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Speaker 2: the Bloomberg Terminal, and the Bloomberg Business App. Kathy Greifeld
Speaker 2: in for Paul Sweene. We've got a qualified guest to
Speaker 2: drive forward this.
Speaker 3: Wall of data.
Speaker 4: Yeah, of course we're going to be speaking to now,
Speaker 4: Jeffrey Cleveland. He is cheap us, a condommist over at
Speaker 4: Peydon and Reigel. I let's talk about what we just learned.
Speaker 4: Of course, retail sales a little bit cooler than anticipated,
Speaker 4: but PPI coming in hot for February, increasing by point
Speaker 4: six percent. Of course, consensus had been looking for point
Speaker 4: three percent. Would love to hear your immediate reaction, because
Speaker 4: it looks like right now the market's reacting to that PPI.
Speaker 1: Well, I mean it's early here on the West coast,
Speaker 1: so maybe I should start with a little controversy. I
Speaker 1: don't see the case for rate cuts in this data.
Speaker 1: I mean, just in order of importance for.
Speaker 5: What I'm looking at.
Speaker 1: Looking at initial claims dropping back below two hundred and
Speaker 1: ten thousand in the latest week, I mean exceptionally low
Speaker 1: layoff activity. So that's the sign of, I think, a
Speaker 1: still solid labor market. And then if you go next
Speaker 1: to PPI, it definitely came in hotter than we expected.
Speaker 1: We already penciled in a point three four pc increase
Speaker 1: four February so for later this month, So we might
Speaker 1: have to take another look at this after this broadcast
Speaker 1: and and me bump that up a little. But nothing
Speaker 1: there that I think. If I'm a policy maker sitting
Speaker 1: around Washington next week, I'm going to be really confident
Speaker 1: that we've done enough. And then the retail sales, I mean,
Speaker 1: I think Tom is exactly right. Look at Core, look
Speaker 1: at the control group. The only thing that we always
Speaker 1: tell clients about retail sales is it's just capturing a
Speaker 1: subset of consumer spending mostly on goods. I like to
Speaker 1: look at, you know, consumer incomes still growing at a
Speaker 1: good pace through February, and I think that will go
Speaker 1: into spending.
Speaker 5: So yeah, that's my Takeing different.
Speaker 3: Cleveland with us a paid RAO.
Speaker 2: We welcome all of you across America and worldwide. Thrilled
Speaker 2: with the worldwide performance. Apple car Play is the way
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Speaker 2: safer better. Good morning on Android and Google Play as
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Speaker 2: Thank you for your interest in Bloomberg Podcasts and our
Speaker 2: live chat out there.
Speaker 3: Really in forum. Good morning of all places, Caracas, Venezuela.
Speaker 2: Thank you so much for coming to us from Caracas
Speaker 2: this morning.
Speaker 3: Jeff Jason Furman up.
Speaker 2: At Harvard had a really important and I don't want
Speaker 2: to sum up the economic data here, but he had
Speaker 2: a really important insight, which is three point nine percent
Speaker 2: unemployment is different than four point zero percent unemployment. When
Speaker 2: I see claims and what they did today two hundred
Speaker 2: nine thousand with a constructive fully employed revision from two
Speaker 2: seventeen to two ten, you don't get to a four
Speaker 2: percent unemployment, right, do you?
Speaker 3: No?
Speaker 1: And you also have continuing claims dipping back below that
Speaker 1: one point nine, So that looks good. I'm a little
Speaker 1: skeptical on the three point nine tom that we got
Speaker 1: last week. I mean, you look at that household survey.
Speaker 1: You know that is notoriously volatile survey. I think the
Speaker 1: confidence interval, the plus minus is six hundred thousand on
Speaker 1: the household employment survey. It was down a bit last month,
Speaker 1: but it's been volatile in the last year and a half,
Speaker 1: and it's possible we touch three point nine, but then
Speaker 1: we see dip back down in the unemployment rate in
Speaker 1: the months ahead, you know, back to three point seven
Speaker 1: or something. So I think we're we're gonna stick under
Speaker 1: four percent for the year. That's that's our forecast.
Speaker 4: So the labor market it is still hot. Of course,
Speaker 4: like you said at the top, you don't see any
Speaker 4: reason for the FED to cut rates.
Speaker 2: Here.
Speaker 4: Let's try to create a little bit more controversy. Do
Speaker 4: you put any water in the theory that maybe actually
Speaker 4: the next move will be a hike.
