WEBVTT - Bloomberg Businessweek Weekend - February 23rd, 2024 0:00:01.360 --> 0:00:05.720 This is Bloomberg Business Week Inside from the reporters and 0:00:05.920 --> 0:00:09.480 editors who bring you America's most trusted business magazine, plus 0:00:09.560 --> 0:00:13.680 global business, finance and tech news. The Bloomberg Business Week 0:00:13.720 --> 0:00:18.680 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:20.079 --> 0:00:23.000 Hi, everyone, Welcome to the Bloomberg Business Wee Weekend Podcast. 0:00:23.120 --> 0:00:25.919 Well earning season, yeah, almost over in the United States, 0:00:25.960 --> 0:00:28.400 and yet one of the biggest of the reporting season 0:00:28.880 --> 0:00:32.640 reported this past week. We're talking about Nvidia, the artificial 0:00:32.680 --> 0:00:36.240 intelligence semiconductor darling with the third highest market cap waiting 0:00:36.320 --> 0:00:37.800 in the S and P five hundred. 0:00:38.000 --> 0:00:39.680 It's also the top gainer in the S and P 0:00:39.800 --> 0:00:42.120 five hundred this year, after taking the top spot in 0:00:42.159 --> 0:00:45.040 twenty twenty three, when it returned close to two hundred 0:00:45.040 --> 0:00:48.280 and forty percent, and Vidia a big reason behind the 0:00:48.320 --> 0:00:50.720 record run we've seen in the broader US equity market. 0:00:50.800 --> 0:00:53.680 So yes, we have more on Nvidia's eye popping sales 0:00:53.680 --> 0:00:55.360 forecast in just a moment. 0:00:55.480 --> 0:00:57.560 Also this past week, we got minutes from the fed's 0:00:57.600 --> 0:01:00.680 latest gathering in late January. What it showed that most 0:01:00.720 --> 0:01:03.520 FED officials remained more worried about the risk of cutting 0:01:03.560 --> 0:01:06.760 interest rates too soon, rather than keeping them higher for 0:01:06.880 --> 0:01:09.479 too long and damaging the US economy. 0:01:09.720 --> 0:01:12.240 Now, US economy is one that continues to surprise to 0:01:12.280 --> 0:01:15.120 the upside and prop up global growth. It's also an 0:01:15.160 --> 0:01:18.360 economy where Americans are moving around. We get into how 0:01:18.360 --> 0:01:21.160 those demographic shifts over the last four years could affect 0:01:21.160 --> 0:01:25.520 this year's US election, Plus Maryland Comptroller Brook Leerman on 0:01:25.600 --> 0:01:28.040 the good and the bad of her state's economy. 0:01:28.080 --> 0:01:30.600 All of that to come. We begin with Nvidia earnings 0:01:30.640 --> 0:01:33.919 out this past week, and Nvidia predicted another massive sales 0:01:33.920 --> 0:01:36.360 gain for the current quarter, adding fresh momentum to a 0:01:36.360 --> 0:01:39.360 stock rally that's already made at the world's most valuable 0:01:39.440 --> 0:01:39.920 chip maker. 0:01:40.200 --> 0:01:42.720 Investors continue to bet that the company will remain the 0:01:42.760 --> 0:01:46.160 prime beneficiary of an AI computing boom. We got more 0:01:46.200 --> 0:01:49.120 on the quarterly results and outlook with Bloomberg News US 0:01:49.160 --> 0:01:52.800 semiconductor and networking reporter Ian King and Bloomberg Intelligence senior 0:01:52.840 --> 0:01:54.760 tech industry analyst Kunjohn Sabani. 0:01:54.960 --> 0:01:57.440 I just spoke with a fund manager on this very topic, 0:01:57.920 --> 0:02:00.880 and what he said was or all of the stuff 0:02:00.920 --> 0:02:04.480 that Abigail has just beautifully told you about and explained, 0:02:04.520 --> 0:02:08.320 all of these multiples and numbers doesn't mean anything. What 0:02:08.639 --> 0:02:12.680 Nvidia did was firm up in everybody's mind this is 0:02:12.760 --> 0:02:15.880 real and this is going to continue. And as soon 0:02:15.919 --> 0:02:19.240 as that became clear, as soon as they started talking 0:02:19.240 --> 0:02:22.160 and Jensen Wang, the CEO, had answers for a number 0:02:22.200 --> 0:02:26.160 of the lingering concerns that were out there. We're after 0:02:26.200 --> 0:02:27.240 the races, and. 0:02:27.800 --> 0:02:29.120 The rally was back on. 0:02:29.639 --> 0:02:32.880 Yeah, it's kind of remarkable because we really did bounce around. Kunjohn, 0:02:32.919 --> 0:02:35.680 come on in. As you've gone through the release, had 0:02:35.720 --> 0:02:39.240 time to digest what we got from nvidio. What to 0:02:39.400 --> 0:02:41.640 you is so remarkable about the results of the outlook 0:02:41.639 --> 0:02:43.440 In your view, I. 0:02:43.440 --> 0:02:46.080 Think it's similar in what lines to what Ian said. 0:02:46.200 --> 0:02:48.280 It was not the magnitude of the beat that was 0:02:48.320 --> 0:02:52.360 sort of expected. It was the quality of the report, 0:02:52.480 --> 0:02:57.480 especially the sustainability of the demand. Look, demand didn't just 0:02:57.639 --> 0:03:01.080 increase from the large cloud players, which we expect. Demand 0:03:01.120 --> 0:03:03.919 is strong from enterprises. Demand is so strong from new 0:03:03.960 --> 0:03:08.000 avenues like new verticals, automotive healthcare, demand is strong from 0:03:08.040 --> 0:03:10.640 the hyper scalers, and now you have these so and 0:03:11.120 --> 0:03:14.640 entities coming in also buying. So the broad based demand 0:03:14.639 --> 0:03:17.360 and the health of it and the sustainability what was 0:03:17.440 --> 0:03:19.200 really drove the investor confidence. 0:03:19.720 --> 0:03:21.640 Hey, you know where I'm going with this because I 0:03:21.639 --> 0:03:24.480 ask you this every quarter every few months, and it's 0:03:24.480 --> 0:03:27.239 about the basic of basics of economics. 0:03:27.240 --> 0:03:27.520 Here. 0:03:27.760 --> 0:03:31.120 When there is something attractive in the business world, you 0:03:31.160 --> 0:03:32.799 have a lot of companies run after it. And I'm 0:03:32.800 --> 0:03:35.880 wondering about Nvidia's mote here. To what extent do they 0:03:35.880 --> 0:03:38.920 have a moat and is it established around what it 0:03:38.960 --> 0:03:42.600 does for AI in the AI world, And to what 0:03:42.640 --> 0:03:45.440 extent are competitors able to actually catch up here? 0:03:46.520 --> 0:03:49.360 Yeah, two things to answer that. I think overall growth 0:03:49.400 --> 0:03:51.920 is going to lift all boats for if the projections 0:03:51.920 --> 0:03:54.960 that we've seen from people like Jensen and people like 0:03:55.040 --> 0:03:59.000 Lisa suet MD a true. Everybody's going up in the 0:03:59.000 --> 0:04:00.880 short term on this. Don't need to worry about the 0:04:00.920 --> 0:04:04.720 competitive dynamics long term. There are clearly companies who are 0:04:04.760 --> 0:04:08.000 looking at in Video selling chips multiple tens of thousands 0:04:08.040 --> 0:04:10.000 of dollars in saying I want some of that action, 0:04:10.280 --> 0:04:12.640 and they're going after it. But this is something that 0:04:12.720 --> 0:04:14.560 in Video have been working on for several years. And 0:04:14.600 --> 0:04:17.080 guess what, They're going to have a new architecture, a 0:04:17.120 --> 0:04:20.560 new chip coming this year and guess what. The rate 0:04:20.640 --> 0:04:24.600 at which they're introducing new technology is increasing. So not 0:04:24.640 --> 0:04:28.559 only are they anticipating competition, but they're doing something about 0:04:28.600 --> 0:04:29.760 it already. 0:04:29.600 --> 0:04:31.320 Well, and I want to kind of get into that. 0:04:31.360 --> 0:04:32.719 First of all, I want to show a chart for 0:04:32.720 --> 0:04:35.279 those who are watching on TV and on YouTube and 0:04:35.360 --> 0:04:39.440 on our streaming service. But the Nvidia Data center revenue. 0:04:39.480 --> 0:04:42.240 I mean the chart, it's just astronomical in terms of 0:04:42.240 --> 0:04:43.400 how much it has taken. 0:04:43.160 --> 0:04:45.000 Off just from last year. 0:04:45.080 --> 0:04:48.279 It's like mind blowing, and I do wonder Ian, let 0:04:48.320 --> 0:04:50.560 me go this to you first. I mean, the question is, 0:04:51.160 --> 0:04:54.320 you know, how long can they continue at this pace 0:04:54.560 --> 0:04:57.280 in the face of growing competition. 0:04:58.800 --> 0:05:02.000 I mean, again, I can point you to the explanation 0:05:02.080 --> 0:05:04.000 that I got from somebody who's put the money to 0:05:04.040 --> 0:05:06.839 work in this stock, and they said, what's exciting them 0:05:07.160 --> 0:05:11.120 is the fact that so many sectors of the economy 0:05:11.160 --> 0:05:13.279 are now embracing it. Think of it as like an 0:05:13.400 --> 0:05:16.279 app store explosion of the Apple app store explosion of 0:05:16.320 --> 0:05:19.240 ten years ago. We've got the tools, we've got the platform. 0:05:19.320 --> 0:05:21.479 Now let's go out there and make use of it. 0:05:21.560 --> 0:05:24.400 And that is happening, and that if it is true, 0:05:24.400 --> 0:05:27.360 and it does manifest itself at the rate that we're 0:05:27.360 --> 0:05:30.719 seeing it happening right now, will sustain this demand for 0:05:30.800 --> 0:05:31.680 the infrastructure. 0:05:31.920 --> 0:05:34.320 Konjin, I heard you earlier on TV about how you 0:05:34.360 --> 0:05:37.040 believe Nvidia deserves the higher multiple that it trades at. 0:05:37.120 --> 0:05:40.240 Is that because of something like that data center revenue 0:05:40.240 --> 0:05:42.400 growth and how it's expected to continue. 0:05:43.440 --> 0:05:47.400 Absolutely, I mean, right now, the biggest opportunity in semiconductors AI. 0:05:47.520 --> 0:05:51.080 Right there's only one player having about ninety five percent 0:05:51.160 --> 0:05:53.920 or more share, So they have the best revenue growth. 0:05:54.480 --> 0:05:57.960 Second margins when you look at there right now, have 0:05:58.120 --> 0:06:02.440 software like gross margins, something we don't see often in semicaractors. 0:06:02.520 --> 0:06:05.279 I mean, if just to put in perspective, their next 0:06:05.360 --> 0:06:09.560 year's operating income is going to be larger than Intel's revenue. 0:06:10.040 --> 0:06:12.960 I mean, one of the largest semicinector companies that we know, 0:06:13.080 --> 0:06:15.320 right so that tells you they're not just growing, they're 0:06:15.360 --> 0:06:19.920 growing profitably. And the competitive landscape again said right now 0:06:20.080 --> 0:06:22.960 there is only one other player, so for the near term, 0:06:23.200 --> 0:06:26.839 they have the benefit of reaping all the AI spending, 0:06:26.880 --> 0:06:29.160 which again is going up across the board. 0:06:29.200 --> 0:06:31.120 Well, that's what I wanted to hit on. Kunjohn's total 0:06:31.160 --> 0:06:33.440 addressable market here. How do you think about that at 0:06:33.480 --> 0:06:36.480 Bloomberg Intelligence, Like, who's out there that still doesn't have 0:06:36.520 --> 0:06:38.440 these products? And to what extent are they going to 0:06:38.480 --> 0:06:41.040 be upgrading products as in Vidia comes out with new products. 0:06:42.400 --> 0:06:44.760 I mean, everyone has the product. But what we are 0:06:44.800 --> 0:06:49.159 seeing is the total IT capex right is rising twenty 0:06:49.200 --> 0:06:53.039 twenty four from what the cloud customers have announced. They're 0:06:53.040 --> 0:06:57.000 increasing their total spend by almost thirty percent at the midpoint. Now, 0:06:57.120 --> 0:07:00.960 within this spend, the portion of dollars going to AI 0:07:01.200 --> 0:07:04.359 is increating exponentially, So you don't have you have the 0:07:04.400 --> 0:07:07.159 pile growing, the portion of AI within the pile growing, 0:07:07.440 --> 0:07:11.560 and right now it's all the only one company monetizing 0:07:11.600 --> 0:07:12.960 hand over fist is Nvidia. 0:07:14.240 --> 0:07:17.760 Well, okay, so let's go a little bit deeper into competition, 0:07:17.880 --> 0:07:20.320 Y and I mean it's coming. You talk to us 0:07:20.360 --> 0:07:22.800 about this every time you come on with us, AMD 0:07:22.920 --> 0:07:25.480 coming out with a rival AI chip. Intel is working 0:07:25.520 --> 0:07:28.520 on it, and videos top customers who are so important 0:07:28.520 --> 0:07:30.880 in terms of their revenue growth, they're working on things too. 0:07:31.280 --> 0:07:33.280 I mean, you have a story to today about Intel 0:07:33.320 --> 0:07:36.320 and Microsoft linking up, and I feel like you know, 0:07:36.440 --> 0:07:38.760 frenemies within the tech industry, like people are trying to 0:07:38.800 --> 0:07:41.960 figure out their way forward. I guess my point bottom 0:07:42.040 --> 0:07:46.200 line is competition, though, is coming here for n video. 0:07:46.400 --> 0:07:49.000 But will the market be massive enough that it just 0:07:49.040 --> 0:07:49.960 doesn't matter. 0:07:49.720 --> 0:07:55.400 Ian That's absolutely a possibility. The other thing to think 0:07:55.440 --> 0:07:59.720 about as well is from a technical perspective. For twenty years, 0:08:00.080 --> 0:08:03.400 the whole of the data center industry had every incentive 0:08:03.480 --> 0:08:07.920 to replace Intel. Intel was charging you know, an armor 0:08:07.960 --> 0:08:10.480 a leg for its server chips. They had every incentive 0:08:10.520 --> 0:08:12.280 to go out there and replace it, and they couldn't 0:08:12.360 --> 0:08:16.760 because guess what, this is difficult. Intel fell away from 0:08:17.360 --> 0:08:20.960 that edge. Nvidia has replaced it in many respects with 0:08:21.000 --> 0:08:24.280 a newer technology. Everybody's got every incentive to try and 0:08:24.320 --> 0:08:27.360 knock them off the pitch, and they will absolutely try. 0:08:28.320 --> 0:08:31.200 But right now, the pace that this company is moving, 0:08:31.200 --> 0:08:35.600 at the resources it has, and importantly how widely it's 0:08:35.600 --> 0:08:39.000 been deployed already makes it very difficult for anybody to 0:08:39.480 --> 0:08:42.360 try and replace it with software, with chips, or with 0:08:42.880 --> 0:08:44.599 the other infrastructure that goes around it. 0:08:45.120 --> 0:08:48.400 Kun John help can textualize this moment in the history 0:08:48.400 --> 0:08:51.320 of technology right now, because I've heard some analysts compare 0:08:51.360 --> 0:08:55.320 this to okay, certain like unleashing of the Internet, the 0:08:55.360 --> 0:08:57.200 beginning of the dot com bubble back in the mid 0:08:57.320 --> 0:09:00.760 nineteen nineties here and comparing this to Americans did get 0:09:00.760 --> 0:09:04.920 widespread access to the Internet and what we saw built 0:09:04.960 --> 0:09:07.720 in Silicon Valley after that. How do you think about 0:09:07.760 --> 0:09:10.079 what's happening within video, what's happening with AI and the 0:09:10.120 --> 0:09:11.440 broader context. 0:09:12.760 --> 0:09:15.600 I think I would the analogy of sort of an 0:09:15.600 --> 0:09:18.520 iPhone moment would be appropriate. You know, when iPhones and 0:09:18.520 --> 0:09:22.719 smartphones came up. When you think of adoption and penetration, right, 0:09:22.800 --> 0:09:26.760 businesses earlier we're thinking, oh, we should have a mobile strategy, right, 0:09:26.800 --> 0:09:30.199 we should have a mobile vehicle to get to customers. Eventually, 0:09:31.080 --> 0:09:33.240 you if you were a business who did not have 0:09:33.320 --> 0:09:36.480 a mobile strategy, that would seem insane. So I think 0:09:36.520 --> 0:09:39.480 that's something what we are seeing here right now jen 0:09:39.520 --> 0:09:42.440 ai NA still is sort of a sexy thing. We 0:09:42.480 --> 0:09:45.920 would if this demand does have legs under it, we 0:09:45.920 --> 0:09:48.160 should see it go to a point where it just 0:09:48.200 --> 0:09:50.560 becomes the norm on how you do business. 0:09:50.960 --> 0:09:52.920 Yeah, I kind of was thinking about that this morning, right, 0:09:52.960 --> 0:09:55.080 I remember doing a primer I'm going to date myself 0:09:55.120 --> 0:09:57.240 on like what is the Internet but this whole idea 0:09:57.360 --> 0:09:59.760 right before everybody had a mobile site. We talked about 0:09:59.800 --> 0:10:03.040 how I everybody had to have their own online site. 0:10:03.080 --> 0:10:04.640 I mean, do you agree, Ian, that's kind of how 0:10:04.640 --> 0:10:07.160 we need to think about the ramp up in terms 0:10:07.160 --> 0:10:12.000 of this kind of next level generative machine learning, artificial intelligence, 0:10:12.160 --> 0:10:14.480 that everybody's going to have some sort of exposure. 