Latest / Bloomberg Intelligence / CT Finances, Yields, Obesity Drugs, and Cars

Transcript

CT Finances, Yields, Obesity Drugs, and Cars · Bloomberg Intelligence

• 0:00
  Speaker 1: Bloomberg is now on your dashboard with Apple CarPlay and
• 0:04
  Speaker 1: Android Auto. It gives you access to every Bloomberg podcast,
• 0:08
  Speaker 1: live audio feeds from Bloomberg Radio, print stories from Bloomberg
• 0:11
  Speaker 1: News in audio form, and the latest headlines of the
• 0:14
  Speaker 1: click of a button with Bloomberg News. Now it's free
• 0:18
  Speaker 1: with the latest version of the Bloomberg Business App. That's
• 0:21
  Speaker 1: the Bloomberg Business App. Get it on your phone in
• 0:24
  Speaker 1: the Apple App Store or on Google Play. Just download
• 0:27
  Speaker 1: the app, connect your phone to your car and get started.
• 0:30
  Speaker 1: And it's all presented by our sponsor, Interactive Brokers.
• 0:35
  Speaker 2: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside
• 0:38
  Speaker 2: my co host Matt Miller.
• 0:40
  Speaker 1: Every business day we bring you interviews from CEOs, market pros,
• 0:44
  Speaker 1: and Bloomberg experts, along with essential market movin news.
• 0:48
  Speaker 2: I'm the Bloomberg Markets podcast called Apple Podcasts or wherever
• 0:51
  Speaker 2: you listen to podcasts, and at Bloomberg dot com slash podcast,
• 0:55
  Speaker 2: Matt Miller Paul Sweeney live here in our Bloomberg Interactive
• 0:57
  Speaker 2: Broker studio or also streaming live on that YouTube thing.
• 1:00
  Speaker 3: I think that's the Internet.
• 1:01
  Speaker 2: So go over to YouTube dot com and search Bloomberg Radio.
• 1:03
  Speaker 2: Sean Scalon Joints is here comptroller for the state of Connecticut.
• 1:07
  Speaker 2: I live in Jersey. MAT's in New York. So we said,
• 1:09
  Speaker 2: let's bring a guy in from Connecticut tri state exactly
• 1:12
  Speaker 2: here we go, say Harriett, Sean, what does.
• 1:14
  Speaker 4: A comptroller do? The question I get a lot is controller?
• 1:20
  Speaker 4: Just actually just actually google it comptroller. So I'm essentially
• 1:24
  Speaker 4: the chief financial officer of state. We are the accountant.
• 1:27
  Speaker 4: We pay all the bills, pay all the employees. I
• 1:30
  Speaker 4: procure health care for two hundred and fifty thousand people.
• 1:33
  Speaker 4: We do a lot of random things, but I guess
• 1:35
  Speaker 4: CFO is probably the easiest way to explain it.
• 1:37
  Speaker 2: Okay, that being said, give us the state of finances
• 1:41
  Speaker 2: in Connecticut.
• 1:42
  Speaker 5: Yeah, Well, after a long time of people saying Connecticut's
• 1:46
  Speaker 5: you know best stays are behind them, we've actually seen
• 1:48
  Speaker 5: some big turnarounds and our governor and Ed Lamont deserves
• 1:51
  Speaker 5: a lot of credit for that. He came in in
• 1:52
  Speaker 5: twenty eighteen. We passed a bipartisan budget the year before
• 1:55
  Speaker 5: he got there that has basically set up some fiscal
• 1:58
  Speaker 5: controls that are right now now bearing a lot of
• 2:01
  Speaker 5: fruit in the sense that We've had five years of
• 2:04
  Speaker 5: consecutive budget stover pluses. We've paid off almost eight billion
• 2:07
  Speaker 5: of our forty billion dollars a pension debt just in
• 2:09
  Speaker 5: the last four years, and we've got a full raindy
• 2:11
  Speaker 5: day fund for the first time in the history of
• 2:13
  Speaker 5: the state. And a lot of that is due to
• 2:15
  Speaker 5: us just staying with these fiscal controls that are obviously
• 2:18
  Speaker 5: bearing fruit right now.
• 2:19
  Speaker 2: And before you were a comptroller, you starting twenty fourteen,
• 2:21
  Speaker 2: you were elected state representative for Connecticut's ninety eighth district,
• 2:25
  Speaker 2: So you're not new to this whole political thing.
• 2:28
  Speaker 5: Not new the whole political thing. And I got elected
• 2:30
  Speaker 5: really young. I'm the youngest person ever to get elected
• 2:32
  Speaker 5: this job. So even though I look like I'm fifteen,
• 2:35
  Speaker 5: I actually have been doing this for a little bit.
• 2:37
  Speaker 5: And I'm in my first year of this job, which I.
• 2:39
  Speaker 6: Like a lot of stuff, all right.
• 2:41
  Speaker 3: So I have a question that I have been asking
• 2:43
  Speaker 3: for years and years. As I live in Westchester, I
• 2:47
  Speaker 3: pay like my property taxes are a German luxury sedan
• 2:52
  Speaker 3: right every year. And I get that we have very
• 2:55
  Speaker 3: good schools in Westchester, and I get that we want
• 2:59
  Speaker 3: our firemen to get paid. You know when the trash
• 3:01
  Speaker 3: is taken out. But there are also very good schools
• 3:04
  Speaker 3: in New Canaan or Derry Anne, right, And the taxes
• 3:08
  Speaker 3: are like a third of what they are in Westchester.
• 3:10
  Speaker 3: Is that just because of graft and corruption that New
• 3:14
  Speaker 3: York taxes are so high?
• 3:16
  Speaker 5: You didn't get the luxury sedan for your county tax payment?
• 3:19
  Speaker 5: Are you saying, no, Listen?
• 3:21
  Speaker 1: Why is it so high? New York and New Jersey
• 3:23
  Speaker 1: are so much higher than Connecticut.
• 3:25
  Speaker 5: Lairs of government, right, We don't have county government in Connecticut,
• 3:28
  Speaker 5: so it's municipal government. Some people think that's a bad thing,
• 3:30
  Speaker 5: and sometimes it is a bad thing. But when you
• 3:32
  Speaker 5: pay taxes to your town, taxes to your county, taxes
• 3:35
  Speaker 5: to your state, it just adds up and adds up.
• 3:38
  Speaker 5: We don't mentically have the services that maybe you do
• 3:40
  Speaker 5: in Westchester County. But to your point, we've got amazing schools,
• 3:44
  Speaker 5: we've got local police and fire, you've got great quality
• 3:46
  Speaker 5: of life. And I think with this turnaround that we're seeing,
• 3:49
  Speaker 5: we're actually starting to see people move. Fifty seven thousand
• 3:52
  Speaker 5: people move from New York State to Connecticut last year alone.
• 3:55
  Speaker 5: You're starting to see that migration for obvious reasons, but
• 3:58
  Speaker 5: also the reasons you're talking.
• 3:59
  Speaker 3: About your take on the state and local tax deduction.
• 4:03
  Speaker 3: Donald Trump and the Republicans capped it ten thousand dollars
• 4:07
  Speaker 3: in twenty seventeen, ostensibly to raise revenue on the federal level,
• 4:11
  Speaker 3: but it seems like it was more like retribution for
• 4:15
  Speaker 3: those states that didn't vote for him. Is it helpful
• 4:19
  Speaker 3: to you? Does it matter to you? Do you feel
• 4:22
  Speaker 3: like your paying your state is paying its fair share.
