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Global Markets, Fixed Income, Rebuilding Puerto Rico · Bloomberg Intelligence

• 0:02
  Speaker 1: Welcome to the Bloomberg Penl Podcast. I'm Paul swing you,
• 0:05
  Speaker 1: along with my co host Lisa Brahma wits each day
• 0:07
  Speaker 1: we bring you the most noteworthy and useful interviews for
• 0:10
  Speaker 1: you and your money. Whether at the grocery store or
• 0:12
  Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple
• 0:15
  Speaker 1: podcast or wherever you listen to podcasts, as well as
• 0:17
  Speaker 1: at Bloomberg dot com. Right now, let's switch gears. We'll
• 0:23
  Speaker 1: take a look at what some of those global trade
• 0:25
  Speaker 1: issues are doing for markets. Who welcome Louis lou portfolio manager,
• 0:29
  Speaker 1: member of the Emerging Markets Investment Committee at Brandi's Investment Partners.
• 0:33
  Speaker 1: It joins us on the phone from San Diego. Louis,
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  Speaker 1: thanks so much for joining us. You know, just those
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  Speaker 1: headlines from the President, you know, talking about global trade
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  Speaker 1: and what's going on with global trade. Clearly the uncertainties
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  Speaker 1: created by the uncertainty of global trade really weighing on markets.
• 0:48
  Speaker 1: How are you kind of factoring that into your investment outlook?
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  Speaker 1: Thanks Paul for having me on Good Morning everybody. UM,
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  Speaker 1: just to kind of set the stage. You know, we're
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  Speaker 1: long term value investors at Brands and our approach is
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  Speaker 1: really to focus on the fundamental economic worth of the
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  Speaker 1: companies that we invest in. UH, and we call that
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  Speaker 1: the intrinsic value of these companies, and our approach is
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  Speaker 1: to purchase them at a at an attractive discount of
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  Speaker 1: the intrinsic values. And within that context, UM, a lot
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  Speaker 1: of these geopolitical events, trade events that you mentioned, have
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  Speaker 1: created numerous opportunities, whether it's UM, the US China trade
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  Speaker 1: frictions that we're seeing, or the renegotiation on NAFTA or
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  Speaker 1: even Brexit. I mean, these have created opportunities whereas stocks
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  Speaker 1: are selling attractive discounts to their long term fair value,
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  Speaker 1: can you give us can you give us some examples?
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  Speaker 1: So some of those examples would be UM. You know,
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  Speaker 1: the Mexican real estate companies or the fevers that we
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  Speaker 1: call them, have been selling a big discounts, large dividend yields. UM.
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  Speaker 1: You know, some of those companies that have been affected
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  Speaker 1: would be technology companies UM in in China. UM. Those
• 2:00
  Speaker 1: are some of the things that we've looked at. UM.
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  Speaker 1: There's also a lot of other examples. But really, UM, Lisa,
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  Speaker 1: the key thing to bear in mind is we're not
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  Speaker 1: trying to predict particular outcomes. We don't think that anybody can.
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  Speaker 1: I think our approach is really too buy uh when
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  Speaker 1: we feel that a worst case scenario has been priced in. UM.
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  Speaker 1: Some days, you know, these stocks will trade as if
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  Speaker 1: there's never going to be a trade deal. And then
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  Speaker 1: on other days the market is euphoric and it's pricing
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  Speaker 1: in a very good outcome. And on those occasions we're
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  Speaker 1: gonna be lightening up the position or we stopped buying.
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  Speaker 1: But if a worst case scenario is priced in, then
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  Speaker 1: we're active in the market. UM using a flexible and
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  Speaker 1: nimble approach to investing in these companies. So all of
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  Speaker 1: a sudden that you recently took a trip business trip
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  Speaker 1: through Asia over the STUMMAC, it's a sense of so
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  Speaker 1: you'r key takeaways there because clearly you know that the
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  Speaker 1: uncertainties of trade between the US and China, you know,
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  Speaker 1: really key to I think investors psyches now. Yes, UM,
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  Speaker 1: I was in seven cities in Asia a couple of
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  Speaker 1: months ago, and I think the striking thing to notice that,
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  Speaker 1: you know, if you go to mainland China, whether it's Shanghai,
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  Speaker 1: Beijing or Shansin, you know, the the admustry is very different.
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  Speaker 1: I think there's a feeling of calm, there's a feeling
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  Speaker 1: of you know that the economy has the capability to
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  Speaker 1: withstand some of these external shocks. UM. So the feeling
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  Speaker 1: that we get from mainland China is very different. But
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  Speaker 1: across the border in Hong Kong, UM, my witness firsthand
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  Speaker 1: some of the protests that have been taking place and
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  Speaker 1: the disruptions to normal business operations um. And just kind
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  Speaker 1: of to Lesa's point earlier, this has given way to
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  Speaker 1: some opportunities in the retail industry. Uh, some of the
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  Speaker 1: banks in Hong Kong, you know, showing very good value. Um.
