Speaker 1: This is Bloomberg Business Week inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news. As it happened, Sloomberg
Speaker 1: Business Week with Carol Messer and Bloomberg Quick Takes. Tim
Speaker 1: Stinovic on Bloomberg Radio. Hi, everyone, Welcome to the weekend
Speaker 1: edition of Bloomberg Business Week. It was a shortened holiday
Speaker 1: trading week chuck full of news on inflation and big
Speaker 1: bank earnings, while the war in Ukraine marked the beginning
Speaker 1: of its eighth week. With that is our backdrop. Coming up,
Speaker 1: we're going to hear from the former finance Minister of
Speaker 1: Ukraine as the Kremlin sees peace talks at a dead end.
Speaker 1: Tim also ahead the CEO of Lamborghini on his company's
Speaker 1: response to that war in Ukraine and the luxury car
Speaker 1: maker's plan to deal with rising prices and supply chain.
Speaker 1: Snacks and speaking of cars, our cover story in this
Speaker 1: week's double issue of Bloomberg Business Week magazine looks at
Speaker 1: Ford's plan to tackle Tesla's dominance when it comes to
Speaker 1: electric vehicles. All of that to come. We begin with
Speaker 1: the ongoing war in Ukraine. Now the Durasco is the
Speaker 1: former Ukraine Minister of Finance. She held that post from
Speaker 1: sixteen during the initial Russian invasion occupation of Ukraine. She
Speaker 1: currently serves as executive director of Puerto Rico's Financial Oversight
Speaker 1: and Management Board. She joined us to discuss the future
Speaker 1: of Ukraine's economy. With Russia reportedly set to ramp up
Speaker 1: attacks on eastern Ukraine, Ukrainians are actually, you know, facing
Speaker 1: this with immense courage, and that courage is leading them
Speaker 1: to start rebuilding. So even in the towns of Ping
Speaker 1: and Buscha that have been destroyed recently, the work has
Speaker 1: begun already to remove debris, to build back the bridge
Speaker 1: that had been blown up, to restore, rebuild electricity, heat
Speaker 1: and water. The government is focused on getting planting started.
Speaker 1: This is the spring planting season for agriculture. As you know,
Speaker 1: Ukraine is one of the largest agricultural exporters in the world,
Speaker 1: and businesses are moving facilities to western Ukraine where the
Speaker 1: war has not had as much of an impact, and
Speaker 1: restarting manufacturing to the extent that they canada. So what
Speaker 1: you're seeing is this kind of response to the horrors
Speaker 1: and the tragedies with even greater courage and intent should
Speaker 1: we build we knew and normalize and so I think
Speaker 1: it's it's it's an amazing combination of of human dignity encourage.
Speaker 1: It's like hard to even get your head around that, right,
Speaker 1: I'm kind of in awe right that they're planning for
Speaker 1: the future and you know, moving forward, um with so
Speaker 1: many questions till yet to be answered. Natalie. I know
Speaker 1: your focus is, you know, economic and financial situations, but
Speaker 1: obviously all of that weaves into politics, military, economy, it's
Speaker 1: all interwoven. Having said that, how do you see this
Speaker 1: situation overall? Is the West at war with Russia already? Well,
Speaker 1: I think the important thing, Carol, is that Putin is
Speaker 1: that war with the West already, and he always has been,
Speaker 1: and he's been very clear about it. And so whether
Speaker 1: or not any of our Western allies believe that they
Speaker 1: are or not, the fact is that Putin believes he is,
Speaker 1: and so we are all in this together. This is
Speaker 1: about his attempt is not only to destroy Ukraine, which
Speaker 1: is clear a genocide of the Ukrainian people, which he's
Speaker 1: had published in articles, but it's also about destroying the
Speaker 1: liberal world order, the democratic world that we all take
Speaker 1: for granted every day and that enables us to live
Speaker 1: in in peace and freedom. And so we are fighting
Speaker 1: an autocrat who wishes to destroy our system. And that's why,
Speaker 1: that's why, you know, in the end, it really is
Speaker 1: up to all of the allies, up to the democratic
Speaker 1: nations of the world, to support Ukraine in this battle,
Speaker 1: because Ukraine has to prevail. If Ukraine does not prevail,
Speaker 1: we as a democratic world do not prevail. At this point,
Speaker 1: Can the Ukrainian president say, yep, I'm willing to give
Speaker 1: up this or if he does, is that a loss
Speaker 1: for the West overall? And and then it just means
Speaker 1: we will probably see President Putin come back in another
Speaker 1: aggressive mood sometime and move in sometime in the future. Well,
Speaker 1: I think that that's exactly what's happened. We all kind
Speaker 1: of said, just sit back. After he invaded an illegally
Speaker 1: annexed Crimea, then he invaded Gunbas. We held them to
Speaker 1: the line for eight years, but the war continued and
Speaker 1: it was not enough. Putin's aims are not territorial. Russia
Speaker 1: is an enormous country. It doesn't require any more territory force,
Speaker 1: population or frizz economy, this is not about territory, and um,
Speaker 1: I think the core thing for Western countries and for
Speaker 1: all of us is to enable Ukraine to prevail. And
Speaker 1: and that you know, that doesn't mean that they shouldn't
Speaker 1: be diplomatic talks, but it means that we should focus
Speaker 1: on giving Ukraine the weapons they need to defeat and
Speaker 1: to prevail in this war, the sanctions to reduce UH,
Speaker 1: the Russian ability to finance the war, getting our businesses
Speaker 1: to boycott the Russian economy and not finance this war
Speaker 1: against Ukraine, and then with that leverage, if in with
Speaker 1: that leverage, when they're prevailing, talks can take place and
Speaker 1: something can be achieved in those diplomatic talks. So be
Speaker 1: it pieces always welcome. But the first thing to focus
Speaker 1: on is not the talks and the outcome of the talks.
Speaker 1: The first thing is to focus on getting Ukraine strong
Speaker 1: enough to prevail with weapons, sanctions and boycott and then
Speaker 1: UH and then hoping that that enables talks to be successful. Okay, Natalie,
Speaker 1: does anybody anymore stand between the world and Vladimir Putin?
Speaker 1: Does anyone standing between I think there are those who
Speaker 1: are trying not to choose, and I think that it's
Speaker 1: it's it's quite sad if you look at a country
Speaker 1: like India, one of the largest greatest democracies in the world. Um,
Speaker 1: they're abstaining on critical Uan votes, and they are continuing
Speaker 1: to trade with Russia. They're continuing to buy Russian oil.
Speaker 1: They're continuing to avoid applying any sanctions. That was Natalie Torresco.
Speaker 1: She's the former Ukraine Minister of Finance. Him. She's got
Speaker 1: a fascinating background story. Yes she does. You know. She
Speaker 1: was born here in the US to Ukrainian parents. She
Speaker 1: was educated here in the US. After college, she worked
Speaker 1: for the US government, but then moved to Ukraine and
Speaker 1: she was working there with a hedge fund for years.
Speaker 1: So her insight on Ukraine is just incredible. Find out
Speaker 1: the latest though on the war in Ukraine. Just head
Speaker 1: to Bloomberg dot com. Coming up next, we're going to
Speaker 1: turn our attention to the world a big tech and
Speaker 1: a big name in the world of Twitter. It's not
Speaker 1: here's a hint. Well, I'm just gonna tell you it's
Speaker 1: not Elon Musk. We're actually talking about Jack Dorsey, remember him, Uh, yeah,
Speaker 1: you know, he and he and Elon Musk starting to
Speaker 1: see eye to eye when it comes to one thing bitcoin. Right, Yeah,
Speaker 1: why the ex social media boss is now trying to
Speaker 1: become bitcoin spiritual leader. You're listening to Bloomberg Business Week.
Speaker 1: This is Bloomberg. This is Bloomberg Business Week with Carol
Speaker 1: Messer and Bloomberg Quick Takes Tim Skinovik from Bloomberg Radio. Alright,
Speaker 1: for all of you have been listening and watching Bloomberg
Speaker 1: and reading stories on the Bloomberg terminal. You know that
Speaker 1: Wall Street investors have complained for years that Jack Dorsey
Speaker 1: has been unfocused and unsuited to managing publicly traded companies. Well,
Speaker 1: Dorsey apparently agrees with some of his critics. The CEO
Speaker 1: of block that's formally known as Square, I follow Square
Speaker 1: a lot. Cal It's hard for me to call meta
Speaker 1: Facebook two or Facebook meta that is, so you can tell.
Speaker 1: And x CEO of Twitter as of late last year,
Speaker 1: he's got no intention of focusing though on his duties
Speaker 1: in the C suite. Instead, he's become obsessed with bitcoins.
Speaker 1: Just a little bit for more and white Elon Musk's
Speaker 1: buddy is gazing into the future with laser eyes. We
Speaker 1: turned to Bloomberg News technology reporter Kurt Wagner, who joined
Speaker 1: us along with Bloomberg business Week editor Jill Weber. He
Speaker 1: is going all in on bitcoin. The artwork and the
Speaker 1: story is amazing. We get the big red leaser rise.
