WEBVTT - Markets, Melvin Capital, And Satellites (Podcast)

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<v Speaker 1>Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney. Alongside

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<v Speaker 1>my co host Matt Miller. Every business day we bring

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<v Speaker 1>you interviews from CEOs, market pros, and Bloomberg experts, along

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<v Speaker 1>with essential market moving news. Find the Bloomberg Markets Podcast

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<v Speaker 1>on Apple Podcasts or wherever you listen to podcasts, and

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<v Speaker 1>at Bloomberg dot com slash podcast. Well, the earnings we've

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<v Speaker 1>gotten so far this week from the big retailers have

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<v Speaker 1>really put pressure on the broader equity markets, really bringing

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<v Speaker 1>to the four inflation and what it means for consumers

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<v Speaker 1>and consumers spending. Um, It's raising questions about stagflation, about recession,

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<v Speaker 1>and then question for a lot of folks is how

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<v Speaker 1>do equities perform in that type of environment. Let's bring

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<v Speaker 1>in our favorite strategist, Gina Martin Adams, chief equity strategists

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<v Speaker 1>for Bloomberg Intelligence. Gina, would you take away from the

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<v Speaker 1>earnings this week we saw from the retailers, more importantly,

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<v Speaker 1>the markets response to those earnings. Yeah, first of all,

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<v Speaker 1>thanks for calling me your favorite strategist. All that absolutely

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<v Speaker 1>through today. Nonetheless, you know what have we learned as

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<v Speaker 1>a lot of more of the same, except for the

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<v Speaker 1>market is finally paying attention, and I think the market

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<v Speaker 1>is finally paying attention because the companies have gotten to

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<v Speaker 1>the point where the margin pressures are so severe they

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<v Speaker 1>have a really hard time forecasting where things are headed

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<v Speaker 1>into the second quarter, and they took down expectations materially.

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<v Speaker 1>So more of the same was really We know that

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<v Speaker 1>this group has been contending with increasing amounts of margin pressure,

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<v Speaker 1>but it's just been broadening and deepening over the course

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<v Speaker 1>of the last several quarters. It just got a lot

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<v Speaker 1>worse in the first quarter and is now anticipated to

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<v Speaker 1>continue to get worse in the second quarter every other season.

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<v Speaker 1>And you know, they may have missed expectations that generally

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<v Speaker 1>guided us to anticipate things to get maybe slightly better,

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<v Speaker 1>and that's the big difference this time around. So we

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<v Speaker 1>did see a massive capitulation moment on the retail trade

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<v Speaker 1>over the course of just twenty four maybe closer to

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<v Speaker 1>eight hours, considering it kind of started with Walmart two

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<v Speaker 1>days ago. You know, I think the other thing that

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<v Speaker 1>you take away from this is um the market clearly

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<v Speaker 1>had of been and anticipating that there were areas to

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<v Speaker 1>hide yesterday, and some of those areas to hide were

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<v Speaker 1>in the more defensive quote unquote defensive sectors like consumer staples,

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<v Speaker 1>and then finally realized as of yesterday, that's not necessarily

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<v Speaker 1>a great place to hide when really, uh, when inflation

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<v Speaker 1>and inventory cycle or your predominant drivers of weakness in

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<v Speaker 1>the earning stream. Gina, you've done so much smart work

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<v Speaker 1>on margins, and they always like to ask you about

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<v Speaker 1>margins every time you come on. UM, so you're probably

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<v Speaker 1>getting tired of this, but so we are no creed.

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<v Speaker 1>I never get tired of talking about markins. This is

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<v Speaker 1>my personal obsession and has been for more than a

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<v Speaker 1>year or so. I'm so glad you did. Because Andrea

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<v Speaker 1>Felst dead one of our Bloomberg opinion writers. She covers

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<v Speaker 1>consumer goods. Um. She wrote this really interesting column last

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<v Speaker 1>night about Target and Walmart being victims of their own

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<v Speaker 1>success and that they've essentially secured their supply chain so

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<v Speaker 1>well and they were able to pass on the cost

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<v Speaker 1>of the consumers. But just any sign of weakness, the

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<v Speaker 1>stocks really got punished, but essentially it made them victims

