Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
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Speaker 1: pm Eastern Time on Bloomberg Radio or watch us on
Speaker 1: YouTube search Bloomberg Global News. We wanna talk a little
Speaker 1: bit about what's going on when it comes to e cigarettes,
Speaker 1: in particular the CDC coming out recently and saying vaping
Speaker 1: is growing more prevalent among young people. In check this out,
Speaker 1: one in nine high school students that they had vaped
Speaker 1: in the past months. So let's get some thoughts on
Speaker 1: the health effects of vaping. Dr Joanna Co and his
Speaker 1: director of the Institute for Global Tobacco Control at the
Speaker 1: Johns Hopkins Bloomberg School of Public Health supported by Michael R. Bloomberg,
Speaker 1: founder Bloomberg Gulp and Bloomberg Philanthropies, she'd joins us on
Speaker 1: the phone from Baltimore. Dr Cohen, good to have you
Speaker 1: here on this Thursday. Let's get to it because some
Speaker 1: other research I've seen is that when you tend to
Speaker 1: uh do ease cigarettes, you see that in terms of adolescence,
Speaker 1: they are over three times more likely to use cannabis
Speaker 1: than those who don't. So there's a lot of things
Speaker 1: to think about when it comes to health impacts. How
Speaker 1: do you see what is the research and the thoughts
Speaker 1: that you think we should be all thinking about. Yeah, well,
Speaker 1: let me start with the bottom line that really no
Speaker 1: one should be using you cigarettes for cigarette smokers who
Speaker 1: are trying to quit. And unfortunately, there's been a lot
Speaker 1: of kids exactly as you say, Carol, have taped up
Speaker 1: the use of these cigarettes. They've tried them that come adicted.
Speaker 1: And partly this was because there are a lot of
Speaker 1: marketing of fun flavors, fruit and unicorn, at kinds of
Speaker 1: all kinds of different flavors, and that's appealing to kids.
Speaker 1: And I think kids all also don't really equate these
Speaker 1: vaping products to cigarettes. They know that cigarettes aren't good
Speaker 1: and they have not been smoking. We've seen smoking rates
Speaker 1: decline among kids. But it's been, you know, really scary
Speaker 1: to see this epidemic of vaping among young people. And um,
Speaker 1: there are health effects. As you say, it appears that, UM,
Speaker 1: kids who do vape go on to to their unhealthy behavior.
Speaker 1: We want to keep these products out of the hands
Speaker 1: of kids. Yeah, Jenny, I wanted to go back to
Speaker 1: that idea you just said about how if you're trying
Speaker 1: to quit actual smoking cigarettes, that that vaping is not
Speaker 1: the best route because I remember years ago, and maybe
Speaker 1: it was just a marketing thing, but that seemed to
Speaker 1: be sort of the appeal of vaping, that it it
Speaker 1: wasn't as dangerous as cigarette smoking and a good way
Speaker 1: to sort of wean yourself off of that has has
Speaker 1: the research sort of debunked that notion completely. Yeah, that's
Speaker 1: a good question, Mike, And UM, it is hard to
Speaker 1: quit smoking, but it's the most you know, important thing
Speaker 1: you can do for your health, and so nothing is
Speaker 1: going to be as harmful cigarettes. Um. The research is
Speaker 1: still nascent to whether you know how helpful SIGs are. Um,
Speaker 1: they're randomized trials. They see that in certain conditions they
Speaker 1: might improve smoker's chances of quitting. So I think that
Speaker 1: at this point, if you're a cigarette smoker, you've tried
Speaker 1: other FDA approved methods for quitting, whether it's nicotine replacement
Speaker 1: therapy or some various drugs, and they have not worked.
Speaker 1: These cigarettes might work for you, and it's worth to try.
