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Markets, Chevrolet, and Hunter Biden (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
• 0:07
  Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
• 0:11
  Speaker 1: with essential market moven news. Find the Bloomberg Markets podcast
• 0:15
  Speaker 1: called Apple Podcasts or wherever you listen to podcasts, and
• 0:18
  Speaker 1: at Bloomberg dot com slash podcast Listen. Our next guest
• 0:22
  Speaker 1: is firmly in the soft landing camp as well. He
• 0:24
  Speaker 1: expects a growth of around one and a half percent
• 0:26
  Speaker 1: for the rest of the year and inflation to continue
• 0:29
  Speaker 1: to decline. But market's kind of up and down today
• 0:32
  Speaker 1: on concern that the elevated inflation that we've seen in
• 0:35
  Speaker 1: recent data points, the core CPI reading still at four
• 0:38
  Speaker 1: point seven percent, is going to stay with us for
• 0:40
  Speaker 1: some time to come. And part of that problem is
• 0:43
  Speaker 1: the super core gauge of prices that Powell watches so closely, right,
• 0:47
  Speaker 1: the services excluding housing has actually risen in the last reading.
• 0:53
  Speaker 1: And another part is that some elements of the depressed
• 0:55
  Speaker 1: CPI readings like airline tickets and medical costs aren't expected
• 1:01
  Speaker 1: to continue to drop. And then got the housing picture
• 1:05
  Speaker 1: to add to all of that, so let's welcome in
• 1:07
  Speaker 1: Bob Heater. He's a head of Investment Policy and Strategy
• 1:10
  Speaker 1: group over at Silvercrest Asset Management. Bob, welcome the program.
• 1:13
  Speaker 1: Thanks for joining us in the Interactive Broker Studio. Why
• 1:17
  Speaker 1: are you optimistic that inflation will continue to decline?
• 1:21
  Speaker 2: Well, I think one of the reasons is that we've
• 1:23
  Speaker 2: seen most of the inflationary fuel dissipate, so monetary growth
• 1:26
  Speaker 2: has all but flat lined here. You've seen all of
• 1:30
  Speaker 2: the supply chain problems dissipate. The index that's widely maintained
• 1:33
  Speaker 2: and followed there really only hit normal just a few
• 1:35
  Speaker 2: months ago. You've seen a lot of the demand swings
• 1:38
  Speaker 2: in the economy start to normalize. We're still seeing some
• 1:41
  Speaker 2: of that, but supply and demand a bit more stable
• 1:44
  Speaker 2: and allowing companies to really produce at a level that
• 1:47
  Speaker 2: they need to to keep prices in check. And so
• 1:49
  Speaker 2: I'm relatively optimistic on the pace of inflation continuing to
• 1:52
  Speaker 2: decline from an economic perspective, but I think from a
• 1:55
  Speaker 2: market perspective, we've maybe gotten a little bit of ahead
• 1:57
  Speaker 2: of ourselves and there's a bit more work to do.
• 1:59
  Speaker 3: It's interesting because these CPI figures don't necessarily look ahead
• 2:05
  Speaker 3: to things like rising oil prices and the impacts. I mean,
• 2:09
  Speaker 3: when we think of the FED, they're looking at this
• 2:11
  Speaker 3: core number that strips out all this other stuff, that
• 2:13
  Speaker 3: is the stuff that consumers potentially feel most strongly. Is
• 2:18
  Speaker 3: this going to change the FEDS thinking? Is this going
• 2:21
  Speaker 3: to change their reaction to some of these data that
• 2:24
  Speaker 3: we get.
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  Speaker 2: So the way that I look at that on a
• 2:26
  Speaker 2: go forward basis of trying to estimate the pace of
• 2:28
  Speaker 2: the decline in CPI, and I think that's the real
• 2:30
  Speaker 2: open question mark for markets here.
• 2:32
  Speaker 1: I think you're right.
• 2:33
  Speaker 2: There are a number of things that are likely to
• 2:35
  Speaker 2: put some upward pressure on CPI, and the energy complex
• 2:37
  Speaker 2: certainly being one of those. The one that's the biggest one,
• 2:40
  Speaker 2: of course, on the downside is housing. And so when
• 2:42
  Speaker 2: we look through some of those estimates of how much
• 2:44
  Speaker 2: of the contribution from CPI from housing well over two percent,
• 2:47
  Speaker 2: it looks like maybe middle of next year.
• 2:49
  Speaker 1: That starts to go flat.
• 2:51
  Speaker 2: So if I add back in more energy inflation than
• 2:54
  Speaker 2: we have currently and I take out the housing, I
• 2:57
  Speaker 2: get to a point where I sort of estimate we
• 2:59
  Speaker 2: hit that two percent FED target sometime in the middle
• 3:02
  Speaker 2: of next year, so we're still a ways away from that,
• 3:04
  Speaker 2: and then beyond that, we still have to ask the
• 3:06
  Speaker 2: question what will the FED do if and when we
• 3:08
  Speaker 2: hit that two percent? So I think that's why the
• 3:09
  Speaker 2: market's struggling a little bit here. With inflation's improved a lot,
• 3:12
  Speaker 2: I think we factored most of that in and we're
• 3:14
  Speaker 2: sort of looking for some additional fuel.
• 3:16
  Speaker 1: What do you think do you think the Fed is
• 3:17
  Speaker 1: going to hold at this level?
• 3:19
  Speaker 4: Right?
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  Speaker 1: And what in twenty twenty four start to cut.
• 3:23
  Speaker 2: I think it won't be at least until the middle
• 3:25
  Speaker 2: or late in twenty twenty four until they start to cut.
• 3:27
  Speaker 2: I think I base that somewhat on the comments that
• 3:29
  Speaker 2: we saw from New York Fed President Williams talking a
• 3:32
  Speaker 2: little bit about the restrictiveness of policy increases as inflation
• 3:35
  Speaker 2: comes down. So if we do see inflation coming down
• 3:38
  Speaker 2: a bit, I think they may cut just a bit
• 3:40
  Speaker 2: just enough over that too.
• 3:42
  Speaker 4: Right.
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  Speaker 1: This is the passive hike that we got basically yesterday,
• 3:46
  Speaker 1: right when CPI came down, even though rates were the same,
• 3:50
  Speaker 1: essentially gives you a higher real.
• 3:52
  Speaker 2: Rate, yes, And I think even that process, though, will
• 3:54
  Speaker 2: take some time. It's not like they're going to take
• 3:56
  Speaker 2: you know, two hundred or three hundred bases points out
• 3:58
  Speaker 2: in a single meeting. It'll be thissured pace of very
• 4:01
  Speaker 2: slow cuts later in the year. So I think there's
• 4:03
  Speaker 2: still a long timeline for rates being a bit elevated
• 4:05
  Speaker 2: here and creating a bit of a drag on the economy.
• 4:08
  Speaker 3: Yeah, the ponderous twenty five basis points. Then we'll see
• 4:13
  Speaker 3: and we'll pause, and we'll see in that kind of
• 4:15
  Speaker 3: message impact on corporate profits. I mean, are we at
• 4:19
  Speaker 3: the end of a potential earnings recession where we see
• 4:23
  Speaker 3: things improve from here?
• 4:24
  Speaker 2: I think we're getting close to that. So I based
• 4:26
  Speaker 2: that on two things. One is, I do think economic
• 4:28
  Speaker 2: growth is mostly stabilized. And while I think we'll be
• 4:31
  Speaker 2: running at around one and a half percent, it certainly
• 4:33
  Speaker 2: could be a little bit lower than that in the
• 4:34
  Speaker 2: next few quarters if the rate stress and bank stress
• 4:38
  Speaker 2: weighs more heavily than I'm expecting. But I think in
• 4:41
  Speaker 2: terms of looking out to next year, there's reason for
• 4:43
  Speaker 2: some optimism. I've started to see some signals in earnings
• 4:45
  Speaker 2: reports this past quarter that companies are making improvements in
• 4:48
  Speaker 2: productivity enhancement, and I think some of that has been
• 4:51
  Speaker 2: masked by the wild swings we've had in the economy
• 4:53
  Speaker 2: in the past few years. Now that we get back
• 4:55
  Speaker 2: to a much more stable backdrop, I think some of
• 4:57
  Speaker 2: those productivity gains will start to flow through. So I
• 4:59
  Speaker 2: wouldn't be surprised if next year is marked by a
• 5:01
  Speaker 2: period of slightly increasing margins and getting a little bit
• 5:04
  Speaker 2: of upside on the earnings.
• 5:05
  Speaker 1: What do you think about the labor fight? So they
• 5:07
  Speaker 1: two you know, industry specific and spread out. You've got
• 5:12
  Speaker 1: you know, labor fight over streaming, you've got a labor
• 5:15
  Speaker 1: fight and automotive production. But there's some big numbers that
• 5:18
  Speaker 1: we're looking at.
• 5:19
  Speaker 2: Right yes, and I think we saw some of that
• 5:21
  Speaker 2: in different industries during the pandemic, particularly in service industries.
• 5:25
  Speaker 2: My take on that is that I think an overall
• 5:27
  Speaker 2: cost basis for companies, they can manage it. So it's
• 5:29
  Speaker 2: good for the consumer, it's good for the people getting
• 5:31
  Speaker 2: increase pay. But I think you do that with perhaps
• 5:34
  Speaker 2: less headcount, and we've started to see some of that.
