Latest / Bloomberg Intelligence / Markets, SCOTUS, Crypto, And Real Estate (Podcast)

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Markets, SCOTUS, Crypto, And Real Estate (Podcast) · Bloomberg Intelligence

• 0:00
  Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney. Alongside
• 0:04
  Speaker 1: my co host Matt Miller. Every business day we bring
• 0:06
  Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
• 0:11
  Speaker 1: with essential market moving news. Find the Bloomberg Markets podcast
• 0:15
  Speaker 1: called Apple Podcast or wherever you listen to podcasts, and
• 0:18
  Speaker 1: at Bloomberg dot com slash podcast. Let's bring an Anastasia.
• 0:22
  Speaker 1: I'm rosso chief's chief investment strategist for I Capital. Anastasia.
• 0:26
  Speaker 1: What the first half of the year plus declining SMP.
• 0:30
  Speaker 1: We've got double digit declines and the Bloomberg's corporate bond
• 0:34
  Speaker 1: indext treasury bond indext, the sixty forty portfolio is dead.
• 0:38
  Speaker 1: What do we do in the second half? Yeah, well,
• 0:42
  Speaker 1: it has been a very very dell difficult and challenging start.
• 0:46
  Speaker 1: You write, it's sixty forty portfolios down almost se year today,
• 0:51
  Speaker 1: so it's really been um a tough start. But I
• 0:54
  Speaker 1: do think as a result of that, a lot of
• 0:57
  Speaker 1: things that it needed to correct did correct in the
• 1:00
  Speaker 1: first half of the year. And when you think about it,
• 1:02
  Speaker 1: we did a lot of heavy lifting. We came into
• 1:04
  Speaker 1: the year thinking we might get three rate hikes from
• 1:06
  Speaker 1: the FED and instead we're gonna get to three percent
• 1:09
  Speaker 1: or higher on the FED funt rate by the end
• 1:11
  Speaker 1: of the year. So that's a huge pivot that needed
• 1:14
  Speaker 1: to happen, and as a result, we needed to see
• 1:17
  Speaker 1: the reset and valuations. But we have seen that. If
• 1:19
  Speaker 1: you look at the NASTAC evaluation, the p went from
• 1:21
  Speaker 1: thirty five times to two times or so today, so
• 1:25
  Speaker 1: that's a significant correction. We've seen the crypto craze that
• 1:29
  Speaker 1: you know it was alive, and while at the tail
• 1:31
  Speaker 1: end of UM take take a big leg lower and
• 1:35
  Speaker 1: I think some of that needed to happen as well,
• 1:37
  Speaker 1: that froth needed to come out. So as a result,
• 1:41
  Speaker 1: as I think about the second half of the year,
• 1:43
  Speaker 1: I do still think we're not out of the woods
• 1:45
  Speaker 1: yet and there's gonna be challenges and we could talk
• 1:47
  Speaker 1: about some of this. I think something's may break. But
• 1:50
  Speaker 1: having said that, we're not a forty seven hundred anymore.
• 1:53
  Speaker 1: We're thirty seven on the SMP and if we would
• 1:56
  Speaker 1: go down to thirty so that might be justified by
• 2:00
  Speaker 1: multiples and earnings, that's still a lot less down to
• 2:03
  Speaker 1: go that where we started the year, well, that's still
• 2:05
  Speaker 1: higher than where we were when the COVID crisis forced
• 2:10
  Speaker 1: governments around the world to shut down completely their economies.
• 2:14
  Speaker 1: I mean, let's not forget how serious that was. Right, Um,
• 2:19
  Speaker 1: it's it's been a bad quarter for the sixty portfolio,
• 2:23
  Speaker 1: but last year was aces We went from the end
• 2:29
  Speaker 1: at the end of one after a global pandemic. I mean,
• 2:32
  Speaker 1: was that justified? Well, I think it was at the time, perhaps, right.
