WEBVTT - Bloomberg Wall Street Week - July 21st, 2023 0:00:00.240 --> 0:00:02.440 This is Bloomberg Wall Street Week. 0:00:02.480 --> 0:00:04.400 And we may not have an overall recession, We're having 0:00:04.400 --> 0:00:06.760 a rolling recession to conge roll looks pretty strongly it 0:00:06.800 --> 0:00:07.680 is when it comes to jobs. 0:00:07.720 --> 0:00:09.840 The financial stories that shape our world. 0:00:09.960 --> 0:00:13.640 Three major regional bank failures send shockwaves through the banking system. 0:00:13.680 --> 0:00:15.440 We're all trying to figure out what to make of 0:00:15.600 --> 0:00:17.000 generative AI. 0:00:16.920 --> 0:00:19.320 Through the eyes of the most influential voices. 0:00:19.440 --> 0:00:22.400 Welcome down, Doctor Paul Krugman, Ryan moynihan, Bank of America, 0:00:22.560 --> 0:00:25.279 deebro Lair of the Paulson Institute, well then Hubbard of 0:00:25.280 --> 0:00:26.280 the Columbia Business School. 0:00:26.280 --> 0:00:30.480 Bloomberg Wall Street Week with David Weston from Bloomberg Radio. 0:00:30.680 --> 0:00:34.760 Taking different paths. China slows down as the United States 0:00:34.840 --> 0:00:38.239 heads toward a soft landing after all, and Morgan Stanley 0:00:38.240 --> 0:00:42.600 fires on all cylinders while Goldman reboots. This is Bloomberg 0:00:42.640 --> 0:00:46.640 Wall Street Week. I'm David Weston. This week contributors Larry 0:00:46.680 --> 0:00:49.360 Summers of Harvard and Steve Rattner of will It Advisors 0:00:49.520 --> 0:00:52.559 on what generative AI could mean for the economy and 0:00:52.760 --> 0:00:53.720 for investors. 0:00:54.640 --> 0:00:58.280 I have a suspicion that AI is coming for the 0:00:58.400 --> 0:00:59.760 cognitive clash. 0:01:00.440 --> 0:01:03.280 History is probably still on the side that we will 0:01:03.280 --> 0:01:05.319 find our way through this in a positive way. 0:01:06.160 --> 0:01:08.840 Oh And Thomas of Boston Properties on just how bad 0:01:08.959 --> 0:01:10.839 it could get in commercial real estate. 0:01:11.720 --> 0:01:15.440 The sentiment is worse than the reality that we're experiencing. 0:01:16.000 --> 0:01:19.240 And Dennis Arfa of Artist Group International about what Taylor 0:01:19.280 --> 0:01:23.000 Swift's billion dollar tour means for the business of music. 0:01:23.840 --> 0:01:26.080 She's raised the bar, she said, a new bar. 0:01:39.440 --> 0:01:39.800 Global. 0:01:39.800 --> 0:01:43.160 Wall Street spent the week looking two different directions as 0:01:43.280 --> 0:01:46.880 China economic numbers once again pointed to a disappointing year. 0:01:47.840 --> 0:01:50.280 The private sector is a big part of the Chinese economy. 0:01:50.440 --> 0:01:53.960 They're just not spending or investing like they used to, and. 0:01:53.920 --> 0:01:56.920 Kris Delina Giorgieva of the IMF warned about what that 0:01:57.120 --> 0:02:00.200 could mean for the rest of the world. 0:02:00.040 --> 0:02:05.840 In a slowing down, of course, affects Setia, affects the worlds. 0:02:06.200 --> 0:02:08.040 But at the same time that the numbers seem to 0:02:08.040 --> 0:02:10.960 be getting worse in China, they continue to point towards 0:02:10.960 --> 0:02:14.200 strength in the United States, leading Treasury Secretary of Yellen 0:02:14.240 --> 0:02:17.080 to say a US recession may be off the table. 0:02:17.880 --> 0:02:19.760 I don't expect a recession. 0:02:20.240 --> 0:02:24.200 I think that we're on a good pass to bringing 0:02:24.280 --> 0:02:26.280 inslation downs that. 0:02:26.440 --> 0:02:29.360 Stronger than we saw at US economy helped most of 0:02:29.400 --> 0:02:32.560 the big banks do better than we expected on their earnings, 0:02:32.760 --> 0:02:35.960 led by Morgan Stanley, with CEO James Gorman chalking the 0:02:36.000 --> 0:02:39.120 success up to three basic things. 0:02:39.280 --> 0:02:43.919 The combination of really high conservative capital levels, pl vious. 