Speaker 1: This is Bloomberg Business Wait inside from the reporters and
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Speaker 1: global business, finance and tech news, the Bloomberg Business Week
Speaker 1: Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Speaker 2: Well as the debt ceiling and budget negotiations continue in
Speaker 2: the US this week. In the new issue of Bloomberg
Speaker 2: Business Week, out on newsstands, online at Bloomberg dot com,
Speaker 2: slash BusinessWeek, and of course, on the Bloomberg Terminal, the
Speaker 2: cover story is this week's remarks. It's about king dollar
Speaker 2: and how the crown is slipping on the US green
Speaker 2: back and dollar denominated assets thanks to a few things
Speaker 2: going on, including that debt sealing standoff, regional bank failures,
Speaker 2: and a few other things. So let's get into it
Speaker 2: and to explain really the implications of America's self inflicted
Speaker 2: policy wounds with US. Is Bloomberg News Global Economy reporter
Speaker 2: Enda current on cam in our DC bureau. BusinessWeek Global
Speaker 2: Economics editor Christina Lindblad to my left, and the editor
Speaker 2: of Bloomberg This Week Magazine, Joel Weber to my right,
Speaker 2: both in our Bloomberg Interactive Brokers Studio Jiel I feel
Speaker 2: like the mighty US dollar. It's still rained supreme, but
Speaker 2: it's getting a bit tattered.
Speaker 3: Yeah, And as we were kind of talking about this story,
Speaker 3: it was like, wow, you just start to think about
Speaker 3: all the things that are poised to go wrong in
Speaker 3: the US. And I told my art department, I was like,
Speaker 3: just imagine this house where the floorboards are coming in,
Speaker 3: the walls are caving in, the debt ceiling, the ceiling
Speaker 3: caving in. Sounds like Matt Miller's house, right, And that
Speaker 3: led us to, you know, take a look at this
Speaker 3: story from from uh Celeia Mosen and the Current, and boy,
Speaker 3: it just felt very of the moment as all eyes
Speaker 3: continue to kind of like go towards DC and you know,
Speaker 3: this debt thing Matt is is bad, yes, and there's
Speaker 3: no resolution yet.
Speaker 4: It's got to be worry worrisome to our allies.
Speaker 1: And when you do this again and again and again.
Speaker 3: It makes I think a lot of people around the world,
Speaker 3: So you know, maybe this America thing isn't what we
Speaker 3: need as the gold standard here.
Speaker 4: Absolutely. I also wonder about something like the Russian invasion
Speaker 4: of Ukraine and the resultant American sanctions, you know, and
Speaker 4: the demands that we put on our allies and our
Speaker 4: other trading partners. Christina, how important is that because I
Speaker 4: noticed right around the time that started, the Saudis started
Speaker 4: selling their oil to China in un and so you know,
Speaker 4: for example, I talk about the Bloomberg Dollar index, that's
Speaker 4: probably not the deciding factor, right, the actual value of
Speaker 4: the currency, but what people choose to use in transactions
Speaker 4: is far more important.
Speaker 5: Yeah, there's been a big push since the invasion for
Speaker 5: some countries, you know, to start using more of their
Speaker 5: own currencies or the currencies of their trading partners. And
Speaker 5: I think it is definitely a result of the US
Speaker 5: trying to weaponize its leadership. It's it's basically, it's fingerprints
Speaker 5: are all over the worldinancial system, not just the use
Speaker 5: of the dollar, but the way it was designed, going
Speaker 5: back to Breton Woods, right, And I think you know, well, Russia,
Speaker 5: this was the first time a central bank was targeted directly,
Speaker 5: which with sanctions. So you know, Russia central bank, it's
Speaker 5: offshore reserves were cut off. And I think other countries
Speaker 5: looked at this and said, oh no, you know, we
Speaker 5: don't want to be in a similar situation. But aside
Speaker 5: from de dollarization and the aspirations other countries have about
Speaker 5: their own currencies, I mean, I think it's it's it's
Speaker 5: the self inflicted wounds that we really wanted to focus on, right,
Speaker 5: Like even small things that add up, like the app
Speaker 5: improprieties with stock trading amongst you know, central bank officials,
Speaker 5: you know, ethics questions in the Supreme Court. People sort
Speaker 5: of seem to think, oh, you can brush these things off,
Speaker 5: but they start adding up to the idea that you know,
Speaker 5: the US has this prestige right, and it's wearing down.
Speaker 3: So Inda, you you you're uniquely capable having been in
Speaker 3: Hong Kong for a while, and now you're on this
Speaker 3: side of the pond. What does it bring that international
Speaker 3: perspective to this? How vulnerable is US prestige in the
Speaker 3: American down.
Speaker 6: So even if a dead ceiling agreement has reached over
Speaker 6: the next week or so, the uptics of this are
Speaker 6: just horrible for the US economy globally, and for US
Speaker 6: leadership and for US influence. And you know, one side
Speaker 6: subplot from this death ceiling drama was that President Biden
Speaker 6: couldn't go to Port Moresby and Papua New Guinea for
Speaker 6: an unprecedented meeting with Pacific Island leaders. That might not
Speaker 6: send much to person on the street in the US,
Speaker 6: but those Pacific Islands are one of the fault lines
Speaker 6: for the tussle beween China and US for influencing that
Speaker 6: part of the world.
Speaker 4: And the month right, it's Asian American Pacific Islanders.
Speaker 6: Month right, and they have a summer going on for Moresby,
Speaker 6: and the US President couldn't go there, and that's the
Speaker 6: director result of what's going on. The other point is
Speaker 6: I have never seen a frenzy like we've seen over
Speaker 6: the past few weeks about talk of deed dollarization, both
Speaker 6: from the investment community, the community, and the policy world.
Speaker 6: Now we all know the obvious counterpoint as well, there's
Speaker 6: no alternative. Everybody knows there's no alternative for the moment.
Speaker 6: But I can tell you it's a talking point like
Speaker 6: it never has been before. And that reflects, I think,
Speaker 6: on the internalist function that we're seeing in US policy making.
Speaker 2: I have to say, and you know, you know, go back.
Speaker 2: I don't know how many years, or I feel like
Speaker 2: even a year ago that the thought of the US
Speaker 2: really defaulting on their debt like that was just non existent.
Speaker 2: But it does feel like that there's a lot more
Speaker 2: momentum based on kind of these self inflicted wounds that
Speaker 2: we keep seeing that you just wonder what the heck
Speaker 2: is going on in this country.
Speaker 6: Yeah, and by the way, if you just go back
Speaker 6: a few steps the blame game over inflation, there were
Speaker 6: rights and wrongs that story, But the point is the
Speaker 6: US missed the development inflation, and of course that's spread
Speaker 6: globally because US monitor policy goes globally because the dollar
Speaker 6: is what's used to buy and paid for stuff all
Speaker 6: around the world. So there was US inflation. Secondly, there
Speaker 6: was the US banking shock, the biggest shock since the
Speaker 6: financial crisis, that toppled one of the world's biggest banks
Speaker 6: over in Switzerland Credit Sweet And now, of course you
Speaker 6: have this row over the debt ceiling where the US
Speaker 6: government is having to come out and tell people, actually,
Speaker 6: we're not going to default something really you never thought
Speaker 6: you'd have to hear them say. So, as we try
Speaker 6: to articulate in the piece, nobody's arguing that there will
Speaker 6: be a default. Nobody's saying that it is the end
Speaker 6: of the dollar. But you'd have to say the optics
Speaker 6: of this are not good at all.
Speaker 1: Yeah.
Speaker 3: The quote from Sarah House of Wells Fargo definitely cut
Speaker 3: my attention because she says, you don't even need to
Speaker 3: actually default in the debt for there to be real
Speaker 3: damage to the economy. So walk through that, because, like
Speaker 3: I mean, obviously, the worst case in here here is
Speaker 3: that somehow we do default, the US does default. But
Speaker 3: even if we don't, all of this could be really bad, right,
Speaker 3: and maybe worth mentioning some of the Bloomberg economics data
Speaker 3: that you guys were able to incorporate into the story too.
Speaker 6: Yeah, I mean, obviously, at the very least, will prompt
Speaker 6: governments and central banks around the world to look for
Speaker 6: alternatives in terms of managing their investments. It might start
Speaker 6: to look away from the US government bonds, and that
Speaker 6: in itself might start to drive up US boring costs
Speaker 6: or time, and as we discussed earlier, it might start
Speaker 6: to accelerate the use of alternatives, pushing other trading partners
Speaker 6: into other camps. I mean, China seems to be out
Speaker 6: there every day of the week offering swap lines and
Speaker 6: trying to get people to buy and sell in their
Speaker 6: currency for example. So the fact that we're in this
Speaker 6: space at all is just corrosive and eroodes the US
Speaker 6: influents that we're talking about.
Speaker 2: So where do they go though, because in your story
Speaker 2: you talk about treasuries, right, twenty four trillion dollar market,
Speaker 2: You talk about central banks their official currency reserves still
Speaker 2: sixty percent. It's down certainly from a peak, but there's
Speaker 2: still so much that's you know, in demand when it
Speaker 2: comes to dollar denominated assets.
Speaker 4: Specifically, get what had treasurey eleven when we had our
Speaker 4: credit rating. Yeah, cut everyone poorting that treasure exactly.
Speaker 5: And we actually pointed that out in the story because
Speaker 5: there was a Bloomberg survey that came out this week
Speaker 5: that said, like, you know, I think they asked people where,
Speaker 5: you know, after gold I think it was like, treasure
Speaker 5: is worth the number I mean, and that is this
Speaker 5: irony right like that it's it's still the safe haven.
Speaker 5: But we were looking in the story at the long
Speaker 5: sweep of history too, and there was this great Golden
Speaker 5: Report that looked at how the British pound lost its reign,
Speaker 5: you know, and it talked about how there are these
Speaker 5: dynamics where one country over takes another in economic size.
Speaker 5: That doesn't automatically cause, like you know, for it to
Speaker 5: lose its status if it already has sort of world
Speaker 5: dominant status as its currency. Then but ALON can come
Speaker 5: a financial crisis, Alon can come.
Speaker 7: A world war, and that can be enough.
Speaker 5: So yeah, I think we're saying is you know, there
Speaker 5: is nothing right now as an alternative, But I don't
Speaker 5: the US should not be complacent. There are many many
Speaker 5: people who are actively engaged in wanting to find Altama.
Speaker 4: What do you think an alternative could be? You know, China,
Speaker 4: the Chinese Ue has talked about often. I'm not sure
Speaker 4: how likely that is because when it comes to censorship
Speaker 4: of currencies, you know, China would be right there with
Speaker 4: the US. Is it possible that a decentralized currency wouldever
Speaker 4: actually be a contender?
Speaker 5: Well, I think more than that, we could go back
Speaker 5: to a system before Bretton Woods, where there was many,
Speaker 5: many different currencies, right, yes, right, it's like Maynard, you know,
Speaker 5: John Maynard Keynes had won the debate, like you know,
Speaker 5: you know, so there, maybe we don't have a dominant
Speaker 5: currency anymore, but we have a more you know, sort
Speaker 5: of evenly spread, you know.
Speaker 2: And to command in on this right, you do have
Speaker 2: this great global perspective, and you've been overseas in Asia.
Speaker 2: I mean, the US economy is still larger than China's,
Speaker 2: and I do wonder what the thinking is realistically about
Speaker 2: who could be, you know, could relay replace the US
Speaker 2: as kind of the world's currency.
Speaker 6: Look, it's going to be a long road for the
Speaker 6: YU one. That's because China has really strict rules on
Speaker 6: moving money into and out of China. They've got like
Speaker 6: a closed capital count that's very different to the US.
Speaker 6: It's obviously there's got a long way to do on
Speaker 6: that respect. But nonetheless, every like I said, every day
Speaker 6: we get announcements Bangladesh, countries in Central Europe, Argentina talking
Speaker 6: about using either sloop lines or other facilities to trade
Speaker 6: and use the one for settlement. That doesn't mean the
Speaker 6: dollar will be toppled overnight, but it starts to add
Speaker 6: to Chana's influence over the global trading system and the
Speaker 6: global economy. And that's of course comming at a critical
Speaker 6: time when the US is right pushing back right against
Speaker 6: that influence. So the one doesn't have to become the
Speaker 6: world's number one currency overnight for China to gain more
Speaker 6: influence over the global trading system.
Speaker 3: But the fact that we're even having this conversation is
Speaker 3: part of what's insane about this, right, Like, the US
Speaker 3: has put itself in a situation where people are willing
Speaker 3: to like start having other conversations, and that all goes
Speaker 3: back to how America has not been able to kind
Speaker 3: of shore up its act time and time again.
