WEBVTT - Credit Suisse, Inflation, And Tesla (Podcast) 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day, we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.520 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.279 at Bloomberg dot com slash podcast. You know what I 0:00:22.360 --> 0:00:24.160 like to do on the Bloomberg terminals, Look at the 0:00:24.200 --> 0:00:26.720 league tables, Matt, You know for the investment banks, and 0:00:27.160 --> 0:00:30.040 you know who's doing what in equity underwriting? Don't you 0:00:30.040 --> 0:00:31.920 get bored of that? It's always Goldman Stacks right at 0:00:31.960 --> 0:00:34.040 the top. What's not this time, big guy? It is 0:00:34.680 --> 0:00:38.120 China has an investment called citic C I T I 0:00:38.280 --> 0:00:41.400 C and they're kind of number one interns of equity issuance. 0:00:41.400 --> 0:00:43.040 I want to figure out what's going on there? So 0:00:43.400 --> 0:00:44.800 what are we doing? When we want to talk about 0:00:44.840 --> 0:00:48.080 Wall Street, we go to Alison Williams. She's been covering 0:00:48.200 --> 0:00:51.440 the investment banks on Wall Street for decades, first at 0:00:51.479 --> 0:00:53.800 Morgan Stanley Investment Management and for the last i'm gonna 0:00:53.800 --> 0:00:56.680 say thirteen years. She was one of our absolute first hires. 0:00:57.440 --> 0:01:02.080 At Bloomberg Intelligence. Umus Williams, Senior Global Banks and Asset 0:01:02.080 --> 0:01:06.000 Manager Analysts for Bloomberg Intelligence. Allison talk to us about 0:01:06.040 --> 0:01:09.880 CITIC securities. Who are they? What are they? And boy 0:01:09.959 --> 0:01:12.360 they got they're pretty big here there. They beat up 0:01:12.400 --> 0:01:16.480 Goldman Sacks, so they are. But there's two key things 0:01:16.560 --> 0:01:20.320 going on, which is UM. You know, there's no denying 0:01:20.360 --> 0:01:23.120 the slump here in the US in terms of I 0:01:23.319 --> 0:01:28.760 P O S. And really Asia is the big driver 0:01:29.040 --> 0:01:32.160 of of issuance that we're seeing here to date. CIDEC 0:01:32.520 --> 0:01:35.759 is a key player in their local market, and so 0:01:36.319 --> 0:01:39.120 UM to some extent. If we take a step back 0:01:39.240 --> 0:01:44.600 and we look at equity issuance excluding Asia, you would 0:01:44.640 --> 0:01:48.160 still see Golden Sacks at the top of that table. 0:01:48.240 --> 0:01:51.520 So Goldman Sacks and Morgan Stanley City JP, Morgan Bank 0:01:51.560 --> 0:01:54.160 America if we sort of exclude the Asia market, but 0:01:54.240 --> 0:01:58.160 definitely in Asia, some of the local players doing very 0:01:58.200 --> 0:02:01.200 well there. And given that that is where we're seeing 0:02:02.080 --> 0:02:04.720 UM the majority of the action this year, it's not 0:02:04.760 --> 0:02:07.919 surprising that that those local players are sort of topping 0:02:07.920 --> 0:02:13.880 the global table. So Alison, with the SMP down this year, 0:02:14.080 --> 0:02:16.959 no surprise that there having been a lot of new 0:02:17.000 --> 0:02:20.239 equity issuance or equity issuance issues in general. Here is 0:02:20.280 --> 0:02:22.639 there a sense that there's a huge backlog out there 0:02:22.720 --> 0:02:25.240 and when the market, you know, rallies off the bottom, 0:02:25.240 --> 0:02:27.359 that will see more activity. How does that typically work? 0:02:28.200 --> 0:02:31.359 That's been the hope, and so I think for most 0:02:31.360 --> 0:02:33.880 of this year what we've heard from the global investment 0:02:33.919 --> 0:02:38.919 banks is that pipelines are stalled, and so we hadn't 0:02:38.960 --> 0:02:42.440 necessarily seen pulling of deals. We've just seen sort of 0:02:42.480 --> 0:02:45.400 the backlogs sitting there, and so it really has um 0:02:45.440 --> 0:02:51.360 come down to lack of execution. UM. But I think 0:02:51.400 --> 0:02:53.640 that some of the banks may have been sort of 0:02:53.680 --> 0:02:58.200 holding out September and October sort of the key months 0:02:58.320 --> 0:03:00.720 or you know, the key busiest and