Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business Wait inside from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.

Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business Wait inside from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.

All right, so let's get to our next guest, and let's talk a little bit about the economy, the soft landing housing jobs and to Mark Sandy, Moody's analytics chief economist who joins us out right here in New York City. Mark, good to have you here with Matt and myself. We were just talking with our Christopher Cain on earning, saying very healthy, very robust. He talked about eighty percent of S and P five hundred companies above their two hundred day moving average. Does that square with what you are seeing in terms of the economy.

All right, so let's get to our next guest, and let's talk a little bit about the economy, the soft landing housing jobs and to Mark Sandy, Moody's analytics chief economist who joins us out right here in New York City. Mark, good to have you here with Matt and myself. We were just talking with our Christopher Cain on earning, saying very healthy, very robust. He talked about eighty percent of S and P five hundred companies above their two hundred day moving average. Does that square with what you are seeing in terms of the economy.

Yeah, well that's very good. Good to hear.

Yeah, well that's very good. Good to hear.

I'm glad to hear that businesses are doing well, earnings are strong.

I'm glad to hear that businesses are doing well, earnings are strong.

Yeah.

Yeah.

I think that it's consistent with continued strong growth. You know, economists, look a GDP, that's the value all the things that we produce that's up three percent year over year through the second quarter of twenty twenty four.

I think that it's consistent with continued strong growth. You know, economists, look a GDP, that's the value all the things that we produce that's up three percent year over year through the second quarter of twenty twenty four.

Things are slowing.

Things are slowing.

Obviously, the job market is throttling back, but so far that's mostly by design. That the Reserve has been working hard to cool things off, to get inflation back in the bottle, and I think they've succeeded. Hopefully they start lowering interest rates here and keep the economy moving.

Obviously, the job market is throttling back, but so far that's mostly by design. That the Reserve has been working hard to cool things off, to get inflation back in the bottle, and I think they've succeeded. Hopefully they start lowering interest rates here and keep the economy moving.

Forward, but yeah, I think probably so.

Forward, but yeah, I think probably so.

I will say, you know, businesses have, certainly large businesses have been doing very very well. Corporate profitability economy wide is about as good as it's ever been.

I will say, you know, businesses have, certainly large businesses have been doing very very well. Corporate profitability economy wide is about as good as it's ever been.

I mean, margins are really extraordinary.

I mean, margins are really extraordinary.

And then that's obviously, you know, in part what's driving the equity market up to this point in time.

And then that's obviously, you know, in part what's driving the equity market up to this point in time.

Mark, First of all, great to see you. I really appreciate you coming on the program. It's been a while since I talk to you. What about the consumer. We had report yesterday from trip Advisor not making as many bookings as people expected. The same was true with Airbnb. Disney came out this morning and said there's not as much growth at their parks, although people are staying home and you know, ordering Disney Plus more often. Is the consumer in trouble here? Too much credit card debt from Taylor Swift last season. I mean, what's going on?

Mark, First of all, great to see you. I really appreciate you coming on the program. It's been a while since I talk to you. What about the consumer. We had report yesterday from trip Advisor not making as many bookings as people expected. The same was true with Airbnb. Disney came out this morning and said there's not as much growth at their parks, although people are staying home and you know, ordering Disney Plus more often. Is the consumer in trouble here? Too much credit card debt from Taylor Swift last season. I mean, what's going on?

And it's good to hear your voice, Matt, Yeah, it's good to be on with you. Well, if you take consumers as a whole, you know, the consumer elephants is a big thing, and a lot depends on which part of the plant you're touching. But if you look at the elephant as a whole, it's good. You know, real consumer spending growth that's after inflation, consumers spending all in travel, the things that you've been talking about, what people are spending on streaming, you know, all the things that they're buying for their homes, groceries, everything up to and a half percent year over year, I mean that and that's been rock solid, amazingly so for the last was two and a half to three years. And that's kind of right down the strike zone, right, That's exactly what you want to see. That's strong enough growth to keep the economy moving forward, but not too strong to fain those inflationary pressures. Now, if you touch different parts of the elephant, you start getting you know, a different sense of things. I mean, I do think lower income households are struggling, you know, under the high interest rates and the credit card debt and consumer finance loans. They took on back a couple three years ago when you know, inflation was raging and they borrowed against their cards to supplement their income to maintain their purchasing power, and now they're you know, the.

And it's good to hear your voice, Matt, Yeah, it's good to be on with you. Well, if you take consumers as a whole, you know, the consumer elephants is a big thing, and a lot depends on which part of the plant you're touching. But if you look at the elephant as a whole, it's good. You know, real consumer spending growth that's after inflation, consumers spending all in travel, the things that you've been talking about, what people are spending on streaming, you know, all the things that they're buying for their homes, groceries, everything up to and a half percent year over year, I mean that and that's been rock solid, amazingly so for the last was two and a half to three years. And that's kind of right down the strike zone, right, That's exactly what you want to see. That's strong enough growth to keep the economy moving forward, but not too strong to fain those inflationary pressures. Now, if you touch different parts of the elephant, you start getting you know, a different sense of things. I mean, I do think lower income households are struggling, you know, under the high interest rates and the credit card debt and consumer finance loans. They took on back a couple three years ago when you know, inflation was raging and they borrowed against their cards to supplement their income to maintain their purchasing power, and now they're you know, the.

Interest rates are very high. I mean, I just saw this the other day.

Interest rates are very high. I mean, I just saw this the other day.

I didn't realize that credit card interest rates at twenty two percent or the highest they've ever been in the data that we have from the Reserve. So you know, that is a lot of pressure. And they those households blew through their access saving early on, you know, after the pandemic. So that part of the consumer elephant is is soft and weak, and you can kind of hear it and feel it in some of the earning announcements and what CEOs the consumer product companies are saying, but the high income households lowing middle income households, no problem, They're fine.

I didn't realize that credit card interest rates at twenty two percent or the highest they've ever been in the data that we have from the Reserve. So you know, that is a lot of pressure. And they those households blew through their access saving early on, you know, after the pandemic. So that part of the consumer elephant is is soft and weak, and you can kind of hear it and feel it in some of the earning announcements and what CEOs the consumer product companies are saying, but the high income households lowing middle income households, no problem, They're fine.

Just one last thing to say.

Just one last thing to say.

The folks in the bottom third of the incland distribution typically account for about fifteen percent of the spending. The folks in the top third of the distribution account for fifty five percent of the spending. So you know, I don't think the economy can flourish, and there's all kinds of political and social implications of folks in the bottom part of the distribution are struggling. But the economy can move forward, and it is I don't want to. I just don't want the last thing and I'll stop. Everything I said is positive, but you know, things are weakening. The high interest rates are doing damage. I think it's time for the Federal Reserve to start lowering interest rates and lowering them quickly and normalizing rates. And they've been late to the game. They've made a misjudgment here, so they have to get moving. But you know, at least so far, the consumer the economy is hanging tough.

The folks in the bottom third of the incland distribution typically account for about fifteen percent of the spending. The folks in the top third of the distribution account for fifty five percent of the spending. So you know, I don't think the economy can flourish, and there's all kinds of political and social implications of folks in the bottom part of the distribution are struggling. But the economy can move forward, and it is I don't want to. I just don't want the last thing and I'll stop. Everything I said is positive, but you know, things are weakening. The high interest rates are doing damage. I think it's time for the Federal Reserve to start lowering interest rates and lowering them quickly and normalizing rates. And they've been late to the game. They've made a misjudgment here, so they have to get moving. But you know, at least so far, the consumer the economy is hanging tough.

