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Speaker 2: Joining us speaking of is George Ferguson. He's senior Aerospace,
Speaker 2: Defense and Airlines analyst at Bloomberg Intelligence, and he joins
Speaker 2: us from Princeton, New York, OURVII headquarters over there in
Speaker 2: New Jersey.
Speaker 3: What did I say, Princeton, New York?
Speaker 4: I did?
Speaker 3: Yeah, sorry, coffee, coffee.
Speaker 5: I haven't had that second cup because it was delayed.
Speaker 5: I'll get you.
Speaker 2: Well, the eleven o'clock hour will be a good hour
Speaker 2: for me. So Boeing is having a lot of issues.
Speaker 2: The CEO will be facing leaders in Congress today. There
Speaker 2: was also Later's whistleblower report that alleged to the planemaker
Speaker 2: mishandled and lost track of hundreds of faulty parts, some
Speaker 2: of which had been in may have been installed in
Speaker 2: some new seven thirty seven Max planes. George, Well, okay,
Speaker 2: there's so many questions, but what is Dave Calhoun today
Speaker 2: going to face from Congress and then in the light
Speaker 2: of these consistent whistleblower claims.
Speaker 6: So my guess is that what Dave Calhoun's going to
Speaker 6: say today's going to stick to the script. He's going
Speaker 6: to say they're working on fixing all these problems. He'll
Speaker 6: probably you know, not be able to confirm or deny
Speaker 6: sort of individual reports. We saw the report come out,
Speaker 6: you know, the Boeing They gave us a summary of
Speaker 6: what they provided to the FAA and their action plan,
Speaker 6: you know, for improving the production process. It included things like,
Speaker 6: you know, making sure they appropriately tracked faulty parts and
Speaker 6: didn't put them in airplanes. So my guess is there
Speaker 6: were some situations where this was a problem. But again,
Speaker 6: I think he's not going to give a lot of
Speaker 6: specifics today in front of Congress. I think it's he'll
Speaker 6: stick to the script, is a plan out to fix it,
Speaker 6: and they'll say, we got the plan and we're going
Speaker 6: to drive on that plan.
Speaker 3: Hey, George, I know from speaking to you in the
Speaker 3: past and reading some of your research, one of the
Speaker 3: challenges as it relates to quality is outsourcing. You know,
Speaker 3: Boeing over the last number of years, ten twenty years,
Speaker 3: is maybe outsource a little bit more of their production,
Speaker 3: their parts and so on to third parties, and that
Speaker 3: may be introducing some more risk into their process. How
Speaker 3: are they talking about some of their outsourcing strategies.
Speaker 6: So in that same report, right, they talk about inspections
Speaker 6: at suppliers, they talk about monitoring quality at suppliers better.
Speaker 7: Yeah.
Speaker 6: I just think this is a it's a wholly different industry, right.
Speaker 6: I think there's a bunch of people that have come
Speaker 6: to the aerospace world from auto backgrounds and other mass
Speaker 6: production backgrounds, right, And in those worlds, safety isn't as important.
Speaker 6: Volume is a lot higher. You can get multiple suppliers
Speaker 6: to provide products to your production line, you can work
Speaker 6: cost on the suppliers, and I think that whole game
Speaker 6: plan is really really difficult to do in aviation. And
Speaker 6: I think this is part of what we're seeing. Right.
Speaker 6: I think you can outsource, but I think if you outsource,
Speaker 6: you know, you know, to your supplier base, I think
Speaker 6: it's still got to be you know, a pretty strong
Speaker 6: relationship with them, not a combative relationship where it's always
Speaker 6: about price, because it really matters the quality you get
Speaker 6: to your line right, safety is dependent upon it. And
Speaker 6: so I think what we're finding out as this sort
Speaker 6: of you know, whole Boeing saga unravels, is outsourcing and
Speaker 6: banging up your suppliers for price just isn't a winning
Speaker 6: strategy in aviation.
Speaker 5: Can have they course corrected enough? Or can they so?
Speaker 6: Look, I think they can. Everything can be fixed. I
Speaker 6: think if you look at their competitors across the pond, Airbus,
Speaker 6: they're not having these problems. I think Airbus has been
Speaker 6: less combative with some of their suppliers. They're in the
Speaker 6: middle of this correction. We know they want to buy
Speaker 6: Spirit Aerosystems. We're still waiting to hear news on that.
Speaker 6: There's still you know the challenge of getting some of
Speaker 6: the other companies that Spirit supplies, to name the Airbus
Speaker 6: probably out of the portfolio so they can recover. It's
Speaker 6: gonna it's gonna take some time. Uh, and it's gonna
Speaker 6: take a lot of work with our suppliers.
Speaker 3: So, George, if I think about, you know, rethinking my
Speaker 3: strategy with my suppliers and maybe focusing less on price
Speaker 3: competitives maybe a little bit more on quality, does that
Speaker 3: imply that Boeing's profit margins will be under pressure going forward.
Speaker 6: Yeah, I mean, I think I think for sure, right,
Speaker 6: I think you're you're not going to receive a return
Speaker 6: to the Boeing margins you saw at the end of
Speaker 6: last decade. I'm not gonna say ever, like in time,
Speaker 6: perhaps they could get back to that, you know, but
Speaker 6: I think it takes you know, it's it's gonna take
Speaker 6: a bunch of work here near term to improve the quality,
Speaker 6: and and that's going to cost money. Plus we already
Speaker 6: know that some of the business they've put in the books, right,
Speaker 6: they had some challenges delivering into China. That was kind
Speaker 6: of the one two whammy after they had the grounding
Speaker 6: of the Max and the crashes. We know they probably
Speaker 6: sold a bunch of airplanes for some pretty good prices
Speaker 6: to really core customers like United, like Southwest. So I
Speaker 6: think that I think both, you know, both on the
Speaker 6: cost side again, given this correction to improve the supply base,
Speaker 6: improve production, get get capacity rolling again, as well as
Speaker 6: some of the pricing they gave away on backfill for orders.
Speaker 6: Means you're not looking at a Boeing that's going to
Speaker 6: get those margins free through this decade.
Speaker 2: I think if I look at Boeing stock, then I
Speaker 2: mean it's down from December, it's down thirty four percent.
Speaker 2: Does that accurately reflect then this tighter profit margin world
Speaker 2: to sort of revamp and the course correcting that they
Speaker 2: have to do.