Speaker 6: Yeah, and by the way, if I could just say ironically,
Speaker 6: the US has a very strong economy at the month.
Speaker 6: I mean again, you can argue about that, is there
Speaker 6: is there a slow downcoming or not. But we had
Speaker 6: another piece of Business Week this week with Reid Picker
Speaker 6: and mcllleague making the point that all these economis keep
Speaker 6: calling you sessions, but every time the data comes out
Speaker 6: every month, they're pushing those receession calls back. So the
Speaker 6: US is in a position of strength right now, but
Speaker 6: they're just pushing.
Speaker 4: These because of our world currency reserve status. Right, It's
Speaker 4: pretty easy to have a strong economy if you run
Speaker 4: trillion dollar deficits. I could do it myself. But let's
Speaker 4: talk about what's at stake here, Christina. What benefit do
Speaker 4: we get by having the world reserve currency?
Speaker 5: Well, right, we have a twenty four trillion dollar market
Speaker 5: of debt that everybody wants to buy, and that is
Speaker 5: the biggest thing we can finance, you know. I mean
Speaker 5: if you look at the you know, deficits forever and
Speaker 5: the and up to recently, the calculus was like that
Speaker 5: was okay because actually, even going into the pandemic, our
Speaker 5: service our debt service costs were falling, right, so we
Speaker 5: were like we had I mean, sorry, after the pandemic,
Speaker 5: we have this huge increase in debt, like and the
Speaker 5: debt servicing costs were falling. It would not take a
Speaker 5: much of an increase in those costs, this financing costs,
Speaker 5: you know, to go up for us to be completely
Speaker 5: different dynamics in this country.
Speaker 7: And talking about austerity, which is something we have.
Speaker 4: Yeah, right now, I think the way to average cost
Speaker 4: is about two and a half percent. But as long
Speaker 4: as we have nominal growth of seven, that's cool.
Speaker 7: Yeah, we can still carry it.
Speaker 5: Right, But you know, if this was another country to
Speaker 5: have the current account deficit that we have to have,
Speaker 5: like the like the net balance that we have, the
Speaker 5: investment position that we had, you know, investment investors would
Speaker 5: be going bonkers, you know and saying Oh my god.
Speaker 7: You know, this is a thing that's waiting to.
Speaker 2: Blow and what are the implications. So let's play it
Speaker 2: out here. So let's say the dollar is no longer
Speaker 2: the world's reserve currency. What are the implications, because I
Speaker 2: think about our investor audience and what they're thinking.
Speaker 6: Yeah, well, so, Christina Leeda, it will make things more
Speaker 6: expensive for the US in the globe. But also, by
Speaker 6: the way it perversely, it would be a knock to
Speaker 6: emerging economies as well, because even though they complain about
Speaker 6: the US dollar, the US dollar is a channel for
Speaker 6: them to raise finance. Because if there are a lot
Speaker 6: of emerging governments around the world, who if they went
Speaker 6: out to the public bond market to sell a bond
Speaker 6: in their own currency, nobody would touch it. But when
Speaker 6: they go to the global market and selling dollars, they
Speaker 6: can raise financing. So there is by the way, I
Speaker 6: just perverse angle to all of this that there's obviously
Speaker 6: anock to US influence. There could be a direct hit
Speaker 6: US funding costs by extension and the economic impact of that.
Speaker 6: But you know, perversely, I think some of those marging
Speaker 6: economies around the world you can't boor in their own currency,
Speaker 6: and need investors to trade dollars with them. They would
Speaker 6: also get a knock from this.
Speaker 5: But if you want to know what the real near
Speaker 5: term implications would be, you look at what happened in
Speaker 5: the UK when Teresa May proposed a budget that was unfounded, unfunded.
Speaker 2: How that rights you?
Speaker 5: That is the kind of freak out moment that we
Speaker 5: risk having if people do not want to buy, you know,
Speaker 5: if they lose some of their appetite for US.
Speaker 3: Treasures jump in interest and you know, as long as
Speaker 3: you're talking about the UK, one of the things I
Speaker 3: was telling Christina was like, like, let's not forget like
Speaker 3: Brexit shows what a real self inflicted wound can look like,
Speaker 3: and the US keep doing this, like, you know, can
Speaker 3: show you what what the worst case scenario could look like.
Speaker 2: Yeah, all right, guys, that is a wrap, so appreciate it.
Speaker 2: It is the cover story of the new issue of
Speaker 2: Bloomberg Business Week, as we said, out on newsstands, on
Speaker 2: the Bloomberg Tervel at Bloomberg dot com, slash BusinessWeek or
Speaker 2: thanks to end. A current global economy reporter at Bloomberg
Speaker 2: News in our DC Bureau, and Christina Limblack, global economics
Speaker 2: editor at Bloomberg BusinessWeek here in studio along with Jill Weber,
Speaker 2: the editor of Bloomberg Business Week. Here in our interactive
Speaker 2: Broker studio.
Speaker 1: You're listening to the Bloomberg Business Week podcast cats US
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Speaker 2: I feel like you know, every day we get a
Speaker 2: bunch of headlines out of China, and the most recent
Speaker 2: or at least every night, China's economic recovery losing some
Speaker 2: momentum after we saw an initial burst and consumer and
Speaker 2: business activity early in the year, so it's been prompting
Speaker 2: some calls from our policy stimulus to bolster growth. But
Speaker 2: I do feel like Matt, on any given day, we're
Speaker 2: either seeing the Chinese gu get more involved in a
Speaker 2: sector or there's concerns again about transparency or just figuring
Speaker 2: out China's role going forward.
Speaker 4: Yeah, I mean, I also think the next chapter. Investors
Speaker 4: are hungry for more information on China. Right Investors here,
Speaker 4: I think would like to know as much as possible
Speaker 4: and would like to get more insight on and understanding
Speaker 4: on how China.
Speaker 2: Works, right, And I think we thought we had the playbook,
Speaker 2: and there's actually our next guest has written a book
Speaker 2: that's called The New China Playbook, Beyond Socialism and Capitalism.
Speaker 2: Kayu Jin is the author. She's also professor of economics
Speaker 2: at the London School of Economics. She joins Matt and
Speaker 2: me here in studio. Kay, you really good to have
Speaker 2: you here with us. We only have six minutes. I
Speaker 2: wish we had like twenty because I love this subject.
Speaker 2: But our Adam Minta wrote a story about what the
Speaker 2: West gets wrong about China. What do we get wrong
Speaker 2: in our conversations, our questions and thinking about what China
Speaker 2: is up to right now?
Speaker 8: Well, first of all, that there's only one model that
Speaker 8: can work, Western style capitalism where China.
Speaker 2: Has that we believe that's the only thing.
Speaker 8: That that's the word, and that China has a centralized
Speaker 8: approach domined by an almighty state. It's not at all
Speaker 8: like that. It's the decentralized economic mechanisms, the mayor economy
Speaker 8: which I wrote about, that has galvanized creativity, innovation, pushing
Speaker 8: for reforms and even protecting the environment.
Speaker 4: So how I mean, aside from reading your book, which
Speaker 4: I'm sure is a great step, right, how can investors
Speaker 4: better understand the Chinese economy how it works when we're
Speaker 4: constantly looking at headlines that are rife with missin I
Speaker 4: don't know if misinformation is too strong, but definitely they're biased.
Speaker 8: Right, It's really important to separate hype from reality and
Speaker 8: the macro versus micro And even if the great leaders
Speaker 8: of any country, US and China say a lot of things,
Speaker 8: you might want not to read too much into the
Speaker 8: message and see what's actually going on on the ground.
Speaker 8: People who visit China will have a better view. People
Speaker 8: who look at data, which my book does and systematic
Speaker 8: evidence will understand better. But right now there's a coexistence
Speaker 8: of irreconciliable things that the West beliefs that can actually
Speaker 8: coexist at the same time in China.
Speaker 4: But getting on the ground is kind of what I
Speaker 4: was where I was going. Do you tell your students
Speaker 4: go to China? I mean, you can read my book, right,
Speaker 4: and you can study the country all you like, but
Speaker 4: if you don't go there, you're never going to really
Speaker 4: understand how this society works.
Speaker 8: If people can go there, they'll form a much more
Speaker 8: positive impression than if they won't. But it's also important
Speaker 8: to suspend this cultural and historical lens and this bias
Speaker 8: that we inherently have and look at China in a
Speaker 8: different perspectives, see it for its own, see through a
Speaker 8: different lens.
Speaker 2: Well, all right, slow down for a second, because what
Speaker 2: I mean many would say, you know, what is it
Speaker 2: in terms of China about human rights and restrictions. That's true,
Speaker 2: right in terms of what's at on social media. But
Speaker 2: are you saying and that folks in China coomfortable with
Speaker 2: that and that protectionism that their leaders are giving them.
Speaker 8: There's an implicit contract historically, since history between the people
Speaker 8: and the government that there's some level of deference, although
Speaker 8: not blind submission, in exchange for security, government accountability, responsibility,
Speaker 8: and economic delivery. That still holds today. They should talk
Speaker 8: to people on the ground and Chinese people ask them
Speaker 8: what they feel about these politicals.
Speaker 2: Everybody, though, help me out here with a younger generation,
Speaker 2: Like there's differently stories about unemployment rate in China surging
Speaker 2: to a record of twenty percent, tell me that there
Speaker 2: aren't younger Chinese individuals are like this isn't working for me.
Speaker 8: The new generation is super important for China's future. It's
Speaker 8: going to shape it, and it's meaning a relationship with
Speaker 8: the world. They're a positive force because look, they like
Speaker 8: to spend and borrow, not as save as much, and
Speaker 8: they're quite open minded and their values converge with the West.
Speaker 8: But today the pressing problem is that education has raised
Speaker 8: ahead of the economy, and many of the highly educated
Speaker 8: are not productively deployed.
Speaker 4: We do see an opaqueness though, right when jack Ma
Speaker 4: disappears or when a Bloomberg journalist is arrested and not
Speaker 4: heard from for a year, that's difficult for us to
Speaker 4: wrap our heads around. Is that something that Chinese people
Speaker 4: grow up understanding? Is that something that Chinese people accept?
Speaker 2: And what are we getting wrong about that? Because that's happening.
Speaker 8: Yeah, that spooks people, That spooks investors and confidence, which
Speaker 8: is what is missing the Chinese economy today. But look,
Speaker 8: you know the old playbook, it was about building factories, industrialization.
Speaker 8: You didn't need that much in.
Speaker 2: Go back to ye like missing journalists or missing jack Ma.
Speaker 8: Jackimad is called back now he's good.
Speaker 2: A year later. But it was really odd, right and
Speaker 2: here's a very prominent, you know, technology global figure and
Speaker 2: someone that China was proud of in terms of what
Speaker 2: he had built. So how do what did we get
Speaker 2: wrong about that? Or how do you?
Speaker 8: In the In the US, capital can arguably rises above politics.
Speaker 8: In China that can never be the case. This is
Speaker 8: why China's not a capitalist society. Jack Maw, without going
Speaker 8: to his exceptional case, is now needed very much entrepreneurs
Speaker 8: like him because the economy is needed. And so important
Speaker 8: thing to know is that policy can swift radically, change dramatically.
Speaker 8: Never read anything as permanent.
Speaker 4: But are you saying that it's okay for a government
Speaker 4: to just disappear people and that makes investors? That not
Speaker 4: make you uncomfortable even as a citizen, That would worry
Speaker 4: me as a person.
Speaker 8: It's not okay at all. And the government is learning
Speaker 8: the painful lesson of by by seeing that the economy
Speaker 8: hasn't rebound as quickly, that investors are not rushing back
Speaker 8: to look into China, that private entrepreneurs might be holding back.
Speaker 8: It's all happening today. That's a lesson.
Speaker 2: K you, what is the global value chain going forward?
Speaker 2: In China's role in that? Because it's been the manufacturer
Speaker 2: to the world and we were all we all benefited
Speaker 2: by it. Right, goods cost very little, But what is
Speaker 2: you know, their value chain going forward?
Speaker 8: China's aspiration is not really to compete become like us.
Speaker 8: It wants to be a bigger, smarter Germany. That means
Speaker 8: bolstered by the triangle of AI, communications and data. They
Speaker 8: want to think themselves as a technical industrial power, not
Speaker 8: a knowledge financialized economy like the youth.
Speaker 2: But can they get there with the concerns and kind
Speaker 2: of nervousness that many other worlds feel right now?
Speaker 8: Now you see comes to Chinese is why it's so
Speaker 8: hard to lead China. Right, it's so hard to If
Speaker 8: you step from outside, you're thinking, oh, this environment can
Speaker 8: never foster innovation.
Speaker 9: I don't.
