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Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm pim Fox.

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Speaker 1: Along with my co host Lisa Abramowitz. Each day we

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Speaker 1: bring you the most important, noteworthy, and useful interviews for

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Speaker 1: you and your money, whether you're at the grocery store

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Speaker 1: or the trading floor. Find the Bloomberg p m L

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Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Tesla

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Speaker 1: Tesla and its effort to go private has involved Saudi

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Speaker 1: Arabia's public Investment fund. The company is considering a major

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Speaker 1: investment in Tesla that would be over two hundred billion

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Speaker 1: dollars and um well, two billion dollars in assets is

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Speaker 1: what the public Investment Fund currently has, and they have

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Speaker 1: already purchased apparently a five percent stake in Tesla. Why

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Speaker 1: would Saudi arab be a want to be investing in

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Speaker 1: a company that makes electric cars when the main export

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Speaker 1: of Saudi Arabia happens to be oil. Here to tell

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Speaker 1: us is Dr ellen Wald, President of Transversal Consulting, also

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Speaker 1: a non resident Senior Fellow at the Atlantic Council's Global

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Speaker 1: Energy Center. Dr wall thanks for being here in our

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Speaker 1: eleven three oh studios. So why would Saudi Arabia, which

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Speaker 1: depends on its oil revenue to fund the government and

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Speaker 1: its various social programs as well as a variety of

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Speaker 1: other things. Why would their public Investment fund want to

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Speaker 1: be investing in a company that is doing everything it

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Speaker 1: can to make oil obsolete. There there are really two

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Speaker 1: reasons for this that that I see. The first is

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Speaker 1: that the p i F is really the creation of

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Speaker 1: Mohammed bin Salman, the Crown Prince of Saudi Arabia, and

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Speaker 1: his vision um plan to really um diversify the kingdom economically.

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Speaker 1: And the p IF is really into investing in tech companies,

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Speaker 1: so they see Tesla as one of these up and

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Speaker 1: coming tech companies that they want to invest in. Then

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Speaker 1: you have the electric vehicle component and the idea, or

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Speaker 1: at least what the Prince has said, is that he'd

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Speaker 1: like to basically hedge against oil. He wants to invest

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Speaker 1: in other energy alternative energies because someday he believes that

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Speaker 1: Saudi Arabia will either run out of oil or oil

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Speaker 1: won't be useful anymore, so he sees this as a

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Speaker 1: hedge against that. Now, the big question is really does

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Speaker 1: the p IF even have enough money to make this

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Speaker 1: investment to take Tesla private. This is important because I

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Speaker 1: thought that the that this fund was massive and had

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Speaker 1: endless money. Well it is massive, but they've made a

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Speaker 1: lot of investments and they have a lot of their

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Speaker 1: money tied up in non liquid assets. So right now

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Speaker 1: they own most of the Saudi the national petro chemical

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Speaker 1: company Sabok, and apparently they'd like to sell that to

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Speaker 1: their national oil company a Ramco to gain more liquidity

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Speaker 1: to make more investments. So the money is actually really

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Speaker 1: tied up, and so they're going to have to either

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Speaker 1: put more money in or they're going to have to

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Speaker 1: sell some of their assets assets to to do this

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Speaker 1: potential Tesla deal. That's fascinating. Do you have a sense

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Speaker 1: of how much cash they have, how much liquid uh

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Speaker 1: money they have? Not At the moment, it's really unclear

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Speaker 1: because they can always put more in, it seems if

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Speaker 1: they want, but their budget is skyrocketing and so they're

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Speaker 1: using a lot of their money to um, you know,

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Speaker 1: to fund their government and to fund their their budgets.

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Speaker 1: So it's really an issue of of can they do this?

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Speaker 1: And there are some sources that say that that the

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Speaker 1: Saudi p i F is not necessarily all in on

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Speaker 1: this Tesla deal. Is it also true that Saudi Arabia

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Speaker 1: is putting a lot of money but hind solar energy

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Speaker 1: or energy obviously derived from the sun. Don't they have

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Speaker 1: an investment in soft Bank with Mashioshi San in order

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Speaker 1: to bring solar power to the kingdom. Yeah, and this

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Speaker 1: has been a really long time coming issue for Saudi Arabia.