says, we get 0:03:00.760 --> 0:03:04.040 into this second half UM, and with the tougher markets 0:03:04.040 --> 0:03:07.120 in September, we wonder if we're going to be hearing 0:03:07.160 --> 0:03:09.560 in a couple of weeks some of the decaying of 0:03:09.600 --> 0:03:13.639 those pipelines from the investment banks. Alison, how important are 0:03:14.040 --> 0:03:16.160 the league tables? I never worked at a bank. I 0:03:16.200 --> 0:03:18.520 did cold calls at a bucket shop for a while, 0:03:18.560 --> 0:03:21.240 and then I interned at a broker dealer. But in 0:03:21.360 --> 0:03:24.280 terms of um, the IB guys how much and and 0:03:24.440 --> 0:03:27.280 gals how much do they care about the league tables 0:03:27.280 --> 0:03:31.480 and their their ranks? Well, two things they do care 0:03:31.720 --> 0:03:35.320 very much. Um, they care about the bragging rights. Of course, 0:03:35.680 --> 0:03:39.920 you know we do want to be the bankers, want 0:03:39.920 --> 0:03:42.840 to be the ones getting deals. Um, they do care 0:03:42.840 --> 0:03:44.880 about having the bragging rights. But as Paul will tell 0:03:44.920 --> 0:03:47.680 you as someone who helped to drive the numbers behind 0:03:47.720 --> 0:03:50.400 those league tables, is that you know, the league tables 0:03:50.440 --> 0:03:55.200 can show any given bank as number one depending on 0:03:55.560 --> 0:03:59.640 how you formulate the bad league table. Yes, you massage 0:03:59.680 --> 0:04:01.920 those and the mom in the number of deals priced 0:04:01.920 --> 0:04:04.520 between Tuesday and Thursday. You know that's how we did. 0:04:04.640 --> 0:04:06.280 But a bank will a bank or us will you 0:04:06.320 --> 0:04:09.680 walk in? Will you you walk into your boss's office 0:04:09.920 --> 0:04:12.400 with the league table and say like, give me more money? 0:04:12.640 --> 0:04:15.000 You know I moved us to number two from number 0:04:15.040 --> 0:04:17.599 five or no. I usually just would just say pay 0:04:17.680 --> 0:04:19.560 me more money. I'm walking across the street. But those 0:04:19.640 --> 0:04:23.279 days are long gone. Allison remembers those days. Alison, let's 0:04:23.279 --> 0:04:27.680 switch gears here. My good friends at Credit Swiss. Boy, 0:04:27.760 --> 0:04:30.400 we were awesome back in the day, but they cannot 0:04:30.520 --> 0:04:33.080 get out of their way. Here is there any future 0:04:33.680 --> 0:04:37.360 for the Credit Swiss investment bank maybe outside of Switzerland? 0:04:37.680 --> 0:04:39.760 What is it? What is it? We saw the cost 0:04:39.800 --> 0:04:43.560 to ensure Credit Swiss debt rise fifteen percent, like over 0:04:43.640 --> 0:04:46.799 the weekend, we saw the shares um you know, collapse 0:04:46.880 --> 0:04:49.719 this morning. I don't know why, Alison, what, What's what's 0:04:49.800 --> 0:04:54.440 driving that? What's driving that is that we have number one, 0:04:54.480 --> 0:04:58.800 a tough global market, right and then on top of that, 0:04:58.839 --> 0:05:02.039 we have a bank that has said they're considering their options. 0:05:02.240 --> 0:05:05.920 There's a lot of uncertainty around what those options might be. UM. 0:05:05.960 --> 0:05:08.680 If one of the options includes a capital raise, it's 0:05:08.720 --> 0:05:11.240 always going to be tough UM for a stock to 0:05:11.440 --> 0:05:17.080 study when the amount of potential issuance and delusion is unknown. 0:05:17.120 --> 0:05:20.160 And so I think in general, it's always a tough 0:05:20.200 --> 0:05:22.600 time when a bank says the strategy is coming and 0:05:22.640 --> 0:05:26.080 then there's several weeks ahead of getting the actual effects 0:05:26.160 --> 0:05:33.000 because UM investors getting patient. Tough markets increase the impatience, 0:05:33.160 --> 0:05:36.440 and there's really nothing that management can say or do 0:05:36.560 --> 0:05:38.880 in the meantime to sort of study that. And so 0:05:38.960 --> 0:05:42.280 we've we've been seeing that with Credits Weasis management coming 0:05:42.279 --> 0:05:44.480 out a few times and saying you know, we're working 