• 4:25
  Speaker 5: I think it's a problem. I mean, I think that
• 4:27
  Speaker 5: I don't dabble a lot in federal politics because that
• 4:30
  Speaker 5: would consume my entire life. But obviously I think that
• 4:33
  Speaker 5: it's having an impact on our region. You just joked
• 4:35
  Speaker 5: about the tri state. It's a tri state issue. But
• 4:38
  Speaker 5: for us, you know, a lot of what we see is,
• 4:42
  Speaker 5: you know, we have a lot of people that live
• 4:44
  Speaker 5: in Fairfield County that work here in Manhattan every single day,
• 4:47
  Speaker 5: and when that is adjusted properly, as we're doing now
• 4:51
  Speaker 5: through these fifial guardrails, I'm talking about when the markets
• 4:54
  Speaker 5: of folatile, we actually save money and it can't be
• 4:56
  Speaker 5: spent by politicians, so that when things are not going
• 4:59
  Speaker 5: well on the market, we don't have budget imbalanced problems,
• 5:02
  Speaker 5: and that is that fiscal garb rue what I'm talking about.
• 5:04
  Speaker 5: That's bearing a lot of fruit right now and helping
• 5:06
  Speaker 5: us big time. But the salt cap does certainly impact
• 5:09
  Speaker 5: a lot of folks in our state.
• 5:11
  Speaker 2: So you mentioned that there are some people out there
• 5:13
  Speaker 2: that feel like the best days of the Connecticut may be
• 5:15
  Speaker 2: behind it. I know, maybe great financial crisis. I know
• 5:18
  Speaker 2: a lot of people that I know just said the
• 5:20
  Speaker 2: hell with this whole Wall Street thing. I'm out including
• 5:23
  Speaker 2: and they left the Tri state area. Yeah, but that
• 5:27
  Speaker 2: crystallized to me in terms of companies leaving Connecticut and
• 5:29
  Speaker 2: going to other parts of the country. Where are you
• 5:31
  Speaker 2: in terms of trying to attract corporate entities back into
• 5:35
  Speaker 2: the state.
• 5:35
  Speaker 5: Yeah, you know, for years, you know, the sort of
• 5:38
  Speaker 5: the model was, let's try to pay a company a
• 5:41
  Speaker 5: lot of money to move headquarters to Connecticut. And I
• 5:44
  Speaker 5: think now we're changing that a little bit to say,
• 5:46
  Speaker 5: let's try to authentically grow companies in Connecticut. And we're
• 5:49
  Speaker 5: seeing that a lot around biotech. Yale is a great
• 5:53
  Speaker 5: resource for us. Right we're between Boston and New York.
• 5:56
  Speaker 5: There's a lot of people who are starting to invest
• 5:58
  Speaker 5: in that, and we're seeing tremendous growth right now with
• 6:02
  Speaker 5: biotech and medical innovation. We obviously have Fairfield County. We
• 6:08
  Speaker 5: do see companies, you know, that have left in the
• 6:10
  Speaker 5: last ten years. Ge left, for example, and that was
• 6:12
  Speaker 5: sort of when the everyone sort of said, oh my god,
• 6:15
  Speaker 5: it's over. But you are seeing that growth coming back now.
• 6:18
  Speaker 5: And I think that that's a testament to people just
• 6:20
  Speaker 5: feeling bullsh on Connecticut for the first time in a
• 6:22
  Speaker 5: long time.
• 6:23
  Speaker 3: What are you doing for your employees. I'm about to
• 6:27
  Speaker 3: go on six months of paternity leave, okay, And when
• 6:31
  Speaker 3: I tell people that, they are astounded that Bloomberg offers that.
• 6:35
  Speaker 3: But of course they also say, then, hey, can I
• 6:38
  Speaker 3: get a job at Bloomberg?
• 6:39
  Speaker 7: Right?
• 6:39
  Speaker 3: It attracts people these kinds of policies. Not just that,
• 6:43
  Speaker 3: but I noticed that you've got some you know, reproduction policies,
• 6:49
  Speaker 3: You've got some pharmacy benefits policies. What are you most
• 6:52
  Speaker 3: excited about?
• 6:53
  Speaker 5: Well, listen, I love the fact that we can sort
• 6:55
  Speaker 5: of do things within that two hundred and fifty thousand
• 6:58
  Speaker 5: universe that I oversee, which is all these employees, their
• 7:00
  Speaker 5: family members, the retirees. It's like a little bit of
• 7:03
  Speaker 5: a Petri dish where we can sort of experiment with
• 7:05
  Speaker 5: what works. And we find that when you treat your
• 7:08
  Speaker 5: employees fairly, you pay them well, you give them reach
• 7:11
  Speaker 5: benefits that allow them to sort of feel like secure
• 7:14
  Speaker 5: and valued in their job, they stay and they're productive.
• 7:18
  Speaker 5: We learn that best from the private sector, right companies
• 7:21
  Speaker 5: like this, where you treat your employees well, it's a
• 7:23
  Speaker 5: good place to work, it's a good environment. If we
• 7:26
  Speaker 5: can find out how to do that at a lower
• 7:29
  Speaker 5: scale and with less money, we can get that job done.
• 7:34
  Speaker 5: But you know it's Connecticut is a state that has
• 7:37
  Speaker 5: paid Family Lief, So every single person in Connecticut pays
• 7:41
  Speaker 5: zero point five percent of their income every pay period
• 7:44
  Speaker 5: towards a paid family view fund that allows anybody in
• 7:47
  Speaker 5: the state to take advantage of that to take time
• 7:49
  Speaker 5: off for a baby, to take time off to care
• 7:51
  Speaker 5: for a sick loved one. And so far that has worked,
• 7:55
  Speaker 5: and I think companies have said, actually, this is good
• 7:57
  Speaker 5: because we don't have to pay for it. You're paying
• 7:59
  Speaker 5: for it, or they're paying for What are.
• 8:01
  Speaker 2: The big challenges, the biggest challenges facing Connecticut these days.
• 8:03
  Speaker 5: Getting rid of that perception is still a problem, right,
• 8:07
  Speaker 5: and we don't want that to be a self fulfilling prophecy.
• 8:09
  Speaker 5: So we want to change that perception, which is part
• 8:11
  Speaker 5: of the reason why the governor spent so much time
• 8:12
  Speaker 5: talking about, hey, it's a new day in Connecticut to
• 8:15
  Speaker 5: give us a look. But I think we continue to
• 8:18
  Speaker 5: look at our tax structure. This year, we passed the
• 8:20
  Speaker 5: largest single income tax cut in the history of the state,
• 8:23
  Speaker 5: which is a big deal and effects literally ninety nine
• 8:26
  Speaker 5: percent of our filers. The year before that, we passed
• 8:29
  Speaker 5: the second biggest tax cut ever. So with these surpluses,
• 8:33
  Speaker 5: with this better fiscal management, we're not just paying down
• 8:35
  Speaker 5: our debt, which we have a lot of, but we're
• 8:38
  Speaker 5: also cutting taxes and trying to figure out a way
• 8:41
  Speaker 5: to make sure that Connecticut is going in the right
• 8:43
  Speaker 5: direction and give guys like you some optimism that maybe
• 8:46
  Speaker 5: you should stop paying those crazy taxes in New York
• 8:48
  Speaker 5: and come over to Connecticut.
• 8:49
  Speaker 3: Absolutely love it, absolutely love it. What about the transportation system.
• 8:54
  Speaker 3: I mean, as you mentioned, a lot of women and
• 8:57
  Speaker 3: men in Fairfield County work here, but also the whole
• 9:00
  Speaker 3: Northeast court or Yeah, I feel like right now is
• 9:03
  Speaker 3: at a point where it could get better. Or it
• 9:05
  Speaker 3: could get worse.
• 9:06
  Speaker 5: Yeah, Listen, the President just annound a couple days ago.
• 9:09
  Speaker 5: He's investing a lot of money into instructure and specifically
• 9:11
  Speaker 5: rail that is going to help. In Connecticut, there was
• 9:13
  Speaker 5: a three or four projects in that quarter et CE
• 9:16
  Speaker 5: that are going to get billions of dollars to help
• 9:19
  Speaker 5: U speed.
