Speaker 1: Welcome to the Bloomberg Penl Podcast. I'm Paul swing you,
Speaker 1: along with my co host Lisa Brahma wits each day
Speaker 1: we bring you the most noteworthy and useful interviews for
Speaker 1: you and your money. Whether at the grocery store or
Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple
Speaker 1: podcast or wherever you listen to podcasts, as well as
Speaker 1: at Bloomberg dot com. Right now, let's switch gears. We'll
Speaker 1: take a look at what some of those global trade
Speaker 1: issues are doing for markets. Who welcome Louis lou portfolio manager,
Speaker 1: member of the Emerging Markets Investment Committee at Brandi's Investment Partners.
Speaker 1: It joins us on the phone from San Diego. Louis,
Speaker 1: thanks so much for joining us. You know, just those
Speaker 1: headlines from the President, you know, talking about global trade
Speaker 1: and what's going on with global trade. Clearly the uncertainties
Speaker 1: created by the uncertainty of global trade really weighing on markets.
Speaker 1: How are you kind of factoring that into your investment outlook?
Speaker 1: Thanks Paul for having me on Good Morning everybody. UM,
Speaker 1: just to kind of set the stage. You know, we're
Speaker 1: long term value investors at Brands and our approach is
Speaker 1: really to focus on the fundamental economic worth of the
Speaker 1: companies that we invest in. UH, and we call that
Speaker 1: the intrinsic value of these companies, and our approach is
Speaker 1: to purchase them at a at an attractive discount of
Speaker 1: the intrinsic values. And within that context, UM, a lot
Speaker 1: of these geopolitical events, trade events that you mentioned, have
Speaker 1: created numerous opportunities, whether it's UM, the US China trade
Speaker 1: frictions that we're seeing, or the renegotiation on NAFTA or
Speaker 1: even Brexit. I mean, these have created opportunities whereas stocks
Speaker 1: are selling attractive discounts to their long term fair value,
Speaker 1: can you give us can you give us some examples?
Speaker 1: So some of those examples would be UM. You know,
Speaker 1: the Mexican real estate companies or the fevers that we
Speaker 1: call them, have been selling a big discounts, large dividend yields. UM.
Speaker 1: You know, some of those companies that have been affected
Speaker 1: would be technology companies UM in in China. UM. Those
Speaker 1: are some of the things that we've looked at. UM.
Speaker 1: There's also a lot of other examples. But really, UM, Lisa,
Speaker 1: the key thing to bear in mind is we're not
Speaker 1: trying to predict particular outcomes. We don't think that anybody can.
Speaker 1: I think our approach is really too buy uh when
Speaker 1: we feel that a worst case scenario has been priced in. UM.
Speaker 1: Some days, you know, these stocks will trade as if
Speaker 1: there's never going to be a trade deal. And then
Speaker 1: on other days the market is euphoric and it's pricing
Speaker 1: in a very good outcome. And on those occasions we're
Speaker 1: gonna be lightening up the position or we stopped buying.
Speaker 1: But if a worst case scenario is priced in, then
Speaker 1: we're active in the market. UM using a flexible and
Speaker 1: nimble approach to investing in these companies. So all of
Speaker 1: a sudden that you recently took a trip business trip
Speaker 1: through Asia over the STUMMAC, it's a sense of so
Speaker 1: you'r key takeaways there because clearly you know that the
Speaker 1: uncertainties of trade between the US and China, you know,
Speaker 1: really key to I think investors psyches now. Yes, UM,
Speaker 1: I was in seven cities in Asia a couple of
Speaker 1: months ago, and I think the striking thing to notice that,
Speaker 1: you know, if you go to mainland China, whether it's Shanghai,
Speaker 1: Beijing or Shansin, you know, the the admustry is very different.
