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Speaker 1: Welcome to the Bloomberg Penl Podcast. I'm Paul swing you,

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Speaker 1: along with my co host Lisa Brahma wits each day

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Speaker 1: we bring you the most noteworthy and useful interviews for

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Speaker 1: you and your money. Whether at the grocery store or

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Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple

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Speaker 1: podcast or wherever you listen to podcasts, as well as

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Speaker 1: at Bloomberg dot com. Right now, let's switch gears. We'll

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Speaker 1: take a look at what some of those global trade

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Speaker 1: issues are doing for markets. Who welcome Louis lou portfolio manager,

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Speaker 1: member of the Emerging Markets Investment Committee at Brandi's Investment Partners.

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Speaker 1: It joins us on the phone from San Diego. Louis,

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Speaker 1: thanks so much for joining us. You know, just those

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Speaker 1: headlines from the President, you know, talking about global trade

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Speaker 1: and what's going on with global trade. Clearly the uncertainties

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Speaker 1: created by the uncertainty of global trade really weighing on markets.

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Speaker 1: How are you kind of factoring that into your investment outlook?

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Speaker 1: Thanks Paul for having me on Good Morning everybody. UM,

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Speaker 1: just to kind of set the stage. You know, we're

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Speaker 1: long term value investors at Brands and our approach is

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Speaker 1: really to focus on the fundamental economic worth of the

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Speaker 1: companies that we invest in. UH, and we call that

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Speaker 1: the intrinsic value of these companies, and our approach is

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Speaker 1: to purchase them at a at an attractive discount of

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Speaker 1: the intrinsic values. And within that context, UM, a lot

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Speaker 1: of these geopolitical events, trade events that you mentioned, have

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Speaker 1: created numerous opportunities, whether it's UM, the US China trade

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Speaker 1: frictions that we're seeing, or the renegotiation on NAFTA or

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Speaker 1: even Brexit. I mean, these have created opportunities whereas stocks

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Speaker 1: are selling attractive discounts to their long term fair value,

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Speaker 1: can you give us can you give us some examples?

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Speaker 1: So some of those examples would be UM. You know,

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Speaker 1: the Mexican real estate companies or the fevers that we

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Speaker 1: call them, have been selling a big discounts, large dividend yields. UM.

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Speaker 1: You know, some of those companies that have been affected

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Speaker 1: would be technology companies UM in in China. UM. Those

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Speaker 1: are some of the things that we've looked at. UM.

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Speaker 1: There's also a lot of other examples. But really, UM, Lisa,

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Speaker 1: the key thing to bear in mind is we're not

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Speaker 1: trying to predict particular outcomes. We don't think that anybody can.

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Speaker 1: I think our approach is really too buy uh when

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Speaker 1: we feel that a worst case scenario has been priced in. UM.

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Speaker 1: Some days, you know, these stocks will trade as if

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Speaker 1: there's never going to be a trade deal. And then

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Speaker 1: on other days the market is euphoric and it's pricing

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Speaker 1: in a very good outcome. And on those occasions we're

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Speaker 1: gonna be lightening up the position or we stopped buying.

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Speaker 1: But if a worst case scenario is priced in, then

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Speaker 1: we're active in the market. UM using a flexible and

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Speaker 1: nimble approach to investing in these companies. So all of

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Speaker 1: a sudden that you recently took a trip business trip

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Speaker 1: through Asia over the STUMMAC, it's a sense of so

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Speaker 1: you'r key takeaways there because clearly you know that the

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Speaker 1: uncertainties of trade between the US and China, you know,

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Speaker 1: really key to I think investors psyches now. Yes, UM,

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Speaker 1: I was in seven cities in Asia a couple of

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Speaker 1: months ago, and I think the striking thing to notice that,

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Speaker 1: you know, if you go to mainland China, whether it's Shanghai,

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Speaker 1: Beijing or Shansin, you know, the the admustry is very different.

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Speaker 1: I think there's a feeling of calm, there's a feeling

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Speaker 1: of you know that the economy has the capability to

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Speaker 1: withstand some of these external shocks. UM. So the feeling

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Speaker 1: that we get from mainland China is very different. But

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Speaker 1: across the border in Hong Kong, UM, my witness firsthand

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Speaker 1: some of the protests that have been taking place and

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Speaker 1: the disruptions to normal business operations um. And just kind

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Speaker 1: of to Lesa's point earlier, this has given way to

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Speaker 1: some opportunities in the retail industry. Uh, some of the

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Speaker 1: banks in Hong Kong, you know, showing very good value. Um.

