Speaker 1: This is Bloomberg Wall Street Week.
Speaker 2: I mean may not have an overall recesion, we're having
Speaker 2: a rolling recession to kind of role looks pretty strongly
Speaker 2: it is when it comes to jobs.
Speaker 1: The financial stories that shape our world.
Speaker 2: Three major regional bank failures send shockwaves through the banking system.
Speaker 2: We're all trying to figure out what to make of
Speaker 2: generative AI through.
Speaker 1: The eyes of the most influential voices.
Speaker 2: Welcome down, Doctor Paul Krugman, Ryan Moynihan, a Bank of America,
Speaker 2: Zebra Lair of the Paulson Institute, Glen Hubbard of the
Speaker 2: Columbia Business School.
Speaker 1: Bloomberg Wall Street Week with David Weston from Bloomberg Radio.
Speaker 2: War in Israel takes a pause, the world takes another
Speaker 2: shot at dealing with climate, and we say goodbye to
Speaker 2: two giants, one in diplomacy and the other an investment.
Speaker 2: This is Bloomberg Wall Street Week. I'm David Weston. This
Speaker 2: week's secial contributor. Larry Summers on the legacies of Henry
Speaker 2: Kissinger and Charlie Munger. Johnny Fion of B and P
Speaker 2: Paraba on what his clients are telling him.
Speaker 3: Part of them are expecting actually to access Captain Walkeet.
Speaker 4: At a later time when waits normalized.
Speaker 2: And Joe said of thor equities on the investment opportunities
Speaker 2: in Mexico.
Speaker 5: We think this is another one of those golden opportunities
Speaker 5: where we're.
Speaker 6: For all the global Wall Street watched this week as
Speaker 6: Israel's warld Hamas went on a temporary hiatus as Israel
Speaker 6: stopped its military operations in a deal that brought some
Speaker 6: of the hostages home.
Speaker 7: The approach that we're taken with Israel and quite frankly
Speaker 7: with our partners in the region is working.
Speaker 3: It's getting aid into people that needed.
Speaker 2: And Elon Musk used the opportunity to travel to the
Speaker 2: war zone to counter accusations that his post on X
Speaker 2: was anti Semitic and to offer to help rebuild Gaza
Speaker 2: once things.
Speaker 3: Are over, those who are intentioned motor must be inutralized.
Speaker 3: Then the propaganda west.
Speaker 2: Off the world gathered in Dubai for COP twenty eight
Speaker 2: and the latest efforts to get a move on in
Speaker 2: dealing with climate, with US officials once again expressing hope.
Speaker 8: I'm confident that Copple provided an opportunity both to identify
Speaker 8: the opportunities that this energy transition is providing and to
Speaker 8: build the broad international coalition.
Speaker 2: Even as more than seventy thousand delegates we're talking about
Speaker 2: fossil fuels opiqu plus met in Vienna to review restrictions
Speaker 2: on all production.
Speaker 9: It could be simply that OPEC plus decides to curtail
Speaker 9: supply and we get a bread going back up to
Speaker 9: the low nineties as a result of that. It's a
Speaker 9: question of how much they curtail supply by, but that's
Speaker 9: the biggest risk right now.
Speaker 2: Two towering figures on Global Wall Street said goodbye this
Speaker 2: week as America's foremost diplomat for a generation and more.
Speaker 2: Henry Kissinger left us at the age of one hundred,
Speaker 2: and Warren Buffett's longtime partner, Charlie Munger, passed away at
Speaker 2: age ninety nine. On the economic front, the United States
Speaker 2: continued its strong performance, with GDP growing at a robust
Speaker 2: five point two percent clip. And when you put that
Speaker 2: strong economic perform together with a FED that seems to
Speaker 2: be sickly it may well be done with hiking. Well,
Speaker 2: what you get are some pretty happy markets, as the
Speaker 2: S and P five hundred added another eight tens of
Speaker 2: percent to end the week at forty fifth five ninety four,
Speaker 2: which is above where the Bloomberg Elves Equities and the
Speaker 2: analysts thought we would end up twenty twenty three, and
Speaker 2: by that way above even where they think we're going
Speaker 2: to end up at the end of twenty twenty four,
Speaker 2: which is forty five hundred. The Nasdaq was up four
Speaker 2: tens of percent for the week, while the yield on
Speaker 2: the tenure was down nearly twenty six basis points for
Speaker 2: the week to end at four point two one. For
Speaker 2: her perspective on these markets and what they are telling
Speaker 2: us about investing today, we welcome now Catherine Keating. She's
Speaker 2: bny MELON, Global head of Wealth Management Casin. Welcome back.