Speaker 1: Uh well you know, maybe not not yet though, Um,
Speaker 1: the implant phase it might still be coming, uh except
Speaker 1: on Twitter. But but Kurt, what is it? What is
Speaker 1: it all about? Like? What led to this transformation? I
Speaker 1: mean obviously he just left Twitter and just not that
Speaker 1: long ago, and in that time he has gone full bitcoin. Yeah.
Speaker 1: I think what started this whole idea was sort of
Speaker 1: looking at, you know, what comes next for this guy? Right?
Speaker 1: I mean, he's he's founded these two really successful companies. Um,
Speaker 1: he's kind of a controversial guy. He's he's sort of Um,
Speaker 1: despite all the that's been written about him and how
Speaker 1: prominent he is publicly, he still feels a little misunderstood. Right.
Speaker 1: And so there was this idea that I was going
Speaker 1: into this like, Okay, what's the next phase of Jack's life?
Speaker 1: And every single person I talked to was just like
Speaker 1: one word bitcoin, right, Like he is just fully invested, Um,
Speaker 1: he's emotionally invested. I got the sense that that was
Speaker 1: maybe even why he left Twitter, was that he was
Speaker 1: just no longer interested kind of dealing with the headache
Speaker 1: of running that company, and he was like, why would
Speaker 1: I do this when I could be doing bitcoin instead?
Speaker 1: And so this whole kind of, um, you know, focus
Speaker 1: on bitcoin started to really materialize. And then as I
Speaker 1: started talking to people about why he was in the
Speaker 1: bitcoin I feel like that's where it all started to
Speaker 1: fit into place. Here. It just fits a lot of
Speaker 1: the things that he truly cares about, um And and
Speaker 1: you know, it's just he's he's become the face of
Speaker 1: this kind of movement, and I just find it really interesting.
Speaker 1: And you we said bitcoin, full bitcoin, but not full crypto, right,
Speaker 1: Why why is he so for for full bitcoin but
Speaker 1: maybe not the rest of the landscape, that's right? Yeah,
Speaker 1: he In fact, he tweeted I don't like cryptocurrencies, which
Speaker 1: is kind of funny, right because he's the face of
Speaker 1: probably the most prominent one. But um, you know, for him,
Speaker 1: one of the things that's so appealing to bitcoin is
Speaker 1: this idea of real decentralization. Right, there is no company
Speaker 1: that controls bitcoin, it's not regulated by the government. These
Speaker 1: are all things that he is believe it or not,
Speaker 1: against even though he was just recently the CEO of
Speaker 1: two publicly traded companies. Is just very against this idea
Speaker 1: of authority and power being controlled by any one person
Speaker 1: or company. And so I think that appeals to him
Speaker 1: with Bitcoin in particular. And I think what he sees
Speaker 1: as a lot of these other cryptos are being backed
Speaker 1: by you know, venture capitalist and recent Horwitz been the
Speaker 1: most famous one, and he sees this idea of like, hey,
Speaker 1: people think these things are decentralized, but really they're being
Speaker 1: controlled by all the same vcs and power brokers that
Speaker 1: kind of control the Internet today, right, And so that's
Speaker 1: why he's so focused on just this bitcoint thing, and
Speaker 1: he kind of feuds with a lot of the people
Speaker 1: who are invested in in type you know, Web three
Speaker 1: type technology. Yeah, I do. I do particularly like the
Speaker 1: you know that that part of the narrative, right, the
Speaker 1: idea that people in Silicon Valley, who you know, from
Speaker 1: an outsider's perspective, would for years be aligned, are disagreeing
Speaker 1: on this point when it comes to Jack Dorsey and
Speaker 1: Square though the company now known as Block, how does
Speaker 1: he make this happen at Block when it comes to Bitcoin, Yeah,
Speaker 1: I mean, bitcoin has kind of been infused into all
Speaker 1: of the different parts of the business, right for everything
Speaker 1: from cash App, which is like the main it's sort
Speaker 1: of like a Venmo competitor where you can send money
Speaker 1: to people, you can also buy stocks, but you can
Speaker 1: also buy bitcoin. And there was over ten billion dollars
Speaker 1: with a bitcoin purchased through cash app and last year alone,
Speaker 1: and so that's kind of the consumer element. And then
Speaker 1: they have these teams internally that are working on all
Speaker 1: kinds of different bitcoin technologies, right, like making it easier
Speaker 1: for someone to convert their fiat currency, their US dollar
Speaker 1: into bitcoin, for example. And so I think when it
Speaker 1: came down to it again, having talked to so many
Speaker 1: people work for him, I think he's sitting here, He's like, Okay,
Speaker 1: here's my passion. Right. Bitcoin is the thing that I
Speaker 1: just truly love. It doesn't really fit into Twitter all
Speaker 1: that much. It's not you know, yes, there are elements
Speaker 1: of it that could eventually move to social media, but
Speaker 1: it doesn't fit naturally in the way that it does
Speaker 1: with block with a financial services company. And so I
Speaker 1: think for him, you know, when it ultimately came down to,
Speaker 1: all right, where do I want to spend my time.
Speaker 1: I think that's one of the reasons Block one out. Kurt.
Speaker 1: I just have to say, first of all, I love
Speaker 1: the pictures of Dorsey two thousand nine vere the beer,
Speaker 1: because it's quite a transformation. Having said that, is bitcoin
Speaker 1: going to be his downfall or you know, a great
Speaker 1: new awakening for him? Because I've got to think, as
Speaker 1: you write about some of the activists, they've just got
Speaker 1: to be watching closely totally. Well. I think he saved
Speaker 1: himself a little bit by leaving Twitter right because it
Speaker 1: became clear that this was we we described in the
Speaker 1: story as his side hustle, and I think it was
Speaker 1: starting to cause problems for people at Twitter, especially because
Speaker 1: there maybe the business wasn't quite as successful, and so
Speaker 1: all of a sudden you look around and say, well,
Speaker 1: why is Jackson and all his time doing this other thing?
Speaker 1: Um that's a problem. Now at block block has been
Speaker 1: doing better. So up until now, you know, he hasn't
Speaker 1: really been forced to choose. And again, because he's incorporating
Speaker 1: bitcoins so much into the business, I wonder if that
Speaker 1: buys him a little bit of wiggle room to really
Speaker 1: focus on this. But I think, you know, long term,
Speaker 1: this is what makes it so fascinating, right, is that
Speaker 1: all the people we spoke to were really like, the
Speaker 1: one thing Jack is great at is predicting the future, right,
Speaker 1: Like he's not really necessarily gonna be a great manager
Speaker 1: on a day to day basis, is not going to
Speaker 1: give you great directives on a day to day basis,
Speaker 1: But he looks five years in the future and he
Speaker 1: can see things that we can't and right now he
Speaker 1: sees bitcoin. So I find that story just so so good.
Speaker 1: Like there's this line that you have having a chief
Speaker 1: executive offer officer who's ambivalent about being chief and not
Speaker 1: crazy about executing comes to a serious trade trade off
Speaker 1: based on you know, you had so many interviews like
Speaker 1: talk to us more about Jack Dorsey as as aloof
Speaker 1: manager and if you can mention the birds, that'd be great. Yeah, well,
Speaker 1: the I'll start with the birds. You know. He part
Speaker 1: of why the uh you know that this took such
Speaker 1: had such so much success that Twitter is that there
Speaker 1: was this perception that Jack wasn't really focused, right, not
Speaker 1: really paying attention to his job and um, and that
Speaker 1: he wanted to work from Africa you may recall for
Speaker 1: six months and that happened right before the pandemic. He
Speaker 1: never got to go because of the pandemic, but he
Speaker 1: still kind of worked remote for the entire pandemic. And
Speaker 1: he was in Hawaii a lot, and there were chickens
Speaker 1: in the background of his video calls. He was on
Speaker 1: a Goldman Sachs call and there were you know, songbirds
Speaker 1: chirping in the background. So like he still gets to
Speaker 1: kind of go and like live this life where he
Speaker 1: wherever he wants to and lead that way. That was
Speaker 1: Bloomberg News Technology reporter Kurt Wagner, along with Bloomberg Business
Speaker 1: Week editor Joel Weber. Still ahead on Bloomberg Business Week,
Speaker 1: how rising interest rates and market volatility are affecting New
Speaker 1: York City's luxury housing market. Find out who's buying and
Speaker 1: how much they're shelling out. This is Bloomberg Broadcasting from
Speaker 1: the financial capital of the world, Bloomberg You Love Them
Speaker 1: Frio in New York to Washington, d C. Bloomberg to Boston,
Speaker 1: Bloomberg one oh six one does San Francisco, Bloomberg nine
Speaker 1: sixty to the Country Sirius xm Chado one nineteen and
Speaker 1: around the globe, the Bloomberg Business app and Bloomberg Radio
Speaker 1: dot com. This is Bloomberg Business Week, all right, So
Speaker 1: a big story and a lot of our conversations focused
Speaker 1: on inflation. What the Fed is going to do? That
Speaker 1: was all this past week. And with the Fed set
Speaker 1: to pick up the pace of interest rate hikes this year,
Speaker 1: home buyers can expect to feel the squeeze. Yet tim
Speaker 1: people stopping for housing in New York City don't seem
Speaker 1: too concerned. Barbara Fox is president of the Fox Residential Group.
