WEBVTT - Bonds, Markets, And ETFs (Podcast) 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney. Alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.520 --> 0:00:15.560 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:23.239 at Bloomberg dot com slash podcast. Matt was just calling 0:00:23.280 --> 0:00:26.360 out here in an I end screen the Bloomberg Index 0:00:26.400 --> 0:00:32.000 browser Bloomberg US corporate total return value year to date 0:00:32.720 --> 0:00:37.560 minus fourteen points six treasuries to minus fourteen point eight. 0:00:37.880 --> 0:00:40.960 I mean, what's going on? And that does inlets total 0:00:41.000 --> 0:00:44.080 return So not that it would have mattered because the 0:00:44.080 --> 0:00:49.040 coupons are so low. Yes, um, but it's harsh. And look, 0:00:49.080 --> 0:00:54.440 my mom and dad just retired this like month, and uh, 0:00:54.480 --> 0:00:56.720 I feel for them. I guess I'm gonna have to 0:00:56.760 --> 0:01:01.160 step up because they're broke now, you know, all right, 0:01:01.160 --> 0:01:03.760 Liz McCormick, Global Fixed Income and far In Exchange reporter 0:01:03.880 --> 0:01:06.280 joins us live here in a Bloomberg and after Broker studio. 0:01:06.360 --> 0:01:10.640 So Liz, again, these are numbers, these are performance numbers. 0:01:11.120 --> 0:01:13.200 You know your friends in the fixed income market have 0:01:13.800 --> 0:01:16.600 ever seen, never seen. Yeah, I mean some of the 0:01:16.680 --> 0:01:19.000 data how you splice and dice it is like at 0:01:19.040 --> 0:01:21.920 least the worst first half and kind of modern times 0:01:22.000 --> 0:01:24.280 call it. I was mentioning to Matt that Deutsche Bank 0:01:24.400 --> 0:01:26.920 had some great data back to the seventeen hundreds, like 0:01:26.959 --> 0:01:29.560 how bad it was. I mean, people just aren't Most 0:01:29.640 --> 0:01:32.319 people aren't used to this kind of beating up in bonds. 0:01:33.760 --> 0:01:36.000 I mean, do people in fixtion come to they try 0:01:36.040 --> 0:01:40.080 to call the bottom, like we hear equity trying to 0:01:40.120 --> 0:01:42.920 call the Yeah. And this is where I feel like 0:01:43.880 --> 0:01:46.200 I see the same dichotomy going on as you guys 0:01:46.240 --> 0:01:48.880 are talking all about in stocks. You know, is this 0:01:49.000 --> 0:01:52.200 like a bear rally? Is it over? The same thing 0:01:52.240 --> 0:01:55.640 in bonds? People saying, oh, we've seen the peak and yields, 0:01:55.800 --> 0:01:59.640 you know, all the FED pricing for hikes is in there. 0:01:59.760 --> 0:02:03.120 The worst is over. And then other people saying, wait 0:02:03.160 --> 0:02:05.280 a minute. You know, like three point five on the 0:02:05.320 --> 0:02:08.200 tenure was the highest we've seen. But like listen, you know, 0:02:08.320 --> 0:02:10.079 I've been around for a while. Like the folks of 0:02:10.120 --> 0:02:12.440 Bridgewater said to me a few times, we think rates 0:02:12.440 --> 0:02:14.160 can go a lot higher. Ten years, could go to 0:02:14.240 --> 0:02:16.520 four percent or more. You know, FED has just got 0:02:16.520 --> 0:02:18.880 a lot more tightening to do. So there is these battles, 0:02:18.919 --> 0:02:22.079 I think in both asset classes. You know, we'll see 0:02:22.080 --> 0:02:24.600 who wins in the end, right, maybe next year or sometime. 0:02:24.880 --> 0:02:28.400 I met a guy over the weekend, eighty three years old, 0:02:28.400 --> 0:02:31.920 fascinating guy, and he watches and listens to us every day. 0:02:32.240 --> 0:02:35.840 He trades bonds every night. So at the end of 0:02:35.840 --> 0:02:37.880 the day he'll make a trade, put on a position, 0:02:37.919 --> 0:02:41.720 and then the next day. No one nobody does that, right, 0:02:42.000 --> 0:02:44.160 nobody does that. My father, who I've been doing this 0:02:44.240 --> 0:02:46.560 for so long, still says to me, can you explain 0:02:46.560 --> 0:02:48.360 to me again what a bond is? You know what 0:02:48.400 --> 0:02:51.120 I mean? All the bond traders I know, all the 0:02:51.160 --> 0:02:53.320 guys I know