Speaker 2: Great to have you back on wallshreet.
Speaker 10: Great to be here, David, thank you.
Speaker 2: So let's start with some of those data. I mean,
Speaker 2: we got some really robust data we talked about this week,
Speaker 2: but it's it's just the latest and quite a few
Speaker 2: series of data that are pretty encouraging with the economy.
Speaker 4: Yeah.
Speaker 10: So the real story in markets has been the month
Speaker 10: of November, obviously, and the market's digesting really four pieces
Speaker 10: of important data. The first one, of course, inflationation continues
Speaker 10: to go down, but we see disinflation broadening. We see
Speaker 10: it in goods, we see it in services, and we
Speaker 10: see it in big ticket items like shelter and automobiles.
Speaker 10: So that's the first thing inflation. Second thing, labor market
Speaker 10: softening a bit. That's a good sign for lower inflation
Speaker 10: as well. We see the unemployment rate drifting up a
Speaker 10: bit three point nine percent, still very low historically, unemployment
Speaker 10: claims drifting up a bit. And then the real news,
Speaker 10: I think was the following the bond market digesting that
Speaker 10: huge move in tenure treasury rates in the month of November,
Speaker 10: sixty basis points down from a four eighty eight down
Speaker 10: sixty to twenty eight.
Speaker 4: That's an enormous.
Speaker 10: Move in financing costs, not just for the federal government,
Speaker 10: of course, but for anyone who borrows consumers with mortgages
Speaker 10: and car loans, local governments, companies, very big news. And
Speaker 10: then the last thing that the market was digesting is
Speaker 10: after three quarters in a row of negative earnings growth
Speaker 10: in the SMP five hundred, we actually had positive earnings
Speaker 10: this quarter, four percent growth, eighty percent of companies beating expectations.
Speaker 10: So the market digested all of that, and you said it,
Speaker 10: we had a rally at everything.
Speaker 2: So I'm going to say I find this a little
Speaker 2: humbling because if you go back to the end of
Speaker 2: twenty twenty two, I'm not sure we would have predicted
Speaker 2: any of this. So why did so many of us
Speaker 2: get this so wrong?
Speaker 10: So, David, as you know, history has taught us that
Speaker 10: when you have inflation in the economy and you have
Speaker 10: the Federal Reserve raising interest rates to slow the economy,
Speaker 10: ninety percent of the time you end up in a recession.
Speaker 4: So here we are.
Speaker 10: We're twenty months in to a very fast and very
Speaker 10: aggressive FED hiking cycle, and there's no recession in sight.
Speaker 4: Why is that?
Speaker 10: I think many people underappreciated the change in two pillars
Speaker 10: of the economy, consumers and large companies. Consumers, of course
Speaker 10: seventy percent of the economy. The consumer balance sheet has
Speaker 10: changed dramatically since the financial crisis. First, consumers are twice
Speaker 10: as wealthy twenty percent wealthy or just since the beginning
Speaker 10: of this decade, thanks to stock markets and real estate appreciation.
Speaker 10: Second of all, they've been borrowing less. The financial crisis
Speaker 10: was a terrible crisis for the consumer. They've been borrowing
Speaker 10: much more prudently. You see ten percent or so of
Speaker 10: their disposable income now going to borrowing costs. That was
Speaker 10: close to fifteen percent before the financial crisis. But the
Speaker 10: most important thing when you look at consumer balance seats
Speaker 10: is two thirds of consumer borrowing is their mortgage. Those
Speaker 10: mortgages have been refinanced at very low rates. They're going
Speaker 10: to stay that way for a while. Corporate America sort
Speaker 10: of the same thing. Big companies before the crisis. They
Speaker 10: would borrow in short term markets commercial paper. Those rates
Speaker 10: are very high. Now companies aren't doing that. Instead, they
Speaker 10: did what consumers did, and they took advantage of low rates.
Speaker 10: In twenty twenty and twenty twenty one, the SMP five
Speaker 10: hundred taking refinancing debt, issuing new debt at low rates
Speaker 10: and terming it four years, five years, six years, ten years,
Speaker 10: and so that has made both the consumer and large
Speaker 10: companies less sensitive to interest rate increase.
Speaker 2: Great to have you back on, Thank you so much,
Speaker 2: says Cosiarkidi of Nymelan.
