WEBVTT - Intel CEO Forced Out After Board Grew Frustrated With Progress 0:00:02.920 --> 0:00:07.240 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.520 --> 0:00:12.880 This is Bloomberg business Week inside from the reporters and 0:00:13.080 --> 0:00:16.640 editors who bring you America's most trusted business magazine, plus 0:00:16.720 --> 0:00:20.840 global business, finance and tech news. The Bloomberg Business Week 0:00:20.880 --> 0:00:25.960 Podcast with Carol Meser and Tim Stenebek from Bloomberg Radio. 0:00:27.120 --> 0:00:29.840 Joining us is Caroline High, co host of Bloomberg Technology. 0:00:29.920 --> 0:00:34.920 Here in Studio, Caroline, Let's first start with Intel felt 0:00:34.960 --> 0:00:38.160 like this was expected and yet it feels like still 0:00:38.159 --> 0:00:38.839 a big deal for Hey. 0:00:38.960 --> 0:00:40.720 Well, I will say every time we had Ian on 0:00:40.840 --> 0:00:44.520 in the last two years, Ian King, we basically ask him, Caroline, 0:00:44.920 --> 0:00:48.120 how much patience does the board have for this turnaround plan? 0:00:48.280 --> 0:00:50.960 And I guess we finally learned today they're out of patients. 0:00:51.080 --> 0:00:53.680 They're out of patients and actually saw that patients being strained. 0:00:53.720 --> 0:00:56.960 In August when they had their numbers, the earnings were poor. 0:00:57.120 --> 0:01:01.040 In particular, they were showing losses at the manufacturing part 0:01:01.040 --> 0:01:02.600 of the business. The foundery is part of the business, 0:01:02.840 --> 0:01:04.640 and inking, poor guy, I think he's meant to be 0:01:04.680 --> 0:01:06.280 taking the day off and had to come running back. 0:01:06.200 --> 0:01:08.800 To report he's down the terminal. 0:01:09.040 --> 0:01:12.000 Yeah, and when that August number hit. We saw in 0:01:12.040 --> 0:01:15.480 particular one member of the board quit Li Bhutan and 0:01:16.000 --> 0:01:20.240 with the frustration about the direction of travel coming from 0:01:20.440 --> 0:01:23.160 Pat Girl Singer because look, this pre dates Pac coming 0:01:23.160 --> 0:01:25.280 in in twenty twenty one. To be fair, to be 0:01:25.319 --> 0:01:28.200 fair in Video has been on AI accelerator path and 0:01:28.280 --> 0:01:32.120 GPU focus for a long time, but they just managed 0:01:32.160 --> 0:01:35.399 to miss this AI accelerator wave. The Galdhi offering that 0:01:35.440 --> 0:01:38.240 they have is likely to not meet their own internal 0:01:38.280 --> 0:01:42.440 five hundred million dollars per year revenue target. Compare that 0:01:42.480 --> 0:01:44.720 to the one hundred billion in videos bringing in the 0:01:44.760 --> 0:01:46.920 more than five billion the AMD is managing to do. 0:01:47.440 --> 0:01:50.080 All of this though, just shows that since Pac Girl 0:01:50.120 --> 0:01:54.360 Singer has been the leaders in twenty twenty one, Intel's 0:01:54.400 --> 0:01:57.440 share prices plummeted sixty percent in Video's share price as 0:01:57.440 --> 0:02:00.440 well as more than eight hundred percent, and Intel has 0:02:00.440 --> 0:02:03.800 managed to try and pivot become more focusing on foundries. 0:02:03.840 --> 0:02:06.440 Do like the opposite of AMD, which spun off global 0:02:06.480 --> 0:02:09.839 foundriies and went fabulous. Intel went back in. But there's 0:02:09.840 --> 0:02:12.920 a mixed reaction coming from the analyst today because City 0:02:12.960 --> 0:02:14.760 Group is actually saying and maybe this is why the 0:02:14.760 --> 0:02:16.720 shares have turned negative were now off by one point 0:02:16.720 --> 0:02:17.280 seven percent. 0:02:17.600 --> 0:02:17.720 Is that? 0:02:17.880 --> 0:02:21.480 Look, he Pat was the best guy for manufacturing. They 0:02:21.639 --> 0:02:23.440 rather they just got rid of the foundries part of 0:02:23.440 --> 0:02:25.720 the business and kept Pat, rather than get rid of 0:02:25.760 --> 0:02:29.680 Pat and try and still cobble together the focus that 0:02:29.720 --> 0:02:32.440 he had in terms of getting into building chips as 0:02:32.440 --> 0:02:34.480 well for other clients as well as themselves. 0:02:34.560 --> 0:02:36.120 I mean, it's amazing, right because the Intel was up 0:02:36.160 --> 0:02:38.000 six percent of TIS as you said, now down about 0:02:38.000 --> 0:02:39.600 one and a half percent. So it just shows like 0:02:39.720 --> 0:02:42.280 whilst you're trying to figure out what this means, I mean, 0:02:42.680 --> 0:02:44.560 isn't a Pat Gelsinger problem? 0:02:44.680 --> 0:02:45.760 Is it an Intel problem? 0:02:45.760 --> 0:02:45.840 Like? 0:02:45.880 --> 0:02:47.800 What is the way forward for Intel? 0:02:48.040 --> 0:02:50.120 I think it's an Intel problem, many would say. Is 0:02:50.160 --> 0:02:53.600 that over years, you know, they were trying to do 0:02:53.639 --> 0:02:55.520 the biggest restructuring in four decades. 0:02:55.880 --> 0:02:58.040 Pat did come on with a very big, bold vision. 0:02:58.080 --> 0:03:00.680 Perhaps that was too big, too bold to cost even 0:03:00.760 --> 0:03:03.519 with government help, with all these chips at money coming 0:03:03.560 --> 0:03:05.800 at them, to be able to build an Ohio Arizona, 0:03:06.000 --> 0:03:07.840 they had to suddenly put on ice what was happening 0:03:07.840 --> 0:03:10.920 in Europe, and ultimately the market ripped away from them, 0:03:10.960 --> 0:03:13.440 particularly when it came to AI and I think just 0:03:13.600 --> 0:03:17.000 other areas of the market, plus their own clients. Remember, 0:03:17.080 --> 0:03:19.040 at the same time as in video building up strength 0:03:19.120 --> 0:03:21.600 in AI, Apple is busy making its own chips, and 0:03:21.639 --> 0:03:23.600 they're not making so much for their phones anymore. 0:03:23.720 --> 0:03:26.480 If this wasn't a Pat Gelsinger problem and he did 0:03:26.520 --> 0:03:28.440 have a few years to attempt to turn it around, 0:03:28.639 --> 0:03:32.040 you mentioned what happened with the share price, especially versus Nvidia, 0:03:32.160 --> 0:03:34.480 Then what can another leader actually come in and do 0:03:35.160 --> 0:03:35.800 to save this. 0:03:35.800 --> 0:03:38.640 Company, and particularly at the moment where they're depending on insiders, 0:03:38.640 --> 0:03:41.680 look fair play. David Sinzner, the CFO has only been 0:03:41.720 --> 0:03:45.760 there a few years, but Michelle Johnson Halthouse MJS is 0:03:45.840 --> 0:03:48.600 known has been there for three decades. This is totally 0:03:48.600 --> 0:03:51.360 turning to people who understand the business but are not 0:03:51.360 --> 0:03:53.119 going to be a breath of fresh air anytime soon. 0:03:53.160 --> 0:03:55.760 Of course, we've got Frank Eeri saying he's going to 0:03:55.760 --> 0:03:57.600 take on the executive chair role and he's going to 0:03:57.600 --> 0:04:01.440 find a new permanent solution. Will that be from outside 0:04:01.480 --> 0:04:04.200 the business or will they turn to potentially starting to 0:04:04.200 --> 0:04:06.240 bring themselves up. That was something Pat was very dead 0:04:06.280 --> 0:04:09.120 set against. Yes, he was going to be making money 0:04:09.120 --> 0:04:11.880 by spinning off different bits of the business, certainly particular 0:04:11.960 --> 0:04:15.360 investments that they'd made, but he wanted to keep it intact. 0:04:15.840 --> 0:04:19.240 What about offers coming from rival suitors? 0:04:19.600 --> 0:04:22.919 Right right? I mean Quacom was interested, right, Yeah, and 0:04:22.920 --> 0:04:24.279 then they went off and then the deal. 0:04:24.640 --> 0:04:27.600 Yeah, but not so into you anymore kind of thing. Well, 0:04:27.760 --> 0:04:29.000 what kind of leader does? 0:04:29.160 --> 0:04:30.040 Do we have any idea? 0:04:30.080 --> 0:04:32.400 I'm just curious what kind of leader Intel needs at 0:04:32.400 --> 0:04:34.720 this point? Yeah, I love the inside outside, right, We've 0:04:34.720 --> 0:04:36.320 seen this with these incredible it's. 0:04:36.160 --> 0:04:38.520 Almost like company. It's almost like you're talking about Boeing 0:04:38.560 --> 0:04:40.120 right now. Yeah, exactly, I'm hearing this and I'm like 0:04:40.160 --> 0:04:41.039 just thinking about Boeing. 0:04:41.120 --> 0:04:43.159 Right, how many times have we talked about this story 0:04:43.160 --> 0:04:45.279 that like maybe it's time for fresh blood to come. 0:04:45.120 --> 0:04:45.760 Into a company. 0:04:45.760 --> 0:04:49.080 And remember Pat Kelson himself was kind of fresh blood 0:04:49.120 --> 0:04:52.080 because he came out from VM where he'd been the 0:04:52.120 --> 0:04:55.080 CEO there. He'd left Intel. He was so integral to 0:04:55.120 --> 0:04:56.000 Intel in the eighties. 0:04:56.000 --> 0:04:58.400 He was like literally, you know, designing the chips himself. 0:04:58.400 --> 0:05:01.200 He then left after serving a long time and ap 0:05:01.240 --> 0:05:03.320 period as CTO is Intel, do they go and get 0:05:03.360 --> 0:05:05.920 other experience? Then he came back and he couldn't change 0:05:05.920 --> 0:05:09.120 it around if they go outside of say MJ. It's 0:05:09.160 --> 0:05:12.440 interesting hearing the narrative just from the statement this morning. 0:05:12.760 --> 0:05:15.880 They're saying, we need the product people to lead the 0:05:15.880 --> 0:05:16.799 business at the moment. 0:05:16.839 --> 0:05:17.560 Well, that is MJ. 0:05:17.720 --> 0:05:18.520 So what are they going to do. 0:05:18.560 --> 0:05:20.480 Are they going to bring other product. 0:05:20.160 --> 0:05:22.240 Expertise from outside or are they going to bring someone 0:05:22.279 --> 0:05:23.800 who can be a bit of a turnaround king or 0:05:23.880 --> 0:05:25.480 queen after see right. 0:05:25.400 --> 0:05:28.560 Like operate or turn around person versus somebody really understands 0:05:28.640 --> 0:05:31.080 the products that need to kind of move Intel going forward? 0:05:31.120 --> 0:05:33.560 To what extent does this turn into or continue a 0:05:33.640 --> 0:05:37.160 nasty cycle for Intel? If you're a potential customer or 0:05:37.160 --> 0:05:39.560 a customer and you're thinking to yourself, well, do I 0:05:39.600 --> 0:05:41.039 really want to buy it from a company that I 0:05:41.080 --> 0:05:43.360 see reported in the press such as this, it's going 0:05:43.400 --> 0:05:46.120 through this upheaval, there's again executive shake. 