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  Speaker 1: And we're not exactly sure how the protests will end
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  Speaker 1: or how it's going to conclude, but if you look
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  Speaker 1: at the history, these protests have been episodic. They come
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  Speaker 1: and go. Uh, there's going to be some kind of
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  Speaker 1: resolution over you know, the shorter or medium term. And
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  Speaker 1: you know that has created opportunities as well. You know,
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  Speaker 1: I'm wondering if there has to be a base case
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  Speaker 1: when it comes to some of these geopolitical occurrences when
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  Speaker 1: you're making decisions about whether something is undervalued or overvalued,
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  Speaker 1: because you know, I mean, at any given point, the
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  Speaker 1: the outcome could be completely bifurcated and lead to completely
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  Speaker 1: bifurcated market results. So how what what is your sort
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  Speaker 1: of base case for the next twelve months. Yeah, I
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  Speaker 1: think the base case is that the US China relationship,
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  Speaker 1: you know, whether it's the economic relationship, whether it's the
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  Speaker 1: trade relationship, is too important for the global economy for
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  Speaker 1: there to be you know, a sustained adverse outcome, right,
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  Speaker 1: so you can see that, uh, you know, particularly for
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  Speaker 1: the US point of view. You know, the terrorists starting
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  Speaker 1: to have a negative impact. So the trade war has
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  Speaker 1: kind of shifted to other areas right looking at UM,
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  Speaker 1: you know, American capital going into Chinese capital markets, things
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  Speaker 1: like that. So the exact form of these tensions can change,
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  Speaker 1: the shape can shift. But then the longer term base
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  Speaker 1: case over the next twelve months is that the relationship
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  Speaker 1: is too important. There will be some kind of resolution
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  Speaker 1: or de escalation, And that is kind of the base
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  Speaker 1: case that we use UM to value some of the companies.
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  Speaker 1: And then if there's a significant down draft or deviation
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  Speaker 1: that is priced in that we don't think will hold
• 5:23
  Speaker 1: over the next three or five years, then that would
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  Speaker 1: be a buying opportunity. Of course, you know, our approach
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  Speaker 1: would allow for some of these estimates uh to change,
• 5:33
  Speaker 1: you know, if if the information and situation changes. Is dynamic,
• 5:37
  Speaker 1: So we're not holding to any one particular scenario, but
• 5:40
  Speaker 1: trying to have a flexible approach and the factor in
• 5:44
  Speaker 1: some of the you know, any lasting developments into our
• 5:46
  Speaker 1: base case. So it's interesting because you say that this
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  Speaker 1: sort of base cases is that you know, we do
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  Speaker 1: get something. I do wonder though, what we're seeing right
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  Speaker 1: now is the lack of certainty itself weighing on economic
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  Speaker 1: growth and activity. How do you factor that in? You know,
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  Speaker 1: it's it's really kind of the deviation from uh, you know,
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  Speaker 1: the base rate of growth. Right, so China should grow
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  Speaker 1: at about six percent maybe that decelleries by twenty five
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  Speaker 1: or fifty basis points uh in the next twelve months,
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  Speaker 1: and in the US maybe trend growth rate it's kind
• 6:19
  Speaker 1: of around two percent. So there's certain base case estimates
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  Speaker 1: that uh, you know, the markets are looking for, and
• 6:27
  Speaker 1: you know, um, some of these events have a very
• 6:29
  Speaker 1: short term negative impact on some of that, uh, some
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  Speaker 1: of the trend growth rates. Right, So the base case
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  Speaker 1: hasn't really changed it's just that um there's a lot
• 6:38
  Speaker 1: of short term volatility and geopolitical events that can cause
• 6:43
  Speaker 1: oscillations around that base case, and it's these oscillations that
• 6:48
  Speaker 1: create market volatility that give rise to opportunity. Louis Loud,
• 6:52
  Speaker 1: thank you so much for being with us. Louis law
• 6:54
  Speaker 1: is protfolio manager and member of the Emerging markets investment
• 6:57
  Speaker 1: community at Brandis Investment Partners in Love San Diego, or
• 7:00
  Speaker 1: I do not think that they are preparing for in
• 7:02
  Speaker 1: our easter like we are here. Let's talk retirement. Let's
• 7:22
  Speaker 1: talk about whether you want to do it and whether
• 7:25
  Speaker 1: you can do it. Ever, let's speak with Josh Jelinski.
• 7:28
  Speaker 1: He's president of Jelinski Advisory Group, joining us here in
• 7:30
  Speaker 1: our Bloomberg Interactive Broker Studio. You have a new book,
• 7:34
  Speaker 1: Retirement reality Check. I'm just gonna go out on a
• 7:38
  Speaker 1: limb here and assume it's not a reality check that
• 7:40
  Speaker 1: you've got plenty and you're great. Well, it could be both.