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Speaker 1: And we're not exactly sure how the protests will end

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Speaker 1: or how it's going to conclude, but if you look

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Speaker 1: at the history, these protests have been episodic. They come

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Speaker 1: and go. Uh, there's going to be some kind of

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Speaker 1: resolution over you know, the shorter or medium term. And

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Speaker 1: you know that has created opportunities as well. You know,

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Speaker 1: I'm wondering if there has to be a base case

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Speaker 1: when it comes to some of these geopolitical occurrences when

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Speaker 1: you're making decisions about whether something is undervalued or overvalued,

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Speaker 1: because you know, I mean, at any given point, the

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Speaker 1: the outcome could be completely bifurcated and lead to completely

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Speaker 1: bifurcated market results. So how what what is your sort

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Speaker 1: of base case for the next twelve months. Yeah, I

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Speaker 1: think the base case is that the US China relationship,

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Speaker 1: you know, whether it's the economic relationship, whether it's the

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Speaker 1: trade relationship, is too important for the global economy for

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Speaker 1: there to be you know, a sustained adverse outcome, right,

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Speaker 1: so you can see that, uh, you know, particularly for

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Speaker 1: the US point of view. You know, the terrorists starting

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Speaker 1: to have a negative impact. So the trade war has

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Speaker 1: kind of shifted to other areas right looking at UM,

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Speaker 1: you know, American capital going into Chinese capital markets, things

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Speaker 1: like that. So the exact form of these tensions can change,

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Speaker 1: the shape can shift. But then the longer term base

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Speaker 1: case over the next twelve months is that the relationship

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Speaker 1: is too important. There will be some kind of resolution

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Speaker 1: or de escalation, And that is kind of the base

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Speaker 1: case that we use UM to value some of the companies.

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Speaker 1: And then if there's a significant down draft or deviation

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Speaker 1: that is priced in that we don't think will hold

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Speaker 1: over the next three or five years, then that would

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Speaker 1: be a buying opportunity. Of course, you know, our approach

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Speaker 1: would allow for some of these estimates uh to change,

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Speaker 1: you know, if if the information and situation changes. Is dynamic,

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Speaker 1: So we're not holding to any one particular scenario, but

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Speaker 1: trying to have a flexible approach and the factor in

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Speaker 1: some of the you know, any lasting developments into our

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Speaker 1: base case. So it's interesting because you say that this

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Speaker 1: sort of base cases is that you know, we do

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Speaker 1: get something. I do wonder though, what we're seeing right

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Speaker 1: now is the lack of certainty itself weighing on economic

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Speaker 1: growth and activity. How do you factor that in? You know,

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Speaker 1: it's it's really kind of the deviation from uh, you know,

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Speaker 1: the base rate of growth. Right, so China should grow

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Speaker 1: at about six percent maybe that decelleries by twenty five

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Speaker 1: or fifty basis points uh in the next twelve months,

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Speaker 1: and in the US maybe trend growth rate it's kind

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Speaker 1: of around two percent. So there's certain base case estimates

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Speaker 1: that uh, you know, the markets are looking for, and

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Speaker 1: you know, um, some of these events have a very

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Speaker 1: short term negative impact on some of that, uh, some

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Speaker 1: of the trend growth rates. Right, So the base case

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Speaker 1: hasn't really changed it's just that um there's a lot

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Speaker 1: of short term volatility and geopolitical events that can cause

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Speaker 1: oscillations around that base case, and it's these oscillations that

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Speaker 1: create market volatility that give rise to opportunity. Louis Loud,

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Speaker 1: thank you so much for being with us. Louis law

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Speaker 1: is protfolio manager and member of the Emerging markets investment

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Speaker 1: community at Brandis Investment Partners in Love San Diego, or

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Speaker 1: I do not think that they are preparing for in

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Speaker 1: our easter like we are here. Let's talk retirement. Let's

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Speaker 1: talk about whether you want to do it and whether

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Speaker 1: you can do it. Ever, let's speak with Josh Jelinski.

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Speaker 1: He's president of Jelinski Advisory Group, joining us here in

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Speaker 1: our Bloomberg Interactive Broker Studio. You have a new book,

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Speaker 1: Retirement reality Check. I'm just gonna go out on a

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Speaker 1: limb here and assume it's not a reality check that

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Speaker 1: you've got plenty and you're great. Well, it could be both.

