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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along

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Speaker 2: with Paul Sweeney. Join us each day for insight from

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Speaker 2: the best in economics, finance, investment, and international relations. You

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Speaker 2: can also watch the show live on YouTube. Visit the

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Speaker 2: Bloomberg Podcast channel on YouTube to see the show weekday

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Speaker 2: headquarters in New York City. Subscribe to the podcast on Apple, Spotify,

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Speaker 2: or anywhere else you listen and always I'm Bloomberg Radio,

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Speaker 2: the Bloomberg Terminal, and the Bloomberg Business App. Kathy Greifeld

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Speaker 2: in for Paul Sweene. We've got a qualified guest to

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Speaker 2: drive forward this.

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Speaker 3: Wall of data.

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Speaker 4: Yeah, of course we're going to be speaking to now,

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Speaker 4: Jeffrey Cleveland. He is cheap us, a condommist over at

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Speaker 4: Peydon and Reigel. I let's talk about what we just learned.

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Speaker 4: Of course, retail sales a little bit cooler than anticipated,

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Speaker 4: but PPI coming in hot for February, increasing by point

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Speaker 4: six percent. Of course, consensus had been looking for point

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Speaker 4: three percent. Would love to hear your immediate reaction, because

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Speaker 4: it looks like right now the market's reacting to that PPI.

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Speaker 1: Well, I mean it's early here on the West coast,

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Speaker 1: so maybe I should start with a little controversy. I

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Speaker 1: don't see the case for rate cuts in this data.

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Speaker 1: I mean, just in order of importance for.

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Speaker 5: What I'm looking at.

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Speaker 1: Looking at initial claims dropping back below two hundred and

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Speaker 1: ten thousand in the latest week, I mean exceptionally low

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Speaker 1: layoff activity. So that's the sign of, I think, a

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Speaker 1: still solid labor market. And then if you go next

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Speaker 1: to PPI, it definitely came in hotter than we expected.

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Speaker 1: We already penciled in a point three four pc increase

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Speaker 1: four February so for later this month, So we might

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Speaker 1: have to take another look at this after this broadcast

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Speaker 1: and and me bump that up a little. But nothing

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Speaker 1: there that I think. If I'm a policy maker sitting

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Speaker 1: around Washington next week, I'm going to be really confident

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Speaker 1: that we've done enough. And then the retail sales, I mean,

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Speaker 1: I think Tom is exactly right. Look at Core, look

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Speaker 1: at the control group. The only thing that we always

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Speaker 1: tell clients about retail sales is it's just capturing a

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Speaker 1: subset of consumer spending mostly on goods. I like to

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Speaker 1: look at, you know, consumer incomes still growing at a

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Speaker 1: good pace through February, and I think that will go

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Speaker 1: into spending.

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Speaker 5: So yeah, that's my Takeing different.

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Speaker 3: Cleveland with us a paid RAO.

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Speaker 2: We welcome all of you across America and worldwide. Thrilled

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Speaker 2: with the worldwide performance. Apple car Play is the way

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Speaker 2: to get us. It's a new way to get us

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Speaker 2: safer better. Good morning on Android and Google Play as

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Speaker 2: well on YouTube. Go to Bloomberg Podcasts and it's just growing, growing, growing.

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Speaker 2: Thank you for your interest in Bloomberg Podcasts and our

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Speaker 2: live chat out there.

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Speaker 3: Really in forum. Good morning of all places, Caracas, Venezuela.

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Speaker 2: Thank you so much for coming to us from Caracas

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Speaker 2: this morning.

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Speaker 3: Jeff Jason Furman up.

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Speaker 2: At Harvard had a really important and I don't want

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Speaker 2: to sum up the economic data here, but he had

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Speaker 2: a really important insight, which is three point nine percent

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Speaker 2: unemployment is different than four point zero percent unemployment. When

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Speaker 2: I see claims and what they did today two hundred

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Speaker 2: nine thousand with a constructive fully employed revision from two

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Speaker 2: seventeen to two ten, you don't get to a four

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Speaker 2: percent unemployment, right, do you?

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Speaker 3: No?

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Speaker 1: And you also have continuing claims dipping back below that

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Speaker 1: one point nine, So that looks good. I'm a little

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Speaker 1: skeptical on the three point nine tom that we got

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Speaker 1: last week. I mean, you look at that household survey.

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Speaker 1: You know that is notoriously volatile survey. I think the

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Speaker 1: confidence interval, the plus minus is six hundred thousand on

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Speaker 1: the household employment survey. It was down a bit last month,

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Speaker 1: but it's been volatile in the last year and a half,

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Speaker 1: and it's possible we touch three point nine, but then

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Speaker 1: we see dip back down in the unemployment rate in

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Speaker 1: the months ahead, you know, back to three point seven

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Speaker 1: or something. So I think we're we're gonna stick under

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Speaker 1: four percent for the year. That's that's our forecast.

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Speaker 4: So the labor market it is still hot. Of course,

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Speaker 4: like you said at the top, you don't see any

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Speaker 4: reason for the FED to cut rates.

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Speaker 2: Here.

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Speaker 4: Let's try to create a little bit more controversy. Do

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Speaker 4: you put any water in the theory that maybe actually

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Speaker 4: the next move will be a hike.

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Speaker 1: I think you can't rule it out. Why do I

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Speaker 1: say that it's possible to be controversial, that maybe we're

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Speaker 1: just gonna settle in at a bit higher year on

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Speaker 1: year rate of inflation, not you know, not five percent,

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Speaker 1: not six percent like we saw in the middle of

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Speaker 1: twenty two, but you know, three to four percent, something

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Speaker 1: in that range, and then our policy maker is going

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Speaker 1: to be okay with that. Maybe some are maybe some

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Speaker 1: think that the inflation target should be higher, but I think,

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Speaker 1: buy and large, most policy makers want a two handle

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Speaker 1: on a inflation So three to four percent on core

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Speaker 1: inflation is too high. And in that case, if we

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Speaker 1: just sort of linger there, that might open the door

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Speaker 1: to another hike. In our outlook, we put about a

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Speaker 1: ten percent chance on that for.