0:05:46.000 --> 0:05:46.600 Up at the top. 0:05:47.560 --> 0:05:50.600 Does that turn into a terrible doom loop for the company? 0:05:51.680 --> 0:05:53.440 I mean, time will tell, and I hate that sort 0:05:53.440 --> 0:05:55.920 of an answer, But what could help. 0:05:56.000 --> 0:05:57.799 Is the PC refresh. 0:05:58.240 --> 0:06:00.840 You know, this is a man who's also staked his 0:06:01.480 --> 0:06:04.120 future on the AIPC taking off, and thus far we've 0:06:04.120 --> 0:06:05.600 all talked about it, but not really known how it's 0:06:05.600 --> 0:06:07.080 going to affect our lives and not really bought the 0:06:07.160 --> 0:06:09.480 darn thing, right, So will we actually see I mean, 0:06:09.760 --> 0:06:11.520 this echo is the issue that Dell was having an 0:06:11.640 --> 0:06:14.440 HP was having in the beginning of the week John 0:06:14.520 --> 0:06:15.040 last week. 0:06:15.240 --> 0:06:16.760 Yeah, and he made the point that there are no 0:06:16.839 --> 0:06:18.920 apps for Intel for if there are no apps for 0:06:18.960 --> 0:06:21.880 aipcs yet, So it's like we just hear from executives 0:06:21.880 --> 0:06:24.000 talking about them, but there's nothing to show for him. 0:06:24.240 --> 0:06:26.080 So if that starts to take up, if suddenly we 0:06:26.120 --> 0:06:28.960 are all addicted to generative AI, we do suddenly want 0:06:29.000 --> 0:06:32.080 to get a newer PC that we had bought just 0:06:32.120 --> 0:06:34.040 the time in COVID, and we will now get a 0:06:34.080 --> 0:06:36.400 new one. Maybe that will help Intel, but then they're 0:06:36.400 --> 0:06:38.599 going to be leaning back into the PC side rather 0:06:38.600 --> 0:06:40.839 than trying to compete on the AI accelerator side, which 0:06:40.880 --> 0:06:42.240 is really the bit of the market that at the 0:06:42.279 --> 0:06:44.000 moment everyone's getting into. 0:06:44.240 --> 0:06:46.200 Yeah, it's kind of like this identity crisis for a 0:06:46.279 --> 0:06:49.440 name that was just so you know, associated with anything 0:06:49.440 --> 0:06:51.240 to do with the semi world. Hey, before you go, 0:06:51.320 --> 0:06:53.120 we got to ask you about super micro computer. I 0:06:53.160 --> 0:06:54.599 think it's the number one gainer and both the S 0:06:54.640 --> 0:06:56.920 and P five hundred and nas DECK one hundred independent 0:06:56.920 --> 0:06:59.680 review no evidence of miscanda. 0:06:59.839 --> 0:07:01.720 This is a company that's had so many twists and 0:07:01.800 --> 0:07:02.400 terms this year. 0:07:02.520 --> 0:07:06.560 No, I mean on the high's absolutely caught up in 0:07:06.600 --> 0:07:09.240 the AI hype because they are a competitor with Dell. 0:07:09.320 --> 0:07:11.640 They basically put in video chips within their servers and 0:07:11.920 --> 0:07:14.840 sell them out to clients. So super Micro done phenomenally well, 0:07:15.080 --> 0:07:17.640 but then came the concern about well, no one wanting 0:07:17.640 --> 0:07:20.360 to audit them, then getting worried about financials not putting 0:07:20.360 --> 0:07:22.840 their ten k out, potentially being kicked off the Nasdaq. 0:07:23.040 --> 0:07:25.320 Right now, they've got a new auditor, now, they've got 0:07:25.360 --> 0:07:28.720 a new CFO, Chief compliance Officer, General counsel. They're trying 0:07:28.760 --> 0:07:32.000 to steady people's nerves that look, we've got different oversight 0:07:32.160 --> 0:07:34.360 here of the business and we are going to be 0:07:34.400 --> 0:07:36.600 able to stay listed within the Nasdaq, which I think 0:07:36.600 --> 0:07:37.480 for many is the key. 0:07:38.520 --> 0:07:41.200 I'm surprised to see reaction today just because when EI 0:07:41.280 --> 0:07:44.800 resigns it's not a good sign and I'm like, well, 0:07:45.000 --> 0:07:47.080 did they get something wrong then? And this new auditor 0:07:47.160 --> 0:07:50.000 is different in some sense, like they're obviously sending a 0:07:50.000 --> 0:07:52.160 different signal, but you know someone's not. 0:07:52.160 --> 0:07:55.320 In the right here, or whether EI were frustrated with 0:07:55.360 --> 0:07:57.920 the leadership and now they're changing up the executive leadership 0:07:57.960 --> 0:07:59.960 and showing that they're going to have a different governance 0:08:00.000 --> 0:08:03.280 structure going through. But everyone wants to love this stock 0:08:03.400 --> 0:08:06.240 because it is so integral to the AI hype cycle. 0:08:06.360 --> 0:08:08.480 So maybe it's just been so beaten up that people 0:08:08.520 --> 0:08:10.920 are willing to buy back in. But yeah, we'll see 0:08:10.920 --> 0:08:13.200 what BDO USA has to say about the numbers when 0:08:13.240 --> 0:08:14.120 they eventually file them. 0:08:14.200 --> 0:08:16.320 Not one of the big accounting firms that typically odd 0:08:16.320 --> 0:08:17.520 at s and P five hundred. 0:08:17.240 --> 0:08:20.040 Company, but I KNOWDIA like video, Yeah, Simon, and you're 0:08:20.040 --> 0:08:22.840 not going to hang your hat on. I would have thought, yeah, 0:08:22.880 --> 0:08:24.520 they're taking a big risk here, and I'm sure they 0:08:24.520 --> 0:08:25.640 want to show the proof in the pudding. 0:08:25.760 --> 0:08:27.880 Well, I'm got to say investors certainly buying in stocks 0:08:27.960 --> 0:08:30.280 P twenty eight percent so far in today's session. 0:08:30.320 --> 0:08:32.000 Caroline, thank you, Thank you so appreciate. 0:08:32.040 --> 0:08:35.320 Co host of Bloomberg Technology Catcher on Bloomberg Television at 0:08:35.320 --> 0:08:36.560 eleven am Wall Street time. 0:08:36.640 --> 0:08:38.079 Every day you're. 0:08:37.920 --> 0:08:41.480 Listening to the Bloomberg Business Week podcast Catch US Live 0:08:41.559 --> 0:08:44.600 weekday afternoons from two to five pm. Easter Listen on 0:08:44.640 --> 0:08:47.200 Apple car Play and then Bright Otto with a Bloomberg 0:08:47.240 --> 0:08:50.840 Business act, or watch US live on YouTube. 0:08:51.920 --> 0:08:54.760 Hesbilla has claimed the first strike against Israel since a 0:08:54.880 --> 0:08:57.640 US back ceasefire plan came into effect that was less 0:08:57.640 --> 0:09:00.120 than a week ago. It prompted Israeli officials to a 0:09:00.480 --> 0:09:02.880 strong response and the most serious threats so far to 0:09:02.920 --> 0:09:05.760 the truce with Lebanon. With more and what we know, 0:09:05.800 --> 0:09:08.680 Bloomberg News US National Security Team leader Nick Wadams joins 0:09:08.760 --> 0:09:11.400 us from our DC bureau. Nick I was confused to 0:09:11.400 --> 0:09:14.560 see this headline because, like you know, we see in 0:09:14.600 --> 0:09:17.240 the story here, less than a week ago, we saw 0:09:17.240 --> 0:09:19.960 a ceasefire agreement between these two countries. 0:09:20.120 --> 0:09:24.080 What happened, right, Well, I mean that's that's really the issue, 0:09:24.800 --> 0:09:27.200 and this is this is something that happens every time 0:09:27.559 --> 0:09:30.480 there is a ceasefire, or frequently when there is a ceasefire, 0:09:30.520 --> 0:09:34.400 there are violations of it. And the question is then 0:09:34.960 --> 0:09:37.320 at what point do you say, Okay, the ceasefire has 0:09:37.480 --> 0:09:42.440 essentially collapsed and it no longer applies. What we gather 0:09:42.679 --> 0:09:46.079 so far is that we have not drifted into that territory. 0:09:46.200 --> 0:09:49.760 The US National Security Council spokesman John Kirby said today 0:09:50.160 --> 0:09:54.760 that rocket attacks went from hundreds to basically zero, and 0:09:54.800 --> 0:09:58.240 then dozens of air strikes by Israel to one or 0:09:58.240 --> 0:10:01.000 two per day. So what there's saying here is there 0:10:01.000 --> 0:10:05.319 has been a dramatic reduction in violence and that's what matters, 0:10:05.520 --> 0:10:08.160 and the ceasefire still holds. But what it does tell 0:10:08.240 --> 0:10:11.480 us more broadly is that this is very tenuous. You 0:10:11.559 --> 0:10:14.640 had President Biden come out and say the ceasefire had 0:10:14.679 --> 0:10:18.240 been achieved, a lot of concern about whether it will hold, 0:10:18.520 --> 0:10:22.439 and concern that things will only continue to exclate. One possibility, 0:10:22.440 --> 0:10:24.319 of course, is this is just sort of a show 0:10:24.360 --> 0:10:27.560 of strength by the two sides. Things will quiet back down, 0:10:27.600 --> 0:10:31.480 but certainly not looking good for the broader prospects for 0:10:31.520 --> 0:10:33.240 that ceasefire at the moment, Nick. 0:10:33.200 --> 0:10:36.640 Why do this dance? You know, rather than ceasefire means ceasefire? 0:10:36.760 --> 0:10:37.720 So help me understand. 0:10:37.760 --> 0:10:40.640 I know it's always complicated when I feel like anything 0:10:40.640 --> 0:10:45.079 in the Middle East, But why this dance rather than Okay, ceasefire, 0:10:45.120 --> 0:10:46.199 this is a step forward. 0:10:47.400 --> 0:10:49.880 Well, I mean it's a great question, but you know, 0:10:49.920 --> 0:10:52.600 the big issue is that so much time and effort 0:10:52.679 --> 0:10:56.360 and energy went into establishing this ceasefire. And the really 0:10:56.360 --> 0:11:00.600 important thing for certainly the US, but also for those 0:11:00.640 --> 0:11:04.959 caught in the conflict, is that the violence has dramatically reduced. 0:11:05.040 --> 0:11:08.080 So there's a question of Okay, you have the ceasefire. 0:11:08.240 --> 0:11:11.200 You don't want to immediately just declare the ceasefire is dead, 0:11:11.240 --> 0:11:13.280 which means okay that everybody would then have to go 0:11:13.360 --> 0:11:15.360 back to the negotiating table. And if you're looking at 0:11:15.400 --> 0:11:18.680 a pure numbers game, it's like, okay, well, we have 0:11:18.720 --> 0:11:22.559 a monitoring system in place. There may be some violations. 