WEBVTT - President Biden's Future and the Equity Rally 0:00:00.080 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.960 --> 0:00:15.560 This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 0:00:15.600 --> 0:00:18.960 with Paul Sweeney. Join us each day for insight from 0:00:18.960 --> 0:00:23.160 the best in economics, finance, investment, and international relations. You 0:00:23.160 --> 0:00:26.520 can also watch the show live on YouTube. Visit the 0:00:26.520 --> 0:00:31.280 Bloomberg Podcast channel on YouTube to see the show weekday 0:00:31.280 --> 0:00:34.320 mornings from seven to ten am Eastern from our global 0:00:34.360 --> 0:00:39.000 headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 0:00:39.360 --> 0:00:42.920 or anywhere else you listen and always I'm Bloomberg Radio, 0:00:43.080 --> 0:00:47.280 the Bloomberg Terminal, and the Bloomberg Business App. Well, I'm 0:00:47.320 --> 0:00:48.919 stressed up by the why don't you bring in our 0:00:48.920 --> 0:00:50.920 guest here? I mean, Gargey came in today just to 0:00:51.640 --> 0:00:53.880 you know, hang and you know she's a Blackrock and 0:00:53.920 --> 0:00:55.240 it's an important conversation. 0:00:55.480 --> 0:00:58.880 Gugy Chrawdrey, chief investment and Portfolio Strategists of the Americas 0:00:58.880 --> 0:01:00.400 for black Rock. But more point and that she was 0:01:00.440 --> 0:01:03.920 at Merrill Lynch, she was at Jeffrey's a company. But 0:01:04.080 --> 0:01:08.039 she's one of these people to that runs marathons, ultra marathons. 0:01:08.680 --> 0:01:10.440 I mean, who does that stuff? Where are they runing to. 0:01:10.440 --> 0:01:11.560 Where where they were from. 0:01:11.560 --> 0:01:14.640 I don't get it all exactly. GREGI thanks so much 0:01:14.680 --> 0:01:17.920 for joining us here in our studio. As John Tucker 0:01:18.000 --> 0:01:20.560 was just reporting here all time highs again yesterday for 0:01:20.640 --> 0:01:24.560 these markets. How do you think about just the opportunities 0:01:24.600 --> 0:01:27.080 in markets as you think about strategy stepping back and 0:01:27.080 --> 0:01:31.480 look about stocks, bonds, alternatives, you know, treasuries, I've got 0:01:31.480 --> 0:01:34.120 the Federal Reserve, I've got earning starting this week. Where 0:01:34.120 --> 0:01:36.119 do you guys start at a thirty thousand foot level. 0:01:36.440 --> 0:01:39.400 Sure, good morning, it's great to be here, lovely studios. 0:01:40.400 --> 0:01:43.120 So I will answer that question with the comment that 0:01:43.160 --> 0:01:46.319 you made about marathon running. It's all about the long 0:01:46.440 --> 0:01:51.640 run and staying in the markets with a diversified portfolio 0:01:51.800 --> 0:01:54.920 is the way in which we're thinking about investing right now. 0:01:54.920 --> 0:01:58.320 We just came out with our media outlook yesterday, our 0:01:58.360 --> 0:02:00.800 media investment Directions, and one of the things that we 0:02:00.920 --> 0:02:04.800 talk about there is that despite the very strong rally 0:02:04.800 --> 0:02:07.279 that we've seen so far here today in the equity markets, 0:02:07.360 --> 0:02:10.200 especially in the US, we certainly think that continues to 0:02:10.240 --> 0:02:13.280 be pockets of opportunity and we think investors should be 0:02:13.639 --> 0:02:16.480 focused on that quality parts of the equity markets and 0:02:16.520 --> 0:02:20.120 the core of your portfolio. What does quality mean, profitability, 0:02:20.320 --> 0:02:23.920 low leverage, and really stable earnings growth, And obviously we 0:02:24.000 --> 0:02:27.119 see that in some of those tech and tech adjacent centers. 0:02:27.400 --> 0:02:30.600 Looking over to fixed income income is king and you 0:02:30.639 --> 0:02:33.480 can really get very robust, you know, six to seven 0:02:33.520 --> 0:02:36.880 percent income in a variety of sources. So that's really 0:02:36.919 --> 0:02:39.080 the thirty thousand foot view. And I'd also say that 0:02:39.120 --> 0:02:41.799 investors are really looking for diversification right now. 0:02:41.880 --> 0:02:44.680 The reason, like a Davos manifest here, what in God's 0:02:44.760 --> 0:02:53.160 name is fundamental transformation? You got to be not markets. 