0:02:43.840 --> 0:02:47.760 Organic growth within a couple of cool businesses, and very 0:02:47.880 --> 0:02:51.200 high diven end yeok. But things weren't quite as rosy 0:02:51.280 --> 0:02:53.920 over at Gold and Sachs, with reduced profits in part 0:02:53.960 --> 0:02:56.880 because of challenges in the commercial real estate business. 0:02:57.320 --> 0:02:59.560 They have about twenty eight billion dollars in loans in 0:02:59.560 --> 0:03:02.760 the commercial real estate space, so that's about fifteen percent 0:03:02.760 --> 0:03:04.600 of their total lown portfolio. 0:03:04.560 --> 0:03:07.880 And CEO David Solomon admitted that the bank is going 0:03:07.919 --> 0:03:12.280 through something of a rebuilding period. We're making tough decisions 0:03:12.280 --> 0:03:15.679 that are driving the strategic evolution of firm. Given both 0:03:15.680 --> 0:03:18.160 these factors, that should come as no surprise that we're 0:03:18.200 --> 0:03:22.519 going to a period of lower results through it all, 0:03:22.600 --> 0:03:25.640 The S and P five hundred continued, it's surprising march upward, 0:03:25.800 --> 0:03:28.160 adding another seven tens of an percent to end the 0:03:28.160 --> 0:03:30.920 week at forty five thirty six, way above where the 0:03:30.919 --> 0:03:34.240 Bloomberg elves had been, although in fairness, the Elves have 0:03:34.320 --> 0:03:37.360 been taking their median estimate up now indicating a forty 0:03:37.400 --> 0:03:39.920 three hundred SMP by the end of the year. The 0:03:40.040 --> 0:03:42.839 NANTSAC didn't do quite well, giving up just under six 0:03:42.920 --> 0:03:45.400 tens percent, while the yield and the tenure was just 0:03:45.480 --> 0:03:48.040 about flat, hanging out at three point eight three, though 0:03:48.040 --> 0:03:50.600 it did dip as low as three point seven three 0:03:50.640 --> 0:03:52.920 on Wednesday and then flirted with three point eighty seven 0:03:53.240 --> 0:03:55.080 late on Thursday. To take us through the week in 0:03:55.160 --> 0:03:57.400 the markets and what investors should make of then we 0:03:57.400 --> 0:04:00.560 welcome back Sarah Malak, she's Nouvene chief Invents one officer, 0:04:00.720 --> 0:04:03.800 and Christina Hooper and Vesco chief Global Market Strategy. So 0:04:03.840 --> 0:04:06.040 welcome to both of you. Thanks for being back with this. 0:04:06.200 --> 0:04:08.280 Let me start with you. As for Christina, what did 0:04:08.320 --> 0:04:09.400 you make of the week of the markets? 0:04:09.840 --> 0:04:13.320 So I was happy to see a continued broadening in markets. 0:04:13.440 --> 0:04:16.320 So we didn't see tech do well, but that's okay 0:04:16.600 --> 0:04:20.440 because there was more participation from a variety of sectors. 0:04:20.800 --> 0:04:24.000 So I think in general this is a fairly healthy environment, 0:04:24.080 --> 0:04:27.680 but we should expect that it's not surprising if we 0:04:27.800 --> 0:04:30.640 get some kind of pullback we've had a strong rally 0:04:30.680 --> 0:04:33.719 this year, there should be or there should likely be, 0:04:33.839 --> 0:04:36.840 a digestion period over the coming months, So a. 0:04:36.800 --> 0:04:38.760 Broadening in the market. Do you see that as well, Sarah, 0:04:38.839 --> 0:04:42.080 We actually at Bloomberg have a chart indicating the relationship 0:04:42.080 --> 0:04:44.080 between small caps and the S and P five hundred, 0:04:44.120 --> 0:04:46.560 suggesting is a bigger divergence that there been in twenty years. 0:04:46.600 --> 0:04:48.680 Are you seeing a broadening of the markets or not. 0:04:49.880 --> 0:04:52.240 Well, there's three reasons why the bulls beat the bears 0:04:52.279 --> 0:04:55.680 again this week. One is broader participation in the indexes, 0:04:55.760 --> 0:04:58.760 Second is inflation, which is continuing to moderate, and third, 0:04:58.800 --> 0:05:01.719 of course is earning seas and so participation rate for 0:05:01.800 --> 0:05:04.800 everything outside of those top ten technology socks has been 0:05:04.920 --> 0:05:07.320 very strong since June. First, that's a healthy sign for 0:05:07.360 --> 0:05:10.880 the markets. Moderating inflation with CPI and PPI coming in 0:05:11.240 --> 0:05:14.320 under expectations is another positive. But we are still concerned 0:05:14.360 --> 0:05:17.440 about wage inflation and core inflation, which remains above the 0:05:17.480 --> 0:05:18.160 FEDCE target. 