WEBVTT - U.S. Initial Jobless Claims Drop to Lowest Since March 2020 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Karl Masser and I'm 0:00:04.480 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 0:00:07.320 --> 0:00:09.840 you the latest news from the world to business and finance, 0:00:09.840 --> 0:00:13.640 plus technology, politics, economics, all purtnising the power of Business 0:00:13.680 --> 0:00:17.160 Week reporters and editors not to mention our journalists and 0:00:17.160 --> 0:00:20.000 analyst in more than one twenty countries. You can download 0:00:20.000 --> 0:00:23.239 Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot com. 0:00:23.400 --> 0:00:25.200 You can also listen to our radio show at two 0:00:25.200 --> 0:00:27.760 pm Eastern Time on the Bloomberg Radio or watch us 0:00:27.760 --> 0:00:31.880 on YouTube search Bloomberg Clovel News Well. A group of 0:00:31.880 --> 0:00:35.360 top vaccine experts meeting today also tomorrow to consider whether 0:00:35.360 --> 0:00:37.920 people who get the COVID nteaen vaccines made my BRAJOURNA 0:00:38.200 --> 0:00:40.280 and J and J should receive booster shots. This is 0:00:40.320 --> 0:00:42.440 continuing to kind of figure out who needs what, right, 0:00:42.560 --> 0:00:45.720 who needs what and web rank. The US FDA is 0:00:45.760 --> 0:00:48.640 going to send Merc's COVID nineteen pill to an advisory 0:00:48.640 --> 0:00:51.559 committee for review, using a public form to discuss any 0:00:51.600 --> 0:00:54.920 safety concerns ahead of a potential authorization. Remember this is treatment, 0:00:55.480 --> 0:00:57.319 so it really could change the game for people who 0:00:57.360 --> 0:00:59.520 are infected with COVID. All right, So that's some of 0:00:59.560 --> 0:01:01.840 the broader, bigger stories. When it comes to COVID nineteen. 0:01:02.400 --> 0:01:04.520 Dr Penny wheel Or is someone we have reached out 0:01:04.560 --> 0:01:07.360 to throughout the pandemic. She's present CEO at the Line 0:01:07.400 --> 0:01:10.000 of Health. They have UM a lot of hospitals, I 0:01:10.040 --> 0:01:12.600 think over ten. I think it's about a dozen in 0:01:12.640 --> 0:01:15.800 the Minnesota area, UM and so they have really a 0:01:16.160 --> 0:01:18.120 front row seat to what's been going in the Midwest 0:01:18.160 --> 0:01:20.360 when it comes to COVID. She's back with us on 0:01:20.520 --> 0:01:23.360 the phone from Minnesota. Dr Wheeler, it is so nice 0:01:23.400 --> 0:01:27.480 to have you back with us um this. You know, COVID. 0:01:27.520 --> 0:01:29.320 I think we all had hoped by now that we've 0:01:29.360 --> 0:01:33.240 been beyond it, UM, but we're not. What's going on 0:01:33.280 --> 0:01:36.600 in the Midwest, well sure, we sure wish we were 0:01:36.680 --> 0:01:40.480 beyond it here. You know. Unfortunately the country as a 0:01:40.520 --> 0:01:43.280 whole is going down from the delta variant, but we 0:01:43.440 --> 0:01:46.440 are still UM peaking here. So it seemed like the 0:01:46.520 --> 0:01:50.800 whole variant and it's infectivity moved north. So we're seeing 0:01:51.280 --> 0:01:55.400 cases here that are exceeding even our our second highest 0:01:55.480 --> 0:01:58.880 peak right now, and the situation has changed because the 0:01:59.000 --> 0:02:04.400 staffing is so vallenge challenging everywhere. So it's it's tough 0:02:04.440 --> 0:02:07.320 going right now. In the words of one doctor that 0:02:07.360 --> 0:02:10.200 I've heard of it just to show you the strain, 0:02:10.360 --> 0:02:12.079 he said, I don't know whether to drive for my 0:02:12.120 --> 0:02:14.679 shift in the e D or to drive into the reservoir. 