0:10:15.280 --> 0:10:16.679 I think you have to think about it in a 0:10:17.120 --> 0:10:20.640 microway from your own personal life as a resident of 0:10:20.679 --> 0:10:23.800 a big city. Would you pay ten dollars twenty dollars 0:10:23.880 --> 0:10:27.080 a month to never drive your own car in the 0:10:27.080 --> 0:10:29.080 traffic and to have that taken care of you buy 0:10:29.080 --> 0:10:34.640 a machine? Probably yes, right, yeah, So then you multiply 0:10:34.720 --> 0:10:37.280 that by all of the megacities around the world of Tokyo, 0:10:37.440 --> 0:10:40.240 the Souls, the Shanghais, all of those people who live 0:10:40.280 --> 0:10:43.480 in that kind of city paying ten twenty to semic 0:10:43.480 --> 0:10:46.320 conductors needed to support those vehicles that are driving themselves. 0:10:46.360 --> 0:10:48.120 And you've got a big number already. And that's just 0:10:48.160 --> 0:10:50.800 one sector. And that is the kind of thinking I 0:10:50.840 --> 0:10:53.080 think that some investors are sort of putting to play 0:10:53.120 --> 0:10:55.600 when they look at what the potential for this kind 0:10:55.600 --> 0:10:57.520 of thing is. That's just one area of transport. There 0:10:57.520 --> 0:10:58.920 are many others obviously. 0:10:59.080 --> 0:11:01.440 All right, real quicklyise, My producers are going to kill me. 0:11:01.520 --> 0:11:04.320 But five seconds first, Kujohn to you. Are we being 0:11:04.520 --> 0:11:05.600 irrationally exuberant? 0:11:05.679 --> 0:11:05.800 Yes? 0:11:05.880 --> 0:11:06.080 Or no? 0:11:06.679 --> 0:11:09.040 When it comes to no, Ian. 0:11:09.280 --> 0:11:12.479 Being exuberant, whether it's irrational or not, who can say? 0:11:12.840 --> 0:11:14.000 All right, well done, well done. 0:11:14.000 --> 0:11:15.480 I'm not going to get in trouble. All right, guys, 0:11:15.520 --> 0:11:17.959 thank you so much. Always appreciate it. Ian King, US 0:11:17.960 --> 0:11:21.000 semiconductor and networking reporter at Bloomberg News out there in 0:11:21.040 --> 0:11:23.760 San Francisco. And of course cou John Sabani, He's senior 0:11:23.800 --> 0:11:27.319 semi conductor analyst at Bloomberg Intelligence. He's in our San 0:11:27.360 --> 0:11:30.319 Francisco bureau. Quick check on shares of Nvidia, folks that 0:11:30.320 --> 0:11:32.959 are up fifteen percent. Coming up the other side of 0:11:33.000 --> 0:11:35.960 the market, ev makers Rivin and Lusen both out with 0:11:36.000 --> 0:11:39.439 earnings last night, both disappointing and both tumbling. 0:11:40.520 --> 0:11:44.040 You're listening to the Bloomberg Business Week podcast. Catch us 0:11:44.080 --> 0:11:47.319 live weekday afternoons from two to five pm. Easter Listen 0:11:47.360 --> 0:11:49.520 on Apple card Play and ed Broight Auto with a 0:11:49.559 --> 0:11:52.160 Bloomberg Business app or watch us live on. 0:11:52.040 --> 0:11:56.880 YouTube with the South Carolina Republican primary and focus this weekend. 0:11:57.000 --> 0:11:59.680 The US is now bracing itself for a potential rematch 0:11:59.720 --> 0:12:03.600 of the twenty twenty presidential election. A lot has changed 0:12:03.720 --> 0:12:07.360 since now and four years ago. The pandemic's economic, lifestyle 0:12:07.400 --> 0:12:10.240 and work disruption set millions of middle class Americans on 0:12:10.280 --> 0:12:13.520 the move. A record setting sixteen point one million US 0:12:13.520 --> 0:12:15.920 residents moved to another state in twenty twenty one and 0:12:15.960 --> 0:12:20.080 twenty twenty two combined. That's according to Census Bureau estimates. 0:12:19.760 --> 0:12:22.880 And not just that Carol. By this November's presidential election, 0:12:23.280 --> 0:12:26.920 around thirty million Americans, the equivalent of the population of Texas, 0:12:27.200 --> 0:12:29.520 will have moved to a different state since twenty twenty. 0:12:29.760 --> 0:12:33.160 Even if migration recedes to a pre pandemic pace, that 0:12:33.240 --> 0:12:36.560 burst of migration, especially in key swing states, is set 0:12:36.600 --> 0:12:39.320 to be a powerful force in the electoral process. 0:12:39.440 --> 0:12:41.720 Thankfully, we have people here at Bloomberg who can crunch 0:12:41.760 --> 0:12:43.960 the numbers to tell us the story of how demographic 0:12:44.000 --> 0:12:46.959 shifts over the last four years could affect this year's 0:12:47.040 --> 0:12:51.400 presidential election outcome. Sean Donna is bloomberg new senior economics writer. 0:12:51.559 --> 0:12:53.280 He joined us from the Nation's Capital. 0:12:53.400 --> 0:12:55.440 We set out in this story to think about how 0:12:55.520 --> 0:12:57.840 that might affect the election. And when you do that, 0:12:57.960 --> 0:13:01.400 you really start very quickly zeroing in on six or 0:13:01.400 --> 0:13:04.800 seven states, the kind of battleground or swing states that 0:13:04.840 --> 0:13:07.960 we're thinking about this year. And when you start looking 0:13:08.000 --> 0:13:12.160 at the state level population changes there you see some 0:13:12.240 --> 0:13:13.160 really interesting things. 0:13:13.240 --> 0:13:15.400 Well, one of the states that you focused on was 0:13:15.440 --> 0:13:17.880 the state of Wisconsin. So tell us what you found 0:13:18.080 --> 0:13:21.240 while reporting on the state of Wisconsin. Who you spoke to, 0:13:21.400 --> 0:13:24.560 the companies that are employing people, in attracting people to 0:13:24.600 --> 0:13:26.840 the area, and then of course what that does to 0:13:26.880 --> 0:13:27.760 the demographics. 0:13:28.360 --> 0:13:32.120 Absolutely, look, as we were crunching these numbers, Wisconsin very 0:13:32.160 --> 0:13:35.080 quickly stood out as a place that we should be 0:13:35.080 --> 0:13:38.440 looking at more deeply, and one place in Wisconsin in particular, 0:13:38.480 --> 0:13:42.560 and that's Dane County, Wisconsin. That's the fastest growing county 0:13:42.559 --> 0:13:46.440 in Wisconsin. Already in the last three years, it has 0:13:46.480 --> 0:13:50.400 added twenty eight thousand to almost twenty nine thousand people. 0:13:50.880 --> 0:13:56.120 And that's significant because in twenty twenty Joe Biden won 0:13:56.160 --> 0:13:59.360 the state of Wisconsin but just over twenty thousand votes. 0:14:00.160 --> 0:14:05.200 The population change in Wisconsin in Wisconsin's Dane County alone 0:14:05.840 --> 0:14:10.000 is already potentially significant in terms of the twenty twenty 0:14:10.040 --> 0:14:15.079 four election. What we also signed Wisconsin more broadly is 0:14:15.120 --> 0:14:17.160 a story that you see in some other swing states, 0:14:17.200 --> 0:14:21.000 and that is blue counties growing more rapidly than red 0:14:21.080 --> 0:14:24.040 counties in the state. A lot of the red counties 0:14:24.080 --> 0:14:27.400 are rural counties, interest to have an older population and 0:14:27.440 --> 0:14:29.720 so on. But when you zero in on Dane County, 0:14:30.160 --> 0:14:32.920 what we found there on the ground was really fascinating. 0:14:32.920 --> 0:14:37.360 And then what was really driving this population change is 0:14:37.480 --> 0:14:41.040 kind of this economic transformation of a place. And when 0:14:41.080 --> 0:14:43.560 you zero in a little bit more, we found this 0:14:43.640 --> 0:14:47.960 one company, Epic Systems, which does healthcare records, which has 0:14:48.000 --> 0:14:51.520 been driving a lot of the population growth in Dane County. 0:14:51.880 --> 0:14:56.400 Every day on their campus in Verona, Wisconsin, just south 0:14:56.400 --> 0:15:00.720 of Madison, there's thirteen thousand people, almost teen thousand people 0:15:00.720 --> 0:15:02.840 who show up for work every day, and that was 0:15:02.880 --> 0:15:06.880 eight thousand people five years ago, and the median age 0:15:06.880 --> 0:15:09.640 of those people is twenty six. A lot of them 0:15:09.680 --> 0:15:12.360 have come from out of states, the recent college graduates, 0:15:12.760 --> 0:15:16.240 and if you look across the country, that's a demographic 0:15:16.320 --> 0:15:19.440 that has tended to vote for Democrats in recent elections, 0:15:19.840 --> 0:15:24.280 and that is interesting in the broader context of Wisconsin, 0:15:24.320 --> 0:15:27.440 because Dane County is a big pot of Democratic votes 0:15:27.920 --> 0:15:31.160 in Wisconsin. Seventy five percent of the county voted for 0:15:31.680 --> 0:15:35.280 Joe Biden in twenty twenty, and that's only going to grow, 0:15:35.360 --> 0:15:37.560 and that is good for Democrats. 0:15:37.640 --> 0:15:40.320 Okay, But the point that you make in the story too, though, 0:15:40.400 --> 0:15:44.840 is that this demographic shift is not exclusively good for Democrats. Sean, 0:15:44.880 --> 0:15:48.000 talk a little bit about the demographic shift in terms 0:15:48.000 --> 0:15:50.520 of what it could mean to be an advantage for 0:15:50.720 --> 0:15:52.600 Republicans coming into twenty twenty four. 0:15:53.040 --> 0:15:56.400 Sure, Look, let's let's back out first off. First off 0:15:56.440 --> 0:15:59.600 and say, just because you have a change in the 0:15:59.600 --> 0:16:03.240 populace doesn't mean everyone in that population is voting. Parties 0:16:03.240 --> 0:16:05.160 need to get their voters to turn out, go to 0:16:05.200 --> 0:16:08.840 the polls. People can change their minds. Some of these 0:16:08.880 --> 0:16:13.880 counties have had narrow margins over the years, and so 0:16:14.000 --> 0:16:17.000 a change in population. It's hard to know exactly what 0:16:17.080 --> 0:16:20.880 the impact there will be. But of the seven battleground 0:16:20.920 --> 0:16:23.960 states that we've been thinking about at Bloomberg, stix of 0:16:24.000 --> 0:16:29.280 them saw more increases in blue counties, that is, counties 0:16:29.280 --> 0:16:32.360 that voted for Joe Biden in twenty twenty than in 0:16:32.920 --> 0:16:38.760 red counties. Across these seven states, we saw one point 0:16:38.840 --> 0:16:44.320 nine million additional population, and one point two million of 0:16:44.360 --> 0:16:48.560 that additional population is in blue counties. So that should 0:16:48.560 --> 0:16:52.600 be an advantage for Joe Biden. And just so we're 0:16:52.640 --> 0:16:55.960 thinking about the kind of the real electoral impact of this, 0:16:56.120 --> 0:16:59.600 these are seven states that have ninety three electoral college votes. 0:17:01.120 --> 0:17:03.040 They are the places where the election is going to 0:17:03.080 --> 0:17:03.360 be one. 0:17:04.960 --> 0:17:07.920 No, it's fascinating, right if you think about it, because 0:17:08.680 --> 0:17:12.040 you know the way the voting maps have been, you know, 0:17:12.240 --> 0:17:16.119 kind of redrawn. I mean, it's gotten so political on 0:17:16.200 --> 0:17:18.280 both sides of the aisle of I think it's safe 0:17:18.280 --> 0:17:22.440 to say, and it's really kind of skewed in terms 0:17:22.440 --> 0:17:24.280 of the upcoming elections because we still have the electoral 0:17:24.280 --> 0:17:26.360 college because it all plays out. I mean, some would 0:17:26.440 --> 0:17:28.800 argue that we need to just go you vote and 0:17:28.840 --> 0:17:30.600 you just count up the numbers and that's a winner. 0:17:30.600 --> 0:17:32.520 But well, that's what's so funny about this is, like 0:17:32.520 --> 0:17:35.720 we're talking about this, every conversation about the election has 0:17:35.760 --> 0:17:38.440 to be you know, in the context of the electoral college, 0:17:38.480 --> 0:17:41.760 which there's no question that Democrats will likely win the 0:17:41.760 --> 0:17:45.040 popular vote once again, but that doesn't matter at all. 0:17:45.320 --> 0:17:47.399 It comes down to these seven states that Sean mentioned. 0:17:47.520 --> 0:17:50.159 Yeah, it's really fascinating. So I think about, like our audience, 0:17:50.200 --> 0:17:53.479 who's listening and watching at this point. We just had 0:17:53.480 --> 0:17:55.480 a great chart that we showed too in terms of 0:17:55.520 --> 0:17:57.920 the population growth that we're seeing in those swing states 0:17:57.960 --> 0:18:00.760 since twenty twenty. It's in your story, But how do 0:18:00.840 --> 0:18:04.879 you kind of think about our audience who's listening and 0:18:05.040 --> 0:18:07.439 here we are still many months away from the November election, 0:18:07.720 --> 0:18:10.560 but kind of the key takeaways that you guys you 0:18:11.320 --> 0:18:14.560 specifically too, that you took away as you did this process. 0:18:16.520 --> 0:18:18.560 Look, I think one of the key takeaways is a 0:18:18.560 --> 0:18:21.040 lot of the discussions that we're having about this election 0:18:21.160 --> 0:18:24.920 are based on the map in twenty twenty, and it's 0:18:25.040 --> 0:18:28.399 really hard to know how that map has changed in 0:18:28.400 --> 0:18:31.720 the last four years. And population is just one of 0:18:31.720 --> 0:18:37.040 those ways. And so I am thinking about I'm trying 0:18:37.080 --> 0:18:39.159 to think about, you know, what the map is going 0:18:39.200 --> 0:18:43.240 to look like this year and where the big population 0:18:43.400 --> 0:18:46.879 changes are going to have an impact. Georgia looks a 0:18:46.920 --> 0:18:49.840 lot bluer in terms of population that it did in 0:18:49.880 --> 0:18:53.040 twenty twenty. If you thinks atterressed, you know which is 0:18:53.080 --> 0:18:59.240 really interesting. Arizona, Maricopa County, Arizona. Two million people voted 0:18:59.280 --> 0:19:03.480 there in there are three hundred and forty thousand, almost 0:19:03.480 --> 0:19:06.440 three hundred and forty thousand more people in that county 0:19:06.480 --> 0:19:10.639 today than there were in twenty twenty. Just incredible growth 0:19:10.680 --> 0:19:13.600 in that county that was won by Joe Biden by 0:19:13.600 --> 0:19:16.960 an incredibly narrow margin. But it's we're just going to 0:19:16.960 --> 0:19:20.440 have many more people voting there this year. So I think, 0:19:20.560 --> 0:19:24.280 you know, Georgia and Arizona incredibly interesting. Wisconsin have already mentioned. 0:19:24.800 --> 0:19:29.840 Pennsylvania and Michigan get tougher for Joe Biden, narrower, the 0:19:29.880 --> 0:19:35.600 population changes there may not be as overwhelmingly favorable there. 0:19:35.800 --> 0:19:38.760 And then another state that people think about a lot 0:19:38.800 --> 0:19:42.040 as a new battleground state in North Carolina, and a 0:19:42.080 --> 0:19:44.080 lot of that is based on the idea that a 0:19:44.119 --> 0:19:48.440 lot of Blue voters have young college graduates have moved 0:19:48.480 --> 0:19:51.440 into the Raleigh Durham area and other places where we 0:19:51.480 --> 0:19:55.119 have the tech industry really growing rapidly. But what we 0:19:55.240 --> 0:19:58.119 found in terms of the actual data on the ground 0:19:58.160 --> 0:20:00.440 is that a lot of red counties in North Carolina 0:20:00.480 --> 0:20:03.480 have actually been growing as well, and that that growth 0:20:03.640 --> 0:20:07.560 may take may make North Carolina less of a battleground 0:20:08.760 --> 0:20:11.119 than we otherwise think. 0:20:10.440 --> 0:20:15.639 So some advantages for former President Donald Trump, some for 0:20:16.080 --> 0:20:17.320 current President Joe Biden. 0:20:17.359 --> 0:20:20.240 Well, if Trump is the nominee, right, if Trump is 0:20:20.240 --> 0:20:24.080 the nominee, Yeah, absolutely potentially, And then you know, again 0:20:24.280 --> 0:20:28.119 it gets into the question of turnout and uh and 0:20:28.560 --> 0:20:31.600 how you know, how you build up the margins in big, 0:20:31.720 --> 0:20:35.919 big blue areas and whether red counties can can do 0:20:36.000 --> 0:20:38.240 the same, you know. And that was one of the 0:20:38.280 --> 0:20:41.119 most interesting people I met in Wisconsin when I was 0:20:41.119 --> 0:20:43.760 there was a guy called Brandon Maley. He's twenty three 0:20:43.840 --> 0:20:46.439 years old. He's the guy who's in charge of the 0:20:46.480 --> 0:20:50.560 Republican operation on the ground in Dane County. And just 0:20:50.560 --> 0:20:54.080 a reminder, Dane County is an incredibly blue county, and 0:20:54.119 --> 0:20:56.480 he is in a pretty lonely place, but he is 0:20:56.720 --> 0:21:01.280 trying so hard to just try and narrow the gap. 0:21:01.320 --> 0:21:04.840 And he says, if you can just get the margin in, 0:21:05.040 --> 0:21:06.919 if you can get the number of people voting for 0:21:07.080 --> 0:21:09.880 Donald Trump or whoever the Republican nominee is there, from 0:21:09.920 --> 0:21:12.439 twenty three percent of the vote to maybe twenty five 0:21:12.840 --> 0:21:15.600 or twenty six percent of the vote in Dane County. 