0:05:18.400 --> 0:05:20.400 So sure, we're still early on in the earning scenes 0:05:20.480 --> 0:05:22.880 so far, so we'll have to find out what actually happens. 0:05:22.960 --> 0:05:24.240 But where are you in the S and P five 0:05:24.279 --> 0:05:25.279 hundred by the end of the year. 0:05:26.320 --> 0:05:29.080 We still think there's upside as long as employment markets 0:05:29.080 --> 0:05:31.960 remain strong and the consumers keep spending, and you tend 0:05:31.960 --> 0:05:34.400 to see that when people are comfortable with their jobs, 0:05:34.560 --> 0:05:36.920 they will keep spending money. I think the market still 0:05:36.960 --> 0:05:39.320 has upside if that's the case now. I do acknowledge 0:05:39.520 --> 0:05:42.760 sixteen months of monetary tightening, including what we think is 0:05:42.800 --> 0:05:45.159 one more rate hike next week until and then we're 0:05:45.160 --> 0:05:47.719 done with rate hikes for a while. But all of 0:05:47.760 --> 0:05:49.680 that putting together, as long as we don't see a 0:05:49.760 --> 0:05:51.960 recession this year, which we doubt that we will, I 0:05:51.960 --> 0:05:55.120 think the markets keeps climbing higher. Technology. I wouldn't count 0:05:55.160 --> 0:05:56.880 that out either. It has a lot of tailwinds like 0:05:56.920 --> 0:06:00.760 lower inflation, heels that are moderating, and artificial intelligence. I 0:06:00.760 --> 0:06:03.440 think tech sucks also will continue to move higher once 0:06:03.480 --> 0:06:03.840 they can. 0:06:03.760 --> 0:06:05.440 Solve what eight David. 0:06:05.520 --> 0:06:08.760 I don't disagree with Sarah. I think after that digestion 0:06:08.880 --> 0:06:10.840 period that I talked about and the potential for a 0:06:11.080 --> 0:06:14.800 modest pullback, what we're likely to see is some improvement 0:06:15.080 --> 0:06:17.400 in the S and P five hundred by year end. 0:06:17.880 --> 0:06:20.799 And I would argue that that is being fueled by 0:06:20.839 --> 0:06:22.920 what I will call a bumpy landing. I don't think 0:06:22.920 --> 0:06:24.640 it's a soft landing, but I don't think we go 0:06:24.720 --> 0:06:28.919 into any kind of significant, broad based recession. We're also 0:06:29.080 --> 0:06:31.880 going to see history help us. What we know is 0:06:31.920 --> 0:06:34.760 that when the FED stops hiking rates, typically in the 0:06:34.800 --> 0:06:38.400 one year period the two years after the end of 0:06:38.480 --> 0:06:42.120 rate hikes, that is when we tend to see good performance, 0:06:42.760 --> 0:06:45.600 strong returns, usually from the S and P five hundred. 0:06:45.800 --> 0:06:47.760 I don't think this is going to be different this year, 0:06:47.960 --> 0:06:51.800 especially since this time around, this kind of downturn is 0:06:51.839 --> 0:06:55.279 a job full downturn, and so we see the consumer 0:06:55.360 --> 0:06:59.839 continuing to spend, as Sarah mentioned, because they have jobs 0:07:00.160 --> 0:07:04.839 and they can spend, and with inflation coming down that 0:07:05.000 --> 0:07:08.200 also helps helps with discretionary spend. 0:07:09.360 --> 0:07:11.320 If it is summer, it is time to catch some 0:07:11.400 --> 0:07:14.160 live music, and this summer, the biggest live music that 0:07:14.200 --> 0:07:17.120 there is out there comes from Taylor Swift, whose Eras 0:07:17.160 --> 0:07:20.480 tour is expected to bring in a billion dollars. Welcome now, 0:07:20.520 --> 0:07:23.720 Dennis Arfa. He's head of Global Music at IAG. He 0:07:23.720 --> 0:07:27.120 has represented artists such as Billy Joel, Metallica, Rod Stewart, 0:07:27.120 --> 0:07:29.680 and many others. Thanks so much, Dennis for being with 0:07:29.760 --> 0:07:34.640 us appreciated. So we have a sense as fans, as 0:07:34.680 --> 0:07:37.600 people who follow Tyror Swift that she's really big. But 0:07:37.720 --> 0:07:39.600 for the music business, how big is she? 0:07:40.560 --> 0:07:45.720 Well, what she has accomplished with her tour is unprecedented. 