1 00:00:00,800 --> 00:00:04,040 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 2 00:00:04,040 --> 00:00:06,920 Speaker 1: my co host Matt Miller. Every business day, we bring 3 00:00:06,960 --> 00:00:11,520 Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along 4 00:00:11,520 --> 00:00:15,600 Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast 5 00:00:15,600 --> 00:00:18,439 Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and 6 00:00:18,480 --> 00:00:23,120 Speaker 1: at Bloomberg dot com slash podcast. I don't know, for me, 7 00:00:23,280 --> 00:00:26,760 Speaker 1: the most compelling read on the Bloomberg terminal today as 8 00:00:26,800 --> 00:00:28,640 Speaker 1: the article I first read on the train coming in 9 00:00:29,080 --> 00:00:33,000 Speaker 1: entitled how a Bloomberg reporter's family escaped the Taliban an 10 00:00:33,040 --> 00:00:35,760 Speaker 1: account of the extreme measures it takes to get out 11 00:00:35,800 --> 00:00:38,200 Speaker 1: of Afghanistan. And clearly we have a lot of news 12 00:00:38,280 --> 00:00:40,519 Speaker 1: items about, you know, the folks that were helping the 13 00:00:40,640 --> 00:00:43,680 Speaker 1: US and Afghanistan UH and are still left behind and 14 00:00:43,760 --> 00:00:45,560 Speaker 1: trying to get them out. And this is a first 15 00:00:45,960 --> 00:00:50,120 Speaker 1: hand account. And Reharden was there. She is the reporter 16 00:00:50,200 --> 00:00:53,199 Speaker 1: on the story. She's a Washington carsponting for Bloomberg Television. 17 00:00:53,520 --> 00:00:56,080 Speaker 1: And Marie, thanks so much for joining us. Tell us 18 00:00:56,080 --> 00:00:59,480 Speaker 1: about this Bloomberg reporter's family who was able to escape 19 00:00:59,480 --> 00:01:02,320 Speaker 1: the Taliban and and what are your connections to the story. 20 00:01:02,760 --> 00:01:04,880 Speaker 1: Thanks so much and thanks thanks for reading the piece. 21 00:01:05,280 --> 00:01:12,000 Speaker 1: Uh this family that I helped evacuate alongside with completely 22 00:01:12,000 --> 00:01:15,560 Speaker 1: the support of Bloomberg and Bloomberg Security operations, we had 23 00:01:15,600 --> 00:01:18,720 Speaker 1: devised this plan. They are a colleagues family. It was 24 00:01:18,840 --> 00:01:22,360 Speaker 1: nine of them. They were in Hara, Afghanistan, and we 25 00:01:22,360 --> 00:01:24,880 Speaker 1: were able to get them to Pakistan and then finally 26 00:01:25,040 --> 00:01:27,520 Speaker 1: get a country to agree to asylum because we reached 27 00:01:27,520 --> 00:01:31,360 Speaker 1: out to a ton for Greece and so I had 28 00:01:31,440 --> 00:01:33,880 Speaker 1: met them when they made it over the border in 29 00:01:34,000 --> 00:01:38,000 Speaker 1: Islamabad to go through some paperwork. UM, given how chaotic 30 00:01:38,160 --> 00:01:41,240 Speaker 1: evacuations were not, a lot of paperwork was completely in order, 31 00:01:41,280 --> 00:01:44,920 Speaker 1: but we were still able to UM. Pakistan has been 32 00:01:44,959 --> 00:01:46,839 Speaker 1: dealing with a lot of these issues, over a hundred 33 00:01:46,840 --> 00:01:49,440 Speaker 1: thousand people like this. They were working as what they 34 00:01:49,440 --> 00:01:53,240 Speaker 1: would call humanitarian corridor. And so that was my involvement, 35 00:01:53,400 --> 00:01:56,160 Speaker 1: and really we thought I should. I felt like I 36 00:01:56,160 --> 00:01:58,320 Speaker 1: should write this piece because I was given such a 37 00:01:58,360 --> 00:02:02,760 Speaker 1: first hand a count and glimpse of how hard it 38 00:02:02,840 --> 00:02:06,240 Speaker 1: is this whole process. There's so many nose there's so 39 00:02:06,320 --> 00:02:10,080 Speaker 1: many false hopes, and it's like every other next step 40 00:02:10,160 --> 00:02:12,799 Speaker 1: almost feels like a miracle until the very end, and 41 00:02:12,880 --> 00:02:18,519 Speaker 1: even though the family is safe and they definitely are 42 00:02:18,680 --> 00:02:21,640 Speaker 1: so fortunate and realize their fate is so different than 43 00:02:21,680 --> 00:02:25,000 Speaker 1: their friends at home. I'm a far had our colleagues 44 00:02:25,080 --> 00:02:27,440 Speaker 1: brother who I spent a lot of time with, said 45 00:02:27,480 --> 00:02:30,320 Speaker 1: that his friends at home say to him, we are 46 00:02:30,440 --> 00:02:33,800 Speaker 1: alive but dead mentally given the fate of the country 47 00:02:33,880 --> 00:02:37,799 Speaker 1: under Taliban rule. The fact of the matter is that 48 00:02:37,919 --> 00:02:40,400 Speaker 1: even if you're lucky enough to get out and have 49 00:02:40,560 --> 00:02:44,480 Speaker 1: the support, it's such an uphill battle for refugees and 50 00:02:44,560 --> 00:02:47,320 Speaker 1: there's really no centralized system. And now the world is 51 00:02:47,480 --> 00:02:50,040 Speaker 1: grappling with another refugee crisis when it looks at Ukraine. 52 00:02:50,120 --> 00:02:52,400 Speaker 1: So the numbers just continue and I don't feel like 53 00:02:52,440 --> 00:02:55,720 Speaker 1: there's a lot of attention put on it. So, um, 54 00:02:55,800 --> 00:02:57,680 Speaker 1: let's hear first of all about the family, I mean, 55 00:02:58,320 --> 00:03:02,000 Speaker 1: big extended family. I wish, you know, we could show 56 00:03:02,040 --> 00:03:04,480 Speaker 1: all of our radio listeners their their picture that we 57 00:03:04,520 --> 00:03:06,519 Speaker 1: had on television this morning, because they look so happy 58 00:03:06,560 --> 00:03:11,120 Speaker 1: and healthy. Now where are they, How are they doing well? 59 00:03:11,360 --> 00:03:14,560 Speaker 1: The family is in Greece, They're doing very well. Um. 60 00:03:14,600 --> 00:03:16,799 Speaker 1: It was nine of them, right, so quite a lot. 61 00:03:16,880 --> 00:03:20,560 Speaker 1: Not everyone spoke English. They speak dry, which is like 62 00:03:20,600 --> 00:03:26,079 Speaker 1: the Afghan version of farsi Um and they're very educated people, 63 00:03:26,320 --> 00:03:29,840 Speaker 1: so they left jobs. His sister, Frey Doune, our colleague. 64 00:03:29,880 --> 00:03:32,520 Speaker 1: His sister Lena was working for you in Habitat. His 65 00:03:32,600 --> 00:03:35,320 Speaker 1: brother Farhad was a web developer. He also was running 66 00:03:35,320 --> 00:03:40,960 Speaker 1: a very uh Western focused cultural site about human rights 67 00:03:41,800 --> 00:03:46,000 Speaker 1: in Afghanistan as well. And his younger brother, Hamaiun was 68 00:03:46,080 --> 00:03:49,840 Speaker 1: just finishing up. He's incredibly bright, his engineering degree at 69 00:03:49,880 --> 00:03:53,080 Speaker 1: Harat University. So they had they left this all behind. 