0:02:14.919 --> 0:02:18.880 It's that it's that taxing for our caregivers who are 0:02:19.040 --> 0:02:22.120 just doing amazing work. Can you give us any numbers 0:02:22.160 --> 0:02:25.280 about what you're seeing in the thirteen hospitals and more 0:02:25.320 --> 0:02:29.640 than ninety clinics with with who's being affected right now, 0:02:30.120 --> 0:02:33.040 who's hospitalized right now, in the portion of those who 0:02:33.120 --> 0:02:36.840 are or not who are not vaccinated? Yeah? Sure, can 0:02:36.960 --> 0:02:39.519 we we uh at a line to take care about 0:02:40.560 --> 0:02:42.880 percent of the people who are hospitalized with COVID in 0:02:42.960 --> 0:02:46.480 our states were pretty good litmus tests. The vast majority 0:02:46.919 --> 0:02:52.040 of the people requiring hospitalization are unvaccinated. Eight percent of 0:02:52.080 --> 0:02:54.120 the people in our i c U s right now. Um, 0:02:54.440 --> 0:02:57.519 you know, intensive care units are unvaccinated, and that's where 0:02:57.520 --> 0:03:01.840 we're seeing the the primary really se your illness and sadly, sadly, 0:03:01.919 --> 0:03:06.160 way too many deaths occurring. So that's still that's still 0:03:06.240 --> 0:03:09.280 the case. Um, so and and again the numbers are 0:03:09.720 --> 0:03:13.440 in this geography still rising rather than falling. What's the 0:03:13.560 --> 0:03:16.560 risk planning or contingency planning that you guys are doing 0:03:17.240 --> 0:03:21.200 in anticipation of another way potentially or a variant that 0:03:21.560 --> 0:03:25.760 trips us up again? Yeah, well certainly, you know, a 0:03:25.880 --> 0:03:27.480 lot of it has to do with cash. How can 0:03:27.560 --> 0:03:30.880 we have adequate staffing available? So a lot of our 0:03:31.240 --> 0:03:34.200 our leaders are taking frontline positions and trying to bolster 0:03:34.360 --> 0:03:37.440 the staffing. We're trying to eliminate things that are unnecessary 0:03:37.560 --> 0:03:40.800 so that we can accommodate the surge we're having. UM. 0:03:41.240 --> 0:03:44.680 We have a centralized access center so it can level load. UM, 0:03:45.120 --> 0:03:47.360 you know, where people can go of one hospitals fold 0:03:47.440 --> 0:03:49.720 and another hospital take it. And we do that actually 0:03:50.000 --> 0:03:52.240 with the whole state of Minnesota and the other health 0:03:52.280 --> 0:03:56.240 systems in the state UM as well. So we're trying 0:03:56.320 --> 0:03:59.200 to do some of those things to accommodate the needs. 0:03:59.320 --> 0:04:01.720 COVID is a big nied but we're also seeing delayed 0:04:01.800 --> 0:04:05.000 care needs of significance all at a time when staffing 0:04:05.120 --> 0:04:09.320 is really challenge. Dr Wheeler help set expectations for what 0:04:09.440 --> 0:04:15.720 things look like, Caroline, I are flying today tonight. It's 0:04:15.840 --> 0:04:17.520 the first time I've gone on a long flight. Your 0:04:17.520 --> 0:04:20.240 first time flying, Caroline, what eighteen months? Yeah, exactly. We're 0:04:20.279 --> 0:04:22.839 gonna be wearing masks throughout the flight at the airport. 0:04:23.000 --> 0:04:24.800 Is this something we're gonna be doing for the rest 0:04:24.839 --> 0:04:28.080 of our lives. Yeah, that's a good question. I wish 0:04:28.120 --> 0:04:30.360 I could predict it. What what has happened is we 0:04:30.400 --> 0:04:32.440 can only kind of see almost two to three weeks 0:04:32.480 --> 0:04:34.600 ahead of us. And beyond that, I mean, I wouldn't 0:04:34.600 --> 0:04:38.160 have predicted this, you know, Um, beyond that, it's really 0:04:38.200 --> 0:04:40.600 hard to predict. I'm I'm. I think that some of 0:04:40.720 --> 0:04:44.040 the rise in the cases are because of school openings, 0:04:44.200 --> 0:04:46.600 and I think that the more vaccinations we can get 0:04:46.640 --> 0:04:51.160 into the pediatric population that will help as well. Um. 0:04:51.440 --> 0:04:53.640 I think we're also realizing that some of what Japan 0:04:53.760 --> 0:04:56.599 did traditionally we probably should do more of in terms 0:04:56.640 --> 0:04:59.120 of masking when we're when we're not well, So some 0:04:59.240 --> 0:05:01.520 of that be savior probably should stay with us to 0:05:01.600 --> 0:05:04.520 keep people safe. It's hard to predict long term. Yeah, 0:05:04.560 --> 0:05:06.840 I've definitely gotten much more comfortable we're wearing a mask. 0:05:06.880 --> 0:05:09.240 I feel like I almost miss it sometimes when I'm 0:05:09.240 --> 0:05:12.400 out and about walking and it's not there. Um, I 0:05:12.520 --> 