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Energy, Electric Vehicles, And The Economy (Podcast) · Bloomberg Intelligence

• 0:00
  Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
• 0:04
  Speaker 1: my co host Matt Miller. Every business day we bring
• 0:06
  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: on Apple Podcasts or wherever you listen to podcasts, and
• 0:18
  Speaker 1: at Bloomberg dot com slash podcast. Looking at w T
• 0:22
  Speaker 1: I crude oil up just slightly here, hundred ten dollars
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  Speaker 1: a barrel, certainly off the highs of north of one twenty,
• 0:28
  Speaker 1: but boy, it's still a hundred ten dollars a barrel.
• 0:31
  Speaker 1: That's pretty significant. And you know, people tell me the
• 0:33
  Speaker 1: reason that gas is still so high is there's just
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  Speaker 1: no refining capacity out there, which I just don't get.
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  Speaker 1: I mean, I think if I go down to the
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  Speaker 1: Gulf Coast, I can find some refineries, but they're telling
• 0:43
  Speaker 1: me that's not the case. But let's talk energy. Here.
• 0:45
  Speaker 1: Is that trade over Liz Young, head of Investment strategy.
• 0:48
  Speaker 1: It's so far joins this here, and Liz, you know,
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  Speaker 1: we're still paying near five dollars a gallon at the pump.
• 0:54
  Speaker 1: W t A crude still north of a hundred dollars
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  Speaker 1: a barrel. Is this energy trade for investors? Is that
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  Speaker 1: played out? We're off the highs, but boy, it's still
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  Speaker 1: stubbornly high here. How do you think about that? Yeah? Look,
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  Speaker 1: I mean we're offo highs, but given the elevated prices
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  Speaker 1: of oil, and I do think that oil stays elevated,
• 1:13
  Speaker 1: which helps energy company profit margins and helps their ability
• 1:18
  Speaker 1: to increase dividends and engage in stock buybacks that can
• 1:21
  Speaker 1: all be supportive of the stock price. What I'm warning
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  Speaker 1: people about right now is that I think we've made
• 1:27
  Speaker 1: a lot of money in this energy trade, and energy
• 1:30
  Speaker 1: is the only sector that's still positive. You're to date
• 1:33
  Speaker 1: three months and six months behind us, and if you're
• 1:37
  Speaker 1: looking at that as the last sector sort of the
• 1:39
  Speaker 1: last man standing in positive territory, the chances of it
• 1:43
  Speaker 1: seeing downside are just higher. And you want to be
• 1:47
  Speaker 1: able to position yourself for some price appreciation in sectors
• 1:51
  Speaker 1: that have really been beaten up. So it's okay to
• 1:54
  Speaker 1: take profits in some of these energy names and redeploy
• 1:57
  Speaker 1: that capital into sectors like finance, unchilds or even some
• 2:00
  Speaker 1: of the really beaten up consumer discretionary names or small
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  Speaker 1: cap names that have seen a lot of pain to
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  Speaker 1: valuations over the last few months. By the way, Liz,
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  Speaker 1: how do you UM talk to investors, especially younger investors,
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  Speaker 1: about making these moves? UM? Is it about individual names?
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  Speaker 1: Is it about indexes? Do you like ETFs? I mean,
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  Speaker 1: is there one strategy that you think works best for
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  Speaker 1: this new generation of investors. I do think that we
• 2:29
  Speaker 1: have to be more specific this year than just broad indexes.
• 2:33
  Speaker 1: I think that there's been a lot of pain that's
• 2:36
  Speaker 1: felt on a broad index level, and you want to
• 2:38
  Speaker 1: be specific about sectors or industry groups that you see
• 2:42
  Speaker 1: as themes that could work going forward, let's say the
• 2:45
  Speaker 1: next two to five years. But individual names are good
• 2:48
  Speaker 1: in that too, And unfortunately I can't speak about individual
• 2:51
  Speaker 1: names in particular, but it's okay to choose individual names
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  Speaker 1: that you think are well established or top of their game,
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  Speaker 1: best in class in their sector, industry group, because I
• 3:03
  Speaker 1: think that fundamentals in an environment like this are going
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  Speaker 1: to reign supreme, and you want to have sectors, industry
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  Speaker 1: groups and companies that can survive not only pricing pressure,
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  Speaker 1: but can finance their own growth and can survive through
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  Speaker 1: a cycle that's going to be really painful and really
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  Speaker 1: challenging for a lot of companies as their profit margins
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  Speaker 1: get hit. I'm just thinking of, uh, you know, when
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  Speaker 1: I think of Sophie, I think of uh, younger maybe
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  Speaker 1: family starting up that has a few thousand dollars a
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  Speaker 1: month to put away. I don't know what you would
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  Speaker 1: call a yuppie today, but you know, people my age
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  Speaker 1: remember what yuppies are. Yeah, something I don't know, but
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  Speaker 1: you know, does it make sense to try and pick
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  Speaker 1: individual names? You're gonna hold these those people probably into
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  Speaker 1: retirement or um. We keep seeing these themed e t
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  Speaker 1: F pop up, and I don't know if they're just
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  Speaker 1: a fad or if they're a good way to get into, uh,
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  Speaker 1: you know, a certain idea or a certain segment. Yeah.