Right credit credit card interest rates are the highest these ever been, they've ever been. Mark just points out the New York Fed put out today total credit card debt ticked up to one point one four trillion dollars and that is a new record high as well.

Right credit credit card interest rates are the highest these ever been, they've ever been. Mark just points out the New York Fed put out today total credit card debt ticked up to one point one four trillion dollars and that is a new record high as well.

Well, And we had a story I think it was yesterday that talked about more folks looking to tap their home equity. I mean, maybe just because they can at this point, but they are looking to do it, and they're not moving around. We know that already. Having said that, mark so recession off the table in your view. I mean, obviously there might be some in the lower income strata that already feel like they're in a recession because they're paying more and they've got either higher credit card debt and it's much more troublesome. But having said that, a technical recession, do we avoid that or at some point we have to touch it. You've seen lots of market cycles.

Well, And we had a story I think it was yesterday that talked about more folks looking to tap their home equity. I mean, maybe just because they can at this point, but they are looking to do it, and they're not moving around. We know that already. Having said that, mark so recession off the table in your view. I mean, obviously there might be some in the lower income strata that already feel like they're in a recession because they're paying more and they've got either higher credit card debt and it's much more troublesome. But having said that, a technical recession, do we avoid that or at some point we have to touch it. You've seen lots of market cycles.

Yeah, I've seen many many market cycles.

Yeah, I've seen many many market cycles.

We all have.

We all have.

Well, look, as long as the FED continues to hold to a five and a half percent close to thungbrate target, we can't exhale.

Well, look, as long as the FED continues to hold to a five and a half percent close to thungbrate target, we can't exhale.

The economy is under pressure.

The economy is under pressure.

Something can break, and when it breaks, it's gonna break quickly, and it's going to be very difficult to fix it. You know, I've heard the word we can fix it. Okay, Well, if it breaks, it's going to be very hard to fix it. So they need to move now. Everything indicates that they're going to. And in fact, if there's a silver lining in this market mess that we've seen over the last week, is it's gonna light a fire under policy makers and I think they're gonna cut and I wouldn't be surprised they cut a half a point at the September meeting and then be a bit more aggressive glowering.

Something can break, and when it breaks, it's gonna break quickly, and it's going to be very difficult to fix it. You know, I've heard the word we can fix it. Okay, Well, if it breaks, it's going to be very hard to fix it. So they need to move now. Everything indicates that they're going to. And in fact, if there's a silver lining in this market mess that we've seen over the last week, is it's gonna light a fire under policy makers and I think they're gonna cut and I wouldn't be surprised they cut a half a point at the September meeting and then be a bit more aggressive glowering.

Rates after that.

Rates after that.

If they do that, we're golden. We should be fined. If they don't do that, then we got a problem, and I do. I would say at this point in time, just to put a number to it, to get context, I say, there's a one in three probability economy that enters into recession at some point in the next year. That's too high. It's uncomfortably behind. In a typical economy should be about half that. So it's elevated, and it's going to stay elevated, and it's going to continue to rise until the Fed actually, you know, starts the con interest rates.

If they do that, we're golden. We should be fined. If they don't do that, then we got a problem, and I do. I would say at this point in time, just to put a number to it, to get context, I say, there's a one in three probability economy that enters into recession at some point in the next year. That's too high. It's uncomfortably behind. In a typical economy should be about half that. So it's elevated, and it's going to stay elevated, and it's going to continue to rise until the Fed actually, you know, starts the con interest rates.

Well, what do you think the terminal rate should look like. I was a little bit surprised yesterday when I typed in FDTR index on my terminal and looked at the Federal Funds Target rate. I had forgotten that they raised rates so quickly in twenty twenty two. They were, you know, not only they started with twenty five one to fifty, and then three or four seventy five basis point consecutive seventy five basis point increases and another fifty So you expect a fifty basis point cut in September and then what after that? Like, where are they going?

Well, what do you think the terminal rate should look like. I was a little bit surprised yesterday when I typed in FDTR index on my terminal and looked at the Federal Funds Target rate. I had forgotten that they raised rates so quickly in twenty twenty two. They were, you know, not only they started with twenty five one to fifty, and then three or four seventy five basis point consecutive seventy five basis point increases and another fifty So you expect a fifty basis point cut in September and then what after that? Like, where are they going?

Yeah?

Yeah?

Well, I think a lot of debate, reasonable debate about what the so called equilibrium rate is. You know that rate are star that rate at which policies neither supporting restraining growth. But I think we can state with confidence it's not five and a half percent.

Well, I think a lot of debate, reasonable debate about what the so called equilibrium rate is. You know that rate are star that rate at which policies neither supporting restraining growth. But I think we can state with confidence it's not five and a half percent.

I probably you know it's high.

I probably you know it's high.

It's migrated higher for lots of different reasons, one of which is that the economy's more rate insensitive and has been times passed because households and businesses have done a pretty good job of locking in the previously record low interest rates, so it hasn't flowed through of higher interest expense in aggregate. I mean again putting a side lower income households in some businesses on the end of the distribution, so I'd say four percent. So if I were them, I'd be trying to get the Bungoie target down from just south of five and a half percent whereas today to four percent very quickly, you know, by the early next year, and then take a look around, Henk, at that point, if everything's kind of sticking the script hanging together, take a look around.

It's migrated higher for lots of different reasons, one of which is that the economy's more rate insensitive and has been times passed because households and businesses have done a pretty good job of locking in the previously record low interest rates, so it hasn't flowed through of higher interest expense in aggregate. I mean again putting a side lower income households in some businesses on the end of the distribution, so I'd say four percent. So if I were them, I'd be trying to get the Bungoie target down from just south of five and a half percent whereas today to four percent very quickly, you know, by the early next year, and then take a look around, Henk, at that point, if everything's kind of sticking the script hanging together, take a look around.

See what's going on.

See what's going on.

You see how the economy is digesting all that, See what's happening with inflation. And then at the end of the day, my sense is the equilibrium rate out in the middle part of the decade twenty twenty six twenty seven is probably around three percent. It's going to migrate lower as liabilities the interest rate, household and corporate liabilities are just higher. And then that's happening, you know, over time. So that's kind of the path I.

You see how the economy is digesting all that, See what's happening with inflation. And then at the end of the day, my sense is the equilibrium rate out in the middle part of the decade twenty twenty six twenty seven is probably around three percent. It's going to migrate lower as liabilities the interest rate, household and corporate liabilities are just higher. And then that's happening, you know, over time. So that's kind of the path I.

Think they should take.

Think they should take.

It feels more likely that that's the path they will take given recent events.

It feels more likely that that's the path they will take given recent events.

But we'll see.

But we'll see.

What's the role of JP at Jackson Hall come August later August, Well, if I or.

What's the role of JP at Jackson Hall come August later August, Well, if I or.

Him, i'd send a very clear message. You know, we're cutting rights. It's just a debate now to how much. And after September, you know how much we need to cut over the course of the next few meetings. Just delay any concerns like folks like me who are saying, you know, you got to get moving here, and if you don't something, something's.

