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Examining The Supply Chain, Labor, And Alternative Energy · 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
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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
0:11
Speaker 1: with essential market moving news. Find the Bloomberg Markets podcast
0:15
Speaker 1: called Apple Podcasts or wherever you listen to podcasts, and
0:18
Speaker 1: at Bloomberg dot com slash podcast. We had some good
0:22
Speaker 1: numbers out of Home Depot, UH and Walmart. Apparently there's
0:27
Speaker 1: stuff on the shelves to buy. But I know a
0:29
Speaker 1: lot of people are concerned about the supply chain as
0:31
Speaker 1: we head into this all important holiday season. Let's get
0:34
Speaker 1: a sense of kind of where we are there. Lisa Chai,
0:37
Speaker 1: senior analysts at Robo Global. Uh, Lisa, thanks so much
0:40
Speaker 1: for joining us here a gave we have some good
0:41
Speaker 1: numbers out of Home Depot and Walmart this morning. UM,
0:45
Speaker 1: but a lot of people continue to be very concerned
0:48
Speaker 1: about the supply chain challenges out there on a global scale.
0:52
Speaker 1: What's your take on kind of where we are with
0:54
Speaker 1: that issue. Yes, definitely, UM, supply chain disruptions that we're
1:00
Speaker 1: hearing about, it's really nothing new, and unfortunately things may
1:04
Speaker 1: worsen before they really improve UM as consumer demand overall
1:09
Speaker 1: really seems really unstoppable heading into the holiday season, and
1:14
Speaker 1: obviously the pandemic highlighted that we have major bottlenecks within
1:17
Speaker 1: the supply chain. And keep in mind that we have
1:21
Speaker 1: really bigger problems than just overall the holiday season. We
1:25
Speaker 1: have obviously great innovations and technologies that can keep up
1:29
Speaker 1: with all this change and help with some major issues,
1:32
Speaker 1: but improving the supply chain is a really complicated one.
1:36
Speaker 1: You have to consider, uh, explore import supply chain network
1:42
Speaker 1: within the manufacturing process, to online and instore merchandise management,
1:47
Speaker 1: and also the logistics and then transportation issue throughout this
1:50
Speaker 1: entire process. So and you also have to consider reverse logistics. Yeah,
1:56
Speaker 1: there's a lot. There's a lot to deal with. How
1:58
Speaker 1: long until we've out with it? Right? I mean it
2:03
Speaker 1: seems like if you want to return an item, your
2:05
Speaker 1: retailers is just struggling with that. The shipping cost is high.
2:09
Speaker 1: I think Home Depot Walmart had great results because they
2:13
Speaker 1: prepared UM probably most of this year. They learned a
2:17
Speaker 1: lot from the last twelve eighteen months, and they came
2:21
Speaker 1: into UM this important holiday season with enough people that
2:27
Speaker 1: they hired UM laborers and as well as merchandise, they're
2:30
Speaker 1: fully stopped. That's which the moret Walmart CEO the set
2:33
Speaker 1: right for the most retailers are still struggling. We're obviously
2:37
Speaker 1: not having enough merchandisees that consumers want, and then shipping
2:42
Speaker 1: costs and transportation cost is really eating up the margin.
2:46
Speaker 1: Do you think that the supply chain processes it's not broken,
2:50
Speaker 1: but it's definitely a bigger problem than just the holiday season.