0:21:16.160 --> 0:21:18.400 He thinks he is really going to help the Republican 0:21:18.480 --> 0:21:21.360 cause across the state of Wisconsin. If you can get 0:21:21.359 --> 0:21:25.400 it up the thirty percent of that county voting for 0:21:25.560 --> 0:21:30.360 Republicans rather than Democrats, well then he thinks that Wisconsin 0:21:30.440 --> 0:21:33.600 becomes a pretty strong red state. So, you know, that 0:21:33.760 --> 0:21:35.880 is the other big takeaway from these things. These small 0:21:35.960 --> 0:21:40.560 margins in relatively small parts of the country could have 0:21:40.600 --> 0:21:42.600 an outsize impact on this year's election. 0:21:42.840 --> 0:21:46.320 Sean, is there a bigger story here that goes beyond 0:21:46.359 --> 0:21:49.520 the twenty twenty four election, a story about migration patterns 0:21:49.560 --> 0:21:53.280 and how easy it is for Americans post pandemic to 0:21:53.400 --> 0:21:56.359 pick up and move across the country because of remote 0:21:56.359 --> 0:22:00.760 work opportunities. Or is this demoker is looking at this 0:22:00.800 --> 0:22:03.800 as like, Okay, this is a one time thing post pandemic, 0:22:03.880 --> 0:22:06.119 you know, the first three years following twenty twenty. 0:22:07.480 --> 0:22:09.560 So I think what happened in the pandemic kind of 0:22:09.600 --> 0:22:14.280 accelerated an existing trend, and that is a real shift 0:22:14.560 --> 0:22:18.320 south in terms of the American economy, and that's a 0:22:18.359 --> 0:22:20.879 shift in population south. You know the fact that we 0:22:21.000 --> 0:22:26.000 have Georgia and Arizona and North Carolina is really rapidly 0:22:26.080 --> 0:22:29.560 growing states in the country, or Texas and Florida if 0:22:29.560 --> 0:22:33.520 we're not talking about swing states per se. You know, 0:22:33.840 --> 0:22:37.359 that is really a sign of how the American economy 0:22:37.400 --> 0:22:40.280 is kind of rebalancing south. We're seeing that in terms 0:22:40.320 --> 0:22:43.760 of manufacturing investment in other areas, and that's going to 0:22:43.800 --> 0:22:48.359 have an impact on not just this election, but future 0:22:48.400 --> 0:22:52.199 elections going forward. That electoral College map could end up 0:22:52.200 --> 0:22:57.159 shifting further south in terms of its center of gravity, 0:22:58.160 --> 0:23:00.119 and you know, that's something that's going to happen and 0:23:00.119 --> 0:23:02.440 in our lifetime, and that's going to have a big 0:23:02.480 --> 0:23:03.679 impact on future election. 0:23:03.960 --> 0:23:06.280 You didn't I don't know if you guys thought about this, 0:23:06.400 --> 0:23:10.720 but independence or moderate candidates? Was there any kind of 0:23:10.720 --> 0:23:12.760 takeaway on that? And just got about a minute left here, Sean. 0:23:13.720 --> 0:23:17.760 Look, I think, and you know, I write about economics. 0:23:17.920 --> 0:23:20.520 I'm not one of our political gurus, but I think 0:23:20.520 --> 0:23:23.200 one of the most fascinating things going on in the 0:23:23.280 --> 0:23:25.400 US electorate right now is a number of people who 0:23:25.440 --> 0:23:30.800 identify as independence of Americans, identify as independence rather than 0:23:30.840 --> 0:23:35.080 as Republicans or Democrats. Independence are really going to be 0:23:35.119 --> 0:23:38.080 a huge part of the story this year. And I 0:23:38.119 --> 0:23:41.680 don't know where they live right now, but they certainly 0:23:41.840 --> 0:23:43.800 are going to be the ones who decide who are 0:23:43.840 --> 0:23:44.480 next president. 0:23:44.920 --> 0:23:48.520 This is a great story that Sean and Christopher Cannon 0:23:48.560 --> 0:23:50.919 put together. I encourage everybody to read this one. Go 0:23:51.040 --> 0:23:53.199 check it out online at Bloomberg dot com because the 0:23:53.280 --> 0:23:57.480 graphics in here absolutely indispensable. You've got to check out 0:23:57.600 --> 0:23:58.640 the story here. 0:23:58.760 --> 0:24:00.480 All right, and you can find that again at Bloomberg 0:24:00.480 --> 0:24:02.240 dot com or check it out on the Bloomberg terminal. 0:24:02.359 --> 0:24:04.800 Carol Master along with Tim Stanovick, you're listening and watching 0:24:04.840 --> 0:24:07.080 Bloomberg Business Week. This is Boomberg. 0:24:12.520 --> 0:24:16.359 You're listening to the Bloomberg Business Week podcast. Listen live 0:24:16.440 --> 0:24:19.600 each weekday starting at two pm Eastern on applecar Play 0:24:19.680 --> 0:24:22.560 and Android Auto with the Bloomberg Business app. You can 0:24:22.560 --> 0:24:25.800 also listen live on Amazon Alexa from our flagship New 0:24:25.880 --> 0:24:29.520 York station. Just say Alexa play Bloomberg eleven thirty. 0:24:30.480 --> 0:24:32.919 Here's some good news. At a mere one point nine percent, 0:24:32.960 --> 0:24:35.560 the state of Maryland has the lowest unemployment rate in 0:24:35.600 --> 0:24:37.960 the entire country, and at more than one hundred and 0:24:37.960 --> 0:24:40.399 eight thousand dollars a year, it's got the highest median 0:24:40.480 --> 0:24:44.119 household income in the US and then there's the not 0:24:44.200 --> 0:24:46.760 so good news. Maryland's economy is growing at a slower 0:24:46.840 --> 0:24:50.480 rate than the US economy and its neighbors Pennsylvania and Virginia, 0:24:50.560 --> 0:24:54.800 and labor force participation has not recovered to pre pandemic levels. 0:24:55.119 --> 0:24:57.240 These figures are highlighted in a report last month from 0:24:57.240 --> 0:24:59.640 the Maryland State Controller's Office, the first report of its 0:24:59.680 --> 0:25:02.520 kind to be released. Let's get to the interview we 0:25:02.600 --> 0:25:05.840 have with us this afternoon, Maryland's Comptroller Brook Leerman. She 0:25:05.960 --> 0:25:09.720 joins us from our Washington DC Bureau Controller. Welcome. It's 0:25:09.720 --> 0:25:11.840 good to have you on the program this afternoon. As 0:25:11.840 --> 0:25:13.639 I mentioned, there are a lot of good numbers in 0:25:13.680 --> 0:25:16.200 the report, but there's also a lot of challenges here. 0:25:16.800 --> 0:25:19.920 Take your biggest challenge, give us your biggest challenge. What 0:25:20.040 --> 0:25:21.399 in here concerns you the most? 0:25:22.440 --> 0:25:23.120 Thank you so much. 0:25:23.160 --> 0:25:23.400 Tim. 0:25:23.440 --> 0:25:26.160 As you said, you know, Maryland is doing so well 0:25:26.200 --> 0:25:28.920 in so many ways, but what we saw in this report, 0:25:29.400 --> 0:25:33.280 through our numbers and analysis as well as roundtables around 0:25:33.320 --> 0:25:36.040 the state, is that our labor force is constrained. You know, 0:25:36.080 --> 0:25:39.800 we have a traditionally very high labor force participation rate 0:25:39.840 --> 0:25:42.280 in Maryland, and we still have a rate that is 0:25:42.359 --> 0:25:46.000 higher than the national average, but we haven't quite recovered 0:25:46.000 --> 0:25:49.680 from COVID, and so some of our economy is really 0:25:49.720 --> 0:25:53.000 constrained in the private sector growth. We're seeing good federal 0:25:53.040 --> 0:25:56.280 sector growth, but the private sector growth is constrained because 0:25:56.359 --> 0:25:59.800 of this labor these labor force challenges. So, you know, 0:26:00.040 --> 0:26:02.600 we were excited to release this report so that our 0:26:02.640 --> 0:26:05.240 policy makers, our governor and others can and can really 0:26:05.240 --> 0:26:07.920 start to tackle these challenges and our economy can continue 0:26:07.920 --> 0:26:08.200 to grow. 0:26:08.359 --> 0:26:12.200 Now, controller what are the biggest challenges in the workforce 0:26:12.359 --> 0:26:15.600 and who is bearing the brunt of the pain here. 0:26:16.960 --> 0:26:18.960 So it's a good question. You know, we are really 0:26:19.240 --> 0:26:22.879 fortunate as a state to have a robust and unique 0:26:22.960 --> 0:26:25.480 set of industries in the state, you know, from federal 0:26:25.520 --> 0:26:30.000 to government to the port to unique biotech and cybersecurity 0:26:30.000 --> 0:26:33.440 and more all across the state, as well as numerous universities. 0:26:33.800 --> 0:26:37.320 What we saw in the data is that women have 0:26:37.480 --> 0:26:41.919 left the workforce at a higher rate in Maryland than nationally, 0:26:42.240 --> 0:26:44.360 So that's something that we're really focused on. 0:26:45.000 --> 0:26:46.040 We also have seen some. 0:26:46.080 --> 0:26:49.159 Health challenges over the years because of the opioid epidemic 0:26:49.200 --> 0:26:52.960 and so and continuing health concerns and so we want 0:26:52.960 --> 0:26:55.600 to make sure that we're focusing gotten there as well. 0:26:56.040 --> 0:26:58.480 And then finally I will say, you know, our population 0:26:58.600 --> 0:27:01.560 growth is so important. You know, when you're talking about 0:27:01.720 --> 0:27:04.000 labor force, it's about you know, the number of people 0:27:04.000 --> 0:27:07.119 both who live in Maryland and are participating. And we 0:27:07.200 --> 0:27:10.560 have seen lower numbers of growth in terms of population 0:27:10.840 --> 0:27:13.480 in the past few years since COVID, and so we 0:27:13.520 --> 0:27:15.680 want to make sure that there's a place for everyone 0:27:15.720 --> 0:27:17.600 in Maryland that they can afford a home, that they 0:27:17.600 --> 0:27:20.040 can send their kids to our great public schools. So 0:27:20.080 --> 0:27:21.520 that's where we're focusing as well. 0:27:21.680 --> 0:27:23.960 Okay, Controller, I want to zero in on one issue 0:27:24.000 --> 0:27:26.679 that you mentioned, it's women leaving the workforce. I was 0:27:26.720 --> 0:27:30.440 really shocked to see the decline of childcare centers in 0:27:30.520 --> 0:27:34.560 this report in the state of Maryland. We are seeing 0:27:34.920 --> 0:27:37.240 that you predict by twenty twenty seven, there will be 0:27:37.280 --> 0:27:40.480 only twenty seven hundred childcare providers in the state, down 0:27:40.520 --> 0:27:44.159 from nearly six thousand in twenty eighteen. I've got two 0:27:44.200 --> 0:27:47.240 little kids. Childcare is front and center for my wife 0:27:47.240 --> 0:27:49.399 and I. How do you fix this in the state? 0:27:49.520 --> 0:27:50.840 Can you do that? As Controller? 0:27:52.000 --> 0:27:54.160 So you know, one of the things about my job 0:27:54.160 --> 0:27:58.520 that I love is that I can partner with our governor, 0:27:59.000 --> 0:28:02.400 you know, with other our General Assembly or Speaker, Senate President. 0:28:02.880 --> 0:28:05.600 So as the Controller, I really serve as the elected 0:28:05.640 --> 0:28:08.359 CFO of the state of Maryland. And this report is 0:28:08.359 --> 0:28:11.840 about identifying some of those challenges so that our General 0:28:11.880 --> 0:28:14.840 Assembly and our governor have the information and can then 0:28:15.040 --> 0:28:19.000 formulate policies to tackle some of those challenges and seize opportunities. 0:28:19.280 --> 0:28:21.760 And this childcare one is a huge one. I'm also 0:28:21.800 --> 0:28:24.879 a mom with two children. I understand the challenge of 0:28:25.200 --> 0:28:28.280 finding childcare, and it is essential that we get it 0:28:28.359 --> 0:28:30.679 right right, that we make sure that there's space in 0:28:30.720 --> 0:28:34.760 our economy for childcare providers of all types, the private settings, 0:28:34.800 --> 0:28:38.560 but also the in home care that many Marylanders and 0:28:38.640 --> 0:28:42.480 many folks who are below meeting income really rely on. 0:28:43.200 --> 0:28:45.160 And so that is certainly a focus of the General 0:28:45.200 --> 0:28:47.960 Assembly and the Governor in fact mentioned it in a 0:28:48.000 --> 0:28:49.680 State of the State of the address this year. 0:28:49.840 --> 0:28:52.240 Do you think it's something that the state can fix 0:28:52.280 --> 0:28:54.480 on its own or do you need the federal government 0:28:54.480 --> 0:28:54.880 to help. 0:28:55.880 --> 0:28:57.960 I think it's going to have to be a partnership. 0:28:58.040 --> 0:29:00.040 You know, we will work with the federal government in 0:29:00.120 --> 0:29:03.760 terms of the childcare block grant program. You know, many 0:29:03.840 --> 0:29:07.480 years ago we changed how we paid in Maryland to 0:29:07.520 --> 0:29:10.440 pay more. In fact, in the Office of the Controller. 0:29:10.680 --> 0:29:14.760 Just this past year, we completely changed how, working with 0:29:14.800 --> 0:29:18.200 the Maryland State Department of Education, how we reimburse childcare 0:29:18.240 --> 0:29:22.040 providers so that we could provide repayments and reimbursements in 0:29:22.040 --> 0:29:25.440 a much more timely fashion. So we're very focused on 0:29:25.520 --> 0:29:28.440 that childcare piece to ensure that women have the opportunities 0:29:28.440 --> 0:29:30.600 that they want to work out of the home. 0:29:31.240 --> 0:29:32.760 I want to switch gears a little bit here, and 0:29:32.800 --> 0:29:35.160 I want to talk about something that's on the top 0:29:35.200 --> 0:29:36.640 of a lot of people's minds right now. 0:29:36.720 --> 0:29:37.760 It is tax season. 0:29:38.440 --> 0:29:40.720 I want to think about your posturing versus some of 0:29:40.720 --> 0:29:43.880 the others around you. For example, vir Junior Governor Glenn 0:29:43.880 --> 0:29:46.840 Youngkin has been of the side of saying that taxes 0:29:46.880 --> 0:29:50.360 are too high yet at state and local levels and 0:29:50.400 --> 0:29:54.480 at the federal level, we're obviously facing massive constraints on budgets. 0:29:54.760 --> 0:29:56.840 How do you think about the tax equation for the 0:29:56.880 --> 0:29:58.040 folks who live in Maryland. 0:29:59.560 --> 0:30:01.760 I think we can never enter into a race to 0:30:01.800 --> 0:30:04.560 the bottom. You know, Maryland and Maryland, we're proud of 0:30:04.560 --> 0:30:08.600 our amazing public schools. I graduated from Maryland public schools. 0:30:08.640 --> 0:30:11.440 My two children are in public schools. We have amazing 0:30:11.480 --> 0:30:15.160 state parks, we have a robust healthcare system, and so 0:30:15.440 --> 0:30:18.240 I would caution us against, you know, entering into any 0:30:18.280 --> 0:30:20.640 sort of race to the bottom. As in terms of 0:30:20.680 --> 0:30:23.200 tax policy, I think what we have to focus on 0:30:23.400 --> 0:30:26.480 is making sure that Marylanders are getting the support that 0:30:26.520 --> 0:30:29.920 they need, that our businesses are able to grow and 0:30:30.040 --> 0:30:32.880 thrive here in the state of Maryland, and that we 0:30:32.960 --> 0:30:36.920 have the labor force available, a well educated, a well 0:30:36.920 --> 0:30:40.400 trained workforce available for employers so that they know that 0:30:40.480 --> 0:30:43.040 they can grow here over the long term. 0:30:43.080 --> 0:30:44.960 Curious about the race to the bottom a little more, 0:30:45.040 --> 0:30:48.920 how do you compete with other states that are participating 0:30:49.080 --> 0:30:51.360 in that race to the bottom, particularly if you're trying 0:30:51.360 --> 0:30:52.240 to build a labor. 0:30:52.040 --> 0:30:54.280 Force well over the long term. 0:30:54.320 --> 0:30:57.040 What you see is, you know, although Marylanders, if you 0:30:57.080 --> 0:31:00.440 look at the age brackets, Marylanders may be moving out 0:31:00.440 --> 0:31:03.680 of state when they're younger, when they're older, we actually 0:31:03.720 --> 0:31:07.920 see you know, the prime work age workforce age Maryland 0:31:08.000 --> 0:31:11.560 people moving into the states. And that's because of our schools, 0:31:11.600 --> 0:31:14.400 It's because of our opportunities, it's because of our housing stock. 0:31:14.800 --> 0:31:18.960 Those are those folks are finding their way to Maryland 0:31:19.040 --> 0:31:22.920 because of its reputation for being such a family supporting state, 0:31:23.120 --> 0:31:25.320 and so you know, that's where we have to focus 0:31:25.400 --> 0:31:28.760 on making sure then that those Marylanders are can find 0:31:28.760 --> 0:31:31.400 the housing that they need. Right, I think where I 0:31:31.440 --> 0:31:34.160 would focus is on making sure that the housing is 0:31:34.200 --> 0:31:37.560 available so that people can grow here, thrive here, and 0:31:37.600 --> 0:31:38.840 then retire here as well. 0:31:39.160 --> 0:31:42.320 Controller I want to talk about federal government employment because 0:31:42.480 --> 0:31:45.680 a relatively large portion of the state compared to other states, 0:31:46.520 --> 0:31:49.440 works for the federal government five point seven percent of 0:31:49.680 --> 0:31:52.400 Maryland total of total Maryland employment compared to one point 0:31:52.480 --> 0:31:56.440 nine percent of total employment nationally. Obviously, that's good for 0:31:56.480 --> 0:31:59.440 stability because these government jobs are stable. But I'm wondering 0:31:59.440 --> 0:32:02.840 what the down sides are of having so many government workers. 