Him, i'd send a very clear message. You know, we're cutting rights. It's just a debate now to how much. And after September, you know how much we need to cut over the course of the next few meetings. Just delay any concerns like folks like me who are saying, you know, you got to get moving here, and if you don't something, something's.

Going to go off the rails.

Going to go off the rails.

So I think that's got to be the He's gonna make this very very clear, and I hopefully the board can sing from the same hymn book, you know, kind of say, now there's lots of different views and that you know, it's okay that comes through, But generally when you listen to the melody, it's got to sound like everyone's singing the same melody and that they're going to be cutting interest rates here. And if they do that, then I think we'll be just fine. You know, the economy should be able to navigate forward and to avoid a recession. If they don't do that, he doesn't send if he sends an ambivalent signal.

So I think that's got to be the He's gonna make this very very clear, and I hopefully the board can sing from the same hymn book, you know, kind of say, now there's lots of different views and that you know, it's okay that comes through, But generally when you listen to the melody, it's got to sound like everyone's singing the same melody and that they're going to be cutting interest rates here. And if they do that, then I think we'll be just fine. You know, the economy should be able to navigate forward and to avoid a recession. If they don't do that, he doesn't send if he sends an ambivalent signal.

Maybe yet, maybe we will, maybe we won't.

Maybe yet, maybe we will, maybe we won't.

And there's a lot of discordant kind of views coming from different board members. And I think what we're seeing in the markets are you know, the extreme volatility and the red on the screen is going to continue.

And there's a lot of discordant kind of views coming from different board members. And I think what we're seeing in the markets are you know, the extreme volatility and the red on the screen is going to continue.

Mark, we're really sqeezed for time twenty seconds. What's the one thing you think the Bloomberg audience and investors should keep a watch on. Really a key metric for you, just quickly.

Mark, we're really sqeezed for time twenty seconds. What's the one thing you think the Bloomberg audience and investors should keep a watch on. Really a key metric for you, just quickly.

Initial claims for unemployment insurance. You know it comes out every Thursday morning. You know it's it had been around tuoner k right now, it's just south of two and fifty k. Anything over two and fifty k yellow flares go off. Anything over two seventy five three hundred, then we got a problem. Recession looks more likely than not, so i'd watched that carefully.

Initial claims for unemployment insurance. You know it comes out every Thursday morning. You know it's it had been around tuoner k right now, it's just south of two and fifty k. Anything over two and fifty k yellow flares go off. Anything over two seventy five three hundred, then we got a problem. Recession looks more likely than not, so i'd watched that carefully.

We will.

We will.

Indeed, hey, listen, thank you so much. We both appreciate it. Matt and I Mark Sandy Moody's analytics chief economists joining us.

Indeed, hey, listen, thank you so much. We both appreciate it. Matt and I Mark Sandy Moody's analytics chief economists joining us.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Apple card Play and then Bright Auto with a Bloomberg Business app, or watch us live on YouTube.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Apple card Play and then Bright Auto with a Bloomberg Business app, or watch us live on YouTube.

You know how we said super Micro was the worst performer, and I think both the S and P five hundred and Nasdaq one hundred number one decliner. Well, the second worst performer in the S and P and the Nasdaq one hundred is Airbnb.

You know how we said super Micro was the worst performer, and I think both the S and P five hundred and Nasdaq one hundred number one decliner. Well, the second worst performer in the S and P and the Nasdaq one hundred is Airbnb.

Hanging on, I'm writing this down, are you. I'm gonna use these with Romain later. Yeah, right exactly.

Hanging on, I'm writing this down, are you. I'm gonna use these with Romain later. Yeah, right exactly.

He's going to do his decliners, all right. So let's get to it, because Airbnb shares Man, they are definitely selling off the most ever. They reported their third consecutive quarter in which it offered a downbeat forecast to investors, also warned of slowing demand from US vacationers. So let's get into what you really need to know and what's the outlook. Bloomberg Intelligence senior Tech Industry alas Man Deep sing He's back with us here in our Bloomberg Interactive Brokers studio. It doesn't feel good at all. But how do you see Investors certainly don't like it.

He's going to do his decliners, all right. So let's get to it, because Airbnb shares Man, they are definitely selling off the most ever. They reported their third consecutive quarter in which it offered a downbeat forecast to investors, also warned of slowing demand from US vacationers. So let's get into what you really need to know and what's the outlook. Bloomberg Intelligence senior Tech Industry alas Man Deep sing He's back with us here in our Bloomberg Interactive Brokers studio. It doesn't feel good at all. But how do you see Investors certainly don't like it.

Well, the guidance was weak, and you know with in Airbnb, the risks for the longest time has been saturation, even though you know this could be tied to macro and consumers slowing down. They talked about, you know, the booking window shortening because people are booking travel at the last minute. But when you think about airb as a vacation rentals company, they operate in a market which is supposed to be much smaller than your overall lodging travel market. And that's the part that investors are not clear on. How much runway do they have in terms of taking share from traditional hotels, because they clearly had some sort of a pull forward during the pandemic, and you know, in the couple of years after that, and now they are running into tougher comps. They're not acquiring as much supply as they were in the last two years. So it's really about what is it beyond alternative accommodations can they do? And they're still a single product company's.

Well, the guidance was weak, and you know with in Airbnb, the risks for the longest time has been saturation, even though you know this could be tied to macro and consumers slowing down. They talked about, you know, the booking window shortening because people are booking travel at the last minute. But when you think about airb as a vacation rentals company, they operate in a market which is supposed to be much smaller than your overall lodging travel market. And that's the part that investors are not clear on. How much runway do they have in terms of taking share from traditional hotels, because they clearly had some sort of a pull forward during the pandemic, and you know, in the couple of years after that, and now they are running into tougher comps. They're not acquiring as much supply as they were in the last two years. So it's really about what is it beyond alternative accommodations can they do? And they're still a single product company's.

So when you say saturation, do you mean basically everybody who was going to rent out her house on airbnb already has rented out her house on Airbnb. Everybody who did decide to rent a few apartments and do an Airbnb business has already done that, and there's just not a lot of growth left.

So when you say saturation, do you mean basically everybody who was going to rent out her house on airbnb already has rented out her house on Airbnb. Everybody who did decide to rent a few apartments and do an Airbnb business has already done that, and there's just not a lot of growth left.

Yeah, And also from a user perspective, so think of, you know, how you segment the demographics who use airbnb. Not everyone uses Airbnb, And I think what they're realizing is not everyone will use airbnb, just because there are certain people who will still prefer hotels. So the use cases for alternative accommodations are those high end rooms for you know, larger groups, and that's where it gets used more and more.

Yeah, And also from a user perspective, so think of, you know, how you segment the demographics who use airbnb. Not everyone uses Airbnb, And I think what they're realizing is not everyone will use airbnb, just because there are certain people who will still prefer hotels. So the use cases for alternative accommodations are those high end rooms for you know, larger groups, and that's where it gets used more and more.

And well, you mean, like if I'm going to the Masters with four of my buddies. We rent some big McMansion right outside of US.

And well, you mean, like if I'm going to the Masters with four of my buddies. We rent some big McMansion right outside of US.