70 00:03:53,200 --> 00:03:57,400 Speaker 1: But of course for them they could not stay. And 71 00:03:57,480 --> 00:04:00,680 Speaker 1: so much of that was because the answer you get 72 00:04:00,720 --> 00:04:03,520 Speaker 1: from so many people is because of the outlook for 73 00:04:03,560 --> 00:04:06,640 Speaker 1: women and girls in the country now. So his sister 74 00:04:06,720 --> 00:04:08,440 Speaker 1: that worked for you in Habitat, that would have come 75 00:04:08,480 --> 00:04:10,880 Speaker 1: to an end. His other sister, if she wanted to 76 00:04:10,920 --> 00:04:13,800 Speaker 1: go to college a little bit younger, that would be impossible. 77 00:04:14,680 --> 00:04:18,320 Speaker 1: Women's lives are back to talibanes, covering up from head 78 00:04:18,360 --> 00:04:21,960 Speaker 1: to toe. They've pretty much disappeared from the streets many 79 00:04:22,000 --> 00:04:24,880 Speaker 1: of them. Only a few really are able to keep 80 00:04:24,920 --> 00:04:27,520 Speaker 1: their jobs. So many of them are now relegated back 81 00:04:27,560 --> 00:04:29,960 Speaker 1: to their homes. They can't even go out and travel 82 00:04:30,279 --> 00:04:33,560 Speaker 1: without a male chaperone. Uh so for so many of 83 00:04:33,600 --> 00:04:36,960 Speaker 1: these women, and some of them were even born during 84 00:04:37,120 --> 00:04:40,159 Speaker 1: US when the US was in the country during this 85 00:04:40,320 --> 00:04:43,279 Speaker 1: US occupation, so they don't even understand what the Taliban 86 00:04:44,040 --> 00:04:47,479 Speaker 1: rule feels like. And that that's that was like a 87 00:04:47,520 --> 00:04:50,880 Speaker 1: heartbreaking moment getting to know his sisters and what their 88 00:04:50,920 --> 00:04:53,800 Speaker 1: fate could have been. So emrie. I mean, this is 89 00:04:54,040 --> 00:04:57,680 Speaker 1: a positive story with a positive ending thanks to you 90 00:04:57,800 --> 00:05:02,719 Speaker 1: and the folks at Bloomberg. What is the expected fate 91 00:05:02,800 --> 00:05:04,760 Speaker 1: of the other folks who would like to get out 92 00:05:04,800 --> 00:05:08,440 Speaker 1: of Afghanistan? How many people are stuck there? Are stuck there? Yeah, 93 00:05:08,480 --> 00:05:12,719 Speaker 1: I mean it's incredibly difficult. So it's a it's a 94 00:05:12,760 --> 00:05:16,880 Speaker 1: country of about forty million um inside. They also recently 95 00:05:16,920 --> 00:05:22,800 Speaker 1: had a a earthquake. They face dire hunger. So many 96 00:05:22,800 --> 00:05:26,960 Speaker 1: people in Afghanistan um there are serious, serious issues and 97 00:05:27,000 --> 00:05:30,040 Speaker 1: so much as that is because more than forty of 98 00:05:30,080 --> 00:05:34,200 Speaker 1: their budget GDP came from international aid and not all 99 00:05:34,360 --> 00:05:38,400 Speaker 1: was pulled given the Taliban is running the country now 100 00:05:38,920 --> 00:05:44,640 Speaker 1: and they just don't have the infrastructure to supply basic 101 00:05:44,760 --> 00:05:49,279 Speaker 1: needs for people heating, hung being able to eat, the 102 00:05:49,320 --> 00:05:51,479 Speaker 1: price of food, the price of energy. We talked about 103 00:05:51,520 --> 00:05:53,720 Speaker 1: it every day in the West, but it's gone up 104 00:05:54,320 --> 00:05:58,320 Speaker 1: in Afghanistan. Even some people have come to sell their 105 00:05:58,360 --> 00:06:01,120 Speaker 1: young daughters into marriage so they can feed the rest 106 00:06:01,120 --> 00:06:03,760 Speaker 1: of the family. And when you look at those that 107 00:06:03,839 --> 00:06:07,400 Speaker 1: are trying to flee, many of them are in limbo. 108 00:06:07,480 --> 00:06:10,760 Speaker 1: Whether it's Pakistan that has more than a million Iran 109 00:06:10,839 --> 00:06:14,760 Speaker 1: that likely has a million Afghans. And then you look 110 00:06:14,800 --> 00:06:16,440 Speaker 1: at the schemes at some of the countries in the 111 00:06:16,480 --> 00:06:20,600 Speaker 1: West are doing, they haven't actually been fully successful. In 112 00:06:20,640 --> 00:06:23,080 Speaker 1: the United Kingdom alone, ten thousand Afghans are still being 113 00:06:23,080 --> 00:06:26,080 Speaker 1: housed in hotels. Right, and Marie, thank you so much 114 00:06:26,120 --> 00:06:29,400 Speaker 1: for this reporting. Just said an extraordinary story, folks. Please 115 00:06:29,480 --> 00:06:32,040 Speaker 1: check it out Bloomberg dot com. Uh and you can 116 00:06:32,080 --> 00:06:35,000 Speaker 1: also find it on the terminal And Marie Hordern, Washington 117 00:06:35,080 --> 00:06:40,120 Speaker 1: correspondent Bloomberg Television. Fascinating story, outstanding reporting of just a 118 00:06:40,120 --> 00:06:47,839 Speaker 1: compelling story here all right, next week Bloomberg is sending 119 00:06:47,880 --> 00:06:52,840 Speaker 1: the surveillance radio slash TV team out at Jackson Hole, Wyoming. 120 00:06:53,040 --> 00:06:55,520 Speaker 1: Why because a bunch of central bankers get out there, 121 00:06:55,600 --> 00:06:57,279 Speaker 1: get together out there this time of year, and they 122 00:06:57,320 --> 00:07:01,320 Speaker 1: talk about economic stuff, monetary policy, all that kind of stuff. 123 00:07:01,360 --> 00:07:03,640 Speaker 1: I did not rate a ticket. I'll let you know, 124 00:07:04,160 --> 00:07:06,560 Speaker 1: so I'll be here. But we want to get a 125 00:07:06,560 --> 00:07:08,480 Speaker 1: sense of what might be happening at in Jackson Hole, 126 00:07:08,560 --> 00:07:10,400 Speaker 1: what might be going on in the minds of our 127 00:07:10,440 --> 00:07:12,200 Speaker 1: good friends at the Federal Reserve. And we do that. 128 00:07:12,240 --> 00:07:15,040 Speaker 1: We go to our good friend Danielle di Martino, Booth 129 00:07:15,120 --> 00:07:18,400 Speaker 1: CEO and chief strategist for Quill Intelligence. She was a 130 00:07:18,440 --> 00:07:21,720 Speaker 1: former adviser at the Federal Reserve Bank of Dallas, so 131 00:07:21,760 --> 00:07:24,600 Speaker 1: she knows a thing or two about the fit. Um. 132 00:07:24,640 --> 00:07:26,880 Speaker 1: All right, so Tom and company will be out in 133 00:07:27,080 --> 00:07:30,520 Speaker 1: Jackson Hole. H Danielle, what do you think they should 134 00:07:30,560 --> 00:07:32,840 Speaker 1: be looking out for? What? Maybe? What questions should they 135 00:07:32,880 --> 00:07:36,520 Speaker 1: be asking? Well, I think that before we go there, 136 00:07:36,560 --> 00:07:37,960 Speaker 1: I think I should point out that I'm at the 137 00:07:38,040 --> 00:07:41,400 Speaker 1: st four where Tom Keane stocks up nice and um, 138 00:07:41,440 --> 00:07:44,200 