1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:22,000 Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business app. 4 00:00:22,360 --> 00:00:25,680 Speaker 1: Listen on demand wherever you get your podcasts, or watch 5 00:00:25,760 --> 00:00:27,040 Speaker 1: us live on YouTube. 6 00:00:27,320 --> 00:00:31,840 Speaker 2: Tiffany wild joins US managing director and economist at Pimco. 7 00:00:32,479 --> 00:00:37,159 Speaker 2: At Tiffany, I look at the Wilding Excel spreadsheet and 8 00:00:37,240 --> 00:00:40,640 Speaker 2: I guess it needs readjustment. Do you have a vision 9 00:00:41,120 --> 00:00:44,559 Speaker 2: out past Q four of what the American economy is 10 00:00:44,840 --> 00:00:45,239 Speaker 2: gonna do? 11 00:00:45,360 --> 00:00:46,360 Speaker 3: Or you just have to wait? 12 00:00:49,640 --> 00:00:52,800 Speaker 4: Yeah, I mean it's been obviously very difficult or more 13 00:00:52,840 --> 00:00:55,279 Speaker 4: difficult to get a sense on what's going on in 14 00:00:55,280 --> 00:00:58,400 Speaker 4: the economy just with the data that hasn't been released, 15 00:00:59,120 --> 00:01:01,680 Speaker 4: you know, but never the less, with private sector sources 16 00:01:01,720 --> 00:01:05,160 Speaker 4: of data, you know, we can get some insight, you know, 17 00:01:05,200 --> 00:01:08,200 Speaker 4: and it does look like things are pretty stable. We 18 00:01:08,240 --> 00:01:10,640 Speaker 4: think the economy is kind of a story of winners 19 00:01:10,640 --> 00:01:14,120 Speaker 4: and losers right now. Where you have, you know, obviously 20 00:01:14,120 --> 00:01:17,240 Speaker 4: the big tech companies, the AI build out, that's that's 21 00:01:17,319 --> 00:01:19,360 Speaker 4: very strong. But on the other side of that, you 22 00:01:19,360 --> 00:01:22,160 Speaker 4: have various factors that have hit the labor market, you know, 23 00:01:22,200 --> 00:01:24,840 Speaker 4: including the immigration story. We think lower demand is a 24 00:01:24,840 --> 00:01:28,160 Speaker 4: result of tariffs and of course some AI related displacement 25 00:01:28,800 --> 00:01:31,760 Speaker 4: that's resulting in you know, some loss of tech related 26 00:01:31,800 --> 00:01:35,319 Speaker 4: jobs is the other piece of that that looks weaker, 27 00:01:35,400 --> 00:01:37,240 Speaker 4: you know. I think in terms of monetary policy and 28 00:01:37,280 --> 00:01:39,399 Speaker 4: the FED, the fact that we haven't gotten the labor 29 00:01:39,440 --> 00:01:43,000 Speaker 4: market data, you know, is it makes it more difficult 30 00:01:43,000 --> 00:01:45,360 Speaker 4: for monetary policy go ahead. 31 00:01:45,520 --> 00:01:48,800 Speaker 2: Surprise that the UK today have a negative statistic on GDP. 32 00:01:49,600 --> 00:01:52,600 Speaker 2: Are you like a sub one percent GDP? Could that 33 00:01:52,640 --> 00:01:55,120 Speaker 2: be the shock of the shutdown we just lived? 34 00:01:57,040 --> 00:02:00,120 Speaker 4: Yeah, I mean, okay, yeah, so the shutdown will absolutely 35 00:02:00,160 --> 00:02:03,760 Speaker 4: impact fourth quarter growth. We think that one one to 36 00:02:03,840 --> 00:02:05,600 Speaker 4: one and a half percent is what it could shave 37 00:02:05,680 --> 00:02:08,760 Speaker 4: off of the fourth quarter. So we absolutely could see 38 00:02:09,080 --> 00:02:12,960 Speaker 4: a negative fourth quarter GDP print. But nevertheless, as you know, 39 00:02:12,960 --> 00:02:16,520 Speaker 4: as the government has already reopened, that activity will come 40 00:02:16,560 --> 00:02:20,120 Speaker 4: back online and you'll see an offsetting pickup in the 41 00:02:20,160 --> 00:02:22,840 Speaker 4: first quarter of next year. I think the other thing 42 00:02:22,880 --> 00:02:24,240 Speaker 4: to keep in mind in the first quarter is that 43 00:02:24,240 --> 00:02:26,959 Speaker 4: you're also going to get refund checks to households that 44 00:02:27,080 --> 00:02:29,680 Speaker 4: are quite large this year, so that will provide also 45 00:02:30,080 --> 00:02:33,600 Speaker 4: some support to the economy and to consumption in the 46 00:02:33,639 --> 00:02:34,560 Speaker 4: first part of next year. 47 00:02:35,200 --> 00:02:37,959 Speaker 5: Bet on the inflation front, tiffany A lot of folks 48 00:02:38,040 --> 00:02:42,079 Speaker 5: in the beginning of this tariff discussion, we're warning against 49 00:02:42,760 --> 00:02:45,760 Speaker 5: higher inflation, maybe materially higher inflation's resulting from terrorists. 50 00:02:45,760 --> 00:02:46,760 Speaker 3: But we haven't seen it, have we. 51 00:02:48,760 --> 00:02:51,560 Speaker 4: Yeah, we certainly haven't seen it to the extent that 52 00:02:51,720 --> 00:02:54,400 Speaker 4: many thought we would earlier this year. And I think 53 00:02:54,400 --> 00:02:57,000 Speaker 4: what we're learning as we are, as we have seen 54 00:02:57,080 --> 00:03:00,440 Speaker 4: some data, you know, is that companies are dealing with 55 00:03:00,480 --> 00:03:03,440 Speaker 4: the tariffs in different ways, and and one of those 56 00:03:03,480 --> 00:03:06,720 Speaker 4: ways is trying to cut costs to you know, to 57 00:03:06,800 --> 00:03:10,200 Speaker 4: defend margins as well as passing some of it along. 58 00:03:10,280 --> 00:03:12,560 Speaker 4: But I think the big surprise for this year is 59 00:03:12,760 --> 00:03:16,160 Speaker 4: the you know, is basically the management of labor costs 60 00:03:16,680 --> 00:03:19,720 Speaker 4: that the companies appear to be doing associated with the tariffs. 61 00:03:19,680 --> 00:03:22,079 Speaker 4: So we have seen the labor market really grind to 62 00:03:22,080 --> 00:03:25,720 Speaker 4: a halt this year. Labor demand and labor supply decelerate, 63 00:03:26,000 --> 00:03:28,720 Speaker 4: and we think that's directly related to companies trying to 64 00:03:28,720 --> 00:03:30,440 Speaker 4: cut costs in the face of tariffs. 65 00:03:30,800 --> 00:03:33,079 Speaker 5: And on the labor front, as you bring up here, 66 00:03:33,160 --> 00:03:36,760 Speaker 5: the closing of the southern border has really been effective here, 67 00:03:36,840 --> 00:03:40,080 Speaker 5: and there's also been some deportation has been reported. How's 68 00:03:40,120 --> 00:03:42,720 Speaker 5: that impacted kind of the labor market here, particularly some 69 00:03:42,760 --> 00:03:44,840 Speaker 5: of the areas that we've you know, we're led to 70 00:03:44,840 --> 00:03:48,920 Speaker 5: believe would be really impacted, like agricultural, housing, construction, things 71 00:03:48,920 --> 00:03:49,240 Speaker 5: like that. 72 00:03:51,280 --> 00:03:53,280 Speaker 4: Yeah, I mean so so so far. I mean, I 73 00:03:53,280 --> 00:03:54,720 Speaker 4: mean the way that we would would kind of think 74 00:03:54,760 --> 00:03:58,119 Speaker 4: about it is is, you know, is supply the decline 75 00:03:58,120 --> 00:04:00,760 Speaker 4: and labor supply is it sort of out stripping the 76 00:04:00,800 --> 00:04:04,000 Speaker 4: decline in labor demand. And one way that we can 77 00:04:04,040 --> 00:04:06,520 Speaker 4: get a sense for that is to look at wages 78 00:04:06,600 --> 00:04:09,680 Speaker 4: and wage inflation. And when we look at wage inflation 79 00:04:10,560 --> 00:04:16,040 Speaker 4: in those particular sectors, we're not really seeing them accelerate 80 00:04:16,160 --> 00:04:19,960 Speaker 4: or reaccelerate, at least not yet. And the latest labor 81 00:04:20,000 --> 00:04:23,560 Speaker 4: market official labor market data that we did get actually 82 00:04:23,600 --> 00:04:28,440 Speaker 4: suggested that construction payrolls were contracting, and that was actually 83 00:04:28,560 --> 00:04:31,760 Speaker 4: very much in line with the fact that structures investment 84 00:04:31,839 --> 00:04:35,640 Speaker 4: in the United States, both residential and non residential structures investment, 85 00:04:36,320 --> 00:04:39,160 Speaker 4: were also contracting. So, of course, on the horizon we 86 00:04:39,279 --> 00:04:42,039 Speaker 4: have this data center build out, but it actually does 87 00:04:42,120 --> 00:04:44,400 Speaker 4: look like the range of data suggests that that even 88 00:04:44,400 --> 00:04:47,960 Speaker 4: in construction in other places like that, you're seeing demand 89 00:04:47,960 --> 00:04:50,000 Speaker 4: that's declining just as much as a supply. 