• 2:37
  Speaker 1: I mean, there was nothing to stop it because the
• 2:39
  Speaker 1: FED was incredibly easy. We've had zero percent interest rate
• 2:43
  Speaker 1: and people feel comfortable taken on risk. The beta trade
• 2:47
  Speaker 1: was very much alive and well, and you know, justified
• 2:49
  Speaker 1: by where the FED was and the risk appetite that
• 2:53
  Speaker 1: was there. But it's certainly not justified today. But I
• 2:56
  Speaker 1: would make the point is I don't think we need
• 2:58
  Speaker 1: to go to where we were just during the pandemic
• 3:01
  Speaker 1: or just coming out of the pandemic. Because the reason
• 3:04
  Speaker 1: I sort of circle this thirty five hundred level on
• 3:07
  Speaker 1: the SMP is because earnings estimates are higher what they
• 3:10
  Speaker 1: were before, but they probably need to come down some
• 3:13
  Speaker 1: And if we have a base case scenario that it's
• 3:16
  Speaker 1: not a recession but a slowdown consumer, let's slow down
• 3:19
  Speaker 1: that earnings revisions need to come through to the two
• 3:22
  Speaker 1: six or seven percent, And so you do the math
• 3:24
  Speaker 1: on that, and you apply a multiple of fifteen or
• 3:26
  Speaker 1: sixteen times, then that gets to two about thirty five
• 3:29
  Speaker 1: hundred on the SMP, maybe a little bit lower so
• 3:33
  Speaker 1: UM so yes, I think probably a little bit lower still,
• 3:37
  Speaker 1: but not to the levels that we saw just coming
• 3:39
  Speaker 1: out of So that's pretty conservative for earnings estimates. We
• 3:42
  Speaker 1: we've been talking um here in the newsroom about a
• 3:46
  Speaker 1: story that Jess Mett and Lou Wang wrote. Peloton analysts
• 3:50
  Speaker 1: still see Peloton tripling in price. UM analysts still see
• 3:54
  Speaker 1: Uber more than doubling. Analysts still see Carbona, Carvana doubling.
• 4:00
  Speaker 1: Um don't earnings estimates need to come down pretty significantly?
• 4:04
  Speaker 1: Why our cell side arnalists analysts so slow to bring
• 4:08
  Speaker 1: these earnings estimates down? Well, I think for some of
• 4:12
  Speaker 1: the companies, perhaps some of which you mentioned, they probably
• 4:15
  Speaker 1: do have some some further room to go. But the
• 4:18
  Speaker 1: reason I was referring to the six or seven percent
• 4:20
  Speaker 1: for the broad indusease the median earnings revision in a
• 4:24
  Speaker 1: recession and environment is about thirteen percent if you assume
• 4:27
  Speaker 1: they were not going to a full fledged several consecutive
• 4:31
  Speaker 1: quarters of negative GDP recession that I don't think thirteen
• 4:34
  Speaker 1: percent at the index level is justified. I think half
• 4:37
  Speaker 1: of that is the most likely scenario. And if you
• 4:40
  Speaker 1: look at two dollars on next twelve month earnings, you
• 4:43
  Speaker 1: apply that six or seven percent haircut to that and
• 4:45
  Speaker 1: that's what gets you to about two. So that's at
• 4:49
  Speaker 1: the index level. But I do think there may need
• 4:51
  Speaker 1: to be more Froth Moore exuberants that need to come
• 4:55
  Speaker 1: out of some of the sec long term secular growth trates.
• 4:58
  Speaker 1: And it's not universal. What's happened for the last two years.
• 5:02
  Speaker 1: You've seen massive acceleration and things like e commerce and
• 5:05
  Speaker 1: you know, perhaps the Pelicans of the world, but that's
• 5:07
  Speaker 1: not repeatable and those growth rates cannot possibly compare to
• 5:11
  Speaker 1: what they've seen in the last couple of years, so
• 5:13
  Speaker 1: perhaps there's more to go there, all right, Anastasia, thanks
• 5:16
  Speaker 1: so much for joining us. Really appreciate getting your perspective here.
• 5:19
  Speaker 1: A brutal first half of the year for investors. Um
• 5:23
  Speaker 1: you know, hopefully a little bit better in the second half,
• 5:25
  Speaker 1: but who knows. Anastasia amar Rosso, chief investment strategist for
• 5:29
  Speaker 1: I Capital and also a proud graduate of the University
• 5:33
  Speaker 1: of New Mexico, Los Lobos. That's very very cool there.
