Speaker 1: This is Bloomberg Business Wait inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business finance and tech news. The Bloomberg Business Week
Speaker 1: Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Speaker 2: And we've been talking about this morning's Labor Department report
Speaker 2: mixed in terms of non farm payrolls coming in really strong,
Speaker 2: but the unemployment employment rate excuse me, rising to three
Speaker 2: point seven percent. Wage growth also was Gosha, Yeah, why
Speaker 2: did my notes I don't know. For some reason, my
Speaker 2: notes were weird. I mean it was a lot of
Speaker 2: it was a lot of moving parts that didn't necessarily yes,
Speaker 2: it can take for your picture.
Speaker 3: It was I think Julia Cornado called it a squirrely report,
Speaker 3: right that a few of those, as we've been talking about,
Speaker 3: the household survey and the establishment survey go in completely
Speaker 3: different directions. So it's hard to really get a grasp
Speaker 3: on what is.
Speaker 4: Happening with this labor market.
Speaker 3: Is it just bursting at the seams with growth or
Speaker 3: is it starting to finally shrivel up under intense interest
Speaker 3: rate hikes.
Speaker 2: Which is why we rely on people like Julia Pollock exactly.
Speaker 2: She's chief economis at zip Recruiter. She's on Zoom from
Speaker 2: a Los Angeles Julia. Hey, good to have you back
Speaker 2: with us. Yeah, it is a little bit confusing, safe
Speaker 2: to say. And as Matt said, you know, he's been
Speaker 2: talking about the two different surveys, and we've gotten different
Speaker 2: reports from that monthly labor report.
Speaker 4: And even anecdotally.
Speaker 3: You know, we hear about big We hear about big
Speaker 3: tech companies firing people all the time. I know a
Speaker 3: ton of twenty something year old kids that are looking
Speaker 3: for a job and they say it's not easy. We
Speaker 3: had a story about a Harvard grad who sent out
Speaker 3: one hundred resumes before she got a job.
Speaker 2: Correct.
Speaker 3: So you know, at the same time, fourteen months in
Speaker 3: a row, we've beaten the estimate with non farm payrolls.
Speaker 4: So what is going on?
Speaker 5: Well, first the good the establishment survey was strong. Job
Speaker 5: growth was very, very broad based, and the economy seems
Speaker 5: to be adding not just low wage leading hospitality jobs,
Speaker 5: but high wage jobs in professional and business services. There
Speaker 5: were even job gains in the most unlikely places like construction,
Speaker 5: which we know has been hit hard by the housing
Speaker 5: downturn and high interest rates, and in transportation and warehousing,
Speaker 5: where recently businesses are reporting a freight recession. They're calling
Speaker 5: it truckers can't find loads to drive. So that was
Speaker 5: sort of the surprising positive in this report. That was
Speaker 5: extraordinarily positive even within dis establishment survey, though there are
Speaker 5: some warning signs.
Speaker 2: So I'm sorry, I interrupted, Please continue.
Speaker 5: No, I'll just say that not even the establishment survey
Speaker 5: is not a slam dunk. Wage growth cooled, working hours shrank,
Speaker 5: And then the two sectors that we know are having
Speaker 5: the most troubble, information and manufacturing continued to post job
Speaker 5: losses and I don't think we're at the end of
Speaker 5: those yet. The manufacturing reports that came out this week
Speaker 5: showed a steep drop in new orders, and that suggests
Speaker 5: that further job losses are coming down the pike because
Speaker 5: new activity is slowing up.
Speaker 3: So okay, So it was an extraordinarily strong report, but
Speaker 3: with some weakness in it. And then when you look
Speaker 3: at the household survey, three hundred and thirteen thousand jobless
Speaker 3: claims and four hundred and forty thousand job seekers and
Speaker 3: an unemployment rate that rose from three point four percent
Speaker 3: to three point seven percent, even worse. If you look at,
Speaker 3: for example, black employment was at a record love I
Speaker 3: think four point seven percent and has or four point
Speaker 3: six percent has risen to five point seven percent.
Speaker 4: That seems to be worrying.
Speaker 5: It is worrying. And what past research shows is that
Speaker 5: the household survey tends to be more sensitive when the
Speaker 5: economy is entering a downturn at sort of turning points.
Speaker 5: The Establishment Survey can get it wrong because its birth
Speaker 5: and death model doesn't sort of capture the fact that
Speaker 5: businesses are closing. The household survey, those ratios, the lake
Speaker 5: force participation ratio, and the employment rates for different population groups,
Speaker 5: those don't typically change. They're very sort of revealing, and
Speaker 5: that increase in the unemployment rate is very large. It
Speaker 5: puts it in the sort of top ten percent of
Speaker 5: any increases we've ever seen. It is concerning, and it's
Speaker 5: not just driven by good news for good reasons like
Speaker 5: increased participation that maybe explains about thirty percent of the increase.
Speaker 5: It's also driven by bad news, by an uptick in
Speaker 5: job losses.
Speaker 2: So is there any kind of net takeaway from this
Speaker 2: morning's release.
Speaker 5: I think the net takeaway is that the truth is
Speaker 5: probably softer than these blockbuster top line numbers would suggest.