0:07:46.400 --> 0:07:51.000 Never before have we ever seen an artist put multiple 0:07:51.040 --> 0:07:55.240 stadium shows on sale in the same city and blow 0:07:55.280 --> 0:07:59.160 them all out on the on sale, and that's never happened. 0:07:59.760 --> 0:08:02.720 And so she's raised the bar, she said, a new bar, 0:08:03.520 --> 0:08:08.280 because now that somebody can play whatever I believe it's 0:08:08.320 --> 0:08:10.480 fifty one stadium shows and sell it out on the 0:08:10.560 --> 0:08:15.080 on sale is incredible. It's what I'd call a beatlesque. 0:08:15.560 --> 0:08:16.720 It's what we would. 0:08:16.480 --> 0:08:20.640 Have expected the Beatles to do had they been touring 0:08:20.760 --> 0:08:24.920 in prime time as today they would kind of we 0:08:24.920 --> 0:08:26.880 would expect to have that same kind of result. 0:08:27.280 --> 0:08:29.040 So we talked to investors. Here give us a sense 0:08:29.080 --> 0:08:31.880 of the economics of this. You refer to the Beatles. 0:08:32.600 --> 0:08:35.280 My understanding for reading about it is the economics were 0:08:35.280 --> 0:08:37.320 different back then, that a lot of the economics were 0:08:37.360 --> 0:08:40.240 driven by the records, the old LPs that we bought. 0:08:40.600 --> 0:08:43.480 Not so much anymore when we talk about perhaps a 0:08:43.520 --> 0:08:45.800 billion dollars in this tour, where does that money come from? 0:08:45.800 --> 0:08:46.680 How does it break down? 0:08:47.640 --> 0:08:51.719 Well, it breaks down from ticket sales and then the 0:08:52.200 --> 0:08:57.200 additional moneies that come from ticket sales, platinum tickets, VIP tickets, 0:08:57.559 --> 0:09:04.360 merchandising as a big gradient sponsorship, you know, so those 0:09:04.400 --> 0:09:09.120 are kind of the things that bring up the dollar amounts. 0:09:09.360 --> 0:09:11.040 But it's ticket sales is the base. 0:09:11.400 --> 0:09:13.320 We're just recorded music fit in anymore. 0:09:15.040 --> 0:09:19.040 Well, you know, today you can have a record that's 0:09:19.120 --> 0:09:23.439 number one and be one hundred thousand or fifty thousand units. 0:09:24.400 --> 0:09:28.800 Twenty five years ago, you know, many artists were selling 0:09:28.800 --> 0:09:33.880 a million, million albums, million records, you know, on release 0:09:34.200 --> 0:09:37.000 or you know, it was it was more common. So 0:09:37.760 --> 0:09:40.600 the album sales are diluted and the record sales are 0:09:40.600 --> 0:09:44.320 diluted in comparison to what it used to be. I mean, 0:09:44.720 --> 0:09:47.400 there's artists, whether it's the Eagles or Billy Joel and 0:09:47.840 --> 0:09:51.439 twenty four million, twenty seven million, Michael Jackson the Thriller, 0:09:51.760 --> 0:09:54.920 those numbers really don't exist, and if they do, they're 0:09:54.960 --> 0:09:59.560 really aberrations. The Adele success to Taylor Swift's success, those 0:09:59.600 --> 0:10:03.520 are our that really wasn't the case twenty five years ago. 0:10:03.960 --> 0:10:06.480 I have a lot of gold records and platinum records 0:10:06.480 --> 0:10:08.720 on my wall, and some of those artists you don't 0:10:08.720 --> 0:10:12.199 even know who they are. And today you know, if 0:10:12.200 --> 0:10:14.880 you did twenty five thousand in the week, you could 0:10:14.960 --> 0:10:16.160 end up being in the top ten. 0:10:16.559 --> 0:10:18.280 Okay, Dennis, thank you so much for being on Wall 0:10:18.320 --> 0:10:22.439 Street Week. That is Dennis Arfa. He's the founder of AGI. 0:10:23.760 --> 0:10:27.120 Coming up everywhere return we hear about problems with commercial 0:10:27.240 --> 0:10:29.880 real estate. We'll talk with the head of the largest 0:10:29.920 --> 0:10:32.680 public and traded developer of high end office space in 0:10:32.720 --> 0:10:35.000 the country, Owen Thomas of BXP. 0:10:35.440 --> 0:10:38.520 Remote work is like a benefit, it's like compensation. You 0:10:38.600 --> 0:10:39.680 have to meet the market. 