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Speaker 4: Fascinating one.
Speaker 3: If you sit at waked, I'm.
Speaker 5: Going when to Miami.
Speaker 3: Welcome to my body, and I don't if he stood
Speaker 3: a break it down, Welcome to.
Speaker 4: Me to Miami.
Speaker 6: That is uh, what Ken Griffin is like is likely
Speaker 6: to say to everyone out there. Ken Griffin, of course,
Speaker 6: a hedge fund billionaire. He was speaking with Arshenali Bask
Speaker 6: at the Citadel Securities Global Macro Conference in Miami.
Speaker 4: Take a listen to what he said.
Speaker 7: New York is the financial capital of America today and
Speaker 7: it's New York's to lose. Having said that, Miami I
Speaker 7: think represents the future of America.
Speaker 6: So he's referring to Wall Street, South Bailey, the idea
Speaker 6: that South Florida's the up and coming financial center. Uh,
Speaker 6: they've been promoting this idea for years. It's definitely gained
Speaker 6: some traction since the pandemic.
Speaker 5: Yeah, we saw a lot of people wanting more tax
Speaker 5: friendly states. Obviously, it's easy to talk your book when
Speaker 5: you're someone who's made the move down there. So it
Speaker 5: does out and interesting that he said it's where the
Speaker 5: future is and they're trying to court more and more.
Speaker 5: I know a number of traders that did move down
Speaker 5: and so far I haven't complained, but I tell them often.
Speaker 8: Let's talk more in August.
Speaker 6: All right, Well, let's bring in Jonathan Levin. He is
Speaker 6: a market's columnist for Bloomberg Opinion. He is based in
Speaker 6: Miami and Jonathan you've lived in Miami for a while,
Speaker 6: have you talked to the finance guys who've made their
Speaker 6: way down.
Speaker 4: What are they saying?
Speaker 9: Yeah?
Speaker 10: Absolutely? I mean, look, first, starters, if you're coming from
Speaker 10: New York City, you get here and you immediately say, hey,
Speaker 10: this is a pretty good deal.
Speaker 5: Right.
Speaker 10: I don't have to deal with Northeast winters for starters,
Speaker 10: I'm not paying a state income tax. And while Miami
Speaker 10: has gotten to be a pretty pricey place, especially recently,
Speaker 10: it's still less expensive, let's face it, than you know,
Speaker 10: trying to live in Manhattan or even San Francisco. Right,
Speaker 10: So you get here and you get this sense of
Speaker 10: like euphoria for the first of months, maybe even the
Speaker 10: first few years that people get here.
Speaker 5: Yeah, and I'm more interested in kind of what those
Speaker 5: steps look like though, for it to look more like
Speaker 5: in New York and actually be this future hub that
Speaker 5: Ken Griffin and many others enjoy talking about.
Speaker 11: Sure.
Speaker 10: Absolutely. So put in my column today is that, you know,
Speaker 10: Miami really needs to develop into a more mature place
Speaker 10: if it is going to really compete with these major
Speaker 10: financial centers. Right, So, for starters, we are a car town.
Speaker 10: You can't get anywhere without a car. In South Florida,
Speaker 10: we do not really have a viable public transit system.
Speaker 10: It's nothing like New York in that regard. Right, So,
Speaker 10: you know, forty years ago they put up this metro rail.
Speaker 10: It basically only works for like three or four percent
Speaker 10: of the population. It's just not a very comprehensive public
Speaker 10: transit system. And so, you know, one of my big
Speaker 10: recommendations in my column today is if you really want
Speaker 10: to compete and have a future as Wall Streets South,
Speaker 10: you have to do something about that. You have to
Speaker 10: do something about this traffic that is just getting worse
Speaker 10: and worse. And you know, it's a huge undertaking to say,
Speaker 10: you know, let's go out there and build this massive
Speaker 10: new rail system. I don't think that that's practical. I
Speaker 10: don't think that that's going to happen. But as development
Speaker 10: officials look at the future, they have to be looking
Speaker 10: at creating more walkable neighborhoods going forward, and maybe even
Speaker 10: you know, doing something with Miami's water you know, where
Speaker 10: are the furry is, where are the water taxis? Anything
Speaker 10: to get people out of those cars.
Speaker 6: I love that idea, and that would make it really
Speaker 6: picturesque and just give it a new character. Speaking of water, Jonathan,
Speaker 6: the area is highly prone to flooding, and of course
Speaker 6: it's in a hurricane zone as well. So climate resiliency
Speaker 6: is obviously a really big issue. You from what you've
Speaker 6: seen as South Florida's local governments doing enough what words
Speaker 6: should they be doing?
Speaker 10: Yeah, it's huge. I mean, if you talk about really
Speaker 10: bringing in serious, serious businesses like another Citadel, you have
Speaker 10: to give them the confidence that you know, if they're
Speaker 10: investing for the future, their their investments are going to
Speaker 10: pay off over decades and nobody wants to think about
Speaker 10: the possibility that the lobby of their beautiful new building
Speaker 10: is going to be flooding on a regular basis.
Speaker 12: Right.
Speaker 10: So, I've seen some of these governments making the right overtures.
Speaker 10: You know, City of Miami did a big climate resiliency
Speaker 10: bond some time ago. They're making sort of investments and
Speaker 10: pumps and these sorts of things. The point I make
Speaker 10: is you've just got to do more and more of it.
Speaker 10: Investing for the long term is really about elevate, elevate,
Speaker 10: elevate with that infrastructure, and on the private side also
Speaker 10: got to be out there and putting in the most
Speaker 10: rigorous codes possible, so that private businesses and private homes
Speaker 10: are essentially turning themselves into bunkers for the future climate
Speaker 10: challenges that sort of inevitably this region is going to face.