0:11:23.400 --> 0:11:27.440 We do not deem those violations to be to indicate 0:11:27.480 --> 0:11:29.720 that the ceasefire has totally collapsed. I mean, and when 0:11:29.720 --> 0:11:31.640 you look at some of the language, it seems like 0:11:32.040 --> 0:11:34.720 the two sides also have an interest in keeping the 0:11:34.760 --> 0:11:39.959 ceasefire in place. Has Bellowed, for example, targeted Israel in 0:11:40.400 --> 0:11:44.560 a specific area, an area that's still contested, and they 0:11:44.679 --> 0:11:48.600 framed their response as a defensive response to what they 0:11:48.600 --> 0:11:52.160 said were recurrent violations by the Israeli side. So what 0:11:52.280 --> 0:11:55.400 they're saying is this is much more of a defensive action, 0:11:55.520 --> 0:11:58.480 and they have not gone back on the offense of course, 0:11:58.480 --> 0:12:02.920 big question is whether will see things the same way. 0:12:02.960 --> 0:12:04.760 But at this point the big question is going to 0:12:04.800 --> 0:12:07.800 be is there escalation where we would get to a 0:12:07.800 --> 0:12:10.959 point where we'd say, listen, the ceasefire exists in name only. 0:12:11.040 --> 0:12:12.800 So far, that's not quite yet the case. 0:12:12.920 --> 0:12:14.560 We'll tell us a little bit more about the area 0:12:14.600 --> 0:12:18.679 that's in contention right now, Nick, because we saw after 0:12:18.679 --> 0:12:21.840 that ceasefire deal with sign last week or reached last week, 0:12:21.840 --> 0:12:25.439 I should say, we saw people moving in Lebanon, moving 0:12:25.559 --> 0:12:29.080 back to that area because they thought. 0:12:28.840 --> 0:12:31.520 It would be safe to do so. So there's some, right, 0:12:31.559 --> 0:12:32.280 I mean, concerns. 0:12:32.520 --> 0:12:35.840 Yeah, yeah, I mean so there. I think a lot 0:12:35.880 --> 0:12:39.640 of the imagery we really saw of people coming back 0:12:40.040 --> 0:12:42.480 to their homes in Lebanon in a lot of cases 0:12:42.559 --> 0:12:45.600 that was actually in Beirut, in the capitol where people 0:12:45.640 --> 0:12:49.400 had fled because Israeli air strikes had really hit some 0:12:49.559 --> 0:12:53.640 parts of Beyrout, particularly southern Beay Route quite hard, and 0:12:53.720 --> 0:12:55.920 so people were coming back in because there was a 0:12:55.960 --> 0:12:59.400 feeling which has largely held that the ceasefire would apply 0:12:59.600 --> 0:13:02.559 and you start to see those strikes again. The area 0:13:02.679 --> 0:13:06.440 really in question is this sort of strip of land 0:13:06.679 --> 0:13:09.720 around just south of the Litani River and so this 0:13:09.720 --> 0:13:12.440 this divides Lebanon in Israel, and this has been a 0:13:12.440 --> 0:13:16.960 sort of hotly contested area for quite some time, and 0:13:17.000 --> 0:13:19.840 it's believed that that has you know, has been there 0:13:19.840 --> 0:13:22.199 for a long time, and there was a feeling that 0:13:22.320 --> 0:13:25.040 Israel could then pull back and that would also allow 0:13:25.080 --> 0:13:27.959 Hesbolat to pull back. So that's really where you're seeing 0:13:28.000 --> 0:13:30.640 a lot of the contested you know, the violations. We 0:13:30.679 --> 0:13:35.160 have not seen major violations apply, you know to Beyroot, 0:13:35.200 --> 0:13:37.160 which I think if you did see that, what would 0:13:37.200 --> 0:13:39.000 indicate a real collapse of the seasfire. 0:13:39.240 --> 0:13:42.480 What are we hearing out of our own security operations, 0:13:42.520 --> 0:13:45.240 our own intelligence out of the White House in regards 0:13:45.280 --> 0:13:48.800 to that, or we haven't heard maybe much of anything yet. 0:13:49.200 --> 0:13:51.760 Well, I mean the big thing is I mean the 0:13:51.880 --> 0:13:54.680 US put, as as I mentioned, a lot of time 0:13:54.720 --> 0:13:58.360 and effort and frankly credibility into getting this ceasefire. So 0:13:58.600 --> 0:14:00.880 it is very much in their interest to try to 0:14:00.960 --> 0:14:03.440 keep this thing from escalating much farther and keep it 0:14:03.480 --> 0:14:07.120 in place. This is something that President Biden really wants 0:14:07.160 --> 0:14:09.120 to keep in place through the end of his term 0:14:09.880 --> 0:14:12.640 in hopes that then it would put pressure on Hamas 0:14:12.640 --> 0:14:15.080 and Israel to come to a ceasefire in the Gaza Strip. 0:14:15.160 --> 0:14:17.839 So it is very much in their interest to keep 0:14:17.880 --> 0:14:19.880 this thing going. They do not want this to fail. 0:14:19.920 --> 0:14:21.760 So what you can expect to see in the next 0:14:21.760 --> 0:14:23.360 couple of days is going to be a ton of 0:14:23.360 --> 0:14:26.880 pressure on both Israel and Hezballah by the US and 0:14:26.920 --> 0:14:31.200 other mediators involved in this action to really tamp things 0:14:31.240 --> 0:14:34.440 down and not let these tit for stat tat strikes 0:14:34.440 --> 0:14:34.960 get any worse. 0:14:35.080 --> 0:14:36.520 Him and I are going back and forth because we're like, 0:14:36.560 --> 0:14:37.880 there's one more thing we need to ask you, and 0:14:37.920 --> 0:14:40.080 I feel like when you think about pressure, I think 0:14:40.080 --> 0:14:41.360 about tim the President elect. 0:14:41.480 --> 0:14:43.880 Yeah, well, Donald Trump posting just at the same time 0:14:43.880 --> 0:14:46.840 we learned that Israel is actually doing this. He posted 0:14:46.840 --> 0:14:49.040 about the Middle East hostages on True Social He said 0:14:49.080 --> 0:14:50.760 there will be all hell to pay if the hostages 0:14:50.800 --> 0:14:53.160 are not released by January twenty I think called on 0:14:53.560 --> 0:14:56.000 the hostages to be released in the Middle East. Right now, 0:14:56.000 --> 0:14:58.680 How does this complicate things or not complicate things? 0:14:59.360 --> 0:15:03.600 Well, I mean it's it's very interesting because the hostage 0:15:03.600 --> 0:15:06.840 situation applies to a different situation, which is in the 0:15:06.920 --> 0:15:08.160 Gaza Strip, and so that. 0:15:08.320 --> 0:15:12.880 Is it is it that different? Well, it's all I mean, 0:15:12.920 --> 0:15:14.560 it's a two front it's a several front war. 0:15:15.240 --> 0:15:18.600 Sure, that's true. Though the issue there is that a 0:15:18.640 --> 0:15:22.120 threat like that would not necessarily apply to Hezbollah because 0:15:22.160 --> 0:15:24.800 they don't have any hostages that they have worked in 0:15:24.840 --> 0:15:27.360 support of Hummas. But I mean, you're right in the 0:15:27.440 --> 0:15:30.760 sense that when when President elect Trump issues a threat 0:15:30.800 --> 0:15:33.640 like that, it certainly causes people to stand up and 0:15:33.680 --> 0:15:36.680 take notice and question, Okay, what's going to be coming 0:15:36.720 --> 0:15:39.320 down the pike. It's that sort of this this idea 0:15:39.360 --> 0:15:41.960 they have escalate to de escalate. The question is is 0:15:42.000 --> 0:15:45.680 this bluster or is this just something that is he's 0:15:45.720 --> 0:15:48.600 going to actually take seriously and potentially launch some sort 0:15:48.640 --> 0:15:50.600 of strike once he becomes president. 0:15:50.720 --> 0:15:53.600 All right, Well, as we said, you know, it's kind 0:15:53.600 --> 0:15:55.440 of a two steps forward, one step back, it always 0:15:55.440 --> 0:15:55.840 feels like. 0:15:56.360 --> 0:15:59.000 But a lot of moving pieces to this. Nick, you're jem. 0:15:59.040 --> 0:15:59.640 Thank you so much. 0:15:59.720 --> 0:16:02.640 Nick Bottom, Bloomberg News US National Security Team Leader, and 0:16:02.680 --> 0:16:04.320 you can read the latest just check it out at 0:16:04.360 --> 0:16:06.640 Bloomberg dot com or of course, on the Bloomberg terminal. 0:16:08.480 --> 0:16:12.360 You're listening to the Bloomberg Business Week podcast. Listen live 0:16:12.480 --> 0:16:15.680 each weekday starting at two pm Eastern on applecar Play 0:16:15.680 --> 0:16:18.520 and Android Auto with the Bloomberg Business App. You can 0:16:18.560 --> 0:16:21.800 also listen live on Amazon Alexa from our flagship New 0:16:21.880 --> 0:16:25.520 York station. Just say Alexa Play Bloomberg eleven thirty. 0:16:26.520 --> 0:16:26.880 All right. 0:16:27.040 --> 0:16:29.600 Not sure exactly how to set up this story for 0:16:29.680 --> 0:16:32.880 our Bloomberg BusinessWeek team other than it is an incredible 0:16:32.880 --> 0:16:35.920 deep dive by Bloomberg Jackie Devallos and Sophia Alexander. 0:16:36.160 --> 0:16:37.600 It's about someone. 0:16:37.240 --> 0:16:39.960 Who probably is about to become maybe a household name, 0:16:40.040 --> 0:16:44.080 and not for a good reason. It's a former billionaire 0:16:44.400 --> 0:16:47.280 now disgrace tycoon. His name is Greg Glenberg. He built 0:16:47.280 --> 0:16:49.360 a network of egg donors and surrogates and is now 0:16:49.360 --> 0:16:52.040 facing as many as thirty years in prison. There's some legal, 0:16:52.160 --> 0:16:55.160 different charges. There's a lot to unpack here, so let's 0:16:55.160 --> 0:16:58.040 get to it. Bloomberg News Technology Report, Jackie Devallos joining 0:16:58.120 --> 0:16:59.200 us from our Washington d C. 0:16:59.640 --> 0:17:00.000 Jackie. 0:17:00.600 --> 0:17:02.160 Every time I turned around with Tim, he was reading 0:17:02.160 --> 0:17:03.920 the story and he's like, leave me alone, Leave me alone, 0:17:03.920 --> 0:17:07.040 because it was just unbelievable. I do feel like we're 0:17:07.040 --> 0:17:08.520 watching a little bit of a streaming. 0:17:08.200 --> 0:17:11.359 Series reading your story. Who is Greg lin Berg. 0:17:11.840 --> 0:17:15.119 How did he and this story get on yours and 0:17:15.160 --> 0:17:17.359 Sophie's Sophie Alexander's radar. 0:17:18.800 --> 0:17:22.600 Well, he might actually be a well known quantity if 0:17:22.640 --> 0:17:26.000 you've been a Bloomberg reader and listener over the last 0:17:26.080 --> 0:17:29.600 couple of years. He made his name and the insurance business, 0:17:29.640 --> 0:17:31.480 and not really for a good reason. 