1 00:00:00,240 --> 00:00:02,440 Speaker 1: This is Bloomberg Wall Street Week. 2 00:00:02,480 --> 00:00:04,400 Speaker 2: And we may not have an overall recession, we're having 3 00:00:04,400 --> 00:00:06,720 Speaker 2: a rolling recession. To kind of roll looks pretty strongly 4 00:00:06,760 --> 00:00:07,680 Speaker 2: is when it comes to jobs. 5 00:00:07,720 --> 00:00:09,840 Speaker 1: The financial stories that shape our world. 6 00:00:09,960 --> 00:00:13,600 Speaker 2: Three major regional bank failures send shockwaves through the banking system. 7 00:00:13,680 --> 00:00:15,440 Speaker 2: We're all trying to figure out what to make of 8 00:00:15,600 --> 00:00:17,000 Speaker 2: generative AI. 9 00:00:16,920 --> 00:00:19,320 Speaker 1: Through the eyes of the most influential voices. 10 00:00:19,440 --> 00:00:22,400 Speaker 2: Welcome down, Doctor Paul Krugman, Ryan moynihan, AM Bank of America, 11 00:00:22,560 --> 00:00:25,279 Speaker 2: Zebro Lair of the Paulson Institute, well then Hubbard of 12 00:00:25,280 --> 00:00:26,280 Speaker 2: the Columbia Business School. 13 00:00:26,280 --> 00:00:30,160 Speaker 1: Bloomberg Wall Street Week with David Weston from Bloomberg Radio. 14 00:00:30,360 --> 00:00:33,240 Speaker 2: The chair goes to the hill, voters go to the polls, 15 00:00:33,320 --> 00:00:35,600 Speaker 2: and the jobs market, well, it just keeps on going. 16 00:00:36,080 --> 00:00:39,240 Speaker 2: This is Bloomberg Wall Street Week. I'm David Weston. This 17 00:00:39,400 --> 00:00:42,280 Speaker 2: make Larry Kulp of GE joins the newly minted CEO 18 00:00:42,320 --> 00:00:45,360 Speaker 2: of spinoff Vernova, Scott Strazek, to take us through the 19 00:00:45,440 --> 00:00:48,080 Speaker 2: last steps in the restructure of an iconic company. 20 00:00:48,360 --> 00:00:51,080 Speaker 3: Given that the capital markets clearly liked the businesses but 21 00:00:51,120 --> 00:00:54,480 Speaker 3: didn't like them together, it was actually an easy decision. 22 00:00:54,080 --> 00:00:56,960 Speaker 4: Sustainability really is at the heart of everything we're doing. 23 00:00:57,120 --> 00:01:00,600 Speaker 2: Ill as Sally Crotcheck on the massive wealth trans to women, 24 00:01:00,720 --> 00:01:01,800 Speaker 2: we're about to see. 25 00:01:01,840 --> 00:01:05,440 Speaker 5: Women are going to inherit tens of trillions of dollars 26 00:01:05,560 --> 00:01:07,479 Speaker 5: over the next couple of decades. 27 00:01:07,160 --> 00:01:10,520 Speaker 2: And Economist editor Zanni Minton Bedos on a US China 28 00:01:10,600 --> 00:01:13,520 Speaker 2: economic competition that goes to the heart of two very 29 00:01:13,560 --> 00:01:14,520 Speaker 2: different systems. 30 00:01:14,560 --> 00:01:16,360 Speaker 6: I think it's only a slight exaggeration to say that 31 00:01:16,440 --> 00:01:31,160 Speaker 6: China has sort of become uninvestable for outsiders in many sectors. 32 00:01:32,800 --> 00:01:35,920 Speaker 2: But we begin with the number one issue that's been 33 00:01:35,959 --> 00:01:38,600 Speaker 2: on the mind of Global Wall Street since inflation numbers 34 00:01:38,640 --> 00:01:41,240 Speaker 2: first shot up back in twenty twenty, something our special 35 00:01:41,280 --> 00:01:44,040 Speaker 2: contributor Larry Summers warned us about at the time. 36 00:01:44,680 --> 00:01:48,920 Speaker 7: I think there's a real possibility that within the year 37 00:01:49,480 --> 00:01:53,800 Speaker 7: we're going to be dealing with the most serious incipient 38 00:01:53,920 --> 00:01:58,040 Speaker 7: inflation problem that we have faced in the last forty years. 39 00:01:58,240 --> 00:02:00,680 Speaker 2: Throughout the three year battle of them, and there's been 40 00:02:00,720 --> 00:02:03,920 Speaker 2: a question whether it could be tamed without higher unemployment. 41 00:02:04,440 --> 00:02:06,920 Speaker 8: I've said that I'd be surprised if we get to 42 00:02:06,960 --> 00:02:12,760 Speaker 8: the two percent inflation target without an unemployment rate that 43 00:02:13,000 --> 00:02:16,240 Speaker 8: approaches or exceeds six percent. 44 00:02:16,720 --> 00:02:19,480 Speaker 2: But on Friday this week we got the latest jobs numbers, 45 00:02:19,480 --> 00:02:23,600 Speaker 2: and unemployment stayed under four percent, even as inflation continues 46 00:02:23,639 --> 00:02:27,080 Speaker 2: to moderate, something that's led Larry to reassess the possibility 47 00:02:27,120 --> 00:02:30,160 Speaker 2: of a so called soft landing, one where inflation comes 48 00:02:30,200 --> 00:02:33,240 Speaker 2: back in line without a lot of people losing their jobs. 49 00:02:33,600 --> 00:02:36,720 Speaker 8: Things did come back in a way that was more 50 00:02:36,840 --> 00:02:43,240 Speaker 8: favorable than standard models would have expected, though I'm much 51 00:02:43,360 --> 00:02:46,960 Speaker 8: less prepared to declare that it's all over. 52 00:02:47,360 --> 00:02:49,359 Speaker 2: And we are joined once again by our very special 53 00:02:49,360 --> 00:02:51,440 Speaker 2: contributor here on Wall Street Week. He is Larry Summers 54 00:02:51,440 --> 00:02:53,359 Speaker 2: of Harvard Luri, thanks so much for being with us. 55 00:02:53,440 --> 00:02:55,799 Speaker 2: On Friday, we got the jobs numbers out. They were 56 00:02:55,840 --> 00:02:58,040 Speaker 2: a little lower than some people expect that and particularly 57 00:02:58,040 --> 00:03:00,160 Speaker 2: when you look at the revisions from last month. What 58 00:03:00,240 --> 00:03:01,880 Speaker 2: did you make of these jobs numbers? 59 00:03:02,360 --> 00:03:07,040 Speaker 8: I don't think they changed anybody's picture very fundamentally of 60 00:03:07,080 --> 00:03:15,120 Speaker 8: the economy. We've got a strong economy. Inflation has come down, 61 00:03:15,880 --> 00:03:22,639 Speaker 8: inflation is not yet at the FEDS two percent target, 62 00:03:23,440 --> 00:03:31,040 Speaker 8: but job growth, even on a slower basis, remains considerably 63 00:03:31,080 --> 00:03:36,800 Speaker 8: more rapid than underlying population growth. So we've got a 64 00:03:36,840 --> 00:03:39,000 Speaker 8: relatively strong economy. 65 00:03:38,880 --> 00:03:40,440 Speaker 2: Well, and that raises the question what does that mean 66 00:03:40,440 --> 00:03:43,360 Speaker 2: for monetary policy. I mean, one question we ask sometimes 67 00:03:43,400 --> 00:03:45,320 Speaker 2: if people at the FED is why are we talking 68 00:03:45,320 --> 00:03:47,280 Speaker 2: about rate cuts right now when economy seems to be 69 00:03:47,360 --> 00:03:49,920 Speaker 2: doing so well and weathering this five and a half 70 00:03:49,960 --> 00:03:50,880 Speaker 2: percent rate. 71 00:03:51,440 --> 00:03:55,280 Speaker 8: There's something very fundamental that has happened that I'm not 72 00:03:55,320 --> 00:03:58,880 Speaker 8: sure that the FED has fully realized. I think the 73 00:03:59,600 --> 00:04:05,120 Speaker 8: neral interest straight is way above the two and a 74 00:04:05,160 --> 00:04:10,760 Speaker 8: half percent that the FED likes to talk about. I think, 75 00:04:10,800 --> 00:04:15,040 Speaker 8: given the experience of the last several years, that the 76 00:04:15,080 --> 00:04:21,799 Speaker 8: market perceives normal inflation as probably being somewhat above two percent, 77 00:04:23,640 --> 00:04:27,240 Speaker 8: at least on a CPI basis. And I think that 78 00:04:28,760 --> 00:04:35,000 Speaker 8: huge deficits more spending to come, substantial investments in renewables, 79 00:04:35,600 --> 00:04:43,480 Speaker 8: substantial investments in resilience, substantial capital costs of various kinds 80 00:04:44,040 --> 00:04:52,800 Speaker 8: associated with artificial intelligence and aging population meaning more dissavers 81 00:04:53,640 --> 00:04:59,479 Speaker 8: less capital flow coming from abroad. I think all of 82 00:04:59,480 --> 00:05:03,080 Speaker 8: that means a much higher neutral real interest rate. So 83 00:05:03,120 --> 00:05:08,120 Speaker 8: I think when the FED compares five percent with the 84 00:05:08,240 --> 00:05:11,680 Speaker 8: two and a half percent neutral rate, it sees and 85 00:05:11,800 --> 00:05:16,960 Speaker 8: people say that monetary policy is substantially restrictive. That's wrong. 86 00:05:17,560 --> 00:05:20,320 Speaker 8: The neutral rate is much higher than that, and so 87 00:05:20,440 --> 00:05:25,840 Speaker 8: monetary policy is much less restrictive than is generally supposed. 