0:10:41.720 --> 0:10:51.599 That's next on Wall Street Week on Bloomberg. This is 0:10:51.640 --> 0:10:54.560 Wall Street Week. I'm David Weston. This week brought another 0:10:54.720 --> 0:10:57.680 round of bad news and commercial real estate from Goldwyn 0:10:57.760 --> 0:10:59.960 Sacks sing a four hundred and eighty five million dollars 0:11:00.080 --> 0:11:02.440 it from the property market to news. Have yet another 0:11:02.480 --> 0:11:05.560 big mortgage default, this one for two hundred and twelve 0:11:05.640 --> 0:11:08.440 million dollars on an Atlanta office tower owned by Star 0:11:08.520 --> 0:11:11.280 would Capital. To put it all in a broader perspective, 0:11:11.440 --> 0:11:14.120 the good and maybe even the not so good. Welcome 0:11:14.120 --> 0:11:16.520 back now, Owen Thomas. He's chairman and CEO of XP 0:11:16.800 --> 0:11:19.760 that is the largest publicly traded developer of high end 0:11:19.840 --> 0:11:21.840 office space in the country. Own always great to have 0:11:21.920 --> 0:11:24.000 you with us, as I say, and you know, there's 0:11:24.000 --> 0:11:26.440 so much bad news in commercial real estate. Put in 0:11:26.480 --> 0:11:29.079 a larger perspective exactly where we are at this way? 0:11:29.160 --> 0:11:31.280 What are you seeing in your business particular in terms 0:11:31.280 --> 0:11:34.120 of occupancy rates? Are people really coming to the office yet? 0:11:34.280 --> 0:11:37.760 Yeah, Well, David's nice to be with you. I would 0:11:37.800 --> 0:11:40.719 say in summary that the sentiment is worse than the 0:11:40.760 --> 0:11:43.600 reality that we're experiencing. So let's talk a little bit 0:11:43.640 --> 0:11:47.840 about usage of buildings. There's a steady stream of corporate 0:11:47.880 --> 0:11:51.400 announcements going on right now. If companies returning to the 0:11:51.440 --> 0:11:55.439 office like Amazon did on May first, companies that were 0:11:55.440 --> 0:11:58.079 in the office three days a week moving to four days, 0:11:58.120 --> 0:12:02.240 even some companies saying we're going to evaluate all new 0:12:02.320 --> 0:12:05.560 employees based on your office attendance that you're in. So 0:12:05.640 --> 0:12:08.600 you're seeing more and more of this. I think CEOs 0:12:08.640 --> 0:12:13.400 all want more in person work. They recognize that remote 0:12:13.400 --> 0:12:16.240 work is like a benefit, it's like compensation you have 0:12:16.280 --> 0:12:18.280 to meet the market, but it comes with a real 0:12:18.400 --> 0:12:20.840 cost of productivity and culture. 0:12:21.000 --> 0:12:23.520 Are you seeing your buildings though, and actually people showing 0:12:23.600 --> 0:12:25.640 up because we have things like castle card reporting, it's 0:12:25.640 --> 0:12:28.280 still like fifty percent in Manhattan. Are you seeing it 0:12:28.320 --> 0:12:28.760 move up? 0:12:29.160 --> 0:12:32.840 So the building we don't use castle systems and a 0:12:32.880 --> 0:12:35.439 lot of the landlords that we compete with don't, So 0:12:35.720 --> 0:12:39.120 I know the industry uses their data, So I'll tell 0:12:39.120 --> 0:12:44.079 you what we're experiencing. So in New York and Boston, Tuesday, Wednesday, 0:12:44.120 --> 0:12:47.960 Thursday is more or less at pre pandemic attendance. I 0:12:48.000 --> 0:12:50.960 think Monday's about sixty percent of that peak and Friday's 0:12:50.960 --> 0:12:53.960 probably less than thirty percent of that peak. The West 0:12:53.960 --> 0:12:57.480 coast markets where we operate, Seattle, San Francisco, and LA 0:12:57.520 --> 0:13:00.360 they're probably fifty percent of all those known or so 0:13:00.440 --> 0:13:01.160 well behind. 