WEBVTT - Bloomberg Businessweek Weekend - November 10th, 2023 0:00:01.360 --> 0:00:05.720 This is Bloomberg Business Week Inside, from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.680 global business, finance and tech news. The Bloomberg Business Week 0:00:13.720 --> 0:00:19.000 Podcast with Carol Messer and Tim Stenebek from Bloomberg Radio. 0:00:20.040 --> 0:00:23.040 Hi, everyone, Welcome to the weekend edition of Bloomberg Business 0:00:23.079 --> 0:00:25.800 Week Ahead. On the program, we'll take you inside the 0:00:25.880 --> 0:00:29.960 human brain as Elon Musk's Neuralink gets FDA clearance to 0:00:30.000 --> 0:00:33.839 start implanting computer chips in people's skulls. All the company 0:00:33.840 --> 0:00:35.760 needs now is some volunteers. 0:00:36.200 --> 0:00:36.920 What could go wrong? 0:00:37.479 --> 0:00:40.920 We'll also discuss another long term muskole, human life on Mars. 0:00:41.280 --> 0:00:44.199 A new book lays out the potential pros and cons 0:00:44.240 --> 0:00:48.000 there are quite a few of them of colonizing space. Plus, 0:00:48.040 --> 0:00:50.440 we're going to get a pulse check on geopolitics with 0:00:50.600 --> 0:00:54.560 Brookings Institution senior fellow Angela Stent, as Russia and Ukraine 0:00:54.560 --> 0:00:57.240 approach a grim milestone with much of the world now 0:00:57.240 --> 0:01:00.680 focused on Israel's war against Tomas. Of that to come, 0:01:00.720 --> 0:01:04.240 we begin with one of the US economy's most important components. We're, 0:01:04.240 --> 0:01:07.520 of course talking about the housing market. This week we 0:01:07.560 --> 0:01:10.039 saw the average thirty year mortgage rate fall by the 0:01:10.080 --> 0:01:11.840 most in more than a year, at a seven point 0:01:12.000 --> 0:01:15.040 six one percent. That helped spark the biggest advance in 0:01:15.080 --> 0:01:19.520 home purchase applications since early June. Still, affordable housing is 0:01:19.600 --> 0:01:21.400 hard to come by, and that's largely due to a 0:01:21.400 --> 0:01:24.840 phenomenon called the lock in effect. It's the subject of 0:01:24.880 --> 0:01:28.039 a recent Bloomberg BusinessWeek cover story, and for more we 0:01:28.120 --> 0:01:30.200 go to the Bloomberg News real estate reporting team of 0:01:30.200 --> 0:01:33.039 Pashant Gopol and Patrick Clark, along with the editor of 0:01:33.040 --> 0:01:34.360 the magazine, Joel Weber. 0:01:34.520 --> 0:01:37.840 Look, Ultimately, if you want to feel like there's an 0:01:37.880 --> 0:01:41.440 existential crisis in the US, I think the housing industry, 0:01:41.640 --> 0:01:44.560 housing market is maybe a pretty good one good place 0:01:44.600 --> 0:01:47.559 to look right now. If you have one of those 0:01:47.960 --> 0:01:50.280 low rate mortgages. 0:01:49.800 --> 0:01:50.880 And a lot of people do that. 0:01:50.960 --> 0:01:53.600 A lot of people got fortunate enough to get in 0:01:53.760 --> 0:01:56.440 when the market allowed that. You don't want to give 0:01:56.440 --> 0:01:59.880 it up, so there's very little incentive to sell an 0:02:00.080 --> 0:02:04.200 then have to take out a high mortgage. Now, that 0:02:04.360 --> 0:02:07.600 also means that for those people who never had a 0:02:07.720 --> 0:02:10.880 chance to get in, you're not able to get in 0:02:10.919 --> 0:02:15.680 because nobody's selling. There's very low inventory and if you 0:02:16.200 --> 0:02:17.960 could get in, you have to pay that eight percent 0:02:18.040 --> 0:02:22.519 mortgage that is potentially, you know, dramatically higher than what 0:02:22.800 --> 0:02:26.040 the housing market even looked like two years ago. And boy, 0:02:26.160 --> 0:02:28.200 that is just a rotten. 0:02:27.880 --> 0:02:28.960 Place to be. 0:02:29.520 --> 0:02:34.840 And especially for people who are starting out, it really 0:02:34.880 --> 0:02:38.000 feels like you're just iced out. And that has I 0:02:38.000 --> 0:02:42.120 think some long term economic implications for the US. And 0:02:42.160 --> 0:02:44.440 there I think we're done talking about the story because 0:02:44.480 --> 0:02:46.360 that's basically how rotten this is. 0:02:46.400 --> 0:02:47.839 But there's a whole lot more there. 