Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane, along
Speaker 1: with Jonathan Ferrell and Lisa Brownwitz Jaily. We bring you
Speaker 1: insight from the best and economics, finance, investment, and international relations.
Speaker 1: Find Bloomberg Surveillance on Apple podcast, Suncloud, Bloomberg dot com,
Speaker 1: and of course on the Bloomberg terminal. Right now, Rebecca
Speaker 1: Pattison joins us. We are thrilled to ever whether she's
Speaker 1: with Bridgewater, director of Investment Research, but far more is
Speaker 1: her time on the street bringing a holistic ly together
Speaker 1: the foreign exchange market with everything else out there. Rebecca,
Speaker 1: wonderful to have you with us today. I'm Bitcoin. What
Speaker 1: did we learn this week? I put up there some
Speaker 1: of the dynamics, the silliness of it being a gold
Speaker 1: equivalent or a coin equivalent. What did we learn? I
Speaker 1: think we got reaffirmation that it's a speculative asset and
Speaker 1: it still has a long ways to go to become
Speaker 1: a gold equivalent, to become a proper storehold of wealth,
Speaker 1: something that you can count on to have purchasing power
Speaker 1: over time, that's going to have stable and relatively low volatility.
Speaker 1: This was not a low volatility week or so for
Speaker 1: bitcoin quite the contrary, Rebecca, do you see a generation
Speaker 1: with divide between certain age groups who believe this is
Speaker 1: the new golden other age groups that just do not. Anecdotally, Yes, anecdotally,
Speaker 1: it does seem that people who are looking for alternative
Speaker 1: uh sources of cash if you will, Um, you do
Speaker 1: have a bit of a younger generation bias towards the
Speaker 1: cryptocurrencies versus gold. But um, you know, to me, it's
Speaker 1: it's not the generation as much as the retail versus
Speaker 1: the institutional. The money that's going into bitcoin and other
Speaker 1: cryptocurrencies today is still largely retail. Of course, you're getting
Speaker 1: a few more corporations, you're getting family offices, you're getting
Speaker 1: some hedge funds, But the large institutional money that's thinking
Speaker 1: about do I want this as part of the diversifying
Speaker 1: assets in my portfolio to protect me from draw downs
Speaker 1: from from bad periods of market stress. We're not there yet.
Speaker 1: It might get there over time, but it's not there yet.
Speaker 1: So this is still an asset that I think is
Speaker 1: primarily one to be used for return and speculation, not
Speaker 1: the time. Over time though, Rebecca, do you think that
Speaker 1: invests the conditioning kicks in many people will ask us
Speaker 1: when they're not familiar with financial markets and macro, why
Speaker 1: does the end do so well when things get bad?
Speaker 1: And there are various ways of explaining that, but one
Speaker 1: of them is it just does well. It's worked, and
Speaker 1: it's worked historically. Do we need to be conditioned by
Speaker 1: this somehow to start believing it a little bit more well?
Speaker 1: I think over time you could see that environment come together,
Speaker 1: and there's a couple of things I'd be watching. The
Speaker 1: big one right now is the regulatory ecosystem. You know,
Speaker 1: it's very immature still for cryptocurrencies, and after the Colonial
Speaker 1: pipeline hack paid for with crypto, the ransom was paid
Speaker 1: for crypto, I think you are going to see regulators
Speaker 1: in the US focusing more on this, trying to make
Speaker 1: sure there isn't illicit activity, trying to increase transparency. That
Speaker 1: might make some holders a bitcoin not want to own
Speaker 1: it anymore. They're there for the anonymity, but it could
Speaker 1: create an ecosystem that gives more um credibility to it,
Speaker 1: more encouragement for large institutional players to come in. If
Speaker 1: they come in and you have another source of liquidity there,
Speaker 1: that could bring down volatility over time. That's the positive
Speaker 1: flywheel that I think could change how bitcoin and perhaps
Speaker 1: other cryptocurrencies are perceived. Obviously, there's the environmental issues to
Speaker 1: which are are clearly a problem for some investors. I
Speaker 1: think those things need to get addressed and the volatility
Speaker 1: needs to come down. But if those things can happen,
Speaker 1: I think this could evolve into some some type of
Speaker 1: digital gold. If you will, Rebecca, I want you to
Speaker 1: elaborate on the environmental concerns, because Elon Musk of Tesla
Speaker 1: highlighted this, and you highlighted this in a recent research
Speaker 1: report showing that bitcoin uses up more energy than say,
Speaker 1: even uh switch relent. When you take a look at
Speaker 1: the energy consumption, it's basically a nation onto itself when
Speaker 1: it comes to this area. Can this be solved? How
Speaker 1: big of a concern is this for certain investors? Well,
Speaker 1: increasingly investors are focusing on on environmental and other e
Speaker 1: s G. Issues, so so it is an increasing concern
Speaker 1: for a lot of large institutions. There are ways it
Speaker 1: can be addressed. You can see changes in the technology
Speaker 1: used in bitcoin, for example, that could reduce energy usage.
