1 00:00:00,280 --> 00:00:02,599 Speaker 1: This is Bloomberg Wall Street Week. 2 00:00:02,680 --> 00:00:07,040 Speaker 2: The global push into infrastructure, breaking the IPO logjam in text. 3 00:00:07,160 --> 00:00:09,120 Speaker 3: The financial stories that sheep. 4 00:00:08,880 --> 00:00:12,040 Speaker 2: Are work cutting inflation without losing jobs. Do we need 5 00:00:12,119 --> 00:00:14,560 Speaker 2: rate cuts? And if so? How many? Investing in a 6 00:00:14,560 --> 00:00:16,120 Speaker 2: time of geopolitical turmoil. 7 00:00:16,200 --> 00:00:18,560 Speaker 1: Through the eyes of the most influential voices. 8 00:00:18,720 --> 00:00:22,480 Speaker 2: Ten Rogueff Economists of Harvard, former FDIC had Shila Bert 9 00:00:22,680 --> 00:00:26,520 Speaker 2: ge CEO, Larry Kulp, San Francisco FED President Mary Daily. 10 00:00:26,239 --> 00:00:30,240 Speaker 1: Bloomberg Wall Street Week with David Weston from Bloomberg Radio. 11 00:00:30,320 --> 00:00:33,200 Speaker 2: The IMF warns aboug growing US debt as it meets 12 00:00:33,200 --> 00:00:36,840 Speaker 2: in Washington. Tesla lays off ten percent of its employees, 13 00:00:37,080 --> 00:00:39,440 Speaker 2: and Fetcher Pal says he wants to wait to be 14 00:00:39,600 --> 00:00:42,960 Speaker 2: sure about that inflation. This is Bloomberg Wall Street Week. 15 00:00:43,080 --> 00:00:46,360 Speaker 2: I'm David Weston this week. Steve Ratner of will of 16 00:00:46,400 --> 00:00:48,960 Speaker 2: Advisors on EV's losing their momentum. 17 00:00:49,200 --> 00:00:51,960 Speaker 4: The industry has been criticized for decades, has been behind, 18 00:00:52,080 --> 00:00:54,160 Speaker 4: and so they really wanted to be ahead of the curve. 19 00:00:54,360 --> 00:00:57,360 Speaker 2: And Kathy Marcus of Pigeum on timing the commercial real 20 00:00:57,480 --> 00:00:58,160 Speaker 2: estate market. 21 00:00:58,520 --> 00:01:02,160 Speaker 5: June series could likely be a very attractive entry point. 22 00:01:15,120 --> 00:01:18,400 Speaker 2: We begin with geopolitics at the top of the news 23 00:01:18,480 --> 00:01:21,360 Speaker 2: again this week, in the wake of the Iranian strikes 24 00:01:21,360 --> 00:01:25,160 Speaker 2: against Israel last weekend and then Israel's drone strikes in 25 00:01:25,200 --> 00:01:27,600 Speaker 2: retaliation at the end of the week, we asked amb 26 00:01:27,600 --> 00:01:30,400 Speaker 2: Bessador Richard has A's centerview partners and author of the 27 00:01:30,480 --> 00:01:33,120 Speaker 2: news at are Home in a way, how much escalation 28 00:01:33,440 --> 00:01:34,319 Speaker 2: we could see. 29 00:01:34,480 --> 00:01:40,039 Speaker 6: We're potentially into a cycle of escalation, not definitely, and 30 00:01:40,120 --> 00:01:42,639 Speaker 6: if it were to happen, I think the most obvious area, 31 00:01:42,680 --> 00:01:47,360 Speaker 6: other than the emotional reaction to violence, there would be 32 00:01:47,400 --> 00:01:50,520 Speaker 6: did the Iranians take steps to close down the straits 33 00:01:50,560 --> 00:01:51,160 Speaker 6: of Homeboos? 34 00:01:51,440 --> 00:01:54,840 Speaker 2: Did the calculus change, even if subtly, with the role, 35 00:01:55,000 --> 00:01:59,000 Speaker 2: whether tacit or active, of Saudi Arabia, UAE and Jordan 36 00:01:59,240 --> 00:02:02,960 Speaker 2: Because retrospect there are reports that in fact that helped 37 00:02:03,440 --> 00:02:06,000 Speaker 2: with the Israeli defenses, which I think may be something 38 00:02:06,080 --> 00:02:07,080 Speaker 2: different in that region. 39 00:02:08,560 --> 00:02:11,520 Speaker 6: It does it shows you just how alienated they are 40 00:02:11,600 --> 00:02:14,680 Speaker 6: from Iran and how worried they are about the Iranian threat. 41 00:02:15,080 --> 00:02:17,680 Speaker 6: But at the same time, when Iran is not front 42 00:02:17,720 --> 00:02:20,320 Speaker 6: and center, and if we were cycle back to Gaza 43 00:02:20,440 --> 00:02:23,440 Speaker 6: or the West Bank, it's difficult to these countries to 44 00:02:23,520 --> 00:02:27,920 Speaker 6: move closer to Israel given their differences over the Palestinian issue. 45 00:02:28,040 --> 00:02:30,359 Speaker 6: So you've almost got a Middle East now that's operating 46 00:02:30,400 --> 00:02:34,600 Speaker 6: along different fault lines, the Israeli Iranian one directly, what's 47 00:02:34,600 --> 00:02:37,320 Speaker 6: happening in Gaza, what's happening in the North, which has 48 00:02:37,360 --> 00:02:41,600 Speaker 6: gotten worse in the last few days, between Israel and Isbela. 49 00:02:42,480 --> 00:02:45,320 Speaker 2: Many of us follow the news carefully, whether on TV 50 00:02:45,520 --> 00:02:48,360 Speaker 2: or reading the New York Times, Wall Street Journal, but 51 00:02:49,000 --> 00:02:51,440 Speaker 2: much of what's going on we don't see. It's below 52 00:02:51,480 --> 00:02:53,959 Speaker 2: the services were you were part of that. When you're 53 00:02:53,960 --> 00:02:56,560 Speaker 2: in the State Department with Colin pow you've been in 54 00:02:56,680 --> 00:02:59,600 Speaker 2: those rooms. Give us some sense of what you think 55 00:02:59,639 --> 00:03:01,600 Speaker 2: maybe going on that we don't know about it, and 56 00:03:01,600 --> 00:03:04,960 Speaker 2: particularly what the US role is or should be in this. 57 00:03:05,520 --> 00:03:05,680 Speaker 7: Well. 58 00:03:05,720 --> 00:03:07,760 Speaker 6: The big thing is the is the US is trying 59 00:03:07,800 --> 00:03:10,399 Speaker 6: to be reassuring to Israel at the same time they're 60 00:03:10,400 --> 00:03:13,600 Speaker 6: trying to urge them not to respond against Iran. The 61 00:03:13,680 --> 00:03:15,640 Speaker 6: parallel here, David is when I was at the White 62 00:03:15,639 --> 00:03:18,600 Speaker 6: House in nineteen ninety one, it was the opening. 63 00:03:18,320 --> 00:03:20,119 Speaker 7: Days of the go for Iraqi. 64 00:03:20,200 --> 00:03:23,959 Speaker 6: Scuds were landing on Israel, and we the Bush administration 65 00:03:24,040 --> 00:03:27,520 Speaker 6: Bush forty one prevailed upon the Israelis not to retaliate 66 00:03:27,560 --> 00:03:30,800 Speaker 6: directly against Iraq. We were worried that could break apart 67 00:03:30,880 --> 00:03:33,640 Speaker 6: this coalition we had built, but we were in a 68 00:03:33,760 --> 00:03:36,920 Speaker 6: very strong position. Then. We had half a million American 69 00:03:36,960 --> 00:03:39,280 Speaker 6: men and women in uniform over in the Middle East. 70 00:03:39,520 --> 00:03:40,760 Speaker 7: We were at the center of it. 71 00:03:41,280 --> 00:03:44,400 Speaker 6: The Biden administration does not have that kind of influence 72 00:03:44,840 --> 00:03:47,880 Speaker 6: over Israel right now, so I think It's hand is 73 00:03:48,440 --> 00:03:49,280 Speaker 6: somewhat weaker. 74 00:03:50,000 --> 00:03:51,640 Speaker 2: A turn fo Roe, if you went to Ukraine, there 75 00:03:51,640 --> 00:03:53,240 Speaker 2: are a lot of reports that the Russians are really 76 00:03:53,240 --> 00:03:55,720 Speaker 2: putting more and more pressure on Ukrainian forces in the 77 00:03:55,720 --> 00:03:58,120 Speaker 2: east of the country. And we have this debate going 78 00:03:58,120 --> 00:03:59,880 Speaker 2: in the United States and efforts in Europe to try 79 00:03:59,880 --> 00:04:02,360 Speaker 2: to give more support to Ukraine. How bad is the 80 00:04:02,400 --> 00:04:03,480 Speaker 2: situation do you think. 81 00:04:04,160 --> 00:04:07,280 Speaker 7: Well, it's bad, it's getting worse. The shortages of munitions, the. 82 00:04:07,240 --> 00:04:12,720 Speaker 6: Shortages of equipment is it's frustrating, it's tragic, it's irresponsible, 83 00:04:12,840 --> 00:04:16,560 Speaker 6: let's be honest. Hopefully the House of Representatives will correct 84 00:04:16,600 --> 00:04:19,719 Speaker 6: this and reopen this figot of aid to Ukraine, and 85 00:04:19,760 --> 00:04:22,520 Speaker 6: if they do, Ukraine will not be able to liberate 86 00:04:22,640 --> 00:04:24,960 Speaker 6: Crimea or the Eastern Lands. But they'll be able to 87 00:04:25,000 --> 00:04:27,840 Speaker 6: hold the Russians at bay, as they've pretty much done 88 00:04:27,920 --> 00:04:30,080 Speaker 6: for the best part of the last two years. 89 00:04:30,080 --> 00:04:30,880 Speaker 7: So this is critical. 