• 5:40
  Speaker 1: All right, we have yet another Supreme Court ruling. This
• 5:43
  Speaker 1: could be the last um we're gonna go to June
• 5:45
  Speaker 1: Grasso are legally analysts to talk about. The Remain in
• 5:48
  Speaker 1: Mexico ruling kind of fell in the direction that the
• 5:52
  Speaker 1: Biden Court, that the Biden administration wanted it to. Although
• 5:55
  Speaker 1: they lost the e p A a um uh case,
• 5:58
  Speaker 1: let's start with remaining Mexico. Okay, Okay, I was gonna
• 6:01
  Speaker 1: say that the blow to the Biden administration on the
• 6:04
  Speaker 1: e p A case is far greater than the wind
• 6:07
  Speaker 1: here on remain in Mexico. Okay, So there's it's not like, oh,
• 6:10
  Speaker 1: they won one and they lost one. They won one
• 6:13
  Speaker 1: and then they won a half of one, and then
• 6:15
  Speaker 1: they won and then they lost a big one. So anyway,
• 6:17
  Speaker 1: remain in Mexico. That's the policy that the Trump administration
• 6:21
  Speaker 1: put into a fact that because there's not enough room
• 6:24
  Speaker 1: for the immigrants crossing the border, that if they don't
• 6:27
  Speaker 1: have room, they would get them, they would return them
• 6:29
  Speaker 1: to Mexico where they would stay. And then these ten
• 6:32
  Speaker 1: cities that were while their asylum bid was processed, which
• 6:36
  Speaker 1: can take forever. So and then the ten cities grew up.
• 6:41
  Speaker 1: It was very dangerous. Biden administration wanted to stop that,
• 6:45
  Speaker 1: and two of the two of the Republican led states sued.
• 6:49
  Speaker 1: So here the Supreme Court said, and it was a
• 6:51
  Speaker 1: five to four vote because Chief Justice Roberts who and
• 6:55
  Speaker 1: uh Justice Brett Kavanaugh agreed with the liberals, So it
• 6:58
  Speaker 1: was it was those five against the four Conservatives that um,
• 7:03
  Speaker 1: it didn't violate the rules for him to have this
• 7:06
  Speaker 1: remain in Mexico to rescind the policy because he had
• 7:10
  Speaker 1: they had given a good explanation, unlike the DACA case
• 7:13
  Speaker 1: a few years ago, they had given a good explanation
• 7:15
  Speaker 1: and they could rescind it. Now this goes back to
• 7:19
  Speaker 1: the district court judge in Texas, who is who has
• 7:22
  Speaker 1: been really hostile to the Biden administration. So it doesn't
• 7:26
  Speaker 1: really end here. I mean, this could come back up again.
• 7:28
  Speaker 1: No one's talking about this. This could possibly come back
• 7:31
  Speaker 1: up again because if if the district court says that
• 7:36
  Speaker 1: they're sending it back to the district court for details
• 7:39
  Speaker 1: to be worked out. So I suppose the district court says,
• 7:41
  Speaker 1: you know, just still doesn't work according to the guidelines
• 7:44
  Speaker 1: you gave me Supreme Court. Then it could come up again.
• 7:47
  Speaker 1: I mean it probably won't, but it's just a possibility.
• 7:50
  Speaker 1: So but in this case, what was what was difficult
• 7:53
  Speaker 1: about this case for the states who oppose it is
• 7:57
  Speaker 1: that they're basically would have to tell the Biden admin allustration,
• 8:00
  Speaker 1: you have to engage with a foreign state, with Mexico
• 8:04
  Speaker 1: and get an agreement with Mexico to allow this to happen.
• 8:08
  Speaker 1: So they would really have been interfering in, you know,
• 8:11
  Speaker 1: foreign affairs, which during the Royal arguments they say, what
• 8:14
  Speaker 1: I remember, I think Elena Kagan said, what are we
• 8:16
  Speaker 1: going to tell Mexico to, you know, keep everybody here?
