Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane
Speaker 1: jay Ley. We bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
Speaker 1: Bloomberg dot Com, and of course, on the Bloomberg. It
Speaker 1: was interesting to see the short end the two year
Speaker 1: treasury yields decline as well, by the second most so
Speaker 1: far this year. In response to the press conference, it
Speaker 1: was interesting to hear what j. Powell said about trade,
Speaker 1: even though he said that they do not do trade policy.
Speaker 1: He said trade is a new risk, a low prile
Speaker 1: profile risk that has become more prominent to the outlook
Speaker 1: with respect to how much it could curtail it. Here
Speaker 1: with us. Ibrahim Rabari, the Group head of Global Macroeconomics,
Speaker 1: joining us here in our eleven three studios. Ibrahim, thank
Speaker 1: you so much for being with us. I want to
Speaker 1: start with trade because J. Powell, uh, you know, pretty
Speaker 1: much stayed the course yesterday. But trade is really the
Speaker 1: big question. And from your perspective, based on what we
Speaker 1: know from President Trump's administration, how much do you think
Speaker 1: the rhetoric that we have heard so far will curtail
Speaker 1: economic growth this year. Well, thank you as a pleasure
Speaker 1: to be here today, and I I think our base
Speaker 1: cases it won't curtail activity that much, at least in
Speaker 1: the US this year. And that's on the assumption that
Speaker 1: we will see something along the lines of what the
Speaker 1: media reported it will be announced today, and that the
Speaker 1: response to that will be fairly moderate from from other countries,
Speaker 1: notably China. Of course, in that scenario, I think trade
Speaker 1: might be roughly neutral even for for for the U
Speaker 1: S or ever so slightly negative because of course some
Speaker 1: US companies are actually going to benefit from what these
Speaker 1: from what the administration tries to achieve. Well, let's let's
Speaker 1: just be very clear here. So we've already gotten the
Speaker 1: steel tariffs, but what we're really talking about today is
Speaker 1: the potential crackdown on theft of intellectual property from China.
Speaker 1: So that is what we're talking about. We're expecting possibly
Speaker 1: fifty billion dollars of sanctions in some in some form
Speaker 1: or another from President Trump today. I want to talk
Speaker 1: specifically about the escalations there because we are hearing that
Speaker 1: China would retaliate by way of grains and the mid
Speaker 1: and the Midwest States, So given a sort of escalation
Speaker 1: of that, would that change your outlook? No, And I
Speaker 1: think if it, If it, if it is limited indeed
Speaker 1: to retaliation that's perhaps targeted the specific states, mostly in
Speaker 1: the agricultural sector, then I think it's significant for those sectors.
Speaker 1: But I don't think it will be more than a
Speaker 1: very minor influence on our micro forecast the feds overall
Speaker 1: outlook as well, and therefore monitory policy. We're gonna catch
Speaker 1: up with Bloomberg's Tom mackenzie from Beijing a little bit
Speaker 1: later in the program to get more details on how
Speaker 1: China may rest bond to the tariffs that could be
Speaker 1: unvilolated by the President. I want to get your view
Speaker 1: on the Federal Reserve. Abraham, what have we learned about
Speaker 1: the reaction function of Chairman Power yesterday? Well, relative to
Speaker 1: I think the uncertainty and and and and some expectations,
Speaker 1: I think he came through as very gradualist and in
Speaker 1: some sense as very little changed from the leadership under
Speaker 1: under his predecessor, and clearly reactive. So I think the
Speaker 1: most significant statement in the press conference was that the
Speaker 1: committee didn't see any signs of an acceleration of inflation,
Speaker 1: so that tells me they're going to stay the course.
Speaker 1: I think it's still the expectation that we will see
Speaker 1: a higher quarter until quote unquote something breaks. But we're
Speaker 1: certainly not seeing a change of tack. The message seems
Speaker 1: to be shown me the data. Now. Federal Reserved chair
Speaker 1: Janet Yellen used to say, we're data dependent. But this
Speaker 1: sounds like an individual that is truly going to be
Speaker 1: data dependent, who is not married to a certain economic
Speaker 1: model in the expectations of what might develop based on that.