0:32:02.920 --> 0:32:05.600 Since those jobs are so stable, doesn't mean the working 0:32:05.640 --> 0:32:08.360 population doesn't necessarily have the same rate of people going 0:32:08.400 --> 0:32:11.240 and starting their own businesses of entrepreneurship. Talk to us 0:32:11.240 --> 0:32:11.959 a little bit about that. 0:32:12.920 --> 0:32:15.160 Sure, you know, we haven't seen that in Maryland. We're 0:32:15.280 --> 0:32:18.680 very fortunate to have I think this high federal employment, 0:32:19.400 --> 0:32:21.960 although it sometimes does get a little dicey when the 0:32:21.960 --> 0:32:25.560 federal government might shut down, but you know, for the 0:32:25.560 --> 0:32:27.800 most part, it's a real boom to Maryland, and we're 0:32:27.840 --> 0:32:31.760 really excited to be welcoming the FBI headquarters to Maryland 0:32:31.760 --> 0:32:34.840 in the coming years because we have such a robust 0:32:36.160 --> 0:32:40.200 series of research universities in the state as well, including 0:32:40.240 --> 0:32:43.000 of course JOHNS Hopkins, the University of Maryland System and 0:32:43.080 --> 0:32:47.959 more Morgan State. We have a number of entrepreneurs and 0:32:48.040 --> 0:32:51.120 ideas and sort of that's that are coming out of 0:32:51.120 --> 0:32:56.520 those universities. We see enormous tech transfer possibilities. We also 0:32:56.680 --> 0:32:59.640 are really fortunate to have, you know, a large number 0:32:59.640 --> 0:33:02.440 of immig grants in the state of Maryland, and we 0:33:02.480 --> 0:33:05.520 see a number of immigrants who are great entrepreneurs opening 0:33:05.600 --> 0:33:06.920 businesses in the state as well. 0:33:07.840 --> 0:33:10.960 Com Schuler, with the type of fighting a few hill 0:33:11.120 --> 0:33:13.760 that we've been seeing coming out of Congress, do you 0:33:13.920 --> 0:33:16.320 share a concern with so many federal workers being in 0:33:16.360 --> 0:33:19.120 Maryland of a risk of a government shut down. 0:33:20.920 --> 0:33:24.960 Absolutely, you know, it's for so many reasons. A government 0:33:24.960 --> 0:33:30.840 shut down is irresponsible and challenging, you know, certainly globally, but. 0:33:31.040 --> 0:33:32.600 Here in Maryland it is as well. 0:33:32.920 --> 0:33:35.240 You know, those workers are having to go to work 0:33:35.280 --> 0:33:38.520 and they're not getting paid, or they're not working and 0:33:38.560 --> 0:33:42.440 they're not getting paid. It's incredibly challenging. Over the long term, 0:33:42.560 --> 0:33:45.440 they do get paid, and so the revenue does come 0:33:45.480 --> 0:33:48.880 in both to their households and to the state. The 0:33:48.920 --> 0:33:51.600 most challenging, one of the most challenging times that our 0:33:51.640 --> 0:33:55.800 economy has had relating to the federal government was actually 0:33:56.120 --> 0:33:59.920 was actually after a sequestration. We saw real challenges after 0:34:00.120 --> 0:34:03.440 that because of the long term effect that sequestration had. 0:34:03.840 --> 0:34:05.800 We only have about thirty seconds left. But you were 0:34:05.800 --> 0:34:08.279 a Democratic delegate back in twenty sixteen. I got to 0:34:08.280 --> 0:34:11.359 ask you a national question about the Democratic Party. Why 0:34:11.360 --> 0:34:13.799 do you think there haven't been more competition from within 0:34:13.840 --> 0:34:17.120 the Democratic Party against President Biden given the challenges that 0:34:17.160 --> 0:34:18.160 he faces for reelection. 0:34:19.920 --> 0:34:24.200 President Biden and the Democrats in Congress have have passed 0:34:24.280 --> 0:34:28.839 more important legislation in the past two years than I 0:34:28.880 --> 0:34:31.359 can remember in you know, decades. I mean, from the 0:34:31.760 --> 0:34:35.799 IRA to the Chips Act to the Infrastructure Bill. I mean, 0:34:35.840 --> 0:34:38.880 the legislation that has come out is in phenomenal and 0:34:38.920 --> 0:34:41.880 it is game changing for not just the state of 0:34:41.920 --> 0:34:44.680 Maryland in the coming years, but really for our country 0:34:44.840 --> 0:34:47.080 and so you know, I just think the progress that 0:34:47.120 --> 0:34:50.480 has been made under the Democrats, it can't be denied. 0:34:51.120 --> 0:34:54.759 And our economy has grown as well, and so I'm 0:34:54.800 --> 0:34:55.920 excited about what's happening. 0:34:56.000 --> 0:34:58.360 Controller, thank you so much for joining us. That's Brook Learman, 0:34:58.400 --> 0:35:00.680 Maryland's Controller, joining us from Washington, DC. 0:35:01.760 --> 0:35:05.279 You're listening to the Bloomberg Business Week Podcast. Catch us 0:35:05.320 --> 0:35:08.560 live weekday afternoons from two to five pm Easter Listen 0:35:08.600 --> 0:35:10.759 on Apple card Play and then Bright Auto with a 0:35:10.760 --> 0:35:14.960 Bloomberg Business act or watch us live on YouTube. 0:35:15.600 --> 0:35:17.600 Plenty ahead in our second hour of the weekend edition 0:35:17.640 --> 0:35:21.200 of Bloomberg Business Week, including the well known hedge fund 0:35:21.280 --> 0:35:24.200 giant who is no stranger to social media and who 0:35:24.200 --> 0:35:26.480 made his way up the annual Bloomberg list of the 0:35:26.520 --> 0:35:29.440 best paid hedge fund founders. We've got the details on 0:35:29.480 --> 0:35:31.680 Bill Ackman's big twenty twenty three pay. 0:35:31.600 --> 0:35:34.840 Day from hedge funds to hogies. Why the billionaire family 0:35:34.880 --> 0:35:38.200 behind the iconic South Jersey chain Wahwah believes they can 0:35:38.200 --> 0:35:41.360 mirror the same cult status in other states. Bless Our 0:35:41.360 --> 0:35:44.720 Bloomberg Pursuits team on veils the eight secrets learned working 0:35:44.760 --> 0:35:46.719 as a butler at raffles Singapore. 0:35:46.960 --> 0:35:49.719 It's a pretty amazing list and that includes whether it's 0:35:49.800 --> 0:35:52.759 memorizing how you sleep or sourcing toilet paper in your 0:35:52.760 --> 0:35:56.239 favorite color. The hospitality gurus at this historic Singapore and 0:35:56.280 --> 0:36:00.239 hotel have mastered the personal touch and by personal times 0:36:00.280 --> 0:36:01.520 we mean really personal. 0:36:01.680 --> 0:36:03.640 That's true. Well, first up this hour. More signs of 0:36:03.640 --> 0:36:06.880 a rough road ahead for the EV space. The electric 0:36:06.960 --> 0:36:09.640 vehicle makers Rivian and Lucid both out with earnings this 0:36:09.680 --> 0:36:12.120 past week that sent their stocks dropping on the news. 0:36:12.560 --> 0:36:15.719 Rivian also cutting ten percent of its salaried staff as 0:36:15.760 --> 0:36:20.279 its output forecast misses. Lucid's production outlook also disappointing. 0:36:20.360 --> 0:36:22.160 Yeah, it's been a rough go so far this year 0:36:22.200 --> 0:36:26.320 for electric vehicle adoption. Rather than muscling aside gas guzzlers, 0:36:26.560 --> 0:36:28.840 sales of fully electric cars this year are set to 0:36:28.880 --> 0:36:31.920 grow at the slowest rate since twenty nineteen. This is, 0:36:31.960 --> 0:36:36.480 according to Bloomberg NEF, with the unexpected stall in momentum 0:36:36.560 --> 0:36:38.040 intensifying competition. 0:36:38.480 --> 0:36:41.640 In fact, Ford cutting the price of its electric Mustang 0:36:41.680 --> 0:36:44.080 mock Ee by as much as eighty one hundred dollars 0:36:44.360 --> 0:36:47.680 after its sales tumbled fifty one percent in January. That 0:36:47.760 --> 0:36:50.319 was when Ford had to stop offering tax incentives on 0:36:50.360 --> 0:36:52.960 the plug in model. Ford also cutting production of the 0:36:53.000 --> 0:36:55.440 mach E and the F one to fifty Lightning plugin 0:36:55.600 --> 0:36:57.440 pickup truck. So a lot has changed in a very 0:36:57.440 --> 0:36:57.799 short time. 0:36:57.880 --> 0:36:59.400 Yeah, it does feel like a one to eighty in 0:36:59.520 --> 0:37:03.319 terms of the expected ramp up to EV adoption. All right, 0:37:03.360 --> 0:37:06.200 So where does that leave the crucial component for evs. 0:37:06.239 --> 0:37:09.560 We're talking about the chargers. After all, without chargers, there 0:37:09.640 --> 0:37:11.719 are no evs. So for that, we checked in with 0:37:11.800 --> 0:37:14.640 Brendan Jones. He is president and chief executive officer Blink 0:37:14.760 --> 0:37:20.200 charging company. Customers include Alphabet, Amazon, AutoNation for GM, hotels 0:37:20.239 --> 0:37:21.840 and cities around the country. 0:37:22.160 --> 0:37:24.440 Well, you know, despite of what we see as some 0:37:24.480 --> 0:37:28.320 cuts from certain OEMs, we're still seeing an overall increase 0:37:28.360 --> 0:37:32.360 in the market. The US had one point three million 0:37:32.719 --> 0:37:36.160 EV sales last year, and if you were a single 0:37:36.200 --> 0:37:39.200 OEM and you had one point three million sales, that 0:37:39.239 --> 0:37:43.239 would be outstanding, and even bloomberg yourselves, you still see 0:37:43.280 --> 0:37:47.239 an increase. In twenty twenty three, we're fourteen million, you're 0:37:47.280 --> 0:37:49.200 projecting sixteen point. 0:37:48.960 --> 0:37:50.239 Seven million next year. 0:37:50.560 --> 0:37:53.760 So while it may slow down a bit, the industry 0:37:53.840 --> 0:37:56.600 is still moving forward. And progressing. There's gonna be some 0:37:56.640 --> 0:38:01.880 structural adjustment, but we're still seeing thee have invested, you know, 0:38:02.000 --> 0:38:05.360 north of seven hundred billion dollars in EV platforms, and 0:38:05.440 --> 0:38:07.320 those vehicles are still coming to market. 0:38:07.960 --> 0:38:10.120 Some are going to do button than others. Others need 0:38:10.160 --> 0:38:11.080 price adjustments. 0:38:11.360 --> 0:38:13.319 We still need the cost of the battery to come 0:38:13.320 --> 0:38:17.080 down a little bit to get parody with internal combustion engines. 0:38:17.239 --> 0:38:21.560 But all that is happening, so we remain optimistic. Maybe 0:38:21.640 --> 0:38:25.080 a little slower, but when we think about the gap 0:38:25.200 --> 0:38:28.640 between EV sales on the vehicle side and the need 0:38:28.680 --> 0:38:31.480 for infrastructure, there's a lot of ketchup work to be 0:38:31.520 --> 0:38:34.720 done on the infrastructure. So we see nothing but increased 0:38:34.800 --> 0:38:36.720 orders and increased revenue for Blank. 0:38:36.960 --> 0:38:39.640 Increased orders, increased revenue for you guys, but at a 0:38:39.680 --> 0:38:43.439 slower pace. Is that the kind of reset to be fair, Brendan. 0:38:44.239 --> 0:38:46.960 Yeah, it may be just, but we're going to be 0:38:47.040 --> 0:38:49.680 very cautionary at a slight pace. You know, we just 0:38:49.760 --> 0:38:52.880 announced a couple of days ago that we're going to 0:38:52.960 --> 0:38:54.960 hit one hundred and forty million in revenue. 0:38:56.080 --> 0:38:58.160 That's an astronomically high number. 0:38:57.880 --> 0:39:01.000 From where we were three years ago when I joined 0:39:01.000 --> 0:39:04.520 the company to structionally adjusted the previous year revenue was 0:39:04.680 --> 0:39:07.680 just two million dollars, and now we're at one hundred 0:39:07.680 --> 0:39:10.360 and forty million dollars and we're going to I can't 0:39:10.440 --> 0:39:12.200 and I wouldn't predict that we're going to see that 0:39:12.320 --> 0:39:16.080 same growth factor because a lot has changed in the intrim. 0:39:16.360 --> 0:39:19.520 But we still see growth. And when we give guidance 0:39:19.600 --> 0:39:23.839 out after March fifteenth for twenty twenty four, you'll see 0:39:23.840 --> 0:39:24.680 those in our numbers. 0:39:24.840 --> 0:39:25.040 Yeah. 0:39:25.040 --> 0:39:27.480 And to be fair, that twenty twenty three revenue that 0:39:27.520 --> 0:39:30.279 you said to surpass one forty the consensus on the 0:39:30.280 --> 0:39:32.680 street was one thirty two point thirty three million. Your 0:39:32.719 --> 0:39:35.520 stock was up more than thirty percent, more than thirty 0:39:35.560 --> 0:39:38.440 two percent, to be fair, when you reported earnings and 0:39:38.480 --> 0:39:41.080 gave that outlook. That was back on February fourteenth. Happy 0:39:41.160 --> 0:39:42.400 Valentine's Day everybody. 0:39:42.920 --> 0:39:49.160 Hey Brendon, what is holding back customers in the US 0:39:49.200 --> 0:39:53.359 from widespread adoption right now? Is it purely cost? 0:39:54.239 --> 0:39:57.640 Cost is an a element, but we see some lower 0:39:57.640 --> 0:40:01.360 price models coming in perception, we have to really improve 0:40:01.400 --> 0:40:04.319 the dialogue. I mean, the benefit of an EV is 0:40:04.360 --> 0:40:06.120 really that you can plug it in anywhere. 0:40:06.440 --> 0:40:08.120 But when you look at the share of voice. 0:40:08.120 --> 0:40:11.680 When we talk about EV infrastructure, it's really a lot 0:40:11.719 --> 0:40:15.759 on public base DC fast charging when reality, according to 0:40:15.880 --> 0:40:18.360 all the data, ninety to ninety plus percent of the 0:40:18.400 --> 0:40:21.000 charging is going to be on level too charging that 0:40:21.120 --> 0:40:23.440 is either in the home or the workplace, or the 0:40:23.480 --> 0:40:27.080 apartment building, the multifamily dwelling, the doctor's office, and it's 0:40:27.160 --> 0:40:31.040 much easier to install. But we have most of the 0:40:31.080 --> 0:40:35.279 public holding back waiting for that visible sign to see 0:40:35.280 --> 0:40:38.120 a DC fast charger. But we got to break that myth. 0:40:38.280 --> 0:40:42.080 That's the old paradigm. The new paradigm is charge anywhere. 0:40:42.440 --> 0:40:46.600 And unfortunately, as Americans, you know, we think we use 0:40:46.640 --> 0:40:49.600 our car more than we do. But the DOT has 0:40:49.640 --> 0:40:52.600 had consistent stats for the last thirty years. They sit 0:40:52.719 --> 0:40:55.239 ninety five percent of the time charging where they sit. 0:40:55.600 --> 0:40:58.719 It's more economical, it's less capital, it's easier to do, 0:40:59.000 --> 0:41:00.640 and we can put more poor out there. 0:41:00.719 --> 0:41:04.640 Well how much, I mean, how likely is that broader 0:41:04.640 --> 0:41:08.160 pivot towards the slower level two charges, which is what 0:41:08.239 --> 0:41:13.479 you guys focus on if plug in hybrids gain share. 0:41:13.520 --> 0:41:15.040 I'm just curious how you see it and the need 0:41:15.080 --> 0:41:17.960 for that fast chargers become less critical so give us 0:41:18.000 --> 0:41:22.480 an idea if you see that broader pivot, it's still yeah. 0:41:23.880 --> 0:41:25.840 If you look at our portfolio today, I'll give you 0:41:25.840 --> 0:41:28.160 that is that as an example, and we have hybrids 0:41:28.160 --> 0:41:31.439 that are charging on our chargers every day, we will 0:41:31.680 --> 0:41:34.799 maintain that ninety ten split. Ten percent is going to 0:41:34.800 --> 0:41:38.160 be DC and ninety percent is going to be L two. Well, 0:41:38.239 --> 0:41:42.120 we think that's healthy. That's globally right, because we're not 0:41:42.239 --> 0:41:44.719 the United States based. We're in Europe, we're in the 0:41:44.800 --> 0:41:48.280 United States, we're moving into Southeast Asia, we're in Greece already, 0:41:48.520 --> 0:41:49.600 we're globally. 0:41:49.160 --> 0:41:51.640 We're in twenty seven countries that we have today. 0:41:51.960 --> 0:41:55.360 So we have the benefit of seeing where the future 0:41:55.440 --> 0:41:58.280 utilization is going to be, especially in the European countries 0:41:58.480 --> 0:42:02.520 that they've already structurally adjusted, and utilization on our chargers 0:42:02.560 --> 0:42:05.279 there is way up compared to the United States, and 0:42:05.360 --> 0:42:08.200 eventually that's going to come to the United States. So 0:42:08.560 --> 0:42:12.000 hybrids that are coming out have now a dependency on 0:42:12.280 --> 0:42:15.719 just being electric, and that dependency on being electric is 0:42:15.760 --> 0:42:17.120 going to drive the need for charging. 0:42:17.520 --> 0:42:19.239 When do we get to a point though, where we 0:42:19.280 --> 0:42:22.000 see pure we see evs or as easy to charge 0:42:22.680 --> 0:42:24.920 as an internal combustion engine vehicle. 