WEBVTT - Women Smashing Construction Industry’s Concrete Ceiling 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.440 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanobek. We're here every day bringing 0:00:07.280 --> 0:00:09.840 you the latest news from the world of business and finance, 0:00:09.840 --> 0:00:13.640 plus technology, politics, economics, all purtnising the power of Business 0:00:13.640 --> 0:00:17.119 Week reporters and editors, not to mention our journalists and 0:00:17.160 --> 0:00:19.599 analyst in more than one and twenty countries. You can 0:00:19.640 --> 0:00:23.239 download Bloomberg Business Week at iTunes, SoundCloud, or Bloomberg dot com. 0:00:23.400 --> 0:00:25.160 You can also listen to our radio show at two 0:00:25.160 --> 0:00:27.840 pm Eastern Time on Bloomberg Radio, or watch us on 0:00:27.880 --> 0:00:31.680 YouTube search Bloomberg Clobal News. Well in the new issue 0:00:31.680 --> 0:00:33.600 of Bloomberg Business Week that's out later this week. The 0:00:33.640 --> 0:00:36.280 next story you can find actually right now on the 0:00:36.280 --> 0:00:39.360 Bloomberg terminal and also at Bloomberg dot com slash business 0:00:39.360 --> 0:00:42.240 Week Tim is about how women are smashing the construction 0:00:42.280 --> 0:00:46.000 industries concrete ceiling record vacancies, forcing changes in what's been 0:00:46.040 --> 0:00:48.760 an all male bashtion. We've got with us. One of 0:00:48.800 --> 0:00:52.280 the authors, Maria Paolo mis Torres, joins us now. She's 0:00:52.360 --> 0:00:54.920 US economy reporter for Bloomberg News. She's with us right 0:00:54.920 --> 0:00:57.680 now in the Bloomberg Interactive Broker Studio. Maria. I want 0:00:57.680 --> 0:01:00.240 to start just with the with the data here, we're 0:01:00.240 --> 0:01:04.000 talking fourteen point one percent and all time high in 0:01:04.120 --> 0:01:06.680 terms of the share of US construction jobs held by women. 0:01:06.920 --> 0:01:09.440 It's not, by any means parody, but this is a 0:01:09.480 --> 0:01:13.640 big deal. Yeah, it's one million women in construction, which 0:01:13.680 --> 0:01:17.000 is a higher number we have seen racing since that 0:01:17.080 --> 0:01:20.319 I was collected in the nineteen sixty four. And you know, 0:01:20.480 --> 0:01:23.320 with more as we call them baby boomers or more 0:01:23.319 --> 0:01:26.240 people who were used to being in this industry, male 0:01:26.840 --> 0:01:29.840 are retiring, and there's more bagancies in this industry, and 0:01:29.840 --> 0:01:32.039 there's labor turtages, and people are looking for jobs, more 0:01:32.080 --> 0:01:34.280 women are taking them. All right. I gotta say, I 0:01:34.360 --> 0:01:37.440 have two brothers who are contractors. I don't hear a 0:01:37.480 --> 0:01:39.319 lot about them working with a bunch of women in 0:01:39.360 --> 0:01:42.400 the industry. So how is it that it's happening. Yeah, 0:01:42.440 --> 0:01:45.000 it's still a minority, but it's growing. And that's why 0:01:45.000 --> 0:01:47.600 we like, that's what caught us from the data and 0:01:47.600 --> 0:01:49.800 when we wanted to do this story because there's a 0:01:49.840 --> 0:01:53.000 lot of women seeing that they have more opportunities, you know, 0:01:53.080 --> 0:01:57.120 growing professionally, having a higher wage if they instead of 0:01:57.200 --> 0:02:02.000 you know, go have other jobs that are stereotypical for women. 0:02:02.440 --> 0:02:04.960 They take this construction work works that you know, have 0:02:05.080 --> 0:02:07.720 no gender attached to them. It's just like in history, 0:02:07.800 --> 0:02:10.880 more men have done it and they have more opportunities there. 