Speaker 6: So, you know, I think when you look at their valuations,
Speaker 6: you know, their historical valuations, One, they're really high right now,
Speaker 6: right because earnings are so low, you know, So I
Speaker 6: think that there is a little bit of investor look
Speaker 6: through at this point, you know, on the on the
Speaker 6: on the current problems they have, you know, but the
Speaker 6: sort of whether or not they're they're properly positioned for
Speaker 6: the out years right now. I think it's all a
Speaker 6: function of if they can you know, if they can
Speaker 6: quickly improve the build rate so they can improve economies
Speaker 6: of scale and start to get more profitability back into
Speaker 6: this business, and that, you know, really remains to be seen.
Speaker 3: George, you mentioned China. Where is Boeing in terms of
Speaker 3: getting the seventy three seven max in the air and
Speaker 3: China kind of how's that business looking in terms of
Speaker 3: sales and deliveries.
Speaker 6: So their deliveries going into China, right and uh, it
Speaker 6: looks to us to largely be deliveries that were you know, built,
Speaker 6: you know, when the seven three seven was grounded, and
Speaker 6: they're starting to get some of those back into the country.
Speaker 6: But China's also has this problem now with the flight
Speaker 6: recorder that's been authorized by other jurisdictions, including the US.
Speaker 6: So I mean it feels to me like China is
Speaker 6: allowing deliveries, but they still, you know, they're still not
Speaker 6: I don't know, maybe keen on taking a lot of
Speaker 6: deliveries from Boeing. I haven't seen a bunch of orders
Speaker 6: come in from China, you know, for Boeing. And so
Speaker 6: I would say that relationship still, while it's maybe thawing
Speaker 6: a bit, is nowhere near was it where it was
Speaker 6: in the last decade. And they have their problems too.
Speaker 6: Right now, I think they don't need as many airplanes,
Speaker 6: their economy isn't growing as fast, air travel isn't growing
Speaker 6: as fast. But I still think that relationship is not
Speaker 6: in the right place where it should be, where you'd
Speaker 6: like it to be. I think for Boeing.
Speaker 2: Before I let you go any word yet on and
Speaker 2: replacement for Dave Calhoun, Like, how's that going?
Speaker 7: He laughed?
Speaker 5: The answer is laughing.
Speaker 6: Yes, what I hear from news reports is picking up steam.
Speaker 6: But g I mean, I don't know, it's been a while.
Speaker 6: There's a lot of conjecture. It's a hard job. There's
Speaker 6: probably a lot of people that just aren't willing to
Speaker 6: take it. I don't know, you know, they got to
Speaker 6: the end of the year, and so maybe they're gonna
Speaker 6: use it all. I don't know.
Speaker 2: I mean, and anyone but Larry Cult that you keep
Speaker 2: hearing about, that's for real.
Speaker 6: So I don't really track the people that's you know,
Speaker 6: that's kind of hard for me. I do know, like
Speaker 6: it said, it's got to be a rock star manufacturing,
Speaker 6: you know, sort of CEO. I don't know that there's
Speaker 6: a lot of them left in America. I think we
Speaker 6: do a lot of outsourcing now, so maybe that makes
Speaker 6: it a taller order too. I don't know.
Speaker 5: All right, Hey, Georgia really appreciate it.
Speaker 2: George Ferguson, Bloomberg Intelligence senior Aerospace, Defense and Airlines analysts
Speaker 2: joining us in Princeton, New Jersey.
Speaker 5: Yes, who would have thunk? Yeah, it was a New
Speaker 5: Jersey and.
Speaker 3: You lovely home of hogi Haven, my favorite sandwich shop.
Speaker 5: Also up on that.
Speaker 3: Bowing down two percent today, down thirty three percent year
Speaker 3: to date. You know, it just feels like a stock
Speaker 3: No one wants to step in and really take a
Speaker 3: big position here until you see real signs of our
Speaker 3: turn around there, because it just feels like every day
Speaker 3: there's something coming out.
Speaker 2: And if you just time it out right, like say
Speaker 2: they do take the rest of the year to get
Speaker 2: a new CEO, like, let's just game that out for
Speaker 2: a second, then the new CEO has to come in right.
Speaker 2: Then it's a plan and it's going to be some
Speaker 2: kind of restructuring plan in that, like how we're going
Speaker 2: to manage the business, how we're dealing with suppliers. And
Speaker 2: then if you they do wind up buying a Spirit Aerospace.
Speaker 5: Then you got to integrate that. I mean that how
Speaker 5: long a process is that?
Speaker 7: Yep?
Speaker 3: Exactly, So I mean and is there a value here
Speaker 3: where it just says that I'm being compensated for that
Speaker 3: risk and that time and I don't know, and it
Speaker 3: just doesn't feel like it again. Stock down thirty three
Speaker 3: percent year to date.
Speaker 1: We're listening to the Bloomberg Intelligence podcast. Catch us live
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Speaker 2: All right, coming up, we're gonna talk to Jill Blanchard.
Speaker 2: She is president of Enterprise Client Solutions at Abandoned Solutions,
Speaker 2: and we're going to get the take here on retail sales.
Speaker 2: So retail sales barely did anything, and the narrative here
Speaker 2: is that the consumer is strained that they're going to
Speaker 2: buy stuff, but they're going to buy it on sale.
Speaker 5: The rub here is that.
Speaker 2: This is mostly a goods report versus what we're going
Speaker 2: to get when we get consumer spending a little later
Speaker 2: in the month, where that might be actually a services reports.
Speaker 2: There's still questions as to as to what the real
Speaker 2: read through is for the consumer.
Speaker 5: Jill, what are your thoughts?
Speaker 4: Yes, so hello and thanks for having me back. Yeah,
Speaker 4: you know, I think I'd lead off with one big word,
Speaker 4: and that word is cumulative. And so the effect of inflation,
Speaker 4: the slow rise and income the high interest rates are
Speaker 4: really having finally a cumulative effect on the consumer and
Speaker 4: it's a really big impact there's a big difference between
Speaker 4: inflation and affordability as well as inflation and high prices,
Speaker 4: and so as consumers tried to get used to high prices,
Speaker 4: if wages aren't keeping pace and they're not, it creates
Speaker 4: a pretty big gap and drives very different behaviors. So
Speaker 4: you mentioned promotions before, consumers are really doing a lot
Speaker 4: of different things. They're still spending, but they are price conscious,
Speaker 4: they're creative, they're selective. They are and I'm just going
Speaker 4: to walk through like a myriad of strategies. They're delaying purchases.
Speaker 4: They're trading down, whether that's a brand or a retailer,
Speaker 4: or a product or experience. They're shopping promotions, they're price
Speaker 4: shopping across retailer somethind of that consolidated trip. They're going
Speaker 4: to multiple retailers. They are cutting out or reducing discretionary spending.