• 8:19
  Speaker 1: And well they have indeed negotiated that with the Mexicans,
• 8:23
  Speaker 1: which I think is crazy. But with the Trump administration,
• 8:27
  Speaker 1: I had confused this earlier and I'll correct myself now
• 8:30
  Speaker 1: with the title forty two, which that was a COVID
• 8:34
  Speaker 1: driven thing, right, that's still in effect. So that is
• 8:36
  Speaker 1: still in effect because Biden administration wanted to end that
• 8:39
  Speaker 1: that COVID was used. The title forty two Public health
• 8:43
  Speaker 1: emerge in a similar way, right to send asylum seekers
• 8:46
  Speaker 1: back while they're because they were worried that those asylum
• 8:48
  Speaker 1: seekers might spread COVID. Right, So the courts have told
• 8:51
  Speaker 1: the Biden administration you can't end that. So they're still
• 8:55
  Speaker 1: using Title forty two at the boarder and you know, secretly,
• 8:57
  Speaker 1: I think they might have been relieved they had Title
• 9:00
  Speaker 1: forty two because they are not prepared for the influx
• 9:04
  Speaker 1: at the border in the summer months. You know, it
• 9:07
  Speaker 1: starts to build up. We were given a tragic example
• 9:12
  Speaker 1: of how dangerous that is the last couple of days.
• 9:15
  Speaker 1: Let's get to the e p A. Uh decision, which
• 9:18
  Speaker 1: you think is more important, was a big blow to
• 9:21
  Speaker 1: the Biden administration. Well, you know, it's it's cutting back
• 9:24
  Speaker 1: on the e p A, which is the agency that
• 9:27
  Speaker 1: handles this, their ability to set rules to curb climate change.
• 9:33
  Speaker 1: So it's a huge blow and you know, one wonders,
• 9:36
  Speaker 1: now what's going to happen. And also, as I you
• 9:38
  Speaker 1: know I mentioned before this, the conservatives on this court
• 9:42
  Speaker 1: are against what is called the administrative state. They want
• 9:46
  Speaker 1: to cut back on the agency's rules, on the agency's
• 9:50
  Speaker 1: ability to you know, to put rules into effect all
• 9:53
  Speaker 1: the different federal agencies. And you know, you know, if
• 9:57
  Speaker 1: Congress were there to stay been and make rules, this
• 10:02
  Speaker 1: wouldn't be quite as big of a loss. And conservatives
• 10:06
  Speaker 1: who push this through, who pushed these through, know that
• 10:09
  Speaker 1: that's the case that Congress is not going to start
• 10:12
  Speaker 1: passing rules now. Do they want it to go back
• 10:14
  Speaker 1: to the states, as this the state's rights issue from
• 10:16
  Speaker 1: the conservatives on the Spreme Court, I think it's a
• 10:20
  Speaker 1: I think I don't know if it's a state's rights
• 10:21
  Speaker 1: issue as much as it's we don't want these administrative
• 10:24
  Speaker 1: agencies to be making decisions their bureaucrats, and it should
• 10:28
  Speaker 1: be the elected representatives of the people making these kinds
• 10:32
  Speaker 1: of decisions. But you know, how is I don't know
• 10:34
  Speaker 1: how other than people that are trained in this and
• 10:36
  Speaker 1: do it for a living, you want them making decisions
• 10:40
  Speaker 1: about it, you know, just the big government. I guess
• 10:42
  Speaker 1: you just don't want the Washington big government. You know,
• 10:46
  Speaker 1: it's sort of drained the swamp in a different in
• 10:48
  Speaker 1: a different respect. So it's interesting how these uh, how
• 10:53
  Speaker 1: people in this country looking at it from outside, because
• 10:55
  Speaker 1: I lived in Germany for years, fall on different sides
• 10:58
  Speaker 1: of the ideological For example, they want small government, but
• 11:01
  Speaker 1: they want huge border control right. They don't want the
• 11:05
  Speaker 1: government to be able to decide anything, but not not
• 11:08
  Speaker 1: the important decisions, but the death penalty, right, because that's
• 11:11
  Speaker 1: not a very important decision. No, it's um no one
• 11:14
  Speaker 1: said it makes sense, right, but that that's our Supreme Court.
• 11:17
  Speaker 1: And they have ruled. And so now they go on
• 11:20
  Speaker 1: summer vacation and we'll see what they do. Twelve o'clock
• 11:24
  Speaker 1: they're going to have Tom Brown Jackson sworn in. So
• 11:27
  Speaker 1: I think they'll all have champagne and then split champion split.