Speaker 8: I don't agree necessarily with that, because on the ground,
Speaker 8: the domestic innovation system is all encompassing. This is a
Speaker 8: massive market form. Companies think that this is the fitness
Speaker 8: ground to train their own their own companies. And there's
Speaker 8: a close proximity proximity between AI, autonomous vehicles and chip
Speaker 8: industries that stimulate demands. I want to underestimate China's central
Speaker 8: advantages in technology.
Speaker 2: Ran out of time.
Speaker 4: Come back, we need more time.
Speaker 2: I'd love to. I wish we had great to be
Speaker 2: with you. I wish we had more time. So come
Speaker 2: back and let's continue this wonderful I would love it.
Speaker 2: Kenyu Jin, Professor Economics. That let's see the London School
Speaker 2: of Economics. Her book is called The New China Playbook
Speaker 2: Beyond Socialism and Capitalism. It is out now. This is Bloomberg.
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Speaker 2: All right, let's get to our guests, because I'm so delighted.
Speaker 2: We are so delighted to have back with us Marketshow
Speaker 2: President CEO at Aart finance here in our studio. So
Speaker 2: great to have you here.
Speaker 9: How are you, Carol? I'm doing fantastic. Thank you, Good
Speaker 9: to see you again.
Speaker 2: Yeah, it's great to see you. What I was thinking
Speaker 2: about it, I kind of was going back. It was
Speaker 2: about a year ago or so, the Equality Summit. You
Speaker 2: and John O'Brien and we talked about, you know, more diversity,
Speaker 2: certainly in the financial world. There were some really dismal
Speaker 2: statistics that are out there, and I think I shared
Speaker 2: them with you and everybody who was there. Are we
Speaker 2: getting better? You have some good news we're going to
Speaker 2: get into but are we getting better?
Speaker 9: We are getting better at the margin, But I do
Speaker 9: believe we can't take solace in just getting better, right,
Speaker 9: We've got to continue to improve. What we're really working
Speaker 9: towards is improving several generations of deficit that we've built
Speaker 9: in terms of investment, acumen, wealth building, and really creating
Speaker 9: new opportunities for generations that come after us. So we're
Speaker 9: working doubly as hard to try to make up for
Speaker 9: lost time.
Speaker 4: Yeah, I think it's incredibly important, and you know, we've
Speaker 4: covered this story for a long time. What you're doing
Speaker 4: now is you're helping kids that graduate from historically black
Speaker 4: colleges and universities to get jobs in finance. And as
Speaker 4: Carol pointed out, they're drastically underrepresented. Underrepresented even when you
Speaker 4: look at you know, the breakdown of wherever you are locally.
Speaker 2: Statistic here's one Yeah, diverse owned financial firms control just
Speaker 2: one point four percent of the eighty two trillion dollars
Speaker 2: of US investment fund assets. This was a foundation as
Speaker 2: of late twenty twenty one.
Speaker 4: I mean, it's even a problem if you just look
Speaker 4: at the breakdown of employees that make banks right, especially
Speaker 4: on the like on the levels where people earn real money,
Speaker 4: like investment bankers.
Speaker 9: And it's critical because in this economy, in our economic system,
Speaker 9: investing of capital and the return that you benefit from
Speaker 9: that is one of the critical ways to build wealth.
Speaker 9: I mean, there's a statistic that I heard at a
Speaker 9: conference a couple of weeks ago. It said, if you
Speaker 9: go back to nineteen seventy and you look at real
Speaker 9: GP growth since nineteen seventy, you're talking two to three
Speaker 9: percent annualized. If you look at return on investments or
Speaker 9: return on equity in that same period of time, you're
Speaker 9: talking five to six maybe seven percent, depending on how
Speaker 9: you're accounting for it. The punchline here is you cannot
Speaker 9: work your way to wealth in this country. Investing has
Speaker 9: to be a part of your strategy for building wealth.
Speaker 9: And if you're not involved in the investment economy, if
Speaker 9: you're not making those investments direct you can work your
Speaker 9: butt off for years and you will just get by right.
Speaker 9: Education helps, it helps you get a better job. But
Speaker 9: once you're in that better job, the growth rate for
Speaker 9: your personal wealth and the wealth of your family will
Speaker 9: likely not outpace growth in this country.
Speaker 2: Well, tell us about this program that you guys are
Speaker 2: doing at your company, and you've got the you know
Speaker 2: or your institution, your organization. You've got backing from some
Speaker 2: really well known firms, certainly in the alt investment space.
Speaker 2: We're talking about Apollo, We're talking about areas, we're talking
Speaker 2: about oak, oak tree, oak tree.
Speaker 4: Rather oak power markets powers.
Speaker 2: But I'm just thinking about you know, they want a
Speaker 2: more diverse group. They've talked about it. How has their
Speaker 2: involvement made a difference.
Speaker 9: Well, it's critically important that you have some of the
Speaker 9: biggest names in the industry making a commitment to this
Speaker 9: issue of diversity in the workplace in the investment world.
Speaker 9: I believe what's most critical is that these three firms
Speaker 9: that are competitive in many elements of this business have
Speaker 9: recognized that this is a systemic problem. Therefore, we need
Speaker 9: a systemic solution. They have to work together, all of
Speaker 9: those firms all the way from leadership down to analysts
Speaker 9: have been a part of volunteering, mentoring, and creating networks
Speaker 9: for students who are incredibly bright. But these schools had
Speaker 9: not had these companies on campus previously, so we hadn't
Speaker 9: built multiple generations recruiting. You're for recruiting these students through
Speaker 9: all finance. We've got seventy three students in our program
Speaker 9: and eight historically black colleges and universities across the country
Speaker 9: that have built the skills, the networks, and most importantly,
Speaker 9: the confidence that they can be successful in this industry.
Speaker 9: And we're graduating fourteen of them this year.
Speaker 2: But one of the things it's tricky, and you talked
Speaker 2: about this when we did the panel a year ago,
Speaker 2: is being at an organization where you are rare and
Speaker 2: one of the lone individuals, a black individual among companies
Speaker 2: that are still largely white. So how do you think
Speaker 2: about that? Folks ready to be in that environment? You
Speaker 2: yourself were in that environment.
Speaker 9: I was in that very environment when I came out
Speaker 9: of business school in two thousand and five. I was
Speaker 9: an equity research analyst, and I was one of the
Speaker 9: only black people in the entire division Bank of America,
Speaker 9: A Bank of America. And you know, times have changed,
Speaker 9: but that was less than twenty years ago, almost twenty
Speaker 9: I'm not that old yet, but almost twenty years ago.
Speaker 4: Easy, right, Not not easy at all.
Speaker 9: It requires a level of self assuredness that I think
Speaker 9: people don't fully appreciate. Right to be able to go
Speaker 9: into work in a place where you're the only person
Speaker 9: that looks like you, there's not a ton of shared experience,
Speaker 9: and to be able to perform and outperform every day
Speaker 9: requires a level of grit that's not rewarded all the time.
Speaker 9: And so one of the things that we're working with
Speaker 9: in all finances, we're creating a community of students that
Speaker 9: are coming from similar schools HBCUs that have incredible academic
Speaker 9: performance intellectual acumen, and building a network of them so
Speaker 9: that when they go out into the workforce, they have
Speaker 9: people that they can call and talk to, and then
Speaker 9: that gives them even greater confidence to operate when they're
Speaker 9: the only person that looks like them in the room.
Speaker 4: That's brilliant. And it's got to be a huge jump
Speaker 4: also from an HBCU into one of these private equity firms.
Speaker 4: Like you went to Duke for your MBA, right, so
Speaker 4: that must have also been a pretty you must have
Speaker 4: also been pretty lonely in that MBA program, right, Well.
Speaker 9: I will say that, And this comes full circle around
Speaker 9: what's happening in alternative investments. There are other industries that
Speaker 9: have tried to recognize the importance of diversity and inclusion
Speaker 9: early on, and I think the banks started this really
Speaker 9: back in the late eighties early nineties, and the investment
Speaker 9: banks did. Business schools have done well. My experience at
Speaker 9: Duke was actually pretty diverse. They did a great job.
Speaker 9: Dean Breeden, who's the dean during my time in Dean
Speaker 9: Bolding now have done a great job at the Fucal
Speaker 9: School of Business in terms of building diverse classes. Education,
Speaker 9: I think was leading the private sector and a lot
Speaker 9: of these places. And the reality is the alternative investment
Speaker 9: industry is, give or take, really forty or fifty years old.
Speaker 9: I mean, the main principles are still alive, the founders
Speaker 9: of firms are still alive. So it's you know, we
Speaker 9: were in the early stages of the industry. I think
Speaker 9: what's happening now and this is where you know, Howard
Speaker 9: and Tony and Mark Rowan from from oak Tree Areas
Speaker 9: and Apollo respectively, and Mike Herregetty and all the guys
Speaker 9: at those firms have said, we want to fix this
Speaker 9: while we're still here, right, and we want to take
Speaker 9: an active role in doing that, and we want that
Speaker 9: to permeate throughout our companies. So I can say in
Speaker 9: full honesty that these firms have made a commitment from
Speaker 9: the top all the way down to the analyst class,
Speaker 9: that diversity.
Speaker 4: Has got to be a part of their by the way,
Speaker 4: and not entirely out of altruistic reasons, I assume, right,
Speaker 4: because if you have more diversity, you can also make
Speaker 4: more money. You can generate more revenue, you can fatten
Speaker 4: your margins. You need have people who think think differently.
Speaker 9: The basic tenon of capitalism. Okay, more people doing good
Speaker 9: work creates more profit, right, And if you believe in
Speaker 9: GDP growth right totally, more people being productive increases GDP.
Speaker 9: So it's to the benefit of these companies, is to
Speaker 9: the benefit of this country that every man, woman and
Speaker 9: child that's in this country operates at their highest potential
Speaker 9: and their highest place of potential.
Speaker 2: Diversity of thought is one thing, but this is what
Speaker 2: you and I were talking about, and because I get
Speaker 2: a little you know, cranky that we've got these really
Speaker 2: wealthy companies and yet not everybody is benefiting in terms
Speaker 2: of workers that are there. Well, I know we'll get
Speaker 2: into this little bit later. You raise everyone up, you
Speaker 2: think about you grow the economy. There's more people who
Speaker 2: have money to put to work, right.
Speaker 7: And as part as society.
Speaker 2: I want to throw it over to you, Matt, because
Speaker 2: I feel like you had you were thinking about financial literacy.
Speaker 4: You were thinking so I think they're two separate things, right.
Speaker 4: One thing that the market is that you've done is
Speaker 4: you've got fourteen kids from these HBCU schools that are
Speaker 4: now going to advance into private equity.
Speaker 2: First graduating class, first graduating.
Speaker 4: Class, which I think is amazing. So you're you're placing
Speaker 4: these kids. Another thing that's separate is financial literacy, which
Speaker 4: may not just be, you know, a racial inequality problem.
Speaker 4: I never learned anything about right how to run my
Speaker 4: money and tell us forty and as a result, I
Speaker 4: have a lot less than I probably should. But we
Speaker 4: just But so are you doing both because you're helping
Speaker 4: these kids also in a sense, be financially literate by
Speaker 4: getting them ready to recruit for these jobs. And that's
Speaker 4: you know, going to an interview is something that a
Speaker 4: lot of kids aren't just aren't ready to do if
Speaker 4: they haven't gone to business school like you have.
Speaker 9: Right, So I will say for the kids that are
Speaker 9: in our program directly, we want to imbue them all
Speaker 9: with a sense of investment acumen and a healthy sense
Speaker 9: of where they feel comfortable taking risk. Right, That's what
Speaker 9: largely I believe twenty first century financial literacy is about.
Speaker 9: It's no longer about how to set up a checking
Speaker 9: account in a savings account, but it's about you know,
Speaker 9: how do you think about managing your tax liabilities?
Speaker 1: Right?
Speaker 9: How do you think about establishing your retirement accounts? You know,
Speaker 9: if you're five twenty nine counts, if you want to
Speaker 9: have kids, how do you think about financial planning and
Speaker 9: managing your risk? Knowing when to be liquid, knowing when
Speaker 9: to be illiquid. All of that just comes with comfort
Speaker 9: and confidence. And so it goes back to the investment point.
Speaker 4: You're investing earlier. You can't really build wealth through work.
Speaker 4: I was just walking down the street and I saw
Speaker 4: a sign for a certificate of a deposit that earns
Speaker 4: you five and a half percent and then I got
Speaker 4: back to my computer and saw that wage growth is
Speaker 4: only four and a half percent, So you can money
Speaker 4: makes more money than what.
