Speaker 1: This is Bloomberg Business Week Inside from the reporters and
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Speaker 1: global business, finance and tech news. The Bloomberg Business Week
Speaker 1: Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Speaker 2: Hi, everyone, Welcome to the Bloomberg Business Wee Weekend Podcast.
Speaker 2: Well earning season, yeah, almost over in the United States,
Speaker 2: and yet one of the biggest of the reporting season
Speaker 2: reported this past week. We're talking about Nvidia, the artificial
Speaker 2: intelligence semiconductor darling with the third highest market cap waiting
Speaker 2: in the S and P five hundred.
Speaker 3: It's also the top gainer in the S and P
Speaker 3: five hundred this year, after taking the top spot in
Speaker 3: twenty twenty three, when it returned close to two hundred
Speaker 3: and forty percent, and Vidia a big reason behind the
Speaker 3: record run we've seen in the broader US equity market.
Speaker 3: So yes, we have more on Nvidia's eye popping sales
Speaker 3: forecast in just a moment.
Speaker 2: Also this past week, we got minutes from the fed's
Speaker 2: latest gathering in late January. What it showed that most
Speaker 2: FED officials remained more worried about the risk of cutting
Speaker 2: interest rates too soon, rather than keeping them higher for
Speaker 2: too long and damaging the US economy.
Speaker 3: Now, US economy is one that continues to surprise to
Speaker 3: the upside and prop up global growth. It's also an
Speaker 3: economy where Americans are moving around. We get into how
Speaker 3: those demographic shifts over the last four years could affect
Speaker 3: this year's US election, Plus Maryland Comptroller Brook Leerman on
Speaker 3: the good and the bad of her state's economy.
Speaker 2: All of that to come. We begin with Nvidia earnings
Speaker 2: out this past week, and Nvidia predicted another massive sales
Speaker 2: gain for the current quarter, adding fresh momentum to a
Speaker 2: stock rally that's already made at the world's most valuable
Speaker 2: chip maker.
Speaker 3: Investors continue to bet that the company will remain the
Speaker 3: prime beneficiary of an AI computing boom. We got more
Speaker 3: on the quarterly results and outlook with Bloomberg News US
Speaker 3: semiconductor and networking reporter Ian King and Bloomberg Intelligence senior
Speaker 3: tech industry analyst Kunjohn Sabani.
Speaker 4: I just spoke with a fund manager on this very topic,
Speaker 4: and what he said was or all of the stuff
Speaker 4: that Abigail has just beautifully told you about and explained,
Speaker 4: all of these multiples and numbers doesn't mean anything. What
Speaker 4: Nvidia did was firm up in everybody's mind this is
Speaker 4: real and this is going to continue. And as soon
Speaker 4: as that became clear, as soon as they started talking
Speaker 4: and Jensen Wang, the CEO, had answers for a number
Speaker 4: of the lingering concerns that were out there. We're after
Speaker 4: the races, and.
Speaker 5: The rally was back on.
Speaker 2: Yeah, it's kind of remarkable because we really did bounce around. Kunjohn,
Speaker 2: come on in. As you've gone through the release, had
Speaker 2: time to digest what we got from nvidio. What to
Speaker 2: you is so remarkable about the results of the outlook
Speaker 2: In your view, I.
Speaker 6: Think it's similar in what lines to what Ian said.
Speaker 6: It was not the magnitude of the beat that was
Speaker 6: sort of expected. It was the quality of the report,
Speaker 6: especially the sustainability of the demand. Look, demand didn't just
Speaker 6: increase from the large cloud players, which we expect. Demand
Speaker 6: is strong from enterprises. Demand is so strong from new
Speaker 6: avenues like new verticals, automotive healthcare, demand is strong from
Speaker 6: the hyper scalers, and now you have these so and
Speaker 6: entities coming in also buying. So the broad based demand
Speaker 6: and the health of it and the sustainability what was
Speaker 6: really drove the investor confidence.
Speaker 3: Hey, you know where I'm going with this because I
Speaker 3: ask you this every quarter every few months, and it's
Speaker 3: about the basic of basics of economics.
Speaker 5: Here.
Speaker 3: When there is something attractive in the business world, you
Speaker 3: have a lot of companies run after it. And I'm
Speaker 3: wondering about Nvidia's mote here. To what extent do they
Speaker 3: have a moat and is it established around what it
Speaker 3: does for AI in the AI world, And to what
Speaker 3: extent are competitors able to actually catch up here?
Speaker 4: Yeah, two things to answer that. I think overall growth
Speaker 4: is going to lift all boats for if the projections
Speaker 4: that we've seen from people like Jensen and people like
Speaker 4: Lisa suet MD a true. Everybody's going up in the
Speaker 4: short term on this. Don't need to worry about the
Speaker 4: competitive dynamics long term. There are clearly companies who are
Speaker 4: looking at in Video selling chips multiple tens of thousands
Speaker 4: of dollars in saying I want some of that action,
Speaker 4: and they're going after it. But this is something that
Speaker 4: in Video have been working on for several years. And
Speaker 4: guess what, They're going to have a new architecture, a
Speaker 4: new chip coming this year and guess what. The rate
Speaker 4: at which they're introducing new technology is increasing. So not
Speaker 4: only are they anticipating competition, but they're doing something about
Speaker 4: it already.
Speaker 2: Well, and I want to kind of get into that.
Speaker 2: First of all, I want to show a chart for
Speaker 2: those who are watching on TV and on YouTube and
Speaker 2: on our streaming service. But the Nvidia Data center revenue.
Speaker 2: I mean the chart, it's just astronomical in terms of
Speaker 2: how much it has taken.
Speaker 7: Off just from last year.
Speaker 2: It's like mind blowing, and I do wonder Ian, let
Speaker 2: me go this to you first. I mean, the question is,
Speaker 2: you know, how long can they continue at this pace
Speaker 2: in the face of growing competition.
Speaker 4: I mean, again, I can point you to the explanation
Speaker 4: that I got from somebody who's put the money to
Speaker 4: work in this stock, and they said, what's exciting them
Speaker 4: is the fact that so many sectors of the economy
Speaker 4: are now embracing it. Think of it as like an
Speaker 4: app store explosion of the Apple app store explosion of
Speaker 4: ten years ago. We've got the tools, we've got the platform.
Speaker 4: Now let's go out there and make use of it.
Speaker 4: And that is happening, and that if it is true,
Speaker 4: and it does manifest itself at the rate that we're
Speaker 4: seeing it happening right now, will sustain this demand for
Speaker 4: the infrastructure.
Speaker 2: Konjin, I heard you earlier on TV about how you
Speaker 2: believe Nvidia deserves the higher multiple that it trades at.
Speaker 2: Is that because of something like that data center revenue
Speaker 2: growth and how it's expected to continue.
Speaker 6: Absolutely, I mean, right now, the biggest opportunity in semiconductors AI.
Speaker 6: Right there's only one player having about ninety five percent
Speaker 6: or more share, So they have the best revenue growth.
Speaker 6: Second margins when you look at there right now, have
Speaker 6: software like gross margins, something we don't see often in semicaractors.
Speaker 6: I mean, if just to put in perspective, their next
Speaker 6: year's operating income is going to be larger than Intel's revenue.
Speaker 6: I mean, one of the largest semicinector companies that we know,
Speaker 6: right so that tells you they're not just growing, they're
Speaker 6: growing profitably. And the competitive landscape again said right now
Speaker 6: there is only one other player, so for the near term,
Speaker 6: they have the benefit of reaping all the AI spending,
Speaker 6: which again is going up across the board.
Speaker 3: Well, that's what I wanted to hit on. Kunjohn's total
Speaker 3: addressable market here. How do you think about that at
Speaker 3: Bloomberg Intelligence, Like, who's out there that still doesn't have
Speaker 3: these products? And to what extent are they going to
Speaker 3: be upgrading products as in Vidia comes out with new products.
Speaker 6: I mean, everyone has the product. But what we are
Speaker 6: seeing is the total IT capex right is rising twenty
Speaker 6: twenty four from what the cloud customers have announced. They're
Speaker 6: increasing their total spend by almost thirty percent at the midpoint. Now,
Speaker 6: within this spend, the portion of dollars going to AI
Speaker 6: is increating exponentially, So you don't have you have the
Speaker 6: pile growing, the portion of AI within the pile growing,
Speaker 6: and right now it's all the only one company monetizing
Speaker 6: hand over fist is Nvidia.
Speaker 2: Well, okay, so let's go a little bit deeper into competition,
Speaker 2: Y and I mean it's coming. You talk to us
Speaker 2: about this every time you come on with us, AMD
Speaker 2: coming out with a rival AI chip. Intel is working
Speaker 2: on it, and videos top customers who are so important
Speaker 2: in terms of their revenue growth, they're working on things too.
Speaker 2: I mean, you have a story to today about Intel
Speaker 2: and Microsoft linking up, and I feel like you know,
Speaker 2: frenemies within the tech industry, like people are trying to
Speaker 2: figure out their way forward. I guess my point bottom
Speaker 2: line is competition, though, is coming here for n video.
Speaker 2: But will the market be massive enough that it just
Speaker 2: doesn't matter.
Speaker 4: Ian That's absolutely a possibility. The other thing to think
Speaker 4: about as well is from a technical perspective. For twenty years,
Speaker 4: the whole of the data center industry had every incentive
Speaker 4: to replace Intel. Intel was charging you know, an armor
Speaker 4: a leg for its server chips. They had every incentive
Speaker 4: to go out there and replace it, and they couldn't
Speaker 4: because guess what, this is difficult. Intel fell away from
Speaker 4: that edge. Nvidia has replaced it in many respects with
Speaker 4: a newer technology. Everybody's got every incentive to try and
Speaker 4: knock them off the pitch, and they will absolutely try.
Speaker 4: But right now, the pace that this company is moving,
Speaker 4: at the resources it has, and importantly how widely it's
Speaker 4: been deployed already makes it very difficult for anybody to
Speaker 4: try and replace it with software, with chips, or with
Speaker 4: the other infrastructure that goes around it.
Speaker 3: Kun John help can textualize this moment in the history
Speaker 3: of technology right now, because I've heard some analysts compare
Speaker 3: this to okay, certain like unleashing of the Internet, the
Speaker 3: beginning of the dot com bubble back in the mid
Speaker 3: nineteen nineties here and comparing this to Americans did get
Speaker 3: widespread access to the Internet and what we saw built
Speaker 3: in Silicon Valley after that. How do you think about
Speaker 3: what's happening within video, what's happening with AI and the
Speaker 3: broader context.
Speaker 6: I think I would the analogy of sort of an
Speaker 6: iPhone moment would be appropriate. You know, when iPhones and
Speaker 6: smartphones came up. When you think of adoption and penetration, right,
Speaker 6: businesses earlier we're thinking, oh, we should have a mobile strategy, right,
Speaker 6: we should have a mobile vehicle to get to customers. Eventually,
Speaker 6: you if you were a business who did not have
Speaker 6: a mobile strategy, that would seem insane. So I think
Speaker 6: that's something what we are seeing here right now jen
Speaker 6: ai NA still is sort of a sexy thing. We
Speaker 6: would if this demand does have legs under it, we
Speaker 6: should see it go to a point where it just
Speaker 6: becomes the norm on how you do business.
Speaker 2: Yeah, I kind of was thinking about that this morning, right,
Speaker 2: I remember doing a primer I'm going to date myself
Speaker 2: on like what is the Internet but this whole idea
Speaker 2: right before everybody had a mobile site. We talked about
Speaker 2: how I everybody had to have their own online site.
Speaker 2: I mean, do you agree, Ian, that's kind of how
Speaker 2: we need to think about the ramp up in terms
Speaker 2: of this kind of next level generative machine learning, artificial intelligence,
Speaker 2: that everybody's going to have some sort of exposure.
