This is Bloomberg Business Wait inside from the reporters and editors who bring you America's most trusted business magazine, plus gloom O Business Finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. Open the morning and out the room.

This is Bloomberg Business Wait inside from the reporters and editors who bring you America's most trusted business magazine, plus gloom O Business Finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. Open the morning and out the room.

The teacher is teaching them.

The teacher is teaching them.

I'm all right, everybody, we are going to talk about school a little bit. And now of the third quarter is officially in the books, everyone is thinking about the fourth quarter. And one of the things that could help create a bit of a reality check for the world at large, for investors, for consumers, and that is what happens when it comes to paying back those student loans.

I'm all right, everybody, we are going to talk about school a little bit. And now of the third quarter is officially in the books, everyone is thinking about the fourth quarter. And one of the things that could help create a bit of a reality check for the world at large, for investors, for consumers, and that is what happens when it comes to paying back those student loans.

Absolutely, I mean, there's been a real question mark among all the companies that have brought this up. But also more important, did you know graduate students are taking on an outsized share of federal student loans. In fact, even I feel forty seven percent of the total overall share of student loans went to graduate students. And our Bloomberg News Higher Education finance reporter Janet Lauren has a great story on this, so definitely read it, but first listen to her here she joins us via zoom in New York City. So, Jennet, your story looks specifically at graduate students who borrowed money. What did you find out?

Absolutely, I mean, there's been a real question mark among all the companies that have brought this up. But also more important, did you know graduate students are taking on an outsized share of federal student loans. In fact, even I feel forty seven percent of the total overall share of student loans went to graduate students. And our Bloomberg News Higher Education finance reporter Janet Lauren has a great story on this, so definitely read it, but first listen to her here she joins us via zoom in New York City. So, Jennet, your story looks specifically at graduate students who borrowed money. What did you find out?

So, graduate students are borrowing a lot of money. In fact, if you look at the annual disbursements between who's borrowing, they're almost they're set to borrow more than undergraduates. And it sounds kind of crazy because there's a lot of people going to college and not as many people going to graduate school. But they're borrowing quite a lot of money. And the reason is because undergrad are limited to roughly thirty thousand dollars of federal loans over four years. But if you're going to graduate school, you can borrow quite a lot up to the cost of attendance, and in some cases you're talking eighty thousand or more per year, and that also includes housing and living expenses. So that's one reason. And another reason is the interest rates. This year, if you're going to graduate school, you would be taking out a grad plus loan with an interest rate that's over eight percent for the first time in a dozen years, and grad plus loans accrued during college, so you know you're taking out a lot of money, and it's a lot more people are going to graduate school and taking these large amounts, and it's accruing, so it's roughly half of the annual disbursements and Education Department economists are boried as it's set to eclipse undergraduate borrowing.

So, graduate students are borrowing a lot of money. In fact, if you look at the annual disbursements between who's borrowing, they're almost they're set to borrow more than undergraduates. And it sounds kind of crazy because there's a lot of people going to college and not as many people going to graduate school. But they're borrowing quite a lot of money. And the reason is because undergrad are limited to roughly thirty thousand dollars of federal loans over four years. But if you're going to graduate school, you can borrow quite a lot up to the cost of attendance, and in some cases you're talking eighty thousand or more per year, and that also includes housing and living expenses. So that's one reason. And another reason is the interest rates. This year, if you're going to graduate school, you would be taking out a grad plus loan with an interest rate that's over eight percent for the first time in a dozen years, and grad plus loans accrued during college, so you know you're taking out a lot of money, and it's a lot more people are going to graduate school and taking these large amounts, and it's accruing, so it's roughly half of the annual disbursements and Education Department economists are boried as it's set to eclipse undergraduate borrowing.

You know, I just feel like it speaks to this bigger problem of cost of college, the loans that are taken out, and then ultimately, Janet, does it pay off in terms of the jobs they get. We've seen all the studies about gett a college education and you tend to do better when it comes to your income over time. But having said that, these graduate students who are taking on these loans, do they ultimately get jobs that make financial sense so they pay it off pretty easily.

You know, I just feel like it speaks to this bigger problem of cost of college, the loans that are taken out, and then ultimately, Janet, does it pay off in terms of the jobs they get. We've seen all the studies about gett a college education and you tend to do better when it comes to your income over time. But having said that, these graduate students who are taking on these loans, do they ultimately get jobs that make financial sense so they pay it off pretty easily.

Well, it's a great question. We know that college is viewed as a ticket to a better living, but it's just not clear about graduate degrees. It's, first of all, it's going to depend on the type of degree and where you're going to school. If you're going to Harvard Law School or a top law school, or a top MBA program or a top engineering school, chances are you'll have a better chance of getting a job to pay it off. But we spoke to some labor economists who looked at online resumes and online job postings, and there's a lot more people with graduate degrees in their resumes and the job listings that looked for, you know, graduate degrees were really stagnating. And the question is, uh, you know, what are they What are the people who are employing you, what are they valuing? Do they want to know you have skills? Or do they even care about a graduate? Well, and of course if you want to, yeah, oh go ahead.

Well, it's a great question. We know that college is viewed as a ticket to a better living, but it's just not clear about graduate degrees. It's, first of all, it's going to depend on the type of degree and where you're going to school. If you're going to Harvard Law School or a top law school, or a top MBA program or a top engineering school, chances are you'll have a better chance of getting a job to pay it off. But we spoke to some labor economists who looked at online resumes and online job postings, and there's a lot more people with graduate degrees in their resumes and the job listings that looked for, you know, graduate degrees were really stagnating. And the question is, uh, you know, what are they What are the people who are employing you, what are they valuing? Do they want to know you have skills? Or do they even care about a graduate? Well, and of course if you want to, yeah, oh go ahead.

No, I was, you know, I was thinking about my own career. Like It's like, at one point I said to somebody, should I go back and get a graduate degree? And I knew I was already doing journalism, and she's like, you're doing it, that's the best.

No, I was, you know, I was thinking about my own career. Like It's like, at one point I said to somebody, should I go back and get a graduate degree? And I knew I was already doing journalism, and she's like, you're doing it, that's the best.

I had a similar experience. I don't know if Janet, do you get a graduate No?

I had a similar experience. I don't know if Janet, do you get a graduate No?

I didn't.

I didn't.

Ultimately thought about it, decided not to do it. But Janet, I don't know if you've had the same experience.

Ultimately thought about it, decided not to do it. But Janet, I don't know if you've had the same experience.

Well, I did, but I went right out of college and it was a lot less expensive then.

Well, I did, but I went right out of college and it was a lot less expensive then.

Well, and that's something your story says too, is that the costs for these degrees have gone way way up, and so you have people not necessarily earning as much money in their overall careers, but then they're also having to pay off these bills that just seem to be wildly more expensive.

Well, and that's something your story says too, is that the costs for these degrees have gone way way up, and so you have people not necessarily earning as much money in their overall careers, but then they're also having to pay off these bills that just seem to be wildly more expensive.