Speaker 9: You got to invest. You know, the point that we're
Speaker 9: talking about is it's very hard to earn your way
Speaker 9: to wealth. You can, you know, get different levels of
Speaker 9: education and you make these step function increases. Right, you
Speaker 9: get an undergrad degree, you're going to have a better
Speaker 9: job than you did if with a high school diploma.
Speaker 9: You get a graduate degree, hopefully you'll have a better
Speaker 9: job than you would with an undergrad degree. But as
Speaker 9: you stay in that role, the growth of your way
Speaker 9: is over time is not going to allow you to
Speaker 9: earn real wealth. You've got to find ways to invest.
Speaker 9: You've got to find ways to increase your personal returns.
Speaker 9: And so the first step is getting comfortable with having
Speaker 9: that conversation. One of my favorite things with our fellows
Speaker 9: is just you know, we'll invite them to dinner and
Speaker 9: we'll have conversations about everything. We'll talk about music, we'll
Speaker 9: talk about sports, we'll talk about politics, and then the
Speaker 9: same level of confidence, we start having discussions about investing
Speaker 9: and things that they're thinking about doing, things that they're
Speaker 9: seeing in there in the workplace, during internships, for full time.
Speaker 4: And so if you can.
Speaker 9: Create a dialogue right where students feel is comfortable talking
Speaker 9: about the best new album from Beyonce or Drake, or
Speaker 9: you know what's happening in the National Football League or
Speaker 9: you know what piece of art they like, as they
Speaker 9: have about the financial decisions they're making, then you have
Speaker 9: true ownership and true confidence. And that's what it takes
Speaker 9: to build true you know, personal financial literacy.
Speaker 4: By the way, the best financial literacy conversation I ever
Speaker 4: had was an interview with ray Lewis on the floor
Speaker 4: of the New York Stock Exchange during the draft. He
Speaker 4: was in town to help these kids not blow you know,
Speaker 4: the millions of dollars they were getting there, which a
Speaker 4: surprising number of them actually do, right.
Speaker 9: I mean, I look at Tom Brady. Tom Brady's made
Speaker 9: a small mint playing football. Yeah, he is going to
Speaker 9: make more money being a broadcaster than he ever made
Speaker 9: playing football. But that conversation started with what do I
Speaker 9: do next? How do I properly price myself in that market?
Speaker 9: Is that something that I can only return on? And
Speaker 9: ray lewis a great job, I mean, one of my
Speaker 9: favorite all time football players, but he's also built a
Speaker 9: brand for himself, you know, as part of a part
Speaker 9: of color commentating for the NFL.
Speaker 4: And what's and he's in a hugely successful investor, right.
Speaker 2: No, but it's tragic how many athletes, professional athletes, to
Speaker 2: end up with no money ultimately. And so that's a
Speaker 2: whole other other chapter. What I'm curious is going back
Speaker 2: to the firms Apollo, Aras, Oatree that are involved, why
Speaker 2: weren't they reaching out beforehand helped me out there? Because
Speaker 2: they underst stood the importance of diversity of thought or
Speaker 2: diversity investments, Why weren't they doing it beforehand?
Speaker 4: It's a great question.
Speaker 2: It's a conversation around.
Speaker 9: That, and I think it's rooted in a couple of things.
Speaker 9: Number One, these firms grew very very fast. And so
Speaker 9: again they started off small, largely in the nineties, right,
Speaker 9: started off small, did not have full fledged HR departments, right,
Speaker 9: They were recruiting from schools that their current employees and
Speaker 9: investors went. Right. So, you know, when you're working at
Speaker 9: an investment firm, and I've been there, you don't want
Speaker 9: to spend a ton of time on hiring because you
Speaker 9: need to get people in place, trained up, so that
Speaker 9: they can, you know, put money at risk and they
Speaker 9: can earn returns. And so if you can say, look,
Speaker 9: i've had four people from this school, go back to
Speaker 9: your school and recruit some more people like you, right,
Speaker 9: Because if I can minimize the risk around who the
Speaker 9: investor is, I can maximize the value of some of
Speaker 9: the returns that I would expect to get. I think
Speaker 9: where that fail is number one, you don't fully understand
Speaker 9: what you're leaving on the table because guess what, there
Speaker 9: could be a better class of investors out there.
Speaker 7: Right.
Speaker 9: They could be kids at HBCUs, they could be women,
Speaker 9: they could be folks overseas. So at a certain point
Speaker 9: in time, once you scale, you say I need to
Speaker 9: find the best talent that I can find, even if
Speaker 9: it takes a little bit more.
Speaker 4: Effort after you scale, after you start.
Speaker 9: And so the key is right, that's the generation where
Speaker 9: we are now what I do believe, and I see
Speaker 9: it in new firms that are starting up. People are
Speaker 9: starting to think right off the bat, I'm going to
Speaker 9: spend a little bit more time and effort in building
Speaker 9: my team more diverse so that I don't have to
Speaker 9: do it down the line. And that's just part of evolution.
Speaker 4: Right.
Speaker 9: We went through generations where people said, I'm going to
Speaker 9: start a team and it's not going to be diverse,
Speaker 9: and I'm going to grow it as fast as I
Speaker 9: can and it's not going to be diverse, and I'm
Speaker 9: gonna end up with ex returns. And I'm happy with
Speaker 9: that because all I'm benchmarking and against is people doing
Speaker 9: the same thing.
Speaker 10: Right.
Speaker 2: Exactly now, we're in an.
Speaker 9: Era where it's been proven you bring a diverse workforce in.
Speaker 9: I mean, Mackenzie's done the STADI, it's a lot of
Speaker 9: the consultants and academia has done the studies. More diverse
Speaker 9: teams generate higher risk adjusted returns. It's the bedrock of
Speaker 9: investing diversification. It's right there. And so what people realize
Speaker 9: is now now that we've kind of stabilized and we
Speaker 9: know what the firm is going to survive and we
Speaker 9: know where it's going, we need to make sure that
Speaker 9: as we move into the next generation that we have
Speaker 9: the most competitive workforce imaginable.
Speaker 4: And they need to be greedy enough to overcome their biases.
Speaker 9: Greedy enough to overcome their bias.
Speaker 4: That's exactly right.
Speaker 2: We're gonna get t shirts printed out.
Speaker 4: I like it.
Speaker 2: No, it's like it's brilliant. Like you think about the
Speaker 2: biaseness that's been in recruiting, right, and you've really change
Speaker 2: it dramatically. We've run out of time. You're always welcome,
Speaker 2: erl thank you. Love to hear more as the graduates
Speaker 2: continue and how they're doing, so come back soon.
Speaker 4: Yeah, a lot want to follow their careers. It's so exciting.
Speaker 2: It is pretty cool stuff.
Speaker 9: Hopefully you'll have some of them on in years to come.
Speaker 2: Actually that would be great.
Speaker 9: I think they'll there'll be folks that are moving the
Speaker 9: needle in this industry of finance.
Speaker 2: I agree. All right, Marcus, thank you, be wow, thank
Speaker 2: you so much. Markus Shaw, his chief executive officer at
Speaker 2: All Finance. Here in our interactive broker's.
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Speaker 2: We've had a lot when it comes to artificial intelligence
Speaker 2: and certainly the next level AI We heard Pellant here
Speaker 2: earlier in the week, the CEO saying in terms of
Speaker 2: their strategy, they said, they're just going to take the
Speaker 2: whole market. We just talked about it with Ed Ludlow
Speaker 2: about Alphabet and Google.
Speaker 4: IBM has brought Watson back.
Speaker 2: IBM has brought Watson back.
Speaker 4: I mean to no fair fan fair at all.
Speaker 2: Hey, I's been around for a long time. We's just
Speaker 2: getting a lot smarter and we can actually talk to
Speaker 2: it if you will, or talk with it. So let's
Speaker 2: get another take on AI with us is Favorite Shaithe.
Speaker 2: He is co founder and CEO at the conversational messaging
Speaker 2: platform for commerce, marketing and support there called gup shop,
Speaker 2: and he's here in our Bloomberg Interactive Brokers studio Berry.
Speaker 2: Good to have you here with Matt and myself. Tell
Speaker 2: us a little bit. You guys are all in on AI.
Speaker 2: What specifically is it just about when we call a
Speaker 2: company you can be behind it in terms of your platform.
Speaker 11: Yeah, first, lead Carol, Matt, thanks for having me here.
Speaker 11: That's exactly right, right, helping businesses and brands build these
Speaker 11: conversational experiences or chatbots through which they can engage with customers.
Speaker 11: So for a consumer. The consumer experiences that chatting with
Speaker 11: the business is just as easy as chatting with a
Speaker 11: friend or family member. You ask them questions, and through
Speaker 11: those conversations you can get deals, offers, shopping payments, customer support, troubleshooting,
Speaker 11: and so on.
Speaker 1: Like so or not.
Speaker 4: About Matt Well, I have used some chatbots recently with
Speaker 4: a couple of your clients, for example Verizon, and the
Speaker 4: experience I had was nothing like a conversation. In fact,
Speaker 4: I thought it might have been the dumbest piece of
Speaker 4: technology that I've ever interacted with. Now, I was also
Speaker 4: angry at the time, to be fair about Verizon, nothing
Speaker 4: to do with the chatbot. But are you saying that
Speaker 4: your technology is able to do that stuff now, or
Speaker 4: that you know, five to ten years down the road
Speaker 4: they should be able to do that.
Speaker 11: No, I think it's more like six to twelve months now, right.
Speaker 11: What's changed, Okay, what's fundamentally changed a few months ago
Speaker 11: is that these large language models got It was a
Speaker 11: huge step function in capability, meaning it just dramatic improvement,
Speaker 11: and all of those are now trickling into these experiences.
Speaker 11: So it takes a little bit of time, but in
Speaker 11: the next few it's a matter of months because the
Speaker 11: hard part is done. It just has to be integrated.
Speaker 11: But the fact that they can handle these conversations in
Speaker 11: a natural way, understand, interpret, sense what the query is
Speaker 11: and then provide good responses, etc. It takes a little
Speaker 11: bit of work to optimize it for a particular enterprise.
Speaker 2: It's a big jump. What was it all of a
Speaker 2: sudden because AI, as we said, right, this has been around.
Speaker 2: But what happened? What was the big jump in particular?
Speaker 11: Yeah, now that's a great question.
Speaker 10: See AI.
Speaker 11: I mean I did my graduate research twenty thirty years
Speaker 11: ago in AI, and it's been going around for seventy
Speaker 11: eighty years, right, AA has been making constant progress out
Speaker 11: of the limelight. I think what happened literally over the
Speaker 11: last six months was it reached a point and basically
Speaker 11: three things came together, right. One is on the software
Speaker 11: algorithm side, there was ideas around deep learning and the transformer,
Speaker 11: which was amazing. The other is More's law, right, hardware
Speaker 11: getting better and faster. And then the third is data. Right,
Speaker 11: Internet data, the volume of data available for training has
Speaker 11: become available. So these three things together and then I
Speaker 11: guess it just a numeric thing which is at a
Speaker 11: certain number of parameters. Right at one hundred million, it
Speaker 11: wasn't good. But at one hundred billion parameters, suddenly it.
Speaker 2: Understands landing tipping point where all of the six became
Speaker 2: actually really productive.
Speaker 11: So from a media standpoint, it looks like it went
Speaker 11: from nothing to something. But you know, AI research has
Speaker 11: been going on making steady progress.
Speaker 4: But I mean when I talk to a chat bot
Speaker 4: online at any of these big companies, or if I
Speaker 4: get a computer on the hotline, it's just a horribly
Speaker 4: frustrating experience. And your business is very impressive a cup shop,
Speaker 4: you have a ton of clients, you have marquee investors.
Speaker 4: You know, you have a huge one point four billion
Speaker 4: dollar valuation. So I have a lot of respect for that.
Speaker 4: But I have to guess when you talk to people
Speaker 4: who interact with chatbots, they're all as frustrated as I am,
Speaker 4: because I'm finding myself saying agent, agent, agent, get me
Speaker 4: to a human because I can't get anything done with
Speaker 4: the I hate to call it AI because there's nothing
Speaker 4: intelligent about the current services.
Speaker 11: So I'll answer there are two aspects to it, right.
Speaker 11: Once is if you just step away from the US
Speaker 11: for a second, and the rest of the world where
Speaker 11: you don't have as many customer support agents as many
Speaker 11: businesses investing in these things. For consumers, if the baseline
Speaker 11: is zero, A chatbot it works half the time is
Speaker 11: a miracle, right, because it solves a lot of problems.
Speaker 11: You don't have to wait on hold, you don't have
Speaker 11: to wait in long queues, and so on. So there's
Speaker 11: a lot of people around the world.
Speaker 4: If your problem is solved, But if your problem isn't solved,
Speaker 4: then there's another two or three minutes that you've wasted
Speaker 4: talking to What you're.