So that's the typical Airbnb use case. But beyond that, I think the corporate use case isn't there, and so they need to layer on new products. They have launch experiences, they have launched rooms, but nothing has really worked for them in terms of those incremental revenues.

So that's the typical Airbnb use case. But beyond that, I think the corporate use case isn't there, and so they need to layer on new products. They have launch experiences, they have launched rooms, but nothing has really worked for them in terms of those incremental revenues.

So do they have to become more traditional like a hotel company.

So do they have to become more traditional like a hotel company.

I mean, they did acquire a company hotels tonight. But when people think about Airbnb, they're branding is it's vacation rentals, alternative accommodations. And sometimes you know, it's good to have a brand because it saves us sales and marketing expenses. But also people associate certain type of you know, image, And that's.

I mean, they did acquire a company hotels tonight. But when people think about Airbnb, they're branding is it's vacation rentals, alternative accommodations. And sometimes you know, it's good to have a brand because it saves us sales and marketing expenses. But also people associate certain type of you know, image, And that's.

How much of this is a problem with the consumer man deep because we got a string of bad consumer earnings. Okay, we we were reminded a little bit earlier that overall earning season has been good. Overall companies of the four hundred and I think seventy who've reported so far out of five hundred, earnings are up eleven percent, twelve.

How much of this is a problem with the consumer man deep because we got a string of bad consumer earnings. Okay, we we were reminded a little bit earlier that overall earning season has been good. Overall companies of the four hundred and I think seventy who've reported so far out of five hundred, earnings are up eleven percent, twelve.

Percent, beating expectations.

Percent, beating expectations.

Yeah, well they always beat I'm talking about growth quarter over the same quarter last year thirteen percent of the expected final count. But right now on EA GO I can see eleven percent so far anyway, it's good, right, But what we got yesterday with trip Advisor, which is in a similar business, bookings are down. We got Airbnb bookings are down. Disney came out this morning and said, you know what, not as many people are coming to our parks. They're getting Disney Plus and Hulu, but they're not necessarily taking the big play and going to Disney World. So is it the consumer that's really shaky here?

Yeah, well they always beat I'm talking about growth quarter over the same quarter last year thirteen percent of the expected final count. But right now on EA GO I can see eleven percent so far anyway, it's good, right, But what we got yesterday with trip Advisor, which is in a similar business, bookings are down. We got Airbnb bookings are down. Disney came out this morning and said, you know what, not as many people are coming to our parks. They're getting Disney Plus and Hulu, but they're not necessarily taking the big play and going to Disney World. So is it the consumer that's really shaky here?

It is, And look, the trends are decelerating in terms of top line growth, in terms of estimate revision, So in the case of Airbnb, you will see negative revisions for EPs growth in twenty twenty five. And that's where it's hard to sustain that kind of multiple. So if you're trading at the premium multiple, which Airbnb is, it's hard to sustain that multiple if your estimates are going it revis downward. And I think there's nothing wrong with Airbnb. It's got a great mode, it's a great business. It's just that saturation aspect and the premium multiple is what's driving those times?

It is, And look, the trends are decelerating in terms of top line growth, in terms of estimate revision, So in the case of Airbnb, you will see negative revisions for EPs growth in twenty twenty five. And that's where it's hard to sustain that kind of multiple. So if you're trading at the premium multiple, which Airbnb is, it's hard to sustain that multiple if your estimates are going it revis downward. And I think there's nothing wrong with Airbnb. It's got a great mode, it's a great business. It's just that saturation aspect and the premium multiple is what's driving those times?

So reset maybe needed on expectations among investors. Having said that, Airbnb CEO Brian Chesky responded to the company's disappointing outlook and the plunge and the share price on x He said, I'm confident it's a good time to buy.

So reset maybe needed on expectations among investors. Having said that, Airbnb CEO Brian Chesky responded to the company's disappointing outlook and the plunge and the share price on x He said, I'm confident it's a good time to buy.

He is.

He is.

That's wa Wait, so he likes his own companies shocking, amazing.

That's wa Wait, so he likes his own companies shocking, amazing.

He should be announcing a bit buy back. How about that?

He should be announcing a bit buy back. How about that?

Well, I mean, how much money do they have to play around? What's their cash flow look like?

Well, I mean, how much money do they have to play around? What's their cash flow look like?

It's it's a great business model, thirty percent free cash flow margins. So really, out of all the marketplaces, Airbnb is one of the better marketplace business models. The two sided marketplace as opposed to three sided. Three sided your margins are much lower.

It's it's a great business model, thirty percent free cash flow margins. So really, out of all the marketplaces, Airbnb is one of the better marketplace business models. The two sided marketplace as opposed to three sided. Three sided your margins are much lower.

Than nice confusing me, dude, So wait two sided? So wait? Uber is that three sided?

Than nice confusing me, dude, So wait two sided? So wait? Uber is that three sided?

Uber is a right?

Uber is a right?

Sharing is two sided? Two side? Their delivery is three sided because there you have the restaurant, a delivery guy, and Uber, whereas in the case of Airbnb, it's just the host and the guest, and there are the intermediaries.

Sharing is two sided? Two side? Their delivery is three sided because there you have the restaurant, a delivery guy, and Uber, whereas in the case of Airbnb, it's just the host and the guest, and there are the intermediaries.

Thank you for explaining that.

Thank you for explaining that.

Wait, I've never heard it that way. You're talking about kind of like the touch points.

Wait, I've never heard it that way. You're talking about kind of like the touch points.

Basically, yeah, exactly.

Basically, yeah, exactly.

This is why we have bi analysts on I know what is why we have man those really cool function everything.

This is why we have bi analysts on I know what is why we have man those really cool function everything.

If you're looking, if you want to know who covers Uber, you can have Uber equity and write BIC. I go and you know, and you find the primer and you see the analyst, and I do it differently.

If you're looking, if you want to know who covers Uber, you can have Uber equity and write BIC. I go and you know, and you find the primer and you see the analyst, and I do it differently.

I just like pull up the ticker and then I pull up stories.

I just like pull up the ticker and then I pull up stories.

All right, that works too, I guess.

All right, that works too, I guess.

So all right, anyway, very cool. What should we have on our radar when it comes to Airbnb? Like kind of keep going into I guess the next quarter at this current quarter.

So all right, anyway, very cool. What should we have on our radar when it comes to Airbnb? Like kind of keep going into I guess the next quarter at this current quarter.

I mean, look all the marketplace companies have reported. Now Uber had a good print, Door Dash had a good print, but the other ones didn't. And so it's more about, you know what sort of guidance we get from consumer focused company and don't underestimate Jennaai's application.

I mean, look all the marketplace companies have reported. Now Uber had a good print, Door Dash had a good print, but the other ones didn't. And so it's more about, you know what sort of guidance we get from consumer focused company and don't underestimate Jennaai's application.

To marketplace interesting.

To marketplace interesting.

Brian Chesky did mention a lot of the UI for these marketplaces, even for booking travel, will change as a result of generative AI. Now, if he shows something like that, I think that will be very exciting for investors to see that Airbnb is at the cutting edge of driving that change when it comes to leveraging generative AI.

Brian Chesky did mention a lot of the UI for these marketplaces, even for booking travel, will change as a result of generative AI. Now, if he shows something like that, I think that will be very exciting for investors to see that Airbnb is at the cutting edge of driving that change when it comes to leveraging generative AI.