0:13:01.440 --> 0:13:04.560 What about repurposing some of these others buildings because we've 0:13:04.600 --> 0:13:08.200 heard a lot about that and whether we're residential or 0:13:08.280 --> 0:13:10.440 I think you've been big in life sciences? Actually haven't 0:13:10.480 --> 0:13:11.080 you at VXB? 0:13:11.360 --> 0:13:11.560 Yes? 0:13:11.640 --> 0:13:14.040 How's that going? Is there too much of a move 0:13:14.080 --> 0:13:15.920 into life sciences? Are you seeing a glut? 0:13:16.080 --> 0:13:19.720 Yeah? Well, let me talk about the repurposing. We definitely 0:13:19.720 --> 0:13:23.920 have repurposed several office buildings successfully into life science, and 0:13:23.920 --> 0:13:26.600 we've done it very carefully in some of the premiere 0:13:26.800 --> 0:13:29.880 life science markets in the country. But on the residential 0:13:29.920 --> 0:13:32.840 conversions which you asked about, this is something that theoretically 0:13:32.840 --> 0:13:35.840 makes a tremendous amount of sense. We need more housing 0:13:35.840 --> 0:13:39.320 in our cities. We need less obsolescent office buildings, we 0:13:39.360 --> 0:13:42.559 need more real estate tax revenues, we need more activity 0:13:42.559 --> 0:13:45.280 on the street. And when you repurpose an asset, the 0:13:45.360 --> 0:13:48.560 carbon footprint of doing that is much lower than demolishing 0:13:48.600 --> 0:13:53.560 and reconstructing. However, there are obstacles to doing all these things. 0:13:53.600 --> 0:13:59.720 Regulatory zoning requirements, residential zoning versus commercial zoning, physical requirements. 0:14:00.000 --> 0:14:03.680 Building has to be empty, the depth of the buildings. 0:14:03.760 --> 0:14:06.560 Residential needs more light and air than office, and many 0:14:07.000 --> 0:14:11.040 office buildings have deep floor plates. And then financial you know, 0:14:11.120 --> 0:14:13.960 to do a successful conversion, the office building has to 0:14:13.960 --> 0:14:16.959 be contributed at something pretty close to land value. So 0:14:17.080 --> 0:14:19.120 there it makes a tremendous amount of sense. There are 0:14:19.120 --> 0:14:21.280 a lot of obstacles, but I would think about it 0:14:21.280 --> 0:14:24.720 this way, David. There are four hundred million square feet 0:14:24.880 --> 0:14:27.840 of office space in New York. If one to two 0:14:27.920 --> 0:14:31.880 percent was converted, that's four to eight million square feet 0:14:32.240 --> 0:14:35.160 of new housing, and it's also probably you know, five 0:14:35.200 --> 0:14:38.200 to ten percent of the vacant office building, so not 0:14:38.320 --> 0:14:40.560 a lot, as a percent has to happen for it 0:14:40.600 --> 0:14:41.560 to be meaningful. 0:14:41.880 --> 0:14:45.320 You raised the geography question because you particularly are obviously 0:14:45.360 --> 0:14:48.360 in Boston, but also New York, San Francisco. Some of 0:14:48.360 --> 0:14:50.520 the cities have been hit a little harder when it 0:14:50.520 --> 0:14:54.240 comes to residential I'm sorry, office space. Are you thinking 0:14:54.240 --> 0:14:56.360 about going to other places? We hear a lot about Austin, 0:14:56.400 --> 0:14:59.000 we hear about Miami, we hear about Florida. Are you 0:14:59.000 --> 0:15:01.640 thinking about expanding into the geographic areas well. 0:15:01.680 --> 0:15:05.800 We're very happy with our footprint. We believe in having 0:15:05.840 --> 0:15:08.960 real estate where they are barriers to new supply and 0:15:09.040 --> 0:15:12.760 also knowledge clusters of workers, and we think our cities 0:15:12.800 --> 0:15:16.040 have those. There's clearly been some migration to the Sun Belt, 0:15:16.080 --> 0:15:18.280 and there's been strong growth in the Sun Belt markets, 0:15:18.320 --> 0:15:20.640 but there's also been a lot of development. If you 0:15:20.680 --> 0:15:23.040 look at the vacancy rates in many of the Sun 0:15:23.080 --> 0:15:26.600 Belt cities, they've gone up very significantly over the last 0:15:26.680 --> 0:15:28.760 year to eighteen months, and in many cases are above 0:15:28.800 --> 0:15:31.720 the vacancy rates in the cities where we operate when. 0:15:31.560 --> 0:15:34.320 You're in a particular position, which