Speaker 1: Is that your interpretation too, I I would certainly think
Speaker 1: that he's not quite as as wedded to a certain
Speaker 1: way of looking at the data. In the sort of
Speaker 1: academic tradition of Phillips curves, neutral rates, they came up
Speaker 1: very often as well. I don't think he's more data
Speaker 1: dependent than Chairman Yellen was, but I think he was
Speaker 1: at least clearer that he didn't see the trade off
Speaker 1: between growth and inflation in a way that would necessarily
Speaker 1: push him to catch up with that outlook. Meanwhile, perhaps
Speaker 1: for Powell isn't necessarily offering up a prediction of where
Speaker 1: he sees the credit cycle. But some investors have some
Speaker 1: prominent investors and they're starting to see, in particular Scotland
Speaker 1: Minard of Guggenheim Investment Management seeing a flat yield curve
Speaker 1: in a year and a recession six to nine months
Speaker 1: after that. Do you agree so? I think the risk
Speaker 1: of a recession or at least a significant downturn over
Speaker 1: the next two to three years is pretty high, and
Speaker 1: I would guess it would be associated with a flat
Speaker 1: yield curve as well. Now, of course, the uncertainty around
Speaker 1: it is high. To when we think about downturns. What
Speaker 1: we have to think about is vulnerabilities and shocks. Vulnerabilities
Speaker 1: are clearly going up. Shocks are hard to predict. But
Speaker 1: I think that two to three horizon seems very plausible.
Speaker 1: Just in terms of yesterday, the disappointment for very hawkish
Speaker 1: expectations was that we didn't quite make it to four hikes.
Speaker 1: We did drift higher in terms of their projections for
Speaker 1: rates through through and Tilsa's point this flattening of the curve.
Speaker 1: You do have this situation where rates in twenty are
Speaker 1: actually materially higher above where they see the long term
Speaker 1: neutral rate. What do you make of that dynamic in
Speaker 1: terms of the forecasting at the moment Abrahim. I think
Speaker 1: it is very interesting, and I think particularly what's been
Speaker 1: going on for the over the last six months is
Speaker 1: actually very interesting. If you go back to September, only
Speaker 1: five people at the on the effort and see were
Speaker 1: at three percent or higher. Now it's twelve, so it's
Speaker 1: a really big change in that specific number. I personally
Speaker 1: think one reason why that number is now three in
Speaker 1: four percent above the long term neutral rate is actually
Speaker 1: so that they don't have to raise rates faster today.
Speaker 1: So it's a warning sign for things not to get
Speaker 1: out of fans that may have some coming influence. Does
Speaker 1: this play into that idea that they are still slightly
Speaker 1: cautious about the potential of overheating. I think they're cautious,
Speaker 1: but at the same time, again, I think they're kind
Speaker 1: of they're fairly reactive. So I think what the new
Speaker 1: chair laid out yesterday's I think the data have to
Speaker 1: convince him that inflation is picking up faster than expected.
Speaker 1: How much is this out of the Fed's hands. How
Speaker 1: much of this has to do with the fact that
Speaker 1: the US is issuing a great proportion of debt on
Speaker 1: the short end to finance its deficit, thus raising the
Speaker 1: rates in the near term at the expensive growth of
Speaker 1: the long term leading to a flattening of the yield curve,
Speaker 1: even if the FED is somewhat cautious. So very recently,
Speaker 1: we've seen a lot of movement in in in the
Speaker 1: short term for a variety of reasons. As you mentioned,
Speaker 1: issuance is one. We've seen the tax band effect, corporate
Speaker 1: behavior as well. And the FED of course is also
Speaker 1: changing it's it's it's balance sheet. But in terms of
Speaker 1: the steepening or flattening dynamic that we've seen over the
Speaker 1: last couple of months, the long and actually did move
Speaker 1: significantly too. And I think there it isn't really it
Speaker 1: is really these factors, even though tax plan and FED
Speaker 1: balance sheet coming. But to leasis point, Abraham, something is
Speaker 1: happening at the front end in terms of short term
Speaker 1: borrowing costs, whether you go through Libel commercial paper, what
Speaker 1: you see in short data, investment grade treasury bills, borrowing
Speaker 1: costs in the short term getting higher. Now, is that
Speaker 1: going to result in tide of financial conditions in a
Speaker 1: way that perhaps the FED doesn't actually quite want just yet. Yes,
Speaker 1: And I was curious to see that nobody asked them
Speaker 1: about that specific failure of the press pack in the
Speaker 1: news conference, isn't it? Well, you tell your colleagues, but
Speaker 1: you know what I think you will. I do think.