• 9:19
  Speaker 3: These trains are looking at cutting Amtrak's budget by like
• 9:23
  Speaker 3: ninety percent right now.
• 9:24
  Speaker 5: And this is the problem we have right now in
• 9:26
  Speaker 5: politics is that we don't have everybody on the same
• 9:29
  Speaker 5: page about what our common sense things. If you live
• 9:32
  Speaker 5: in this area, you should think that a train going
• 9:34
  Speaker 5: faster and safely faster to Manhattan from Connecticut Jersey Long
• 9:38
  Speaker 5: Island is a good thing for our national economy. We
• 9:43
  Speaker 5: have a thinking can I could call the thirty thirty thirty.
• 9:44
  Speaker 5: We want to get from Stanford to Manhattan at thirty
• 9:46
  Speaker 5: minutes and from Stanford to New Haven in thirty minutes.
• 9:50
  Speaker 5: That's going to cost a lot of money, but to me,
• 9:52
  Speaker 5: the investment is worth it. But I took Metro North down.
• 9:54
  Speaker 8: Here this morning.
• 9:55
  Speaker 5: It was very quick, it was very easy, and we
• 9:58
  Speaker 5: just want more people to get back on the trains.
• 10:00
  Speaker 2: Austin Rider show, Yeah, see he goes into Grand Central,
• 10:02
  Speaker 2: though I go on it's the station where the serious
• 10:04
  Speaker 2: commuters go.
• 10:06
  Speaker 3: Dude, when you get off the train at Grand Central,
• 10:08
  Speaker 3: you feel like a kind of dang.
• 10:11
  Speaker 2: You guys are pampered. You got to come into Penn Station.
• 10:14
  Speaker 2: That's where the hearty souls go. All right, Sean, thanks
• 10:16
  Speaker 2: so much for joining us. Sean Scaling. He is the comptroller,
• 10:19
  Speaker 2: not controller comptroller for the state of Connecticut. We're going
• 10:23
  Speaker 2: to call that the CFO of the state of Connecticut.
• 10:28
  Speaker 7: You're listening to the team Ken's are Live program Bloomberg
• 10:31
  Speaker 7: Markets weekdays at ten am Eastern on Bloomberg dot Com,
• 10:35
  Speaker 7: the iHeartRadio app, and the Bloomberg Business app, or listen
• 10:38
  Speaker 7: on demand wherever you get your podcasts.
• 10:42
  Speaker 2: I saw some old guy walking through the hallways here
• 10:44
  Speaker 2: with like a gray beard and all kinds of things.
• 10:47
  Speaker 2: I don't know how we let him in, but he
• 10:50
  Speaker 2: I used to go on. So but anyway, Uh okay,
• 10:56
  Speaker 2: so anyway, so walking around, so I just want to
• 10:59
  Speaker 2: check in what's happening. It's Sam Fazzelli. He's head of
• 11:01
  Speaker 2: European Research. He's a pharma analyst for Bloomberg Intelligence. We
• 11:04
  Speaker 2: used to talk to him all the time back in
• 11:06
  Speaker 2: the day about the pandemic and covid and the virus
• 11:09
  Speaker 2: and all the vaccines and all that kind of stuff.
• 11:11
  Speaker 2: But that's done and dusted for me, so we're not
• 11:13
  Speaker 2: even gonna go there. Didn't you just get your new vaccine?
• 11:15
  Speaker 2: I just got my booster, because why not. I walked
• 11:17
  Speaker 2: by the Walgreens and they're just like, come on in.
• 11:19
  Speaker 8: So did they give you a lollipop with it?
• 11:20
  Speaker 4: No?
• 11:20
  Speaker 2: I got a little. I got a little Walgreens.
• 11:23
  Speaker 3: I got some heart shaped band aids. At the CVS.
• 11:27
  Speaker 3: I got a double vaccine a couple weeks ago. So
• 11:29
  Speaker 3: I got the covid in one arm and then the
• 11:33
  Speaker 3: flu in the other.
• 11:34
  Speaker 2: Is that the Are we gonna get one shot going forward?
• 11:36
  Speaker 9: Sam?
• 11:36
  Speaker 6: Would be good? Wouldn't it?
• 11:37
  Speaker 8: Would you not roll up your sleeves more.
• 11:41
  Speaker 6: Likely? If it was only one?
• 11:44
  Speaker 1: Oh yeah, for sure, I would be so much. Actually,
• 11:46
  Speaker 1: I'll tell you what. I walked into the.
• 11:47
  Speaker 3: CVS and my wife had made the appointment but didn't
• 11:51
  Speaker 3: tell me much about it. And they said, all right,
• 11:53
  Speaker 3: we're gonna do both arms, or do you want two
• 11:55
  Speaker 3: in the left and two in the or and two
• 11:57
  Speaker 3: in the right and I said, wait two, and I
• 12:00
  Speaker 3: seriously considered sneaking out because I'm terrified of needles. But
• 12:05
  Speaker 3: it didn't hurt yet.
• 12:06
  Speaker 8: No, But in one it just makes it easier o
• 12:08
  Speaker 8: people to make a decision, all.
• 12:10
  Speaker 2: Right, that they didn't even want to go there. I
• 12:12
  Speaker 2: want to talk about the newest thing in healthcare, which
• 12:15
  Speaker 2: are these weight loss drugs O zembic and all this
• 12:18
  Speaker 2: kind of suff even so excited about it. Now we're
• 12:21
  Speaker 2: not doing that. So and I know you guys at
• 12:24
  Speaker 2: Bloomberg Intelligence have done a ton of work on it.
• 12:26
  Speaker 2: Talk to us about this market, this, the opportunities, you know,
• 12:29
  Speaker 2: all that kind of stuff.
• 12:30
  Speaker 8: First of all, I don't know what you see, but
• 12:32
  Speaker 8: neither of these guys actually need them, right.
• 12:34
  Speaker 3: Yes, I need. I definitely need to lose twenty pounds
• 12:38
  Speaker 3: and they.
• 12:38
  Speaker 6: Can put it back on at Christmas.
• 12:39
  Speaker 3: Again, well that's my problem. And to get a little
• 12:43
  Speaker 3: more personal than I normally would, the doctor says, I'm
• 12:47
  Speaker 3: pre diabetic.
• 12:48
  Speaker 6: Oh so so that would be a good reason to
• 12:51
  Speaker 6: do it.
• 12:51
  Speaker 8: Yeah, to lose weight, whether you take the drug to
• 12:53
  Speaker 8: do it, or you do it because you've been running
• 12:56
  Speaker 8: a lot more et cetera, or.
• 12:58
  Speaker 6: A lot more.
• 12:59
  Speaker 2: These drugs have been around for a while for diabetes.
• 13:01
  Speaker 8: Right, yep, yeah, I think we're into the definitely into
• 13:04
  Speaker 8: the second decade. Because the first version, which was Victosa,
• 13:07
  Speaker 8: that came out that's years ago.
• 13:08
  Speaker 2: So why is this now become the topic for pretty
• 13:11
  Speaker 2: much every kitchen table about these getting these loss drugs?
• 13:15
  Speaker 8: Right at the beginning, you could tell with Victoza, which
• 13:17
  Speaker 8: is a low dose every day, So who's going to
• 13:20
  Speaker 8: want to take a drug every day that's less effective
• 13:22
  Speaker 8: than what we've got now, which is a higher dose
• 13:24
  Speaker 8: once weekly.
• 13:25
  Speaker 3: That's what changed, right, I mean a lot of people
• 13:27
  Speaker 3: take drugs every day?