• 5:36
  Speaker 2: Companies holding the line on headcount, or companies that in
• 5:39
  Speaker 2: industries that have been disrupted in the pandemic at staffing
• 5:41
  Speaker 2: levels lower than they were in twenty nineteen. And higher
• 5:44
  Speaker 2: capacity in terms of the number of customers they're serving.
• 5:46
  Speaker 2: So wages might be going up on a basis of
• 5:49
  Speaker 2: hourly wages for employees, but lower headcount or flatheadcount on
• 5:52
  Speaker 2: higher revenue, okay for margins.
• 5:54
  Speaker 1: So at bottom line for stocks we're at we're just
• 5:56
  Speaker 1: under s and P forty five hundred, right, we come
• 5:59
  Speaker 1: in about two and a half or so the last
• 6:00
  Speaker 1: couple weeks. But you think we're gonna remain at this
• 6:04
  Speaker 1: level give or take into twenty twenty four, and then
• 6:08
  Speaker 1: you're constructive on the index from there, Yes, basically.
• 6:11
  Speaker 2: I mean it's always, of course tough to time these
• 6:13
  Speaker 2: things point to point, but I think we're really struggling
• 6:15
  Speaker 2: for some fuel here. There's not much reason to be
• 6:17
  Speaker 2: overly optimistic, not much reason to be overly pessimistic. Stocks
• 6:21
  Speaker 2: look relatively fairly priced to me, and I think it'll
• 6:23
  Speaker 2: be until later in the year until investors start focusing
• 6:26
  Speaker 2: on what does the path look like for twenty twenty four,
• 6:28
  Speaker 2: maybe start to put some realistic expectations on inflation and
• 6:31
  Speaker 2: FED policy, start to take a closer pencil to earnings
• 6:34
  Speaker 2: in twenty four, that we start to get any fuel
• 6:36
  Speaker 2: to the upside.
• 6:37
  Speaker 3: Are there any sectors, any pockets of opportunity that you
• 6:40
  Speaker 3: were looking at?
• 6:41
  Speaker 2: So I like three sectors in particular. I think consumer,
• 6:44
  Speaker 2: discretionary and industrials are still benefiting from strong demand. I
• 6:47
  Speaker 2: think that will continue, and I think select pockets and
• 6:50
  Speaker 2: technology where they've shown the opportunity to ab productivity enhancing
• 6:54
  Speaker 2: and be be able to increase their own margins relatively efficiently.
• 6:57
  Speaker 2: I think there's some upsides to earnings there as well.
• 7:00
  Speaker 3: Can I ask what's the impact of saying generative AI
• 7:04
  Speaker 3: in an earnings call?
• 7:05
  Speaker 2: Yes, it's certainly showing up in every call. So I've
• 7:07
  Speaker 2: been trying to weed through a lot of that and
• 7:09
  Speaker 2: shut out the noise of just mentioning AI for hopeful
• 7:12
  Speaker 2: purposes and companies that are actually deploying things. I think
• 7:15
  Speaker 2: we're still very early in that it's a lot of
• 7:17
  Speaker 2: mentions and not a lot of activity, but we're starting
• 7:19
  Speaker 2: to see some of it pop through, and I think
• 7:21
  Speaker 2: we're starting to again see companies producing more revenue on
• 7:24
  Speaker 2: flat headcount. And that's beneficial, but is it.
• 7:26
  Speaker 1: A game changer? I mean, I saw a story the
• 7:28
  Speaker 1: other day that the Chinese have ordered five billion dollars
• 7:33
  Speaker 1: worth of chips from Nvidia trying to get in under
• 7:35
  Speaker 1: the wire while they can. That's a massive number.
• 7:38
  Speaker 2: It is a massive number, and I think some of
• 7:40
  Speaker 2: it will be hugely productive and some of it will
• 7:42
  Speaker 2: be hugely wasteful. And that's really the challenge in sorting
• 7:45
  Speaker 2: through company by company who's able to manage these things
• 7:47
  Speaker 2: well and deploy the technology to productivity benefit.
• 7:51
  Speaker 3: And then you have the kind of Inflation Reduction Act
• 7:53
  Speaker 3: and all of these long term investments in manufacturing. I mean,
• 7:56
  Speaker 3: do we see the impact of those in the near
• 7:58
  Speaker 3: term or is this something you're looking out for twenty
• 8:00
  Speaker 3: twenty five, twenty six.
• 8:01
  Speaker 2: I think we're seeing some of it presently. In terms
• 8:03
  Speaker 2: of economic growth. We're certainly seeing construction spend and manufacturing
• 8:06
  Speaker 2: has ticked up quite a bit. We haven't seen it
• 8:08
  Speaker 2: on the job front. I think hiring has been very
• 8:10
  Speaker 2: difficult there. So I do think the hiring cycle of
• 8:12
  Speaker 2: it will take some time, and maybe that's potentially over
• 8:14
  Speaker 2: time and offset to some of the other jobs that
• 8:16
  Speaker 2: get lost in other areas.
• 8:18
  Speaker 1: All right, Bob, thanks so much for joining us, Bob Teeter.
• 8:21
  Speaker 1: They are from Silvercrest Asset Management. Really appreciate your time
• 8:23
  Speaker 1: in the studio with us.
• 8:26
  Speaker 5: You're listening to the Team Can's live program Bloomberg Markets
• 8:30
  Speaker 5: weekdays at ten am Eastern.
• 8:31
  Speaker 4: On Bloomberg dot Com, the iHeartRadio.
• 8:34
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• 8:36
  Speaker 5: wherever you get your podcasts.
• 8:40
  Speaker 1: So there's a company in the Philippines called Ancass I
• 8:43
  Speaker 1: believe I have the pronunciation right. They have four million downloads,
• 8:46
  Speaker 1: they have thirty thousand biker partners, and they are essentially
• 8:50
  Speaker 1: an uber that runs on two wheels rather than four.
• 8:54
  Speaker 1: Let's bring in the CEO right now. Vancast George Royeka
• 8:58
  Speaker 1: joins us to talk more about the growth that they've
• 9:01
  Speaker 1: seen in the market. George, thanks so much for your time.
• 9:04
  Speaker 1: I'm an avid motorcyclist, so I love the idea, but
• 9:09
  Speaker 1: how exactly does this work? I mean I imagine people
• 9:12
  Speaker 1: sometimes fall off.
• 9:15
  Speaker 6: Well, hi guys, thanks for having me here. Well, you know,
• 9:17
  Speaker 6: we're very close here in our side of the world,
• 9:20
  Speaker 6: and I much love to give I'm in transportation, right,
• 9:22
  Speaker 6: so you do got to hug your driver unfortunately.
• 9:26
  Speaker 1: Or fortunately depending on you know, everybody needs a hug
• 9:29
  Speaker 1: once in a while. What kind of growth have you shown,
• 9:33
  Speaker 1: because I know you have a goal of getting to
• 9:36
  Speaker 1: creating a million jobs, and right now you've got thirty thousand.
• 9:42
  Speaker 6: So actually we're at fifty thousand now.
• 9:44
  Speaker 5: Wow.
• 9:44
  Speaker 6: I think it's a few months ago we grew quite
• 9:46
  Speaker 6: significantly and we're about eight million downloads as of date.
• 9:51
  Speaker 1: Wow.
• 9:52
  Speaker 3: Well, yeah, what what spurred that growth because I know
• 9:56
  Speaker 3: very recently as of March it was it was quite
• 9:58
  Speaker 3: a bit less, right March.
• 10:00
  Speaker 6: Yeah, Well, I think in the you know, in our
• 10:02
  Speaker 6: part of tow congestion is you know it's a big
• 10:05
  Speaker 6: problem and a lot of the streets here, even the
• 10:08
  Speaker 6: main thoroughfares, it's just riddled with you know, cars and
• 10:12
  Speaker 6: buses and there's not enough infrastructure. So you know, a
• 10:16
  Speaker 6: ten kilometer drive can take about two hours one way.
• 10:20
  Speaker 6: So that's that's that's very bad. So you know, there's
• 10:24
  Speaker 6: a really neat, big need for small, agile vehicles. You know,
• 10:28
  Speaker 6: Indonesia has led the way for for these types of transportation,
• 10:32
  Speaker 6: and this is something that we're seeing as a trend
• 10:35
  Speaker 6: all over to Southeast Asia.
• 10:36
  Speaker 1: So what does your growth look like like going forward?
• 10:39
  Speaker 1: If you double your download since March and you've almost
• 10:42
  Speaker 1: doubled your your driver pool, what do you expect in
• 10:45
  Speaker 1: the next year or two.
• 10:47
  Speaker 6: Yeah, well yet another we're experiencing double digit growths, right,
• 10:52
  Speaker 6: so this is something that we're expecting over the next
• 10:55
  Speaker 6: you know, twelve months even just the balance here. Right now,
• 10:59
  Speaker 6: we're only the metropolitans and we're now expanding to the cities.
• 11:03
  Speaker 6: There's about maybe another twenty odd cities that will be
• 11:06
  Speaker 6: launching in the next sixty days. So it's been a
• 11:10
  Speaker 6: it's been you know, quite busy for us this past
• 11:13
  Speaker 6: few months.