Speaker 1: You could see the type of energy used, more of
Speaker 1: a focus on renewable energy that could also be a
Speaker 1: positive trend. There's also another option here, which is that
Speaker 1: another cryptocurrency that has lower energy usage but also some
Speaker 1: of the positive characteristics like limited supply, you could see
Speaker 1: that supplant bitcoin. Just because Bitcoin is the dominant currency
Speaker 1: today doesn't mean it will always be. So I think
Speaker 1: there are some different paths, but over time it's going
Speaker 1: to get addressed one way or another. Meanwhile, Rebecca, I
Speaker 1: want to pick up on something that John was talking about,
Speaker 1: because I know that this dovetails into the inflation call.
Speaker 1: The Bridgewater has had this whole cash is trash and
Speaker 1: that Ray Dally is talking about, but moving forward that
Speaker 1: inflation is going to be more of a threat. What
Speaker 1: do you make of the move recently lower in a
Speaker 1: longer term break even rates? Basically longer term inflation expectations
Speaker 1: have come down even as we get this robust data. Yeah,
Speaker 1: I mean, Ore, this is such an unusual time, right.
Speaker 1: We're seeing the biggest US boom um that we've had
Speaker 1: in decades, and we have so many different cross currents.
Speaker 1: Given the reopenings coming out of the pandemic, demand rising
Speaker 1: faster than some supply commedian. You just mentioned that a
Speaker 1: few minutes ago in the European p m I data
Speaker 1: that that it's hard to have a high degree of
Speaker 1: confidence how this is going to play out. But as
Speaker 1: we look at the year or so ahead, we see
Speaker 1: a decent amount of risk that inflation could keep rising.
Speaker 1: It's already rising, but stay higher for longer. And part
Speaker 1: of that is the supply taking a while to catch
Speaker 1: up with the increasing demand. And part of it is
Speaker 1: more structural forces globalization, which has helped reduced inflation for years,
Speaker 1: that's been plateauing and could possibly reverse a little bit.
Speaker 1: The trend towards capital over labor that's starting to reverse
Speaker 1: a little bit as you see higher wages, higher minimum wages, etcetera. Um.
Speaker 1: And so if you see some of these secular forces
Speaker 1: slowing or reversing somewhat and these cyclical forces, we think
Speaker 1: you could be in a slightly higher inflation environment. So
Speaker 1: the day to day moves aside. I think you want
Speaker 1: to be looking as an investor, does my portfolio have
Speaker 1: enough protection if that risk becomes reality? And this isn't
Speaker 1: just as the FED likes to say, transitory inflation. Rebecca,
Speaker 1: I want to get in trouble with Ray Dalio. So
Speaker 1: I'm gonna ask a rude question, and you're such a
Speaker 1: pro you'll give me an honest answer right now. Stock
Speaker 1: bond correlations are really quite odd. That goes into rate
Speaker 1: parity strategies and such. What is a duration the timeline
Speaker 1: of this odd correlation where it begins to affect portfolios.