88 00:05:25,920 --> 00:05:28,960 Speaker 8: And the clear evidence of that is that we have 89 00:05:29,040 --> 00:05:33,960 Speaker 8: this supposedly really restrictive monetary policy and still have a 90 00:05:34,040 --> 00:05:38,480 Speaker 8: quite robust economy. So I think the FED needs to 91 00:05:38,520 --> 00:05:45,159 Speaker 8: be very careful in its judgments about what would be 92 00:05:45,200 --> 00:05:49,600 Speaker 8: anypocl shift from the regime we've had for the last 93 00:05:49,680 --> 00:05:56,839 Speaker 8: several years to a regime of easing monetary policy. They've 94 00:05:56,960 --> 00:06:03,400 Speaker 8: moved substantially since December. Market used to be expecting six 95 00:06:03,520 --> 00:06:10,000 Speaker 8: cuts in twenty twenty four. Now the market's expecting three cuts, 96 00:06:10,600 --> 00:06:13,960 Speaker 8: and the Fed's carried that off skillfully. There hasn't been 97 00:06:14,040 --> 00:06:19,040 Speaker 8: much disruption or dislocation as that change has taken place, 98 00:06:19,680 --> 00:06:25,160 Speaker 8: But I think that's going to be there with us 99 00:06:25,200 --> 00:06:30,599 Speaker 8: for the next while. And my own guests is probably 100 00:06:30,800 --> 00:06:34,560 Speaker 8: that there's a little more adjustment to come and the 101 00:06:34,600 --> 00:06:38,120 Speaker 8: FED may end up not deciding to cut quite as 102 00:06:38,240 --> 00:06:42,760 Speaker 8: much as markets are now expecting. But I do think 103 00:06:42,839 --> 00:06:49,080 Speaker 8: we need to get ourselves to an idea that neutral 104 00:06:49,160 --> 00:06:53,320 Speaker 8: rates are closer to having a four handle than they 105 00:06:53,320 --> 00:06:54,600 Speaker 8: are to having a two handle. 106 00:06:55,040 --> 00:06:57,480 Speaker 2: We had Torsten Slock of Apollo this week come out 107 00:06:57,520 --> 00:06:59,159 Speaker 2: and say he doesn't think they're gonna be any cuts 108 00:06:59,160 --> 00:07:01,880 Speaker 2: this year for some of the reasons you suggest. I'm 109 00:07:01,880 --> 00:07:03,640 Speaker 2: not asking you to commit on what will happen, but 110 00:07:03,640 --> 00:07:04,960 Speaker 2: does that seem plausible to you? 111 00:07:05,920 --> 00:07:09,440 Speaker 8: Yeah. I think I said on the show maybe a 112 00:07:09,480 --> 00:07:13,120 Speaker 8: month ago, that several weeks ago, that there was a 113 00:07:13,160 --> 00:07:18,440 Speaker 8: fifteen percent chance that we wouldn't have cuts this year. 114 00:07:18,560 --> 00:07:22,640 Speaker 8: I think, if anything, that fifteen percent may have drifted 115 00:07:23,200 --> 00:07:29,680 Speaker 8: slightly upwards, and markets are kind of consistent with that 116 00:07:30,280 --> 00:07:35,280 Speaker 8: if you look at options markets. So I think the 117 00:07:36,080 --> 00:07:39,640 Speaker 8: base or presumptive case is probably that the next move 118 00:07:39,760 --> 00:07:42,360 Speaker 8: is going to be down. But I think it'd be 119 00:07:42,400 --> 00:07:46,400 Speaker 8: a real mistake for people to regard that as any 120 00:07:46,520 --> 00:07:48,880 Speaker 8: kind of certainty. 121 00:07:49,120 --> 00:07:50,960 Speaker 2: Okay, Larry, thank you so very much for being back 122 00:07:50,960 --> 00:07:53,559 Speaker 2: with us. That's Larry Summers, our very special contributor here 123 00:07:53,600 --> 00:07:57,600 Speaker 2: on Wall Street Week. China has been holding its fourteenth 124 00:07:57,760 --> 00:08:01,640 Speaker 2: National People's Congress this week. Of slower growth than in 125 00:08:01,640 --> 00:08:04,560 Speaker 2: the recent past, it has set it's GDP growth target 126 00:08:04,640 --> 00:08:06,840 Speaker 2: at five percent for this year, but has yet to 127 00:08:06,840 --> 00:08:08,960 Speaker 2: give us much information about how it's going to achieve 128 00:08:09,040 --> 00:08:12,120 Speaker 2: that goal. To help us understand where China may be heading. 129 00:08:12,200 --> 00:08:15,240 Speaker 2: Welcome back now, Zanny Minton Bedos. She's the editor of 130 00:08:15,280 --> 00:08:17,000 Speaker 2: The Economist. Sandy, great to have you back on walls. 131 00:08:17,000 --> 00:08:18,120 Speaker 6: Reree really great to be here. 132 00:08:18,240 --> 00:08:20,880 Speaker 2: So you have actually a piece right now and the 133 00:08:20,880 --> 00:08:23,040 Speaker 2: Economist about China. What do you make of what's going 134 00:08:23,080 --> 00:08:25,160 Speaker 2: on economically right now in China? What do we know? 135 00:08:25,600 --> 00:08:27,760 Speaker 6: Well, right now, the Chinese economy is really not in 136 00:08:27,840 --> 00:08:30,680 Speaker 6: very good shape. We know that it's in the middle 137 00:08:30,760 --> 00:08:33,200 Speaker 6: of a very big property bust. Growth has been slowing, 138 00:08:33,320 --> 00:08:37,600 Speaker 6: it's slipped into deflation. There's a tremendous loss of confidence investment, 139 00:08:37,760 --> 00:08:42,400 Speaker 6: Foreign investment has collapsed, domestic confidence has collapsed. It feels 140 00:08:42,480 --> 00:08:44,880 Speaker 6: pretty bad. And so there were a lot of signals, 141 00:08:44,880 --> 00:08:48,480 Speaker 6: a lot of questions with this week coming of, you know, 142 00:08:48,520 --> 00:08:50,480 Speaker 6: would there be some sign that there'd be a big 143 00:08:50,559 --> 00:08:52,800 Speaker 6: stimulus from the government to try and kind of get 144 00:08:52,800 --> 00:08:55,120 Speaker 6: the economy going again. And as you said, what we 145 00:08:55,200 --> 00:08:58,040 Speaker 6: got was an ambitious growth target five percent, which is 146 00:08:58,040 --> 00:09:00,000 Speaker 6: the same that they had last year. But last year, 147 00:09:00,040 --> 00:09:04,160 Speaker 6: remember China was coming out of its really strict pandemic lockdown, 148 00:09:04,400 --> 00:09:07,000 Speaker 6: and there was an expectation that the economy would rebound 149 00:09:07,040 --> 00:09:10,080 Speaker 6: as controls were lifted, it didn't actually rebound that much 150 00:09:10,440 --> 00:09:12,360 Speaker 6: this year. No one's quite sure how they're going to 151 00:09:12,360 --> 00:09:14,959 Speaker 6: get to five percent, particularly because there was not much 152 00:09:15,559 --> 00:09:18,400 Speaker 6: detail of any sort about a big stimulus package, in 153 00:09:18,400 --> 00:09:21,440 Speaker 6: fact the opposite, And so increasingly I think there's a 154 00:09:21,480 --> 00:09:24,520 Speaker 6: lot of worry about the depth of the problem that 155 00:09:24,520 --> 00:09:25,719 Speaker 6: the Chinese economy is in. 156 00:09:26,120 --> 00:09:27,800 Speaker 2: Is this, you know, is this a kind of. 157 00:09:27,880 --> 00:09:32,400 Speaker 6: Japan style multi year, perhaps multi decade malaise. Is it 158 00:09:32,480 --> 00:09:34,760 Speaker 6: something they can fix in the short term. No one 159 00:09:34,800 --> 00:09:38,160 Speaker 6: really knows. And compound that with the fact that Jijingping 160 00:09:38,320 --> 00:09:42,280 Speaker 6: has you know, amassed ever more power around himself. One 161 00:09:42,280 --> 00:09:45,120 Speaker 6: of the really striking things about this week's gathering and 162 00:09:45,160 --> 00:09:47,720 Speaker 6: this is this gets into kind of crimininology of what's 163 00:09:47,760 --> 00:09:50,280 Speaker 6: going on in China. But the premiere, who traditionally gives 164 00:09:50,280 --> 00:09:52,480 Speaker 6: a press conference at the end of this meeting, this 165 00:09:52,600 --> 00:09:55,920 Speaker 6: time that's not going to happen. No one apparently can speak, 166 00:09:56,320 --> 00:09:58,800 Speaker 6: you know, other than you know, the word of using Ping, 167 00:09:58,960 --> 00:10:02,839 Speaker 6: and the the working report of what was what's coming 168 00:10:02,840 --> 00:10:05,720 Speaker 6: for the Chinese economy has more and more references to Jijinping, 169 00:10:05,880 --> 00:10:09,920 Speaker 6: So he's asserting a lot of control. There are ambitious targets, 170 00:10:09,960 --> 00:10:12,120 Speaker 6: not clear how to get there, and this is an 171 00:10:12,240 --> 00:10:15,720 Speaker 6: environment where the economy is really very weak and consumer 172 00:10:15,760 --> 00:10:18,480 Speaker 6: confidence is very very low. So it's pretty bad. 173 00:10:18,520 --> 00:10:21,640 Speaker 2: Actually, no news characters has had this year, but I 174 00:10:21,640 --> 00:10:23,320 Speaker 2: think they also indicate they're not going to have one 175 00:10:23,360 --> 00:10:24,120 Speaker 2: until further notice. 