1
00:00:04,320 --> 00:00:08,559
Speaker 1: This is Bloomberg Wall Street Week with David Weston from

2
00:00:08,680 --> 00:00:09,600
Speaker 1: Bloomberg Radio.

3
00:00:13,360 --> 00:00:16,520
Speaker 2: This is Wall Street Week. I'm David western bringing you

4
00:00:16,840 --> 00:00:21,480
Speaker 2: stories of capitalism. This week, reconciliation, what's needed to make

5
00:00:21,520 --> 00:00:24,800
Speaker 2: the tough decisions surrounding the national debt, and a look

6
00:00:24,840 --> 00:00:28,920
Speaker 2: at one of Wall Street's passion assets. We talk with collectors, advisors,

7
00:00:28,960 --> 00:00:32,800
Speaker 2: and auctioneers about the big business of fine art, but

8
00:00:32,880 --> 00:00:36,600
Speaker 2: we start with a story about demand, specifically the demand

9
00:00:36,680 --> 00:00:40,120
Speaker 2: for artificial intelligence. We know it will be big, and

10
00:00:40,159 --> 00:00:43,319
Speaker 2: that means we're going to need massive computing power from

11
00:00:43,400 --> 00:00:47,600
Speaker 2: data centers, and lots of them.

12
00:00:47,640 --> 00:00:50,919
Speaker 3: When you see the world's leading technology companies who are

13
00:00:50,920 --> 00:00:53,800
Speaker 3: as close to this as anybody making the scale of

14
00:00:53,840 --> 00:00:57,760
Speaker 3: investments that they are, to me, that's an extraordinary sign

15
00:00:57,920 --> 00:00:59,920
Speaker 3: of the potential that they see in the future.

16
00:01:00,480 --> 00:01:03,320
Speaker 2: Eric Schwartz is CEO of cyrus I, one of the

17
00:01:03,440 --> 00:01:06,240
Speaker 2: largest data center owners and operators in the world.

18
00:01:06,680 --> 00:01:07,559
Speaker 4: Schwartz is at.

19
00:01:07,400 --> 00:01:10,320
Speaker 2: The forefront of a modern gold rush as big tech

20
00:01:10,360 --> 00:01:14,679
Speaker 2: companies scramble for the resources to turn electricity into computing power.

21
00:01:15,160 --> 00:01:17,840
Speaker 2: We wanted to see for ourselves what the building blocks

22
00:01:17,840 --> 00:01:20,479
Speaker 2: of the AI boom looked like and so we traveled

23
00:01:20,520 --> 00:01:23,200
Speaker 2: to Texas, a state with one of the highest numbers

24
00:01:23,200 --> 00:01:26,080
Speaker 2: of data centers in the United States. In a suburb

25
00:01:26,160 --> 00:01:28,480
Speaker 2: north of Dallas, we met with Schwartz at one of

26
00:01:28,520 --> 00:01:32,679
Speaker 2: his firm's new facilities. It spans nearly a million square feet.

27
00:01:33,600 --> 00:01:37,000
Speaker 2: We toured the massive, high ceiling building filled with row

28
00:01:37,120 --> 00:01:40,920
Speaker 2: upon row of black cabinets shielding racks of computers from

29
00:01:40,920 --> 00:01:43,760
Speaker 2: prying eyes, all of which are built a meter or

30
00:01:43,760 --> 00:01:46,840
Speaker 2: so above ground level to permit an elaborate system to

31
00:01:46,880 --> 00:01:50,200
Speaker 2: pump cool air up into the computer ax That explains

32
00:01:50,240 --> 00:01:53,120
Speaker 2: the high ceilings, which let the warm air rise to

33
00:01:53,160 --> 00:01:57,000
Speaker 2: be recycled through the cooling system. Schwartz says the race

34
00:01:57,040 --> 00:01:59,600
Speaker 2: to build data centers like his in Texas is only

35
00:01:59,640 --> 00:02:02,720
Speaker 2: getting started, with Cyrus One in the process of adding

36
00:02:02,760 --> 00:02:06,480
Speaker 2: additional buildings and capacity next to its current facilities.

37
00:02:07,480 --> 00:02:11,760
Speaker 3: The risk to us as a developer for those customers

38
00:02:12,320 --> 00:02:14,280
Speaker 3: is to ensure that we can keep up with their

39
00:02:14,280 --> 00:02:18,480
Speaker 3: demand and that we're delivering both capacity and service at

40
00:02:18,520 --> 00:02:23,799
Speaker 3: the levels they require. They're all operating mission critical infrastructure,

41
00:02:23,800 --> 00:02:28,760
Speaker 3: and their expectations are intensely high. We do our best

42
00:02:28,800 --> 00:02:31,520
Speaker 3: and are constantly investing to ensure that we can keep

43
00:02:31,639 --> 00:02:35,200
Speaker 3: up with those expectations, but our real challenge is to

44
00:02:35,240 --> 00:02:38,320
Speaker 3: make sure that we're keeping up with their requirements. Because

45
00:02:38,360 --> 00:02:42,040
Speaker 3: they're counting on this infrastructure to support the growth investments

46
00:02:42,040 --> 00:02:42,760
Speaker 3: that they're making.

47
00:02:43,480 --> 00:02:46,760
Speaker 2: Keeping up with those requirements is not going to be easy.

48
00:02:47,080 --> 00:02:49,000
Speaker 2: But the good news for the United States is that

49
00:02:49,040 --> 00:02:51,639
Speaker 2: it has a strong head start. There are more than

50
00:02:51,720 --> 00:02:55,120
Speaker 2: seven thousand data centers worldwide, with nearly two thousand in

51
00:02:55,200 --> 00:02:59,680
Speaker 2: America alone. US data center capacity grew almost a quarter

52
00:02:59,720 --> 00:03:03,119
Speaker 2: in the last year alone, with another seventy percent set

53
00:03:03,160 --> 00:03:05,919
Speaker 2: to come online from centers already under construction.

54
00:03:06,000 --> 00:03:10,680
Speaker 3: Today, the United States is a substantially larger data center

55
00:03:10,760 --> 00:03:13,320
Speaker 3: market than the other regions around the world, and that's

56
00:03:13,400 --> 00:03:17,160
Speaker 3: driven in part by the adoption of the Internet, by

57
00:03:17,200 --> 00:03:20,200
Speaker 3: the presence of the large technology companies who are based here,

58
00:03:20,560 --> 00:03:23,880
Speaker 3: but also by the fact that investment and progress against

59
00:03:23,960 --> 00:03:28,000
Speaker 3: artificial intelligence here in the United States is further advanced

60
00:03:28,040 --> 00:03:30,520
Speaker 3: than it is in other regions, and so right now

61
00:03:30,960 --> 00:03:34,000
Speaker 3: you'll see much stronger demanding growth in the United States.

62
00:03:34,840 --> 00:03:38,120
Speaker 3: Other countries around the world are very focused on the

63
00:03:38,240 --> 00:03:42,520
Speaker 3: implications of artificial intelligence and are concerned about making sure

64
00:03:42,520 --> 00:03:46,360
Speaker 3: that they have the infrastructure in their economies to keep up.

65
00:03:46,840 --> 00:03:51,720
Speaker 3: And so we're seeing and will continue to see efforts

66
00:03:51,800 --> 00:03:55,200
Speaker 3: by other countries around the world to support that type

67
00:03:55,200 --> 00:03:59,120
Speaker 3: of infrastructure in their countries to support their economies and

68
00:03:59,160 --> 00:03:59,760
Speaker 3: their growth.

69
00:04:00,280 --> 00:04:04,920
Speaker 2: Valtimorre Slayzak is Kkair's global head of Digital Infrastructure. His

70
00:04:05,040 --> 00:04:08,560
Speaker 2: firm is making big investments in data centers, including when

71
00:04:08,600 --> 00:04:12,160
Speaker 2: it teams with global infrastructure partners to buy Eric Schwartz's

72
00:04:12,400 --> 00:04:16,000
Speaker 2: Cyrus one for fifteen billion dollars back in twenty twenty two.

73
00:04:16,800 --> 00:04:20,080
Speaker 2: Like Schwartz, he sees big opportunities coming in Europe and

74
00:04:20,120 --> 00:04:20,680
Speaker 2: in Asia.

75
00:04:21,560 --> 00:04:25,159
Speaker 5: US is definitely, at least from our perspective, well ahead

76
00:04:25,240 --> 00:04:27,320
Speaker 5: in terms of the deployment of AI, and I think

77
00:04:27,320 --> 00:04:30,080
Speaker 5: it is a strategic element of I think the growth

78
00:04:30,120 --> 00:04:32,240
Speaker 5: going forward. If you just think about a couple of

79
00:04:32,240 --> 00:04:35,680
Speaker 5: maybe examples cloud companies, US cloud companies have about seventy

80
00:04:35,680 --> 00:04:39,479
Speaker 5: five percent global market share in terms of AI funding.

81
00:04:39,640 --> 00:04:42,480
Speaker 5: Eighty percent of it is coming in the United States.

82
00:04:42,960 --> 00:04:46,000
Speaker 5: So US is definitely leading the charge, so to speak,

83
00:04:46,040 --> 00:04:48,320
Speaker 5: in terms of deployment. But I think we see the

84
00:04:48,640 --> 00:04:51,800
Speaker 5: similar playbook being applied in Europe and in Asia Pacific.

85
00:04:51,880 --> 00:04:54,040
Speaker 5: But just to try to quantify the scale of it.