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  Speaker 1: I mean some of the themed es t F s
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  Speaker 1: or or other types of e t F that I
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  Speaker 1: would consider more like active beta exposure are a good
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  Speaker 1: way to have a specific exposure to a certain theme
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  Speaker 1: or a certain idea that you have without taking on
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  Speaker 1: you know, the entire industry, are taking on the entire sector.
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  Speaker 1: And I think that those are good ideas, keeping in
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  Speaker 1: mind that they're probably going to carry a little higher
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  Speaker 1: fee than just a broad based index E t F,
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  Speaker 1: but there's still a lower fee than a lot of
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  Speaker 1: mutual funds out there, So you're looking at kind of
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  Speaker 1: that middle ground where you can be more specific about
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  Speaker 1: the investment. Now to your question about younger investors or
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  Speaker 1: maybe people that have smaller balances in accounts and don't
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  Speaker 1: want to spend all of that balance on one or
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  Speaker 1: two names, E t F s are a much easier
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  Speaker 1: way to get a diversified basket of securities. Also, platforms
• 4:51
  Speaker 1: like so FI, we do offer fractional shares, so you
• 4:53
  Speaker 1: can look for opportunities like that where you don't have
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  Speaker 1: to buy an entire share of something, especially in those
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  Speaker 1: names that cost thousands of dollars per share, so you
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  Speaker 1: can buy fractional units and still diversify your portfolio by
• 5:06
  Speaker 1: using individual names. So, liz on on the so FI platform,
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  Speaker 1: what are you guys seeing in terms of fund flows?
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  Speaker 1: Where are the funds going these days? Because there's so
• 5:16
  Speaker 1: many different narratives out there the fund, the FED will
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  Speaker 1: be successful, the FED won't be successful, push us into recession.
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  Speaker 1: Lots of different theories out there. Yeah, I mean, not surprisingly,
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  Speaker 1: we've seen outflows in risk assets and when I talk
• 5:30
  Speaker 1: about risk assets and thinking some technology, even crypto. You've
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  Speaker 1: seen investors just really dial back their risk appetite this year,
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  Speaker 1: but I think a lot of people have still held strong,
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  Speaker 1: and our user base does skew. Younger people believe in technology,
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  Speaker 1: and they believe in communications as still the way of
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  Speaker 1: the future, and there's a decent amount of activity in
• 5:52
  Speaker 1: all of those factors. So I think as long term
• 5:54
  Speaker 1: investors we have to remember that. The other thing is
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  Speaker 1: when you look at defensive sectors or been in paying sectors,
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  Speaker 1: those are not usually sectors that are really popular with
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  Speaker 1: a younger crowd. But that's something that I would remind
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  Speaker 1: younger investors are still important to balance out the portfolio
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  Speaker 1: with and to make sure that you're not overly exposed
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  Speaker 1: to some of these areas that are going to have
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  Speaker 1: a lot more pain because of rate hikes. Yeah. Well,
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  Speaker 1: it seems like the destruction that we've seen already in
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  Speaker 1: terms of wealth has eclipsed what we saw during the
• 6:23
  Speaker 1: Great Financial Crisis, even though I don't feel the same anxiety,
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  Speaker 1: not even close to what we felt then. And and
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  Speaker 1: the reason is um as far as I can tell
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  Speaker 1: back then, what you lost in equities, those losses were
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  Speaker 1: buffered by your bond holdings, and today they're both going down. Um,
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  Speaker 1: can you hide in those defensive names? Is there someplace
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  Speaker 1: else you want to put your money? Are you seeing
• 6:47
  Speaker 1: clients just hold cash? Yeah? I mean, look, there's there's been,
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  Speaker 1: unfortunately really nowhere to hide recently, and I think a
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  Speaker 1: lot of the defensive sectors have been bid up to
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  Speaker 1: a point that they're pretty expensive right now. It is
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  Speaker 1: not a mistake to hold some extra cash while you're
• 7:05
  Speaker 1: waiting out the volatility, or while you're just systematically putting
• 7:09
  Speaker 1: money into the market. Right you can put it in
• 7:11
  Speaker 1: in little drips, you can do dollar cost averaging. It's
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  Speaker 1: okay to have a higher than usual percentage of cash
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  Speaker 1: right now while we get through some of this really
• 7:20
  Speaker 1: tough part. I'd also say bonds have definitely corrected quite
• 7:24
  Speaker 1: a bit over the course of this year. But if
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  Speaker 1: recession fears continue to rise, and if growth continues to slow,
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  Speaker 1: I think there's a good possibility that we see a
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  Speaker 1: rally in something like the tenure treasury and we see
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  Speaker 1: some of those yields come back in a little bit.