Speaker 1: I think you can't rule it out. Why do I
Speaker 1: say that it's possible to be controversial, that maybe we're
Speaker 1: just gonna settle in at a bit higher year on
Speaker 1: year rate of inflation, not you know, not five percent,
Speaker 1: not six percent like we saw in the middle of
Speaker 1: twenty two, but you know, three to four percent, something
Speaker 1: in that range, and then our policy maker is going
Speaker 1: to be okay with that. Maybe some are maybe some
Speaker 1: think that the inflation target should be higher, but I think,
Speaker 1: buy and large, most policy makers want a two handle
Speaker 1: on a inflation So three to four percent on core
Speaker 1: inflation is too high. And in that case, if we
Speaker 1: just sort of linger there, that might open the door
Speaker 1: to another hike. In our outlook, we put about a
Speaker 1: ten percent chance on that for.
Speaker 5: The year, So you know, it's a risk. It's not
Speaker 5: our base price, but it is definitely a risk.
Speaker 2: Katie Chi, your yield up one basis point ten, You're
Speaker 2: yield up three basis.
Speaker 3: Points this morning.
Speaker 4: Yeah, we are seeing a little bit of a cooling
Speaker 4: of that knee jerk reaction. You take a look at
Speaker 4: S and P five hundred futures, they're still higher to
Speaker 4: the tune of two tenths of a percent. They had
Speaker 4: been looking at a little pre market gain of three
Speaker 4: tenths of a percent, So not too much action. But
Speaker 4: let's keep this conversation going on inflation. That's sticky inflation.
Speaker 4: What keeps inflation elevated maybe to the tune of three
Speaker 4: to four percent when you really break apart the components, Well, you.
Speaker 5: Break apart the components we had.
Speaker 1: We benefited last year from goods prices discillerating quite a bit.
Speaker 5: Falling year on year.
Speaker 1: It's possible in our view that that's behind us, and
Speaker 1: goods prices will be sort of flat. There could be
Speaker 1: even some upside pressure there. So I wouldn't bake in
Speaker 1: any further disinflation based on that one.
Speaker 5: Another area where I have.
Speaker 1: The keenest interest in People say to me, look, Jeffrey,
Speaker 1: look at the private sector rent metrics.
Speaker 5: They're showing disinflation.
Speaker 1: And I say, yeah, a lot of those private sector
Speaker 1: rent metrics are looking at new leases, so that's only
Speaker 1: capturing a subset of the market.
Speaker 5: The BLS metric that's looking at.
Speaker 1: The average rental rate, you know, including people who have
Speaker 1: renewed leases. That might be a better reflection and five
Speaker 1: percent rental increase that might be a more a better
Speaker 1: reflection of reality. That's higher than we saw pre COVID,
Speaker 1: So that that argues for higher inflation.
Speaker 5: Core inflation going forward.
Speaker 2: Paid and Riegel are living in the new productivity of America.
Speaker 2: You're away from three zip codes in Manhattan with a
Speaker 2: view of a New York City and maybe you can
Speaker 2: call it the trajectory from Washington up to Boston. Tell
Speaker 2: us the new productivity you observe in Austin, in Atlanta,
Speaker 2: I've read about the Georgia boom here a couple of
Speaker 2: articles the last couple of days. And then out to California.
Speaker 2: Jeffrey Cleveland the new productivity in America?
Speaker 3: Do you observe it?
Speaker 1: Well, yeah, I do, and we definitely are seeing more
Speaker 1: productivity internally. You know, we've got offices in Los Angeles, Boston, London,
Speaker 1: and Milan. So I know our London trading floor tunes
Speaker 1: into this program, tom.
Speaker 5: So hello to those folks. And I think the productivity
Speaker 5: is maybe it's the key here.
Speaker 1: You can have higher wage growth four to five percent
Speaker 1: nominal wage growth, and it not means that you have
Speaker 1: higher inflation if you get productivity to pick up on
Speaker 1: a sustainable basis. The last twelve months, I think we've
Speaker 1: seen that productivity picked up. It's about two percent year
Speaker 1: on year. So do we get more gains there do
Speaker 1: we get you know, sustainable two percent type of productivity growth.
Speaker 1: That's a that's a big open question. We need it
Speaker 1: because that can keep inflation and check wise we might
Speaker 1: we might end up at.
Speaker 5: Higher levels of inflation or higher rates inflation.