Speaker 4: I think you have to think about it in a
Speaker 4: microway from your own personal life as a resident of
Speaker 4: a big city. Would you pay ten dollars twenty dollars
Speaker 4: a month to never drive your own car in the
Speaker 4: traffic and to have that taken care of you buy
Speaker 4: a machine? Probably yes, right, yeah, So then you multiply
Speaker 4: that by all of the megacities around the world of Tokyo,
Speaker 4: the Souls, the Shanghais, all of those people who live
Speaker 4: in that kind of city paying ten twenty to semic
Speaker 4: conductors needed to support those vehicles that are driving themselves.
Speaker 4: And you've got a big number already. And that's just
Speaker 4: one sector. And that is the kind of thinking I
Speaker 4: think that some investors are sort of putting to play
Speaker 4: when they look at what the potential for this kind
Speaker 4: of thing is. That's just one area of transport. There
Speaker 4: are many others obviously.
Speaker 2: All right, real quicklyise, My producers are going to kill me.
Speaker 2: But five seconds first, Kujohn to you. Are we being
Speaker 2: irrationally exuberant?
Speaker 8: Yes?
Speaker 6: Or no?
Speaker 7: When it comes to no, Ian.
Speaker 4: Being exuberant, whether it's irrational or not, who can say?
Speaker 7: All right, well done, well done.
Speaker 2: I'm not going to get in trouble. All right, guys,
Speaker 2: thank you so much. Always appreciate it. Ian King, US
Speaker 2: semiconductor and networking reporter at Bloomberg News out there in
Speaker 2: San Francisco. And of course cou John Sabani, He's senior
Speaker 2: semi conductor analyst at Bloomberg Intelligence. He's in our San
Speaker 2: Francisco bureau. Quick check on shares of Nvidia, folks that
Speaker 2: are up fifteen percent. Coming up the other side of
Speaker 2: the market, ev makers Rivin and Lusen both out with
Speaker 2: earnings last night, both disappointing and both tumbling.
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Speaker 2: YouTube with the South Carolina Republican primary and focus this weekend.
Speaker 2: The US is now bracing itself for a potential rematch
Speaker 2: of the twenty twenty presidential election. A lot has changed
Speaker 2: since now and four years ago. The pandemic's economic, lifestyle
Speaker 2: and work disruption set millions of middle class Americans on
Speaker 2: the move. A record setting sixteen point one million US
Speaker 2: residents moved to another state in twenty twenty one and
Speaker 2: twenty twenty two combined. That's according to Census Bureau estimates.
Speaker 3: And not just that Carol. By this November's presidential election,
Speaker 3: around thirty million Americans, the equivalent of the population of Texas,
Speaker 3: will have moved to a different state since twenty twenty.
Speaker 3: Even if migration recedes to a pre pandemic pace, that
Speaker 3: burst of migration, especially in key swing states, is set
Speaker 3: to be a powerful force in the electoral process.
Speaker 2: Thankfully, we have people here at Bloomberg who can crunch
Speaker 2: the numbers to tell us the story of how demographic
Speaker 2: shifts over the last four years could affect this year's
Speaker 2: presidential election outcome. Sean Donna is bloomberg new senior economics writer.
Speaker 2: He joined us from the Nation's Capital.
Speaker 5: We set out in this story to think about how
Speaker 5: that might affect the election. And when you do that,
Speaker 5: you really start very quickly zeroing in on six or
Speaker 5: seven states, the kind of battleground or swing states that
Speaker 5: we're thinking about this year. And when you start looking
Speaker 5: at the state level population changes there you see some
Speaker 5: really interesting things.
Speaker 3: Well, one of the states that you focused on was
Speaker 3: the state of Wisconsin. So tell us what you found
Speaker 3: while reporting on the state of Wisconsin. Who you spoke to,
Speaker 3: the companies that are employing people, in attracting people to
Speaker 3: the area, and then of course what that does to
Speaker 3: the demographics.
Speaker 5: Absolutely, look, as we were crunching these numbers, Wisconsin very
Speaker 5: quickly stood out as a place that we should be
Speaker 5: looking at more deeply, and one place in Wisconsin in particular,
Speaker 5: and that's Dane County, Wisconsin. That's the fastest growing county
Speaker 5: in Wisconsin. Already in the last three years, it has
Speaker 5: added twenty eight thousand to almost twenty nine thousand people.
Speaker 5: And that's significant because in twenty twenty Joe Biden won
Speaker 5: the state of Wisconsin but just over twenty thousand votes.
Speaker 5: The population change in Wisconsin in Wisconsin's Dane County alone
Speaker 5: is already potentially significant in terms of the twenty twenty
Speaker 5: four election. What we also signed Wisconsin more broadly is
Speaker 5: a story that you see in some other swing states,
Speaker 5: and that is blue counties growing more rapidly than red
Speaker 5: counties in the state. A lot of the red counties
Speaker 5: are rural counties, interest to have an older population and
Speaker 5: so on. But when you zero in on Dane County,
Speaker 5: what we found there on the ground was really fascinating.
Speaker 5: And then what was really driving this population change is
Speaker 5: kind of this economic transformation of a place. And when
Speaker 5: you zero in a little bit more, we found this
Speaker 5: one company, Epic Systems, which does healthcare records, which has
Speaker 5: been driving a lot of the population growth in Dane County.
Speaker 5: Every day on their campus in Verona, Wisconsin, just south
Speaker 5: of Madison, there's thirteen thousand people, almost teen thousand people
Speaker 5: who show up for work every day, and that was
Speaker 5: eight thousand people five years ago, and the median age
Speaker 5: of those people is twenty six. A lot of them
Speaker 5: have come from out of states, the recent college graduates,
Speaker 5: and if you look across the country, that's a demographic
Speaker 5: that has tended to vote for Democrats in recent elections,
Speaker 5: and that is interesting in the broader context of Wisconsin,
Speaker 5: because Dane County is a big pot of Democratic votes
Speaker 5: in Wisconsin. Seventy five percent of the county voted for
Speaker 5: Joe Biden in twenty twenty, and that's only going to grow,
Speaker 5: and that is good for Democrats.
Speaker 3: Okay, But the point that you make in the story too, though,
Speaker 3: is that this demographic shift is not exclusively good for Democrats. Sean,
Speaker 3: talk a little bit about the demographic shift in terms
Speaker 3: of what it could mean to be an advantage for
Speaker 3: Republicans coming into twenty twenty four.
Speaker 5: Sure, Look, let's let's back out first off. First off
Speaker 5: and say, just because you have a change in the
Speaker 5: populace doesn't mean everyone in that population is voting. Parties
Speaker 5: need to get their voters to turn out, go to
Speaker 5: the polls. People can change their minds. Some of these
Speaker 5: counties have had narrow margins over the years, and so
Speaker 5: a change in population. It's hard to know exactly what
Speaker 5: the impact there will be. But of the seven battleground
Speaker 5: states that we've been thinking about at Bloomberg, stix of
Speaker 5: them saw more increases in blue counties, that is, counties
Speaker 5: that voted for Joe Biden in twenty twenty than in
Speaker 5: red counties. Across these seven states, we saw one point
Speaker 5: nine million additional population, and one point two million of
Speaker 5: that additional population is in blue counties. So that should
Speaker 5: be an advantage for Joe Biden. And just so we're
Speaker 5: thinking about the kind of the real electoral impact of this,
Speaker 5: these are seven states that have ninety three electoral college votes.
Speaker 5: They are the places where the election is going to
Speaker 5: be one.
Speaker 2: No, it's fascinating, right if you think about it, because
Speaker 2: you know the way the voting maps have been, you know,
Speaker 2: kind of redrawn. I mean, it's gotten so political on
Speaker 2: both sides of the aisle of I think it's safe
Speaker 2: to say, and it's really kind of skewed in terms
Speaker 2: of the upcoming elections because we still have the electoral
Speaker 2: college because it all plays out. I mean, some would
Speaker 2: argue that we need to just go you vote and
Speaker 2: you just count up the numbers and that's a winner.
Speaker 3: But well, that's what's so funny about this is, like
Speaker 3: we're talking about this, every conversation about the election has
Speaker 3: to be you know, in the context of the electoral college,
Speaker 3: which there's no question that Democrats will likely win the
Speaker 3: popular vote once again, but that doesn't matter at all.
Speaker 3: It comes down to these seven states that Sean mentioned.
Speaker 2: Yeah, it's really fascinating. So I think about, like our audience,
Speaker 2: who's listening and watching at this point. We just had
Speaker 2: a great chart that we showed too in terms of
Speaker 2: the population growth that we're seeing in those swing states
Speaker 2: since twenty twenty. It's in your story, But how do
Speaker 2: you kind of think about our audience who's listening and
Speaker 2: here we are still many months away from the November election,
Speaker 2: but kind of the key takeaways that you guys you
Speaker 2: specifically too, that you took away as you did this process.
Speaker 5: Look, I think one of the key takeaways is a
Speaker 5: lot of the discussions that we're having about this election
Speaker 5: are based on the map in twenty twenty, and it's
Speaker 5: really hard to know how that map has changed in
Speaker 5: the last four years. And population is just one of
Speaker 5: those ways. And so I am thinking about I'm trying
Speaker 5: to think about, you know, what the map is going
Speaker 5: to look like this year and where the big population
Speaker 5: changes are going to have an impact. Georgia looks a
Speaker 5: lot bluer in terms of population that it did in
Speaker 5: twenty twenty. If you thinks atterressed, you know which is
Speaker 5: really interesting. Arizona, Maricopa County, Arizona. Two million people voted
Speaker 5: there in there are three hundred and forty thousand, almost
Speaker 5: three hundred and forty thousand more people in that county
Speaker 5: today than there were in twenty twenty. Just incredible growth
Speaker 5: in that county that was won by Joe Biden by
Speaker 5: an incredibly narrow margin. But it's we're just going to
Speaker 5: have many more people voting there this year. So I think,
Speaker 5: you know, Georgia and Arizona incredibly interesting. Wisconsin have already mentioned.
Speaker 5: Pennsylvania and Michigan get tougher for Joe Biden, narrower, the
Speaker 5: population changes there may not be as overwhelmingly favorable there.
Speaker 5: And then another state that people think about a lot
Speaker 5: as a new battleground state in North Carolina, and a
Speaker 5: lot of that is based on the idea that a
Speaker 5: lot of Blue voters have young college graduates have moved
Speaker 5: into the Raleigh Durham area and other places where we
Speaker 5: have the tech industry really growing rapidly. But what we
Speaker 5: found in terms of the actual data on the ground
Speaker 5: is that a lot of red counties in North Carolina
Speaker 5: have actually been growing as well, and that that growth
Speaker 5: may take may make North Carolina less of a battleground
Speaker 5: than we otherwise think.
Speaker 2: So some advantages for former President Donald Trump, some for
Speaker 2: current President Joe Biden.
Speaker 5: Well, if Trump is the nominee, right, if Trump is
Speaker 5: the nominee, Yeah, absolutely potentially, And then you know, again
Speaker 5: it gets into the question of turnout and uh and
Speaker 5: how you know, how you build up the margins in big,
Speaker 5: big blue areas and whether red counties can can do
Speaker 5: the same, you know. And that was one of the
Speaker 5: most interesting people I met in Wisconsin when I was
Speaker 5: there was a guy called Brandon Maley. He's twenty three
Speaker 5: years old. He's the guy who's in charge of the
Speaker 5: Republican operation on the ground in Dane County. And just
Speaker 5: a reminder, Dane County is an incredibly blue county, and
Speaker 5: he is in a pretty lonely place, but he is
Speaker 5: trying so hard to just try and narrow the gap.
Speaker 5: And he says, if you can just get the margin in,
Speaker 5: if you can get the number of people voting for
Speaker 5: Donald Trump or whoever the Republican nominee is there, from
Speaker 5: twenty three percent of the vote to maybe twenty five
Speaker 5: or twenty six percent of the vote in Dane County.