0:42:26.320 --> 0:42:28.759 Well, I think you know we're getting close now with 0:42:28.840 --> 0:42:31.000 the paradigm, and you're talking about in terms of speed 0:42:31.040 --> 0:42:32.799 when you're talking about public charging, right. 0:42:32.840 --> 0:42:34.960 Speed would be great. I was just thinking of a 0:42:35.120 --> 0:42:37.319 number of places you can fill up your tank versus 0:42:37.360 --> 0:42:39.080 number of places you can fill up your battery. 0:42:40.200 --> 0:42:42.719 Right, So we're heading there, but again, remember it's a 0:42:42.719 --> 0:42:46.120 different paradigm, and that's what we have to keep in mind. 0:42:46.520 --> 0:42:49.640 You know, I worked for many DC fast charger companies 0:42:49.680 --> 0:42:51.680 in my past, but I did all my charging at 0:42:51.680 --> 0:42:53.839 home and at work because that's what the charger was, right, 0:42:54.239 --> 0:42:55.959 So I was always full. 0:42:56.239 --> 0:42:58.760 Was it a DC fast charger at work? 0:43:00.200 --> 0:43:01.960 There was a DC fast charger at work, but I 0:43:02.000 --> 0:43:03.960 didn't need to hook up to it. It costs more money, 0:43:04.560 --> 0:43:07.000 it's more expensive to operate. I just plugged into the 0:43:07.120 --> 0:43:07.399 l too. 0:43:07.560 --> 0:43:10.279 And just so we are clear to everybody out there. 0:43:10.760 --> 0:43:14.760 Level one charging is one hundred and twenty volts, takes 0:43:14.840 --> 0:43:17.640 you know, between twelve hours in a full day, so 0:43:17.680 --> 0:43:19.000 you can do that one at home. You could do 0:43:19.120 --> 0:43:21.200 level two at home as well, three to eight hours. 0:43:21.560 --> 0:43:24.200 Level three is four hundred and eighty volts, and that 0:43:24.239 --> 0:43:26.080 can charge something in thirty to sixty. 0:43:25.760 --> 0:43:30.040 Minutes, depending on the car and the architecture. Okay, and 0:43:30.080 --> 0:43:32.480 depending on the charger itself, because it might only be 0:43:33.040 --> 0:43:35.480 one hundred kilo loot DC fast charge, it could be 0:43:35.480 --> 0:43:38.680 a fifty or thirty right, so, and then the battery 0:43:38.880 --> 0:43:41.960 has to have a speed which it'll accept the charge. So, 0:43:42.960 --> 0:43:44.919 you know, we look at a lot of the generalities 0:43:45.120 --> 0:43:47.200 is the high end and say that's what it's going 0:43:47.280 --> 0:43:49.600 to be, but really it's going to be somewhere. 0:43:49.360 --> 0:43:49.760 In the middle. 0:43:49.960 --> 0:43:52.239 Brendan though, how going back to kind of we've talked 0:43:52.280 --> 0:43:54.440 a lot here at Bloomberg, Our team kick Notton and 0:43:54.520 --> 0:43:56.960 others have really done some great reporting on the uptiket 0:43:56.960 --> 0:43:59.960 in those hybrids rather than pure evs. If you will 0:44:00.040 --> 0:44:04.680 well that pivot, if that continues, how do you assess 0:44:04.760 --> 0:44:07.640 or describe that impact on your business or how does 0:44:07.719 --> 0:44:08.680 it change the outlook? 0:44:09.760 --> 0:44:12.439 We don't think it changes that greatly, but we really 0:44:12.520 --> 0:44:16.600 don't see that as a long standing thing. And here's 0:44:16.640 --> 0:44:20.120 the reality. China is moving to peer evs, Europe is 0:44:20.160 --> 0:44:22.960 moving to peer evs, and a lot of the European 0:44:23.000 --> 0:44:26.919 manufacturers are pushing peer ev strategies. In the US, well, 0:44:26.960 --> 0:44:29.280 you might have some slow down. The US is heading 0:44:29.280 --> 0:44:33.000 in this direction. Hybrids already exists, so those power plants 0:44:33.000 --> 0:44:35.520 are no but in the end there are a horribly 0:44:35.560 --> 0:44:39.000 inefficient plant power plant because you're running two different systems 0:44:39.000 --> 0:44:42.560 in a car, and that is suboptimal by any engineering standards. 0:44:42.800 --> 0:44:47.440 So eventually it's going to give way to your electric. 0:44:47.080 --> 0:44:50.280 Vehicles really quickly. 0:44:50.480 --> 0:44:54.040 Thirty seconds. Who are your biggest customers? Who's buying it most? 0:44:54.120 --> 0:44:57.640 Is it municipalities, is it the automakers, is it Amazon? 0:44:57.680 --> 0:44:58.080 Who is it? 0:44:58.120 --> 0:44:58.720 Real quickly? 0:45:00.040 --> 0:45:02.279 Great question, and it's actually all of the above. Now. 0:45:02.320 --> 0:45:05.320 The biggest booming part of the space is fleet. Both 0:45:05.440 --> 0:45:11.359 municipal and commercial fleets are buying chargers night and day 0:45:11.360 --> 0:45:14.600 all over the place right now. But also we're doing 0:45:14.600 --> 0:45:17.319 a strong book of business with healthcare, we do it 0:45:17.360 --> 0:45:21.239 with hospitality, we do it with long dwell times. So 0:45:21.400 --> 0:45:23.120 it's pretty consistent. 0:45:22.600 --> 0:45:25.080 In the shift. And we're seeing orders. 0:45:24.800 --> 0:45:28.400 Increase, not decrease, got it, So we're pretty autimistic about it. 0:45:28.440 --> 0:45:31.080 Always good to check in with you. Brendan Jones, President 0:45:31.080 --> 0:45:35.080 and chief executive officer of Blink Charging, joining us from Washington, DC. 0:45:42.120 --> 0:45:45.960 You're listening to the Bloomberg Business Week Podcast. Listen live 0:45:46.040 --> 0:45:49.280 each weekday starting at two pm Eastern on applecar Play 0:45:49.280 --> 0:45:52.160 and Android Auto with the Bloomberg Business App. You can 0:45:52.160 --> 0:45:55.440 also listen live on Amazon Alexa from our flagship New 0:45:55.480 --> 0:45:59.120 York station, Just say Alexa Play Bloomberg eleven thirty. 0:46:00.160 --> 0:46:01.960 So last week, I get any email from my insurance 0:46:02.000 --> 0:46:04.480 company about renewing my auto insurance. You get this every 0:46:04.520 --> 0:46:05.640 six months, Well, I canna buy. 0:46:05.560 --> 0:46:06.320 A year of insurance. 0:46:06.360 --> 0:46:07.800 By the way, this happens every sixs. 0:46:07.800 --> 0:46:08.760 You can't buy a year of insuran. 0:46:08.800 --> 0:46:10.640 It make me do it every six months. This email 0:46:10.680 --> 0:46:13.480 was different, though. One thousand, nine hundred and eighty four 0:46:13.520 --> 0:46:17.080 dollars and sixty five cents for six months of auto insurance. Yeah, okay, 0:46:17.320 --> 0:46:19.960 three hundred and thirty dollars a month, up from seventeen 0:46:20.120 --> 0:46:22.640 fifty just six months ago. That's a thirteen percent increase 0:46:22.640 --> 0:46:25.239 in just six months. Okay, that's crazy. I email my 0:46:25.280 --> 0:46:27.640 insurance agent asked him what I could do change my coverage, 0:46:27.680 --> 0:46:30.319 raise my deductibles, anything to get the price down. A 0:46:30.320 --> 0:46:32.440 few minutes later, he emails me back and he says, yeah, 0:46:32.600 --> 0:46:33.520 it's ugly out there. 0:46:33.600 --> 0:46:35.000 I think you need a new insurance age. 0:46:35.200 --> 0:46:37.239 He's a broker though, like he has he has the 0:46:37.320 --> 0:46:38.439 view everywhere in the market. 0:46:38.480 --> 0:46:40.480 I'm telling you I could buy a policy for a year, 0:46:40.560 --> 0:46:41.040 no problem. 0:46:41.040 --> 0:46:42.759 No, there are companies now in New York that don't 0:46:42.760 --> 0:46:45.839 even they don't even write insurance in New York, New Jersey. 0:46:45.920 --> 0:46:48.040 It's a mess out there, all right. So, the couse 0:46:48.040 --> 0:46:50.200 of auto insurance in the US rows more than twenty percent, 0:46:50.200 --> 0:46:52.600 and twenty twenty three, it's the biggest annual jump since 0:46:52.680 --> 0:46:55.160 nineteen seventy six. That's according to data from the US 0:46:55.200 --> 0:46:57.799 Bureau of Labor Statistics. Rates are up with thirty seven 0:46:57.840 --> 0:47:00.000 percent CAROL since January of twenty twenty. 0:47:00.000 --> 0:47:02.480 All right, Well, in the forthcoming issue Bloomberg BusinessWeek, which 0:47:02.520 --> 0:47:04.960 is at on newstands tomorrow, already online at Bloomberg dot 0:47:04.960 --> 0:47:07.520 com slash business Week also on the Bloomberg Bloomberg News, 0:47:07.560 --> 0:47:11.040 auto reporter Keith Naughton gets at the reasons why insurance 0:47:11.040 --> 0:47:13.000 has gone up so much in such a short time. 0:47:13.040 --> 0:47:15.560 He joins us on zoom from Detroit. So glad you 0:47:15.719 --> 0:47:17.799 are back with us to talk about this story. What 0:47:17.840 --> 0:47:20.000 the heck is going on? And how can we help them? 0:47:20.560 --> 0:47:26.120 No, but what can help me, what's going on, Well, 0:47:26.160 --> 0:47:28.840 there isn't much hope for any of us on the 0:47:28.880 --> 0:47:33.320 auto insurance front. To complement Tien's story, I was talking 0:47:33.360 --> 0:47:36.200 to another editor at Bloomberg Today who lives in New York, 0:47:36.239 --> 0:47:39.200 and he said the insurance premium quotes he was getting 0:47:39.200 --> 0:47:42.560 on his new car were five hundred dollars a month. 0:47:42.600 --> 0:47:45.279 So it's like having two car payments on the same car. 0:47:45.560 --> 0:47:47.759 Oh my god, why yeah? 0:47:48.520 --> 0:47:48.719 Yes. 0:47:48.800 --> 0:47:53.200 So the why here is that cars are just loaded 0:47:53.280 --> 0:47:58.040 with more technology now to help you avoid accidents, and 0:47:58.880 --> 0:48:05.080 those technological bits it's cameras and sensors and sonar from 0:48:05.160 --> 0:48:09.320 bumper to mumper on the car, really drives up repair costs. 0:48:09.840 --> 0:48:13.799 And then those repair costs are being passed on through 0:48:13.840 --> 0:48:16.560 your auto insurance rates, which are skyrocket. 0:48:17.480 --> 0:48:20.120 If you have Keith tired interrupt. I just want to 0:48:20.120 --> 0:48:22.040 make sure I get this point. If our cars are 0:48:22.040 --> 0:48:25.480 filled with this technology that helps us avoid accidents, shouldn't 0:48:25.480 --> 0:48:27.600 we be getting in fewer accidents and therefore there should 0:48:27.600 --> 0:48:29.839 be fewer repairs and insurance companies wouldn't have to pay 0:48:29.880 --> 0:48:30.439 out as much. 0:48:31.280 --> 0:48:34.919 Non basically drives itself. It's so much safer than rather 0:48:35.000 --> 0:48:37.000 me driving it to be quite honest. 0:48:36.760 --> 0:48:40.640 Yes, that's way too logical. That's exactly what should be 0:48:40.719 --> 0:48:45.000 happening but is not happening. And in fact, what's been 0:48:45.040 --> 0:48:50.920 happening since twenty twenty is auto insurance claims are going up, 0:48:51.200 --> 0:48:56.640 not down, despite all this whiz bang crash avoidance technology 0:48:56.760 --> 0:49:02.480 that today's cars are laden. The reason behind that has 0:49:02.640 --> 0:49:07.919 something to do with distracted driving. We all have our 0:49:07.960 --> 0:49:10.520 phones in the car, or if you're not looking at 0:49:10.520 --> 0:49:12.600 your phone, which is illegal in New York and many 0:49:12.640 --> 0:49:16.280 other states while you're driving, then you have this big 0:49:16.360 --> 0:49:19.759 touch screen in the middle of your dashboard that you're 0:49:20.120 --> 0:49:24.719 glancing over at or touching or you know, focused on 0:49:24.880 --> 0:49:30.080 instead of the road. So accidents are up, fatalities are up. 0:49:31.040 --> 0:49:36.440 It's the safety technology. It might be helping us survive crashes, 0:49:36.480 --> 0:49:38.239 but it's not reducing crash. 0:49:38.120 --> 0:49:39.560 I'm just going to tell you guys. I even get 0:49:39.600 --> 0:49:41.239 a dividend check at the end of the year from 0:49:41.239 --> 0:49:44.800 my insurance company, which I've been with for almost thirty 0:49:44.880 --> 0:49:47.760 years since I was a teenage driver on my dad's 0:49:47.800 --> 0:49:49.800 policy and I kept it. And then when they have 0:49:49.880 --> 0:49:51.279 a good year, we get a dividend check. 0:49:51.320 --> 0:49:55.120 So I'm going to wait to time. Oh, it's just 0:49:55.640 --> 0:49:56.200 I'm sorry. 0:49:57.320 --> 0:49:58.759 You should check to see how much you're paying though, 0:49:58.800 --> 0:49:59.719 because I bet it's a lot. 0:50:00.320 --> 0:50:02.279 No, I do look, but I will check again. 0:50:03.520 --> 0:50:06.400 It's kind of wild, and you know what I'm worried 0:50:06.400 --> 0:50:08.279 about is and well, wait a minute, I'm going to 0:50:08.280 --> 0:50:09.879 go on my soapbox for a little bit more here, Keith, 0:50:09.880 --> 0:50:11.920 because I do feel like I wish, I wish like 0:50:12.120 --> 0:50:14.560 traffic cops actually police driving to you, because I do 0:50:14.600 --> 0:50:17.759 feel like driving has gotten more aggressive. People fly through 0:50:17.800 --> 0:50:19.840 stop signs, Like I just feel like there's some stuff 0:50:19.880 --> 0:50:21.719 going on that it's kind of the wild wild West 0:50:21.719 --> 0:50:24.400 on the road. But I don't know that that relates 0:50:24.400 --> 0:50:26.279 to your story. But I just feel like people are a 0:50:26.320 --> 0:50:28.839 little crazy on the roads today. And maybe that's why 0:50:28.960 --> 0:50:31.480 when an AX they get in an accident and they're 0:50:31.480 --> 0:50:33.440 also distracted. There's a lot going on, and so then 0:50:33.480 --> 0:50:34.600 it's just going to cost more. 0:50:34.640 --> 0:50:39.239 I don't know, cal And that's why auto insurance companies now, 0:50:39.280 --> 0:50:43.200 some of them offer you the option of, you know, 0:50:43.280 --> 0:50:46.160 attaching and device to your car so they can monitor 0:50:46.239 --> 0:50:49.279 your driving. And if you prove to be a good driver, 0:50:49.440 --> 0:50:51.919 like I'm sure you would, Carol, then you actually get 0:50:51.960 --> 0:50:56.800 a reduction in rates. So but but that rage raises 0:50:56.840 --> 0:50:59.640 sort of privacy concerns. Lots of folks don't want their 0:50:59.640 --> 0:51:03.279 insurance company knowing everywhere they're going at all hours, so 0:51:03.760 --> 0:51:06.919 people decline that. But that is one way to try 0:51:06.920 --> 0:51:09.960 and reduce your rates. But rates are climbing. I did 0:51:09.960 --> 0:51:12.279 the same thing Tim did last year. I looked at 0:51:12.520 --> 0:51:14.839 what I was paying and I couldn't believe it, and 0:51:15.160 --> 0:51:18.080 so I started shopping around and found a cheaper rate. 0:51:18.120 --> 0:51:21.600 But it's getting harder and harder to find a lower 0:51:21.680 --> 0:51:23.839 rate because all of them are going up. And the 0:51:23.840 --> 0:51:29.040 insurance companies are not only doing it because they have 0:51:29.160 --> 0:51:32.719 higher repair and crash costs, but also because they are 0:51:32.719 --> 0:51:34.359 now making a lot more money doing that. 0:51:34.440 --> 0:51:37.320 I'm glad you bring up the more money part, because 0:51:37.400 --> 0:51:40.680 it turns out that insurance companies are doing pretty well 0:51:41.000 --> 0:51:44.920 right now. So Travelers closed at an all time high 0:51:45.280 --> 0:51:49.560 earlier this week. We learned from Progressive earlier this week 0:51:49.600 --> 0:51:52.640 that profit for the most recent quarter more than doubled 0:51:52.680 --> 0:51:54.040 from a year earlier. 0:51:53.800 --> 0:51:55.080 So maybe they're charging too much. 0:51:55.160 --> 0:51:58.759 If their profit is going up that much, that means obviously, 0:51:58.840 --> 0:52:01.040 even we have an accident it's not clustering that much. 0:52:01.040 --> 0:52:02.120 Even whatever they pay. 0:52:01.960 --> 0:52:04.719 Out, I don't know, I mean, what are we logically? 0:52:04.800 --> 0:52:07.520 It turns out that you know, we're all paying for like, 0:52:07.560 --> 0:52:09.640 it's pretty good to be an investor in some of 0:52:09.640 --> 0:52:13.160 these companies, Keithan, Perhaps not so good because we're paying 0:52:13.560 --> 0:52:17.480 so much as customers, right, And it's. 0:52:17.320 --> 0:52:20.680 Not just that the insurance companies are gouging us. There 0:52:20.719 --> 0:52:25.000 really arenes goodness reasons that it costs more. Let me 0:52:25.040 --> 0:52:28.400 give you one example from my story, and that is 0:52:28.680 --> 0:52:32.000 the Toyota Camera. So that was the best selling car 0:52:32.000 --> 0:52:37.680 in America for decades, and in twenty eighteen, Toyota redesigned 0:52:37.680 --> 0:52:42.520 it and added a whole bunch of driver assist features 0:52:42.600 --> 0:52:47.960 technology radar, so onar cameras throughout the car. But just 0:52:48.000 --> 0:52:51.440 looking at the front bumper assembly, it went from having 0:52:51.640 --> 0:52:56.400 eighteen parts to forty three parts. And so as a result, 0:52:56.440 --> 0:53:01.080 you get into a relatively minor fender bender with a 0:53:01.120 --> 0:53:02.640 Toileta camera. And I'm not picking on. 0:53:02.600 --> 0:53:06.240 Toyota, this is cars. 0:53:07.160 --> 0:53:09.879 But this particular example given to me by the folks 0:53:09.920 --> 0:53:13.040 at Mitchell International, said, what that did is it drove 0:53:13.400 --> 0:53:15.920 repair costs for the camera. When you get in a 0:53:16.000 --> 0:53:18.960 front end collision. It drove them up by forty three percent. 