• 13:28
  Speaker 8: No, no, no, but well you don't well yeah, no,
• 13:31
  Speaker 8: not that many. We're aiming for like fifty million people
• 13:34
  Speaker 8: to take these drugs. That's the sort of volume that
• 13:36
  Speaker 8: these companies are aiming at.
• 13:37
  Speaker 3: So now they have I actually had a friend I
• 13:40
  Speaker 3: had lunch with the other day. He didn't eat very much.
• 13:43
  Speaker 3: Who's doing the pill version? Ozembic is Novo Nordisks diabetes drug,
• 13:49
  Speaker 3: right we go? V is their weight loss drug.
• 13:54
  Speaker 8: Same active And then they have rebelsis yeah, which is.
• 13:58
  Speaker 3: The pill form and what does that not work quite
• 14:02
  Speaker 3: as well? And it's a higher dose.
• 14:04
  Speaker 6: And it's harder to make.
• 14:06
  Speaker 8: You have to have it with a certain window of
• 14:08
  Speaker 8: eating before eating, because otherwise, if you do it too late,
• 14:13
  Speaker 8: it interferes with this absorption. And also if you do
• 14:15
  Speaker 8: it too late, you've already eaten, right, right, So that
• 14:19
  Speaker 8: makes it a bit more complicated.
• 14:20
  Speaker 6: We go with you once a week, you know, we.
• 14:23
  Speaker 3: Can you inject yourself, right's easy to yourself? Easy?
• 14:27
  Speaker 9: All right?
• 14:27
  Speaker 8: Yeah?
• 14:27
  Speaker 7: Great?
• 14:28
  Speaker 2: But are we going to get to a point where
• 14:30
  Speaker 2: it's just you take a pill once a day, which
• 14:32
  Speaker 2: everybody does anyway, and then this market's can explode.
• 14:36
  Speaker 8: So we've got data, that's so there's a couple of
• 14:39
  Speaker 8: things we're waiting for. One is this weekend you're going
• 14:42
  Speaker 8: to get the detailed cardiovascular data from nover notice, okay,
• 14:46
  Speaker 8: and the critical element of that is how well did
• 14:49
  Speaker 8: it do in people over sixty five, because that's relevant
• 14:52
  Speaker 8: for medicare coverage, the people who really need it. How
• 14:56
  Speaker 8: much benefit do they get the oral drugs in the
• 14:59
  Speaker 8: next twelve once we get some meaningful data from Amgen
• 15:02
  Speaker 8: from a whole host of other companies, right, So that's
• 15:06
  Speaker 8: what we're looking for.
• 15:07
  Speaker 6: Do these drugs are they are the orals as.
• 15:10
  Speaker 8: Good are they only something that you add into the
• 15:13
  Speaker 8: treatment paradigm.
• 15:14
  Speaker 6: Saying Okay, you've lost your weight with the.
• 15:17
  Speaker 8: Injection over sixteen weeks. From now on, you go onto
• 15:20
  Speaker 8: the oral and maintain your weight.
• 15:22
  Speaker 3: Why why is this skin pop better than like could
• 15:26
  Speaker 3: they have a transdermal patch?
• 15:29
  Speaker 6: You know, but you don't need it.
• 15:31
  Speaker 8: Transdermal patch has got you know, would you wear one
• 15:33
  Speaker 8: for sixteen weeks if you're diabetic? I guess you would
• 15:36
  Speaker 8: think about that. But honestly, the amount of money that
• 15:38
  Speaker 8: has to be invented invested to do that. The injections
• 15:41
  Speaker 8: once a week very easily.
• 15:43
  Speaker 3: What do you think about? So you are running this
• 15:47
  Speaker 3: Bloomberg intelligence research in Europe, but really for the globe,
• 15:53
  Speaker 3: we've had companies that are worried about declining revenue. What
• 15:56
  Speaker 3: Walmart says people have a smaller basket, perhaps said they
• 16:00
  Speaker 3: seeing the data to convince them yet, but clearly, you
• 16:03
  Speaker 3: know we're going to buy fewer free doos if we're
• 16:05
  Speaker 3: all taking ozempic, is it going to affect loads of
• 16:09
  Speaker 3: different businesses?
• 16:11
  Speaker 8: Three percent of obese people at the moment globally are
• 16:14
  Speaker 8: taking these drugs, So if that was the driver of
• 16:17
  Speaker 8: their margins and that if they were the margin or
• 16:20
  Speaker 8: buyers of product, then we have a problem from twenty
• 16:23
  Speaker 8: thirty onwards, when they become cheaper, either generic or because
• 16:28
  Speaker 8: of the Inflation Reduction Act, that's when you might start
• 16:31
  Speaker 8: seeing people taking them much more commonly.
• 16:35
  Speaker 6: And the other thing is I still.
• 16:37
  Speaker 8: Want to see five or six years of safety data
• 16:40
  Speaker 8: for the bigo vy dose because it's two point five
• 16:44
  Speaker 8: times or five times higher than the diabetes dose, and
• 16:47
  Speaker 8: we don't know what the side effect is. But of
• 16:49
  Speaker 8: course Lily uses the same dose.
• 16:52
  Speaker 3: So interesting.
• 16:53
  Speaker 2: Now, you guys, I guess I should wait for you're
• 16:55
  Speaker 2: not doing anything. Nobody in this room's getting any of
• 16:57
  Speaker 2: these in these drugs. But I mean, you guys did
• 16:59
  Speaker 2: some work on this. I can't think the US market
• 17:02
  Speaker 2: is just prime market for these companies.
• 17:05
  Speaker 3: Is that where the I mean, all.
• 17:06
  Speaker 6: You have to do is walk outside. I know, all
• 17:08
  Speaker 6: you have to is walk outside.
• 17:09
  Speaker 8: Seventy billion is where our current model sits under global.
• 17:12
  Speaker 2: You think seventy billion annually in these types.
• 17:15
  Speaker 8: Of drug that's where we're at in terms of market size,
• 17:20
  Speaker 8: which obviously is about the same sort of revenue line.
• 17:24
  Speaker 8: I think average that this consensus has so I think
• 17:27
  Speaker 8: everybody's going after the same.
• 17:29
  Speaker 2: And how big is seventy billion in your world of pharmaceuticals.
• 17:32
  Speaker 8: Oh, that's a lot for a class a blockbuster for
• 17:35
  Speaker 8: a class of drugs.
• 17:36
  Speaker 6: No, we have actually seventy billion.
• 17:40
  Speaker 8: I think even in the immuno oncology world we're not
• 17:42
  Speaker 8: getting seventy billion.
• 17:43
  Speaker 6: Really, No, this is this is big.
• 17:46
  Speaker 9: This is big.
• 17:47
  Speaker 7: All right.
• 17:47
  Speaker 6: So everything about these drugs is.
• 17:49
  Speaker 3: Can you remember, I mean, you know, like, would statins
• 17:52
  Speaker 3: have been comparable when they first came out?
• 17:54
  Speaker 8: Yeah? Yeah, I mean you know, so statings when when
• 17:56
  Speaker 8: phiz's lipitour was around, that was the biggest drug, and
• 18:00
  Speaker 8: then the Yeah, then a Visa Humaira for rumas authritis
• 18:05
  Speaker 8: that became the biggest druggle only a couple of years ago.
• 18:08
  Speaker 8: And now currently it's an immuno on College of drug
• 18:11
  Speaker 8: ki Truda from from MRK. But these guys will probably
• 18:14
  Speaker 8: overtake that.
• 18:15
  Speaker 2: All right, Sam, thanks so much for joining us. Sam Fazzelli,
• 18:17
  Speaker 2: head of European Research. He's his pharmer analysts as well
• 18:19
  Speaker 2: during the day for Bloomberg Intelligence based in London, somewhere
• 18:23
  Speaker 2: in France too. I don't know what that's all about.