Speaker 5: He thinks he is really going to help the Republican
Speaker 5: cause across the state of Wisconsin. If you can get
Speaker 5: it up the thirty percent of that county voting for
Speaker 5: Republicans rather than Democrats, well then he thinks that Wisconsin
Speaker 5: becomes a pretty strong red state. So, you know, that
Speaker 5: is the other big takeaway from these things. These small
Speaker 5: margins in relatively small parts of the country could have
Speaker 5: an outsize impact on this year's election.
Speaker 3: Sean, is there a bigger story here that goes beyond
Speaker 3: the twenty twenty four election, a story about migration patterns
Speaker 3: and how easy it is for Americans post pandemic to
Speaker 3: pick up and move across the country because of remote
Speaker 3: work opportunities. Or is this demoker is looking at this
Speaker 3: as like, Okay, this is a one time thing post pandemic,
Speaker 3: you know, the first three years following twenty twenty.
Speaker 5: So I think what happened in the pandemic kind of
Speaker 5: accelerated an existing trend, and that is a real shift
Speaker 5: south in terms of the American economy, and that's a
Speaker 5: shift in population south. You know the fact that we
Speaker 5: have Georgia and Arizona and North Carolina is really rapidly
Speaker 5: growing states in the country, or Texas and Florida if
Speaker 5: we're not talking about swing states per se. You know,
Speaker 5: that is really a sign of how the American economy
Speaker 5: is kind of rebalancing south. We're seeing that in terms
Speaker 5: of manufacturing investment in other areas, and that's going to
Speaker 5: have an impact on not just this election, but future
Speaker 5: elections going forward. That electoral College map could end up
Speaker 5: shifting further south in terms of its center of gravity,
Speaker 5: and you know, that's something that's going to happen and
Speaker 5: in our lifetime, and that's going to have a big
Speaker 5: impact on future election.
Speaker 2: You didn't I don't know if you guys thought about this,
Speaker 2: but independence or moderate candidates? Was there any kind of
Speaker 2: takeaway on that? And just got about a minute left here, Sean.
Speaker 5: Look, I think, and you know, I write about economics.
Speaker 5: I'm not one of our political gurus, but I think
Speaker 5: one of the most fascinating things going on in the
Speaker 5: US electorate right now is a number of people who
Speaker 5: identify as independence of Americans, identify as independence rather than
Speaker 5: as Republicans or Democrats. Independence are really going to be
Speaker 5: a huge part of the story this year. And I
Speaker 5: don't know where they live right now, but they certainly
Speaker 5: are going to be the ones who decide who are
Speaker 5: next president.
Speaker 3: This is a great story that Sean and Christopher Cannon
Speaker 3: put together. I encourage everybody to read this one. Go
Speaker 3: check it out online at Bloomberg dot com because the
Speaker 3: graphics in here absolutely indispensable. You've got to check out
Speaker 3: the story here.
Speaker 2: All right, and you can find that again at Bloomberg
Speaker 2: dot com or check it out on the Bloomberg terminal.
Speaker 2: Carol Master along with Tim Stanovick, you're listening and watching
Speaker 2: Bloomberg Business Week. This is Boomberg.
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Speaker 3: Here's some good news. At a mere one point nine percent,
Speaker 3: the state of Maryland has the lowest unemployment rate in
Speaker 3: the entire country, and at more than one hundred and
Speaker 3: eight thousand dollars a year, it's got the highest median
Speaker 3: household income in the US and then there's the not
Speaker 3: so good news. Maryland's economy is growing at a slower
Speaker 3: rate than the US economy and its neighbors Pennsylvania and Virginia,
Speaker 3: and labor force participation has not recovered to pre pandemic levels.
Speaker 3: These figures are highlighted in a report last month from
Speaker 3: the Maryland State Controller's Office, the first report of its
Speaker 3: kind to be released. Let's get to the interview we
Speaker 3: have with us this afternoon, Maryland's Comptroller Brook Leerman. She
Speaker 3: joins us from our Washington DC Bureau Controller. Welcome. It's
Speaker 3: good to have you on the program this afternoon. As
Speaker 3: I mentioned, there are a lot of good numbers in
Speaker 3: the report, but there's also a lot of challenges here.
Speaker 3: Take your biggest challenge, give us your biggest challenge. What
Speaker 3: in here concerns you the most?
Speaker 9: Thank you so much.
Speaker 10: Tim.
Speaker 9: As you said, you know, Maryland is doing so well
Speaker 9: in so many ways, but what we saw in this report,
Speaker 9: through our numbers and analysis as well as roundtables around
Speaker 9: the state, is that our labor force is constrained. You know,
Speaker 9: we have a traditionally very high labor force participation rate
Speaker 9: in Maryland, and we still have a rate that is
Speaker 9: higher than the national average, but we haven't quite recovered
Speaker 9: from COVID, and so some of our economy is really
Speaker 9: constrained in the private sector growth. We're seeing good federal
Speaker 9: sector growth, but the private sector growth is constrained because
Speaker 9: of this labor these labor force challenges. So, you know,
Speaker 9: we were excited to release this report so that our
Speaker 9: policy makers, our governor and others can and can really
Speaker 9: start to tackle these challenges and our economy can continue
Speaker 9: to grow.
Speaker 11: Now, controller what are the biggest challenges in the workforce
Speaker 11: and who is bearing the brunt of the pain here.
Speaker 9: So it's a good question. You know, we are really
Speaker 9: fortunate as a state to have a robust and unique
Speaker 9: set of industries in the state, you know, from federal
Speaker 9: to government to the port to unique biotech and cybersecurity
Speaker 9: and more all across the state, as well as numerous universities.
Speaker 9: What we saw in the data is that women have
Speaker 9: left the workforce at a higher rate in Maryland than nationally,
Speaker 9: So that's something that we're really focused on.
Speaker 10: We also have seen some.
Speaker 9: Health challenges over the years because of the opioid epidemic
Speaker 9: and so and continuing health concerns and so we want
Speaker 9: to make sure that we're focusing gotten there as well.
Speaker 9: And then finally I will say, you know, our population
Speaker 9: growth is so important. You know, when you're talking about
Speaker 9: labor force, it's about you know, the number of people
Speaker 9: both who live in Maryland and are participating. And we
Speaker 9: have seen lower numbers of growth in terms of population
Speaker 9: in the past few years since COVID, and so we
Speaker 9: want to make sure that there's a place for everyone
Speaker 9: in Maryland that they can afford a home, that they
Speaker 9: can send their kids to our great public schools. So
Speaker 9: that's where we're focusing as well.
Speaker 3: Okay, Controller, I want to zero in on one issue
Speaker 3: that you mentioned, it's women leaving the workforce. I was
Speaker 3: really shocked to see the decline of childcare centers in
Speaker 3: this report in the state of Maryland. We are seeing
Speaker 3: that you predict by twenty twenty seven, there will be
Speaker 3: only twenty seven hundred childcare providers in the state, down
Speaker 3: from nearly six thousand in twenty eighteen. I've got two
Speaker 3: little kids. Childcare is front and center for my wife
Speaker 3: and I. How do you fix this in the state?
Speaker 3: Can you do that? As Controller?
Speaker 9: So you know, one of the things about my job
Speaker 9: that I love is that I can partner with our governor,
Speaker 9: you know, with other our General Assembly or Speaker, Senate President.
Speaker 9: So as the Controller, I really serve as the elected
Speaker 9: CFO of the state of Maryland. And this report is
Speaker 9: about identifying some of those challenges so that our General
Speaker 9: Assembly and our governor have the information and can then
Speaker 9: formulate policies to tackle some of those challenges and seize opportunities.
Speaker 9: And this childcare one is a huge one. I'm also
Speaker 9: a mom with two children. I understand the challenge of
Speaker 9: finding childcare, and it is essential that we get it
Speaker 9: right right, that we make sure that there's space in
Speaker 9: our economy for childcare providers of all types, the private settings,
Speaker 9: but also the in home care that many Marylanders and
Speaker 9: many folks who are below meeting income really rely on.
Speaker 9: And so that is certainly a focus of the General
Speaker 9: Assembly and the Governor in fact mentioned it in a
Speaker 9: State of the State of the address this year.
Speaker 3: Do you think it's something that the state can fix
Speaker 3: on its own or do you need the federal government
Speaker 3: to help.
Speaker 9: I think it's going to have to be a partnership.
Speaker 9: You know, we will work with the federal government in
Speaker 9: terms of the childcare block grant program. You know, many
Speaker 9: years ago we changed how we paid in Maryland to
Speaker 9: pay more. In fact, in the Office of the Controller.
Speaker 9: Just this past year, we completely changed how, working with
Speaker 9: the Maryland State Department of Education, how we reimburse childcare
Speaker 9: providers so that we could provide repayments and reimbursements in
Speaker 9: a much more timely fashion. So we're very focused on
Speaker 9: that childcare piece to ensure that women have the opportunities
Speaker 9: that they want to work out of the home.
Speaker 11: I want to switch gears a little bit here, and
Speaker 11: I want to talk about something that's on the top
Speaker 11: of a lot of people's minds right now.
Speaker 7: It is tax season.
Speaker 11: I want to think about your posturing versus some of
Speaker 11: the others around you. For example, vir Junior Governor Glenn
Speaker 11: Youngkin has been of the side of saying that taxes
Speaker 11: are too high yet at state and local levels and
Speaker 11: at the federal level, we're obviously facing massive constraints on budgets.
Speaker 11: How do you think about the tax equation for the
Speaker 11: folks who live in Maryland.
Speaker 9: I think we can never enter into a race to
Speaker 9: the bottom. You know, Maryland and Maryland, we're proud of
Speaker 9: our amazing public schools. I graduated from Maryland public schools.
Speaker 9: My two children are in public schools. We have amazing
Speaker 9: state parks, we have a robust healthcare system, and so
Speaker 9: I would caution us against, you know, entering into any
Speaker 9: sort of race to the bottom. As in terms of
Speaker 9: tax policy, I think what we have to focus on
Speaker 9: is making sure that Marylanders are getting the support that
Speaker 9: they need, that our businesses are able to grow and
Speaker 9: thrive here in the state of Maryland, and that we
Speaker 9: have the labor force available, a well educated, a well
Speaker 9: trained workforce available for employers so that they know that
Speaker 9: they can grow here over the long term.
Speaker 11: Curious about the race to the bottom a little more,
Speaker 11: how do you compete with other states that are participating
Speaker 11: in that race to the bottom, particularly if you're trying
Speaker 11: to build a labor.
Speaker 10: Force well over the long term.
Speaker 9: What you see is, you know, although Marylanders, if you
Speaker 9: look at the age brackets, Marylanders may be moving out
Speaker 9: of state when they're younger, when they're older, we actually
Speaker 9: see you know, the prime work age workforce age Maryland
Speaker 9: people moving into the states. And that's because of our schools,
Speaker 9: It's because of our opportunities, it's because of our housing stock.
Speaker 9: Those are those folks are finding their way to Maryland
Speaker 9: because of its reputation for being such a family supporting state,
Speaker 9: and so you know, that's where we have to focus
Speaker 9: on making sure then that those Marylanders are can find
Speaker 9: the housing that they need. Right, I think where I
Speaker 9: would focus is on making sure that the housing is
Speaker 9: available so that people can grow here, thrive here, and
Speaker 9: then retire here as well.
Speaker 3: Controller I want to talk about federal government employment because
Speaker 3: a relatively large portion of the state compared to other states,
Speaker 3: works for the federal government five point seven percent of
Speaker 3: Maryland total of total Maryland employment compared to one point
Speaker 3: nine percent of total employment nationally. Obviously, that's good for
Speaker 3: stability because these government jobs are stable. But I'm wondering
Speaker 3: what the down sides are of having so many government workers.
Speaker 3: Since those jobs are so stable, doesn't mean the working
Speaker 3: population doesn't necessarily have the same rate of people going
Speaker 3: and starting their own businesses of entrepreneurship. Talk to us
Speaker 3: a little bit about that.