Speaker 1: I mean there's a debate. I think there is a
Speaker 1: moderate degree of financial tightening coming through on that score.
Speaker 1: Might expectation for now is it will actually reverse and
Speaker 1: that I think the Fed is going to wait to
Speaker 1: see to see that happen. And it is linked to
Speaker 1: some of these influences like the tax plan, but perhaps
Speaker 1: also Treasury issue. Abraham rack Barr is Citty Group, Head
Speaker 1: of Global Macroeconomic it's a big question how much will
Speaker 1: a full blown trade war crimp the economic growth that
Speaker 1: we've seen so far. Lara ram is going to answer
Speaker 1: that question for us in complete detail, and you can
Speaker 1: trade on it from here on out. Laura Ram is
Speaker 1: Chief US Economists. So give us a number, alright, uh number?
Speaker 1: Percent of of a crimp in the U economy? Yeah,
Speaker 1: you know, small, really small. I think you know, less
Speaker 1: than point one percent um in terms of economic impact
Speaker 1: of tariffs. I think one of the questions we have
Speaker 1: to ask ourselves. You know, two months ago, this market
Speaker 1: rally seemed unstoppable. It was a one way rocket going higher,
Speaker 1: and I think it speaks to the fear and power
Speaker 1: of the you know, any kind of protectionism that we've
Speaker 1: has actually stopped, Like what's changed now two months ago?
Speaker 1: It's really been this trade rotoric and you know, the
Speaker 1: economy is still looking solid. Um, global economies are still
Speaker 1: looking solid. The FED is getting a little more confident,
Speaker 1: but their outlook really hasn't changed. And in fact, we've
Speaker 1: had all this new government stimulus that makes the economy
Speaker 1: look even better. This rhetoric has power, and I think
Speaker 1: we all need to be humble in the face of that.
Speaker 1: So here's my question. Everyone is saying that, you know,
Speaker 1: the U. S economy is gaining steam, it could possibly
Speaker 1: get an even bigger bump because of the tax cuts.
Speaker 1: What could change that would make you advise your clients
Speaker 1: that it is time to be more cautious. So I'm
Speaker 1: already there, Um, I think because saying sounds good, Because
Speaker 1: you know, markets are so forward looking and there's already
Speaker 1: so much good news priced in. How do we get
Speaker 1: better news priced in? From here? Everybody has been tripping
Speaker 1: over themselves to raise their GDP forecasts. So when I
Speaker 1: look ahead, I see, you know, our an economy that's
Speaker 1: still really powered by the consumer. Well that's great, but
Speaker 1: it's really powered more by wealth gains than wage gains.
Speaker 1: And how do we connect that to financial markets? Because
Speaker 1: why do we care about the economy. We care about
Speaker 1: the economy because it's what drives our financial returns and
Speaker 1: our financial picture. And when you connect those dots, it
Speaker 1: makes the consumer hyper sensitive to changes in market sentiment.
Speaker 1: So when I look out across growth over the next year,
Speaker 1: we're still overly reliant on the consumer business investment. Green
Speaker 1: shoots of recovery there, but not you know, really confident traction.
Speaker 1: And so I see it is a more precarious picture
Speaker 1: with a lot of good news already priced in. Okay,
Speaker 1: So when you're saying that it's dependent on wealth gains,
Speaker 1: in other words, are you saying that a sell off
Speaker 1: in equities could potentially lead directly to aid economic downturn,
Speaker 1: especially without wage gains for the US consumers, and especially
Speaker 1: given the fact that US consumers have actually packed on
Speaker 1: quite a bit of non mortgage debt which is set
Speaker 1: to reprice given the higher short term rates. Yeah, and
Speaker 1: you know, downturn is probably strong, but you know, moderation
Speaker 1: from here, and I you know, look at the savings rate.