90 00:04:30,920 --> 00:04:32,920 Speaker 6: This is critical for not just for Ukraine, but for 91 00:04:32,960 --> 00:04:36,280 Speaker 6: stability in Europe, and this is critical really for stability 92 00:04:36,320 --> 00:04:39,400 Speaker 6: in the world. Chinese are taking note what we're doing here, 93 00:04:39,440 --> 00:04:41,600 Speaker 6: and people are judging the United States. You know, when 94 00:04:41,600 --> 00:04:44,200 Speaker 6: you're a great power, you don't have the luxury of 95 00:04:44,520 --> 00:04:47,200 Speaker 6: doing things in isolation. What you do on one square 96 00:04:47,200 --> 00:04:50,799 Speaker 6: of the chessboard affects inevitably how you're perceived by friends 97 00:04:50,880 --> 00:04:52,720 Speaker 6: and foes alike everywhere else. 98 00:04:53,040 --> 00:04:55,200 Speaker 2: Richard, you always take a strategic view of these things, 99 00:04:55,240 --> 00:04:57,400 Speaker 2: not just tactical, but given what you just said about 100 00:04:57,440 --> 00:05:00,440 Speaker 2: Ukraine at this point, realistically, are we, if I can 101 00:05:00,480 --> 00:05:02,560 Speaker 2: put us together with Ukraine in the Western world, are 102 00:05:02,600 --> 00:05:04,480 Speaker 2: we playing for a tie rather than a win? As 103 00:05:04,480 --> 00:05:07,159 Speaker 2: you said, it's unlikely that Ukraine anytime soon is going 104 00:05:07,200 --> 00:05:08,839 Speaker 2: to liberate the eastern part of the country. 105 00:05:09,080 --> 00:05:10,760 Speaker 6: Look, tie is not as good as a win, but 106 00:05:10,800 --> 00:05:12,440 Speaker 6: it's a hell of a lot better than a loss. 107 00:05:12,880 --> 00:05:16,120 Speaker 6: And I believe given Russia's scale, given its war economy, 108 00:05:16,200 --> 00:05:19,599 Speaker 6: the best Ukraine can get for the foreseeable future through 109 00:05:19,760 --> 00:05:23,640 Speaker 6: military force is a tie. Then I think over time, 110 00:05:23,680 --> 00:05:26,240 Speaker 6: and this may have to wait, David, beyond Vladimir or Putin. 111 00:05:26,520 --> 00:05:29,599 Speaker 6: I think Ukraine, if it has close ties to the EU, 112 00:05:29,680 --> 00:05:32,320 Speaker 6: close ties to NATO, we continue to arm it can 113 00:05:32,400 --> 00:05:35,680 Speaker 6: play for a win, not through military liberation, but through 114 00:05:35,720 --> 00:05:39,279 Speaker 6: diplomacy and the use of economic coercion. So you almost 115 00:05:39,320 --> 00:05:42,120 Speaker 6: need to break this down in phases. For the foreseeable future, 116 00:05:42,480 --> 00:05:45,640 Speaker 6: Let's get a tie. Let's get a situation where Ukraine 117 00:05:45,640 --> 00:05:49,720 Speaker 6: can continue to exist as a viable, successful country, where 118 00:05:49,720 --> 00:05:53,400 Speaker 6: Putin is frustrated. Then over time we can get Ukraine 119 00:05:53,480 --> 00:05:54,480 Speaker 6: what's rightfully theirs. 120 00:05:55,400 --> 00:05:58,159 Speaker 2: So Richard will of course try to address long term investors, 121 00:05:58,160 --> 00:06:01,040 Speaker 2: big time investors here at Bloomberg. Give us your best 122 00:06:01,080 --> 00:06:02,919 Speaker 2: advice that you would give to investors right now, you 123 00:06:02,960 --> 00:06:04,880 Speaker 2: talk about the Middle East, you talk about Ukraine. By 124 00:06:04,920 --> 00:06:08,080 Speaker 2: the way, we haven't mentioned China with now new tariffs 125 00:06:08,080 --> 00:06:11,040 Speaker 2: on Chinese steel coming in in an election year, and 126 00:06:11,080 --> 00:06:13,480 Speaker 2: we have an election year which itself may pose some 127 00:06:13,560 --> 00:06:16,679 Speaker 2: real issues for the United States and even for financial markets. 128 00:06:16,760 --> 00:06:19,080 Speaker 2: If you're an investor, what do you need to have 129 00:06:19,200 --> 00:06:21,280 Speaker 2: on your dashboard. What do you need to be most 130 00:06:21,360 --> 00:06:22,040 Speaker 2: concerned about. 131 00:06:23,680 --> 00:06:26,279 Speaker 7: You need to have a seat belt and keep it fastened, David, 132 00:06:26,440 --> 00:06:30,440 Speaker 7: more than anything else. Look, you've got the two parties competing. 133 00:06:31,880 --> 00:06:36,200 Speaker 6: Over how tough they can be on China, over protectionism 134 00:06:36,240 --> 00:06:39,440 Speaker 6: to some extent, which is all problematic, and obviously it 135 00:06:39,520 --> 00:06:43,680 Speaker 6: has all sorts of consequences for inflation. The pressure will 136 00:06:43,680 --> 00:06:47,160 Speaker 6: be to titan flows across the border whatever, even though 137 00:06:47,160 --> 00:06:50,560 Speaker 6: that's a good thing, I would argue in terms of security. Also, again, 138 00:06:50,600 --> 00:06:53,599 Speaker 6: that could add to inflationary pressures if we suddenly don't 139 00:06:53,640 --> 00:06:54,799 Speaker 6: have so much. 140 00:06:54,680 --> 00:06:56,279 Speaker 7: Labor that's available. 141 00:06:56,560 --> 00:06:59,960 Speaker 6: I worry, David about the seventy five days between election 142 00:07:00,320 --> 00:07:03,560 Speaker 6: day and inauguration day. That's the period four years ago 143 00:07:03,600 --> 00:07:05,200 Speaker 6: when January sixth happened. 144 00:07:05,360 --> 00:07:06,960 Speaker 7: Imagine this is a close contest. 145 00:07:07,360 --> 00:07:11,160 Speaker 6: Imagine we have not just division and dysfunction, but political violence. 146 00:07:11,960 --> 00:07:14,320 Speaker 7: A lot of people around the world could get unnerved. 147 00:07:14,320 --> 00:07:17,120 Speaker 6: A lot of foes around the world might see that 148 00:07:17,160 --> 00:07:18,600 Speaker 6: as a moment of opportunity. 149 00:07:18,880 --> 00:07:21,120 Speaker 7: And then again after inauguration day. 150 00:07:20,960 --> 00:07:24,160 Speaker 6: What would be functional or dysfunctional is what's happening over 151 00:07:24,240 --> 00:07:27,200 Speaker 6: this aid bill. Is that an exception to the rule. 152 00:07:27,600 --> 00:07:30,000 Speaker 6: Will that be the rule after the election. So I 153 00:07:30,000 --> 00:07:32,400 Speaker 6: think there's lots of issues that obviously if mister Trump 154 00:07:32,440 --> 00:07:35,640 Speaker 6: water win, does he try to undo a lot of 155 00:07:35,640 --> 00:07:38,600 Speaker 6: the architecture in the world that has served this country 156 00:07:38,640 --> 00:07:40,800 Speaker 6: well over seventy five years. 157 00:07:41,000 --> 00:07:42,920 Speaker 3: Richard is always so very helpful to talk with you. 158 00:07:42,960 --> 00:07:43,320 Speaker 3: Thank you. 159 00:07:43,440 --> 00:07:47,040 Speaker 2: That is Richard has of Center View Partners. Market spent 160 00:07:47,120 --> 00:07:49,840 Speaker 2: the week trying to come to terms with that geopolitical risk, 161 00:07:49,880 --> 00:07:51,280 Speaker 2: and in the end it may have been the path of 162 00:07:51,320 --> 00:07:53,440 Speaker 2: the FED and some doubts about big tech that drove 163 00:07:53,480 --> 00:07:55,160 Speaker 2: equities as much as anything else, with the S and 164 00:07:55,200 --> 00:07:57,840 Speaker 2: P five hundred down three percent for the week to 165 00:07:57,920 --> 00:08:00,920 Speaker 2: ended forty nine sixty seven, dipping below that five thousand 166 00:08:00,920 --> 00:08:03,240 Speaker 2: mark for the first time since February and well below 167 00:08:03,280 --> 00:08:05,840 Speaker 2: the consensus year end number of our Bloomberg elves of 168 00:08:05,880 --> 00:08:09,360 Speaker 2: fifty one seventy. The Nasdaq did even worse, giving up 169 00:08:09,400 --> 00:08:11,400 Speaker 2: five and a half percent on the week, while the 170 00:08:11,480 --> 00:08:14,160 Speaker 2: yield on the tenure was up just under ten basis 171 00:08:14,160 --> 00:08:16,760 Speaker 2: points to end the week at four point six percent. 172 00:08:16,840 --> 00:08:19,480 Speaker 2: To take us through it all, welcome back now, Peter Krauss, 173 00:08:19,720 --> 00:08:21,720 Speaker 2: Chairman and CEO of Aperture. 174 00:08:21,320 --> 00:08:23,240 Speaker 3: Investors, Peters such a delight to have you with us. 175 00:08:23,280 --> 00:08:24,720 Speaker 2: Thank you. So give us your take on what the 176 00:08:24,760 --> 00:08:26,680 Speaker 2: markets went through, because we did have the geopolitics at 177 00:08:26,680 --> 00:08:28,320 Speaker 2: the beginning in the end, and then we had a 178 00:08:28,320 --> 00:08:29,800 Speaker 2: fair amount of speculation about the FED. 179 00:08:29,840 --> 00:08:32,160 Speaker 8: In between, well, there was some mixture. I agree with that. 180 00:08:32,480 --> 00:08:35,440 Speaker 9: I do think the geo politics kind of resolved itself 181 00:08:35,520 --> 00:08:40,280 Speaker 9: with Israel taking a somewhat modest approach to retaliation to 182 00:08:40,360 --> 00:08:43,679 Speaker 9: the Iran attack. I think the bigger issue is the 183 00:08:43,720 --> 00:08:47,520 Speaker 9: combination of how people perceive the Fed's behavior and what 184 00:08:47,559 --> 00:08:49,640 Speaker 9: the FED will do over the course of the year, 185 00:08:50,240 --> 00:08:53,800 Speaker 9: and how that interplays with the valuations in the marketplace. 186 00:08:54,400 --> 00:08:57,720 Speaker 9: Coming into the year, as was true last year, people 187 00:08:57,760 --> 00:08:59,920 Speaker 9: were quite optimistic that the FED was going to cut rates. 