Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside
Speaker 1: my co host Matt Miller.
Speaker 2: Every business day we bring you interviews from CEOs, market pros,
Speaker 2: and Bloomberg experts, along with essential market moven news.
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Speaker 3: It's Nathan Deana Bloomberg Intelligence.
Speaker 2: Look Look, look, look, look see there in the I
Speaker 2: see him lower the right hand corner, I see him. Indeed,
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Speaker 2: me my bright green shirt there, and you'll see Nathan
Speaker 2: Dean in a moment, Nathan.
Speaker 3: We got headlines.
Speaker 2: Across the terminal that the SEC is going to finally
Speaker 2: impose these new hedge fund and private equity rules fee
Speaker 2: disclosure treatment of certain investors, and the hedge fund industry
Speaker 2: has threatened to sue over this proposal.
Speaker 1: What do we know?
Speaker 4: So, essentially, this is a proposal that would require the
Speaker 4: hedge funds and private equity funds private funds to disclose
Speaker 4: a lot of information including compensation, fees, performance and so
Speaker 4: forth like that expenses, and this is a standardization or
Speaker 4: a standardized disclosure so that an investor can essentially compare
Speaker 4: and contrast the performance of one fund versus another. In
Speaker 4: addition to this, it would also prohibit certain conflicts of interests.
Speaker 4: One of the more interesting aspects of the proposal is
Speaker 4: if you're going to cash out an investor and you're
Speaker 4: going to give a certain rebate or allow that investor
Speaker 4: to cash out at a certain percentage, you have to
Speaker 4: make that available to all different types of investors. Now,
Speaker 4: like you said before, the Managed Funded Association and the
Speaker 4: trade associations hate this rule. It's going to be significant
Speaker 4: costs in terms of compliance headaches. The big funds should
Speaker 4: be okay, but this is really also going to increase
Speaker 4: competition amongst the smaller funds. We certainly anticipate the funds
Speaker 4: will sue. They've said that they could sue within the
Speaker 4: first two weeks. In fact, the Managed Funds of Associations
Speaker 4: comment letter before it was finalized said that they were
Speaker 4: attacking the cost benefit analysis of the rule. For those
Speaker 4: of us in Washington, that's essentially a keyword. We're going
Speaker 4: to sue you. Now, the SEC did make some changes.
Speaker 4: They actually took out some language that made it a
Speaker 4: little bit easier for people to sue funds, but I
Speaker 4: certainly don't think that's going to keep the MFA and
Speaker 4: the other types of fund industries from taking this to
Speaker 4: the courts.
Speaker 1: So again, just give us the history here, and Nathan,
Speaker 1: is this a solution in search of a problem or
Speaker 1: is there really concern out there about disclosure from the
Speaker 1: hedge funds.
Speaker 4: So I think what this is that they took a
Speaker 4: consumer level initiative, which is disclosures to consumers, and thinking,
Speaker 4: you know, just not sophisticated investors, but just disclosures to
Speaker 4: individual consumers, and then they applied that to the private
Speaker 4: fund industry. Now, the SEC will say, look, there's eighteen
Speaker 4: you know, trillion dollars in assets under management in these funds.
Speaker 4: Investors need to know what's happening here. But the funds
Speaker 4: come back and say, look, we're dealing with sophistic get investors.
Speaker 4: We already give them these types of disclosures anyway. So
Speaker 4: I'm not exactly sure that the you know, this was
Speaker 4: really like, I think the most important rule that the
Speaker 4: SEC should have been working on, but obviously it's one
Speaker 4: of the biggest and more dramatic impacts to the fun industry.
Speaker 4: This is something the SEC has wanted to do for
Speaker 4: a while now, and you know, we will see when
Speaker 4: we get the final language, when these funds have to
Speaker 4: start complying with it. I should also note that if
Speaker 4: you are a non US fund, as long as you
Speaker 4: take in US money or US clients, you're gonna have
Speaker 4: to adhere to this as well.
Speaker 2: I mean, if they already give them these disclosures, I
Speaker 2: can't imagine why compliance costs would climb, right, If you
Speaker 2: already are transparent about your fees and expenses, then you
Speaker 2: should just be able to publish that. It seems like
Speaker 2: they might be fighting back more Nathan, against rules that
Speaker 2: would prohibit them from allowing favored investors to cash out
Speaker 2: more easily than others.
Speaker 5: Yeah.
Speaker 4: Absolutely. I mean for the big funds, the compliance costs
Speaker 4: looks they already do this, But for a lot of
Speaker 4: smaller funds out there, they don't have this type of
Speaker 4: legal compliance expertise. They're certainly going to have to ramp
Speaker 4: up there. But like you said before, I mean this
Speaker 4: the biggest issue here is the comparison angle. You know,
Speaker 4: if there is some type of secret deal that's going
Speaker 4: on out there, well that deal now needs to be
Speaker 4: made public. And if you're going to compare against one
Speaker 4: fund versus the other, and some of these comparisons also
Speaker 4: have to go down to the portfolio levels, so not
Speaker 4: just the entity level. You know, if you're looking to
Speaker 4: invest in a hedge fund or a private equity fund,
Speaker 4: anytime soon, you're going to get a lot more information
Speaker 4: on how to make those decisions, and competition is going
Speaker 4: to increase as a result. You know, we've seen some
Speaker 4: economic evidence. I'm not sure if I actually buy into this,
Speaker 4: but we've seen some economic evidence cited by the SEC
Speaker 4: that fees will go down as a result of this.
Speaker 4: But you know that will have to be played out
Speaker 4: over the next few years.
Speaker 1: Yeah, exactly, all right, Nathan, Hey, thanks so much for
Speaker 1: joining us. Nathan Dean, He's a senior US policy analyst
Speaker 1: with Bloomberg Intelligence. Absolutely spot on this news.
Speaker 6: Here.
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Speaker 1: Eric Adelberg, mortgage backed security strategist for Bloomberg Intelligence, joins
Speaker 1: us Erica. We had some new home sales data come
Speaker 1: out today. What's what's your sense of what we saw
Speaker 1: builders are building?
Speaker 8: It looks like, yeah, you know, it actually surprised me,
Speaker 8: we saw I mean, to be fair, this is actually
Speaker 8: reflecting mortgage prices probably that were maybe prior to the
Speaker 8: latest jump up. Yep, but we're still seeing the share
Speaker 8: of new homes increasing. They're about sixteen percent of total
Speaker 8: sales now. And what the things that surprised me today?
Speaker 1: So sixteen sorry a round sixteen percent of total sales?
Speaker 1: Is that higher than average? Lower than average?
Speaker 5: Were we?