Speaker 1: I think there's a feeling of calm, there's a feeling
Speaker 1: of you know that the economy has the capability to
Speaker 1: withstand some of these external shocks. UM. So the feeling
Speaker 1: that we get from mainland China is very different. But
Speaker 1: across the border in Hong Kong, UM, my witness firsthand
Speaker 1: some of the protests that have been taking place and
Speaker 1: the disruptions to normal business operations um. And just kind
Speaker 1: of to Lesa's point earlier, this has given way to
Speaker 1: some opportunities in the retail industry. Uh, some of the
Speaker 1: banks in Hong Kong, you know, showing very good value. Um.
Speaker 1: And we're not exactly sure how the protests will end
Speaker 1: or how it's going to conclude, but if you look
Speaker 1: at the history, these protests have been episodic. They come
Speaker 1: and go. Uh, there's going to be some kind of
Speaker 1: resolution over you know, the shorter or medium term. And
Speaker 1: you know that has created opportunities as well. You know,
Speaker 1: I'm wondering if there has to be a base case
Speaker 1: when it comes to some of these geopolitical occurrences when
Speaker 1: you're making decisions about whether something is undervalued or overvalued,
Speaker 1: because you know, I mean, at any given point, the
Speaker 1: the outcome could be completely bifurcated and lead to completely
Speaker 1: bifurcated market results. So how what what is your sort
Speaker 1: of base case for the next twelve months. Yeah, I
Speaker 1: think the base case is that the US China relationship,
Speaker 1: you know, whether it's the economic relationship, whether it's the
Speaker 1: trade relationship, is too important for the global economy for
Speaker 1: there to be you know, a sustained adverse outcome, right,
Speaker 1: so you can see that, uh, you know, particularly for
Speaker 1: the US point of view. You know, the terrorists starting
Speaker 1: to have a negative impact. So the trade war has
Speaker 1: kind of shifted to other areas right looking at UM,
Speaker 1: you know, American capital going into Chinese capital markets, things
Speaker 1: like that. So the exact form of these tensions can change,
Speaker 1: the shape can shift. But then the longer term base
Speaker 1: case over the next twelve months is that the relationship
Speaker 1: is too important. There will be some kind of resolution
Speaker 1: or de escalation, And that is kind of the base
Speaker 1: case that we use UM to value some of the companies.
Speaker 1: And then if there's a significant down draft or deviation
Speaker 1: that is priced in that we don't think will hold
Speaker 1: over the next three or five years, then that would
Speaker 1: be a buying opportunity. Of course, you know, our approach
Speaker 1: would allow for some of these estimates uh to change,
Speaker 1: you know, if if the information and situation changes. Is dynamic,
Speaker 1: So we're not holding to any one particular scenario, but
Speaker 1: trying to have a flexible approach and the factor in
Speaker 1: some of the you know, any lasting developments into our
Speaker 1: base case. So it's interesting because you say that this
Speaker 1: sort of base cases is that you know, we do
Speaker 1: get something. I do wonder though, what we're seeing right
Speaker 1: now is the lack of certainty itself weighing on economic
Speaker 1: growth and activity. How do you factor that in? You know,
Speaker 1: it's it's really kind of the deviation from uh, you know,
Speaker 1: the base rate of growth. Right, so China should grow
Speaker 1: at about six percent maybe that decelleries by twenty five
Speaker 1: or fifty basis points uh in the next twelve months,
Speaker 1: and in the US maybe trend growth rate it's kind
Speaker 1: of around two percent. So there's certain base case estimates
Speaker 1: that uh, you know, the markets are looking for, and
Speaker 1: you know, um, some of these events have a very
Speaker 1: short term negative impact on some of that, uh, some
Speaker 1: of the trend growth rates. Right, So the base case
Speaker 1: hasn't really changed it's just that um there's a lot
Speaker 1: of short term volatility and geopolitical events that can cause
Speaker 1: oscillations around that base case, and it's these oscillations that
Speaker 1: create market volatility that give rise to opportunity. Louis Loud,
Speaker 1: thank you so much for being with us. Louis law
Speaker 1: is protfolio manager and member of the Emerging markets investment
Speaker 1: community at Brandis Investment Partners in Love San Diego, or
Speaker 1: I do not think that they are preparing for in
Speaker 1: our easter like we are here. Let's talk retirement. Let's
Speaker 1: talk about whether you want to do it and whether
Speaker 1: you can do it. Ever, let's speak with Josh Jelinski.