0:02:54.880 --> 0:02:57.919 Well, what we mean by fundamental transformation is that there 0:02:57.919 --> 0:03:00.360 are a few things, as we were just talking about, 0:03:00.360 --> 0:03:02.000 when we looked at what are the stocks that are 0:03:02.000 --> 0:03:03.800 trading the most in the morning, and there are some 0:03:03.960 --> 0:03:07.600 companies that are driving changes that we think will be 0:03:07.760 --> 0:03:12.200 here for driving inflation, driving growth, driving returns, driving profit margins, 0:03:12.240 --> 0:03:15.400 driving productivity for a long time. And one of them 0:03:15.919 --> 0:03:17.920 is related to AI. And we spend a lot of 0:03:17.960 --> 0:03:21.960 time talking about the long term opportunities both with AI 0:03:22.080 --> 0:03:25.560 in terms of semiconductors but also in the power needs 0:03:25.600 --> 0:03:26.000 of stale. 0:03:26.040 --> 0:03:27.680 How do you respond, I don't mean to interrupt it. 0:03:27.680 --> 0:03:29.800 This is this is what everybody on Global Wall Street 0:03:29.800 --> 0:03:32.359 wants to know. I'm going to suggest black Rock as 0:03:32.360 --> 0:03:35.760 a more conservative passive, a little bit of active by 0:03:35.880 --> 0:03:39.040 side shop. Goldben Sachs is a cell side shop, and 0:03:39.080 --> 0:03:42.120 they're going to generate an opinion. Somebody at Golden Sacks 0:03:42.160 --> 0:03:45.520 in the last forty hours is basic MAIA editorialized Paul 0:03:46.000 --> 0:03:49.720 AI is BS. How do you respond to that? They 0:03:49.760 --> 0:03:55.240 say there's no provable, identifiable downstream success with AI. How 0:03:55.280 --> 0:03:56.400 does black Rock respond? 0:03:56.760 --> 0:03:58.560 So, one of the things that I would say is, 0:03:58.720 --> 0:04:01.680 right now, when we look at the things that AI 0:04:01.840 --> 0:04:04.800 can do, whether that's just making your PowerPoint deck or 0:04:04.880 --> 0:04:08.960 whether that's in healthcare and looking at your mammogram results, 0:04:09.280 --> 0:04:11.920 this is just the beginning. We didn't know about chat, GPT, 0:04:12.040 --> 0:04:14.520 and there was no LLM you know, three four It 0:04:14.560 --> 0:04:16.280 was there, but it wasn't being as used three or 0:04:16.279 --> 0:04:19.119 four years ago. This is the beginning. In nineteen ninety 0:04:19.240 --> 0:04:21.760 no one was using the internet. Today in ninety percent 0:04:21.800 --> 0:04:24.120 of the world's on the Internet. This is just the 0:04:24.160 --> 0:04:27.360 beginning of what AI will do, not just in semiconductors, 0:04:27.640 --> 0:04:31.240 but across the stack, whether that be in financials, whether 0:04:31.279 --> 0:04:33.760 that be in healthcare, whether that be obviously in technology. 0:04:34.160 --> 0:04:36.960 So I you know, obviously people can have their opinions, 0:04:36.960 --> 0:04:40.080 and I think it's great to have two sided markets. 0:04:40.320 --> 0:04:42.599 I think that's what makes a buyer or seller. We 0:04:42.839 --> 0:04:46.760 like that, we encouraged that and that what's But at 0:04:46.800 --> 0:04:49.920 the same time, we definitely think that there are some major, 0:04:50.040 --> 0:04:53.279 as we call them, structural transformations, off which AI is one, 0:04:53.680 --> 0:04:56.120 Demographics is another one, and we talk a little bit 0:04:56.120 --> 0:04:58.520 about the opportunities in India as a result of that. 0:04:59.440 --> 0:05:01.800 Geopology is another one that we spend a little bit 0:05:01.839 --> 0:05:04.240 of time talking about as well. And obviously one of 0:05:04.240 --> 0:05:06.960 the things that I started off by talking about was 0:05:07.040 --> 0:05:09.320 the need for income is a result of some of 0:05:09.360 --> 0:05:10.760 these demographic shifts. 