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Speaker 1: You could have a lot and not know what to

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Speaker 1: do with it. You could have a significant amount saved

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Speaker 1: and not of a tax plan, not of a strategy

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Speaker 1: to convert your assets to income when you're retired. So

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Speaker 1: there's the reality check for those who have money, and

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Speaker 1: then there's the reality check for those who have not

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Speaker 1: saved you know, ten to fifteen percent and their four

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Speaker 1: one k or who have come in a lot of

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Speaker 1: money due to maybe a sale of a business, but

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Speaker 1: there is a savings dearth Fidelity came out with a report,

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Speaker 1: you know, the average four one case fifty grand to

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Speaker 1: their name, which is shocked. It is so Josh, you know,

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Speaker 1: I have my children earning the workforce right now, and

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Speaker 1: the I think the probably hopefully the best piece of

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Speaker 1: advice I gave them was four oh one k started

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Speaker 1: today maximizer contributions. What percentage of people would you say

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Speaker 1: are really not prepared for retirement financially? I would say

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Speaker 1: about yeah, because I saw that statistic recently that a

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Speaker 1: big percentage of Americans could not come up with a

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Speaker 1: four million sorry four dollar just emergencies or you know,

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Speaker 1: a thousand dollars for emergency, so that I think it

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Speaker 1: was like percent of Americans. Yeah. So what is the

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Speaker 1: most important advice you have for people as they think

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Speaker 1: about retirement, you know, whether they're young or whether they're

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Speaker 1: may be closer to retirement. Number one, just start save

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Speaker 1: ten to fifteen percent of your paycheck. A lot of

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Speaker 1: people they stop at fifty and they go, well, I

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Speaker 1: have fifty grand. I'll never amount to anything, so I'm

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Speaker 1: not gonna save anything. And if you save, you know,

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Speaker 1: tend to fifteen percent of your pay now. We we

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Speaker 1: we do have a section for millennials, people in their thirties, twenties,

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Speaker 1: forties to start now and then to do it in

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Speaker 1: a tax smart manner. In the book, we have eleven

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Speaker 1: tax smart tips for how to capitalize on the Trump

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Speaker 1: tax plan and other things. I'd like to be a

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Speaker 1: pain in the neck, So I'm gonna I'm gonna take

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Speaker 1: the other side of this. There are all these people

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Speaker 1: screaming that too many people over in China save. People

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Speaker 1: are talking about the savings rate, and how could be

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Speaker 1: a problem if people aren't actually putting their money into

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Speaker 1: the economy, and if they're not necessarily investing in themselves.

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Speaker 1: And I'm not talking about incurring more student debt, but

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Speaker 1: making life easier. For example, if you've got children's that

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Speaker 1: you can continue to work even if it means less

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Speaker 1: income in that short period. How do you sort of

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Speaker 1: square those sort of conflicting feelings of sort of the

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Speaker 1: dynamis of the economy in the near term versus being

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Speaker 1: prudent for the long term. Well that's great. We actually

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Speaker 1: have a macro economic approach to people's money where we

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Speaker 1: treat money less like a personal checkbook and more like

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Speaker 1: a macro economy, and that we have three key focuses.

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Speaker 1: We want to focus on asset protection, savings, and growth.

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Speaker 1: But yeah, there is a conflicting thing where when you're

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Speaker 1: looking at the macro economic data, we want people to

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Speaker 1: be spending their money, but then in reality people have

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Speaker 1: to avoid buying stupid stuff. I mean, if you think

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Speaker 1: about today, people have Netflix subscriptions and cable bills, they

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Speaker 1: have cell phone bills and they I mean, and they

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Speaker 1: have this subscription and that you know, they got to

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Speaker 1: cut the cord though. I mean, it's good for the

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Speaker 1: macro economy, bad for the micro economy. So what you know,

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Speaker 1: people are are living longer these days, Uh Josh, So

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Speaker 1: do they need they I guess they did. They need

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Speaker 1: more money. So I mean, is there a sense of

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Speaker 1: kind of what people need today for a decent retirement

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Speaker 1: versus maybe a generation or two ago. I think people

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Speaker 1: a generation or two ago spent a lot less, so

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Speaker 1: they need needed less to retire. They also had pensions.

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Speaker 1: A whole section on the book in my book Retirement

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Speaker 1: Reality Check is on how to convert your assets to income.

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Speaker 1: And we have a lot of people who don't have

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Speaker 1: a pension, so they need greater assets because they have

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Speaker 1: to convert their four one case too, to a pension

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Speaker 1: like stream of investment income when they retire. Definitely, what

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Speaker 1: age do you think people really ought to retire at

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Speaker 1: this point or expect to retire barring some boon from

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Speaker 1: a wonderful period in their business life. Maybe, uh, I

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Speaker 1: don't know, sixties, seven, seventy. But more and more people

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Speaker 1: are working longer. I mean, you know, you know, more

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Speaker 1: and more people are practicing the phrase welcome to Walmart.

