Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
Speaker 1: my co host Matt Miller. Every business day we bring
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
Speaker 1: with essential market moving news. Find the Bloomberg Markets podcast
Speaker 1: called Apple Podcasts or wherever you listen to podcasts, and
Speaker 1: at Bloomberg dot com Slash podcast in the Bloomberg Interactive
Speaker 1: Broker studio. As we speak, Jenna Drosos. She is all
Speaker 1: tested up for the COVID passing with colors. I would
Speaker 1: say she's the CEO of Signet Jewelers based in Accord, Ohio.
Speaker 1: It's a publicly traded company. S i G is a
Speaker 1: ticker about a four billion dollar market. Cappin. Jenna, thanks
Speaker 1: so much for joining us here. Talk to us about
Speaker 1: the jewelry business in the world of a global pandemic.
Speaker 1: Tell us what the last couple of years have been
Speaker 1: like for your business. The sixth sign it is I
Speaker 1: read that Signal is the world's largest retailer of diamond jewelry.
Speaker 1: Is that true? Yes, that's right. So we operate under
Speaker 1: a number of retail banners that many customers no k sales.
Speaker 1: Jared Banter by piercing Pagoda. We have an online purely
Speaker 1: digital play retailer, James Allen dot com. Just recently in
Speaker 1: the last year purchased Diamonds Direct and Rocks Box, which
Speaker 1: is the number one jewelry rental and subscription business in
Speaker 1: the US. So we are number one in the US
Speaker 1: both in bricks and mortar and e commerce. We're also
Speaker 1: the number one jeweler in Canada with People's Jewelers and
Speaker 1: in the UK with Ernest Jones and H. Samuel. So
Speaker 1: I'm just looking at your fundamentals here on the Bloomberg.
Speaker 1: It's great with any stock you can take GF go
Speaker 1: and see your revenue. Uh and um, EPs, you guys
Speaker 1: aren't doing great business obviously, up fifty percent year over
Speaker 1: year in terms of revenue growth EPs at a near
Speaker 1: record high. UM. Why Why is that? This is really
Speaker 1: the culmination of several years of transformation that the company
Speaker 1: has been under and I'm very proud of our team
Speaker 1: for embracing those strategies and for the passion that they have.
Speaker 1: We we have been working to drive out all costs
Speaker 1: that customers don't see or care about, and we've invested,
Speaker 1: We've invested that in creating a much stronger digital presence.
Speaker 1: What we know about shoppers as they came through COVID
Speaker 1: is that they're much more interested in searching and browsing
Speaker 1: online before they go to a retail store. In fact,
Speaker 1: in our business, now nine of our highest value customers,
Speaker 1: so people who spend more than five dollars with us,
Speaker 1: interact with us both online and in stores. So this
Speaker 1: this is growth. I mean, if you look across different
Speaker 1: segments and I know you have a ton of new
Speaker 1: kind of high tech businesses springing up, is online sales
Speaker 1: your your biggest growth business. It's definitely the biggest new
Speaker 1: interaction point for our customers. Still about eighty percent of
Speaker 1: stores and jewels of sales in jewelry happen in store,
Speaker 1: so people aren't buying as much online, but they're definitely
Speaker 1: getting informed on line. We have features now like virtual
Speaker 1: try on online, virtual jewelry consulting, asynchronous chat where you
Speaker 1: can chat with someone one day and come back to
Speaker 1: the same chat a week later. So we've really invested
Speaker 1: in digital tools to make the shopping experience easy. So
Speaker 1: talk to us about the pandemic that two years did
Speaker 1: you shut down stores and how did you manage that.
Speaker 1: I'm guessing it's a regional situation in different parts of
Speaker 1: the country doing different types of policies. So we we
Speaker 1: took a very proactive stance on that to keep our
Speaker 1: team members safe. UM we closed our stores almost exactly
Speaker 1: two years ago on March twenty three. That was a
Speaker 1: scary thing to do for a retailer that was very
Speaker 1: brick and mortar focused, but we had already been transforming
Speaker 1: our digital operations the Christmas before. UM. Everyone of our
Speaker 1: sales associates had been working with iPads in the store,
Speaker 1: so within forty eight hours we turned those on in
Speaker 1: their living rooms and they were still able to serve
Speaker 1: of our customers. Our digital business really exploded during that
Speaker 1: time period and we were ready to lean into that pivot.
