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Speaker 3: Hi, everyone, welcome to the Bloomberg Business Week Weekend Podcast. Well,
Speaker 3: this week records for US doocs inflation prints too, one
Speaker 3: that caused investors to more definitively price in a FED
Speaker 3: rate cut in September, and then a second one that
Speaker 3: dialed those expectations back. And then yes, of course, geopolitics,
Speaker 3: including a meeting between President Trump and Russian President Vladimir Putin,
Speaker 3: and Bloomberg News breaking the story late Thursday that the
Speaker 3: Trump administration is in talks with Intel to take a
Speaker 3: stake in the company in what would be a huge
Speaker 3: push to boost domestic chip making manufacturing. This is all
Speaker 3: according to people familiar with the plan. For the latest
Speaker 3: on this Bloomberg exclusive, head to the Bloomberg and to
Speaker 3: Bloomberg dot Com. You also find there the cover story
Speaker 3: of the upcoming Bloomberg BusinessWeek issue, which is particularly prescient.
Speaker 4: More on that in a moment.
Speaker 5: Plus retail with Dana Telsey and concerns about critical minerals
Speaker 5: with the head of a mining company. Also an AI
Speaker 5: surge for bloom Energy, both of those stocks soaring this year.
Speaker 5: Later on, We're going to head to the Pebble Beach
Speaker 5: Concord des elegance, Oh that to come. We begin with
Speaker 5: this week's release of the cover story in the upcoming
Speaker 5: new issue of Bloomberg BusinessWeek. It features US Treasury Secretary
Speaker 5: Scott Bessant, who talked to Bloomberg Treasury reporter Dan Flatley
Speaker 5: and Bloomberg's Eric Shatzker about growing up in South Carolina,
Speaker 5: working for George Soros and Stanley Drunken Miller and his
Speaker 5: path two the Trump White House and to not being
Speaker 5: head of the FED. Our interview with both reporters can
Speaker 5: be found on our podcast feed.
Speaker 3: Well after the cover story was published, the Treasury Secretary
Speaker 3: stop by Bloomberg Headquarters in Studios this past week, joining
Speaker 3: surveillances Jonathan Farrow and Anne Marie Hordern to talk about
Speaker 3: everything chips, government data. He also suggested the federal reserves
Speaker 3: benchmark ought to be at least one hundred and fifty
Speaker 3: basis points lower than it is right now.
Speaker 6: What if the BLS data had been the higher quality
Speaker 6: and we'd had those numbers, Jonathan, So if we'd seen
Speaker 6: those numbers in May in June, I suspect we could
Speaker 6: have had rate cuts in June and July. So that
Speaker 6: tells me that there's a very good chance of a
Speaker 6: fifty basis point rate cut. And I think President Trump
Speaker 6: is very good at giving these nicknames. And I think
Speaker 6: the reason that the Jay Powell gets a nickname too
Speaker 6: late is because he wants to go into a series
Speaker 6: of rate hikes. He's not willing. He's not Alan Greenspan,
Speaker 6: who was very forward thinking. They try to be more
Speaker 6: data driven, which I think is a mistake because I
Speaker 6: think we are going back into an economy like we
Speaker 6: had in the nineties, So you know, it's just very
Speaker 6: old fashioned thinking. But I do think we could go
Speaker 6: into a series of rate cuts here, starting with a
Speaker 6: fifty basis point rate cut in September.
Speaker 3: A fifty basis rate cut in September, does that signal
Speaker 3: that the economy, though, is not.
Speaker 6: Doing well, that signals that there's an adjustment and that
Speaker 6: the rates are too constrictive.
Speaker 7: If you look at any model, that the.
Speaker 6: We should probably be one hundred and fifty one hundred
Speaker 6: and seventy five basis points lower. So I think the
Speaker 6: committee needs to step back. I think probably one of
Speaker 6: the most politicized governors just went off the board and
Speaker 6: that she was very, very political.
Speaker 7: I believe that.
Speaker 3: Was US Treasury Secretary Scott Besson with Bloomberg Jonathan Farrow
Speaker 3: and Anne Marie Hord during this past week. That complete conversation.
Speaker 3: They covered a lot. You can find it online at
Speaker 3: Bloomberg dot com and on the Bloomberg terminal.
Speaker 5: As we mentioned earlier, Eric Shatzker, Bloomberg New Economy Editorial
Speaker 5: director and editor at large at Bloomberg BusinessWeek, was one
Speaker 5: of the co authors of the BusinessWeek cover story on
Speaker 5: Secretary Besson. So we asked Eric, along with Bloomberg International
Speaker 5: Economics and Policy correspondent Michael McKee, to do a debrief
Speaker 5: with us following Secretary Besons Bloomberg TV and radio interview.
Speaker 8: Well, first and foremost, he is speaking on behalf of
Speaker 8: the president and trying to drive his agenda.
Speaker 7: That is his job.
Speaker 8: And the job of every cabinet secretary working for President Trump.
Speaker 8: In theory, it's the job of every cabinet secretary working
Speaker 8: for any president. But there has, it would appear, been
Speaker 8: room for a little more debate and disagreement in previous
Speaker 8: cabinets than there is in this cabinet. So that's number one, right.
Speaker 8: It's a salesmanship job. He's out there advancing President's objectives,
Speaker 8: president's policies, and as we've seen, he's also a tool,
Speaker 8: if you will, for the President's negotiating style or even
Speaker 8: the manner in which he shapes public opinion, which is
Speaker 8: to drive people to extremes and then ultimately pull them
Speaker 8: back a little bit.
Speaker 5: That was a big takeaway that I had, Eric from
Speaker 5: the cover story that you wrote with Dan was the
Speaker 5: risk tolerance for President Trump and the way that the
Speaker 5: Treasury Secretary talked about President Trump's risk tolerance with regard
Speaker 5: to being higher than his being higher than his a
Speaker 5: hedge fund manager who spent years taking on big bets,
Speaker 5: working with George Soros and others. And that's the whole
Speaker 5: idea behind the tariff negotiating strategy.
Speaker 8: To a degree, Sure's there's clearly there are clearly differences
Speaker 8: in the way you manage risk as a hedge fund
Speaker 8: manager who has a fiduciary obligation to clients, and the
Speaker 8: way you think about risk and reward and making bets
Speaker 8: on outcomes as the president of the United States or
Speaker 8: as a policymaker in cabinet. And there's no doubt that
Speaker 8: in Scott Besson's mind, Donald Trump has a higher risk tolerance.
Speaker 7: But it's a risk tolerance. Again.
Speaker 8: I don't want to put words in his mouth, but
Speaker 8: as explained to us with a purpose. In other words,
Speaker 8: let's see how far I can push people so I
Speaker 8: know where their limits are, and then I can pull
Speaker 8: it back to something that they're comfortable with, but only
Speaker 8: comfortable with because they felt what it was like to
Speaker 8: be scared.
Speaker 4: So is he taking a risk? Mike?
Speaker 3: I want to bring into what he said. He talked
Speaker 3: about the FED working off of data that's not of
Speaker 3: higher quality. Is he taking a risk in that?
Speaker 7: He?
Speaker 4: I don't know what he's looking for.
Speaker 3: Like we all think the US data, the world thinks
Speaker 3: the US data is the gold standard.
Speaker 7: Until Friday, we thought that.
Speaker 5: Now the narrative is that, wait, this data is lumpy,
Speaker 5: this date is not good right, it needs.
Speaker 4: He said we should have had that cuts in June
Speaker 4: in July, which.
Speaker 9: Is the other Trump thing is throw so much stuff
Speaker 9: out there that you confuse people and you get people
Speaker 9: to think that the truth is not the truth. I mean,
Speaker 9: these are the gold standard data around the world, and
Speaker 9: while they are somewhat less scientifically valid than they were
Speaker 9: because the response rates have gone down, they are still
Speaker 9: extraordinarily accurate.
Speaker 7: Revisions are a part of it.
Speaker 9: So this is I mean, it's truly an effort. The
Speaker 9: whole BLS firing thing is an effort to confuse Americans
Speaker 9: about what's going on with the data so that when
Speaker 9: the data look bad, Trump can blame the data rather
Speaker 9: than his policies. So for Scott Bessen, he has to
Speaker 9: go along with that, but what he wants from the
Speaker 9: Fed doesn't comport with the way the FED is looking
Speaker 9: at it.
Speaker 3: He also made reference to Alan Greenspan. He said he's
Speaker 3: not willing meaning Fed Shair J.
Speaker 4: Powell.
Speaker 3: He's not Alan Greenspan, who was very forward thinking. They're
Speaker 3: trying to be more data driven, which I think is
Speaker 3: a mistake because I think we are going back into
Speaker 3: an economy like we had in the nineties. We heard that,
Speaker 3: Mike first and then Eric. I mean, we've all been
Speaker 3: around since green Span, all of us. There's a lot
Speaker 3: been written about perhaps the actions that Alan Greenspan took
Speaker 3: as FED chair in the lead up to the Great
Speaker 3: Financial Crisis, the mortgage meltdown.
Speaker 4: Is that a good reference point, Mike.
Speaker 7: For the USB That's an interesting question.
Speaker 9: I don't think most people listening these days anymore really
Speaker 9: remember a whole lot about the green Span years or
Speaker 9: green SPAN's role in it, other than those of us
Speaker 9: who were very closely tied to it. But he did
Speaker 9: in the nineteen nineties suggest that inflation was going to
Speaker 9: be low because productivity was picking up because of personal computers,
Speaker 9: and that was the thing that got him the fame
Speaker 9: and the lionization in Washington and on Wall Street. And
Speaker 9: then of course he had the oops of no, there's
Speaker 9: not going to be a housing crisis, and so, yeah,
Speaker 9: I don't know if it's a good comparison or not.
Speaker 9: The one thing you can say is that Greenspan, unlike
Speaker 9: his successors, was very forceful and basically kind of ran
Speaker 9: the FED in the direction that he wanted it to go,
Speaker 9: which is not something that Jay Pile does, and it
Speaker 9: wasn't the way Ben Bernanki or Janet Yellin are Eric.
Speaker 5: Are you given the reporting that you and Dan Flatley did,
Speaker 5: the folks that you spoke to within the Treasury Secretary's orbit,
Speaker 5: they seem to express a little surprise that he has
Speaker 5: not just joined the Trump administration, but that his views
Speaker 5: seem so in line with the president's views right now.