176 00:10:24,720 --> 00:10:26,240 Speaker 9: Yeah, I mean they're not. 177 00:10:26,360 --> 00:10:28,000 Speaker 6: And you know, kind of what do you make of that? 178 00:10:28,000 --> 00:10:31,160 Speaker 6: Because one of the interesting things in China, and I'm 179 00:10:31,240 --> 00:10:33,840 Speaker 6: not a China expert, although I have a fantastic China team, 180 00:10:33,840 --> 00:10:35,480 Speaker 6: but I go there pretty regularly. I'm going there again 181 00:10:35,559 --> 00:10:38,480 Speaker 6: next month. All through the years that I've been going there, 182 00:10:38,600 --> 00:10:42,360 Speaker 6: it has been true that the kind of technocratic competence 183 00:10:42,440 --> 00:10:45,760 Speaker 6: of Chinese economic policymakers has been really exemplary. And if 184 00:10:45,800 --> 00:10:48,800 Speaker 6: you think back, you think back to the Great Financial Crisis, 185 00:10:48,840 --> 00:10:52,920 Speaker 6: when China did a really big stimulus, they were technocratically 186 00:10:53,040 --> 00:10:55,000 Speaker 6: really clear about what they needed to do to keep 187 00:10:55,040 --> 00:10:57,280 Speaker 6: their economy going, to keep it strong, and there were 188 00:10:57,320 --> 00:11:01,040 Speaker 6: those years of tremendous growth. Growth obviously has now slowed, 189 00:11:01,080 --> 00:11:04,239 Speaker 6: but there was still a view that kind of technically 190 00:11:04,600 --> 00:11:07,680 Speaker 6: they knew what to do to achieve the growth targets 191 00:11:07,679 --> 00:11:11,319 Speaker 6: because in the end, the kind of legitimacy of this 192 00:11:11,360 --> 00:11:14,320 Speaker 6: regime has always hinged on the fact that it has 193 00:11:14,440 --> 00:11:19,319 Speaker 6: provided for material prosperity. And you know, the social contract, 194 00:11:19,360 --> 00:11:21,719 Speaker 6: if you will, had always been you put up with 195 00:11:21,760 --> 00:11:24,520 Speaker 6: an authoritarian government, you put up with all of those strictures. 196 00:11:24,559 --> 00:11:28,199 Speaker 6: But you have China is being made great again, and China, 197 00:11:28,559 --> 00:11:32,360 Speaker 6: Chinese prosperity is rising. That's really shifted. I mean, and 198 00:11:32,800 --> 00:11:34,960 Speaker 6: you see it, for example, with the high levels of 199 00:11:35,160 --> 00:11:39,280 Speaker 6: unemployment amongst young people. You sense a sense of disillusionment. 200 00:11:39,679 --> 00:11:43,040 Speaker 6: People young Chinese now know that they are not going 201 00:11:43,080 --> 00:11:45,920 Speaker 6: to see the remarkable increase in living standards that their 202 00:11:46,160 --> 00:11:49,040 Speaker 6: parents saw, so there's a sense of loss of confidence. 203 00:11:49,280 --> 00:11:51,880 Speaker 6: At the same time, there's this very clear clampdown from 204 00:11:52,000 --> 00:11:54,800 Speaker 6: using Ping not only a massing power around himself, but 205 00:11:55,640 --> 00:12:00,800 Speaker 6: really shifting the focus towards national security, towards a you know, 206 00:12:00,840 --> 00:12:04,920 Speaker 6: a great Chinese state in conflict with or at least 207 00:12:04,960 --> 00:12:07,880 Speaker 6: confrontation with the United States. That's what he's focused on. 208 00:12:08,640 --> 00:12:11,160 Speaker 6: He is not I don't think he's not really interested 209 00:12:11,160 --> 00:12:15,160 Speaker 6: in economics. He's very statist, he doesn't believe in stimulus. 210 00:12:15,000 --> 00:12:18,440 Speaker 6: He's got a very kind of you might even say, 211 00:12:18,600 --> 00:12:21,240 Speaker 6: I mean economically illiterate view of what the economy needs. 212 00:12:21,240 --> 00:12:24,679 Speaker 6: But he's not focused on that. And so the question is, 213 00:12:24,960 --> 00:12:28,920 Speaker 6: is all of these ingredients together, how does China actually 214 00:12:29,040 --> 00:12:30,240 Speaker 6: get out of its malaise? 215 00:12:30,679 --> 00:12:32,400 Speaker 2: Zenny is such a treat having on Wall Street Week. 216 00:12:32,440 --> 00:12:35,239 Speaker 2: Thank you that as any mitten Bellows of the economists 217 00:12:37,160 --> 00:12:39,640 Speaker 2: coming up. There is a massive transfer of wealth on 218 00:12:39,720 --> 00:12:42,360 Speaker 2: the horizon, and it's not just to the next generation. 219 00:12:42,559 --> 00:12:45,480 Speaker 2: We talk with Sally Kratchek of Eloves about the rising 220 00:12:45,640 --> 00:12:51,479 Speaker 2: role of women investors. This is Wall Street Week on Bloomberg. 221 00:12:52,640 --> 00:12:56,880 Speaker 1: This is Bloomberg Wall Street Week with David Weston from 222 00:12:57,000 --> 00:12:59,679 Speaker 1: Bloomberg Radio. 223 00:13:04,440 --> 00:13:07,360 Speaker 2: This is Wall Street Week. I'm David Weston. Global. Wall 224 00:13:07,400 --> 00:13:10,480 Speaker 2: Street is on the cusp of a major transfer in wealth, 225 00:13:10,800 --> 00:13:14,599 Speaker 2: as aging men who amassed capital pass from the scene 226 00:13:14,720 --> 00:13:18,080 Speaker 2: most oftens. This is described as a generational issue, but 227 00:13:18,160 --> 00:13:20,680 Speaker 2: Elvius has released a new study showing that there will 228 00:13:20,679 --> 00:13:23,960 Speaker 2: also be a gender component to it, as great wealth 229 00:13:24,040 --> 00:13:26,439 Speaker 2: is put in the hands of women around the world. 230 00:13:26,920 --> 00:13:29,000 Speaker 2: We talked to the founder and CEO of l of Us, 231 00:13:29,120 --> 00:13:30,840 Speaker 2: Sally Krotchik, about what they. 232 00:13:30,760 --> 00:13:36,760 Speaker 5: Found the baby boomers have built and on his historically 233 00:13:36,840 --> 00:13:40,200 Speaker 5: unprecedented amount of wealth. Baby boomers are hitting eighty this year, 234 00:13:40,600 --> 00:13:42,680 Speaker 5: and as they begin to pass away, that money gets 235 00:13:42,679 --> 00:13:44,800 Speaker 5: passed down. And you talk to most people and you 236 00:13:44,800 --> 00:13:47,080 Speaker 5: say who's the money going to? And they say the millennials. 237 00:13:47,800 --> 00:13:50,000 Speaker 5: The bottom line is is going to women because it 238 00:13:50,040 --> 00:13:52,800 Speaker 5: goes to the widows first, average age of widowhood by 239 00:13:52,800 --> 00:13:56,240 Speaker 5: the way, late fifties, goes to the women first and 240 00:13:56,280 --> 00:13:59,400 Speaker 5: then goes on to the kids. And so the Great 241 00:13:59,400 --> 00:14:02,320 Speaker 5: Wealth Transfer is about to do something that Leanan did not, 242 00:14:03,200 --> 00:14:05,680 Speaker 5: which is get to women. The majority of wealth in 243 00:14:05,720 --> 00:14:09,280 Speaker 5: this country. Women are going to inherit tens of trillions 244 00:14:09,280 --> 00:14:11,680 Speaker 5: of dollars over the next couple of decades. 245 00:14:12,000 --> 00:14:15,400 Speaker 2: Well that's a big shift, potentially a big shift. Yeah, 246 00:14:15,400 --> 00:14:17,360 Speaker 2: But what do you think of the consequences of that? 247 00:14:17,520 --> 00:14:19,760 Speaker 2: I mean, how are women different from men when they invest? 248 00:14:20,520 --> 00:14:24,440 Speaker 5: Well, so let's back up, because it does tend to 249 00:14:24,520 --> 00:14:26,640 Speaker 5: change everything. One of the big findings you and were 250 00:14:26,680 --> 00:14:29,120 Speaker 5: talking about earlier is we tend to think women don't 251 00:14:29,120 --> 00:14:31,360 Speaker 5: invest as much as men do. It's because they don't 252 00:14:31,400 --> 00:14:34,840 Speaker 5: have the money confidence that men do. What this survey 253 00:14:34,840 --> 00:14:37,400 Speaker 5: has shown is it's not they don't have the confidence 254 00:14:37,400 --> 00:14:38,880 Speaker 5: so they don't have the money. It's they don't have 255 00:14:38,880 --> 00:14:41,280 Speaker 5: the money, so they don't have the confidence. You put 256 00:14:41,280 --> 00:14:44,080 Speaker 5: that money in the hands of women, their confidence sorees. 257 00:14:44,120 --> 00:14:46,880 Speaker 5: It goes from something like forty five percent of women 258 00:14:46,920 --> 00:14:49,720 Speaker 5: are confident around money to eighty one percent after they 259 00:14:49,760 --> 00:14:53,160 Speaker 5: get an inheritance or a wealth transfer, become more confident 260 00:14:53,200 --> 00:14:57,800 Speaker 5: than men. The other thing that changes marriages. Marriages something 261 00:14:57,880 --> 00:15:00,720 Speaker 5: like double the amount of women who get in inheritance 262 00:15:00,760 --> 00:15:03,360 Speaker 5: get a wealth transfer, you know, say that they could 263 00:15:03,440 --> 00:15:07,080 Speaker 5: leave relationships that they don't want to be in, which 264 00:15:07,160 --> 00:15:10,360 Speaker 5: is really significant. You see it for young millennial and 265 00:15:10,440 --> 00:15:13,680 Speaker 5: Gen Z women who three times the number of them 266 00:15:13,680 --> 00:15:16,560 Speaker 5: say they'll leave a relationship as those who don't get 267 00:15:16,600 --> 00:15:17,360 Speaker 5: an inheritance. 