Speaker 1: It's a small boutique brokerage firm that specializes in the
Speaker 1: sale of upscale residential properties in Manhattan. And she says, well, business,
Speaker 1: it's pretty darn good. Actually, the market is just on
Speaker 1: fire right now. And as a real estate professional, we
Speaker 1: move fast when the market is so good. It's um,
Speaker 1: it's really amazing. We're having the problem. The biggest problem
Speaker 1: we're having right now is um supply. I mean that
Speaker 1: all of the supply has been absorbed, not all of it,
Speaker 1: but much of it has been absorbed. And um, it's
Speaker 1: just it's pushing the prices higher again. And it's really
Speaker 1: like a crazy market. So who's buying and how are
Speaker 1: they buying? Is it all cash deals? Well, that's the
Speaker 1: interesting thing. You know, Manhattan is its own animal. And
Speaker 1: I think about half of all of our deals are
Speaker 1: all cash deals. So that means that's good news. And
Speaker 1: in in that it the higher interest rates which are
Speaker 1: sure to come will not particularly affect us. And UM. Also,
Speaker 1: I've we found that when the stock market is mushy
Speaker 1: or whatever you called it, UM, the real estate market
Speaker 1: UM tends to be really good. UM, in that people
Speaker 1: use that as an investment vehicle rout than the stock market.
Speaker 1: So right now there are a lot of things pointing
Speaker 1: very positively in the direction of investment in real estate.
Speaker 1: So back to that, who's buying and is it all
Speaker 1: cash deals? Sorry? UM, who's buying? Americans are buying. I
Speaker 1: just UM spent the day showing apartments to somebody from
Speaker 1: Texas and somebody that's moving in from California. And there
Speaker 1: are a lot of Americans around. I'm not seeing a
Speaker 1: lot of foreign investors, UM, even though I think that
Speaker 1: there's gonna be there's gonna be a lot more coming
Speaker 1: forward UM in the future. UM, and they are UM
Speaker 1: by and large, the big ticket items, particularly are all
Speaker 1: cash deals. Hey, Barbara, I mentioned you've been doing this
Speaker 1: for decades. You created Fox Residential Group back in is
Speaker 1: a boutique real estate firm. You've seen a lot of
Speaker 1: cycles when it comes to real estate in New York City,
Speaker 1: and I'm wondering what happens after you start to see
Speaker 1: a market this hot. Are you seeing any warning signs
Speaker 1: right now? What comes next? When does the market cooled down?
Speaker 1: Or is this time different? Well, it's interesting. I don't
Speaker 1: know whether it's different yet, but I'm sure we'll find out.
Speaker 1: But what what happens is that our market has historically
Speaker 1: been very cyclical with regard to the seasons. Spring is
Speaker 1: usually a very hot market, falls a hot market, the
Speaker 1: dead of summer, July and August are pretty slow. But
Speaker 1: in the last last year, for example, one of our
Speaker 1: biggest months the whole year was July. So yeah, it's
Speaker 1: just everything is has sort of you know, topsy turvy
Speaker 1: now and we don't really know where it's going. I UM,
Speaker 1: I think that with the interest rates increasing at this point, um,
Speaker 1: I think that people are going to try to get
Speaker 1: into the market now as as soon as possible because
Speaker 1: they know that they're going to be The people that
Speaker 1: are borrowing are going to want to be able to
Speaker 1: get the lowest interest rate possible and um, and that
Speaker 1: may be a little bit of an impetus for people
Speaker 1: to buy now in the next six months to a year,
Speaker 1: don't you think though, for the deals that aren't all cash,
Speaker 1: the stuff that could be maybe sub three million, sub
Speaker 1: two and a half million, are those going to get
Speaker 1: hit by rising rising interest rates? I think they're ultimately
Speaker 1: they will be hit if the interest rates go up considerably.
Speaker 1: But you know, it's New York is very strange, and
Speaker 1: that we get used to things, and we will get
Speaker 1: used to the higher interest rates. I was in the
Speaker 1: business when the interest rates are eighteen percent and we
Speaker 1: were selling like crazy. So you know, it's that that
Speaker 1: everybody gets accustomed to the rising interest rates and they
Speaker 1: and they adjust to it. And it's just like the
Speaker 1: extra taxes that we have to pay on the sale
Speaker 1: of real estate. Um. You know, it looks terrible in
Speaker 1: their first instituting these these sees, but um, everybody gets
Speaker 1: used to it and they just pay it. What has
Speaker 1: the pandemic? How has the pandemic impacted your market? It's
Speaker 1: had a huge im pack. A lot of people did
Speaker 1: leave the city and a lot of people left the
Speaker 1: city left their old departments and sold their old departments
Speaker 1: and then bought Toyota tears in the city. And I
Speaker 1: see we're seeing a lot of that right now. And
Speaker 1: that was Barbara Fox. She's president of the Fox Residential Group.
Speaker 1: You're listening to Bloomberg Business Week. Coming up next, the
Speaker 1: new president of the New York Stock Exchange on technology
Speaker 1: as a literal hedge against market volatility. Yeah, we've just
Speaker 1: seen a tad amount of volatility this year, to say
Speaker 1: the least. Yeah, wild quarter. Yeah, absolutely, This is Bloomberg.
Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes. Tim Stinovik from Bloomberg Radio were the
Speaker 1: three trillion dollars were raised from bond and equity values
Speaker 1: in the first quarter, as the Fiddle Reserve raised interest
Speaker 1: rates for the first time since Tim, it was a lot. Yeah.
Speaker 1: It was a quarter when we saw the NASDAC one
Speaker 1: hundred and the Russell two thousand, each with bear market
Speaker 1: declines of also one in which the portfolio model fell
Speaker 1: for the first time in two years. A lot of investors.
Speaker 1: It was the first time I saw a lot of volatility.
Speaker 1: It was everywhere and that was top of mine at
Speaker 1: the recent Bloomberg Live Wealth Summit, where I caught up
Speaker 1: with the President of the New York Stock Exchange Group,
Speaker 1: Lynn Martin and Katherine Keating, CEO of Investor Solutions and
Speaker 1: Wealth Management at B and Y. Melon. Yeah, So volatility
Speaker 1: obviously is driven by uncertainty, and I think it's fair
Speaker 1: to say that with the worst global health crisis in
Speaker 1: a hundred years, with the first serious ground or in
Speaker 1: Europe in eighty years, with the worst inflation in forty years,
Speaker 1: and the tightest labor market any of us I think
Speaker 1: I've ever seen, there's a lot of uncertainty out there,
Speaker 1: and so you know, you focus on what you think
Speaker 1: will guide you going for word, and so what do
Speaker 1: we really focus on. We focus first and foremost on
Speaker 1: inflation and interest rates. Interest rates are the foundation for
Speaker 1: valuing all financial assets. We focus clearly on geopolitics. We
Speaker 1: did not anticipate event in February. Normally a geopolitical event,
Speaker 1: markets tend to respond, you know, tend to go down
Speaker 1: and then rebound very quickly. That's what happened after nine
Speaker 1: eleven UM And actually you did see the market, but
Speaker 1: it was a tough quarter but it was a better
Speaker 1: March UM than February. Um. We look at confidence, right,
Speaker 1: because what causes recessions, it's behavior. So we look at
Speaker 1: CEO confidence, consumer confidence, and we see that in a
Speaker 1: in a relatively mid to high range but coming down,
Speaker 1: but coming down. So we watched that. And then the
Speaker 1: last thing we look for, and you sort of inted
Speaker 1: at it with commodity markets is um. You know, we
Speaker 1: look for where where could the leverage in this system?
Speaker 1: You know, when Russia defaulted in there was leverage in
Speaker 1: the system. It turned out it was leverage currency bets.
Speaker 1: In two thousand and eight, there was leverage in the system.
Speaker 1: It and out um that it was in mortgages. You know,
Speaker 1: do we see that kind of leverage in the system.
Speaker 1: Not necessarily, but what are we watching closely to your comments, commodities, commodities,
Speaker 1: commodities and then leverage matters because that's what tends to
Speaker 1: lead to a you know, more dramatic decline. Right, Solynn,
Speaker 1: come on in on this. The volatility that we saw
Speaker 1: in the first quarter. Yeah, I mean someone knew her seat.
Speaker 1: I uh, it's really volatile. Time to take this seat.
Speaker 1: And I mean I look at it from just the
Speaker 1: intra day swings, UM, the day on day swings. And
Speaker 1: then I also look at from the perspective of messaging
Speaker 1: that's hitting our platform. I mean, we had our top
Speaker 1: five messaging days ever happened this past quarter UM and
Speaker 1: you're talking about half a trillion messages a day that
Speaker 1: we processed across all of our platforms, which is unbelievable
Speaker 1: when you think about it. And when you really saw
Speaker 1: that was when you saw you know, the point swings
Speaker 1: intra day in the SMP or or some of the
Speaker 1: other markets. It's it. It feels though the market though,
Speaker 1: is starting to come to grips with the volatility. They're
Speaker 1: starting to take a position that perhaps the FED is
Speaker 1: going to do what it's been telegraphing it's going to do.