Speaker 1: We're hearing short term no big deal. When does no
Speaker 1: big deal become a big deal? So, Tom, I think
Speaker 1: I don't think that's a rude question at all. I
Speaker 1: think you're you're highlighting a couple of things that that
Speaker 1: are worth unpacking a little bit. Um First, when we
Speaker 1: think about risk parity strategies all weather, which is our
Speaker 1: our strategy, it's it's a strategic long term assid allocation.
Speaker 1: What we're trying to do is get rid of some
Speaker 1: of the volatility that can come with changes in economic environments, growth, inflation,
Speaker 1: and what that allows us to do is get more
Speaker 1: steady returns over time and then we can compound that,
Speaker 1: which is, as Einstein said, isn't at the eighth wonder
Speaker 1: of the world. Um. So that's a very different strategy
Speaker 1: than save pure alpha, where we're really focusing on uncorrelated
Speaker 1: return streams that are over shorter time periods. It's more
Speaker 1: tactical UM For for folks who are thinking about risk
Speaker 1: parity strategy, remember it's never been determined on one asset
Speaker 1: or one country. It's going to be a balanced mix
Speaker 1: about sets. So even if bond yields rise um, there
Speaker 1: are going to be other bonds that are still attractive China,
Speaker 1: for example, the tenure yield. There is still three much
Speaker 1: more normal policy mix going on. And then you're gonna
Speaker 1: have other assets that are going to give you that
Speaker 1: diversification and that balance no matter what the environment is.
Speaker 1: But the other thing Tom, that I think is really
Speaker 1: important that you just said is about correlation. And I
Speaker 1: think you know every sixty forty portfolios or the last
Speaker 1: couple of decades have just been able to sit back
Speaker 1: and let it roll in. You've had rising stocks and
Speaker 1: falling bond yields. And today there is a chance that
Speaker 1: you're going to see that relationship break apart, and you
Speaker 1: need to understand why that's happening and then what you
Speaker 1: do about it. If we think that relationship is breaking
Speaker 1: apart in part because of inflation, then you want to
Speaker 1: make sure that you don't have too many bonds. You
Speaker 1: want to make sure that you also have other assets
Speaker 1: to protect you against that risk, whether it's gold which
Speaker 1: has been recovering nicely recently, inflation linked bonds, even equities
Speaker 1: that give you more of a steady cash flow over
Speaker 1: time that aren't going to be as vulnerable to that
Speaker 1: duration issue. Rebecca, always smile and always enjoy a contribution.
Speaker 1: Rebecca Pattison NAP which want a director of investment research
Speaker 1: one of our high points of the day to get
Speaker 1: you recalibrated on global Wall Street and particularly American Wall Street.
Speaker 1: He is after saying two hundred thousand jobs will be
Speaker 1: jettison truly and exile on Wall Street. Michael Mayo joins
Speaker 1: US with Wells Fargo from his decades of work, including
Speaker 1: a dark day with Credit Sweets years ago to now
Speaker 1: holding court at Wells Fargo ahead of the US large
Speaker 1: cap bank research Mike Mayo with US, Mike, I've got
Speaker 1: to rip up the script. This is all anybody's talking about,
Speaker 1: and you are the one to give perspective. Can a
Speaker 1: duo run consumer banking? They're gonna try that at JP Morgan.
Speaker 1: Is it feasible? I'm never a fan of dual heads.