Speaker 2: As I mean, jeff I got thirty seconds left. Did
Speaker 2: you really swim across the English Channel?
Speaker 1: Yes, their two thousand and eight, September thirteen, two thousand
Speaker 1: and eight. It was a Saturday. I believe Lehman was
Speaker 1: preparing to file bankerscy on that Monday morning. So in
Speaker 1: the midst of the financial crisis, I just decided to
Speaker 1: swim the twenty six miles from Dover in the UK
Speaker 1: to France ten hours and change.
Speaker 3: That's phenomenal.
Speaker 2: What was your one observation that you did not expect
Speaker 2: when you did this amazing feat.
Speaker 3: What was the thing we learned?
Speaker 1: It's the cold, Tom, It's not the distance. You can train,
Speaker 1: you can prepare for the distance, it's difficult to prepare
Speaker 1: for the cold. It was fifty eight degrees fahrenheit in
Speaker 1: the water that day, so that that was the big challenge.
Speaker 3: Jeffrey, thank you so much.
Speaker 2: Don't be a stranger way out on the West coast
Speaker 2: out of Claremont and all his work with Peyton and Rigel.
Speaker 2: Jeffrey Cleveland with us this spring, Cather greifeld in for
Speaker 2: Paul Swinging. You've got a qualified.
Speaker 3: Guest to drive forward this wall of data.
Speaker 4: Yeah, of course we're going to be speaking to now,
Speaker 4: Jeffrey Cleveland. He is cheap us a condomist over at
Speaker 4: Peydon and Reigel. Let's talk about what we just learned.
Speaker 4: Of course, retail sales a little bit cooler than anticipated,
Speaker 4: but PPI coming in hot for February, increasing by point
Speaker 4: six percent. Of course consensus had been looking for point
Speaker 4: three percent. Would love to hear your immediate reaction, because
Speaker 4: it looks like right now the market's reacting to that PPI.
Speaker 1: Well, I mean it's early here on the West coast,
Speaker 1: so maybe I should start with a little controversy. I
Speaker 1: don't see the case for raycuts in this data. I mean,
Speaker 1: just in order of importance for what I'm looking at.
Speaker 1: Looking at initial claims dropping back below two hundred and
Speaker 1: ten thousand in the latest week, I mean exceptionally low
Speaker 1: layoff activity. So that's the sign of I think a
Speaker 1: still solid labor market. And then if you go next
Speaker 1: to PPI. It definitely came in hotter than we expected.
Speaker 1: We already penciled in a point three poor PCE increase
Speaker 1: four February, so for later this month. So we might
Speaker 1: have to take another look at this after this broadcast
Speaker 1: and maybe bumped that up a little. But nothing there
Speaker 1: that I think. If I'm a policy maker sitting around
Speaker 1: Washington next week, I'm gonna be really confident that we've
Speaker 1: done enough. And then the retail sales, I mean, I
Speaker 1: think Tom is exactly right. Look at Core, look at
Speaker 1: the control group. The only thing that we always tell
Speaker 1: clients about retail sales is it's just capturing a subset
Speaker 1: of consumer spending mostly on goods. I like to look
Speaker 1: at you know, consumer incomes still growing at a good
Speaker 1: pace through through February, and I think that will go
Speaker 1: into spending.
Speaker 5: So yeah, that's my take.
Speaker 2: Different Cleveland with us a paidrago, we welcome all of
Speaker 2: you across America and worldwide. Thrilled with the worldwide performance.
Speaker 2: Apple car Play is the way to get us. It's
Speaker 2: a new way to get us safer better. Good Morning
Speaker 2: on Android and Google Play as well on YouTube. Go
Speaker 2: to Bloomberg Podcasts and it's just growing, growing, growing. Thank
Speaker 2: you for your interest in Bloomberg Podcasts and our live
Speaker 2: chat out there really in form Good morning of all places, Caracas, Venezuela.
Speaker 2: Thank you so much for coming to us from Caracas
Speaker 2: this morning. Jeff Jason Furman up at Harvard had a
Speaker 2: really important and I don't want to sum up the economic
Speaker 2: data here, but he had a really important insight, which
Speaker 2: is three point nine percent unemployment is different than four
Speaker 2: point zero percent unemployment. When I see claims and what
Speaker 2: they did today two hundred and nine thousand with a
Speaker 2: constructive fully employed revision from two seventeen to two ten,
Speaker 2: you don't get to a four percent unemployment, right, do
Speaker 2: you no?