Speaker 1: He's president of Jelinski Advisory Group, joining us here in
Speaker 1: our Bloomberg Interactive Broker Studio. You have a new book,
Speaker 1: Retirement reality Check. I'm just gonna go out on a
Speaker 1: limb here and assume it's not a reality check that
Speaker 1: you've got plenty and you're great. Well, it could be both.
Speaker 1: You could have a lot and not know what to
Speaker 1: do with it. You could have a significant amount saved
Speaker 1: and not of a tax plan, not of a strategy
Speaker 1: to convert your assets to income when you're retired. So
Speaker 1: there's the reality check for those who have money, and
Speaker 1: then there's the reality check for those who have not
Speaker 1: saved you know, ten to fifteen percent and their four
Speaker 1: one k or who have come in a lot of
Speaker 1: money due to maybe a sale of a business, but
Speaker 1: there is a savings dearth Fidelity came out with a report,
Speaker 1: you know, the average four one case fifty grand to
Speaker 1: their name, which is shocked. It is so Josh, you know,
Speaker 1: I have my children earning the workforce right now, and
Speaker 1: the I think the probably hopefully the best piece of
Speaker 1: advice I gave them was four oh one k started
Speaker 1: today maximizer contributions. What percentage of people would you say
Speaker 1: are really not prepared for retirement financially? I would say
Speaker 1: about yeah, because I saw that statistic recently that a
Speaker 1: big percentage of Americans could not come up with a
Speaker 1: four million sorry four dollar just emergencies or you know,
Speaker 1: a thousand dollars for emergency, so that I think it
Speaker 1: was like percent of Americans. Yeah. So what is the
Speaker 1: most important advice you have for people as they think
Speaker 1: about retirement, you know, whether they're young or whether they're
Speaker 1: may be closer to retirement. Number one, just start save
Speaker 1: ten to fifteen percent of your paycheck. A lot of
Speaker 1: people they stop at fifty and they go, well, I
Speaker 1: have fifty grand. I'll never amount to anything, so I'm
Speaker 1: not gonna save anything. And if you save, you know,
Speaker 1: tend to fifteen percent of your pay now. We we
Speaker 1: we do have a section for millennials, people in their thirties, twenties,
Speaker 1: forties to start now and then to do it in
Speaker 1: a tax smart manner. In the book, we have eleven
Speaker 1: tax smart tips for how to capitalize on the Trump
Speaker 1: tax plan and other things. I'd like to be a
Speaker 1: pain in the neck, So I'm gonna I'm gonna take
Speaker 1: the other side of this. There are all these people
Speaker 1: screaming that too many people over in China save. People
Speaker 1: are talking about the savings rate, and how could be
Speaker 1: a problem if people aren't actually putting their money into
Speaker 1: the economy, and if they're not necessarily investing in themselves.
Speaker 1: And I'm not talking about incurring more student debt, but
Speaker 1: making life easier. For example, if you've got children's that
Speaker 1: you can continue to work even if it means less
Speaker 1: income in that short period. How do you sort of
Speaker 1: square those sort of conflicting feelings of sort of the
Speaker 1: dynamis of the economy in the near term versus being
Speaker 1: prudent for the long term. Well that's great. We actually
Speaker 1: have a macro economic approach to people's money where we
Speaker 1: treat money less like a personal checkbook and more like
Speaker 1: a macro economy, and that we have three key focuses.
Speaker 1: We want to focus on asset protection, savings, and growth.
