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Speaker 1: Hello, Stephanomics. Here the podcast that brings you the global economy,

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Speaker 1: and this week we are circling the globe to give

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Speaker 1: you an insight into three key pieces of the grand

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Speaker 1: economic jigsaw. We discussed week after week, people, property, and policy.

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Speaker 1: People we know have been a highly sought after commodity

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Speaker 1: in the post COVID world, with employers everywhere struggling to

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Speaker 1: fill empty positions, but millions of people who did have

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Speaker 1: jobs before the pandemic still somehow missing. What's interesting, though,

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Speaker 1: is it's not only the low skilled, potentially unrewarding jobs

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Speaker 1: that are going unfilled. Fashion houses in Italy are also

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Speaker 1: struggling to find people who want to learn how to

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Speaker 1: hand stitch a belt buckle or fashion and elegant pair

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Speaker 1: of shoes. We go to the rolling hills of Tuscany

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Speaker 1: to talk to the head of the iconic fashion brand

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Speaker 1: Fendi about that shortage. In a for a while, we

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Speaker 1: also have the stunning news from Hong Kong that the

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Speaker 1: world's priciest housing market is finally getting very slightly more affordable.

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Speaker 1: Our chief Asia economy correspondent, Ender Current explores why prices

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Speaker 1: are falling there and whether three million dollars can now

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Speaker 1: buy a harbor view in just a few minutes. But

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Speaker 1: first we're going to Washington, d C. For arguably the

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Speaker 1: most important single policy decision in the entire global economy,

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Speaker 1: and it's happening again this week, as the US Central

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Speaker 1: Bank meets to set interest rates. It's particularly interesting this

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Speaker 1: time around because we're expecting the first normal sized interest

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Speaker 1: rate rise half a percentage point since the FED began

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Speaker 1: raising the cost of money in America aggressively some months ago.

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Speaker 1: The FED senior policymakers were also meeting the day after

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Speaker 1: a surprisingly weak figure for US consumer price inflation, holding

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Speaker 1: out the tantalizing possibility that the US might just be

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Speaker 1: turning the corn in its fight against inflation. Well, Bloomberg

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Speaker 1: Chief US economist Anna Wong is grabbing a few minutes

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Speaker 1: on a very busy day to talk to us. Anna,

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Speaker 1: Thank you very much. Um, First, I guess you should

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Speaker 1: just remind us what's happened so far. How much has

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Speaker 1: the FED tightened monetary policy, raised interest rates? And where

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Speaker 1: is it left the official interest rate right now? So

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Speaker 1: this year we saw one of the most rap rapid

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Speaker 1: FED tightening cycle. It's the most rapid pace since the

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Speaker 1: nineteen eighties from zero percent of the Fed Funds rate

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Speaker 1: earlier this year, the Fed has hiked to currently four

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Speaker 1: percent on the upper end, and they're expecting to hike

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Speaker 1: fifty basis point later today too, so that the Fed

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Speaker 1: funds rate will will reach four point five percent after today.

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Speaker 1: And yes, we should explain I'm talking to you because

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Speaker 1: you'd be so busy immediately after the decision we're talking

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Speaker 1: at just before UM. But there is I think it

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Speaker 1: would be safe to say the world would be pretty

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Speaker 1: surprised if we didn't see that half a point interest

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Speaker 1: rate rise, even though there'll be other details that will

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Speaker 1: get later from the from the press conference, that that

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Speaker 1: seems to be a done deal. Is that fair? That

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Speaker 1: would be a fair characterization. And again, for people who

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Speaker 1: aren't sort of looking at every twist and turn in

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Speaker 1: the markets, just explain what interest rate they're actually setting,

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Speaker 1: because I know some people might think they're setting the

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Speaker 1: interest rate that we might be able to get immediately

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Speaker 1: in a savings account or that we borrow at if

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Speaker 1: we got a mortgage. What is the rate that they're

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Speaker 1: setting and why is it significant? Right? So, the Federal

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Speaker 1: Reserve set a rate called the Federal funds rate, and

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Speaker 1: that's the rate that the borrow rate that the FED

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Speaker 1: lends to other branks. It will take some time for

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Speaker 1: other banks to channel that kind of higher or lower

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Speaker 1: interest rates to you know other you know, other entities

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Speaker 1: that require funds. Ultimately, what affects economy the most is