Speaker 9: Sure, you know, we haven't seen that in Maryland. We're
Speaker 9: very fortunate to have I think this high federal employment,
Speaker 9: although it sometimes does get a little dicey when the
Speaker 9: federal government might shut down, but you know, for the
Speaker 9: most part, it's a real boom to Maryland, and we're
Speaker 9: really excited to be welcoming the FBI headquarters to Maryland
Speaker 9: in the coming years because we have such a robust
Speaker 9: series of research universities in the state as well, including
Speaker 9: of course JOHNS Hopkins, the University of Maryland System and
Speaker 9: more Morgan State. We have a number of entrepreneurs and
Speaker 9: ideas and sort of that's that are coming out of
Speaker 9: those universities. We see enormous tech transfer possibilities. We also
Speaker 9: are really fortunate to have, you know, a large number
Speaker 9: of immig grants in the state of Maryland, and we
Speaker 9: see a number of immigrants who are great entrepreneurs opening
Speaker 9: businesses in the state as well.
Speaker 11: Com Schuler, with the type of fighting a few hill
Speaker 11: that we've been seeing coming out of Congress, do you
Speaker 11: share a concern with so many federal workers being in
Speaker 11: Maryland of a risk of a government shut down.
Speaker 9: Absolutely, you know, it's for so many reasons. A government
Speaker 9: shut down is irresponsible and challenging, you know, certainly globally, but.
Speaker 10: Here in Maryland it is as well.
Speaker 9: You know, those workers are having to go to work
Speaker 9: and they're not getting paid, or they're not working and
Speaker 9: they're not getting paid. It's incredibly challenging. Over the long term,
Speaker 9: they do get paid, and so the revenue does come
Speaker 9: in both to their households and to the state. The
Speaker 9: most challenging, one of the most challenging times that our
Speaker 9: economy has had relating to the federal government was actually
Speaker 9: was actually after a sequestration. We saw real challenges after
Speaker 9: that because of the long term effect that sequestration had.
Speaker 3: We only have about thirty seconds left. But you were
Speaker 3: a Democratic delegate back in twenty sixteen. I got to
Speaker 3: ask you a national question about the Democratic Party. Why
Speaker 3: do you think there haven't been more competition from within
Speaker 3: the Democratic Party against President Biden given the challenges that
Speaker 3: he faces for reelection.
Speaker 9: President Biden and the Democrats in Congress have have passed
Speaker 9: more important legislation in the past two years than I
Speaker 9: can remember in you know, decades. I mean, from the
Speaker 9: IRA to the Chips Act to the Infrastructure Bill. I mean,
Speaker 9: the legislation that has come out is in phenomenal and
Speaker 9: it is game changing for not just the state of
Speaker 9: Maryland in the coming years, but really for our country
Speaker 9: and so you know, I just think the progress that
Speaker 9: has been made under the Democrats, it can't be denied.
Speaker 9: And our economy has grown as well, and so I'm
Speaker 9: excited about what's happening.
Speaker 3: Controller, thank you so much for joining us. That's Brook Learman,
Speaker 3: Maryland's Controller, joining us from Washington, DC.
Speaker 1: You're listening to the Bloomberg Business Week Podcast. Catch us
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Speaker 2: Plenty ahead in our second hour of the weekend edition
Speaker 2: of Bloomberg Business Week, including the well known hedge fund
Speaker 2: giant who is no stranger to social media and who
Speaker 2: made his way up the annual Bloomberg list of the
Speaker 2: best paid hedge fund founders. We've got the details on
Speaker 2: Bill Ackman's big twenty twenty three pay.
Speaker 3: Day from hedge funds to hogies. Why the billionaire family
Speaker 3: behind the iconic South Jersey chain Wahwah believes they can
Speaker 3: mirror the same cult status in other states. Bless Our
Speaker 3: Bloomberg Pursuits team on veils the eight secrets learned working
Speaker 3: as a butler at raffles Singapore.
Speaker 2: It's a pretty amazing list and that includes whether it's
Speaker 2: memorizing how you sleep or sourcing toilet paper in your
Speaker 2: favorite color. The hospitality gurus at this historic Singapore and
Speaker 2: hotel have mastered the personal touch and by personal times
Speaker 2: we mean really personal.
Speaker 3: That's true. Well, first up this hour. More signs of
Speaker 3: a rough road ahead for the EV space. The electric
Speaker 3: vehicle makers Rivian and Lucid both out with earnings this
Speaker 3: past week that sent their stocks dropping on the news.
Speaker 3: Rivian also cutting ten percent of its salaried staff as
Speaker 3: its output forecast misses. Lucid's production outlook also disappointing.
Speaker 2: Yeah, it's been a rough go so far this year
Speaker 2: for electric vehicle adoption. Rather than muscling aside gas guzzlers,
Speaker 2: sales of fully electric cars this year are set to
Speaker 2: grow at the slowest rate since twenty nineteen. This is,
Speaker 2: according to Bloomberg NEF, with the unexpected stall in momentum
Speaker 2: intensifying competition.
Speaker 3: In fact, Ford cutting the price of its electric Mustang
Speaker 3: mock Ee by as much as eighty one hundred dollars
Speaker 3: after its sales tumbled fifty one percent in January. That
Speaker 3: was when Ford had to stop offering tax incentives on
Speaker 3: the plug in model. Ford also cutting production of the
Speaker 3: mach E and the F one to fifty Lightning plugin
Speaker 3: pickup truck. So a lot has changed in a very
Speaker 3: short time.
Speaker 2: Yeah, it does feel like a one to eighty in
Speaker 2: terms of the expected ramp up to EV adoption. All right,
Speaker 2: So where does that leave the crucial component for evs.
Speaker 2: We're talking about the chargers. After all, without chargers, there
Speaker 2: are no evs. So for that, we checked in with
Speaker 2: Brendan Jones. He is president and chief executive officer Blink
Speaker 2: charging company. Customers include Alphabet, Amazon, AutoNation for GM, hotels
Speaker 2: and cities around the country.
Speaker 12: Well, you know, despite of what we see as some
Speaker 12: cuts from certain OEMs, we're still seeing an overall increase
Speaker 12: in the market. The US had one point three million
Speaker 12: EV sales last year, and if you were a single
Speaker 12: OEM and you had one point three million sales, that
Speaker 12: would be outstanding, and even bloomberg yourselves, you still see
Speaker 12: an increase. In twenty twenty three, we're fourteen million, you're
Speaker 12: projecting sixteen point.
Speaker 13: Seven million next year.
Speaker 12: So while it may slow down a bit, the industry
Speaker 12: is still moving forward. And progressing. There's gonna be some
Speaker 12: structural adjustment, but we're still seeing thee have invested, you know,
Speaker 12: north of seven hundred billion dollars in EV platforms, and
Speaker 12: those vehicles are still coming to market.
Speaker 13: Some are going to do button than others. Others need
Speaker 13: price adjustments.
Speaker 12: We still need the cost of the battery to come
Speaker 12: down a little bit to get parody with internal combustion engines.
Speaker 12: But all that is happening, so we remain optimistic. Maybe
Speaker 12: a little slower, but when we think about the gap
Speaker 12: between EV sales on the vehicle side and the need
Speaker 12: for infrastructure, there's a lot of ketchup work to be
Speaker 12: done on the infrastructure. So we see nothing but increased
Speaker 12: orders and increased revenue for Blank.
Speaker 2: Increased orders, increased revenue for you guys, but at a
Speaker 2: slower pace. Is that the kind of reset to be fair, Brendan.
Speaker 12: Yeah, it may be just, but we're going to be
Speaker 12: very cautionary at a slight pace. You know, we just
Speaker 12: announced a couple of days ago that we're going to
Speaker 12: hit one hundred and forty million in revenue.
Speaker 13: That's an astronomically high number.
Speaker 12: From where we were three years ago when I joined
Speaker 12: the company to structionally adjusted the previous year revenue was
Speaker 12: just two million dollars, and now we're at one hundred
Speaker 12: and forty million dollars and we're going to I can't
Speaker 12: and I wouldn't predict that we're going to see that
Speaker 12: same growth factor because a lot has changed in the intrim.
Speaker 12: But we still see growth. And when we give guidance
Speaker 12: out after March fifteenth for twenty twenty four, you'll see
Speaker 12: those in our numbers.
Speaker 6: Yeah.
Speaker 2: And to be fair, that twenty twenty three revenue that
Speaker 2: you said to surpass one forty the consensus on the
Speaker 2: street was one thirty two point thirty three million. Your
Speaker 2: stock was up more than thirty percent, more than thirty
Speaker 2: two percent, to be fair, when you reported earnings and
Speaker 2: gave that outlook. That was back on February fourteenth. Happy
Speaker 2: Valentine's Day everybody.
Speaker 3: Hey Brendon, what is holding back customers in the US
Speaker 3: from widespread adoption right now? Is it purely cost?
Speaker 12: Cost is an a element, but we see some lower
Speaker 12: price models coming in perception, we have to really improve
Speaker 12: the dialogue. I mean, the benefit of an EV is
Speaker 12: really that you can plug it in anywhere.
Speaker 13: But when you look at the share of voice.
Speaker 12: When we talk about EV infrastructure, it's really a lot
Speaker 12: on public base DC fast charging when reality, according to
Speaker 12: all the data, ninety to ninety plus percent of the
Speaker 12: charging is going to be on level too charging that
Speaker 12: is either in the home or the workplace, or the
Speaker 12: apartment building, the multifamily dwelling, the doctor's office, and it's
Speaker 12: much easier to install. But we have most of the
Speaker 12: public holding back waiting for that visible sign to see
Speaker 12: a DC fast charger. But we got to break that myth.
Speaker 12: That's the old paradigm. The new paradigm is charge anywhere.
Speaker 12: And unfortunately, as Americans, you know, we think we use
Speaker 12: our car more than we do. But the DOT has
Speaker 12: had consistent stats for the last thirty years. They sit
Speaker 12: ninety five percent of the time charging where they sit.
Speaker 12: It's more economical, it's less capital, it's easier to do,
Speaker 12: and we can put more poor out there.
Speaker 2: Well how much, I mean, how likely is that broader
Speaker 2: pivot towards the slower level two charges, which is what
Speaker 2: you guys focus on if plug in hybrids gain share.
Speaker 2: I'm just curious how you see it and the need
Speaker 2: for that fast chargers become less critical so give us
Speaker 2: an idea if you see that broader pivot, it's still yeah.
Speaker 12: If you look at our portfolio today, I'll give you
Speaker 12: that is that as an example, and we have hybrids
Speaker 12: that are charging on our chargers every day, we will
Speaker 12: maintain that ninety ten split. Ten percent is going to
Speaker 12: be DC and ninety percent is going to be L two. Well,
Speaker 12: we think that's healthy. That's globally right, because we're not
Speaker 12: the United States based. We're in Europe, we're in the
Speaker 12: United States, we're moving into Southeast Asia, we're in Greece already,
Speaker 12: we're globally.
Speaker 13: We're in twenty seven countries that we have today.
Speaker 12: So we have the benefit of seeing where the future
Speaker 12: utilization is going to be, especially in the European countries
Speaker 12: that they've already structurally adjusted, and utilization on our chargers
Speaker 12: there is way up compared to the United States, and
Speaker 12: eventually that's going to come to the United States. So
Speaker 12: hybrids that are coming out have now a dependency on
Speaker 12: just being electric, and that dependency on being electric is
Speaker 12: going to drive the need for charging.
Speaker 3: When do we get to a point though, where we
Speaker 3: see pure we see evs or as easy to charge
Speaker 3: as an internal combustion engine vehicle.
Speaker 12: Well, I think you know we're getting close now with
Speaker 12: the paradigm, and you're talking about in terms of speed
Speaker 12: when you're talking about public charging, right.
Speaker 3: Speed would be great. I was just thinking of a
Speaker 3: number of places you can fill up your tank versus
Speaker 3: number of places you can fill up your battery.
Speaker 12: Right, So we're heading there, but again, remember it's a
Speaker 12: different paradigm, and that's what we have to keep in mind.