Speaker 1: But yeah, there is a conflicting thing where when you're
Speaker 1: looking at the macro economic data, we want people to
Speaker 1: be spending their money, but then in reality people have
Speaker 1: to avoid buying stupid stuff. I mean, if you think
Speaker 1: about today, people have Netflix subscriptions and cable bills, they
Speaker 1: have cell phone bills and they I mean, and they
Speaker 1: have this subscription and that you know, they got to
Speaker 1: cut the cord though. I mean, it's good for the
Speaker 1: macro economy, bad for the micro economy. So what you know,
Speaker 1: people are are living longer these days, Uh Josh, So
Speaker 1: do they need they I guess they did. They need
Speaker 1: more money. So I mean, is there a sense of
Speaker 1: kind of what people need today for a decent retirement
Speaker 1: versus maybe a generation or two ago. I think people
Speaker 1: a generation or two ago spent a lot less, so
Speaker 1: they need needed less to retire. They also had pensions.
Speaker 1: A whole section on the book in my book Retirement
Speaker 1: Reality Check is on how to convert your assets to income.
Speaker 1: And we have a lot of people who don't have
Speaker 1: a pension, so they need greater assets because they have
Speaker 1: to convert their four one case too, to a pension
Speaker 1: like stream of investment income when they retire. Definitely, what
Speaker 1: age do you think people really ought to retire at
Speaker 1: this point or expect to retire barring some boon from
Speaker 1: a wonderful period in their business life. Maybe, uh, I
Speaker 1: don't know, sixties, seven, seventy. But more and more people
Speaker 1: are working longer. I mean, you know, you know, more
Speaker 1: and more people are practicing the phrase welcome to Walmart.
Speaker 1: They're finding joy a lot of people. I mean, if
Speaker 1: you look philosophically, even back in Biblical days, you know,
Speaker 1: the Bible mentions no mention of the concept retirement. That's
Speaker 1: because everybody was dead at seventy so and social Security
Speaker 1: came out when the average life expectancy was I think
Speaker 1: like fifty two, and so you were typically like in
Speaker 1: today's age, it would be eighty. If we went back
Speaker 1: to the original concept of the social safety net. So
Speaker 1: the social safety net, I mean, what percentage of the
Speaker 1: US population you think relies on that? Probably too much.
Speaker 1: I think more and more retirees are solely I'm I'm
Speaker 1: I'm hearing people you know, called my radio show because
Speaker 1: we have a show, and they I mean, there's like
Speaker 1: I would say, are reliant on social security. Boomers did
Speaker 1: a very poor job saving for retirement. And and that's
Speaker 1: the importance of a retirement reality check, so you can
Speaker 1: spend all your money without going broke in retirement. Interesting.
Speaker 1: Josh Jelinski, thanks so much for joining us. Josh's President
Speaker 1: Jelinski Advisory Group, joining us here in our Bloomberg Interactor
Speaker 1: Broker studio talking about his new book, Retirement Reality Check.
Speaker 1: And look, it's so important to save earlier. I think
Speaker 1: that I'm coming at this. I always was, you know,
Speaker 1: putting stuff aside and preparing for the future, and I
Speaker 1: think it's important to do it. I think there needs
Speaker 1: to be a balance though too right, I mean, but
Speaker 1: I don't I guess that most people don't, do you
Speaker 1: know everybody. I'm sure everybody has their their different financial position.
Speaker 1: But I think that again, as I tried to you know,
Speaker 1: impart to my children is nder the workforce is the
Speaker 1: importance of saving for retirement four win k H. And
Speaker 1: how it's such a powerful savings tool that a lot
Speaker 1: of corporations corporate America in the absence of a defined
Speaker 1: pension plan. Uh, it's really the way you have to go.
Speaker 1: So very interesting, Josh, thanks so much for joining us
Speaker 1: well here at our Bloomberg World headquarters in New York City.
Speaker 1: Today we are hosting the Bloomberg Canadian Fixed Income Conference,
Speaker 1: bringing together leaders and financiers looking at the Canadian market.
Speaker 1: Joining us today is Rod Phillips, the Finance miss Minister
Speaker 1: for Ontario, Canada, joining us here on a Bloomberg in
Speaker 1: Active broker studio. Rod, thanks so much for being with us.
Speaker 1: Give us a sense of you know, our financial you
Speaker 1: know our economy here in the US. You know it's
Speaker 1: chugging along pretty well to two and a half percent,
Speaker 1: but slowing. Give us a sense kind of the economic
Speaker 1: backdrop facing Canada these days. Paul Lisa, thanks for having me.