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Speaker 1: um the longer term rates. So think about um. When

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Speaker 1: you go buy a car, your you might need auto loans,

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Speaker 1: and those auto loans are tied to five tends to

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Speaker 1: be most affected by five year treasury yield, and then mortgages,

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Speaker 1: which will affects a lot of people are most affected

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Speaker 1: by ten year treasury yields. So when the Fed sets

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Speaker 1: a very short term rates, it's trying to affect the

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Speaker 1: rates down the yield curve. Ideally, when the Fed wants

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Speaker 1: to lower inflation, they want to raise the short term

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Speaker 1: rates and then and and as a result, the two

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Speaker 1: year rates will rise, and as a result, five year

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Speaker 1: rates will rise. But sometimes things just don't go their way.

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Speaker 1: I mean, for example, if um, you know, if if

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Speaker 1: suddenly there's a global financial turmoil, let's say in China,

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Speaker 1: then suddenly a lot of capital will flow out of

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Speaker 1: China and into the United States seeking safe haven protection

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Speaker 1: and that could loosen financial additions. So so so when

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Speaker 1: the FED sets monetary policy, trying to heighten monetary policy,

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Speaker 1: and it actually depends a lot more other than the

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Speaker 1: immediate instrument that they can control. Yeah, so it's sort

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Speaker 1: of setting the floor for rates and hoping that that

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Speaker 1: has a kind of ripple effect for the rest of

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Speaker 1: the market. But as you say, loads of other things

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Speaker 1: can get in the way, whether people are feeling confident,

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Speaker 1: whether banks are desperate to lend or desperate not to lend,

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Speaker 1: And there's lots of things that can have affected. So

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Speaker 1: it's certainly the case that the rate you hear about

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Speaker 1: when you hear about the federal funds rate or in

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Speaker 1: other countries, the base rate is not necessarily the rate

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Speaker 1: that you're going to be offered if you try and

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Speaker 1: borrow money. Now, I mentioned that there was a pretty

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Speaker 1: interesting inflation number that came out earlier this week that

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Speaker 1: surprised many people, was much lower than expected. Um. Does

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Speaker 1: that change the calculation that that Fed policymakers have been

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Speaker 1: making at their meeting, Well, it's certainly. The surprise yesterday

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Speaker 1: was really a big surprise, an unusually large surprise. UM.

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Speaker 1: Just to say, how how big of a surprise it is?

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Speaker 1: Most people on the Bloomberg survey, I think that it

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Speaker 1: would be the monthly change on the headline would be

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Speaker 1: point three somethings gone up just in one month, Yes,

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Speaker 1: in one month. And we were expecting a softer point too.

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Speaker 1: And there are some people who think it's point too,

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Speaker 1: but nobody thought it would be point one. So we

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Speaker 1: were just talking about the ripple effect of fitts Uh

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Speaker 1: monetary policy. Well, what what yesterday's report did was that

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Speaker 1: it lowered the ten year treasury yields by twenty bits

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Speaker 1: immediately upon its release. Two year treasury yields also plunged

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Speaker 1: by twenty basis point upon the release of the of

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Speaker 1: the report. And what that suggests to you is that

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Speaker 1: investors are revising down their outlook several months and years

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Speaker 1: ahead of where inflation could be. On a very basic level,

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Speaker 1: if you think interest rates on average, you're going to

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Speaker 1: be a bit lower over the next two years than

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Speaker 1: you're the rate you can you will lend to someone

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Speaker 1: for two years. Um goes goes down a bit. But

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Speaker 1: there was a there was an interesting kind of side

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Speaker 1: drama around that decision because, as you say, it was

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Speaker 1: a surprising result, and when you have a surprise, you

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Speaker 1: have the potential maybe for people to make money who

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Speaker 1: were betting on one side, and then the market moves

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Speaker 1: dramatically and actually there was some pretty suspicious goings on.

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Speaker 1: So tell us more about that, right, So, about a

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Speaker 1: minute before the data CPI data was released at eight thirty,

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Speaker 1: that was suddenly a significant amount of trading on a

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Speaker 1: treasury yield and UM in the direction of where where

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Speaker 1: if you we do get a dolvish CPI price, that

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Speaker 1: that would be where things would be trading. So so

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Speaker 1: by by being a bit early before you know everybody

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Speaker 1: gets the same data, somebody is making a lot of

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Speaker 1: money with that move. So it's very unusual and statistically

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Speaker 1: it just doesn't happen in in even in previous releases,

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Speaker 1: don't see that kind of UM you know, UM trading activity.