All right, pretty cool, pretty cool stuff. Thank you, Man Deep as always, Man Deep Saying, senior tech industry analyst at Bloomberg Intelligence joining us in studio. I'm just taking a quick check at Airbnb, which will be one of your decliners. I'm assuming, yeah, I'm fourteen percent.

All right, pretty cool, pretty cool stuff. Thank you, Man Deep as always, Man Deep Saying, senior tech industry analyst at Bloomberg Intelligence joining us in studio. I'm just taking a quick check at Airbnb, which will be one of your decliners. I'm assuming, yeah, I'm fourteen percent.

Do I mean a super micro super micro?

Do I mean a super micro super micro?

We'll pick out another one for you.

We'll pick out another one for you.

You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Eastern on Apple car Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa, playing Bloomberg eleven thirty Carol Masser.

You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Eastern on Apple car Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa, playing Bloomberg eleven thirty Carol Masser.

Along with Matt Miller, who is in for Tim Stenovik. Right here on Bloomberg Business Week, I feel like we're sharing our war stories of being like let go or almost.

Along with Matt Miller, who is in for Tim Stenovik. Right here on Bloomberg Business Week, I feel like we're sharing our war stories of being like let go or almost.

Like going through layoffs, going through layoffs. You know, pink slip parties puts too much of a positive spin on it, but it's not. That's when I first that's when I first encountered real layoffs because I started this job during the dot com bubble burst.

Like going through layoffs, going through layoffs. You know, pink slip parties puts too much of a positive spin on it, but it's not. That's when I first that's when I first encountered real layoffs because I started this job during the dot com bubble burst.

And that's it.

And that's it.

Yeah.

Yeah.

I remember friends of mine were all sort of commiserating with each other over getting fired from their first jobs. Unfortunately I was at Bloomberg.

I remember friends of mine were all sort of commiserating with each other over getting fired from their first jobs. Unfortunately I was at Bloomberg.

Okay, anyway, So that gets us to a story that is among the most red on the bloem. It's a BusinessWeek story. Buy our workshift team. It's about the true cost of layoffs. It is, as I said, among our most read today. Let's get into it with Matthew Boyle. Matt, by the way, is Bloomberg new senior Management workplace reporter. He joins us here in studio.

Okay, anyway, So that gets us to a story that is among the most red on the bloem. It's a BusinessWeek story. Buy our workshift team. It's about the true cost of layoffs. It is, as I said, among our most read today. Let's get into it with Matthew Boyle. Matt, by the way, is Bloomberg new senior Management workplace reporter. He joins us here in studio.

All right.

All right.

I am curious though, why you guys are doing this story now. Is it because of some of the softness that we continue to see in the labor market.

I am curious though, why you guys are doing this story now. Is it because of some of the softness that we continue to see in the labor market.

I mean I started work on this story six months ago. You did, Yeah, when layoffs were come, I mean layoffs when have they not been, you know, coming hot and heavy, and just with Intel recently and Dell as well. But you see all these pressure releases, You read the memos from the CEOs, you know, streamlining efficiency blah blah blah, and then the SEC filing goes out and they say we are taking a charge of X million for Severn. So I'm like, okay, it's got to be more to it than that, right, what's the true cost of a layoff? Because I've been laid off and we've you know, either you've been laid off or you've done a layoff. I think all of our listeners are falling to one of those two categories. And you see what happens to the survivors, the people who are still there. You know, they're like zombies at times. They're worried about another layoff coming. They now have to do the work of two or three people, So you know, your engagement goes down, your morale goes down. You're kind of looking at the door, like maybe I should be down the street taking a job somewhere else. Yeah, a lot of the other people because we know so we know that output declines, we know that quitting goes up, but how much does this actually cost? We just kind of see these as like intangibles, like, well, it happens, but you know, we had to do this. So I'm like, somebody must put some numbers behind this. So I dug around and finally found you know, I found an actuary at the Department of Labor. I found academics who have studied this. I've found a guy who studied two hundred layoffs and figured out how much did the quitting rate increase after Let's.

I mean I started work on this story six months ago. You did, Yeah, when layoffs were come, I mean layoffs when have they not been, you know, coming hot and heavy, and just with Intel recently and Dell as well. But you see all these pressure releases, You read the memos from the CEOs, you know, streamlining efficiency blah blah blah, and then the SEC filing goes out and they say we are taking a charge of X million for Severn. So I'm like, okay, it's got to be more to it than that, right, what's the true cost of a layoff? Because I've been laid off and we've you know, either you've been laid off or you've done a layoff. I think all of our listeners are falling to one of those two categories. And you see what happens to the survivors, the people who are still there. You know, they're like zombies at times. They're worried about another layoff coming. They now have to do the work of two or three people, So you know, your engagement goes down, your morale goes down. You're kind of looking at the door, like maybe I should be down the street taking a job somewhere else. Yeah, a lot of the other people because we know so we know that output declines, we know that quitting goes up, but how much does this actually cost? We just kind of see these as like intangibles, like, well, it happens, but you know, we had to do this. So I'm like, somebody must put some numbers behind this. So I dug around and finally found you know, I found an actuary at the Department of Labor. I found academics who have studied this. I've found a guy who studied two hundred layoffs and figured out how much did the quitting rate increase after Let's.

Step back and first look at just the direct costs, because you're talking about the whole ball of wax, right, But you lead your story with the Facebook firings. And I knew a couple of young people that Facebook brought over here from Europe to work and and then almost all of a sudden laid them off and sent them right back. They had great packages, and the whole thing was almost a billion dollars right to lay off eleven thousand employees. That's like eighty eight thousand dollars a person. So that's just the severance, right, Yeah.

Step back and first look at just the direct costs, because you're talking about the whole ball of wax, right, But you lead your story with the Facebook firings. And I knew a couple of young people that Facebook brought over here from Europe to work and and then almost all of a sudden laid them off and sent them right back. They had great packages, and the whole thing was almost a billion dollars right to lay off eleven thousand employees. That's like eighty eight thousand dollars a person. So that's just the severance, right, Yeah.

So I looked at their filing and they said, well, you know, after we nine hundred and seventy five million or whatever it was in severance, but it's not material because there were big saving all this money. We know, we don't think give any of these people bonuses next year, and we're saving this or that, and I'm like, you know, there's got to be again more to it than that. So but all we really know is how much they take in the charge for severance, which will cover you know, two week salary, health care, continuation, outplacement, you know, help with your resume. But again, the costs of a layoff ghoest so.

So I looked at their filing and they said, well, you know, after we nine hundred and seventy five million or whatever it was in severance, but it's not material because there were big saving all this money. We know, we don't think give any of these people bonuses next year, and we're saving this or that, and I'm like, you know, there's got to be again more to it than that. So but all we really know is how much they take in the charge for severance, which will cover you know, two week salary, health care, continuation, outplacement, you know, help with your resume. But again, the costs of a layoff ghoest so.

One of the biggest indirect costs, Like you've got to bring in I guess Bain or mckensey to make you feel better about it first, right, so you got.

One of the biggest indirect costs, Like you've got to bring in I guess Bain or mckensey to make you feel better about it first, right, so you got.

