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Speaker 1: and Tim Stenebeck from Bloomberg Radio.
Speaker 2: Well, the moment of truth for Apple's AI plans and
Speaker 2: for the four hundred and seventy one billion dollar rally
Speaker 2: that has rescued the stock from adul drums. We've talked
Speaker 2: about AI being a central focus of the ww DC
Speaker 2: kicked off at one pm Wall Street time today. We've
Speaker 2: been giving you updates throughout the day on that partnership
Speaker 2: with Open Ai and everything that Apple has thus far announced.
Speaker 2: We'll continue to bring those updates as we do get
Speaker 2: them throughout the week. But first, let's talk about the
Speaker 2: stock reaction. Because Ryan Lestelica is Bloomberg News Equities reporter.
Speaker 2: He writes all about what's at stake with Apple and AI.
Speaker 2: Shares of Apple down by one point eight percent right now.
Speaker 2: Ryan joins us from the Home Bureau in Chicago. Ryan,
Speaker 2: give us what's at stake right now for Apple? Given
Speaker 2: that you know, yes, it's significantly underperformed the s andvvatpunder
Speaker 2: in the Nasdaq one hundred right now, but we've seen
Speaker 2: a rally over the last month that has investors looking
Speaker 2: pretty optimistic.
Speaker 3: Yeah. Absolutely. So the context I would say is that
Speaker 3: Apple is really facing two key concerns. One was that
Speaker 3: it just wasn't growing all that much. I think five
Speaker 3: in the past six quarters, it'saw negative revenue growth, and
Speaker 3: a lot of the other names bintech have been showing
Speaker 3: pretty robust growth, and a lot of that is due
Speaker 3: to AI, which is an area where it felt like
Speaker 3: Apple was a little bit behind the curve. It didn't
Speaker 3: really have a very articulated AI strategy. People were really
Speaker 3: hoping that today would really address both of those, that
Speaker 3: it would announce all these kinds of new AI features,
Speaker 3: especially for the iPhone, and then that would spur people
Speaker 3: to begin upgrading their phones and that would spur you know,
Speaker 3: a new leg of revenue growth for the stock. So
Speaker 3: it did come out wasn't anything I think that was
Speaker 3: too surprising as far as the new features, as far
Speaker 3: as the new you know, applications and the way that
Speaker 3: it all is being integrated across the you know, the ecosystem.
Speaker 3: But I think right now we're seeing a little bit
Speaker 3: of a pullback. Not incredibly dramatic given how much it's
Speaker 3: been coming up ahead of it, but it does seem like,
Speaker 3: you know, as far as the drecting, will this be
Speaker 3: enough for people to you know, trade in and you know,
Speaker 3: spend more than thousand dollars in a new phone.
Speaker 4: That's what I wanted.
Speaker 5: We wanted to get with you, and like we've been
Speaker 5: getting into some of the fundamentals off of the event
Speaker 5: on the West Coast around Apple. But Ryan, when you
Speaker 5: look at the share price in the bounce back that
Speaker 5: we have had, as we note this four hundred and
Speaker 5: seventy one billion dollar rally off of what the lows
Speaker 5: you know, that we've seen in Apple. You know that's
Speaker 5: even though the stock is a little change, it's had
Speaker 5: quite a bounce back. How much of or what is
Speaker 5: that enthusiasm or that bounce back reflect And as you said,
Speaker 5: Apple shares a little bit lower, but maybe not such
Speaker 5: a big deal considering the bounce back we've had.
Speaker 3: Yeah, So one thing I would say is that early
Speaker 3: in May it had its latest quarterly report and it's
Speaker 3: pretty encouraging. The forecast is seen as pretty encouraging, pointing
Speaker 3: to a return to growth kind of ease some concerns
Speaker 3: about the date of sales out of China, which is
Speaker 3: an incredibly important market for them, and there has been
Speaker 3: a lot of optimism about AI. And of course in
Speaker 3: that quarterly report, Apple did announce the largest stock buyback
Speaker 3: program in US history, one hundred and ten billion. I
Speaker 3: think that is helping to put a flaw under the
Speaker 3: stock if nothing else, you know, and certainly if you
Speaker 3: look at Apple on evaluation basis, especially with respect to
Speaker 3: the growth, that might screen as you know, somewhat pricey.
Speaker 3: But if you look at it as far as all
Speaker 3: the quality characteristics with respect to the buyback, with respect
Speaker 3: to cash flow, profitability, you know, all that kind of
Speaker 3: stuff that does screen is pretty you know, screen is
Speaker 3: pretty strong on those So I think that's also been
Speaker 3: you know, there is sort of a view that apples
Speaker 3: is safety and maybe it's not as pronounced as it
Speaker 3: was in past times. Growth is a little bit more robust,
Speaker 3: but certainly it's it's part of it.
Speaker 5: Here, all right. Apple shares down one point eighty percent.
Speaker 5: Ryan lestealka Bloomberg News equities reporter, joining us there in Chicago.
Speaker 5: We're going to stay with Apple.
Speaker 2: Let's bring in a Bloomberg News Chief Technology course, Mark German,
Speaker 2: who joins us from LA Mark. Tim Cook has wrapped
Speaker 2: up his comments. They began. The WWDC kicked off I
Speaker 2: should say, at one pm Wall Street time, so it's
Speaker 2: been a couple hours. Biggest headlines so far, give them
Speaker 2: to us.
Speaker 6: The biggest headline is probably the open AI partnership that
Speaker 6: we have been talking about for several months.
Speaker 2: I knew that because you told us about it, Mark, yes,
Speaker 2: ahead of time.
Speaker 7: That was probably the highlight.
Speaker 6: But obviously that's part of the larger AI strategy, which
Speaker 6: is Apple Intelligence.
Speaker 7: As we also talked about now.
Speaker 6: The way they explain Apple Intelligence is AI for the
Speaker 6: rest of us, right. That harkens back to the old
Speaker 6: Apple school, old school Apple line, which is a computer
Speaker 6: for the rest of us, right, And so this is
Speaker 6: a more friendly approach to AI. This is AI integrated
Speaker 6: deeply inside of applications, things like summarizing notifications, writing tools,
Speaker 6: image editing, much improved version of Siri. So the AI
Speaker 6: was the focus of the event. The other stuff sort
Speaker 6: of took you know, was pushed onto the back burner.
Speaker 6: They started off by talking about more customizable home screen
Speaker 6: on the iPhone and iPad, some new gesture controls to
Speaker 6: operate the vision pro But of course the highlights were,
Speaker 6: of course the experience coming for AI to the iPhone,
Speaker 6: the iPad of the Mac and so it's going to
Speaker 6: be quite significant for Apple. It's very clear to me
Speaker 6: that they're starting off pretty slow here. They're going to
Speaker 6: expand over time.
Speaker 5: A couple questions, so AI for the rest of us
Speaker 5: marketing our innovation in.
Speaker 6: Your view, Well, it's marketing based on what they have
Speaker 6: available to them.
Speaker 7: Right.
Speaker 6: This is as far as they could take their AI
Speaker 6: feature set for the time being, and so they're going
Speaker 6: to market around that. Their AI is not as advanced
Speaker 6: as what open ai is able to offer at this
Speaker 6: point or Google Gemini. That's why they're partnering with open
Speaker 6: Ai on integrating chat GPT into a chatbot inside of
Speaker 6: the iPhone experience. That's why they're still talking to Google
Speaker 6: Gemini and Anthropic about integrating their large language models into
Speaker 6: the iPhone as well.