Speaker 1: I'm actually getting his entire line as we speak at 139 00:07:45,200 --> 00:07:48,520 Speaker 1: music in the background. Yes, indeed, Uh, I think the 140 00:07:48,640 --> 00:07:52,400 Speaker 1: question that really needs to be asked is about quantitative tightening, 141 00:07:52,960 --> 00:07:55,880 Speaker 1: because even if we do see kind of a dissipation 142 00:07:55,960 --> 00:07:58,920 Speaker 1: in the magnitude of the rate types, let's say we 143 00:07:58,960 --> 00:08:02,200 Speaker 1: get tifty basis point since September maybe and November maybe 144 00:08:03,000 --> 00:08:06,760 Speaker 1: in December. I think the FED intends to and certainly 145 00:08:06,960 --> 00:08:11,080 Speaker 1: wants to keep quantitative tightening, ramping up to being full 146 00:08:11,080 --> 00:08:14,280 Speaker 1: speed by the end of September and and moving forward 147 00:08:14,320 --> 00:08:17,240 Speaker 1: with that in the background. To use j Pale's words, 148 00:08:17,800 --> 00:08:20,480 Speaker 1: the effect of that liquidity depletion, I think is the 149 00:08:20,560 --> 00:08:24,600 Speaker 1: great unknown for marketing, for investors in the market as 150 00:08:24,600 --> 00:08:27,440 Speaker 1: well as central banks bankers. And I'd love to hear 151 00:08:27,480 --> 00:08:30,200 Speaker 1: a little bit more about where they think that's going, 152 00:08:30,320 --> 00:08:33,480 Speaker 1: how how that's going to play out. Alright, So hopefully 153 00:08:33,480 --> 00:08:35,040 Speaker 1: we get more on that, and I know that's been 154 00:08:35,080 --> 00:08:37,840 Speaker 1: a black box for a lot of people in terms 155 00:08:37,880 --> 00:08:41,160 Speaker 1: of the minutes that we got yesterday. Danielle Um. The 156 00:08:41,280 --> 00:08:45,480 Speaker 1: debate rages on today was that did we witness a 157 00:08:45,520 --> 00:08:49,520 Speaker 1: Dovish pivot or um are they saying, you know, we're 158 00:08:49,520 --> 00:08:54,480 Speaker 1: gonna get stuck in raising rates higher for longer? Well? 159 00:08:54,520 --> 00:08:57,480 Speaker 1: I think I think what the key kakeaway yesterday was 160 00:08:57,520 --> 00:09:00,720 Speaker 1: that they introduced to risk, and risks are not introduced 161 00:09:00,720 --> 00:09:04,800 Speaker 1: into FED language without purpose, And because they introduced that 162 00:09:04,840 --> 00:09:07,400 Speaker 1: downside risk, I think that that's why they've been perceived 163 00:09:07,720 --> 00:09:11,400 Speaker 1: as dubblish, even though they were more emphatic in terms 164 00:09:11,480 --> 00:09:15,080 Speaker 1: of their inflation goals. So but again these there there's 165 00:09:15,120 --> 00:09:18,400 Speaker 1: no happenstance in FED language, and everything is debated deeply 166 00:09:18,840 --> 00:09:21,360 Speaker 1: before any bourbage is at it. So I think that 167 00:09:21,360 --> 00:09:24,679 Speaker 1: that market participants were correct to to deduce that there 168 00:09:24,760 --> 00:09:28,960 Speaker 1: might be a pause coming up. You know, it's it's interesting, Daniel. 169 00:09:28,960 --> 00:09:31,840 Speaker 1: We heard from a lot of the retailers this week here, 170 00:09:31,880 --> 00:09:35,400 Speaker 1: and you know they all have various levels of caution 171 00:09:35,520 --> 00:09:40,440 Speaker 1: in their outlook. Here. What is the quill uh view 172 00:09:40,640 --> 00:09:44,560 Speaker 1: of the economy? Is there a recession in? Are we 173 00:09:44,760 --> 00:09:46,960 Speaker 1: in one today? If you define up by two quarters 174 00:09:46,960 --> 00:09:51,480 Speaker 1: of negative GDP growth? You know, I've been watching SMP 175 00:09:51,600 --> 00:09:56,839 Speaker 1: Global's GDP estimate tickdown, tickdown, tickdown. Um, it's it's now. 176 00:09:56,880 --> 00:10:00,280 Speaker 1: I believe at point seven for the third quarter and 177 00:10:00,440 --> 00:10:02,600 Speaker 1: the second quarters kind of going to come out a 178 00:10:02,600 --> 00:10:07,040 Speaker 1: whisper under uh under the zero line negatives. And if 179 00:10:07,080 --> 00:10:10,080 Speaker 1: that's the case, then we'll probably see three consecutive prints 180 00:10:10,480 --> 00:10:13,120 Speaker 1: in in the negative column and and and that is 181 00:10:13,400 --> 00:10:16,040 Speaker 1: truly a trend. Once you see that number three economists 182 00:10:16,040 --> 00:10:18,800 Speaker 1: will tell you that a trend has indeed been established. 183 00:10:19,040 --> 00:10:21,240 Speaker 1: And you know what we're looking at is the leading 184 00:10:21,800 --> 00:10:24,600 Speaker 1: sectors for the economy. We're looking at the used car 185 00:10:24,679 --> 00:10:28,400 Speaker 1: market really flat out collapse here, when when you're looking 186 00:10:28,400 --> 00:10:31,120 Speaker 1: at the wholesale side and we're looking at housing, you 187 00:10:31,160 --> 00:10:34,000 Speaker 1: know it's at quill we've actually gotten rid of We've 188 00:10:34,200 --> 00:10:38,360 Speaker 1: we've expunged all worse since the pandemic markers. We now 189 00:10:38,400 --> 00:10:40,480 Speaker 1: go back and look at trends prior to the pandemic, 190 00:10:40,640 --> 00:10:42,439 Speaker 1: and if you look at the existing home sales report 191 00:10:42,480 --> 00:10:44,720 Speaker 1: this morning, we haven't seen home sales falling like this. 192 00:10:46,320 --> 00:10:48,040 Speaker 1: That's a long time ago, and I think you need 193 00:10:48,080 --> 00:10:51,840 Speaker 1: to have perspective when it comes to interstrate sensitive leading 194 00:10:52,360 --> 00:10:56,320 Speaker 1: sectors of the economy. Those were the days the nineties, right, 195 00:10:57,360 --> 00:11:00,280 Speaker 1: um in terms so in terms of the inflation that 196 00:11:00,320 --> 00:11:03,120 Speaker 1: we're seeing and and the problems that people are facing, 197 00:11:03,480 --> 00:11:06,960 Speaker 1: does the FED take that into account? For example, their 198 00:11:07,120 --> 00:11:11,840 Speaker 1: rates mean that home sales are too expensive, but then 199 00:11:12,160 --> 00:11:14,440 Speaker 1: those who are looking to buy a home are also 200 00:11:14,520 --> 00:11:20,240 Speaker 1: seeing rent climb rapidly. Does that discussion, um, you know, 201 00:11:20,320 --> 00:11:25,320 Speaker 1: yield any kind of sympathy from the Fed. I'm not 202 00:11:25,400 --> 00:11:27,679 Speaker 1: sure if it's I'm not sure if we should be 203 00:11:27,720 --> 00:11:30,800 Speaker 1: calling it sympathy. Because of the way that housing and 204 00:11:30,880 --> 00:11:34,920 Speaker 1: shelter insflation. Rental inflation moves through the CPI is so 205 00:11:35,080 --> 00:11:38,320 Speaker 1: slowly that's