Speaker 1: It's not going to be as harmful as your cigarettes,
Speaker 1: but you won't completely You want to get up cigarettes
Speaker 1: UM and move e cigarettes and then eventually quit the
Speaker 1: e cigarettes. Alright, So the FDA ban on Jewels vaping
Speaker 1: products UM the market the United States, Is it having
Speaker 1: an impact? Good questions? So actually there's an administrative day
Speaker 1: on the f SPAN on Jewel UM. This is you know,
Speaker 1: it's UM. The f d A is re reviewing the
Speaker 1: materials that Jewel submitted to make a determination of whether
Speaker 1: these products can stay on the market or not. But
Speaker 1: but the FDA is reviewing UM marketing stations for actually
Speaker 1: millions of the cigarettes and liquids. They've made determinations on
Speaker 1: a number of them, and we are going to be
Speaker 1: seeing that countrying. We're not going to be seeing as
Speaker 1: many brands on the on the market if youre UM
Speaker 1: spers as well, UM. But that's still in progress. So
Speaker 1: with Jewel Um, you know that's that's certainly a one.
Speaker 1: Products are still on the market at this time during
Speaker 1: the administer strait of stay on the ruling. And is
Speaker 1: there do you think there's any path for jewel to
Speaker 1: to bring these products back to market? You know, I'm
Speaker 1: assuming they're fighting uh in court and everything. Is there
Speaker 1: a concern that all you know, some court might uh
Speaker 1: sort of put them back in business. Well, it depends,
Speaker 1: I think. You know, there were a lot of, um,
Speaker 1: hypothetically great things about Jewel UM, and potentially the hope
Speaker 1: is that they can deliver the nick in a way
Speaker 1: that cigarette smokers find appealing, UM, so that they can
Speaker 1: switch completely to UH cigarettes and get off their cigarettes.
Speaker 1: There's that hope. No, please finish, forgive me, I don't know. UM. Yeah,
Speaker 1: So I think you know what jewel has to do
Speaker 1: is show that their products are um, you know, going
Speaker 1: to benefit the pump the pub off, that they're not
Speaker 1: going to attract kids to you, and that they are
Speaker 1: you know, not going to create additional harms for cigarette smokers.
Speaker 1: There were some concerns in them in their application that
Speaker 1: potentially UM there were some met some some toxicological conce
Speaker 1: with the application. But there, you know, potentially h Jewel
Speaker 1: can get over those and if they are ethical and
Speaker 1: not marketing to kids um and focusing on the market
Speaker 1: that could potentially truly benefit from their products. I think
Speaker 1: there's a possibility that that they can do good. All right,
Speaker 1: We're gonna leave it on that note. Dr Joanna Cohen,
Speaker 1: thank you so much, Director of the Institute for Global
Speaker 1: Tobacco Control at Johns Hopkins Bloomberg School of Public Health,
Speaker 1: of course, supported by Michael R. Bloomberg, founder of Bloomberg
Speaker 1: LP and Bloomberg Philanthropy. She was joining us on the
Speaker 1: phone from Baltimore. Keep in mind, Jewel just created, you know,
Speaker 1: roughly a decade or so ago, so not such a
Speaker 1: long time ago, I think even under a decade, and
Speaker 1: so it's interesting to see kind of the rise and
Speaker 1: fall of something like this. Absolutely, and I think Carol,
Speaker 1: we can all agree there's there's nothing as nasty as
Speaker 1: actually chewing tobacco, I think. So this is Bloomberg Business
Speaker 1: Week with Carol Masser and Bloomberg Quick Takes Tim Stenovic
Speaker 1: on Bloomberg Radio. One of the stories that is certainly
Speaker 1: getting a lot of a tension on the Bloomberg is
Speaker 1: today's Bloomberg Big Take. It's must read, as determined by
Speaker 1: our editorial team here at Bloomberg. It's about how renters
Speaker 1: across cities and income brackets are really struggling to find
Speaker 1: new homes or pay for the ones that they already
Speaker 1: live in. Let's get more with Bloomberg News US Economy
