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The Fed, Retail Sales, and The Great Resignation · Bloomberg Intelligence

0:00
Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
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Speaker 1: my co host Matt Miller. Every business day we bring
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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
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Speaker 1: with essential market moving news. Find the Bloomberg Markets podcast
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Speaker 1: called Apple Podcasts or wherever you listen to podcasts, and
0:18
Speaker 1: at Bloomberg dot com slash podcast. Today is Fed Minutes Day,
0:22
Speaker 1: and here a Bloomberg and Radio. We think that's a
0:25
Speaker 1: kind of a fun day, so we get excited about
0:26
Speaker 1: Fed minutes. So does our next guest, Danielle di Martino,
0:29
Speaker 1: Booth CEO and chief strategist for Quill Intelligence, former advisor
0:34
Speaker 1: at the Federal Reserve Bank of Dallas. Danielle, what are
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Speaker 1: you really looking for this afternoon when we get a
0:41
Speaker 1: look at those FED minutes? Well, I'm going to be
0:45
Speaker 1: looking for the tassett and I use that word carefully.
0:49
Speaker 1: The tasset concession made to the bears made to Christopher Waller,
0:56
Speaker 1: the former research director of Jim Bullard at the St.
0:59
Speaker 1: Louis Fed, who's now our gut Ner, uh and Master
1:01
Speaker 1: and George and others who have been insistent that the
1:04
Speaker 1: Fed Reserve does not belong in the business of of
1:07
Speaker 1: housing of the word we would use internally when I
1:09
Speaker 1: was at the fit with credit allocation. Um. So it's
1:13
Speaker 1: an inappropriate place where it had to be, and it
1:15
Speaker 1: has been for about a year. And the only nod
1:17
Speaker 1: that we saw to them in the minutes was that
1:20
Speaker 1: they you know, they said specifically, we're going to get
1:23
Speaker 1: out of a housing business. We're gonna get out of
1:24
Speaker 1: the business of mortgage backed securities and focus more on treasuries.
1:28
Speaker 1: So I'm interested in that conversation and how that went
1:30
Speaker 1: down because I think it's what prevented a dissent. Yeah.
1:33
Speaker 1: A lot of people, though, are getting downright angry that
1:37
Speaker 1: they're waiting this long to make those statements and that
1:40
Speaker 1: they're waiting until the March meeting to make any moves.
1:44
Speaker 1: Inflation is at a level where you know, I'm getting
1:48
Speaker 1: I'm getting text messages from from viewers who finally figured
1:51
Speaker 1: out my cell phone number, and there are a lot
1:53
Speaker 1: of expletives in them. Um, what do you think about
1:57
Speaker 1: the possibility of an emergency meeting or a fifty basis
2:01
Speaker 1: point hike in March? You know, when when I saw
2:05
Speaker 1: and I was I was actually I was gratified that
2:08
Speaker 1: Jim Bullard stood by his position on Monday morning, and
2:12
Speaker 1: because it at least seems to me that there are
2:14
Speaker 1: at least a few people inside the FED who are
2:16
Speaker 1: not insensitive. And that's the word that I'll use. So
2:20
Speaker 1: it's all good and well to come out with an
2:21
Speaker 1: emergency rate cut in March of uh, you know, when
2:26
Speaker 1: investors are being you know, in the crosshairs. But it's
2:30
Speaker 1: not okay to come out with an emergency rate hike
2:33
Speaker 1: to answer the plight of everyday US workers. And that's
2:38
Speaker 1: to me, it boils down to being white and black.
2:41
Speaker 1: It's as simple as that we will come to the
2:42
Speaker 1: rescue of investors, we will not come to the rescue
2:45
Speaker 1: of you as households. And the FED is mandated to
2:47
Speaker 1: make policy in the public interests and to suggest that
2:50
Speaker 1: when when when we're when when we've got the gallows
2:54
Speaker 1: humor going on about skateboarding and relearning how to do
2:56
Speaker 1: that and gas prices are you know, hitting four dollars
2:59
Speaker 1: a gallon, and it's it's just again, the word that
3:02
Speaker 1: comes to mind is insensitive. Five dollars a gallon. We
3:05
Speaker 1: were talking about five dollars. Yeah, So that Daniel I mean,
3:09
Speaker 1: when we think about inflation in the FED, I'm not
3:11
Speaker 1: even sure the FEDS in that business. This an inflation
3:14
Speaker 1: this time around primarily supply chain driven. So was this
3:20
Speaker 1: don't a good point? Maybe it's something that the FED
3:22
Speaker 1: can't address. How do you think about that? You know,
3:26
Speaker 1: I don't think it's supply chain driven. We we saw
3:28
Speaker 1: production this morning increased by point two p once you
3:32
Speaker 1: got rid of the cost for heating oil and gas.