Speaker 4: They're looking for larger sized products that have a more
Speaker 4: economical value. They are sharing bolt grocery shopping. Third of
Speaker 4: consumers are now doing that. A quarter of consumers are
Speaker 4: skilled big meals and buying unhealthier options because of high prices.
Speaker 4: So it's a lot of different strategies that we're seeing
Speaker 4: come to play.
Speaker 3: When do I don't know if we have any data
Speaker 3: back this up, are when do consumers get used to
Speaker 3: this new price level?
Speaker 5: Is it?
Speaker 3: Because it seems like we've been here for a few years,
Speaker 3: and you know, when do we get used to it?
Speaker 7: Yeah?
Speaker 4: That's interesting. So I'd say it's a tale of two
Speaker 4: economies right now. And so at the macro level, we're
Speaker 4: seeing in flaten now. But when you really get underneath that,
Speaker 4: healthier income households, you know, are you know, do do
Speaker 4: have a healthy spend? They're driving demand, but it's balanced
Speaker 4: out by by low and mid income households that are
Speaker 4: curbing their spending. Now that that does split spending, that's
Speaker 4: a shift from what we've seen over the past couple
Speaker 4: of years because spending was really fuel by pandemic era benefits,
Speaker 4: stockpile savings, the cessation of student loan repayments, and rapid
Speaker 4: wage increase, so a number of things that are either
Speaker 4: reduced or actually illuminated now creating a bifurcation in spending
Speaker 4: amongst income households.
Speaker 2: When we take a look at the spending problem, how
Speaker 2: do we understand it? Because slowing versus falling off a
Speaker 2: Cliff are different and they're going to have different reaction
Speaker 2: functions for the FED.
Speaker 5: What's the best kind of description.
Speaker 4: Slow? I mean nothing's going to happen fast, right, I say,
Speaker 4: there's two things to consider, you know. One is spending
Speaker 4: is never going to take a sharp turn in either direction.
Speaker 4: It's going to slowly turn in either direction. And there
Speaker 4: are multiple factors influencing that, you know, like the reduction
Speaker 4: in the pandemic, arab benefits and stockpile savings as well
Speaker 4: as you know, higher prices as well as a lower
Speaker 4: wage increases right now, interest rates. So there's so many
Speaker 4: things that really affect it. I think that we can,
Speaker 4: you know, continue to expect to see things happen slowly
Speaker 4: over time and not be surprised by what it is
Speaker 4: that we're seeing today. It's it's been building to this
Speaker 4: for for.
Speaker 5: Many many months.
Speaker 3: Cicadas, Oh what talk to us about cicadas.
Speaker 4: I will talk to you about cicadas. So here's something interesting,
Speaker 4: and this is you know, partly about cicadas. And I
Speaker 4: happen to live in a cicada part of the country.
Speaker 5: It's brutal out there, the shining.
Speaker 4: Well, so here's the thing we've talked about inflation, we
Speaker 4: talked about the slow rise in income, the high interest rates.
Speaker 4: Let's talk about the effect of on retail spending of
Speaker 4: extreme weather, which I know we've talked about before. We
Speaker 4: saw today that there's going to be record breaking temperatures
Speaker 4: in the Midwest and the Northeast. So it's it's extreme heat,
Speaker 4: it's flooding, it's fires, it's hurricanes, snowstorms, tornados. All of
Speaker 4: those things curb outside of the home activities, which are
Speaker 4: typically a soci stated with bigger ticket spending.
Speaker 1: So think of.
Speaker 4: Things like going to an amusement park or a concert
Speaker 4: versus watching Netflix, going to a lakehouse for the weekend
Speaker 4: versus staying home, going out to dinner versus staying home.
Speaker 4: So the effect the curb on out of the home
Speaker 4: activities will translate into a different and a less retail spend.
Speaker 4: So that's somewhat having to do with cicadas. I stay
Speaker 4: in because it is life as.
Speaker 5: Shining, really horrifying.
Speaker 3: Where where are you, Jill? Where is this happening?
Speaker 7: I am home.
Speaker 4: Based in the Chicago market. They're pretty brutal.
Speaker 5: Interesting, man, I didn't eve think about the sit here?
Speaker 7: Do we know? We do we do.
Speaker 5: Yeah, yeah, no, I mean, like not yet, but they're
Speaker 5: they're definitely gonna come.
Speaker 3: Yeah yeah, okay, But to.
Speaker 5: Your point about extreme temperatures.
Speaker 2: Too, because then you stay home and guess what, you
Speaker 2: pump the air conditioner because if you don't, you're dealing
Speaker 2: with one hundred degree heat and that is a huge bill.
Speaker 2: I mean, already my electricity bill has jumped by what
Speaker 2: by two just just for May and.
Speaker 5: It wasn't even that hot. So that's going to be
Speaker 5: another impact as well.
Speaker 4: Yeah, as well as think about the damage that comes
Speaker 4: from a flood or hurricane tornado. So yeah, it really
Speaker 4: drives dollars being spent elsewhere, as well as the fact
Speaker 4: that it curves outside the home spending.
Speaker 2: Talk about then, in terms of how loyal people are
Speaker 2: to brands, like is it just going to be a
Speaker 2: pure value trade, like the lowest price that you can
Speaker 2: give me is what I'm going to buy? Or do
Speaker 2: you feel like it's going to be very selective and
Speaker 2: brand loyalty matters.
Speaker 4: So I heard somebody call this right now, and I
Speaker 4: thought it was pretty clever that we're ing that we're
Speaker 4: entering into the air of brand co miscuity, where we
Speaker 4: are essentially buying short term loyalty, but we're really creating
Speaker 4: long term disloyalty. So all those promotions buy today, but
Speaker 4: they sacrifice tomorrow. Having said that, I'd say that retailers
Speaker 4: are looking at a number of strategies. So it's not
Speaker 4: just promotions, it's their amping up their loyalty programs, their
Speaker 4: digital offers, their private label offerings. And let's talk a
Speaker 4: little bit about everyday price, right, So Walmart and Target
Speaker 4: publicly said that they plan to reduce the everyday price
Speaker 4: on thousands of items. This is a great trip driving
Speaker 4: strategy to get the consumer into their stores, especially the
Speaker 4: consumers that are struggling to buy the basics every day.
Speaker 4: And it's a real shift in what we've seen over
Speaker 4: the past two to three years, and it might mark
Speaker 4: the beginning of a price war the likes of which
Speaker 4: we haven't seen since inflation took hold.
Speaker 3: So what are retailers trying to do here? I mean,
Speaker 3: are they are they? Are they trying to keep customers?
