1 00:00:01,360 --> 00:00:05,720 Speaker 1: This is Bloomberg Business Wait inside from the reporters and 2 00:00:05,880 --> 00:00:09,440 Speaker 1: editors who bring you America's most trusted business magazine, plus 3 00:00:09,520 --> 00:00:13,680 Speaker 1: global business, finance and tech news. The Bloomberg Business Week 4 00:00:13,720 --> 00:00:19,000 Speaker 1: Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 5 00:00:20,120 --> 00:00:23,000 Speaker 2: Maddie, we've gone wow almost this whole week without talking 6 00:00:23,120 --> 00:00:24,200 Speaker 2: much about bitcoin. 7 00:00:25,000 --> 00:00:27,680 Speaker 3: I mean, I can't believe you've been able to do it, Tim. 8 00:00:27,600 --> 00:00:30,880 Speaker 2: I know, well, I've been saving it for this afternoon 9 00:00:30,880 --> 00:00:34,159 Speaker 2: because it's our weekly segment where we talk about cryptocurrencies. 10 00:00:34,560 --> 00:00:37,159 Speaker 2: Very please right now to have Mni Bali joining us. 11 00:00:37,159 --> 00:00:39,520 Speaker 2: He's the co founder and CEO of Trust Machines, also 12 00:00:39,520 --> 00:00:42,800 Speaker 2: the co founder of Stacks. When he joins us via zoom, 13 00:00:43,000 --> 00:00:44,760 Speaker 2: could have you with us this AFTERNOONI but I'm on 14 00:00:44,800 --> 00:00:47,479 Speaker 2: your website for Trust Machines, and what you promised to 15 00:00:47,520 --> 00:00:51,479 Speaker 2: do is build a decentralized economy on bitcoin. I think 16 00:00:51,479 --> 00:00:55,080 Speaker 2: what people understand about bitcoin and cryptocurrency is how we 17 00:00:55,120 --> 00:00:58,080 Speaker 2: can use it as a currency. But I don't think 18 00:00:58,080 --> 00:01:00,240 Speaker 2: a lot of people understand how you can build build 19 00:01:01,000 --> 00:01:02,840 Speaker 2: on it. What do you mean by that? 20 00:01:04,080 --> 00:01:04,280 Speaker 4: Yeah? 21 00:01:04,280 --> 00:01:06,800 Speaker 5: Absolutely, thanks thanks for having me. So I think if 22 00:01:06,880 --> 00:01:07,919 Speaker 5: if bitcoin is money. 23 00:01:08,160 --> 00:01:10,960 Speaker 6: So what we're talking about is building the entire financial 24 00:01:11,000 --> 00:01:14,279 Speaker 6: infrastructure and financial markets around it. And we've actually seen 25 00:01:14,600 --> 00:01:18,880 Speaker 6: early signs of that in other ecosystems like Etherium and Solana. 26 00:01:18,920 --> 00:01:22,120 Speaker 6: But Bitcoin happens to be the largest handbook, the most durable, 27 00:01:23,120 --> 00:01:25,440 Speaker 6: the most recognizable brand, and I think it's sort of 28 00:01:25,480 --> 00:01:29,000 Speaker 6: like surprising so far we haven't seen more financial infrastructure builds. 29 00:01:29,000 --> 00:01:31,840 Speaker 2: Are bitcoin itself like, who what would you think that 30 00:01:31,880 --> 00:01:33,040 Speaker 2: should be built on it? Right now? 31 00:01:34,400 --> 00:01:37,240 Speaker 6: I think the things that come to minds first of all, 32 00:01:37,240 --> 00:01:40,520 Speaker 6: are decentilized exchanges. Obviously, you know, we know about coinbase, 33 00:01:40,680 --> 00:01:44,039 Speaker 6: and we've seen the ftx blow up out. So if 34 00:01:44,080 --> 00:01:46,319 Speaker 6: things are decent lized, if people can just trade in 35 00:01:46,360 --> 00:01:49,680 Speaker 6: a decentilized way, that that that's really good. Even bringing 36 00:01:49,720 --> 00:01:52,280 Speaker 6: stable coins to Bitcoin. Most of the stable coins like 37 00:01:52,360 --> 00:01:55,560 Speaker 6: tether and USDC right now they're issues around aterium and 38 00:01:55,600 --> 00:02:00,120 Speaker 6: some other change and they're not really working on the 39 00:02:00,120 --> 00:02:03,320 Speaker 6: Bitcoin rails. And I think bringing several coins to bitcoin 40 00:02:03,840 --> 00:02:07,640 Speaker 6: building lending protocols. Again, we saw things like blog five 41 00:02:08,000 --> 00:02:11,000 Speaker 6: blow up, So if there were decent lized lending protocols 42 00:02:11,080 --> 00:02:13,120 Speaker 6: directly built on top of Bitcoin, I think people could 43 00:02:13,120 --> 00:02:14,280 Speaker 6: have really benefited from tact. 44 00:02:15,320 --> 00:02:20,800 Speaker 3: When you think about the trade of bitcoin, it seems 45 00:02:20,880 --> 00:02:24,320 Speaker 3: like it's losing its mojo a little bit. Right When 46 00:02:24,480 --> 00:02:26,600 Speaker 3: we look at it year to date, we're not seeing 47 00:02:26,600 --> 00:02:30,040 Speaker 3: as much of the volatility that you usually see when 48 00:02:30,040 --> 00:02:34,200 Speaker 3: it comes to bitcoin. It's gone eight trading sessions as 49 00:02:34,280 --> 00:02:37,960 Speaker 3: of today without a one percent move. What does that 50 00:02:38,040 --> 00:02:41,520 Speaker 3: tell you? Are you concerned at all about bitcoin as 51 00:02:41,840 --> 00:02:43,440 Speaker 3: kind of an asset class. 52 00:02:45,560 --> 00:02:46,240 Speaker 5: So this is my. 53 00:02:46,280 --> 00:02:49,639 Speaker 6: Third beer market, right, and I think this is probably 54 00:02:49,639 --> 00:02:52,080 Speaker 6: the most pleasant bit market that I've been through. So 55 00:02:52,160 --> 00:02:54,720 Speaker 6: I consider as being a bear market, I think given 56 00:02:54,760 --> 00:02:56,640 Speaker 6: for a bear market, this is actually a pretty good 57 00:02:56,800 --> 00:03:00,520 Speaker 6: trading market to be in. Things are including that, and 58 00:03:00,560 --> 00:03:02,280 Speaker 6: I think I would be just looking forward to the 59 00:03:02,280 --> 00:03:05,080 Speaker 6: bigcoin hobbing, which is scheduled for April next year. I 60 00:03:05,080 --> 00:03:08,280 Speaker 6: think historically, again this is how the market has been working. 61 00:03:08,320 --> 00:03:10,079 Speaker 6: No guarantee it will work like that in the future, 62 00:03:10,240 --> 00:03:13,040 Speaker 6: but historically around the bigcoin hobbing is when you know 63 00:03:13,160 --> 00:03:15,800 Speaker 6: markets pick up, there's a lot more excitement, and because 64 00:03:15,840 --> 00:03:17,919 Speaker 6: it's just it's just the market dynamics, the supply of 65 00:03:17,960 --> 00:03:20,160 Speaker 6: bigcoin goes down even more, and I think I think 66 00:03:20,160 --> 00:03:21,440 Speaker 6: people get more interested in it. 67 00:03:21,919 --> 00:03:25,040 Speaker 3: Well, what's interesting. What's interesting though, when it comes to 68 00:03:25,040 --> 00:03:28,360 Speaker 3: what markets are more interested in, is that we have 69 00:03:28,440 --> 00:03:31,760 Speaker 3: this really cool word search function on the terminal. If 70 00:03:31,760 --> 00:03:33,280 Speaker 3: you want to nerd out with me for a second, 71 00:03:33,400 --> 00:03:33,600 Speaker 3: I do. 72 00:03:33,680 --> 00:03:35,680 Speaker 2: I don't know what you're talking about, and it looks great. 73 00:03:35,680 --> 00:03:38,720 Speaker 3: Well, you can do DS go to document search, but 74 00:03:39,520 --> 00:03:41,440 Speaker 3: smarter people than me just write it up for me. 75 00:03:41,480 --> 00:03:43,040 Speaker 3: So I don't even have to use the function, to 76 00:03:43,080 --> 00:03:46,760 Speaker 3: be honest. But one of the reports from this week 77 00:03:46,920 --> 00:03:53,160 Speaker 3: looks at how Barbie Mentions outbeat Bitcoin for mentions on 78 00:03:53,240 --> 00:03:56,480 Speaker 3: the terminal this week. So and that's the second week 79 00:03:56,480 --> 00:03:58,200 Speaker 3: in a row that that's happened, by the way, So 80 00:03:58,760 --> 00:04:01,880 Speaker 3: what does that tell you? Does bitcoin have a pr problem? 81 00:04:01,920 --> 00:04:04,880 Speaker 3: Do they need to become a Barbenheimer to get back 82 00:04:04,920 --> 00:04:06,200 Speaker 3: into the zeitgeist here? 83 00:04:07,840 --> 00:04:08,040 Speaker 7: Yeah? 84 00:04:08,080 --> 00:04:10,400 Speaker 6: So I think I'll go back to this four year 85 00:04:10,440 --> 00:04:13,440 Speaker 6: cycle theory. Right, So we see these spikes, the coin 86 00:04:13,520 --> 00:04:15,920 Speaker 6: basically does a ten x or so, right in terms 87 00:04:15,920 --> 00:04:19,159 Speaker 6: of number of view users. In the first cycle, we 88 00:04:19,320 --> 00:04:21,760 Speaker 6: went to like one million users, then ten and depending 89 00:04:21,760 --> 00:04:24,000 Speaker 6: on how you count, maybe the last one will get 90 00:04:24,000 --> 00:04:26,880 Speaker 6: included to Warner. So I think the interest goes down 91 00:04:26,920 --> 00:04:29,880 Speaker 6: as well. But this is a time for billers, right. 92 00:04:30,080 --> 00:04:32,400 Speaker 6: So this is something I've seen over and over that 93 00:04:32,720 --> 00:04:36,040 Speaker 6: companies and developers who really believe in the technology, they 94 00:04:36,080 --> 00:04:40,320 Speaker 6: basically catch up on things during this bear market cycle. 