0:02:10.880 --> 0:02:13.280 So they've been falling in love with these construction works 0:02:13.320 --> 0:02:15.760 and been doing them more and more, inspiring other women 0:02:15.800 --> 0:02:18.560 to also do that. It's also the money is really 0:02:18.600 --> 0:02:20.639 really good. Take us through some of the numbers here, 0:02:20.639 --> 0:02:23.760 because we're talking, you know, close to a hundred thousand 0:02:23.760 --> 0:02:26.440 dollars a year for jobs that don't necessarily require a 0:02:26.480 --> 0:02:30.600 college education. Yeah, exactly. So in the media, salary for 0:02:30.639 --> 0:02:35.440 an electriction was fifty nine thousand dollars and ninety eight thousand, 0:02:35.560 --> 0:02:38.840 five hundred for a construction manager. So that's why a 0:02:38.880 --> 0:02:40.680 lot of women are being a filled to these jobs 0:02:40.680 --> 0:02:43.440 that you know, some women actually do have college degrees 0:02:43.440 --> 0:02:45.240 even though it's not required. For example, one of the 0:02:45.280 --> 0:02:49.040 people I talked with, though she has a degree in 0:02:49.160 --> 0:02:52.640 history and lot in American studies, she just couldn't find 0:02:52.720 --> 0:02:55.680 a job that you know, she was graduated in twenty 0:02:55.720 --> 0:02:57.640 with the pandemic, she couldn't find a job that was 0:02:57.720 --> 0:02:59.840 for what she wanted to do, and then she fill 0:02:59.880 --> 0:03:02.240 in of with construction because she had seen how her partner, 0:03:02.360 --> 0:03:04.960 her dad grew up doing construction. She just never felt 0:03:04.960 --> 0:03:08.359 identified there. She never saw Latina, women of color, women 0:03:08.360 --> 0:03:10.560 in general, just working in the construction fields where their 0:03:10.560 --> 0:03:12.960 family were working. And she realized that she can do 0:03:13.000 --> 0:03:14.880 it and get a better salary than what she was 0:03:14.919 --> 0:03:17.440 hoping for. So what are women in construction typically doing? 0:03:17.480 --> 0:03:21.120 Are they overseeing sites? Are they developing, doing the contracts, 0:03:21.360 --> 0:03:24.600 negotiations with clients? Are are actually picking up a hammer? 0:03:25.240 --> 0:03:27.160 Uh and doing some of the physical work because it's 0:03:27.160 --> 0:03:30.119 a very physical job. It is a very physical job 0:03:30.160 --> 0:03:33.960 and it also has very physically, very very various facets. 0:03:34.480 --> 0:03:37.760 Are we see women from any part of the construction 0:03:37.880 --> 0:03:40.320 we see and they already go with tug with women 0:03:40.360 --> 0:03:42.960 who are actual constructors speaking of the hammers, Like you said, 0:03:43.280 --> 0:03:47.840 we see contractors, we see inspectors, we see from manager 0:03:47.880 --> 0:03:51.080 positions all the way to the bottom. Um. Of course, 0:03:51.360 --> 0:03:54.040 as the higher you do go in the ladder, there's 0:03:54.120 --> 0:04:00.320 more men, and specifically more white men. But really, sorry, 0:04:00.440 --> 0:04:04.080 but that's why they're actually trying through to villain. I 0:04:04.440 --> 0:04:09.920 was having fun with the world you exactly know. And 0:04:10.280 --> 0:04:12.640 it is interesting and I do. I remember watching this 0:04:12.680 --> 0:04:15.720 Old House and this was a few years ago, because uh, 0:04:15.760 --> 0:04:19.159 there's such demand for jobs generally in the construction industry. 0:04:19.160 --> 0:04:22.480 There's a lot of younger individuals who don't think about 0:04:22.560 --> 0:04:25.080 becoming electricians. We talked about this all the time, or 0:04:25.320 --> 0:04:29.520 you know, becoming contractors or you know, becoming builders, and 0:04:29.600 --> 0:04:32.080 they really need people. And they were actually creating a 0:04:32.120 --> 0:04:36.320 program to help cultivate young women, young men, uh in 0:04:36.360 --> 0:04:40.200 this industry. And so, uh it's kind of interesting. Is 0:04:40.200 --> 0:04:42.440 the growth expected to continue? Is so much of it 0:04:42.480 --> 0:04:44.960 though about the demand in the industry right now that 0:04:45.000 --> 0:04:47.840 women have a better opportunity, Well, I really, I really 0:04:47.839 --> 0:04:51.000 do hope that it keeps growing until it's more equitable 0:04:51.080 --> 0:04:55.120 or more equal. Um. People are definitely seeing how it's 0:04:55.320 --> 0:04:58.960 not longer stereotype that's only one gender can do this 0:04:59.040 --> 0:05:02.080 kind of job. So more there was being open for women. 