86
00:04:54,560 --> 00:04:57,200
Speaker 5: US data center market is about a fifteen gigabyte market

87
00:04:57,400 --> 00:05:01,560
Speaker 5: growing to forty gigawatts. European market there's about six gigabotte market,

88
00:05:02,480 --> 00:05:05,440
Speaker 5: likely going to triple or quadruple over the next four

89
00:05:05,520 --> 00:05:08,400
Speaker 5: or five years to twenty gigabotts, and then Asia Pacific

90
00:05:08,440 --> 00:05:11,520
Speaker 5: ex China is on a similar trajectory, so the scale

91
00:05:11,560 --> 00:05:15,400
Speaker 5: is really different between US and those other markets.

92
00:05:16,520 --> 00:05:19,520
Speaker 2: Meeting that growing demand for data centers will not be easy.

93
00:05:19,880 --> 00:05:22,320
Speaker 2: There are a host of potential hurdles that people like

94
00:05:22,400 --> 00:05:25,760
Speaker 2: Christine Wood, headed the data center practice at Burns McDonald,

95
00:05:26,040 --> 00:05:28,120
Speaker 2: are finding ways to overcome.

96
00:05:29,080 --> 00:05:36,800
Speaker 6: We're looking at water availability, connectivity, location, demand, latency, and

97
00:05:36,839 --> 00:05:39,599
Speaker 6: then we secondarily look at the regulations, whether or not

98
00:05:39,640 --> 00:05:43,400
Speaker 6: they have zoning appropriate, zoning requirements, tax incentives, and really

99
00:05:43,440 --> 00:05:46,039
Speaker 6: if it makes a business business sense to be in

100
00:05:46,080 --> 00:05:49,600
Speaker 6: that specific location. And then once you go into more

101
00:05:49,640 --> 00:05:53,400
Speaker 6: of the design and construction, what we're starting to see

102
00:05:53,640 --> 00:05:57,120
Speaker 6: and what we have been doing, especially with our construction arm,

103
00:05:57,400 --> 00:06:00,359
Speaker 6: is that we really want to get ahead of some

104
00:06:00,440 --> 00:06:03,400
Speaker 6: of the labor and craft labor shortages that we see

105
00:06:03,400 --> 00:06:06,960
Speaker 6: out on site, and so we are designing data centers

106
00:06:07,440 --> 00:06:11,600
Speaker 6: that are more modular have skid are able to work

107
00:06:11,800 --> 00:06:17,680
Speaker 6: within the craft shops of these different self performed contractors,

108
00:06:18,080 --> 00:06:20,919
Speaker 6: so that we can deploy these data centers more rapidly

109
00:06:21,000 --> 00:06:23,359
Speaker 6: and on a scalable basis.

110
00:06:24,040 --> 00:06:26,760
Speaker 2: But as big as those obstacles may be, the biggest

111
00:06:26,800 --> 00:06:29,880
Speaker 2: by far is finding the electricity of the centers require,

112
00:06:30,240 --> 00:06:33,000
Speaker 2: with Goldman Sachs estimating that they already consume one to

113
00:06:33,040 --> 00:06:36,560
Speaker 2: two percent of all the power supplied worldwide and that

114
00:06:36,560 --> 00:06:39,640
Speaker 2: that number could double by the end of the decade.

115
00:06:40,320 --> 00:06:43,159
Speaker 6: Power is becoming the long pole in the tent to

116
00:06:43,279 --> 00:06:46,279
Speaker 6: be able to find a data center site, and so

117
00:06:46,360 --> 00:06:49,680
Speaker 6: it really starts with that is the power puzzle that

118
00:06:49,720 --> 00:06:52,960
Speaker 6: we're seeing associated with the data center sites. And so

119
00:06:53,600 --> 00:06:57,880
Speaker 6: when we're walking through looking for great sites and supporting

120
00:06:57,880 --> 00:07:01,800
Speaker 6: our clients on the site due diligence is we're looking for.

121
00:07:01,920 --> 00:07:05,839
Speaker 6: Power is the number one item.

122
00:07:05,000 --> 00:07:08,920
Speaker 2: For data centers and their clients. Having enough power is necessary,

123
00:07:09,160 --> 00:07:12,120
Speaker 2: but not sufficient. The power also has to be there

124
00:07:12,200 --> 00:07:16,480
Speaker 2: without fail and without interruption of any kind.

125
00:07:15,920 --> 00:07:19,680
Speaker 3: No excuses. The infrastructure that it's operating here needs to

126
00:07:19,720 --> 00:07:22,400
Speaker 3: be available twenty four hours a day three hundred and

127
00:07:22,440 --> 00:07:26,080
Speaker 3: sixty five days a year without interruption. So where it

128
00:07:26,200 --> 00:07:28,960
Speaker 3: starts is that for all of the equipment that we

129
00:07:29,040 --> 00:07:32,720
Speaker 3: have deployed here, whether it's the battery banks, whether it's

130
00:07:32,720 --> 00:07:35,560
Speaker 3: the cooling units, all of that, there is always a

131
00:07:35,560 --> 00:07:38,360
Speaker 3: backup for that equipment in the event that's something were

132
00:07:38,440 --> 00:07:40,720
Speaker 3: to fail, and things always fail and you need to

133
00:07:40,760 --> 00:07:43,800
Speaker 3: have a backup to ensure that you don't have an interruption.

134
00:07:44,240 --> 00:07:47,640
Speaker 2: That backup at cyrus One's new Texas facility means layer

135
00:07:47,760 --> 00:07:51,600
Speaker 2: after layer of redundancy. The facility gets power straight from

136
00:07:51,640 --> 00:07:54,800
Speaker 2: the grid, but if that fails, batteries located behind the

137
00:07:54,880 --> 00:07:58,200
Speaker 2: data center kick in. Those batteries are kept fully charged

138
00:07:58,200 --> 00:08:01,240
Speaker 2: by a series of generators which are constantly running, and

139
00:08:01,280 --> 00:08:04,320
Speaker 2: if all else fails, behind the batteries are a role

140
00:08:04,360 --> 00:08:08,640
Speaker 2: of equally large diesel powered locomotive engines. If a power

141
00:08:08,680 --> 00:08:11,600
Speaker 2: outage lasts beyond the life of the batteries, the engines

142
00:08:11,640 --> 00:08:14,880
Speaker 2: take over to ensure there's nothing to stop the center's operation,

143
00:08:15,040 --> 00:08:19,360
Speaker 2: including its elaborate cooling system, no matter what the problem.

144
00:08:19,960 --> 00:08:23,120
Speaker 2: Eric Schwartz says this unprecedented need for a liable power

145
00:08:23,160 --> 00:08:25,440
Speaker 2: goes beyond just finding out where to get it and

146
00:08:25,480 --> 00:08:28,200
Speaker 2: how to make sure it's uninterrupted. It also demands an

147
00:08:28,280 --> 00:08:31,360
Speaker 2: upgrade if the entire way we generate and distribute power

148
00:08:31,440 --> 00:08:33,360
Speaker 2: in the United States and elsewhere.

149
00:08:33,720 --> 00:08:39,439
Speaker 3: So data centers are effectively technology factories, and like any factory,

150
00:08:39,920 --> 00:08:44,400
Speaker 3: we draw power to operate to operate the factory. And

151
00:08:44,480 --> 00:08:48,040
Speaker 3: so the challenge and the work that we do is

152
00:08:48,080 --> 00:08:50,440
Speaker 3: to work very closely with the utilities and the grid

153
00:08:50,480 --> 00:08:53,920
Speaker 3: operators to identify the right locations where we can connect

154
00:08:53,960 --> 00:08:57,000
Speaker 3: to that power and ultimately deliver it to our customers.

155
00:08:57,080 --> 00:09:01,080
Speaker 3: And this requires work and require there's a lot of collaboration.

156
00:09:01,440 --> 00:09:04,679
Speaker 3: But the United States in particular, then other countries as

157
00:09:04,720 --> 00:09:08,520
Speaker 3: well are investing in growing their power infrastructure, not only

158
00:09:08,559 --> 00:09:13,840
Speaker 3: for scale, but for sustainability, and we're very focused on

159
00:09:13,960 --> 00:09:16,040
Speaker 3: making sure that we're locating in the right places.

160
00:09:16,880 --> 00:09:20,000
Speaker 5: Ultimately, what we think is will require a comprehensive solution.

161
00:09:20,559 --> 00:09:24,480
Speaker 5: So the technology companies themselves are large consumers of of

162
00:09:24,600 --> 00:09:29,120
Speaker 5: course this infrastructure, but that's not the only demand driver.

163
00:09:29,240 --> 00:09:32,960
Speaker 5: It's also unshoring, it's electrification. So there's other what I

164
00:09:32,960 --> 00:09:36,240
Speaker 5: would say are great signs of economic progress and growth

165
00:09:36,360 --> 00:09:38,640
Speaker 5: in the United States, and we should be really proud

166
00:09:38,640 --> 00:09:42,000
Speaker 5: of that, but it requires a new investment in generation

167
00:09:42,200 --> 00:09:44,600
Speaker 5: and in transmission, right, it's something that we really haven't

168
00:09:44,600 --> 00:09:47,160
Speaker 5: seen over the last twenty years. So if you look

169
00:09:47,200 --> 00:09:50,359
Speaker 5: at the US grid over the last twenty years, effectively

170
00:09:50,400 --> 00:09:53,120
Speaker 5: stagnated in terms of the demand growth at about forty

171
00:09:53,120 --> 00:09:55,600
Speaker 5: one hundred TARO wide hours. What's really interesting that there's

172
00:09:55,640 --> 00:09:59,720
Speaker 5: been an interesting energy transition during that time. We've decommissioned

173
00:09:59,760 --> 00:10:02,320
Speaker 5: a lot of call plants that's dropped by as sixty

174
00:10:02,320 --> 00:10:05,640
Speaker 5: five percent, We've increased generation from natural gas by ab

175
00:10:05,640 --> 00:10:09,200
Speaker 5: one hundred and seventy percent, and increased generation from renewables,

176
00:10:09,280 --> 00:10:12,079
Speaker 5: and so the grid itself has really gone a very

177
00:10:12,080 --> 00:10:15,000
Speaker 5: positive transformation. And so what do we think with this

178
00:10:15,160 --> 00:10:18,520
Speaker 5: level of growth. The expectation is that demand side of

179
00:10:18,640 --> 00:10:20,120
Speaker 5: energy will have to go up at a two to

180
00:10:20,200 --> 00:10:22,680
Speaker 5: three percent, which is really different than what the industry

181
00:10:22,800 --> 00:10:24,439
Speaker 5: had seen over the last twenty years.

