Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: This is Bloomberg business Week Inside from the reporters and
Speaker 2: editors who bring you America's most trusted business magazine, plus
Speaker 2: global business, finance and tech news. The Bloomberg Business Week
Speaker 2: Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Speaker 1: Hi, everyone, Welcome to the Bloomberg Business Week weekend podcast.
Speaker 1: Top of mind for us this week well, the Apple
Speaker 1: rally following an event focused on artificial intelligence, which Fueld
Speaker 1: hopes that customers will pay up for the next generation
Speaker 1: of iPhones. The stock by the way, hitting a record
Speaker 1: and overtaking Microsoft and marketcap at one point. We'll have
Speaker 1: more on that in a moment.
Speaker 3: Plus, the FED dialing back rate forecast just won this
Speaker 3: year and still on inflation watch despite encouraging CPI and
Speaker 3: PPI readings this past week. We'll get into one part
Speaker 3: of the Fed's dual mandate job.
Speaker 1: Also, the conversation this week that we just can't stop
Speaker 1: talking about. It involves Henry Ford, Bill Clinton, Toyota, the
Speaker 1: Lean Taliban, McKinsey, and Moore and explains so much in
Speaker 1: our world.
Speaker 4: Peter S.
Speaker 3: Goodman with a deep dive on his new book, How
Speaker 3: the World Ran Out of Everything. He stops by a
Speaker 3: little later all that to come. We begin, though, with
Speaker 3: the FED and the US labor market, vetcher J. Powell,
Speaker 3: noting that broad data suggests the US job market is
Speaker 3: back to pre COVID levels and strong but cooling, and
Speaker 3: that if jobs were to weaken unexpectedly, the FED is
Speaker 3: ready to respond.
Speaker 1: This is against a backdrop where we see fewer people
Speaker 1: quitting their jobs and fewer getting promoted, leaving little room
Speaker 1: for new workers to break through as the ranks of
Speaker 1: employees above them stay in place, and it makes it
Speaker 1: more difficult for young graduates to get their foot in
Speaker 1: the door.
Speaker 3: For more, we caught up with Jane Oates, senior policy
Speaker 3: advisor at Working Nation. It's a media company that focuses
Speaker 3: on the future of work. Also, she's former Assistant Secretary
Speaker 3: of Employment and Training in the Obama administry. We talked
Speaker 3: with her before that Shed decision.
Speaker 5: Look, obviously the economy's tightening slightly. It couldn't stay where
Speaker 5: it was, you know, with three jobs for everybody looking
Speaker 5: so it's tightening a little bit. But you know, I
Speaker 5: think people are not moving and it's creating a real logjam.
Speaker 5: You know, we have four million people leaving college this
Speaker 5: time of year and another million and a half leaving
Speaker 5: high school that want to go right into the workforce.
Speaker 5: It's going to be tough for the next few months.
Speaker 1: I don't get it. It's just kind of wild, right,
Speaker 1: Like we talk about a tight labor market. People need workers,
Speaker 1: and yet right it's just these weird kind of I
Speaker 1: don't know, cross currents. It's hard to make sense to
Speaker 1: some extent about what really is going on in the
Speaker 1: labor market.
Speaker 5: I mean, look, Carol, some of it's geography. There are
Speaker 5: all these jobs open, but they're in places where there
Speaker 5: aren't people looking. Some of it's a skills mismatch, and
Speaker 5: some of it I have to tell you, you know,
Speaker 5: I like to like blame the automated software that's looking
Speaker 5: at resumes. I think that businesses are missing a lot
Speaker 5: of talented people because whatever they forgot to put in
Speaker 5: their cover letter and on their resume isn't matching the
Speaker 5: language in the job description, so they're not getting the job.
Speaker 3: Does it work both ways? I was talking to somebody
Speaker 3: who was doing some hiring ahead of intern seas and
Speaker 3: then she told me this is a shocking number. They're
Speaker 3: basically thirty places for interns. At the organization that she
Speaker 3: works in. They got thousands of applications Jane for those
Speaker 3: thirty spots, and I'm thinking to myself, how are you
Speaker 3: getting so many applicants? Are people just doing this automatically?
Speaker 3: Are they sending how does this work?
Speaker 5: I think people are really interested in this paid internship thing.
Speaker 5: They realize that it's work based learning at its best
Speaker 5: because they don't make a long term commitment like in
Speaker 5: a registered apprenticeship program. But they're able to get in
Speaker 5: see if they like the employer, see if they like
Speaker 5: the work. So it is really hot right now to
Speaker 5: get a paid internship, an internship of any kind. But
Speaker 5: most people need the salary to go along with it.
Speaker 5: But I understand I like business too much to handle
Speaker 5: on them. But I do think, you know, I know
Speaker 5: how conversome they have to keep their business going. They
Speaker 5: don't have time to look at thousands of applications for
Speaker 5: thirty open interns the ships. You're right, Tim, I get that.
Speaker 1: One of the things I keep thinking about the future
Speaker 1: workforce because it seems like globalization has really increasingly gotten
Speaker 1: rid of middle class, well paying jobs. It really allowed
Speaker 1: people to have a good life, buy a home, support
Speaker 1: their family, go on vacation, and that we've kind of
Speaker 1: gotten rid of a lot of those jobs in the
Speaker 1: middle sector, if you will. And I do wonder kind
Speaker 1: of if we're not fertility rates are low people, you know,
Speaker 1: where's the future workforce going to be? Is it going
Speaker 1: to be robotic automated AI? Like I'm trying to understand
Speaker 1: kind of where this all goes Ultimately.
Speaker 5: Well, AI is going to influence every job that's out there,
Speaker 5: and it's also going to influence.
Speaker 1: But how we keep saying like these big broad things
Speaker 1: about a Jane And I'm curious how you see specifically
Speaker 1: that AI, which has been around for decades and already
Speaker 1: impacts our world, how the next generation of AI and
Speaker 1: large language models and so on really change significantly the workforce.
Speaker 5: So there's going to be some media changes that are
Speaker 5: easy to see and some that are less easy to describe.
Speaker 5: But let's look at PR firms, right. PR firms used
Speaker 5: to hire lots of people, junior staff. People would come in,
Speaker 5: they'd write the first draft of something for a customer,
Speaker 5: and then somebody more senior would edit it and finesse
Speaker 5: it because they know the customer better. Right now, people
Speaker 5: are using generative AI to do that first draft. So
Speaker 5: you see real slow down in hiring. You see a
Speaker 5: real problem in coding. You know AI can write code
Speaker 5: faster than any human and basically all those people who
Speaker 5: went to coding camps ten years ago are looking at
Speaker 5: a very limited shelf life right now. Those are too easy.
Speaker 3: Example that was Jane Oates, senior policy advisor at Working
Speaker 3: Nation and former Assistant Secretary of Deployment and Training in
Speaker 3: the Obama administration. For more on the complete FED decision,
Speaker 3: head on over to Bloomberg dot Com.
Speaker 1: Now to another big story this past week, Apple shar
Speaker 1: is hitting a record at one point, overtaking Microsoft during
Speaker 1: the week as the world's largest market cap company. The
Speaker 1: two companies are pretty much neck and neck now. Investors
Speaker 1: pumped up after Apple's annual Worldwide Developers Conference and great
Speaker 1: AI reveal now known as Apple Intelligence.
Speaker 3: For Intel on Apple, we turned to our in house
Speaker 3: go to Bloomberg News chief technology correspondent Mark German.
Speaker 6: They rolled out a bunch of new AI features with
Speaker 6: a privacy stance with deep integration into their applications. They
Speaker 6: didn't bring anything new to the party. But the most
Speaker 6: important part is they showed up to the party, I guess.
Speaker 6: And it took investors in Wall Street sometime to realize
Speaker 6: that Apple is now here, with or without something new.
Speaker 7: They've arrived.
Speaker 6: It was a year and a half for clean effort
Speaker 6: to get Apple Intelligence to market. They had all these
Speaker 6: AI features under development, but no sent the size, no
Speaker 6: integrated package.
Speaker 8: So it took a while to put it all together.
Speaker 6: And they did that, and it's not going to sell
Speaker 6: new iPhones. I believe it may spur a small number
Speaker 6: of upgrades, but more importantly, it's going to lock people
Speaker 6: into the ecosystem. They're going to keep their existing US
Speaker 6: serpace and they're not going to lose people away to
Speaker 6: Android and other AI driven platforms because they did this.
Speaker 1: I do want to ask you, though about the partnership
Speaker 1: with open aii. Right the formal announcement we got that,
Speaker 1: How important is that And is it any different from
Speaker 1: open AI's other partnerships that are out there, And is
Speaker 1: it always different because it's just Apple doing it?
Speaker 6: Oh, the open ai partnership with Apple is incredibly different.
Speaker 6: So let me give you some perspective here. So Microsoft,
Speaker 6: they rolled out a ton of AI features on their
Speaker 6: computers and their other operating systems, the underlying large language models,
Speaker 6: that underlying technology that they're using for nearly all of
Speaker 6: their features is powered by open Ai. Apple's feature set
Speaker 6: ninety percent of it is powered by Apple Large Language models,
Speaker 6: underlying Apple technology, Apple servers, et cetera. Only the chatbot
Speaker 6: portion primarily, and some of the writing assistance tools those
Speaker 6: are powered by open ai Large Language models and chat GPT.
Speaker 6: So the open Ai portion of the overall Apple Intelligence
Speaker 6: story is actually only the very small sliver. All right.
Speaker 1: You know we always talk about the importance of the
Speaker 1: Chinese market to Apple. Is there something here in terms
Speaker 1: of what we're hearing from this event and that kind
Speaker 1: of moves the needle potentially in their sales over in China.
Speaker 8: Yes, good question.
Speaker 6: This is a point that quite frankly, I should have
Speaker 6: made it earlier. Nothing Apple Intelligence, at least the first
Speaker 6: iteration is only available in US or Fish. Yes, in
Speaker 6: the US English, So there's going to be a long
Speaker 6: ramp up here until they're able to get it in
Speaker 6: other languages. Now, I would have to imagine that getting
Speaker 6: Apple Intelligence to work properly outside of the US, outside
Speaker 6: of just US English is going to be very high
Speaker 6: priority for next year, and so I would anticipate China
Speaker 6: next year. It's a priority. So I would imagine AI
Speaker 6: story from Fina was going to get butted up sooner
Speaker 6: than later.
Speaker 3: Is it integrated at the OS level? And you can
Speaker 3: probably guess why I'm asking this mark because I.
Speaker 8: Can guess why you're a few things about that.
Speaker 3: Okay, good, because well I want to introduce it because
Speaker 3: I don't think everybody is totally caught up on this.
Speaker 3: Elon Musk said he would ban Apple devices from his
Speaker 3: companies if openis ai software is integrated at the operating
Speaker 3: system level. He called the tie up a security risk. Okay,
Speaker 3: go ahead, please.
Speaker 6: Something integrated at the OS level. That is a vague
Speaker 6: term that can be interpreted in many different ways, so
Speaker 6: it's not entirely clear what he means by that. If
Speaker 6: you ask me, open Ai is indeed integrated at the
Speaker 6: OS level, and I'm sure Apple would agree, but I'm
Speaker 6: sure there's some other people who would say that it's
Speaker 6: not integrated at the OS level. It's built into Siri,
Speaker 6: it's built into the OS. It's a chatbot. It's not
Speaker 6: just an application. It's not just a layer on top.
Speaker 6: It is fairly integrated into the operating system. So I
Speaker 6: would say, yes, it is integrated, but just because it's
Speaker 6: integrated at the OS level doesn't mean there aren't parameters
Speaker 6: and what's known as sandboxing implemented into the coding infrastructure
Speaker 6: that can separate what goes into chet GPT from the
Speaker 6: deeper core of the iOS foundation. Right, and so the
Speaker 6: burden of proof is on Apple and open Ai to
Speaker 6: show how privacy centric to chat GPT elements are of
Speaker 6: Apple intelligence. Apple did a fifteen out of ten job
Speaker 6: showing how private and secure their artificial intelligence technology is
Speaker 6: for the phone that's the Apple LLLM, how secure their
Speaker 6: their compute cloud is for the LLM that runs inlicloud.
Speaker 6: They did an amazing job on that. What we didn't
Speaker 6: hear a lot about is the privacy protections that open
Speaker 6: ai are implementing. From some standpoints, you can say it's
Speaker 6: just you know what, trust us. Maybe Apple could say
Speaker 6: a little bit more there. Either way, I think that
Speaker 6: Elon Musk is competing with Apple and open Ai here.
Speaker 6: He has grock from Xai. He has a terrible interpretation
Speaker 6: of Apple and feeling towards Apple and their app store
Speaker 6: rules and the fees they take from subscriptions on their platform.
Speaker 6: He clearly does not like Sam Altman. Right, He's embroiled
Speaker 6: in all sorts of things regarding Sam Altman and open Ai.
Speaker 3: He was a co founder of open ai.
Speaker 7: He was a co.
Speaker 8: Founder by falling out.
Speaker 6: They had a falling out, So his perspective isn't exactly
Speaker 6: kosher on this. On this situation, what do you he
Speaker 6: raises real privacy questions regardless. I just think he's way
Speaker 6: overboard on it.
Speaker 3: Okay, that said, Mark, how realistic is it that you
Speaker 3: know he could ban these devices at his companies given
Speaker 3: that they're ubiquitous, And I can't imagine employees, you know,
Speaker 3: putting them in some sort of box or leaving them
Speaker 3: in their cars they walk into work at SpaceX or
Speaker 3: the boring company or Tesla.