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  Speaker 1: So I think in the second half of the year
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  Speaker 1: there's a possibility that bond do actually protect in times
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  Speaker 1: of stock market pullback. Hey, Liz, thanks so much for
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  Speaker 1: joining us. We always appreciate getting your perspectives there. Lizzie Young,
• 7:52
  Speaker 1: head of investment strategy at so Far. Joshua see Oh
• 8:00
  Speaker 1: of spark Charge uh joins us here, josh I drove
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  Speaker 1: my first electric vehicle a couple of weeks ago for
• 8:07
  Speaker 1: Deflon fifty Lightning and it was awesome. Now, fortunately I
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  Speaker 1: have a charging station near my house which fires it
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  Speaker 1: up really quickly. But at the country club, at the
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  Speaker 1: country club, it worked out great. I didn't know it
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  Speaker 1: was a thing until I actually had this truck. Talk
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  Speaker 1: to us about the state of the charging system in
• 8:27
  Speaker 1: the United States today and how you think it's gonna
• 8:30
  Speaker 1: evolve is there's more and more auto manufacturers are are
• 8:32
  Speaker 1: really getting into the evy business. Absolutely, and once again
• 8:37
  Speaker 1: thank you for having me having me on. Super excited
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  Speaker 1: to talk about the ev industry. When we think about
• 8:42
  Speaker 1: the electricical industry today, right, you know, we're starting to
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  Speaker 1: see more and more electric vehicles hitting the road. We're
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  Speaker 1: starting to see, you know, a ton of new makes
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  Speaker 1: and models from different automakers constantly getting announced, right, And
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  Speaker 1: I think that's an amazing, you know, progressive statement for
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  Speaker 1: where the EV industry is going and where it's been.
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  Speaker 1: But there's still a lot of issues around e V charging. Right,
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  Speaker 1: So typically when we think about EV charging, we often assume,
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  Speaker 1: you know, hey, a pole in the ground goes in here,
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  Speaker 1: someone shows up and they you know, they plug in
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  Speaker 1: their car. But that's really not the case in a
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  Speaker 1: lot of cities, right There's a lot of gaps in charging.
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  Speaker 1: There's a lot of infrastructure problems that come with charging.
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  Speaker 1: UM and at spart Charge, you know, we announced currently
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  Speaker 1: are mobile on demand charging apps where an EV owner
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  Speaker 1: could get rains delivered with the push of a button,
• 9:33
  Speaker 1: and we started to see the closing of a lot
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  Speaker 1: of those gaps where EV owners no longer have to
• 9:37
  Speaker 1: worry about finding sitting and waiting at an evy charging.
• 9:41
  Speaker 1: That is unbelieved. I've never even heard about this now.
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  Speaker 1: I know you were on the Shark tank UM recently
• 9:47
  Speaker 1: and got a million dollar investment from Mark Cuban and
• 9:50
  Speaker 1: Lorie Griner. But so the idea is, if I'm parked
• 9:55
  Speaker 1: right here outside one Lexington Avenue in New York City
• 9:59
  Speaker 1: and I'm what a member of your service, I can
• 10:02
  Speaker 1: have you just come over here and charge my car
• 10:04
  Speaker 1: while I'm at work. Absolutely, it says easy. You know,
• 10:08
  Speaker 1: we we like to joke around, but our goal was
• 10:11
  Speaker 1: to make easy charging as simple as ordering a pizza. Right. So,
• 10:15
  Speaker 1: the same way that you can get groceries and food
• 10:18
  Speaker 1: delivered to you just where you're located, you can now
• 10:20
  Speaker 1: have charging delivered to your car. So you can be
• 10:23
  Speaker 1: at work, you can be at home, you can be
• 10:25
  Speaker 1: out on the go, you can be eating at a restaurant.
• 10:28
  Speaker 1: And if you want to have your car charged right
• 10:30
  Speaker 1: there on the spot, Um, it can be brought to
• 10:32
  Speaker 1: you and charged your car, and your car can be charged.
• 10:35
  Speaker 1: That is awesome. So what's the what's the pricing? Look
• 10:39
  Speaker 1: like I'll just for comparisons, say that we have my
• 10:41
  Speaker 1: garage across the street here on fifty eight Street. They
• 10:44
  Speaker 1: charge me twenty dollars if I want to plug in
• 10:46
  Speaker 1: the car. Really, yeah, that's a scam. Wow, that's that's
• 10:49
  Speaker 1: a lot. But um yeah, I mean our pricing in
• 10:53
  Speaker 1: some cases is a lot cheaper than going to a
• 10:55
  Speaker 1: six infrastructure charging station. So you know, our pricing thinks
• 11:00
  Speaker 1: with like our you know Explorer plan is only about
• 11:02
  Speaker 1: fifty sets kill a lott hour. UM, so during peak
• 11:06
  Speaker 1: times you're actually saving money using our service. You know.