Speaker 8: Yeah? It was down to like six percent like a
Speaker 8: couple of years ago.
Speaker 1: Right, and so the long term average new homes built
Speaker 1: maybe ten percent of the stuff being bought and sold. Yeah, okay,
Speaker 1: so now it's higher. Yeah, because Matt's not going to
Speaker 1: sell his west Chester retreat because he'd have to.
Speaker 3: Goes I locked in at three and a quarter percent?
Speaker 5: Are right?
Speaker 1: So that's the problem, right, or that's the issue.
Speaker 8: Well, the other things that surprised me were the fact
Speaker 8: that the home prices actually, and these are a bit
Speaker 8: of more of a jumpy series than existing home prices.
Speaker 8: But existing home prices and new home prices in the
Speaker 8: last month's report were more like median prices, call it,
Speaker 8: were more or less equal. Usually new homes traded about
Speaker 8: twenty five to thirty percent higher than existing homes, and
Speaker 8: then this month that completely reversed. So the median price
Speaker 8: for the new homes is now like four thirty six
Speaker 8: and for the existing homes now back to four h six.
Speaker 8: The existing home price fell a little bit, as you'd
Speaker 8: expect season late, but new home prices actually jumped a
Speaker 8: bunch from four to fifteen last month to four to
Speaker 8: thirty six this month, So that's interesting. So it's not
Speaker 8: just that they're cutting prices.
Speaker 2: Erica, what is the your mortgage rate you look at,
Speaker 2: because obviously it varies depending on a borrower's credit quality
Speaker 2: and you know, the asset, et cetera. But I can see,
Speaker 2: you know, in official Bloomberg stories, a much lower rate
Speaker 2: sited than I see on the bank rate thirty year
Speaker 2: mortgage right, So we're saying seven point three percent right
Speaker 2: now and sounding an alarm. Meanwhile, the bank rate is
Speaker 2: over seven point six. Yeah, what's the rate that you
Speaker 2: look at, and why.
Speaker 8: I do like to look at bank rate because it's
Speaker 8: available daily Mortgage news daily also. But the big difference
Speaker 8: when you're looking at mortgage rates is looking at what
Speaker 8: they call effective rates, what you're paying if you hadn't
Speaker 8: paid points, versus what the contract rate rates, which is
Speaker 8: where a lot of people actually take out the mortgage
Speaker 8: because they are paying points. So once you adjust for
Speaker 8: the points and look at a no point adjusted rate,
Speaker 8: it's always closer to the bank rate number. So even
Speaker 8: even on the NBA thirty year fixing an index that
Speaker 8: they released today, we have an index in Bloomberg that
Speaker 8: they also release called MB thirty er effective rate and
Speaker 8: similarly we back out and no point freddimack rate and
Speaker 8: those are all above seven and a half percent. Now,
Speaker 8: so yeah, mortgage borers might be able to get a
Speaker 8: lower rate, but that's because they or somebody else is
Speaker 8: paying points. Now, one of the reasons new home sales
Speaker 8: has been doing as well as it has is because
Speaker 8: the builders have come up with this great strategy where
Speaker 8: they're actually buying down the mortgage rate for a lot
Speaker 8: of their buyers. So until recently, some buyers were able
Speaker 8: to get mortgage rates closer to five percent. It's a
Speaker 8: good deal for the home builder. They don't have to
Speaker 8: reduce their prices, and you know, make other people who
Speaker 8: want prices on homes that higher prices mad. But at
Speaker 8: the same time it makes it more affordable for new
Speaker 8: home buyers.
Speaker 3: So the builders.
Speaker 2: It's not like the builders are extending lines of credit
Speaker 2: to buyers. They're not giving mortgages to buyers. They're just
Speaker 2: turning to the bank and saying, we'll buy points for them.
Speaker 8: I mean, in some cases they have a relationship with
Speaker 8: a lender. In a few cases they actually can probably
Speaker 8: offer them mortgage. Have their own financing arms, they have
Speaker 8: their own financing arms.
Speaker 1: It's been a tough month for fixed income, really tough
Speaker 1: month for mortgage of backed securities, off two point six percent.
Speaker 1: What's it like out there in the NBS market these.
Speaker 8: Days, It's it's probably pretty tough for some investors. It's
Speaker 8: an interesting time for strategists. But one of the things
Speaker 8: I'm looking at this morning is actually just how different
Speaker 8: the current coupon, which is kind of where things are
Speaker 8: being issued, is versus the mortgage index. And while the
Speaker 8: mortgage index has underperformed because it's very long duration now,
Speaker 8: because people are just sitting on their mortgages forever.
Speaker 1: Matt I will be on it for years.
Speaker 8: So from a duration standpoint, it's going to trade pretty
Speaker 8: similarly to the tenure treasury, if you will. In fact,
Speaker 8: mortgage spreads for the whole index aren't widening that much.
Speaker 8: The same divergence between what you said about where mortgages
Speaker 8: are being issued right now versus what most people have
Speaker 8: is reflected in the mortgage index right now. The current
Speaker 8: coupon or where the yield egals to the coupon around
Speaker 8: par is about six percent for the first time again
Speaker 8: for many, many years. But the mortgage index coupon is
Speaker 8: below three percent. All right, So that yeah, I mean,
Speaker 8: I'm not saying it's not underforming, but yeah.
Speaker 1: All right, Erica, great stuff again, Erica Adelberg, NBS Strategists,
Speaker 1: Bloomberg Intelligence joining us here.
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Speaker 1: So it looks like BAA slash Merrill. They're trying to
Speaker 1: make a push on across their trading business. What did
Speaker 1: you find out?
Speaker 9: So it's funny baa second largest bank by assets, but
Speaker 9: when you talk to folks cross Wall Street about trading,
Speaker 9: they're not the first name that comes up in conversation.
Speaker 9: And really that just comes down to their risk tolerance.
Speaker 9: Since the financial crisis, since they bought Merrill, since there's
Speaker 9: been so much integration, they've kind of held back. And
Speaker 9: while they're still serving clients and they are one of
Speaker 9: the largest firms that is trading with buyside investors, they're
Speaker 9: not taking as much market share as let's say JP Morgan,
Speaker 9: But that's starting to change. About three years ago they
Speaker 9: named a new head, Jim Damar. He took over for
Speaker 9: Tom Montag who was really running that trading business along
Speaker 9: with investment banking. And in the last three years they've
Speaker 9: added some talent, some key talent from those firms that
Speaker 9: take risk your bets, from Goldman Morgan Stanley, and they've
Speaker 9: also been able to get more capital. They went all
Speaker 9: the way up to CEO moynihan to their head of
Speaker 9: risk to ask for basically more room to run. And
Speaker 9: while they're still in a narrower risk tolerance than others
Speaker 9: with more capital and with these key hires, they've been
Speaker 9: able to slowly chip away and gain more market share
Speaker 9: over the last two three years.