0:05:15.120 just want to ask you, you guys are transitioning. Uh, 0:05:15.800 --> 0:05:18.000 you're gonna have a new CEO and you're gonna move 0:05:18.040 --> 0:05:19.599 off to I believe the board. Tell us a little 0:05:19.600 --> 0:05:23.520 bit about that transition. Yeah, well, you know, I it's 0:05:24.320 --> 0:05:26.160 these people are so amazing. It's going to be these 0:05:26.240 --> 0:05:28.320 people with what they've accomplished for the CUIs that I 0:05:28.360 --> 0:05:30.440 will miss them most. But I am so grateful for 0:05:30.520 --> 0:05:32.960 the organization. I love to transition it to our chief 0:05:33.520 --> 0:05:38.120 operating officer and President Lisa Shannon, who's just really solid, 0:05:38.200 --> 0:05:41.680 so real smooth transition. Our our employees don't need any 0:05:41.720 --> 0:05:44.400 more disruption than they already have, and that to stay 0:05:44.400 --> 0:05:47.200 on the board and have that continuity is really important 0:05:47.279 --> 0:05:50.480 for us in the communities we serve. Well, it sounds 0:05:50.480 --> 0:05:51.960 like you've been a great leader. I know you guys 0:05:52.000 --> 0:05:54.200 have been had so much stuff to deal with, uh, 0:05:54.400 --> 0:05:56.360 certainly in this and we're not out of it out 0:05:56.400 --> 0:05:58.560 of the wood yet, and we have really leaned on 0:05:58.680 --> 0:06:00.800 you in terms of getting your ps sspective. So thank 0:06:00.839 --> 0:06:03.720 you so much, and uh you take care. Dr Penny Wheeler, 0:06:04.040 --> 0:06:06.360 President and Chief executive Officer at A Line of Health 0:06:06.800 --> 0:06:09.160 on the phone from Minnesota. I do think this is 0:06:09.240 --> 0:06:11.760 just a way of life. It is to some extent. Yeah, 0:06:11.839 --> 0:06:13.239 I think it is too. I mean there's the before 0:06:13.360 --> 0:06:15.480 times in the aftertimes, right. We kind of joke about it, 0:06:15.680 --> 0:06:19.360 but it really is. It's going to be the way 0:06:19.440 --> 0:06:22.120 that we live with it, and I think that we're 0:06:22.120 --> 0:06:23.480 getting more and more used to it. I think that 0:06:24.160 --> 0:06:26.600 kids part of it is is different because there are 0:06:26.640 --> 0:06:30.080 no vaccines yet for many kids, but hopefully getting closer 0:06:30.120 --> 0:06:34.159 to it. This is Bloomberg Business Week with Carol Masser 0:06:34.400 --> 0:06:38.680 and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. The 0:06:38.839 --> 0:06:41.599 US initial Joba's claims, we've been talking about it dropping 0:06:41.600 --> 0:06:44.600 to the low since March of time. Prices paid to 0:06:44.680 --> 0:06:47.800 US producers rose in September. We also heard about that 0:06:48.040 --> 0:06:50.240 from Charlie at the slowest pace of the year. And 0:06:50.279 --> 0:06:52.920 what we're seeing, Tim, is cooling costs of services, including 0:06:52.960 --> 0:06:56.200 air fairs as the delta variant impacted demand. So that's 0:06:56.240 --> 0:06:58.960 pretty significant. It is pretty significant to join us to 0:06:59.200 --> 0:07:01.320 help us dig through these numbers and all this data 0:07:01.400 --> 0:07:04.160 is read Picker, US economy reporter at Bloomberg New She 0:07:04.240 --> 0:07:06.000 joins US on the phone from Washington, read it is 0:07:06.040 --> 0:07:08.440 always great to have you on the show. Thanks for 0:07:08.520 --> 0:07:10.400 joining us today. Where do you want to start? Do 0:07:10.400 --> 0:07:11.880 you want to start with initial jobless claims or do 0:07:11.880 --> 0:07:12.920 you want to start with p P I What do 0:07:12.920 --> 0:07:16.280 you think is more important? UM? So they're both important, 0:07:16.280 --> 0:07:18.840 but let's start with claims. UM. So, you know, in 0:07:19.080 --> 0:07:21.040 terms of things for having me on the show, it's 0:07:21.040 --> 0:07:23.240 always fun to be here. UM. In terms of them 0:07:23.320 --> 0:07:26.040 following below three thousand, I mean needs to great news 0:07:26.040 --> 0:07:29.240 all around, especially when you think about the fact of, 0:07:30.000 --> 0:07:33.120 you know, the prependemic level of these claims in what 0:07:33.360 --> 0:07:35.760 was one of the best job markets in years was 0:07:35.800 --> 0:07:39.760 around two hundred and fifteen thousand or so UM a week. UM. 0:07:39.880 --> 0:07:41.720 And I think what it really shows you when we 0:07:41.800 --> 0:07:44.720 think about this labor very confusing labor market that we're in, 0:07:45.520 --> 0:07:49.360 is we're in a jobs market where quaitsret record level, 0:07:49.840 --> 0:07:53.920 turnover is high, and businesses are struggling to fill open positions. 