0:53:19.160 --> 0:53:21.200 That makes sense, yeah, Keith. One thing that was so 0:53:21.320 --> 0:53:24.880 shocking to me about your story was the difference with 0:53:24.920 --> 0:53:26.960 EV's and you bring up the Hurts issue. We only 0:53:26.960 --> 0:53:29.840 have about a minute left, but talk to us about 0:53:29.920 --> 0:53:33.120 how much more complicated evs are to repair and why 0:53:33.160 --> 0:53:34.680 that's also driving uprates. 0:53:35.360 --> 0:53:38.120 Right, and our Hurts is selling off a big chunk 0:53:38.120 --> 0:53:39.799 of its EV fleet and one of the reasons they 0:53:39.840 --> 0:53:42.680 cited is that EV's cost twice as much to repair 0:53:42.680 --> 0:53:45.360 as regular cars. One of the reasons is that big 0:53:45.440 --> 0:53:49.480 battery tim that's in every EV. You have to disconnected, 0:53:49.800 --> 0:53:52.719 power it down, or in some cases remove it altogether 0:53:53.280 --> 0:53:56.719 to avoid injury to the technicians, to avoid fire risk. 0:53:57.200 --> 0:54:00.480 And this just adds time in the repair shot and 0:54:00.600 --> 0:54:02.480 cost unbelievable. 0:54:02.520 --> 0:54:04.440 There's also an interesting part of your story where you 0:54:04.480 --> 0:54:07.799 talk about a new all this new technologies also added 0:54:07.800 --> 0:54:09.719 a costing step to the repair process. It has to 0:54:09.719 --> 0:54:14.040 do with calibration, which is you just understand, you know. 0:54:14.239 --> 0:54:16.319 I got to calibrate the sensors. It costs five hundred 0:54:16.360 --> 0:54:17.200 bucks more to do that. 0:54:17.239 --> 0:54:20.839 When you get a right, Yeah, it's amazing. 0:54:21.280 --> 0:54:22.600 Thank you for this story. I sent it to my 0:54:22.640 --> 0:54:25.560 whole family because I was complaining to them about insurance recently. 0:54:25.719 --> 0:54:27.839 So it turns out I said a lot of key 0:54:27.960 --> 0:54:28.480 stories to. 0:54:28.440 --> 0:54:29.040 My whole family. 0:54:30.000 --> 0:54:33.040 It's a street Yeah, it's like he writes about cool stuff. 0:54:33.200 --> 0:54:35.200 It does and it makes so much sense. 0:54:36.040 --> 0:54:36.320 Keith. 0:54:36.360 --> 0:54:39.399 Thank you, Bloomberg News Auto reporter Keith Not as we said, go. 0:54:39.440 --> 0:54:41.120 Check out how much you're paying for insurance. 0:54:41.239 --> 0:54:42.320 Thank car Insurance. 0:54:42.360 --> 0:54:44.400 I know, I just saw the bill come in. Yeah, well, 0:54:44.520 --> 0:54:48.000 husband just kind of slides it away, so maybe maybe wait. 0:54:47.880 --> 0:54:48.359 To see it. 0:54:49.440 --> 0:54:52.960 You're listening to the Bloomberg Business Week podcast. Catch us 0:54:53.000 --> 0:54:56.240 live weekday afternoons from two to five pm Eastern Listen 0:54:56.280 --> 0:54:58.440 on Apple card Play and then brought Auto with a 0:54:58.440 --> 0:55:03.360 Bloomberg Business app or one just live on YouTube. 0:55:03.680 --> 0:55:05.560 No doubt about it. We love lists here a Bloomberg, 0:55:05.600 --> 0:55:09.120 especially ones that track investing prowess the best. Also, we 0:55:09.320 --> 0:55:11.120 like to keep an eye on wealth accumulation. 0:55:11.840 --> 0:55:13.239 Yeah, those are a couple of things that I think 0:55:13.239 --> 0:55:14.680 it's fair to say. Just type in by the way, 0:55:14.920 --> 0:55:17.200 rich go on the Bloomberg terminal. That's how you get 0:55:17.200 --> 0:55:20.120 to the Bloomberg Billionaires. Index. One list that taps into 0:55:20.120 --> 0:55:22.480 both is Bloomberg's annual list of the best paid a 0:55:22.520 --> 0:55:24.719 hedge fund of founders from more on what is the 0:55:24.760 --> 0:55:27.120 most read story on the Bloomberg today and who took 0:55:27.160 --> 0:55:31.040 top honors. We welcome Bloomberg News Hedge Fund reporter Emma Palmer. 0:55:31.960 --> 0:55:34.319 She's here in our Bloomberg Interactive Brokers studio with more 0:55:34.320 --> 0:55:36.680 on her story that she wrote along with a Bloomberg's 0:55:36.719 --> 0:55:40.000 Tom Maloney. Hemma joins us now in our studio. Hamma, 0:55:40.000 --> 0:55:42.719 good to have you with us this afternoon. Do I 0:55:42.800 --> 0:55:43.719 do a drum roll? 0:55:43.880 --> 0:55:44.160 Kiroll? 0:55:45.320 --> 0:55:45.480 Is it? 0:55:46.600 --> 0:55:48.359 Or do a drum roll for I don't know? 0:55:48.480 --> 0:55:49.840 Ask Hima, she's the expert. 0:55:49.960 --> 0:55:53.319 I mean this is a thing. Okay, ye, drum I'm 0:55:53.320 --> 0:55:55.040 doing the drum roll now. At the top of the 0:55:55.040 --> 0:55:57.359 list a man who likes to tweet and a man 0:55:57.400 --> 0:55:59.640 who didn't do much with his fund last year. 0:56:00.120 --> 0:56:03.240 Yes, so really interesting. We're talking about Bill Ackman. Of course, 0:56:03.960 --> 0:56:06.920 he has been all over Twitter recently and he is 0:56:07.000 --> 0:56:09.160 number seven on our list, which is the highest he's 0:56:09.200 --> 0:56:12.160 been since we've done this ranking. And what's interesting is 0:56:12.200 --> 0:56:16.480 he took home six hundred million dollars after basically just 0:56:16.520 --> 0:56:19.400 sort of adjusting his portfolio of ten stocks kind of 0:56:19.400 --> 0:56:21.879 on the margins. He brought down one position a fair bit, 0:56:22.080 --> 0:56:25.319 but in general it's a highly concentrated book and it's 0:56:25.640 --> 0:56:28.160 worked out well. The fund was up almost twenty seven percent, 0:56:29.640 --> 0:56:31.520 but they didn't do a whole lot to it recently. 0:56:32.239 --> 0:56:34.400 A chunk of his gains did come from the fact 0:56:34.400 --> 0:56:38.120 that it's a publicly traded Pershing square holdings, and so 0:56:38.200 --> 0:56:39.400 that helped him a great deal too. 0:56:39.560 --> 0:56:41.239 A good third of his money came from there. 0:56:41.360 --> 0:56:43.160 Yeah, you know, it's interesting when I was looking over 0:56:43.200 --> 0:56:44.960 this list, take a step back for us, how do 0:56:45.000 --> 0:56:47.800 you put this together? Because your methodology in this story 0:56:47.880 --> 0:56:50.960 there's a nice like a big long explain. Yes, there's 0:56:50.960 --> 0:56:52.200 got to be a lot of stuff you have to 0:56:52.239 --> 0:56:53.200 go through to figure this out. 0:56:53.400 --> 0:56:55.680 Yes, so Tom Maloney is my colleague on the story. 0:56:55.680 --> 0:56:58.920 He is the wizard behind doing all the calculations, and 0:56:59.000 --> 0:57:01.640 so we do take our time to get all the 0:57:01.680 --> 0:57:04.279 right imports, assess how the fund did, look at their 0:57:04.280 --> 0:57:09.200 public filings, assess who gets what stake of the fees 0:57:09.239 --> 0:57:11.719 and his ownership stake. So you can read the nice, 0:57:11.840 --> 0:57:14.960 very thorough methodology at the bottom of the story, but 0:57:15.000 --> 0:57:15.760 it does take a minute. 0:57:15.800 --> 0:57:17.920 Well, the reason I do ask is how much is performance, 0:57:17.960 --> 0:57:20.160 how much is fees ultimately and how much these dudes make? 0:57:20.400 --> 0:57:21.960 Yes, and so they were all dudes. 0:57:22.480 --> 0:57:25.480 They were all, yeah, I don't think we've ever actually 0:57:25.520 --> 0:57:27.960 had a woman on this ranking before, not yet. 0:57:28.120 --> 0:57:29.520 That makes me sad, But go ahead. 0:57:31.280 --> 0:57:33.880 So if you look at the story we do show you, 0:57:33.960 --> 0:57:36.760 for example, is the Englander. He made two point eight 0:57:36.840 --> 0:57:38.680 billion dollars. We divided it up as to how much 0:57:38.680 --> 0:57:40.560 he made on his gains in the personal investment in 0:57:40.600 --> 0:57:43.160 the fund, and then how much just comes from the 0:57:43.160 --> 0:57:46.000 share performance fees. You'll see across the board most of 0:57:46.000 --> 0:57:48.920 the money is coming from the funds performance, but I 0:57:48.960 --> 0:57:52.440 mean it's not unsubstantial. Which took nearly a billion dollars 0:57:52.480 --> 0:57:55.320 just from fees alone, Ken Griffin one point one billion 0:57:55.400 --> 0:57:58.520 dollars from fees alone, so it's it's tefty. 0:57:58.560 --> 0:58:02.200 Still, what's the fee breakdown traditionally versus what it is 0:58:02.280 --> 0:58:03.880 right now? I mean two and twenty is what you 0:58:03.920 --> 0:58:05.840 hear about with hedge funds, but it's a little more 0:58:05.840 --> 0:58:06.720 complicated than that. 0:58:07.080 --> 0:58:08.440 So it depends on the fund. 0:58:08.480 --> 0:58:10.560 If it's a big name fund that everybody wants to 0:58:10.600 --> 0:58:14.360 get into that has strong performance that you can charge 0:58:14.400 --> 0:58:17.480 two and twenty or sometimes two and thirty, or Element 0:58:17.600 --> 0:58:21.320 charged as much as forty percent performance fee. They bump 0:58:21.560 --> 0:58:25.880 the bump that up, so then you can smaller emerging 0:58:25.920 --> 0:58:30.320 newer funds typically bring that way down. The multi manager funds, 0:58:30.320 --> 0:58:32.560 so like a millennium of Citadel, they haven't passed through, 0:58:32.560 --> 0:58:34.400 so they pass on a lot of the costs, like 0:58:34.440 --> 0:58:37.720 compensation leases a whole bunch of stuff to the clients, 0:58:38.080 --> 0:58:39.000 so they pay for that. 0:58:39.760 --> 0:58:43.600 Does is the management fee included in performance fee? 0:58:44.000 --> 0:58:45.880 The management fee and the performance fee? Are you mean 0:58:45.920 --> 0:58:47.440 for multi shot specifically, Well, no. 0:58:47.600 --> 0:58:50.720 Just for when we look at the top fifteen. 0:58:50.440 --> 0:58:51.160 Or top fifteen. 0:58:51.280 --> 0:58:54.680 So we in our methodology we assume that the management 0:58:54.720 --> 0:58:57.360 fees go towards managing the company, so we do not 0:58:57.480 --> 0:58:59.960 factor that in the performance fees are what we look 0:59:00.320 --> 0:59:02.440 because these firms do charge your management fee to help 0:59:02.520 --> 0:59:03.320 like keep the lights on. 0:59:03.440 --> 0:59:06.600 So is the billionaire lights. 0:59:06.240 --> 0:59:07.800 Keep the lights on? In the jets fueled? 0:59:08.000 --> 0:59:09.240 They go, yeah, what's filed? 0:59:09.320 --> 0:59:09.480 Is it? 0:59:09.480 --> 0:59:12.760 Like when I look at Bill Lackman and Pershing Squares 0:59:12.800 --> 0:59:15.280 equity bets, like I guess for sometimes I always think, oh, 0:59:15.320 --> 0:59:18.240 it's all these sophisticated investment strategies. A lot of times 0:59:18.240 --> 0:59:19.360 it's just plain old stocks. 0:59:19.400 --> 0:59:21.480 It's Chippotele, Alphabet Hilton. 0:59:21.600 --> 0:59:23.080 Yeah, I know names we know. 0:59:23.160 --> 0:59:25.400 Life's kind of fascinating ones that have been, you know, 0:59:25.480 --> 0:59:28.800 on a run. Having said that, I am curious like 0:59:28.920 --> 0:59:31.080 some of these names. Obviously Bi Lackman we know because 0:59:31.080 --> 0:59:33.120 he is pretty out there when it comes to social media, 0:59:33.120 --> 0:59:36.200 and we often have stories somebody like the TCI Fund 0:59:36.240 --> 0:59:38.560 Management's Chris is at home Chris Hohne. Yeah, so tell 0:59:38.640 --> 0:59:40.160 us about him, because it's not a name we talk 0:59:40.200 --> 0:59:42.960 about regularly. But he earned a lot on just ten 0:59:43.240 --> 0:59:44.200 US stock names. 0:59:44.240 --> 0:59:46.480 So yes, so ten US stock names. He may have 0:59:46.520 --> 0:59:48.280 a few others that are international that we don't see 0:59:48.320 --> 0:59:51.080 in their thirteen F filings, but regardless, he runs a 0:59:51.160 --> 0:59:55.840 very concentrated long bias portfolio, so mostly longs versus shorts. 0:59:56.640 --> 0:59:57.960 He did, he did very well. 0:59:58.200 --> 1:00:01.000 He's been on our list almost consists, I think every year, 1:00:01.040 --> 1:00:03.760 if not every almost every year. He made nearly a 1:00:03.800 --> 1:00:06.480 billion dollars. Last year his fund was up thirty three percent, 1:00:06.920 --> 1:00:11.280 basically the best performer of the group on very concentrated bets, 1:00:11.440 --> 1:00:14.880 they're sizable, and most of his money seven hundred of 1:00:14.880 --> 1:00:17.360 his nine hundred came from the games on that fund alone. 1:00:17.440 --> 1:00:19.680 So wow, Yeah, do you want to be in a 1:00:19.720 --> 1:00:23.800 position as a manager to have, like I guess from 1:00:23.800 --> 1:00:28.280 a client's perspective, somebody like David Tepper, who's two point 1:00:28.360 --> 1:00:31.080 three billion dollar pay day last year, Yes, came almost 1:00:31.120 --> 1:00:35.760 one percent from personal investment versus fun performance. Like who 1:00:35.760 --> 1:00:36.320 do you want to be? 1:00:36.440 --> 1:00:36.520 Like? 1:00:36.560 --> 1:00:38.360 What does the mix? What's the mix you want? 1:00:38.920 --> 1:00:41.040 That's a very good question for Tepper, I would say, 1:00:41.080 --> 1:00:43.720 because he's he's returned a lot of outside capital. 1:00:43.760 --> 1:00:46.320 He still manages some so but it's smaller than he 1:00:46.400 --> 1:00:46.600 used to. 1:00:46.720 --> 1:00:49.160 So he's getting fewer fees just from that alone, and 1:00:49.200 --> 1:00:50.400 he doesn't charge himself fees. 1:00:50.520 --> 1:00:53.320 So I think it depends. 1:00:53.360 --> 1:00:56.600 I mean, the people talk about the multi strategy model 1:00:56.880 --> 1:00:59.280 a lot. The clients complain about it a lot because 1:00:59.280 --> 1:01:01.720 they pay for so much and it's so expensive. But 1:01:01.760 --> 1:01:03.360 then you have a year like a couple of years 1:01:03.400 --> 1:01:05.960 ago and siadel was up thirty percent NETO fees. 1:01:06.560 --> 1:01:07.400 But this year. 1:01:07.480 --> 1:01:09.680 The reason they're under a bit more scrutiny right now 1:01:09.760 --> 1:01:12.120 is because they tend to be in leverage bets they 1:01:12.160 --> 1:01:16.560 tend to They have had like mediocre performance last year, 1:01:16.640 --> 1:01:19.360 so it's been a little bit rougher recently. 1:01:19.440 --> 1:01:21.480 How much does this list change from year to year 1:01:21.480 --> 1:01:23.040 in terms of the top ten or fifteen? 1:01:23.600 --> 1:01:25.120 So I would say you see a lot of the 1:01:25.240 --> 1:01:28.520 repeat names. Yeah, do they shift around? N is You 1:01:28.560 --> 1:01:30.439 do see the shifting around. I think Ken's a little 1:01:30.440 --> 1:01:34.840 bit higher, yes, than he was before. Actually, no, that 1:01:34.960 --> 1:01:38.040 correct that Ken was number one last year. He made 1:01:38.080 --> 1:01:40.080 I think like three or four billion dollars number so 1:01:40.160 --> 1:01:42.640 number two this year. But you do see a lot 1:01:42.640 --> 1:01:45.360 of the same repeat people. But we have seen a 1:01:45.400 --> 1:01:45.720 number of. 1:01:45.760 --> 1:01:48.280 Names fall off the list. So after twenty twenty. 1:01:48.040 --> 1:01:50.120 Two the Tiger Cubs struggled. We talked a lot about 1:01:50.480 --> 1:01:52.880 ris funds going through a lot of pain. They have 1:01:52.960 --> 1:01:55.320 to make up those losses, and so the reason why 1:01:55.360 --> 1:01:57.520 you don't see Chase Coleman or someone on the list 1:01:57.560 --> 1:01:59.600 is because they're trying to get themselves out of that hole. 1:01:59.680 --> 1:01:59.919 Wow. 1:02:00.120 --> 1:02:02.360 As we said, the most red story in the Bloomberg Today. 1:02:02.480 --> 1:02:04.720 Im a Parmer hedge fund reporter at Bloomberg News. Be 1:02:04.760 --> 1:02:06.760 sure to check it out at Bloomberg dot com. Joining 1:02:06.800 --> 1:02:07.480 us in the Studio. 1:02:07.600 --> 1:02:08.280 This is Bloomberg. 1:02:14.840 --> 1:02:18.720 You're listening to the Bloomberg Business Week podcast. Listen live 1:02:18.800 --> 1:02:22.160 each weekday starting at two pm Eastern on Applecarplay and 1:02:22.160 --> 1:02:25.160 Android Auto with the Bloomberg Business Ad. You can also 1:02:25.240 --> 1:02:28.439 listen live on Amazon Alexa from our flagship New York 1:02:28.480 --> 1:02:31.880 station Just Say Alexa playing Bloomberg eleven thirty. 