Speaker 5: And one of the things I'm reminded of a story
Speaker 5: back in September about the cost to ensure homes is
Speaker 5: that something Jonathan that comes up and is being considered
Speaker 5: just given the cost of living can be cheaper in
Speaker 5: some regards, but if you're spending much higher premium to
Speaker 5: ensure your house or your car, does that balance out?
Speaker 10: Yeah, I think that's absolutely a huge, a huge point.
Speaker 10: I mean, look, the past few years have been especially
Speaker 10: especially bad for the property insurance segment here in South Florida,
Speaker 10: and I think it's a confluence of factors. It is
Speaker 10: absolutely partially about the climate challenges that this region is facing.
Speaker 10: On top of that, we have a runaway litigation issue
Speaker 10: in the state of Florida. There have been some reforms
Speaker 10: that have tried to tackle that, and you know, let's
Speaker 10: face it, I think that the dynamics in fixed income
Speaker 10: markets have also played into the price the price hikes
Speaker 10: that we've seen trickle down to property insurance rates. So
Speaker 10: The bottom line is property insurance inflation has been through
Speaker 10: the roof here in the state of Florida, and it
Speaker 10: absolutely it makes it harder both for those Wall Street
Speaker 10: South migrants, but it makes it harder to for workers
Speaker 10: who are sort of Wall Street South adjacent. Right, So
Speaker 10: if I if I could just pivot to sort of
Speaker 10: what the third pillar of where Florida needs to see
Speaker 10: improvement to keep its momentum going, it's really education and
Speaker 10: that all comes down to drawing the best teachers to
Speaker 10: the region. Whether it's for private schools or public schools.
Speaker 10: You need to bring in more and more teachers. We
Speaker 10: don't have great student teacher ratios here and you're not
Speaker 10: going to bring in more great teachers if people can't
Speaker 10: afford to live here because there is both housing inflation
Speaker 10: and insurance inflation. And by the way, as I started with,
Speaker 10: not great public transit options for those people who choose
Speaker 10: to live out in those suburbs and excerbs, so very
Speaker 10: difficult cocktail of factors here.
Speaker 4: Absolutely.
Speaker 6: I mean, if you want to keep the talent, you
Speaker 6: have to make it easy for the talent to bring
Speaker 6: over their entire families to uproot them from the Northeast,
Speaker 6: where there's no shortage of high priced private schools that
Speaker 6: have a short list of getting into the Harvards and
Speaker 6: the Yales. You had something really interesting in your column
Speaker 6: that looked at the private schools and how many of
Speaker 6: them have good SAT scores in the Miami area versus
Speaker 6: New York, and the contrast is stunning.
Speaker 10: Yeah. Absolutely, I mean I think the story is, you know,
Speaker 10: I live down here. I try to defend the area,
Speaker 10: and I think there are a lot of very good
Speaker 10: private and public schools down here. But the truth of
Speaker 10: the matter is there aren't a ton of great schools.
Speaker 10: And the way you know, we measured great high schools
Speaker 10: with the help of this consulting firm, Webster Pacific, is like,
Speaker 10: how many of them produce average SAT scores above fourteen hundred.
Speaker 10: The answer very quickly is two. Right, So you can
Speaker 10: imagine if you have a big flood of folks coming
Speaker 10: in and they're managing directors, they're top folks at hedge funds,
Speaker 10: they all want to get their kids into these two schools.
Speaker 10: And those two schools, you know, Pine Crest and Ransom
Speaker 10: Efvert Blades, for what it's worth, they can only expand,
Speaker 10: so fast. You know, you understand where they're coming from.
Speaker 10: They don't want to expand so fast that they risk
Speaker 10: their reputation, that they risk the quality of the education.
Speaker 10: And also expanding means acquiring more real estate. We've talked
Speaker 10: about why and how that's difficult in a place like this,
Speaker 10: so again, just you know, very challenging. If you're up
Speaker 10: in Manhattan, you feel like you have dozens of options,
Speaker 10: or at least a couple dozen of very very elite
Speaker 10: private schools. Here, the options are few and far between,
Speaker 10: and by the way, one of them is probably as
Speaker 10: much as an hour or more from downtown Miami. So
Speaker 10: you know, good luck with that commune exactly.
Speaker 6: Jonathan Llvin, thank you so much for joining us. Johnathan
Speaker 6: Ullivan is a Bloomberg opinion columnist joining us from Miami
Speaker 6: and Baillie. We were talking earlier about how we may
Speaker 6: not necessarily be Florida fans, but these are issues that
Speaker 6: folks of the finance industry think about constantly. Education, transportation,
Speaker 6: and ease of transit especially.
Speaker 5: Yeah, I'm not an IVY League grad, but I do
Speaker 5: know that IVY League grads prefer to get their kids
Speaker 5: set up to go to an IVY League, and as
Speaker 5: Jonathan mentioned, that's one of those key factors for drawing
Speaker 5: the true elites down there.
Speaker 6: All right, Well, South Florida still has its boosters, and
Speaker 6: of course there is plenty of money moving down there,
Speaker 6: just it continues to be a challenge for those who
Speaker 6: are considering making the move.
Speaker 3: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 3: live weekday afternoons from three to six Eastern Listen on
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Speaker 3: or watch us live on YouTube.
Speaker 4: Dally, did you know that we had APEC this week?
Speaker 5: I think I heard that I did see Janet Yellen
Speaker 5: at an in and out according to Twitter.
Speaker 8: I'm or X. I guess I'm really interested what her
Speaker 8: order was?
Speaker 4: Someone posted this on x Someone.
Speaker 8: Posted a photo of Janet Yellen ordering in and out.
Speaker 6: Actually, that's really good. I gotta go find that one.