182
00:10:24,800 --> 00:10:25,240
Speaker 4: And so it.

183
00:10:25,240 --> 00:10:28,600
Speaker 5: Require new generation to be developed and likely increase investments

184
00:10:28,600 --> 00:10:32,360
Speaker 5: in the transmission infrastructure to help enable this. And I

185
00:10:32,400 --> 00:10:35,600
Speaker 5: think from our perspective, we believe that again this partnership

186
00:10:35,720 --> 00:10:39,040
Speaker 5: could really create a powerful, powerful solution.

187
00:10:39,880 --> 00:10:42,720
Speaker 2: The source of the energy used to power data centers

188
00:10:42,720 --> 00:10:45,160
Speaker 2: has become a key part of the equation at a

189
00:10:45,200 --> 00:10:47,400
Speaker 2: time when the world is trying to wean itself off

190
00:10:47,440 --> 00:10:50,360
Speaker 2: of fossil fuels, it raises the question of whether meeting

191
00:10:50,400 --> 00:10:52,959
Speaker 2: the demand will come at the cost of warming the

192
00:10:53,000 --> 00:10:56,640
Speaker 2: planet even further, something that those commissioning new data centers

193
00:10:56,679 --> 00:10:58,800
Speaker 2: have very much in mind.

194
00:10:59,440 --> 00:11:02,640
Speaker 6: We continue to see our clients have a lot of

195
00:11:02,640 --> 00:11:06,560
Speaker 6: sustainability goals around renewable and green energy, which is really

196
00:11:06,559 --> 00:11:10,240
Speaker 6: really great to see, and so with that, you also

197
00:11:10,640 --> 00:11:14,839
Speaker 6: want to think about where that capacity is coming from.

198
00:11:15,120 --> 00:11:19,360
Speaker 6: With renewables, solar and wind come on and off the

199
00:11:19,400 --> 00:11:22,400
Speaker 6: grid because the sun's not always shining or the wind's

200
00:11:22,440 --> 00:11:25,400
Speaker 6: not always blowing, and so a lot of times some

201
00:11:25,520 --> 00:11:29,520
Speaker 6: of the other power generation plants, especially nuclear, they can't

202
00:11:29,640 --> 00:11:32,320
Speaker 6: ramp up and down on the grid like solar and

203
00:11:32,400 --> 00:11:37,319
Speaker 6: wind can, and so you actually have some capacity available

204
00:11:37,400 --> 00:11:41,240
Speaker 6: at some of these nuclear power plants in order to

205
00:11:41,320 --> 00:11:44,280
Speaker 6: serve some of these data center customers. And then data

206
00:11:44,320 --> 00:11:50,479
Speaker 6: centers also are a really good marriage for that nuclear

207
00:11:50,559 --> 00:11:53,760
Speaker 6: plant because they have a constant load.

208
00:11:54,559 --> 00:11:57,559
Speaker 2: Cyrus one's customers are demanding that it find more ways

209
00:11:57,600 --> 00:12:01,120
Speaker 2: to get power from sustainable sources, but his owner KKR

210
00:12:01,240 --> 00:12:04,240
Speaker 2: is seeking the same, not just for Cyrus one, but

211
00:12:04,280 --> 00:12:08,960
Speaker 2: for its infrastructure investments overall, a spike in power demand.

212
00:12:09,480 --> 00:12:11,319
Speaker 2: What does that mean for the climate, Because at the

213
00:12:11,360 --> 00:12:13,679
Speaker 2: same time we were trying to get away from fossil fuels.

214
00:12:13,880 --> 00:12:15,880
Speaker 2: Try to say the climate, how do you put those

215
00:12:15,880 --> 00:12:16,440
Speaker 2: two together.

216
00:12:16,520 --> 00:12:19,400
Speaker 5: We're obviously a huge investor in energy transition and we're

217
00:12:19,400 --> 00:12:21,200
Speaker 5: with believers in that. I don't think that those are

218
00:12:21,320 --> 00:12:24,800
Speaker 5: necessarily mutually exclusive. It's part of a comprehensive solution. So

219
00:12:25,160 --> 00:12:30,400
Speaker 5: as I just mentioned investments in generation effectively decommissioned call plants,

220
00:12:30,679 --> 00:12:33,440
Speaker 5: investments and natural gas plants, those are not only things

221
00:12:33,440 --> 00:12:36,680
Speaker 5: that help affordability, but also energy security. So we believe,

222
00:12:37,000 --> 00:12:39,080
Speaker 5: as you know, through our portfolio, we've been a very

223
00:12:39,160 --> 00:12:44,040
Speaker 5: large investor in renewable We have ten renewal platforms across

224
00:12:44,040 --> 00:12:46,880
Speaker 5: the globe, invested over thirty four billion dollars in sustainability

225
00:12:46,960 --> 00:12:49,000
Speaker 5: since twenty and ten, and we think that's an important

226
00:12:49,000 --> 00:12:49,800
Speaker 5: part of this solution.

227
00:12:50,679 --> 00:12:54,079
Speaker 1: You're listening to Bloomberg Wall Straight Week with David Weston

228
00:12:54,240 --> 00:12:57,719
Speaker 1: from Bloomberg Radio. Take your Bloomberg.

229
00:12:57,280 --> 00:13:01,200
Speaker 7: Radio listening experience to the next level the Bloomberg Business

230
00:13:01,240 --> 00:13:04,640
Speaker 7: app today and listen on Apple Car Play or Android Auto.

231
00:13:04,840 --> 00:13:08,480
Speaker 7: Get live radio podcasts and hourly news updates no matter

232
00:13:08,559 --> 00:13:10,160
Speaker 7: where you are, from coast to.

233
00:13:10,120 --> 00:13:11,640
Speaker 1: Coast and across the globe.

234
00:13:11,640 --> 00:13:14,840
Speaker 7: Plus expanded details and your favorite shows at the click

235
00:13:14,880 --> 00:13:18,240
Speaker 7: cover button. The Bloomberg Business app now with Applecar Plan,

236
00:13:18,400 --> 00:13:20,199
Speaker 7: Android Auto features.

237
00:13:19,679 --> 00:13:22,760
Speaker 1: Downloaded free in the MLB Store or on Google Playing.

238
00:13:22,800 --> 00:13:28,000
Speaker 1: Bloomberg Radio. Context changes every day. This is Bloomberg Wall

239
00:13:28,080 --> 00:13:31,600
Speaker 1: Street Week with David Weston from Bloomberg Radio.

240
00:13:32,760 --> 00:13:36,280
Speaker 2: This is a story about reconciliation, something we may not

241
00:13:36,440 --> 00:13:39,679
Speaker 2: set out to achieve, something we might even resist as

242
00:13:39,760 --> 00:13:42,160
Speaker 2: long as we can, but something that most of us

243
00:13:42,280 --> 00:13:45,560
Speaker 2: end up coming around to in the end, reconciling with

244
00:13:45,600 --> 00:13:48,439
Speaker 2: one another today for the sake of what our children

245
00:13:48,679 --> 00:13:53,360
Speaker 2: need tomorrow. There's no shortage of issues, important issues for

246
00:13:53,480 --> 00:13:56,520
Speaker 2: us to disagree about, like whether our economy needs the

247
00:13:56,520 --> 00:13:58,400
Speaker 2: government to tax less.

248
00:13:58,280 --> 00:14:02,040
Speaker 8: Cut taxes very substantially and create a great economy, or

249
00:14:02,080 --> 00:14:03,080
Speaker 8: spend more.

250
00:14:03,000 --> 00:14:07,520
Speaker 9: First time home buyers with twenty five thousand dollars, or.

251
00:14:07,520 --> 00:14:10,079
Speaker 2: What we should do about our southern border.

252
00:14:09,880 --> 00:14:13,160
Speaker 8: Allowing these millions and millions of people to come into

253
00:14:13,160 --> 00:14:16,040
Speaker 8: our country. And look at what's happening to the towns

254
00:14:16,120 --> 00:14:17,760
Speaker 8: all over the United States, you.

255
00:14:17,720 --> 00:14:19,880
Speaker 10: Have a broken immigration system and we need to fix it.

256
00:14:20,640 --> 00:14:24,000
Speaker 2: Every year in the Mountains of Colorado, the Aspen Economic

257
00:14:24,080 --> 00:14:28,120
Speaker 2: Strategy Group gathers leaders from business, government, and academia to

258
00:14:28,200 --> 00:14:32,240
Speaker 2: find common ground on important issues like these, seeking to

259
00:14:32,360 --> 00:14:36,160
Speaker 2: use evidence about the effects of policy, to resolve policy

260
00:14:36,440 --> 00:14:40,080
Speaker 2: differences and to bring us closer to that reconciliation we

261
00:14:40,200 --> 00:14:43,200
Speaker 2: all need. So we went to Aspen to speak with

262
00:14:43,240 --> 00:14:46,640
Speaker 2: the group's executive director, Melissa Karney, who said that today

263
00:14:47,040 --> 00:14:49,400
Speaker 2: reconciliation faces a unique threat.