0:02:48.600 --> 0:02:51.760 And Prashant and Pat Clark did a great job of 0:02:52.160 --> 0:02:56.280 not only setting that table and and this is to 0:02:56.400 --> 0:02:59.000 me one of these stories that when I first started 0:02:59.000 --> 0:03:01.679 engaging with them about it, it feels like one of 0:03:01.760 --> 0:03:04.600 the most important stories of the year. We've talked about 0:03:04.639 --> 0:03:09.119 what's happened in the commercial real estate world. This is 0:03:09.240 --> 0:03:14.560 equally scary because it affects people so directly. I think, So, Prishan, 0:03:14.680 --> 0:03:16.840 you've got to speak to some people, tell us about 0:03:17.000 --> 0:03:18.399 what you and Pat learned along the way. 0:03:19.240 --> 0:03:22.320 Well, really, this is like two different worlds, right, So 0:03:22.400 --> 0:03:27.880 people who own houses are really the haves here, and 0:03:27.919 --> 0:03:31.200 in some ways they're sitting pretty because they locked in 0:03:31.240 --> 0:03:35.200 some of the lowest rates in history, and they're unaffected 0:03:35.320 --> 0:03:40.480 for the most part by the rising mortgage rates because 0:03:40.600 --> 0:03:43.360 you know, most people have fixed rate mortgages for you know, 0:03:43.400 --> 0:03:46.920 thirty years, so they might be in those homes for 0:03:46.960 --> 0:03:50.360 a long time because they have very little incentives to 0:03:50.400 --> 0:03:54.160 sell and take on sort of a much higher rate. 0:03:54.400 --> 0:03:58.200 On the other hand, people who haven't gotten a chance 0:03:58.240 --> 0:04:01.280 to buy yet, maybe they were, you know, they couldn't 0:04:01.280 --> 0:04:06.040 buy during the peak of the COVID buying frenzy because 0:04:06.080 --> 0:04:09.160 they lost out in bidding wars. But now they can't 0:04:09.160 --> 0:04:12.960 buy because they can't afford to. You combine these very 0:04:13.000 --> 0:04:18.000 high prices and these extraordinarily high rates, and you know, 0:04:18.040 --> 0:04:19.279 they're just locked out. 0:04:20.279 --> 0:04:23.960 You remind us of an economist back in the nineteen 0:04:24.120 --> 0:04:27.880 eighties who actually identified this so called lock in effect. 0:04:28.120 --> 0:04:30.200 Take us back there, because we've kind of been in 0:04:30.240 --> 0:04:31.719 these this position before. 0:04:31.800 --> 0:04:34.200 It was very much like what we're seeing now, which 0:04:34.240 --> 0:04:39.080 is that interest rates shot up quickly, and people who 0:04:39.279 --> 0:04:43.200 you know, I think between nineteen seventy eight nineteen eighty one, 0:04:43.240 --> 0:04:45.720 interest rates doubled. They were much higher in those days. 0:04:45.760 --> 0:04:48.320 I think they shut up all the way. I think 0:04:48.360 --> 0:04:52.080 to eighteen percent or so. But interest rates went up 0:04:52.240 --> 0:04:56.839 very quickly, and it became clear that the old mortgage 0:04:57.520 --> 0:05:00.880 had a value attached to it. Right, It wasn't just 0:05:00.920 --> 0:05:02.640 the bill you I had to pay every month, but it 0:05:02.720 --> 0:05:06.440 was worth you know, thousands of dollars and because if 0:05:06.440 --> 0:05:08.520 you were to trade it into a new mortgage, that's 0:05:08.520 --> 0:05:10.920 how much more you would pay over the life of alone. 0:05:11.360 --> 0:05:14.719 And you know, at the time, there was a an 0:05:14.800 --> 0:05:17.800 economist at the University of California who who you know, 0:05:17.800 --> 0:05:20.320 who sort of showed that this was correlated or or 0:05:20.480 --> 0:05:26.800 he associated this with a strong disincentive to move, which 0:05:27.000 --> 0:05:31.640 is logical. You know. You fast forward now to today 0:05:31.720 --> 0:05:36.040 and there there are two researchers, one at University of 0:05:36.040 --> 0:05:39.279 Illinois and one at the University of Pennsylvania. Actually, you know, 0:05:39.440 --> 0:05:42.160 have a you know, a way to do a sort 0:05:42.200 --> 0:05:46.159 of back of the envelope calculation to show that there's 0:05:46.160 --> 0:05:49.479 a real causal effect between this, you know, luck and 0:05:49.520 --> 0:05:54.479 effect and reduced residential mobility. People are going to move less, 0:05:54.680 --> 0:05:56.640 and in fact, people have been moving less in America. 