WEBVTT - Eco Data, Ukraine, Travel, and Tech (Podcast) 0:00:00.840 --> 0:00:04.000 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:05.240 my co host Matt Miller. 0:00:05.640 --> 0:00:09.600 Every business day, we bring you interviews from CEOs, market pros, 0:00:09.720 --> 0:00:14.360 and Bloomberg experts, along with essential market moving news. Find 0:00:14.400 --> 0:00:17.439 the Bloomberg Markets podcast called Apple Podcasts or wherever you 0:00:17.520 --> 0:00:20.480 listen to podcasts, and at Bloomberg dot com slash podcast. 0:00:21.160 --> 0:00:23.400 Up next, I want to get straight to our next guest, 0:00:23.600 --> 0:00:27.280 Dana Peterson, chief economist at the Conference Board, who's going 0:00:27.320 --> 0:00:29.560 to join us on zoom and Dana, I have to 0:00:29.560 --> 0:00:31.600 get your thoughts because we are just coming off of 0:00:31.640 --> 0:00:33.760 the data that we get got last week when it 0:00:33.760 --> 0:00:37.200 came to consumer confidence and rising to the highest level 0:00:37.240 --> 0:00:40.600 since early twenty twenty two. How do you square that 0:00:40.680 --> 0:00:43.680 away when a lot of the data say GDP was 0:00:43.760 --> 0:00:46.519 revised higher for the second quarter coming and stronger than expected. 0:00:46.560 --> 0:00:48.320 But then it seems like a lot of people, even 0:00:48.440 --> 0:00:51.600 if you exclude some of the sentiment gauges, still feel 0:00:51.640 --> 0:00:54.600 a bit gloomy, especially when it comes to what is 0:00:54.640 --> 0:00:56.200 ahead for the economy. 0:00:57.720 --> 0:01:01.040 Sure, looking at the consumer confidence measure that the Conference 0:01:01.080 --> 0:01:05.119 Board produces, Yes, it did rise to the highest level 0:01:05.120 --> 0:01:06.960 we've seen in some time. But if you look at 0:01:07.000 --> 0:01:11.640 the series on a graph, it's been moving pretty much 0:01:11.640 --> 0:01:14.080 in the same range, and it's a range that's below 0:01:14.120 --> 0:01:16.680 the peak that we saw last year and also well 0:01:16.720 --> 0:01:21.720 below the pre pandemic twenty nineteen levels. When you look 0:01:21.720 --> 0:01:24.679 at the details, consumers are saying, well, things are okay 0:01:24.760 --> 0:01:29.680 right now, I'm working, I have income, business conditions seem 0:01:29.720 --> 0:01:33.200 to be okay. Looking to the future, they still expect 0:01:33.200 --> 0:01:35.720 that maybe there's something negative around the quarter, maybe there's 0:01:35.760 --> 0:01:37.240 a recession or a soft spot. 0:01:38.680 --> 0:01:42.240 So talk to us then about this US manufacturing activity. 0:01:42.319 --> 0:01:45.760 We just got this ISM data this morning. That's the 0:01:45.800 --> 0:01:50.240 Institute for Supply Management's Manufacturing Gauge, an eighth month of 0:01:50.360 --> 0:01:55.280 contraction here data. How happy is j Powell after seeing 0:01:55.360 --> 0:01:58.080 those numbers or do you not necessarily look at that 0:01:58.280 --> 0:02:01.640 as a huge indicator of the macro picture here? 0:02:02.720 --> 0:02:07.080 Well, factory activity is one important measure and certainly something 0:02:07.080 --> 0:02:09.480 that we look at and include in our leading index. 0:02:10.280 --> 0:02:13.080 And the reason why factory activity so weak is because 0:02:13.120 --> 0:02:16.880 consumers are no longer buying goods and mass. That was 0:02:16.919 --> 0:02:19.880 certainly the conditions during the pandemic where they couldn't go 0:02:19.880 --> 0:02:22.680 out and enjoy services now they can enjoy services. So 0:02:22.720 --> 0:02:27.800 that's why we're seeing services purchasing Managers index indicators rising 0:02:28.200 --> 0:02:30.600 and a lot of spending on services, which we saw 0:02:30.639 --> 0:02:33.720 in last week's PCE report. I know you. 0:02:33.800 --> 0:02:37.560 Also have the Conference Board's Leading Index, which has been 0:02:37.600 --> 0:02:40.960 negative for fourteen consecutive months, and something rare to see 0:02:41.200 --> 0:02:45.240 over the past half century. Typically when you've seen instances 0:02:45.320 --> 0:02:48.280 like that, it's only happened in nineteen seventy four, nineteen eighty, 0:02:48.320 --> 0:02:49.960 in two thousand and eight where you've seen that sort 0:02:50.000 --> 0:02:53.760 of extreme time threshold there, But then the US economy 0:02:53.800 --> 0:02:56.120 was actually already in a recession. What do you think 0:02:56.160 --> 0:02:57.920 this is telling us about the economy? 0:02:59.160 --> 0:02:59.400 Sure? 0:02:59.440 --> 0:03:02.080 What the leading is next tells us is that there's 0:03:02.120 --> 0:03:06.800 probably a recession starting right about now, which is the 0:03:06.840 --> 0:03:10.320 third quarter of the year. And certainly because it's been 0:03:10.360 --> 0:03:13.600 negative for so long, it does suggest that we will 0:03:13.639 --> 0:03:16.960 see a soft spot where we are actually forecasting a recession, 0:03:17.480 --> 0:03:20.520 but a short and shallow one. So the thing is 0:03:20.560 --> 0:03:24.800 that when you look at current conditions, there's still signaling 0:03:24.840 --> 0:03:27.640 that there's no recession. And that's why, and that's because 0:03:27.880 --> 0:03:30.040 four out of the well two out of the four 0:03:30.080 --> 0:03:33.120 indicators are linked to the labor market and incomes, and 0:03:33.120 --> 0:03:35.360 we know the labor market's still doing well with incomes 0:03:35.840 --> 0:03:40.440 arising on a real basis, so that's helping to support consumers. 0:03:40.880 --> 0:03:45.640 But businesses certainly are feeling the pinch, certainly manufacturers because 0:03:45.640 --> 0:03:48.720 there's less demand. And also many businesses are also looking 0:03:48.800 --> 0:03:52.360 ahead of concern that there's something negative around the corner 0:03:52.400 --> 0:03:54.920 and starting and they are definitely pulling back at least 0:03:54.920 --> 0:03:58.000 on investments, if not on labor data. 0:03:58.080 --> 0:04:02.360 I'm really curious about how how you rate the importance 0:04:02.560 --> 0:04:06.640 of cumulative savings when it comes to the inflationary picture. 0:04:06.720 --> 0:04:09.560 Here our Bloomberg economists crunch the numbers on this. They 0:04:09.560 --> 0:04:11.800 show that the lowest forty percent of households in the 0:04:11.880 --> 0:04:16.240 US have negative real excess cash balances. So just some 0:04:16.279 --> 0:04:20.360 evidence there that the concerns about tons of stimulus really 0:04:20.400 --> 0:04:23.720 beefing up these consumer balance sheets may not necessarily have 0:04:23.760 --> 0:04:27.080 the sticking power that we have been talking about it having. 0:04:27.560 --> 0:04:30.920 What is your take on the importance of cumulative savings 0:04:30.960 --> 0:04:32.600 and where those stand right now? 0:04:33.560 --> 0:04:36.080 Well, during the pandemic, yes, you had those big injections 0:04:36.080 --> 0:04:39.240 of stimulus for the lowest income families, they probably spend 0:04:39.320 --> 0:04:42.200 it all, and that's why they have negative savings right now, 0:04:42.560 --> 0:04:46.200 and they're using credit cards to get by, So that's 0:04:46.200 --> 0:04:48.839 what you're seeing there, and that kind of makes sense. 0:04:49.000 --> 0:04:51.839 The thing is that it's really tough for the FED 0:04:51.960 --> 0:04:58.000 to get at spending on services and people not spending 0:04:58.000 --> 0:05:00.760 out of the sexcess savings because it's not something that 0:05:00.800 --> 0:05:03.320 you finance, right, so even if you put something on 0:05:03.360 --> 0:05:06.559 a credit card, your credit card rate doesn't shift around 0:05:06.560 --> 0:05:10.160 with the FED funds rate. So we think an aggregate 0:05:10.279 --> 0:05:12.760 the excess savings that people have, it's pretty much going 0:05:12.839 --> 0:05:15.800 to run out by the fall. And again that's aggregate, 0:05:15.839 --> 0:05:19.560 so that's including people who are across the income distribution, 0:05:19.800 --> 0:05:22.719 so I think, you know, it's really still supporting savings 0:05:22.720 --> 0:05:24.560 as people who are probably in the middle of the 0:05:24.560 --> 0:05:28.800 income distribution who did also receive stimulus checks, but all 0:05:29.120 --> 0:05:33.039 also working and seeing their incomes rise. So really the 0:05:33.080 --> 0:05:35.760 FED needs to see weakening in the labor market of 0:05:35.960 --> 0:05:39.640 companies taking down those job ads so that consumers feel Okay, well, 0:05:39.920 --> 0:05:42.320 I don't have as many options, so maybe I'll just 0:05:42.320 --> 0:05:45.000 sit tight, or maybe I'll pull back on my spending 0:05:45.040 --> 0:05:46.480 and that'll help bring that inflation. 0:05:46.760 --> 0:05:48.880 How does oil play into this, because right now, if 0:05:48.920 --> 0:05:52.240 we're looking at US cred prices treating around seventy dollars 0:05:52.279 --> 0:05:55.159 a barrel, and overnight we did get that news obviously 0:05:55.200 --> 0:05:57.960 with the Saudi's as well as Rush extending those oil 0:05:58.040 --> 0:06:01.680 supply cuts. How much of a fuel do we would 0:06:01.720 --> 0:06:03.960 need to see, no pun intended when it comes to 0:06:04.000 --> 0:06:07.640 oil prices moving higher to then maybe exacerbate what we've 0:06:07.680 --> 0:06:10.200 seen when it comes to the inflation dynamics like we 0:06:10.240 --> 0:06:13.480 saw sale last summer, which obviously oil prices were treating 0:06:13.560 --> 0:06:15.400 much higher when it comes to that, and what it 0:06:15.400 --> 0:06:17.200 can mean for Americans in their pocketbooks. 