that's going to be problematic. A goodfriend amount 206 00:11:38,320 --> 00:11:40,280 Speaker 1: Ivy's element, who has been following the housing industry for 207 00:11:40,400 --> 00:11:43,040 Speaker 1: more than two decades, she anticipates that we're going to 208 00:11:43,120 --> 00:11:46,400 Speaker 1: see that shelter print it's seven point zero percent from 209 00:11:46,440 --> 00:11:49,120 Speaker 1: what we saw in July, which was five. That will 210 00:11:49,160 --> 00:11:53,560 Speaker 1: be problematic for the FED, regardless of how impossible affordability is, 211 00:11:53,679 --> 00:11:56,800 Speaker 1: whether you're talking about buying or renting, because you know 212 00:11:56,920 --> 00:11:59,000 Speaker 1: a lot of there's there was talk over the last 213 00:11:59,040 --> 00:12:02,319 Speaker 1: decade or two of out the FED put, and the 214 00:12:02,360 --> 00:12:05,080 Speaker 1: idea was that, I guess sympathy is not the right word, 215 00:12:05,120 --> 00:12:06,960 Speaker 1: but the FED doesn't like to see the market go 216 00:12:07,040 --> 00:12:09,960 Speaker 1: down for a variety of reasons, and when it does, 217 00:12:10,040 --> 00:12:12,760 Speaker 1: they sort of rushed to the rescue in the past. Now, 218 00:12:12,800 --> 00:12:14,920 Speaker 1: I guess the messages there is no FED put And 219 00:12:15,040 --> 00:12:16,880 Speaker 1: I don't think a lot of people feel bad for 220 00:12:16,920 --> 00:12:19,160 Speaker 1: market participants, but you've gotta feel bad for people who 221 00:12:19,160 --> 00:12:24,080 Speaker 1: can't afford housing. You do, and whether you feel quote 222 00:12:24,120 --> 00:12:27,520 Speaker 1: unquote bad for market participants, right the markets are operating 223 00:12:27,520 --> 00:12:30,120 Speaker 1: into the assumption that the FED put is alive and well, 224 00:12:30,679 --> 00:12:33,040 Speaker 1: that's what we've seen since July. I don't think anybody 225 00:12:33,120 --> 00:12:39,679 Speaker 1: actually believes and that is a reflection of people assuming 226 00:12:39,720 --> 00:12:43,520 Speaker 1: that that Powell will indeed pivot all right. Daniel D. 227 00:12:43,600 --> 00:12:46,920 Speaker 1: Martino Booth thanks once again. Danielle is CEO and chief 228 00:12:46,960 --> 00:12:53,920 Speaker 1: Strategies for Quill Intelligence. Video gaming, one of the fastest 229 00:12:53,920 --> 00:12:57,280 Speaker 1: growing areas in the media slash tech space over the 230 00:12:57,360 --> 00:12:59,839 Speaker 1: last decades, certainly got a big, big bump with the 231 00:13:00,440 --> 00:13:03,400 Speaker 1: stay at home during the pandemic. But we saw in Video, 232 00:13:03,800 --> 00:13:07,320 Speaker 1: which makes a lot of video gaming stuff on the 233 00:13:07,360 --> 00:13:11,000 Speaker 1: technology side, post some disappointing results calling out their gaming business. 234 00:13:11,040 --> 00:13:12,480 Speaker 1: So the question is kind of where are we in 235 00:13:12,520 --> 00:13:15,360 Speaker 1: that whole video gaming biz. It's such a big business 236 00:13:15,360 --> 00:13:17,560 Speaker 1: for a lot of folks. Josh Chapman, managing partner for 237 00:13:17,640 --> 00:13:21,080 Speaker 1: Convoy Ventures, joins his Convoy Ventures is an early stage 238 00:13:21,160 --> 00:13:24,480 Speaker 1: venture fund dedicated to the video gaming market. Josh, thanks 239 00:13:24,480 --> 00:13:26,320 Speaker 1: so much for taking the time here, love to get 240 00:13:26,360 --> 00:13:29,079 Speaker 1: in light of in videos results in some of the 241 00:13:29,160 --> 00:13:31,960 Speaker 1: commentary on the gaming business. What's your view of the 242 00:13:32,160 --> 00:13:36,800 Speaker 1: of the state of the video gaming business these days? Absolutely, 243 00:13:36,840 --> 00:13:40,600 Speaker 1: and Paul, thanks, Matt, thank you so much for having me. Um. 244 00:13:40,640 --> 00:13:44,360 Speaker 1: You know, although historical indicators are certainly valuable resources, we 245 00:13:44,480 --> 00:13:47,760 Speaker 1: looked at the economic downturn. We are living in a 246 00:13:47,880 --> 00:13:50,120 Speaker 1: kind of a new era of the video gaming industry. 247 00:13:50,480 --> 00:13:55,000 Speaker 1: Is models and evolved. Social stigmas have really evaporated around gaming. 248 00:13:55,040 --> 00:13:56,920 Speaker 1: It used to be not very cool to game. Now 249 00:13:56,960 --> 00:14:03,600 Speaker 1: it's totally socially acceptable. Still thinks sort of. It's uh, 250 00:14:03,640 --> 00:14:07,040 Speaker 1: it's certainly an exciting space to be in and has 251 00:14:07,120 --> 00:14:11,240 Speaker 1: lots of controversy, but uh, three point two billion people 252 00:14:11,280 --> 00:14:14,280 Speaker 1: play video games today, right, this is now the news 253 00:14:14,320 --> 00:14:17,560 Speaker 1: social square in many senses, and COVID showed that in 254 00:14:17,720 --> 00:14:22,320 Speaker 1: spades where video gaming allowed for a community platform to 255 00:14:22,400 --> 00:14:26,040 Speaker 1: continue where people weren't just talking, they were also having 256 00:14:26,080 --> 00:14:28,720 Speaker 1: fun and exploring, whether it was virtual worlds or not. 257 00:14:28,880 --> 00:14:31,280 Speaker 1: It's it really played a key role to your point 258 00:14:31,280 --> 00:14:33,960 Speaker 1: about in video and some of the brains calls that 259 00:14:34,000 --> 00:14:36,880 Speaker 1: are showing sort of this dip. What we're really seeing 260 00:14:36,880 --> 00:14:39,640 Speaker 1: here is a correction to more the eight to twelve 261 00:14:39,640 --> 00:14:42,840 Speaker 1: percent annual growth that video gaming has seen for over 262 00:14:42,880 --> 00:14:46,240 Speaker 1: two decades now. Um So, COVID kind of pushed the 263 00:14:46,320 --> 00:14:49,360 Speaker 1: video game industry up to a you know, fifteen to 264 00:14:50,440 --> 00:14:53,240 Speaker 1: annual growth rate. Really we're we're talking about is the 265 00:14:53,360 --> 00:14:56,400 Speaker 1: reversion to the mean for video gaming, and so this 266 00:14:56,480 --> 00:14:58,880 Speaker 1: is sort of a COVID correction that we're seeing across 267 00:14:58,920 --> 00:15:01,560 Speaker 1: earnings on the public side and then obviously what we 268 00:15:01,720 --> 00:15:05,160 Speaker 1: do on the you know, early stage video gaming BC side, 269 00:15:05,160 --> 00:15:08,320 Speaker 1: as we're looking at the video gaming tech and platforms 270 00:15:08,360 --> 00:15:10,520 Speaker 1: that are you know, hopefully going to be on your 271 00:15:10,560 --> 00:15:13,000 Speaker 1: Bloomberg derminal in five to ten years. Josh, what are 272 00:15:13,040 --> 00:15:15,600 Speaker 