who worked in firms on the street 0:02:53.400 --> 0:02:57.280 have long since retired or quit, right exactly. I remember 0:02:57.360 --> 0:02:59.800 my old boss, Ward McCarthy saying, years back when there 0:02:59.880 --> 0:03:03.239 was yield, saying, I bought you know, zero coupons ages 0:03:03.280 --> 0:03:05.160 ago and that put my kids through college, you know, 0:03:05.240 --> 0:03:07.160 like it used to be such great rates and those 0:03:07.160 --> 0:03:10.000 are just gone. Well. Actually, Scott Miner did say he's 0:03:10.040 --> 0:03:15.040 buying the strips right twenty years, which is um kind 0:03:15.080 --> 0:03:17.800 of jargony. But I guess that's when you strip out 0:03:17.960 --> 0:03:21.840 the coupon, you can trade the maturities and then you 0:03:21.880 --> 0:03:24.520 can also trade the each due date of the coupon. 0:03:24.560 --> 0:03:26.640 It's like a bullet, you know, it's it's just like 0:03:26.680 --> 0:03:29.400 a single coupon in a sense, just what you get 0:03:29.440 --> 0:03:31.600 at the end. But yeah, they're stripping and I saw that, 0:03:31.680 --> 0:03:33.679 and we'll see. I mean, if we're in this era 0:03:33.760 --> 0:03:35.800 that we're never going to get rates too high again, 0:03:35.840 --> 0:03:38.840 which I'm not sure I buy into yet. People who 0:03:39.080 --> 0:03:42.800 bought strips are locked in tansit over three percent are 0:03:42.840 --> 0:03:45.080 going to be pretty happy if you know here we are. 0:03:45.160 --> 0:03:46.920 You know, in a couple of years, the Feds fighting 0:03:46.920 --> 0:03:50.040 in a recession cutting rates again. Is that, by the way, 0:03:50.160 --> 0:03:53.360 kind of a consensus that the Fed is gonna raise 0:03:53.480 --> 0:03:56.600 rates high enough to fight inflation because they now they 0:03:56.680 --> 0:04:00.280 have to. That's they're locked in. And not only is 0:04:00.280 --> 0:04:02.920 it one of their actual mandates, but and then we're 0:04:02.920 --> 0:04:05.000 gonna have a recession in three and they're gonna have 0:04:05.000 --> 0:04:07.119 to cut right back down again. Well, I would say, 0:04:07.160 --> 0:04:09.880 like the timing of the recession gets nebulous. A lot 0:04:09.880 --> 0:04:12.920 of people say late I've heard a few say maybe 0:04:13.040 --> 0:04:16.760 there's enough cash in the system. Corporations are much better 0:04:16.800 --> 0:04:19.920 it could be. But I think in general, Matt, you're 0:04:20.040 --> 0:04:24.200 right that it's fast, up front loaded quick, and then 0:04:24.440 --> 0:04:26.800 the FED is going to have to eventually not too 0:04:26.839 --> 0:04:30.000 long be cutting rates again because they're trying to manage. 0:04:30.480 --> 0:04:32.560 And like Pal said, he's gone from you know, like 0:04:32.960 --> 0:04:35.840 soft landing soft dish to saying, well, you know, we 0:04:36.160 --> 0:04:38.760 could have a slowd You know, he's trying, but you know, 0:04:38.839 --> 0:04:40.920 you raise rates this fast. And I know there's not 0:04:40.960 --> 0:04:43.359 a lot of floating rate debt out there, but I 0:04:43.440 --> 0:04:45.840 have a home equity line of credit and I was like, oh, 0:04:46.000 --> 0:04:48.400 they raised that rate pretty darned fast, you know, to me. 0:04:48.520 --> 0:04:52.960 So not only that, um Joel Levington wrote a piece 0:04:53.040 --> 0:04:56.720 about the automakers. Now they're facing a one hundred and 0:04:56.760 --> 0:05:01.080 forty five billion dollar wall of debt and it's not like, uh, 0:05:01.160 --> 0:05:04.320 you know, they can just hold it right, They're they're 0:05:04.320 --> 0:05:07.080 constantly rolling over. So now they're going to look at 0:05:07.160 --> 0:05:11.279 two d fifty three hundred basis points of increased costs. This, 0:05:11.360 --> 0:05:13.640 by the way, adds to inflation because they've got to 0:05:13.680 --> 0:05:17.159 pass that along to the customer. But Uh, it's it's 0:05:17.200 --> 0:05:19.919 tough for for companies as well. Yeah, I think everyone 0:05:19.960 --> 0:05:22.600 you're going to feel this very quickly. Now. The Fed said, 0:05:22.600 --> 0:05:26.120 we're really watching financial conditions, which is kind of nebulous. 