WEBVTT - Office Space Cost Will Have To Come Down: IWG Global 0:00:01.400 --> 0:00:04.120 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney. Along 0:00:04.120 --> 0:00:06.240 with my co host of Bonnie Quinn. Every business day 0:00:06.240 --> 0:00:10.360 we bring you interviews from CEOs, market pros, and Bloomberg experts, 0:00:10.400 --> 0:00:13.560 along with essential market moving news. Kind the Bloomberg Markets 0:00:13.600 --> 0:00:17.000 Podcast on Apple podcast or wherever you listen to podcasts, 0:00:17.000 --> 0:00:20.239 and on Bloomberg dot com. Well, let us turn out 0:00:20.239 --> 0:00:25.079 to commercial real estate is suffering, that's for sure. Let's 0:00:25.079 --> 0:00:26.920 bring in somebody who knows a lot about it. He 0:00:27.120 --> 0:00:31.080 is founder of International Workplace Group otherwise known as i 0:00:31.480 --> 0:00:34.839 w G Global Marketings and joins us. Now, Mark, just 0:00:34.880 --> 0:00:38.840 give us the lay of the land. First of all, Well, 0:00:39.200 --> 0:00:43.960 the lay of the land is not even The pandemic 0:00:44.040 --> 0:00:48.920 has hit the metropolis city centers around the world. We 0:00:49.000 --> 0:00:51.879 operate in a hundred twenty countries and that's been the 0:00:51.920 --> 0:00:58.200 major impact. So in provincial locations countryside, we're up and 0:00:58.320 --> 0:01:01.120 we're badly affected in down to down so people are 0:01:01.160 --> 0:01:04.920 working close to where they live and they're working from home. 0:01:05.160 --> 0:01:10.280 Our homework business has grown tenfold over the pandemic and 0:01:10.319 --> 0:01:14.080 we're slightly hedged with that. So Mark, I guess one 0:01:14.120 --> 0:01:17.120 of the questions that people are asking here is the 0:01:17.200 --> 0:01:20.520 future of the city center itself? And this is a 0:01:20.600 --> 0:01:22.920 I guess a global question. It's not just London in 0:01:23.040 --> 0:01:25.880 New York. What is your view as we look towards 0:01:25.920 --> 0:01:29.080 the other side of this pandemic about how the city 0:01:29.120 --> 0:01:34.399 center as a work center will evolve. It changes forever. 0:01:34.760 --> 0:01:39.880 It's rapid evolution. Um, you know, the the cities will 0:01:39.920 --> 0:01:43.280 never be the same again. We will take some time 0:01:43.319 --> 0:01:47.000 for the change to take place because people have to 0:01:47.000 --> 0:01:50.040 get out of leases that they are already in. But 0:01:50.560 --> 0:01:57.400 pretty much of all CEOs and leadership teams aren't now 0:01:58.200 --> 0:02:02.720 positively in a mode of hybrid workings. Hybrid working means 0:02:03.400 --> 0:02:06.600 the company saves lots of money, they can hire better talent, 0:02:07.280 --> 0:02:10.000 and they allow people to work either from home or 0:02:10.000 --> 0:02:12.680 close to home, and they come into a sort of 0:02:12.680 --> 0:02:16.960 headquarters when they need to or if they haven't got 0:02:17.200 --> 0:02:20.760 they live in the city itself. So, you know, hybrid 0:02:20.800 --> 0:02:26.600 working has such strong economic and environmental advantages. It's going 0:02:26.600 --> 0:02:30.520 to happen, and it's what people want. They've whatever people say. 0:02:30.600 --> 0:02:34.000 For most the pandemic has gone on for too long, 0:02:34.080 --> 0:02:39.239 but they have been quite productive working on zoom teams 0:02:39.400 --> 0:02:42.960 and the like. You know, companies. It has worked. It's 0:02:42.960 --> 0:02:46.440 an experiment that worked, and it will continue and it 0:02:46.440 --> 0:02:50.960 will become the norm. So talk to us about occupancy rates. 0:02:51.000 --> 0:02:53.400 Can you give us a sort of a percentage across 0:02:53.440 --> 0:02:56.280 your portfolio and and also where you might be thinking 0:02:56.440 --> 0:02:59.240 of getting out of commercial real estate the way it 0:02:59.440 --> 0:03:02.760 is now changing it into something like storage or what 0:03:02.880 --> 0:03:06.919 have you. Well, look for us. We we've we've got 0:03:07.200 --> 0:03:11.440 three and a half thousand buildings. We're in all sorts 0:03:11.440 --> 0:03:15.320 of markets. So look, we are expanding in the countryside. 