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Speaker 5: The year, So you know, it's a risk. It's not

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Speaker 5: our base price, but it is definitely a risk.

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Speaker 2: Katie Chi, your yield up one basis point ten, You're

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Speaker 2: yield up three basis.

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Speaker 3: Points this morning.

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Speaker 4: Yeah, we are seeing a little bit of a cooling

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Speaker 4: of that knee jerk reaction. You take a look at

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Speaker 4: S and P five hundred futures, they're still higher to

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Speaker 4: the tune of two tenths of a percent. They had

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Speaker 4: been looking at a little pre market gain of three

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Speaker 4: tenths of a percent, So not too much action. But

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Speaker 4: let's keep this conversation going on inflation. That's sticky inflation.

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Speaker 4: What keeps inflation elevated maybe to the tune of three

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Speaker 4: to four percent when you really break apart the components, Well, you.

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Speaker 5: Break apart the components we had.

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Speaker 1: We benefited last year from goods prices discillerating quite a bit.

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Speaker 5: Falling year on year.

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Speaker 1: It's possible in our view that that's behind us, and

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Speaker 1: goods prices will be sort of flat. There could be

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Speaker 1: even some upside pressure there. So I wouldn't bake in

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Speaker 1: any further disinflation based on that one.

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Speaker 5: Another area where I have.

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Speaker 1: The keenest interest in People say to me, look, Jeffrey,

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Speaker 1: look at the private sector rent metrics.

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Speaker 5: They're showing disinflation.

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Speaker 1: And I say, yeah, a lot of those private sector

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Speaker 1: rent metrics are looking at new leases, so that's only

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Speaker 1: capturing a subset of the market.

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Speaker 5: The BLS metric that's looking at.

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Speaker 1: The average rental rate, you know, including people who have

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Speaker 1: renewed leases. That might be a better reflection and five

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Speaker 1: percent rental increase that might be a more a better

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Speaker 1: reflection of reality. That's higher than we saw pre COVID,

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Speaker 1: So that that argues for higher inflation.

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Speaker 5: Core inflation going forward.

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Speaker 2: Paid and Riegel are living in the new productivity of America.

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Speaker 2: You're away from three zip codes in Manhattan with a

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Speaker 2: view of a New York City and maybe you can

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Speaker 2: call it the trajectory from Washington up to Boston. Tell

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Speaker 2: us the new productivity you observe in Austin, in Atlanta,

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Speaker 2: I've read about the Georgia boom here a couple of

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Speaker 2: articles the last couple of days. And then out to California.

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Speaker 2: Jeffrey Cleveland the new productivity in America?

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Speaker 3: Do you observe it?

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Speaker 1: Well, yeah, I do, and we definitely are seeing more

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Speaker 1: productivity internally. You know, we've got offices in Los Angeles, Boston, London,

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Speaker 1: and Milan. So I know our London trading floor tunes

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Speaker 1: into this program, tom.

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Speaker 5: So hello to those folks. And I think the productivity

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Speaker 5: is maybe it's the key here.

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Speaker 1: You can have higher wage growth four to five percent

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Speaker 1: nominal wage growth, and it not means that you have

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Speaker 1: higher inflation if you get productivity to pick up on

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Speaker 1: a sustainable basis. The last twelve months, I think we've

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Speaker 1: seen that productivity picked up. It's about two percent year

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Speaker 1: on year. So do we get more gains there do

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Speaker 1: we get you know, sustainable two percent type of productivity growth.

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Speaker 1: That's a that's a big open question. We need it

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Speaker 1: because that can keep inflation and check wise we might

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Speaker 1: we might end up at.

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Speaker 5: Higher levels of inflation or higher rates inflation.

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Speaker 2: As I mean, jeff I got thirty seconds left. Did

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Speaker 2: you really swim across the English Channel?

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Speaker 1: Yes, their two thousand and eight, September thirteen, two thousand

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Speaker 1: and eight. It was a Saturday. I believe Lehman was

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Speaker 1: preparing to file bankerscy on that Monday morning. So in

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Speaker 1: the midst of the financial crisis, I just decided to

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Speaker 1: swim the twenty six miles from Dover in the UK

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Speaker 1: to France ten hours and change.

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Speaker 3: That's phenomenal.

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Speaker 2: What was your one observation that you did not expect

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Speaker 2: when you did this amazing feat.

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Speaker 3: What was the thing we learned?

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Speaker 1: It's the cold, Tom, It's not the distance. You can train,

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Speaker 1: you can prepare for the distance, it's difficult to prepare

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Speaker 1: for the cold. It was fifty eight degrees fahrenheit in

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Speaker 1: the water that day, so that that was the big challenge.

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Speaker 3: Jeffrey, thank you so much.

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Speaker 2: Don't be a stranger way out on the West coast

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Speaker 2: out of Claremont and all his work with Peyton and Rigel.

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Speaker 2: Jeffrey Cleveland with us this spring, Cather greifeld in for

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Speaker 2: Paul Swinging. You've got a qualified.

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Speaker 3: Guest to drive forward this wall of data.

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Speaker 4: Yeah, of course we're going to be speaking to now,

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Speaker 4: Jeffrey Cleveland. He is cheap us a condomist over at

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Speaker 4: Peydon and Reigel. Let's talk about what we just learned.

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Speaker 4: Of course, retail sales a little bit cooler than anticipated,

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Speaker 4: but PPI coming in hot for February, increasing by point

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Speaker 4: six percent. Of course consensus had been looking for point

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Speaker 4: three percent. Would love to hear your immediate reaction, because

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Speaker 4: it looks like right now the market's reacting to that PPI.