• 7:43
  Speaker 1: You could have a lot and not know what to
• 7:45
  Speaker 1: do with it. You could have a significant amount saved
• 7:48
  Speaker 1: and not of a tax plan, not of a strategy
• 7:51
  Speaker 1: to convert your assets to income when you're retired. So
• 7:53
  Speaker 1: there's the reality check for those who have money, and
• 7:57
  Speaker 1: then there's the reality check for those who have not
• 8:00
  Speaker 1: saved you know, ten to fifteen percent and their four
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  Speaker 1: one k or who have come in a lot of
• 8:05
  Speaker 1: money due to maybe a sale of a business, but
• 8:07
  Speaker 1: there is a savings dearth Fidelity came out with a report,
• 8:10
  Speaker 1: you know, the average four one case fifty grand to
• 8:14
  Speaker 1: their name, which is shocked. It is so Josh, you know,
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  Speaker 1: I have my children earning the workforce right now, and
• 8:20
  Speaker 1: the I think the probably hopefully the best piece of
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  Speaker 1: advice I gave them was four oh one k started
• 8:25
  Speaker 1: today maximizer contributions. What percentage of people would you say
• 8:30
  Speaker 1: are really not prepared for retirement financially? I would say
• 8:35
  Speaker 1: about yeah, because I saw that statistic recently that a
• 8:39
  Speaker 1: big percentage of Americans could not come up with a
• 8:41
  Speaker 1: four million sorry four dollar just emergencies or you know,
• 8:45
  Speaker 1: a thousand dollars for emergency, so that I think it
• 8:47
  Speaker 1: was like percent of Americans. Yeah. So what is the
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  Speaker 1: most important advice you have for people as they think
• 8:53
  Speaker 1: about retirement, you know, whether they're young or whether they're
• 8:56
  Speaker 1: may be closer to retirement. Number one, just start save
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  Speaker 1: ten to fifteen percent of your paycheck. A lot of
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  Speaker 1: people they stop at fifty and they go, well, I
• 9:05
  Speaker 1: have fifty grand. I'll never amount to anything, so I'm
• 9:07
  Speaker 1: not gonna save anything. And if you save, you know,
• 9:09
  Speaker 1: tend to fifteen percent of your pay now. We we
• 9:12
  Speaker 1: we do have a section for millennials, people in their thirties, twenties,
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  Speaker 1: forties to start now and then to do it in
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  Speaker 1: a tax smart manner. In the book, we have eleven
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  Speaker 1: tax smart tips for how to capitalize on the Trump
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  Speaker 1: tax plan and other things. I'd like to be a
• 9:28
  Speaker 1: pain in the neck, So I'm gonna I'm gonna take
• 9:30
  Speaker 1: the other side of this. There are all these people
• 9:33
  Speaker 1: screaming that too many people over in China save. People
• 9:37
  Speaker 1: are talking about the savings rate, and how could be
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  Speaker 1: a problem if people aren't actually putting their money into
• 9:41
  Speaker 1: the economy, and if they're not necessarily investing in themselves.
• 9:44
  Speaker 1: And I'm not talking about incurring more student debt, but
• 9:47
  Speaker 1: making life easier. For example, if you've got children's that
• 9:50
  Speaker 1: you can continue to work even if it means less
• 9:53
  Speaker 1: income in that short period. How do you sort of
• 9:55
  Speaker 1: square those sort of conflicting feelings of sort of the
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  Speaker 1: dynamis of the economy in the near term versus being
• 10:03
  Speaker 1: prudent for the long term. Well that's great. We actually
• 10:05
  Speaker 1: have a macro economic approach to people's money where we
• 10:09
  Speaker 1: treat money less like a personal checkbook and more like
• 10:13
  Speaker 1: a macro economy, and that we have three key focuses.
• 10:17
  Speaker 1: We want to focus on asset protection, savings, and growth.
• 10:20
  Speaker 1: But yeah, there is a conflicting thing where when you're
• 10:23
  Speaker 1: looking at the macro economic data, we want people to
• 10:25
  Speaker 1: be spending their money, but then in reality people have
• 10:30
  Speaker 1: to avoid buying stupid stuff. I mean, if you think
• 10:32
  Speaker 1: about today, people have Netflix subscriptions and cable bills, they
• 10:36
  Speaker 1: have cell phone bills and they I mean, and they
• 10:39
  Speaker 1: have this subscription and that you know, they got to
• 10:42
  Speaker 1: cut the cord though. I mean, it's good for the
• 10:44
  Speaker 1: macro economy, bad for the micro economy. So what you know,
• 10:47
  Speaker 1: people are are living longer these days, Uh Josh, So
• 10:52
  Speaker 1: do they need they I guess they did. They need
• 10:54
  Speaker 1: more money. So I mean, is there a sense of
• 10:55
  Speaker 1: kind of what people need today for a decent retirement
• 10:58
  Speaker 1: versus maybe a generation or two ago. I think people
• 11:02
  Speaker 1: a generation or two ago spent a lot less, so
• 11:06
  Speaker 1: they need needed less to retire. They also had pensions.
• 11:09
  Speaker 1: A whole section on the book in my book Retirement
• 11:12
  Speaker 1: Reality Check is on how to convert your assets to income.