Speaker 3: Are they are they just looking at for their own margins?
Speaker 3: What are retailers strategy here?
Speaker 4: Oh? Yes, and yes and maybe even more yeses. It
Speaker 4: is less today about a pie that's growing and it's
Speaker 4: more about stealing share versus creating demand. So somebody's win
Speaker 4: is somebody's loss again, could be a brand, a retailer,
Speaker 4: or a product choice. And so retailers you know, are
Speaker 4: trying to are trying to get purchases and consumers that
Speaker 4: they might not normally get and or have recently lost.
Speaker 4: One of the things that we're seeing now that's really
Speaker 4: interesting is both manufacturers and retailers trying to sell you know,
Speaker 4: call it non traditional products and non traditional outlets. And
Speaker 4: so you could expect to see health and beautycare products
Speaker 4: at a Dick Sporting Good, maybe some more food products
Speaker 4: at a TJ Max, And so they're really trying to
Speaker 4: get new avenues and distribution to get those consumers in store.
Speaker 4: A flip version of that is if you look at
Speaker 4: the dollar channel, the dollar channel has traditionally owned that
Speaker 4: you know, that lower price point or that opening price point,
Speaker 4: that so many other retailers are now entering into the
Speaker 4: smaller pack sizes for that opening price point and really
Speaker 4: getting that volume from the dollar stores.
Speaker 5: Wow, that's really interesting. It's true.
Speaker 2: As a frequent user of TJ Max, I do notice
Speaker 2: that there are is more packaged food, the home good store.
Speaker 2: Oh my god, it's everywhere on the half of it
Speaker 2: feels like it's food. Now, just to wrap this conversation
Speaker 2: up as we go to sort of the Fed, let's
Speaker 2: just pretend the FED cuts one or two times this year?
Speaker 5: Did they say one? Market says two?
Speaker 2: Does that matter for the consumers that we are talking about.
Speaker 2: Does that materially change kind of what they buy and
Speaker 2: how they spend long term?
Speaker 4: Yes, near in, not as much as we would think.
Speaker 4: It will have a little bit of an effect. But again,
Speaker 4: cumulative is really the word of the day here, and
Speaker 4: that it takes a while for any of these effects
Speaker 4: to catch up to the consumer. So what we're seeing
Speaker 4: today is the effect of what's been happening over the
Speaker 4: past twelve to twenty four months, and so it will
Speaker 4: have an effect, but not as big of an effect.
Speaker 4: Near In.
Speaker 3: Hey, Jill, thanks so much for joining us. They really
Speaker 3: appreciate it. Joe Blanchard, president of Enterprise Client Solutions at
Speaker 3: Advantage Solutions, on Zoom from Cicada infested Illinois.
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Speaker 2: One other stock we're watching is Lenar, down by almost
Speaker 2: three percent. So there's a homebuilder and it forecasted that
Speaker 2: deals in the third quarter.
Speaker 5: Missed consensus expectations.
Speaker 2: And then Barkley's pointed out that if you take a
Speaker 2: look at their fourth quarter guidance, it implies a very
Speaker 2: large ramp up in gross margins in that quarter, and
Speaker 2: investors are a little skeptical as to whether or not
Speaker 2: that actually is going to happen. So no one to
Speaker 2: turn to but Drew reading Bloomberg Intelligence home builder analysts.
Speaker 2: He joins us now from Princeton, New Jersey. Hey, Drew,
Speaker 2: I don't know. I thought it was all like, we
Speaker 2: don't have enough supply.
Speaker 5: This is bullish for builders. So what happened?
Speaker 7: Well, I think you framed it perfectly. The story with Lenar,
Speaker 7: why the stock sound? Is it so much about what's
Speaker 7: happening with the volumes they deliver good orders? They're up
Speaker 7: nineteen percent, they maintain their four year guidance for eighty
Speaker 7: thousand home closings. It has to do with their outlook
Speaker 7: for gross margin, they guided to about one hundred basis
Speaker 7: points below what the street was looking for, and as
Speaker 7: you mentioned, that would work quire a ramp in the
Speaker 7: fourth quarter to about twenty five percent. So, like you said,
Speaker 7: there's definitely some skepticism and their ability to meet their
Speaker 7: four year outlook. The reason for that is because we
Speaker 7: saw rates move up as high as seven and a
Speaker 7: half percent during the quarter. You know, they've come back
Speaker 7: in a little bit, but we're seeing their need to
Speaker 7: incentivize buyers remain elevated, and that's what's impacting profitability.
Speaker 3: So where are we in that activity there? If I'm
Speaker 3: if I'm looking at a seven percent mortgage, what are
Speaker 3: they going to do for me?
Speaker 7: Yeah, So typically what we're seeing is that the builders
Speaker 7: will maintain a spread versus the headline rate. So if
Speaker 7: you're seeing seven and a half percent in the market,
Speaker 7: typically you're going to get six percent from a builder.
Speaker 7: You know, there are some other builders and depending on
Speaker 7: the market, depending on how strong the market is, what
Speaker 7: demand looks like, they could get you into the fives.
Speaker 7: But obviously that's going to cost them on the gross
Speaker 7: margin line. So the incentives they're using are certainly working,
Speaker 7: it's just what's the cost.
Speaker 2: So that one hundred percent the one hundred bases point miss,
Speaker 2: but then keeping their guidance for ro's margin for the year,
Speaker 2: that must imply that they're looking for rake cuts.
Speaker 7: Yeah, I think a lot of it has to do
Speaker 7: with what they're doing on the call side. One of
Speaker 7: you know, Lenar's emphasis for their business over the last
Speaker 7: several years has really been running a more efficient manufacturing
Speaker 7: based business where they're not necessarily just chasing volume, but
Speaker 7: they're doing it the right way. They're fine tuning their
Speaker 7: floor plans, they're pushing back on their suppliers. You have
Speaker 7: to remember they're one of the second largest builder in
Speaker 7: the country, but they're one of the only builders who
Speaker 7: has scale at the national level, so they're able to
Speaker 7: leverage that and kind of push back a little bit.
Speaker 7: So certainly some of the benefit that they expect in
Speaker 7: foro Q, I would assume is going to come from
Speaker 7: what they're doing on the calls side, as well as
Speaker 7: fixed leverage from higher deliveries. But nonetheless that's still going
Speaker 7: to be the focal point for investors is how do
Speaker 7: they get there?
Speaker 5: How much?
Speaker 3: I mean, I remember this back in the beginning of
Speaker 3: the pandemic, lumber went crazy. Where are we in lumber
Speaker 3: and help? How is that a part of their gross margin?