0:07:54.440 --> 0:07:57.840 So you know, employers are very much trying to hold 0:07:57.880 --> 0:08:01.320 onto their workers, and you know, from an inflation perspective, 0:08:01.400 --> 0:08:05.640 we've we've seen that in terms of folks raising wages, 0:08:05.760 --> 0:08:09.480 offering all kinds of incentives and bonuses. UM. But yeah, 0:08:09.560 --> 0:08:12.480 I think the labor market is in a very interesting 0:08:12.600 --> 0:08:16.200 state right now. But the jobless claims figures really point 0:08:16.280 --> 0:08:18.440 us in that direction of things are getting better. I 0:08:18.600 --> 0:08:20.760 just thinking as you're talking about this, read, I'm just 0:08:20.800 --> 0:08:23.360 thinking about Domino's Pizza, the company reporting earnings today and 0:08:23.400 --> 0:08:25.200 saying that it can't get enough people to cook and 0:08:25.240 --> 0:08:28.880 deliver pizzas, which actually hurts sales for the most recent quarter, Carol. 0:08:29.000 --> 0:08:32.760 So this is has a significant economic impact, right. We 0:08:32.880 --> 0:08:35.120 just heard for Penny Wheeler over the line of health healthcare, 0:08:35.240 --> 0:08:40.160 she can't get enough workers. It's just everywhere. Um. But nonetheless, 0:08:41.120 --> 0:08:43.719 this is a better sign when it comes to what 0:08:43.800 --> 0:08:46.400 we've been seeing in the labor market. And this is important, 0:08:46.440 --> 0:08:48.760 right because the jobs market, the monthly jobs markets are 0:08:48.800 --> 0:08:51.720 backward looking, and so this gives us a better better 0:08:51.760 --> 0:08:56.360 feel of real time data. Absolutely, And you know, I 0:08:56.440 --> 0:09:00.160 don't think anyone has a great handle on what's going on. Um. 0:09:00.480 --> 0:09:02.400 But you know one piece that I thought was really 0:09:02.440 --> 0:09:06.280 good today, Uh, Katya Dmitrieva and Jill Shaw actually had 0:09:06.280 --> 0:09:09.160 a really nice Business Week piece, UM that was talking 0:09:09.200 --> 0:09:12.400 about some of the stories of folks who aren't working 0:09:12.520 --> 0:09:15.040 right now and why you know, despite the fact that 0:09:15.080 --> 0:09:18.760 we have these near record job openings. UM. But I 0:09:18.840 --> 0:09:21.000 will say, you know, looking at the silver lining of this, 0:09:21.320 --> 0:09:24.719 I mean, from a worker perspective, you know, we have 0:09:24.800 --> 0:09:27.679 the highest clips right on record, UM, which shows that 0:09:27.800 --> 0:09:30.000 a lot of folks have a lot of confidence that 0:09:30.080 --> 0:09:32.720 they could find a new job, whether that's a job 0:09:32.840 --> 0:09:36.720 that fits their lifestyle, better, has their hours, has better pay, um, 0:09:36.760 --> 0:09:39.920 whatever it may be. UM. And you know we've seen 0:09:40.200 --> 0:09:43.480 pretty robust way games as well as employers try to 0:09:43.520 --> 0:09:47.679 attract these folks. So UM. From a worker perspective, I mean, 0:09:48.880 --> 0:09:52.680 it is a good time to you know, be a worker. 0:09:52.880 --> 0:09:55.280 And from that point of the labor market it's quite 0:09:55.360 --> 0:09:58.360 tight UM, which has you know, obviously had implications for 0:09:58.440 --> 0:10:01.640 the set as well. Let's talk about those other numbers. 0:10:01.640 --> 0:10:03.920 I'm just thinking, is that it gets to be you know, 0:10:03.960 --> 0:10:06.200 I'm hearing this and it's like dominos can't get workers. 