WEBVTT - Jennison Bets On 'Booming' Digital Payments Sector 0:00:02.640 --> 0:00:05.320 Welcome to the Bloomberg PENL podcast on Paul Swing You, 0:00:05.360 --> 0:00:07.680 along with my co host Lisa Brahma wits. Each day, 0:00:07.720 --> 0:00:10.240 we bring you the most noteworthy and useful interviews for 0:00:10.280 --> 0:00:12.520 you and your money. Whether at the grocery store or 0:00:12.560 --> 0:00:15.480 the trading floor. Find a Bloomberg Penl podcast on Apple 0:00:15.520 --> 0:00:17.959 podcast or wherever you listen to podcasts, as well as 0:00:17.960 --> 0:00:26.320 at Bloomberg dot com. Steve Manuchin currently making comments saying 0:00:26.320 --> 0:00:29.720 that President Trump and Jijan Ping of China are likely 0:00:29.760 --> 0:00:32.360 to see each other at the end of June. He's 0:00:32.400 --> 0:00:34.640 also saying that he is happy to talk to player's 0:00:34.680 --> 0:00:38.120 chief executive officer on China trade policy. UH. He made 0:00:38.120 --> 0:00:41.080 some comments about a potential US defaults as well, saying 0:00:41.120 --> 0:00:43.040 that that could happen in late summer if there is 0:00:43.080 --> 0:00:46.960 no debt ceiling rays. He is testifying UH in front 0:00:47.000 --> 0:00:50.120 of Congress today and is going to be a commenty 0:00:50.120 --> 0:00:53.520 will bring you headlines as they appear. Meanwhile, the concept 0:00:53.560 --> 0:00:55.640 of the ongoing trade skirmish between the U S and 0:00:55.720 --> 0:00:59.000 China certainly has impacted UH text shares, which have taken 0:00:59.120 --> 0:01:01.880 a beating and been more volatile. Our next guest still 0:01:01.920 --> 0:01:04.040 likes a bunch of those text socks and perhaps is 0:01:04.040 --> 0:01:06.840 going to go shopping market Baraboo. He is head of 0:01:06.840 --> 0:01:10.760 Global Equity at Jennison Jennison Associates, the fundamental equity and 0:01:10.800 --> 0:01:14.200 fixed income business of p JIM overseeing about a hundred 0:01:14.200 --> 0:01:16.600 and sixty billion dollars from Boston, Mark, thank you so 0:01:16.680 --> 0:01:19.800 much for being here. So at this point, given how 0:01:19.880 --> 0:01:22.640 much we're seeing tech shares lag behind in light of 0:01:22.720 --> 0:01:26.440 some of the trade tensions, are you seeing opportunities? Yeah, 0:01:26.440 --> 0:01:29.920 we definitely see opportunities. Um. You know, our focus, of 0:01:29.920 --> 0:01:32.760 course is on really strong secular growth stories in the 0:01:32.800 --> 0:01:36.920 market and in technology. There are many uh oftentimes they're 0:01:36.959 --> 0:01:39.840 not in in the crosshairs of the trade war, so 0:01:39.880 --> 0:01:42.520 that you know, it's not in semi conductors, it's not 0:01:42.600 --> 0:01:47.200 in devices, the areas we really like our cloud based architectures, 0:01:47.520 --> 0:01:52.280 software as a service companies, UH. Digital payments globally everywhere 0:01:52.320 --> 0:01:56.200 in the world, including in China. It's booming as everybody 0:01:56.240 --> 0:02:01.280 moves to more cashless systems. So there's lots of opportunities 0:02:01.320 --> 0:02:03.920 out there, but you really want to stick with the 0:02:03.920 --> 0:02:08.480 the secular growers, not not try to outsmart the markets 0:02:08.520 --> 0:02:11.320 on this trade war. In the cyclical part of the market. 0:02:11.840 --> 0:02:14.240 So Mark, you mentioned kind of secular growth stories. One 0:02:14.240 --> 0:02:17.680 of the you know, really interesting secular growth stories that 0:02:17.800 --> 0:02:20.400 has been developing within the tech space. It's just kind 0:02:20.400 --> 0:02:24.040 of the Chinese technology companies that have American investors have 0:02:24.080 --> 0:02:26.359 been able to invest in recently, Ali Baba, tense Cent 0:02:26.760 --> 0:02:30.239 Bai Do. What is your sense of those names given 0:02:30.320 --> 0:02:33.200 what appears to be rising trade tensions. Yeah, with well, 0:02:33.280 --> 0:02:36.120 let's look at Ali Baba as an example, uh, because 0:02:36.160 --> 0:02:39.960 it's pretty clean, uh in terms of the trade impact, 0:02:40.000 --> 0:02:44.160 because it doesn't really have any direct trade war impact. 