Speaker 7: How do you explain that? In two ways?
Speaker 8: The first is, there's no question that Scott Bessant's point
Speaker 8: of view and the things that he says to back
Speaker 8: it up have evolved over the course of the past
Speaker 8: at the very least seven months since he became Treasure Secretary,
Speaker 8: and even before that as.
Speaker 7: Of last year.
Speaker 8: I remember interviewing him a little more than a year ago,
Speaker 8: and he was talking then about the sense or sensibility
Speaker 8: of a ten percent global tariff, and he was also
Speaker 8: then talking about the goal of getting detch GDP ratio.
Speaker 7: Down, you know, as far as the federal debt.
Speaker 8: Is concerned, and also the percentage of you know, the
Speaker 8: size of the deficit, the annual deficit relative to GDP
Speaker 8: as a goal of under three percent, and by the
Speaker 8: end of the president's term, the fiscal discipline has sort
Speaker 8: of gone out the window for the time being with
Speaker 8: the one big Beautiful bill. Besten will tell you that
Speaker 8: if the bill is successful, and he believes it will
Speaker 8: be in deregulating the you know, American industry and thus
Speaker 8: you know, supercharging some kind of domestic manufacturing renaissance, then
Speaker 8: you know you'll get a change in the relationship between
Speaker 8: the numerator and denominator. And in fact, yes, deficits will
Speaker 8: start to follows a percentage of GDP over time. So
Speaker 8: he hasn't totally walked that back. On the subject of tariffs.
Speaker 8: He now talks about how the president's maximum pressure strategy
Speaker 8: is what has allowed the United States to achieve these
Speaker 8: deals on paper with countries like Japan, for example, in
Speaker 8: South Korea and others. And we'll see if those terms
Speaker 8: stick and exactly how these novel terms unfold in the
Speaker 8: wave of real, real substance of agreements. But and again
Speaker 8: this is not to sort of come out in his defense,
Speaker 8: that's not our job. But I would point out that
Speaker 8: at the moment, the global terrorf rate is fourteen percent, right,
Speaker 8: it's not that far off of ten percent. I mean,
Speaker 8: I mean four percentage points is forty percent higher than
Speaker 8: ten percent, but it's not twenty five percent, and it's
Speaker 8: not thirty nine percent, which is of course what the
Speaker 8: Swiss appear to be headed for at the moment. So
Speaker 8: it's sifted, but it hasn't shifted to an extreme place,
Speaker 8: if that makes any sense. Does that helped to answer
Speaker 8: the question? And of course that IA would just say
Speaker 8: that yes. The reason that people around Scott Bessen are
Speaker 8: surprised by the fact that he has come out that
Speaker 8: he's in the administration and that he went out for
Speaker 8: President Trump in the first place on the campaign trail
Speaker 8: and fundraising for him.
Speaker 7: Is because they thought that he was a little closer to.
Speaker 8: Who they think of themselves as, which is a Reagan Republican.
Speaker 8: And the truth of the matter, as we demonstrated in
Speaker 8: our reporting, is that even over the past ten or
Speaker 8: fifteen years, he has held different points of view, he
Speaker 8: just hasn't shared them with everybody.
Speaker 5: We're speaking right now with Bloomberg New Economy Editorial director
Speaker 5: and editor at large of Bloomberg BusinessWeek, Eric Shatsker, along
Speaker 5: with Bloomberg BusinessWeek or Bloomberg TV and Radio, International Economics
Speaker 5: and Policy correspondent Michael McKay.
Speaker 3: You know, speaking of productivity, just a quick headline. Apple
Speaker 3: planning to come back in artificial intelligence with new devices
Speaker 3: including robots, a smart speaker with a display, and home
Speaker 3: security cameras. According to folks in the know, this may
Speaker 3: be a little bit of what some say, maybe.
Speaker 7: Does it do the dishes?
Speaker 4: Not yet?
Speaker 7: Not yet, ai fed chair.
Speaker 4: But exactly Okay, we only have a few minutes left here.
Speaker 3: And I guess every time I listen to Scott Bessont,
Speaker 3: I think about someone who understands the importance of an
Speaker 3: independent FED, understands the role of the US Central Bank
Speaker 3: in the world. Do you feel, like Mike, that he
Speaker 3: understands that and that if it gets a bit wonky
Speaker 3: or gets very political, that there will be market implications,
Speaker 3: not just US market implications, but global market importations.
Speaker 9: I think Besson knows that very well.
Speaker 7: I mean, he's not dumb.
Speaker 4: He rail around the president with that.
Speaker 7: Well, no, there are.
Speaker 9: No guardrails around this president anymore. He can he can
Speaker 9: tell him all he wants, but there is only one
Speaker 9: leader and the sider in chief. That leader does not
Speaker 9: care about Uh well, he may care about a market collapse,
Speaker 9: but he doesn't care that, you know, the FED is independent.
Speaker 7: He believes he's the boss to that end.
Speaker 5: Is it rare for the Secretary of Treasury to actually
Speaker 5: weigh in on interest rate policy from that position?
Speaker 9: Of course it is. It hasn't been done in decades.
Speaker 9: I mean, we got officially into the government, doesn't The
Speaker 9: executive branch doesn't comment on the FED during the Clinton
Speaker 9: administration under Bob Rubin, and it's been that way pretty
Speaker 9: much ever since.
Speaker 7: US Trump.
Speaker 9: But this is not the usual presidency. This is Donald
Speaker 9: Trump's presidency, and it is completely different from anything we
Speaker 9: have seen before.
Speaker 3: Eric, forgive thirty five seconds, Scott besn't passed on being
Speaker 3: FED chair, right, that's at least what we've reported. Do
Speaker 3: you think he understands the importance of an independent FED,
Speaker 3: how important it is globally.
Speaker 7: Yes, he talks about it being a jewel box.
Speaker 8: And by the way, the reason he passed on being
Speaker 8: a FED chair is because he finds the job that
Speaker 8: he's got now.
Speaker 7: Way more interesting out of the irs.
Speaker 8: I think he thinks of the job of Federal was
Speaker 8: chairm and particularly if all you all you're really really
Speaker 8: supposed to be doing is setting interest rates as relatively speaking,
Speaker 8: very one dimensional.
Speaker 4: Great stuff, guys, Thank you so much, so appreciate.
Speaker 3: Eric Schatsker, Editorial Director Bloomberg New Economy, editor at Large
Speaker 3: for Bloomberg Business Week, Michael McKee, International Economics and Policy
Speaker 3: correspondent at Bloomberg TV. Check out the full Bessant interview
Speaker 3: Secretary Vesson.
Speaker 4: It's on the Bloomberg.
Speaker 2: You're listening to the Bloomberg Business Weekdaily Podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm Eastern. Listen
Speaker 2: on Apple CarPlay and Android Auto with the Bloomberg Business app,
Speaker 2: or watch US live on YouTube.
Speaker 3: We got a lot of economic news this week. Reads
Speaker 3: on US inflation, one perceived as better.
Speaker 4: One not so much.
Speaker 3: We also got some data on factories, and we got
Speaker 3: to check on the all important US consumer and retail sales.
Speaker 5: I was out that day. I was not shopping. I
Speaker 5: was not contributing to the economy. I guess I was
Speaker 5: contributing thanks to you on vacation. Yeah. I'm always contributing
Speaker 5: to the economy, to be honest, Carol, you and Mlikerfeo
Speaker 5: caught up with someone who's been analyzing the retail space
Speaker 5: for a long time. She's just a real legend within
Speaker 5: the industry. She broke down the data. She looked more
Speaker 5: broadly at what's hot and what's not among the nation's retailers.
Speaker 4: Let's ask Dana Telsea. She knows retail like no other.
Speaker 3: She has founder, CEO and chief Research officer of Telsey
Speaker 3: Advisory Group. She's with us in New York City. Dana,
Speaker 3: thank you so much for joining us on this Friday.
Speaker 3: When CEOs are talking about the economy, do they always
Speaker 3: kind of talk about it or do you feel like
Speaker 3: we're seeing more momentum around some of those earnings releases
Speaker 3: about concerns about the consumer and the economy.
Speaker 10: Thank you for having me, and yes, I agree with
Speaker 10: your take. You're definitely hearing more commentary that continues to
Speaker 10: be increasing quarter to quarter about the uncertainty of the economy.
Speaker 10: What you've heard from CEOs this week, in a little
Speaker 10: bit last week, and we'll have a lot more next week,
Speaker 10: is that spending and sales since the end of the
Speaker 10: June quarter has improved and it's increased. Some of this
Speaker 10: may be because the pull forward of sales given the
Speaker 10: price increases from tariffs, are not yet fully there. And
Speaker 10: you've also heard the volatility for example, maybe like April
Speaker 10: and May was week, but then June and July picked up,
Speaker 10: And is the new normal going to be volatility and
Speaker 10: then improvement, volatility and then improvement. The lack of consistency
Speaker 10: makes it difficult for sea level executives to plan their
Speaker 10: businesses and give guidance.
Speaker 11: But help us understand. I mean, it's been a couple
Speaker 11: months since Liberation Day, we've been dealing with tariffs. Is
Speaker 11: all of this uncertainty still linked to consumers just looking
Speaker 11: at tariff's businesses looking at tariffs and still not understanding
Speaker 11: exactly how those are going to affect their businesses.
Speaker 10: Well, there's a couple things. First of all, what you
Speaker 10: see companies do is they're diversifying their sourcing, and as
Speaker 10: they're diversifying their sourcing, many of them pulled out of China.
Speaker 10: One other place is the teriff rate rate went higher
Speaker 10: than China, and as some of them are bringing back
Speaker 10: their sourcing to China. Second thing is we do a
Speaker 10: tracker of eighty items each week that we price. We've
Speaker 10: been doing this since April sixteenth, and one of the
Speaker 10: things you're seeing is our pricing and they're iconic goods,
Speaker 10: whether Levi's five oh one, gene or Barbie doll. You've
Speaker 10: been seeing prices begin to go up, certainly on footwear.