0:05:44.480 --> 0:05:46.920 on it. We're working on it. But um, as we 0:05:47.040 --> 0:05:51.880 know from prior periods of market stress, UM, it's just 0:05:52.200 --> 0:05:57.680 tough to instill confidence when the markets are behaving, especially um, 0:05:57.680 --> 0:06:01.520 when the global broader market is tough. Alison, I mean, 0:06:02.120 --> 0:06:04.880 is there any scenario where they merge with the ubs 0:06:05.000 --> 0:06:08.400 or the Swiss government just not allow that. I still 0:06:08.440 --> 0:06:12.640 think that's doubtful. UM. I think that probably the more 0:06:13.200 --> 0:06:17.400 likely UM thing that happens is they do have to 0:06:17.600 --> 0:06:22.280 capital intensive businesses, securitized products, trading, credit trading. These are 0:06:22.320 --> 0:06:25.479 sort of less tied to their core wealth business as 0:06:25.480 --> 0:06:28.719 we know, UM, A lot of investors with both UBS 0:06:28.760 --> 0:06:31.200 and credit sweets, the focus is always they want to 0:06:31.240 --> 0:06:32.960 own it for the wealth business. They don't like the 0:06:32.960 --> 0:06:37.520 investment bank. I think that credit suites can, um, you know, 0:06:37.720 --> 0:06:39.599 make a case that they do need like M and 0:06:39.640 --> 0:06:42.159 A and things like that, but it's less likely to 0:06:42.200 --> 0:06:45.040 make a case on those other types of businesses. All right, Allison, 0:06:45.040 --> 0:06:48.919 good stuff as always. Alison Williams, Senior Global Banks Analysts, 0:06:48.920 --> 0:06:51.880 one of the all time great analysts Boomberg Intelligence, and 0:06:51.920 --> 0:07:00.760 there are many of them at the this boom looking 0:07:00.800 --> 0:07:03.479 at the yields. Boy, the two years down twenty one 0:07:03.520 --> 0:07:06.080 basis points four point zero seven percent, So back on 0:07:06.120 --> 0:07:09.120 that four percent watch here after a big, big move 0:07:09.240 --> 0:07:11.679 up in rates, the question is what does the fellow 0:07:11.720 --> 0:07:14.960 reserve do from here? PREA miserable managing director and global 0:07:15.000 --> 0:07:17.560 head of rate strategy at TV Securities joins us P. 0:07:17.840 --> 0:07:21.200 Thanks so much for taking the time here. Really appreciate it. Alright. 0:07:21.240 --> 0:07:23.280 The Fed has been very clear with its messaging it's 0:07:23.280 --> 0:07:27.440 fighting inflation. Um, some folks are saying they need to 0:07:27.480 --> 0:07:29.800 pause here, they need to take a break. What do 0:07:29.840 --> 0:07:33.400 you think is gonna happen? Thanks for having me on, 0:07:34.080 --> 0:07:36.720 so you know, I think it's much too early for 0:07:36.760 --> 0:07:39.200 them to be taking a pause. Um. In fact, we've 0:07:39.200 --> 0:07:41.320 heard from a bunch of FED officials in the last 0:07:41.560 --> 0:07:45.880 week reinforcing the message from Jackson Hole or the September 0:07:45.920 --> 0:07:49.080 FED meeting that they're on a mission. They need inflation 0:07:49.200 --> 0:07:53.520 much lower. Inflation is sticky, inflation is broad based. It's 0:07:53.600 --> 0:07:55.880 just too high. So I think they're still going we're 0:07:55.920 --> 0:07:59.320 looking for another seventy five in November, fifty in December, 0:07:59.520 --> 0:08:02.320 and then continued the hikes next year. I think they 0:08:02.400 --> 0:08:05.440 really want to see inflation monthly prints getting to point 0:08:05.480 --> 0:08:10.600 two point three in that range before they can stop hiking. So, 0:08:10.960 --> 0:08:12.960 you know, we think there's still a long way to go. 0:08:13.160 --> 0:08:16.200 I know, financial conditions have tightened, but inflation is too 0:08:16.280 --> 0:08:19.200 high and the economy is slowing. But they wanted us 0:08:19.320 --> 0:08:21.480 they will be paying ahead, and so I think we 0:08:21.520 --> 0:08:25.280 all should be uh, you know, expecting that pain to 0:08:25.320 --> 0:08:27.240 show up. I think the question is just how much 0:08:27.280 --> 0:08:30.720 pain are they willing to tolerate? And this is just starting. Yeah, 0:08:30.720 --> 0:08:32.520 I was going to ask the same the exact that 0:08:32.640 --> 0:08:34.920 exact question, how much pain are they willing to tolerate, 0:08:35.040 --> 0:08:40.320 especially considering it's going to hit lower income uh families 0:08:40.360 --> 0:08:44.600 and consumers hardest. Um, And we're seeing in the UK 0:08:44.880 --> 0:08:47.480 how bad that plays out. You know, when it's impossible 0:08:47.559 --> 0:08:51.960 for two million people to remortgage or you know, too expensive, 0:08:52.000 --> 0:08:54.480 they're gonna have to be fire sales on homes there. 