Speaker 2: So have they built up a bigger team? I know
Speaker 2: there is a speech at least I read in a
Speaker 2: Bloomberg story that there was a speech last year where
Speaker 2: Damar said, listen, if you're not willing to give it
Speaker 2: your all and you work your butt off to build
Speaker 2: this business, you might want to work somewhere else.
Speaker 9: Yeah, exactly So about a year ago is when he
Speaker 9: gave that speech, and it was after second quarter results
Speaker 9: where some of the other banks had posted pretty impressive
Speaker 9: results within fixed income. Especially this was after the war
Speaker 9: in Ukraine had broke out, and you had banks on
Speaker 9: Wall Street taking advantage of all the volatility. They were
Speaker 9: helping clients place bets tied to Russia. Bank of America
Speaker 9: did not. They had a mandate from high up that said,
Speaker 9: you guys got to hang back. You can't get involved
Speaker 9: in these types of trades. You can help clients unwind
Speaker 9: their positions, but you can't help people profit and we
Speaker 9: can't profit off of this war. So this was why
Speaker 9: Jim was getting up and saying, hey, we have progress
Speaker 9: that we still have to make. And that comment was
Speaker 9: made to his group, the entire trading team, to say,
Speaker 9: if you're not willing to put your best foot forward
Speaker 9: and to act, maybe not aggressively in the form of
Speaker 9: taking more risk, but you got to be willing to
Speaker 9: be top three, then yeah, maybe you should look elsewhere.
Speaker 9: And he's not making this statement to say here's the
Speaker 9: door and you should be going to somewhere else get
Speaker 9: out of here. He's just saying we want to have
Speaker 9: people that really want to be here and that we
Speaker 9: want to make headway. And one year later they have.
Speaker 9: They've shown that their second quarter results this year, so
Speaker 9: this is one year after the the kind of tepid
Speaker 9: results they saw year ago. They were up ten percent
Speaker 9: when all the other banks on Wall Street were down.
Speaker 9: Now that's also because you're comparing it to the record
Speaker 9: quarter again a year ago post the war in Ukraine.
Speaker 10: So it's it's.
Speaker 9: Really going to be a story that we'll keep tracking
Speaker 9: and if this group can continue to maintain the growth
Speaker 9: and the market share that they have chipped away at again,
Speaker 9: then it might be something that they are able to sustain.
Speaker 9: But that's still a question mark. It's not a foregone
Speaker 9: furgone conclusion.
Speaker 5: You know.
Speaker 1: When I was at Meryl, we were going to go
Speaker 1: pitch a company, a public company, on a follow on offering,
Speaker 1: and that one of the things was we wanted to
Speaker 1: be a top trader in stock. We want to say
Speaker 1: we were your number number one trade, which we weren't
Speaker 1: really like three, third, third or fourth. So I went down.
Speaker 1: My job was to go down and talk to the trader.
Speaker 1: It was probably my same age, young and they said,
Speaker 1: you know, if you can, we'd appreciate it if you
Speaker 1: could take a bigger profile on XYZ stock from that
Speaker 1: day forward until we pitched the IP in like two months.
Speaker 1: Number one, every you're singing every single day trading the
Speaker 1: stock and not just a commitment of capital, you know,
Speaker 1: So that trader that desk was willing to put up
Speaker 1: to capital to make our jobs of getting the follow
Speaker 1: and offering easier, which we did get and made a
Speaker 1: big print. Looking at the comp function, No for the stock,
Speaker 1: Bab's kind of flat over the last five years, Morgan
Speaker 1: Stanley up fifteen percent, Goldman Sacks up nine percent. So
Speaker 1: if you go to Brian moynihan, now do you feel
Speaker 1: like if I'm a trader and I asked for some
Speaker 1: more capital, you think he's going to be more open
Speaker 1: to that.
Speaker 8: So there's a lot that's.
Speaker 9: Changed in the last year and capital has become more
Speaker 9: constrained across Wall Street. But the bank, if if you
Speaker 9: were to ask them, I'm sure that they would say,
Speaker 9: we have enough cash on the balance sheet. They will
Speaker 9: show you that with the numbers, and they will say
Speaker 9: that if the capital is needed and the group, whether
Speaker 9: it's the trading group or the investment banking group, comes
Speaker 9: to us and has a good pitch and they explain
Speaker 9: why they need what they need, we'll give it to them.
Speaker 9: But I think that that's probably getting harder to do.
Speaker 9: Those pitches need to be pretty clear, pretty persuasive. But
Speaker 9: what you just described is exactly what they're trying to
Speaker 9: focus on, which is making sure that the groups within
Speaker 9: this huge organization are working together. So if you have
Speaker 9: someone in investment banking that's working with a client, it's
Speaker 9: a corporate client, and then they need to hedge their
Speaker 9: risks whether it's their currency risk or their rates, They're
Speaker 9: going to want to say, hey, you should talk to
Speaker 9: our trader who can help you out. And I think
Speaker 9: that when you have such a big organization this is
Speaker 9: not specific to be of a but anywhere often communication
Speaker 9: lines can break down. So they're just trying to communicate
Speaker 9: better in order to either get clients to interact with
Speaker 9: them more or to tap new clients that they might
Speaker 9: not even know that they can be working with and
Speaker 9: that they should be working with.
Speaker 3: So who's the best and biggest trading desk on the
Speaker 3: street and.
Speaker 9: What do they do right well, right now, JP Morgan
Speaker 9: does have the most market share and that's been kind
Speaker 9: of the same for as long as I've tracked.
Speaker 1: It's really which is in the long time, No, it's long,
Speaker 1: but yet they have the big capital behind them. It's
Speaker 1: all about how much capital you can put up. So
Speaker 1: JPM Morgan gold and Sacks Morgan Stanley, you know, those
Speaker 1: are things. And if you're Merrill Lynch and you've got
Speaker 1: the Bank of America balance sheet, but Catherine is just
Speaker 1: reporting less less ready to put up you know, some
Speaker 1: incremental capital here, but maybe that's changing a little bit. So,
Speaker 1: but it's good stuff. I remember, it just took me
Speaker 1: like a forty five minutes to find where this kid
Speaker 1: sat on the trading floor. That's how big the Maryland's
Speaker 1: trading floor was and how many people were there. I
Speaker 1: had to find it. You know, it's crazy, but anyway,
Speaker 1: that was a good, good story. Catherine, thanks so much
Speaker 1: for the reporting here. That's story just jumped off the
Speaker 1: termino for me this morning. Katherine Dherty, Finance reporter for
Speaker 1: Bloomberg News, Bank of America, Merrill Lynch, the thundering Herd
Speaker 1: of Merrill Lynch, maybe stepping up a little bit more
Speaker 1: on the margin.