Speaker 10: We've seen that and we expect to continue to increase
Speaker 10: going forward. You had Amazon Prime Day this year four
Speaker 10: days instead of two days, and the first two days
Speaker 10: versus last year, we're up double digits. So consumers are
Speaker 10: taking advantage of deals that they may think they're getting
Speaker 10: now coupled with newness and product like closed toed Birkenstocks,
Speaker 10: where they're buying some of the new items that they
Speaker 10: wouldn't have had before and we're just introduced that's capturing
Speaker 10: the interest of a younger consumer. So there's a mix
Speaker 10: of things that are going on to create this dynamic
Speaker 10: of what's happening to Dana.
Speaker 3: So the retail sales numbers, again, it's an interesting number,
Speaker 3: and it could be that people are just paying higher
Speaker 3: prices for everything. Would you say in a nutshell with
Speaker 3: if you kind of roll in? The US consumer sentiment
Speaker 3: feelings down for the first time since April.
Speaker 4: They're concerned about inflation.
Speaker 3: Consumers are that the consumer, the US consumer is largely cautious.
Speaker 10: Yes, they are. They are more discerning and cautious consumer.
Speaker 10: They're more selective in their spending, and you're seeing it
Speaker 10: whether it's in restaurants, you're seeing it in some travel,
Speaker 10: and you're seeing it in the purchase of goods. More
Speaker 10: to come this upcoming week given that target Walmart all
Speaker 10: reporting the results an esday later, so more to come
Speaker 10: and dissecting what it looks like.
Speaker 11: Dana, I have to get your thoughts on the Tapestry
Speaker 11: earnings that we saw just earlier this week. What did
Speaker 11: you make of kind of that divergence in their two businesses.
Speaker 11: The Coach brand has been so popular with gen Z
Speaker 11: it feels like everyone wants to buy a Coach bag now,
Speaker 11: but the Kate's Pade brand really pulling back.
Speaker 4: Just walk us through high level thoughts.
Speaker 11: There on what you made at the concernings.
Speaker 10: When you think of Tapestry, it's a portfolio company with
Speaker 10: two brands, Like you said, Coach and also Kate Spade.
Speaker 10: The Coach brand up double digits, the Coach brand seeing
Speaker 10: average unit retail selling prices increase, capturing more new customers,
Speaker 10: and going from strength to strength by adding items in
Speaker 10: their collections that allow them to have a consistent and
Speaker 10: sustainable business model. These Kate Spade brand is only fifteen
Speaker 10: percent of sales. More of their goods are sold in
Speaker 10: the United States, making them more impactful to tariffs, and
Speaker 10: that was definitely one of the headwinds and they have
Speaker 10: to set the transformation. The surprise was they lost money
Speaker 10: in the quarter. There's a reset going on. It's taking
Speaker 10: longer than expected. You're going to have this upcoming fiscal
Speaker 10: year where you're going to need to see stabilization markers
Speaker 10: of what the brand is while they also try to
Speaker 10: lean into the Coach playbook and utilize some of those
Speaker 10: learnings to update and improve Kate Spade. More to come,
Speaker 10: but eighty five percent of the business as coach and
Speaker 10: that's growing all right.
Speaker 3: In terms of earnings. Just one last question thirty seconds.
Speaker 3: What's the big one next week?
Speaker 10: It's going to be Walmart and Target. Is Target going
Speaker 10: to talk about a successor? Is Walmart still seeing growth
Speaker 10: in food? And they seem to be the market share
Speaker 10: gainer at Walmart?
Speaker 4: All right, got to leave it there, Dana, Thank you
Speaker 4: so much.
Speaker 3: Dana Telsey, CEO and Chief Research Officer of Telsey Advisory
Speaker 3: Group joining us in New York City.
Speaker 2: You're listening to the Bloomberg Business Weekdaily Podcast. Catch US
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Speaker 3: Well, we've been talking a lot about rare earth minerals
Speaker 3: as of late, and some of the US companies that
Speaker 3: are manufacturing.
Speaker 4: The White House too, has been talking a lot about this.
Speaker 5: Yeah, we've talked recently to the CEOs of MP Materials
Speaker 5: and USA Rare Earth. Those are among the biggest US
Speaker 5: rare earth mining companies in the US. But it's not
Speaker 5: just rare earth that matter to the US. And that
Speaker 5: brings us to one small cap miner with a roughly
Speaker 5: five hundred million dollar market.
Speaker 3: Cap, the company United States Antimony, and though it's not
Speaker 3: a household name, it's in the crosshairs of US China
Speaker 3: tensions and the global race for key minerals.
Speaker 5: We spoke with Gary Evans, chairman and CEO of United
Speaker 5: States Antimony Corporation, who joined us alongside Bloomberg News Economic
Speaker 5: Statecraft reporter Joe Doe, and during our conversation we noticed
Speaker 5: shares of the company we're rallying.
Speaker 12: We're in the category of critical minerals. There's critical minerals
Speaker 12: and there's rare earth, and so the public needs to
Speaker 12: understand there's a significant distinction critical minerals. As an antimony producer,
Speaker 12: we're number one on the DLDS a critical mineral list.
Speaker 12: And the problem is there is no antimony today being
Speaker 12: mined in either the United States or Canada. It all
Speaker 12: has to come from international sources. We were all getting
Speaker 12: every country the world was getting most of their antimony
Speaker 12: from China. China controls sixty five percent of world antimony
Speaker 12: or the raw or in the ground, and they control
Speaker 12: eighty five percent of the downstream processing, which is what
Speaker 12: we do.
Speaker 7: So fortunately we're in a position of.
Speaker 12: Having a smelter in Montana and one in Mexico, which
Speaker 12: makes us the only two operating smelters for antimony in
Speaker 12: North America. And therefore, as you said earlier, we're getting
Speaker 12: a lot of attention from the US government.
Speaker 7: They want us to expand our operation.
Speaker 12: I think I read a report in April we only
Speaker 12: have like a five percent supply in our stockpile. So
Speaker 12: we're trying to ramp up our business to meet this
Speaker 12: critical need. And as Joe said, there's no question that
Speaker 12: antimony is needed by the military. It's used predominantly, as
Speaker 12: he said, in bullets, but it's also used in laser
Speaker 12: guided missile, night vision cameras, night vision binoculars, and what
Speaker 12: have you. So it's a very necessary element for the.
Speaker 5: Hey, Jojoe, come on back in here. We heard from
Speaker 5: Gary just now that the antimony mining is not done
Speaker 5: here in the US or in Canada. Is it possible
Speaker 5: to do it here in the US? Do we have
Speaker 5: the material to mine? And it's just not done for
Speaker 5: environmental reasons. It's not done because we don't have the
Speaker 5: mineral rights to it, or the companies none of the
Speaker 5: mineral rights to it. Like why has this been moved
Speaker 5: to China? I understand from a processing perspective, why that's
Speaker 5: happened with rare earths, Yeah, but with a critical mineral
Speaker 5: like antimony, Why why is that not happening here?
Speaker 13: Well, I mean, I think you go to deposits, you know,
Speaker 13: how good is the deposit and you can pull it
Speaker 13: out of the ground, and then who can process it?
Speaker 13: And this is a question that I have talked about
Speaker 13: now quite a bit with Gary over the last few months.
Speaker 13: And you know, Gary, I think I think your better
Speaker 13: position to talk about that to an investor class. I mean,
Speaker 13: you know, you talked to your investors yesterday on your
Speaker 13: earnings call, and they asked you about the potential of
Speaker 13: beginning mining in the United States anytime soon, and you
Speaker 13: effectively told them, probably it's not going to happen any
Speaker 13: time soon. So where is kind of the upside here.
Speaker 12: We've been working on acquiring leases in both Montana and Alaska.
Speaker 12: We've acquired close to thirty thousand acres of property in
Speaker 12: Alaska and we've taken over the mountain area where our
Speaker 12: smelter is. It used to be an area that we
Speaker 12: mined some twenty years ago. So it's coming right now.
Speaker 12: We're held up by permitting. We spiled permits in Alaska
Speaker 12: back in May. And so getting back to your question,
Speaker 12: why isn't this being done? The EPA, the federal government,
Speaker 12: whether it be the Force Service, the BLM, native tribes,
Speaker 12: everybody tried to stop mining in the United States and
Speaker 12: unfortunately our laws allowed that. And that's why you see
Speaker 12: mining occurring all over the world except the US. It's
Speaker 12: coming back. There's no doubt this administration is very pro
Speaker 12: mining and we have the resources. There's no question that
Speaker 12: we can meet the demand for the United States with
Speaker 12: just our Alaska properties, no doubt about that, and that's
Speaker 12: going to happen soon. I would think in the next
Speaker 12: thirty days we'll be able to bring our first loads
Speaker 12: of antimony truck from Alaska to our facility in Thompson Falls, Montana.
Speaker 5: Garry, how would you describe the conversations now with members
Speaker 5: of the Trump administration with this government versus your conversations
Speaker 5: during the Biden administration. How are they different.
Speaker 12: Well, we started talking to the Department of Defense back
Speaker 12: last September. This is right when China banned all antimony
Speaker 12: sales to any country in the world. In course, our
Speaker 12: Department of Defense was getting all their antimony from China,
Speaker 12: so it raised a lot of red flags. And we've
Speaker 12: been negotiating various agreements and contracts with the Department Defense
Speaker 12: and the DLA since that period of time.
Speaker 7: As we mentioned on.
Speaker 12: The call yesterday, were very close we think to announcing
Speaker 12: some things. It's not done yet, but there's definitely a
Speaker 12: mindset change. Addressing your question from the Biden administration to
Speaker 12: the Trump administration, for instance, we'll have to respond to
Speaker 12: a request from the DoD and they say, can you
Speaker 12: have it to us by Friday, We give it to
Speaker 12: them Friday five o'clock and by eight thirty Monday morning.
Speaker 12: We have a redline response. It's not very often you
Speaker 12: see the government working over the weekend, so there's no question.
Speaker 12: This is a high ticket item with our existing administration,
Speaker 12: and there's a fire been lit.
Speaker 7: Gary.
Speaker 13: Despite the fact that you're getting a lot more attention
Speaker 13: from the Trump administration and they seem to be speeding
Speaker 13: things up, I'd still ask what is the hold up?
Speaker 13: And I know this was a big question you got
Speaker 13: on the call yesterday with investors. They kind of seem
Speaker 13: to be saying, when are you going to get some
Speaker 13: sort of announcement from the government. What's going on?