0:06:18.400 --> 0:06:20.840 Sure right now and certainly in the in Friday's a 0:06:20.839 --> 0:06:24.920 PC inflation report, we saw that actually gasoline prices are 0:06:25.000 --> 0:06:28.080 falling year on year, and when you go to the pump, 0:06:28.200 --> 0:06:31.640 they're pretty low right now, prices for gasoline, and in fact, 0:06:31.720 --> 0:06:33.800 many people are expecting lots of folks are going to 0:06:33.839 --> 0:06:37.440 get out in their cars this holiday week. So any 0:06:37.480 --> 0:06:40.960 increase or rather any decreases in supply, certainly we'll put 0:06:41.000 --> 0:06:43.919 up a pressure on prices, but that usually takes a 0:06:43.920 --> 0:06:46.640 few months, and certainly that would not be a positive 0:06:47.040 --> 0:06:50.320 in terms of the FED helped working to bring down inflation, 0:06:50.440 --> 0:06:55.520 because certainly the FED cannot control opek so's it's certainly 0:06:55.520 --> 0:06:58.680 a negative if we do see material increases in prices. 0:06:58.720 --> 0:07:01.680 But for the most part right now, gasoline prices definitely 0:07:01.760 --> 0:07:04.320 are cooling and providing some relief to consumers. 0:07:04.880 --> 0:07:07.360 All Right, Dana, In our final couple minutes with you, 0:07:07.600 --> 0:07:10.560 I want to do what every economist I'm sure just 0:07:10.640 --> 0:07:12.960 loves doing. Look into your crystal ball for me here 0:07:13.520 --> 0:07:15.120 for the rest of this week. What do you think 0:07:15.200 --> 0:07:17.360 is going to be the most important data point that 0:07:17.400 --> 0:07:19.880 we're going to get in terms of sussing out what 0:07:19.920 --> 0:07:21.600 the Fed's next moves are going to be. Is it 0:07:21.640 --> 0:07:24.040 going to be some of this labor market data something else? 0:07:25.680 --> 0:07:28.200 Absolutely, it's going to be the labor market data. We'll 0:07:28.240 --> 0:07:32.440 get ADP and we'll also have the BLS payrolls report. 0:07:33.640 --> 0:07:36.840 We've seen that the labor market continues to be robust. 0:07:37.280 --> 0:07:42.400 I think that there are three forces going on here 0:07:42.440 --> 0:07:45.520 with respect to the labor market. You do have some 0:07:45.600 --> 0:07:48.520 companies that are letting folks go, but most companies are 0:07:48.520 --> 0:07:51.720 either hiring or just sitting tight and hoarding labor. And 0:07:51.760 --> 0:07:54.360 it's the case that those companies that are hiring, plus 0:07:54.400 --> 0:07:58.080 the hoarders are outweighing the companies that are letting people go. 0:07:58.240 --> 0:08:01.760 So we're probably going to continue to see positive readings 0:08:01.760 --> 0:08:04.800 on payrolls and a low unemployment rate. But the key 0:08:04.840 --> 0:08:06.720 thing will be next week when we get the JULT 0:08:06.840 --> 0:08:09.720 data to see if we're if vacancies are dialing down, 0:08:10.160 --> 0:08:14.440 which indicates that businesses are definitely feeling concerned about the 0:08:14.480 --> 0:08:19.120 future and that workers should actually watch out and reduce 0:08:19.160 --> 0:08:19.760 their spending. 0:08:20.080 --> 0:08:22.400 Dana, we only have about thirty seconds left when it 0:08:22.440 --> 0:08:24.600 comes to the labor market. What jobs do you think 0:08:24.600 --> 0:08:25.920 are most vulnerable right now? 0:08:27.280 --> 0:08:30.600 Well, certainly those jobs associated with the pandemic, Darling. So 0:08:30.640 --> 0:08:36.520 that's finance, technology, real estate construction on residential, and also 0:08:36.679 --> 0:08:40.679 transportation and warehousing simply because there's just less demands for goods. 0:08:41.640 --> 0:08:43.920 Dana, thank you so much for joining us. It's always 0:08:43.960 --> 0:08:46.760 a pleasure to get your perspective on the economy and 0:08:46.800 --> 0:08:49.640 obviously what the conference board is gauging when it comes 0:08:49.640 --> 0:08:53.840 to your economic indicators. That st Peterson cheap Economists at 0:08:53.960 --> 0:08:55.200 the conference boarding. 0:08:56.679 --> 0:09:00.520 You're listening to the dam Can't Live program Bloomberg Markets 0:09:00.559 --> 0:09:03.640 weekdays at ten am Eastern on Bloomberg dot Com, the 0:09:03.760 --> 0:09:06.880 iHeartRadio app, and the Bloomberg Business app, or listen on 0:09:06.960 --> 0:09:08.920 demand wherever you get your podcast. 0:09:10.800 --> 0:09:13.360 Madison Mills here with jess Metton on this Monday, the 0:09:13.400 --> 0:09:16.160 official start of the second half of the year. Not 0:09:16.240 --> 0:09:18.720 a ton today unless you're an ev maker, of course, 0:09:18.800 --> 0:09:21.760 driving up markets. But one thing continuing to be a 0:09:21.800 --> 0:09:25.600 concern is commercial real estate. We've got a great voice 0:09:25.920 --> 0:09:28.679 on the space here. We've got Todd Henderson, he's co 0:09:28.760 --> 0:09:32.000 head of Global real Estate for DWS, joining to discuss 0:09:32.040 --> 0:09:35.600 why he thinks there's less pressure on commercial real estate 0:09:35.720 --> 0:09:39.120 than the consensus view. Todd, thank you so much for 0:09:39.240 --> 0:09:42.319 being on with us on this basically holiday Monday. Really 0:09:42.360 --> 0:09:45.360 appreciate you coming on. You got a lot of optimism here, 0:09:45.480 --> 0:09:48.320 not a ton of doom and gloom views from you. 0:09:48.520 --> 0:09:51.240 What are you seeing in the commercial real estate space 0:09:51.400 --> 0:09:52.199 that we're missing? 0:09:52.840 --> 0:09:54.880 Yeah, sure, I think it's more of a balanced take. 0:09:55.000 --> 0:09:59.240 Thanks for having me. There has been a bit of 0:09:59.280 --> 0:10:03.480 a doom lou that has been I think pervasive here 0:10:04.040 --> 0:10:06.560 over the last couple of months, and I think it 0:10:06.720 --> 0:10:12.760 followed somewhat the banking trimmer that we have and what's happened, 0:10:12.800 --> 0:10:16.559 I think is the definition of commercial real estate has 0:10:16.679 --> 0:10:21.600 been narrowed to office, or said differently, the office woes 0:10:22.200 --> 0:10:26.120 are painting the rest of the commercial real estate market 0:10:26.160 --> 0:10:29.120 with a very broad brush. There is no doubt that 0:10:29.160 --> 0:10:33.080 there are challenges within the office space, but the rest 0:10:33.280 --> 0:10:37.760 of the commercial real estate market, which includes industrial buildings, 0:10:37.800 --> 0:10:42.520 which includes retail, which includes residential, the fundamentals are very strong. 0:10:42.840 --> 0:10:47.400 In fact, if you look at overall vacancy rates inclusive 0:10:47.480 --> 0:10:50.880 of office, we're at the lowest levels that we've ever seen. 0:10:51.800 --> 0:10:57.480 In addition to that, we're seeing deteriorating construction levels, which 0:10:57.679 --> 0:11:02.640 the forward supply is always something we watch to determine 0:11:03.400 --> 0:11:07.000 how we expect markets to perform in the face of 0:11:07.040 --> 0:11:12.480 normalized demand. So, with strong fundamentals and lowering going for 0:11:12.760 --> 0:11:18.160 demand or sorry supply, we think that there is a 0:11:18.240 --> 0:11:22.720 reasonable picture for real estate to perform, much better than 0:11:23.520 --> 0:11:27.120 much of the doom loop that we have been experiencing 0:11:27.520 --> 0:11:28.600 in the press recently. 0:11:28.960 --> 0:11:32.040 When it comes specifically for commercial real estate, where are 0:11:32.040 --> 0:11:36.040 the vacancy rates the highest within when you're looking at 0:11:36.080 --> 0:11:38.559 regions within the United States. 0:11:39.080 --> 0:11:42.400 Well, first of all, they're higher in the office sector, 0:11:43.000 --> 0:11:46.880 and the office sector today, they're as high as they've 0:11:46.880 --> 0:11:51.880 ever been dating back to the RTC crisis that we 0:11:51.960 --> 0:11:56.000 saw in the late eighties and early nineties. When you 0:11:56.080 --> 0:12:01.680 look across the different geographic areas, the higher vacancies are 0:12:01.720 --> 0:12:07.320 in some of the markets that we're experiencing migration out 0:12:07.880 --> 0:12:12.880 outflows prior to the pandemic. But these are markets like 0:12:13.120 --> 0:12:18.000 San Francisco, these are markets like Chicago, and even some 0:12:18.080 --> 0:12:21.360 of the Manhattan markets are experiencing very high vacancies. 0:12:22.160 --> 0:12:24.200 So then talk to me about what needs to happen 0:12:24.360 --> 0:12:27.960 to change that, and specifically how much of that calculation 0:12:28.120 --> 0:12:32.160 needs to come from employers getting their workers back to 0:12:32.200 --> 0:12:35.040 the office. At least in talking with friends this weekend, Jess, 0:12:35.040 --> 0:12:37.920 it feels so all over the place like you and 0:12:37.960 --> 0:12:40.040 I are here every day. Most of our friends are 0:12:40.080 --> 0:12:42.800 not in that busket that's accurate, right, But some of 0:12:42.840 --> 0:12:44.680 them are, and some of them are saying, oh, my 0:12:44.720 --> 0:12:46.720 bosses are starting to track my time in the office. 0:12:46.720 --> 0:12:49.480 It's really anoying. So maybe that's a good indicator for you, Todd, 0:12:49.960 --> 0:12:50.720 tell me what are you thinking. 