90 00:04:50,160 --> 00:04:50,599 Speaker 3: It's shifting. 91 00:04:50,640 --> 00:04:53,159 Speaker 2: Welding was us with Pimcot. We continue here. We welcome 92 00:04:53,200 --> 00:04:55,919 Speaker 2: all of you across the nation. After the early morning 93 00:04:55,960 --> 00:05:00,400 Speaker 2: of Newport Beach, California. Good morning on YouTube. Subscribe to 94 00:05:00,480 --> 00:05:04,680 Speaker 2: Bloomberg Podcast. It's our new digital expression. As they say, 95 00:05:04,880 --> 00:05:08,000 Speaker 2: Neil data from Renaissance. It features out on LinkedIn a 96 00:05:08,000 --> 00:05:12,080 Speaker 2: Bloomberg News article, Paul the combine out of Detroit, Tiffany, 97 00:05:12,080 --> 00:05:16,520 Speaker 2: I want to fold this in. Bloomberg publishes that distressed 98 00:05:16,839 --> 00:05:21,880 Speaker 2: auto loans are up to a record level. What indications 99 00:05:21,920 --> 00:05:25,279 Speaker 2: do you see of a better part of half of 100 00:05:25,320 --> 00:05:29,640 Speaker 2: the American economy under great stress? As simple as something 101 00:05:29,720 --> 00:05:31,240 Speaker 2: like they can't pay their auto loans. 102 00:05:33,760 --> 00:05:36,520 Speaker 4: Yeah, you know, there's like you know, like you mentioned, 103 00:05:36,560 --> 00:05:40,599 Speaker 4: there is certainly winners and losers in this economy, and 104 00:05:41,120 --> 00:05:43,680 Speaker 4: you know, it seems like the you know, lower income 105 00:05:44,480 --> 00:05:49,880 Speaker 4: folks increasingly are are struggling more here the auto delinquency increase, 106 00:05:50,279 --> 00:05:52,240 Speaker 4: I think as part of that story, there's been data 107 00:05:52,279 --> 00:05:57,680 Speaker 4: on actual repossessions as well, which will increase use car supply, 108 00:05:57,800 --> 00:06:00,479 Speaker 4: so that feeds into you know, some of the distantallyationary 109 00:06:01,360 --> 00:06:05,039 Speaker 4: parts of the economy. So yeah, I mean there is 110 00:06:05,120 --> 00:06:09,000 Speaker 4: certainly an effect here. You know. I think the story 111 00:06:09,040 --> 00:06:12,720 Speaker 4: as well is for smaller and mid sized businesses that 112 00:06:12,839 --> 00:06:16,640 Speaker 4: are more directly impacted by the tariffs. You know, those 113 00:06:16,680 --> 00:06:20,120 Speaker 4: businesses will will struggle here. So there will be parts 114 00:06:20,160 --> 00:06:22,560 Speaker 4: of the economy that, as the economy goes through a 115 00:06:22,600 --> 00:06:26,000 Speaker 4: transition to these new policies and new technology, that will 116 00:06:26,000 --> 00:06:27,920 Speaker 4: struggle to keep up. 117 00:06:28,640 --> 00:06:31,040 Speaker 5: So how do you think this FED is going to 118 00:06:31,160 --> 00:06:35,800 Speaker 5: proceed here with its presumably rate cutting policy here, is 119 00:06:35,800 --> 00:06:39,039 Speaker 5: the cadence going to be kind of you know, steady 120 00:06:39,160 --> 00:06:41,480 Speaker 5: eddy for the next two, three, four meetings or do 121 00:06:41,480 --> 00:06:42,880 Speaker 5: you think they're going to be really stop and take 122 00:06:42,880 --> 00:06:43,600 Speaker 5: a look at the data. 123 00:06:45,600 --> 00:06:49,039 Speaker 4: Yeah, I mean, I ultimately think that they probably will pause. 124 00:06:49,760 --> 00:06:52,360 Speaker 4: And the reason for that is that you are going 125 00:06:52,440 --> 00:06:57,640 Speaker 4: to see additional fiscal related stimulus offsetting some of the 126 00:06:57,680 --> 00:07:04,240 Speaker 4: tariff related drag in the form of household tax credits refunds, 127 00:07:04,560 --> 00:07:08,080 Speaker 4: you know, and lower taxes for corporations as well, and 128 00:07:08,120 --> 00:07:10,600 Speaker 4: that will provide some offsetting support for the tariffs. Now, 129 00:07:10,600 --> 00:07:12,920 Speaker 4: as I mentioned, not everybody will will be able to 130 00:07:12,960 --> 00:07:15,120 Speaker 4: capture all of that. There will be winners and losers. 131 00:07:15,160 --> 00:07:17,920 Speaker 4: But nevertheless, we think in the first you know, first 132 00:07:17,920 --> 00:07:20,360 Speaker 4: half of next year, you will see that hit the 133 00:07:20,400 --> 00:07:22,920 Speaker 4: economy and that will provide some support. I think the 134 00:07:22,960 --> 00:07:26,280 Speaker 4: Federal Reserve is certainly looking to that, and it's probably 135 00:07:26,320 --> 00:07:29,200 Speaker 4: why they are, you know, somewhat more cautious about cutting 136 00:07:29,200 --> 00:07:31,080 Speaker 4: interest rates. You know, we think when we look at 137 00:07:31,120 --> 00:07:34,640 Speaker 4: the labor market, you know, the data does suggest to us, however, 138 00:07:35,040 --> 00:07:38,520 Speaker 4: that there has been you know, some additional deceleration over 139 00:07:38,560 --> 00:07:40,600 Speaker 4: the last couple of months, you know, and I think 140 00:07:40,600 --> 00:07:43,800 Speaker 4: the risks in the labor market do suggest it maybe 141 00:07:43,800 --> 00:07:46,440 Speaker 4: one more cut, either in December or maybe January. But 142 00:07:46,480 --> 00:07:50,280 Speaker 4: then after that you see how the tax stimulus hits 143 00:07:50,280 --> 00:07:52,920 Speaker 4: the economy, and you wait, and there could be more 144 00:07:52,920 --> 00:07:53,440 Speaker 4: of a pause. 145 00:07:53,520 --> 00:07:56,160 Speaker 2: Tiffany, thank you, always, thank you, thank you, thank you. 146 00:07:56,200 --> 00:07:58,320 Speaker 2: Tivity Welding with us, going to go here. 147 00:07:58,240 --> 00:07:59,160 Speaker 3: Stay with us. 148 00:07:59,200 --> 00:08:02,440 Speaker 2: More from Blue Imberg Surveillance coming up after this. 149 00:08:09,680 --> 00:08:13,280 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 150 00:08:13,320 --> 00:08:16,520 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 151 00:08:16,560 --> 00:08:20,240 Speaker 1: Applecarplay and Android Atto with the Bloomberg Business app or 152 00:08:20,400 --> 00:08:21,880 Speaker 1: watch us live on YouTube. 153 00:08:22,240 --> 00:08:25,000 Speaker 3: Joining us now, the new slow is so intense. 154 00:08:25,040 --> 00:08:28,400 Speaker 2: They have one of our experts on American civics, Professor 155 00:08:28,440 --> 00:08:33,200 Speaker 2: Schiller at Brown University, Wendy Schiller, joins us right now. Wendy, 156 00:08:33,240 --> 00:08:36,360 Speaker 2: it's eighty days I think, or even seventy nine days 157 00:08:37,000 --> 00:08:40,040 Speaker 2: to the end of January. I believe all we did 158 00:08:40,160 --> 00:08:43,960 Speaker 2: was kick the can down the road to January thirtieth. 