Speaker 1: Having said that AP Morgan cultivates a culture of collaboration,
Speaker 1: so whoever collaborates better is ironically the one who could
Speaker 1: ultimately win. We have two women who are in contention
Speaker 1: to take Jamie Diamond's job, having said that, you know,
Speaker 1: when Jamie Diamond retires N plus five at five years to,
Speaker 1: whenever you ask him the question. So I don't think
Speaker 1: it's happening anytime soon. I think that the board wants
Speaker 1: him to stay. Investors wanted to stay. But you do
Speaker 1: have two women who are in contention. If the two
Speaker 1: women are in contention, two men in contention, you know,
Speaker 1: let's be honest. This is absolutely original stuff to your
Speaker 1: research note which stopped Wall Street a few days ago,
Speaker 1: how old the dominant JP Morgan consumer franchise and adapt
Speaker 1: an adjust to automation, to digital banking and the rest
Speaker 1: that you highlight, Well, JP Morgan is a microcosm of
Speaker 1: the broader industry. And for you Tom and going to
Speaker 1: the classics, I'm going to the Greek philosopher Plato who
Speaker 1: said necessity is the mother of invention. Banks have no
Speaker 1: choice but to get more efficient, to use automation and
Speaker 1: the streamline. So whether it's JP Morgan or any other bank,
Speaker 1: even though they're opening up branches and hiring advisors and
Speaker 1: all sorts of people. Over the next ten years, we
Speaker 1: expect headcount to decline by two hundred thousand jobs, up
Speaker 1: to two hundred thousand jobs for the banking industry. And
Speaker 1: that's because you have automation in the back office, digitization
Speaker 1: the front office, and because banks have no choice as
Speaker 1: they compete against big tech, big retail at a bunch
Speaker 1: of non banks that have a lot less regulation. How
Speaker 1: is that going to go down politically, Mike, Uh, not
Speaker 1: always well, but it could be better than in the
Speaker 1: past because with natural attrition, banks can try to, you know,
Speaker 1: walk that fine line between becoming a lot more efficient
Speaker 1: and without destroying their you know, political and regulatory reputations
Speaker 1: and also their E s G scores because everyone's watching.
Speaker 1: You know, if you fire a lot of people, that
Speaker 1: hurts your interesting E s G scores. And so it's
Speaker 1: a it's a it's a tough job. It's a different
Speaker 1: job to be a bank deo today. In the past,
Speaker 1: it was about creating, generating sustained long term value. Today
Speaker 1: it's doing that and a lot more. You need to
Speaker 1: be more tuned to issues around climate UH and social
Speaker 1: issues UM and diversity, and so it's a bigger challenge.
Speaker 1: What does that mean for the physical presence on main Street, Well,
Speaker 1: a lot less branches. You're going to see a lot
Speaker 1: less branches and a lot less people per branch. And
Speaker 1: they call it d I Y do it yourself and
Speaker 1: also more do it together services. So you'll see banks,
Speaker 1: you know, working with customers that show them how to
Speaker 1: adapt to using more digital tools. And the pandemic Herbo
Speaker 1: charged the tech revolution at banks. You can't force a
Speaker 1: change in customer behavior, but the pandemic did so, and
Speaker 1: that played into the banking industry's strategic UH playbook for
Speaker 1: the next five or ten years. Mike, when you talk
Speaker 1: about competition from a number of different sources, we should
Speaker 1: also talk about competition from the Federal Reserve itself, for forum,
Speaker 1: the US government, the Federal Reserve saying yesterday that they're
Speaker 1: going to put out a report on the US digital
Speaker 1: dollar debate this summer that could disintermediate the big banks.
Speaker 1: How much you paying attention to this, Well, you have
Speaker 1: to pay attention to this. I mean there's threats to
Speaker 1: banks and disenter mediation of banking goes back half a century,
Speaker 1: and so you first saw that with traditional bank loans
Speaker 1: getting the center mediated to the capital markets, and then
Speaker 1: you've seen that with some of the fintech players and
Speaker 1: the payments business, and so you have to watch, you know,
Speaker 1: anything related to you know, digital uh currencies or anything else.
