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Speaker 3: Is Bloomberg Business Week inside from the reporters and editors
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Speaker 3: O Business finance and tech news. The Bloomberg Business Week
Speaker 3: Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio well.
Speaker 4: Talking about kicking into high gear.
Speaker 2: The stock The buyback plan news early this morning from
Speaker 2: General Motors, announcing it it's biggest ever stock buyback plan,
Speaker 2: ten billion in total. It also boosted its dividend thirty
Speaker 2: three percent. Tim and reinstated earning's guidance after accounting for
Speaker 2: costs of its new labor contract.
Speaker 1: CEO Mary Barra promised to better days are ahead, stressing
Speaker 1: confidence in the cast generation of GM, the execution of strategy,
Speaker 1: and expectation of growth and strong margins. This carol despite
Speaker 1: minimal EV sales, a troubled robotaxi business, and even more
Speaker 1: trouble at its battery pack facilities that has kept EV
Speaker 1: production in the low thousands.
Speaker 4: That's right.
Speaker 2: GM's ultimum battery pack was supposed to enable the company
Speaker 2: to make multiple types of electric cars off the same
Speaker 2: platform and beat competitors to market with a ton of vehicles.
Speaker 4: Here's more for Mary Barra.
Speaker 5: From an EV perspective, we have confidence in the portfolio
Speaker 5: we have. We're a bit disappointed this year that we
Speaker 5: were constrained by the automation to build modules. So this
Speaker 5: is not something that is fundamentally an issue with Altium.
Speaker 5: It was more manufacturing automation issue that we're working and
Speaker 5: we'll be out of it by middle of next year
Speaker 5: and making provement every quarter, all right.
Speaker 2: That, of course, was the CEO of General Motors Mary Barrow,
Speaker 2: talking earlier today on Bloomberg. Let's get a little bit
Speaker 2: more into this story. Bloomberg News auto reporter Keith Noughton
Speaker 2: is on Zoom from Detroit.
Speaker 4: We love our auto team. They know this world so well.
Speaker 2: Keith. Good to have you here with Tim and myself.
Speaker 2: How do you make sense of the news today? I
Speaker 2: mean the stocks up, shares of General Motors up nine percent,
Speaker 2: doing a massive buyback and boosting your dividend. I get
Speaker 2: it why investors like it. But what does it say
Speaker 2: about the business if this is the best use of money?
Speaker 6: Yeah, I mean it's really Mary Barrow kind of pleading
Speaker 6: for patients in a very expensive fashion, of course, because
Speaker 6: things have not been going so well on their technology bets.
Speaker 6: As you noted, the EV ramp has been very slow
Speaker 6: because of problems building batteries, and you know, Cruise, their
Speaker 6: autonomous vehicle unit, has been a bit of a umpster
Speaker 6: fire lately with all sorts of safety problems and the
Speaker 6: CEO quitting abruptly a week ago. So and they're scaling
Speaker 6: back because they're losing you know, seven hundred million dollars
Speaker 6: a quarter at Cruise, so they really aren't getting the
Speaker 6: payoff yet on these very large technology investments. As a result,
Speaker 6: their stock's been down by double digits this year. So
Speaker 6: this is a way to ask investors to give them time.
Speaker 1: Okay, so how much time do they need and what
Speaker 1: do they need that time for? Because Ford is running
Speaker 1: into similar issues when it comes to evs. The F
Speaker 1: one fifty Lightning isn't selling like it was in previous quarters.
Speaker 1: The mock e electric Mustang, same thing. It's there's there's
Speaker 1: this uh sort of shift in the way that consumers
Speaker 1: are thinking about EV's.
Speaker 7: What's going on, Yeah, there's a there's a few things
Speaker 7: at work.
Speaker 6: One on the production side, the legacy automakers are discovering
Speaker 6: what Elon Musk discovered a few years ago when he
Speaker 6: tried to go to mass production with Tesla. You might
Speaker 6: recall him describing that as production. Hell, well, that's what
Speaker 6: the legacy automakers are in right now. They're discovering that
Speaker 6: building electric vehicles is harder than building internal combustion engine vehicles,
Speaker 6: and so there are a lot of hiccups in both
Speaker 6: battery production and the EV production itself. That's one problem,
Speaker 6: so they can't get them out the door of the factory.
Speaker 6: The other problem is this demand issue you're talking about.
Speaker 6: There's still you know, rising demand for electric vehicles, but
Speaker 6: it has slowed considerably because we've gotten past the sort
Speaker 6: of early adopters who are willing to pay anything to
Speaker 6: have the latest and the greatest, and now we've gotten
Speaker 6: to that broad middle of the market and folks are
Speaker 6: bulking at the price of electric vehicles which are higher
Speaker 6: than standard cars, and the charging infrastructure which is still
Speaker 6: very spotty.
Speaker 2: In the Hey Keith our Bloomberg Intelligence team says the
Speaker 2: move to offset the effects of higher costs from the
Speaker 2: new year UAW contract adds confusion to GM's electrification electrification
Speaker 2: strategy and is out of step with the practice of
Speaker 2: conserving cash when demand is uncertain. Should they be conserving
Speaker 2: cash right now?
Speaker 6: Yeah, Well, you know, the electric vehicle business at GM
Speaker 6: and the other legacy automakers is just burning cash right now.
Speaker 7: So if you take ten billion.
Speaker 6: Dollars and diverted into a stock buyback, yeah, that's money
Speaker 6: that could have been spent to try and write your
Speaker 6: EV business or your autonomous vehicle business, either of those
Speaker 6: they both consume billions of dollars. So it is a
Speaker 6: good question to ask, is this the best use of capital?
Speaker 1: At this time, So what would be what are investors
Speaker 1: saying could be better uses of capital?
Speaker 6: Well, you can try and you know, buttress your EV
Speaker 6: production and strategy and model offerings so you can become
Speaker 6: a legitimate competitor to Tesla, which still controls more than
Speaker 6: half the market and makes money selling electric keeples.
Speaker 7: Keith, I just want to know.
Speaker 1: Sorry, I want to sort of like cut you off
Speaker 1: with my own with another one of my own questions here,
Speaker 1: So apologies. But there was an article over the weekend,
Speaker 1: I believe, in the Wall Street Journal about hybrids and
Speaker 1: the way that some companies now are are sort of
Speaker 1: you know, they said, you know, evs aren't necessarily the
Speaker 1: way that we think the future is going to work.
Speaker 1: We think it's going to be hybrids. Where where are
Speaker 1: Ford and GM on that.
Speaker 6: Board predicts that it's hybrid sales will quadruple over the
Speaker 6: next four years, And they are pouring money into hybrids
Speaker 6: now because they recognize hybrids are more cost effective and
Speaker 6: they don't have the charging infrastructure issues, so they can
Speaker 6: be this sort of bridge to electrification.
Speaker 7: So there's this.
Speaker 6: Renewed focus on hybrids out of Detroit and with a
Speaker 6: lot of legacy automakers. Toyota never went away from hybrids.