• 11:31
  Speaker 1: You know. It used to be there there was a
• 11:33
  Speaker 1: story that one of the justices used to have have
• 11:36
  Speaker 1: a limo waiting to take him to the airport right
• 11:37
  Speaker 1: after the least is exactly all right, Joan Grasso, Bloombridge Legal, Anos,
• 11:41
  Speaker 1: thank you so much, all R. Let's check out with
• 11:45
  Speaker 1: Everett Millman here. Uh he does all that commodity stuff
• 11:50
  Speaker 1: for hold on, hold on, hold on, hold on. It
• 11:52
  Speaker 1: looks at all kinds of coins, but also Gainesville that's right,
• 11:55
  Speaker 1: that's right, at Gainesville Coins chief market Strategies. But crypto,
• 11:58
  Speaker 1: yah know, so let's start with crypt dough. All right,
• 12:01
  Speaker 1: we got Everett Crypto print. We were below, we were
• 12:05
  Speaker 1: down to eight. What's going on in the world that
• 12:09
  Speaker 1: crypto here, right? I think it's worth noting that the crypto,
• 12:14
  Speaker 1: entire crypto market as a whole has been falling dramatically,
• 12:17
  Speaker 1: So it's not just Bitcoin, although that's obviously the one
• 12:19
  Speaker 1: that we're all going to focus on. I think that
• 12:22
  Speaker 1: this is a sign of crypt crypto winter being in
• 12:24
  Speaker 1: full force, and a lot of what's caused Bitcoin to
• 12:27
  Speaker 1: go down is really exogenous to the to the coin itself. Uh.
• 12:32
  Speaker 1: We've seen that it has lately followed the stock market lower,
• 12:36
  Speaker 1: and I think we can reason our way to why
• 12:38
  Speaker 1: that is the case. That a lot of more institutional
• 12:41
  Speaker 1: holders are now in the bitcoin space, and so as
• 12:44
  Speaker 1: stocks fall, they liquidate their bitcoin UM. And the fact
• 12:48
  Speaker 1: that other crypto projects, other crypto lenders starting to see
• 12:52
  Speaker 1: some cracks and failing UM. They often use bitcoin as collateral,
• 12:56
  Speaker 1: So we've seen a lot of selling of bitcoin to
• 12:58
  Speaker 1: try and probably of other cryptos correct. So I think
• 13:02
  Speaker 1: those are the main culprits here. UM. Yeah, there have
• 13:04
  Speaker 1: been a number of failures or now we have heard
• 13:07
  Speaker 1: uh it reported that Three Arrows is being forced to
• 13:11
  Speaker 1: liquidate UM and I've also seen forecasts for bitcoin to
• 13:16
  Speaker 1: fall down to twelve thousand. Still, to put it in perspective, Everett,
• 13:20
  Speaker 1: I heard um someone say earlier is the worst quarter
• 13:23
  Speaker 1: for bitcoin since Q three of eleven. So I looked
• 13:26
  Speaker 1: back at the price action in Q three of twenty
• 13:30
  Speaker 1: eleven bitcoin at that point. It wasn't that nineteen thousand
• 13:33
  Speaker 1: or twelve thousand, or seven thousand or three thousand. It
• 13:36
  Speaker 1: went from sixteen dollars to five dollars. So we've come
• 13:39
  Speaker 1: a long way, baby, Absolutely. I think when you zoom
• 13:43
  Speaker 1: out like that, that is a great way to look
• 13:45
  Speaker 1: at it. And most of the early adopters and some
• 13:48
  Speaker 1: of the people who are old heads in bitcoin, they've
• 13:51
  Speaker 1: seen this sort of cyclical pattern time and time again
• 13:54
  Speaker 1: over the past ten years, so kind of retracing back
• 13:57
  Speaker 1: to where our starting point was. Anyone who has been
• 14:00
  Speaker 1: holding along the way is very happy with the performance
• 14:04
  Speaker 1: of their cryptos um and particularly for bitcoin being the biggest,
• 14:07
  Speaker 1: most recognizable one. At some point every nice seen me
• 14:11
  Speaker 1: recall folks, you know, as we're all learning about crypto
• 14:14
  Speaker 1: and bitcoin, uh talking about it. Maybe bitcoin is a
• 14:17
  Speaker 1: hedge for inflation, but that doesn't appear to be the case,
• 14:21
  Speaker 1: does it. Well, that has not played out thus far
• 14:24
  Speaker 1: as I mentioned, I think it is those exogenous factors.
• 14:27
  Speaker 1: But by its design, bitcoin is supposed to be a
• 14:31
  Speaker 1: deflationary currency. The supply of bitcoin every four years UM.