Speaker 7: Sure so, lumbers about ten percent of the cogs for builders,
Speaker 7: so it's certainly the most important input costs. As you
Speaker 7: would expect, you know, lumber prices have come back down
Speaker 7: a lot, so builders have been benefiting on the margin side.
Speaker 7: I think we've seen more stabilization of late, perhaps a
Speaker 7: little rise to the upside, but really lumbers not impacting
Speaker 7: the business in as significant a way as it was
Speaker 7: over the last couple of years.
Speaker 2: So KB home reports after the bell today, right, So
Speaker 2: what kind of company is KB home versus Lenar and
Speaker 2: has that set up KB home for today?
Speaker 7: Sure so, KB is predominantly focused on the entry level business.
Speaker 7: It's about fifty percent or more of their total sales.
Speaker 7: So in addition to just focus on broadly on the
Speaker 7: entry level, we look at what they're doing from an
Speaker 7: asp perspective to get a more holistic look. And they're
Speaker 7: actually one of the more affordably priced builders, particularly when
Speaker 7: you compare them to the resale market and against you know,
Speaker 7: their public peers. So I think from a pricing perspective,
Speaker 7: they're pretty well positioned, so they'll give us a good
Speaker 7: sense what's happening on the lower end of the market.
Speaker 7: With that being said, as you would expect, entry level
Speaker 7: buyers are much more price sensitive. They're more sensitive to
Speaker 7: that monthly payment and what's happening with rates. And we
Speaker 7: saw that earlier with a low end builder LGI Homes
Speaker 7: who's looking to take buyers out of a rental situation
Speaker 7: and put them into a home, and we saw relative
Speaker 7: weakness there. I think what you see from some of
Speaker 7: the other builders is maybe a little bit more of
Speaker 7: a higher end entry level buyer, maybe duel income who's
Speaker 7: waited a little longer to purchase. So there still has
Speaker 7: been relative strength, but we'll get a good read on
Speaker 7: that buyer today.
Speaker 3: What are the companies tell you about their expectations for
Speaker 3: interest rates mortgage rates? What are they think is going
Speaker 3: to happen?
Speaker 7: So I think the expectation broadly is that mortgage rates
Speaker 7: will start to come in a little bit as we
Speaker 7: get through the end of the year. I don't think
Speaker 7: they're managing their business for any you know, significant dropping
Speaker 7: rates back to you know where we were previously. But
Speaker 7: I think as a builder from a demand perspective, if
Speaker 7: we get rates coming back to the six and a
Speaker 7: half percent range, you know, that's pretty much a sweet
Speaker 7: spot for them. You know, we've heard that as you
Speaker 7: get to five and a half percent, that's really when
Speaker 7: demand in the market starts to move. So the fact
Speaker 7: that if we can get to six and a half
Speaker 7: they're buying down rates one hundred basis points, I think
Speaker 7: they'll continue to do well. And you know what's interesting
Speaker 7: is the public builders are kind of at the top
Speaker 7: of the food chain as it comes to housing. You
Speaker 7: have to realize they're generating about fifty percent market share
Speaker 7: compared to call it thirty eight percent prior to the pandemic, really,
Speaker 7: so they've really leveraged that lack of inventory in the
Speaker 7: resale market and the struggles among some of the smaller
Speaker 7: private piers, and they've capitalized on it.
Speaker 2: So when you say we have to the five and
Speaker 2: a half percent is kind of a nice sweet spot.
Speaker 2: So that implies the Fed Funds rated six and a
Speaker 2: half percent, and the home builders still give thee hundred
Speaker 2: bases point discount. When the Fed Funds rate gets to
Speaker 2: five and a half percent, do the builders still offer
Speaker 2: that one hundred basis point discount.
Speaker 7: I think it's going to depend on what the broader
Speaker 7: macro economic situation looks like. If we get a pullback
Speaker 7: in rates, you know, a modest pullback, and we are
Speaker 7: still dealing with a pretty solid labor market, I think that,
Speaker 7: you know, builders will be able to definitely pull back
Speaker 7: on their use of incentives. I don't know that they'll
Speaker 7: go away all together, because at this point that's something
Speaker 7: that buyers are looking to and it certainly made their
Speaker 7: product more attractive. If we get a significant pullback in
Speaker 7: rates and it's because you know, the economic situation has
Speaker 7: deteriorated further, that's obviously more of a concern and we
Speaker 7: would see them probably push incentives even harder.
Speaker 3: What kind of homes are builders building these days, Drue.
Speaker 3: Is it the mcmanson where they can get the big
Speaker 3: profit margin or are they building what the market actually needs,
Speaker 3: which is some of these entry lever homes.
Speaker 7: Yeah, that's a great question, and we've seen one of
Speaker 7: the primary ways that builders are addressing the affordability equation.
Speaker 7: It's through smaller square footage floor plans. It's a shift
Speaker 7: most of them have done. We've seen it over the
Speaker 7: last couple of years more targeted towards the entry level.
Speaker 7: Interestingly enough, you even have someone like a Toll Brothers,
Speaker 7: who you traditionally think of as that luxury builder within
Speaker 7: the builder space, they've shifted to what they call affordable luxury.
Speaker 7: Now it's still not something that the masses are going
Speaker 7: to be able to afford, but it's certainly a lower
Speaker 7: price point that, as I said before, is attracting those
Speaker 7: more well healed, duel income buyers. So every builder has
Speaker 7: kind of attacked affordability in a different way, but I
Speaker 7: think square footage has been something consistent across the group.
Speaker 2: We only have about like forty five seconds left, But
Speaker 2: what's a builder that's kind of pulling on all levers
Speaker 2: correctly right now?
Speaker 7: I think Lenar is actually an interesting case, and the
Speaker 7: while the guidance may have disappointed a little bit, they're
Speaker 7: really delivering on what they said they're going to do.
Speaker 7: They're focused on price over pace and they're willing to
Speaker 7: sacrifice a little bit of gross margin to do so.
Speaker 7: And the idea is that they're going to generate a
Speaker 7: ton of cash that they can use to pay down
Speaker 7: debt return case to shareholders, which is something investors obviously
Speaker 7: like all right, he Drew.
Speaker 5: Really appreciate it, really great stuff.
Speaker 2: You're reading a Bloomberg Intelligence joining us on the NARS Earning.
Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
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Speaker 3: The Alex Steel and Paul Sweeney were live here in
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Speaker 3: as well, So just head over to YouTube dot com
Speaker 3: and search for Bloomberg podcasts. Let's turn our attention to healthcare.