Speaker 6: It's a top ten most ridiculous Elon Musk tweet, Right,
Speaker 6: that's not going to happen. I mean imagine like showing
Speaker 6: to work and like all of a sudden, you know,
Speaker 6: you can't bring your Apple devices in.
Speaker 8: You can have to leave your iPhone in a faradakage
Speaker 8: outside the office or leave it in your car. That's
Speaker 8: just not going to happen, right.
Speaker 6: He's already laid off thousands of people from his company,
Speaker 6: or tens of thousands of people from his company. I'm
Speaker 6: not sure he can afford to have people quitting in
Speaker 6: large numbers at this point, but I think that's going
Speaker 6: to upset a lot of people.
Speaker 3: That was Bloomberg News Chief technology correspondent Mark German, by
Speaker 3: the way, speaking of Elon musk and Ai. Elon dropping
Speaker 3: a lawsuit alleging that open Ai and its CEO Sam
Speaker 3: Altman breached a founding promise last year by prioritizing profits
Speaker 3: over humanity without saying why. More. Elon News, including about
Speaker 3: his massive fifty six billion dollar pay package, just dead.
Speaker 3: On over to Bloomberg dot Com.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm Eastern Listen
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Speaker 1: Bill and China Entering the wto the rise of globalization,
Speaker 1: McKinsey and the Lean Taliban, the decline of unions in
Speaker 1: the working class, the rise of share buybacks and increasing dividends,
Speaker 1: and monopolistic takeovers, and then the pandemic and the great
Speaker 1: supply chain crisis.
Speaker 3: Covering it all in this complex global system is New
Speaker 3: York Times Global Economics correspondent an award winning journalist, Peter S. Goodman.
Speaker 3: He's the author of the new book Just Out How
Speaker 3: the World ran out of everything inside the global supply chain.
Speaker 3: And to understand the global supply chain, Peter visits seemingly
Speaker 3: every link of it. He spends time in one of
Speaker 3: the largest exporters of amends in California and with the
Speaker 3: dock workers who are supposed to get those amends all
Speaker 3: over the world. He hitches a ride through Kansas with
Speaker 3: a Brahms loving trucker, feeds cows with a third generation
Speaker 3: rancher in Montana, and eats breakfast with the commissioner of
Speaker 3: the Federal Maritime Commission. He visits supports from LA to
Speaker 3: Savannah to explain how the world found itself in the
Speaker 3: greatest supply chain crisis it's ever since.
Speaker 1: All right, He is here in our Bloomberg Interactive Broker studio.
Speaker 1: We wanted to do the setup because it's really comprehensive,
Speaker 1: and I do feel like I think it's safe to
Speaker 1: say that it explains a lot of kind of where
Speaker 1: we are today. So, Peter, you have had such a
Speaker 1: front row seat to so much that is going on
Speaker 1: in the world. Tell us about that front row seat
Speaker 1: and what kind of really you know, stands out for you.
Speaker 9: You know, it's changed the way I look at any
Speaker 9: package that lands at my door, or really any product
Speaker 9: that somebody made somewhere that had to be transported to
Speaker 9: a store or to a home or a business. We
Speaker 9: don't tend to think about the supply chain, you know.
Speaker 9: It's one of those things. It's like the light switch.
Speaker 9: We're not thinking about the internal wiring.
Speaker 4: We flip it on.
Speaker 9: The light's work well, when we needed it most, it failed.
Speaker 9: It buckled, and we had frontline medical workers dealing with
Speaker 9: COVID patients without protective gear. We had families unable to
Speaker 9: find infant formula. I mean, that was an incredible crist
Speaker 9: If we had a toilet paper scare, which turned out
Speaker 9: to not be so much as shortage as a question
Speaker 9: of hoarding. And we all remember these ships, you know,
Speaker 9: fifty sixty seventy ships that were floating off the coast
Speaker 9: of southern California unable to land floating for weeks at
Speaker 9: a time before they could find a slot to load
Speaker 9: and unload all these factory goods coming in from China.
Speaker 9: And I think for all of us in the midst
Speaker 9: of the pandemic, it was so bewildering that it gave
Speaker 9: us this curiosity about these people we never think about. So, yes,
Speaker 9: as you guys pointed out, I climbed into in the
Speaker 9: front of a truck. I visited with rail maintenance workers
Speaker 9: who were away from their families for weeks at a time,
Speaker 9: and I really tried to understand what has gone haywire here.
Speaker 3: Peter, the reason we're talking about such a complex supply
Speaker 3: chain is because of globalization. Your career has kind of
Speaker 3: coincided with the rise of globalization, right, being a reporter
Speaker 3: in South Asia in the nineties and then post dot
Speaker 3: com crash working for the Washington Post. I think it
Speaker 3: was out of Shanghai.
Speaker 4: That's right.
Speaker 3: You visited a lot of these factories at times when
Speaker 3: they weren't what they are today. Talk a little bit
Speaker 3: about how you've seen your career alongside the rise of globalization.
Speaker 4: Yeah, I appreciate you pointing that out.
Speaker 9: So I landed in China in two thousand and one,
Speaker 9: which was the same year that China of course enters
Speaker 9: the World Trade Organization, this landmark, you know, moment for globalization.
Speaker 9: And it was pretty clear then that China had huge
Speaker 9: aspirations and that the world was flocking to China in
Speaker 9: large part because you know, corporate CEOs who are constantly
Speaker 9: looking for ways to cut costs, availed themselves of this
Speaker 9: ultimate opportunity to you know, engage Chinese labor as a
Speaker 9: way of undercutting labor costs at home in the US
Speaker 9: and in Japan, in.
Speaker 4: South Korea, in Europe.
Speaker 9: And it was also clear that the Chinese government had
Speaker 9: very systematically built out the infrastructure that was needed for trades.
Speaker 9: So you know, visited massive ports factories that were capable
Speaker 9: of making you know, enough microwave ovens to supply Walmart
Speaker 9: for a year, you know, and whole towns were you know,
Speaker 9: set up for single industries.
Speaker 4: I remember going to the necktie town.
Speaker 9: There was this one town in one province that was
Speaker 9: suddenly making more neck ties than all of Italy, you know,
Speaker 9: in the course of a decade. So you could feel
Speaker 9: that the scale was available. But what I didn't understand
Speaker 9: and what I've come to understand through this book is
Speaker 9: that all of this was premised on the idea that
Speaker 9: container shipping would be basically free and reliable. And what
Speaker 9: I've come to see is that, you know, we built
Speaker 9: this global economy putting ourselves really at the mercy of
Speaker 9: this international cartel.
Speaker 1: If you had to pinpoint, was it President Bill Clinton?
Speaker 1: Former President Bill Clinton and the push to get everybody
Speaker 1: or to get China in the wto that. That's why
Speaker 1: we're having this conversation. That's why when the pandemic hit,
Speaker 1: we were like, what the heck happened to our global
Speaker 1: supply chain? Isn't that particular moment in time that got
Speaker 1: us to hear?
Speaker 9: I think that's a landmark lot of moments in time, right.
Speaker 9: I mean, I write about four because I was interested
Speaker 9: in the rise of mass assembly. I write about the
Speaker 9: roots of the shipping container because the process of standardizing
Speaker 9: cargo made it possible to go look for the cheapest
Speaker 9: place to make anything. You could go anywhere around the world.
Speaker 1: But if China wasn't accepted on a global scale in
Speaker 1: terms of trade, right, there was a big push. There
Speaker 1: were lots of concerns about human rights. There are still
Speaker 1: lots of big concerns about human rights, and yet there
Speaker 1: they were right in the WTO, something they fought for.
Speaker 9: Well, here's the part that people are generally afraid to
Speaker 9: talk about. You know, China gets into the WTO because
Speaker 9: American retailers lobby like crazy to get China into the WTO,
Speaker 9: and nobody wants to be affiliated with the story of
Speaker 9: labor exploitation. Now, let's remember Chinese labor in American history.
Speaker 9: You know, from the beginning, it's about undercutting wages. Right,
Speaker 9: Chinese workers are systematically brought over from China to build
Speaker 9: the railroads because the mostly Irish laborers say, yeah, this
Speaker 9: is pretty dangerous and we're not getting paid enough. So
Speaker 9: this is a continuation of that story, you know, a
Speaker 9: century later, where now we're bringing the production to China
Speaker 9: and there's this is a sort of seemy, unsavory quality
Speaker 9: to the story because of course China is controlled by
Speaker 9: the Chinese Commedies Party. There's no elections. You can get
Speaker 9: access to land, you can bypass workplace and environmental standards
Speaker 9: by cutting some local party official in on part of
Speaker 9: the sports. Well, this is not a good story for
Speaker 9: Bill Clinton, who you know, only a decade before he
Speaker 9: lobbies to get China into the WTO is running as
Speaker 9: the guy who's you know, disciplining George H. W. Bush
Speaker 9: for coddling the butchers of Beijing. He's very critical of
Speaker 9: the crackdown against the pro democracy demonstrators in Tanneman Square.
Speaker 4: Well, I tell his story in the book. You know.
Speaker 9: It's not even a decade later and Clinton's in Beijing
Speaker 9: at at banquet at the Great Hall of the People
Speaker 9: across the street from Tianeman Square, where he literally picks
Speaker 9: up the baton and conduct the People's Liberation Army Orchestra
Speaker 9: as they played this John Phillips south of March. Now,
Speaker 9: why is Bill Clinton there? He's there because his party,
Speaker 9: the Democratic Party, is pulling in massive campaign contributions from retailers,
Speaker 9: and they're fashioning this story. It's not totally a fairy tale, right.
Speaker 9: I mean, trade has been the lynchpin of American foreign
Speaker 9: policy since the end of the Second World War. But
Speaker 9: there are a lot of reasons to be dubious that,
Speaker 9: you know, this is really about. It's not just about
Speaker 9: selling Chinese people lots of stuff. It's not just about
Speaker 9: buying cheap goods from China. This is about democratizing China
Speaker 9: once well, that was.
Speaker 1: The goal, that thinking that, okay, let's open up trade
Speaker 1: and probably democracy will come and the human rights abuses
Speaker 1: will go away. And yet it didn't necessarily play out
Speaker 1: that way.
Speaker 9: Well, one part of it played out. We got really
Speaker 9: low cost goods from China. The Walton family, the founders
Speaker 9: of Walmart, for a while became you know, the wealthiest
Speaker 9: family on Earth, and anybody who moved production over to
Speaker 9: China at scale and managed to do the right deals
Speaker 9: warded their shareholders handsomely. That part held to form. Also,
Speaker 9: not incidentally, the industrialization of China lifted several hundred million
Speaker 9: people out of poverty, and that's highly significant. But the
Speaker 9: part about once Chinese people get a taste of Kentucky
Speaker 9: Fried chicken, they're going to demand the ballot box, well
Speaker 9: that has not worked out as I think everyone is
Speaker 9: now where you know, we're talking about genocide according to
Speaker 9: the Biden administration in Hinjong, where the wigers are pressed
Speaker 9: into forced labor to produce cotton that ends up in
Speaker 9: lots of apparel. Of course, we still don't have elections.
Speaker 9: The central government has actually strengthened its role in Chinese society.
Speaker 9: So we don't hear that talk anymore. And of course
Speaker 9: now it's become politically fashionable within both parties to attack
Speaker 9: China as our enemy.
Speaker 3: Peter, you mentioned concentration in shipping. I believe you called
Speaker 3: it a cartel, right. I had no idea before reading
Speaker 3: this that it was basically what three companies.
Speaker 4: Three alliances. There were a bunch of companies, but think
Speaker 4: of it like airline alliance.
Speaker 3: Three alliances that control basically all.
Speaker 9: Of shipping ninety five percent of the shipping from China
Speaker 9: to the West coast of the United.
Speaker 3: States, some of the companies owned by China, or like
Speaker 3: our state subsidized organizations. How did it become like that.
Speaker 9: It became like that because there was deregulation pretty much everywhere,
Speaker 9: including in the US, where you know, there used to
Speaker 9: be this anti trust exemption, but there was regulation on
Speaker 9: shipping rates, so you had to post what your rates
Speaker 9: were from one place to another. You couldn't negotiate a
Speaker 9: deal in secret. It was all above board, sort of
Speaker 9: like a utility, right, Like the governments involved because this
Speaker 9: is a vital part of the economy. And then basically
Speaker 9: retailers lobbied. There were a couple of landmarks. The last
Speaker 9: one was in the eighties. There was no Amazon then,
Speaker 9: but there was Walmart target. The big retailers thought, well,
Speaker 9: if we're bringing over lots of these factory goods from
Speaker 9: China to the west coast of the US to the
Speaker 9: east coast of the US, we would like to be
Speaker 9: able to negotiate a better deal than the smaller competitors.
Speaker 9: So essentially we've optimized the supply chain for the biggest companies,
Speaker 9: and the anti trust was essentially deactivated throughout much of
Speaker 9: American life, right you go back to Reagan.
Speaker 4: Although really the story starts with Carter.
Speaker 9: You know, we're steeped in this idea that scale is
Speaker 9: the way to serve consumers and so let's just get
Speaker 9: out of the way of business and let them provide,
Speaker 9: and you know that will deliver innovation. But once you
Speaker 9: take away competition, of course, what we get is pricing power.
Speaker 9: And for a long time, these mostly well they're all
Speaker 9: actually foreign companies. In international shipping. There were like extensions
Speaker 9: of state policy.
Speaker 4: In China's South Korea, Taiwan, so.