0:05:11.360 --> 0:05:17.320 I NDA the I shares MSCI India ETF. Yes, give 0:05:17.400 --> 0:05:19.800 us the India call. I think I understand it from 0:05:19.839 --> 0:05:23.000 the super macro level. Right, last twenty twenty five years 0:05:23.040 --> 0:05:24.800 of China, maybe the next twenty twenty five years will 0:05:24.800 --> 0:05:27.680 be India. That's as far as I go. How do 0:05:27.680 --> 0:05:28.839 you get Look, it's. 0:05:28.680 --> 0:05:31.000 Not just about being the next China, and I actually 0:05:31.080 --> 0:05:34.280 would want investors to move away from that thing. I 0:05:34.360 --> 0:05:37.159 think it's really about a country that is doing three 0:05:37.200 --> 0:05:39.440 things right now which makes it appealing to invest us. 0:05:39.520 --> 0:05:43.280 Number one, of course, the young demographic population. You have 0:05:43.320 --> 0:05:46.080 a country of people where majority are between that age 0:05:46.120 --> 0:05:48.960 of twenty five and forty five, which especially when you 0:05:49.000 --> 0:05:52.279 look at the developed markets, is not the case. Second, 0:05:52.400 --> 0:05:55.719 it's the growth of infrastructure. It's what the government is 0:05:55.720 --> 0:05:59.520 putting in for infrastructure right now to make the country 0:05:59.760 --> 0:06:04.760 more productive and enhance productivity. Third is that Indian equities 0:06:04.880 --> 0:06:08.960 for either US investors are actually more importantly, Indian investors 0:06:09.279 --> 0:06:12.000 are really under own. So there is the shift that's 0:06:12.040 --> 0:06:14.600 going to happen over the next few years and decades 0:06:14.640 --> 0:06:17.120 even where more and more investors are going to go 0:06:17.440 --> 0:06:20.440 into their own domestic market. So I think all of 0:06:20.480 --> 0:06:23.120 that leads to both a short and a long term 0:06:23.160 --> 0:06:26.080 story that we really like. And investors have been pouring 0:06:26.240 --> 0:06:27.880 into i NDA this year. 0:06:28.360 --> 0:06:31.159 Come back. This has been good. Okay, we'd love to 0:06:31.160 --> 0:06:35.160 have you in as we can GUARDI chottery with us 0:06:35.160 --> 0:06:37.880 a black rock today. Thank you so much, greatly. I 0:06:38.080 --> 0:06:51.200 appreciate it. There's something going on here, folks, whether it's 0:06:51.240 --> 0:06:55.800 France or it's London, United Kingdom, and frankly India is 0:06:55.839 --> 0:06:58.720 Guardi Chottery was mentioned. There's something going on this summer 0:06:59.320 --> 0:07:03.159 about democracy and vote, which is a good setup for 0:07:03.279 --> 0:07:08.320 Henrietta Treys. She is the best at the Pulse in Washington. 0:07:08.680 --> 0:07:13.160 Henrietta the trays radar at Veda Partners. What is your 0:07:13.240 --> 0:07:16.200 radar searching for this Wednesday morning. 0:07:18.000 --> 0:07:20.520 I continue to be focused on all of the members 0:07:20.680 --> 0:07:25.000 and understanding where the next shoe is that's got to drop. Obviously, 0:07:25.120 --> 0:07:28.320 last night we got Senator Bennett, Democrat from Colorado, coming 0:07:28.320 --> 0:07:30.880 out saying that President Biden has got to make the 0:07:30.920 --> 0:07:34.000 decision to step down. I understand that the President has 0:07:34.040 --> 0:07:38.200 made this a sort of elites versus the rabble situation 0:07:38.400 --> 0:07:41.080 where he's saying the voters want Biden and it's the 0:07:41.080 --> 0:07:44.080 elites who turned against him. And what's ironic is I 0:07:44.200 --> 0:07:47.520 literally wrote a note the exact same hour as he 0:07:47.560 --> 0:07:50.560 wrote his, with the exact set, with the exact opposite takeaway. 