0:12:51.600 --> 0:12:57.480 Yeah, there have been a pretty material change, I think 0:12:57.559 --> 0:13:03.240 in terms of the leaders, organizations expectations with respect to 0:13:03.480 --> 0:13:07.320 being back in the office. Most of the news that 0:13:07.440 --> 0:13:11.600 you read or that's been reported over the last couple 0:13:11.640 --> 0:13:16.560 of months is more days back in the office. JP 0:13:16.679 --> 0:13:21.600 Morgan five days for their senior most people. Zuckerberg published 0:13:21.600 --> 0:13:26.080 a report recently that their engineers have performed more efficiently 0:13:26.120 --> 0:13:28.640 and better when in the office. So I think we'll 0:13:28.679 --> 0:13:32.520 continue to see more in the office, But I don't 0:13:32.559 --> 0:13:38.199 think that that is going to be the trigger that 0:13:38.760 --> 0:13:42.199 causes the office market to perform better. The office market 0:13:42.280 --> 0:13:47.280 historically has been the most highest highly correlated of any 0:13:47.320 --> 0:13:51.200 of the other sectors to the business cycle. And the 0:13:51.240 --> 0:13:56.800 business cycle is slowing, and we started into this business 0:13:56.800 --> 0:14:01.200 cycle with reasonably high can see is already in the 0:14:01.240 --> 0:14:05.040 office sector. So what we need is a robust economy. 0:14:05.240 --> 0:14:08.679 What we need is office using job growth. What we 0:14:08.800 --> 0:14:15.280 need is probably less supply, in particular the B and 0:14:15.480 --> 0:14:20.480 C office market, which is very much commodity space. I 0:14:20.520 --> 0:14:23.520 think about it, if you're commuting an hour and fifteen 0:14:23.560 --> 0:14:27.000 minutes each way to the office, are you going to 0:14:27.040 --> 0:14:30.240 be excited about coming to an office that doesn't have 0:14:30.320 --> 0:14:33.840 the amenity base that you know a high quality office has. 0:14:33.960 --> 0:14:34.560 No, You're not. 0:14:34.920 --> 0:14:36.720 It's like in the Bloomberg office. We have so many 0:14:36.720 --> 0:14:37.880 snacks here, right, Maddie. 0:14:38.080 --> 0:14:40.720 I love an amenity base. That's what I'm going to 0:14:40.800 --> 0:14:42.360 start calling my pantrot. 0:14:42.400 --> 0:14:43.200 It brings me here. 0:14:43.320 --> 0:14:48.400 Yeah, I mean Bloomberg. The Bloomberg facility is a perfect example. Like, 0:14:49.480 --> 0:14:52.560 you know, it's a it's a very nice building with 0:14:53.440 --> 0:14:58.120 you know, snacks and drinks and meeting areas and it's 0:14:58.160 --> 0:15:01.760 a you know, it almost feels like, you know, a 0:15:01.840 --> 0:15:07.080 public space, but in you know, in in the private environment. 0:15:07.200 --> 0:15:13.320 So that's the kind of experience that office workers want today. 0:15:13.760 --> 0:15:16.320 And if you're not delivering it, you're not going to 0:15:16.400 --> 0:15:19.880 see very robust demand for your buildings. 0:15:20.160 --> 0:15:22.880 To Matty's point, what is it going to take for 0:15:23.040 --> 0:15:25.920 us to get there? What's the catalyst in order to 0:15:25.920 --> 0:15:28.880 get people back into the office with you look back 0:15:28.920 --> 0:15:32.240 what happened during the pandemic and now there's obviously this 0:15:32.440 --> 0:15:35.040 rise of hybrid in the workplace, which obviously people are 0:15:35.040 --> 0:15:35.720 really enjoying. 0:15:37.280 --> 0:15:41.560 Yeah, you know, it's it's interesting though, you know, the 0:15:41.560 --> 0:15:45.720 the the people that are just starting out in the workforce. 0:15:46.240 --> 0:15:49.200 Most of those people in our firm, and as I 0:15:49.240 --> 0:15:55.760 speak to other other firms and leaders and other industries, there. 0:15:56.040 --> 0:15:59.200 Their junior people want to be in the office. They 0:15:59.280 --> 0:16:04.800 recognize that they learn more, there's better training, there's osmosis 0:16:04.880 --> 0:16:09.280 learning that goes on, and the senior folks want everyone 0:16:09.320 --> 0:16:12.160 in the office for culture continuity. So I think that's 0:16:12.240 --> 0:16:16.920 going to bounce back. It's been a little bit stagnant recently. 0:16:17.000 --> 0:16:22.080 If you look at the occupancy figures the castle card 0:16:22.560 --> 0:16:26.280 keyse wipes, we've been in and around fifty percent of 0:16:26.760 --> 0:16:31.320 the pre COVID occupancy levels in terms of swipes. But 0:16:31.400 --> 0:16:34.320 I suspect we're going to see that through the remainder 0:16:34.360 --> 0:16:37.560 of the year increase. But again, I don't think that 0:16:37.560 --> 0:16:42.840 that is the nirvana. It obviously will help, but what 0:16:43.200 --> 0:16:47.600 is really going to matter is making sure that we 0:16:47.760 --> 0:16:52.040 have a robust economy, have office using job growth growing, 0:16:52.560 --> 0:16:57.680 and that the buildings that are not providing the work 0:16:57.760 --> 0:17:00.800 environment that tenants want to see. You know, those buildings 0:17:00.840 --> 0:17:03.080 are going to have to change or those buildings are 0:17:03.080 --> 0:17:05.240 going to have to be repurposed to something else. 0:17:05.680 --> 0:17:08.000 All Right, Really quickly, Todd, in our final minute with 0:17:08.040 --> 0:17:12.480 you here, talk to me about what this looks like 0:17:12.720 --> 0:17:17.600 in terms of the impact on cities. I'm always hoping 0:17:17.720 --> 0:17:21.159 that these buildings in Midtown that our previous offices are 0:17:21.160 --> 0:17:23.040 going to get turned into apartments so that I can 0:17:23.080 --> 0:17:26.200 continue to afford to live in New York City. How 0:17:26.600 --> 0:17:28.960 likely is my dream to come true here? 0:17:30.080 --> 0:17:34.959 I think some of the buildings, although unfortunately maybe for you, 0:17:35.119 --> 0:17:39.959 a smaller percentage of these buildings are convertible. It is 0:17:40.520 --> 0:17:45.040 it's a challenge. You know, you have to have significant plumbing, 0:17:45.760 --> 0:17:48.960 you have to have the floor plates lay out appropriately 0:17:49.760 --> 0:17:54.040 in order to design effective and efficient units. So I 0:17:54.040 --> 0:17:57.560 think that the conversion to residential is an option, but 0:17:57.680 --> 0:18:00.480 again it's not the option for every BI building. It's 0:18:00.520 --> 0:18:03.760 the option for a much smaller percentage of buildings than 0:18:03.840 --> 0:18:06.160 those who own them and maybe those who are looking 0:18:06.200 --> 0:18:09.520 to buy cheaper apartments in the city. I think in 0:18:09.640 --> 0:18:14.800 terms of longer term, where are we seeing migration, we 0:18:15.160 --> 0:18:18.480 continue to see migration to the southeast, the south, and 0:18:18.520 --> 0:18:22.440 the southwest. I think it's keeper cost of living, lower taxes, 0:18:22.520 --> 0:18:26.600 more business friendly environments, and those are investible themes that 0:18:26.800 --> 0:18:28.119 I believe are here to stay. 0:18:28.280 --> 0:18:30.280 All right, Todd, thank you so much for joining us. 0:18:30.320 --> 0:18:32.680 That was Todd Henderson, co head of Global real Estate 0:18:32.720 --> 0:18:35.639 for DWS on commercial real estate. 0:18:35.680 --> 0:18:38.840 There you're listening to the tape. Catch our live program 0:18:38.880 --> 0:18:42.840 Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, 0:18:43.000 --> 0:18:45.120 the tune it app, Bloomberg dot Com, and. 0:18:45.080 --> 0:18:46.399 The Bloomberg Business App. 0:18:46.440 --> 0:18:49.240 You can also listen live on Amazon Alexa from our 0:18:49.240 --> 0:18:54.359 flagship New York station, Just say Alexa, play Bloomberg eleven thirty. 0:18:55.160 --> 0:18:58.520 Wilson Mills here in the Interactive Broker's studio And you 0:18:58.560 --> 0:19:00.879 know what, Maddie, especially with what we've been covering the 0:19:00.920 --> 0:19:03.399 last year, and when it comes to investment managers, it 0:19:03.400 --> 0:19:05.879 has been so tricky when you think of the amount 0:19:05.920 --> 0:19:07.840 of losses in the bear market last year, and then 0:19:07.840 --> 0:19:10.480 you're coming off of a Nasdaq one hundred's best first 0:19:10.480 --> 0:19:13.160 half to a year ever. And who better to talk 0:19:13.200 --> 0:19:17.440 to us about positioning than JD Gardner, CIO and founder 0:19:17.520 --> 0:19:21.000 of apt Is Capital Advisors. JD give us her take 0:19:21.040 --> 0:19:24.080 here as far as how are you advising clients to 0:19:24.320 --> 0:19:26.439 position off the back of what we just saw the 0:19:26.480 --> 0:19:27.520 last six months. 0:19:28.320 --> 0:19:31.760 Hey, guys, thanks thanks so much for having us. Really, 0:19:31.800 --> 0:19:33.600 we spend a lot of time talking about just where 0:19:33.600 --> 0:19:37.720 returns come from, so in a nutshell, yield plus growth 0:19:37.760 --> 0:19:41.000 or multiples expanding, and our advice, and it has been 0:19:41.040 --> 0:19:45.080 this for some time now, is depending on valuations to expand, 0:19:45.119 --> 0:19:48.160 to continue to expand is probably not the best way 0:19:48.160 --> 0:19:50.640 to position portfolios at the moment. So we really think 0:19:50.640 --> 0:19:53.040 there's an emphasis that should be had on yield plus 0:19:53.040 --> 0:19:56.760 growth and that framework should drive the portfolio construction process 0:19:56.760 --> 0:19:57.639 in today's market. 0:19:58.320 --> 0:20:02.040 So then, in terms of valuation, how do you suss 0:20:02.040 --> 0:20:05.800 out whether you need to reallocate or reposition based on 0:20:05.840 --> 0:20:08.919 how expensive certain equities might become. 