2:55
Speaker 1: So how about the the other issue that we're hearing
2:57
Speaker 1: a lot about, Lisa, not just from the retailers, but
2:59
Speaker 1: just you know, uh, corporate America in general, which is
3:02
Speaker 1: kind of the labor shortage. I mean, you know, to
3:06
Speaker 1: what extent is that going to be a continuing issue
3:09
Speaker 1: for you know, some of the retailers in general, but
3:12
Speaker 1: just kind of corporate America. I mean it, this seems
3:14
Speaker 1: to be, uh, you know, one of the really fascinating
3:18
Speaker 1: outcomes of this pandemic. And I noticed it everywhere, by
3:22
Speaker 1: the way. So I was in a um Dick Sporting
3:25
Speaker 1: Goods the other day and there were lines all the
3:28
Speaker 1: way down the aisle because they only had a few
3:30
Speaker 1: people to check out. Then I went into a yardhouse
3:33
Speaker 1: which was delicious, um, but the weight was very long
3:37
Speaker 1: and there were a lot of empty tables. I asked
3:39
Speaker 1: the manager why and he said, I don't have enough
3:41
Speaker 1: staff to bust these tables. And that's just keeping that's
3:44
Speaker 1: keeping revenue down, that's hurting their business. Is that a
3:47
Speaker 1: long term issue. It's definitely a long term issue, and
3:51
Speaker 1: it's it's hitting I think it's it's near term term,
3:54
Speaker 1: long term issues. And I think that assis from the
3:57
Speaker 1: fact that these job sure are really brutal right, it
4:03
Speaker 1: can be very dirty, it's very manual labor process working
4:07
Speaker 1: in some of the warehouses or being a truck driver today, um,
4:11
Speaker 1: and also working in restaurants. I think it's it's definitely
4:14
Speaker 1: the wage problems. So the wage growth is going up obviously,
4:18
Speaker 1: and each other is trying to manage and navigate through this,
4:22
Speaker 1: and we are it's going to hit the consumer so
4:25
Speaker 1: obviously because we have to pass on some of the cost.
4:28
Speaker 1: So this is a big issue with some of the
4:31
Speaker 1: workers not wanting to do this. Turnover at places like
4:35
Speaker 1: Amazon is super high. So we think that there are
4:39
Speaker 1: some solutions to this, right because we have some machine
4:42
Speaker 1: vision technologies and autonomous worklist and robotic arms for packing
4:46
Speaker 1: and unpacking. So they are solutions the technology could help.
4:50
Speaker 1: UM it's a matter of retailers really embracing it and
4:54
Speaker 1: using outsourcers and service providers that could really help them.
4:58
Speaker 1: UM still the needs that they really need, whether it's
5:01
Speaker 1: near term or longer term, which which retailers, Lisa, which
5:05
Speaker 1: retailers are doing the best, and which ones are doing
5:08
Speaker 1: the worst. I don't need you to give me brands
5:11
Speaker 1: unless you want, but I'm just wondering, you know, in
5:13
Speaker 1: terms of UM UH classifications, Yeah, I think I think
5:19
Speaker 1: uh Waist there is one of the companies that have
5:23
Speaker 1: probably one of the better supply chain, eat Commerce, which
5:26
Speaker 1: is like an online home goods or a catalog home
5:29
Speaker 1: goods business, and they're expanding um IKEA. Obviously, companies like
5:35
Speaker 1: Amazon has really embraced technology. Walmart is really getting there
5:39
Speaker 1: as well. UM I would say every retailer at this
5:42
Speaker 1: point has to increase their capex and spending around warehouse
5:47
Speaker 1: automation and improving their supply chain. They have to. There's
5:50
Speaker 1: no choice, right because their margins are are declining. You
5:55
Speaker 1: have major UH secular headwinds coming at them, whether it's UH,
6:01
Speaker 1: the labor shortage or the wage growth or supply chain
6:05
Speaker 1: should then cost. So it's we need a real major
6:09
Speaker 1: probably up told the entire supply chain process, but we
6:12
Speaker 1: have to start somewhere. UM So we do think that
6:16
Speaker 1: very bullish on robody companies and automation companies, and also
6:20
Speaker 1: if you could implement it with AI capabilities, we think
6:25
Speaker 1: we think some of the technology solutions could really help
6:28
Speaker 1: the process. Lisa, thank you so much for joining us.
6:31
Speaker 1: Really appreciate getting your thoughts in perspective here. Lisa Chai,
6:34
Speaker 1: she's a senior analyst at robo Global, getting some thoughts
6:37
Speaker 1: on supply chain and retails. We get some of these
6:41
Speaker 1: pretty good retail numbers, you know, one of them, I
6:48
Speaker 1: think more interesting economic fallouts from this pandemic has been
6:52
Speaker 1: the Great resignation, as some people are talking about it.
6:54
Speaker 1: A lot of folks kind of left. They kind of
6:57
Speaker 1: they left the workforce. They haven't come back. Where did
7:02
Speaker 1: they go? I don't know. They're not on the trains
7:04
Speaker 1: with me in the morning. They're not on the subways
7:06
Speaker 1: with him in the morning. But we'll have to see
7:08
Speaker 1: Tom Gimbell, he's a founder and CEO of Lasal Network.