Speaker 1: Having said that, I think the banking industries business model
Speaker 1: resiliency for the largest banks is underappreciated. And a deposit
Speaker 1: at a large bank is different than a deposit at
Speaker 1: another bank. It's driven by a hybrid distribution system that's
Speaker 1: physical and digital. It's driven by multiproducts, whether it's a
Speaker 1: checking account, savings account, credit card, mortgage investment. So, um, yes,
Speaker 1: you have to watch this. But the death of banks
Speaker 1: has been greatly exaggerated the last few decades. Mike, perhaps
Speaker 1: the death of banks, but just quickly here, I'm wondering
Speaker 1: what you think in terms of mergers and acquisitions, how
Speaker 1: consolidated could the industry get as they cut what you
Speaker 1: estimate to be two hundred thousand jobs. Absolutely, there should
Speaker 1: be an acceleration and bank mergers. Goliath is winning. The
Speaker 1: largest banks have scale, The smaller banks need to generate
Speaker 1: that scale. That was mentioned as the number one reason
Speaker 1: for the biggest recent merger in the last few years
Speaker 1: now known as as truest Um. So we wouldn't be
Speaker 1: surprised to see half the number of banks out there
Speaker 1: over the next decade. Just before we run, Mike, a
Speaker 1: lot has been made of v SG and diversity, and
Speaker 1: you touched on that yourself in this conversation. You would
Speaker 1: want to bring it up. Why do you think that
Speaker 1: wasn't a big part of the consideration for Morgan Stanley
Speaker 1: shake up. Look, ultimately, um, you know, the ability of
Speaker 1: managers to generate the returns helped the firm as a
Speaker 1: whole um and represent the firm you know drives these decisions.
Speaker 1: And so Jamie Diamond didn't select the two women coheads
Speaker 1: of consumer who are likely the next one of those
Speaker 1: are the next successor because they're women. It's because they're
Speaker 1: the most capable. So I think the chips ball where
Speaker 1: they will, well said Mike, Thank you, Mike Mayo West
Speaker 1: Farco ahead of US large cap bank research on a
Speaker 1: situation on Wall Street. Terry Hinges joins US now with
Speaker 1: Venia policy. Their under here in a good student of
Speaker 1: the dynamics of Washington, Terry. There's isolationism in America. It's
Speaker 1: always been there, back to the founders, a certain character,
Speaker 1: let's say, in the pre World War Two era, all
Speaker 1: sorts of shades. After World War Two, a unique Trump isolationism,
Speaker 1: a sense there, and now with Israel, Gaza, and even
Speaker 1: with this announcement from the I m F for a
Speaker 1: cash call, a new isolationism in Washington. What does that
Speaker 1: look like? Uh, Tom, good morning. What I think it
Speaker 1: looks like is a essentially a rebalancing of international responsibilities
Speaker 1: with the with domestic responsibilities. There's a I think there's
Speaker 1: a sense, and there's been a sense for about five
Speaker 1: or six years that frankly I think predates Trump. Uh,
Speaker 1: that we've been spending too much time and effort thinking
Speaker 1: globalism is going to solve all our problems and instead
Speaker 1: understanding that it's exacerbated a lot. What I'll shorthand is
Speaker 1: the flyover country problem and try a fly over part
Speaker 1: nation problem. And uh, and we ought to be spending
Speaker 1: some more time with that. So you know, we're back
Speaker 1: to the old wrangle of exactly how much time and
Speaker 1: effort we ought to be spending on domestic priorities as
Speaker 1: opposed to worrying about the international and you know, frankly,
Speaker 1: that complicates policy making across the board. Do you ascribe
Speaker 1: to the tradition that foreign policy doesn't matter when people
Speaker 1: waltz into the two thousand twenty two or two thousand
Speaker 1: twenty four booth or does it matter this time around?
Speaker 1: I think it matters to them always. Frankly. There there
Speaker 1: are always issues that that that differentiate candidates. Uh. And
Speaker 1: you know, we we see a lot of those happening
Speaker 1: right now. You've already you've already hit on it with
Speaker 1: the part of it with Middle East policy. Uh. China.
Speaker 1: China policy, of course is a very big and you know,
Speaker 1: frankly bipartisan initiative at this point that anybody that wanted
Speaker 1: to change China policy at this point would be looked
Speaker 1: at very skeptically. Uh. You know, the eyeballs on Russia,
Speaker 1: same thing. Uh, just to name three off the top.
Speaker 1: But yeah, it does matter to It does matter to voters.