0:10:06.400 --> 0:10:08.199 We just heard from the CEO of a line of 0:10:08.280 --> 0:10:10.920 health and we're getting into the end of the year. UM. 0:10:11.000 --> 0:10:13.719 Let's talk producer price index though, and and what we 0:10:13.840 --> 0:10:16.400 learned this morning, the smallest advance UH in quite a 0:10:16.440 --> 0:10:19.599 while read yeah, and you know, in that coming on 0:10:19.679 --> 0:10:21.800 the heels of the CPI data that we got a 0:10:21.880 --> 0:10:25.920 little bit earlier this week, UM, and it was it 0:10:26.040 --> 0:10:28.719 was good news and some ways because we saw some 0:10:28.920 --> 0:10:32.280 of that services inflation cooled down a little bit, UM, 0:10:32.400 --> 0:10:35.680 but we also saw a pretty still pretty robust inflation 0:10:35.760 --> 0:10:39.120 from the good side. UM. And you know, the way 0:10:39.280 --> 0:10:41.400 that I often think about the economy where we are 0:10:41.520 --> 0:10:45.000 right now is we have lower growth and higher inflation 0:10:45.200 --> 0:10:48.240 than many economists were expecting just a few months months ago. 0:10:48.880 --> 0:10:51.400 And you know, in terms of the growth picture, you know, 0:10:51.640 --> 0:10:54.480 we've essentially seen that consumers spinning in the third quarter 0:10:54.679 --> 0:10:57.719 has proven to be much weaker than economists thought a 0:10:57.760 --> 0:11:00.240 few months ago. A large part of that is ELSA, 0:11:00.320 --> 0:11:03.520 but you've also got these massive supply Chaine disruptions that 0:11:03.559 --> 0:11:07.520 are reaking havoc on growth and reaking havoc on PPI, 0:11:08.240 --> 0:11:12.320 the pp I index um as as well as consumer prices. UM. 0:11:12.400 --> 0:11:14.440 I mean, I just think of something like, I assume 0:11:14.480 --> 0:11:19.120 the manufacturing data where you've got solid news new orders growth, right, 0:11:19.360 --> 0:11:22.679 producers can't get the scale of material right they need 0:11:22.800 --> 0:11:26.120 to kill those orders. It's you know, data points that 0:11:26.200 --> 0:11:29.200 investors certainly seem to be pretty happy about Bloomberg News 0:11:29.320 --> 0:11:33.000 US economic reporter read pick it. You're listening to Bloomberg 0:11:33.040 --> 0:11:36.680 Business Week with Carol Messer and Bloomberg Quick Takes Tim 0:11:36.800 --> 0:11:40.560 Stinovic on Bloomberg Radio. This is among our most read. 0:11:40.600 --> 0:11:42.200 In fact, I think it might still be the most 0:11:42.280 --> 0:11:44.800 read on the Bloomberg in the past eight hours. It's 0:11:44.800 --> 0:11:48.120 also Today's Big Take. It's part of an ongoing Business 0:11:48.160 --> 0:11:51.760 Week online series here at Bloomberg, and this one in 0:11:51.840 --> 0:11:53.960 particular takes a look at how wealthy New Yorkers are 0:11:53.960 --> 0:11:56.560 getting a steel on property taxes. You heard it right, Tim. 0:11:56.840 --> 0:12:00.440 Jason Grotto is senior investigative reporter at Bloomberg. He joins 0:12:00.480 --> 0:12:02.319 us now on the phone from Chicago. Jason, it's great 0:12:02.360 --> 0:12:04.280 to have you on the show. Congratulations to you and 0:12:04.360 --> 0:12:06.640 the rest of the team on today's Big Take. I 0:12:06.720 --> 0:12:08.719 read this story and I thought to myself, you know what, 0:12:08.880 --> 0:12:10.760 it is so true when you look at real estate 0:12:10.800 --> 0:12:14.559 in New York City, there the amount of money that 0:12:15.120 --> 0:12:17.240 so many condos are worth. It is shocking to see 0:12:17.280 --> 0:12:20.240 how low some of the property taxes are. You found 0:12:20.280 --> 0:12:22.760 a two million dollar condo in Brooklyn that only pays 0:12:22.800 --> 0:12:26.040 a hundred and fifty seven dollars a year in property taxes. 