• 18:24
  Speaker 2: That's a scam, but he's in New York right here, So.
• 18:27
  Speaker 7: You're listening to the tape. Kent's are live program Bloomberg
• 18:30
  Speaker 7: Markets weekdays at ten am Eastern on Bloomberg Radio, the
• 18:34
  Speaker 7: tune in app, Bloomberg dot Com, and the Bloomberg Business App.
• 18:37
  Speaker 7: You can also listen live on Amazon Alexa from our
• 18:40
  Speaker 7: flagship New York station, Just say Alexa play Bloomberg eleven
• 18:44
  Speaker 7: thirty Matt.
• 18:46
  Speaker 2: Little Paul Sweeney live here in our Bloomberg Interactive Brokers studio,
• 18:49
  Speaker 2: streaming on YouTube as well. You know, Matt, after slinging
• 18:52
  Speaker 2: stocks on to institutional investors for thirty years, there's very rare,
• 18:56
  Speaker 2: is it when somebody walks in this studio and as
• 18:58
  Speaker 2: a money manager of any size, I don't know, I
• 19:00
  Speaker 2: haven't heard of. Well that just happened here, Matt Smith.
• 19:03
  Speaker 2: He's an investment director at Rouffer and I have no
• 19:06
  Speaker 2: idea what Ruffer is. So we're going to start right there. Matt,
• 19:09
  Speaker 2: thanks so much for joining because I know you're based
• 19:10
  Speaker 2: on London. You're joining us here in our New York studio.
• 19:13
  Speaker 3: Tell us about Ruffer? What do you guys do?
• 19:15
  Speaker 10: Thanks Paul, great to be here. So we are a
• 19:19
  Speaker 10: London based asset manager focused on absolute return. So we
• 19:22
  Speaker 10: have one main objective, which is to avoid losing money.
• 19:26
  Speaker 3: Like that.
• 19:26
  Speaker 10: That sounds pretty unimpressive or unambitious, but it's helped us
• 19:31
  Speaker 10: deliver positive returns in the dot com bust global financial crisis.
• 19:35
  Speaker 2: So you're more than like fifteen minutes old, right, you
• 19:37
  Speaker 2: guys have been around a while.
• 19:38
  Speaker 10: We have nineteen ninety four.
• 19:40
  Speaker 2: How come I've never heard yet?
• 19:42
  Speaker 10: So we only started marketing making ourselves available to US
• 19:45
  Speaker 10: clients at the beginning of last year.
• 19:47
  Speaker 3: H okay, all right, so absolute return?
• 19:49
  Speaker 7: Are you?
• 19:49
  Speaker 2: Are you long only long shorter? A hedge fund?
• 19:51
  Speaker 9: What's your structure?
• 19:52
  Speaker 10: We're a hedge fund and what we're focused on doing
• 19:55
  Speaker 10: is studying regimes, market regimes, inflation regimes, predicting them in advance.
• 20:02
  Speaker 2: So what's an example of that.
• 20:06
  Speaker 10: The change from ZUP, the exit from ZERP. Is it
• 20:09
  Speaker 10: going to stick with us higher rates or are we
• 20:12
  Speaker 10: going to get back to.
• 20:14
  Speaker 3: That's right, zero interest rate policy? Some some people say NERP.
• 20:19
  Speaker 10: I think Japanese is still in NERP negative interest rate policy.
• 20:23
  Speaker 3: But so right now we're shifting from ZERP back to
• 20:28
  Speaker 3: what normal or how does it look to you.
• 20:30
  Speaker 10: So we are of the firm belief that there has
• 20:34
  Speaker 10: been a regime change from an era of low inflation
• 20:38
  Speaker 10: and low interest rates to a new era of higher inflation,
• 20:42
  Speaker 10: more volatile inflation, and a structurally rising set of interest rates.
• 20:49
  Speaker 3: So that's interesting because I would have thought, maybe we're
• 20:52
  Speaker 3: in a new interest rate regime, call it back to
• 20:55
  Speaker 3: normal or higher for longer, or whatever you like, out
• 20:57
  Speaker 3: of zero. And as a result of that change, we
• 21:02
  Speaker 3: have the volatility in inflation. But it seems to a
• 21:07
  Speaker 3: lot of people that inflation really did turn out to
• 21:09
  Speaker 3: be transitory, just took a longer time than expected, and
• 21:12
  Speaker 3: now we're just going to get back to a normal
• 21:14
  Speaker 3: level of inflation, like we are getting back to a
• 21:16
  Speaker 3: normal level of rates.
• 21:17
  Speaker 10: I think the best way to characterize the change is
• 21:20
  Speaker 10: that we've moved from a ceiling of two percent inflation
• 21:23
  Speaker 10: to a floor of two percent inflation. That sounds like
• 21:27
  Speaker 10: not much, but that's a very dramatic shift.
• 21:29
  Speaker 7: Now.
• 21:30
  Speaker 3: That sounds uncool to me.
• 21:31
  Speaker 10: Actually, it makes life significantly more difficult for two people
• 21:36
  Speaker 10: in the economy, the US government and how they calibrate
• 21:40
  Speaker 10: fiscal spending and the FED. And we have one core
• 21:45
  Speaker 10: structural macro thesis that the FED is a paper tiger.
• 21:49
  Speaker 10: When they are faced with a slowdown in the economy
• 21:53
  Speaker 10: or a slow down in markets, they will cut hard,
• 21:57
  Speaker 10: just like they did in the mid mid sixties, cut excessively,
• 22:01
  Speaker 10: and they won't have dealt with inflation sufficiently before they
• 22:05
  Speaker 10: enter the easing cycle.
• 22:06
  Speaker 3: All right, So doesn't J Powell like explicitly say he
• 22:12
  Speaker 3: wants to avoid that? I mean, isn't the whole idea
• 22:15
  Speaker 3: of J. Powell was until I guess last week that
• 22:18
  Speaker 3: he wants to make sure he does not repeat the
• 22:22
  Speaker 3: burnsy and mistakes of that FED.
• 22:24
  Speaker 10: That is absolutely what he has to say in advance.
• 22:29
  Speaker 10: But not even Arthur Burns wanted to be Arthur Burns
• 22:32
  Speaker 10: in advice. Central Bank is honestly there. They're products of
• 22:36
  Speaker 10: their time, not not independent. Ultimately, the FED is responsible
• 22:41
  Speaker 10: to Congress, and if they are frustrating the will of
• 22:45
  Speaker 10: Congress by getting in the way of government spending or
• 22:48
  Speaker 10: strong economy, they'll just be uh, They'll just be sidelined.
• 22:52
  Speaker 2: So how has your investment focus or strategy at Rougher
• 22:59
  Speaker 2: changed in the last couple of years?
• 23:02
  Speaker 3: As we are now in a different.
• 23:03
  Speaker 10: World, So our view actually switched that the world was
• 23:09
  Speaker 10: from a deflationary world to a world that will end
• 23:11
  Speaker 10: in inflation in December eight. So we've been preparing and
• 23:15
  Speaker 10: thinking about this for some time. Clearly it's been accelerated
• 23:18
  Speaker 10: by COVID. What it means is that you have to
• 23:21
  Speaker 10: have a portfolio that is not reliant on bonds for protection. Structurally,
• 23:26
  Speaker 10: you have to be more dynamic and agile with your
• 23:29
  Speaker 10: asset allocation. So I put another way, the things that
• 23:32
  Speaker 10: worked best in the prior regime, long the thirty year
• 23:35
  Speaker 10: treasury and long the big tech stocks. Basically and crucially
• 23:40
  Speaker 10: a passive approach or a static asset allocation. That is,
• 23:45
  Speaker 10: through this new regime, the worst possible approach. We think
• 23:49
  Speaker 10: that doesn't mean it won't have good moments, and actually
• 23:52
  Speaker 10: we think right now is a good moment for the
• 23:54
  Speaker 10: thirty year treasury. But you've got to be a lot
• 23:58
  Speaker 10: more dynamic than.