Speaker 1: Let's jump to June, the president's first big obous trip,
Speaker 1: when he's going to go go over to Europe. What do
Speaker 1: you think the priorities are the priorities for them are
Speaker 1: they want to show Firstly, they want to show off,
Speaker 1: uh that they're America's back them, that they want uh
Speaker 1: to show cozy relationships across the board with the European
Speaker 1: Union number one. Number two, they actually want to show
Speaker 1: how they're moving the ball forward, and they're gonna have
Speaker 1: to get past this, uh, this nord Stream problem and
Speaker 1: put it into a broader context to show how that
Speaker 1: decision to wave sanctions there is positive for other aspects
Speaker 1: of the European project. And third, they want to show
Speaker 1: united front against Russia, but more importantly China. Uh, that's
Speaker 1: where they go. They've got a Germany of them, haven't they.
Speaker 1: With that in mind, Harry, not so much as a
Speaker 1: European problem is a Germany problem. Yeah, yeah, exactly. You know,
Speaker 1: there's some wags and Brussels always say if Hitler had
Speaker 1: understood that Dolly to do was to conquered everybody economically, uh,
Speaker 1: as Germany has with the the U. Uh. You know
Speaker 1: that we wouldn't have had the Second World War. But
Speaker 1: the more important part of this is that, uh, you've
Speaker 1: got a new government, You've got more instability in Germany
Speaker 1: for the first time in a long time. You've got
Speaker 1: a new government, a new way of looking at things. Uh.
Speaker 1: Some people say a loss of confidence. Uh. So that
Speaker 1: is that those are all variables that the administration is
Speaker 1: going to have to work with to resolve. So it's
Speaker 1: a higher mountain than it was just a few months ago.
Speaker 1: I meanwhile, here at home, Terry, one reason why I
Speaker 1: love reading your reports is because you actually assign probabilities
Speaker 1: to the likelihood of certain legislative initiatives getting passed. Where
Speaker 1: are we in terms of the probability of a bipartisan
Speaker 1: infrastructure bill getting passed in the near term, Well, thank you, Liza,
Speaker 1: and and you know I've been non consensus uh was
Speaker 1: non consensus uh about sixty six for some time on that.
Speaker 1: I think that's coming together, Uh, in a kind of
Speaker 1: eight hundred billion to one trillion range at the top.
Speaker 1: There's clearly a desire to want to do something there,
Speaker 1: and on a bipartisan basis, it amounts to a plus
Speaker 1: up of about a hundred percent over what we would
Speaker 1: be spending on infrastructure anyway. So it's not insignificant, but
Speaker 1: it would take a quite a while to roll out.
Speaker 1: The bigger question is that you know whether or not, uh,
Speaker 1: it's gonna be able to roll out faster. It doesn't
Speaker 1: sound like that's gonna happen, So the people won't see
Speaker 1: in businesses won't see a difference to that very much.
Speaker 1: And I also think it makes the the what the
Speaker 1: administration calls the Family's Package, which is most of the
Speaker 1: rest of us call everything else, uh, that much harder
Speaker 1: to get. Democrats will understand that the last train is
Speaker 1: going to leave the station. They want everything they want
Speaker 1: in it. People tend to forget that the Affordable Care
Speaker 1: Act had got passed on reconciliation, but it took something
Speaker 1: like five months after the House at first passed it
Speaker 1: to finalize it. And that's a positive case. So you know,
Speaker 1: they're Washington is going to fool around with the Family's
Speaker 1: Package into the winter and probably you know, i'd say
Speaker 1: at least into the winter with the likelihood of that
Speaker 1: getting passed. If I have that very much below at
Speaker 1: this point, I'll give you, I'll give you it's alive
Speaker 1: and kicking it, but I don't see the path forward
Speaker 1: for it right now. Jerry. We had the privilege speaking
Speaker 1: to the Republican from Montana yesterday, Steve Danes, and it
Speaker 1: was really good conversation. I am fascinated by how you
Speaker 1: translate the middle ground of American politics is personified by
Speaker 1: John Tester and Steve Danes in Montana. What's the future
Speaker 1: of the middle in America if Montana is living it? Um,
Speaker 1: you know what, those are two very smart members. I've
Speaker 1: had the plug her to spend a fair amount of
Speaker 1: time with Senator Tester over the years. And uh, he's
Speaker 1: a very capable senator. The U and and somebody's really
Speaker 1: looking out for things the you know, the the uh.