159 00:08:43,960 --> 00:08:44,120 Speaker 3: Am. 160 00:08:44,120 --> 00:08:44,760 Speaker 2: I right on that. 161 00:08:46,400 --> 00:08:48,439 Speaker 6: Well, good morning Tom and Paul. 162 00:08:48,840 --> 00:08:53,480 Speaker 7: We've discussed on this show how the incredible shrinking shutdowns, 163 00:08:53,840 --> 00:08:56,160 Speaker 7: meaning that you know, every time we go through this, 164 00:08:56,520 --> 00:08:59,760 Speaker 7: the Congress carves out more area that's protected from the 165 00:08:59,760 --> 00:09:00,360 Speaker 7: shell down. 166 00:09:00,679 --> 00:09:03,400 Speaker 6: So what's key about this agreement? 167 00:09:03,600 --> 00:09:06,080 Speaker 7: And I think this is really what sold the senators, 168 00:09:06,440 --> 00:09:09,200 Speaker 7: the Democrat senators who decided to vote for it, was 169 00:09:09,240 --> 00:09:13,920 Speaker 7: extending appropriations for a full year for snap for example, 170 00:09:14,000 --> 00:09:18,000 Speaker 7: for legislative appropriations meaning LEDG staffers will get paid, and 171 00:09:18,040 --> 00:09:19,160 Speaker 7: for veterans affairs. 172 00:09:19,559 --> 00:09:21,720 Speaker 6: So they've taken more hot. 173 00:09:21,480 --> 00:09:24,560 Speaker 7: Button really you know what we call valence kinds of 174 00:09:24,720 --> 00:09:28,600 Speaker 7: programs off the table for a shutdown. So next time, 175 00:09:28,679 --> 00:09:31,440 Speaker 7: maybe it'll just be air traffic controllers and that's a 176 00:09:31,520 --> 00:09:34,560 Speaker 7: huge deal, but it's you know, it's less than it 177 00:09:34,600 --> 00:09:36,920 Speaker 7: would be now. So I think that's the that's the 178 00:09:36,920 --> 00:09:39,319 Speaker 7: sort of hidden gem, if you will, in the shutdown deal. 179 00:09:39,520 --> 00:09:43,600 Speaker 2: Speak to our listeners and viewers who say, why did 180 00:09:43,640 --> 00:09:47,839 Speaker 2: we do this? I mean, I mean, I'm baffled by 181 00:09:47,880 --> 00:09:49,640 Speaker 2: the constructive outcome of this. 182 00:09:50,000 --> 00:09:52,319 Speaker 3: What was constructive in this exercise? 183 00:09:53,920 --> 00:09:58,360 Speaker 7: Well, the Democrats gambled that healthcare would be of concern. 184 00:09:58,440 --> 00:10:01,280 Speaker 7: They knew that private insurance market premiums were going to 185 00:10:01,320 --> 00:10:01,679 Speaker 7: go up. 186 00:10:01,720 --> 00:10:04,360 Speaker 6: That you know, the carriers have been very clear about 187 00:10:04,480 --> 00:10:06,439 Speaker 6: the cost of health care and that these premiums were going. 188 00:10:06,400 --> 00:10:06,839 Speaker 1: To go up. 189 00:10:07,160 --> 00:10:11,320 Speaker 7: So they drew attention to extending a subsidy for people 190 00:10:11,360 --> 00:10:14,959 Speaker 7: who buy Obamacare insurance and try to get a tax 191 00:10:15,000 --> 00:10:18,160 Speaker 7: break for the premium or some part of the premium. 192 00:10:18,440 --> 00:10:21,720 Speaker 7: You know, that's a smaller subset than everybody that's on Obamacare, 193 00:10:21,880 --> 00:10:25,240 Speaker 7: and that's kind of a bureaucratic issue. But now everybody 194 00:10:25,280 --> 00:10:28,719 Speaker 7: knows what that issue is, and they are they basically. 195 00:10:28,480 --> 00:10:30,520 Speaker 6: It's a simple fix, let's just extend it. 196 00:10:30,800 --> 00:10:33,560 Speaker 7: And they've put the Republicans in somewhat of a box 197 00:10:34,000 --> 00:10:36,320 Speaker 7: and they are counting on the Republicans to say no 198 00:10:36,840 --> 00:10:39,400 Speaker 7: so that they can run on this issue and run 199 00:10:39,400 --> 00:10:43,800 Speaker 7: on healthcare all in twenty eight twenty twenty six, just 200 00:10:43,840 --> 00:10:46,360 Speaker 7: as they did, excuse me, in twenty eighteen, where they 201 00:10:46,400 --> 00:10:50,000 Speaker 7: were very successful Senator Joe Manson, former Senator Joe Manchino 202 00:10:50,120 --> 00:10:52,040 Speaker 7: was Virginia. So the thing that saved them in his 203 00:10:52,120 --> 00:10:56,160 Speaker 7: reelection campaign at twenty eighteen was in fact healthcare because 204 00:10:56,160 --> 00:10:58,720 Speaker 7: they probably to try to repeal Obamacare. So I think 205 00:10:58,800 --> 00:11:01,200 Speaker 7: this is a setup that the Democrats have tried to 206 00:11:01,200 --> 00:11:02,800 Speaker 7: set up the Republicans on this issue. 207 00:11:02,840 --> 00:11:05,360 Speaker 2: Well, it's like being in a classroom at Brown University. 208 00:11:05,440 --> 00:11:09,120 Speaker 2: The professor's blather on, and I'm looking at ai. The 209 00:11:09,160 --> 00:11:12,800 Speaker 2: biggest number I have is fifteen percent are involved with 210 00:11:12,880 --> 00:11:17,040 Speaker 2: some form of healthcare assistance. I think the math is 211 00:11:17,160 --> 00:11:19,240 Speaker 2: eighty five percent of Americans aren't. 212 00:11:19,520 --> 00:11:21,360 Speaker 3: Yeah, maybe that's the heart of the matter. 213 00:11:21,360 --> 00:11:25,800 Speaker 5: Maybe it is, Wendy, But how does this shutdown affect 214 00:11:25,840 --> 00:11:27,280 Speaker 5: the midterm elections if at all? 215 00:11:27,400 --> 00:11:28,360 Speaker 3: Is this going to be something or not? 216 00:11:28,400 --> 00:11:31,840 Speaker 5: Even can remember in twenty six Well, you. 217 00:11:31,840 --> 00:11:35,200 Speaker 7: Know interesting patterns, right, So twenty thirteen, Ted Cruz led 218 00:11:35,240 --> 00:11:37,480 Speaker 7: the shutdown in the Senate to get the Grand bargain, 219 00:11:37,520 --> 00:11:40,520 Speaker 7: you know, to cut eighty billion from the budget over 220 00:11:40,600 --> 00:11:42,839 Speaker 7: ten years, not that we've been noticing now since the 221 00:11:42,880 --> 00:11:44,199 Speaker 7: budget is bigger than it's ever. 222 00:11:44,040 --> 00:11:46,280 Speaker 6: Been the federal budget. But they won the Senate. 223 00:11:46,320 --> 00:11:48,880 Speaker 7: The Republicans won the Senate in twenty fourteen for lots 224 00:11:48,880 --> 00:11:51,440 Speaker 7: of reasons, but that may have been one of them. 225 00:11:51,559 --> 00:11:55,240 Speaker 7: And then in twenty eighteen, twenty nineteen, the Democrats shut 226 00:11:55,280 --> 00:11:58,720 Speaker 7: the government down, essentially fighting with President Trump. Also that 227 00:11:58,800 --> 00:12:02,800 Speaker 7: shutdown ended after a traffic cancelations were too much to bear. 228 00:12:03,200 --> 00:12:06,360 Speaker 7: And you know, for lots of reasons, Biden won the 229 00:12:06,400 --> 00:12:08,480 Speaker 7: presidency and the Democrats won the Senate. 