0:08:54.840 --> 0:08:57.559 And then when you start to see you know, insurance 0:08:57.600 --> 0:09:00.679 markets um start to need a bank ail out. You know, 0:09:01.000 --> 0:09:04.760 how close can we get to that before they back off? Sure? 0:09:04.800 --> 0:09:08.040 So I would say inflation is also highly regressive, meaning 0:09:08.080 --> 0:09:11.400 it hits the lower income parts of the population much harder, 0:09:11.760 --> 0:09:14.160 and so if the FED is just focused on that, 0:09:14.280 --> 0:09:16.199 and they will see the labor market is still strong, 0:09:16.280 --> 0:09:19.400 and they'll see inflation being still too high. So that 0:09:19.520 --> 0:09:22.160 still remains. I think inflation remains public and me number 0:09:22.160 --> 0:09:25.000 one in terms of the insurance market that you're talking about, 0:09:25.000 --> 0:09:28.079 I mean, I think financial stress. We're we're going to 0:09:28.200 --> 0:09:31.199 have to deal with more financial stress. You look at this, 0:09:31.200 --> 0:09:33.600 this is of our shock. We're living through these massive 0:09:33.640 --> 0:09:36.079 moves and rates. I mean, treasury is moving twenty five 0:09:36.080 --> 0:09:38.920 base points a day, the stock market all over the place. 0:09:38.960 --> 0:09:42.040 I think credit spreads um in terms of bail. I mean, 0:09:42.040 --> 0:09:44.360 I don't think the insurance industry in the U S 0:09:44.480 --> 0:09:47.800 or the pension industry is as leveled to that trade 0:09:48.120 --> 0:09:50.679 um as we saw in the UK. And we have 0:09:50.720 --> 0:09:53.400 not had that level of moves in the tenure. I mean, 0:09:53.400 --> 0:09:55.680 I'm shocked with the twenty basis point move, but the 0:09:55.720 --> 0:09:58.440 tenure is still below four percent. We haven't had the 0:09:58.480 --> 0:10:01.800 hundred two hundred basis point more higher. So I don't 0:10:01.880 --> 0:10:05.160 see that particular industry in the US being as vulnerable 0:10:05.240 --> 0:10:08.240 as it is in the UK. But in general, I 0:10:08.280 --> 0:10:11.280 think when you get moves like this and growth is 0:10:11.320 --> 0:10:14.600 slowing without a fit put insight. I think it just 0:10:14.640 --> 0:10:18.560 tells you liquidity is paramount to prevent sort of forced 0:10:18.679 --> 0:10:21.640 being forced to sell at a time when you know 0:10:21.679 --> 0:10:23.760 liquidity is not great. So I think, is there enough 0:10:23.800 --> 0:10:26.000 liquidity to soak up the bonds that are going to 0:10:26.120 --> 0:10:31.320 get unleashed with quantitative tightening? So that's fair. But you know, 0:10:31.320 --> 0:10:34.120 it's been well advertised that the FED is selling or 0:10:34.160 --> 0:10:39.240 effectively letting nine between treasuries and mortgages run off a month. Um. 0:10:39.679 --> 0:10:42.200 You know, I I struggled to find the marginal buyer, 0:10:42.240 --> 0:10:44.720 and which is why treasuries have been selling off. But 0:10:44.840 --> 0:10:47.440 at some point longer treasuries are going to be the 0:10:47.640 --> 0:10:51.200 risk asset hedge because we should be pricing in a recession. 