188 00:09:00,400 --> 00:09:03,440 Speaker 9: Inflation data actually early in the year looked like it 189 00:09:03,520 --> 00:09:05,520 Speaker 9: was benign and actually getting better, and then it got 190 00:09:05,559 --> 00:09:08,120 Speaker 9: strong and then the FED said no, I'm not going 191 00:09:08,160 --> 00:09:08,760 Speaker 9: to cut rates. 192 00:09:08,760 --> 00:09:11,880 Speaker 8: In the market ultimately was very unhappy about. 193 00:09:11,679 --> 00:09:14,480 Speaker 9: That, and so what I think we're seeing is people 194 00:09:14,600 --> 00:09:18,720 Speaker 9: reassessing their positions as a result of the FED saying 195 00:09:18,800 --> 00:09:21,280 Speaker 9: I'm not going to cut rates. There's also a scenario 196 00:09:21,800 --> 00:09:24,680 Speaker 9: that people believe could be happening that if the FED 197 00:09:24,720 --> 00:09:29,040 Speaker 9: doesn't cut rates and in fact companies reporting weaker earnings, 198 00:09:29,800 --> 00:09:32,640 Speaker 9: then the FED maybe behind the curve and could create 199 00:09:32,679 --> 00:09:33,240 Speaker 9: a recession. 200 00:09:33,640 --> 00:09:36,120 Speaker 8: And that's also causing people to take off. 201 00:09:36,000 --> 00:09:38,120 Speaker 9: Risk at the present time, and that may be some 202 00:09:38,160 --> 00:09:39,319 Speaker 9: of what we see in the tech world. 203 00:09:39,520 --> 00:09:42,520 Speaker 2: The FED says, at least it's concentrated on full employment 204 00:09:43,000 --> 00:09:45,880 Speaker 2: and inflation period, not so much worry about what happens 205 00:09:45,920 --> 00:09:49,079 Speaker 2: to corporations and the consequences of that. Do we believe them. 206 00:09:49,200 --> 00:09:52,640 Speaker 2: I mean, they haven't been too concerned about loosening financial conditions. 207 00:09:53,080 --> 00:09:57,880 Speaker 9: I think right now the economy is relatively strong and 208 00:09:58,200 --> 00:10:02,280 Speaker 9: it's actually in the numbers, and I think the FED, 209 00:10:02,640 --> 00:10:05,280 Speaker 9: when the economy is as strong, actually sticks to those 210 00:10:05,280 --> 00:10:06,080 Speaker 9: two principles. 211 00:10:06,559 --> 00:10:09,200 Speaker 8: If the economy really weak, then they would start. 212 00:10:08,960 --> 00:10:13,280 Speaker 9: Worrying about the impact that corporations might have on the 213 00:10:13,320 --> 00:10:16,400 Speaker 9: overall economy if in fact they started laying off workers, 214 00:10:16,720 --> 00:10:19,720 Speaker 9: and if in fact they had defaults on their securities 215 00:10:19,960 --> 00:10:22,520 Speaker 9: and we had real chaos in the market and the 216 00:10:22,559 --> 00:10:25,439 Speaker 9: equity market then would go down dramatically, and then I 217 00:10:25,480 --> 00:10:26,520 Speaker 9: think the FED would start. 218 00:10:26,320 --> 00:10:28,520 Speaker 8: Paying attention to that indicator as well. 219 00:10:28,640 --> 00:10:31,199 Speaker 9: But when the market and the economy is relatively strong. 220 00:10:31,320 --> 00:10:33,160 Speaker 9: The Fed's going to stick to its two principles. 221 00:10:33,280 --> 00:10:35,560 Speaker 2: The value of equity Designer stated is basically a discount 222 00:10:35,559 --> 00:10:38,880 Speaker 2: of future cash flow, which you're expected to do, and 223 00:10:38,920 --> 00:10:42,160 Speaker 2: that it's important what the discount rate is. So if 224 00:10:42,160 --> 00:10:44,600 Speaker 2: the interest date's higher, that means the stock values today 225 00:10:44,640 --> 00:10:46,600 Speaker 2: is lower, particularly with some of the stocks that are 226 00:10:46,600 --> 00:10:49,160 Speaker 2: expecting it in the out years not having it right away. 227 00:10:49,679 --> 00:10:51,880 Speaker 2: Is that a simple explanation for what may be going 228 00:10:51,920 --> 00:10:53,640 Speaker 2: on right now that we were going too far too 229 00:10:53,720 --> 00:10:55,080 Speaker 2: fast with the equity evaluations. 230 00:10:55,480 --> 00:10:58,840 Speaker 9: Well, it's certainly part of the explanation, but I think 231 00:10:59,000 --> 00:11:05,480 Speaker 9: it's maybe a little bit to one, you know, one indicator, 232 00:11:05,679 --> 00:11:07,360 Speaker 9: one dimensional, thank you, one dimensional. 233 00:11:07,640 --> 00:11:08,840 Speaker 8: I think it's I think. 234 00:11:08,720 --> 00:11:12,080 Speaker 9: What we're seeing is more sophisticated than that, or more 235 00:11:12,200 --> 00:11:13,000 Speaker 9: nuanced than that. 236 00:11:13,679 --> 00:11:17,040 Speaker 8: I think that earnings are going to go up. 237 00:11:17,120 --> 00:11:22,239 Speaker 9: The market is reflecting a relatively strong economy. The multiples 238 00:11:22,280 --> 00:11:25,320 Speaker 9: at which stocks trade, which is related to the discount rate, 239 00:11:25,520 --> 00:11:28,040 Speaker 9: that may be under pressure a bit. Remember we had 240 00:11:28,040 --> 00:11:30,960 Speaker 9: a pretty fast increase in stock prices at the beginning 241 00:11:30,920 --> 00:11:33,599 Speaker 9: of the year. Sp was up ten percent, NASDEK was 242 00:11:33,679 --> 00:11:36,760 Speaker 9: up twelve or thirteen percent. Even the tal which was lagging, 243 00:11:36,920 --> 00:11:39,280 Speaker 9: was up five or six percent in a short period 244 00:11:39,320 --> 00:11:41,439 Speaker 9: of time, and that's usually what you get for a 245 00:11:41,480 --> 00:11:44,640 Speaker 9: whole year. So I think that investors are taking a 246 00:11:44,640 --> 00:11:48,880 Speaker 9: breather effectively, and they're reacting to this lack of FED 247 00:11:49,040 --> 00:11:52,520 Speaker 9: enthusiasm for cutting rates. There's also another question of what 248 00:11:52,559 --> 00:11:54,320 Speaker 9: does the yield curve shape look like. 249 00:11:54,840 --> 00:11:56,520 Speaker 8: You know, the yield curve shape has been. 250 00:11:56,400 --> 00:11:59,480 Speaker 9: Inverted for a very long period of time relative to history. 251 00:12:00,320 --> 00:12:04,520 Speaker 9: That creates capital allocation that is not efficient, because when 252 00:12:04,520 --> 00:12:06,240 Speaker 9: you have interest rates in the short end that are 253 00:12:06,280 --> 00:12:09,120 Speaker 9: higher than industrates in the long end, investors then don't 254 00:12:09,160 --> 00:12:12,760 Speaker 9: take risk. In fact, you know they're piling into shorter 255 00:12:12,880 --> 00:12:15,760 Speaker 9: rates because they're more attractive than longer rates. That has 256 00:12:15,760 --> 00:12:19,760 Speaker 9: a tendency to effectively retard economic growth. That's the main 257 00:12:19,880 --> 00:12:22,640 Speaker 9: point of the FED actually having an inverted gild curve. 258 00:12:22,960 --> 00:12:24,600 Speaker 8: But they can't keep it like that forever. 259 00:12:25,040 --> 00:12:26,720 Speaker 2: Thank you so much for Peter Crass. It's really great 260 00:12:26,720 --> 00:12:30,960 Speaker 2: to have you always. Peter Crasse of Avererateuur Investors. Coming up, 261 00:12:31,040 --> 00:12:33,760 Speaker 2: we take a close look at the specific asset class 262 00:12:33,760 --> 00:12:37,079 Speaker 2: of real estate, commercial and otherwise with Kathy Marcus of 263 00:12:37,160 --> 00:12:38,280 Speaker 2: PGM real Estate. 264 00:12:38,600 --> 00:12:40,880 Speaker 5: A lot of the Gyman gloom about the sector has 265 00:12:40,880 --> 00:12:41,960 Speaker 5: been somewhat overblown. 266 00:12:44,000 --> 00:12:46,040 Speaker 2: This is Wall Street Week on Bloomberg. 267 00:12:50,440 --> 00:12:54,680 Speaker 1: This is Bloomberg Wall Street Week with David Weston from 268 00:12:54,800 --> 00:13:00,480 Speaker 1: Bloomberg Radio. 269 00:13:02,320 --> 00:13:04,720 Speaker 2: This is Wall Street Week. I'm David weston commercial real 270 00:13:04,840 --> 00:13:07,120 Speaker 2: estate investments. At least some of them have had a 271 00:13:07,160 --> 00:13:09,679 Speaker 2: hard time of late, but there may be signs that 272 00:13:09,720 --> 00:13:12,679 Speaker 2: we've seen the worst of it. With news this week 273 00:13:12,760 --> 00:13:15,480 Speaker 2: that Ken Griffin is going forward with his sixty two 274 00:13:15,600 --> 00:13:18,560 Speaker 2: story office tower on Park Avenue, and Bank of America 275 00:13:18,600 --> 00:13:21,560 Speaker 2: is saying it's seeing losses on its office property loans. 276 00:13:21,600 --> 00:13:24,560 Speaker 2: Easy for the perspective of a major real estate investor. 277 00:13:24,679 --> 00:13:28,280 Speaker 2: Welcome back now, Kathy Marcus, co CEO and Global Chief 278 00:13:28,320 --> 00:13:31,480 Speaker 2: Operating Officer of PGIUM Real Estate. Okay, so tell us 279 00:13:31,480 --> 00:13:33,160 Speaker 2: where we are on the cycle. Last time you were 280 00:13:33,160 --> 00:13:36,800 Speaker 2: with us, you said it's coming. Basically, the repricing is 281 00:13:36,840 --> 00:13:38,840 Speaker 2: not quite done yet. Where are we on the repricing? 