is a publicly traded company, 0:15:34.760 --> 0:15:37.120 the largest publicly traded company when it comes to high 0:15:37.200 --> 0:15:40.119 end office buildings, which means you have a lot of resources, 0:15:40.240 --> 0:15:41.880 access to a lot of resources, and you have to 0:15:42.160 --> 0:15:44.040 there's a marked to market every single day in a 0:15:44.200 --> 0:15:47.120 sense that's affected your stock like every else's. As you 0:15:47.200 --> 0:15:49.720 look at it right now, do you see opportunities? I mean, 0:15:49.960 --> 0:15:52.160 are there bargains out there, because in fact there are 0:15:52.240 --> 0:15:56.040 problems getting financing, the prices are coming down. I think 0:15:56.080 --> 0:15:56.520 there are. 0:15:57.000 --> 0:15:59.720 We So for example, we launched at the end of 0:15:59.800 --> 0:16:03.160 last year a billion and a half dollars of life 0:16:03.200 --> 0:16:06.360 science development in East Cambridge. We're building a six hundred 0:16:06.480 --> 0:16:10.200 plus thousand square foot lab building for AstraZeneca at attractive 0:16:10.280 --> 0:16:14.600 yields to our shareholders. We're also converting another significant office 0:16:14.600 --> 0:16:18.600 building in East Cambridge to life science for the Broad Institute, 0:16:18.640 --> 0:16:21.760 also at attractive yields. So those are the types of 0:16:21.800 --> 0:16:23.800 things that we've been investing in. But I think as 0:16:24.880 --> 0:16:28.760 this market evolves and there's more pricing, discovery and a reset, 0:16:28.840 --> 0:16:32.040 I do think it will create great opportunities for a 0:16:32.040 --> 0:16:33.880 well capitalized player like BXP. 0:16:34.080 --> 0:16:35.640 Thank you so much, Always a treat to have you 0:16:35.680 --> 0:16:39.600 with us. That's Owen Thomas of b XP. To everything 0:16:39.640 --> 0:16:42.720 there is a season, but sometimes that season can last 0:16:42.840 --> 0:16:46.800 pretty long. It's the summer of everything old being new again. 0:16:47.280 --> 0:16:49.400 We're a year away from the true start to the 0:16:49.440 --> 0:16:51.600 next presidential race, and a lot of the focus is 0:16:51.600 --> 0:16:54.480 already on the age of the two front runners, as 0:16:54.560 --> 0:16:57.800 former President Trump, a spry seventy seven year old, looks 0:16:57.840 --> 0:17:00.720 to reclaim the White House from the more senior President Biden, 0:17:00.800 --> 0:17:04.160 clocking in at a mature eighty. But then again, Senate 0:17:04.160 --> 0:17:07.800 Minority Leader Mitch McConnell beats them both at eighty one, 0:17:07.840 --> 0:17:10.520 and some of those after mister Biden's job aren't too 0:17:10.560 --> 0:17:13.600 shy about showing off how useful and vigorous they are. 0:17:13.920 --> 0:17:17.320 From Robert Kennedy Junior doing bear chested pushups for the 0:17:17.320 --> 0:17:20.919 camera at age sixty nine, it's a good boy to 0:17:20.960 --> 0:17:23.240 the baby in the group. Forty five year old Miami 0:17:23.280 --> 0:17:27.080 mayor Francis Suarez demonstrating he can run all over town 0:17:27.440 --> 0:17:30.359 in a tight T shirt and shorts. I'm going to 0:17:30.440 --> 0:17:33.199 run for present. It's not just Washington where the mature 0:17:33.280 --> 0:17:36.639 are showing their staying power. Bob Iger retired as CEO 0:17:36.680 --> 0:17:40.080 of Disney at age seventy after fifteen years running the company, 0:17:40.400 --> 0:17:43.560 only to come back for return performance with a contract 0:17:43.560 --> 0:17:45.840 that now will keep him in charge until he's at 0:17:45.920 --> 0:17:49.320 least seventy five. This isn't really a huge surprise, right 0:17:49.400 --> 0:17:52.040 that his contract has been renewed at this point. It's 0:17:52.080 --> 0:17:55.160 incredibly enticing, I think, and very tempting to keep him 0:17:55.160 --> 0:17:57.760 on board. But Bob is just the right age to 0:17:57.800 --> 0:17:59.960 deal with. Some of the leading men driving the box 0:18:00.080 --> 0:18:03.119 office this summer. From Tom