Speaker 9: They were content to keep shipping costs low as a
Speaker 9: way to bolster their exports. But once we get a
Speaker 9: shock in the great supply chain disruption during the pandemic,
Speaker 9: we see shipping prices go up tenfold, and we see,
Speaker 9: you know, you guys were alluding to the fact that
Speaker 9: I spent some time with Alman farmers in central California.
Speaker 9: We see common farmers I visited had an entire crop
Speaker 9: sold to Dubai to Japanese purchasers, and they were just
Speaker 9: sitting on all this crop that they couldn't actually get
Speaker 9: on a ship. Because these shipping carriers were making so
Speaker 9: much money sending factory goods from China to the West
Speaker 9: coast of the US, which is the gateway for forty
Speaker 9: percent of American imports, that they didn't even want to
Speaker 9: bother to send empty containers up to the Central Valley
Speaker 9: to load up with farm products like ammonds. They just
Speaker 9: unloaded factory goods in LA and sent empty containers back
Speaker 9: across the Pacific. We're talking about burning diesel fuel to
Speaker 9: send air back across the Pacific. So they can get
Speaker 9: twenty five, twenty seven, twenty eight thousand dollars to move
Speaker 9: a container of factory goods from you know, a place
Speaker 9: like Shanghai to LA. That used to cost like twenty
Speaker 9: twenty five hundred during the pandemic. That's largely the story
Speaker 9: of deregulation.
Speaker 2: You know.
Speaker 1: One thing I think about, though, in particular in your
Speaker 1: book is kind of the role of consultancy here. And
Speaker 1: I don't want to pick pile on anyone in particular,
Speaker 1: but you do single out Mackensey.
Speaker 4: I sure do.
Speaker 1: You do talk about the lean Taliban. You also get
Speaker 1: into a lot of just in time inventory for anybody's
Speaker 1: taken accounting cleanses. Like we've played around with this, right,
Speaker 1: but this idea too that you don't want to have
Speaker 1: big inventories, you want to be lean and mean. Right,
Speaker 1: so because those inventories are costly to store them, to
Speaker 1: have them, and all that thing, And so this financial
Speaker 1: focus on that and this kind of narrative of saying
Speaker 1: be lean and mean that's a good thing. We've all
Speaker 1: played a part of it when we go through the
Speaker 1: quarterly lean and mean this is a good thing for
Speaker 1: a company. How big a role did that play in
Speaker 1: getting us so that when the pandemic hit, nobody had
Speaker 1: excess supply anywhere a huge role.
Speaker 9: We cut inventories to the bone. Publicly traded companies cut
Speaker 9: inventories to the bone over decades now, just in time
Speaker 9: is a sensible idea. It was pioneered by Toyota and
Speaker 9: to World War two devastation, not a lot of capital,
Speaker 9: not a lot of land to develop. Taichi Ono, who
Speaker 9: is running Toyota, pioneers this idea of instead of making
Speaker 9: as much stuff as possible like Henry Ford did at
Speaker 9: Ford and letting salespeople try to figure out how to
Speaker 9: sell it, Let's just make enough to replenish the cars
Speaker 9: that we've already sold. Let's get our suppliers to deliver
Speaker 9: the stuff we need right when we need it, rather
Speaker 9: than waste capital on warehousees.
Speaker 7: Hey.
Speaker 9: That's a good idea, but a long come of publicly
Speaker 9: traded companies guided by consultants like McKenzie who say, listen,
Speaker 9: this should apply to everything, and you should not stop
Speaker 9: until there's basically no inventory. And what you do is,
Speaker 9: instead of wasting capital on sticking you know, auto parts
Speaker 9: in a warehouse as a hedge against trouble, just liquidate
Speaker 9: the warehouse.
Speaker 7: Take the cash, give it.
Speaker 9: To yourselves to reward yourselves corporate executives for being smart
Speaker 9: enough to hire McKenzie, Give it to shareholders and the
Speaker 9: form of dividends and share buybacks, and everybody's happy until
Speaker 9: there's a problem. And this pandemic was not the first
Speaker 9: time we saw a shock to the system. I mean,
Speaker 9: I wrote my first supply chain story back in nineteen
Speaker 9: ninety nine. It was about an earthquake in Taiwan. And
Speaker 9: back then people said, Oh, whoops, we've got computer chip shortages.
Speaker 9: Maybe we shouldn't concentrate all our industry here, Maybe we
Speaker 9: should have a little more difversit.
Speaker 3: If we've learned our lesson with the computer tip industry.
Speaker 4: We sure did not mean.
Speaker 9: I tell the story in the book of Henry Ford,
Speaker 9: who is a problematic figure in history, but knew a
Speaker 9: thing or two about supply chains and never wanted to
Speaker 9: be in a position where he could.
Speaker 4: Be pinched by a supplier constrained.
Speaker 7: Would have been.
Speaker 9: Horrified to see what I saw one hundred years later,
Speaker 9: as on walking the catwalk at his signature River Rouge
Speaker 9: plant outside of Detroit, where they're making these beautiful f
Speaker 9: one fifty pickup trucks their most popular vehicle. They've got
Speaker 9: all the things they need except for the one thing
Speaker 9: that brings it to life, the computer chip. And I
Speaker 9: watched them park these cars in the shadow of Ford's
Speaker 9: corporate headquarters across the street from Henry Ford Elementary School.
Speaker 9: I mean, he would be spinning in his grave over this.
Speaker 9: We did not learn the lesson.
Speaker 1: I think this is the part, and forgive me if
Speaker 1: I've got it wrong, but when I read it, Detroit
Speaker 1: had devolved into a poignant example of what happened when
Speaker 1: middle class factory jobs were replaced by poverty level positions
Speaker 1: at retailers, warehouses, and fast food chains. Next to the
Speaker 1: old Highland Park factory, now forlorn brickshell, a shopping center
Speaker 1: called modelty Plaza was anchored by a dollar store, a
Speaker 1: payday lender, and a plasma collection center awaiting people willing
Speaker 1: to swap blood for cash. The car itself had become
Speaker 1: an instrument of white flight. Like that to me, says
Speaker 1: so much of what's going on across America and explains
Speaker 1: to me politics in a big way. We want to
Speaker 1: bring in Doug Christners here. Doug is like this great
Speaker 1: thinker and like your book just kind of reminds us
Speaker 1: of the things we talk about with Doug. So we
Speaker 1: wanted to bring in one of these.
Speaker 10: Things that's interesting. Tim was going to talk about politics.
Speaker 10: In the nineteen ninety two presidential campaign, Ross Perrot was
Speaker 10: the lone voice who was kind of cautioning against at
Speaker 10: that time, what was the North American Free Trade Agreement Canada,
Speaker 10: the US and Mexico. Stunning is how quickly the conversation
Speaker 10: became about China. Why did that pivot happen so quickly
Speaker 10: in your view, away from North America manufacturing in China.
Speaker 9: Well, China operates on a whole different scale than Mexico, right,
Speaker 9: So Rossboro, of course, yeah, famously warns of the giant
Speaker 9: sucking sound. And we did lose some jobs in the
Speaker 9: industrial Midwest to Mexico, but we picked up a lot
Speaker 9: of jobs because the US and Mexico are economically integrated.
Speaker 9: And I mean, it's ironic now to think about Mexico
Speaker 9: as the solution to some of our supply chain problems.
Speaker 9: But when we import something from Mexico, forty percent of
Speaker 9: the value of that imported good was actually made in
Speaker 9: the United States. So, you know, we bring in a
Speaker 9: car that was made in a Mexican factory, and forty
Speaker 9: percent of the value of that car was built by
Speaker 9: American labor in American factories. The component number for China
Speaker 9: is three percent, So only three percent of the value
Speaker 9: of imports from China have a American value add and
Speaker 9: of course Chinese state policy is really directed at driving
Speaker 9: that as close to zero as possible. But I think
Speaker 9: it's really important to note that a lot of these
Speaker 9: failures that have fueled the backlash originally Mexico now China.
Speaker 9: I argue in the book, I mean this part nobody
Speaker 9: really wants to talk about. These are homemade failures. I mean,
Speaker 9: we have benefited from trade with China. We have benefited
Speaker 9: from trade with Mexico. We've got a lot of low
Speaker 9: cost goods in the case of Mexico again, we've boosted
Speaker 9: our exports. We've got consumers benefiting. A lot of data
Speaker 9: shows that consumer spending has been juiced by trade with China,
Speaker 9: and that money ends up, you know, in the hands
Speaker 9: of American service providers. Our leisure, you know, is more
Speaker 9: robot We have more money here. The problem is we
Speaker 9: haven't cushioned the people who have lost, and we have
Speaker 9: seen whole communities, industries, you know, really hit hard by
Speaker 9: this China shock. That a lot of the data shows
Speaker 9: we're talking one million direct jobs in the space of
Speaker 9: a decade lost to Chinese imports.
Speaker 1: So it's kind of the bad guy, or is it
Speaker 1: investors and companies who constantly were seeking out the low
Speaker 1: cost provider.
Speaker 9: The ultimate winners are the investor class, without any question.
Speaker 9: And there's a lot of labor exploitation in China. So yes,
Speaker 9: the winners are the people who funded the Clinton campaign
Speaker 9: and got Bill Clinton together.
Speaker 10: Saying nothing of environmental regulation of course. Okay, right, go ahead, Peter.
Speaker 3: I want to talk about labor exploitation in the trucking industry, sure,
Speaker 3: because a common thing that we heard over and over
Speaker 3: again during the pandemic and the supply chain disruption that
Speaker 3: we saw was that trucking companies just didn't have enough drivers.
Speaker 3: They needed people to go learn how to drive a
Speaker 3: truck and start driving trucks. You found that that wasn't
Speaker 3: the case. It's just a really really bad job.
Speaker 9: It's a horrible job. I mean, I rode with a
Speaker 9: trucker in the best possible conditions who actually likes his
Speaker 9: job from Kansas City to Dallas and back in the
Speaker 9: middle of the winter. I slept in the cab for
Speaker 9: two nights. I watched this man have to worry about
Speaker 9: caffeinating enough so we wouldn't fall asleep at the wheel,
Speaker 9: and yet not having to pull over to use the restroom.
Speaker 9: Truckers are constantly worried about where they're going to park.
Speaker 9: They're at the mercy of lots of other parts of
Speaker 9: the supply chain they have no influence over. They can
Speaker 9: get stuck at warehouses for hours waiting for somebody to
Speaker 9: load or unload their vehicle because warehouses have shortages of workers. Now,
Speaker 9: this trucking industry shortage, this is an industry talking point.
Speaker 4: There's ten million people in the.
Speaker 9: United States who have licenses to drive long haul trucks,
Speaker 9: and we need roughly a third that number.
Speaker 4: We've run out.
Speaker 9: Of people we can feed into the mill who are
Speaker 9: willing to sign off on these predatory lending arrangements by
Speaker 9: which truckers pay for their certification, by which they end
Speaker 9: up buying these vehicles at wildly inflated prices from the
Speaker 9: trucking companies. Then they're forced to go service these vehicles
Speaker 9: at places that are part of the empires of these
Speaker 9: trucking companies, and so a lot of people, you know,
Speaker 9: they get tired of being away from their families. They
Speaker 9: get tired of hearing that they've missed another chill child's
Speaker 9: birthday party, they miss people's funerals. It's a tough job.
Speaker 9: It's always been a tough job. The difference is it's
Speaker 9: been downgraded to the point that we've run out of
Speaker 9: takers for this tough job.
Speaker 10: What's the remedy in your view? I mean, how do
Speaker 10: we get out of the situation that we're in now.
Speaker 10: I'm listening to the trucking story and I'm thinking of
Speaker 10: robotic vehicles that are going to be creeping into the
Speaker 10: scene pretty soon. So the argument that you're making right
Speaker 10: now may get a remedy, but it's going to be
Speaker 10: at the cost of labor in a major way. But
Speaker 10: what do you think the remedy is longer term?
Speaker 9: I mean, I think for openers, we got to look
Speaker 9: at these predatory arrangements that truckers make with the people
Speaker 9: coming through these educational mills that set up certification with
Speaker 9: taxpayer funding. You know, we are paying to feed people
Speaker 9: into these training programs where they end up getting jobs
Speaker 9: that pay a fraction of what they've been promised.
Speaker 4: So that's the first thing to do.
Speaker 9: Look, automation is inevitable, It's going to happen, But we
Speaker 9: got to have a conversation about how we compensate the
Speaker 9: people who are still in the business. We've got to
Speaker 9: make sure that they can get exercise, that they can
Speaker 9: eat better.
Speaker 4: Than their eating.
Speaker 9: I mean, the food that you see at these truck stops.
Speaker 9: It's just a it's a tough life. The government has
Speaker 9: to get involved in looking at these working conditions.
Speaker 1: What's the bigger solution though, because to me, I'm thinking,
Speaker 1: all right, if we're bringing a lot of stuff home,
Speaker 1: maybe more jobs are going to be created back home,
Speaker 1: but it's going to be more expensive, So get ready
Speaker 1: to continue to pay more money. But if it means
Speaker 1: that workers are actually making more and a real living,
Speaker 1: that's a good thing. So I don't know, I'm just
Speaker 1: trying to figure out what you see is.
Speaker 9: The wait in some cases if we shift production from
Speaker 9: China to other countries where wagers hire, if we bring
Speaker 9: some of it back to the US, that that'll mostly
Speaker 9: be automation. Yeah, the costs for some things are going
Speaker 9: to go up. Some things may go now, some things
Speaker 9: may go up, But what is the cost that we're
Speaker 9: paying now that doesn't get factored into the simple sticker
Speaker 9: price with the Walmart supers. What's the cost of running
Speaker 9: out of medical devices in the middle of a pandemic.