3:35
Speaker 1: So I don't buy that. I think that the supply
3:38
Speaker 1: chain disruptions are coming undone. We're seeing inventories be replenished. Uh,
3:43
Speaker 1: and that the you know, on the other hand, forty
3:44
Speaker 1: two million Americans got a bump up in their allocation
3:48
Speaker 1: for food spending on October the one. And that's why,
3:51
Speaker 1: despite world food inflation being off the rails, it's even
3:56
Speaker 1: more off the rails for your average American family because
3:59
Speaker 1: the US government has put pump so much fiscal spending
4:03
Speaker 1: out into the economy. So we we have to look
4:06
Speaker 1: in the eye the fact that the fiscal spending, and
4:09
Speaker 1: there's been countless empirical studies done on this. When you
4:11
Speaker 1: give people money directly deposit cash into the hands of
4:15
Speaker 1: those with the highest propensity to spend it. They're going
4:17
Speaker 1: to spend it, and they did. And the inflation is lagging,
4:21
Speaker 1: so it's dragging down growth even as the fiscal stimulus
4:25
Speaker 1: has largely gone away. Can I just ask you quickly
4:29
Speaker 1: about Sarah bloom Raskin, what's your take on um, the
4:34
Speaker 1: kind of job she'll do if she's ever confirmed? Well?
4:39
Speaker 1: And I think it's I really do think it's a
4:41
Speaker 1: big if. People don't quite understand the importance of Pat
4:45
Speaker 1: to me sticking to his guns and saying I'm i'm
4:48
Speaker 1: self imposing term limits, and so time and again he's
4:51
Speaker 1: been able to actually do his job, and and and
4:53
Speaker 1: and put, you know, give the scrutiny that's needed to
4:57
Speaker 1: certain positions, whether it was defends municipal bond facility that
5:00
Speaker 1: he insisted be shut down along with those credit facilities
5:03
Speaker 1: in the December two thousand m two at twenty excuse me,
5:08
Speaker 1: two thousand twenty stimulus. I think that there has been
5:11
Speaker 1: an inappropriate amount of um of disclosure, and I think
5:16
Speaker 1: demanding questions as opposed to being placated with saying I'll
5:20
Speaker 1: sign a pledged it's never exists and dreamed up by
5:23
Speaker 1: Elizbeth Warren, No, I think an appropriate of scrutiny is
5:27
Speaker 1: called for, and I find some of the testimonies plural
5:31
Speaker 1: that have been that have been given to be disingenuous
5:34
Speaker 1: because of the work that they've been in the past
5:36
Speaker 1: on climate change. Danielle, thank you so much for joining us.
5:39
Speaker 1: As always, we appreciate your thoughts and insight. Danielle di Martino, Booth,
5:43
Speaker 1: CEO and chief strategists at Quill Intelligence. Speaking of inflation,
5:52
Speaker 1: for you, no matter where the where you look, you
5:54
Speaker 1: see it c p I, p p I retail sales. Uh,
5:58
Speaker 1: certainly many signs of inflat sation out there, whether it's
6:00
Speaker 1: at the gas pump or the supermarket. The question is, um,
6:04
Speaker 1: have we peaked? Has it peaked? When will we see
6:07
Speaker 1: inflation a subside? And there's a federal reserve in other
6:10
Speaker 1: center banks have any roll here? Let's check in with
6:12
Speaker 1: Jennifer Lee, senior economist and managing director Demo Capital Markets. So, Jennifer,
6:17
Speaker 1: I'd love to get your call here on kind of
6:20
Speaker 1: us inflation. Have we peaked? Are we near a peak?