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Speaker 1: Well, I mean it's early here on the West coast,

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Speaker 1: so maybe I should start with a little controversy. I

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Speaker 1: don't see the case for raycuts in this data. I mean,

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Speaker 1: just in order of importance for what I'm looking at.

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Speaker 1: Looking at initial claims dropping back below two hundred and

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Speaker 1: ten thousand in the latest week, I mean exceptionally low

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Speaker 1: layoff activity. So that's the sign of I think a

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Speaker 1: still solid labor market. And then if you go next

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Speaker 1: to PPI. It definitely came in hotter than we expected.

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Speaker 1: We already penciled in a point three poor PCE increase

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Speaker 1: four February, so for later this month. So we might

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Speaker 1: have to take another look at this after this broadcast

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Speaker 1: and maybe bumped that up a little. But nothing there

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Speaker 1: that I think. If I'm a policy maker sitting around

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Speaker 1: Washington next week, I'm gonna be really confident that we've

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Speaker 1: done enough. And then the retail sales, I mean, I

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Speaker 1: think Tom is exactly right. Look at Core, look at

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Speaker 1: the control group. The only thing that we always tell

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Speaker 1: clients about retail sales is it's just capturing a subset

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Speaker 1: of consumer spending mostly on goods. I like to look

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Speaker 1: at you know, consumer incomes still growing at a good

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Speaker 1: pace through through February, and I think that will go

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Speaker 1: into spending.

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Speaker 5: So yeah, that's my take.

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Speaker 2: Different Cleveland with us a paidrago, we welcome all of

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Speaker 2: you across America and worldwide. Thrilled with the worldwide performance.

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Speaker 2: Apple car Play is the way to get us. It's

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Speaker 2: a new way to get us safer better. Good Morning

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Speaker 2: on Android and Google Play as well on YouTube. Go

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Speaker 2: to Bloomberg Podcasts and it's just growing, growing, growing. Thank

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Speaker 2: you for your interest in Bloomberg Podcasts and our live

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Speaker 2: chat out there really in form Good morning of all places, Caracas, Venezuela.

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Speaker 2: Thank you so much for coming to us from Caracas

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Speaker 2: this morning. Jeff Jason Furman up at Harvard had a

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Speaker 2: really important and I don't want to sum up the economic

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Speaker 2: data here, but he had a really important insight, which

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Speaker 2: is three point nine percent unemployment is different than four

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Speaker 2: point zero percent unemployment. When I see claims and what

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Speaker 2: they did today two hundred and nine thousand with a

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Speaker 2: constructive fully employed revision from two seventeen to two ten,

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Speaker 2: you don't get to a four percent unemployment, right, do

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Speaker 2: you no?

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Speaker 1: And you also have continuing claims dipping back below that

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Speaker 1: one point nine, So that looks good. I'm a little

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Speaker 1: skeptical on the three point nine tom that we got

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Speaker 1: last week. I mean, you look at that household survey.

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Speaker 1: You know that is notoriously volatile survey. I think the

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Speaker 1: confidence interval, the plus minus is six hundred thousand on

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Speaker 1: the household employment survey. It was down a bit last month,

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Speaker 1: but it's been volatile in the last year and a half,

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Speaker 1: and it's possible. We touched three point nine, but then

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Speaker 1: we see a dip back down in the unemployment rate

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Speaker 1: in the months ahead, you know, back to three point

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Speaker 1: seven or something. So I think we're going to stick

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Speaker 1: under four percent for the year.

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Speaker 5: That's our forecast.

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Speaker 4: So the labor market it is still hot. Of course,

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Speaker 4: like you said at the top, you don't see any

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Speaker 4: reason for the FED to cut rates here. Let's try

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Speaker 4: to create a little bit more controversy. Do you put

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Speaker 4: any water in the theory that maybe actually the next

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Speaker 4: move will be a hike?

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Speaker 1: I think you can't rule it out. Why do I

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Speaker 1: say that it's possible to be controversial that maybe we're

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Speaker 1: just going to settle in at a bit higher year

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Speaker 1: on year rate of inflation, not you know, not five percent,

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Speaker 1: not six percent like we saw in the middle of

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Speaker 1: twenty two, but you know, three to four percent something

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Speaker 1: in that range, and then our policy maker is going

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Speaker 1: to be okay with that. Maybe some are maybe some

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Speaker 1: think that the inflation target should be higher, but I think,

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Speaker 1: buy and large most policy makers want a two handle

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Speaker 1: on inflation. So three to four percent on core inflation

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Speaker 1: is too high. And in that case, if we just

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Speaker 1: start of linger there that might open the door to

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Speaker 1: another hike. In our outlook, we put about a ten

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Speaker 1: percent chance on that for the year, so you know

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Speaker 1: it's it's a risk. It's not our base pes, but

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Speaker 1: it is definitely a risk.

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Speaker 2: Katie Chire, yield up one basis point ten, You're yield

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Speaker 2: up three basis points this morning.

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Speaker 4: Yeah, we are seeing a little bit of a cooling

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Speaker 4: of that knee jerk reaction. You take a look at

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Speaker 4: S and P five hundred futures, they're still higher to

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Speaker 4: the tune of two tenths of a percent. They had

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Speaker 4: been looking at a little pre market gain of three

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Speaker 4: tenths of a percent, So not too much action. But

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Speaker 4: let's keep this converse going on inflation. That's sticky inflation.

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Speaker 4: What keeps inflation elevated maybe to the tune of three

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Speaker 4: to four percent when you really break apart the components, Well.

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Speaker 1: You break apart the components we had we benefited last

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Speaker 1: year from goods prices discillerating quite a bit.

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Speaker 5: Falling year on year.