Speaker 5: Do they go ahead, Carol, Well, the one thing I
Speaker 5: was going to say is, I'm a real observer. It's
Speaker 5: just kind of who I am as a personality slow
Speaker 5: and steady sometimes, but slow and steady sometimes wins the race.
Speaker 5: And do you feel that way with Apple, that you're
Speaker 5: okay that they're kind of slow going? I mean right,
Speaker 5: We often remind everybody they weren't the first out with
Speaker 5: a smartphone, but look at where they are today. So
Speaker 5: how you understand this company, how it fits into the
Speaker 5: broader kind of bigger tech world, if you will, slow
Speaker 5: and steady okay for you.
Speaker 7: Carol, here's the difference.
Speaker 6: You're right that Apple's typically not the first to a
Speaker 6: new product category, but they're also always the best. The iPhone,
Speaker 6: it wasn't the first smartphone, but it blew everything before
Speaker 6: it out of the water. You saw the same thing
Speaker 6: with the iPod before it, the iPad after the iPhone.
Speaker 6: You can even say the same thing about AirPods for
Speaker 6: earbuds and the Apple Watch for smart watches. You saw
Speaker 6: nothing today that's better than the competition. You saw nothing
Speaker 6: today that's different from the competition except marketing and a
Speaker 6: focus on privacy. Right, So that's the difference here. They're
Speaker 6: not the first, but they're also not the best, and
Speaker 6: they're not the most advance. They're here extremely late, and
Speaker 6: they showed up to the party without a gift, right,
Speaker 6: they didn't bring much new to the table here.
Speaker 2: Who's doing what they want to be doing?
Speaker 1: Mark?
Speaker 2: But better right now?
Speaker 7: Well, Google Open Ai.
Speaker 6: Samsung's AI features were pretty impressive with the S twenty four,
Speaker 6: and Apple's are pretty much in line with that.
Speaker 7: Now.
Speaker 6: The interesting part is they've really teased that this is
Speaker 6: going to improve.
Speaker 7: And get better over the next year or so.
Speaker 6: We could be having this conversation one you're from now
Speaker 6: in the series features and the AI functionality will be
Speaker 6: so much better than.
Speaker 7: This today right now.
Speaker 6: This is also only starting in US English, so there's
Speaker 6: a lot of market improvements that are going to need
Speaker 6: to make to roll this out as well.
Speaker 2: Hey, Mark gil Lorio over at d Davidson made the
Speaker 2: point to us a little earlier about the and he
Speaker 2: cited your work over the last few weeks about the
Speaker 2: iPhone fifteen pro supporting the new features, and he said
Speaker 2: this was before it was announced a little over an
Speaker 2: hour ago. Had this could be like a moment with
Speaker 2: the iPhone, the five G iPhone, and I think it
Speaker 2: was was it the twelve mark the first iPhone that
Speaker 2: did five G A sort of the precedent for a
Speaker 2: big upgrade cycle as a result of a piece of
Speaker 2: hardware that is not backwards compatible, software that's not backwards
Speaker 2: compatible with older hardware. Do did we see anything today
Speaker 2: that prompts people to go out and buy a new phone,
Speaker 2: even if they have a fourteen or a not a
Speaker 2: fifteen Pro, that will get them to buy new hardware.
Speaker 6: Well, I think when they announced the iPhone sixteen, clearly
Speaker 6: their central marketing point on the devices this fall is
Speaker 6: going to be the AI features.
Speaker 7: Right, The AI features.
Speaker 6: Are going to come out alongside the iPhone sixteen. So
Speaker 6: if you want these AI features, you're going to have
Speaker 6: to get the sixteen unless you have a fifteen Pro already.
Speaker 6: So I definitely think that this is going to be
Speaker 6: a huge sales point and it's going to spurn upgrade cycle.
Speaker 7: For sure.
Speaker 6: People are going to want the AI features.
Speaker 5: It's interesting, like I'm looking at our live blog and
Speaker 5: just you know, we take after months of mystery over
Speaker 5: Apple's AI strategy, took a step taken by nearly every
Speaker 5: other tech company integrates some open AI models into your
Speaker 5: products for features like text generation. To me, it just
Speaker 5: is like all right, everybody you wanted think AI. You
Speaker 5: got to keep thinking about open AI like that is
Speaker 5: the leader. That's the company that everybody wants to kind
Speaker 5: of play around with. I don't know, like, as you
Speaker 5: look at AI and Apple going forward, is it something
Speaker 5: that they can innovate on their own or they've got
Speaker 5: to partner along with others at this point.
Speaker 7: For now, they have to partner with others.
Speaker 6: The hope internally is within a few years they could
Speaker 6: you do this entirely on their own. I anticipate that
Speaker 6: happening eventually. They need to get their large language models
Speaker 6: up the snuff. The future of the company and the
Speaker 6: future of their hardware really depends on it. So I
Speaker 6: certainly expect them to upgrade their AI capabilities over time
Speaker 6: and move away from these partnerships.
Speaker 5: There's more stuff this week. As we were just talking
Speaker 5: with our scarlet food and she's like, you know, it's
Speaker 5: a whole week long thing. Is there anything more that
Speaker 5: you are focusing on? There's more to come or this
Speaker 5: was really kind of the big deal.
Speaker 6: Well, it is a whole week thing, right, But the
Speaker 6: rest of the week is labs and classes for developers
Speaker 6: integrate the new features and APIs into their application.
Speaker 7: So there's no more news coming.
Speaker 2: Okay, So in terms of the news that that already came,
Speaker 2: what isn't again? This is mark this is the Worldwide
Speaker 2: Developers Conference. I mean, I think it's fair to say, typically,
Speaker 2: with maybe the exception of last year when they unveiled
Speaker 2: the Vision pro, typically this is really geared toward developers
Speaker 2: and it doesn't necessarily make a ton of news outside
Speaker 2: of the developer world. What do you think we'll see
Speaker 2: from developers who are going to, you know, take advantage
Speaker 2: of what Apple's offering in terms of tools to them.
Speaker 6: Well, I think developers are going to be curious how
Speaker 6: they can integrate AI into their applications with sort of
Speaker 6: frameworks are going to be available to sort of aiify
Speaker 6: their apps? Will they be able to use the new
Speaker 6: writing tools, will they be able to use the new
Speaker 6: image generation features?
Speaker 7: Right?
Speaker 6: And the answer to many of those questions is yes,
Speaker 6: and it's going to We're really looking out to see
Speaker 6: what types of new applications will be enabled by Apple
Speaker 6: rolling out these AI features. I certainly think that there's
Speaker 6: going to be a wave of new AI apps. There's
Speaker 6: not going to be an AI app store, as some
Speaker 6: have said, but you know, Apple's here integrating AI heavily
Speaker 6: across its ecosystem, and that's a positive for the market.
Speaker 2: Okay, speaking of the ecosystem, I mentioned Vision Pro. It's
Speaker 2: been out, it's been announced for a year. Did we
Speaker 2: get updates on Vision Pro today.