0:10:51.240 --> 0:10:53.240 I think the recession is pretty much baked on the 0:10:53.280 --> 0:10:55.720 cake for next year in the US, and I don't 0:10:55.760 --> 0:11:00.240 buy the shallow short recession argument. This could be much 0:11:00.280 --> 0:11:02.840 longer lasting because the FED is going to be reluctant 0:11:02.880 --> 0:11:05.559 to start to ease. They're so worried about the nineties 0:11:05.600 --> 0:11:07.880 seventies that I think they're going to be late on 0:11:07.920 --> 0:11:11.600 the way to easing policy. So you know, if we're 0:11:11.600 --> 0:11:13.760 in a recession, where should the tenure b I would 0:11:13.800 --> 0:11:16.440 say the FED should when maybe it's twenty four or 0:11:16.440 --> 0:11:19.280 twenty five that they start to cut rates, and they'll 0:11:19.320 --> 0:11:21.720 cut I think at that point too well below neutral. 0:11:22.000 --> 0:11:25.080 So the tenure is attractive as a risk hedge, and 0:11:25.120 --> 0:11:27.000 so I think that's where the bias will show up 0:11:27.040 --> 0:11:29.599 against risk castles. Pretty we had some I s M 0:11:29.679 --> 0:11:33.800 manufacturing data today came out weaker than expected and even 0:11:33.880 --> 0:11:37.600 new particularly on the new order side, uh forty seven 0:11:37.600 --> 0:11:41.600 point one showing contraction there. What do you make of that? Yeah, 0:11:41.600 --> 0:11:43.800 so we have been actually looking for the weakening to 0:11:43.840 --> 0:11:45.679 show up because for a couple of reasons. I mean, 0:11:45.760 --> 0:11:48.480 these were numbers were very high given that this was 0:11:48.520 --> 0:11:52.920 a good driven recovery post COVID recovery and goods demand 0:11:53.040 --> 0:11:56.720 we had seen starting to come off sharply. So I 0:11:56.760 --> 0:11:59.920 think that slowing is expected. It's not a huge employe 0:12:00.120 --> 0:12:03.800 mean indicator. So it's what I'm more interested in is 0:12:03.800 --> 0:12:06.520 I s M services. Have we seen the consumer? And 0:12:06.600 --> 0:12:08.920 I think that's going to be the early sign if 0:12:08.920 --> 0:12:14.920 the consumer is reducing spending because real wage growth for 0:12:15.120 --> 0:12:18.640 the U S consumers negative, meaning inflation is higher than 0:12:18.720 --> 0:12:22.760 the average. Early earnings. I think if I s M services, 0:12:22.760 --> 0:12:26.640 which is a huge employment uh early read, if that 0:12:26.720 --> 0:12:28.559 starts to slow down, I think that tells you that 0:12:28.520 --> 0:12:31.160 the economy slowing. I don't think that stops the FED, 0:12:31.240 --> 0:12:34.280 though it gives them probably some caution about the pace 0:12:34.360 --> 0:12:37.280 of hikes, but that endpoint, it's all about inflation in 0:12:37.320 --> 0:12:40.880 the near term. Okay, really appreciate getting your time. Prove 0:12:40.880 --> 0:12:44.160 you know you're busy. Premiser a managing director in Global 0:12:44.200 --> 0:12:47.720 head of Rates Strategy at t D Securities here. So 0:12:48.320 --> 0:12:51.959 some more movement up from the FED. Pre as talking 0:12:52.040 --> 0:12:57.439 about a recession, um, but perhaps you know, not be long, 0:12:57.559 --> 0:12:59.720 but maybe a little bit of a shallow recession there. 0:12:59.720 --> 0:13:02.240 So uh some more. We have to pay attention to 0:13:02.280 --> 0:13:05.200 this feed, of course, as it continues its fight against inflation. 0:13:08.360 --> 0:13:09.840 I want to get to our next guest right away. 0:13:09.880 --> 0:13:13.000 Jonathan Webb. He's the CEO and founder of app Harvest. 0:13:13.000 --> 0:13:17.120 They are building some of America's largest greenhouses, combining conventional 0:13:17.120 --> 0:13:20.840 agricultural techniques with today's technology to grow non gmo chemical 0:13:20.880 --> 0:13:23.560 free produce. Jonathan, thanks so much for taking the time 0:13:23.880 --> 0:13:25.840 to join us here. Talk to us about what you 0:13:25.880 --> 0:13:29.040 guys are doing at APP Harvest. I know you're in 0:13:29.200 --> 0:13:33.000 Kentucky and that Appalachia area there. Talk to us about 0:13:33.000 --> 0:13:36.160 what you guys are up to. Yeah, So we're building 0:13:36.240 --> 0:13:40.320 some of the world's largest controlled environment agriculture facilities to 0:13:40.480 --> 0:13:43.400 grow fruits and vegetables with less land and less water. 