Speaker 6: They said the market wasn't ready for full EVS. Hybrids
Speaker 6: is the first step you take on the electrification journey.
Speaker 2: Well, you did that great story for Business Week they
Speaker 2: talk specifically about hybrids, and I thought it was really smart.
Speaker 1: I read it a business week before I read it
Speaker 1: in the journal. Keith, I promise, okay.
Speaker 2: Everybody, everybody follows what our auto team does. I'm just
Speaker 2: going to say that no, but it was so smart
Speaker 2: because it used to be hybrids and then EVS took over.
Speaker 2: But it was fascinating to hear the reporting that you
Speaker 2: did about what we are seeing when it comes to
Speaker 2: the hybrid market and the growth that we're seeing, and
Speaker 2: you do wonder is that does that continue? And you
Speaker 2: know it was I think early October that you did
Speaker 2: that story. Do we continue to see demand in the
Speaker 2: hybrid space?
Speaker 7: Thanks Carol for reading And.
Speaker 6: You might recall from that story one of the people
Speaker 6: I interviewed was this dentist who has a mobile dental practice.
Speaker 7: She tows a trailer around.
Speaker 6: Well, you know, you just can't do that with an
Speaker 6: electric pickup truck because it'll deplete the battery too.
Speaker 7: Fast. But guess what you.
Speaker 6: Can do it with a hybrid, which is what she has,
Speaker 6: because having the electric motor and the eternal combustion engine
Speaker 6: actually gives you more cork the thing you need to
Speaker 6: pull a trailer. So there are many benefits to hybrids
Speaker 6: that people are really kind of rediscovering or discovering for
Speaker 6: the first time.
Speaker 7: And so and it does lower your carbon footprints, so it's.
Speaker 6: A way to stay and start moving in that direction
Speaker 6: without any of the you know things you sort of
Speaker 6: have to give up to EV's Amber Labardi, that's.
Speaker 8: How you did so well, go ahead, Kyl.
Speaker 2: Well, so do we need to be worried about General
Speaker 2: Motor and their strategy.
Speaker 9: No.
Speaker 6: I just think it's going to take longer to get there,
Speaker 6: and that's that's the issue. And there was you know,
Speaker 6: we're sort of entering this trough of disillusionment on the
Speaker 6: way the EV ramp is going to happen. It's it's
Speaker 6: not linear. There's ups and downs and run it down.
Speaker 1: And does the does do hybrids provide that bridge or
Speaker 1: do they displace evs.
Speaker 6: I think the way the industry views it, and particularly Toyota,
Speaker 6: the hybrid leader, is that it is the bridge.
Speaker 7: You know, you just.
Speaker 6: Take that step into electrification and you live with that
Speaker 6: in a way that there's fewer compromises, and hopefully during
Speaker 6: that period and by the time you're ready for your
Speaker 6: next car, the price of evs have come come down,
Speaker 6: and there'll be more charging stations throughout the country, so
Speaker 6: you don't have to worry about running out of juice
Speaker 6: and having nowhere to plug in.
Speaker 2: I might have to have you talk to my husband
Speaker 2: because he's waiting for hydrogen sales, fuel sales.
Speaker 8: How long is he gonna be waiting?
Speaker 9: Care?
Speaker 4: But he's like, that's the answer.
Speaker 8: I don't have a good question.
Speaker 2: Keith Noughton, you are amazing. Thank you so much and
Speaker 2: highly recommend I'll put that story out that Keith wrote
Speaker 2: back in October about the hybrid marker because it says
Speaker 2: so much about what's going on right now.
Speaker 8: You send it to me too.
Speaker 1: I will want to appreciate it.
Speaker 2: If you could read a couple of stories you just kidding,
Speaker 2: just kidding. Bloomberg's Keith Notton. Of course, he's Bloomberg News
Speaker 2: auto reporter joining us on zoom from Detroit.
Speaker 3: You're listening to the Bloomberg Business Week podcast Catch US
Speaker 3: Live weekday afternoons from three to six Eastern Listen on
Speaker 3: Bloomberg dot com, the iHeartRadio app and the Bloomberg Business app,
Speaker 3: or watch US Live on YouTube.
Speaker 10: Well.
Speaker 2: As pandemic worries have faded, the travel business has definitely
Speaker 2: come soaring back, with airline traffic more than doubling since
Speaker 2: its COVID era trough and waiting times for deliveries of
Speaker 2: new commercial airplanes mostly stretching through the end of this
Speaker 2: decade because of robust demand. But there is one travel
Speaker 2: segment that seems a little bit stuck in a holding pattern,
Speaker 2: and that is corporate owned jets so road.
Speaker 1: Bloomberg's Thomas Black earlier this month, he reports on the
Speaker 1: aviation space and noted that even though the number of
Speaker 1: flights operated by the broader private aviation industry so that
Speaker 1: includes charter, fractional, individually owned aircraft managed by third party
Speaker 1: service companies pretty much all the ways that you fly
Speaker 1: around Carrol totally. Yeah, it's almost nineteen percent higher than
Speaker 1: it was back in twenty nineteen, that was the last
Speaker 1: full year pre pandemic year. Company's in house flight departments
Speaker 1: are flying about the same as they did.
Speaker 8: Carol four years ago.
Speaker 4: It's interesting.
Speaker 2: That's according to data from wing exit's Hamburg based provider
Speaker 2: of market data and analysis on the private aviation industry.
Speaker 4: We've got a great.
Speaker 2: Voice on this is back with us is Janiniannarelli. She
Speaker 2: is founder and president of the private aircraft broker Paravian,
Speaker 2: and she really sees daily what is going on, minute
Speaker 2: by minute in the private aviation world. She's here in
Speaker 2: our Bloomberg Interactive Broker studio. Welcome back, How are.
Speaker 4: You delighted to be here.
Speaker 11: Thank you for the invitation.
Speaker 2: It's great to have you here. Tell me what you
Speaker 2: said though, when you walked into the studio and you
Speaker 2: were listening to our segment on the IPO market, which
Speaker 2: seems like it's having a tough time getting going, and
Speaker 2: how that kind of related to your industry.
Speaker 11: Yeah, just take your last guest story and slash IPO
Speaker 11: and insert the word jet.
Speaker 4: What's going on?
Speaker 11: That's a good question. What we have observed throughout the
Speaker 11: course of twenty twenty three the buyers are sitting on
Speaker 11: their hands and they've created excuses, and I would say
Speaker 11: the trade has as well for them quarter over quarter.
Speaker 4: So here we are.
Speaker 11: We're at the end of the year. This should be
Speaker 11: the busiest time of the year in the aircraft trading marketplace,
Speaker 11: and it's relatively quiet.
Speaker 1: Wait, I thought that we saw huge, huge announcements from
Speaker 1: companies like net Jets buying many many Cessna citations for
Speaker 1: example earlier this year. That doesn't count in a.
Speaker 11: Way, no, because that's the fractional share and they need
Speaker 11: to meet demand. Actually, fractional flying is up year over year.