Speaker 1: I think maybe the FED raising a quarter basis points
Speaker 1: in March gave the market a bit of confidence to
Speaker 1: trust what was being forecasted there. So we do see
Speaker 1: volatility starting to abate. And from my perspective, I have
Speaker 1: to look at it from two different perspectives. I gotta
Speaker 1: look at it from our markets, but I also have
Speaker 1: to look at from the I p O pipeline UM. Yeah,
Speaker 1: and volatility as you can, as you can imagine, when
Speaker 1: there's a lot of uncertainty and markets volatility is going
Speaker 1: to weigh on those companies who are looking to go
Speaker 1: public because you know, they're a bit cautious about bringing
Speaker 1: their companies to market at a time when they can
Speaker 1: have these huge intra day and day on day swing. Um.
Speaker 1: A big indicator that the CEOs that I'm talking to
Speaker 1: who are planning to come to market that they're looking
Speaker 1: at is the VIX and how that is starting to behave.
Speaker 1: When you see it go a below twenty, that's when
Speaker 1: the CEOs that are in our pipeline are like, yeah,
Speaker 1: maybe I can now start to think about coming to market.
Speaker 1: So when we ended the quarter just around correct correct,
Speaker 1: I think a couple of weeks ago was the first
Speaker 1: time that we saw a dip below So having a
Speaker 1: lot of conversations with those companies that we know are
Speaker 1: part of our pipeline, one thing I thought about in
Speaker 1: terms of the first quarter, there's volatility and there's chaos. Right,
Speaker 1: We've seen chaos in the financial markets. I mean, let's
Speaker 1: go back to the financial crisis. Other times where you
Speaker 1: really felt like, oh my god, this system is coming
Speaker 1: in done It's an important distinction because I think about
Speaker 1: these things. It functioned right absolutely, and I think about
Speaker 1: two years ago, in particular, when you had the pandemic,
Speaker 1: when we trigg gird in the US equity markets, the
Speaker 1: market wide circuit breakers, which are a halt when the
Speaker 1: SMP dips below seven and then reopens and further dips,
Speaker 1: we had to halt the market four times. Right during
Speaker 1: that period. We haven't had to halt the market. This
Speaker 1: is just the market finding its footing um. And you know,
Speaker 1: our job as an infrastructure provider, as a marketplace is
Speaker 1: during times like this, we need to remain open. We
Speaker 1: need to have orderly trading. We need to have efficient
Speaker 1: trading because we need buyers to meet sellers, sellers to
Speaker 1: meet buyers, and to do so in an efficient fashion. Kevin,
Speaker 1: come on in on this, because I do wonder like,
Speaker 1: was all of a sudden everybody again getting to this
Speaker 1: point of chaos versus volatility, where all the clients and
Speaker 1: be in my milk, you know what, calling up and
Speaker 1: saying I want cash only, No, And in fact, what
Speaker 1: you know, what you see is that there wasn't chaos
Speaker 1: in the markets. It was actually a very interesting kind
Speaker 1: of leveling quarter, because it almost didn't matter whether you
Speaker 1: are a hundred percent in you know stocks the SMP
Speaker 1: five hundred, or a hundred percent in bonds. Your portfolio
Speaker 1: probably lost about five percent. That's not chaos that actually
Speaker 1: it was. It was a combination of the two which
Speaker 1: did have the same right and so what was unusual
Speaker 1: about the quarter, um was it was such a tough
Speaker 1: quarter in the bond market, right because you had interest
Speaker 1: rates rising so quickly, and then you had something that
Speaker 1: typically doesn't happen. You had spreads widen at a time
Speaker 1: when the economy is actually doing quite well. Right. Spreads
Speaker 1: usually widen when the economy is not doing well. But
Speaker 1: you had both of those at a time that you
Speaker 1: didn't have enough um. You know, your the rates were
Speaker 1: so low, you didn't have any deal to protect you.
Speaker 1: So we we we think that is beginning to start
Speaker 1: to reverse UM in this quarter. But you know, everybody
Speaker 1: is pretty much of the same position at the end
Speaker 1: of the quarter most likely, you know, your portfolios were
Speaker 1: down about five percent, and given all of these big
Speaker 1: uncertain issues out there, that's actually a very resilient outcome. Well,
Speaker 1: this is what I want to ask you about some
Speaker 1: of the volatility triggers, like we mentioned them, geo political tensions,
Speaker 1: China versus the US, China versus the world, you know, inflation,
Speaker 1: inverted yield curves, innovation disrupting itself. You guys have been
Speaker 1: moving increasingly into whether it's the crypto world, the n
Speaker 1: f T world, UM, what among what some might considered
Speaker 1: volatility triggers kind of concern you the most, Catherine. So
Speaker 1: it's it's the things that I mentioned earlier, right, we
Speaker 1: we we can't control any of these things, UM, but
Speaker 1: I think that there is a path to a soft
Speaker 1: landing from all of this, and the path probably includes
Speaker 1: a couple of things. Obviously it's the FED tightening rates,
Speaker 1: but not too much. It is UM companies doing what
Speaker 1: companies do, which is managing through this uncertainty. We have,
Speaker 1: you know, company profit margins at all time highs. We've
Speaker 1: seen a tremendous spike in productivity over the over the pandemic.
Speaker 1: That helps corporate results. And it's we need consumers to
Speaker 1: do what consumers do. And there's there's an expression high
Speaker 1: prices are the cure for high prices to a certain
Speaker 1: extent of what we need the consumers to do is
Speaker 1: shift a bit how they've been spending, which is on
Speaker 1: on goods, right, all the things that people did to
Speaker 1: work from home and renovate their homes and all of that,
Speaker 1: and shift a little bit to services. Um, And then
Speaker 1: I think there is a path to a soft landing
Speaker 1: UM from this. Yeah, I would agree with that. Um.
Speaker 1: You know, this is not the first time there has
Speaker 1: been volatility to your point earlier in markets and uncertainty
Speaker 1: in markets, and markets are resilient. And our markets in
Speaker 1: the US are the envy of global markets, given the access,
Speaker 1: given the investor protections they provide, given the types of companies,
Speaker 1: and the transparency that those companies provide when they are public. Right.
Speaker 1: So we've been here before, UM, and we've been here
Speaker 1: under less of a crisis, if you will. This is
Speaker 1: not the financial crisis. It's not you know, uh, the pandemic,
Speaker 1: the start of the pandemic when there was a tremendous
Speaker 1: amounty of saranty uncomfortable it did. And volatility doesn't necessarily
Speaker 1: mean negative returns, right, think the average into your correction
Speaker 1: of the SMP you know since the eighties is about
Speaker 1: one thing I want to ask you, though we talk
Speaker 1: about like inflation. There is a generation of investors that
Speaker 1: don't necessarily understand high inflation or parents. Yeah, exactly. We
Speaker 1: did actually a Twitter poll and I want to bring
Speaker 1: it up for everybody because we asked on inflation, can
Speaker 1: the U S return to two percent inflation without a recession?
Speaker 1: And as you can see from the results, an overwhelmingly
Speaker 1: response of no. On the se you all agree with that? Yes?
Speaker 1: Do you agree with that? Len? Do you agree with that?
Speaker 1: It's interesting how sentiment tends to drive markets though, too,
Speaker 1: and I think that is a new phenomena that you've
Speaker 1: seen with social media and how that perception may be
Speaker 1: driving different things in market's, different market behavior as opposed
Speaker 1: to you know, fundamental submarket. I aways come back to
Speaker 1: fundamentals of economies and as the economy does the economy
Speaker 1: have a capacity for growth, and this economy does have
Speaker 1: a capacity for growth. However, sentiment has become a very
Speaker 1: important driver of of what you see in markets. That's
Speaker 1: New York Stock Exchange President Lynn Martin along with Katherine Keating,
Speaker 1: she's CEO of Investors Solutions and Wealth Management at b
Speaker 1: n Y Melon for the full conversation and all of
Speaker 1: the panels from the Bloomberg Wealth Summit. Head on over
Speaker 1: to Bloomberg Live dot com and that ups up our
Speaker 1: first hour of the weekend edition of Bloomberg Business Week
Speaker 1: from Bloomberg Radio. I'm Carol Masser and I'm Tim Stanovic.
Speaker 1: Ahead in our next hour, we are talking cars and
Speaker 1: we are talking wine, but who not together of course,
Speaker 1: our cover story on Ford's plan to challenge Tesla's ev dominance,
Speaker 1: and the CEO of Lamborghini on the luxury automaker's record
Speaker 1: year and its newest ride. And then Tim, We've got
Speaker 1: a fourth generation Argentine Vitner on the perfect mail back
Speaker 1: wines for any occasion. What I loved about the conversation,
Speaker 1: First of all, she was doing it from our car.
Speaker 1: She was pulled over. That's what you loved about the conversation.