95 00:04:40,400 --> 00:04:40,520 Speaker 7: Right. 96 00:04:40,520 --> 00:04:42,600 Speaker 6: So a lot of great products get built, a lot 97 00:04:42,600 --> 00:04:45,640 Speaker 6: of people were basically building for the next years. They 98 00:04:45,680 --> 00:04:48,240 Speaker 6: get their work done, and then the next wave of 99 00:04:48,320 --> 00:04:51,120 Speaker 6: interest comes. So I think you're definitely in a bear market. 100 00:04:51,360 --> 00:04:52,640 Speaker 2: What are you seeing filter right now? 101 00:04:54,480 --> 00:04:56,320 Speaker 6: Yeah, So some of the things that I'm really excited 102 00:04:56,320 --> 00:04:59,440 Speaker 6: about is bigcoin L two's. If you look at Ethereum, 103 00:05:00,120 --> 00:05:02,320 Speaker 6: something like a two hundred and fifty billion dollar market, 104 00:05:02,440 --> 00:05:04,719 Speaker 6: and it has a fifty to sixty billion dollar L 105 00:05:04,760 --> 00:05:07,480 Speaker 6: two markets. L twos are these layer twos that are 106 00:05:07,480 --> 00:05:10,160 Speaker 6: built on top of Atherium. They helped it scale, they 107 00:05:10,240 --> 00:05:12,600 Speaker 6: bring more users and applications to it, and for the 108 00:05:12,640 --> 00:05:15,560 Speaker 6: first time, I'm seeing more of that happening on bigcoin, 109 00:05:15,640 --> 00:05:16,920 Speaker 6: which is absolutely critical. 110 00:05:17,200 --> 00:05:18,680 Speaker 5: So you mentioned a SAX project. 111 00:05:18,760 --> 00:05:21,159 Speaker 6: I'm a co creator of SAX is a bitcoin L 112 00:05:21,200 --> 00:05:24,480 Speaker 6: two that helps sort of like bring more applications or 113 00:05:24,520 --> 00:05:27,720 Speaker 6: being able to just do like cheap and fast bitcoin transfers. 114 00:05:27,960 --> 00:05:29,360 Speaker 5: They will happen on. 115 00:05:29,320 --> 00:05:31,440 Speaker 6: The L twos and not on the L one, and 116 00:05:31,480 --> 00:05:33,640 Speaker 6: I think these are still maturing and more on the 117 00:05:33,640 --> 00:05:34,280 Speaker 6: bitcoin side. 118 00:05:34,279 --> 00:05:36,160 Speaker 5: But some pretty pretty exciting stuff happened. 119 00:05:36,240 --> 00:05:39,840 Speaker 2: Given that we're still in what you describe as a 120 00:05:39,880 --> 00:05:42,200 Speaker 2: bear market or you know what others described as a 121 00:05:42,200 --> 00:05:45,880 Speaker 2: crypto winter, are you seeing interest around the space? 122 00:05:46,040 --> 00:05:46,400 Speaker 5: Just cool? 123 00:05:46,440 --> 00:05:50,200 Speaker 2: I mean, Maddie brought this up about Barbie versus bitcoin, 124 00:05:50,839 --> 00:05:54,240 Speaker 2: but are you having trouble finding employees? A couple of 125 00:05:54,279 --> 00:05:56,720 Speaker 2: years ago, what we were talking about was, hey, these 126 00:05:56,720 --> 00:06:02,080 Speaker 2: are all people leaving Wall Street to go where crypto firms. Yes. 127 00:06:02,200 --> 00:06:04,680 Speaker 6: So I think the one interesting dynamic of what happens 128 00:06:04,760 --> 00:06:08,160 Speaker 6: during the bear market is bitcoin dominance actually goes out. 129 00:06:08,240 --> 00:06:10,559 Speaker 6: So some people who track the bigcoin dominance it's actually 130 00:06:10,600 --> 00:06:13,000 Speaker 6: at the highest right now, which just means the market 131 00:06:13,000 --> 00:06:15,480 Speaker 6: cap or bitcoin versus all the other assets. So in 132 00:06:15,520 --> 00:06:18,440 Speaker 6: some ways it actually becomes easier to hire for bigcoin 133 00:06:18,480 --> 00:06:22,160 Speaker 6: companies because people get more burnt by all the others assets, right, 134 00:06:22,200 --> 00:06:24,279 Speaker 6: they might be riskier or you know, there might be 135 00:06:25,000 --> 00:06:27,600 Speaker 6: you know, alsos in theferious people behind those projects. Where 136 00:06:27,640 --> 00:06:32,000 Speaker 6: bitcoin is this neutral, truly decentralized grassroots movement, and people 137 00:06:32,080 --> 00:06:36,080 Speaker 6: gravitate towards that a little bit more. This is within 138 00:06:36,279 --> 00:06:40,240 Speaker 6: the industry, but broadly speaking, yes, I think it's not 139 00:06:40,320 --> 00:06:42,839 Speaker 6: the it's not the crazy times. But sometimes it's also 140 00:06:42,880 --> 00:06:45,440 Speaker 6: a really good filter because now you're not getting the mercenaries, 141 00:06:45,560 --> 00:06:48,320 Speaker 6: You're actually getting more mission driven people, people who actually 142 00:06:48,360 --> 00:06:52,160 Speaker 6: believe in decentralization, who believe that building these asset systems 143 00:06:52,320 --> 00:06:53,160 Speaker 6: is actually a good thing. 144 00:06:53,320 --> 00:06:55,720 Speaker 5: So I've always enjoyed the bear market. It's I think 145 00:06:55,760 --> 00:06:57,680 Speaker 5: the signal to noise where it should actually IMPROVESE a lot. 146 00:06:57,720 --> 00:07:01,040 Speaker 6: There's a lot more signal in the market and softer 147 00:07:01,160 --> 00:07:01,880 Speaker 6: as they go away. 148 00:07:02,400 --> 00:07:04,920 Speaker 5: I think they're going to AI these days, and that's 149 00:07:05,320 --> 00:07:05,600 Speaker 5: the word. 150 00:07:05,640 --> 00:07:08,120 Speaker 2: This is that signal or noise in AI, though. 151 00:07:09,440 --> 00:07:11,440 Speaker 6: I think I think as as a computer scientist, I'm 152 00:07:11,480 --> 00:07:14,480 Speaker 6: definitely interested in a lot of the breakthroughs that have 153 00:07:14,560 --> 00:07:17,320 Speaker 6: happened recently. I wasn't a believer like five years ago, 154 00:07:17,360 --> 00:07:20,000 Speaker 6: but I've seen some some some really good stuff come out. 155 00:07:20,240 --> 00:07:23,960 Speaker 6: But again, it's like the overhyping of something and people 156 00:07:24,120 --> 00:07:26,040 Speaker 6: just jumping on the bandwag and stuff that we need 157 00:07:26,040 --> 00:07:26,640 Speaker 6: to be a little. 158 00:07:26,440 --> 00:07:26,960 Speaker 5: Bit careful of. 159 00:07:27,320 --> 00:07:31,360 Speaker 2: Hey, what's it going to take Menie to get crypto 160 00:07:32,000 --> 00:07:32,800 Speaker 2: out of this winter. 161 00:07:34,880 --> 00:07:38,440 Speaker 6: I think I am a firm believer in bitcoin. First, 162 00:07:38,680 --> 00:07:40,360 Speaker 6: I think the rest of the industry is sort of 163 00:07:40,400 --> 00:07:43,360 Speaker 6: like attached to it. Bitcoin has a clear product market fit. 164 00:07:43,480 --> 00:07:45,880 Speaker 6: I mean, we're seeing the turbulence in the financial markets. 165 00:07:45,960 --> 00:07:48,080 Speaker 6: We're seeing inflation just go. 166 00:07:48,040 --> 00:07:49,840 Speaker 5: Through the roof throughout the world. Like I think, it's 167 00:07:49,880 --> 00:07:51,960 Speaker 5: not not not just in the United States. 168 00:07:52,240 --> 00:07:54,600 Speaker 6: Like I have my parents who live in Pakistan, and 169 00:07:54,640 --> 00:07:57,200 Speaker 6: whenever I send dollars to them, a dollar is worth 170 00:07:57,280 --> 00:07:59,800 Speaker 6: like three x more just in the last two years 171 00:07:59,800 --> 00:08:01,560 Speaker 6: then what it used to do. So people are feeling 172 00:08:01,560 --> 00:08:04,440 Speaker 6: the pain, they're feeling inflation, and they're realizing what a 173 00:08:04,480 --> 00:08:08,520 Speaker 6: hard asset means, what you know, a goldbacked currency couild 174 00:08:08,560 --> 00:08:10,160 Speaker 6: have meant. And I think bitcoin is sort of like 175 00:08:10,200 --> 00:08:12,960 Speaker 6: the best best thing out there. And what happens is 176 00:08:13,200 --> 00:08:16,080 Speaker 6: whenever interesting bitcoin goes up, then there is a long 177 00:08:16,200 --> 00:08:18,360 Speaker 6: tale of everything else that sort of like picks up 178 00:08:18,360 --> 00:08:18,560 Speaker 6: on it. 179 00:08:18,960 --> 00:08:19,120 Speaker 5: Right. 180 00:08:19,200 --> 00:08:21,800 Speaker 6: So I feel like if you believe in bitcoin, if 181 00:08:21,840 --> 00:08:25,400 Speaker 6: you think the world needs a better money, and bitcoin 182 00:08:25,560 --> 00:08:28,200 Speaker 6: is the best money invented so far, and it's it's 183 00:08:28,240 --> 00:08:30,320 Speaker 6: almost like an open source thing, right, There's a technology 184 00:08:30,360 --> 00:08:32,440 Speaker 6: that's out of the box very hard to stop. So 185 00:08:32,559 --> 00:08:35,040 Speaker 6: I think when bitcoin rises, everything else is going to 186 00:08:35,080 --> 00:08:35,599 Speaker 6: advise with it. 187 00:08:36,559 --> 00:08:37,959 Speaker 3: All Right, Well, we're going to have to leave it 188 00:08:38,000 --> 00:08:39,880 Speaker 3: there on this Friday. I mean, thank you so much 189 00:08:40,160 --> 00:08:42,400 Speaker 3: for joining us. We need all the co founder and 190 00:08:42,559 --> 00:08:46,719 Speaker 3: chief executive officer of Trust Machines. I should mention you're 191 00:08:46,760 --> 00:08:50,200 Speaker 3: also the co founder of Stacks coming on to talk 192 00:08:50,280 --> 00:08:52,600 Speaker 3: crypto with us for our weekly crypto segment. 