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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside

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Speaker 1: my co host Matt Miller.

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Speaker 2: Every business day we bring you interviews from CEOs, market pros,

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Speaker 2: and Bloomberg experts, along with essential market moving news.

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Speaker 1: Find the Bloomberg Markets podcast called Apple Podcasts or wherever

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Speaker 1: you listen to podcasts, and at Bloomberg dot com slash podcast.

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Speaker 2: Kielta's CEO Ta's Asset Management.

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Speaker 1: He joins us here in our Bloomberg Interactive Broker studio.

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Speaker 1: And if you spelled your name t Oe w S

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Speaker 1: No way am I getting Ta's out of that?

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Speaker 3: Yeah? So actually there's a V in there. It's like

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Speaker 3: waves of the ocean with a T.

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Speaker 2: Where's that from?

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Speaker 4: Where do you get?

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Speaker 5: Oh?

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Speaker 3: Yeah, well would have been an o um lot, which

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Speaker 3: is pronounceable in the English language, And so they converted

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Speaker 3: it to something that people could say, but not like say,

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Speaker 3: if you look at the spelling right.

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Speaker 2: So yeah, despite for example, koenig or which means king.

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Speaker 2: You know, it's just impossible, even for someone like me

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Speaker 2: who spent ten years living in Germany, I can never

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Speaker 2: pronounce the O with an O out over it. So

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Speaker 2: I think tas is the only.

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Speaker 3: Choice Yeah, so we're going all in. We're trying to

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Speaker 3: get lows to change their pronunciation, like we're like, we're

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Speaker 3: on a mission.

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Speaker 1: Yeah, I just because I totally you weared your name

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Speaker 1: a little earlier today. But I'm not apologizing because there's

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Speaker 1: no way you get tased out of that.

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Speaker 2: But I'll go with it.

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Speaker 1: You're in our studio. We appreciate you coming in. Yeah,

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Speaker 1: what are you doing with this market here?

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Speaker 2: Phil?

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Speaker 1: I mean people were just kind of figuring we're going

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Speaker 1: to the moon a few weeks ago, and then August

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Speaker 1: has a been so great?

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Speaker 4: What are you?

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Speaker 2: How are you thinking about it?

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Speaker 4: Yeah?

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Speaker 3: So it's you know, the markets are just big optimism machines.

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Speaker 3: I don't know, do we get that? Yeah, And so

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Speaker 3: there can be a couple of things that that cause

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Speaker 3: a dentin optimism. We all know about China rates. You know,

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Speaker 3: I'm not loving the move higher in the tenure again

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Speaker 3: today to sort of fresh highs. That's definitely weighing on it.

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Speaker 3: Are there going to be things that develop as a

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Speaker 3: result of those higher rates like we saw back in

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Speaker 3: March with the regional bank issues. We don't know. At

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Speaker 3: the same time, it feels to me a little bit

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Speaker 3: like pulling the hair nail off the finger. Is a

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Speaker 3: time to buy in this streets. You know, there's no

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Speaker 3: blood in the streets, right, And if we could make

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Speaker 3: it through the regional banking issue, why not this?

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Speaker 2: Uh Really, it's.

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Speaker 3: Interesting you're talking about in video because I think what

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Speaker 3: we need is just a little injection of something that

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Speaker 3: creates optimism. So if you get a really good report

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Speaker 3: out of that, because the AI theme going again, I

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Speaker 3: can think we could rally out of this. However, we

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Speaker 3: actually went defensive on our US stocks, which means fully

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Speaker 3: defensive last week.

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Speaker 1: What's the defensive stock for you mean? Is it a

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Speaker 1: big bounce, lots of cash?

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Speaker 2: What's what's it mean?

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Speaker 3: So hey, when we say defensive, we mean defensive like

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Speaker 3: as in T bills. Oh right, So we have a

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Speaker 3: bunch of different funds we have. We have an option

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Speaker 3: hedged ETF and we're SKY that's always in the markets,

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Speaker 3: but hedged right with options. But we have a couple

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Speaker 3: of funds too that can go fully fully out of

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Speaker 3: the markets. And so those went out of the markets

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Speaker 3: in T bills. We can also be in aggregate bonds

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Speaker 3: and other types of things. Of those win into T bills.

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Speaker 3: That's purely just reactive to price trends, and so we

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Speaker 3: don't know what's going to happen. So that's you know,

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Speaker 3: that's the perspective we bring, is that we we have

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Speaker 3: fun talking about the market, but we can actually make

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Speaker 3: huge shifts, so we don't care as much as a

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Speaker 3: normal market player if things fall off the rails because

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Speaker 3: we can can you know, hedge against that.

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Speaker 2: You can understand though, why the market's an optimism machine

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Speaker 2: if you just look at any long term chart of

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Speaker 2: you know, the Dow or the S and P five hundred.

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Speaker 2: I mean, obviously over the long term it's going up

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Speaker 2: into the right do you think the other you know,

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Speaker 2: four hundred and ninety three stocks and the S and

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Speaker 2: P are going to start to catch up with the

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Speaker 2: top seven? Maybe?

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Speaker 3: And you know it was broadening up before we saw

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Speaker 3: this little move down in the last three weeks or so,

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Speaker 3: so maybe. But when I say optimism machine, it's sort

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Speaker 3: of like a little different take on it in the

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Speaker 3: sense that as fast as you can go from optimism

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Speaker 3: to pessimism, you can go from a great market to

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Speaker 3: significant losses, right, And so I think everyone looks at

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Speaker 3: the fundamentals and just puts so much weight on that,

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Speaker 3: and you know, over the long term that is that

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Speaker 3: does weigh heavily. But it's really all about what sent is,

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Speaker 3: what the vibe is. And you know, you could argue

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Speaker 3: that we shouldn't be as high as we are right

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Speaker 3: now and the seven stock shouldn't have let us where

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Speaker 3: we are, but it is the way it is based

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Speaker 3: on just market momentum. And you know, I think fifteen

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Speaker 3: percent year to date on the S and P is

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Speaker 3: still awesome compared to those te bills that we just

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Speaker 3: did into last week, and so that could be enough.

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Speaker 3: If we just go bring it up another couple percent

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Speaker 3: and see the market take off, it could be enough

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Speaker 3: to get us back on the road again.

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Speaker 2: The cool thing about treasuries is if you get in,

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Speaker 2: you know, at a great rate, and what are you

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Speaker 2: getting on the tee bills? Like five percent? Sure, I

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Speaker 2: guess in that sense you have reinvestment risk, but if

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Speaker 2: you go a little bit out the curve, you could

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Speaker 2: top tick the rate and so not only are you

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Speaker 2: getting a decent return, but you're gonna get capital appreciation.

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Speaker 3: Right totally, And I think there will be a day

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Speaker 3: for that. I'm not sure it's right now. Though I'm

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Speaker 3: not trying to love that trade because just you know,

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Speaker 3: if we don't hit it, don't hit it into our

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Speaker 3: session and the market normalizes, the yield curve normalizes. I mean,

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Speaker 3: I think you're still sort of where we are on

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Speaker 3: the tenure potentially.

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Speaker 2: So don't I don't know, to get into a recession.

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Speaker 2: If the FED really wants to control inflation, don't they

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Speaker 2: have to push us into a recession.

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Speaker 3: I mean that go back into the optimism machine questions

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Speaker 3: is like, so many people think maybe it's not gonna

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Speaker 3: happen now, So I mean, look, I mean it's it's

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Speaker 3: the one thing that's that's interesting is it's so hard

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Speaker 3: to make these market calls, these economic calls, because so

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Speaker 3: many times, you know, over the last ten fifteen years,

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Speaker 3: you see something seems obvious and then it goes the

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Speaker 3: other way.

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Speaker 2: But you know, the fore most optimistic words in the

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Speaker 2: English language, what are those? It's different this time?

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Speaker 3: Oh yeah, of course, no, I get that. I get that.

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Speaker 1: Yeah, all right, So what's the catalysts or catalyst plural

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Speaker 1: that would take some of that ninety percent of your

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Speaker 1: assets sets in cash now and deployed into.

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Speaker 3: This Okay, So all would take is a trend higher, right,

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Speaker 3: so good good get good in video earnings gets enough.

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Speaker 3: Maybe maybe it's not so much what good news could happen,

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Speaker 3: but whether we see receiving bad news, especially out of China,

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Speaker 3: And I mean, uh, you know, it's hard to make

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Speaker 3: the connection between all this bad news and shadow banks

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Speaker 3: and everything in China and how it could actually impact

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Speaker 3: US investors. And I think that's what we're all waiting for,

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Speaker 3: right because a credit crisis, it's all about things that

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Speaker 3: seemed like it's not going to really affect the markets broadly,

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Speaker 3: and then all of a sudden it totally does, like

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Speaker 3: financial crisis everything else like that. So I think, you know,

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Speaker 3: some good earnings, see the ten years stop going higher.

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Speaker 3: You know, we're four point thirty two. If we could

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Speaker 3: stay there, I think that could potentially be enough. Okay,

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Speaker 3: We've got bad couple of months seasonality coming up in

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Speaker 3: September and October, so maybe if.

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Speaker 1: You remember that, all right, so you know, how about

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Speaker 1: a pullback in this market? Is there a evaluation call here?

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Speaker 1: We just kind of got through the earning cycle, We

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Speaker 1: kind of got reset on earning's outlooks from a lot

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Speaker 1: of these companies is what did you take away from

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Speaker 1: the earning season we just got through.

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Speaker 3: Well, I mean, I think it's enough to keep us

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Speaker 3: going in the Bowl market, Like I don't think. I

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Speaker 3: don't think we weren't hit too hard in any particular place.

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Speaker 3: So I think it's enough to keep us going. And

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Speaker 3: you know, so I'm talking really here when I talk

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Speaker 3: about where the markets are going, it's all really basically

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Speaker 3: short term. Short term. I'm thinking about it what the

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Speaker 3: next three months six months is, because that's all people

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Speaker 3: seem to care about.

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Speaker 4: Right.

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Speaker 3: There are much bigger issues, and I think China plays

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Speaker 3: into that in terms of global debt. You've seen the

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Speaker 3: movie Interstellar where Matthew McConaughey's there on his spaceship and.

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Speaker 2: It's like eight times there's this there's what looks like.

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Speaker 3: A mountainscape in the background, and then they figure out

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Speaker 3: us a giant wave. Yes, okay, So here's the pessimistic

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Speaker 3: Felipe coming out, which is that that's still there right

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Speaker 3: in these record global debt. The presentation I've been doing

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Speaker 3: all across the country this year is the hidden implications

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Speaker 3: of global debt. And so if you want to zoom

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Speaker 3: out a bit for if you'll go there and not

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Speaker 3: care about next month. I think those are some huge implications.

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Speaker 3: And and you know China, they're they're well to GDP

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Speaker 3: is around eight eight x. So the only time we've

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Speaker 3: seen that historically is in Japan back in nineteen eighty nine,

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Speaker 3: the last time that they had a good stock market. Right,

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Speaker 3: and so that you know, you have three x in

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Speaker 3: the US. And so bringing that demand li equation back

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Speaker 3: into bounds, which means bringing wealth down and GDP up,

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Speaker 3: that can sometimes be painfulfully that.

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Speaker 2: Just and right, Yeah, it could be leaving wealth there

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Speaker 2: and bringing GDP up.

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Speaker 3: Potentially we can have a whole conversation about that because

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Speaker 3: I've got like a whole hour presentation. I can make

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Speaker 3: it into five minutes for you guys if you want so.

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Speaker 2: All right, so we don't have time now, but I

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Speaker 2: want to see that presentation the next time you're going

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Speaker 2: to give it.

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Speaker 3: Well, so I do it, just I do it in person.

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Speaker 3: You know that's happening.

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Speaker 2: Oh, I see we have to hire you to come

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Speaker 2: into the office.

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Speaker 3: Yeah, right, yeah, how that'd be awesome.

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Speaker 2: All right, thirty seconds the FED, what are they gonna

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Speaker 2: do next? Well? Next, next, Thursday. What are they gonna

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Speaker 2: do on Friday?

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Speaker 1: Sorry etentally, but I mean assom nothing there So, but.

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Speaker 3: That's what I think. I mean. There have been a

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Speaker 3: couple of times this year when I've said it totally

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Speaker 3: doesn't matter what Powell says, and he says something important

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Speaker 3: and the market's really changed, so I have to I think.

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Speaker 3: I mean, I said that the last time I was

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Speaker 3: on with you guys. So I think just just like

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Speaker 3: nothing Burger is where we are in terms of like

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Speaker 3: because we're all expecting a you know, maybe another twenty

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Speaker 3: five BIPs out of the fad. It's just not the

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Speaker 3: same Newsmaker was over the past.

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Speaker 4: World.

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Speaker 2: We're going to turn that narrative around because otherwise, why

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Speaker 2: are we saying the whole surveillance team there? Exactly in

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Speaker 2: Michael mckeasey, it's gonna be the most important FED gathering

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Speaker 2: that we've had all year long.

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Speaker 1: Whatever Fisher out there they're running, we'll call it that.

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Speaker 1: Phil Tays, thanks so much for joining us. Phil Taste

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Speaker 1: is the CEO of Tay's Asset Management.

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Speaker 6: You're listening to the Team Ken's Are Live program Bloomberg

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Speaker 6: Markets weekdays at ten am Eastern on Bloomberg dot Com,

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Speaker 6: the iHeartRadio app, and the Bloomberg Business app, or listen

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Speaker 6: on demand wherever you get your podcasts.

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Speaker 1: Claudia sam joins us here founder and independent economist at

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Speaker 1: some consulting, but she was all over the place. She

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Speaker 1: was at the Federal Reserve, Senior conmfs of Council Economic Advisors,

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Speaker 1: at the White House, on and on and on. She's

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Speaker 1: got PhDs from Michigan, not the Ohio State University, but Michigan.

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Speaker 2: She went to Dennison undergrad That's most importantly.

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Speaker 1: That's most important because I read state the great state

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Speaker 1: of Ohio.

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Speaker 2: I was there for one ill fated year ninety one,

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Speaker 2: ninety two.

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Speaker 1: Didn't work out for you? No, did they ask you

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Speaker 1: to leave, mister Miller, it might be better.

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Speaker 2: For it was.

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Speaker 1: It was, I think a mutual agreement, and it's under

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Speaker 1: sealed and we can't go there.

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Speaker 2: Uh, Claudia, I would like to talk to you about heat.

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Speaker 1: It's hot out there, and not just in the southern

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Speaker 1: and western part of the United States, but all over

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Speaker 1: the world. It seems like what does heat mean for

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Speaker 1: this economy?

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Speaker 2: Right?

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Speaker 7: So the Bloomberg opinion piece that I wrote was focusing

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Speaker 7: on heat and its effects. In particularly it's economic effects.

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Speaker 7: Like we know there's a lot of human cost to

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Speaker 7: you know, heat waves and very high temperatures, and this

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Speaker 7: instead was looking at, okay, what are the effects of

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Speaker 7: this on the economy, And these can be even if

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Speaker 7: we're not the ones in a high heat area, it

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Speaker 7: can affect us, right if the labor productivity is lower,

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Speaker 7: growth is lower, costs of a lot of these goods,

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Speaker 7: you know, agriculture goods is higher. So the effects are

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Speaker 7: broad based. And when you start to go through the

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Speaker 7: list of all the ways that high heat, rising temperatures

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Speaker 7: affect labor productivity is a really long list, and there's

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Speaker 7: a lot of variation. Whether you're thinking about geographic where

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Speaker 7: Arizona and Texas are going to bear the brunt of this,

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Speaker 7: and they certainly, and there are effects the summer, Phoenix

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Speaker 7: is the hottest city in the country, right so, and

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Speaker 7: there's also industry differences. Agriculture is hard hit, but agriculture

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Speaker 7: is not the only place that workers are exposed to

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Speaker 7: high heat. I mean, twenty percent of US workers are

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Speaker 7: exposed to high heat. So you don't have to do

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Speaker 7: too much math to figure out if these workers are

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Speaker 7: having a rough time doing their work. It's going to

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Speaker 7: show up in a measurable way and growth well.