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Speaker 1: In fact, the oil company there was actually using solar

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Speaker 1: power back in the nineties seventies to power kind of

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Speaker 1: far out installations. But Ali A na Amy, who was

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Speaker 1: the former oil minister, had this vision that Saudi Arabia

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Speaker 1: would become an exporter of solar power because they have

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Speaker 1: so much desert and so much sun. Uh. The fact

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Speaker 1: is that it's taken a bit longer. He originally talked

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Speaker 1: about this, I think it was about ten years ago,

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Speaker 1: and they're just now starting to contract to build these

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Speaker 1: solar installations. But it's really a project that they are

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Speaker 1: hoping to to bring to the kingdom. The question really, though,

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Speaker 1: is if they want to be a solar power exporter,

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Speaker 1: they've got to have better battery technology because the technology

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Speaker 1: just isn't there yet. All Right, Well, so we're talking

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Speaker 1: about Saudi Arabia and how they're trying to plug the

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Speaker 1: gap in their budget right now, and I'm sure that

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Speaker 1: the recent fall and oil prices isn't really helping them.

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Speaker 1: And I want to talk about the oil market a

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Speaker 1: little bit more on the dynamics there because we have seen,

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Speaker 1: you know, Turkey's issues. They're a huge oil importer. What

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Speaker 1: are you seeing as far as the likely backdrop going forward?

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Speaker 1: Do you think that the price pressure is going to

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Speaker 1: be more to the upside of the downside. It really depends.

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Speaker 1: Right now, we're definitely in a place where we're much

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Speaker 1: more imbalance in terms of supply and demand, and that

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Speaker 1: means that any geopolitical event can affect oil prices much

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Speaker 1: more than it could before when there was more cushion

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Speaker 1: in the oil market. So right now. Saudi Arabia actually

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Speaker 1: in June produced a lot more oil because they thought

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Speaker 1: they'd have room to sell more oil, but they actually

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Speaker 1: found out they didn't quite have the customers for it.

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Speaker 1: So then in July they cut back on the production

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Speaker 1: because they can sell all their oil, which is kind

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Speaker 1: of surprising given the incredible push that Donald Trump was

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Speaker 1: making to get more oil on the market to prevent

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Speaker 1: prices from going up. Now, Turkey's issue is that Turkey

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Speaker 1: is this huge import of oil. It gets a lot

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Speaker 1: of its oil actually from Iran, and with its currency

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Speaker 1: depreciating as it has a lot of the oil it's

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Speaker 1: buying is going to be much more expensive for Turkey,

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Speaker 1: and so that may push Turkey towards importing more Iranian

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Speaker 1: oil if the Iranians are willing to sell it to

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Speaker 1: Turkey for lower prices. I'm glad you mentioned Iran because

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Speaker 1: Iran and Saudi Arabia they don't like each other very much,

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Speaker 1: at least their governments don't. Correct. No, they don't. And

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Speaker 1: in fact, there's going to be probably a bit of

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Speaker 1: a showdown in the oil realm between Iran and Saudi

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Speaker 1: Arabia coming up at the next um opeq On Monitoring

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Speaker 1: Committee meeting, where Saudi Arabia and Russia and the other

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Speaker 1: members of the committee are going to get together and

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Speaker 1: monitor just how much oil is being produced. And apparently

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Speaker 1: Iron has said Iron's not a member of this committee,

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Speaker 1: but its oil minister has said he's going to the

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Speaker 1: meeting and he is not going away without a fight.

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Speaker 1: Just real quick, I was looking at the production capacity

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Speaker 1: in US oil producers and it's been going up dramatically.

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Speaker 1: Do you think that the likely response to this will

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Speaker 1: be a greater investment or do you think that it

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Speaker 1: means that the oil prices are going to go down.