282 00:13:39,600 --> 00:13:42,600 Speaker 5: In terms of the repricing, it's about twenty percent on 283 00:13:42,760 --> 00:13:46,640 Speaker 5: average across the sectors, and that can range from something 284 00:13:46,679 --> 00:13:50,280 Speaker 5: like manufactured housing that has had really almost zero declines 285 00:13:50,600 --> 00:13:54,000 Speaker 5: to office that's closer to thirty five percent, So at 286 00:13:54,000 --> 00:13:57,320 Speaker 5: peach and real estate, we've projected that by the end 287 00:13:57,360 --> 00:13:59,440 Speaker 5: of the day sort of peaked a tross, it'll be 288 00:13:59,480 --> 00:14:02,720 Speaker 5: probably on average twenty two percent. So for a twenty 289 00:14:02,840 --> 00:14:06,480 Speaker 5: we're very close, and so we're feeling a lot better. 290 00:14:06,640 --> 00:14:09,079 Speaker 5: And you know, from my perspective, a lot of the 291 00:14:09,160 --> 00:14:12,560 Speaker 5: gum and gloom about the sector has been somewhat overblown. 292 00:14:12,440 --> 00:14:14,080 Speaker 3: So I'm sure you're not a market timer. 293 00:14:14,080 --> 00:14:15,839 Speaker 2: At the same time, you have to have some sense 294 00:14:15,880 --> 00:14:18,400 Speaker 2: of that cycle, because if you wait too long, the 295 00:14:18,400 --> 00:14:19,480 Speaker 2: price can come back up. 296 00:14:19,440 --> 00:14:20,560 Speaker 3: And you lose some opportunities. 297 00:14:20,600 --> 00:14:22,600 Speaker 2: Do you have any sense of where it really makes 298 00:14:22,600 --> 00:14:24,000 Speaker 2: sense you need to get back in. 299 00:14:24,360 --> 00:14:27,640 Speaker 5: We're advising our investors that June thirtieth could likely be 300 00:14:27,800 --> 00:14:31,280 Speaker 5: a very attractive entry point, and at that point it's 301 00:14:31,320 --> 00:14:34,280 Speaker 5: possible that maybe you're a quarter early, maybe there's one 302 00:14:34,320 --> 00:14:37,480 Speaker 5: more quarter of some value declines, but in this case, 303 00:14:37,560 --> 00:14:40,080 Speaker 5: we really believe that it's better to be a quarter 304 00:14:40,120 --> 00:14:43,160 Speaker 5: early than a quarter late. There's broad consensus that there's 305 00:14:43,240 --> 00:14:46,160 Speaker 5: a lot of capital on the sidelines that is going 306 00:14:46,200 --> 00:14:47,960 Speaker 5: to come in as soon as they feel like the 307 00:14:48,040 --> 00:14:49,440 Speaker 5: values have bottomed. 308 00:14:49,800 --> 00:14:51,560 Speaker 3: We've heard some talk about a wall of maturities? 309 00:14:51,680 --> 00:14:53,480 Speaker 2: Is there a wall of matoritis coming where people are 310 00:14:53,520 --> 00:14:55,120 Speaker 2: going to all have to refine its at the same 311 00:14:55,160 --> 00:14:56,080 Speaker 2: time and have problems. 312 00:14:56,320 --> 00:14:58,120 Speaker 5: There is a wall of maturity? Is There's lots of 313 00:14:58,120 --> 00:15:01,280 Speaker 5: different numbers out there. One of the more popular numbers 314 00:15:01,320 --> 00:15:05,120 Speaker 5: is two point two trillion dollars of maturities that are 315 00:15:05,120 --> 00:15:07,920 Speaker 5: coming somewhere between two thousand and four and two thousand 316 00:15:08,240 --> 00:15:08,760 Speaker 5: and seven. 317 00:15:09,120 --> 00:15:09,960 Speaker 10: I've been at this. 318 00:15:10,000 --> 00:15:12,880 Speaker 5: For a little over thirty five years. In that time, 319 00:15:12,960 --> 00:15:15,560 Speaker 5: there have been at least three other times where a 320 00:15:15,640 --> 00:15:18,680 Speaker 5: wall of maturities was about to crush us any minute, 321 00:15:18,760 --> 00:15:21,400 Speaker 5: and it never came to fruition. And what happens in 322 00:15:21,400 --> 00:15:23,720 Speaker 5: real life is very different than what a chart on 323 00:15:23,800 --> 00:15:25,800 Speaker 5: a piece of paper is going to tell you. The 324 00:15:25,840 --> 00:15:29,360 Speaker 5: fact is that borrowers get ahead of their maturities. Loans 325 00:15:29,360 --> 00:15:33,120 Speaker 5: are extended, loans are restructured, and loans are repaid. And 326 00:15:33,160 --> 00:15:36,520 Speaker 5: even in a very capital constrained environment like we're in 327 00:15:36,600 --> 00:15:39,080 Speaker 5: right now, loans are being repaid every day. 328 00:15:40,000 --> 00:15:42,400 Speaker 2: We tend in the media, we tend to talk about 329 00:15:42,600 --> 00:15:46,720 Speaker 2: real estate or commercial real estate, but how specific is it? 330 00:15:46,800 --> 00:15:50,680 Speaker 2: Even within the office space, some offices presumably are created 331 00:15:50,720 --> 00:15:51,720 Speaker 2: more equal than others. 332 00:15:52,560 --> 00:15:55,640 Speaker 5: There's a lot of divergence in the office space. And 333 00:15:55,720 --> 00:15:59,120 Speaker 5: it's a really good point because in reality, especially if 334 00:15:59,160 --> 00:16:02,480 Speaker 5: you look at the public markets, the public markets are 335 00:16:02,520 --> 00:16:06,440 Speaker 5: pricing office the sector broadly as if it's a very 336 00:16:06,440 --> 00:16:10,000 Speaker 5: homogeneous sector, and it's not a homogeneous sector. It's never 337 00:16:10,080 --> 00:16:13,560 Speaker 5: been a homogeneous sector. But right now it's the least 338 00:16:13,560 --> 00:16:16,720 Speaker 5: homogeneous that it's ever been. And there are you know, 339 00:16:16,800 --> 00:16:19,640 Speaker 5: as many people have talked about winners and losers in 340 00:16:19,680 --> 00:16:21,760 Speaker 5: the office sector, and what do the winners look like. 341 00:16:22,000 --> 00:16:25,640 Speaker 5: The winners generally have some level of green certification. We've 342 00:16:25,680 --> 00:16:29,240 Speaker 5: seen recently that there's about a fifty percent difference in 343 00:16:29,280 --> 00:16:33,760 Speaker 5: the availability rate in office buildings that have some level 344 00:16:33,960 --> 00:16:38,800 Speaker 5: of green certification are close to transit. There's a huge 345 00:16:38,840 --> 00:16:41,880 Speaker 5: difference in how those assets are faring. 346 00:16:42,240 --> 00:16:44,280 Speaker 2: At what point does it make sense to invest in 347 00:16:44,320 --> 00:16:47,600 Speaker 2: an existing office building to bring it up upscale when 348 00:16:47,640 --> 00:16:50,160 Speaker 2: it comes to things like green and office air quality. 349 00:16:50,520 --> 00:16:54,040 Speaker 5: That's actually a very strong strategy right now, and in 350 00:16:54,080 --> 00:16:57,800 Speaker 5: particular in Europe. In Europe, you know, one of the 351 00:16:57,840 --> 00:17:01,280 Speaker 5: investment theses that we believe very strongly in is in 352 00:17:01,400 --> 00:17:06,720 Speaker 5: taking existing office stock in someplace like Paris and investing 353 00:17:06,760 --> 00:17:10,560 Speaker 5: to make it enable it to have the EESG certifications 354 00:17:10,800 --> 00:17:13,880 Speaker 5: that both tenants and then ultimately investors are looking for. 355 00:17:14,080 --> 00:17:16,800 Speaker 2: So we're going to talking about offices. What about multifamily dwellings, 356 00:17:16,800 --> 00:17:19,120 Speaker 2: I mean, where does that stand? Because we've seen some 357 00:17:19,160 --> 00:17:21,280 Speaker 2: sort of a suppression in the building of new homes. 358 00:17:21,400 --> 00:17:25,119 Speaker 5: Yes, for sure, we're seeing a suppression in supply of 359 00:17:25,200 --> 00:17:28,440 Speaker 5: new homes, but also in sales of existing homes, which 360 00:17:28,480 --> 00:17:30,560 Speaker 5: is really being driven by interest rates. 361 00:17:30,560 --> 00:17:31,960 Speaker 8: So we're very we have a. 362 00:17:31,880 --> 00:17:34,919 Speaker 5: Lot of conviction around the living sectors broadly, and in 363 00:17:34,960 --> 00:17:39,440 Speaker 5: particular in this idea of people renting for longer. More 364 00:17:39,520 --> 00:17:43,480 Speaker 5: people renting for longer, so there's a lot of growth 365 00:17:43,600 --> 00:17:48,680 Speaker 5: in the population cohort that tends to rent. Single family dwellings, 366 00:17:48,920 --> 00:17:53,040 Speaker 5: and single family dwellings from an ownership perspective, are less 367 00:17:53,080 --> 00:17:55,680 Speaker 5: and less attainable by people because of a lot of 368 00:17:55,760 --> 00:17:59,080 Speaker 5: trends that we've talked about, this longer, higher for longer 369 00:17:59,119 --> 00:18:01,320 Speaker 5: interest rate and environment, the fact that there's not a 370 00:18:01,320 --> 00:18:04,520 Speaker 5: lot of supply of new homes. All of that leads 371 00:18:04,560 --> 00:18:07,439 Speaker 5: to you know, less and less people being able to 372 00:18:07,680 --> 00:18:10,639 Speaker 5: afford to actually buy a single family home and therefore 373 00:18:10,680 --> 00:18:14,480 Speaker 5: they're going to rent one. So historically the pricing difference, 374 00:18:14,800 --> 00:18:19,280 Speaker 5: the cost between renting a single family home and owning 375 00:18:19,320 --> 00:18:21,879 Speaker 5: a single family home has been somewhere in the thirty 376 00:18:21,880 --> 00:18:24,680 Speaker 5: to thirty five percent range. Now, because of interest rates 377 00:18:24,720 --> 00:18:27,840 Speaker 5: and the cost of for sale housing, it's closer to 378 00:18:27,920 --> 00:18:31,960 Speaker 5: seventy percent. So it's really like an historic delta, and 379 00:18:32,000 --> 00:18:34,000 Speaker 5: it's going to take a while. It will come down, 380 00:18:34,280 --> 00:18:36,160 Speaker 5: but we think it's actually going to be years before 381 00:18:36,160 --> 00:18:37,760 Speaker 5: it even gets close to forty percent. 