Speaker 1: And and I would say, if anything, it accelerated our transformation.
Speaker 1: That's you know that amazed me talking to different luxury
Speaker 1: retailers about how customers did make the pivot to digital. Like,
Speaker 1: if I'm gonna lay down a big chunk of money
Speaker 1: for something, whether it's a diamond or an automobile or
Speaker 1: a fur coat, I want to see it, touch it,
Speaker 1: feel it. But that wasn't necessarily the case. Do you
Speaker 1: buy a lot of fur coats? I do not. Well,
Speaker 1: you know you have to. You have to think about
Speaker 1: what matters most in each category, and in jewelry, the
Speaker 1: two key things that customers are looking for before they
Speaker 1: make an expensive purchase our consultation or advice and visualization.
Speaker 1: You want to see what it looks like. But think
Speaker 1: about trying to look at a diamond in a store
Speaker 1: using a loop. It's not very easy. I mean, you
Speaker 1: pull it back and forth in front of your eye.
Speaker 1: You can't see the diamond that Well, we came up
Speaker 1: with a technology where we take hundreds of photos of
Speaker 1: a diamond, blow it up forty times in HD You
Speaker 1: can actually see that the you know, a diamond much
Speaker 1: better now digitally than you can't even in the store. Yeah,
Speaker 1: I'm sure that's that's the case. What about the current
Speaker 1: war in Ukraine? How and the sanctions on Russia? How
Speaker 1: difficult is that as a diamond retailer When I'm I've
Speaker 1: read that Russia maybe the world's largest supplier of raw diamonds.
Speaker 1: So thankfully we don't have any operations on the ground
Speaker 1: in Russia or Ukraine, but we did act very quickly
Speaker 1: on this um. Signet has been a leader in responsible
Speaker 1: and ethical sourcing of jewelry now for more than a decade,
Speaker 1: where founders of the Responsible Jewelry Council, members of the
Speaker 1: World Diamond Council, and we actually go above and beyond
Speaker 1: that and have our own Signet Responsible Sourcing protocol. So
Speaker 1: customers for many years have been able to count on
Speaker 1: everything in a Signet store being pristinely sourced. And we're agile.
Speaker 1: We have a group of changing vendors. We've gone to them,
Speaker 1: We've said we don't want any diamonds sourced after this
Speaker 1: conflict that came from Russia in our jewelry. We've stopped
Speaker 1: our own direct interaction and so customers can feel very
Speaker 1: good about buying jewelry at Signet. All right, Jenna, thank
Speaker 1: you so much for coming, and we really appreciate you
Speaker 1: coming into our studios here today. Jennet Drosos, CEO of
Speaker 1: Signet Jewelers again public and traded company s i G.
Speaker 1: They're based in Akron, Ohio, but Jenna joins us here
Speaker 1: in New York and we appreciate that. All Right, Supreme
Speaker 1: Court nomination, got another one coming. That means we're gonna
Speaker 1: have some holly contested I guess some hearings, if you will.
Speaker 1: June Grasso, host of Bloomberg Law and Bloomberg Opinion, joins
Speaker 1: us here in our Bloomberg Interactive Brooker Studio. All right,
Speaker 1: So Katanji Brown Jackson, June, what can you tell us
Speaker 1: about Katanji Brown Jackson? Well, she is currently uh appellate
Speaker 1: court on the d C Circuit Court of Appeals, which
Speaker 1: is sort of known as the second highest court in
Speaker 1: the and it's the feeder court for the Supreme Court.
Speaker 1: And um, she was a district court judge for ten years.