0:13:43.520 --> 0:13:46.200 And if you look at the US today, we imported 0:13:46.240 --> 0:13:49.480 about two thirds of our fruits and vegetables UH into 0:13:49.520 --> 0:13:51.559 the US and then the rest that we do grow 0:13:51.640 --> 0:13:55.000 here are mainly grown in grouch drought stricken areas of 0:13:55.200 --> 0:14:00.920 the Southwest in California. So UH, climate disruption continues to 0:14:00.960 --> 0:14:03.880 impact farmers not just in the US but around the world. 0:14:03.920 --> 0:14:07.319 So we we have to use technology, build infrastructure and 0:14:07.880 --> 0:14:10.320 UH and be able to grow food year round with 0:14:10.320 --> 0:14:12.840 with less water and less land. And that's ultimately what 0:14:12.840 --> 0:14:16.439 we're doing doing here at a Harvest in Kentucky. So, 0:14:16.600 --> 0:14:19.960 I know, your first greenhouse in Morehead, Kentucky, it's going 0:14:20.000 --> 0:14:23.280 to span sixty acres and use less water. How do 0:14:23.320 --> 0:14:26.320 you do that? Yes, So we by the end of 0:14:26.320 --> 0:14:30.360 the year, we'll have four facilities operating um of about 0:14:30.440 --> 0:14:34.640 eight million square feet in total. So just scale size 0:14:35.080 --> 0:14:40.680 and we'll be across strawberries, salad, greens and tomatoes. But 0:14:40.840 --> 0:14:44.840 ultimately we're we're using a host of different technologies that 0:14:44.920 --> 0:14:48.600 we combine into one system. Um and you mentioned if 0:14:48.600 --> 0:14:51.880 we we use about nine less water than open field 0:14:51.920 --> 0:14:56.360 agriculture and can get to about thirty times yield per acre, 0:14:56.760 --> 0:14:58.520 and we can do that no matter what the climate 0:14:58.600 --> 0:15:02.000 is outside. So our general thesis is, you know, this 0:15:02.040 --> 0:15:05.600 is the third wave of sustainable infrastructure. Twenty years ago 0:15:05.760 --> 0:15:09.760 was renewable energy, ten years ago it was Tesla with 0:15:09.800 --> 0:15:12.960 electric vehicles, and then right now it's controlled environment agriculture. 0:15:13.120 --> 0:15:15.160 We're going to have to bring most of our fruit 0:15:15.160 --> 0:15:18.480 and vegetable production around the world into a controlled environment. 0:15:19.040 --> 0:15:22.560 Uh and and and ultimately were one solution, but there 0:15:22.560 --> 0:15:24.600 are a lot of different solutions that are coming out 0:15:24.640 --> 0:15:28.400 of the market. When I grew up in Ohio, so, um, 0:15:28.520 --> 0:15:30.960 when I think of Kentucky and when I think of 0:15:31.040 --> 0:15:35.280 controlled environment farming, I think of the weed they grew 0:15:35.320 --> 0:15:39.560 there was very good. Reportedly, are you just doing um 0:15:39.880 --> 0:15:44.720 produced Are you also in the cannabis business now we're 0:15:44.760 --> 0:15:47.280 we're focused on fruits and vegetables. I mean the the 0:15:47.320 --> 0:15:51.480 convergence of technologies that can be somewhat similar the LED 0:15:51.600 --> 0:15:56.480 lighting Uh, that that's benefitted any any grower is something 0:15:56.480 --> 0:16:00.160 that we're benefiting from. But ultimately, we're building facility US 0:16:00.280 --> 0:16:03.680 to supply fruits and vegetables to the largest grocers, so 0:16:03.760 --> 0:16:09.440 our our customers or Costco, Walmart, Cromer, Publics, um and 0:16:09.440 --> 0:16:11.880 and a whole host of variety of fast food chains 0:16:11.920 --> 0:16:15.160 and and just our focus as fruits and vegetables. But 0:16:15.200 --> 0:16:18.080 you'll see those technologies kind of go back and forth 0:16:18.120 --> 0:16:20.520 depending on on what the industry is. But we're we're 0:16:20.560 --> 0:16:23.280 focused on bringing fruit and vegetable production back to the 0:16:23.360 --> 0:16:26.520 US and doing it in control environment. Why do you think, Jonathan, 0:16:26.800 --> 0:16:31.680 the stock price has suffered so severely? I mean a 0:16:31.800 --> 0:16:36.240 year ago, um, app Harvest was trading for over six 0:16:36.280 --> 0:16:38.080 and now we're looking at a dollar a D nine. 0:16:38.360 --> 0:16:41.960 What what are investors misunderstanding? Yeah? In a year and 0:16:42.000 --> 