• 11:17
  Speaker 1: And we have a lot of people who don't have
• 11:19
  Speaker 1: a pension, so they need greater assets because they have
• 11:22
  Speaker 1: to convert their four one case too, to a pension
• 11:25
  Speaker 1: like stream of investment income when they retire. Definitely, what
• 11:30
  Speaker 1: age do you think people really ought to retire at
• 11:33
  Speaker 1: this point or expect to retire barring some boon from
• 11:37
  Speaker 1: a wonderful period in their business life. Maybe, uh, I
• 11:42
  Speaker 1: don't know, sixties, seven, seventy. But more and more people
• 11:45
  Speaker 1: are working longer. I mean, you know, you know, more
• 11:50
  Speaker 1: and more people are practicing the phrase welcome to Walmart.
• 11:53
  Speaker 1: They're finding joy a lot of people. I mean, if
• 11:56
  Speaker 1: you look philosophically, even back in Biblical days, you know,
• 12:00
  Speaker 1: the Bible mentions no mention of the concept retirement. That's
• 12:04
  Speaker 1: because everybody was dead at seventy so and social Security
• 12:09
  Speaker 1: came out when the average life expectancy was I think
• 12:11
  Speaker 1: like fifty two, and so you were typically like in
• 12:16
  Speaker 1: today's age, it would be eighty. If we went back
• 12:20
  Speaker 1: to the original concept of the social safety net. So
• 12:24
  Speaker 1: the social safety net, I mean, what percentage of the
• 12:27
  Speaker 1: US population you think relies on that? Probably too much.
• 12:31
  Speaker 1: I think more and more retirees are solely I'm I'm
• 12:35
  Speaker 1: I'm hearing people you know, called my radio show because
• 12:38
  Speaker 1: we have a show, and they I mean, there's like
• 12:40
  Speaker 1: I would say, are reliant on social security. Boomers did
• 12:44
  Speaker 1: a very poor job saving for retirement. And and that's
• 12:48
  Speaker 1: the importance of a retirement reality check, so you can
• 12:52
  Speaker 1: spend all your money without going broke in retirement. Interesting.
• 12:56
  Speaker 1: Josh Jelinski, thanks so much for joining us. Josh's President
• 13:00
  Speaker 1: Jelinski Advisory Group, joining us here in our Bloomberg Interactor
• 13:02
  Speaker 1: Broker studio talking about his new book, Retirement Reality Check.
• 13:06
  Speaker 1: And look, it's so important to save earlier. I think
• 13:10
  Speaker 1: that I'm coming at this. I always was, you know,
• 13:12
  Speaker 1: putting stuff aside and preparing for the future, and I
• 13:15
  Speaker 1: think it's important to do it. I think there needs
• 13:18
  Speaker 1: to be a balance though too right, I mean, but
• 13:20
  Speaker 1: I don't I guess that most people don't, do you
• 13:22
  Speaker 1: know everybody. I'm sure everybody has their their different financial position.
• 13:26
  Speaker 1: But I think that again, as I tried to you know,
• 13:28
  Speaker 1: impart to my children is nder the workforce is the
• 13:31
  Speaker 1: importance of saving for retirement four win k H. And
• 13:34
  Speaker 1: how it's such a powerful savings tool that a lot
• 13:37
  Speaker 1: of corporations corporate America in the absence of a defined
• 13:40
  Speaker 1: pension plan. Uh, it's really the way you have to go.
• 13:43
  Speaker 1: So very interesting, Josh, thanks so much for joining us
• 14:01
  Speaker 1: well here at our Bloomberg World headquarters in New York City.
• 14:04
  Speaker 1: Today we are hosting the Bloomberg Canadian Fixed Income Conference,
• 14:08
  Speaker 1: bringing together leaders and financiers looking at the Canadian market.
• 14:12
  Speaker 1: Joining us today is Rod Phillips, the Finance miss Minister
• 14:15
  Speaker 1: for Ontario, Canada, joining us here on a Bloomberg in
• 14:17
  Speaker 1: Active broker studio. Rod, thanks so much for being with us.
• 14:20
  Speaker 1: Give us a sense of you know, our financial you
• 14:24
  Speaker 1: know our economy here in the US. You know it's
• 14:26
  Speaker 1: chugging along pretty well to two and a half percent,
• 14:29
  Speaker 1: but slowing. Give us a sense kind of the economic
• 14:31
  Speaker 1: backdrop facing Canada these days. Paul Lisa, thanks for having me.
• 14:35
  Speaker 1: It's great to be on Bloomberg. You know, Ontario and
• 14:39
  Speaker 1: Canada generally are our significant connection in terms of economically
• 14:45
  Speaker 1: used the United States. So so as your economy goes that,
• 14:48
  Speaker 1: that certainly supports growth. For for Ontario. A lot of
• 14:52
  Speaker 1: people don't realize, but nineteen States were the number one
• 14:55
  Speaker 1: trading partner. So so when we see the kind of
• 14:59
  Speaker 1: hot economy having the United States, we're seeing that replicated.