0:03:15.440 --> 0:03:18.120 We have been for a while actually because this change 0:03:18.280 --> 0:03:21.560 was occurring prethe The pandemic is just accelerated with it 0:03:22.440 --> 0:03:26.400 um and so we were expanding in the countryside. We 0:03:26.520 --> 0:03:29.359 are adding more even in the cities. Because it's not 0:03:29.960 --> 0:03:35.240 what companies are looking for a flexibility. They're looking for products. 0:03:35.280 --> 0:03:39.040 They don't you know, what companies don't want or want 0:03:39.120 --> 0:03:41.720 less of is a five or ten year least. They 0:03:41.760 --> 0:03:45.080 want flexibility, they want products. So this for a company 0:03:45.120 --> 0:03:49.440 like ours, where we provide a fully operational office ready 0:03:49.480 --> 0:03:52.640 to use for a couple of people or for a 0:03:52.720 --> 0:03:55.960 thousand people, you know that that is what's being being 0:03:55.960 --> 0:04:00.600 looked for. So we're working more with property owners who 0:04:01.400 --> 0:04:03.480 at the other end of this, if they're long in 0:04:03.520 --> 0:04:07.280 the market, they are looking for different ways to get 0:04:07.440 --> 0:04:12.440 revenue and providing a finished product is a great way 0:04:12.480 --> 0:04:15.120 to do that. So we are seeing some growth. We 0:04:15.160 --> 0:04:18.520 are adding capacity in some cities. We would expect that 0:04:18.640 --> 0:04:23.679 to continue. So it's more in the countryside, the cities, 0:04:23.760 --> 0:04:30.080 the provinces where people live, and in the cities themselves. 0:04:30.120 --> 0:04:34.880 Apart from adding inventory, we're having to adjust prices of 0:04:35.080 --> 0:04:39.680 out our input prices. I with our partners, we're having 0:04:39.680 --> 0:04:42.760 to lower our costs in order to be more competitive 0:04:42.760 --> 0:04:46.360 because it's going to be a much more competitive marketplace 0:04:46.360 --> 0:04:49.440 because there's going to be less demand more supply. So 0:04:49.560 --> 0:04:51.680 marketing some of these big city centers and I just 0:04:51.680 --> 0:04:54.240 think the last time I was in London, there's cranes everywhere. 0:04:54.720 --> 0:04:56.560 What are some of these commercial real estate owners going 0:04:56.640 --> 0:05:02.440 to do with all this office space? Well, it's um, 0:05:03.200 --> 0:05:07.000 it's going to get repurposed. I mean, look, the real 0:05:07.120 --> 0:05:10.480 estate market is a market that's very fickle and I've 0:05:11.120 --> 0:05:14.480 I've started our business thirty one years ago and I've 0:05:14.520 --> 0:05:16.680 seen it go up and down, and it's it is 0:05:16.800 --> 0:05:20.760 markets like London that have more oscillation. The bigger the city, 0:05:20.880 --> 0:05:25.080 the more the move. But you know, in the future, 0:05:25.520 --> 0:05:27.960 you know, cities are going to have to reinvent themselves 0:05:28.360 --> 0:05:33.359 and become a more reasonably priced place to live. And 0:05:33.720 --> 0:05:35.640 you know, the cost of office place will have to 0:05:35.680 --> 0:05:38.720 come down over time, so it has to be economical 0:05:38.800 --> 0:05:42.799 for both for companies to be there. London, as an example, 0:05:42.920 --> 0:05:48.800 became extremely expensive per person to house someone and the 0:05:48.920 --> 0:05:52.840 cost of living I you know, people finding an apartment 0:05:52.960 --> 0:05:55.960 close to where they live and not having to commute 0:05:56.279 --> 0:05:59.240 for two hours a day to get there. It's that combination. 0:05:59.279 --> 0:06:02.640 So there will be a repricing and I'm sure many 0:06:02.720 --> 0:06:05.960 cities will reinvent themselves with lower prices and a tramp 0:06:06.000 --> 0:06:08.880 favor back in. Hey, Mark, thank you so much for joining. 0:06:08.920 --> 0:06:11.679 It's just a fascinating discussion. We really appreciate your insight. 0:06:11.800 --> 0:06:15.840 Mark Dixon, founder and CEO of i w g A Global, 0:06:16.320 --> 0:06:19.599 just giving us the view, the forecast, if you will, 0:06:19.640 --> 0:06:23.839 of real estate and urban centers, a major evolution taking place. 