Speaker 3: How about this. Japan is dealing with rising cases of
Speaker 3: a disease caused by a rare flesh eating bacteria that
Speaker 3: can kill people within forty eight hours. Health authorities have
Speaker 3: reported over one thousand cases of streptocockle toxic syndrome. How
Speaker 3: about that as of early June, higher than the record
Speaker 3: nine hundred and forty one cases reporter for all of
Speaker 3: twenty twenty three. At the current rate of infection, experts
Speaker 3: fear the number of cases in Japan can reach twenty
Speaker 3: five hundred this year. For more on the story, we
Speaker 3: check out on Meshadalogia, Senior scholar at the Center for
Speaker 3: Health Security at John Hopkins Bloomberg School of Public Health. Uh,
Speaker 3: doctor Adalgia thinks, so much for joining us. Can you
Speaker 3: tell us about streptococcle toxic shock? What is it?
Speaker 5: N by the way I job tell us about it?
Speaker 8: So this is just this is Streptococcus is a bacteria
Speaker 8: that all of us have dealt with. It's the same
Speaker 8: bacteria that causes strep throat. What can happen though in
Speaker 8: certain individuals is it can be a much more severe
Speaker 8: infection where it can cause what we call, you know,
Speaker 8: necrotizing or flesh eating type of skin infections and then
Speaker 8: also spread systemically and cause multiple different organ systems to
Speaker 8: shut down. So that's when we use the kind of
Speaker 8: term toxic shocks. And it was said that bacteria basically
Speaker 8: disseminates toxins throughout your whole body and it's a very
Speaker 8: serious illness with high levels of morbidity immortality.
Speaker 5: Doctor, Is this new or is this always been the case?
Speaker 8: It's always been the case. But what's new is that
Speaker 8: in Japan post pandemic, they've reported at least two years
Speaker 8: where they've had higher than normal cases and trying to
Speaker 8: unravel the mystery of why that change in epidemiology occurred
Speaker 8: is what's getting headlines right now. But streptococcal toxic SHOCKSIM
Speaker 8: has been around forever. It's just this increase in Japan
Speaker 8: that people are interested in.
Speaker 3: How do the medical professionals, how are they treating this?
Speaker 8: So the mainstay is going to be antibiotics, but because
Speaker 8: it's this systemic toxin disease, we often give other drugs
Speaker 8: to modulate the immune system, and if there are elements
Speaker 8: of flesh eating disease going on, they basically have to
Speaker 8: do extensive surgery to kind of cut ahead of the infection.
Speaker 2: Oh my god, this sounds terrible. How quickly does this happen?
Speaker 2: I mean, you know strep can come on really quickly
Speaker 2: and it might take you a couple of days to
Speaker 2: realize that you have it.
Speaker 5: Like, what's the cycle for this?
Speaker 8: Well, when you get into that toxic shock syndrome spiral,
Speaker 8: it's very fast. They can be dramatic, you know, even
Speaker 8: in an hour can be a major difference in a patient.
Speaker 8: But It's important remember that not everybody that gets a
Speaker 8: strep infection is going to get it's still rare, and
Speaker 8: the most people who have a strep infection of their
Speaker 8: throat or if their skin, it's going to turn out
Speaker 8: to be kind of a garden variety infection. But it
Speaker 8: is important for clinicians to keep in mind that if
Speaker 8: people are getting worse, if they're not getting better, if
Speaker 8: they're more concerning systemic symptoms occurring, that they think about this.
Speaker 8: And it's also important for patients to know that as well,
Speaker 8: that if they're not getting better in the expected time,
Speaker 8: or they're taking a turn for the worst when they're
Speaker 8: already on antibiotics, that this is something where they need
Speaker 8: to seek care immediately.
Speaker 3: Is there any reason why it would be I guess
Speaker 3: localized in Japan here to anything that is unique to.
Speaker 8: That part of the world, not particularly, I mean, we've
Speaker 8: seen increases in streptococal infections, not necessarily toxic shock, all
Speaker 8: over all over different countries. For example, the UK had
Speaker 8: a major issue with this a couple of years ago,
Speaker 8: and it may be having to do with kind of
Speaker 8: idiosyncrasies in the immunity in the population in Japan. Remember,
Speaker 8: we all came through a pandemic where there was a
Speaker 8: lot of social distancing and many of the ordinary infections
Speaker 8: that people get every year were kind of disrupted. And
Speaker 8: there may have been different disruptions in different parts of
Speaker 8: the world and different prevalences of these infections, and now
Speaker 8: they're kind of coming back to their prior levels and
Speaker 8: there's some catching.
Speaker 7: Up to do.
Speaker 8: There are people who might not have had as much
Speaker 8: immunity because they weren't exposed at a low level over
Speaker 8: the last couple of years, or they just might not
Speaker 8: have been infected. And there's a certain number that are
Speaker 8: going to be expected every year in Japan, and because
Speaker 8: you had a two year lull, now it's coming back
Speaker 8: to baseline levels and that's what they're noticing. So this
Speaker 8: is kind of one of the leading hypothesis. But we
Speaker 8: don't know quite everything for sure what's going on in Japan,
Speaker 8: but that's what I think is at play.
Speaker 2: What are the sign you mentioned that if you're on
Speaker 2: antibiotics for strap and you know, get better, but you
Speaker 2: get worse. What are some other signs that people should
Speaker 2: be looking out for.
Speaker 8: Well, so severe a spreading rash that's getting severe, severe
Speaker 8: pain if there's a rash where the infection might have been,
Speaker 8: anything involving low blood pressure, extreme fatigue, not being clear mentally,
Speaker 8: difficulty breathing, all of those kind of signs that the
Speaker 8: infection is not localized.
Speaker 3: Nic doctor. I remember we used to talk to you
Speaker 3: all the time during the pandemic. You were very kind
Speaker 3: to share your time and you know, kind of educate
Speaker 3: a lot of folks on what this virus was, how
Speaker 3: doctors and health professionals were treating it, and then ultimately
Speaker 3: the vaccine and the efficacy of the vaccine. So we
Speaker 3: again appreciate all that time you gave us. Now that
Speaker 3: we've got that in the rear view mirror here, I
Speaker 3: know one of the themes that came out of that
Speaker 3: was just the stress on the healthcare system and the
Speaker 3: people of the healthcare system that doctors and nurses and
Speaker 3: everybody of the work they had to be in the
Speaker 3: front lines during those early months and in that year.
Speaker 3: How are the folks, the good folks at Johns Hopkins
Speaker 3: that you deal with in the facilities, how are they
Speaker 3: doing several years on now?