Speaker 7: You're listening to the team Ken's are Live program Bloomberg
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Speaker 1: The question I have is, why is all these countries
Speaker 1: tripping over themselves to get to the moon. Did we
Speaker 1: do that like more than fifty years ago? I don't
Speaker 1: know what the big deal is, but our next guest
Speaker 1: will help us out here. Lauren Grush, Space reporter. That's right,
Speaker 1: Bloomberg has a Space report. Why because we have twenty
Speaker 1: four hundred journalists accrown around the world.
Speaker 3: We cover everything and fifty countries.
Speaker 2: But also, I mean it's a huge and emerging.
Speaker 3: It's a business industry. I mean, look, I think.
Speaker 1: It's not just NASA anymore.
Speaker 2: Let me ask Lauren. I'm pretty sure, Lauren. First of all, hello,
Speaker 2: welcome to the program. Thanks for joining us. Didn't Elon
Speaker 2: Musk and SpaceX just raise new money at an even
Speaker 2: higher evaluation in what is for most startups of down market?
Speaker 11: They did, But they also have quite a lot on
Speaker 11: their plate in terms of what they're trying to develop.
Speaker 11: You know, they're working on Starship, which is this massive
Speaker 11: vehicle supposed to take humans and cargo into deep space
Speaker 11: and to the Moon, as you guys have been talking about.
Speaker 11: And they're also expanding when it comes to their Starlink
Speaker 11: initiative as well.
Speaker 8: So they have quite a lot to work on.
Speaker 11: And so that's ultimately why part of the reason why
Speaker 11: they did that raise.
Speaker 1: All right, Laurence, So help me out here. What's the
Speaker 1: attraction to the south pole of the Moon? We had
Speaker 1: Russia crash didn't quite do it, but India today reported
Speaker 1: a successful landing. What are they after right.
Speaker 11: So, the south pole of the Moon has been a
Speaker 11: bit of a tantalizing place for scientists over the last
Speaker 11: few years because more and more research has come out
Speaker 11: and evidence has come out that the region might have
Speaker 11: large quantities of water ice and these permanently shadowed cratered regions,
Speaker 11: so areas that never see the sun, they get extremely cold,
Speaker 11: and that's tantalizing for people, especially those looking to send
Speaker 11: humans to the Moon, because there's the possibility that we
Speaker 11: could mine this water ice and use it as resources.
Speaker 11: We could use it as drinking water, could use it
Speaker 11: as water for plants if we wanted to grow crops
Speaker 11: on the Moon for lunar habitat, and it can also
Speaker 11: be used as rocket fuel. You can break apart water
Speaker 11: into its constituents and to make it into fuel that
Speaker 11: could be used to send rockets off of the Moon.
Speaker 8: The issue is we just.
Speaker 11: Don't know what kind of form the water ice is in,
Speaker 11: how much is there, So we need to get there
Speaker 11: in order to prospect and to see, you know, is
Speaker 11: this a viable option to use for future exploration initiatives.
Speaker 2: So older listeners, Lauren are going to be wondering, is
Speaker 2: this the dark side of the moon. Nice, I don't know,
Speaker 2: like about the polarity, and apparently one side of the
Speaker 2: moon never what never faces the Earth or what's the.
Speaker 1: Story with this?
Speaker 11: So it's not the dark side of the moon. There
Speaker 11: actually is no dark side of the moon. I hate
Speaker 11: to break that news every what. Yes, you are correct, though,
Speaker 11: there is a far side of the Moon that we
Speaker 11: never see from Earth because it is tidally the Moon
Speaker 11: is tidally locked, and so it is constantly facing our
Speaker 11: planet in one direction. So you might be very familiar
Speaker 11: with the face that faces us.
Speaker 8: You may not be so.
Speaker 3: Familiar with the face and the south pole is where
Speaker 3: is that? Do we see that one? Or do we
Speaker 3: see parts of it?
Speaker 11: But yes, it is within our part of it is
Speaker 11: within our site.
Speaker 1: All right.
Speaker 3: Listen, Tucker's laughing at us because he knows all this stuff.
Speaker 1: He does two videos on this. Yeah, yeah, all right. Lauren,
Speaker 1: you're a space reporter. What are the big stories that
Speaker 1: you're kind of following. What are the themes that you're
Speaker 1: following as it relates to your space beat.
Speaker 8: Well, you know, there's quite a bit going on.
Speaker 11: As you've mentioned, the moon is a very popular place
Speaker 11: these days, so you know, it's not just India, not
Speaker 11: just Russia that are looking to go back. The US
Speaker 11: is actively looking to go back to the Moon. A
Speaker 11: lot of those efforts stem from the from NASA's Artemis program,
Speaker 11: which is a concerted f to send the first woman
Speaker 11: in the first person of color to the surface.
Speaker 5: Of the Moon.
Speaker 11: Right now, they're targeting landing in twenty twenty five. I
Speaker 11: think that is extremely ambitious and doubtful that it will
Speaker 11: be achieved, but that is the outward goal at the moment.
Speaker 11: And then through that initiative, there are a lot of
Speaker 11: private companies that are also hoping to send their robotic
Speaker 11: spacecraft to the Moon. So we have astrobotic and intuitive
Speaker 11: machines who are also trying to reach this region of
Speaker 11: the Moon with their own uncrude landers, and those are
Speaker 11: supposed to happen. Those are supposed to launch before the
Speaker 11: end of the year.
Speaker 2: So hard, I don't get you know, by twenty twenty five,
Speaker 2: couldn't we do it next week?
Speaker 3: We did it in the sixties.
Speaker 11: I hate to breakage everyone, but it's still quite hard
Speaker 11: to reach the Moon.
Speaker 8: You know, Yes, it is.
Speaker 11: Something that we did in the sixties, but you have
Speaker 11: to understand we were we had increased NASA's budget significantly.
Speaker 11: At the time. There was an extreme focus on reaching
Speaker 11: the Moon during that time. You know, we put a
Speaker 11: lot of resources into it, and so now we don't
Speaker 11: really have that same sense of urgency and NASA is
Speaker 11: working with a much lower budget than it had at
Speaker 11: the time the space race was going on.
Speaker 2: But my Nintendo, we has more computing power than NASA
Speaker 2: did back then.
Speaker 3: I mean, that's true, that's.