264
00:14:49,560 --> 00:14:53,400
Speaker 9: What's really interesting and I think challenging is our country

265
00:14:53,440 --> 00:15:00,320
Speaker 9: is definitely facing a reconsideration of an economic paradigm from

266
00:15:00,320 --> 00:15:03,520
Speaker 9: both parties. We're seeing a move towards more nationalist sentiment,

267
00:15:03,640 --> 00:15:07,200
Speaker 9: more protectionist sentiment, things that really move away from the

268
00:15:07,440 --> 00:15:11,840
Speaker 9: market based economic framework that's driven growth and dynamism for

269
00:15:11,880 --> 00:15:15,280
Speaker 9: so long. And so the agenda for this year is

270
00:15:15,320 --> 00:15:18,000
Speaker 9: really based on, all, right, let's take this as given

271
00:15:18,320 --> 00:15:22,640
Speaker 9: to you. Political concerns, national security concerns, domestic disconsent are

272
00:15:22,760 --> 00:15:26,880
Speaker 9: driving this reconsideration, and so we're pulling together people who

273
00:15:26,960 --> 00:15:29,240
Speaker 9: have studied these issues, who have worked on these issues,

274
00:15:29,280 --> 00:15:31,600
Speaker 9: who have been in government and grappled with these issues

275
00:15:31,640 --> 00:15:34,440
Speaker 9: for a very long time to try and say what

276
00:15:34,520 --> 00:15:38,080
Speaker 9: kind of trade policy should the US pursue. How can

277
00:15:38,120 --> 00:15:42,120
Speaker 9: we pursue industrial policy in a way that preserves and

278
00:15:42,280 --> 00:15:46,520
Speaker 9: promotes economic dynamism and economic growth while addressing the very

279
00:15:46,560 --> 00:15:51,160
Speaker 9: real national security and economic domestic challenges that are driving

280
00:15:51,160 --> 00:15:52,160
Speaker 9: this reconsideration.

281
00:15:52,560 --> 00:15:55,000
Speaker 2: One of the biggest issues in ASPEN this year the

282
00:15:55,000 --> 00:15:57,920
Speaker 2: federal debt and what can be done about it. Since

283
00:15:57,920 --> 00:16:00,280
Speaker 2: the early two thousands, the United States has faced an

284
00:16:00,280 --> 00:16:03,760
Speaker 2: annual budget deficit as the government began spending more than

285
00:16:03,760 --> 00:16:07,800
Speaker 2: it collected through taxes. That deficit was made worse, first

286
00:16:07,840 --> 00:16:10,880
Speaker 2: by the Great Financial Crisis and then by the COVID

287
00:16:11,000 --> 00:16:15,280
Speaker 2: nineteen pandemic. In both instances, the US government stepped in

288
00:16:15,360 --> 00:16:19,040
Speaker 2: to rescue the economy, sending the federal debt surging from

289
00:16:19,160 --> 00:16:22,480
Speaker 2: nine point four trillion dollars before the Great Financial Crisis

290
00:16:22,680 --> 00:16:26,080
Speaker 2: to a whopping thirty five trillion dollars to day. And

291
00:16:26,160 --> 00:16:29,360
Speaker 2: the debt just keeps on coming, with the Congressional Budget

292
00:16:29,360 --> 00:16:31,920
Speaker 2: Office expecting it to grow by an additional two trillion

293
00:16:31,960 --> 00:16:35,640
Speaker 2: dollars this year alone. But if there's any good news

294
00:16:35,640 --> 00:16:38,840
Speaker 2: about the deficit, it could be that its alarming size

295
00:16:39,040 --> 00:16:42,200
Speaker 2: might force America's leaders to do something about it, even

296
00:16:42,200 --> 00:16:45,480
Speaker 2: if it means coming together from very different places.

297
00:16:45,640 --> 00:16:49,880
Speaker 11: First rule of holes is to stop digging, and you

298
00:16:49,960 --> 00:16:52,360
Speaker 11: have to the people who are in those positions of

299
00:16:52,560 --> 00:16:56,240
Speaker 11: consequence responsibility have to understand that they have to govern

300
00:16:56,440 --> 00:16:58,080
Speaker 11: with a recognition of limits.

301
00:16:58,520 --> 00:17:02,080
Speaker 2: Tim Geitner served as treasure Secretary and President Obama's decidedly

302
00:17:02,160 --> 00:17:05,360
Speaker 2: democratic administration, but when it comes to the federal deficit,

303
00:17:05,640 --> 00:17:09,280
Speaker 2: he's not far away from former Republican House Speaker Kevin McCarthy.

304
00:17:09,440 --> 00:17:11,200
Speaker 12: You got to do something with the debt. You can't

305
00:17:11,280 --> 00:17:15,439
Speaker 12: maintain because what we did when COVID had and you

306
00:17:15,520 --> 00:17:17,239
Speaker 12: look in just hindsight, we didn't know what was going

307
00:17:17,280 --> 00:17:19,960
Speaker 12: to happen, so we up the spending knowing what was

308
00:17:20,000 --> 00:17:22,600
Speaker 12: coming out, but Congress never pulls it back.

309
00:17:22,960 --> 00:17:23,679
Speaker 4: You've got some.

310
00:17:25,760 --> 00:17:28,960
Speaker 12: Entitlements that are so critical, but you want to sustain

311
00:17:29,000 --> 00:17:30,520
Speaker 12: those and be able to So you've got to deal

312
00:17:30,560 --> 00:17:31,600
Speaker 12: with it now. But you've got to do it in

313
00:17:31,640 --> 00:17:34,760
Speaker 12: a bipartisan manner, Otherwise one party attacks the other.

314
00:17:35,400 --> 00:17:39,400
Speaker 2: Like McCarthy, Tim Geidner sees bipartisanship is the only way

315
00:17:39,480 --> 00:17:42,639
Speaker 2: to address a problem that's only becoming more complicated with

316
00:17:42,800 --> 00:17:43,920
Speaker 2: each passing year.

317
00:17:44,160 --> 00:17:47,320
Speaker 11: In some ways, it's a much harder challenge because we're

318
00:17:47,359 --> 00:17:50,040
Speaker 11: going to have to spend more in defense, and because

319
00:17:50,040 --> 00:17:52,280
Speaker 11: we have an aging population, it's to be more expensive

320
00:17:52,320 --> 00:17:55,760
Speaker 11: to give them healthcare over time, and so we're starting

321
00:17:55,800 --> 00:17:58,679
Speaker 11: from a very bad place. They're going to have to

322
00:17:58,680 --> 00:18:01,440
Speaker 11: make some trade offs, and of course these are things

323
00:18:01,480 --> 00:18:03,600
Speaker 11: you know, you can't do in a partisan basis. You know,

324
00:18:03,640 --> 00:18:05,720
Speaker 11: one of the great strengths of what Hank is built

325
00:18:05,760 --> 00:18:09,119
Speaker 11: here is, you know, you do get people from different

326
00:18:09,119 --> 00:18:12,880
Speaker 11: parts of the bolical spectrum who disagree on fundamental things

327
00:18:13,359 --> 00:18:16,440
Speaker 11: to come together and sit there and listen to people

328
00:18:16,440 --> 00:18:20,160
Speaker 11: with deep expertise, to debate hard things, and to try

329
00:18:20,200 --> 00:18:25,480
Speaker 11: to recreate a place where you can have hard, pragmatic

330
00:18:25,480 --> 00:18:28,520
Speaker 11: conversations about those tough trade offs ahead.

331
00:18:29,240 --> 00:18:32,280
Speaker 2: That Hank Geidner is talking about is his predecessor as

332
00:18:32,359 --> 00:18:37,000
Speaker 2: Treasure Secretary, Hank Paulson, who served under President George W. Bush.

333
00:18:37,400 --> 00:18:40,639
Speaker 2: Paulson agrees with both Geidner and McCarthy that the debt

334
00:18:40,720 --> 00:18:44,640
Speaker 2: is a big problem, but he also sees a silver lining.

335
00:18:45,160 --> 00:18:47,240
Speaker 13: I would say, so I get asked all the time

336
00:18:47,280 --> 00:18:49,840
Speaker 13: about the economy and I say, listen, don't ask me

337
00:18:49,880 --> 00:18:51,920
Speaker 13: about when the Fed's going to Kanye just rates or

338
00:18:51,960 --> 00:18:55,720
Speaker 13: what have you, what, because we're in a great spot here.

339
00:18:56,040 --> 00:18:58,159
Speaker 13: But the one thing we know, the big cloud on

340
00:18:58,200 --> 00:19:02,520
Speaker 13: the horizon is are federal debt. It's unsustainable and if

341
00:19:02,560 --> 00:19:05,600
Speaker 13: not checked, it's all that we're going to destroy our prosperity,

342
00:19:06,240 --> 00:19:09,560
Speaker 13: which is going to undermine our security, which is rooted

343
00:19:09,600 --> 00:19:12,240
Speaker 13: in our economic strength. And so the way I think

344
00:19:12,280 --> 00:19:14,160
Speaker 13: about it, if you want to look at the dark

345
00:19:14,160 --> 00:19:18,320
Speaker 13: cloud right on the negative side, that so many of

346
00:19:18,400 --> 00:19:20,719
Speaker 13: us who have talked about the deficit for so long,

347
00:19:21,080 --> 00:19:24,520
Speaker 13: it looks like we're crying wolf, right, And so politicians

348
00:19:24,520 --> 00:19:28,240
Speaker 13: and both both parties sort of are ignoring it. Right.