Speaker 9: What's the cost of discovering that we've depended upon a
Speaker 9: single country that we've decided as our adversary that we're
Speaker 9: having a trade war with for you know, personal protective
Speaker 9: gear to give frontline medical When of that's.
Speaker 1: Really changed, right dramatically or has it changed somewhat?
Speaker 9: I mean, I spent a lot of time for the book,
Speaker 9: you know, I went to Guatemala with Columbia Sportswear. They're
Speaker 9: looking to move production closer to their biggest market, which
Speaker 9: is North America. Spent a lot of time in Mexico looking,
Speaker 9: you know, as we've discussed how that could potentially be
Speaker 9: part of this solution to our excessive reliance on China.
Speaker 9: But China is going to be the center of manufacturing
Speaker 9: for a really long time for the simple reason that's
Speaker 9: got this unbeatable combination of infrastructure, low cost efficiency. The
Speaker 9: question is how do we compensate the people who were
Speaker 9: depending on in our own country. And you know, Henry
Speaker 9: Ford again problematic character for all sorts of reasons, but
Speaker 9: he got some things right. You know, he doubled wages
Speaker 9: for his workers in the nineteenth he was called a
Speaker 9: communist by some people. He said, look, I'm just trying
Speaker 9: to sell cars, and I'm trying to sell them at
Speaker 9: low prices. And any business that's built on low wage
Speaker 9: labor is unreliable.
Speaker 10: Away from the government. Is there a role for organized
Speaker 10: labor in this.
Speaker 9: Oh, one hundred percent. I mean we should be embracing
Speaker 9: labor mobilization. I mean it's bumpy, it does involve higher costs.
Speaker 9: If you're running a business, you're not delighted that your
Speaker 9: union is now animated. But first of all, it puts
Speaker 9: spending capacity in people's pockets, right, It boosts consumer power,
Speaker 9: which is good for all businesses. And it's simply more
Speaker 9: reliable if people aren't are at work not worried about
Speaker 9: their ability to put groceries on there.
Speaker 3: I was thinking about that when I read about precision
Speaker 3: scheduled railroading in the book, because those were union guys, right, right,
Speaker 3: But they had a pretty tough gig too, so.
Speaker 4: Well, some of them are union.
Speaker 3: So you wrote about people who missed medical appointments and funerals,
Speaker 3: and like, we're driving so far from their homes in
Speaker 3: that business were the unionized folks who were doing that
Speaker 3: in a much better position than the non unionized ones.
Speaker 7: I mean, that's a tough gig too.
Speaker 9: Look the unions, you know, we're ready to go on
Speaker 9: strike and couldn't go on strike because there's this law
Speaker 9: that says they have to basically get the president's permission
Speaker 9: to strike, and the president didn't grant that permission because
Speaker 9: it would have been a shock to the system. It
Speaker 9: would have uped inflation, and that wasn't something that Joe
Speaker 9: Biden wanted to happen on his watch. But even you know,
Speaker 9: this this powerful union that got right to the edge
Speaker 9: of strike, they couldn't get paid sick leave. You know,
Speaker 9: Biden gave it to them through the bully pulpit, and
Speaker 9: some of the companies then delivered a few days. But yes,
Speaker 9: I talked to people who were missing out. In one case,
Speaker 9: a guy who's who's infant, you know, needed cardiac surgery
Speaker 9: and he was told, sorry, pal, you know, we need
Speaker 9: you on the maintenance crew.
Speaker 4: You can't be home for that. And then he finally
Speaker 4: quit and fired off a letter, Yeah.
Speaker 1: Go ahead, no, but so much for like was it
Speaker 1: a few years ago, the business roundtable stakeholder like, think
Speaker 1: of all the stakeholders, including employees.
Speaker 4: That's my last book.
Speaker 1: We only have I know, twenty seconds left. Are we
Speaker 1: going to run out of things again? At some point?
Speaker 9: Yes, you know, talk to contractors about why they can't
Speaker 9: build more housing. It's part of why housing so unaffordable.
Speaker 1: This was so much fun. So appreciate it. Thank you
Speaker 1: so much, Peter Goodman, Global Economic Correspondent, New York Times,
Speaker 1: this new book, How the World Ran out of Everything?
Speaker 1: And then thanks to our Doug Prisner too, We really
Speaker 1: appreciate you coming in.
Speaker 2: Reading you you're listening to the Bloomberg Business Week Podcast.
Speaker 2: Listen live each weekday starting at two pm Eastern on
Speaker 2: Apple car Play and Android Auto with the Bloomberg Business App.
Speaker 2: You can also listen live on Amazon Alexa from our
Speaker 2: flagship New York station, Just say Alexa play Bloomberg eleven.
Speaker 1: Thirty plenty ahead in our second hour of the weekend
Speaker 1: edition of Bloomberg Business Week, including a check on the
Speaker 1: New York City luxury real estate market, and tim if
Speaker 1: you could believe it, most wealthy buyers they're paying for
Speaker 1: their new properties in cash.
Speaker 3: Yeah, I believe it. I bet you I mean, maybe
Speaker 3: it's no surprise considering that most film mortgage rates are
Speaker 3: still too high. Okay, So if a new condo maybe
Speaker 3: not in your sight. How about taking to the skies
Speaker 3: in your own private jet, Carol, what do.
Speaker 1: You think cut me in?
Speaker 3: Okay, the founder and the president of par Avian stops
Speaker 3: by for a look at the private aviation market.
Speaker 1: You know what they say, It's not the purchase, it's
Speaker 1: the upkey that's really troubling.
Speaker 7: All right.
Speaker 1: Also so excited. Bloomberg Food editor Kate Crater on this
Speaker 1: year's best restaurants in the US and around the world
Speaker 1: and tuna fishing in the Hampton's.
Speaker 3: Oh yeah, it's apparently a thing that's pretty cool.
Speaker 1: It's a story that apparently everyone keeps talking to her about.
Speaker 1: So we're going to get into it a little bit later.
Speaker 3: On First Up, This Hour. Every June nineteenth, now celebrated
Speaker 3: in the United States as June teenth. It's a day
Speaker 3: to commemorate the ending of slavery in the country, and
Speaker 3: despite it being celebrated as early as eighteen sixty six
Speaker 3: by freed slaves, it became a federal holiday just three
Speaker 3: years ago.
Speaker 1: The holiday helps shine a light on ways to address
Speaker 1: barriers experienced by underserved businesses, neighborhoods, and people. One big
Speaker 1: barrier often banking and the financial services sector. On that,
Speaker 1: we talked with Kevin Cohe he's chairman and CEO of
Speaker 1: one United Bank, the nation's largest black owned bank with
Speaker 1: a it's a more than six hundred and fifty million
Speaker 1: dollars and who is safe to say, very very positive
Speaker 1: on the outlook.
Speaker 11: There's never been the economic opportunity that exists today. Take
Speaker 11: one thing, artificial intelligence. That's going to change. That's that's
Speaker 11: going to change the world as we know it. It's
Speaker 11: going to change how businesses operate, to create new opportunities
Speaker 11: for business businesses that we never have had before. I
Speaker 11: believe sitting around worrying about small things that always exist.
Speaker 11: If you've been around at all, you've seen economic despite
Speaker 11: economic psycho so with interest rates up, interest rates down. Look, okay,
Speaker 11: those are just small things that need to be managed.
Speaker 11: But what you can't do is lose sight of where
Speaker 11: we are and the giganta core opportunity that we face
Speaker 11: as a country. Come on, we have artificial intelligence.
Speaker 1: Okay, well but but well, because we you have guys
Speaker 1: that rolled up out right AI tools and to help
Speaker 1: certainly your your client base. And I get it in
Speaker 1: terms of the ability, I guess what we're trying to.
Speaker 1: You know, we are so privileged here to sit here
Speaker 1: and have leaders like yourself come in, And I guess
Speaker 1: we always try to figure out when we are in
Speaker 1: environments where and you know, we're going to go back
Speaker 1: to something like interest rates, Like last year we thought
Speaker 1: there were gonna be a ton of cuts and then
Speaker 1: we've kind of totally rethought like our thinking around that,
Speaker 1: and what are the implications for investment decisions, what it
Speaker 1: costs to buy a home. We keep talking about like
Speaker 1: the American dream for so many Americans being not available
Speaker 1: because it's so expensive. So I guess you sad. You
Speaker 1: seem like it would be an optimistic person a lot,
Speaker 1: but you're optimists. So I'm just is there any like
Speaker 1: are all American consumers that you guys have a vantage
Speaker 1: point on and business is doing really well?
Speaker 11: Yes, it's that you have low unemployment just as a
Speaker 11: starting point things like buying homes. There's a affordability issue,
Speaker 11: but access capital is at a hall time high. I
Speaker 11: see in terms of looking at certainly black owned financial institutions.
Speaker 7: They've never been more prosperous.
Speaker 11: They never had so much capital, they've never had so
Speaker 11: much opportunity, They've never had the kind of opportunity we
Speaker 11: have to partner with Corporate America. I got like, JP
Speaker 11: Morgan is my partner, Okay, they just think about the
Speaker 11: implications of that of having a company of that magnitude
Speaker 11: who's focused and really seriously from Jamie Dimon. I came
Speaker 11: here to meet with Jamie Diamond, who actually will sit
Speaker 11: down with you and talked about how you're doing and
Speaker 11: what kind of things the JP Morgan could do to
Speaker 11: help you as a company to grow and prosper We've
Speaker 11: never had that kind of opportunity this post technology driven,
Speaker 11: post George Floyd environment.
Speaker 1: It's dramatically different, dramatically.
Speaker 3: Why do you think people are so pessimistic?
Speaker 4: Then?
Speaker 3: And we've talked about this on the program lately, but
Speaker 3: there was a Harris Pool a few weeks ago that
Speaker 3: they teamed up with The Guardian and they found that
Speaker 3: nearly and five Americans believe the US is in an
Speaker 3: economic recession, even though we're not. Forty nine percent believe
Speaker 3: the S and P five hundred is down for the
Speaker 3: year it's not even though it's not more than ten
Speaker 3: percent what you were optimistic, You are feeling prosperous. You
Speaker 3: say your customers are too. What are people getting wrong here?
Speaker 11: I think it's just part of the human condition. Is
Speaker 11: want to talk about your challenge?
Speaker 7: Is you face?
Speaker 11: I couldn't say it any better than you just said it. Okay,
Speaker 11: if you look at the actual facts, Okay, I'm talking
Speaker 11: about what's actually happening. And so if you look at
Speaker 11: if you look at where we are from a factual standpoint,
Speaker 11: it's clear that we've never had this opportunity that we
Speaker 11: have today. And I think the most important thing is
Speaker 11: for everyone to get focused on what's important, to take
Speaker 11: advantage of what's in front of you now, the opportunities
Speaker 11: the technology has brought to us to be able to
Speaker 11: deliver products on a worldwide basis.
Speaker 7: Okay, with one United Bank.
Speaker 11: It's in a position where our products now people are saying,
Speaker 11: have worldwide implications.
Speaker 7: Yeah, Now think about that.
Speaker 11: With a company from an urban community that can create
Speaker 11: a product that not only has national implications, but has
Speaker 11: worldwide implications. But we're in a position to create technology
Speaker 11: that allows you to not only participate in local economies,
Speaker 11: but regional, national, and international opportunities.
Speaker 7: We never had this before.
Speaker 1: Yeah, it's a game changers. I feel like we love
Speaker 1: you know, I want to go back for a second
Speaker 1: because when anybody whenever we bring up Jamie Diamond or
Speaker 1: whenever he's in a story or makes comments, it's always
Speaker 1: among our most read stories. So you you talk about,
Speaker 1: you know, conversations with Jamie and meeting with Jamie, you know,
Speaker 1: what is it that you like to talk to him about,
Speaker 1: and like how you even continue kind of the work
Speaker 1: that you guys are already doing.
Speaker 11: He's a financial okay, that's in a position and cares
Speaker 11: about people who cares about certainly cares about md I
Speaker 11: for the comb Minority Depository Institution, and it's willing to
Speaker 11: use this organization to support the growth and prosperity of
Speaker 11: this critical component of society. I mean, nobody's been doing that.
Speaker 11: I've been doing this long enough that I've seen.
Speaker 7: What is real and what's not real.
Speaker 11: In terms of corporate America's willingness to support the growth
Speaker 11: of other companies, it has never been higher than it
Speaker 11: is today.
Speaker 1: Is Jamie Dimon the exception or you're seeing it much
Speaker 1: more across companies in the financial industry.
Speaker 11: Honestly, he's just the best. They are. They are the
Speaker 11: best program, but they're not the It's not the only program.
Speaker 7: City Banks program is a beast.
Speaker 12: Okay, that's another Jane Frazier and what she's done with
Speaker 12: that company and the opportunities they create for MDIs is
Speaker 12: unpressed taking the time to bring their top people together
Speaker 12: with MDIs so we can learn from them and understand
Speaker 12: what kind of products and services that you can offer.
Speaker 11: That we've never been offered before. They care about they
Speaker 11: care about what's going on, and they're devoting the resources
Speaker 11: of their organizations to helping develop minority communities. You have
Speaker 11: those large corporations actually caring about what's happening in the
Speaker 11: minority communities across the country.
Speaker 3: Just explain to listeners and viewers right now who might
Speaker 3: think that, wait a second, wouldn't you know one United
Speaker 3: be a competitor to JP Morgan or to City thirty seconds?