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Speaker 1: It's possible in our view that that that's behind us

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Speaker 1: and goods prices be sort of flat. There could be

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Speaker 1: even some upside pressure there. So I wouldn't I wouldn't

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Speaker 1: bake in any further disinflation based.

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Speaker 5: On that one.

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Speaker 1: Another area where you know, I have a keenest interest

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Speaker 1: in People say to me, look, Jeffrey, look at the

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Speaker 1: private sector rent metrics.

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Speaker 5: They're showing disinflation.

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Speaker 1: And I say, yeah, a lot of those private sector

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Speaker 1: rent metrics are looking at new leases, so that's only

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Speaker 1: capturing a subset of the market. The BLS metric that's

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Speaker 1: looking at the average rental rate, you know, including people

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Speaker 1: who have renewed leases. That might be a better reflection

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Speaker 1: and five percent rental increase that might be a more

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Speaker 1: a better reflection of reality that's higher than we saw

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Speaker 1: pre COVID, So that argues for higher inflation core inflation

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Speaker 1: going forward.

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Speaker 2: Peyton Riegel are living in the new productivity of America.

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Speaker 3: You're away from three zip codes.

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Speaker 2: In Manhattan with a view of a New York City

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Speaker 2: and maybe you can call it the trajectory from Washington

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Speaker 2: up to Boston. Tell us the new productivity you observe

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Speaker 2: in Austin. In Atlanta, I read about the Georgia boom

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Speaker 2: here a couple articles the last couple of days, and

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Speaker 2: then out to California. Jeffrey Cleveland, the new productivity in America.

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Speaker 3: Do you observe it?

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Speaker 1: Well, yeah, I do, and we definitely are seeing more

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Speaker 1: productivity internally. You know, we've got offices in Los Angeles, Boston, London,

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Speaker 1: and Milan, so I know our London trading floor tunes

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Speaker 1: into this program, Tom.

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Speaker 5: So hello to those folks. And I think the productivity

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Speaker 5: is maybe it's the key here.

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Speaker 1: You can have higher wage growth four to five percent

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Speaker 1: nominal wage growth, and it not mean that you have

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Speaker 1: higher inflation if you get productivity to pick up on

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Speaker 1: a sustainable basis. The last twelve months, I think we've

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Speaker 1: seen that productivity picked up.

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Speaker 5: It's about two percent year on year. So do we

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Speaker 5: get more gains there?

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Speaker 1: Do we get you know, sustainable two percent type of

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Speaker 1: productivity growth, that's a that's a big open question. We

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Speaker 1: need it because that can keep inflation and check. Otherwise

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Speaker 1: we might we might end up at higher levels of

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Speaker 1: inflation or higher rates of inflation.

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Speaker 2: As I mean, Jeff, I got thirty seconds left. Did

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Speaker 2: you really swim across the English channel?

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Speaker 3: Yes?

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Speaker 1: There, two thousand and eight, September thirteen, two thousand and eight.

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Speaker 5: It was a Saturday.

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Speaker 1: I believe Lehman was preparing to file bankerscy on that

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Speaker 1: Monday morning. So in the midst of the financial crisis,

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Speaker 1: I just decided to swim the twenty six miles from

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Speaker 1: Dover in the UK to France ten hours and change.

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Speaker 3: That's phenomenal.

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Speaker 2: What was your one observation that you did not expect

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Speaker 2: when you did this amazing feet?

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Speaker 3: What was the thing with learned?

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Speaker 1: It's the cold, Tom, It's not the distance. You can train,

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Speaker 1: you can prepare for the distance. It's difficult to prepare

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Speaker 1: for the cold. It was fifty eight degrees fahrenheit in

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Speaker 1: the water that day, so that was that was the

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Speaker 1: big challenge.

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Speaker 3: Jeffrey, thank you so much.

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Speaker 2: Don't be a stranger way out on the west coast

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Speaker 2: out of Claremont and all his work with Peyton and Rigel.

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Speaker 2: Jeffrey Cleveland with us this morning. Commercial real estate isn't

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Speaker 2: part of the buoyancy right now. And instead of talking,

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Speaker 2: you know, we could talk sell side by this stock

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Speaker 2: sell that. How about talking to somebody with a heritage

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Speaker 2: Back to Grubb and Ellis and he's with Marcus and

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Speaker 2: Miltchep in the trenches of this is somethime. Geez joins

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Speaker 2: us right now with twenty six years of like in

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Speaker 2: the trenches work. I love that on Twitter. Whether it's

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Speaker 2: an ex JP Morgan guy, I don't have them in

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Speaker 2: front of me. And it'll take a certain property. It's suburban,

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Speaker 2: it's nineteen eighties. Either they're given the keys back to

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Speaker 2: the bank or the selling it for an eighty six

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Speaker 2: percent discount. How bad is it out there in nineteen eighties?

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Speaker 2: Ugly suburban office buildings that we work used to be in,

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Speaker 2: but they're.

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Speaker 3: Not in them anymore.

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Speaker 6: Good morning, Great to be with you on the program.

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Speaker 6: There are instances of those pretty terrible occurrences that we're

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Speaker 6: tracking and witnessing all over the country, mostly in urban areas,

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Speaker 6: less so in suburban areas, and very limited to exactly

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Speaker 6: what you said. Older product that's obsolete, that hasn't been

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Speaker 6: kept up, didn't have capital improvements, especially in suburban markets

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Speaker 6: where migration has benefited office usage. Look at Florida, for example,

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Speaker 6: the office market there is doing far better than many

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Speaker 6: other markets.

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Speaker 3: What happens to that building?

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Speaker 2: If this was in Quincy, Mass outside one twenty eight

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Speaker 2: too far from Famway Park for me to live there,

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Speaker 2: But there's Quincy Mass typical building belly up the person

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Speaker 2: that bought that for twenty dollars per square foot or whatever,

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Speaker 2: what are they going to do with that property?