Speaker 11: We have always thought of foreign policy and economic policy
Speaker 11: as something that has clear cut terminal dates, and that
Speaker 11: you are either in a condition of conflict or in
Speaker 11: a condition of blissful peace in the nineties. If we
Speaker 11: do it properly, we will live in a less dangerous world,
Speaker 11: but one which will never be totally without problems, and
Speaker 11: in which the subtlety of American of American statesmanship in
Speaker 11: adjusting the various balances both political and economic, will be
Speaker 11: severely tested. But if we do it well, it could
Speaker 11: be an extraordinarily creative period.
Speaker 2: Henry Kissinger defined the world of diplomacy for two generations,
Speaker 2: remaking the geopolitical map of Asia and the Middle East.
Speaker 2: A Jewish refugee who fled Nazi Germany for the United States,
Speaker 2: Kissinger returned as a US Army private to serve in
Speaker 2: the Battle of the Bulge. After the war, Kissinger became
Speaker 2: doctor Kissinger when he earned a PhD in political science,
Speaker 2: and then joined the Harvard faculty. When Richard Nixon became
Speaker 2: president in nineteen sixty nine, he appointed Henry Kissinger as
Speaker 2: his national security advisor and used him to open a
Speaker 2: window to China that made the current economic miracle possible.
Speaker 2: To most people.
Speaker 7: In nineteen sixty eight sixty nine, it seemed inconceivable that
Speaker 7: the US could have a relationship with such an extreme,
Speaker 7: zealous regime as Mao Zedong's remember, the Cultural Revolution was
Speaker 7: in full space and most people thought the regime was
Speaker 7: just nots so the very idea of trying to establish
Speaker 7: a relationship was a minority pursuit.
Speaker 2: Kausinger also negotiate a peace treaty between Israel and Egypt
Speaker 2: and a ceasefire with Syria that brought calm to a
Speaker 2: region that had been upended by wars since the end
Speaker 2: of World War Two. Kasinger also played the lead role
Speaker 2: and negotiating an end to the United States involvement in
Speaker 2: a conference in Vietnam, which earned him the Nobel Peace
Speaker 2: Prize in nineteen seventy three. Doctor Kissinger's role in the
Speaker 2: world was not without controversy. He was accused of pursuing
Speaker 2: an illegal military offensive and laois in Cambodia, as well
Speaker 2: as playing a role in coups in Chile and Argentina
Speaker 2: that resulted in repressive regimes. And this is the thing.
Speaker 7: That critics of Henry Kistinger have always struggled with. They've
Speaker 7: been very bad at setting the crimes of the Pinitiate
Speaker 7: in the context of the Cold War. When you see
Speaker 7: it in the context of the Cold War. To realize
Speaker 7: that the war crimes the crimes against humanity being perpetrated
Speaker 7: by communist regimes or at a much larger scale than
Speaker 7: those that were perpetrated by regimes of the right. And
Speaker 7: this is really the important thing one has to bear
Speaker 7: in mind. Henry Kistinger said even before he went into
Speaker 7: government that foreign policy was very often a choice between evils,
Speaker 7: and the job was to try to choose the lesser evil.
Speaker 2: Every president since Nixon turned to Henry Kissinger for advice
Speaker 2: on foreign policy. He was the author of influential books,
Speaker 2: from his first on Europe in the Wake of Napoleon,
Speaker 2: published in nineteen fifty seven, up to Leadership six Studies
Speaker 2: in World Strategies, published last year. Just last month, Henry
Speaker 2: Kissinger appeared to give a speech at the annual Al
Speaker 2: Smith Dinner in New York. At the end of that speech,
Speaker 2: he said, quote, A great leader is the giver and
Speaker 2: protector of our hopes. Henry Kissinger dead at age one hundred.
Speaker 2: Coming up Riturn to our special CONTRIBITTERA Larry Sumrso Harvard
Speaker 2: for his thoughts on the lives and legacies of two
Speaker 2: towering figures, Henry Kissinger and Charlie Munger. That's next on
Speaker 2: Wall Street Week on Bloomberg.
Speaker 1: This is Bloomberg Wall Street Week with David Weston from
Speaker 1: Bloomberg Radio.
Speaker 2: This is Wall Street Week. I'm David Weston, and were
Speaker 2: welcome to our very special contributor here in Wall Streetek.