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<v Speaker 1>of their own success. So I have to ask you here,

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<v Speaker 1>where does the margin conversation even fall? Because a drop

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<v Speaker 1>and Target just seems extreme. Yeah, it does, except I

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<v Speaker 1>think investors have been hanging onto this, right, so I

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<v Speaker 1>would agree it does seem extreme relative to the size

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<v Speaker 1>of the revision. Um. That said, remember how much these

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<v Speaker 1>stocks were areas of strength for much of the last

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<v Speaker 1>two years, right, And I think that that perspective is

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<v Speaker 1>really important to just consider. Is these were pandemic place.

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<v Speaker 1>We knew that consumers weren't going to go out to restaurants,

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<v Speaker 1>maybe weren't going to fly as much, weren't going to

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<v Speaker 1>travel and you know, uh, stay at hotels. But but

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<v Speaker 1>we also knew that they would still buy their everyday

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<v Speaker 1>items at Target and Walmart, probably even start to buy

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<v Speaker 1>more durable goods items because they could have those items

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<v Speaker 1>delivered to their homes as they were staying home. And

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<v Speaker 1>the result is that this group developed quite a bit

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<v Speaker 1>of premium and concentration and holdings, and that's been unwind

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<v Speaker 1>largely over the course of the last um couple of days.

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<v Speaker 1>It had started to unwind over the last year or so,

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<v Speaker 1>but we really saw that unwind over the last couple

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<v Speaker 1>of days. We're close now to seeing these stocks trade

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<v Speaker 1>in line with the overall index. When you go about

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<v Speaker 1>all the way back to the beginning of the pandemic

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<v Speaker 1>to date, so hopefully we've seen a lot of the

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<v Speaker 1>unwind occur. Now the question going forward is, Okay, how

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<v Speaker 1>do they perform relative to the rest of the market. Well,

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<v Speaker 1>the reality is these are goods oriented companies. Goods oriented

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<v Speaker 1>companies at this stage in the cycle are most likely

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<v Speaker 1>going to underperform because they're more sensitive to interest rates.

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<v Speaker 1>They had their time to shine, and now we probably

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<v Speaker 1>need to move on to more services. Are into companies

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<v Speaker 1>in the consumer space to lead, and that certainly is

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<v Speaker 1>reflected in a lot of our work. Margins are one

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<v Speaker 1>of the triggers that we follow really closely to watch

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<v Speaker 1>that rotation interest rate through the other trigger typically, Gina,

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<v Speaker 1>just quickly, here, um valuation, where is this market? I

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<v Speaker 1>know you're in your team do a lot of work

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<v Speaker 1>on valuation for those that are looking to say, at

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<v Speaker 1>least I've got an attractive valuation for this market. Are

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<v Speaker 1>we there yet? We're getting really close, and I think

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<v Speaker 1>for the majority of stocks in the market are now

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<v Speaker 1>trading it relatively attractive valuations. We still are deflating. Uh.

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<v Speaker 1>You know, a couple of pandemic related bubbles in tech

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<v Speaker 1>and some of the consumer names certainly, which is going

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<v Speaker 1>to in our view way on the market. But if

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<v Speaker 1>you look at an equalated S and P five and

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<v Speaker 1>you kind of, you know, get rid of a lot

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<v Speaker 1>of that market cap, uh, concentrated risk. You're looking at

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<v Speaker 1>a market that's trading under fifteen times forward earnings, and

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<v Speaker 1>we think the market to accurately price where the bond

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<v Speaker 1>market is right now should be trading somewhere between fourteen

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<v Speaker 1>and fourteen and a half times. So you're getting really close, um,

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<v Speaker 1>you know, within certainly within a stone's thrill of what

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<v Speaker 1>we would say are are pretty fair value valuations. All right, Gina,

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<v Speaker 1>thank you so much for taking a time, really appreciate

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<v Speaker 1>getting your thoughts, particularly as we, you know, continue to

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<v Speaker 1>deal with this selloff in this market so far in

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<v Speaker 1>two looking for perspective. Gina Martin Adam's chief equity strategist

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<v Speaker 1>for Bloomberg Intelligence. She's been doing us a long time.