Right, Yeah, I mean, if if you want to go to a graduate school, find someone else to pay for it, if your parents are able to pay for it, if your employer is able to pay for it, if you can go to a state program that doesn't cost a lot of money, then you know, then in some ways it could be an easy decision, but you have to do this calculus. And you know, some of the borrowers we spoke to in the story, they just weren't sure what to do after college, and they thought that these degrees would give them higher earnings, and it just doesn't always happen that way.

Right, Yeah, I mean, if if you want to go to a graduate school, find someone else to pay for it, if your parents are able to pay for it, if your employer is able to pay for it, if you can go to a state program that doesn't cost a lot of money, then you know, then in some ways it could be an easy decision, but you have to do this calculus. And you know, some of the borrowers we spoke to in the story, they just weren't sure what to do after college, and they thought that these degrees would give them higher earnings, and it just doesn't always happen that way.

Gosh, you talk about Brielle in your story, who went to Eckard College in twenty twelve. Anyway, she went off to get a law degree. I mean, you note Janet that she says it's going to take until twenty forty five to pay off her loan. She got a law degree, right, and she expects it to grow to about two hundred and forty five thousand dollars worth interest. I mean that's some serious money.

Gosh, you talk about Brielle in your story, who went to Eckard College in twenty twelve. Anyway, she went off to get a law degree. I mean, you note Janet that she says it's going to take until twenty forty five to pay off her loan. She got a law degree, right, and she expects it to grow to about two hundred and forty five thousand dollars worth interest. I mean that's some serious money.

Yeah, and she found a job that with a law firm that she really enjoys. But as it turns out, it doesn't require a law degree. It's working in comple flience, which was something she would not have found otherwise if she hadn't gone to law school. But you know, it's just it's just a calculus and in some cases the risk that people are taking because they thought it would it would pay off, and it doesn't always pay off.

Yeah, and she found a job that with a law firm that she really enjoys. But as it turns out, it doesn't require a law degree. It's working in comple flience, which was something she would not have found otherwise if she hadn't gone to law school. But you know, it's just it's just a calculus and in some cases the risk that people are taking because they thought it would it would pay off, and it doesn't always pay off.

What we have you can we talk about another story you wrote. Uh, the school that is so steeped in wells and prestige has also been steeped in scandal and now searching for a new president. The area in which it resides in and which it's so connected to, the US tech epicenter also going through a reboot that will no doubt impact Stanford as well. Talk to me about the standing of this institution in our world at large and how that might change. Uh if given all these factors.

What we have you can we talk about another story you wrote. Uh, the school that is so steeped in wells and prestige has also been steeped in scandal and now searching for a new president. The area in which it resides in and which it's so connected to, the US tech epicenter also going through a reboot that will no doubt impact Stanford as well. Talk to me about the standing of this institution in our world at large and how that might change. Uh if given all these factors.

Well, Stanford is going to be just fine.

Well, Stanford is going to be just fine.

There's going okay, all right, We're just gonna.

There's going okay, all right, We're just gonna.

Get They're going to get a good president. You know, tens of thousands of kids are still clamoring to go there. But they've had to deal with a lot of a lot of scandals. Frankly, their president resigned. He there were a lot of questions in his research. He's a really prominent UH scientist, and he actually had to retract a couple of articles, which is a pretty big deal in the scientific community and the and this was all discovered in the student newspaper, which is really impressive. And a lot of the big scandals in tech or you know, the Stanford name is dragged into it ft X, the Crypto Exchange. That's you know, Sam bankmin Fred is going on trial next week his parents. Our law schools there in our Bloomberg colleagues had a great story a few weeks ago about their involvement. Of course, there's you know, Stanford dropout had a big tie to Silicon Valley, and there's just a lot of stuff going on there. So you know, we'll see. But Stanford raises more money in some years than Harvard. They get more you know, government research funding than schools that are hundreds of years older than them. You know, in one sense, you know, four Nobel Prizes in the last couple of years raising a billion dollars. But on the other hand, you know there's a lot going on there.

Get They're going to get a good president. You know, tens of thousands of kids are still clamoring to go there. But they've had to deal with a lot of a lot of scandals. Frankly, their president resigned. He there were a lot of questions in his research. He's a really prominent UH scientist, and he actually had to retract a couple of articles, which is a pretty big deal in the scientific community and the and this was all discovered in the student newspaper, which is really impressive. And a lot of the big scandals in tech or you know, the Stanford name is dragged into it ft X, the Crypto Exchange. That's you know, Sam bankmin Fred is going on trial next week his parents. Our law schools there in our Bloomberg colleagues had a great story a few weeks ago about their involvement. Of course, there's you know, Stanford dropout had a big tie to Silicon Valley, and there's just a lot of stuff going on there. So you know, we'll see. But Stanford raises more money in some years than Harvard. They get more you know, government research funding than schools that are hundreds of years older than them. You know, in one sense, you know, four Nobel Prizes in the last couple of years raising a billion dollars. But on the other hand, you know there's a lot going on there.

Yeah, I love Stanford's fundraising alone over the last six fiscal years exceeded seven billion dollars. Pretty serious money. And I have to say, when Bloomberg BusinessWeek does the annual NBA survey, it is often number one, and I think as well, Yes, it's consistently number one, So it's kind of where students want to go, and they seem to like it a lot. Jennet Lauren, thank you so much. Have a good and safe weekend. Higher Education Finance reporter app Blomberg News. Joining us on zoom from New York City. I'm Carol Massa along with Simone Foxman in for Tim Stenevik. You're listening and watching Bloomberg Radio.

Yeah, I love Stanford's fundraising alone over the last six fiscal years exceeded seven billion dollars. Pretty serious money. And I have to say, when Bloomberg BusinessWeek does the annual NBA survey, it is often number one, and I think as well, Yes, it's consistently number one, So it's kind of where students want to go, and they seem to like it a lot. Jennet Lauren, thank you so much. Have a good and safe weekend. Higher Education Finance reporter app Blomberg News. Joining us on zoom from New York City. I'm Carol Massa along with Simone Foxman in for Tim Stenevik. You're listening and watching Bloomberg Radio.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot com, the iHeartRadio app and the Bloomberg Business app, or watch us live on YouTube.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot com, the iHeartRadio app and the Bloomberg Business app, or watch us live on YouTube.

When it comes to newsflow, there's a lot. When it comes to anything and everything to do with AI, the European Union, in fact checking, out and examining alleged anti competitive abuses and ships used for AI. It's a market that we know is dominated by Nvidia, even so maybe some concerns. We'll see where that goes. It may go nowhere. The world does seem to be all in when it comes to artificial intelligence. That Our next guest works with companies to better use data nai efficiency, yes, but also to help companies become more sustainable. So let's get to it. Our guest is Christina Shims. She has Global HAAD, a product and strategy at IMBM Sustainability Software. She is with us on Zoom in Atlanta. Christina, Yeah, good to have you here with us. Tell us a little bit about what you guys are doing when it comes to AI and helping companies to be more sustainable.