0:05:02.120 --> 0:05:04.360 And I a lot of the women I spoke with, 0:05:04.720 --> 0:05:07.200 they're saying that they're finding finding more and more community 0:05:07.240 --> 0:05:09.120 and they all got inspired to do these work things 0:05:09.120 --> 0:05:13.080 to other women telling them, hey, there's an opportunity here. Um. 0:05:13.120 --> 0:05:16.240 From Facebook groups to actual networking groups in person to 0:05:16.279 --> 0:05:19.480 go grab lunch together. This was something that women just 0:05:19.520 --> 0:05:21.520 got inspired to do more and more by hearing other 0:05:21.560 --> 0:05:23.440 people doing it. What did you What did they tell 0:05:23.480 --> 0:05:26.719 you about just day to day life on the construction site. 0:05:26.720 --> 0:05:30.599 I mean I worked construction for two summers between college 0:05:30.960 --> 0:05:34.120 and um it was all male where I was. There 0:05:34.160 --> 0:05:37.200 was not a single woman on on these working on 0:05:37.240 --> 0:05:40.799 these houses. Um. What did they tell you about the environment? Yeah, definitely, 0:05:40.839 --> 0:05:44.560 the environment is not the most friendly for a woman. Uh. 0:05:44.600 --> 0:05:47.360 They all told me that they have had a couple 0:05:47.400 --> 0:05:51.000 of bad experience in the sense of either harassment either 0:05:51.120 --> 0:05:53.600 not taking them seriously because they were a woman. If 0:05:53.640 --> 0:05:56.680 they were inspectors seeing overseeing a job done by a men, 0:05:56.760 --> 0:05:59.680 they would usually second guess them and say, hey, I 0:05:59.680 --> 0:06:01.720 did the correctly, you have to like revise it again, 0:06:01.720 --> 0:06:03.720 and they say, like, no, my word is final. So 0:06:04.120 --> 0:06:07.800 they were a lot of times not respected as they 0:06:07.800 --> 0:06:11.480 would help to. But they that's also why this community 0:06:11.520 --> 0:06:14.800 is matters of women women in construction coming together so 0:06:14.839 --> 0:06:17.839 they can support each other. And they've all have told 0:06:17.880 --> 0:06:20.120 me that they have had to grown ethics skin in 0:06:20.120 --> 0:06:22.600 this job. Tell us too about minority women, how this 0:06:22.680 --> 0:06:26.279 is even an extra bump up for them. Yeah, so, 0:06:26.520 --> 0:06:30.800 um yeah, a lot of the percentages of women working 0:06:31.640 --> 0:06:35.880 are kind of mixed ethnically and racewise. The biggest minority 0:06:36.320 --> 0:06:38.960 and women constructions are letting know women. I was able 0:06:39.000 --> 0:06:41.279 to talk with a couple of them, but yeah, this 0:06:41.440 --> 0:06:44.280 is somewhere else where you see all side of the instructions, 0:06:44.320 --> 0:06:47.600 but of course also majority white women. Um, but more 0:06:47.640 --> 0:06:50.239 and more they're telling me that they're seeing more women 0:06:50.279 --> 0:06:53.800 of color in this industry. But just in general, if 0:06:53.839 --> 0:06:56.559 you look at it also on their male counterpart parts, 0:06:57.080 --> 0:07:00.479 it's also been hard to see more people people and 0:07:00.520 --> 0:07:03.720 people of color higher up in the ladder. Is this 0:07:03.920 --> 0:07:06.320 a consequence or I shouldn't even say consequence. This is 0:07:06.320 --> 0:07:09.880 the result of just the labor shortage that we're seeing. 0:07:09.880 --> 0:07:14.640 I mean, what is spurring the increased diversification when it 0:07:14.680 --> 0:07:19.080 comes to at least gender diversity within construction. Yeah, some 0:07:19.160 --> 0:07:22.160 of the guesses that experts have on the matter, because 0:07:22.200 --> 0:07:26.360 of the labor shortage and the lack of people in construction, 0:07:26.400 --> 0:07:30.160 that they're accepting more people now. But I really do 0:07:30.280 --> 0:07:33.800 hope that even if they were shortage ever, you know, 0:07:34.040 --> 0:07:39.120 sees this this opportunities keep open for more people. Yeah, 0:07:39.200 --> 0:07:40.920 I gotta say, I know I've said this a million 0:07:40.960 --> 0:07:44.840 times to forgive Bloomberg audience, but I just remember our 0:07:45.600 --> 0:07:47.600 he was our electrician or I think it was our plumber, 0:07:47.920 --> 0:07:50.440 and just when you got the bill, well the bill, 0:07:50.640 --> 0:07:54.520 and then he retiring early, and his multiple homes that 0:07:54.600 --> 