1: the games? What are the games right now that are 273 00:15:15,640 --> 00:15:19,080 Speaker 1: the most successful that that you care about as a 274 00:15:19,080 --> 00:15:21,200 Speaker 1: as someone in finance. I mean, when I was a kid, 275 00:15:21,200 --> 00:15:25,720 Speaker 1: it was all about Mario and Um and friends. And 276 00:15:25,920 --> 00:15:28,520 Speaker 1: as I got older, I got really into Halo because 277 00:15:28,520 --> 00:15:30,960 Speaker 1: you could play that. Again, since you're really people all 278 00:15:30,960 --> 00:15:32,520 Speaker 1: over the world, that was the best, dude. When I 279 00:15:32,560 --> 00:15:35,120 Speaker 1: first moved to Berlin, I had friends moving to Paris, 280 00:15:35,520 --> 00:15:38,160 Speaker 1: friends moving to Washington, d C. Friends moving to San Diego, 281 00:15:38,640 --> 00:15:41,480 Speaker 1: and we could all buy an Xbox and hang out 282 00:15:41,680 --> 00:15:45,280 Speaker 1: every night. It was just a cool, um way to 283 00:15:45,280 --> 00:15:48,280 Speaker 1: to chill with your boys. And now I play Call 284 00:15:48,320 --> 00:15:51,320 Speaker 1: of Duty all the time, even sometimes I spend way 285 00:15:51,360 --> 00:15:54,200 Speaker 1: too many hours in Red Dead Redemption, but I'm a 286 00:15:54,320 --> 00:15:58,200 Speaker 1: very mainstream h forty eight year old gamer. What is it? 287 00:15:58,240 --> 00:16:02,800 Speaker 1: What are the kids playing? Well, I'll kind of what 288 00:16:02,960 --> 00:16:06,480 Speaker 1: you're highlighting there is that gaming is allowing people to 289 00:16:06,520 --> 00:16:09,800 Speaker 1: build community and connect globally. Right, that's case in point 290 00:16:09,840 --> 00:16:12,840 Speaker 1: exactly what you just described. Secondly, there's a really interesting 291 00:16:12,880 --> 00:16:15,320 Speaker 1: staff that the average gamers an age of thirty six, 292 00:16:15,680 --> 00:16:18,440 Speaker 1: and so while you know the there is certainly a 293 00:16:18,480 --> 00:16:21,520 Speaker 1: cohort of younger and what they're playing like Fall Guys 294 00:16:21,680 --> 00:16:25,120 Speaker 1: or Fortnite or um lots of other different games that 295 00:16:25,160 --> 00:16:28,200 Speaker 1: are coming out all around the world. Um, things like 296 00:16:28,240 --> 00:16:30,840 Speaker 1: Call of Duty. I play that as well, and I 297 00:16:30,880 --> 00:16:33,280 Speaker 1: grew up playing tons of pale and hosting land parties 298 00:16:33,320 --> 00:16:35,360 Speaker 1: in Africa and Latin America where I grew up, and 299 00:16:35,400 --> 00:16:38,800 Speaker 1: so community has always been at the core of what 300 00:16:39,000 --> 00:16:42,120 Speaker 1: gaming is. But what we focus on a lot is 301 00:16:42,160 --> 00:16:45,120 Speaker 1: really looking at on the investment, looking at tech in 302 00:16:45,200 --> 00:16:49,000 Speaker 1: platforms instead of content content, which is studios and like 303 00:16:49,080 --> 00:16:52,880 Speaker 1: games themselves at maturity trade between point five to two 304 00:16:52,920 --> 00:16:56,880 Speaker 1: times revenue UM. Tech in platforms and staff businesses whether 305 00:16:56,920 --> 00:16:59,240 Speaker 1: there be two B or B two C trade at 306 00:16:59,320 --> 00:17:03,400 Speaker 1: eight forty times revenue at full maturity. So from an 307 00:17:03,400 --> 00:17:07,199 Speaker 1: investment thesis. You want to own things like Roadblocks, Discord, Unity, 308 00:17:07,280 --> 00:17:11,120 Speaker 1: app Love and Twitch, things like those companies, because at 309 00:17:11,160 --> 00:17:15,240 Speaker 1: maturity that's a dramatically different investment profile and return profile 310 00:17:15,320 --> 00:17:19,000 Speaker 1: for LPs. So give us a sense, Josh of kind 311 00:17:19,000 --> 00:17:23,520 Speaker 1: of the VC environment today for the video gaming business. 312 00:17:23,520 --> 00:17:27,600 Speaker 1: How robust is it? You know, where's the smart money going? 313 00:17:27,600 --> 00:17:29,880 Speaker 1: Where do you think the opportunities are? Has it taken 314 00:17:29,880 --> 00:17:33,400 Speaker 1: a hit as you can come out of the pandemic? Yeah, 315 00:17:33,480 --> 00:17:37,040 Speaker 1: so gaming is certainly not immune to what's going on 316 00:17:37,080 --> 00:17:40,040 Speaker 1: across all adventure. You know, the venture capital market, fuel 317 00:17:40,080 --> 00:17:43,720 Speaker 1: volume is down year to date, dollars invested is down 318 00:17:43,840 --> 00:17:48,800 Speaker 1: six here today, valuations have come down forty six, especially 319 00:17:48,800 --> 00:17:52,320 Speaker 1: at series being later given the halt of the I 320 00:17:52,400 --> 00:17:54,560 Speaker 1: p O window that's really led to growth equity and 321 00:17:54,640 --> 00:17:57,720 Speaker 1: late stage venture to come to a grinding halt since 322 00:17:57,760 --> 00:18:00,520 Speaker 1: we're focused more on speed Series A. You know, the 323 00:18:00,720 --> 00:18:05,040 Speaker 1: venture market around gaming specifically. You know, five years ago 324 00:18:05,240 --> 00:18:08,000 Speaker 1: there was less than five at a million of dedicated 325 00:18:08,000 --> 00:18:12,240 Speaker 1: asset management towards video gaming. Now there's well over four billion. 326 00:18:12,600 --> 00:18:15,560 Speaker 1: We're one of those firms. Uh, and now we've launched 327 00:18:15,560 --> 00:18:18,199 Speaker 1: our third fund looking at this space. But you know, 328 00:18:18,800 --> 00:18:21,920 Speaker 1: the the video game industry continues to drive and that's 329 00:18:21,960 --> 00:18:25,360 Speaker 1: what's driving LP capital into dedicated funds. You can see 330 00:18:25,400 --> 00:18:28,560 Speaker 1: this with Entrees and Horrors just launched their third vertical 331 00:18:28,640 --> 00:18:33,439 Speaker 1: focus gaming funds. Uh, their third vertical of industry focus 332 00:18:33,600 --> 00:18:36,679 Speaker 1: is gaming. And that's really a signal to sort of 333 00:18:36,680 --> 00:18:41,440 Speaker 1: the bulge bracket BC market that gaming deserves dedicated attention 334 00:18:41,440 --> 00:18:45,560 Speaker 1: and investment and can't be lumped in anymore to just 335 00:18:45,680 --> 00:18:48,880 Speaker 1: your media team or your BtoC team. At what point 336 00:18:48,880 --> 00:18:54,840 Speaker 1: do we see games really merge with movies and TV shows, 337 00:18:54,840 --> 00:18:58,959 Speaker 1: with you know, radio and television entertainment as well as 338 00:18:59,160 --> 00:19:03,360 Speaker 1: theater stuff. Yeah, we're already seeing that. If you remember 339 00:19:03,520 --> 00:19:07,600 Speaker 1: the popular Netflix showed the witcher um that was originally 340 00:19:07,600 --> 00:19:10,400 Speaker 1: a video game, and so video games are becoming shows. 