193 00:08:53,080 --> 00:08:56,560 Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us 194 00:08:56,640 --> 00:09:00,600 Speaker 1: live weekday afternoons from three to six Eastern Listen Bloomberg 195 00:09:00,640 --> 00:09:04,040 Speaker 1: dot com, the iHeartRadio app, and the Bloomberg Business App, 196 00:09:04,400 --> 00:09:06,040 Speaker 1: or watch us live on YouTube. 197 00:09:07,080 --> 00:09:09,480 Speaker 3: That Job's report, We've been talking about it all day, Tim, 198 00:09:09,600 --> 00:09:12,080 Speaker 3: because you know I have a little something for everyone. 199 00:09:12,240 --> 00:09:12,360 Speaker 6: Right. 200 00:09:12,440 --> 00:09:16,040 Speaker 3: You've got the job growth remaining steady, non form payrolls 201 00:09:16,080 --> 00:09:19,400 Speaker 3: climbing slightly less than forecast, potentially a victory for the 202 00:09:19,520 --> 00:09:22,800 Speaker 3: Fed there, but the bad news for them wages still 203 00:09:22,840 --> 00:09:23,240 Speaker 3: going up. 204 00:09:23,400 --> 00:09:24,960 Speaker 2: Hey, that's good news for us. 205 00:09:25,080 --> 00:09:28,440 Speaker 3: That's good news for us, Tim, and hopefully for our 206 00:09:28,520 --> 00:09:31,360 Speaker 3: listeners here. So joining us to discuss and kind of 207 00:09:31,480 --> 00:09:34,240 Speaker 3: suss out the top line takeaway here for us is 208 00:09:34,440 --> 00:09:38,040 Speaker 3: Julia Pollock. She's the chief economist of Zip Recruiter, and Julia, 209 00:09:38,080 --> 00:09:40,600 Speaker 3: it's great to have you on again here. I'm trying 210 00:09:40,640 --> 00:09:42,240 Speaker 3: to figure out how to read the good and the 211 00:09:42,320 --> 00:09:45,520 Speaker 3: bad news of this report. So just in terms of 212 00:09:45,880 --> 00:09:48,959 Speaker 3: putting it into historical context for me, would you say 213 00:09:49,040 --> 00:09:51,320 Speaker 3: this is the first report we've gotten that puts US 214 00:09:51,480 --> 00:09:55,120 Speaker 3: back to pre pandemic levels and vibes. 215 00:09:56,320 --> 00:09:58,280 Speaker 4: Yeah, this is pretty much in line with a pre 216 00:09:58,440 --> 00:10:02,360 Speaker 4: pandemic rate of job growth. But I would say on 217 00:10:02,600 --> 00:10:05,960 Speaker 4: wage growth, I don't think this is all worrying news 218 00:10:06,040 --> 00:10:08,880 Speaker 4: for the Fed and on the inflation front, because the 219 00:10:08,960 --> 00:10:12,320 Speaker 4: work week has actually become shorter over the past year. 220 00:10:12,840 --> 00:10:16,960 Speaker 4: Average weekly hours, average weekly earnings have only risen three 221 00:10:17,000 --> 00:10:20,520 Speaker 4: point five percent, even though average hourly earnings have risen 222 00:10:20,600 --> 00:10:23,840 Speaker 4: four point four percent, So that three point five percent 223 00:10:24,200 --> 00:10:27,360 Speaker 4: weekly wage growth is completely consistent with the FEDS two 224 00:10:27,440 --> 00:10:30,000 Speaker 4: percent inflation. And then the data we got earlier this 225 00:10:30,080 --> 00:10:34,280 Speaker 4: week on productivity also suggests that high wage growth is 226 00:10:34,360 --> 00:10:36,640 Speaker 4: sustainable because productivity is rising. 227 00:10:37,240 --> 00:10:39,960 Speaker 2: Julia, we love talking to you because on zip recruiter 228 00:10:40,320 --> 00:10:42,560 Speaker 2: you have a great insight into the types of jobs 229 00:10:42,559 --> 00:10:44,320 Speaker 2: people are looking for and the types of jobs people 230 00:10:44,360 --> 00:10:48,559 Speaker 2: are applying for. Michael McKee, international Economics and Policy correspondent, 231 00:10:48,600 --> 00:10:50,079 Speaker 2: was in here a little earlier and he was saying, 232 00:10:50,080 --> 00:10:51,920 Speaker 2: there's a little bit of debate about Okay, people just 233 00:10:52,000 --> 00:10:54,640 Speaker 2: not hiring at the same rate that they were hiring 234 00:10:54,679 --> 00:10:57,440 Speaker 2: out earlier, or people just not wanting to work at 235 00:10:57,480 --> 00:10:59,920 Speaker 2: the same rate that they were wanting to work out earlier. 236 00:11:00,040 --> 00:11:03,240 Speaker 2: What are you seeing on your platform, Well. 237 00:11:03,240 --> 00:11:06,160 Speaker 4: Job seekers have come back, and we've seen job seeker 238 00:11:06,280 --> 00:11:10,439 Speaker 4: engagement on jobs rising sixty nine percent over the year. 239 00:11:10,920 --> 00:11:13,439 Speaker 4: So it's not that workers are not available and not 240 00:11:13,559 --> 00:11:16,760 Speaker 4: ready to work. Although many employers say that while they 241 00:11:16,840 --> 00:11:20,000 Speaker 4: can find entry level workers quite easily, they're struggling to 242 00:11:20,080 --> 00:11:23,800 Speaker 4: find people with specific credentials and qualifications. And they're also 243 00:11:23,800 --> 00:11:27,000 Speaker 4: struggling to find people with five to ten or ten 244 00:11:27,040 --> 00:11:31,440 Speaker 4: to fifteen years of experience. So quality is still a tricky, 245 00:11:31,520 --> 00:11:32,160 Speaker 4: tricky issue. 246 00:11:32,160 --> 00:11:32,839 Speaker 8: For why is that? 247 00:11:34,520 --> 00:11:37,600 Speaker 4: It's hard to know? One issue is that many older 248 00:11:37,679 --> 00:11:40,120 Speaker 4: workers left during the pandemic and they have not returned, 249 00:11:40,160 --> 00:11:43,640 Speaker 4: and they've taken a huge amount of skill and knowledge 250 00:11:43,720 --> 00:11:48,360 Speaker 4: with them. Many industries are also finding that the talent 251 00:11:48,520 --> 00:11:52,640 Speaker 4: pipeline has sort of run dry. Fewer workers are majoring, say, 252 00:11:52,880 --> 00:11:57,960 Speaker 4: in accounting. It's just not such an exciting, appealing career 253 00:11:58,040 --> 00:12:00,240 Speaker 4: anymore for young people who would rather be in tech 254 00:12:00,400 --> 00:12:03,599 Speaker 4: or in social media or blogging or goodness knows what. 255 00:12:05,400 --> 00:12:12,160 Speaker 4: So exactly right, wellies, And it's so interesting. 256 00:12:11,840 --> 00:12:13,680 Speaker 3: I want to pick up on that because we were 257 00:12:13,720 --> 00:12:16,000 Speaker 3: talking with Mike McKee, as Tim said about how the 258 00:12:16,040 --> 00:12:20,040 Speaker 3: biggest job loss category in this print was in management. 259 00:12:20,160 --> 00:12:21,760 Speaker 3: We're starting to see, at least in the data, that 260 00:12:21,840 --> 00:12:25,720 Speaker 3: companies are kind of hoarding that lower skilled, cheaper, more 261 00:12:25,760 --> 00:12:30,000 Speaker 3: affordable labor and getting rid of their higher level employees 262 00:12:30,040 --> 00:12:32,920 Speaker 3: that cost them a little bit more. So help me 263 00:12:33,120 --> 00:12:38,040 Speaker 3: understand where you're seeing that you're seeing less people with 264 00:12:38,200 --> 00:12:41,480 Speaker 3: more skills out there available to be employed. 265 00:12:42,720 --> 00:12:47,400 Speaker 4: Yeah, so it's a challenging situation for employers. We're also 266 00:12:47,520 --> 00:12:51,360 Speaker 4: seeing employers move away from their sort of excessive reliance 267 00:12:51,520 --> 00:12:55,680 Speaker 4: during the pandemic on contract workers and temporary help agency staff, 268 00:12:56,200 --> 00:13:00,439 Speaker 4: and they're shifting from those temporary recruitment strategies is like 269 00:13:00,600 --> 00:13:07,120 Speaker 4: signing bonuses to more long term workforce management policies. We're 270 00:13:07,160 --> 00:13:09,679 Speaker 4: seeing a large increase in the share of job hostings 271 00:13:09,720 --> 00:13:12,040 Speaker 4: on zip recruiter that offer health insurance and that offer 272 00:13:12,240 --> 00:13:16,079 Speaker 4: retirement plans, and that's a good sign to me. It 273 00:13:16,160 --> 00:13:19,839 Speaker 4: suggests that employers are actually hiring in house staff and 274 00:13:20,000 --> 00:13:22,120 Speaker 4: trying to find ways not just to get them in 275 00:13:22,200 --> 00:13:24,240 Speaker 4: the door, but to keep them there and keep them happy. 