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<v Speaker 1>She was a chief strategist there at Wells farg A

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<v Speaker 1>for a while before we lured her over to Bloomberg

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<v Speaker 1>Intelligence some number of years ago. Right now, let's go

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<v Speaker 1>to Schnali Basset. She covers all things Wall Street for

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<v Speaker 1>Bloomberg News. She joins us here in on our Bloomberg

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<v Speaker 1>Interactive Brokers Studio and SI big story out today. I

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<v Speaker 1>think you know one of the big stories on global

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<v Speaker 1>Wall Street is it's tough in the hedge fund business.

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<v Speaker 1>They have not escaped the carners that we've seen in

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<v Speaker 1>the credit markets, in the equity markets, and big name

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<v Speaker 1>is closing stores. Tell us the story. Yeah, so this

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<v Speaker 1>is really a holdover from the game stop era. If

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<v Speaker 1>you all remember the short squeeze that we saw early

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<v Speaker 1>last year that really hurt Gabe Plotkins Melvin Capital, remember

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<v Speaker 1>that fifty decline. He recovered from a little bit last year,

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<v Speaker 1>still ending the year lower, but not as low as

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<v Speaker 1>it could have been, and there were a lot of

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<v Speaker 1>big names that came to his rescue, think Ken Griffin,

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<v Speaker 1>Steve Cullen and others we have heard as well. But

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<v Speaker 1>this year the sell off really accelerated and in the

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<v Speaker 1>first four months of the year, his hedge fund lost

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<v Speaker 1>twenty three percent. Bloomberg's ham A Palmer broke last night

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<v Speaker 1>that he wrote a letter to investors saying that he

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<v Speaker 1>would be returning money to investors they would soon be

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<v Speaker 1>stopping management fees and you are seeing an unwind of

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<v Speaker 1>his positions. So what happens next? Does he does he

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<v Speaker 1>have further ambitions? What do you do when your hedge

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<v Speaker 1>fund closes? That's been a big question lately. You know,

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<v Speaker 1>he wrote the letter last night, so it's too soon

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<v Speaker 1>to say what he's gonna do next. But a lot

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<v Speaker 1>of hedgeman managers see a second act, you know, one

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<v Speaker 1>very prominent one that we talked about a lot given

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<v Speaker 1>the crypto excitement. I guess as Mike novograts, everyone remembers

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<v Speaker 1>he had to shut his macro fund. Uh. Steve Cohen

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<v Speaker 1>saw second act himself. A lot of people do see

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<v Speaker 1>second acts in the money management industries. Some people go

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<v Speaker 1>around family offices, some people just decided to do something

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<v Speaker 1>else at large. But remember, he did have a great

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<v Speaker 1>track record before the last two years. He had a

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<v Speaker 1>very good track record actually, and so his investors who

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<v Speaker 1>have stuck with him despite you know, some concerns about

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<v Speaker 1>his restructuring plans, do believe that he has done a

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<v Speaker 1>great job prior to this route. Is it should we

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<v Speaker 1>be expecting other situations like this where some hedge funds

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<v Speaker 1>shut down, because boy, it was just been a brutal,

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<v Speaker 1>brutal start to the year, and maybe they don't see

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<v Speaker 1>any opportunity to get above that high watermark and start

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<v Speaker 1>generating those performance returns. I think that's such an important

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<v Speaker 1>question because it's not just the carnage or see in

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<v Speaker 1>the public stock market. You're also seeing a few other headwinds.

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<v Speaker 1>Private market valuations are starting to get hurt as well.

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<v Speaker 1>Tiger Global is a ten pound gorilla in that room.