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Speaker 1: I think we're in a place where they could They

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Speaker 1: could head either way depending. We saw oil prices go down,

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Speaker 1: uh the other day because there was a massive build

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Speaker 1: in inventor in the United States. But it really does depend.

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Speaker 1: There's news that there are a bunch of shale oil

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Speaker 1: producers that are not going to be increasing production because

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Speaker 1: of there's um infrastructure constraints they're facing. The US is

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Speaker 1: not exported as much oil in the last month as

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Speaker 1: it had before, So we're really kind of on this

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Speaker 1: cusp where it could go either way. Dr Ellen Walt,

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Speaker 1: thank you so much. We always love having you, President

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Speaker 1: of Transversal Consulting, also nonresident Senior Fellow at the Atlantic

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Speaker 1: Council's Global Energy Center. After a whild ride, the Turkish

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Speaker 1: lira is continuing to recover a bit versus the dollar today.

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Speaker 1: Is the stability enough for investors to buy joining US now?

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Speaker 1: As Michelle de Naeschi, portfolio manager for Vidra Partners Limited

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Speaker 1: in London, Michelle, thank you so much for being with us.

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Speaker 1: You have an incredible amount of experience investing in equity,

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Speaker 1: derivatives and emerging markets. Going back to Lehman Brothers, looking

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Speaker 1: at this scenario, is Turkey flashing a huge by signal

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Speaker 1: given how much its assets have been beaten up right now? Wow?

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Speaker 1: First of all, it depends which asset class you're talking about. Uh. Clearly,

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Speaker 1: when it went to seven to the dollar and interest

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Speaker 1: rates went to high twenties, it started becoming attractive to

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Speaker 1: investors on a risk reward basis. Uh. You know, However,

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Speaker 1: there is fundamental problems with the Turkish situation as we speak,

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Speaker 1: given the high debt levels in dollar terms, and that's

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Speaker 1: not going to go away, and the the confidence of

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Speaker 1: the market on the ability of the central bank to

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Speaker 1: control inflation is simply not there for a long term

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Speaker 1: turnaround and a long term investment. Okay, So just to

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Speaker 1: point out that that was one to three days ago

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Speaker 1: that we were seeing the Turkish era at seven versus

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Speaker 1: the dollar. Right now we're like five point eight. Yeah,

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Speaker 1: So I'm just wondering, you know, talking about let's say equities,

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Speaker 1: Turkish equities have gotten really beaten up, in particular their

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Speaker 1: financial industry. What about in that area, are there opportunities

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Speaker 1: there or given the fact that you do see a

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Speaker 1: wider set of issues, here are those set for for

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Speaker 1: more the clients and even a potential failure. I think

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Speaker 1: I think the situation requires a slowdown in the economy

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Speaker 1: whatever you see it. Either the crisis continues and and

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Speaker 1: you get a natural slowdown in the economy, or the

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Speaker 1: interest rates are hiked in the classic orthodox way to

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Speaker 1: deal with the inflation and the market loss of confidence

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Speaker 1: in the authorities. So either way you're going to see

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Speaker 1: a slowdown. And when you see a slowdown, you tend

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Speaker 1: to see a rise in mpls. Although the banks are

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Speaker 1: well capitalized and well regulated by b rs A, you

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Speaker 1: just never know how high the mpls go. As we've

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Speaker 1: seen in other countries like Italy, Spain, Greece, mpls can

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Speaker 1: go much higher than in the last crisis two thousand

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Speaker 1: and eight when they went to five six mpl rates.

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Speaker 1: If they start getting close to ten, then these banks

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Speaker 1: do need capitalization and there for the equity investments I

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Speaker 1: would say would be at the right time when they

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Speaker 1: need the recapitalization, rather than now. What is positive for

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Speaker 1: the Turkish situation is obviously that the sovereign debt level

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Speaker 1: is relatively low compared to some of these other countries

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Speaker 1: like mentioned like Italy, Spain or or Greece for example

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Speaker 1: at deb to GDP, there is some room for so

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Speaker 1: sovereign support and bailout. Michelle is someone that helps to

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Speaker 1: manage the money of high net worth families. If you

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Speaker 1: were going to plan a trip in the fall to

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Speaker 1: go to Turkey to prospect for potential investments, what kinds

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Speaker 1: of meetings would you want to have lined up with?