Speaker 11: I want to say the number is somewhere like seven
Speaker 11: point nine percent, whereas private flying is down eight point
Speaker 11: three percent year over year.
Speaker 8: These are how can those things both be true?
Speaker 2: And Thomas Black and his story said flights are fractional operators.
Speaker 2: So we're talking about net Jets, Flexjet. They've increased, have
Speaker 2: increased forty one percent from twenty nineteen levels.
Speaker 1: You're still flying private when you use one of those operators.
Speaker 1: So make the distinction for our audience.
Speaker 11: So the private sector and the corporate sector is whole ownership.
Speaker 11: These are individuals and corporations that go out and acquire
Speaker 11: the asset and the management.
Speaker 4: The crewing. It's the company jet.
Speaker 11: It's the company jet. Where's to fractionalize?
Speaker 4: All the time.
Speaker 11: You're buying a piece of an airplane, and so you
Speaker 11: have access to uplift pretty much on demand, but you
Speaker 11: don't own the whole aircraft and you don't control the.
Speaker 4: Operation of it.
Speaker 1: This is exactly what our own Thomas Black wrote about
Speaker 1: earlier this month. And the question is that I that
Speaker 1: I have for you is is that era kind of
Speaker 1: over when it comes to private ownership. We've seen pushback
Speaker 1: from shareholders about flying private. So now about actually these
Speaker 1: companies owning corporate jets because of the carbon footprint, So
Speaker 1: companies are now not actually owning their jets outright and
Speaker 1: instead using those fractional services which do offer the on
Speaker 1: demand private flying, so the benefits of flying private without
Speaker 1: actually owning that asset.
Speaker 11: So it's a conundrum. I don't think demand has diminished,
Speaker 11: it's just action has diminished. We really don't see people
Speaker 11: pushing away from private jets and looking for other means
Speaker 11: of transportation. It still is the most efficient form of
Speaker 11: moving goods and service goods and people around the country,
Speaker 11: around the world, but they.
Speaker 2: Don't want to own it, not necessarily.
Speaker 11: So I mean, I personally have not experienced people say
Speaker 11: sell the jet because of all the issues that you
Speaker 11: just cited. There are ways to reduce their carbon footprint.
Speaker 11: You know, smart flying, direct flying in the United States
Speaker 11: is going to lead the way. Operators within the United
Speaker 11: States are going to lead the way to that goal
Speaker 11: of twenty fifty. But I mean you brokeer deals, right, correct?
Speaker 11: So how much is your deal flow down this year
Speaker 11: from I don't know what's is it the peak post
Speaker 11: pandemic that you measure against. I'd be curious about that,
Speaker 11: and also where it was maybe twenty nineteen.
Speaker 4: So good questions.
Speaker 11: My business is off significantly, but I attribute it to
Speaker 11: the aircraft that I'm actually offering. I mean, the market's sort.
Speaker 4: Of you don't like your inventory.
Speaker 11: I love my inventory, right, but it's not what people
Speaker 11: will It's not in favor with the market today. The
Speaker 11: most active segment of the business aircraft marketplace, I would
Speaker 11: have to say, is the small jet. That is the
Speaker 11: aircraft that initially led the decline and then started the
Speaker 11: rise back out of the global panel.
Speaker 8: What is this like a six person exactly?
Speaker 11: I put it more in a dollar perspective, but six
Speaker 11: to eight passengers somewhere two to seven million dollars, and
Speaker 11: the aircraft range is going to be anywhere from about
Speaker 11: a thousand nautical miles to fifteen hundred.
Speaker 4: So what don't people want then?
Speaker 9: Is it? Now?
Speaker 4: Yeah? What is it that they don't want?
Speaker 11: It seems to be the category that I would call
Speaker 11: the super mid size and the ultralong range aircraft.
Speaker 8: Why don't they want those?
Speaker 9: It's a good.
Speaker 11: Question, it's a really good question. So first of all,
Speaker 11: if we talk about the ultra long range that that's
Speaker 11: the pinnacle of the marketplace, and the price point for
Speaker 11: those airplanes is anywhere from fifty million on.
Speaker 8: This not be like a Golfstream G six fifty correct, Yes.
Speaker 11: Tim's a little bit into planes, Ah, I can tell.
Speaker 11: So that seems to have fallen out of favor. I mean,
Speaker 11: there are there are buyers out there, and there are
Speaker 11: plenty of inquiries. I mean, if I just look at
Speaker 11: the number of inquiry as I've received, you're to date
Speaker 11: on every single aircraft I offer for sale. It just
Speaker 11: boggles my mind that not one person has stepped up
Speaker 11: to make an offer. Maybe more interesting is let's say
Speaker 11: I get two hundred inquiries over the course of three
Speaker 11: months on an aircraft. My guess is ten percent are
Speaker 11: really going to buy an aircraft, But less than ten
Speaker 11: percent of that ten percent I've actually done.
Speaker 1: Anything forgive me, But do interest rates matter? I mean,
Speaker 1: when we're talking at this type of money, they don't
Speaker 1: matter for real estate, but they matter for at least
Speaker 1: that's what real estate, high end real estate mean.
Speaker 4: Do they finance these deals? Like, Yeah, that's a good question.
Speaker 11: So another good question my personal history is that I
Speaker 11: can count, maybe on two hands, how many people actually
Speaker 11: needed financing throughout my entire.
Speaker 1: Cash to me versus using financing are two different things.
Speaker 1: There are plenty of people who could pay, you know,
Speaker 1: outright for a forty thousand or sixty thousand dollars vehicle,
Speaker 1: but if they get zero percent financing, then they're going
Speaker 1: to take the finance.
Speaker 4: Side exactly that.
Speaker 11: Now, I have a number of prospective buyers that they
Speaker 11: may pay cash outright and then refinance later on. Most
Speaker 11: of them do that with a financial institution that they
Speaker 11: already have a business relationship with. The odd inquiry that
Speaker 11: I may receive for aircraft financing, frankly, is a little
Speaker 11: bit of a red flag for me, because they shouldn't
Speaker 11: be asking me.
Speaker 2: They already should have had that in place, right, It's right,
Speaker 2: they've got their bankers they've got the bank that they've
Speaker 2: been working with for years on everything.
Speaker 11: End qualified, the case comes in everything.
Speaker 4: It's interesting. I'm thinking about our audience.
Speaker 2: So how do you then use what you are seeing
Speaker 2: to maybe tell you what's.
Speaker 4: Going on in the global economy.
Speaker 2: Is it an indicator for you or is it just
Speaker 2: maybe your business, Your industry is going through some changes.
Speaker 11: I would say flip that and say business jets are
Speaker 11: the indicator, and they always have been. Now I think
Speaker 11: we're writing new history and have been since twenty nineteen,
Speaker 11: because you could take the playbook throw it out the window.