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<v Speaker 1>Remember they were really a force in Silicon Valley. They

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<v Speaker 1>put the biggest venture capital firms on notice. They have

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<v Speaker 1>really had a lot of pain in their public market

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<v Speaker 1>portfolio this year, and they you know, do they see

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<v Speaker 1>more pain in that private market portfolio as well? Um

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<v Speaker 1>do other people close their doors? Big question the cost

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<v Speaker 1>of leverages going up. You can't just easily borrow money

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<v Speaker 1>to to put on easy trades. And honestly, hedge fund

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<v Speaker 1>leverage has been at record levels as well as retail leverage,

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<v Speaker 1>and that unwind is going to be showing in the

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<v Speaker 1>stock market more so, really a gain here to mitigate

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<v Speaker 1>losses this year, to keep your doors open longer. I'm

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<v Speaker 1>a loudly you mentioned Tiger Capital for audience for our

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<v Speaker 1>worldwide audience, I should say this is a hedge fund

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<v Speaker 1>and the Tiger Cubs, of course, that are known for

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<v Speaker 1>their tech investments, and that's why you've seen extra extra

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<v Speaker 1>pain in some of those companies. Very quickly, Shannali, I

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<v Speaker 1>have to ask about the retail story. We talked. That's

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<v Speaker 1>how we started this conversation. Does the retail bid come

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<v Speaker 1>back very quickly? It's so interesting because you see f

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<v Speaker 1>t X getting into stock trading and there's still excitement

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<v Speaker 1>around it, and you know, influencers are talking about it.

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<v Speaker 1>But the question is can they get in as much

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<v Speaker 1>as they were before. It's not creating that additional bit

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<v Speaker 1>in the market, and you're seeing that very plainly. All right,

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<v Speaker 1>we appreciate it. Shannale Bassett covers All Things Wall Street,

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<v Speaker 1>got the Wall Street beat down for Bloomberg News talking

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<v Speaker 1>about Melvin Capital shutting down, winding down, and you know

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<v Speaker 1>it's a big, big fund. It was it about eight

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<v Speaker 1>billion dollars um and so a big issue. Mr Plotkin

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<v Speaker 1>a former player at Stevie Cohen's firm as well. So

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<v Speaker 1>interesting the note there. I'm gonna get right to our

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<v Speaker 1>next guest, David Coudla. No stranger here, he's a founder,

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<v Speaker 1>CEO and c i O of Main State Capital Management. David,

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<v Speaker 1>thanks for taking a few minutes here. You know, we've

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<v Speaker 1>been kind of frame mean, the investment environment is kind

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<v Speaker 1>of no place to hide unless you happen to be

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<v Speaker 1>in commodities, I mean fixed and come down double digits

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<v Speaker 1>total return SMP near bear market levels. How are you

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<v Speaker 1>as you step away and maybe you know, communicate with

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<v Speaker 1>your clients? What's your message these days? Good morning, Paul. Yeah,

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<v Speaker 1>we uh, we just did a webinar for our clients

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<v Speaker 1>this week and talked exactly about that. And we're at

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<v Speaker 1>Mainstake Capital Management. We're taxo asset allocators. So uh, an

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<v Speaker 1>environment like this is where we can um actually allocate

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<v Speaker 1>among alternative strategies, allocate among commodities, actually short bonds versus

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<v Speaker 1>being long bonds. If we look at a typical portfolio

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<v Speaker 1>this year, uh, if that's in or the plastic classic portfolio,

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<v Speaker 1>if that's in the SMP five, in the NASDAC composite,

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<v Speaker 1>in the US Aggregate Bond Index, that portfolio is down.

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<v Speaker 1>Through active management. Going to these other areas, you can

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<v Speaker 1>be down a lot less this year, a lot less

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<v Speaker 1>this year. We're looking at SMP fire down well now

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<v Speaker 1>only two tents of one percent. It was done as

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<v Speaker 1>much as one and a half percent earlier. What do

0:12:33.360 --> 0:12:39.560
<v Speaker 1>you make of this kind of volatility, Well, there's so

0:12:39.640 --> 0:12:43.600
<v Speaker 1>much fear of where inflation goes from here in the

0:12:43.679 --> 0:12:47.800
<v Speaker 1>coming months and how the Fed responds to that. The

0:12:48.720 --> 0:12:52.920
<v Speaker 1>you know, we we have you know, we've seen the

0:12:53.000 --> 0:12:55.600
<v Speaker 1>year of year inflation come down a bit in the

0:12:55.679 --> 0:12:58.920
<v Speaker 1>last read, but we don't know if peak inflation is

0:12:58.960 --> 0:13:03.679
<v Speaker 1>behind us. Uh, there's other external factors. But it's just