0:06:26.080 --> 0:06:30.159 Let's pivot to the consumer package goods business that's certainly 0:06:30.240 --> 0:06:32.640 seen some changes here as a result of the pandemic. 0:06:32.640 --> 0:06:35.600 We can do that with Jordan Gaspar Jordan's is managing 0:06:35.640 --> 0:06:38.760 partner and president of A f Ventures, joining us on 0:06:38.800 --> 0:06:42.960 the phone from Wellington, Florida. A Adventures is a women 0:06:43.040 --> 0:06:46.280 owned VC firm focusing on better for you consumer brands 0:06:46.480 --> 0:06:50.280 and categories including food and beverage, beauty and personnel care, 0:06:50.400 --> 0:06:53.240 health and wellness, and whole bunch of others. Jordan, thanks 0:06:53.240 --> 0:06:55.520 so much for joining us here. Talk to us about 0:06:55.560 --> 0:06:58.240 the consumer package goods business. It seems, obviously as a 0:06:58.279 --> 0:07:01.280 result of the pandemic be people are buying a lot 0:07:01.320 --> 0:07:05.520 more in the supermarket, going out less to eat. What 0:07:05.560 --> 0:07:07.200 are you seeing as some of these trends and how 0:07:07.200 --> 0:07:10.240 permanent might they be? Hi, thank you so much for 0:07:10.320 --> 0:07:13.320 having me so UM. As you said, I imagining partner 0:07:13.360 --> 0:07:16.520 of Adventures, and we are a fund that exclusively invest 0:07:16.560 --> 0:07:19.600 in consumer products across the verticals of food and beverage, 0:07:19.680 --> 0:07:23.120 personal care, pet, beauty, health and wellness UM and so 0:07:23.240 --> 0:07:26.080 of our over thirty five companies UM, thirty two of 0:07:26.080 --> 0:07:27.880 them are food and beverage companies. And so it's been 0:07:27.920 --> 0:07:31.520 an an interesting year for us UM, particularly as all 0:07:31.560 --> 0:07:34.240 of our products are distributed UM at most of the 0:07:34.240 --> 0:07:37.360 major retailers as well as online. UM. You know two 0:07:37.360 --> 0:07:41.280 thousand and twenty will mark the year of changing consumption patterns. 0:07:41.400 --> 0:07:43.720 You know, we saw um an increased emphasis of the 0:07:43.760 --> 0:07:47.280 consumer on self care products, UM, the rise of personalization, 0:07:47.640 --> 0:07:50.240 and just this general idea of food as health UM. 0:07:50.320 --> 0:07:54.040 You know, coming in formats like inguestible beauty. Beyond that, 0:07:54.160 --> 0:07:57.360 we saw the food itself, you know, continue to evolve 0:07:57.440 --> 0:08:00.400 as people we're focusing on you know, healthy living directed 0:08:00.440 --> 0:08:04.000 products like plant based alternatives. UM. But now with this 0:08:04.040 --> 0:08:06.400 new concept of the grab and stay option, you know, 0:08:06.480 --> 0:08:09.400 with so many people no longer going to eat out, 0:08:09.840 --> 0:08:13.600 people need to find solutions that were easily adopted in 0:08:13.640 --> 0:08:15.520 their homes. UM. And so we'll see a lot of 0:08:15.600 --> 0:08:19.160 changes in two thousand and twenty one in terms of format, 0:08:19.240 --> 0:08:22.520 packaging and continents and self and and really playing into 0:08:22.600 --> 0:08:25.360 sort of a rise and sustainability in the space in general. 0:08:26.320 --> 0:08:27.840 Way to hear about some of that, but the first 0:08:27.880 --> 0:08:29.880 you have to give me an idea of what ingustible 0:08:29.920 --> 0:08:34.760 beauty is. Yes, so inguestible beauty, I mean, you know, 0:08:34.800 --> 0:08:37.160 they're sort of a blurring of the line between personal care, 0:08:37.280 --> 0:08:40.120 beauty and food that have been occurring, and it had 0:08:40.160 --> 0:08:42.840 started in predated COVID, but you know, we've invested in 0:08:42.840 --> 0:08:45.120 the company called a New Code, which is a line 0:08:45.120 --> 0:08:50.360 of products geared towards UM you know, you know, supporting skin, gut, mood, health, 0:08:50.559 --> 0:08:53.439 UM and covers you know, different needs states of sleep, immunity, 0:08:53.520 --> 0:08:57.160 focus and stress and comes in powder formats and capsules 0:08:57.200 --> 0:09:00.240 and tinctures and so the idea is that UM not 0:09:00.320 --> 0:09:02.480 just going to be topicals that you put on your skin, 0:09:02.880 --> 0:09:05.120 