Speaker 1: It's great to be on Bloomberg. You know, Ontario and
Speaker 1: Canada generally are our significant connection in terms of economically
Speaker 1: used the United States. So so as your economy goes that,
Speaker 1: that certainly supports growth. For for Ontario. A lot of
Speaker 1: people don't realize, but nineteen States were the number one
Speaker 1: trading partner. So so when we see the kind of
Speaker 1: hot economy having the United States, we're seeing that replicated.
Speaker 1: Uh in Ontario. We have, you know, our unemployment rate
Speaker 1: that just the last month was fivete which by our
Speaker 1: standards is fairly low. We have two thirty thousand jobs
Speaker 1: since last June year ago June that we're created. So
Speaker 1: so you're seeing a growing economy, particularly um hot from
Speaker 1: a development point of view. Uh. You know, we were
Speaker 1: four cranes across North America. The construction cranes are in
Speaker 1: the g t A. So a lot of that kind
Speaker 1: of growth and development comes a lot from a lot
Speaker 1: of very positive immigration statistics we have. So g t A.
Speaker 1: I'm going to just infer is the general Toronto area?
Speaker 1: Is that correct? The great there we go? Not in
Speaker 1: general the Greater Toronto area. I'm wondering about Toronto at
Speaker 1: the housing market in particular, because there's been a lot
Speaker 1: written about how high prices had gotten and how people
Speaker 1: were getting priced out of the region. Can you tell
Speaker 1: us a little bit about where we are. We have
Speaker 1: seen a little bit of a resurgence there with respect
Speaker 1: to some of your measures to discourage foreigners from just
Speaker 1: buying for investment. You know, there's no question affordability had
Speaker 1: become an issue in the Greater Toronto area. We've brought
Speaker 1: in some policies to to free up the capacity to develop,
Speaker 1: obviously being sensitive about environmental concerns and otherwise, uh, some
Speaker 1: of the some of the measures that both the federal
Speaker 1: government had taken in the previous government to to uh,
Speaker 1: you know, to limit that kind of growth. Some of
Speaker 1: some of them been helpful, some have gotten in the
Speaker 1: way of greater supply. We really see this as a
Speaker 1: supply issue, and so so you know, we've been trying
Speaker 1: to to encourage about somewhere around. Of all the immigrants
Speaker 1: that come to UH, to Canada, come to Ontario, and
Speaker 1: the biggest portion of those come to the Greater Toronto area.
Speaker 1: UM So that's fantastic from an economic point of view
Speaker 1: in terms of giving us a great base to grow
Speaker 1: the economy from. But but you know, keeping housing affordable
Speaker 1: is one of the things that we're really focused on.
Speaker 1: How much pushback have you gotten from residents in Toronto
Speaker 1: with the development, because this is always the push pull
Speaker 1: in cities, right, don't over develop us, don't crowd our schools,
Speaker 1: and yet housing is unaffordable, so what are you gonna do? Yeah,
Speaker 1: it is always that tension. Everybody always wants to have
Speaker 1: the last new house in a particular neighborhood. And and uh,
Speaker 1: but but I think this is a This is an
Speaker 1: area of our country that has has grown dramatically because
Speaker 1: we've been fairly effective at at integrating newcomers into into
Speaker 1: into the economy and otherwise. Um again that you know,
Speaker 1: as long as there's jobs and economic opportunity, UM it is,
Speaker 1: it's it's just net positive for most people. But listen,
Speaker 1: we are We've got ninety billion dollars for spending on
Speaker 1: transit and transportation infrastructure. You know, that's specifically focused on
Speaker 1: dealing with the congestion that inevitably comes with this. UM.