0:13:03.800 --> 0:13:08.600
<v Speaker 1>a concern that the Fed will continue and and jpal

0:13:08.720 --> 0:13:11.920
<v Speaker 1>said that right, he said that, Uh, they will do

0:13:12.000 --> 0:13:16.520
<v Speaker 1>what it takes. Uh, the inverse of what Mario Drow

0:13:16.760 --> 0:13:19.640
<v Speaker 1>said back in two thousand and twelve in terms of

0:13:19.679 --> 0:13:23.600
<v Speaker 1>moving the other way and easy monetary policy. Ja Pale

0:13:23.640 --> 0:13:25.960
<v Speaker 1>said he's going to tighten as far as he needs

0:13:26.000 --> 0:13:29.160
<v Speaker 1>to to bring inflation down. And that's just put a

0:13:29.200 --> 0:13:33.360
<v Speaker 1>lot of fear, anxiety, indigestion into the markets. And so

0:13:33.440 --> 0:13:36.480
<v Speaker 1>we're seeing this extreme volatility day to day on the

0:13:36.559 --> 0:13:39.319
<v Speaker 1>upside and the downside. What we saw on what we

0:13:39.360 --> 0:13:42.280
<v Speaker 1>saw yesterday, what we saw in May five on the downside,

0:13:43.160 --> 0:13:48.720
<v Speaker 1>extreme days. So David give us a sense of valuation. Here,

0:13:48.760 --> 0:13:50.960
<v Speaker 1>a lot of folks as they try to and I

0:13:50.960 --> 0:13:53.280
<v Speaker 1>think foolishly, try to catch the you know, call the

0:13:53.280 --> 0:13:55.760
<v Speaker 1>bottom of the market. They might look at maybe evaluation

0:13:55.960 --> 0:14:01.880
<v Speaker 1>as a metric here is this market get attractive from

0:14:01.880 --> 0:14:05.320
<v Speaker 1>evaluation perspective? Or historically does your data show there's more

0:14:05.360 --> 0:14:11.080
<v Speaker 1>to go? Um. Evaluation has never been a good measure,

0:14:11.240 --> 0:14:14.280
<v Speaker 1>either on the upside of the downside. Uh. You know,

0:14:14.360 --> 0:14:17.480
<v Speaker 1>typically what happens, and I like to say it is

0:14:17.520 --> 0:14:21.520
<v Speaker 1>there's some maybe an external effect at an external event

0:14:21.840 --> 0:14:25.080
<v Speaker 1>or something that starts to selling or something that starts

0:14:25.120 --> 0:14:27.840
<v Speaker 1>to buying, and people look around and say, boy, look

0:14:27.840 --> 0:14:31.960
<v Speaker 1>at valuation. Stocks are very attractive, and the buying begets

0:14:32.040 --> 0:14:36.000
<v Speaker 1>more buying. Or when valuations are high, investors look around

0:14:36.040 --> 0:14:39.080
<v Speaker 1>and say, well, look how high valuations are, and the

0:14:39.160 --> 0:14:42.920
<v Speaker 1>selling begets selling. But you know, one thing we know

0:14:43.000 --> 0:14:47.840
<v Speaker 1>for sure is is when rates are very low, as

0:14:47.920 --> 0:14:51.720
<v Speaker 1>they have been for the past decade, we can support

0:14:51.840 --> 0:14:55.640
<v Speaker 1>a higher valuation. Now rates are going higher and it's

0:14:55.640 --> 0:14:59.560
<v Speaker 1>going to be harder to support those valuations. Uh, we've had, Tina,

0:14:59.680 --> 0:15:03.360
<v Speaker 1>there is no alternative. Bond yields are up now and

0:15:03.440 --> 0:15:07.440
<v Speaker 1>actually getting more attractive um. So so you know, we'll

0:15:07.480 --> 0:15:10.720
<v Speaker 1>have an environment where we won't be able to or

0:15:10.840 --> 0:15:14.240
<v Speaker 1>we probably won't be able to support the valuations that

0:15:14.240 --> 0:15:18.800
<v Speaker 1>that we've had over these past years. So evaluations aren't

0:15:18.840 --> 0:15:22.400
<v Speaker 1>the roadmap that perhaps other investors think it is. What

0:15:22.560 --> 0:15:29.080
<v Speaker 1>do you look at margins. It's right now, right now, Critty,

0:15:29.160 --> 0:15:33.840
<v Speaker 1>It's all about inflation. Right now. It is all about inflation.