382 00:18:38,480 --> 00:18:38,920 Speaker 8: One of the. 383 00:18:38,840 --> 00:18:40,720 Speaker 2: Topics we taluched on this last time as well, and 384 00:18:40,760 --> 00:18:43,720 Speaker 2: that's data centers. We hear about data center's an awful lot. 385 00:18:43,840 --> 00:18:46,560 Speaker 2: Where is that market right now? Is it close to saturation? 386 00:18:47,200 --> 00:18:50,399 Speaker 5: I wouldn't say it's close to saturation. From a demand perspective, 387 00:18:50,680 --> 00:18:53,600 Speaker 5: there's still a tremendous amount of demand. There's a very 388 00:18:53,640 --> 00:18:56,200 Speaker 5: long lead time in terms of you know, bringing a 389 00:18:56,280 --> 00:18:58,919 Speaker 5: data center online a law if you will, It can 390 00:18:58,960 --> 00:19:00,800 Speaker 5: be years because first you have to get the power 391 00:19:01,440 --> 00:19:04,000 Speaker 5: and then you start building. So it really can be 392 00:19:04,080 --> 00:19:07,360 Speaker 5: and there are certain markets in the US where it's 393 00:19:07,480 --> 00:19:10,560 Speaker 5: years to get the power that you need. And if 394 00:19:10,560 --> 00:19:14,399 Speaker 5: you think about, you know, the investment thesis and the 395 00:19:14,440 --> 00:19:18,680 Speaker 5: demand side. You think about the ubiquity of cloud computing, 396 00:19:19,000 --> 00:19:23,280 Speaker 5: and you think about the continued adoption of AI. You know, 397 00:19:23,480 --> 00:19:27,040 Speaker 5: we see a long term demand fundamental here and you 398 00:19:27,080 --> 00:19:29,400 Speaker 5: know you also it's very much of a landlord's market 399 00:19:29,720 --> 00:19:33,200 Speaker 5: right now, and the rental increases have been double digit 400 00:19:33,240 --> 00:19:34,639 Speaker 5: and are expected to continue. 401 00:19:34,760 --> 00:19:36,600 Speaker 2: Okay, thank you so much, Kathy, It's always great to 402 00:19:36,600 --> 00:19:37,000 Speaker 2: have you with us. 403 00:19:37,000 --> 00:19:37,920 Speaker 3: Come back again, please. 404 00:19:38,080 --> 00:19:41,720 Speaker 2: That's Kathy Marcus of PGIM the the news this week 405 00:19:41,800 --> 00:19:44,159 Speaker 2: of cutbacks at Tesla. We're just the latest in a 406 00:19:44,240 --> 00:19:47,359 Speaker 2: series of setbacks in what seemed to be before a 407 00:19:47,400 --> 00:19:50,679 Speaker 2: steady march toward the world of electric vehicles. To provide 408 00:19:50,720 --> 00:19:53,760 Speaker 2: some perspective on that world and whether we may have gotten. 409 00:19:53,440 --> 00:19:54,840 Speaker 3: A little bit ahead of ourselves. 410 00:19:55,000 --> 00:19:58,320 Speaker 2: Welcome back now, Steve Ratner, chairman and CEO of Build Advisors, 411 00:19:58,440 --> 00:20:01,399 Speaker 2: who invest the personal and filmanthropic assets of our founder 412 00:20:01,440 --> 00:20:03,440 Speaker 2: and majority shareholder Michael Bloomberg. 413 00:20:03,480 --> 00:20:05,280 Speaker 3: Steve, welcome back. Great to have you here. Thanks so much. 414 00:20:05,359 --> 00:20:05,560 Speaker 9: David. 415 00:20:05,640 --> 00:20:07,320 Speaker 2: Of course, you know the auto industry so well. You 416 00:20:07,320 --> 00:20:09,720 Speaker 2: took it apart and put it back together for President Obama. 417 00:20:10,320 --> 00:20:13,159 Speaker 2: In fairness, you know, EV's where are we is it 418 00:20:13,160 --> 00:20:15,119 Speaker 2: as bad as it looks right now, because at first 419 00:20:15,119 --> 00:20:18,480 Speaker 2: it was really the cats mew and now the bloom 420 00:20:18,520 --> 00:20:19,119 Speaker 2: is off the roads. 421 00:20:19,160 --> 00:20:22,080 Speaker 4: Look, it's so like so many things. You start something new, 422 00:20:22,119 --> 00:20:25,000 Speaker 4: people get excited about it. You do get a new 423 00:20:25,000 --> 00:20:27,399 Speaker 4: often into a little bit of a rational exuberance to 424 00:20:27,480 --> 00:20:30,440 Speaker 4: borrow Allen Greenspan's famous phrase, And there were all kind 425 00:20:30,480 --> 00:20:33,359 Speaker 4: of resets, and so that's what's happening. You had a 426 00:20:33,400 --> 00:20:35,760 Speaker 4: lot of early adopters, you had a lot of enthusiasm, 427 00:20:36,320 --> 00:20:40,920 Speaker 4: and I think as to settle down, people have taken 428 00:20:40,960 --> 00:20:43,600 Speaker 4: a step back and taken a look around. As you know, 429 00:20:43,640 --> 00:20:46,800 Speaker 4: there's been a much greater emphasis on hybrids, which are 430 00:20:46,800 --> 00:20:49,480 Speaker 4: doing really well. So people haven't given up the idea 431 00:20:49,480 --> 00:20:52,639 Speaker 4: of an energy transition. They're just a little worried about EV's, 432 00:20:52,680 --> 00:20:54,359 Speaker 4: particularly about the range anxiety. 433 00:20:54,840 --> 00:20:58,320 Speaker 2: Representative Hayley Stevens of Michigan Service Steve Ratner on President 434 00:20:58,320 --> 00:21:02,000 Speaker 2: Obama's Auto Task Force and her district outside Detroit has 435 00:21:02,040 --> 00:21:04,840 Speaker 2: a lot at stake in the move to EVS. She 436 00:21:05,000 --> 00:21:09,359 Speaker 2: acknowledges that there's some hesitation after an initial spurt, but 437 00:21:09,480 --> 00:21:11,760 Speaker 2: says it should come as no surprise. 438 00:21:12,440 --> 00:21:17,040 Speaker 11: We were never expecting a linear trajectory of growth. We've 439 00:21:17,080 --> 00:21:21,760 Speaker 11: certainly seen big numbers coming out eighteen percent a million 440 00:21:21,800 --> 00:21:24,880 Speaker 11: EV sold. Very pleased to see where we are this 441 00:21:25,000 --> 00:21:27,440 Speaker 11: year technically over the last year and the year before that, 442 00:21:28,160 --> 00:21:30,720 Speaker 11: but we realized it's going to be a little bit 443 00:21:30,720 --> 00:21:33,919 Speaker 11: more of a curve than just that straight linear line. 444 00:21:34,560 --> 00:21:37,560 Speaker 2: It's not so much that consumers don't want evs as 445 00:21:37,640 --> 00:21:40,040 Speaker 2: it is that they want them at affordable prices. 446 00:21:40,200 --> 00:21:42,359 Speaker 3: According to JD Power Consumer. 447 00:21:42,040 --> 00:21:46,960 Speaker 12: Research, there are three key factors that consumers look for 448 00:21:47,119 --> 00:21:48,880 Speaker 12: to transition to an EV. 449 00:21:49,560 --> 00:21:51,440 Speaker 10: The first is is there an EV. 450 00:21:51,440 --> 00:21:55,240 Speaker 12: Substitute that meets their needs? The second is can they 451 00:21:55,280 --> 00:21:59,120 Speaker 12: afford it? And then the third will be infrastructure work 452 00:21:59,200 --> 00:22:02,760 Speaker 12: for them. So when we break down those first two 453 00:22:03,080 --> 00:22:06,560 Speaker 12: and we look at where manufacturers really have the most 454 00:22:06,640 --> 00:22:14,040 Speaker 12: impact today, we compare availability of evs to ICE, and 455 00:22:14,119 --> 00:22:17,679 Speaker 12: only forty three percent of the market is covered with 456 00:22:17,720 --> 00:22:21,520 Speaker 12: a viable substitute, and that's relative to consumer preferences. 457 00:22:21,520 --> 00:22:23,320 Speaker 10: Consumer preferences relative. 458 00:22:22,960 --> 00:22:25,480 Speaker 12: To the segments, the brands, and the price that they 459 00:22:25,520 --> 00:22:29,760 Speaker 12: want to pay. Premium segments have more market coverage at 460 00:22:29,800 --> 00:22:33,640 Speaker 12: seventy three percent. But now as we're poised to move 461 00:22:33,640 --> 00:22:38,400 Speaker 12: into that early majority phase. There's just not enough coverage 462 00:22:38,480 --> 00:22:40,480 Speaker 12: for mass market segments. 