6:24
Speaker 1: How do you think about it? Good morning. I'm going
6:27
Speaker 1: to continue saying that we have not piked just yet.
6:30
Speaker 1: We are actually expecting uh, the inflation data to sort
6:33
Speaker 1: of you know peak the rollover I'm going to say,
6:37
Speaker 1: like late spring ish. Um, I don't think it's going
6:40
Speaker 1: to head sells very quickly. Unfortunately, it probably stays somewhat
6:44
Speaker 1: elevated before heading a before cooling somewhat in the second
6:48
Speaker 1: half of the year. But so NOA in a in
6:50
Speaker 1: my long winded way of saying, I don't think we've
6:52
Speaker 1: peaked just yet, but we're calling almost there. But you
6:56
Speaker 1: do think that we're going to come back down? Um?
6:58
Speaker 1: Is that because you think the FED is going to
7:01
Speaker 1: hike rates and that's going to cool down the economy
7:03
Speaker 1: and inflation. That would be the hope. I mean that's
7:07
Speaker 1: you know, I think of being central banks around the
7:09
Speaker 1: world of your just pointing out, are facing the same
7:12
Speaker 1: issues right now. And given such high inflation rates globally,
7:17
Speaker 1: you know, all the central banks, including the FED, are
7:20
Speaker 1: you know, starting to rate in all that accommodation that
7:23
Speaker 1: they've poured out during during the pandemic. Um, And this
7:26
Speaker 1: is the time and with inflation before inflation gets too
7:29
Speaker 1: much out of control. So, Jennifer, I'm looking at the
7:32
Speaker 1: w I rp go function on the Bloomberg Turmulin shows
7:36
Speaker 1: me potential for seven rate hikes encounter. Is that something
7:41
Speaker 1: you ascribed to? Oh, that's pretty rising. I feel every
7:46
Speaker 1: every single week we are actually we are looking for
7:49
Speaker 1: five rate hikes this year, twenty five basis points each
7:54
Speaker 1: and kicking off in March. I think that's more, you know,
7:58
Speaker 1: I've been saying a more reasonable pace. UM, I think
8:01
Speaker 1: fifty basis points for example in March that summer calling
8:04
Speaker 1: for is h I think it would be quite aggressive UM.
8:07
Speaker 1: And I think it was only like one UM, one
8:10
Speaker 1: FED member in particular, that it has been pushing for that.
8:12
Speaker 1: But I think the other policymakers have been taken more
8:16
Speaker 1: of a balanced approach and looking for probably basis points instead.
8:20
Speaker 1: One of the concerns, I mean, we all know what
8:23
Speaker 1: rate hike cycles look like, or even the kids can
8:27
Speaker 1: go back and and look at the history. But one
8:30
Speaker 1: sort of unknown is how quantitative tightening will affect markets.
8:34
Speaker 1: How do you see that panning out? Will they just
8:37
Speaker 1: um let it run off the balance sheet? Will they
8:39
Speaker 1: actively sell assets? Is it going to be a problem
8:42
Speaker 1: for rates markets? So we are looking for the QT
8:46
Speaker 1: process to start probably in July um and and and
8:50
Speaker 1: sort of taper off at a steady pace. But the
8:54
Speaker 1: Fed has always said that they are going to focus
8:57
Speaker 1: more on the FED funds target specific because that is
9:01
Speaker 1: what the public knows and and how you know, whether
9:04
Speaker 1: or not balance sheets runoff is is going to impact
9:06
Speaker 1: anyone's mindset is a big question. But I think they're
9:10
Speaker 1: going to just basically use the set funds and talk
9:13
Speaker 1: and keep talking about raising rates and sort of in
9:15
Speaker 1: the background, let let the balance sheets sort of start
9:19
Speaker 1: coming off. Um. And I think that will also have
9:22
Speaker 1: the impact of, you know, of a of a tighter,
9:24
Speaker 1: tighter financial conditions. Besides, Jeffrey hikes Jennifer. At two pm
9:29
Speaker 1: Wall Street time, we're going to get the f O
9:31
Speaker 1: m C meeting minutes. Um. It's always big news here Bloomberg.
9:35
Speaker 1: What are you looking for when when you Peruzo's minutes.