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Speaker 1: What kinds of companies? Would it be the banking industry

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Speaker 1: or would it be things like conglomerates and consumer staples.

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Speaker 1: I mean, given this the weaker lira is a necessity

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Speaker 1: to balance rebalanced economy, I would say the exporters would

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Speaker 1: be the highest beneficiary. So the exporters would be the

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Speaker 1: ones I'll be most comfortable with to make investments in

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Speaker 1: and and and the Let's say the banks which do

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Speaker 1: have a backstop either be a strong parent or or

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Speaker 1: or unrelated entity which can support the bank in case

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Speaker 1: they do need recapitalization. So looking for some of their

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Speaker 1: bonds which are now yielding eleven twelve thirteen percent in dollars,

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Speaker 1: which I think could be attractive if you know that

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Speaker 1: there is a backstop. So I'm just wondering broadening out here.

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Speaker 1: Given the fact that we did see emerging market currencies

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Speaker 1: track that of Turkey during its swoon, I'm wondering how

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Speaker 1: worried you are at this point, just in general about

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Speaker 1: the developing markets and in particular the equity markets which

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Speaker 1: have been really tied to currencies. Uh, you know, I

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Speaker 1: think you have to go back and see, Okay, what

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Speaker 1: is leading all of this, and that's probably what's going

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Speaker 1: on in the US, be it the strong dollar or

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Speaker 1: the end of QUEI, or more importantly at the moment,

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Speaker 1: is the trade wars. I think these are the real

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Speaker 1: triggers rather than Turkey triggering the problem and the rest

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Speaker 1: of developing markets. So if you see some kind of

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Speaker 1: um alleviation of the problem, for example the trade war

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Speaker 1: with the US China coming down, then I think emerging

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Speaker 1: markets in a much better position. Or if the dollar

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Speaker 1: has stabilized, then emerging markets would be much stronger position,

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Speaker 1: regardless where Turkey is. Thank you very much for being

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Speaker 1: with us, Michelle DANESHI is a portfolio manager for Vedra

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Speaker 1: Partners Limited. They are based in London, where they help

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Speaker 1: manage the assets of wealthy individual families. I want to

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Speaker 1: focus on one of the best things that I've read

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Speaker 1: all week. It is a study done by our own

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Speaker 1: Share Overdate technology columnist Bloomberg Opinion taking a look at

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Speaker 1: tech companies that have gone public in recent years and

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Speaker 1: finding out how many of them are actually cash flow positive.

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Speaker 1: Now joining us now is the own the one and

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Speaker 1: only Shara over Day of Limberck Opinion. So, Shira, can

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Speaker 1: you just talk a little bit about what you found? Right?

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Speaker 1: So I looked at US tech companies that have gone

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Speaker 1: public on u S stock exchanges since the beginning of

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Speaker 1: two thousand ten, and it was something like a hundred

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Speaker 1: and fifty companies that have gone public in those eight

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Speaker 1: plus years and are still um independent companies. And of

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Speaker 1: those about one about four and ten, so it's thirties

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Speaker 1: seven percent I believe of those companies was had negative

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Speaker 1: cash from operations in the most recent twelve month period,

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Speaker 1: which I found surprisingly high. And now those a hundred

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Speaker 1: and fifty companies, it include some companies that have gone

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Speaker 1: public obviously recently in this year but also companies that

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Speaker 1: have been public for eight years um, and some of

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Speaker 1: those companies are also burning cash surprisingly. Okay, So it's

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Speaker 1: what's interesting to me about this is that US touch

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Speaker 1: companies have been notably reluctant to go public, and the

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Speaker 1: vast majority of startups have remained private for a far

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Speaker 1: longer time than many people have thought that they've needed

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Speaker 1: to just based on history. So what does this finding

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Speaker 1: suggest to you about all those private unicorns out there? Yeah,

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Speaker 1: I mean, I we don't know the financials of private

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Speaker 1: tech companies, but there's something like two hundred and sixty

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Speaker 1: uh private technology companies valued at a billion dollars or more.