Speaker 12: You know, I worked for many DC fast charger companies
Speaker 12: in my past, but I did all my charging at
Speaker 12: home and at work because that's what the charger was, right,
Speaker 12: So I was always full.
Speaker 3: Was it a DC fast charger at work?
Speaker 12: There was a DC fast charger at work, but I
Speaker 12: didn't need to hook up to it. It costs more money,
Speaker 12: it's more expensive to operate. I just plugged into the
Speaker 12: l too.
Speaker 3: And just so we are clear to everybody out there.
Speaker 3: Level one charging is one hundred and twenty volts, takes
Speaker 3: you know, between twelve hours in a full day, so
Speaker 3: you can do that one at home. You could do
Speaker 3: level two at home as well, three to eight hours.
Speaker 3: Level three is four hundred and eighty volts, and that
Speaker 3: can charge something in thirty to sixty.
Speaker 12: Minutes, depending on the car and the architecture. Okay, and
Speaker 12: depending on the charger itself, because it might only be
Speaker 12: one hundred kilo loot DC fast charge, it could be
Speaker 12: a fifty or thirty right, so, and then the battery
Speaker 12: has to have a speed which it'll accept the charge. So,
Speaker 12: you know, we look at a lot of the generalities
Speaker 12: is the high end and say that's what it's going
Speaker 12: to be, but really it's going to be somewhere.
Speaker 5: In the middle.
Speaker 2: Brendan though, how going back to kind of we've talked
Speaker 2: a lot here at Bloomberg, Our team kick Notton and
Speaker 2: others have really done some great reporting on the uptiket
Speaker 2: in those hybrids rather than pure evs. If you will
Speaker 2: well that pivot, if that continues, how do you assess
Speaker 2: or describe that impact on your business or how does
Speaker 2: it change the outlook?
Speaker 12: We don't think it changes that greatly, but we really
Speaker 12: don't see that as a long standing thing. And here's
Speaker 12: the reality. China is moving to peer evs, Europe is
Speaker 12: moving to peer evs, and a lot of the European
Speaker 12: manufacturers are pushing peer ev strategies. In the US, well,
Speaker 12: you might have some slow down. The US is heading
Speaker 12: in this direction. Hybrids already exists, so those power plants
Speaker 12: are no but in the end there are a horribly
Speaker 12: inefficient plant power plant because you're running two different systems
Speaker 12: in a car, and that is suboptimal by any engineering standards.
Speaker 12: So eventually it's going to give way to your electric.
Speaker 3: Vehicles really quickly.
Speaker 2: Thirty seconds. Who are your biggest customers? Who's buying it most?
Speaker 2: Is it municipalities, is it the automakers, is it Amazon?
Speaker 10: Who is it?
Speaker 7: Real quickly?
Speaker 13: Great question, and it's actually all of the above. Now.
Speaker 12: The biggest booming part of the space is fleet. Both
Speaker 12: municipal and commercial fleets are buying chargers night and day
Speaker 12: all over the place right now. But also we're doing
Speaker 12: a strong book of business with healthcare, we do it
Speaker 12: with hospitality, we do it with long dwell times. So
Speaker 12: it's pretty consistent.
Speaker 13: In the shift. And we're seeing orders.
Speaker 12: Increase, not decrease, got it, So we're pretty autimistic about it.
Speaker 2: Always good to check in with you. Brendan Jones, President
Speaker 2: and chief executive officer of Blink Charging, joining us from Washington, DC.
Speaker 1: You're listening to the Bloomberg Business Week Podcast. Listen live
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Speaker 3: So last week, I get any email from my insurance
Speaker 3: company about renewing my auto insurance. You get this every
Speaker 3: six months, Well, I canna buy.
Speaker 5: A year of insurance.
Speaker 3: By the way, this happens every sixs.
Speaker 2: You can't buy a year of insuran.
Speaker 3: It make me do it every six months. This email
Speaker 3: was different, though. One thousand, nine hundred and eighty four
Speaker 3: dollars and sixty five cents for six months of auto insurance. Yeah, okay,
Speaker 3: three hundred and thirty dollars a month, up from seventeen
Speaker 3: fifty just six months ago. That's a thirteen percent increase
Speaker 3: in just six months. Okay, that's crazy. I email my
Speaker 3: insurance agent asked him what I could do change my coverage,
Speaker 3: raise my deductibles, anything to get the price down. A
Speaker 3: few minutes later, he emails me back and he says, yeah,
Speaker 3: it's ugly out there.
Speaker 10: I think you need a new insurance age.
Speaker 3: He's a broker though, like he has he has the
Speaker 3: view everywhere in the market.
Speaker 2: I'm telling you I could buy a policy for a year,
Speaker 2: no problem.
Speaker 3: No, there are companies now in New York that don't
Speaker 3: even they don't even write insurance in New York, New Jersey.
Speaker 3: It's a mess out there, all right. So, the couse
Speaker 3: of auto insurance in the US rows more than twenty percent,
Speaker 3: and twenty twenty three, it's the biggest annual jump since
Speaker 3: nineteen seventy six. That's according to data from the US
Speaker 3: Bureau of Labor Statistics. Rates are up with thirty seven
Speaker 3: percent CAROL since January of twenty twenty.
Speaker 2: All right, Well, in the forthcoming issue Bloomberg BusinessWeek, which
Speaker 2: is at on newstands tomorrow, already online at Bloomberg dot
Speaker 2: com slash business Week also on the Bloomberg Bloomberg News,
Speaker 2: auto reporter Keith Naughton gets at the reasons why insurance
Speaker 2: has gone up so much in such a short time.
Speaker 2: He joins us on zoom from Detroit. So glad you
Speaker 2: are back with us to talk about this story. What
Speaker 2: the heck is going on? And how can we help them?
Speaker 8: No, but what can help me, what's going on, Well,
Speaker 8: there isn't much hope for any of us on the
Speaker 8: auto insurance front. To complement Tien's story, I was talking
Speaker 8: to another editor at Bloomberg Today who lives in New York,
Speaker 8: and he said the insurance premium quotes he was getting
Speaker 8: on his new car were five hundred dollars a month.
Speaker 8: So it's like having two car payments on the same car.
Speaker 7: Oh my god, why yeah?
Speaker 1: Yes.
Speaker 8: So the why here is that cars are just loaded
Speaker 8: with more technology now to help you avoid accidents, and
Speaker 8: those technological bits it's cameras and sensors and sonar from
Speaker 8: bumper to mumper on the car, really drives up repair costs.
Speaker 8: And then those repair costs are being passed on through
Speaker 8: your auto insurance rates, which are skyrocket.
Speaker 3: If you have Keith tired interrupt. I just want to
Speaker 3: make sure I get this point. If our cars are
Speaker 3: filled with this technology that helps us avoid accidents, shouldn't
Speaker 3: we be getting in fewer accidents and therefore there should
Speaker 3: be fewer repairs and insurance companies wouldn't have to pay
Speaker 3: out as much.
Speaker 2: Non basically drives itself. It's so much safer than rather
Speaker 2: me driving it to be quite honest.
Speaker 8: Yes, that's way too logical. That's exactly what should be
Speaker 8: happening but is not happening. And in fact, what's been
Speaker 8: happening since twenty twenty is auto insurance claims are going up,
Speaker 8: not down, despite all this whiz bang crash avoidance technology
Speaker 8: that today's cars are laden. The reason behind that has
Speaker 8: something to do with distracted driving. We all have our
Speaker 8: phones in the car, or if you're not looking at
Speaker 8: your phone, which is illegal in New York and many
Speaker 8: other states while you're driving, then you have this big
Speaker 8: touch screen in the middle of your dashboard that you're
Speaker 8: glancing over at or touching or you know, focused on
Speaker 8: instead of the road. So accidents are up, fatalities are up.
Speaker 8: It's the safety technology. It might be helping us survive crashes,
Speaker 8: but it's not reducing crash.
Speaker 2: I'm just going to tell you guys. I even get
Speaker 2: a dividend check at the end of the year from
Speaker 2: my insurance company, which I've been with for almost thirty
Speaker 2: years since I was a teenage driver on my dad's
Speaker 2: policy and I kept it. And then when they have
Speaker 2: a good year, we get a dividend check.
Speaker 10: So I'm going to wait to time. Oh, it's just
Speaker 10: I'm sorry.
Speaker 3: You should check to see how much you're paying though,
Speaker 3: because I bet it's a lot.
Speaker 10: No, I do look, but I will check again.
Speaker 2: It's kind of wild, and you know what I'm worried
Speaker 2: about is and well, wait a minute, I'm going to
Speaker 2: go on my soapbox for a little bit more here, Keith,
Speaker 2: because I do feel like I wish, I wish like
Speaker 2: traffic cops actually police driving to you, because I do
Speaker 2: feel like driving has gotten more aggressive. People fly through
Speaker 2: stop signs, Like I just feel like there's some stuff
Speaker 2: going on that it's kind of the wild wild West
Speaker 2: on the road. But I don't know that that relates
Speaker 2: to your story. But I just feel like people are a
Speaker 2: little crazy on the roads today. And maybe that's why
Speaker 2: when an AX they get in an accident and they're
Speaker 2: also distracted. There's a lot going on, and so then
Speaker 2: it's just going to cost more.
Speaker 8: I don't know, cal And that's why auto insurance companies now,
Speaker 8: some of them offer you the option of, you know,
Speaker 8: attaching and device to your car so they can monitor
Speaker 8: your driving. And if you prove to be a good driver,
Speaker 8: like I'm sure you would, Carol, then you actually get
Speaker 8: a reduction in rates. So but but that rage raises
Speaker 8: sort of privacy concerns. Lots of folks don't want their
Speaker 8: insurance company knowing everywhere they're going at all hours, so
Speaker 8: people decline that. But that is one way to try
Speaker 8: and reduce your rates. But rates are climbing. I did
Speaker 8: the same thing Tim did last year. I looked at
Speaker 8: what I was paying and I couldn't believe it, and
Speaker 8: so I started shopping around and found a cheaper rate.
Speaker 8: But it's getting harder and harder to find a lower
Speaker 8: rate because all of them are going up. And the
Speaker 8: insurance companies are not only doing it because they have
Speaker 8: higher repair and crash costs, but also because they are
Speaker 8: now making a lot more money doing that.
Speaker 3: I'm glad you bring up the more money part, because
Speaker 3: it turns out that insurance companies are doing pretty well
Speaker 3: right now. So Travelers closed at an all time high
Speaker 3: earlier this week. We learned from Progressive earlier this week
Speaker 3: that profit for the most recent quarter more than doubled
Speaker 3: from a year earlier.
Speaker 10: So maybe they're charging too much.
Speaker 2: If their profit is going up that much, that means obviously,
Speaker 2: even we have an accident it's not clustering that much.
Speaker 2: Even whatever they pay.
Speaker 3: Out, I don't know, I mean, what are we logically?
Speaker 3: It turns out that you know, we're all paying for like,
Speaker 3: it's pretty good to be an investor in some of
Speaker 3: these companies, Keithan, Perhaps not so good because we're paying
Speaker 3: so much as customers, right, And it's.
Speaker 8: Not just that the insurance companies are gouging us. There
Speaker 8: really arenes goodness reasons that it costs more. Let me
Speaker 8: give you one example from my story, and that is
Speaker 8: the Toyota Camera. So that was the best selling car
Speaker 8: in America for decades, and in twenty eighteen, Toyota redesigned
Speaker 8: it and added a whole bunch of driver assist features
Speaker 8: technology radar, so onar cameras throughout the car. But just
Speaker 8: looking at the front bumper assembly, it went from having
Speaker 8: eighteen parts to forty three parts. And so as a result,
Speaker 8: you get into a relatively minor fender bender with a
Speaker 8: Toileta camera. And I'm not picking on.
Speaker 5: Toyota, this is cars.
Speaker 8: But this particular example given to me by the folks
Speaker 8: at Mitchell International, said, what that did is it drove
Speaker 8: repair costs for the camera. When you get in a
Speaker 8: front end collision. It drove them up by forty three percent.