Speaker 11: True, and that's and that's ultimately why we're making a
Speaker 11: lot of strides in terms of, you know, who is
Speaker 11: able to reach the Moon with these with those companies
Speaker 11: I just mentioned, they're hoping to be the first commercial
Speaker 11: companies to reach the surface of the Moon. That title
Speaker 11: has not been claimed yet so far, it's only been
Speaker 11: Nation States. But ultimately, you know, we are getting there.
Speaker 11: It's just taking a while, and we're trying to do
Speaker 11: it in a in a smarter way that doesn't rely on,
Speaker 11: you know, that big influx of cash.
Speaker 1: So Lauren, of all the private companies out there, because
Speaker 1: that's what's different When I was a kid and we're
Speaker 1: all fixated on NASA and we all want to be astronauts.
Speaker 1: Back in the day, private space travel. Are there viable
Speaker 1: economic models out there? I mean, how do any of
Speaker 1: these companies? Is it space tourism? Is it just taking
Speaker 1: garbage out there? I mean, what are we doing?
Speaker 11: I mean, I think that's ultimately the prime question right now,
Speaker 11: as more and more companies are trying to turn space
Speaker 11: into a business. Can these businesses make money? The answer
Speaker 11: we're getting from the few companies that have gone public
Speaker 11: is not a lot. You know, they're bringing some are
Speaker 11: bringing in revenue, some are not even bringing in revenue.
Speaker 11: It's a very hard market to break through in because
Speaker 11: it does require a lot of capital upfront, and to
Speaker 11: develop these vehicles and these capabilities takes many, many years.
Speaker 11: It's besought with delays, and so you know, we are
Speaker 11: in an era that we're trying to prove that we can,
Speaker 11: you know, make these companies into viable businesses. But there's
Speaker 11: going to be a lot of casualties along the way,
Speaker 11: business casualties, not human casualties. And you know, it's I
Speaker 11: think it still remains to be seen if these companies
Speaker 11: can really turn a significant product.
Speaker 1: And Elon Musk, Jeff Bezos, you know, a couple of gajillionaires.
Speaker 1: They're all in on this business. I guess it kind
Speaker 1: of feels for a lot of to a lot of
Speaker 1: critics that it's just kind of a billionaire's game out
Speaker 1: there for for space. And you know, is there any
Speaker 1: other real model out there?
Speaker 11: Well, you have to understand, we've been we've been in
Speaker 11: the business of space for a really long time. The
Speaker 11: earlier models, uh, focused more on defense contractors, you know,
Speaker 11: building these vehicles and helped with NASA, but they were
Speaker 11: not as vertically integrated as some of these newer players.
Speaker 4: You know.
Speaker 11: That seems to be one of the bigger changes that
Speaker 11: and Jeff and these other companies are implementing his vertical integration,
Speaker 11: so keeping everything in house. But as I mentioned, you know,
Speaker 11: these companies require a lot of capital, and so that's
Speaker 11: ultimately what they are able to help with, you know,
Speaker 11: the billionaires is being able to give that kind of
Speaker 11: big cash injection up front and to help out whenever
Speaker 11: you know, money is tight.
Speaker 1: All right, Lauren, you're a graduate of the University of Texas.
Speaker 1: Are you one of those crazy Longhorn alumni?
Speaker 11: I'm sorry, are we crazy?
Speaker 5: I think.
Speaker 11: Regular college graduates?
Speaker 1: Okay, because we have a Jess Metton who comes in
Speaker 1: here and does a lot of work with us reporting
Speaker 1: on the equities at Texas A and m GRAD. So
Speaker 1: she's the only in her family.
Speaker 8: I can't I can't speak to that.
Speaker 2: Okay, Hey, what's the next cool launch you're gonna go watch?
Speaker 3: Do you go down there and watch those?
Speaker 8: I do.
Speaker 11: I've I've been to quite a few, you know. Kennedy's
Speaker 11: Space Centers kind of my second home sometimes. I'm in Austin,
Speaker 11: Texas though, and SpaceX has been building their Starship vehicle
Speaker 11: down in Bocachica, which is on the border of Texas
Speaker 11: and Mexico, and I have been there to see their
Speaker 11: first test launch. We're gearing up for that second test launch.
Speaker 11: SpaceX is going through the motions of kind of fixing
Speaker 11: what went wrong during the first one. They're undergoing tests,
Speaker 11: but signs seem to be pointing that we could be
Speaker 11: seeing another test launch from Texas in the near future.
Speaker 11: So we're just getting ready for that and seeing how
Speaker 11: that will go.
Speaker 1: All right, Lauren Grushy, Space reporter, Bloomberg News. Hook them horns, right,
Speaker 1: another big football season coming up, and I'm sure they're
Speaker 1: all fired up down there. I love that we have
Speaker 1: a space reporter that's so cool.
Speaker 7: You're listening to the tape cans are live program Bloomberg
Speaker 7: Markets weekdays at ten am Eastern on Bloomberg Radio, the
Speaker 7: tune in app, Bloomberg dot Com, and.
Speaker 5: The Bloomberg Business App.
Speaker 7: You can also listen live on Amazon Alexa from our
Speaker 7: flagship New York station. Just say Alexa, you play Bloomberg eleven.
Speaker 1: Matt Miller, Paul swing here in a Bloomberg Interactive worker studio.
Speaker 1: Want to get right to our next guest, because there's
Speaker 1: a million ways we can go. Ronnie has set Home
Speaker 1: Joints us. She's a managing partner of set Home Law Group.
Speaker 1: A lot of things to talk about, Ronnie, but I
Speaker 1: like to start with something near and dear to my heart,
Speaker 1: which is the media companies in the Hollywood studios strikes
Speaker 1: with the writers and the actors, and where are we
Speaker 1: on this thing? Because it seems like both sides are
Speaker 1: really entrenched. Although I believe the studios did come with
Speaker 1: a proposal that seemed reasonable to me, but I'm not
Speaker 1: in vob so well.
Speaker 12: I think that both are holding pretty steadfast in the
Speaker 12: direction that they want to go. I don't think anything
Speaker 12: has been resolved at all since I've last been here
Speaker 12: or since the strike went underway. It is true that
Speaker 12: the studios did propose some changes. However, I believe the
Speaker 12: union wouldn't come to the table, which is, you know,
Speaker 12: a way of rejecting it outright.
Speaker 2: Yeah, and so these so there's been no talks. They
Speaker 2: haven't been in the same room officially, I don't believe.
Speaker 1: So, no, no, But they came back with what I
Speaker 1: thought were certainly I don't know what the word is,
Speaker 1: but they were substantive. They addressed a lot of issues.