276 00:13:24,760 --> 00:13:27,679 Speaker 2: What about getting employees to the office. We've spoken to 277 00:13:27,720 --> 00:13:30,560 Speaker 2: you several times over the past few years, Trulia about 278 00:13:31,160 --> 00:13:35,720 Speaker 2: listings that show hybrid work or remote work. There's been 279 00:13:35,720 --> 00:13:37,400 Speaker 2: a lot of discussion, at least here in New York 280 00:13:37,440 --> 00:13:39,959 Speaker 2: City about getting workers back to the office, and also 281 00:13:40,120 --> 00:13:43,959 Speaker 2: from companies such as Amazon and more tech companies like 282 00:13:44,040 --> 00:13:46,640 Speaker 2: Apple as well. What are you seeing on the platform? 283 00:13:47,920 --> 00:13:51,679 Speaker 4: So remote listings have mostly plateaued in most industries, although 284 00:13:51,720 --> 00:13:54,760 Speaker 4: there are several industries where they have declined recently, like 285 00:13:54,880 --> 00:13:58,400 Speaker 4: in customer service. There are some where they continue to rise, 286 00:13:58,679 --> 00:14:02,559 Speaker 4: like in consulting financial services. So it really is a mix, 287 00:14:03,200 --> 00:14:07,880 Speaker 4: and companies are carefully weighing the trade offs the cost savings, 288 00:14:07,960 --> 00:14:11,439 Speaker 4: the recruitment benefits, the retension benefits. Some studies show a 289 00:14:11,480 --> 00:14:15,360 Speaker 4: decline and attrition of thirty five percent, which dramatically lowers 290 00:14:15,400 --> 00:14:18,920 Speaker 4: your turnover costs. So there are huge benefits from remote work, 291 00:14:19,560 --> 00:14:21,360 Speaker 4: but one needs to do it right so that one 292 00:14:21,400 --> 00:14:23,600 Speaker 4: doesn't lose mentorship and collaboration. 293 00:14:24,080 --> 00:14:25,880 Speaker 3: Well, we know that remote work is one of the 294 00:14:25,960 --> 00:14:29,800 Speaker 3: things contributing to that attrition and people switching jobs. I'm 295 00:14:29,840 --> 00:14:33,880 Speaker 3: curious about pay when it comes to switching jobs, because 296 00:14:33,880 --> 00:14:36,560 Speaker 3: we know from the ADP report earlier this week that 297 00:14:36,680 --> 00:14:39,160 Speaker 3: you do stand to gain on the wage front when 298 00:14:39,200 --> 00:14:42,280 Speaker 3: you switch jobs. You're getting about a ten percent increase 299 00:14:42,320 --> 00:14:44,880 Speaker 3: in wages as opposed to six percent when you stay 300 00:14:45,200 --> 00:14:47,520 Speaker 3: in the job that you currently have. What are you 301 00:14:47,720 --> 00:14:50,320 Speaker 3: seeing on your platform when it comes to the ability 302 00:14:50,400 --> 00:14:53,120 Speaker 3: for workers to get higher salaries if they are kind 303 00:14:53,160 --> 00:14:54,240 Speaker 3: of job hopping around. 304 00:14:55,880 --> 00:14:58,960 Speaker 4: So the majority of job switches is still getting pretty 305 00:14:59,000 --> 00:15:02,440 Speaker 4: substantial wage increases, but the share who are increasing their 306 00:15:02,440 --> 00:15:05,640 Speaker 4: wages when they switch is actually going down. Part of 307 00:15:05,720 --> 00:15:08,680 Speaker 4: that is a matter of choice. So workers are prepared 308 00:15:08,800 --> 00:15:11,880 Speaker 4: to give up pay in order to get remote work. 309 00:15:12,640 --> 00:15:14,800 Speaker 4: They're prepared to give up about eight to ten percent 310 00:15:14,960 --> 00:15:17,720 Speaker 4: of their pay because remote work saves you time and money. 311 00:15:18,120 --> 00:15:20,520 Speaker 3: That's a lot to give up for remote work. 312 00:15:21,640 --> 00:15:23,640 Speaker 2: You have to think about what We'll go ahead, Julia. 313 00:15:24,320 --> 00:15:26,960 Speaker 4: Yeah, but if you gained seventy minutes a day that 314 00:15:27,000 --> 00:15:29,400 Speaker 4: you would have spent commuting, and if you save five 315 00:15:29,480 --> 00:15:32,920 Speaker 4: thousand dollars a year on transportation costs, it can really 316 00:15:32,960 --> 00:15:33,440 Speaker 4: make up for it. 317 00:15:33,560 --> 00:15:36,480 Speaker 2: And then seventeen minutes a day, Yeah. 318 00:15:36,640 --> 00:15:38,360 Speaker 4: You have children and you spend a lot of time 319 00:15:38,440 --> 00:15:41,000 Speaker 4: in the car, and you have to pay for child's care, 320 00:15:41,960 --> 00:15:43,920 Speaker 4: you know, for that during that commute, and you sit 321 00:15:43,960 --> 00:15:45,640 Speaker 4: there in the car feeling like, how on Earth am 322 00:15:45,680 --> 00:15:47,720 Speaker 4: I doing this? Wasting my life when I could be 323 00:15:47,800 --> 00:15:49,800 Speaker 4: with my kids and I'm paying for child care on 324 00:15:49,920 --> 00:15:52,480 Speaker 4: top of it. Those kinds of savings are not just 325 00:15:52,680 --> 00:15:55,480 Speaker 4: financial savings, but they're psychic cost savings as well. 326 00:15:55,560 --> 00:15:58,000 Speaker 2: I feel like I'm getting triggered here by you saying 327 00:15:58,120 --> 00:16:01,800 Speaker 2: those things, But it's true. I mean I spend I 328 00:16:01,920 --> 00:16:06,080 Speaker 2: spend about forty five minutes round trip commuting from my apartment. 329 00:16:06,120 --> 00:16:08,520 Speaker 3: Wait, but ten say the thing you said earlier about 330 00:16:08,600 --> 00:16:10,440 Speaker 3: productivity and the return to work. 331 00:16:10,640 --> 00:16:12,960 Speaker 2: This is interesting, Julia. We have a story out on 332 00:16:12,960 --> 00:16:15,640 Speaker 2: the Bloomberg about a study that economists at MIT and 333 00:16:15,760 --> 00:16:19,280 Speaker 2: UCLA did that shows that people are less productive at 334 00:16:19,320 --> 00:16:22,040 Speaker 2: home by about eighteen percent. These are new hires, and 335 00:16:22,080 --> 00:16:25,360 Speaker 2: they did experiment new hires in India, but they did 336 00:16:25,560 --> 00:16:27,440 Speaker 2: talk to somebody for the article who said, you know what, 337 00:16:27,840 --> 00:16:29,920 Speaker 2: these people might be less productive if they're at home, 338 00:16:30,160 --> 00:16:34,240 Speaker 2: but the company may save money on real estate. So 339 00:16:34,320 --> 00:16:36,120 Speaker 2: if the company's not spending the money on real estate, 340 00:16:36,160 --> 00:16:38,080 Speaker 2: it's okay to have these lower productivity workers. 341 00:16:39,200 --> 00:16:41,960 Speaker 4: So the real estate savings are actually a small piece 342 00:16:42,160 --> 00:16:45,960 Speaker 4: of the pie because in most companies, in most companies 343 00:16:46,000 --> 00:16:50,360 Speaker 4: today in the United States, in knowledge industries, your biggest 344 00:16:50,440 --> 00:16:55,120 Speaker 4: cost is your people. And when you can recruit people 345 00:16:55,360 --> 00:16:58,880 Speaker 4: across the country from lower cost places, you can get 346 00:16:58,960 --> 00:17:01,720 Speaker 4: talent much more tea. And then if they're prepared to 347 00:17:01,800 --> 00:17:04,760 Speaker 4: do the job and stay there for longer without big 348 00:17:04,800 --> 00:17:07,119 Speaker 4: wage increases because they're so happy and they enjoy the 349 00:17:07,200 --> 00:17:10,760 Speaker 4: work life balance that they've got, you you can save 350 00:17:10,880 --> 00:17:13,840 Speaker 4: and have reduced wage growth pressure as well. So there 351 00:17:13,880 --> 00:17:16,520 Speaker 4: are lots of reasons to sort of balance the productivity 352 00:17:16,760 --> 00:17:20,560 Speaker 4: and cost savings benefits. Then the evidence on productivity is mixed. 353 00:17:21,040 --> 00:17:24,320 Speaker 4: There are plenty of studies that show productivity gains, like 354 00:17:24,400 --> 00:17:26,920 Speaker 4: studies of customer support agents that found that they gained 355 00:17:26,920 --> 00:17:29,920 Speaker 4: an additional day a week of productivity because they made 356 00:17:30,000 --> 00:17:33,040 Speaker 4: many more calls during times when they would otherwise have 357 00:17:33,080 --> 00:17:33,560 Speaker 4: been commuting. 358 00:17:34,080 --> 00:17:38,040 Speaker 3: Julia ten seconds here. What type of employee is having 359 00:17:38,080 --> 00:17:40,280 Speaker 3: the easiest time finding work right now? 360 00:17:41,240 --> 00:17:45,240 Speaker 4: Healthcare the industry is on a tear. It's gained enormous 361 00:17:45,280 --> 00:17:46,800 Speaker 4: numps of jobs for eighteen straight months. 362 00:17:46,880 --> 00:17:49,720 Speaker 2: Now, well, we got a great story on healthcare coming 363 00:17:49,760 --> 00:17:51,399 Speaker 2: up a little later today with John Tazzi during the 364 00:17:51,440 --> 00:17:54,560 Speaker 2: five o'clock hour. It's about the changing relationships that employers 365 00:17:54,960 --> 00:17:57,440 Speaker 2: have with the health insurance that they're paying so much 366 00:17:57,560 --> 00:18:00,840 Speaker 2: money to ensure their workers. Julia Pollock really appreciate you 367 00:18:00,920 --> 00:18:03,720 Speaker 2: taking the time, chief economist at Zipper Corder Recruiter, joining 368 00:18:03,800 --> 00:18:06,160 Speaker 2: us on the July Jobs Reporting All things employment. 