Speaker 3: That makes sense, yeah, Keith. One thing that was so
Speaker 3: shocking to me about your story was the difference with
Speaker 3: EV's and you bring up the Hurts issue. We only
Speaker 3: have about a minute left, but talk to us about
Speaker 3: how much more complicated evs are to repair and why
Speaker 3: that's also driving uprates.
Speaker 8: Right, and our Hurts is selling off a big chunk
Speaker 8: of its EV fleet and one of the reasons they
Speaker 8: cited is that EV's cost twice as much to repair
Speaker 8: as regular cars. One of the reasons is that big
Speaker 8: battery tim that's in every EV. You have to disconnected,
Speaker 8: power it down, or in some cases remove it altogether
Speaker 8: to avoid injury to the technicians, to avoid fire risk.
Speaker 8: And this just adds time in the repair shot and
Speaker 8: cost unbelievable.
Speaker 2: There's also an interesting part of your story where you
Speaker 2: talk about a new all this new technologies also added
Speaker 2: a costing step to the repair process. It has to
Speaker 2: do with calibration, which is you just understand, you know.
Speaker 3: I got to calibrate the sensors. It costs five hundred
Speaker 3: bucks more to do that.
Speaker 8: When you get a right, Yeah, it's amazing.
Speaker 3: Thank you for this story. I sent it to my
Speaker 3: whole family because I was complaining to them about insurance recently.
Speaker 3: So it turns out I said a lot of key
Speaker 3: stories to.
Speaker 5: My whole family.
Speaker 3: It's a street Yeah, it's like he writes about cool stuff.
Speaker 7: It does and it makes so much sense.
Speaker 10: Keith.
Speaker 2: Thank you, Bloomberg News Auto reporter Keith Not as we said, go.
Speaker 3: Check out how much you're paying for insurance.
Speaker 14: Thank car Insurance.
Speaker 2: I know, I just saw the bill come in. Yeah, well,
Speaker 2: husband just kind of slides it away, so maybe maybe wait.
Speaker 14: To see it.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from two to five pm Eastern Listen
Speaker 1: on Apple card Play and then brought Auto with a
Speaker 1: Bloomberg Business app or one just live on YouTube.
Speaker 2: No doubt about it. We love lists here a Bloomberg,
Speaker 2: especially ones that track investing prowess the best. Also, we
Speaker 2: like to keep an eye on wealth accumulation.
Speaker 3: Yeah, those are a couple of things that I think
Speaker 3: it's fair to say. Just type in by the way,
Speaker 3: rich go on the Bloomberg terminal. That's how you get
Speaker 3: to the Bloomberg Billionaires. Index. One list that taps into
Speaker 3: both is Bloomberg's annual list of the best paid a
Speaker 3: hedge fund of founders from more on what is the
Speaker 3: most read story on the Bloomberg today and who took
Speaker 3: top honors. We welcome Bloomberg News Hedge Fund reporter Emma Palmer.
Speaker 3: She's here in our Bloomberg Interactive Brokers studio with more
Speaker 3: on her story that she wrote along with a Bloomberg's
Speaker 3: Tom Maloney. Hemma joins us now in our studio. Hamma,
Speaker 3: good to have you with us this afternoon. Do I
Speaker 3: do a drum roll?
Speaker 6: Kiroll?
Speaker 12: Is it?
Speaker 3: Or do a drum roll for I don't know?
Speaker 2: Ask Hima, she's the expert.
Speaker 3: I mean this is a thing. Okay, ye, drum I'm
Speaker 3: doing the drum roll now. At the top of the
Speaker 3: list a man who likes to tweet and a man
Speaker 3: who didn't do much with his fund last year.
Speaker 15: Yes, so really interesting. We're talking about Bill Ackman. Of course,
Speaker 15: he has been all over Twitter recently and he is
Speaker 15: number seven on our list, which is the highest he's
Speaker 15: been since we've done this ranking. And what's interesting is
Speaker 15: he took home six hundred million dollars after basically just
Speaker 15: sort of adjusting his portfolio of ten stocks kind of
Speaker 15: on the margins. He brought down one position a fair bit,
Speaker 15: but in general it's a highly concentrated book and it's
Speaker 15: worked out well. The fund was up almost twenty seven percent,
Speaker 15: but they didn't do a whole lot to it recently.
Speaker 15: A chunk of his gains did come from the fact
Speaker 15: that it's a publicly traded Pershing square holdings, and so
Speaker 15: that helped him a great deal too.
Speaker 7: A good third of his money came from there.
Speaker 2: Yeah, you know, it's interesting when I was looking over
Speaker 2: this list, take a step back for us, how do
Speaker 2: you put this together? Because your methodology in this story
Speaker 2: there's a nice like a big long explain. Yes, there's
Speaker 2: got to be a lot of stuff you have to
Speaker 2: go through to figure this out.
Speaker 15: Yes, so Tom Maloney is my colleague on the story.
Speaker 15: He is the wizard behind doing all the calculations, and
Speaker 15: so we do take our time to get all the
Speaker 15: right imports, assess how the fund did, look at their
Speaker 15: public filings, assess who gets what stake of the fees
Speaker 15: and his ownership stake. So you can read the nice,
Speaker 15: very thorough methodology at the bottom of the story, but
Speaker 15: it does take a minute.
Speaker 2: Well, the reason I do ask is how much is performance,
Speaker 2: how much is fees ultimately and how much these dudes make?
Speaker 7: Yes, and so they were all dudes.
Speaker 15: They were all, yeah, I don't think we've ever actually
Speaker 15: had a woman on this ranking before, not yet.
Speaker 10: That makes me sad, But go ahead.
Speaker 15: So if you look at the story we do show you,
Speaker 15: for example, is the Englander. He made two point eight
Speaker 15: billion dollars. We divided it up as to how much
Speaker 15: he made on his gains in the personal investment in
Speaker 15: the fund, and then how much just comes from the
Speaker 15: share performance fees. You'll see across the board most of
Speaker 15: the money is coming from the funds performance, but I
Speaker 15: mean it's not unsubstantial. Which took nearly a billion dollars
Speaker 15: just from fees alone, Ken Griffin one point one billion
Speaker 15: dollars from fees alone, so it's it's tefty.
Speaker 3: Still, what's the fee breakdown traditionally versus what it is
Speaker 3: right now? I mean two and twenty is what you
Speaker 3: hear about with hedge funds, but it's a little more
Speaker 3: complicated than that.
Speaker 7: So it depends on the fund.
Speaker 15: If it's a big name fund that everybody wants to
Speaker 15: get into that has strong performance that you can charge
Speaker 15: two and twenty or sometimes two and thirty, or Element
Speaker 15: charged as much as forty percent performance fee. They bump
Speaker 15: the bump that up, so then you can smaller emerging
Speaker 15: newer funds typically bring that way down. The multi manager funds,
Speaker 15: so like a millennium of Citadel, they haven't passed through,
Speaker 15: so they pass on a lot of the costs, like
Speaker 15: compensation leases a whole bunch of stuff to the clients,
Speaker 15: so they pay for that.
Speaker 3: Does is the management fee included in performance fee?
Speaker 7: The management fee and the performance fee? Are you mean
Speaker 7: for multi shot specifically, Well, no.
Speaker 3: Just for when we look at the top fifteen.
Speaker 7: Or top fifteen.
Speaker 15: So we in our methodology we assume that the management
Speaker 15: fees go towards managing the company, so we do not
Speaker 15: factor that in the performance fees are what we look
Speaker 15: because these firms do charge your management fee to help
Speaker 15: like keep the lights on.
Speaker 7: So is the billionaire lights.
Speaker 3: Keep the lights on? In the jets fueled?
Speaker 7: They go, yeah, what's filed?
Speaker 1: Is it?
Speaker 2: Like when I look at Bill Lackman and Pershing Squares
Speaker 2: equity bets, like I guess for sometimes I always think, oh,
Speaker 2: it's all these sophisticated investment strategies. A lot of times
Speaker 2: it's just plain old stocks.
Speaker 15: It's Chippotele, Alphabet Hilton.
Speaker 7: Yeah, I know names we know.
Speaker 2: Life's kind of fascinating ones that have been, you know,
Speaker 2: on a run. Having said that, I am curious like
Speaker 2: some of these names. Obviously Bi Lackman we know because
Speaker 2: he is pretty out there when it comes to social media,
Speaker 2: and we often have stories somebody like the TCI Fund
Speaker 2: Management's Chris is at home Chris Hohne. Yeah, so tell
Speaker 2: us about him, because it's not a name we talk
Speaker 2: about regularly. But he earned a lot on just ten
Speaker 2: US stock names.
Speaker 15: So yes, so ten US stock names. He may have
Speaker 15: a few others that are international that we don't see
Speaker 15: in their thirteen F filings, but regardless, he runs a
Speaker 15: very concentrated long bias portfolio, so mostly longs versus shorts.
Speaker 7: He did, he did very well.
Speaker 15: He's been on our list almost consists, I think every year,
Speaker 15: if not every almost every year. He made nearly a
Speaker 15: billion dollars. Last year his fund was up thirty three percent,
Speaker 15: basically the best performer of the group on very concentrated bets,
Speaker 15: they're sizable, and most of his money seven hundred of
Speaker 15: his nine hundred came from the games on that fund alone.
Speaker 3: So wow, Yeah, do you want to be in a
Speaker 3: position as a manager to have, like I guess from
Speaker 3: a client's perspective, somebody like David Tepper, who's two point
Speaker 3: three billion dollar pay day last year, Yes, came almost
Speaker 3: one percent from personal investment versus fun performance. Like who
Speaker 3: do you want to be?
Speaker 2: Like?
Speaker 3: What does the mix? What's the mix you want?
Speaker 15: That's a very good question for Tepper, I would say,
Speaker 15: because he's he's returned a lot of outside capital.
Speaker 7: He still manages some so but it's smaller than he
Speaker 7: used to.
Speaker 15: So he's getting fewer fees just from that alone, and
Speaker 15: he doesn't charge himself fees.
Speaker 7: So I think it depends.
Speaker 15: I mean, the people talk about the multi strategy model
Speaker 15: a lot. The clients complain about it a lot because
Speaker 15: they pay for so much and it's so expensive. But
Speaker 15: then you have a year like a couple of years
Speaker 15: ago and siadel was up thirty percent NETO fees.
Speaker 7: But this year.
Speaker 15: The reason they're under a bit more scrutiny right now
Speaker 15: is because they tend to be in leverage bets they
Speaker 15: tend to They have had like mediocre performance last year,
Speaker 15: so it's been a little bit rougher recently.
Speaker 2: How much does this list change from year to year
Speaker 2: in terms of the top ten or fifteen?
Speaker 15: So I would say you see a lot of the
Speaker 15: repeat names. Yeah, do they shift around? N is You
Speaker 15: do see the shifting around. I think Ken's a little
Speaker 15: bit higher, yes, than he was before. Actually, no, that
Speaker 15: correct that Ken was number one last year. He made
Speaker 15: I think like three or four billion dollars number so
Speaker 15: number two this year. But you do see a lot
Speaker 15: of the same repeat people. But we have seen a
Speaker 15: number of.
Speaker 7: Names fall off the list. So after twenty twenty.
Speaker 15: Two the Tiger Cubs struggled. We talked a lot about
Speaker 15: ris funds going through a lot of pain. They have
Speaker 15: to make up those losses, and so the reason why
Speaker 15: you don't see Chase Coleman or someone on the list
Speaker 15: is because they're trying to get themselves out of that hole.
Speaker 13: Wow.
Speaker 2: As we said, the most red story in the Bloomberg Today.
Speaker 2: Im a Parmer hedge fund reporter at Bloomberg News. Be
Speaker 2: sure to check it out at Bloomberg dot com. Joining
Speaker 2: us in the Studio.
Speaker 10: This is Bloomberg.