Speaker 8: Well, I think that most healthcare systems around the country
Speaker 8: have kind of come to a new normal where there's
Speaker 8: kind of chronic burnout, there are chronic staffing issues where
Speaker 8: people quite haven't recovered from the way that the pandemic
Speaker 8: altered hospital operations. And this is going to be one
Speaker 8: of the long tails of the pandemic. It's not something
Speaker 8: that you can just bounce back from. There wasn't a
Speaker 8: lot of resiliency built into the system. There wasn't a
Speaker 8: lot of kind of slack in it, and the pandemic
Speaker 8: ate up all that slack. And I just think that
Speaker 8: we're in a situation where a lot of people still
Speaker 8: are carrying those scars around of that time when they
Speaker 8: were overworked, where there were concerns about personal protective equipment,
Speaker 8: where hospitals were crashing, and even when you look at
Speaker 8: the economics of hospitals, we're seeing hospitals closed, rural hospitals
Speaker 8: really looking at their financial viability hospital banker. So this
Speaker 8: was something that took a major toll on the healthcare system,
Speaker 8: just like we expected and predicted it with And this
Speaker 8: is why it's so important to incorporate healthcare preparedness, healthcare
Speaker 8: resiliency into planning for the next infectious disease emergency, whatever
Speaker 8: it might be. This can't just be something that we
Speaker 8: think about when there's a crisis, when it's in the headlines.
Speaker 8: This is something that needs to be done kind of
Speaker 8: with a long term eye to the future to make
Speaker 8: a sustainable way to operate hospitals and make emergency prepared
Speaker 8: and as part of their core function.
Speaker 2: How are we doing with COVID? I mean, COVID loves me.
Speaker 2: It doesn't love Paul, but it loves me. How are
Speaker 2: we doing with COVID? What are the cases like? Where
Speaker 2: are we going to get vaccinations in the fall for
Speaker 2: fluen covid?
Speaker 5: What do you think?
Speaker 8: Well, COVID is something that's increased over time in the
Speaker 8: last several weeks or so. But we've seen is this
Speaker 8: virus is endemic, but it continues to mutate and spin
Speaker 8: off new variants that are able to infect us. Right now,
Speaker 8: all across the country, COVID cases are up, emergency department
Speaker 8: visits are up, but its ability to cause severe disease,
Speaker 8: its ability to crush the hospital severely constrained. Because of
Speaker 8: the community and the other tools that we have. We
Speaker 8: will have new vaccines in the fall that are better
Speaker 8: targeted to what's circulating and that will likely be something
Speaker 8: that's recommended to high risk individuals that they get right
Speaker 8: alongside their flu vaccine.
Speaker 3: All right, doctor George, thank you so much. We appreciate
Speaker 3: that as always. Doctor almesh Adology a senior scholar to
Speaker 3: Center for Health Security at Johns Hopkins Bloomberg School of
Speaker 3: Public Health. And again, the good folks at Johns Hopkins
Speaker 3: were so good to us, you know during those early
Speaker 3: days when we didn't know anything nothing.
Speaker 2: I actually want to say, we should get him back
Speaker 2: when there's not a crisis, just to like learn about
Speaker 2: stuff that isn't a flesh eating disease, right that comes
Speaker 2: from strap or like COVID spreading again, just to like
Speaker 2: learn about the system and like what cool things are
Speaker 2: in the pipeline to be discovered and what people are treating.
Speaker 5: And I mean everyone's living longer, yep.
Speaker 2: Right, we're letting people live longer, but then how we
Speaker 2: support them really fails. And then getting that dynamic from
Speaker 2: him and be super interesting yep.
Speaker 3: I went into a healthcare episodic for the first time
Speaker 3: yesterday and I can't remember how long and X rays.
Speaker 3: I mean what I was interesting to see, like how
Speaker 3: well it was staff, Like are there nursing shortages are there,
Speaker 3: you know, technician shortage, and it seemed like it was
Speaker 3: back to normal. There's plenty of folks there, you know,
Speaker 3: a few masks here and there from some of the
Speaker 3: healthcare professionals. But it seemed like pre pandemic business as usual.
Speaker 3: But I get as doctor Dalga was saying, there's some
Speaker 3: long tail issues for the industry as a whole. I guess,
Speaker 3: you know, they were so crushed. I think about the
Speaker 3: hospitals here in New York City that were so crushed.
Speaker 5: You should just see, like the ers are crazy, like
Speaker 5: they're just overflowing. It didn't take days to get a bed.
Speaker 5: And yeah, it's just it's it's the healthcare systems and
Speaker 5: real issues with that.
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
Speaker 1: weekdays at ten am Eastern on applecar Play and royd
Speaker 1: Otto with the Bloomberg Business App. You can also listen
Speaker 1: live on Amazon Alexa from our flagship New York station,
Speaker 1: Just Say Alexa, playing Bloomberg eleven thirty.
Speaker 2: I'm Alex Thee alongside Paul Sweeney. This is the Boomberg
Speaker 2: Intelligence Radio. We bring you all the top news and
Speaker 2: business and finance live from an interactive Brokers studio right
Speaker 2: here in midtown Manhattan now for the month of June,
Speaker 2: Bloomberg Radio is committed to bringing you segments and guests
Speaker 2: focus on the topic of equality. And today we have
Speaker 2: the pleasure of speaking with a Lalua Ganga. She's US
Speaker 2: Chief investment Officer over at Mercer. She is a rock
Speaker 2: star in her own right as an investment analyst and
Speaker 2: a portfolio diversifier and talk about clients and.
Speaker 5: All those things.
Speaker 2: And also she is in the C suite and also
Speaker 2: working mom and that's hard, so we can cover both.
Speaker 2: So can you just tell me a little bit about
Speaker 2: you know, your career and how you got to where
Speaker 2: you were.
Speaker 9: Well, thank you for having me. I heard the introduction
Speaker 9: to kind and I just started laughing because my daughter
Speaker 9: would just be like, that's just.
Speaker 5: Mom, Yeah, totally.
Speaker 2: I can appreciate that that is what happened.
Speaker 9: So, you know, I there are days that I take
Speaker 9: a step back and I look at my career and
Speaker 9: I'm I'm even blown away and surprised. Frankly, I've had
Speaker 9: the privilege of being in the US. I moved here
Speaker 9: for college. I'm originally from Nigeria. My family's from Nigeria,
Speaker 9: born and raised both in Nigeria and Botswana, and I
Speaker 9: moved in nineteen ninety nine. I studied math. Didn't know
Speaker 9: what I was going to do with it. It was
Speaker 9: somewhat accidental. I was trying to find a place that
Speaker 9: gave work visas.
Speaker 3: Yep, such a big air.