but it's also going to be you know, things that 0:09:05.160 --> 0:09:06.959 you put inside your body. And so if you think 0:09:07.000 --> 0:09:10.080 about you know, some of the really big focus coming 0:09:10.080 --> 0:09:12.280 out of this year and exits in the space you know, 0:09:12.600 --> 0:09:15.760 v MS has been has had a really huge year 0:09:15.840 --> 0:09:18.080 in terms of people really thinking about how to take 0:09:18.080 --> 0:09:23.000 care of themselves from within. So how are brands dealing 0:09:23.400 --> 0:09:27.120 UM Jordan's kind of much more of the of shopping, 0:09:27.160 --> 0:09:31.400 including consumer products moving to e commerce. How are they 0:09:31.440 --> 0:09:35.160 adopting to that. It's a new world for food and beverage, right, 0:09:35.280 --> 0:09:38.760 you know, we knew that we had Amazon and you know, 0:09:38.880 --> 0:09:41.360 detail in the form of Fresh directs UM. You know 0:09:41.440 --> 0:09:45.160 that we're already players in the market UM, but during COVID, 0:09:45.280 --> 0:09:48.640 click and collect UM and the ability for consumers to 0:09:48.720 --> 0:09:52.559 be purchasing from Walmart and Target more easily. UM has 0:09:52.640 --> 0:09:54.800 has really risen and and that will be a more 0:09:54.840 --> 0:09:58.320 permanent shift. You know, people will go back eventually UM 0:09:58.360 --> 0:10:01.400 into producing shelves and brick and mortar, but there will 0:10:01.440 --> 0:10:04.360 be large spread adoption of some of these new UM 0:10:04.600 --> 0:10:08.959 sort of sort omni distribution outlets. You know. Beyond that, 0:10:09.160 --> 0:10:12.480 you know, digital marketing itself is going to change. You know, 0:10:12.520 --> 0:10:14.920 for the first time, we're seeing fresh and frozen food 0:10:14.960 --> 0:10:19.200 companies UM that are authentic young brands, developing DTWOC strategies, 0:10:19.280 --> 0:10:21.400 and so you know, we're going to see what comes 0:10:21.400 --> 0:10:24.040 out of this is just the true omni channel brands 0:10:24.400 --> 0:10:26.800 UM and that brands will be built expecting to be 0:10:26.880 --> 0:10:29.120 sold in brick and mortar as well as directly to 0:10:29.160 --> 0:10:33.080 their consumers. Jordan's how many times have you been approached 0:10:33.120 --> 0:10:35.720 by SPACs in the last few months for your various 0:10:35.720 --> 0:10:39.599 portfolio companies. It is it is a stack moment in 0:10:39.960 --> 0:10:42.920 the summer, so UM. I think that there is an 0:10:43.040 --> 0:10:46.120 enormous amount of stack activity in the market. UM And 0:10:46.120 --> 0:10:48.520 and we do think that you know, SPACs will certainly 0:10:48.600 --> 0:10:51.920 find some UM great partners in food and beverage in 0:10:51.920 --> 0:10:55.160 particular but across consumer So go on how many times 0:10:55.240 --> 0:10:57.840 are there are there portfolio companies that you might be 0:10:57.880 --> 0:11:02.240 looking to go public with that way? UM, I think 0:11:02.240 --> 0:11:05.360 that the public markets have really opened up for food 0:11:05.360 --> 0:11:07.400 and beverage. And I think that we do see that 0:11:07.640 --> 0:11:10.560 with the success of companies like Beyond and Tattooed Chef. 0:11:10.600 --> 0:11:13.559 There is no question, UM, there is now the strategy 0:11:13.800 --> 0:11:16.840 for you know, liquidity, for these companies to not just 0:11:16.920 --> 0:11:19.720 be private but also too you know in terms of 0:11:19.720 --> 0:11:21.880 private act and sponsors, but to be increasingly in the 0:11:21.880 --> 0:11:24.560 public markets. UM. And So There'll be a lot of 0:11:24.600 --> 0:11:26.880 different outcomes, but there is it will be a big 0:11:27.000 --> 0:11:31.040 year in food and beverage. So Jordan's our new products 0:11:31.080 --> 0:11:33.840 coming to market during this pandemic or our consumer products 0:11:33.880 --> 0:11:37.080 company saying our R and D our new product launches, 0:11:37.080 --> 0:11:39.800 We're gonna wait till after It depends on who you're 0:11:39.800 --> 0:11:42.400 talking to. UM. So I think that from the Bantas 0:11:42.440 --> 0:11:45.400 point of our portfolio, new products are certainly coming to market. 