0:07:50.760 --> 0:07:54.600 The rank and file democrats across the country, independence moderates, 0:07:54.640 --> 0:07:58.320 and particularly female voters have said repeatedly all year long 0:07:58.680 --> 0:08:01.600 they do not want another for Joe Biden. They do 0:08:01.600 --> 0:08:03.880 not believe that he is up to the task. And 0:08:03.920 --> 0:08:05.960 it's been the elites who have said, you know what, 0:08:05.960 --> 0:08:08.119 we're gonna stick with this guy. The senators are behind 0:08:08.120 --> 0:08:10.360 in the House members behind him, and now both tithes 0:08:10.400 --> 0:08:14.480 are shifting, and I'm really just watching which senators, you know, 0:08:14.560 --> 0:08:18.400 from an office or a chamber where Biden operated for 0:08:18.440 --> 0:08:21.480 thirty six years, is going to make the decision to say, hey, 0:08:21.520 --> 0:08:23.400 you know what, thank you so much for your service, 0:08:23.400 --> 0:08:25.440 It's time to move on. That's really the only thing 0:08:25.480 --> 0:08:26.920 that matters right now. I think we're about a week 0:08:26.960 --> 0:08:29.200 and a half away, but that's that's the most important 0:08:29.200 --> 0:08:30.000 thing in DC right. 0:08:29.880 --> 0:08:33.560 Now, Henrietta. Is it in fact President Biden's decision and 0:08:33.600 --> 0:08:34.320 his alone? 0:08:36.000 --> 0:08:38.520 Yeah, pretty much. I mean a big focus in DC 0:08:38.720 --> 0:08:43.200 right now is on the process. So specifically, where does 0:08:43.240 --> 0:08:46.680 the campaign fundraising go, Where do the dollars and the 0:08:46.679 --> 0:08:50.760 Biden for President pack go? How do you migrate over 0:08:50.880 --> 0:08:53.640 the support of all the delegates that are now you know, 0:08:53.720 --> 0:08:57.160 technically pretty locked in for Biden. Who releases them? And 0:08:57.240 --> 0:09:00.680 that's that's up to President Biden. That's his decision alone 0:09:00.800 --> 0:09:04.840 to make. He's got a really small core of advisors 0:09:04.880 --> 0:09:06.720 who are working with him on that. But the main 0:09:06.800 --> 0:09:10.880 question is just operational, do we move forward with Kamala Harris. 0:09:10.920 --> 0:09:13.680 Do we move to an open democratic process with a 0:09:13.880 --> 0:09:16.720 sort of quasi primary, or does Biden stay in the race. 0:09:16.760 --> 0:09:19.320 And for the Biden team, their answer is we stay 0:09:19.320 --> 0:09:22.079 in the race. We continue to fight this fight, and 0:09:22.840 --> 0:09:25.400 we're in the best position to win. What's ironic is 0:09:25.400 --> 0:09:29.160 that the defectors in DC who have come out thus far, 0:09:29.320 --> 0:09:33.160 seven House members and just a handful of Senators are 0:09:33.200 --> 0:09:36.000 basically saying, you are not the guy. We want your 0:09:36.040 --> 0:09:38.560 campaign dollars to be spread around. We have others waiting 0:09:38.559 --> 0:09:41.080 in the wings. I mean, an underreported narrative of this 0:09:41.120 --> 0:09:43.959 whole story is that Democrats have been raising boat loads 0:09:43.960 --> 0:09:47.320 of money since the debate record halls. They raised record 0:09:47.360 --> 0:09:50.439 halls when Trump was indicted on thirty four felon accounts. 0:09:50.600 --> 0:09:52.360 So there is plenty of money to go around. It 0:09:52.480 --> 0:09:54.720 just is around sort of unlocking it and moving it 0:09:54.760 --> 0:09:55.800 on to the next unitate. 0:09:56.520 --> 0:09:59.800 Timing you mentioned a week and a half give us 0:09:59.840 --> 0:10:03.560 a sense of when we really really really have to 0:10:03.600 --> 0:10:06.920 have a decision and a path for the Democratic. 0:10:06.480 --> 0:10:11.520 Party really really is like August ninth, That's when we 0:10:11.559 --> 0:10:17.160 really really need a new nominee. The expectation and sort 0:10:17.200 --> 0:10:21.520 of the adjuta on the investment side, watching the DC 0:10:21.760 --> 0:10:24.280 side is always brought. I mean, anybody who's been through 0:10:24.280 --> 0:10:27.600 a debt ceiling countdown or a government shutdown countdown knowns 0:10:27.679 --> 0:10:28.920 you know if you just sort of like have a 0:10:28.920 --> 0:10:29.880 steely spine when it. 0:10:29.880 --> 0:10:30.440 Comes to DC. 0:10:31.880 --> 0:10:34.560 This is NATO week, right, So everything requires that the 0:10:34.559 --> 0:10:38.160 President have a really strong presentation the United States of 0:10:38.200 --> 0:10:41.160 the song, strong presentation, seventy fifth anniversary, all that, But 0:10:41.400 --> 0:10:45.559 August ninth is really the deadline, the the end time. 0:10:45.640 --> 0:10:48.080 And there's so much out front here. It's domestic, like 0:10:48.080 --> 0:10:51.960 the Republican Convention in Milwaukee in that Terry Aynes and others, 0:10:51.960 --> 0:10:54.880 Henry in the Tray's and we value your opinions so much, 0:10:55.440 --> 0:11:01.120 have said polls, polls, polls. Are there any definitive holes yet? 0:11:01.480 --> 0:11:04.840 Or what pole to come is the one that matters 0:11:04.840 --> 0:11:05.920 for Henrietta Trays. 