0:20:10.000 --> 0:20:12.720 I think it's just equities in general. When you look 0:20:12.760 --> 0:20:16.560 at how friendly valuation expansion has been since really the 0:20:16.600 --> 0:20:19.840 financial crisis, and you can point to the FED and 0:20:19.920 --> 0:20:23.040 QE and things like that, like a lot of people will, 0:20:23.119 --> 0:20:26.280 but I think the last fifteen years or so has 0:20:26.400 --> 0:20:30.240 really kind of fooled investors into thinking that equity valuations 0:20:30.400 --> 0:20:31.240 just go up. 0:20:31.240 --> 0:20:31.920 And if you look at. 0:20:31.840 --> 0:20:35.119 Where we are today versus where we are historically, given 0:20:35.160 --> 0:20:37.879 the backdrop that what's happened in the interest rate environment 0:20:37.960 --> 0:20:42.440 the last fifteen sixteen months, what's happening you know at 0:20:42.440 --> 0:20:46.359 the underlying the fundamental components of these companies, we just 0:20:46.400 --> 0:20:49.119 think multiples expanding is not in the cards and we 0:20:49.160 --> 0:20:51.639 do think valuations look rich right now, when. 0:20:51.520 --> 0:20:54.520 You're talking about rich valuations, I'm sure Maddie and I 0:20:54.600 --> 0:20:56.680 have a few ideas of what corners of the market 0:20:56.760 --> 0:20:58.720 you could be talking about when it comes to big 0:20:58.760 --> 0:21:02.280 tech and these growth But is that where you think 0:21:02.480 --> 0:21:05.120 the majority of that is placed, or are there other 0:21:05.160 --> 0:21:06.920 particular corners of the market that you think look a 0:21:06.960 --> 0:21:08.320 little too lofty as well. 0:21:09.480 --> 0:21:13.000 I think there's definitely pockets that we could point to 0:21:13.040 --> 0:21:17.080 and say does this make sense or not? And you 0:21:17.160 --> 0:21:19.280 can probably sense where our stance would be on that. 0:21:20.040 --> 0:21:24.280 But I think in general there are pockets where there's 0:21:24.359 --> 0:21:27.840 valuations that look somewhat attractive. But when you're just getting 0:21:27.880 --> 0:21:31.439 beta exposure to the market, we're in an environment where 0:21:31.960 --> 0:21:37.800 unless you're willing to take significant active share risk versus 0:21:37.840 --> 0:21:40.040 the S and P, because the SMP now, like I know, 0:21:40.400 --> 0:21:42.520 just heard the market update talking about the Nasdaq talking 0:21:42.560 --> 0:21:44.359 about the S and P, the S and P still 0:21:44.480 --> 0:21:47.080 look at the top five or six names. You're heavily, 0:21:47.119 --> 0:21:51.440 heavily focused in names that we are dependent on the 0:21:51.920 --> 0:21:54.400 growth associated with those companies being attractive. 0:21:55.320 --> 0:21:58.760 So then, and it's interesting because historically when you see 0:21:59.040 --> 0:22:03.080 a strong market that leads to strong markets ahead, right, 0:22:03.200 --> 0:22:06.880 So how do you think about risk when it comes 0:22:06.920 --> 0:22:09.720 to that? Are you concerned at all about being overbought 0:22:09.760 --> 0:22:11.760 on some of these expensive names? And your note you 0:22:12.160 --> 0:22:14.320 mentioned that at least eighty percent of your fund's net 0:22:14.400 --> 0:22:17.600 assets will be invested in US large caps. Are you 0:22:17.640 --> 0:22:20.680 concerned at all about going all in on a few 0:22:20.960 --> 0:22:21.720 a few names. 0:22:22.400 --> 0:22:22.440 No. 0:22:23.320 --> 0:22:27.200 And here's here's here's kind of our what we tell 0:22:27.240 --> 0:22:30.159 investors all the time is we think volatility should be 0:22:30.240 --> 0:22:33.040 used as an asset class or viewed as an asset class, 0:22:33.480 --> 0:22:35.919 and volatility is something that you can use to mitigate 0:22:36.000 --> 0:22:37.240 risk or enhance yield. 0:22:37.760 --> 0:22:41.200 So we have a whole suite of funds where you know. 0:22:41.200 --> 0:22:45.240 Let's say, let's say you get beta plus additional yield, 0:22:45.640 --> 0:22:49.080 and we think that that that helps alleviate that additional 0:22:49.119 --> 0:22:51.879 yield helps alleviate the potential risk that you're taking. Because 0:22:52.400 --> 0:22:54.439 and I'll be the first one to tell you, you know, 0:22:54.680 --> 0:22:56.840 market could end up plus thirty for the rest of 0:22:56.880 --> 0:22:59.000 the year. It could go you know, we could lose 0:22:59.040 --> 0:23:01.439 what gains we've had so far here today, but we 0:23:01.440 --> 0:23:06.240 could also keep rising. I can't explain markets just seem 0:23:06.320 --> 0:23:11.840 to levitate right now soft landing. And I would guess 0:23:11.880 --> 0:23:13.879 if you pulled your audience and said, hey, what do 0:23:13.880 --> 0:23:16.280 you think the market's going to do if the Fed 0:23:16.280 --> 0:23:18.560 funds rate goes from basically zero to five and a 0:23:18.600 --> 0:23:20.640 half or wherever it is right now in the next 0:23:20.680 --> 0:23:23.679 fourteen months, I would guess most people would not say 0:23:23.880 --> 0:23:26.719 markets are going to just continue to truck higher in 0:23:26.760 --> 0:23:27.600 twenty twenty three. 0:23:27.680 --> 0:23:30.160 And so our use. 0:23:30.119 --> 0:23:32.520 Of volatility, our view on volatility, I think, is what 0:23:32.600 --> 0:23:35.119 allows us to continue to take that equity risk and 0:23:35.160 --> 0:23:38.439 not make any major bets about some bearish sentiment, Like 0:23:38.680 --> 0:23:42.000 we still want to own stocks because we think long 0:23:42.080 --> 0:23:44.040 term they're how you compound wealth. 0:23:44.119 --> 0:23:46.800 That's interesting because we did an M Live survey at 0:23:46.800 --> 0:23:48.399 the start of the year. I did a story with 0:23:48.480 --> 0:23:51.040 Liz McCormick over on the Bonds team, and when we 0:23:51.119 --> 0:23:54.960 pulled on M Live, most respondents thought that the US 0:23:55.000 --> 0:23:56.480 stock market we were talking about, the S and P 0:23:56.600 --> 0:24:00.000 five hundred would retest those October lows, so they didn't 0:24:00.160 --> 0:24:03.040 necessarily see at the time a bull market coming. But 0:24:03.080 --> 0:24:05.080 I'm sure JD, especially when it comes to a lot 0:24:05.080 --> 0:24:08.480 of the sentiment indicators that we've been talking about. When 0:24:08.480 --> 0:24:11.439 they're at such different extremes. I know the AEII survey 0:24:11.520 --> 0:24:15.040 recently has begun to turn higher the last three weeks 0:24:15.119 --> 0:24:19.520 or so. Obviously not the same string of pessimism that 0:24:19.600 --> 0:24:22.440 we would have seen over the past fifteen months before that. 0:24:23.040 --> 0:24:25.320 But do you think that there's a risk here for 0:24:25.400 --> 0:24:27.960 individual investors if they remain too bearish? 0:24:29.280 --> 0:24:30.680 Yeah, I think there's definitely a risk. 0:24:30.800 --> 0:24:33.240 And if you look at how like I point to 0:24:33.280 --> 0:24:36.439 the vis twenty twenty three so far has been a 0:24:36.520 --> 0:24:39.000 year where there's been very little volatility, and you've seen 0:24:39.760 --> 0:24:41.399 the VIX go from what it was to where it 0:24:41.440 --> 0:24:44.840 is today, which is significantly lower. So I think you 0:24:44.960 --> 0:24:48.199 never want to fight that. That's kind of what I 0:24:48.240 --> 0:24:51.320 was saying I alluded to earlier. The only way if 0:24:51.320 --> 0:24:53.439 you want to take a bearish view your potential, your 0:24:53.440 --> 0:24:56.400 opportunity costs could be could be pretty damaging to long 0:24:56.480 --> 0:24:59.520 term compounded returns. And so that that's kind of where 0:25:00.080 --> 0:25:02.679 you know, we want to mitigate risks. Specifically with our 0:25:02.760 --> 0:25:05.919 enhanced Yield suite. We want to enhance the yield associated 0:25:05.960 --> 0:25:08.720 with owning beta and we think that gives you kind 0:25:08.720 --> 0:25:11.520 of more comfort in owning equities, even if you aren't 0:25:11.720 --> 0:25:13.400 convicted that valuations are cheap. 0:25:13.840 --> 0:25:17.080 Final thirty seconds here, JD, what is the single biggest 0:25:17.160 --> 0:25:19.439 thing that you are going to look to for the 0:25:19.480 --> 0:25:22.320 second half of the year to indicate where this market 0:25:22.359 --> 0:25:23.160 is going to end up? 0:25:24.680 --> 0:25:27.760 I think that that's a tough question on the. 0:25:27.680 --> 0:25:32.760 Spot, give me your your entire thesis on the market 0:25:32.840 --> 0:25:35.080 and how we can make money by following let. 0:25:35.000 --> 0:25:37.520 Me let me shake my magic eight ball. Hold on 0:25:37.560 --> 0:25:42.760 two seconds. I think the big thing is right now, 0:25:43.200 --> 0:25:44.840 what we're spending a lot of time in the office 0:25:44.880 --> 0:25:47.440 talking through is kind of what the FED say in 0:25:47.560 --> 0:25:52.480 verse market market expectations. All of that points to kind 0:25:52.480 --> 0:25:55.720 of how we started the conversation, which is, I really 0:25:55.720 --> 0:25:58.000 do think yield is going to be an incredibly important 0:25:58.080 --> 0:26:00.760 driver of returns at the portfolio level. And that doesn't 0:26:00.800 --> 0:26:04.040 mean go own some high yield bonds or something like that. 0:26:04.080 --> 0:26:05.360 I think there's different. 