Speaker 6: We want to bring in someone who knows quite a
Speaker 6: bit about APEC, and of course is a longtime China watcher.
Speaker 6: He is Andy Brown, a partner at Brunswick Group. He
Speaker 6: heads up Brunswick's China Hub, which means he works closely
Speaker 6: with his colleagues in China and globally to lead up
Speaker 6: the firm's geopolitical practice to advise clients on China related issues.
Speaker 4: And he's going to help us.
Speaker 6: Recap what happened at APEC because Andy, you had the
Speaker 6: long anticipated, high stakes summit meeting between President Biden and
Speaker 6: President Chijinping, and it did yield some big wins. Right,
Speaker 6: there's going to be military to military communications, there's going
Speaker 6: to be pandas right exactly.
Speaker 13: Some people have called APEX a meeting that occurred on
Speaker 13: the sidelines of the summit, and I think there's quite
Speaker 13: a bit of truth to that. Yeah, Look, it was
Speaker 13: a successful meeting as far as I can tell. It
Speaker 13: was successful because it happened.
Speaker 4: Yeah, and they agreed to talk.
Speaker 13: They agreed to talk. It was successful against a very
Speaker 13: low base of expectation. It was successful because nothing terrible happened,
Speaker 13: if you don't count Joe Biden yet again calling Si
Speaker 13: Jinping a dictator, yeah, and Anthony blinking looking terribly pained
Speaker 13: at the reference. But look, I think it was successful
Speaker 13: because it just seems so normal. You know, you had
Speaker 13: two leaders and they sat down and they across a table,
Speaker 13: and they were flanked by their aids, and they had
Speaker 13: a substantial conversation and a nice walk in the garden,
Speaker 13: and Si Jinping met a bunch of CEOs and as normal,
Speaker 13: they sort of sucked up to him and getting a
Speaker 13: round of a standing ovation and Sijmpin cracked a smile,
Speaker 13: actually a big grin when Gavin Newsom handed him a
Speaker 13: Golden State Warriors. Well, that's no, that's not normal. That's
Speaker 13: that's not normal. That's beyond that's beyond normal. And and look,
Speaker 13: you know you've got to you've got to measure that
Speaker 13: against the beginning of this year, when and when it
Speaker 13: was anything but normal, when it was extremely abnormal.
Speaker 5: Uh.
Speaker 13: And in fact, earlier this year people were talking about war.
Speaker 5: Well, we see we have two wars going on and
Speaker 5: the uncertainty around that. But I'm wondering what the messaging
Speaker 5: from this summit could mean for investors wanting to get
Speaker 5: back into China, because we saw Ali Baba pulling back
Speaker 5: their plan to separate their cloud unit because of the
Speaker 5: restrictions from the US shipping AI or chips to China.
Speaker 13: Yeah, I don't actually think that that that was the
Speaker 13: point of the meeting was to get anything substantial. Frankly,
Speaker 13: on anything. The point of this meeting was just to
Speaker 13: get these two sides together again, and there has been
Speaker 13: a dangerous absence of dialogue even as military tensions build,
Speaker 13: even as you have war in Ukraine, you have war
Speaker 13: in Gaza, and you have all kinds of tripwise flash
Speaker 13: points around Asia, Chinese Filipino ships standing off in the
Speaker 13: South China Sea. It's important that these two leaders get together.
Speaker 13: And frankly, I thought one of the more important agreements
Speaker 13: we had an agreement for military military to resume military
Speaker 13: military exchanges. We had an agreement on fentanyl. I thought
Speaker 13: maybe one of the most important was agreement to get
Speaker 13: more flights going before between the United States and China.
Speaker 13: You've got to remember, in all the sort of myriad
Speaker 13: ways that Chinese and Americans have met over the years,
Speaker 13: whether that's in conference rooms or in sports stadiums or
Speaker 13: hotels or airplanes, all of that, all of that has
Speaker 13: been frozen and in a world that is becoming incredibly tense.
Speaker 6: So things really took a turn for the worse when
Speaker 6: former House Speaker Nancy Pelosi made a trip to Thai
Speaker 6: One basically sticking a finger in Beijing's eye. Have all
Speaker 6: the different measures that have been piled on been rolled
Speaker 6: back following.
Speaker 13: That, no well talking so so, first of all, in
Speaker 13: the aftermath of that was the August August visit, and
Speaker 13: then you had China firing ballistic missiles over Taiwans halted
Speaker 13: all negotiations, all talks about about anything. We haven't wound back.
Speaker 13: I mean, we're not going back to where we were before.
Speaker 13: The US position is, basically, this is a fundamentally competitive relationship,
Speaker 13: but we've got to make it work, frenemies. We got
Speaker 13: to make it work because we've got a big trade relationship,
Speaker 13: investment relationship, and we've got a lot of people to
Speaker 13: people contact, and we have a lot of problems in
Speaker 13: the world that needs solving, not least climate change, pandemics, narcotics,
Speaker 13: trafficking and so on. That's the That's the US position,
Speaker 13: and it seems to me to be a pretty sensible
Speaker 13: one that acknowledges the tensions and the relationship, that says
Speaker 13: we've got to manage them somehow.
Speaker 5: We're talking Andy Brown, partner at Brunswick Group, former editorial
Speaker 5: director of the Bloomberg New Economic Forum.
Speaker 8: So glad to have you back in studio.
Speaker 5: But Andy, one thing that's come up on a couple
Speaker 5: of conversations I've had, is that they view some investors
Speaker 5: view the current geopolitical landscape as the most uncertain since
Speaker 5: the aftermath of two thousand and one, eris aftermath of
Speaker 5: nine to eleven, Given everything going on in Gaza, in Ukraine,
Speaker 5: uncertainty around China and Taiwan. What do you make of
Speaker 5: that potential argument? And did this summit have any impact
Speaker 5: on your view?