Another cost, another cost. Yeah, there you go. No, Matt Boyle will do it for you. So the biggest ones are reduced productivity. Output goes down. So I went to a firm called Active Track and like other firms, so they were one of the biggest ones. They track employee activity. Now we've all heard about you know, they're watching your hours or surveiling you and all these stories about employee surveillance, but employers do want to know, you know, what you are doing on the company time. So this company was able to track pre and post layoff productivity at seven anonymous firms. Obviously I don't know who they are, but we saw exactly what happened to productivity and it's usually about an hour a day less productive, so that's eighteen hours a month turns out to be you know, for every what is it every ten thousand sorry, for a company with one hundred employees, that means more than fifty thousand dollars lost in productivity every month until it finally reverts to normal, usually after six months, but sometimes you know, not six months. So that's one of the big ones. Another one is increased quitting. People are worried about their own job and so people start, so you have an increase in what's called voluntary attrition quiting. Now, companies always have a level of attrition. Normally it's usually about nineteen percent, So usually you are replacing nineteen percent of your people just because they found something better in general, but when you do a layoff, your voluntary attrition can go up by fifty percent.

Another cost, another cost. Yeah, there you go. No, Matt Boyle will do it for you. So the biggest ones are reduced productivity. Output goes down. So I went to a firm called Active Track and like other firms, so they were one of the biggest ones. They track employee activity. Now we've all heard about you know, they're watching your hours or surveiling you and all these stories about employee surveillance, but employers do want to know, you know, what you are doing on the company time. So this company was able to track pre and post layoff productivity at seven anonymous firms. Obviously I don't know who they are, but we saw exactly what happened to productivity and it's usually about an hour a day less productive, so that's eighteen hours a month turns out to be you know, for every what is it every ten thousand sorry, for a company with one hundred employees, that means more than fifty thousand dollars lost in productivity every month until it finally reverts to normal, usually after six months, but sometimes you know, not six months. So that's one of the big ones. Another one is increased quitting. People are worried about their own job and so people start, so you have an increase in what's called voluntary attrition quiting. Now, companies always have a level of attrition. Normally it's usually about nineteen percent, So usually you are replacing nineteen percent of your people just because they found something better in general, but when you do a layoff, your voluntary attrition can go up by fifty percent.

That's a lot.

That's a lot.

That is a lot, yes.

That is a lot, yes.

Well, and I feel like on the other side of that, like if you need those workers that are leaving.

Well, and I feel like on the other side of that, like if you need those workers that are leaving.

Now, those are the ones you want to keep exactly.

Now, those are the ones you want to keep exactly.

That to bring them in, to recruit them and to retrain them. That's again another cost a.

That to bring them in, to recruit them and to retrain them. That's again another cost a.

Those are people you didn't want to lose in the first place. They're not the people you laid off. Then you have to train, recruit and train their replacements. So all that has a massive cost, and you're able and I was able to determine it. So you take and you know that, you take a normal turnover rate, you figure out how much it costs to replace the people you lose the increased incremental quits as I was calling it, because it usually costs about one point two five x to replace a lost worker. So if you take let's say sixty five thousand dollars average salary in the US, you know, that's over eighty thousand dollars to replace them. Multiply that by the incremental quits. And for at a ten thousand person company, you know, you're talking about seventy five million dollars that you were not thinking you were going to spend to replace all these people.

Those are people you didn't want to lose in the first place. They're not the people you laid off. Then you have to train, recruit and train their replacements. So all that has a massive cost, and you're able and I was able to determine it. So you take and you know that, you take a normal turnover rate, you figure out how much it costs to replace the people you lose the increased incremental quits as I was calling it, because it usually costs about one point two five x to replace a lost worker. So if you take let's say sixty five thousand dollars average salary in the US, you know, that's over eighty thousand dollars to replace them. Multiply that by the incremental quits. And for at a ten thousand person company, you know, you're talking about seventy five million dollars that you were not thinking you were going to spend to replace all these people.

I have to say, you sound like an accountant. I'm kind of loving this.

I have to say, you sound like an accountant. I'm kind of loving this.

Well, I'm a history major, so no, this was all new to me. But you know it's people. I had people walking me through the mess saying, yeah, that sounds right, But like, you know, I wish I could do it for like a particular company, you know, getting inside their books. That wasn't going to happen. So I just had to sort of guesstimate and do backup you exactly. Hey, Meta, why don't you tell me.

Well, I'm a history major, so no, this was all new to me. But you know it's people. I had people walking me through the mess saying, yeah, that sounds right, But like, you know, I wish I could do it for like a particular company, you know, getting inside their books. That wasn't going to happen. So I just had to sort of guesstimate and do backup you exactly. Hey, Meta, why don't you tell me.

What you you have? Also, you know, obviously we all pay unemployment insurance tax of the company pace that and because when you fire, when Meta fires eleven thousand people, a lot of them are going to go on unemployment and start collecting money from the state. We all pay for that collectively. But it turns out the state wants a little bit more from a company that fires people the next year.

What you you have? Also, you know, obviously we all pay unemployment insurance tax of the company pace that and because when you fire, when Meta fires eleven thousand people, a lot of them are going to go on unemployment and start collecting money from the state. We all pay for that collectively. But it turns out the state wants a little bit more from a company that fires people the next year.

Right, Yeah, I filed that under boring but important. Of course, your unemployment insurance rate is going to go off because you just put some people on unemployment. So guess what. So there, I've spent weeks finding out finding this guy who used to be an actuary for the Department of Labor, who was so tired of getting that question from people, how much is my UI in you know, rate going to go up? He built his own calculator to figure it out. Because it varies state by state, and all these laws and the formulation for it goes all the way back to nineteen thirty five, and different states do it different ways. Long story short, you know, this guy actually put a calculator together. So I said, hey, what if you're a Texas company and you lay off ten percent of your work for us? He's like, oh, just plug it in. Boom, there you go. Your unemployment insurance is going to go up by such and such a million dollars a year. So that's another one. Then there's the lawyers. Let's not forget the lawyers. You got to hire lawyers to make sure you don't get laid off and if you sorry, if you don't get sued, right, and you will get sued, and you probably might get sued, but it might be a big, massive, ugly class action lawsuit, or it could just be one person who's like, how dare you type of thing. But you have to analyze the demographics of the people you plant to lay off to make sure that no one group is disproportionately hurt.

Right, Yeah, I filed that under boring but important. Of course, your unemployment insurance rate is going to go off because you just put some people on unemployment. So guess what. So there, I've spent weeks finding out finding this guy who used to be an actuary for the Department of Labor, who was so tired of getting that question from people, how much is my UI in you know, rate going to go up? He built his own calculator to figure it out. Because it varies state by state, and all these laws and the formulation for it goes all the way back to nineteen thirty five, and different states do it different ways. Long story short, you know, this guy actually put a calculator together. So I said, hey, what if you're a Texas company and you lay off ten percent of your work for us? He's like, oh, just plug it in. Boom, there you go. Your unemployment insurance is going to go up by such and such a million dollars a year. So that's another one. Then there's the lawyers. Let's not forget the lawyers. You got to hire lawyers to make sure you don't get laid off and if you sorry, if you don't get sued, right, and you will get sued, and you probably might get sued, but it might be a big, massive, ugly class action lawsuit, or it could just be one person who's like, how dare you type of thing. But you have to analyze the demographics of the people you plant to lay off to make sure that no one group is disproportionately hurt.