0:12:26.600 --> 0:12:30.800 Why is that? Well, first, thanks thanks so much for 0:12:30.920 --> 0:12:34.120 having me. Um. Uh, it's it's the result of the 0:12:34.240 --> 0:12:37.160 system that you know, over the last thirty years or 0:12:37.240 --> 0:12:41.359 so has been you know, added to just become incredibly 0:12:41.480 --> 0:12:45.479 complex and and the low tax though on that particular 0:12:46.120 --> 0:12:49.559 condo is the result of two things. One is the 0:12:49.800 --> 0:12:54.760 extreme undervaluation of condo and and cooperatives of the market 0:12:54.880 --> 0:12:57.920 values that the city comes up with um. And then 0:12:58.000 --> 0:13:02.240 the other is the very generous um exemptions and abatements 0:13:02.280 --> 0:13:05.719 that are provided to certain condos and cooperatives that drive 0:13:05.800 --> 0:13:09.200 the build down even further. Well, and you guys, um 0:13:09.600 --> 0:13:12.959 looked into a ton of city records when it came 0:13:13.000 --> 0:13:18.280 to condo sales and taxes. UM. So tell us in 0:13:18.440 --> 0:13:21.360 terms of your takeaway, is it policy? Is it? It's 0:13:21.360 --> 0:13:25.160 something that just has been not noticed, Like, how does 0:13:25.240 --> 0:13:30.679 something like this perpetuate for so long? Well, yeah, that's right. 0:13:30.720 --> 0:13:34.280 So we ended up analyzing millions of property tax records 0:13:34.679 --> 0:13:38.480 in New York City and found, you know, a consistent pattern, 0:13:38.679 --> 0:13:43.160 first that the city drastically undervalues these properties by the 0:13:43.240 --> 0:13:48.000 magnitude of about and the other um thing that we 0:13:48.080 --> 0:13:52.319 found is that the valuations have a pattern. Lower priced 0:13:52.640 --> 0:13:58.720 properties are overvalued relative to market prices h market values, 0:13:58.840 --> 0:14:02.560 and higher priced ones are undervalues. And so the first 0:14:02.640 --> 0:14:05.360 part of the process, where everyone is overvalued, it really 0:14:05.440 --> 0:14:09.240 obscures the second part, which is known as regressivity. Essentially, 0:14:09.920 --> 0:14:12.640 New York has a regressive property tax system, and the 0:14:12.800 --> 0:14:16.400 low valuations mask that because you know, if I own 0:14:16.440 --> 0:14:19.960 a two dollar home and they're only capturing eighty five 0:14:20.160 --> 0:14:22.800 thousand dollars of my value, I'm thinking, hey, I'm getting 0:14:22.800 --> 0:14:25.440 a good deal. What what I don't know is that 0:14:25.560 --> 0:14:28.320 the person owns a two million dollar home, they're only 0:14:28.440 --> 0:14:32.720 capturing you know, two hundred thousand of that. So you know, 0:14:32.840 --> 0:14:35.680 one might be getting thirty seven of their value captured 0:14:36.080 --> 0:14:39.640 and the higher end property will be getting about and 0:14:39.760 --> 0:14:42.600 that skews the tax bills for the entire city that 0:14:42.880 --> 0:14:45.080 valuation process. Jason, this is one of the stories that 0:14:45.160 --> 0:14:48.600 encourage everyone to read online because there's an interactive element 0:14:48.640 --> 0:14:50.920 to it, and there are some amazing, amazing visuals that 0:14:51.000 --> 0:14:55.720 show on a chart how much a condo is worth 0:14:55.800 --> 0:14:58.280 and the portion of that that they're paying in property 0:14:58.320 --> 0:15:01.160 taxes per year and it's it's pretty mind boggling to 0:15:01.240 --> 0:15:02.640 see and you really have to look at it to 0:15:02.760 --> 0:15:05.400 just understand the magnitude of it. So, what is New 0:15:05.480 --> 0:15:07.080 York City? What a New York State? What do they 0:15:07.120 --> 0:15:11.720 say about this? Because they are leaving money on the table? Yeah, um, 0:15:12.000 --> 0:15:15.120 so we were not granted any interviews with the city 0:15:15.200 --> 0:15:18.720 despite months of trying. Um, you know, what do they 0:15:18.800 --> 0:15:20.880 do about it? You know, it's kind of the big question. 0:15:21.000 --> 0:15:24.760 And the problem here is that this issue has been 0:15:24.840 --> 0:15:28.480 going on for so long that the market itself, the 0:15:28.600 --> 0:15:33.640 real real estate market itself, has incorporated these um skewed 0:15:33.680 --> 0:15:38.440 taxes into actual values that capitalize them. So untangling this 0:15:38.840 --> 0:15:40.760 is going to be a real problem. And that's one 0:15:40.800 --> 0:15:43.840 reason why it hasn't been six in thirty years. There 0:15:43.880 --> 0:15:46.160 have been three mayoral efforts to try to fix the 0:15:46.200 --> 0:15:48.720 property tax system in New York. So people are well 0:15:48.800 --> 0:15:52.680 aware that there's you know, underlying problems. But you know, 0:15:52.800 --> 0:15:54.920 in order to fix it, you're gonna you're talking about 0:15:55.040 --> 0:15:59.080 a massive wealth transfer. Um, people who own really high 0:15:59.240 --> 0:16:02.000 end condos and co ops will be taxed at much 0:16:02.080 --> 0:16:04.360 higher rates, which could impact the value of the property. 