Speaker 1: She's gonna tell you what I loved about. Okay, she
Speaker 1: got into the history, which I really loved about. Now
Speaker 1: back wines where they came from. I know what you
Speaker 1: loved is that we actually stand. Yeah. I love that
Speaker 1: we were drinking. Why we can do that, We're allowed
Speaker 1: to do it. This is Bloomberg. This is Bloomberg Business
Speaker 1: Week Inside from the reporters and editors who bring you
Speaker 1: America's most trusted business magazine, plus global business, finance and
Speaker 1: tech news as it happened, Sloomberg Business Week with Carol
Speaker 1: Messier and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Hi,
Speaker 1: everyone plenty ahead in our second hour of the weekend
Speaker 1: edition of Bloomberg Business Week, including Tim, We're kicking into
Speaker 1: hike or when it comes to the auto industry from
Speaker 1: the Lamborghini CEO talking delivery hurdles, to the team from
Speaker 1: Kelly Blue Book on the New York Auto Show and
Speaker 1: what shoppers are really buying right that show is underway.
Speaker 1: Let's start though, with our cover story. It's about the
Speaker 1: new electrified version of the Ford F one fifty truck,
Speaker 1: as the auto giant looks to re engineer the footy
Speaker 1: or smash success of its gas powered version. This has
Speaker 1: been such an important car truck, I should say to Ford.
Speaker 1: Keith Notton is the person who wrote that story. He's
Speaker 1: auto reporter for Bloomberg News. He joins us on the
Speaker 1: phone from Detroit. Keith, I have one very simple question,
Speaker 1: just to get out of the way. In the beginning,
Speaker 1: A Frank who would have thought that a Franc would
Speaker 1: be such a selling point for this vehicle. Please explain,
Speaker 1: and not just a Franc, but a mega power front
Speaker 1: to be clear. Okay, thank you, thank you as you
Speaker 1: saying the story. Ford went all Texas on it, and
Speaker 1: they have this thirteen cubic foot gaping maw that you
Speaker 1: can put two sets the golf clubs in. It has
Speaker 1: it literally has a built in ice chest with a
Speaker 1: drain so that you can do something called front gating.
Speaker 1: As uh Ford's top marketing executive said, you can have
Speaker 1: a party on both ends. All right. Jill Weber is
Speaker 1: with us editor of in our Business Week, Um, do
Speaker 1: you have a fronk? I do have a front? Yeah,
Speaker 1: I have a Tesla. So I'll admit that that I
Speaker 1: do have a fronk. Um, it might not be as
Speaker 1: as large as the one that's gonna be in the
Speaker 1: F one fifty. And you know, when Keith and I
Speaker 1: first started talking about this story, I just thought, I
Speaker 1: think this is a We talked about business strategy stories
Speaker 1: a lot of Business Week. This is like a textbook one, right,
Speaker 1: Like Tesla proved has proven over over a decade now
Speaker 1: that the future is going to be electric vehicles and
Speaker 1: and now comes the rest of the world trying to
Speaker 1: play catch up to that idea, and and along comes
Speaker 1: forward with basically the best selling vehicle in America. Americans
Speaker 1: love trucks. They there's no truck they love more than
Speaker 1: F one fifty that fe like an economy all by itself.
Speaker 1: And now comes the time, the moment where Ford's gonna
Speaker 1: bet the house and electrify that flagship iconic product. Right. So,
Speaker 1: so it's it's about the front. The fronts cute, but
Speaker 1: oh my god, it is so much bigger than the
Speaker 1: front right like like, and the stakes for this thing
Speaker 1: couldn't be any higher for Ford, right um. Jim Farley,
Speaker 1: the CEO, called this about the company moment. He said,
Speaker 1: does this keep us up at night? You bet you?
Speaker 1: Because this is this is the ball game, because Americans
Speaker 1: don't really despite testless success, Americans don't really buy electric vehicles.
Speaker 1: Only about three of US sales where electric vehicles last
Speaker 1: year last year. The rate is much higher in Europe
Speaker 1: and very high in China. But this is the one
Speaker 1: that could change that because it is the ultimate mainstream vehicle.
Speaker 1: If Ford can convince particularly traditional truckers to embrace electrification,
Speaker 1: then it goes main mainstream. Is it fair, Keith at
Speaker 1: this point? Is it too early to call it a success?
Speaker 1: I mean, the pre orders are pretty much off the charts,
Speaker 1: and what what Ford had to do in order to
Speaker 1: accommodate that in terms of product. Yeah, they really weren't
Speaker 1: prepared for the success of this truck. They introduced it
Speaker 1: last May and this very flashy ceremony in front of
Speaker 1: Forts World headquarters in Dullborn, Michigan, and then immediately just
Speaker 1: the reservations were just off the chart. So they reached
Speaker 1: almost two hundred thousand before for It had to stop
Speaker 1: taking them. They have doubled factory capacity twice. They originally
Speaker 1: planned to build forty thou year. Now they have the
Speaker 1: capability to build a hundred and fifty thousand a year.
Speaker 1: And let's not forget they got a big PR push
Speaker 1: from President Biden who drove the truck, floored it on
Speaker 1: the recommendation of the CEO. He said, mash the throttle
Speaker 1: and uh and then when Joe got done, he said,
Speaker 1: this sucker is quick. Um, so you've got uh huge
Speaker 1: PR win organic PR that comes from the President United
Speaker 1: States doing that. Uh. The other thing that you know, Keith,
Speaker 1: it really is going to be. I think a pr
Speaker 1: advantage is um the fact that they're rolling this thing
Speaker 1: out effectively at scale, right, um, and how does that
Speaker 1: compare to the rest of um, uh the electric truck
Speaker 1: uh kind of category? Right? Because really what Ford is
Speaker 1: going for here is not only is it the flagship category,
Speaker 1: but like, how much of the electric category electric truck
Speaker 1: category can it? See? Right? Ford really has essentially a
Speaker 1: first mover advantage here. Instead of like Electric building a
Speaker 1: brand new electric truck from the ground up, they went
Speaker 1: back and they kind of retrofitted the existing Efflent fifty.
Speaker 1: The cab, the shape, the design. It will all look
Speaker 1: very familiar, but that's part of the strategy. They want
Speaker 1: to keep it familiar so these traditionalists will buy into it.
Speaker 1: And the only other trucks on the market right now
Speaker 1: are the relatively low selling UM Rivian R one t
Speaker 1: from the startup Rivian U, which starts at around eighty
Speaker 1: thou dollars a year, or eighty thousand dollars rather, I
Speaker 1: should say. And and then GM has its new electric
Speaker 1: comer out and that's a six figure trucks, so those
Speaker 1: are small volume trucks. Ford's truck starts just below forty dollars.
Speaker 1: It's basically in the same price range as a regular
Speaker 1: gas fire truck, so they're really going for high volume.
Speaker 1: And you know, Chevy, the Chevy Silverado, which is one
Speaker 1: of the primary competitors, is still a year out testless
Speaker 1: cyber truck that's gotten so much buzz. And we've actually
Speaker 1: introduced before the Ford Ethellent fifty Lightning that's still a
Speaker 1: year away. And we don't even know when the RAM
Speaker 1: is coming, which is the other big selling pickup truck
Speaker 1: in the United States. So Ford has sort of open
Speaker 1: road ahead of itself to to sort of seize the market.
Speaker 1: That was Bloomberg News auto reporter Keith Noton and the
Speaker 1: editor of the magazine, Joel Webber. You're listening to Bloomberg
Speaker 1: Business Week. Coming up, we're going to stay with cars
Speaker 1: and what's hot at the auto show in New York City.
Speaker 1: This is Bloomberg. This is Bloomberg Business Week with Carol
Speaker 1: Masser and Bloomberg Quick Takes Tim Stinovik from Bloomberg Radio.
Speaker 1: The New York International Auto Show was back this week.
Speaker 1: It's going for the next couple of weeks. It was
Speaker 1: shut down though, like so much over the past two
Speaker 1: years because of the COVID pandemic. Tim We've got a
Speaker 1: couple more conversations about the global auto industry, and that's
Speaker 1: over the next half hour or so. First up one
Speaker 1: with Stefan Winkelman, chairman and CEO of automobile Lamborghini, who
Speaker 1: dropped by to talk about navigating through today's volatile environment
Speaker 1: and how long you're going to have to wait to
Speaker 1: get your hands on that Lambeau. Gotta be patient. People
Speaker 1: are willing to wait. Though it's a Lambeau. I get that.
Speaker 1: I can tell you that since twent alve years we
Speaker 1: are in crisis more more or less the pandemic than
Speaker 1: the chip shortage now the war in Ukraine. What I
Speaker 1: can tell you, and which is for us very surprising,
Speaker 1: that already in the second part of the market, our
Speaker 1: type of market was coming back stronger than expected. And
Speaker 1: as we speak, we are selling every day more cars
Speaker 1: that we are able to produce. So we have an
Speaker 1: order bank which is longer than one year of waiting time.
Speaker 1: This is before let's say, before twenties or before the pandemic,
Speaker 1: it was between six seven, eight, maximum nine months, depending
Speaker 1: on the model and on the launches and now this
Speaker 1: is very good and healthy for a company like ours,
Speaker 1: but that the market came back so strong and so sudden,
Speaker 1: this was unexpected. The short that the chip shortage for us,
Speaker 1: being part of the Volkswan Group was less an issue.