230 00:12:08,880 --> 00:12:11,439 Speaker 6: So I don't know that they think it's guaranteed, but it's. 231 00:12:11,280 --> 00:12:16,640 Speaker 7: Shown a big strobe light on healthcare and affordability. So 232 00:12:16,840 --> 00:12:19,840 Speaker 7: tom only fifteen percent may be affected, but two things. One, 233 00:12:19,920 --> 00:12:22,240 Speaker 7: they have relatives who are affected. You know, they may 234 00:12:22,280 --> 00:12:24,520 Speaker 7: not be on a bombcare, but they know people and 235 00:12:24,559 --> 00:12:28,080 Speaker 7: their family that are. And second, you know, it's just 236 00:12:28,160 --> 00:12:30,120 Speaker 7: shone a light on the fact that the healthcare system 237 00:12:30,200 --> 00:12:33,440 Speaker 7: is broken, and affordability then becomes the mantra that extends 238 00:12:33,480 --> 00:12:37,240 Speaker 7: to housing, to food, to gasoline, and the pressure on 239 00:12:37,280 --> 00:12:39,720 Speaker 7: the incombent government to address that. We saw that with 240 00:12:39,720 --> 00:12:42,360 Speaker 7: Biden in twenty four That pressure is only going to grow. 241 00:12:43,200 --> 00:12:46,880 Speaker 5: So what is on the to do list for Congress 242 00:12:47,320 --> 00:12:49,200 Speaker 5: now that it's going to be back in session, the 243 00:12:49,200 --> 00:12:51,280 Speaker 5: government's going to be open. What should we be looking 244 00:12:51,280 --> 00:12:51,760 Speaker 5: for here? 245 00:12:52,960 --> 00:12:55,480 Speaker 7: Well, we may have an Epstein vote, a vote in 246 00:12:55,520 --> 00:12:57,480 Speaker 7: the House to release the Epstein files. You have two 247 00:12:57,520 --> 00:13:00,800 Speaker 7: hundred and eighteen signatures on a discharge petition House rules. 248 00:13:00,800 --> 00:13:03,480 Speaker 7: That means it gets to bypass all the barriers and 249 00:13:03,520 --> 00:13:05,920 Speaker 7: come to the floor for a vote. That's a big 250 00:13:06,000 --> 00:13:08,920 Speaker 7: deal for the Republicans in the House. They're gonna have 251 00:13:08,920 --> 00:13:12,280 Speaker 7: to figure out in their own party what that sweet 252 00:13:12,320 --> 00:13:16,000 Speaker 7: spot is in terms of that vote and Obamacare subsidies, 253 00:13:16,040 --> 00:13:20,160 Speaker 7: because this will be the Democratic slogan, and the pressure 254 00:13:20,200 --> 00:13:23,640 Speaker 7: will be do you let these expire by December thirty first, 255 00:13:24,000 --> 00:13:25,160 Speaker 7: or do you reach a deal what you. 256 00:13:25,120 --> 00:13:26,120 Speaker 6: Extend them for a year? 257 00:13:26,480 --> 00:13:29,000 Speaker 7: The Republicans would be wise to extend them for a 258 00:13:29,080 --> 00:13:31,480 Speaker 7: year and then make the argument we control the government 259 00:13:31,480 --> 00:13:32,720 Speaker 7: will come up with a better plan. 260 00:13:33,160 --> 00:13:36,880 Speaker 6: Trump really wants it renamed. He hates that it's called Obamacare. 261 00:13:37,040 --> 00:13:39,080 Speaker 7: I think if you just renamed it and made some 262 00:13:39,120 --> 00:13:41,920 Speaker 7: small changes, he would sign it, and this problem would 263 00:13:41,920 --> 00:13:44,440 Speaker 7: be at least put off for another couple of years. 264 00:13:44,640 --> 00:13:47,520 Speaker 7: But that's where I think the Republicans can buy themselves 265 00:13:47,880 --> 00:13:50,079 Speaker 7: time and get off the hook. I don't know that 266 00:13:50,120 --> 00:13:51,679 Speaker 7: there are the votes in the House to do that. 267 00:13:51,720 --> 00:13:54,400 Speaker 7: Based on the content of the debate yesterday, I'm not 268 00:13:54,400 --> 00:13:54,880 Speaker 7: sure there are the. 269 00:13:54,920 --> 00:13:58,760 Speaker 2: Votes that can you do a Thursday audible Sure, Professor Schiller, well, 270 00:13:58,800 --> 00:14:01,680 Speaker 2: you were talking. You is Google Gemini to try to 271 00:14:01,679 --> 00:14:05,000 Speaker 2: be smarter to keep up with you at Brown University? 272 00:14:05,040 --> 00:14:08,480 Speaker 2: I mean, folks, Wendy's show is definitive in textbooks of 273 00:14:08,600 --> 00:14:14,160 Speaker 2: basic American Civics. Are your undergraduates and graduate students smarter 274 00:14:14,720 --> 00:14:15,640 Speaker 2: because of AI? 275 00:14:19,000 --> 00:14:22,320 Speaker 6: At the moment, I would have to say no. Will 276 00:14:22,360 --> 00:14:25,480 Speaker 6: they learn to be more efficient? Probably? 277 00:14:25,720 --> 00:14:28,880 Speaker 7: But we have software at Brown many universities do that 278 00:14:29,000 --> 00:14:31,520 Speaker 7: not only check for plagiarism, but it also checks for AI. 279 00:14:31,840 --> 00:14:34,640 Speaker 6: And I have a no AI rule on my paper. 280 00:14:34,800 --> 00:14:37,320 Speaker 7: So if you get a score of twenty percent of AI, 281 00:14:37,560 --> 00:14:39,320 Speaker 7: I ask you to rewrite that paper. 282 00:14:39,720 --> 00:14:42,880 Speaker 6: So at the moment, that's my attitude. Will it change 283 00:14:43,040 --> 00:14:43,600 Speaker 6: over the year. 284 00:14:43,680 --> 00:14:46,440 Speaker 7: We'll have to have more in person tests in class 285 00:14:46,520 --> 00:14:47,000 Speaker 7: with pen. 286 00:14:46,920 --> 00:14:48,240 Speaker 6: And paper, Like I already do. 287 00:14:48,840 --> 00:14:50,840 Speaker 7: But a lot of professors are going to that solution 288 00:14:51,600 --> 00:14:52,960 Speaker 7: because we still think we have. 289 00:14:52,920 --> 00:14:54,640 Speaker 6: Something to teach and they have something to learn. 290 00:14:55,400 --> 00:14:58,760 Speaker 7: But I imagine AI will be used as a tool 291 00:14:58,800 --> 00:15:01,800 Speaker 7: for efficiency. I'm not sure that's going to expand their brains. 292 00:15:01,800 --> 00:15:04,200 Speaker 2: So people on my bias here, Professor Shower, come on, 293 00:15:04,560 --> 00:15:08,240 Speaker 2: you can do perplexity and type in Andrew Jackson, or 294 00:15:08,240 --> 00:15:11,400 Speaker 2: you can go read three volumes of the giant Roger Remedy, 295 00:15:11,480 --> 00:15:14,240 Speaker 2: who was very very kind to me. Are you telling 296 00:15:14,280 --> 00:15:16,880 Speaker 2: me AI someday is going to be a substitute for 297 00:15:17,000 --> 00:15:20,320 Speaker 2: James McGregor Burns or Roger Remedy. 298 00:15:21,200 --> 00:15:24,480 Speaker 7: You know, I think intellectually curious students want to learn, 299 00:15:24,880 --> 00:15:27,120 Speaker 7: you know, And if AI has a limit, which I 300 00:15:27,120 --> 00:15:29,600 Speaker 7: think at the moment it does, then I think they're 301 00:15:29,640 --> 00:15:32,120 Speaker 7: going to Actually, they don't read full books anymore. 302 00:15:32,160 --> 00:15:33,520 Speaker 6: Tom, I can tell you us. 303 00:15:33,840 --> 00:15:36,720 Speaker 7: I assign pieces of books, or chapters of books, or 304 00:15:36,760 --> 00:15:38,960 Speaker 7: sets of pages from books, but they don't read whole 305 00:15:38,960 --> 00:15:39,640 Speaker 7: books anymore. 306 00:15:39,800 --> 00:15:42,560 Speaker 6: That's life. You have to just sorverjust if you're a professor. 307 00:15:42,920 --> 00:15:45,520 Speaker 7: But I think AI, in terms of these kids are 308 00:15:45,520 --> 00:15:48,360 Speaker 7: worried about how they present the outside world job market 309 00:15:48,400 --> 00:15:51,160 Speaker 7: got tighter. They're worried abou getting a job. They want 310 00:15:51,160 --> 00:15:54,080 Speaker 7: to look better and present better. They're using it for 311 00:15:54,280 --> 00:15:57,960 Speaker 7: that right now, not necessarily for entire intellectual content. 312 00:15:58,040 --> 00:15:59,920 Speaker 3: Professor Sweety would like to wait in here. 313 00:16:00,080 --> 00:16:02,960 Speaker 5: I'm glad I'm not in the educational process anymore. 314 00:16:03,400 --> 00:16:05,520 Speaker 3: I agree strongly. Yeah, I agree. 315 00:16:05,600 --> 00:16:07,520 Speaker 2: You and I were just like shaking our heads, and 316 00:16:07,600 --> 00:16:11,560 Speaker 2: Tucker over there's fulminating, Professor Schiller. They got to read books. 317 00:16:11,720 --> 00:16:15,240 Speaker 2: I mean, we're going to be different if we're not 318 00:16:15,400 --> 00:16:16,120 Speaker 2: reading books. 