Speaker 13: Well, to the extent that geopolitics drives business today, and
Speaker 13: it really does. The fact that you've had this sort
Speaker 13: of time out, the fact that you have two presidents
Speaker 13: who are now tolking has at least cleared some of
Speaker 13: the uncertainty. So earlier this year, ceo as were worried
Speaker 13: about worst caseos. Right, So you had boardrooms looking at
Speaker 13: trying to weigh the probability of a Chinese invasion of Taiwan.
Speaker 13: You know, you had senior Pentagon figures coming out to say, yep,
Speaker 13: you know we can see inside Tajen things. Mind he's
Speaker 13: going to go in Before twenty twenty seven. You had
Speaker 13: the head of the Navy saying it could be twenty
Speaker 13: twenty four. In fact, it could be any time at all,
Speaker 13: and so this has been this has been a big
Speaker 13: deterrent to long term investment in China, the geopolitics of Taiwan,
Speaker 13: the geopolitics of the South China Sea, on top of
Speaker 13: a lot of very hostile regulation in China around data,
Speaker 13: around national security, anti espionage. You had Chinese police raids
Speaker 13: on the Mints group, on Bain and so on and
Speaker 13: all together you wrap it all up, and CEOs have
Speaker 13: been concerned frankly about their personal safety in China, issues
Speaker 13: about whether they should go or not, and if they go,
Speaker 13: should they wipe their laptop? Yes, we'll leave them at home.
Speaker 6: Even better, I got to ask you, since you bring
Speaker 6: up Taiwan and how big of an issue it is.
Speaker 6: The opposition parties in Taiwan have agreed to join forces
Speaker 6: ahead of the critical presidential election next year. That increases
Speaker 6: the odds slightly that you might get a more pro
Speaker 6: China government in Taiwan elected next year. What does that
Speaker 6: do to any kind of timeline that people are putting
Speaker 6: out there about a possible Chinese attempt to unify with Taiwan.
Speaker 13: Right, so, these timelines were all extremely speculative to start with.
Speaker 13: I mean, really, the only date we have is that
Speaker 13: cjmping has told the People's Liberation Army it should be
Speaker 13: ready by twenty twenty seven. So actually I think this
Speaker 13: is a big deal. It wasn't so long ago that
Speaker 13: William Laie of the ruling Democratic Progressive Party was a
Speaker 13: shoe in, all right, and he has a history of
Speaker 13: fairly strong support for a provide and its position. And
Speaker 13: now you have the opposition agreeing to unite behind a
Speaker 13: single ticket and they will have a series of internal
Speaker 13: external polls to see who that should be, all broken
Speaker 13: by former President maying two and China would Now I
Speaker 13: don't know whether that how to what extent that change
Speaker 13: of the game, but it certainly does make the likelihood
Speaker 13: of a William Lyve presidency.
Speaker 6: So much less and that would be good news for
Speaker 6: anyone looking for come in the South China. See Andy Brown,
Speaker 6: really appreciate your joining us. Andy Brown as partner with
Speaker 6: the Brunswick Group, former editorial director of the Bloomberg New
Speaker 6: Economy Forum.
Speaker 4: This is Bloomberg.
Speaker 3: You're listening to the Bloomberg Business Week Podcast. Catch us
Speaker 3: live weekday afternoons from three to six Easter on Bloomberg Radio,
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Speaker 3: Just say Alexa play Bloomberg eleven thirty.
Speaker 12: Billy.
Speaker 6: You and I were talking earlier about Joe Biden and she,
Speaker 6: Jim Hingk's meeting and St.
Speaker 4: Francisco.
Speaker 6: For all that it accomplished or didn't accomplish, there was
Speaker 6: one small victory, which is the likely return of panda.
Speaker 4: Bears to US zoo's.
Speaker 6: Earlier this month, the three panda bears at Washington, DC's
Speaker 6: National Zoo were returned to China following the expiration of
Speaker 6: a three year contract with the China's Wildlife Agency. So
Speaker 6: we want to bring in now Elena Songster. She is
Speaker 6: a professor at Saint Mary's College of California. She is
Speaker 6: author of Panda Nation, which is a book about China's
Speaker 6: panda policy. Elena, good to speak with you. I am
Speaker 6: obsessed with panda bears because they're like giant children, but
Speaker 6: also because Beijing has long used these creatures as a
Speaker 6: way to curry favor, reward friends, and punish their enemies.
Speaker 6: What can you tell us about the significance of pandas
Speaker 6: to China?
Speaker 14: So pandas are unique to China. They cannot be found
Speaker 14: anywhere else. And one thing that I find particularly interesting
Speaker 14: that I discovered in my research about pandas is that
Speaker 14: they are not connected with any of the more ancient
Speaker 14: kind of historical cultural symbolism, and so they're really only
Speaker 14: become significant culturally for China in the twentieth century.
Speaker 5: Yeah, I'm really interested in who pays for these flights
Speaker 5: because they just sent back the pandas and now they're returning.
Speaker 5: Is that something that the Chinese government is funding? Are
Speaker 5: American taxpayers funding that that?
Speaker 14: Actually, I do not know. That's a good question. It
Speaker 14: must be wrapped into the exchange agreement in some way.
Speaker 4: Yeah, these exchange agreements.
Speaker 6: It's interesting because when there are pandas from China coming
Speaker 6: to the US, they're not gifted to the US. They're
Speaker 6: on loan, and the US actually has to pay for
Speaker 6: these pandas, right correct. According to a survey by nique
Speaker 6: Asia Bailey, zoos typically pay a million dollars a year
Speaker 6: for a pair of panda pairs.