268 00:15:17,960 --> 00:15:19,800 Speaker 2: So as we look around the industry today, I mean 269 00:15:19,800 --> 00:15:23,200 Speaker 2: it's certain my experience looking at it, we don't have 270 00:15:23,280 --> 00:15:26,800 Speaker 2: many women in the senior most leadership roles in sort 271 00:15:26,800 --> 00:15:31,200 Speaker 2: of global Wall Street correct. And maybe it's gotten better, 272 00:15:31,240 --> 00:15:33,840 Speaker 2: but I'm not sure how much better it's gotten. What's 273 00:15:33,920 --> 00:15:34,440 Speaker 2: causing that? 274 00:15:34,480 --> 00:15:37,600 Speaker 5: Do you think, yeah, it's gotten better, It hasn't gotten 275 00:15:37,640 --> 00:15:39,760 Speaker 5: better enough. When you consider that women are fifty one 276 00:15:39,800 --> 00:15:45,280 Speaker 5: percent of the population. You know, it's inertia. You know, 277 00:15:45,320 --> 00:15:47,520 Speaker 5: an object in motion stays in motion, and object at 278 00:15:47,560 --> 00:15:51,160 Speaker 5: rest stays at rest. But it's truly important, and it's 279 00:15:51,200 --> 00:15:53,880 Speaker 5: truly important beyond the g I wish there were a 280 00:15:53,920 --> 00:15:56,880 Speaker 5: handful of women who get to senior roles and do 281 00:15:57,040 --> 00:16:02,520 Speaker 5: well good. Yes, that matters. What really matters is the 282 00:16:02,600 --> 00:16:05,680 Speaker 5: financial services is, of course the lifeblood of our economy, 283 00:16:06,320 --> 00:16:09,800 Speaker 5: and the research shows you the diversity is a driver 284 00:16:09,960 --> 00:16:15,920 Speaker 5: of superior performance. The homogeneity conversely means take you trust 285 00:16:15,920 --> 00:16:18,280 Speaker 5: each other too much, you take on more risk thinking 286 00:16:18,360 --> 00:16:21,760 Speaker 5: subprime crisis here right when you don't have that diversity 287 00:16:21,880 --> 00:16:26,160 Speaker 5: thought perspective background. So we should all care about diversity 288 00:16:26,160 --> 00:16:29,600 Speaker 5: in financial services because it is again the life blood 289 00:16:29,600 --> 00:16:32,600 Speaker 5: of the economy. And we should also care because of 290 00:16:33,000 --> 00:16:35,200 Speaker 5: if we are a woman, we want to be reflected. 291 00:16:35,640 --> 00:16:38,000 Speaker 5: If we're fathers and we have daughters, we want them 292 00:16:38,080 --> 00:16:42,360 Speaker 5: to be reflected. And the industry needs to do and 293 00:16:42,880 --> 00:16:45,960 Speaker 5: will do with more diversity, a better job for women again, 294 00:16:46,000 --> 00:16:48,440 Speaker 5: who are coming into a ton of money with a 295 00:16:48,440 --> 00:16:49,479 Speaker 5: great wealth transfer. 296 00:16:49,640 --> 00:16:51,760 Speaker 2: In your experience, do you think that the leadership of 297 00:16:51,880 --> 00:16:54,960 Speaker 2: the large financial institutions, and by that I mean the CEO, 298 00:16:55,240 --> 00:16:58,080 Speaker 2: the c suite and the board understand what you just said, 299 00:16:58,120 --> 00:17:00,440 Speaker 2: because over the last few months we've seen why dof 300 00:17:00,440 --> 00:17:03,520 Speaker 2: you senior women leave their roles. Now maybe we just 301 00:17:03,600 --> 00:17:05,159 Speaker 2: noticed it more, but it feels like there are a 302 00:17:05,200 --> 00:17:07,000 Speaker 2: lot of senior women moving on. Yeah. 303 00:17:07,119 --> 00:17:09,919 Speaker 5: You know, look, I think everybody believes in the power 304 00:17:10,400 --> 00:17:13,000 Speaker 5: of you know, having a team that is diverse and 305 00:17:13,040 --> 00:17:16,480 Speaker 5: can debate. I mean, forget about this blowback on DEI. 306 00:17:16,600 --> 00:17:19,320 Speaker 5: But if you're in senior leadership, you know sort of 307 00:17:19,400 --> 00:17:22,280 Speaker 5: understanding that you want these different perspectives. I think it 308 00:17:22,320 --> 00:17:25,240 Speaker 5: can be hard to overcome corporate culture. What I do 309 00:17:25,320 --> 00:17:28,680 Speaker 5: think is men do not see the great wealth transfer 310 00:17:28,760 --> 00:17:32,239 Speaker 5: coming and do not fully understand the difference it's going 311 00:17:32,280 --> 00:17:33,959 Speaker 5: to make. And how do I know that? In the 312 00:17:34,160 --> 00:17:37,280 Speaker 5: l of S survey we ask men, we said, here's 313 00:17:37,320 --> 00:17:39,080 Speaker 5: this great wealth transfer. Who do you think is going 314 00:17:39,119 --> 00:17:41,960 Speaker 5: to benefit? Just fourteen percent said women. 315 00:17:43,040 --> 00:17:45,080 Speaker 2: Oh, most people said the next generation. Me. 316 00:17:47,480 --> 00:17:49,680 Speaker 5: I think it's going to be bed you know, and 317 00:17:50,119 --> 00:17:52,600 Speaker 5: look at what we saw this summer where women kept 318 00:17:52,640 --> 00:17:55,520 Speaker 5: the country out of recession, you know, through going to 319 00:17:55,520 --> 00:17:58,600 Speaker 5: see Barbie, through going to see you know, Taylor Swift 320 00:17:58,640 --> 00:18:01,439 Speaker 5: and Beyonce and all all of the economic power that 321 00:18:01,560 --> 00:18:04,480 Speaker 5: generated and you say, look, this is a world this 322 00:18:04,640 --> 00:18:05,800 Speaker 5: beginning to change. 323 00:18:07,119 --> 00:18:09,960 Speaker 2: Just over two years ago now GE announced plans to 324 00:18:10,000 --> 00:18:14,080 Speaker 2: divide its business into three publicly traded companies focused on healthcare, 325 00:18:14,440 --> 00:18:18,120 Speaker 2: energy and aviation. GE Healthcare was spun off just over 326 00:18:18,160 --> 00:18:21,119 Speaker 2: a year ago, and early next month the last piece 327 00:18:21,200 --> 00:18:23,840 Speaker 2: will fall into place when GE separates in the GE 328 00:18:23,880 --> 00:18:28,520 Speaker 2: Aerospace and GE Vernova, encompassing its energy business. We sat 329 00:18:28,560 --> 00:18:31,280 Speaker 2: with the GE CEO who has overseen the restructuring from 330 00:18:31,320 --> 00:18:33,639 Speaker 2: the start, Larry Kulp, and the man who will be 331 00:18:33,760 --> 00:18:36,119 Speaker 2: CEO of g Vernova, Scott Straisik. 332 00:18:36,480 --> 00:18:40,720 Speaker 3: If you go back five years, we really were, I think, 333 00:18:40,880 --> 00:18:45,480 Speaker 3: tasked with two simple objectives. One was a significantly leveraging 334 00:18:45,600 --> 00:18:50,399 Speaker 3: of our balance sheet. Secondly, we needed to execute an 335 00:18:50,400 --> 00:18:55,080 Speaker 3: operational turnaround across the business, but it was particularly acute 336 00:18:55,359 --> 00:18:57,960 Speaker 3: in our power segment, particularly the gas power business that 337 00:18:58,560 --> 00:19:02,800 Speaker 3: Scott ran at the time. So you fast forward, we 338 00:19:02,840 --> 00:19:06,720 Speaker 3: reduced our debtload by over one hundred billion dollars. Scott 339 00:19:06,720 --> 00:19:10,760 Speaker 3: and the team really executed I think a phenomenal turn 340 00:19:11,040 --> 00:19:13,520 Speaker 3: in gas power and then with the rest of our 341 00:19:13,600 --> 00:19:17,000 Speaker 3: power segment. And we were sitting there as the pandemic 342 00:19:17,080 --> 00:19:19,280 Speaker 3: was beginning to lift. We could see the merger of 343 00:19:19,320 --> 00:19:23,240 Speaker 3: our aircraft leasing business with one of our key competitors, 344 00:19:23,560 --> 00:19:27,920 Speaker 3: air Cap, coming to a quick close, and we really 345 00:19:27,920 --> 00:19:31,720 Speaker 3: had to decide what's the go forward structure for GE, 346 00:19:32,359 --> 00:19:35,400 Speaker 3: And given we had had so much success with the decentralization, 347 00:19:36,080 --> 00:19:38,800 Speaker 3: given that the capital markets clearly liked the businesses but 348 00:19:38,840 --> 00:19:42,080 Speaker 3: didn't like them together, it was actually an easy decision 349 00:19:43,040 --> 00:19:45,479 Speaker 3: when we took a little over two years ago to 350 00:19:45,520 --> 00:19:47,880 Speaker 3: say it take us a couple of years to pull 351 00:19:47,920 --> 00:19:52,119 Speaker 3: this off, but when the dust settles, GE Healthcare, Chievranova, 352 00:19:52,440 --> 00:19:55,360 Speaker 3: and GE Aerospace will all be on their own bottoms. 