Speaker 12: We're in a period where contractual changes are being made.
Speaker 12: There was an open comment period respect to the DLA
Speaker 12: that ended actually yesterday afternoon. So I'm very confident we're
Speaker 12: near the finish line. But it has taken amount of time,
Speaker 12: and there's been a lot of reasons that I can't
Speaker 12: really talk about today for that delay, but we had
Speaker 12: we have to make sure that whatever contract or whatever
Speaker 12: agreement we signed with the government is beneficial to our shareholders.
Speaker 12: In the first drafts were not and so we had
Speaker 12: to make sure that we negotiated as best we could
Speaker 12: to maximize the value for our shareholders, but also give
Speaker 12: the federal government a fair trade. You know, we're we're
Speaker 12: we pay taxes, we know, and so it was it
Speaker 12: was that was very necessary.
Speaker 3: Forgive me if I miss this, But is the agreement
Speaker 3: that you might be working out with the government akin
Speaker 3: to what we saw with MP Materials, which has a
Speaker 3: four hundred million dollar equity investment by the Department of
Speaker 3: Defense into the company. And we know that MP Materials
Speaker 3: is certainly working specifically in the rare earth materials area.
Speaker 3: So could it possibly be that the government DoD makes
Speaker 3: an equity investment in you guys as part of an
Speaker 3: agreement so that you can do what you need to
Speaker 3: in terms of ramping up either production or your facilities.
Speaker 12: So obviously that's on the table. I think with us,
Speaker 12: as well as a lot of other companies, I think
Speaker 12: we're in a little bit unique position in that we
Speaker 12: have a four hundred and fifty million dollar market cap,
Speaker 12: we have our own cash, we have our own capital.
Speaker 12: We need more of a big brother than a huge
Speaker 12: capital investment. Now, as we ramp up this year and
Speaker 12: do the things that we've told the public we plan
Speaker 12: on doing and the DoD I think there's a very
Speaker 12: good chance in twenty twenty six if we want to
Speaker 12: do another smelter, if we want to do another project.
Speaker 12: We also are involved in tungsten and cobalt other two
Speaker 12: other critical minerals, then those type of opportunities exist. But
Speaker 12: what we're negotiating today and have been for the last
Speaker 12: eight months is something different. It's very positive for our company,
Speaker 12: but it's not a direct investment by the government.
Speaker 13: Gary, I want to kind of bring people into what's
Speaker 13: at stake here, or at least what is being said
Speaker 13: is at stake. As you mentioned, the Chinese officials put
Speaker 13: an export control on antimony, which came well after the
Speaker 13: germanium and gallium that so many people talked about a
Speaker 13: couple years ago. Have you guys experienced any of these
Speaker 13: effects of export controls on antimony from China?
Speaker 7: Yes, unfortunately we have.
Speaker 12: We were acquiring material from a company out of Australia
Speaker 12: and we were taking that material their fifty five ton
Speaker 12: container loads to our smelter in Madero, Mexico, and that particular,
Speaker 12: this third load that we acquired was transloaded over in
Speaker 12: China in April and the Chinese customs confiscated our container,
Speaker 12: took it off the ship and held it for ninety days,
Speaker 12: gave us no reason. All the paperwork was correct, it
Speaker 12: had been paid for, and we finally had to get
Speaker 12: the State Department in the White House involved for some reason.
Speaker 12: Finally they released it. It showed back up in Australia,
Speaker 12: did not come to us. They sent it back to Australia.
Speaker 12: Was arrived there about three or four days ago. It's
Speaker 12: currently ownership to Mexico.
Speaker 7: Now.
Speaker 12: So from now on, obviously, whoever we buy antimony from,
Speaker 12: we're in a putting in our contracts. They cannot stop
Speaker 12: in China because China did this. For whatever reason, we
Speaker 12: know this company used to sell antimony to China. Maybe
Speaker 12: they were mad the fact I said US antimony on
Speaker 12: it maybe was ticked them off. I don't know, but
Speaker 12: they definitely made a statement with what they did.
Speaker 5: We're speaking with Gary Evans, chairman and CEO of United
Speaker 5: States Antimony Corps, also with US US Economic stake Craft
Speaker 5: reporter Joe Dell.
Speaker 13: Gary a follow up on that, I mean, what does this,
Speaker 13: what does this really say, I like, should people actually
Speaker 13: be concerned? I mean, eventually your antimony is getting to
Speaker 13: you here at your Mexico location, Like, are are sounding
Speaker 13: too many alarm bells on this front?
Speaker 7: I don't think so.
Speaker 12: I really, I doubt in our lifetimes we'll ever see
Speaker 12: antimony coming out of China again. We know their largest
Speaker 12: minor was depleted last year. Ever, and so ever, I
Speaker 12: don't think we'll ever see antimony coming out of China.
Speaker 12: There is truly a worldwide shortage of this product. It
Speaker 12: is so difficult for us to find product. That's why
Speaker 12: we went and started mining it ourselves. There's just not
Speaker 12: any supply.
Speaker 5: Presidents love to talk about energy independence, it doesn't matter
Speaker 5: if they're Democrats or Republicans. Do we get to a
Speaker 5: point where they can talk about antimony independence and we
Speaker 5: can get one percent of what the US needs from
Speaker 5: US supplies?
Speaker 12: I have no doubt that we can meet all the
Speaker 12: needs of our government as well as our industrial customers
Speaker 12: from Canada, the United States, and Mexico.
Speaker 7: We don't need to go anywhere else.
Speaker 12: When When will we be able to do that in
Speaker 12: the next three to five years.
Speaker 7: It's not going to happen overnight.
Speaker 5: You know, in the last few years, you would have
Speaker 5: said Canada, United States, and Mexico and I have thought, okay,
Speaker 5: that could work. These countries can all work together. But
Speaker 5: over the last few months we've seen trade tensions flare,
Speaker 5: especially with our neighbors to the north and our neighbors
Speaker 5: to the south. How does that affect the way you
Speaker 5: look at the industry in your own business.
Speaker 12: No question that. You know, Mexico has a new president.
Speaker 12: She's very anti mining. Fortunately the minds that we have
Speaker 12: in Mexico or grandfather, but you know, there needs to
Speaker 12: be greater collaboration.
Speaker 6: Now.
Speaker 12: The DD looks at Canada dislike it was in the
Speaker 12: United States. So any project we find up there, the
Speaker 12: DoD likes it and looks at it as a domiciled country.
Speaker 3: Great is that as a separate country or because they
Speaker 3: want to take it over?
Speaker 12: Well, you know the fifty first state, of course, is
Speaker 12: what I'm talking about now.
Speaker 3: So you're saying relations between the two nations are comfortable,
Speaker 3: and despite what we have in the headlines, you're saying
Speaker 3: that they are working and cooperating because they understand they
Speaker 3: kind of need each other.
Speaker 12: Yeah, Canada needs antimony just as bad as the United
Speaker 12: States needs antimony and Canada is a very pro mining country.
Speaker 12: So that's why we have a lot of activities like
Speaker 12: I mentioned in tungsten and cobalt in Canada Gary.
Speaker 13: These conversations you have with defense officials, how dire are
Speaker 13: they indicating to you that the antimony shortage is for them?
Speaker 12: When you see the announcements will be making, you'll understand
Speaker 12: it's pretty dire. We have the lowest we have the
Speaker 12: lowest amount of antimony supplies in the inventory for our
Speaker 12: government since World War Two. You got to remember we're
Speaker 12: funding Israel, we're funding Ukraine, and we've dwindled our supplies
Speaker 12: and at the same time China cut us off. So
Speaker 12: it's a double edged sword. People are waking up that hey,
Speaker 12: we have a problem.
Speaker 5: So what does that mean for national defense? Like, what
Speaker 5: would your message be to viewers and listeners right now
Speaker 5: about how critical this mineral is.
Speaker 12: It's a it's an extremely critical mineral. And there's there's
Speaker 12: you know, people that have tried to replicate antimony with
Speaker 12: other synthetic antimony and hasn't worked very well at all.
Speaker 12: In fact, it's three times expensive. I do think they'll
Speaker 12: be continued upward pressure on the price because we cannot
Speaker 12: meet we can't come close to meet our customer's demands.
Speaker 12: We're we're changing that. We have a substantial expansion going
Speaker 12: on in Montana that'll be done by the end of
Speaker 12: the year. But you know, it's just going to take
Speaker 12: some time. It's not going to happen overnight. It's not
Speaker 12: like there's a huge pile of antimony sitting over here
Speaker 12: in some country waiting to go to market. It's all depleted,
Speaker 12: so we're having to find new areas to find the ore.
Speaker 3: Gary, how long has the dwindling supply issue been going
Speaker 3: on for? And I'm just curious if you had conversations
Speaker 3: with the Bidy administration as well.
Speaker 7: Well.
Speaker 12: Because China was selling so much antimony around the world,
Speaker 12: nobody cared about it. China kept the price artificially low, less.
Speaker 7: Than five dollars a pound.
Speaker 12: Today the price is twenty five to twenty seven dollars
Speaker 12: a pound and probably going higher. I really believe we'll
Speaker 12: see fifty dollars a pound in the next year. So
Speaker 12: you know, the fact that we were so fact that
Speaker 12: we're so dependent upon China and had blindfolds on that
Speaker 12: all of a sudden, they cut it off had nothing
Speaker 12: to do with Trump coming in office. This happened last September,
Speaker 12: so it's been a year since they cut everybody off.
Speaker 7: It's not just the United States.
Speaker 12: They cut off every country in the world, the European Union,
Speaker 12: all other countries that were buying antimony. You can sell
Speaker 12: antimony to China when you get nothing back in return
Speaker 12: other than cash.
Speaker 13: Gary, what's the biggest hurdle US antimony faces right now
Speaker 13: in getting more antimony production up and out the door.
Speaker 12: If I had my permits right now in Alaska and
Speaker 12: in Montana, I'd have antimony in our smelters. I don't
Speaker 12: have those permits yet. And you know, we're doing everything
Speaker 12: we can to speed it along. There's people in Alaska
Speaker 12: that don't want to see mining, and the group called
Speaker 12: Save our Domes.
Speaker 7: We've done pr work.
Speaker 12: We're doing everything we can to a greeze the skids
Speaker 12: to make sure that people understand that.