Speaker 15: Now, my question is, when the pandas come from China
Speaker 15: and they pro create in a US zoo, is the
Speaker 15: baby panda US citizen a check?
Speaker 14: Though no, baby panda belongs to China. That's part of
Speaker 14: the agreement that and not only does the baby panda
Speaker 14: belong to China, but the US zus pay an additional
Speaker 14: fee when they have a privilege of having a baby panda.
Speaker 5: Wow, so it cost you money to have a baby panda, Yes, but.
Speaker 14: You also make a lot of money when you have
Speaker 14: a baby panda.
Speaker 8: The pros and cons.
Speaker 5: So if pandas, if and wind pandas come back, what
Speaker 5: does that rollout look like? Is it all at once?
Speaker 5: They just kind of deploy a bunch of planes with
Speaker 5: pandas eating and sleeping across the Atlantic?
Speaker 14: Probably highly unlikely. I don't know, but I suspect that
Speaker 14: it will be another pair of pandas that will be
Speaker 14: of madeable age. That would it sounds like go to
Speaker 14: the San Diego Zoo based on what Chi Jinping said
Speaker 14: this past week.
Speaker 6: Yeah, which makes me wonder why did they let the
Speaker 6: contract lapse and send back the national zoo pandas? Is
Speaker 6: it because they're setting up for Xi Jinping to announce
Speaker 6: that they would resume the pandalons. Can you talk a
Speaker 6: little bit about how China has used pandas as a
Speaker 6: form of soft power.
Speaker 14: Yeah. Sure.
Speaker 12: So the.
Speaker 14: Most kind of monumental example of this, of course, is
Speaker 14: the nineteen seventy two gift to the United States that
Speaker 14: was offered during Richard Nixon's President Nixon's visit to China,
Speaker 14: which was monumental on many fronts, but mainly because the
Speaker 14: US and China were enemy states at the time, and
Speaker 14: so this was really a top secret visit and when
Speaker 14: it happened, it was a shock to a lot of
Speaker 14: people around the globe, and it really was an expression
Speaker 14: of this very high profile expression of warming relations between
Speaker 14: these two countries. And then it came with this, because
Speaker 14: it came with this gift of pandas to the United States,
Speaker 14: that suddenly kind of imbued the pandas with all of
Speaker 14: this kind of intense symbolic meaning. And that was then
Speaker 14: repeated almost immediately when Japan normalized relations with China just
Speaker 14: months later, and then subsequently to several other countries. And
Speaker 14: so the first stage of panda diplomacy were these kind
Speaker 14: of high profile gifts. But then that shifted to loans,
Speaker 14: in part because China was worried about giving away its
Speaker 14: pandas without a clear understanding of how many it had
Speaker 14: and how sustainable that process, and that process was and
Speaker 14: so they switched to short term loans. But these weren't
Speaker 14: very well structured. They weren't good for the individual pandas,
Speaker 14: their money wasn't necessarily going through the conservation of the
Speaker 14: wild population, and so it came under heavy criticism and
Speaker 14: pressure came from animal experts that this had to stop,
Speaker 14: and so they brought that to a close in the
Speaker 14: early nineteen nineties in the United States, though it continued
Speaker 14: in other places until the early two thousands, and a
Speaker 14: group of experts, along with Chinese scientists and officials, came
Speaker 14: together and created this long term scientific loan for which
Speaker 14: San Diego was the first model, and that started in
Speaker 14: nineteen ninety six and as of two thousand seven, I
Speaker 14: believe all of the subsequent loans around the world are
Speaker 14: based on this model.
Speaker 5: And we know about the Taylor Swift economy. Is there
Speaker 5: a panda economy if and when they returned to San Diego, Like,
Speaker 5: how much revenue are we talking? This potentially could drive?
Speaker 8: Yeah.
Speaker 14: So, I mean, this is one of the reasons the
Speaker 14: pandas are so expensive to have for an institution. One
Speaker 14: of the reasons that the fee is a million dollars
Speaker 14: a year usually is because prior to that, during the
Speaker 14: short term loan phase, which occurred from eighty four to
Speaker 14: ninety two, the the institutions that were hosting the hosting
Speaker 14: these pandas they were making all kinds of money, like
Speaker 14: millions of dollars a year, and or just within months actually,
Speaker 14: because they only had them for a few months, and
Speaker 14: so they were seen as like profiting off of these
Speaker 14: precious species, and so that was a violation of sites
Speaker 14: the ITES, which is the Convention on International Trade and
Speaker 14: Endangered Species.
Speaker 15: Hey, real quick before you go, Ilina, if Bailey were
Speaker 15: to climb the fence at the zoo and jump in
Speaker 15: the cage with the pandas, would they tear his face off?
Speaker 15: I mean, they're cute, but I don't know anything about
Speaker 15: Are they violent or like cuddly little bears like we
Speaker 15: all think they are? Yes, guess what they face off
Speaker 15: because I'd like to see that.
Speaker 14: So there have been actual instances of the situation you
Speaker 14: just described. An individual jumped into an enclosure in China
Speaker 14: and tried to hug a panda bear and that person
Speaker 14: was mauled and ended up in the hospital. So that's
Speaker 14: a really bad idea and highly not recommended.
Speaker 15: Don't do that.
Speaker 5: Well, that's why I like red pandas because they're not
Speaker 5: related to Yeah yeah.
Speaker 14: On the flip side, they're not aggressive in the same
Speaker 14: order as say, Grizzly or polar Bear.
Speaker 15: Okay, all right, we'll leave it there. So there. Yeah,
Speaker 15: the free question.
Speaker 6: John Tucker was waiting, dying to ask that question. Really
Speaker 6: appreciate your joining us. Alena Songster, the author of pand Nation,
Speaker 6: also Associate professor of History at Saint Mary's College of California.