0:26:05.080 --> 0:26:09.080 Ways, specifically in the ETHF space, where you know, we're 0:26:09.119 --> 0:26:12.159 trying to pioneer ways where you can enhance yield in 0:26:12.200 --> 0:26:16.200 a very simple and liquid wrapper that's fully transparent and 0:26:16.359 --> 0:26:20.520 allows you to own beta instead of owning some factor 0:26:20.680 --> 0:26:22.880 or some tilt the portfolios that could create risk. 0:26:23.720 --> 0:26:26.600 Thank you so much, JD. It's been a pleasure getting 0:26:26.600 --> 0:26:28.720 your insight on this, a more optimistic view when it 0:26:28.760 --> 0:26:32.280 comes to investment managers. But JD. Gardner, CIO and founder 0:26:32.320 --> 0:26:35.000 of Aptis Capital Advisors, thank you so much for joining 0:26:35.080 --> 0:26:37.640 us on zoom and Maddie. I mean, looking at these 0:26:37.680 --> 0:26:39.720 markets we're talking about discretion there is still up over 0:26:39.760 --> 0:26:41.560 one percent in the S and P five hundred. Real 0:26:41.640 --> 0:26:44.240 estate also up one percent, but then you have healthcare 0:26:44.280 --> 0:26:47.880 down about one percent, so kind of keeping those gains 0:26:48.000 --> 0:26:49.600 in check for the S and P five hundred. 0:26:50.920 --> 0:26:54.760 You're listening to the Tin Can't Live program Bloomberg Markets 0:26:54.800 --> 0:26:57.879 weekdays at ten am Eastern on Bloomberg dot Com, the 0:26:57.960 --> 0:27:01.480 iHeartRadio app, and the Bloomberg miss or listen on demand 0:27:01.560 --> 0:27:03.160 wherever you get your podcast. 0:27:05.440 --> 0:27:08.359 We're going to switch gears a little bit to the geopolitics, Jess, 0:27:08.400 --> 0:27:11.919 because that Russian war on Ukraine continues, almost hitting a 0:27:12.000 --> 0:27:15.240 year and a half now of that war continuing. Just 0:27:15.280 --> 0:27:18.240 to go through some news there to Ukraine's deputy defense 0:27:18.280 --> 0:27:22.240 minister reporting heavy fighting as Kiev's troops are advancing towards 0:27:22.280 --> 0:27:26.080 Bach move Meanwhile, Russia is saying it thwarted a Ukrainian 0:27:26.680 --> 0:27:29.680 assassination attempt on the Russian backed head of crime. HA 0:27:29.760 --> 0:27:31.600 lots of news to talk about this morning, and all 0:27:31.640 --> 0:27:35.040 of that, of course following that Wagner Group news from 0:27:35.119 --> 0:27:38.359 last weekend. And we've got one of the foremost experts globally, 0:27:38.480 --> 0:27:40.800 I think, on Putin joining us to talk about this. 0:27:41.320 --> 0:27:45.040 Angela Stent, senior fellow at the Brookings Institute, also author 0:27:45.080 --> 0:27:48.480 of Putin's World, Russia against the West and with the rest. 0:27:48.560 --> 0:27:51.640 She joins us on zoom. Angela, great to speak with you, 0:27:51.840 --> 0:27:56.359 as always in terms of the totality of the news 0:27:56.359 --> 0:27:59.160 that we're getting out of Russia, out of Ukraine right now, 0:27:59.359 --> 0:28:03.280 and the picture pains for you regarding Putin's power, Where 0:28:03.320 --> 0:28:06.240 do you think his power stands right now? How dented 0:28:06.480 --> 0:28:09.200 is it following some of the bad news that he's 0:28:09.240 --> 0:28:11.520 gotten over the course of the last eight days. 0:28:12.600 --> 0:28:16.800 So Putin seems to have bounced back. I mean Saturday, 0:28:16.800 --> 0:28:20.240 when all these events were occurring on June twenty fourth, 0:28:21.080 --> 0:28:24.040 he was very angry, he seemed insecure. He kind of 0:28:24.080 --> 0:28:27.439 disappeared from view. But he's now done a lot of 0:28:27.480 --> 0:28:30.160 public events. He's, as I said, he's bounced back. He's 0:28:30.200 --> 0:28:33.640 made speeches. And we do know now that the Russian 0:28:33.720 --> 0:28:38.720 state is taking over Wagner's assets. They've raided the Wagner 0:28:38.760 --> 0:28:42.239 offices in Saint Petersburg, They've taken down the logo, you know, 0:28:42.280 --> 0:28:45.760 from the building where Vagner is, and they are slowly 0:28:46.560 --> 0:28:50.480 and I think systematically, trying to figure out how they're 0:28:50.520 --> 0:28:52.800 going to take these assets over, who is going to 0:28:52.880 --> 0:28:55.920 run them. And of course it's not only what Vagner 0:28:55.960 --> 0:29:00.920 has in Russia and Ukraine, but in Africa's Central African public, Mali, 0:29:01.240 --> 0:29:04.200 in Sudan and Libya, in all these places where Vaden 0:29:04.360 --> 0:29:10.520 was such an important outpost, really arm of the Russian state. 0:29:10.960 --> 0:29:14.120 So for the moment, Putin looks as if he is 0:29:14.200 --> 0:29:17.760 in charge. But I think there's so many questions still 0:29:18.040 --> 0:29:22.360 surrounding what happened last week and who was behind what that. 0:29:22.440 --> 0:29:24.760 I will still have to wait and see how this 0:29:24.840 --> 0:29:25.520 plays out. 0:29:25.840 --> 0:29:28.720 In the week of these insurrection attempts just over a 0:29:28.760 --> 0:29:32.240 week ago that threatened to steal Putin's grip on power. 0:29:32.320 --> 0:29:35.760 How has that impacted Ukraine's counter offensive with Russia. 0:29:36.760 --> 0:29:38.600 Well, it doesn't seem to have had that much of 0:29:38.640 --> 0:29:42.720 an impact. I mean, the counter offensive continues, it's very difficult. 0:29:43.280 --> 0:29:46.840 The Russians have very strong defenses, They've been billing them 0:29:46.840 --> 0:29:50.840 for months, and the Ukrainians are inching forward. They're taking 0:29:51.080 --> 0:29:54.880 small amounts of territory. As you said, they are trying 0:29:54.920 --> 0:29:58.120 to retake what's left of bunt Moot, which is really 0:29:58.120 --> 0:30:02.760 a destroyed town. But these gains come a significant loss 0:30:02.760 --> 0:30:06.479 of human life. So what the Ukrainians have said is 0:30:06.720 --> 0:30:09.880 that the real counter offensive hasn't begun yet, inasmuch as 0:30:09.920 --> 0:30:12.200 they have more troops and more weapons that they can 0:30:12.240 --> 0:30:14.880 put into this, and this may happen in a few weeks. 0:30:15.080 --> 0:30:17.080 But what they've said is we're not going to tell 0:30:17.120 --> 0:30:20.000 you when it's going to happen, and you'll see, you'll 0:30:20.000 --> 0:30:21.640 find out when we're actually doing it. 0:30:22.160 --> 0:30:25.360 Angela, If Putin was already able to bounce back just 0:30:25.400 --> 0:30:29.240 a little over a week after the Wagner groups moves here, 0:30:29.680 --> 0:30:33.160 what is it that could finally kind of put a 0:30:33.320 --> 0:30:36.440 dent in some of his power, both in Russia and 0:30:36.480 --> 0:30:38.680 then in this war effort in Ukraine. What do you 0:30:38.720 --> 0:30:41.040 think is something that could be a catalyst for that. 0:30:41.880 --> 0:30:45.280 Well, there could still be questions about his hold on 0:30:45.320 --> 0:30:49.000 the reins of power. There are obviously questions swallowing around 0:30:49.280 --> 0:30:53.000 about how much of the regular military actually supported some 0:30:53.080 --> 0:30:55.600 of the things that Pregorsian was doing and supported his 0:30:55.720 --> 0:30:58.480 criticism of the way that the war was being waged. 0:30:58.520 --> 0:31:02.200 We know that at least one general, sorovikn apparently supported him, 0:31:02.200 --> 0:31:05.720 and he's now disappeared, so there may be other questioning 0:31:05.800 --> 0:31:07.960 going on, and I think people will be waiting to 0:31:08.000 --> 0:31:12.400 see how the campaign in Ukraine goes. Can the Russian 0:31:12.560 --> 0:31:16.840 armed forces continue fighting back about the Ukrainians without the 0:31:16.920 --> 0:31:19.400 Wagner forces, And we don't know how many of the 0:31:19.480 --> 0:31:23.040 Vagner forces have joined the regular forces. They were supposed 0:31:23.080 --> 0:31:26.080 to have done so by July one, We're not sure 0:31:26.080 --> 0:31:29.960 about that, so I think that's one certainly of the indications. 0:31:30.160 --> 0:31:32.400 The other thing would be if you could really see 0:31:32.920 --> 0:31:37.360 complaining and unrest among the elites that support Putin, but 0:31:37.440 --> 0:31:40.160 we really haven't seen that because I think once they 0:31:40.240 --> 0:31:44.280 understood the mutiny was over, they need Putin to stay 0:31:44.320 --> 0:31:46.920 in power to protect our assets and their way of life. 0:31:47.080 --> 0:31:49.640 They may have lost the ability to travel to Europe 0:31:49.680 --> 0:31:52.719 and visit their homes and banks bank accounts because all 0:31:52.760 --> 0:31:55.680 of the sanctions that we've levied on them, but still 0:31:55.720 --> 0:31:57.920 they want to keep what they have in Russia and 0:31:58.480 --> 0:32:01.360 continue to lead the life that they're able still to do, 0:32:01.600 --> 0:32:04.040 and for that they don't want Putin to go. Pregausion 0:32:04.080 --> 0:32:06.520 would not have been a good alternative for them. So 0:32:06.600 --> 0:32:10.040 I think again, if you saw more overt unrest among 0:32:10.040 --> 0:32:12.400 the elites surrounding him, then you'd really have to question 0:32:12.680 --> 0:32:15.360 what's going on. But we haven't seen that since the 0:32:15.440 --> 0:32:16.240 mutiny was over. 0:32:16.600 --> 0:32:19.240 Do we have a sense of what the timetable could 0:32:19.240 --> 0:32:21.520 be for how long this could continue or is this 0:32:21.560 --> 0:32:23.920 something that's going to turn out to be an endless war. 0:32:25.280 --> 0:32:28.760 So Putin, I think, certainly before last week, thought that 0:32:28.840 --> 0:32:32.280 Russia could outlast the West. We have elections coming up, 0:32:32.320 --> 0:32:34.360 I don't have to tell you in the US, and 0:32:34.360 --> 0:32:38.280 we have some Republicans and candidates who are against supporting Ukraine, 0:32:38.440 --> 0:32:40.880 and then they're looking at Europe, and then also movements 0:32:40.920 --> 0:32:43.160 and groups in Europe who say that we should be 0:32:43.240 --> 0:32:47.000 forcing the Ukrainians to the negotiating table. So I think 0:32:47.040 --> 0:32:49.720 he believed that, and I think he still believes maybe 0:32:49.760 --> 0:32:52.760 he can outlast the West. But we did see a 0:32:52.800 --> 0:32:56.920 show of Western unity last week, So unfortunately, this war 0:32:57.000 --> 0:32:59.800 could go on for a long time. It also depends 0:32:59.840 --> 0:33:03.200 on how much the US and its allies, But primarily 0:33:03.240 --> 0:33:08.600 the US is willing to furnish the Ukrainians in sophisticated weaponry, 0:33:08.840 --> 0:33:14.680 and they're things like attackers missiles, which the Ukrainians are 0:33:14.720 --> 0:33:17.680 really asking for and which the US has so fond 0:33:17.760 --> 0:33:20.920 not given them F sixteen fighter aircraft that they want 0:33:21.160 --> 0:33:24.400 because their air defenses are not as strong as they 0:33:24.440 --> 0:33:27.640 could be. So if they got more weaponry from the US, 0:33:27.840 --> 0:33:30.640 then this might be able to be over earlier, but 0:33:30.720 --> 0:33:32.600 that's also been a very slow process. 0:33:32.760 --> 0:33:35.480 Well, Angela, how concerned are you that the upcoming elections 0:33:35.480 --> 0:33:38.320 in the US are going to make that even harder 0:33:39.080 --> 0:33:44.760 for US officials to properly get funding for Ukrainian counter 0:33:45.320 --> 0:33:48.240 offenses and weaponry as well. 0:33:48.400 --> 0:33:50.360 I think it's going to be more difficult. I think 0:33:50.360 --> 0:33:52.800 you'll see that this year twenty twenty three was probably 0:33:52.840 --> 0:33:56.240 the peak year of assistance for Ukraine. We'll see the 0:33:56.280 --> 0:34:00.640 debates in the fall as the election campaigns unfold. The 0:34:01.120 --> 0:34:03.000 people have to figure out what they're going to do 0:34:03.040 --> 0:34:05.920 with the National Defense Authorization Act, which is where they 0:34:05.920 --> 0:34:10.160 would be assigning all the money and other things for Ukraine. 0:34:10.480 --> 0:34:12.240 But I think it's going to be more difficult because 0:34:12.400 --> 0:34:17.520 you have a split among the Republican candidates about their 0:34:17.600 --> 0:34:20.880 views on Ukraine. And obviously, if Donald Trump is the candidate, 0:34:21.320 --> 0:34:24.200 that's going to be a very different situation next year 0:34:24.400 --> 0:34:25.319 than we have this year. 0:34:25.640 --> 0:34:28.480 Angela, we only have about a minute left here. What 0:34:28.560 --> 0:34:30.840 are your sort of final thoughts when it comes to 0:34:30.840 --> 0:34:32.319 this and what we should be keeping an eye on 0:34:32.400 --> 0:34:33.080 moving forward. 0:34:34.360 --> 0:34:35.960 Well, I think we have to keep an eye on 0:34:36.000 --> 0:34:39.680 the whereabouts of mister progosion. We don't know where he is. 0:34:40.120 --> 0:34:42.000 He may be in vl Risk, but we don't know that. 0:34:42.480 --> 0:34:44.600 We only have audio recordings from him. We have to 0:34:44.640 --> 0:34:47.080 keep our eyes on what happened to if we ever 0:34:47.120 --> 0:34:50.799 find out General Suovykin who has disappeared, we'll see how 0:34:50.840 --> 0:34:53.600 many people disappear or are no longer there. And then 0:34:53.640 --> 0:34:56.640 I think we need to see how successful the Russian 0:34:56.680 --> 0:35:00.120 state is in taking over the Wagner assets and controlling 0:35:00.360 --> 0:35:03.560 this kind of monstrosity. Really, they've got to have of 0:35:03.600 --> 0:35:06.400 control and that the Kreminins thought that it could control 0:35:06.440 --> 0:35:07.080 earlier on. 0:35:08.080 --> 0:35:10.400 All right, Angela, thank you so much as always for 0:35:10.520 --> 0:35:14.239 joining us. It's really so important that we have you 0:35:14.280 --> 0:35:16.239 as a source to get some of these insights on 0:35:16.280 --> 0:35:18.960 what's going on on the ground with that war in 0:35:19.120 --> 0:35:22.040 Ukraine and what's going on with Putin moving forward as well. 0:35:22.080 --> 0:35:25.359 That was Angela Stent, Senior Fellow at the Brookings Institute, 0:35:25.480 --> 0:35:29.120 also author of Putin's World, Russia against the West and 0:35:29.440 --> 0:35:30.360 with the rest. 0:35:30.719 --> 0:35:34.320 You're listening to the tape Cansur Live program Bloomberg Markets 0:35:34.400 --> 0:35:37.800 weekdays at ten am Eastern on Bloomberg Radio, the tune 0:35:37.800 --> 0:35:39.480 in app, Bloomberg dot Com, and. 0:35:39.480 --> 0:35:40.759 The Bloomberg Business App. 0:35:40.800 --> 0:35:43.640 You can also listen live on Amazon Alexa from our 0:35:43.640 --> 0:35:47.640 flagship New York station, Just say Alexa play Bloomberg eleven 0:35:47.719 --> 0:35:50.400 thirty Maddie. 0:35:50.440 --> 0:35:53.560 What better way to especially when we're getting ready for 0:35:53.719 --> 0:35:57.160 the fourth July holiday thinking about summer travel. I was 0:35:57.280 --> 0:35:59.600 just looking at some stats over the weekend. If you 0:35:59.640 --> 0:36:04.160 looked at more than two million passengers were on Friday, 0:36:04.280 --> 0:36:06.400 so kind of rivaling some of these numbers that we 0:36:06.440 --> 0:36:08.719 would have seen in Thanksgiving of twenty nineteen. So that 0:36:08.760 --> 0:36:11.880 was before the pandemic. When you think about that, that's crazy, 0:36:11.960 --> 0:36:15.000 I know. So we're getting back, like we're so back, 0:36:15.360 --> 0:36:17.560 We're so we are, and who better to chat with 0:36:17.640 --> 0:36:21.439 us when it comes to the travel season, especially during 0:36:21.480 --> 0:36:24.640 the summer months. Than David Carr, Senior insights manager, was 0:36:24.760 --> 0:36:28.640 similar Web David, please talk to us about what your 0:36:28.760 --> 0:36:31.239 travel outlook is, because it seems like when you think 0:36:31.239 --> 0:36:34.080 about the consumer, they're definitely out there traveling right now. 0:36:35.880 --> 0:36:39.839 Yeah, that's true. Well, it's interesting. I mean I look 0:36:39.880 --> 0:36:43.319 at things through the lens of web traffic is a 0:36:43.320 --> 0:36:47.040 proxy for demand, and we're actually seeing things soften up 0:36:47.080 --> 0:36:50.840 a little bit. I think if you were in a 0:36:50.840 --> 0:36:55.320 crowd at airport dealing with your canceled flight, you probably 0:36:55.320 --> 0:36:58.520 didn't feel like things were off at all. And it's 0:36:58.560 --> 0:37:02.920 not that demand has collapse. It's just not growing in 0:37:02.960 --> 0:37:05.680 the crazy way that it was a year ago or 0:37:05.719 --> 0:37:08.680 two years ago coming out of the pandemic. So we 0:37:08.719 --> 0:37:11.200 do seem to be a little bit past that that 0:37:11.320 --> 0:37:13.399 revenge travel just got to get out there. 0:37:13.640 --> 0:37:18.239 Interesting, So softening up a bit where exactly I mean, 0:37:18.320 --> 0:37:20.719 is this where you're seeing just in general for flights 0:37:21.280 --> 0:37:22.040 and things like that. 0:37:23.239 --> 0:37:26.960 Yeah, flights, I mean, I actually did an analysis of 0:37:27.400 --> 0:37:31.800 just the top one hundred travel websites that we consider 0:37:31.840 --> 0:37:34.200 transactional websites where you can buy a ticket, you can 0:37:34.239 --> 0:37:39.040 buy some sort of a booking and it's been off 0:37:39.040 --> 0:37:43.839 a little bit. I think it's almost unchanged from last 0:37:43.960 --> 0:37:49.240 year as of June, as of preliminary stats for June. 0:37:49.760 --> 0:37:52.399 And you know, the big standout has been cruises. Though 0:37:52.520 --> 0:37:59.120 cruises are are still crazy growing, you know, some more 0:37:59.160 --> 0:38:03.360 than others. I mean, you know, Carnival itself, the Carnival 0:38:03.440 --> 0:38:08.279 brand isn't doing quite as strongly as it's some of 0:38:08.320 --> 0:38:12.799 its sub brands. Princess is doing better, same thing with 0:38:12.920 --> 0:38:16.920 Royal Caribbean and Celebrity. Celebrity is the one that is 0:38:16.960 --> 0:38:23.120 growing the fastest right now, Version is growing fastest. And 0:38:23.440 --> 0:38:26.279 I hope I'm not babbling too much, but we do 0:38:26.400 --> 0:38:31.440 definitely see a trend towards a low cost travel options 0:38:31.480 --> 0:38:34.680 winning out. So if I look at airlines, they tend 0:38:34.719 --> 0:38:38.040 to be about the same or maybe down a little 0:38:38.040 --> 0:38:41.960 bit from this time last year. But Frontier Airlines is 0:38:42.000 --> 0:38:45.280 going great. And if I look at the cruises MSc, 0:38:45.520 --> 0:38:50.080 which is a relatively budget cruise line, they're the strongest 0:38:50.120 --> 0:38:53.319 of that set. Even though you know, across the board, 0:38:53.480 --> 0:38:54.920 I did see the cruises we rot. 0:38:55.719 --> 0:38:58.239 What's so interesting that I always think about our Bloomberg 0:38:58.320 --> 0:39:03.400 intelligence airlines. Analysts always talk about how important business travel 0:39:03.520 --> 0:39:07.160 is for these airlines because when it's going on the 0:39:07.200 --> 0:39:10.200 company card, maybe you're getting first class travel, whereas if 0:39:10.239 --> 0:39:14.839 it's you, maybe you're going Spirit airlines for your own pocketbook. There, 0:39:15.160 --> 0:39:18.000 talk to me about how the data looks on your 0:39:18.120 --> 0:39:20.439 end when it comes to business travel. Are you seeing 0:39:20.440 --> 0:39:22.399 any big changes on that front this year? 0:39:23.600 --> 0:39:23.759 Yeah? 0:39:23.800 --> 0:39:26.279 I mean the most direct way I can track that 0:39:26.440 --> 0:39:33.120 is by looking at traffic to say AMX travel so 0:39:33.560 --> 0:39:40.240 a business travel portal, and that's that and concurs maybe 0:39:40.360 --> 0:39:44.680 twelve thirteen percent from what it was last year, So 0:39:45.000 --> 0:39:47.880 there is some interest in getting back out there to 0:39:48.400 --> 0:39:49.120 travel again. 