349
00:19:28,560 --> 00:19:32,200
Speaker 13: But the longer we wait, the more expensive it's going

350
00:19:32,280 --> 00:19:34,399
Speaker 13: to be and the more dangerous it's going to be

351
00:19:34,760 --> 00:19:37,600
Speaker 13: to clean up this mess before it strangles us. And

352
00:19:37,960 --> 00:19:41,080
Speaker 13: so again, but that's the bad news. Now what's the

353
00:19:41,119 --> 00:19:44,280
Speaker 13: good news. The good news is we're a rich country. Right,

354
00:19:44,720 --> 00:19:46,879
Speaker 13: there's a lot we can do if we start working

355
00:19:46,920 --> 00:19:50,000
Speaker 13: on it right away. We're gonna need both revenues. We're

356
00:19:50,000 --> 00:19:53,199
Speaker 13: gonna need taxes, and we're gonna need spending cuts and

357
00:19:53,280 --> 00:19:56,119
Speaker 13: people on each side don't like to hear that, But

358
00:19:56,160 --> 00:20:00,880
Speaker 13: there's plenty of ways we can raise revenues not impede

359
00:20:00,920 --> 00:20:05,480
Speaker 13: growth by just closing preferences and loopholes in the tax code.

360
00:20:06,080 --> 00:20:08,600
Speaker 13: And believe me, you can't deal with this without dealing

361
00:20:08,640 --> 00:20:12,520
Speaker 13: with entitlements. But you can clearly deal with entitlements through

362
00:20:12,920 --> 00:20:16,600
Speaker 13: means testing and other mechanisms while protecting those that need

363
00:20:16,640 --> 00:20:18,720
Speaker 13: it the most. So we can do both.

364
00:20:19,400 --> 00:20:21,840
Speaker 2: If Hank Paulson says we can get there, many of

365
00:20:21,920 --> 00:20:24,280
Speaker 2: us will believe him. He helped lead us out of

366
00:20:24,320 --> 00:20:27,040
Speaker 2: the Great Financial Crisis, after all. But even if we

367
00:20:27,160 --> 00:20:29,439
Speaker 2: have a sense of where we need to go, what

368
00:20:29,680 --> 00:20:33,560
Speaker 2: are the steps between here and there? Paulson says, part

369
00:20:33,600 --> 00:20:36,000
Speaker 2: of the answer is having a Treasury secretary who has

370
00:20:36,000 --> 00:20:39,600
Speaker 2: the trust of the president and ultimately those on both

371
00:20:39,680 --> 00:20:40,760
Speaker 2: sides of the aisle.

372
00:20:41,520 --> 00:20:46,320
Speaker 13: The number one priority is, first and foremost, develop a

373
00:20:46,400 --> 00:20:51,199
Speaker 13: relationship of trust with the presidents, because Treasury secretary sounds

374
00:20:51,240 --> 00:20:55,000
Speaker 13: like it's a very important position, and it is, But

375
00:20:55,119 --> 00:20:58,600
Speaker 13: all the power really comes to what's delegated by the president,

376
00:20:59,400 --> 00:21:01,760
Speaker 13: and then the relationships they can build on both sides

377
00:21:01,760 --> 00:21:04,520
Speaker 13: of the aisle. Right, So what you have to do

378
00:21:04,880 --> 00:21:09,119
Speaker 13: is you have to convince Democrats and Republicans come with

379
00:21:09,160 --> 00:21:12,679
Speaker 13: ways to bring them together. Regulators are independent, but you

380
00:21:12,720 --> 00:21:16,000
Speaker 13: can have a lot to say if you build relationships.

381
00:21:16,359 --> 00:21:19,280
Speaker 13: So I think a lot of it first and foremost

382
00:21:19,359 --> 00:21:22,680
Speaker 13: is building that relationship of trust right with the president,

383
00:21:23,359 --> 00:21:28,000
Speaker 13: with both sides Democrats and Republicans in Congress, and with

384
00:21:28,119 --> 00:21:28,760
Speaker 13: your colleagues.

385
00:21:29,080 --> 00:21:32,879
Speaker 2: Paulson's successor agrees, but says a Treasury secretary needs to

386
00:21:32,920 --> 00:21:36,280
Speaker 2: balance working across the aisle with speaking truth to.

387
00:21:36,320 --> 00:21:40,119
Speaker 11: Power and with markets and with people around the world

388
00:21:40,359 --> 00:21:43,560
Speaker 11: that want to believe that they can trust in what

389
00:21:43,600 --> 00:21:46,480
Speaker 11: you say, and you'll make choices with integrity. But I

390
00:21:46,480 --> 00:21:48,560
Speaker 11: think Hanks absolutely right. The most important thing is that

391
00:21:48,840 --> 00:21:50,159
Speaker 11: you have to recognize you have to be in a

392
00:21:50,200 --> 00:21:53,560
Speaker 11: position where you are able to say what you think

393
00:21:53,800 --> 00:21:56,879
Speaker 11: is truth and what is important for the country to

394
00:21:56,920 --> 00:21:58,399
Speaker 11: do and not to do. And sometimes you have to

395
00:21:58,400 --> 00:22:01,280
Speaker 11: be the break and the constraint, and sometimes you have

396
00:22:01,320 --> 00:22:04,160
Speaker 11: to be the accelerator, the catalysts that try to move

397
00:22:04,200 --> 00:22:07,760
Speaker 11: a system that's hard to move to better choices.

398
00:22:07,960 --> 00:22:10,600
Speaker 13: I've always said, you don't want some of as treasury

399
00:22:10,640 --> 00:22:13,720
Speaker 13: secretary who's a politician who wants some day to be

400
00:22:13,760 --> 00:22:17,160
Speaker 13: president of the United States, right, because there's a tendency

401
00:22:17,160 --> 00:22:19,879
Speaker 13: to say what people want to hear, right, And you

402
00:22:20,000 --> 00:22:22,440
Speaker 13: need to talk about what people need to hear. But

403
00:22:22,520 --> 00:22:24,800
Speaker 13: you need to have the support of your president to

404
00:22:24,800 --> 00:22:25,840
Speaker 13: be able to speak that way.

405
00:22:26,160 --> 00:22:28,719
Speaker 2: But let's face it, if we were politically easy to

406
00:22:28,720 --> 00:22:31,240
Speaker 2: fix our problem of rising debt, we would have done

407
00:22:31,280 --> 00:22:32,159
Speaker 2: it long before.

408
00:22:32,200 --> 00:22:32,480
Speaker 10: Now.

409
00:22:33,000 --> 00:22:35,760
Speaker 2: Kevin McCarthy knows a thing or two about the intersection

410
00:22:35,880 --> 00:22:37,480
Speaker 2: of politics and policy.

411
00:22:38,160 --> 00:22:40,440
Speaker 12: The interesting part about government. You have very best idea,

412
00:22:40,480 --> 00:22:42,200
Speaker 12: but that doesn't mean it passes. So you have to

413
00:22:42,320 --> 00:22:46,040
Speaker 12: understand policy and politics. And if you don't understand both,

414
00:22:46,119 --> 00:22:47,680
Speaker 12: you're not going to be successful at either.

415
00:22:48,080 --> 00:22:50,080
Speaker 2: And when it comes to the politics of the debt,

416
00:22:50,320 --> 00:22:53,800
Speaker 2: Kevin McCarthy favors taking a chapter from history from other

417
00:22:53,840 --> 00:22:56,560
Speaker 2: times when Congress needed to take big action that was

418
00:22:56,640 --> 00:22:57,639
Speaker 2: politically fraud.

419
00:22:57,960 --> 00:23:00,320
Speaker 12: The way to really tackle it is to look at

420
00:23:00,320 --> 00:23:03,359
Speaker 12: the way we handled after the Soviet Union collapsed in

421
00:23:03,359 --> 00:23:06,159
Speaker 12: the ninety Right, we had all these military bases, but

422
00:23:06,400 --> 00:23:07,879
Speaker 12: the member of Congress is not going to vote to

423
00:23:07,880 --> 00:23:09,920
Speaker 12: shut it down, so they created what was called a

424
00:23:10,000 --> 00:23:13,040
Speaker 12: brack a base realignment and closure. So if we create

425
00:23:13,119 --> 00:23:16,199
Speaker 12: something like this where all parties get to appoint some

426
00:23:16,760 --> 00:23:19,159
Speaker 12: they have to one package has to be able to

427
00:23:19,160 --> 00:23:21,960
Speaker 12: come out of that committee, no amendments. You voted up

428
00:23:22,040 --> 00:23:23,960
Speaker 12: or voted down. So at the end of the day

429
00:23:24,160 --> 00:23:28,280
Speaker 12: that decision will be made on both parties doing it together.

430
00:23:28,560 --> 00:23:32,040
Speaker 12: Don't criticize each other, but make that decision now. And

431
00:23:32,359 --> 00:23:35,440
Speaker 12: these big problems that are macro problems, you can't solve

432
00:23:35,440 --> 00:23:38,639
Speaker 12: them by one party, and our government is not designed

433
00:23:38,840 --> 00:23:40,080
Speaker 12: where one party rules.

434
00:23:40,200 --> 00:23:42,400
Speaker 4: You have to have compromise. In the end.

435
00:23:42,560 --> 00:23:44,880
Speaker 2: It's not that we need to be reconciled to doing

436
00:23:44,920 --> 00:23:47,639
Speaker 2: something about the national debt. It's not really about what

437
00:23:47,800 --> 00:23:50,399
Speaker 2: needs to be done. It's not even about how we

438
00:23:50,480 --> 00:23:53,840
Speaker 2: could go about it. It comes down to reconciling ourselves

439
00:23:53,960 --> 00:23:57,840
Speaker 2: to doing something now. If we fail, we're going to

440
00:23:57,840 --> 00:24:01,119
Speaker 2: have to reconcile ourselves to impose them problem on the

441
00:24:01,160 --> 00:24:02,040
Speaker 2: next generation.