• 11:10
  Speaker 1: I see one of your investors is Kyrie Irving in
• 11:13
  Speaker 1: sports Fans net Fans, and though that he opted into
• 11:15
  Speaker 1: his contract yesterday, so he'll be set for another thirty
• 11:18
  Speaker 1: six point five million dollars. So if you need some
• 11:20
  Speaker 1: extra working capital, I suggest you maybe you call Mr
• 11:23
  Speaker 1: Irving here talk to us about the kind of the
• 11:25
  Speaker 1: growth now you're expecting here, Josh, because again, if if
• 11:29
  Speaker 1: Luddites like me start getting into the EV market, this
• 11:33
  Speaker 1: thing is just going to explode, and I would think
• 11:36
  Speaker 1: your business would be in a pretty good position there. Absolutely,
• 11:40
  Speaker 1: So when you think about the growth, I mean it's
• 11:42
  Speaker 1: really been unprecedented. EV owners want the convenience of having
• 11:46
  Speaker 1: the charge delivered to them, not having to go, you know,
• 11:49
  Speaker 1: find sit and wait for it. UM. When we first
• 11:51
  Speaker 1: started out, I think, you know, our goals are investors,
• 11:54
  Speaker 1: was hey, can we deliver you know, ten thousand miles
• 11:57
  Speaker 1: here up in the first couple of months, and we
• 11:59
  Speaker 1: have met imediately blew right past that goal. Right. We
• 12:02
  Speaker 1: delivered over a hundred miles e V owners within the
• 12:05
  Speaker 1: first couple of months, and this year alone, we're on
• 12:08
  Speaker 1: track to deliver over a million miles the e V owners.
• 12:11
  Speaker 1: And when you think about you know that that stat
• 12:13
  Speaker 1: in itself is something truly amazing, right, miles of range delivered, right,
• 12:18
  Speaker 1: And that's something that we take a lot of pride
• 12:20
  Speaker 1: and it's our guiding light. And when you think about
• 12:23
  Speaker 1: the scale of you know, where we started. When we
• 12:25
  Speaker 1: first started, we were just you know, l A, San Francisco, Dallas, Texas.
• 12:30
  Speaker 1: We've now expanded in San Jose, Oakland, Berkeley, Fremont, Um,
• 12:35
  Speaker 1: We've now expanded into Long Beach, Anaheim, Orange County, and
• 12:39
  Speaker 1: we're gonna be opening up here San Diego and Boston
• 12:42
  Speaker 1: the next couple of months. But when we think about
• 12:44
  Speaker 1: the scale of the service, we're planning the scale into
• 12:48
  Speaker 1: over twenty cities here over the next couple of months,
• 12:51
  Speaker 1: which is truly amazing. Josh, I want to just ask
• 12:53
  Speaker 1: about the possibility of an exit UM Mark Cuban's not
• 12:56
  Speaker 1: going to throw in a million dollars until he knows,
• 12:59
  Speaker 1: you know, what the idea about how you make money.
• 13:02
  Speaker 1: On the other end, what are you thinking about in
• 13:04
  Speaker 1: terms of UM the possibility of an I p O
• 13:08
  Speaker 1: of a sale, are you just looking to generate a
• 13:10
  Speaker 1: ton of free cash flow. How does it look? Yes,
• 13:14
  Speaker 1: I mean when you think about it, it's the really
• 13:15
  Speaker 1: cool part about this, right is the fact that you know,
• 13:19
  Speaker 1: we are actually growing faster than traditional pull based infrastructure.
• 13:24
  Speaker 1: So we can be up and running in a city
• 13:26
  Speaker 1: is in under fourteen days, where traditional pull based infrastructure
• 13:30
  Speaker 1: takes anywhere from six months to two years, right, And
• 13:33
  Speaker 1: we can blanket an entire city and then be generating
• 13:36
  Speaker 1: revenue right and under fourteen days in the city. So
• 13:40
  Speaker 1: when we think about, you know, the chances of you know,
• 13:42
  Speaker 1: us going public idea, and I think we're outperforming at
• 13:46
  Speaker 1: an early stage a lot of these companies that have
• 13:48
  Speaker 1: gone public vias facts of done public traditional routes were
• 13:52
  Speaker 1: actually outperforming them from a revenue standpoint because we're able
• 13:56
  Speaker 1: to be everywhere and grow faster. All right, you look
• 13:59
  Speaker 1: at the market took a lot of these infrastructure company,
• 14:02
  Speaker 1: you know, five years. All right, Josh, we're gonna have
• 14:04
  Speaker 1: to let leave it there, because we're gonna go. We
• 14:06
  Speaker 1: have a hard start. For our next interview, Josh Vi,
• 14:08
  Speaker 1: CEO and founder of Spark Charge, we welcome our television
• 14:14
  Speaker 1: viewers and our radio listeners joining us now live from
• 14:17
  Speaker 1: the NASDAG. It's Thomas Ingle Lad poll Stars CEO Wood,
• 14:21
  Speaker 1: joined also by my good friend and colleague Good Looks
• 14:24
  Speaker 1: Matt Miller. Thomas, you have taken the company public. You
• 14:28
  Speaker 1: are now a public organization, a public company. You did
• 14:31
  Speaker 1: that buy a a spack at the back end of
• 14:33
  Speaker 1: last week Friday. It's an interesting time to be making
• 14:37
  Speaker 1: such a transaction. Generally, EVI spank combinations, Thomas have not
• 14:42
  Speaker 1: gone well over the last couple of years. Why is
• 14:45
  Speaker 1: poll Star and It's deal going to be different? Well,
• 14:52
  Speaker 1: we finished successfully our listening together with our partner and
• 14:57
  Speaker 1: go Scoopenheim, and I think us being a real company,
• 15:01
  Speaker 1: delivering already for two years to satisfied, happy customers, and
• 15:06
  Speaker 1: having a real business going on with a product portfolio
• 15:10
  Speaker 1: ready developed ruling out now, I think that made the difference.