7:10
Speaker 1: They do this kind of job stuff. Tom again, I
7:13
Speaker 1: don't know if it's four million, five million, six main
7:15
Speaker 1: folks that are not on the payrolls today that were
7:19
Speaker 1: pre print pandemic. Where are they? It's a great question.
7:24
Speaker 1: I'm number one. I'm glad to hear your taking the
7:26
Speaker 1: train again. So that's uh number one. I would say
7:31
Speaker 1: that Goldman Sachs just I don't know if you read
7:33
Speaker 1: the article. They just released a study that showed the
7:35
Speaker 1: two and a half million people that have left the
7:37
Speaker 1: workforce were baby boomers that either retired or took early
7:42
Speaker 1: retirement during the pandemic and for a variety of reasons.
7:46
Speaker 1: And those people, they conclude are not coming back. So
7:49
Speaker 1: when you're looking at it, almost of the people that
7:52
Speaker 1: have retired that that is one example one excuse for
7:56
Speaker 1: where they've gone. Secondarily, you look at it and you
8:00
Speaker 1: got COVID over still looming over the economy, meaning if
8:05
Speaker 1: kids get sick from in school or there's an outbreak
8:08
Speaker 1: that a parent needs to be home with them, and
8:10
Speaker 1: so you've still got parents that haven't re entered the
8:12
Speaker 1: workforce as a result of of making sure that their
8:15
Speaker 1: home for their kids and and doing those things. And
8:17
Speaker 1: then lastly, because of the hangover from COVID even as
8:23
Speaker 1: it as it uh dissipates that restaurants and the service
8:27
Speaker 1: jobs still haven't come back. And if you combine those
8:31
Speaker 1: three things, I think that's a fairly good example of
8:34
Speaker 1: where the people have gone. It's so interesting, Um, First
8:38
Speaker 1: of all, I want to say, hangovers when you're older,
8:40
Speaker 1: they take a lot longer to recover from. I wouldn't. Um,
8:45
Speaker 1: it's so interesting that, uh, this labor shortage is hitting um,
8:50
Speaker 1: you know, retail numbers as well and hitting the bottom
8:54
Speaker 1: line of companies. How hard is it to get employees
8:58
Speaker 1: in now? What What do I'm lawyers have to do?
9:01
Speaker 1: It's it's more than just raised wages, isn't it. Yeah,
9:04
Speaker 1: the wages are are really only an aspect what the rate.
9:08
Speaker 1: When companies are raising wages now it's really to fight
9:13
Speaker 1: off defection of people leaving their companies and going for
9:16
Speaker 1: more money. Where raises used to be given as a reward,
9:20
Speaker 1: as an a merit increase of saying job well done,
9:23
Speaker 1: we want to keep you happy, and we're gonna give
9:25
Speaker 1: you more. Now it's the numbers are so staggering from
9:28
Speaker 1: competitors and other companies that you've got to do it
9:31
Speaker 1: in advanced to keep people, and I haven't seen numbers
9:36
Speaker 1: like that in a long long time, both hourly and
9:39
Speaker 1: salary levels of that happening. You know what what companies
9:44
Speaker 1: are realizing, though, is it's more than money. And you've
9:48
Speaker 1: got two sides of the coin. I think companies are
9:51
Speaker 1: afraid that employees only want to work remotely, and thus
9:56
Speaker 1: they're letting the inmates run the asylum, so to speak,
9:58
Speaker 1: and bending over backwards to make everybody happy working from home,
10:02
Speaker 1: whether that may or may not be best for the
10:04
Speaker 1: company or quite frankly, for the individual's career path. And
10:07
Speaker 1: then the other side of the of the coin is
10:10
Speaker 1: that human beings, professional human beings, um they want to
10:15
Speaker 1: be challenged and they want to achieve goals. They don't
10:17
Speaker 1: majority of who don't just want to do a job
10:20
Speaker 1: that Studies show that our our emotional satisfaction is tied
10:24
Speaker 1: to recognition and accomplishment. And the more people are are
10:28
Speaker 1: working remotely, not in a team environment, not being challenged
10:32
Speaker 1: with tasks because companies don't challenging tasks because companies don't
10:35
Speaker 1: want to lose people, you're seeing the disintegration of the
10:40
Speaker 1: fabric of corporate culture. By the way, Tom, you know
10:42
Speaker 1: we talked to you always about these labor issues because
10:46
Speaker 1: the company you founded and run is one of the
10:49
Speaker 1: leading staffing companies in the country. What does this mean
10:53
Speaker 1: for your business? What's what what's it like operating Lessau
10:56
Speaker 1: right now? Well, knock on wood, it's been the best
10:58
Speaker 1: year of the company's histories. So we've grown for for
11:01
Speaker 1: we grew for twenty two years in a row. Last
11:03
Speaker 1: year we dipped by eight percent with COVID, and this
11:06
Speaker 1: year we're up over over last year at over so
11:12
Speaker 1: this has been great for us. However, um, I think
11:16
Speaker 1: that with the infrastructure bill coming uh the that that's
11:19
Speaker 1: a good sign for the economy. My belief is that
11:22
Speaker 1: things are going to continue at this pace for the
11:24
Speaker 1: next couple of years. I'm very optimistic about the economy.