When it comes to newsflow, there's a lot. When it comes to anything and everything to do with AI, the European Union, in fact checking, out and examining alleged anti competitive abuses and ships used for AI. It's a market that we know is dominated by Nvidia, even so maybe some concerns. We'll see where that goes. It may go nowhere. The world does seem to be all in when it comes to artificial intelligence. That Our next guest works with companies to better use data nai efficiency, yes, but also to help companies become more sustainable. So let's get to it. Our guest is Christina Shims. She has Global HAAD, a product and strategy at IMBM Sustainability Software. She is with us on Zoom in Atlanta. Christina, Yeah, good to have you here with us. Tell us a little bit about what you guys are doing when it comes to AI and helping companies to be more sustainable.

Absolutely, thanks for having me.

Absolutely, thanks for having me.

Yeah.

Yeah.

So, look, sustainability is one of those things that is not going away with anything. It's becoming more and more of an issue. We're seeing it affect everyone from communities to businesses, to governments and regulations coming out. You're seeing it with extreme weather. You're seeing that in New York today with the flooding and the rain that's happening and this past summer was the hottest.

So, look, sustainability is one of those things that is not going away with anything. It's becoming more and more of an issue. We're seeing it affect everyone from communities to businesses, to governments and regulations coming out. You're seeing it with extreme weather. You're seeing that in New York today with the flooding and the rain that's happening and this past summer was the hottest.

In recorded history.

In recorded history.

And so what we are doing is ensuring that we can work with our partners to make sure that they are headed towards and leveraging technology in reaching their sustainability goals. More than two thirds of employees wanting now work for companies that have sustainability goals committed towards.

And so what we are doing is ensuring that we can work with our partners to make sure that they are headed towards and leveraging technology in reaching their sustainability goals. More than two thirds of employees wanting now work for companies that have sustainability goals committed towards.

But what does that mean? So what does it mean when you are helping them? Like, what specifically? Give us an idea if you would an example.

But what does that mean? So what does it mean when you are helping them? Like, what specifically? Give us an idea if you would an example.

Yeah, absolutely, So, Look, the biggest challenge here is data. Basically, organizations have a really difficult time working through multiple different silos. I'm talking hundreds of different systems and spreadsheets all around the organizations to really get a sense for where the baseline is.

Yeah, absolutely, So, Look, the biggest challenge here is data. Basically, organizations have a really difficult time working through multiple different silos. I'm talking hundreds of different systems and spreadsheets all around the organizations to really get a sense for where the baseline is.

For their sustainability posture.

For their sustainability posture.

So, if you have hundreds of different systems where you have data, you can't necessarily make sense of it in one single system of record. It's really difficult for organizations to understand where they are, where they need to go, and how to get there. And so while organizations have these committed sustainability targets, they also have to think about it as core to the business. This is not just good for good's sake. It's also good for business, and so what AI helps to do is to unlock the potential of all of that data. One is, how do you make sure that you are bringing all that data into that single system of records so that you can understand where you are, where you need to go, and how to get there and how to get there? Is what are the insights that you are able to draw from the data so that.

So, if you have hundreds of different systems where you have data, you can't necessarily make sense of it in one single system of record. It's really difficult for organizations to understand where they are, where they need to go, and how to get there. And so while organizations have these committed sustainability targets, they also have to think about it as core to the business. This is not just good for good's sake. It's also good for business, and so what AI helps to do is to unlock the potential of all of that data. One is, how do you make sure that you are bringing all that data into that single system of records so that you can understand where you are, where you need to go, and how to get there and how to get there? Is what are the insights that you are able to draw from the data so that.

You can actually action on it.

You can actually action on it.

Right now, there's not a lot of time, I want to say, not a lot of time left. We have to act very quickly and urgently around climate and towards sustainability for businesses and for communities. And unlocking the potential of all of that data through AI is where this is all going. And that's what we do with our partners and our customers to help enable that.

Right now, there's not a lot of time, I want to say, not a lot of time left. We have to act very quickly and urgently around climate and towards sustainability for businesses and for communities. And unlocking the potential of all of that data through AI is where this is all going. And that's what we do with our partners and our customers to help enable that.

Okay, but this doesn't sound that sexy to some degree, like this sounds like data management, data crunching. What about this is like artificial intelligence?

Okay, but this doesn't sound that sexy to some degree, like this sounds like data management, data crunching. What about this is like artificial intelligence?

Yeah, so AI really helps.

Yeah, so AI really helps.

It's not I joke that it's really the non sexy stuff, but that's really what helps us to get towards the action that's needed. So AI enables better and faster decisions on both the sustainability and on the business front. It helps across a couple areas, right, so you mentioned the efficiencies. Yes, it helps with energy costs, it helps with emissions. It can help to do a couple things like monitor and make pain physical assets around your infrastructure, around your factory.

It's not I joke that it's really the non sexy stuff, but that's really what helps us to get towards the action that's needed. So AI enables better and faster decisions on both the sustainability and on the business front. It helps across a couple areas, right, so you mentioned the efficiencies. Yes, it helps with energy costs, it helps with emissions. It can help to do a couple things like monitor and make pain physical assets around your infrastructure, around your factory.

Things like that.

Things like that.

It can optimize how inventory is routed around the world. It can detect anomalies that drive zo defect goals, right, It can write how computing, It can schedule task So yeah, these are not really sexy things to do, but at the end of the day, this is what really helps to make a difference in actioning what that zero commitment or what goals organizations help set.

It can optimize how inventory is routed around the world. It can detect anomalies that drive zo defect goals, right, It can write how computing, It can schedule task So yeah, these are not really sexy things to do, but at the end of the day, this is what really helps to make a difference in actioning what that zero commitment or what goals organizations help set.

Christy to help us though, because AI not a new thing, been around for decades, right, artificial intelligence, and so we always kind of remind everybody, but the world has become so excited with generative AI and how that takes us maybe to a different level in terms of data management and usefulness. So what has changed in terms of you guys have been working with AI for a long time, no doubt about it. Has something changed though in your ability to help customers when it comes to maintaining their sustainability targets are monitoring of those targets.

Christy to help us though, because AI not a new thing, been around for decades, right, artificial intelligence, and so we always kind of remind everybody, but the world has become so excited with generative AI and how that takes us maybe to a different level in terms of data management and usefulness. So what has changed in terms of you guys have been working with AI for a long time, no doubt about it. Has something changed though in your ability to help customers when it comes to maintaining their sustainability targets are monitoring of those targets.

Yeah, so that's a great question.

Yeah, so that's a great question.

One is that increasingly customers are more inclined to think about how generative AI can actually help them with their business and sustainability problems. There's much more appetite for customers to inherently and intentionally use AI for these problems. Two is that it can help make the automation and reporting of data and decreasing of emissions much faster and increasingly, I would say, especially in the last few years, even before generative AI became the hot topic or the trendy topic, customers were already starting to think about it because regulations and.