Speaker 6: Yeah, so it's going international as we've been expecting. The
Speaker 6: new Vision OS two point zero, Well, there wasn't a
Speaker 6: lot to it. Some new gestures for opening control center
Speaker 6: and opening your home screen, some upgrades to some of
Speaker 6: their applications. You can airplay content into the Vision Pro,
Speaker 6: some new environments, and the ability to see your keyboard
Speaker 6: while typing if you're using a physical keyboard. That's all,
Speaker 6: you know. Exciting, nothing breakthrough AHO, A bunch of little
Speaker 6: catchup stuff.
Speaker 5: All right, I have two last questions for you. Your
Speaker 5: story that's out on the Bloomberg, which I highly recommend
Speaker 5: everybody check out. This was kind of the setting up
Speaker 5: but also the post. But it initially said Apple event
Speaker 5: will show whether it can be a force in the
Speaker 5: AI industry, Kennet, Did you get that? Did they show that?
Speaker 6: Well, it can be a force in the AI industry
Speaker 6: with the right partnerships, and they made the right partnerships
Speaker 6: and with the right applications, and with their new frameworks,
Speaker 6: they're hoping they enabled the right applications. So I'd say
Speaker 6: the answer is equivocally yes.
Speaker 5: All right, last question, you're sitting down with Tim Cook.
Speaker 5: What's the number one question this after today's event?
Speaker 7: What's the number one question for Tim Cook? Yeah?
Speaker 6: Where are all the other breakthrough new features? How are
Speaker 6: you going to get people to really buy these phones?
Speaker 6: Where's the shake up to iOS? I mean, we're getting
Speaker 6: Apple Intelligence, but the overall operating system still feels little stale.
Speaker 2: Carol, I'm going to wager that Tim Cook probably has
Speaker 2: a lot of questions for Mark Germatt based on Mark
Speaker 2: supporting over the years.
Speaker 5: Can we also ask him Mark, you know, did he
Speaker 5: do Apple intelligence like the Bloomberg Intelligence? Was he looking
Speaker 5: at us? Maybe he took a queue?
Speaker 7: No, I think they just swapped artificial with Apple.
Speaker 5: Just a marketing Well done, well done, listen, thank you
Speaker 5: so much. We know you've been busy in the lead
Speaker 5: up to this, so good to get some time with you.
Speaker 5: Of course, he is Mark German, He's our Bloomberg newschief
Speaker 5: technology correspond It be sure to check them out on
Speaker 5: the Bloomberg terminal. Also at Bloomberg dot Com.
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Speaker 5: Remember everybody, how we keep reminding you that a top year,
Speaker 5: top risk for this year for investors and really kind
Speaker 5: of the world more broadly, geopolitics and global elections. On that.
Speaker 5: After crushing defeat in the parliament elections yesterday European Parliament
Speaker 5: election yesterday, President Emmanuel Macron plunged France into political uncertainty
Speaker 5: with a snap legislative ballot that restages his perennial battle
Speaker 5: with far right rival Marine La penn So we are
Speaker 5: watching this closely, but there's a lot more going on too.
Speaker 2: Yeah, because the election result highlights the increasing rejection of
Speaker 2: mainstream politics and left the credibility of the blocks two
Speaker 2: most important leaders in tatters economics and politics. Carol continue
Speaker 2: connect and drive outcomes they always have, but are today
Speaker 2: increasingly upbending the status quo and the expected in driving
Speaker 2: a populism wave around the world.
Speaker 5: We're seeing it happen in real time with more on
Speaker 5: the connectivity of it all. Let's bring in Bloomberg News
Speaker 5: Global Economy reporter Enda Current he is in our DC bureau.
Speaker 5: Elections around the globe, the rise and political uncertainty take
Speaker 5: France over the weekend. Much has to do with global
Speaker 5: citizens kind of having had enough of the way it
Speaker 5: is and feeling like they are being left behind. That
Speaker 5: we are seeing increasingly around the world.
Speaker 8: Yeah, absolutely right, as you say, this was you know,
Speaker 8: Pete up was the year of the elections anyway, and
Speaker 8: it really is playing out that there is a commonality
Speaker 8: of voters are resentful and they are punishing they're ruling governments.
Speaker 8: Not in every case, of course, but in some of
Speaker 8: the big cases. We had India last week not triggered
Speaker 8: a big shock in financial markets. Now we have the
Speaker 8: European Parliament elections over the weekend that swing to the right,
Speaker 8: especially in France, triggering shockwaves in financial markets, especially because
Speaker 8: mccrown is calling the legislative elections there as well. So
Speaker 8: we are now seeing the shock risk of these elections
Speaker 8: playing out, and a kind of a common underlying theme
Speaker 8: that people are expressing their discontent with governments, even in
Speaker 8: cases where broadly speaking, the economy is doing okay, which
Speaker 8: you could argue for the case of France and India,
Speaker 8: markets doing k but that's rightly wrongly not flowing down
Speaker 8: to people on the ground and they're expressing their frustration
Speaker 8: in these ballots.
Speaker 2: So where would you say, and that discontent is coming from.
Speaker 2: Does it have to do with individual's economic situation, Does
Speaker 2: it have to do with inflation, Does it have to
Speaker 2: do with immigration? Where are we hearing and seeing in
Speaker 2: polls the discontent coming from.
Speaker 8: Well, if you take France in the case there of
Speaker 8: Jordan Barbell in the national rally the La Penn opposition
Speaker 8: to Macron. During the European elections a common theme. There
Speaker 8: was opposition to European trade policy, opposition to European climate policy,
Speaker 8: and of course a harsher line on immigration, and that
Speaker 8: of course feeding in to discontent among populists everywhere in
Speaker 8: terms of the cost of living and economic pressures that
Speaker 8: they're under. Even as headline economic growth looks okay, France
Speaker 8: is doing relatively okay versus other parts of Europe. It's
Speaker 8: a pro business agenda there. Under President mccron, it's been
Speaker 8: seen as somewhat as a reasonable performer. Economic performance for France,
Speaker 8: but obviously that's not transnding down to people on the ground,
Speaker 8: and the same in India. By the way, we all know,
Speaker 8: India is famous, this global star, economical performer, one of
Speaker 8: the fastest growing in the world, an alternative to China.
Speaker 8: For foreign investment in the markets they're booming. Everyone talking
Speaker 8: about forign investment going into India. But obviously, when we
Speaker 8: saw the election results, people on the ground unhappy, and
Speaker 8: I think a lot of it is coming down to
Speaker 8: its cost of living pressures. And of course you can
Speaker 8: drop parallel with India western urban and some of the
Speaker 8: mood in the US too.