• 11:14
  Speaker 3: Yeah, sounds like it. I mean, are the chief customers
• 11:18
  Speaker 3: of your service? Are they people going to work? Are
• 11:23
  Speaker 3: they leisure travelers? How would you describe who is using
• 11:29
  Speaker 3: and cast at any given time.
• 11:32
  Speaker 6: I think we're alternative, you know, mode of transport really
• 11:36
  Speaker 6: really one for emergency use cases for people want to
• 11:39
  Speaker 6: get to their destination much faster, you know, for work especially,
• 11:44
  Speaker 6: and also to get home to their families. Right, that's primary.
• 11:48
  Speaker 6: So really the workforces are the main constituency for for
• 11:52
  Speaker 6: my writers. Second would be really just anybody that you
• 11:57
  Speaker 6: know would like to get there faster for for whatever reason.
• 12:01
  Speaker 7: Right.
• 12:02
  Speaker 6: So our demographic is quite large, so you'll see in
• 12:05
  Speaker 6: the morning, in the evening rush hour, it's really more
• 12:08
  Speaker 6: of the workforce and a little bit of the you know,
• 12:10
  Speaker 6: more guys that need an affordable motor transportation because taxis,
• 12:15
  Speaker 6: as you can imagine, can get very expensive, especially when
• 12:18
  Speaker 6: you're when you're on the road for for a long time.
• 12:21
  Speaker 6: You know, an hour or two hour drive would really
• 12:24
  Speaker 6: be would cost you a lot more. So we have
• 12:27
  Speaker 6: those people that want a more efficient ride and also
• 12:30
  Speaker 6: a more cheaper ride. But in the you know, throughout
• 12:33
  Speaker 6: the day, as you go closer to you know, the weekend,
• 12:37
  Speaker 6: it gets pretty congested, even in the off peak hours,
• 12:41
  Speaker 6: so you just really get a wider demograph for even
• 12:44
  Speaker 6: the more affluent base that just wants to get to
• 12:47
  Speaker 6: places faster. So it's I think it's a little bit
• 12:49
  Speaker 6: of both. And as we expand to the provincial cities,
• 12:54
  Speaker 6: there's actually less and less cars and more motorcycles. If
• 12:58
  Speaker 6: you go outside of Metro Manil, the racial between cars
• 13:01
  Speaker 6: to motorcycle is eighteen is to one, So we become
• 13:05
  Speaker 6: the dominant form of transportation. As you can imagine, buying
• 13:08
  Speaker 6: a motorcycle is a lot cheaper than getting a car.
• 13:12
  Speaker 6: So this is something that a lot of people use,
• 13:14
  Speaker 6: as you know, not just their family car, not just
• 13:16
  Speaker 6: their work car, but also as a means for livelihood,
• 13:19
  Speaker 6: which is what we're trying to really espouse is give
• 13:21
  Speaker 6: people more jobs.
• 13:22
  Speaker 1: George, you, I mean, it seems like from looking at
• 13:25
  Speaker 1: your CV, you've been very active and still are in
• 13:29
  Speaker 1: media and content creation, entertainment, that sort of thing. Now
• 13:35
  Speaker 1: transportation is a wholly different industry. How did that transition happen?
• 13:41
  Speaker 1: And what does what does your exit look like? Do
• 13:44
  Speaker 1: you have an IPO planned?
• 13:47
  Speaker 6: I think everybody wants to have that type of exit.
• 13:49
  Speaker 6: Right for now, we're just trying to open to more
• 13:52
  Speaker 6: cities and serving more customers. I think my media background
• 13:56
  Speaker 6: really helps and telling the story, and it is the
• 14:00
  Speaker 6: story of freedom getting unshackled from traffic. You know, in
• 14:04
  Speaker 6: the Philippines, especially in the Metro Manila, a lot of
• 14:07
  Speaker 6: your major and minor decisions revolves around where you live
• 14:11
  Speaker 6: and how far it is to get to where you're
• 14:12
  Speaker 6: supposed to go, whether it's going on a date or
• 14:15
  Speaker 6: you know, putting your kids through school. The daily commute matters.
• 14:18
  Speaker 6: So this is something that I think a lot of
• 14:21
  Speaker 6: people use just because it allows them to do a lot,
• 14:24
  Speaker 6: you know, more things in the day and being able
• 14:27
  Speaker 6: to really create that relate that compelling story to people
• 14:31
  Speaker 6: is something that really has helped our company grow.
• 14:35
  Speaker 1: All right, great talking to you, George, and we wish
• 14:37
  Speaker 1: you the best luck. Will continue to watch to see
• 14:39
  Speaker 1: if this astronomical growth goes forward. George Royaka there. He's
• 14:45
  Speaker 1: the CEO of Ancas and the Philippines. It's like the
• 14:48
  Speaker 1: uber I Guess of motorcycles.
• 14:51
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• 15:10
  Speaker 3: So our question of m Live Question of the week
• 15:13
  Speaker 3: is has the commercial real estate crisis escalated?
• 15:16
  Speaker 1: We asked this.
• 15:17
  Speaker 3: At a time when we work sharers are slumping. It's
• 15:20
  Speaker 3: not become kind of a penny stock memish thing. And
• 15:23
  Speaker 3: the question is, has you know, has this crisis really
• 15:27
  Speaker 3: begun and gotten crazy? And the person I want to
• 15:30
  Speaker 3: ask about this is Mark Dixon. He's the CEO of IWG.
• 15:35
  Speaker 3: This is a brand that includes Regis spaces HQ signature.
• 15:41
  Speaker 3: Actually we were competitor. So the question here is what
• 15:47
  Speaker 3: is the outlook. I mean, have enough people returned to
• 15:51
  Speaker 3: office that a lot of these office spaces can move
• 15:56
  Speaker 3: forward into the future. So, Mark, thank you so much
• 15:59
  Speaker 3: for joining us. I mean, you say eight million plus
• 16:03
  Speaker 3: people use IWG workspaces.
• 16:06
  Speaker 4: What are you.
• 16:07
  Speaker 3: Seeing in terms of the trends of people coming back?
• 16:11
  Speaker 3: Is this escalating and what's the way forward as we
• 16:15
  Speaker 3: get back into the farm.
• 16:16
  Speaker 8: Yeah, well, look, thanks very much for having me. We're
• 16:21
  Speaker 8: in a similar business that we work, but we're not
• 16:23
  Speaker 8: exactly the same. Our network is very diversified.
• 16:27
  Speaker 4: You know.
• 16:27
  Speaker 8: We a large part of our customers were actually already
• 16:31
  Speaker 8: working from home.
• 16:32
  Speaker 4: We have a.
• 16:33
  Speaker 8: Significant business supports people working from home. We also have
• 16:38
  Speaker 8: buildings very much in the suburbs and in rural locations,
• 16:42
  Speaker 8: not just in the big cities. So what we published
• 16:46
  Speaker 8: this week, actually the day before, we work's announcement record
• 16:50
  Speaker 8: results for us with our revenues up to record levels
• 16:54
  Speaker 8: and also profits hitting a record level. So you know,
• 16:58
  Speaker 8: for us, we're producing seeing a lot of cash and
• 17:01
  Speaker 8: we're growing very quickly. So the market has changed. It's
• 17:06
  Speaker 8: not that the real estate market is not there anymore.
• 17:08
  Speaker 8: It's changed, and it's changed we think fundamentally and forever.
• 17:14
  Speaker 8: And this is really technology changing how people can work
• 17:18
  Speaker 8: and most importantly where they can work. So we're the
• 17:21
  Speaker 8: leaders globally in hybrid work. We operate in one hundred
• 17:25
  Speaker 8: and twenty countries. We have four thousand locations and companies
• 17:32
  Speaker 8: and individuals are working with us in a completely different way,
• 17:35
  Speaker 8: and that business is growing.
• 17:38
  Speaker 1: I will say, I will I will say that we
• 17:41
  Speaker 1: Bloomberg News used Regis office space. I remember visiting the
• 17:44
  Speaker 1: Regis and Munich when I was a CUB reporter twenty
• 17:47
  Speaker 1: years ago, and at my Berlin office right on the
• 17:50
  Speaker 1: Brandenburg Gate, there is a Regis in our building. I
• 17:53
  Speaker 1: imagine we started out leasing that space as well. So
• 17:57
  Speaker 1: you've been around for a while, because I've been around
• 18:01
  Speaker 1: for a while. Does does that give you some advantage
• 18:04
  Speaker 1: over a bombastic upstart like a we work? I mean,
• 18:10
  Speaker 1: you're very different.
• 18:12
  Speaker 8: We're very different business do we work? So Look, there's
• 18:15
  Speaker 8: nothing wrong with the industry that we works in. It's
• 18:19
  Speaker 8: just you know, they had a bad start. I mean
• 18:21
  Speaker 8: they started at the top of the market. They grew
• 18:23
  Speaker 8: very quickly, had a lot of capital, were the opposite
• 18:26
  Speaker 8: the entire business has been built with three hundred million
• 18:30
  Speaker 8: of core capital, and you know we have created everything
• 18:35
  Speaker 8: from that. But you know, overall, you know, this isn't
• 18:40
  Speaker 8: this is new real estate. This is digital real estate.
• 18:43
  Speaker 8: This is providing space to people on a platform. We
• 18:47
  Speaker 8: were doing it for Bloomberg fifteen years ago, right at
• 18:51
  Speaker 8: the beginning of Bloomberg basically, and many many other companies
• 18:56
  Speaker 8: use us around the world and it is a growing
• 18:59
  Speaker 8: part of the real estate industry.