• 24:00
  Speaker 2: What is your asset allocation today versus maybe what it
• 24:02
  Speaker 2: was a few years ago.
• 24:04
  Speaker 10: So we have a core structural allocation to thirty year tips,
• 24:08
  Speaker 10: the inflation link securities and the fifty year equivalent in
• 24:12
  Speaker 10: the UK to protect our clients against the risk of
• 24:17
  Speaker 10: inflation and roading away their capital. At the moment, we
• 24:22
  Speaker 10: are pretty concerned about the potential for a sharp sell off,
• 24:27
  Speaker 10: or put another way, for any market sell off to
• 24:30
  Speaker 10: be pretty self feeding, and so we have credit protection,
• 24:36
  Speaker 10: we have volatility protection through things like the Vicks.
• 24:40
  Speaker 3: By the way, when you say sell off, do you
• 24:41
  Speaker 3: mean in bonds or in stocks or like risk acids
• 24:44
  Speaker 3: in general? What are you thinking of?
• 24:46
  Speaker 10: Most likely a stock sell off. But the way that
• 24:49
  Speaker 10: the FED is implementing monetary policy this cycle means that
• 24:52
  Speaker 10: any ecty market sell off is probably a contagious event
• 24:57
  Speaker 10: into wider risk markets.
• 25:00
  Speaker 3: So we see a sell off in the S and P,
• 25:02
  Speaker 3: that means they're going to also sell what the like
• 25:05
  Speaker 3: Paul's going to sell his to your treasuries that he will.
• 25:09
  Speaker 10: Probably or wider asset managers will be like, okay, stocks
• 25:13
  Speaker 10: are going down, I'm going to be buying treasury bills
• 25:16
  Speaker 10: just to keep my risk at a low level. And
• 25:18
  Speaker 10: what that does is force money into the Feds are
• 25:21
  Speaker 10: our p facility denying it to the banking system, and
• 25:24
  Speaker 10: that that just makes the set up even more fragile,
• 25:27
  Speaker 10: just at the point where markets need liquidity.
• 25:30
  Speaker 2: All right, So what do you I'm trying to say, so,
• 25:34
  Speaker 2: what is kind of what have you added to your
• 25:36
  Speaker 2: portfolio in the last six months.
• 25:39
  Speaker 10: A couple of things. So we've started to go very
• 25:43
  Speaker 10: long off long duration bonds for the first time.
• 25:45
  Speaker 3: Treasury bonds or corporates or treasury.
• 25:47
  Speaker 10: Bonds, So we want to stay clear of corporate bonds.
• 25:51
  Speaker 10: In fact, really it sounds boring.
• 25:54
  Speaker 3: No, this is exciting. You're going longer by Disney.
• 25:59
  Speaker 10: Treasury is more volatile in the S and P at
• 26:01
  Speaker 10: the moment.
• 26:02
  Speaker 9: That's not good.
• 26:03
  Speaker 3: It's not good, but it's exciting.
• 26:05
  Speaker 9: Yesap boring if you're trading the don't forget.
• 26:08
  Speaker 10: We're in the business of trying to avoid losing money.
• 26:10
  Speaker 10: We're about preserving capital for our investors through time.
• 26:13
  Speaker 2: How did you just fill up on that? Twenty twenty two,
• 26:16
  Speaker 2: when equities were down big, fixed income was down big,
• 26:19
  Speaker 2: we were.
• 26:19
  Speaker 10: Up around six percent. We're not and that was thanks
• 26:23
  Speaker 10: mainly to our derivative positions. We've been worried about a
• 26:27
  Speaker 10: correlated sell off in equities and bonds for about a decade.
• 26:31
  Speaker 10: By that point, we finally finally sorts of preconditions line up,
• 26:35
  Speaker 10: so we were long of effectually short interest rates, short
• 26:40
  Speaker 10: of crowded stocks, in particular, that's something that's very vulnerable
• 26:44
  Speaker 10: if liquidity is coming out of the system. This year
• 26:47
  Speaker 10: has been a lot more difficult. We've been expecting yields
• 26:51
  Speaker 10: to start biting on stock markets a lot sooner than
• 26:56
  Speaker 10: they have. But we think we've reached a pretty critical
• 26:59
  Speaker 10: point where if yield start to go much higher than
• 27:02
  Speaker 10: five percent, that's going to be doing real damage too.
• 27:05
  Speaker 3: So you don't think we've seen a peak in yields.
• 27:07
  Speaker 3: You think that there could be a sell off even
• 27:10
  Speaker 3: at the long end of the curve that drives a
• 27:12
  Speaker 3: yields higher than five percent on tens, twenties, thirties.
• 27:15
  Speaker 10: I think what I'm saying is that if yields do
• 27:18
  Speaker 10: go through five percent, that will be dangerous for markets.
• 27:21
  Speaker 10: So from a portfolio perspective, you can be long of
• 27:24
  Speaker 10: the tenure the thirty year, provided you've got protection against
• 27:27
  Speaker 10: a risk asset sell off and construct a nice balanced
• 27:30
  Speaker 10: portfolio with those assets.
• 27:33
  Speaker 3: Cool.
• 27:34
  Speaker 2: I mean, I'm looking at your webs I had.
• 27:36
  Speaker 3: I want to sit I want to sit Matt down
• 27:38
  Speaker 3: with like Cam Harvey, yes, to debate inflation. So he's
• 27:41
  Speaker 3: a I would love to do that. He says, it's
• 27:45
  Speaker 3: whipped and he says, you know it's below two and
• 27:49
  Speaker 3: the Fed is just looking at the wrong data points
• 27:52
  Speaker 3: for example, to price housing inflation.
• 27:54
  Speaker 10: I mean, this is what gives you the opportunity in
• 27:56
  Speaker 10: investment terms. The market currently price is thirty inflation at
• 28:00
  Speaker 10: two two and a half percent, So that's the market
• 28:03
  Speaker 10: saying the Fed has got this, they have tightened and
• 28:08
  Speaker 10: crucially they can stay tight and that's that's what I
• 28:11
  Speaker 10: think is just not correct. So that gives you the
• 28:15
  Speaker 10: opportunity to buy buy inflation expectations at that price.
• 28:20
  Speaker 3: Do you think the Fed is going to cut the
• 28:22
  Speaker 3: minute we see in economic downturn and it's going to
• 28:24
  Speaker 3: go too far and inflation is going to come roaring back?
• 28:28
  Speaker 10: Absolutely?
• 28:28
  Speaker 2: All right, good stuff man, I'm glad you got it.
• 28:31
  Speaker 2: Matt Smith, Investment director Rougher in the City of London.
• 28:34
  Speaker 2: They're Edinburgh. There in Paris. Next time you're in York,
• 28:36
  Speaker 2: let us know. We'll get you back on.
• 28:37
  Speaker 9: We'll see about what I think they say.
• 28:39
  Speaker 3: Edinburgh, Edinburgh, Edinburgh, Edinburgh.
• 28:41
  Speaker 7: You're listening to the tape. Cat's are live program Bloomberg
• 28:45
  Speaker 7: Markets weekdays at ten am Eastern on Bloomberg Radio. The
• 28:48
  Speaker 7: tune in app Bloomberg dot Com and the Bloomberg Business App.
• 28:52
  Speaker 7: You can also listen live on Amazon Alexa from our
• 28:54
  Speaker 7: flagship New York station. Just say Alexa play Bloomberg eleven thirty.
• 29:00
  Speaker 3: Philip Richter here, president of Hollowbrook Wealth Management, who I
• 29:05
  Speaker 3: know from a car show that he puts on out
• 29:09
  Speaker 3: in Bedford, and I want to talk so with Philip
• 29:12
  Speaker 3: a little bit about the markets, but also a little
• 29:14
  Speaker 3: bit about cars and the collections, because.