0:39:50.640 --> 0:39:53.920 When you're talking about a little bit of softness earlier, 0:39:53.960 --> 0:39:56.320 what do you think that tells us about the American 0:39:56.360 --> 0:39:57.319 consumer right now? 0:39:59.440 --> 0:40:02.840 Well, I'm not an economist, but I think consumer confidence 0:40:03.000 --> 0:40:06.960 is the is the phrase that comes to mind. Not 0:40:07.160 --> 0:40:09.799 that people are doing horribly, but they just they just 0:40:09.960 --> 0:40:13.560 aren't quite sure how they're going to be doing next month, 0:40:13.600 --> 0:40:17.520 and so there may be a little bit less inclined 0:40:17.840 --> 0:40:22.040 to make a big travel purchase. They still want their vacation, 0:40:22.920 --> 0:40:26.960 but they might be more inclined to shop for deals. 0:40:27.680 --> 0:40:30.200 Is that part of why we're seeing such a boom 0:40:30.200 --> 0:40:32.960 in the cruise industry. Is it viewed as a deal 0:40:33.480 --> 0:40:37.000 or is it just that you know, the world's reopened, 0:40:37.040 --> 0:40:38.680 so why not go on a cruise? Like, what do 0:40:38.719 --> 0:40:41.040 we know about the thinking behind the cruiser? 0:40:42.520 --> 0:40:46.840 I mean, I've read elsewhere that that cruising has started 0:40:46.840 --> 0:40:50.520 to attract a younger, younger demographic, and it still does 0:40:50.600 --> 0:40:53.280 well with old folks like Mayer. 0:40:53.480 --> 0:40:56.320 Really David has. 0:40:56.200 --> 0:41:01.719 Gotten a little bit younger. And yeah, and I think 0:41:02.000 --> 0:41:04.080 it is seen as a bargain as seen as the package. 0:41:04.280 --> 0:41:08.800 Now the activity that I'm seeing right now, typically cruises 0:41:08.880 --> 0:41:12.640 are booked more in the March April time frame. They 0:41:12.640 --> 0:41:18.200 talk about wave season when everybody is behind their cruises. So, 0:41:19.520 --> 0:41:23.280 you know, but I think, you know, we saw strength 0:41:23.520 --> 0:41:26.640 then in demand, but we're the fact that we're still 0:41:26.640 --> 0:41:30.280 seeing it now means that some people are are either 0:41:31.560 --> 0:41:34.799 booking a last minute a cruise, you know, they still 0:41:34.800 --> 0:41:38.040 find that attractive, or maybe they're booking something that is 0:41:38.080 --> 0:41:41.399 for the fall or for next year. And that's all 0:41:41.440 --> 0:41:42.560 good for the cruise lines. 0:41:42.680 --> 0:41:46.560 What about when it comes to hotel websites, what are 0:41:46.600 --> 0:41:49.759 you seeing there? Is there a difference between particular high 0:41:49.840 --> 0:41:53.839 end types of hotels, maybe resorts versus maybe some cheaper bookings. 0:41:55.880 --> 0:42:00.640 Well, hotels in general, we're doing fairly well. I did 0:42:00.760 --> 0:42:05.400 notice that some of the all inclusive resorts were actually 0:42:05.440 --> 0:42:11.560 seeing some decline or stagnation in demand. So Sandals, Beaches, 0:42:12.320 --> 0:42:18.160 club Medose, those types of types of places. So you know, again, 0:42:20.080 --> 0:42:23.960 you know that has some of the same fixed price 0:42:23.960 --> 0:42:26.960 appeal as the cruise does, but maybe people think of 0:42:27.000 --> 0:42:32.480 it as flurging and so they're a little bit less 0:42:32.719 --> 0:42:34.279 less likely to pull the trigger on that. 0:42:34.520 --> 0:42:37.080 Yeah, some of those resorts. I was looking back in 0:42:37.200 --> 0:42:39.840 May to take a trip for my birthday, and like 0:42:39.840 --> 0:42:42.200 you were talking about Club Med, I wasn't thinking about 0:42:42.239 --> 0:42:44.520 staying there, but I saw it on Expedia and it 0:42:44.640 --> 0:42:47.400 was probably five six thousand dollars to stay for just 0:42:47.440 --> 0:42:49.759 a couple of days. I was like, no, thanks, No, 0:42:49.880 --> 0:42:50.279 I was like. 0:42:51.480 --> 0:42:53.799 What did you end up doing again? For the travel job? 0:42:53.840 --> 0:42:56.160 I went to Aruba. Yes, it was great, A had 0:42:56.160 --> 0:42:59.359 good time and just a hotel. I stayed at Renaissance. 0:43:00.080 --> 0:43:02.719 It's nice, okay there before I've been to a couple 0:43:02.760 --> 0:43:05.759 of times, but they have a flamingo island there, so 0:43:05.960 --> 0:43:07.640 it's a lot of fun takes. 0:43:07.960 --> 0:43:10.160 So you have to go interesting that you did not 0:43:10.760 --> 0:43:13.000 consider an Airbnb. It sounds like. 0:43:13.400 --> 0:43:15.759 I wanted to go to the Flamingo Island in order 0:43:15.800 --> 0:43:18.520 to get it. That's the private island at So that's 0:43:18.560 --> 0:43:21.040 that's the reason that got me hooked onto it. You 0:43:21.080 --> 0:43:23.880 can buy a day pass, but it's more complicated. 0:43:23.360 --> 0:43:26.640 Right right, Okay, Well that that makes sense as a reason. David. 0:43:26.680 --> 0:43:29.800 I know that you don't necessarily look at this data, 0:43:30.000 --> 0:43:32.759 but you're you're a travel guy. You can go on 0:43:32.800 --> 0:43:35.200 this journey with us here to what extent are you 0:43:35.280 --> 0:43:40.040 seeing declines in Airbnb interest and consumers looking more towards 0:43:40.080 --> 0:43:44.000 hotels and other you know, long term stays perhaps outside 0:43:44.120 --> 0:43:45.520 of Airbnb rentals. 0:43:46.160 --> 0:43:50.560 I did see that that that was I guess both 0:43:50.680 --> 0:43:55.640 both Airbnb and Verbo. Yeah, despite I see a lot 0:43:55.640 --> 0:44:00.080 of advertising from Verbo currently, but but they they're trending 0:44:00.320 --> 0:44:05.360 downward year over year. So the more traditional hotel brands 0:44:05.360 --> 0:44:07.480 are actually doing a little bit better than those guys, 0:44:07.719 --> 0:44:08.640 which is interesting. 0:44:10.000 --> 0:44:13.840 All right, David Carr, we only have about a minute left, 0:44:13.920 --> 0:44:16.920 But any sort of parting thoughts for the summer travel 0:44:16.920 --> 0:44:17.960 season for our listeners. 0:44:21.239 --> 0:44:23.520 I mean, I thought of mentioning that that I am 0:44:23.560 --> 0:44:26.520 a cruiser, I have to live in driving distance of 0:44:26.800 --> 0:44:28.560 three cruise ports in South Florida. 0:44:28.719 --> 0:44:29.120 Oh wow. 0:44:29.719 --> 0:44:32.640 It's part of the appeal of cruising might be that 0:44:32.719 --> 0:44:34.520 you don't necessarily have to get on an airplane to 0:44:34.840 --> 0:44:40.440 go on a cruise. And if it was over this 0:44:40.520 --> 0:44:43.040 past week, I think I would be happy to be 0:44:43.080 --> 0:44:45.360 getting out a cruise rather than flying some places. 0:44:46.160 --> 0:44:49.759 So great. Well, we are so pleased that we were 0:44:49.760 --> 0:44:52.799 able to get your insight on all things travel for 0:44:52.880 --> 0:44:56.480 this summer. That's David Carr, senior insights manager with Similar Web, 0:44:56.840 --> 0:44:58.400 joining us on Zoom. 0:44:58.840 --> 0:45:01.960 You're listening to the tape cats are live program Bloomberg 0:45:02.000 --> 0:45:05.600 Markets weekdays at ten am Eastern on Bloomberg Radio, the 0:45:05.680 --> 0:45:07.640 tune in app, Bloomberg dot Com, and. 0:45:07.600 --> 0:45:08.879 The Bloomberg Business App. 0:45:08.920 --> 0:45:11.759 You can also listen live on Amazon Alexa from our 0:45:11.760 --> 0:45:16.800 flagship New York station, Just say Alexa play Bloomberg eleven thirty. 