0:02:44.240 --> 0:02:49.959 It's really just a domestically focused company solving for convenience 0:02:49.960 --> 0:02:54.600 for Chinese consumers, uh and feeding that sort of emerging 0:02:54.919 --> 0:02:58.280 middle class boom that you're seeing in China. So you know, 0:02:58.360 --> 0:03:02.079 for example, in the first quarter they just boarded revenue growth, 0:03:02.480 --> 0:03:06.120 so no problems there, but there are multiples come down 0:03:06.200 --> 0:03:09.799 now because of these trade tensions. So you could say 0:03:09.880 --> 0:03:12.839 that's could be a really good opportunity because it's very 0:03:12.840 --> 0:03:16.760 inexpensive relative to its growth rate uh, and of course 0:03:16.800 --> 0:03:19.760 a very very profitable company because of their business models. 0:03:19.760 --> 0:03:23.440 So that would be a good one to focus on 0:03:24.000 --> 0:03:27.440 going forward. Um. The only direct impact they would have 0:03:27.560 --> 0:03:30.120 is more indirect than that would be. A macroeconomic slowdown 0:03:30.120 --> 0:03:34.600 in China obviously makes that more challenging for everybody. Uh. 0:03:34.639 --> 0:03:37.000 And I think that's what the markets pricing in, but 0:03:37.080 --> 0:03:39.960 it may be too pessimistic. When we think about tech shares, 0:03:40.000 --> 0:03:42.800 we often think about the Fangs, and that's really sort 0:03:42.840 --> 0:03:47.160 of been the dominant player uh in this space. What 0:03:47.280 --> 0:03:49.720 about them? I mean, are you right now interested in Apple? 0:03:49.760 --> 0:03:51.720 Are you interested in Facebook? Are you interested in some 0:03:51.800 --> 0:03:55.200 of the big winners over the past a couple of months. Well, 0:03:55.240 --> 0:03:57.600 I think, you know, looking at Fang and brought more 0:03:57.640 --> 0:04:00.360 broadly to find it, you know, the market is charing 0:04:00.440 --> 0:04:02.680 for some of those companies. So the smartphone market is 0:04:02.760 --> 0:04:07.720 matured globally. Um Uh. Search market is still growing nicely, 0:04:07.880 --> 0:04:11.480 but it's it's obviously slowing down on a structural basis, 0:04:11.520 --> 0:04:14.520 just because it's so big. Um And so when you 0:04:14.520 --> 0:04:16.840 look at Fang today, I mean, the two that are 0:04:16.920 --> 0:04:19.840 we're most excited about would be like a Netflix or Amazon, 0:04:20.040 --> 0:04:23.640 where the growth rates are still quite healthy and there's 0:04:23.960 --> 0:04:26.760 a lot of market penetration left for both companies, so 0:04:26.800 --> 0:04:30.520 their addressable market keeps expanding. UM. And that's what you'd 0:04:30.520 --> 0:04:32.839 want to look for. So I think even within FANG 0:04:32.880 --> 0:04:35.840 the list gets narrower. So, Mark, we would be remissed 0:04:35.839 --> 0:04:38.080 today if we didn't ask you your thoughts on Qualcom 0:04:38.120 --> 0:04:41.839 big news this morning with the UH their regulatory issue 0:04:41.880 --> 0:04:45.800 stock down. Give us your sense of Qualcom. Yeah, I 0:04:45.839 --> 0:04:49.720 think the I think the market obviously thinks that recent 0:04:49.800 --> 0:04:54.200 deals that Qualcom is negotiated with Apple and Samsung, for example, 0:04:54.920 --> 0:04:58.960 can somehow be broken UM. And you know we're we're 0:04:58.960 --> 0:05:01.680 not legal experts, and we don't know all the details 0:05:01.720 --> 0:05:05.280 of their agreements, UM, but it's our understanding that that's 0:05:05.560 --> 0:05:09.320 highly unlikely. And if that's the case, then qualcoms being 0:05:09.520 --> 0:05:14.240 oversold on this FTC decision because they've already privately negotiated 0:05:14.839 --> 0:05:19.080 agreements with their big customers, or most of them. So 0:05:19.440 --> 0:05:22.960 I'm just wondering what your highest conviction bet is right 0:05:23.000 --> 0:05:26.120 now going forward over the next six or twelve months. Well, 0:05:26.160 --> 0:05:28.359 we think it's in the area of digital payments because 0:05:28.400 --> 0:05:30.920 all over the world UM and developed markets. Of course, 0:05:30.920 --> 0:05:34.159 we have good financial infrastructure, but we're still seeing consumers 0:05:34.200 --> 0:05:37.679 move and move away from cash UM, which is still 0:05:37.720 --> 0:05:41.000 amazingly a large percentage of transactions even here and in 0:05:41.120 --> 0:05:45.480 emerging markets, they're actually leap frogging to internet based technologies 0:05:45.520 --> 0:05:49.080 that enable payments to occur very quickly, with less fraud 0:05:49.760 --> 0:05:54.560 and very cheaply, and providing financial services to underbanked populations. 