Speaker 2: He is Larry Summons of Harvard. Larry, thank you so
Speaker 2: much for being with us here in New York. It
Speaker 2: has been quite a week where we lost Charlie Munger,
Speaker 2: we lost we lost Henry Kissinger, and then on Friday
Speaker 2: we actually lost Saturday O'Connor as well. I know you
Speaker 2: knew Henry, well you knew Charlie Munger. Talk about Henry
Speaker 2: Kissinger in your experience.
Speaker 4: He was an extraordinary man.
Speaker 12: It was extraordinary to see somebody in their eighties and
Speaker 12: then in their nineties, and then one hundred years old,
Speaker 12: so incredibly intellectually vital looking to learn about AI, speaking
Speaker 12: to most of the world's leading statesman every several months.
Speaker 4: He was fully engaged.
Speaker 12: And active in the way that many people half his
Speaker 12: age wouldn't.
Speaker 4: Have had the energy and the drive to do. He
Speaker 4: was somebody who always thought.
Speaker 12: In the large verst understanding broad historical forces or shaping
Speaker 12: relationships between countries that forming a conception of strategy. From
Speaker 12: that conception of strategy working to tactics. It was anything
Speaker 12: but the day to day political thrust of statements that
Speaker 12: so often seems to preoccupy leaders these days. He surely
Speaker 12: didn't get everything right, but he certainly was always trying
Speaker 12: to reason from the large to reason down. And I
Speaker 12: learned from his deep, li in a way tragic.
Speaker 4: Sensibility.
Speaker 12: He was the idealist as realist he and the realist
Speaker 12: as idealist Henry, maybe because of how and where he
Speaker 12: grew up in Germany in the nineteen thirties, feared disorder,
Speaker 12: feared chaos, feared the complete triumph of passion over reason.
Speaker 12: And his determination was to bring about stability, not because
Speaker 12: he somehow thought that the pride of nations and strength
Speaker 12: was what was most important, but because when there was
Speaker 12: the containment of evil, that was when people had an
Speaker 12: opportunity to live and flourish.
Speaker 2: The partner of Warren Buffett important. What effect did he
Speaker 2: have on writ large?
Speaker 4: You know?
Speaker 12: I think the first thing to say is that Charlie
Speaker 12: and Henry had something very important in common. They had
Speaker 12: different interests, they had different styles, they had different ways
Speaker 12: of speaking, but they both had a deep commitment to
Speaker 12: seeing the world as it was, not as they wanted
Speaker 12: it to be. And they began by trying to see
Speaker 12: things as realistically, as clinically accurately as possible. And that
Speaker 12: was the basis for decision, whether it was political and
Speaker 12: diplomatic decision in Henry's case, whether it was financial and
Speaker 12: investment decision in Charlie's case. What I got from both
Speaker 12: of them was this commitment to detached observation as a
Speaker 12: prelude to taking action, you know, buy Warren's testimony. Charlie
Speaker 12: provided a really extraordinary insight, he said, and it's different
Speaker 12: than the old fashioned and traditional value investing credo. Charlie
Speaker 12: rejected the idea of buying fair companies at great prices.
Speaker 12: He thought you'd ultimately do better buying great companies at
Speaker 12: fair prices. And that philosophy of finding the best, making
Speaker 12: sure you weren't overpaying, and then sticking with it is
Speaker 12: one that has certainly served certainly served him, and certainly
Speaker 12: served warn well. But I saw it. Charlie was in
Speaker 12: a lat wasn't involved a law of Harvard Law School
Speaker 12: while I was the president of Harvard, and he had
Speaker 12: a view. It was clear there was a logic, he
Speaker 12: was prepared to argue and.
Speaker 4: Defend it. He too was an extraordinary figure.
Speaker 12: And you have to also look at both Henry and
Speaker 12: Charlie and see the power of staying curious. They stayed
Speaker 12: with it to the very end, and I think their curiosity,
Speaker 12: their love of reading, their love of discussion, their love
Speaker 12: of argument, was part of what caused them to flourish
Speaker 12: for so very long.
Speaker 2: Well, maybe a reach, but I think you're really emulating
Speaker 2: that and staying curious as you've now taken this role
Speaker 2: with Open Ai. You talk about Henry Kissinger with Open Air.
Speaker 2: You're taking it on. Let me ask you, frankly, why
Speaker 2: did you take the job and what do you hope
Speaker 2: to do with it?
Speaker 12: I thought that, as I said on your show, that
Speaker 12: this was something that was extraordinarily important. You know, no
Speaker 12: one can be certain whether this is once a decade technology,
Speaker 12: a once a half century technology, a once a century technology,
Speaker 12: a once a millennium technology. You know and can know
Speaker 12: that for sure, but it sure looks like it's awfully
Speaker 12: important to develop rapidly and safely and to disseminate effectively.