Speaker 1: She just had a hearing last year to get onto
Speaker 1: the d C Circuit Court of a judge. She has
Speaker 1: a background as a public defender, which is something that's
Speaker 1: so unusual on the court. The last person who defended
Speaker 1: criminals who sat on the court was um was it
Speaker 1: was decades ago. So what what? Um? What we're saying
Speaker 1: seeing is that she might be attacked because of her
Speaker 1: defense of you know people, and that's one of the
Speaker 1: attacks that they lodged when she was at her I
Speaker 1: just remember, I just remember the Cavanaugh hearing being so ugly,
Speaker 1: so ugly, and so many images that are seriously, people's
Speaker 1: you know, literally television images. How do you think this
Speaker 1: one's gonna go? Well, if you remember the Amy Coney
Speaker 1: Barrett hearings, which were after the caval hearings were not
Speaker 1: that ugly. Probably you remember that because you remember Kavanaugh
Speaker 1: because it stood out, and we remember Clarence Thomas. There
Speaker 1: are some hearings that really and out, and a lot
Speaker 1: of times you don't remember what what the the nominee said.
Speaker 1: You worry you remember what the attack on the nominee was.
Speaker 1: It's all about the questions in these kinds of hearings.
Speaker 1: It's all about the senators getting their questions in it.
Speaker 1: So you'll find a lot of the Republican senators who
Speaker 1: have presidential ambitions, like Josh Holly Ted Cruz are going
Speaker 1: to be on the attack most likely in these hearings.
Speaker 1: Even though I mean her record is I would say,
Speaker 1: I mean it's it's difficult to assail her on certain points.
Speaker 1: For example, the hot button issues like abortion, religious rights.
Speaker 1: She hasn't written about that. She's been on the court
Speaker 1: for only a few months, so she hasn't written about that,
Speaker 1: and her as a district court judge, you don't write
Speaker 1: about those things. So they're not gonna be able to
Speaker 1: get her on that. So they found other things too,
Speaker 1: assail her on whoa like what? Like what? That's a
Speaker 1: good question. That's a good question. Let me with that
Speaker 1: without we don't want to get political about it, obviously,
Speaker 1: Um but if you when you were at Harvard Law
Speaker 1: or wherever you studied, I'm sure you had to take
Speaker 1: the other side occasionally, right, So put yourself in the
Speaker 1: shoes of a white male Republican. I wonder which one
Speaker 1: of the few that around the Judiciary Committee, all of
Speaker 1: them except for one, there's one. There's one female Republican.
Speaker 1: I will tell you, because we know what they're going
Speaker 1: to attack on. Basically, they're going, what would you do
Speaker 1: if you were advising the Republican Party? How do you
Speaker 1: get rid of kenjy kb J? Can't do it. They
Speaker 1: can't get rid of her unless the Democrats, who have
Speaker 1: held together, by the way, all fifty Democrats on all
Speaker 1: of Biden's nominees. Unless one of them suddenly says Joe
Speaker 1: Manchin kristin cinema, Oh, I'm not going to support her.
Speaker 1: They really can't get her. And the thing is that
Speaker 1: so the attacks are going to be. Mitch McConnell has
Speaker 1: already signaled this. She's soft on crime. She was a
Speaker 1: public a federal public defender, so she's soft on crime.
Speaker 1: And also Josh Holly came out with something a week
Speaker 1: ago that has not been raised in the three times
Speaker 1: she's been before the Judiciary Committee and including the one
Speaker 1: time that she was there when he was questioning her,
Speaker 1: and that's that she's soft on child pornographers. That her sentencing. Now,
Speaker 1: this is a good area for Republicans because who doesn't
Speaker 1: hate child pornographers? You know, it's just certainly the Republicans
Speaker 1: do right, and the Democrats do y'all do right. It's
Speaker 1: and also it doesn't involve and it's about sentencing, and
Speaker 1: it doesn't involve the sensitive area of racist, racist sentencing,
Speaker 1: you know where that's been alleged. So she in point
Speaker 1: of fact, she's um, I think about nine defendants and
Speaker 1: she has sentenced to to below two to the minimum
Speaker 1: and I think seven to the a little below the minimum.