• 19:01
  Speaker 3: So talk to me about the small towns, the I
• 19:05
  Speaker 3: guess non traditional places that you're setting up some of
• 19:08
  Speaker 3: these offices. I know this is a key strategy for you.
• 19:11
  Speaker 3: What's the thinking there in terms of well from a
• 19:15
  Speaker 3: company perspective too, why do they rent office space in
• 19:19
  Speaker 3: places outside of major metro centers.
• 19:22
  Speaker 8: Look, we don't rent office space just to sort of
• 19:27
  Speaker 8: I know, we're not in the real estate business as such.
• 19:29
  Speaker 8: You know, we provide workspace as a platform. So when
• 19:33
  Speaker 8: we sign people up or companies up, they're using us
• 19:37
  Speaker 8: across the whole platform. So they're not it's not companies
• 19:40
  Speaker 8: taking space generally in one particular location.
• 19:44
  Speaker 3: Sure, but why are they looking at these small a
• 19:46
  Speaker 3: small town areas.
• 19:47
  Speaker 8: It's close to where they live. Look, the elephant in
• 19:50
  Speaker 8: the room is commuting. You know, it's the time it
• 19:53
  Speaker 8: takes to commute, It's the cost of commuting. It's not
• 19:56
  Speaker 8: anything else but that folks generally want to work in
• 20:00
  Speaker 8: an office. They don't want to work from home. They
• 20:02
  Speaker 8: work from home some of the time, but they really
• 20:04
  Speaker 8: want to get to an office meet with other people.
• 20:06
  Speaker 8: They just don't want that office to be too far away.
• 20:10
  Speaker 8: So what we're seeing is companies allowing people and encouraging
• 20:13
  Speaker 8: people in fact, to get an office with us close
• 20:16
  Speaker 8: to where they live. So these openings we're doing in
• 20:19
  Speaker 8: provincial and rural United States, the suburbs in the US,
• 20:23
  Speaker 8: but all over the world are filling up, and they're
• 20:25
  Speaker 8: filling up with people from large corporates, mid sized companies
• 20:31
  Speaker 8: who just want to have an office close to home.
• 20:33
  Speaker 8: It's really as simple as that. They're very, very popular.
• 20:36
  Speaker 1: So in terms of you say, you started with three
• 20:39
  Speaker 1: hundred million in core capital, and that's obviously a very
• 20:42
  Speaker 1: different story to the billions we work burned. But do
• 20:45
  Speaker 1: you have any debt that you need to roll over
• 20:48
  Speaker 1: or higher interest rates affecting you at this time?
• 20:52
  Speaker 8: Well, our debt will at the end of this year
• 20:56
  Speaker 8: be about just over one time zibit, so we're low
• 20:59
  Speaker 8: level bridge. We are reducing that debt. You know, we're
• 21:03
  Speaker 8: producing a lot of cash. First half we produced about
• 21:07
  Speaker 8: two hundred million dollars of cash. We'll produce more in
• 21:10
  Speaker 8: the second half. So up until we just did our
• 21:14
  Speaker 8: investor presentations this week, you know, this year is all
• 21:18
  Speaker 8: about reducing them and we continue.
• 21:20
  Speaker 4: To do that.
• 21:21
  Speaker 8: Next year we'll look to start distributing cash either share buybacks.
• 21:26
  Speaker 8: We have somewhat got caught in the tailwind of what's
• 21:29
  Speaker 8: going on with we work. Our stock prices is basically
• 21:34
  Speaker 8: depressed and people think we're in the real estate industry.
• 21:37
  Speaker 8: It's those two things together. But we will buy back
• 21:40
  Speaker 8: shares and you know there's CEM M and A we
• 21:43
  Speaker 8: can do and you know, potentially divings. But we're in
• 21:46
  Speaker 8: a very good situation with regard to leverage and cash flow.
• 21:50
  Speaker 1: Excellent. Great to get some time with you, Mark, Hope
• 21:53
  Speaker 1: we can talk to you again in the future. Mark Dixon.
• 21:55
  Speaker 1: They're the CEO of IWG. The ticker is i wg FF.
• 22:02
  Speaker 5: Here in the US, you're listening to the team Ken's
• 22:06
  Speaker 5: are Live program Bloomberg Markets weekdays at ten am Eastern
• 22:10
  Speaker 5: on Bloomberg dot Com, the iHeartRadio app and the Bloomberg
• 22:14
  Speaker 5: Business app, or listen on demand wherever you get your podcasts.
• 22:20
  Speaker 1: I want to get to, Well, we're going to talk
• 22:22
  Speaker 1: about the actual cage match that we've been talking about
• 22:25
  Speaker 1: for weeks, is it or is it not going to
• 22:26
  Speaker 1: happen between Elon Musk and Mark Zuckerberg. But we're also
• 22:30
  Speaker 1: going to talk about the comments President Biden made I
• 22:33
  Speaker 1: think yesterday about China, about the Communist Party leaders, about
• 22:38
  Speaker 1: Shijin Ping.
• 22:39
  Speaker 3: With verbal cage match.
• 22:41
  Speaker 1: Yeah, it kind of it seems that way. He really
• 22:43
  Speaker 1: came out swinging. Howard chiwa Ewan joins us. He's an
• 22:47
  Speaker 1: international editor with Bloomberg Opinion. Howard, great to have you on.
• 22:49
  Speaker 1: I saw your newsletter this morning, the Opinion Rap, and
• 22:56
  Speaker 1: you kicked it off with this with these comments. I
• 22:59
  Speaker 1: thought President Biden and this administration wanted to get on
• 23:03
  Speaker 1: a friendlier footing with the Chinese, but he yesterday blasted
• 23:08
  Speaker 1: China's economic problems as a ticking time bomb. He said
• 23:11
  Speaker 1: the Communist Party leaders are bad folks, and he also said,
• 23:16
  Speaker 1: I think, most disturbingly, certainly from from their perspective, that
• 23:19
  Speaker 1: the Belton Road initiative. He called it the debt and
• 23:22
  Speaker 1: noose initiative. I mean, that's pretty hardcore, isn't it.
• 23:26
  Speaker 9: It's pretty hardcore. It sort of reminds me of when
• 23:30
  Speaker 9: Donald Trump said, I remember his bad ombre UH, when
• 23:34
  Speaker 9: he said bad folks. It just sort of reminded me
• 23:36
  Speaker 9: of all that UH and the UH the the news
• 23:41
  Speaker 9: UH comparison was particularly harsh because the Belt and Road
• 23:48
  Speaker 9: UH initiative by China has become a bit of a
• 23:51
  Speaker 9: UH weight around she's neck actually, because it's everyone complains
• 23:57
  Speaker 9: about how he's got that China's gotten all these developing
• 24:03
  Speaker 9: countries UH in that the problem is, of course, China
• 24:08
  Speaker 9: is left holding the bag if they don't pay anything back.
• 24:11
  Speaker 9: So so there is a there. It's a it's a
• 24:13
  Speaker 9: two sided, two edged swords, so so it's.
• 24:17
  Speaker 1: It was kind of howard, even a little bit more
• 24:20
  Speaker 1: Trumpian in that Biden seemed to be making up his
• 24:23
  Speaker 1: own facts which were not in fact facts, right. I
• 24:26
  Speaker 1: mean he said China percent growth exactly.
• 24:30
  Speaker 9: When it was actually five point five. Well everyone is suspicious,
• 24:33
  Speaker 9: of course of Chinese numbers, but that is quite quite
• 24:38
  Speaker 9: a difference, especially when America the American growth rate is
• 24:42
  Speaker 9: about what one point two one point five.
• 24:44
  Speaker 1: He also made up his own demographics for China.
• 24:48
  Speaker 9: Yes, so he turned it into a very very very
• 24:51
  Speaker 9: old country when it isn't. Actually it's it's aging, but
• 24:54
  Speaker 9: it hasn't aged that quickly in the last couple of years.
• 24:57
  Speaker 3: But I mean, how is this different than the sort
• 25:00
  Speaker 3: of bombastic commentary that we constantly got from president former
• 25:05
  Speaker 3: President Trump? You know, I remember him talking about the
• 25:09
  Speaker 3: Chinese virus and I mean, yes, uh, that's sort of
• 25:13
  Speaker 3: rhetort rhetoric. How does this differ. How does it coming
• 25:17
  Speaker 3: from Biden differ?
• 25:19
  Speaker 9: I'm not sure. And that's why I'm a little I
• 25:22
  Speaker 9: worry about it sometimes when when when the President comes
• 25:25
  Speaker 9: out and talks this way and it feels like he's
• 25:28
  Speaker 9: just speaking off the cuff.
• 25:29
  Speaker 8: Uh.
• 25:30
  Speaker 9: I just worry that the things will get a combination
• 25:35
  Speaker 9: of certain things may happen, and and the same thing
• 25:37
  Speaker 9: that happened under Trump may happen again, which is that
• 25:40
  Speaker 9: people will take him a little too much of his
• 25:43
  Speaker 9: word and go after people they assume are the enemy.
• 25:47
  Speaker 9: Uh so uh, and these would be they're fellow Americans.