Speaker 12: And well so, when I was offered an opportunity to
Speaker 12: be part of contributing to that and overseeing to make
Speaker 12: sure that that was effectively done, and to do it
Speaker 12: working with some very great people. I thought it was
Speaker 12: a real opportunity and I was glad to do it.
Speaker 2: I don't want to take anything way for your technological expertise,
Speaker 2: but when what you just said safely strikes me as
Speaker 2: probably part of what you're going to be focused on,
Speaker 2: and that gets to questions of governance about how you
Speaker 2: handle this technology wherever it's going and how a powerful
Speaker 2: may be. Do you have an overall sense of what
Speaker 2: you need to do to government to get this safely
Speaker 2: part right?
Speaker 12: You know, David, I've been on the job two days
Speaker 12: and they're going to send me the onboarding packet for
Speaker 12: the board on Sunday. So I shouldn't be saying too
Speaker 12: much at all because I don't know enough.
Speaker 4: Here's some things I think I know.
Speaker 12: I think I know that a company like this has
Speaker 12: to be prepared to cooperate doesn't mean always agree with,
Speaker 12: but cooperate with key government officials on regulatory issues, on
Speaker 12: national security issues, on development of technology issues. I think
Speaker 12: I know also, and this is integral to the structure
Speaker 12: of open AI, where the for profit entity is itself
Speaker 12: a creature of a not for profit ENTITYE that this
Speaker 12: needs to be a corporation with a conscience, and that
Speaker 12: we need to be always thinking about the multiple stakeholders
Speaker 12: in the development of this technology, and as a board member,
Speaker 12: that will be part of my responsibility working with other
Speaker 12: board members to.
Speaker 4: Make that certain.
Speaker 12: You know, my colleague at Harvard Lake, colleague Ken Galbret,
Speaker 12: said that conscious is the knowledge that someone is watching,
Speaker 12: and I think it's the responsibility for everybody involved in
Speaker 12: this to be thinking very carefully always about both opportunities
Speaker 12: and uncertainties and to make sure that those are balanced
Speaker 12: in the best way that's possible.
Speaker 2: Claria, it's really great to have you with us, as
Speaker 2: it always is. There's a very special contributor, Lary Summers
Speaker 2: of Harvard and this is Wall Street Week on Bloomberg.
Speaker 1: This is Bloomberg Wall Street Week with David Weston from
Speaker 1: Bloomberg Radio.
Speaker 2: Supply chains. Until the pandemic struck, most of us gave
Speaker 2: them little thought, apart from those working in shipping and procurement.
Speaker 2: But then we were hit with the reality that critical
Speaker 2: supplies for healthcare and much more came from one country China,
Speaker 2: presenting the need to diversify any supply chains are complicated.
Speaker 9: Your viewers know this from the business world that look
Speaker 9: the semiconductor value chain.
Speaker 13: It stretches across the globe and goes around at least
Speaker 13: three times.
Speaker 2: Now, companies and countries are moving quickly to reinforce and
Speaker 2: diversify their supply chains, with President Biden this week announcing
Speaker 2: a White House Council on Supply Chain Resilience.
Speaker 14: Let me be clear, in any corporation that's not brought
Speaker 14: their prices back down even as inflations come down, even
Speaker 14: the supply chains have been rebuilt, It's time to stop
Speaker 14: the price gouging.
Speaker 2: And with the new emphasis on alternative suppliers comes the
Speaker 2: movement of capital and investment, creating investment alternatives to China.
Speaker 15: I think some of the emerging markets outside of China
Speaker 15: have done relatively well. These include places like India, include
Speaker 15: places like Indonesia, Mexico, Brazil, and even some places in
Speaker 15: Eastern Europe like Greece and even Poland. These countries have
Speaker 15: done well, still relatively small to absorb too much capital.
Speaker 15: Where you can see that this sort of new era
Speaker 15: is beginning.
Speaker 2: It ticks a while one of the beneficiaries is Mexico,
Speaker 2: whether it's in trade.
Speaker 16: The main issue with China is exports. They declined significantly
Speaker 16: in terms of what they export to the US over
Speaker 16: the last five years, and that I think until they
Speaker 16: can turn that around, that's going to be an issue.
Speaker 16: And there's other countries that are benefiting from this, like
Speaker 16: Mexico with.