One is that increasingly customers are more inclined to think about how generative AI can actually help them with their business and sustainability problems. There's much more appetite for customers to inherently and intentionally use AI for these problems. Two is that it can help make the automation and reporting of data and decreasing of emissions much faster and increasingly, I would say, especially in the last few years, even before generative AI became the hot topic or the trendy topic, customers were already starting to think about it because regulations and.

Compliance were coming out.

Compliance were coming out.

But this is really catapulted and accelerated, I would say in the last year or so, you're seeing regulations come out in the EU, increasingly in the US. You saw what happened this past month in California with their emissions law, and so using foundation models and using AI can actually help to solve these problems faster. But also appetite from the customer side has changed quite a bit. And so I think a combination of how we are addressing AI as part of what we're doing and increasing kind of the acceleration of that using foundation models with assisting products and new products.

But this is really catapulted and accelerated, I would say in the last year or so, you're seeing regulations come out in the EU, increasingly in the US. You saw what happened this past month in California with their emissions law, and so using foundation models and using AI can actually help to solve these problems faster. But also appetite from the customer side has changed quite a bit. And so I think a combination of how we are addressing AI as part of what we're doing and increasing kind of the acceleration of that using foundation models with assisting products and new products.

Does you know what I wonder? Does it move the needle for you guys at IBM financially, I mean, has generative AI and then when it comes to sustainability needs of customers, does that create a significant new revenue stream for you guys? And we just got about thirty seconds.

Does you know what I wonder? Does it move the needle for you guys at IBM financially, I mean, has generative AI and then when it comes to sustainability needs of customers, does that create a significant new revenue stream for you guys? And we just got about thirty seconds.

Yeah, I will say that there's a real hunger for this, right, there's a real appetite, there's a real hunger for this, and customers know that this is a game changer, so they.

Yeah, I will say that there's a real hunger for this, right, there's a real appetite, there's a real hunger for this, and customers know that this is a game changer, so they.

Will do that.

Will do that.

They will they will inherently look to adopt the technology in a way that they know has meaning in both their business and sustainability. And they know that we are working with them to ensure that we're doing this in an unpliased and a transparent way because I know that there are some areas of AI that you know, we need to make sure that we're doing it in the right way. And so the customers that are most for leaning and really interested in this, which I would say all the customers that we're talking to are, so they're making sure that they're integrating that as part of it, with that increased apple and intentionality, and I think that that is where the market is and where the appetite.

They will they will inherently look to adopt the technology in a way that they know has meaning in both their business and sustainability. And they know that we are working with them to ensure that we're doing this in an unpliased and a transparent way because I know that there are some areas of AI that you know, we need to make sure that we're doing it in the right way. And so the customers that are most for leaning and really interested in this, which I would say all the customers that we're talking to are, so they're making sure that they're integrating that as part of it, with that increased apple and intentionality, and I think that that is where the market is and where the appetite.

Is for sure.

Is for sure.

All Right, appreciate that some context. Christina Shim, Global head of Product and Strategy and IBM Sustainability Software, joining us in zoom in Atlanta. I always feel like time will tell I kind of like chatbots, but we'll see.

All Right, appreciate that some context. Christina Shim, Global head of Product and Strategy and IBM Sustainability Software, joining us in zoom in Atlanta. I always feel like time will tell I kind of like chatbots, but we'll see.

But it would be good if people wanted to save the environment, because it's cool.

But it would be good if people wanted to save the environment, because it's cool.

All in on that. This is Bloomberg.

All in on that. This is Bloomberg.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Easter on Bloomberg Radio, the Bloomberg Business app and YouTube. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa, play Bloomberg eleven thirty to love.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Easter on Bloomberg Radio, the Bloomberg Business app and YouTube. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa, play Bloomberg eleven thirty to love.

All right, everybody's public you me. Everyone remains largely in the dark about a process in the making of plastic. It is known as fluorination and the toxics pfas that are generated in the process. Those PFA's compounds found to be so dangerous that the US Environmental Protection Agency had moved to effectively ban them. Back in twenty fifteen, there is one company, little known that seems to be at the center of it. Got to get to this story. It is a feature in the new issue of Bloomberg Business Week, on newsstands, online at Bloomberg dot com, slash business Week, and on the Bloomberg with Us. To talk about it is Bloomberg News reporter Esme Duprez and also the editor of Bloomberg Business Week, Jill Weber on zoom in New York City. Jill, I feel like you just keep bringing to me and to our audience stories about things that make me a little worried, whether it's the Google search abilities and location abilities, or whether it's plastic and how is that maybe impacting me?

All right, everybody's public you me. Everyone remains largely in the dark about a process in the making of plastic. It is known as fluorination and the toxics pfas that are generated in the process. Those PFA's compounds found to be so dangerous that the US Environmental Protection Agency had moved to effectively ban them. Back in twenty fifteen, there is one company, little known that seems to be at the center of it. Got to get to this story. It is a feature in the new issue of Bloomberg Business Week, on newsstands, online at Bloomberg dot com, slash business Week, and on the Bloomberg with Us. To talk about it is Bloomberg News reporter Esme Duprez and also the editor of Bloomberg Business Week, Jill Weber on zoom in New York City. Jill, I feel like you just keep bringing to me and to our audience stories about things that make me a little worried, whether it's the Google search abilities and location abilities, or whether it's plastic and how is that maybe impacting me?

Yeah, so as many as reporting on this story is sensational and it will really terrify everyone. And I've spent the past few weeks since reading this the first version of the story like going through my life and just basically like flipping over every plastic bottle and container and looking for a number two symbol, as may why is number two a problem?

Yeah, so as many as reporting on this story is sensational and it will really terrify everyone. And I've spent the past few weeks since reading this the first version of the story like going through my life and just basically like flipping over every plastic bottle and container and looking for a number two symbol, as may why is number two a problem?

Yeah?

Yeah?

Well that's a big picture. I mean, this story is about pfas, which are these enormous, you know, this enormous class of man made chemicals that have been used for decades to make all kinds of things you know better, but scientists are increasingly ringing alarm bills about them as we learn how toxic they are and the ways in which they harm our bodies and the environment. So this, uh, the story really is about the scientific discovery of a new root of exposure to p fas. And how there's just one company, Carol, as you said, in the US A responsible for making them, or for generating these illegal toxic compounds, and how despite demands from the US government and the Department of Justice EPA, the company just flat out refused to stop. And that number two symbol is really important because that's the type of plastic that this company typically treats. It's called HDPE plastic. It's rigid, it's usually opaque. It's used for everything from milk judge jugs to snowboards, and that's typically the plastic that they're treating and as a result, generating pfas and some of the worst p fas at that.