Speaker 1: We have has had an aggressive policy around making sure
Speaker 1: there's more housing supply. You know, it was an urgent
Speaker 1: need of those things happening. And then when it comes
Speaker 1: to things like education and healthcare, big investments there in
Speaker 1: the tens of billions of dollars to make sure that
Speaker 1: the infrastructures in place. So those immigration statistics quote are
Speaker 1: very interesting to me. How is immigration into Ontario and
Speaker 1: kind of a broadly changed over the last several years
Speaker 1: with the Trump administration and kind of the changing policies
Speaker 1: here in USA. You know, it has UH has definitely
Speaker 1: caused a couple of effects on the in terms of
Speaker 1: the side of terms of refugees. We we had through
Speaker 1: Quebec and through Ontario an increase in people leaving because
Speaker 1: of some of the Trump policies. UM. But I'll say
Speaker 1: also on the side of some of the most skilled
Speaker 1: and valuable immigrants we've we've seen an uptick in terms
Speaker 1: of interest whether it comes to our universities or high
Speaker 1: tech firms. We have quite an AI hub in in Toronto.
Speaker 1: In fact, tomorrow I'm hosting an AI round table with
Speaker 1: a number of local companies here in New York UH
Speaker 1: that that are looking because of our education system, because
Speaker 1: of the number of data scientists we have expanding UH
Speaker 1: the operations they have in Ontario and UH and that
Speaker 1: I think that's about the quality of life that we
Speaker 1: have as well as you know, as having capital markets.
Speaker 1: I mean, as you guys would know Toronto is the
Speaker 1: number two capital market in North America, so there's access
Speaker 1: to capital for a lot of entrepreneurs. Rod Phillips, thank
Speaker 1: you so much for joining usable that I want to
Speaker 1: be called the Honora Police. I think at that of life, right,
Speaker 1: I love that. You love that? Yes? Do you make
Speaker 1: your your family call you the honorable? Only on weekends?
Speaker 1: Do people really call you? Do they call you honorable
Speaker 1: Phillips or honorable Rock? Usually just rot? But but but
Speaker 1: it's you know, it's one of the you know, there's
Speaker 1: there's so many benefits to being in politics. Definitely one
Speaker 1: of them is the title the honorable, the honorable Paul
Speaker 1: Sweeney think it works better than the Honorable Lisa Broadways.
Speaker 1: That does not roll off the tongue at all. Rod Fellows,
Speaker 1: Finance Minister, Ontario, Canada, joining us here in a Bloomberg
Speaker 1: and Act Up broker studio, thank you so much for
Speaker 1: joining us. Let's talk Puerto Rico since this has been
Speaker 1: a hotbed of activity on the investment side over the
Speaker 1: past couple of years as people try to figure out
Speaker 1: now after the hurricane, how rebuilding the island will affect
Speaker 1: its finances. Remember, it did have to file for bankruptcy restructuring.
Speaker 1: Joining us now Ricardo Alvarez Diaz. He is founder and
Speaker 1: principle of Alvarez Diaz and vill Alone. He is based
Speaker 1: in San Juan, Puerto Rico, but he is joining us
Speaker 1: here in our bloom Brignner Active Progress Studios. Ricardo, you
Speaker 1: focus a lot on the rebuilding effort. Just when we
Speaker 1: start with how is it going, Well, it's going a
Speaker 1: lot better than what a lot of people are hearing.
Speaker 1: I mean. The challenge we have, of course is the
Speaker 1: uncertainty of what's going to happen with the funding itself.
Speaker 1: I mean, because we we have been assigned a certain
Speaker 1: amount of funding for the island federal funding sere funding specifically,
Speaker 1: which is a community development block grounds from hot and
Speaker 1: Fema um Um from the hot side. The first trench
Speaker 1: of money has come in and and things are starting
Speaker 1: to move a little fast. But at the same time,
Speaker 1: the reality is that that's one point five billion dollars
Speaker 1: out of out forty two billion dollar promise. So there's
Speaker 1: a lot to we learned. So give us a sense of,
Speaker 1: you know, how far back the island has recovered since
Speaker 1: the hurricanes. Is there's a percentage which just give us
Speaker 1: a sense of how far back it's come and how
Speaker 1: far left it has to go. Well, I would say that, uh,
Speaker 1: eighty five percent has has come back up to where
Speaker 1: we were before the hurricane. And let's not say much
Speaker 1: because we were a challenge before the hurricane when it
Speaker 1: comes to infrastructure. So just because we're there doesn't mean
Speaker 1: that we're great. It just means that we're back to
Speaker 1: where we were. Where we need to focus now is
Speaker 1: where we're going to want to be, and that's where, uh,
Speaker 1: the infrastructure investments on how we planned the next fifteen
Speaker 1: and thirty years of Puerto Rico are going to matter.