Cruise at sixty starring in 0:18:03.200 --> 0:18:07.560 yet another mission Impossible, I don't accept that. To Arnold 0:18:07.560 --> 0:18:11.040 Schwarzenegger at seventy five saving the world in Foo Bar 0:18:11.680 --> 0:18:15.240 I'm retired. To Harrison Ford returning as Indiana Jones at 0:18:15.240 --> 0:18:18.440 age eighty. I've been looking for this all my life. 0:18:18.960 --> 0:18:22.440 But wait, there's more. The star of what may well 0:18:22.520 --> 0:18:25.359 be the hit movie of the summer tops them all 0:18:25.400 --> 0:18:29.119 at the age of eighty three. Yes, eighty three years old, 0:18:29.200 --> 0:18:32.080 and she is a leading lady. I'm talking, of course, 0:18:32.119 --> 0:18:34.840 about the one and only Barbie. You might say, no, 0:18:35.160 --> 0:18:38.639 Barbie is only nineteen. Well, that is the age she 0:18:38.800 --> 0:18:40.520 was when she first appeared. 0:18:40.400 --> 0:18:43.520 My Barbie Dull is really. 0:18:44.520 --> 0:18:47.040 But that was back in nineteen fifty nine. Since then, 0:18:47.080 --> 0:18:50.960 she's come back again and again, including for the Millennium, 0:18:51.000 --> 0:18:53.320 when she made a guest appearance on Wall Street Week 0:18:53.400 --> 0:18:56.359 with Lewis Rockeiser for Christmas back in two thousand. 0:18:56.760 --> 0:19:01.600 Barbie is stating another of her periodic comebacks, Betell's Millennium 0:19:01.600 --> 0:19:05.440 Princess version as a hot seller this season at forty dollars. 0:19:05.160 --> 0:19:07.959 And now Barbie is back bigger than ever in her 0:19:08.000 --> 0:19:11.720 own blockbuster movie as a thoroughly mature eighty three year old, 0:19:12.040 --> 0:19:14.840 something that even Barbie herself may not want to think 0:19:14.880 --> 0:19:17.359 too hard about. The best day ever. It is the 0:19:17.400 --> 0:19:18.080 best day ever. 0:19:18.280 --> 0:19:21.600 So is yesterday, and so is tomorrow. In every daypnurship. 0:19:21.080 --> 0:19:23.840 Forever, you don't ever think about nine. 0:19:24.119 --> 0:19:29.680 Here's to eternal use coming up. We're told the generative 0:19:29.720 --> 0:19:32.000 AI will change all of our lives in ways we 0:19:32.200 --> 0:19:35.320 just can't imagine. We put together a special Wall Street 0:19:35.359 --> 0:19:38.239 Week roundtable of Larry Summers and Steve Radner to give 0:19:38.320 --> 0:19:40.439 us an early read and the possible effects of this 0:19:40.560 --> 0:19:44.399 revolution on macroeconomics and on investors. 0:19:44.960 --> 0:19:49.160 Here's a substantial chance the AI is going to be 0:19:49.640 --> 0:19:53.199 much more of a threat to IQ than it is 0:19:53.320 --> 0:19:53.840 to EQ. 0:19:54.440 --> 0:19:56.760 It is the cognitive classes, as you call them, who 0:19:56.800 --> 0:19:57.680 are most at risk. 0:19:57.960 --> 0:19:59.960 This is Wall Street Week on Bloomberg. 0:20:01.840 --> 0:20:06.080 This is Bloomberg Wall Street Week with David Weston from 0:20:06.200 --> 0:20:08.800 Bloomberg Radio. 0:20:14.359 --> 0:20:18.199 Artificial intelligence. We may not yet know exactly what it is, 0:20:18.320 --> 0:20:21.800 even though the technology isn't all that new, but everyone 0:20:21.840 --> 0:20:24.040 agrees it's going to be huge. 0:20:24.359 --> 0:20:27.800 We don't know yet all of the different applications that 0:20:27.840 --> 0:20:28.600 are going to come up. 0:20:28.640 --> 0:20:29.720 Well, you're seeing that just. 0:20:29.680 --> 0:20:33.520 Swipping the past six months is a revolution. 0:20:33.480 --> 0:20:36.760 With Julie's Sweet of accenture saying just about all executives 0:20:36.760 --> 0:20:38.840 believe it will change their world. 0:20:39.320 --> 0:20:42.080 In fact, ninety seven percent of executives and a recent 0:20:42.119 --> 0:20:44.960 survey that we did have said they believe that Jenna 0:20:45.080 --> 0:20:48.600 I will transform their industry and their company, leading. 0:20:48.320 --> 0:20:52.080 Those funding startups to shift their investments. With Pitchbook reporting 0:20:52.200 --> 0:20:55.800