1:02:33.000 --> 1:02:36.520 Here's a fun little exercise. Find someone from Pennsylvania for 1:02:36.640 --> 1:02:39.240 Southern New Jersey and ask them about wah Wah and 1:02:39.280 --> 1:02:42.160 then just sit back and listen. Don't say anything, or 1:02:42.280 --> 1:02:44.640 just listen to the celebrities. Kate Winslett called it a 1:02:44.680 --> 1:02:47.760 mythical place. Tina Fey hoisted a basket of its hogies 1:02:47.760 --> 1:02:50.680 in a Saturday Night Live skit. Harry Styles of All 1:02:50.720 --> 1:02:54.160 People says it's one of his favorite things about Philadelphia. 1:02:54.280 --> 1:02:56.280 Wah Wah is not just a place to get gas. 1:02:56.560 --> 1:02:59.280 As Jordan Fitzgerald writes, the convenience store chain has built 1:02:59.280 --> 1:03:03.520 a fiercely loyal customer base by capturing a certain Jennesse 1:03:03.680 --> 1:03:07.400 quah about the personality of Philly and South Jersey. But now, 1:03:07.440 --> 1:03:10.560 for the first time, the Bloomberg Billionaires Index is valuing 1:03:10.640 --> 1:03:13.080 the Wood families net worth that's the family that started 1:03:13.120 --> 1:03:16.440 it years ago and owns a majority stake. Jordan Fitzgerald 1:03:16.520 --> 1:03:18.320 is Wealth Team reporter for Bloomberg NUR. She's with us 1:03:18.320 --> 1:03:21.640 here in the Bloomberg Interactive Broker's studio. So drum roll, Jordan. 1:03:22.320 --> 1:03:27.000 The Wood family, the wah Wah kings and queens. How 1:03:27.080 --> 1:03:27.720 much are they worth? 1:03:28.040 --> 1:03:29.200 About six billion dollars? 1:03:29.280 --> 1:03:32.000 Okay, that's a lot of hogies, a lot of hogies. 1:03:32.120 --> 1:03:33.840 The people got to have their hogies. 1:03:33.440 --> 1:03:35.600 The people. So how did you make this calculation? You're 1:03:35.640 --> 1:03:36.280 on the wealth team. 1:03:36.880 --> 1:03:39.880 I have to admit I am not a valuations person. 1:03:40.280 --> 1:03:41.640 We have, you know, the. 1:03:41.640 --> 1:03:44.600 People who you have people, you have people who do that. Okay, 1:03:44.600 --> 1:03:46.000 but take us through some of the numbers. Because they 1:03:46.040 --> 1:03:47.200 do have a thousand locations. 1:03:47.240 --> 1:03:50.080 They have a thousand locations. They want to build about 1:03:50.240 --> 1:03:52.640 three hundred more in the coming years. They're saying it's 1:03:52.640 --> 1:03:56.439 like their biggest growth push that they've ever done, and 1:03:56.480 --> 1:03:59.000 they're pretty confident that they can make the wah Wah 1:03:59.000 --> 1:04:01.560 magic like trans for beyond Philly in Jersey. 1:04:01.640 --> 1:04:03.160 You know, it's funny if you think about wa Wah 1:04:03.680 --> 1:04:05.400 A little bit of detail for you here, Tim, it's 1:04:05.480 --> 1:04:09.040 not your average a gas station, probably Helifornia. 1:04:09.040 --> 1:04:10.560 You never had at a gas station. 1:04:11.120 --> 1:04:12.040 It's quite crazy. 1:04:12.120 --> 1:04:15.200 I went out to various wah wahs on last Friday 1:04:15.200 --> 1:04:18.000 and I got lunch at a drink for five dollars. 1:04:18.040 --> 1:04:19.560 I was like, this is magic. 1:04:19.760 --> 1:04:22.160 Well, is that why it's doing so well that you 1:04:22.240 --> 1:04:24.120 can get that lunch and a drink for five dollars 1:04:24.160 --> 1:04:26.560 at a time where inslation is just roaring in this country. 1:04:26.600 --> 1:04:28.440 I think it's part that. In part you go there 1:04:28.480 --> 1:04:29.880 and you can get everything you need. 1:04:29.760 --> 1:04:30.320 In one stop. 1:04:30.360 --> 1:04:32.840 You can get someone gets their gas pumped outside and 1:04:32.880 --> 1:04:35.920 you can run in and get all your food and coffee. 1:04:35.520 --> 1:04:37.640 Needed, especially if it's in New Jersey where you're still 1:04:37.680 --> 1:04:38.440 not allowed to pump you on. 1:04:38.760 --> 1:04:40.720 And you know, I love having my gas. 1:04:41.760 --> 1:04:47.840 People like you from New Jersey right now, so I'm 1:04:47.840 --> 1:04:50.400 going to sit tight. I'm not going to talk about it, 1:04:50.880 --> 1:04:53.360 but I want to put my own gas. Okay, sorry, Shanela, 1:04:53.400 --> 1:04:54.160 you're asking. 1:04:53.960 --> 1:04:56.000 Why wah wa wai now, I mean, we'll caught your 1:04:56.000 --> 1:05:00.400 eye about this family and their growth at this point 1:05:00.440 --> 1:05:00.840 in time. 1:05:01.240 --> 1:05:02.600 I honestly can't take credit for that. 1:05:03.040 --> 1:05:05.800 I think the numbers people really identified that this was 1:05:05.840 --> 1:05:07.640 an area for us to focus on and I was 1:05:07.680 --> 1:05:09.920 tapped in because I am as we established from New 1:05:10.000 --> 1:05:12.000 Jersey and they were like, we're profiling you to do this, 1:05:12.160 --> 1:05:13.240 and I said thank you. 1:05:14.440 --> 1:05:17.520 So I have to say, as a Californian somebody who 1:05:17.520 --> 1:05:21.040 has not frequented many wah wahs, I was shocked to 1:05:21.120 --> 1:05:24.000 find that it has such a following. Yeah, I had 1:05:24.000 --> 1:05:26.800 never heard of it until I moved to the East Coast. 1:05:27.240 --> 1:05:29.920 And I'm wondering if the company is going to be 1:05:29.920 --> 1:05:32.960 able to take what is something regional right now and 1:05:33.040 --> 1:05:36.480 actually make it grow because there is like there's another 1:05:36.560 --> 1:05:39.960 chain down south, BUCkies that people freak out about. I've 1:05:40.000 --> 1:05:42.720 never been to a BUCkies, but apparently people love it, 1:05:43.040 --> 1:05:45.880 so like different parts of the country have different things 1:05:45.920 --> 1:05:48.360 that people like. Is it transferable? 1:05:49.240 --> 1:05:50.600 I think that's time will tell. 1:05:50.680 --> 1:05:52.800 They've definitely struggled a little bit with that in the 1:05:52.840 --> 1:05:56.000 past when expanding even to northern New Jersey. They tried 1:05:56.000 --> 1:05:59.400 handing out Philadelphia Eagles calendars and the Giants fans were 1:05:59.400 --> 1:06:02.640 not happy. And so, yeah, do you think like that 1:06:02.760 --> 1:06:04.560 is the thing people are thinking about, like will the 1:06:04.560 --> 1:06:07.360 wah Wah magic transfer The company's very confident that it will. 1:06:07.400 --> 1:06:09.439 The employees I talk to really think that they bring 1:06:09.520 --> 1:06:12.720 a certain level of service that anyone from any part 1:06:12.720 --> 1:06:15.800 of the country will desire. But you know, not everyone 1:06:15.800 --> 1:06:16.640 calls a HOGI a HOGI. 1:06:16.840 --> 1:06:18.120 Not everyone might be looking for that. 1:06:18.200 --> 1:06:19.560 Well, what are some of the other things that they're 1:06:19.600 --> 1:06:21.720 doing to try to attract those customers in different parts 1:06:21.760 --> 1:06:22.320 of the country. 1:06:22.440 --> 1:06:24.320 I think they're really just trusting their business model and 1:06:24.360 --> 1:06:27.840 they're not going They're not seeking California yet. They're really 1:06:28.200 --> 1:06:31.200 you know, pushing down south, pushing out into the Midwest 1:06:31.600 --> 1:06:34.160 areas that are border where they already are established and 1:06:34.200 --> 1:06:37.640 already are successful, and hope there might be I think 1:06:37.720 --> 1:06:40.080 some regional appeal that can very easily spread. 1:06:40.320 --> 1:06:43.720 Okay, Jordan, for people listening all over the country, all 1:06:43.760 --> 1:06:45.880 over the world right now who have not been to 1:06:46.000 --> 1:06:49.400 a wah wah, talk about what you did on Friday, 1:06:49.760 --> 1:06:51.800 what you saw, and share your experience. 1:06:52.240 --> 1:06:52.479 Yeah. 1:06:52.520 --> 1:06:55.920 I drove to about five different wuah wah locations and 1:06:56.480 --> 1:06:59.880 observed a little bit, talked to a few people and 1:07:00.240 --> 1:07:01.440 just tried to figure. 1:07:01.200 --> 1:07:03.680 Out like what to try to distill the Wawa magic. 1:07:03.840 --> 1:07:08.560 And the employees seem to really enjoy the vibe of 1:07:08.720 --> 1:07:11.480 that they create. They sometimes when I was talking to 1:07:11.680 --> 1:07:13.960 an employee or a customer, like people would hear me 1:07:14.000 --> 1:07:16.080 asking what they love about wah Wah and someone else 1:07:16.080 --> 1:07:17.880 would jump in and be like their pizza is weirdly 1:07:17.960 --> 1:07:22.280 good or and yeah, it just seems to be a 1:07:22.280 --> 1:07:24.440 thing that provokes a reaction from I. 1:07:24.400 --> 1:07:26.640 Mean, Shanellie, what about you, like you spent you went 1:07:26.640 --> 1:07:27.120 to college? 1:07:27.160 --> 1:07:27.880 In fact, yeah, I went. 1:07:28.400 --> 1:07:30.840 I went to a college very much down the street 1:07:30.840 --> 1:07:33.560 from a Wahwah, and you know, we were just in 1:07:33.600 --> 1:07:35.640 the middle of, you know, late night studying. 1:07:35.680 --> 1:07:37.720 We would just go get wraps from wah Wah like 1:07:37.760 --> 1:07:38.120 you would. 1:07:38.200 --> 1:07:39.240 You would it would be. 1:07:39.080 --> 1:07:41.600 Better than the school cafeteria that was That was the 1:07:42.000 --> 1:07:42.959 bar high for that though. 1:07:43.720 --> 1:07:45.160 That's a good question exactly. 1:07:45.480 --> 1:07:47.080 I'm wondering, Jordan, if it has to do with the 1:07:47.120 --> 1:07:50.040 fact that oftentimes stopping at a gas station to pick 1:07:50.080 --> 1:07:51.840 something up or go to the bathroom is like not 1:07:51.960 --> 1:07:55.000 a good experience. Things are disgusting, the staff doesn't want 1:07:55.000 --> 1:07:57.760 to be there. Did you get a feeling like it's 1:07:57.760 --> 1:08:00.000 sort of the opposite. It's like it's a family owned 1:08:00.240 --> 1:08:03.760 convenience store chain and the people who work there take 1:08:03.760 --> 1:08:04.320 pride in it. 1:08:04.800 --> 1:08:07.560 Yeah, definitely, and it's bigger. You can get fresh food there, 1:08:07.560 --> 1:08:10.080 which you can at a lot of different convenience stores 1:08:10.080 --> 1:08:14.000 and gas stations. And I do think like they treat 1:08:14.040 --> 1:08:16.280 their employees pretty well, and their employees put that back 1:08:16.320 --> 1:08:19.960 into the customer base. They have a really, really large 1:08:20.200 --> 1:08:23.000 employee ownership program. The employees own over thirty percent of 1:08:23.000 --> 1:08:23.479 the company. 1:08:23.880 --> 1:08:24.400 Wow. 1:08:24.800 --> 1:08:26.560 Okay, So talk to us a little bit about the 1:08:26.600 --> 1:08:28.760 history here in the Wood family's involvement, because they don't 1:08:28.760 --> 1:08:29.320 own all of it. 1:08:29.760 --> 1:08:31.280 They don't own all of it. They own a little 1:08:31.280 --> 1:08:31.840 over half. 1:08:32.360 --> 1:08:35.439 And the chain started in the sixties. The Wood family 1:08:35.439 --> 1:08:38.320 had been established in Pennsylvania for a couple hundred years, 1:08:38.360 --> 1:08:42.080 but they owned a dairy farm and one of the 1:08:42.160 --> 1:08:44.519 science decided, I'm going to open up a convenience store 1:08:44.560 --> 1:08:45.320 to sell our milk. 1:08:45.360 --> 1:08:46.599 And it all started from there. 1:08:47.080 --> 1:08:48.680 Do we know why it's called Wahwah? 1:08:48.720 --> 1:08:49.800 I did look this up. 1:08:49.840 --> 1:08:54.120 Specifically, it is called Wahwah because apparently their dairy farm 1:08:54.160 --> 1:08:56.360 was in a region of Pennsylvania called the Wahwah region, 1:08:56.400 --> 1:09:00.120 which is like anous, an Indigenous word for like the 1:09:00.160 --> 1:09:02.360 Canada goose. So that's why there's a little goose flying 1:09:02.360 --> 1:09:02.960 over their logo. 1:09:03.160 --> 1:09:05.000 I mean, I will tell you right now, people listening 1:09:05.000 --> 1:09:06.680 who are not in New Jersey or New York or 1:09:06.720 --> 1:09:08.280 Pennsylvania have no idea what. 1:09:08.160 --> 1:09:11.000 We They have no idea, and they're probably a little 1:09:11.000 --> 1:09:14.240 weirded out. But people who are from this region, I'd 1:09:14.240 --> 1:09:16.040 be getting emails all dating like, oh my god, you 1:09:16.080 --> 1:09:16.879 talked about Wallah. 1:09:17.200 --> 1:09:18.760 Maybe we can call it like the in and out 1:09:18.760 --> 1:09:21.040 burger of gas station convenience stores. 1:09:21.080 --> 1:09:24.120 Perhaps, but I do think the buckiest folks would take it. 1:09:24.640 --> 1:09:27.479 I think about it more like you know, when you're 1:09:27.520 --> 1:09:29.479 just driving down a long highway and you stop at 1:09:29.479 --> 1:09:31.640 a rest stop and you have like the Starbucks and 1:09:31.640 --> 1:09:36.120 the Dunkin Donuts. It's like more like that kind of vibe. 1:09:35.840 --> 1:09:37.640 Than it is stopping at it like an X. 1:09:37.760 --> 1:09:44.240 Yeah, okay, this is pop scale consumers employee ownership. 1:09:44.520 --> 1:09:46.200 That's a big deal here. I mean, that's not something 1:09:46.240 --> 1:09:48.080 you see with types of stores like this. 1:09:48.520 --> 1:09:50.719 No, And it seems to be a thing that they've 1:09:50.760 --> 1:09:52.519 always done. They seem to take pride in it. They 1:09:52.840 --> 1:09:56.000 advertise it on their website and yeah. I talked to 1:09:56.320 --> 1:10:00.880 a while employee who she was twenty years old. She 1:10:01.160 --> 1:10:03.200 went to Wah wah every day for breakfast at high school, 1:10:03.200 --> 1:10:04.600 and when she graduated, she was like, I want to 1:10:04.600 --> 1:10:06.920 spend more time here and decided to start working at WAHA. 1:10:07.280 --> 1:10:09.000 Well, I will tell you I emailed this to somebody. 1:10:09.000 --> 1:10:12.040 She will go unnamed, but she knows who she is. 1:10:12.360 --> 1:10:14.879 She's very high up here at Bloomberg in the newsroom 1:10:15.080 --> 1:10:17.120 because she's from Pennsylvania. I said, how many people have 1:10:17.160 --> 1:10:19.640 emailed this to you? And she said, my daughter was 1:10:19.760 --> 1:10:23.000 very upset after a softball tournament. All she wanted was 1:10:23.000 --> 1:10:25.360 a wah wah. You know what I did. I made 1:10:25.360 --> 1:10:27.280 sure to find the closest wah wah and put it 1:10:27.320 --> 1:10:31.679 into my GPS and it solved everything. So wahwah, here's everything. 1:10:31.720 --> 1:10:35.040 And Jordan Fitzgerald is a fantastic reporter and we're so 1:10:35.080 --> 1:10:37.559 happy to have her here at Bloomberg writing about woahwah. 1:10:37.600 --> 1:10:39.960 She's wealtheam reporter for Bloomberger. She joins us in the 1:10:39.960 --> 1:10:41.519 Bloomberg Interactive Broker's Studio. 1:10:42.360 --> 1:10:45.920 You're listening to the Bloomberg Business Week podcast. Catch us 1:10:45.960 --> 1:10:49.200 live weekday afternoons from two to five pm Eastern Listen 1:10:49.240 --> 1:10:51.400 on Apple car Play and ed Brout Auto with a 1:10:51.400 --> 1:10:55.560 Bloomberg Business app or watch us live on YouTube. 1:10:56.800 --> 1:10:59.200 Yes, you will be googled and talked about all day. 1:10:59.280 --> 1:11:01.680 Yes you're everyone wish is their demand. And if you 1:11:01.720 --> 1:11:04.280 need a private plan to fly edible souvenirs back home, 1:11:04.280 --> 1:11:05.920 no problem, They'll work it out for you. 1:11:06.479 --> 1:11:09.400 It's time for Bloomberg Pursuits, where the opener is all 1:11:09.439 --> 1:11:12.599 about the eight Secrets of fancy Hotels. Learn well working 1:11:12.640 --> 1:11:17.240 as a butler at a super uber Lux hotel in Singapore. 1:11:17.840 --> 1:11:21.120 Vvip Did you know what that was, Carol? It's a 1:11:21.200 --> 1:11:22.040 vv ip o. 1:11:22.080 --> 1:11:24.600 You guys are vv oh we love you. 1:11:24.880 --> 1:11:27.960 That's Chris Rouser, the editor of Bloomberg Pursuits. Also joining 1:11:28.040 --> 1:11:32.120 us as Bloomberg Pursuits contributor Brandon Presser. Okay, let's start 1:11:32.160 --> 1:11:35.479 with this. We fly to Singapore in our private jet. Yes, check, 1:11:35.680 --> 1:11:39.240 you have a separate chet come for your other family Okay? Yeah, 1:11:39.280 --> 1:11:41.240 and then you want to go to the fanciest of 1:11:41.320 --> 1:11:43.679 fancy hotels. Chris, what's it called. 1:11:43.840 --> 1:11:48.559 It's called the Raffles in Singapore, and Raffles is a 1:11:48.640 --> 1:11:51.720 legendary hotel more than one hundred years old. It's a 1:11:51.760 --> 1:11:54.360 brand that is now expanding around the world. But The 1:11:54.400 --> 1:11:57.439 original is in Singapore and it's literally a national landmark. 