Speaker 1: There's a big question mark about who's going to live there,
Speaker 1: and one thing that we kept reading articles about was
Speaker 1: the exodus of people from the island after the hurricane.
Speaker 1: Has that sort of stabilized, you're starting to see population
Speaker 1: growth even well not growth, but after the hurricane, we
Speaker 1: lost around four hundred thousand people. Um, now that's typical.
Speaker 1: If if you look at what happened in Katrina, that
Speaker 1: was it was around two fifty thou people and it's
Speaker 1: it's a it's similar to what happened in put Rico.
Speaker 1: Because of the fact that schools were not open and
Speaker 1: families needed to but that that was a significant proportion
Speaker 1: of the entire islands population. And it's somewhat like or something. Well, no,
Speaker 1: there's three point two million people in Puerto Rico. So
Speaker 1: but but by now around three has returned now, so
Speaker 1: we are down maybe seventy five thousand from the people
Speaker 1: that left originally after a hurricane. But this matters a
Speaker 1: lot because the island has more than seventy billion dollars
Speaker 1: of debt. It needs a certain level of economic activities
Speaker 1: that right, Yeah, it matters enormously. That's why one of
Speaker 1: the challenges we've seen with the Fiscal Board itself is
Speaker 1: that they have been focused rightly on trying to, you know,
Speaker 1: manage the fiscal situation Puto Rico. But at the same time,
Speaker 1: there's um A Title five out of the promiss a
Speaker 1: law that is focused on economic development. And part of
Speaker 1: the problem is that they have we have not been
Speaker 1: focused enough when it comes to that with a common
Speaker 1: economic development from the side of the federal government. Now
Speaker 1: private center is a little different, and that's something we
Speaker 1: need to talk about because I I find myself I'm
Speaker 1: always talking about the bond situation and what happened to
Speaker 1: Puerto Rico before the hurricane UM, and that was basically
Speaker 1: the local government. I mean, there's a lot of robust
Speaker 1: private sector businesses, but one of the challenges we we
Speaker 1: we've dealt with is you know, and by the way,
Speaker 1: I say this all the time, we should get every
Speaker 1: single private sector company like myself, our company that has
Speaker 1: thrived in the last thirteen years of puer Rico should
Speaker 1: get an award, because after thirteen years of recession is
Speaker 1: a big thank you. I just got an award. UM.
Speaker 1: But at the same time, what I want to focus
Speaker 1: in that the private sector is looking at something that
Speaker 1: maybe UM, people should be should be listening to before
Speaker 1: the hurricane. Uh. Companies were losing trust and faith in
Speaker 1: the island after the hurricane, even though let's remember that
Speaker 1: over three thousand people died and that's more people than
Speaker 1: nine eleven UM. But what that did is that a
Speaker 1: lot of company, we we got a lot of attention
Speaker 1: worldwide that wasn't only about the fact that we were,
Speaker 1: you know, bankrupt, and people were interested in, well, what's
Speaker 1: Puerto Rico, what's happening in Puerto Rico? And people are
Speaker 1: doubling down some companies that have invested in assets are
Speaker 1: really reinvesting in the island, especially in hospitality and real state.
Speaker 1: UM of course knowing that there's gonna be some serious
Speaker 1: federal funding coming in to reinvest in long term infrastructure.