Speaker 11: Looking back over twenty three, I was musing over the
Speaker 11: fact that we're going to chalk this year up to
Speaker 11: a year of rebalancing, and I'm wondering if this was
Speaker 11: not the downturn that always follows a great upswing. And
Speaker 11: twenty four, because I'm going to use it to project
Speaker 11: a little bit, is going to be relatively quiet. But
Speaker 11: the driver for that is mostly the presidential election and
Speaker 11: the uncertainty that comes along with who will be our
Speaker 11: new administration and what policies will go into effect.
Speaker 1: Well, President Trump was pretty friendly to private jets.
Speaker 4: To a certain degree.
Speaker 1: I mean some of those there were tax breaks that
Speaker 1: were given to people who used private jets during the
Speaker 1: coronavirus pandemic, for example.
Speaker 4: Well, that's true.
Speaker 11: The bonus appreciation was a huge driver to motivate people
Speaker 11: to buy aircraft.
Speaker 4: Twenty seconds.
Speaker 2: What are you worried about in terms of the presidential
Speaker 2: outcome and in terms of regulatory or overset?
Speaker 4: And I've got to ask you to be very quickly.
Speaker 11: I'm mostly concerned about tax implications. There's a lot of
Speaker 11: those expiring in twenty five. That's really the bigger concern.
Speaker 2: Really fascinating, right, you can talk about this al, I know,
Speaker 2: I know, it's a world we love talking about. We
Speaker 2: didn't even get into evtalls, which I know is a
Speaker 2: big thing. Next time, come back soon. Love to continue
Speaker 2: the conversation. Janine Jannarelli, founder president of par Avion, a
Speaker 2: private aircraft broker. You can check out some of the
Speaker 2: stuff that she is involved in on her website here
Speaker 2: in studio.
Speaker 4: Have a good holiday.
Speaker 3: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 3: live weekday afternoons from three to six Eastern on Bloomberg Radio,
Speaker 3: the Bloomberg Business app and YouTube. You can also listen
Speaker 3: live on Amazon Alexa from our flagship New York station,
Speaker 3: Just Say Alexa playing Bloomberg eleven thirty telling you.
Speaker 12: Stop.
Speaker 2: Yeah, that's right, everybody. Santa Claus Is come to town. At
Speaker 2: the most wonderful time of the year. The Aris Cris
Speaker 2: Bloomingdale's has its holiday window display up. People are decorating
Speaker 2: their Christmas trees and decking the halls, and a large
Speaker 2: team of Santa's are coming to town, appearing at malls
Speaker 2: and retail outlets around the country.
Speaker 4: He's everywhere and sometimes she's everywhere. Explain that in a moment.
Speaker 1: That's true. Hey, this year things are a little bit
Speaker 1: different than years past, though. Demand for Santa's is actually
Speaker 1: far exceeding supply, at least according to our next guest,
Speaker 1: who knows quite a bit about goings on at the
Speaker 1: Old North Pole. Mitch Allen is the founder and head
Speaker 1: elf of Higher Santa It's a Santa Claus talent and
Speaker 1: staffing agency, and what it does is it places Santa's
Speaker 1: at events, parties, malls and more all over the US.
Speaker 1: Mitch joins us on a zoom from South Lake, Texas. Mitch,
Speaker 1: good to have you with us this afternoon. So the
Speaker 1: Santa Biz. You went pretty well in twenty twenty three.
Speaker 13: No, it sure is. We've had more demand for Santa
Speaker 13: Claus entertainers than we've ever had before, and all types
Speaker 13: of it, whether it be a home office, retail establishment, malls.
Speaker 13: Everyone wants to associate themselves with Christmas through the use
Speaker 13: of Santa.
Speaker 4: Totally get it. I'm also a fan of Healfa on
Speaker 4: the Shelf. Just going to put it out there.
Speaker 2: Hey, Mitch, I mean, so our numbers up, demand is
Speaker 2: up from what pre pandemic levels, like, what is I
Speaker 2: don't know, Is it just been You've been seeing organic growth?
Speaker 2: Has there been a recent peak? Give us an idea,
Speaker 2: give us some perspective.
Speaker 8: Sure.
Speaker 13: So here at Hiresanta dot com, we've seen the demand
Speaker 13: for Santa's people reaching out to us is up over
Speaker 13: thirty six percent over last year, and last year was
Speaker 13: record demand, even higher than pre pandemic. And that's turned
Speaker 13: into more events. Our actual events that we've booked is
Speaker 13: up over one hundred and fifty two percent over last
Speaker 13: year and many times that over pre pandemic levels. So
Speaker 13: people are using it. And what's interesting is we don't
Speaker 13: necessarily have a Santa index, but that's what I'm calling it,
Speaker 13: that small and medium sized businesses are really using Santa
Speaker 13: this year. I think that's going to be a blockbuster
Speaker 13: year for small and medium sized businesses. If the demand
Speaker 13: for Santa Claus at these establishments is any indication.
Speaker 8: How much does it cost to rent to Santa?
Speaker 13: Yeah, so it really depends date, time, location, and how
Speaker 13: long you need Santa.
Speaker 1: Okay during the Christmas season, I'm not talking about it.
Speaker 8: I'm not talking about it.
Speaker 4: Your life Santa here, everybody's invited. We're talking about four
Speaker 4: hours I need Santa.
Speaker 13: So if you need sand to come your home or
Speaker 13: office for just a couple of hours, you're talking about
Speaker 13: two to four hundred dollars per hour for a Santa
Speaker 13: Claus entertainer. Now, if you do it for a mall,
Speaker 13: the hourly rate is obviously much less.
Speaker 4: So do Santa's like do those who really look like Santa?
Speaker 2: Sorry, kids, I hope we don't know the kids. You know, man,
Speaker 2: we should have done a disclaimer. If there are kids
Speaker 2: in the room, get them out of the room.
Speaker 4: I'm sorry for everybody in the control room. Yes, yeah,
Speaker 4: there is a Santa Claus.
Speaker 8: Okay, I don't know where you were going.
Speaker 2: I've gotta be really careful, but Mitch, I mean, so
Speaker 2: for those who you know, really look like Chris Kringle,
Speaker 2: do they get more money?
Speaker 13: Absolutely so. At Hires, Santa are Santas, we like to say,
Speaker 13: have a real beard, a real belly, and a real jolly.
Speaker 13: You know, they've got that twinkle in their eye, that
Speaker 13: love and joy of Christmas in their heart, and they
Speaker 13: really do personify the image and personality of Santa Claus.
Speaker 1: What about the demands the that you're getting right now
Speaker 1: from different people across the country who are saying, well,
Speaker 1: you know what, I don't actually want a Santa that
Speaker 1: looks or sounds like the traditional Santa Claus. We're looking
Speaker 1: for more diversity when it comes to.
Speaker 4: Sand don't a Christine Clause rather than yeah, what do
Speaker 4: you what?
Speaker 8: Are you getting requests for Chris Kringle.
Speaker 13: So, diversity is one of the big trends that we're
Speaker 13: seeing in the Santa Claus entertainment space. You know, we
Speaker 13: have a number of black Santa Claus entertainers as well
Speaker 13: as Spanish speaking Santa's people are wanting to have a
Speaker 13: Santa that looks and sounds like that.