• 15:02
  Speaker 1: Uh in Ontario. We have, you know, our unemployment rate
• 15:05
  Speaker 1: that just the last month was fivete which by our
• 15:08
  Speaker 1: standards is fairly low. We have two thirty thousand jobs
• 15:11
  Speaker 1: since last June year ago June that we're created. So
• 15:14
  Speaker 1: so you're seeing a growing economy, particularly um hot from
• 15:18
  Speaker 1: a development point of view. Uh. You know, we were
• 15:20
  Speaker 1: four cranes across North America. The construction cranes are in
• 15:25
  Speaker 1: the g t A. So a lot of that kind
• 15:27
  Speaker 1: of growth and development comes a lot from a lot
• 15:29
  Speaker 1: of very positive immigration statistics we have. So g t A.
• 15:33
  Speaker 1: I'm going to just infer is the general Toronto area?
• 15:36
  Speaker 1: Is that correct? The great there we go? Not in
• 15:39
  Speaker 1: general the Greater Toronto area. I'm wondering about Toronto at
• 15:42
  Speaker 1: the housing market in particular, because there's been a lot
• 15:44
  Speaker 1: written about how high prices had gotten and how people
• 15:47
  Speaker 1: were getting priced out of the region. Can you tell
• 15:50
  Speaker 1: us a little bit about where we are. We have
• 15:52
  Speaker 1: seen a little bit of a resurgence there with respect
• 15:55
  Speaker 1: to some of your measures to discourage foreigners from just
• 15:58
  Speaker 1: buying for investment. You know, there's no question affordability had
• 16:02
  Speaker 1: become an issue in the Greater Toronto area. We've brought
• 16:05
  Speaker 1: in some policies to to free up the capacity to develop,
• 16:08
  Speaker 1: obviously being sensitive about environmental concerns and otherwise, uh, some
• 16:12
  Speaker 1: of the some of the measures that both the federal
• 16:14
  Speaker 1: government had taken in the previous government to to uh,
• 16:17
  Speaker 1: you know, to limit that kind of growth. Some of
• 16:19
  Speaker 1: some of them been helpful, some have gotten in the
• 16:21
  Speaker 1: way of greater supply. We really see this as a
• 16:23
  Speaker 1: supply issue, and so so you know, we've been trying
• 16:27
  Speaker 1: to to encourage about somewhere around. Of all the immigrants
• 16:31
  Speaker 1: that come to UH, to Canada, come to Ontario, and
• 16:35
  Speaker 1: the biggest portion of those come to the Greater Toronto area.
• 16:38
  Speaker 1: UM So that's fantastic from an economic point of view
• 16:40
  Speaker 1: in terms of giving us a great base to grow
• 16:42
  Speaker 1: the economy from. But but you know, keeping housing affordable
• 16:46
  Speaker 1: is one of the things that we're really focused on.
• 16:47
  Speaker 1: How much pushback have you gotten from residents in Toronto
• 16:51
  Speaker 1: with the development, because this is always the push pull
• 16:53
  Speaker 1: in cities, right, don't over develop us, don't crowd our schools,
• 16:57
  Speaker 1: and yet housing is unaffordable, so what are you gonna do? Yeah,
• 17:00
  Speaker 1: it is always that tension. Everybody always wants to have
• 17:03
  Speaker 1: the last new house in a particular neighborhood. And and uh,
• 17:06
  Speaker 1: but but I think this is a This is an
• 17:08
  Speaker 1: area of our country that has has grown dramatically because
• 17:11
  Speaker 1: we've been fairly effective at at integrating newcomers into into
• 17:16
  Speaker 1: into the economy and otherwise. Um again that you know,
• 17:19
  Speaker 1: as long as there's jobs and economic opportunity, UM it is,
• 17:23
  Speaker 1: it's it's just net positive for most people. But listen,
• 17:26
  Speaker 1: we are We've got ninety billion dollars for spending on
• 17:28
  Speaker 1: transit and transportation infrastructure. You know, that's specifically focused on
• 17:31
  Speaker 1: dealing with the congestion that inevitably comes with this. UM.
• 17:34
  Speaker 1: We have has had an aggressive policy around making sure
• 17:37
  Speaker 1: there's more housing supply. You know, it was an urgent
• 17:39
  Speaker 1: need of those things happening. And then when it comes
• 17:41
  Speaker 1: to things like education and healthcare, big investments there in
• 17:44
  Speaker 1: the tens of billions of dollars to make sure that
• 17:45
  Speaker 1: the infrastructures in place. So those immigration statistics quote are
• 17:49
  Speaker 1: very interesting to me. How is immigration into Ontario and
• 17:53
  Speaker 1: kind of a broadly changed over the last several years
• 17:55
  Speaker 1: with the Trump administration and kind of the changing policies
• 17:57
  Speaker 1: here in USA. You know, it has UH has definitely
• 18:01
  Speaker 1: caused a couple of effects on the in terms of
• 18:04
  Speaker 1: the side of terms of refugees. We we had through
• 18:08
  Speaker 1: Quebec and through Ontario an increase in people leaving because
• 18:11
  Speaker 1: of some of the Trump policies. UM. But I'll say
• 18:14
  Speaker 1: also on the side of some of the most skilled
• 18:16
  Speaker 1: and valuable immigrants we've we've seen an uptick in terms
• 18:19
  Speaker 1: of interest whether it comes to our universities or high
• 18:22
  Speaker 1: tech firms. We have quite an AI hub in in Toronto.