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Speaker 1: And also what makes it even more suspicious is at

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Speaker 1: the same time, a data delivery platform that's very popular

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Speaker 1: among pop policy makers and Wall Street analysts, Haver Analytics,

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Speaker 1: also crashed UM at the same time. And if you

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Speaker 1: put the two dots together, UM you know that trading

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Speaker 1: activity and also the crash of haveor it almost you know,

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Speaker 1: it's a theory, but it's not a Faverify theory. But

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Speaker 1: a theory could be that somebody could be trying to

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Speaker 1: delay the reaction of you know, Wall Street analysts so

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Speaker 1: that they can prolong on that you know, early information.

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Speaker 1: If they do have early information of the CPI report,

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Speaker 1: then they could prolong that period where they're um trading

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Speaker 1: before everybody gets in on the information. And as you said,

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Speaker 1: they could be we could be talking about big money.

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Speaker 1: And certainly anyone used to work at FED, the FED

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Speaker 1: and some people in the U. S. Treasury would have

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Speaker 1: in the U. S. Administration would have prior notice of

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Speaker 1: that figure. And as you said, it was a surprise.

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Speaker 1: Anyone who looked at it would say that's going to

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Speaker 1: cause a market move. So there's now going to be

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Speaker 1: a real microscope on all the people who who did

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Speaker 1: see that data before, because we pretty explosive if they

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Speaker 1: had leaked it. I don't envy them. I think they're

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Speaker 1: in for a pretty uncomfortable UM week or so. But

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Speaker 1: just to get back to the sort of main story,

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Speaker 1: I mean, Anna, when you sit around, I don't know

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Speaker 1: if you're going to be able to get to see

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Speaker 1: any of your family over the holiday period. But when

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Speaker 1: they say, Anna, you're the U S economist. Are we

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Speaker 1: nearing the end of this battle against inflation? What do

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Speaker 1: you say? And and they will hate me for it,

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Speaker 1: but I'll say, it's really unclear. UM. So so I

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Speaker 1: you know, economists did have a poor track record with

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Speaker 1: with UM with predicting the rise of inflation in the

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Speaker 1: last two years. But I think what we did learn

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Speaker 1: is that UM, there are ways that inflation could continue

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Speaker 1: to surprise. And number one is that if there are

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Speaker 1: unforeseen external supply shocks. So suppose that you know, China

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Speaker 1: reopened successfully in six months time and commodity prices spike again,

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Speaker 1: and that UM Russia decide to cut UM supply of

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Speaker 1: oil production so that so that they could punish those

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Speaker 1: who who who joined in on the G seven price caps.

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Speaker 1: Then what we see is that our surgeons of UH

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Speaker 1: inflation mid next year, and then inflation expectations would could

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Speaker 1: rise significantly, and then the Fed will have to you know,

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Speaker 1: revamp their their whole rates rise UM campaign, even after

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Speaker 1: pausing around UM, you know, the second quarter of next

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Speaker 1: year as everybody currently expects. So so I think they're

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Speaker 1: looking ahead there's just so much uncertain certainty. And I

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Speaker 1: think the most useful way to look at the world

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Speaker 1: right now is scenario planning, and just think about how,

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Speaker 1: you know, if what shocks could lead to a surprising

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Speaker 1: resurgence and inflation, or what shocks could lead to more

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Speaker 1: deflationary pressure, And if you think about how the economy

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Speaker 1: is being affected by these higher interest rates. You know,

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Speaker 1: we talk about a recession being inevitable in the US

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Speaker 1: and other places because of this need to squeeze demand

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Speaker 1: and bring inflation down. And are we are we seeing

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Speaker 1: that happen? And are you any clearer on whether we

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Speaker 1: will have a recession in the US? You know, there, Stephanie,

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Speaker 1: there has been a little bit of a disconnect. Everybody

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Speaker 1: became more gloomy about the U S economy. Recession talks

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Speaker 1: has increased significantly over the past two weeks. But on

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Speaker 1: the other hand, real data is surprising on the on

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Speaker 1: how resilient US consumers are. You know, we have seen

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Speaker 1: several data points that suggest, uh, people are still spending

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Speaker 1: so and what's the reason for that? And I think

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Speaker 1: the reason is that there's still a lot of money

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Speaker 1: slashing around the economy. And even though Um, the pandemic

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Speaker 1: stimulus has long ended. The fact is a lot of

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Speaker 1: those money is still in the bank account of um,

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Speaker 1: you know, not only households but also state and local government. UM.