341 00:19:10,520 --> 00:19:13,520 Speaker 1: And then we've already seen things like Spider Man becoming 342 00:19:13,560 --> 00:19:17,480 Speaker 1: one of the most successful franchises on PlayStation. The emergence 343 00:19:18,040 --> 00:19:22,320 Speaker 1: the merging of media and video gaming is absolutely converging. 344 00:19:22,440 --> 00:19:24,640 Speaker 1: A fund stat here is that the video game industry 345 00:19:24,720 --> 00:19:27,520 Speaker 1: brings in well over two hundred billion dollars in revenue 346 00:19:27,520 --> 00:19:30,399 Speaker 1: per year. To put that into context, Hollywood brings in 347 00:19:30,480 --> 00:19:36,040 Speaker 1: about forty billion, and music globally brings in about So 348 00:19:36,160 --> 00:19:41,639 Speaker 1: gaming is the predominant entertainment media industry in the world. 349 00:19:41,800 --> 00:19:44,520 Speaker 1: But now video gaming is going from just being about 350 00:19:44,600 --> 00:19:48,320 Speaker 1: fun to now merging with other industries like healthcare and education. 351 00:19:48,359 --> 00:19:50,959 Speaker 1: We've made investments in this space, so think you know, 352 00:19:51,240 --> 00:19:56,080 Speaker 1: VR oculus meditation things instead of the high cost of 353 00:19:56,119 --> 00:20:00,639 Speaker 1: going to therapy, or think of in you know, education specifically, 354 00:20:00,640 --> 00:20:03,400 Speaker 1: were invested in a company called Legends of Learning. Five 355 00:20:03,840 --> 00:20:06,679 Speaker 1: of elementary and middle school kids in America used this 356 00:20:06,720 --> 00:20:09,520 Speaker 1: platform to play games and learn. Matt play games and 357 00:20:09,600 --> 00:20:13,760 Speaker 1: learn science, and so games are interacting with other industries 358 00:20:14,280 --> 00:20:17,119 Speaker 1: in a really really cool way. Yeah, good stuff. Josh Chapman, 359 00:20:17,160 --> 00:20:21,399 Speaker 1: thanks so much for joining us there managing partner Convoy Ventures. 360 00:20:21,440 --> 00:20:24,200 Speaker 1: I was aware of the size of gaming visa VI 361 00:20:24,720 --> 00:20:27,240 Speaker 1: you know, the movie business or the music business. It 362 00:20:27,400 --> 00:20:30,280 Speaker 1: is huge. It's been one of the fastest growing pieces 363 00:20:30,400 --> 00:20:34,320 Speaker 1: of the media. Pie just not my demo, but I 364 00:20:34,359 --> 00:20:41,560 Speaker 1: know it's a big biz. Matt. So, this inflation Reduction Act, 365 00:20:42,000 --> 00:20:44,120 Speaker 1: it's got a bunch of stuff in it that I'm 366 00:20:44,160 --> 00:20:46,240 Speaker 1: not sure it's necessary. I mean, it touches a lot 367 00:20:46,240 --> 00:20:49,359 Speaker 1: of industries, even your beloved auto. I think it should 368 00:20:49,840 --> 00:20:53,840 Speaker 1: maybe you've had a different name. Yes. In any case, UM, yeah, 369 00:20:53,920 --> 00:20:57,000 Speaker 1: it's it touches the car industry. And Keith lang Um, 370 00:20:57,040 --> 00:20:59,520 Speaker 1: an automotive regulations reporter, wrote a great piece on it 371 00:20:59,560 --> 00:21:02,359 Speaker 1: a couple of days ago that just UM prompted so 372 00:21:02,400 --> 00:21:06,760 Speaker 1: many questions. Keith Um joins us now and it's great 373 00:21:06,800 --> 00:21:10,119 Speaker 1: to have you on the program. UM. My question and 374 00:21:10,440 --> 00:21:13,800 Speaker 1: the questions that are asked of me most most often 375 00:21:13,800 --> 00:21:17,560 Speaker 1: are how can I get tax credit? And your piece 376 00:21:17,640 --> 00:21:21,640 Speaker 1: points out that, UM, not everybody's gonna not every electric 377 00:21:21,680 --> 00:21:24,119 Speaker 1: car gives you that tax credit, and next year, no 378 00:21:24,880 --> 00:21:27,240 Speaker 1: current offerings are going to give you that credit. How's 379 00:21:27,280 --> 00:21:30,680 Speaker 1: that work? Well? Even under the current system, UM, not 380 00:21:30,720 --> 00:21:33,199 Speaker 1: only not every electric car qualified, it had to be 381 00:21:33,200 --> 00:21:37,120 Speaker 1: a specific type of plug in high, plug in electric 382 00:21:37,359 --> 00:21:41,040 Speaker 1: or plug in hybrid. UM. Under the new system, starting 383 00:21:41,040 --> 00:21:43,960 Speaker 1: as soon as the President signed the bill, there's a 384 00:21:44,000 --> 00:21:47,520 Speaker 1: requirement UM that most of the cars parts the car 385 00:21:47,560 --> 00:21:51,239 Speaker 1: had to be assembled in North America to qualify. UM. 386 00:21:51,280 --> 00:21:54,960 Speaker 1: Basically to comply with the the U s m c A, 387 00:21:55,080 --> 00:21:57,720 Speaker 1: the trade deal that was passing the Trump administration that 388 00:21:57,800 --> 00:22:01,720 Speaker 1: replaced NAFTA, and UM, the auto industry groups here in 389 00:22:01,760 --> 00:22:04,240 Speaker 1: Washington say that that would take the number of models 390 00:22:04,240 --> 00:22:08,040 Speaker 1: that qualify qualified last week there were seventy two models 391 00:22:08,119 --> 00:22:12,840 Speaker 1: and now about se those won't qualify today, which takes 392 00:22:12,880 --> 00:22:15,960 Speaker 1: this down to about twenty two that qualify. Yes, I 393 00:22:15,960 --> 00:22:18,840 Speaker 1: mean some some very popular models like the Hunda and 394 00:22:18,920 --> 00:22:22,520 Speaker 1: Kiya's out there. They're not gonna, I guess um qualify 395 00:22:22,640 --> 00:22:25,360 Speaker 1: under that. And then next year even cars that are 396 00:22:25,400 --> 00:22:30,200 Speaker 1: built here, uh like by GM or Ford or bmw UM, 397 00:22:30,240 --> 00:22:33,560 Speaker 1: because their components are sourced from the wrong places, they 398 00:22:33,560 --> 00:22:36,840 Speaker 1: won't qualify as that right. Yeah, there are mineral requirements 399 00:22:36,840 --> 00:22:39,600 Speaker 1: for the batteries, which is the minerals are the key 400 00:22:39,680 --> 00:22:44,600 Speaker 1: to UM electric electric vehicle production and most of those 401 00:22:44,640 --> 00:22:47,840 Speaker 1: are built in China. UM those requirements were added to 402 00:22:47,920 --> 00:22:52,080 Speaker 1: the bill to win Senator Joe Mansion support. He insisted 403 00:22:52,119 --> 00:22:56,080 Speaker 1: on that, and he was not a fan of any 404 00:22:56,160 --> 00:22:59,960 Speaker 1: tax credits for electric cars. He once called them loo 405 00:23:00,040 --> 00:23:04,840 Speaker 1: to Chris UMAs anyway, so he didn't he wasn't saying 406 00:23:04,840 --> 00:23:07,080 Speaker 1: that electric cars and ludicrous. He said