Speaker 5: Many lave market indicators have come all the way back
Speaker 5: to their pre pandemic levels. Job switching is all the
Speaker 5: way back, according to the household survey. The quits rate
Speaker 5: and the jolt support also came pretty much all the
Speaker 5: way back to where it was before the pandemic. That's
Speaker 5: not really consistent with more than ten million job openings
Speaker 5: and continued blockbuster job gains like this. It's more consistent
Speaker 5: with sort of the kinds of gains we saw before
Speaker 5: the pandemic one hundred and hundred and ninety thousand jobs
Speaker 5: a month, and that's probably where we're headed, you know,
Speaker 5: if we managed to avoid a steeper downturn in tech
Speaker 5: and manufacturing and the cascading downturn.
Speaker 3: You mentioned information as one of the sectors that is losing.
Speaker 4: I guess do you mean it?
Speaker 3: Information technology is that you know, the Microsofts and the
Speaker 3: facebooks of the world.
Speaker 5: So the information sector contains a bunch of things in
Speaker 5: it tech, so software publishing, but also the media, and
Speaker 5: often the two go together because the tech sector uses
Speaker 5: advertising to expand its sales, which really depend on network
Speaker 5: effects and the all of the industries that rely on
Speaker 5: advertising spending then get hit when when tech is a
Speaker 5: bit of in the crosshairs.
Speaker 3: No, but you can see if you can see from
Speaker 3: the household sector essentially that we're at a turning point,
Speaker 3: that we're ahead of a downturn. Can you see also
Speaker 3: from the data, which industries are going to be, you know,
Speaker 3: losing the most jobs.
Speaker 4: Where are we going to see the most firings.
Speaker 5: So that's hard to know now because this downturn is
Speaker 5: so different from what we usually see. This is more
Speaker 5: of a white collar recession than past downturns have been,
Speaker 5: to the extent that there was a slow down. Right,
Speaker 5: this is still a very very strong labor market, but
Speaker 5: the weakness is not popping up where it usually does.
Speaker 5: That said, the interest rates sensitive industries are very vulnerable,
Speaker 5: and unless mortgage rates come down and there's an uptick
Speaker 5: in housing, we will likely see a downturn in constructor
Speaker 5: in construction employment soon, and manufacturing could still have quite
Speaker 5: a long way to go. Many retailers have reported in
Speaker 5: their earnings calls the last few weeks that they've seen
Speaker 5: much more softening in demand in the first few months
Speaker 5: of the year than they had expected, and that that
Speaker 5: is going to reduce their orders going forward.
Speaker 2: Hey, Jillie, you just got about a minute and a
Speaker 2: half or so left here. One of the reasons we
Speaker 2: like to talk with you is, you know, we get
Speaker 2: data points, certainly from private firms, we get it from
Speaker 2: the government. You guys are an employment marketplace, right, so
Speaker 2: you are seeing things in real time. Tell us what
Speaker 2: you are seeing on the platform in terms terms of
Speaker 2: demand for jobs openings and what it tells you.
Speaker 5: Right, So we see that job postings are still above
Speaker 5: their pre pandemic level, but that they've softened a lot
Speaker 5: more than the official job openings report from the Labor
Speaker 5: Department suggests job openings of down sixteen percent from their
Speaker 5: peak in the jaults report from the Labor Department, but
Speaker 5: about thirty six percent down from their peak online across
Speaker 5: the web. And job seekers are noticing a change in
Speaker 5: the dynamics and they're starting to feel a bit more
Speaker 5: nervous about the album.
Speaker 2: So what does that mean that people are probably less
Speaker 2: likely leaving jobs for new jobs? Are they more willing
Speaker 2: to go into the office rather than work from home?
Speaker 2: I'm just curious what that means.
Speaker 5: Right, And so one reason for the discrepancy between the
Speaker 5: payroll number and the employment level number is because the
Speaker 5: household survey kepture his gig employment and gig workers have
Speaker 5: been losing jobs the last few months or shifting from
Speaker 5: gigwork into payroll work. So there does seem to be
Speaker 5: a shift happening where workers are prioritizing security increasingly over flexibility.
Speaker 2: All right, we're gonna leave it on that note, Julia,
Speaker 2: Thank you so much. Julia Pollack, she's chief economist ever
Speaker 2: at zip recruiter on Zoom from Los Angeles, breaking down
Speaker 2: what they are seeing on their platform and how it
Speaker 2: kind of meshes with what we're seeing in the monthly
Speaker 2: jobs report. You seem worked out.
Speaker 3: I well, no, I feel like I've found an answer. Essentially.
Speaker 3: I was worried about the discrepancy all day, or I
Speaker 3: was thinking about it and talking about it all day.
Speaker 3: But I think Julie's explanation is great that before turn
Speaker 3: a downturn, for example, the household survey is more sensitive
Speaker 3: and shows you what's happening. It kind of shines the
Speaker 3: light in the right direction.
Speaker 2: You have to kind of look at the cycles and
Speaker 2: kind of where we are.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 2: I saw this Mattic interesting story. It was about cran
Speaker 2: based Global, which is the largest used digital asset exchange,
Speaker 2: saying the intersection of AI, artificial intelligence and crypto represents
Speaker 2: an important opportunity for entrepreneurs, including helping to prevent some
Speaker 2: of the excesses cited by critics of the technology. That
Speaker 2: to me is interesting.