Speaker 3: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 3: Just say Alexa play Bloomberg eleven.
Speaker 6: We did get some data this morning. New US home
Speaker 6: construction unexpectedly rose in October. That is a sign that
Speaker 6: builders continue to benefit from a limited supply in the
Speaker 6: resale market. I want to bring in Kate Kaminski. She
Speaker 6: is the chief operating officer of Walton Global, which is
Speaker 6: a privately owned land asset and real estate investment company
Speaker 6: with about three point six billion dollars in assets. Kate
Speaker 6: joins us by Zoom from Scottsdale, Arizona.
Speaker 4: Kate, good to speak with you.
Speaker 6: Can you give us a sense of what the housing
Speaker 6: market in Scottsdale, Arizona, part of the Sun Belt looks
Speaker 6: like versus the rest of the country.
Speaker 9: Thanks for having me. I was hoping we were going
Speaker 9: to talk about pandas today.
Speaker 4: Wait, are you a fan of better black and white pandas?
Speaker 9: I like the black and white ones too, but housing,
Speaker 9: how about those numbers today? Really excited to see the result.
Speaker 9: And I have to say that that is really consistent
Speaker 9: with what I was hearing last week. Was that a
Speaker 9: prominent real estate conference in New York City. We had
Speaker 9: everyone from the investment side of the business, to home
Speaker 9: building to supply chain all there and sentiment in the
Speaker 9: room was high, so much higher than the same conference
Speaker 9: just a year ago. And I think that that's really
Speaker 9: representative of what we're seeing in these numbers that came
Speaker 9: out today with over thirteen percent increases in starts and permits.
Speaker 8: Keith, what is driving the optimism?
Speaker 5: Is it just the pent up demand for houses in
Speaker 5: the fact that there's not a ton of supply of
Speaker 5: non new or existing homes.
Speaker 9: Yeah, I mean, it's definitely a factor of that lock
Speaker 9: in effect that we're.
Speaker 12: Seeing with the existing home sales.
Speaker 9: You know, builders are really benefiting from rates being where
Speaker 9: they're at and people that are locked in, you know,
Speaker 9: under five four percent not having a desire to sell
Speaker 9: at this point because of what the cost of moving
Speaker 9: into a new home would be. So builders are experiencing
Speaker 9: market share that is totally out of.
Speaker 12: The norm and really benefiting from that.
Speaker 6: Yeah, there's some data from a consulting firm called Zanda
Speaker 6: that indicates new homes now account for a third of
Speaker 6: available inventory versus the typical ten percent. Is this a
Speaker 6: new Is this now the new normal to have new
Speaker 6: homes account for a third of available inventory or is
Speaker 6: this temporary?
Speaker 9: I think that this is going to be here to
Speaker 9: stay for a little while because people are going to
Speaker 9: benefit from those rates that they're locked into for a while. So,
Speaker 9: you know, there is a fundamental need for new housing supply,
Speaker 9: and the builders are are the ones who are going
Speaker 9: to be able to provide that as we see, you know,
Speaker 9: these historically low levels of resale inventory. I think that
Speaker 9: the builders are also going to continue to command market
Speaker 9: share because of what they're doing with their rate buydown programs.
Speaker 9: They're getting people into homes at what continues to be
Speaker 9: kind of the level that consumers seem comfortable with, which
Speaker 9: is around that five percent. So we're seeing builders across
Speaker 9: the board really pushing these programs of buying down the
Speaker 9: mortgage rates, which are sitting at what seven point three
Speaker 9: percent today down to five and a half just below that,
Speaker 9: which is where you're seeing a lot of consumers comfortable.
Speaker 5: And looking at what the rates environment is showing right now.
Speaker 5: Baking in three fed cuts for next year. What happens
Speaker 5: with the home construction new home construction market in twenty
Speaker 5: twenty four, if in fact we do see rates continue
Speaker 5: to come.
Speaker 9: Down, Yeah, I think it's going to continue to escalate.
Speaker 9: I mean, all of the home builder stocks are up
Speaker 9: and they're definitely looking to increase community count Walton. You know,
Speaker 9: we're really focused on an earlier stage in the cycle
Speaker 9: as compared to the development or building side. We're buying
Speaker 9: land to feed to these builders that's really in the
Speaker 9: path of growth, and we're seeing an acceleration in the
Speaker 9: deals that we're putting under contract because these builders are
Speaker 9: really looking to secure that supply because they continue to
Speaker 9: see the demands. So we're seeing builders continue to build
Speaker 9: on spec because they're seeing that turnover in their inventory,
Speaker 9: and we're expecting that that community count's going to continue
Speaker 9: to increase and that demand is not going to decline
Speaker 9: in the near term.
Speaker 5: I look around in Jersey and I don't see any
Speaker 5: undeveloped plan Where are you guys putting money to work
Speaker 5: to and buying to sell to these homebuilders.
Speaker 9: But we're really focused in the southern half of the US.
Speaker 9: We focus on your typical, you know, market fundamentals such
Speaker 9: as jobs, people, so migration into a market, and we're
Speaker 9: looking to continue to expand where the builders are taking us,
Speaker 9: and that is we're really seeing in that Sun Belt
Speaker 9: region and particular states that continue to defile lodds like
Speaker 9: Texas and Florida with staggering new home starts within those markets.
Speaker 6: We were talking about a story that was very well
Speaker 6: read on the Bloomberg today about how almost forty percent
Speaker 6: of US homeowners are mortgage free and the majority of
Speaker 6: these homeowners are retirement age and a lot of them
Speaker 6: are basically cashing in on their homes in the Northeast
Speaker 6: and then selling those and going to buy homes in
Speaker 6: the sun Belt.