11:27
Speaker 1: That there are people entering the workforce from college graduates
11:32
Speaker 1: and people realizing that the government subsidies aren't coming back.
11:36
Speaker 1: And then and then lastly, you're going to see with
11:39
Speaker 1: the delta and not erupting into what people were afraid
11:42
Speaker 1: it would that with COVID dissipating and life getting back
11:45
Speaker 1: to normal, everybody's going to return to the workforce. I
11:47
Speaker 1: think it's gonna be really good for the economy for
11:49
Speaker 1: the next thirties, sich months. Are people going to come
11:53
Speaker 1: back to the office five days a week anymore? Or
11:56
Speaker 1: is that really a thing of the past. My belief
12:01
Speaker 1: in talking to the CEOs and vps of HR that
12:04
Speaker 1: we deal with every day, week, months, so to speak,
12:08
Speaker 1: is that I think my belief is that Fridays will
12:13
Speaker 1: become remote fridays the way casual Fridays became casual Fridays.
12:18
Speaker 1: That there'll always be some industries or companies that will
12:20
Speaker 1: be in the office five days a week, but that
12:23
Speaker 1: the majority of companies will have remote fridays. And you'll
12:28
Speaker 1: see the majority of companies will be in the office
12:31
Speaker 1: four days a week, with a good percentage three days
12:33
Speaker 1: a week. By the way, Paul, did I tell you
12:36
Speaker 1: about flannel Friday? Friday? This Friday and crities in here too.
12:41
Speaker 1: I want everyone to wear flannel shirts. It's my last day,
12:44
Speaker 1: and then we are assuming we all own a flannel shirt.
12:47
Speaker 1: I know you own a flannel shirt. Dude. You gotta
12:52
Speaker 1: be kidding. Well, that's not bad. Four days a week
12:55
Speaker 1: in the office, tom Um, I'm guessing that's better than
12:59
Speaker 1: probably Paul expected when he asked, I mean, I mean
13:02
Speaker 1: from the from the from the perspective of old conservative
13:05
Speaker 1: guys like Paul Sweeney. Um, he wants kids at their desks,
13:11
Speaker 1: you know, grinding it out, or on planes visiting clients.
13:15
Speaker 1: So and I know that a lot of people are
13:17
Speaker 1: thinking maybe it's gonna only be two or three days
13:20
Speaker 1: a week. But so four days a week, I think
13:22
Speaker 1: for Paul is that's good enough. Well, all it takes
13:25
Speaker 1: is is the market to drop and inflation to go up,
13:29
Speaker 1: and people will be bad. You want people five days
13:31
Speaker 1: a week. Wait until interest rates or at five six
13:33
Speaker 1: seven percent, unemployments back to seven eight and the stock
13:38
Speaker 1: markets down by fifteen and then everything reverses and people
13:42
Speaker 1: be in the office five days a week. Tom still quickly.