Speaker 4: Yeah.
Speaker 3: No, I think it's absolutely fascinating. The intersection between blockchain
Speaker 3: technology or distributed letter of technology and artificial intelligence is
Speaker 3: something that we focus on on Bloomberg Crypto, which is
Speaker 3: every Tuesday at one pm on Bloomberg Television.
Speaker 2: Shameless problem. Yeah, but all right, so let's get into
Speaker 2: it with our guests. Jack o'holleran is co founder and
Speaker 2: ceof Scale Labs. He joins us on Zoom from San Francisco.
Speaker 2: Jack also co founder of Actana I hope I'm saying
Speaker 2: it correctly, co founder of incent a Line, and has
Speaker 2: held some executive positions at companies like Good Technology, and Motorola.
Speaker 3: Jack.
Speaker 2: Nice to have you here talk to us about blockchain
Speaker 2: and AI. What's the potential?
Speaker 6: Yeah, pleasure to be here today. So I think we're
Speaker 6: at the very early stages of what will be perhaps
Speaker 6: the most transformational technology movement of the last twenty years.
Speaker 6: We're already seeing impact today and I think, you know,
Speaker 6: we're still in the early days.
Speaker 2: Well, what do you mean specifically that's big and broad.
Speaker 6: Yeah, yeah, So diving in a little deeper, I think
Speaker 6: the headlines are always about this amazing intersection where we
Speaker 6: have artificially intelligent bots that are making purchase decisions for us,
Speaker 6: that are managing our wallets, that are you know, this
Speaker 6: fully connected AI and blockchain ecosystem. But today what's happening
Speaker 6: is the first immediate impact is that applications are actually
Speaker 6: being developed Web three applications in particular, at an alarmingly
Speaker 6: fast rate with the help of AI. So it's actually
Speaker 6: AI is playing a role in blockchain development at the
Speaker 6: application level, at the infrastructure level, at the QA level.
Speaker 6: So blockchain devs are using AI to build applications faster.
Speaker 6: So we're probably my sense of what I'm seeing is
Speaker 6: we'll have at least a ten x growth and applications
Speaker 6: built in the web three space thanks to the support
Speaker 6: and help of AI. So that's the first piece and
Speaker 6: happy to kind of go into the other pieces as well.
Speaker 4: Well.
Speaker 3: I just wonder, you know, who's using these applications because
Speaker 3: I was looking, for example, recently at the Solana phone
Speaker 3: and it's got all of these you know, decentralized apps
Speaker 3: on it. But I just don't know what I would
Speaker 3: do with all this stuff. It's like, we have this
Speaker 3: technology looking for a problem to solve. I get what
Speaker 3: you can do with with cryptocurrency, and I love the
Speaker 3: idea of trustless decentralized currency, but I just don't understand,
Speaker 3: you know, who's using the applications the other applications that
Speaker 3: we put on the blockchain yet.
Speaker 6: Yeah, and you know what you're calling out the That
Speaker 6: is the elephant in room. That is the problem that
Speaker 6: we at Scale are working on solving every single day.
Speaker 6: And for example, I worked in mobile back in two
Speaker 6: thousand and five, six seven, two thousand and eight, and
Speaker 6: I have to tell you the amount of applications utilized
Speaker 6: was just you know, sparse, no one. The device speeds
Speaker 6: were horrible, the UX was horrible, the battery, live, the
Speaker 6: compute power. All of a sudden in twenty ten, millions
Speaker 6: of people simultaneously playing each other in games across the
Speaker 6: world unmobile, And we're at one of those moments, I
Speaker 6: believe in Web three where right now there's there's some
Speaker 6: phenomenal use cases out there, but the UX is horrible,
Speaker 6: the transaction costs are high, the access points and accessibility
Speaker 6: you have to be an engineer to use a lot
Speaker 6: of these applications, and so within the Ethereum ecosystem in particular,
Speaker 6: there's just been some I think some amazing pushes on
Speaker 6: the UX level. They're going to make these apps easier
Speaker 6: to use because to your point, we are not seeing
Speaker 6: the actual throughput in users and and it's in large
Speaker 6: part the similar gating issue we had in mobile.
Speaker 3: By the way, talk to us for a moment about scale,
Speaker 3: because what you guys are doing is addressing a real
Speaker 3: problem in the Theorium ecosystem, which is gas fees that
Speaker 3: are out of control.
Speaker 6: Right, yeah, exactly, And I think it kind of like
Speaker 6: it goes back to your point earlier, where if you
Speaker 6: build applications with really cool use cases, but they're incredibly
Speaker 6: cumbersome to use, they're incredibly expensive to use.
Speaker 4: Who's going to use them?
Speaker 6: Well, the answer is the same people that use out
Speaker 6: Web three apps today and it's probably like ten thousand developers.
Speaker 6: And so Scales set out to build a it's almost
Speaker 6: a Web two like business model where application developers are
Speaker 6: able to pay in advance for the gas fees and
Speaker 6: then take the burden off the end user for the fees.