0:05:56.800 --> 0:05:59.040 You know for a part while moving. 0:05:59.000 --> 0:06:01.880 We were finally moving again right with the pandemic, because 0:06:01.880 --> 0:06:04.800 you could work Jil anywhere, like finally people were starting 0:06:04.839 --> 0:06:06.840 to move around again a little bit. 0:06:06.960 --> 0:06:10.039 And boy did that end with the pandemic, right and 0:06:10.040 --> 0:06:12.960 and now suddenly maybe you did move somewhere, and now, 0:06:13.080 --> 0:06:15.919 you know, even being able to offload that thing that 0:06:15.960 --> 0:06:20.719 you got yourself into, maybe you won't be so lucky now. Now, 0:06:21.080 --> 0:06:24.320 most important question amount I asked today Pat Pashant, which 0:06:24.400 --> 0:06:33.640 have you got to speak to Eugene Quackenbush? I always okay, 0:06:33.720 --> 0:06:36.320 So tell us about also can we say the name 0:06:36.360 --> 0:06:41.000 of Eugene Quackenbush. Quackenbush, get gets your exactly what he's doing? 0:06:41.080 --> 0:06:42.520 Phoenix broke like. 0:06:44.040 --> 0:06:46.960 Than I know Pat has a deep understanding of Phoenix. 0:06:47.000 --> 0:06:50.520 But tell us about what what mister Quackenbush really his name? 0:06:52.560 --> 0:06:54.640 Okay, but but but he's a you know, he's a 0:06:54.640 --> 0:06:58.640 pretty savvy real estate guy in uh in Phoenix who 0:06:58.640 --> 0:07:01.760 has a real estate company called Get Your Nest That 0:07:01.839 --> 0:07:04.279 will that that that that acts as a brokerage and 0:07:04.680 --> 0:07:07.680 the types of you know, effectively, he has to get 0:07:07.680 --> 0:07:10.960 creative for his clients. And the simplest thing is you 0:07:11.000 --> 0:07:13.000 go and look for a new home, right because the 0:07:13.680 --> 0:07:17.560 homebuilders are often buying down interest rates and we can 0:07:17.600 --> 0:07:19.240 tell you more about that. I can tell you more 0:07:19.280 --> 0:07:22.360 about that. But he's doing things as well, like, well, 0:07:22.640 --> 0:07:27.120 can we go out and find people who have assumable mortgages, 0:07:27.200 --> 0:07:30.600 which is usually an f h A or a VA 0:07:30.680 --> 0:07:33.680 loan that someone else can take on. So you know, 0:07:33.760 --> 0:07:36.080 it was a there's a three percent mortgage, and you 0:07:36.120 --> 0:07:39.680 sell the mortgage along with the house package today, right there, 0:07:40.120 --> 0:07:41.880 package deal not just it's. 0:07:41.760 --> 0:07:47.160 Not just not the garden, you know, mortgage. 0:07:47.160 --> 0:07:49.200 I mean it sounds like a great deal, you. 0:07:49.160 --> 0:07:51.200 Know, and it's probably better than the alternatives, because the 0:07:51.240 --> 0:07:54.600 alternatives are you either look for something smaller or what 0:07:54.680 --> 0:07:57.239 you find is a house that's not in great condition 0:07:57.400 --> 0:07:59.360 and so not only is it expensive, it's going to 0:07:59.400 --> 0:08:01.760 need more work. Or another thing that Eugene told me 0:08:01.760 --> 0:08:04.440 he was doing with clients or you know, clients were considering, 0:08:04.600 --> 0:08:07.720 is you know, you just drive farther. It's no longer 0:08:08.200 --> 0:08:11.720 you know, the close in suburb that you pictured yourself 0:08:11.720 --> 0:08:14.720 in in twenty twenty one when all your friends were 0:08:15.680 --> 0:08:18.400 rushing to buy homes. You are now you know, you're 0:08:18.440 --> 0:08:23.240 now in the next or the one after, and you're 0:08:23.280 --> 0:08:24.560 having to drive farther every day. 0:08:24.840 --> 0:08:27.760 So Pershan, let's talk about the