0:17:32.560 --> 0:17:33.520 He built his. 0:17:33.560 --> 0:17:37.960 Wealth by amassing this empire of insurance companies that then 0:17:38.000 --> 0:17:41.480 got him in trouble. He was convicted of bribery and 0:17:41.600 --> 0:17:44.520 some fraud charges. He actually went to jail a couple 0:17:44.480 --> 0:17:48.119 of years ago for the bribery charges. He wanted to 0:17:48.200 --> 0:17:52.040 basically get some preferential treatment in North Carolina, where some 0:17:52.080 --> 0:17:54.280 of his companies were based. He got caught for it 0:17:54.320 --> 0:17:58.080 by the FBI and went away for a couple of 0:17:58.160 --> 0:18:00.959 years in prison, but got out and kind of this 0:18:01.040 --> 0:18:06.639 procedural issue with the jury instruction, so basically he was 0:18:06.680 --> 0:18:08.679 able to kind of, you know, come out as a 0:18:08.680 --> 0:18:11.720 free man. All the while this was happening, and even 0:18:11.760 --> 0:18:16.600 before he went to jail, he had these aspirations of 0:18:16.640 --> 0:18:21.480 having upwards of fifty children, and what he is known 0:18:21.520 --> 0:18:25.040 for kind of in the business community, really had nothing 0:18:25.040 --> 0:18:27.960 to do with what he was doing in his personal life. 0:18:27.960 --> 0:18:30.920 But what we were able to uncover Sophie and I, 0:18:30.960 --> 0:18:34.480 you know, she is a reporter that knows billionaires, knows 0:18:34.520 --> 0:18:38.120 how they think, and I really knew kind of the 0:18:38.160 --> 0:18:41.160 fertility clinic side of things. I had done some reporting 0:18:41.200 --> 0:18:44.600 on a company called kind Body last year and this 0:18:44.640 --> 0:18:47.439 came on our radar as a kind of a combination 0:18:47.520 --> 0:18:50.960 of those two reporting threads. But we had no idea 0:18:51.160 --> 0:18:54.400 just how deep his baby project really went. Well. 0:18:54.400 --> 0:18:58.200 That firm that you mentioned is one of the two 0:18:58.240 --> 0:19:03.000 that's implicated in a scheme. Let's back up for a second. 0:19:03.000 --> 0:19:04.960 We're going to get to sort of the intricacies here. 0:19:04.960 --> 0:19:08.920 But why would he want fifty kids and why would 0:19:08.960 --> 0:19:12.000 you want to do this through IVF Because there's some 0:19:12.080 --> 0:19:15.240 custody issues here that you detail in the story. 0:19:16.280 --> 0:19:19.840 That's right. He has three children with an ex wife 0:19:20.000 --> 0:19:22.480 that he had, you know, when he was married, and 0:19:23.119 --> 0:19:25.920 there was kind of an ugly custody battle there. And 0:19:26.359 --> 0:19:29.200 when we sat down with him to interview him, he 0:19:29.760 --> 0:19:33.760 was fairly forthcoming about the reasons why kind of vacillated 0:19:33.800 --> 0:19:36.520 between well, you know, I don't really want to lose 0:19:36.800 --> 0:19:39.199 kids in a custody battle, which is why I wanted 0:19:39.240 --> 0:19:42.480 to have them on my own. He wasn't, you know, 0:19:42.560 --> 0:19:45.240 hiding the fact that he used a network of egg donors, 0:19:45.280 --> 0:19:47.920 but then again, he wasn't totally forthcoming about how many 0:19:48.040 --> 0:19:52.199 were involved. Another reason he you know, he stated was 0:19:52.200 --> 0:19:58.159 that he wanted to preserve civilization, this responsibility to populate 0:19:58.320 --> 0:20:02.840 the earth. And we recognized a lot of those threads 0:20:02.880 --> 0:20:06.800 from you know, especially Sophia Alexander's reporting on Elon Musk 0:20:06.960 --> 0:20:10.000 and other billionaires who are kind of obsessed with this 0:20:10.119 --> 0:20:13.919 kind of pro natalist way of thinking, and Greg Lindberg's 0:20:14.920 --> 0:20:19.959 goals really echoed that that goal as well. And you know, 0:20:20.320 --> 0:20:21.960 the other thing that kind of came up is that, 0:20:22.920 --> 0:20:26.080 you know, I don't think I don't think a lot 0:20:26.119 --> 0:20:30.880 is known about what it takes to build a family 0:20:30.920 --> 0:20:33.040 in this way. We typically think of like a couple 0:20:33.080 --> 0:20:37.240 walking into a fertility clinic that can't conceive, not necessarily 0:20:37.320 --> 0:20:40.200 a guy who's basically trying to have as many children 0:20:40.240 --> 0:20:45.320 as possible on his own, and yeah, you know, there's 0:20:45.400 --> 0:20:48.880 the issue of custody. He shares some children with this 0:20:49.119 --> 0:20:52.359 woman who kind of served as a recruiter for him, 0:20:52.440 --> 0:20:54.880 but she's not allowed back in the United States. So 0:20:55.200 --> 0:21:00.399 eight children are currently in his care in Tampa while 0:21:00.480 --> 0:21:03.880 he's sitting in jail waiting to be sentenced for these 0:21:03.960 --> 0:21:06.800 larger crimes. And that's really what's at the core of 0:21:06.800 --> 0:21:10.159 the story is you know, where will these children end up? 0:21:10.200 --> 0:21:14.639 What happens to them? And ultimately did doctors know that 0:21:14.760 --> 0:21:15.920 this was a possibility. 0:21:17.440 --> 0:21:18.400 I don't even know where to begin. 0:21:19.480 --> 0:21:21.600 It's just kind of as I like to say, a wait, 0:21:21.640 --> 0:21:24.200 what moment I want to go back to. You talked 0:21:24.200 --> 0:21:27.639 with Lindburg earlier this year. Tell us about that conversation. 0:21:27.960 --> 0:21:30.840 What you wanted to know, why he agreed to do 0:21:30.880 --> 0:21:34.679 the interview, what what was I'm just curious how you 0:21:34.680 --> 0:21:35.520 got him to talk to you. 0:21:36.880 --> 0:21:40.600 Well, he has a pretty open presence online if you 0:21:40.640 --> 0:21:44.320 google Greg Lindberg dot com. He talks a lot about longevity. 0:21:44.800 --> 0:21:50.119 After his legal saga, he you know, he's currently waiting 0:21:50.160 --> 0:21:52.840 to be sentenced, but at the time over you know, 0:21:52.960 --> 0:21:57.120 in the spring, he was posting YouTube videos about kind 0:21:57.119 --> 0:22:01.560 of his new project, which is all about wellness and 0:22:01.640 --> 0:22:05.560 how to get younger and stay young. And you know, 0:22:05.600 --> 0:22:07.520 he posts a lot about these things and we were 0:22:07.560 --> 0:22:10.440 interested in that. I had gotten a tip about kind 0:22:10.440 --> 0:22:13.439 of his baby projects separately, but it really seemed like 0:22:13.480 --> 0:22:17.000 these two things were linked, and so he wanted to 0:22:17.000 --> 0:22:22.440 talk about his longevity company called Longevity Labs, and had 0:22:22.440 --> 0:22:24.880 a phone call with him. Then he invited us down 0:22:24.920 --> 0:22:28.240 to Tampa where he lives, and this is where we 0:22:28.359 --> 0:22:32.840 really got to see him in his element. He came 0:22:32.880 --> 0:22:36.760 in with security guards. He you know, has this kind 0:22:36.800 --> 0:22:41.280 of very intimidating quality to him. His eye contact was 0:22:41.320 --> 0:22:45.240 extremely intense, and you know, at first he was fairly 0:22:45.280 --> 0:22:49.119 open about how he built his family through IVF, but 0:22:49.200 --> 0:22:51.120 started to kind of clam up a little bit once 0:22:51.200 --> 0:22:55.520 he almost like heard himself kind of talking about the 0:22:55.640 --> 0:22:59.840 unorthodox nature of it. And we were pretty forthcoming that, like, hey, 0:23:00.080 --> 0:23:02.320 sounds a lot like this other guy that we've written about, 0:23:02.320 --> 0:23:06.640 Elon Musk. But you know, that's kind of what got 0:23:06.680 --> 0:23:10.000 the I think it cracked it open for us that 0:23:10.119 --> 0:23:14.520 this was real and that there were certainly a lot 0:23:14.520 --> 0:23:21.280 of women that you know, he didn't want to talk about. 0:23:21.320 --> 0:23:25.240 But we had to kind of piece those those pieces 0:23:25.240 --> 0:23:28.680 together because it's an incredibly important part of the story, 0:23:28.720 --> 0:23:33.359 which is the exploitation involved. And while this might have 0:23:33.440 --> 0:23:37.159 been you know, a goal of his there were women 0:23:37.520 --> 0:23:43.360 whose lives were impacted by how he carried this out. 0:23:43.480 --> 0:23:44.679 So let's talk a little bit about that. 0:23:44.720 --> 0:23:47.320 How he carried this out, who was involved, how Instagram 0:23:47.720 --> 0:23:53.480 was used, and what women who ultimately did donate their 0:23:53.520 --> 0:23:57.400 eggs to lind Bergh were told versus what they ended 0:23:57.480 --> 0:23:59.160 up getting and what he ended up doing. 0:24:00.440 --> 0:24:03.840 The first in the first stage of the baby project, 0:24:04.119 --> 0:24:10.719 Greg Glenberg really targeted blonde, blue eyed, green eyed model types. 0:24:10.760 --> 0:24:14.120 There were matchmaking services that he used, There were kind 0:24:14.119 --> 0:24:17.719 of boozy parties that he threw in his huge yacht. 0:24:19.000 --> 0:24:24.800 There were you know, reality TV stars, Netflix stars, I mean, 0:24:25.280 --> 0:24:29.159 you know, very very like a specific type of woman 0:24:29.520 --> 0:24:34.320 that he had in mind. He had this kind of 0:24:34.359 --> 0:24:40.520 obsession with Arian looks and the German quality to things. 0:24:40.560 --> 0:24:43.240 He himself obviously is red hair, but he really wanted 0:24:43.280 --> 0:24:46.680 to have you know, blonde, blue eyed boys and super 0:24:46.720 --> 0:24:49.960 specific and for some of these women, you know, many 0:24:50.280 --> 0:24:53.960 were vulnerable. There there was one who was not, you know, 0:24:54.000 --> 0:24:57.960 from American. There were several actually who were Eastern European 0:24:59.160 --> 0:25:02.119 vulnerable in many ways because you know, they didn't know 0:25:02.160 --> 0:25:05.640 what they were getting themselves into. He promised them money, 0:25:06.119 --> 0:25:08.959 you know, promises that they would be in the child's life, 0:25:08.960 --> 0:25:12.680 that they will build a home together, and was kind 0:25:12.680 --> 0:25:15.120 of manipulating them in a way that, you know, if 0:25:15.119 --> 0:25:18.040 they didn't go through with this procedure, that he would 0:25:18.200 --> 0:25:20.920 have cut them off basically and cut the relationship off. 0:25:21.280 --> 0:25:24.840 There were other women that had no idea that you know, 0:25:25.040 --> 0:25:31.320 he who he was, his recruiter slash fiance. You know, 0:25:31.520 --> 0:25:34.399 she was going on Instagram and basically finding these women 0:25:34.880 --> 0:25:39.240 and offering them hundreds of thousands of dollars to donate 0:25:39.240 --> 0:25:41.240 their eggs, and they thought, you know, wow, my eggs 0:25:41.240 --> 0:25:43.240 are just going to go to this you know, nice 0:25:43.240 --> 0:25:45.600 family who can't have kids, and they weren't told the 0:25:45.600 --> 0:25:48.520 truth about Greg Linberg, his legal troubles and the fact 0:25:48.520 --> 0:25:50.040 that he was sitting in jail while some of this 0:25:50.160 --> 0:25:50.640 was happening. 