Speaker 2: Saying is this is what we're finding. The more information
Speaker 2: that goes into it, it's going to get better customs.
Speaker 2: Fair we've all been in that point where we're so you're.
Speaker 11: Saying it's going to improve something, but now now we
Speaker 11: are on the cusp of it. Okay, because of what
Speaker 11: open ai and there's just one example, but there are
Speaker 11: many other models, you know, Meta and Google and even
Speaker 11: the open source community is just driving it. So it's
Speaker 11: solve the hard part of understanding language, which is the
Speaker 11: hardest thing. The second bit is packaging it into specific
Speaker 11: business conversations. That's remaining, but that's now like weeks or
Speaker 11: months away. We're doing that for a whole bunch of enterprises,
Speaker 11: you know, and you kind of have to handcraft the
Speaker 11: integration a little bit. But but we are even productizing that.
Speaker 2: How do you protect the accuracy and the purity of
Speaker 2: the information. It's not a case of we're doing something
Speaker 2: that we're googling, you know later on and we're trying
Speaker 2: to do our own research.
Speaker 11: And that's that's exactly what takes time.
Speaker 1: Right.
Speaker 11: These general language models are simple word prediction, meaning they
Speaker 11: just make up their generative right, so they kind of
Speaker 11: make up an answer. It may not be accurate. So
Speaker 11: but in a business context, you need accurate information, so
Speaker 11: we do. There's a process called fine tuning, there's something
Speaker 11: called prompt engineering, and then you also link it to
Speaker 11: plugins which give you the actual data. Right, so for example,
Speaker 11: what's the interest rate on a checking account? I mean,
Speaker 11: you can't make up an answer, even though AI will,
Speaker 11: so there it looks up the right answer from the
Speaker 11: right place, or.
Speaker 2: It's we're going to know as users that it's the
Speaker 2: right answer.
Speaker 11: Well, so the business, the business has the responsibility and
Speaker 11: the owners to make sure because they also have the
Speaker 11: liability for what the bought says, right, So I think
Speaker 11: they are. This is exactly where we work with them
Speaker 11: to make sure that the conversations are precise, that are accurate,
Speaker 11: the information works, and so on, and then there's a
Speaker 11: lot of deba and so on. Right, it was Look,
Speaker 11: the web wasn't built overnight, and neither will these chat bots.
Speaker 11: But I think as they get optimized and refined, I
Speaker 11: think it'll be it'll be good enough for you, Matt.
Speaker 4: I'm excited. I'm looking forward to the future. I'm just
Speaker 4: saying you have a little time, a little bit hurt.
Speaker 2: She's going to learn her language. It takes some time.
Speaker 2: Exactly how busy are you? Just ten seconds? Are people
Speaker 2: calling you off the phone or just give me an idea?
Speaker 11: Yeah, this is accelerating. I mean we are doubling business
Speaker 11: here over year, and it's accelerating even more.
Speaker 2: All right, well, come on back so we can you know,
Speaker 2: make Matt happy. That is future chat GBT experiences will
Speaker 2: be better.
Speaker 11: Even better. The next time I'm here, you'll talk to
Speaker 11: my chatbot.
Speaker 4: Ye, all right, here he'll do the interviews for you.
Speaker 2: All Right, we get a run.
Speaker 1: You're listening to the Bloomberg Business week podcast. Catch us
Speaker 1: live weekdays from two to five pm Eastern on Bloomberg Radio,
Speaker 1: the Bloomberg Business App, and you too. You can also
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Speaker 1: Say Alexa play Bloomberg You Love Them. Thirty.
Speaker 2: Something we wanted to get to yesterday and got kind
Speaker 2: of thrown off course course course because of the budget negotiations,
Speaker 2: is just kind of doing a deep dive into Apple
Speaker 2: because it's definitely been an outperformer, easily outperforming the Nasdaq
Speaker 2: one hundred this year. Just a little bit higher in
Speaker 2: today's session, but it's up more than thirty percent here
Speaker 2: this year. So a lot of news that has been
Speaker 2: going on Berkshire Hathaway up being its current holdings. We
Speaker 2: got that over the weekend, but we wanted to check
Speaker 2: in with our own Mark German, who follows this company
Speaker 2: inside and out breaks exclusives. He's Bloomberg News Chief Technology correspondent,
Speaker 2: and Mark Joints is from our LA bureau.
Speaker 9: Mark.
Speaker 2: It is good to have you here with us, and
Speaker 2: one of the reasons we kind of wanted to dig
Speaker 2: into it is there are some questions about the valuation,
Speaker 2: you know, of Apple and what are the catalysts that
Speaker 2: kind of get this there. When you look at this company,
Speaker 2: what does the next six to twelve months look like?
Speaker 12: Well, the next six to twelve months is going to
Speaker 12: be almost entirely about the upcoming reality headset.
Speaker 1: Right.
Speaker 12: Apple will be announcing this new mixed reality product which
Speaker 12: uses both.
Speaker 13: AR and VR.
Speaker 12: AR meaning that you can see your real world through
Speaker 12: the lenses, right VR meaning you're all encompassed, all surrounded
Speaker 12: by your three D content.
Speaker 7: Right, so a mix of both.
Speaker 12: They're going to announce that product on June fifth, so
Speaker 12: in about three weeks from now at their Developers conference.
Speaker 12: This is going to be their first major new product
Speaker 12: since the Apple Watch was announced almost eight years ago,
Speaker 12: right or went on sale, I should say eight years ago.
Speaker 12: The product is alf was announced in twenty fourteen, and
Speaker 12: so this is going to be one of Tim Cook's
Speaker 12: last big swings as CEO, and the company believes that
Speaker 12: this can set the foundation for a post iPhone era. Right,
Speaker 12: So all the talk is going to be about that
Speaker 12: headset for the next year or so, and the company
Speaker 12: hopes for many years beyond that.
Speaker 4: So the difference between this and the Watch, and a
Speaker 4: lot of people are making that comparison mark because you know,
Speaker 4: the watch at first had kind of lackluster take up,
Speaker 4: but it wasn't nearly as clunky as this thing is.
Speaker 4: I mean, is it going to have a separate battery pack?
Speaker 4: Is it going to be a whole helmet or just
Speaker 4: the goggles? You know, it's gonna be difficult to keep
Speaker 4: on your head. Can you walk around with it?
Speaker 9: On?
Speaker 4: What's the story with this product?
Speaker 12: So the goal is for this product to be as
Speaker 12: portable as possible. Right, So this is going to be
Speaker 12: a standalone headset, all in one, as you mentioned, save
Speaker 12: for the battery. The battery will be external, right, It'll
Speaker 12: last about two to three hours per battery pack. You'll
Speaker 12: be able to swap those out if you want throughout
Speaker 12: the day or charge over a connection to a power adapter.
Speaker 12: And the idea is you will be able to walk
Speaker 12: around with it.
Speaker 1: Right.
Speaker 12: This is not something that you're necessarily going to have
Speaker 12: to be. It's not necessary something you'll have to be
Speaker 12: stationary to use.
Speaker 1: Right.
Speaker 12: The idea is that you could wear it in one
Speaker 12: room in your home or in your office. And let's
Speaker 12: say you're playing a game right in your living room, right,
Speaker 12: and so you're in your living room, knows the game
Speaker 12: was being played in your living room, and then you
Speaker 12: walk to your kitchen and it will open Safari because
Speaker 12: the last time you were in your kitchen, you were
Speaker 12: browsing the web. So the headset has special sensors to
Speaker 12: know where you are in space, right, so you can
Speaker 12: pick up where you left off depending on where you
Speaker 12: were using the device in physical space. So to answer
Speaker 12: your question, yes, this is something you could walk around wearing,
Speaker 12: but not necessarily something that you're probably gonna want to
Speaker 12: walk around wearing outside.
Speaker 7: You know, it's funny.
Speaker 12: One demo internally, one presentation about the product talked about
Speaker 12: wearing this thing to a party. Right, That's not something
Speaker 12: anyone is ever going to do.
Speaker 4: I feel like a person that where's this thing? Won't
Speaker 4: be invited to any parties there You're hanging out mom's
Speaker 4: basement is more likely. Dave Lee wrote an opinion column
Speaker 4: on this, suggesting that Apple aim it more to the
Speaker 4: peloton crowd than the PlayStation crowd. What do you think
Speaker 4: about that mark? Because Apple has really embraced the healthcare market.
Speaker 12: I think this product is going to take a scattershot approach,
Speaker 12: and so I don't think that's correct in terms of
Speaker 12: where they're going to market it towards. I think that
Speaker 12: they see this as a multipurpose device that could do
Speaker 12: essentially whatever you want it to do, right, Like so
Speaker 12: the iPad, right, you can do anything on the iPad
Speaker 12: for making FaceTime calls, to writing software, to using software,
Speaker 12: to playing games to watching movies. Everyone knows all the
Speaker 12: use cases you can have with an iPad, same with
Speaker 12: every other Apple device, right. So I don't think they're
Speaker 12: cornering theirselves in here. So there's going to be features
Speaker 12: for working out probably coming next year. There's going to
Speaker 12: be meditation features, right, but there's also going to be
Speaker 12: movie watching, gaming, productivity, content consumption. One of the big
Speaker 12: ones is FaceTime, so facetiming in virtual reality using a
Speaker 12: virtual avatar that the device is able to create based
Speaker 12: on scanning your body with its twelve to sixteen external
Speaker 12: cameras and sensors.
Speaker 4: How it makes improvements, right.
Speaker 12: And that that's going to be a core part of
Speaker 12: the product, as well as being able to work with
Speaker 12: people remotely and do co presence and collaboration remotely. Right,
Speaker 12: So me and you right in some universe could both
Speaker 12: have this headset.
Speaker 2: That's terrifying right there, But go ahead, Mark.
Speaker 12: It's terrifying if Mad has the headset. But like you know,
Speaker 12: he could be using the headset in New York, I
Speaker 12: could be using in LA and we can be working
Speaker 12: on a presentation together remotely while facetiming all on virtual reality.
Speaker 12: So right, I'm not and I say it could be.
Speaker 7: I'm not saying we'll want to.
Speaker 2: Right, So Mark, I'm curious, like what kind of product
Speaker 2: does this become in terms of, you know, revenue size.
Speaker 2: I'm looking at right. iPhone revenue for the second quarter
Speaker 2: was what over fifty one billion dollars. If I look
Speaker 2: at wearables, it was about an eight point seven six
Speaker 2: billion dollar business. I mean, how big a business are
Speaker 2: folks thinking that this could become? For Apple?
Speaker 12: So they're anticipating selling about nine hundred k units in
Speaker 12: the first year, right at a price point around three
Speaker 12: thousand dollars, So in terms of revenue, you're talking about
Speaker 12: three billion dollars per year.
Speaker 7: That's at the get go.
Speaker 12: But the company does anticipate or hope that this becomes
Speaker 12: about the size of the Apple Watch or the iPad
Speaker 12: right at some point, and that could be a twenty
Speaker 12: to thirty billion dollar a year annual business. Now will
Speaker 12: that ever happen? I don't know, right, that's their hope.
Speaker 12: Those are their internal projections. But I am quite optimistic
Speaker 12: about this device. I think it's going to follow a
Speaker 12: similar similar trajectory to the Apple Watch, where the get
Speaker 12: go the Apple Watch was sluggish. The app situation was,
Speaker 12: I would say terrible still is to be honest, Actually,
Speaker 12: there was a lot of confusion about what the product
Speaker 12: was for. It was really all over the place. Apple
Speaker 12: actually pitched the first one. There were three things they
Speaker 12: pitched the first Apple Watch for telling the time, health,
Speaker 12: as well as what they call intimate communication, sending your
Speaker 12: heartbeat to people. Right, nobody uses the Apple Watch to
Speaker 12: tell the time as a primary use case. Right, I
Speaker 12: wear an Apple Watch, and I can tell you I
Speaker 12: only check the time on my phone. Still, right, healthcare
Speaker 12: they nail, Yeah, okay, but this communication stuff, nobody uses
Speaker 12: similar ways.
Speaker 2: And they like, don't judge Matt and me, but we're
Speaker 2: both are saying, well, I use my watch to check
Speaker 2: the time.
Speaker 4: I mean, we're twice Mark's age, but yeah, I use it.
Speaker 4: Like when I'm cooking, I have the timer right here
Speaker 4: and I just bang, you know, three minutes, aside of
Speaker 4: him frying some chicken steaks. And so that's probably the
Speaker 4: main thing I use it for other than healthcare stuff, right,
Speaker 4: tracking my sleep, tracking my heart, I can text.