369 00:18:06,920 --> 00:18:10,439 Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us 370 00:18:10,560 --> 00:18:14,520 Speaker 1: live weekday afternoons from three to six Easter on Bloomberg Radio, 371 00:18:14,760 --> 00:18:18,000 Speaker 1: the Bloomberg Business App, and YouTube. You can also listen 372 00:18:18,119 --> 00:18:21,200 Speaker 1: live on Amazon Alexa from our flagship New York station, 373 00:18:21,680 --> 00:18:24,440 Speaker 1: Just say Alexa play Bloomberg eleven thirty. 374 00:18:25,880 --> 00:18:29,119 Speaker 3: There's a little something for everyone in the jobs data today. 375 00:18:29,280 --> 00:18:31,280 Speaker 3: But we think so much tim when we get the 376 00:18:31,359 --> 00:18:33,520 Speaker 3: job's data about how the Fed's going to respond, which 377 00:18:33,600 --> 00:18:35,960 Speaker 3: can make the good news seem like bad news. Right, 378 00:18:36,040 --> 00:18:38,200 Speaker 3: more jobs in pay means the FED raises rates, but 379 00:18:38,280 --> 00:18:40,640 Speaker 3: of course that's bad news for anyone looking to buy 380 00:18:40,640 --> 00:18:43,560 Speaker 3: a home. But then we think, okay, less jobs, the 381 00:18:43,640 --> 00:18:46,240 Speaker 3: FED may cool off, but then there are fewer jobs. 382 00:18:46,280 --> 00:18:48,360 Speaker 3: You got to remember that that's bad news for people too. 383 00:18:48,960 --> 00:18:51,680 Speaker 3: So we wanted to focus today on the people impacted 384 00:18:51,760 --> 00:18:53,880 Speaker 3: by these numbers and the data that we talk about 385 00:18:53,960 --> 00:18:56,600 Speaker 3: so often. So right now we're specifically going to focus 386 00:18:56,680 --> 00:18:59,040 Speaker 3: on the Hispanic population when it comes to that data, 387 00:18:59,080 --> 00:19:02,240 Speaker 3: and we've got a great guests here to discuss, Javier 388 00:19:02,400 --> 00:19:05,600 Speaker 3: Palomar as the president and CEO of the US Hispanic 389 00:19:05,960 --> 00:19:08,000 Speaker 3: Business Council. On Javier, great to have you. Thank you 390 00:19:08,119 --> 00:19:10,760 Speaker 3: so much for coming on with us. When you look 391 00:19:10,800 --> 00:19:13,359 Speaker 3: at the data from today, we're seeing that for black workers, 392 00:19:13,440 --> 00:19:17,440 Speaker 3: the labor force participation rate did tick slightly higher, and 393 00:19:17,480 --> 00:19:20,119 Speaker 3: the same was true for the unemployment rate when it 394 00:19:20,160 --> 00:19:22,840 Speaker 3: comes to Hispanic workers as well. But I'm curious, what 395 00:19:23,040 --> 00:19:25,600 Speaker 3: was your biggest takeaway from the data today. 396 00:19:26,400 --> 00:19:29,960 Speaker 9: Well, I mean, if you look at the numbers, you know, 397 00:19:30,600 --> 00:19:32,879 Speaker 9: let me begin by saying first of all that I 398 00:19:32,960 --> 00:19:35,600 Speaker 9: want to thank you for having American small business's voice 399 00:19:35,680 --> 00:19:39,520 Speaker 9: on this. The United States Hispanic Business Council is a 400 00:19:39,600 --> 00:19:42,560 Speaker 9: leading advocate for our nation's four point five million Hispanic 401 00:19:42,640 --> 00:19:46,040 Speaker 9: on firms in this country that collectively contribute over eight 402 00:19:46,160 --> 00:19:48,040 Speaker 9: hundred billion dollars to the American economy. 403 00:19:48,400 --> 00:19:50,760 Speaker 7: We watch these numbers very carefully, as you can imagine. 404 00:19:51,600 --> 00:19:54,680 Speaker 9: You know, one hundred and eighty seven thousand jobs is 405 00:19:54,720 --> 00:19:58,760 Speaker 9: not exceptional, but it's what was predicted as it relates 406 00:19:58,760 --> 00:20:00,480 Speaker 9: specifically to the Hispanic market. 407 00:20:01,400 --> 00:20:03,359 Speaker 7: You know, when you look at where the majority of 408 00:20:03,400 --> 00:20:04,080 Speaker 7: the growth. 409 00:20:03,880 --> 00:20:10,919 Speaker 9: Happened, it was construction, healthcare, wholesale services, things of that nature. 410 00:20:11,359 --> 00:20:14,399 Speaker 9: And when you look at Hispanic employment and where Hispanics are, 411 00:20:14,680 --> 00:20:18,160 Speaker 9: there's a concentration of employees that are Hispanic descent. Those 412 00:20:18,240 --> 00:20:21,399 Speaker 9: happen to be the sectors. So while the numbers specifically 413 00:20:21,440 --> 00:20:24,360 Speaker 9: when you're looking at Hispanic may not be great, we're 414 00:20:24,480 --> 00:20:27,879 Speaker 9: very enthused about what we've seen. The numbers for us 415 00:20:28,040 --> 00:20:31,880 Speaker 9: overall are on track, and so you know, I think 416 00:20:32,000 --> 00:20:35,520 Speaker 9: that you know, better days are are ahead of us. 417 00:20:36,240 --> 00:20:38,840 Speaker 7: But certainly the numbers today, I mean to hit the projections. 418 00:20:40,400 --> 00:20:42,320 Speaker 2: What are you hearing from the businesses on the ground, 419 00:20:42,440 --> 00:20:45,040 Speaker 2: from these millions of people who you represent at the 420 00:20:45,160 --> 00:20:48,159 Speaker 2: United States Hispanic Business Council, The millions of businesses. 421 00:20:48,280 --> 00:20:51,640 Speaker 9: What are they saying, Well, you know, the market is tight, 422 00:20:52,200 --> 00:20:53,480 Speaker 9: it has been tight for some time. 423 00:20:53,560 --> 00:20:55,080 Speaker 2: When you say the market is tight, are you referring 424 00:20:55,119 --> 00:20:55,960 Speaker 2: to the labor market. 425 00:20:56,600 --> 00:20:57,240 Speaker 7: Absolutely. 426 00:20:57,400 --> 00:21:02,719 Speaker 9: Absolutely, It's really about attracting the kind of worker you need, 427 00:21:02,840 --> 00:21:05,760 Speaker 9: the employee you need, and then retaining that employee. And 428 00:21:06,160 --> 00:21:09,960 Speaker 9: particularly in some segments obviously, as you can imagine construction 429 00:21:10,119 --> 00:21:13,359 Speaker 9: and agriculture, it is a very difficult time just to 430 00:21:13,480 --> 00:21:15,760 Speaker 9: keep you know, their labor force at a level at 431 00:21:15,800 --> 00:21:19,040 Speaker 9: which they need. But if you look at Hispanic employment, 432 00:21:19,560 --> 00:21:23,399 Speaker 9: the state of Hispanic employment according to the Department of Labor, 433 00:21:23,560 --> 00:21:28,920 Speaker 9: between the years twenty twenty and twenty thirty, a little 434 00:21:28,960 --> 00:21:33,000 Speaker 9: over seventy nine percent of the net new workers entering 435 00:21:33,080 --> 00:21:35,760 Speaker 9: the American workforce will be of Hispanic percent. 436 00:21:36,160 --> 00:21:37,560 Speaker 7: So think about that for just a minute. 437 00:21:37,840 --> 00:21:41,120 Speaker 9: Almost eighty percent of net new workers between the year 438 00:21:41,200 --> 00:21:45,000 Speaker 9: twenty twenty and twenty thirty will be Hispanics. So this 439 00:21:45,160 --> 00:21:49,119 Speaker 9: bodes well for a community that continues to grow and 440 00:21:49,280 --> 00:21:52,840 Speaker 9: continues to want to do nothing more than to contribute 441 00:21:52,880 --> 00:21:55,520 Speaker 9: to this nation that we love so much. The puts 442 00:21:55,560 --> 00:21:58,600 Speaker 9: in takes, you know, from a month to month basis, 443 00:21:59,040 --> 00:22:00,760 Speaker 9: you know, it's going to change. There's going to be 444 00:22:00,840 --> 00:22:02,800 Speaker 9: some puts and takes, and some days are better than others. 445 00:22:03,280 --> 00:22:06,040 Speaker 9: But the net of it is that Hispanic employment is 446 00:22:06,119 --> 00:22:09,440 Speaker 9: doing a live is doing is alive and well in 447 00:22:09,720 --> 00:22:12,400 Speaker 9: the American economy, and we're thrilled to what we're seeing overall. 448 00:22:13,000 --> 00:22:17,119 Speaker 3: Yeah, and Hispanic employment, to your point, is contributing about 449 00:22:17,119 --> 00:22:20,560 Speaker 3: eight hundred billion dollars to the American economy when you 450 00:22:20,800 --> 00:22:23,879 Speaker 3: just look at Hispanic owned businesses in the United States. 