Speaker 7: We're we're trying to clean up.
Speaker 12: This is antimony left on the ground the last one
Speaker 12: hundred years from gold miners in Alaska. We're picking it up,
Speaker 12: putting in super sacks, and bringing it to Montana. We're
Speaker 12: cleaning up the place and people are fighting that. So
Speaker 12: it's an education process that we've got a lot of
Speaker 12: pr we're doing, and we're obviously working with senators, House members,
Speaker 12: we're working with the President. We're working with a lot
Speaker 12: of people. You'll see some other news about that next week.
Speaker 13: Gary, would would the Defense Department be your only customer?
Speaker 12: We currently have seventeen industrial customers. We have one particular customer.
Speaker 12: It would take one hundred percent of our supply. So
Speaker 12: that gives you an idea. The industrial side is much
Speaker 12: greater than the Department of Defense. And that's you know,
Speaker 12: one thing in these contracts we're been working on. They've
Speaker 12: made sure that we don't take away the business from
Speaker 12: the industrial side. And that's why we're ramping up. Because
Speaker 12: the government needs a stockpile which they currently don't have.
Speaker 7: And we're the only provider. There's nobody else.
Speaker 12: It's China's us antimony and a smelter in Belgium.
Speaker 7: That's it for the whole world.
Speaker 4: All Right, We're gonna have to leave it there. I
Speaker 4: got to say, this is one of those interviews. I
Speaker 4: know Joe knows this.
Speaker 3: Stuff, but I certainly take a lot away from it. Great, Gary,
Speaker 3: thank you so much Gary Evans, chairman CEO of US Antimony,
Speaker 3: joining us from our bureau in Dallas, and of course
Speaker 3: our in house expert on all things when it comes
Speaker 3: to mining, Bloomberg News Economic.
Speaker 4: Statecraft reporter Jodoe.
Speaker 3: By the way, shares of US antimony timp there up
Speaker 3: about one hundred and seventeen percent here to day.
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Speaker 3: Firstep this hour. Green firms in the United States have
Speaker 3: found something of a lifeline in artificial intelligence after being
Speaker 3: bogged down by high interest rates, shrinking funding, and more recently,
Speaker 3: President Trump's sharp rollback of support.
Speaker 5: Our Bloomberg New Energy Finance team recently pointed out that
Speaker 5: clean tech companies that have inked deals to support data
Speaker 5: centers have seen their stock sore this year, out performing
Speaker 5: the S and P five hundred. That includes the stock
Speaker 5: price of fuel cell provider Bloom Energy, which as we
Speaker 5: put our show to bed this week, nearly doubled so
Speaker 5: far this year and as a roughly ten billion dollar
Speaker 5: market cap.
Speaker 3: And shares of Bloom Energy continue to rally big time
Speaker 3: again this week.
Speaker 14: K R.
Speaker 3: Shreeter is founder, chairman, and CEO bloom Energy. He joined
Speaker 3: Bloomberg's David Gore and me to discuss the impact of
Speaker 3: AI on its business and a lot more.
Speaker 15: This is an amazing time yeah in human history where
Speaker 15: we have no seeing the need for power growth anywhere
Speaker 15: close to what we are seeing today. Let me put
Speaker 15: it in perspective, the amount of power that the big
Speaker 15: hyperscalers are saying they need between now and twenty thirty
Speaker 15: is equal to all the power every single family home
Speaker 15: in the US put together would need about eighty five
Speaker 15: million single family homes Give or day all the power
Speaker 15: that they use is going to be needed in addition
Speaker 15: to the power we have today to just power the
Speaker 15: AI data service. That's how large this opportunity is. And
Speaker 15: very clearly the old model of centralized power plants with
Speaker 15: transmission distribution simply cannot meet that demand in a timely fashion.
Speaker 15: That is the opportunity. And Bloom was purpose built to
Speaker 15: provide on site power for the digital revolution, and we
Speaker 15: are so happy to be in the right place at
Speaker 15: the right time.
Speaker 16: Well, help us understand how the company works. And you
Speaker 16: mentioned that on site power, so what that looks like.
Speaker 16: Of course, there's been so much conversation recent months about
Speaker 16: perhaps the need to invest more in nuclear power or
Speaker 16: fortify the grid, bring more power plants online. How do
Speaker 16: you see your company as maybe not a substitution for that,
Speaker 16: but a compliment to the kind of growth and develop
Speaker 16: we're likely to see here in the power grid going forward.
Speaker 15: I think we're going to need all forms of power
Speaker 15: in very large quantities going forward to meet our ratios
Speaker 15: like energy needs. However, in the short term, if you
Speaker 15: take five to ten years, natural gas to electricity is
Speaker 15: going to be the single largest contributor to this additionality,
Speaker 15: what Bloom does. It takes natural gas without burning it,
Speaker 15: without combustin. We extract the chemical energy in it using
Speaker 15: a fuel cell and make electricity at the highest efficiency
Speaker 15: without air pollution, without noise in our generators because they
Speaker 15: have quiet, solid state and a very high reliability.
Speaker 7: For those reasons, if you are in a.
Speaker 15: Neighborhood that is going to have a data center, we
Speaker 15: are your best choice because we don't pollute your air,
Speaker 15: we don't use water, and we don't make any noise
Speaker 15: as we generate this reliable power, So you can have
Speaker 15: the economic advantage that a data center brings to the
Speaker 15: local community. At the same time, you're not compromising on
Speaker 15: your health.
Speaker 3: So one thing I want to ask you, actually, our
Speaker 3: Will Wade does who really covers this space? And we
Speaker 3: were talking about you coming on and he said, well,
Speaker 3: wait a minute, let's talk about these fuel cells for
Speaker 3: data centers. Can fuel cells really work for this? What
Speaker 3: evidence have you guys seen that it does really work?
Speaker 15: So, yeah, that's a great question. The issue is we
Speaker 15: are progressing so fast in our technology at ai speed
Speaker 15: that some people that have looked at fuel sales ten
Speaker 15: years ago and have that notion of who we are
Speaker 15: don't understand where we are today as a company. We
Speaker 15: already are powering more than half a gigawa worth of
Speaker 15: data center because our total installed capacity for data centers
Speaker 15: is more than half a gigawat. So we're not a concept.
Speaker 15: We are not a PowerPoint. We're actually producing power for
Speaker 15: these data centers. And this year alone we have increased
Speaker 15: our capacity to one giga what a year, and we
Speaker 15: announced in our earnings call that by end of next
Speaker 15: year we can do two gigawards a year. That's two
Speaker 15: nuclear power plants worth of power coming out of our
Speaker 15: factory next year. And you know how long it takes
Speaker 15: to build a nuclear power plant and actually commission it.
Speaker 15: So we are no longer a concept. We are a
Speaker 15: mature technology that is affordable and can compete with other
Speaker 15: technologies that don't have as good attributes as we do Strata.
Speaker 16: I wonder if you could talk a bit about your
Speaker 16: business model. I know that you've announced deals with with
Speaker 16: other companies, most recently with Oracle, of course, the company
Speaker 16: that I know is building investing a lot in its
Speaker 16: data center infrastructure.
Speaker 2: Could you.
Speaker 16: Cares for you just give us a sense here sort
Speaker 16: of of what those deals look like. What that deal
Speaker 16: with Oracle is like and in particular.
Speaker 15: Yeah, David, So our customers, here's what happens. Once we
Speaker 15: sign a deal with the customer, they either buy the
Speaker 15: capital equipment from us, and then they also sign up
Speaker 15: for a service contract. It's one hundred percent attached rate
Speaker 15: because we run those units for them and we maintain
Speaker 15: that and we offer them the promise guarantee of performance. Now,
Speaker 15: if they don't buy the equipment as caadpex, we create
Speaker 15: a special purpose vehicle using financing and we simply sell
Speaker 15: them power like the utility world, except this is on
Speaker 15: site and highly reliable and clean. So either way, when
Speaker 15: we create a special purpose vehicle, that financial investor in
Speaker 15: that vehicle gives us the upfront money for our capital,
Speaker 15: and we also have an annuity revenue coming out of service.
Speaker 15: So we have two streams of revenue if you want
Speaker 15: to think about it. Installed capital equipment that gets paid
Speaker 15: to us when we ship the equipment, a continuous service
Speaker 15: annuity over the tenure of the contract. That's how we
Speaker 15: make our money, irrespective of whether the customer actually buys
Speaker 15: the capital equipment or a third party buys the capital
Speaker 15: equipment and then charges the monthly rate from the customer.
Speaker 4: Hey, kr Way, I'm curious.
Speaker 3: I'm looking at one of my favorite functions on the
Speaker 3: bloom markets and supply chain function, and I'm looking at
Speaker 3: your customers. Your biggest is I think American Electric Power Company,
Speaker 3: but I'm also looking at Alphabet Microsoft. Do you know Yep,
Speaker 3: sound familiar. These are some of the hyperscalers. Tell me
Speaker 3: how they are amping up their business because they're the
Speaker 3: ones who are doing the massive, massive AI spend, but
Speaker 3: it looks like they're a very small part of your business.
Speaker 3: I'm just curious about what's the conversations you're having with them.
Speaker 3: Are they ramping up to do more with you? That
Speaker 3: would be very telling.
Speaker 15: Yes, the answer to your question is very simple. In
Speaker 15: the past, these hyperscalers would spend all their capital equipment
Speaker 15: just on building the data centers and they could simply
Speaker 15: pick up the phone and call the utility company and
Speaker 15: they would provide the power. No longer is that a
Speaker 15: reality because the utility does not have the amounts of
Speaker 15: power that these hyperscalers need. So now electricity power, which
Speaker 15: is what ultimately the data center needs to monetize the
Speaker 15: data center, is a supply chain that comes from the
Speaker 15: common good called the utility. So they have to own
Speaker 15: that supply chain or they to procure from that supply Chaine,
Speaker 15: we are very much an integral part of that supply chain.
Speaker 15: And we are having conversations with all the hyperscalers today
Speaker 15: and you've seen the announcement rhetorical expect to see similar
Speaker 15: things coming soon. Our American Electric Power contract was actually
Speaker 15: for AWS, which is another hyperscaler.