0:05:26.279 --> 0:05:28.400 You know, how tight do they have to get? You know, 0:05:28.480 --> 0:05:30.760 not just what's the hard rate the Fed funds has 0:05:30.800 --> 0:05:32.680 to get to, but that's what they're watching. How does 0:05:32.720 --> 0:05:35.360 this filter through? Look at mortgage rates over six percent? 0:05:35.480 --> 0:05:37.560 You know, they seem like so low for so long. 0:05:37.600 --> 0:05:40.440 The housing market hasn't imploded yet, but for once, not 0:05:40.520 --> 0:05:42.559 that I'm looking to buy, but you see on Zeala 0:05:42.640 --> 0:05:45.960 finally price reduction. We didn't see that forever, So I 0:05:46.000 --> 0:05:48.520 think it's gonna sale. I know people who wanted to 0:05:48.560 --> 0:05:51.360 sell and now they can't, so they got to rent. Yeah, well, 0:05:51.800 --> 0:05:54.159 you know what, rents are crazy right, going up in price, 0:05:54.240 --> 0:05:57.000 the you know, leases up. I've heard so many people complaining, 0:05:57.000 --> 0:06:00.320 oh the language putting up my rent is too damn high. 0:06:00.800 --> 0:06:02.640 The rent is too damn hon So if you move, 0:06:02.800 --> 0:06:04.760 is that another reason to move to Austin, Texas? Or 0:06:05.240 --> 0:06:07.640 I don't think pricing is good in Austin time. I 0:06:07.680 --> 0:06:09.240 don't think it is either, especially you don't get a 0:06:09.279 --> 0:06:11.080 special rates because it's Texas. So where do you have 0:06:11.120 --> 0:06:13.719 to go? What we could go Columbus, Ohio. It's a 0:06:13.760 --> 0:06:16.280 great place to live in, very affordable and people are 0:06:16.320 --> 0:06:21.720 just wonderful and no accent, so it's the only place 0:06:21.720 --> 0:06:24.400 in the country where there's absolutely no regional accents. They 0:06:24.480 --> 0:06:26.400 use people from the great state of Ohio often for 0:06:26.440 --> 0:06:31.320 newscasters and Matt Miller case in point. All right, Liz McCormack, 0:06:31.320 --> 0:06:33.479 thanks so much for joining us. Lis mccormer. She covers 0:06:33.560 --> 0:06:36.560 all things global fixed income, foreign exchange reporter. She does 0:06:36.600 --> 0:06:40.800 it all for Bloomberg News, and most important, she is 0:06:40.880 --> 0:06:44.040 in the Bloomberg Interactor Broker studio today, So we appreciate that. 0:06:49.520 --> 0:06:53.720 Matt Our next guest is all in the state of Wisconsin. 0:06:53.800 --> 0:06:57.080 PhD in Economics from the University of Wisconsin Milwaukee, j 0:06:57.279 --> 0:07:00.760 d from Marquette, and an undergrad and finance from the 0:07:00.839 --> 0:07:03.279 University of Wisconsin and Madison. We're gonna get this guy 0:07:03.320 --> 0:07:05.000 out of state once in a while. I mean, he's 0:07:05.080 --> 0:07:08.320 all in. It's also part time instructor at Marquette. Uh 0:07:08.520 --> 0:07:12.760 DR Brian Jakebison's senior investment strategist Offspring Global investments. So, Brian, 0:07:12.760 --> 0:07:16.280 you don't mind the winters in Wisconsin, you know what 0:07:16.280 --> 0:07:19.280 I mean? Life is all about trade off. I guess 0:07:19.280 --> 0:07:21.280 that's just the tradeoff you have to make for living 0:07:21.280 --> 0:07:24.360 in the land of milk and honey, or I guess 0:07:24.560 --> 0:07:28.760 milk and sausage or milk and cheese. I wish this 0:07:28.880 --> 0:07:31.200 market was all about trade offs. Yes, it seems like 0:07:31.280 --> 0:07:33.400 no matter what you own, your down I mean, I 0:07:33.400 --> 0:07:35.720 guess if you if you if you just had oil modity, 0:07:35.800 --> 0:07:39.640 if you have some commodities, you're okay. So, Brian, you know, 0:07:39.720 --> 0:07:42.280 one of the things that people start talking about, well, 0:07:42.320 --> 0:07:43.760 maybe I'm we're just hearing a little bit more of 0:07:43.800 --> 0:07:46.600 the last few weeks is trying to find a bottom, 0:07:47.200 --> 0:07:50.320 uh in these markets? Is that an exercise you go through? 