353 00:19:55,480 --> 00:19:57,600 Speaker 2: You may have just answered that in your answer, which 354 00:19:57,640 --> 00:19:59,919 Speaker 2: is why'd you pick Scott not to speak to you? 355 00:20:00,040 --> 00:20:02,400 Speaker 2: What about your presence Scott? But how'd you pick Scott? 356 00:20:02,480 --> 00:20:04,400 Speaker 2: Is it because of the role he had turnaround? 357 00:20:04,960 --> 00:20:09,040 Speaker 3: Most definitely. I met Scott back August of eighteen. I 358 00:20:09,119 --> 00:20:12,040 Speaker 3: wasn't even in this chair yet. It was the first 359 00:20:12,080 --> 00:20:15,520 Speaker 3: GE business that I had visited down in Atlanta, and 360 00:20:16,720 --> 00:20:20,000 Speaker 3: I came away thinking this is a really strong team, 361 00:20:20,359 --> 00:20:22,560 Speaker 3: but there's some things that we're doing that probably are 362 00:20:22,600 --> 00:20:26,719 Speaker 3: working against us. So we began the pivot to focus 363 00:20:26,760 --> 00:20:29,840 Speaker 3: more on the businesses as opposed to the segment. Scott 364 00:20:29,880 --> 00:20:32,960 Speaker 3: was running gas Power Services at the time we asked 365 00:20:33,000 --> 00:20:34,960 Speaker 3: him to step up into a big job to run 366 00:20:35,440 --> 00:20:39,200 Speaker 3: all of gas Power. We knew that was job one 367 00:20:39,240 --> 00:20:43,080 Speaker 3: with respect to the overall operational turnaround at GE, and 368 00:20:43,119 --> 00:20:47,000 Speaker 3: he and the team I think executed near flawlessly through that, 369 00:20:47,320 --> 00:20:49,840 Speaker 3: and then he picked up additional responsibility with the rest 370 00:20:49,840 --> 00:20:54,920 Speaker 3: of the power segment and then in turn the renewables businesses. 371 00:20:54,960 --> 00:20:57,480 Speaker 3: And at each step of the way, Scott stepped up 372 00:20:57,680 --> 00:21:01,679 Speaker 3: delivered built teams that did the same. So when it 373 00:21:01,720 --> 00:21:04,520 Speaker 3: came time to think about the next CEO for this 374 00:21:04,600 --> 00:21:07,240 Speaker 3: business as a public entity, Scott was an easy choice. 375 00:21:07,280 --> 00:21:09,040 Speaker 2: So Scott, and now you've got the big job. What 376 00:21:09,200 --> 00:21:12,240 Speaker 2: in your experience in GE and specifically in that turnaround, 377 00:21:12,359 --> 00:21:14,760 Speaker 2: really do you think prepares you for this big new role. 378 00:21:15,280 --> 00:21:17,760 Speaker 4: Well, I mean GE has always been a great laboratory 379 00:21:17,800 --> 00:21:20,600 Speaker 4: to learn and experiment, and we've always had great people. 380 00:21:20,800 --> 00:21:22,800 Speaker 4: But I think over the last five to five and 381 00:21:22,800 --> 00:21:25,880 Speaker 4: a half years, really the lean operating system that we've 382 00:21:25,880 --> 00:21:29,240 Speaker 4: been implementing and really started with gas right in nineteen 383 00:21:29,720 --> 00:21:32,399 Speaker 4: where we were on a monthly cadence with Larry and 384 00:21:32,480 --> 00:21:36,919 Speaker 4: really focusing a team that always had great ambition, but 385 00:21:37,000 --> 00:21:39,199 Speaker 4: did we really have an ability to focus on the 386 00:21:39,240 --> 00:21:44,000 Speaker 4: critical few customer KPIs every day while also protecting for 387 00:21:44,040 --> 00:21:47,920 Speaker 4: the long term breakthroughs and the ability to multitask those 388 00:21:47,960 --> 00:21:50,960 Speaker 4: things our teams weren't always great with. And that's really 389 00:21:51,000 --> 00:21:53,120 Speaker 4: a lot of what we were focused on in nineteen 390 00:21:53,680 --> 00:21:56,919 Speaker 4: into twenty together is to build that rhythm that we 391 00:21:56,920 --> 00:22:00,400 Speaker 4: could prioritize what mattered most to get it's a short 392 00:22:00,440 --> 00:22:04,520 Speaker 4: term right, but not at the expense of also investing 393 00:22:04,560 --> 00:22:06,080 Speaker 4: for the long term. And that's a lot of what 394 00:22:06,119 --> 00:22:09,119 Speaker 4: we worked on in gas Power together in nineteen and 395 00:22:09,160 --> 00:22:12,560 Speaker 4: that was really foundational for gas Power and it's really 396 00:22:12,640 --> 00:22:14,960 Speaker 4: what we've been extrapolating across the rest of Vernova. 397 00:22:15,400 --> 00:22:18,639 Speaker 2: At the center of Vernova's strategy is growing its energy 398 00:22:18,640 --> 00:22:21,240 Speaker 2: business in the midst of a massive transition to more 399 00:22:21,280 --> 00:22:26,320 Speaker 2: sustainable energy around the world. It's chief sustainability Officer, Roger Martella, 400 00:22:26,440 --> 00:22:29,160 Speaker 2: gives us an example how Vernova will set its priorities 401 00:22:29,240 --> 00:22:31,399 Speaker 2: in building out the electrical grid in a way that 402 00:22:31,560 --> 00:22:34,360 Speaker 2: is both good business and good for the climate. 403 00:22:34,640 --> 00:22:37,160 Speaker 10: We know we're going to deploy the technology and run 404 00:22:37,200 --> 00:22:41,080 Speaker 10: businesses to develop technology to electrify the grid. But from 405 00:22:41,119 --> 00:22:43,679 Speaker 10: a sustainability perspective, we want to do more than just 406 00:22:43,760 --> 00:22:45,760 Speaker 10: put capacity on the grid. We want to focus on 407 00:22:45,840 --> 00:22:48,359 Speaker 10: where are we putting that capacity. How are we helping 408 00:22:48,400 --> 00:22:52,840 Speaker 10: countries that are struggling to provide affordable, reliable, sustainable electricity. 409 00:22:53,000 --> 00:22:55,280 Speaker 10: Can we double click on those countries and make sure 410 00:22:55,320 --> 00:22:57,520 Speaker 10: we're not just going where the phone's ringing, but how 411 00:22:57,520 --> 00:22:59,439 Speaker 10: can we affirm that we reach out to places in 412 00:22:59,480 --> 00:23:03,720 Speaker 10: the world to enhance sustainability When it comes to electrification. 413 00:23:03,359 --> 00:23:06,320 Speaker 4: Sustainability really is at the heart of everything we're doing, 414 00:23:06,400 --> 00:23:09,280 Speaker 4: and for us, we define sustainability as the complement it 415 00:23:09,320 --> 00:23:13,159 Speaker 4: both together keeping the lights on while decreasing the carbon 416 00:23:13,200 --> 00:23:16,440 Speaker 4: intensity the install base every day. And it'd be wonderful 417 00:23:16,440 --> 00:23:19,680 Speaker 4: if we could wave a magic wand and have no carbon, 418 00:23:19,800 --> 00:23:22,080 Speaker 4: but the reality is that's not the world we live in. 419 00:23:22,160 --> 00:23:25,640 Speaker 4: So how do we sustainably electrify the world while making 420 00:23:25,680 --> 00:23:26,680 Speaker 4: it cleaner every day? 421 00:23:26,920 --> 00:23:30,600 Speaker 9: They really go together, and to do that it really. 422 00:23:30,320 --> 00:23:33,960 Speaker 4: Does require a complement of technologies, and that's where Vernova 423 00:23:34,000 --> 00:23:37,840 Speaker 4: is somewhat unique because we've got the power generation technologies 424 00:23:38,200 --> 00:23:42,480 Speaker 4: with things like gas, nuclear, wind, but we also play 425 00:23:42,520 --> 00:23:47,159 Speaker 4: across the grid at both moving electrons orchestrating the grid, 426 00:23:47,720 --> 00:23:50,720 Speaker 4: and the system's becoming more complicated, and our ability to 427 00:23:50,760 --> 00:23:54,000 Speaker 4: serve our customers with all of those solutions gives us 428 00:23:54,000 --> 00:23:55,480 Speaker 4: a unique vantage point. 429 00:23:55,680 --> 00:23:57,760 Speaker 2: So Larry, as somebody who's about to turn over the keys, 430 00:23:57,800 --> 00:24:01,000 Speaker 2: if I can put that way to power assess their 431 00:24:01,080 --> 00:24:04,159 Speaker 2: opportunities going forward, I mean, what are the really growth 432 00:24:04,200 --> 00:24:05,480 Speaker 2: opportunities for Vernova? 433 00:24:06,040 --> 00:24:08,399 Speaker 3: Well, I think you just hit on it, David in 434 00:24:08,440 --> 00:24:11,760 Speaker 3: the question and Scott talking about all the different dimensions 435 00:24:11,760 --> 00:24:16,520 Speaker 3: of the energy transition. We have excellent exposure, leadership positions 436 00:24:16,600 --> 00:24:20,040 Speaker 3: really and almost all the ones that matter. So I 437 00:24:20,359 --> 00:24:24,280 Speaker 3: don't really worry about the top line environment in this business, 438 00:24:24,320 --> 00:24:25,840 Speaker 3: and that we couldn't have said that four or five 439 00:24:25,920 --> 00:24:29,120 Speaker 3: years ago, but the world over, I think we really 440 00:24:29,119 --> 00:24:31,600 Speaker 3: are set in that regard, so we need to make 441 00:24:31,600 --> 00:24:32,960 Speaker 3: sure we execute. 