Speaker 1: reporter Maria Paulo Paula Jas Torres. She's with us in
Speaker 1: our Bloomberg Interactive Broker studio. You would think, as I
Speaker 1: said to you, my million years of Spanish would make
Speaker 1: me better with pronunciations, but um, we're so glad to
Speaker 1: have you here with us. Uh. Maria talked to us
Speaker 1: about this story because I do think when it comes
Speaker 1: to inflation prints we're watching the different components of the
Speaker 1: inflationary pressures. Some are coming down when it comes to
Speaker 1: shelter not so much so. Yesterday in the CPI report,
Speaker 1: random shelter was the number that was hiking up the most,
Speaker 1: And in this story, we just got to show the
Speaker 1: stories behind that. So in a lot of cities in
Speaker 1: the US, not only the ones we know, you know,
Speaker 1: New York, in California, but in many other places here
Speaker 1: we talk in Las Vegas, Atlanta, Phoenix, Miami, twoson um
Speaker 1: places where rent usually wasn't as expensive now it's very
Speaker 1: expensive that not even locals can afford it, and their
Speaker 1: fear in eviction and facing a lot of challenges, you know,
Speaker 1: with how essential living is. How much have they got
Speaker 1: up a lot. Yes, it's the first time that in
Speaker 1: a while that the media and rent is two thousand dollars,
Speaker 1: and we we saw how it was a huge, a
Speaker 1: huge um hike for for the typical American. Is well,
Speaker 1: we talked about right like we're talking about energy says,
Speaker 1: we're talking about food prices. But when we think about it, right, my,
Speaker 1: I think about it when I'm making my mortgage payment,
Speaker 1: like it's a big chump chunk of change. And if
Speaker 1: you're renting the same thing that rental prices because so
Speaker 1: many Americans cannot afford to actually buy homes, those rental
Speaker 1: prices have gone up. But overall, shelter is such a
Speaker 1: big part of what every American pays on a regular basis. Yeah,
Speaker 1: and that's exactly what we wanted to focus this story
Speaker 1: on rents because um, the housing market is very it's
Speaker 1: a very hot topic right now. Because it's a heart market.
Speaker 1: But not a lot has been done on rents either,
Speaker 1: and they're sloppering a lot, renting a slfering a lot. Yeah,
Speaker 1: I think shelter is something like a third of CPI.
Speaker 1: So even if you're not worried about making rent, if
Speaker 1: you're a market person worried about inflation, it's just the
Speaker 1: most important thing in inflation. But Maria, I'm wondering, you know,
Speaker 1: we tend to focus on the inflation problem in the
Speaker 1: US a lot, uh politically, it's it's just a big
Speaker 1: hot topic. Um, But really inflation is a globe problem,
Speaker 1: and I'm wondering, is this problem with rising rents is
Speaker 1: that also a global problem? And is the U s
Speaker 1: sort of uh in the same boat as the rest
Speaker 1: of the world or is it worse here you know,
Speaker 1: house this situation globally Yeah, Well, other countries are also
Speaker 1: struggling a lot with rent I know in Australia. And
Speaker 1: we lead a stephonomic episode on this article that came
Speaker 1: out two weeks ago, and we were talking also another
Speaker 1: global issues, but here we got to focus mostly in
Speaker 1: the US because we saw in a Census beer survey
Speaker 1: that it was the biggest number in a while. Eight
Speaker 1: point five million Americans weren't able to pay their month
Speaker 1: to the more the monthly rent in June and July.
Speaker 1: So that's the biggest number we've seen you in a
Speaker 1: long time. And it's a concerning issue here in the state,
Speaker 1: especially because a lot of people moved to you know,
Speaker 1: CDs that have more calorious climates during the pandemic and uh,
Speaker 1: you know, headquarters moved and that cost places like Atlanta
Speaker 1: and Miyeah me to get hired amen of rents and
Speaker 1: the locals now cannot afford it. Well, that's what I wonder.