home builder dynamic, because 0:08:28.040 --> 0:08:30.000 the other thing here is that there just hasn't been 0:08:30.000 --> 0:08:32.079 that much inventory, right. But like, so we're the home 0:08:32.120 --> 0:08:33.120 builders in all of this. 0:08:33.640 --> 0:08:36.160 Right, So the home builders in some ways are in 0:08:36.280 --> 0:08:41.400 much better shape because they produce inventory. So you've had 0:08:41.440 --> 0:08:46.720 the existing market just completely lock up, and that's left 0:08:46.800 --> 0:08:49.080 a little bit of an opening, especially for the larger 0:08:49.120 --> 0:08:51.880 builders that have their own mortgage arms, so they're able 0:08:51.880 --> 0:08:58.360 to kind of offer subsidized mortgage rates, which are really 0:08:58.520 --> 0:09:03.240 enticing buyers to buy new so they there can more 0:09:03.240 --> 0:09:07.360 aggressively cut prices and you know, offer you know, a 0:09:07.440 --> 0:09:10.440 five percent mortgage or something like that, at least first 0:09:10.760 --> 0:09:13.480 a period of time. It can you know, it might 0:09:13.480 --> 0:09:15.800 increase later, but for the first few years five percent, 0:09:17.320 --> 0:09:20.160 and that's that's actually working for them, so they're able 0:09:20.160 --> 0:09:23.959 to sort of increase production and get more buyers in. 0:09:24.640 --> 0:09:25.240 Okay, so. 0:09:26.640 --> 0:09:30.000 Young people can't get in, people with low rate mortgages 0:09:30.040 --> 0:09:33.719 don't want to sell. What's the way out of this impossible? 0:09:33.800 --> 0:09:37.640 Miss, Well, we had we had like we spoke with uh, 0:09:38.200 --> 0:09:41.960 you know, Ralph McLaughlin. He's a he's an economist. So 0:09:42.000 --> 0:09:45.400 there's been some efforts to sort of attack. This from 0:09:45.720 --> 0:09:49.280 UH from the perspective of demand, trying to get make 0:09:49.320 --> 0:09:52.120 it easier for people to purchase, right, so lowering fees 0:09:52.720 --> 0:09:55.599 for mortgage it is things like that down payment assistance. 0:09:56.000 --> 0:09:59.000 But all that does is sort of adds to the competition, right, 0:09:59.040 --> 0:10:01.880 which is the problem. We So his idea is, let's 0:10:01.920 --> 0:10:06.120 try to get convinced sellers to sell. So he's suggesting 0:10:06.200 --> 0:10:09.600 that you could do things like a window of time 0:10:09.720 --> 0:10:13.040 where you know, capital gains where maybe investors wouldn't have 0:10:13.040 --> 0:10:20.640 to pay that, or you increase taxes on rental landlords. 0:10:21.040 --> 0:10:23.560 Either way, the idea would be to get some of 0:10:23.600 --> 0:10:27.920 these airbnb landlords and other landlords to sell to first 0:10:27.960 --> 0:10:28.600 time buyers. 0:10:28.720 --> 0:10:31.800 Our thanks to Preshan Gopaul and Patrick Clark with Bloomberg News. 0:10:32.080 --> 0:10:34.320 That full interview is available on our podcast feed, and 0:10:34.320 --> 0:10:36.720 their story is of course available online at Bloomberg dot 0:10:36.760 --> 0:10:39.400 com as well as on the Bloomberg terminal. Jill Weber 0:10:39.480 --> 0:10:41.800 is going to be back with us next hour coming up. 0:10:41.840 --> 0:10:45.199 As the Israel Hamas war intensifies, another violent conflict is 0:10:45.280 --> 0:10:46.600 dragging on in Europe. 0:10:46.720 --> 0:10:49.000 The war seems to be at this moment in a 0:10:49.160 --> 0:10:50.400 dynamic stalemate. 0:10:50.640 --> 0:10:53.520 How Vladimir Putin could use the world's focus on Gaza 0:10:53.600 --> 0:10:57.880 to his advantage against Ukraine. You're listening to Bloomberg BusinessWeek. 0:10:58.120 --> 0:10:59.880 This is Bloomberg. 0:11:00.040 --> 0:11:03.600 Listening to the Bloomberg Business Week podcast. Catch us live 0:11:03.679 --> 0:11:06.800 weekday afternoons from three to six Eastern Listen. 0:11:06.600 --> 0:11:10.079 On Bloomberg dot Com, the iHeartRadio app, and the Bloomberg 0:11:10.120 --> 0:11:14.319 Business App, or watch us live on YouTube. 