442 00:24:33,680 --> 00:24:35,920 Speaker 2: How does wind fit into what you're doing, because that's 443 00:24:35,960 --> 00:24:38,000 Speaker 2: been more of a struggle not just for GE but 444 00:24:38,040 --> 00:24:41,040 Speaker 2: for others as well as opposed to gas power. How 445 00:24:41,080 --> 00:24:42,760 Speaker 2: do you see wind playing out? 446 00:24:42,880 --> 00:24:45,680 Speaker 9: You bet? It has been an industry wide challenge. 447 00:24:45,720 --> 00:24:47,560 Speaker 4: But if you take a step back and think about 448 00:24:47,560 --> 00:24:50,520 Speaker 4: the world today gets about seven percent of its power 449 00:24:50,680 --> 00:24:55,040 Speaker 4: from electricity from wind most projections believed by twenty forty 450 00:24:55,320 --> 00:24:57,199 Speaker 4: that needs to be closer to twenty five percent. 451 00:24:57,760 --> 00:24:58,760 Speaker 9: So wind matters. 452 00:24:58,960 --> 00:25:02,720 Speaker 4: But the reality is is we need to industrialize at 453 00:25:02,760 --> 00:25:04,600 Speaker 4: scale the wind products to a. 454 00:25:04,640 --> 00:25:07,440 Speaker 9: Level that it can actually reach those levels. 455 00:25:07,480 --> 00:25:09,560 Speaker 4: And that's really what we're focused on right now is 456 00:25:09,960 --> 00:25:12,719 Speaker 4: building workhorse products that we can do at scale. 457 00:25:13,000 --> 00:25:14,360 Speaker 9: We're seeing real progress with that. 458 00:25:14,400 --> 00:25:17,240 Speaker 4: We've turned our on shore wind business back to profitability 459 00:25:17,280 --> 00:25:20,160 Speaker 4: the second half of last year, with momentum to follow. 460 00:25:20,520 --> 00:25:22,280 Speaker 4: We're working on doing much of the same with our 461 00:25:22,320 --> 00:25:23,320 Speaker 4: offshore wind business. 462 00:25:23,320 --> 00:25:28,160 Speaker 2: Today, coming up more with Larry Culp and Scott Strasik 463 00:25:28,359 --> 00:25:32,280 Speaker 2: as we focus on ge Aerospace and the common DNA 464 00:25:32,440 --> 00:25:36,480 Speaker 2: of the two companies. That's next on Wall Street Week 465 00:25:36,640 --> 00:25:37,359 Speaker 2: on Bloomberg. 466 00:25:38,560 --> 00:25:42,800 Speaker 1: This is Bloomberg Wall Street Week with David Weston from 467 00:25:42,920 --> 00:25:49,440 Speaker 1: Bloomberg Radio. 468 00:25:50,119 --> 00:25:52,680 Speaker 2: This is Wall Street Week. I'm David Weston. We continue 469 00:25:52,680 --> 00:25:55,919 Speaker 2: the conversation with Larry Culp and Scott Strasik, taking up 470 00:25:56,000 --> 00:25:59,720 Speaker 2: Larry's role as CEO of ge Aerospace and the Common 471 00:25:59,760 --> 00:26:02,840 Speaker 2: hair it will continue to share with Jie Vernova after 472 00:26:02,880 --> 00:26:03,440 Speaker 2: the spinoff. 473 00:26:05,040 --> 00:26:09,560 Speaker 3: We have a tremendous visibility both with respect to our 474 00:26:09,600 --> 00:26:12,600 Speaker 3: service business, which represents about seventy percent of our revenue, 475 00:26:12,920 --> 00:26:16,720 Speaker 3: simply because the airlines are back well above twenty nineteen 476 00:26:17,080 --> 00:26:20,880 Speaker 3: activity levels and they need us to support the engines 477 00:26:20,920 --> 00:26:24,160 Speaker 3: that propel all of that traffic. And at the same 478 00:26:24,200 --> 00:26:27,040 Speaker 3: time they're looking to expand and modernize their fleets, both 479 00:26:27,040 --> 00:26:30,520 Speaker 3: in single aisle and wide body configurations. So in order 480 00:26:30,520 --> 00:26:32,960 Speaker 3: for a new plane today, a new engine probably isn't 481 00:26:32,960 --> 00:26:37,119 Speaker 3: fulfilled until twenty thirty. So we have tremendous demand potential 482 00:26:37,240 --> 00:26:39,399 Speaker 3: both in services and in new units. 483 00:26:39,520 --> 00:26:40,560 Speaker 9: We need to make sure. 484 00:26:40,560 --> 00:26:44,120 Speaker 3: We're delivering and delivering profitably over the next several years. 485 00:26:44,680 --> 00:26:46,680 Speaker 2: I'm not sure how many people understand. I'm not sure 486 00:26:46,720 --> 00:26:50,639 Speaker 2: I understood. And the extent of your defense contracting, I 487 00:26:50,680 --> 00:26:53,520 Speaker 2: mean a substantial portion, not a majority, but a substantial 488 00:26:53,520 --> 00:26:55,720 Speaker 2: portion is defense. How does that figure a new future plan? 489 00:26:56,119 --> 00:26:59,359 Speaker 3: Well, our defense business we talked about that this week 490 00:26:59,480 --> 00:27:03,360 Speaker 3: with we're going to call that segment Defense and Propulsion Technologies. 491 00:27:03,560 --> 00:27:08,320 Speaker 3: That's a nine billion dollar business primarily in defense, large 492 00:27:08,359 --> 00:27:12,480 Speaker 3: position here in the US, particularly with rotorcraft, I think helicopters, 493 00:27:12,520 --> 00:27:17,280 Speaker 3: the apaches and the Blackhawks in addition to combat fighter aircraft, 494 00:27:17,880 --> 00:27:21,560 Speaker 3: and as those assets are being used with more frequency, 495 00:27:21,880 --> 00:27:25,119 Speaker 3: we contribute to the readiness of those assets. And in turn, 496 00:27:25,760 --> 00:27:29,439 Speaker 3: as our war fighters need more capability, be it in 497 00:27:29,440 --> 00:27:32,960 Speaker 3: a rotocraft or at a combat jet, that's where the 498 00:27:33,000 --> 00:27:36,480 Speaker 3: next generation of gerospace technology has a role to play. 499 00:27:36,640 --> 00:27:38,000 Speaker 2: As we look around the world right now, one of 500 00:27:38,000 --> 00:27:40,679 Speaker 2: the things we hear repeatedly is that geopolitical risk has 501 00:27:40,680 --> 00:27:43,520 Speaker 2: gone up substantially. We've got a ground war in Europe, 502 00:27:43,560 --> 00:27:46,760 Speaker 2: We've got conflict in the Middle East, we've got issues 503 00:27:46,800 --> 00:27:48,400 Speaker 2: with the South Side at sea. We're not sure what's 504 00:27:48,400 --> 00:27:51,520 Speaker 2: going they're on as you look out, Does that suggest 505 00:27:51,560 --> 00:27:53,560 Speaker 2: to you that there's going to be a continuing rising 506 00:27:53,680 --> 00:27:55,720 Speaker 2: tide on your defense contractor. 507 00:27:55,680 --> 00:27:56,840 Speaker 9: We believe so, David. 508 00:27:56,880 --> 00:27:59,720 Speaker 3: Now, obviously there's a little bit of political dysfunction relative 509 00:27:59,760 --> 00:28:03,200 Speaker 3: to the budget currently in Washington, but what we shared 510 00:28:03,240 --> 00:28:07,680 Speaker 3: with investors was very much that same geopolitical backdrop. Unfortunately 511 00:28:07,720 --> 00:28:11,080 Speaker 3: that may not get better before it gets more tense. 512 00:28:12,240 --> 00:28:15,640 Speaker 3: And again, both here in the US and around the world, 513 00:28:16,119 --> 00:28:21,639 Speaker 3: our business supports the warfighter both in both configurations, and 514 00:28:21,720 --> 00:28:25,320 Speaker 3: we know that there are advanced technologies that governments want 515 00:28:25,359 --> 00:28:28,199 Speaker 3: to deploy or be ready to deploy over time, and 516 00:28:28,200 --> 00:28:31,520 Speaker 3: that's where we're investing from an R and D perspective. 517 00:28:31,640 --> 00:28:32,960 Speaker 2: So I think a lot of people would hear that 518 00:28:33,000 --> 00:28:34,800 Speaker 2: and say, well, that's really good news for the shareholders. 519 00:28:34,840 --> 00:28:36,600 Speaker 2: At the same time and also indicates you don't see 520 00:28:36,600 --> 00:28:38,880 Speaker 2: a lot of great investment opportunities out there for that capitol, 521 00:28:38,880 --> 00:28:41,080 Speaker 2: because if you did, you'd keep the capital invested. 522 00:28:41,680 --> 00:28:44,720 Speaker 3: Well, I think that we have reserved the right to 523 00:28:45,040 --> 00:28:49,000 Speaker 3: explore those inorganic opportunities. But in many respects David, the 524 00:28:49,000 --> 00:28:51,960 Speaker 3: best investment that we can make is in ge aero 525 00:28:52,040 --> 00:28:55,080 Speaker 3: space and that's what you see with that capital allocation framework. 526 00:28:55,480 --> 00:28:57,360 Speaker 2: What about your capital allocation? What are you looking at, 527 00:28:57,400 --> 00:28:57,760 Speaker 2: s Gun. 528 00:28:58,360 --> 00:29:00,480 Speaker 9: A lot of organic growth opportunities. 