Speaker 1: Why wouldn't you just throw away the key because it's
Speaker 1: it's child pornography. For child pornography, this is your your
Speaker 1: what you have stuff on your computer? Right? You could
Speaker 1: go to prison for decade. The laws are really out
Speaker 1: of date, and in those cases, some of them, the
Speaker 1: federal prosecutors recommended below the minimum. The sentencing laws are
Speaker 1: out of date. And this all the judges, about six
Speaker 1: judges sentenced below the maximum on those kinds of crimes
Speaker 1: because it's you know, you have to compare them to
Speaker 1: you know, murder, two different arson. What's the timing on
Speaker 1: this whole process. They expect that before the Senate goes
Speaker 1: away on its Easter break that the process will be done,
Speaker 1: and maybe they'll be a vote before then. They're hoping
Speaker 1: that they will be a vote before them. And from
Speaker 1: your perspective, what do you think the odds are of
Speaker 1: her getting confirmed here? I think the odds are. I'm
Speaker 1: gonna say, just to leave, just to leave a so
Speaker 1: Matt will tell me later on. But that doesn't do
Speaker 1: anything really for the direction now. And that's why that's
Speaker 1: why this is not going to be you know, one
Speaker 1: of those like Kavanaugh that meant something, Amy Coney, Barrett,
Speaker 1: that meant something. But this is just replacing one liberal
Speaker 1: with another liberal in a court that has a sixth
Speaker 1: person conservative majority. All right, all right, Juan, thank you
Speaker 1: so much for joining us here in our studio June Grasso,
Speaker 1: host of Bloomberg Law and Bloomberg Opinion, giving us the
Speaker 1: latest on the Supreme Court process. Hopefully, Uh, get the
Speaker 1: Katanji Brown Jackson. I guess if you're a member of Congress,
Speaker 1: I'd like to get this done by easter. Well, we've
Speaker 1: been spending a lot of time recently talking about the
Speaker 1: rates market, the yield curve. We're at or near inversion
Speaker 1: in various portions of the yield curve. What does that mean?
Speaker 1: Let's bring in r J. Gallow, Senior portfolio manager for
Speaker 1: Federated Hermes. R J. When you see certain parts of
Speaker 1: the U S yield curve at or near inversion, does
Speaker 1: that meaningfully raised the recession risk in your mind? Good morning?
Speaker 1: I think it reflects the fact that we have a
Speaker 1: shock going on, sort of a series of them, the
Speaker 1: most notable being the Russian invasion of Ukraine in the
Speaker 1: area economic impacts in terms of the West response to
Speaker 1: that invasion. Uh. That's a clear aggregate supply shock, broad based, exogenous,
Speaker 1: if you will, coming from the geopolitical realm. UM, and
Speaker 1: that historically increases the risk of recession. UM. Add to
Speaker 1: that that the Feds in tightening mode. UH, and historically
Speaker 1: that also suggests increased risk of recession. Oftentimes, when the
Speaker 1: FED has to pivot aggressively to fight inflation, the result
Speaker 1: is a recession eventually ensues. So we're facing both of
Speaker 1: those factors, the geopolitical shock and in the sense one
Speaker 1: pivot from transitory too inflation is a problem. It makes
Speaker 1: sense that the Yolk curb is flattening given both of
Speaker 1: those you put those two together, it's clear that the
Speaker 1: recession risk is rising in the market's mind. However, I
Speaker 1: don't think the Yolk curb inverting is causal. I don't
Speaker 1: think that ever causes recessions. I understand that people you know,
Speaker 1: borrow short, land long, and can slow down uh the
Speaker 1: financial mechanism that you see in financial intermediation. But I
Speaker 1: think that the flattening of the curve is more people's
Speaker 1: expectations that recession risk has risen. It's not a causal
Speaker 1: relationship in my mind. I mean, some people have been
Speaker 1: saying lately the yield curve may have caused COVID nineteen.
Speaker 1: We saw it invert right before the pandemic. That was
Speaker 1: a joke to those who didn't get it. I'm looking
Speaker 1: at Paul's face, thinking he didn't get that correlation. He
Speaker 1: didn't get that. No, I mean obviously that that was
Speaker 1: our most recent recession, right, And UH, if you believe
Speaker 1: in the predictive qualities of an inverted yield curve, you've
Speaker 1: got to give it a lot of credit for that. Um.