Speaker 5: So I have to say, when Tim and I are
Speaker 5: preparing in our team or preparing for today's show, this
Speaker 5: hour and really the next two hours that follow, We've
Speaker 5: got Peter Goodman coming up later on. He's global economics
Speaker 5: correspondent over at the New York Times. He's got a
Speaker 5: book How the World Ran Out of Everything, and really
Speaker 5: goes through some history lessons about kind of obviously what
Speaker 5: happened during the pandemic, but really how we got to
Speaker 5: that point where so much was made in one part
Speaker 5: of the world, China specifically, but also how it was
Speaker 5: all done on the backs of workers, and basically we
Speaker 5: got rid of some really well paying jobs, middle class
Speaker 5: working types of jobs, and two jobs that really paid
Speaker 5: a lot less. And just why there are so many
Speaker 5: individuals global citizens that are feeling kind of left out
Speaker 5: despite the market growing, you know, the global economy growing,
Speaker 5: and the wealthy getting wealthier. So you know, there's another
Speaker 5: story that our team has put out by Chris Sansty
Speaker 5: and looks at the Mexico election and talks about a
Speaker 5: warning and this looks into the new economy, but talks
Speaker 5: about populism can sometimes lead to results damage the very
Speaker 5: people who are rightfully seeking their fair share. I do
Speaker 5: wonder the pushback on globalization, the rise in populism, what
Speaker 5: that might mean ultimately, do investors look at different markets
Speaker 5: as investable not investable? I mean, what's that thinking and
Speaker 5: how you and your team are thinking about that?
Speaker 8: Absolutely right? I mean, this goes to the core of
Speaker 8: why there is such a realignment going on in if
Speaker 8: you want to call it, the Western industrialized world. That
Speaker 8: discontent on the ground that you talk about their Carol
Speaker 8: is forcing governments to either promote more industry at home
Speaker 8: poor more subsidies or tax breaks to generate investment at home.
Speaker 8: They're also looking at shaking up their supply lines for
Speaker 8: basic goods up to more higher value added goods. So
Speaker 8: there is a kind of very shuffling going on around
Speaker 8: the world to partly address some of these issues. Now,
Speaker 8: of course, that creates winners and losers, and that's where
Speaker 8: the investors come into it is the winners are going
Speaker 8: to be broadly speaking, the rich world who can afford
Speaker 8: to either subsidize industry at home or can four to
Speaker 8: shake up their supply lines, and they can attract investment
Speaker 8: from other parts of the world. And the investors are
Speaker 8: looking at those rich countries. And then the concern is
Speaker 8: that the poorer countries, who may be benefited from globalization
Speaker 8: in the first place, the emerging world can't compete on
Speaker 8: the same level playing field. They won't be able to
Speaker 8: attract investment in a way they once wore. But you
Speaker 8: know that said broadly speaking, you know that there are
Speaker 8: changes going on in global manufacturing, global supply lines, global investment.
Speaker 8: But let's just say when it comes to manufacturing, at
Speaker 8: least China and parts of the emerging world still offer
Speaker 8: a fairly compelling model. They offer scale, they offer cheaper
Speaker 8: workforces than the Western world. So you know this story,
Speaker 8: while of are changes going on, it still has a
Speaker 8: long way to go before before you could really call
Speaker 8: an end of globalization as we've known over the last
Speaker 8: twenty thirty years.
Speaker 5: Say, but that's what I want to explore with you.
Speaker 5: Like this idea of the cheaper workforce we keep lauding
Speaker 5: it is like, that's such a great thing. You know,
Speaker 5: we reduce costs, cheaper labor. That means profits go up
Speaker 5: and shareholders are happy and we can do more difends
Speaker 5: and buy back. So I do wonder. And then yet
Speaker 5: workers on the ground are saying, Man, I'm just I
Speaker 5: can't I can't make ends meet or not, you know,
Speaker 5: because the jobs are just not either as high paying
Speaker 5: as they used to do or there's so much pressure,
Speaker 5: and I just I do wonder. Economically, you know, this
Speaker 5: is resulting in kind of the political pushback that we're seeing.
Speaker 8: No, it is because if you want to call it
Speaker 8: the Western world for fragments, seg or the develop economy world,
Speaker 8: they they cannot afford the kind of manufacturing and much
Speaker 8: of the manufacturing that continues to be done in the
Speaker 8: emerging world and in China in particular, and even where
Speaker 8: wages do increase are increasing in China, it's still ultimately
Speaker 8: more competitive to do businesses there, or in Mexico or
Speaker 8: in Vietnam than I bring it back to say the
Speaker 8: US or Paris, where you've got union loans, we've got
Speaker 8: minimum wages, you've got all kinds of you know, rules
Speaker 8: and regulations to pay a living wage. So that competitive
Speaker 8: age still very much exists in favor of the emerging world.
Speaker 8: And you can argue, of course, the rights and wrongs
Speaker 8: with that, but multinationals aren't in a hurry to bring
Speaker 8: back those kinds of high paying But don't forget other
Speaker 8: factors that are played to. Automation is going to be a
Speaker 8: factor in all of this that we'll see production broad
Speaker 8: closer at home too, or in the years ahead.
Speaker 2: Hey, and I'm wondering if we can look to the
Speaker 2: results that we've seen in recent weeks with global elections
Speaker 2: and perhaps reading into the future of our country in
Speaker 2: the US. Here in our country, the United States, come November,
Speaker 2: is there any way to sort of look at what's
Speaker 2: happened around the world and get an understanding for the
Speaker 2: way that things are moving Come November well, you.
Speaker 8: Know, it's obviously idiosyncratic team. Everyone has their own story,
Speaker 8: their own gripes, their own complaints. But you'd have to say,
Speaker 8: you know, on the surface, at least even where countries
Speaker 8: are having a pretty good run economically, at least on
Speaker 8: a headline basis strong growth, strong investments, strong markets, that
Speaker 8: is necessarily translating into a happy mood among voters and
Speaker 8: that and that's creating discontent at the ballot box. I mean,
Speaker 8: that's showing up in the polls in the US, for example,
Speaker 8: people are citing economic and happiness and inflation. So that's
Speaker 8: one a Crallery could draw with them. And then more broadly,
Speaker 8: it's a tough time to be an incumbent in the
Speaker 8: UK election. Look a front India's pressure on. Coleman's notubt
Speaker 8: about it.
Speaker 2: Yeah, I was just going to say, Carol, when I
Speaker 2: knew was talking about the Bloomberg News Morning Console polls
Speaker 2: of swing state that's states that we've done here at
Speaker 2: Bloomberg News, right about the fact that many voters in
Speaker 2: these swing states. Do you think that Trump will lead
Speaker 2: better when it comes to the economy.
Speaker 5: Yeah, it's kind of interesting considering kind of the economic
Speaker 5: backdrop but that's politics, and it makes it always very
Speaker 5: interesting and as we've seen from some of the global
Speaker 5: electric elections, a bit unpredictable to say the least. And
Speaker 5: thank you so much covered what we were hoping to
Speaker 5: do on this Monday. Bloomberg News Global Economy Report. End
Speaker 5: of current.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Listen live
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Speaker 2: Well, Carol put this on my radar a little earlier.
Speaker 2: A main feature of the twenty twenty four labor market
Speaker 2: is that fewer people are quitting their jobs. A lesser
Speaker 2: known one. We knew that from the Jolts data as
Speaker 2: it quits right right. A lesser known one is that
Speaker 2: fewer are actually getting promoted.
Speaker 5: It's really interesting. So that leaves what little room for
Speaker 5: new workers to break through, as the ranks of employees
Speaker 5: above them are staying in place, and it makes it
Speaker 5: more difficult tim for young graduates to get their foot
Speaker 5: in the door.
Speaker 2: We got back with us. Janea senior policy advisor at
Speaker 2: Working Nation. It's a media company that focuses on the
Speaker 2: future of work. Jane also former Assistant Secretary of Employment
Speaker 2: and Training in the Obama administration. She joins us from Arlington, Virginia. Jane,
Speaker 2: how are you hey, Tim?