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Speaker 2: No construction. I was talking to some construction workers in

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Speaker 2: Texas who said they can't do the work during the day.

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Speaker 2: Was last month. They couldn't do the work during the

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Speaker 2: day because it was far too hot, and then they

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Speaker 2: try to do it at night, but they have their

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Speaker 2: noise issues in residential areas. So it really is incredibly

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Speaker 2: expensive and in some cases they can't even get jobs

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Speaker 2: done because when you're laying cement, for example, it's got

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Speaker 2: to cure in a certain way and the heat doesn't

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Speaker 2: allow it. In any case. It's not the only effect

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Speaker 2: of climate change, right The storms, the massive storms that

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Speaker 2: we're seeing, the wildfires that we're seeing, also have an effect,

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Speaker 2: and that just builds up the costs on the country.

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Speaker 2: Is this just, I guess, a new normal or worsening

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Speaker 2: normal that we have to get used to.

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Speaker 7: Right, So, there's a lot of arguments about why we

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Speaker 7: have this high heat, why we had these droughts, and

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Speaker 7: regardless of whether you get into the climate change debate,

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Speaker 7: which will get you to this problem will get worse.

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Speaker 7: Like right now, we are seeing cost because as you

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Speaker 7: said there's high heat, not just in the US. Europe

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Speaker 7: has really struggled with this also, and so it is

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Speaker 7: like these costs are here right now, you know, and

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Speaker 7: to the extent like you were saying the construction workers,

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Speaker 7: we can only adapt so much, right, and then it

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Speaker 7: really starts to bite on productivity. And we see it

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Speaker 7: in a lot of places like food. I mean, we

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Speaker 7: see this already a lot of times.

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Speaker 1: And we see it like within cities. So I'm looking

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Speaker 1: at your your opinion piece. Here in Washington, DC, there's

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Speaker 1: at times a seventeen degree difference between wealthy and poor

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Speaker 1: neighborhoods in Washington, d C.

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Speaker 2: How does that come about?

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Speaker 7: Well, one of the and I mean I double check

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Speaker 7: that number several times, right, Like that's just wow, seventeen degrees,

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Speaker 7: Like that's a big difference. So what happens in a

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Speaker 7: lot of cities is you get these heat islands. Right,

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Speaker 7: So in poor areas, you don't have the trees, you

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Speaker 7: don't have you know, the grass, the wider spaces to

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Speaker 7: kind of absorb that heat. Instead, in a lot of

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Speaker 7: these lower income it's just you've got the you know, concrete,

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Speaker 7: the buildings that absorb the heat. And then push it

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Speaker 7: back out right like it's and so that can make

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Speaker 7: a big difference in terms of uh, you know, these

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Speaker 7: these heat islands can be much hotter in some places

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Speaker 7: than others. And then it's like, well, what makes a

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Speaker 7: heat island?

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Speaker 4: Right?

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Speaker 7: Is this lack of vegetation and all of this. So

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Speaker 7: that's another There are lots of ways that this high

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Speaker 7: heat creates disparities across those with less income and those

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Speaker 7: with more.

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Speaker 1: Yeah, I know, like here in a metro New York area,

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Speaker 1: whenever they put up the maps on TV of the

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Speaker 1: of the temperatures, seems like always the highest temperatures Newark,

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Speaker 1: New Jersey, you know, by like three or four degrees

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Speaker 1: relative to everybody else.

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Speaker 2: Really, what about Midtown?

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Speaker 1: No, it's Newark is oil and I don't know why,

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Speaker 1: but the poor folks there have to deal with that sometimes.

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Speaker 2: Any case, it's a great piece, and I recommend if

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Speaker 2: you have a Bloomberg terminal type op I go if

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Speaker 2: you are are on the internet, you can just go

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Speaker 2: look at Bloomberg dot com and search for Cloudia some Cloudia.

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Speaker 2: I want to get to the FED because your your

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Speaker 2: psalm role has become famous. With three month moving average

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Speaker 2: of unemployment. When it rises by half a percent relative

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Speaker 2: to the low point during the previous twelve months, that

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Speaker 2: means the economy is contracting. How does it look to

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Speaker 2: you right now? We're not in a recession, but are

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Speaker 2: we headed for that?

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Speaker 7: So the labor market is pretty strong still right consumers

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Speaker 7: are still spending. That's almost seventy percent of GDP. So

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Speaker 7: it's pretty clear that we are not in a recession

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Speaker 7: right now. I think some of the conversation in Jackson Hole,

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Speaker 7: the decisions that are made by the Fed over the

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Speaker 7: coming months, I mean that could have a real impact

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Speaker 7: on whether we go into a recession or not. The

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Speaker 7: sam rule says nothing about where we are headed. And

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Speaker 7: there's been a lot of indicators that normally are pretty

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Speaker 7: good at saying a recession is coming that are really

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Speaker 7: flashing red. I think they're too pessimistic.

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Speaker 6: But.

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Speaker 7: There, you know, not being in a recession now is

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Speaker 7: no guarantee of not being in a recession end of

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Speaker 7: year going into next year.

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Speaker 2: Well, do we have to get into a recession in

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Speaker 2: order to the Fed? For the FED to really control inflation?

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Speaker 2: Is that a necessary part of getting inflation? The inflation

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Speaker 2: genie back in the Bottle.

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Speaker 7: I firmly disagree with the idea that we need a recession,

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Speaker 7: and that messaging has been very clear from the FED officials, and.

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Speaker 2: We don't need one.

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Speaker 7: We may get one, and if we get one, we

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Speaker 7: may see inflation come down a lot, but that does

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Speaker 7: not mean that we need one or needed one if

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Speaker 7: we get to that place. This special factor this time

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Speaker 7: is we are unwinding a lot of disruptions in the

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Speaker 7: economy from COVID. I mean, that's what a lot of

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Speaker 7: the disinflation we've seen this summer is coming from. That's

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Speaker 7: really giving the FED an assist here, right. It also

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Speaker 7: makes their job harder to figure out how much they

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Speaker 7: need to do. But if the stars all line and

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Speaker 7: they could, we have the ingredients. We don't have a

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Speaker 7: contraction where it's a very mild contraction.

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Speaker 1: And that's kind of where I think a lot of

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Speaker 1: folks are because they just look at the employment environment

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Speaker 1: and we're still at our near full employment.

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Speaker 2: How do you think about the labor market? Right?

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Speaker 7: So I found it fascinating that over the past two

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Speaker 7: years the markets have kind of like a recession is coming.

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Speaker 7: It's not coming, it's coming, you know, So we move

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Speaker 7: back and forth. I've been steadying the call. I you

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Speaker 7: know this, this is very important with the recession, yep,

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Speaker 7: where we're headed. And I think you know, the FED

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Speaker 7: tells everybody their data driven, right, so I can't fault

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Speaker 7: anyone for looking obsessively at the data. And yet one

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Speaker 7: release of inflation or like this is not going to

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Speaker 7: tell us anything. And with the labor market, the tide

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Speaker 7: can turn pretty fast. Yep, right, like it again, there's

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Speaker 7: no guarantee that we stay here, but I mean, my goodness,

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Speaker 7: this has been a good labor market. Yes, workers particuarly

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Speaker 7: low income or low wage workers.

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Speaker 4: Yep.

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Speaker 1: All right, Claudia, thank you so much for joining us.

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Speaker 1: Claudia Sam, founder and independent economist at Some Consulting.

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Speaker 6: You're listening to the tape Can's our live program Bloomberg

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Speaker 6: Markets weekdays at ten am Eastern on Bloomberg Radio, the

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00:18:19,000 --> 00:18:21,080
Speaker 6: tune in app, Bloomberg dot Com.

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00:18:20,800 --> 00:18:22,240
Speaker 4: And the Bloomberg Business App.

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Speaker 6: You can also listen live on Amazon Alexa from our

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Speaker 6: flagship New York station, Just say Alexa, play Bloomberg eleven thirty.

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Speaker 1: Have miler Paul Sweeney here in the Bloomberg Interactive Brokers

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Speaker 1: Studio look at this, Matt, the bankrate dot com US

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Speaker 1: home mortgage thirty year fixed at national average seven point

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Speaker 1: five five percent from a rock star with my six

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Speaker 1: percent more.

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Speaker 2: I'm surprised it's that low because, uh, we just saw

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Speaker 2: the tenure rise to what to sorry, four thirty four,

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Speaker 2: and we've seen the mortgage rate about three points above

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Speaker 2: the tenure lately. I know that's more than the historical average.

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Speaker 2: Usually it's more like two percent above the tenure.

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Speaker 1: But let's bring in a profession with those and stuff

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Speaker 1: for a living. Lisa Knee, National leader of real estate

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Speaker 1: practice at Eisner Amper, joins us live here in our

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Speaker 1: Bloomberg Interactive Broker studio. What's the world to do with

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Speaker 1: a mortgage rate of seven point five to five percent?

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Speaker 2: I mean, Matt's got his under three. He's not doing anything.

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Speaker 8: So thank you for having me a great question of

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Speaker 8: where we're sitting when we look at historic mortgage rates.

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Speaker 8: We talked about this before. When I first bought my

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Speaker 8: house twenty years ago, this was about what my rates

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Speaker 8: were at or about the sevens. And so when we

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Speaker 8: look we have some very very artificially lower rates over

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Speaker 8: the last ten to fifteen years and so it's not

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Speaker 8: really the mortgage rates, but it's pricing and figuring out

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Speaker 8: what valuations are at. And that's really where the trick is.

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Speaker 8: What are the values We talked about supply, So because

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Speaker 8: there's such little supply out there, it's going to be

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Speaker 8: a little bit hard for people to understand and make

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Speaker 8: those financing work with those mortgage rates. So if you're

440
00:20:00,520 --> 00:20:03,280
Speaker 8: below seven and you need to sell and move, there's

441
00:20:03,320 --> 00:20:05,080
Speaker 8: really very little that you're going to go to to

442
00:20:05,080 --> 00:20:07,919
Speaker 8: pay a higher rate going forward. And that's where the

443
00:20:08,000 --> 00:20:09,960
Speaker 8: supply is really going to hurt people who are looking

444
00:20:09,960 --> 00:20:11,719
Speaker 8: to be first time homeowners.

445
00:20:11,200 --> 00:20:14,480
Speaker 2: And most everyone's below seven. I mean people have what's

446
00:20:14,520 --> 00:20:17,320
Speaker 2: the average right now? It's got to be between three

447
00:20:17,400 --> 00:20:18,040
Speaker 2: and four.

448
00:20:18,119 --> 00:20:20,480
Speaker 8: Probably, yeah, and that's going to be difficult to compel

449
00:20:20,560 --> 00:20:23,280
Speaker 8: someone to sell their home to move to get something

450
00:20:23,320 --> 00:20:24,160
Speaker 8: out of a higher rate.

451
00:20:24,600 --> 00:20:25,800
Speaker 2: So what's the rate I don't know.

452
00:20:25,840 --> 00:20:27,159
Speaker 1: I don't want to call it a break even rate,

453
00:20:27,200 --> 00:20:29,200
Speaker 1: but what's the rate where you think the market freeze

454
00:20:29,320 --> 00:20:31,879
Speaker 1: up that buyers say, oh okay, I can stomach this

455
00:20:32,080 --> 00:20:32,919
Speaker 1: great reset?

456
00:20:33,200 --> 00:20:34,080
Speaker 2: Is what we call that?

457
00:20:34,200 --> 00:20:34,359
Speaker 9: Is that?

458
00:20:34,359 --> 00:20:36,840
Speaker 2: What it is? I mean, because so many people are

459
00:20:36,840 --> 00:20:41,600
Speaker 2: holding on to their homes. They can't come to an

460
00:20:41,640 --> 00:20:44,600
Speaker 2: agreement on price, right, because if you want to buy

461
00:20:44,600 --> 00:20:46,760
Speaker 2: my home, I'll sell it to you. I have a

462
00:20:46,800 --> 00:20:48,440
Speaker 2: three percent mortgage, so I'm going to sell it to

463
00:20:48,480 --> 00:20:50,960
Speaker 2: you for a hell of a lot more than I

464
00:20:50,960 --> 00:20:53,359
Speaker 2: would normally ask. But you're not going to buy that

465
00:20:53,400 --> 00:20:56,560
Speaker 2: because you need a seven percent mortgage. So there's no movement, right,

466
00:20:56,960 --> 00:20:59,160
Speaker 2: and Bloomberg we call that the great reset here.

467
00:20:59,520 --> 00:21:01,480
Speaker 8: That's exact, right. And it's also figuring out what the

468
00:21:01,520 --> 00:21:04,080
Speaker 8: real valuation is for your house, and so you think

469
00:21:04,119 --> 00:21:06,520
Speaker 8: it's worth while and above what it should be because

470
00:21:06,520 --> 00:21:09,359
Speaker 8: it's the numbers aren't penciling out based on those mortgage rates.

471
00:21:09,640 --> 00:21:13,119
Speaker 8: So you want that cash buyer, that unicorn of the

472
00:21:13,119 --> 00:21:15,159
Speaker 8: cash buyer, and be able to have them come and

473
00:21:15,240 --> 00:21:17,760
Speaker 8: purchase your home. But again, it's you figuring out what

474
00:21:17,760 --> 00:21:19,919
Speaker 8: what you're willing to take for you to have to

475
00:21:19,960 --> 00:21:22,240
Speaker 8: pay off your mortgage and move somewhere else, knowing that

476
00:21:22,280 --> 00:21:23,120
Speaker 8: you're not getting that rate.

477
00:21:23,119 --> 00:21:23,359
Speaker 2: Again.

478
00:21:23,720 --> 00:21:26,240
Speaker 1: Yeah, well, I mean, so where are weak Statistically it's

479
00:21:26,240 --> 00:21:31,200
Speaker 1: just like an abnormally low time for lack of transactions.

480
00:21:30,960 --> 00:21:33,320
Speaker 8: The transaction market, not just in the home mortgage but

481
00:21:33,359 --> 00:21:36,200
Speaker 8: in every commercial real estate is at a standstill because

482
00:21:36,320 --> 00:21:38,800
Speaker 8: people are trying to figure out where mortgage rates are

483
00:21:38,840 --> 00:21:40,639
Speaker 8: going to be in the ten years. So you mentioned

484
00:21:40,640 --> 00:21:43,040
Speaker 8: it was four four thirty four point three, and so

485
00:21:43,160 --> 00:21:45,680
Speaker 8: figuring out how long it's going to stay there and

486
00:21:45,760 --> 00:21:48,160
Speaker 8: what those win are value is going to start coming down,

487
00:21:48,480 --> 00:21:51,240
Speaker 8: and then transactions should start picking up based on that.

488
00:21:51,440 --> 00:21:53,760
Speaker 8: But until people really understand where values are going to be,

489
00:21:53,800 --> 00:21:55,720
Speaker 8: and we're sort of at that set, it's going to

490
00:21:55,720 --> 00:21:57,840
Speaker 8: be difficult for transaction volume to pick up.