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Speaker 3: Mostly reuse.

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Speaker 6: Office is very difficult to reimagine and reuse. We saw

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Speaker 6: retail go through a significant degree of reuse and reimagination

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Speaker 6: of obsolete shopping centers over the last fifteen twenty years.

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Speaker 6: Much easier to do than office buildings, which has a

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Speaker 6: cost of conversion to other uses and cost of modifications

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Speaker 6: is a lot higher. But there are entrepreneurial and private

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Speaker 6: investors out there with a lot of capital on the side, yes,

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Speaker 6: that are converting these distressed situations to really interesting investment

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Speaker 6: opportunities over the long haul. One really important factor commercial

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Speaker 6: real estate is being judged as a book by the

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Speaker 6: cover of that example that you just talked about, And

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Speaker 6: the generalization is really harmful because apartment fundamentals are fine.

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Speaker 6: They're soft, but they're fine. Retail is coming back strong.

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Speaker 6: Niches like self storage, hospitality, they're all doing very very well.

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Speaker 6: Industrial warehouses still doing very well.

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Speaker 3: Little bit of how he did that. He said, basically, Tom,

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Speaker 3: you don't.

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Speaker 5: Know what you're talking about, touch and go, but I do.

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Speaker 4: I want to go back to that thought on conversion,

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Speaker 4: because how many you must hear that all the time.

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Speaker 4: Why don't we just take all this unused office space

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Speaker 4: converted into residential Like you said, I mean the cost

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Speaker 4: to do that is very high. But elaborate a little

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Speaker 4: bit more on that. There are some people who are trying.

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Speaker 5: To do that.

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Speaker 6: There are and there's examples that work out. If the

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Speaker 6: basis of acquiring the distressed office really justifies the amount

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Speaker 6: of costs that there is, we're seeing other uses start

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Speaker 6: to pop up. It's interesting how versatile the market is.

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Speaker 6: You have like data banks, you have outsourced call centers

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Speaker 6: that are now able to get housed in some of

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Speaker 6: this obsolete or older or highly distressed office properties that

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Speaker 6: weren't even on the radar three or four years ago

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Speaker 6: or before the pandemic. And the one thing that it's

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Speaker 6: also important to communicate the perception is that this threat

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Speaker 6: of what's happening with office use may bring down the

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Speaker 6: entire banking system or may become a contagion for commercial

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Speaker 6: real estate loans. The banking system has a three and

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Speaker 6: a half percent total exposure to office loans as a

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Speaker 6: percent of all loans outstanding, so and half of office

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Speaker 6: space is performing just fine. The newer suburban product. The

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Speaker 6: newer urban product as a ten to twelve percent vacancy rate.

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Speaker 6: It's the older, obsolete urban market that's seeing vacancies of

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Speaker 6: twenty five percent or higher.

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Speaker 4: Well, focusing on the urban core, I want to talk

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Speaker 4: about the path that even got us to this conversation,

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Speaker 4: because the typical narrative is that you look at the pandemic,

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Speaker 4: this shift to hybrid work that really killed off a

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Speaker 4: lot of what you're seeing in the urban core. But

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Speaker 4: you make the point in your notes that office demand,

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Speaker 4: actually it was deteriorating before the pandemic even started.

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Speaker 3: That's true.

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Speaker 6: That's wild. That is true. That has a lot to

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Speaker 6: do with the fact that millennials were entering marriage age

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Speaker 6: or those that have had already been in that category,

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Speaker 6: or moving to suburbs to buy their first homes, and

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Speaker 6: they were tired of being in the urban core. After

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Speaker 6: ten years of a demographic boom that really benefited urban America,

443
00:22:08,080 --> 00:22:11,440
Speaker 6: that shift with millennials aging and moving to suburbs that

444
00:22:11,480 --> 00:22:12,400
Speaker 6: had already started to show.

445
00:22:12,480 --> 00:22:15,080
Speaker 2: You notice how no one ever talks about They talk

446
00:22:15,119 --> 00:22:16,280
Speaker 2: about the marriage age.

447
00:22:16,400 --> 00:22:19,280
Speaker 3: Yeah, nobody ever talks about the divorce age. That's where

448
00:22:19,280 --> 00:22:22,040
Speaker 3: you're moving from the suburbs to wherever. I don't know

449
00:22:22,040 --> 00:22:22,679
Speaker 3: why I brought that.

450
00:22:22,800 --> 00:22:25,720
Speaker 2: Probably I want this is brilliant. I was with a

451
00:22:25,760 --> 00:22:27,920
Speaker 2: real estate heavyweight last night. I think he owns half

452
00:22:27,960 --> 00:22:31,080
Speaker 2: the Upper West Side, and I said to him, and

453
00:22:31,119 --> 00:22:32,879
Speaker 2: I think the media has really got this wrong.

454
00:22:33,240 --> 00:22:36,840
Speaker 3: The magic of your business is there is a loss taken.

455
00:22:37,040 --> 00:22:37,720
Speaker 3: I get that.

456
00:22:38,800 --> 00:22:41,439
Speaker 2: But after a seven year old or whatever, when the

457
00:22:41,520 --> 00:22:46,399
Speaker 2: loss is taken, the market clears and we move on.

458
00:22:47,040 --> 00:22:50,240
Speaker 3: I don't think that's talked about enough. Correct expand on that.

459
00:22:50,240 --> 00:22:53,199
Speaker 6: That's the benefit of owning commercial real estate for the

460
00:22:53,280 --> 00:22:56,199
Speaker 6: long term. And if you don't get over your skis

461
00:22:56,240 --> 00:23:00,240
Speaker 6: by taking on too much leverage, there is very fewsiness

462
00:23:00,280 --> 00:23:01,959
Speaker 6: is where you can't ride out a downturn.