Speaker 6: It also creates better unit economics and also creates for
Speaker 6: you know, faster processing, faster blockchain execution. So our goal
Speaker 6: at the end of the day is to open up
Speaker 6: Web three to normal users and help application developers actually
Speaker 6: fulfill these big promises and hype that we've been reading about.
Speaker 2: So is it all developers that are using that are
Speaker 2: on scale at this point? Who who is using it
Speaker 2: and who's on it?
Speaker 6: So the largest use case, which is probably not a
Speaker 6: surprise to people in terms of actual end users, are games.
Speaker 6: So game are a phenomenal early use case for any technology.
Speaker 6: I mentioned earlier mobile and you know, the first you know,
Speaker 6: you know, and I worked at Good Technology and we
Speaker 6: had ninety two of the top one hundred Fortune one
Speaker 6: hundred companies as customers. And you know what the only
Speaker 6: application anyone even used was email, and everyone remembers those days.
Speaker 6: But we're going through a similar thing here in blockchain,
Speaker 6: where games are the leading frontier because it makes a
Speaker 6: lot of sense and they can operate on the back end.
Speaker 6: It fits the profile and the social demographics of the users.
Speaker 6: And the next phase from I believe my view is
Speaker 6: our web three social applications that are disrupting this whole
Speaker 6: creator economy space and content space, and we're just seeing
Speaker 6: a lot of growth there as well. But the developers
Speaker 6: utilize scale to your question, to create applications and to
Speaker 6: run applications faster. But at the end of the day,
Speaker 6: we all want to service the end user.
Speaker 4: It's funny.
Speaker 3: I don't know, Jack, if you're familiar with the Bloomberg terminal,
Speaker 3: but you can do so much it's mine boggling what
Speaker 3: you can do with this terminal. And the most used function,
Speaker 3: of course is message. Like email is the killer app here.
Speaker 4: Let's talk.
Speaker 3: Let's get back to AI for a minute, because I
Speaker 3: think it's really interesting that we see open AI doing
Speaker 3: well and there's clearly going to be a battle between
Speaker 3: the biggest players to see whose.
Speaker 4: Model can learn the most.
Speaker 3: And but you are looking forward to a decentralized AI model,
Speaker 3: and I wonder if that somehow takes the danger out
Speaker 3: of it.
Speaker 4: You know.
Speaker 3: Alex Karp from Pallenteer the other day said, man, the
Speaker 3: products we make are so powerful, I don't even know
Speaker 3: if we should be selling.
Speaker 4: Them, which I thought was pretty interesting.
Speaker 3: Is a decentralized AI going to solve a lot of
Speaker 3: those issues?
Speaker 6: You know it is, But my personal feeling is that
Speaker 6: we're going to see the actual trustless decentralization come later,
Speaker 6: and the first piece will be, you know, seeing Web
Speaker 6: three applications where we actually have the power and benefits
Speaker 6: of AI and terms of automation and help and writing
Speaker 6: and recommendations and conversation, connecting with you know, NFT gating
Speaker 6: and in programmable currencies and smart contracts, and then you know,
Speaker 6: eventually we're going to get to this point where people
Speaker 6: are saying, hey, well, why are we again trusting the
Speaker 6: world's three largest companies to essentially make ninety percent of
Speaker 6: the decisions that are made on the Internet. And that's
Speaker 6: when you're going to start seeing those models start living
Speaker 6: in a more open source, transparent, trustless manner and seeing
Speaker 6: that that kind of like ultimate nirvana blockchain and AI synergy.
Speaker 6: But it's still always often rightly.
Speaker 2: You know, I'm thinking of people me who are listening
Speaker 2: and just you know, normal people, regular people who maybe
Speaker 2: aren't as meshed in this world or the you know,
Speaker 2: blockchain world. So how does it, you know, practically impact
Speaker 2: us potentially the stuff that you're talking about the integration
Speaker 2: of AI and blockchain.
Speaker 6: Yeah, so let's look at it. I think a good
Speaker 6: use case. Let's look at music for example. So let's
Speaker 6: say there's a decentralized music platform and right now, artists
Speaker 6: that put music on iTunes or Spotify get a very
Speaker 6: low fraction of return and there's lots of you know,
Speaker 6: middleman hands in the way. There are these decentralized music
Speaker 6: platforms that are popping up where actually artists directly submit music.
Speaker 6: People pay in still small increments, but instead of ten
Speaker 6: percent of their payment going to artists, ninety some percent
Speaker 6: is going and the other piece is going to the community.
Speaker 6: Well that's a cool Web three application. But the way
Speaker 6: I AI would intersect is all of a sudden, you're
Speaker 6: getting conversational input in terms of you know, what you
Speaker 6: should listen to, how you should listen to, artists are
Speaker 6: creating music faster, better, more specific, more tailored to certain audiences.
Speaker 6: And ai is is really a creation tool, and so
Speaker 6: you're going to see you know, both artists and and
Speaker 6: it's a creation and creation tool. So you're gonna start
Speaker 6: seeing the kind of I guess symphony of these end
Speaker 6: results come together where people are going to start. You know,
Speaker 6: we're gonna start creating more things, faster and more and
Speaker 6: for more specific audiences and with programmable money without less middleman.
