March 5, 2025 • 52 mins
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg News Senior Technology Reporter Dana Hull discusses Tesla sales plunging in some of the world’s biggest EV markets, and protesters and vandals are targeting the company’s stores. She also explains how Tesla's China-made wholesale deliveries fell to the lowest in more than 2 1/2-years last month, adding to a troubling slide in global sales at a time Chief Executive Officer Elon Musk is increasingly distracted by politics. Bloomberg International Economics and Policy Correspondent Michael McKee shares the details of the Fed Beige Book ADP jobs data and breaks down the latest on US tariffs on Canada and Mexico. Bloomberg Businessweek Europe Editor David Rocks provides the details of the Businessweek Magazine story Greenland Voters Weigh Election’s Most Important Issue: Trump. Emmanuel Metais, Dean of EDHEC Business School and Bloomberg News Senior Editor Dimitra Kessenides discuss why more American are going to Europe to study. And we Drive to the Close with Aaron Kennon, CEO at Clear Harbor Asset Management.
Hosts: Carol Massar and Tim Stenovec. Producer: Paul Brennan.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:08):
This is Bloomberg Business Week Insight from the reporters and
editors that bring you America's most trusted business magazine, plus
global business, finance and tech news. The Bloomberg Business Week
Podcast with Carol Masser and Tim Stenovek on Bloomberg Radio,
Well General.
Speaker 3 (00:27):
Motors and ford Man.
Speaker 4 (00:28):
They have led a rally across automakers after US COMMAS
Secretary Howard Lutnik had initially teased an update related to
the trades standoff between the US, Canada and Mexico, and
we've had headlines since showing that we will see some
kind of rollback, it seems when it comes to tariff.
So watching that go on and play out, and we
have seen, as I mentioned, those two names go hire.
(00:48):
Tessa right now is up about one point six percent
as well, but that's today because the stock is down
a lot, in fact, from its high back in mid December,
down roughly forty percent ince and then giving back much
of its ninety percent gain since that November election here
in the United States, and today a bunch of headlines
about the company the ev maker, offering up some perks
(01:10):
to drum up sales, and we'll explain why maybe they
are looking to do that because they've had some disappointing
sales numbers. Tim We'll get into that in just a moment.
Speaker 5 (01:17):
Okay, Well, here to go through the flurry of headlines
on Tesla today is Bloomberg New senior technology reporter and
a contributor to the Elon Inc. Podcast, Dana Hole. She
joins us from San Francisco. Dana some of the headlines
that Carol mentioned. In addition to those, Tesla sales plunged
seventy six percent in Germany last month. China sales slumped
in February to the lowest monthly figure in more than
two and a half years, President Trump pulling the plug
(01:39):
on support for EV subsidies. And then there's the perks
that Tesla is now offering up to drive sales. How
is Tesla's business doing.
Speaker 6 (01:48):
So?
Speaker 7 (01:48):
The core business? So I guess big picture, the first
quarter is typically slow for Tesla. You know, they had
a very strong fourth quarter. First quarter is always sort
of slow for them. But you are definitely seeing a
lot of backlash against the brand because of Elon Musk
and his politics, particularly in regions where he has been
very vocal. So for example, you know, in the US,
(02:10):
he spoke at inauguration. Tesla sales in the US are
not doing so great. You've seen protests at Tesla showrooms
across the country. In Germany, where Musk got very involved
vocally in the German elections, you're also seeing a bit
of a backlash there. And you know, the proof will
just really be in early August when we actually get
first quarter sales. But I would note that Tesla also
(02:32):
has a kind of older lineup and even though they
are in the process of refreshing the model, why the
cars are not particularly new, and the cyber truck is
not doing super great. So all of these things are
weighing on sales.
Speaker 5 (02:44):
I thought the cyber truck was doing pretty well.
Speaker 7 (02:47):
I mean it's doing okay, it's just not like F
one fifty, you know level sales. And I think also
economic anxiety, like a car is a huge purpose purchase.
Right now, we have you know, interest rates are still high,
a lot of people are losing their jobs, people are
worried about the economy in general, Like like, you know,
(03:08):
you're seeing a lot of I mean, you know, it's
too early to say, but typically people pull back on
making big purchases when they're worried, and that's going to
impact the auto industry as a whole.
Speaker 4 (03:19):
Hey, Dan, It remind us in terms of Tesla where
most of the revenues come, It's the US market, And
is that where the growth is the Yeah.
Speaker 7 (03:28):
Go ahead, Yeah, the US has always been strongest market,
followed by China and then like other international markets, are
you know, roughly a third and you're seeing, you know,
Tesla is definitely always entering new markets. Their global footprint
it continues to expand, but their brand is mostly well
known here in the US and in China.