0:11:45.920 --> 0:11:48.439 There was you know a little bit of a brief 0:11:48.480 --> 0:11:52.720 pause on innovation where pipelines were halted very temporarily early 0:11:52.800 --> 0:11:57.200 on during COVID. For the UM the portfolio companies to 0:11:57.240 --> 0:11:59.640 get their bearings and see, you know how things were 0:11:59.640 --> 0:12:02.559 on full in retail, but that innovation was in process, 0:12:02.720 --> 0:12:05.640 and so there's innovation that's now in process to come 0:12:05.640 --> 0:12:08.240 onto shelf and did through the back half of the 0:12:08.320 --> 0:12:10.400 year as well as in will in two thousand twenty 0:12:10.440 --> 0:12:13.480 one because suppliers that were able to deliver and to 0:12:13.559 --> 0:12:18.000 meet the expectations of their buyers were certainly allocated self space. UM. 0:12:18.160 --> 0:12:21.040 Beyond that, there are new preferences that have been built 0:12:21.040 --> 0:12:23.680 and so innovation lines are being developed off of changing 0:12:23.679 --> 0:12:27.840 consumer preferences. So you know, we think innovation continues to thrive. UM. 0:12:27.880 --> 0:12:32.160 It will just be you know, sort of quality manufacturers 0:12:32.280 --> 0:12:36.120 who have the ability to to really um properly stock 0:12:36.200 --> 0:12:39.120 the shelves and to deliver in a way that people 0:12:39.160 --> 0:12:41.920 can trust that the products are going to meet expectations 0:12:41.960 --> 0:12:45.360 of both the retail partners and the consumer. Jordan's thank 0:12:45.400 --> 0:12:47.480 you so much for joining us today. Will certainly given 0:12:47.520 --> 0:12:49.439 touch of you throughout the year. No doubt there will 0:12:49.480 --> 0:12:53.480 be activity among your companies. Jordan Gaspar is moniting partner 0:12:53.559 --> 0:12:56.920 and president of a f Adventure is a very interesting 0:12:56.960 --> 0:13:03.200 consumer and packaged goods and beauty company h venture fund. 0:13:03.320 --> 0:13:08.600 Let's put it that way. This morning, a preceived another 0:13:08.679 --> 0:13:12.280 job's claims a number frustratingly higher, much higher than expected, 0:13:12.320 --> 0:13:16.880 almost a million claims uh last month. Really putting pressure 0:13:16.960 --> 0:13:20.400 on present like Biden too uh put through and propose 0:13:20.920 --> 0:13:24.600 a much a significant fiscal stimulus plan to break it down. 0:13:24.679 --> 0:13:29.160 We welcome Carl Ricka Donna, Chief US economist for Bloomberg Economics. Carl, 0:13:29.240 --> 0:13:33.640 let's start with that jobless claim number. What's your takeaway? Well, 0:13:33.679 --> 0:13:36.439 there's good news and there's bad news, Paul. The bad 0:13:36.480 --> 0:13:40.079 news is that nearly a million people filed for unemployment 0:13:40.120 --> 0:13:43.920 insurance last week. But the good news is that a 0:13:43.960 --> 0:13:47.480 million people will be receiving unemployment checks to support their 0:13:47.800 --> 0:13:52.520 income during this difficult period for the economy and one 0:13:52.520 --> 0:13:55.640 of the critical uh, you know, issues for the economy 0:13:55.679 --> 0:13:59.920 of building a bridge loan until we can reopen. The 0:14:00.000 --> 0:14:02.200 economy and a lot of households, whether we look at 0:14:02.240 --> 0:14:06.760 the income trends or food stamp applications or other types 0:14:06.840 --> 0:14:10.480 of signs of financial stress, are really in a difficult 0:14:10.480 --> 0:14:13.760 period right now. So we do need to paper over 0:14:13.840 --> 0:14:15.600 some of the pain, patch up some of the pain 0:14:16.320 --> 0:14:19.720 with the aid in terms of food stamps, unemployment checks, 0:14:19.760 --> 0:14:23.320 and rebate checks from the government until we can get 0:14:23.360 --> 0:14:27.960 to a post lockdown economy. In this week's data, we 0:14:28.040 --> 0:14:31.600 see nearly more than two hundred thousand people more than 0:14:31.600 --> 0:14:35.320 economists we're looking for claiming this week to January nine, 0:14:35.480 --> 0:14:38.320 which is an interesting sort of little detail in itself. 