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Speaker 1: They're finding joy a lot of people. I mean, if

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Speaker 1: you look philosophically, even back in Biblical days, you know,

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Speaker 1: the Bible mentions no mention of the concept retirement. That's

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Speaker 1: because everybody was dead at seventy so and social Security

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Speaker 1: came out when the average life expectancy was I think

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Speaker 1: like fifty two, and so you were typically like in

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Speaker 1: today's age, it would be eighty. If we went back

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Speaker 1: to the original concept of the social safety net. So

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Speaker 1: the social safety net, I mean, what percentage of the

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Speaker 1: US population you think relies on that? Probably too much.

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Speaker 1: I think more and more retirees are solely I'm I'm

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Speaker 1: I'm hearing people you know, called my radio show because

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Speaker 1: we have a show, and they I mean, there's like

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Speaker 1: I would say, are reliant on social security. Boomers did

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Speaker 1: a very poor job saving for retirement. And and that's

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Speaker 1: the importance of a retirement reality check, so you can

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Speaker 1: spend all your money without going broke in retirement. Interesting.

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Speaker 1: Josh Jelinski, thanks so much for joining us. Josh's President

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Speaker 1: Jelinski Advisory Group, joining us here in our Bloomberg Interactor

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Speaker 1: Broker studio talking about his new book, Retirement Reality Check.

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Speaker 1: And look, it's so important to save earlier. I think

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Speaker 1: that I'm coming at this. I always was, you know,

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Speaker 1: putting stuff aside and preparing for the future, and I

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Speaker 1: think it's important to do it. I think there needs

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Speaker 1: to be a balance though too right, I mean, but

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Speaker 1: I don't I guess that most people don't, do you

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Speaker 1: know everybody. I'm sure everybody has their their different financial position.

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Speaker 1: But I think that again, as I tried to you know,

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Speaker 1: impart to my children is nder the workforce is the

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Speaker 1: importance of saving for retirement four win k H. And

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Speaker 1: how it's such a powerful savings tool that a lot

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Speaker 1: of corporations corporate America in the absence of a defined

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Speaker 1: pension plan. Uh, it's really the way you have to go.

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Speaker 1: So very interesting, Josh, thanks so much for joining us

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Speaker 1: well here at our Bloomberg World headquarters in New York City.

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Speaker 1: Today we are hosting the Bloomberg Canadian Fixed Income Conference,

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Speaker 1: bringing together leaders and financiers looking at the Canadian market.

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Speaker 1: Joining us today is Rod Phillips, the Finance miss Minister

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Speaker 1: for Ontario, Canada, joining us here on a Bloomberg in

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Speaker 1: Active broker studio. Rod, thanks so much for being with us.

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Speaker 1: Give us a sense of you know, our financial you

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Speaker 1: know our economy here in the US. You know it's

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Speaker 1: chugging along pretty well to two and a half percent,

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Speaker 1: but slowing. Give us a sense kind of the economic

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Speaker 1: backdrop facing Canada these days. Paul Lisa, thanks for having me.

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Speaker 1: It's great to be on Bloomberg. You know, Ontario and

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Speaker 1: Canada generally are our significant connection in terms of economically

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Speaker 1: used the United States. So so as your economy goes that,

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Speaker 1: that certainly supports growth. For for Ontario. A lot of

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Speaker 1: people don't realize, but nineteen States were the number one

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Speaker 1: trading partner. So so when we see the kind of

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Speaker 1: hot economy having the United States, we're seeing that replicated.

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Speaker 1: Uh in Ontario. We have, you know, our unemployment rate

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Speaker 1: that just the last month was fivete which by our

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Speaker 1: standards is fairly low. We have two thirty thousand jobs

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Speaker 1: since last June year ago June that we're created. So

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Speaker 1: so you're seeing a growing economy, particularly um hot from

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Speaker 1: a development point of view. Uh. You know, we were

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Speaker 1: four cranes across North America. The construction cranes are in

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Speaker 1: the g t A. So a lot of that kind

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Speaker 1: of growth and development comes a lot from a lot

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Speaker 1: of very positive immigration statistics we have. So g t A.

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Speaker 1: I'm going to just infer is the general Toronto area?

