Speaker 1: This is Bloomberg Business Week. I'm Carole Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanovk. We're here every day bringing
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Speaker 1: You can also listen to our radio show at two
Speaker 1: pm Eastern Time on Bloomberg Radio or watch us on
Speaker 1: YouTube search Bloomberg Global News. A couple of headlines when
Speaker 1: it comes to COVID J and J leading or should say,
Speaker 1: seeking US backing for booster dose if it's one shot
Speaker 1: vaccine after data showed it provided strong protection. We've got
Speaker 1: that going on. We have JP Morgan Chase banning business
Speaker 1: travel and in person meetings for unvaccinated staff. So, as
Speaker 1: always Tim, there is a lot going up. The sticks work,
Speaker 1: do the carrots work, that's the question, or a combination
Speaker 1: of both. Let's see though what our next leader has
Speaker 1: to say. You might recall we recently talked about billionaire
Speaker 1: investor Leon Cooperman making a hundred theion dollar donation to St.
Speaker 1: Barnabas Medical Center and Livingston, New Jersey, the largest gift
Speaker 1: to a hospital in the state. Well, Barry Ostrowski is
Speaker 1: presidency you at r w J. Barnabas Health and so
Speaker 1: the recipient of that donation his organization. He's on the
Speaker 1: phone in Livingston, New Jersey. Barry, nice to have you
Speaker 1: here on Bloomberg Radio. How are you. I'm great pleasure
Speaker 1: to be here and I thank you for the invitation. Well,
Speaker 1: it's great to have you here. First of all, we
Speaker 1: do want to talk about the donation. But you know,
Speaker 1: front and center, you guys have been dealing with COVID,
Speaker 1: like any healthcare institution. How are things going well? They
Speaker 1: seemed to level off. You know, we really evaluate what's
Speaker 1: happening by based on how many people need to be
Speaker 1: admitted to our hospitals. At the height of the pandemic,
Speaker 1: we had eighteen hundred in patients throughout our system. We're
Speaker 1: now down to about a hundred and sixty, although we
Speaker 1: were down far lower eight weeks ago. But most of
Speaker 1: those people, while six don't require ventilator care and are
Speaker 1: not in our I c use, and I must say
Speaker 1: that plus percent of them were unvaccinated, so I think
Speaker 1: we've seen the inpatient level off. We continue to get,
Speaker 1: of course, folks who convert to infection being treated with
Speaker 1: monoclonal antibodies, or frankly with weak cases just staying home. UH.
Speaker 1: And we are, of course insisting that all of our
Speaker 1: employees are vaccinated. We were the first in New Jersey
Speaker 1: to announce that requirement. UH. And I'm delighted and gratified
Speaker 1: that we're well over of our employees vaccinated. Now there's
Speaker 1: another two weeks in the in the duration of the
Speaker 1: required time UH and I think we'll be in pretty
Speaker 1: good shape at that point. What happens if you don't
Speaker 1: for the folks who for that three percent or the
Speaker 1: last percentage of folks you vaccinated, I'm sorry. Yeah, Unfortunately,
Speaker 1: they will have to be separated from the organization. I
Speaker 1: don't expect it to be a big number. And frankly,
Speaker 1: in today's world, losing anybody is a burden. UH. And
Speaker 1: I must say, well, we disagree perhaps with their policy
Speaker 1: on vaccination UH and their personal choice on that. These
Speaker 1: are people who have sacrificed UH in order to provide
Speaker 1: care to our employees at every level, of our patients,
Speaker 1: at every level of our organization. So it's it's really
Speaker 1: an unfortunate set of circumstances, but we do need for
Speaker 1: the safety of everyone folks to be vaccinate. Hey, Verry,
Speaker 1: I want to talk a little bit about planning because
Speaker 1: as president and CEO of our w J. Barnabas Health,
Speaker 1: I mean, this is something that you have to be
Speaker 1: thinking about anticipating what happens this quarter, what happens in
Speaker 1: two How do you plan for a capacity when it
Speaker 1: comes to COVID? I mean, what are you thinking a
Speaker 1: realistic number of people who will be admitted is going
Speaker 1: to be are we getting Basically, it's another way of
Speaker 1: me asking if we're actually turning a corner on the pandemic. Well,
Speaker 1: I think we are, and it's a great question. I
Speaker 1: think right now in our sites is a concern about
Speaker 1: the period immediately after Thanksgiving. Uh, those are holiday events
Speaker 1: where on for ginerally we would expect people to become
Speaker 1: infected because of close proximity with many people, and so
Speaker 1: we may see that inpatient number tick up, but I
Speaker 1: don't think it's going to exceed the two mark in
Speaker 1: our view, perhaps a couple more than that across our system. UH.