• 18:26
  Speaker 1: In fact, tomorrow I'm hosting an AI round table with
• 18:28
  Speaker 1: a number of local companies here in New York UH
• 18:31
  Speaker 1: that that are looking because of our education system, because
• 18:34
  Speaker 1: of the number of data scientists we have expanding UH
• 18:37
  Speaker 1: the operations they have in Ontario and UH and that
• 18:41
  Speaker 1: I think that's about the quality of life that we
• 18:43
  Speaker 1: have as well as you know, as having capital markets.
• 18:46
  Speaker 1: I mean, as you guys would know Toronto is the
• 18:47
  Speaker 1: number two capital market in North America, so there's access
• 18:50
  Speaker 1: to capital for a lot of entrepreneurs. Rod Phillips, thank
• 18:54
  Speaker 1: you so much for joining usable that I want to
• 18:58
  Speaker 1: be called the Honora Police. I think at that of life, right,
• 19:00
  Speaker 1: I love that. You love that? Yes? Do you make
• 19:03
  Speaker 1: your your family call you the honorable? Only on weekends?
• 19:08
  Speaker 1: Do people really call you? Do they call you honorable
• 19:10
  Speaker 1: Phillips or honorable Rock? Usually just rot? But but but
• 19:14
  Speaker 1: it's you know, it's one of the you know, there's
• 19:16
  Speaker 1: there's so many benefits to being in politics. Definitely one
• 19:19
  Speaker 1: of them is the title the honorable, the honorable Paul
• 19:22
  Speaker 1: Sweeney think it works better than the Honorable Lisa Broadways.
• 19:26
  Speaker 1: That does not roll off the tongue at all. Rod Fellows,
• 19:29
  Speaker 1: Finance Minister, Ontario, Canada, joining us here in a Bloomberg
• 19:32
  Speaker 1: and Act Up broker studio, thank you so much for
• 19:34
  Speaker 1: joining us. Let's talk Puerto Rico since this has been
• 19:51
  Speaker 1: a hotbed of activity on the investment side over the
• 19:53
  Speaker 1: past couple of years as people try to figure out
• 19:56
  Speaker 1: now after the hurricane, how rebuilding the island will affect
• 20:00
  Speaker 1: its finances. Remember, it did have to file for bankruptcy restructuring.
• 20:05
  Speaker 1: Joining us now Ricardo Alvarez Diaz. He is founder and
• 20:08
  Speaker 1: principle of Alvarez Diaz and vill Alone. He is based
• 20:11
  Speaker 1: in San Juan, Puerto Rico, but he is joining us
• 20:14
  Speaker 1: here in our bloom Brignner Active Progress Studios. Ricardo, you
• 20:17
  Speaker 1: focus a lot on the rebuilding effort. Just when we
• 20:20
  Speaker 1: start with how is it going, Well, it's going a
• 20:22
  Speaker 1: lot better than what a lot of people are hearing.
• 20:24
  Speaker 1: I mean. The challenge we have, of course is the
• 20:28
  Speaker 1: uncertainty of what's going to happen with the funding itself.
• 20:30
  Speaker 1: I mean, because we we have been assigned a certain
• 20:34
  Speaker 1: amount of funding for the island federal funding sere funding specifically,
• 20:37
  Speaker 1: which is a community development block grounds from hot and
• 20:41
  Speaker 1: Fema um Um from the hot side. The first trench
• 20:45
  Speaker 1: of money has come in and and things are starting
• 20:47
  Speaker 1: to move a little fast. But at the same time,
• 20:50
  Speaker 1: the reality is that that's one point five billion dollars
• 20:53
  Speaker 1: out of out forty two billion dollar promise. So there's
• 20:55
  Speaker 1: a lot to we learned. So give us a sense of,
• 20:58
  Speaker 1: you know, how far back the island has recovered since
• 21:01
  Speaker 1: the hurricanes. Is there's a percentage which just give us
• 21:04
  Speaker 1: a sense of how far back it's come and how
• 21:06
  Speaker 1: far left it has to go. Well, I would say that, uh,
• 21:09
  Speaker 1: eighty five percent has has come back up to where
• 21:12
  Speaker 1: we were before the hurricane. And let's not say much
• 21:15
  Speaker 1: because we were a challenge before the hurricane when it
• 21:18
  Speaker 1: comes to infrastructure. So just because we're there doesn't mean
• 21:21
  Speaker 1: that we're great. It just means that we're back to
• 21:23
  Speaker 1: where we were. Where we need to focus now is
• 21:26
  Speaker 1: where we're going to want to be, and that's where, uh,
• 21:28
  Speaker 1: the infrastructure investments on how we planned the next fifteen
• 21:33
  Speaker 1: and thirty years of Puerto Rico are going to matter.