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Speaker 1: Is that correct? The great there we go? Not in

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Speaker 1: general the Greater Toronto area. I'm wondering about Toronto at

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Speaker 1: the housing market in particular, because there's been a lot

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Speaker 1: written about how high prices had gotten and how people

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Speaker 1: were getting priced out of the region. Can you tell

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Speaker 1: us a little bit about where we are. We have

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Speaker 1: seen a little bit of a resurgence there with respect

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Speaker 1: to some of your measures to discourage foreigners from just

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Speaker 1: buying for investment. You know, there's no question affordability had

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Speaker 1: become an issue in the Greater Toronto area. We've brought

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Speaker 1: in some policies to to free up the capacity to develop,

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Speaker 1: obviously being sensitive about environmental concerns and otherwise, uh, some

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Speaker 1: of the some of the measures that both the federal

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Speaker 1: government had taken in the previous government to to uh,

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Speaker 1: you know, to limit that kind of growth. Some of

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Speaker 1: some of them been helpful, some have gotten in the

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Speaker 1: way of greater supply. We really see this as a

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Speaker 1: supply issue, and so so you know, we've been trying

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Speaker 1: to to encourage about somewhere around. Of all the immigrants

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Speaker 1: that come to UH, to Canada, come to Ontario, and

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Speaker 1: the biggest portion of those come to the Greater Toronto area.

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Speaker 1: UM So that's fantastic from an economic point of view

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Speaker 1: in terms of giving us a great base to grow

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Speaker 1: the economy from. But but you know, keeping housing affordable

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Speaker 1: is one of the things that we're really focused on.

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Speaker 1: How much pushback have you gotten from residents in Toronto

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Speaker 1: with the development, because this is always the push pull

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Speaker 1: in cities, right, don't over develop us, don't crowd our schools,

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Speaker 1: and yet housing is unaffordable, so what are you gonna do? Yeah,

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Speaker 1: it is always that tension. Everybody always wants to have

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Speaker 1: the last new house in a particular neighborhood. And and uh,

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Speaker 1: but but I think this is a This is an

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Speaker 1: area of our country that has has grown dramatically because

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Speaker 1: we've been fairly effective at at integrating newcomers into into

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Speaker 1: into the economy and otherwise. Um again that you know,

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Speaker 1: as long as there's jobs and economic opportunity, UM it is,

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Speaker 1: it's it's just net positive for most people. But listen,

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Speaker 1: we are We've got ninety billion dollars for spending on

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Speaker 1: transit and transportation infrastructure. You know, that's specifically focused on

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Speaker 1: dealing with the congestion that inevitably comes with this. UM.

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Speaker 1: We have has had an aggressive policy around making sure

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Speaker 1: there's more housing supply. You know, it was an urgent

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Speaker 1: need of those things happening. And then when it comes

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Speaker 1: to things like education and healthcare, big investments there in

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Speaker 1: the tens of billions of dollars to make sure that

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Speaker 1: the infrastructures in place. So those immigration statistics quote are

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Speaker 1: very interesting to me. How is immigration into Ontario and

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Speaker 1: kind of a broadly changed over the last several years

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Speaker 1: with the Trump administration and kind of the changing policies

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Speaker 1: here in USA. You know, it has UH has definitely

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Speaker 1: caused a couple of effects on the in terms of

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Speaker 1: the side of terms of refugees. We we had through

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Speaker 1: Quebec and through Ontario an increase in people leaving because

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Speaker 1: of some of the Trump policies. UM. But I'll say

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Speaker 1: also on the side of some of the most skilled

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Speaker 1: and valuable immigrants we've we've seen an uptick in terms

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Speaker 1: of interest whether it comes to our universities or high

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Speaker 1: tech firms. We have quite an AI hub in in Toronto.

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Speaker 1: In fact, tomorrow I'm hosting an AI round table with

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Speaker 1: a number of local companies here in New York UH

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Speaker 1: that that are looking because of our education system, because

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Speaker 1: of the number of data scientists we have expanding UH

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Speaker 1: the operations they have in Ontario and UH and that

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Speaker 1: I think that's about the quality of life that we

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Speaker 1: have as well as you know, as having capital markets.

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Speaker 1: I mean, as you guys would know Toronto is the

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Speaker 1: number two capital market in North America, so there's access

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Speaker 1: to capital for a lot of entrepreneurs. Rod Phillips, thank

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Speaker 1: you so much for joining usable that I want to

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Speaker 1: be called the Honora Police. I think at that of life, right,

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Speaker 1: I love that. You love that? Yes? Do you make

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Speaker 1: your your family call you the honorable? Only on weekends?