0:25:50.720 --> 0:25:53.000 Jackie, your story is definitely about linn Berg and everything 0:25:53.040 --> 0:25:55.880 that kind of happened around him, But it's also about, 0:25:56.320 --> 0:25:59.560 as you guys you know so well, right, the booming 0:26:00.280 --> 0:26:02.920 ten billion dollar fertility industry here in America, and you 0:26:02.960 --> 0:26:06.239 guys have been writing a lot about this industry. It 0:26:06.280 --> 0:26:08.720 continues to grow. There's demand out there. We know that 0:26:08.800 --> 0:26:10.400 Tim and I talk about it a lot on air. 0:26:10.680 --> 0:26:14.160 It also shows though, what ultimately the lack of transparency 0:26:14.160 --> 0:26:16.440 over it and kind of rules governing. Is that kind 0:26:16.440 --> 0:26:17.880 of the other side of the story because I think 0:26:18.000 --> 0:26:20.240 we're listening and saying, okay, some of this happens, like 0:26:20.880 --> 0:26:23.000 tell us kind of where this breaks down, where the 0:26:23.080 --> 0:26:23.960 law has been broken. 0:26:24.000 --> 0:26:29.320 Potentially this is the big picture. Greg Lin Burton might 0:26:29.400 --> 0:26:33.680 go to prison likely will, but anyone else can pull 0:26:33.720 --> 0:26:36.679 this off because a lot of this was actually legal. 0:26:37.080 --> 0:26:39.800 There is very little regulation when it comes to the 0:26:39.800 --> 0:26:44.480 fertility industry. It's this honor system. They're a self regulated 0:26:44.600 --> 0:26:50.359 industry essentially that has guidelines that doctors purport to follow. 0:26:50.400 --> 0:26:52.480 Clinics say, you know, these are the guidelines of the 0:26:52.480 --> 0:26:56.040 American Society of Reproductive Medicine ASRM. It's a trade group 0:26:56.080 --> 0:26:59.840 that represents doctors across the country, and they say that 0:27:00.119 --> 0:27:02.840 follow these these guidelines. But no one's following up on it, 0:27:02.840 --> 0:27:05.600 no one's policing it. The government is largely stayed out 0:27:05.600 --> 0:27:10.680 of regulating fertility because it's really politically fraught, as we 0:27:10.760 --> 0:27:14.000 know with reproductive rights just kind of at the core 0:27:14.240 --> 0:27:19.600 of you know, this this debate, and you know, fertility 0:27:20.160 --> 0:27:22.560 is usually thought of as like a way that you 0:27:22.560 --> 0:27:25.960 know someone. It's like a miracle, you know, for couples 0:27:26.040 --> 0:27:28.679 that haven't been able to have children. But as our 0:27:28.720 --> 0:27:31.399 story shows, depending on what your intentions are and how 0:27:31.680 --> 0:27:34.000 wealthy you are, it can also be used as a 0:27:34.040 --> 0:27:37.840 tool for exploitation. And two of the clinics are really 0:27:37.840 --> 0:27:42.080 well known. Kind Body acquired this other Chicago clinic that 0:27:42.240 --> 0:27:46.080 started it, but it also continued after they acquired them HRC. 0:27:46.280 --> 0:27:50.240 It's a major fertility network on the West Coast. A 0:27:50.320 --> 0:27:56.280 doctor who's treated celebrities was the one that Lindbergh preferred, 0:27:56.359 --> 0:27:58.400 and he was open about this, and we were able 0:27:58.480 --> 0:28:00.159 to kind of piece together some of the concerns and 0:28:00.200 --> 0:28:04.879 say clinic workers actually had specifically a kind Body with 0:28:05.440 --> 0:28:07.720 what they were doing. And you know that takes a 0:28:07.720 --> 0:28:10.760 lot of courage for for people who kind of see this, 0:28:11.119 --> 0:28:13.680 you know, playing out and and I think what our 0:28:13.720 --> 0:28:16.240 story does is, you know, at the end of the day, 0:28:16.320 --> 0:28:18.560 these guidelines are there for a reason, but you know, 0:28:18.600 --> 0:28:20.600 no one's really following up to see if doctors and 0:28:20.640 --> 0:28:21.920 clinics are actually following them. 0:28:22.080 --> 0:28:24.200 Hey, Jackie quickly, and then I'm gonna just encourage everyone 0:28:24.200 --> 0:28:26.040 once again to go and read this story. It's the 0:28:26.080 --> 0:28:27.879 most read on the terminal today for a reason. I 0:28:27.880 --> 0:28:31.800 could not put it down. He participated with you to 0:28:31.880 --> 0:28:35.639 a certain extent, but then cut off communication with you 0:28:36.240 --> 0:28:39.400 and the reporting team behind this, and then what happened. 0:28:40.760 --> 0:28:44.920 And there's still an ongoing, uh, you know, claim of defamation. 0:28:45.960 --> 0:28:50.600 He he, you know, alleged that we were interfering with 0:28:50.840 --> 0:28:55.520 a relationship with one of his surrogates. You know, obviously 0:28:55.640 --> 0:28:58.960 it's it's a touchy situation for him, and we were 0:28:59.000 --> 0:29:01.760 pretty forthcoming about out the direction of the story once 0:29:01.800 --> 0:29:04.600 we really cleared up the facts. But right now he's 0:29:04.600 --> 0:29:07.880 sitting in a county jail in North Carolina waiting to 0:29:07.920 --> 0:29:11.720 be sentenced. He was denied bail multiple times this last month, 0:29:12.320 --> 0:29:15.760 and we're not really sure where his story will end up. 0:29:15.800 --> 0:29:20.160 But you know, we stand by our reporting and you know, 0:29:20.280 --> 0:29:25.040 hope that folks out there can read it. 0:29:25.040 --> 0:29:28.840 It's an amazing read, unbelievable. Jackie, thank you so much. 0:29:28.880 --> 0:29:30.760 I'm really glad we were able to go through with you. 0:29:30.840 --> 0:29:33.600 Jackie Devalos, she's Bloomberg News Technology reporter of this story 0:29:33.880 --> 0:29:36.880 by she and Sophie Alexander of Bloomberg News. 0:29:37.000 --> 0:29:39.200 Check it out. At Bloomberg dot com and also on 0:29:39.240 --> 0:29:44.040 the Bloomberg terminal. Jackie, thanks, you're. 0:29:43.880 --> 0:29:47.440 Listening to the Bloomberg Business Week podcast. Catch us live 0:29:47.520 --> 0:29:51.160 weekday afternoons from two to five pm Eastern Listen on Apple. 0:29:50.960 --> 0:29:53.680 Car Play and then brought auto with a Bloomberg. 0:29:53.200 --> 0:29:56.800 Business app, or watch us live on YouTube. 0:29:58.560 --> 0:29:59.720 Well, some news out of China. 0:30:00.120 --> 0:30:02.720 US is unveiling these new restrictions on China's access to 0:30:02.800 --> 0:30:06.080 vital components for chips and AI. It escalates this campaign 0:30:06.080 --> 0:30:09.840 to contain Beijing's tech ambitions, but it stops short of 0:30:10.120 --> 0:30:13.600 earlier proposals that would have sanctioned more key Chinese firms. 0:30:13.640 --> 0:30:16.640 All right, so curious about all of this and what 0:30:16.680 --> 0:30:17.680 our next guest has to say. 0:30:17.680 --> 0:30:18.480 He's Ben Harberg. 0:30:18.520 --> 0:30:21.960 He thinks a lot about this region and the latest 0:30:21.960 --> 0:30:23.600 when it comes to investing in China. Ben is found 0:30:23.640 --> 0:30:26.800 in portfolio manager at Core Values Alpha. His team, by 0:30:26.840 --> 0:30:30.360 the way, manages the CBA Great China Growth ETF TICK 0:30:30.440 --> 0:30:31.720 or as CGROO. 0:30:32.080 --> 0:30:34.400 This year up just shy of ten and a half percent. 0:30:34.520 --> 0:30:37.600 It is down twenty percent though since October seventh, been 0:30:37.680 --> 0:30:39.040 joining us from RIOD. 0:30:39.040 --> 0:30:41.760 You're always somewhere. It's the wee hours. 0:30:42.560 --> 0:30:44.840 So are either staying up late or getting up super early? 0:30:44.880 --> 0:30:45.320 For us? 0:30:45.640 --> 0:30:46.160 What is it? 0:30:46.240 --> 0:30:46.800 Are you wait? 0:30:46.840 --> 0:30:47.720 What's going on in real? 0:30:47.920 --> 0:30:48.800 Look at you exacts? 0:30:48.800 --> 0:30:51.360 Are you on vacation a work trip? What's going on? 0:30:52.880 --> 0:30:55.320 I'm speaking at the World Football Summit here? 0:30:55.760 --> 0:30:56.960 A right, that's pretty cool. 0:30:57.880 --> 0:31:01.080 Iota on her team in Spain. So I talk a 0:31:01.080 --> 0:31:05.040 lot about my side. Hustle is running soccer teams. 0:31:05.120 --> 0:31:07.240 How much time do you spend doing that versus managing 0:31:07.280 --> 0:31:07.600 the fun? 0:31:07.760 --> 0:31:10.840 And can you do both? Obviously you could do both 0:31:10.880 --> 0:31:11.560 if you delegate. 0:31:11.600 --> 0:31:15.240 Well, I'd probably spend five percent of my time on 0:31:15.560 --> 0:31:16.840 football related. 0:31:16.560 --> 0:31:19.080 How much do you want to spend on soccer? 0:31:21.760 --> 0:31:23.120 I'm trying to cound turn the corner. 0:31:23.160 --> 0:31:25.320 Then I'll be all in on that, But no, I 0:31:25.320 --> 0:31:28.880 would love to spend more time. We'll slowly edge towards 0:31:28.920 --> 0:31:31.440 that as my net worth creepsire. 0:31:31.480 --> 0:31:35.080 I guess, so, Ben, is it easier to attract investors 0:31:35.120 --> 0:31:40.520 to invest in a sports team or soccer team than 0:31:40.560 --> 0:31:42.880 it is to get investors to invest in China? 0:31:43.000 --> 0:31:44.480 I ask you this, and I know we talk about 0:31:44.480 --> 0:31:44.880 this a lot. 0:31:44.960 --> 0:31:47.800 I mean, your fun is about seven point three million 0:31:47.840 --> 0:31:51.240 dollars in assets under management so I'm assuming you would. 0:31:51.000 --> 0:31:53.360 Like for it to be a lot more. So help 0:31:53.400 --> 0:31:54.120 me around here. 0:31:56.440 --> 0:31:58.360 You know, we have two over two billion dollars on 0:31:58.400 --> 0:32:00.840 the private side, So this is you know, this, this 0:32:00.960 --> 0:32:03.479 public strategy is newer for us, and it's a bit 0:32:03.520 --> 0:32:06.280 of a trial balloon, and we'll be adding new products 0:32:06.320 --> 0:32:09.719 into it shortly in the next couple of months. So 0:32:09.880 --> 0:32:11.680 you know, it's kind of a process of seeing what 0:32:11.720 --> 0:32:13.600 sticks to the wall on the ETF side, but we've 0:32:13.880 --> 0:32:16.960 we've obviously done well on the on the private side, 0:32:17.120 --> 0:32:18.160 I'd say today. 