Speaker 1: And you also have continuing claims dipping back below that
Speaker 1: one point nine, So that looks good. I'm a little
Speaker 1: skeptical on the three point nine tom that we got
Speaker 1: last week. I mean, you look at that household survey.
Speaker 1: You know that is notoriously volatile survey. I think the
Speaker 1: confidence interval, the plus minus is six hundred thousand on
Speaker 1: the household employment survey. It was down a bit last month,
Speaker 1: but it's been volatile in the last year and a half,
Speaker 1: and it's possible. We touched three point nine, but then
Speaker 1: we see a dip back down in the unemployment rate
Speaker 1: in the months ahead, you know, back to three point
Speaker 1: seven or something. So I think we're going to stick
Speaker 1: under four percent for the year.
Speaker 5: That's our forecast.
Speaker 4: So the labor market it is still hot. Of course,
Speaker 4: like you said at the top, you don't see any
Speaker 4: reason for the FED to cut rates here. Let's try
Speaker 4: to create a little bit more controversy. Do you put
Speaker 4: any water in the theory that maybe actually the next
Speaker 4: move will be a hike?
Speaker 1: I think you can't rule it out. Why do I
Speaker 1: say that it's possible to be controversial that maybe we're
Speaker 1: just going to settle in at a bit higher year
Speaker 1: on year rate of inflation, not you know, not five percent,
Speaker 1: not six percent like we saw in the middle of
Speaker 1: twenty two, but you know, three to four percent something
Speaker 1: in that range, and then our policy maker is going
Speaker 1: to be okay with that. Maybe some are maybe some
Speaker 1: think that the inflation target should be higher, but I think,
Speaker 1: buy and large most policy makers want a two handle
Speaker 1: on inflation. So three to four percent on core inflation
Speaker 1: is too high. And in that case, if we just
Speaker 1: start of linger there that might open the door to
Speaker 1: another hike. In our outlook, we put about a ten
Speaker 1: percent chance on that for the year, so you know
Speaker 1: it's it's a risk. It's not our base pes, but
Speaker 1: it is definitely a risk.
Speaker 2: Katie Chire, yield up one basis point ten, You're yield
Speaker 2: up three basis points this morning.
Speaker 4: Yeah, we are seeing a little bit of a cooling
Speaker 4: of that knee jerk reaction. You take a look at
Speaker 4: S and P five hundred futures, they're still higher to
Speaker 4: the tune of two tenths of a percent. They had
Speaker 4: been looking at a little pre market gain of three
Speaker 4: tenths of a percent, So not too much action. But
Speaker 4: let's keep this converse going on inflation. That's sticky inflation.
Speaker 4: What keeps inflation elevated maybe to the tune of three
Speaker 4: to four percent when you really break apart the components, Well.
Speaker 1: You break apart the components we had we benefited last
Speaker 1: year from goods prices discillerating quite a bit.
Speaker 5: Falling year on year.
Speaker 1: It's possible in our view that that that's behind us
Speaker 1: and goods prices be sort of flat. There could be
Speaker 1: even some upside pressure there. So I wouldn't I wouldn't
Speaker 1: bake in any further disinflation based.
Speaker 5: On that one.
Speaker 1: Another area where you know, I have a keenest interest
Speaker 1: in People say to me, look, Jeffrey, look at the
Speaker 1: private sector rent metrics.
Speaker 5: They're showing disinflation.
Speaker 1: And I say, yeah, a lot of those private sector
Speaker 1: rent metrics are looking at new leases, so that's only
Speaker 1: capturing a subset of the market. The BLS metric that's
Speaker 1: looking at the average rental rate, you know, including people
Speaker 1: who have renewed leases. That might be a better reflection
Speaker 1: and five percent rental increase that might be a more
Speaker 1: a better reflection of reality that's higher than we saw
Speaker 1: pre COVID, So that argues for higher inflation core inflation
Speaker 1: going forward.
Speaker 2: Peyton Riegel are living in the new productivity of America.
Speaker 3: You're away from three zip codes.
Speaker 2: In Manhattan with a view of a New York City
Speaker 2: and maybe you can call it the trajectory from Washington
Speaker 2: up to Boston. Tell us the new productivity you observe
Speaker 2: in Austin. In Atlanta, I read about the Georgia boom
Speaker 2: here a couple articles the last couple of days, and
Speaker 2: then out to California. Jeffrey Cleveland, the new productivity in America.