Speaker 3: Explain why not?
Speaker 7: We have?
Speaker 11: We have different products that we served. One United Bank
Speaker 11: deals with people. We deal with people problems. You're driving
Speaker 11: to work, your truck's broke. It's going to cost six
Speaker 11: hundred dollars. You don't have six hundred dollars you need
Speaker 11: to borrow. You need an emergency small balance, short term
Speaker 11: loan in order to solve your problem. That's the one
Speaker 11: United Bank product. You can't get a checking account because
Speaker 11: there's some problem that occurred to your youth, that's the
Speaker 11: one United Bank product. We have different products and serve
Speaker 11: different types of customers.
Speaker 3: We're gonna get to Juneteenth in just a minute, but
Speaker 3: I just want you to explain the asset light or
Speaker 3: the branch light model approach to banking, because I think
Speaker 3: people would be familiar with You have some branches in
Speaker 3: some states, but you also have a huge digital presence,
Speaker 3: and that's mostly where the.
Speaker 1: Group is actually nice.
Speaker 7: Yeah, yeah, exactly.
Speaker 11: Well, okay, we're in a world where now the way
Speaker 11: people expect to receive their financial services, they expect it
Speaker 11: to be with them at all times.
Speaker 7: That those things, those cell phones things.
Speaker 11: People are expecting to have access to banking services seven
Speaker 11: days of week, twenty four hours a day, and to
Speaker 11: be able to spend.
Speaker 7: Money all around the world.
Speaker 11: They they're not going to drive down street and around
Speaker 11: the block and stand in line, no matter how good
Speaker 11: your donuts are. So so one is just pure convenience.
Speaker 11: So we're shifting from this community banking model where you
Speaker 11: had these branches and people would go in them and
Speaker 11: know the tailers and all that, to this technology driven
Speaker 11: model where there's expectations are much higher in the two ways,
Speaker 11: the convenience of getting access to the services, but also
Speaker 11: the products in themselves. You're talking banks are moving from
Speaker 11: an environment where you had what they call utilitarian products.
Speaker 7: That's what a checking or a savings account is. It
Speaker 7: allows you to perform some kind of function.
Speaker 11: But when you look at products like Vice one, technology
Speaker 11: driven products, they actually help you to make money. You
Speaker 11: understand the difference something that facilitates you spend any money
Speaker 11: versus something that's actually giving you information that's gonna make
Speaker 11: you more money. So this is a whole new generation
Speaker 11: of banking products that service unique needs that are outside
Speaker 11: the banking system. Here again, banks, I've never been nothing
Speaker 11: but a banker my whole life, so you know it's
Speaker 11: within that kind of type. But banks serve very different needs. Okay,
Speaker 11: a bank is a corporation that is this to make
Speaker 11: as much money as it can. Now, however, where that
Speaker 11: leads this whole area of the problems and challenges people have, right,
Speaker 11: and what people's needs are, and technology allows you to
Speaker 11: create products to service the people's needs.
Speaker 1: What would you say, though, the importance of you know,
Speaker 1: we've kind of really increasingly gotten away from the community
Speaker 1: bank that understands the community, right, because a banker from
Speaker 1: a high might not understand a community and its needs specifically,
Speaker 1: and something that from up high might look like a risk.
Speaker 1: If you understand the community, you would say, not so much.
Speaker 1: So do we lose something though, Well, that's.
Speaker 7: The beauty of technology.
Speaker 13: Now we don't.
Speaker 7: It's not even close.
Speaker 11: Okay, what data can do, What actual data can do
Speaker 11: as opposed to what you might think, what your hunches,
Speaker 11: the intuition that you have about things. World has advanced
Speaker 11: from that, like I think I understand the need of
Speaker 11: this person to being able to actually understand the needs.
Speaker 1: You would say, the data would be more inclusive.
Speaker 11: I'm saying the data is more important. That we shouldn't
Speaker 11: rely on hunches and intuition and making decisions. That's what
Speaker 11: creates a lot of the problems because that's where biases come.
Speaker 7: But that's where bias come.
Speaker 11: From because people think they understand things that they actually
Speaker 11: don't understand. If you think you understand that the data
Speaker 11: will tell you the real answer. And so once again,
Speaker 11: as an advancement in our ability to make decisions for
Speaker 11: one United that's one of the big things we do.
Speaker 11: We rely on the actual data related to an individual
Speaker 11: to make to make the determination of whether we can
Speaker 11: issue credit about them or not, not some intuition about
Speaker 11: what we think about some broad basics.
Speaker 3: So that doesn't include a credit score. It does include
Speaker 3: a credit score, not in our.
Speaker 11: Case, we use much deeper information than credit scores. Credit
Speaker 11: scores is once again it's stated technology.
Speaker 7: I hate to put it like.
Speaker 11: That, but but there you have their credit models that
Speaker 11: you can use. The companies like us use that allow
Speaker 11: you to be able to evaluate people that aren't in
Speaker 11: your immediate physical proximity. That you can you can do
Speaker 11: business with people on a nation wide basis because you
Speaker 11: have the foundation for being able to understand that individual
Speaker 11: and their performance quickly and and to be able to
Speaker 11: issue credit, as an example, on a nation wide basis,
Speaker 11: as opposed to only being around the corner because you
Speaker 11: think you know how a particular group performs.
Speaker 1: That's an interesting way of thinking about because we've talked
Speaker 1: so much about the biasness and data. So it's interesting
Speaker 1: to hear you say that it's that it's a better,
Speaker 1: potentially a better take at it. We've got about three
Speaker 1: minutes left and we have had a great conversation off
Speaker 1: air with you of talking about Juneteenth, the day that
Speaker 1: we're coming up on our second year or so third
Speaker 1: year of recognizing it. But the point is that a
Speaker 1: lot of people don't even know what it's still about exactly.
Speaker 11: That's the most important thing is to realize Juneteenth is
Speaker 11: a federal holiday. It's not a black people holiday. It's
Speaker 11: a celebration for a It's celebrating one of the best
Speaker 11: decisions that America ever made, which was to free the slaves.
Speaker 11: That helps all of us to move forward. It gives
Speaker 11: us a massive social dividend, if you will, because it's
Speaker 11: slavery institution like that hurts both the person who is
Speaker 11: a slave, but it also equally hurts the person who's
Speaker 11: enslaving the person. Nobody wants to live in a world
Speaker 11: that where people are being cold blooded and brutal towards
Speaker 11: other people. You can't have any position of leadership acting
Speaker 11: in that way. So with that decision, that single decision
Speaker 11: to free the slaves is yielding this massive socialist and
Speaker 11: it's going it heals this massive economic benefit.
Speaker 7: Let's not forget. To end slavery, we had to have.
Speaker 11: Our country had slavery as the backbone of its economy.
Speaker 11: We had to recognize that we could get rid of
Speaker 11: that and create more economic value by getting rid of
Speaker 11: this institution that was so important at that time. And
Speaker 11: that's where we are. Of course, we've been slowed down
Speaker 11: because we went from slavery to Jim Crow. But now
Speaker 11: as we move away from Jim Crow and work on
Speaker 11: solving the last big piece of this, which is financial literacy,
Speaker 11: because if you look at what's happened to our society,
Speaker 11: we now bifurcate. Our society used to be bifurcated based
Speaker 11: on things like race and religion and that kind of
Speaker 11: stuff that we grew up with. It's now bifurcated based
Speaker 11: on the halves are the people who are financially literate
Speaker 11: and have nots are.
Speaker 7: The people who don't.
Speaker 11: So we have to work on this issue of making
Speaker 11: sure that all of our society is financially literate.
Speaker 7: Here again, let's not forget.
Speaker 11: We live in a society that forgot to teach financial literacy.
Speaker 1: So we only have about forty seconds left. We've talked
Speaker 1: about financial literacy. I feel like I've been doing this
Speaker 1: a long time. Tim's been doing this forever. How do
Speaker 1: we do it? How do we do it? And forgive
Speaker 1: us because we only have about thirty forty seconds?
Speaker 11: Make financial literacy a mandatory requirement to graduate from high school.
Speaker 11: Just start, just start with that. You have to take
Speaker 11: a significant course of study in order to graduate from
Speaker 11: high school.
Speaker 4: Period.
Speaker 11: And what's so important about that is your whole life.
Speaker 11: With all due respect, you're going to solve very few
Speaker 11: chemistry problems, very few biology problems, but you're gonna but
Speaker 11: you're gonna be solvy financial problems every single day. So
Speaker 11: that's the bare minimum we could do is make it
Speaker 11: an mandatory requirement. And we have to get the corporations
Speaker 11: involved because we have to teach the teachers in order
Speaker 11: to be able to feel min that mandate.
Speaker 1: Amen, We're in, We're in. We totally a great come
Speaker 1: back again. We would love.
Speaker 7: Please help me back. I we would love the opportunity.
Speaker 7: I enjoy Kevin hanging out with you.
Speaker 4: Guys.
Speaker 1: We enjoyed having you hang with us. Kevin Cohey, Chairman
Speaker 1: and CEO of One United Bank.
Speaker 2: Right here on Bloomberg, you're listening to the Bloomberg Business
Speaker 2: Week podcast. Catch us live weekday afternoons from two to
Speaker 2: five pm Eastern. Listen on Apple car Play and and
Speaker 2: brout Auto with a Bloomberg Business app, or watch us
Speaker 2: Live on YouTube.
Speaker 1: Financial literacy is a crucial life skill, and ever more
Speaker 1: so for disadvantaged adolescence. Tackling that an organization that aims
Speaker 1: to invest in young people was founded about twenty five
Speaker 1: years ago by Grammy Award winning.
Speaker 3: Usher Yes that Usher is you we're talking about, and
Speaker 3: his mom, Janetta Patten. They created the Usher's New Look
Speaker 3: Foundation as a way to help teens from tough backgrounds
Speaker 3: achieve financial success. Bloomberg News Cross Asset reporter Emily Grafeo
Speaker 3: and I spoke with President and CEO of NL Karsha.
Speaker 14: More in nineteen ninety nine. Us Sure was thinking, how
Speaker 14: can I help young people get a new look on life?
Speaker 14: He and his mom they actually sat in the courtroom
Speaker 14: of Judge Glinda Hatchett and observed a court proceeding, a
Speaker 14: juvenile proceeding, and they said, these young people, their leaders,
Speaker 14: they just need mentors, they need some support, they need exposure,
Speaker 14: and so he created Usher's New Look to be able
Speaker 14: to provide that and give youth a new look on
Speaker 14: life through workforce development, but also exploring their spark, their passion.
Speaker 14: He found his passion early on and knew that that
Speaker 14: changed his life, and so to be able to provide
Speaker 14: that to young people twenty five years later is exactly
Speaker 14: what we're doing.
Speaker 3: I want to share with people information about the program
Speaker 3: because I think it's unique in several ways. One is
Speaker 3: that it's a decade long program, but also that it
Speaker 3: starts essentially when these kids are teenagers, so it starts
Speaker 3: relatively late. Take us through what exactly happens to these
Speaker 3: teenagers over that ten year period.
Speaker 14: Right, So from fort teen to twenty four, our young
Speaker 14: people can participate in Usher's New Look, and we have
Speaker 14: standard bearing comprehensive programming that starts with one day training
Speaker 14: that we host in schools. And the unique thing about
Speaker 14: that is that it's peer to peers. So our post
Speaker 14: secondary students are standing in front of their peers fourteen
Speaker 14: year old and teaching them about leadership, about business, about
Speaker 14: financial literacy, and their spark. We also have an after
Speaker 14: school program for high school students in Atlanta as well
Speaker 14: as in New York, where they do a deep dive
Speaker 14: into our four pillars talent, education, career, and service. We
Speaker 14: believe those four pillars help to develop global, passion driven leaders.
Speaker 14: And then once those students graduate high school, which we
Speaker 14: have one hundred percent high school graduation rate for students
Speaker 14: who participate, they go on to post secondary and we
Speaker 14: support them with transition into adulthood by teaching them executive
Speaker 14: function skills but also connecting them with companies, internships, and
Speaker 14: learning about life skills that they need to be amazing
Speaker 14: citizens that they are.
Speaker 15: It's interesting that you start in middle school. Can you
Speaker 15: talk a little bit about, at least for the youngest
Speaker 15: kids in the program, what are the top resources that
Speaker 15: they need right now?
Speaker 14: The top resources that they need, And we just did
Speaker 14: a study actually last year with young people, what do
Speaker 14: you feel is the most prevalent issues facing you and
Speaker 14: your peers? And those top things that came out right
Speaker 14: now are mental health support and strategies to help them
Speaker 14: cope with those things. As we know, we have come
Speaker 14: out of a global pandemic and so that has changed
Speaker 14: a bit. But also learning about financial literacy and exposure
Speaker 14: to various careers. You know, if you can't see it,
Speaker 14: you can't be it, is what we say, and so
Speaker 14: being able to show them various careers where they can
Speaker 14: use their skills and talents is important as well.
Speaker 3: Why is fourteen to twenty four the right age to
Speaker 3: focus on? I was talking with Elizabeth Sedrin, our producer,
Speaker 3: about this earlier and the idea there are a lot
Speaker 3: of nonprofits that focus on essentially college to cradle, right
Speaker 3: the idea are cradle to college excuse me, the idea
Speaker 3: of starting very young and going to college age. Why
Speaker 3: focus on fourteen to twenty four.
Speaker 14: That's the age where they're starting to increase their future orientation.