Speaker 8: They do.
Speaker 13: We even have a deaf Sanda that we send around
Speaker 13: the country. He's entirely deaf and it speaks asl American
Speaker 13: Sign language. So we've seen the demand for We've seen
Speaker 13: the demand for diverse Sanna's really grow up. And as
Speaker 13: you pointed out, we actually have a couple of female
Speaker 13: Sanna's who are terrific. You would not know that they
Speaker 13: are females. They look and act like Santa and are
Speaker 13: really great entertainers.
Speaker 2: You mean, so they're not actually being a female Sanna,
Speaker 2: they're actually being a female that is pretending to be
Speaker 2: a male Sanna.
Speaker 8: That's right.
Speaker 13: You think of like tim Allen glue on beard. You
Speaker 13: would not know unless you actually saw them outside this
Speaker 13: suit that they were not actually Santa. But yeah, diversities
Speaker 13: are one of the big friends. We also see experiences.
Speaker 13: People just don't want to have their traditional picture with
Speaker 13: their child on the knee of Santa. They want to
Speaker 13: have an entire experience, and so many of our clients
Speaker 13: are really increasing the experience where there's lots of sort
Speaker 13: of instagrammable pictures and other types of experiences cocoa, hot
Speaker 13: chocolate and those types of things along with.
Speaker 12: The with Santa.
Speaker 4: All Right, Mitch, is there a Santa School?
Speaker 13: You know, this is one of the surprising things that
Speaker 13: people don't realize. There is a vibrant Santa Claus community
Speaker 13: out there, whether it be online or in person. Lots
Speaker 13: of organizations. There's Santa schools and conventions around the country,
Speaker 13: and that's where we go and recruit our Santa claus
Speaker 13: is for higher Santa dot Com.
Speaker 1: Hey, how seasonal is your business?
Speaker 13: Well, the actual delivery of our service is extremely seasonal,
Speaker 13: about six or seven weeks, but it's a full year
Speaker 13: business at Hire Santa. The first half of the year
Speaker 13: is really about seals. It's getting those large contracts, those malls,
Speaker 13: those retail establishments we're working and then we're trying to
Speaker 13: get those contracts as well as we're trying to get
Speaker 13: more Santas. This last year we added over eleven hundred
Speaker 13: Santa Claus entertainers to our database alone. And so it
Speaker 13: is full season, but really it's go time. It's fourth quarter,
Speaker 13: during the last part of November and of course all
Speaker 13: of December.
Speaker 2: All right, So what's interesting is you shared with us
Speaker 2: some research that you guys have done, and some of
Speaker 2: the Santa's talk about their best experiences of twenty twenty two,
Speaker 2: which are incredibly heartwarming, But I want to go to the.
Speaker 4: Worst experiences of twenty twenty two. What are some of
Speaker 4: the rough experiences?
Speaker 2: We have about forty five fifty seconds left, just give
Speaker 2: us a couple.
Speaker 13: Well, you know, the rough experiences are really when Santa
Speaker 13: gets sick or injured. You know, every single year for
Speaker 13: us we lose Santa Claus entertainers. You can imagine, they're
Speaker 13: older gentlemen, they're susceptible to COVID and negative outcomes with that,
Speaker 13: or we've had this year alone, Santa's already in a
Speaker 13: car accident, a wife got sick. So those are really
Speaker 13: heart breaking themselves as well as you really get the
Speaker 13: touching things whenever our child is wanting something, they're sick,
Speaker 13: or their parents are sick and they're wishing something for them.
Speaker 13: But it's a wonderful time, and Santa's really enjoys spreading
Speaker 13: that love and joy of Christmas.
Speaker 2: I thought you were going to tell me about the
Speaker 2: Santa that flubbed the lyrics to Frosty the Snowman at
Speaker 2: a daycare. That's what I was opening for a little levity,
Speaker 2: A little levity.
Speaker 13: Yeah, yeah, we get that a lot too. And you know,
Speaker 13: we've actually been on air and asked somebody Santas to
Speaker 13: you know, name the reindeer, and they just froze.
Speaker 8: A lot of them.
Speaker 2: Mitch Alan, Merry Christmas, Happy Holidays, Founder and head elf
Speaker 2: of Hire Santa joining us from Texas, where there Santas.
Speaker 3: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 3: live weekday afternoons from three to six Easter on Bloomberg Radio,
Speaker 3: the Bloomberg Business app and YouTube. You can also listen
Speaker 3: live on Amazon Alexa from our flagship New York station
Speaker 3: Just Say Alexa, playing Bloomberg eleven thirty.
Speaker 2: Every now and then a story hits so hard it
Speaker 2: gives you the chills, and this is certainly one of them.
Speaker 2: It's about deep fake pornography images that have been digitally
Speaker 2: manipulated to depict an individual doing something they did not like,
Speaker 2: in this case, posing naked, and about a group of
Speaker 2: young women in a New York City suburb horrified to
Speaker 2: learn that their photographs had been manipulated and posted online,
Speaker 2: and they ultimately took matters into their own hands.
Speaker 1: It's the cover of the new issue of Bloomberg Business Week.
Speaker 1: It's out on newsstands later this week, but you can
Speaker 1: read the story now on the Bloomberg terminal and at
Speaker 1: Bloomberg dot com slash BusinessWeek. The story by Bloomberg News
Speaker 1: investigative reporter Olivia Carville and a Bloomberg News cybersecurity reporter
Speaker 1: Margie Murphy, both of whom join us now. Olivia here
Speaker 1: in our Bloomberg Interactive Broker studio. Margie joins us from
Speaker 1: our San Francisco bureau. Margie, excuse me. Also, here's the
Speaker 1: editor of Bloomberg Business Week, Joe Weber here in our
Speaker 1: Bloomberg Interactive Broker studio. Wow, Joel, How did this story
Speaker 1: get on your radar?
Speaker 8: Get on their radar?
Speaker 12: Olivia and Margy pitched it, and from the moment they
Speaker 12: brought the idea to us, we were mesmerized and then
Speaker 12: more honestly horrified, and we felt like it was a
Speaker 12: story that we had to do, and we needed to
Speaker 12: do it on the cover to make sure that the
Speaker 12: world found out about it, because it is perhaps frightening
Speaker 12: sneak peek at the.
Speaker 8: Future and the lack of.
Speaker 12: Real common sense and laws about where generative AI might
Speaker 12: possibly take us, and the beginning of the story is
Speaker 12: like your worst nightmare, and Olivia, why don't you take
Speaker 12: us there? Because it's ultimately where.
Speaker 4: There's sort it's about Cecilia.
Speaker 14: So the story starts in Livettown, Long Island, which is
Speaker 14: an interesting place to start. This is the birthplace of
Speaker 14: American suburbia, the first post War US suburb, And this
Speaker 14: group of teenage girls who had all attended the same
Speaker 14: high school, discovered that their photographs that they'd posted on
Speaker 14: social media had been manipulated into deep fake pawn that is,
Speaker 14: fake pornography created using deep learning models or artificial intelligence.