0:05:54.600 --> 0:05:57.919 So that's an area we think is just looks terrific. 0:05:58.000 --> 0:06:03.320 And are you talking specifically about Pal about Square? I mean, 0:06:03.520 --> 0:06:05.599 are those the names you're talking Yes, there's a whole list. 0:06:05.640 --> 0:06:07.840 In the US, it would be of course, a company 0:06:07.839 --> 0:06:11.840 like MasterCard, which is benefiting from from that digital trans transition. 0:06:11.880 --> 0:06:14.360 It would be PayPal, digital wallet, it would be Square 0:06:14.400 --> 0:06:17.880 with serving small businesses. But then when you move outside 0:06:17.920 --> 0:06:20.800 the United States, it's interesting companies like Mercato Libra in 0:06:20.880 --> 0:06:25.240 Latin America, which has a good chance of becoming a 0:06:25.400 --> 0:06:28.440 dominant digital payments provider in that region. It's already an 0:06:28.440 --> 0:06:32.599 e commerce winner there. Um and and in and of 0:06:32.640 --> 0:06:35.880 course other companies that are just targeting payments like Audience 0:06:35.880 --> 0:06:38.240 and the Netherlands who have a blue chip customer list 0:06:38.279 --> 0:06:43.200 including Netflix, Uber, Airbnb, UM. So it's very good. It's 0:06:43.240 --> 0:06:45.720 like it sounds like a hot sector. Mark Barrebo, head 0:06:45.720 --> 0:06:48.440 of Global Equity for Jennison associates, the fundamental equity and 0:06:48.480 --> 0:07:05.400 fixed income business of p G. I am. Let's talk housing, 0:07:05.440 --> 0:07:09.160 because there have been signs that the slowing housing market 0:07:09.440 --> 0:07:12.240 is starting to turn around, at least in certain parts. 0:07:12.600 --> 0:07:15.240 The big question, though, is, especially here now that we've 0:07:15.280 --> 0:07:18.960 had the tax season, are we still seeing persistent weakness 0:07:19.000 --> 0:07:21.200 in some of the high tax states, particularly in the 0:07:21.280 --> 0:07:24.320 coastal areas. It's one area I'd like to focus on 0:07:24.360 --> 0:07:27.080 with Best Friedman, chief executive officer of Brown Harris Stevens, 0:07:27.120 --> 0:07:30.160 who joins us here in our Bloomberg Interactive Broker Studios. Bess, 0:07:30.280 --> 0:07:32.080 thank you so much for being here. So we look 0:07:32.160 --> 0:07:34.800 at the New York City market, or the San Francisco market, 0:07:34.840 --> 0:07:38.080 or some of these high end coastal high tax areas. 0:07:38.320 --> 0:07:41.520 Are we seeing a substantial hit at an ongoing level 0:07:41.640 --> 0:07:45.360 from the removal of salt deductions or have capping them anyway? 0:07:45.520 --> 0:07:48.280 You know, it's I don't know. It's hard to say yet, 0:07:48.360 --> 0:07:50.640 I don't. We were just talking earlier about, you know, 0:07:50.680 --> 0:07:53.920 the new mansion tax which bent has been enacted, and 0:07:53.960 --> 0:07:57.600 I think that uh, come July that goes into effect 0:07:57.640 --> 0:07:59.760 and we won't know what the effect of that is 0:07:59.800 --> 0:08:03.200 going to be until we see the transactions for from 0:08:03.240 --> 0:08:05.320 a year from now, So it's hard to say at 0:08:05.320 --> 0:08:07.880 this point. But so I guess what I'm hearing in 0:08:08.000 --> 0:08:11.320 the New York market is that the higher end is 0:08:11.920 --> 0:08:14.160 weaker than say the mid end of the market. Is 0:08:14.200 --> 0:08:16.600 that true and kind of what's driving that? If you think, 0:08:17.240 --> 0:08:19.640 I think the high end market has slowed down a bit, 0:08:19.720 --> 0:08:21.800 Definitely the co op market. I mean that used to 0:08:21.800 --> 0:08:24.680 be booming and we've definitely seen a slowdown. I think 0:08:24.680 --> 0:08:27.560 the prices were so uber high, you know, and you 0:08:27.600 --> 0:08:29.920 hear all these like big deals that got done and 0:08:29.960 --> 0:08:32.960 those days are kind of they've they've slowed down incredibly. 