Well that's a big picture. I mean, this story is about pfas, which are these enormous, you know, this enormous class of man made chemicals that have been used for decades to make all kinds of things you know better, but scientists are increasingly ringing alarm bills about them as we learn how toxic they are and the ways in which they harm our bodies and the environment. So this, uh, the story really is about the scientific discovery of a new root of exposure to p fas. And how there's just one company, Carol, as you said, in the US A responsible for making them, or for generating these illegal toxic compounds, and how despite demands from the US government and the Department of Justice EPA, the company just flat out refused to stop. And that number two symbol is really important because that's the type of plastic that this company typically treats. It's called HDPE plastic. It's rigid, it's usually opaque. It's used for everything from milk judge jugs to snowboards, and that's typically the plastic that they're treating and as a result, generating pfas and some of the worst p fas at that.

So as may so much of your reporting is terrifying. But how big is this company who owns the why hasn't the EPA just managed to shut it down if all this stuff is so troubling.

So as may so much of your reporting is terrifying. But how big is this company who owns the why hasn't the EPA just managed to shut it down if all this stuff is so troubling.

Yeah, that's a great question. So Enhanced Technologies is actually a really small company. I got a hold of some documents from twenty eighteen. It showed they just had forty six million dollars in annual revenue in twenty eighteen. So obviously that's not a ton They only have a few hundred employees. But they really built up this domestic monopoly on this process called postmodilorination, which is this treatment of plastic to make it stronger, and like, this treatment is actually really useful. Uh, you know, plenty of companies have wanted this treatment for decades because it makes plastics less permeable, so you can transport you know, harsh chemicals and solvents and things like essential oils. You know, the reason for fluorination is that conventional plastic will permeate through the container walls if you don't provide a barrier of some sort. So that's the reason why they're fluorinating their plastic. That's why they're they're treating this plastic in this way, right, And so the EPA has gone after them and uh, you know, so as the Justice Department, they have essentially they're they're in violation of a really you know, wonky chemical law and basically they just they say this law doesn't apply to us, and so we're just going to continue, you know, going on business as usual. Obviously as they fight this you know, this battle with EPA and now they fight this litigation in in federal court.

Yeah, that's a great question. So Enhanced Technologies is actually a really small company. I got a hold of some documents from twenty eighteen. It showed they just had forty six million dollars in annual revenue in twenty eighteen. So obviously that's not a ton They only have a few hundred employees. But they really built up this domestic monopoly on this process called postmodilorination, which is this treatment of plastic to make it stronger, and like, this treatment is actually really useful. Uh, you know, plenty of companies have wanted this treatment for decades because it makes plastics less permeable, so you can transport you know, harsh chemicals and solvents and things like essential oils. You know, the reason for fluorination is that conventional plastic will permeate through the container walls if you don't provide a barrier of some sort. So that's the reason why they're fluorinating their plastic. That's why they're they're treating this plastic in this way, right, And so the EPA has gone after them and uh, you know, so as the Justice Department, they have essentially they're they're in violation of a really you know, wonky chemical law and basically they just they say this law doesn't apply to us, and so we're just going to continue, you know, going on business as usual. Obviously as they fight this you know, this battle with EPA and now they fight this litigation in in federal court.

So the the litigation obviously makes this incredibly timely. Is there any sense of what the what the outcome of this looks like for the timeline and also like what about the health implications and the economic implications of whatever the outcome becomes.

So the the litigation obviously makes this incredibly timely. Is there any sense of what the what the outcome of this looks like for the timeline and also like what about the health implications and the economic implications of whatever the outcome becomes.

Yeah, so the litigation is ongoing, so Enhanced kind of is fighting two battles. They're fighting one battle against the EPA itself to try to get official clearance to continue florinating. There is a process for if you're generating these quote unquote long chain p fast compounds, which are kind of the worst of the worst, you can apply there is an effective ban on them, but you can apply to the EPA to kind of get an exemption. So that's what they are trying to get. So they're kind of fighting that battle. On one hand, and then they're fighting this other battle on their other hand against the DOJ in court and saying we're not you know, they're trying to convince a judge that the law that the EPA says they're breaking, that the DJ says they're breaking, that they are exempt from it. So they have who main arguments one, I mean, again it gets a little wonky, but they say, you know, you can a VPA only has the authority to regulate significant new uses of these chemicals, and they've been doing this for forty years, so they're not that doesn't qualify as new in their mind. And then yeah, so that's kind of their main argument. They're also saying that, you know that the quantities of these chemicals that they're generating are so small and they are quote unquote impurities, so they don't, you know, qualify for the law.

Yeah, so the litigation is ongoing, so Enhanced kind of is fighting two battles. They're fighting one battle against the EPA itself to try to get official clearance to continue florinating. There is a process for if you're generating these quote unquote long chain p fast compounds, which are kind of the worst of the worst, you can apply there is an effective ban on them, but you can apply to the EPA to kind of get an exemption. So that's what they are trying to get. So they're kind of fighting that battle. On one hand, and then they're fighting this other battle on their other hand against the DOJ in court and saying we're not you know, they're trying to convince a judge that the law that the EPA says they're breaking, that the DJ says they're breaking, that they are exempt from it. So they have who main arguments one, I mean, again it gets a little wonky, but they say, you know, you can a VPA only has the authority to regulate significant new uses of these chemicals, and they've been doing this for forty years, so they're not that doesn't qualify as new in their mind. And then yeah, so that's kind of their main argument. They're also saying that, you know that the quantities of these chemicals that they're generating are so small and they are quote unquote impurities, so they don't, you know, qualify for the law.

I keep wondering, Wait, my government, I pay taxes, who's watching out for me? But having said that, sorry, I'll get off my soapbox. As may you are, Bloomberg New Senior Investigations reporter. In your investigations, I'm thinking of people who are listening and watching to this, and I'm just curious size and scope. So how widespread is the use Jill talked about going through his containers, I'm wondering. I look, you know, I turned something upside down. I see that recycle or whatever that code is, and I think, oh, I'm good. So give us some size and scope in terms of the types of containers, uh, and the different industries that are using it, and how you know is it likely on all of our shelves.

I keep wondering, Wait, my government, I pay taxes, who's watching out for me? But having said that, sorry, I'll get off my soapbox. As may you are, Bloomberg New Senior Investigations reporter. In your investigations, I'm thinking of people who are listening and watching to this, and I'm just curious size and scope. So how widespread is the use Jill talked about going through his containers, I'm wondering. I look, you know, I turned something upside down. I see that recycle or whatever that code is, and I think, oh, I'm good. So give us some size and scope in terms of the types of containers, uh, and the different industries that are using it, and how you know is it likely on all of our shelves.