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Speaker 1: This is an unprecedented valuation of tech companies. From sort

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Speaker 1: of Uber to Airbnb and beyond that are would be

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Speaker 1: very largely large cap um public companies if they were public.

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Speaker 1: I would venture to guess that a fraction of those

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Speaker 1: companies are caslaw positive at this point, and at some

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Speaker 1: point they're going to be public company and then their

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Speaker 1: cash burn is the problem of public company investors. And

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Speaker 1: the best example we have of that right now is Snapchat,

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Speaker 1: which when public eighteen months ago. Literally when I saw

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Speaker 1: the cash flow statement, when I saw the financial statements

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Speaker 1: at Snapchat when they filed to go public. I didn't

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Speaker 1: believe my eyes that the company had um was burning

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Speaker 1: more cash than it generated in revenue UM in the

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Speaker 1: year before it when public. And you know those the

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Speaker 1: cash burn has gotten slightly better, but still it is

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Speaker 1: burning significance significant amounts of cash and likely will for

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Speaker 1: several more years, which means that now public companies have

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Speaker 1: to fund the public company investors have to fund those losses.

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Speaker 1: Is it worth noting that cash flow really just measures

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Speaker 1: the changes in the money that's available for the company

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Speaker 1: to use. You could have a variety of different reasons

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Speaker 1: for this negative cash flow. Correct. I mean the reason

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Speaker 1: to have negative a company has negative cash from operations

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Speaker 1: is you're generating less cash every quarter than it costs

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Speaker 1: to run your business. Correct. So again, but it could

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Speaker 1: be for a variety of different reasons. It could be

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Speaker 1: because the company is continuously acquiring or investing, or spending

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Speaker 1: money on R and D or anything like that. Absolutely right,

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Speaker 1: But hold on a second. But we have actually one example,

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Speaker 1: particularly in the private space, Uber We just saw some

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Speaker 1: information from them. Can you just talk about why they're

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Speaker 1: burning through cash so quickly? Well, we don't really know

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Speaker 1: because Uber releases financial statements, but their cherry picked financial

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Speaker 1: statements without any context. But if you look at the

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Speaker 1: scope of Uber, it's investing in lots of things. It

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Speaker 1: has obviously their core business of rides on demand. It's

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Speaker 1: investing in scooters and bicycles, and cities and flying cars

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Speaker 1: and driverless cars, and restaurant food delivery and matching freight

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Speaker 1: demand and supply, all of and investing in multiple countries

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Speaker 1: all over the world. And those are potentially promising business opportunities,

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Speaker 1: but they also are enormous drain on cash. And Uber

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Speaker 1: for example, uh it had negative cash from operations of

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Speaker 1: one point three billion dollars in the last twelve months.

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Speaker 1: So again, this is story as a company that has

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Speaker 1: been funded by investors to grow, to invest in growth opportunities,

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Speaker 1: and that is exactly what it has done. But at

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Speaker 1: some point of course, all companies have to finance themselves.

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Speaker 1: Other companies include Pandora Media, Yeah, exactly. The big surprise

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Speaker 1: to me was that there are some companies in that

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Speaker 1: analysis of companies have gone public since two thousand ten

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Speaker 1: that we're old. Pandora Media in public in two thousand eleven, right,

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Speaker 1: and um, it has been inconsistently cash flow positive, but

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Speaker 1: it is now again burning CA And that's not a

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Speaker 1: young company, right, And it's hard to argue at this

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Speaker 1: point that it's a growth company. It's just a company

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Speaker 1: that has never been able to finance itself through cash

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Speaker 1: generated by its own business. Alright, I feel like we

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Speaker 1: have to touch on news on that cross. I guess

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Speaker 1: late last night that I thought was kind of interesting

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Speaker 1: that Amazon is trying to get further into the brick

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Speaker 1: and mortar movie theater business. Kind of confusing to me. Why, Yeah,

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Speaker 1: me too. I don't have a great answer for it.