319 00:16:17,160 --> 00:16:20,400 Speaker 7: But social media has just completely decimated our attention span. 320 00:16:20,480 --> 00:16:23,000 Speaker 6: That's true of adults as well as you know. And 321 00:16:23,040 --> 00:16:25,360 Speaker 6: even audiobooks. I believe in audiobooks. 322 00:16:25,400 --> 00:16:26,960 Speaker 7: I think they're a really important tool for a lot 323 00:16:26,960 --> 00:16:29,200 Speaker 7: of people who really but you know, it's a different 324 00:16:29,200 --> 00:16:31,520 Speaker 7: cognitive process to listen than it is to read. 325 00:16:32,200 --> 00:16:34,240 Speaker 6: But you know, I have to go where they are 326 00:16:34,560 --> 00:16:36,840 Speaker 6: or I'm out of the chop. So in that sense, 327 00:16:37,520 --> 00:16:38,920 Speaker 6: you know, we have to not be obsolete. 328 00:16:39,000 --> 00:16:41,520 Speaker 7: We don't want to be turned into obsolete figures of professor, 329 00:16:41,600 --> 00:16:43,040 Speaker 7: So you have to go where they are. 330 00:16:43,360 --> 00:16:45,040 Speaker 6: So now I just shortened. 331 00:16:44,600 --> 00:16:48,480 Speaker 7: The readings, but I am asking them to take exams 332 00:16:48,520 --> 00:16:49,160 Speaker 7: in class. 333 00:16:49,320 --> 00:16:50,600 Speaker 6: So we'll see how that comes there. 334 00:16:50,680 --> 00:16:52,240 Speaker 3: You go, are you giving? 335 00:16:52,360 --> 00:16:55,280 Speaker 2: I got twenty seconds, so you're given out qualities sees here. 336 00:16:55,320 --> 00:16:56,640 Speaker 3: I don't see great inflation. 337 00:16:56,800 --> 00:17:01,400 Speaker 6: And for tre Schiller, reading is private. I don't talk 338 00:17:01,400 --> 00:17:03,400 Speaker 6: about unknown to me. 339 00:17:03,560 --> 00:17:05,800 Speaker 7: If you google me, if you're a listener's google me, 340 00:17:06,200 --> 00:17:08,560 Speaker 7: you'll see that I rate my professor. I don't always 341 00:17:08,560 --> 00:17:12,160 Speaker 7: get all the stars. 342 00:17:11,160 --> 00:17:11,920 Speaker 3: A star list. 343 00:17:12,000 --> 00:17:15,879 Speaker 2: Wendy Schiller think absolutely brilliant, folks, A window there in 344 00:17:15,960 --> 00:17:19,640 Speaker 2: the Brown University, the excellence at Wendy Schiller. 345 00:17:20,040 --> 00:17:20,760 Speaker 3: Stay with us. 346 00:17:21,000 --> 00:17:31,320 Speaker 2: More from Bloomberg Surveillance coming up after this. 347 00:17:31,320 --> 00:17:35,240 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 348 00:17:35,240 --> 00:17:38,240 Speaker 1: starting at seven am Eastern on Apple Corplay and Android 349 00:17:38,280 --> 00:17:41,320 Speaker 1: Auto with the Bloomberg Business App. You can also listen 350 00:17:41,400 --> 00:17:44,680 Speaker 1: live on Amazon Alexa from our flagship New York station. 351 00:17:45,200 --> 00:17:48,880 Speaker 1: Just say Alexa Play Bloomberg eleven thirty Joining us right now. 352 00:17:48,920 --> 00:17:53,520 Speaker 2: Kimberly LaPoint out of Wealth from Acquire Asset Management. Here 353 00:17:53,560 --> 00:17:57,439 Speaker 2: on other things to do besides buy Nvidia. How do 354 00:17:57,520 --> 00:18:02,919 Speaker 2: you buy infrastructure? Is there like stocks you buy or 355 00:18:02,960 --> 00:18:04,320 Speaker 2: do you buy alternative? 356 00:18:04,520 --> 00:18:07,400 Speaker 3: Yeah? I'm seeing people talk a lot about infrastructure. 357 00:18:07,840 --> 00:18:10,600 Speaker 2: But an acquarie on a global basis, how do you 358 00:18:10,720 --> 00:18:14,040 Speaker 2: actually affect an infrastructure purchase? 359 00:18:14,720 --> 00:18:17,159 Speaker 8: Well, first, great to be here, thanks for having me. 360 00:18:17,520 --> 00:18:21,600 Speaker 8: When we think about infrastructure at mcquari, we're primarily talking 361 00:18:21,640 --> 00:18:26,360 Speaker 8: about private infrastructure, so things like privatizing airports, toll roads, 362 00:18:26,600 --> 00:18:29,800 Speaker 8: the data centers, and the way you buy those investments 363 00:18:29,840 --> 00:18:32,480 Speaker 8: at firm. At a firm like Mcquarie, we have deep 364 00:18:32,520 --> 00:18:35,719 Speaker 8: teams of on the ground asset specialists that work closely 365 00:18:35,760 --> 00:18:40,040 Speaker 8: with local government, with local governments, with local operating partners. 366 00:18:40,720 --> 00:18:43,680 Speaker 3: Well, I just how do I buy a piece of LaGuardia. 367 00:18:44,480 --> 00:18:45,920 Speaker 6: So there's a number of ways that you could buy 368 00:18:45,920 --> 00:18:46,920 Speaker 6: a piece of LaGuardia. 369 00:18:47,160 --> 00:18:51,280 Speaker 8: One is through working with firms like mcquarie and some 370 00:18:51,920 --> 00:18:55,240 Speaker 8: of our peers that offer access to more and more 371 00:18:55,400 --> 00:18:58,720 Speaker 8: high net worth individuals as well as wealth investors around 372 00:18:58,720 --> 00:19:02,640 Speaker 8: the globe through the sties that they're bringing to market. So, 373 00:19:02,680 --> 00:19:07,200 Speaker 8: for example, at Macquarie, we have been working to bring 374 00:19:07,280 --> 00:19:11,120 Speaker 8: to wealth investors the same quality of investments, working and 375 00:19:11,320 --> 00:19:16,840 Speaker 8: investing alongside our institutional portfolios that invest in things like airports, 376 00:19:16,880 --> 00:19:19,960 Speaker 8: where we just took an additional stake in investing in 377 00:19:20,160 --> 00:19:24,840 Speaker 8: two airports in the UK Bristol and Birmingham. 378 00:19:24,960 --> 00:19:30,520 Speaker 5: Interesting, So just broadly define alternatives, how did they fit 379 00:19:30,560 --> 00:19:33,359 Speaker 5: into what was the traditional sixty forty portfolio? What do 380 00:19:33,440 --> 00:19:36,399 Speaker 5: you think the allocation to alternatives can be should be? 381 00:19:36,560 --> 00:19:36,960 Speaker 4: Maybe? 382 00:19:37,440 --> 00:19:39,600 Speaker 8: Yeah, I think that is a question, particularly when you 383 00:19:39,640 --> 00:19:42,520 Speaker 8: think about wealth investors that everyone is asking you think 384 00:19:42,520 --> 00:19:46,440 Speaker 8: about the traditional sixty forty portfolio. Particularly in today's environment, 385 00:19:46,520 --> 00:19:48,760 Speaker 8: you're not gaining the benefits of a lot of diversification, 386 00:19:49,000 --> 00:19:50,080 Speaker 8: particularly when you look at the. 387 00:19:50,000 --> 00:19:52,399 Speaker 6: Correlation of the largest drivers of the S and P. 388 00:19:53,400 --> 00:19:56,280 Speaker 8: One of the benefits of alternatives and infrastructure, and particularly 389 00:19:56,320 --> 00:20:00,879 Speaker 8: infrastructure is the low correlation to public equity. It's about 390 00:20:01,240 --> 00:20:05,960 Speaker 8: one point five correlations, so you naturally get the diversification benefits. 391 00:20:06,240 --> 00:20:10,520 Speaker 8: Will you currently see around ten percent of wealth client 392 00:20:10,600 --> 00:20:15,280 Speaker 8: portfolios in alternatives? Many are calling that number to reach 393 00:20:15,359 --> 00:20:16,800 Speaker 8: up to twenty or twenty five percent. 394 00:20:16,840 --> 00:20:20,040 Speaker 2: Okay, I get it. But like you mentioned, what was 395 00:20:20,080 --> 00:20:22,760 Speaker 2: the airport in England? You have two airports in England. 396 00:20:22,560 --> 00:20:23,760 Speaker 8: The Birmingham and Bristol. 397 00:20:23,840 --> 00:20:26,560 Speaker 3: Okay, so I want to go long Birmingham aviation. 