0:15:33.880 --> 0:15:35.720
<v Speaker 1>That was a message to our clients in our webinars

0:15:35.760 --> 0:15:39.960
<v Speaker 1>this week. It's all about inflation. Uh. We you know,

0:15:40.000 --> 0:15:42.720
<v Speaker 1>we saw what the retailers did to the markets, and

0:15:42.760 --> 0:15:47.320
<v Speaker 1>that's a function of how inflation is impacting their bottom line.

0:15:47.840 --> 0:15:52.080
<v Speaker 1>But as far as the macro impact on the markets,

0:15:52.080 --> 0:15:56.600
<v Speaker 1>it's it's about, um does inflation come to? How much

0:15:56.640 --> 0:15:59.280
<v Speaker 1>does inflation come down on zone? The thought was durable

0:15:59.280 --> 0:16:02.960
<v Speaker 1>goods inflation would would be coming down already as the

0:16:03.080 --> 0:16:06.880
<v Speaker 1>labor force and the supply chains. Heell, we're yet to

0:16:06.920 --> 0:16:09.120
<v Speaker 1>see a lot of that. We're seeing a little bit

0:16:09.160 --> 0:16:10.520
<v Speaker 1>of it. You know, if you look at some of

0:16:10.520 --> 0:16:13.800
<v Speaker 1>the data, um, you know, if this continues, we saw

0:16:13.840 --> 0:16:18.760
<v Speaker 1>housing starts uh lower than expected. Existing home sales are

0:16:18.800 --> 0:16:22.880
<v Speaker 1>off um. In fact, existing home sales the lowest level

0:16:22.920 --> 0:16:26.600
<v Speaker 1>in two years because mortgage rates have climbed so high.

0:16:26.640 --> 0:16:28.960
<v Speaker 1>We're off a little bit this week, but still up

0:16:29.040 --> 0:16:32.760
<v Speaker 1>around five and a half percent. Jobless claims higher than expected,

0:16:32.760 --> 0:16:35.040
<v Speaker 1>so we're seeing a little bit of this come through,

0:16:35.560 --> 0:16:39.000
<v Speaker 1>but it's it's really about where we go with inflation

0:16:39.040 --> 0:16:44.080
<v Speaker 1>and can the FED back off on this aggressive monetary

0:16:44.160 --> 0:16:47.840
<v Speaker 1>tightening schedule that they've they've has been suggested ahead of us.

0:16:48.080 --> 0:16:50.960
<v Speaker 1>All right, David, good stuff. We always appreciate getting your perspective.

0:16:51.000 --> 0:16:54.920
<v Speaker 1>David could founder CEO and CEO of Mainstay Capital Management

0:16:55.000 --> 0:16:57.880
<v Speaker 1>and also notably he's a founder and sponsor of Engage,

0:16:57.920 --> 0:17:01.600
<v Speaker 1>world's largest student stock pitch competition end conference that's hosted

0:17:01.640 --> 0:17:03.920
<v Speaker 1>at the University of Michigan. So that's really a good

0:17:03.920 --> 0:17:06.239
<v Speaker 1>opportunity for students to get a sense of what it's

0:17:06.280 --> 0:17:09.639
<v Speaker 1>like to invest in these markets. And UH, David's a

0:17:09.680 --> 0:17:17.359
<v Speaker 1>big supporter that appreciate that. I want to switch gears here,

0:17:17.400 --> 0:17:19.080
<v Speaker 1>but it's kind of in line with what we just

0:17:19.119 --> 0:17:22.760
<v Speaker 1>heard from President Biden welcoming the leaders of Finland and

0:17:22.760 --> 0:17:26.080
<v Speaker 1>Sweden as they UH. Europe continues to deal with the

0:17:26.119 --> 0:17:29.520
<v Speaker 1>war in Ukraine. Peter Plats or Sea of Spire spires