0:11:15.280 --> 0:11:17.680 From Wall Street to the World Bank. One risk towers 0:11:17.679 --> 0:11:21.520 above all, and that is geopolitical. We know Israel has 0:11:21.559 --> 0:11:24.040 talked about its troops entering the middle of Gaza's main 0:11:24.120 --> 0:11:28.040 city as they continue they're offensive against Tomas. EU commissioned 0:11:28.040 --> 0:11:31.360 President Ursula Vanderlin weighing in saying Israel will have to 0:11:31.440 --> 0:11:34.480 leave Gaza eventually. And then, of course, Tim, there's the 0:11:34.520 --> 0:11:35.959 war between Russia and Ukraine. 0:11:36.080 --> 0:11:38.400 Yeah, well into its second year, almost its third year. 0:11:38.480 --> 0:11:41.640 Ukraine President Zelenski welcoming and decision by the European Unions 0:11:41.720 --> 0:11:45.080 executive arm Tobacco start to membership talks with Kiev, pledging 0:11:45.160 --> 0:11:48.720 to continue work to develop state institutions. A lot for 0:11:48.760 --> 0:11:50.640 the world to manage. And we've got a great. 0:11:50.440 --> 0:11:52.720 Guest, Carol Angela Stemp back with US, senior fellow at 0:11:52.720 --> 0:11:57.040 Brookings Institution, author of Putin's World, former National intelligence officer 0:11:57.080 --> 0:11:59.720 for Russia and Eurasia. She worked at the US State Department. 0:12:00.080 --> 0:12:03.200 Back with Us on Zoom from Washington, ANGELA, thank you, 0:12:03.240 --> 0:12:06.640 thank you, thank you. Is the world making what feels 0:12:06.640 --> 0:12:09.440 like a mistake, and to some extent it feels like 0:12:09.440 --> 0:12:12.320 they're forgetting about the Russian war in Ukraine. 0:12:13.440 --> 0:12:16.080 Well, certainly the conflict in the Middle East has diverted 0:12:16.120 --> 0:12:19.320 attention from the war in Ukraine, but that war goes on. 0:12:19.840 --> 0:12:24.640 Russia destroyed a I guess it was a Liberian flagged 0:12:24.640 --> 0:12:27.640 ship in the port of an Odessa, killing the pilot. 0:12:28.320 --> 0:12:32.920 It's been attacking the Ukrainian infrastructure. The Ukrainians are fighting 0:12:33.080 --> 0:12:36.160 valiantly back. But the war seems to be at this 0:12:36.320 --> 0:12:41.240 moment in a dynamic stalemate. And the Ukrainians, you know, 0:12:41.360 --> 0:12:45.240 continue to need assistance from the West, particularly from the 0:12:45.360 --> 0:12:48.160 United States, And of course that's up for question at 0:12:48.200 --> 0:12:48.600 the moment. 0:12:48.840 --> 0:12:51.280 It is up for question, But so far the United 0:12:51.320 --> 0:12:54.360 States has pledged and given quite a bit of aid 0:12:54.400 --> 0:12:57.600 to the Ukrainians. Are you concerned? I mean, I guess 0:12:57.640 --> 0:13:00.480 if you were a decision maker in Washington, would you 0:13:00.600 --> 0:13:02.440 how much would you like? What would you need to 0:13:02.480 --> 0:13:04.880 see in order for you to say, Okay, that's enough 0:13:04.920 --> 0:13:05.800 aid for Ukraine? 0:13:07.320 --> 0:13:10.760 Well, I think we have to continue supporting them. If 0:13:10.800 --> 0:13:13.800 we don't send them more assistance and more weapons, it's 0:13:13.840 --> 0:13:16.040 going to be much harder for them to push back 0:13:16.080 --> 0:13:19.679 against the Russians. I think they'll be probably somewhat of 0:13:19.720 --> 0:13:22.120 a lot in the fighting in the winter, even though 0:13:22.200 --> 0:13:24.360 some of these attacks will go on, But we know 0:13:24.440 --> 0:13:27.560 that in the spring the fighting will start up again, 0:13:27.600 --> 0:13:30.199 and we need to equip the Ukrainians so that they 0:13:30.240 --> 0:13:33.200 can continue to try and push back the reference. 0:13:33.320 --> 0:13:37.160 But if it's a stalemate, then what's the motivation for 0:13:37.960 --> 0:13:39.800 And forgive me, because we're talking about you know, we 0:13:39.840 --> 0:13:43.160 have to remember this is people, this is people. Yeah, yeah, 0:13:43.240 --> 0:13:45.320 But a lot of that gets lost. I think in 0:13:45.360 --> 0:13:49.640 the conversation when members of Congress are talking about budgets 0:13:49.640 --> 0:13:52.680 and there there's a lot of tension with providing aid 0:13:52.720 --> 0:13:54.760 to Ukraine, and there has been for more than two 0:13:54.840 --> 0:13:58.440 years at this point, How do lawmakers justify continuing to 0:13:58.480 --> 0:14:00.400 send aid if it's just a continued domate. 