0:07:50.400 --> 0:07:52.000 And if so, kind of what do you look for? 0:07:52.880 --> 0:07:56.200 How are you trading this market here? Well? You know, 0:07:56.440 --> 0:07:59.160 sometimes it feels like my workouts, you know, an exercise 0:07:59.200 --> 0:08:02.600 and utility. Um. And I think that, you know, trying 0:08:02.600 --> 0:08:04.520 to find the bottom is always going to be difficult 0:08:04.560 --> 0:08:08.040 because the market seems to be there to frustrate the 0:08:08.160 --> 0:08:13.080 expectations and ambitions of everybody. Um. But it does feel 0:08:13.080 --> 0:08:15.440 like we're trying to find a bottom, and since you 0:08:15.480 --> 0:08:17.920 know we can't pick one, we just have to I think, 0:08:18.000 --> 0:08:21.800 take a look at the broad thrust of the market, 0:08:22.160 --> 0:08:25.160 and it seems like some of the indicators are suggesting 0:08:25.200 --> 0:08:29.680 we're trying to find one here. Now who knows is 0:08:27.160 --> 0:08:31.520 it is it even lower than that? But all we 0:08:31.560 --> 0:08:34.440 know is that things look cheaper now than what they 0:08:34.440 --> 0:08:37.400 did back in u on January three, when we're at 0:08:37.400 --> 0:08:39.520 the peak. And so I think for longer term investors, 0:08:39.559 --> 0:08:42.080 for that kind of structural part of your portfolio, the 0:08:42.120 --> 0:08:45.000 strategic part um, that does suggest to us that there's 0:08:45.000 --> 0:08:47.760 some long term opportunities even if there could be some 0:08:47.840 --> 0:08:50.720 short term pain here. It's all about those trade offs, right, 0:08:50.800 --> 0:08:53.160 that long term gain maybe a little bit more short 0:08:53.280 --> 0:08:56.160 term pain. Do you go h do you go in 0:08:56.200 --> 0:09:00.760 for the traditional defensive um? You know, can't imagine you're 0:09:00.800 --> 0:09:09.520 buying utilities but consumer staples or healthcare? Healthcare? Yeah? You know. 0:09:09.800 --> 0:09:13.319 So we just published are the all Spring mid year 0:09:13.440 --> 0:09:16.600 Outlook and the theme was rolling with change, and I 0:09:16.640 --> 0:09:19.600 think that what is defensive now you need to really 0:09:19.640 --> 0:09:21.880 kind of change the way you think about it because 0:09:21.880 --> 0:09:24.920 of that interest rate sensitivity, Right, utilities do tend to 0:09:24.920 --> 0:09:27.840 be much more interest rate sensitive than say, consumer staples. 0:09:28.200 --> 0:09:31.360 Both are traditionally viewed as being more defensive. It's just 0:09:31.520 --> 0:09:35.680 one has a higher loading on rate risk than the other. 0:09:35.720 --> 0:09:39.720 And so actually we are overweight consumer staples as somewhat 0:09:39.760 --> 0:09:44.320 of uh not necessarily a barish view, but as a 0:09:44.480 --> 0:09:47.520 bit more of a defensive view on the markets, at 0:09:47.600 --> 0:09:49.680 least here in the short term. I do have to say, though, 0:09:49.880 --> 0:09:53.760 we are warming up to areas like financials or home builders, 0:09:53.800 --> 0:09:57.560 those parts that have sold off pretty substantially here or 0:09:57.600 --> 0:10:01.840 haven't performed as you would have expected just given the 0:10:01.840 --> 0:10:06.600 FEDS change and stamps. You know, looking at this upcoming 0:10:06.679 --> 0:10:09.439 earning season, so I think July fifteen fishes when it 0:10:09.520 --> 0:10:12.920 kicks off. You know, we look at inflation x food 0:10:12.960 --> 0:10:17.320 and energy, Well, what's earnings x energy um is possible 0:10:17.360 --> 0:10:19.600 that it would be a negative three You're a year 0:10:19.760 --> 0:10:22.280 just excluding that one sector. So you know that it 0:10:22.280 --> 0:10:24.400 seems like there's a lot of areas that there's some 0:10:24.480 --> 0:10:28.640 decent opportunities if you focus on looking for maybe the 0:10:28.640 --> 0:10:30.480 parts that have been beaten down the most but still 0:10:30.520 --> 0:10:33.840 have decent fundamentals that can pull you through this. Yeah, 0:10:33.840 --> 0:10:35.679 Bron I'm glad you mentioned earnings because we're going to 0:10:35.760 --> 0:10:40.160 switch into