Speaker 1: Whether they went far enough as the union, I don't know.
Speaker 1: But if I were the studios and I put this
Speaker 1: on the table, I would certainly expect a professional response,
Speaker 1: wouldn't I? You would, And I'm not a negotiator.
Speaker 12: Yeah, the negotiating table has to be went to in
Speaker 12: good faith. Under the National Labor Relations Board rules, you
Speaker 12: can't just refuse to engage in any kind of discord. However,
Speaker 12: if someone comes back to you with what you deem
Speaker 12: is a wholly unreasonable solution, you can take the position
Speaker 12: that I guess that's what the union is taking at
Speaker 12: this time. But you're right, everything was addressed, whether or
Speaker 12: not it was addressed properly or thoroughly enough for the union.
Speaker 3: I guess the answer is no, Ronnie.
Speaker 2: Let's just reset for listeners who haven't been following this
Speaker 2: very closely. You work with the actors side, and what
Speaker 2: are the demands that they've made, you know, just you
Speaker 2: know elementary in sort of the elementary demands.
Speaker 3: What exactly do they want?
Speaker 12: Well, I think some of the celebrities who I represent
Speaker 12: their individuals, just to be clear for the listeners, they
Speaker 12: want to protect themselves and their image. They don't want
Speaker 12: you to be able to take whatever image you've seen
Speaker 12: in a movie, a TV show or whatnot and just
Speaker 12: change it, right. I mean, AI can do so much
Speaker 12: we don't even realize as the viewers. But you don't
Speaker 12: need to take additional takes. For example, you can just
Speaker 12: use whatever take was provided and then make whatever changes
Speaker 12: you want to change, as long as you have the
Speaker 12: image of the person, the motion of the person, and
Speaker 12: the tone and sound of the person, which clearly you
Speaker 12: would have when you take your first take. So I
Speaker 12: think they want to protect themselves from being seen incorrectly,
Speaker 12: right because who knows what you're going to do with
Speaker 12: the image. But also it's about money as well. Every
Speaker 12: time their image is used, they want to receive a royalty.
Speaker 12: And I think that's like a huge debate right now,
Speaker 12: you know what are we paying for exactly? And typically
Speaker 12: contracts do state we control this image that you've provided
Speaker 12: us with whatever it is for the show, for anything
Speaker 12: in whatever medium exists now or shall exist. So we
Speaker 12: don't even know what else is coming after a hour.
Speaker 1: Well that's even that's an I would say most content areas.
Speaker 1: So for example, as a research channels Stall Wall Street,
Speaker 1: I did not own my research. It belonged to the
Speaker 1: firm I work for the models I created, the earnings
Speaker 1: models belong not to me but to the company. And
Speaker 1: so what you'd see before any analyst went from company
Speaker 1: A to company B is he or she would take
Speaker 1: their earnings models which they created, download them to the
Speaker 1: little floppy disc so they could take them to the
Speaker 1: next spot, which was a no no, But everybody does it.
Speaker 12: If you do that, I might send you a nasty letter.
Speaker 3: Yes, Paul should maybe hire you.
Speaker 1: Yes exactly, But so that's isn't that kind of is
Speaker 1: that law already created and aren't exists, We're just now
Speaker 1: applying it to a different medium. I guess yes, in.
Speaker 12: A way, that is true. But no one anticipated what
Speaker 12: you can do with this technology. So for example, if
Speaker 12: you sent me research and I, let's say I discarded
Speaker 12: it or I changed it, I may not attribute it
Speaker 12: to you. And so your your your research findings, if
Speaker 12: they were not what I wanted, You're you're left out
Speaker 12: of it. Nobody knows about it.
Speaker 8: Here.
Speaker 12: It's your picture, it's your voice, it's your movement, and
Speaker 12: we're doing something with it and you may or may
Speaker 12: just may or may not agree with.
Speaker 2: It, right, So that's something that's one of the things
Speaker 2: that they want you to change. Then on the money side,
Speaker 2: you know, there's I think we don't understand exactly how
Speaker 2: much money. For example, sag Aftra estimates that these streaming
Speaker 2: companies are making. Their representative was telling Paul that she
Speaker 2: thinks they're making thirty billion dollars a year in profit,
Speaker 2: but when we look at these earnings reports, that's not
Speaker 2: readily apparent. So is that something that needs to be
Speaker 2: solved how much money they're making off streaming, or does
Speaker 2: it just not matter to your clients they want a
Speaker 2: bigger take anyway.
Speaker 12: Well, honestly, money's always a factor. So I think, of
Speaker 12: course that does matter, and I think that there's I
Speaker 12: don't know if it's a worldview, but certainly a US
Speaker 12: view that the gap between the owners and in this
Speaker 12: case they're not employees, but we'll just use that analogy
Speaker 12: should be smaller.
Speaker 1: All right, So is this something like when we think
Speaker 1: about AI and all the uses and therefore misuses that
Speaker 1: could be had of AI. Does law need to be created,
Speaker 1: do you think? Or just existing laws applied to a
Speaker 1: much wider view now because of AI.
Speaker 12: I think laws should be created, but I think it's
Speaker 12: also too early. Who really can stand up and say
Speaker 12: I thoroughly understand this technology and how it works. You
Speaker 12: can't create a law around something you don't comprehend.
Speaker 1: And what makes these discussions with the actors and the
Speaker 1: writers is you know, I think an executive could stand up.
Speaker 1: I would defend a media executive standing up saying I
Speaker 1: don't know what this stuff is worth. I don't know
Speaker 1: how we're going to generate revenue off of this stuff.
Speaker 1: All I can tell you is when we think it up,
Speaker 1: you'll get your cut. So you write up the language
Speaker 1: that does that is what.
Speaker 5: I would do.
Speaker 12: Yes, that could be one way, but it's always the
Speaker 12: devil that's, you know, in details, and everybody wants those details.
Speaker 12: But I think you can start from a contractual position
Speaker 12: moving forward that says, I'm not giving you rights to
Speaker 12: my entire likeness. I'm only giving your rights to this
Speaker 12: particular season movie.
Speaker 3: Whatever.
Speaker 12: We can define it and slice it differently.
Speaker 1: I don't know. I think it's something well, I don't know.
Speaker 1: I think there's language. I think there's language out there
Speaker 1: that they can get things done, but it seems like
Speaker 1: they're not a lot of movement there. So we'll keep
Speaker 1: on on top of this thing in Hollywood, the whole
Speaker 1: AI issue, which is just you know, mind numbing to
Speaker 1: think about where this could all go and the applications
Speaker 1: of AI across a range of industries, and the lawyer's
Speaker 1: got to figure it out.