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Speaker 1: But as you said, our colleagues reported last night that

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Speaker 1: Amazon is among the potential bidders for the Landmark Movie

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Speaker 1: Theater chain, which is mostly kind of independent kind of

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Speaker 1: cinema movie theaters. And it's interesting that we're now starting

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Speaker 1: to see some of the companies that have done home

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Speaker 1: streaming video entertainment, including Netflix, become maybe a little bit

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Speaker 1: more interested in movie theaters. And honestly, I cannot confess

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Speaker 1: to understanding it. Maybe there's some kind of connection Amazon

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Speaker 1: sees between its Prime subscription program and offering people kind

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Speaker 1: of movie theater tickets or a movie pass let subscription service.

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Speaker 1: I don't know, and like the experience, right, you never know. Right,

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Speaker 1: they got fifty theaters, They've got high profile locations New York, Philadelphia, Chicago,

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Speaker 1: Los Angeles, San Francisco. I've got about two d and

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Speaker 1: fifty screens in all. I mean to me, what this

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Speaker 1: story shows is just how um ambitious and maybe unpredictable

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Speaker 1: Amazon is. That for better or for worse, it is

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Speaker 1: hard to know exactly all of the things that Amazon

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Speaker 1: wants to do in the future. And maybe movie theaters

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Speaker 1: is on their list. Yeah. And indeed, just to make

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Speaker 1: a note that Landmark is currently owned by H. Wagner

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Speaker 1: Cuban Companies. Right, that's the Mark Cuban and that todd Agne. Yeah. Um,

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Speaker 1: no estimates to actually how much this would this would cost? Right, yes, no,

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Speaker 1: and our story don't have estimates about the price tag. Um. Again,

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Speaker 1: from investors standpoint, they probably won't care, wouldn't be material

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Speaker 1: to Amazon. But it's still weird. Okay, thank you very much.

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Speaker 1: Shira Ovida Bloomberg opinion columnists for All Things Technology. We

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Speaker 1: encourage you to read her columns Recycling Recycling in the

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Speaker 1: United States, Well, it is under some specific challenges. For example,

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Speaker 1: about a thousand recycling centers and processing plants have shut

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Speaker 1: down in California alone. Here to tell us more about

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Speaker 1: the industry and the business is Davina Rankin. She financial

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Speaker 1: officer for Waste Management. They're based in Houston, but she

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Speaker 1: joins us here in our eleven three oh studios. Devina,

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Speaker 1: thank you very much for being here. Is there a

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Speaker 1: crisis in the world of recycling in the United States?

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Speaker 1: What I would say is it's an opportunity. You know,

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Speaker 1: where we are is that China has closed down its

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Speaker 1: demand for some of the product that we were selling.

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Speaker 1: But today we are actually only putting about three percent

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Speaker 1: of the material that we process through our facilities into China.

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Speaker 1: We've looked for other markets and we've successfully found homes

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Speaker 1: for the products. But isn't this because China has deemed

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Speaker 1: a lot of the recycled material contaminated and they've been

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Speaker 1: talking about this for a long time. Plus, if you

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Speaker 1: own a landfill, you're still going to make money if

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Speaker 1: you don't recycle, because that stuff will just go to

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Speaker 1: a landfill anyway. So they're all great questions. What I

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Speaker 1: would start with is contamination is a big problem, and

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Speaker 1: contamination is something that we've been working on proactively for

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Speaker 1: a long time. We're taking further ups today and that

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Speaker 1: includes ensuring that our customers take some responsibility for contamination too.

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Speaker 1: And so what we need each of the consumers to

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Speaker 1: understand is they've got to stop putting the dirty pizza

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Speaker 1: boxes in the recycling container. There's needs to need to

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Speaker 1: go in the trash. We need to be sure that

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Speaker 1: the recycling that we get in that green container is

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Speaker 1: a clean resource that we can then sell to our customers.