Speaker 16: I wonder if you could situate your company and this
Speaker 16: industry in the moment that we're in. So we're coming
Speaker 16: out of an administration that was doing a lot to
Speaker 16: support or encourage the adoption of alternative energy. It's why
Speaker 16: to say this is administration that's not doing that. There's
Speaker 16: much less impulse to do that going forward. Here, What
Speaker 16: do you see here as the ideal role of government
Speaker 16: in encouraging the adoption of technologies like yours? In other words,
Speaker 16: if you'd like to see fuel cell technology take off,
Speaker 16: be more widely adopted, what is the role of government
Speaker 16: in making that happen?
Speaker 7: If any?
Speaker 15: I think a simple role that they can play going
Speaker 15: forward is the US government, between the various government functions,
Speaker 15: the military and the intelligence, is the largest procurer of
Speaker 15: electricity to be able to purchase electricity from technologies that
Speaker 15: are made in America. We are made in America technology.
Speaker 15: No other country in the world has the technology that
Speaker 15: we have. So they should embrace us, and they should
Speaker 15: give us an opportunity to serve the US government, the
Speaker 15: US military, and US intelligence and make us a really
Speaker 15: strong country.
Speaker 3: Well there, I was also curious about. And I'm looking
Speaker 3: at your market cap. It's almost about nine point six
Speaker 3: billion dollars, and it is this excitement over AI. You know,
Speaker 3: there's all the money that's being spent care on the buildout,
Speaker 3: and I get that, but I'm just curious. And then
Speaker 3: there's going to be the maintenance and we might not
Speaker 3: need as many workers. And you know, we're all trying
Speaker 3: to get our head about around whether you know, the
Speaker 3: boom the bust part of maybe AI after the build out,
Speaker 3: what is the business for you? Is it maintenance? Is
Speaker 3: it replacement values?
Speaker 4: I'm just curious.
Speaker 15: Oh, thank you for asking that question, Carol. The buildout
Speaker 15: is just a tip of the iceberg. Why would these
Speaker 15: large hyperscalers spend close to a trillion dollars worth of
Speaker 15: capex just this year alone. If all that they're going
Speaker 15: to do is that buildout that's the training data centers.
Speaker 15: The inference data centers will be at least an order
Speaker 15: of magnitude larger than these training data centers, which are
Speaker 15: the foundation building blocks every factory, every bank, every law firm.
Speaker 15: They're going to have inference data centers close to the edge.
Speaker 15: And these edge data centers are going to be located
Speaker 15: where you all live, where people are, where equipment is,
Speaker 15: and in those congested cities, getting the additional power needed
Speaker 15: ten to twenty megawatts in every edge data center, which
Speaker 15: is an inference data center. We are ideally suited not
Speaker 15: just for the large data centers, but for these age
Speaker 15: data centers because we are non polluting, you're quiet, you're reliable,
Speaker 15: and we can provide it on site very quickly. So
Speaker 15: we're super excited about what we think is a really
Speaker 15: secular phenomenon that's happening here that's going to last for
Speaker 15: a very long time to come. This is not just
Speaker 15: a build and bust cycle at all as far as see.
Speaker 4: So would you say a long time? Are you saying
Speaker 4: decades or.
Speaker 15: I'm just going to at least a couple of decades
Speaker 15: at least a couple of decades.
Speaker 4: All right, good to know, we'll stay in touch.
Speaker 3: Love to hear because you certainly have a front row
Speaker 3: seat in terms of this spend and what is going on.
Speaker 4: Certainly all the power that's needed. It's just kind of astounding.
Speaker 4: Doctor K. R. Schweder.
Speaker 3: He is founder, chairman, and chief executive officer of bloom Energy.
Speaker 3: The stock david up another nine percent in today's session,
Speaker 3: and it's really been on a tear this year, up
Speaker 3: about eighty four percent.
Speaker 16: So so interesting to talk about these companies because we
Speaker 16: focus so much on the AI provide as we're making
Speaker 16: these chatbots and all the developments there, but as we
Speaker 16: were just discussing the apparatus that you need to make
Speaker 16: all of that work so huge, so sprawling, and I'm
Speaker 16: just fascinating every time I kind of learn what goes
Speaker 16: into that making all of this stuff run.
Speaker 3: Right, Right, we just hear about that kind of the
Speaker 3: big hyper skelets, and they spend, but there's a lot
Speaker 3: of stuff that needs to be done.
Speaker 2: You're listening to the Bloomberg Business Weekdaily podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm Eastern. Listen
Speaker 2: on Apple CarPlay and Android Auto with the Bloomberg Business app,
Speaker 2: or watch us live on YouTube.
Speaker 5: Let's talk real estate, because our Bloomberg News team reported
Speaker 5: that Manhattan home sales in the second quarter were stronger
Speaker 5: than they've been in almost two years. Bo'sted by cash
Speaker 5: buyers who've been undeterred by the economic uncertainty created by
Speaker 5: President Trump's trade war. We got some numbers here. A
Speaker 5: little more than three thousand co op in condo purchases
Speaker 5: closed during the quarter. That's a seventeen percent chop from
Speaker 5: a year earlier. That's according to Miller Samuel and the
Speaker 5: brokerage Doug Ellman. The median price of those transit actions
Speaker 5: one point two million dollars. That's up one point six percent.
Speaker 3: I love this cash buyers, all right, So we're wondering
Speaker 3: what Louise Phillips Forbes isssing. She's a real estate broker
Speaker 3: with Brown Harris steven She's been in the industry for
Speaker 3: more than three decades. We love kind of picking her
Speaker 3: brain about what's going on. She's got close to six
Speaker 3: billion dollars in sales during her tenures. She's back with
Speaker 3: us here in our Bloomberg Interactive Broker studio. Hello, Hello,
Speaker 3: Kay Good to see you, guys, Good to see you.
Speaker 3: So where are we give us a snapshot of the
Speaker 3: market right now?
Speaker 1: You know, you just did that little snapshot of the quarter.
Speaker 1: I did a little snapshot from May and June for
Speaker 1: twenty twenty four compared to twenty twenty five, and there
Speaker 1: was a seventy two percent volume and price sales, so
Speaker 1: it went from one point four billion in sales to
Speaker 1: two point four billion, so of contrast and science almost
Speaker 1: and then you also had a twenty five percent on
Speaker 1: the number of transactions. So this is all four million
Speaker 1: and above. And on an average of those two months
Speaker 1: in twenty twenty four they were eight point two million.
Speaker 1: This year they're eleven million. So you know, chaos is
Speaker 1: opportunity for many. And cash on those deals is ninety
Speaker 1: ninety percent. That's a lot. So it's kind of interesting.
Speaker 1: I mean, I talk to my bankers all the time, and.
Speaker 7: They are busy.
Speaker 1: They are busy, but on the lower end, and people
Speaker 1: are closing with cash and then they're pulling out you know,
Speaker 1: cash back.
Speaker 4: Okay.
Speaker 5: We spoke to Peter Auchen Bloom Auker Bloom, chief revenue
Speaker 5: officer at Centsion Jet the day that Flexjet announced this.
Speaker 5: Another private jet firm that owned by the same parent
Speaker 5: company announced this investment, and they basically said, we're seeing
Speaker 5: wealthy people from tech and crypto younger people from tech
Speaker 5: and crypto want private jets. We're seeing our demographic go younger,
Speaker 5: and we're seeing crypto.
Speaker 1: Inn't surprise me.
Speaker 5: Is that happening to you?
Speaker 4: I think that the assets.
Speaker 1: First of all, let's just kind of bring it down
Speaker 1: for one second and remember that the first time buyer
Speaker 1: today on an average is pushing forty years old. That's
Speaker 1: different from that millennial run that we had in the
Speaker 1: construction boom.
Speaker 4: But even in New York, right in New York, Yeah.
Speaker 1: Particularly in New York, to be honest, and I'm seeing
Speaker 1: more and more first time buyers that are purchasing that
Speaker 1: are having family members, multi generational family members like grandmothers,
Speaker 1: like instead of inheriting this, I'm giving it to you
Speaker 1: or I'll co purchase with you with the right to survive.
Speaker 1: So listen, creativity is We're in Mecca, so people are
Speaker 1: going to be creative to buy a piece of the rock.
Speaker 1: And I do think the you know, new money and
Speaker 1: I've seen it. Watch the tech commitment from the first
Speaker 1: announcement of Google in two thousand and five with like
Speaker 1: forty eight employees morph to five hundred to twenty five hundred.
Speaker 1: And you see that we are now becoming a hub
Speaker 1: for tech. And as you run up against the housing
Speaker 1: issues that are in California, we're attractive. You know, we
Speaker 1: can get insurance for our apartments.
Speaker 5: Do we stay attractive even if Zoron Mamdani wins the
Speaker 5: mayoral race?
Speaker 1: You mean Robin Hood, I mean the Robin Hood rhetoric.
Speaker 1: I mean, listen, I know this person cares about New Yorkers.
Speaker 1: I believe that. I believe wholeheartedly that his intentions are stellar.
Speaker 1: But you know, the ideology around real estate is not
Speaker 1: a conversation.
Speaker 4: It's action.
Speaker 1: It's infrastructure, it's collaboration public private. And you know, we
Speaker 1: just crawled out of five years of COVID. We now
Speaker 1: have sixty four million last year in tourism. You know,
Speaker 1: the crime is down, you have people back in the office.
Speaker 1: So freezing rent is doing nothing, and it's it's also
Speaker 1: suggesting that landlords are all on their yachts doing nothing,
Speaker 1: and that they should be paying for the opportunity for
Speaker 1: somebody else to be able to pay rent. But there's
Speaker 1: so many landlords that are just skinning by because they
Speaker 1: were postponed from allowing people who weren't paying rent.
Speaker 3: So Louise, you know, Tim and I talk about this
Speaker 3: a lot, and I feel like when we have real
Speaker 3: estate discussions and the idea of providing affordable homes in
Speaker 3: kind of major cities where a lot of people work,
Speaker 3: so that you don't have individuals who are maybe not
Speaker 3: making that much money having to travel an hour or two.
Speaker 4: I've in order to work.
Speaker 3: So what's what's because I've been talking about this like
Speaker 3: my whole career.
Speaker 4: Yeah, how you know, this industry, how do we do
Speaker 4: this so.
Speaker 3: That there is affordable homes in the places where people
Speaker 3: are working.