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Speaker 1: So looking forward to next year, even though our recession

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Speaker 1: probability models are flashing really read right now and suggesting

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Speaker 1: to us that a recession could happen around August or

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Speaker 1: September of next year, UM, there is a chance that

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Speaker 1: the recession might not happen then and then until much later,

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Speaker 1: just because um, you know, people do have savings and

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Speaker 1: so currently the recession and we are expecting would be

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Speaker 1: a shallow one where consumption would still be positive, where um,

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Speaker 1: you know, things are still pretty good from from the

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Speaker 1: household side. Unemployment rate rise to about five percent, but

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Speaker 1: you know, all in all, it's it's not the two

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Speaker 1: thousand and eight kind of recession. And I guess that

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Speaker 1: would be a decent Christmas present for people if you said,

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Speaker 1: if we were going to get rid of inflation without

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Speaker 1: having a deep, a deep recession and conceivably no recession

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Speaker 1: at all, although idea doesn't sound like you're betting on that,

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Speaker 1: that's right, and I won't thank you so much. Thank

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Speaker 1: you Stephanie now I said the FED decision had global implications.

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Speaker 1: Hong Kong is kilometers away, but it does feel the

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Speaker 1: full force of US interest rate increases because its currency

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Speaker 1: is directly linked to the US dollar. So when the

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Speaker 1: FED hikes, Hong Kong has to hide two there, with

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Speaker 1: more hands on control from Beijing and the lingering impact

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Speaker 1: of China's COVID zero policies, higher interest rates are just

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Speaker 1: one of the factors making Hong Kong real estate ever

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Speaker 1: so slightly more affordable. Is in the current okay, I

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Speaker 1: can I ask you a couple of questions. Where are we?

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Speaker 1: We are in the middle of one shy it's actually

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Speaker 1: one shy road, and we're waiting to meet our Ms Cheng,

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Speaker 1: Lily Chang, who is a real estate agent, and we're

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Speaker 1: hoping that Ms. Chang will be able to give us

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Speaker 1: a tour of a property and to explain to us

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Speaker 1: what she does. And it's a sunny Friday morning. My

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Speaker 1: producer Yang Yang and I are standing in front of

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Speaker 1: a fancy apartment building at the heart of Hong Kong Island.

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Speaker 1: The building is converted from an old food market that

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Speaker 1: dates back to the nineteen thirties. These days instead of

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Speaker 1: fresh food vendors. The Art Deco architecture is the home

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Speaker 1: to a booty cafe, a furniture shop, and a forty

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Speaker 1: three floor residential blocks. Wow, it's a view that grasps

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Speaker 1: almost everything quintessential of Hong Kong. From the apartment's thirty

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Speaker 1: third floor balcony, you can see the mountains, to see

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Speaker 1: the forests of skyscrapers, and of course, the famous horse

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Speaker 1: track in nearby Happy Valley. See the recent horse You

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Speaker 1: can see that. This is all the race track. You

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Speaker 1: see what you? Yeah, this one we just saw twenty

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Speaker 1: five million dollars. That's more than three million US dollars

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Speaker 1: for nine square feet million to save you a horse

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Speaker 1: racing ticket. What a Steal's nice to you have? The

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Speaker 1: douple benefits jokes aside, it might actually be a steel

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Speaker 1: Chang told us with that in the good years, she

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Speaker 1: could easily sell this apartment for two million Hong Kong

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Speaker 1: dollars more in much less time one months. Yeah, if

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Speaker 1: the good is the good time. The Hong Kong has

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Speaker 1: long been known as one of the world's least affordable

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Speaker 1: housing markets. That may be changing. The city now has

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Speaker 1: more empty office space than ever before, and the house

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Speaker 1: prices are in decline. So what dragged the markets down?

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Speaker 1: Chang says China's COVID zero policy had played a big role.