• 21:35
  Speaker 1: There's a big question mark about who's going to live there,
• 21:38
  Speaker 1: and one thing that we kept reading articles about was
• 21:41
  Speaker 1: the exodus of people from the island after the hurricane.
• 21:44
  Speaker 1: Has that sort of stabilized, you're starting to see population
• 21:47
  Speaker 1: growth even well not growth, but after the hurricane, we
• 21:51
  Speaker 1: lost around four hundred thousand people. Um, now that's typical.
• 21:55
  Speaker 1: If if you look at what happened in Katrina, that
• 21:57
  Speaker 1: was it was around two fifty thou people and it's
• 22:01
  Speaker 1: it's a it's similar to what happened in put Rico.
• 22:03
  Speaker 1: Because of the fact that schools were not open and
• 22:05
  Speaker 1: families needed to but that that was a significant proportion
• 22:08
  Speaker 1: of the entire islands population. And it's somewhat like or something. Well, no,
• 22:14
  Speaker 1: there's three point two million people in Puerto Rico. So
• 22:17
  Speaker 1: but but by now around three has returned now, so
• 22:21
  Speaker 1: we are down maybe seventy five thousand from the people
• 22:24
  Speaker 1: that left originally after a hurricane. But this matters a
• 22:26
  Speaker 1: lot because the island has more than seventy billion dollars
• 22:28
  Speaker 1: of debt. It needs a certain level of economic activities
• 22:31
  Speaker 1: that right, Yeah, it matters enormously. That's why one of
• 22:35
  Speaker 1: the challenges we've seen with the Fiscal Board itself is
• 22:38
  Speaker 1: that they have been focused rightly on trying to, you know,
• 22:42
  Speaker 1: manage the fiscal situation Puto Rico. But at the same time,
• 22:44
  Speaker 1: there's um A Title five out of the promiss a
• 22:47
  Speaker 1: law that is focused on economic development. And part of
• 22:51
  Speaker 1: the problem is that they have we have not been
• 22:54
  Speaker 1: focused enough when it comes to that with a common
• 22:56
  Speaker 1: economic development from the side of the federal government. Now
• 22:59
  Speaker 1: private center is a little different, and that's something we
• 23:01
  Speaker 1: need to talk about because I I find myself I'm
• 23:04
  Speaker 1: always talking about the bond situation and what happened to
• 23:06
  Speaker 1: Puerto Rico before the hurricane UM, and that was basically
• 23:10
  Speaker 1: the local government. I mean, there's a lot of robust
• 23:13
  Speaker 1: private sector businesses, but one of the challenges we we
• 23:16
  Speaker 1: we've dealt with is you know, and by the way,
• 23:19
  Speaker 1: I say this all the time, we should get every
• 23:21
  Speaker 1: single private sector company like myself, our company that has
• 23:24
  Speaker 1: thrived in the last thirteen years of puer Rico should
• 23:26
  Speaker 1: get an award, because after thirteen years of recession is
• 23:30
  Speaker 1: a big thank you. I just got an award. UM.
• 23:33
  Speaker 1: But at the same time, what I want to focus
• 23:35
  Speaker 1: in that the private sector is looking at something that
• 23:37
  Speaker 1: maybe UM, people should be should be listening to before
• 23:40
  Speaker 1: the hurricane. Uh. Companies were losing trust and faith in
• 23:44
  Speaker 1: the island after the hurricane, even though let's remember that
• 23:48
  Speaker 1: over three thousand people died and that's more people than
• 23:50
  Speaker 1: nine eleven UM. But what that did is that a
• 23:54
  Speaker 1: lot of company, we we got a lot of attention
• 23:57
  Speaker 1: worldwide that wasn't only about the fact that we were,
• 24:00
  Speaker 1: you know, bankrupt, and people were interested in, well, what's
• 24:03
  Speaker 1: Puerto Rico, what's happening in Puerto Rico? And people are
• 24:06
  Speaker 1: doubling down some companies that have invested in assets are
• 24:08
  Speaker 1: really reinvesting in the island, especially in hospitality and real state.
• 24:12
  Speaker 1: UM of course knowing that there's gonna be some serious
• 24:15
  Speaker 1: federal funding coming in to reinvest in long term infrastructure.