Speaker 1: Good?
Speaker 9: Nice to be back. Hi, Carol.
Speaker 2: Hi, Yeah, it's good to have you back with us.
Speaker 6: Hey.
Speaker 2: I just want to start with the blow out jobs
Speaker 2: number that we got last week. It came in above
Speaker 2: all economists surveyed by Bloomberg expectations. We get that, and
Speaker 2: then still based on surveys, people are not happy with
Speaker 2: what they're doing at work and they're not happy with
Speaker 2: the economy. What's going on.
Speaker 9: I mean, look, obviously the economy's tightening slightly. It couldn't
Speaker 9: stay where it was, you know, with with you know,
Speaker 9: three jobs for everybody looking so it's tightening a little bit.
Speaker 9: But you know, I think you're as usual, you know,
Speaker 9: you two follow the information trail. People are not moving.
Speaker 9: I mean, we saw all that stuff eighteen months ago
Speaker 9: about people quitting and people. People are not moving now
Speaker 9: and it's creating a real logjam. You know, we have
Speaker 9: four million people leaving college this time of year, and
Speaker 9: another million and a half leaving high school that want
Speaker 9: to go right into the workforce. It's going to be
Speaker 9: tough for the next few months.
Speaker 5: I don't get it. It's just kind of wild, right,
Speaker 5: Like we talk about a tight labor market, people need workers,
Speaker 5: and yet right, it's just these weird kind of I
Speaker 5: don't know, cross currents. It's hard to make sense to
Speaker 5: some extent about what really is going on in the
Speaker 5: labor market.
Speaker 9: I mean, look, Carol, some of its geography. There are
Speaker 9: all these jobs open, but they're in places where there
Speaker 9: aren't people looking. Some of it's a skills mismatch, and
Speaker 9: some of it I have to tell you, you know,
Speaker 9: I like to like blame the automated software that's looking
Speaker 9: at resumes. I think that businesses are missing a lot
Speaker 9: of talented people because whatever they forgot to put in
Speaker 9: their cover letter and on their resume isn't matching the
Speaker 9: language in the job description. So they're not getting the job.
Speaker 2: But does it work both ways? Does it work both ways?
Speaker 2: I was talking to somebody who was doing some hiring
Speaker 2: ahead of intern season, and she told me this is
Speaker 2: a shocking number. They're basically thirty places for interns at
Speaker 2: the organization that she works in. They got thousands of
Speaker 2: applications Jane for those thirty spots, and I'm thinking to myself,
Speaker 2: how are you getting so many applicants or people just
Speaker 2: doing this automatically? Are they sending how does this work?
Speaker 5: Yeah?
Speaker 9: I mean I think I think people are really interested
Speaker 9: in this paid internship thing. They realize that it's work
Speaker 9: based learning at its best because they don't make a
Speaker 9: long term commitment like in a registered apprenticeship probe. But
Speaker 9: they're able to get in see if they like the employer,
Speaker 9: see if they like the work. So it is really
Speaker 9: hot right now to get a paid internship. I'm an
Speaker 9: internship of any kind, but most people need the salary
Speaker 9: to go along with it. But I understand, I mean,
Speaker 9: you know, I hate I like business too much to
Speaker 9: hand on them. But I do think, you know, I
Speaker 9: know how conversome they have to keep their business going.
Speaker 9: They don't have time to look at thousands of applications
Speaker 9: for thirty open interns ships. You're right, Tim, I get that,
Speaker 9: all right.
Speaker 5: So I don't know what's that. You know, it's interesting.
Speaker 5: One of the things I keep saying and forgive us
Speaker 5: audience because I keep talking about Peter Goodman his new
Speaker 5: book out How the World Ran out of Everything, And
Speaker 5: you know, I keep thinking about the future workforce because
Speaker 5: it seems like globalization has really, you know, increasingly gotten
Speaker 5: rid of middle class, well paying jobs. It really allowed
Speaker 5: people to have a good life, buy a home, support
Speaker 5: their family, go on vacation, and that we've kind of
Speaker 5: gotten rid of a lot of those jobs in the
Speaker 5: middle sector, if you will, And I do wonder kind
Speaker 5: of if we're not fertility rates are low people, you know,
Speaker 5: where's the future workforce going to be? Is it going
Speaker 5: to be robotic automated AI? Like I'm trying to understand
Speaker 5: kind of where this all goes.
Speaker 9: Ultimately, Well, AI is going to influence every job that's
Speaker 9: out there, and it's also going to influence.
Speaker 5: But how we keep saying like these big broad things
Speaker 5: about AI, Jane, And I'm curious how you see specifically
Speaker 5: that AI, which has been around for decades and already
Speaker 5: impacts our world, how the next generation of AI and
Speaker 5: large language models and so on, really change significantly the workforce.
Speaker 9: So there's going to be some media changes that are
Speaker 9: easy to see and some that are less easy to describe.
Speaker 9: But let's look at PR firms, right. PR firms used
Speaker 9: to hire lots of people, junior staff. People would come in,
Speaker 9: they'd write the first draft of something for a customer,
Speaker 9: and then somebody more senior would edit it and finesse
Speaker 9: it because they know the customer better. Right now, people
Speaker 9: are using generative AI to do that first draft. So
Speaker 9: you see real slow down in hiring. You see a
Speaker 9: real problem in coding. You know, AI can write code
Speaker 9: faster than any human and basically all those people who
Speaker 9: went to coding camps ten years ago are looking at
Speaker 9: a very limited shelf life right now. Those are two
Speaker 9: easy examples.
Speaker 5: Isn't it amazing how we were telling everybody, Hey, you know,
Speaker 5: learn to code, right, code to that coding school.
Speaker 2: Yeah right, okay, so let's leave it on this last question.
Speaker 2: What should we be teaching our kids? We have about
Speaker 2: thirty seconds left.
Speaker 5: What kind of a weekly Yeah? Should they go to college?
Speaker 2: Should they get prompt AI? Prompt school?
Speaker 9: Prompt engineers are getting laid off now, tim too, because
Speaker 9: people realized you didn't have to have that title. But
Speaker 9: you know, uniquely human skills. All the things that we've
Speaker 9: been we've been talking about as employability skills learned the
Speaker 9: problem solve critical thinking, learn to work in a team
Speaker 9: learn sounds like a liberal arts education.
Speaker 2: Finally, my history put to good Liberal arts actually does.
Speaker 1: Yeah.
Speaker 9: Some data analytics. Put some data analytics skills.
Speaker 2: In there, all right, that part.
Speaker 5: I don't have my daughter's kind of doing this kind
Speaker 5: of stuff, all right for her? Good stuff? Yeah, all right.
Speaker 5: Jane Notes, thank you so much, Senior policy advisor at
Speaker 5: Working Nation, a media company that focuses on the future
Speaker 5: of work. She was a former Assistant Secretary of Employment
Speaker 5: and Training in the Obama administration.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Listen live
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Speaker 2: Thirty Kerrol our colleague Darrell Deliver reporting last month that
Speaker 2: three years after pandemic era funding led to a boom
Speaker 2: in black owned businesses in the US, the cohort of
Speaker 2: entrepreneurs seeking to expand is facing the same barriers to
Speaker 2: capital that hamper generations of owners before them.