0:08:33.080 --> 0:08:35.840 So now people the two bedroom, the three bedroom market, 0:08:35.840 --> 0:08:38.280 that market is very fluid, but the super high end 0:08:38.280 --> 0:08:41.400 market co op market has slowed down because people are 0:08:41.400 --> 0:08:45.440 looking for values and condominiums. They want to move downtown. Um, 0:08:45.520 --> 0:08:47.599 you're seeing a shift where people want to live with 0:08:47.640 --> 0:08:49.599 their kids. Now not everybody wants to be on the 0:08:49.640 --> 0:08:52.079 Upper east Side. They want to go downtown. And now 0:08:52.160 --> 0:08:56.360 Hudson Yards, which is very new, super exciting. Um. Somebody 0:08:56.360 --> 0:08:59.400 referred to it as Dubai on the Hudson because it 0:08:59.440 --> 0:09:01.200 looks similar or to some of the stores and some 0:09:01.280 --> 0:09:04.959 of the shopping centers in Dubai, right. I mean, it's exciting, 0:09:05.040 --> 0:09:06.680 and we won't know what's going to happen with the 0:09:06.720 --> 0:09:09.120 condos there for a while. It's gonna take some time. 0:09:09.280 --> 0:09:11.200 One big question I have, and we just keep talking 0:09:11.280 --> 0:09:14.120 at nauseum about the trade tensions in the ongoing skirmish 0:09:14.120 --> 0:09:16.559 between US and China and elsewhere, and I wonder about 0:09:16.559 --> 0:09:20.320 foreign investments. Are you still seeing that Chinese buyer, that 0:09:20.400 --> 0:09:23.440 European buyer to come to the US. That that buyer 0:09:23.559 --> 0:09:25.560 is gone. We haven't seen that buyer in a long time. 0:09:25.600 --> 0:09:29.440 How long um? I would say it's been three plus 0:09:29.520 --> 0:09:32.040 years since we've seen that buyer. I mean typically in 0:09:32.080 --> 0:09:34.679 New York City, it's you know, it's New Yorkers. It's 0:09:34.760 --> 0:09:38.600 very domestic. It's very light on you know, international people 0:09:38.640 --> 0:09:42.120 coming to buy. It say it's probably people think there's 0:09:42.120 --> 0:09:44.160 so many people that come here to buy, but really 0:09:44.160 --> 0:09:46.040 it's a lot of New Yorkers and a lot of 0:09:46.080 --> 0:09:50.160 domestic you know, Texas, all over California. People buy here 0:09:50.240 --> 0:09:54.040 from within the United States. So that internationally, yeah, and 0:09:54.200 --> 0:09:57.520 no longer Chinese buyers are gone because you see some 0:09:57.559 --> 0:10:01.600 of these crazy ta easy buildings here in Midtown just 0:10:01.679 --> 0:10:03.439 right by our office here on fifty seven Street, and 0:10:03.480 --> 0:10:07.680 then on the west, the western side. It's really interesting. 0:10:07.840 --> 0:10:10.920 I'm wondering. You say there has been a softening, uh 0:10:10.960 --> 0:10:13.439 in particularly in New York City, and I'm wondering how 0:10:13.480 --> 0:10:16.600 big has the softening been and how big could it be? 0:10:17.520 --> 0:10:19.160 You know, it's hard to say. I mean, we've seen 0:10:19.200 --> 0:10:22.520 probably a bit. It's probably down about ten percent if 0:10:22.559 --> 0:10:25.199 I had to estimate, And I don't know. It's you know, 0:10:25.280 --> 0:10:27.440 uncertainty is not good. All the stuff that's going on, 0:10:27.559 --> 0:10:30.640 like the trade wars, that kind of stuff is not good. Um. 0:10:30.679 --> 0:10:33.840 It creates sort of instability in the market. But you know, 0:10:33.880 --> 0:10:36.240 I'm pretty optimistic about it. I see, you know, rates 0:10:36.280 --> 0:10:40.280 are good. Um, people are still buying, so I think that, Um, 0:10:40.440 --> 0:10:42.000 you know, the market is going to be steady. It 0:10:42.040 --> 0:10:44.040 has been steady, and I think it will continue to 0:10:44.080 --> 0:10:48.640 be so. So best your CEO of Brown Hire, stevens Um, 0:10:48.679 --> 0:10:50.960 what is your strategic focus for your firm this year? 0:10:51.000 --> 0:10:53.280 Giving given what you're telling us