0:11:07.520 --> 0:11:10.079 I mean, honestly, the fact that I'm looking at poles 0:11:10.080 --> 0:11:12.320 from New York should be shocking to the Biden team. 0:11:12.640 --> 0:11:15.520 It used to be the situation where Joe Biden could 0:11:15.600 --> 0:11:18.240 run his state and Donald Trump was losing the one 0:11:18.280 --> 0:11:20.920 that he came from. Now it's precisely the opposite now, 0:11:20.960 --> 0:11:23.719 Donald Trump is, you know, making New York potentially a 0:11:23.800 --> 0:11:26.280 purple state the first time in twenty five years, and 0:11:26.360 --> 0:11:29.400 Joe Biden's down by seven points in Pennsylvania for your 0:11:29.480 --> 0:11:34.360 latest pole. I mean, the flip is everywhere New Hampshire, 0:11:34.880 --> 0:11:36.320 soda leading is all over. 0:11:36.520 --> 0:11:38.920 But you're incredibly wired. I mean, she has spies in 0:11:38.960 --> 0:11:41.240 the White House. I mean, Paul, it's unbelo. She's got 0:11:41.360 --> 0:11:45.240 microphones in every room, in the green room, the Lincoln bedroom, 0:11:45.679 --> 0:11:49.440 in all Henrietta trays. When they say you're down seven 0:11:49.520 --> 0:11:54.839 points in Pennsylvania, how does the Biden apparatus respond. 0:11:56.760 --> 0:11:59.640 There's they're honestly on this one. They're ignoring the pole. 0:12:00.040 --> 0:12:03.720 They're saying, we remain competitive. If they do migrate off 0:12:03.720 --> 0:12:06.200 that narrative, it's to say we are the best positioned 0:12:06.280 --> 0:12:10.200 to win. They're running against hypothetical candidates which with much 0:12:10.240 --> 0:12:13.840 lower name recognition, whether that's Gavin Newsome, Gretchen Whitmer, or 0:12:13.840 --> 0:12:16.000 even Kamala Harris, who's that you know, got a six 0:12:16.040 --> 0:12:18.480 percent of the population that doesn't know who she is 0:12:18.760 --> 0:12:22.040 versus three percent for Trump and Biden. So basically they 0:12:22.240 --> 0:12:25.720 just keep moving the narrative as frequently as possible and 0:12:25.760 --> 0:12:28.560 sort of cherry picking their opportunities, which is not a 0:12:28.559 --> 0:12:29.200 winning argument. 0:12:29.640 --> 0:12:33.000 What kind of convention will the Democrats have here? 0:12:34.240 --> 0:12:37.240 It's going to be loud. Yeah, I'm out of consensus 0:12:37.320 --> 0:12:39.240 on this, but I do not think that Biden will 0:12:39.280 --> 0:12:42.200 be the nominee in October. It's going to be in November. 0:12:42.880 --> 0:12:45.319 I think that right now we have you know, three 0:12:45.360 --> 0:12:48.080 and a half, almost four months worth of the campaign 0:12:48.160 --> 0:12:51.280 to go. The benefit of right now is that we 0:12:51.320 --> 0:12:54.720 are in you know, all time record high TSA, travel 0:12:54.920 --> 0:12:59.840 on airplanes, record travel from triple A on automobiles. People 0:12:59.840 --> 0:13:02.640 are on vacation, we are in deep summer, so there's 0:13:02.679 --> 0:13:05.840 a lot of time for the Democratic Party to pull 0:13:05.880 --> 0:13:11.080 around the narrative. Having served on grassroots campaigns nationwide, a 0:13:11.120 --> 0:13:13.679 lot of voters, especially since sort of the Internet Revolution, 0:13:13.840 --> 0:13:16.360 do not tune into the election until the last couple 0:13:16.360 --> 0:13:19.040 of weeks. Twenty four percent independents don't make a call 0:13:19.160 --> 0:13:21.440 on how they're going to vote until after Labor Day. 0:13:21.600 --> 0:13:24.080 So it seems like there's nothing left in times of 0:13:24.080 --> 0:13:26.000 the essence, but there's