0:16:46.320 a half, we went to forty five bucks share forty 0:16:46.560 --> 0:16:49.960 down to two bucks. Um Yeah, I mean, look, we're 0:16:50.040 --> 0:16:54.320 we're investing and and and the long long term here 0:16:54.360 --> 0:16:58.000 at app Harvest. We're building facilities that will operate twenty 0:16:58.120 --> 0:17:02.680 thirty years. Uh E. Those four facilities are not operational yet, 0:17:02.680 --> 0:17:05.600 they'll be operational later this year and you know, we 0:17:05.600 --> 0:17:08.359 we had a couple of stumbles last year. It was 0:17:08.359 --> 0:17:11.879 our first first crop, first season producing and selling to 0:17:11.920 --> 0:17:16.119 a grocure and we we went public via SPACK. I mean, ultimately, 0:17:16.240 --> 0:17:18.280 you know, you look at why are we down? Well, 0:17:18.880 --> 0:17:23.400 you know, SPACs are down, Tech growth futures down, uh 0:17:23.520 --> 0:17:25.960 E s G down. I mean, everything is down. We're 0:17:26.000 --> 0:17:28.760 just on top of that. We're a little worse than others. 0:17:29.040 --> 0:17:31.919 And I've talked to the founders of CEOs of a 0:17:31.920 --> 0:17:34.600 lot of good companies that went public last year, and 0:17:34.680 --> 0:17:37.080 we're focused on building a good business that will be 0:17:37.119 --> 0:17:39.480 here the next twenty years. And you know, we have 0:17:39.520 --> 0:17:42.280 to weather the storm the next two years with incredibly 0:17:42.400 --> 0:17:44.880 terrible public mark. But do you have all the capital 0:17:44.920 --> 0:17:48.880 you need? I'm you know you're not generating cash right, 0:17:48.920 --> 0:17:51.800 so you need to invest in this business. As you said, 0:17:51.800 --> 0:17:53.520 do you have everything or do you need to go 0:17:53.560 --> 0:17:57.440 to the market again, Well, we're weighing our options and 0:17:57.440 --> 0:18:00.960 and you know we're building facilities, so utimately, how we 0:18:01.119 --> 0:18:04.720 finance those facilities could be private and you know, doing 0:18:04.760 --> 0:18:07.640 a sale lease back type model for each facility. So 0:18:08.040 --> 0:18:10.399 you know, every growth company is going to need capital. 0:18:10.440 --> 0:18:12.160 It's for us how do we get the capital. We've 0:18:12.160 --> 0:18:16.040 been able to secure attractive debt financing from JP Morgan 0:18:16.320 --> 0:18:18.600 U s D, a robo bank, So you know, we're 0:18:18.640 --> 0:18:20.879 constantly trying to field how to get capital at the 0:18:20.880 --> 0:18:24.479 most attractive price. And obviously if the stock was at 0:18:24.480 --> 0:18:27.360 fifty bucks, that would be ideal, but there's there's other 0:18:27.359 --> 0:18:30.280 ways for us to access capital, and we'll do whatever 0:18:30.400 --> 0:18:33.600 is prudent to do that to funder growth. Jonathan, I 0:18:33.680 --> 0:18:35.560 spent a lot of time in central California, and there 0:18:35.600 --> 0:18:38.639 are agricultural farms, you know, spending as far as I 0:18:38.720 --> 0:18:41.080 can see, But also as far as I can see 0:18:41.080 --> 0:18:44.160 are the irrigation systems that have the sprinklers just going 0:18:44.200 --> 0:18:47.760 on forever into the horizon. You just got to think 0:18:47.760 --> 0:18:50.960 that that the water issue is probably the biggest issue 0:18:51.000 --> 0:18:54.920 facing agriculture in this country. What do you guys do 0:18:55.040 --> 0:18:58.640 that's that's different, that tries to address that. I mean, 0:18:58.720 --> 0:19:01.600 this will be the collapse and lifetime. I'm I'm thirty 0:19:01.640 --> 0:19:03.920 seven years old. I grew up in Kentucky. I saw 0:19:03.960 --> 0:19:06.440 the collapse of the coal industry when people said there 0:19:06.480 --> 0:19:09.400 was no way you talk to any coal minor. Fifteen 0:19:09.480 --> 0:19:12.680 years ago, Peabody Energy. Anyone couldn't get their head out 0:19:12.680 --> 0:19:15.679 of the sand. Uh, and we saw a collapse of 0:19:15.680 --> 0:19:18.000 an industry that people thought there was no way it 0:19:18.000 --> 0:19:21.879 would collapse. We will not be farming leafy greens in California. 