Speaker 5: Yeah, we've seen this movie before. In twenty twenty three,
Speaker 5: just thirty two percent of black owners were fully approved
Speaker 5: for a loan or line of credit, compared to fifty
Speaker 5: six percent of white entrepreneurs. That's according to a March
Speaker 5: report from the twelve regional Federal Reserve Banks. Black owners
Speaker 5: to him were also likely more likely to have to
Speaker 5: use personal funds to address financial challenges, so tapping credit
Speaker 5: cards and things like that.
Speaker 8: Yeah.
Speaker 2: One organization trying to address this is Momentous Capital. It's
Speaker 2: a nonprofit and it just announced a one hundred and
Speaker 2: seventy one million dollar fund to invest in small businesses
Speaker 2: that are creating social impact in underinvested communities. Irael Nilsa
Speaker 2: Lopez is managing director of Investments at Momentous Capital. She
Speaker 2: joins us from Brooklyn Eran. Also, good to have you
Speaker 2: with us this afternoon. I think the big question I
Speaker 2: have is about the structure of the organization, because when
Speaker 2: we talk about our companies or bodies that invest in
Speaker 2: other companies by provide capital to them, so much we
Speaker 2: talk about is in the for profit space. Give me
Speaker 2: some details about the structure of Momentous Capital that allows
Speaker 2: it to be a nonprofit that makes these type of
Speaker 2: investments that's looking for return certainly.
Speaker 10: So Momentus Capital is a brand of organizations which include
Speaker 10: mission mission driven lenders, so it includes Capital Impact Partners
Speaker 10: and includes CDC small Business lending. And these organizations have
Speaker 10: over forty years of experience lending to small businesses and
Speaker 10: also operating in the underserved community space. And so when
Speaker 10: we speak about these organizations, yes they are nonprofit. However,
Speaker 10: our fund, the Equitable Prosperity Fund, is actually a third
Speaker 10: party fund that we came together alongside aligned investors. So
Speaker 10: we have over twenty limited partners that make up this fund,
Speaker 10: which does include Momentus Capital, but it also includes our
Speaker 10: aligned partners for many years and also from new partners.
Speaker 10: So we have financial institutions, we have high net worth individuals,
Speaker 10: family offices, corporations, and also charitable foundation. So it's sort
Speaker 10: of a blended capital structure which exists as its own fund.
Speaker 10: That's one hundred and seventy one million dollar fund, and
Speaker 10: that's the fund that is able to make these private
Speaker 10: investments into these small businesses.
Speaker 2: And talk a little bit about the expectation at least
Speaker 2: timeline for returns. Here we're talking expectations are three to
Speaker 2: five years to see a return.
Speaker 10: Those are the individual investments and how they're structured. Yes,
Speaker 10: the fund itself is your standard run of the mill,
Speaker 10: ten year close ended private equity fund. The way which
Speaker 10: we structure it with our investors, each investment as a
Speaker 10: whole is structured to be along the three to five
Speaker 10: year You know, nothing's written in stone, but that's where
Speaker 10: we have found where we can provide growth capital in
Speaker 10: an adequate amount of time, do also at the same
Speaker 10: time liquid date and provide the return to the investor. Well,
Speaker 10: at the same time, the growth capital itself can be
Speaker 10: used to grow by the entrepreneur.
Speaker 2: Explain that the type of capital that you offer you
Speaker 2: said growth capital, but you also say it's non delutied.
Speaker 2: So does that mean you're giving loans to these companies.
Speaker 10: Yes, Actually, that's a great question. It's a question we
Speaker 10: get almost every day. And so the next is the
Speaker 10: reason for this fund is because we have found, again
Speaker 10: the over four decades of experience, is that entrepreneurs are
Speaker 10: oftentimes the structure of a traditional debt instrument is often
Speaker 10: lacking for some of these entrepreneur Entrepreneurs that don't fit
Speaker 10: the mole either is a personal guarantee, collateral based fixed
Speaker 10: payments in payments that don't align with the businesses specific
Speaker 10: cash flows. On the under hand, you have equity, and
Speaker 10: then you have equity where you imagine you're an entrepreneur,
Speaker 10: you've built your business to family business, and then you
Speaker 10: sort of have to give a piece of it to
Speaker 10: a new institutional provider capital provider. So our instrument lies
Speaker 10: somewhere in the middle. So it's much more patient capital.
Speaker 10: It's revenue based repayments, profit based finance, meaning we are
Speaker 10: taking the growth risk alongside the business, and so we
Speaker 10: structure our investments so that it's a revenue based sort
Speaker 10: of repayment structure, so that if the business requires maybe
Speaker 10: a couple of years for that capital to really begin
Speaker 10: to leverage in returns, we're there with the business until
Speaker 10: it does begin doing so. And then we don't take
Speaker 10: any shriff. We have no ownership stake, we have a
Speaker 10: preferred equity stake, and so you have What we try
Speaker 10: to do is we try to give the best of
Speaker 10: both worlds, and so it's not a traditional debt structure
Speaker 10: where there is no personal guaranty, there are no collateral,
Speaker 10: no fixed payments expected. However we're not there forever, we
Speaker 10: have a structure that is a self liquidating in a sense,
Speaker 10: so we also hope for our own investor's stake to
Speaker 10: provide them that liquidity that also your traditional equity investments
Speaker 10: don't provide, which is oftentimes a very heavy back ended
Speaker 10: exit risk.
Speaker 2: Ural Also, would you say that it I mean, would
Speaker 2: it be fair to call it sort of in the
Speaker 2: private credit universe?
Speaker 10: Is a payable right, It's certainly a payable yes, I
Speaker 10: would say, we'd like to say it's it's an instrument. Well,
Speaker 10: we don't like to call it alone all because ultimately
Speaker 10: there is it's an open ended redemption period. The redemption
Speaker 10: period is defined by when we do receive these these returns.
Speaker 10: So if it takes the company a little bit longer
Speaker 10: than that five years, that's just the way we structure
Speaker 10: the instrument. So we are there to make sure that
Speaker 10: we benefit and we are repaid when the company is
Speaker 10: inspect doing well with our capital.
Speaker 5: So just so that I understand, So then what's typically
Speaker 5: the return to investors, and then what's the cost to
Speaker 5: those that are borrowing or partnering up with you and
Speaker 5: getting the inflation of capital.
Speaker 10: Yeah, the return we're targeting, it's a market return. So
Speaker 10: we are targeting commercial returns and I would say, without
Speaker 10: getting too specific, of course, to it for our investors.
Speaker 10: And the cost is somewhere along between the I would
Speaker 10: say subordinated debt and equity sort of expectations. And the
Speaker 10: reason for that is because of the highly subordinate nature
Speaker 10: of our instrument.
Speaker 3: What we want to do with.
Speaker 10: The instrument is not just provide the capital, but also
Speaker 10: crowd in additional capital that maybe needed. So the use
Speaker 10: of our funds is for growth, but ultimately these companies
Speaker 10: will similarly have working capital needs or just other continued
Speaker 10: funding needs, and so we're not there to take up
Speaker 10: any sort of asset planes or collateral planes. And so
Speaker 10: what we would like to do is have other lenders
Speaker 10: look at the company and say, well, we have some
Speaker 10: level of comfort that there's this institutional investor in there,
Speaker 10: and also that they have become subordinate to any senior lending.