0:07:56.480 he owned, and I just the money that was to 0:07:56.600 --> 0:07:58.760 be made. And you know, we're so pro college, and 0:07:58.800 --> 0:08:02.240 I am very pro college, but there are alternatives where 0:08:02.280 --> 0:08:04.520 you can make a really, really good living. Uh. And 0:08:04.600 --> 0:08:07.120 certainly this is certainly when it comes to construction playing 0:08:07.120 --> 0:08:10.520 out well for women, in particular minority women. Maria Paola 0:08:10.600 --> 0:08:13.480 Mijas Torres U s Economy reporter at Bloomberg News in 0:08:13.520 --> 0:08:17.080 our interactive Broker Studio. This story in the upcoming new 0:08:17.120 --> 0:08:19.760 issue of Bloomberg Business Week, due out later this week, 0:08:19.800 --> 0:08:22.000 but you can find it at the Bloomberg right now 0:08:22.080 --> 0:08:24.720 and also at Bloomberg dot com slash business Week. This 0:08:24.840 --> 0:08:30.160 is Bloomberg Radio. You're listening to Bloomberg Business Week with 0:08:30.240 --> 0:08:35.080 Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. 0:08:35.360 --> 0:08:37.559 It is one of our most read stories on the Bloomberg. 0:08:37.559 --> 0:08:39.480 It's also the Bloomberg Big Take about how the US 0:08:39.559 --> 0:08:44.000 Central banks past crises holds secrets to tackling future recessions. 0:08:44.080 --> 0:08:47.120 We can, indeed, Tim, it seems learn from our past. 0:08:47.480 --> 0:08:50.440 That story by Tom orlick In, David Wilcox, Carol, as 0:08:50.440 --> 0:08:52.920 you mentioned, it's today's big Take. Check it out from Bloomberg, 0:08:52.920 --> 0:08:55.079 the Big Take on the Bloomberg Terminal, and at Bloomberg 0:08:55.120 --> 0:08:57.319 dot com slash a big Take Tom more like his 0:08:57.400 --> 0:08:59.719 chief economist for Bloomberg Economics. He joins us on the 0:08:59.720 --> 0:09:02.760 phone from Washington, d C. Tom, Good, to have you 0:09:02.800 --> 0:09:05.120 with us this afternoon. I find it fascinating to see 0:09:05.120 --> 0:09:06.880 what's happening in the SMP five. Found it right now 0:09:06.920 --> 0:09:10.000 since we last heard from Fed Chair J Powell. Uh 0:09:10.120 --> 0:09:13.120 with you know, the most recent meeting of the Federal Reserve. 0:09:13.160 --> 0:09:16.880 Because we've seen stocks rally and you and David write 0:09:16.880 --> 0:09:20.480 that the market isn't really buying the fact that the 0:09:20.480 --> 0:09:22.520 federal funds rate is going to have to keep climbing 0:09:22.600 --> 0:09:27.720 entertain inflation. Yeah, it's a funny, Tim. There's a bunch 0:09:27.720 --> 0:09:31.920 of people in the markets who have a deep investor background. 0:09:32.520 --> 0:09:35.280 There's a bunch of people in the markets who have 0:09:35.400 --> 0:09:38.559 a policy background, including some folks on our team who 0:09:38.640 --> 0:09:41.679 joined us from time at the Federal Reserve, and they 0:09:41.720 --> 0:09:46.120 just had completely different interpretations of that July press conference 0:09:46.120 --> 0:09:49.800 from Chair Powell. The market folks heard a dovish signal, 0:09:50.080 --> 0:09:51.960 They heard what they wanted to hear. They heard the 0:09:51.960 --> 0:09:55.120 Fed was going to pause on rate hikes. The policy people, 0:09:55.360 --> 0:09:58.160 the people with the monetary policy, the Fed background, they 0:09:58.160 --> 0:10:01.040 didn't hear that at all. They a Powell who is 0:10:01.080 --> 0:10:04.599 determined to push on with rate hikes until inflation is 0:10:04.679 --> 0:10:08.240 under control. And so so far it's that first interpretation, 0:10:08.600 --> 0:10:11.679 that davish interpretation which has been pushing the S and 0:10:11.760 --> 0:10:15.040 P and other risk assets up, and our view it's 0:10:15.080 --> 0:10:18.440 actually that's the wrong interpretation, and we expect that power 0:10:18.520 --> 0:10:20.800 is going to come out at Jackson Hall and offer 0:10:20.840 --> 0:10:24.400 a correction. All right, So and so he'll say what specifically. 