Speaker 14: They're understanding their you know, their agency, and developing the
Speaker 14: life that they want at that time, and so we're
Speaker 14: able to share and embark upon the in part upon them,
Speaker 14: the skills and strategies that they need to be successful.
Speaker 3: Do you ever get any pushbacks from folks who say
Speaker 3: that's too late, we need programs earlier.
Speaker 14: You know what, No, there are forty two million young
Speaker 14: people here in the United States, and so there are
Speaker 14: organizations that focus on younger and we happen to focus
Speaker 14: on that fourteen to twenty four. It's not a silver bullet,
Speaker 14: it's not just one year, but we stay with them
Speaker 14: for the entire time. As you notice, fourteen to twenty four.
Speaker 16: It's intern season.
Speaker 3: Tim, I'm wonderful I saw I came in yesterday morning
Speaker 3: and said, welcome interns.
Speaker 16: There's a lot of interns.
Speaker 15: There's a lot of kind of early career energy in
Speaker 15: the building right now. Yes, you know, what kind of
Speaker 15: resources are you giving to those older I guess students
Speaker 15: in early career people in the program, what exactly are
Speaker 15: they looking for?
Speaker 14: So we partner with various private and public sector entities
Speaker 14: to help do resume reviews for the students. They do
Speaker 14: mock interviews, they learn about different careers that are out there.
Speaker 14: They also learn about the internship process. You know, we
Speaker 14: don't want to assume that they know exactly how that works,
Speaker 14: and so we start teaching them from the time that
Speaker 14: they are in high school eleventh grade through college what
Speaker 14: they need to do to be ready, but also providing
Speaker 14: them with the skills that they need, especially when you're
Speaker 14: talking about work of now in the work of the future.
Speaker 14: So we have a partnership right now with IBM, where
Speaker 14: our students are having access to IBM skills built so
Speaker 14: that they can learn more about artificial intelligence, but also
Speaker 14: career ready skills so that they're ready to not just
Speaker 14: do the careers of the future, but also lead.
Speaker 3: We're Bloomberg. We love numbers. Yes, you mentioned one hundred
Speaker 3: percent graduation rate, which is just incredible for any program.
Speaker 3: I don't care what program we're talking about here, but
Speaker 3: one hundred percent anything is amazing. What are some other
Speaker 3: metrics that you use as kids get closer to aging
Speaker 3: out of the program, I can't call them kids, actually
Speaker 3: as their young adults, young adults get closer to aging
Speaker 3: out of the program. That is a metric for success, Like,
Speaker 3: how do you know this is working?
Speaker 8: Right?
Speaker 14: So we work very closely with evaluators. We have a
Speaker 14: logic model that focuses on our objectives and what we're
Speaker 14: looking for is change in behaviors and attitudes. So we're
Speaker 14: looking to the fact do they have a physical resume,
Speaker 14: are they ready to go to work? But also do
Speaker 14: they have a change thought about their impact and what
Speaker 14: they can do in their community, how they can lead
Speaker 14: in their community, as well as the skills that they
Speaker 14: have gained do they have a bank account, Do they
Speaker 14: understand what savings and personal budgeting means for them? And
Speaker 14: so those are some of the objectives that we have
Speaker 14: as well.
Speaker 3: We talk about this all the time, these personal finance skills.
Speaker 3: This is not taught in school, right, You only know
Speaker 3: about this stuff if you learn from family, friends, mentors.
Speaker 7: That's right.
Speaker 3: So you leave college or leave high school not knowing
Speaker 3: simple things that look simple to a lot of people
Speaker 3: but are actually kind of tough to do on your own, exactly.
Speaker 14: And we find ourselves busting a lot of myths that
Speaker 14: they may have around credit, around saving, around just earning
Speaker 14: potential and those sorts of things. And what we find
Speaker 14: is that again through our evaluations, that financial literacy scores
Speaker 14: the highest on all of our training. It's what our
Speaker 14: young people say, I didn't know much about that at all,
Speaker 14: and now I know a lot, and I'm able to
Speaker 14: share that with my peers as well as my family.
Speaker 7: So you're right.
Speaker 14: I mean, we don't talk about it a lot. It's
Speaker 14: pretty taboo, but they're learning and they're able to go
Speaker 14: and share and be ambassadors with their community.
Speaker 15: It's really empowering and that's a I'm wondering if you
Speaker 15: have any other examples of kind of a statistic like that,
Speaker 15: so we could end on a high note.
Speaker 7: Absolutely.
Speaker 14: So when you talk about first generation college students about
Speaker 14: fifty one percent in the United States, and we are
Speaker 14: now at about eighty percent of our students and getting
Speaker 14: them on to go on to career, we end up
Speaker 14: with about ninety percent of our students going on to college.
Speaker 14: And so when you have eighty one percent first gen
Speaker 14: and them are going to college and graduating within five years,
Speaker 14: that is something that we are very, very proud of.
Speaker 3: It is a really cool program. Thank you so much
Speaker 3: for joining us during your visit to New York. That's
Speaker 3: Karsha More, President and CEO of Usher's New Look. It
Speaker 3: is the now nonprofit that twenty five years ago to singer, songwriter, dancer,
Speaker 3: superstar Usher Raymon the Fourth started with his own mall.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Listen live
Speaker 2: each weekday starting at two pm Eastern on applecar Play
Speaker 2: and Androyd Auto with the Bloomberg Business App. You can
Speaker 2: also listen live on Amazon Alexa from our flagship New
Speaker 2: York station, Just Say Alexa Play Bloomberg eleven thirty.
Speaker 1: You may have missed this last month. Luxury home prices
Speaker 1: and select Asian cities are soaring, bucking a downward trend
Speaker 1: in more established markets, including New York and London. And
Speaker 1: according to real estate consultancy Night Frank, prime property prices
Speaker 1: defined as the top five percent of the market gift
Speaker 1: fell more than two percent in New York and London
Speaker 1: in the first quarter compared to the same period one
Speaker 1: year ago.
Speaker 3: And that's been prompting wealthy buyers to pull the trigger
Speaker 3: when it comes to a new home. So let's get
Speaker 3: a check on the luxury market with Louise Phillips Forbes
Speaker 3: real estate broker with Brown Harris Stevens here in New
Speaker 3: York City. She's been in the business for wow more
Speaker 3: than three decades, and she sold more than five point
Speaker 3: five billion dollars worth of real estate, specializing in luxury
Speaker 3: residential sales and development projects.
Speaker 17: I think individuals that a month ago they might have
Speaker 17: pulled the trigger that they are still contemplating because I
Speaker 17: think remember at the end of the year, we were
Speaker 17: expecting five great reductions and we haven't seen really any
Speaker 17: of those. In fact, we've had conversations about it coming up.
Speaker 17: So for some of those people it means holding off. However,
Speaker 17: what's right for one person's not always right for another.
Speaker 3: What's surprising for me to hear from you about this
Speaker 3: quarter is this is supposed to be the busy time
Speaker 3: of year, I mean spring ahead of summer, and you
Speaker 3: had a great first quarter.
Speaker 17: I had an record, I mean almost one hundred million
Speaker 17: in sales.
Speaker 3: But that's the most as quiet time, right, No.
Speaker 17: Not, as the cycles are off because of COVID number one,
Speaker 17: number two. You have to realize that people have been
Speaker 17: holding off what decisions that they make since twenty nineteen.
Speaker 1: For a minute, so is that why people finally pulled
Speaker 1: the trigger? Yes?
Speaker 17: And I think I believe my psychologically, I think that
Speaker 17: people believed that the that the interest rates were going
Speaker 17: to follow.
Speaker 1: How many of your buyers are buying with a mortgage versus.
Speaker 17: Very few right now, ironically of the thirty two transactions,
Speaker 17: so the average deal is not first quarter. The average
Speaker 17: deal is not thirty eight million. The average deal is
Speaker 17: you know, three, six, five, two, six hundred.
Speaker 1: Thousand mortgages are mostly cash, all cash.
Speaker 17: All but seven all seven of your sixty three percent
Speaker 17: across my business was a little higher, but across the
Speaker 17: market was sixty three in the first quarter, so percent.
Speaker 1: Why did they pull the trigger?
Speaker 9: Then?
Speaker 7: Then?
Speaker 1: Is it just that they were so for them, the
Speaker 1: rate environment wasn't so much. Wish is always king. It
Speaker 1: is always king.
Speaker 17: And it also You've got to remember some of these
Speaker 17: sellers have been waiting for nine months, twelve months.
Speaker 1: But that's what I'm saying. So it's not like, Okay,
Speaker 1: they thought maybe it had nothing to do with the
Speaker 1: rate environment. I think they were just it held off.
Speaker 17: It's a negotiating tactic. My experience is that if I
Speaker 17: have three offers on a piece of property and one's
Speaker 17: a mortgage, and I'm able to push the cash person
Speaker 17: or even choose to take less because.
Speaker 1: They're cash, it was seller driven. It's seller do them.
Speaker 17: Having a choice was very powerful and important and new.
Speaker 17: They hadn't experienced that in a while.
Speaker 3: Can you talk about I think this is unique to
Speaker 3: New York because there are so many cash deals, but
Speaker 3: can you talk a little bit about why a cash
Speaker 3: deal is so much more appealing to you than to
Speaker 3: deal with financing that could come in at a higher price.
Speaker 1: Not seeing the reality shows where they're like not it's
Speaker 1: a cash down deal. It's even lower and you're closing
Speaker 1: next tuesday and they're closing next tuesday. Done like it's fascinating.
Speaker 17: Yes, yes, and you have like eleven inch heels on
Speaker 17: while you're doing it.
Speaker 1: I know, I know they look perfect. I know it's
Speaker 1: like a little unreal. But anyway, so.
Speaker 17: No, listen, the preference becomes about cleanliness, meaning you know,
Speaker 17: you go to contract and then you don't have an appraisal.
Speaker 17: How would you feel if you had five bids on
Speaker 17: a piece of property, which, by the way, this happened
Speaker 17: all through the new year for myself, right, and then
Speaker 17: you it doesn't appraise. You have no contingency. But how
Speaker 17: do you feel as a buyer? How does a seller feel?
Speaker 17: Does somebody walk?
Speaker 7: So it's just.
Speaker 17: Cleaner if you have the luxury of that choice. Otherwise
Speaker 17: we are it's our job to be able to make
Speaker 17: things appraise.
Speaker 1: How do you then in your world where you're dealing
Speaker 1: obviously where some people who are listening are being like,
Speaker 1: I'm going to throw up because it's like five six
Speaker 1: million dollars all cash, Like it's not a slice of
Speaker 1: total American life. It is a slice, a small slice.
Speaker 1: Having said that, What does it tell you about the
Speaker 1: broader economic environment in a world where we Louise have
Speaker 1: so many conflicting data points.
Speaker 17: Yes, and I don't think that's going to change for
Speaker 17: a while, Carol, Okay, I mean listen, think just remember
Speaker 17: that when interest rates are high, the rental market is high.
Speaker 6: I that's true.
Speaker 17: Have somebody relocating here who got into the New York
Speaker 17: Academy of Arts and they are relocating here, and we
Speaker 17: were looking for nine thousand dollars rental two bedroom. The
Speaker 17: same apartment two years ago went for fifty eight hundred
Speaker 17: and it came on for seventy nine hundred and it
Speaker 17: went for.
Speaker 1: Eighty three in two days.
Speaker 17: So rent that is a forty seven percent increase in
Speaker 17: two years because the cost of money is more expensive.
Speaker 17: And that so when interest rates are up, buyers can't.
Speaker 17: They get on the sidelines and they rent and they
Speaker 17: are affected.
Speaker 3: So so you're saying that people who are not buying
Speaker 3: are driving up the rental market.
Speaker 1: Yes, but you're also safely it's a tougher it's environment
Speaker 1: and says something more broadly macro.
Speaker 17: Right, I'm talking about for the lower end of the market. Right,
Speaker 17: So I have somebody who's contemplating selling a townhouse for
Speaker 17: six and a half million dollars and they're like, the
Speaker 17: cost of my capital, I can rent something for fifteen thousand.
Speaker 17: When he goes to look at what you can pay
Speaker 17: for fifteen thousand dollars, he's like, I'm going to wait
Speaker 17: a year, So to wait to sell, yes, because interesting,
Speaker 17: it's sometimes some of this is a luxury.
Speaker 1: It is a luxury.
Speaker 17: And again I ask the same question, whether it's a
Speaker 17: twenty million dollar buyer or a six hundred thousand dollars buyer,
Speaker 17: do you want to pay your own mortgage or do
Speaker 17: you want to pay somebody else's mortgage?
Speaker 8: Because that's what it is.
Speaker 17: I do think that you can try to time everything,
Speaker 17: but it's really about understanding what I mean. I have
Speaker 17: people that are borrowing money from their grandmother who going
Speaker 17: to inherit ninety two years old, and he's like, I'd
Speaker 17: love to be able to use it while you're alive,
Speaker 17: and that is what they did. So people are getting creative,
Speaker 17: and it is what my recommendation is is whether you're
Speaker 17: borrowing from your sister, you're co owning with your parents,
Speaker 17: you know, I mean, I'm thinking about I have a
Speaker 17: twenty a son that's gonna be twenty one years old,
Speaker 17: who's looking at real estate every day, like I want
Speaker 17: to buy my own apartment. He wants to buy an
Speaker 17: apartment where he can have a roommate. He doesn't think
Speaker 17: he can afford to live by himself.
Speaker 1: Yeah. One last question, does what goes on in office?
Speaker 1: Does it matter? Does it impact you at all? In
Speaker 1: terms of certain neighborhoods are not really.