491
00:21:58,359 --> 00:22:00,639
Speaker 1: So we haven't seen. What I want is see is

492
00:22:00,760 --> 00:22:05,840
Speaker 1: one or two kind of notable transactions in New York,

493
00:22:05,880 --> 00:22:08,320
Speaker 1: for example, or San Francisco, and I want to see

494
00:22:08,359 --> 00:22:12,639
Speaker 1: if the discount is ten percent, thirty percent, fifty percent,

495
00:22:12,760 --> 00:22:15,520
Speaker 1: sixty percent. I don't know where this market is. For

496
00:22:15,640 --> 00:22:19,240
Speaker 1: some of these big markets. On the commercial real estate side,

497
00:22:19,240 --> 00:22:21,600
Speaker 1: we haven't really seen much transact have we.

498
00:22:21,640 --> 00:22:23,919
Speaker 8: The only thing we've seen is giving back to the banks,

499
00:22:23,920 --> 00:22:26,600
Speaker 8: which we know didn't make smart investment sense for people

500
00:22:26,640 --> 00:22:29,440
Speaker 8: to go, you know, work those properties back in and

501
00:22:29,600 --> 00:22:31,320
Speaker 8: things that are going to start trading soon. It's not

502
00:22:31,400 --> 00:22:34,240
Speaker 8: trading because there's no cash flow there. It's trading because

503
00:22:34,280 --> 00:22:37,159
Speaker 8: the mortgage rates aren't working to pencil out those deals,

504
00:22:37,440 --> 00:22:39,760
Speaker 8: and they just haven't happened yet because right now we're

505
00:22:39,800 --> 00:22:41,880
Speaker 8: waiting for those mortgages to be up. We talked about,

506
00:22:41,920 --> 00:22:44,040
Speaker 8: you know one of those fixes is it in eighteen

507
00:22:44,080 --> 00:22:46,080
Speaker 8: to twenty four months, and that really might be the

508
00:22:46,119 --> 00:22:47,880
Speaker 8: cycle of what we're looking for to see when those

509
00:22:47,920 --> 00:22:49,159
Speaker 8: tradings are going to start happening.

510
00:22:49,880 --> 00:22:52,680
Speaker 2: What about building homes, I mean, are are we bringing

511
00:22:52,800 --> 00:22:55,920
Speaker 2: enough supply on in that way? Since there isn't enough

512
00:22:55,920 --> 00:22:59,680
Speaker 2: supply and you know, previously owned homes.

513
00:22:59,720 --> 00:23:02,639
Speaker 8: So correct, there wasn't enough supply In two thousand and

514
00:23:02,640 --> 00:23:04,720
Speaker 8: seven and eight, we stop building homes and so now

515
00:23:04,720 --> 00:23:06,600
Speaker 8: there's a little bit more. But what they're doing is

516
00:23:06,640 --> 00:23:09,520
Speaker 8: single family rental. Because people aren't able to purchase their

517
00:23:09,520 --> 00:23:12,159
Speaker 8: own homes. You've now have these large companies who are

518
00:23:12,160 --> 00:23:15,359
Speaker 8: coming and building single asset homes or single homes, and

519
00:23:15,400 --> 00:23:17,199
Speaker 8: people are renting them with the hope that they'll be

520
00:23:17,200 --> 00:23:19,360
Speaker 8: able to buy them and build up their credit rating

521
00:23:19,400 --> 00:23:19,879
Speaker 8: in the future.

522
00:23:19,960 --> 00:23:22,040
Speaker 2: But by the way, find else there are a lot

523
00:23:22,040 --> 00:23:24,400
Speaker 2: of people who will say I don't want to buy

524
00:23:24,400 --> 00:23:26,360
Speaker 2: a home. In fact, the cost of ownership I think

525
00:23:26,400 --> 00:23:30,119
Speaker 2: is higher than most people realize taxes. A lot of

526
00:23:30,119 --> 00:23:34,680
Speaker 2: times rental is taxes. Tell me about it. In Westchester,

527
00:23:35,240 --> 00:23:38,320
Speaker 2: there are a lot of people who who say, look,

528
00:23:38,359 --> 00:23:41,920
Speaker 2: I'd rather rent a home, and it's actually a better

529
00:23:42,040 --> 00:23:45,720
Speaker 2: financial decision. I can invest my money elsewhere and I'm

530
00:23:45,760 --> 00:23:46,280
Speaker 2: better off.

531
00:23:46,600 --> 00:23:49,440
Speaker 8: And when you think about the generation now that's looking

532
00:23:49,480 --> 00:23:51,600
Speaker 8: to buy homes, they're not looking at long term thinkers.

533
00:23:51,600 --> 00:23:53,399
Speaker 8: They're in the one to two year range, and so

534
00:23:53,480 --> 00:23:55,080
Speaker 8: for them to purchase a home that they're going to

535
00:23:55,080 --> 00:23:56,439
Speaker 8: be in there for thirty years when we did our

536
00:23:56,480 --> 00:23:58,880
Speaker 8: thirty year mortgages, they're not looking at that. They're looking

537
00:23:58,880 --> 00:24:00,320
Speaker 8: for the one to two years where they going to

538
00:24:00,400 --> 00:24:03,000
Speaker 8: live and not really want to commit to something for

539
00:24:03,040 --> 00:24:05,760
Speaker 8: that long term purchase. And that's why that short the

540
00:24:06,200 --> 00:24:08,720
Speaker 8: single family rental market is so hot right now.

541
00:24:09,080 --> 00:24:09,639
Speaker 2: How much of the.

542
00:24:09,760 --> 00:24:11,600
Speaker 1: Problem is it going to be for on the commercial

543
00:24:11,600 --> 00:24:13,760
Speaker 1: real estate side when work just come due? I mean,

544
00:24:14,000 --> 00:24:18,040
Speaker 1: because we've seen people like Brookfield, I mean like major

545
00:24:18,119 --> 00:24:20,840
Speaker 1: institutional real estate people turn the keys over. I mean,

546
00:24:20,880 --> 00:24:23,680
Speaker 1: this isn't some mom and pop developer I mean or owner.

547
00:24:23,720 --> 00:24:26,480
Speaker 1: These are major global real estate players that are saying

548
00:24:26,480 --> 00:24:27,360
Speaker 1: I just can't make it work.

549
00:24:27,600 --> 00:24:29,880
Speaker 8: So what they're bringing. Why they're turning their keys over

550
00:24:29,920 --> 00:24:32,840
Speaker 8: is they're making sound business decisions of saying I can't

551
00:24:33,160 --> 00:24:35,040
Speaker 8: have my investors they have the cash to do it.

552
00:24:35,200 --> 00:24:37,760
Speaker 8: They don't want their investors to invest back in to

553
00:24:37,800 --> 00:24:40,240
Speaker 8: make those properties work, knowing that those have to be

554
00:24:40,320 --> 00:24:41,880
Speaker 8: reset at a lower price.

555
00:24:41,920 --> 00:24:45,000
Speaker 2: A reputational risk there. I mean, I can't your failure.

556
00:24:45,000 --> 00:24:47,399
Speaker 1: You just turned over the trophy Trophy property in San

557
00:24:47,440 --> 00:24:49,960
Speaker 1: Francisco to the banks. Now it's the bank's problem.

558
00:24:50,080 --> 00:24:52,720
Speaker 8: So they're making sound investment decisions of saying I can't, I.

559
00:24:52,640 --> 00:24:54,480
Speaker 2: Can't the bank. It's not sound to me.

560
00:24:54,840 --> 00:24:57,760
Speaker 8: Well, so when I I mean, that's a fair point.

561
00:24:57,800 --> 00:24:59,120
Speaker 8: But the banks are going to sit there and they're

562
00:24:59,119 --> 00:25:00,879
Speaker 8: going to make so that they work that out, and

563
00:25:01,200 --> 00:25:03,720
Speaker 8: they're going to all make sure that those properties get

564
00:25:03,760 --> 00:25:06,760
Speaker 8: repositioned in a smarter way, probably at a price that

565
00:25:06,840 --> 00:25:09,320
Speaker 8: makes sense for that new developer to come in and

566
00:25:09,359 --> 00:25:12,880
Speaker 8: reposition that property. So it is a sound investment decision

567
00:25:13,000 --> 00:25:14,879
Speaker 8: if you're an investor from a Brookfield point of me.

568
00:25:15,000 --> 00:25:17,240
Speaker 1: It's going to take years, isn't it for this commercial

569
00:25:17,240 --> 00:25:19,120
Speaker 1: real estate market to sort itself out?

570
00:25:19,119 --> 00:25:20,440
Speaker 8: We at least need to see what's going to happen

571
00:25:20,440 --> 00:25:22,399
Speaker 8: in the next eighteen to twenty four months. And when

572
00:25:22,440 --> 00:25:24,879
Speaker 8: you talk about costs, the biggest cost people are complaining

573
00:25:24,880 --> 00:25:28,240
Speaker 8: about besides interest rates is insurance, and that insurance market

574
00:25:28,280 --> 00:25:31,600
Speaker 8: is really putting a strain on the pricing that's been

575
00:25:31,680 --> 00:25:34,080
Speaker 8: coming up for people to make sure that they can

576
00:25:34,119 --> 00:25:36,280
Speaker 8: make those deals work and pencil out. The percentage of

577
00:25:36,320 --> 00:25:39,560
Speaker 8: insurance going up year over year, it's been astronomical from

578
00:25:39,560 --> 00:25:40,200
Speaker 8: what we're hearing.

579
00:25:40,480 --> 00:25:44,000
Speaker 1: You know, people make a lot of money in real estate, commercial, residential,

580
00:25:44,080 --> 00:25:46,239
Speaker 1: but man, when it's bad, when it tied turns, it

581
00:25:46,320 --> 00:25:50,000
Speaker 1: is tough out there because everything conspires against you. Yeah, Lisa, NEI,

582
00:25:50,080 --> 00:25:51,760
Speaker 1: thank you so much for joining us. Lisa is the

583
00:25:51,880 --> 00:25:55,080
Speaker 1: partner and national tax leader for real estate practice at

584
00:25:55,080 --> 00:25:56,919
Speaker 1: Eisner Advisory Group.

585
00:25:56,960 --> 00:25:59,200
Speaker 2: And change your name, okay, Eisner Advisory Group.

586
00:25:59,240 --> 00:26:01,400
Speaker 1: Good stuff, all right, So, but you're sitting on your

587
00:26:01,400 --> 00:26:03,200
Speaker 1: three percent mortgage you don't have a care in the world.

588
00:26:03,600 --> 00:26:06,080
Speaker 2: Well, also, I can't move. I mean I have a

589
00:26:06,080 --> 00:26:08,480
Speaker 2: two year old and one on the way and a

590
00:26:08,480 --> 00:26:11,520
Speaker 2: wife that would kill me if I even suggested it.

591
00:26:12,720 --> 00:26:16,560
Speaker 6: You're listening to the Team Cancer Live program Bloomberg Markets

592
00:26:16,600 --> 00:26:19,680
Speaker 6: weekdays at ten am Eastern on Bloomberg dot Com, the

593
00:26:19,760 --> 00:26:22,919
Speaker 6: iHeartRadio app and the Bloomberg Business app, or listen on

594
00:26:22,960 --> 00:26:25,600
Speaker 6: demand wherever you get your podcasts.

595
00:26:26,960 --> 00:26:29,840
Speaker 2: Now. SRI has darkened the door of the Bloomberg Interactive

596
00:26:29,840 --> 00:26:33,600
Speaker 2: Broker studio. Let's find out what's going on here, Sree.

597
00:26:33,720 --> 00:26:36,920
Speaker 2: It's not a huge unit, right, it's not a huge unit.

598
00:26:36,960 --> 00:26:39,359
Speaker 10: But this is again one of those strategic missteps that

599
00:26:39,359 --> 00:26:43,439
Speaker 10: people keep talking about ultimately, because you're talking about a

600
00:26:43,480 --> 00:26:46,280
Speaker 10: business that was part of the score Goldman effort to

601
00:26:46,359 --> 00:26:50,080
Speaker 10: get beyond its core base of ultra high network clients

602
00:26:50,119 --> 00:26:53,080
Speaker 10: go after the mass affluent market. How they did that

603
00:26:53,160 --> 00:26:56,840
Speaker 10: one is obviously through that ill fated consumer banking push,

604
00:26:56,880 --> 00:26:59,840
Speaker 10: which has completely been you know, they're attempting to wipe

605
00:26:59,840 --> 00:27:01,600
Speaker 10: it off the face of the earth now. But at

606
00:27:01,600 --> 00:27:04,199
Speaker 10: the same time, even in its wealth management business, they

607
00:27:04,280 --> 00:27:07,560
Speaker 10: wanted to go beyond their high network base because that's

608
00:27:07,600 --> 00:27:10,679
Speaker 10: a pace where Goldman's really good. They then wanted to

609
00:27:10,720 --> 00:27:13,320
Speaker 10: go out there with this United Capital purchase to reach

610
00:27:13,440 --> 00:27:17,040
Speaker 10: the market where your average customer balance size might be

611
00:27:17,359 --> 00:27:19,480
Speaker 10: one million, one and a half million, nothing like the

612
00:27:19,480 --> 00:27:21,760
Speaker 10: twenty five thirty million dollar customers you normally deal with.

613
00:27:21,920 --> 00:27:24,080
Speaker 10: But it was a signal that Goldman was going beyond

614
00:27:24,119 --> 00:27:28,360
Speaker 10: its roots. Undoing that deal four years after it's done

615
00:27:28,400 --> 00:27:30,439
Speaker 10: is a clear admission that that didn't work out and

616
00:27:30,480 --> 00:27:33,800
Speaker 10: it wants to refocus his energies to places where it's

617
00:27:33,960 --> 00:27:37,800
Speaker 10: really good at. So again, another circuitous path to get

618
00:27:37,840 --> 00:27:40,960
Speaker 10: to the place where they're already standing four years ago.

619
00:27:41,320 --> 00:27:44,800
Speaker 1: I've been a key admirer and competitor to Goldman Sacks

620
00:27:44,840 --> 00:27:47,960
Speaker 1: for forty years, so to me, the only story I

621
00:27:48,000 --> 00:27:51,240
Speaker 1: care about now is just David Solomon, the infighting, the

622
00:27:51,320 --> 00:27:55,600
Speaker 1: partners or whatever's left of that partnership. What's it like

623
00:27:55,720 --> 00:27:58,440
Speaker 1: in the hallways and the executive suite of Goldman Sacks

624
00:27:58,440 --> 00:28:01,440
Speaker 1: these days, do you think? Or the Hampton's got forbid

625
00:28:01,440 --> 00:28:02,280
Speaker 1: there in the office.

626
00:28:03,000 --> 00:28:05,720
Speaker 10: It's funny, and I'm glad you mentioned Hamptons because just

627
00:28:05,800 --> 00:28:08,680
Speaker 10: last week there was an event where Gary Cohne was

628
00:28:08,720 --> 00:28:11,760
Speaker 10: there and the founder of BTIG was hosting it, and

629
00:28:11,800 --> 00:28:13,000
Speaker 10: he starts, ou nobody.

630
00:28:12,720 --> 00:28:15,879
Speaker 2: Was wearing socks apparently, Oh that's right, down, no socks.

631
00:28:15,880 --> 00:28:17,080
Speaker 10: They were all Hampton's shakes.

632
00:28:17,080 --> 00:28:20,560
Speaker 2: So yes, madam, right, no socks on Larry Summers.

633
00:28:20,760 --> 00:28:24,679
Speaker 10: But here's the thing. The host, the BTIG founders started

634
00:28:24,720 --> 00:28:26,560
Speaker 10: off by cracking a joke saying, hey, if you see

635
00:28:26,600 --> 00:28:28,680
Speaker 10: Gary Cone leave, that's because he's been called back in

636
00:28:28,720 --> 00:28:30,880
Speaker 10: to be a candidate to be seof. They're all openly

637
00:28:30,960 --> 00:28:33,919
Speaker 10: joking about it. So the atmosphere inside Goldman sex is

638
00:28:33,920 --> 00:28:36,360
Speaker 10: obviously not great. But I will say that a lot

639
00:28:36,359 --> 00:28:38,480
Speaker 10: of the criticism has been brushed away, like, oh, it's

640
00:28:38,520 --> 00:28:41,280
Speaker 10: just personality issues. People are not happy with the hard

641
00:28:41,360 --> 00:28:46,240
Speaker 10: charging boss. But there are also some genuine operational mess ups.