Speaker 14: And Cecilia Luke, who opens the story, discovered this while
Speaker 14: sitting in a car in a parking lot and a
Speaker 14: strip mall and Livettown. And as she's looking through this
Speaker 14: weird site that a friend had sent her who had
Speaker 14: also discovered the photos, she sees images that horrified, disgusted,
Speaker 14: really scared her. These are photos which showed her being
Speaker 14: digitally undressed, very graphic images. Content on the sex site
Speaker 14: included people posting about her being raped and murdered. In
Speaker 14: some of the cases the images she was just a child,
Speaker 14: she was five years old. And she also saw photos
Speaker 14: of friends of hers who attended the same school, and
Speaker 14: it was that night New Year's Eve of twenty twenty
Speaker 14: that news of this website and these deep fake images
Speaker 14: really spread across the suburb in Long Island.
Speaker 4: Not them at all.
Speaker 2: In other words, those images obviously altered and they knew it,
Speaker 2: like they went through it, and they're like but.
Speaker 12: Not obvious to anyone else exactly. And that's where the
Speaker 12: horrifying part comes in.
Speaker 8: Go ahead of it.
Speaker 14: Yeah, I was gonna just say that for the woman now,
Speaker 14: because they are twenty two to twenty three the time
Speaker 14: they were eighteen or nineteen years old. And the scariest
Speaker 14: thing was looking at these photos where they had been
Speaker 14: undressed and realizing that they look real enough that anybody
Speaker 14: else who sees them is going to believe it really
Speaker 14: actually is their bodies. So for Cecilia, it was looking
Speaker 14: at this nude image and knowing that the breasts weren't hers,
Speaker 14: but also realizing that most people who saw this image
Speaker 14: would think that they were.
Speaker 2: So Margie, let's bring you into this. An incredible story,
Speaker 2: so not a problem. You call the police and you
Speaker 2: say this isn't me, and it's done, and they take
Speaker 2: it down, right.
Speaker 4: It's that easy. I'm being sarcastic.
Speaker 9: Yeah, not quite at the moment.
Speaker 10: There's no federal law prohibiting deepfake pornography. So the challenge
Speaker 10: that these girls had were, you know, they were so
Speaker 10: incredibly brave. They did this investigation mostly on their own,
Speaker 10: figuring out exactly who had created these images of them,
Speaker 10: and they took them to the police, and there was
Speaker 10: very little legal recourse for them to get justice. And
Speaker 10: in fact, it was only after searching through everything that
Speaker 10: Patrick Carey, the former classmate who'd been posting these images,
Speaker 10: looking through everything that he'd posted, they'd seen that he'd
Speaker 10: actually accidentally posted real child sexual abuse material and that's
Speaker 10: what they got him on. It wasn't on the deep
Speaker 10: fake pornography at all. And that's an issue that's a
Speaker 10: frustration being felt by women around the world. Even though
Speaker 10: certain states in the US do have laws around deep
Speaker 10: fake pornography, it's just so patchwork across the US and
Speaker 10: internationally there are issues with the law as well, because
Speaker 10: the technology has just advanced just at such a breakneck speed,
Speaker 10: just lawmakers haven't been able to keep up with it.
Speaker 12: What about the companies in the platforms on the AI front, Like,
Speaker 12: what did we learn about what they can and can
Speaker 12: do or aren't willing to do.
Speaker 9: Margie right.
Speaker 10: So the issue with a lot of the technology that's
Speaker 10: around now and that from our reporting we saw was
Speaker 10: really popular for creating deep fake pornography and even child
Speaker 10: deep pornography, a lot of those tools are open source.
Speaker 10: So there's this kind of divide in Silicon Valley. You've
Speaker 10: got the developers who've created this really incredible image generation
Speaker 10: technology that you know, they want to be used for good,
Speaker 10: who believe that it should be kept out in the
Speaker 10: open for everyone to use and not gate kept by
Speaker 10: like big tech platforms who have typically provided services, and
Speaker 10: you know, you might enter in a prompt and you
Speaker 10: get your image back. Whereas with the open source technology,
Speaker 10: anyone can go and interact.
Speaker 9: With the code. Therefore you can play with it.
Speaker 10: And even if a developer was to put a guardrail
Speaker 10: in place, like prohibiting adult content, it's relatively easy for
Speaker 10: someone to go in and change that. And so that's
Speaker 10: opened this Pandora's box. We've got all these open source
Speaker 10: technologies that even when a developer realizes a bit are
Speaker 10: being used for bad, the cats out of the bag
Speaker 10: and people are already exploiting it Olivia.
Speaker 1: The story starts in Levittown, It's centered around Levittown, but
Speaker 1: it spans the globe. What happens in New Zealand, what's
Speaker 1: going on with a former police officer named will Wallace.
Speaker 14: I think that was one of the most remarkable parts
Speaker 14: of reporting the story is that it really is a
Speaker 14: dual narrative. You have the girls in Leavittown investigating the
Speaker 14: predator who is posting images of them online on the
Speaker 14: sex site that an ex cop in New Zealand has
Speaker 14: discovered has already been posting images deep faked images of
Speaker 14: New z woman as well, and so he starts an
Speaker 14: investigation into the man behind this website. And it's very
Speaker 14: rare in journalism, or at least in my own career,
Speaker 14: where you have a story that has this jewel narrative
Speaker 14: where you can weave them together and see an investigation
Speaker 14: unfolding in suburban New York and at the same time
Speaker 14: in New Zealand, of all places, which happens to be
Speaker 14: where I'm from, there's an ex cop trying to work
Speaker 14: out who was behind this website. I remember one night
Speaker 14: I was driving back from Levettown to New York and
Speaker 14: I called Margie to talk to her about an interview
Speaker 14: i'd just done with Anna, who was in the story,
Speaker 14: and ultimately discovered the identity of Patrick Carey who been
Speaker 14: posting the images, and took that evidence to police. And
Speaker 14: I called Margie. I was excited because finally we had
Speaker 14: this key piece of the story to tell her about it.
Speaker 14: And that's when she responded, saying that she had discovered.
Speaker 9: That there was also this whole other part to the.
Speaker 14: Story where there were these vigilantes, this movement trying to
Speaker 14: track down who was behind this website, and there was
Speaker 14: an ex detective from New Zealand who had been leading
Speaker 14: this fight to kind of combat deep deep fake pawn
Speaker 14: and to take down this deplorable internet sex site.
Speaker 8: So where do we go from here?
Speaker 12: Because, as you mentioned, there's no federal law prohibiting any
Speaker 12: of this, Marguie, But what happened in New York State.