• 14:36
  Speaker 1: The pace of the supply growth gets cut in half,
• 14:39
  Speaker 1: the so called happening UM. And so this is a
• 14:41
  Speaker 1: deflationary design. And although that does solve the inflationary problem
• 14:46
  Speaker 1: that we have with fiat money UM as far as
• 14:49
  Speaker 1: I can tell, it introduces a second problem, which is
• 14:53
  Speaker 1: relates back to one of the oldest principles in economics,
• 14:56
  Speaker 1: known as Gresham's law that good or bad money drives good. Essentially,
• 15:00
  Speaker 1: people want to spend cheap money that's losing its value
• 15:04
  Speaker 1: and hold on to the money that is rising in value.
• 15:06
  Speaker 1: So if indeed bitcoin is supposed to be deflationary over time,
• 15:11
  Speaker 1: it begs the question why on earth would anyone spend
• 15:14
  Speaker 1: bitcoin At a certain point, UM, you would want to
• 15:17
  Speaker 1: keep bitcoin and spend everything else. So I think that's
• 15:21
  Speaker 1: very many years of still out down the road. But
• 15:24
  Speaker 1: it does bring up an interesting philosophical question about what
• 15:28
  Speaker 1: is sound money and it is bitcoin actually money? UM.
• 15:32
  Speaker 1: I think it's quite fair that the CFTC is going
• 15:35
  Speaker 1: to be regarding it as a commodity because bitcoin does
• 15:39
  Speaker 1: convert electricity into new coins, so it is sort of
• 15:43
  Speaker 1: backed by a commodity. Okay, good stuff evert moment, appreciate it.
• 15:47
  Speaker 1: Love getting your thoughts here. All things commodities and most
• 15:51
  Speaker 1: notably crypto. Over the last we learned something new. Gresham's Law.
• 15:56
  Speaker 1: We're going for it, named in eighteen sixty by economist
• 16:01
  Speaker 1: Henry Dunning McLeod after Sir Thomas Gresham. Thank goodness for Google.
• 16:05
  Speaker 1: Everett Millman, chief market analyst for Gainesville Coin, The building
• 16:13
  Speaker 1: of real estate, construction and all that good stuff. John Fish,
• 16:17
  Speaker 1: CEO and chairman of Suffer Construction Company, joins us here. John,
• 16:21
  Speaker 1: thanks so much for joining us here. We'll get to
• 16:22
  Speaker 1: the kind of the interest rate story angle in a bid,
• 16:25
  Speaker 1: but I want to just talk to you about if
• 16:27
  Speaker 1: you want to go out and build a building, whether
• 16:29
  Speaker 1: it's a residential real estate or commercial real state as
• 16:33
  Speaker 1: a construction guy, John, can you get the labor? Can
• 16:36
  Speaker 1: you get the raw materials? If you do get the
• 16:38
  Speaker 1: raw materials, do you have to pay through the nose?
• 16:40
  Speaker 1: Give us a sense of what it's like to actually
• 16:42
  Speaker 1: build something today, you know, Matt Paul, thank you very
• 16:45
  Speaker 1: much for the opportunity. Again, it's probably one of both
• 16:47
  Speaker 1: challenging times iron industry has had over the last five years.
• 16:51
  Speaker 1: Again you pointed out the material cost are as high
• 16:53
  Speaker 1: as I've ever been, and again the shortage of labor
• 16:56
  Speaker 1: across the board and this is just not the East
• 16:58
  Speaker 1: Coast but the entire country right now. And again because
• 17:00
  Speaker 1: it's a demand for talent out there is one person
• 17:03
  Speaker 1: for every two job openings. When you think about that,
• 17:05
  Speaker 1: and that's detrimental lab business. What it does, it drives
• 17:08
  Speaker 1: up wages. At the end of the day, wages over
• 17:10
  Speaker 1: the last eighteen months have grown up substantially in the
• 17:13
  Speaker 1: same thing with material costs. And then you introduced the
• 17:15
  Speaker 1: concept of supply chain. I mean that also again creates
• 17:18
  Speaker 1: a tremendous amount of disruption. What we've seen in the
• 17:20
  Speaker 1: construction industry right now, in the realist industry is a
• 17:23
  Speaker 1: tremendous amount of uncertainty in our industry as a whole
• 17:26
  Speaker 1: doesn't feel well when when there's a deal of uncertainty,
• 17:30
  Speaker 1: so um, you don't see or do you see inflation
• 17:33
  Speaker 1: rolling over. We've noticed in some places, um, for example,
• 17:37
  Speaker 1: goods that you would find at Walmart and target um,
• 17:41
  Speaker 1: they've overstocked. Critty Gupta is just on talking to us
• 17:44
  Speaker 1: about shipping costs which have rolled over slightly. UM still
• 17:48
  Speaker 1: not cheap by any means UM. And we're watching for
• 17:51
  Speaker 1: softening of other UH inflation or other metrics. Do you
• 17:55
  Speaker 1: see any of that in construction? We not as of yet.