• 24:20
  Speaker 1: So give us a sense of that federal funding. I
• 24:21
  Speaker 1: think you mentioned forty two billion dollars. It's been out
• 24:24
  Speaker 1: a couple of years since the hurricane. What's what's the
• 24:26
  Speaker 1: timing and what has to happen for that money to
• 24:28
  Speaker 1: be released? Well, a couple of things. When if we
• 24:30
  Speaker 1: focus on Hodd specifically, UM, almost twenty billion dollars have
• 24:34
  Speaker 1: been assigned to Puerto Rico, but out of those twenty
• 24:36
  Speaker 1: billion dollars, only one point five billion has been disbursed
• 24:39
  Speaker 1: another one point five billion, around two hundred million dollars
• 24:42
  Speaker 1: have been actually utilized. What that tells you is that, UM,
• 24:46
  Speaker 1: there's a lot of money that needs to be brought
• 24:48
  Speaker 1: in and a lot of investments that need to be
• 24:50
  Speaker 1: focused in. Now, what are the next steps HODD needs
• 24:53
  Speaker 1: to UM. Dr Carson on the team at HARD needs
• 24:56
  Speaker 1: to They need to sign UM what's called it grant
• 24:59
  Speaker 1: agree meant for the next eight point two billion dollars,
• 25:02
  Speaker 1: and that hasn't been done. Uh, and you know there's
• 25:05
  Speaker 1: many reasons why now we have a monitor that was
• 25:08
  Speaker 1: imposed on Puerto Rico. UM. And as an investor, I
• 25:11
  Speaker 1: believe that having a monitor gives a certain degree of
• 25:14
  Speaker 1: confidence to the investors. But at the same time, it
• 25:17
  Speaker 1: has been very slow. UM. I believe that it will
• 25:21
  Speaker 1: get a lot better first and second quarter next year,
• 25:23
  Speaker 1: but the the the process has been sadly, like a turtle,
• 25:28
  Speaker 1: very slow. So I want to talk about from your side.
• 25:31
  Speaker 1: You work on development, correct, yes, okay, So how much
• 25:36
  Speaker 1: interest do you get from international investors given the government
• 25:41
  Speaker 1: track record? I feel an incredible amount of defensiveness. Guys
• 25:44
  Speaker 1: were different were the private sector. We're going to manage
• 25:46
  Speaker 1: it differently. We're not bankrupt. I mean, do you still
• 25:49
  Speaker 1: have to make that pitch every single time you talk
• 25:51
  Speaker 1: to anyone of course, listen, it's like everything. I mean,
• 25:54
  Speaker 1: I think one of the biggest successes we've had. And
• 25:56
  Speaker 1: I'm not only the president of Alvers alone, we I
• 25:59
  Speaker 1: also was appointed by the governor as as a member
• 26:02
  Speaker 1: of invest Puerto Rico. So my job is to get
• 26:04
  Speaker 1: out there and try to bring investments to the island,
• 26:07
  Speaker 1: and and and the thing I get all the time
• 26:09
  Speaker 1: is that when we get people down there there in
• 26:11
  Speaker 1: shock in a positive way, their surprise, they had no idea.
• 26:15
  Speaker 1: I mean, listen, only thirty five percent of the people
• 26:18
  Speaker 1: in the mainland New Puerto Ricans were your citizens before
• 26:20
  Speaker 1: the hurricane, So there there's a lot of misconception and
• 26:23
  Speaker 1: lack of knowledge about a line. And if by the way,
• 26:27
  Speaker 1: it doesn't help when you have situations within government either
• 26:30
  Speaker 1: number one being bankrupt I'm number two when this summer
• 26:33
  Speaker 1: we've had a governor stepping down. Uh, so you know,
• 26:37
  Speaker 1: we're dealing with some of those issues. But I I
• 26:39
  Speaker 1: think that that's okay because it's just the beginning of
• 26:43
  Speaker 1: what we're gonna see in the next couple of years. Uh,
• 26:46
  Speaker 1: that you're gonna see a Puerto Rico that's gonna start
• 26:49
  Speaker 1: to come out a lot better. And I don't know
• 26:51
  Speaker 1: how you how you guys feel about this, but in general,
• 26:54
  Speaker 1: I'm almost more excited about the private sector that the
• 26:57
  Speaker 1: public sector. So when you see the private sectors starting
• 26:59
  Speaker 1: to win, did it's a good thing. Ricardo Avis Diaz,
• 27:03
  Speaker 1: founder and principle of Avarez DS and Ville Loan from
• 27:06
  Speaker 1: San Juan, Puerto Rico, joining us here on our Bloomberg
• 27:08
  Speaker 1: Interactive Broker Studio, giving us the latest on Puerto Rico.
• 27:11
  Speaker 1: What is going on there in the rebuilding process that
• 27:14
  Speaker 1: continues after Hurricanes Irma and Maria devastated the island several
• 27:19
  Speaker 1: years ago. Getting an update there. Thanks for listening to
• 27:22
  Speaker 1: the Bloomberg P and L podcast. You can subscribe and
• 27:24
  Speaker 1: listen to interviews at Apple Podcasts or whatever podcast platform
• 27:27
  Speaker 1: you prefer. Paul Sweeney, I'm on Twitter at pt Sweeney.
• 27:30
  Speaker 1: I'm Lisa Bramloy. It's I'm on Twitter at Lisa bram
• 27:33
  Speaker 1: woits one before the podcast. You can always catch us
• 27:36
  Speaker 1: worldwide on Bloomberg Radio