642
00:28:46,280 --> 00:28:48,320
Speaker 10: The economists had a very good story over the weekend.

643
00:28:48,600 --> 00:28:52,920
Speaker 10: It is not like Goldman performance has been dreadful, absolutely not.

644
00:28:53,080 --> 00:28:54,800
Speaker 10: That's not why the stock would be up fifty percent

645
00:28:54,840 --> 00:28:57,600
Speaker 10: over five years. At the same time, it's not been great.

646
00:28:58,000 --> 00:28:59,840
Speaker 2: It has been patchy, and patchy.

647
00:28:59,600 --> 00:29:02,200
Speaker 10: Is just the right word. You've had successes in places

648
00:29:02,240 --> 00:29:06,200
Speaker 10: where you're really good I investment banking and trading everything else.

649
00:29:06,640 --> 00:29:09,600
Speaker 10: You fumbled with the leadership and asset management. There By

650
00:29:09,600 --> 00:29:12,000
Speaker 10: my last calculation, I think they had like seven different

651
00:29:12,040 --> 00:29:15,800
Speaker 10: iterations of leadership in that asset management business. We've talked

652
00:29:15,800 --> 00:29:20,160
Speaker 10: at length about all their problems with Marcus, so clearly

653
00:29:20,200 --> 00:29:22,960
Speaker 10: on the operational side they've had some challenges and that

654
00:29:23,120 --> 00:29:26,280
Speaker 10: contributes to the air of discontent inside Goldman Sachs.

655
00:29:26,480 --> 00:29:28,720
Speaker 2: They don't have too many problems with Marcus from my

656
00:29:28,800 --> 00:29:30,480
Speaker 2: point of view, because I get four and a half

657
00:29:30,480 --> 00:29:32,480
Speaker 2: percent thanks that account.

658
00:29:32,800 --> 00:29:34,120
Speaker 1: But all right, one of the things I want to

659
00:29:34,120 --> 00:29:36,760
Speaker 1: ask is what's the role of Lloyd blank find I

660
00:29:36,800 --> 00:29:42,040
Speaker 1: always think about the past chairman's of CEO or CEOs

661
00:29:42,080 --> 00:29:45,160
Speaker 1: of Goldman Sachs and what role they play, given that

662
00:29:45,200 --> 00:29:47,520
Speaker 1: it was a partnership for so long, given that that

663
00:29:47,560 --> 00:29:52,320
Speaker 1: partnership mentality, the clicks of partners still exists there, what

664
00:29:52,400 --> 00:29:53,880
Speaker 1: role does he play these days or.

665
00:29:53,760 --> 00:29:54,880
Speaker 2: Is he kind of in a background.

666
00:29:55,760 --> 00:29:58,120
Speaker 10: It's interesting you mentioned Lloyd because all of the reporting

667
00:29:58,120 --> 00:30:00,239
Speaker 10: around him in recent months has been how he been

668
00:30:00,240 --> 00:30:03,240
Speaker 10: a little more open and has been griping about David

669
00:30:03,280 --> 00:30:06,800
Speaker 10: Solomon's performance. But in reality, I don't think what Lloyd

670
00:30:06,880 --> 00:30:09,360
Speaker 10: is saying really holds a lot of weight with current

671
00:30:09,440 --> 00:30:12,120
Speaker 10: management or for that matter, the board. But he is

672
00:30:12,680 --> 00:30:15,600
Speaker 10: if the griping is indeed true, he is he is

673
00:30:15,720 --> 00:30:20,600
Speaker 10: expressing a sentiment that's been echoed everywhere inside Goldman Sacks.

674
00:30:20,640 --> 00:30:23,040
Speaker 10: People who interact with Goldman Sax they're all talking about

675
00:30:23,080 --> 00:30:25,239
Speaker 10: the same topic. Even when they meet some of their

676
00:30:25,240 --> 00:30:28,320
Speaker 10: biggest clients. Those clients tell us that, you know, they

677
00:30:28,360 --> 00:30:30,440
Speaker 10: start their meeting, or at least half their meeting ends

678
00:30:30,520 --> 00:30:33,000
Speaker 10: up being a little bit about the palace entry inside

679
00:30:33,040 --> 00:30:36,360
Speaker 10: Goldman Sacks rather than the business' hand and that's obviously

680
00:30:36,440 --> 00:30:38,240
Speaker 10: a challenge that need to solve. For that, they need

681
00:30:38,280 --> 00:30:39,800
Speaker 10: to make that noise go down.

682
00:30:40,000 --> 00:30:42,920
Speaker 1: It's interesting because I do look at the MGMT function

683
00:30:42,920 --> 00:30:44,880
Speaker 1: on the Bloomberg terminal for Goldman Sachs, and it just

684
00:30:45,200 --> 00:30:47,440
Speaker 1: wasn't aware of is that David Solomon is not only

685
00:30:47,520 --> 00:30:50,040
Speaker 1: the CEO, he is also chairman of the board. So

686
00:30:50,080 --> 00:30:53,840
Speaker 1: he has a strong governmental I mean a strong position

687
00:30:53,920 --> 00:30:54,920
Speaker 1: structurally in the company.

688
00:30:55,120 --> 00:30:57,360
Speaker 10: Absolutely, and that's how a lot of American bank boards

689
00:30:57,400 --> 00:31:01,120
Speaker 10: are structured. It's very different in Europe. The chairman typically

690
00:31:01,200 --> 00:31:03,719
Speaker 10: does not tend to be the CEO. In the US,

691
00:31:04,280 --> 00:31:06,280
Speaker 10: that often is the case. Look at JP Morgan, look

692
00:31:06,280 --> 00:31:08,640
Speaker 10: at Morgensane, look at Goldman Sachs. But I think the

693
00:31:08,680 --> 00:31:11,040
Speaker 10: direction of travel and in the coming years you will

694
00:31:11,080 --> 00:31:13,360
Speaker 10: increasingly see a split in those roles as well.

695
00:31:14,360 --> 00:31:15,400
Speaker 2: Again, I'm looking at this board.

696
00:31:15,400 --> 00:31:18,440
Speaker 1: The lead directors Bio ungle Lesi, who I do know

697
00:31:18,480 --> 00:31:20,959
Speaker 1: because you're from the Credit Swiss first Boston days. I mean,

698
00:31:21,000 --> 00:31:24,120
Speaker 1: he's a longtime global banker with a lot of heft

699
00:31:24,160 --> 00:31:25,400
Speaker 1: as well, so you used.

700
00:31:25,240 --> 00:31:28,000
Speaker 10: To run the investment bank Credit Squeze has a lot

701
00:31:28,040 --> 00:31:30,440
Speaker 10: of great credentials in the finance community. Do has done

702
00:31:30,480 --> 00:31:34,480
Speaker 10: really well with GIP Global Infrastructure Partners. And interestingly he's

703
00:31:34,480 --> 00:31:37,600
Speaker 10: been the chairman even before David Solomon arrived in the CEOC.

704
00:31:37,840 --> 00:31:41,959
Speaker 10: That is when sorry, not the chairman, the lead independent director.

705
00:31:42,040 --> 00:31:45,480
Speaker 10: So when Lloyd was there, Bio was the lead independent

706
00:31:45,520 --> 00:31:48,960
Speaker 10: director and has has held on to that role under David.

707
00:31:49,080 --> 00:31:52,480
Speaker 10: So in some ways, one of the more powerful but

708
00:31:52,720 --> 00:31:56,760
Speaker 10: underappreciated roles in finance right now is the lead independent

709
00:31:56,800 --> 00:31:58,640
Speaker 10: director at Goldman sachs At.

710
00:31:59,040 --> 00:32:01,280
Speaker 2: In a time of tumult, there's so much news in

711
00:32:01,880 --> 00:32:04,000
Speaker 2: there's so much kind of m and a news in

712
00:32:04,320 --> 00:32:08,120
Speaker 2: finance this morning, right because you've your Goldman story, You've

713
00:32:08,120 --> 00:32:12,680
Speaker 2: got the City Institutional Client Group split. I'm gonna watch

714
00:32:12,800 --> 00:32:15,400
Speaker 2: that boy. Tyler Dixon is one of the top guys.

715
00:32:15,480 --> 00:32:19,360
Speaker 2: You've got what kind of looks like a bidding war

716
00:32:19,440 --> 00:32:24,400
Speaker 2: over Sculptor if it'll be allowed, because it seems like

717
00:32:25,040 --> 00:32:27,720
Speaker 2: the game is rigged there to keep the current management

718
00:32:27,800 --> 00:32:28,280
Speaker 2: in place.

719
00:32:28,480 --> 00:32:31,520
Speaker 10: This Sculpture thing is just endlessly fascinating. You know, when

720
00:32:31,560 --> 00:32:33,920
Speaker 10: you heard about the guys who were looking to buy them,

721
00:32:33,920 --> 00:32:37,000
Speaker 10: clearly I believe fine and we knew Sculptor had been

722
00:32:37,040 --> 00:32:41,600
Speaker 10: pushed the Sculptor Capital Management, right and previously more famous

723
00:32:41,600 --> 00:32:42,200
Speaker 10: as OXI.

724
00:32:42,480 --> 00:32:48,680
Speaker 2: Yeah, okay, alternative manager, right, the classical hedge fund. Right.

725
00:32:48,720 --> 00:32:50,960
Speaker 10: But and we saw, okay, find they had a deal.

726
00:32:51,040 --> 00:32:54,080
Speaker 10: And normally that's the kind of roll ups we've been seeing.

727
00:32:54,240 --> 00:32:56,240
Speaker 10: But the fact that you have this all star line

728
00:32:56,280 --> 00:33:00,680
Speaker 10: of boys Weinstein, Mark Lasry, Bill Lackman contemplating accounter bitter

729
00:33:00,720 --> 00:33:05,080
Speaker 10: or putting forth account bit, it's so interesting. Obviously Sculptor

730
00:33:05,160 --> 00:33:08,440
Speaker 10: is not taking the bite just yet. We will see

731
00:33:08,600 --> 00:33:11,440
Speaker 10: how that unfolds. But yeah, it's it's it's interesting to

732
00:33:11,480 --> 00:33:14,040
Speaker 10: see this bidding war on that ox IF now known.

733
00:33:13,880 --> 00:33:16,200
Speaker 1: As the Suction, that that community so tight knit, the

734
00:33:16,280 --> 00:33:18,920
Speaker 1: hitch mean hedge fund community wouldn't see something in the public.

735
00:33:18,920 --> 00:33:20,720
Speaker 1: But it's at a fifty two week high today, it's

736
00:33:20,720 --> 00:33:24,520
Speaker 1: a three point six percent. Sculptor is SCU is the ticker,

737
00:33:25,120 --> 00:33:27,480
Speaker 1: and it's got a market cap of a seven or

738
00:33:27,600 --> 00:33:28,120
Speaker 1: twenty five.

739
00:33:28,240 --> 00:33:32,680
Speaker 10: And the backstory is important, right, Uh, fascinating Oxif became

740
00:33:32,760 --> 00:33:36,640
Speaker 10: Sculptor after having gone through a pretty bruising battle and

741
00:33:36,720 --> 00:33:40,000
Speaker 10: some investigations over a bribery scandal, and of course there

742
00:33:40,080 --> 00:33:43,800
Speaker 10: was the whole leadership fight between Jimmy Levin and Dan Och,

743
00:33:43,920 --> 00:33:46,280
Speaker 10: who's who no longer doesn't have an act, doesn't have

744
00:33:46,320 --> 00:33:49,480
Speaker 10: an active role, but clearly still a big shareholder, and

745
00:33:49,520 --> 00:33:51,960
Speaker 10: they became Sculptor. And I'm telling you, the only thing

746
00:33:52,000 --> 00:33:54,400
Speaker 10: that will be better than this lineup of alternate bidders

747
00:33:54,400 --> 00:33:56,800
Speaker 10: that we've heard of is suddenly Bill Ackman and Carl

748
00:33:57,040 --> 00:33:59,880
Speaker 10: Icon decide to join forces a bit for Sculture.

749
00:33:59,560 --> 00:34:02,720
Speaker 2: Joint Force or fight over and plus you have, We'll

750
00:34:02,760 --> 00:34:05,080
Speaker 2: take either of those off. Dan ox saga, right, because

751
00:34:05,120 --> 00:34:07,600
Speaker 2: this is a guy who like builds himself up and

752
00:34:07,640 --> 00:34:11,840
Speaker 2: then destroys himself over and over again. You know, he's like,

753
00:34:12,040 --> 00:34:14,359
Speaker 2: how how big can I build this? And then he's like,

754
00:34:14,360 --> 00:34:16,720
Speaker 2: how can I ruin it in a dramatic fashion?

755
00:34:17,200 --> 00:34:20,719
Speaker 10: And talk about Ballastandrick Jimmy Levin was the chosen one.

756
00:34:20,840 --> 00:34:22,920
Speaker 10: He was dan OG's guy. He was the one who

757
00:34:23,000 --> 00:34:25,520
Speaker 10: was supposedly going to be the one running the place.

758
00:34:25,560 --> 00:34:28,520
Speaker 10: And you know dan was completely behind him, and then

759
00:34:28,560 --> 00:34:30,920
Speaker 10: this breaks out and this all out war between the

760
00:34:30,920 --> 00:34:31,399
Speaker 10: two of them.

761
00:34:31,840 --> 00:34:33,759
Speaker 1: All right, so we'll pay attention to that. Like seeing

762
00:34:33,800 --> 00:34:36,879
Speaker 1: the hedge fund guys battle each other again. Another kind

763
00:34:36,880 --> 00:34:41,399
Speaker 1: of like billionaire story, billionaires acting oddly silly kind of.

764
00:34:41,320 --> 00:34:46,560
Speaker 2: Stuff, fighting about a crab shack, some eighteen property or

765
00:34:47,200 --> 00:34:51,200
Speaker 2: you know, someone's modern art statue that's an iesore.

766
00:34:51,640 --> 00:34:52,279
Speaker 4: Right, what did?

767
00:34:52,400 --> 00:34:56,239
Speaker 2: What did? Did? Bill Gross reportedly he like played the

768
00:34:56,239 --> 00:34:59,200
Speaker 2: Gilligan's Island theme song over and over again as.

769
00:34:59,160 --> 00:35:02,200
Speaker 10: Loud as he Yeah, how could we forget that one?

770
00:35:02,680 --> 00:35:04,800
Speaker 2: I love billionaires behaving badly.

771
00:35:05,400 --> 00:35:08,200
Speaker 1: Shrinata Roger, thanks so much for joining us. Wall Street

772
00:35:08,239 --> 00:35:11,839
Speaker 1: reporter Goldman Sachs, reporter for Bloomberg News. Joining us live

773
00:35:11,840 --> 00:35:14,360
Speaker 1: here in our Bloomberg Interactive Brokers studio.

774
00:35:14,680 --> 00:35:17,799
Speaker 6: You're listening to the tape Cat's are Live program Bloomberg

775
00:35:17,840 --> 00:35:21,440
Speaker 6: Markets weekdays at ten am Eastern on Bloomberg Radio, the

776
00:35:21,520 --> 00:35:23,480
Speaker 6: tune in app, Bloomberg dot Com, and.

777
00:35:23,440 --> 00:35:24,719
Speaker 4: The Bloomberg Business App.