that earnings mode very soon. Give us a 0:10:40.200 --> 0:10:42.640 sense of kind of how you're thinking about evaluation for 0:10:42.679 --> 0:10:46.079 these markets. Some people are suggesting that it's obviously a 0:10:46.160 --> 0:10:48.200 lot more tracted than it was at the beginning of 0:10:48.200 --> 0:10:51.600 the year from evaluation perspective, But is it cheap? How 0:10:51.600 --> 0:10:53.240 do you think about that? And no one's really pulled 0:10:53.320 --> 0:10:57.600 earnings forecast down, at least not dramatically. Yeah, that's been 0:10:57.760 --> 0:10:59.760 a puzzling thing as to why we haven't seen the 0:10:59.760 --> 0:11:02.360 ear and forecasts come down. And I think that's why 0:11:02.360 --> 0:11:05.120 people can make the argument that, well, just the price decline, 0:11:05.120 --> 0:11:08.319 it's just that things are cheaper now. The problem is 0:11:08.320 --> 0:11:10.880 is I think the market is saying that the fundamentals 0:11:10.880 --> 0:11:14.440 has also declined. Right, So it's yes, things are cheaper 0:11:14.480 --> 0:11:17.160 based on price, but maybe it's also cheaper based on 0:11:17.480 --> 0:11:21.000 value if the value has declined in tandem. And when 0:11:21.000 --> 0:11:23.840 we like interest rate in just some of your typical 0:11:24.080 --> 0:11:28.400 market multiples, you know, we've seen the pe come down, 0:11:28.720 --> 0:11:31.480 but at the same time, yields have gone up, and 0:11:31.520 --> 0:11:33.880 so it's been almost a bit of a wash from 0:11:34.080 --> 0:11:38.440 the pure market multiple perspective, and as a result, the 0:11:38.480 --> 0:11:40.360 way that we're trying to position things is be a 0:11:40.360 --> 0:11:43.520 little bit more just broadly diversified, and then within each 0:11:43.520 --> 0:11:45.920 one of the sectors, work with some of our tremendous 0:11:46.000 --> 0:11:48.720 teams like and Miletti. She's the head of our fundamental 0:11:48.760 --> 0:11:51.560 equity teams. They're the ones who are trying to identify 0:11:51.760 --> 0:11:54.040 value there. Yeah, and so here it all springs. You know, 0:11:54.040 --> 0:11:57.160 We're very fortunate to have her and her teams here 0:11:57.240 --> 0:12:00.720 to try to identify some of those areas within each 0:12:00.760 --> 0:12:04.720 sector about who might have that quality of earnings to 0:12:05.040 --> 0:12:07.360 kind of cut through some of these cyclical headwinds that 0:12:07.440 --> 0:12:09.760 we might be facing. By the way, Uh, Brian just 0:12:09.800 --> 0:12:12.880 got about thirty seconds here, But I see you like China, 0:12:13.040 --> 0:12:14.800 and it strikes me that they're kind of going in 0:12:14.800 --> 0:12:17.080 the other direction or they haven't, you know, been in 0:12:17.120 --> 0:12:20.000 a situation where inflation is high and they're raising rates. 0:12:20.040 --> 0:12:21.880 They've still got to come out of lockdown. Is that 0:12:21.960 --> 0:12:25.000 kind of a reopening play? It really is. Yeah. I 0:12:25.160 --> 0:12:29.080 think sentiments shifted so much so negatively against them. Who 0:12:29.120 --> 0:12:30.960 knows how long will hold on to it. But we 0:12:31.040 --> 0:12:33.360 do like China road to to the US. They got 0:12:33.360 --> 0:12:37.120 the fiscal impulse, monetary stimulus, and now the reopening. We 0:12:37.200 --> 0:12:40.000 think that could bode well for them. All right, Brian, 0:12:40.160 --> 0:12:42.880 great great stuff. I always appreciate getting some of your 0:12:42.880 --> 0:12:46.880 thoughts here. Dr Brian Jacobson's senior investment strategists off Spring 0:12:47.040 --> 0:12:51.120 Global Investments. Uh, they are all in Wisconsin. I mean, 0:12:51.160 --> 0:12:54.560 I'm talking about it, Marquette, that's a Milwaukee is an 0:12:54.679 --> 0:12:57.800 in Wisconsin is Yeah. They they all started. A lot 0:12:57.840 --> 0:13:00.679 of them started there at Strong Funds, which is a 0:13:00.679 --> 0:13:04.200 big was a big mutual fund out there in suburban Milwaukee. 