Speaker 1: No one could could have seen that coming. Nonetheless, we
Speaker 1: have very high inflation and there is concerns of a
Speaker 1: growth slow down. UM. Even if we don't go into
Speaker 1: a recession, it looks like we could almost grind to
Speaker 1: a halt here. Are you worried about stagflation? UM? I
Speaker 1: think about six to twelve months ago, the words stagflation
Speaker 1: sort of made my skin crawls. You know, it seems
Speaker 1: inappropriate for the context that the time. I now think
Speaker 1: it's a word we should be using. Uh. It's very
Speaker 1: clear that the exogenous shock arising from the conflict, UH
Speaker 1: is the kind of thing that results in broad based inflation,
Speaker 1: which was already bad before the Russian troops invaded Ukraine.
Speaker 1: It's also the kind of thing that produces demand destruction
Speaker 1: ultimately slows down economic activities. So I do think stagpulation
Speaker 1: is an appropriate word probably more so for Europe. Maybe
Speaker 1: I'm being extreme, but I think when you actually have
Speaker 1: recession outcomes and inflation together, uh, stagflation is the right
Speaker 1: word to use now here in the United States. I
Speaker 1: think it's a stagflationary shock. Uh. We may be able
Speaker 1: to skirt a recession. The risks clearly risen, as evidenced
Speaker 1: by the yokurve um, but it's not baked in the cake.
Speaker 1: I mean, we have a lot of strong economic momentum
Speaker 1: here in both the labor market, balance sheets are strong,
Speaker 1: both for households and businesses. Uh, there's a good chance
Speaker 1: that the United States can sort of power through this um.
Speaker 1: That said, global markets are global in nature, and the
Speaker 1: response that you're seeing in terms of the Yoeld curve
Speaker 1: I think reflects the rising risks that are there. R J.
Speaker 1: We got the oil on the move higher again today
Speaker 1: w T I coot up over five about dollars a barrel,
Speaker 1: just kind of, you know, reiterating in people's minds the
Speaker 1: inflationary pressures that are out there in this economy. How
Speaker 1: do you think about inflation, whether it's you know, the
Speaker 1: duration of this inflationary cycle we're in or the severity
Speaker 1: I'm struck by the fact that the markets still have
Speaker 1: pretty high confidence. If you look at the the slope
Speaker 1: or the yield curve of of the U S TIPS
Speaker 1: break evens, UH, it's very downward sloping. It has been
Speaker 1: inverted for some time, meaning that near term expectations for
Speaker 1: inflation are much higher than long term expectations. So, for example,
Speaker 1: UM I LB on your Bloomberg, the break even of
Speaker 1: two and three years is are each well north of
Speaker 1: four percent. Four seventy eight for two year break evens,
Speaker 1: you know, astronomically high by by recent standards in recent decades.
Speaker 1: When you go out to the ten year, it's down
Speaker 1: to two high in the history of tips, but that's
Speaker 1: still a sharp disinflation between the shorter break even and
Speaker 1: the longer break even. You go all the way out
Speaker 1: to the third year, it's a two. So I think
Speaker 1: that the Fed has given the market what it needs
Speaker 1: in the sense that the market needs to believe that
Speaker 1: the Federal Reserve believes inflation fighting is still a huge
Speaker 1: part of their mandate, and in fact they are now
Speaker 1: focusing primarily on that side of their dual mandate. If
Speaker 1: the Fed we're not to have done that, I think
Speaker 1: we'd be facing a much more difficult bond market right
Speaker 1: now than we already have UM in the sense that
Speaker 1: nominal yields will be rising more rapidly, that these inflation
Speaker 1: break even is probably wouldn't be nearly as inverted, and
Speaker 1: losses would be more stark than they already are. And
Speaker 1: it's been a pretty rough year for bonds. When you
Speaker 1: think about the UH. The the Treasury Aggregate Index, for example,
Speaker 1: is on a year today basis, the Bloomberg Agreed Index,
Speaker 1: I should say, UH is now down five two percent,
Speaker 1: and the Treasury Index itself, that component is down four
Speaker 1: six So the inflation process, I think people believe if
Speaker 1: that's doing what it needs to do, and inflation should
Speaker 1: diminish as we move forward. If it doesn't happen, If
Speaker 1: that doesn't happen, the bond market sell off will will
Speaker 1: actually become more difficult, it will become more protractive. All right,
Speaker 1: r J, thanks so much for joining us. Once again.
