WEBVTT - Flying the Private Skies 0:00:01.360 --> 0:00:05.680 This is Bloomberg Business. Wait inside from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.680 global business, finance and tech news. The Bloomberg Business Week 0:00:13.720 --> 0:00:18.640 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:19.920 --> 0:00:22.200 So about a week ago, Bloomberg News was that with 0:00:22.239 --> 0:00:25.280 a story. It was about how airlines first class makeovers 0:00:25.280 --> 0:00:28.160 are giving the rich hotel rooms in the sky. That 0:00:28.280 --> 0:00:31.400 means carriers are investing billions of dollars to upgrade cabins. 0:00:31.400 --> 0:00:34.920 They've got sofas, double beds, TVs, desks, wardrobes, mini bars, 0:00:35.520 --> 0:00:38.120 and in some cases, Matt Maller walking showers. 0:00:38.800 --> 0:00:42.720 That's awesome. I know, I think that rung sign. 0:00:42.960 --> 0:00:44.800 It's like your flight. You're gonna take it at over 0:00:44.800 --> 0:00:45.680 the weekend, right. 0:00:46.240 --> 0:00:48.800 Yeah, No, I'm flying to Detroit over the weekend. It'll 0:00:48.800 --> 0:00:53.320 probably be on an incredibly uncomfortable narrow body jet in coach. Okay, 0:00:53.360 --> 0:00:53.960 sorry about that. 0:00:54.280 --> 0:00:56.880 Well listen. If that doesn't cut it, though, these upgrades 0:00:56.920 --> 0:00:59.320 that some are enjoying in first class, you can always 0:00:59.360 --> 0:01:01.640 buy your own private jet, including you, Matt Miller. So 0:01:01.680 --> 0:01:04.880 let's get into that with our next guest. Janine Janarelli. 0:01:04.959 --> 0:01:07.000 She is founder and president of par Avion. It's an 0:01:07.080 --> 0:01:10.560 international business aircraft sales and a marketing firm, and she 0:01:10.680 --> 0:01:13.520 joins us once again on zoom in Houston, Texas. Janine, 0:01:13.600 --> 0:01:16.400 nice to have you back here on Bloomberg. It's been 0:01:16.440 --> 0:01:18.959 a little while. Tell us about the market and what 0:01:19.000 --> 0:01:21.319 you're seeing right now and how everything is really kind 0:01:21.319 --> 0:01:24.880 of settled in post pandemic, Aha. 0:01:24.720 --> 0:01:27.600 Settled in? Well. The term that you're hearing oft used 0:01:27.600 --> 0:01:31.080 among the trade is a return and normalization, and it 0:01:31.200 --> 0:01:33.560 certainly feels that way now that we're through Q one 0:01:33.640 --> 0:01:36.559 and well into Q two, as compared to the last 0:01:36.600 --> 0:01:40.399 two years, Whereas in late twenty one and all of 0:01:40.440 --> 0:01:43.920 twenty two we were saying, who knew a pandemic could 0:01:43.959 --> 0:01:48.320 be good for business aviation? But it was. And now 0:01:48.360 --> 0:01:51.760 that we're on the backside of that, we see I 0:01:51.960 --> 0:01:54.440 personally see and I hear it echoed by my peers, 0:01:54.880 --> 0:01:59.200 a pronounced slowdown in the number of inquiries, the level 0:01:59.240 --> 0:02:03.400 of activity, and you know, prices are starting to correct. 0:02:04.000 --> 0:02:07.160 So is that because I mean, I guess during the pandemic, 0:02:07.160 --> 0:02:10.639 if you had enough money to fly, not just privately, 0:02:10.840 --> 0:02:14.520 but more importantly, separately from everyone else. You did that 0:02:14.680 --> 0:02:18.679 so that you wouldn't get sick. Now maybe people are 0:02:18.960 --> 0:02:22.200 less worried about that and willing to you know, as 0:02:22.240 --> 0:02:26.639 Carol said, you know airlines. Commercial airlines are putting your 0:02:26.680 --> 0:02:29.320 own room on the flight, so you might as well 0:02:29.360 --> 0:02:32.440 just take that instead of buying a G five point 0:02:32.440 --> 0:02:33.520 fifty or whatever it is. 0:02:34.520 --> 0:02:38.920 Well, there's still a huge difference between commercial airline travel 0:02:39.040 --> 0:02:41.760 and that of flying on your own aircraft. I