• 25:53
  Speaker 9: So I worry about things like that and I'm not
• 25:57
  Speaker 9: sure what the strategy is to speak this way, except
• 26:02
  Speaker 9: that the uh, the way American UH economic diplomacy has
• 26:07
  Speaker 9: been conducted over the years has basically been it's it's
• 26:10
  Speaker 9: a zero some game and basically, if you are the
• 26:13
  Speaker 9: main rival, UH, we're going we're going to destroy you.
• 26:18
  Speaker 6: So uh.
• 26:19
  Speaker 9: So it's and it's not that the Chinese are behaving otherwise,
• 26:22
  Speaker 9: but it is that sort of lack of feeling that
• 26:27
  Speaker 9: we're all in this together. There is a global economy
• 26:30
  Speaker 9: we should share, uh Dan Moss and his column was
• 26:35
  Speaker 9: was very good. He said, you know, there's there was
• 26:36
  Speaker 9: this period when everyone was growing at the same time,
• 26:39
  Speaker 9: and then suddenly the US went into recession, China had
• 26:43
  Speaker 9: to come in. Basically it was the Chinese economy that
• 26:46
  Speaker 9: buoyed the rest of the world. And so now there
• 26:49
  Speaker 9: it's the other way around, uh, and it's the the
• 26:51
  Speaker 9: US economy is expected to bring everyone along now that
• 26:56
  Speaker 9: the Chinese economy is down, and so there we we've
• 26:58
  Speaker 9: come into what maybe be a new cycle.
• 27:01
  Speaker 7: UH.
• 27:02
  Speaker 9: Dan very nicely points out that that uh that uh,
• 27:09
  Speaker 9: when the Chinese economy is down, the US economy has
• 27:14
  Speaker 9: to come in, and if it doesn't work, out that way,
• 27:16
  Speaker 9: then we're all in trouble.
• 27:17
  Speaker 1: Well, he was also supposed to be more serious. President
• 27:21
  Speaker 1: brings some gravitas to the office, actually speaking truths rather
• 27:26
  Speaker 1: than just making up numbers. And uh, it's so weird
• 27:30
  Speaker 1: that President Biden would say this to a group of
• 27:33
  Speaker 1: his own donors in Park City, right, he's not talking
• 27:36
  Speaker 1: to the general electorate.
• 27:38
  Speaker 9: No, it's it's it's quite surprising that he wasn't aware
• 27:42
  Speaker 9: the people around him weren't aware to let him know
• 27:44
  Speaker 9: that this was going to get out.
• 27:46
  Speaker 1: Let's let's get to the other, to the real cage match.
• 27:49
  Speaker 1: I mean, we hope it's real, right, we want this
• 27:50
  Speaker 1: to happen, Howard you I guess we're a fan of
• 27:54
  Speaker 1: the m m A at some point. I have paid
• 27:56
  Speaker 1: for a few fights myself. I think it's pretty fast stuff.
• 28:00
  Speaker 1: But if if two of the richest people in the
• 28:03
  Speaker 1: world get in the cage together, man, that would be cool.
• 28:06
  Speaker 1: Is it gonna happen? You know?
• 28:09
  Speaker 9: I think if they keep on talking this way, they'll
• 28:11
  Speaker 9: have to make it happen, even though they even though
• 28:14
  Speaker 9: one or both of them may not eventually want to
• 28:17
  Speaker 9: do it.
• 28:18
  Speaker 6: Uh.
• 28:18
  Speaker 9: And you know, I like all these matches it's a
• 28:21
  Speaker 9: game of cycle psycking each other out. So at this point,
• 28:26
  Speaker 9: uh Zuckerberg looks incredibly fit. Uh while uh while must
• 28:31
  Speaker 9: looks like he needs he might need more surgery for
• 28:34
  Speaker 9: that supposed injury to his neck. So uh so. But
• 28:38
  Speaker 9: but you know, as as you know, Matt, the fighters
• 28:43
  Speaker 9: like to psych each other out. And who knows, Musk
• 28:47
  Speaker 9: might pick the right time to do this, just like
• 28:50
  Speaker 9: Floyd Mayweather used to pick the right fights with with
• 28:53
  Speaker 9: with Manny Paco uh and uh and and who knows.
• 28:58
  Speaker 9: You can't really tell whether it would be the timing
• 29:03
  Speaker 9: that will decide who the winner is.
• 29:08
  Speaker 3: Well, very interesting discussion there. I'm rooting for this. I'm
• 29:12
  Speaker 3: rooting for this match to happen.
• 29:13
  Speaker 1: I want it to happen too. And I want to say
• 29:15
  Speaker 1: that Howard has a great column on this. So if
• 29:17
  Speaker 1: you have a Bloomberg termine in front of you, type
• 29:18
  Speaker 1: OPI N go to check it out.
• 29:20
  Speaker 3: Howard. Thank you so much, Howard one joining us there.
• 29:26
  Speaker 5: You're listening to the tape cans Are Live program Bloomberg
• 29:29
  Speaker 5: Markets weekdays at ten am Eastern on Bloomberg Radio, the
• 29:33
  Speaker 5: tune in app, Bloomberg dot Com, and.
• 29:35
  Speaker 4: The Bloomberg Business App.
• 29:36
  Speaker 5: You can also listen live on Amazon Alexa from our
• 29:39
  Speaker 5: flagship New York station. Just say Alexa play Bloomberg eleven thirty.
• 29:44
  Speaker 3: We've been talking about remote work. Do people go back
• 29:48
  Speaker 3: to the offices all morning, especially with the CEO of
• 29:51
  Speaker 3: IWG who was talking about people wanting to be back
• 29:56
  Speaker 3: in the office, as we get a different flavor here
• 30:00
  Speaker 3: to bring in Hayden Brown. She's the CEO of Upwork.
• 30:04
  Speaker 3: This is a publicly traded company, reported earnings last week.
• 30:10
  Speaker 3: But before we get to kind of the numbers, in
• 30:12
  Speaker 3: the nitty gritty, Hayden, I want to understand do you
• 30:16
  Speaker 3: think that this wave of remote work is turning a corner,
• 30:23
  Speaker 3: perhaps ending a little bit, and then you know, do
• 30:26
  Speaker 3: you benefit or suffer from that at Upwork?
• 30:31
  Speaker 10: That's a great question. I think this is a long
• 30:34
  Speaker 10: term trend that's here to stay. Remote work. The cat
• 30:37
  Speaker 10: is out of the bag. And even though a lot
• 30:39
  Speaker 10: of companies are going back into the office, which is great,
• 30:41
  Speaker 10: you know, every company is going to find their place
• 30:44
  Speaker 10: on the spectrum of remote work, whether it's in office,
• 30:46
  Speaker 10: whether it's hybrid, or whether it's fully remote. The norms
• 30:50
  Speaker 10: and the capabilities that every company figured out over the
• 30:53
  Speaker 10: pandemic are things that will serve them well as they
• 30:57
  Speaker 10: now tap into some variety of room workers on a
• 31:00
  Speaker 10: platform like ours, you know, we serve the world with
• 31:03
  Speaker 10: freelance talent that they can access globally. These are professionals
• 31:07
  Speaker 10: on our platform, you know, doing one hundred and twenty
• 31:09
  Speaker 10: five plus categories of work. And every business, whether they're
• 31:13
  Speaker 10: back in the office or not, is tapping into these
• 31:16
  Speaker 10: types of professionals to augment and accelerate their work strategies.
• 31:20
  Speaker 10: So I think this is a long term trend that's
• 31:22
  Speaker 10: not reversing, even though there will be you know, fits
• 31:24
  Speaker 10: and starts as companies kind of navigate, you know, this
• 31:26
  Speaker 10: new normal.
• 31:27
  Speaker 1: I have to ask just quickly about your stock price
• 31:30
  Speaker 1: because it was soaring during the pandemic. You're one of
• 31:34
  Speaker 1: the darlings of the markets. It was up to sixty
• 31:37
  Speaker 1: dollars a share a few different times. Now it had
• 31:41
  Speaker 1: come back down to earth, but now it's heading back
• 31:44
  Speaker 1: up again. It was back down below ten and now
• 31:47
  Speaker 1: we're up above fourteen. How much do you have to
• 31:50
  Speaker 1: watch this? As an agent? I guess of the owner's
• 31:53
  Speaker 1: right of the company and what's influencing it.
• 31:56
  Speaker 10: You know, we are here building a business for the
• 31:58
  Speaker 10: long term through durable, profitable growth, and I think that's
• 32:01
  Speaker 10: really the story. This is a company that's still in
• 32:03
  Speaker 10: its early innings. Frankly, you know, we went public in
• 32:05
  Speaker 10: twenty eighteen and we are going after a trillion dollar TAM.
• 32:09
  Speaker 10: So this is TAM total addressable market. Okay, okay, So
• 32:13
  Speaker 10: we're unlocking a huge addressable market opportunity for our customers,
• 32:17
  Speaker 10: for our shareholders, and I think that's really the headline.
• 32:20
  Speaker 10: We did have a great quarter, you know, raised our
• 32:23
  Speaker 10: guidance for the year on both the top line and
• 32:24
  Speaker 10: the bottom line, but this is still a business that's
• 32:28
  Speaker 10: in its early innings, and I think that's what's really
• 32:29
  Speaker 10: exciting is we are executing well, we're performing well, and
• 32:32
  Speaker 10: yet we have a ton of runway ahead of us.