Speaker 9: Got to be a big firm, and my family science based.
Speaker 9: I ended up working at a bank because big hires
Speaker 9: and they gave visas back in the day, and it
Speaker 9: was a trading desk, and all I could think I
Speaker 9: was I did to work really hard to keep this visa,
Speaker 9: and I learned about markets. I learned about trading. I
Speaker 9: realized that in order to stay here, I had to
Speaker 9: in my head work harder than everybody else and just
Speaker 9: show that I truly wanted it. And I was a
Speaker 9: student of markets. I just loved learning. And over time,
Speaker 9: I was fortunate that folks saw me and gave me
Speaker 9: a chance and opportunity to do more. I raised my
Speaker 9: hand and I asked for more, and you know, fast forward,
Speaker 9: I don't know, twenty something years or more, I'm the
Speaker 9: chief investment officer at one of the most major prominent
Speaker 9: platforms for in Dowmon's Foundation's healthcare pensions. Like the assets
Speaker 9: and the responsibility that we have blows me away, and
Speaker 9: I take it very seriously and I'm just truly grateful
Speaker 9: to be in the seat.
Speaker 3: Women in financial services on Wall Street a constant challenge,
Speaker 3: and in my prior role, I hired a lot of
Speaker 3: folks coming out of school, and our entering classes were
Speaker 3: perfectly diverse, perfectly diverse. Ten years later when it came
Speaker 3: time for the managing director or a partner discussion, not
Speaker 3: so much yep. So what was your experience going through
Speaker 3: this whole process? Having spend that much time in the business.
Speaker 9: I knew that I had to not think about it.
Speaker 9: It was a deliberate choice to not think about it,
Speaker 9: because if I did, and you look at the numbers, like,
Speaker 9: it's very easy to be discouraged. It's very easy to
Speaker 9: say I don't see it, So how can I think
Speaker 9: it and be it? And make no mistake, I did
Speaker 9: think it very often, but I just had to actively
Speaker 9: put it out of my mind. And there are certain
Speaker 9: points that you have as a woman, your choice of
Speaker 9: a partner, your choice of having a family, and when
Speaker 9: you do that, how much time you spend with I
Speaker 9: have a daughter, she's turning five in a few weeks.
Speaker 9: There are points that you will be slower in your
Speaker 9: career as a result of that. It's also a choice
Speaker 9: and there are times that you have the ability to
Speaker 9: do it. For me, I found that it's been support
Speaker 9: and the support system around me.
Speaker 5: And you mean like personal or job wise or both both?
Speaker 9: Yeah, definitely both. The if the job wise is like
Speaker 9: you can do this job, and personally it's hard, you
Speaker 9: have to make that choice. A lot of women are like,
Speaker 9: I will choose and it won't be you. It won't
Speaker 9: be you job, it will be the family because that's
Speaker 9: you know, at the end of the day, when we
Speaker 9: leave this world, that's what matters the most. So when
Speaker 9: put in a situation where you have to choose, and
Speaker 9: many people are in situations whereby they have to choose,
Speaker 9: they don't choose work. So how you have the support
Speaker 9: in place to be able to have both, which you
Speaker 9: can't have them at the same time at the same intensity.
Speaker 9: You know you can have it, but you have to
Speaker 9: stage like sad, my daughter's five are going to be five.
Speaker 9: So I had children later in life in order to
Speaker 9: be able to go as fast as I could without
Speaker 9: making some of those other trade offs, and then having
Speaker 9: the support system in place while you are doing the worst.
Speaker 5: So I love that you brought up support.
Speaker 2: I had a dinner last week with a bunch of
Speaker 2: women in finance, super successful, really great, and eventually it
Speaker 2: turned to the topic of they couldn't do those jobs,
Speaker 2: and it either could I without a really supportive partner,
Speaker 2: and that you learn really fast, particularly when you have kids,
Speaker 2: how supportive that partner is actually going to be, particularly
Speaker 2: when you travel. But that's hard, Like, that's not a given,
Speaker 2: particularly if you're in a if you're a woman with
Speaker 2: like a career driven role, and you put that first.
Speaker 5: That's not a given in the world, not a given
Speaker 5: at all.
Speaker 9: And you know, in life and in work, there is
Speaker 9: your ability to work hard, your intelligence, and then there
Speaker 9: is luck. And I will admit that there's there's a
Speaker 9: lot of luck that I've had. My husband, I've known
Speaker 9: since I was eighteen.
Speaker 5: Oh my goodness.
Speaker 3: So we grew up together.
Speaker 9: Essentially it was okay, you go to school, you're working,
Speaker 9: you're was going it was it was it was trade
Speaker 9: offs and who's on, who's off, How do we do
Speaker 9: it and who knew. You know, the stats in this
Speaker 9: in this country are not necessarily encouraging in that respect,
Speaker 9: But we communicate a lot, and we have honest conversations.
Speaker 9: Who's on, who's off, who, who picks up the gap
Speaker 9: and for how long?
Speaker 8: That's interesting.
Speaker 3: I think what we learned just real quickly at thirty
Speaker 3: seconds the childcare and now the elder care in this country. Boy,
Speaker 3: that's got to change. We learned that. I think during
Speaker 3: the pandemic, people who weren't aware of it, they got
Speaker 3: they became aware of it pretty quickly.
Speaker 9: Yes, absolutely, and the pandemic was a big equalizer for
Speaker 9: many family like men and women whatever. It was like
Speaker 9: everyone had to pitch up and roll up their sleeves.
Speaker 9: You could have a nanny, but could they come in Nope, right,
Speaker 9: So that was it. And then you had that plus
Speaker 9: if you had elderly parents, which my parents are not
Speaker 9: in this country, my husband had at the time, and
Speaker 9: how you're navigating that on both sides, you can get pulled, frankly,
Speaker 9: to be able to do that. During the pandemic, it
Speaker 9: was everybody was experiencing that. But if you remove the
Speaker 9: pandemic and quote unquote normal times, it's hard to be
Speaker 9: able to have that empathy in place with people that
Speaker 9: are managing a number of other personal commitments.
Speaker 2: I could talk to you for dance, so definitely come back.
Speaker 2: We can do a little bit of this. We can
Speaker 2: talk about your market views.
Speaker 5: Really amazing. Thank you so much for sharing.
Speaker 2: You're speaking a lot of what I hear about all
Speaker 2: the time and things that I go through too, So
Speaker 2: thank you for sharing that.
Speaker 5: Lalua Ganga. She's US Chief investment officer over at Mercer.
Speaker 1: This is the Bloomberg Intelligence podcast, available on Apples, Spotify,
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