mean, 0:02:41.960 --> 0:02:44.920 let's just talk about the convenience. First of all, there's 0:02:45.040 --> 0:02:48.400 not necessarily a deadline by which time they're going to 0:02:48.440 --> 0:02:53.440 close the door and you've missed your flight. Secondly, it's 0:02:53.480 --> 0:02:57.240 not the restrictive sort of feel with business or private 0:02:57.280 --> 0:03:01.280 aviation as it has with commercial commercial. You're sharing the 0:03:01.320 --> 0:03:07.560 space still with dozens, if not hundreds of fellow passengers 0:03:08.000 --> 0:03:11.640 that are trampling down the same aisle, using the same restrooms, 0:03:11.720 --> 0:03:15.360 taking advantage of all the well limited open space that 0:03:15.440 --> 0:03:19.760 you have, Whereas when people gravitated towards private aircraft during 0:03:19.760 --> 0:03:23.760 the pandemic, it was exactly that, creating a health corridor, 0:03:24.320 --> 0:03:26.919 so they knew who they were mingling with, what they 0:03:26.960 --> 0:03:29.600 were touching from the moment they left their home till 0:03:29.639 --> 0:03:33.760 they reached their destination. You are correct there is a 0:03:33.919 --> 0:03:36.960 slide back towards commercial travel, but I would say most 0:03:36.960 --> 0:03:39.279 of the draw Sorry. 0:03:39.080 --> 0:03:40.840 No, well you don't even want to jump in because 0:03:40.880 --> 0:03:45.000 I am curious. You said normalization pronounced slow down. I 0:03:45.040 --> 0:03:47.360 am curious what that means in your business? Is it 0:03:47.360 --> 0:03:49.640 down fifty percent? Is it down forty percent? I mean, 0:03:49.640 --> 0:03:51.160 I'm looking at your website. 0:03:51.320 --> 0:03:51.680 You know. 0:03:53.440 --> 0:03:56.760 What have I got here? Assessna citation, a Bombardier Global 0:03:56.800 --> 0:04:00.520 seventy five hundred. You're talking about Planesecho for at tens 0:04:00.520 --> 0:04:02.960 of millions of dollars, hundreds of millions of dollars. These 0:04:02.960 --> 0:04:06.720 are not an expensive items. And I'm just curious, what's 0:04:06.720 --> 0:04:08.640 a slowdown in this space look like? 0:04:09.600 --> 0:04:12.520 Well, you know, slow down is probably let's talk activity. 0:04:12.880 --> 0:04:15.480 Whereas before you could even get the airplane the market, 0:04:15.600 --> 0:04:18.000 you had a ready buyer for it. It was gone. 0:04:18.200 --> 0:04:22.360 The advertising was just done to sort of serve as 0:04:22.360 --> 0:04:24.720 a means by which to get other people to call in. 0:04:25.320 --> 0:04:29.400 Today we are now seeing lead times where I should say, 0:04:29.640 --> 0:04:32.640 bring the aircraft to market, and you're going to sit 0:04:32.680 --> 0:04:35.920 on the market ninety one hundred and twenty days on average. 0:04:36.200 --> 0:04:39.800 With most of the aircraft, I would say the flight 0:04:40.279 --> 0:04:44.200 or the decline in activity is being felt at the 0:04:44.240 --> 0:04:47.719 top end for sure, as well as at the entry level. 0:04:47.839 --> 0:04:52.600 The two to seven million dollar business jet that people 0:04:52.920 --> 0:04:56.839 jumped on a in a panic, in a frenzied buying, 0:04:57.240 --> 0:05:01.000 I would say through late twenty right up until Q 0:05:01.080 --> 0:05:02.040 three twenty two. 0:05:02.360 --> 0:05:05.640 Right, that's all gone away, by the way. 0:05:05.960 --> 0:05:06.080 Uh. 0:05:06.839 --> 0:05:09.920 In terms of you know, owning a private jet and 0:05:10.440 --> 0:05:13.800 using it, how many people actually fly their own? Do 0:05:13.880 --> 0:05:14.839 you have clients like that? 0:05:16.000 --> 0:05:19.040 A few, but very few? That is the small percentage 0:05:19.080 --> 0:05:23.280 of the entire let's say ownership pool that actually pilot 0:05:23.360 --> 0:05:26.360 their own aircraft. So at least in the category airplane 0:05:26.400 --> 0:05:26.960 I work with. 0:05:27.240 --> 0:05:29.640 What So, what are the hottest ones that you sell? 0:05:29.720 --> 0:05:32.520 What's the private jet? If I, you know, have some 0:05:32.760 --> 0:05:35.080 liquidity event and I'm all of a sudden holding a 0:05:35.120 --> 0:05:38.039 billion cash, I come to you and say, can you 0:05:38.040 --> 0:05:42.200 sell your bitcoin? Yeah, Jennine, give me the hottest it 0:05:42.560 --> 0:05:45.560 jet that you've got. What's the one that everybody wants? 