451 00:22:24,560 --> 00:22:28,560 Speaker 3: I'm curious, when you think about legislation from Washington, what 452 00:22:28,640 --> 00:22:31,080 Speaker 3: do you think would be and I see you laughing 453 00:22:31,119 --> 00:22:32,760 Speaker 3: a little bit there, what do you think would be 454 00:22:33,400 --> 00:22:36,800 Speaker 3: kind of the single biggest thing that you would hope 455 00:22:37,080 --> 00:22:42,480 Speaker 3: that legislators in Washington would understand in order to help 456 00:22:43,560 --> 00:22:46,080 Speaker 3: continue the growth that we're already seen in these numbers, 457 00:22:46,119 --> 00:22:49,040 Speaker 3: that eight hundred billion dollar number that you cite for us. 458 00:22:49,640 --> 00:22:52,240 Speaker 9: You know that that's an insightful question and if I 459 00:22:52,280 --> 00:22:55,639 Speaker 9: could figure that one out, medisine. But the reality of 460 00:22:55,720 --> 00:22:59,200 Speaker 9: it is, we have a Congress, we have elected officials 461 00:22:59,240 --> 00:23:02,639 Speaker 9: that appear to be really disjointed from the reality of 462 00:23:02,680 --> 00:23:06,840 Speaker 9: the marketplace. But with that said, there are some bright 463 00:23:07,680 --> 00:23:11,640 Speaker 9: spots some glimmers of hope. I was just with Kirsten 464 00:23:11,680 --> 00:23:15,320 Speaker 9: Cinema last week. I did an hour long question and 465 00:23:15,400 --> 00:23:18,520 Speaker 9: answer session with her. And the reason I was so 466 00:23:18,720 --> 00:23:20,080 Speaker 9: keen on going to sit with her. 467 00:23:20,000 --> 00:23:20,719 Speaker 7: And talking to her. 468 00:23:21,320 --> 00:23:25,080 Speaker 9: Here is a woman who was the major proponent of 469 00:23:25,240 --> 00:23:30,119 Speaker 9: the Infrastructure Investment in Jobs Act. She was also a 470 00:23:30,280 --> 00:23:33,760 Speaker 9: key player in the debt negotiations and saw to it 471 00:23:34,280 --> 00:23:40,119 Speaker 9: that permitting was embedded into the negotiations. Now, why do 472 00:23:40,240 --> 00:23:42,479 Speaker 9: we care about those two things? If you look at 473 00:23:42,480 --> 00:23:46,040 Speaker 9: the infrastructure in this nation, First of all, we rank 474 00:23:46,160 --> 00:23:51,119 Speaker 9: I believe, seventeenth globally, while we're the while we're the 475 00:23:51,200 --> 00:23:55,479 Speaker 9: wealthiest nation on the globe. That's simply unacceptable. But if 476 00:23:55,520 --> 00:23:58,160 Speaker 9: you look at the industries that fall under that broad 477 00:23:58,280 --> 00:24:04,000 Speaker 9: umbrella of infrastructure, are the construction, transportation, wholesale manufacturing, or 478 00:24:04,160 --> 00:24:09,840 Speaker 9: Hispanics employed construction manufacturing. So here's an individual that wasn't 479 00:24:09,920 --> 00:24:13,320 Speaker 9: looking at it necessarily from a Hispanic perspective, but was 480 00:24:13,440 --> 00:24:16,440 Speaker 9: clear minded in terms of what American small business needs. 481 00:24:16,680 --> 00:24:20,040 Speaker 9: And if you do right by American small business, by default, 482 00:24:20,280 --> 00:24:25,240 Speaker 9: you're doing right by Hispanic owned businesses and Hispanic entrepreneurs 483 00:24:25,280 --> 00:24:25,840 Speaker 9: in this country. 484 00:24:26,560 --> 00:24:28,480 Speaker 2: Hey, one thing I wanted to touch on you with 485 00:24:29,320 --> 00:24:34,040 Speaker 2: on with you, Javier, is child labor in this country 486 00:24:34,160 --> 00:24:39,080 Speaker 2: and what the Labor Department has recently found some kids 487 00:24:39,119 --> 00:24:45,920 Speaker 2: as young as thirteen actually working illegally in really terrible conditions. 488 00:24:45,960 --> 00:24:48,280 Speaker 2: Talk to me about what you at the US Hispanic 489 00:24:48,359 --> 00:24:50,879 Speaker 2: Business counselor doing about that, and what the reaction from 490 00:24:50,960 --> 00:24:53,080 Speaker 2: Washington has been. You know, I hear about these stories 491 00:24:53,880 --> 00:24:56,560 Speaker 2: and I think to myself, this is twenty twenty three. 492 00:24:57,640 --> 00:25:02,000 Speaker 2: How are their kids illegally working in meat packing plants 493 00:25:02,080 --> 00:25:02,639 Speaker 2: in the US. 494 00:25:03,760 --> 00:25:07,840 Speaker 9: Yeah, listen, you're talking to a former migrant farm worker 495 00:25:07,960 --> 00:25:09,320 Speaker 9: English as a second language. 496 00:25:09,359 --> 00:25:09,560 Speaker 7: Kid. 497 00:25:10,240 --> 00:25:14,960 Speaker 9: I know the conditions that field laborers are working in. 498 00:25:15,560 --> 00:25:19,640 Speaker 9: I've lived that and is deplorable. Things have gotten better 499 00:25:20,320 --> 00:25:25,000 Speaker 9: since I was there, but it is a very very 500 00:25:25,080 --> 00:25:27,240 Speaker 9: difficult environment. I mean, you're working some up to some 501 00:25:27,480 --> 00:25:29,680 Speaker 9: down in the heat, in the rain, in the snow, 502 00:25:29,760 --> 00:25:30,400 Speaker 9: it doesn't matter. 503 00:25:31,640 --> 00:25:32,119 Speaker 7: And you're right. 504 00:25:32,200 --> 00:25:36,880 Speaker 9: The Labor Department found forty four hundred cases of children 505 00:25:37,720 --> 00:25:40,680 Speaker 9: working across a variety of industries throughout the United States. 506 00:25:41,240 --> 00:25:44,440 Speaker 9: That's a forty four percent increase from last year. They've 507 00:25:44,560 --> 00:25:48,000 Speaker 9: levied over six and a half million dollars in penalties. 508 00:25:48,080 --> 00:25:51,399 Speaker 9: That's an eighty seven percent increase over last year. And 509 00:25:51,560 --> 00:25:56,919 Speaker 9: while we sympathize with those industries that need the labor, 510 00:25:58,000 --> 00:26:01,200 Speaker 9: we believe in commerce, of course, but commerce with a 511 00:26:01,280 --> 00:26:07,320 Speaker 9: conscience and child labor is undeniably wrong, it's undeniably evil. 512 00:26:07,960 --> 00:26:10,560 Speaker 9: We are America. We can do better than this, We 513 00:26:10,600 --> 00:26:14,400 Speaker 9: should do better than this. With that in mind, I've 514 00:26:14,440 --> 00:26:16,760 Speaker 9: been busy all week talking about this, actually, and so 515 00:26:16,840 --> 00:26:19,359 Speaker 9: I'm glad you asked it, Tim, Bless you for that. 516 00:26:19,520 --> 00:26:23,480 Speaker 9: But with that, there's another stark reality that we have 517 00:26:23,560 --> 00:26:25,720 Speaker 9: to deal with at the USHBC, and that is that 518 00:26:27,200 --> 00:26:31,880 Speaker 9: industries that rely on immigrant labor i e. Construction and agriculture, 519 00:26:32,640 --> 00:26:36,000 Speaker 9: I mean agriculture alone, seventy three percent of the workforce 520 00:26:36,119 --> 00:26:40,639 Speaker 9: in agriculture is of immigrant background. And so there is 521 00:26:40,680 --> 00:26:47,399 Speaker 9: an environment where over the last decade, technically in our 522 00:26:47,560 --> 00:26:52,560 Speaker 9: agricultural sector has had a labor shortage. And here's a 523 00:26:52,600 --> 00:26:59,720 Speaker 9: stark reality. Every year we lose ten million tons of 524 00:27:00,560 --> 00:27:04,040 Speaker 9: that goes unharvested. Ten million tons, not ten million pounds, 525 00:27:04,520 --> 00:27:05,960 Speaker 9: ten million tons. 526 00:27:06,240 --> 00:27:08,080 Speaker 7: Approached that goes unharvested. 527 00:27:08,400 --> 00:27:11,920 Speaker 9: So you can imagine the strain on the agricultural sector 528 00:27:11,960 --> 00:27:14,280 Speaker 9: and of course we represent that sector as well. 529 00:27:14,520 --> 00:27:17,240 Speaker 3: So Javier, just because we only have a minute left 530 00:27:17,280 --> 00:27:19,639 Speaker 3: with you, tell me what is one thing that you 531 00:27:19,720 --> 00:27:22,080 Speaker 3: wish would be done to specifically address the problem that 532 00:27:22,080 --> 00:27:23,960 Speaker 3: you're talking about right now when it comes to farming. 533 00:27:24,720 --> 00:27:27,320 Speaker 9: You know, there is a piece of legislation called the 534 00:27:27,400 --> 00:27:30,159 Speaker 9: Dignity Act that, of all things, is being proposed by 535 00:27:30,359 --> 00:27:34,800 Speaker 9: a Republican Florida woman named Maria Elvirus Alazar and a 536 00:27:34,920 --> 00:27:37,480 Speaker 9: Texas woman Democrat named Veronica Escobar. 537 00:27:37,880 --> 00:27:40,960 Speaker 7: It is all about making sure that we have the. 538 00:27:41,000 --> 00:27:44,520 Speaker 9: Protections that are appropriate and that are that are right 539 00:27:44,880 --> 00:27:48,159 Speaker 9: for all people working in America, certainly for children. The 540 00:27:48,280 --> 00:27:51,080 Speaker 9: Dignity Act, that's something we should really be looking at 541 00:27:51,119 --> 00:27:51,560 Speaker 9: as a nation. 