Yeah, so it's it's quite hard to say for sure because Enhanced is owned by a private equity firm. Going back to your question, Jrol, sorry to answer that. So they're owned by private equity firms, a private company, they don't have to publicly disclose their customers, and the EPA has a list of their customers and what the fluorinated plastics are used for, but they call it confidential business information. So when we ask for it, they said no. But basically, Enhanced says they fluorinate more than two hundred million plastic items every year. A lot of those containers are used in the agricultural chemical industry, so for things like pesticides and other harsh chemicals. But our investigation found that these items that they florinate touch virtually every facet of US economy. You know, they're used to hold weed, killers, gasoline, household cleaners, cosmetics, shampoo. We actually had some independent testing done on two shampoo bottles of companies and Bumble and Bumble and OGX Beauty that I had reason to believe my beflorignated, and indeed the results came back positive. So it's shampoo, you know, it's it's body wash. So lots of things, I mean enhanced says. So when you're when you're at home kind of going through your shelves and you know, figuring out whether you may have chlorinated plastic, you want to look for again that number two symbol that is that is the recycling code for h GPE. And then you want to go to the ingredient list. You want to look and see, you know, does it have essentral oils, pine oil, citrus oils. There's a really widely used citrus derivative called dley Mornin, and that's in a ton of you know, soaps, and uh, I see, yeah, it's it's in a ton of stuff, so you might want to, you know, look there. I was also able to find the names of some companies that Enhance has named as end users of the company's treated plastics, and those included Bath Bath and Bodyworks BAY or BMW, s A latter Hussavarna and moreal So, we're talking really really wide penetration. This goes way way farther than mosquito spray, which is which is the initial product that we that was what led to the whole discovery was mosquito spray.

Yeah, so it's it's quite hard to say for sure because Enhanced is owned by a private equity firm. Going back to your question, Jrol, sorry to answer that. So they're owned by private equity firms, a private company, they don't have to publicly disclose their customers, and the EPA has a list of their customers and what the fluorinated plastics are used for, but they call it confidential business information. So when we ask for it, they said no. But basically, Enhanced says they fluorinate more than two hundred million plastic items every year. A lot of those containers are used in the agricultural chemical industry, so for things like pesticides and other harsh chemicals. But our investigation found that these items that they florinate touch virtually every facet of US economy. You know, they're used to hold weed, killers, gasoline, household cleaners, cosmetics, shampoo. We actually had some independent testing done on two shampoo bottles of companies and Bumble and Bumble and OGX Beauty that I had reason to believe my beflorignated, and indeed the results came back positive. So it's shampoo, you know, it's it's body wash. So lots of things, I mean enhanced says. So when you're when you're at home kind of going through your shelves and you know, figuring out whether you may have chlorinated plastic, you want to look for again that number two symbol that is that is the recycling code for h GPE. And then you want to go to the ingredient list. You want to look and see, you know, does it have essentral oils, pine oil, citrus oils. There's a really widely used citrus derivative called dley Mornin, and that's in a ton of you know, soaps, and uh, I see, yeah, it's it's in a ton of stuff, so you might want to, you know, look there. I was also able to find the names of some companies that Enhance has named as end users of the company's treated plastics, and those included Bath Bath and Bodyworks BAY or BMW, s A latter Hussavarna and moreal So, we're talking really really wide penetration. This goes way way farther than mosquito spray, which is which is the initial product that we that was what led to the whole discovery was mosquito spray.

Asmis What are the health implications of this? What happens if these p fast I guess get in your bloodstream?

Asmis What are the health implications of this? What happens if these p fast I guess get in your bloodstream?

Like where does this go if you were affected by it?

Like where does this go if you were affected by it?

Yeah, So, for all that we know today about the fast universe, it is really important to say, like there is so so much more that we don't yet know, so much more that we have let to get to learn and to discover. However, we do know that p fas are really good at getting into our bodies and sticking around. So it's not like, you know, even like caffeine or even lead, I mean, your body you know, gradually gets rid of those things. P FAST They're really good at sticking around in our bloods, They're really good at sticking around in the environment. They're really good at sticking around in water and it's really hard to get them out. So, you know, we now have enough long term data to link p fast exposure to really bad things like cancer, birth effects in fertility. Now we're talking a really really big class of chemicals. We don't have the data to show that all p fas caused those things, but the data that we do have is very disconcerting. And certainly for these long chain p faas, which is the specific subclass of p fas that fluorination of plastic generates, those are definitely the worst of the worst, and they are the ones that are you know, the data is showing a most strong correlation with things like with things like cancer.

Yeah, So, for all that we know today about the fast universe, it is really important to say, like there is so so much more that we don't yet know, so much more that we have let to get to learn and to discover. However, we do know that p fas are really good at getting into our bodies and sticking around. So it's not like, you know, even like caffeine or even lead, I mean, your body you know, gradually gets rid of those things. P FAST They're really good at sticking around in our bloods, They're really good at sticking around in the environment. They're really good at sticking around in water and it's really hard to get them out. So, you know, we now have enough long term data to link p fast exposure to really bad things like cancer, birth effects in fertility. Now we're talking a really really big class of chemicals. We don't have the data to show that all p fas caused those things, but the data that we do have is very disconcerting. And certainly for these long chain p faas, which is the specific subclass of p fas that fluorination of plastic generates, those are definitely the worst of the worst, and they are the ones that are you know, the data is showing a most strong correlation with things like with things like cancer.

And of course, I think, you know, one of the most other frightening, troubling problem problems that the esme's reporting reveals is if the EPA is successful and this company disappears from the market, the implications for all these companies and how we deal with consumer products in general are is also going to be a big problem. It's like, you know, there's so much popic in the world, and here we are having to figure out perhaps a health implication we hadn't ever anticipated.

And of course, I think, you know, one of the most other frightening, troubling problem problems that the esme's reporting reveals is if the EPA is successful and this company disappears from the market, the implications for all these companies and how we deal with consumer products in general are is also going to be a big problem. It's like, you know, there's so much popic in the world, and here we are having to figure out perhaps a health implication we hadn't ever anticipated.

A great investigative piece Bloomberg News senior investigations reporter Esme Duprez, and of course the editor of Bloomberg Business Week Jail whereber check it out. It's in the current issue. This is Bloomberg.

A great investigative piece Bloomberg News senior investigations reporter Esme Duprez, and of course the editor of Bloomberg Business Week Jail whereber check it out. It's in the current issue. This is Bloomberg.

Mark a journal.

Mark a journal.

How about you let me drive?

How about you let me drive?

Oh no, no, no, no, who's going to drive?

Oh no, no, no, no, who's going to drive?

Honey?

Honey?

Please? How do the riding gravels? Let's mate, I want to drive.

Please? How do the riding gravels? Let's mate, I want to drive.

It's a good question time session.

It's a good question time session.

This is the drive to the Globe.

This is the drive to the Globe.

Dot com for me. I think we'll buy around.

Dot com for me. I think we'll buy around.

On Bloomberg Radio.

On Bloomberg Radio.

All right, everybody, just about eighteen minutes left to go in the Friday trading sessions. We're getting ready to wrap up the day, the week, and actually the third quarter.

All right, everybody, just about eighteen minutes left to go in the Friday trading sessions. We're getting ready to wrap up the day, the week, and actually the third quarter.

And it's going to be looking like a negative end for the S and P five hundred and the Dow Jones. So uh, not necessarily optimism on this rainy Friday, at least here in New York.