778
00:35:24,760 --> 00:35:27,600
Speaker 6: You can also listen live on Amazon Alexa from our

779
00:35:27,600 --> 00:35:33,560
Speaker 6: flagship New York station, Just Say Alexa, playing Bloomberg eleven thirty.

780
00:35:32,840 --> 00:35:35,360
Speaker 1: Matt Miller, Paul Sweeney live here in a Bloomberg Interactive

781
00:35:35,360 --> 00:35:39,279
Speaker 1: Brokers studio. We are streaming live on YouTube thankfully because

782
00:35:39,280 --> 00:35:42,440
Speaker 1: in our viewers get to see Dan ives in person. Dan,

783
00:35:42,480 --> 00:35:46,600
Speaker 1: I've senior analyst at Wedbush Securities, you know and your.

784
00:35:46,520 --> 00:35:47,640
Speaker 2: Self site analysts, Matt.

785
00:35:47,680 --> 00:35:49,640
Speaker 1: One of the challenges is kind of standing out from

786
00:35:49,680 --> 00:35:52,480
Speaker 1: the crowd, making some calls that really stand out. This

787
00:35:52,560 --> 00:35:54,840
Speaker 1: call stands out, and this is a call I fully

788
00:35:55,080 --> 00:35:55,760
Speaker 1: fully endorse.

789
00:35:55,840 --> 00:35:57,280
Speaker 2: I've been calling for a long time.

790
00:35:57,400 --> 00:36:00,560
Speaker 1: I get ignored the whole way Apple should end deal

791
00:36:00,640 --> 00:36:04,319
Speaker 1: drought by buying Espn. This analyst said that Dan I

792
00:36:04,360 --> 00:36:06,520
Speaker 1: was managing director senior analyst Wedbus Security.

793
00:36:06,560 --> 00:36:08,359
Speaker 2: So Dan, I kind of agree with you here.

794
00:36:08,719 --> 00:36:12,200
Speaker 1: What's your rationale behind your call saying Apple, which is

795
00:36:12,200 --> 00:36:14,640
Speaker 1: a company you follow and have filed for a long time,

796
00:36:14,680 --> 00:36:17,680
Speaker 1: should buy Espn, which may be up for sale.

797
00:36:17,719 --> 00:36:20,560
Speaker 11: And I think, look eighteen months ago, this isn't even

798
00:36:20,600 --> 00:36:23,080
Speaker 11: a discussion. But I think if you look what's happened

799
00:36:23,080 --> 00:36:26,600
Speaker 11: with Eiger and Disney with a strategic process, I think

800
00:36:26,640 --> 00:36:29,319
Speaker 11: now Espn, in my opinion, it's a matter of when

801
00:36:29,360 --> 00:36:32,400
Speaker 11: not if the ultimately Apple is going to look to

802
00:36:32,600 --> 00:36:35,560
Speaker 11: at a minimum do a distribution deal, and we believe

803
00:36:35,600 --> 00:36:39,760
Speaker 11: potentially acquire ESPN because you look at what Apple needs,

804
00:36:39,760 --> 00:36:42,879
Speaker 11: they need live sports content. I think MLS in terms

805
00:36:42,880 --> 00:36:45,719
Speaker 11: of the messy situation, that's really what the appetite. I

806
00:36:45,760 --> 00:36:49,040
Speaker 11: think they've now recognized and you see the subscriber growth

807
00:36:49,080 --> 00:36:52,399
Speaker 11: that's been massive. That's what's going to bring them onto

808
00:36:52,480 --> 00:36:56,239
Speaker 11: the platform. PAC twelve clearly came and gone, and then

809
00:36:56,239 --> 00:36:57,719
Speaker 11: that was something that they were trying to get and

810
00:36:57,760 --> 00:37:00,760
Speaker 11: that deal fell apart. But when it comes to I've Sports,

811
00:37:01,080 --> 00:37:04,279
Speaker 11: it's the golden goose. So we ultimately believe that in

812
00:37:04,360 --> 00:37:07,560
Speaker 11: the next called six nine months, you know, Apple finally

813
00:37:07,640 --> 00:37:10,600
Speaker 11: can end this deal drought obviously not m and A

814
00:37:11,640 --> 00:37:14,000
Speaker 11: that that's in the typical DNA of Cupatina, and I

815
00:37:14,000 --> 00:37:15,520
Speaker 11: think ESPN ends up in Apple.

816
00:37:15,920 --> 00:37:19,520
Speaker 2: Why stop at ESPN? Why not just buy Disney? They

817
00:37:19,520 --> 00:37:24,720
Speaker 2: have more money in cash than Disney has in market

818
00:37:24,719 --> 00:37:25,959
Speaker 2: cap total market cap.

819
00:37:26,200 --> 00:37:28,200
Speaker 11: Yeah, and I know, I mean others talked about like

820
00:37:28,280 --> 00:37:32,279
Speaker 11: ware and others about them buying Disney Marr Martin from

821
00:37:32,360 --> 00:37:36,480
Speaker 11: datam I don't personally see that, just because when it

822
00:37:36,520 --> 00:37:38,799
Speaker 11: comes to parks and it comes to the rest of

823
00:37:38,840 --> 00:37:42,600
Speaker 11: the Disney operations, that wouldn't necessarily be within the strategic

824
00:37:42,719 --> 00:37:46,720
Speaker 11: DNA of Cupatina. When you look at ESPN as an asset,

825
00:37:46,800 --> 00:37:49,239
Speaker 11: that's something that fits like a glove in terms of

826
00:37:49,480 --> 00:37:52,920
Speaker 11: in the broader strategy. So I think Disney itself I

827
00:37:53,320 --> 00:37:56,280
Speaker 11: put a very low likelihood, But when it comes to ESPN,

828
00:37:56,360 --> 00:38:00,320
Speaker 11: I think high likelihood that something happens here. Look, Iger

829
00:38:00,800 --> 00:38:03,799
Speaker 11: and Cook or you know know each other extremely well.

830
00:38:03,840 --> 00:38:07,160
Speaker 11: These are two companies that have interoperated you know, extremely well,

831
00:38:07,520 --> 00:38:09,799
Speaker 11: and it's something when it comes to ESPN, this is

832
00:38:09,840 --> 00:38:12,799
Speaker 11: something to me Peanut Butter and jeil can I.

833
00:38:12,800 --> 00:38:17,319
Speaker 2: Just what about the anti trust issues? Because regulators don't

834
00:38:17,360 --> 00:38:20,040
Speaker 2: even want to allow Apple to control what it does

835
00:38:20,080 --> 00:38:24,680
Speaker 2: with its own store that it invented for its own phones.

836
00:38:25,200 --> 00:38:27,320
Speaker 2: Like they're not even allowed to run their own business

837
00:38:27,320 --> 00:38:28,840
Speaker 2: in a free country, why would they be allowed to

838
00:38:28,880 --> 00:38:29,520
Speaker 2: buy Espn?

839
00:38:29,600 --> 00:38:32,160
Speaker 11: Look, every week there's just another black eye for con

840
00:38:32,200 --> 00:38:34,520
Speaker 11: and the FTC. So it just comes down that I

841
00:38:34,560 --> 00:38:37,839
Speaker 11: think big tech recognizes more and more starting to get

842
00:38:37,840 --> 00:38:39,760
Speaker 11: their oats. In other words, I feel like it's getting

843
00:38:39,800 --> 00:38:43,360
Speaker 11: to a point where you're now starting to see I

844
00:38:43,400 --> 00:38:46,000
Speaker 11: think more and more of a potential opportunity for M

845
00:38:46,040 --> 00:38:48,719
Speaker 11: and a When you look at Microsoft Activision, you look

846
00:38:48,800 --> 00:38:52,040
Speaker 11: with the constant battles that the FTC has lost. I

847
00:38:52,040 --> 00:38:54,480
Speaker 11: don't think that something necessarily makes them nervous. I'm not

848
00:38:54,520 --> 00:38:56,560
Speaker 11: saying that this is going to be easy to get through.

849
00:38:57,040 --> 00:38:59,879
Speaker 11: But when it comes to Apple, that install based within

850
00:39:00,160 --> 00:39:03,600
Speaker 11: Cooper Tino, that is the deal that I believe just

851
00:39:03,680 --> 00:39:05,959
Speaker 11: makes a ton of sense, and I think many within

852
00:39:06,000 --> 00:39:06,880
Speaker 11: the industry.

853
00:39:06,600 --> 00:39:08,600
Speaker 1: More and more talking about you mentioned the deal they

854
00:39:08,600 --> 00:39:11,360
Speaker 1: did with getting Messi here to Major League Soccer.

855
00:39:11,400 --> 00:39:13,399
Speaker 2: What was that? I forget, like, how did that work out?

856
00:39:13,680 --> 00:39:16,640
Speaker 11: I mean, ultimately, I mean there's gonna be a part

857
00:39:17,080 --> 00:39:19,719
Speaker 11: it's essentially a part rev share right that MESSI is getting,

858
00:39:19,760 --> 00:39:20,200
Speaker 11: and there was.

859
00:39:20,160 --> 00:39:24,200
Speaker 2: Like an Apple. Apple's allowing MESSI to participate without Apple.

860
00:39:24,880 --> 00:39:27,960
Speaker 11: Messi is not an enemy, and I think that's and

861
00:39:28,000 --> 00:39:30,800
Speaker 11: I think that's something where when you look at MESSI

862
00:39:30,920 --> 00:39:33,680
Speaker 11: coming with that's done in terms of subscriber growth to

863
00:39:33,760 --> 00:39:36,920
Speaker 11: the platform, it chows because look as much as Ted

864
00:39:37,040 --> 00:39:39,600
Speaker 11: Lasso and some of the cameo and the content, Apple

865
00:39:39,680 --> 00:39:43,880
Speaker 11: is obviously phenomenal. Right now, it's a mansion with not

866
00:39:43,920 --> 00:39:47,400
Speaker 11: that much furniture, live sports content where it's at all

867
00:39:47,480 --> 00:39:47,879
Speaker 11: right so.

868
00:39:48,120 --> 00:39:51,240
Speaker 2: Not to mention, I mean or despite of the fact

869
00:39:51,320 --> 00:39:55,720
Speaker 2: that in spite of the fact that soccer is just boring,

870
00:39:56,120 --> 00:39:56,399
Speaker 2: just to.

871
00:39:56,440 --> 00:40:01,560
Speaker 1: Tears American people lived in Germany, well, compared.

872
00:40:01,280 --> 00:40:04,680
Speaker 2: To football or basketball, you like soccer.

873
00:40:05,440 --> 00:40:09,080
Speaker 11: Look personally, I mean, I could watch soccer, but obviously

874
00:40:09,160 --> 00:40:12,640
Speaker 11: the drum roll into what I've used college football. It's mecca,

875
00:40:12,920 --> 00:40:13,600
Speaker 11: it's the mecca.

876
00:40:13,640 --> 00:40:16,200
Speaker 1: We are, right, Let's talk Penn Sate football a little bit.

877
00:40:16,200 --> 00:40:20,000
Speaker 1: We'll digress preseason rank number seven. I love that rank,

878
00:40:20,080 --> 00:40:21,200
Speaker 1: but boy, that feels high.

879
00:40:21,640 --> 00:40:21,799
Speaker 9: Oh.

880
00:40:21,840 --> 00:40:23,920
Speaker 11: I think this is probably one of the most elite

881
00:40:24,040 --> 00:40:27,200
Speaker 11: defenses in all of college football. And in my opinion,

882
00:40:27,280 --> 00:40:31,360
Speaker 11: now with al are quarterback, Now, this is something I

883
00:40:31,880 --> 00:40:34,160
Speaker 11: truly believe. I think Franklin's put it together. And look,

884
00:40:34,200 --> 00:40:36,600
Speaker 11: when you look at Big ten, you got Penn State,

885
00:40:36,680 --> 00:40:38,799
Speaker 11: Ohio State, Michigan, which are all going to be three

886
00:40:38,840 --> 00:40:41,120
Speaker 11: of the top six or seven. And I believe the

887
00:40:41,160 --> 00:40:44,839
Speaker 11: tour slowly is being handed from SEC to Big ten.

888
00:40:45,280 --> 00:40:46,600
Speaker 2: There you go, now, our bosses.

889
00:40:46,840 --> 00:40:50,160
Speaker 1: I can hear him walking down saying, get off this discussion.

890
00:40:50,200 --> 00:40:53,800
Speaker 1: All right, let's step back again on Apple the iPhone fifteen,

891
00:40:53,880 --> 00:40:55,279
Speaker 1: is that the next one in September.

892
00:40:55,640 --> 00:40:56,680
Speaker 2: Is that do I upgrade?

893
00:40:56,680 --> 00:40:58,239
Speaker 1: Because my battery is already starting to bug me? So

894
00:40:58,280 --> 00:41:00,520
Speaker 1: now I feel like it's what are you having or something?

895
00:41:00,520 --> 00:41:00,759
Speaker 5: Eleven?

896
00:41:01,000 --> 00:41:03,280
Speaker 2: Yeah, yeah, but that's but your situation.

897
00:41:03,600 --> 00:41:06,120
Speaker 11: Actually, if you look at it today, take a step back.

898
00:41:06,800 --> 00:41:08,520
Speaker 2: You have two hundred and forty million.

899
00:41:08,280 --> 00:41:10,960
Speaker 11: That have not upgrade their iPhone in four plus years. Now,

900
00:41:11,040 --> 00:41:14,120
Speaker 11: battery life was phenomenal, so many were kind of like Paul,

901
00:41:14,160 --> 00:41:17,359
Speaker 11: like you had iPhones maybe three four years. I think

902
00:41:17,360 --> 00:41:19,399
Speaker 11: we're now getting what's going to be really four years.

903
00:41:19,480 --> 00:41:23,200
Speaker 2: Didn't Apple purposely set up the iPhone so that the

904
00:41:23,239 --> 00:41:24,919
Speaker 2: battery would die right at the end of the twenty

905
00:41:24,920 --> 00:41:28,920
Speaker 2: four month period? And again that's you know, is it

906
00:41:29,040 --> 00:41:31,480
Speaker 2: old wives tale? Haven't they agreed to pay money to

907
00:41:31,560 --> 00:41:32,000
Speaker 2: settle that?

908
00:41:32,480 --> 00:41:35,760
Speaker 11: Now, Look, that's something where obviously there's water under the bridge,

909
00:41:35,800 --> 00:41:39,480
Speaker 11: but when you ultimately but but it does speak to

910
00:41:39,560 --> 00:41:41,680
Speaker 11: what right now when you look at Apple as a stock,

911
00:41:41,800 --> 00:41:43,840
Speaker 11: I think this is sort of halftime in the Super

912
00:41:43,840 --> 00:41:47,560
Speaker 11: Bowl going in to what I viewed as a massive cycle.

913
00:41:47,800 --> 00:41:51,000
Speaker 11: And even in China, despite all the noise, they're gaining

914
00:41:51,120 --> 00:41:53,759
Speaker 11: three four hundred bits of market share, which is why

915
00:41:53,800 --> 00:41:56,600
Speaker 11: we believe Apple here is a table pounder on the pullback.

916
00:41:56,680 --> 00:41:58,800
Speaker 1: All right, so we got you here in the studio.

917
00:41:58,840 --> 00:42:02,200
Speaker 1: We got your Apple call. Give me us two or

918
00:42:02,200 --> 00:42:03,600
Speaker 1: three more of the calls that you're talking to your

919
00:42:03,600 --> 00:42:04,600
Speaker 1: clients about these days.