Speaker 1: We were lucky because we have small manufacturers or low volumes,
Speaker 1: high margins, so we got a priority line from from
Speaker 1: the Volkswan Group. And now the war in Ukraine, for sure,
Speaker 1: we we put our um operations on hold in Russia,
Speaker 1: so we stopped it. And we have an important supplier
Speaker 1: in the in the West Ukraine, so we had stopping
Speaker 1: goals and production for the Huracan, which is one of
Speaker 1: our models. But now we are let's say, on a
Speaker 1: in our face where we have five six days of
Speaker 1: view of what is happening, and we are not losing
Speaker 1: any production at timing, So this is for us pretty
Speaker 1: pretty okay. Then it's clear stock market did anything slow
Speaker 1: down on that first quarter because of the no as
Speaker 1: we speak, I have to tell you and I'm unable
Speaker 1: to make let's say, a forecast for the year twenty two,
Speaker 1: but as we speak, there is no slowing down on
Speaker 1: the request for our cars, and this is very positive.
Speaker 1: We have also to say that there are more people
Speaker 1: with the money at their disposal in compar Ariazon to
Speaker 1: a decade ago. So the the words is increasing and
Speaker 1: they're more benefiting moments. We have a very young customer
Speaker 1: base and they're very proud of owning a Lamborini. We
Speaker 1: have to keep the promise of always delivering dream cars.
Speaker 1: This is a part amount for this because of inflationary
Speaker 1: pressures supply chain. You mentioned the chip shortage, labor costs,
Speaker 1: all the inflationary pressures that we see happening around the
Speaker 1: world right now. How much have you had to raise
Speaker 1: prices so far? We have not, let's say, drunks for
Speaker 1: the cost of of the material colls, roll materials to customers.
Speaker 1: We have a price increase between one and two per cent,
Speaker 1: which is not something which is unusual. Why haven't you
Speaker 1: Why haven't you passed that along? If the consumers willing
Speaker 1: to wait for a year for a Lamborghini, they're probably
Speaker 1: willing to pay more five more for the Let's say,
Speaker 1: if if this is going to continue, there is a
Speaker 1: further increase on the materials, certainly we are we will
Speaker 1: be forced to do so. At time being, we have
Speaker 1: it under control, and I'm happy to say so. But
Speaker 1: for the future, as I said that, it's very difficult
Speaker 1: to to make a forecast uh the future. So the
Speaker 1: new models, they will have higher material cost due to
Speaker 1: hybridizations or batteries and combustion engines together, so there will
Speaker 1: be a slight price increase, but only due to that.
Speaker 1: How is the supply chainel although impacting your roll out
Speaker 1: this year? Right, You've got a bunch of new models coming.
Speaker 1: Um is any of that being impacted now a time
Speaker 1: being not. It's clear that it's early to speak about
Speaker 1: the new geo political situation because today we are not
Speaker 1: in the new normal, so we have to wait until
Speaker 1: the conflict is over and what is going to happen.
Speaker 1: For sure, we are acting global, so we are a
Speaker 1: company which is only good when we are able to worldwide.
Speaker 1: So we have high investments, little volumes, so we cannot
Speaker 1: flood one market and think that this is the the
Speaker 1: idea of the future, so we have to act global.
Speaker 1: On the other hand, acting global means also that our
Speaker 1: supply chain. We cannot just say that we stay in
Speaker 1: one country. So we will see how this is going
Speaker 1: to happen. Also, the pandemic with all the logistic chain
Speaker 1: was messed up and it took a lot of time
Speaker 1: to go back to normal. So we have to see
Speaker 1: how this is going to be once uh, yeah, there
Speaker 1: is a new normal in place. You did suspend sales
Speaker 1: to Russia. Correct, Um, how much of an impact is
Speaker 1: that for you guys? But luckily we can divert the
Speaker 1: production or the order bank or the cars which we
Speaker 1: are going to produce or we wanted to produce for
Speaker 1: Russia into other markets, so we have no losses and
Speaker 1: the due to the fact that we have this long
Speaker 1: order bank, we don't have a negative impact. Will you
Speaker 1: stay out of Russia? We will see after that. It
Speaker 1: was as I said, it's very difficult now to make
Speaker 1: a forecast about what the geo political situation is going
Speaker 1: to be. The longer the wall last, and more difficult
Speaker 1: it would be to go back. No, I'm sure about that.
Speaker 1: We know the incredibly some incredibly wealthy oligarchs in Russia
Speaker 1: have had sanctions imposed on them, not by the interest
Speaker 1: the United States, but the UK and the European Union
Speaker 1: as well. If they were to approach you in another
Speaker 1: country to buy a vehicle, would you sell them a vehicle?
Speaker 1: But we have a list, a blacklist of people and
Speaker 1: this is part of the business we had also before
Speaker 1: and there are all some of these guys on the
Speaker 1: list and we will not sell them cars. Have you
Speaker 1: been approached but not to my knowledge, but we have
Speaker 1: we have all did as all partners worldwide. So at
Speaker 1: time being, I don't see that there is anybody alright,
Speaker 1: the hard parts over Well, I got one more question. Uh,
Speaker 1: it's similar to what Carol was asking. You know right
Speaker 1: now you suspended you've suspended vehicle sales in Russia. What
Speaker 1: would have to happen for you to start vehicle sales
Speaker 1: in Russia up again? Frankie speaking, I don't know, because
Speaker 1: once the war is going to be older, there will
Speaker 1: be a new situation and we have to see how
Speaker 1: the European Union, because we are part of the union.
Speaker 1: European Union is going to react in terms of sanctions
Speaker 1: and we will be we will be aligned on what
Speaker 1: the government is going to tell us. That's Deefan Binkelman,
Speaker 1: chairman and CEO of Lamborghini. We're staying with cars next
Speaker 1: to Bloomberg Business Week, driving around a track at the
Speaker 1: New York International Auto Show with the cars that seemed
Speaker 1: to be dominating this year's show that's coming up. This
Speaker 1: is Bloomberg broadcasting from the financial capital of the World,
Speaker 1: Bloomberg eleven Frio in New York to Washington, d C.
Speaker 1: Bloomberg to Boston, Bloomberg one oh six one does in
Speaker 1: from this go Bloomberg NIXT to the country Sirius xm
Speaker 1: Chado one nine team and around the globe the Bloomberg
Speaker 1: Business app and Bloomberg Radio dot Com. This is Bloomberg
Speaker 1: Business Week. As we've been talking about the New York
Speaker 1: International Auto Show often running this weekend for the first
Speaker 1: time in two years, things though, tim are a little
Speaker 1: bit different this year. Michael Museo, video manager at Cox
Speaker 1: Automotive and Kelly blue Book follows all Things Cars. He
Speaker 1: joined us in our studio just after walking the floor
Speaker 1: at the Javit Center. So when years past, you know,
Speaker 1: you'd walk to different areas of the auto show and
Speaker 1: it was just wall after wall of so many booths
Speaker 1: of static vehicles. And they've kind of changed that. So
Speaker 1: if you go downstairs, now they've got a track and
Speaker 1: you can get and you can ride in the vehicles
Speaker 1: even upstairs. I know, I know, indoor vehicles and this
Speaker 1: is what you can do when you have electric cars.
Speaker 1: You I was gonna say, are these internal combustion engines
Speaker 1: that are inside the Javits Center. There are not. Um,
Speaker 1: this is part of the electric vehicle revolution wherein you
Speaker 1: can have vehicles and not asphyxiate yourself while hurring around
Speaker 1: the Auto show. Well, Mica talked to us about this EVS.
Speaker 1: We've been talking about it for years. But what's different
Speaker 1: is it is this the first time the show has
Speaker 1: done that, you know, that focus on EVS and especially driving.
Speaker 1: This is a new thing, and really that's precipitated by
Speaker 1: a couple of different things. Item number one is that
Speaker 1: there's just more vehicles available. There's really his proliferation right now. UM.
Speaker 1: I can tell because when I go in new vehicle launchers,
Speaker 1: I drive all the new stuff. There's a lot more
Speaker 1: electric happening. In fact, if you go upstairs over to
Speaker 1: the hun Day booth, they have dedicated a large section
Speaker 1: of that area to an experience. We can ride in
Speaker 1: their new Ionic five electric cars and I, in fact,
Speaker 1: I drove the Ionic five recently and it's super cool.
Speaker 1: It's a really neat okay one thing, it's one thing
Speaker 1: to be seeing these things at the auto show. It's
Speaker 1: another thing to actually put a deposit down and wait
Speaker 1: for that electric vehicle to arrive. Because my dad is
Speaker 1: still waiting for his MOCKI it has been months at
Speaker 1: this point. In fact, he's actually gotten some very interesting
Speaker 1: emails from Ford about updates when it comes to basically,
Speaker 1: we have no idea when you're getting your car. As
Speaker 1: a Bronco owner, I'm familiar with those kinds of updates.