463 00:22:40,840 --> 00:22:43,160 Speaker 2: If part of the problem with evs are the prices, 464 00:22:43,359 --> 00:22:45,840 Speaker 2: why did the big automakers start with a high end 465 00:22:45,880 --> 00:22:49,400 Speaker 2: of the markets. Steve Rattner says it was understandable given 466 00:22:49,440 --> 00:22:52,240 Speaker 2: the history of the industry and some of the mistakes 467 00:22:52,320 --> 00:22:53,479 Speaker 2: made in the past. 468 00:22:54,080 --> 00:22:56,080 Speaker 4: Look, I think part of what went on in Detroit 469 00:22:56,119 --> 00:22:59,639 Speaker 4: specifically is the industry has been criticized for decades, has 470 00:22:59,640 --> 00:23:03,800 Speaker 4: been hind that it missed, missed SUVs and it's compacts 471 00:23:03,800 --> 00:23:06,680 Speaker 4: and miss system. It's that, and so they really wanted 472 00:23:06,720 --> 00:23:08,360 Speaker 4: to be ahead of the curve, and GM, going back 473 00:23:08,400 --> 00:23:11,280 Speaker 4: to its investment and crews and so forth, was determined 474 00:23:11,280 --> 00:23:13,240 Speaker 4: to be ahead of the curve. I think they also 475 00:23:13,280 --> 00:23:15,840 Speaker 4: made a determination, which I'm not sure was wrong, that 476 00:23:15,880 --> 00:23:18,439 Speaker 4: the early buyers were probably going to be high end 477 00:23:18,720 --> 00:23:21,439 Speaker 4: people because they had the income. They didn't matter as 478 00:23:21,560 --> 00:23:23,919 Speaker 4: much that the cost of the car was greater. They 479 00:23:23,920 --> 00:23:27,440 Speaker 4: had more commitment, perhaps to the energy transition aspect of it. 480 00:23:27,760 --> 00:23:31,280 Speaker 4: And making an inexpensive EV is tough. It's really tough. 481 00:23:31,320 --> 00:23:34,720 Speaker 4: Making anything small and in expensive in Detroit is tough, 482 00:23:34,760 --> 00:23:36,200 Speaker 4: but EV's especially tough. 483 00:23:36,560 --> 00:23:37,679 Speaker 3: So I don't think it was. 484 00:23:38,040 --> 00:23:40,879 Speaker 4: It may not have been absolutely perfectly pumped, but you 485 00:23:40,880 --> 00:23:42,400 Speaker 4: don't get everything one hundred percent right. 486 00:23:42,840 --> 00:23:45,560 Speaker 2: There is, of course a middle course for those in 487 00:23:45,600 --> 00:23:48,520 Speaker 2: the market for a new car that is environmentally friendly 488 00:23:48,920 --> 00:23:49,919 Speaker 2: or at least friendlier. 489 00:23:50,880 --> 00:23:55,639 Speaker 10: Last year, ED year over year growth was fifty percent. 490 00:23:55,800 --> 00:23:58,840 Speaker 12: Plug in hybrid year over year of growth was thirty 491 00:23:58,960 --> 00:24:04,680 Speaker 12: six percent. But evs outsold plug in hybrids four to one, 492 00:24:04,880 --> 00:24:07,840 Speaker 12: and the reason is because there are a lot more 493 00:24:08,119 --> 00:24:12,280 Speaker 12: evs available than plug and hybrids. You know, there's a 494 00:24:12,320 --> 00:24:16,680 Speaker 12: consumer element to this question, and then also the manufacturers. 495 00:24:16,680 --> 00:24:22,320 Speaker 12: Manufacturers have to balance their portfolio and meet the emission requirements. 496 00:24:23,040 --> 00:24:25,879 Speaker 10: But from a consumer standpoint, we do. 497 00:24:25,680 --> 00:24:29,920 Speaker 12: Collect data from both EV owners and plug in hybrid owners, 498 00:24:30,280 --> 00:24:34,160 Speaker 12: and our ownership data tells us that overall consumers are 499 00:24:34,560 --> 00:24:39,639 Speaker 12: very satisfied with evs, more so than he has in 500 00:24:39,680 --> 00:24:43,760 Speaker 12: almost every category that we measure, and especially in that 501 00:24:43,880 --> 00:24:47,840 Speaker 12: category of the total cost of ownership. It's much higher 502 00:24:48,080 --> 00:24:54,160 Speaker 12: satisfaction for evs. But that said, p has our great. 503 00:24:53,920 --> 00:24:58,640 Speaker 13: Introduction to evs, and our data shows that seventy percent 504 00:24:59,080 --> 00:25:02,800 Speaker 13: of plug and high owners are very likely to consider 505 00:25:02,960 --> 00:25:05,320 Speaker 13: stepping up into an EV and. 506 00:25:05,320 --> 00:25:07,359 Speaker 4: There are people who want to go right into evs 507 00:25:07,480 --> 00:25:09,840 Speaker 4: and as I said, a lot of the early adopters 508 00:25:09,920 --> 00:25:12,359 Speaker 4: have and there are others who are committed and believe 509 00:25:12,440 --> 00:25:14,400 Speaker 4: in climate change. Really they just simply want to save 510 00:25:14,440 --> 00:25:17,119 Speaker 4: money on fuel, doesn't matter, and they're going to take 511 00:25:17,160 --> 00:25:19,680 Speaker 4: the hybrid step. Hybrids have been around a long time, 512 00:25:19,760 --> 00:25:21,640 Speaker 4: and they again, they went through their. 513 00:25:21,600 --> 00:25:22,359 Speaker 3: Own sort of cycle. 514 00:25:22,400 --> 00:25:23,760 Speaker 4: They caught on for a little while and then you 515 00:25:23,840 --> 00:25:26,840 Speaker 4: kind of forgot about them. And now every carmaker is 516 00:25:26,880 --> 00:25:28,760 Speaker 4: going to have a hybrid version I think of most 517 00:25:28,800 --> 00:25:30,800 Speaker 4: of their cars, and I think it's great for people 518 00:25:30,840 --> 00:25:31,800 Speaker 4: to have a set of choices. 519 00:25:31,960 --> 00:25:33,760 Speaker 2: Steve Ratner is going to be staying with us as 520 00:25:33,800 --> 00:25:35,919 Speaker 2: we turn to the broader question of investing in a 521 00:25:35,960 --> 00:25:40,359 Speaker 2: world of higher rates and higher geopolitical risk. That's the 522 00:25:40,359 --> 00:25:42,440 Speaker 2: next time on Wall Street Week on Bloomberg. 523 00:25:43,960 --> 00:25:48,160 Speaker 1: This is Bloomberg Wall Street Week with David Weston from 524 00:25:48,280 --> 00:25:53,680 Speaker 1: Bloomberg Radio. 525 00:25:55,840 --> 00:25:57,520 Speaker 3: This is Wall Street Week. I'm David Weston. 526 00:25:57,600 --> 00:26:00,320 Speaker 2: Steve Ratner Will Advisors is still with the So, Steve, 527 00:26:00,359 --> 00:26:02,680 Speaker 2: we love to talk about investing. Get your thoughts. You 528 00:26:02,720 --> 00:26:04,639 Speaker 2: have an awful lot of money you're responsible for putting 529 00:26:04,640 --> 00:26:05,000 Speaker 2: to work. 530 00:26:05,280 --> 00:26:06,120 Speaker 3: So give us your. 531 00:26:06,000 --> 00:26:08,800 Speaker 2: Sense, particularly right now, with higher interest rates for longer, 532 00:26:08,880 --> 00:26:11,240 Speaker 2: something that you anticipated on Wall Street we a couple 533 00:26:11,240 --> 00:26:13,600 Speaker 2: of years ago, it's come to pass. How is that 534 00:26:13,600 --> 00:26:15,040 Speaker 2: affecting your investment decisions? 535 00:26:15,560 --> 00:26:18,040 Speaker 4: Yeah, I think we do have higher interest rates for longer, 536 00:26:18,080 --> 00:26:20,479 Speaker 4: and we have been cautious about the equity markets for 537 00:26:20,520 --> 00:26:23,680 Speaker 4: some time. Obviously that was not completely correct last year 538 00:26:23,680 --> 00:26:27,200 Speaker 4: in the first few months of this year, but I'm never. 539 00:26:27,080 --> 00:26:28,080 Speaker 3: Going to get it exactly right. 540 00:26:28,119 --> 00:26:31,080 Speaker 4: I feel comfortable with being in a somewhat defensive posture. 541 00:26:31,080 --> 00:26:33,639 Speaker 4: I think I've said on this program before, we pivoted 542 00:26:33,680 --> 00:26:36,800 Speaker 4: a lot toward credit because the risk award ratio between 543 00:26:36,840 --> 00:26:40,240 Speaker 4: credit and equities had really narrowed dramatically with interest rates 544 00:26:40,240 --> 00:26:42,800 Speaker 4: going higher and giving us a lot of opportunity and credit, 545 00:26:43,240 --> 00:26:47,800 Speaker 4: and that is still our position. The market has remained 546 00:26:47,800 --> 00:26:50,120 Speaker 4: more resilient in the face of a rising ten year 547 00:26:50,160 --> 00:26:51,640 Speaker 4: for the first part of the year than I would 548 00:26:51,720 --> 00:26:54,920 Speaker 4: have predicted the last week or so. Obviously this month, 549 00:26:54,960 --> 00:26:58,600 Speaker 4: even the market is certainly taking into account the fact 550 00:26:58,640 --> 00:27:01,359 Speaker 4: that the probability of FED rate cuts I think is 551 00:27:01,359 --> 00:27:04,359 Speaker 4: close to zero for the balance of the year, and 552 00:27:04,480 --> 00:27:07,920 Speaker 4: so we're going to maintain a reasonably defensive position. 553 00:27:08,160 --> 00:27:09,879 Speaker 3: What are you if it's going to do? 554 00:27:10,560 --> 00:27:13,639 Speaker 4: I would take slight Larry Summers didn't say exactly what 555 00:27:13,720 --> 00:27:15,920 Speaker 4: he was The headline said he said, but what I 556 00:27:15,960 --> 00:27:18,040 Speaker 4: think he actually said was a fifteen to twenty five 557 00:27:18,080 --> 00:27:20,760 Speaker 4: percent chance that the next move was up. And I'm 558 00:27:20,800 --> 00:27:22,240 Speaker 4: going to take the other side of that bet. I 559 00:27:22,320 --> 00:27:25,480 Speaker 4: think for the Fed to raise interest rates in this environment, 560 00:27:26,680 --> 00:27:29,600 Speaker 4: election year, no election year, Leome politics aren't even part 561 00:27:29,600 --> 00:27:33,600 Speaker 4: of it. I think it's would take an enormous market upheaval, 562 00:27:33,960 --> 00:27:37,160 Speaker 4: a revolt against the inflation numbers we're seeing now. That said, 563 00:27:37,200 --> 00:27:40,320 Speaker 4: the inflation numbers are not good. Inflation really does seem 564 00:27:40,359 --> 00:27:43,119 Speaker 4: stuck in the three and a half to four percent range. 