• 32:35
  Speaker 3: I mean, I see kind of a discrepancy here, right
• 32:37
  Speaker 3: because these companies are asking their workers to return to
• 32:41
  Speaker 3: the office because they believe they collaborate better. Yet you're
• 32:44
  Speaker 3: saying freelance on the rise and that there's a future
• 32:48
  Speaker 3: for this. Are there certain places where you're seeing a
• 32:51
  Speaker 3: particular uptake and demand with respect to the clients that
• 32:57
  Speaker 3: you know, the corporate clients that are looking for talent,
• 33:00
  Speaker 3: are there things that they're going to just want to
• 33:02
  Speaker 3: keep out of their business in the long term and
• 33:05
  Speaker 3: just kind of turn to outsource to freelance folks when
• 33:08
  Speaker 3: they need it.
• 33:10
  Speaker 10: You know, we serve every kind of company that is
• 33:12
  Speaker 10: looking for freelance talent, whether they're in office, whether they're
• 33:16
  Speaker 10: back working remotely, and also small companies through large enterprises
• 33:20
  Speaker 10: are turning to this model. You know, freelancing was a
• 33:22
  Speaker 10: secular trend that was on the rise prior to the pandemic,
• 33:25
  Speaker 10: and it only accelerated through the pandemic because workers figured
• 33:28
  Speaker 10: out that they really want to work this way. You know,
• 33:30
  Speaker 10: they are excited to have the freedom the flexibility to
• 33:33
  Speaker 10: do this, and we see younger generations of workers leaning
• 33:36
  Speaker 10: into this even more. Forty three percent of Generation Z
• 33:39
  Speaker 10: is freelancing right now. So companies are realizing if they
• 33:42
  Speaker 10: want to tap into the workers they need with the
• 33:44
  Speaker 10: skills they need, they absolutely have to be tapping into
• 33:47
  Speaker 10: the freelance economy. So this is why companies of all
• 33:50
  Speaker 10: sizes are tapping into this workforce, and certainly as they're
• 33:52
  Speaker 10: looking at things like generative AI, which is a huge
• 33:55
  Speaker 10: and growing category. For US, we saw these jobs increase
• 33:58
  Speaker 10: one thousand percent in Q two versus Q four. Companies
• 34:02
  Speaker 10: that need these types of workers with these types of
• 34:04
  Speaker 10: very current skills have to tap into freelancers to get
• 34:07
  Speaker 10: this type of work done.
• 34:09
  Speaker 1: I recently learned about traveling nurses. I had never realized
• 34:13
  Speaker 1: that it was such a massive industry. And I talked
• 34:17
  Speaker 1: with somebody who ran a company that helped you helped
• 34:21
  Speaker 1: them administrate their their jobs. It's interesting they make more
• 34:26
  Speaker 1: money than the nurses that are actually installed permanently at
• 34:29
  Speaker 1: the hospital. I'm wondering what the freelancers that you bring
• 34:32
  Speaker 1: in are making. I mean, my initial thought would be
• 34:36
  Speaker 1: they must not make very much money because they're freelancers,
• 34:39
  Speaker 1: But then maybe they do. It's the opposite that's amazing.
• 34:41
  Speaker 10: This is a this is a very lucrative career. And
• 34:43
  Speaker 10: I mean so in AI, for example, we're seeing people
• 34:46
  Speaker 10: with these skills are making fifty percent more than the average.
• 34:49
  Speaker 10: And again to your point, folks are joining the freelance
• 34:53
  Speaker 10: economy because this is a better way for them. It's
• 34:56
  Speaker 10: actually more safe and secure. They know they can't get
• 34:58
  Speaker 10: laid off, so this is something where they've got multiple
• 35:01
  Speaker 10: steady clients, and it really insulates them from the vagaries
• 35:04
  Speaker 10: of the normal economy and they're earning more. We've heard
• 35:08
  Speaker 10: from our talent frequently they say no amount of money
• 35:12
  Speaker 10: would pay them to go back into a full time,
• 35:15
  Speaker 10: normal job because they make more, they have more freedom,
• 35:17
  Speaker 10: they more flexibility, they have control over their schedule. So
• 35:20
  Speaker 10: everything about the work arrangement as a freelancer is actually
• 35:22
  Speaker 10: working better for them.
• 35:23
  Speaker 1: Now.
• 35:24
  Speaker 10: Of course, this isn't a way of work that's going
• 35:25
  Speaker 10: to be suitable for everybody, but everyone has to do this.
• 35:27
  Speaker 1: That's like a gig economy.
• 35:28
  Speaker 10: No, no, not at all. I mean these are independent workers.
• 35:31
  Speaker 10: These are professionals. They set their own rates, they set
• 35:33
  Speaker 10: their own schedule, they negotiate all of this for themselves.
• 35:35
  Speaker 10: And these are independent entrepreneurs, you know, really working on
• 35:38
  Speaker 10: their own terms.
• 35:39
  Speaker 3: Do benefits kind of offset that at all? I mean,
• 35:42
  Speaker 3: these are people who have to go and probably get
• 35:44
  Speaker 3: their own healthcare, all that sort of thing.
• 35:46
  Speaker 10: I mean, it depends on the geography.
• 35:47
  Speaker 1: Of course.
• 35:47
  Speaker 10: In the US, you know, we have a certain benefit
• 35:49
  Speaker 10: setup and also we you know, serve customers all over
• 35:51
  Speaker 10: the globe, so some of them are buying their own benefits.
• 35:54
  Speaker 10: Some of them obviously are in you a relationship with
• 35:56
  Speaker 10: a spouse who has those benefits, So it really depends
• 35:58
  Speaker 10: on the worker, but that is absolutely not in heediment
• 36:00
  Speaker 10: for them to being able to work this way.
• 36:02
  Speaker 1: It definitely lays bare, I'm sure for you the stark
• 36:04
  Speaker 1: differences between the healthcare system in this country and those
• 36:08
  Speaker 1: in other countries.
• 36:09
  Speaker 10: It totally does. But when you think about it, you know,
• 36:11
  Speaker 10: no one should be barred from working the way they
• 36:13
  Speaker 10: want and doing the job they want just because of
• 36:15
  Speaker 10: a benefits issue, right, And that's just the saddest thing.
• 36:18
  Speaker 10: But that's what we see people saying. You know what,
• 36:19
  Speaker 10: even if the benefits are more challenging, I still want
• 36:22
  Speaker 10: to go and work this way, and absolutely they should
• 36:24
  Speaker 10: be empowered to do that, all.
• 36:25
  Speaker 1: Right, Hayden, thanks so much for coming in. Fascinating conversation,
• 36:28
  Speaker 1: fascinating business as well. Hayden Brown is the CEO of Upwork,
• 36:33
  Speaker 1: the ticker on the Nasdaq up WUK, and I, you know,
• 36:38
  Speaker 1: I think this is all part of the way the
• 36:41
  Speaker 1: economy changed post pandemic. It's not like we're going to
• 36:44
  Speaker 1: go back to normal. We're progressing into the future.
• 36:48
  Speaker 5: You're listening to the tape catch a live program Bloomberg
• 36:51
  Speaker 5: Markets weekdays at ten am Eastern on Bloomberg Radio, the
• 36:55
  Speaker 5: tune in app, Bloomberg dot Com, and.
• 36:57
  Speaker 4: The Bloomberg Business App.
• 36:58
  Speaker 5: You can also listen live on Amazon Alexa from our
• 37:01
  Speaker 5: flagship New York station, Jo Say Alexa play Bloomberg eleven thirty.
• 37:06
  Speaker 1: Lisa Donahue joins US co Head of the Americas in
• 37:09
  Speaker 1: Asia at the global consultancy firm Alex Partners. Lisa, thanks
• 37:13
  Speaker 1: so much for joining us. A lot going on on
• 37:15
  Speaker 1: this Friday that we thought was going to be a
• 37:17
  Speaker 1: slow day in August, but in terms of the markets,
• 37:20
  Speaker 1: it really is still slow and it has been all week.
• 37:24
  Speaker 1: Even though we got inflation data. It just kind of
• 37:27
  Speaker 1: proved what we thought we already knew. How do you
• 37:30
  Speaker 1: look at the current US economic and Wall Street market
• 37:35
  Speaker 1: situation right now?
• 37:37
  Speaker 11: First, thanks for having me, and yes, very busy day today.
• 37:41
  Speaker 11: You know, I think some of the market information that
• 37:43
  Speaker 11: we're getting continues on the trend of confusing. Right If
• 37:48
  Speaker 11: you look at the consumer debt and you look at
• 37:51
  Speaker 11: the credit card debt, it's up to one trillion, and
• 37:54
  Speaker 11: that would suggest that the consumer is feeling comfortable, and
• 37:59
  Speaker 11: perhaps they are, but also seeing signs of a little
• 38:01
  Speaker 11: bit of a pullback which continues on the trend of
• 38:04
  Speaker 11: push pull, which I think your reporter had just said. So,
• 38:08
  Speaker 11: what we're seeing is, you know, companies and leaders are
• 38:12
  Speaker 11: thinking ahead and they are taking this confusion time as
• 38:17
  Speaker 11: an opportunity to really work on the hygiene of their
• 38:22
  Speaker 11: businesses and think about what they should be doing to
• 38:25
  Speaker 11: be prepared for the continued disruption and the continued you know,
• 38:29
  Speaker 11: lack of clarity on where we're going from inflation, interest rates, disruption,
• 38:36
  Speaker 11: you know, war in Ukraine, et cetera.