Speaker 2: Its near shoring or in real estate.
Speaker 13: I would say there's great opportunity is in Mexico in
Speaker 13: the industrial space and particularly along the border, and you
Speaker 13: have a lot of multinational companies that are located there
Speaker 13: looking for logistics and distribution type space.
Speaker 2: Or in manufacturing.
Speaker 17: There are going to be markets that kind of in
Speaker 17: Mexico where you know, more things are being made there. Again,
Speaker 17: and some of the restrictions that have been applied to
Speaker 17: China have benefited the Mexican economy.
Speaker 2: Putting Mexico high end Jamie Diamond's list of investment opportunities,
Speaker 2: We've doubled.
Speaker 4: A triple or capital here in the last six years.
Speaker 14: We cover more clients in private banking, investment banking, sm management, so.
Speaker 4: Our is total.
Speaker 2: I think it's one of the great opportunities I put
Speaker 2: in Mexico if you had to pick a country, this
Speaker 2: might be the number one opportunity to give us the
Speaker 2: investors perspective on Mexico. We welcome now Joseph Sitt. He's
Speaker 2: founder and chairman of Thor Equity, who's Sore Urban Unit
Speaker 2: is the largest real estate developer in Mexico. So, Joe,
Speaker 2: thank you so much for being here. It's great to
Speaker 2: have you. First of all, give us a sense of
Speaker 2: just how big you are in Mexico.
Speaker 5: In terms of the company, we're probably the largest individual
Speaker 5: developer in the retail asset class and the hospitality asset class.
Speaker 5: And then because we're in so many things from industrial, manufacturing, condominiums, etc.
Speaker 2: Etc.
Speaker 5: We're probably top two, top three developer in the country today.
Speaker 2: So why are you there?
Speaker 5: Opportunity and I would call it both opportunity growth and
Speaker 5: alternative when you think of the world and the world
Speaker 5: how things are changing, Mexico is becoming quite the answer
Speaker 5: to some of the United States's economic problems, and by
Speaker 5: being that solution, it's been wonderful for them as a country.
Speaker 5: I would say it's four things that really make up
Speaker 5: their economy, their drive. One is their local specialty assets.
Speaker 5: I call it it's avocados, it's tequila, and it's beer.
Speaker 5: We know it is, you know, going out and having
Speaker 5: that drink of beer and having the dip and have
Speaker 5: the tequila, et cetera, et cetera.
Speaker 2: But it really is a product.
Speaker 5: That's been growing. I mean, if you think of tequila
Speaker 5: thirty years ago, did you really go to a bar
Speaker 5: and hear a friend order at tequila? Not really. And
Speaker 5: so Mexican culture has gone global, It's gone viral. Sort
Speaker 5: of what happened to sushi forty or fifty years ago
Speaker 5: happened to Mexico. And then the second thing is remittances.
Speaker 5: You know, a lot of Mexicans and Americans, because of
Speaker 5: the close relationship between our countries, really transverse.
Speaker 2: Back and forth.
Speaker 5: And then probably the thing that's been the buzzword for
Speaker 5: the last thirty or sixty days is near Shuri. You know,
Speaker 5: we as a country, we see the world sort of
Speaker 5: bifurcating multipolar conflict. Mexico's a great solution. It's right here
Speaker 5: in our backyard. It's easy. Labor is actually cheaper than
Speaker 5: labor is in China. The people are hard working, they're industrious.
Speaker 5: The commuting point, the logistics for a container ship is
Speaker 5: free relative to shipping it from China, and so it's
Speaker 5: really become the Chinese alternative.
Speaker 2: So, Joe, you've described an investment opportunity, A big investment
Speaker 2: opportunity in Mexico typically was an opportunity money rushers in,
Speaker 2: capital rushes in and it becomes fully priced. Where are
Speaker 2: we in that cycle? How far? How close are we
Speaker 2: to fully pricing the assets in Mexico? So it's not
Speaker 2: quite the deal it was before.
Speaker 5: Excellent question, and often people generalize by the country, but
Speaker 5: you've got to also look at the specifics, meaning by
Speaker 5: the asset classes. For example, near Shuring, you had one
Speaker 5: hundred and twenty companies announce investments in Mexico so far
Speaker 5: the first half of this year about twenty nine billion
Speaker 5: in US dollars investment. The forty one percent increased from
Speaker 5: last year. Based upon the early research, it's looking like
Speaker 5: next year is going to.
Speaker 2: Double on that.