• 29:18
  Speaker 2: I'd rather talk about like that again, the car market,
• 29:20
  Speaker 2: the art market because interest rates are higher, right, Yes,
• 29:23
  Speaker 2: it's not just you know, interest rates higher, bond prices
• 29:26
  Speaker 2: lower things. Other stuff goes lower, right, I mean it
• 29:29
  Speaker 2: impacts evaluations for everything, right.
• 29:31
  Speaker 3: I mean I don't know.
• 29:32
  Speaker 1: Well, let Philip, let's ask you what do higher interest
• 29:35
  Speaker 1: rates do to the collector car market.
• 29:36
  Speaker 9: So at Hollowbrook, we.
• 29:37
  Speaker 11: Work with a lot of art collectors and car collectors,
• 29:40
  Speaker 11: so we stay very close to this market. And what's
• 29:42
  Speaker 11: happening is this bifurcation you're reading about the art markets
• 29:45
  Speaker 11: down twenty four percent year to date. We've got this
• 29:48
  Speaker 11: unbelievable auction this evening Emily Fisher Landau's collection and beautiful
• 29:53
  Speaker 11: collection of art. These are roth Codes, the best wroth CODs,
• 29:57
  Speaker 11: you know, the best, the the best of the best,
• 30:02
  Speaker 11: the Jasper John's and so forth. These will sell for
• 30:05
  Speaker 11: big money, right, These These are not that lower tier
• 30:09
  Speaker 11: or mid tier art.
• 30:09
  Speaker 9: This is the best. It will not come to market again.
• 30:12
  Speaker 3: So when you say art market is down twenty four percent,
• 30:14
  Speaker 3: that doesn't include this kind of art.
• 30:16
  Speaker 11: I think it's by forgetting. And we're seeing the same
• 30:18
  Speaker 11: thing in the collector car world, right, the Gto that's
• 30:20
  Speaker 11: going to be auctioned in.
• 30:22
  Speaker 3: A few days at Sotheby's on Monday, babies, yep.
• 30:24
  Speaker 11: And then the big auction in Vegas that arms Southeby's having.
• 30:28
  Speaker 11: There are two Mercedes men clkgtrs being auctioned in Vegas.
• 30:32
  Speaker 11: You never see those cars come up for sale let
• 30:34
  Speaker 11: alone too. So these are the best, the best, and
• 30:37
  Speaker 11: whether the dows at thirty four thousand or five thousand,
• 30:40
  Speaker 11: there is a market for these cars because they will
• 30:42
  Speaker 11: not come back to auction in a long.
• 30:43
  Speaker 3: Time, all right. So interest rates have basically no effect
• 30:46
  Speaker 3: on you know, the Gto, which is by the way,
• 30:49
  Speaker 3: if you've seen Ferris Bueller's Day Off, ye, right, that's
• 30:52
  Speaker 3: the car I mean that wasn't a real one obviously
• 30:57
  Speaker 3: that they pushed out the back window of his dad's.
• 30:59
  Speaker 9: Garage, but was a California Spider.
• 31:01
  Speaker 3: Yeah. And at the time that was also one of
• 31:04
  Speaker 3: the most expensive cars ever sold. I think I remember
• 31:06
  Speaker 3: hearing when I was a kid that it was going
• 31:08
  Speaker 3: for like fourteen million dollars. Now we're expecting a price
• 31:13
  Speaker 3: of more than twice that from the Southebey's auction on Monday.
• 31:18
  Speaker 3: Doesn't matter when someone buys these cars, she or he
• 31:22
  Speaker 3: doesn't care if rates or zero or ten, right, Yeah.
• 31:25
  Speaker 11: Well I think it does matter. I mean, interest rates
• 31:27
  Speaker 11: affect everything. They affect equities, they affect real assets. I
• 31:31
  Speaker 11: think there's a lag effect, right, it takes time. We
• 31:34
  Speaker 11: had ten years of free money of QE and suddenly
• 31:38
  Speaker 11: we're in a different environment. We had cheap energy, we
• 31:40
  Speaker 11: didn't have geopolitical conflicts to speak of, you know, we
• 31:44
  Speaker 11: had globalization going gangbusters, and now suddenly we're in a
• 31:47
  Speaker 11: different world of a four and a half to five
• 31:49
  Speaker 11: percent ten uere. This takes time to meander through the system.
• 31:53
  Speaker 11: What I'm saying is the best of the best, a
• 31:55
  Speaker 11: gto or a calder that Emily Fisher Landau bought years ago.
• 32:00
  Speaker 11: Those are different.
• 32:01
  Speaker 3: That's a different ball, by the way, tell us about
• 32:04
  Speaker 3: the GTO. I mean, there's the one I mentioned in
• 32:07
  Speaker 3: the movie. There's that was.
• 32:09
  Speaker 9: A California Spider.
• 32:10
  Speaker 3: Actually I get okay, So I think also Nick Mason
• 32:13
  Speaker 3: has a GTO.
• 32:15
  Speaker 9: As a club.
• 32:15
  Speaker 3: Who's Nick Mason the drummer for Pink Floyd Thank He
• 32:19
  Speaker 3: also is a big car collector and has I think
• 32:21
  Speaker 3: a fund that people have invested in. Why is this for?
• 32:25
  Speaker 3: Why is Ferrari Gto?
• 32:27
  Speaker 8: Like?
• 32:27
  Speaker 3: Why is that the top? It's the single.
• 32:29
  Speaker 11: Most iconic car that Ferrari ever built. Most of them
• 32:33
  Speaker 11: were When did they built it in the early sixties,
• 32:36
  Speaker 11: sixty two, sixty three, sixty four time? And yeah, the
• 32:38
  Speaker 11: styling of it is just outrageous. When you see a GTO,
• 32:42
  Speaker 11: it doesn't look like any other car on the road,
• 32:44
  Speaker 11: or any other Ferrari for that matter. It's it's It's
• 32:49
  Speaker 11: folklore is growing by leaps and bounds every day with
• 32:52
  Speaker 11: Ferrari's popularity and Ferrari's mystique. The Ford Verse Ferrari movie,
• 32:57
  Speaker 11: The GTO is really the nucleus of what Enzo Ferrari
• 33:01
  Speaker 11: wanted to do, and the gto was unique because it
• 33:03
  Speaker 11: was a car you could drive to the track and
• 33:05
  Speaker 11: you could race and be competitive in the car, very competitive.
• 33:08
  Speaker 11: So it's a it's a you know, it's a it's
• 33:11
  Speaker 11: an incredibly unique asset. And this one that's for sale
• 33:15
  Speaker 11: at Sotheby's, I think it. The numbers are going to
• 33:18
  Speaker 11: be unbelievable.
• 33:20
  Speaker 3: Who's selling?
• 33:21
  Speaker 2: Do we know who owns it?
• 33:22
  Speaker 8: Now?
• 33:22
  Speaker 7: Yeah?
• 33:22
  Speaker 11: The owner is known. I think he's a gentleman from Ohio.
• 33:25
  Speaker 11: I read the article. I forget who at the great
• 33:27
  Speaker 11: state of Ohio.
• 33:29
  Speaker 9: I believe so somewhere in the Midwest.
• 33:30
  Speaker 2: So I went to the Concourse Dale Elegance, a pebble
• 33:33
  Speaker 2: beach for many, many many years. This past year, for example,
• 33:38
  Speaker 2: were the proceeds up or down? Or they don't care
• 33:40
  Speaker 2: as well?
• 33:41
  Speaker 9: So I will tell you I was there.
• 33:43
  Speaker 11: I spoke on a panel, and I spent the weekend
• 33:46
  Speaker 11: at in Monterey and I walked all the auction houses.