Speaker 1: And again for us and for our other patients, the
Speaker 1: key is will we be able to operate by providing
Speaker 1: services to non COVID patients and the worst of it,
Speaker 1: we had to cretel or frankly stop those services. We
Speaker 1: don't see that happening again, at least, of course it's
Speaker 1: our fervent hope, but we really don't project that. So
Speaker 1: save that holiday period potential for slightly more folks in
Speaker 1: the in the institutions. I think we have reached the
Speaker 1: plateau and as you point out, perhaps turned the corners,
Speaker 1: so that certainly Q one of next year, I think
Speaker 1: we'll start to see those numbers come down, uh and
Speaker 1: get back to a more normal environment for our health
Speaker 1: care facilities. Keeping my fingers cross, because I've been nice
Speaker 1: to be much more normal. Hey, listen, just got a
Speaker 1: couple of minutes left here, Barry Um. This donation from
Speaker 1: Leon Cooperman. Leon Cooperman obviously a very familiar uh individual
Speaker 1: to our Bloomberg audience. It's a big donation, a hundred
Speaker 1: million dollars from the Cooperman Family Foundation. What does that
Speaker 1: mean for your hospital and your organization. Well, well, of
Speaker 1: course it's unbelievable. We're gratified by it. I couldn't be happier.
Speaker 1: He's been a good friend for decades. I have to
Speaker 1: tell you. The money is important, no doubt about it.
Speaker 1: But the fact that he's endorsed our plan for the
Speaker 1: institution and our system in general, and he's reinforced our
Speaker 1: commitment to the mission and now through this gift we
Speaker 1: can accelerate that those mission objectives is very important to us.
Speaker 1: He's a thought leader, and I know you believe the
Speaker 1: same about him. Uh, And that being a thought leader
Speaker 1: in terms of its impact on others who might become donors.
Speaker 1: But his endorsement of who we are and what we
Speaker 1: do this way is just an incredible active philanthropy on
Speaker 1: his part, and for us reinforcement beyond anything we can
Speaker 1: we can really describe. How much do you rely on
Speaker 1: gifts like this in order to operate and also for
Speaker 1: capital expenditure for the hospital, Well, we rely on it because,
Speaker 1: of course, we we don't have the ability to raise
Speaker 1: equity in terms of sharehold share sales. We do use
Speaker 1: publicly traded debt. We recently raised some money there and
Speaker 1: we have a strong operating cash flow, but in order
Speaker 1: to address all the capital needs of the organization in
Speaker 1: a timely fashion, these gifts of philanthropy are critically important.
Speaker 1: Eventually we would be able to build a new facilities,
Speaker 1: attract the new clinicians, put in the new technology, but
Speaker 1: it would take much longer and frankly be more expensive
Speaker 1: by the time we got there. So philanthropy at any
Speaker 1: level donorship in general, enables us to accomplish that which
Speaker 1: we want to UH in unaccelerated fashion. Well, thank you
Speaker 1: so much for finding time for us, and it's really
Speaker 1: great to check in with you. UH and be well
Speaker 1: and safe to your entire team. Barriot Ostrowski his presidency
Speaker 1: at r w J Barnabas Health. On the phone from Livingston,
Speaker 1: New Jersey. This is Bloomberg Business Week with Carol Masser
Speaker 1: and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. So Tim,
Speaker 1: this is the top are most read on the Bloomberg.
Speaker 1: He talks about the FED under great greater scrutiny from
Speaker 1: both inside and outside its walls. That's following revelations about
Speaker 1: market trading by some senior officials that happened back in
Speaker 1: UH Senator Elizabeth Warren. We're gonna hear from her a
Speaker 1: little bit later on on this Yeah, she'll be live
Speaker 1: on Bloomberg Radio and television at four thirty five Wall
Speaker 1: Street time today, So in just a little while, Yeah, exactly,
Speaker 1: So let's get an update on the situation. Kind of
Speaker 1: set the stage. Bloomberg News Federal Reserve reporter Matt Bosler
Speaker 1: joins us right now on the phone in New York City. So, Matt,
Speaker 1: you know, there's a headline that talks about, you know,
Speaker 1: more scrutiny for the FED. Are they really under incredible pressure?
Speaker 1: And most importantly, is the FED chief really under pressure?
Speaker 1: And might his job be at risk? Yeah, it certainly
Speaker 1: seems that way, Carol. I mean, it's kind of hard
Speaker 1: to disentangle everything that's going on right now with these
Speaker 1: trading disclosures, from the ongoing question of what President Joe
Speaker 1: Biden is going to do in terms of the decision
Speaker 1: he has to make about whether to renominate Jerome Powell
Speaker 1: for another four years of fedhair and so um, certainly
Speaker 1: that is one of the main reasons why this continues
Speaker 1: to grab big headlines. Obviously, with someone like Senator Elizabeth
Speaker 1: Warren gunning for Powell, trying to prevent him from being renominated.