0:05:46.200 --> 0:05:46.400 OK? 0:05:46.400 --> 0:05:48.960 Got Global seventy five hundred that you're taking a good 0:05:49.040 --> 0:05:52.599 look at. If you come into a billion dollars, that 0:05:52.760 --> 0:05:54.719 is the aircraft for you, you can go anywhere in the 0:05:54.720 --> 0:05:58.160 world quite comfortably. But the other side of the it jet, 0:05:58.240 --> 0:06:01.159 let's call it an IT sector, is the mid size, 0:06:01.200 --> 0:06:05.800 super mid sized popular airplane, perfect size, ideally suited for 0:06:05.920 --> 0:06:09.640 continental US travel, and the charter operators love it. 0:06:10.680 --> 0:06:12.200 You know what I'm curious too about I think the 0:06:12.240 --> 0:06:14.440 last time we talked, and again it was a few 0:06:14.520 --> 0:06:17.680 years ago, I think cross border was a big thing 0:06:17.760 --> 0:06:21.279 for you, and so were entrepreneurs. Who is buying today, 0:06:21.279 --> 0:06:25.080 And I'm curious entrepreneurs maybe think Silicon Valley Bank or 0:06:25.120 --> 0:06:26.680 slow down if that's had an impact. 0:06:28.040 --> 0:06:32.159 Well, X sector certainly has seen a slow down and 0:06:32.160 --> 0:06:36.279 a decline of inquiries coming from that particular industry. But 0:06:36.520 --> 0:06:38.719 entrepreneurs are still my sweet spot. And remember there are 0:06:38.839 --> 0:06:43.760 entrepreneurs doing many different things, and one market declines, another 0:06:43.800 --> 0:06:47.200 one rises, one industry declines, and other rises. In the 0:06:47.240 --> 0:06:50.080 aircraft sales world, we make money coming and going in 0:06:50.240 --> 0:06:54.040 economic cycles. As far as the cross border that's starting 0:06:54.080 --> 0:06:57.640 to pick up, but still lagging behind demand within the 0:06:57.760 --> 0:06:58.520 United States. 0:07:00.040 --> 0:07:02.200 If I only have, like I don't know, fifty sixty 0:07:02.200 --> 0:07:04.760 million bucks, but I have a few friends with fifty 0:07:04.880 --> 0:07:09.120 or sixty million bucks. Do you recommend people going in 0:07:09.240 --> 0:07:12.720 on a jet or where do you steer someone away 0:07:12.720 --> 0:07:15.280 from that idea? I mean, does it really make sense 0:07:15.280 --> 0:07:18.200 to buy your own jet? Isn't it better to be 0:07:18.240 --> 0:07:19.760 able to lease it out occasionally? 0:07:21.240 --> 0:07:25.080 Well, what you buy is driven by your need. For sure, 0:07:25.400 --> 0:07:28.400 how many hours per month you anticipate you'll be flying, 0:07:28.480 --> 0:07:31.680 what's the distances you're going to be traveling. While partnership 0:07:31.680 --> 0:07:35.160 in aircraft is not uncommon, it doesn't always work because 0:07:35.160 --> 0:07:38.520 you have conflicting needs or conflicting schedules. So if you 0:07:38.600 --> 0:07:41.120 had three friends and each of you had fifty million apiece, 0:07:41.560 --> 0:07:45.560 sure pull and buy one jet. That might facilitate some 0:07:45.600 --> 0:07:48.000 of the trips. But ultimately I think you'll find you 0:07:48.040 --> 0:07:48.960 each need to your own. 0:07:49.200 --> 0:07:51.280 You know, I do wonder too, Jinny, like there are weird, 0:07:51.480 --> 0:07:53.600 kind of weird things that we sometimes look at for 0:07:53.720 --> 0:07:56.680 global economic indicators, And I'm curious about what you are 0:07:56.680 --> 0:07:58.520 seeing in your business as it says to you that 0:07:58.560 --> 0:08:01.480 a recession is on