Speaker 5: So I would say from the industrial opportunity, I think
Speaker 5: we're in the very very early innings of it, probably
Speaker 5: the earliest innings amongst the different food groups. In fact,
Speaker 5: one of the things that I've often bumped into my
Speaker 5: challenges with investors as well, as sometimes, as we said
Speaker 5: the media is we're often at thor sometimes a little
Speaker 5: bit too early. We don't try to be the first,
Speaker 5: as I often say, we try to be the fastest second,
Speaker 5: but it's not until the third or fourth or fifth
Speaker 5: that the investors get it. And same thing happened with
Speaker 5: us in investing in Dubai, as you and I had
Speaker 5: spoken about, you know, four years ago. Same thing happened
Speaker 5: to us talking about Red States versus the Blue States
Speaker 5: and investing in red states fifteen years ago. And we
Speaker 5: think this is another one of those golden opportunities where
Speaker 5: we're early. We're just in the beginning of the second
Speaker 5: inning with a lot of runway, and those investors that
Speaker 5: act quickly now to mind that opportunity.
Speaker 2: Will get that benefit.
Speaker 5: If they wait, call it three years or four years
Speaker 5: or five years, then it starts getting priced in. I
Speaker 5: would say retail is probably already priced in, and I
Speaker 5: would say condominium's second home tourism, while growing, is probably
Speaker 5: somewhere in the middle there. So I would say ahead
Speaker 5: of the curve is industrial probably already valued, well is retail.
Speaker 5: And as I often joke to give the expression to
Speaker 5: my team, I say, ride the horses, feed the lions,
Speaker 5: and shoot the dogs. I would call the office market
Speaker 5: there probably the dog, and I would say the industrial
Speaker 5: market is probably the lion.
Speaker 2: Jui, you're clearly bullsh on Mexico's investment opportunity. Compare it
Speaker 2: with small turn is. We had Steve Schwartzman just this
Speaker 2: week say he thought, when it came to real estate,
Speaker 2: Europe was a great opportunity. Right now, how do you
Speaker 2: compare Mexico with Europe with some Asian alternatives?
Speaker 5: Well, Steve is a friend, I'm a fan of him
Speaker 5: and John Gray, both super smart guys. We often compare
Speaker 5: notes and look at ourselves as a miniature version thematic
Speaker 5: investor that then develops specialties in different areas. So I
Speaker 5: don't doubt what he's saying. We've got an office in
Speaker 5: most of the major metropolitan cities inside of Europe.
Speaker 2: Very active market for us.
Speaker 5: But I would say a lot of the early low
Speaker 5: hanging fruit in Europe has been mined. But where the
Speaker 5: opportunity in Europe is much more because of the dislocation,
Speaker 5: because of financial markets.
Speaker 2: So, Joe, what about geopolitics and particularly politics when it
Speaker 2: comes to Mexico. That's often been an issue for investors.
Speaker 2: We have an election coming up. Where does that stand today?
Speaker 5: You know, when Amlo was going through his election cycle,
Speaker 5: it's scared the bgbi's out of local players and candidly myself.
Speaker 5: Amlo then came in and he sounded good. He was
Speaker 5: a good hearer of what people were saying, but wasn't
Speaker 5: a good listener, I'm sorry to say. And so I
Speaker 5: really think that Mexico did well in spite of itself.
Speaker 5: Now the politics is much better. Either way, We're getting
Speaker 5: a woman for the first time as the president of Mexico.
Speaker 5: It'll either be Claudia Scheinbaum or to be sociated with
Speaker 5: god Viz. Both of them pro business listeners, touching their
Speaker 5: communities and really caring about their constituents at all levels
Speaker 5: and not just considering Rederick to be the answer. They're
Speaker 5: thoughtful about the jobs, etc. So I would say that's
Speaker 5: probably my overall number one most exciting thing today that
Speaker 5: I'm about that I'm excited about about the future of
Speaker 5: Mexico for the business community.
Speaker 2: Thank you so much for being on Wall Street week.
Speaker 2: Hoef you come back. This is great. As Joe said
Speaker 2: of thor equities coming up, telling the difference between what's
Speaker 2: fake and what's not? With or without artificial intelligence. That's
Speaker 2: next on Wall Street Week on Bloomberg, Finally, one more
Speaker 2: thought authentic. The Merriam Webster Dictionary defines it as worthy
Speaker 2: of acceptance or belief, as conforming two or based on
Speaker 2: fact and Miriam Webster has also deemed it to be
Speaker 2: the word of the Year, explaining that the line between
Speaker 2: real and fake has become increasingly blurred, which may just
Speaker 2: be the understatement of the year. Certainly, some of the
Speaker 2: tech communities seem to be struggling with the difference. Sponsors
Speaker 2: canceled the Software Developer Conference this week after speaker's profiles
Speaker 2: on the website turned out to be fake, leading several
Speaker 2: tech executives to pull out, including one from Microsoft who
Speaker 2: posted that he had been duped by the fake speakers.