Speaker 1: She's really latching onto this um you know what's quickly
Speaker 1: becoming a widening scandal related to some of these trading
Speaker 1: activities that these beneficials were involved in last year. Well Man,
Speaker 1: help us understand the structure of the Federal Reserve and
Speaker 1: to what extent if you think about it, the FED
Speaker 1: chair Powell sits the top. And indeed, like with another organization,
Speaker 1: a company, perhaps uh the person to top the company
Speaker 1: would say, okay, yes, the buck does stop with me.
Speaker 1: I am responsible for the people who are below me,
Speaker 1: at least on an organizational chart. Is it Is it
Speaker 1: like that with with the Fed? In these officials it
Speaker 1: is um. You know. One interesting thing that we always
Speaker 1: talk about with the Federal Reserve in particular is that
Speaker 1: it has this kind of quasi public private structure where
Speaker 1: you've got the Board of Governors in Washington, d C.
Speaker 1: Which includes obviously FED Chair Jerome Powell and uh FED
Speaker 1: Vice Chair Richard Clarida, who is the latest to be
Speaker 1: drawn into all of these questions surrounding his trading. And
Speaker 1: then you've got the reserve banks around the country that
Speaker 1: are somewhat set apart from uh, you know, the DC
Speaker 1: operation and and that's of course where this whole story
Speaker 1: got started a couple of weeks ago, and so um,
Speaker 1: you know, it looked like uh Powell certainly had more
Speaker 1: deniability a couple of weeks ago when this really seemed
Speaker 1: to be an issue related to the Reserve Bank presidents,
Speaker 1: the former presidents of the Dallas and Boston Feds. Now,
Speaker 1: when you're talking about the vice chair whose office is
Speaker 1: down the hall from the FED share right, it makes
Speaker 1: it a little bit harder to um, perhaps distance yourself
Speaker 1: from that than it was before. This is the first
Speaker 1: time that this has been an issue with beneficials. Is
Speaker 1: certainly the first time I can remember, you know, in
Speaker 1: my time in the ten years that I've been covering this. Now.
Speaker 1: The one thing that people do uh like to recall
Speaker 1: lately with this story is, um, you know, what happened
Speaker 1: in I think it was two thousand nine, um, after
Speaker 1: the financial crisis, where you had a member of the
Speaker 1: Federal Reserve Bank of New York's board of directors who
Speaker 1: got a waiver to trade in Goldman sax stock during
Speaker 1: you know, in the fall out of the financial crisis,
Speaker 1: and um, you know, those boards of directors at the
Speaker 1: reserve banks aren't actually involved in policymaking, right, they don't
Speaker 1: attend the f C meetings, they're not, Um, they have
Speaker 1: no say in what the Fed does with policy. But
Speaker 1: even that situation was enough to um precipitate new rules
Speaker 1: around that kind of trading that you know, then made
Speaker 1: their way into the Dodd Frank legislation that was passed thereafter.
Speaker 1: And so um, certainly, you know the President would seem
Speaker 1: to suggest that there are going to be changes as
Speaker 1: a result of this whole thing. Yeah, I do feel
Speaker 1: like that there was a kind of untold rule of ethics. Um,
Speaker 1: when it comes to write to him, it just feels
Speaker 1: like you're at the FED could be very careful. Yeah,
Speaker 1: it's surprising this all came out at one time too,
Speaker 1: exactly right, It's not just one. It's been three cases
Speaker 1: now at this point. Matt, thank you so much for
Speaker 1: getting us up to speed. Bloomberg News Federal Reserve reporter,
Speaker 1: Matt Bosler, you're listening to Bloomberg Business Week with Carol
Speaker 1: Masser and Bloomberg Quick Takes Tim Stenovic on Bloomberg Radio.
Speaker 1: So this story also among our most right on the
Speaker 1: Bloomberg Today. It's in the upcoming issue of Bloomberg Business
Speaker 1: Week magazine out later this week. It's tim about Facebook,
Speaker 1: HP nev artists, a few other big corporations who are
Speaker 1: finding a very novel way to pressure outside council. Well.
Speaker 1: Joining us now to talk all about it is Ellen Milliken,
Speaker 1: legal reporter at Bloomberg News. She joins us on the
Speaker 1: phone now from London. Joel Weber is editor at Bloomberg
Speaker 1: Business Week. He's with us in the Bloomberg Interactive Broker studio. Joel. Uh,
Speaker 1: there is a problem when it comes to diversity at
Speaker 1: elite law firms. Maybe this is like the other Facebook story.