565 00:27:43,960 --> 00:27:47,240 Speaker 4: Real wages, nominal wages arising a bit faster, which is 566 00:27:47,280 --> 00:27:49,680 Speaker 4: good for real wages, which is good for the real economy, 567 00:27:50,040 --> 00:27:52,479 Speaker 4: but doesn't really help you get inflation down, may keep 568 00:27:52,520 --> 00:27:54,680 Speaker 4: it from going up some more, and so the Fed 569 00:27:54,720 --> 00:27:57,159 Speaker 4: at some point may face a tough choice. There's no 570 00:27:57,280 --> 00:28:00,640 Speaker 4: question that the economy has been more resilient into higher 571 00:28:00,720 --> 00:28:05,200 Speaker 4: interest rates than anybody probably would have predicted, and Fed 572 00:28:05,200 --> 00:28:06,679 Speaker 4: at some point is going to have to deal with that. 573 00:28:06,960 --> 00:28:09,440 Speaker 2: Now, one of the things voke Larry one more time 574 00:28:09,760 --> 00:28:11,560 Speaker 2: has sat in this program more than once. Is part 575 00:28:11,560 --> 00:28:13,639 Speaker 2: of the reason why the economy seems to be more 576 00:28:13,680 --> 00:28:16,640 Speaker 2: resistant higher interstrateges is because he thinks that neutral rage, 577 00:28:16,680 --> 00:28:19,639 Speaker 2: which we can't exactly calibrate, is higher than what the 578 00:28:19,680 --> 00:28:21,840 Speaker 2: Fed thinks it is. Where are you in terms of 579 00:28:21,880 --> 00:28:24,080 Speaker 2: the longer term, not just what happens this year, but 580 00:28:24,119 --> 00:28:26,800 Speaker 2: in the longer term, are we looking at a higher 581 00:28:26,880 --> 00:28:29,840 Speaker 2: interest rate environment? And yes, in higher inflation environment, we're 582 00:28:29,840 --> 00:28:31,720 Speaker 2: not talking about two percent, we're talking two and a half. 583 00:28:31,760 --> 00:28:32,440 Speaker 3: We're talking at three. 584 00:28:32,560 --> 00:28:34,119 Speaker 4: Well, I'm going to leave the theory of all this 585 00:28:34,280 --> 00:28:37,000 Speaker 4: to Larry and Olivia Blanchard and all the real economists 586 00:28:37,040 --> 00:28:38,800 Speaker 4: to sit there and debate our start and all this 587 00:28:38,880 --> 00:28:42,600 Speaker 4: kind of stuff. But look, if you assume inflation is 588 00:28:42,640 --> 00:28:44,840 Speaker 4: even two percent in the long run, and you assume 589 00:28:44,880 --> 00:28:47,480 Speaker 4: investors want something like a two to three percent term 590 00:28:47,480 --> 00:28:50,360 Speaker 4: premium for taking the risk of what might happen over 591 00:28:50,400 --> 00:28:52,880 Speaker 4: a ten year or twenty or thirty year period, then 592 00:28:52,960 --> 00:28:56,200 Speaker 4: four or five percent interest rate on a risk free 593 00:28:56,200 --> 00:28:59,440 Speaker 4: basis is not unreasonable. And so I think we all 594 00:28:59,440 --> 00:29:02,640 Speaker 4: got a lot spoiled. We're worried about the other side, 595 00:29:02,680 --> 00:29:06,800 Speaker 4: the secularstagnation side during the during their first part of 596 00:29:06,840 --> 00:29:10,280 Speaker 4: the century. But now we're facing the opposite issue, and 597 00:29:10,320 --> 00:29:12,600 Speaker 4: I think we have to expect interest rates to hire 598 00:29:12,640 --> 00:29:14,960 Speaker 4: for longer, and that's a shock to the system, especially 599 00:29:15,400 --> 00:29:16,920 Speaker 4: for first time home buyers. 600 00:29:17,040 --> 00:29:19,800 Speaker 2: A shock to the system. One that may explain perhaps 601 00:29:19,960 --> 00:29:22,080 Speaker 2: your tency sy. Let's take a look at credit, because 602 00:29:22,120 --> 00:29:24,120 Speaker 2: in that world, credit might be a little bit more 603 00:29:24,120 --> 00:29:27,440 Speaker 2: attractive because there's a higher yield than for example, stocks, 604 00:29:27,440 --> 00:29:30,240 Speaker 2: to have a higher discount rate. At the same time, 605 00:29:30,360 --> 00:29:33,400 Speaker 2: as you said, private credits really interesting, is that getting 606 00:29:33,400 --> 00:29:35,600 Speaker 2: crowded because an awful lot of people are talking. 607 00:29:35,480 --> 00:29:37,720 Speaker 3: In private credit right now. It has gotten crowded. 608 00:29:37,840 --> 00:29:41,040 Speaker 4: Partly there's always supply and demand, and yes, it has 609 00:29:41,080 --> 00:29:43,840 Speaker 4: definitely gotten more crowded. I think when probably we talked 610 00:29:43,840 --> 00:29:46,320 Speaker 4: about it last time, was the sort of the golden 611 00:29:46,360 --> 00:29:49,240 Speaker 4: moment where you had high base rates and you had 612 00:29:49,280 --> 00:29:51,840 Speaker 4: high spreads and we were able to put money to 613 00:29:51,880 --> 00:29:54,959 Speaker 4: work at ten percent on a floating rate basis in 614 00:29:55,000 --> 00:29:57,520 Speaker 4: really secure credits, and that seemed to us to be 615 00:29:57,560 --> 00:30:01,080 Speaker 4: an exceptional opportunity. Base rates are still exactly the same, 616 00:30:01,480 --> 00:30:03,560 Speaker 4: but the spreads have narrowed one hundred and two hundred 617 00:30:03,560 --> 00:30:06,760 Speaker 4: basis points a bit. The banks have gotten a little 618 00:30:06,800 --> 00:30:08,880 Speaker 4: less worried about their own situation. They've come back in 619 00:30:08,920 --> 00:30:10,840 Speaker 4: the market, and as you said, there have been a 620 00:30:10,840 --> 00:30:13,120 Speaker 4: slew of private equity funds raised out there to do 621 00:30:13,200 --> 00:30:16,520 Speaker 4: private credit, and the demand hasn't quite been as strong. 622 00:30:16,600 --> 00:30:19,000 Speaker 4: Private equity is still pretty slow business at the moment, 623 00:30:19,400 --> 00:30:22,320 Speaker 4: and so the demand hasn't been quite as strong, and 624 00:30:22,360 --> 00:30:26,400 Speaker 4: so we haven't certainly reduced our private our private credit, 625 00:30:26,480 --> 00:30:29,080 Speaker 4: or any of our credit, but it's got certainly gotten 626 00:30:29,080 --> 00:30:30,360 Speaker 4: harder to find new things to do. 627 00:30:30,480 --> 00:30:33,320 Speaker 2: To add Steve tals U about geography, we talked about 628 00:30:33,320 --> 00:30:35,280 Speaker 2: in the past, We talked about China ed various times. 629 00:30:35,480 --> 00:30:37,640 Speaker 2: Your views have changed someone on that is, by the 630 00:30:37,640 --> 00:30:40,440 Speaker 2: way investors views have changed. As I look at the numbers, 631 00:30:40,800 --> 00:30:42,440 Speaker 2: what is attractive to you now right now? 632 00:30:42,480 --> 00:30:47,280 Speaker 4: Geographically, I think the US is still a pretty extraordinary, 633 00:30:47,800 --> 00:30:51,520 Speaker 4: pretty extraordinary place. The performance of this economy in the 634 00:30:51,560 --> 00:30:53,720 Speaker 4: face of everything going on here in the world and 635 00:30:53,760 --> 00:30:56,680 Speaker 4: so on, none of us, as I said, would likely 636 00:30:56,680 --> 00:31:00,680 Speaker 4: have predicted this four percent inflation three and a half. 637 00:31:00,680 --> 00:31:03,720 Speaker 4: It's not great, but it's not cataclysmic, and hopefully we 638 00:31:03,760 --> 00:31:07,680 Speaker 4: can get that down. But you have decent consumer spending 639 00:31:07,760 --> 00:31:10,280 Speaker 4: numbers that just came out this week. You have incredible 640 00:31:10,400 --> 00:31:12,800 Speaker 4: jobs numbers, as I said, you have real Way just 641 00:31:12,840 --> 00:31:15,840 Speaker 4: still going up a bit. I think the tech community 642 00:31:15,840 --> 00:31:19,200 Speaker 4: has kind of pulled itself together AI, which we can debate. 643 00:31:19,840 --> 00:31:21,560 Speaker 4: It's a little bit like EVS. You can debate is 644 00:31:21,560 --> 00:31:23,360 Speaker 4: it going to be big, is it going to be medium, whatever, 645 00:31:23,440 --> 00:31:25,800 Speaker 4: but it's going to be something. And the US is 646 00:31:25,960 --> 00:31:29,800 Speaker 4: clearly the leader by a wide margin in AI, and 647 00:31:29,880 --> 00:31:33,680 Speaker 4: so I still feel very optimistic here. China has become 648 00:31:33,720 --> 00:31:37,400 Speaker 4: a value stock basically that you can buy very quality 649 00:31:37,400 --> 00:31:40,400 Speaker 4: companies at ten times PE's that are still growing reasonably, 650 00:31:40,920 --> 00:31:44,000 Speaker 4: and that is just very attractive. The political risk is 651 00:31:44,120 --> 00:31:47,520 Speaker 4: enormous and it's scary, and I would certainly not want 652 00:31:47,520 --> 00:31:49,360 Speaker 4: to be a China at the multiples that we're there 653 00:31:49,400 --> 00:31:51,160 Speaker 4: two or three years ago, and we wouldn't be if 654 00:31:51,160 --> 00:31:54,560 Speaker 4: they were. I was just in India a few months ago. Definitely, 655 00:31:54,720 --> 00:31:57,000 Speaker 4: I think they're finally getting it together. But that stock 656 00:31:57,040 --> 00:31:59,400 Speaker 4: market has had a pretty big run, and so it 657 00:31:59,400 --> 00:32:02,720 Speaker 4: feels like it a bit price to perfection. And Europe, 658 00:32:02,720 --> 00:32:04,840 Speaker 4: as I've said many times on this show and elsewhere 659 00:32:05,840 --> 00:32:08,640 Speaker 4: is really not great for a whole slower reasons. 