Speaker 4: That's that's one example.
Speaker 6: Of where you know, and hopefully you don't need an
Speaker 6: engineering degree to use that application, which is where we
Speaker 6: need to.
Speaker 4: Get to go today.
Speaker 3: I was coming to work and I was asked Apple
Speaker 3: Music to play me a radio station that was centered
Speaker 3: around Black Sabbath. So I wanted to hear stuff that
Speaker 3: wasn't Black Sabbaths. I've heard all of it a million times,
Speaker 3: but like Black Sabbath. And then I realized that Apple
Speaker 3: Music is just selling me with this radio station what
Speaker 3: it wants me to hear that's like Black Sabbath. So
Speaker 3: I've had something decentralized. I could hear true Black Sabbath
Speaker 3: esque metal.
Speaker 6: Yeah, And and you look at all the drama. And
Speaker 6: you know our Twitter feeds and our social feeds, and
Speaker 6: who's in control of those algorithms. Well, eventually those are
Speaker 6: going to be all large language model algorithms that are
Speaker 6: super smart and intelligent. But you know who's in control,
Speaker 6: who's managing my political view? You know, get what you
Speaker 6: will to and yeah, we.
Speaker 2: Got to run. Jack, Thank you so much of a
Speaker 2: great weekend. Jack o'holler and co founder CEO of Scale Lab.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 2: All right, everybody, if you're feeling sluggish at work, unmotivated, overworked,
Speaker 2: and with no real work life balance, enter the Ketamine Retreat.
Speaker 2: Gating popularity among those ambitious professionals who want to show
Speaker 2: up both for themselves and their families. This story online
Speaker 2: at Bloomberg dot com, Slash BusinessWeek, and of course, on
Speaker 2: the Bloomberg terminal. Bloomberg News startup supporter Ellen Hewitt row.
Speaker 2: It wrote it, excuse me on zoom from San Francisco
Speaker 2: Theater at Bloomberg businesswektil Weber here in our Bloomberg Interactive
Speaker 2: Broker studio. Okay, I want to know the pitch here.
Speaker 2: Come to you and say what you know?
Speaker 7: Sometimes you just don't know.
Speaker 8: Uh.
Speaker 7: Brilliance comes from.
Speaker 2: When I take you to a retreat.
Speaker 7: Yeah, brilliance come from many places. It started with, Hey,
Speaker 7: BusinessWeek is going to do a camp package special, uh
Speaker 7: thing that we're going to do. What do you want
Speaker 7: to contribute? And then Ellen was like, Hey, this ketamine thing.
Speaker 7: Camp Ketamine is a thing. So so Ellen, why don't
Speaker 7: you tell us a little bit more about ketamine and
Speaker 7: what this looks like.
Speaker 5: Yeah.
Speaker 8: I had been writing different stories last year about ketamine
Speaker 8: and that was the first time I when I was interviewing,
Speaker 8: you know, kedemine experts, that was the first time I
Speaker 8: heard someone mentioned the term meditation, which is a mix
Speaker 8: of portmanteau, if you will, of ketamine and meditation. And
Speaker 8: it was the first my ears perked up. I was like,
Speaker 8: I have to write a story about this. And so
Speaker 8: basically it's you know, ketamine has been an anesthetics since
Speaker 8: the sixties, in the nineties, and more recently it's been
Speaker 8: you know, snorted as a party drug, and then in
Speaker 8: the last decade it's been more and more frequently prescribed
Speaker 8: for depression and anxiety. But now we have people because
Speaker 8: it's kind of the first legal psychedelic, people are using
Speaker 8: it for peak performance and it's becoming more and more.
Speaker 4: So it's legal. I wasn't aware of that.
Speaker 3: You know, I'm a child of the nineties, so I
Speaker 3: hung around the limelight a lot, and I may or
Speaker 3: may not.
Speaker 7: Have this is where all the good stuff comes up
Speaker 7: of ketamine.
Speaker 4: But I didn't know it was legal. So this is
Speaker 4: something that you're allowed to do.
Speaker 8: It's legal with a prescription, so it needs to be
Speaker 8: you know, administered by a doctor or with a prescription,
Speaker 8: so it's it's legal in some senses. But and some
Speaker 8: people also don't consider it a true psychedelic. But largely speaking,
Speaker 8: you can see ketamine as the first legal psychedelic. It's
Speaker 8: something that people see as having a role in the
Speaker 8: psychedelic revolution that is currently accessible pretty easily in the US,
Speaker 8: you know, in a legal way. So you know, maybe
Speaker 8: you would have wanted to try ayahuasca for better understanding
Speaker 8: yourself and peak performance and all that. But like, look,
Speaker 8: it's complicated to do ayahuasca. You either have to go
Speaker 8: out of the country or find a place that's a
Speaker 8: little under the radar, and it's messy. I don't know.
Speaker 7: You might not come back when you drop acid, you know.
Speaker 7: But acid was the thing, it was, right Ellen.
Speaker 3: Acid was the thing for the San Francisco tech CEOs
Speaker 3: to be microdosing back in the day.
Speaker 4: Now they're doing special k This.