Speaker 5 (03:48):
At what point do shareholders at Tesla and look, it's
still had an amazing run, especially over the last year.
We were just showing the chart there. At what point, though,
do shareholders say, okay, elon time in Washington, d C.
It's time to go back to Texas, or to go
to Fremont, or to go wherever and focus on Tesla.
Speaker 7 (04:08):
I mean, this has been a perennial problem with Tesla
for a long time, right, Like Tesla's shareholders have always
spot to have Musks full attention. When he bought Twitter,
Tesla's shareholders were very upset about that, but Elon is
going to do what he wants to do. The board
has been completely silent and less you know, unless the
(04:29):
board makes a move or big institutional shareholders really raise
a rucus, it's hard for me to see that anything
is going to change. At some point. You could presume
that the shares would fall low enough that Elon would
kind of like wake up and refocus his attention. But
he is very squarely in Washington. He's in Washington today,
and you know the company. I mean, so is anyone's
(04:51):
guess as to like what would shake him into action?
Speaker 4 (04:54):
Yeah, I keep thinking about that, and I did you know,
it's taking a look at some of the major holders.
He of course is the biggest holder right of Tesla's stock,
but it's.
Speaker 3 (05:02):
In a lot of index funds.
Speaker 4 (05:04):
We all own Tesla, right because it's just such a
massive company, and it's owned by, as you said, a
lot of the big institutional investors. At the same time,
you say, you know, he does continue to expand I
was reading something about signing a five year lease Tesla
that is for its first India showroom. What's the potential
of this market for Tesla?
Speaker 7 (05:27):
I think, you know, obviously. I mean, India is a
growing economy. It would be it would be great to
have a foothold there. You know, the real competition at
Tesla bases globally is with BOID and China. So anything
that Tesla can do to kind of grow its brand
and its footprint in India would be a hedge against
China's influence. But I think that you're seeing, you know,
(05:48):
BYD is expanding globally also, and Tesla just doesn't have
the kind of product pipeline with a really new electric
car or that lower cost vehicle that everyone is waiting for.
And to be clear, like the market is still very confused.
Is Teesla coming out with a twenty five thousand dollars
car or is it just a cheaper version of the
existing model Y and three or is it the robotaxi?
(06:10):
And like you know, we, I mean, investors are very
eager to hear what is actually next. But Musk is
not even really tweeting about Tesla all that much. I mean,
his posts are largely about Doge. But this has been
like the sort of catch twenty two that Tesla shareholders
have been in for a long time.
Speaker 5 (06:28):
You know, this is somebody you followed for years. You know,
I don't want to say you know him well, Dan,
I'm not going to like, you know, go there, but
you do know what he does very well. You know
his patterns very well in the way he works. If
you think about what he did during the Model three
development at Tesla's headquarters, you know, sleeping on the floor there.
He did the same thing when he bought Twitter a
(06:49):
few years ago, he moved a cot into headquarters there.
We've heard he's doing that or has done that at Doge.
He sort of seems to go be really intense and
then sort of move on to the next thing. Do
you think he'll move on from Doge?
Speaker 7 (07:03):
I think at some point he might lose interest. I mean,
this is clearly where his focus is right now. But
he has a lot of demands on his time. He's
overseeing six companies. He's clearly very interested in Starship and
the next Starship launch when it comes to Tesla, has
you know, he's My sense of him is that he's
sort of bored of just the car business in general.
He sees the future of the company as being on
(07:25):
AI robotics and the robotaxi. We reported exclusively last week
that Tesla has applied for a permit in California to
begin some kind of ride hailing service where they would
oversee the fleet. It's not a robotaxi yet because they
don't have like approval to actually operate a robotaxi, but
they are making moves to get into the ride hailing
(07:46):
business in California. And so you know, he, I mean,
he hasn't completely given up the reins. It's just like
it's just wild as always that, Like you have a
company as large as Tesla, with so many thousands of employees,
and they don't have a full time CEO, and they
don't have a clear number two.
Speaker 8 (08:05):
Yeah.
Speaker 4 (08:05):
I was going to ask you that, like who's the
number two? But you know, I look at the dees page,
the description page on the Bloomberg and he's the CEO
Elon Musk, right, And so it is interesting to see
him spread as he often is, along so many different things. Dana,
thanks so much shedding some light a lot of light
on Tesla on this Wednesday. Bloomberg New Senior Technology reporter,
(08:26):
contributor to the Elon Inc.
Speaker 3 (08:27):
Podcast.
Speaker 2 (08:28):
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Speaker 4 (08:42):
All right, let's get to it. Let's get more on
those fed Page Book headlines that just crossed the Bloomberg terminal.