0:32:17.880 --> 0:32:19.840 It's probably easier to get people to invest in sports. 0:32:19.880 --> 0:32:22.880 Sports are hot right now, European football, particularly because the 0:32:22.920 --> 0:32:26.920 valuations are so low relative to their US peers. It's 0:32:26.960 --> 0:32:29.320 a highly inefficient industry and it's also one that's really 0:32:29.400 --> 0:32:31.520 fun to get involved with, and so you've seen some 0:32:31.560 --> 0:32:33.520 mega funds raised over the last few years in this 0:32:33.560 --> 0:32:34.600 space in terms of. 0:32:34.520 --> 0:32:36.880 The private investors. As you said over I think two billion, 0:32:36.920 --> 0:32:40.640 you said, is it the same similar investment strategy in 0:32:40.680 --> 0:32:42.960 terms of what you're trying to do this fun in particular, 0:32:43.400 --> 0:32:46.480 you look for those kind of tech enabled companies in 0:32:46.520 --> 0:32:51.280 Greater China, the Mainland, Taiwan, Hong Kong. Is it the 0:32:51.320 --> 0:32:53.560 same type of investing or is it something different that 0:32:53.560 --> 0:32:55.080 you're doing on the private side. 0:32:56.440 --> 0:32:59.440 It's obviously much earlier stage, so it's venture and growth investments. 0:32:59.480 --> 0:33:02.160 So company that are maybe you know, series seed, Series A, 0:33:02.280 --> 0:33:04.800 and then some pre IPO stuff and then obviously ETF 0:33:04.840 --> 0:33:05.400 is all public. 0:33:06.960 --> 0:33:08.720 Okay, So let's talk a little bit about now that 0:33:08.720 --> 0:33:12.640 we've sort of established the grounding stuff here, let's talk 0:33:12.640 --> 0:33:14.840 a little about opportunities that you see because we actually 0:33:15.000 --> 0:33:17.400 haven't had a chance to speak to you since the 0:33:18.120 --> 0:33:21.560 I don't want to call it reelection, but since President 0:33:21.600 --> 0:33:26.880 elect Donald Trump won back earlier last month, how does 0:33:26.880 --> 0:33:29.040 that change the outlook for China? Because on one hand, 0:33:29.480 --> 0:33:33.200 he talks incredibly tough about China. He implemented, he implemented 0:33:33.240 --> 0:33:36.920 tariffs that then the Biden administration kept, and he's talked 0:33:36.920 --> 0:33:39.720 about increasing tariffs on China when he takes office. 0:33:39.760 --> 0:33:43.400 How are you thinking about all this? I think you. 0:33:44.000 --> 0:33:47.800 Should be long short term book bearish and long term 0:33:48.280 --> 0:33:51.680 you know, optimistically or cautiously bullish, let's say. And I 0:33:51.680 --> 0:33:53.280 think that's because you're going to hear a lot of 0:33:53.320 --> 0:33:55.120 headlines and you're going to see a lot of news 0:33:55.160 --> 0:33:59.480 about very high tariff numbers and a whole saloop China 0:33:59.480 --> 0:34:04.440 hawks brought into the administration. But uh, and so I 0:34:04.440 --> 0:34:06.959 think that'll mean so really tough dealing at a very 0:34:07.040 --> 0:34:09.359 high bar set for the Chinese that they're going to 0:34:09.360 --> 0:34:13.280 have to deal with as they grapple with tracking investors 0:34:13.320 --> 0:34:15.279 back to the market. But I think in the long 0:34:15.400 --> 0:34:19.040 term you can be slightly bullish because Trump is a businessman, 0:34:19.080 --> 0:34:22.719 He's pragmatic, and there are things that can be done 0:34:22.840 --> 0:34:25.280 from the Chinese side to assuage some of the issues 0:34:25.480 --> 0:34:27.759 that he cares most about. He cares about the you know, 0:34:27.800 --> 0:34:33.440 the the reindustrialization of America, reshoring jobs, protecting American industries, 0:34:34.320 --> 0:34:37.319 and there are things that China can give up in 0:34:37.360 --> 0:34:39.680 an effort to appease that and to support that, and 0:34:40.040 --> 0:34:42.319 when they do, that can lead to a much more 0:34:42.360 --> 0:34:45.080 pragmatic dynamic in the relationship, rather than what you face 0:34:45.160 --> 0:34:49.319 with the Democrats, which is a very intractable dynamic where 0:34:49.320 --> 0:34:51.359 there's a whole sleet of issues that they care very 0:34:51.440 --> 0:34:53.560 much about that that that the China will never be 0:34:53.600 --> 0:34:57.120 able to reconcile and overcome, and therefore it just kind 0:34:57.120 --> 0:35:00.719 of draws on indefinitely as a kind of shell game. 0:35:00.920 --> 0:35:02.200 Hey Ben, you know one of the stories on the 0:35:02.239 --> 0:35:05.000 Bloomberg today we talked about the Chinese ten year yield 0:35:05.080 --> 0:35:08.560 dropping past the key psychological milestone of two percent. Was 0:35:08.600 --> 0:35:12.680 that a record low traders essentially kind of ramping up 0:35:12.719 --> 0:35:16.560 their bets that authorities would ease monetary policy further to 0:35:16.560 --> 0:35:20.680 bolster the week economy. When you think about China, what 0:35:20.800 --> 0:35:24.960 is more important to making it more investible for investors? 0:35:25.000 --> 0:35:28.680 Is it the US China relationship, Is it China figuring 0:35:28.680 --> 0:35:31.200 out it's real estate overhang, or is it something else? 0:35:33.200 --> 0:35:36.360 The key number for US is consumer behavior in China 0:35:36.400 --> 0:35:40.120 the key indicator. Everything else kind of is affected by that. 0:35:40.239 --> 0:35:44.600 So when you know geopolitics affect stock prices and valuations, 0:35:44.600 --> 0:35:47.480 they undercut people's home you know, kind of their savings, 0:35:47.480 --> 0:35:50.920 their portfolio, and therefore they consume less. And likewise, if 0:35:50.960 --> 0:35:55.600 real estate prices are falling and homes are going at 0:35:55.640 --> 0:35:58.760 lower prices and they were previously, again that undercuts people's 0:35:58.760 --> 0:36:02.480 confidence in the market. So all these measures to stabilize 0:36:02.480 --> 0:36:07.240 the property market to assuaye some of the geopolitical tensions, 0:36:07.239 --> 0:36:10.880 albeit very very minute, are in an effort to get 0:36:10.920 --> 0:36:13.120 the Chinese consumers back to the market, because the only 0:36:13.160 --> 0:36:15.360 way that China grows and the way that it survives, 0:36:15.440 --> 0:36:17.440 the way that it performs, the way people were hoping 0:36:17.440 --> 0:36:22.040 it would, you know, several years ago, is to establish 0:36:22.040 --> 0:36:24.920 it as a domestic consumption market and enable it to 0:36:24.960 --> 0:36:27.560 absorb a lot of these products that they're exporting outward, 0:36:27.800 --> 0:36:30.840 because they simply cannot afford to continue to run trade 0:36:31.000 --> 0:36:34.160 deficits with every country or state surpluses. If you're sitting 0:36:34.200 --> 0:36:36.560 on the Chinese side with every country around. 0:36:36.280 --> 0:36:37.920 The world I've been a few years ago. 0:36:37.920 --> 0:36:40.600 If we were talking to you, you know, the conversation 0:36:40.640 --> 0:36:43.239 we'd be having is, so, you know, Chinese is going 0:36:43.280 --> 0:36:47.240 to overtake the US as the largest economy in the world, 0:36:47.400 --> 0:36:50.560 and it's going to do that very soon. That narrative 0:36:50.600 --> 0:36:53.239 certainly has shifted. But do you think that does end 0:36:53.320 --> 0:36:54.240 up happening eventually? 0:36:57.760 --> 0:37:02.279 I think the numbers would say it does. And just again, 0:37:02.320 --> 0:37:04.600 the efficiency of the Chinese economy is still quite low. 0:37:04.640 --> 0:37:06.640 There's there's a lot more that can still be done 0:37:06.680 --> 0:37:09.960 to brew their efficiency. Uh, they are very well positioned 0:37:10.000 --> 0:37:12.280 in what I would call kind of the fifth Industrial Revolution, 0:37:12.480 --> 0:37:15.000 right or you know, with you with all the types 0:37:15.040 --> 0:37:18.960 of key hardware and even consumer facing software that's really 0:37:19.040 --> 0:37:22.040 redefining the way we engage with technology. So mobile first, 0:37:22.640 --> 0:37:27.840 everything from entertainment, payments, commerce level, and then of course 0:37:27.920 --> 0:37:34.320 all of the leadership across electric vehicles, you know, mobile handsets, 0:37:34.360 --> 0:37:37.400 et cetera. So my view is that China's well positioned 0:37:37.440 --> 0:37:42.040 for the this new age and particularly for digitally native consumers. 0:37:43.040 --> 0:37:44.719 But there are a lot of things that are undermining that. 0:37:44.760 --> 0:37:48.680 The the anemic and population growth in China, I think, 0:37:48.719 --> 0:37:52.360 the lack of turnover within the Chinese Central Party and 0:37:52.480 --> 0:37:56.560 changing regimes as they had historically, and and just an 0:37:56.560 --> 0:38:01.040 overall kind of saturated economy or under and a higher 0:38:01.080 --> 0:38:02.560 saturation than was previously. 0:38:02.600 --> 0:38:03.520 I think there a faster. 0:38:03.360 --> 0:38:06.480 Situation than previously would have been predicted, is undermining the 0:38:06.520 --> 0:38:10.280 ability for that, uh, that prophecy to come true quickly. 0:38:10.600 --> 0:38:12.440 Hey listen, I'm looking at the holding has been in 0:38:12.520 --> 0:38:15.400 your fun ten Cent Jamie, p d D. 0:38:16.239 --> 0:38:20.120 Chip dot Com some of them b I d uh. 0:38:20.640 --> 0:38:24.320 How often are you buying selling moving these names around? 0:38:24.400 --> 0:38:26.400 How are you like thinking about what you want to 0:38:26.440 --> 0:38:27.480 have in this portfolio. 0:38:29.360 --> 0:38:32.000 Our view was that China was too dynamic a market 0:38:32.000 --> 0:38:34.080 to be passively traded. So we thought one of our 0:38:34.080 --> 0:38:37.319 differentiers would be that we were active, and so that 0:38:37.400 --> 0:38:39.800 enables us to move in and out for particularly across 0:38:39.840 --> 0:38:43.560 share classes, so a shares as shares or a shares 0:38:44.520 --> 0:38:47.200 the you know, the ad rs and the eighth shares, 0:38:48.760 --> 0:38:50.759 and we think that in this dynamic as well, you 0:38:50.840 --> 0:38:52.319 need to be moving in and out of those because 0:38:52.360 --> 0:38:53.839 you're going to see the the ad rs get hit 0:38:53.840 --> 0:38:56.160 every now and again, but the main land indexes are 0:38:56.239 --> 0:38:59.839 flying and you know, retail buyers are pouring into those ingles. 