Speaker 8: Is kind of the new microdosing. It's because it's it's
Speaker 8: a little bit more legal. It doesn't last as long.
Speaker 8: Acid takes hours, you know, sometimes twelve hours. Keta means
Speaker 8: over in one hour, maybe even forty five minutes. You
Speaker 8: have these visions on these experiences of kind of going
Speaker 8: deep inside yourself, feeling clarity, feeling focused. Obviously there are
Speaker 8: some risks as well, but people say that it really
Speaker 8: gives them this jolt of neuroplasticity. That's what everyone is
Speaker 8: kind of looking for these days. That's what psilocybin promises,
Speaker 8: that's what some of these other psychedelics promise. But keta
Speaker 8: means the one available now.
Speaker 4: So take me on a retreat.
Speaker 2: What happens meditation, right, take you.
Speaker 8: To a caditation. So I went and observed one. It
Speaker 8: was in Santa Cruz. It was in a private home,
Speaker 8: and there was a group of seven women and eight
Speaker 8: so seven women, one man, and a facilitator and an
Speaker 8: osteopathic doctor. And they gathered in this Sunday afternoon. They
Speaker 8: gathered this beautiful sunny room. Everyone lay down on their
Speaker 8: little blanket with an eyemask and pillows, and the doctor
Speaker 8: goes around and injects your arm with one hundred milligrams
Speaker 8: of ketamine. And then honestly, you trip for like an hour,
Speaker 8: and they play soothing music and most people are quiet,
Speaker 8: and I just kind of sat there with my notebook
Speaker 8: and watched. And then afterwards people talked about the things
Speaker 8: that they saw, visions, experiences that they had. And then
Speaker 8: you know, if you talk to executive coaches who are
Speaker 8: now recommending that some of their clients try this, they
Speaker 8: say that, you know, sure, the experience can be meaningful,
Speaker 8: but even beyond that, it's a couple of days afterward
Speaker 8: in which you have this extra neuroplasticity in which you
Speaker 8: might be able to build new habits or see things
Speaker 8: a different way.
Speaker 7: What kind of prompts are they giving you on the
Speaker 7: on the meditation, on the meditation.
Speaker 4: During and afterward.
Speaker 8: So during it it's largely quiet, but they have you
Speaker 8: set intentions ahead of time. So most of these were
Speaker 8: mid career professionals. There was a chemist, there was a
Speaker 8: nonprofit director, a midwife, a pilot. You know, these were
Speaker 8: people who just wanted to better have a better understanding
Speaker 8: of their work life balance what you know, their professional
Speaker 8: life meant to them, how to balance this with their family.
Speaker 8: They had intentions like, you know, having better clarity on
Speaker 8: what's important to them, having better self compassion, being able
Speaker 8: to communicate more directly as to what they want. And
Speaker 8: then yeah, the prompts are to kind of go inside yourself,
Speaker 8: to let go, to kind of surrender to the experience,
Speaker 8: because you know, it feels like it just feels like
Speaker 8: your body is sort of floating away as people are
Speaker 8: closing their eyes and having thoughts, and it's a dissociative,
Speaker 8: so you end up feeling like you don't have a body.
Speaker 8: And a lot of people described feeling like a little
Speaker 8: Adam or a spec buzzing through their brain or through
Speaker 8: the universe, or being a part of a school of fish. This,
Speaker 8: you know, a small part of a larger hole. A
Speaker 8: lot of people compared it to Avatar.
Speaker 7: Yeah, how often do customers come back for more meditation?
Speaker 8: So these are being pitched as kind of a one off.
Speaker 8: And I also talk to people who do group meditations
Speaker 8: with their leadership team. I talked to a startup founder
Speaker 8: who has brought in, you know, doctors to oversee group
Speaker 8: meditations with his leadership team of four or five people.
Speaker 8: So sometimes people are doing it together. Often they're doing
Speaker 8: it alone for their own self reflection.
Speaker 7: I want to caditate, but maybe not with my boss.
Speaker 2: That's just.
Speaker 4: Well if your bosses.
Speaker 3: If your boss is running Doctor Bronner's Magic Soap, I
Speaker 3: think you can.
Speaker 4: Yeah, those guys are definitely on acid. Listen.
Speaker 3: I have a listener Ellen writing in and you are
Speaker 3: fantastic reporter. I've read a number of your stories. But
Speaker 3: this Bloomberg client is wondering, why on earth did you
Speaker 3: not do it yourself?
Speaker 2: I mean, isn't that I believe that's Matt wondering. But
Speaker 2: go Alan, we just have a beout that I will say.
Speaker 8: I asked, and I was I was recommended that that
Speaker 8: would not be appropriate. So look I talked to a
Speaker 8: lot of people who did the experience. I feel like
Speaker 8: I have a good sense of what it's like. I
Speaker 8: think next time I'll have this reader try to ask
Speaker 8: Bloomberg Standards if they can, if they can get me
Speaker 8: to expense.
Speaker 2: That'll be part two. That'll be part two. Really fascinating
Speaker 2: and interesting and a lot of observations by the people
Speaker 2: who did it. So I highly recommend everybody head to
Speaker 2: the Bloomberg or check it out at Bloomberg dot com,
Speaker 2: slash BusinessWeek. Ellen hewittt thank you have a great weekend.