463
00:23:02,040 --> 00:23:03,560
Speaker 2: You write it out and you wait, and then you

464
00:23:03,720 --> 00:23:06,399
Speaker 2: find it a twenty cents on the dollar. Are people

465
00:23:06,440 --> 00:23:08,800
Speaker 2: really My answer is foreign money is going to come

466
00:23:08,840 --> 00:23:11,119
Speaker 2: in at fifty cents of the dollar. Where you know,

467
00:23:11,280 --> 00:23:13,520
Speaker 2: basically this goes back to your hair. Did you grub

468
00:23:13,560 --> 00:23:15,000
Speaker 2: an ellis? Where's your number on that?

469
00:23:15,240 --> 00:23:18,159
Speaker 6: Well, again, on a very selective basis, this is not

470
00:23:18,200 --> 00:23:23,520
Speaker 6: a repeat of the early nineties RTC and mass scaled

471
00:23:24,040 --> 00:23:27,720
Speaker 6: discounting of commercial real estate in a fire sale, which

472
00:23:27,760 --> 00:23:30,600
Speaker 6: is what the RTC was. Well, you're talking about as

473
00:23:30,760 --> 00:23:34,159
Speaker 6: much more select situations for the most part, limited to

474
00:23:34,200 --> 00:23:38,080
Speaker 6: office space, maybe some absolutely chopping centers, and so the

475
00:23:38,119 --> 00:23:41,560
Speaker 6: twenty cents on the dollar kind of a theme is

476
00:23:41,560 --> 00:23:45,560
Speaker 6: not the overriding outlook for this market. Like I said,

477
00:23:45,680 --> 00:23:48,199
Speaker 6: many other product types are doing just fine. They're not

478
00:23:48,240 --> 00:23:50,080
Speaker 6: even close to being in a distress.

479
00:23:50,240 --> 00:23:51,480
Speaker 3: This has been a huge value.

480
00:23:51,560 --> 00:23:54,639
Speaker 2: In a live chat on Twitter's on our YouTube is

481
00:23:54,680 --> 00:23:57,399
Speaker 2: lit up, i said, thank you so much, don't be

482
00:23:57,400 --> 00:23:58,200
Speaker 2: a stranger.

483
00:23:57,840 --> 00:23:59,480
Speaker 6: Please caet out my pleasure for great to be with you,

484
00:23:59,560 --> 00:24:00,040
Speaker 6: And there's.

485
00:24:00,160 --> 00:24:01,240
Speaker 3: Clear talking there.

486
00:24:01,240 --> 00:24:15,560
Speaker 2: On CIRE commercial at real estate, we like to have

487
00:24:15,680 --> 00:24:18,960
Speaker 2: the newspapers with us here. Come on at Lisa Safety,

488
00:24:19,320 --> 00:24:21,320
Speaker 2: what are our boring you or me? And New York

489
00:24:21,359 --> 00:24:22,399
Speaker 2: newspapers look like?

490
00:24:22,720 --> 00:24:24,679
Speaker 7: All right, so we're starting with the Wall Street Journal.

491
00:24:25,200 --> 00:24:27,679
Speaker 7: This is an exclusive. It's really in depth, so I'm

492
00:24:27,720 --> 00:24:29,320
Speaker 7: gonna try and get to the nuts and bolts of

493
00:24:29,359 --> 00:24:30,840
Speaker 7: it as best I can. But it says a lot

494
00:24:30,920 --> 00:24:34,200
Speaker 7: of women leaving Goldman sacks because they're not getting those

495
00:24:34,240 --> 00:24:37,639
Speaker 7: big positions at the company. So the executives decided that

496
00:24:37,680 --> 00:24:39,679
Speaker 7: in order to run groups in the market's division, so

497
00:24:39,680 --> 00:24:42,000
Speaker 7: we'll start there, they would need to have certain experience.

498
00:24:42,119 --> 00:24:45,320
Speaker 7: Now women didn't have certain that amount of that experience.

499
00:24:45,400 --> 00:24:48,000
Speaker 7: Men were affected too, but bigger impact on women, so

500
00:24:48,119 --> 00:24:50,080
Speaker 7: a lot of them left. Then you have the asset

501
00:24:50,200 --> 00:24:53,160
Speaker 7: management side of it. They had changes that were overseen

502
00:24:53,200 --> 00:24:56,560
Speaker 7: by David Solomon. They created new leadership jobs and men

503
00:24:56,640 --> 00:25:00,639
Speaker 7: were chosen to fill those positions, some cases passing over women.

504
00:25:00,880 --> 00:25:04,440
Speaker 7: So this all comes down to Monday, David Solomon plans

505
00:25:04,480 --> 00:25:07,600
Speaker 7: to host several women partners for dinner at his Manhattan apartment.

506
00:25:07,720 --> 00:25:10,560
Speaker 7: They're going to face questions about why it hasn't happened,

507
00:25:10,560 --> 00:25:12,840
Speaker 7: why women haven't advanced over at the company. So this

508
00:25:12,880 --> 00:25:15,280
Speaker 7: has been an ongoing issue. I mean Solomon became president,

509
00:25:15,359 --> 00:25:18,399
Speaker 7: when he became CEO, he made promoting women to senior

510
00:25:18,480 --> 00:25:20,719
Speaker 7: levels like a firm, This was going to be a

511
00:25:20,760 --> 00:25:23,119
Speaker 7: priority over at the firm. And so these women are

512
00:25:23,119 --> 00:25:25,320
Speaker 7: saying it's not happening. So what's going to be.

513
00:25:25,240 --> 00:25:26,680
Speaker 3: Done, Katie, What do you think?