398 00:20:27,119 --> 00:20:29,639 Speaker 2: Am I buying a piece of the airport with a 399 00:20:29,680 --> 00:20:32,600 Speaker 2: predictable cash flow or is it just buying the debt 400 00:20:33,280 --> 00:20:34,280 Speaker 2: that built the airport. 401 00:20:34,560 --> 00:20:37,159 Speaker 8: That is a great question and the answers you can 402 00:20:37,240 --> 00:20:40,200 Speaker 8: do that both ways. And so at Macquarie we offer 403 00:20:40,280 --> 00:20:44,920 Speaker 8: both infrastructure equity portfolios as well as infrastructure debt portfolios. 404 00:20:44,960 --> 00:20:48,080 Speaker 8: And that's a decision that you would make based on 405 00:20:48,640 --> 00:20:51,160 Speaker 8: the funds that you ultimately choose to invest in. 406 00:20:51,200 --> 00:20:55,000 Speaker 2: Return to surveillance aviation correspondent Paul Sweening, would you go 407 00:20:55,119 --> 00:20:55,840 Speaker 2: long Newark? 408 00:20:56,560 --> 00:20:59,000 Speaker 3: Do you do a piece of terminal at. 409 00:21:00,119 --> 00:21:03,320 Speaker 5: Wonders with terminal A making the uber experience infinitely better 410 00:21:03,320 --> 00:21:07,240 Speaker 5: than was a terminal C. So Kimberly, where is we've 411 00:21:07,280 --> 00:21:10,040 Speaker 5: got a lower interest rate environment presumably coming into us. 412 00:21:10,080 --> 00:21:13,240 Speaker 5: What does that mean for your side of the business. 413 00:21:13,840 --> 00:21:15,919 Speaker 8: Yeah, so when you think about infrastructure and where it 414 00:21:15,920 --> 00:21:18,960 Speaker 8: fits in a portfolio. But I think that's interesting about 415 00:21:18,960 --> 00:21:22,080 Speaker 8: the asset class is it has many of these. It 416 00:21:22,119 --> 00:21:23,600 Speaker 8: has what I would like to consider sort of the 417 00:21:23,680 --> 00:21:26,800 Speaker 8: characteristics of both an income and growth sort of stock 418 00:21:26,920 --> 00:21:30,080 Speaker 8: on the public market side. And so in theory, what's 419 00:21:30,080 --> 00:21:33,119 Speaker 8: great about the asset class is it provides ballast in 420 00:21:33,160 --> 00:21:37,040 Speaker 8: a portfolio through all market cycles, periods of higher interest 421 00:21:37,080 --> 00:21:41,840 Speaker 8: rates or lower lower interest rates because of the resiliency 422 00:21:42,080 --> 00:21:46,280 Speaker 8: that is built into infrastructure essential assets. Thinking about your airport, 423 00:21:46,320 --> 00:21:49,959 Speaker 8: regardless of the market environment, people are traveling, airports are 424 00:21:50,040 --> 00:21:53,920 Speaker 8: essential and so you're getting that downside protection through full 425 00:21:53,920 --> 00:21:54,640 Speaker 8: market cycles. 426 00:21:54,880 --> 00:21:57,600 Speaker 2: So the build out a Heathrow just as one example 427 00:21:57,600 --> 00:22:00,680 Speaker 2: where there's a Paul total cow out the fourth or 428 00:22:00,680 --> 00:22:03,800 Speaker 2: fifth or sixth runway I can't remember right now. Are 429 00:22:03,840 --> 00:22:07,919 Speaker 2: people like mcquarios are like a bidding war to finance 430 00:22:08,040 --> 00:22:08,960 Speaker 2: the future. 431 00:22:08,600 --> 00:22:11,320 Speaker 3: Of Heathrow or JFK or LAX? 432 00:22:11,680 --> 00:22:14,360 Speaker 2: I mean, is it like a fever pitch to do 433 00:22:14,480 --> 00:22:15,879 Speaker 2: financing of runways? 434 00:22:16,520 --> 00:22:17,560 Speaker 6: So I think a couple of things. 435 00:22:17,600 --> 00:22:21,160 Speaker 8: It is a very specialized skill set and there are 436 00:22:21,200 --> 00:22:24,880 Speaker 8: only a few managers and firms out there that have 437 00:22:24,960 --> 00:22:27,679 Speaker 8: that skill set. And that goes back to having local 438 00:22:27,720 --> 00:22:31,760 Speaker 8: teams in these markets that partner with municipalities with governments 439 00:22:32,000 --> 00:22:34,760 Speaker 8: to help them with their needs. As a firm like Macquarie, 440 00:22:34,760 --> 00:22:37,360 Speaker 8: we get the benefit of having those local relationships. We're 441 00:22:37,400 --> 00:22:40,639 Speaker 8: often a first call provider in guidance on how to 442 00:22:40,680 --> 00:22:45,600 Speaker 8: think about those really important infrastructure projects to the future 443 00:22:45,680 --> 00:22:47,280 Speaker 8: of you know, the economies that they're serving. 444 00:22:47,960 --> 00:22:50,639 Speaker 5: How are we going to fund all these data centers 445 00:22:50,680 --> 00:22:52,600 Speaker 5: that we keep hearing all these companies in their earnings 446 00:22:52,640 --> 00:22:56,000 Speaker 5: conference calls and I'm spending billions here, I'm spending billions there. 447 00:22:56,640 --> 00:22:58,080 Speaker 5: How do you think this is going to be finance 448 00:22:58,160 --> 00:23:00,840 Speaker 5: public private? How's it going to be done? 449 00:23:01,280 --> 00:23:03,360 Speaker 8: I think you're seeing it happening both ways. I think 450 00:23:03,359 --> 00:23:06,520 Speaker 8: you're seeing the private markets have been incredibly important to 451 00:23:06,560 --> 00:23:08,879 Speaker 8: the funding and building of data centers. You might have 452 00:23:08,960 --> 00:23:12,520 Speaker 8: recently seen the sale of Aligned Data Centers, for which 453 00:23:12,560 --> 00:23:16,520 Speaker 8: Macquarie led that sale, realizing a forty billion dollar enterprise 454 00:23:16,640 --> 00:23:19,280 Speaker 8: value on behalf of our LPs. And the reality is 455 00:23:19,320 --> 00:23:21,119 Speaker 8: you're going to see more and more of these types 456 00:23:21,160 --> 00:23:24,800 Speaker 8: of deals where firms are coming in, buying them, developing them, 457 00:23:24,840 --> 00:23:26,639 Speaker 8: and then looking to sell them, both on the public 458 00:23:26,680 --> 00:23:28,080 Speaker 8: side as well as on the private side. 459 00:23:28,119 --> 00:23:30,680 Speaker 2: So who are your clients then, is it high net 460 00:23:30,680 --> 00:23:33,800 Speaker 2: worth or is it institutions where they say we want 461 00:23:33,800 --> 00:23:36,600 Speaker 2: a piece of the burming. 462 00:23:36,320 --> 00:23:37,000 Speaker 3: A of airport. 463 00:23:37,320 --> 00:23:37,800 Speaker 6: It's both. 464 00:23:38,280 --> 00:23:41,440 Speaker 8: So historically our clients were institutional and that was really 465 00:23:41,480 --> 00:23:44,640 Speaker 8: the case for infrastructure in general. In recent years, due 466 00:23:44,640 --> 00:23:48,760 Speaker 8: to a number of trends, more and more wealth investors 467 00:23:48,800 --> 00:23:52,600 Speaker 8: want access to the same portfolio benefits that infrastructure brings 468 00:23:52,640 --> 00:23:55,439 Speaker 8: as our institutional clients. So the answer today is both, 469 00:23:55,720 --> 00:23:59,520 Speaker 8: and we are committed to continuing to create opportunities for 470 00:23:59,560 --> 00:24:02,359 Speaker 8: the wealth's to access those same high quality portfolios. 471 00:24:02,480 --> 00:24:05,439 Speaker 2: You have a modeled yield, I mean, is there like 472 00:24:05,760 --> 00:24:09,040 Speaker 2: can you say infrastructure picks up two percentage points two 473 00:24:09,119 --> 00:24:10,480 Speaker 2: hundred beeps over whatever? 