the horizon, or how would you 0:08:01.560 --> 0:08:04.440 describe kind of the economic outlook the. 0:08:04.360 --> 0:08:08.400 Big R word. So that's obviously been something that's been 0:08:08.520 --> 0:08:13.480 discussed within the trade for oh since the Middle of 0:08:13.600 --> 0:08:16.680 last year, because we know it's looming. An economic cycle 0:08:16.760 --> 0:08:20.120 is inevitable, and we've been through a boom period in 0:08:20.160 --> 0:08:23.480 our business, and I would say that business checks historically 0:08:23.520 --> 0:08:26.320 have been a pretty good leading indicator of things to come. 0:08:26.760 --> 0:08:29.000 I think the waters are a bit muddied at this 0:08:29.160 --> 0:08:33.559 time that we're not predicting what's coming next. The slowdown 0:08:34.000 --> 0:08:37.480 that we're feeling, I think was inevitable as a result 0:08:37.520 --> 0:08:41.720 of several things. One the one hundred percent bonus appreciation 0:08:41.840 --> 0:08:45.160 going away at the end of last year. The pandemic 0:08:45.240 --> 0:08:49.040 frenzied buying is pretty much over. Most everyone made their selections, 0:08:49.080 --> 0:08:52.760 got their deals done. And now that's why we call 0:08:52.840 --> 0:08:56.720 it a return to normalization, a normal turn time on 0:08:56.880 --> 0:09:00.960 the aircraft. The number of inquiries are equalizing, and you know, 0:09:01.040 --> 0:09:04.920 as prices slide, it's going to stimulate demand once again. 0:09:05.400 --> 0:09:07.480 And I have to say that I'm not sure prices 0:09:07.520 --> 0:09:10.840 are going to slide dramatically. They're going to correct slightly. 0:09:11.360 --> 0:09:13.720 And one of the questions I have on a panel 0:09:13.760 --> 0:09:16.119 that I'm going to host next week at the European 0:09:16.200 --> 0:09:20.200 Business Aviation Conference is if this prices slid to twenty 0:09:20.320 --> 0:09:23.880 nineteen level, is that still a win for everybody. 0:09:25.080 --> 0:09:27.640 I hear you. I think about that all the time myself. Actually, 0:09:27.960 --> 0:09:30.480 what's that you know, if we drop just back to 0:09:30.520 --> 0:09:33.360 twenty nineteen levels, is that bad? Or is that a win? 0:09:33.440 --> 0:09:37.640 We've gone through this incredible pandemic. You know, it's it 0:09:37.679 --> 0:09:40.640 doesn't seem like it's such a horrible stat anyway, Janine, 0:09:40.640 --> 0:09:42.640 great having you on. I always love to get a 0:09:42.720 --> 0:09:46.760 check on the private jet industry, Janine Ganarelli. They are 0:09:46.880 --> 0:09:49.760 founder and president of par Avion. 0:09:50.480 --> 0:09:54.040 You're listening to the Bloomberg Business Week podcast. Catch us 0:09:54.080 --> 0:09:57.440 live weekday afternoons from three to six Eastern Listen on 0:09:57.480 --> 0:10:01.520 Bloomberg dot com, the iHeartRadio app, been the Bloomberg Business app, 0:10:01.800 --> 0:10:04.120 or wants just live on YouTube? 0:10:04.480 --> 0:10:04.800 All right? 0:10:04.840 --> 0:10:07.760 Chairs in Morgan Stanley Charlie talking certainly about the top stories, 0:10:07.760 --> 0:10:10.240 including Morgan Stanley which is the stockdown about two and 0:10:10.280 --> 0:10:12.280 a half percent. It is, I believe still the most 0:10:12.320 --> 0:10:15.760 read story on the Bloomberg about James Gorman, who transformed 0:10:15.760 --> 0:10:18.840 the company, who has been CEO. He's now in his 0:10:18.880 --> 0:10:21.000 fourteenth year. He's getting ready to leave in the next 0:10:21.000 --> 0:10:23.600 twelve months at least as CEO. So what you need 0:10:23.640 --> 0:10:27.360 to know from Bloomberg News Finance reporter Shrinaajen in studio 0:10:27.400 --> 0:10:30.040 with us our Bloomberg Interactive Broker Studio along with Bloomberg 0:10:30.040 --> 0:10:33.480 News Wall Street reporter Shinali Bosik. First of all, I'm 0:10:33.480 --> 0:10:36.680 going to count down from three and you have to 0:10:36.679 --> 0:10:39.200 say yes or no whether you were surprised that he 0:10:39.280 --> 0:10:44.719 made this announcement. Wait, wait, three to one. Okay, nicely done, 0:10:44.800 --> 0:10:46.640 nicely done. Okay, Why were you not surprised? 