0:39:00.080 --> 0:39:02.040 So I do think that you've got to be active. 0:39:02.280 --> 0:39:04.280 And then what we're trying to do is position ourselves 0:39:04.280 --> 0:39:07.160 in that product for what we think will be the 0:39:07.480 --> 0:39:09.560 you know, the immediate knock on effects of some of 0:39:09.560 --> 0:39:12.360 these stimulus policies which will help improve some of the 0:39:12.880 --> 0:39:16.080 domestic consumption narratives. And so therefore, you know, those those 0:39:16.120 --> 0:39:18.319 consumer facing names that we put at the top of 0:39:18.360 --> 0:39:21.120 the holdings will probably see benefit the fastest. 0:39:21.880 --> 0:39:24.440 Ben What stimulus policies do you think are forthcoming that 0:39:24.480 --> 0:39:27.840 we don't like? What are you anticipating that we haven't 0:39:27.840 --> 0:39:28.600 heard about yet? 0:39:30.920 --> 0:39:32.600 You know, I don't know if I point to anything 0:39:32.680 --> 0:39:34.920 really specific. And I still think that a lot of 0:39:34.960 --> 0:39:37.520 the stimulus is more narrative than it is. It's kind 0:39:37.520 --> 0:39:40.600 of more form than function in the sense that it's 0:39:40.680 --> 0:39:43.960 it's not truly having a material impact on the bottom line. 0:39:43.800 --> 0:39:46.600 The thing we're looking for is just that kind of 0:39:46.640 --> 0:39:50.680 sustain momentum that people within China and externally feel that 0:39:50.719 --> 0:39:54.279 the government is serious about growth, furious about cleaning out 0:39:54.320 --> 0:39:56.880 some of the bad debts, some of the you know, 0:39:57.040 --> 0:39:58.959 things that it has under his control, and of course 0:39:59.080 --> 0:40:02.920 the geopolitics are less under its control today than ever before, 0:40:03.800 --> 0:40:06.680 and that those would then almost kind of jump start 0:40:06.800 --> 0:40:09.880 like sparking an engine for a spacecraft, but spark the 0:40:09.920 --> 0:40:14.080 engine of consumer growth, and that people would kind of 0:40:14.080 --> 0:40:17.520 return to the retail, return to High Street, start spending a. 0:40:17.520 --> 0:40:18.719 Little bit more because the money is there. 0:40:18.760 --> 0:40:20.919 I mean, we're sitting there in those bank accounts twenty 0:40:20.960 --> 0:40:25.759 one trillion and counting of household savings and dollars, much 0:40:25.760 --> 0:40:27.960 more than is in the US, and so there's a 0:40:28.040 --> 0:40:31.200 huge potential to be unlocked. But the people have to 0:40:31.239 --> 0:40:33.200 kind of feel that, and so I think they were 0:40:33.239 --> 0:40:35.719 holding back of waiting for Trump and hopefully you'll see 0:40:35.719 --> 0:40:36.480 more things from here. 0:40:36.640 --> 0:40:39.080 Hey, just got one time for another question, one more 0:40:39.120 --> 0:40:41.440 question forty seconds or so left here and going back 0:40:41.440 --> 0:40:45.120 to your holdings. I don't think I see TSM Taiwan Semiconductor. 0:40:45.160 --> 0:40:47.279 Is there reason? Why? Is it just too big or 0:40:47.320 --> 0:40:49.719 what I mean? It's up eighty seven percent this year. 0:40:51.400 --> 0:40:53.160 We've moved in and out of it, and we even 0:40:53.239 --> 0:40:55.440 sometimes have had Nvidia and some of the other companies 0:40:55.480 --> 0:40:58.920 that still have significant revenue coming out of China. But 0:40:59.360 --> 0:41:01.319 in this current on the portfolio, it's not there. 0:41:01.800 --> 0:41:02.120 All right. 0:41:02.200 --> 0:41:04.919 Good to know, good to know, So appreciate it, Ben, 0:41:04.920 --> 0:41:07.480 Thank you so much. Go get some sleep, Ben, Harvard, 0:41:07.800 --> 0:41:08.160 play some. 0:41:08.200 --> 0:41:11.080 Soccer, talk about some soccer. Wait, wait, wait, Ben, we 0:41:11.160 --> 0:41:13.439 have like twenty seconds. What's your team? What's your team 0:41:13.440 --> 0:41:14.360 in Spain called. 0:41:15.320 --> 0:41:22.760 It's called Cotti's Oh yeah, oh it's it's glorious, mister sherry, 0:41:22.840 --> 0:41:26.560 but one plug. We have sherry just next door. But 0:41:26.719 --> 0:41:29.320 some of the best food in the world. The oldest 0:41:29.320 --> 0:41:32.319 continuously inhabited city in Western Europe. Our stadium is one 0:41:32.360 --> 0:41:35.440 hundred and fifty meters from the beach. Just a glorious 0:41:35.440 --> 0:41:36.160 place for football. 0:41:36.239 --> 0:41:37.759 Wait, so are you there for the sports? Are you 0:41:37.840 --> 0:41:41.040 just there for the view and the food and everything. 0:41:41.200 --> 0:41:44.080 Yeah, everything all in all in all right, Ben Harberg, 0:41:44.200 --> 0:41:48.479 founder and portfolio manager at Core Values Alpha, joining us 0:41:48.480 --> 0:41:51.120 from Riod on this Monday, December second. 0:41:51.160 --> 0:41:53.040 All right, folks, we got about twenty six minutes to 0:41:53.040 --> 0:41:54.040 go into the closing down. 0:41:54.040 --> 0:41:55.200 I'm thinking about Spain. 0:41:55.400 --> 0:41:58.200 I want to look at this map of the soccer 0:41:58.239 --> 0:42:02.920 teams where this place is umbrother mac. 0:42:04.560 --> 0:42:05.280 A journal. 0:42:06.280 --> 0:42:07.279 Now about you let me drive? 0:42:07.800 --> 0:42:13.000 No no, no, no, please, honey please, I'll do the drive gravels, 0:42:13.200 --> 0:42:16.080 excuse mate, I want to try it. 0:42:17.080 --> 0:42:18.919 It's a good question time. 0:42:21.760 --> 0:42:24.320 This is the drive to the clothes. 0:42:25.120 --> 0:42:27.120 We'll buy around Yethern. 0:42:26.960 --> 0:42:28.200 On Bluemberg Radio. 0:42:28.480 --> 0:42:29.720 All right, everybody, TikTok. 0:42:30.320 --> 0:42:32.759 We are about nineteen minutes away from the closing bell, 0:42:32.880 --> 0:42:36.520 and we have seen the next one hundred just uh, 0:42:36.680 --> 0:42:38.760 pretty much hovering you near its highs of the session. 0:42:38.880 --> 0:42:41.320 So as we just heard about about two hundred and 0:42:41.320 --> 0:42:43.000 forty two points, so good for a game of almost 0:42:43.000 --> 0:42:45.200 one point two percent s and p just call it 0:42:45.239 --> 0:42:47.080 a little bit higher. But I do know that we've 0:42:47.080 --> 0:42:49.640 been hovering near some records throughout the days. We'll see 0:42:49.640 --> 0:42:52.000 whether or not we close at a record record. 0:42:52.160 --> 0:42:54.160 Did you close on at highs on on Friday? 0:42:54.160 --> 0:42:54.440 We did? 0:42:54.560 --> 0:42:55.600 I really kind of tuned out. 0:42:55.640 --> 0:42:58.080 Sorry so offended it. 0:42:58.640 --> 0:43:00.480 I did think about you. I did the about you 0:43:00.480 --> 0:43:02.080 while you were doing your duty here? 0:43:02.080 --> 0:43:05.319 What do you say of thoughts? And there's like if some. 0:43:05.360 --> 0:43:07.440 Bets for candy nuts? We don't have fun at Christmas? 0:43:07.440 --> 0:43:07.960 Oh okay. 0:43:08.080 --> 0:43:09.800 It's a friend of mine in college. She used to 0:43:09.800 --> 0:43:10.359 say it all the time. 0:43:10.400 --> 0:43:13.080 Well, finally we're getting to Christmas season we are. Yeah, 0:43:13.120 --> 0:43:16.759 so you know it's even more apt. Hey, uh no, 0:43:16.840 --> 0:43:19.000 good segue here. But we always like to check in 0:43:19.000 --> 0:43:21.440 with Jimmy Lee. He's the founder and CEO over at 0:43:21.440 --> 0:43:23.920 the Wealth Consulting Group. They've got about five billion dollars 0:43:23.960 --> 0:43:25.200 in assets under management. 0:43:25.520 --> 0:43:26.720 Usually he's in Las Vegas. 0:43:26.760 --> 0:43:29.279 Sometimes he graces us with his presence here at the 0:43:29.280 --> 0:43:32.000 Bloomberg Interactor Brokers studio in New York. Today he's in 0:43:32.040 --> 0:43:35.879 Costa Rica. Jimmy, what are you doing in Costa Rica. 0:43:36.440 --> 0:43:40.600 I'm on a little personal vacation with some family, so 0:43:41.400 --> 0:43:42.200 enjoying the weather. 0:43:42.400 --> 0:43:44.719 All right, Well, it's a beautiful place, it is. 0:43:45.040 --> 0:43:47.040 I'm sorry that you're stuck in your hotel room zooming 0:43:47.120 --> 0:43:50.120 with us on this Monday afternoon. I hope you you know, 0:43:50.120 --> 0:43:51.839 we won't keep you for long and you can get 0:43:51.880 --> 0:43:53.759 back down out there in Costa Rica. 0:43:53.800 --> 0:43:55.879 It's the food, it's the environment. They don't spend money 0:43:55.920 --> 0:43:58.120 on military. It's really cool. But the monkey's right there 0:43:58.160 --> 0:44:00.319 in the trees. I still like, we still I'll get 0:44:00.360 --> 0:44:02.239 up early and we call it monkey TV. We just 0:44:02.239 --> 0:44:03.960 sit there and watch the monkeys waking up. 0:44:05.040 --> 0:44:06.799 It was on the beach this morning, Carol, and they 0:44:06.800 --> 0:44:09.000 were right above us having fun, hanging out. 0:44:09.400 --> 0:44:11.160 But I would always go into my room to do 0:44:11.239 --> 0:44:12.319 your show. I love your show. 0:44:12.480 --> 0:44:15.919 Okay, that's Jimmy saying, all right, guys, enough about Coaster Rica. 0:44:15.960 --> 0:44:19.640 Can we talk about the market? Where are we listen? 0:44:19.840 --> 0:44:23.319 I mean, by many accounts, you know, certainly the US 0:44:23.400 --> 0:44:26.880 equity trade is going to you know, unless something happens 0:44:26.960 --> 0:44:28.680 in this last month, it's going to be a. 0:44:28.680 --> 0:44:31.080 Pretty good year. What's your take? 0:44:31.120 --> 0:44:33.719 Two good years now we've seen four stocks. Sometimes it's 0:44:33.719 --> 0:44:36.240 hard to keep that momentum going after two up years. 0:44:36.560 --> 0:44:39.479 What are you thinking about here in terms of what's 0:44:39.520 --> 0:44:41.640 the most investable part of the US market? 0:44:41.640 --> 0:44:42.200 What is not? 0:44:44.200 --> 0:44:46.120 Well, that's an interesting question. 