0:10:25.440 --> 0:10:28.080 So I think there's a bunch of different there's a 0:10:28.240 --> 0:10:32.000 range of possible outcomes for inflation and for Fed policy 0:10:32.240 --> 0:10:36.360 in the month ahead. Goodness knows, economists haven't got everything 0:10:36.480 --> 0:10:39.480 right on the big inflation call or the monetary policy 0:10:39.520 --> 0:10:43.320 call so far. So the market view, it's not insane. 0:10:43.640 --> 0:10:47.439 It's not outside the range of possible outcomes. At the 0:10:47.480 --> 0:10:50.440 same time, it's not at the center of the distribution. 0:10:50.840 --> 0:10:53.320 Is not the most likely path that the FED is 0:10:53.320 --> 0:10:55.560 going to have to follow. I think that there's going 0:10:55.600 --> 0:10:59.640 to be an acknowledgement of progress so far, but power 0:10:59.720 --> 0:11:03.520 is going to be a long way from declaring mission accomplished. 0:11:03.720 --> 0:11:07.000 He's going to signal that that Dovish pause. Putting too 0:11:07.080 --> 0:11:10.240 much money betting on that probably not a very good idea. Well, 0:11:10.320 --> 0:11:12.559 let's talk about the Fed's credibility here, Tom, because it's 0:11:12.600 --> 0:11:15.640 something that you and David write about. You both write 0:11:15.640 --> 0:11:18.480 about the fact that the Federal Reserve has lost control 0:11:18.640 --> 0:11:22.400 of inflation, and I'm wondering if the two of you, 0:11:22.640 --> 0:11:24.680 based on your reporting, I think that it has the 0:11:24.679 --> 0:11:28.040 tools necessary to bring it down because and you look, 0:11:28.080 --> 0:11:30.400 you go back to the you know, top haul era, 0:11:30.559 --> 0:11:35.840 Paul Vogler raising rates. So the FED absolutely has the 0:11:35.840 --> 0:11:40.079 tools to bring inflation under control. The question today is 0:11:40.120 --> 0:11:43.839 the same as the question back at Paul Vulcan movement, 0:11:43.920 --> 0:11:48.440 which you mentioned, what's the cost of bringing inflation under control? 0:11:49.120 --> 0:11:52.600 Back then, the cost was a deep procession millions of 0:11:52.600 --> 0:11:57.000 people unemployed. Today, Well, no one thinks the cost is 0:11:57.040 --> 0:11:59.840 going to be quite so high. But inflation is running 0:11:59.840 --> 0:12:02.600 it's six percent, more than six percent, three times the 0:12:02.679 --> 0:12:06.120 FEDS two percent target. Bringing it all the way back 0:12:06.240 --> 0:12:08.360 two percent is going to come at a cost in 0:12:08.440 --> 0:12:12.199 higher unemployment, potentially at the cost of a recession for 0:12:12.240 --> 0:12:15.000 the U. S. Economy. You know, it's interesting to you 0:12:15.040 --> 0:12:17.480 know time you write, eventually inflation will be back on target, 0:12:17.920 --> 0:12:20.360 in any immediate recession will end. There is, though, that 0:12:20.440 --> 0:12:24.320 conversation that maybe the targets are not going to be 0:12:24.400 --> 0:12:27.040 the ones of the future, that maybe those targets, especially 0:12:27.040 --> 0:12:30.280 inflationary targets, it's more like three or four percent going forward, 0:12:30.280 --> 0:12:33.680 that that will be forgive me the new norm, rather 0:12:33.720 --> 0:12:37.360 than maybe a two percent rate. So if we go back, 0:12:37.360 --> 0:12:43.040 if we wind the clock back to the biggest challenge 0:12:43.120 --> 0:12:46.320 for central banks was that they were in a world 0:12:46.320 --> 0:12:50.160 where inflation was too low, and what that meant was 0:12:50.200 --> 0:12:53.160 that when recessions hit, they didn't have enough room to 0:12:53.160 --> 0:12:56.319 cut rates, they didn't have enough room to stimulate the economy. 0:12:57.480 --> 0:12:59.240 There are a bunch of different ways of kind of 0:12:59.600 --> 0:13:04.160 soling that problem. Quantitative easing, forward guidance. They're both ways 0:13:04.200 --> 0:13:06.800 of adding a bit of extra policy space for central 0:13:06.880 --> 0:13:10.760 banks after they already take interest rates to zero. Another 0:13:10.840 --> 0:13:13.640 out of the box solution is to move to higher 0:13:13.720 --> 0:13:18.160 inflation target. Let's target three percent inflation, not two percent inflation, 0:13:18.480 --> 0:13:20.800 and then when bad times come, will have more room 0:13:20.880 --> 0:13:25.160 to cut. So that was the conversation in Who knows 0:13:25.200 --> 0:13:30.640 it could become the conversation again looking out right now 0:13:30.679 --> 0:13:34.679 though with inflation really at a painful level, the households 0:13:34.720 --> 0:13:38.400 and the Fed determined to bring inflation expectations under control. 