9:39
Speaker 1: There's always a lot to go through, but it's always
9:42
Speaker 1: interesting to get like a little little little tibbits, like
9:44
Speaker 1: you know, how how much each policy maker was pushing
9:47
Speaker 1: for what you know, how many um where there are
9:50
Speaker 1: several a few, you know a majority of people that
9:53
Speaker 1: were pushing for you know, a more aggressive tact at
9:56
Speaker 1: the beginning of a of a great high cycle or
9:58
Speaker 1: are they trying to go more severely. Those are little nuances,
10:01
Speaker 1: I think, just to see, you know, where how they're
10:03
Speaker 1: going to start off, even though they were saying that
10:06
Speaker 1: they're going to start raising rates right now, and even though,
10:09
Speaker 1: as you're pointing out, we've got seven rate hyps potentially
10:11
Speaker 1: coming in, which again I think is a bit extreme. Um.
10:15
Speaker 1: You know, things can change, and once inflation starts to
10:18
Speaker 1: taper off, they could start reading in a little bit
10:20
Speaker 1: some of their um their hawkish talk. Um, you know,
10:23
Speaker 1: I don't think it's going to be I don't think
10:24
Speaker 1: they're on autopilot as things what I'm trying to say,
10:27
Speaker 1: and I take most central banks are probably in that
10:29
Speaker 1: mode right now. Um not all right. We see some
10:34
Speaker 1: interesting exceptions in the Bank of Japan springs to mind.
10:37
Speaker 1: We had an interesting opinion piece this morning on Bloomberg saying,
10:41
Speaker 1: you know, the economy, the growth or the recovery in
10:44
Speaker 1: Japan doesn't look great. But as we all the rest
10:47
Speaker 1: of us deal with this huge inflation, um, the rest
10:50
Speaker 1: of the world might look to Japan and think one
10:53
Speaker 1: percent doesn't look so bad. Right now? What's your take
10:55
Speaker 1: on the contrasts of the Japan with with the rest
11:01
Speaker 1: of the central bank regime Japan has been. It's such
11:04
Speaker 1: an interesting story there, and I mean they've been facing
11:06
Speaker 1: you know, deflational on your more or less for the
11:08
Speaker 1: last at least two decades or so. UM and that
11:12
Speaker 1: is one UMU central Bank, as you just pointed out,
11:15
Speaker 1: that is remaining stubbornly on on the signlines, and Governor
11:18
Speaker 1: Karuda continues to stress that point. Um. You know, they
11:22
Speaker 1: had bond yields, for example, rising, their ten year yields
11:25
Speaker 1: were rising in conjunction with everybody else's uh last week
11:28
Speaker 1: and earlier this week, and they had to pour some
11:30
Speaker 1: money into to bring it back down to what their
11:33
Speaker 1: target was, but they remained so devilish and even one
11:36
Speaker 1: one or two of the the policy makers within the
11:39
Speaker 1: bank um continue actually to push for even more accommodations.
11:43
Speaker 1: So that's a huge extreme from what we're seeing elsewhere,
11:46
Speaker 1: you know, with with the G seven, even the ECB
11:48
Speaker 1: right now, you know, they're starting to become less emboldened
11:52
Speaker 1: to their transitory story and we're probably going to see
11:56
Speaker 1: you know, it's still a matter of debate right now.
11:58
Speaker 1: But you know, I wouldn't be surprised to see right
11:59
Speaker 1: high before the end of the year. All Right, thanks
12:03
Speaker 1: so much for joining us. Real pleasure talking. Um. We
12:07
Speaker 1: obviously are following this story very closely. Um, and and
12:11
Speaker 1: we'll continue to Jennifer Lee. They're joining us from BEMO
12:15
Speaker 1: Capital Markets, where she is senior economist and managing director.
12:21
Speaker 1: I'm gonna talk electric vehicles. Yes, I want to talk
12:24
Speaker 1: internal combustion vehicles, but it's the same discussion, the same discussion.