• 17:59
  Speaker 1: I think it's gonna happen. I think in the next
• 18:01
  Speaker 1: quarter we're probably gonna see things slowing itself down. We're
• 18:03
  Speaker 1: still climbing from a cost perspective point of view across
• 18:06
  Speaker 1: the country, and I do think as this negative news
• 18:09
  Speaker 1: comes back into the marketplace, people gonna start putting the
• 18:11
  Speaker 1: brakes on a little bit preen the day. But I
• 18:13
  Speaker 1: would say this, Matt and Paul, We've been a long
• 18:15
  Speaker 1: way to go. You're at eight point six percent inflation
• 18:17
  Speaker 1: right now at this particular point time, we don't do
• 18:19
  Speaker 1: well into it down to the three the two and
• 18:21
  Speaker 1: a half percent levels. And so at the end of
• 18:23
  Speaker 1: the day, I think we've got a ways to go,
• 18:25
  Speaker 1: and I think the only way to do it is
• 18:26
  Speaker 1: the FED continue to put the squeeze on, and that's
• 18:28
  Speaker 1: raising interest rates. And again I will say this r
• 18:31
  Speaker 1: very you know, defensively is I think we we we
• 18:35
  Speaker 1: need a recession at this point in time. I think
• 18:37
  Speaker 1: it's the only way to sort of choke off the
• 18:39
  Speaker 1: inflationary pressures that are on the economy right now and
• 18:42
  Speaker 1: get it over with quickly, because I do think because
• 18:44
  Speaker 1: of the fact that consumers still has almost five point
• 18:47
  Speaker 1: four trillion dollars and savings in their pocket, once we
• 18:49
  Speaker 1: sort of ring out this inflation and the consumers on
• 18:52
  Speaker 1: the sidelines that comes back into the ballpark all of
• 18:54
  Speaker 1: a sudden, we're going to see the economy moving back
• 18:56
  Speaker 1: up again. So I'm bullish in the long term. I
• 18:58
  Speaker 1: think we've got a period of time twelve to eighteen
• 19:01
  Speaker 1: months that it's going to be challenging right now. And
• 19:03
  Speaker 1: my attitude is, hey, let's let's put the brakes on,
• 19:05
  Speaker 1: let's get this over with. Let's rebalance the labor market,
• 19:08
  Speaker 1: let's rebalance the supply chain, uh, and get back to work.
• 19:12
  Speaker 1: John on the commercial side, UM, you know, I think
• 19:15
  Speaker 1: the work from home thing, getting back to the office thing,
• 19:19
  Speaker 1: the how people are gonna be working going forward is
• 19:21
  Speaker 1: still very much influx UH in the United States. As
• 19:25
  Speaker 1: you talk to some of your bigger clients, how are
• 19:27
  Speaker 1: they thinking about office space going forward. I think most
• 19:32
  Speaker 1: companies right now are re engineering how they're using this space,
• 19:35
  Speaker 1: which is which, which is smart. But at the end
• 19:37
  Speaker 1: of the day, again, I think it's a short term phenomena. Okay,
• 19:40
  Speaker 1: we might be talking about twelve, eighteen, twenty four months out,
• 19:43
  Speaker 1: but at the end of the day, the only way
• 19:44
  Speaker 1: to build culture, the only way to get promoted, is
• 19:47
  Speaker 1: people to be back at work at the end of
• 19:48
  Speaker 1: the day. And we are social animals as human beings,
• 19:51
  Speaker 1: and what we need we we we thrive on that energy.
• 19:54
  Speaker 1: And what happens is a company maintains a competitive vantage,
• 19:57
  Speaker 1: I believe through their culture, and you can't build culture remotely.