0:14:38.800 --> 0:14:40.920 Each one of these people not a detail, of course, 0:14:40.960 --> 0:14:44.520 They're all human beings, and I'm curious as to why 0:14:44.560 --> 0:14:47.320 economists might have got it so wrong. Are there more 0:14:47.360 --> 0:14:52.040 people out there unemployed and underemployed that we're just not seeing? Well, 0:14:52.080 --> 0:14:54.800 I think a big factor here. There's been a little 0:14:54.800 --> 0:14:59.480 bit of a mystery since early November, when lockdown measures 0:14:59.560 --> 0:15:03.800 start to intensify. We really didn't see the fallout in 0:15:03.800 --> 0:15:08.440 the unemployment filings data. So we we expected way back 0:15:08.520 --> 0:15:11.960 by before Thanksgiving even to start to see the steady 0:15:12.000 --> 0:15:15.200 move higher and jobless claims over the last really last 0:15:15.280 --> 0:15:17.880 eight weeks or so. Uh, and it only happened to 0:15:17.920 --> 0:15:22.160 a very limited degree, which seemed inconsistent with restaurants being 0:15:22.200 --> 0:15:24.760 shut down, indoor dining bands, and all of the other 0:15:24.800 --> 0:15:28.240 restrictions that are going into place. So while I hate 0:15:28.240 --> 0:15:31.080 to be vindicated, Uh in looking for that that we 0:15:31.160 --> 0:15:33.560 do see that showing up in today's data. So you know, 0:15:33.680 --> 0:15:36.520 at this time of year, there's very big seasonal factors 0:15:36.600 --> 0:15:39.280 as people are laid off as cold weather sets in, 0:15:39.360 --> 0:15:43.600 if they had outdoor employment, for instance, or holiday related hiring, 0:15:43.600 --> 0:15:46.920 all of those things. Uh, they tend to distort the data. 0:15:46.960 --> 0:15:49.360 And this is certainly an atypical period we're in. So 0:15:49.840 --> 0:15:53.600 using typical seasonal factors is hard to apply to the 0:15:53.600 --> 0:15:56.280 current environment, but it's really the best we can do 0:15:56.400 --> 0:16:00.200 as as statisticians. Uh. The other factor is, uh the 0:16:00.280 --> 0:16:05.160 recent passage of the stimulus bill. Uh, those sweetened unemployment 0:16:05.480 --> 0:16:09.600 checks and also stimulus checks. That does incentivize some people 0:16:09.640 --> 0:16:12.400 who may be figured it wasn't worth filing for unemployment 0:16:12.880 --> 0:16:16.320 to actually uh take the effort to do it now 0:16:16.360 --> 0:16:20.360 that there will be a more enticing reward, uh if 0:16:20.360 --> 0:16:23.680 their applications accepted. Carl, We're expected to hear from President 0:16:23.720 --> 0:16:27.720 le Biden later today talking about perhaps fiscal stimulus plan. 0:16:28.000 --> 0:16:32.560 What do you really need to see in his plan? Well, 0:16:32.640 --> 0:16:35.400 there's the the pie in the sky version, and there's 0:16:35.440 --> 0:16:40.280 the reality of a split Senate with the Vice President 0:16:40.520 --> 0:16:44.080 Kamala Harris casting the deciding vote, and so pie in 0:16:44.120 --> 0:16:48.880 the sky stimulus, which could be green energy and infrastructure investment, 0:16:49.040 --> 0:16:52.920 and of course aid uh for uh uh you know 0:16:52.960 --> 0:16:57.160 the current economic downturn. Uh. That would be great if 0:16:57.160 --> 0:16:59.080 we could see that, and that was certainly force GDP 0:16:59.200 --> 0:17:01.600 to a higher number. But I think the reality of 0:17:01.640 --> 0:17:03.920 the situation is that we're going to see much more 0:17:04.080 --> 0:17:08.880 limited stimulus. Already, Joe Mansion of West Virginia has expressed 0:17:08.880 --> 0:17:12.560 some concerns about astronomical price tag, so I think the 0:17:12.600 --> 0:17:15.200 reality will be we can talk about a two trillion 0:17:15.200 --> 0:17:20.200 dollar plan, we're more likely to see six eight hundred billion. Carl. 0:17:20.280 --> 0:17:24.240 Speaking of major speeches, today, we hear from Jerry J. Powell. 0:17:24.640 --> 0:17:26.879 Is he likely to say anything that will surprise the market? 