We also had a ADP jobs report earlier today showed
a slowdown in the US labor market. So rolling it
all together, as we like to do with our Mike
McKee's Bloomberg News International Economics and Policy correspondent right here
in studio.
Speaker 9 (08:59):
Yes, I'm smiling because of reading the summary of the
Beige Book. And if there were three words that would
describe the Trump administration policies right now, I think they
would be tariffs, immigration, and eggs. All three make it
into the Beige Book. You mentioned overall activity rising slightly.
That's sort of the headline word, with six districts reporting
(09:22):
no change, for reporting modest or moderate growth, and two
noting slight contractions, consumer spending lower. On balance, we've seen
some data to that effect, although they do attribute a
little bit of it to unusually bad weather. Manufacturing slight
to modest increases, But the part that caught my eye
(09:43):
was some contacts in the construction sector expressed nervousness around
the impact of potential tariffs on the price of lumber
and other materials. So that does make it into the
comments that businesses are giving to the FED labor markets
slightly higher on balance.
Speaker 6 (10:03):
UH.
Speaker 10 (10:04):
Many districts citing job growth.
Speaker 9 (10:06):
In healthcare and finance, which is unusual because today we
saw ADP report big decline in healthcare hiring, so I'm
not sure what the sense that makes. Contacts in multiple
districts also said rising uncertainty over immigration and other matters
influencing current and future labor demand.
Speaker 10 (10:27):
So those immigrations R well.
Speaker 9 (10:30):
This is basically sort of the anecdotal backup to the statistics.
And then I were just talking about prices increasing modestly
moderately in most districts.
Speaker 10 (10:41):
Many districts noted that higher prices for.
Speaker 9 (10:43):
Eggs and other food ingredients for impacting food processors and restaurants.
Speaker 10 (10:48):
So people are all these things that we laugh about.
People are feeling out there.
Speaker 4 (10:53):
I have to say, I didn't even know, because I
know people here at work have said twelve to thirteen
dollars a dozen.
Speaker 3 (10:57):
I said, honey, what are we paying for eggs? Is
like seven books?
Speaker 5 (11:00):
Do oh, I got to come to New Jersey get
my eggs.
Speaker 9 (11:03):
I guess that's what I got eighteen for eight dollars
about a week ago.
Speaker 5 (11:07):
Sounds like a Wegman's deal. That's why I hear No,
I hear eighteen at Wegmans is the way to go.
Speaker 10 (11:14):
But well, you grab eighteen when you can.
Speaker 5 (11:16):
Yeah, hey, Mike, speaking of eggs, I do see it
mentioned four times in the Beige Book. In this current
Beige book. When you see something like that, give us
some context as to like when the surveys were taken,
so we can have an understanding of timing, because a
lot is changed in a very short time.
Speaker 9 (11:31):
Well, the Fed puts basically surveys the in between period,
the period in between meetings, and in this case, what
they're saying is the report was information on or before
February twenty fourth, and that was right at the height
of the There are no eggs concerns, so.
Speaker 10 (11:50):
It's relatively timely here.
Speaker 9 (11:52):
The thing about eggs, of course, is that it's a
it's because of bird flu, so interest rates are going
to fix that problem one way or another. But it
does show the psyche of what people are thinking.
Speaker 5 (12:05):
Interest rates aren't going to fix lumber prices either.
Speaker 9 (12:07):
Nope, although they could have an effect on housing, but
they're not going to make lumber any cheaper. And that
was one of the things when I was down at
the NAME National Association for Business Economics meeting on Monday,
people were talking about commodity prices going on, particularly lumber,
because there was a whole session on how do we
ease the crisis in housing, and the concerns were that
(12:31):
you need to build more homes, but if the price
is going up a lot, then people aren't going to
be buying them anyway, even if interest rates come down.
Speaker 3 (12:40):
Right, if you build them, they won't come if they're unaffordable.
Speaker 4 (12:43):
Hey, listen, One thing I want to ask you before
we get into kind of a bigger story about the
US economy is the ADP Jobs report. Hiring is companies
slowing in February, the lowest patents July? What do we
need to know?
Speaker 10 (12:56):
It's a kind of a weird report.
Speaker 9 (12:58):
We don't know exactly whether you never know with ADP
whether it is giving you a good read or not.
But the interesting things about it were that we've heard
bad things about manufacturing, and manufacturing gained eighteen thousand jobs.
Speaker 10 (13:14):
We haven't seen anything like that in a long time.
Speaker 9 (13:16):
How bad was the weather? Everybody talks about the weather
effects on all the data. Well, construction went up by
twenty six thousand jobs. How does this happen? Service industries
were the weak part of the report instead of the
manufacturing side. As I said, health and education, which is
usually the biggest job creator in the country, lost.