Speaker 1: There's this other one that's you know, clearly interesting, and
Speaker 1: this one is as well, but for different reasons. Uh. So,
Speaker 1: everybody knows corporate America or even bigger than America, global
Speaker 1: corporations have a ton of outside council. Uh. It tends
Speaker 1: to be fairly white and fairly male. And Facebook, uh,
Speaker 1: HP novartists um are among companies that are trying to
Speaker 1: put pressure on outside legal to diversify and have it
Speaker 1: have different types of lawyers representing them and working on
Speaker 1: their on their projects. And to do that, they're willing
Speaker 1: to maybe withhold some fees, which I think is a
Speaker 1: you know, if you want to get somebody's attention, like
Speaker 1: you know, withholding a paycheck will probably get them to
Speaker 1: listen up, Ellen, how's that working out well? These companies
Speaker 1: are definitely serious about this as well as withholding fees.
Speaker 1: They have said that they will redirect their work away
Speaker 1: from law funds you aren't up to scratch on their
Speaker 1: diversity and give the work to UM law funds which
Speaker 1: do have the adequate diversity. And their demands are quite high.
Speaker 1: FACEBOOK requires half of the lawyer to be diverse, and
Speaker 1: that's gender, race, UM, sextually urity and also disability as well.
Speaker 1: UM and nevatism HPO also asking for this and and
Speaker 1: there they are among quite a large Posit's actually increasing
Speaker 1: and law firms are taking this seriously. They have to
Speaker 1: write like their profits UM hang on their relationships with
Speaker 1: their clients and the works that they get UM and
Speaker 1: especially when it hurts the partnership level. They take an
Speaker 1: equity cut of the profits of the law fir profits teacher,
Speaker 1: so it could it eats into the balance sheets of
Speaker 1: the law firm. That eats into the into the pay
Speaker 1: that the partners takes the end of the year. Yeah.
Speaker 1: You point out in your piece that last year Facebook
Speaker 1: spent one point six billion dollars on legal fees, settlements
Speaker 1: and fines, and I got a feeling like that perhaps
Speaker 1: might go up after this week. Might be an opportunity here.
Speaker 1: Um So. So, there's a lot of companies that I mean,
Speaker 1: we we mentioned some big ones, but there has been
Speaker 1: an attempt to actually out this problem before. You mentioned
Speaker 1: in the story of hundred and seventy companies sent a
Speaker 1: open letter to law firms criticizing that lack of diversity.
Speaker 1: I'm curious did that Did that work though, or do
Speaker 1: they have to resort to, uh, you know, more painful methods. Yeah.
Speaker 1: So those companies who signed up have taken a less
Speaker 1: threatening approach than placement of artist and HP um there
Speaker 1: approaches more that we will slap your hand and we
Speaker 1: might redirect work, or or simply if they have ten
Speaker 1: law firms for examples, saying we can we can carry
Speaker 1: out this litigation or m and ada or whatever it is,
Speaker 1: they will pick the law firm with the best diversity.
Speaker 1: Um so. So, one one of the ducas instat your
Speaker 1: Anglo Americans said, it's more about encouraging law firms rather
Speaker 1: than set them. Um. But I think everyone recognizes in
Speaker 1: the data that not much has changed over the past
Speaker 1: five years. Partnership level still one in four partners of
Speaker 1: women across the US UK UM one in ten partners
Speaker 1: from an ethnic minority in the US. So people recognize
Speaker 1: that this is slow. Um, there are commitments in place,
Speaker 1: but I wouldn't be surprised if more companies follow with Facebook,
Speaker 1: Artist and HP if it's change doesn't have to do Yeah,
Speaker 1: And I find it interesting, as you say, the companies
Speaker 1: pushing change are they're not necessarily models of diversity. So
Speaker 1: to do as I say now as I do essentially,
Speaker 1: which to me is like there's anyone better. We're gonna
Speaker 1: hold your money because you need to be better and
Speaker 1: we're working on it. But you know, it's it's incredible.
Speaker 1: So as a result of this, though, however it may happen,
Speaker 1: is it bringing about changes in law firms global law firms. Yeah,
Speaker 1: so the data we've seen, that's change happening in the
Speaker 1: lower roungs of law firms, So trainees, new cohorts, and associates. Um.
Speaker 1: Actually the gender split in those junior lawyers of fifty
Speaker 1: fifty um and almost fourty centers on the associates that
Speaker 1: us um um, we're people of color last year. Um.