Speaker 3: Do you observe it?
Speaker 1: Well, yeah, I do, and we definitely are seeing more
Speaker 1: productivity internally. You know, we've got offices in Los Angeles, Boston, London,
Speaker 1: and Milan, so I know our London trading floor tunes
Speaker 1: into this program, Tom.
Speaker 5: So hello to those folks. And I think the productivity
Speaker 5: is maybe it's the key here.
Speaker 1: You can have higher wage growth four to five percent
Speaker 1: nominal wage growth, and it not mean that you have
Speaker 1: higher inflation if you get productivity to pick up on
Speaker 1: a sustainable basis. The last twelve months, I think we've
Speaker 1: seen that productivity picked up.
Speaker 5: It's about two percent year on year. So do we
Speaker 5: get more gains there?
Speaker 1: Do we get you know, sustainable two percent type of
Speaker 1: productivity growth, that's a that's a big open question. We
Speaker 1: need it because that can keep inflation and check. Otherwise
Speaker 1: we might we might end up at higher levels of
Speaker 1: inflation or higher rates of inflation.
Speaker 2: As I mean, Jeff, I got thirty seconds left. Did
Speaker 2: you really swim across the English channel?
Speaker 3: Yes?
Speaker 1: There, two thousand and eight, September thirteen, two thousand and eight.
Speaker 5: It was a Saturday.
Speaker 1: I believe Lehman was preparing to file bankerscy on that
Speaker 1: Monday morning. So in the midst of the financial crisis,
Speaker 1: I just decided to swim the twenty six miles from
Speaker 1: Dover in the UK to France ten hours and change.
Speaker 3: That's phenomenal.
Speaker 2: What was your one observation that you did not expect
Speaker 2: when you did this amazing feet?
Speaker 3: What was the thing with learned?
Speaker 1: It's the cold, Tom, It's not the distance. You can train,
Speaker 1: you can prepare for the distance. It's difficult to prepare
Speaker 1: for the cold. It was fifty eight degrees fahrenheit in
Speaker 1: the water that day, so that was that was the
Speaker 1: big challenge.
Speaker 3: Jeffrey, thank you so much.
Speaker 2: Don't be a stranger way out on the west coast
Speaker 2: out of Claremont and all his work with Peyton and Rigel.
Speaker 2: Jeffrey Cleveland with us this morning. Commercial real estate isn't
Speaker 2: part of the buoyancy right now. And instead of talking,
Speaker 2: you know, we could talk sell side by this stock
Speaker 2: sell that. How about talking to somebody with a heritage
Speaker 2: Back to Grubb and Ellis and he's with Marcus and
Speaker 2: Miltchep in the trenches of this is somethime. Geez joins
Speaker 2: us right now with twenty six years of like in
Speaker 2: the trenches work. I love that on Twitter. Whether it's
Speaker 2: an ex JP Morgan guy, I don't have them in
Speaker 2: front of me. And it'll take a certain property. It's suburban,
Speaker 2: it's nineteen eighties. Either they're given the keys back to
Speaker 2: the bank or the selling it for an eighty six
Speaker 2: percent discount. How bad is it out there in nineteen eighties?
Speaker 2: Ugly suburban office buildings that we work used to be in,
Speaker 2: but they're.
Speaker 3: Not in them anymore.
Speaker 6: Good morning, Great to be with you on the program.
Speaker 6: There are instances of those pretty terrible occurrences that we're
Speaker 6: tracking and witnessing all over the country, mostly in urban areas,
Speaker 6: less so in suburban areas, and very limited to exactly
Speaker 6: what you said. Older product that's obsolete, that hasn't been
Speaker 6: kept up, didn't have capital improvements, especially in suburban markets
Speaker 6: where migration has benefited office usage. Look at Florida, for example,
Speaker 6: the office market there is doing far better than many
Speaker 6: other markets.
Speaker 3: What happens to that building?
Speaker 2: If this was in Quincy, Mass outside one twenty eight
Speaker 2: too far from Famway Park for me to live there,
Speaker 2: But there's Quincy Mass typical building belly up the person
Speaker 2: that bought that for twenty dollars per square foot or whatever,
Speaker 2: what are they going to do with that property?
Speaker 3: Mostly reuse.