920
00:42:04,680 --> 00:42:07,640
Speaker 11: Look to the guidance heard around the world is gonna

921
00:42:07,640 --> 00:42:11,120
Speaker 11: be Wednesday night with Jensen and Vidia, because this is

922
00:42:12,080 --> 00:42:15,000
Speaker 11: i'd say, is probably one of the most important earnings

923
00:42:15,040 --> 00:42:18,400
Speaker 11: calls in many, many years for tech because it all

924
00:42:18,440 --> 00:42:21,200
Speaker 11: comes down to the godfather of AI. When you look

925
00:42:21,200 --> 00:42:23,879
Speaker 11: at Jensen and Vidia, they see the demand, they see

926
00:42:23,880 --> 00:42:27,480
Speaker 11: the use cases. I'm expecting bullishness Wednesday from them, and

927
00:42:27,520 --> 00:42:30,000
Speaker 11: I think that's important for the rest of the tech sector.

928
00:42:30,360 --> 00:42:33,040
Speaker 11: They're gonna see across the board. And then it kind

929
00:42:33,040 --> 00:42:35,919
Speaker 11: of parleads into what I believe is a key theme

930
00:42:35,960 --> 00:42:39,600
Speaker 11: of cybersecurity. You show that pow out though Friday night,

931
00:42:39,640 --> 00:42:41,839
Speaker 11: A lot of fears about that with the Friday night

932
00:42:41,920 --> 00:42:44,920
Speaker 11: special that soap Opera's done, I wouldn't expect them to

933
00:42:44,920 --> 00:42:46,919
Speaker 11: be doing any calls Friday night, but that was much

934
00:42:46,920 --> 00:42:49,480
Speaker 11: better than feared, and I think it just shows that

935
00:42:50,239 --> 00:42:54,840
Speaker 11: demands holding up well in cyber in cloud, in chips.

936
00:42:55,120 --> 00:42:58,160
Speaker 11: We think the new tech bowl market is already begun, all.

937
00:42:58,120 --> 00:43:00,400
Speaker 1: Right, So the way you play that is in vidio, Yeah,

938
00:43:00,840 --> 00:43:04,200
Speaker 1: Microsoft is also maybe Armholdings right, oh yeah, what is

939
00:43:04,200 --> 00:43:05,080
Speaker 1: is that gonna been?

940
00:43:05,160 --> 00:43:08,040
Speaker 2: Yeah? Gives we got two minutes. It's a private company

941
00:43:08,080 --> 00:43:11,279
Speaker 2: now owned by what owned by soft Bank? Yep uh,

942
00:43:11,600 --> 00:43:14,960
Speaker 2: but in video wants to push that IPO and so

943
00:43:15,120 --> 00:43:17,280
Speaker 2: to other big players. Is it gonna happen? We're gonna.

944
00:43:17,440 --> 00:43:18,759
Speaker 2: I think we're gonna get the filing today.

945
00:43:18,840 --> 00:43:20,359
Speaker 11: Yeah, I mean, I think right now this is something

946
00:43:20,400 --> 00:43:23,719
Speaker 11: the streets highly anticipating because it's all how do you

947
00:43:23,840 --> 00:43:26,800
Speaker 11: play these teams? And you look at ARM you obviously

948
00:43:26,800 --> 00:43:28,719
Speaker 11: have big player soft Bank and others in there, and

949
00:43:28,760 --> 00:43:32,080
Speaker 11: I think it's something where this is the biggest tech

950
00:43:32,200 --> 00:43:34,919
Speaker 11: theme in our opinion since nineteen eighty five, since start

951
00:43:34,960 --> 00:43:37,640
Speaker 11: of the Internet. So we are despite what we're seeing

952
00:43:37,640 --> 00:43:40,640
Speaker 11: in the macro and everyone focused on every fed sort

953
00:43:40,719 --> 00:43:43,600
Speaker 11: of meeting or every dinner where they give them speech,

954
00:43:43,920 --> 00:43:46,319
Speaker 11: the reality is that that white flag is starting to

955
00:43:46,320 --> 00:43:49,040
Speaker 11: get raised. It's a risk on and in my opinion,

956
00:43:49,080 --> 00:43:52,440
Speaker 11: it's the biggest tech trend we've seen thirty years.

957
00:43:52,680 --> 00:43:55,360
Speaker 2: So is it fair to call arm an ai play?

958
00:43:55,480 --> 00:43:55,640
Speaker 4: Oh?

959
00:43:55,719 --> 00:43:58,440
Speaker 11: Yes, I'd clearly be able to call that an AI play,

960
00:43:58,880 --> 00:44:01,560
Speaker 11: and Paul Matt I'd say the difference now is that

961
00:44:01,880 --> 00:44:04,479
Speaker 11: in video right now they're the only game in town.

962
00:44:04,880 --> 00:44:07,200
Speaker 11: But when you look down the road, you got Sue

963
00:44:07,200 --> 00:44:09,960
Speaker 11: and AMD, you got Armhold, and you're gonna have other

964
00:44:10,080 --> 00:44:12,560
Speaker 11: chip players in what's really gonna be a tidal wave

965
00:44:12,600 --> 00:44:13,960
Speaker 11: of spend all right?

966
00:44:14,000 --> 00:44:15,480
Speaker 2: What else? What else you got for us?

967
00:44:15,840 --> 00:44:18,520
Speaker 11: Look, I would just I'd say overall, this is something

968
00:44:18,520 --> 00:44:21,400
Speaker 11: where I think more and more investors are focused twenty

969
00:44:21,480 --> 00:44:24,520
Speaker 11: twenty four. I think if you look at names like Tesla,

970
00:44:24,880 --> 00:44:27,600
Speaker 11: we've obviously had to pull back post earnings, a lot

971
00:44:27,640 --> 00:44:30,880
Speaker 11: of worries about price cuts in China. We think barksworts

972
00:44:30,920 --> 00:44:32,920
Speaker 11: than bite ninety five percent. That has already in the

973
00:44:32,960 --> 00:44:35,520
Speaker 11: rear view mirror, and I continue to view it. In

974
00:44:35,560 --> 00:44:39,400
Speaker 11: electric vehicles, it's Tesla's world. Everyone else's paying rent, but

975
00:44:39,600 --> 00:44:42,000
Speaker 11: you are gonna have Look what's happened the three to

976
00:44:42,000 --> 00:44:45,680
Speaker 11: win three area code and there's massive turnaround GM, massive

977
00:44:45,680 --> 00:44:50,000
Speaker 11: turnaround forward what Farley's doing, and it's the biggest transformation

978
00:44:50,520 --> 00:44:52,680
Speaker 11: to the auto industry since nineteen fifties.

979
00:44:53,160 --> 00:44:56,080
Speaker 2: Yeah, for sure. I mean if Folkswagen has invested overseas

980
00:44:56,120 --> 00:44:59,560
Speaker 2: a ton as well, and we're getting uh, I'm driving

981
00:44:59,560 --> 00:45:02,480
Speaker 2: the bm W XM right now, which is a hybrid,

982
00:45:02,480 --> 00:45:05,680
Speaker 2: but I've driven the IX, which is very impressive. And

983
00:45:05,760 --> 00:45:09,080
Speaker 2: they have a fleet electric vehicles coming out. Mercedes has

984
00:45:09,120 --> 00:45:10,320
Speaker 2: the Equs and the EQUE.

985
00:45:10,400 --> 00:45:12,520
Speaker 11: Those are very and then yeah, exactly, and then you

986
00:45:12,560 --> 00:45:14,400
Speaker 11: ask it as well, exactly, and then you're gonna have

987
00:45:14,480 --> 00:45:17,440
Speaker 11: Paul with the cyber truck next going up to his

988
00:45:17,520 --> 00:45:19,000
Speaker 11: tea time in the cyber truck.

989
00:45:19,120 --> 00:45:22,120
Speaker 1: Absolutely, Danives, thanks so much for joining us in two

990
00:45:22,160 --> 00:45:26,320
Speaker 1: weeks until Penn State football kicks off. Dan Ives, Managing Director,

991
00:45:26,400 --> 00:45:29,000
Speaker 1: senior equity analyst, web Bush Securities.

992
00:45:29,239 --> 00:45:32,320
Speaker 6: You're listening to the tape catch are live program Bloomberg

993
00:45:32,400 --> 00:45:36,000
Speaker 6: Markets weekdays at ten am Eastern on Bloomberg Radio, the

994
00:45:36,040 --> 00:45:38,200
Speaker 6: tune in app, Bloomberg dot Com, and the.

995
00:45:38,080 --> 00:45:39,279
Speaker 4: Bloomberg Business App.

996
00:45:39,320 --> 00:45:42,120
Speaker 6: You can also listen live on Amazon Alexa from our

997
00:45:42,160 --> 00:45:47,200
Speaker 6: flagship New York station, Just say Alexa play Bloomberg eleven thirty.

998
00:45:47,960 --> 00:45:52,000
Speaker 2: There has been talk recently about a new COVID variant. Nope,

999
00:45:52,160 --> 00:45:55,440
Speaker 2: and I mean not here. There's I think it's safe

1000
00:45:55,480 --> 00:45:58,279
Speaker 2: to assume that there's going to be a variant of

1001
00:45:58,320 --> 00:46:02,560
Speaker 2: this virus around. For look, the Spanish flu was I

1002
00:46:02,600 --> 00:46:06,319
Speaker 2: think nineteen eighteen, right, and we still have variants of

1003
00:46:06,360 --> 00:46:09,799
Speaker 2: that floating around today that people kind of get every year.

1004
00:46:09,880 --> 00:46:12,040
Speaker 2: It's not a big deal, it's just how it works.

1005
00:46:12,680 --> 00:46:14,799
Speaker 2: But it could be a problem for the companies that

1006
00:46:14,880 --> 00:46:19,759
Speaker 2: made the vaccines for the OG variants. Sam Fizzali joins

1007
00:46:19,800 --> 00:46:23,960
Speaker 2: us right now, head of European Research and Pharmaceuticals Analysis

1008
00:46:23,960 --> 00:46:26,800
Speaker 2: for Bloomberg Intelligence. Sam, great to have you on the program,

1009
00:46:27,080 --> 00:46:31,560
Speaker 2: and I want to say that first off, people can't

1010
00:46:31,760 --> 00:46:34,400
Speaker 2: people don't have to just listen to this program. No,

1011
00:46:34,640 --> 00:46:37,200
Speaker 2: you can watch it if you go on YouTube dot

1012
00:46:37,239 --> 00:46:40,640
Speaker 2: com search Bloomberg Radio and you can we stream live.

1013
00:46:41,200 --> 00:46:45,359
Speaker 2: You were already an attractive man, Sam, but now with

1014
00:46:45,440 --> 00:46:48,480
Speaker 2: the beard, I would say you're at least forty percent sexier.

1015
00:46:48,840 --> 00:46:50,560
Speaker 2: Do you get a lot of thank you, a lot

1016
00:46:50,560 --> 00:46:52,279
Speaker 2: of compliments on that.

1017
00:46:52,760 --> 00:46:55,680
Speaker 9: You know that means so much to me. If you

1018
00:46:55,760 --> 00:46:57,520
Speaker 9: hadn't said it, I mean, you've just made my day.

1019
00:46:57,520 --> 00:47:00,480
Speaker 2: Basically, Well, I did not keep you, see you, I

1020
00:47:00,520 --> 00:47:02,320
Speaker 2: did not support this move to it to a beard.

1021
00:47:03,280 --> 00:47:05,600
Speaker 2: All right, so talk to us when I see you,

1022
00:47:06,080 --> 00:47:10,520
Speaker 2: talk talk to us. About the h the possibility. I mean,

1023
00:47:10,719 --> 00:47:13,360
Speaker 2: obviously there's gonna be new COVID variant, right.

1024
00:47:14,360 --> 00:47:17,400
Speaker 9: Yeah, Look, I'm scared of Paul. I'm even more scared

1025
00:47:17,440 --> 00:47:20,640
Speaker 9: of you. So I thought very hard that long about

1026
00:47:20,640 --> 00:47:24,440
Speaker 9: writing another note on on COVID because the world has

1027
00:47:24,480 --> 00:47:27,920
Speaker 9: moved on, and rightly so, because our death rates are

1028
00:47:27,960 --> 00:47:31,120
Speaker 9: a lot, lot lot lower. We have vaccines, we have drugs,

1029
00:47:31,120 --> 00:47:33,760
Speaker 9: we have everything. So why did I do this? Because

1030
00:47:33,760 --> 00:47:37,000
Speaker 9: I'm interested in the companies that make the vaccines. We

1031
00:47:37,120 --> 00:47:39,440
Speaker 9: have three companies involved in the vaccine making. If you

1032
00:47:39,440 --> 00:47:41,279
Speaker 9: want to add novo vaccine, this four, if you want

1033
00:47:41,280 --> 00:47:45,320
Speaker 9: to have five, et cetera, et cetera variant. What do

1034
00:47:45,400 --> 00:47:49,120
Speaker 9: they mean? Variants mean that the more mutations they have,

1035
00:47:49,440 --> 00:47:52,120
Speaker 9: the more likely they are not to respond to that

1036
00:47:52,320 --> 00:47:57,160
Speaker 9: initial shield that our vaccine gives us. So and that

1037
00:47:57,239 --> 00:48:00,520
Speaker 9: initial shield is just simply the two or three worth

1038
00:48:00,560 --> 00:48:04,560
Speaker 9: of protection against an infection. And this new variant that

1039
00:48:05,160 --> 00:48:09,319
Speaker 9: has just crop tops in some sequences BA spot two

1040
00:48:09,400 --> 00:48:12,520
Speaker 9: Spot eighty six is the one that has got me

1041
00:48:12,560 --> 00:48:15,160
Speaker 9: a little bit worried, just like omicron did when it

1042
00:48:15,239 --> 00:48:16,960
Speaker 9: first appeared, because it has.

1043
00:48:16,840 --> 00:48:18,280
Speaker 2: Thirty four mutations.

1044
00:48:18,680 --> 00:48:21,680
Speaker 9: Now that means if it takes hold, and nobody knows

1045
00:48:21,680 --> 00:48:24,640
Speaker 9: whether it will or not, that it could be a

1046
00:48:24,719 --> 00:48:26,960
Speaker 9: variant that would not respond to our vaccines.

1047
00:48:27,800 --> 00:48:31,080
Speaker 1: So Sam, what are the companies telling you, guys about

1048
00:48:31,200 --> 00:48:35,120
Speaker 1: any further boosters or vaccines.

1049
00:48:34,800 --> 00:48:37,920
Speaker 2: That may be available this fall? What are they telling you?

1050
00:48:38,719 --> 00:48:41,759
Speaker 9: Yeah, so they've all, Paul been making vaccines against the

1051
00:48:41,960 --> 00:48:45,920
Speaker 9: XBB variant, which is what the regulators asked.

1052
00:48:45,719 --> 00:48:46,160
Speaker 2: Them to do.

1053
00:48:46,600 --> 00:48:47,920
Speaker 3: That's the data they presented.

1054
00:48:47,960 --> 00:48:52,120
Speaker 9: That was the variant that was mostly responsible for infections

1055
00:48:53,000 --> 00:48:56,279
Speaker 9: in the past few months. Now, the issue is that,

1056
00:48:56,320 --> 00:48:59,680
Speaker 9: as I said, this new variant, if it takes hold,

1057
00:48:59,719 --> 00:49:02,600
Speaker 9: that's very important to say because we don't know whether

1058
00:49:02,880 --> 00:49:06,440
Speaker 9: or not. It's a very for mutations different am acids

1059
00:49:06,480 --> 00:49:10,319
Speaker 9: different so it's very likely that our antibodies won't do

1060
00:49:10,440 --> 00:49:12,880
Speaker 9: as well with them. We will still have great protection

1061
00:49:13,000 --> 00:49:14,840
Speaker 9: against severe disease as we had with them the.