It's not just a round decision unless it's just white guys.

It's not just a round decision unless it's just white guys.

Well, there are certain groups that yes.

Well, there are certain groups that yes.

I can't say that, I feel like that's fair, right, you know.

I can't say that, I feel like that's fair, right, you know.

And you do not want to get into a class action suit. So you have statisticians. So you've got to hire statisticians. You can't just do this, you know, on Google. You know you gotta crunch the numbers and you need you need a real number cruncher to do this.

And you do not want to get into a class action suit. So you have statisticians. So you've got to hire statisticians. You can't just do this, you know, on Google. You know you gotta crunch the numbers and you need you need a real number cruncher to do this.

Do you crunch the numbers for us?

Do you crunch the numbers for us?

Matt? We did so, so appreciate you story we did.

Matt? We did so, so appreciate you story we did.

Bloomberg Senior Management Workplace Reporter Matthew Boyle.

Bloomberg Senior Management Workplace Reporter Matthew Boyle.

You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Eastern not Apple Car Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station Just say Alexa playing Bloomberg eleven.

You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Eastern not Apple Car Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station Just say Alexa playing Bloomberg eleven.

Having said that, we want to stay with us and bring into the conversation and welcome back retired Major General Maston Robinson. He's a geopolitical intelligence advisor at Academy Securities Advisory Board, joining us here on Bloomberg Business Week. General, you were listening to our Bobby Ghosh about the situation and it does feel like I agree with Matt. It does feel like constant escalation, even though Bobby said, we're in a little bit of a holding pattern. How do you see it? How do you advise some of the clients of Academy Securities.

Having said that, we want to stay with us and bring into the conversation and welcome back retired Major General Maston Robinson. He's a geopolitical intelligence advisor at Academy Securities Advisory Board, joining us here on Bloomberg Business Week. General, you were listening to our Bobby Ghosh about the situation and it does feel like I agree with Matt. It does feel like constant escalation, even though Bobby said, we're in a little bit of a holding pattern. How do you see it? How do you advise some of the clients of Academy Securities.

Well, I don't disagree with anything that was just said. I think there's some additional context, so that is useful to add to it. Number One, in the last two decades, this is probably the most unified we've seen the Middle East with Israel and an opposition to Iran that I think is cure the you know, the April attack ninety nine percent shot down, but a sizable contribution of that shootdown capability coming from Middle East countries that historically have not been necessarily you know, friends with Israel. I think what that says to me is Iran is dangerously close to a further exacerbating their relationship with the Middle East and isolating itself more than it's even being isolated right now. All things any secret that most Middle East countries, not just Israel, considered to be Iran the the number one aggressor and the number one threat to them and to democracy within the region. So I think you need to add that into the equation when you have this discussion. I also think it's interesting that there are many many people who have who's calculus says that Iran style pile is not what maybe would it be to their advantage to do a large retaliatory strength at this point, particularly given the amount they used up back in April. So I think both of those play into the equation of how this plays out. We now have additional US assets and moved to the theater. I'm not suggesting they're going to be used, but I'm saying they do have an ability to have a de escalation factor. To my knowledge, Iran does not have an ability to defend against the F twenty two that have now been moved into theater. I'm not suggesting the US as would use them, but I am suggesting that the calculus has been altered as Iran tries to consider what should their response be. They need to do something to say face, but I think they have to be very careful this time around that they do something that doesn't exacerbate their position either as the nation with their people or with the rest of the Middle East or with the world. And the final thing I would say is that there's still a significant amount of diplomatic and sanctioned efforts it could be taken against Iran, and given Russia in essence already coming on board, at least verbally stating their council to Iran about civilian casualties or avoiding civilian casualties.

Well, I don't disagree with anything that was just said. I think there's some additional context, so that is useful to add to it. Number One, in the last two decades, this is probably the most unified we've seen the Middle East with Israel and an opposition to Iran that I think is cure the you know, the April attack ninety nine percent shot down, but a sizable contribution of that shootdown capability coming from Middle East countries that historically have not been necessarily you know, friends with Israel. I think what that says to me is Iran is dangerously close to a further exacerbating their relationship with the Middle East and isolating itself more than it's even being isolated right now. All things any secret that most Middle East countries, not just Israel, considered to be Iran the the number one aggressor and the number one threat to them and to democracy within the region. So I think you need to add that into the equation when you have this discussion. I also think it's interesting that there are many many people who have who's calculus says that Iran style pile is not what maybe would it be to their advantage to do a large retaliatory strength at this point, particularly given the amount they used up back in April. So I think both of those play into the equation of how this plays out. We now have additional US assets and moved to the theater. I'm not suggesting they're going to be used, but I'm saying they do have an ability to have a de escalation factor. To my knowledge, Iran does not have an ability to defend against the F twenty two that have now been moved into theater. I'm not suggesting the US as would use them, but I am suggesting that the calculus has been altered as Iran tries to consider what should their response be. They need to do something to say face, but I think they have to be very careful this time around that they do something that doesn't exacerbate their position either as the nation with their people or with the rest of the Middle East or with the world. And the final thing I would say is that there's still a significant amount of diplomatic and sanctioned efforts it could be taken against Iran, and given Russia in essence already coming on board, at least verbally stating their council to Iran about civilian casualties or avoiding civilian casualties.

I think there's a lot of.

I think there's a lot of.

Room diplomatically across the world to say we're going to further and more deeply sanction Iran and Russia as well. That also needs to I think factor into the capitalusts.

Room diplomatically across the world to say we're going to further and more deeply sanction Iran and Russia as well. That also needs to I think factor into the capitalusts.

You know, I was just thinking about that because we saw Israel assassinate the Hamas political leader in Iran last week, and I was surprised by the numbers, the sheer number of people that came out to mourn, you know, this terrorist group leader in Tehran. I didn't realize that so many everyday Iranian people support Hamas. How do you think the administration could change its posture in a more aggressive way to hold back this country that you know funds tear through Hesbelah and apparently through Hamas as well.

You know, I was just thinking about that because we saw Israel assassinate the Hamas political leader in Iran last week, and I was surprised by the numbers, the sheer number of people that came out to mourn, you know, this terrorist group leader in Tehran. I didn't realize that so many everyday Iranian people support Hamas. How do you think the administration could change its posture in a more aggressive way to hold back this country that you know funds tear through Hesbelah and apparently through Hamas as well.

Yeah, great question. But before I go to your question, since you brought up the deep strike, it's it really has to be not just intriguing to the world, but the fact that Israel has the ability to do such a strike so deep into the Iranian state has to have Iran going Wait a minute, where did this come from? That There's no way they weren't caught by surprise on inviting him to a diplomatic me to a meeting with the leadership of Iran and not realizing it by doing so, they were putting in a position of danger. So I would add that to the calculus what you just said. In regard to the people's response, that's hard to I mean, yes, there was a large response, but Iran is a sixty million population country, and there certainly are a sizeable amount of people that the Ayahtola's network can influence and stimulum, But I don't know that necessarily demonstrates it's that is the main Iranian general response.