0:14:01.480 --> 0:14:04.520 Well, first of all, it's in our national interest not 0:14:04.640 --> 0:14:07.920 to have Russia win this war. If Russia succeeds in 0:14:08.160 --> 0:14:11.600 subduing Ukraine, that's not where Russia is going to stop. 0:14:11.640 --> 0:14:16.280 It'll probably set its sites for the West, including possibly 0:14:16.360 --> 0:14:18.680 if you read some of the things that were published 0:14:18.679 --> 0:14:23.080 today written by the former president Medveative, it sites on Poland, 0:14:23.720 --> 0:14:25.760 and the US doesn't want. You know, we don't have 0:14:25.840 --> 0:14:29.160 any boots on the ground there. Our men and women 0:14:29.200 --> 0:14:31.560 aren't dying for this, but it's in our interest to 0:14:31.600 --> 0:14:34.480 make sure that we don't get sucked into another even 0:14:34.520 --> 0:14:39.000 bigger war in Europe if we don't support Ukraine, you know, 0:14:39.040 --> 0:14:40.040 as it fights back. 0:14:40.280 --> 0:14:42.320 Well, this is where you know, we so wanted to 0:14:42.320 --> 0:14:45.720 have you back because it was understandably you understand why 0:14:45.760 --> 0:14:49.000 in the past month we have shifted our focus. It 0:14:49.040 --> 0:14:51.240 feels like as a world, you know, how much stress 0:14:51.240 --> 0:14:55.760 can we geopolitically focus on. Both situations are dire and important, 0:14:56.240 --> 0:14:58.720 but we have shifted to what's going on between Israel 0:14:58.760 --> 0:15:00.880 and Hamas at this point. But I wanted you to 0:15:00.920 --> 0:15:06.480 come back on for us to understand Vladimir Putin and 0:15:06.520 --> 0:15:10.440 what his goals are here with what he is trying 0:15:10.480 --> 0:15:12.920 to do. It doesn't necessarily stop with Ukraine. 0:15:12.960 --> 0:15:17.480 Correct, that's correct. I mean he's first of all, believes 0:15:17.520 --> 0:15:21.040 that he can wait this out. The war will go 0:15:21.120 --> 0:15:24.280 on in twenty twenty four. Russia has more men that 0:15:24.400 --> 0:15:29.000 it can send as cannon fodder than Ukraine does. It 0:15:29.040 --> 0:15:32.320 has a three times of population, and they're getting you know, 0:15:32.600 --> 0:15:35.320 ammunition now from North Korea. We know that they're getting 0:15:35.400 --> 0:15:37.920 drones from Iran. So he wants to wait this out 0:15:38.160 --> 0:15:41.080 and hope that someone enters the White House in twenty 0:15:41.160 --> 0:15:43.560 twenty five who will say enough, we don't want to 0:15:43.600 --> 0:15:47.440 support Ukraine anymore, or that there'll be Ukraine fatigue maybe 0:15:47.440 --> 0:15:50.840 in some European countries. So he's waiting for Western resolve 0:15:51.160 --> 0:15:55.640 to collapse, which it remarkably hasn't yet. But his again, 0:15:55.760 --> 0:15:59.880 his goals don't stop at Ukraine. There might be a pause, 0:16:00.680 --> 0:16:04.360 he wouldn't, you know, Russia wouldn't immediately then turn its 0:16:04.360 --> 0:16:06.840 sights on another country. But in the longer run, as 0:16:06.880 --> 0:16:09.640 long as he's in power, and he's running for reelection 0:16:10.680 --> 0:16:13.520 next year, and he will surely get reelected. As long 0:16:13.560 --> 0:16:16.320 as he's in power, those aims I think aren't going 0:16:16.400 --> 0:16:16.840 to change. 0:16:16.840 --> 0:16:19.240 So he has enough man, does he have enough money? 0:16:19.440 --> 0:16:22.880 I mean, can he break his country, Vladimir Putin in 0:16:22.920 --> 0:16:25.160 his fight his conquest of Ukraine. 