0:10:46.679 --> 0:10:51.440 Although I would, She said yes, she was surprised. 0:10:51.679 --> 0:10:54.560 Oh, you know, I don't think I'm surprised about the announcement. 0:10:54.600 --> 0:10:56.679 I'm surprised that he said it at the annual meeting 0:10:56.679 --> 0:10:59.200 this morning in this fashion. Morgan Stanley kind of has 0:10:59.200 --> 0:10:59.839 a weird way of it. 0:10:59.800 --> 0:11:02.679 Agree. I mean, it was like, of course, he's been 0:11:02.720 --> 0:11:06.199 there for thirteen years, he's done a bang of he's 0:11:06.240 --> 0:11:06.720 ready to go. 0:11:06.840 --> 0:11:08.400 He's twenty sixty five in July. 0:11:09.000 --> 0:11:10.720 How many How many years has Jamie been there? 0:11:10.760 --> 0:11:11.680 Fifty five years? 0:11:12.320 --> 0:11:14.760 Okay, but see since two thousand and five. All right, 0:11:15.040 --> 0:11:17.280 it's still it's still was a headline where when I 0:11:17.320 --> 0:11:20.760 saw it, I went, wow, well, because it's good news, 0:11:20.880 --> 0:11:23.880 so it's not like it's unexpected but it still was 0:11:24.360 --> 0:11:25.120 kind of a surprise. 0:11:25.280 --> 0:11:27.439 Okay, Well, and investors are a little bummed out, So 0:11:27.800 --> 0:11:28.440 what do we need to know? 0:11:28.480 --> 0:11:30.200 Which is the nicest compliment? Right, If you've been a 0:11:30.240 --> 0:11:31.840 CEO for fourteen years and you say you're going to. 0:11:31.840 --> 0:11:34.000 Step down rallies, you really have to get worse. 0:11:34.040 --> 0:11:36.280 I mean, they're not that bummed out in a down market? 0:11:36.679 --> 0:11:39.000 What's Morgan Stanley shares off two percent? 0:11:39.200 --> 0:11:39.840 Yeah? 0:11:40.320 --> 0:11:42.640 Percent? Not for bank stock going to say in a 0:11:42.800 --> 0:11:45.400 down market? You know, I mean I'm a lot of 0:11:46.160 --> 0:11:48.080 that day. If I were leaving, I would want it 0:11:48.120 --> 0:11:49.239 to be at least decimated. 0:11:49.400 --> 0:11:50.720 Stop jap mortgage just down. 0:11:50.640 --> 0:11:53.880 For he's decimated. Yes, that will speak for your legacy. 0:11:54.360 --> 0:11:56.640 Okay, So our parents are calling in and saying, Okay, 0:11:56.640 --> 0:11:57.960 what do we need to know about this? So what 0:11:57.960 --> 0:11:58.600 do we need to know? 0:11:58.880 --> 0:11:59.719 It's an important move. 0:11:59.720 --> 0:12:02.120 But James Gorman has been one of the longest tenure 0:12:02.120 --> 0:12:04.800 on Wall Street leaders. You know, you would put him 0:12:04.800 --> 0:12:06.920 in the same club as Brian Moynen, who took over 0:12:06.960 --> 0:12:09.320 as CEO at Bank of America around the same time 0:12:09.400 --> 0:12:13.720 in twenty ten. And the only other longer term veteran 0:12:13.760 --> 0:12:16.320 out there is Jamie Diamond. Who will always be the 0:12:16.360 --> 0:12:20.559 CEO of JP Morgan into twenty one hundred, but almost 0:12:20.600 --> 0:12:23.080 fourteen years at the top. For the last three years, 0:12:23.160 --> 0:12:27.280 he's been very public about executing this succession plan. It 0:12:27.400 --> 0:12:30.600 started up, started off with the leadership overall. In twenty 0:12:30.640 --> 0:12:33.520 twenty one, you got a firm timeline. Then that's when 0:12:33.559 --> 0:12:36.439 we found out that James Gorman told the Morgan Stanley 0:12:36.480 --> 0:12:39.480 board that he plans to be around for about three 0:12:39.520 --> 0:12:42.720 more years in twenty twenty three. Today he says another year. 0:12:42.760 --> 0:12:45.680 So it's all pretty much going a long plan. But 0:12:45.800 --> 0:12:48.520 it still is the momentous occasion because he took on 0:12:48.600 --> 0:12:53.320 a bank that almost collapsed during the previous global financial crisis. 