0:44:46.400 --> 0:44:48.839 And as I've been on a guest on your show 0:44:48.920 --> 0:44:51.120 for a long time. Now, you know that I've been 0:44:51.120 --> 0:44:55.160 fairly bullish on equities for the last years, and in 0:44:55.160 --> 0:44:58.040 the timeframe where a lot of economists were just predicting 0:44:58.080 --> 0:45:00.680 a recession primarily I think because of the data they 0:45:00.680 --> 0:45:03.560 were looking at historically suggested that we're going to face 0:45:03.560 --> 0:45:04.640 the recession. 0:45:04.520 --> 0:45:05.640 Which hasn't occurred. 0:45:06.200 --> 0:45:09.359 Of course, tech doocs have led the way, the Max 0:45:09.400 --> 0:45:11.720 seven have you been a big part of the story 0:45:12.239 --> 0:45:14.279 on all the major indexes going up as much as 0:45:14.280 --> 0:45:14.520 they have. 0:45:14.680 --> 0:45:17.160 But recently we've seen the market broad now. 0:45:17.440 --> 0:45:17.839 You know, the. 0:45:17.800 --> 0:45:22.240 Sectors that we've talked about that we're not participating are 0:45:22.640 --> 0:45:27.720 participating now, like finance, financial sector, industrials, you know, small 0:45:27.800 --> 0:45:29.359 caps in terms of market. 0:45:29.040 --> 0:45:30.719 Cap are doing much better now. 0:45:31.239 --> 0:45:33.160 So across the board you're seeing a lot of different 0:45:33.480 --> 0:45:37.640 areas participate, and I think recently that's because we've had 0:45:37.680 --> 0:45:39.120 so much money sitting on the sidelines. 0:45:39.160 --> 0:45:41.239 We still do. One of the things that we track 0:45:41.280 --> 0:45:42.600 on our Investment Committee. 0:45:42.200 --> 0:45:45.360 Weekly is the amount of cash going into ETFs and 0:45:45.440 --> 0:45:50.040 mutual funds, into equities, fixed income and money markets. And 0:45:50.520 --> 0:45:52.960 you know, people keep putting money into cash, believe or not. 0:45:53.000 --> 0:45:55.000 I think it's probably from a lot of the treasuries 0:45:55.040 --> 0:45:55.680 are coming to do. 0:45:55.680 --> 0:45:57.520 And they're not sure what to do with it yet. 0:45:57.760 --> 0:46:00.360 But the people that want to participate, I think, I think, 0:46:00.600 --> 0:46:03.080 you know, they're looking for pockets of the market that 0:46:03.120 --> 0:46:06.680 are less expensive, like value stocks, like small cap stocks, 0:46:06.719 --> 0:46:09.960 and I do believe that those cyclical sectors or areas 0:46:10.040 --> 0:46:11.640 that we can invest into. 0:46:12.160 --> 0:46:14.960 I also think that bonds now with the yields. 0:46:14.920 --> 0:46:18.840 Climbing back up as they did after the first rate cut, 0:46:19.239 --> 0:46:21.439 I think there's value in bonds too, So I think 0:46:21.640 --> 0:46:24.160 there's a few areas that investors could get value in. 0:46:24.520 --> 0:46:28.160 Why do you think investors are still on the sidelines. 0:46:29.600 --> 0:46:32.920 Well, Tim, I think it's just this uncertainty, and you know, 0:46:34.360 --> 0:46:37.120 I think a lot of people were fooled. You know 0:46:37.239 --> 0:46:40.799 that the five percent treasury was the best place to go. 0:46:40.920 --> 0:46:42.960 Now again, we've talked about this before. For your money 0:46:43.000 --> 0:46:46.319 sitting in checking account deposits that we're not earning any interest. 0:46:46.080 --> 0:46:47.040 That was a great move. 0:46:47.600 --> 0:46:50.000 But for people that took money out of stocks to 0:46:50.040 --> 0:46:53.120 put it into treasuries and money markets, I think we're 0:46:53.200 --> 0:46:56.120 just listening to the headline news and not paying attention 0:46:56.239 --> 0:46:59.719 to you know, maybe what the companies were doing that 0:46:59.719 --> 0:47:03.440 they're invested in in terms of earnings, and you know, 0:47:03.520 --> 0:47:05.400 for the most part, I think a lot of people 0:47:05.440 --> 0:47:10.880 that normal investors, not retail investors, not institutional investors, you know, 0:47:10.960 --> 0:47:12.200 just don't pay enough attention to this. 0:47:12.280 --> 0:47:13.759 And so they look at the headline news and they 0:47:13.760 --> 0:47:14.760 hear a violid recession. 0:47:14.840 --> 0:47:17.319 And while the market's gone up a lot, for a 0:47:17.320 --> 0:47:20.359 lot of Americans, it hasn't felt that great because we've 0:47:20.360 --> 0:47:22.080 had a lot of inflation over the last couple of years. 0:47:22.120 --> 0:47:25.879 So I think the feeling of a bad economy kind 0:47:25.880 --> 0:47:29.280 of maybe overtook their investor. Investor behavior, which is always 0:47:29.360 --> 0:47:32.359 what we fight against as financial advisors, is investors are 0:47:32.360 --> 0:47:33.759 always trying to put a lot of money at the 0:47:33.760 --> 0:47:36.400 tops and selling out when there's a little bit of panic. 0:47:38.560 --> 0:47:41.400 Yeah, no, it's I get it, I get it right. 0:47:41.440 --> 0:47:46.080 We talked about that investor sentiment so important. I mean, ultimately, Jimmy, 0:47:46.320 --> 0:47:48.240 you know, we're just kind of wrapping up an earning season, 0:47:48.280 --> 0:47:49.680 but I think about you know, we go from earning 0:47:49.680 --> 0:47:51.400 season too earning season. But that is really kind of 0:47:51.440 --> 0:47:56.239 our gut check, right, our transparency on really how companies 0:47:56.520 --> 0:48:00.480 are doing when it comes to growing the top line eenses. 0:48:01.080 --> 0:48:03.520 Are they upbeat about spending in the new year. I mean, 0:48:03.600 --> 0:48:06.840 these are the important things that ultimately determine whether or 0:48:06.840 --> 0:48:10.920 not investing in stocks makes sense or at what valuation 0:48:11.080 --> 0:48:11.799 doesn't make sense. 0:48:13.880 --> 0:48:17.520 Yes, And as you know, earnings have been pretty darn good, 0:48:17.760 --> 0:48:20.239 you know, in the face of higher interest rates and 0:48:20.440 --> 0:48:23.880 all the different obstacles that we do have in the economy. 0:48:23.880 --> 0:48:26.840 And you know, certainly there's a little bit of softness 0:48:26.880 --> 0:48:29.439 and a lot of the data that we've seen, whether 0:48:29.480 --> 0:48:31.800 it's manufacturing or even a little bit of softness and 0:48:31.840 --> 0:48:35.000 the employment and data. But for the most parts, I 0:48:35.000 --> 0:48:39.600 think post election, people you know, are thinking that things 0:48:39.680 --> 0:48:44.080 are potentially more hopeful for next year. As you know, 0:48:44.320 --> 0:48:46.000 everybody is going to feel a little bit better when 0:48:46.040 --> 0:48:48.839 interest rates are lower. If you think about the kind 0:48:48.880 --> 0:48:53.040 of you know, interest payments that consumers make, so credit 0:48:53.040 --> 0:48:58.600 card payments, auto loans, mortgages. As rates come down, as 0:48:58.600 --> 0:49:01.839 the tenure comes down and those interest rates on those 0:49:01.840 --> 0:49:04.000 types of consumer debt comes down, I think people are 0:49:04.080 --> 0:49:06.880 going to start to feel a lot better. And I 0:49:06.920 --> 0:49:10.239 think that the jobs situation and the plumbing situation is 0:49:10.239 --> 0:49:13.360 going to remain pretty strong, and so I'm very hopeful 0:49:13.360 --> 0:49:16.759 about about next year. You know that we're we're going 0:49:16.800 --> 0:49:20.440 to be going into an environment with lower rates. I 0:49:20.440 --> 0:49:22.919 think consumer sentiment is going to get better. I think 0:49:23.040 --> 0:49:25.719 the c suite of large companies and small companies can 0:49:25.760 --> 0:49:27.719 be a bit more bullish about cappacks and where they're 0:49:27.719 --> 0:49:31.400 going to invest, and hopefully what we'll see is a 0:49:31.440 --> 0:49:33.720 soft landing. You know that the FED actually does engineer 0:49:33.840 --> 0:49:36.319 soft landing. I would absolutely love to see interest rates 0:49:36.360 --> 0:49:39.680 go lower. I don't think inflation is nearly the problem 0:49:39.840 --> 0:49:42.640 that the headline numbers suggest. You know, if you look 0:49:42.640 --> 0:49:46.000 at what housing, how housing plays into the headline numbers. 0:49:46.040 --> 0:49:48.480 We know that real time rents are lower, and so 0:49:48.880 --> 0:49:50.919 once it starts getting into the numbers, I think things 0:49:50.960 --> 0:49:53.279 will will look better and hopefully twenty twenty five ends 0:49:53.320 --> 0:49:54.000 up being a good year. 0:49:54.200 --> 0:49:56.839 Yeah, I feel like we've got to get into it 0:49:56.920 --> 0:49:59.480 and kind of get a good feel of the policies 0:49:59.480 --> 0:50:02.800 that might come from administration and how that impacts, you know, 0:50:02.840 --> 0:50:06.400 the corporate environment, certainly for those publicly held entities. Jimmy, 0:50:06.400 --> 0:50:08.640 thank you so much, really appreciate being able to check 0:50:08.680 --> 0:50:09.080 in with you. 0:50:09.680 --> 0:50:11.920 Happy New year. If we don't get to you before 0:50:11.960 --> 0:50:13.120 the end of the year, come back to you. 0:50:13.200 --> 0:50:15.600 Jimmy Lee, He's founder and chief executive officer at Wealth 0:50:15.600 --> 0:50:18.680 Consulting Group, joining us on this Monday in December from 0:50:18.719 --> 0:50:22.359 Costa Rica, where I'm assuming it's a little warmer Costa Rica. 0:50:22.440 --> 0:50:24.120 I don't know if it's warmer than Las Vegas. 0:50:24.239 --> 0:50:25.000 That's the temperature. 0:50:25.800 --> 0:50:27.960 I'm looking it up right now. You know what it is. 0:50:28.000 --> 0:50:31.360 It's about seventy degrees there. Yeah, so it's kind of perfect. 0:50:31.520 --> 0:50:33.120 It's kind of perfect. Yeah. 0:50:33.239 --> 0:50:35.799 This is the Bloomberg Business Week Podcast. 0:50:35.920 --> 0:50:36.680 I'll available on. 0:50:36.719 --> 0:50:40.040 Apple and Spotify and anywhere else you get your podcast. 0:50:40.520 --> 0:50:43.880 Listen live weekday afternoons from two to five pm Eastern 0:50:44.000 --> 0:50:47.440 on Bloomberg dot Com, the iHeartRadio app, tune In, and 0:50:47.480 --> 0:50:50.240 the Bloomberg Business App. You can also watch us live 0:50:50.320 --> 0:50:54.200 every weekday on YouTube and always on the Bloomberg Journal alone.