0:16:04.440 --> 0:16:06.440 And that in the nutshell is why it's so hard 0:16:06.480 --> 0:16:08.120 to fix. You can't help but feel I have to say, 0:16:08.160 --> 0:16:10.560 we went through recently like a tax reassessment and like 0:16:10.680 --> 0:16:12.760 everybody was like, well wait, what is your property? Like 0:16:12.840 --> 0:16:15.600 how you know? And I feel like as transparency or 0:16:15.640 --> 0:16:17.520 if this data was all put out there and everybody, 0:16:17.720 --> 0:16:20.640 certainly those who are benefiting by not so I want 0:16:20.680 --> 0:16:23.480 that stuff put out there. But if you are being penalized, 0:16:23.480 --> 0:16:27.640 you're gonna be like, well, wait a minute, this isn't fair. Yeah. 0:16:27.680 --> 0:16:30.240 I mean I think you know, first of all, New 0:16:30.320 --> 0:16:33.360 York is not alone in this in these issues. We 0:16:33.520 --> 0:16:36.280 published the story earlier this year looking at this at 0:16:36.320 --> 0:16:40.160 a nationwide level, and we found that that this problem 0:16:40.200 --> 0:16:45.520 of regressivity is inherent in jurisdictions across the country. New 0:16:45.600 --> 0:16:50.120 York is huge and it is particularly bad and kind 0:16:50.160 --> 0:16:51.960 of as New York goes, so it was the rest 0:16:52.040 --> 0:16:55.000 of the country. UM, so we wanted to drill down 0:16:55.080 --> 0:16:57.480 into New York. But you know, the thing that you're 0:16:57.600 --> 0:17:02.000 touching on, the transparency piece is key. If people can't 0:17:02.040 --> 0:17:05.120 see clearly, um, it's it's very hard to understand what's 0:17:05.160 --> 0:17:09.440 going on, what is the relationship between landlords and this policy? 0:17:09.520 --> 0:17:11.160 Because I think to myself, Okay, well New York City 0:17:11.200 --> 0:17:12.920 is a place where a lot of people rent, and 0:17:12.960 --> 0:17:18.480 I wonder to what extent landlords have had favorable tax advantages. Well, 0:17:18.560 --> 0:17:21.080 what we found is that actually the effective tax rate, 0:17:21.160 --> 0:17:23.680 which is really just you know, the property tax of 0:17:23.840 --> 0:17:26.320 bill divided by the value of the market price of 0:17:26.359 --> 0:17:29.680 the property. We found that rental properties actually pay a 0:17:29.840 --> 0:17:33.840 higher effective class rate than condos and condos because that 0:17:33.960 --> 0:17:36.520 was what we studied, but cooperatives are valued the same 0:17:36.560 --> 0:17:39.720 way UM, and and what that means is they're in 0:17:39.760 --> 0:17:42.520 the same what they call tax class. So it's a 0:17:42.600 --> 0:17:45.960 matter of how is the distribution of the property tax burden, 0:17:46.040 --> 0:17:49.280 how is it distributed? And within the tax class, everyone 0:17:49.320 --> 0:17:51.399 should be paying the same effective tax rate. And what 0:17:51.520 --> 0:17:55.760 we found is that UM, condominiums are pay much lower 0:17:55.840 --> 0:17:59.760 effective tax rates UM than rentals. And what that means is, 0:18:00.280 --> 0:18:03.119 you know, to the extent that landlords passed the cost 0:18:03.240 --> 0:18:06.760 of taxes onto their tenants, rents are higher than they 0:18:06.800 --> 0:18:10.280 would be UM. Potentially if if if those taxes were lower, 0:18:10.359 --> 0:18:12.560 court landlords might pocket a lot of that money as well. 0:18:12.640 --> 0:18:15.359 So it's it's a very complex problem, but you know 0:18:15.520 --> 0:18:18.119 what it means is a lot of a lot of 0:18:18.160 --> 0:18:21.840 the burden is being shifted onto rental properties. Yeah, that's interesting. 