,120 --> 00:48:07,839
Speaker 9: and therefore market growth public equity market growth of here

975
00:48:08,000 --> 00:48:12,680
Speaker 9: is more dependent on earnings growth down on PE multiple expansion. Hence,

976
00:48:12,719 --> 00:48:15,520
Speaker 9: they answered my first question, there's less room for error

977
00:48:15,640 --> 00:48:19,440
Speaker 9: because the likelihood of exceptional additional multiple expansion from here

978
00:48:19,560 --> 00:48:20,280
Speaker 9: is pretty limited.

979
00:48:20,440 --> 00:48:22,359
Speaker 3: All right, sounds like you're also then starting to think

980
00:48:22,360 --> 00:48:24,799
Speaker 3: about earnings. Is that kind of your next focal point?

981
00:48:24,880 --> 00:48:26,920
Speaker 3: Just got about thirty seconds here, Alan real quickly.

982
00:48:27,560 --> 00:48:29,759
Speaker 9: Yes, we need to see earnings growth to merit the

983
00:48:30,080 --> 00:48:33,320
Speaker 9: relatively high multiples that investors continue to pay on the markets.

984
00:48:33,760 --> 00:48:35,439
Speaker 9: So if you think the market and trading a little

985
00:48:35,600 --> 00:48:37,839
Speaker 9: SMB five hundred training a little over twenty times forward

986
00:48:37,840 --> 00:48:41,440
Speaker 9: earnings is fully valued, then your expectation if the multiple

987
00:48:41,480 --> 00:48:43,600
Speaker 9: holes is the market growth at the rate of earnings growth,

988
00:48:43,960 --> 00:48:46,759
Speaker 9: that might be something lowered or of six to eight percent.

989
00:48:46,560 --> 00:48:48,680
Speaker 5: For the next couple of years. All right, not terrible,

990
00:48:48,760 --> 00:48:49,920
Speaker 5: better than bonds, but not.

991
00:48:50,040 --> 00:48:53,919
Speaker 3: Extraor yeah, exactly right. It's a little perspective there, Alan,

992
00:48:53,960 --> 00:48:56,520
Speaker 3: Thank you so much, as always appreciate you jumping around

993
00:48:56,560 --> 00:48:59,640
Speaker 3: as we had watching the vice president in Pittsburgh and

994
00:48:59,800 --> 00:49:02,880
Speaker 3: just something's going on here. Are keeping us busy on

995
00:49:02,920 --> 00:49:05,960
Speaker 3: this Wednesday, Alan Zaffron, founding partner co CEO at IQ

996
00:49:06,160 --> 00:49:07,520
Speaker 3: Capital out there on the West Coast.

997
00:49:08,080 --> 00:49:12,680
Speaker 2: This is the Bloomberg Business Week podcast, available on Apple, Spotify,

998
00:49:12,880 --> 00:49:16,560
Speaker 2: and anywhere else you get your podcasts. Listen live weekday

999
00:49:16,560 --> 00:49:20,040
Speaker 2: afternoons from two to five pm Eastern on Bloomberg dot com,

1000
00:49:20,239 --> 00:49:23,520
Speaker 2: the iHeartRadio app, tune In, and the Bloomberg Business App.

1001
00:49:23,640 --> 00:49:26,560
Speaker 2: You can also watch us live every weekday on YouTube

1002
00:49:26,800 --> 00:49:28,800
Speaker 2: and always on the Bloomberg Jerminal