Speaker 14: So in New York State, we have seen the District
Speaker 14: Attorney in Nassau County, which is where this case unfolded,
Speaker 14: actually put forward or introduced new legislation trying to target
Speaker 14: deep fakes. The problem is that, you know, what do
Speaker 14: you focus on is it the companies that are releasing
Speaker 14: this technology. Is it the regulators who can't catch up
Speaker 14: to this technology, is it's being rolled out? Or is
Speaker 14: it the predators and bad actors like Patrick Carrey who
Speaker 14: are abusing it?
Speaker 2: And and yes, no, and I do also wonder and
Speaker 2: MARGI let's bring you back in. I mean in terms
Speaker 2: of police and law enforcement, you know how high up
Speaker 2: on the list is there in terms of prioritizing the
Speaker 2: things that they focus on.
Speaker 12: Yeah.
Speaker 9: Absolutely.
Speaker 10: One thing that was really interesting about Will Wallace, who
Speaker 10: you know, you guys have just mentioned. He obviously deeply
Speaker 10: involved in this website. It was a passion project of
Speaker 10: his to kind of find out, you know, find help victims,
Speaker 10: find the people that were posting these pictures, but also.
Speaker 9: Uncover who the admin of the website was.
Speaker 10: But because he has a background in the police, he
Speaker 10: has this he really understands what it takes to be
Speaker 10: able to actually gather evidence, bring a good tip to
Speaker 10: law enforcement, and.
Speaker 9: See that actually be followed through.
Speaker 10: And he would say, he would tell me how frustrated
Speaker 10: he was every time he would give a tip to
Speaker 10: law enforcement in different local law enforcements all around the
Speaker 10: world and not hear anything back, But he also understood
Speaker 10: that it's so challenging when there are you know, there
Speaker 10: are certain skill sets you need to be able to
Speaker 10: investigate this kind of crime. There needs to be better
Speaker 10: education so that when a victim comes forward in the
Speaker 10: first person they're speaking to, that they understand that, yes,
Speaker 10: there hasn't been a physical crime, but this cyber crime
Speaker 10: is just incredibly traumatic and super damaging, and that person
Speaker 10: is a true victim.
Speaker 9: And additionally, you know, when the laws aren't.
Speaker 10: Robust, laws aren't in place for prosecutors to deal with
Speaker 10: people once they've found a suspect, that all is just
Speaker 10: it's incredibly hard for police officers to do their work.
Speaker 2: When Patrick Carey, when it finally did come down on him, Olivia,
Speaker 2: Tim and I were talking about this before we got going,
Speaker 2: before you guys came into the studio. So you ultimately
Speaker 2: was sentenced six months in prison, ten years probation, lifetime
Speaker 2: status as a sex offender, can on a smartphone anymore,
Speaker 2: or any device with a camera, or be withinred a
Speaker 2: thousand feet of a school or a playground. Six months,
Speaker 2: but he was out in four for good behavior. I
Speaker 2: don't seen in a good behavior here that to me
Speaker 2: is not even a slap on the rest. So it
Speaker 2: just kind of speaks to law enforcement not really necessarily
Speaker 2: respecting the severity because you talked to these women and
Speaker 2: they definitely felt harm and pain and there was an impact.
Speaker 14: Oh yeah, there's no doubt about that. I mean a
Speaker 14: lot of these women have sort out therapy since this.
Speaker 14: One lost twenty pounds from strees, one dropped out of college.
Speaker 14: Three I talked to Carrie Pipper spray in their handbags,
Speaker 14: and two carry knives with them. Now, they're so scared
Speaker 14: of what was done on the website, not only what
Speaker 14: Kerry was posting, but the hundreds, if not thousands of
Speaker 14: strangers in the world who saw those photos and tried
Speaker 14: to reach out to them. One of the craziest parts
Speaker 14: about this case is that Kerrie also included the girl's names,
Speaker 14: addresses social media information, so they had these awful messages
Speaker 14: and phone calls coming through them, people harassing them for months,
Speaker 14: and one of the threads on the site had over
Speaker 14: thirty thousand views. That's thirty thousand people looking at a
Speaker 14: fake porn image of you where they're writing about you
Speaker 14: being raped and murdered. You know, the fear was real
Speaker 14: when I was talking to these young women, and there
Speaker 14: is a deep seated frustration and live itt town from
Speaker 14: their families, teachers at the school, the girls themselves. That
Speaker 14: Carrie only received six months. He was out within four
Speaker 14: months and he's back in the neighborhood now.
Speaker 12: It's amazing, I think the greater thing here And obviously
Speaker 12: the circumstances of this particular story are totally frightening, but
Speaker 12: it also does just speak to this greater challenge that
Speaker 12: we're going to be living through.
Speaker 3: Now.
Speaker 12: We have a technology that the world is not prepared for,
Speaker 12: and this shows you how unprepared we are for it.
Speaker 12: And sure there's a lot of good that can come
Speaker 12: from it, but there's also your total nightmare. And you know,
Speaker 12: props to Olivia and Marty for being able to tell
Speaker 12: this story.
Speaker 2: Well and coming off of Open AI and the debate
Speaker 2: within that company about the ethics and the concerns about
Speaker 2: generative AI, where at.
Speaker 12: Almost the perfect time for Aline, you did it once again.
Speaker 12: It does they did it once again.
Speaker 2: You guys did do it once again. Olivia Carvell investigative
Speaker 2: reporter at Bloomberg News. Margy Murphy, she's a cybersecurity reporter
Speaker 2: at Bloomberg News. Incredible story, the cover story, most read,
Speaker 2: the Bloomberg Big Take, and.
Speaker 4: Our thanks to Jill Weber. This is Bloomberg.
Speaker 2: Brother Marc, a journal How about you let me drive?
Speaker 3: No, no, no, no, honey, please, I'll do.
Speaker 7: I want to drive.
Speaker 15: It's a question.
Speaker 3: This is the Drive to the Clothes Well on Bloomberg Radio.
Speaker 2: All right, everybody getting ready to wrap up the Wednesday trade.
Speaker 2: Just about seventeen and a half minutes left in today's
Speaker 2: trading session. We have got when I look at the
Speaker 2: S and P five hundred, kind of half of the
Speaker 2: major industry groups are higher, half are lower. But it
Speaker 2: really is once again about what's going on in the
Speaker 2: treasury trade because we are down again.
Speaker 4: I'm looking at a ten year you know, four point
Speaker 4: twenty six. Who to thunk?
Speaker 1: I mean, we were talking a tenure at five percent
Speaker 1: just a few weeks ago.
Speaker 4: Six percent. People were talking about, you know, for even
Speaker 4: like you know, the current.
Speaker 1: We should have Katiekminski back on and see if she's
Speaker 1: still sticking to that.
Speaker 4: We should bring her back. That's a really great idea.
Speaker 2: All right, let's see what our Drive to the closed
Speaker 2: guest has to say about all of it, Amy Magnota.
Speaker 2: She's co CIO at the independent investment advisory firm Ata
Speaker 2: Gino's Capital. She is on Zoom from Pennsylvania. Amy, good
Speaker 2: to have you here with us this yield trade.
Speaker 4: Let's go there.