Speaker 1: But as I said before, it just dramatically drops when
Speaker 1: you get to partnership level. And that's a really crucial
Speaker 1: um essential data points because partners control the relationships with
Speaker 1: the clients, they get an equity cut, um, and they
Speaker 1: run the law firm. So um. It does take some
Speaker 1: homes decades for lawyers to be in a law firm
Speaker 1: before they get to into partnership level. But that's really
Speaker 1: the area where we haven't seen much moving over the
Speaker 1: five years plus, and that's really the area that law
Speaker 1: firms really need to start pushing and promoting more people
Speaker 1: have come color, more women into those more senior positions.
Speaker 1: What about the other end of the pipeline, law school
Speaker 1: and training, specifically, how law schools are doing with diversity
Speaker 1: and producing those lawyers who can then go and work
Speaker 1: at these firms. Yeah, so that's actually they're doing much better. Um.
Speaker 1: The pipeline of young lawyers that she kind of gives
Speaker 1: gives them hope to this whole situation. Um Um. The
Speaker 1: diversity among those new cohorts is so much better. Um.
Speaker 1: The unfortunate thing is that, um that before lawyer becomes
Speaker 1: client placings, they will actually get higher up the law firm.
Speaker 1: So even though a law firm might have good diverse
Speaker 1: representation as a whole, what these fans facebook of architics,
Speaker 1: We really care about the lawyers on their matters. So
Speaker 1: the more senior lawyers who have come into the office
Speaker 1: represent them and corps who helps them sign the M
Speaker 1: and a deal, that that's who they care about. That's
Speaker 1: who they want to see more diverse representation in. So
Speaker 1: I'm also just curious is that how do the US
Speaker 1: and the UK compare? And you have some numbers in
Speaker 1: the story, but it is one improving more than the other.
Speaker 1: Um in in you know what what kind of country
Speaker 1: dynamic is that play here? Yeah, so they're actually pretty
Speaker 1: and on gender split, as they said, it's fifty fifty
Speaker 1: across the base markets. Um, the US does do better
Speaker 1: on racial diversity. Um they have also the US has
Speaker 1: a big population of of black people for example, in
Speaker 1: the UK does Um, but um, it's it's pretty even
Speaker 1: across I think looks firm. You know, huge UK law
Speaker 1: firm will have quite a big presence in the US
Speaker 1: and vice versa, so I'm not surprised. And these companies
Speaker 1: are European based on the US based, and they have
Speaker 1: broaches all over the globe, so I'm not surprised that
Speaker 1: it's actually quite a similar picture across this Well, let's
Speaker 1: help us the pipelines improved. Maybe it will move all
Speaker 1: the way up the ladder. Hey, interesting story. Ellen Milligan,
Speaker 1: Legal reporter, Blomberg News, obviously joining us on the phone
Speaker 1: from London. There. Check out that story in the upcoming
Speaker 1: issue a Bloomberg Business Week, also online at Bloomberg dot com,
Speaker 1: Slash business Week and on the Bloomberg terminal, Chilweb or
Speaker 1: editor Bloomberg business Week. This is Bloomberg Business Week with
Speaker 1: Carol Masser and Bloomberg Quick Takes. Tim Stinovic on Bloomberg Radio.
Speaker 1: All Right, I just heard an interesting fact, toy. This
Speaker 1: is what I love about working with Tim because he's like, yeah,
Speaker 1: we talked with Kyle's Stock earlier about this story. He
Speaker 1: worked on this story for a long time, doing other
Speaker 1: things too, doing other things too, But this story is
Speaker 1: a long time in the making. It's all about Rivan
Speaker 1: Rivvy and it's the maker of electric vehicles. It's backed
Speaker 1: by Amazon dot Com and Ford. You know, it filed
Speaker 1: for an I p O. We got that news after
Speaker 1: the close on Friday. Let's bring in Kyle Stock. He's
Speaker 1: Bloomberg new senior correspondent. Uh, and he's on the phone
Speaker 1: in New Jersey. Nine months. It's a long time to
Speaker 1: work on a story. Sorry, he told me. I should
Speaker 1: have told you, Carol, He told me that off fair. Sorry.
Speaker 1: It wasn't a straight nine months. It's just a little
Speaker 1: bit every day. You know. It's like you're on baby, Kyle. Okay,
Speaker 1: that's what I can think about exactly. It's been a
Speaker 1: messy road though, as you write, Um, tell us about
Speaker 1: your reporting. Yeah, I mean what was really cool is, uh,
Speaker 1: this was start up and it was really startup. Bat.
Speaker 1: You know, we hear about these billion dollar unicorns all
Speaker 1: the time that seeing, you know, manifest destiny, that they
Speaker 1: come into the world with this idea just set in
Speaker 1: stone and they just make it happen and everyone loves it.