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Speaker 3: Here's a fun little exercise. Find someone from Pennsylvania for
Speaker 3: Southern New Jersey and ask them about wah Wah and
Speaker 3: then just sit back and listen. Don't say anything, or
Speaker 3: just listen to the celebrities. Kate Winslett called it a
Speaker 3: mythical place. Tina Fey hoisted a basket of its hogies
Speaker 3: in a Saturday Night Live skit. Harry Styles of All
Speaker 3: People says it's one of his favorite things about Philadelphia.
Speaker 3: Wah Wah is not just a place to get gas.
Speaker 3: As Jordan Fitzgerald writes, the convenience store chain has built
Speaker 3: a fiercely loyal customer base by capturing a certain Jennesse
Speaker 3: quah about the personality of Philly and South Jersey. But now,
Speaker 3: for the first time, the Bloomberg Billionaires Index is valuing
Speaker 3: the Wood families net worth that's the family that started
Speaker 3: it years ago and owns a majority stake. Jordan Fitzgerald
Speaker 3: is Wealth Team reporter for Bloomberg NUR. She's with us
Speaker 3: here in the Bloomberg Interactive Broker's studio. So drum roll, Jordan.
Speaker 3: The Wood family, the wah Wah kings and queens. How
Speaker 3: much are they worth?
Speaker 10: About six billion dollars?
Speaker 3: Okay, that's a lot of hogies, a lot of hogies.
Speaker 10: The people got to have their hogies.
Speaker 3: The people. So how did you make this calculation? You're
Speaker 3: on the wealth team.
Speaker 16: I have to admit I am not a valuations person.
Speaker 10: We have, you know, the.
Speaker 3: People who you have people, you have people who do that. Okay,
Speaker 3: but take us through some of the numbers. Because they
Speaker 3: do have a thousand locations.
Speaker 16: They have a thousand locations. They want to build about
Speaker 16: three hundred more in the coming years. They're saying it's
Speaker 16: like their biggest growth push that they've ever done, and
Speaker 16: they're pretty confident that they can make the wah Wah
Speaker 16: magic like trans for beyond Philly in Jersey.
Speaker 11: You know, it's funny if you think about wa Wah
Speaker 11: A little bit of detail for you here, Tim, it's
Speaker 11: not your average a gas station, probably Helifornia.
Speaker 7: You never had at a gas station.
Speaker 10: It's quite crazy.
Speaker 16: I went out to various wah wahs on last Friday
Speaker 16: and I got lunch at a drink for five dollars.
Speaker 16: I was like, this is magic.
Speaker 11: Well, is that why it's doing so well that you
Speaker 11: can get that lunch and a drink for five dollars
Speaker 11: at a time where inslation is just roaring in this country.
Speaker 16: I think it's part that. In part you go there
Speaker 16: and you can get everything you need.
Speaker 10: In one stop.
Speaker 16: You can get someone gets their gas pumped outside and
Speaker 16: you can run in and get all your food and coffee.
Speaker 3: Needed, especially if it's in New Jersey where you're still
Speaker 3: not allowed to pump you on.
Speaker 10: And you know, I love having my gas.
Speaker 3: People like you from New Jersey right now, so I'm
Speaker 3: going to sit tight. I'm not going to talk about it,
Speaker 3: but I want to put my own gas. Okay, sorry, Shanela,
Speaker 3: you're asking.
Speaker 11: Why wah wa wai now, I mean, we'll caught your
Speaker 11: eye about this family and their growth at this point
Speaker 11: in time.
Speaker 10: I honestly can't take credit for that.
Speaker 16: I think the numbers people really identified that this was
Speaker 16: an area for us to focus on and I was
Speaker 16: tapped in because I am as we established from New
Speaker 16: Jersey and they were like, we're profiling you to do this,
Speaker 16: and I said thank you.
Speaker 3: So I have to say, as a Californian somebody who
Speaker 3: has not frequented many wah wahs, I was shocked to
Speaker 3: find that it has such a following. Yeah, I had
Speaker 3: never heard of it until I moved to the East Coast.
Speaker 3: And I'm wondering if the company is going to be
Speaker 3: able to take what is something regional right now and
Speaker 3: actually make it grow because there is like there's another
Speaker 3: chain down south, BUCkies that people freak out about. I've
Speaker 3: never been to a BUCkies, but apparently people love it,
Speaker 3: so like different parts of the country have different things
Speaker 3: that people like. Is it transferable?
Speaker 10: I think that's time will tell.
Speaker 16: They've definitely struggled a little bit with that in the
Speaker 16: past when expanding even to northern New Jersey. They tried
Speaker 16: handing out Philadelphia Eagles calendars and the Giants fans were
Speaker 16: not happy. And so, yeah, do you think like that
Speaker 16: is the thing people are thinking about, like will the
Speaker 16: wah Wah magic transfer The company's very confident that it will.
Speaker 16: The employees I talk to really think that they bring
Speaker 16: a certain level of service that anyone from any part
Speaker 16: of the country will desire. But you know, not everyone
Speaker 16: calls a HOGI a HOGI.
Speaker 10: Not everyone might be looking for that.
Speaker 11: Well, what are some of the other things that they're
Speaker 11: doing to try to attract those customers in different parts
Speaker 11: of the country.
Speaker 16: I think they're really just trusting their business model and
Speaker 16: they're not going They're not seeking California yet. They're really
Speaker 16: you know, pushing down south, pushing out into the Midwest
Speaker 16: areas that are border where they already are established and
Speaker 16: already are successful, and hope there might be I think
Speaker 16: some regional appeal that can very easily spread.
Speaker 3: Okay, Jordan, for people listening all over the country, all
Speaker 3: over the world right now who have not been to
Speaker 3: a wah wah, talk about what you did on Friday,
Speaker 3: what you saw, and share your experience.
Speaker 10: Yeah.
Speaker 16: I drove to about five different wuah wah locations and
Speaker 16: observed a little bit, talked to a few people and
Speaker 16: just tried to figure.
Speaker 10: Out like what to try to distill the Wawa magic.
Speaker 16: And the employees seem to really enjoy the vibe of
Speaker 16: that they create. They sometimes when I was talking to
Speaker 16: an employee or a customer, like people would hear me
Speaker 16: asking what they love about wah Wah and someone else
Speaker 16: would jump in and be like their pizza is weirdly
Speaker 16: good or and yeah, it just seems to be a
Speaker 16: thing that provokes a reaction from I.
Speaker 3: Mean, Shanellie, what about you, like you spent you went
Speaker 3: to college?
Speaker 7: In fact, yeah, I went.
Speaker 11: I went to a college very much down the street
Speaker 11: from a Wahwah, and you know, we were just in
Speaker 11: the middle of, you know, late night studying.
Speaker 7: We would just go get wraps from wah Wah like
Speaker 7: you would.
Speaker 10: You would it would be.
Speaker 16: Better than the school cafeteria that was That was the
Speaker 16: bar high for that though.
Speaker 10: That's a good question exactly.
Speaker 3: I'm wondering, Jordan, if it has to do with the
Speaker 3: fact that oftentimes stopping at a gas station to pick
Speaker 3: something up or go to the bathroom is like not
Speaker 3: a good experience. Things are disgusting, the staff doesn't want
Speaker 3: to be there. Did you get a feeling like it's
Speaker 3: sort of the opposite. It's like it's a family owned
Speaker 3: convenience store chain and the people who work there take
Speaker 3: pride in it.
Speaker 16: Yeah, definitely, and it's bigger. You can get fresh food there,
Speaker 16: which you can at a lot of different convenience stores
Speaker 16: and gas stations. And I do think like they treat
Speaker 16: their employees pretty well, and their employees put that back
Speaker 16: into the customer base. They have a really, really large
Speaker 16: employee ownership program. The employees own over thirty percent of
Speaker 16: the company.
Speaker 1: Wow.
Speaker 3: Okay, So talk to us a little bit about the
Speaker 3: history here in the Wood family's involvement, because they don't
Speaker 3: own all of it.
Speaker 10: They don't own all of it. They own a little
Speaker 10: over half.
Speaker 16: And the chain started in the sixties. The Wood family
Speaker 16: had been established in Pennsylvania for a couple hundred years,
Speaker 16: but they owned a dairy farm and one of the
Speaker 16: science decided, I'm going to open up a convenience store
Speaker 16: to sell our milk.
Speaker 10: And it all started from there.
Speaker 3: Do we know why it's called Wahwah?
Speaker 10: I did look this up.
Speaker 16: Specifically, it is called Wahwah because apparently their dairy farm
Speaker 16: was in a region of Pennsylvania called the Wahwah region,
Speaker 16: which is like anous, an Indigenous word for like the
Speaker 16: Canada goose. So that's why there's a little goose flying
Speaker 16: over their logo.
Speaker 3: I mean, I will tell you right now, people listening
Speaker 3: who are not in New Jersey or New York or
Speaker 3: Pennsylvania have no idea what.
Speaker 16: We They have no idea, and they're probably a little
Speaker 16: weirded out. But people who are from this region, I'd
Speaker 16: be getting emails all dating like, oh my god, you
Speaker 16: talked about Wallah.
Speaker 3: Maybe we can call it like the in and out
Speaker 3: burger of gas station convenience stores.
Speaker 10: Perhaps, but I do think the buckiest folks would take it.
Speaker 11: I think about it more like you know, when you're
Speaker 11: just driving down a long highway and you stop at
Speaker 11: a rest stop and you have like the Starbucks and
Speaker 11: the Dunkin Donuts. It's like more like that kind of vibe.
Speaker 7: Than it is stopping at it like an X.
Speaker 16: Yeah, okay, this is pop scale consumers employee ownership.
Speaker 3: That's a big deal here. I mean, that's not something
Speaker 3: you see with types of stores like this.
Speaker 16: No, And it seems to be a thing that they've
Speaker 16: always done. They seem to take pride in it. They
Speaker 16: advertise it on their website and yeah. I talked to
Speaker 16: a while employee who she was twenty years old. She
Speaker 16: went to Wah wah every day for breakfast at high school,
Speaker 16: and when she graduated, she was like, I want to
Speaker 16: spend more time here and decided to start working at WAHA.
Speaker 3: Well, I will tell you I emailed this to somebody.
Speaker 3: She will go unnamed, but she knows who she is.
Speaker 3: She's very high up here at Bloomberg in the newsroom
Speaker 3: because she's from Pennsylvania. I said, how many people have
Speaker 3: emailed this to you? And she said, my daughter was
Speaker 3: very upset after a softball tournament. All she wanted was
Speaker 3: a wah wah. You know what I did. I made
Speaker 3: sure to find the closest wah wah and put it
Speaker 3: into my GPS and it solved everything. So wahwah, here's everything.
Speaker 3: And Jordan Fitzgerald is a fantastic reporter and we're so
Speaker 3: happy to have her here at Bloomberg writing about woahwah.
Speaker 3: She's wealtheam reporter for Bloomberger. She joins us in the
Speaker 3: Bloomberg Interactive Broker's Studio.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 2: Yes, you will be googled and talked about all day.
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Speaker 3: It's time for Bloomberg Pursuits, where the opener is all
Speaker 3: about the eight Secrets of fancy Hotels. Learn well working
Speaker 3: as a butler at a super uber Lux hotel in Singapore.
Speaker 3: Vvip Did you know what that was, Carol? It's a
Speaker 3: vv ip o.
Speaker 14: You guys are vv oh we love you.
Speaker 3: That's Chris Rouser, the editor of Bloomberg Pursuits. Also joining
Speaker 3: us as Bloomberg Pursuits contributor Brandon Presser. Okay, let's start
Speaker 3: with this. We fly to Singapore in our private jet. Yes, check,
Speaker 3: you have a separate chet come for your other family Okay? Yeah,
Speaker 3: and then you want to go to the fanciest of
Speaker 3: fancy hotels. Chris, what's it called.
Speaker 14: It's called the Raffles in Singapore, and Raffles is a
Speaker 14: legendary hotel more than one hundred years old. It's a
Speaker 14: brand that is now expanding around the world. But The
Speaker 14: original is in Singapore and it's literally a national landmark.