442
00:24:04,640 --> 00:24:08,040
Speaker 1: You're listening to Bloomberg Wall Street Week with David Weston

443
00:24:08,200 --> 00:24:10,399
Speaker 1: from Bloomberg Radio.

444
00:24:09,800 --> 00:24:13,359
Speaker 10: With the Bloomberg Small Business Report. I'm Tracy Johnki. You

445
00:24:13,480 --> 00:24:15,919
Speaker 10: might be hearing a lot from mom and pomp this

446
00:24:16,080 --> 00:24:20,160
Speaker 10: holiday season. Small and local retailers are working just as

447
00:24:20,240 --> 00:24:23,120
Speaker 10: hard or harder to bring in shoppers, and just over

448
00:24:23,280 --> 00:24:27,520
Speaker 10: half tell a Constant Contact survey they believe social media

449
00:24:27,560 --> 00:24:30,840
Speaker 10: and email marketing have the biggest impact on their holiday

450
00:24:30,960 --> 00:24:35,320
Speaker 10: sales goals. Constant Contact advises them to start early, don't

451
00:24:35,359 --> 00:24:39,400
Speaker 10: wait until November, to engage customers online and through email,

452
00:24:39,600 --> 00:24:42,719
Speaker 10: and automate as much of that outreach as possible so

453
00:24:42,760 --> 00:24:46,360
Speaker 10: they can focus on the in person experience. This year,

454
00:24:46,440 --> 00:24:50,479
Speaker 10: small retailers may need to extend their promotional activity beyond

455
00:24:50,600 --> 00:24:54,680
Speaker 10: December twenty fifth. That's because Hanukah begins on that day.

456
00:24:55,080 --> 00:24:58,520
Speaker 10: The owner of Emerald City Gifts in Studio City, California

457
00:24:58,600 --> 00:25:01,399
Speaker 10: tells the AP the a week between Christmas and New

458
00:25:01,480 --> 00:25:04,880
Speaker 10: Year's is usually a recovery period, but this year they'll

459
00:25:04,920 --> 00:25:08,480
Speaker 10: be busy until after January second, and that's the small

460
00:25:08,480 --> 00:25:09,520
Speaker 10: business report.

461
00:25:09,760 --> 00:25:11,720
Speaker 14: I always have to be so good, no one could

462
00:25:11,760 --> 00:25:15,879
Speaker 14: ignore me. Carve my path with data and drive, but

463
00:25:16,000 --> 00:25:19,320
Speaker 14: some people only see who I am on paper. The

464
00:25:19,320 --> 00:25:22,879
Speaker 14: paper ceiling. The limitations from degree screens to stereotypes that

465
00:25:22,920 --> 00:25:26,600
Speaker 14: are holding back over seventy million stars workers skill through

466
00:25:26,600 --> 00:25:30,280
Speaker 14: alternative rocks rather than a bachelor's degree. It's time for

467
00:25:30,320 --> 00:25:34,200
Speaker 14: skills to speak for themselves. Find resources for breaking through

468
00:25:34,240 --> 00:25:37,760
Speaker 14: barriers at Taylorpaperseiling dot Org. Brought to you by Opportunity

469
00:25:37,800 --> 00:25:38,919
Speaker 14: at Work and the Ad Council.

470
00:25:39,359 --> 00:25:43,560
Speaker 1: This is Bloomberg Wall Street Week with David Weston from

471
00:25:43,720 --> 00:25:44,600
Speaker 1: Bloomberg Radio.

472
00:25:45,280 --> 00:25:47,919
Speaker 15: Ladies and gentlemen, of course, we'll welcome to our twentieth

473
00:25:47,960 --> 00:25:50,040
Speaker 15: century and contemporary at Evening Seal.

474
00:25:50,880 --> 00:25:54,720
Speaker 2: This is a story about investing in our passions. For many,

475
00:25:55,040 --> 00:25:58,280
Speaker 2: art is a passion, but it's also a big business,

476
00:25:58,560 --> 00:26:01,639
Speaker 2: one that generated over sixty five billion dollars in sales

477
00:26:01,720 --> 00:26:04,399
Speaker 2: last year. And at the core of that business are

478
00:26:04,480 --> 00:26:07,760
Speaker 2: people who buy the art, people like Peter Krauss.

479
00:26:09,600 --> 00:26:12,720
Speaker 16: Remember, these pieces of work are these assets, if you

480
00:26:12,720 --> 00:26:14,920
Speaker 16: want to call them that. They don't produce an income.

481
00:26:15,240 --> 00:26:18,640
Speaker 16: They don't have a coupon associated with them. The only

482
00:26:18,720 --> 00:26:20,480
Speaker 16: income that you get is the appreciation.

483
00:26:21,520 --> 00:26:25,239
Speaker 2: Krauss is chairman and CEO of Aperture Investors and has

484
00:26:25,240 --> 00:26:29,240
Speaker 2: spent a career in finance, including as head of Alliance Bernstein.

485
00:26:29,720 --> 00:26:31,840
Speaker 2: With his wife, he has also become one of the

486
00:26:31,840 --> 00:26:34,119
Speaker 2: most avid art collectors on Wall Street.

487
00:26:34,560 --> 00:26:37,000
Speaker 16: My wife and I've been collecting since we got married,

488
00:26:37,040 --> 00:26:39,879
Speaker 16: which is forty four years and the first thing we

489
00:26:39,920 --> 00:26:44,320
Speaker 16: bought was really sort of a small print. And I

490
00:26:44,480 --> 00:26:47,959
Speaker 16: said to the galerist, who's not alive any longer, I said, well,

491
00:26:48,000 --> 00:26:50,520
Speaker 16: you know what I like, and if you have any more,

492
00:26:50,600 --> 00:26:53,000
Speaker 16: give me a call. And he looked at me and

493
00:26:53,040 --> 00:26:55,840
Speaker 16: he said, here's what we're going to do. If you

494
00:26:55,920 --> 00:26:58,600
Speaker 16: want to collect art, he will come in every Saturday

495
00:26:59,000 --> 00:27:01,200
Speaker 16: and I will show you art. But if you think

496
00:27:01,240 --> 00:27:02,800
Speaker 16: I'm going to call you on the phone and tell

497
00:27:02,840 --> 00:27:04,800
Speaker 16: you there's something for you to come and see, that's

498
00:27:04,840 --> 00:27:11,920
Speaker 16: not happening. And I took his adminission seriously and we

499
00:27:11,960 --> 00:27:14,440
Speaker 16: went We my wife and I went in every Saturday,

500
00:27:15,320 --> 00:27:18,360
Speaker 16: and every Saturday he showed us work, most of which

501
00:27:18,359 --> 00:27:24,080
Speaker 16: we couldn't afford, but all kinds of paintings, very little sculpture,

502
00:27:24,080 --> 00:27:27,639
Speaker 16: but song. And we finally found a painting that we

503
00:27:27,920 --> 00:27:31,679
Speaker 16: liked and we bought and it was six thousand dollars

504
00:27:32,480 --> 00:27:34,879
Speaker 16: and we paid for it five hundred dollars a month

505
00:27:35,280 --> 00:27:36,680
Speaker 16: until it was paid off.

506
00:27:37,440 --> 00:27:40,439
Speaker 2: Over the decades, Kraus and his wife Jill have added

507
00:27:40,480 --> 00:27:43,880
Speaker 2: to that single work, paid for an installments, and assembled

508
00:27:43,920 --> 00:27:47,560
Speaker 2: a very large collection. It's people like the Krouses who

509
00:27:47,640 --> 00:27:50,040
Speaker 2: are at the center of a growing web of players,

510
00:27:50,400 --> 00:27:54,560
Speaker 2: including auction houses, banks and advisors. They connect one of

511
00:27:54,560 --> 00:27:57,919
Speaker 2: the kind assets to collectors of all levels, from the

512
00:27:58,040 --> 00:28:00,720
Speaker 2: very experienced to those just starting out.

513
00:28:01,520 --> 00:28:05,240
Speaker 17: A lot of times clients because they're because art is

514
00:28:05,280 --> 00:28:09,240
Speaker 17: such a passion for them, it's a pastime, and so

515
00:28:09,560 --> 00:28:12,600
Speaker 17: they'll let their guard down, which is, you know, wonderful,

516
00:28:12,720 --> 00:28:14,720
Speaker 17: but at the same time, you might you don't want

517
00:28:14,720 --> 00:28:16,880
Speaker 17: to be caught off guard and have a surprise later

518
00:28:17,040 --> 00:28:20,199
Speaker 17: and buy something that maybe you know was overpriced or

519
00:28:20,280 --> 00:28:23,760
Speaker 17: you just weren't aware of all of the factors involved.

520
00:28:24,520 --> 00:28:27,719
Speaker 2: Poteeni Zidis is head of Art Finance at City, one

521
00:28:27,760 --> 00:28:30,320
Speaker 2: of the major banks that have added art advisory and

522
00:28:30,359 --> 00:28:34,520
Speaker 2: financing to their investment offerings. When needed, they lend against

523
00:28:34,560 --> 00:28:37,640
Speaker 2: the investors' collections to provide the liquidity needed to acquire

524
00:28:37,720 --> 00:28:41,280
Speaker 2: new art. Zidis works with Mary Kate O'Hare, who runs

525
00:28:41,320 --> 00:28:43,240
Speaker 2: City's art advisory business.