really seventy five of the most 0:13:26.000 --> 0:13:28.960 important days are still like fifty days away. 0:13:29.040 --> 0:13:32.679 Paul, can we ask a nerd Henrietta Trace question, Henrietta, 0:13:32.760 --> 0:13:36.079 come on, Connor Lamb out in western Pennsylvania. There he 0:13:36.360 --> 0:13:40.720 was post a child for the Conservative Union Democrat and 0:13:40.720 --> 0:13:46.240 all that. Christopher Deluzio is a first term Democrat in 0:13:46.280 --> 0:13:50.040 the vicinity of Allegheny County, Pittsburgh. What's he think of 0:13:50.080 --> 0:13:50.480 all this? 0:13:52.600 --> 0:13:54.880 Pittsburgh is first of all, very near and dear to 0:13:54.920 --> 0:13:58.480 my heart, and as is Connor Lamb. I think that 0:13:58.679 --> 0:14:02.160 when look at Pennsylvania and they look at Pittsburgh, they've 0:14:02.160 --> 0:14:04.200 got to concentrate on the mail voter. The mail voter 0:14:04.280 --> 0:14:08.880 has abandoned Biden specifically, and it's not that they've abandoned 0:14:08.880 --> 0:14:13.280 the Democratic Party. The Democratic Party platform remains overwhelmingly popular, 0:14:13.400 --> 0:14:19.120 legalizing abortion, legalizing marijuana, common sense gun control, things along 0:14:19.160 --> 0:14:22.880 those lines, versus the Republican platform, which is almost universally 0:14:23.960 --> 0:14:29.120 opposed to things like having teachers be armed in classrooms 0:14:29.120 --> 0:14:32.720 to stop gun violence in schools, pulling out of NATO. 0:14:32.840 --> 0:14:35.840 Those are things that are wildly unpopular with Americans across 0:14:35.880 --> 0:14:39.320 the board, including in Pittsburgh. And it's mostly the mail 0:14:39.400 --> 0:14:41.640 voter that I would concentrate on there. That's where Democrats 0:14:41.640 --> 0:14:42.840 are hemorrhaging votes. 0:14:43.040 --> 0:14:46.040 So far, interns just sets us say a thank and reading. 0:14:46.080 --> 0:14:49.120 For Henrietta Trece, we send her a case a yingling beer. 0:14:53.160 --> 0:14:55.800 Lauren Hawkfield her when she was last on Stop Traffic. 0:14:56.640 --> 0:14:58.880 She's out of Yale, She's at Morgan Stanley. She's an 0:14:58.920 --> 0:15:02.160 institution on real li State. It's a big you know, 0:15:02.200 --> 0:15:05.120 it's like Michael Mobison. It's a big picture real estate chat. 0:15:05.160 --> 0:15:07.640 But underneath it all is to try to figure out 0:15:07.680 --> 0:15:10.640 how much money we're going to lose. Lauren, where is 0:15:10.680 --> 0:15:15.080 the buy the dip winner right now in American real estate? 0:15:16.840 --> 0:15:17.160 Gosh? 0:15:17.160 --> 0:15:18.880 Well, first of all, thanks for having me back. 0:15:18.920 --> 0:15:20.560 It's great to be with you. 0:15:21.240 --> 0:15:24.120 I think the nice thing is that the dip seems 0:15:24.120 --> 0:15:28.040 to be affecting all real estate asset classes, all repriced 0:15:28.400 --> 0:15:32.200 almost across the board. But some of those are repriced 0:15:32.240 --> 0:15:35.880 for a reason, and some we think are actually really healthy, 0:15:36.360 --> 0:15:37.320 really great outline. 0:15:37.360 --> 0:15:40.120 Give me, give me one of the healthy ones right now. 0:15:40.200 --> 0:15:41.640 I got to make some money this morning. 0:15:43.800 --> 0:15:47.920 Well, let's start with Let's start with industrial. There are 0:15:47.920 --> 0:15:52.080 really three reasons we love industrial. The first is, let's 0:15:52.080 --> 0:15:55.520 look at the supply chain. We are rerooting and re 0:15:55.760 --> 0:16:00.960 routing rerouting changing where goods are manufactured, near shoring, on 0:16:01.200 --> 0:16:04.800 shoring of goods, et cetera, and rerouting changing how those 0:16:04.840 --> 0:16:07.200 goods get to the end consumer. And so all of 0:16:07.240 --> 0:16:11.400 that creates demand for industrial. The second is the continued 0:16:11.520 --> 0:16:14.400 rise in e commerce. Right, we all seem to be 0:16:14.440 --> 0:16:16.760 buying more and more of our goods online and demanding 0:16:16.800 --> 0:16:21.000 it faster and faster. That creates demand for industrial. And 0:16:21.280 --> 0:16:25.000 the third, really, which I think is under reported, is 0:16:25.120 --> 0:16:29.720 just this dramatic falloff in new construction. So when you 0:16:29.760 --> 0:16:33.040 feel like demand is really strong and supply is curtailed, 0:16:33.360 --> 0:16:35.960 that's a good sign for an asset. 