Speaker 6: Office is very difficult to reimagine and reuse. We saw
Speaker 6: retail go through a significant degree of reuse and reimagination
Speaker 6: of obsolete shopping centers over the last fifteen twenty years.
Speaker 6: Much easier to do than office buildings, which has a
Speaker 6: cost of conversion to other uses and cost of modifications
Speaker 6: is a lot higher. But there are entrepreneurial and private
Speaker 6: investors out there with a lot of capital on the side, yes,
Speaker 6: that are converting these distressed situations to really interesting investment
Speaker 6: opportunities over the long haul. One really important factor commercial
Speaker 6: real estate is being judged as a book by the
Speaker 6: cover of that example that you just talked about, And
Speaker 6: the generalization is really harmful because apartment fundamentals are fine.
Speaker 6: They're soft, but they're fine. Retail is coming back strong.
Speaker 6: Niches like self storage, hospitality, they're all doing very very well.
Speaker 6: Industrial warehouses still doing very well.
Speaker 3: Little bit of how he did that. He said, basically, Tom,
Speaker 3: you don't.
Speaker 5: Know what you're talking about, touch and go, but I do.
Speaker 4: I want to go back to that thought on conversion,
Speaker 4: because how many you must hear that all the time.
Speaker 4: Why don't we just take all this unused office space
Speaker 4: converted into residential Like you said, I mean the cost
Speaker 4: to do that is very high. But elaborate a little
Speaker 4: bit more on that. There are some people who are trying.
Speaker 5: To do that.
Speaker 6: There are and there's examples that work out. If the
Speaker 6: basis of acquiring the distressed office really justifies the amount
Speaker 6: of costs that there is, we're seeing other uses start
Speaker 6: to pop up. It's interesting how versatile the market is.
Speaker 6: You have like data banks, you have outsourced call centers
Speaker 6: that are now able to get housed in some of
Speaker 6: this obsolete or older or highly distressed office properties that
Speaker 6: weren't even on the radar three or four years ago
Speaker 6: or before the pandemic. And the one thing that it's
Speaker 6: also important to communicate the perception is that this threat
Speaker 6: of what's happening with office use may bring down the
Speaker 6: entire banking system or may become a contagion for commercial
Speaker 6: real estate loans. The banking system has a three and
Speaker 6: a half percent total exposure to office loans as a
Speaker 6: percent of all loans outstanding, so and half of office
Speaker 6: space is performing just fine. The newer suburban product. The
Speaker 6: newer urban product as a ten to twelve percent vacancy rate.
Speaker 6: It's the older, obsolete urban market that's seeing vacancies of
Speaker 6: twenty five percent or higher.
Speaker 4: Well, focusing on the urban core, I want to talk
Speaker 4: about the path that even got us to this conversation,
Speaker 4: because the typical narrative is that you look at the pandemic,
Speaker 4: this shift to hybrid work that really killed off a
Speaker 4: lot of what you're seeing in the urban core. But
Speaker 4: you make the point in your notes that office demand,
Speaker 4: actually it was deteriorating before the pandemic even started.
Speaker 3: That's true.
Speaker 6: That's wild. That is true. That has a lot to
Speaker 6: do with the fact that millennials were entering marriage age
Speaker 6: or those that have had already been in that category,
Speaker 6: or moving to suburbs to buy their first homes, and
Speaker 6: they were tired of being in the urban core. After
Speaker 6: ten years of a demographic boom that really benefited urban America,
Speaker 6: that shift with millennials aging and moving to suburbs that
Speaker 6: had already started to show.
Speaker 2: You notice how no one ever talks about They talk
Speaker 2: about the marriage age.
Speaker 3: Yeah, nobody ever talks about the divorce age. That's where
Speaker 3: you're moving from the suburbs to wherever. I don't know
Speaker 3: why I brought that.
Speaker 2: Probably I want this is brilliant. I was with a
Speaker 2: real estate heavyweight last night. I think he owns half
Speaker 2: the Upper West Side, and I said to him, and
Speaker 2: I think the media has really got this wrong.
Speaker 3: The magic of your business is there is a loss taken.
Speaker 3: I get that.
Speaker 2: But after a seven year old or whatever, when the
Speaker 2: loss is taken, the market clears and we move on.
Speaker 3: I don't think that's talked about enough. Correct expand on that.
Speaker 6: That's the benefit of owning commercial real estate for the
Speaker 6: long term. And if you don't get over your skis
Speaker 6: by taking on too much leverage, there is very fewsiness
Speaker 6: is where you can't ride out a downturn.