Speaker 1: The way people present themselves these days is market themselves
Speaker 1: in politics is polarized, they'd say, necessarily so. But there's
Speaker 1: an awful lot of people trying to figure out what
Speaker 1: the middle ground is and and work on it from there.
Speaker 1: We're losing some of those good people, people like Rob
Speaker 1: Portman and Pat Toomey, but as you point out, people
Speaker 1: like Tester and Danes are still there, and uh, you know,
Speaker 1: between him, people like Tim Scott, for example. I think
Speaker 1: there's there's still an awful lot of people in the Congress,
Speaker 1: particularly in the Senate, that are looking to try to
Speaker 1: figure out exactly how to deal with the what we'll
Speaker 1: call the problems of the middle uh and UH and
Speaker 1: improve things, so you know, I remain optimistic about that
Speaker 1: in the long term. Terry, go ahead from you as
Speaker 1: always Terry hinesad panchea policy founder and the latest down
Speaker 1: in d C. Right now, Lisa Browns and I welcome
Speaker 1: you to, without question, your most important conversation of the day,
Speaker 1: because it's what we all do as we break red
Speaker 1: before the pandemic. In this pandemic and coming out of
Speaker 1: the pandemic, there is flat out no one in the
Speaker 1: restaurant and food business who has committed to optimism more
Speaker 1: than Daniel Ballut. He joins us this morning with an
Speaker 1: eleven thousand foot triumphant Grand Central Station and the new
Speaker 1: Vanderbilt Tower. Daniel, thank you so much for joining us
Speaker 1: on La Pavillon in the success. This is huge, huge optimism.
Speaker 1: How urgent is it for you to fill every seat
Speaker 1: starting yesterday? Well, thank you tomb for having me on
Speaker 1: good morning. Um, of course it's us to open a
Speaker 1: new restaurant, always for anyone, but it is huge in
Speaker 1: this time because we really feel that we are coming
Speaker 1: out of the pandemic and it's time to bring the
Speaker 1: city back together. And I think for me, it's not
Speaker 1: about how many sick, can we feel and all that,
Speaker 1: but just bring back jobs, bring back hope, and and
Speaker 1: have the opportunity to create something new and unique and
Speaker 1: one Vanderbilt the project finish on time, finish on budget
Speaker 1: throughout the year the pandemic. It never we had slowed down,
Speaker 1: but we never stopped. And I think that's uh, that's
Speaker 1: something which I'm very proud of to be associated with
Speaker 1: sl Green and the project there because the project kept ongoing.
Speaker 1: When you came to New York, you couldn't get into
Speaker 1: the fancy restaurants. You were a pittle and chef and
Speaker 1: nobody wanted to talk to you anything like that. I
Speaker 1: know now you pick up the phone and you get
Speaker 1: my table instantly. What I want to know is will
Speaker 1: we change how we eat after this horrific pandemic, whether
Speaker 1: the fancy or the less fancy. Do you sense that
Speaker 1: will change the way we approach food. I don't think so.
Speaker 1: I think people want to go back to indulge. People
Speaker 1: want to go back to be pampered, to be to
Speaker 1: discover new restaurants, to be able to enjoy the food
Speaker 1: to the fullest. And of course we are very conscious
Speaker 1: and we have to keep our safety as a priority
Speaker 1: for us the staff, we keep wearing masks. We try
Speaker 1: to not make maybe so many dishes who can be
Speaker 1: sharable and uh, and we try to really respect also
Speaker 1: distance and timings or that so guests feel comfortable, people
Speaker 1: are anxious to go out. And uh, I see in
Speaker 1: my restaurant at Danielle or Babble also that Terras is
Speaker 1: so much in demand now. It's fantastic, volute. Whenever you
Speaker 1: walk down the street in New York City, you see
Speaker 1: all of the restaurants absolutely flooded with people looking to
Speaker 1: get back. There is a question though, and you're not
Speaker 1: seeing that in Midtown. In Midtown it still is a
Speaker 1: bit of a ghost town as offices still try to
Speaker 1: bring some workers back and have a questionable time frame.