0:17:29.560 --> 0:17:32.440
<v Speaker 1>a space the cloud analytics company that owns and operates

0:17:32.480 --> 0:17:36.840
<v Speaker 1>the largest multipurpose constellation of satellite Peter, thanks so much

0:17:36.880 --> 0:17:38.720
<v Speaker 1>for joining us here. I wonder if you could give

0:17:38.760 --> 0:17:41.040
<v Speaker 1>us a sense of your company, what it does and

0:17:40.880 --> 0:17:44.400
<v Speaker 1>and kind of how perhaps your customers are using satellites

0:17:44.480 --> 0:17:47.959
<v Speaker 1>as they think about navigating around the ground war in

0:17:48.040 --> 0:17:52.879
<v Speaker 1>the Ukraine. Absolutely, there are two elements respired data and

0:17:52.880 --> 0:17:56.119
<v Speaker 1>analytics is helping customers. You know. One element is understanding

0:17:56.119 --> 0:18:00.000
<v Speaker 1>the global supply chain, you know, where are products going? Uh,

0:18:00.119 --> 0:18:02.440
<v Speaker 1>looking at how that has changed. You know, we've seen

0:18:03.000 --> 0:18:05.359
<v Speaker 1>quite a bit of change in the in the Russian

0:18:05.359 --> 0:18:09.679
<v Speaker 1>oil has been going, especially as as pipelines, consumption you know,

0:18:09.760 --> 0:18:12.320
<v Speaker 1>might be decreased. You know, we see tankers going, you know,

0:18:12.359 --> 0:18:14.680
<v Speaker 1>more to with Asia than to us in the traditional

0:18:14.760 --> 0:18:17.399
<v Speaker 1>country that it has been going. We also have a

0:18:17.400 --> 0:18:20.000
<v Speaker 1>good insight for our customers that are concerned with food

0:18:20.040 --> 0:18:23.119
<v Speaker 1>supplies and countries. You know, Ukraine has been has been

0:18:23.160 --> 0:18:25.840
<v Speaker 1>a bretty big supplier off of grains and other food

0:18:26.600 --> 0:18:30.560
<v Speaker 1>elements and we've seen that decreased dramatically. And the second

0:18:30.560 --> 0:18:33.919
<v Speaker 1>element where our data is relevant is an understanding you know,

0:18:34.400 --> 0:18:38.040
<v Speaker 1>radio frequency emissions like GPS jamming on the ground and

0:18:38.160 --> 0:18:44.600
<v Speaker 1>helping national and international security efforts. International security efforts Russia

0:18:44.680 --> 0:18:48.000
<v Speaker 1>and Ukraine aren't the only tensions. Russia and China also

0:18:48.280 --> 0:18:51.480
<v Speaker 1>uh and evolving relationship I think is the best way

0:18:51.560 --> 0:18:54.960
<v Speaker 1>to put it. Is Spires Intelligence able to offer any

0:18:54.960 --> 0:18:59.080
<v Speaker 1>insights there to the extent that I can talk about it. Yes,

0:18:59.160 --> 0:19:02.720
<v Speaker 1>you know, the power off of satellite constellation is that

0:19:02.800 --> 0:19:07.720
<v Speaker 1>it provides an objective, neutral and correct few from the

0:19:07.840 --> 0:19:12.120
<v Speaker 1>ultimate highest vantage points space. Uh SPIRE owns and operates

0:19:12.119 --> 0:19:15.159
<v Speaker 1>one of the largest constellations, the fourth largest on the planet.