Speaker 4: How does that distort this current housing market?
Speaker 9: So, you know, I think that from a new home
Speaker 9: building perspective, we're still seeing that, you know, help the
Speaker 9: demand side because we're seeing a lot of active adult
Speaker 9: communities pop up within the states that I just mentioned.
Speaker 12: That continues to be a.
Speaker 9: Product that you know, we're they're really driving within each
Speaker 9: of those markets. And and so I think even though you're
Speaker 9: going to maybe see some resale inventory creep up in
Speaker 9: those markets, you're you're going to see the demand for
Speaker 9: new homes within those Sunbelt areas places looking for highly
Speaker 9: amenditized communities, which you know, tend to be a lot
Speaker 9: of your newer communities as compared to some you know,
Speaker 9: older single homes that aren't going to have those recreational facilities.
Speaker 9: And so we're we think that that continues to be
Speaker 9: a great opportunity to expand hard share.
Speaker 6: Kate really appreciate your joining us. Kate Kaminski is Chief
Speaker 6: operating Officer at Walton Global, joining us from Scottsdale, Arizona.
Speaker 4: This is Bloombergmark.
Speaker 12: Journal about you.
Speaker 13: Let me drive, No, No, No, All right, how do the
Speaker 13: driving gravelst mate, I want to try it.
Speaker 12: It's a good question, drives.
Speaker 3: This is the drive to the clothes. Do to me?
Speaker 8: Think?
Speaker 12: Well, yoga don.
Speaker 6: On Bloomberg Radio, it is time for the drive to
Speaker 6: the clothes. And today joining us is Sylvia Jablonski. She's
Speaker 6: CEO and CIO at Defiance ETFs. I'm Scarlet fou here
Speaker 6: with Bailly Lipschultz.
Speaker 4: Sylvia. Great to have you on.
Speaker 6: As much as there's little action in the indexes today,
Speaker 6: we do see stock indexes firmly higher for the week.
Speaker 4: So the November rally fear not is intact.
Speaker 6: The S and P five hundred remains above forty five hundred,
Speaker 6: but the pace of gains is definitely slowed compared with
Speaker 6: let's say two and a half weeks ago. Treasury yields
Speaker 6: for change are a little changed, Sylvia. Have we gone
Speaker 6: from over sold to overbought and we're just kind of
Speaker 6: stuck waiting for new catalysts?
Speaker 12: Now, Hi, Scarlett, good afternoon.
Speaker 11: You know I think that with that kind of let's
Speaker 11: call it short term emic rally like this, it's it's
Speaker 11: not unusual to set, you know, to see a little
Speaker 11: bit of a pause in that.
Speaker 12: So I don't think that you know we're necessarily and overbought.
Speaker 11: I do you think that you know, we've transitioned closer
Speaker 11: to overbought than than you know, we were to oversold
Speaker 11: before because of the rally this week. But I think
Speaker 11: that stocks are just taking a breather, and you know,
Speaker 11: the story for a year end rally or at least
Speaker 11: sustaining what we've already got maybe moving up a little
Speaker 11: bit more, remains intact.
Speaker 12: You know, we have seasonal headwinds. Now, we have a
Speaker 12: strong consumer.
Speaker 11: As you said, the ten years a little unchanged, but
Speaker 11: it's certainly changed, you know, down from five percent in
Speaker 11: recent weeks. The FED is is kind of more stable,
Speaker 11: leaning on even dubvish, and I think the market like
Speaker 11: that in the short term, and I think that you know,
Speaker 11: that gives us some momentum in trading, and.
Speaker 5: Sylvia, we'll get some more data before the next FED decision.
Speaker 5: What can change is and do you see the inflation
Speaker 5: data is potentially one offer a start of a really
Speaker 5: strong trend.
Speaker 11: I don't think it's the start of a really strong
Speaker 11: trend necessarily.
Speaker 12: You know, we might see another reader too.
Speaker 11: That's that kind of stays in the same area might
Speaker 11: even be a little bit you know, hotter than this
Speaker 11: one was. But it's certainly very reassuring to have seen
Speaker 11: this inflation data number. You know, we kind of break
Speaker 11: it apart. Some of the interesting points of it were
Speaker 11: reduce things like reduce costs of healthcare and things like that. So,
Speaker 11: you know, I think it depends. I mean, what is
Speaker 11: good is that the price of oil is lower. You know,
Speaker 11: it looks like there's some ease across you know, the
Speaker 11: various inflation points, which is very good for consumers. But
Speaker 11: I think for the next couple of months it's probably
Speaker 11: going to hover around where it is. Maybe it'll kind
Speaker 11: of drop down a little bit. I don't think that
Speaker 11: much will change the FAD's mind at this stage, unless
Speaker 11: you know, unless it's a completely hot read out of
Speaker 11: left field, and you know, fed share Palol did address
Speaker 11: that right and in October, you know, he seemed a
Speaker 11: little more doubbish than he did in kind of the
Speaker 11: last meeting that we saw, where he almost said that, look,
Speaker 11: we're open to head fakes, and if there are head fakes,
Speaker 11: you know, have no doubt that we too will headfakes.
Speaker 11: So you know, I think that'll be interesting to see.
Speaker 6: You know, it's worth the note mentioning here that Microsoft
Speaker 6: shares are down, and if you look at an inter
Speaker 6: day chart, the stock did start losing ground right around
Speaker 6: the time, Bailly, that we broke the news that Sam
Speaker 6: Altman is departing open Ai after losing the confidence of
Speaker 6: the board again. Sam Altman one of the co founders
Speaker 6: of open Ai, one of those prominent figures in the
Speaker 6: AI industry.