13:45
Speaker 1: Immigration legal and illegal, how much is that impacting the
13:48
Speaker 1: dearth of workers hugely? I think it's something that's not
13:52
Speaker 1: talked about quite a bit. But you've got to think
13:54
Speaker 1: back even before the Obama administration or the Trump administration,
13:57
Speaker 1: for the last year or two of the Obama administration,
14:00
Speaker 1: and immigration was becoming a bigger and bigger deal. And
14:02
Speaker 1: when you stop it or stop it's an overstatement but
14:06
Speaker 1: when you when you make it such a spotlight on it,
14:09
Speaker 1: and it's become a bigger issue, and not allowing people
14:12
Speaker 1: into the country from the southern border as aggressively, and
14:15
Speaker 1: then the H one B vs a problem and not
14:17
Speaker 1: letting people in it becomes a huge issue, both on
14:20
Speaker 1: the H one B, on the I T side, and
14:24
Speaker 1: on the service sector. Why we don't have enough people
14:26
Speaker 1: is directly tied to those problems, right, absolutely, all right, Tom,
14:30
Speaker 1: thank you so much for joining us. It was great
14:32
Speaker 1: thoughts and perspective on the labor market, Tom Gimbel. He's
14:35
Speaker 1: found there in CEO of La Sound Network. Less Sound
14:37
Speaker 1: network kind of places people with jobs. So Tom's got
14:40
Speaker 1: a great got his pulse finger on the pulse of
14:43
Speaker 1: the labor market again, trying to get folks back to work.
14:47
Speaker 1: Is it just higher pay? Alright? We had some good
14:53
Speaker 1: consumer data points out this morning. Consumer spending for the
14:56
Speaker 1: month of October came in better than expected. Then, of
14:58
Speaker 1: course the big dogs Home Depot Walmart reporting some really
15:02
Speaker 1: strong numbers taking some guidance up. Uh, so the consumers
15:05
Speaker 1: seems to be in pretty good spot here. Let's check
15:08
Speaker 1: in with Jen Bartasha sees a senior analysts. She covers food, retail,
15:12
Speaker 1: mass merchants, packaged food, pretty much everything on the retail
15:15
Speaker 1: space for Bloomberg Intelligence. Uh, Jen, give us your takeaway.
15:19
Speaker 1: It looks like when I'm looking at the home Depot
15:22
Speaker 1: when Walmart numbers pretty good stuff there. Yeah, good morning, Paul.
15:26
Speaker 1: It thinks actually, we're a very solid quarter for Walmart.
15:29
Speaker 1: Home Depot obviously had had good results as well. Um.
15:33
Speaker 1: And it really does underscore the fact that the consumer
15:35
Speaker 1: does have money and they are spending. They're just spending
15:38
Speaker 1: it selectively. Right now, what are the concerns at a
15:42
Speaker 1: for example, a company like Walmart. They beat earnings expectations
15:46
Speaker 1: and the shares are down. Yeah, the stock is down today. Um.
15:50
Speaker 1: You know, and even though Walmart is very well positioned
15:52
Speaker 1: for the holiday. Um. You know, what we're really looking
15:55
Speaker 1: about and talking about here in comparison to the other
15:57
Speaker 1: retailers is it's a margin store. Um. You know, there's
16:02
Speaker 1: been long term concern about Walmart's uh well, it's erosion
16:05
Speaker 1: of its margin over time. Um. And some of the
16:08
Speaker 1: comments on the call today, you know, and the fact
16:10
Speaker 1: that Walmart is the last company out there took to
16:13
Speaker 1: raise prices in an inflationary environment kind of inflames some
16:17
Speaker 1: concerns about margin overall over the next quarter and into
16:20
Speaker 1: next year. Yeah, Jen, that's kind of where I wanted
16:22
Speaker 1: to go looking at the margins here. I know, you
16:25
Speaker 1: know from reading your research, UM that you know top
16:28
Speaker 1: line is important, but you really got to focus, you know,
16:31
Speaker 1: at the profit margin. You know, they're facing a lot
16:35
Speaker 1: of issues, whether it's supply chain, whether it's higher labor costs.