• 15:14
  Speaker 1: Talk to us about your portfolio. I've riven the poll
• 15:17
  Speaker 1: Star one, which was an extraordinarily exciting vehicle but also
• 15:22
  Speaker 1: um very expensive and very limited. You've got the two,
• 15:26
  Speaker 1: and you've just introduced the three. What are you expecting
• 15:30
  Speaker 1: in terms of a fleet? Yeah, well this is now
• 15:35
  Speaker 1: the new chapter opening with three cars that are rolling
• 15:39
  Speaker 1: out in the next three years. The first will be
• 15:41
  Speaker 1: the suv Post of three as well produced in the US.
• 15:45
  Speaker 1: We have a second suv coming in the year twenty three,
• 15:49
  Speaker 1: and then the beautiful precept concept CARB becoming reality and
• 15:54
  Speaker 1: form of the Post of five g T four door
• 15:56
  Speaker 1: that we have actually just driven up the hill and
• 16:00
  Speaker 1: and Goodwood and showed the the real far advanced stage
• 16:04
  Speaker 1: of the prototype there in the public in Goodwood. And yes, guy,
• 16:08
  Speaker 1: have you been to Goodwood? He's talking about the Festival
• 16:11
  Speaker 1: of Speed which is just finished. Over the weekend. I saw,
• 16:13
  Speaker 1: like I lived fairly close to Goodwood, so I saw
• 16:16
  Speaker 1: plenty of cars going up the hill um away from
• 16:19
  Speaker 1: me towards Goodwood. No, it's it's an interesting little hill climb. Mat.
• 16:23
  Speaker 1: It's a lovely weekend. The weather this weekend was pretty nice.
• 16:26
  Speaker 1: It is hugely important in the car world. But what's
• 16:30
  Speaker 1: even more important than that in the car wheel right now, Thomas,
• 16:34
  Speaker 1: is chips and supply chain. Um, you talked about the
• 16:37
  Speaker 1: fact that you're producing in the US as well as
• 16:40
  Speaker 1: I assume in Goldenburg in Sweden. Um, what does your
• 16:43
  Speaker 1: supply chain look like? What's the strength, what's the solidity
• 16:46
  Speaker 1: of that so you're not talking about fishness ships but
• 16:49
  Speaker 1: the other chips. Yes, yeah, no, um yeah, of course
• 16:52
  Speaker 1: pick topic. And it has been into twenty one already.
• 16:55
  Speaker 1: We had made that journey, was very very short visibility
• 17:01
  Speaker 1: on our production planning, but of course we're trained. By
• 17:06
  Speaker 1: now twenty one and twenty two we successfully have managed
• 17:12
  Speaker 1: to get our cars out of the factories. And now,
• 17:16
  Speaker 1: of course always the question about COVID nineteen lockdowns. Of
• 17:20
  Speaker 1: course this will be still even in the year twenty three,
• 17:23
  Speaker 1: one of the topics that will be around in terms
• 17:28
  Speaker 1: of where the business goes. You've got one, two, three,
• 17:31
  Speaker 1: As you say, you're going to be expanding the fleet
• 17:33
  Speaker 1: even further than that. Who who is your target here?