660 00:32:08,680 --> 00:32:09,520 Speaker 3: I'm not getting better. 661 00:32:09,840 --> 00:32:13,240 Speaker 4: They've just got one challenge after another and they're not 662 00:32:13,320 --> 00:32:15,520 Speaker 4: dealing with it terribly well. But they've also got a 663 00:32:15,560 --> 00:32:17,880 Speaker 4: tough hand to play, and so we've been very, very 664 00:32:17,920 --> 00:32:18,840 Speaker 4: absent from Europe. 665 00:32:18,960 --> 00:32:21,440 Speaker 2: You didn't mention Japan because we have some people come 666 00:32:21,480 --> 00:32:23,800 Speaker 2: on the program and say, Japan really is an opportunity 667 00:32:23,840 --> 00:32:26,080 Speaker 2: again where it wasn't for many many years. 668 00:32:26,280 --> 00:32:28,600 Speaker 3: Are you seeing as a potential opportunity. I should have 669 00:32:28,600 --> 00:32:29,200 Speaker 3: mentioned Japan. 670 00:32:29,280 --> 00:32:31,760 Speaker 4: I was also there in the last six or eight months, 671 00:32:32,120 --> 00:32:35,080 Speaker 4: and it's a bit like India. It's definitely come back, 672 00:32:35,120 --> 00:32:39,560 Speaker 4: gotten itself together for the first time. You've got wages growing, 673 00:32:39,640 --> 00:32:40,959 Speaker 4: you've got the economy growing. 674 00:32:41,440 --> 00:32:42,480 Speaker 3: But again you've. 675 00:32:42,280 --> 00:32:44,200 Speaker 4: Got the problem that the stock market does a pretty 676 00:32:44,200 --> 00:32:46,680 Speaker 4: good job of anticipating this sort of stuff, and so 677 00:32:46,720 --> 00:32:50,600 Speaker 4: the stock market has had a strong run, and so 678 00:32:50,720 --> 00:32:53,800 Speaker 4: it makes you a little cautious. The end has obviously 679 00:32:54,560 --> 00:32:56,920 Speaker 4: had a big depreciation against the dollar, which in a 680 00:32:56,920 --> 00:32:58,760 Speaker 4: way could be attractive if you want to bet on 681 00:32:58,800 --> 00:33:01,280 Speaker 4: the end or hedge it, I guess. But so we've 682 00:33:01,280 --> 00:33:04,200 Speaker 4: been we find Japan interesting, but a bit like India 683 00:33:05,080 --> 00:33:06,480 Speaker 4: might be a little bit late to the party. 684 00:33:07,080 --> 00:33:08,680 Speaker 2: Steve, it's such a treat having you here. Thank you 685 00:33:08,720 --> 00:33:11,160 Speaker 2: so much of the time. That's Steve Rattner of will 686 00:33:11,200 --> 00:33:16,120 Speaker 2: It Advisors. Conventional Wisdom, Paul Krugman writes, very heavily tends 687 00:33:16,120 --> 00:33:19,160 Speaker 2: to reflect the preferences and the interests of the elite. 688 00:33:19,280 --> 00:33:21,480 Speaker 2: A fair number of those preferences of the elite are 689 00:33:21,520 --> 00:33:25,560 Speaker 2: being upset these days, like the preference for investing in iPhones. 690 00:33:25,880 --> 00:33:28,760 Speaker 14: The overall theme this time around is a nearly ten 691 00:33:28,800 --> 00:33:33,560 Speaker 14: percent shipment decline on an annual basis for Apple. It's 692 00:33:33,920 --> 00:33:36,920 Speaker 14: the most significant decline of any of the phonemakers they track. 693 00:33:37,800 --> 00:33:40,840 Speaker 14: It indicates that Samsung is back in the number one 694 00:33:40,920 --> 00:33:43,280 Speaker 14: global sport ohone sales position, or. 695 00:33:43,240 --> 00:33:45,760 Speaker 2: The preference for buying a new Tesla, which it turns 696 00:33:45,760 --> 00:33:49,000 Speaker 2: out isn't strong enough to justify all those employees. 697 00:33:49,280 --> 00:33:51,040 Speaker 15: This is a company that ended last year with over 698 00:33:51,080 --> 00:33:53,800 Speaker 15: one hundred and forty thousand people, so assuming this is 699 00:33:53,880 --> 00:33:56,840 Speaker 15: company wide, we know it's a global According to Musk's 700 00:33:56,840 --> 00:33:59,800 Speaker 15: email to staff, that would be more than fourteen thousand 701 00:33:59,800 --> 00:34:00,320 Speaker 15: p people. 702 00:34:00,520 --> 00:34:03,520 Speaker 2: Things are certainly changing in the oil industry, as long 703 00:34:03,560 --> 00:34:05,680 Speaker 2: as most of us can remember, the world has had 704 00:34:05,720 --> 00:34:08,799 Speaker 2: something of preference for Middle Eastern oil, judging by how 705 00:34:08,840 --> 00:34:11,239 Speaker 2: much it's bought. But now we learn the United States 706 00:34:11,280 --> 00:34:14,359 Speaker 2: has actually passed Saudi Arabia, not to mention Russia as 707 00:34:14,400 --> 00:34:18,000 Speaker 2: the largest global oil producer. Speaking of Russia, there was 708 00:34:18,040 --> 00:34:20,640 Speaker 2: a day when we knew for certain the Republicans were 709 00:34:20,680 --> 00:34:22,840 Speaker 2: the ones to be the toughest on the Russians. 710 00:34:23,120 --> 00:34:26,239 Speaker 16: The ideas of freedom now are on trial. If they 711 00:34:26,280 --> 00:34:31,000 Speaker 16: don't work, there will be a reversion to not communism, 712 00:34:31,080 --> 00:34:34,160 Speaker 16: which has failed, but what I call a new despotism, 713 00:34:34,600 --> 00:34:37,680 Speaker 16: which would pose a mortal danger to the rest of 714 00:34:37,680 --> 00:34:40,680 Speaker 16: the world because it would be infected with the virus 715 00:34:40,760 --> 00:34:44,680 Speaker 16: of Russian imperialism, which of course has been a characteristic 716 00:34:44,719 --> 00:34:46,560 Speaker 16: of Russian foreign policy for centuries. 717 00:34:46,880 --> 00:34:49,200 Speaker 2: But now we have the de facto leader of the 718 00:34:49,200 --> 00:34:52,960 Speaker 2: Grand Old Party inviting mister Putin to invade European countries 719 00:34:53,040 --> 00:34:56,120 Speaker 2: if they don't pay as much as he'd like on defense. 720 00:34:56,440 --> 00:35:00,879 Speaker 5: You didn't pay your delinquent, he said, yes, let's say 721 00:35:00,960 --> 00:35:01,520 Speaker 5: that happened. 722 00:35:01,800 --> 00:35:03,080 Speaker 3: No, I would not protect you. 723 00:35:03,200 --> 00:35:05,680 Speaker 8: In fact, I would encourage them to do whatever the 724 00:35:05,760 --> 00:35:06,319 Speaker 8: hell they want. 725 00:35:06,360 --> 00:35:08,640 Speaker 3: You gotta pay you gotta pay your bills. 726 00:35:09,080 --> 00:35:11,200 Speaker 2: And maybe the biggest surprise of them all comes from 727 00:35:11,200 --> 00:35:14,360 Speaker 2: the world of college sports. Until now, we thought we 728 00:35:14,440 --> 00:35:18,239 Speaker 2: knew that, for whatever reason, audiences prefer to watch their 729 00:35:18,239 --> 00:35:22,080 Speaker 2: college basketball played by men rather than women. But thanks 730 00:35:22,080 --> 00:35:25,359 Speaker 2: in large part to Caitlin Clark, those days are gone. 731 00:35:25,560 --> 00:35:28,600 Speaker 2: Her University of Iowah Hawkeyes battled South Carolina for the 732 00:35:28,680 --> 00:35:32,720 Speaker 2: national championship in front of eighteen point seven million viewers, 733 00:35:33,160 --> 00:35:35,839 Speaker 2: which was not only more than watched any other men's game, 734 00:35:36,280 --> 00:35:39,400 Speaker 2: it was the largest audience for any basketball game men's 735 00:35:39,520 --> 00:35:43,040 Speaker 2: or women's, amateur or professional since twenty nineteen. 736 00:35:43,640 --> 00:35:46,759 Speaker 16: That's the next evolution of college women's best way. 737 00:35:47,080 --> 00:35:49,320 Speaker 2: Now, Ms Clark heads on to start for the Indiana 738 00:35:49,400 --> 00:35:52,760 Speaker 2: Fever of the WNBA, and we'll all get to see 739 00:35:52,800 --> 00:35:54,560 Speaker 2: what magic she can work. 740 00:35:54,320 --> 00:35:56,560 Speaker 17: There, no matter what the opponent was. I prepped the 741 00:35:56,600 --> 00:35:59,359 Speaker 17: exact same way. I prepared the same way. I brought 742 00:35:59,360 --> 00:36:02,120 Speaker 17: the same fire, I brought the same energy, And I 743 00:36:02,120 --> 00:36:03,759 Speaker 17: think that's the biggest thing going in the into my 744 00:36:03,880 --> 00:36:04,640 Speaker 17: w n B A career. 745 00:36:04,880 --> 00:36:05,279 Speaker 3: That does it. 746 00:36:05,360 --> 00:36:07,720 Speaker 2: For this episode of Wall Street Week, I'm David Weston. 747 00:36:07,800 --> 00:36:08,680 Speaker 2: This is Bloomberg. 748 00:36:08,920 --> 00:36:09,640 Speaker 3: See you next week. 749 00:36:10,880 --> 00:36:11,880 Speaker 17: Yeah, h 750 00:36:14,760 --> 00:36:14,800 Speaker 6: H