0:16:25.880 --> 0:16:28.400 He has enough money. I mean, the Russians are still 0:16:28.400 --> 0:16:31.760 making money on selling oil and gas. You know, despite 0:16:31.800 --> 0:16:35.400 all of the sanctions and everything, they are making money 0:16:35.440 --> 0:16:40.400 from the hydrocarbon sales. Their economy is set to grow, 0:16:40.520 --> 0:16:44.280 predicted to grow in fact, I think by about two 0:16:44.280 --> 0:16:49.160 percent next year. They've recovered a bit and the economy 0:16:49.200 --> 0:16:51.240 is doing better than it was before, so they can 0:16:51.280 --> 0:16:52.200 continue this fight. 0:16:53.520 --> 0:16:56.440 That's that's what's so surprising to me. I mean, we 0:16:56.520 --> 0:16:59.360 spoke to you Angela early on in the and we've 0:16:59.360 --> 0:17:01.840 been speak to you three out the conflict, but the 0:17:01.960 --> 0:17:04.679 general consensus was this was going to be quick, and 0:17:04.760 --> 0:17:07.879 it's been anything but quick. How do you think this 0:17:07.960 --> 0:17:10.120 war ends as we approach the third year? 0:17:11.080 --> 0:17:11.280 Right? 0:17:11.359 --> 0:17:14.679 Well, it's you know, this is the sixty four thousand 0:17:14.720 --> 0:17:18.000 dollars question that everyone is asking. I mean, at some 0:17:18.200 --> 0:17:24.119 point it might be that both sides recognize that neither 0:17:24.200 --> 0:17:27.280 of them are going to achieve their full aims, and 0:17:27.359 --> 0:17:32.240 that they do sit down and negotiate. That's still what 0:17:32.280 --> 0:17:35.520 we want to avoid is another frozen conflict, which is 0:17:35.560 --> 0:17:38.800 to have some kind of agreement, but which is really 0:17:38.840 --> 0:17:42.679 only temporary, and an agreement that would involve Ukraine unless 0:17:42.680 --> 0:17:46.800 it makes more progress territorial it would territorially, it would 0:17:46.840 --> 0:17:51.080 lose some more territory. That might end the fighting. You 0:17:51.160 --> 0:17:54.040 could have a ceasefire, you could end the fighting, but 0:17:54.080 --> 0:17:58.639 that's not a longer term solution to this, you know, 0:17:58.760 --> 0:18:03.720 the you know, the desired solution would be obviously for 0:18:03.840 --> 0:18:08.720 Russia to withdraw its troops and to renounce the you know, 0:18:08.880 --> 0:18:11.879 territorial claims on these areas that it claims to have 0:18:11.920 --> 0:18:15.800 annexed but which it doesn't fully control. But that may 0:18:15.840 --> 0:18:19.359 take much longer. So it probably would be you know, 0:18:19.560 --> 0:18:21.960 in the short run at least some kind of a 0:18:22.000 --> 0:18:25.800 ceasefire and a temporary solution to this. A longer term 0:18:25.880 --> 0:18:28.120 solution is much harder to envisage. 0:18:28.200 --> 0:18:31.800 Yeah, you do wonder if even in some kind of resolution, ceasefire, 0:18:31.880 --> 0:18:35.640 any territory win on the behalf of Russian President Vladimir 0:18:35.680 --> 0:18:40.199 Putin is just going to incite him to continue. 0:18:39.680 --> 0:18:40.399 On his quest. 0:18:40.560 --> 0:18:43.320 That was Angelas stant senior fellow at the Brookings Institution. 0:18:43.760 --> 0:18:46.280 Still ahead on Bloomberg Business Week, Carol and I head 0:18:46.280 --> 0:18:49.119 to New Orleans for the inaugural Wells Fargo Black Business 0:18:49.200 --> 0:18:51.960 Leader Summit, where the lender is looking to make good 0:18:51.960 --> 0:18:55.639 on its promise to underserved Americans after striking a partnership 0:18:55.680 --> 0:18:57.520 with an influential black community leader. 0:18:57.640 --> 0:19:00.560 So we can't take it all on right but peace 0:19:00.600 --> 0:19:03.800 about peace. We can't begin to make the kind of 0:19:05.119 --> 0:19:11.280 statistical differences, measurable metrics on differences with KPIs that we 0:19:11.440 --> 0:19:14.840 both agree on as to how we can further move. 0:19:15.960 --> 0:19:20.639 Close the digital divide, close the divide with housing and 0:19:20.840 --> 0:19:24.560 home ownership, close the divide with economic literacy. 