0:12:53.360 --> 0:12:57.120 All of them did right well, Morgan Stanley in particular. 0:12:56.640 --> 0:12:58.120 The check the check. 0:12:58.960 --> 0:13:01.480 Yeah, they had to bring in a big infusion of 0:13:01.520 --> 0:13:02.720 capital from FFGP. 0:13:02.840 --> 0:13:02.880 No. 0:13:03.280 --> 0:13:04.720 It was a real mess, and a lot of his 0:13:04.800 --> 0:13:07.560 first few years was tackling with that because they were 0:13:07.640 --> 0:13:11.319 in deep trouble for the first few years of James 0:13:11.400 --> 0:13:14.240 Gorman's leadership. But what we've also seen over the past 0:13:14.280 --> 0:13:18.240 decade is a real transformation. Now you have a bank 0:13:18.320 --> 0:13:21.800 that has a dual engine of the investment bank that 0:13:22.200 --> 0:13:24.640 seems to be working just fine. The top three Goldman 0:13:24.720 --> 0:13:27.240 JP Morgan Stanley. That's how we think about the investment 0:13:27.240 --> 0:13:31.199 banking space. They are far ahead of everyone else. And 0:13:31.240 --> 0:13:35.000 then this giant wealth management juggernaut, four point five trillion 0:13:35.040 --> 0:13:39.520 dollar manager in the wealth space, bigger than anyone else 0:13:39.559 --> 0:13:43.400 out there. Even after the UBSCS merger, even after the 0:13:43.520 --> 0:13:46.560 UBS Credit Swie merger, Morgan Stanley will still be the 0:13:46.679 --> 0:13:49.480 largest wealth manager in the world. And that tells you something. 0:13:49.679 --> 0:13:52.120 And now that they've set it up that way, it 0:13:52.559 --> 0:13:55.840 seems like this is about the right time for James 0:13:55.840 --> 0:13:57.040 Gorman to step aside. 0:13:57.080 --> 0:13:58.200 So that leads us to the people. 0:13:58.640 --> 0:13:59.720 So who comes in? So who? 0:14:00.160 --> 0:14:03.320 So there's a story that our former boss, Mike Moore, 0:14:03.360 --> 0:14:06.760 who is now our boss's boss's boss, he had broke 0:14:06.880 --> 0:14:09.760 back in twenty fifteen, and it was this moment where 0:14:09.760 --> 0:14:14.400 Goldman Morgan Stanley planned to cut fixed income jobs across 0:14:14.720 --> 0:14:17.320 all regions. It was a big moment on Wall Street, 0:14:17.360 --> 0:14:19.240 and it came a month after this fellow named Ted 0:14:19.280 --> 0:14:23.120 Pick had taken over. And Ted Pick is someone who 0:14:23.240 --> 0:14:26.359 rose under colmb Kalaher who is now the chairman of UBS, 0:14:26.440 --> 0:14:30.480 and he had really tough positions. He had really had 0:14:30.520 --> 0:14:34.280 surgically had to fix some division that Morgan family, to 0:14:34.360 --> 0:14:36.800 Tree's point, that had not done very well after the 0:14:36.800 --> 0:14:39.400 financial crisis. So he's one of the people that is 0:14:39.440 --> 0:14:41.680 in line. But then you also and by the way, 0:14:41.720 --> 0:14:44.840 that division is loyal to each other. The question is 0:14:44.840 --> 0:14:47.440 if he does not become the CEO, does that cause 0:14:47.440 --> 0:14:51.560 an attrition problem underneath those ranks. Then to Sheree's point. 0:14:51.320 --> 0:14:52.520 Wait, so they have a good bench. 0:14:52.720 --> 0:14:55.120 Huge. Yeah, they have a bench of three people, two 0:14:55.280 --> 0:14:57.960 that are particularly watched, Ted Pick being one of them, 0:14:57.960 --> 0:15:00.600 and the other being Andy Sapperstein, who she has written 0:15:00.600 --> 0:15:03.720 about really recently in the Markets magazine story who is 0:15:03.720 --> 0:15:06.760 the wealth boss? And this man brings in or is 0:15:06.880 --> 0:15:09.280 expected to bring in a trillion dollars of net new 0:15:09.320 --> 0:15:12.120 assets that the wealth manager every three years. He is 0:15:12.200 --> 0:15:13.680 just raking in money. 