0:13:04.280 --> 0:13:06.720 It was a must go to visit if you were 0:13:06.760 --> 0:13:08.560 sell side equity analyst. He had to go out se 0:13:10.120 --> 0:13:12.240 a million times, a million times. It's a it's a 0:13:12.280 --> 0:13:15.080 great money town, great money market town. There's lots of 0:13:15.679 --> 0:13:21.360 good folks. They're managing institutional money. Well. When you think 0:13:21.400 --> 0:13:25.040 about one of the great success stories in the US 0:13:25.080 --> 0:13:27.560 in terms of the growth of you know, certain cities, 0:13:27.559 --> 0:13:30.400 certain metroplexes around the country, Atlanta's got to be at 0:13:30.400 --> 0:13:32.880 the top of your list. It's just been such a 0:13:32.920 --> 0:13:36.320 great growth story for so long. So many great companies 0:13:36.559 --> 0:13:39.160 like Delta Airlines and home Depot and so on, and 0:13:39.160 --> 0:13:42.040 so forth, they hosted the Olympics. UH, just a great 0:13:42.040 --> 0:13:44.040 success story. And so of course we need to put 0:13:44.080 --> 0:13:46.320 some numbers around that. And when you want to do that, 0:13:46.800 --> 0:13:49.280 you go to Chinpey a Bloomberg News and Matt Winkler, 0:13:49.360 --> 0:13:53.480 who is editor in chief emeritus and founder of Bloomberg News, 0:13:53.600 --> 0:13:55.440 to kind of put some numbers around that, put some 0:13:55.480 --> 0:13:58.439 context around that. And they certainly have Matt include joint 0:13:58.480 --> 0:14:02.319 us here in our Bloomberg Interactive Brokers studio. So, Matt, Atlanta, Georgia, 0:14:02.559 --> 0:14:04.960 what's the key one of the key takeaways from your 0:14:05.040 --> 0:14:08.439 perspectives as you looked at the data as to why 0:14:08.600 --> 0:14:11.000 Atlanta has been such a good success story. So it 0:14:11.040 --> 0:14:16.680 goes back to Maynard Jackson became the first black mayor 0:14:17.000 --> 0:14:21.360 of any city, major city in the South, and he 0:14:21.680 --> 0:14:27.000 had two very big initiatives that stand the test of time. 0:14:27.160 --> 0:14:32.800 One was massive public works, which included the renovation of 0:14:32.880 --> 0:14:36.440 the airport that is the busiest in the world uh 0:14:36.480 --> 0:14:39.600 and has been renamed with his name on it because 0:14:39.640 --> 0:14:43.240 of that renovation. UH. He also initiated a rail line 0:14:43.280 --> 0:14:45.160 that goes from one into the city to the other, 0:14:45.240 --> 0:14:49.280 so everybody can get from here to there without any difficulty. 0:14:49.800 --> 0:14:52.160 But the other major thing was he wanted to make 0:14:52.160 --> 0:14:57.880 sure Atlanta would be forever diverse. And with Atlanta being 0:14:57.920 --> 0:15:03.840 today uh the second largest black majority UM city in 0:15:03.880 --> 0:15:09.520 the United States. UM, he initiated a it was persuasion 0:15:09.680 --> 0:15:15.000 really requirement that everybody hire at least thirty of their 0:15:15.040 --> 0:15:19.960 workforce from the black local community. And that also stood 0:15:19.960 --> 0:15:22.840 the test of time. So today when you look at 0:15:22.880 --> 0:15:26.320 business in Atlanta, it is diverse, UH. And in fact, 0:15:26.480 --> 0:15:30.160 Atlanta is really more diverse than any other city that way. 0:15:30.240 --> 0:15:34.160 And so those two things, if you like, UH, infrastructure, 0:15:34.240 --> 0:15:40.120 public works, and diversity have combined to make Atlanta, UM 0:15:40.160 --> 0:15:43.600 the best performing city right now in the United States. 0:15:43.600 --> 0:15:45.680 And we know that because we have these credit measures 0:15:45.720 --> 0:15:51.400 that show that Atlanta liabilities are falling, personal incomes going up, 0:15:51.680 --> 0:15:58.000 and UH and so UM are so many other measures 0:15:58.160 --> 0:16:01.040 of performance for the city. So it's going in the 0:16:01.120 --> 0:16:05.920 right direction. Is anyone else UM taking note or other 0:16:06.040 --> 0:16:09.560 mayors looking at this as a template for what they 0:16:09.600 --> 0:16:12.520 can do in their cities, especially in you know, cities 0:16:12.520 --> 0:16:17.800 that have historically