1062
00:49:14,880 --> 00:49:16,800
Speaker 2: Front in most cases.

1063
00:49:17,239 --> 00:49:19,880
Speaker 9: So what this means is that if they have carried

1064
00:49:19,920 --> 00:49:22,360
Speaker 9: on with XPB and say in a month month and

1065
00:49:22,440 --> 00:49:27,040
Speaker 9: a half, this variant becomes if it does rampant in

1066
00:49:27,160 --> 00:49:30,600
Speaker 9: terms of or the main variant of growing rapidly, that

1067
00:49:30,680 --> 00:49:34,200
Speaker 9: the vaccines just won't do a lot for that and

1068
00:49:34,239 --> 00:49:36,520
Speaker 9: of course that has to be tested. And if that's

1069
00:49:36,560 --> 00:49:40,120
Speaker 9: the case, then you have lower sales who wants a

1070
00:49:40,200 --> 00:49:43,920
Speaker 9: vaccine that doesn't do anything, and a higher stock write offs.

1071
00:49:43,960 --> 00:49:46,720
Speaker 9: And that is not good, especially for modern I's already

1072
00:49:46,719 --> 00:49:48,480
Speaker 9: told us they're going to have three and a half

1073
00:49:48,520 --> 00:49:52,239
Speaker 9: billion to four billion of cost of goods manufacturing. You

1074
00:49:52,320 --> 00:49:54,160
Speaker 9: put that in the context that six to eight billion

1075
00:49:54,200 --> 00:49:59,080
Speaker 9: dollar guidance for sales, that's a humongous cost in terms

1076
00:49:59,080 --> 00:50:03,640
Speaker 9: of margin, gross margin or gross costs at least, So

1077
00:50:04,560 --> 00:50:06,920
Speaker 9: it would be a really difficult situation for them in

1078
00:50:07,040 --> 00:50:08,520
Speaker 9: terms of managing this.

1079
00:50:09,520 --> 00:50:13,640
Speaker 2: In terms of us getting sick, I mean most of

1080
00:50:13,680 --> 00:50:17,480
Speaker 2: us have already had COVID once or twice, right, So

1081
00:50:18,880 --> 00:50:25,319
Speaker 2: how strong is our natural, naturally developed immunity to new variants.

1082
00:50:26,560 --> 00:50:29,200
Speaker 9: Yeah, so that really does depend on your age or

1083
00:50:29,239 --> 00:50:32,000
Speaker 9: immune status. So there are of course people who are

1084
00:50:32,400 --> 00:50:35,480
Speaker 9: very elderly, so they do need a booster. There are

1085
00:50:35,480 --> 00:50:37,600
Speaker 9: people who are immune a compromise, who will always need

1086
00:50:37,719 --> 00:50:40,799
Speaker 9: protection from drugs or antibodies. Unfortunately, we don't have the

1087
00:50:40,800 --> 00:50:44,800
Speaker 9: antibodies anymore. For the average person, and I count myself

1088
00:50:44,800 --> 00:50:46,960
Speaker 9: as an average person, even though as you can see,

1089
00:50:47,560 --> 00:50:49,319
Speaker 9: I have a slightly white beard here.

1090
00:50:50,440 --> 00:50:51,560
Speaker 12: You know, we're all around.

1091
00:50:51,320 --> 00:50:54,880
Speaker 9: The same age, Paul and I. You're obviously decades younger

1092
00:50:54,880 --> 00:50:59,520
Speaker 9: than us. We're likely to be okay. Now, of course

1093
00:50:59,560 --> 00:51:02,440
Speaker 9: we all have a risk of long COVID or slightly

1094
00:51:02,520 --> 00:51:06,280
Speaker 9: longer a response to the virus, but we should mostly

1095
00:51:06,280 --> 00:51:09,719
Speaker 9: be okay with what we've already had. Really, the majority

1096
00:51:09,719 --> 00:51:10,480
Speaker 9: of people don't.

1097
00:51:10,320 --> 00:51:11,359
Speaker 12: Need another booster shop.

1098
00:51:11,719 --> 00:51:14,720
Speaker 9: It is those people who are most at risks immune

1099
00:51:14,719 --> 00:51:18,440
Speaker 9: systems are not as adept at dealing with rapidly changing

1100
00:51:18,520 --> 00:51:20,200
Speaker 9: viruses who need the most help.

1101
00:51:20,760 --> 00:51:22,640
Speaker 2: But the same is true with the flu, right, so

1102
00:51:22,719 --> 00:51:25,879
Speaker 2: this is becoming more of a flu like risk.

1103
00:51:26,960 --> 00:51:29,319
Speaker 9: Yeah, except you know, I mean there's the flu around

1104
00:51:29,320 --> 00:51:31,319
Speaker 9: at the minute, at least in the northern hemisphere, right,

1105
00:51:31,360 --> 00:51:33,080
Speaker 9: and then we have a wave of COVID. You can

1106
00:51:33,120 --> 00:51:35,400
Speaker 9: tell without needing tests.

1107
00:51:35,120 --> 00:51:35,440
Speaker 2: And all that.

1108
00:51:35,520 --> 00:51:38,640
Speaker 9: If you look at the prescriptions for paxlovied in the

1109
00:51:38,640 --> 00:51:41,600
Speaker 9: Bloomberg terminal, which you can look at if you had one,

1110
00:51:41,960 --> 00:51:43,959
Speaker 9: you can see that the prescriptions are going up like that.

1111
00:51:43,960 --> 00:51:48,000
Speaker 9: That tells you that community infections are on the rise

1112
00:51:48,040 --> 00:51:50,960
Speaker 9: and that people who need paxlobed are hopefully getting them.

1113
00:51:51,320 --> 00:51:53,960
Speaker 9: But obviously a lot of physicians are still worried about

1114
00:51:54,320 --> 00:51:57,239
Speaker 9: some nonsense called Paxlovid rebound, which has nothing to do

1115
00:51:57,280 --> 00:51:57,800
Speaker 9: with the drug.

1116
00:51:59,280 --> 00:52:01,239
Speaker 2: That is where you can see that there.

1117
00:52:01,200 --> 00:52:04,439
Speaker 9: Is clearly in August, because maybe it's two hot people

1118
00:52:04,480 --> 00:52:07,360
Speaker 9: all congregating inside. That's what happens in the winter. So

1119
00:52:07,440 --> 00:52:10,480
Speaker 9: this this virus is behaving a little bit differently. Still,

1120
00:52:10,600 --> 00:52:12,400
Speaker 9: we're only three years into it, right.

1121
00:52:13,360 --> 00:52:16,440
Speaker 1: So Sam, how about for the companies and the income

1122
00:52:16,480 --> 00:52:18,920
Speaker 1: statements for the Moderners and the Pfizers of the world,

1123
00:52:19,640 --> 00:52:22,200
Speaker 1: were they in terms of transitioning away from I guess

1124
00:52:22,719 --> 00:52:26,400
Speaker 1: the reliance on these COVID drugs into just the normal

1125
00:52:26,440 --> 00:52:27,440
Speaker 1: course of business.

1126
00:52:28,080 --> 00:52:30,920
Speaker 12: Yeah, Fiser obviously, Paul, we have to put Vizer aside

1127
00:52:30,920 --> 00:52:33,239
Speaker 12: because they have a you know, sixty odd billion dollar

1128
00:52:33,320 --> 00:52:36,399
Speaker 12: guidance for twenty twenty three, of which only about thirty

1129
00:52:36,400 --> 00:52:40,960
Speaker 12: percent comes from vaxslovic plus the vaccine Moderna.

1130
00:52:40,560 --> 00:52:43,440
Speaker 9: And Biontic, that's pretty much their revenue line today. And

1131
00:52:43,480 --> 00:52:46,520
Speaker 9: I think that's going to stay the case for Biontics

1132
00:52:46,560 --> 00:52:50,680
Speaker 9: certainly in the for the next foreseeable and Moderna possibly

1133
00:52:50,800 --> 00:52:53,239
Speaker 9: into twenty twenty four to twenty twenty five, when there

1134
00:52:53,239 --> 00:52:56,960
Speaker 9: are other vaccine for respiratorcs in situal virus is likely

1135
00:52:57,000 --> 00:52:59,280
Speaker 9: to kick in in a very competitive market.

1136
00:53:00,320 --> 00:53:02,480
Speaker 1: Yeah, looking at the Pfizer stock that's come down very

1137
00:53:02,520 --> 00:53:03,799
Speaker 1: hard from it's high here.

1138
00:53:03,840 --> 00:53:05,919
Speaker 2: So what's the kind of data fat shot they need?

1139
00:53:07,480 --> 00:53:10,400
Speaker 2: We go v or ozentpe. Oh, yeah, we need to

1140
00:53:10,400 --> 00:53:11,520
Speaker 2: get They need the opposite.

1141
00:53:11,560 --> 00:53:13,120
Speaker 9: They need something to pattern the ship price.

1142
00:53:13,680 --> 00:53:15,160
Speaker 2: They need that exactly.

1143
00:53:15,400 --> 00:53:16,799
Speaker 1: All right, next time we get you all, we'll talk

1144
00:53:16,840 --> 00:53:19,160
Speaker 1: about some of those weight loss drugs, because they are

1145
00:53:19,200 --> 00:53:20,960
Speaker 1: all over the place and all over the new san

1146
00:53:21,040 --> 00:53:24,160
Speaker 1: Fazelli he's head of European Research. Is also the pharmaceuticals

1147
00:53:24,160 --> 00:53:28,480
Speaker 1: analysts over there for Bloomberg in intelligence, is was our

1148
00:53:28,520 --> 00:53:30,800
Speaker 1: go to is our go to guy on all things pharma,

1149
00:53:30,880 --> 00:53:34,560
Speaker 1: including during that time of the pandemic and kind of

1150
00:53:34,560 --> 00:53:36,480
Speaker 1: we're all kind of getting up the learning curve of

1151
00:53:36,600 --> 00:53:40,920
Speaker 1: the disease and of more importantly the vaccines which have

1152
00:53:41,000 --> 00:53:41,840
Speaker 1: been so effective.

1153
00:53:42,160 --> 00:53:45,279
Speaker 6: You're listening to the tape Cat's are live program Bloomberg

1154
00:53:45,320 --> 00:53:48,920
Speaker 6: Markets weekdays at ten am Eastern on Bloomberg Radio, the

1155
00:53:48,960 --> 00:53:51,080
Speaker 6: tune in app, Bloomberg dot Com, and the.

1156
00:53:51,000 --> 00:53:52,200
Speaker 4: Bloomberg Business App.

1157
00:53:52,239 --> 00:53:55,080
Speaker 6: You can also listen live on Amazon Alexa from our

1158
00:53:55,080 --> 00:54:00,359
Speaker 6: flagship New York station, just say Alexa playing Bloomberg eleven thirty.

1159
00:54:01,120 --> 00:54:06,000
Speaker 2: Let's get to cars right now, seeing as Pebble Beach

1160
00:54:06,400 --> 00:54:10,680
Speaker 2: kicked off last week. And uh it's I guess, a

1161
00:54:10,840 --> 00:54:17,280
Speaker 2: mecca for anything from classic cars to brand new cars.

1162
00:54:17,640 --> 00:54:22,080
Speaker 2: Uh Ford, for example, unveiled their eight hundred horsepower Mustang

1163
00:54:22,160 --> 00:54:25,400
Speaker 2: gt D and there are a number of other unveilings,

1164
00:54:25,400 --> 00:54:29,160
Speaker 2: but I think really it's all about the collectors uh

1165
00:54:29,280 --> 00:54:35,000
Speaker 2: in in Monterey. Dave Meggers joins us right now, CEO

1166
00:54:35,160 --> 00:54:39,839
Speaker 2: of Meekham Auctions. Dave, thanks so much for coming onto

1167
00:54:39,840 --> 00:54:42,680
Speaker 2: the show with us. Talk to me about your take

1168
00:54:42,800 --> 00:54:46,840
Speaker 2: on the what do you call it the h concourse

1169
00:54:47,280 --> 00:54:51,160
Speaker 2: concourse to elegance and and and what was seen out

1170
00:54:51,160 --> 00:54:52,440
Speaker 2: in California this week.

1171
00:54:53,400 --> 00:54:56,680
Speaker 5: Well, you know, Monterey Car Week is the is the

1172
00:54:56,920 --> 00:55:00,080
Speaker 5: mecca for for car collectors every year and every but

1173
00:55:00,200 --> 00:55:03,839
Speaker 5: he looks looks forward to coming to Monterey. All of

1174
00:55:03,880 --> 00:55:06,520
Speaker 5: the major auction houses are there. Of course, the Concourse

1175
00:55:06,560 --> 00:55:11,320
Speaker 5: took place yesterday. All manufacturers have have some kind of

1176
00:55:11,360 --> 00:55:13,360
Speaker 5: a display there as well, and it's just it's just

1177
00:55:13,400 --> 00:55:15,160
Speaker 5: a great place to be if you're if you're a

1178
00:55:15,160 --> 00:55:15,760
Speaker 5: car person.

1179
00:55:15,800 --> 00:55:20,520
Speaker 13: And last year Car Week roared back from a little

1180
00:55:20,560 --> 00:55:23,719
Speaker 13: bit of a hiatus because of the pandemic.

1181
00:55:23,239 --> 00:55:26,839
Speaker 5: And I think this year what I saw was the

1182
00:55:26,960 --> 00:55:29,560
Speaker 5: enthusiasm continued to climb, and I would say this year

1183
00:55:30,160 --> 00:55:32,600
Speaker 5: money Car Week was back in full force.

1184
00:55:33,120 --> 00:55:33,560
Speaker 2: Yeah.

1185
00:55:33,800 --> 00:55:38,200
Speaker 1: It's funny Matt Mice number three offspring, who's now twenty five,

1186
00:55:38,280 --> 00:55:41,440
Speaker 1: when he was a teenager and even younger.

1187
00:55:41,560 --> 00:55:42,799
Speaker 2: He's a car not like like you.

1188
00:55:42,880 --> 00:55:45,600
Speaker 1: He and his buddies would sneak in to the del

1189
00:55:45,640 --> 00:55:48,319
Speaker 1: Monte golf course at the Higher Regency where they all

1190
00:55:48,360 --> 00:55:49,600
Speaker 1: these cars out.

1191
00:55:49,480 --> 00:55:52,520
Speaker 2: On the golf course. It's just amazing and it's great stuff.

1192
00:55:52,640 --> 00:55:52,839
Speaker 4: Yeah.

1193
00:55:52,840 --> 00:55:55,360
Speaker 5: Of course that del Monte golf Course at the Hiatt

1194
00:55:55,360 --> 00:55:58,520
Speaker 5: is the Meekam auction and that's right. We like to

1195
00:55:58,520 --> 00:56:01,120
Speaker 5: think that's the best option on it, and so it's

1196
00:56:01,120 --> 00:56:03,920
Speaker 5: a beautiful display. This year we had six hundred cars

1197
00:56:03,960 --> 00:56:06,920
Speaker 5: that were all displayed out on the golf course on

1198
00:56:06,920 --> 00:56:07,520
Speaker 5: the fairways.

1199
00:56:07,520 --> 00:56:09,240
Speaker 13: That's always a great look.

1200
00:56:09,800 --> 00:56:12,600
Speaker 5: We're the only auction company that is able to display

1201
00:56:12,600 --> 00:56:14,920
Speaker 5: out on a golf course like that. And we had

1202
00:56:15,360 --> 00:56:18,320
Speaker 5: a great collection this year that had seven English cars,

1203
00:56:18,360 --> 00:56:23,399
Speaker 5: seven Porsches, vintage Porches and thirteen vintage Ferraris. We called

1204
00:56:23,400 --> 00:56:27,439
Speaker 5: it the blow Chase Chanel Fast Collection, which translates into

1205
00:56:27,480 --> 00:56:28,520
Speaker 5: fast fast Fast.