0:19:15.240 --> 0:19:18.560
<v Speaker 1>We on and operate the largest commercial r f G

0:19:18.680 --> 0:19:22.280
<v Speaker 1>A location constellation with forty satellites UM and as such

0:19:22.320 --> 0:19:25.040
<v Speaker 1>we do cover all of the regions you mentioned and

0:19:25.119 --> 0:19:27.719
<v Speaker 1>indeed the rest of the globe about a hundred times

0:19:27.760 --> 0:19:31.440
<v Speaker 1>a day, and that gives us a very objective few

0:19:32.040 --> 0:19:35.240
<v Speaker 1>with data and analytics that can help support activities and

0:19:35.320 --> 0:19:39.960
<v Speaker 1>understanding of what is happening, including access denied areas. Is

0:19:40.000 --> 0:19:42.640
<v Speaker 1>there any evidence that you're seeing from your satellite imagery

0:19:42.680 --> 0:19:46.520
<v Speaker 1>that Western ships are are maybe not visiting Russian ports

0:19:46.560 --> 0:19:50.200
<v Speaker 1>that you know some of these uh I guess sanctions

0:19:50.240 --> 0:19:55.320
<v Speaker 1>are in fact happening on the ground on the high seas. Absolutely, Um,

0:19:55.359 --> 0:19:57.800
<v Speaker 1>there is absolutely you know, recently we looked at the data.

0:19:57.840 --> 0:20:00.560
<v Speaker 1>There are no U. S flag ship so in any

0:20:00.560 --> 0:20:02.919
<v Speaker 1>of the Russian ports for example. So yes, we do

0:20:03.040 --> 0:20:05.959
<v Speaker 1>exactly see the impact of that, and even more so,

0:20:06.080 --> 0:20:11.439
<v Speaker 1>we can detect and identify and alert where certain ships

0:20:11.480 --> 0:20:16.320
<v Speaker 1>or certain flag carriers might be trying to circumvent certain sanctions,

0:20:16.320 --> 0:20:19.800
<v Speaker 1>circumvent certain sanctions. I mean, this is probably we were

0:20:19.800 --> 0:20:21.680
<v Speaker 1>talking about how the schemes are like Cold War esque

0:20:21.680 --> 0:20:25.399
<v Speaker 1>almost it definitely feels feels cold War asked, So I

0:20:25.440 --> 0:20:28.320
<v Speaker 1>have to ask is salite technology actually effective in the

0:20:28.359 --> 0:20:32.000
<v Speaker 1>fog of war? That is the power of the type

0:20:32.000 --> 0:20:35.480
<v Speaker 1>of technology that we are using, which is radio frequency based,

0:20:35.800 --> 0:20:38.520
<v Speaker 1>because radio frequencies to the sorry to play the pun,

0:20:38.600 --> 0:20:41.560
<v Speaker 1>you know, goes right through fog. Um. It is independent

0:20:41.640 --> 0:20:44.920
<v Speaker 1>of sunlight, it is independent of the weather, and it

0:20:45.040 --> 0:20:48.200
<v Speaker 1>listens to what is happening. Um. I come from Vienna.

0:20:48.280 --> 0:20:50.080
<v Speaker 1>So just as in the Cold War you had to

0:20:50.160 --> 0:20:52.840
<v Speaker 1>listen for footsteps around the corners of the of the

0:20:52.880 --> 0:20:56.959
<v Speaker 1>hot streets of Vienna, um our satellites are capable of

0:20:57.000 --> 0:21:00.520
<v Speaker 1>picking up information even when there is no sunlight and

0:21:00.600 --> 0:21:06.760
<v Speaker 1>bad weather stuff, really fascinating stuff. Peter, really appreciate you

0:21:06.800 --> 0:21:09.480
<v Speaker 1>taking the time. Peter Platzer, CEO of Spire. It's a

0:21:09.480 --> 0:21:12.480
<v Speaker 1>publicly traded company on the New York Stock Exchange sp

0:21:12.840 --> 0:21:17.600
<v Speaker 1>i R. Thanks for listening to the Bloomberg Markets podcast.

0:21:18.000 --> 0:21:21.200
<v Speaker 1>You can subscribe and listen to interviews with Apple Podcasts

0:21:21.320 --> 0:21:25.240
<v Speaker 1>or whatever podcast platform you prefer. I'm Matt Miller. I'm

0:21:25.240 --> 0:21:29.280
<v Speaker 1>on Twitter at Matt Miller three. Put on fall Sweeney

0:21:29.320 --> 0:21:31.960
<v Speaker 1>I'm on Twitter at pt Sweeney before the podcast. You

0:21:31.960 --> 0:21:34.359
<v Speaker 1>can always catch us worldwide at Bloomberg Radio