Speaker 1: A lot of people discount that, and I think that's
Speaker 1: a mistake because people have forgotten how it felt to
Speaker 1: be over levered going into the last um you know, downturn.
Speaker 1: And I think right now, when we look at what
Speaker 1: is powering the consumer, Yes, everyone has a job, but
Speaker 1: the wages just aren't there a short time borrowing Colston
Speaker 1: ready started to push higher UM no matter what you
Speaker 1: look at, what's the net effect of that on the
Speaker 1: US economy at the moment, and that has a significant impact.
Speaker 1: A lot of the treasury debt that's being issued is
Speaker 1: short term debt, so that raises the funding costs for
Speaker 1: the government. And yeah, all these credit card debts, you know, um,
Speaker 1: you know, the short term debt that consumers have taken on.
Speaker 1: A lot of that is UH is priced off of
Speaker 1: the short end of the curve. So I think it's
Speaker 1: this chipping away and it's human nature, right, we all
Speaker 1: get too pessimistic and then we all get too optimistic.
Speaker 1: And that's what I saw at the end of last year,
Speaker 1: everybody just embracing that goldilocks growth and financial market environment
Speaker 1: and forgetting that we've had, you know, complacency to me
Speaker 1: is really set in and where advising investors to be
Speaker 1: prepared for much higher volatility and to be really prepared
Speaker 1: for a much more difficult investment terrain to navigate. It's
Speaker 1: so interesting for me to hear you talk about consumer
Speaker 1: leverage because most analysts an economists I speak to write
Speaker 1: it off. They say, if you look at it, it's
Speaker 1: you know, on a sort of per GDP growth basis
Speaker 1: or per household wealth level, it's really not that big
Speaker 1: of a deal. And yet you raise a really good point,
Speaker 1: which is there's sort of a two tier system here.
Speaker 1: We've got the consumers that don't have mortgages, that are
Speaker 1: paying higher fixed costs with rents, etcetera. Have taken out
Speaker 1: a record amount of debt, whereas the wealthiest have remained
Speaker 1: a pretty pretty well set. Can you talk about how
Speaker 1: significant this is for the economic out look going forward?
Speaker 1: So you know, this is one of the things, UM,
Speaker 1: that we still need to really pay attention to because
Speaker 1: as we haven't seen the wage gains come through, it's
Speaker 1: really impacting everything. I was speaking to UM a group
Speaker 1: of you know, human resources executives UM that really are
Speaker 1: at large UM nationally publicly traded companies they talk about
Speaker 1: the fact that they are still being very cautious on
Speaker 1: the wage front and doing everything they can to not
Speaker 1: increase wages UM partly because as they're publicly traded, they
Speaker 1: are really reticent to pass that along, you know, through
Speaker 1: their earning statements. So I think we have to wonder
Speaker 1: where we get to the quarter where either they end
Speaker 1: up passing along those higher costs and the earnings look
Speaker 1: less favorable. Um. But all of it really speaks to
Speaker 1: the fact that this tightness in the labor market and
Speaker 1: this UM strain on the consumer household balance sheet, something's
Speaker 1: out a gift. So, as John was pointing out, really
Speaker 1: uh wisely, the rise and interest rates, the rise in
Speaker 1: short term rates and we're talking lib or, which is
Speaker 1: one of the benchmarks, but also two year yields, and
Speaker 1: and uh take it, take it the range. How much
Speaker 1: will this directly go into higher defaults and delinquencies on
Speaker 1: this consumer debt? So, you know, so far delinquents to
Speaker 1: rates look really good, which is one of the things
Speaker 1: that most analysts used to UM discount concern about this
Speaker 1: UM and defaults. Higher debt levels, they're never a problem
Speaker 1: until it's a big problem. UM. So you know, speaking
Speaker 1: to the credit investor leaks, so that turns around you
Speaker 1: and says, credits okay because default right alone, Yeah, exactly,
Speaker 1: that's exactly right. So we're all sort of frogs in
Speaker 1: the pot, you know, but the heat is slowly getting
Speaker 1: turned up. So I think, you know, it really just
Speaker 1: speaks to the fact that, um, when we get optimistic
Speaker 1: about growth, we need to still be realistic. You know.