0:13:38.679 --> 0:13:41.040 It's probably not the conversation which the Fed wants to 0:13:41.040 --> 0:13:43.600 be having. God, this is makes sense. Checks in hole 0:13:43.640 --> 0:13:47.720 meeting that more important. Um, Tom, thank you so much, 0:13:48.000 --> 0:13:51.800 Bloomberg Economic Chief Economist Tom Or Like Alo News out 0:13:51.840 --> 0:13:56.320 of China, Beijing has been working to curb the influence 0:13:56.320 --> 0:13:58.839 of tech industry leaders from Tensent to Ali Baba Group. 0:13:59.480 --> 0:14:02.760 This has to do. It's also even delisting from US exchange. Yeah, 0:14:02.760 --> 0:14:04.880 I'm really excited to speak to Kevin Carter, the founder 0:14:04.880 --> 0:14:07.560 of e m q Q. It's an emerging market's internet 0:14:07.559 --> 0:14:09.880 and e commerce e t F. Kevin, great to have 0:14:09.920 --> 0:14:13.080 you with us, How are you great? Thank you for 0:14:13.120 --> 0:14:14.800 having me, I should say you're joining us on the 0:14:14.840 --> 0:14:17.400 phone from San Francisco. Okay. So when I think of China, 0:14:17.520 --> 0:14:19.520 especially in the last few minutes months, I think of 0:14:19.600 --> 0:14:22.040 that call that JP Morgan made a few months ago 0:14:22.400 --> 0:14:27.800 calling China's Internet, China's stock market uninvestable. Uh. Then they 0:14:27.800 --> 0:14:30.800 came out and said that that was actually published in error. 0:14:31.160 --> 0:14:33.720 But I'll just ask you, what were your thoughts when 0:14:33.760 --> 0:14:39.240 you heard that. Well, you know, that day and that week, 0:14:39.320 --> 0:14:42.200 which was the middle of March, was a pretty volatile 0:14:42.360 --> 0:14:48.000 period for these companies. And the problem is the delisting threat. 0:14:48.720 --> 0:14:51.120 Of all the things, you know, the China faces and 0:14:51.160 --> 0:14:54.840 all the risks for investors, it's the most misunderstood and 0:14:55.040 --> 0:14:58.880 in my estimation it's the smallest risk, but it doesn't 0:14:58.880 --> 0:15:03.120 seem to matter because it moves the markets. And uh. 0:15:03.160 --> 0:15:06.520 And what we saw last week was that the state 0:15:06.560 --> 0:15:08.960 owned enterprises, the Chinese government is going to be less 0:15:08.960 --> 0:15:10.640 the state own enterprises. And I think this is a 0:15:10.680 --> 0:15:15.680 real positive move in solving the dispute because it's those 0:15:15.720 --> 0:15:19.400 companies that China is particularly sensitive to having the US 0:15:19.480 --> 0:15:23.040 government auditors noodle around in. Yeah, but I do wonder 0:15:23.080 --> 0:15:29.880 about Beijing Chinese officials. It seems chronically, uh getting involved 0:15:29.880 --> 0:15:33.720 in their private industry, you know what I mean, like 0:15:34.400 --> 0:15:38.840 setting rules, setting regulations, dialing back, dialing forward, helping out 0:15:38.840 --> 0:15:42.480 the economy, COVID lockdowns like it's it's really I think 0:15:42.520 --> 0:15:46.080 tricky for investors to kind of know what truly is 0:15:46.160 --> 0:15:48.800 coming when it comes to making an investment in a 0:15:48.800 --> 0:15:52.880 well known Chinese company. Well, let me first talk about 0:15:52.920 --> 0:15:57.840 the regulatory uh quote unquote crackdown. And the reality is 0:15:57.880 --> 0:16:00.760 that all over the world you have these giant tech platforms, 0:16:00.960 --> 0:16:03.920 the Fang stocks here in the US, and they've grown 0:16:03.960 --> 0:16:06.520 at incredible rates and they've taken over our lives that 0:16:06.560 --> 0:16:10.120 our stock markets and the regulators haven't really been able 0:16:10.120 --> 0:16:12.280 to keep up with them. And that's not a China situation. 