Speaker 2: Rania set Home, like Ronia exactly great to have you
Speaker 2: in the studio. Ronia, thanks so much for joining us.
Speaker 1: It's awesome. Ronnie set Home managing a partner at set
Speaker 1: Home Law Group, live in a Bloomberg Interactive broker's studio.
Speaker 7: You're listening to the tape Can's Are Live program Bloomberg
Speaker 7: Markets weekdays at ten am Eastern on Bloomberg Radio, the
Speaker 7: tune in app, Bloomberg dot Com, and the.
Speaker 5: Bloomberg Business app.
Speaker 7: You can also listen live on Amazon Alexa from our
Speaker 7: flagship New York station, Just say Alexa play Bloomberg eleven thirty.
Speaker 1: Scott Kelly joins us. He's a founder and CEO of
Speaker 1: ATOS Capital real Estate. But Scott, thanks for coming into
Speaker 1: our Bloomberg Interactive Broker studio. But I want to this dude.
Speaker 1: Was that Morgan Stanley, Morgan Stanley, Dean Witterard, Dean Whitdter. Now,
Speaker 1: for people who don't know of the investment banks, Morgan
Speaker 1: Stanley has always been is the biggest player I think
Speaker 1: in commercial real estate. When I think about investment banks
Speaker 1: swinging and around in commercial real estate, I think of
Speaker 1: these guys. So you were there during the heyday. You're
Speaker 1: now at Ato's Capital. Thanks for joining us. You're welcome,
Speaker 1: all right, commercial real Estate. I walk to Penn Station
Speaker 1: every day. Nobody's in their office. It's dark. I've never
Speaker 1: seen it like this. Nobody's ever seen it like this.
Speaker 1: But at some point some smart people are going to
Speaker 1: come in and say enough, this is where you start banking.
Speaker 1: You talk to us, how you guys view the commercial
Speaker 1: real estate business.
Speaker 6: Well, I think there are a number of factors that
Speaker 6: are cutting against any kind of rapid improvement in the
Speaker 6: commercial real estate.
Speaker 2: And we're talking specifically office here, right, Well, yeah, and.
Speaker 6: More generally, but basically, real estate's a cyclical business. Office
Speaker 6: is probably the most cyclical of all of that in retail,
Speaker 6: and I think everybody agrees, whether it's a soft landing
Speaker 6: or hard landing, we're at a difficult time in the
Speaker 6: economic cycle. Second, there are huge secular and demographic shifts.
Speaker 6: One of the reasons New York offices are emptier because
Speaker 6: a lot of people are leaving New York. And again,
Speaker 6: those shifts impact different real estate classes vastly differently. So
Speaker 6: as an example, office and retail have been hurt by
Speaker 6: the secular shift to work from home and online shopping,
Speaker 6: and warehouses logistics facilities have done well.
Speaker 10: So Scott, let's throw in rates because it's not just
Speaker 10: these demographics. It's also you're making the point that the
Speaker 10: cost of capital or the Fed fund rate has basically
Speaker 10: gone up five hundred percent. I mean, that's got to
Speaker 10: create a lot of pain.
Speaker 6: Well, I think there are two aspects. So that one
Speaker 6: you've got an unbelievable amount of commercial real estate debt maturity,
Speaker 6: something like set one hundred and fifty billion in the
Speaker 6: next year and something like one point seven trillion in
Speaker 6: the next four years. And a lot of those loans
Speaker 6: were made in essentially a zero interest rate environment, and
Speaker 6: they're not refinancible at seven percent, so there's just not
Speaker 6: So you've got this enormous amount of debt maturity coming
Speaker 6: very high interest rates, and it's going to create a
Speaker 6: I think a great investing opportunity.
Speaker 3: In a reset.
Speaker 2: I mean, I have happened to be involved in a
Speaker 2: small family real estate company in Columbus in Columbus, Ohio,
Speaker 2: and we have a lot of office space, mostly medical, thankfully,
Speaker 2: and we have also a lot of student housing for
Speaker 2: the Ohio State University. But I know that, you know,
Speaker 2: our refis are going to be very difficult at these levels,
Speaker 2: and I'm hoping that, you know, we can get through it.
Speaker 2: But there's going to be the other family real estate
Speaker 2: trusts that are not going to be able to refine.
Speaker 2: They're going to have to sell to somebody who has money.
Speaker 6: Yes, And interestingly, when you're talking about Columbus, which has
Speaker 6: a very strong economy, because of the university, because of
Speaker 6: the state, because you know, it's a good place to
Speaker 6: work and live. There are a lot of cities like
Speaker 6: that that continued that will be okay. You know, the
Speaker 6: demographic shifts don't cut against the Columbus Ohios. They don't
Speaker 6: cut against the big cities in Florida, you know, but
Speaker 6: they do cut against the high tax, increasingly crime ridden
Speaker 6: big cities of the North. So certainly they're going to
Speaker 6: be different. Real estate is still a local game, and
Speaker 6: they're going to be different impacts on different property types
Speaker 6: and markets. But certainly they're going to be lots of
Speaker 6: people that aren't going to be able to refinance the debt.
Speaker 6: And interestingly, in previous crashes in the late eighties and
Speaker 6: early nineties, that was driven by the essen else which
Speaker 6: were essentially put out of business in the big money
Speaker 6: center banks which had too much exposure. In eight it
Speaker 6: was Wall Street, which had a lot more leverage than
Speaker 6: anybody thought because of essentially derivatives and other matters.
Speaker 2: Are the regional banks going to have I mean, I know, well,
Speaker 2: Huntington just got a big bond.
Speaker 3: Issue out yesterday, right, But there are some regional banks
Speaker 3: that have been downgraded by S and P and Moodys.
Speaker 2: There's some regional banks that probably have too many whole
Speaker 2: to maturity bonds in their portfolio.
Speaker 3: I mean, they're going to be tightening their credits.
Speaker 6: That's exactly the right point. You know that the big
Speaker 6: money center banks are okay. If you look at their
Speaker 6: commercial real estate exposure relatives to their loans, you know
Speaker 6: they've kind of learned their lesson. The problems are going
Speaker 6: to be in the mid size and the smaller banks, where,
Speaker 6: particularly during the COVID era, there wasn't a lot of
Speaker 6: commercial loan demand, and they made a heck of a
Speaker 6: lot of real estate loans and they made them in
Speaker 6: a lot of cases to people unlike your family, but
Speaker 6: a lot of people that weren't particularly good. So they're
Speaker 6: going to be the problem is going to be not
Speaker 6: as concentrated as it was in the crisis of the
Speaker 6: late nineties the late eighties early nineties, as concentrated into
Speaker 6: as it was in two thousand and eight, but very
Speaker 6: widespread because of the fact that these loans sit in
Speaker 6: medium to smaller size banks around the country.