Speaker 1: So give us a sense of that federal funding. I
Speaker 1: think you mentioned forty two billion dollars. It's been out
Speaker 1: a couple of years since the hurricane. What's what's the
Speaker 1: timing and what has to happen for that money to
Speaker 1: be released? Well, a couple of things. When if we
Speaker 1: focus on Hodd specifically, UM, almost twenty billion dollars have
Speaker 1: been assigned to Puerto Rico, but out of those twenty
Speaker 1: billion dollars, only one point five billion has been disbursed
Speaker 1: another one point five billion, around two hundred million dollars
Speaker 1: have been actually utilized. What that tells you is that, UM,
Speaker 1: there's a lot of money that needs to be brought
Speaker 1: in and a lot of investments that need to be
Speaker 1: focused in. Now, what are the next steps HODD needs
Speaker 1: to UM. Dr Carson on the team at HARD needs
Speaker 1: to They need to sign UM what's called it grant
Speaker 1: agree meant for the next eight point two billion dollars,
Speaker 1: and that hasn't been done. Uh, and you know there's
Speaker 1: many reasons why now we have a monitor that was
Speaker 1: imposed on Puerto Rico. UM. And as an investor, I
Speaker 1: believe that having a monitor gives a certain degree of
Speaker 1: confidence to the investors. But at the same time, it
Speaker 1: has been very slow. UM. I believe that it will
Speaker 1: get a lot better first and second quarter next year,
Speaker 1: but the the the process has been sadly, like a turtle,
Speaker 1: very slow. So I want to talk about from your side.
Speaker 1: You work on development, correct, yes, okay, So how much
Speaker 1: interest do you get from international investors given the government
Speaker 1: track record? I feel an incredible amount of defensiveness. Guys
Speaker 1: were different were the private sector. We're going to manage
Speaker 1: it differently. We're not bankrupt. I mean, do you still
Speaker 1: have to make that pitch every single time you talk
Speaker 1: to anyone of course, listen, it's like everything. I mean,
Speaker 1: I think one of the biggest successes we've had. And
Speaker 1: I'm not only the president of Alvers alone, we I
Speaker 1: also was appointed by the governor as as a member
Speaker 1: of invest Puerto Rico. So my job is to get
Speaker 1: out there and try to bring investments to the island,
Speaker 1: and and and the thing I get all the time
Speaker 1: is that when we get people down there there in
Speaker 1: shock in a positive way, their surprise, they had no idea.
Speaker 1: I mean, listen, only thirty five percent of the people
Speaker 1: in the mainland New Puerto Ricans were your citizens before
Speaker 1: the hurricane, So there there's a lot of misconception and
Speaker 1: lack of knowledge about a line. And if by the way,
Speaker 1: it doesn't help when you have situations within government either
Speaker 1: number one being bankrupt I'm number two when this summer
Speaker 1: we've had a governor stepping down. Uh, so you know,
Speaker 1: we're dealing with some of those issues. But I I
Speaker 1: think that that's okay because it's just the beginning of
Speaker 1: what we're gonna see in the next couple of years. Uh,
Speaker 1: that you're gonna see a Puerto Rico that's gonna start
Speaker 1: to come out a lot better. And I don't know
Speaker 1: how you how you guys feel about this, but in general,
Speaker 1: I'm almost more excited about the private sector that the
Speaker 1: public sector. So when you see the private sectors starting
Speaker 1: to win, did it's a good thing. Ricardo Avis Diaz,
Speaker 1: founder and principle of Avarez DS and Ville Loan from
Speaker 1: San Juan, Puerto Rico, joining us here on our Bloomberg
Speaker 1: Interactive Broker Studio, giving us the latest on Puerto Rico.
Speaker 1: What is going on there in the rebuilding process that
Speaker 1: continues after Hurricanes Irma and Maria devastated the island several
Speaker 1: years ago. Getting an update there. Thanks for listening to
Speaker 1: the Bloomberg P and L podcast. You can subscribe and
Speaker 1: listen to interviews at Apple Podcasts or whatever podcast platform
Speaker 1: you prefer. Paul Sweeney, I'm on Twitter at pt Sweeney.
Speaker 1: I'm Lisa Bramloy. It's I'm on Twitter at Lisa bram
Speaker 1: woits one before the podcast. You can always catch us
Speaker 1: worldwide on Bloomberg Radio