Speaker 1: I always appreciate getting your perspective there are Gallo, senior
Speaker 1: portfolio manager for Federated Hermes UH. Looking about stagflation is
Speaker 1: something that is a term that's coming into our j's
Speaker 1: vocabulary recently, and he's a wolverine, and he's a Michigan wolverine.
Speaker 1: Actually was looking. I think he might have gone to
Speaker 1: the University of Michigan for a four year period in
Speaker 1: which Michigan won every single game. Is that right against
Speaker 1: the Ohio State University. This is the Big Take, the
Speaker 1: best of Boomberg's in depth original reporting from around the globe.
Speaker 1: This is a really fast moving story that caused a
Speaker 1: lot of outrage among investors. This is so fascinating. Market
Speaker 1: shutdown in a way it's never done before. That's gonna
Speaker 1: have consequences for years to come. The Big Take on
Speaker 1: Bloomberg Radio. All Right, Matt, I've told you before I
Speaker 1: take New Jersey Transit. Are we doing a sounder? I
Speaker 1: just talk right over there. Oh well, no worries, Okay,
Speaker 1: I gotta get this story. Did the sounder dud? We? Okay?
Speaker 1: All right? But you know, so I take New Jersey
Speaker 1: Transit in every day during the week man, and I
Speaker 1: would say the trains now are maybe fifty full, but
Speaker 1: on the weekends, just backed everybody's coming in and see
Speaker 1: games and go to bars and restaurants and stuff. But
Speaker 1: people ain't coming back to work in size, and that's
Speaker 1: a problem for New York City. I think Alicia Diaz,
Speaker 1: she's a writer for Bloomberg's Hop Live team, She's got
Speaker 1: the big take story of the day again, Alicia, thanks
Speaker 1: so much for joining us on our Bloomberg and Arctic
Speaker 1: Broker studio. What you find came to work today? She
Speaker 1: came to work today absolutely, which is probably more than
Speaker 1: you can say for a lot of her supervisors. Um,
Speaker 1: So we kind of looked at this as two groups.
Speaker 1: There's there's the tourist group. You know, we we're not
Speaker 1: having as many international visitors. And then also we're not
Speaker 1: having those, like you mentioned, the people who are commuting
Speaker 1: into the office. And so it seems like as a result,
Speaker 1: a lot of those restaurants, the coffee shops, the places
Speaker 1: around Midtown and fied I are kind of just struggling
Speaker 1: to keep their doors open. And that what the kids
Speaker 1: call the financial district. That's right, my daughter trying to
Speaker 1: explain that to me as like kids, I've been working
Speaker 1: down on Wall Street for thirty five years, just just
Speaker 1: tuned into that as well. The kids who sit around
Speaker 1: all right, so what has to happen here is it
Speaker 1: are the tourist coming back, because I was in Midtown
Speaker 1: a couple of weeks ago and I thought I felt
Speaker 1: a much more European international tourist. Play are we seeing
Speaker 1: any of that. It seems like it's slowly coming back,
Speaker 1: especially with um you know, Oh Macron being subdued, but
Speaker 1: it looks like more international tourist at least the level
Speaker 1: it was before the pandemics still aren't returning, and that
Speaker 1: could be to travel restrictions. Are still nervous about getting
Speaker 1: COVID or spreading covid um, and international tourists had to
Speaker 1: spend the most money, and so that's why a lot
Speaker 1: of the sectors relying on the most. So the problem,
Speaker 1: I mean, I can imagine here where we're sitting in Midtown,
Speaker 1: the problem must be that no one's coming back to
Speaker 1: the office because all of the big box stores, for example,
Speaker 1: that are downstairs in this building or across the street
Speaker 1: are empty still. I mean they haven't been um filled
Speaker 1: back up again. I don't understand what the problem is
Speaker 1: in the Bronx because here in New York seven seven
Speaker 1: point six percent unemployments, some of the worst of any
Speaker 1: major sitting in the country, But the Bronx is eleven
Speaker 1: percent And it's not exactly a Wall Street hub up there, right,
Speaker 1: So what's the problem. That's a great question. And it
Speaker 1: seems like, um, this is also um, disproportionately impacting um
Speaker 1: a lot of black workers as well. UM. And that
Speaker 1: could be because um, you know, they're more so in
Speaker 1: the service industry and they're more doing face to face
Speaker 1: jobs like being in healthcare or that kind of thing,
Speaker 1: and so um, that rate is almost double for for
Speaker 1: other workers. And so UM, there could be some ties
Speaker 1: to that. I get so workers and the Bronx basically
Speaker 1: would well, they'd live in the Bronx, they'd come down
Speaker 1: and work and fini die. But since no one's going
Speaker 1: to Wall Street, they can't get those jobs back, which
Speaker 1: is why their unemployment is higher. That's a very real possibility.