0:15:13.800 --> 0:15:16.360 And two interesting things I'd like to point out. Anytime 0:15:16.440 --> 0:15:19.800 you have you know, you identify the likely successes, and 0:15:19.880 --> 0:15:23.200 you go out and survey the analyst. Generally you have 0:15:23.280 --> 0:15:25.680 some level of consensus. They might still say it's a 0:15:25.680 --> 0:15:28.880 close race, but everyone probably leans towards one candidate. But 0:15:29.240 --> 0:15:31.880 when we have heard from analysts today about half of 0:15:31.920 --> 0:15:34.160 them are like, yeah, it's a very close race, but 0:15:34.280 --> 0:15:36.920 we think Andy Seperstein's more likely wealth management has been 0:15:37.000 --> 0:15:39.600 their growth engine that's responsible for two thirds of their valuation, 0:15:39.840 --> 0:15:42.520 and the other half are saying, no, it's probably Ted Pick. 0:15:42.600 --> 0:15:46.880 The wealth management success is priced in more growth. Isn't 0:15:46.920 --> 0:15:49.800 necessarily expected that growth trajectory might be the same. But 0:15:49.880 --> 0:15:52.360 if you had to see real upshot, which is if 0:15:52.400 --> 0:15:54.520 you wanted a tequila shot on your smoothie, that's going 0:15:54.600 --> 0:15:56.920 to come from your investment back and that's where Ted 0:15:56.960 --> 0:15:58.160 piggrain and. 0:15:58.080 --> 0:16:00.400 Where the growth will come right is is what. 0:16:00.440 --> 0:16:02.320 Some of the analysts are saying. Not everyone agrees, but 0:16:02.600 --> 0:16:04.880 to me, it's just interesting that there is this neat 0:16:04.920 --> 0:16:07.440 little divide in the analyst universe. And the other thing 0:16:07.440 --> 0:16:10.320 I'd like to point out, and I think it's underappreciated 0:16:10.320 --> 0:16:13.280 when we think about James Gorman's tenure, and there will 0:16:13.320 --> 0:16:15.720 be more and more reflection and discussion on this. The 0:16:16.080 --> 0:16:21.320 Morgan Stanley that James Gorman joined was rife with political infighting. 0:16:21.480 --> 0:16:24.000 He joined Morgan Stanley from Merrill Lynch right after the 0:16:24.040 --> 0:16:27.120 former CEO of Morgan Stanley, Phil Purcell, was ousted in 0:16:27.160 --> 0:16:30.640 a coup people hated each other, divisions hated each other. 0:16:30.800 --> 0:16:33.600 True that he doesn't seem to be very much the 0:16:33.680 --> 0:16:34.480 case these things. 0:16:34.720 --> 0:16:38.280 Remember you know Morgan Stanley is the white shoe shop, right, 0:16:38.320 --> 0:16:41.680 I mean they don't fight publicly there, and. 0:16:41.560 --> 0:16:43.920 So it doesn't mean they don't fight, right, Well, No. 0:16:44.000 --> 0:16:46.840 What is interesting is they fight in a way. Well, 0:16:46.880 --> 0:16:49.440 it's not that they compete, and they set it up 0:16:49.480 --> 0:16:51.600 to compete. So if you think about how amazing the 0:16:51.640 --> 0:16:54.800 succession story has been since Gorman has taken over, think 0:16:54.800 --> 0:16:58.240 about how many high profile presidents of Paul Tauman went 0:16:58.280 --> 0:17:01.320 off and founded his own firm. Her now the chairman 0:17:01.360 --> 0:17:04.159 of UBS. And I remember colmbe was probably at that 0:17:04.200 --> 0:17:06.280 point not going to take over a CEO of Morgan 0:17:06.280 --> 0:17:10.000 Stanley anymore, leading the you know the baton here to 0:17:10.040 --> 0:17:13.720 Ted pick and Andy and all that. But uh, you 0:17:13.840 --> 0:17:16.919 know Rockefeller, Greg Fleming, right, I mean, this is a 0:17:17.040 --> 0:17:18.280 history of talent. 0:17:18.359 --> 0:17:21.720 Come, I don't hear any women A great question. 0:17:22.240 --> 0:17:24.119 And you know we've in the commercial break we were 0:17:24.160 --> 0:17:26.359 talking about this as well, and they've been criticized on 0:17:26.400 --> 0:17:27.960 the Hill for this as well. It's not just women. 