Speaker 1: I know, just from my own family anecdotally, there's I've
Speaker 1: had a lot of members moved down south because they
Speaker 1: can do flex working. Their employees don't care where the
Speaker 1: heck um they are living, and they're looking for places
Speaker 1: where there's lower taxes, maybe warmer climates. How is that
Speaker 1: also led to some of these imbalances and higher rental prices. Yeah,
Speaker 1: that's one of the reasons that the man has increased
Speaker 1: and the prices have increased. But also this is the
Speaker 1: first time since the pandemic that a lot of renters
Speaker 1: are left without the moratoria that allow them to, you know,
Speaker 1: be more flexible when they received the same amount of
Speaker 1: income during the pandemic. Um. So it's the sum of
Speaker 1: a lot of things. Is the the end of the
Speaker 1: moratoria terms? Is the inflation that we're seeing is the
Speaker 1: high demand for people moving south. So everything ones like
Speaker 1: k Rendal Siding in the article we quote her is
Speaker 1: a perfect story for renders right now. You know, Maria,
Speaker 1: I was reading the story and I was thinking back
Speaker 1: two years ago in New York, there was a guy
Speaker 1: who tried to start a political party, Carol. You might remember,
Speaker 1: it's called the Rent is Too damn High. They didn't
Speaker 1: get very far with that political party. But it does
Speaker 1: make me think, you know, is there is there any
Speaker 1: signs of a political backlash about this? Is there any
Speaker 1: sort of pressure being put on on the politicians to
Speaker 1: solve this issue? Um? I would love to hear that.
Speaker 1: I would love to see if there's another meme that
Speaker 1: comes out of this issue. Um. When we took out
Speaker 1: the podcast two weeks ago, that was one one of
Speaker 1: the editors tweeted out the rams to them high. But um,
Speaker 1: it would be definitely an issue to watch in these
Speaker 1: new mid term elections. That makes any kind of impact.
Speaker 1: But so far, what we've seen most is people advocating
Speaker 1: for it and other issues like, um, how these rent
Speaker 1: people cannot afford the rent there that the manage increasing.
Speaker 1: People are constructing new condos um that you know, I
Speaker 1: don't need to be builble, but they're only being built
Speaker 1: because they're targeting the new audiences moving in that needs
Speaker 1: like fancier apartments. So that's in women started saying it's
Speaker 1: more social than political. Alright. Well, our on air UM
Speaker 1: whisperer Ariel Agami, our producer of our YouTube show, said
Speaker 1: it was Jimmy McMillan who went out there and said,
Speaker 1: read that's right. How can I forget that name? I
Speaker 1: don't know, but all right man, he just like closes in. Maria,
Speaker 1: thank you so much. Really appreciate the Bloomberg big take.
Speaker 1: Check it out on the Bloomberg terminal. I'm brooom journal. Yeah,
Speaker 1: but you let me drive? No, no, no, honey, I'll gravel.
Speaker 1: I want to drive. It's good question. Drive is the
Speaker 1: drive to the clothes on Bloomberg Radio. It is time
Speaker 1: to drive towards the clothes. It is Thursday, August eleventh,
Speaker 1: and we've just got about it. Ten and a half
Speaker 1: minutes left in today's trading session. Charlie breaking down those
Speaker 1: numbers the equity side of things. We are just coming
Speaker 1: off our loads of this session, but we're seeing it
Speaker 1: across the board. Little changes though on the SMP and Dow.
Speaker 1: Really the NASTAC the underperformer. So let's get to it
Speaker 1: with Axel Murk, President and chief investment officer at the
Speaker 1: investment advisory Formerk Investments. He joins us on the phone
Speaker 1: from San Francisco. Axels so great to be talking with you.
Speaker 1: It's been a while. Um, you do focus on macro trends.
Speaker 1: What are the top macro trends that you are focusing
Speaker 1: on in today's environment? When I feel like there's a
Speaker 1: lot of them, but there's a couple of really big ones. Yeah.