Speaker 1: So what are we hearing about how we're going to
Speaker 1: repurpose some of these commercial real estate buildings in like
Speaker 1: Midtown Manhattan for example. Ive hear some people saying, well,
Speaker 1: maybe'll convert them into apartments. That might address maybe some
Speaker 1: of the crazy craziness that we have here in the
Speaker 1: in the residential rental market. What are you hearing? Yeah,
Speaker 1: so we're hearing a mix of things. Definitely that residential
Speaker 1: aspect where this could be more affordable housing. Some are
Speaker 1: saying it's going to be more likely um, like luxury
Speaker 1: apartment buildings and so, um, does that really address the
Speaker 1: problem is another question. Um. I've also heard that this
Speaker 1: kind of opens the door in terms of just recreating
Speaker 1: town and maybe adding more cultural hobs or or more
Speaker 1: biotech incubators and that type of thing, and really rethinking this, um,
Speaker 1: like corporate centers doing that howny thing is gonna do that?
Speaker 1: Is it the city administered the Mayor's office, is it
Speaker 1: the I guess that may have been Office of Economic
Speaker 1: Deployment or something in the city. Is it the city
Speaker 1: that's really gonna do that or is it gonna be
Speaker 1: maybe a public private partnership. Um. They've been talks at
Speaker 1: least with the mayor's new plan of doing a public
Speaker 1: private partnership and so I think that's a very real
Speaker 1: possibility as well. Um. And they've just talked about like
Speaker 1: inklings and ideas, but it doesn't seem like anything is
Speaker 1: super concrete. Just yeah, UM, so interested to see what
Speaker 1: kind of comes out of those plans and ideas. Is
Speaker 1: there a connection with the crime level It seems kind
Speaker 1: of silly to worry about crime if you're a kid
Speaker 1: who grew up in their seventies, right, because there was
Speaker 1: real crime back then relative to this. But this is
Speaker 1: much worse than the kind of Giuliani Bloomberg Eras you know,
Speaker 1: we see also a huge amount of homelessness, drug use, um, theft.
Speaker 1: Is that is that a problem that's causing some of
Speaker 1: this unemployment or is the unemployment problem that's causing that.
Speaker 1: That's a great question, and I I think that there
Speaker 1: is some aspect that we looked at in terms of
Speaker 1: people leaving Manhattan. Um, it doesn't seem to be a
Speaker 1: mass accidus by any means, but it seems like that
Speaker 1: could be people starting to trickle out of the city,
Speaker 1: whether it's due to high rent or or crime. And
Speaker 1: um that being such a center of the economic hub
Speaker 1: for the entire city, UM could have a big impact.
Speaker 1: All Right, Alicia, thank you so much for joining us here.
Speaker 1: Alicia didya. She's a reporter for a Bloomberg's Top Live team,
Speaker 1: joining us here on a Bloomberg Interactive a broker studio.
Speaker 1: Thanks for listening to the Bloomberg Markets podcast. You can
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