0:19:24.760 --> 0:19:28.560 Bishop Tdjakes, chairman of the Tdjkes Group, on his organization's 0:19:28.600 --> 0:19:31.040 packed with Wells Fargo and how it could help drive 0:19:31.080 --> 0:19:35.560 economic vitality and inclusivity in communities across the country. This 0:19:35.800 --> 0:19:36.440 is Bloomberg. 0:19:37.200 --> 0:19:40.760 You're listening to the Bloomberg Business Week Podcast. Catch us 0:19:40.800 --> 0:19:44.840 live weekday afternoons from three to six Eastern on Bloomberg Radio, 0:19:45.000 --> 0:19:48.280 the Bloomberg Business App, and YouTube. You can also listen 0:19:48.400 --> 0:19:51.520 live on Amazon Alexa from our flagship New York station, 0:19:51.960 --> 0:20:22.120 just Say Alexa playing Bloomberg eleven thirty. 0:20:10.400 --> 0:20:14.000 Has announced a ten year strategic partnership to build inclusive 0:20:14.080 --> 0:20:17.920 communities This follows reporting and analysis by Bloomberg and others, 0:20:18.000 --> 0:20:20.679 and we're just laying out the landscape on Wells Fargo 0:20:20.800 --> 0:20:24.320 having a really bad record when it comes among major 0:20:24.400 --> 0:20:26.960 lenders when it comes to refinancing by black homeowners, which 0:20:27.000 --> 0:20:29.400 is why we are very interested in how these two 0:20:29.520 --> 0:20:32.120 got together and what their goals are all about. Here 0:20:32.160 --> 0:20:34.840 with more is Christy Fercho. She's head of Diverse Segments, 0:20:34.920 --> 0:20:38.119 Representation and Inclusion at Wells Fargo and TD Jakes. He's 0:20:38.200 --> 0:20:41.480 chairman of the TD Jakes Group here in New Orleans. 0:20:41.560 --> 0:20:45.040 And welcome, Welcome, so good to have the two of 0:20:45.040 --> 0:20:48.840 you here with us. Tell us, first of all, Christy, 0:20:48.960 --> 0:20:51.439 about this summit, and I'm curious I want to get 0:20:51.480 --> 0:20:53.680 from both of you. I always feel like when something 0:20:53.760 --> 0:20:56.800 like this is created, there were some really meaningful conversations 0:20:57.280 --> 0:21:00.280 ahead of it, So tell us from your perspective about 0:21:00.280 --> 0:21:02.280 some of the tough conversations that had to be had. 0:21:02.480 --> 0:21:04.520 It's over a year in the making. We have been 0:21:04.560 --> 0:21:09.240 having conversations about getting black leaders together to really continue 0:21:09.320 --> 0:21:13.240 to focus on what needs to happen in these black communities, 0:21:13.680 --> 0:21:17.360 in black and brown communities, to really advance what we're 0:21:17.400 --> 0:21:22.639 doing around racial equity and really advancing home ownership, small 0:21:22.720 --> 0:21:28.200 business entrepreneurship. And so this summit really represents the possibility 0:21:28.240 --> 0:21:30.560 of what we can do together when you put collective 0:21:30.640 --> 0:21:34.439 minds in the space together and say what can we 0:21:34.520 --> 0:21:37.600 do together? How can we help advance what's important to 0:21:37.680 --> 0:21:38.560 these communities. 0:21:38.680 --> 0:21:41.080 Chairman Jakes, come on in on this conversation, because we 0:21:41.119 --> 0:21:44.520 certainly talked with you a lot throughout the pandemic after 0:21:44.720 --> 0:21:46.960 the murder of George Floyd, and we talked about just 0:21:47.080 --> 0:21:49.800 the injustices that were out there in society and how 0:21:50.160 --> 0:21:53.800 it was long overdue for initiatives to happen, and the 0:21:53.840 --> 0:21:57.080 conversations it couldn't be just talk anymore. What were some 0:21:57.119 --> 0:21:59.359 of the conversations that you guys had that you had 0:21:59.400 --> 0:22:01.239 with Wells far Go about all right, if we're going 0:22:01.280 --> 0:22:03.000 to do this partnership, this is what it's got to 0:22:03.040 --> 0:22:05.479 really be about, and the actions that needed to be taken. 0:22:05.600 --> 0:22:09.400 It's a real pleasure to have the opportunity to explore 0:22:09.560 --> 0:22:15.679 a multi pronged solution with companies like Wells Fargo that 0:22:15.800 --> 0:22:22.879 they would understand their fiduciary responsibility to extend themselves to 0:22:22.960 --> 0:22:25.800