Speaker 1: Optimism to me is still two and a half percent growth,
Speaker 1: so low relative to past economic cycles. And the reason
Speaker 1: for that is because when we look at the consumer
Speaker 1: and we look at how the consumer is power going forward,
Speaker 1: there just isn't a lot of juice left in the
Speaker 1: juice box, you know, there's I think we're really coming
Speaker 1: to a place where we either need to see business
Speaker 1: investment pick up significantly or we need to see wages
Speaker 1: ride rise, which means inflation um. And I think the
Speaker 1: fact that the consumer is so reliant on wealth gains
Speaker 1: means that there is a vulnerability there to a correction
Speaker 1: the stock market, which is new for us watching the economy.
Speaker 1: It's been great to cash shot with you managing to
Speaker 1: make it over from Philadelphia to New York City and
Speaker 1: some terrible weather over night. So thank you very much
Speaker 1: for joining us FS Investment Solutions Chief US Economists. Today
Speaker 1: is World Water Day. We should recognize that and to
Speaker 1: solve the global water crisis, it would take donations of
Speaker 1: about two hundred and billion dollars a year. Two hundred
Speaker 1: billion dollars a year. How much do you think pim
Speaker 1: the aid is annually? It's actually eight billion dollars, which
Speaker 1: is a huge gap. Here to talk about how to
Speaker 1: bridge that gap is Gary White and Matt Damon, co
Speaker 1: founders of water dot Org and Water Equity. Matt Damon
Speaker 1: is also known as his for his side gig of
Speaker 1: acting Um. But I want to start with you, Gary.
Speaker 1: I want to talk about bridging this gap, how you're
Speaker 1: trying to attract investors, what the interest is and frankly
Speaker 1: for our audience, are their actual returns here or is
Speaker 1: this just a charity play? No, there actually are returns here.
Speaker 1: And I think that what underpins this is that you know,
Speaker 1: there's billions of people who lack access to water and sanitation,
Speaker 1: and the reason this can work as an invest business
Speaker 1: investment model is because they spend hundreds of billions of
Speaker 1: dollars every year coping with this crisis. So they're spending
Speaker 1: time walking to collect water hours each day. Women will
Speaker 1: spend two hundred million hours today walking to collect water.
Speaker 1: They could be spending that time at a productive activity,
Speaker 1: or they're sick because of contaminated water, or in urban areas,
Speaker 1: they're having to pay for water from water vendors uh
Speaker 1: sometimes twenty of their income. So it seems like there's
Speaker 1: a market here, and what we've been able to do
Speaker 1: is to connect investors with small loans micro loans at
Speaker 1: the household level so that women can get a water
Speaker 1: tap at their house as opposed to walking hours each
Speaker 1: day to get water, and then they can use those
Speaker 1: savings or the time they spend working at a paying
Speaker 1: job to repay the loan. So we found a way
Speaker 1: to connect investors who want to have that social impact,
Speaker 1: but also our fund provides a targeted three and a
Speaker 1: half percent financial return to investors while helping people escape
Speaker 1: the water crisis. So, Matt, I want to talk about
Speaker 1: your involvement in this. Obviously, um you are known for
Speaker 1: other things other than water preservation. You're also known for
Speaker 1: the many Hollywood movies and awards that you've garnered over
Speaker 1: your lifetime. Um, I'm just wondering what attracted you to
Speaker 1: this and uh and sort of what has your celebrity
Speaker 1: Brian mean, who are you trying to sort of target here? Uh? Well, UM,
Speaker 1: I got interested in in the issue of water and
Speaker 1: sanitation in two thousand six on a on a trip
Speaker 1: that I took to kind of learn about issues extreme poverty.