Speaker 14: It sets the bar for service all around the world.
Speaker 2: So by setting the service, and that means what everybody
Speaker 2: gets a butler.
Speaker 14: Well, there's twenty five butlers and they each get twenty rooms.
Speaker 14: So what we did, so we have this thing where
Speaker 14: we send Brandon to work behind the scenes at extremely
Speaker 14: luxury locations. So he's been a ski instructor at Aspen,
Speaker 14: he's been a major d at Nobu, he worked at
Speaker 14: disney World, if.
Speaker 3: You'll recall that one.
Speaker 14: So we go send him behind the scenes to figure
Speaker 14: out the secrets of service at these very very luxury places.
Speaker 14: And there's no place that has a better reputation for
Speaker 14: luxury than the Raffles. So Brandon, who has a bit
Speaker 14: of a personal connection to the Raffles, went to work
Speaker 14: there as a butler.
Speaker 2: That's right, Brandon. I think we have to take it
Speaker 2: back to what two thousand and three, right, because initially
Speaker 2: you kind of wanted to be there.
Speaker 17: Yeah, it was something that I was considering as a
Speaker 17: recent high school graduate, kind of trying to figure out
Speaker 17: what I wanted to do to my career, and I
Speaker 17: thought maybe to pursue a career in hospitality and do
Speaker 17: an internship in a hotel. So I actually applied to
Speaker 17: work at the Raffles i'us Singapore back then, and it
Speaker 17: was a go and I was all said to make
Speaker 17: it happen, and then stars hit and everything kind of
Speaker 17: fell apart. So this was my sliding doors moment where
Speaker 17: it all kind of came back together and I got
Speaker 17: to be an intern in twenty years later.
Speaker 3: Okay, so what happened this time? Twenty years later? COVID
Speaker 3: has hit and now Singapore has over the last twenty
Speaker 3: years become even more luxurious, where people spend, as you argue,
Speaker 3: ten times more than the typical wealthy American. Set the
Speaker 3: scene for us.
Speaker 17: Yeah, you know, I think the Billboard takeaway of my
Speaker 17: experience in Singapore working there is that the new money
Speaker 17: in Asia just powers over the old money in the West.
Speaker 17: When we conceive a luxury and we're thinking about what
Speaker 17: people might be buying, it's a lot of Prata, Gucci's
Speaker 17: your chanel. But the real interesting thing, and the real
Speaker 17: sort of luxury braggadosio is actually cars and seafood. Cars
Speaker 17: are so expensive in Singapore because you have to have
Speaker 17: a special license to get a vehicle, and there's a
Speaker 17: one hundred percent importing tax on the car. So even
Speaker 17: just throwing your carkis down on a table, even if
Speaker 17: it's a Camray, people like, oh my gosh, you own
Speaker 17: a car. Wow, it's more expensive that the house.
Speaker 8: Uh.
Speaker 17: And then it's seafood. That's the ultimate brag, you know,
Speaker 17: having your butler. And this is something that we actually did.
Speaker 17: Had a butler get someone to fish a rare crab
Speaker 17: out of an obscure lake in rural China and have
Speaker 17: a ship to the hotel and cook for thousands and
Speaker 17: thousands of dollars.
Speaker 2: Is this the hairy crab?
Speaker 13: It's the hairy crab?
Speaker 3: Which I had that.
Speaker 2: With my pasta last night.
Speaker 7: What are you guys talking about? Chris?
Speaker 2: As you like I always, you know, the back and
Speaker 2: forth with you know Brandon. I'm sure he goes and
Speaker 2: he comes back with take us to one of your
Speaker 2: favorite parts of this.
Speaker 1: Well.
Speaker 14: You know what I love is so people are splashing
Speaker 14: a lot of money around and where the butler's come
Speaker 14: in is making the magic happen, right, So like so
Speaker 14: I love this example of there was a twelve year
Speaker 14: old kid under twelve who wanted to splash a lot
Speaker 14: of money around. And so the butlers did that. They
Speaker 14: arranged it for him. They arrange for the local doors
Speaker 14: or to stay open late till eleven pm. Come on, kids, kids,
Speaker 14: of course you know it's thrown up. Okay, but he
Speaker 14: did go to Toys r US and just buy a whole
Speaker 14: aisle worth of toys of one hand gesture about six
Speaker 14: of you know, sixty thousand Singaporean dollars worth. I just
Speaker 14: love the idea of this butler making this happen a
Speaker 14: lot of times when you you can get like a
Speaker 14: one on one assignment. So usually normally butlers have like
Speaker 14: twenty rooms, but you can get assigned to one person.
Speaker 14: But that means that you are with them twenty four
Speaker 14: to seven. So if they like text in the middle
Speaker 14: of the night, you got to show up. And these
Speaker 14: things can involve like real hands on work for example
Speaker 14: that you often the butler have to take people on
Speaker 14: tours of the botanical gardens. They have to know all
Speaker 14: these facts about orchids. They babysit children for you, like
Speaker 14: all these Like butlers have to do everything.
Speaker 3: Okay, Brandon, there are some things the butlers will not do.
Speaker 3: There are some things will not go there.
Speaker 17: Yeah, it's a very discreet hotel, I'd say, so anything
Speaker 17: that verges into the bedroom activities zone is pretty taboo
Speaker 17: and they won't help you.
Speaker 5: Out with that.
Speaker 17: So, you know, the butlers were really keen to share all,
Speaker 17: you know, kind of the fun behind the scenes bits
Speaker 17: of all the celebrities that they served, but really there
Speaker 17: was a prudishness that came into play when when it
Speaker 17: came to the sex stuff.
Speaker 3: Well that said, I wasn't joking about the two families thing,
Speaker 3: because one story that you do share from the butlers
Speaker 3: is the fact that sometimes they have to be in
Speaker 3: charge of keeping secret families separate from one another.
Speaker 17: Indeed, there was a man who flew in on his
Speaker 17: private chat and flew in his wife and set her
Speaker 17: up at the hotel, and then all of a sudden
Speaker 17: there was the second private jet and a second wife
Speaker 17: and a second set of chicks that they probably set
Speaker 17: up in a hotel in very different wings of the hotel.
Speaker 17: And never the two shall meet was the on the
Speaker 17: task at hands.
Speaker 7: No family family dinners, yes, no.
Speaker 17: Double family dinner. That guest was particularly interested in the
Speaker 17: casino at Marina bass An. So when the wife was
Speaker 17: wondering why the husband wasn't returning to bed in the evening.
Speaker 17: It was actually because he was gambling and he wasn't
Speaker 17: in either of the room.
Speaker 14: We had a similar anecdote from when Brandon went behind
Speaker 14: the scenes in Vegas, another two family anecdote. And I
Speaker 14: want to say it's the same family, but I bet
Speaker 14: it's not.
Speaker 7: I have to say some of the absurd.
Speaker 17: Go ahead, no, please, I can affirm that it's actually
Speaker 17: a different family, because I do know the identities of
Speaker 17: these two families. Are there different?
Speaker 2: Oh the secrets, you know, the secrets you know, you know,
Speaker 2: we tease this story talking about you know, Coca Cola
Speaker 2: from Indonesia, people bringing in their own washing machine because
Speaker 2: that's how they wanted they're clothes washed or pink toilet paper.
Speaker 17: Yeah, I wanted to play a little bit with the
Speaker 17: idea of name brand. You know, we're all so brand
Speaker 17: conscious and we're you know, thinking in the luxury world
Speaker 17: that it's again you know, the Pratas and the Chanelles,
Speaker 17: but that luxury that brand faciliation really occurs all the
Speaker 17: way down to Coca Cola. There wasn't guests who wanted
Speaker 17: a specific kind of palm sugar in his Coca cola,
Speaker 17: and they only produce that in Indonesia. And there was
Speaker 17: the guests who will only use a certain type of
Speaker 17: washing machine or a certain type of toilet paper, And
Speaker 17: I kind of just love unraveling that a little bit
Speaker 17: and playing with more unconventional brands.
Speaker 14: That coke thing is real. People love regional cokes. I
Speaker 14: will say, I love the the person who would only
Speaker 14: eat bright red peekaboo pears, which are crossbread on a
Speaker 14: specific farm in New Zealand. That's the level of neediness
Speaker 14: that I aspire to.
Speaker 9: Good luck.
Speaker 2: Do you know my husband likes Mexican coke.
Speaker 7: And I'll be like, what are you talking about?
Speaker 3: Easy to get relatively at least in the New York
Speaker 3: City area.
Speaker 10: Yeah, exactly.
Speaker 7: I have to say I was a little also.
Speaker 2: I thought it was interesting how you are Butler's kind
Speaker 2: of among yourself. We're sharing information, data mining on the guests.
Speaker 2: I mean you were constantly sharing, like what what they did,
Speaker 2: were they, you know, sleeping on one side of the bed.
Speaker 2: I mean, all of that stuff spoke to kind of
Speaker 2: the high level of care you guys were doing.
Speaker 17: That was actually one of the most incredible things with
Speaker 17: sitting in this all hands meeting where they have the roster,
Speaker 17: you know, like the great roster of every single guest,
Speaker 17: and we actually went through every single guest staying at
Speaker 17: the hotel and discussed all of their preferences if they
Speaker 17: are left handed, what side of the bed based sleep on,
Speaker 17: what's the preferred language, and we were trying to figure
Speaker 17: out how to enhance the stay. Oh, this guest talks
Speaker 17: about how he loves book Let's get him a bookmark.
Speaker 17: This guest loves gardening, Let's buy a book about Singapore
Speaker 17: and plant It was, it was truly fascinating.
Speaker 2: So when you guys do that stuff just real quickly,
Speaker 2: I mean you just you eat the cost or they
Speaker 2: eat the cost, right I assume in terms of the catering.
Speaker 17: Yeah, so yeah, it is. It is sort of in
Speaker 17: this well the coffer that we did in too, and
Speaker 17: and you know, we kind of buy different things. It's
Speaker 17: a lot of times it's it's food and beverage from
Speaker 17: the hotel, but it's it's it's fun that it kind
Speaker 17: of veers into gossips sometimes, like someone had the particularly
Speaker 17: dirty room, so they need to call into reinforcement, and
Speaker 17: that's that's the more fun part. It's like gossiping about
Speaker 17: what people see in the room.
Speaker 3: Okay, Well, speaking of food and drink, the Raffles is
Speaker 3: just a legendary hotel. This is a place where you know,
Speaker 3: Rudyard Kipling wrote The Jungle Book, Joseph Conrad, Elizabeth Taylor
Speaker 3: were legendary were you know, had stayed there. The Singapore
Speaker 3: Sling was also invented there. What is it and how
Speaker 3: much do they earn from this drink?
Speaker 17: Yeah? So I think maybe even more famous than the
Speaker 17: refels to Singapore is the Singapore Sling. So it was
Speaker 17: invented at a hotel about over one hundred years ago,
Speaker 17: and it was actually a way for women to consume
Speaker 17: alcohol in public because at that time it was forbidden.
Speaker 17: So it's a very colorful, gin based drink that really
Speaker 17: just looks like a juice and frankly, it tastes like
Speaker 17: a juice and it's really dangerous because it's about thirty
Speaker 17: three thirty four percent alcohol and it's super famous for tourists.
Speaker 17: They line up by they open at noon and there's
Speaker 17: a big line by eleven thirty and people come in.
Speaker 17: They spend about thirty to forty minutes, they have one
Speaker 17: or two slings and they go and they make about
Speaker 17: ten million dollars America US dollars in profit on that
Speaker 17: drink in one year.
Speaker 2: That is crazy, that's Unbelievablenks Well, there are so much
Speaker 2: rich stuff in this story and there's more in the
Speaker 2: Pursuit section this weekend. So grateful that you could spend
Speaker 2: some time with us and our thanks to Chris as well,
Speaker 2: the editor of Bloomberg Pursuits, of course, Chris Rouser, along
Speaker 2: with Bloomberg Pursuits contributor Brandon Presser.
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