about the real estate 0:10:53.320 --> 0:10:55.120 market and some of the key markets like the Hampton's 0:10:55.160 --> 0:10:59.160 in New York. Well, we have kind of been focusing 0:10:59.160 --> 0:11:01.120 on hiring the right people. We just hired a new 0:11:01.160 --> 0:11:05.520 chief marketing officer, so we're really focusing on UM, tightening 0:11:05.559 --> 0:11:10.000 up our markets and getting more strategic UM. We're focusing 0:11:10.000 --> 0:11:13.200 heavily on social media. That's obviously, as everybody knows, is 0:11:13.240 --> 0:11:16.120 like a new channel on the television. Everybody is on 0:11:16.200 --> 0:11:19.200 Instagram or LinkedIn or Facebook, and so we're spending a 0:11:19.200 --> 0:11:22.080 lot of time on digital. I think today print is 0:11:22.160 --> 0:11:24.439 kind of old school and people are not looking at 0:11:24.440 --> 0:11:26.240 it as much. In real estate used always be like 0:11:26.240 --> 0:11:29.440 the glossy magazine and all the properties, but you get 0:11:29.480 --> 0:11:33.000 so many more readers or interests with content and social 0:11:33.480 --> 0:11:36.240 and digital. So we're focusing heavily on that. And Brown 0:11:36.240 --> 0:11:38.800 Hair Stevens, being a legacy firm, has typically been in 0:11:38.880 --> 0:11:40.719 print and so now we're trying to flip it a 0:11:40.760 --> 0:11:42.760 little bit and do more digital. I wonder if there 0:11:42.760 --> 0:11:45.920 are other benefits to from going digital where you can 0:11:45.920 --> 0:11:50.440 actually measure who's viewing what and then use that to 0:11:50.559 --> 0:11:53.960 be able to better market and understand what people are 0:11:54.000 --> 0:11:57.040 looking for. You hit the nail right on the head. 0:11:57.080 --> 0:11:59.400 I mean with print, you put stuff out there, nobody 0:11:59.400 --> 0:12:01.319 knows if anybod even looks at it, orf it goes 0:12:01.360 --> 0:12:04.199 in the garbage. But we can totally measure what people 0:12:04.200 --> 0:12:06.240 are opening up and then we can get a little 0:12:06.280 --> 0:12:07.920 bit more info on that. So what are you learning? 0:12:08.320 --> 0:12:10.679 We're learning like what what type of a person will 0:12:10.760 --> 0:12:13.560 like our information? What who's interested in? What where do 0:12:13.600 --> 0:12:16.240 they live, what's their background? All that stuff is helpful 0:12:16.240 --> 0:12:19.160 to us so we can cater to our audience. UM. 0:12:19.240 --> 0:12:22.240 So we're getting laser focused on digital. That's really important 0:12:22.240 --> 0:12:24.240 for us, and it seems important given that the millennials 0:12:24.240 --> 0:12:27.400 are coming into their real estate buying part of their lives. 0:12:27.400 --> 0:12:29.800 What are you sensing any trends here, like in the 0:12:29.840 --> 0:12:34.320 New York Hampton's Florida market about millennials and their purchasing intent. 0:12:34.760 --> 0:12:37.640 You know, we see a lot of millennials purchasing in Brooklyn. 0:12:37.760 --> 0:12:40.960 I mean that's very popular, you know, in downtown and 0:12:41.000 --> 0:12:44.640 typically areas um that are not popular yet. You know, 0:12:44.640 --> 0:12:46.920 they want to be in places where people are not 0:12:47.000 --> 0:12:48.880 there yet, so they want to be or that's where 0:12:48.920 --> 0:12:51.040 they can afford places. That's I think you said it 0:12:51.080 --> 0:12:53.719 a little bit better. I'm not I'm being very diplomatic, 0:12:55.240 --> 0:12:58.080 well said, but yes, I think that's a big part 0:12:58.120 --> 0:13:00.640 of it. So interesting. Best ream and thank you so 0:13:00.720 --> 0:13:03.400 much for joining us. Best As the CEO Brown Howard 0:13:03.440 --> 0:13:06.160 Stevens talking to us about the real estate market in 0:13:06.600 --> 0:13:25.360 New York, paul I felt a certain magic as our 0:13:25.400 --> 0:13:29.000 next guest walked into our Bloomberg Interactive Broker's studios. He 0:13:29.200 --> 0:13:34.480 is the longest serving malt master in the Scotch whiskey industry. 