And it's going to be looking like a negative end for the S and P five hundred and the Dow Jones. So uh, not necessarily optimism on this rainy Friday, at least here in New York.

No, it's been a wacky third quarter, to be quite honest. So let's get to it. Michael Sheldon is back with US, executive director and chief investment Officer for High Tower RDM Financial Group. He is back with US on Zoom in West Connecticut. Michael how are you.

No, it's been a wacky third quarter, to be quite honest. So let's get to it. Michael Sheldon is back with US, executive director and chief investment Officer for High Tower RDM Financial Group. He is back with US on Zoom in West Connecticut. Michael how are you.

Fine? Thanks? Trying to stay drying up here. It's probably pouring in the city.

Fine? Thanks? Trying to stay drying up here. It's probably pouring in the city.

Also, it's crazy and we're all just, you know, trying to figure out how we're going to ultimately get home. But we'll get through it. We'll get through it, just like we'll get through this year in this market environment. It was an interesting day where I think there was some relief coming off of the core PC number. We know that's an important read for the US Central Bank. And then we had the New York Fed President come out and talking and reminding us about hire for longer, And I think now I almost feel like in Mike Michael mcke or Michael McKey pointed out this idea of I guess we're trying to figure out what higher for longer ultimately means longer? Is it a couple of months, six months a year? How do you see it?

Also, it's crazy and we're all just, you know, trying to figure out how we're going to ultimately get home. But we'll get through it. We'll get through it, just like we'll get through this year in this market environment. It was an interesting day where I think there was some relief coming off of the core PC number. We know that's an important read for the US Central Bank. And then we had the New York Fed President come out and talking and reminding us about hire for longer, And I think now I almost feel like in Mike Michael mcke or Michael McKey pointed out this idea of I guess we're trying to figure out what higher for longer ultimately means longer? Is it a couple of months, six months a year? How do you see it?

Well, I think sort of first looking at the markets, I think September has lived up to its reputation as being a difficult month for the markets, and we had a pretty good first few months of the year, but things that sort of tailed off here recently in terms of Fed policy, we had we've had five and a quarter percent points of rate increases over the past year and a half, and one of the things we wonder about is how much that is really truly filtered into the overall economy. So one thing that's important for investors to remember is we are towards the tail end of this aggressive rate hiking cycle, and I'm not sure if we're going to get one more rate hike or not. That's a possibility. By the way, the government shutdown could basically delay some of the important economic data that the FED needs, so that's something to keep an eye on. But I think we could get one more rate hike and then the FED would probably go on hold. I will tell you that historically, at least looking at the past thirteen rate hiking cycles, once the FED has stopped raising rates, they've actually started cutting rates on average about eight months later. So if the last rate hike was in September, that means the first rate cut would be on May. In May of next year, although this is anything but a normal cycle.

Well, I think sort of first looking at the markets, I think September has lived up to its reputation as being a difficult month for the markets, and we had a pretty good first few months of the year, but things that sort of tailed off here recently in terms of Fed policy, we had we've had five and a quarter percent points of rate increases over the past year and a half, and one of the things we wonder about is how much that is really truly filtered into the overall economy. So one thing that's important for investors to remember is we are towards the tail end of this aggressive rate hiking cycle, and I'm not sure if we're going to get one more rate hike or not. That's a possibility. By the way, the government shutdown could basically delay some of the important economic data that the FED needs, so that's something to keep an eye on. But I think we could get one more rate hike and then the FED would probably go on hold. I will tell you that historically, at least looking at the past thirteen rate hiking cycles, once the FED has stopped raising rates, they've actually started cutting rates on average about eight months later. So if the last rate hike was in September, that means the first rate cut would be on May. In May of next year, although this is anything but a normal cycle.

Yeah, so then if they hike once more, we're looking at maybe July middle of next year. I mean, the question I have for you, though, is the one you raised. Do you think that all of this aggressive tightening has really played into what we're seeing among consumers, among corporate behavior, or do you think there's more that we just haven't seen yet.

Yeah, so then if they hike once more, we're looking at maybe July middle of next year. I mean, the question I have for you, though, is the one you raised. Do you think that all of this aggressive tightening has really played into what we're seeing among consumers, among corporate behavior, or do you think there's more that we just haven't seen yet.

Yeah, that's a tough call. I mean, coming into this year, the consensus opinion and there was every reason to think that we were going to be headed for a downturn in the economy somewhere in the middle of the year. And a lot of those economic statistics, whether you look at the yield curve, leaning Economic Index, that Senior Loan Survey, those sort of indicators still points to some period of weakness. But the economy has been incredibly resilient and really on the heels of the US consumer. We have seen some pockets of weakness in areas like housing and manufacturing, and those are certainly areas to watch, I think in terms of the consumer, that's still really the lynchpin right now. You know, if you look at the monthly numbers, and we'll get out the jobs numbers next Friday, they have been slowing, but the weekly job la claims are close to the lowest levels we've seen in some times. So it is a mixed picture, and I think we need to keep an eye on the consumer.

Yeah, that's a tough call. I mean, coming into this year, the consensus opinion and there was every reason to think that we were going to be headed for a downturn in the economy somewhere in the middle of the year. And a lot of those economic statistics, whether you look at the yield curve, leaning Economic Index, that Senior Loan Survey, those sort of indicators still points to some period of weakness. But the economy has been incredibly resilient and really on the heels of the US consumer. We have seen some pockets of weakness in areas like housing and manufacturing, and those are certainly areas to watch, I think in terms of the consumer, that's still really the lynchpin right now. You know, if you look at the monthly numbers, and we'll get out the jobs numbers next Friday, they have been slowing, but the weekly job la claims are close to the lowest levels we've seen in some times. So it is a mixed picture, and I think we need to keep an eye on the consumer.

I think someone brings up a really good point. Like we talked so long coming off the pandemic about all the labor hoarding that was going on because employees are employers. Excuse me, We're so concerned about being able to find the workers they needed because it was such a tight laborer market. Do you think corporations are in that same situation that they'll hold on of workers a little bit more if they're not quite sure which way we are going to go, rather than quickly make the moves to make sure that their balance sheets look good to investors.

I think someone brings up a really good point. Like we talked so long coming off the pandemic about all the labor hoarding that was going on because employees are employers. Excuse me, We're so concerned about being able to find the workers they needed because it was such a tight laborer market. Do you think corporations are in that same situation that they'll hold on of workers a little bit more if they're not quite sure which way we are going to go, rather than quickly make the moves to make sure that their balance sheets look good to investors.

Yeah, I think you're going to see some of that in terms of the job market. If you look at the JOLT data which comes out that's the job opening in labor turnover numbers. Those come out next Tuesday, So that'll also give us some additional sense on the sort of availability of workers in labor.

Yeah, I think you're going to see some of that in terms of the job market. If you look at the JOLT data which comes out that's the job opening in labor turnover numbers. Those come out next Tuesday, So that'll also give us some additional sense on the sort of availability of workers in labor.