0:17:28.240 --> 0:17:30.320 Morgan Stilly has lost a lot of high profile women 0:17:30.359 --> 0:17:33.160 in recent years. I think Shelley O'Connor, she was once 0:17:33.200 --> 0:17:38.200 on that succession list as well. She yes, I think 0:17:38.840 --> 0:17:40.960 I think Carla Harris, who is not necessarily in a 0:17:40.960 --> 0:17:42.800 line of succession, but one of the most senior black 0:17:42.800 --> 0:17:46.360 women on Wall Street. So not only talent drain here, 0:17:46.640 --> 0:17:50.040 but also the lack of a pipeline high enough you're 0:17:50.080 --> 0:17:51.400 welcome anytime. 0:17:53.240 --> 0:17:59.119 Does this put any pressure on Superstar bank CEO the 0:17:59.240 --> 0:18:02.440 king himself, Jamie Diamond. I mean, he's been at JP 0:18:02.560 --> 0:18:04.600 Morgan forever. I know that over the same period they've 0:18:04.600 --> 0:18:07.800 outperformed in terms of the stock. But he's sixty seven 0:18:07.880 --> 0:18:10.480 years old, He's had his own health issues. Why doesn't 0:18:10.520 --> 0:18:13.360 he at some point say like, okay, I'm done too. 0:18:13.680 --> 0:18:16.600 You know what, I have a question for Shree. Do 0:18:16.640 --> 0:18:18.840 you think that they have to take someone from inside 0:18:18.840 --> 0:18:20.560 of JP Morgan or do you think they could bring 0:18:20.640 --> 0:18:23.560 back on that James or Charlie Sharp at this point 0:18:23.720 --> 0:18:27.080 do you think they've telegraphed to interesting. 0:18:26.840 --> 0:18:29.800 You know that that makes this massive supposition that there 0:18:29.840 --> 0:18:31.880 will be a day when Jamie Diamond. 0:18:32.680 --> 0:18:34.520 It may never happen, guys. 0:18:34.640 --> 0:18:36.160 It has to happen one day. 0:18:36.359 --> 0:18:37.840 He really loves his job with. 0:18:38.320 --> 0:18:41.120 JP Morgan's Monday, he will be asked. 0:18:41.280 --> 0:18:43.560 Wait, Carroll, you're saying, do you think AI could be 0:18:43.600 --> 0:18:45.160 the new CEO of JP Morgan? 0:18:45.240 --> 0:18:47.800 They could be a Jamie and get to this point 0:18:48.119 --> 0:18:50.720 right metaverse. Who knows what could happen? 0:18:50.760 --> 0:18:53.480 Do you think Jamie is sitting there recording his sayings 0:18:53.480 --> 0:18:55.360 and what he would do so even when he's not. 0:18:55.400 --> 0:18:59.800 There, because he uploaded his consciousness. 0:19:00.240 --> 0:19:02.560 That's exactly what I was thinking. 0:19:02.680 --> 0:19:07.960 All right, great you, great conversation, Happy Friday, More to come. 0:19:08.080 --> 0:19:09.680 I know I thought Fridays were supposed to be quiet? 0:19:09.680 --> 0:19:12.639 What's up with this? Shinettarrojen, thank you so much, senior 0:19:12.640 --> 0:19:14.560 financial porter of a Bloomberg News here in our studio, 0:19:14.840 --> 0:19:16.680 Shineli bask Wall Street Reporter, Bloomberg News. 0:19:16.680 --> 0:19:20.640 Guys, you're listening to the Bloomberg Business Week podcast. Catch 0:19:20.720 --> 0:19:23.879 us live weekday afternoons from three to six Easter on 0:19:24.000 --> 0:19:27.720 Bloomberg Radio, the Bloomberg Business App and YouTube. You can 0:19:27.760 --> 0:19:31.000 also listen live on Amazon Alexa from our flagship New 0:19:31.080 --> 0:19:34.800 York station Just Say Alexa, playing Bloomberg eleven thirty. 0:19:36.520 --> 0:19:38.760 It's a story that is being also read by a 0:19:38.800 --> 0:19:41.040 lot of folks on the Bloomberg we're talking about. 0:19:41.359 --> 0:19:42.240 It's among the most. 0:19:42.400 --> 0:19:46.000 Cloning the quand strategy. I love this story. Yes, absolutely, 0:19:46.359 --> 0:19:46.680 Not that. 0:19:46.640 --> 0:19:48.800 He isn't interested, he's just not focused right now. But 0:19:48.840 --> 0:19:49.280 that's okay. 0:19:49.359 --> 0:19:52.000 He's focused. I'm just not organized, So yeah, you know it. 0:19:52.040 --> 0:19:54.879 To me, seventy billion dollar business on Wall Street cloning 0:19:54.960 --> 0:19:55.520 quad trades. 0:19:55.600 --> 0:19:58.520