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Speaker 1: What's important though about thinking about waste management is while

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Speaker 1: we are the leading landfill service provider in the country,

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Speaker 1: recycling is an important part of our business, and so

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Speaker 1: we're committed to that business, but we're doing so in

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Speaker 1: a way that we ensure that it's both environmentally sustainable

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Speaker 1: and economically sustainable. Has there been discussion about expanding the

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Speaker 1: U s is ability to recycle things here without shipping

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Speaker 1: it over to China or another country. So what's interesting

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Speaker 1: is actually all of our plastics are our closed loop.

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Speaker 1: We we manage all of our plastics here domestically, and

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Speaker 1: so all of the plastics that we processed through our

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Speaker 1: facilities we then sell to customers here. The same is

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Speaker 1: true for metals. Now those two things are relatively small

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Speaker 1: in the grand scheme of things with regard to the

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Speaker 1: overall material we manage. We're certainly looking for more domestic

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Speaker 1: outlets for paper and fiber, and we find those were

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Speaker 1: proactive about that, but international markets have been good customers

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Speaker 1: and we're continuing to find the right balance between domestic

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Speaker 1: and international. I want to shift gears. When you talk

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Speaker 1: about all of the processing involved here, I think about

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Speaker 1: the amount of labor that's involved. And we've been talking

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Speaker 1: extensively about the tight labor market and how they're just

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Speaker 1: as a shortage of workers. I'm wondering, how has your

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Speaker 1: company experienced that and what have you done to counter it.

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Speaker 1: You know, we have forty three thousand employees across the

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Speaker 1: Waste Management network, so we're a large employer of US

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Speaker 1: and Canadian people, and and what's important to us as

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Speaker 1: being an employer of choice and being a great place

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Speaker 1: to work. We're actually celebrating one of our employees will

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Speaker 1: be retiring at the end of the year and he

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Speaker 1: spent forty six years with Waste Management. That doesn't happen

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Speaker 1: at a lot of places. We have a special culture,

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Speaker 1: and it's ensuring that we're investing in our people, making

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Speaker 1: sure that they see career growth opportunities at the company,

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Speaker 1: but also seeing that it's just a great place to

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Speaker 1: be and we do great exciting things for our customers

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Speaker 1: in our environment. Speak if you can about volume and

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Speaker 1: price increases, because didn't that lead you to raise your

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Speaker 1: guidance for the year? It absolutely did. Um we've had

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Speaker 1: the best organic revenue growth that this company really has

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Speaker 1: ever seen. So we're seeing that organic growth on both

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Speaker 1: price and volume in in in the past, this industry

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Speaker 1: would have believed you could only get one, not not

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Speaker 1: both in conjunction with each other, and we're proving that

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Speaker 1: that's the case. And the strength of solid waste is

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Speaker 1: really what led us to confidently raise our guidance at

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Speaker 1: the end of our second quarter. Have you had to

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Speaker 1: increase I just want to go back to the job's

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Speaker 1: issue for a second, because I'm wondering, you know that

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Speaker 1: there's been this conundrum in the market, when will we

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Speaker 1: see wages increase materially beyond sort of the rate of inflation,

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Speaker 1: which we really have not seen over the past year.

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Speaker 1: And I'm wondering from your vantage point, are you finding

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Speaker 1: that you're having to pay people more to come in

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Speaker 1: the doors and be an employee at your company. So

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Speaker 1: we're taking this on from two different vantage points. We

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Speaker 1: were one of the companies that decided to give special

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Speaker 1: bonuses to our employees with the cash inflows from tax reform,

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Speaker 1: and so at the end of two thousand and eighteen,

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Speaker 1: each of our employees who's not eligible for incentive compensation

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00:27:37,359 --> 00:27:40,240
Speaker 1: will receive a two thousand dollar bonus. But in addition

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00:27:40,280 --> 00:27:42,280
Speaker 1: to that, we work hard to make sure that their

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00:27:42,320 --> 00:27:46,320
Speaker 1: wages are competitive. And so while we always see some

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00:27:46,440 --> 00:27:51,240
Speaker 1: level of wage inflation, we're keeping that as as closely