474 00:24:10,640 --> 00:24:12,960 Speaker 3: I mean, is there a structure to it? Is there 475 00:24:13,040 --> 00:24:14,720 Speaker 3: every deal like custom made? 476 00:24:15,359 --> 00:24:19,359 Speaker 8: So in our mind, every deal has each deal is 477 00:24:19,359 --> 00:24:21,800 Speaker 8: structured on a deal by deal basis, and so in 478 00:24:21,840 --> 00:24:24,240 Speaker 8: some of our more diversified portfolios, you're looking at a 479 00:24:24,280 --> 00:24:26,959 Speaker 8: three to five percent yield, But it really depends on 480 00:24:27,080 --> 00:24:30,280 Speaker 8: the objective of the portfolio and how yield plays into 481 00:24:31,119 --> 00:24:33,920 Speaker 8: into how we structure the assets. But I would say 482 00:24:33,920 --> 00:24:35,760 Speaker 8: that is more of a deal by deal question. 483 00:24:36,280 --> 00:24:37,639 Speaker 3: Can you fix Uber. 484 00:24:37,400 --> 00:24:41,240 Speaker 2: At JFKI or fix that? 485 00:24:42,160 --> 00:24:43,000 Speaker 3: Just speaking for a. 486 00:24:43,000 --> 00:24:46,080 Speaker 8: Friend, if we could, I would speaking for a friend 487 00:24:46,080 --> 00:24:46,520 Speaker 8: as well. 488 00:24:47,800 --> 00:24:50,119 Speaker 2: Though there was almost a fistfight on a bus at 489 00:24:50,200 --> 00:24:52,280 Speaker 2: JFK like four or five months ago. 490 00:24:52,400 --> 00:24:54,600 Speaker 3: Yeah, somebody was so many airports get it. 491 00:24:54,640 --> 00:24:56,480 Speaker 5: Though they get it, it's so much better. 492 00:24:56,880 --> 00:24:59,879 Speaker 2: And I think that no, no, if they forced me 493 00:24:59,920 --> 00:25:02,439 Speaker 2: to go on a bus to get to Uber, because 494 00:25:02,480 --> 00:25:04,240 Speaker 2: the Bellley was down, so I had to take. 495 00:25:04,119 --> 00:25:07,359 Speaker 5: Uber and you know there there Francine had the Gulf Stream, 496 00:25:07,480 --> 00:25:08,760 Speaker 5: so he had to fly commercial. 497 00:25:11,080 --> 00:25:13,320 Speaker 8: I think you're hitting on one of the key themes right, 498 00:25:13,400 --> 00:25:16,879 Speaker 8: there's there's an incessant need to improve our infrastructure in 499 00:25:16,920 --> 00:25:19,240 Speaker 8: all areas, whether it is airports, whether it is to 500 00:25:19,520 --> 00:25:20,880 Speaker 8: power on the data center side. 501 00:25:21,080 --> 00:25:23,720 Speaker 2: I don't mean to be stay partway, but did Macquarie 502 00:25:23,840 --> 00:25:28,600 Speaker 2: Infrastructure pave fifty ninth Street in Manhattan here in the 503 00:25:28,640 --> 00:25:32,080 Speaker 2: last thirty days? Were you involved in that transaction? Is 504 00:25:32,119 --> 00:25:33,960 Speaker 2: an alternative. 505 00:25:33,200 --> 00:25:35,480 Speaker 6: Advestments not that I'm aware of. 506 00:25:36,560 --> 00:25:41,680 Speaker 3: I never thought fifty ninth Street would be repaved. No ever. Kimberly, 507 00:25:41,720 --> 00:25:42,880 Speaker 3: this is Kimberly LaPoint. 508 00:25:42,920 --> 00:25:45,560 Speaker 2: Thank you so much at it Wealth and Potholes and 509 00:25:45,640 --> 00:25:47,439 Speaker 2: mccays that management, Thank. 510 00:25:47,320 --> 00:25:48,680 Speaker 3: You so much. Stay with us. 511 00:25:48,920 --> 00:25:59,240 Speaker 2: More from Bloomberg Surveillance coming up after this. 512 00:25:59,240 --> 00:26:02,720 Speaker 1: This is the Blue Bomberg Surveillance Podcast. Listen live each 513 00:26:02,760 --> 00:26:05,800 Speaker 1: weekday starting at seven am Eastern on Apple Coarplay and 514 00:26:05,800 --> 00:26:08,800 Speaker 1: Android Auto with the Bloomberg Business app. You can also 515 00:26:08,920 --> 00:26:12,600 Speaker 1: listen live on Amazon Alexa from our flagship New York station, 516 00:26:13,119 --> 00:26:16,240 Speaker 1: Just say Alexa Play Bloomberg eleven thirty joining. 517 00:26:16,080 --> 00:26:18,719 Speaker 2: Us right now, so I have joins a senior vice president, 518 00:26:18,760 --> 00:26:23,639 Speaker 2: chief econdomist caitality with a shutdown ending like do you 519 00:26:23,680 --> 00:26:26,960 Speaker 2: rechange the Excel spreadsheet in twenty four hours or how 520 00:26:27,000 --> 00:26:27,800 Speaker 2: long out. 521 00:26:27,640 --> 00:26:29,720 Speaker 3: Do you have to wait to get a cautality view. 522 00:26:30,640 --> 00:26:33,720 Speaker 9: Well, I mean we have pretty much data daily, so 523 00:26:33,720 --> 00:26:39,080 Speaker 9: we track mostly property property market and so we track 524 00:26:39,800 --> 00:26:43,919 Speaker 9: home transaction data. So we've been having a finger on 525 00:26:43,960 --> 00:26:47,360 Speaker 9: a pole. So we did see some slow down, particularly 526 00:26:47,400 --> 00:26:53,119 Speaker 9: in areas of where you needed a government approval, you know, 527 00:26:53,480 --> 00:26:58,199 Speaker 9: think about flood insurance and things like that. So you know, 528 00:26:58,280 --> 00:27:00,199 Speaker 9: so we do have a finger on a pole in 529 00:27:00,240 --> 00:27:00,760 Speaker 9: that sense. 530 00:27:01,240 --> 00:27:04,159 Speaker 5: All right, I've got the Mortgage Bankers Association thirty year 531 00:27:04,240 --> 00:27:07,720 Speaker 5: fixed mortgage six point three four percent higher than it's 532 00:27:07,720 --> 00:27:09,240 Speaker 5: been over the last fifteen years, but it's. 533 00:27:09,240 --> 00:27:11,000 Speaker 3: Much lower than it was earlier this year. 534 00:27:11,680 --> 00:27:15,480 Speaker 5: What's the rate that would get John Tucker out of 535 00:27:15,520 --> 00:27:17,040 Speaker 5: his house and say I'm going to sell my house 536 00:27:17,080 --> 00:27:19,480 Speaker 5: and move to Floridaca is now the mortgage it's not 537 00:27:19,600 --> 00:27:20,040 Speaker 5: so bad? 538 00:27:20,400 --> 00:27:22,800 Speaker 9: Yeah, I mean that's been the magical question, the million 539 00:27:22,840 --> 00:27:25,119 Speaker 9: dollar question. And I don't know that we have a 540 00:27:25,160 --> 00:27:28,159 Speaker 9: true answer to that simply because you know, it's very 541 00:27:28,240 --> 00:27:31,639 Speaker 9: unrealistic to expect something in low fives, you know, and 542 00:27:31,680 --> 00:27:34,240 Speaker 9: I think that's what does change the market. But what 543 00:27:34,280 --> 00:27:37,520 Speaker 9: we have seen over the course of last year, especially 544 00:27:37,600 --> 00:27:40,720 Speaker 9: with this volatility in mortgage es, is that people react 545 00:27:40,840 --> 00:27:43,280 Speaker 9: as soon as mortgage ms come down. So you had 546 00:27:43,280 --> 00:27:46,520 Speaker 9: a couple periods in September or October when mortgage it's 547 00:27:46,560 --> 00:27:49,320 Speaker 9: were down to six point one, and you definitely saw 548 00:27:49,800 --> 00:27:54,240 Speaker 9: both in refy space and purchase space buyers coming off 549 00:27:54,280 --> 00:27:55,160 Speaker 9: of the sidelines. 550 00:27:55,280 --> 00:27:58,600 Speaker 2: I have a memory of Peter Lynch years ago going ballistic, 551 00:27:58,640 --> 00:28:00,480 Speaker 2: and I'm sure it was this team that doing the 552 00:28:00,520 --> 00:28:04,600 Speaker 2: math over the perceived return on real estate of eight 553 00:28:04,760 --> 00:28:07,840 Speaker 2: nine percent per year, and the study I believe it 554 00:28:07,880 --> 00:28:09,679 Speaker 2: was a fidelity at the time is no, it's. 555 00:28:09,600 --> 00:28:12,600 Speaker 3: Low single digit. Are we reverting to that? 556 00:28:12,800 --> 00:28:16,040 Speaker 2: Are we going from I'm going to make a fortune 557 00:28:16,040 --> 00:28:20,159 Speaker 2: in Coral Gables, Florida to the reality of a slow crawl? 558 00:28:20,520 --> 00:28:21,160 Speaker 3: Absolutely? 