526
00:28:43,920 --> 00:28:46,720
Speaker 18: One of the most important roles of an art advisor

527
00:28:46,960 --> 00:28:50,880
Speaker 18: is the ability to tell a client no, because you

528
00:28:50,880 --> 00:28:53,480
Speaker 18: you know, sometimes clients will send us stuff and say

529
00:28:53,520 --> 00:28:56,960
Speaker 18: what do you think about this, and it's it's you know,

530
00:28:57,120 --> 00:29:00,320
Speaker 18: I think again. We're always looking out for our client's

531
00:29:00,320 --> 00:29:03,880
Speaker 18: best interest we are. You want to make sure they're

532
00:29:03,880 --> 00:29:05,800
Speaker 18: getting the best they can So if we don't think

533
00:29:05,840 --> 00:29:09,840
Speaker 18: it's the right piece, we'll explain the reasons why. Then

534
00:29:09,840 --> 00:29:12,200
Speaker 18: the client is equipped with the information, they can always

535
00:29:12,240 --> 00:29:14,400
Speaker 18: make a decision say nope, I love it, but then

536
00:29:14,440 --> 00:29:16,040
Speaker 18: they go into it with eyes wide open.

537
00:29:16,840 --> 00:29:19,440
Speaker 2: Doing that can be a challenge in a market that's

538
00:29:19,480 --> 00:29:23,560
Speaker 2: notoriously opaque, but for buyers like Peter Krauss, variety and

539
00:29:23,680 --> 00:29:27,200
Speaker 2: risk can be both a bug and feature setting art

540
00:29:27,280 --> 00:29:29,920
Speaker 2: far apart from the kind of assets he's spent his

541
00:29:30,000 --> 00:29:31,120
Speaker 2: life investing in.

542
00:29:32,000 --> 00:29:34,160
Speaker 16: It's not like the stock market where you want to

543
00:29:34,200 --> 00:29:38,640
Speaker 16: buy a share of Tesla, and all the shares of

544
00:29:38,680 --> 00:29:41,720
Speaker 16: Tesla are exactly the same. Whether it's the first share

545
00:29:41,800 --> 00:29:44,120
Speaker 16: or the a share of the one million share, doesn't matter.

546
00:29:44,120 --> 00:29:45,960
Speaker 16: They're all the same. That's not true for it.

547
00:29:46,680 --> 00:29:48,960
Speaker 2: While each work of art is unique. So there's a

548
00:29:49,000 --> 00:29:52,280
Speaker 2: big business in bringing some clarity to the market and

549
00:29:52,320 --> 00:29:56,960
Speaker 2: in bringing together the buyers and sellers. Enter Edward Dolman.

550
00:29:57,120 --> 00:29:59,880
Speaker 4: Well, basically it's a sort of perfect form of the market.

551
00:30:00,040 --> 00:30:02,800
Speaker 4: It is the ultimates of demand and supply where the

552
00:30:02,840 --> 00:30:06,320
Speaker 4: two meet with an auctioneer in front of all our

553
00:30:06,400 --> 00:30:09,640
Speaker 4: clients who have come along to bid for the works

554
00:30:09,640 --> 00:30:11,360
Speaker 4: of art that we've offered for sale.

555
00:30:12,160 --> 00:30:15,320
Speaker 2: After a twenty seven year career at Christie's, Edward Dolman

556
00:30:15,360 --> 00:30:19,960
Speaker 2: became CEO of Phillips, which specializes in contemporary art. Auction

557
00:30:20,040 --> 00:30:24,080
Speaker 2: Houses like Phillips, Sotheby's and Christie's provide a public forum

558
00:30:24,160 --> 00:30:27,880
Speaker 2: for price discovery at events throughout the year, including big

559
00:30:27,880 --> 00:30:29,720
Speaker 2: ones in the spring and the fall.

560
00:30:30,800 --> 00:30:34,640
Speaker 4: So the art business is essentially driven by this auction machine.

561
00:30:34,680 --> 00:30:38,320
Speaker 4: But round it is a huge sort of ecosystem of

562
00:30:38,920 --> 00:30:46,000
Speaker 4: galleries and collectors and museums and art institutions. So we're

563
00:30:46,040 --> 00:30:48,840
Speaker 4: a big community. But I do think the auctions are

564
00:30:48,840 --> 00:30:50,040
Speaker 4: properly at the heart of it.

565
00:30:50,320 --> 00:30:53,480
Speaker 15: And we can open up with good interests on the

566
00:30:53,520 --> 00:30:56,520
Speaker 15: phones in the room and online. Good luck to you

567
00:30:56,600 --> 00:31:01,880
Speaker 15: all at six as I have with advanced it already.

568
00:31:01,760 --> 00:31:04,680
Speaker 4: It's been transformed actually in the time that I've been

569
00:31:04,720 --> 00:31:07,720
Speaker 4: in it advance, which is a long time, that's thirty

570
00:31:07,760 --> 00:31:12,280
Speaker 4: five years. When I first started, the market was opaque,

571
00:31:12,600 --> 00:31:14,960
Speaker 4: to say the least. The only people had any pricing

572
00:31:14,960 --> 00:31:17,680
Speaker 4: information where the auctioneers and the dealers who attended the

573
00:31:17,680 --> 00:31:20,320
Speaker 4: auctions and wrote down all the prices in their catalogs.

574
00:31:20,440 --> 00:31:25,120
Speaker 4: And I think the biggest transformative event in our world

575
00:31:25,120 --> 00:31:28,360
Speaker 4: has been information and access to data. So really the

576
00:31:28,760 --> 00:31:31,240
Speaker 4: market we see now, what's so different about it is

577
00:31:32,320 --> 00:31:35,520
Speaker 4: the access to information that everybody has who's in that

578
00:31:35,680 --> 00:31:40,080
Speaker 4: room competing, whether they're in Asia or South America, or

579
00:31:40,120 --> 00:31:42,800
Speaker 4: Europe or America, they have access to the same information.

580
00:31:43,600 --> 00:31:47,280
Speaker 2: Better information is one change in the auction business. Another

581
00:31:47,600 --> 00:31:50,520
Speaker 2: is the size of the guarantees auction houses are called

582
00:31:50,560 --> 00:31:54,040
Speaker 2: upon to give sellers and methods they've developed to help

583
00:31:54,120 --> 00:31:57,120
Speaker 2: share the risk of those guarantees with would be buyers.

584
00:31:58,040 --> 00:32:00,400
Speaker 4: As the sort of scale of the art of the

585
00:32:00,440 --> 00:32:04,400
Speaker 4: auctions have gone bigger just in terms of monetary values,

586
00:32:05,560 --> 00:32:07,960
Speaker 4: it's impossible for the auction houses to take the risk

587
00:32:08,600 --> 00:32:12,920
Speaker 4: on their own balance sheets, and so you know, there

588
00:32:12,960 --> 00:32:17,600
Speaker 4: has been a very sophisticated sort of development of the

589
00:32:17,640 --> 00:32:21,560
Speaker 4: concept of the irrevocable bid, where an auction house will

590
00:32:21,640 --> 00:32:24,560
Speaker 4: look and try and find someone who wants to take

591
00:32:24,800 --> 00:32:27,040
Speaker 4: the risk from you, someone who actually loves the work

592
00:32:27,080 --> 00:32:29,640
Speaker 4: of art is very interesting wants to buy it at

593
00:32:29,640 --> 00:32:32,360
Speaker 4: that particular level. A key part of the auction business

594
00:32:32,360 --> 00:32:35,440
Speaker 4: now is looking for these counterparties and trying to make

595
00:32:35,480 --> 00:32:38,880
Speaker 4: sure that the risk is spread and is taken off

596
00:32:38,920 --> 00:32:43,200
Speaker 4: the auction house balance sheet and placed elsewhere who.

597
00:32:43,080 --> 00:32:45,680
Speaker 2: Like to open the bidding Here the price may be

598
00:32:45,720 --> 00:32:49,080
Speaker 2: public and the seller may be protected by guarantees and

599
00:32:49,160 --> 00:32:53,320
Speaker 2: arobical bids, But for the buyer the question remains whether

600
00:32:53,400 --> 00:32:56,000
Speaker 2: a work of art is worth the prices being bid,

601
00:32:56,520 --> 00:32:59,440
Speaker 2: and also how those prices might be financed, Which is

602
00:32:59,480 --> 00:33:02,360
Speaker 2: where for t Itis and her colleagues at City come

603
00:33:02,400 --> 00:33:03,600
Speaker 2: in at one.

604
00:33:03,560 --> 00:33:06,440
Speaker 5: Undred and seventy million for the wall is selling here

605
00:33:07,520 --> 00:33:09,600
Speaker 5: to you one U seventy million dollars.

606
00:33:10,800 --> 00:33:15,160
Speaker 17: The art market can be still opaque. It has gained

607
00:33:15,160 --> 00:33:18,840
Speaker 17: transparency in some ways, but in many ways it still

608
00:33:18,880 --> 00:33:23,160
Speaker 17: remains not a transparent market. A novice collector might need

609
00:33:23,200 --> 00:33:25,719
Speaker 17: some guidance. So some of the things we look at

610
00:33:25,840 --> 00:33:30,240
Speaker 17: when evaluating art, be that for an acquisition, a sale

611
00:33:30,600 --> 00:33:34,560
Speaker 17: as collateral for an art loan, for insurance purposes. We

612
00:33:34,560 --> 00:33:37,000
Speaker 17: look at a range of factors. We look at an

613
00:33:37,120 --> 00:33:40,960
Speaker 17: artist's market history it's a more established artist, we look

614
00:33:41,000 --> 00:33:45,120
Speaker 17: at longevity of that market and what's happening. We look

615
00:33:45,160 --> 00:33:48,960
Speaker 17: at the individual artwork itself, so the sale history of

616
00:33:49,000 --> 00:33:53,360
Speaker 17: that work oftentimes or not oftentimes. But sometimes artworks might

617
00:33:53,640 --> 00:33:56,400
Speaker 17: show up for sale several times at auction, and what

618
00:33:56,440 --> 00:33:58,920
Speaker 17: does that tell you? Did it fail to sell? Is

619
00:33:58,960 --> 00:34:02,440
Speaker 17: it a quote unquote us to the market work for

620
00:34:02,520 --> 00:34:05,640
Speaker 17: which sometimes there's a premium because that work has been

621
00:34:05,680 --> 00:34:07,360
Speaker 17: off the market for a number of years, and that

622
00:34:07,400 --> 00:34:09,960
Speaker 17: creates a lot of kind of excitement when it comes

623
00:34:10,040 --> 00:34:11,000
Speaker 17: up for sale.