Speaker 1: I think cat hurting is a technical I like that
Speaker 1: on these days we have all these teenagers that that
Speaker 1: called the market and all the tas de fedd. I mean,
Speaker 1: what what what we have is we we've had high inflation,
Speaker 1: and I think what I what everybody is trying to
Speaker 1: do is they try to put this into the linear models, saying, oh,
Speaker 1: if we just high crates or if we just do
Speaker 1: this um. What I think people have to realize is
Speaker 1: that once inflation is high, we have created unstable dynamics
Speaker 1: and so and that's why everybody is so confused. That's
Speaker 1: why the mark goes up one day, then goes down
Speaker 1: one day, and every day we we changed the tune
Speaker 1: of what it's all about. And and now we think,
Speaker 1: oh my god, the inflation is low, so everything is
Speaker 1: going to be fine, but it will be fine for
Speaker 1: a few weeks, maybe a few months, and then guess what,
Speaker 1: another inflation print is going to be hind And and
Speaker 1: so that's the sort of and if you're asking me
Speaker 1: with the big trends I'm watching. While I'm obviously watching
Speaker 1: the economic development, I'm watching them, I'm watching what inflation
Speaker 1: is gonna do. But also I'm watching human nature. We've
Speaker 1: had folks like Bananchi right in editorials that we are
Speaker 1: so much smarter than the nineties seventies. Yes we are,
Speaker 1: but it's human nature. And so when inflation comes down
Speaker 1: a little bit, okay, you take the you take the
Speaker 1: sledgeham away a little bit, right, But it's if we
Speaker 1: have this unstable dynamic, and I think that's what we
Speaker 1: really have to just accept and and try to moddel
Speaker 1: through accel. One word that's obviously being thrown around a
Speaker 1: lot in this environment is stagflation. And I know your
Speaker 1: firm launched a stagflation et F to murk stagflation e
Speaker 1: t F to ticker stg F. Talk to us about
Speaker 1: that strategy. How does that et F specifically sort of
Speaker 1: invest in a stagflation area environment? And and how in
Speaker 1: general should investors think about investing when there's stagflation like
Speaker 1: we're seeing. We looked at what happens when when inflation
Speaker 1: expectations move higher, and obviously we only have the nineties
Speaker 1: seventies economy is kind of a little different, but stocks
Speaker 1: on a on a real basis didn't perform so well.
Speaker 1: Ideally you want to invest in the CPI, but you
Speaker 1: can't do that directly. So what we invest in We
Speaker 1: have a heavyweighting in tips, and then we invest in
Speaker 1: old on oil gold in real estate and have a
Speaker 1: trend following methodology in oil golden real estate because that's
Speaker 1: sort of trend methodor Pollo methodology worked well in staclationary environments.
Speaker 1: And and net what you want to do, you want
Speaker 1: to have something and at least the way that we
Speaker 1: designed it that is a substitute to potential bond a
Speaker 1: location as that sort of volatility, but has the opportunity
Speaker 1: that in the stagflation environment gives you an extra kicker,
Speaker 1: whereas in a in a normal environment behave more like
Speaker 1: like a like a bomb might. And so we're trying
Speaker 1: to bridge that. And I think this is the first,
Speaker 1: though I know it's the first staclation team d CAP
Speaker 1: in the market. It's it's a tool for the toolbox
Speaker 1: of investors. I'm not going to replace everything else, but
Speaker 1: we believe it's a it's a diversified that people want
Speaker 1: to look at. Excell when it comes to macron Any
Speaker 1: asked about that initially, what what key things might you
Speaker 1: be focusing on. Is it possible should we concede at
Speaker 1: some point that we can actually have persistently higher inflation,
Speaker 1: maybe not eight nine percent that's manageable. Maybe we need
Speaker 1: to rethink that it needs to be three to four percent,
Speaker 1: but that we can do it still with jobs growth
Speaker 1: and ultimately some economic growth. Do we need to kind
Speaker 1: of rethink our economic model, perhaps, especially as we see
Speaker 1: a turnback on globalization. Mike and I were just talking
Speaker 1: about near shoring or you know, more manufacturing coming home.