Do you trust me? Let me just break in for a sec. Because we had a great Bloomberg story on the terminal about ghosting, like ghosting in terms of job hostings where people would apply for listings and then like kind of never hear anything or they'd go away, and so it kind of feeds into Michael, the idea that do we trust the labor data that we're seeing from the You know that there's been some debate about is it really painting an accurate picture? So go ahead, continue on.

Do you trust me? Let me just break in for a sec. Because we had a great Bloomberg story on the terminal about ghosting, like ghosting in terms of job hostings where people would apply for listings and then like kind of never hear anything or they'd go away, and so it kind of feeds into Michael, the idea that do we trust the labor data that we're seeing from the You know that there's been some debate about is it really painting an accurate picture? So go ahead, continue on.

That's a good point. About a year ago or a year and a half ago, I did read a report that was put out by the BLS, So there was a lot of talk about with the with the demand for workers so strong, which is really unprecedented in the last twenty years or so. But remember the Jolt state only goes back to about two thousand, so we don't have a multi decade track record for this. But there was a report I believe that the BLS put out saying that they believed the data they were providing was accurate, meaning there was a strong demand for workers that wasn't being filled. So I think we can only go by that. I mean, there are a lot of anecdotal reports out there as well, which we need to watch. There are other things that supply chain issues are improving. We see prices coming down. For example, the core PCE today came down at three point nine percent, which is the lowest since twenty twenty. So parts of the economy are softening up, which it means seen only likely that the demand for workers should slow somewhat compared to what we've seen over the past couple of years coming out of the pandemic.

That's a good point. About a year ago or a year and a half ago, I did read a report that was put out by the BLS, So there was a lot of talk about with the with the demand for workers so strong, which is really unprecedented in the last twenty years or so. But remember the Jolt state only goes back to about two thousand, so we don't have a multi decade track record for this. But there was a report I believe that the BLS put out saying that they believed the data they were providing was accurate, meaning there was a strong demand for workers that wasn't being filled. So I think we can only go by that. I mean, there are a lot of anecdotal reports out there as well, which we need to watch. There are other things that supply chain issues are improving. We see prices coming down. For example, the core PCE today came down at three point nine percent, which is the lowest since twenty twenty. So parts of the economy are softening up, which it means seen only likely that the demand for workers should slow somewhat compared to what we've seen over the past couple of years coming out of the pandemic.

Do you think that companies have done enough to prepare for this would be recession or downturn that even if we get sort of the official definition of a recession, you know that they're prepared and that the earnings recession is potentially over.

Do you think that companies have done enough to prepare for this would be recession or downturn that even if we get sort of the official definition of a recession, you know that they're prepared and that the earnings recession is potentially over.

Well, that's a good question. I think you did see some of about six months to a year ago. You did see, especially some of the larger technology companies start to take the initiative and downsize. They probably hire too aggressively coming out of out of COVID, and they started to downsize some of their some of their hirings, and that's help profitability. So margins will certainly be important to watch in terms of the markets. I think one of the most important things going forward is earnings This year are currently forecasts to be flatish, but looking ahead to twenty twenty four and twenty five, corporate profits are currently forecast to jump double digits. So we do have some important headwinds right now from higher interest rates, the dollar and oil prices, but I will keep a close eye on corporate profits because stocks tend to follow the direction of profits, at least over time.

Well, that's a good question. I think you did see some of about six months to a year ago. You did see, especially some of the larger technology companies start to take the initiative and downsize. They probably hire too aggressively coming out of out of COVID, and they started to downsize some of their some of their hirings, and that's help profitability. So margins will certainly be important to watch in terms of the markets. I think one of the most important things going forward is earnings This year are currently forecasts to be flatish, but looking ahead to twenty twenty four and twenty five, corporate profits are currently forecast to jump double digits. So we do have some important headwinds right now from higher interest rates, the dollar and oil prices, but I will keep a close eye on corporate profits because stocks tend to follow the direction of profits, at least over time.

I think I agree with you. That's a fundamental that really will drive potentially investor decisions. Having said that, b of A Michael out with their latest when it comes to global investment flows, global equities had inflows driven by US stocks, while all other ASEAD classes severed outflows. This is for the week ending two September twenty seventh, again from BAA, and this will also included the first withdrawals for bonds in twenty seven weeks. Just thirty seconds. What's your investment thesis here and play well.

I think I agree with you. That's a fundamental that really will drive potentially investor decisions. Having said that, b of A Michael out with their latest when it comes to global investment flows, global equities had inflows driven by US stocks, while all other ASEAD classes severed outflows. This is for the week ending two September twenty seventh, again from BAA, and this will also included the first withdrawals for bonds in twenty seven weeks. Just thirty seconds. What's your investment thesis here and play well.

I think on the fixed income side, if you haven't already extended your duration, you want to start thinking about that because interest rates are the highest level in several years. Money market rates tend to follow the direction of the Fed funds rates, so ultimately when the Fed cuts rates down the road, you want to start adding some duration to your portfolios to lock in these higher yields. And that's an important part of your portfolio. You know that goes along with stocks over time.

I think on the fixed income side, if you haven't already extended your duration, you want to start thinking about that because interest rates are the highest level in several years. Money market rates tend to follow the direction of the Fed funds rates, so ultimately when the Fed cuts rates down the road, you want to start adding some duration to your portfolios to lock in these higher yields. And that's an important part of your portfolio. You know that goes along with stocks over time.

All right, But you're not ruling out stocks ten seconds now.

All right, But you're not ruling out stocks ten seconds now.

I think we're sort of an arrange bound market right now, probably forty two to forty three hundred on the low side. Well, we have some headwinds right now. Keep an eye on the SED. We're starting the FEDS towards the end of its rate cycle. Interest rates will ultimately peak, and aflation is coming down.

I think we're sort of an arrange bound market right now, probably forty two to forty three hundred on the low side. Well, we have some headwinds right now. Keep an eye on the SED. We're starting the FEDS towards the end of its rate cycle. Interest rates will ultimately peak, and aflation is coming down.

All right, Have a dry and safe weekend. Michael Sheldon, Executive Director, chief Investment Officer at High Tower RDM Financial Group on zoom in Westport, Connecticut.

All right, Have a dry and safe weekend. Michael Sheldon, Executive Director, chief Investment Officer at High Tower RDM Financial Group on zoom in Westport, Connecticut.

This is the Bloomberg Business Week Podcast, a little Apple, Spotify, and anywhere else you get your podcast. Listen live weekday afternoons from three to six Eastern on Bloomberg dot com, the iHeartRadio app, tune In, and the Bloomberg Business App. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal alone.

This is the Bloomberg Business Week Podcast, a little Apple, Spotify, and anywhere else you get your podcast. Listen live weekday afternoons from three to six Eastern on Bloomberg dot com, the iHeartRadio app, tune In, and the Bloomberg Business App. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal alone.