1:11:57.720 --> 1:11:59.960 It sets the bar for service all around the world. 1:12:00.240 --> 1:12:03.559 So by setting the service, and that means what everybody 1:12:03.560 --> 1:12:04.479 gets a butler. 1:12:04.600 --> 1:12:07.440 Well, there's twenty five butlers and they each get twenty rooms. 1:12:07.040 --> 1:12:09.559 So what we did, so we have this thing where 1:12:09.560 --> 1:12:12.800 we send Brandon to work behind the scenes at extremely 1:12:12.920 --> 1:12:15.639 luxury locations. So he's been a ski instructor at Aspen, 1:12:16.160 --> 1:12:18.559 he's been a major d at Nobu, he worked at 1:12:18.560 --> 1:12:19.400 disney World, if. 1:12:19.280 --> 1:12:20.920 You'll recall that one. 1:12:21.880 --> 1:12:24.280 So we go send him behind the scenes to figure 1:12:24.280 --> 1:12:27.240 out the secrets of service at these very very luxury places. 1:12:27.520 --> 1:12:29.880 And there's no place that has a better reputation for 1:12:30.040 --> 1:12:33.439 luxury than the Raffles. So Brandon, who has a bit 1:12:33.479 --> 1:12:35.679 of a personal connection to the Raffles, went to work 1:12:35.720 --> 1:12:37.360 there as a butler. 1:12:37.479 --> 1:12:38.920 That's right, Brandon. I think we have to take it 1:12:38.960 --> 1:12:41.360 back to what two thousand and three, right, because initially 1:12:41.400 --> 1:12:42.559 you kind of wanted to be there. 1:12:42.840 --> 1:12:45.800 Yeah, it was something that I was considering as a 1:12:45.840 --> 1:12:48.160 recent high school graduate, kind of trying to figure out 1:12:48.160 --> 1:12:49.680 what I wanted to do to my career, and I 1:12:49.720 --> 1:12:52.880 thought maybe to pursue a career in hospitality and do 1:12:52.920 --> 1:12:55.559 an internship in a hotel. So I actually applied to 1:12:55.640 --> 1:12:59.200 work at the Raffles i'us Singapore back then, and it 1:12:59.280 --> 1:13:01.760 was a go and I was all said to make 1:13:01.800 --> 1:13:06.000 it happen, and then stars hit and everything kind of 1:13:06.000 --> 1:13:09.360 fell apart. So this was my sliding doors moment where 1:13:09.360 --> 1:13:11.479 it all kind of came back together and I got 1:13:11.479 --> 1:13:12.920 to be an intern in twenty years later. 1:13:13.040 --> 1:13:15.879 Okay, so what happened this time? Twenty years later? COVID 1:13:15.880 --> 1:13:19.240 has hit and now Singapore has over the last twenty 1:13:19.320 --> 1:13:23.799 years become even more luxurious, where people spend, as you argue, 1:13:23.920 --> 1:13:28.600 ten times more than the typical wealthy American. Set the 1:13:28.640 --> 1:13:29.479 scene for us. 1:13:29.640 --> 1:13:32.559 Yeah, you know, I think the Billboard takeaway of my 1:13:32.640 --> 1:13:38.160 experience in Singapore working there is that the new money 1:13:38.680 --> 1:13:44.080 in Asia just powers over the old money in the West. 1:13:44.800 --> 1:13:48.400 When we conceive a luxury and we're thinking about what 1:13:48.400 --> 1:13:52.600 people might be buying, it's a lot of Prata, Gucci's 1:13:52.800 --> 1:13:56.280 your chanel. But the real interesting thing, and the real 1:13:56.520 --> 1:14:04.400 sort of luxury braggadosio is actually cars and seafood. Cars 1:14:04.400 --> 1:14:07.360 are so expensive in Singapore because you have to have 1:14:07.400 --> 1:14:11.400 a special license to get a vehicle, and there's a 1:14:11.479 --> 1:14:15.400 one hundred percent importing tax on the car. So even 1:14:15.479 --> 1:14:17.800 just throwing your carkis down on a table, even if 1:14:17.840 --> 1:14:20.400 it's a Camray, people like, oh my gosh, you own 1:14:20.439 --> 1:14:22.759 a car. Wow, it's more expensive that the house. 1:14:23.680 --> 1:14:23.800 Uh. 1:14:23.960 --> 1:14:27.280 And then it's seafood. That's the ultimate brag, you know, 1:14:27.680 --> 1:14:31.800 having your butler. And this is something that we actually did. 1:14:32.360 --> 1:14:36.799 Had a butler get someone to fish a rare crab 1:14:36.960 --> 1:14:39.800 out of an obscure lake in rural China and have 1:14:39.920 --> 1:14:42.320 a ship to the hotel and cook for thousands and 1:14:42.360 --> 1:14:43.280 thousands of dollars. 1:14:43.720 --> 1:14:44.639 Is this the hairy crab? 1:14:45.200 --> 1:14:46.040 It's the hairy crab? 1:14:47.000 --> 1:14:50.840 Which I had that. 1:14:50.800 --> 1:14:52.040 With my pasta last night. 1:14:52.080 --> 1:14:54.040 What are you guys talking about? Chris? 1:14:54.080 --> 1:14:56.680 As you like I always, you know, the back and 1:14:56.720 --> 1:14:59.160 forth with you know Brandon. I'm sure he goes and 1:14:59.200 --> 1:15:01.639 he comes back with take us to one of your 1:15:01.680 --> 1:15:02.479 favorite parts of this. 1:15:02.600 --> 1:15:02.800 Well. 1:15:02.840 --> 1:15:04.799 You know what I love is so people are splashing 1:15:04.800 --> 1:15:07.599 a lot of money around and where the butler's come 1:15:07.640 --> 1:15:10.320 in is making the magic happen, right, So like so 1:15:10.400 --> 1:15:12.120 I love this example of there was a twelve year 1:15:12.120 --> 1:15:15.200 old kid under twelve who wanted to splash a lot 1:15:15.200 --> 1:15:18.360 of money around. And so the butlers did that. They 1:15:18.479 --> 1:15:20.879 arranged it for him. They arrange for the local doors 1:15:21.000 --> 1:15:26.320 or to stay open late till eleven pm. Come on, kids, kids, 1:15:26.360 --> 1:15:31.000 of course you know it's thrown up. Okay, but he 1:15:31.080 --> 1:15:33.639 did go to Toys r US and just buy a whole 1:15:33.680 --> 1:15:36.280 aisle worth of toys of one hand gesture about six 1:15:36.360 --> 1:15:39.280 of you know, sixty thousand Singaporean dollars worth. I just 1:15:39.320 --> 1:15:41.640 love the idea of this butler making this happen a 1:15:41.720 --> 1:15:44.439 lot of times when you you can get like a 1:15:44.439 --> 1:15:46.720 one on one assignment. So usually normally butlers have like 1:15:46.720 --> 1:15:49.400 twenty rooms, but you can get assigned to one person. 1:15:49.479 --> 1:15:51.439 But that means that you are with them twenty four 1:15:51.439 --> 1:15:53.040 to seven. So if they like text in the middle 1:15:53.040 --> 1:15:55.040 of the night, you got to show up. And these 1:15:55.080 --> 1:15:58.559 things can involve like real hands on work for example 1:15:58.600 --> 1:16:00.960 that you often the butler have to take people on 1:16:01.120 --> 1:16:03.479 tours of the botanical gardens. They have to know all 1:16:03.520 --> 1:16:07.240 these facts about orchids. They babysit children for you, like 1:16:07.280 --> 1:16:09.919 all these Like butlers have to do everything. 1:16:10.120 --> 1:16:13.200 Okay, Brandon, there are some things the butlers will not do. 1:16:13.600 --> 1:16:17.760 There are some things will not go there. 1:16:19.000 --> 1:16:23.479 Yeah, it's a very discreet hotel, I'd say, so anything 1:16:23.520 --> 1:16:28.759 that verges into the bedroom activities zone is pretty taboo 1:16:28.760 --> 1:16:29.920 and they won't help you. 1:16:29.880 --> 1:16:30.400 Out with that. 1:16:30.600 --> 1:16:33.960 So, you know, the butlers were really keen to share all, 1:16:34.080 --> 1:16:36.080 you know, kind of the fun behind the scenes bits 1:16:36.080 --> 1:16:39.800 of all the celebrities that they served, but really there 1:16:39.880 --> 1:16:42.439 was a prudishness that came into play when when it 1:16:42.479 --> 1:16:44.280 came to the sex stuff. 1:16:44.360 --> 1:16:47.240 Well that said, I wasn't joking about the two families thing, 1:16:47.520 --> 1:16:50.320 because one story that you do share from the butlers 1:16:50.800 --> 1:16:53.280 is the fact that sometimes they have to be in 1:16:53.360 --> 1:16:56.280 charge of keeping secret families separate from one another. 1:16:58.280 --> 1:17:01.400 Indeed, there was a man who flew in on his 1:17:01.439 --> 1:17:04.760 private chat and flew in his wife and set her 1:17:04.800 --> 1:17:07.320 up at the hotel, and then all of a sudden 1:17:07.360 --> 1:17:09.679 there was the second private jet and a second wife 1:17:09.680 --> 1:17:12.439 and a second set of chicks that they probably set 1:17:12.520 --> 1:17:15.439 up in a hotel in very different wings of the hotel. 1:17:15.960 --> 1:17:20.760 And never the two shall meet was the on the 1:17:20.800 --> 1:17:21.960 task at hands. 1:17:21.640 --> 1:17:24.920 No family family dinners, yes, no. 1:17:25.439 --> 1:17:29.880 Double family dinner. That guest was particularly interested in the 1:17:30.080 --> 1:17:34.040 casino at Marina bass An. So when the wife was 1:17:34.040 --> 1:17:36.839 wondering why the husband wasn't returning to bed in the evening. 1:17:37.000 --> 1:17:39.080 It was actually because he was gambling and he wasn't 1:17:39.080 --> 1:17:41.200 in either of the room. 1:17:41.240 --> 1:17:44.080 We had a similar anecdote from when Brandon went behind 1:17:44.080 --> 1:17:46.960 the scenes in Vegas, another two family anecdote. And I 1:17:47.680 --> 1:17:49.599 want to say it's the same family, but I bet 1:17:49.600 --> 1:17:49.880 it's not. 1:17:52.720 --> 1:17:54.280 I have to say some of the absurd. 1:17:54.840 --> 1:17:58.120 Go ahead, no, please, I can affirm that it's actually 1:17:58.200 --> 1:18:00.920 a different family, because I do know the identities of 1:18:00.960 --> 1:18:02.320 these two families. Are there different? 1:18:03.000 --> 1:18:06.479 Oh the secrets, you know, the secrets you know, you know, 1:18:07.120 --> 1:18:10.920 we tease this story talking about you know, Coca Cola 1:18:11.040 --> 1:18:15.639 from Indonesia, people bringing in their own washing machine because 1:18:15.680 --> 1:18:19.599 that's how they wanted they're clothes washed or pink toilet paper. 1:18:20.360 --> 1:18:22.400 Yeah, I wanted to play a little bit with the 1:18:22.439 --> 1:18:25.000 idea of name brand. You know, we're all so brand 1:18:25.080 --> 1:18:28.920 conscious and we're you know, thinking in the luxury world 1:18:29.000 --> 1:18:32.360 that it's again you know, the Pratas and the Chanelles, 1:18:33.080 --> 1:18:37.000 but that luxury that brand faciliation really occurs all the 1:18:37.040 --> 1:18:39.559 way down to Coca Cola. There wasn't guests who wanted 1:18:39.560 --> 1:18:42.519 a specific kind of palm sugar in his Coca cola, 1:18:42.760 --> 1:18:45.400 and they only produce that in Indonesia. And there was 1:18:45.400 --> 1:18:47.920 the guests who will only use a certain type of 1:18:48.120 --> 1:18:50.439 washing machine or a certain type of toilet paper, And 1:18:50.439 --> 1:18:53.720 I kind of just love unraveling that a little bit 1:18:53.760 --> 1:18:56.360 and playing with more unconventional brands. 1:18:56.520 --> 1:18:58.960 That coke thing is real. People love regional cokes. I 1:18:59.000 --> 1:19:01.080 will say, I love the the person who would only 1:19:01.120 --> 1:19:04.519 eat bright red peekaboo pears, which are crossbread on a 1:19:04.560 --> 1:19:08.920 specific farm in New Zealand. That's the level of neediness 1:19:08.960 --> 1:19:09.800 that I aspire to. 1:19:10.760 --> 1:19:11.200 Good luck. 1:19:15.080 --> 1:19:17.719 Do you know my husband likes Mexican coke. 1:19:19.200 --> 1:19:20.360 And I'll be like, what are you talking about? 1:19:21.080 --> 1:19:23.400 Easy to get relatively at least in the New York 1:19:23.479 --> 1:19:24.040 City area. 1:19:24.160 --> 1:19:24.959 Yeah, exactly. 1:19:25.200 --> 1:19:26.599 I have to say I was a little also. 1:19:26.720 --> 1:19:29.400 I thought it was interesting how you are Butler's kind 1:19:29.439 --> 1:19:33.200 of among yourself. We're sharing information, data mining on the guests. 1:19:33.240 --> 1:19:36.320 I mean you were constantly sharing, like what what they did, 1:19:36.400 --> 1:19:38.680 were they, you know, sleeping on one side of the bed. 1:19:38.720 --> 1:19:41.000 I mean, all of that stuff spoke to kind of 1:19:41.000 --> 1:19:42.519 the high level of care you guys were doing. 1:19:43.000 --> 1:19:45.120 That was actually one of the most incredible things with 1:19:45.320 --> 1:19:50.080 sitting in this all hands meeting where they have the roster, 1:19:50.439 --> 1:19:52.920 you know, like the great roster of every single guest, 1:19:52.960 --> 1:19:56.840 and we actually went through every single guest staying at 1:19:56.840 --> 1:20:00.400 the hotel and discussed all of their preferences if they 1:20:00.479 --> 1:20:02.960 are left handed, what side of the bed based sleep on, 1:20:03.040 --> 1:20:05.639 what's the preferred language, and we were trying to figure 1:20:05.680 --> 1:20:09.640 out how to enhance the stay. Oh, this guest talks 1:20:09.680 --> 1:20:11.759 about how he loves book Let's get him a bookmark. 1:20:11.840 --> 1:20:15.440 This guest loves gardening, Let's buy a book about Singapore 1:20:15.600 --> 1:20:17.880 and plant It was, it was truly fascinating. 1:20:17.920 --> 1:20:19.679 So when you guys do that stuff just real quickly, 1:20:19.720 --> 1:20:22.000 I mean you just you eat the cost or they 1:20:22.000 --> 1:20:25.080 eat the cost, right I assume in terms of the catering. 1:20:25.240 --> 1:20:29.000 Yeah, so yeah, it is. It is sort of in 1:20:29.040 --> 1:20:33.680 this well the coffer that we did in too, and 1:20:33.680 --> 1:20:36.559 and you know, we kind of buy different things. It's 1:20:36.600 --> 1:20:39.000 a lot of times it's it's food and beverage from 1:20:39.040 --> 1:20:41.519 the hotel, but it's it's it's fun that it kind 1:20:41.520 --> 1:20:44.800 of veers into gossips sometimes, like someone had the particularly 1:20:44.840 --> 1:20:49.519 dirty room, so they need to call into reinforcement, and 1:20:49.600 --> 1:20:52.400 that's that's the more fun part. It's like gossiping about 1:20:52.439 --> 1:20:53.800 what people see in the room. 1:20:54.439 --> 1:20:56.400 Okay, Well, speaking of food and drink, the Raffles is 1:20:56.439 --> 1:21:01.519 just a legendary hotel. This is a place where you know, 1:21:01.600 --> 1:21:05.759 Rudyard Kipling wrote The Jungle Book, Joseph Conrad, Elizabeth Taylor 1:21:06.160 --> 1:21:10.080 were legendary were you know, had stayed there. The Singapore 1:21:10.120 --> 1:21:12.880 Sling was also invented there. What is it and how 1:21:13.000 --> 1:21:14.400 much do they earn from this drink? 1:21:15.320 --> 1:21:18.320 Yeah? So I think maybe even more famous than the 1:21:18.320 --> 1:21:21.240 refels to Singapore is the Singapore Sling. So it was 1:21:21.360 --> 1:21:24.799 invented at a hotel about over one hundred years ago, 1:21:25.439 --> 1:21:28.120 and it was actually a way for women to consume 1:21:28.160 --> 1:21:30.479 alcohol in public because at that time it was forbidden. 1:21:30.520 --> 1:21:34.000 So it's a very colorful, gin based drink that really 1:21:34.040 --> 1:21:36.400 just looks like a juice and frankly, it tastes like 1:21:36.439 --> 1:21:38.800 a juice and it's really dangerous because it's about thirty 1:21:38.800 --> 1:21:43.559 three thirty four percent alcohol and it's super famous for tourists. 1:21:43.640 --> 1:21:47.400 They line up by they open at noon and there's 1:21:47.439 --> 1:21:50.960 a big line by eleven thirty and people come in. 1:21:51.000 --> 1:21:53.120 They spend about thirty to forty minutes, they have one 1:21:53.200 --> 1:21:59.360 or two slings and they go and they make about 1:21:59.479 --> 1:22:05.240 ten million dollars America US dollars in profit on that 1:22:05.360 --> 1:22:06.360 drink in one year. 1:22:07.040 --> 1:22:11.120 That is crazy, that's Unbelievablenks Well, there are so much 1:22:12.000 --> 1:22:16.439 rich stuff in this story and there's more in the 1:22:16.479 --> 1:22:20.120 Pursuit section this weekend. So grateful that you could spend 1:22:20.120 --> 1:22:22.200 some time with us and our thanks to Chris as well, 1:22:22.840 --> 1:22:25.400 the editor of Bloomberg Pursuits, of course, Chris Rouser, along 1:22:25.439 --> 1:22:28.120 with Bloomberg Pursuits contributor Brandon Presser. 1:22:28.600 --> 1:22:33.240 This is the Bloomberg Business Week podcast of a Little Apple, Spotify, 1:22:33.360 --> 1:22:37.080 and anywhere else you get your podcast. Listen live weekday 1:22:37.120 --> 1:22:40.719 afternoons from two to five pm Eastern on Bloomberg dot com, 1:22:40.760 --> 1:22:44.080 the iHeartRadio app, tune In, and the Bloomberg Business app. 1:22:44.120 --> 1:22:47.200 You can also watch us live every weekday on YouTube 1:22:47.320 --> 1:22:49.320 and always on the Bloomberg terminal