529 00:29:00,560 --> 00:29:03,320 Speaker 4: Again, when we think about the grid and the substantial 530 00:29:03,360 --> 00:29:06,600 Speaker 4: modernization needed of grid, we're going to invest substantially in 531 00:29:06,680 --> 00:29:10,680 Speaker 4: capacity additions to do that. There is still new technology 532 00:29:10,760 --> 00:29:14,320 Speaker 4: that needs to be advanced and things like direct air capture, 533 00:29:14,440 --> 00:29:17,320 Speaker 4: things like small modular reactors in the grid. 534 00:29:17,360 --> 00:29:19,120 Speaker 9: Software that's critical to the future. 535 00:29:20,480 --> 00:29:23,280 Speaker 2: You cannot talk about the future of the aviation business 536 00:29:23,320 --> 00:29:27,120 Speaker 2: without talking about the future of aviation itself, and ge 537 00:29:27,160 --> 00:29:31,280 Speaker 2: Aerospace VP of Engineering Muhammad Ali has some bold thoughts 538 00:29:31,280 --> 00:29:33,160 Speaker 2: about what that future may hold. 539 00:29:33,840 --> 00:29:39,280 Speaker 11: Our purpose statement is we invent the future flight, lift 540 00:29:39,280 --> 00:29:42,640 Speaker 11: people up and bring them home safely, And we believe 541 00:29:42,680 --> 00:29:46,120 Speaker 11: it starts with bringing people home safely, and that earns 542 00:29:46,160 --> 00:29:49,600 Speaker 11: us the right to lift people up, which in turn 543 00:29:49,720 --> 00:29:53,440 Speaker 11: earns us the right to invent the future flight. I 544 00:29:53,480 --> 00:29:58,960 Speaker 11: think Rice has this beautiful open fan technology which attracts 545 00:29:58,960 --> 00:30:01,120 Speaker 11: all the attention see a lot of the questions, but 546 00:30:01,280 --> 00:30:05,719 Speaker 11: bide behind that hyper electric capable, state of the art 547 00:30:05,800 --> 00:30:10,280 Speaker 11: high pressure temperature capability HGH, pressure serbon capability that we 548 00:30:10,360 --> 00:30:14,560 Speaker 11: are designing using state of the art supercomputing. We are 549 00:30:14,560 --> 00:30:18,120 Speaker 11: also at significant advances in materials that we are putting 550 00:30:18,160 --> 00:30:22,560 Speaker 11: in there, and sustainable aviation fuel capable from day one. 551 00:30:23,520 --> 00:30:26,280 Speaker 3: This is a business that has really been built developing 552 00:30:26,400 --> 00:30:31,440 Speaker 3: generational improvements in sustainability in jet engines over time, but 553 00:30:31,560 --> 00:30:34,880 Speaker 3: we often not referred to it as sustainability. We've really 554 00:30:34,920 --> 00:30:37,160 Speaker 3: referred to it as efficiency. But every time a next 555 00:30:37,240 --> 00:30:40,680 Speaker 3: generation aircraft comes forward, it's really the result of a 556 00:30:40,720 --> 00:30:44,560 Speaker 3: next generation engine technology coming to market. 557 00:30:44,600 --> 00:30:47,520 Speaker 2: The same question you when it comes to power technological 558 00:30:47,560 --> 00:30:50,360 Speaker 2: development what are you looking at? What is out on 559 00:30:50,400 --> 00:30:52,840 Speaker 2: the horizon for GE, for Nova, There's. 560 00:30:52,640 --> 00:30:55,400 Speaker 4: A lot of exciting things. Direct air capture, how do 561 00:30:55,440 --> 00:30:58,360 Speaker 4: we manage carbon. We've got a prototype right now that's 562 00:30:58,400 --> 00:30:59,440 Speaker 4: pulling carbon. 563 00:30:59,120 --> 00:31:00,680 Speaker 9: Out of the air as we speak. 564 00:31:00,920 --> 00:31:04,360 Speaker 4: Small modular reactor three hundred mego op blocks of power 565 00:31:04,400 --> 00:31:07,560 Speaker 4: that will commission this decade that we think can transform 566 00:31:07,960 --> 00:31:12,240 Speaker 4: the nuclear industry. Robotics and inspection technology with our wind 567 00:31:12,280 --> 00:31:16,160 Speaker 4: business that ensures that every blade that leaves our factory 568 00:31:16,240 --> 00:31:19,760 Speaker 4: has been fully inspected to get quality right the first time. 569 00:31:20,520 --> 00:31:24,280 Speaker 4: Grid software, our grid OS grid Orchestration system as we 570 00:31:24,320 --> 00:31:26,880 Speaker 4: say it, to really help our customers deal with the 571 00:31:26,920 --> 00:31:30,320 Speaker 4: complexities and the grid today as more folks put solar 572 00:31:30,320 --> 00:31:33,840 Speaker 4: panels on their homes and charge evs at night, and 573 00:31:33,880 --> 00:31:38,600 Speaker 4: there's more bidirectional flows of electricity, all opportunities, so a 574 00:31:38,640 --> 00:31:39,200 Speaker 4: long list. 575 00:31:39,920 --> 00:31:43,280 Speaker 2: Even as aerospace and energy separated GE there is a 576 00:31:43,360 --> 00:31:46,360 Speaker 2: deeply shared DNA going all the way back to Thomas 577 00:31:46,480 --> 00:31:50,240 Speaker 2: Edison shared DNA. None of the sister companies wants to 578 00:31:50,240 --> 00:31:50,680 Speaker 2: give up. 579 00:31:51,160 --> 00:31:55,200 Speaker 11: We absolutely have shared heritage, and actually that shared heritage 580 00:31:55,360 --> 00:31:58,600 Speaker 11: goes all the way back to Thomas Edison who founded 581 00:31:58,760 --> 00:32:02,360 Speaker 11: General ECNC company and that shared heritage. There is a 582 00:32:02,440 --> 00:32:07,360 Speaker 11: statement that's written at the entrance to many our facilities, 583 00:32:07,360 --> 00:32:12,920 Speaker 11: including our aerospace research facility, that says that quote from 584 00:32:12,960 --> 00:32:17,120 Speaker 11: Thomas Edison that said, I find what the world needs 585 00:32:17,640 --> 00:32:21,560 Speaker 11: and I go about inventing it. And that's exactly what 586 00:32:21,600 --> 00:32:24,120 Speaker 11: we would be doing in g Aerospace, and I am 587 00:32:24,160 --> 00:32:27,240 Speaker 11: confident that that's what the GeV Vernova teve is going 588 00:32:27,280 --> 00:32:28,800 Speaker 11: to be doing as well. 589 00:32:28,840 --> 00:32:31,160 Speaker 10: One thing I'd say about working at giev Ornova you 590 00:32:31,160 --> 00:32:33,560 Speaker 10: come to work every day and you feel like you're 591 00:32:33,600 --> 00:32:36,440 Speaker 10: in awe of history. We have eighty thousand employees with 592 00:32:36,480 --> 00:32:39,360 Speaker 10: these incredibly diverse backgrounds, all around the world, doing so 593 00:32:39,400 --> 00:32:42,040 Speaker 10: many different things. This is the one thing we have 594 00:32:42,080 --> 00:32:45,360 Speaker 10: in common. We're motivated by this purpose, this purpose built 595 00:32:45,360 --> 00:32:50,040 Speaker 10: company of electrification and decarbonization. So that's what inspires us 596 00:32:50,080 --> 00:32:50,640 Speaker 10: every day. 597 00:32:51,080 --> 00:32:53,360 Speaker 3: When I reflect on the last five and a half years, 598 00:32:53,680 --> 00:32:56,480 Speaker 3: it really has been about the team. David Scott talked 599 00:32:56,480 --> 00:32:58,960 Speaker 3: about what we take forward. We take a lot of 600 00:32:59,000 --> 00:33:05,239 Speaker 3: technology forward, but this is an immensely talented, resilient, ambitious team. 601 00:33:04,960 --> 00:33:06,520 Speaker 9: That I couldn't be more proud of. 602 00:33:06,760 --> 00:33:08,840 Speaker 3: Go back to twenty eighteen, there were a lot of 603 00:33:08,840 --> 00:33:10,640 Speaker 3: people who wanted to give up on our company. 604 00:33:10,960 --> 00:33:12,520 Speaker 9: We didn't, and there were a. 605 00:33:12,520 --> 00:33:15,040 Speaker 3: Lot of folks that came into our boardroom and into 606 00:33:15,080 --> 00:33:19,000 Speaker 3: the management ranks who understood just how good these businesses 607 00:33:19,360 --> 00:33:23,280 Speaker 3: can be, how strong this team is day in day out. 608 00:33:23,680 --> 00:33:25,320 Speaker 3: We just needed a little bit of time to work 609 00:33:25,360 --> 00:33:28,120 Speaker 3: through some of those issues. Scott and I know our 610 00:33:28,160 --> 00:33:31,480 Speaker 3: companies go back to Edison. A lot of us over 611 00:33:31,560 --> 00:33:35,360 Speaker 3: time have studied the GE management playbook. Scott grew up 612 00:33:36,200 --> 00:33:39,920 Speaker 3: in that environment. I grew up looking in from the outside. 613 00:33:40,120 --> 00:33:43,360 Speaker 3: So we're proud of that history and everything that so 614 00:33:43,440 --> 00:33:47,720 Speaker 3: many people have contributed to our company over time. We're 615 00:33:47,760 --> 00:33:49,680 Speaker 3: the stewards of the business at this point in time, 616 00:33:49,720 --> 00:33:52,080 Speaker 3: and even though we go forward as three, we'll share 617 00:33:52,120 --> 00:33:56,280 Speaker 3: that brand, we'll share that DNA, and I'm sure Edison 618 00:33:56,360 --> 00:33:59,040 Speaker 3: and everybody else looking down will be proud of what 619 00:33:59,080 --> 00:34:02,600 Speaker 3: they see the three businesses on an independent basis going forward. 