Speaker 2: Start ups reporter at Bloomberg News on Zoom from San Francisco,
Speaker 2: and our thanks to Jill Weber, editor of Bloomberg Business Week.
Speaker 2: Ready for a caditation, Jill, no come, no coming coming, Matt,
Speaker 2: never again, never again. This is Bloomberg.
Speaker 1: Brom Journal.
Speaker 3: How about you let me drive?
Speaker 4: Oh no, no, no, no, who's gone to drive?
Speaker 3: Honey?
Speaker 4: Please?
Speaker 2: I'll Gravelt's wait, I want to drive.
Speaker 3: It's a question that try.
Speaker 4: This is the drive to the Clothes dot com.
Speaker 1: Pick well, bry around on Bluebirg Radio.
Speaker 2: All right, everybody, just about eighteen minutes, seventeen minutes or
Speaker 2: so until the closing bell rings on Wall Street. We
Speaker 2: are all so ready to get this over, time for
Speaker 2: the drive to the clothes.
Speaker 4: Really, you're just done with this week?
Speaker 6: Huh?
Speaker 4: I am? Aren't you with you? I'm with you.
Speaker 2: I'm kind of like done.
Speaker 4: It was an exciting day, though.
Speaker 2: It was an exciting day, and I think our next
Speaker 2: guest is kind of done with this week too. We
Speaker 2: welcome back Brendo O'Connor wannas. She is Senior VP and
Speaker 2: financial advisor at EBS Global Wealth Management, back in our
Speaker 2: Bloomberg Interactive Brokers studio. It is really great to have
Speaker 2: you back. We kidd it because you were never talking
Speaker 2: before we got going. But it's been kind of another
Speaker 2: pack week. For just four days of trading, ratlely makes
Speaker 2: sense to you. I mean we certainly have seen it
Speaker 2: broadened out in a big way.
Speaker 9: Right, So, I mean, look at these jobs numbers. I
Speaker 9: don't think anyone was expecting something with a three handle,
Speaker 9: so you know, the markets were certainly surprised. But look
Speaker 9: at what the markets did, right. It wasn't concerned with
Speaker 9: that headline number, nor was it as concerned with the
Speaker 9: ten million openings from the earlier this week. It was
Speaker 9: all the numbers that are nuanced under the hood. So
Speaker 9: you know, wage growth, the unemployment number went up to
Speaker 9: three point seven, you have fewer people quitting. I also
Speaker 9: look at the fact that you know, not too long ago,
Speaker 9: there were two job openings for every unemployed American. That's
Speaker 9: come down to one point six. So I think the
Speaker 9: market is really paying attention to those nuanced numbers.
Speaker 2: I would also say this, the nuances matter exactly.
Speaker 9: Here's the other thing, though, the Fed has done an
Speaker 9: incredibly good job in prepping the market this week. They
Speaker 9: have really informed draw the market in a way to
Speaker 9: let them know that June is going to be paused.
Speaker 9: And so I think investors looking at today's payrolls numbers
Speaker 9: were less interested in knowing what the June guidance was
Speaker 9: going to because the FED did its own communicating.
Speaker 4: So the CPI number doesn't matter as much.
Speaker 2: Yeah, so help us understand this, because if your data dependent,
Speaker 2: I would.
Speaker 9: Think something like that would matter to the FED. Right, Okay,
Speaker 9: so let's take a step back and look at the FED.
Speaker 9: You know, it wasn't that long ago that the market
Speaker 9: was pricing in a pause in June and four rate
Speaker 9: cuts into the back half of the year. I think
Speaker 9: that scenario has been wiped off the board. I think,
Speaker 9: really realistically, we're going to look at a pause in June,
Speaker 9: a hike.
Speaker 2: The market pricing, and I think some cuts still.
Speaker 9: Yeah, and maybe one hike. I think if we're lucky
Speaker 9: to at the end of the year. And again it's
Speaker 9: it's all the other data. You know, you have a
Speaker 9: PC annualizing at five percent, you have personal spending up,
Speaker 9: you have housings starting to stabilize. So I think the
Speaker 9: bottom line here is that the calculus for the FED
Speaker 9: is not as clear as it was, you know, two three,
Speaker 9: five weeks ago. I think that you know that's for
Speaker 9: us anyways, is supporting our positioning of more conservative fixed
Speaker 9: income over equities.
Speaker 2: You wouldn't buy into this rally.
Speaker 9: I wouldn't buy into this rally. And I think that
Speaker 9: there are certain things that you can do on the periphery,
Speaker 9: you know, look at what tech is doing, Look at
Speaker 9: what the Nasdaq has done twenty seven percent this year.
Speaker 9: I think that tactically you could kind of rewait that,
Speaker 9: take some cash off the table, move into more value
Speaker 9: oriented parts of the of the tech market. But with
Speaker 9: my marginal dollar, I wouldn't be going into US equities.
Speaker 9: I may look at non US equities, but not US equities.