it was ludicrous 407 00:23:07,080 --> 00:23:10,320 Speaker 1: that the federal government was subsidizing because he saw he 408 00:23:10,359 --> 00:23:13,159 Speaker 1: saw them as the tax credits as a giveaway to 409 00:23:14,000 --> 00:23:16,840 Speaker 1: cars that were built in China or not built in 410 00:23:16,880 --> 00:23:19,080 Speaker 1: the US. So in order to get his support for 411 00:23:19,119 --> 00:23:22,600 Speaker 1: this bill, for the broader bill, which included many long 412 00:23:22,680 --> 00:23:27,360 Speaker 1: sought democratic priorities, this is uh kind of a light 413 00:23:27,480 --> 00:23:30,800 Speaker 1: version of the Build Back Better bill that dominated discussion 414 00:23:30,800 --> 00:23:33,720 Speaker 1: in Washington for a year. And to get his vote, 415 00:23:33,760 --> 00:23:36,800 Speaker 1: they had to get any sort of ev text credit 416 00:23:36,840 --> 00:23:40,399 Speaker 1: in the bill. They had to put um these these 417 00:23:40,440 --> 00:23:45,080 Speaker 1: stringent requirements on mineral production. What do you expect to happen? Then, 418 00:23:45,720 --> 00:23:48,879 Speaker 1: our companies that build a lot of cars in this country, 419 00:23:49,040 --> 00:23:54,520 Speaker 1: like the Big Three or BMW um going to change 420 00:23:54,560 --> 00:23:57,119 Speaker 1: the way they sourced these minerals in order to hold 421 00:23:57,160 --> 00:24:01,600 Speaker 1: onto that tax credit as a sales incentive next year. Well, 422 00:24:01,640 --> 00:24:04,600 Speaker 1: that's the hope in the long term. The auto industry 423 00:24:04,640 --> 00:24:06,879 Speaker 1: groups have said that they just need a little more 424 00:24:07,000 --> 00:24:08,880 Speaker 1: lead time too. There's there are a lot of car 425 00:24:08,920 --> 00:24:13,040 Speaker 1: companies have announced plans to open battery plants in the 426 00:24:13,119 --> 00:24:15,000 Speaker 1: US in the next year or two, but it takes 427 00:24:15,000 --> 00:24:16,639 Speaker 1: a while to get those type of plants online. So 428 00:24:16,680 --> 00:24:19,320 Speaker 1: they're saying that it's not feasible to say we're going 429 00:24:19,359 --> 00:24:21,360 Speaker 1: to have that done by January. But over the life 430 00:24:21,400 --> 00:24:23,720 Speaker 1: these tax credits will last for ten years. So the 431 00:24:23,760 --> 00:24:28,240 Speaker 1: hope is that as those plants come online more production 432 00:24:28,280 --> 00:24:31,639 Speaker 1: has moved to domestic sources or North American sources, that 433 00:24:31,720 --> 00:24:34,440 Speaker 1: cars that are not eligible next year will become eligible 434 00:24:35,080 --> 00:24:38,719 Speaker 1: in a year or two or three. Yep, I don't know. 435 00:24:38,840 --> 00:24:41,240 Speaker 1: I mean, well, listen, I want to get UM. I 436 00:24:41,240 --> 00:24:45,679 Speaker 1: want to get an X five right now, the hybrid version. 437 00:24:45,840 --> 00:24:48,760 Speaker 1: And I'm worried that if I put in the order today, 438 00:24:48,960 --> 00:24:51,040 Speaker 1: if they're not done by the end of two I 439 00:24:51,040 --> 00:24:53,760 Speaker 1: won't be able to get the tax credit. And that's big. Yeah, 440 00:24:53,760 --> 00:24:56,840 Speaker 1: that's two thousand in New York and you don't even 441 00:24:56,920 --> 00:24:59,440 Speaker 1: have your pickup truck yet. So just hold next year 442 00:24:59,480 --> 00:25:03,520 Speaker 1: a playing We appreciate a keip playing automotive regulations reporter. Yes, 443 00:25:03,560 --> 00:25:05,880 Speaker 1: we have an automotive regulations reporter. That's what's so cool 444 00:25:05,880 --> 00:25:12,359 Speaker 1: about Bloomberg News. Let's bring in now Sodic Waba. He 445 00:25:12,480 --> 00:25:17,480 Speaker 1: is founder UH and chairman of I Squared Capital and UM. 446 00:25:17,520 --> 00:25:22,280 Speaker 1: He used to basically run the infrastructure business at Morgan Stanley. 447 00:25:22,359 --> 00:25:26,200 Speaker 1: He's very UH connect well connected in Washington as well 448 00:25:26,240 --> 00:25:29,120 Speaker 1: as in Paris and London and many other cities. Where 449 00:25:29,119 --> 00:25:33,000 Speaker 1: are you well connected. Uh me, yeah, um, Grandville, Ohio. 450 00:25:33,119 --> 00:25:36,119 Speaker 1: There you go. I'm well connected in Grandville, Ohio. UM. 451 00:25:36,240 --> 00:25:39,280 Speaker 1: Sodek has an incredible resume, though, and so we go 452 00:25:39,359 --> 00:25:42,119 Speaker 1: to him, especially on stuff focused on infrastructure, but also 453 00:25:42,240 --> 00:25:46,000 Speaker 1: on UM uh Washington, d C. So thanks so much 454 00:25:46,000 --> 00:25:48,720 Speaker 1: for joining us. I want to first ask you about 455 00:25:48,800 --> 00:25:53,720 Speaker 1: this Inflation Reduction Act that the President signed um either 456 00:25:53,800 --> 00:25:56,159 Speaker 1: yesterday or the day before. I'm so confused by the 457 00:25:56,200 --> 00:25:59,920 Speaker 1: title because it seems to be more of a green CLIs. 458 00:26:00,000 --> 00:26:03,240 Speaker 1: I'm at spending bill, So what do we know about 459 00:26:03,280 --> 00:26:09,920 Speaker 1: what's in there? Well, M Latin Paul, thanks for having me. Uh. Look, 460 00:26:10,359 --> 00:26:13,240 Speaker 1: it's worth recapping just for a second, what has happened 461 00:26:13,240 --> 00:26:15,920 Speaker 1: in the last year, right, So, You've had an infrastructure 462 00:26:15,960 --> 00:26:18,680 Speaker 1: bill last year, or about one point two pillion to 463 00:26:18,840 --> 00:26:23,560 Speaker 1: upgrade our infrastructure, roads, bridges, etcetera. You've had a G 464 00:26:23,800 --> 00:26:26,720 Speaker 1: seven announced by the G seven countries to spend six 465 00:26:26,760 --> 00:26:30,760 Speaker 1: hundred billion dollars in infrastructure globally, of which the US 466 00:26:30,880 --> 00:26:33,359 Speaker 1: is going to invest two hundred billions. You have the 467 00:26:33,440 --> 00:26:36,679 Speaker 1: Chips and Science Acts which were signed last week, and 468 00:26:36,680 --> 00:26:38,639 Speaker 1: it was honored to be at the White House for 469 00:26:38,720 --> 00:26:41,560 Speaker 1: the signing. Ceremony. That's about two hundred eighty billion, which 470 00:26:41,600 --> 00:26:46,040 Speaker 1: should encourage tech enabled infra. And finally what you mentioned, 471 00:26:46,040 --> 00:26:48,400 Speaker 1: which is in Fish and Reduction Act, which is over 472 00:26:48,440 --> 00:26:51,480 Speaker 1: seven hundred billion and will invest in green energy among 473 00:26:51,560 --> 00:26:54,160 Speaker 1: other things. So really, at the end of the day, 474 00:26:54,200 --> 00:26:57,200 Speaker 1: you can honestly say that the president President has ushered 475 00:26:57,359 --> 00:27:01,200 Speaker 1: what I would call the infrastructure decade, actually be increased 476 00:27:01,200 --> 00:27:06,439 Speaker 1: American productivity, and yes, reduce inflation. What what are some 477 00:27:06,520 --> 00:27:10,640 Speaker 1: what are some of the key parts of the Inflation 478 00:27:10,720 --> 00:27:12,240 Speaker 1: Reduction Act in your perspective, What are some of the 479 00:27:12,280 --> 00:27:14,800 Speaker 1: most important ones that we should pay attention to that 480 00:27:14,840 --> 00:27:21,200 Speaker 1: we as investors, consumers, citizens, we may actually see and feel. Right, 481 00:27:21,240 --> 00:27:23,840 Speaker 1: So you asked about whether it helps in reduction in 482 00:27:24,359 --> 00:27:28,560 Speaker 1: reducing inflation, the answer is yes. It won't do it immediately. 