624
00:34:11,800 --> 00:34:15,080
Speaker 2: Banks like City rely on their assessment of works value

625
00:34:15,080 --> 00:34:17,720
Speaker 2: in making loans to the buyers a good many loans.

626
00:34:18,160 --> 00:34:22,440
Speaker 2: According to Deloitte, outstanding borrowing against art could surpass thirty

627
00:34:22,480 --> 00:34:26,000
Speaker 2: six billion dollars this year, up from a projected twenty

628
00:34:26,080 --> 00:34:29,880
Speaker 2: nine to thirty four billion dollars in twenty twenty three. Banks,

629
00:34:30,000 --> 00:34:33,480
Speaker 2: non banks and boutique lenders have increased their lending by

630
00:34:33,480 --> 00:34:35,920
Speaker 2: one hundred and nineteen percent over the past five years.

631
00:34:36,280 --> 00:34:38,880
Speaker 2: But these loans are not simply secured by the value

632
00:34:38,880 --> 00:34:42,719
Speaker 2: of the art being bought. They're made to the purchasers themselves.

633
00:34:43,440 --> 00:34:46,360
Speaker 17: As a bank, we offer recourse loans, which is different

634
00:34:46,400 --> 00:34:53,400
Speaker 17: than asset based lenders. So the art is definitely, you know, important,

635
00:34:54,120 --> 00:34:57,200
Speaker 17: and that's why the clients are able to typically live

636
00:34:57,239 --> 00:34:59,080
Speaker 17: with the art on their wall. So we don't take

637
00:34:59,120 --> 00:35:02,400
Speaker 17: possession of the art, so clients keep it in their homes.

638
00:35:02,440 --> 00:35:05,759
Speaker 17: Typically the art can appreciate in value and they can

639
00:35:05,800 --> 00:35:10,040
Speaker 17: take that capital and put it towards other investments, purchase

640
00:35:10,080 --> 00:35:13,560
Speaker 17: more art, you know, various purposes, but it is primarily

641
00:35:13,600 --> 00:35:19,160
Speaker 17: based on the client's financial picture. There are asset based

642
00:35:19,520 --> 00:35:25,440
Speaker 17: lenders out there, for sure that are competing. However, it's

643
00:35:25,480 --> 00:35:29,080
Speaker 17: a different model, I would say, because in some cases

644
00:35:29,160 --> 00:35:33,279
Speaker 17: they may have to take possession of the art. Typically

645
00:35:33,320 --> 00:35:37,200
Speaker 17: the rates would be higher than what a bank would offer.

646
00:35:37,880 --> 00:35:40,520
Speaker 2: As borrows money becomes a bigger piece of the puzzle.

647
00:35:40,640 --> 00:35:43,839
Speaker 2: It also means that now, more than ever before, the

648
00:35:43,880 --> 00:35:47,120
Speaker 2: fortunes of the art industry have become more closely tied

649
00:35:47,160 --> 00:35:50,800
Speaker 2: with interest rates, which may help explain why overall art

650
00:35:50,800 --> 00:35:53,880
Speaker 2: market sales were down four percent last year from the

651
00:35:53,960 --> 00:35:54,560
Speaker 2: year before.

652
00:35:55,200 --> 00:35:58,719
Speaker 4: You can actually look at the growth or contractions in

653
00:35:58,760 --> 00:36:02,680
Speaker 4: our market and get a better understanding of the relationship

654
00:36:02,760 --> 00:36:06,160
Speaker 4: of art and finance, and I think it reflects a

655
00:36:06,160 --> 00:36:07,840
Speaker 4: lot of the lending that I was talking about, the

656
00:36:07,880 --> 00:36:10,680
Speaker 4: sort of explosion in terms of lending against works of art.

657
00:36:10,960 --> 00:36:14,239
Speaker 4: The interest rates on those loans have become a more

658
00:36:14,239 --> 00:36:17,799
Speaker 4: and more significant player in our world. So whilst the

659
00:36:17,800 --> 00:36:20,719
Speaker 4: stock markets have done reasonably well over the last couple

660
00:36:20,760 --> 00:36:23,600
Speaker 4: of years, you know, the art market has felt a

661
00:36:23,640 --> 00:36:25,919
Speaker 4: little bit of a decline, and I think that has

662
00:36:25,960 --> 00:36:30,560
Speaker 4: been driven largely by interest rates and significantly higher levels

663
00:36:30,560 --> 00:36:32,680
Speaker 4: of interest rates we have now than we add for

664
00:36:32,760 --> 00:36:36,240
Speaker 4: a long time between twenty fourteen and sort of twenty

665
00:36:36,320 --> 00:36:37,040
Speaker 4: twenty two.

666
00:36:37,520 --> 00:36:39,319
Speaker 15: Fourteen million, nine hundred thousands.

667
00:36:39,680 --> 00:36:43,040
Speaker 2: Today the art market is larger and more transparent than

668
00:36:43,080 --> 00:36:46,040
Speaker 2: in the past, and it's interwoven with interest rates and

669
00:36:46,080 --> 00:36:49,799
Speaker 2: financing and expert advisors. But in the end, whether you're

670
00:36:49,800 --> 00:36:53,040
Speaker 2: an art investor, a collector, or something of a mix

671
00:36:53,080 --> 00:36:56,080
Speaker 2: of the two, the value of your purchase depends in

672
00:36:56,120 --> 00:37:00,360
Speaker 2: part and whether it will resonate through times minute. In

673
00:37:00,400 --> 00:37:04,839
Speaker 2: the media, more generally, we follow certain phenomena that rise

674
00:37:04,920 --> 00:37:06,239
Speaker 2: up and all of a sudden there's a great deal

675
00:37:06,280 --> 00:37:08,960
Speaker 2: of interest a certain artists or a certain form of art,

676
00:37:09,520 --> 00:37:13,200
Speaker 2: sometimes which goes away from your experience over quite a

677
00:37:13,200 --> 00:37:16,040
Speaker 2: few years in this business. Can you discern the difference

678
00:37:16,080 --> 00:37:17,520
Speaker 2: between a fad and a trend?

679
00:37:19,760 --> 00:37:23,200
Speaker 4: It's a very good question. I didn't think I can,

680
00:37:24,000 --> 00:37:24,760
Speaker 4: that's the truth.

681
00:37:24,880 --> 00:37:28,880
Speaker 16: I think it's impossible I literally think it's impossible. I

682
00:37:28,960 --> 00:37:33,480
Speaker 16: think that if you were to ask yourself the question

683
00:37:34,280 --> 00:37:36,799
Speaker 16: if you went back to Renaissance times and we're in

684
00:37:36,880 --> 00:37:40,480
Speaker 16: Leonardo da Vinci's studio and he was painting the Mona Lisa,

685
00:37:40,640 --> 00:37:41,600
Speaker 16: would you have known?

686
00:37:42,960 --> 00:37:44,000
Speaker 10: Probably hard to tell.

687
00:37:44,840 --> 00:37:48,600
Speaker 2: But fortunately for a true collector like Peter Krass, it's

688
00:37:48,640 --> 00:37:50,759
Speaker 2: not about predicting where the market will go.

689
00:37:51,520 --> 00:37:55,360
Speaker 16: As a collector, the key issue is trying to unlock

690
00:37:55,760 --> 00:37:59,880
Speaker 16: the language that the artist is using to communicate the

691
00:38:00,160 --> 00:38:03,640
Speaker 16: feelings or whatever they're putting into the art. And it's

692
00:38:03,680 --> 00:38:06,840
Speaker 16: trying to figure out that language. That's the mystery of me.

693
00:38:07,760 --> 00:38:10,840
Speaker 16: And where you figure out that language, then all of

694
00:38:10,880 --> 00:38:12,640
Speaker 16: a sudden you see what the artist is doing. You

695
00:38:12,680 --> 00:38:15,000
Speaker 16: may not like it, it may not speak to you.

696
00:38:15,400 --> 00:38:17,320
Speaker 16: But if it does speak to you, if that language

697
00:38:17,360 --> 00:38:19,400
Speaker 16: is something you read and it does excite you and

698
00:38:19,440 --> 00:38:22,360
Speaker 16: it moves you, that's interesting for.

699
00:38:22,440 --> 00:38:25,600
Speaker 2: The true art collector. As for the true artist, maybe

700
00:38:25,640 --> 00:38:28,040
Speaker 2: it doesn't matter how many people are moved by a piece.

701
00:38:28,560 --> 00:38:30,160
Speaker 2: One can be enough.

702
00:38:33,040 --> 00:38:33,480
Speaker 1: That does it.

703
00:38:33,600 --> 00:38:36,520
Speaker 2: For this edition of Bloomberg Wall Street Week, I'm David Weston.

704
00:38:36,640 --> 00:38:37,319
Speaker 4: Stay with us.

705
00:38:37,440 --> 00:38:40,680
Speaker 2: Today's top stories and global business headlines are coming up

706
00:38:40,920 --> 00:38:41,560
Speaker 2: right now,