Speaker 1: But um, yeah, so that it really keys into one
Speaker 1: of the big issues right now with electric cars and
Speaker 1: anything electrified, even hybrids. They are the ones with the
Speaker 1: tightest constraints in terms of supply, and so there's a
Speaker 1: lot of interest in electric cars right now. There's huge
Speaker 1: demand and they just cannot meet that demand. Is that
Speaker 1: because of what's going on brought more broadly with supply
Speaker 1: chains or something specific to evs? And and I also
Speaker 1: do wonder about manufacturers being very careful. I'm thinking about
Speaker 1: just in time, inventory and all that good stuff, making
Speaker 1: sure that they're not overproducing. Yeah, I think there are
Speaker 1: a couple of different dynamics at play. I mean, just
Speaker 1: you know, getting the production up to speed for these
Speaker 1: new kinds of vehicles is a challenge in and of itself.
Speaker 1: And then if you think about the vehicles like the
Speaker 1: one I was driving the hunt On five are also
Speaker 1: drove the Kya e V six recently. Um, part of
Speaker 1: being an electric car is not just being electrified, but
Speaker 1: it's also looking electrified and giving electrified experience and having
Speaker 1: big screens and um advanced technology and driver assist system
Speaker 1: and all of that stuff requires those microchips that are
Speaker 1: still in such short supply. Okay, so when do we
Speaker 1: start to see you actually be able to buy an
Speaker 1: e V and get it? When does this supply chain
Speaker 1: start to welk in the showroom get the car? It?
Speaker 1: I mean, it's that's how it used to work with
Speaker 1: vehicles until you know, until yeah, well yeah, I guess
Speaker 1: elon when it comes to actually walking into a showroom,
Speaker 1: been walking out with a car? Right? You're doing that
Speaker 1: online now with Tesla. Yeah. So the dynamic that we
Speaker 1: have now is that some dealers will get you a
Speaker 1: vehicle if you've got a lot of money to spend
Speaker 1: over M S R p UM. So it really depends
Speaker 1: on how much you want to spend and how much
Speaker 1: you're willing to wait, um, but the supply change should
Speaker 1: start to open up. Everything I'm hearing is going into three.
Speaker 1: That's when the microchip short is just going to start
Speaker 1: to mellow. So it's not like this is a short
Speaker 1: term dynamic. We are kind of stuck with it. But um,
Speaker 1: so that kind of leads to an interesting dynamic that
Speaker 1: we've seen. Cox Automotive we did some research into before
Speaker 1: you walked in here. I am right now watch my videos.
Speaker 1: I am always like this, but I love it. I
Speaker 1: love it. I'm just like, whoa. Now, I'm gonna dial
Speaker 1: it back. You guys to be comfortable, go to a hundred.
Speaker 1: It's cool. What we had noticed in our Cocks Automotive
Speaker 1: study is that people are willing. Car shoppers are willing
Speaker 1: to delay their purchase. And I have too great anecdotes
Speaker 1: for that. So does that mean they're making the order there,
Speaker 1: ordering their vehicle and waiting until it will arrive. And
Speaker 1: oftentimes they're doing that just because the vehicles aren't available,
Speaker 1: or because they can find a dealership that will sell
Speaker 1: M S RP. But only if they wait. It's one
Speaker 1: thing to do that if you're Lamborghini, right, And we
Speaker 1: talked to Lamborghini CEO Mr Vinkelman yesterday and he said
Speaker 1: that their time for waiting for a Lamborghini if you're
Speaker 1: a customer who puts an order and it went from
Speaker 1: you know, roughly seven to eight months, which is pretty
Speaker 1: typical for Lamborghini, up to a year at this point.
Speaker 1: But he's not concerned about people going elsewhere because hey,
Speaker 1: if you want to Lamborghini, you're gonna wait for Lamborghini.
Speaker 1: But does this Can you say the same thing about
Speaker 1: cars that are more of a commodity, Yes, yes you can.
Speaker 1: My friend Mary who lives in Denver put in an
Speaker 1: order like three days oh, for a Toyota rav four Prime.
Speaker 1: That's her plug in hybrid. She was told it was
Speaker 1: going to be either eight months to two years, So yeah,
Speaker 1: people will wait. That's Michael Muzio, video manager at Cox Automotive.
Speaker 1: Then Kelly Bluebook. You're listening to Bloomberg Business Week still ahead.
Speaker 1: We wrap up with a history lesson a new book,
Speaker 1: and a sampling of some great Blobic wines. Yeah, it's
Speaker 1: the weekend. This is Bloomberg. You're listening to Bloomberg Business
Speaker 1: Week with Carol Messer and Bloomberg Quick Takes. Tim Stinovich
Speaker 1: from Bloomberg Radio. Well, this week, we thought we would
Speaker 1: wrap up with something fun, really perfect for the weekend.
Speaker 1: We're going to talk about wine. Hey, that's okay with me.
Speaker 1: I don't have to save wine for the weekend. You
Speaker 1: can drink wine other days. Heard that, I've heard that. Well.
Speaker 1: We recently had the pleasure to speak with a fourth
Speaker 1: generation Argentine vintner, physician and author. Her name Laura Kataina Carol.
Speaker 1: She's managing director at katainas Apata Winery. She's also the
Speaker 1: author of the book Mall Back Mono More. And we
Speaker 1: began our discussion by asking about the impact of climate
Speaker 1: change in Mendoza, that's where her family's business is based.
Speaker 1: You're seeing a lot of my beck, which is our
Speaker 1: signature variety, but we also make many other wines. You know, cavernetsignan, chardonnay,
Speaker 1: we make you known noir. And what's characteristic about our wines.
Speaker 1: They're from high altitudes, so they have a long time
Speaker 1: to ripen, so they're very rich. But because of the
Speaker 1: long ripening time, they're very smooth. So this is the
Speaker 1: characteristic of Argentinian wines. All right, And I don't mean
Speaker 1: to get so serious on you. But I know that
Speaker 1: we've done a lot of reporting here at Bloomberg and
Speaker 1: we've got a lot of time to talk um. But
Speaker 1: climate change, how is that impacting you guys if at all? Well,
Speaker 1: for sure, there is warming all over the world, a
Speaker 1: little less in the southern hemisphere than in the north.
Speaker 1: But the main thing is that my father he moved
Speaker 1: most of our vineers to the high altitude regions about
Speaker 1: thirty years ago, and there is cooler climate here. He
Speaker 1: was looking for a place to make more mineral, high
Speaker 1: acidity wines, more age worthy wines, but he also found
Speaker 1: this place that is more resilient with climate change. So
Speaker 1: it is an issue for vineers all over the world
Speaker 1: that we are in a very good position because of
Speaker 1: the high altitude and the cool climate at the high altitude.
Speaker 1: But what are the changes that you have seen over
Speaker 1: four generations of making wine. I mean there must be
Speaker 1: some climate changes, right, yeah. Well, you know, the bigger
Speaker 1: issue in Argentina is not the temperature. It's actually the water.
Speaker 1: Because we have the glaciers of the Andes that the
Speaker 1: native peoples of Argentina created canals to irrigate, and that's
Speaker 1: why we can have farming that's why we can grow
Speaker 1: vineyards and orchards. And we are a farming place and
Speaker 1: there's less and less water from the glacier. So we're
Speaker 1: working a lot on, you know, how to capture water,
Speaker 1: how to use less water. That is the bigger issue
Speaker 1: for us in Argentina. Water. You know what's interesting too,
Speaker 1: And I think about the process how technology is increasingly,
Speaker 1: you know, lower playing a bigger, bigger role in something
Speaker 1: like when it comes to running a winery or running
Speaker 1: a vineyard. How has that kind of impacted what you
Speaker 1: guys do as well? Yes? So, um, you know, there
Speaker 1: is this vision of wine making as everything is done
Speaker 1: by hand and people are harvesting by hand, and they're
Speaker 1: sorting out the grapes and then you're stepping on the
Speaker 1: grapes with your feet. I was gonna say, I love Lucy. Right,
Speaker 1: we all went there, Right, it's a lot more high technic, right, yeah,
Speaker 1: And there's a lot of these beautiful traditions, um. And
Speaker 1: my philosophy, you know, I'm a medical doctor, um, and
Speaker 1: so for me, people are very important, and that's that's
Speaker 1: one of the issues. A lot of the people want
Speaker 1: to move to cities. This is happening all over the
Speaker 1: world and all the wine countries. You know, it's happening
Speaker 1: in California and Australia and Europe. And what I say is,
Speaker 1: let's use technology when it helps us, um stay in
Speaker 1: better health as people. So for example, a lot of
Speaker 1: hand harvesting, if you were doing that every year for
Speaker 1: four months, you would start having severe back problems. So
Speaker 1: we yeah, so actually some machine harvesting is good. And
Speaker 1: actually when it rains a lot, you can't harvest by hands.
Speaker 1: So I'm a big fan of using you know, we
Speaker 1: use robots to lift big boxes filled with glass. Of
Speaker 1: course we should use those robots. We don't want people,
Speaker 1: you know, injuring their backs. So my view is, let's
Speaker 1: keep the typicity of the wine, you know, keep the
Speaker 1: different parcels of different altitudes, of single vineyards. Like the
Speaker 1: diversity of wine that you see today is is unprecedented.