Speaker 1: Just the enormity of it just floored me. And the
Speaker 1: fact that nobody, uh I wasn't aware of anybody really
Speaker 1: talking about it. And um so I started to try
Speaker 1: to get involved and and and and do something. I
Speaker 1: started something called H two Africa and we were basically
Speaker 1: trying to raise raise funds for little ENGOs that we're
Speaker 1: doing good work um throughout Africa. And and but I still,
Speaker 1: as as I started to get more familiarized with the
Speaker 1: issue and the complexity of it, I was trying to
Speaker 1: think about how I could really maximize my impact. And
Speaker 1: and that was what made me think I should I
Speaker 1: should partner with the kind of pre eminent expert I
Speaker 1: could find. And that's what led me to to Gary
Speaker 1: and and Gary's being very humble about this idea of
Speaker 1: of micro lens. He kind of pioneered this idea of
Speaker 1: taking the the concept of microfinance and applying it to
Speaker 1: the water sector. And he did that because he had
Speaker 1: spent his entire adult life in these communities and and
Speaker 1: had that realization that people were paying for water. The
Speaker 1: poorest of the poor. We're getting their water somehow, either
Speaker 1: either with their time or they were in many cases,
Speaker 1: as he said, that spending up to their income just
Speaker 1: to get that water. And so, but what they didn't
Speaker 1: have with savings, so he knew they could pay off
Speaker 1: alan if if if if we fronted the money. You know,
Speaker 1: in a lot of these uh urban areas that you know,
Speaker 1: the municipality is piping water right under the feet of
Speaker 1: the people who live in these slums that they're they're
Speaker 1: just not connected to it. So they're paying ten to
Speaker 1: fifteen times more for their water than the middle class
Speaker 1: in their country. So so the theory went, And when
Speaker 1: I first met Gary, this was kind of in its
Speaker 1: nascent stages, but the theory went, well, if we could
Speaker 1: front them the money, um, they could pay the loan
Speaker 1: back and and then they'd be connected and they'd have
Speaker 1: bought all this time back and so and so, you know,
Speaker 1: not only would they you know, would they be uh
Speaker 1: able to pay pay off the loan. They'd have more
Speaker 1: income in the future because they'd have more time to
Speaker 1: work at at at a job, rather than waste all
Speaker 1: this time standing in line or going on you know,
Speaker 1: collecting water um. And the idea has really Gary called
Speaker 1: it water credit. That idea has been more successful than
Speaker 1: we ever really could have hoped. I mean, it's been
Speaker 1: just wonderful to see what's happened. These loans payoff at um.
Speaker 1: You know, these are the poorest people on the planet
Speaker 1: paying these loans back. It's really it's really wonderful to see.
Speaker 1: And and they're participating in their own solutions, and it's
Speaker 1: just kind of shattering this image that the poorest of
Speaker 1: the pork can't can't uh you know, can't can't change
Speaker 1: their circumstances if they're you know, if if they're given
Speaker 1: you know, a hand up, it's just it's just they're
Speaker 1: given this opportunity and they absolutely take advantage of it.
Speaker 1: And and we went from in two thousand twelve reaching
Speaker 1: our first million people too, we're reaching a million a
Speaker 1: quarter now. And it's a really scalable idea and and
Speaker 1: in fact, our micro finance partners in in the countries
Speaker 1: were work and when we talk to them, the biggest
Speaker 1: bottleneck they identified for their work was access to affordable capital.
Speaker 1: Because the demand is absolutely there. We could be doing
Speaker 1: this so much more if we just had more money.
Speaker 1: And that's how we came to this concept of water Equity,
Speaker 1: just to put the question maybe to both you, is
Speaker 1: the issue that the water is disappearing or that you
Speaker 1: have crumbling infrastructure all over the world and that you
Speaker 1: have governments that are not centralized in the way that
Speaker 1: they think about this resource. Yeah, so there is certainly
Speaker 1: an under investment in the infrastructure as we see in
Speaker 1: Cape Town, you know, South Africa right now. And so
Speaker 1: it really is all about capital and drawing it in.
Speaker 1: And I think, you know, Matt's talking about kind of
Speaker 1: one end of that that capital spectrum, and that is
Speaker 1: like the poor person who needs out micro loan. But
Speaker 1: what we see emerging is capital coming in from the
Speaker 1: social impact investing space. So we launched water Equity as
Speaker 1: a spinoff from water dot org and it's dedicated solely
Speaker 1: to being an investment fund manager raising these funds from
Speaker 1: the capital market so that we can then connect poor
Speaker 1: women with the loans that they need for water and sanitation.