559 00:28:21,200 --> 00:28:23,960 Speaker 9: I mean really, historically it's been four to five percent 560 00:28:24,560 --> 00:28:27,800 Speaker 9: average return, And it really depends when you buy. You know, 561 00:28:27,920 --> 00:28:30,399 Speaker 9: are you buying in two thousand and four, are you 562 00:28:30,440 --> 00:28:33,080 Speaker 9: buying in twenty twenty three? It depends when you buy, 563 00:28:33,200 --> 00:28:36,719 Speaker 9: and so your return obviously is going to really depend 564 00:28:36,720 --> 00:28:37,000 Speaker 9: on that. 565 00:28:37,400 --> 00:28:41,040 Speaker 3: Joining us now, Paul Sweeney, were the one percent mortgage exactly? 566 00:28:41,400 --> 00:28:43,720 Speaker 5: Or if you sell all your real estate during a pandemic, 567 00:28:43,840 --> 00:28:45,160 Speaker 5: that's also a good time to sell. 568 00:28:45,800 --> 00:28:47,320 Speaker 3: Talk to us about new home buyers. 569 00:28:47,320 --> 00:28:51,400 Speaker 5: It seems like home affordability is just it's just brutal 570 00:28:51,440 --> 00:28:53,520 Speaker 5: for the young folks. I mean that cost of housing 571 00:28:53,800 --> 00:28:56,240 Speaker 5: is up fifty percent or since the beginning of the 572 00:28:56,400 --> 00:28:57,520 Speaker 5: since before the pandemic. 573 00:28:58,080 --> 00:28:59,080 Speaker 3: Mortgage rates are higher. 574 00:28:59,200 --> 00:29:01,960 Speaker 5: It seems like affordability is just out of reach for 575 00:29:02,000 --> 00:29:02,840 Speaker 5: a lot of folks. 576 00:29:03,160 --> 00:29:06,480 Speaker 3: Does that change over time? Is that just the new normal? 577 00:29:06,920 --> 00:29:09,200 Speaker 9: I think it does change, but it's a very slow 578 00:29:09,200 --> 00:29:13,760 Speaker 9: moving process. It's been painfully slow. We have seen some improvements. 579 00:29:13,840 --> 00:29:16,440 Speaker 9: You talked about mortgage it's being slightly lower, you know. 580 00:29:16,480 --> 00:29:19,240 Speaker 9: We see a slower rate of home press appreciation. Home 581 00:29:19,240 --> 00:29:22,680 Speaker 9: press isn't only up about one percent over the course 582 00:29:22,680 --> 00:29:25,480 Speaker 9: of last year, and when you adjust for inflation, they've 583 00:29:25,520 --> 00:29:30,280 Speaker 9: actually declined, right, and wages are up at a higher pace. 584 00:29:30,440 --> 00:29:34,640 Speaker 9: So you are slowly, painfully gaining some of that affordability 585 00:29:34,680 --> 00:29:35,120 Speaker 9: over time. 586 00:29:35,240 --> 00:29:38,800 Speaker 2: Okay, Can I editorialize here. Paul, sure, I think that 587 00:29:39,360 --> 00:29:42,840 Speaker 2: I talked to my kids about this. We went into homes. 588 00:29:43,040 --> 00:29:45,720 Speaker 2: Can I remember my grandmother's home and had water in 589 00:29:45,760 --> 00:29:49,720 Speaker 2: the kitchen, But we had homes that were relatively simple. 590 00:29:50,240 --> 00:29:53,160 Speaker 2: The kids now when they're out looking for homes, you know, 591 00:29:53,240 --> 00:29:56,400 Speaker 2: forget about granite countertops. They're looking for they want to 592 00:29:56,600 --> 00:29:58,760 Speaker 2: they want a kitchen like John Tucker exactly. 593 00:29:59,200 --> 00:30:02,040 Speaker 3: I mean, the the home. 594 00:30:01,800 --> 00:30:05,160 Speaker 2: That we desire now is not the same as the 595 00:30:05,240 --> 00:30:09,080 Speaker 2: home that we desired in nineteen seventy five or nineteen 596 00:30:09,240 --> 00:30:10,040 Speaker 2: ninety five. 597 00:30:10,400 --> 00:30:13,760 Speaker 9: Right, absolutely, And construction costs has gone up a lot, 598 00:30:14,080 --> 00:30:17,160 Speaker 9: you know, because of that similar situation. When you think 599 00:30:17,200 --> 00:30:20,040 Speaker 9: about it, what's happening in auto market? Why are autos 600 00:30:20,080 --> 00:30:23,480 Speaker 9: so much more expensive now? Because everything is digitized? You know, 601 00:30:23,480 --> 00:30:26,360 Speaker 9: you have a little computer you're writing, and people want 602 00:30:26,400 --> 00:30:29,640 Speaker 9: to walk into a computer home, computerized home where everything 603 00:30:29,760 --> 00:30:30,720 Speaker 9: is taken care of. 604 00:30:30,960 --> 00:30:33,920 Speaker 2: I have the Nash Rambler out and Paul, they laugh 605 00:30:34,000 --> 00:30:35,480 Speaker 2: at me, Yeah, because it's. 606 00:30:35,320 --> 00:30:37,920 Speaker 3: Completely non digital, which you know, so they laugh at 607 00:30:37,920 --> 00:30:39,520 Speaker 3: you for a number of reasons. 608 00:30:39,280 --> 00:30:42,480 Speaker 5: Talk to us about just kind of are the markets 609 00:30:42,840 --> 00:30:46,400 Speaker 5: in this country where it's actually a decline, because it 610 00:30:46,480 --> 00:30:48,880 Speaker 5: just seems like when we the pandemic, everybody kind of 611 00:30:48,960 --> 00:30:51,160 Speaker 5: left some of the urban areas and we're going to 612 00:30:51,240 --> 00:30:54,040 Speaker 5: Florida and Texas and some of these Tennessee and some 613 00:30:54,080 --> 00:30:57,280 Speaker 5: of these lower cost states, maybe more Land More. Is 614 00:30:57,280 --> 00:31:00,960 Speaker 5: that still a story or is that those markets turned around? 615 00:31:01,280 --> 00:31:02,000 Speaker 6: Yeah, it is. 616 00:31:02,120 --> 00:31:05,360 Speaker 9: I mean it's a story of k shipped economy basically, 617 00:31:05,400 --> 00:31:07,000 Speaker 9: you know. I mean we see that in the housing 618 00:31:07,040 --> 00:31:09,120 Speaker 9: market as well. When you look at the map of 619 00:31:09,160 --> 00:31:12,480 Speaker 9: the US markets that are going up, or markets in Northeast, 620 00:31:12,560 --> 00:31:15,120 Speaker 9: markets that are going down, or markets in southeast and 621 00:31:15,160 --> 00:31:16,920 Speaker 9: then you have a mixed picture sort of on the 622 00:31:16,960 --> 00:31:21,000 Speaker 9: West coast, but a lot of it is slowed down 623 00:31:21,080 --> 00:31:24,600 Speaker 9: in in migration to those markets at Florida. You know, 624 00:31:24,680 --> 00:31:27,920 Speaker 9: WI is Florida. It's gone up the most and now 625 00:31:27,960 --> 00:31:32,000 Speaker 9: has seen the highest slowdown and so obviously, you know, 626 00:31:32,000 --> 00:31:33,400 Speaker 9: you have some resetting going on. 627 00:31:33,480 --> 00:31:35,560 Speaker 3: I mean, Paul, this is great, almost lived this. 628 00:31:36,240 --> 00:31:39,600 Speaker 2: She went to school at the University of Buffalow and 629 00:31:39,920 --> 00:31:41,600 Speaker 2: follow New York and. 630 00:31:41,480 --> 00:31:42,920 Speaker 3: You're in California now, right. 631 00:31:42,960 --> 00:31:47,800 Speaker 2: I am which which snowstorm in April made the decision 632 00:31:47,880 --> 00:31:48,160 Speaker 2: to go. 633 00:31:48,160 --> 00:31:50,000 Speaker 3: To California, all of them? 634 00:31:51,000 --> 00:31:53,520 Speaker 2: That's the right answer, Selah thank you, so I sell 635 00:31:53,600 --> 00:31:55,760 Speaker 2: I help with the senior vice president catality. 636 00:31:55,840 --> 00:31:57,000 Speaker 3: Here with the snap. 637 00:31:57,280 --> 00:32:02,080 Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify, 638 00:32:02,200 --> 00:32:06,480 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 639 00:32:06,600 --> 00:32:10,080 Speaker 1: seven to ten am Eastern on Bloomberg dot com, the 640 00:32:10,160 --> 00:32:14,200 Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You 641 00:32:14,200 --> 00:32:17,600 Speaker 1: can also watch us live every weekday on YouTube and 642 00:32:17,800 --> 00:32:19,520 Speaker 1: always on the Bloomberg terminal