Speaker 1: And this was not that. You know, this is a
Speaker 1: story of a brilliant engineer who had an idea and
Speaker 1: it didn't work out, and you know, he scrapped and
Speaker 1: he pivoted and tweaked and stretched his team and laid
Speaker 1: people off and almost went out of business, and then
Speaker 1: tried to idea number two, idea number three, idea number four,
Speaker 1: and then you know, finally got a small investor, finally
Speaker 1: got a little bit of a lifeline, and everything started clicking.
Speaker 1: And here we are expected potential I PO around Thanksgiving,
Speaker 1: which would value the company at eighty billion dollars. And
Speaker 1: I want to contextualize eighty billion dollars in terms of
Speaker 1: market caps, specifically for a car company, a little company
Speaker 1: called Ford that has been doing this for you know,
Speaker 1: more than a century. Uh market tap about fifty some
Speaker 1: billion dollars. Kyle and Jim just and GM just under
Speaker 1: eight billion, seventy nine billion and change. So that's a big,
Speaker 1: big there's a big bet on the future, right Yeah.
Speaker 1: And it's about that, you know, they can have a
Speaker 1: tesla like trajectory UM. Interestingly, you know, I think the
Speaker 1: founding team here is a lot in a lot of ways,
Speaker 1: you know, very different and maybe even smarter than Elon
Speaker 1: was in the early days. UM. And they certainly gathered
Speaker 1: you know, a war chest more quickly. You know, there's
Speaker 1: some there is uh, sort of some baked and success
Speaker 1: with Jeff Bezos behind you. Um, but expectations are very
Speaker 1: high and they are still just figuring out how to
Speaker 1: build these things. But I mean they're literally just now
Speaker 1: coming off the Lee line for the first time. So
Speaker 1: as you say, you know, if we think about Tesla,
Speaker 1: there are a lot of naysayers and there are a
Speaker 1: lot of things that he had to overcome and figure out.
Speaker 1: But here we are. Is it fair to make the comparison,
Speaker 1: I mean, could we potentially be looking at uh a
Speaker 1: new car a car maker in the ilk of of
Speaker 1: Tesla and uh, I mean time will tell, obviously, But
Speaker 1: what are you hearing from folks who follow this industry? Yeah, there's, um,
Speaker 1: the general consensuses this is still you know, a totally
Speaker 1: new thing that no one's seen before, and an electric
Speaker 1: truck like a big rig that is also totally green. Um,
Speaker 1: so there is that kind of you know, sort of
Speaker 1: wow moment to it. That said, the lane is getting
Speaker 1: narrow really quickly, so they'll be first to market, but
Speaker 1: by a couple of months. You know, Ford is an
Speaker 1: electric pick up in the works. Jenal Mower says, this
Speaker 1: GMC hummer, which is even more expensive. So the sort
Speaker 1: of strategic coup that Rivan had that RJ. Scrims had
Speaker 1: four or five years ago was great. But um, you know,
Speaker 1: they were delayed in production, They're they're getting the market
Speaker 1: later than they hoped, and their first mover advantages dwindling.
Speaker 1: So it really comes down to whether they get this
Speaker 1: cult status that Tesla has, um, and that is really
Speaker 1: anyone's guests. Um. You know, they're very precious about the brand,
Speaker 1: how they promoted it, about you know who they have
Speaker 1: as a you know, Instagram influencers tied in and so
Speaker 1: that it could happen. They're definitely being very careful about it. Um.
Speaker 1: But that's that's sort of the big question. Hey, Kyle,
Speaker 1: take us back over the last decade, because I think
Speaker 1: your thesis is is really important here the idea that
Speaker 1: the only reason Rivan isn't on the scrap heap of
Speaker 1: automotive history and there look, there are many American car
Speaker 1: companies that that are is its adaptability. Uh, what were
Speaker 1: some examples of earlier versions of Ribban autos that there
Speaker 1: are no resemblance to what the company is going to
Speaker 1: start offering soon. Yeah, So Scurrnge was he was a
Speaker 1: car guy I talked to. Part of my exercise was
Speaker 1: calling all his old M I T. Classmates and they
Speaker 1: all said, you know, he was into driving. He was
Speaker 1: in the sports car. So it's first. His first baby
Speaker 1: was this very small, very affordable, very efficient sports car.
Speaker 1: And his model was the Lotus a lease, which is
Speaker 1: kind of a driver's car. It's kind of Porsche like
Speaker 1: car without the price tag. And that was his first idea. UM.