Speaker 10: And so we're there to provide senior lenders with some comfort.
Speaker 10: And so you can imagine the risk return profile of
Speaker 10: that being somewhere in the middle.
Speaker 5: Give us an idea. We've got about a minute left
Speaker 5: of some of the companies that you've invested in, what's
Speaker 5: the typical size that a lender or borrow or excuse
Speaker 5: me needs give us an idea and what type of
Speaker 5: businesses are we talking about?
Speaker 10: Yeah, so we would like to target investments, particularly that
Speaker 10: serve underserved communities, but particularly we're focused on improving access
Speaker 10: to healthcare and improving access to healthy foods. So one
Speaker 10: of our investments is a a healthy food distributor that
Speaker 10: works with diverse farmers in Virginia and distributes healthy foods
Speaker 10: to underserved populations in Washington, DC. So that's one of
Speaker 10: our investments. Another one of investments is a medical image
Speaker 10: and company where our growth investment was used to grow
Speaker 10: and develop a teles scan for maternal health screenings in
Speaker 10: healthcare deserts. So the typical size of our investments tends
Speaker 10: to be between three or five million, which does translate
Speaker 10: to companies that would begin with maybe a four million
Speaker 10: dollar revenue size.
Speaker 5: Do all of them survive? Just got about fifteen seconds?
Speaker 5: Do they make it?
Speaker 3: Yeah?
Speaker 10: I mean, listen, our portfolio is healthy today. We we
Speaker 10: just closed, but we have about two years in so
Speaker 10: our cooling's doing well so far.
Speaker 2: And Elsa Lopez, Managing director of Investments over at Momentous Capital,
Speaker 2: joining us from New York. Thank you so much.
Speaker 1: I'm brother Marco, a journal How about you let me drive?
Speaker 8: Oh no, no, no, no, who's going?
Speaker 1: Alright? Please, I'll do the gravel. Let's wait, I want
Speaker 1: to drive. It's a good question. This is the drive
Speaker 1: to the clothes do well round? Should it on? On
Speaker 1: Blueberg Radio? All right, TikTok?
Speaker 5: Everybody, jest about thirteen minutes left, just under thirteen minutes
Speaker 5: left in today's trading. We've got equities near just off
Speaker 5: their best levels of the session. And you heard Charlie
Speaker 5: breaking down some of our focal points. You've got yields.
Speaker 5: Certainly they have moved up coming off of that Fridays report.
Speaker 5: So that's kind of our backdrop, macro backdrop. As we
Speaker 5: are counting Dallas than forty eight hours away from the
Speaker 5: next FED decision.
Speaker 2: What are you going to count down after that?
Speaker 5: I don't know, You know me, you'll find something ning.
Speaker 2: Hey, that chuckling you here is a polite chuckle from Carolschlife.
Speaker 2: She's chief investment officer over at the Low Family office.
Speaker 2: She's here in the studio right now. Good to see you.
Speaker 1: How are you.
Speaker 4: It's great to be here. It's lovely to be in
Speaker 4: New York. I love the energy.
Speaker 2: What do you think of that?
Speaker 5: Right now?
Speaker 4: I love the energy? And actually I was astounded at
Speaker 4: the airport last night in Mini. It was no Minneapolis.
Speaker 4: It was so busy. And every airport I've been in,
Speaker 4: except for Milwaukee last week, every airport I've been in,
Speaker 4: it has been packed. Every plane's been packed. So it's
Speaker 4: positive for our year end expectation that we actually see
Speaker 4: the economy firmer by your end.
Speaker 2: So are you are you using that anecdotal data to
Speaker 2: sort of inform the way you're thinking about the economy.
Speaker 4: I think it helps contribute, But so do conversations with
Speaker 4: our commercial bankers, sort of conversations with my clients who
Speaker 4: are still active business owners in a variety of different
Speaker 4: parts of this economy, from basic manufacturing, so they're impacted
Speaker 4: by tariffs, by they were impacted definitely by trying to
Speaker 4: get imports in through the port's import you know, we've
Speaker 4: got all kinds of stuff.
Speaker 5: Okay, So, like I said, our audience is going to
Speaker 5: hate us at this point because since we've been on
Speaker 5: air since two o'clock. All we keep talking about is
Speaker 5: this book by Peter Goodman, How the World Ran out
Speaker 5: of Everything, But it really taps into globalization and kind
Speaker 5: of where we are, and then it kind of gets
Speaker 5: into why a lot of workers don't necessarily feel good
Speaker 5: because either their jobs they don't have them anymore, they
Speaker 5: were they were good paying jobs. Take the audio industry,
Speaker 5: and then maybe that's why you see some of the
Speaker 5: political polls or elections globally play out like they are exactly.
Speaker 4: There's such a disconnect because you know, back from decades
Speaker 4: ago when we were all reading about the world is
Speaker 4: flat and the globalization and all the FP and A departments,
Speaker 4: we're telling everybody to outsource, outs ors, outsource right and
Speaker 4: thinking and forgetting about the second and third impacts of that,
Speaker 4: which is where, oh jeez, if the consumer decides they
Speaker 4: like blue not purple, then it's months and months and
Speaker 4: months to get it back over here. And there's a
Speaker 4: lot of people that got left in the dust. And
Speaker 4: it's and I think when you look at the Harris
Speaker 4: Pool in terms of the people that think the markets.
Speaker 2: I can't stop talking about this.
Speaker 4: They think the market's down.
Speaker 5: They what do you do with that.
Speaker 4: I think the biggest thing we do with that is
Speaker 4: we get younger people engaged. And because you've got two
Speaker 4: different contingents, you've got the baby boom driving politics, but
Speaker 4: you've got millennials and gen z, which are bigger populations together,
Speaker 4: all turning thirty five ish wanting to buy homes which
Speaker 4: they can't afford, you know, without a co sign by
Speaker 4: mom and dad, and they can't pay off.
Speaker 5: See co sign on the school loans and then you
Speaker 5: co sign on the house and then you like, I mean,
Speaker 5: it's kind of crazy.
Speaker 2: Yeah, I just want to jump in real quick. If
Speaker 2: people don't know the Harris Pool that I'm talking about
Speaker 2: that Carol just mentioned, it's a Hair's poll for the
Speaker 2: Guardian shows that fifty five percent believe the economy is shrinking.
Speaker 2: It's a troubling sign.
Speaker 4: Markets are down, yeah.
Speaker 2: Forty nine percent believe the S and B. Veenan's stock
Speaker 2: market index is down for the year. That the index
Speaker 2: went up twenty four percent last year and it's up
Speaker 2: more than twelve percent this year. This was as of
Speaker 2: May twenty second, when the Guardian came out with this,
Speaker 2: And forty nine percent believe that the unemployment rate is
Speaker 2: at a fifty year high, though the unemployment rate has
Speaker 2: been under four percent, a year fifty year low. This
Speaker 2: again coming from The Guardian. They teamed up with the
Speaker 2: Harris Poll last month for.