Speaker 10: So you're making some really big comparisons there from a
Speaker 10: cyclical standpoint. So going back to the idea that you
Speaker 10: think that there's going to be this huge opportunity, some
Speaker 10: of the dominoes have to start to fall. When do
Speaker 10: you see that happening? How long does this distress cycle happen?
Speaker 10: And is your firm.
Speaker 8: How do you actually go about this?
Speaker 10: Are there properties that you're identifying, modeling out and then
Speaker 10: you're ready to jump on when they potentially go into distress.
Speaker 6: Well, we've formed a new company called Waivertree Property Partners
Speaker 6: with a group called PTM, guys that I've worked with
Speaker 6: for a long time. They're great developers because and they've
Speaker 6: developed twenty two billion and invest in twenty two billion
Speaker 6: with their predecessor companies and now as an independent company,
Speaker 6: very strong, you know, kind of dirt under the fingernail
Speaker 6: type real estate folks. And we think that a lot
Speaker 6: of these opportunities are going to involve not just buying
Speaker 6: things cheap, you know, not just you know, we buy
Speaker 6: it at ten cents of the dollar, hold it out
Speaker 6: for a little while, and send it'll sell our twenty
Speaker 6: cents on the dollar. But because of these projects needing
Speaker 6: real work, because a lot are ill conceived, a lot
Speaker 6: of buildings are going to be have to be repurposed.
Speaker 6: We formed this venture to really both be a partner
Speaker 6: to existing financial institutions which have problems, and to you know,
Speaker 6: raise additional outside capital to augment our capital and investing in.
Speaker 10: These So you believe in this so much that you're
Speaker 10: raising capital for. And what's so interesting about it, Scott,
Speaker 10: Because of course I know that Atos, you've only been
Speaker 10: in Asia over the last twenty years, ten billion dollars
Speaker 10: of real estate over there. But you think that this
Speaker 10: opportunity is so attractive, as painful as it could be,
Speaker 10: that you're forming this.
Speaker 6: New Yes, exactly. Look, I think Japan. We have really
Speaker 6: scaled our Asian operation to invest solely in Japan. We
Speaker 6: put you know, six hundred billion of equity into China
Speaker 6: over the past fifteen years. Every deal we did made money.
Speaker 6: I wouldn't do another one of them year, which too painful.
Speaker 6: Japan is a place I think where in a slow growth,
Speaker 6: stable economy, they don't have the work from home mentality
Speaker 6: that we have here. The people go to the office more. So,
Speaker 6: you know, we think that that's kind of, with reasonable risk,
Speaker 6: a good place to earn kind of load to mid
Speaker 6: teen returns. Which is a good thing. But we see
Speaker 6: this opportunity in the US as being exponential, really bigger,
Speaker 6: with the possibility of making really significant money if you
Speaker 6: can combine the financial acumen of being able to underwrite
Speaker 6: this stuff with the operational skills to reposition, to to
Speaker 6: repurpose in a lot of cases properties that need to
Speaker 6: be significantly changed.
Speaker 1: So, Scott, do you think this new group will be
Speaker 1: acquiring properties, real properties or the debt of distress properties
Speaker 1: or both. How do you think you're going to play
Speaker 1: a capital you.
Speaker 6: Know, just over my whole career. In doing this, you
Speaker 6: have to be flexible as to what the seller wants.
Speaker 6: In some cases, the seller wants to just sell alone,
Speaker 6: be done with it, move on you guys, you know,
Speaker 6: take them through bankruptcy or do whatever you're going to do,
Speaker 6: and we've done a lot of that. In other cases
Speaker 6: they're like just bid as the debt or the asset,
Speaker 6: and we'd like to get rid those. In some cases
Speaker 6: it's a big portfolio. We want to take care of
Speaker 6: everything in one fell swoop. You have to be able
Speaker 6: to be flexible to what the seller.
Speaker 1: Are This is just a personal question that I'm dying
Speaker 1: to know. In a city like New York City. If
Speaker 1: a big trophy property on Fifth Avenue or Lexington commercial
Speaker 1: property were to trade today, what percentage haircut would it
Speaker 1: be from pre pandemic, do you think?
Speaker 6: Well, again, I think a lot of that has to
Speaker 6: do with the quality of the asset.
Speaker 2: The trophy property. They're still going for, not a discount, right.
Speaker 5: Right, Yes, B and C.
Speaker 1: How about the Benz Third Avenue all that stuff on
Speaker 1: Third Avenue from Dunk, No, it's not junk. It was,
Speaker 1: it's not. My question is like on that stuff from
Speaker 1: Grand Central up here, that's you know, the last twenty
Speaker 1: thirty years construction. Yeah, no, hedge fund hotels them until
Speaker 1: fifteen minutes ago.
Speaker 6: You know, I think it's interesting. They're really high quality buildings.
Speaker 6: One of the things I was just said an event
Speaker 6: over the GM building a couple of weeks ago, heavily
Speaker 6: amendetizing office cookings. Now if you look at one Vanderbilt,
Speaker 6: you know, yeah, that's all great restaurants. They have great
Speaker 6: amenities for the you know, for the tenants, and I think,
Speaker 6: you know, I think that's the way you really compete.
Speaker 6: Hudson Yards would fall into that Chameter streat.
Speaker 1: And see something a big property trade. I don't know
Speaker 1: if it's gonna be thirty cents on a dollar, fifty
Speaker 1: cents on the dollar, sixty cents on the dollar.
Speaker 10: When do you think we see the trade, because that's
Speaker 10: exact the anticipation.
Speaker 6: Yeah, it's when the dead comes due, yep, and it
Speaker 6: can't be refinanced. That's when you see the trade.
Speaker 1: All right, Scott, thanks so much for joining us. We
Speaker 1: got to go, but the fascinating we want to hear
Speaker 1: back when you get this seeing role in. Scott Kelly,
Speaker 1: founder and CEO of Atos Capital Real Estate.
Speaker 2: Thanks for listening to the Bloomberg Markets podcasts. You can
Speaker 2: subscribe and listen to interviews at Apple Podcasts or whatever
Speaker 2: podcast platform you prefer.
Speaker 3: I'm Matt Miller.
Speaker 2: I'm on Twitter at Matt Miller nineteen seventy three and
Speaker 2: on Fall.
Speaker 1: Sweeney I'm on Twitter at pt Sweeney. Before the podcast.
Speaker 1: You can always catch us worldwide at Bloomberg.
Speaker 7: Great