0:19:21.960 --> 0:19:24.200 We're not going to be farming the way we're farming 0:19:24.200 --> 0:19:26.320 in the southwest of the US. I mean, it is 0:19:26.359 --> 0:19:30.320 an existential threat to those cities. We do not have 0:19:30.480 --> 0:19:33.919 enough water. Eight of the water that's being consumed in 0:19:33.920 --> 0:19:38.240 the West is consumed by agriculture. So you can talk 0:19:38.280 --> 0:19:41.680 about like Kim Kardashian, you know, reducing her shower time. 0:19:41.720 --> 0:19:43.760 I know it's made a lot of headlines in California 0:19:44.000 --> 0:19:47.080 where cities have tried to restrict shower time or bout 0:19:47.160 --> 0:19:52.280 that it's irrelevant. That's agriculture. So we're not going to 0:19:52.359 --> 0:19:56.080 be growing leafy greens in Salinas, Cally Valley, California in 0:19:56.119 --> 0:20:00.639 my lifetime. We we solve it by using facility like ours. 0:20:00.680 --> 0:20:04.280 We're using less water. So you do the back back 0:20:04.280 --> 0:20:06.760 to the envelope math. It's pretty simple. I mean, we're 0:20:06.760 --> 0:20:10.120 close with Tom Vilsack. We knew the last at Secretary Purdue. 0:20:10.560 --> 0:20:12.280 You know, there's a real lack of leadership in d 0:20:12.359 --> 0:20:14.280 C on either side of the aisle. I mean, no 0:20:14.320 --> 0:20:17.960 one wants to touch this topic. Which politician would want 0:20:17.960 --> 0:20:20.880 to touch this topic and try to get reelected anywhere? 0:20:21.240 --> 0:20:24.080 So it's a hot button issue. We're not talking about it. 0:20:24.800 --> 0:20:28.920 The water issues of Colorado, River Lake, pal Lake Mead, 0:20:29.040 --> 0:20:31.520 all through California. It's only going to get worse here 0:20:31.560 --> 0:20:34.240 over a year. Uh. And maybe you'll have to get 0:20:34.280 --> 0:20:36.400 really bad before it gets better. But the good thing 0:20:36.520 --> 0:20:39.760 is there's technology and we can use that technology and 0:20:39.800 --> 0:20:43.280 grow with less water. And the private markets can help 0:20:43.320 --> 0:20:45.760 solve this. But ultimately we're going to need d C 0:20:45.960 --> 0:20:48.880 to incentivize the private markets to put capital to work 0:20:48.920 --> 0:20:51.920 across farms in the US. All right, good stuff, Jonathan 0:20:52.000 --> 0:20:54.560 Johnson Webb. We appreciate you taking the time here, CEO 0:20:54.600 --> 0:20:59.240 and founder of app Harvests symbol a p p H 0:20:59.320 --> 0:21:02.240 and put that into a Bloomberg terminal. Uh. And you know, 0:21:02.240 --> 0:21:10.120 talking about sustainable farming going farther into the future. When 0:21:10.160 --> 0:21:11.680 we move over to M and A into the power 0:21:11.720 --> 0:21:14.560 generation space, we had a German power generator r w 0:21:14.800 --> 0:21:18.000 E announced today a six point eight billion dollar purchase 0:21:18.000 --> 0:21:20.960 of Khan Edison assets. UM, I want to get to 0:21:21.000 --> 0:21:23.000 the you know what's going on. We don't talk about 0:21:23.359 --> 0:21:26.240 the green unit of Yeah, the green unit of CONDAD. 0:21:26.320 --> 0:21:30.000 Let's bring in Patricia Alvarez, Equity research Channels for Bloomberg Intelligency, 0:21:30.080 --> 0:21:33.760 joins us from the our Bloomberg's London studio. Patricia talk 0:21:33.840 --> 0:21:36.280 to us about r w E. Who are they, what 0:21:36.359 --> 0:21:39.520 are they? And talk to us about this deal. Sure so, 0:21:39.800 --> 0:21:43.040 um are do we E is one of Europe's largest 0:21:43.160 --> 0:21:46.760 coal fire generators of power, but as well they're also 0:21:46.880 --> 0:21:51.640 one of the fastest growing renewable asset operators in the region, 0:21:52.040 --> 0:21:55.760 with exposure to previous exposure to the US and the 0:21:55.880 --> 0:21:59.160 UK UM and with their headquarters and sort of their 0:21:59.240 --> 0:22:03.680 their core market in Germany UM. In terms of the acquisition, 0:22:03.920 --> 0:22:07.480 we see this as part of their their longer term 0:22:07.520 --> 0:22:11.320