• 17:37
  Speaker 1: It was interesting we were we were hearing from Elon
• 17:39
  Speaker 1: Musk a few days ago in Dohar, and he talked
• 17:42
  Speaker 1: about the supply chain being the opposition rather than other
• 17:45
  Speaker 1: car companies. Do you see it the same way? And
• 17:48
  Speaker 1: if you don't, who are you going to take market
• 17:50
  Speaker 1: share away from? Who's the target here? I think that
• 17:54
  Speaker 1: might be a slight different game. Ellen and the millions
• 17:57
  Speaker 1: of cars that he has on his again, we are
• 18:01
  Speaker 1: obviously positioned in a very different segment. We are aiming
• 18:04
  Speaker 1: for the luxury premium segment and clearly wanna target that
• 18:10
  Speaker 1: market high profit margins and the volume for that reason
• 18:15
  Speaker 1: um being rather clearly defined by this target group. So
• 18:21
  Speaker 1: two D ninety southern cast we are aiming for in
• 18:24
  Speaker 1: the year two thousand twenty five. And of course that
• 18:28
  Speaker 1: that is a dimension where we have already secured the
• 18:33
  Speaker 1: production in the factories and where they're purchasing for all
• 18:37
  Speaker 1: our parts has happened already. Do you, um, do you
• 18:42
  Speaker 1: have any influence on the charging infrastructure, because that's one
• 18:45
  Speaker 1: of the biggest problems for me when it comes to
• 18:48
  Speaker 1: electric cars. There just aren't enough chargers around the corner
• 18:51
  Speaker 1: from my house. There are like six gas stations, none
• 18:54
  Speaker 1: of them are for electric charging, and I have no
• 18:56
  Speaker 1: idea where I would go if I needed some. Well,
• 18:59
  Speaker 1: let's um indeed a very very important factor in it.
• 19:04
  Speaker 1: We have a very strong momentum in electrification double this
• 19:07
  Speaker 1: year from last year, and indeed the charging infrastructure has
• 19:12
  Speaker 1: to develop along the line, because otherwise it would be
• 19:14
  Speaker 1: a big threat to that movement. Now, one thing is
• 19:19
  Speaker 1: the charges that you find right next to you. The
• 19:21
  Speaker 1: other question is where your charge when you're on your
• 19:24
  Speaker 1: trip Electrify America. Our important partner here is obviously developing
• 19:30
  Speaker 1: and investing lots of money into developing this infrastructure. Same
• 19:35
  Speaker 1: goes goes for Europe. That is a big momentum, but
• 19:38
  Speaker 1: indeed is it enough for the big movement that we
• 19:40
  Speaker 1: have towards e V Still, Thomas just want to ask
• 19:43
  Speaker 1: about dealerships. Am I going to only be able to
• 19:45
  Speaker 1: get your cars through Volvo Dealership your former parent company?
• 19:48
  Speaker 1: Are you gonna be working with Jeelie to put up
• 19:50
  Speaker 1: your own dealerships? How's that gonna work? We worked together
• 19:54
  Speaker 1: with Volvo dealers to actually build up and set up
• 19:58
  Speaker 1: new post what Pig called spaces where you physically go
• 20:01
  Speaker 1: for the test WEP and beat the brand. This we
• 20:04
  Speaker 1: have already done in the US and big times last year.
• 20:08
  Speaker 1: It will continue this year. We have a very branded
• 20:13
  Speaker 1: experience for our customers far away from the Volvo dealership. Thomas,
• 20:20
  Speaker 1: I'll see you the Festival of Speed next year. A
• 20:23
  Speaker 1: quiet run up the hell at the Festival of Speed
• 20:25
  Speaker 1: as opposed to the noisy ones that we've had in history. Thomas,
• 20:29
  Speaker 1: thank you very much. Indeed, to think of that postar
• 20:31
  Speaker 1: CEO and of course, my good friend and colleague this
• 20:35
  Speaker 1: see you there. There's been a lot of finger pointing
• 20:43
  Speaker 1: ever since this inflation started to take off, right. We've
• 20:45
  Speaker 1: heard President Biden numerous times putting all the blame on
• 20:49
  Speaker 1: Vladimir Putin. Of course, if you watch the conservative news channels,
• 20:54
  Speaker 1: they put all the blame squarely on President Biden and um.
• 20:58
  Speaker 1: In the market, people look at low rates as or
• 21:02
  Speaker 1: or the big fiscal spend as one of the reasons.