12:28
Speaker 1: Connercend a columnist for Bloomberg Opinion, joins this. Connor, You've
12:31
Speaker 1: got a piece out here saying, the automakers have an
12:35
Speaker 1: incentive obviously for keeping new car prices high, use car
12:40
Speaker 1: prices high, because they need the profits to fund this
12:44
Speaker 1: whole pivot towards electric What what's going on there? You're
12:48
Speaker 1: basically saying their purposely holding back production to pad margins.
12:53
Speaker 1: They say that they're kind of in a spot that
12:55
Speaker 1: they don't mind where you know, again, they have to
12:58
Speaker 1: inve us billions of dollars in the CP transition, and
13:00
Speaker 1: they also have to show investors near term profitability. They're
13:02
Speaker 1: trying to do both, and so they see the prices
13:04
Speaker 1: are really high. Inventories are really low. They're saying that
13:07
Speaker 1: their production won't meaningfully impact prices, and make expect prices
13:11
Speaker 1: to remain high because that's going to fund the profits
13:13
Speaker 1: that keep keeps this thing going. So in a way,
13:16
Speaker 1: your column actually made me feel better about being um
13:20
Speaker 1: an old you know, dodgy e v holdout Because I
13:26
Speaker 1: am waiting for General Motors to release a new Sierra,
13:29
Speaker 1: the A T four X. I need the six point
13:32
Speaker 1: to leader who naturally aspirated V eight And I felt
13:36
Speaker 1: guilty about that until I read your column column Connor,
13:39
Speaker 1: because um, what I realized is I'm paying a high
13:43
Speaker 1: price for that big inch internal combustion engine, and I
13:46
Speaker 1: am effectually subsidizing their electric vehicle investment with that. That's
13:53
Speaker 1: a really good way. I've never thought of it that way.
13:55
Speaker 1: That's a good point. So now anyone who really wants
13:57
Speaker 1: their gas guggler can say, hey, look I'm paying jury.
14:00
Speaker 1: So it's you know, there's no way that we'd be
14:02
Speaker 1: building these things unless people like me were going out
14:04
Speaker 1: and doing our patriarchy duty keeping the old stuff going. Connor.
14:08
Speaker 1: But if if the automakers had the chips, wouldn't they
14:10
Speaker 1: crank up production? Back up to sixteen seventeen million star. Yeah,
14:14
Speaker 1: this is my main question was is selling fewer vehicles
14:17
Speaker 1: at higher prices more profitable than selling um more vehicles
14:22
Speaker 1: at lower prices? Right, and I get to the whole
14:25
Speaker 1: discussion about you know, what does demand for gasoling power
14:29
Speaker 1: vehicles look like in four We know that right now
14:32
Speaker 1: we've got a huge shortage, and if you just pump
14:33
Speaker 1: out vehicles for six months, they're all going to sell
14:36
Speaker 1: at high prices. But you know, it's an industry with
14:38
Speaker 1: a lot of it's capital in sensive, it's a long
14:39
Speaker 1: lead time, and if ebs ramp up, you know it's
14:42
Speaker 1: coming out of somewhere. And so it's kind of a
14:44
Speaker 1: tricky situation, kind of like oil oil product producers where
14:47
Speaker 1: they kind of need to keep supply low because they're
14:49
Speaker 1: really worried about a glut on the market as demand
14:51
Speaker 1: falls off over time. A buddy of mine runs a
14:54
Speaker 1: bunch of dealerships, and he used to say, you'd have,
14:56
Speaker 1: you know, a couple hundred vehicles in inventory, but he's
15:00
Speaker 1: as those days are over, that's on how they're going
15:01
Speaker 1: to run the dealerships going forward. Is this kind of
15:05
Speaker 1: a new normal where they're gonna have lower inventories, maybe
15:09
Speaker 1: lower production. I'm not sure how that works. Yeah, it's
15:12
Speaker 1: interesting because we're seeing the same thing in the housing
15:14
Speaker 1: market where homebuilders are very happy with kind of the lowmentory,
15:17
Speaker 1: high profit margin situation. That's sort of like, well, we
15:20
Speaker 1: got caught on two of thementory, but we're making it
15:23
Speaker 1: up on price and margins. So they're they're kind of
15:25
Speaker 1: rolling with it for now, and investors are sort of
15:27
Speaker 1: not sure, Like, you know, valuations are lower because they're
15:30
Speaker 1: not sure if Martin's are gonna Mian revert. But that's
15:33
Speaker 1: you know, what they're selling in terms of a good
15:34
Speaker 1: thing for investors. Right now, my wife is looking for
15:37
Speaker 1: BMW X five X drive forty five E, which is
15:42
Speaker 1: their new hybrid STUV. I messaged my inside guy at
15:47
Speaker 1: BMW and said, do you have an inside guy a BMW?