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Speaker 1: So we have before, we have a lot of the

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Speaker 1: Chinese people, they come easy to come Hong Kong and

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Speaker 1: they would make the investment in Hong Kong, or they

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Speaker 1: weren't Honko. But now this kind of China and Hong

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Speaker 1: Kong these two three years. Hong Kong has only recently

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Speaker 1: reopened its international border to the world after being shut since,

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Speaker 1: but travel between Hong Kong and mainland China has been

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Speaker 1: dampened by Beijing's COVID policies, which are now in the

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Speaker 1: course of being eased. There's another complication here, the US

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Speaker 1: Federal Reserve. Because Hong Kong's currency is linked to the

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Speaker 1: US dollar, the giant finance hoube effectively imports US monetary policy.

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Speaker 1: While the correlation isn't exact, it does mean that when

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Speaker 1: FED Chair Jerome Powell raises rates in Washington, the effects

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Speaker 1: of those hikes rickichet through Hong Kong's banking system. Just

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Speaker 1: like US, house prices are cooling in Hong Kong's residential market,

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Speaker 1: economists are estimating a fall in house prices of up

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Speaker 1: to thirty percent from their each trusting one to three.

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Speaker 1: Trusting one to three to get a better idea of

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Speaker 1: when the housing market might bounce back, if it bounces back,

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Speaker 1: I went to see Nelson Wong, who's among those seeing

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Speaker 1: the hit to real estate, and Nelson Wall, executive director

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Speaker 1: at Johns Lane lessa for Hong Kong Research. From his office,

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Speaker 1: Wong pointed across the harbor to Hong Kong's old Airport.

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Speaker 1: It's now in part being redeveloped for residential units that

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Speaker 1: are struggling to sell. You can see the tact area

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Speaker 1: from here. Um you see the cruise terminal which is

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Speaker 1: right on the old Tech Airport runway, and then further

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Speaker 1: back is the various residential developments that are on the runway.

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Speaker 1: In Hong Kong, high real estate valuations have long been

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Speaker 1: a pillar of the city's economic model, along with spanking

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Speaker 1: and trade. With the city's borders closed to the rest

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Speaker 1: of the mainland, the wobble in housing is all the

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Speaker 1: more acute. The unfortunate thing is that when Mr Powell

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Speaker 1: thinks of indust rates um, he would not take into

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Speaker 1: account what happens in Hong Kong. Of course, what's happening

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Speaker 1: in Hong Kong is just one part of a broader

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Speaker 1: global story. As real estate marketcy prices going to decline.

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Speaker 1: The worst inflation outbreaking decades hasn't turn sparked the most

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Speaker 1: aggressive Montre policy tightening cycle in forty years, which is

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Speaker 1: driving up mortgages and driving down house prices and demand.

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Speaker 1: Because of its huge multiplier effect, real estate is at

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Speaker 1: the center of economic activity everywhere, but in Hong Kong,

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Speaker 1: Nelson says, the authority's hands are tied. We think that

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Speaker 1: that the slowdown would continue if we do not act

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Speaker 1: at this point, and there are frankly not a lot

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Speaker 1: that the Hong Kong government can can act on. It

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Speaker 1: cannot change the indest rate, It cannot change the political

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Speaker 1: or geopolitical situations around US or in Europe for the meta.

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Speaker 1: While Nelson sees a further decline in prices, he also

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Speaker 1: sees the bottom in Hong Kong's market. After my chat

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Speaker 1: with Nelson, I went to see another veteran of Hong

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Speaker 1: Kong's real estate market, Kimmi Kimany, to hear her views

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Speaker 1: on what lies ahead. This is Kimmi Kimani from Savills

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Speaker 1: residential services. I'm in charge of the residential team in

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Speaker 1: Hong Kong. So we do leasing, we do sales, we

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Speaker 1: do corporate tendency management, et cetera. We basically do everything,

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Speaker 1: except we don't find partners. Kimmi sees another decline in

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Speaker 1: prices next year and says selling high end apartments in

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Speaker 1: Hong Kong isn't like it used to be. The valuations

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Speaker 1: Kimmi mentions here are Hong Kong dollars. Everyone's looking for

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Speaker 1: a bargain. So if it's under under value, everybody wants it.