Speaker 2: Though it's a really cool I don't know, I can
Speaker 2: see how it becomes a bigger part. Can I ask
Speaker 2: you something I want to go back to how you
Speaker 2: started that? Is this really Tim Cook's last hurd And
Speaker 2: do we need to start thinking about a Apple post
Speaker 2: Tim Cook? Already?
Speaker 13: Uh?
Speaker 12: No, one, No, I don't think it's his last.
Speaker 7: It's one of his last.
Speaker 12: I think the last will probably be the car. And
Speaker 12: so no, I'm not already thinking. Of course, Actually I
Speaker 12: am thinking about a post Tim Cook Apple, But this
Speaker 12: is not something that's going to happen in the near term, right,
Speaker 12: I mean, he's in his early sixties, ball bikers in
Speaker 12: his early seventies, and he's still at Disney, And you
Speaker 12: get the sense that they're built kind of similar in
Speaker 12: terms of, you know, their desire to be part of
Speaker 12: the company.
Speaker 1: Right.
Speaker 4: I would guess that.
Speaker 12: If Tim Cook, you know, does eventually step down, or
Speaker 12: when Tim Cook eventually steps down, he'll probably still you know,
Speaker 12: be on the board maybe they'll make him chairman or something.
Speaker 4: Right, and they'll come back after a successor fails.
Speaker 12: Oh, I don't know if his successor will fail. I
Speaker 12: don't know who successor for sure will be. But I
Speaker 12: think that I would just guess that Tim Cook would
Speaker 12: do a better job than Bob Ayger in terms of
Speaker 12: planning out, you know, a succession plan there, right. I
Speaker 12: mean it felt like the Bob Iger transition in his
Speaker 12: departure at at the height of COVID right was extraordinarily abrupt.
Speaker 12: I would imagine that Apple's succession plan will not be
Speaker 12: as abrupt.
Speaker 4: As who do you think, one mark? Who are the
Speaker 4: people in the running to be his successor?
Speaker 12: Yeah, you know there's four people right now that I
Speaker 12: have my eye on. Number one is Jeff Williams.
Speaker 7: He's the COO.
Speaker 12: He's in charge of all the health initiatives company wide
Speaker 12: operations in the design team reports to him now, and
Speaker 12: he led engineering for the Apple Watch, and he's quite
Speaker 12: intimately involved with this headset project as well, and he's
Speaker 12: essentially the chief decision maker on new products at Apple, right,
Speaker 12: And so he would be if Tim Cook were to
Speaker 12: step down the next three years, or if something were
Speaker 12: to happen or they needed to do an emergency succession plan.
Speaker 12: You don't look further than Jeff Williams as the next CEO, right.
Speaker 12: A few other options on the executive team right now
Speaker 12: are Greg Joswiak. He's an Apple lifer, been there for
Speaker 12: three decades, Head of marketing, head of product management, a
Speaker 12: real key player, probably a top three or four key
Speaker 12: player on Apple right now. Tirdre O'Brien. She's been at
Speaker 12: Apple also for over three decades. She's been in many
Speaker 12: roles across the company, from head of retail to head
Speaker 12: of human resources to a senior executive on the operations team.
Speaker 12: She's also someone that I wouldn't be shocked if she
Speaker 12: were the new CEO.
Speaker 4: And then there's.
Speaker 12: John John Turnas. He comes up because he's the youngest
Speaker 12: member of the Apple executive team. So Tim Cook weren't
Speaker 12: to retire for eight more years. You want someone a
Speaker 12: bit younger, and he's head of hardware engineering.
Speaker 2: All right, Mark love this. I was so sure Matt
Speaker 2: was going to go into the Apple car, but I
Speaker 2: guess that'll be.
Speaker 4: Well, I'm waiting. Mark comes up with, all.
Speaker 2: Right, Markerman, we love it. Chief Technology Coursepond at Bloomberg News.
Speaker 2: Thank you, Thank you from our La bureau.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekdays from two to five pm Eastern on Bloomberg Radio,
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Speaker 1: Play Bloomberg, e Love and thirty Last Mom.
Speaker 2: Bloomer News putting out a story reporting that an international
Speaker 2: developer backed by Tiger Woods and justin Timberlake, We're joining
Speaker 2: an effort to build a sprawling residential community with stores
Speaker 2: and a revamped golf course in Wellington. It's a South
Speaker 2: Florida equestrian town near Palm Beach. It's also Wellington has
Speaker 2: been I guess home to Microsoft co founder Bill Gates'
Speaker 2: heard of Tommy Lee Jones, Bruce Springsteen.
Speaker 4: Tommy Lee Jones, the actor, that's the actor.
Speaker 2: They've owned homes there apparently. I don't know if they
Speaker 2: still do, but they have.
Speaker 4: That is interesting, kind of I guess.
Speaker 7: I guess.
Speaker 4: So I'm not really a South Florida guy like the.
Speaker 2: Keys, you know, Palm Beach kind of nice.
Speaker 4: Yeah, it's okay, I've been there. Okay, you know the
Speaker 4: state of the breakers. Did the whole golf thing.
Speaker 2: Kind of a kind of a New york A kind of.
Speaker 4: Yeah, it was pretty good. I mean, if I have
Speaker 4: vacation time, I'm going to go somewhere different, Okay, if
Speaker 4: I want to go to the beach, to a secluded beach.
Speaker 4: If I want to move somewhere like, you know, I
Speaker 4: would rather have the mountains. I'm more of a Montana person.
Speaker 2: I have seen you wear a cowboy hates actually around
Speaker 2: cowboy boots. Do you have cowboy boots?
Speaker 4: I have a few pairs of cowboys every time I
Speaker 4: go to Dallas, you know, and I tend to buy
Speaker 4: a pairent. My goddaughter lives in Dallas, so I go
Speaker 4: there occasionally. I have to go watch the Giants play
Speaker 4: the Cowboys.
Speaker 2: We want to talk South Florida with someone who knows
Speaker 2: a lot about what's going on when it comes to
Speaker 2: South Florida real estate. Daniel de la Vega, president of
Speaker 2: One Southby's International Realty, joins us on Zoom from Miami. Daniel,
Speaker 2: good to be talking with you and great to have
Speaker 2: you here with Matt myself. Hey, talk to U a
Speaker 2: little bit about South Florida. And what's going on. What
Speaker 2: are we seeing in terms of prices and valuations.
Speaker 14: You know, South Florida is in an incredible place right now.
Speaker 14: First quarter was incredible. I want to talk about the numbers.
Speaker 14: I want to give you all the information that the
Speaker 14: viewers want. But first, Matt, what a segue into talking
Speaker 14: about South Florida.
Speaker 10: We got to get you down here. Maybe you have
Speaker 10: not experienced it with me yet, so.
Speaker 4: I think you know part of it.
Speaker 10: Daniel's gonna have a place that you love.
Speaker 4: I'm a little bit bitter because, to be honest, a
Speaker 4: lot of my friends from the Upper West Side, previously
Speaker 4: from the Upper West Side of New York City, are
Speaker 4: now living down in West Palm Beach, and it's like
Speaker 4: one after the other after the other, and now it's
Speaker 4: like I don't know anyone else up here.
Speaker 14: Yeah, I mean, listen, we're representing Peer sixty six in
Speaker 14: Fort Lauderdale, which is Tavistock Development Group, which you previously
Speaker 14: mentioned in regards to the development in Wellington, and that
Speaker 14: is just the epitome of South Florida living with a marina,
Speaker 14: with a hotel with residences. So they do a really,
Speaker 14: really great job and I'm sure Wellington is going to
Speaker 14: be spectacular as well. But look, South Florida is doing
Speaker 14: incredibly well. Guys from an you see.
Speaker 2: You keep saying yeah, give us some numbers because you
Speaker 2: keep saying incredible.
Speaker 14: We saw we saw a major increase in closed sales,
Speaker 14: average sales price, new pending sales, months of inventory, yes,
Speaker 14: is up.
Speaker 10: But in closed sales in all of South Florida Q four.
Speaker 14: Twenty two over Q one, we saw fourteen point seven
Speaker 14: percent increase.
Speaker 10: Average sales price. We saw a.
Speaker 14: Six point six percent increase. New pending sales were up
Speaker 14: sixty six percent. I mean, that's an incredible statistic, right,
Speaker 14: And again, months of inventory in both single family homes
Speaker 14: and condominiums are up on average twenty percent. So that's
Speaker 14: good because as we see people moving to South Florida,
Speaker 14: we want them to feel like it's an affordable place
Speaker 14: for them to live. So as I see the increase
Speaker 14: in inventory as a positive for our market.
Speaker 4: I mean, one of my best friends is a I
Speaker 4: won't say his name, but Morgan Stanley guy. He was
Speaker 4: up here now he's moved down there. His office is,
Speaker 4: he says, just a couple of blocks away from his
Speaker 4: place in West Pond Beach, and he says the restaurants
Speaker 4: and the bars that he and his you know, click
Speaker 4: Noe love from up here all operate down there as well.
Speaker 4: So is it really just like a slice of Manhattan,
Speaker 4: you know in Florida.
Speaker 1: Yeah.
Speaker 14: I mean, look, we've always said Manhattan South, but I
Speaker 14: think we're becoming Manhattan more and more. I mean, we
Speaker 14: had one hundred and thirty new companies moved to Miami alone.
Speaker 14: We had we had twelve percent of the five point
Speaker 14: eight million new business application filed nationally happen in the
Speaker 14: state of Florida. A lot of that happening in South Florida.
Speaker 14: You just heard the numbers from Miami. So we've got
Speaker 14: twelve hundred and seventeen people moving here a day. I
Speaker 14: don't see those numbers slowing down. And to your point, right,
Speaker 14: it's not just the jobs that are moving, it's the
Speaker 14: families that are moving. And we've seen a new influx
Speaker 14: of the kind of person.
Speaker 10: That moves here.
Speaker 14: I mean traditionally saw we traditionally, we saw flight capital,
Speaker 14: we saw a lot of Latin America. We're seeing fifty
Speaker 14: percent more domestic now over the last call it twenty
Speaker 14: four months. So it's people living here to live here,
Speaker 14: so they want those things that you're talking about, man,
Speaker 14: and we're delivering them. I mean, look, just think West
Speaker 14: Palmer had lunch at the Bar at Alicia, an incredible restaurant.
Speaker 10: It's a sister restaurant, the st Ambrose.
Speaker 14: So everybody's thinking creatively how they can bring new brands
Speaker 14: to our market.
Speaker 2: Daniel, how much of it is finance and financial types
Speaker 2: that are moving there?
Speaker 10: Eighty percent of our transactions.
Speaker 14: Are cash that was happening during the pandemic and we're
Speaker 14: still seeing that happen now.
Speaker 2: No, no, no, no, I mean how much of it is
Speaker 2: people from the financial sector, because we've done those stories
Speaker 2: a lot. How much that's okay, that's okay, Yeah.
Speaker 14: It's it's you know, I would say it's about fifty
Speaker 14: percent of the people moving in South Florida from the sector.
Speaker 4: Yeah, it really is. Like Wall Street has moved down,
Speaker 4: not just New York, right, but Chicago is one of
Speaker 4: the big Citadel offices, Ken Griffin's company moving down there?
Speaker 2: Is it?
Speaker 4: Is it just pushing property values up in the surrounding
Speaker 4: communities as well. I imagine, you know, I'm from a small
Speaker 4: town in Ohio, Grandville, right outside of Columbus. Intel build
Speaker 4: a fabric a factory near us, and all of a sudden,
Speaker 4: everybody's property values have like doubled. Do you see that
Speaker 4: as well down there?
Speaker 14: Yeah, it's the same here, and it's the secondary and
Speaker 14: tertiary markets as well within South Florida, not just the
Speaker 14: waterfront ultra luxury markets.
Speaker 10: We have to deal with affordability. We are dealing with
Speaker 10: it with affordability.
Speaker 14: There's some new legislation that's come down which allows for
Speaker 14: more density. For certain I'm not an affordable guy, but
Speaker 14: you know, it's it's very to do it for our
Speaker 14: markets because I think it's something that's needed so we
Speaker 14: can really service every sector.
Speaker 2: Daniel, I'm curious. I'm looking at your website. There are
Speaker 2: properties below a million dollars, and then there's properties that
Speaker 2: are for tens of millions of dollars or twenty five
Speaker 2: million dollars. So give me an idea in terms of
Speaker 2: the type of activity you have. What types of properties
Speaker 2: are selling the most.
Speaker 14: The ultra luxury market is probably trading for the highest
Speaker 14: prices per square foot. We're seeing the most activity in
Speaker 14: the one to five million dollar price point. That's where
Speaker 14: you're seeing a lot of the inventory increases as well,
Speaker 14: whether you look at the Florida numbers or just the
Speaker 14: South Florida numbers or the.