542 00:27:52,280 --> 00:27:54,119 Speaker 3: All right, Javier, thank you so much. This is a 543 00:27:54,160 --> 00:27:56,040 Speaker 3: great conversation and we're definitely going to have to have 544 00:27:56,160 --> 00:27:58,240 Speaker 3: you back because we could have kept it going. Really 545 00:27:58,280 --> 00:28:02,360 Speaker 3: appreciate you for coming on this Friday afternoon, Javier Palomarrez 546 00:28:02,480 --> 00:28:05,480 Speaker 3: joining US President and CEO of the US Hispanic Business 547 00:28:05,560 --> 00:28:08,040 Speaker 3: Council to talk about those jobs numbers and the work 548 00:28:08,080 --> 00:28:11,959 Speaker 3: that needs to still be done. For this conversation following 549 00:28:12,240 --> 00:28:14,240 Speaker 3: those jobs numbers from this morning. 550 00:28:15,320 --> 00:28:19,639 Speaker 1: This is Bloomberg Business Wait inside from the reporters and 551 00:28:19,840 --> 00:28:23,359 Speaker 1: editors who bring you America's most trusted business magazine, plus 552 00:28:23,480 --> 00:28:27,600 Speaker 1: global business finance and tech news. The Bloomberg Business Week 553 00:28:27,680 --> 00:28:32,560 Speaker 1: Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 554 00:28:34,040 --> 00:28:36,560 Speaker 2: Stock now lower after spending much the day higher. That 555 00:28:36,680 --> 00:28:39,520 Speaker 2: reversal thanks to Apple moving lower, adding to its losses. 556 00:28:39,600 --> 00:28:42,840 Speaker 2: Apple down right now about four point six percent. But 557 00:28:42,920 --> 00:28:45,240 Speaker 2: let's talk big picture here. Get an idea for what's 558 00:28:45,280 --> 00:28:48,040 Speaker 2: going on, not just today but with the macroeconomic picture 559 00:28:48,120 --> 00:28:50,520 Speaker 2: and especially after that jobs report, how things are looking 560 00:28:50,600 --> 00:28:53,680 Speaker 2: for the Fed's September meeting. Very pleased to add with us. 561 00:28:53,760 --> 00:28:57,640 Speaker 2: Leo Kelly, founder and CEO at Vernon's Capital Advisors, joining 562 00:28:57,720 --> 00:29:01,280 Speaker 2: us this afternoon on zoom from Hunt Value, Maryland. Leo, 563 00:29:01,360 --> 00:29:02,600 Speaker 2: good to have you back with us. How are you 564 00:29:03,440 --> 00:29:03,719 Speaker 2: I am? 565 00:29:03,800 --> 00:29:05,680 Speaker 8: Well, thanks, it's good to be back. I always enjoy 566 00:29:05,760 --> 00:29:07,200 Speaker 8: the Bloomberg Radio show. 567 00:29:07,280 --> 00:29:08,640 Speaker 2: Oh well, we love it when you join us. So 568 00:29:09,080 --> 00:29:12,760 Speaker 2: happy Friday, and yeah, thanks again for coming on the program. 569 00:29:13,520 --> 00:29:15,120 Speaker 2: What are you looking at on a day where we 570 00:29:15,160 --> 00:29:17,000 Speaker 2: get a jobs report that kind of has a little 571 00:29:17,000 --> 00:29:19,640 Speaker 2: bit for everyone, but we're still seeing some weakness in 572 00:29:19,720 --> 00:29:21,880 Speaker 2: the equity market as a result of some of those 573 00:29:22,080 --> 00:29:23,880 Speaker 2: megacap tech companies lagging. 574 00:29:25,440 --> 00:29:25,640 Speaker 7: Yeah. 575 00:29:25,720 --> 00:29:28,239 Speaker 8: I think what we're starting to see is that as 576 00:29:28,320 --> 00:29:31,680 Speaker 8: the market reaches higher and higher levels, it continues to 577 00:29:31,720 --> 00:29:36,040 Speaker 8: be priced for perfection, and it continues that that razor 578 00:29:36,120 --> 00:29:38,640 Speaker 8: thin line of perfection is just getting tighter and tighter, 579 00:29:39,320 --> 00:29:41,560 Speaker 8: and so the market is going to start to as 580 00:29:41,600 --> 00:29:46,480 Speaker 8: it discerns through various different pieces of information, does this 581 00:29:46,560 --> 00:29:48,479 Speaker 8: mean the Fed's going to keep raising? Does this mean 582 00:29:48,560 --> 00:29:51,160 Speaker 8: we're out of the woods recession on recession? I think 583 00:29:51,200 --> 00:29:55,480 Speaker 8: we're in one of those periods where we're so optimistic 584 00:29:55,640 --> 00:29:57,960 Speaker 8: right now that the market just wants everything to be 585 00:29:58,040 --> 00:30:01,640 Speaker 8: good news, and so just slight, just slight concerns are 586 00:30:01,800 --> 00:30:03,640 Speaker 8: really going to have a negative impact on the market. 587 00:30:03,800 --> 00:30:05,120 Speaker 2: What's this like concern of today? 588 00:30:05,200 --> 00:30:05,360 Speaker 5: Is it? 589 00:30:05,520 --> 00:30:06,600 Speaker 2: Is it Apple's iPhone miss? 590 00:30:07,320 --> 00:30:07,520 Speaker 7: Yeah? 591 00:30:07,560 --> 00:30:10,040 Speaker 8: I think it's Apple's iPhone miss. I Also, again, I 592 00:30:10,080 --> 00:30:12,760 Speaker 8: think we were expecting Apple to just blow the cover 593 00:30:12,840 --> 00:30:13,280 Speaker 8: off the pace. 594 00:30:13,440 --> 00:30:14,400 Speaker 2: It does that every time. 595 00:30:14,280 --> 00:30:17,360 Speaker 8: Everything is priced. But that's where that's where the market's priced, 596 00:30:17,360 --> 00:30:19,480 Speaker 8: whether it's Apple or it's a market as a whole. 597 00:30:19,560 --> 00:30:22,280 Speaker 8: Remember this week, we've gone down earlier in the week, 598 00:30:22,440 --> 00:30:26,400 Speaker 8: we saw a great ADP jobs number, but just before 599 00:30:26,520 --> 00:30:29,840 Speaker 8: that we had the ISM numbers come out, and the 600 00:30:29,960 --> 00:30:33,360 Speaker 8: forward looking jobs number for ISM was horrible. It was 601 00:30:33,440 --> 00:30:37,320 Speaker 8: one of the worst readings since twenty twenty. I think 602 00:30:37,400 --> 00:30:39,920 Speaker 8: this is indicative of the moment we're in. There's a 603 00:30:40,000 --> 00:30:43,800 Speaker 8: lot of capital still slashing around the system. When M two, 604 00:30:44,160 --> 00:30:47,760 Speaker 8: money supply went up forty percent in two years, and 605 00:30:47,880 --> 00:30:49,680 Speaker 8: we just haven't gotten the money out of the system. 606 00:30:50,080 --> 00:30:53,320 Speaker 8: So you're getting these mixed readings where sometimes the economy 607 00:30:53,400 --> 00:30:55,800 Speaker 8: looks strong and we're ready to take off, and then 608 00:30:55,840 --> 00:30:57,880 Speaker 8: the next report you say, oh my goodness, we might 609 00:30:57,920 --> 00:31:01,040 Speaker 8: be in a recession by the fourth quarter. So the market, 610 00:31:01,080 --> 00:31:03,440 Speaker 8: I think, is going to be volatile here. And remember 611 00:31:03,800 --> 00:31:05,840 Speaker 8: seasonally we're heading into a rough spot. 612 00:31:06,680 --> 00:31:09,720 Speaker 3: Eddie Ardini said today that we are not in a 613 00:31:09,800 --> 00:31:12,160 Speaker 3: rolling recession, We're in a rolling recovery. 614 00:31:12,240 --> 00:31:15,800 Speaker 7: Would you agree with that, Well, I think we're. 615 00:31:16,280 --> 00:31:20,080 Speaker 8: We're in an earnings recession, and yet stocks have gone higher. 616 00:31:20,160 --> 00:31:22,960 Speaker 8: Remember most of the games here have been pe expansion, 617 00:31:23,120 --> 00:31:27,480 Speaker 8: not earnings expansion. I do think when we look, the 618 00:31:27,560 --> 00:31:29,920 Speaker 8: Fed is going to get what it wants. Inflation is 619 00:31:29,960 --> 00:31:32,480 Speaker 8: starting to slow down, but if they take their foot 620 00:31:32,520 --> 00:31:35,000 Speaker 8: off the accelerator, even a little bit, inflation is going 621 00:31:35,080 --> 00:31:37,600 Speaker 8: to come roaring back. And what that tells me is 622 00:31:38,040 --> 00:31:41,160 Speaker 8: that this hope that the FED is going to stop 623 00:31:41,320 --> 00:31:43,640 Speaker 8: and we're going to get a thrust in the economy. 624 00:31:44,480 --> 00:31:46,560 Speaker 8: I think you have to be very very cautious with that. 625 00:31:47,400 --> 00:31:50,320 Speaker 3: Why are you thinking that the FED should not lay 626 00:31:50,400 --> 00:31:53,600 Speaker 3: their foot off the gas here, given that we are 627 00:31:53,720 --> 00:31:57,800 Speaker 3: still seeing such strong consumer spending, we're still seeing strong wages, 628 00:31:57,880 --> 00:31:58,840 Speaker 3: strong jobs data. 629 00:32:00,120 --> 00:32:02,880 Speaker 8: Well, we're seeing we're also seeing some weakening. So as 630 00:32:02,920 --> 00:32:06,320 Speaker 8: I said, ism the jobs information was actually not too good, 631 00:32:06,360 --> 00:32:10,120 Speaker 8: and that's forward looking. We're seeing credit card debt expand dramatically. 632 00:32:10,200 --> 00:32:13,680 Speaker 8: We're seeing delinquency rates go up, we're seeing the banks 633 00:32:13,680 --> 00:32:16,560 Speaker 8: starting to take loan loss reserves, and we still haven't 634 00:32:16,600 --> 00:32:19,720 Speaker 8: seen the impact of what we're seeing consistently in the 635 00:32:19,800 --> 00:32:23,960 Speaker 8: surveys of tightening credit conditions at banks and commercial real estate. 