15:49
Speaker 1: I said, can you source one of the one of
15:51
Speaker 1: these for me at a dealership in the States, And
15:53
Speaker 1: he said, we have one in California, there's one in
15:56
Speaker 1: Sans for it actually called out a deal or is
16:00
Speaker 1: that we're selling at inflated prices above m s r
16:02
Speaker 1: P and they so that those dealers an't going to
16:04
Speaker 1: get them until I're going forward. So I hope they're
16:06
Speaker 1: I hope they're true to their word because if you
16:09
Speaker 1: look for UM, for example, a four D F one
16:12
Speaker 1: fifty raptor uh there you know, Baja racing truck, or
16:15
Speaker 1: if you look for the Mustang Shelby Mustang g T
16:19
Speaker 1: five hundred, which is the supercharge five point two seven
16:22
Speaker 1: hundred sixty horsepower monster, you can't find them without ten thousand,
16:27
Speaker 1: fifteen thousand, twenty thousand dollar additions to the price tag.
16:30
Speaker 1: They call it like UM added dealer something, UM profit margin. Yeah,
16:35
Speaker 1: it's it's unbelievable. I always wonder like, if they're doing that,
16:39
Speaker 1: why can't UM these producers have their own dealerships, right,
16:44
Speaker 1: And that's probably the whole point with the online sales
16:46
Speaker 1: and the big fight about that. So it's that's probably
16:49
Speaker 1: gonna be a contentious flight going forward as dealers want.
16:51
Speaker 1: You know, if Tesla and Ribbyan can sell online, then
16:53
Speaker 1: why can't Board and GM. You make a great point
16:55
Speaker 1: about Tesla in your column as well. Um Elon Musk
16:58
Speaker 1: basically said, yeah, we're not working on the cheap car
17:01
Speaker 1: for every man right now because we're making too much
17:04
Speaker 1: money with the expensive cars for rich people. Um, what,
17:08
Speaker 1: what's you know? There's got to be some outcry there
17:10
Speaker 1: at least I'm not that not that the Model three
17:12
Speaker 1: is that expensive, but they are making huge margins on
17:15
Speaker 1: all their products, right And I think right now, because
17:19
Speaker 1: some conductors are in short supply, they can credibly say,
17:21
Speaker 1: you know, sorry, this is really just a situation we're
17:24
Speaker 1: put upon, we're put in. But if some semi conductor
17:26
Speaker 1: towards normalized, then maybe there won't be those excuses and
17:29
Speaker 1: they'll be more legitimate outcry and crack down on, you know,
17:32
Speaker 1: when wind fall profits or whatever you wanna call it. So,
17:35
Speaker 1: what is the new normal level of vehicle sales in
17:40
Speaker 1: the U S? If it's not a production, if it's
17:42
Speaker 1: not sixteen seventeen million, I mean, what's that? You're always
17:45
Speaker 1: asking me what the stars for this? Yeah? And I
17:47
Speaker 1: think the I that's where demand is, right, I mean,
17:51
Speaker 1: if I'm a factory, I think I think over time
17:54
Speaker 1: that's where we're gonna be. But it's sort of evs
17:56
Speaker 1: are supplied constrained for the time being, and automakers are
17:59
Speaker 1: very cautious about letting the market with ice vehicles because
18:01
Speaker 1: they don't know what the man looks like down the road. Connor,
18:04
Speaker 1: just personally, have you spent any uh time seat time
18:08
Speaker 1: in an electric vehicle? What do you think about them?
18:11
Speaker 1: I have to which it's sort of embarrassing that I
18:13
Speaker 1: write about him, but I have not been behind the
18:14
Speaker 1: wheel of one. I'm on the list, dribbian, but I
18:16
Speaker 1: have not driven one yet. I have to say so
18:18
Speaker 1: many I find um interesting. I was super psyched about
18:22
Speaker 1: these uh um F one fifty lightning trucks coming up
18:26
Speaker 1: the waitlist put me off. Now I've tested out the
18:30
Speaker 1: Mustang Maki, which is fast and sporty, but it doesn't vibrate.