Speaker 2: Would you go as far to say we are at
Speaker 2: peak yield on the US Treasury yield curve? And uh,
Speaker 2: you know, and does it mean that ultimately we get
Speaker 2: to some kind of recession? Does the economy slow down
Speaker 2: that much?
Speaker 15: Our view is that we're expecting the economy is growing
Speaker 15: pretty solidly. So we had the GDP revision come in
Speaker 15: today up to five point two percent real GDP growth
Speaker 15: in the third quarter, and we're running about two percent
Speaker 15: for the fourth quarter, So that's pretty solid, especially given
Speaker 15: what you know the FED has done to try to.
Speaker 4: Bring down inflation.
Speaker 15: So our view is more in mid twenty twenty four
Speaker 15: that we might hit some sort of soft patch or
Speaker 15: mild recession with just given the lag effects of these
Speaker 15: interest rate hikes on what that means for the consumer.
Speaker 15: And then we also have an unemployment and then we
Speaker 15: have a stimulus that's kind of run out.
Speaker 1: Amy Magnotta, what is the uh evy vidents that you
Speaker 1: see today? End of November, end of being almost the
Speaker 1: end of a pretty incredible rally in bonds and stocks
Speaker 1: so far for the month of November. What's the evidence
Speaker 1: that you see out there right now to lead to
Speaker 1: your conclusion that we'll see some softness in the second
Speaker 1: half of next year.
Speaker 15: I think there's some weakness, so our view just to
Speaker 15: be clear from now to kind of year end early January.
Speaker 15: We're still pretty positive on the equity markets, and a
Speaker 15: couple of reasons for that. Seasonality is very strong. November
Speaker 15: December tend to be very strong periods for equity market. Returns,
Speaker 15: breasts been pretty solid, momentum has been building, and credit
Speaker 15: spreads have been making new lows. So I think that's
Speaker 15: all very supportive for equity markets for the next eight
Speaker 15: eight weeks or so. I think our concern is more
Speaker 15: as we hit twenty twenty four, could see some weakness
Speaker 15: in the consumer, could see some you know, there's a
Speaker 15: number on the confidence a consumer Confident and survey yesterday
Speaker 15: that job's hard to get increased a little bit, so
Speaker 15: we could see some maybe softening there and the employment
Speaker 15: in the labor market, and maybe some weakening in the
Speaker 15: consumer as we get through to twenty twenty four.
Speaker 2: You know, it's funny, it's interesting to listen to you,
Speaker 2: and I feel like it's kind of you know, you
Speaker 2: hear it even among the FED speakers.
Speaker 4: There's not just one narrative. Some of those FED.
Speaker 2: Speakers that we are just even hearing over the last
Speaker 2: couple of days, some are saying, Okay, we're good. You know,
Speaker 2: we think we're done the bets we die and they're saying, yah,
Speaker 2: maybe not that inflation isn't weird it to'd be I'm
Speaker 2: hearing a lot it. I's could in your conversation and
Speaker 2: I get it because I think, as we talked with
Speaker 2: our Mike McKee, it's not an exact science in terms
Speaker 2: of getting of managing the.
Speaker 4: Economy if it doesn't have a ton of tools.
Speaker 2: And like I said, it's not like you just step
Speaker 2: on the brake and everything stops. There are delayed effects
Speaker 2: and cumulative effects. So having said that, you have conviction
Speaker 2: that maybe stocks continue to rally into this year, what
Speaker 2: else do you feel like you have strong conviction about
Speaker 2: when it comes to the investment environment.
Speaker 15: So we're as I mentioned, we're pretty positive on equity markets.
Speaker 15: There's some other areas where when you look at equity markets,
Speaker 15: you're to dates certainly been driven by the index returns
Speaker 15: kind of mask underneath it's been driven by large cap
Speaker 15: megacap cup growth companies. So we're finding some opportunity in
Speaker 15: other areas as well, Like what so US infrastructure is
Speaker 15: one area that we like today. We've had the Infrastructure
Speaker 15: Investment and Jobs Act in twenty twenty one, some allocation
Speaker 15: to infrastructure projects in the Inflation Reduction Act last year,
Speaker 15: and that money is just really starting to be allocated
Speaker 15: and spent. So we think that's an attractive area.
Speaker 2: What specifically within it? So what specifically within infrastructure and
Speaker 2: the way.
Speaker 15: We allocate portfolio, So we're acid allocators and we build
Speaker 15: you know, total portfolio solution for our clients. So we're
Speaker 15: going to allocate to a broad based ETF that's targeting
Speaker 15: companies that can benefit from from that increase in infrastructure spend.
Speaker 1: That's an interesting thought on macro, on macro trends. What
Speaker 1: are some of the other macro trends in where you're
Speaker 1: allocating capital.
Speaker 15: Japan is another theme that we like today in Japanese equities.
Speaker 15: A couple of reasons for that. Fundamentals have been improving
Speaker 15: earnings growth is improving a lot of the shareholder friendly
Speaker 15: policies that companies that we've been talking about for a
Speaker 15: number of years are really getting put into play in Japan.
Speaker 15: So that's also positive. Relatively loose monetary policy compared to
Speaker 15: some of the rest of the globe, and valuations are
Speaker 15: pretty attractive, so that's another area where we liked. We've
Speaker 15: seen the dollar sell off a little bit here more recently,
Speaker 15: which could benefit international equities.
Speaker 2: Yeah, and then the ni kid definitely has had quite
Speaker 2: you know, a bounce back certainly this year, certainly from
Speaker 2: some of the lows we saw earlier this year. When
Speaker 2: you talk about Japanese equities by the broader market or again,
Speaker 2: do you start to get picky about some specific sectors
Speaker 2: within Japan.
Speaker 15: For us, again, this theme we feel is pretty broad based,
Speaker 15: so we're going to allocate more broadly through a broad
Speaker 15: based ETF in the Japanese equity markets.
Speaker 2: Natural resources also a favor we just a favorite of yours.
Speaker 2: We've just got about forty five seconds left here. What
Speaker 2: specifically when you think about natural resources.
Speaker 15: Sure, I think another area of the market that is
Speaker 15: attractably valued relative to the broad SMP five hundred companies
Speaker 15: there again better capital allocators. More recently, we still think
Speaker 15: some structural supply demand that's favorable, and then more short
Speaker 15: term with some turmoil in the Middle East might also
Speaker 15: cause a problem. And then just the regulatory environment is
Speaker 15: pretty tight for energy related companies and we think that's
Speaker 15: a positive.
Speaker 2: Does that mean like the major integrated oil companies, the drillers,
Speaker 2: just real quickly, okay, yes, so you like the big names,
Speaker 2: the household names, yes.
Speaker 15: The larger and so again we're allocating through a broad
Speaker 15: basingf but about eighty percent of that is energy companies.
Speaker 2: All right, Good to know, Good to know, Amy Magnotta,
Speaker 2: she is Cocio at Atha Ginos Capital. She's joining us
Speaker 2: on zoom from Pennsylvania.
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