514
00:25:26,920 --> 00:25:30,040
Speaker 4: I mean you think about reporting from her own Shri Natarajan,

515
00:25:30,080 --> 00:25:33,199
Speaker 4: he broke the news last month that Beth Hammock. She

516
00:25:33,320 --> 00:25:36,280
Speaker 4: was one of the most likely women seen likely to

517
00:25:36,320 --> 00:25:39,560
Speaker 4: break into the top tier at Goldmen Sack. She's leaving

518
00:25:39,920 --> 00:25:44,280
Speaker 4: after thirty years. Of course, the details of that departure unknown,

519
00:25:44,320 --> 00:25:46,359
Speaker 4: but it sort of fits into the broader theme that

520
00:25:46,680 --> 00:25:48,200
Speaker 4: the Wall Street Journal is covering here.

521
00:25:48,280 --> 00:25:52,840
Speaker 2: It's really really to me a long term cultural issue,

522
00:25:53,240 --> 00:25:55,199
Speaker 2: which is a sensitive issue. I'm going to say good

523
00:25:55,240 --> 00:26:00,479
Speaker 2: morning in New Jersey to the Camden Water Company, Camden,

524
00:26:00,520 --> 00:26:03,159
Speaker 2: New Jersey. I think it's an American water park. I

525
00:26:03,160 --> 00:26:05,119
Speaker 2: don't have the name in front of me. Who have

526
00:26:05,400 --> 00:26:10,480
Speaker 2: aggressively done what people are talking about. They really have

527
00:26:10,560 --> 00:26:15,520
Speaker 2: a balance board with women in management, and it's got

528
00:26:15,560 --> 00:26:17,760
Speaker 2: to be a cultural decision, doesn't matter if it's Golden

529
00:26:17,800 --> 00:26:19,240
Speaker 2: Sacks or anybody else.

530
00:26:19,240 --> 00:26:20,840
Speaker 3: It's great reporting for the Wallster Journal.

531
00:26:20,880 --> 00:26:23,359
Speaker 2: As you mentioned shrine Otto Roger on the watch at

532
00:26:23,359 --> 00:26:24,200
Speaker 2: Bloomberg News.

533
00:26:24,200 --> 00:26:24,879
Speaker 3: What else do you have?

534
00:26:25,200 --> 00:26:27,840
Speaker 7: Sure we're talking about Gerald Levin, This was all over

535
00:26:27,880 --> 00:26:29,879
Speaker 7: the news. He was behind the nineteen ninety merger of

536
00:26:29,880 --> 00:26:33,840
Speaker 7: Time Warner Communications. He passed away Wednesday, was diagnosed with

537
00:26:33,840 --> 00:26:36,920
Speaker 7: Parkinson's disease. But he was known for so many things.

538
00:26:36,920 --> 00:26:39,960
Speaker 7: He oversaw the purchase of Turner Broadcasting in nineteen ninety six.

539
00:26:40,119 --> 00:26:43,679
Speaker 7: Also remembered though for that disastrous decision selling Time Warner

540
00:26:43,720 --> 00:26:46,800
Speaker 7: to upstart America Online at the peak of that Internet bubble.

541
00:26:47,560 --> 00:26:50,280
Speaker 7: But he left AOL Time winner twenty two thousand and

542
00:26:50,280 --> 00:26:53,400
Speaker 7: two after the company posted those big losses, and he

543
00:26:53,480 --> 00:26:54,600
Speaker 7: was eighty four years old.

544
00:26:54,720 --> 00:26:57,880
Speaker 2: I had the clearest memories of four ninety nine park

545
00:26:58,200 --> 00:27:01,720
Speaker 2: In talking to Steve case that more and the clearest memories,

546
00:27:02,480 --> 00:27:06,560
Speaker 2: and we couldn't figure the transaction out with that said,

547
00:27:06,720 --> 00:27:11,280
Speaker 2: mister Levin was hugely philanthropic, and Katie, you can give

548
00:27:11,320 --> 00:27:13,960
Speaker 2: some perspective here. This is a guy that followed the

549
00:27:14,000 --> 00:27:16,440
Speaker 2: Greyfeld footsteps out of Haverford College.

550
00:27:16,520 --> 00:27:20,560
Speaker 4: He graduated in nineteen sixty from Haverford College. He had

551
00:27:20,600 --> 00:27:23,320
Speaker 4: a degree in philosophy in Haverford.

552
00:27:22,960 --> 00:27:25,520
Speaker 3: Which is their heavyweight degree. Yeah, that's like why you

553
00:27:25,640 --> 00:27:26,639
Speaker 3: go to haverdid.

554
00:27:26,320 --> 00:27:30,080
Speaker 4: Yeah, I've full disclosure. I went to Haverford. Yeah, yeah,

555
00:27:30,240 --> 00:27:32,879
Speaker 4: Well just for the audience. Maybe they don't know, but

556
00:27:33,800 --> 00:27:38,040
Speaker 4: Haveverford Obviously it's a Quaker founded school and those roots

557
00:27:38,119 --> 00:27:40,480
Speaker 4: run really deep at Haverford even today. I mean I

558
00:27:40,560 --> 00:27:44,040
Speaker 4: graduated in twenty fifteen and that was you know still

559
00:27:44,040 --> 00:27:45,800
Speaker 4: the guiding principal of the schools.

560
00:27:45,960 --> 00:27:50,040
Speaker 3: So freaking old, No, Lisa, please.

561
00:27:50,520 --> 00:27:54,199
Speaker 4: It was like ten years ago almost, and I've been

562
00:27:54,240 --> 00:27:55,320
Speaker 4: at Bloomberg ever since.

563
00:27:55,440 --> 00:28:01,040
Speaker 3: Okay, she can't come back tomorrow, right, cancel.