Yeah, great question. But before I go to your question, since you brought up the deep strike, it's it really has to be not just intriguing to the world, but the fact that Israel has the ability to do such a strike so deep into the Iranian state has to have Iran going Wait a minute, where did this come from? That There's no way they weren't caught by surprise on inviting him to a diplomatic me to a meeting with the leadership of Iran and not realizing it by doing so, they were putting in a position of danger. So I would add that to the calculus what you just said. In regard to the people's response, that's hard to I mean, yes, there was a large response, but Iran is a sixty million population country, and there certainly are a sizeable amount of people that the Ayahtola's network can influence and stimulum, But I don't know that necessarily demonstrates it's that is the main Iranian general response.

Forgive us. We do have to run, but I'm glad we got some time with you to weigh in on the situation. Major General Maston Robinson, Geopolitical Intelligence Advisor at Academy Securities US. Right here on Bloomberg.

Forgive us. We do have to run, but I'm glad we got some time with you to weigh in on the situation. Major General Maston Robinson, Geopolitical Intelligence Advisor at Academy Securities US. Right here on Bloomberg.

Business Week, you're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Eastern on Apple car Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa Play Bloomberg eleven thirty Am.

Business Week, you're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Eastern on Apple car Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa Play Bloomberg eleven thirty Am.

Brother Marco.

Brother Marco.

A journal.

A journal.

How about you let me drive?

How about you let me drive?

Oh no, no, no, no, alright, please, I'll do the travelase wait.

Oh no, no, no, no, alright, please, I'll do the travelase wait.

I want to drive.

I want to drive.

It's good question.

It's good question.

This Please the drive to the clothes dot Com.

This Please the drive to the clothes dot Com.

We'll buy around down on Bloomberg Radio.

We'll buy around down on Bloomberg Radio.

All right, everybody got about eighteen minutes left in today's trading session. Charlie of course breaking down the numbers. We're pretty much hovering. Nero Loews here on the equity side of things, Carol Masser along with Matt Miller in for two Stenovic. Hello, Hi there, Hi there, let's get to our guest with us.

All right, everybody got about eighteen minutes left in today's trading session. Charlie of course breaking down the numbers. We're pretty much hovering. Nero Loews here on the equity side of things, Carol Masser along with Matt Miller in for two Stenovic. Hello, Hi there, Hi there, let's get to our guest with us.

I'm excited about this. They know, why take it away? Because they're my bank?

I'm excited about this. They know, why take it away? Because they're my bank?

I know, is it really?

I know, is it really?

Chadoviad is here, director of Investment Management, Huntington Private Bank. Full disclosure. That's where my family's been banking for generations.

Chadoviad is here, director of Investment Management, Huntington Private Bank. Full disclosure. That's where my family's been banking for generations.

Well disclosure, And Chad, I gotta ask you.

Well disclosure, And Chad, I gotta ask you.

A question after this insane week that I mean, it feels like it's lasted a month already. But you're sitting at home in Upper Arlington on a Sunday afternoon, enjoying some Urbino's pizza and some Greater's ice cream. You've had the disappointing. You know, unemployment numbers, and you open up the paper and you see that Warren Buffett is sold off half a steak and apple. How how worried are you about Monday morning?

A question after this insane week that I mean, it feels like it's lasted a month already. But you're sitting at home in Upper Arlington on a Sunday afternoon, enjoying some Urbino's pizza and some Greater's ice cream. You've had the disappointing. You know, unemployment numbers, and you open up the paper and you see that Warren Buffett is sold off half a steak and apple. How how worried are you about Monday morning?

Well, and then you throw in something complex like a carry trade unwinding and how do you even interpret that as an individual investor at home? Yea, So what we're talking to our clients about is really this is why you diversify your portfolios. One, don't be reactionary. There's a lot of reactionary forces in the market this week, and this is the time to evaluate why you have things in your portfolio. Yeah, but as bad as the discussion was around equities on Monday, bonds were winning. And so when you have that diversification, you have optionality. And so if you do have positions in your portfolio that make you a little nervous right now, this is the time to be trimming or adding. And so trim those that maybe aren't part of the long term portionary portfolio and think about adding to some names that maybe give you different return streams.

Well, and then you throw in something complex like a carry trade unwinding and how do you even interpret that as an individual investor at home? Yea, So what we're talking to our clients about is really this is why you diversify your portfolios. One, don't be reactionary. There's a lot of reactionary forces in the market this week, and this is the time to evaluate why you have things in your portfolio. Yeah, but as bad as the discussion was around equities on Monday, bonds were winning. And so when you have that diversification, you have optionality. And so if you do have positions in your portfolio that make you a little nervous right now, this is the time to be trimming or adding. And so trim those that maybe aren't part of the long term portionary portfolio and think about adding to some names that maybe give you different return streams.

You're talking about the equity side of things.

You're talking about the equity side of things.

Equity side, equity side.

Equity side, equity side.

All right, so give us some of that churn, So what would you sell, what would you buy?

All right, so give us some of that churn, So what would you sell, what would you buy?

Yeah, so look to be trimming some of the names that have been winning, right, some of the technology names we have. Our equity team is really taking a barbell approach to risk right now in our portfolio construction. So technology absolutely deserves to be in the portfolio. Technology is not going to go backwards in terms of its advanced and what it can bring to us in the future. So that's our growth engine. But at the same time, you're looking at the volatility. You're looking at an economy that is, in our opinion, cooling, not cratering. So now you start to think about what companies have historically rewarded their shareholders with dividends or buybacks, and who's in a position to take advantage of some of this market disruption. So we're looking at balancing some of the tech names with maybe some more of those dividend payers or things like.

Yeah, so look to be trimming some of the names that have been winning, right, some of the technology names we have. Our equity team is really taking a barbell approach to risk right now in our portfolio construction. So technology absolutely deserves to be in the portfolio. Technology is not going to go backwards in terms of its advanced and what it can bring to us in the future. So that's our growth engine. But at the same time, you're looking at the volatility. You're looking at an economy that is, in our opinion, cooling, not cratering. So now you start to think about what companies have historically rewarded their shareholders with dividends or buybacks, and who's in a position to take advantage of some of this market disruption. So we're looking at balancing some of the tech names with maybe some more of those dividend payers or things like.

A sector switch. It's a dividend or buy back play.

A sector switch. It's a dividend or buy back play.

It's very much a security selection environment for us, and so we're looking for some of those high conviction ideas and they can be you know, some of those household names like an Ohio name, I'm sure win Williams, right, has a history of a dividend that rewards investors for holding that security. Coca Cola, if you want to go bigger, global brand, same thing. They reward shareholders with dividends and buybacks, and they just have that brand recognition that this should stay pretty constant. And that's those are not necessarily the antithesis of technology, but they're great compliments.

It's very much a security selection environment for us, and so we're looking for some of those high conviction ideas and they can be you know, some of those household names like an Ohio name, I'm sure win Williams, right, has a history of a dividend that rewards investors for holding that security. Coca Cola, if you want to go bigger, global brand, same thing. They reward shareholders with dividends and buybacks, and they just have that brand recognition that this should stay pretty constant. And that's those are not necessarily the antithesis of technology, but they're great compliments.

Right, and I guess they can also I can imagine how Sherwin Williams and probably Coca Cola too, would employ AI to actually do something. I was talking to Nancy Tangler this morning, yeah, from Tanglar Laugh for Investments, and she said she wants to look at old economy companies that can improve their productivity with AI really digitizing their business or I don't know how. I don't know how Coke would do it, but Sherwin Williams I can imagine for sure.