Speaker 2: You write it out and you wait, and then you
Speaker 2: find it a twenty cents on the dollar. Are people
Speaker 2: really My answer is foreign money is going to come
Speaker 2: in at fifty cents of the dollar. Where you know,
Speaker 2: basically this goes back to your hair. Did you grub
Speaker 2: an ellis? Where's your number on that?
Speaker 6: Well, again, on a very selective basis, this is not
Speaker 6: a repeat of the early nineties RTC and mass scaled
Speaker 6: discounting of commercial real estate in a fire sale, which
Speaker 6: is what the RTC was. Well, you're talking about as
Speaker 6: much more select situations for the most part, limited to
Speaker 6: office space, maybe some absolutely chopping centers, and so the
Speaker 6: twenty cents on the dollar kind of a theme is
Speaker 6: not the overriding outlook for this market. Like I said,
Speaker 6: many other product types are doing just fine. They're not
Speaker 6: even close to being in a distress.
Speaker 3: This has been a huge value.
Speaker 2: In a live chat on Twitter's on our YouTube is
Speaker 2: lit up, i said, thank you so much, don't be
Speaker 2: a stranger.
Speaker 6: Please caet out my pleasure for great to be with you,
Speaker 6: And there's.
Speaker 3: Clear talking there.
Speaker 2: On CIRE commercial at real estate, we like to have
Speaker 2: the newspapers with us here. Come on at Lisa Safety,
Speaker 2: what are our boring you or me? And New York
Speaker 2: newspapers look like?
Speaker 7: All right, so we're starting with the Wall Street Journal.
Speaker 7: This is an exclusive. It's really in depth, so I'm
Speaker 7: gonna try and get to the nuts and bolts of
Speaker 7: it as best I can. But it says a lot
Speaker 7: of women leaving Goldman sacks because they're not getting those
Speaker 7: big positions at the company. So the executives decided that
Speaker 7: in order to run groups in the market's division, so
Speaker 7: we'll start there, they would need to have certain experience.
Speaker 7: Now women didn't have certain that amount of that experience.
Speaker 7: Men were affected too, but bigger impact on women, so
Speaker 7: a lot of them left. Then you have the asset
Speaker 7: management side of it. They had changes that were overseen
Speaker 7: by David Solomon. They created new leadership jobs and men
Speaker 7: were chosen to fill those positions, some cases passing over women.
Speaker 7: So this all comes down to Monday, David Solomon plans
Speaker 7: to host several women partners for dinner at his Manhattan apartment.
Speaker 7: They're going to face questions about why it hasn't happened,
Speaker 7: why women haven't advanced over at the company. So this
Speaker 7: has been an ongoing issue. I mean Solomon became president,
Speaker 7: when he became CEO, he made promoting women to senior
Speaker 7: levels like a firm, This was going to be a
Speaker 7: priority over at the firm. And so these women are
Speaker 7: saying it's not happening. So what's going to be.
Speaker 3: Done, Katie, What do you think?
Speaker 4: I mean you think about reporting from her own Shri Natarajan,
Speaker 4: he broke the news last month that Beth Hammock. She
Speaker 4: was one of the most likely women seen likely to
Speaker 4: break into the top tier at Goldmen Sack. She's leaving
Speaker 4: after thirty years. Of course, the details of that departure unknown,
Speaker 4: but it sort of fits into the broader theme that
Speaker 4: the Wall Street Journal is covering here.
Speaker 2: It's really really to me a long term cultural issue,
Speaker 2: which is a sensitive issue. I'm going to say good
Speaker 2: morning in New Jersey to the Camden Water Company, Camden,
Speaker 2: New Jersey. I think it's an American water park. I
Speaker 2: don't have the name in front of me. Who have
Speaker 2: aggressively done what people are talking about. They really have
Speaker 2: a balance board with women in management, and it's got
Speaker 2: to be a cultural decision, doesn't matter if it's Golden
Speaker 2: Sacks or anybody else.
Speaker 3: It's great reporting for the Wallster Journal.
Speaker 2: As you mentioned shrine Otto Roger on the watch at
Speaker 2: Bloomberg News.
Speaker 3: What else do you have?
Speaker 7: Sure we're talking about Gerald Levin, This was all over
Speaker 7: the news. He was behind the nineteen ninety merger of
Speaker 7: Time Warner Communications. He passed away Wednesday, was diagnosed with
Speaker 7: Parkinson's disease. But he was known for so many things.