620 00:34:03,200 --> 00:34:06,040 Speaker 2: Many thanks to Larry Kulp of GE Aerospace and Scott 621 00:34:06,080 --> 00:34:11,880 Speaker 2: Strasik of GeV Vernova. According to the ancient Greek philosopher Epicurus, 622 00:34:12,200 --> 00:34:14,719 Speaker 2: no age is too early or too late for the 623 00:34:14,760 --> 00:34:17,399 Speaker 2: health of the soul, which may well be true when 624 00:34:17,440 --> 00:34:20,040 Speaker 2: it comes to our soul, but life proves that we 625 00:34:20,120 --> 00:34:22,640 Speaker 2: can be too early or too late for the health 626 00:34:22,680 --> 00:34:26,200 Speaker 2: of our economy, our businesses, or our politics. I learned 627 00:34:26,200 --> 00:34:27,759 Speaker 2: this the hard way back in two thousand when I 628 00:34:27,760 --> 00:34:30,600 Speaker 2: was running ABC News and we joined the other networks 629 00:34:30,640 --> 00:34:33,719 Speaker 2: in calling the election way too early, which earned all 630 00:34:33,760 --> 00:34:36,000 Speaker 2: of US news presidents a day of hearings before a 631 00:34:36,080 --> 00:34:39,560 Speaker 2: Congressional committee to explain ourselves and what we were going 632 00:34:39,600 --> 00:34:42,319 Speaker 2: to do to make sure it never happened again. We 633 00:34:42,440 --> 00:34:44,480 Speaker 2: learned just about a year ago now that the FED 634 00:34:44,600 --> 00:34:47,600 Speaker 2: was far too late in pursuing the questions its examiners 635 00:34:47,640 --> 00:34:50,720 Speaker 2: had raised about Silicon Valley Bank, resulting in the bank's 636 00:34:50,719 --> 00:34:53,319 Speaker 2: failure and the need for the FDIC to step in. 637 00:34:53,880 --> 00:34:58,480 Speaker 6: The FED had plenty of authority to prevent Silicon Valley Bank. 638 00:34:58,640 --> 00:35:00,920 Speaker 2: It looks to me like the regulator do the problem, 639 00:35:01,400 --> 00:35:04,600 Speaker 2: but nobody dropped the hammer. Just About everyone agrees that 640 00:35:04,640 --> 00:35:07,040 Speaker 2: it's still too early to judge just how big an 641 00:35:07,080 --> 00:35:10,000 Speaker 2: effect the generative AI will have on business, jobs, and 642 00:35:10,040 --> 00:35:14,120 Speaker 2: the economy, despite some early indications that it could be huge. 643 00:35:14,760 --> 00:35:18,520 Speaker 8: I can think of almost no area of human activity, 644 00:35:19,120 --> 00:35:24,560 Speaker 8: almost no area of economic endeavor that is not going 645 00:35:24,719 --> 00:35:31,680 Speaker 8: to be profoundly affected by these technologies. 646 00:35:32,440 --> 00:35:35,120 Speaker 2: And one thing we already know is that in Nvidia 647 00:35:35,239 --> 00:35:37,800 Speaker 2: did not move too early and getting a big jump 648 00:35:37,840 --> 00:35:38,520 Speaker 2: on the market. 649 00:35:38,840 --> 00:35:41,400 Speaker 12: So it's in Vidia, but it's not just in Nvidia 650 00:35:41,520 --> 00:35:45,520 Speaker 12: per se, because what in Vidio represents is the next 651 00:35:45,560 --> 00:35:50,160 Speaker 12: growth leg of corporate America, of productivity and of earnings 652 00:35:50,400 --> 00:35:53,000 Speaker 12: for the fastest growing companies in America. 653 00:35:53,120 --> 00:35:55,680 Speaker 2: When it comes to politics, President Biden says his economic 654 00:35:55,719 --> 00:35:59,040 Speaker 2: policies have arrived just on time to create jobs and 655 00:35:59,120 --> 00:35:59,880 Speaker 2: to spur growth. 656 00:36:00,400 --> 00:36:03,680 Speaker 13: The share of working age Americans in the workforce is 657 00:36:03,920 --> 00:36:07,360 Speaker 13: as high as has been in thirty years. Remember they 658 00:36:07,440 --> 00:36:09,920 Speaker 13: used to say, bid spend all this money to keep 659 00:36:09,960 --> 00:36:13,320 Speaker 13: people from working. People are off the sidelines. 660 00:36:13,480 --> 00:36:16,080 Speaker 2: But there are others who contend that Bidenomics may be 661 00:36:16,280 --> 00:36:19,520 Speaker 2: both too early and too late. Too early in fiscal 662 00:36:19,560 --> 00:36:22,600 Speaker 2: stimulus triggering the inflation that has a lot of voters upset. 663 00:36:23,239 --> 00:36:25,160 Speaker 14: Voters are going to be voting on the passion of 664 00:36:25,200 --> 00:36:27,880 Speaker 14: what's happening on main street. And if you look at 665 00:36:27,880 --> 00:36:30,200 Speaker 14: what those interest rates are for a small business get alone, 666 00:36:30,200 --> 00:36:33,480 Speaker 14: at twelve percent, nothing's happening, So that's not going to 667 00:36:33,560 --> 00:36:36,440 Speaker 14: change that drastically between now and November, and they feel. 668 00:36:36,239 --> 00:36:38,799 Speaker 2: It, but perhaps too late for voters to see the 669 00:36:38,880 --> 00:36:41,960 Speaker 2: real effects in their lives of the long term investments 670 00:36:41,960 --> 00:36:45,120 Speaker 2: in infrastructure and clean energy and new chip manufacturing. 671 00:36:45,440 --> 00:36:48,600 Speaker 15: President Biden today thirty eight percent of Americans say he 672 00:36:48,640 --> 00:36:51,600 Speaker 15: should be re elected. We looked at his three year average, 673 00:36:52,040 --> 00:36:54,560 Speaker 15: his approval on the three averages thirty nine point eight. 674 00:36:54,760 --> 00:36:57,799 Speaker 15: He's behind every single president except Jimmy Carter at this 675 00:36:57,920 --> 00:36:59,120 Speaker 15: point in their presidencies. 676 00:36:59,320 --> 00:37:02,080 Speaker 2: And maybe that's the hardest part of this too early, 677 00:37:02,239 --> 00:37:05,759 Speaker 2: too late business. At the time, it's just about impossible 678 00:37:05,800 --> 00:37:08,440 Speaker 2: to know whether we're moving too quickly or too slowly. 679 00:37:09,040 --> 00:37:12,520 Speaker 2: Just as pro golfer Adrian Morank last Sunday, he was 680 00:37:12,520 --> 00:37:15,400 Speaker 2: playing in an lv golf tournament in Jetta. When he 681 00:37:15,480 --> 00:37:17,879 Speaker 2: lined up for his second shot on the final hole, 682 00:37:18,080 --> 00:37:20,719 Speaker 2: he had a lot on the line. He was vying 683 00:37:20,800 --> 00:37:23,600 Speaker 2: for fifth place, which would have earned him seven hundred 684 00:37:23,640 --> 00:37:26,920 Speaker 2: and fifty thousand dollars in prize money, so it's understandable 685 00:37:26,920 --> 00:37:29,520 Speaker 2: that he didn't want to rush it. He stood over 686 00:37:29,600 --> 00:37:32,800 Speaker 2: that shot for more than two minutes and was assessed 687 00:37:32,800 --> 00:37:36,640 Speaker 2: a penalty stroke, making his birdy into a par and 688 00:37:36,680 --> 00:37:40,240 Speaker 2: losing him two hundred and forty thousand dollars. A pretty 689 00:37:40,400 --> 00:37:42,960 Speaker 2: example of where being too late does more than just 690 00:37:43,000 --> 00:37:46,680 Speaker 2: affect the health of the epicurean soul. Right now, we're 691 00:37:46,680 --> 00:37:49,680 Speaker 2: seeing an agonizing choice between being too early and too late, 692 00:37:49,760 --> 00:37:51,520 Speaker 2: with a lot more at stake than two hundred and 693 00:37:51,520 --> 00:37:54,760 Speaker 2: forty thousand dollars. As the Federal Reserve tries to decide 694 00:37:54,800 --> 00:37:57,600 Speaker 2: on rate cuts. Pretty much everyone agrees that the Fed 695 00:37:57,719 --> 00:38:00,239 Speaker 2: was too slow on the way up, which results than 696 00:38:00,239 --> 00:38:03,239 Speaker 2: that unpleasant inflation that we're fighting. I am confident that 697 00:38:03,280 --> 00:38:05,000 Speaker 2: they understand the problem correctly. 698 00:38:05,040 --> 00:38:05,279 Speaker 11: Now. 699 00:38:05,800 --> 00:38:09,400 Speaker 2: The wishful thinking is all gone. Now the question is 700 00:38:09,400 --> 00:38:12,000 Speaker 2: how to avoid being neither too early nor too late 701 00:38:12,320 --> 00:38:13,480 Speaker 2: in coming back down. 702 00:38:13,920 --> 00:38:15,840 Speaker 16: I do think we were a little slow to adjust 703 00:38:15,920 --> 00:38:20,200 Speaker 16: rates when inflation was getting strength. But at this point 704 00:38:20,280 --> 00:38:22,800 Speaker 16: we have policy in a good place. We can adjust 705 00:38:22,800 --> 00:38:25,480 Speaker 16: the policy rate down if the economy calls for it. 706 00:38:25,760 --> 00:38:27,520 Speaker 2: That does it. For this episode of Wall Street Week, 707 00:38:27,600 --> 00:38:30,440 Speaker 2: I'm David Weston. This is Bloomberg. See you next week.