0:13:34.520 --> 0:13:38.680 He is David Stewart of the Balveny. He is based 0:13:38.760 --> 0:13:42.240 normally in Scotland the Boviny excuse me, uh, He's normally 0:13:42.280 --> 0:13:44.880 based in Scotland, but he joins U here in New York. David, 0:13:46.000 --> 0:13:48.280 let's just talk about what it means to be a 0:13:48.360 --> 0:13:51.000 malt master. Yeah, it is a very unique job in 0:13:51.000 --> 0:13:54.560 the Scotch whisk industry, the scott swisk and it's employs 0:13:54.600 --> 0:13:57.760 thousands of people and and really there's probably only fifteen 0:13:57.800 --> 0:14:01.000 of us doing this same jobs out the whole industry. 0:14:01.360 --> 0:14:03.560 So we are actually involved in the quality of the 0:14:03.559 --> 0:14:06.520 whiskey that's actually in the bottle, selecting the cast that 0:14:06.559 --> 0:14:09.520 will create any one of a different expressions, making sure 0:14:09.520 --> 0:14:13.480 if we taste consistently and the quality is correct, and 0:14:13.880 --> 0:14:16.600 also innovating as well looking forward of what we're going 0:14:16.640 --> 0:14:19.240 to release in a few years time. So we're always 0:14:19.560 --> 0:14:23.360 innovating and experimenting in our warehouses and putting a whisky 0:14:23.360 --> 0:14:27.600 into different cast types and maybe changing the distillation process 0:14:27.600 --> 0:14:29.920 slightly to maybe give us something in the future. So 0:14:29.960 --> 0:14:32.320 it's a very proud to have worked in the Scotch 0:14:32.320 --> 0:14:34.720 whiskey and just for so long and and with this 0:14:34.880 --> 0:14:38.440 great family company. So talk to us about the Scotch 0:14:38.600 --> 0:14:42.600 whiskey business. Is it is it growing? Where is it growing? 0:14:42.680 --> 0:14:46.440 Where people drinking more and less? It is growing at 0:14:46.440 --> 0:14:48.360 the moment, and it has been for the last time 0:14:48.480 --> 0:14:51.120 or fifteen years. A number of the distilleries are actually 0:14:51.120 --> 0:14:54.320 increasing production. We need to we need to look so 0:14:54.360 --> 0:14:56.800 far out to mean, our youngest whiskey is twelve years. 0:14:56.920 --> 0:14:59.440 We've got to forecast what we're going to sell in 0:14:59.480 --> 0:15:02.320 twelve years time. So we've got to increase production at 0:15:02.320 --> 0:15:05.440 our distillery now. So we're pretty quisky into casks that 0:15:05.480 --> 0:15:08.080 will age on for the next twelve years. So we're 0:15:08.120 --> 0:15:12.040 increasing production or distilleries and that's happening throughout the industry. 0:15:12.480 --> 0:15:14.480 There's a lot of small craft the stiller is being 0:15:14.480 --> 0:15:17.600 opened up in Scotland, probably another ten or fifteen that 0:15:17.640 --> 0:15:19.760 will be opened up in the next five or ten years. 0:15:19.840 --> 0:15:24.880 So and Asia probably is is a big growing emerging 0:15:24.920 --> 0:15:28.840 market for the Scottish whisky industry. You were talking about 0:15:28.840 --> 0:15:30.760 how long you've been doing this. You started in nineteen 0:15:30.760 --> 0:15:33.800 sixty two at the age of seventeen. You've been doing 0:15:33.800 --> 0:15:36.520 this a long time. What's been the biggest change in 0:15:36.560 --> 0:15:38.640 the industry. Yeah, Well, when I started was all but 0:15:38.760 --> 0:15:42.400 blended whiskey. We single malts weren't around at that time. 0:15:42.960 --> 0:15:46.040 But our company, the family company of William Grant Lawrence 0:15:46.080 --> 0:15:49.360 glen Fidder back in nineteen sixty three, just a year 0:15:49.400 --> 0:15:51.800 after I started, were and we probably had about ten 0:15:51.880 --> 0:15:55.160 years really without any competition. And then the rest of 0:15:55.200 --> 0:15:57.360 the industry soh A, well Glen Fidder was doing as 0:15:57.360 --> 0:16:00.800 a single malt how profitable single maults can be. And 0:16:00.840 --> 0:16:03.280 then and then the rest of the industry came into 0:16:03.360 --> 0:16:07.600 two join us and launch their single malts. So I say, 0:16:07.680 --> 0:16:10.480 blender whiskey is Blender whiskey is still the biggest category 0:16:11.200 --> 0:16:14.280 if as sales are concerned, But single malts I've got 0:16:14.320 --> 0:16:16.400 such a variety, as I've mentioned as a hundred and 0:16:16.400 --> 0:16:20.360 twenty distilleris in Scotland, all producing these different styles of whiskey, 0:16:20.360 --> 0:16:24.640 different flavors. So and it's yeah, it's growing to be 0:16:24.720 --> 0:16:27.680 fair the last ten twenty years, it's as boom time 0:16:27.720 --> 0:16:31.920 for the Scotch whisky industry and long may that continue. 