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Speaker 1: Let's say, if your property is you're asking for fifty million,

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Speaker 1: bank valuation is forty five million, and the seller is

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Speaker 1: selling it for forty million, Yes you will have bias

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Speaker 1: for sure, but otherwise not. People are just it's a

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Speaker 1: wait and see attitude at the moment for most of

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Speaker 1: the buyers. And I can understand why, because of the

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Speaker 1: economy of Hong Kong at the moment. How to real

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Speaker 1: estate market plays out in Hong Kong remains unclear. A

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Speaker 1: steep correction in Hong Kong could be a signal of

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Speaker 1: deeper gloom for the global economy. Still, those like Kimmy

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Speaker 1: saying Hong Kong has seen crisis before and has always rebounded. Yeah,

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Speaker 1: but saying that, I want to against say that the

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Speaker 1: Hong Kong people have a lot of resilience. It's in

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Speaker 1: their DNA, it's in our blood in Hong Kong, and

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Speaker 1: the current for Bloomberg News. Finally we have the sad

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Speaker 1: case of the missing artisan. And not so long ago,

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Speaker 1: I seem to remember we were said to be moving

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Speaker 1: to a maker economy, with innovations in small scale manufacturing

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Speaker 1: and online retailing making it possible for more of us

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Speaker 1: to learn the satisfaction of making a fine object from

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Speaker 1: start to finish. It doesn't seem to have worked out

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Speaker 1: that way. In fact, it's harder than ever to persuade

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Speaker 1: young people to enter time honored manual professions. Australia, for example,

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Speaker 1: has a chronic blacksmith shortage. Dagger makers in Bali are

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Speaker 1: in short supply. Even Italy celebrated fashion and luxury companies

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Speaker 1: are struggling to find the people they need in a

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Speaker 1: country where the youth unemployment rate is nearly is our

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Speaker 1: Italian economy reporter Alessandra Mileccio. The first thing is a

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Speaker 1: lot of admiration for Italy to have kept this uh capacity,

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Speaker 1: you know, this industrial artisanal capacity, with this reactivity, this

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Speaker 1: capacity to innovate. I mean, that's the first thing that

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Speaker 1: is really striking. If we want to do more objects,

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Speaker 1: we need more people. And if a generation goes whereas

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Speaker 1: an next generation. That's Fendy's new chief executive, Sage Brunswick.

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Speaker 1: When he arrived in Rome almost five years ago, he

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Speaker 1: knew there would be challenges, but the one he wasn't

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Speaker 1: expecting a lack of artisans. After all, Italy is known

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Speaker 1: for its craftsmanship, from the violin makers, textile and master

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Speaker 1: painters of the Renaissance to modern fashion designers. Artisans in

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Speaker 1: Italy are a natural pair. But soon after taking over Fendi,

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Speaker 1: Runchfit realized that the skilled workers he's so admired were

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Speaker 1: clustered in small family firms, aging fast and beginning to disappear.

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Speaker 1: Is there an next generation Italians making enough children? Are

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Speaker 1: these children all interested to succeed their their parents in

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Speaker 1: the company as they were before, or should we uh

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Speaker 1: participate to this elaboration of the next generation. So that's

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Speaker 1: how the question comes. A shortage of skilled artisans is

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Speaker 1: a global problem from Australia's blacksmiths too much of Europe's

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Speaker 1: luxury sector. Young people are looking for less manual career options.

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Speaker 1: But what's startling about Italy is the magnitude of the phenomenon,

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Speaker 1: coupled with the youth unemployment rate. Near about one in

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Speaker 1: every two job postings goes unfilled. According to luxury trade

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Speaker 1: group ALTA Gamma, that means there will be ninety four

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Speaker 1: thousand missing workers in the fashion and jewelry sector in

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Speaker 1: the next few years. Stefani Lazeroni, director General of Altagama,

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Speaker 1: thinks the shortage is because of several factors, lack of training,

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Speaker 1: a mismatch between supply and demand, and a misunderstanding about pay.

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Speaker 1: I think that there isn't much difference in salary between

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Speaker 1: someone in the manufacturing sector and someone work in an office.

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Speaker 1: Entry level positions are the same around one thousand and

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Speaker 1: one thousand and two hundred euros a month, and then

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Speaker 1: it increases. These people are in demand because within the

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Speaker 1: next two to four years they will become rare and

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Speaker 1: so there's considerable potential for growth. Brunchwick decided to tackle

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Speaker 1: the problem head on. He knew money couldn't be the

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Speaker 1: main reason for he had trouble finding artisans. It didn't

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Speaker 1: make sense to him. Why would unemployed youth not want

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Speaker 1: to work for a luxury company on a regular contract

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Speaker 1: making things of beauty, especially if there were excellent long

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Speaker 1: term prospects. The problem seemed to be education. He knew

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Speaker 1: in other European countries, trade schools are common and effective.