Speaker 10: Entire East Coast of Florida numbers where we operate.
Speaker 14: So I would say that that's been the segment where
Speaker 14: you're seeing the most amount of transactions, definitely.
Speaker 2: And that's where you said how much what was the
Speaker 2: percentage that most of these are done in cash? Though
Speaker 2: most of this is done in cash.
Speaker 14: Yeah, eighty percent of our transactions are done in cash.
Speaker 14: And we're still seeing that Q one, you know, with
Speaker 14: interest rates going up the way they are, which has
Speaker 14: definitely affected the market.
Speaker 10: I think Q four saw it, you know.
Speaker 14: I mean, we companies across the country were down, you know,
Speaker 14: over forty percent.
Speaker 10: Think Guide you didn't have me on then.
Speaker 2: But if people are doing mostly cash, right, they don't
Speaker 2: care about the interest rates.
Speaker 10: They don't care about the interest rates so much.
Speaker 14: In a lot of our new development products, whether it's
Speaker 14: Peer sixty six that I just mentioned, if we're lauderd
Speaker 14: or the Saint Regis residences here in Miami on brickles, these.
Speaker 15: Buyers have a longer sort of horizon as to when
Speaker 15: they're going to move in, right, So it's a three year,
Speaker 15: four year cycle, and they're okay because they know that
Speaker 15: interest rates are temporary.
Speaker 4: Little footnote here when the hurricanes come in, this is
Speaker 4: not where they go, right is Miami is West Palm Beach.
Speaker 4: Those those people are safer than like Naples.
Speaker 13: Right.
Speaker 14: Well, I would say that we're all in harm's way
Speaker 14: when mother Nature wants to have their.
Speaker 4: Way, but it's more up towards the Gulf.
Speaker 10: Happening traditionally, Yeah, net that traditionally.
Speaker 14: What's happened over the last five years is most of
Speaker 14: them have been going through the golf or missing us
Speaker 14: here in South Florida and up the eastern, up.
Speaker 10: The East coast. So we've been very lucky, and I
Speaker 10: pray that we continue to do luck.
Speaker 2: All right, got to leave it on that note. Hey, Daniel,
Speaker 2: great to check in with. You appreciate it. Daniel de
Speaker 2: la Fega, president of Once Southeby's Internet, calling to come
Speaker 2: down on zoom from Miami.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 2: Well, the new issue, as you know, Bloomberg Business Week
Speaker 2: is out and that means we've got the latest and
Speaker 2: greatest from our Pursuits team. Chris Rouser is the editor
Speaker 2: of Pursuits and he joins us now with a look
Speaker 2: at the section and Chris this week, I gotta say,
Speaker 2: Elon Musk said working from home is morally wrong, and
Speaker 2: I got to stay. Based on the Pursuits opener, maybe
Speaker 2: there are more folks working that we realized because the
Speaker 2: world is what lining up once again for the neckties.
Speaker 2: Neckties are back. What's up with that?
Speaker 16: And this is not something that I expected. And then
Speaker 16: I was invited to like a cool dinner at the
Speaker 16: Odeon in New York by Romez for the necktie. They
Speaker 16: were like, everyone's buying neckties. Our necktie sales are back
Speaker 16: to where they were before the pandemic, and people are
Speaker 16: really into it, even though can I just say you.
Speaker 2: Don't have a necktie and I know you have an
Speaker 2: important meeting coming out?
Speaker 16: Well, I mean, I don't know if you remember, but
Speaker 16: before the pandemic I would wear a tie every day.
Speaker 4: You de bow tie.
Speaker 16: Often and in a lot of people in this office,
Speaker 16: would you know, in there's no doubt that offices are
Speaker 16: less formal like across America the world, if in finance
Speaker 16: were usually there's sustrict rules. Here at Bloomberg used to
Speaker 16: be all the guys were in suits with ties, and
Speaker 16: now it's definitely not that way. But nonetheless, people are
Speaker 16: still shopping for ties and hiat.
Speaker 2: Ties, and they also want quality, which you know, there's
Speaker 2: a line in the story and I feel like my
Speaker 2: mom is always like there was always quality over quantity,
Speaker 2: and that is certainly something you know. Amez is certainly
Speaker 2: a brand where it's not a tie for fifty bucks
Speaker 2: or thirty bucks or.
Speaker 16: Right so an entry necktie like straight ties two hundred
Speaker 16: and forty dollars at Rmez. That's a barrier to entry
Speaker 16: for a lot of people. It's a lot of money.
Speaker 16: But they're special ties and they're handmade and the quality
Speaker 16: is incredible, and it reflects the fact that people want
Speaker 16: to buy ties that feels special, that are a special occasion.
Speaker 16: You know, maybe they're not wearing them to the office,
Speaker 16: like I got to go to the office every day
Speaker 16: they're wearing them to a cool party, they're wearing them
Speaker 16: out on a date, you know, they're wearing them to
Speaker 16: like a movie premiere or something. A lot of celebrities
Speaker 16: are getting into this now.
Speaker 2: It's like a great accessory again.
Speaker 16: Yes, yeah, I mean it's something that you choose that
Speaker 16: speaks about you. A lot of the people we talked
Speaker 16: to said, you know, if you want to seal the deal,
Speaker 16: you have to wear a tie, and it has to
Speaker 16: be something cool.
Speaker 2: You know, there used to be rules, right, like you
Speaker 2: don't wear a striped tie with a striped shirt. But
Speaker 2: people are just mixing it up and having some fun.
Speaker 16: Yeah, And I think that's part of why people are
Speaker 16: coming back to ties, because if no one wants to
Speaker 16: go back to something that feels really strict and restrictive
Speaker 16: and old fashioned. But people are wearing ties in different ways.
Speaker 16: Like you said, you know, stripes with stripes, people are
Speaker 16: there's now a thing where you'll see what you'll see
Speaker 16: on TikTok and stuff where people were the back end
Speaker 16: of the tie longer than the front end, the skinny end,
Speaker 16: which just looks more casual and relaxed and like you
Speaker 16: threw it on as just just another accessory to sort
Speaker 16: of speak about your style.
Speaker 2: I can I ask you, is really the knit tie?
Speaker 16: Possibly back to listen, I have always been in favor
Speaker 16: of the knick tie. I'm a big knit tie wear.
Speaker 16: And yes, so Todd Snyder, which is a men'swear brand
Speaker 16: which I love and they often win awards. Is very cool.
Speaker 16: They started doing ties in earnest like two years ago,
Speaker 16: you know, after the start of the pandemic, when we
Speaker 16: were coming back to the office, and they said that
Speaker 16: knit ties are very strong for them, and yeah, Charles Sherbot,
Speaker 16: which is a much more entry level price point, they've
Speaker 16: their ties sales have grown each year for the past years,
Speaker 16: and they said pocket squares are growing, which I did
Speaker 16: not expects.
Speaker 2: We missed one really big element. And there's some great
Speaker 2: pictures as a part of this story about women also
Speaker 2: wearing ties. Oh yeah, this which I love.
Speaker 16: This is great. I mean, you know, there was the
Speaker 16: met Gala which honored Carl Lagerfeld this year, and so
Speaker 16: a lot of that kind of Chanelle look does have
Speaker 16: like a lot of bow kind of like seet kind
Speaker 16: of looks. So it wasn't surprising to see that we
Speaker 16: saw a bunch of tie type things there, but just generally,
Speaker 16: like you know, Kristin Stewart, Florence Pugh wore a tie
Speaker 16: recently to a screening in New York, and Lizzie Kaplan
Speaker 16: wore this really great big suit and fat tie to
Speaker 16: an appearance on a morning show. Like women are wearing
Speaker 16: them too, and very cool young celebs like BTS war
Speaker 16: ties to the Grammys last year. We're just kind of
Speaker 16: seeing it everywhere.
Speaker 2: I got to finish on one point only because a
Speaker 2: big part of our audience here at Bloomberg, as you
Speaker 2: well know and at Pursuits is the finance world. And
Speaker 2: you guys did talk to a managing director wealth management
Speaker 2: advisor at Merrill who lives in Delray Beach, Florida, and
Speaker 2: he's ruined ties.
Speaker 1: Yeah.
Speaker 16: We talked to this great guy who said, you know,
Speaker 16: you don't see ties as much at work, but if
Speaker 16: you want to seal a deal and you're there really
Speaker 16: to do business, you have to wear a tie. And
Speaker 16: a lot of people said, you know, we talked to
Speaker 16: real estate brokers who said the same thing, like, if
Speaker 16: you're there to get serious, you gotta wear a tie.
Speaker 2: I love that you guys always talk to the folks
Speaker 2: over at million dollar listing is because they like to talk.
Speaker 2: It's funny how it works that way. All right, So
Speaker 2: from Ties to Lamborghini, I have no easy transition, but
Speaker 2: I have to say, Hannah Elliott, our car columnist, your
Speaker 2: car columnist, she was like, kind of it felt like
Speaker 2: she really didn't want to like this.
Speaker 1: Yeah.
Speaker 16: So Hannah drives incredible cars all the time, and the
Speaker 16: thing about reviewing incredible cars is that they're mostly incredible,
Speaker 16: so it's a lot of the reviews are positive. But
Speaker 16: here in this case, she went to test drive the
Speaker 16: Lamborghini Strato, which is a two hundred and seventy three
Speaker 16: thousand dollars car. It's kind of part of the last
Speaker 16: run of the Hurrican line of cars for a Lambeau,
Speaker 16: and it's an off road car. And she went into
Speaker 16: this thinking this is not gonna work. You know, Lamborghini
Speaker 16: does not enter off road rally competitions. Their cars traditionally
Speaker 16: are like five inches off the ground. Like you can't
Speaker 16: even you can't drive them in New York without wrecking
Speaker 16: the bottom of the car. It's terrifying and really yeah, yeah,
Speaker 16: so like for driving it through gravel, dirt ravines, forget
Speaker 16: about it. But they clambed this car in all this armor,
Speaker 16: including they elevated it so it's higher off the ground.
Speaker 16: They also had they have big knobby wheels, there's undercar armor,
Speaker 16: there's a dust duct, and it really is ready for
Speaker 16: the off road. So they sent So she went out
Speaker 16: and she drove around on a track that was like
Speaker 16: half normal racetrack and then like or actually almost two
Speaker 16: thirds off road. And she said, okay, I'm gonna rip
Speaker 16: this car up. Like they're telling me I can do it,
Speaker 16: I'm just gonna do it. And she said it was
Speaker 16: so great. It was really fun to have that rip
Speaker 16: roaring sound and that power. But the off road, she
Speaker 16: she scraped the bottom, she banged it up. It was fine.
Speaker 16: I mean, I'm sure they were dense, but it was
Speaker 16: you know, that's sort of the point. And she drove
Speaker 16: around with the driving instructor who literally said, you know
Speaker 16: you you can do whatever you want.
Speaker 1: I love.
Speaker 2: At the end of it, she's like, I just wanted
Speaker 2: another ride. So she was definitely convinced. What a great
Speaker 2: like one eighties From the beginning, where do you want
Speaker 2: to go? We can talk wines, we can talk shelves.
Speaker 16: You know, we could talk just a little about shelves.
Speaker 4: This is a very visual story.
Speaker 2: How did this come on? Because I'm like, Chris, I
Speaker 2: got this idea literally, So there's a story we have
Speaker 2: about wall shelves.
Speaker 16: And when we do these market stories about home decor,
Speaker 16: sometimes we shoot them, sometimes we use the art from
Speaker 16: the companies. And we were like, what is who is
Speaker 16: making really cool stuff in what format? And we were
Speaker 16: looking at all the new stuff from this yere and
Speaker 16: there's just so many cool shelves, and shelves are such
Speaker 16: an afterthought, that's true, and architects and designers are doing
Speaker 16: industrial designers are doing really great jobs with them. So
Speaker 16: you got to check out this in the magazine. My
Speaker 16: favorite one is called it is called the Blue Bey
Speaker 16: Doo Bee.
Speaker 2: I love that line that I wrote. It's so cool and.
Speaker 16: It's by this New York artist, Margaret DeMarco. And it
Speaker 16: looks like you made a sort of a drip castle.
Speaker 16: It's a drip sand castle but out of wood, and
Speaker 16: you use it as a shelf, and it's just if
Speaker 16: you walked into someone's room and they had a couple
Speaker 16: of those, you'd be like, oh my gosh, I love it.
Speaker 2: Here can I just say there's one in there, and
Speaker 2: you guys are going to just have to read it
Speaker 2: or go online and check it out. But at first,
Speaker 2: I'm like, is that my ciest bully's shelf? Did they
Speaker 2: actually put that in there? You know what I'm talking about?