have had problems like Chicago or Baltimore. Well, UM, 0:16:17.880 --> 0:16:20.680 I can't say I've done the Grand City tour of 0:16:20.760 --> 0:16:27.160 late partly because of covid um you know, impediments. But um, 0:16:27.240 --> 0:16:30.000 you know, I was in Boston last week catching up 0:16:30.040 --> 0:16:36.560 with another new mayor, uh Michelle wou and mentioned Atlanta, 0:16:36.640 --> 0:16:39.160 and she got excited and she said, we like what 0:16:39.200 --> 0:16:42.120 we see down there. So, um it is. It is 0:16:42.160 --> 0:16:45.160 an exemplar, There's no question about it. It's interesting, Matt, 0:16:45.280 --> 0:16:47.720 just thinking about the success story of Atlanta, which has 0:16:47.760 --> 0:16:51.040 been generations into making you think about just in the pandemic, 0:16:51.400 --> 0:16:54.800 how we've seen, you know, a migration of people in 0:16:54.880 --> 0:16:59.080 this country to other similar type cities, whether it's a 0:16:59.200 --> 0:17:02.960 Nashville or or Charlotte or certainly Miami in on a 0:17:03.000 --> 0:17:07.600 greater scale. How did Atlanta deal with the pandemic That 0:17:07.680 --> 0:17:10.760 does anything unique there? Or were they hit as well 0:17:10.800 --> 0:17:12.880 as anybody and they're trying to recover as well as anybody. 0:17:12.880 --> 0:17:15.680 They had the same issues of every other city. Um, 0:17:15.880 --> 0:17:19.800 and they also had you know, the if you like 0:17:20.880 --> 0:17:26.159 the polarized politics, because as you know, Georgia is in 0:17:26.200 --> 0:17:32.199 fact politically led by Republican legislature and governor. In Atlanta, 0:17:32.760 --> 0:17:37.520 um is as I said, it's been Democrats since uh well, 0:17:37.680 --> 0:17:39.600 going all the way back in time. Really, but it's 0:17:39.600 --> 0:17:43.560 been black Democrat and uh, they don't agree on a 0:17:43.560 --> 0:17:48.720 lot of big issues. And they certainly had difficulty dealing 0:17:48.720 --> 0:17:51.760 with the pandemic having to do with things like masking 0:17:51.880 --> 0:17:54.760 and you know, when businesses were going to be open 0:17:54.880 --> 0:17:57.760 in schools and everything else. So every city has had 0:17:57.800 --> 0:18:01.760 those issues. Uh, probably Atlanta I had to contend with 0:18:01.800 --> 0:18:08.960 a much more difficult political um agenda. But Atlanta being Atlanta, 0:18:09.240 --> 0:18:13.159 it managed to, you know, deal with these difficulties and 0:18:13.200 --> 0:18:15.760 deal with them successfully to the extent that you know, 0:18:16.080 --> 0:18:22.479 it's a uh, a bastion of diversity and will probably 0:18:22.520 --> 0:18:25.399 continue to be so. I couldn't believe it when, uh 0:18:25.680 --> 0:18:28.160 they tried to make it illegal to pass out bottles 0:18:28.200 --> 0:18:31.000 of water to like single mothers and lines to vote. 0:18:31.000 --> 0:18:35.440 What what a mean spirited thing to do. Uh, they 0:18:35.520 --> 0:18:38.760 generate I think you said two thirds of the GDP 0:18:38.960 --> 0:18:41.400 for Georgia. Is it possible that Atlantic could pick two 0:18:41.400 --> 0:18:45.359 thirds of the congressional representatives. No, we're not there yet. 0:18:46.680 --> 0:18:49.360 We're not there yet. But look, Atlanta was the reason 0:18:49.880 --> 0:18:53.399 that Georgia for the first time in thirty years went 0:18:53.720 --> 0:18:57.160 for a Democrat in the White House. Um, that's Faulton 0:18:57.320 --> 0:19:01.040 and Dekalp County, those two counties to account for Atlanta, 0:19:01.240 --> 0:19:05.040 and uh, you know, it's the reason that the senators 0:19:05.440 --> 0:19:09.720 from Georgia are also Democrat and it's the reason that 0:19:10.000 --> 0:19:12.120 you know, we see all these stories of companies leaving 0:19:12.160 --> 0:19:17.560 Illinois to go, um to Texas and other states. But 0:19:17.760 --> 0:19:21.240 companies headquartered in Atlanta are very happy. I know from um, 0:19:21.280 --> 0:19:25.000 you know the companies I cover. Porscha absolutely loves being there. 