Speaker 1: What does the power launch of the post pandemic era
Speaker 1: look like, Well, right now it looks like nothing because
Speaker 1: there's not that many restaurants up and for power lunch.
Speaker 1: But I think, uh, there's definitely a bus in Midtown,
Speaker 1: and I see around Grand Central, I see people coming
Speaker 1: back to the office, and we have people coming out
Speaker 1: of work and coming to have a drink at the
Speaker 1: bar at La Pavillon. But so that means they must
Speaker 1: have been working around there. And I think Power Lunch
Speaker 1: will come back in September, resume when the all the
Speaker 1: hotels are open. New York is back, and I think
Speaker 1: the office will bring back people because they have to. Well,
Speaker 1: when you talk Chapalad about the cities that are going
Speaker 1: to be the culinary leader is going forward, what do
Speaker 1: you hear from your peers, from your fellow chefs in
Speaker 1: terms of which cities are the best ones to open
Speaker 1: a higher end restaurant. Well, I think New York City
Speaker 1: is still the number one city for sure. I mean there's,
Speaker 1: of course, you can always be a big fish in
Speaker 1: a small pound. But in New York City, I think
Speaker 1: we have the capability for welcoming tourists and business and
Speaker 1: entertainment and sports in that no other city can. And
Speaker 1: of course there's the hype of Miami. There's that have,
Speaker 1: But when it comes to find dining and when it
Speaker 1: comes to all dining, I think New York City and
Speaker 1: clearing all neighborhoods. It's amazing. And you know, people are
Speaker 1: craving to come back to New York City. I see
Speaker 1: the double deck bus passing by the Pabion because it's
Speaker 1: on the second floor. I see the double deck bus
Speaker 1: full of people and I'm like, wow, is there's some
Speaker 1: tourist back and I here concierge according us and telling
Speaker 1: us the hotel are reopening. So it's it's it's a
Speaker 1: good sign. I mean, just a question of for the
Speaker 1: all the office building to be able to bring back
Speaker 1: their staff, and certainly the unemployment tourisum so we can
Speaker 1: bring people back to work. The romance Daniel of of
Speaker 1: of being a grand central station and looking out that
Speaker 1: window of the Chrysler building, it speaks back to La
Speaker 1: Pavillon of N two as well. Boy, if we changed
Speaker 1: how we eat now, what's your biggest challenge in developing
Speaker 1: repeat customers? What is the food angle, the menu angle
Speaker 1: that you need to do in two thousand twenty one
Speaker 1: to keep them coming in? Interestingly enough, yes, vegetable is
Speaker 1: the rage. But twenty four years ago went up in
Speaker 1: Cafebruary in New York. I had already a vegetarian menu,
Speaker 1: and so this I expanded more and so look beyond
Speaker 1: the menu will be see food for vegetable and ten
Speaker 1: percent of selected high quality meat. And so there's definitely
Speaker 1: a trend between um, I wanted to have a certain
Speaker 1: uh focus on the locality, so the New England for
Speaker 1: the most part, and also vegetable within the five state
Speaker 1: state around New York, and I think this will be
Speaker 1: our focus there. But um, in general, people are craving
Speaker 1: for good food, good wine, and of course healthy food.
Speaker 1: That's our responsibility, a colossal financial risk. Really really interesting Daniable,
Speaker 1: congratulations and launching La Pavon and just really really interesting
Speaker 1: to see in the coming months is New York City
Speaker 1: comes back? Thank you so a Daniable loud you claim restaurant.
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