636 00:32:24,040 --> 00:32:26,320 Speaker 8: So right now, just to give you an idea, we're 637 00:32:26,480 --> 00:32:30,800 Speaker 8: neutral in our equity position. We're neutral, and that speaks 638 00:32:30,800 --> 00:32:33,160 Speaker 8: to where we are. I can point to ten things 639 00:32:33,240 --> 00:32:35,400 Speaker 8: that would make you concern about the economy, and you 640 00:32:35,480 --> 00:32:38,120 Speaker 8: could point back with ten that make it look pretty good. 641 00:32:38,720 --> 00:32:41,840 Speaker 8: And what that speaks to is exactly what we've been 642 00:32:41,920 --> 00:32:45,080 Speaker 8: talking about on this program for a few years, and 643 00:32:45,240 --> 00:32:49,360 Speaker 8: that is, when you flood the system with trillions of 644 00:32:49,480 --> 00:32:55,640 Speaker 8: dollars artificially, you create an economic anomaly, the greatest economic 645 00:32:55,680 --> 00:32:59,120 Speaker 8: anomaly in history. And the result of that is you're 646 00:32:59,160 --> 00:33:01,880 Speaker 8: going to get these these very confusing periods whereas we 647 00:33:02,040 --> 00:33:04,760 Speaker 8: unwind the anomaly, the information's not going to make a 648 00:33:04,800 --> 00:33:08,080 Speaker 8: lot of sense. We think this is a more cautionary environment. 649 00:33:08,160 --> 00:33:10,920 Speaker 8: And by the way, you're getting five percent on your 650 00:33:10,960 --> 00:33:13,600 Speaker 8: short treasury. Yeah, so it's not like you're not getting anything, 651 00:33:14,040 --> 00:33:15,920 Speaker 8: you know, it's just now it's not the time to 652 00:33:15,960 --> 00:33:18,920 Speaker 8: go chase tech, go chase the high priced stuff and 653 00:33:19,120 --> 00:33:21,600 Speaker 8: overweight your portfolio. Doesn't make sense after a run like 654 00:33:21,640 --> 00:33:21,960 Speaker 8: we've just. 655 00:33:22,000 --> 00:33:23,960 Speaker 2: Had, When does it make sense to deploy new cash 656 00:33:24,000 --> 00:33:26,520 Speaker 2: inte equities? When does it make sense to move that 657 00:33:26,600 --> 00:33:30,480 Speaker 2: cash that's earning five percent in a money market fund equity? 658 00:33:30,560 --> 00:33:34,400 Speaker 8: Well, you just hit you just hit the point square on. 659 00:33:35,160 --> 00:33:37,600 Speaker 8: Look at the rate of return and the risk adjuster return. 660 00:33:37,760 --> 00:33:41,560 Speaker 8: So let's take the SMP it's twenty times earnings. If 661 00:33:41,600 --> 00:33:45,040 Speaker 8: we invert that right and we take one twentieth Right, 662 00:33:45,120 --> 00:33:48,720 Speaker 8: that's a quarter. So we're gonna make you know. A 663 00:33:48,800 --> 00:33:52,160 Speaker 8: ten pe is ten percent, Okay, a twenty pe is 664 00:33:52,320 --> 00:33:56,480 Speaker 8: five percent, And so we're getting five percent on stocks 665 00:33:56,560 --> 00:33:59,360 Speaker 8: with growth. By the way, so pick an earnings growth 666 00:33:59,440 --> 00:34:03,280 Speaker 8: number a percent with the economy, that's your rate of return. Well, 667 00:34:03,280 --> 00:34:06,160 Speaker 8: if we're getting five percent on risk free assets, the 668 00:34:06,280 --> 00:34:09,719 Speaker 8: question is is there enough of a risk premium in 669 00:34:09,880 --> 00:34:13,040 Speaker 8: those stocks to take that risk? And I would tell 670 00:34:13,040 --> 00:34:15,479 Speaker 8: you you have to be very careful. I would also 671 00:34:15,640 --> 00:34:19,000 Speaker 8: say that there's two different markets at the moment. Remember 672 00:34:19,120 --> 00:34:21,840 Speaker 8: ten stocks are about thirty forty percent of the return 673 00:34:21,920 --> 00:34:24,440 Speaker 8: of the market this year, so it's a narrow advance. 674 00:34:24,480 --> 00:34:26,400 Speaker 8: So you've got this one group of stocks, which by 675 00:34:26,400 --> 00:34:29,920 Speaker 8: the way, everybody's chasing, where actually the pes are astronomically higher, 676 00:34:30,000 --> 00:34:34,160 Speaker 8: which means the rate of returns are lower versus this cash. 677 00:34:34,239 --> 00:34:36,720 Speaker 8: So there is a place to put money. Small capsule, 678 00:34:36,880 --> 00:34:41,000 Speaker 8: interesting value looks, interesting international develop looks, interesting emerging markets 679 00:34:41,040 --> 00:34:44,160 Speaker 8: are starting to come up. You have to just be 680 00:34:44,440 --> 00:34:46,640 Speaker 8: very discerning of your evaluations. 681 00:34:47,480 --> 00:34:50,320 Speaker 3: How do you defend staying on the sidelines though to 682 00:34:50,480 --> 00:34:52,800 Speaker 3: clients and not even you specifically, but how would you 683 00:34:52,920 --> 00:34:58,040 Speaker 3: advise that defense because we have seen the Nasdaq up 684 00:34:58,120 --> 00:35:00,239 Speaker 3: what in the first half of this year? How do 685 00:35:00,320 --> 00:35:02,160 Speaker 3: you not get into this magnificent seven? 686 00:35:03,000 --> 00:35:06,520 Speaker 8: Well again, I think I think you just hit you 687 00:35:06,760 --> 00:35:10,120 Speaker 8: just really hit a home a point. Right, we're neutral, 688 00:35:10,760 --> 00:35:13,480 Speaker 8: and yet to clients that feels like we're on the sidelines. 689 00:35:13,520 --> 00:35:13,680 Speaker 7: Yea. 690 00:35:14,960 --> 00:35:17,640 Speaker 8: And that even the language of saying, hey, just be 691 00:35:17,800 --> 00:35:21,120 Speaker 8: neutral and it's okay to hold five percent treasuries and 692 00:35:21,320 --> 00:35:24,040 Speaker 8: be underweight let's say long term bonds, which we are, 693 00:35:24,880 --> 00:35:27,200 Speaker 8: that feels that feels somehow we're on the sidelence. 694 00:35:27,239 --> 00:35:27,520 Speaker 7: We're not. 695 00:35:27,680 --> 00:35:31,359 Speaker 8: That's called prudent long term asset management, right, it's called 696 00:35:31,480 --> 00:35:36,000 Speaker 8: long term strategy. I guess the question is if we 697 00:35:36,080 --> 00:35:39,520 Speaker 8: were to look back in time nineteen ninety nine, two thousand, 698 00:35:39,600 --> 00:35:42,440 Speaker 8: two thousand and seven, two thousand and eight, nineteen seventy 699 00:35:42,520 --> 00:35:45,719 Speaker 8: one going into seventy two to fifty to fifty crash, Right, 700 00:35:45,800 --> 00:35:49,680 Speaker 8: as we look back in time, everyone would say, hey, 701 00:35:50,200 --> 00:35:52,640 Speaker 8: I want to sell when the markets are strong and 702 00:35:52,760 --> 00:35:55,200 Speaker 8: be smart, and I want to buy when markets are 703 00:35:55,320 --> 00:35:58,920 Speaker 8: down and be smart. And yet, because we're human beings, 704 00:35:59,080 --> 00:36:01,000 Speaker 8: we continue to do the opposite. 705 00:36:01,120 --> 00:36:03,000 Speaker 2: Because we don't know when markets are up or down 706 00:36:03,160 --> 00:36:06,080 Speaker 2: unless we have a crystal ball, or can you travel 707 00:36:06,120 --> 00:36:07,360 Speaker 2: in time or. 708 00:36:07,440 --> 00:36:11,000 Speaker 8: You use valuation, use fundamental valuation right. It walks you 709 00:36:11,080 --> 00:36:13,520 Speaker 8: through the process and you have to have a long 710 00:36:13,600 --> 00:36:17,240 Speaker 8: term perspective and not be thinking short term. It's really simple. 711 00:36:17,320 --> 00:36:20,279 Speaker 8: And my point of view is this. I'm not suggesting 712 00:36:20,400 --> 00:36:22,800 Speaker 8: you leave the market, or you stand on the sidelines, 713 00:36:22,880 --> 00:36:25,239 Speaker 8: or you try to grab some traumatic moment to put 714 00:36:25,280 --> 00:36:29,040 Speaker 8: it in. I'm saying, with the markets run as far 715 00:36:29,120 --> 00:36:32,480 Speaker 8: as it has with evaluations, why be overweight? 716 00:36:33,120 --> 00:36:35,320 Speaker 2: Leo Kelly, we love it when you join us, founder 717 00:36:35,400 --> 00:36:38,320 Speaker 2: and CEO of Verdan's Capital Advisors on the on the 718 00:36:38,400 --> 00:36:40,879 Speaker 2: Zoom from Hunt Valley, Maryland. Have a great afternoon, Leo, 719 00:36:40,960 --> 00:36:42,960 Speaker 2: have a great weekend. We'll talk to you next time. 720 00:36:42,960 --> 00:36:44,319 Speaker 2: You're listening to Bloomberg Business Week. 721 00:36:44,440 --> 00:36:48,759 Speaker 1: This is Bloomberg. This is the Bloomberg Business Week Podcast. 722 00:36:48,960 --> 00:36:52,239 Speaker 1: I'll available on Apple, Spotify and anywhere else you get 723 00:36:52,280 --> 00:36:56,279 Speaker 1: your podcast. Listen live weekday afternoons from three to six 724 00:36:56,360 --> 00:37:00,440 Speaker 1: Eastern on Bloomberg dot Com, the iHeartRadio app in and 725 00:37:00,520 --> 00:37:03,560 Speaker 1: the Bloomberg Business You can also watch us live every 726 00:37:03,600 --> 00:37:07,000 Speaker 1: weekday on YouTube and always on the Bloomberg terminal