0:19:25.000 --> 0:19:29.080 But then they have much bigger, famous corporations that are 0:19:29.119 --> 0:19:32.119 happy and not leaving, right correct. Um. You know, In 0:19:32.200 --> 0:19:36.840 fact you mentioned at the outset Delta and home Depot, 0:19:36.880 --> 0:19:39.720 those are the two. Those two companies are the best 0:19:39.760 --> 0:19:43.120 performing in their global industries. You know, if you look 0:19:43.160 --> 0:19:46.959 at Delta every which way you look at it, Delta 0:19:47.200 --> 0:19:51.840 is the best airline from a market perspective or investment 0:19:52.200 --> 0:19:56.240 perspective in the world. And if you look at home Depot, uh, 0:19:56.320 --> 0:19:58.600 you know, look at their sales performance, it's it's really 0:19:58.640 --> 0:20:02.080 the same thing. Home Depot does better than any other company. 0:20:02.200 --> 0:20:07.399 So yes, they're very happy. Where they are happy is 0:20:07.440 --> 0:20:11.400 a relative term, but um, yeah, where they're situated is 0:20:11.400 --> 0:20:16.159 is uh is good for them, particularly because the airport. Um. 0:20:16.200 --> 0:20:19.919 And that's really probably the best part of this is 0:20:20.000 --> 0:20:23.680 that the Atlanta Airport has come out of COVID nineteen 0:20:24.480 --> 0:20:28.240 UM performing better than any other airport in the world. 0:20:29.400 --> 0:20:31.600 It's and the biggest airport in the world. I didn't 0:20:31.600 --> 0:20:33.720 know that before I read this. I figured in terms 0:20:33.760 --> 0:20:37.120 of traffic. Yeah, oh, hair or Charles de gaul Um, 0:20:38.240 --> 0:20:40.200 I just want to quickly get your take on or 0:20:40.880 --> 0:20:44.160 point out that Georgia Shirley must be one of the 0:20:44.160 --> 0:20:49.159 trigger states, right, and we had this the uh, you know, 0:20:49.240 --> 0:20:52.000 to really emotional days I think for the whole country 0:20:52.080 --> 0:20:56.320 on Thursday and Friday because of the Supreme Court. Um. 0:20:56.400 --> 0:20:58.240 What are we hearing from companies about how they're going 0:20:58.280 --> 0:21:00.840 to deal deal with this? Well, what you've heard so far, 0:21:01.080 --> 0:21:06.840 and we've reported this at Bloomberg pretty extensively, which is that, uh, 0:21:07.000 --> 0:21:10.800 while companies have not for the most part, been explicit 0:21:11.000 --> 0:21:15.000 in condemning the Supreme Court decision, what they have done 0:21:15.200 --> 0:21:18.919 instead is say publicly that they will do whatever it 0:21:19.000 --> 0:21:24.800 takes to pay for the reproductive care of their employees. 0:21:24.840 --> 0:21:27.040 In other words, they will do whatever it takes to 0:21:27.119 --> 0:21:30.119 enable employees wherever they are in any of these states 0:21:30.200 --> 0:21:35.439 where um, you know, abortion is suddenly impossible or legal 0:21:35.880 --> 0:21:38.440 or both. Yep, they'll take care of it all right, Matt, 0:21:38.440 --> 0:21:45.720 thanks so much. We appreciate Matt Winkler, Bloomberg News. Here's 0:21:45.720 --> 0:21:49.120 some data for you. Since the US alone has sustained 0:21:49.160 --> 0:21:53.679 three weather and climate disasters, and by the end of 0:21:53.720 --> 0:21:56.720 this century, the US government predicts two trillion dollars per 0:21:56.840 --> 0:22:01.280 year in damages from hurricanes, wildfire's, flood, drought, severe storms, 0:22:01.440 --> 0:22:04.560 or earthquakes. Question is is there a way to take 0:22:04.560 --> 0:22:08.480 advantage of the disaster recovery efforts out there where you 0:22:08.640 --> 0:22:10.840 guessed it? There's an e t F for that. Andrew 0:22:10.880 --> 0:22:14.400 Chain and CEO of procure A m joins us UH. 0:22:14.440 --> 0:22:16.680 Andrew talked to us about an e t F that 0:22:16.840 --> 0:22:20.520 may benefit from, you know, recovery efforts for our disasters. 0:22:21.800 --> 0:22:23.480 First of all, thanks for having me. It's great to 0:22:23.520 --> 0:22:26.720 be back. And yeah, we're thrilled to talk about FEMA. 0:22:26.840 --> 0:22:30.000 It's our latest ETF from procure We launched this just 0:22:30.119 --> 0:22:34.440