0:16:36.320 --> 0:16:39.000 One of the themes that's out there, Lauren, just investors 0:16:39.040 --> 0:16:42.840 in general is an aging population. How do you play 0:16:42.840 --> 0:16:44.640 that in real estate? 0:16:46.240 --> 0:16:46.480 Yeah? 0:16:46.760 --> 0:16:50.160 It is. This is really important because as people age, 0:16:50.760 --> 0:16:54.160 their needs for real estate change, right, And we know 0:16:54.200 --> 0:16:57.960 we have an aging population, and in particular, the growth 0:16:58.400 --> 0:17:01.920 in our population is coming from two cohorts. It's the 0:17:02.000 --> 0:17:05.000 millennials and it's the boomers. And let me tell you, 0:17:05.080 --> 0:17:08.120 when you look at housing needs, their needs are changing. 0:17:08.320 --> 0:17:11.920 The millennials they're needing more space, and the boomers they're 0:17:11.960 --> 0:17:16.800 needing more services, more healthcare, services in particular. So I'd say, 0:17:16.880 --> 0:17:20.960 in the case of the millennials, there's a move towards 0:17:21.000 --> 0:17:26.840 single family rental, that's a great beneficiary of millennial demand. 0:17:27.320 --> 0:17:31.000 In the case of the boomers, we are really optimistic 0:17:31.040 --> 0:17:34.640 about senior housing because the number of seniors is up 0:17:34.720 --> 0:17:37.920 and the wealth heldo by those seniors is up, and 0:17:38.320 --> 0:17:39.600 industrials supply down. 0:17:39.920 --> 0:17:42.680 Laurd the big service that the the boomers are looking 0:17:42.720 --> 0:17:45.920 for is can you find me a dog walker? I mean, 0:17:46.400 --> 0:17:49.239 that's really what it comes down to, Lauren. There's a 0:17:49.359 --> 0:17:53.479 national housing crisis. Now you tell me single family rentals 0:17:53.520 --> 0:17:56.160 are going to work. And as you well know, Blackstone 0:17:56.160 --> 0:18:00.199 has been a pinata where big inst evil institutions is 0:18:00.240 --> 0:18:05.320 like Morgan, Stanley and Blackstone are taking out single family rentals. 0:18:05.520 --> 0:18:08.760 I mean, you're definitive on this. Respond to the idea 0:18:09.040 --> 0:18:12.520 that evil New York City institutions are buying up all 0:18:12.520 --> 0:18:16.359 the single family home rentals, boosting the price of a rent. 0:18:18.040 --> 0:18:20.600 Look, we think there's a better way to do it, 0:18:21.080 --> 0:18:24.440 and the way we execute is build to rent. So 0:18:24.480 --> 0:18:29.680 we are building new supply in purpose built communities where 0:18:29.800 --> 0:18:33.440 residents get the benefits of multifamilies, so they get highly 0:18:33.520 --> 0:18:39.000 amenditized community living, but the benefits of single family insofar 0:18:39.080 --> 0:18:42.359 as they're larger units, they get their four walls and 0:18:42.400 --> 0:18:46.280 we're adding supplies, so we're not competing with individuals looking 0:18:46.280 --> 0:18:49.960 to buy homes. I think we're helping the affordability crisis there. 0:18:51.160 --> 0:18:54.919 So Lauren on office real estate, do we have a 0:18:54.960 --> 0:18:58.720 sense of where the market is an urban larger urban 0:18:58.760 --> 0:19:00.960 markets in this country for off real estate. Have we 0:19:01.000 --> 0:19:03.880 had transactions that are actually setting the market price for us? 0:19:05.400 --> 0:19:05.560 Yeah? 0:19:05.640 --> 0:19:09.000 So there's wide buy furcation here, right, And so there 0:19:09.000 --> 0:19:11.760 are certain type of office that I think will continue 0:19:11.800 --> 0:19:15.520 to really perform, the best of the best office, that 0:19:15.600 --> 0:19:19.280 which has the right characteristics to attract tenants, that which 0:19:19.320 --> 0:19:23.480 has the right frankly sustainability characteristics. We think that will 0:19:23.480 --> 0:19:27.200 continue to do well as we go ahead. And I'd 0:19:27.200 --> 0:19:29.720 say there's not been a lot of that trading, but 0:19:29.840 --> 0:19:32.159 we think that will continue to perform. And what I 0:19:32.200 --> 0:19:35.639 can tell you is that rents in some of those assets, 0:19:35.800 --> 0:19:40.080 even in markets like San Francisco, are above pre COVID levels. 