• 33:50
  Speaker 11: I went to Gooding, I went to RM and I
• 33:52
  Speaker 11: will tell you the quality of cars that are coming
• 33:55
  Speaker 11: on the market so high, the Gooding auction in particular,
• 33:59
  Speaker 11: I mean some vehicles they had there, things that haven't
• 34:01
  Speaker 11: been seen in years. And you wonder like, where have
• 34:04
  Speaker 11: all these cars been? Why are they coming out of
• 34:06
  Speaker 11: the woodwork?
• 34:06
  Speaker 7: Now?
• 34:06
  Speaker 11: They're coming out of the woodwork now because markets are high,
• 34:09
  Speaker 11: valuations are high. It's a global market now, uh And
• 34:13
  Speaker 11: and they can realize it is.
• 34:14
  Speaker 2: A global market because I mean, we live We lived
• 34:17
  Speaker 2: in Carmel for a long time, sleepy little town tourist talent.
• 34:21
  Speaker 2: But during the concourse it is like the United Nations.
• 34:23
  Speaker 2: I mean, people speaking every different language walking down.
• 34:26
  Speaker 3: Now do car collectors get the same kind of respect
• 34:29
  Speaker 3: that art collectors have? I always thought as a kid
• 34:30
  Speaker 3: it was crazy that somebody would pay more for a
• 34:34
  Speaker 3: picture of flowers that a guy named van Go painted,
• 34:37
  Speaker 3: then they would pay for a Ferrari, like you can't
• 34:40
  Speaker 3: drive a painting right.
• 34:41
  Speaker 11: Well, Matt, that's changing now, I think. I think collector
• 34:44
  Speaker 11: cars are becoming a legitimate asset class that people want
• 34:47
  Speaker 11: to own. You can enjoy them, you can share, for example,
• 34:50
  Speaker 11: the gto the celebrities and the level of people that
• 34:54
  Speaker 11: own GTOs. They get together socially and they do drives together,
• 34:59
  Speaker 11: and they're things worldwide. They ship the cars all over
• 35:01
  Speaker 11: the world and they drive through Venice or wherever that
• 35:03
  Speaker 11: you know. They go to cite, they do all of that.
• 35:07
  Speaker 11: So there's a social component to this that doesn't really
• 35:10
  Speaker 11: I think exists as much in the art world, although
• 35:12
  Speaker 11: it's obviously very social too. But I think the collectric
• 35:15
  Speaker 11: car world is moving up as an industry as a
• 35:18
  Speaker 11: legitimate acid category, and if the electric drive phenomenon accelerates
• 35:23
  Speaker 11: a lot of these cars, you know, these intricate, beautiful
• 35:27
  Speaker 11: V twelve handcrafted devices, that's not going to be being
• 35:30
  Speaker 11: made anymore. Right, We're gonna have We're gonna have electric appliance.
• 35:33
  Speaker 2: Do you think that day is gonna come?
• 35:34
  Speaker 9: I think we're a long way off.
• 35:36
  Speaker 11: I think their electric cars have a place in certain
• 35:38
  Speaker 11: applications in Florida.
• 35:40
  Speaker 9: Great, you know you've got clean power. Uh, and you've
• 35:43
  Speaker 9: got you've got to you know, good.
• 35:44
  Speaker 11: Temperatures, but long haul Northeast cold temperatures.
• 35:50
  Speaker 9: It's it's not a total second.
• 35:51
  Speaker 2: Are your Lamborghinis. I think they're not going to make
• 35:54
  Speaker 2: electric vehicles, are they?
• 35:55
  Speaker 3: They are going to make electric vehicles? Yeah, and that
• 35:59
  Speaker 3: like those cards.
• 36:00
  Speaker 1: It's the sound, yeah, Like it's not only a sound,
• 36:03
  Speaker 1: it's the vibrations, it's the smell.
• 36:05
  Speaker 3: And it's the hand build the engineering.
• 36:08
  Speaker 11: Yes, I mean a V twelve Ferrari motor is one
• 36:11
  Speaker 11: of the most beautiful things to behold if you're an
• 36:13
  Speaker 11: engineer and you like machinery. Incredible, incredible, miracle device under
• 36:18
  Speaker 11: the hood.
• 36:18
  Speaker 3: Are there more ways for investors to get into this
• 36:22
  Speaker 3: asset class other than going to a souther res auction
• 36:25
  Speaker 3: and buying you know, a gto or or ladies.
• 36:28
  Speaker 11: There's a lot of on ramps to the car world.
• 36:30
  Speaker 11: I mean, I was just gonna mention, bring a trailer
• 36:33
  Speaker 11: has really revolutionized the access to the market globally. So
• 36:37
  Speaker 11: there are some fantastic cars being sold on bring a
• 36:40
  Speaker 11: trailer at all budgets. So you can buy the single
• 36:43
  Speaker 11: best Volkswagen cabriolet in the world and wait on bring
• 36:46
  Speaker 11: a trailer and find it. Or you can buy a
• 36:48
  Speaker 11: Dusenberg on bring a trailer.
• 36:49
  Speaker 3: We have it. We only have a minute left field,
• 36:51
  Speaker 3: And I want you to tell us about the Turtle Invitational,
• 36:53
  Speaker 3: because I went to what I believe was the fourth
• 36:54
  Speaker 3: Yeah Invitation, that's the car show that he puts on
• 36:57
  Speaker 3: in Bedford. Tell us about it.
• 36:59
  Speaker 11: So the Turtle Invitational four is a biennial event. We
• 37:02
  Speaker 11: do it every other year. It benefits the Malcolm Prey
• 37:05
  Speaker 11: Achievement Center in Bedford, New York. Malcolm Pray was one
• 37:08
  Speaker 11: of the first Porscha Outy Volkswagen dealers in the United States.
• 37:11
  Speaker 11: In Greenwich. We do great things for kids there, teaching
• 37:14
  Speaker 11: them entrepreneurial pursuits and enlightening them to new pursuits. And
• 37:18
  Speaker 11: we decided I decided to have a really special collector
• 37:23
  Speaker 11: car show, collector car event that would honor Malcolm Pray's
• 37:27
  Speaker 11: legacy but also raise money for his charity and awareness.
• 37:30
  Speaker 9: When is it.
• 37:31
  Speaker 11: It's in September late September every other year, so we're
• 37:34
  Speaker 11: September twenty first, twenty twenty five, and you can go
• 37:37
  Speaker 11: to the website Turtleinvitational dot com.
• 37:39
  Speaker 9: There's more info there.
• 37:40
  Speaker 2: Okay, I know a couple of the Sweeney offspring that
• 37:42
  Speaker 2: would be interested in that. I got a couple of
• 37:44
  Speaker 2: car Yeah, he's very cool, my offspring. Yeah, that's what
• 37:46
  Speaker 2: happens when you spend a lot of time in Carmel, California.
• 37:48
  Speaker 2: Philip Richter, thank you so much for joining us. Philip Rictor,
• 37:50
  Speaker 2: he's a president hollow Brook Wealth Management, joining us live
• 37:53
  Speaker 2: here in our Bloomberg Interactive Broker Studio.
• 37:57
  Speaker 1: Thanks for listening to the Bloomberg Markets podcast. You can
• 38:00
  Speaker 1: subscribe and listen to interviews at Apple Podcasts or whatever
• 38:04
  Speaker 1: podcast platform you prefer. I'm Matt Miller. I'm on Twitter
• 38:08
  Speaker 1: at Matt Miller nineteen seventy three.
• 38:10
  Speaker 3: And I'm Fall Sweeney.
• 38:11
  Speaker 2: I'm on Twitter at pt Sweeney. Before the podcast, you
• 38:13
  Speaker 2: can always catch us worldwide at Bloomberg Radio