• 21:05
  Speaker 1: Vince Signarella put out a story yesterday the Fed's balance
• 21:08
  Speaker 1: sheet caused inflation, not low interest rates, and Barry Ridholtz
• 21:14
  Speaker 1: wrote a piece today the fifteen causes of inflation. So
• 21:16
  Speaker 1: let's get them together. Let's get them together. Right now,
• 21:19
  Speaker 1: we have Barry Ridholts in the Bloomberg Interactive Broker studio
• 21:22
  Speaker 1: and Vince Signarella on the phone from somewhere. He's never
• 21:26
  Speaker 1: coming back, never ever. I guess I wouldn't either if
• 21:29
  Speaker 1: I had his job. Vince, let me give you the
• 21:31
  Speaker 1: honors you kick it off, because I thought your piece
• 21:34
  Speaker 1: was fascinating Reddit last night before bed, since I go
• 21:37
  Speaker 1: to bed at six pm. Um, but it's it's pretty
• 21:41
  Speaker 1: scary to think about how the feed is going to
• 21:43
  Speaker 1: unload this right now, eight point six trillion dollar balance sheet. Yeah,
• 21:49
  Speaker 1: and that's the point of the story, to be honest,
• 21:51
  Speaker 1: was basically the Set is changing the price of money
• 21:54
  Speaker 1: by raising interest rates. They're not really reducing stimulus. The
• 21:58
  Speaker 1: stimulus is the balance sheet. As you mentioned, eight point
• 22:01
  Speaker 1: six trillions, that that money is still slashing around. It's
• 22:04
  Speaker 1: been slashing around while fiscal policy put in how many
• 22:08
  Speaker 1: trillions of dollars for the pandemic. So the Fed is
• 22:12
  Speaker 1: trying to curb demand by raising interest rates and all
• 22:15
  Speaker 1: they're doing is creating confidence. As as Green Jared mentioned earlier,
• 22:19
  Speaker 1: the expectation part of that conference board index dropped to
• 22:22
  Speaker 1: sixty six and a half with down ten almost ten
• 22:24
  Speaker 1: points below estimates. So what the Fed really should be
• 22:28
  Speaker 1: doing right now is reducing the balance sheet, leaving interest
• 22:32
  Speaker 1: rates alone. Let the market set the interest rates, not
• 22:35
  Speaker 1: the Fed. It's not their job to tell the market
• 22:37
  Speaker 1: where in trist rates are. It's their job to deal
• 22:39
  Speaker 1: with supply and demand of money supply and if they
• 22:43
  Speaker 1: did that, they would very slowly bring down demand for
• 22:46
  Speaker 1: the consumer, and when the supply and balance retreated, we
• 22:50
  Speaker 1: would have the equilibrium again and inflation issue would not
• 22:53
  Speaker 1: be a question. We would have maybe modest inflation, but
• 22:56
  Speaker 1: we would be going along with positive growth. I think
• 22:59
  Speaker 1: they're making a tragic or by what see you? So
• 23:03
  Speaker 1: everybody hates this answer, which is the world is complicated,
• 23:07
  Speaker 1: there is no one single cause of these big complex issues,
• 23:12
  Speaker 1: lots of nuance and shades of gray um. You know,
• 23:16
  Speaker 1: on the one hand, the worst answer, Yeah, peo, people
• 23:20
  Speaker 1: hate that, but you know what, it's the reality. Look,
• 23:23
  Speaker 1: we we've had a rising FED balance sheet and zero
• 23:27
  Speaker 1: interest rate policy and quantitative easing from two thousand nine
• 23:30
  Speaker 1: to Inflation was very subdued during that period, COVID lockdown,
• 23:37
  Speaker 1: massive fiscal stimulus, not one, not to but three CARES
• 23:41
  Speaker 1: acts that added up to five trillion dollars. You know,
• 23:44
  Speaker 1: when the first Cares Act was passed in it was
• 23:49
  Speaker 1: ten of g d P. Was the biggest ever fiscal
• 23:51
  Speaker 1: stimulus in American history. And then at the same time
• 23:56
  Speaker 1: you have, you know, a very fragile supply chain just
• 23:59
  Speaker 1: in times livery was was really a problem. I don't
• 24:03
  Speaker 1: want to suggest that the Fed is not relevant here,
• 24:07
  Speaker 1: Clearly there a factor in this, but you know, when
• 24:10
  Speaker 1: you look at the fiscal stimulus June one, unemployment insurance
• 24:15
  Speaker 1: paid one point for trillion dollars. You put that much
• 24:19
  Speaker 1: cash in the hands of Americans and we're going to
• 24:22
  Speaker 1: go out and spend it. And if the goods aren't there,
• 24:25
  Speaker 1: we're gonna go pay up for things that we want,
• 24:28
  Speaker 1: regardless of price. And that's a key, one of the
• 24:31
  Speaker 1: many key drivers of inflation. I mean, you ever expect
• 24:34
  Speaker 1: politicians to be logical at all or intelligent, but um
• 24:39
  Speaker 1: members of the Federal Reserve should know, vince that there's
• 24:42
  Speaker 1: no such thing as a free lunch, right, absolutely no.
• 24:46
  Speaker 1: I think Barry hit the nail right on the head.
• 24:48
  Speaker 1: And that's what what my my feeling is. When the
• 24:50
  Speaker 1: set is sitting there and watching all the stimulus coming
• 24:53
  Speaker 1: into the economy. Their job is to raise rates. Their
• 24:57
  Speaker 1: job is to balance the supply and demand of money,
• 25:00
  Speaker 1: and it had they started reducing the balance sheet as
• 25:03
  Speaker 1: the FETE was pumping money into the system, it would
• 25:06
  Speaker 1: not have disturbed the economy. It might not have looked
• 25:09
  Speaker 1: good politically for them, but that's not their job to
• 25:12
  Speaker 1: worry about politics. They're not elected pisitions. You know, maybe
• 25:15
  Speaker 1: somebody should put some former traders on the feed and
• 25:17
  Speaker 1: not activeidition. But why why didn't they Why. I mean,
• 25:21
  Speaker 1: in hindsight, it seems like an easy call, but everybody knew.