Speaker 1: I mean when I came into the business, they had
Speaker 1: something called four twenty one a's. There were certificates that
Speaker 1: when you improve a land, yeah there's an unimproved land.
Speaker 1: And remember Bloomberg, thank you twelve twelve years of you know, rezoning,
Speaker 1: you know probably forty percent of our land mass, which
Speaker 1: has helped that situation. And when you build in the
Speaker 1: middle of I don't know. I mean they used to
Speaker 1: have these tax certificates that when developers would improve land,
Speaker 1: they would get a four to twenty one a tax abatement.
Speaker 1: It's a ten year abatement on your taxes, and then
Speaker 1: for that certificate they would then go and sell it
Speaker 1: for somebody to do affordable housing somewhere else that is
Speaker 1: not that has gone away.
Speaker 4: Now was that affordable house though still in New York City?
Speaker 4: That yes, oh okay.
Speaker 1: And by the way, you know, people would say, it's well,
Speaker 1: we don't want to just be in the Bronx and
Speaker 1: in you know, far parts of Brooklyn or Queens But honestly.
Speaker 4: And nothing wrong with those parts. You want to admit,
Speaker 4: and you want a mixture.
Speaker 1: And I just think that it has to be thoughtful
Speaker 1: and it has to be collaborative, and it can't be
Speaker 1: just somebody who isn't practically experiencing these things making rules up,
Speaker 1: like you know, the city councilmen that wants to have
Speaker 1: that has good intentions around broker fees, well, rentals as
Speaker 1: of June eleventh are up fifteen percent because they've just
Speaker 1: passed it all off to the consumer and so unintentional
Speaker 1: consequences when lawmakers don't want to collaborate with the industry
Speaker 1: individuals as well as just regular people. If it's only
Speaker 1: politicians making these decisions and not working with their people.
Speaker 3: I think there's always a concern though, that that the
Speaker 3: people who are renting don't have the voice and don't
Speaker 3: have a seat at the table.
Speaker 1: But you know what I mean, So city is sixty
Speaker 1: eight percent, it's a city of renters.
Speaker 4: Yeah. Yeah.
Speaker 5: I want to get to know your clients a little
Speaker 5: bit and how they're different than they were let's say
Speaker 5: a year ago. The people who are selling real estate
Speaker 5: with you right now, why are they selling and where
Speaker 5: are they moving?
Speaker 1: I mean a lot of it is life change, you know.
Speaker 1: But I'm I have people that have been contemplating selling
Speaker 1: since twenty twenty that are now selling because there's a
Speaker 1: lack of inventory. What their apartments were not worth in
Speaker 1: twenty twenty three are worth what they would like and
Speaker 1: they'll accept it. So, look, a lot of people are
Speaker 1: downsizing and staying in the city. They are people that
Speaker 1: are leaving. But that's that's that's a life decision. That is,
Speaker 1: you know, a cycle of life. I mean, I have
Speaker 1: a lot of people coming back into the city because
Speaker 1: their grandkids and their kids are here. So who are
Speaker 1: my sellers? My sellers range from like a one bedroom
Speaker 1: for six hundred and fifty thousand dollars to and that's
Speaker 1: somebody who bought who now is leaving the city and
Speaker 1: loved owning her home and she's ready for a new
Speaker 1: chapter in Colorado. And then you have a sixteen million
Speaker 1: dollar penthouse which is from one of my developers that
Speaker 1: will be coming on the market in September on the
Speaker 1: Upper West Side, and I just think there's just not
Speaker 1: enough inventory. Inventory is twenty one percent down, and that
Speaker 1: is the first time we've experienced that since COVID as well.
Speaker 3: It's amazing because sometimes it feels like there's a ton
Speaker 3: of building and stuff going on. Hey, before you go,
Speaker 3: you've got a minute and a half left. Tell us
Speaker 3: about what you're seeing. In terms of international purchases.
Speaker 1: They're coming, they're coming, and it's doubled since twenty twenty four,
Speaker 1: particularly the Chinese market. I mean, when you were dealing
Speaker 1: with strife in your government and the housing market in
Speaker 1: Beijing is kind of upside down.
Speaker 4: I'm not familiar with.
Speaker 1: That market particularly, but in all of the appointments that
Speaker 1: I've had, in all the various kindomniums, they are buying
Speaker 1: some of them are buying with the anticipation of their
Speaker 1: children in the future to be going to school here.
Speaker 5: Where are they buying all over?
Speaker 1: But new developments, particularly matt has always been in Manhattan, Brooklyn,
Speaker 1: Long Island City. We were talking earlier about there are
Speaker 1: some developers that are leaning into the Asian market by
Speaker 1: accepting deposits that are in the Chinese You're on, yeah,
Speaker 1: and that is because they are They're being nimble. We
Speaker 1: have to be nimble. That's new, that's relatively new. There
Speaker 1: are two projects in particular, one is in Long Island
Speaker 1: City and this was news for me. You know, a
Speaker 1: couple of months ago.
Speaker 5: Russian buyers gone.
Speaker 1: Yeah, no, no quiet, quiet, coming back, quietly trying to
Speaker 1: acquire or displace, you know, place assets, but not as
Speaker 1: big as what we experienced when you had the eighty
Speaker 1: eight million fifteen Central Park West transactions like that, midas
Speaker 1: Que Yepes and you have also I think there I
Speaker 1: have had three different Korean transactions this year. I think
Speaker 1: they're quiet. French. I mean, I think people are trying
Speaker 1: to come here. There's there's you know, jargon around the
Speaker 1: Canadians not being happy and.
Speaker 3: If President Trump go does away with a capital gains
Speaker 3: tax on house sales.
Speaker 4: What would that mean? And just got twenty five just.
Speaker 1: To remind everybody when Bush was in the house in
Speaker 1: twenty twelve and he reduced the capital gains to fuel
Speaker 1: our market went on fire in twelve and thirteen.
Speaker 4: Just for that.
Speaker 1: That was like the people that lived on Park Avenue
Speaker 1: and Fifth Avenue for four decades. Finally sold.
Speaker 4: I can only imagine. Louise Phillips Forbes.
Speaker 3: Always fun to check in with you be well, Be
Speaker 3: well Real estate broker Brown Harris Stevens joining us in
Speaker 3: our Bremberg Interactive Broker studio.
Speaker 4: This is Bloomberk.
Speaker 2: This is the Bloomberg Business Week Daily Podcast. Listen live
Speaker 2: each weekday starting at two pm Eastern on Apple car
Speaker 2: Play and Android Auto with the Bloomberg Business App. You
Speaker 2: can also listen live on Amazon Alexa from our flagship
Speaker 2: New York station, Say Alexa played Bloomberg eleven thirty.
Speaker 3: This weekend wraps up the finale of Monterey Car Week,
Speaker 3: where the California Coast becomes the ultimate showroom for some
Speaker 3: of the world's most extraordinary automobiles and car enthusiasts.
Speaker 5: It ends with their annual event, the Pebble Beach Concord Elegance.
Speaker 5: Sandra Button knows about this event pretty much better than
Speaker 5: anyone else. She's a longtime chair of the Pebble Beach
Speaker 5: concor She previews what makes this year's show so special
Speaker 5: and gives a look into the collector car market.
Speaker 17: The collector car market is really celebrated on this one
Speaker 17: day a year at Pebble Beach when it's sort of
Speaker 17: like the Olympics of cars, and it's a whole symphony
Speaker 17: of different kinds of cars from you know, cars from
Speaker 17: the late eighteen eighties all the way to Formula one
Speaker 17: cars that were just raced this last season. So we
Speaker 17: really all things cars and everything in between. And of
Speaker 17: course you mentioned the beautiful cars from the thirties and
Speaker 17: the swoopy lines. Well, it's all going to be here.
Speaker 18: So how does a car get invited to the show?
Speaker 18: Because is it that the car gets invited, not necessarily
Speaker 18: the owners.
Speaker 4: It's all about the cars. And you know, because we
Speaker 4: have about two we have about two.
Speaker 17: Hundred and fifty cars on the field, and if you
Speaker 17: own a car, that's really important. And let's say it's
Speaker 17: a part of our celebration this year. We're celebrating one
Speaker 17: hundred years of Chrysler. We have Invicta's, Moretti's believe it
Speaker 17: or not, one hundred years of the Rolls Royce Phantom,
Speaker 17: just that one mark of car. So if you own
Speaker 17: one of those cars and it's critical that we have it,
Speaker 17: that it's important to celebrate's.
Speaker 4: That's one way to get invited.
Speaker 3: Hey, I want to ask a little bit more too
Speaker 3: about you know, judging and how it all works. But
Speaker 3: I want to take a step back, Sandra, because this
Speaker 3: is something that has been around for a long time,
Speaker 3: started back in nineteen fifty and I'm just.
Speaker 4: Curious why and how it came to be one of
Speaker 4: the most important prestigious car shows really in the world.
Speaker 17: Something that I think is really cool about the Pebble
Speaker 17: Beach Concourse that we're actually very dynamically organic. The event
Speaker 17: started in nineteen fifty and to be honest, the Pebble
Speaker 17: Beach Concord was just a side show the Pebble Beach
Speaker 17: road races that started in nineteen fifty. They were the
Speaker 17: star event and after the road race is finished then
Speaker 17: it was kind of time to kick tires and take
Speaker 17: a look at cars. And in the very beginning at
Speaker 17: Pebble Beach, the cars were brand new. They were sports
Speaker 17: cars from the fifties, and that kind of changed in
Speaker 17: nineteen fifty five when Phil Hill won with the Piercero
Speaker 17: with an actual, you know, antique car and not a
Speaker 17: brand new car. But Pebble Beach is all about celebrating
Speaker 17: everything automotive, racing, the style, even fashion.
Speaker 4: So I'm glad you got to see it once. It
Speaker 4: was amazing. I have to see the whole event.
Speaker 3: Just you're just driving around the area and there's parades
Speaker 3: through the streets and it's just really, really beautiful and
Speaker 3: really amazing.
Speaker 18: Sandra, I'm curious how in general has the collector's market
Speaker 18: been right now, because typically it's been pretty volatile.