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Speaker 1: As we know the Japanese's training in the nine thousand

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Speaker 1: young people on technical jobs per year in the education system,

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Speaker 1: France about half of this, and Italy fIF in another world,

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Speaker 1: so it means it doesn't exist. I mean education doesn't

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Speaker 1: provide enough technicians to the industry in general. So he

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Speaker 1: set out to make Fendi a leader in training. Brunchwick

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Speaker 1: had Fendi set up its own factories and try to

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Speaker 1: find ways to train people, both in house and through programs.

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Speaker 1: Likely adopted school initiative run by Alta Gamma in collaboration

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Speaker 1: with Italy's education ministry. It pairs trade schools with companies

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Speaker 1: like Fendi, Jeweler, Bulgarie, or brands like Lotto, Piano and Faragamo,

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Speaker 1: just to name a few. To find the right fit

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Speaker 1: for Fendi, Brunchwick traveled to one of Italy's historic shoemaking districts,

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Speaker 1: an area nestled in the rolling hills of central Italy's

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Speaker 1: Marquet region. Here he opened a sleek new factory where

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Speaker 1: steel machines hum in a designer pavilion near the medieval

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Speaker 1: city of Fermo, mixing modernity and tradition. We just I

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Speaker 1: did to travel to the factory and meet the artisans

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Speaker 1: and training Brica. Joe Malini is one of the high

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Speaker 1: school trainees in the formal program. The idea of shoemaking

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Speaker 1: was not an easy self for the eighteen year old

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Speaker 1: who first dreamed of becoming a hairdresser. Thefa don't want

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Speaker 1: to do this job because they see shoemaking as a

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Speaker 1: job for losers. People say, oh, you make shoes, that's

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Speaker 1: a bit useless. The idea of working in a factory

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Speaker 1: has people imagining a closed space, dark, repetitive work and

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Speaker 1: said workers. But it is not at all like that.

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Speaker 1: Legenda trees Joe Malini's personal and family history. Watching her

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Speaker 1: mother struggle in the profession made her wary of trying

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Speaker 1: the job. My mother, when I told her I chose shoemaking,

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00:27:51,640 --> 00:27:53,960
Speaker 1: said she wasn't sure I was going to like it.

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00:27:54,400 --> 00:27:56,439
Speaker 1: She had done it and was a bit scared that

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Speaker 1: that would be unhappy, but that didn't happen. She used

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00:28:00,520 --> 00:28:04,040
Speaker 1: to work at home for many, many hours and small details.

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00:28:04,080 --> 00:28:07,040
Speaker 1: She would do teaching for big name brands and attractively

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00:28:07,160 --> 00:28:10,760
Speaker 1: perfect and it was very stressful for her. She would

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00:28:10,800 --> 00:28:13,240
Speaker 1: work some day too, as she was paid by peace.

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00:28:14,720 --> 00:28:18,840
Speaker 1: Here I see ladies working on stitching, and they seem happy,

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00:28:19,160 --> 00:28:21,520
Speaker 1: they do a job they like. They look content to

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00:28:21,520 --> 00:28:24,480
Speaker 1: be here because every day they also work on the prototypes.

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00:28:24,720 --> 00:28:28,400
Speaker 1: They do different things. So now the problem was perception

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00:28:28,800 --> 00:28:32,280
Speaker 1: and a Maria Bernardini, the principle of thermos or Studio

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00:28:32,359 --> 00:28:36,520
Speaker 1: Ricchie Professional Trade School, says having brands like Fendi associated

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00:28:36,520 --> 00:28:44,560
Speaker 1: with their internships makes a huge difference. The presence of

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00:28:44,600 --> 00:28:50,040
Speaker 1: a prestigious brand helps a lot towards overcoming stereotypes, some prejudices,

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00:28:50,080 --> 00:28:54,280
Speaker 1: a cultural with families that follow trends. Currently, the trend

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00:28:54,560 --> 00:28:57,320
Speaker 1: is to choose high school and not trade school. If