0:19:41.080 --> 0:19:43.000 Flip it to the other end of the spectrum, and 0:19:43.040 --> 0:19:46.080 there's office that simply shouldn't exist as office, and that's 0:19:46.160 --> 0:19:49.960 trading seventy plus percent down because it needs to be 0:19:50.080 --> 0:19:51.720 converted to an alternative use. 0:19:52.920 --> 0:19:55.359 Okay, and are we seeing some of those transactions in 0:19:55.400 --> 0:19:57.640 the B and C type office because I'm just thinking 0:19:57.640 --> 0:20:00.640 about New York City or Third Avenue from fifty eighth 0:20:00.640 --> 0:20:03.720 Street to forty second Street. What's that market like? 0:20:05.359 --> 0:20:08.640 Yeah, so you're starting to see some conversions of office 0:20:08.680 --> 0:20:12.520 to residential. I would warn that there are only certain 0:20:12.560 --> 0:20:14.960 types of buildings for which that works. Tends to be 0:20:15.320 --> 0:20:19.000 smaller floor plans, floor plates, tends to be buildings with 0:20:19.040 --> 0:20:23.200 more windows. There are a variety of different physical characteristics 0:20:23.200 --> 0:20:26.439 that make certain buildings better contenders than others. But are 0:20:26.640 --> 0:20:29.280 we are in the very early innings of that. And 0:20:29.359 --> 0:20:32.720 part of that is similar to Post nine to eleven. 0:20:33.240 --> 0:20:35.880 There is some private public partnership. 0:20:37.000 --> 0:20:39.040 Thanks so much. This has been great, Lauren, don't be 0:20:39.080 --> 0:20:53.640 a stranger. Love to have into the office, Lauren, your data. 0:20:53.720 --> 0:20:55.879 Look at the front page. Is Jen Tucker in for 0:20:55.920 --> 0:20:59.280 Lisa Matteo, John Tucker with the newspapers? 0:20:59.640 --> 0:21:02.560 Yeah, this one comes from the Washington Post. This morning, 0:21:03.080 --> 0:21:07.359 George Stephanopholis caught on camera expressing doubts about Joe Biden. 0:21:07.920 --> 0:21:11.639 The ABC news anchor, who of course recently interviewed President 0:21:11.640 --> 0:21:14.040 Biden about his fitness for the race, was caught on 0:21:14.119 --> 0:21:17.879 camera yesterday indicating he doesn't think Biden can serve another 0:21:17.920 --> 0:21:22.760 four years. So he's seen in jim clothes outside the 0:21:22.800 --> 0:21:26.080 studios in a video published by TMZ. He's asked by 0:21:26.119 --> 0:21:28.480 a passer by what do you think do you think 0:21:28.480 --> 0:21:30.359 Biden should step down? We've talked to him more than 0:21:30.359 --> 0:21:33.040 anybody else lately, and you can be honest, I don't 0:21:33.040 --> 0:21:35.880 think Stephanopholis doesn't look like he was actually he knew 0:21:35.880 --> 0:21:39.160 he was being recorded here, just off camera. He's captured 0:21:39.280 --> 0:21:42.639 on fuzzy audio responding he doesn't think he can serve 0:21:42.760 --> 0:21:47.439 four more years Satan. Late yesterday, Stephanopolis acknowledged he was 0:21:47.440 --> 0:21:50.440 the person seen in the video. The remarks come days 0:21:50.600 --> 0:21:52.399 after the interview with Biden, during which. 0:21:52.359 --> 0:21:53.520 Choel TMZ think. 0:21:53.960 --> 0:21:56.040 Yeah, I mean, I don't know if the person was 0:21:56.080 --> 0:21:59.439 working for TMZ or just you know, but again that. 0:21:59.480 --> 0:22:01.760 Means so John, you live this every day. You're out 0:22:01.800 --> 0:22:03.920 it on the deck at Atlantic Highlands, and you've got 0:22:03.960 --> 0:22:05.320 to be worried that you're recorded. 0:22:06.600 --> 0:22:09.760 Nobody over the lobster Atlanet Earth here is what I 0:22:09.800 --> 0:22:10.600 think about A. 0:22:10.760 --> 0:22:12.199