Speaker 4: Leaving open Ai.
Speaker 6: The chief technology officer will come in and become the
Speaker 6: interim CEO. I bring this up, Sylvia, because Microsoft is
Speaker 6: one of the stocks that you say is really a
Speaker 6: leader among the tech firms in part because of that
Speaker 6: open Ai investment. How much of that is pricedon, do
Speaker 6: you think?
Speaker 12: Yeah? I do think so. The news is pretty interesting, right,
Speaker 12: and it's not surprising to.
Speaker 11: See that the stock maybe fell off a little bit
Speaker 11: of me today, you know, kind of fits and seven
Speaker 11: have all done the same. But you know, you know,
Speaker 11: we'll have to see how that impacts the stock and
Speaker 11: what his role was in, you know, in terms of
Speaker 11: like their allegiance with open Ai. I think it's a
Speaker 11: huge part of Microsoft's success, and I do think that
Speaker 11: open AI is priced in, but what is priced in
Speaker 11: is the.
Speaker 12: Other stuff they're doing.
Speaker 11: You know, they're they're kind of you know, forever been
Speaker 11: talking about their own AI chips.
Speaker 12: We'll see where that goes. If you look at cloud growth, you.
Speaker 11: Know, the last earning season, if Amazon Cloud grew twenty
Speaker 11: six percent or sorry, twelve percent, Azure grew twenty six percent.
Speaker 11: So they're starting to see like a faster growth rate
Speaker 11: even though they're not the biggest cloud provider. Three sixty
Speaker 11: five Coal Pilot is another AI solution, and forty percent
Speaker 11: of S and P five hundred stocks actually subscribed to
Speaker 11: that already, and they're picking up steam and momentum there.
Speaker 11: And then you actually just have like the you know,
Speaker 11: desktop upgrades and conversions, which we haven't really seen since COVID.
Speaker 11: So I think that either way, Microsoft is going to
Speaker 11: be fine, and there's a lot of reasons why.
Speaker 12: That's why that stock can.
Speaker 11: Continue to grow, quality stock, you know, it's just and
Speaker 11: on a tear lately.
Speaker 12: And I do think that they're going to play a
Speaker 12: huge role in AI.
Speaker 11: They've already sort of proved that, and I think this
Speaker 11: news will just will probably you know, be a short
Speaker 11: term dent in the stock will proborly move forward with innovations.
Speaker 5: Sticking on that theme, another stock you like is in Vidia,
Speaker 5: up two hundred and thirty six percent this year earnings
Speaker 5: on Tuesday.
Speaker 8: How high is the bar?
Speaker 12: The bar is pretty high. The bar is pretty high,
Speaker 12: you know.
Speaker 11: I think in some of the areas that we're going
Speaker 11: to be looking at is you know, kind of what
Speaker 11: their growth is, right I think they talked about a
Speaker 11: one hundred and seventy one percent in just one segment
Speaker 11: data center last time around.
Speaker 12: So we'll see, you know, kind of where that number
Speaker 12: of lands. Now.
Speaker 11: We know that they've been talking about one trillion dollars
Speaker 11: of data setter conversions that have to happen.
Speaker 12: We'll have to.
Speaker 11: See, you know, how much of that one trillion is
Speaker 11: starting to be captured in the near term there.
Speaker 12: I think the bar is set really high.
Speaker 11: But I also think that and Videos, you know, hands
Speaker 11: down the leader in AI, the leader and chips they
Speaker 11: own about ninety percent of the GPU market. So it'll
Speaker 11: be you know, kind of really interesting to see if
Speaker 11: the forward looking guidance is similar to what it was
Speaker 11: last time around.
Speaker 12: And the good thing about this is that Jensen.
Speaker 11: Wong has actually given us you know, kind of concrete
Speaker 11: data of what they see for forward looking demand. So
Speaker 11: I think the question is sort of does he get
Speaker 11: that demand that he's been you know, kind of publicly sharing.
Speaker 11: If he does, then it's you know, the stock can
Speaker 11: can move a little further and off to the races.
Speaker 6: Yeah, but if you missed the boat on Nvidia, and
Speaker 6: so many people did, the other way to play, you
Speaker 6: point out, Sylvia, is to look at the runner up here,
Speaker 6: and that might just be advanced micro devices. And when
Speaker 6: I say runner up, that that's kind of a generous
Speaker 6: way to put it because at most it makes up
Speaker 6: what ten percent of the market share for the GPU market.
Speaker 11: Yeah, ten percent of ten percent of GPU market and
Speaker 11: growing right. And Lisa has just been I think a
Speaker 11: really great transformative leader for that company. You know, she
Speaker 11: kind of comes out of they might have a slow
Speaker 11: quarter or tune and comes out a left field and
Speaker 11: just you know, crushes it with numbers. Her projected out,
Speaker 11: like I think was about nine percent revenue growth going forward.
Speaker 12: They're seeing you know, some pickup and gaming.
Speaker 11: Some of the chips that they have in things like xboxes,
Speaker 11: and they have you know kind of the leadership and
Speaker 11: electric vehicles. They're in testled vehicles, for example. So I
Speaker 11: do think that you know, it's a lot cheaper in
Speaker 11: terms of purchased price for the investor, and it's another
Speaker 11: way to play AI.
Speaker 6: All right, Sylvia, really appreciate your joining us. Sylvia Jablonski
Speaker 6: of Courses with Defiance ETS.
Speaker 4: She is the CEO and CIO at the firm. We
Speaker 4: appreciate your joining us for our drive to the close.
Speaker 6: We are looking at stock market indexes, little change up,
Speaker 6: but for now the S and P five hundred might
Speaker 6: just close out with a fourth straight day of games.
Speaker 4: This is Bloomberg.
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