0:17:28.240 --> 0:17:32.040 I don't think so. J. Powell is giving speaking on 0:17:32.200 --> 0:17:38.040 an academic lecture at the Princeton University Benheim Center for Finance, 0:17:38.400 --> 0:17:41.240 so I'm an alumni of that. So that's exciting in 0:17:41.280 --> 0:17:44.800 that regard. But as an election, you know, as they 0:17:45.680 --> 0:17:49.040 an opportunity to really steer the markets, this doesn't seem 0:17:49.119 --> 0:17:52.200 like the right platform to be doing that. So at 0:17:52.200 --> 0:17:55.680 best I think we might get some insight into how 0:17:55.720 --> 0:17:58.800 he is thinking about the inflation and growth landscape, but 0:17:58.840 --> 0:18:02.680 this is not the opportunity to really create a new 0:18:02.800 --> 0:18:07.080 policy signal. Carl Rick Donna, thank you as always. Carl 0:18:07.200 --> 0:18:10.280 is chief you as economist for Bloomberg Economics, and we 0:18:10.320 --> 0:18:13.840 always appreciate his insights. Once again, that initial jobs claims 0:18:13.920 --> 0:18:18.040 data coming out and just you know, sending chills down 0:18:18.080 --> 0:18:22.680 our spines. Sixty five thousand people filing claims to the 0:18:22.720 --> 0:18:25.800 week of January nine, and of course the week earlier 0:18:26.040 --> 0:18:28.240 was revised, but only by five thousand. It's it's not 0:18:28.320 --> 0:18:31.240 like we're not seeing what's in the data, or it's 0:18:31.240 --> 0:18:34.120 not like yet the data or opaque or anything like that. 0:18:34.320 --> 0:18:37.520 We also got continuing claims obviously five point two seven 0:18:37.600 --> 0:18:41.919 one million, which is more than we were anticipating as well. 0:18:44.359 --> 0:18:48.120 And it's on Wall Street time for Bloomberg Opinion Today 0:18:48.160 --> 0:18:52.320 we're joined by at Lisa Martinouzi, Bloomberg Opinion columnists covering finance, 0:18:52.359 --> 0:18:55.560 and she has a fascinating column out today talking about 0:18:55.600 --> 0:19:00.080 and analyzing the relationship between President Trump, his busin this 0:19:00.280 --> 0:19:02.920 is and Deutsche Bank. At Leasta, thanks so much for 0:19:03.000 --> 0:19:05.280 joining us here. It seems like we're seeing a lot 0:19:05.320 --> 0:19:09.000 of corporations trying to back away and distance themselves from 0:19:09.000 --> 0:19:11.760 the president and his companies. That's not going to be 0:19:11.840 --> 0:19:15.000 so easy for Deutsche Bank to do, is it. Yes, Now, 0:19:15.040 --> 0:19:17.080 that's right, I think. Um. You know, what you have 0:19:17.160 --> 0:19:19.800 to consider is that this is an ongoing and very 0:19:19.880 --> 0:19:22.679 long standing lending relationship, one that has been going on 0:19:22.760 --> 0:19:26.040 for decades um to begin with, but also one that 0:19:26.119 --> 0:19:29.680 will linger. Because so we understand that Deutsche Bank has 0:19:29.720 --> 0:19:33.280 now committed not to be doing any new business with 0:19:33.440 --> 0:19:37.399 Donald Trump nor his companies or his entities, they are 0:19:37.440 --> 0:19:41.280 still sitting on loans that Donald Trump owes um ow 0:19:41.359 --> 0:19:43.400 s Deutsche Bank, and it's going to be a little 0:19:43.400 --> 0:19:46.520 bit tricky to extricate themselves from that relationship for a 0:19:46.560 --> 0:19:49.880 number of reasons. First and foremost, um, you know, may 0:19:49.920 --> 0:19:52.480 not be easy to find any anyone willing to take 0:19:52.520 --> 0:19:55.200 on that debt off them. But even if they did, 0:19:55.560 --> 0:19:58.119 this long standing relationship, we know it's going to be 0:19:58.200 --> 0:20:00.280 on come under the microscope. We know is going to 0:20:00.320 --> 0:20:05.520 be scrutinized. There are several investigations ongoing at various levels 0:20:05.520 --> 0:20:09.080 that could well see douortship banks being dragged out. Not 0:20:09.119 --> 0:20:12.080 so much because it's been necessarily accute of any wrongdoing, 0:20:12.520 --> 0:20:15.720 but certainly their business practices will come under the radar. 