18:34
Speaker 1: It doesn't there's no feeling in it. That's I don't
18:37
Speaker 1: enjoy driving it. I keep asking you car people, isn't
18:40
Speaker 1: that gonna be a big turn off for these things
18:43
Speaker 1: for evs? I just I just think the folks that
18:46
Speaker 1: like the internal combustion engine, particularly if you go to
18:48
Speaker 1: the high end, you know, performance cars, I think that's
18:50
Speaker 1: gonna be a problem. But what do I know? So
18:52
Speaker 1: but everybody's tell me where you can't shift your own gears?
18:55
Speaker 1: I know, don't even go no more manual, Connor. I mean,
18:57
Speaker 1: let's not go there. I kind of send calmness for
18:59
Speaker 1: Boomberg and joining us. He's a founder of Peachtree Creek Investments.
19:02
Speaker 1: He's a Bloomberke opinion columnist. Uh, we're all going electric, folks,
19:06
Speaker 1: get used to it. I guess I'm keeping my two
19:09
Speaker 1: thousand four team BMW five series six speed manual transmission
19:14
Speaker 1: for as long as I possibly ken because it's a
19:17
Speaker 1: lot of fun. One of the many things that I
19:24
Speaker 1: don't understand about this pandemic, any economic disruption resulting from it,
19:29
Speaker 1: is this whole thing about the great resignation, these three
19:32
Speaker 1: four five million workers. Who are they? Where did they go?
19:36
Speaker 1: How do they do it? And I really don't how
19:38
Speaker 1: did they get how did they get so lucky? I'm
19:40
Speaker 1: thinking about Dave Wilson, Bloomberg's former Stocks editor. Um, I
19:45
Speaker 1: blame him. I put him in that bunch. But he
19:47
Speaker 1: worked here for thirty years. If you work someplace for
19:50
Speaker 1: thirty years plus, you're incredibly smart. Uh, you save well,
19:55
Speaker 1: you invest well, you should retire. Okay, alright, alright, I
19:59
Speaker 1: just said, Dave, are you going? Buddy? Michael Hanson, he's
20:01
Speaker 1: a CEO of Send Gauge Group. Michael, who are these people.
20:06
Speaker 1: Where did they go? Are they coming back to the workforce? Yeah,
20:10
Speaker 1: thanks for having me. And actually the example that you said,
20:14
Speaker 1: the retiring um the people are the minority of these people,
20:18
Speaker 1: the last majority of those people that are resigning actually
20:23
Speaker 1: reassessing their career. They're saying, what don't I like about
20:26
Speaker 1: my current job and what where do I want to
20:29
Speaker 1: go next? And about of them feel that their current
20:33
Speaker 1: job is not really supporting their career and is not
20:35
Speaker 1: supporting them. Yeah, that's why I say, you know, he
20:38
Speaker 1: should be retiring. If you if you have a thirty
20:41
Speaker 1: year career and you do very well and retire, that's no,
20:45
Speaker 1: that's no surprise. The great resignation is weird in that
20:48
Speaker 1: people who you wonder how do they have enough money
20:51
Speaker 1: to to quit their jobs are doing it. And one
20:53
Speaker 1: of the points that you make, Michael, is that they're
20:55
Speaker 1: actually making financial sacrifices. They're not retiring to Indian hills
21:00
Speaker 1: in playing eighteen holes a day. They're they're doing other
21:03
Speaker 1: stuff exactly. And this is why this is actually good
21:07
Speaker 1: news in a way. These people are courageous, They take risks,
21:11
Speaker 1: and what they say is I want to learn another
21:13
Speaker 1: skill and I want to get a better job that
21:16
Speaker 1: gives me more satisfaction and better pay. And that is
21:19
Speaker 1: something that actually should give us, you know, great confidence
21:22
Speaker 1: in the future and great uh conviction in the American
21:25
Speaker 1: labor labor force. In a way, Michael, they're shaking up
21:28
Speaker 1: the job market as well. You know that the courage
21:31
Speaker 1: of those people, which is what I hear you saying,
21:35
Speaker 1: is forcing employers to do better in terms of the
21:39
Speaker 1: wages they offer, in terms of working conditions, in terms
21:42
Speaker 1: of dealing with you know, the working class. Absolutely, And
21:46
Speaker 1: the only thing I would add other than what you
21:48
Speaker 1: said is the employers should think about also about how
21:52
Speaker 1: they reskill and upskill their workforce. How what can they
21:56
Speaker 1: do to give them education and training and give them
22:00
Speaker 1: opportunities while they're working to get better skills to get
22:03
Speaker 1: a better job and better pay. They don't have to
22:06
Speaker 1: wait until they resign. They can do it when they're
22:08
Speaker 1: actually employees. Michael, Uh, Matt and I have to come
22:12
Speaker 1: into the office every day. I don't we don't have
22:16
Speaker 1: an option per se. But it seems like we are
22:19
Speaker 1: very much the outliers in this new world order. Are
22:23
Speaker 1: you in the camp that says we are now in
22:26
Speaker 1: a permanent, hybrid type of environment. I'm in the camp off.