Speaker 17: Certainly excuse people's They're more cnics that are in that field.
Speaker 17: I mean a lot of my business or commercial brokers
Speaker 17: that I do business with, meaning helping them personally with
Speaker 17: their homes.
Speaker 1: Yeah, and you know, they're they're feeling squeezed.
Speaker 17: They're like, oh my god, how are you holding up?
Speaker 17: We is I'm like, okay, yeah, I don't even want
Speaker 17: to tell them.
Speaker 1: So because they are feeling so squeezed.
Speaker 6: Yees.
Speaker 17: I mean the New York Times that there's a building
Speaker 17: in Time Square that just had a short sale, like
Speaker 17: I don't know, was it sixty two percent?
Speaker 8: Yeah.
Speaker 17: This is the way that that commercial market works, and
Speaker 17: the way lending works, and the way that they use
Speaker 17: the leverage. That is the science of that business, and
Speaker 17: that is always going to find cycles. It's going to
Speaker 17: have cycles, whether it's fifteen years or seven years or
Speaker 17: four years.
Speaker 3: That was Louis Phillips Forbes, real estate broker with Brown
Speaker 3: Harris Stevens. Following our conversation, a report from the appraiser
Speaker 3: Miller Samuel noting Manhattan apartment runs unexpectedly slipped in May,
Speaker 3: a sideways move for the market at the start of
Speaker 3: one of its typically busiest.
Speaker 1: Seasons and tim Speaking of seasons and cycles, we've seen
Speaker 1: private jet ownership go through a few out of the pandemic,
Speaker 1: a surge during the crisis, followed by receiving pandemic driven demand.
Speaker 1: So for what's happening right now, we turn to an
Speaker 1: industry veteran with over thirty five years of aircraft sales experience,
Speaker 1: Janin Janarelli, is the presidency apart.
Speaker 18: Of the business jet market does not like surprises, It
Speaker 18: does not like instability, it doesn't like anything to upset
Speaker 18: the apple cart, and it does happen every four years regardless.
Speaker 18: I wish I could tell you why. It's just that
Speaker 18: I can tell you that the people in the trade
Speaker 18: plan for it.
Speaker 3: So how is it manifesting in your business right now?
Speaker 13: Oh, it's much slower than it was two years ago.
Speaker 18: And even in comparison to last year, I can see
Speaker 18: that the buyers are being much more cautious before they
Speaker 18: actually open their pursues. They're spending a great deal of
Speaker 18: time reviewing the asset, and sometimes they get really close
Speaker 18: and then they back themselves up and we just have
Speaker 18: to wait them out.
Speaker 1: I don't understand because we, you know, fairly regularly talk
Speaker 1: about the wealthier getting wealthy, and I'm not just talking
Speaker 1: about billionaires, but I'm just talking about in general, and
Speaker 1: so I'm trying to understand. Remind us who Janine in
Speaker 1: general is your typical buyer.
Speaker 18: The classic buyer is an entrepreneur made they've built their business,
Speaker 18: they sold their business.
Speaker 13: They're independently wealthy. That's the thing. Both of my personal business.
Speaker 13: A portion of that is also corporate.
Speaker 18: The corporate's perhaps a bit more consistent because they look
Speaker 18: to turn their aircraft over every five to seven years
Speaker 18: because they want to have warranty coverage for the aircraft.
Speaker 18: They don't want any surprises either. But that comes more
Speaker 18: from the operational side.
Speaker 1: And is it American buyers or global buyers? Like I
Speaker 1: love any kind of geographic color you can give us.
Speaker 18: Well, this is I would say more specific to the
Speaker 18: United States. I mean, we're the largest marketplace in the
Speaker 18: world for business aircraft, and the drivers for why people
Speaker 18: acquire aircraft here are a little bit different than the
Speaker 18: rest of the world. We also are one of the
Speaker 18: most friendly environment for operating aircraft privately, and one of
Speaker 18: the big reasons for that is the airspace. The available airspace,
Speaker 18: the ability to fly direct from point to point. The
Speaker 18: airspace is so tightly congested. Let's just take Europe for example,
Speaker 18: or regulated that you have to get a slot for
Speaker 18: arrivals and departures, and most of the airport, particularly at
Speaker 18: very busy times of the year. It's a deterrent to
Speaker 18: operating your aircraft freely. And we are the essence of
Speaker 18: freedom here in the United States.
Speaker 3: Well, in terms of you talked about the typical client,
Speaker 3: you have the entrepreneur person who sells their business, is
Speaker 3: self made, is independently wealthy. What do they then go
Speaker 3: do with that aircraft? The question that I have is
Speaker 3: are they one hundred percent flying on it themselves or
Speaker 3: are they leasing it out or chartering it to other
Speaker 3: folks when they're not using it.
Speaker 18: So I think the perspective that most of the buyers
Speaker 18: today take is what's the easiest way to place the
Speaker 18: aircraft into service and continue that service, And generally that
Speaker 18: would be a management company as opposed to an independent
Speaker 18: flight department. And when you're with the management company, there's
Speaker 18: usually the added benefit of saying, would you like to
Speaker 18: charter the airplane? And I would say that the last
Speaker 18: majority of people who have aircraft undermanaged will certainly agree
Speaker 18: to also chartering.
Speaker 3: Wow, Okay, give us the price range for a small
Speaker 3: to mid size versus the super heavies.
Speaker 18: So the small you're probably looking at three to eight million,
Speaker 18: maybe a little bit more, the newer the aircraft, the
Speaker 18: super mid size, depending on the age of the airplane,
Speaker 18: anywhere from seven to.
Speaker 13: Fifteen, sixteen, seventeen million, and then the large category.
Speaker 18: Again, age is a big influencer in terms of the
Speaker 18: price point.
Speaker 13: But let's talk about.
Speaker 18: Newer aircraft, newer being fifteen years or newer, and we're
Speaker 18: probably twenty million and up.
Speaker 3: That was Janinionarelli, president and CEO of par Avion.
Speaker 1: Still ahead on Bloomberg Business Week. What do a Thai
Speaker 1: restaurant in Portland, Oregon A UK restaurant that grows its
Speaker 1: mushrooms in a closet and a Spanish restaurant that sells
Speaker 1: seafood surrounded by dry ice all have in common. I
Speaker 1: want to go there.
Speaker 3: That's what they think I was going to say. I can.
Speaker 3: I can name several things. I'm not going to give
Speaker 3: it all away. Also, why oh why are Wall Street Bros.
Speaker 3: Leaving the trading desks maybe a little early on Fridays
Speaker 3: and going out to the Hamptons for a little bit
Speaker 3: of tuna fishing.
Speaker 1: Bloomberg pursuits in our own cake crater. They're coming up next.
Speaker 1: This is Bloomberg.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Listen live
Speaker 2: each weekday starting at two pm Eastern ont applecar Play
Speaker 2: and Android Auto with the Bloomberg Business App. You can
Speaker 2: also listen live on Amazon Alexa from our flagship New
Speaker 2: York station, Just say Alexa play Bloomberg eleven thirty.
Speaker 1: So we absolutely love, love love talking food here on
Speaker 1: Bloomberg Business Week, and Tim love love loves eating food.
Speaker 1: He's often eating during broadcasts, which is what.
Speaker 2: I know.
Speaker 1: I always got to give our as secrets. This is
Speaker 1: why a batch of stories on the best places to
Speaker 1: eat in the US, in London, really around the globe
Speaker 1: was something we definitely wanted to sing our teeth into,
Speaker 1: literally wanted to sing our teeth into, to.
Speaker 3: Be fair, And we have the perfect guest here in
Speaker 3: our studio to break it all down. She's usually based
Speaker 3: in London. Lucky for us, she's back in a New
Speaker 3: York so we can catch up with her in at person.
Speaker 3: We welcome back Bloomberg Pursuits Food editor Kate Creator.
Speaker 16: Hi, Hi, Hi, guys, by how are you?
Speaker 19: I am so happy to see you. You guys are
Speaker 19: a site for sore eyes.
Speaker 16: That's what I want to say.
Speaker 3: Ah, well, we are so happy to see you. And
Speaker 3: you've been so busy in London, especially this time of
Speaker 3: year when we're getting best restaurant after best restaurant after
Speaker 3: best restaurant, And that's really where we want to start
Speaker 3: because the one in the UK that was ranked as
Speaker 3: the best restaurant has some really unique qualities.
Speaker 19: In fact, it does it has It has something very
Speaker 19: significant happening in the dining room, which is that they
Speaker 19: grow mushrooms in a glass walled cabinet and then that's
Speaker 19: a dish that's featured on their menu a restaurant called
Speaker 19: the Ledbury one best restaurant in the UK in the
Speaker 19: National Restaurant Awards that were just announced.
Speaker 3: So is the idea here that these mushrooms can grow
Speaker 3: year round? Is that why they're done on display? Or
Speaker 3: is it all about just the patrons actually seeing where
Speaker 3: this food comes from. Is a little bit of a novelty.
Speaker 7: What is it?
Speaker 16: It's a super novelty. I mean it speaks.
Speaker 19: It works on so many levels because you know, if
Speaker 19: you've been to a good New York City steakhouse, you
Speaker 19: can also you can often see the steaks these like
Speaker 19: giant hunks of meat and right there in the locker,
Speaker 19: right hanging in the locker, and so here they're like, no,
Speaker 19: let's put mushrooms front and center, and it's.
Speaker 16: Easy to grow.
Speaker 19: There's actually all these like come Christmas time, if you
Speaker 19: need like a fun gift to give somebody who's got
Speaker 19: a little diy thing going on, there's all these like
Speaker 19: do it yourself mushroom kids. But they grow some really
Speaker 19: beautiful looking mushrooms, like these lions made which look like
Speaker 19: they're from another planet. So it's kind of fun to
Speaker 19: feel like you really can't get more local than that,
Speaker 19: especially in the middle of London, you know, where there's
Speaker 19: not always a lot of opportunity to grow a lot
Speaker 19: of produce. But look, you can grow mushrooms in a cabinet,
Speaker 19: like you said, Tim, it's like a year round thing.
Speaker 19: And then there's early one of the dishes on the
Speaker 19: tasting menu is mushrooms from the cabinet, so you almost like,
Speaker 19: I feel like the next thing is that you just
Speaker 19: go pick them yourself, right, all.
Speaker 1: Right, So if you don't like mushrooms, you still find
Speaker 1: something there to eat.
Speaker 16: Yes, exactly. Yeah, it's not just that, don't worry.
Speaker 1: You know what struck me though, Kate, that this was
Speaker 1: a restaurant that actually, you know, during the pandemic, like
Speaker 1: it was a really hard time. It just reminds me
Speaker 1: that even like established places had a tough time.
Speaker 19: It's such a good no, it's such a smart thing
Speaker 19: to bring up, Carol, because this was a restaurant called
Speaker 19: The Libury and it's been open for about a dozen
Speaker 19: fifteen years, and so in twenty twenty when lockdown started
Speaker 19: in the UK, they announced that they weren't going to open,
Speaker 19: and it sort of sent they weren't going to reopen
Speaker 19: and it did send shock waves not just through the
Speaker 19: UK but around the world because it's a really notable restaurant,
Speaker 19: So it was it was like a good success story
Speaker 19: when they reopened. In the fact that they have now
Speaker 19: jumped to the top of this best restaurant list for
Speaker 19: the UK is awesome news.
Speaker 3: Do we have time for one more on London just
Speaker 3: because Kate spent like the past few years there, Okay,
Speaker 3: as time as we want. Tell us about Io Adami,
Speaker 3: who it was over at A Coco.
Speaker 19: He's he's a really cool That's a good story too
Speaker 19: because he A Coco is sort of an ambitious West
Speaker 19: African restaurant that's also tasting menu and they were a
Speaker 19: couple of years ago when Michelin to Last year, when
Speaker 19: Michelin announced their awards, A Coco was significantly not was
Speaker 19: not given a star and people freaked out. I can't
Speaker 19: remember his name, but will somebody actually went on a
Speaker 19: podcast and ranted about the fact that A Coco wasn't
Speaker 19: on it. And so now the fact that Chef Io
Speaker 19: has been recognized as like upcoming chef just shows shows
Speaker 19: the rising star power that's happening with West African food
Speaker 19: in the UK. You don't see so much to West
Speaker 19: African food here in the US, but it's definitely a
Speaker 19: force to be reckoned with now in London.
Speaker 1: I do wonder with restaurant rankings. I think you get
Speaker 1: into it in one of your stories that we're going
Speaker 1: to talk about. But Kate, I feel like, you know,
Speaker 1: with all the award ceremonies, there's been a lot of pressure, like, hey,
Speaker 1: people who are doing the judging, broaden out in terms
Speaker 1: of what you're looking at, and diversity is obviously an issue,
Speaker 1: But I do feel like there's a there's a thread
Speaker 1: through some of your stories about that.
Speaker 17: Well.
Speaker 19: I just want to say yay for Bloomberg because about
Speaker 19: a year ago or last fall anyway, one of we
Speaker 19: wrote a story about how there were only six black
Speaker 19: Michelin starre chefs around the world, not just in the US,
Speaker 19: not just in Europe, around the world, And within months
Speaker 19: of that story happening, things started.
Speaker 16: Changing a little bit.
Speaker 19: And so this woman, the chef Joke Abakare, who has
Speaker 19: an awesome restaurant in London called Chisheru, got a Michelin
Speaker 19: Star soon after that, and then somebody in New York
Speaker 19: I think, also got a Michelin Star. So the number
Speaker 19: is slowly creeping up, but it's still like a shockingly
Speaker 19: low number. I think you can still count on two
Speaker 19: hands how many how many Michelin star chefs restaurants run
Speaker 19: by black chefs there are?