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Speaker 1: Do people really call you? Do they call you honorable

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Speaker 1: Phillips or honorable Rock? Usually just rot? But but but

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Speaker 1: it's you know, it's one of the you know, there's

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Speaker 1: there's so many benefits to being in politics. Definitely one

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Speaker 1: of them is the title the honorable, the honorable Paul

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Speaker 1: Sweeney think it works better than the Honorable Lisa Broadways.

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Speaker 1: That does not roll off the tongue at all. Rod Fellows,

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Speaker 1: Finance Minister, Ontario, Canada, joining us here in a Bloomberg

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Speaker 1: and Act Up broker studio, thank you so much for

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Speaker 1: joining us. Let's talk Puerto Rico since this has been

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Speaker 1: a hotbed of activity on the investment side over the

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Speaker 1: past couple of years as people try to figure out

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Speaker 1: now after the hurricane, how rebuilding the island will affect

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Speaker 1: its finances. Remember, it did have to file for bankruptcy restructuring.

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Speaker 1: Joining us now Ricardo Alvarez Diaz. He is founder and

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Speaker 1: principle of Alvarez Diaz and vill Alone. He is based

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Speaker 1: in San Juan, Puerto Rico, but he is joining us

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Speaker 1: here in our bloom Brignner Active Progress Studios. Ricardo, you

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Speaker 1: focus a lot on the rebuilding effort. Just when we

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Speaker 1: start with how is it going, Well, it's going a

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Speaker 1: lot better than what a lot of people are hearing.

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Speaker 1: I mean. The challenge we have, of course is the

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Speaker 1: uncertainty of what's going to happen with the funding itself.

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Speaker 1: I mean, because we we have been assigned a certain

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Speaker 1: amount of funding for the island federal funding sere funding specifically,

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Speaker 1: which is a community development block grounds from hot and

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Speaker 1: Fema um Um from the hot side. The first trench

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Speaker 1: of money has come in and and things are starting

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Speaker 1: to move a little fast. But at the same time,

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Speaker 1: the reality is that that's one point five billion dollars

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Speaker 1: out of out forty two billion dollar promise. So there's

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Speaker 1: a lot to we learned. So give us a sense of,

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Speaker 1: you know, how far back the island has recovered since

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Speaker 1: the hurricanes. Is there's a percentage which just give us

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Speaker 1: a sense of how far back it's come and how

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Speaker 1: far left it has to go. Well, I would say that, uh,

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Speaker 1: eighty five percent has has come back up to where

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Speaker 1: we were before the hurricane. And let's not say much

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Speaker 1: because we were a challenge before the hurricane when it

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Speaker 1: comes to infrastructure. So just because we're there doesn't mean

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Speaker 1: that we're great. It just means that we're back to

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Speaker 1: where we were. Where we need to focus now is

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Speaker 1: where we're going to want to be, and that's where, uh,

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Speaker 1: the infrastructure investments on how we planned the next fifteen

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Speaker 1: and thirty years of Puerto Rico are going to matter.

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Speaker 1: There's a big question mark about who's going to live there,

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Speaker 1: and one thing that we kept reading articles about was

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Speaker 1: the exodus of people from the island after the hurricane.

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Speaker 1: Has that sort of stabilized, you're starting to see population

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Speaker 1: growth even well not growth, but after the hurricane, we

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Speaker 1: lost around four hundred thousand people. Um, now that's typical.

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Speaker 1: If if you look at what happened in Katrina, that

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Speaker 1: was it was around two fifty thou people and it's

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Speaker 1: it's a it's similar to what happened in put Rico.

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Speaker 1: Because of the fact that schools were not open and

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Speaker 1: families needed to but that that was a significant proportion

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Speaker 1: of the entire islands population. And it's somewhat like or something. Well, no,

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Speaker 1: there's three point two million people in Puerto Rico. So

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Speaker 1: but but by now around three has returned now, so

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Speaker 1: we are down maybe seventy five thousand from the people

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Speaker 1: that left originally after a hurricane. But this matters a

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Speaker 1: lot because the island has more than seventy billion dollars

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Speaker 1: of debt. It needs a certain level of economic activities

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Speaker 1: that right, Yeah, it matters enormously. That's why one of

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Speaker 1: the challenges we've seen with the Fiscal Board itself is

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Speaker 1: that they have been focused rightly on trying to, you know,

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Speaker 1: manage the fiscal situation Puto Rico. But at the same time,

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Speaker 1: there's um A Title five out of the promiss a

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Speaker 1: law that is focused on economic development. And part of

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Speaker 1: the problem is that they have we have not been

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Speaker 1: focused enough when it comes to that with a common

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Speaker 1: economic development from the side of the federal government. Now