22:31
Speaker 1: First of all, let's not stipulate what the future is
22:35
Speaker 1: going to hold. We gotta get open, and we gotta learn,
22:37
Speaker 1: and we've gotta learn what works and what doesn't work.
22:40
Speaker 1: And I am, however, a believer that we're not going
22:43
Speaker 1: to go back to the old world that everybody has
22:45
Speaker 1: to show up in the office at you know, nine
22:47
Speaker 1: am on Monday morning. That's not where we're gonna go.
22:49
Speaker 1: Where we're gonna end up, it's going to be a
22:51
Speaker 1: hybrid model. But how we're going to mix it, how
22:53
Speaker 1: we have technology influenced this, I think is open and
22:56
Speaker 1: what I would recommend to other CEOs that are you know,
22:59
Speaker 1: we are a foreign a thousand people company. We're experimenting
23:02
Speaker 1: a lot, and we're learning from each other and keep
23:04
Speaker 1: that open mindset. Yeah, I mean, I would point out
23:07
Speaker 1: that it would be technologically possible for me to do
23:10
Speaker 1: this job for a moment, I wouldn't want to um
23:13
Speaker 1: because we pick up so much from our colleagues here.
23:15
Speaker 1: We discuss stories, I uh, you know, in the midst
23:19
Speaker 1: of breaking news. Are we going to be able to
23:22
Speaker 1: do that online eventually? Michael, what do you think about
23:26
Speaker 1: the possibility of working in the metaverse. I don't think
23:31
Speaker 1: we've got to in the foreseeable future. I don't think
23:33
Speaker 1: we're going to be doing this online. I think we've
23:35
Speaker 1: got to find the right blend, in the right mix.
23:37
Speaker 1: And you use some great examples when you bump into colleagues,
23:40
Speaker 1: you share stories and think about somebody just joining a company.
23:44
Speaker 1: You've never worked for this company, and how do you
23:47
Speaker 1: get you know, a sense of what the culture is
23:49
Speaker 1: like if you don't have a cup of coffee with people,
23:52
Speaker 1: or share a meal, or you know, bump into the
23:54
Speaker 1: met the water cooler. So I do think hybrid that
23:57
Speaker 1: that finding the right mix or face to face and
24:00
Speaker 1: online is going to be the way for the future. Hey, Michael,
24:03
Speaker 1: thanks so much for joining us there. Michael Hansen, CEO
24:06
Speaker 1: of Send Gauge Group, talking about the Great Resignation. Thanks
24:12
Speaker 1: for listening to the Bloomberg Markets podcast. You can subscribe
24:15
Speaker 1: and listen to interviews with Apple Podcasts or whatever podcast
24:19
Speaker 1: platform you prefer. I'm Matt Miller. I'm on Twitter at
24:23
Speaker 1: Matt Miller three. Pt on Fall Sweeney I'm on Twitter
24:26
Speaker 1: at pt Sweeney. Before the podcast, you can always catch
24:29
Speaker 1: US worldwide at Bloomberg Radio,