• 25:25
  Speaker 1: Everybody on the street knew it wasn't transient inflation. We
• 25:28
  Speaker 1: all knew they were lying to us or or telling
• 25:31
  Speaker 1: some story to keep us calm. And so my point is,
• 25:34
  Speaker 1: I think this inflation is more transient than it was
• 25:37
  Speaker 1: a year and a half ago, because, as Barry said,
• 25:39
  Speaker 1: to put a lot of money into the system, there
• 25:41
  Speaker 1: is a supply and balance. When the supply and balance
• 25:44
  Speaker 1: comes back to me reversion and and money is not
• 25:49
  Speaker 1: in savings as as it was due to the pandemic,
• 25:52
  Speaker 1: everything is going to come back down again. There's no
• 25:54
  Speaker 1: reason to raise rates till three and a half percent
• 25:56
  Speaker 1: to scare the heck out of everybody. I think he's right.
• 25:58
  Speaker 1: And really, the big criticism I have of the FED
• 26:02
  Speaker 1: is not so much that they were behind the curve
• 26:05
  Speaker 1: in inflation, but there was just no reason for them
• 26:08
  Speaker 1: to be on an emergency footing throughout all of twenty
• 26:13
  Speaker 1: They should have recognized that. And again, if they were
• 26:17
  Speaker 1: traders there, they might have seen this, but the market
• 26:20
  Speaker 1: was telling them that the economy was fine, that people
• 26:23
  Speaker 1: would eventually get vascinated that the world was returning to normal. Instead,
• 26:29
  Speaker 1: they stayed at ZERP, they stayed with quantitative easing. Why
• 26:34
  Speaker 1: why do you think? Because I think they were very terrified.
• 26:38
  Speaker 1: I think they were so terrified of of what was
• 26:41
  Speaker 1: going on with COVID that they acted with a tremendous
• 26:44
  Speaker 1: lag that the issue in wasn't um both pre pandemic
• 26:52
  Speaker 1: and post pandemic. Wasn't that inflation was rearing its head.
• 26:55
  Speaker 1: It's that Why are we still on an emergency footing?
• 26:59
  Speaker 1: Why are it FED rate at zero when it was
• 27:02
  Speaker 1: pretty clear the post financial crisis um recovery was was
• 27:08
  Speaker 1: pretty fully expressed that things were doing better. There was
• 27:12
  Speaker 1: just no reason to stay at zero for the previous
• 27:16
  Speaker 1: couple of years before the pandemic and then when the
• 27:19
  Speaker 1: market lit up from April forwards to to not recognize, oh,
• 27:24
  Speaker 1: the economy is doing pretty well. Maybe we could go
• 27:26
  Speaker 1: to fifty or seventy five basis point Vince will that
• 27:28
  Speaker 1: we were talking to Greg Han earlier from Winthrop and
• 27:31
  Speaker 1: he said he doesn't think that Fed's going to be
• 27:32
  Speaker 1: able to reduce this balance sheet, and they certainly didn't
• 27:35
  Speaker 1: after the Great Financial Crisis. What do you expect well,
• 27:38
  Speaker 1: I mean, they're gonna have to reduce the balance sheet,
• 27:40
  Speaker 1: because that's really the issue from inational money in the system.
• 27:45
  Speaker 1: If they don't reduce the balance sheet, these rates are
• 27:47
  Speaker 1: going to go a heck of a lot higher than
• 27:49
  Speaker 1: they're prepared to deal with. But you know, like a
• 27:51
  Speaker 1: lot of traitors already pricing in, there's a reasonable chance
• 27:54
  Speaker 1: they have to pause and maybe even cut in early.
• 27:58
  Speaker 1: Because this isn't the first time they've made this mistake.
• 28:01
  Speaker 1: I think it was in two thousand and eighteen. I
• 28:03
  Speaker 1: can't remember the EUAR off top of my head. They
• 28:05
  Speaker 1: raised rates very quickly by a hundred basis points twenty
• 28:07
  Speaker 1: five at a time, and then three months later they're
• 28:10
  Speaker 1: cut him by a hundred bas points because they realized
• 28:12
  Speaker 1: they were too regressive. I mean, I think that the
• 28:15
  Speaker 1: path is very clear. The fet forecasting has been awful.
• 28:19
  Speaker 1: Oh alright, Vince Signarella, global macro strategist from Bloomberg News
• 28:23
  Speaker 1: calling us from the work from home remote location, which
• 28:27
  Speaker 1: is where I think we're gonna be able to find him. No,
• 28:29
  Speaker 1: Mettal what disclosed? Undisclosed? As we say, uh and Barry
• 28:33
  Speaker 1: rid Hultsford Hults Wealth Management joining us here on our
• 28:36
  Speaker 1: Bloomberg Interactive Brokers to you. Thanks for listening to the
• 28:40
  Speaker 1: Bloomberg Markets podcast. You can subscribe and listen to interviews
• 28:44
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• 28:48
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• 28:52
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• 28:55
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• 28:58
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