Speaker 7: He oversaw the purchase of Turner Broadcasting in nineteen ninety six.
Speaker 7: Also remembered though for that disastrous decision selling Time Warner
Speaker 7: to upstart America Online at the peak of that Internet bubble.
Speaker 7: But he left AOL Time winner twenty two thousand and
Speaker 7: two after the company posted those big losses, and he
Speaker 7: was eighty four years old.
Speaker 2: I had the clearest memories of four ninety nine park
Speaker 2: In talking to Steve case that more and the clearest memories,
Speaker 2: and we couldn't figure the transaction out with that said,
Speaker 2: mister Levin was hugely philanthropic, and Katie, you can give
Speaker 2: some perspective here. This is a guy that followed the
Speaker 2: Greyfeld footsteps out of Haverford College.
Speaker 4: He graduated in nineteen sixty from Haverford College. He had
Speaker 4: a degree in philosophy in Haverford.
Speaker 3: Which is their heavyweight degree. Yeah, that's like why you
Speaker 3: go to haverdid.
Speaker 4: Yeah, I've full disclosure. I went to Haverford. Yeah, yeah,
Speaker 4: Well just for the audience. Maybe they don't know, but
Speaker 4: Haveverford Obviously it's a Quaker founded school and those roots
Speaker 4: run really deep at Haverford even today. I mean I
Speaker 4: graduated in twenty fifteen and that was you know still
Speaker 4: the guiding principal of the schools.
Speaker 3: So freaking old, No, Lisa, please.
Speaker 4: It was like ten years ago almost, and I've been
Speaker 4: at Bloomberg ever since.
Speaker 3: Okay, she can't come back tomorrow, right, cancel.
Speaker 7: We're talking about people who want to go to Showeo
Speaker 7: Tani's debut with the Dodgers in Soul next week. It's
Speaker 7: gonna cost you. It's gonna cost you more than three
Speaker 7: thousand dollars, five times the face value. That's because you
Speaker 7: have the secondary market. You have ticket based scalpers. Here's
Speaker 7: the thing, though, Those scalpers say that they'll accompany buyers
Speaker 7: to get them into the game, So you actually go
Speaker 7: with the scalper into the game. I don't know if
Speaker 7: they'll buy you a drink there while you're at the game,
Speaker 7: but apparently they're gonna go with you while you're the
Speaker 7: This is his debut with the Dodgers sold next week
Speaker 7: because it's like a six games here.
Speaker 3: Oh, the Pacific Room Dodgers. Yeah, this is San Diego
Speaker 3: in La going.
Speaker 5: Over to Korea, right, yes, correct.
Speaker 2: And they're gonna do career Japan whatever. I call them
Speaker 2: the Pacific Room Dodgers because the amount of money they're
Speaker 2: throwing around. You can only make that back off of
Speaker 2: massive Asian interest.
Speaker 4: I mean three thousand dollars a ticket. That's like Taylor
Speaker 4: Swift level.
Speaker 5: That's true.
Speaker 2: No, it's it's huge and a major shot at the
Speaker 2: baseball I've seen some of the San Diego Padre Prix
Speaker 2: on this and you know they're excited to go and yeah,
Speaker 2: it reached true. I remember the first time I saw
Speaker 2: NFL football in London.
Speaker 3: I was in what a shock. I was in a
Speaker 3: bar by the Tower of London, even bigger shock and
Speaker 3: they were really captivated.
Speaker 2: I mean London really cared in that bar about NFL football.
Speaker 3: I think it's going to be the same over there.
Speaker 3: It's a huge deal.
Speaker 7: What was your bevers of choice?
Speaker 3: I have no recollection. There was some grog from the
Speaker 3: sixteenth century. Are you donner? Do you have one more?
Speaker 7: One more quickly? We heard about this yesterday to Elon
Speaker 7: Musk canceling CNN veteran Don Lemon show just days before
Speaker 7: it was supposed to go on X. There's been this
Speaker 7: back and forth on X. You know. Lemon said there
Speaker 7: will be additional episodes of the series that will appear
Speaker 7: on YouTube, podcast channels and X but Elon Mus said
Speaker 7: the show's approach was basically just CNN but on social media,
Speaker 7: and he said that doesn't work. That's the reason why
Speaker 7: he canceled.
Speaker 3: Lisa Matereo, thank you so much.
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