• 38:38
  Speaker 3: Well, Lisa, before we get some of the product geopolitical issues,
• 38:43
  Speaker 3: you talk about hygiene of the business. Cost cutting layoffs
• 38:47
  Speaker 3: has been a theme we've seen across tech and finance.
• 38:50
  Speaker 3: To a degree, have we gone have business has gone
• 38:54
  Speaker 3: too far at this point?
• 38:57
  Speaker 11: You know, when I say hygiene, I don't necessarily mean layoffs.
• 39:02
  Speaker 11: I mean taking a look at non core assets, taking
• 39:07
  Speaker 11: a look at your employee base and is there upskilling
• 39:11
  Speaker 11: that you have to do? Are you is your organization
• 39:14
  Speaker 11: and the way you're aligned does it fit for purpose?
• 39:17
  Speaker 11: You know, in some cases it might mean layoffs, but
• 39:21
  Speaker 11: in a lot of cases it doesn't. It could mean
• 39:23
  Speaker 11: just taking a look strategically at what you're doing and
• 39:26
  Speaker 11: should you be doing things differently In terms.
• 39:29
  Speaker 1: Of the geopolitical issues US China, I mean President Biden
• 39:35
  Speaker 1: already kind of ratchet those ratchet of those up last
• 39:38
  Speaker 1: night saying that they're bad folks, and he called the
• 39:41
  Speaker 1: Belton Roade initiative the debt and noose initiative. Now we've got,
• 39:45
  Speaker 1: you know, us more problems in US politics. Does this
• 39:50
  Speaker 1: unrest play into your strategy at all?
• 39:53
  Speaker 11: You know it does in some ways. What we're seeing
• 39:58
  Speaker 11: some of our clients doing is is looking at alternatives
• 40:02
  Speaker 11: and parallel supply chains. Because if one thing COVID and
• 40:07
  Speaker 11: that major disruption to actually getting product taught us is
• 40:11
  Speaker 11: that yes, low cost is important, but surety of products
• 40:15
  Speaker 11: is as important, if not more important. So what we're
• 40:18
  Speaker 11: seeing as a result of the political uncertainty, you know,
• 40:22
  Speaker 11: the relations with China, some of the Russian concerns, is
• 40:27
  Speaker 11: we're seeing more on shoring and more alternative sourcing for
• 40:32
  Speaker 11: where to put your supply chain. We're seeing folks go
• 40:34
  Speaker 11: to Japan as an alternative from an APAC perspective, and
• 40:40
  Speaker 11: we're seeing folks really looking at shortening the supply chains
• 40:43
  Speaker 11: and looking, as I said, at other considerations instead of
• 40:46
  Speaker 11: just price.
• 40:47
  Speaker 3: With respect to moving business assets around. We had a
• 40:52
  Speaker 3: really great, big take earlier in the week about how
• 40:56
  Speaker 3: trade is and the incentives offered by the Inflation Reduction
• 41:02
  Speaker 3: Act or really shaking things up for where companies put
• 41:06
  Speaker 3: their manufacturing, where they hire groups of new people. How
• 41:12
  Speaker 3: much interest are the executives you're speaking to giving to
• 41:18
  Speaker 3: where can I get the best the best incentives? And
• 41:22
  Speaker 3: how much more is the answer of the United States
• 41:25
  Speaker 3: than it was maybe six months ago.
• 41:28
  Speaker 11: You know, I think it's it's a big consideration. And
• 41:31
  Speaker 11: we talk with a lot of folks on a global basis,
• 41:34
  Speaker 11: And I was speaking with the CEO of a large
• 41:38
  Speaker 11: energy company that super focused on renewables and you know,
• 41:43
  Speaker 11: green initiatives, and they were talking about the genius of
• 41:48
  Speaker 11: this act and that it is ultimately going to make
• 41:52
  Speaker 11: the US more competitive when it comes to renewable green
• 41:56
  Speaker 11: initiatives because of the incentives that are baked in to it.
• 42:00
  Speaker 11: So I do think that it is something that leaders
• 42:04
  Speaker 11: are thinking of and should be thinking of as part
• 42:07
  Speaker 11: of the full picture on where you want to put
• 42:09
  Speaker 11: your investment dollars.
• 42:11
  Speaker 1: Rates are rising obviously five hundred and fifty basis points
• 42:15
  Speaker 1: since last March, and as inflation comes down, the real
• 42:18
  Speaker 1: rates even higher. How much more difficult does this make
• 42:21
  Speaker 1: the investment outlook or does it make things even juicier?
• 42:28
  Speaker 11: Well, I think it depends on your perspective.
• 42:30
  Speaker 6: Right.
• 42:31
  Speaker 11: If you are a private equity firm and you're looking
• 42:34
  Speaker 11: to do deals, which is what they do, it means
• 42:37
  Speaker 11: they have to look at diligence deeper, They have to
• 42:41
  Speaker 11: look at synergistic opportunities more. They have to be a
• 42:44
  Speaker 11: little more creative from a structuring perspective because the cost
• 42:47
  Speaker 11: of capital is so much higher. If you are a
• 42:51
  Speaker 11: semiconduction manufacturer and you're trying to onshore, which we're seeing
• 42:54
  Speaker 11: a lot of in the US, you need to look
• 42:57
  Speaker 11: at alternatives. You need to look at quasi equity type
• 43:00
  Speaker 11: investments in addition to just that. So I think it's
• 43:05
  Speaker 11: forcing folks to be a bit more creative in how
• 43:09
  Speaker 11: they structure and where their investment dollars are going.
• 43:13
  Speaker 1: All right, Lisa, thanks so much for joining us. Sorry
• 43:16
  Speaker 1: that we took a little longer to get to you
• 43:18
  Speaker 1: today because of the breaking news, but we really appreciate
• 43:20
  Speaker 1: you sticking with us Lisa Donahue, co head of the
• 43:22
  Speaker 1: Americas in Asia and at the global consultancy firm Alex Partners.
• 43:27
  Speaker 1: Great to have you.
• 43:29
  Speaker 5: You're listening to the tape cans Are Live program Bloomberg
• 43:32
  Speaker 5: Markets weekdays at ten am Eastern on Bloomberg Radio, the
• 43:35
  Speaker 5: tune in app, Bloomberg dot Com, and.
• 43:37
  Speaker 4: The Bloomberg Business App.
• 43:39
  Speaker 5: You can also listen live on Amazon Alexa from our
• 43:41
  Speaker 5: flagship New York station, Just say Alexa Play Bloomberg eleven thirty.
• 43:48
  Speaker 1: I want to get back to the breaking news that
• 43:51
  Speaker 1: we have Hunter Biden, the Hunter Biden probe over the
• 43:54
  Speaker 1: DOJ has been assigned a special council. So we saw
• 43:58
  Speaker 1: briefly Merrek Garland come out and make a statement appointing
• 44:02
  Speaker 1: this special counsel to oversee the government's ongoing criminal investigation
• 44:06
  Speaker 1: into President Biden's son over his taxes, as well as
• 44:12
  Speaker 1: a number of other issues. Certainly the Republicans hope there
• 44:14
  Speaker 1: will be another number of other issues there. We have
• 44:18
  Speaker 1: Nick Ackerman on the phone right now. He's a former
• 44:20
  Speaker 1: assistant special Watergate prosecutor, and Nick, you know, typically we
• 44:25
  Speaker 1: would talk to you about all things Trump. Increasingly these
• 44:31
  Speaker 1: conversations are about the Biden family, certainly about Hunter Biden.
• 44:35
  Speaker 1: We thought it was all going to be over a
• 44:37
  Speaker 1: couple of weeks ago at the plea agreement, and now
• 44:39
  Speaker 1: it's come to this. Are you surprised, Not completely.
• 44:43
  Speaker 7: I was surprised that the plea didn't go down on
• 44:46
  Speaker 7: the day it was supposed to, but since then this
• 44:50
  Speaker 7: is not at all surprising. I think it was pretty
• 44:52
  Speaker 7: clear at that point that definitely would not have taken
• 44:57
  Speaker 7: care of all the other matters of that might be
• 45:00
  Speaker 7: under investigation. And I think that Merrick Garland did the
• 45:05
  Speaker 7: right thing. Appointed Weiss, had made it official that he's
• 45:08
  Speaker 7: really a special prosecutor in this thing, and that he
• 45:12
  Speaker 7: has complete independence as he had before. And I think
• 45:16
  Speaker 7: it just solidifies that. Don't forget he was appointed initially
• 45:20
  Speaker 7: as the US Attorney in Delaware, Yeah, by Donald Trump.
• 45:25
  Speaker 7: So I think this just you know, provides more distance
• 45:29
  Speaker 7: between the Department of Justice and the prosecutor, but does
• 45:34
  Speaker 7: it give him.
• 45:34
  Speaker 3: Any extra tools. I just you know, it seems like
• 45:37
  Speaker 3: an investigation had had been happening for a long time.
• 45:43
  Speaker 3: All the members of the Biden administration had said, you know,
• 45:46
  Speaker 3: Mary Garland's given him a bunch of tools whatever he wants,
• 45:51
  Speaker 3: but now you know the escalation here. June Grassa was
• 45:55
  Speaker 3: just with us, she's a legal analyst at Bloomberg Law
• 45:57
  Speaker 3: and was saying, you know, this looks like political move
• 46:00
  Speaker 3: a plain and simple.