Speaker 1: There was talking about it being a hybrid or not hybrid. Um. Ultimately,
Speaker 1: when they built a prototype, they just put an engine
Speaker 1: from a Mini Cooper in there just to get the
Speaker 1: thing running. Um. So that was the first one. And
Speaker 1: then he pivoted and said we should go up scale,
Speaker 1: which maybe do a more extensive sports car, and and
Speaker 1: and the pitch would change based on which investors he
Speaker 1: was talking to, which potential investors um and what they
Speaker 1: might like to hear. There was even sort of half
Speaker 1: an idea to do a race car for the guy
Speaker 1: in Brazil, and then he ends up in the desert
Speaker 1: in Saudi Arabia through a contact at M I T.
Speaker 1: A LJ coming to a streaming service near you very soon.
Speaker 1: I mean, it's really it's kind of wild. Well, you
Speaker 1: know what I want to ask you. I mean we
Speaker 1: just got about thirty seconds. Is he a car guy?
Speaker 1: Is he an engineer? Is he a tech guy? Because
Speaker 1: you know cars are increasingly about technology. Um, just thirty seconds?
Speaker 1: What is he? You know, he's he's an engineer first,
Speaker 1: he's a car guy second, and he's probably a better
Speaker 1: tech guy than most tech guys out there. He's an
Speaker 1: absolute poly map. Um. But he's everyone I talked to
Speaker 1: you said, he's primarily an engineer. He's just interested in
Speaker 1: the idea and the meritocracy of that, and that's what
Speaker 1: may it work. We shall see. They filed for an
Speaker 1: I p O. So they're coming and the backing of
Speaker 1: AMAS on, which I think is really significant. Yeah, exactly,
Speaker 1: Well nine months it was worth it. Thank you so much,
Speaker 1: Senior correspondent, Bloomberg News on the phone from New Jersey.
Speaker 1: Another new issue potentially, Yeah, exactly. Um. Check out this story.
Speaker 1: It's available at Bloomberg dot com. Just a fantastic deep
Speaker 1: dive into all things Rivian. I'm roa yeah, but you
Speaker 1: let me drive? Oh no, no, no no, this is
Speaker 1: not a twin. All right, please, I'll do the dravel
Speaker 1: I want to drive. Good question. This is the Drive
Speaker 1: to the Clothes on Bloomberg Radio. All Right, folks, we've
Speaker 1: got jumped about ten minutes left in today's trading session.
Speaker 1: Let's talk about it. Let's get to the drive to
Speaker 1: the close. And Miletti is back with us, head of
Speaker 1: Active Equity over at Wells Fargo Asset Management six hundred
Speaker 1: four billion dollars in assets under management and total. She's
Speaker 1: with us on the phone from Milwaukee, Wisconsin. And how
Speaker 1: are you. I'm good, Carol, How are you hanging in there?
Speaker 1: Hanging in there? Uh? Feel a little whipsade based on
Speaker 1: the market trade because depending on what day, you're either
Speaker 1: up or you're down by more than one percent, especially
Speaker 1: on the S and P. What does this tell you?
Speaker 1: I mean, volatility is back, but is there something else
Speaker 1: going on that we should be aware of as investors? Well,
Speaker 1: I think we've gotten a little bit spoiled. Um. You know,
Speaker 1: I read someplace today that um, it's been more than
Speaker 1: nine months since we've seen a five percent correction. So
Speaker 1: that's the longest time, the longest streak since nineteen seventy.
Speaker 1: So I know it's I know it's been a long time,
Speaker 1: but since nineteen seventy. That's UM. That was a surprise
Speaker 1: to me. UM. What does that tell you? What does
Speaker 1: that mean? Well, confidence really has been around, and it's
Speaker 1: not surprising. Right. Economic strength has been UM. It has
Speaker 1: been in place, with people back to work, people back
Speaker 1: to business. UM, business is reopening. We know Delta probably
Speaker 1: has peeked, so that while that brought a scare, kind
Speaker 1: of a secondary scare into the market, it wasn't enough
Speaker 1: to really hamper consumer confidence in business confidence. So I
Speaker 1: think what's changed, though, is the competence in global growth
Speaker 1: UM with the challenges we see out of China. We
Speaker 1: also know that we have the said likely to stop
Speaker 1: asset purchases in November. And then we also know that
Speaker 1: there's some wavering on whether inflation is transitory or not
Speaker 1: UM that coming directly from the side now to not
Speaker 1: just from investors, and so all of those things I
Speaker 1: think are creating more volatility in the market and more uncertainty.