564
00:28:03,040 --> 00:28:05,560
Speaker 7: We're talking about people who want to go to Showeo

565
00:28:05,640 --> 00:28:09,240
Speaker 7: Tani's debut with the Dodgers in Soul next week. It's

566
00:28:09,240 --> 00:28:11,720
Speaker 7: gonna cost you. It's gonna cost you more than three

567
00:28:11,760 --> 00:28:16,600
Speaker 7: thousand dollars, five times the face value. That's because you

568
00:28:16,640 --> 00:28:19,920
Speaker 7: have the secondary market. You have ticket based scalpers. Here's

569
00:28:19,920 --> 00:28:23,240
Speaker 7: the thing, though, Those scalpers say that they'll accompany buyers

570
00:28:23,280 --> 00:28:25,560
Speaker 7: to get them into the game, So you actually go

571
00:28:25,640 --> 00:28:27,960
Speaker 7: with the scalper into the game. I don't know if

572
00:28:28,000 --> 00:28:29,920
Speaker 7: they'll buy you a drink there while you're at the game,

573
00:28:30,000 --> 00:28:32,359
Speaker 7: but apparently they're gonna go with you while you're the

574
00:28:33,480 --> 00:28:35,760
Speaker 7: This is his debut with the Dodgers sold next week

575
00:28:35,760 --> 00:28:36,840
Speaker 7: because it's like a six games here.

576
00:28:36,960 --> 00:28:39,920
Speaker 3: Oh, the Pacific Room Dodgers. Yeah, this is San Diego

577
00:28:40,000 --> 00:28:41,160
Speaker 3: in La going.

578
00:28:40,960 --> 00:28:43,600
Speaker 5: Over to Korea, right, yes, correct.

579
00:28:43,280 --> 00:28:46,080
Speaker 2: And they're gonna do career Japan whatever. I call them

580
00:28:46,120 --> 00:28:49,360
Speaker 2: the Pacific Room Dodgers because the amount of money they're

581
00:28:49,400 --> 00:28:52,800
Speaker 2: throwing around. You can only make that back off of

582
00:28:53,120 --> 00:28:54,440
Speaker 2: massive Asian interest.

583
00:28:54,880 --> 00:28:57,160
Speaker 4: I mean three thousand dollars a ticket. That's like Taylor

584
00:28:57,280 --> 00:28:57,960
Speaker 4: Swift level.

585
00:28:58,000 --> 00:28:59,920
Speaker 5: That's true.

586
00:29:00,160 --> 00:29:02,760
Speaker 2: No, it's it's huge and a major shot at the

587
00:29:02,800 --> 00:29:05,680
Speaker 2: baseball I've seen some of the San Diego Padre Prix

588
00:29:05,760 --> 00:29:08,360
Speaker 2: on this and you know they're excited to go and yeah,

589
00:29:08,400 --> 00:29:11,240
Speaker 2: it reached true. I remember the first time I saw

590
00:29:11,440 --> 00:29:13,000
Speaker 2: NFL football in London.

591
00:29:13,400 --> 00:29:15,360
Speaker 3: I was in what a shock. I was in a

592
00:29:15,400 --> 00:29:19,640
Speaker 3: bar by the Tower of London, even bigger shock and

593
00:29:20,440 --> 00:29:21,600
Speaker 3: they were really captivated.

594
00:29:21,640 --> 00:29:25,160
Speaker 2: I mean London really cared in that bar about NFL football.

595
00:29:25,240 --> 00:29:26,640
Speaker 3: I think it's going to be the same over there.

596
00:29:26,680 --> 00:29:27,360
Speaker 3: It's a huge deal.

597
00:29:27,480 --> 00:29:28,840
Speaker 7: What was your bevers of choice?

598
00:29:28,920 --> 00:29:32,080
Speaker 3: I have no recollection. There was some grog from the

599
00:29:32,120 --> 00:29:34,440
Speaker 3: sixteenth century. Are you donner? Do you have one more?

600
00:29:35,120 --> 00:29:37,640
Speaker 7: One more quickly? We heard about this yesterday to Elon

601
00:29:37,720 --> 00:29:41,320
Speaker 7: Musk canceling CNN veteran Don Lemon show just days before

602
00:29:41,360 --> 00:29:43,560
Speaker 7: it was supposed to go on X. There's been this

603
00:29:43,680 --> 00:29:46,120
Speaker 7: back and forth on X. You know. Lemon said there

604
00:29:46,120 --> 00:29:48,440
Speaker 7: will be additional episodes of the series that will appear

605
00:29:48,440 --> 00:29:51,880
Speaker 7: on YouTube, podcast channels and X but Elon Mus said

606
00:29:51,880 --> 00:29:55,320
Speaker 7: the show's approach was basically just CNN but on social media,

607
00:29:55,440 --> 00:29:57,479
Speaker 7: and he said that doesn't work. That's the reason why

608
00:29:57,560 --> 00:29:58,000
Speaker 7: he canceled.

609
00:29:58,040 --> 00:29:59,400
Speaker 3: Lisa Matereo, thank you so much.

610
00:29:59,480 --> 00:30:02,600
Speaker 2: This is a Blueoomberg surveillance podcast, bringing you the best

611
00:30:02,680 --> 00:30:07,440
Speaker 2: in economics, finance, investment, and international relations. You can also

612
00:30:07,520 --> 00:30:11,560
Speaker 2: watch the show live on YouTube. Visit the Bloomberg Podcast

613
00:30:11,680 --> 00:30:15,720
Speaker 2: channel on YouTube to see the show weekday mornings from

614
00:30:15,760 --> 00:30:19,000
Speaker 2: seven to ten am Eastern from our global headquarters in

615
00:30:19,080 --> 00:30:22,800
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616
00:30:23,120 --> 00:30:26,680
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617
00:30:26,880 --> 00:30:30,080
Speaker 2: the Bloomberg Terminal, and the Bloomberg Business app.