483 00:27:28,640 --> 00:27:30,560 Speaker 1: You're not going to get inflation to two percent. That 484 00:27:30,760 --> 00:27:33,240 Speaker 1: was never the purpose of the act. But it will 485 00:27:33,280 --> 00:27:36,399 Speaker 1: reduce the deficit, and reduction of the deficit means you know, 486 00:27:36,480 --> 00:27:40,399 Speaker 1: a demand and that reduces inflation. It will help in 487 00:27:40,480 --> 00:27:44,760 Speaker 1: reducing the energy builds for household that has gone up 488 00:27:44,840 --> 00:27:48,199 Speaker 1: significantly over the last couple of years. So that is 489 00:27:48,240 --> 00:27:53,359 Speaker 1: going to immediately help households field, the reduction initiation and 490 00:27:53,480 --> 00:27:56,159 Speaker 1: cost of living. Um, you're going to have an increase 491 00:27:56,200 --> 00:27:59,000 Speaker 1: in efficiency in our energy system, so all of these 492 00:27:59,080 --> 00:28:04,560 Speaker 1: will help uh reduce inflation over the coming years. I 493 00:28:04,600 --> 00:28:06,399 Speaker 1: gotta I gotta wonder how you know, I got a 494 00:28:06,440 --> 00:28:10,720 Speaker 1: kind of bill for yeah, and my energy bills are 495 00:28:11,160 --> 00:28:14,560 Speaker 1: um every month over a thousand dollars. Does this mean 496 00:28:14,600 --> 00:28:17,359 Speaker 1: since it's past soduct that next month are going to 497 00:28:17,400 --> 00:28:23,000 Speaker 1: be five? Uh, maybe not the next month, but certainly 498 00:28:23,000 --> 00:28:25,320 Speaker 1: of over the coming months and years. It will reduce 499 00:28:25,359 --> 00:28:27,800 Speaker 1: your bill because what it will do it will give 500 00:28:28,480 --> 00:28:31,879 Speaker 1: credit to households to be able to upgrade and have 501 00:28:32,080 --> 00:28:36,840 Speaker 1: more efficient systems, better coding system better heating systems. You 502 00:28:36,880 --> 00:28:40,400 Speaker 1: can get credits of up to thousand dollars, so it 503 00:28:40,480 --> 00:28:44,440 Speaker 1: will significantly reduce your energy bills, no doubt about. It's 504 00:28:44,480 --> 00:28:48,120 Speaker 1: mostly targeted towards lower income hunciles. That's an important consideration 505 00:28:48,480 --> 00:28:50,920 Speaker 1: because they in the fact that it's the opered opinion 506 00:28:51,040 --> 00:28:53,560 Speaker 1: that Groom they all published, they tend to be much 507 00:28:53,600 --> 00:28:57,640 Speaker 1: more impacted from energy increases in the cost of energy 508 00:28:57,720 --> 00:29:01,040 Speaker 1: than others. All Right, So the chip sacked just going 509 00:29:01,080 --> 00:29:04,160 Speaker 1: back to a previous bill, That seems pretty material for 510 00:29:04,200 --> 00:29:06,000 Speaker 1: me because I remember the beginning of the pandemic when 511 00:29:06,040 --> 00:29:09,280 Speaker 1: we said, oh boy, we're not getting our chips from 512 00:29:09,320 --> 00:29:11,880 Speaker 1: from China and Taiwan because they're all shut down. We 513 00:29:11,960 --> 00:29:15,400 Speaker 1: need to ensure more of this stuff. Give us your 514 00:29:15,440 --> 00:29:17,880 Speaker 1: perspective of the Chips Act and maybe how it may 515 00:29:18,000 --> 00:29:21,160 Speaker 1: ensure some more stability that part of the supply chain. 516 00:29:24,640 --> 00:29:28,400 Speaker 1: We realized in the the COVID and during the pandemic, 517 00:29:28,600 --> 00:29:33,160 Speaker 1: but in fact we were overly relying on international supplies 518 00:29:33,200 --> 00:29:36,880 Speaker 1: for very basic elements like the chips. So what the 519 00:29:36,960 --> 00:29:39,640 Speaker 1: Chips Act is doing two things. Number one, insure that 520 00:29:39,760 --> 00:29:42,360 Speaker 1: we're able to unshowd the manufacturing the chips in the 521 00:29:42,440 --> 00:29:46,240 Speaker 1: United States. And the second thing is to retake the 522 00:29:46,320 --> 00:29:50,040 Speaker 1: lead if you want, in science and innovation that will 523 00:29:50,080 --> 00:29:52,960 Speaker 1: allow us then to be able to protect our own 524 00:29:52,960 --> 00:29:56,480 Speaker 1: technology and grow it and take an edge over let's say, 525 00:29:56,480 --> 00:29:59,880 Speaker 1: other countries. So these two elements are absolutely critical. So 526 00:30:00,000 --> 00:30:04,560 Speaker 1: a good going to have massive investments food universities through 527 00:30:04,640 --> 00:30:08,880 Speaker 1: research centers in those technologies that will ultimately be able 528 00:30:08,960 --> 00:30:14,520 Speaker 1: then to allow uge to manufacturer. Alright, so that great stuff. 529 00:30:14,640 --> 00:30:17,600 Speaker 1: Really appreciate getting your informed perspective on a number of 530 00:30:17,640 --> 00:30:22,080 Speaker 1: these pieces of legislation that the President has signed into law, 531 00:30:22,480 --> 00:30:25,360 Speaker 1: and we'll see how that impacts the economy is going forward. Sadekwabba, 532 00:30:25,720 --> 00:30:30,000 Speaker 1: founder chairman and managing partner of I Squared Capital, with 533 00:30:30,120 --> 00:30:34,280 Speaker 1: a long background in infrastructure, UH and economics as well, 534 00:30:34,320 --> 00:30:38,840 Speaker 1: appreciate getting his perspective. Thanks for listening to the Bloomberg 535 00:30:38,960 --> 00:30:42,360 Speaker 1: Markets podcast. You can subscribe and listen to interviews with 536 00:30:42,400 --> 00:30:47,200 Speaker 1: Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. 537 00:30:47,480 --> 00:30:51,719 Speaker 1: I'm on Twitter at Matt Miller three. Pet Ball Sweeney 538 00:30:51,720 --> 00:30:54,360 Speaker 1: I'm on Twitter at pt Sweeney. Before the podcast, you 539 00:30:54,400 --> 00:30:56,760 Speaker 1: can always catch us worldwide at Bloomberg Radio