• 20:02
  Speaker 1: So how's it look then? How's it look in Boston?
• 20:05
  Speaker 1: Can I tell something right now? I think overall you
• 20:07
  Speaker 1: know people, I would say we probably have six people
• 20:09
  Speaker 1: back to work generally speaking, our companies back at pcent
• 20:13
  Speaker 1: back to work, which I'm proud of. But at the
• 20:15
  Speaker 1: end of the day, I think Boston, like every other community,
• 20:17
  Speaker 1: is grappling with this issue because right now labor is
• 20:22
  Speaker 1: in demand. They have to say as to what's going
• 20:24
  Speaker 1: to go on with the work rules. Right now we're
• 20:26
  Speaker 1: seeing this with unionization at Apple, We're seeing this at
• 20:29
  Speaker 1: Starbucks across the board. But my senses, as the market
• 20:32
  Speaker 1: softens a little bit, all of a sudden, you'll have
• 20:34
  Speaker 1: more of a balance in the environment. And I think
• 20:38
  Speaker 1: that's what we need at this particular point in time,
• 20:40
  Speaker 1: and that's why I am a strong advocate, you know,
• 20:43
  Speaker 1: continue raising the rates, although I don't like it, and
• 20:45
  Speaker 1: in the real estate is very, very uncomfortable with with
• 20:49
  Speaker 1: interest rate rising because the real estate runs on credit
• 20:51
  Speaker 1: as we all know, and doesn't like the uncertainty. But
• 20:54
  Speaker 1: at the end of the day, my attitude, let's get
• 20:55
  Speaker 1: this pain out of the system, okay, and let's move forward,
• 20:58
  Speaker 1: all right. The way, I just want to say, for
• 21:00
  Speaker 1: those listeners who have who don't know, I have never
• 21:03
  Speaker 1: heard of it, been or seen it. The Boston Pops
• 21:06
  Speaker 1: is one of the coolest events I've ever attended in America.
• 21:11
  Speaker 1: Um coming up on this, I guess Sunday and Monday
• 21:15
  Speaker 1: it used to be five thousand people gather outside the
• 21:17
  Speaker 1: half Shell there to watch, and it's gonna be getting
• 21:19
  Speaker 1: back to numbers like that. John, do you go? Do
• 21:22
  Speaker 1: you watch the Pops? What we do? I'm a strong
• 21:24
  Speaker 1: support of the Pops. I think it's one of the best,
• 21:27
  Speaker 1: uh you know, organizations I think in the country. To
• 21:29
  Speaker 1: be honest with you, it's a huge cultural event for
• 21:31
  Speaker 1: the city of Boston, and I would just say this
• 21:33
  Speaker 1: to you, it's something that we as as Bostonians extremely
• 21:36
  Speaker 1: proud of. In my sense of that numbers probably up
• 21:39
  Speaker 1: the seven d and so we'll keep you know, we'll
• 21:42
  Speaker 1: hope for a good weather. All right, it's that's starting
• 21:45
  Speaker 1: at five in here on Bloomberg Radio Monday. It's big.
• 21:48
  Speaker 1: It is so much fun. I mean, I have to say,
• 21:50
  Speaker 1: anyone in the area, if you're close enough, get to it. Um.
• 21:54
  Speaker 1: It's just a great party. It really, it really gives
• 21:57
  Speaker 1: you that feeling that the country is coming together, which
• 21:59
  Speaker 1: is a feeling that we've been lacking in the past
• 22:01
  Speaker 1: a couple of weeks, months, or years. And we're gonna
• 22:04
  Speaker 1: be showing that at five pm here on Bloomberg Radio.
• 22:07
  Speaker 1: All right, that's coming up. We had John Fish, their
• 22:09
  Speaker 1: CEO and chairman STUFFI Construction Company. Thanks for listening to
• 22:13
  Speaker 1: the Bloomberg Markets podcast. You can subscribe and listen to
• 22:17
  Speaker 1: interviews with Apple Podcasts or whatever podcast platform you prefer.
• 22:21
  Speaker 1: I'm Matt Miller. I'm on Twitter at Matt Miller three.
• 22:26
  Speaker 1: On Fall Sweeney, I'm on Twitter at pt Sweeney Before
• 22:28
  Speaker 1: the podcast. You can always catch us worldwide at Bloomberg
• 22:31
  Speaker 1: Radio