Speaker 4: This wast it's because so much of the population has
Speaker 4: been left behind and that outsourcing and now we have
Speaker 4: a shot at bringing some of it back here. In
Speaker 4: terms of manufacturing infrastructure, one of the interesting anecdotes I
Speaker 4: picked up is that unibonded issuance is the highest in
Speaker 4: the first year to date as it's been since here
Speaker 4: early twenty tens.
Speaker 5: Interesting stuff coming back and needing to build things out.
Speaker 4: Yeah, which means schools, roads, bridges and so if you're
Speaker 4: pulling the funds in in the last five months that
Speaker 4: has yet to be put into the ground or people
Speaker 4: hired to build those. So I mean a lot of
Speaker 4: our basic jobs. We have to rethink our economy in
Speaker 4: general because you've got AI on the one side, but
Speaker 4: we also have huge need for welders and electricians and
Speaker 4: skilled workers to run the plants that we're going to
Speaker 4: have because these aren't going to be the old These
Speaker 4: aren't going to be our grandfather's manufacturing plants. They're going
Speaker 4: to be new manufacturing plants with fewer tech enabled people.
Speaker 5: So what does that mean, Like you mentioned you've been
Speaker 5: talking to commercial bankers that you work with business owners,
Speaker 5: what do the business owners say about, Okay, how if
Speaker 5: we are doing more things our supply chain back home,
Speaker 5: it's going to be a more expensive supply chain, I
Speaker 5: would assume. So when we think about that cost side
Speaker 5: to their equation trying to run profitable businesses, and I
Speaker 5: think on the public market side of things, where investors
Speaker 5: care about things like buybacks and dividends, the cost equation
Speaker 5: change is like, how does the investment environment change?
Speaker 4: Well, the interest thing is is if you look at
Speaker 4: a long term chart of margins, they're coming off of
Speaker 4: historic eys and they've been at highs for a very
Speaker 4: long period of time. These aren't the margins we had
Speaker 4: when we were a manufacturing dominant.
Speaker 5: Society benefiting by globalization exactly.
Speaker 4: Well, benefiting by globalization and technology.
Speaker 5: Okay, And so to the extent.
Speaker 4: That we can get AI in there and figured out
Speaker 4: how to work smarter in those factories. Yet in the
Speaker 4: long run, our suspicion is it that margins don't have
Speaker 4: to be two hit In the short run, it's tough
Speaker 4: to be a public company as opposed to a private company,
Speaker 4: because a private company you can do those sorts of investments,
Speaker 4: rearrange your business, and then go public if you want
Speaker 4: once you've done that. But it's tough for because investors
Speaker 4: do demand that quarter to quarter, so we need CEOs. Actually,
Speaker 4: if they could get together and say, no, here's our
Speaker 4: long term vision because a lot of our lot of countries.
Speaker 4: You take a country like China that can plan for
Speaker 4: the long term and trash rarnings, well.
Speaker 2: We know shareholders are notoriously patient.
Speaker 7: We'll see that.
Speaker 5: But that's the thing, like I do wonder. First of all,
Speaker 5: we Tim and I keep hearing where there's so much
Speaker 5: money in the private markets that it's like highly recommending
Speaker 5: younger companies to just stay private because they can benefit.
Speaker 5: So that it makes me wonder from what we do
Speaker 5: on a regular basis in a big way is cover
Speaker 5: the public markets. It makes me wonder about like the
Speaker 5: future of the public markets.
Speaker 4: I suspect you'll get you may not have a ninety
Speaker 4: five to two thousand kind of a rusher in nineteen
Speaker 4: eighty two to eighty three sort of IPO boom, but
Speaker 4: I would suspect sooner or later, even that most patient
Speaker 4: capital gets itchy in good markets to see it out.
Speaker 4: We'll see the test because you know, the so called
Speaker 4: IPO window is hopefully opening. We're wishing it would open
Speaker 4: and ready to do.
Speaker 5: Good equity folks would like for it to open.
Speaker 6: It.
Speaker 4: Yeah, and there are so many signs that it's opening
Speaker 4: a little bit, there are, And I mean it all
Speaker 4: depends on if you can get those deals out and
Speaker 4: they generate more deals. I mean investors are anxious for
Speaker 4: that to have.
Speaker 5: Do you want to ask about can we ask about Apple?
Speaker 5: Do you have a thought? I know you don't. I
Speaker 5: don't know how specific you can get and drill down,
Speaker 5: but you know we've been focused on Apple AI. There's
Speaker 5: still a you know, one of the largest market cap companies.
Speaker 5: I don't know, is there a technology thought. I don't
Speaker 5: know where you want to go and how specific you
Speaker 5: can drill well.
Speaker 4: I think the interesting thing is is like everyone wants
Speaker 4: to know what exactly this is going to do for
Speaker 4: me and how excited it's going to get did But
Speaker 4: did I know I was going to become addicted to
Speaker 4: my iPhone before they introduced it? No? I mean I
Speaker 4: want that kind of system.
Speaker 2: I thought it was just for foc calls.
Speaker 4: But I also do want and I was listening to
Speaker 4: you earlier and I saw those same memes go through
Speaker 4: my Instagram, because I actually have trained my Instagram to
Speaker 4: feed me funny stuff to make me laugh.
Speaker 6: But the.
Speaker 4: Meme about please unload my dishwasher and do the clothes,
Speaker 4: not paint my pictures and write my music and do
Speaker 4: that stuff. But we want something like that, But I
Speaker 4: also want something to organize my day, and totally to that,
Speaker 4: I need. I need to arrange for twelve people to
Speaker 4: Mexico and spring use it on the phone and figure
Speaker 4: it out and get me the room I need.
Speaker 2: Okay, But you know it's funny you say that because
Speaker 2: we're then we only have about a minute left that
Speaker 2: we're all addicted to our phones, but we're also all
Speaker 2: probably trying to use them less.
Speaker 4: I'm trying to use it strategically in terms of there's
Speaker 4: certain certain things that I have on because it's the
Speaker 4: only way I get pictures of the grandkids or invites
Speaker 4: to their birthday parties. And then there's other things in
Speaker 4: there that I train there specifically too, because I don't
Speaker 4: hover over certain things, and I do hover over other
Speaker 4: things to train it to make me laugh.
Speaker 5: So yeah, I actually put it down. I actually put
Speaker 5: it down on the charger, especially on like weekends, unless
Speaker 5: I know that got something work related or something, you know,
Speaker 5: and it's not that my family. Usually I'm with most
Speaker 5: of the family that I most care about.
Speaker 4: Yeah, you have to be very intentional about it, though,
Speaker 4: because there is an addictive component.
Speaker 2: I think I think she said of a filter for
Speaker 2: my text messages because when I text you, Carol Master,
Speaker 2: I'm surrounded by Carol's right now.
Speaker 5: Like check your phone, check your messages.
Speaker 2: I'm like sending her an email, check your text, or
Speaker 2: sending our text, check your email.
Speaker 5: Oh my god, it's complicated.
Speaker 1: Love.
Speaker 2: Just love Carol, Carol, all love.
Speaker 5: All Carol's are great. I'm just gonna put it out there.
Speaker 5: I'm really fun to have you in. I hope you
Speaker 5: enjoy your time in New York and look forward to
Speaker 5: next time. Great to Ketche, thanks for having me Carol's lives.
Speaker 5: She's chief investment Officer over at BIMO Family Office, joining
Speaker 5: us in our Interactive Brokers studio.
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