0:16:12.320 --> 0:16:15.120 That's a global situation. And you see it here. You know, 0:16:15.160 --> 0:16:17.400 all of our Fang executives are up in front of 0:16:17.400 --> 0:16:20.920 Congress and the only difference is we have lobbyists and 0:16:21.040 --> 0:16:23.240 money involved in The Chinese I think are able to 0:16:23.240 --> 0:16:25.960 take a longer term view, and I think it's healthy 0:16:26.000 --> 0:16:28.720 what they've done, particularly with the you know, ant group 0:16:28.760 --> 0:16:31.840 ip O. So people can look at it negatively and 0:16:31.840 --> 0:16:33.920 and think, oh my gosh, the Chinese government is you know, 0:16:33.960 --> 0:16:38.280 they're not capitalist, they're gonna you know, Jack Moss missing, etcetera. 0:16:38.280 --> 0:16:40.520 But I think the reality is that they're just trying 0:16:40.560 --> 0:16:44.920 to regulate like everybody else's. Come on, you can't compare 0:16:45.000 --> 0:16:50.200 regulatory environment in China with the regulatory environment in a 0:16:50.320 --> 0:16:52.760 European market or the US market, can you. I mean, 0:16:52.800 --> 0:16:56.000 there's regulatory overset where there is a process, and then 0:16:56.000 --> 0:16:58.920 there's Jack Margoing missing. Like I'm just saying, how can 0:16:58.960 --> 0:17:03.960 you compare them? Well, China I think has advantages in 0:17:04.200 --> 0:17:08.640 regulatory matters. Remember, most of these people, a large percentage 0:17:08.640 --> 0:17:10.920 of their leaders have gone to our best colleges, particularly 0:17:10.960 --> 0:17:13.439 the financial system. Some of them have taught at our 0:17:13.440 --> 0:17:17.320 best colleges, and they're smart and they need to to 0:17:17.359 --> 0:17:20.200 regulate just as everyone else does. In in each sector 0:17:20.240 --> 0:17:22.639 is a little different. But I think the concerns that 0:17:22.720 --> 0:17:25.960 the Chinese government is going to you know, squash capitalism 0:17:26.080 --> 0:17:30.439 or greatly overblown. And the delisting threat in and of 0:17:30.520 --> 0:17:33.359 itself is the dumbest part of all the fears that 0:17:33.400 --> 0:17:37.400 people have. It's it's the smallest risk. It's a very 0:17:37.400 --> 0:17:39.520 small risk of it happened, and it's even smaller risk 0:17:39.560 --> 0:17:41.959 that anybody loses any money. De listing does not equally 0:17:41.960 --> 0:17:44.040 you lose your money. Well, what what should be the 0:17:44.280 --> 0:17:46.399 what should be the risks that investors should be concerned 0:17:46.400 --> 0:17:48.480 about that? If that's you know, in your words, the dumbest, 0:17:49.400 --> 0:17:53.240 Well the COVID. China hasn't had the COVID yet. I mean, 0:17:53.280 --> 0:17:55.240 they've got it there now and they're trying to battle it. 0:17:55.280 --> 0:17:58.800 And the COVID zero policy puts them in a very 0:17:58.800 --> 0:18:02.520 tough situation because you know they have on one hand, 0:18:02.520 --> 0:18:04.919 if they have COVID zero, there's going to be continued 0:18:05.000 --> 0:18:11.600 meaningful economic damage and consumer confidence issues, and and you're 0:18:11.640 --> 0:18:15.760 gonna have people continue rise and unrest. People don't want 0:18:15.760 --> 0:18:19.879 to be locked in their apartments for multiple month long periods. 0:18:19.880 --> 0:18:22.840 And I think that is a slow motion thing that's 0:18:22.880 --> 0:18:26.040 playing out because if they don't have zero COVID, then 0:18:26.040 --> 0:18:29.040 they're gonna lose a lot of people. And they're they've 0:18:29.200 --> 0:18:31.760 continued to stick with zero COVID, and I think it's 0:18:31.760 --> 0:18:35.080 a very right position that they're in trying to manage both. 0:18:35.320 --> 0:18:38.119 Kevin Um, we've got to run. Kevin Carter, he is 0:18:38.160 --> 0:18:40.199 founder of e m q Q, joining us on the 0:18:40.200 --> 0:18:44.560 phone from San Francisco and talking about certainly Chinese companies 0:18:44.600 --> 0:18:48.840 and some of the regulatory environment. This is Bloomberg Business 0:18:48.880 --> 0:18:52.680 Week with Carol Masser and Bloomberg Quick Takes Tim Stinovic 0:18:53.119 --> 0:18:56.560 on Bloomberg Radio. We've got with us Katarina Seminetti, Senior 0:18:56.600 --> 0:18:59.840 VP and private wealth adviser of at Morgan Stanley Private 0:18:59.840 --> 0:19:03.520 Wealth Management. She joined us on the phone from Philadelphia. Katerina, 0:19:03.680 --> 0:19:06.960 I feel like