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00:27:51,320 --> 00:27:54,719
Speaker 1: as we can to something that we watch and ensure

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00:27:54,960 --> 00:27:58,439
Speaker 1: is covered by our price increases. Does the sort of

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00:27:58,520 --> 00:28:02,720
Speaker 1: uncertain backdrop with respectigration effect you at all, you know, no,

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00:28:02,920 --> 00:28:06,760
Speaker 1: because we've always been sure that we employ US citizens

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00:28:06,880 --> 00:28:10,520
Speaker 1: and and at this point that's something that continues to

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00:28:10,560 --> 00:28:13,959
Speaker 1: be important to us, and and we will focus on

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00:28:13,960 --> 00:28:16,320
Speaker 1: that over the long term. Just to give you some

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00:28:16,400 --> 00:28:21,560
Speaker 1: chances to speak about standardized labeling when it comes to recycling,

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00:28:22,119 --> 00:28:25,200
Speaker 1: wouldn't that doesn't it sounds like a very straightforward kind

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00:28:25,200 --> 00:28:28,320
Speaker 1: of thing. Why don't we have that in the United States.

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00:28:28,880 --> 00:28:30,760
Speaker 1: You know, the way I would think about that is,

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00:28:30,800 --> 00:28:33,400
Speaker 1: you don't have a standardized label on your bowling ball

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00:28:33,480 --> 00:28:37,040
Speaker 1: that says don't put in the recycling facility. But you you,

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00:28:37,600 --> 00:28:40,880
Speaker 1: at your gut, know that your bowling ball doesn't need

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00:28:40,920 --> 00:28:43,600
Speaker 1: to go to one of our facilities to be recycled.

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00:28:44,040 --> 00:28:47,240
Speaker 1: So I'm not sure that the standardized label will get

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00:28:47,360 --> 00:28:49,960
Speaker 1: us the result that we want. It comes down to

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00:28:50,040 --> 00:28:54,960
Speaker 1: personal responsibility and accountability. And really what we're finding is

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00:28:55,120 --> 00:28:58,320
Speaker 1: that if there are fees for contamination, people will become

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00:28:58,360 --> 00:29:02,200
Speaker 1: more responsible. That sounds about right. You can't really rely

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00:29:02,240 --> 00:29:04,760
Speaker 1: on people to just sort of individual a just say

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00:29:04,760 --> 00:29:06,600
Speaker 1: to themselves, you know what today, I'm gonna be responsible.

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00:29:06,640 --> 00:29:08,400
Speaker 1: You just have to hit him where it hurts, right,

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00:29:08,840 --> 00:29:12,000
Speaker 1: Just don't drop the bowling block your foot. Davina Ranking,

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00:29:12,040 --> 00:29:14,240
Speaker 1: thank you so much for being with us. Davina Rankin

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Speaker 1: is chief financial officer for Waste Management based in Houston, Texas. Divina,

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Speaker 1: thank you so much for being with us. Really important

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Speaker 1: issue and fascinating to look at and pim. Here's to

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00:29:24,960 --> 00:29:27,040
Speaker 1: hoping that everybody takes a little more responsibility with their

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00:29:27,040 --> 00:29:30,720
Speaker 1: pizza boxes. Yes, don't put them in in the in

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00:29:30,760 --> 00:29:37,040
Speaker 1: the recycling if they're dirty. Thanks for listening to the

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Speaker 1: Bloomberg P and L podcast. You can subscribe and listen

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00:29:40,160 --> 00:29:44,320
Speaker 1: to interviews at Apple Podcasts, SoundCloud, or whatever podcast platform

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00:29:44,360 --> 00:29:48,280
Speaker 1: you prefer. I'm Pim Fox. I'm on Twitter at pim Fox.

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00:29:48,600 --> 00:29:52,120
Speaker 1: I'm on Twitter at Lisa Abramo. It's one before the podcast.

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00:29:52,160 --> 00:30:01,680
Speaker 1: You can always catch us worldwide on Bloomberg Radio