Speaker 3: So let me just quickly ask about the market pricing
Speaker 3: of hikes and cuts because we rely so much on
Speaker 3: the World interst Rate Probability screen on the Bloomberg terminal,
Speaker 3: which shows what swaps traders are doing. But you don't
Speaker 3: really believe that the FED is going to cut twice
Speaker 3: by the year end.
Speaker 4: That's what That's what the screen shows me.
Speaker 9: Yeah, I mean for us, we think that there's probably
Speaker 9: one hike towards the end of the year.
Speaker 4: I obviously hike.
Speaker 9: I'm one cut. Sorry, my filly is one cut towards
Speaker 9: the end of the year. I think that you just
Speaker 9: have to I think the market's trying to be hopeful,
Speaker 9: you know. I think the.
Speaker 3: Market we have to be in a pretty bad place
Speaker 3: for Jerome Powell to cut rates. I mean, this is
Speaker 3: a guy who seems fixated on not repeating the Arthur
Speaker 3: Burns mistakes, who wants to be kind of the new
Speaker 3: Paul Volker. If he has to cut rates, that means
Speaker 3: something big has broken in an irreparable maybe way.
Speaker 9: Right, But look at the other dad, like GDPs that
Speaker 9: one percent. We are not that far away from having
Speaker 9: a really soft economy where you're at flat or slightly
Speaker 9: negative numbers. So I don't think that that's far away.
Speaker 9: But I do think that the market is grappling and
Speaker 9: trying to hold onto this narrative where the market will
Speaker 9: heat up as inflation cools, and we just have not
Speaker 9: seen that yet.
Speaker 2: So Brenda, what do you see you when it comes
Speaker 2: to earnings and earnings projections? Because I feel like when
Speaker 2: it comes down to it, we could, you know, debate
Speaker 2: Fed policy forever and ever and ever, and ultimately the
Speaker 2: Fed's going to do what it's going to do. But
Speaker 2: when you look get what companies are saying coming off
Speaker 2: of the earning season and what we're expecting for earnings,
Speaker 2: that's real stuff that we can potentially grab onto.
Speaker 9: Right and you know, no one expected this earning season
Speaker 9: to be as strong as it was. I think going forward,
Speaker 9: what we're looking towards is the fact that you know
Speaker 9: that tightening lending standards is going to work its way
Speaker 9: through the earnings. So we think that in terms of EPs,
Speaker 9: we're going to come in at two ten towards the
Speaker 9: end of the year. Our core scenario is still thirty
Speaker 9: eight hundred on the SMP, which is really far from
Speaker 9: where we are, especially on today.
Speaker 2: So well, what do you make of us? We went
Speaker 2: what below forty two? Then we're back up above it.
Speaker 2: We're what almost matt twenty percent off that mid October
Speaker 2: twenty twenty two low, so above it? Yeah, I mean,
Speaker 2: forgive me twenty percent above it? So significant? Yeah.
Speaker 9: I mean our ambitious scenario on the SMP based on
Speaker 9: our UBS data is forty four hundred. We're basically there.
Speaker 9: So I think this is a really stretch market. You
Speaker 9: have eighteen point three times forward pees on the SMP.
Speaker 9: Do not see that those kinds of valuations unless you
Speaker 9: are expecting aggressive growth or a two year under two percent,
Speaker 9: And frankly, we're just not there.
Speaker 3: I look at I look at Bloomberg Intelligence to see
Speaker 3: consensus for earnings, and we had we were off three
Speaker 3: percent for the S and P in Q one, which
Speaker 3: isn't so bad as you as you point out, we
Speaker 3: are looking for a drop of eight percent in Q two,
Speaker 3: which is going to be a little bit more harsh
Speaker 3: for this kind of market to deal with, especially at
Speaker 3: these highs. I mean, we're almost back to the August
Speaker 3: twenty twenty two.
Speaker 9: High right, and again that's reflected in what our EPs
Speaker 9: target is towards the end of the year. So whether
Speaker 9: I don't think what we're seeing in the green on
Speaker 9: the screen today is again necessarily the narrative that we
Speaker 9: can extend out to the back half of the year.
Speaker 9: Look SMP's at ten, we have eleven. You know, Nazak
Speaker 9: is at twenty seven. I just have a really difficult
Speaker 9: time transporting this incredibly bullish narrative into the back half
Speaker 9: of the year.
Speaker 2: You're definitely not alone in it. There are a lot
Speaker 2: of people skeptical of what's going on here. Brenda, thank
Speaker 2: you so much. Thank you really appreciate. Brenda O'Connor wantas
Speaker 2: a senior vice president and financial advisor at UBS Global
Speaker 2: Wealth Management. Back here in our Bloomberg Interactive Brokers studio
Speaker 2: and Matt, we've just got what about eleven minutes to
Speaker 2: go here, but we're holding onto our highs of this session,
Speaker 2: so you know, any and I doubt that we're going
Speaker 2: to see any kind of selling as we go into
Speaker 2: the clothes.
Speaker 3: Pretty fascinating because you would think that people would want
Speaker 3: to take some profits off the table due to the weekend.
Speaker 4: But I think I think Brenda's point is right. The
Speaker 4: BED has guided so.
Speaker 3: Well that nobody is worried and they're ready to hold
Speaker 3: at risk assets into Saturday.
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