Speaker 17: Well, I think you've mentioned it's been volatile. It's kind
Speaker 17: of like any art market. Of course, it has ups
Speaker 17: and downs. And I would say we're seeing some generational
Speaker 17: shift that a lot of the people that collected the
Speaker 17: cars from the twenties, thirties and forties are aging out
Speaker 17: of the hobby and we're getting newer collectors who are
Speaker 17: maybe looking for things that are more relative to their
Speaker 17: lifestyle or cars that they've seen on the road. So yeah,
Speaker 17: there is that generational shift. There's also the challenge of
Speaker 17: getting these cars restored. Many of the people that have
Speaker 17: worked on the cars, they're aging out as well, and
Speaker 17: there aren't as many people joining the ranks of restorers.
Speaker 17: Hannah wrote a great article today about how a car
Speaker 17: gets ready for Pebble Beach, and you can see that,
Speaker 17: you know, there's not as many people joining that profession
Speaker 17: that are leaving. So it's a great it's a great
Speaker 17: job to look for right now.
Speaker 4: Yeah, I agree with you.
Speaker 3: It's in our weekend Day for Bloomberg and she says,
Speaker 3: you know, she writes, she says that jobs, and she
Speaker 3: talks about one individual in particular, are the most tedious
Speaker 3: in the classic car business, which by its very nature
Speaker 3: tends to tract a select few maniacally devoted artisans.
Speaker 4: But we see that in general, like we talk about that, it's.
Speaker 3: Just not something we've seen certainly happening here in the
Speaker 3: United States.
Speaker 4: I love that you talked about though, a younger.
Speaker 3: Generation, and it's another thing that we talk about, you know,
Speaker 3: who's going to be collecting in the future. What does
Speaker 3: a younger generation of collectors CEDRA mean for the winners
Speaker 3: of the concourse, could a nineteen or nineties car win? Like,
Speaker 3: how do how does that evolve and impact?
Speaker 17: You're right, Younger cars, you know, that aren't as old,
Speaker 17: can be winning. And we have runners up to Best
Speaker 17: of Shows. So you know, we have two hundred cars
Speaker 17: on the field. There's maybe twenty eight classes, so you
Speaker 17: have to win your class to be eligible for Best
Speaker 17: of Show. And of those twenty eight cars usually boils
Speaker 17: down to three or four that are all really in
Speaker 17: contention for Best of Show. So we bring up those
Speaker 17: runner up the nominees for Best of Show. And in
Speaker 17: the last few years, we've had postwar cars we've had
Speaker 17: Last year we had a preservation car that hadn't been
Speaker 17: restored that actually became our winner. But you're right, the
Speaker 17: breadth of the years of those cars is widening, and
Speaker 17: I think it is because of the younger collectors that
Speaker 17: have so much passion. I mean, they really want perfection
Speaker 17: in their cars. They persevere through the restoration project process,
Speaker 17: which can take years, and they really want I think
Speaker 17: they're great stewards because they want the cars to be
Speaker 17: right for the future. So they dig into the history
Speaker 17: and they make sure that when they restore the car
Speaker 17: that they do right by it that they show the
Speaker 17: way that it was really built in the day.
Speaker 3: We're talking with Sandra Button, chairman of the Pebble Beach
Speaker 3: Concorde de Elegance, joining us from Pebble Beach.
Speaker 4: I am curious too about the theme this year.
Speaker 3: My understanding is it you guys are marking seventy five
Speaker 3: years of Formula one racing, So talk to us about
Speaker 3: this theme, how you're going to be celebrating it, and
Speaker 3: why you chose to pick that theme.
Speaker 17: Well, I think seventy five years is a pretty amazing
Speaker 17: you know, it's about the same age as the Pebble
Speaker 17: Beach Concord Elegance. But if you can think about we're
Speaker 17: going to be able to see the entire history of
Speaker 17: Formula one unfold before us, and we're also having a
Speaker 17: class of Grand Prix race cars that pre dated Formula One,
Speaker 17: so you're really going to be able to see the
Speaker 17: entire history of racing along the water at Pebble Beach.
Speaker 5: That's Sandra Button, chairman of the Pebble Beach Concord de Elegance.
Speaker 3: And Sandra came to us thanks to Bloomberg's Hannah Elliott,
Speaker 3: who's been right in the middle of all the action
Speaker 3: Tim at Pebble Beach.
Speaker 5: She's walking the fairway, taking in the really cool rare cars,
Speaker 5: the crowds and the excitement. Of course, we're talking about
Speaker 5: our car expert, Bloomberg News auto columnist Hannah Elliott.
Speaker 14: So this is a big year. It's the seventy fourth
Speaker 14: year of the Pebble Beach Concord Elegance. This year the
Speaker 14: they are celebrating seventy five years of Formula One. So
Speaker 14: the big thing on Sunday, which is when the main
Speaker 14: car show is is they're going to have thirty old
Speaker 14: vintage classic Formula one cars on the lawn, which I
Speaker 14: don't think we've seen a big group that significant of
Speaker 14: F one cars ever. So that's really the emphasis. We
Speaker 14: had the opening tour of the Concore, which is where
Speaker 14: all of the cars that are going to be shown
Speaker 14: on Sunday must complete a drive down the Peninsula, down
Speaker 14: to Bigsur, across the bridge and then come back. And
Speaker 14: that is to prove that they are running driving cars.
Speaker 14: These aren't just you know, garage trailer queens. They can drive.
Speaker 14: I was fortunate enough to be able to drive in
Speaker 14: that as well. I drove in a modern car. But
Speaker 14: that's actually the really big kickoff to what we can
Speaker 14: look forward to on Sunday. And then of course we've
Speaker 14: got auctions, which is a really big two selling similar
Speaker 14: you know, vintage and classic and collectible cars.
Speaker 4: What's a lot going on. Tell us about the collector
Speaker 4: car market.
Speaker 3: You know, you were kind enough to link us up
Speaker 3: with Sandra Button, chairman of the Pebble Beach Concord to Elegance,
Speaker 3: and we talked a lot about kind of the changing
Speaker 3: marketplace and maybe the interest or lack thereof, maybe among
Speaker 3: younger buyers.
Speaker 4: But it's evolving. Tell us about the marketplace right now.
Speaker 4: It is evolving.
Speaker 14: Historically, this has been really a celebration of pre war
Speaker 14: cars and cars from the fifties and sixties, and we
Speaker 14: are seeing that changing just because the people buying the
Speaker 14: cars are changing. It's coming into a new demographic, people
Speaker 14: who grew up with cars from the eighties and nineties
Speaker 14: and even the early two thousands, like Lamborghini, Kuntash's Ferrari
Speaker 14: F forties and f fifties. We're talking about that kind
Speaker 14: of era of car becoming more popular in the auctions
Speaker 14: and that is a trickle down effect. Everywhere. So, for instance,
Speaker 14: back to the Concoor on Sunday, we have never seen
Speaker 14: a non pre war car win. But as Sandra kind
Speaker 14: of alluded to, I think we're moving toward that point
Speaker 14: and the whole market is following that. Of course, you've
Speaker 14: got the Duesenbergs and the Packards and all of these
Speaker 14: really Rolls Royce's expensive multimillion dollar pre war cars. Those
Speaker 14: still exist, but there is a big up swell of
Speaker 14: these nineties and early two thousands Mercedes, Lamborghinis Ferraris that
Speaker 14: are really coming on strong, and I think that's where
Speaker 14: the market's going.
Speaker 5: I love that these are considered classic cars. Nothing, you know,
Speaker 5: these are like cars. Yes, I do feel old, thank
Speaker 5: you very much. I mean these are cars that I
Speaker 5: was reading, you know, the scene on the cover of
Speaker 5: like Car and Driver and Road and Track when I
Speaker 5: was growing up. You know, my dad had descriptions to
Speaker 5: all of these things.
Speaker 14: Completely and these things tend to go in thirty year cycles.
Speaker 14: So that is sort of the general rule of thumb.
Speaker 14: Whatever you grew up with the poster on your wall, yeah,
Speaker 14: thirty years later, maybe you can afford it.
Speaker 3: Wait, so the car I actually grew up, they like
Speaker 3: Driftwood Estate station Wagon.
Speaker 4: That was massive.
Speaker 3: That's a It was massive. It was like it just
Speaker 3: went on forever and ever.
Speaker 4: Yeah, called it the trade.
Speaker 5: Hey, before we let you go, what who's going to
Speaker 5: work on these cars? You've got a great story out
Speaker 5: about the dwindling numbers of mechanics who work on classic cars.
Speaker 5: You have a classic.
Speaker 15: Car, Yeah I do.
Speaker 14: I've got an old Rolls Royce and the man who
Speaker 14: looks after it is in his eighties. And I'm not joking.
Speaker 14: And that gets to your question. The people who work
Speaker 14: on these old classic cars tend to be on the
Speaker 14: older side. You know, if you're talking to a teenager
Speaker 14: about spending hundreds of hours in a back room somewhere
Speaker 14: learning how to press metal, that doesn't necessarily sound as
Speaker 14: fun as some of the other job opportunities right now.
Speaker 14: So there is a big gap between the people who
Speaker 14: look after the cars and trying to get younger people
Speaker 14: involved in this trade. There are some colleges like McPherson
Speaker 14: College which do have great restoration programs to teach younger
Speaker 14: people how to work on these cars, because at the
Speaker 14: end of the day, the love of the cars is
Speaker 14: going to stick around. The cars might change. We might
Speaker 14: go from pre war to Akontosh or a Gallardo, but
Speaker 14: it's still the car that needs to be worked on.
Speaker 14: So there's a gap right now, but there is some
Speaker 14: slow growth toward trying to get younger people involved. It's like,
Speaker 14: if anyone thinks they want to learn a trade, this
Speaker 14: would be a good one to go into.
Speaker 5: Our thanks to Hannah Elliott, Bloomberg News autocolumnist. Check out
Speaker 5: Hannah's podcast. She co hosts it with Matt Miller. It's
Speaker 5: called Hot Pursuit and in the episode they go into
Speaker 5: full detail of the cars that she saw it Cubble Beach.
Speaker 5: You can find it at Bloomberg dot com Slash Podcasts.
Speaker 3: And that wraps up the weekend edition at Bloomberg business
Speaker 3: Week from Bloomberg Radio.
Speaker 4: Thank you so much for joining us.
Speaker 3: I'm Tim Stenober and I'm Carol Messer. Have a good
Speaker 3: and safe weekend everyone.
Speaker 2: This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify,
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