Speaker 1: You know, there there's more great wine out there than
Speaker 1: there ever has been. But let's also take care of
Speaker 1: the people who work in the vineyards and in the
Speaker 1: land and use the technology to make their lives better
Speaker 1: and that and that's my goal here. What inflationary pressures
Speaker 1: are you seeing across the industry. Oh you want so. Well.
Speaker 1: You know, in Argentina we have fifty percent inflation, so
Speaker 1: I always say, it's not that bad for you in
Speaker 1: the US. So you know, we're seeing you know, our
Speaker 1: our importers, they're having to pay more for shipping. It's
Speaker 1: hard to get the trainers. We're having to pay more
Speaker 1: for glass. Um. You know, we're having to pay higher salaries.
Speaker 1: So there are definite inflationary pressures. But I can tell
Speaker 1: you that it's it's worse for us in Argentina than
Speaker 1: for you in the US, if that makes it feel
Speaker 1: any better. You know, it's funny that you said, because
Speaker 1: we do talk about that that global perspective of like
Speaker 1: really understanding it. You know, mar Bank is a very
Speaker 1: very ancient greade, just as old as Peeno Noar. It's
Speaker 1: actually an older great than Caverney Savignon, for example. It's
Speaker 1: been around since the Roman times. It was described by
Speaker 1: the Romans when they walked to France uh, and then
Speaker 1: it was very important in the Middle Ages. There was
Speaker 1: this queen called Eleanor of Aquitaine who brought it from
Speaker 1: France to England. And then it was also very important
Speaker 1: in Bordeaux, where all these famous ground crewe wines from
Speaker 1: Bordeaux come and it's part of the blend there. But
Speaker 1: it came to Argentina in the middle of the nineteenth
Speaker 1: century and now it's more famous from Argentina than from France.
Speaker 1: It's the variety that the flagship variety of Argentina. And
Speaker 1: it's known for its very dark color. It used to
Speaker 1: be called the black wine. Very rich flavor and smooth
Speaker 1: tannins and um, you know it's it's it's the great
Speaker 1: that my great grandfather, who came from Italy, first planted
Speaker 1: in Argentina nineteen o two. That's why I'm the fourth
Speaker 1: generation making this wine. And the Catina beck is a
Speaker 1: high outsuit blend and it might be, you know, our
Speaker 1: most sold wine in the world, this Gatina. What do
Speaker 1: you think about it? I really like it. Are you
Speaker 1: a red whine because I'm a big red wine? Oh yeah,
Speaker 1: I am too. It's not like I know anything about wine,
Speaker 1: despite the fact that I grew up in a wine
Speaker 1: region of California. But I know what I like and
Speaker 1: this is good Lord. What I will say is I'm
Speaker 1: a big Cabernet drinker. Um. And I want to say
Speaker 1: ten years ago seven years ago started drinking a lot
Speaker 1: of now Back and I love it. This is really yeah.
Speaker 1: It has the power of the cabernet, but the smoother
Speaker 1: tannins and it's just a different thing. I mean, I
Speaker 1: I also really love cabernet, and we we make a
Speaker 1: wine that's a blend of Caberney Mavick that I also love.
Speaker 1: But I think that Mabic on its own is just
Speaker 1: delicious and it's and it's really easy to pair with
Speaker 1: so many different kinds of foods. And that's the thing
Speaker 1: I think I like about it is I can. I'm
Speaker 1: not a very traditionalist, like if it's fish, it has
Speaker 1: to be white, or if it's meat, it has to
Speaker 1: be red. But I I just like red, so I
Speaker 1: just drink red with everything. But now Back in particular,
Speaker 1: I find I can. I can kind of, you know,
Speaker 1: pair with almost anything, which is which is just nice.
Speaker 1: But you know way that is that's because it's it
Speaker 1: has good acidity because of the high altitude, because it's
Speaker 1: not too hot, and then it's got these smooth tannins.
Speaker 1: So even with something that you know has some bitterness
Speaker 1: or it's it's really fatty, you know, the the smooth
Speaker 1: tannons of the acidity cut through it. And that's why,
Speaker 1: you know, I love what you're saying, that that you
Speaker 1: you compare mabic with almost anything, and that's why. Okay,
Speaker 1: let's talk price here, Laura. Um, and you should. I'm
Speaker 1: just curious bottle of this? Uh this right, Carol? Yes?
Speaker 1: How much does it run you? So that should be
Speaker 1: around twenty two dollars? You know. It's funny, Tim and I, Laura,
Speaker 1: we're talking off air, and I said, I've had some
Speaker 1: very expensive wine, and you know, I've also had not
Speaker 1: too expensive wine, and I feel like there's so much
Speaker 1: out there now, the offerings from vineyards and wineries, and
Speaker 1: that there's a whole idea that you have to spend
Speaker 1: a ton of money to get a great bottle of wine.
Speaker 1: It's not true. Yeah, well no, I'm we also have
Speaker 1: you know, a hundred dollar back. But I have to
Speaker 1: see that I agree with you that you know, for
Speaker 1: every day, you know, twenty dollars and then you want
Speaker 1: to age something special occasion, uh large a little bit,
Speaker 1: you know. Um, I don't know. I if there's one
Speaker 1: thing I will spend money on its wine. But you know,
Speaker 1: of course I'm I'm in in the industry. What's wine
Speaker 1: in shoes? Let's be let's be honest about what matters. Hey,
Speaker 1: can we talk about this? Can we talk about this book?
Speaker 1: It is beautiful and it really is um kind of
Speaker 1: it's a history, right of mal back. Tell us about
Speaker 1: this and why you wanted to put this out there? Yeah, so,
Speaker 1: you know, I felt that people didn't know the history
Speaker 1: of Maubec. Some people thought maybe it's something new that
Speaker 1: just showed up, because you know, you didn't see a
Speaker 1: lot of malbec in the United States twenty years ago,
Speaker 1: but it's been around for two thousand years. And I
Speaker 1: wanted to shout it out. And I also wanted to
Speaker 1: explain the subtleties of my back from the different veneers,
Speaker 1: the different kinds of soils. But I wanted to, you know,
Speaker 1: the winemaker that I've been working with for twenty years.
Speaker 1: He and I wanted to tell a story that would
Speaker 1: also be fun to read, because I think a lot
Speaker 1: of wine books are really boring and it's too much
Speaker 1: technical information. So it's history, it's something about flavor, but
Speaker 1: it's very playful. So he and I are illustrated going
Speaker 1: back in time and having conversations, and it's a new
Speaker 1: kind of book. It's an illustrated mixed with some texts,
Speaker 1: but there's a lot of really also um, you know,
Speaker 1: important information, but there's a lot of these, you know,
Speaker 1: more easy to read stuff. And it was reviewed in
Speaker 1: the New York Times, which is a very big deal
Speaker 1: in the book world. So I was very pleased about that,
Speaker 1: and it was a bestseller in Argentina. We already ran
Speaker 1: out of the first edition. Laura, who's the book for?
Speaker 1: Who did you want to write this book for. I
Speaker 1: wanted the book to be for people who love wine.
Speaker 1: You know, maybe if you're just getting started and you
Speaker 1: you know, if you don't know the difference between Caberney
Speaker 1: sewnon and pino noir, which is perfectly okay not to
Speaker 1: know that difference, we'll probably you should read you know,
Speaker 1: Wine for Dummies first, which is actually a great book,
Speaker 1: by the way, I know, I highly recommend it. I
Speaker 1: know the authors. It's actually highly technical, the great book.
Speaker 1: So maybe read first basic book about wine. But once
Speaker 1: you already know, okay, I love Savina Blanc, I love
Speaker 1: my back you know the varieties, you know some of
Speaker 1: the regions, then this book is for you. It will
Speaker 1: also teach you how does the producer make decisions during
Speaker 1: the harv why do you plant the vineyard in one
Speaker 1: place and not another? And it's written for an audience
Speaker 1: that should not be experts. So it's written for a
Speaker 1: wine lover that knows a little more than nothing about wine.
Speaker 1: That's Laura Kataina. She's managing director at katainas Abata Winery.
Speaker 1: Her book mall Beck Mona Moore is out now that
Speaker 1: wraps up the weekend edition a Bloomberg Business Week from
Speaker 1: Bloomberg Radio. Thanks so much for joining us. I'm Carol
Speaker 1: Masser and Tim Stanavk. Be sure to tune into Bloomberg
Speaker 1: Business Week. It's Monday through Friday, starting at two pm
Speaker 1: Wall Street Time on Bloomberg Radio. You can also watch
Speaker 1: her daily broadcast on YouTube. Just search Bloomberg Global News
Speaker 1: and check out our Bloomberg Business Week podcast. You can
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Speaker 1: at Bloomberg dot com, at business week dot com and
Speaker 1: always on the Bloomberg terminal. You can also see me
Speaker 1: on Bloomberg quick Take. It's available at bloomberg dot com,
Speaker 1: slash qt, and streaming platforms like Roku TV, Apple TV,
Speaker 1: Samsung TV and more. Have a good weekend. Stay safe everyone.
Speaker 1: This is Bloomberg.