16:39
Speaker 1: What are those two big companies telling us about their
16:41
Speaker 1: margins going forward? Well, there's certainly some expectation that a
16:45
Speaker 1: lot of these pressures are going to continue through the
16:47
Speaker 1: fourth quarter, which is a huge holiday quarter for all
16:51
Speaker 1: of retail, and into next year. UM. When you're looking
16:54
Speaker 1: at supply chain UM, there there are some structural issues
16:57
Speaker 1: that are going to take a little bit longer to overcome,
16:59
Speaker 1: So things like transportation costs UM, you know, those are
17:03
Speaker 1: things that are going to take time to work out
17:04
Speaker 1: of the system. So we're anticipating seeing some of this
17:07
Speaker 1: pressure coming from the supply chain lingering well into next
17:11
Speaker 1: year UM and affecting these companies, and so it really
17:14
Speaker 1: comes down to strategy on how well they can manage
17:16
Speaker 1: other costs to help offset that pressure. What's the difference
17:19
Speaker 1: in terms of scale looking at a home depot and
17:22
Speaker 1: looking at a Walmart. I imagine I think of Walmart
17:26
Speaker 1: as this like supply chain Goliath that can just you know,
17:31
Speaker 1: wield and tremendous power. And Doug McMillan did say, fighting
17:35
Speaker 1: inflation is in our d n A, but can they
17:38
Speaker 1: really do something about it? Well, it's it's a good question, Matt.
17:42
Speaker 1: And when you when you really look at Walmart scale, UM,
17:46
Speaker 1: they have been leveraging that scale to be able to
17:48
Speaker 1: increase their inventory, which is up almost twelve going into
17:51
Speaker 1: fourth quarter. UM. They're able to force things through the
17:55
Speaker 1: system to a degree that some smaller players can't do UM,
17:58
Speaker 1: and we expect that that keep it ability will continue.
18:01
Speaker 1: But they are also investing and expanding their capacity and
18:04
Speaker 1: supply chain UM so that they have more flexibility going forward.
18:08
Speaker 1: And that's going to be an important part of their
18:10
Speaker 1: story as they try to do more in terms of
18:12
Speaker 1: third party fulfillment, sort of like Amazon does with some
18:16
Speaker 1: of their marketplace customers. UM. So it's a story that's
18:19
Speaker 1: in progress, UM, and we're watching it unfold. Jen. Are
18:22
Speaker 1: people going back to the stores or have they just
18:25
Speaker 1: you know, since the pandemic said, I can do pretty
18:27
Speaker 1: much everything from my couch with a click of the
18:30
Speaker 1: mouse or just the app. People are actually going back
18:33
Speaker 1: to stores. UM. And if you looked and you broke
18:35
Speaker 1: down the same store sales numbers from Walmart today, for example,
18:39
Speaker 1: UM traffic into stores is positive. It's up UM over
18:43
Speaker 1: almost six percent in the US for Walmart UM in
18:45
Speaker 1: the last quarter. And with all of the supply chain
18:48
Speaker 1: concerns and the news that you see about you know,
18:50
Speaker 1: potential delays for shipping, especially around the holiday period, we're
18:54
Speaker 1: expecting that in the fourth quarter that consumers will be
18:57
Speaker 1: going into stores a lot to do their holiday shopping,
19:00
Speaker 1: just so that they're sure that they have the goods
19:02
Speaker 1: that they want to be able to gift. Is Walmart
19:05
Speaker 1: getting all the stuff? I mean, are there are they
19:08
Speaker 1: having real problems getting certain things in there? Well? I
19:12
Speaker 1: think that there are some hiccups a lung the supply
19:14
Speaker 1: chain for all retailers, and there are some products that
19:16
Speaker 1: are UM inherently a little less stable than others. So
19:20
Speaker 1: when you talk about especially on the grocery side, UM,
19:23
Speaker 1: things like fresh produce UM, you know, it's harder to
19:27
Speaker 1: make sure that everything gets to the stores as fresh
19:29
Speaker 1: as possible in this current environment. Um. But what we're
19:33
Speaker 1: seeing is that there are generally things in stock. UM,
19:36
Speaker 1: it's just a question of how quickly they're going to
19:38
Speaker 1: be able to replenish as demands starts to rise. So, Jen,
19:41
Speaker 1: we have tomorrow, we have Lows, Target, we have t
19:44
Speaker 1: J Max or as it's known in Europe, t K Max.
19:48
Speaker 1: Really oddly, UM, we've got raw stores coming up. I mean,
19:54
Speaker 1: how does this earning season, how do you think it's
19:56
Speaker 1: going to pan out? Given what we've seen today? Well,
19:58
Speaker 1: based on what we've seen so far, UM, you know,
20:01
Speaker 1: there's reason to be optimistic about how the results are
20:03
Speaker 1: going to play out over the next week or so. UM.