0:16:31.160 --> 0:16:35.840 The company you're launching, I guess a new product, three 0:16:35.880 --> 0:16:38.920 bottle set of whiskeys. Tell us about that. Yeah, well 0:16:38.920 --> 0:16:41.280 this is the above any stories, which is all about 0:16:41.360 --> 0:16:43.960 the how we created the whiskey were calling stories, because 0:16:44.000 --> 0:16:46.320 a lot of stories to tell about how the whiskies 0:16:46.360 --> 0:16:50.160 were created and the people behind the behind the creation 0:16:50.200 --> 0:16:52.520 of these whiskey. So that the first one is a 0:16:52.520 --> 0:16:55.640 twelve year old whiskey which is they called the sweet 0:16:55.680 --> 0:16:58.360 Taste of American Oak. And this is as we normally 0:16:58.360 --> 0:17:02.400 we're used the American child bottles after bourbon, but in 0:17:02.400 --> 0:17:05.280 this sensance we've actually used virgin oak instead of chatting 0:17:05.280 --> 0:17:08.440 they we've only toasted them at a Cooper's into Kentucky 0:17:08.520 --> 0:17:11.000 and we've got these bottles sent over to Scotland. We 0:17:11.040 --> 0:17:14.520 gave them another toasting in Scotland and then we put 0:17:14.520 --> 0:17:17.040 our twelve year old Blevinian into these casts for a 0:17:17.080 --> 0:17:20.720 short finishing period, so it sided more okayness and honey 0:17:20.800 --> 0:17:24.879 and citrus and vanilla notes to the whiskey. Okay, So 0:17:24.920 --> 0:17:28.320 I should ask you about the increase in people investing 0:17:28.400 --> 0:17:31.800 in in scotch and sort of high end bottles and 0:17:32.160 --> 0:17:34.480 all of that. But I want to know more logistics 0:17:34.520 --> 0:17:36.959 about your tasting of this. Do you spit out the 0:17:37.000 --> 0:17:39.480 scotch when you taste it, when you swish it around 0:17:39.480 --> 0:17:42.840 in your mouth, or do you drink it? Or like 0:17:42.840 --> 0:17:45.640 the wine industry, we were trained nose us, so I'm 0:17:45.680 --> 0:17:48.080 nosing Christy all the time. We've got tulip shaped nose 0:17:48.160 --> 0:17:50.520 and glasses that got a small opening at the top 0:17:50.600 --> 0:17:54.240 that we stick our nose into and so I actually 0:17:54.240 --> 0:17:56.560 taste it. We don't taste that very rarely do we 0:17:56.640 --> 0:17:58.359 taste that. We may need to do with twenty or 0:17:58.359 --> 0:18:01.080 thirty samples in a day from all different sides of 0:18:01.080 --> 0:18:05.760 the process, and you split it. Aging whiskey finishes single battles, 0:18:06.480 --> 0:18:08.760 but no, when noising the whiskey, that's what that's what 0:18:08.880 --> 0:18:13.359 takes a long training period. David Stewart, thank you so 0:18:13.440 --> 0:18:15.680 much for being with a Smaalt Master of the Balvany 0:18:16.160 --> 0:18:34.320 from Scotland. Here we're we are looking at Boeing shares 0:18:34.359 --> 0:18:37.600 down more than one percent, but some people are expecting 0:18:38.240 --> 0:18:41.879 that they are getting ready to unroll the newest seven 0:18:41.960 --> 0:18:45.480 thirty seven, getting it back into service seven threies seven MAX. 0:18:45.680 --> 0:18:47.440 This of course was the one that came under a 0:18:47.480 --> 0:18:50.000 lot of scrutiny after being involved in two different crashes. 0:18:50.080 --> 0:18:51.879 Joining us to give us a sense of what the 0:18:51.960 --> 0:18:55.159 latest here is is George Ferguson, Senior Aerospace, Defense and 0:18:55.280 --> 0:18:59.080 Airlines analyst for Bloomberg Intelligence. So, first of all, why 0:18:59.160 --> 0:19:05.440 is it important for Boeing to put Max back in service? Well, 0:19:05.440 --> 0:19:08.080 I mean, I think simply because there's they have no 0:19:08.160 --> 0:19:11.080 other product to offer to airlines and the narrow body 0:19:11.119 --> 0:19:15.520 airplane is is the most prevalently flown airplane around the world. 