Speaker 1: Oh?
Speaker 2: Yes, yeah, yeah, yah yeah, But it's not it's not.
Speaker 16: It's because it floats on your wall, so you kind
Speaker 16: of put it up there.
Speaker 2: It's definitely not the bully shoe. Yeah, but it looks
Speaker 2: like that. Just quickly, we're running out of time, but
Speaker 2: I have to say, I love your wine reviewer, and
Speaker 2: she just talks about a new area in California where
Speaker 2: they're coming up with some great reds.
Speaker 16: Allen wrote this great piece, which has been very very
Speaker 16: popular online because I think it really resonates with people.
Speaker 16: The hottest area of wine in California in terms of
Speaker 16: buzz and newness isn't Napa or Sonoma. It's Passo Roebules
Speaker 16: who also, who knew that it was pronounced Passo Robles.
Speaker 2: I did not thank you for the pronunciation.
Speaker 16: And it's just they're making really great cavernets. There's a
Speaker 16: lot of really exciting stuff at all price points and
Speaker 16: Allen really tells the story of how it came to be,
Speaker 16: and it's a great story. And now I want to
Speaker 16: go out and get a bunch of these bottles.
Speaker 2: I saw the same thing. I looked at the list,
Speaker 2: and I also love what she said about the era.
Speaker 2: That part of it is this great you know. You
Speaker 2: they go from like warm days to cold nights and
Speaker 2: it makes for like the perfect grape.
Speaker 16: It has a very like French like soil. It's like Bordeaux.
Speaker 16: And they also that, yeah, that exchange between day and night,
Speaker 16: the big temperature changes really tightens up the flavors and
Speaker 16: the grapes.
Speaker 2: Yeah, there's a bunch of rowned varieties which are among
Speaker 2: my favorite. There's also a great wine cork which I've
Speaker 2: never seen or.
Speaker 4: Wine wine opener yet.
Speaker 2: Wine opener and just real quickly like thirty.
Speaker 16: Yeah, so the Durand is not new. Occasionally for our
Speaker 16: the one feature we do stuff that's just the best.
Speaker 16: And it has these two prongs that go outside the
Speaker 16: cork that hold the cork together because a lot of
Speaker 16: times an old cork will be crumbly. And Ellen has
Speaker 16: corked and seen thousands of bottles of wine on corked
Speaker 16: and she's never seen it fail. So one hundred and
Speaker 16: thirty five dollars the durand.
Speaker 2: All right, next time, I expect a necktie on anybuddy, Okay,
Speaker 2: or at least about time. All Right, We love Chris Rauser.
Speaker 2: He is the editor of Bloomberg Pursuits. Chris, thank you
Speaker 2: as always. You are listening to Bloomberg Business Week. Coming up,
Speaker 2: an international fast food player says it's making real progress
Speaker 2: and it's push for sustainability. How Wendy's is reducing its
Speaker 2: carbon footprint within the ultra competitive quick service restaurant space.
Speaker 2: That's coming up. This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Business Week Podcast. Catch us
Speaker 1: live weekdays from two to five pm Easter on Bloomberg Radio,
Speaker 1: the Bloomberg Business app and YouTube. You can also listen
Speaker 1: live to our flagship New York station, Just Say Alexa
Speaker 1: play Bloomberg eleven thirty.
Speaker 2: Carol Master along with Matt Miller. Are you a chocolate
Speaker 2: or strawberry frosty kind of guy? Uh?
Speaker 4: My chocolate? This is an odd question because when I
Speaker 4: was a kid, there was only one kind of frosty
Speaker 4: right what there was? I didn't know if it was
Speaker 4: any specific flavor. It was just a frosty. So now
Speaker 4: when I go to Wendy's and I ask for a frosty,
Speaker 4: they asked me what flavor. I'm like, come on, there's
Speaker 4: only one flavor. But apparently you can get multiple flavors.
Speaker 2: You could get the flavor you don't want. All right,
Speaker 2: We are, of course talking about Wendy's. They do report
Speaker 2: earnings on Wednesday before the open. Something they've been doing
Speaker 2: and really other companies generally have been incorporating for years
Speaker 2: into their strategy and how they make financial decisions is ESG.
Speaker 2: We're talking about environmental, social and governance issues, which we
Speaker 2: know is going through its own little reckoning. Weighing in
Speaker 2: though on that for us this afternoon is Liliana Esposito,
Speaker 2: chief Corporate Affairs and Sustainability Officer, over at Wendy's, joining
Speaker 2: us on zoom from Dublin, Ohio. Lilliana, good to have
Speaker 2: you here with Matt and myself. We do want to
Speaker 2: talk about ESG. You've worked, though, in the food industry
Speaker 2: for a long time, You've worked at Dean Foods Mars.
Speaker 2: What's top of mind of you when you think about
Speaker 2: ESG and what needs to be done.
Speaker 13: Yeah, great to be with both of you. And I
Speaker 13: will say, Matt, if you haven't tried a strawberry frosty yet,
Speaker 13: they came back to our restaurants and you're missing out,
Speaker 13: So definitely definitely give that.
Speaker 2: One a try.
Speaker 13: And look, I think that even the letters ESG are
Speaker 13: relatively new in terms of this area. But obviously companies
Speaker 13: Wendy's and others have been operating responsibly for decades. But
Speaker 13: I think what has changed is really the demands that
Speaker 13: those efforts really be formalized and that they be very
Speaker 13: goal based. And so you know, at Wendy's, we you know,
Speaker 13: we organize our ESG portfolio under the platform of good
Speaker 13: Done Right, and we've got some some i think, pretty
Speaker 13: aggressive public facing commitments around food, people in footprint and
Speaker 13: what we're trying to accomplish that we would essentially say
Speaker 13: is doing our fair share or more than our fair
Speaker 13: share too, to really demonstrate that we are operating our
Speaker 13: business in a responsible fashion.
Speaker 4: It seems to be a difficult business. I mean, like,
Speaker 4: if you want to do ESG, you don't want to
Speaker 4: be working at an oil producer or a hamburger seller,
Speaker 4: because you know that's one of the leading causes of
Speaker 4: climate change is raising beef, So how can you change that?
Speaker 2: Yeah, it's it's got to be a partnership.
Speaker 13: And so what you're referring to clearly are around greenhouse
Speaker 13: gas emissions. You know, we have set a science based
Speaker 13: target for greenhouse gas emissions productions and that will include
Speaker 13: Scope one, two, and three. So Scope one and two
Speaker 13: are the about four hundred restaurants that the company owns
Speaker 13: and operates ourselves, and then Scope three is our franchise restaurants,
Speaker 13: which generally look and operate like a company restaurant, they're
Speaker 13: just owned by a franchise e. But the biggest part
Speaker 13: of our footprint is of our greenhouse gas emissions foot
Speaker 13: print is our supply chain, and the biggest part of
Speaker 13: that is proteins and specifically beef. And so you know,
Speaker 13: the encouragement is that, you know, many of our suppliers
Speaker 13: have already started down this path, even in advance of us,
Speaker 13: of setting their own science based targets. But we know
Speaker 13: that we'll have to work together. It's not going to
Speaker 13: be just Wendy's changing that landscape, but substantially improving the footprint,
Speaker 13: the environmental footprint of agricultural production and with a heavy
Speaker 13: focus on protein, is is definitely going to be necessary
Speaker 13: to achieve these targets.
Speaker 2: Leanda, what about garbage? And I think about food waste
Speaker 2: in particular.
Speaker 7: I mean it's.
Speaker 4: It's oh, food waste or plastic.
Speaker 2: Food waste in particular that ends up in dumps and
Speaker 2: the methane that's produced off of that and other which
Speaker 2: is more problematic.
Speaker 4: Food waste goes into your compost. Do you not compost that?
Speaker 2: No, people throw out a lot of stuff and it
Speaker 2: ends up in the dump. That's apparently compost I do
Speaker 2: at home.
Speaker 13: I I actually am fortunate to live in a community
Speaker 13: that has curbside food waste pickup. But that is unusual,
Speaker 13: and that's that's a really key piece is that I
Speaker 13: will say for Wendy's Restaurants, we actually waste very little.
Speaker 13: And I think that's not unusual for a company of
Speaker 13: our type because it's just a small footprint. And so
Speaker 13: you know, our operators get very good and have gotten
Speaker 13: very good over the years of only ordering what we're
Speaker 13: going to prepare and only preparing what we're going to
Speaker 13: be able to serve.
Speaker 2: And really, guys are that.
Speaker 13: Tight, so you're not throwing out a lot of stuff,
Speaker 13: and we we've actually done some audits on that and
Speaker 13: have found that but there's always opportunities to, you know,
Speaker 13: to be better. But certainly as you look at the
Speaker 13: supply chain, that's where a lot of that that waste
Speaker 13: may be occurring, particularly in agricultural products, and so it
Speaker 13: absolutely is a it's absolutely a focus for us. It's
Speaker 13: interesting and you you know, you mentioned plastics and maybe
Speaker 13: we'll get to packaging as well. One of the things
Speaker 13: we're doing right now in some of our Chicago area
Speaker 13: restaurants is we've actually got some initially two stream trash receptacles,
Speaker 13: so you know, landfill and recycling, and over time we
Speaker 13: may add composting to it. We did kind of a
Speaker 13: video study essentially of the waste produced by the restaurant,
Speaker 13: then did some education with our team members as well
Speaker 13: as with with customers, showing them what of our packaging
Speaker 13: in particular, and then for our our team members what
Speaker 13: of our backup house packaging could be recycled. And then
Speaker 13: on the back end of the pilot, we'll look a
Speaker 13: look at that same kind of video technology and see
Speaker 13: whether we were actually able to change behavior.
Speaker 2: Do we need to get rid of plastic.
Speaker 4: Then well straws. What do you do about straws?
Speaker 2: Why'd you know? Haven't you gotten rid of straws already?
Speaker 9: Uh?
Speaker 2: No, we still we still have We still have straws.
Speaker 13: And I will say, you know, one of the commitments
Speaker 13: that we've made is that by twenty twenty six, one
Speaker 13: hundred percent of our customer facing packaging will be sustainably sourced.
Speaker 13: And so we're defining that as either recyclable, compostable, or reusable.
Speaker 13: And so we just put out our Corporate Responsibility Report
Speaker 13: a couple of weeks ago and reported that we're now
Speaker 13: more than halfway towards that goal. A big part of
Speaker 13: that progress over the last year for US was actually
Speaker 13: transitioning our beverage cups from our former kind of paper
Speaker 13: based cups that had limited recyclability into a plastic format
Speaker 13: that is recyclable. And then we're also incorporating post consumer
Speaker 13: recycled content into those cups. Will do that over time,
Speaker 13: and so you know, one piece of the puzzle is
Speaker 13: the material. Making sure that you have a material that
Speaker 13: is recyclable or compostable, and then but then also making
Speaker 13: sure that you.
Speaker 10: Have the infrastructure.
Speaker 13: And we certainly don't control that, you know, at Wendy's,
Speaker 13: but certainly that's a great need of ensuring that there
Speaker 13: is infrastructure to be able to recycle or compost these
Speaker 13: materials when they're made available. And then the third piece
Speaker 13: is educating the consumer so that they know what to do,
Speaker 13: you know, with the packages that they have full disclosure.
Speaker 4: I'm from Columbus, right, so I love Wendy's with all
Speaker 4: my heart. I mean I used to go and eat
Speaker 4: at store number one on Broad Street with my grandmother
Speaker 4: growing up, so I have a very special connection. But
Speaker 4: you definitely don't want to be giving out straws, do you.
Speaker 4: Isn't that the worst kind of possible c s R,
Speaker 4: sin ESG sin straws.
Speaker 5: I don't.
Speaker 13: I don't think i'd agree with that. And and really,
Speaker 13: I mean, in in the in the grand scheme of
Speaker 13: total packaging, you know, certainly items like you know, cups
Speaker 13: and wrappers and containers produce more more product challenge with
Speaker 13: straws and and and it's it's not unique to straws,
Speaker 13: but they're small, and so even if the material is
Speaker 13: technically recyclable, uh, you know, most facilities won't won't accept that.
Speaker 13: And so we've got some locations that have alternatives to
Speaker 13: plastic straws, and and certainly are looking at at other
Speaker 13: alternatives as well. But but a lot of consumers, you know,
Speaker 13: really prefer to, you know, to to I have a little.
Speaker 2: I don't know, actually I walk around with a metal straw.
Speaker 2: I got my own little like reusable as wash them.
Speaker 7: That's what we do.
Speaker 2: Liliana, thank you so much. Liliana Esposito, Chief Corporate Affairs
Speaker 2: and Sustainability Officer at Wendy's On zoom from Dublin, Ohio.
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