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00:28:57,360 --> 00:29:02,160
Speaker 1: you consider that only twelve of stud chose a trade school,

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00:29:04,040 --> 00:29:09,800
Speaker 1: changed one. Even Carmela Cabro, professor of modeling and Projects

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00:29:09,800 --> 00:29:13,360
Speaker 1: at the school, agrees. She remembers the excitement of students

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Speaker 1: seeing the modern factory on their first day of the

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Speaker 1: internship annoying as professors who have done this type of

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00:29:22,040 --> 00:29:24,800
Speaker 1: work with students for years have seen students who were

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Speaker 1: sent here as a last resort because they weren't doing

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00:29:27,760 --> 00:29:30,800
Speaker 1: very well anywhere else, and they come to life and

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00:29:30,840 --> 00:29:38,120
Speaker 1: really change. One of these wide Eye trainees is eighteen

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00:29:38,160 --> 00:29:41,840
Speaker 1: year old Alessiabala, who, like her friend Jomarini, also wanted

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00:29:41,880 --> 00:29:44,440
Speaker 1: to go into hair dressing before seeing how the factory

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00:29:44,520 --> 00:29:48,440
Speaker 1: is run. While we spoke, she was watching an employee

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Speaker 1: put the finishing touches on a pair of elegant Fendi boots,

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Speaker 1: which retail for well over a thousand euros. Their gravity

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Speaker 1: defying heels are so complex the engineers had to study

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00:29:58,600 --> 00:30:01,120
Speaker 1: how to distribute the weight effect a week before production

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00:30:01,160 --> 00:30:04,920
Speaker 1: could start. Bala says she can now imagine a future,

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Speaker 1: and Shoemaking comments, it's um. Everything begins on paper from

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00:30:11,440 --> 00:30:14,239
Speaker 1: an idea, but it's wonderful to see it evolve and

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00:30:14,280 --> 00:30:17,560
Speaker 1: I like to see that come about. I hope to

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00:30:17,600 --> 00:30:20,160
Speaker 1: come here to work one day to maybe learn more

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00:30:20,240 --> 00:30:27,760
Speaker 1: and specializing sectors I like from the especially that's what

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00:30:27,840 --> 00:30:30,640
Speaker 1: Brunchwig is hoping and why He's opened a second factory

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Speaker 1: in Tuscan, his leather making district for handbags. He says

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00:30:34,240 --> 00:30:36,560
Speaker 1: maybe a TV show could help too, like the ones

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Speaker 1: that have made cooking attractive. Frankly, to become a coup

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00:30:39,560 --> 00:30:41,960
Speaker 1: was not a dream when I was young. Okay, now

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00:30:42,000 --> 00:30:45,880
Speaker 1: it's a dream. Okay, they did something something would uh

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00:30:45,920 --> 00:30:49,680
Speaker 1: in communicating and the interest of this of this job,

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00:30:49,920 --> 00:30:51,600
Speaker 1: you just have to do the same thing. I mean,

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Speaker 1: if you're the one person able to transform an idea

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00:30:55,520 --> 00:30:58,400
Speaker 1: into a hand bag or into a shoe, it's a

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Speaker 1: lot of vague yeh. Infermore, I'm Alisandra Melia Actual for

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00:31:03,000 --> 00:31:17,720
Speaker 1: Bloomberg News. Well that's it for Stephanomics. We'll be back

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00:31:17,720 --> 00:31:21,160
Speaker 1: next week with a sort of Christmas edition. In the meantime,

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00:31:21,200 --> 00:31:23,760
Speaker 1: please rate us wherever you get this podcast, and check

485
00:31:23,760 --> 00:31:26,680
Speaker 1: out the Bloomberg News website for more economic news and

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00:31:26,800 --> 00:31:30,000
Speaker 1: views on the global economy. You really also ought to

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00:31:30,080 --> 00:31:33,800
Speaker 1: follow at economics on Twitter. This episode is produced by

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00:31:33,880 --> 00:31:37,560
Speaker 1: Yang Yang, Sammer Sadi and Magnus Henrikson, with special thanks

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00:31:37,560 --> 00:31:42,640
Speaker 1: to Anna wan Alessandra Miliaccio, Flavio Rodundi, and Ender Current.

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00:31:43,320 --> 00:31:46,080
Speaker 1: Mike Sasso is the executive producer of stephanomics,