Speaker 3: Okay, there are one hundred on this list. Be honest
Speaker 3: with us, how many of these have you been able
Speaker 3: to eat at?
Speaker 16: The UK one? Well, let's first be clear to him.
Speaker 19: I'm mostly based in London, and fifty three of them
Speaker 19: were in London, so yay, London. London dominated this list.
Speaker 19: I would say maybe twenty one. Thing that's cool about
Speaker 19: this list I think we get to talk about it
Speaker 19: in a minute. But these lists are all these these
Speaker 19: three big restaurant lists, one worldwide, one US and one
Speaker 19: UK are The way they're voted on is different for
Speaker 19: each one, and some of them you feel like are
Speaker 19: more random or like you're less able to say, like, wow,
Speaker 19: this is the best restaurant. But the UK list is
Speaker 19: kind of great because they have about three hundred people
Speaker 19: voting for it and it really is sort of functions
Speaker 19: as a heat map of what's happening where you would
Speaker 19: tell people to go, and maybe they're not all deserving
Speaker 19: of being on the top one hundred. But you want
Speaker 19: to go and have an opinion, like it's a good
Speaker 19: thing to go and say like, wow, I went here.
Speaker 19: I went to Ledbury. Is it the best restaurant? No,
Speaker 19: but I went and I have an opinion. I got
Speaker 19: I saw my mushrooms growing.
Speaker 1: That's pretty cool. Can I just tell you the first
Speaker 1: time I went to London, Like, I wasn't a frostworth
Speaker 1: the food because it was years ago, and it was
Speaker 1: to go with Cain, my husband, who's not very experimental,
Speaker 1: and we did did a lot of like I don't know,
Speaker 1: roasts and things. But like the last time I was
Speaker 1: and I visited you with my daughter, like I was
Speaker 1: just blown away by the amount of like the food
Speaker 1: that's there.
Speaker 16: It's gotten really good.
Speaker 19: And this is this is probably subject for another for
Speaker 19: another conversation, but dollar for dollar, like if you have
Speaker 19: one hundred dollars to spend in London and New York,
Speaker 19: you'll eat better in London.
Speaker 16: And I would say, all.
Speaker 1: Right, if you can go anywhere in the world, let's
Speaker 1: talk about the best restaurant in the world. Can we
Speaker 1: talk about that Barcelona?
Speaker 16: Let's go see. We have a lot to do. Carol
Speaker 16: we do.
Speaker 19: Yeah, discruitar just Frutara and Barcelona was voted the number
Speaker 19: one restaurant. It didn't there were some people. For people
Speaker 19: who watched these World's fifty Best Restaurant lists closely, it
Speaker 19: wasn't super surprising because last year was number two and
Speaker 19: this list places just sort of creep up.
Speaker 16: It's sort of like your turn. Okay, your turn.
Speaker 19: So if you were betting, if you're betting, I like
Speaker 19: so these awards too. It's like surprise, was not surprised
Speaker 19: the odds this The awards took place in Vain, I guess,
Speaker 19: and if you were, if you were betting there, you
Speaker 19: wouldn't have gotten a big return.
Speaker 3: Here's the problem in my life. I never know. I
Speaker 3: have a lot of problems. I have a lot of
Speaker 3: life when it comes to Restaura. Well, first of all,
Speaker 3: I never got to dinner anymore. That's that's my first problem,
Speaker 3: which is fine. But the other one is that I
Speaker 3: don't I'm not in the right circles to go to
Speaker 3: these restaurants before they're on the list, because once they're
Speaker 3: on the list, forget about it.
Speaker 19: You're you know, if that's an excellent point, Adam Mix.
Speaker 19: The US did not do so well. On the World's
Speaker 19: Best Restaurant list. We only have two in the top fifty,
Speaker 19: but one of them a restaurant called Atom Mix, which
Speaker 19: is actually in New York. So if you get a
Speaker 19: chance to go, please do. It's a cree It's a
Speaker 19: sensational Korean tasting menu restaurant. But after this list came out,
Speaker 19: reservations that Atom Mix became a trending started trending on
Speaker 19: social media. And I wish I could help you, Tim,
Speaker 19: but I don't know if I can help you.
Speaker 1: It's like flixeeing Hamilton before I went to.
Speaker 3: Broadway precise I have a friend who did that. I
Speaker 3: have a friend who that at the public theater. He's
Speaker 3: a legend.
Speaker 19: That's yeah, it's likewise, you would be a legend if
Speaker 19: you can get an ad a mix right now?
Speaker 1: All right, I want to ask you about the best
Speaker 1: restaurant in the United States is in Portland or.
Speaker 16: It's gone Lang Lang Ban.
Speaker 19: Yeah, so this this restaurant, this is like so the
Speaker 19: news for the US wasn't this is a different fifty
Speaker 19: best Yes, So this is so this is like you said,
Speaker 19: it's very much restaurant awards season, and in fact, the
Speaker 19: best restaurants for the UK were announced at five o'clock
Speaker 19: New York time on Monday, June whatever June day that was,
Speaker 19: and the James Bird Awards were announced five hours later.
Speaker 16: So it really take.
Speaker 1: That in London. Yeah, exactly, that's.
Speaker 16: Already old news.
Speaker 19: So yeah, it's called Langban, It's it's I I actually
Speaker 19: haven't been there, but it is, by all accounts, a
Speaker 19: really terrific Thai restaurant where they have you know, they
Speaker 19: their vision of making Thai food. It will be unlike
Speaker 19: any Tai food you've ever had, inspired but homie, and
Speaker 19: it's you know, putting a spotlight on a cuisine that
Speaker 19: people take for granted and things should only cost a
Speaker 19: certain amount of money.
Speaker 16: So it's it's really cool.
Speaker 3: What's really cool about this list is it's regional also,
Speaker 3: so you can go to you know, Washington, d C.
Speaker 3: For example, to find one of the best restaurants or
Speaker 3: at least one of the best emerging chefs. You can
Speaker 3: go to the Rocky Mountain area to find some really
Speaker 3: good restaurants too, at least according to this list. Talk
Speaker 3: about how it's broken down.
Speaker 16: Yeah, they do. It is.
Speaker 19: It is pretty great because for a long time it
Speaker 19: was really dominated by places that you know, like you
Speaker 19: knew like a Thomas Keller per se in French laundry,
Speaker 19: and they ran in some trouble in twenty twenty. They've
Speaker 19: in the in the past couple of years, there have
Speaker 19: been there's definitely been some shake shakeups at the James
Speaker 19: Beards Foundation, And in fact, in twenty twenty they paused
Speaker 19: the awards not just because of the pandemic, but because
Speaker 19: of allegations of bullying and harassment in kitchens, which you've
Speaker 19: probably heard some of those stories, but also because there
Speaker 19: was it was reported that there were gonna be no
Speaker 19: black chefs on the list, and they and they saw
Speaker 19: red flashing lights and more like pause, we're putting pause
Speaker 19: on this. So now they make a big effort to
Speaker 19: be very, very inclusive, and among those things is looking
Speaker 19: all around the country in like every corner of the country.
Speaker 19: So as you said to him, like you can go
Speaker 19: to the Rocky mountains and find a chef. And so
Speaker 19: they award a best chef. They give each region each
Speaker 19: ten they count ten regions across the country and there's
Speaker 19: the best chef in each region.
Speaker 1: I love that they do that, right, It kind of
Speaker 1: runs out. I have to say there was a name
Speaker 1: on this list, David Standridge at the chefs Shatter in Mystic.
Speaker 1: We've been wanting my husband, I've been wanting to go
Speaker 1: because we don't know. We knew his girlfriendly a little
Speaker 1: while ago, like they were I don't know so and
Speaker 1: so we've been like dynas.
Speaker 3: And they were like closer to home here and then
Speaker 3: now he's out where you guys go in the summer.
Speaker 1: Yeah, they were like I don't Yeah, they were living
Speaker 1: above like a boating place and anyway, so that's cross
Speaker 1: the name. I was like, wait, oh my god, it's.
Speaker 16: Closer to home like it used to be.
Speaker 19: The James bird Wards awarded a best restaurant to New
Speaker 19: York City, just New York City, and since then they've
Speaker 19: brought it out to New York State. So this year,
Speaker 19: actually the best chef is I'm Charlie Mitchell at clover
Speaker 19: Hill and Brooklyn. But the fact that there make a
Speaker 19: point of looking outside you go to Brooklyn.
Speaker 3: Can I tell you, like I used to live close
Speaker 3: to this because I'm not cool, never heard of it.
Speaker 3: I looked it up on the map. When I saw
Speaker 3: where it was literally like a twelve minute walk from
Speaker 3: my old apartment.
Speaker 19: I'm pushing back on not cool, tim, but thank you. Look,
Speaker 19: there's still chances cool. There's a lot of public transportation
Speaker 19: and taxis.
Speaker 3: I know, you know, not a lot of ways to
Speaker 3: get reservations apart from buying them on the well.
Speaker 13: That's all.
Speaker 3: That's a different thing, different conversation.
Speaker 1: That's Bloomberg after dark. Okay, what will make you cool
Speaker 1: is maybe fishing for tuna in the Hampton's.
Speaker 3: Depends on who you want to think you're cool.
Speaker 1: Tell us about what's going out out in the Hampton.
Speaker 16: So I am delighted.
Speaker 19: I'm delighted by this trend that's happening this summer, which
Speaker 19: is that the hot the hot activity, especially for people
Speaker 19: who work on Wall Street, it seems, is to get
Speaker 19: on a blade jet or a helicopter or however you
Speaker 19: get out to the Hamptons, go out to Montalk, get
Speaker 19: on a boat and tuna fish and then take your
Speaker 19: tuna to a local sushi chef and have them cook
Speaker 19: and have not cook, have them not cook your tuna,
Speaker 19: but slice it up for you and serve it, take
Speaker 19: pictures and put it out there.
Speaker 3: Okay, So a lot of stuff has happened in recent years,
Speaker 3: some good, some bad that have made it so you
Speaker 3: don't have to spend all day on a charter vessel
Speaker 3: in order to go fishing.
Speaker 19: I mean, yeah, that's actually that's actually the kind of
Speaker 19: great part about this is that for a number of reasons,
Speaker 19: including the boats have gotten faster, and in fact, starlink
Speaker 19: has made it easier to be connected. I think that
Speaker 19: started in twenty twenty two. It's made easier to be
Speaker 19: connected even when you're out there. But also tuna and
Speaker 19: some of those other big game fish are swimming closer
Speaker 19: to the shore than they used to. And I was
Speaker 19: worried it was all about climate change, but in fact,
Speaker 19: both New York State and the federal government have put
Speaker 19: in restrictions on catching some kind of fish.
Speaker 16: So there's all these forage fish.
Speaker 19: They're called they have a name called like mayhyden or something,
Speaker 19: but they're they're much more abundant, and it means that tuna,
Speaker 19: big fish like bluefin and yelf and tuna are swimming
Speaker 19: closer to the shore. So a trip that would have
Speaker 19: used to take ten to twelve hours like round trip
Speaker 19: to go out and try and catch some fish is
Speaker 19: now closer to five or six. So if you have
Speaker 19: flown out to the Hamptons on a Friday night and
Speaker 19: gotten off the little Montauk airport, no, no, you can.
Speaker 19: You can also drive out there, take the train chitney.
Speaker 19: But if you're on the if you're on the docket,
Speaker 19: like sorry, sorry, go ahead. If you're on the dock
Speaker 19: at like five or six am, you're back by like
Speaker 19: eleven or eleven thirty with hopefully some tuna. But there's
Speaker 19: also like sea bass and stripers and bluefish out there,
Speaker 19: and then you can buy coolers. So the guy who
Speaker 19: did this, I should shout him out because he's great.
Speaker 19: His name is Will Kernaki and he has Montalk Angler's
Speaker 19: Club and he used to work Goldman Sacks actually and
Speaker 19: then two and a half it's his family business, the
Speaker 19: Montak Anglers Club, So he joined them about two and
Speaker 19: a half years ago, and since then he's seen a
Speaker 19: lot of his peers like come up and take advantage
Speaker 19: of this.
Speaker 16: And it's I kind of love it.
Speaker 1: Everybody's talking to you, really are They're coming up really
Speaker 1: cool stuff. See, you could do that?
Speaker 3: Should we should do a remote out there on a
Speaker 3: afternoon after spending the morning out fishing.
Speaker 1: There's a great picture of two dudes hold a huge unit.
Speaker 1: It's like really impressive. So you can find that a
Speaker 1: Bloomberg dot Com. Really good stuff. Okay, thank you, thank you.
Speaker 3: Kate creator is a Bloomberg pursuit. It's a food editor
Speaker 3: and she's here, I know in New York City.
Speaker 1: How luck you and you go back to London. I'm
Speaker 1: just going to tell you, Okay, we love having you here.
Speaker 1: That wraps up our weekend edition of Bloomberg Business Week
Speaker 1: from Bloomberg Radio. Thank you so much for joining us.
Speaker 3: I'm Tim Steneveek.
Speaker 1: Time to go do in a fishing Yeah, Carol Messer,
Speaker 1: I have a good and safe weekend, everybody's.
Speaker 2: This is the Bloomberg Business Week podcast, available on Apple, Spotify,
Speaker 2: and anywhere else you get your podcasts. Listen live weekday
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