Speaker 10: There was a lot of concern that there was a
Speaker 10: plot to make the account or to make the conference
Speaker 10: look more diverse than it really was.
Speaker 2: The once vaunted Sports Illustrated took down articles from its
Speaker 2: site after allegations it had used artificial intelligence not only
Speaker 2: to write the stories, but also to credit them to
Speaker 2: fictitious reporters, complete with profiles. Something SI's parent company denies,
Speaker 2: but says it is investigating further blurring that line between
Speaker 2: the authentic and the fake. But all of that is
Speaker 2: nothing compared with the current poster child for confusing fact
Speaker 2: with fiction, Congressman George Santos from Long Island. Representative. Santos
Speaker 2: continues to claim that life is treating him unfairly, even
Speaker 2: after an indictment and a move by his colleagues to
Speaker 2: expel him from the House of Representatives for making up
Speaker 2: more things than we have time to go.
Speaker 18: Through pursue it to Article one, Section five, clause two
Speaker 18: of the Constitution of the United States, Representative George Santos
Speaker 18: b and he hereby is expelled from the House of Representatives.
Speaker 2: In the world of business, Elon Musk certainly has his
Speaker 2: work cut out for him, sorting through over one hundred
Speaker 2: million posts on his ex social media site to separate
Speaker 2: what's true from what's not, and, for that matter, what's
Speaker 2: just downright malicious. But for Musk right now, the problem
Speaker 2: isn't so much what's falls as what is undeniably true,
Speaker 2: like the fact that he reposted something that much of
Speaker 2: the world regarded as antisemitic, which triggered advertisers like Apple,
Speaker 2: Disney and IBM to pull their money from the site.
Speaker 9: This company X Twitter has spent months basically doing damage
Speaker 9: control over Elon Musk's posts.
Speaker 2: Apparently as a make good mister Musk traveled to a
Speaker 2: war zone this week and offered to help rebuild Gaza.
Speaker 2: Once the fighting has stopped.
Speaker 3: Those who are intentioned motor must be inutralized, then the
Speaker 3: deep propaganda west stop.
Speaker 4: Well.
Speaker 2: I hope he will be involved in it.
Speaker 4: Toptel.
Speaker 2: As mister Musk struggled to deal with how he's marketing X,
Speaker 2: another business leader took a very different approach. One of
Speaker 2: the great brand builders of our time, Martha Stewart, has
Speaker 2: of course, made a series of TV commercials with Snoop Dogg,
Speaker 2: Do I Smell That's Right? On Due Time? And then
Speaker 2: posed for the cover of the Sports Illustrated Swimsuit edition
Speaker 2: at the age of eighty one. Now, Miss Stewart has
Speaker 2: taken yet another step to keep her profile high, this
Speaker 2: time by offering a stay at a two bedroom cottage
Speaker 2: on her estate in Bedford, New York, through Airbnb, complete
Speaker 2: with a brunch with Martha herself, all at the bargain
Speaker 2: basement price of eleven dollars and twenty three cents talk
Speaker 2: about marketing. The world was reminded this week of just
Speaker 2: what the word authentic really means when it comes to investing,
Speaker 2: with the passing of Charlie Munger at the age of
Speaker 2: ninety nine. As the longtime partner of Warren Buffett, Charlie
Speaker 2: made money for Berkshire Hathaway shareholders the old fashioned way.
Speaker 2: He earned it by doing his homework, making a few
Speaker 2: big decisions and staying with them and in the process
Speaker 2: made his historic returns. When it comes to Charlie Munger
Speaker 2: and Warren Buffett, there was no fiction. It was all fact.
Speaker 4: I think I fixed one flaw in my life. I
Speaker 4: got over having tantrums when I was about four or five.
Speaker 4: But every other flaw I have I haven't fixed.
Speaker 12: I've just counterbalanced it, both offsetting virtues.
Speaker 2: That does it for this episode of Wall Street Week,
Speaker 2: I'm David Weston. This is Bloomberg. See you next week.