there are so many mixed messages, whether 0:19:07.000 --> 0:19:10.000 it's some of the weakening housing data, but we did 0:19:10.040 --> 0:19:12.159 have inflation data start to come down, still high on 0:19:12.160 --> 0:19:14.720 a historical basis, FETE still saying they're going to be 0:19:14.800 --> 0:19:17.480 largely you know aggressive, continue to raise rates, and then 0:19:17.520 --> 0:19:19.520 companies coming out and saying things are pretty good and 0:19:19.560 --> 0:19:22.159 we've got a tight labor market. How do you trade 0:19:22.160 --> 0:19:26.879 on this? Carol, thank you for having me on the show. Um, 0:19:27.000 --> 0:19:29.919 you said it best. You know, the data is confusing. 0:19:30.000 --> 0:19:34.440 We had really positive labor market data and that sort 0:19:34.720 --> 0:19:38.200 of confidents and investors seems to believe that FED will 0:19:38.240 --> 0:19:40.879 not slow down and rate will now you know, start 0:19:40.960 --> 0:19:43.240 slowing down and ring types as a metal of facts. 0:19:43.480 --> 0:19:46.880 You know, there's some possibility that they will even start 0:19:46.920 --> 0:19:50.320 cutting into the next year, you know. But all of 0:19:50.359 --> 0:19:54.080 this is despite of the fact that we're having still 0:19:54.160 --> 0:19:58.600 having high inflation, which of course effects consumer confidence that 0:19:58.720 --> 0:20:00.800 has been shaken by the fact that you know, we 0:20:00.880 --> 0:20:04.000 have an team inflation at this level. Yet you know, 0:20:04.240 --> 0:20:09.000 historically we are dealing with weeking economic data, declining earnings 0:20:09.040 --> 0:20:13.560 of just overall geopolitical risks and not to mention that. 0:20:13.600 --> 0:20:16.240 The question is is all of this going to bring 0:20:16.400 --> 0:20:19.480 us into, you know, a an environment of an ext 0:20:19.480 --> 0:20:22.840 recession and how major this recession is going to be? 0:20:23.119 --> 0:20:25.760 So the question is what should investors do right right? 0:20:26.359 --> 0:20:28.359 Because I just want to jump in kotterine at what 0:20:28.400 --> 0:20:30.520 should investors do? Because it seems like the market is 0:20:30.520 --> 0:20:32.920 not the equity market is not taken into account the 0:20:33.000 --> 0:20:36.200 environment that you described us. Now we're up close from 0:20:36.240 --> 0:20:40.560 those June laws in the s've adored Tim. I think 0:20:40.600 --> 0:20:43.840 that the important message here is that even though we 0:20:43.960 --> 0:20:46.920 are on the path to recovery, this past might like 0:20:47.280 --> 0:20:50.960 through additional volatility. So what investors can do right now 0:20:51.280 --> 0:20:55.800 is we encourage them to realize losses stay defenses in 0:20:56.040 --> 0:21:03.960 defensive sectors exceptors like financial, energy, healthcare, consumer staples, we're 0:21:04.000 --> 0:21:08.800 looking for additional yield generation for the stocks with um 0:21:09.720 --> 0:21:13.399 with strong cash flows that will generate income that is 0:21:13.480 --> 0:21:18.040 much needed here. The other side is that the that 0:21:18.160 --> 0:21:21.800 absolutely we're talking about dividend paying stocks uh and the 0:21:22.160 --> 0:21:25.639 focus on the defense respectors. Not to mention that the 0:21:25.680 --> 0:21:28.920 bond market is also showing a sign of improvement. While 0:21:29.000 --> 0:21:32.360 we're not quite confident that this is the end of 0:21:32.560 --> 0:21:34.800 the bear market, as a matter of fact, our view 0:21:35.160 --> 0:21:37.840 is that this rally is more of a bear market 0:21:37.920 --> 0:21:41.520 rally and the volatility is going to continue. Bond market 0:21:41.680 --> 0:21:45.600 is showing the science of improvement and it can act 0:21:45.640 --> 0:21:48.280 like corporate bonds can act like a safe pathing for 0:21:48.560 --> 0:21:52.639 investors in the time of you know, volatility UM because 0:21:52.680 --> 0:21:55.520 the really real question here is are we going to 0:21:55.800 --> 0:21:59.600 get a recession or not once that starts rate typs, 0:22:00.080 --> 0:22:02.800 And that's a major question out there. When will we 0:22:02.840 --> 0:22:06.520