0:45:17.520 --> 0:45:19.360 But Jess Wild markets are still open. 0:45:19.400 --> 0:45:19.600 Here. 0:45:19.640 --> 0:45:22.520 We're going to have a great talk with marlee's Van Romberg, 0:45:22.640 --> 0:45:26.200 editor and chief at crunch Base. She's joining us on 0:45:26.320 --> 0:45:29.719 Zoom from San Francisco to talk all things tech. And 0:45:29.800 --> 0:45:32.719 an outlook from crunch Base for the second half of 0:45:32.760 --> 0:45:35.319 the year. Marlee's thanks so much for getting on a 0:45:35.360 --> 0:45:38.880 call with us on this half holiday. Here you have 0:45:39.120 --> 0:45:43.480 a report that your organization did on the outlook for 0:45:43.520 --> 0:45:47.200 twenty twenty three that I found so interesting. One of 0:45:47.239 --> 0:45:50.800 the results saying that companies only have six months of 0:45:50.920 --> 0:45:53.200 runway left in the bank. That's according to almost a 0:45:53.239 --> 0:45:56.880 third of your company respondents. There. What are the the 0:45:57.040 --> 0:46:00.560 other big standout data points for you when it comes 0:46:00.600 --> 0:46:02.680 to that mid year report from crunch Base. 0:46:04.160 --> 0:46:06.839 Nice, good morning, Thank you for having me so. Yes, 0:46:07.040 --> 0:46:10.040 we actually just published We do a quarterly reader survey, 0:46:10.600 --> 0:46:14.720 so these are mostly obviously people in tech and venture 0:46:14.800 --> 0:46:17.359 capital who are taking that survey and sort of telling 0:46:17.400 --> 0:46:19.480 us what they're thinking. And some of the things that 0:46:19.480 --> 0:46:22.640 we've been tracking since the beginning of the year is, 0:46:22.760 --> 0:46:26.319 as you mentioned, runway, that's a big hot topic right 0:46:26.360 --> 0:46:29.399 now is how much money do startups have before they 0:46:29.440 --> 0:46:32.719 start running out of cash? And what I thought was 0:46:32.760 --> 0:46:35.960 really interesting this time around was, as you mentioned, about 0:46:35.960 --> 0:46:39.920 a third of respondents who answered that question said that 0:46:40.040 --> 0:46:43.520 they actually have less than six months of runway, which 0:46:43.640 --> 0:46:47.120 is definitely you know, sort of red alarm status for 0:46:47.200 --> 0:46:52.400 your company, particularly given that venture funding is very difficult 0:46:52.400 --> 0:46:55.160 to come by, so you know, that's that's really an 0:46:55.200 --> 0:46:59.680 emergency situation for those companies. What was also interesting is 0:46:59.719 --> 0:47:02.560 that it seems to be kind of a barbell about 0:47:02.560 --> 0:47:05.840 the same percentage who answered the question said they have 0:47:05.960 --> 0:47:08.640 more than twenty four months of runway. So it seems 0:47:08.680 --> 0:47:11.640 like there's almost these two classes of companies that are 0:47:11.719 --> 0:47:15.040 emerging right now. Those that are doing pretty well on 0:47:15.400 --> 0:47:19.160 managing their cash and can probably you know, kind of 0:47:19.200 --> 0:47:24.160 survive the current environment if nothing else big kind of 0:47:24.160 --> 0:47:26.040 comes along. And then there are those that are really 0:47:26.040 --> 0:47:29.279 in a difficult situation right now. And I think that 0:47:29.400 --> 0:47:33.640 might be where we start to see more mergers and acquisitions. 0:47:33.680 --> 0:47:36.240 It's something we've sort of been anticipating in the startup 0:47:36.280 --> 0:47:38.680 world for a while and haven't quite seen that come along. 0:47:39.640 --> 0:47:44.680 But there were actually quite a few larger deals announced 0:47:44.719 --> 0:47:48.680 last week, including the Big Data Bricks purchase of another 0:47:48.880 --> 0:47:52.239 venture back startup, So you know, we might start to 0:47:52.280 --> 0:47:53.720 see some of those trends emerge. 0:47:53.760 --> 0:47:56.840 Now, what's been the catalyst for why there's been a 0:47:56.880 --> 0:47:59.480 divergence between those that are still doing well and then 0:47:59.520 --> 0:48:01.279 you have on the opposite side of that, those that 0:48:01.320 --> 0:48:02.640 are struggling to get that funding. 0:48:04.480 --> 0:48:06.120 You know, I think I think there are a lot 0:48:06.160 --> 0:48:09.560 of factors at play. In general, funding is hard to 0:48:09.600 --> 0:48:13.040 come by for all companies right now, with you know, 0:48:13.120 --> 0:48:16.560 some obvious exceptions like AI. Investors are very very interested 0:48:16.600 --> 0:48:17.760 in what's going on there. 0:48:19.000 --> 0:48:19.200 You know. 0:48:19.280 --> 0:48:22.920 I think when money was easy to come by, a 0:48:22.920 --> 0:48:26.200 lot of startups did over higher, and that's why we're 0:48:26.239 --> 0:48:29.040 seeing a lot of layoffs in the sector right now, 0:48:29.120 --> 0:48:32.480 as you know, some of those corrections are being made. 0:48:33.600 --> 0:48:37.040 I think, you know, some companies were really kind of 0:48:37.040 --> 0:48:39.160 trying to grab as much market share as they could 0:48:39.200 --> 0:48:42.680 when when things were hot, and as the market slowing 0:48:42.719 --> 0:48:45.799 down now, you know, maybe didn't manage the cash they 0:48:45.840 --> 0:48:47.319 had as well as they could have. 0:48:47.600 --> 0:48:50.720 How much of this could be repercussions to what happened 0:48:50.719 --> 0:48:53.279 with SVB and some of these other banks that we 0:48:53.320 --> 0:48:54.520 saw earlier in the spring. 0:48:56.400 --> 0:48:59.160 Yeah, I think we you know, really can't overstate the 0:48:59.200 --> 0:49:02.840 impact that the collapse of the SDB had on this sector. 0:49:02.920 --> 0:49:07.200 You know, partly it was really an impact to the 0:49:07.440 --> 0:49:12.720 confidence in venture backed startups, but you know, it's also 0:49:12.880 --> 0:49:17.280 just SVB was by far the largest source of venture 0:49:17.280 --> 0:49:20.400 debt for a lot of startups, So that's something that's 0:49:20.440 --> 0:49:23.000 become even harder to come by and for a lot 0:49:23.040 --> 0:49:27.080 of companies. As venture funding became more difficult, venture debt 0:49:27.200 --> 0:49:29.240 was was sort of a plan B, so that's become 0:49:29.680 --> 0:49:30.800 more difficult as well. 0:49:31.400 --> 0:49:31.720 Well. 0:49:31.840 --> 0:49:35.600 Even though that space has been a challenge, AI is 0:49:35.719 --> 0:49:39.120 certainly alive and well here when it comes to funding 0:49:39.280 --> 0:49:43.719 for these AI firms, what are you hearing people look 0:49:43.760 --> 0:49:47.640 at and question when sussing out which firms to invest in. 0:49:48.160 --> 0:49:50.680 I think about the difference between the guests that we 0:49:50.719 --> 0:49:52.799 have on who talk about betting on a C three 0:49:52.880 --> 0:49:55.880 AI versus you know, a quall Comb or an Intel 0:49:55.960 --> 0:49:58.759 some of these names that are AI adjacent but a 0:49:58.800 --> 0:50:01.080 little bit more stable. What are you hearing when it 0:50:01.080 --> 0:50:02.360 comes to that decision making. 0:50:04.040 --> 0:50:07.120 Yeah, you know, obviously there's a lot of interest and 0:50:07.200 --> 0:50:09.959 hype kind of around generative AI, but what we're also 0:50:09.960 --> 0:50:12.439 seeing is investors are really interested in more of those 0:50:12.520 --> 0:50:15.680 kind of infrastructure companies that are going to be powering 0:50:15.719 --> 0:50:17.520 a lot of what's going on in AI and that 0:50:17.560 --> 0:50:21.880 are sort of you know, adjacent or tangential to the 0:50:21.880 --> 0:50:24.080 core AI companies. There's a lot of interest in that. 0:50:25.000 --> 0:50:26.920 I think one investor who spoke with us kind of 0:50:26.960 --> 0:50:29.360 you know, described it as looking for the nuts and 0:50:29.400 --> 0:50:31.920 bolts that are going to be powering the AI revolution. 0:50:32.000 --> 0:50:33.960 There's a lot of money going into that as well, 0:50:35.000 --> 0:50:38.680 you know. I think, as with anything startup or venture capital, 0:50:38.719 --> 0:50:40.480 we are also seeing a lot of companies that are 0:50:40.520 --> 0:50:43.000 sort of just grabbing the AI label and sort of 0:50:43.040 --> 0:50:45.360 trying to affiliate themselves with that. And I think with 0:50:45.520 --> 0:50:47.560 time we'll sort of see a bit of a sorting 0:50:47.600 --> 0:50:49.560 there of what's real and what's not. 0:50:50.239 --> 0:50:52.720 We only have about a minute left, but what's next 0:50:52.760 --> 0:50:55.440 that you're keeping your focus on on your radar as 0:50:55.440 --> 0:50:57.840 far as what the trajectory could be. When we're talking 0:50:57.880 --> 0:51:00.759 about these companies that are going through a investment or 0:51:00.760 --> 0:51:05.280 these seed funding rounds, you know, I think seed funding 0:51:05.840 --> 0:51:08.120 at the beginning of this venture downturn had held out 0:51:08.160 --> 0:51:11.000 fairly well, and that's not surprising. It was really the 0:51:11.120 --> 0:51:13.840 late stage startups that were the most impacted. But we 0:51:13.880 --> 0:51:17.440 are starting to see that downturn trickle down through to 0:51:17.520 --> 0:51:21.680 the earliest stages and that's, frankly, that's worrisome because that's 0:51:21.800 --> 0:51:24.240 you know, the next class of companies that are going 0:51:24.320 --> 0:51:28.200 to be unicorns, you know, five ten years down the road, 0:51:28.239 --> 0:51:31.719 and so I think we will see this decline really 0:51:31.840 --> 0:51:35.080 kind of extend for quite some time, with exceptions around 0:51:35.560 --> 0:51:37.600 some of these sectors that really get a lot of funding, 0:51:37.960 --> 0:51:41.359 But right now we're seeing venture funding down across all 0:51:41.400 --> 0:51:42.560 stages of funding. 0:51:43.880 --> 0:51:46.279 All right, MARLEEZ, thank you so much for joining us 0:51:46.320 --> 0:51:49.200 to talk about your outlook and some of the picture 0:51:49.239 --> 0:51:53.520 when it comes to funding for startups in San Francisco 0:51:53.600 --> 0:51:55.920 and more broadly in the tech space. Really appreciate it. 0:51:55.960 --> 0:51:59.680 That was Marlee's Van Romberg. She is editor in chief of. 0:52:03.120 --> 0:52:06.239 Thanks for listening to the Bloomberg Markets podcasts. You can 0:52:06.239 --> 0:52:10.040 subscribe and listen to interviews at Apple Podcasts or whatever 0:52:10.120 --> 0:52:13.840 podcast platform you prefer. I'm Matt Miller. I'm on Twitter 0:52:14.040 --> 0:52:15.960 at Matt Miller nineteen seventy three. 0:52:16.400 --> 0:52:18.800 And I'm fall Sweeney. I'm on Twitter at pt Sweeney. 0:52:18.920 --> 0:52:21.600 Before the podcast, you can always catch us worldwide at 0:52:21.600 --> 0:52:24.279 Bloomberg Radio.