• 46:01
  Speaker 7: Well, I think it's part of what Merrick Garland has
• 46:04
  Speaker 7: done all around. I mean, he has tried, on these
• 46:07
  Speaker 7: types of cases that affects the administration and particularly Joe Biden,
• 46:14
  Speaker 7: to make sure that the person who's doing the investigation,
• 46:17
  Speaker 7: whether it's Jack Smith or whether it's wise, that they
• 46:21
  Speaker 7: are completely independent. I mean, I think what Garland is
• 46:25
  Speaker 7: trying to do is basically used the model of Archibald Cox,
• 46:30
  Speaker 7: who has made the first Watergate special prosecutor where he
• 46:34
  Speaker 7: really had total independence, wasn't answerable to the Department of Justice.
• 46:40
  Speaker 7: And I think that's what Merrick Garland is trying to
• 46:43
  Speaker 7: set up, so that there is complete buffer between the
• 46:48
  Speaker 7: Department of Justice and Joe Biden. I mean, I think
• 46:52
  Speaker 7: that's really the whole purpose of this is to have
• 46:55
  Speaker 7: somebody in there who is truly independent, and I think
• 46:58
  Speaker 7: this was a way to make it more formalized, particularly
• 47:03
  Speaker 7: if there are other areas to be investigated. Now having
• 47:06
  Speaker 7: said that, a question, you know what is left to investigate,
• 47:11
  Speaker 7: mainly because you've got a statute of limitations that goes
• 47:14
  Speaker 7: for five years and most of these matters, and if
• 47:18
  Speaker 7: you take the two tax crimes, they were at a period
• 47:23
  Speaker 7: of time. Now that's getting beyond a normal statute of
• 47:26
  Speaker 7: limitations for anything, probably other than tax crimes. So I just,
• 47:33
  Speaker 7: you know, I think it's in some senses it is
• 47:35
  Speaker 7: political to the extent that it's set up so that
• 47:40
  Speaker 7: there is no question of politics not being involved. I mean,
• 47:44
  Speaker 7: I think, you know, to the extent you're saying it's political,
• 47:47
  Speaker 7: I'm having complete independence from the Department of Justice and
• 47:51
  Speaker 7: from Merrick Garland. Just adds to the fact that the
• 47:55
  Speaker 7: person has the independent ability to do what he's doing,
• 47:59
  Speaker 7: and even onto this crazy special prosecutor regulation, it's supposedly
• 48:05
  Speaker 7: the special prosecutor ultimately answers to the Attorney General. I
• 48:09
  Speaker 7: think that Merrick Garland has been and made it clear
• 48:12
  Speaker 7: that he's been totally hands off on all of these matters,
• 48:14
  Speaker 7: whether it's Jack Smith or now it's going to be wise.
• 48:18
  Speaker 1: I mean, frankly, Nick, wouldn't they have been a lot
• 48:20
  Speaker 1: better off if they've done this from the get go.
• 48:23
  Speaker 1: Because the concerns are on the Republican side, not just
• 48:27
  Speaker 1: the tax crimes or the gun issue, but the the
• 48:33
  Speaker 1: sort of foot dragging, you know, the idea that if
• 48:37
  Speaker 1: the president's son is a tax evader, he can get
• 48:41
  Speaker 1: away with it, or he'll be given a lighter sentence,
• 48:44
  Speaker 1: Like wouldn't President Biden or the administration of Ben smarter
• 48:49
  Speaker 1: to get this out of the way at the at
• 48:51
  Speaker 1: the beginning.
• 48:52
  Speaker 7: Oh, I totally agree with you, But I think from
• 48:55
  Speaker 7: Merrick Donland's standpoint, appointing somebody who to investigated, who was
• 49:00
  Speaker 7: a Trump appointee as US attorney in Delaware had the
• 49:05
  Speaker 7: same effect, But in some ways it didn't. And I
• 49:09
  Speaker 7: think what he's trying to do is emphasize that now.
• 49:11
  Speaker 7: It also sends a signal that there are other matters
• 49:14
  Speaker 7: to be investigated. He wouldn't be doing this unless there
• 49:18
  Speaker 7: was something more to investigate beyond the tax crimes. So
• 49:23
  Speaker 7: I think this probably also signals the fact that there's
• 49:27
  Speaker 7: not going to be a plea anytime soon. That I
• 49:31
  Speaker 7: think that there are other matters that they're looking at,
• 49:34
  Speaker 7: and I don't think they're in a position yet to
• 49:36
  Speaker 7: say they're going to put this all behind Hunter Biden.
• 49:40
  Speaker 9: Yeah.
• 49:40
  Speaker 3: I mean, so there was this closed door testimony of
• 49:44
  Speaker 3: Hunter Biden's x business partner, Devin Archer, and I think
• 49:48
  Speaker 3: the takeaway from some of the press was that this
• 49:52
  Speaker 3: didn't really back up the Republicans accusing President Biden, you know,
• 49:58
  Speaker 3: of crime and and corruption. But there were some bits
• 50:03
  Speaker 3: and pieces in there. Was there anything there for you
• 50:05
  Speaker 3: that you thought, you know, this might be potentially the
• 50:08
  Speaker 3: subjective of the a probe that could be continued under
• 50:13
  Speaker 3: David Wise.
• 50:14
  Speaker 7: Yeah, not really. I mean it sounded like Hunter Biden
• 50:19
  Speaker 7: had his dad caught in a couple of times, five
• 50:22
  Speaker 7: times over a long period of time, basically trading off
• 50:25
  Speaker 7: his name but trading off his connection. You know, a
• 50:29
  Speaker 7: lot of other presidents in the past have had the
• 50:31
  Speaker 7: same problem, and Richard Nixon did, Jimmy Carter did, even
• 50:36
  Speaker 7: Hillary Quinton had this problem with her brother that relatives.
• 50:41
  Speaker 7: You know, if you can pick your friends, but you
• 50:45
  Speaker 7: can't pick your relatives basically, and it's always been something
• 50:49
  Speaker 7: that's be deviled presidents and people in high public office.
• 50:56
  Speaker 7: So I don't think it really reflected that there was
• 50:59
  Speaker 7: any there there. But look, the public has to be
• 51:02
  Speaker 7: assured that everything is being done by the book that
• 51:06
  Speaker 7: everything that's out there is being investigated, and at the
• 51:10
  Speaker 7: end of the day, I think this will give that assurance.
• 51:13
  Speaker 7: You know, One he's a special made the special counsel
• 51:16
  Speaker 7: on this, and two he was a former Trump appointee
• 51:21
  Speaker 7: Ian a Republican who was the Delaware US attorney who's
• 51:25
  Speaker 7: been kept on and he's the one investigating it. So
• 51:29
  Speaker 7: I really don't see how you can have anybody with
• 51:32
  Speaker 7: any better credentials to do this than Weiss. And I
• 51:36
  Speaker 7: think this, you know, provides exactly what needs.
• 51:40
  Speaker 4: To be done.
• 51:41
  Speaker 1: Did we find out who the big guy was?
• 51:43
  Speaker 4: Nick?
• 51:43
  Speaker 1: I mean if in the emails that the post got
• 51:47
  Speaker 1: out of the laptop in the quote on the CFC
• 51:52
  Speaker 1: China Energy venture, when they said held by h for
• 51:58
  Speaker 1: the big guy, did we ever figure out who that was? Us?
• 52:04
  Speaker 1: Did we lose Nick?
• 52:06
  Speaker 7: Oh?
• 52:06
  Speaker 3: No, I think we might have lost Nick.
• 52:07
  Speaker 1: I'm looking at the I'm looking at the zoom screen.
• 52:11
  Speaker 1: Oh no, Nick, there you are? So did we did we?
• 52:13
  Speaker 1: Do we care? I mean, is there any there there?
• 52:16
  Speaker 7: Well, so far they haven't found any there there. But
• 52:19
  Speaker 7: it doesn't mean that they shouldn't investigate it and assure
• 52:22
  Speaker 7: the public that they've looked at everything before they close
• 52:25
  Speaker 7: out the case. I think that is what they've got
• 52:27
  Speaker 7: to do, all right, and that's what Licen's job is.
• 52:30
  Speaker 1: Yep. Nick, thanks so much for joining us. Really appreciate
• 52:33
  Speaker 1: you jumping in on this breaking news. Nick Ackerman, former
• 52:36
  Speaker 1: special Watergate Watergate prosecutor, talking to us about the breaking
• 52:41
  Speaker 1: news that the Department of Justice will appoint a special
• 52:45
  Speaker 1: prosecutor in the Hunter Biden probe and that that prosecutor
• 52:50
  Speaker 1: is David Weiss. Thanks for listening to the Bloomberg Markets podcast.
• 52:58
  Speaker 1: You can subscribe and listens into interviews with Apple Podcasts
• 53:02
  Speaker 1: or whatever podcast platform you prefer. I'm Matt Miller. I'm
• 53:06
  Speaker 1: on Twitter at Matt Miller nineteen seventy three. And I'm
• 53:09
  Speaker 1: Faull Sweeney. I'm on Twitter at pt Sweeney.
• 53:11
  Speaker 6: Before the podcast, you can always catch us worldwide at
• 53:14
  Speaker 6: Bloomberg Radio