20:06
Speaker 1: You know, consumers are still very focused on value. And
20:09
Speaker 1: you talk about some of the names that you mentioned,
20:11
Speaker 1: whether it's t j X, UM, you know Target, UM,
20:14
Speaker 1: you know these companies you know play to that value
20:17
Speaker 1: segment in different ways, UM, and and people define value differently.
20:21
Speaker 1: But but we see that that's resonating. So that should
20:23
Speaker 1: vote should vote pretty well for earning. Jen, thanks so much.
20:32
Speaker 1: I think we can remember all the way back to
20:33
Speaker 1: last week we had in Glasgow, Scotland COP twenty six
20:37
Speaker 1: talking about the future of energy. Quite frankly, I'm not
20:40
Speaker 1: sure what really came out of that, but I want
20:42
Speaker 1: to ask an expert here and we'll do that with
20:44
Speaker 1: Seth Great, President and chief executive officer of light Bridge Corporation. Seth,
20:48
Speaker 1: thanks so much for joining us here. Again, we've got
20:50
Speaker 1: a little bit of benefit of some hindsight here. But
20:53
Speaker 1: if we look back to COP twenty six, what are
20:56
Speaker 1: the key takeaways that that you made? Was anything of
21:00
Speaker 1: substance achieved? You know, there was little of substance achieved
21:05
Speaker 1: in terms of a formal agreement which agreed to phase
21:09
Speaker 1: down call instead of the original goal of phase out coal.
21:13
Speaker 1: That's a new phase by the way, phasing down. I
21:15
Speaker 1: used it at dinner last night and everybody, no one
21:18
Speaker 1: what I mean, sound like you're at Davos or something,
21:20
Speaker 1: And you know, so I think that what came out
21:25
Speaker 1: of it though, was a real search for what are
21:28
Speaker 1: the alternatives as we do phase down and phase out
21:32
Speaker 1: coal and other fossil fuels. What are we going to do?
21:36
Speaker 1: And you know we've seen in the news today the
21:38
Speaker 1: Germany announced suspension of certifying the nord Stream to pipeline
21:43
Speaker 1: to bring in natural gas from Russia. What are they
21:45
Speaker 1: going to do? You mentioned before fueling up your four
21:49
Speaker 1: D F one fifty. It's almost like buying a new
21:51
Speaker 1: car every time you fuel it up now at these
21:53
Speaker 1: prices of gasoline, and you know, part of what we
21:57
Speaker 1: have to do. And I just got back from an
21:59
Speaker 1: Internet sational trip. Were heard a lot about this in
22:02
Speaker 1: several countries. Is grow nuclear power. That nuclear power is
22:07
Speaker 1: almost immune from these price bikes, from this inflation in
22:13
Speaker 1: energy prices. But why why don't we you know? I
22:16
Speaker 1: was um really impressed when I watched the Bill Gates
22:20
Speaker 1: documentary on Netflix and they're they're one of those it's
22:24
Speaker 1: a three part series. I don't know if everyone's seen that.
22:26
Speaker 1: One of them is pretty focused on nuclear and um.
22:30
Speaker 1: He is making the case that we're at a stage
22:34
Speaker 1: of development now where you no longer have to worry
22:37
Speaker 1: about something like Fukushima. It's incredibly safe and in fact,
22:41
Speaker 1: he can even use spent fuel UM to power new
22:46
Speaker 1: UH new facilities, so you don't need to worry as
22:50
Speaker 1: much about the waste either. What are what's stopping us
22:54
Speaker 1: UM SETH from building more? Is it just the initial costs?
22:58
Speaker 1: Are they so huge? Well, they used to be to
23:03
Speaker 1: build these giant reactors. But what Bill Gates is talking about,
23:06
Speaker 1: what we at Lightbridge are talking about, are these new, smaller,
23:09
Speaker 1: cheaper reactors and you know, cost much much less to
23:15
Speaker 1: to build. Uh don't you know, um have the financial
23:20
Speaker 1: risk to nearly the degree of the giant plants, and
23:23
Speaker 1: a light Bridge were also designing and with US government support,
23:27
Speaker 1: testing new fuel that will make the existing plants much
23:31
Speaker 1: more economical and much safer, run a thousand degrees celsius
23:35
Speaker 1: cooler in the reactors and produce zero c O two.