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Speaker 1: private center is a little different, and that's something we

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Speaker 1: need to talk about because I I find myself I'm

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Speaker 1: always talking about the bond situation and what happened to

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Speaker 1: Puerto Rico before the hurricane UM, and that was basically

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Speaker 1: the local government. I mean, there's a lot of robust

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Speaker 1: private sector businesses, but one of the challenges we we

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00:23:16,560 --> 00:23:18,959
Speaker 1: we've dealt with is you know, and by the way,

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Speaker 1: I say this all the time, we should get every

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Speaker 1: single private sector company like myself, our company that has

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Speaker 1: thrived in the last thirteen years of puer Rico should

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Speaker 1: get an award, because after thirteen years of recession is

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00:23:30,040 --> 00:23:33,080
Speaker 1: a big thank you. I just got an award. UM.

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Speaker 1: But at the same time, what I want to focus

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00:23:35,040 --> 00:23:37,200
Speaker 1: in that the private sector is looking at something that

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00:23:37,280 --> 00:23:40,960
Speaker 1: maybe UM, people should be should be listening to before

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00:23:40,960 --> 00:23:44,800
Speaker 1: the hurricane. Uh. Companies were losing trust and faith in

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Speaker 1: the island after the hurricane, even though let's remember that

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00:23:48,600 --> 00:23:50,879
Speaker 1: over three thousand people died and that's more people than

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Speaker 1: nine eleven UM. But what that did is that a

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00:23:54,920 --> 00:23:56,960
Speaker 1: lot of company, we we got a lot of attention

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00:23:57,080 --> 00:24:00,159
Speaker 1: worldwide that wasn't only about the fact that we were,

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00:24:00,200 --> 00:24:03,320
Speaker 1: you know, bankrupt, and people were interested in, well, what's

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00:24:03,320 --> 00:24:06,080
Speaker 1: Puerto Rico, what's happening in Puerto Rico? And people are

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00:24:06,119 --> 00:24:08,760
Speaker 1: doubling down some companies that have invested in assets are

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00:24:08,840 --> 00:24:12,639
Speaker 1: really reinvesting in the island, especially in hospitality and real state.

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00:24:12,880 --> 00:24:15,680
Speaker 1: UM of course knowing that there's gonna be some serious

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00:24:15,680 --> 00:24:19,840
Speaker 1: federal funding coming in to reinvest in long term infrastructure.

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Speaker 1: So give us a sense of that federal funding. I

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Speaker 1: think you mentioned forty two billion dollars. It's been out

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Speaker 1: a couple of years since the hurricane. What's what's the

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Speaker 1: timing and what has to happen for that money to

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Speaker 1: be released? Well, a couple of things. When if we

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Speaker 1: focus on Hodd specifically, UM, almost twenty billion dollars have

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00:24:34,280 --> 00:24:36,200
Speaker 1: been assigned to Puerto Rico, but out of those twenty

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00:24:36,200 --> 00:24:39,560
Speaker 1: billion dollars, only one point five billion has been disbursed

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00:24:39,760 --> 00:24:42,240
Speaker 1: another one point five billion, around two hundred million dollars

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00:24:42,280 --> 00:24:45,960
Speaker 1: have been actually utilized. What that tells you is that, UM,

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00:24:46,119 --> 00:24:48,160
Speaker 1: there's a lot of money that needs to be brought

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Speaker 1: in and a lot of investments that need to be

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Speaker 1: focused in. Now, what are the next steps HODD needs

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00:24:53,280 --> 00:24:56,720
Speaker 1: to UM. Dr Carson on the team at HARD needs

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00:24:56,760 --> 00:24:59,600
Speaker 1: to They need to sign UM what's called it grant

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Speaker 1: agree meant for the next eight point two billion dollars,

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Speaker 1: and that hasn't been done. Uh, and you know there's

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00:25:05,680 --> 00:25:08,439
Speaker 1: many reasons why now we have a monitor that was

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00:25:08,440 --> 00:25:11,520
Speaker 1: imposed on Puerto Rico. UM. And as an investor, I

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00:25:11,840 --> 00:25:14,879
Speaker 1: believe that having a monitor gives a certain degree of

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00:25:14,920 --> 00:25:17,320
Speaker 1: confidence to the investors. But at the same time, it

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00:25:17,359 --> 00:25:21,000
Speaker 1: has been very slow. UM. I believe that it will

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00:25:21,000 --> 00:25:23,400
Speaker 1: get a lot better first and second quarter next year,

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00:25:23,640 --> 00:25:28,040
Speaker 1: but the the the process has been sadly, like a turtle,

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00:25:28,200 --> 00:25:31,600
Speaker 1: very slow. So I want to talk about from your side.