1206
00:56:29,840 --> 00:56:33,920
Speaker 2: That collection was Italian, German and English. So what did you, guys?

1207
00:56:34,719 --> 00:56:37,239
Speaker 2: What did you What were the notable sales? What would

1208
00:56:37,280 --> 00:56:39,239
Speaker 2: you say the biggest that stand out for you?

1209
00:56:40,400 --> 00:56:44,960
Speaker 5: Well, I think my observation was across the entire peninsula

1210
00:56:45,080 --> 00:56:48,600
Speaker 5: for the week, I would say the keyword was Ferrari.

1211
00:56:49,600 --> 00:56:50,600
Speaker 2: There were a.

1212
00:56:50,600 --> 00:56:53,800
Speaker 5: Number of significant Ferraris that were on the peninsula, a

1213
00:56:53,840 --> 00:56:55,400
Speaker 5: lot of them for sale.

1214
00:56:55,840 --> 00:56:58,880
Speaker 13: Mikon was no exception. I think four out of the

1215
00:56:58,920 --> 00:57:01,759
Speaker 13: top six cars that we sold.

1216
00:57:01,520 --> 00:57:04,839
Speaker 5: Were Ferraris, two of them in the three million and

1217
00:57:04,840 --> 00:57:07,560
Speaker 5: over three million dollar range of a sixty six Forrari

1218
00:57:07,640 --> 00:57:12,440
Speaker 5: two to seventy five GTV sixty alloy and a nineteen

1219
00:57:12,520 --> 00:57:16,240
Speaker 5: ninety Ferrari F forty. Those those are already significantly popular,

1220
00:57:16,600 --> 00:57:18,920
Speaker 5: and I would suspect that when we when all the

1221
00:57:19,000 --> 00:57:21,480
Speaker 5: numbers are in, we're still counting and we're still selling,

1222
00:57:21,920 --> 00:57:24,840
Speaker 5: but probably seven of the.

1223
00:57:24,120 --> 00:57:27,520
Speaker 13: Top ten cars are auction that sold will be Ferraris.

1224
00:57:27,920 --> 00:57:29,479
Speaker 2: Hey, Dave, give them a sense.

1225
00:57:29,520 --> 00:57:31,920
Speaker 1: Because I didn't really know about this whole world until

1226
00:57:32,000 --> 00:57:34,400
Speaker 1: you know, I started going to the concourse into all

1227
00:57:34,440 --> 00:57:37,440
Speaker 1: this shows all around Monterey and it really.

1228
00:57:37,240 --> 00:57:39,600
Speaker 2: Is a special time. There's something for everybody out there.

1229
00:57:40,720 --> 00:57:42,440
Speaker 1: Give us a sense of how the market is now

1230
00:57:42,480 --> 00:57:45,280
Speaker 1: in terms of the demand, the pricing, the value, because

1231
00:57:45,320 --> 00:57:48,680
Speaker 1: I know these are very substantial investments for a lot

1232
00:57:48,680 --> 00:57:50,360
Speaker 1: of people, and they look at them and they treat

1233
00:57:50,360 --> 00:57:52,480
Speaker 1: them just like they would their stock or bond portfolio.

1234
00:57:52,520 --> 00:57:54,120
Speaker 1: Talk about this is a marketplace.

1235
00:57:55,200 --> 00:57:57,439
Speaker 5: Yeah, Well, first of all, that you know, there are

1236
00:57:57,440 --> 00:58:00,560
Speaker 5: two types of collectors. There are those that collect because

1237
00:58:00,600 --> 00:58:04,320
Speaker 5: there's some emotional or personal attachment to the cars that

1238
00:58:04,360 --> 00:58:06,560
Speaker 5: they have in their collection, and then there are those

1239
00:58:06,640 --> 00:58:11,480
Speaker 5: that are purely transactional financial making investments. And of course

1240
00:58:11,520 --> 00:58:15,640
Speaker 5: the collector car market has shown significant returns as an

1241
00:58:15,640 --> 00:58:20,280
Speaker 5: alternative investment over the last ten to twenty years, averaging

1242
00:58:20,360 --> 00:58:23,160
Speaker 5: over thirty percent return per year, and of course some

1243
00:58:23,280 --> 00:58:27,200
Speaker 5: brand's doing better than others, Ferrari of course leading the way.

1244
00:58:27,960 --> 00:58:30,360
Speaker 5: But the market to the last I would say the

1245
00:58:30,440 --> 00:58:33,280
Speaker 5: last two years since coming out of the pandemic, has

1246
00:58:33,320 --> 00:58:37,680
Speaker 5: been absolutely red hot. We've been seeing thirty percent increases

1247
00:58:37,680 --> 00:58:40,720
Speaker 5: and prices annually, if not more than that for certain

1248
00:58:40,720 --> 00:58:44,440
Speaker 5: select cars, and it truly has been a seller's market.

1249
00:58:45,000 --> 00:58:47,480
Speaker 5: I would say this year, in twenty twenty three, we're

1250
00:58:47,520 --> 00:58:51,800
Speaker 5: seeing the prices not accelerating as fast as they have

1251
00:58:51,960 --> 00:58:54,760
Speaker 5: the last couple of years, which is beneficial of course

1252
00:58:55,200 --> 00:58:58,720
Speaker 5: to buyers and collectors. And my observation is right now

1253
00:58:58,760 --> 00:59:02,440
Speaker 5: we have a balance that's it's still a great market

1254
00:59:02,520 --> 00:59:06,880
Speaker 5: for sellers. They're still seeing strong prices, but it's a

1255
00:59:06,920 --> 00:59:10,360
Speaker 5: little more reasonable and easier to catch the market, if

1256
00:59:10,400 --> 00:59:13,160
Speaker 5: you will, if you're a buyer as well, and that's

1257
00:59:13,200 --> 00:59:14,520
Speaker 5: resulting in great sales.

1258
00:59:15,640 --> 00:59:18,840
Speaker 2: What data do you rely on or what people do

1259
00:59:18,880 --> 00:59:22,280
Speaker 2: you rely on to help you set you know, the

1260
00:59:22,320 --> 00:59:29,280
Speaker 2: initial prices. I look at some cars, you know, just

1261
00:59:28,960 --> 00:59:32,080
Speaker 2: just from my experience as a kid who love, for example,

1262
00:59:32,360 --> 00:59:36,000
Speaker 2: the Lamborghini Cuntosh or the Ferrari threeh eight, you know,

1263
00:59:36,120 --> 00:59:39,160
Speaker 2: and there were times when they were going for twenty

1264
00:59:39,200 --> 00:59:42,120
Speaker 2: five thousand dollars and then times when they were going

1265
00:59:42,200 --> 00:59:46,520
Speaker 2: for two fifty and more. So, who do you rely

1266
00:59:46,600 --> 00:59:47,960
Speaker 2: on or what do you rely on to get the

1267
00:59:48,040 --> 00:59:50,720
Speaker 2: data to price these vehicles well?

1268
00:59:51,080 --> 00:59:54,360
Speaker 5: As I'm sure you're aware, Miekam has been in this

1269
00:59:54,480 --> 00:59:57,800
Speaker 5: business for thirty five years and we are the largest

1270
00:59:57,800 --> 01:00:01,720
Speaker 5: collector car auction company in the world worlds selling roughly

1271
01:00:01,800 --> 01:00:06,080
Speaker 5: fifteen thousand cars a year at live auction for a

1272
01:00:06,080 --> 01:00:08,920
Speaker 5: little over eight hundred million dollars. So primarily we rely

1273
01:00:09,000 --> 01:00:12,480
Speaker 5: on our own expertise and our own knowledge of the market.

1274
01:00:12,800 --> 01:00:14,880
Speaker 5: But all of the cars that come to our auction

1275
01:00:14,960 --> 01:00:19,960
Speaker 5: are consigned cars. We're an auctioneer selling consignment cars for collectors,

1276
01:00:20,480 --> 01:00:24,040
Speaker 5: and collectors have an idea of their particular collection or

1277
01:00:24,080 --> 01:00:26,560
Speaker 5: their particular car, what they believe that's worth, and of

1278
01:00:26,600 --> 01:00:31,080
Speaker 5: course they keep abreast of the market for their particular

1279
01:00:31,160 --> 01:00:33,479
Speaker 5: area of interest, and.

1280
01:00:33,560 --> 01:00:35,040
Speaker 13: We work with the collectors.

1281
01:00:35,120 --> 01:00:40,320
Speaker 5: We combine our expertise and their expectations to help them

1282
01:00:40,400 --> 01:00:43,720
Speaker 5: understand what we think the pricing is in the current marketplace.

1283
01:00:44,880 --> 01:00:46,800
Speaker 1: David seems, you know when I spend a lot of

1284
01:00:46,800 --> 01:00:49,160
Speaker 1: time in Carmel, and you know during car Week there'll

1285
01:00:49,200 --> 01:00:51,400
Speaker 1: be people from all over the world, and a lot

1286
01:00:51,440 --> 01:00:56,160
Speaker 1: of Italians in particular. Who comes to the Monterey Peninsula

1287
01:00:56,400 --> 01:00:59,640
Speaker 1: here in August for all of these auctions, it seems

1288
01:00:59,640 --> 01:01:01,160
Speaker 1: like it's a international affair.

1289
01:01:02,440 --> 01:01:05,200
Speaker 5: Yeah, will do sixteen auctions this year, and I would

1290
01:01:05,240 --> 01:01:09,960
Speaker 5: say of those sixteen, three of them our national events.

1291
01:01:09,960 --> 01:01:13,280
Speaker 5: Most of them are more regional in scope Kassimi, Florida.

1292
01:01:13,320 --> 01:01:16,280
Speaker 5: Of course, the world's largest collector car auction in January

1293
01:01:16,480 --> 01:01:20,640
Speaker 5: is a national and somewhat international event. Our second biggest

1294
01:01:20,640 --> 01:01:23,760
Speaker 5: event in Indianapolis, Indiana in the Spring Classic in May,

1295
01:01:24,120 --> 01:01:28,920
Speaker 5: again an international event, mostly national, but certainly not regional.

1296
01:01:29,360 --> 01:01:33,040
Speaker 5: Monterey is the one exception where I would say primarily

1297
01:01:33,200 --> 01:01:35,640
Speaker 5: it is international. Of course, there are a lot of

1298
01:01:35,800 --> 01:01:40,040
Speaker 5: US domestic buyers and sellers, but just folks that I

1299
01:01:40,200 --> 01:01:42,880
Speaker 5: talked to over the last three or four days and

1300
01:01:43,040 --> 01:01:47,600
Speaker 5: interviews that I've done from Germany, from France, from Italy,

1301
01:01:47,640 --> 01:01:49,360
Speaker 5: from Australia, from Great Britain.

1302
01:01:50,280 --> 01:01:51,840
Speaker 13: There are a lot of accidents at the auction.

1303
01:01:53,080 --> 01:01:57,000
Speaker 1: So is your market any predictor for the overall economy

1304
01:01:57,040 --> 01:01:59,720
Speaker 1: because here on Global Wall Street, Dave, we've been talking

1305
01:01:59,760 --> 01:02:02,160
Speaker 1: about a recession here for will more than a year.

1306
01:02:02,440 --> 01:02:05,000
Speaker 1: How does your market simply reflect what's going on in

1307
01:02:05,000 --> 01:02:05,560
Speaker 1: the economy.

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01:02:06,640 --> 01:02:09,520
Speaker 5: Well, what we've seen, and this would go back to

1309
01:02:09,800 --> 01:02:13,880
Speaker 5: I would say pre two thousand and eight even and

1310
01:02:13,920 --> 01:02:16,680
Speaker 5: in some cases pre nineteen ninety one, when we had

1311
01:02:17,080 --> 01:02:20,720
Speaker 5: significant issues in the economies before. What we've seen is

1312
01:02:20,720 --> 01:02:24,480
Speaker 5: that the collector car market is relatively resilient and that's because,

1313
01:02:24,640 --> 01:02:27,800
Speaker 5: just antecdotally in my mind, when things are going very

1314
01:02:27,920 --> 01:02:34,960
Speaker 5: very well, investors collectors feel very secure in their financial environment,

1315
01:02:35,080 --> 01:02:38,439
Speaker 5: very flushed with cash, if you will, and it's time

1316
01:02:38,520 --> 01:02:40,840
Speaker 5: to maybe use some of that to invest.

1317
01:02:40,480 --> 01:02:43,479
Speaker 13: In something in a collector car, something that I've wanted

1318
01:02:43,520 --> 01:02:45,040
Speaker 13: for a very, very long time.

1319
01:02:45,600 --> 01:02:49,320
Speaker 5: And conversely, when things are going very poorly, we see

1320
01:02:49,320 --> 01:02:51,120
Speaker 5: a lot of money that comes out of the market

1321
01:02:52,160 --> 01:02:55,440
Speaker 5: because of the uncertainty and the fear that's in the markets.

1322
01:02:55,880 --> 01:02:57,880
Speaker 5: And as money comes out of the market, that money

1323
01:02:57,920 --> 01:03:00,000
Speaker 5: is looking for a home. And as I mentioned previously,

1324
01:03:00,840 --> 01:03:04,520
Speaker 5: the collector car market has been a great alternative investment

1325
01:03:04,520 --> 01:03:06,920
Speaker 5: asset and you get to drive it on Sundays down

1326
01:03:06,960 --> 01:03:07,680
Speaker 5: to meet your friends.

1327
01:03:07,760 --> 01:03:08,920
Speaker 13: So a lot of.

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Speaker 5: Money we see come out of the market goes into

1329
01:03:11,360 --> 01:03:14,320
Speaker 5: collector cars during that period. So we've I don't know

1330
01:03:14,360 --> 01:03:17,280
Speaker 5: that we in the collector car business are an indicator

1331
01:03:18,080 --> 01:03:20,000
Speaker 5: of what might be going on in the economy, and

1332
01:03:20,040 --> 01:03:23,840
Speaker 5: I would certainly say we are relatively resilient to what

1333
01:03:23,920 --> 01:03:25,040
Speaker 5: goes on in the economy.

1334
01:03:25,240 --> 01:03:27,040
Speaker 1: All Right, Dave, thanks for joining us. I know it's

1335
01:03:27,040 --> 01:03:29,640
Speaker 1: been a busy, busy week. You just concluded out there

1336
01:03:29,680 --> 01:03:31,880
Speaker 1: on the Monterey Peninsula and for those car people out

1337
01:03:31,920 --> 01:03:34,320
Speaker 1: there who haven't been, it is a.

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01:03:34,160 --> 01:03:36,439
Speaker 2: Bucket list thing to do. It is a great week.

1339
01:03:36,600 --> 01:03:40,680
Speaker 2: They've major CEO of Meek Them Auctions. Thanks for listening

1340
01:03:40,720 --> 01:03:44,200
Speaker 2: to the Bloomberg Markets podcast. You can subscribe and listen

1341
01:03:44,240 --> 01:03:48,520
Speaker 2: to interviews at Apple Podcasts or whatever podcast platform you prefer.

1342
01:03:48,920 --> 01:03:52,160
Speaker 2: I'm Matt Miller. I'm on Twitter at Matt Miller nineteen

1343
01:03:52,240 --> 01:03:55,720
Speaker 2: seventy three. And I'm Paul Sweeney. I'm on Twitter at Ptsweeney.

1344
01:03:55,840 --> 01:03:58,480
Speaker 1: Before the podcast, you can always catch us worldwide at

1345
01:03:58,520 --> 01:03:59,520
Speaker 1: Bloomberg Radio