23:40
Speaker 1: So I think what Bill Gates is doing with new
23:42
Speaker 1: advanced kinds of reactors is great, but none of them
23:45
Speaker 1: exist yet. We look forward to them existing, and we
23:48
Speaker 1: look forward to light Bridge helping to fuel some of
23:50
Speaker 1: the new reactors that will come out, but also companies
23:53
Speaker 1: like light Bridge that that will bring new fuels, new technology,
23:57
Speaker 1: these new safety advances to the existing reactors as well.
24:00
Speaker 1: All right, so let me ask you this. Have you
24:03
Speaker 1: spoken with Angelo Miracle or all Off Schultz, Because in
24:07
Speaker 1: a country where the Green Party has gained a pretty
24:11
Speaker 1: exceptional amount of power, they're still burning like the dirtiest
24:15
Speaker 1: coal on the planet, and that they would rather pay
24:20
Speaker 1: um through the nose for dirty fuel than used nuclear reactors.
24:26
Speaker 1: Why is that, Well, there's a lot of politics there
24:30
Speaker 1: with the Green Party in Germany holding that coalition together
24:34
Speaker 1: to stay in power, and they're totally wrong. You see
24:37
Speaker 1: this combination of three things. In Germany. They have some
24:41
Speaker 1: of the dirtiest energy production in the world, They have
24:44
Speaker 1: some of the most expensive energy production in the world,
24:48
Speaker 1: and they like to brag the most that they have
24:49
Speaker 1: the greatest energy plan in the world. And it's just
24:53
Speaker 1: not working. You can't shut down nuclear and avoid having
24:58
Speaker 1: energy prices spike and having c O two and pollution spike.
25:02
Speaker 1: And Germany is just the perfect example of it. Sets
25:06
Speaker 1: where we in the United States as it relates to
25:08
Speaker 1: nuclear energy. Is there support? Is it an economic issue
25:13
Speaker 1: or is there just some fundamental that's just not the
25:16
Speaker 1: path we want to go. Yeah, you know, it's somewhere
25:19
Speaker 1: in the middle that most Americans do support having nuclear
25:23
Speaker 1: power in the country. It provides about twenty of the
25:27
Speaker 1: electricity but much more than half of all clean power
25:31
Speaker 1: of zero CEO two zero pollution power, and it is growing.
25:36
Speaker 1: There are two large reactors under construction in in Georgia.
25:41
Speaker 1: There's a new small reactor, a little Star construction in
25:45
Speaker 1: in Idaho, and there's talk of adding some to coal
25:49
Speaker 1: plant sites in in Montana and in other parts of
25:53
Speaker 1: the West and Midwest, which I think makes a lot
25:55
Speaker 1: of sense putting these small reactors on sites that would
25:58
Speaker 1: have coal plants that shut down. Good for employment, good
26:01
Speaker 1: for keeping the connection to the electrical grid, trained workforce, etcetera.
26:06
Speaker 1: And I think a lot of the growth in nuclear
26:08
Speaker 1: in this country will come from smaller reactors at former
26:11
Speaker 1: coal fights as the years go by. Thanks so much
26:16
Speaker 1: for joining us. Really appreciated getting your thoughts on the
26:18
Speaker 1: really interesting global energy nuclear It's a conversation, uh, you know,
26:23
Speaker 1: as we see energy prices fluctuate that continues to come
26:26
Speaker 1: to the four seveth grade, President and chief executive officer
26:30
Speaker 1: of light Bridge Corporation. Looking at w T I crude
26:32
Speaker 1: oil right here, it's pretty steady today, but just under
26:36
Speaker 1: I will point out, Uh, the F one fifty that
26:39
Speaker 1: I'm driving is a thirty six gallon tank. That is
26:42
Speaker 1: why that will set you back, which why it cost
26:44
Speaker 1: me about two d bucks to fill it up. Thanks
26:48
Speaker 1: for listening to the Bloomberg Markets podcast. You can subscribe
26:51
Speaker 1: and listen to interviews with Apple Podcasts or whatever podcast
26:55
Speaker 1: platform you prefer. I'm Matt Miller. I'm on Twitter at
26:58
Speaker 1: Matt Miller nineteen seventy three. On ball Sweeney, I'm on
27:02
Speaker 1: Twitter at pt Sweeney. Before the podcast, you can always
27:05
Speaker 1: catch us worldwide at Bloomberg Radio