0:20:16.680 --> 0:20:18.560 There's a bit of a theory out there, and I 0:20:18.600 --> 0:20:20.679 don't know how serious it is or if it's just 0:20:20.720 --> 0:20:24.240 something that was floated that you know, people of a 0:20:24.320 --> 0:20:27.880 democratic leaning bent, let's say, who might run credit jobs 0:20:27.960 --> 0:20:29.760 or whatever it might pick this stuff up for a 0:20:29.880 --> 0:20:35.760 very cheap and try to get something from Donald Trump. Yes, no, 0:20:35.880 --> 0:20:37.919 that that you know could could well happen. But in 0:20:38.000 --> 0:20:42.480 terms of where doorship banks relationship goes and where doorship banks, um, 0:20:42.520 --> 0:20:45.800 you know, it's history hitherto in its relation with Donald 0:20:45.800 --> 0:20:50.760 Trump that will remain potentially under scrutiny. And you know 0:20:50.840 --> 0:20:53.720 when it comes to their business practices. Um. You know, 0:20:53.760 --> 0:20:56.000 this is a bank that is you know, tried and 0:20:56.240 --> 0:20:59.840 recently is very hard to um you know, rebuild. It's 0:20:59.840 --> 0:21:06.880 the two improve controls, improved governance. After decades of exponential 0:21:06.880 --> 0:21:09.800 growth that basically saw it, you know, taking on greater 0:21:09.840 --> 0:21:12.679 and wat to risk and that's resulted in um, you know, 0:21:12.720 --> 0:21:16.680 allegations and and you know find for many, many billions 0:21:16.680 --> 0:21:19.320 of dollars, and you know, this is just going to 0:21:19.440 --> 0:21:23.439 reignite that interest in the businesses of Deutsche Bank and 0:21:23.440 --> 0:21:26.960 how it goes about winning winning clients and winning business. 0:21:27.560 --> 0:21:29.399 At least, it's gonna be fascinating to see how the 0:21:29.440 --> 0:21:34.119 president and his business uh fund themselves going forward, because 0:21:34.400 --> 0:21:37.760 up until this point, there was no other money center 0:21:38.440 --> 0:21:43.520 UH institution lending money to the Trump corporation that came 0:21:43.520 --> 0:21:45.960 down to. Deutsche Bank was the only one. And it 0:21:46.040 --> 0:21:48.920 wasn't even the corporate and investment bank at Deutsche Bank. 0:21:48.960 --> 0:21:51.120 It was the private bank. And now the private banker 0:21:51.200 --> 0:21:54.320 for President Trump has left Deutsche Bank. So it it 0:21:54.600 --> 0:21:59.320 really raises the questions how the Trump organization will capitalize 0:21:59.320 --> 0:22:01.360 its business going forward. What do we know about that? 0:22:02.680 --> 0:22:06.280 I think that's you know, extremely early to speculate on that. Um, 0:22:06.400 --> 0:22:08.159 you know, your wife they do you know, dutche Bankers 0:22:08.160 --> 0:22:09.720 appeared to be the principal London, but you know, there 0:22:09.800 --> 0:22:14.560 may be more that we learn about these finances going forward. UM. 0:22:15.000 --> 0:22:16.560 I think it's you know, a little bit too early 0:22:16.600 --> 0:22:19.960 to speculate. I mean, clearly, UM, he will be a 0:22:20.040 --> 0:22:23.480 you know he is and will remain a polarizing figure. Um. 0:22:23.560 --> 0:22:26.320 And and that will affect you know, his dealings and 0:22:26.480 --> 0:22:29.440 the dealings of those who have been you know, enabling 0:22:29.520 --> 0:22:33.280 him over the years. And of course we also had Signature, 0:22:33.359 --> 0:22:36.200 which is a much smaller, a boutique kind of bank, 0:22:36.640 --> 0:22:39.399 who might take over from them? Will anybody step up 0:22:39.400 --> 0:22:43.199 to the place? As I said, I think I think 0:22:43.200 --> 0:22:45.000 it's a little bit early to you know, to speculate 0:22:45.040 --> 0:22:47.399 on all this. Um. I think what we do know 0:22:47.560 --> 0:22:49.399 is that you know, obviously, um, you know a lot 0:22:49.440 --> 0:22:52.520 of businesses, a lot of institutions have been distancing themselves 0:22:52.520 --> 0:22:56.440 and vowing not to do business with Trump and his organizations. UM. 0:22:56.520 --> 0:22:59.320 From from including the City of New York, the p G, 0:22:59.480 --> 0:23:02.320 A and A and its golf tournaments, and that is 0:23:02.359 --> 0:23:05.920 you know, undas peopill have repercussions on on his entourage 0:23:07.080 --> 0:23:10.280 at least. How concerned is Deutsche Bank do you believe 0:23:10.880 --> 0:23:14.760 about its reputation and maybe maybe the business risk it 0:23:14.840 --> 0:23:17.320 faces from some of its customers saying we don't want 0:23:17.359 --> 0:23:19.439 to do business with you. Are they concerned about or 0:23:19.440 --> 0:23:23.120