Speaker 1: And so Water Equity now is in the midst of
Speaker 1: raising a fifty million dollar fund on the heels of
Speaker 1: our first successful fund, and we raised thirty seven million
Speaker 1: of that UH that capital to date. So this allows you, know,
Speaker 1: to just put it bluntly, for every million dollars an
Speaker 1: investor comes into this fund with we reach a hundred
Speaker 1: thousand people with water or sanitation, and at the end
Speaker 1: of the fund life, the investors get their principle back
Speaker 1: and they get an annual distribution targeted at three and
Speaker 1: a half percent. So this is like a real investment
Speaker 1: opportunity that is also backed actually by a ten percent
Speaker 1: guarantee that we rolled into the fund as well. So
Speaker 1: the it''s a solid investment that's going to help poor
Speaker 1: people get more access to water and sanitation. So, Matt,
Speaker 1: I want to get your perspective when you talk about it.
Speaker 1: I mean, you had a high profile advertisement about this
Speaker 1: that aired during the Super Bowl, so this isn't just
Speaker 1: targeted to the institutional investors. I'm wondering what response you've
Speaker 1: gotten from the broader world the rest of us, UH
Speaker 1: from your push and kind of what you're trying to
Speaker 1: create because it's not just the investment, clearly, Yeah, I
Speaker 1: mean that it's funny. One of the biggest hurdles we
Speaker 1: have to clear is just trying to explain the problem
Speaker 1: because it's so unrelatable, uh, for for so many of
Speaker 1: us in the West, right, Um, access to to to
Speaker 1: to clean water is not something that we that we
Speaker 1: tend to think about. Um, the water in our toilets
Speaker 1: is cleaner than the water a hundred million people have
Speaker 1: access to. So so one of the partnerships we have
Speaker 1: is with Stella Artois and and um, we've that we're
Speaker 1: in our fourth year of a partnership with them, and
Speaker 1: we've reached through them one and a half million people
Speaker 1: with with clean water. And and they've been they've been
Speaker 1: wonderful partners. And they obviously they did that Super Bowl
Speaker 1: ad which was which you know, their marketing team is
Speaker 1: just so good. They're really helping us message quickly, like
Speaker 1: you know, in a thirty second spot, Okay, here's the problem,
Speaker 1: this is the magnitude of it, and then give their
Speaker 1: consumers and on ramp to kind of do something about it.
Speaker 1: Do you get pushed back just in terms of you know,
Speaker 1: what makes you able to do this as a Hollywood elite?
Speaker 1: You know, they're sort of that pushback from the from
Speaker 1: the recent oscars. You know, what do you what do
Speaker 1: you say to that? I'm I'm I'm just trying to
Speaker 1: do kind of what I was raised to do, which
Speaker 1: is used whatever sphere of influence. I have to do
Speaker 1: something that I think is good and and and in
Speaker 1: this case, it's not me kind of or Gary coming
Speaker 1: in and and and swooping in as any kind of savior.
Speaker 1: It's it's it's actually these in credibly poor people. Of
Speaker 1: our borrowers are women, because this is an issue that
Speaker 1: disproportionately affects women and girls. Um. But they're they're the
Speaker 1: ones paying these loans back. They're the ones doing this
Speaker 1: incredible thing. We're just we're just trying to facilitate it,
Speaker 1: um and and and you know the reality is we've
Speaker 1: hit ten point eight million people at this point. So
Speaker 1: I at that point, I don't care what anybody says.
Speaker 1: It's it's working and we're going to keep doing it.
Speaker 1: Thank you so much for being with us. Matt Damon
Speaker 1: and Gary White, they're co founders of water dot org
Speaker 1: and water Equity On this World Water Day huge issue.
Speaker 1: They say that in order to solve the global water crisis,
Speaker 1: it would take donations of an estimated two hundred billion
Speaker 1: dollars a year. That sounds massive, but it sounds less
Speaker 1: so when you think of the two hundred and fifty
Speaker 1: trillion dollars in private capital that is sitting in global
Speaker 1: financial markets. Thanks for listening to the Bloomberg Surveillance podcast.
Speaker 1: Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or
Speaker 1: whichever podcast platform you prefer. I'm on Twitter at Tom
Speaker 1: Keane before the podcast. You can always catch us worldwide.
Speaker 1: I'm Bloomberg Radio