Speaker 1: Although you know, the economy seems pretty strong, are still
Speaker 1: UM in a good position to spend. Rates still remain low,
Speaker 1: so there's a lot of positives, but there's there's more
Speaker 1: grace guys out there. I guess the days are getting
Speaker 1: a little bit shorter, just much like we're seeing. Yeah, yeah,
Speaker 1: that is. That is certainly the case here in New
Speaker 1: York as well. And I'm wondering though about something that
Speaker 1: Carol referred to. And it's sort of like the the
Speaker 1: indecision of the market right up down, up down up, uh,
Speaker 1: you know, for the last five days with an excess
Speaker 1: of one percent. It's it's sort of like if we
Speaker 1: were talking about a single stock, we'd say the stock
Speaker 1: really doesn't know what direction to trade in. Are we
Speaker 1: seeing that on a market wide basis? And why? I
Speaker 1: think it's not a usual for volatility to pick up.
Speaker 1: And you know, UM, market doesn't like to make it
Speaker 1: easy on investors, right, I mean very often, you know,
Speaker 1: I get asked. It's not uncommon for people to ask
Speaker 1: would you buy on the dip? And um, it's not
Speaker 1: easy to do that. It's never easy to say, go
Speaker 1: out and buy. And so the last couple of days
Speaker 1: it hasn't felt good to go and do that. But again,
Speaker 1: with a lot of the dynamics in the market being
Speaker 1: so strong, with revenue growth being so strong, yes there's
Speaker 1: pressure on the supply train chain, but demand is incredibly strong.
Speaker 1: Yet there are things out there that investors want to buy.
Speaker 1: So I don't think it's unusual to see this volatility.
Speaker 1: I think we're going to continue to see more of
Speaker 1: it as you're going to see some good news flowed
Speaker 1: by some news that's questionable and it feels like it's explainable,
Speaker 1: like when you say that revenue growth is strong and
Speaker 1: our Gina Martin and and has talked talked a lot
Speaker 1: about that too, that when you look at top line
Speaker 1: growth expectations for companies, especially as we get ready for
Speaker 1: the next earning season, you know those are staying put?
Speaker 1: Are you know they're high or that we're seeing growth
Speaker 1: or they're being raised. It's when you start looking at
Speaker 1: the balance sheet and you look at some of the
Speaker 1: cost side of things. Um, but we can explain that
Speaker 1: away and it will go away provided those supply chains,
Speaker 1: you know, rebalance. Can we assume that they will rebalance
Speaker 1: or is there something much more structural going on in
Speaker 1: our economy when it comes to supply chains that maybe
Speaker 1: we're missing. Yeah, I think that is a million dollar
Speaker 1: question because if we were talking a year ago, Carol,
Speaker 1: I would have said we would have worked our way
Speaker 1: out of the supply chain issues by now. But you know, UM,
Speaker 1: what we haven't seen is demand tapering off. Demain demand
Speaker 1: remains strong, the consumer remains kind of relentless. Us they're
Speaker 1: in good shape, the balance, their balance sheet's remain in
Speaker 1: great shape. And we continue to see shortages of labor
Speaker 1: in the supply chain, right so, you know, truck drivers
Speaker 1: UM remain a huge challenge as well. So and certainly
Speaker 1: on UM factory lines there's labor challenges as well. We
Speaker 1: see that in the Midwest as well as other places.
Speaker 1: So there are things that are fixable, but I think
Speaker 1: there are some structural challenges with the supply chain that
Speaker 1: may not get fixed. What I'm most worried about is
Speaker 1: how long will consumer confidence stay strong? Are there things
Speaker 1: that are going to challenge consumer confidence? Right? So, while
Speaker 1: their pocketbook might feel okay, that might get challenged if
Speaker 1: we continue to see the things like higher energy prices UM,
Speaker 1: that's going to sting over time, if commodity prices and
Speaker 1: other things continue to rise UM at a rapid rate. Hey,
Speaker 1: and just in the last thirty seconds that we have
Speaker 1: with you, how long do you see those challenges persisting?
Speaker 1: Lack of workers and look, um, you know, actually the
Speaker 1: troubled getting workers the struct drivers you talked about. Yeah,
Speaker 1: I do think it is something that's going to take
Speaker 1: a good part of next year to continue to fill.
Speaker 1: Um there are you know, there's no shortage of ways
Speaker 1: that companies are trying to bring those workers back, but
Speaker 1: it hasn't been that successful and so um it's going
Speaker 1: to take a good long time to do it, probably
Speaker 1: through the end of next year. Okay. Griffin of Citadel
Speaker 1: says that maybe it stid for the President to give
Speaker 1: an address and it's time for America to get back
Speaker 1: to work. He certainly was pretty strong with his message.
Speaker 1: All right, and thank you so much. Ama. Letty, head
Speaker 1: of Active Equity over at Wells Fargo Asset Management. Thanks
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