0:19:15.520 --> 0:19:18.119 That's the biggest people mover. It's not to say that 0:19:18.119 --> 0:19:21.480 the seven thirty seven has has problems and it shouldn't 0:19:21.480 --> 0:19:25.760 be offered. I think the airplane is fine, um, but 0:19:26.160 --> 0:19:28.520 you couldn't go to another You couldn't decide we're going 0:19:28.560 --> 0:19:30.840 to redesign the seven thirty seven now because of these 0:19:30.880 --> 0:19:34.240 recent problems and and have a product to offer people. 0:19:34.720 --> 0:19:38.399 You know, for another five years. So, George, I know 0:19:38.760 --> 0:19:41.360 next month is the Paris Air Show and among all 0:19:41.400 --> 0:19:43.919 the champagne and rose that I'm sure you'll be drinking. 0:19:44.680 --> 0:19:48.440 What is can Boeing actually sell airplanes? Can they sell 0:19:48.480 --> 0:19:52.159 seven thirty seven max Is next month in Paris? The 0:19:52.160 --> 0:19:54.320 funny thing is we've seen them actually sell a couple 0:19:55.320 --> 0:19:57.640 uh in the last and last few months, even while 0:19:57.680 --> 0:20:01.080 the airplane has been grounded. So can they sell them? Yeah? 0:20:01.119 --> 0:20:03.680 Bits and pieces, But there won't be any significant sales 0:20:03.720 --> 0:20:06.639 without getting this airplane back in the air and in 0:20:06.720 --> 0:20:09.760 revenue flight. So it does look like they are going 0:20:09.760 --> 0:20:12.080 to get it back in air, but it's gonna look 0:20:12.080 --> 0:20:15.280 a little different, right, Yes, I mean we'll have some 0:20:15.359 --> 0:20:19.719 modifications to it, uh for sure. And I think that's 0:20:19.800 --> 0:20:22.320 you know, that's what's what's gonna get hammered out here. 0:20:22.800 --> 0:20:25.960 What we have a global regulators meeting coming tomorrow where 0:20:25.960 --> 0:20:28.160 the f A is inviting into bunch of regulators around 0:20:28.200 --> 0:20:31.159 the world, and and my senses the f A is 0:20:31.160 --> 0:20:33.240 going to show them what they think the right fixes. 0:20:33.320 --> 0:20:35.720 And it seems to seems to us at the fixes 0:20:36.480 --> 0:20:38.840 that the semcast system that pushes the nose over in 0:20:38.880 --> 0:20:42.159 the event of the airplanes at risk of stalling. Um 0:20:42.200 --> 0:20:44.879 that this system will be less aggressive, because it really 0:20:45.320 --> 0:20:48.879 the MCAST system in both crosses really aggressively pushed the 0:20:48.920 --> 0:20:52.960 airplane's nose down because it was getting erroneous sensor input, 0:20:53.920 --> 0:20:57.119 but the pilots couldn't counteract it purely by pulling back 0:20:57.200 --> 0:20:59.119 on the on the yoke of the airplane, of the 0:20:59.119 --> 0:21:02.680 control wheel the airplane. And it seems to me that 0:21:02.760 --> 0:21:04.879 sort of the fix will be not to let MCAST 0:21:04.960 --> 0:21:08.480 get that aggressive so the poots can can counteract it. 0:21:08.520 --> 0:21:11.399 There are other procedures for the pilots to to fix 0:21:11.480 --> 0:21:13.800 what they call runaway stabilizer problem, but I think that 0:21:13.840 --> 0:21:16.320 will be that will be core of the fix. I 0:21:16.359 --> 0:21:20.160 think the other challenge Boeing has here is they want 0:21:20.200 --> 0:21:22.960 the MAX to look like and and and take the 0:21:23.040 --> 0:21:27.000 same training as the seven thirty seven n G it's predecessor. 0:21:27.080 --> 0:21:29.880 They sold it to airlines with the view that there 0:21:29.920 --> 0:21:33.520 wouldn't be much training required to transition from the old 0:21:33.520 --> 0:21:37.800 seven seven to the new MAX. And so I think 0:21:37.840 --> 0:21:39.679 what we'll watch very closely as we go into this 0:21:40.119 --> 0:21:44.760 regulator negotiations, will regulators want more training, especially if they 0:21:44.880 --> 0:21:48.080 want simulator training or actual flight chaining. I don't think 0:21:48.119 --> 0:21:50.399 flight training is on the table, but you never know. 0:21:51.160 --> 0:21:54.119 Um that cost airlines money and they won't like that 0:21:54.200 --> 0:21:56.720