0:18:21.840 --> 0:18:23.600 It sounds like nothing's going to change. Just got about 0:18:23.600 --> 0:18:27.000 thirty seconds here right at this point. Um, I think 0:18:27.040 --> 0:18:29.600 it's going to be very, very difficult. The political optics 0:18:29.640 --> 0:18:31.639 of it are very bad, and sort of the lessons 0:18:31.840 --> 0:18:33.920 you know that we're writing for a national audience, and 0:18:33.960 --> 0:18:36.920 the lesson is don't let it get this bad. Nothing 0:18:36.960 --> 0:18:40.480 gets people going there like property taxes and in terms 0:18:40.520 --> 0:18:45.000 of are you in taxes in general? Um, Jason, thank you. 0:18:45.680 --> 0:18:48.520 It is an in depth story, and as Tim said, 0:18:48.640 --> 0:18:51.600 check out it online because there's a lot of interactive 0:18:51.600 --> 0:18:54.000 components to it and a lot of information in details. Yeah, 0:18:54.000 --> 0:18:56.639 you can see Jason's story. It's available at Bloomberg and 0:18:56.800 --> 0:18:59.160 at Bloomberg dot com, slash business Week. You can also 0:18:59.280 --> 0:19:00.879 get to it on the blue Berg terminal. All you 0:19:00.920 --> 0:19:02.879 gotta do is type in an I big take or 0:19:03.040 --> 0:19:06.080 just a big take. Jason Grotto, He's senior investigative reporter 0:19:06.119 --> 0:19:09.160 EP Bloomberg News, joining us on the phone from Chicago. 0:19:10.240 --> 0:19:17.480 I'm ro macro journal now, but you let me drive no, no, no, 0:19:17.560 --> 0:19:23.600 no home honey, please, I'll do the right drivel I 0:19:23.720 --> 0:19:39.560 want to drive drive by good question trying this is 0:19:39.600 --> 0:19:42.640 the drive to the globe. Give me thanks, we'll try 0:19:42.840 --> 0:19:47.040 us down on Bloomberg Radio. So just about time, minutes 0:19:47.119 --> 0:19:49.439 left and today's trading session, getting ready to wrap up 0:19:49.520 --> 0:19:51.960 the Thursday trade. We are hovering near our highs, as 0:19:52.000 --> 0:19:54.280 you just heard from Charlie, just off of them. But 0:19:54.359 --> 0:19:59.040 nonetheless a rally underway. Earnings a big reason why we're 0:19:59.040 --> 0:20:01.640 gonna get into that economic data too. But let's break 0:20:01.640 --> 0:20:03.720 it down. Let's get to the drive to the close 0:20:03.800 --> 0:20:07.320 with Bloomberg News Markets reporter Abigail Doolittle. She is on 0:20:07.400 --> 0:20:09.720 the phone in our New York City bureau. It is 0:20:09.840 --> 0:20:12.920 definitely a risk on trade and it's broad based in 0:20:13.040 --> 0:20:15.600 terms of the rally, it certainly is, Carol. We're looking 0:20:15.640 --> 0:20:17.879 at the best day for the SMP five. Charlie was 0:20:17.960 --> 0:20:21.199 mentioning up one point six percent since March. The nasdack 0:20:21.400 --> 0:20:23.560 also up the same amount. That's the best day since May. 0:20:23.640 --> 0:20:25.600 So that's the degree of the buying power and speaking 0:20:25.600 --> 0:20:28.800 to the broad based nature of the rally, all eleven 0:20:29.040 --> 0:20:32.520 of the SMP five hundred sectors are higher, most by 0:20:32.560 --> 0:20:35.679 about one percent or more. The best is Materials up 0:20:35.720 --> 0:20:38.480 two point. That has everything to do with the rally 0:20:38.520 --> 0:20:41.720 and medals Materials and then Tech, and that has a 0:20:41.800 --> 0:20:44.240 lot to do with the fact that yielder down yet 0:20:44.359 --> 0:20:48.359 another day, relieving valuation concerns. So it's a really nice 0:20:48.480 --> 0:20:51.200 day for stocks for sure. Hey, Abigail, I'll talk a 0:20:51.240 --> 0:20:55.240 little bit about the socks the Philadelphia Semiconductor Index because 0:20:55.760 --> 0:20:58.399 it is having a day at one point higher by 0:20:58.440 --> 0:21:01.280 more than two point four percent and uh and at 0:21:01.320 --> 0:21:04.159 one point there were no stocks in the socks in 0:21:04.240 --> 0:21:07.560 the red. You know, this is an interesting one um 0:21:07.800 --> 0:21:10.960 for Shure Tim from the standpoint that the socks similar 0:21:11.000 --> 0:21:13.879 to the Russell two thousand, that small cap index in 0:21:14.000 --> 0:21:17.040