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Speaker 1: You work on development, correct, yes, okay, So how much

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00:25:36,080 --> 00:25:41,080
Speaker 1: interest do you get from international investors given the government

478
00:25:41,160 --> 00:25:44,680
Speaker 1: track record? I feel an incredible amount of defensiveness. Guys

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00:25:44,720 --> 00:25:46,920
Speaker 1: were different were the private sector. We're going to manage

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00:25:46,920 --> 00:25:49,440
Speaker 1: it differently. We're not bankrupt. I mean, do you still

481
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Speaker 1: have to make that pitch every single time you talk

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00:25:51,800 --> 00:25:54,160
Speaker 1: to anyone of course, listen, it's like everything. I mean,

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00:25:54,240 --> 00:25:56,520
Speaker 1: I think one of the biggest successes we've had. And

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Speaker 1: I'm not only the president of Alvers alone, we I

485
00:25:59,400 --> 00:26:02,280
Speaker 1: also was appointed by the governor as as a member

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Speaker 1: of invest Puerto Rico. So my job is to get

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Speaker 1: out there and try to bring investments to the island,

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00:26:07,400 --> 00:26:09,720
Speaker 1: and and and the thing I get all the time

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Speaker 1: is that when we get people down there there in

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00:26:11,880 --> 00:26:15,520
Speaker 1: shock in a positive way, their surprise, they had no idea.

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Speaker 1: I mean, listen, only thirty five percent of the people

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00:26:18,200 --> 00:26:20,520
Speaker 1: in the mainland New Puerto Ricans were your citizens before

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00:26:20,560 --> 00:26:23,760
Speaker 1: the hurricane, So there there's a lot of misconception and

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00:26:23,920 --> 00:26:27,080
Speaker 1: lack of knowledge about a line. And if by the way,

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00:26:27,119 --> 00:26:30,480
Speaker 1: it doesn't help when you have situations within government either

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00:26:30,600 --> 00:26:33,480
Speaker 1: number one being bankrupt I'm number two when this summer

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00:26:33,640 --> 00:26:37,280
Speaker 1: we've had a governor stepping down. Uh, so you know,

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00:26:37,320 --> 00:26:39,480
Speaker 1: we're dealing with some of those issues. But I I

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Speaker 1: think that that's okay because it's just the beginning of

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Speaker 1: what we're gonna see in the next couple of years. Uh,

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00:26:46,040 --> 00:26:49,200
Speaker 1: that you're gonna see a Puerto Rico that's gonna start

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00:26:49,240 --> 00:26:51,480
Speaker 1: to come out a lot better. And I don't know

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Speaker 1: how you how you guys feel about this, but in general,

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00:26:54,240 --> 00:26:57,000
Speaker 1: I'm almost more excited about the private sector that the

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00:26:57,200 --> 00:26:59,680
Speaker 1: public sector. So when you see the private sectors starting

506
00:26:59,680 --> 00:27:02,959
Speaker 1: to win, did it's a good thing. Ricardo Avis Diaz,

507
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Speaker 1: founder and principle of Avarez DS and Ville Loan from

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Speaker 1: San Juan, Puerto Rico, joining us here on our Bloomberg

509
00:27:08,400 --> 00:27:11,280
Speaker 1: Interactive Broker Studio, giving us the latest on Puerto Rico.

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00:27:11,760 --> 00:27:14,399
Speaker 1: What is going on there in the rebuilding process that

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00:27:14,440 --> 00:27:19,080
Speaker 1: continues after Hurricanes Irma and Maria devastated the island several

512
00:27:19,160 --> 00:27:22,040
Speaker 1: years ago. Getting an update there. Thanks for listening to

513
00:27:22,080 --> 00:27:24,480
Speaker 1: the Bloomberg P and L podcast. You can subscribe and

514
00:27:24,520 --> 00:27:27,680
Speaker 1: listen to interviews at Apple Podcasts or whatever podcast platform

515
00:27:27,720 --> 00:27:30,800
Speaker 1: you prefer. Paul Sweeney, I'm on Twitter at pt Sweeney.

516
00:27:30,840 --> 00:27:33,320
Speaker 1: I'm Lisa Bramloy. It's I'm on Twitter at Lisa bram

517
00:27:33,359 --> 00:27:35,919
Speaker 1: woits one before the podcast. You can always catch us

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00:27:36,040 --> 00:27:37,639
Speaker 1: worldwide on Bloomberg Radio