Speaker 1: Certainly here in the United States, do we need to
Speaker 1: rethink our metrics that describe kind of an okay and
Speaker 1: stable economy. Well, first of all, even when VOLCA got
Speaker 1: inflation out of control, we didn't go right back down
Speaker 1: to two percent and lived happily ever after. And so
Speaker 1: we have to keep in mind that this is going
Speaker 1: to be a process. The the challenges really is whether
Speaker 1: the FETE is going to lose focus too much. We
Speaker 1: in the seventies we have to stop and go economics.
Speaker 1: THEFT says no, they're not going to do this, meaning
Speaker 1: that the moment that the economy slowed down, they stopped
Speaker 1: and so forth. And that's where I mentioned the human
Speaker 1: factor is so important. The theory is one thing, but yes,
Speaker 1: what are you going to be satisfied with by all means?
Speaker 1: We have lots of lots of tail winds have turned
Speaker 1: into headwinds. Be the globalization to move from just in
Speaker 1: time production, just in case production, um, the Ukrainian War
Speaker 1: is I believe the symptom of less stability globally. Everybody's
Speaker 1: gonna invest more in military defense, and that means budget
Speaker 1: deficit is going to continue to be high. Um. A
Speaker 1: lot of the and and a lot of the the
Speaker 1: the the benefits we had from globalization, um in reverse
Speaker 1: when it comes to to inflation anyway, and and so yes,
Speaker 1: and it's going to be higher. But the Federals obviously
Speaker 1: has a job to do, and the question is whether
Speaker 1: they'll do it or not. At this stage, the only
Speaker 1: thing that the power FET has admitted is that the
Speaker 1: models have been wrong. UM. I think it was Larry
Speaker 1: Summers who said we need a new approach. They need
Speaker 1: to throw out this backward looking methodology they they they
Speaker 1: introduced and all kinds of other things, and we may
Speaker 1: need a new FET chair for that. And that's not
Speaker 1: on the horizon. So I don't think we're gonna get
Speaker 1: to something, um that's going to be more stable in
Speaker 1: the long run, for for quite a while. Act. So,
Speaker 1: I'm curious what you think about this legislation in Washington,
Speaker 1: the Inflation Reduction Act. It obviously focuses a lot on
Speaker 1: green energy. What are some of the market implications for
Speaker 1: this bill in your opinion? Well, yesterday's low inflation print
Speaker 1: was clear proof that the Inflation Reduction Act has a
Speaker 1: full impact already. And I'm saying that's gonna ye points right.
Speaker 1: I mean, these they they they come up with these
Speaker 1: fancy names. Obviously there is no direct impact on inflation
Speaker 1: many of these the impacts is no longer run, but
Speaker 1: it has a nice name. When it comes to green
Speaker 1: technology that the one thing I would like to just
Speaker 1: point out is everybody wants to turn green, and nobody
Speaker 1: knows where all these these minerals come from. That you
Speaker 1: need fallow batteries and whatnot, and so on that end. Anyway,
Speaker 1: I'm not suggesting the overall CPI is going to be
Speaker 1: high for that matter, but but turning everything green is
Speaker 1: gonna be expensive. Now, obviously the cost of some stuff
Speaker 1: is coming down. But ultimately this it's it's a political
Speaker 1: thing to call it inflation reduction Act. The actual implication
Speaker 1: is is obviously we're not doling out checks as much
Speaker 1: anymore as we used to. They do another part of
Speaker 1: the world, the Germans want to give yet another stimulus.
Speaker 1: When you give a check but supply is correct, trained
Speaker 1: then you have a problem. And that's really why why
Speaker 1: is the acculation lasts for a while, Because the politically
Speaker 1: right thing to do is the economically wrong thing to do. Yeah,
Speaker 1: makes a lot of sense Um gotta run. Great to
Speaker 1: hear from you again. Act Soll Murk. He's President, chief
Speaker 1: investment officer over at Murk Investments, joining us on the
Speaker 1: phone from San Francisco. Thanks for listening to Bloomberg Business Week.
Speaker 1: Download the podcast on iTunes, SoundCloud, or Bloomberg dot com,
Speaker 1: and you can also listen to our radio show at
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Speaker 1: YouTube search Bloomberg Global News.