Speaker 10 (13:35):
A lot of jobs.
Speaker 9 (13:35):
So I'm not sure how much stock people are going
to put in ADP this month.
Speaker 5 (13:39):
Does it well? I mean, I guess we'll find out
on Friday if it actually gave us some sort of
read through to Friday.
Speaker 10 (13:43):
Yeah, does it? Can it? It usually does not.
Speaker 9 (13:46):
Sometimes it gives you a direction, but the magnitudes are
never anything near which and they claim we're not supposed.
Speaker 10 (13:54):
To be predicting. This is just what ADP found, all right.
Speaker 4 (13:56):
So we've talked to you about the recent flow of
US data, and we've talked about weakness consumer sentiment, consumer spending.
We did talk about the manufacturing data that was recently weak.
It's also a topic that came up this morning in
Bloomberg Surveillance. They hosted the US Commerce Secretary Howard Lutnik.
We wanted to play a little bit of the conversation
between the secretary and Surveillance co host Jonathan Ferrell on
(14:17):
the recent signs of a US slowdown. So listen up, everybody,
you're looking at data that's Biden data.
Speaker 2 (14:24):
Do not try to besmirch my President Trump with Biden's nonsense.
Speaker 6 (14:30):
Do you think the manufacturing number is Biden date?
Speaker 10 (14:32):
So I just want to be very clear, that's your opinion.
You're incito to it. You think that's his dates?
Speaker 2 (14:37):
My opinion?
Speaker 10 (14:37):
Okay, what possible could change?
Speaker 2 (14:40):
Seriously, we are in early March. My president took over
January twentieth. You think economic data coming out in early
March is Donald Trump related data monthly, mister secretary?
Speaker 4 (14:55):
All right, of course, US Commerce Secretary Howardlutton, but Bloomberg
Jonathan Farroll earlier on Bloomberg Surveillance. So the Biden economy
versus the Trump economy, is the Commerce secretary fair to
say that this isn't yet indicative of policies coming out
of the Trump White House.
Speaker 9 (15:11):
Yeah, give Howard credit on one side and ding him
on the other side, because it is largely still the
Biden economy. Trump only took over on the twentieth of January,
and the data we're getting is largely from January, although
the ism numbers that we got this week are for
(15:35):
February and he was president during February. But the part
where Secretary Lutnik is completely wrong is that Biden when
he says Biden left us a mess of an economy,
the economy was very strong.
Speaker 10 (15:47):
So you know, it's politics.
Speaker 5 (15:51):
It's everything is politics, Mike.
Speaker 10 (15:53):
It seems like politics is apple sauce. I think that
was will Rod.
Speaker 5 (15:56):
But let's try to cut through that a little bit.
Is there a certain point with certain data where this
can become Trump's economy? Like when can we start.
Speaker 9 (16:05):
Selling It's it's really psychological. It's when do people voters
start associating the president with the economy.
Speaker 10 (16:13):
There's always a debate when we do those tables that.
Speaker 9 (16:16):
Say, you know, how many jobs were created under the
Biden administration versus the Trump administration versus the Bush administration,
because they take over on the twentieth, so you of January,
so you and the survey for January payrolls has taken
before that, So there's always an argument, Well, do you
include January in the previous presidents or you just start
with the calendar year whatever. None of that really matters.
(16:40):
It's once you get to the February data, which we're
getting into now. You can argue that's the current president
because he's the president. But the thing is, presidents always
get credit for things that go right in the economy,
even though they probably had very little to do with it,
and conversely, they get to blame for things that go badly,
(17:02):
even if they had nothing to do with it.
Speaker 4 (17:03):
There's also lags and policies, so there can be policy
from a previous president that you don't really see the
results of it.
Speaker 10 (17:08):
That's the little bit the harder thing.
Speaker 9 (17:10):
Yeah, you know, a lot of presidents pass some measures
to increase hiring during their terms and then you see
a bump in hiring and that you can definitely attribute
to them. But it's really a vibe to use. To
use a word that people have used a lot about
the economy these days.
Speaker 3 (17:25):
Inflation.
Speaker 4 (17:26):
I know we've talked about it at nauseam with you,
but I want to go back there because regarding the
inflation during the Biden economy, you know exactly what caused it.
And why it's still been sticky because I think there
is a blame game that goes around. There is a
lot of money slashing around coming off the pandemic, and
had a lot of money chasing stuff that certainly put pressure,
and there were supply chains disrupted.
Speaker 3 (17:45):
Is that you know?
Speaker 4 (17:46):
So help me understand when we're kind of finger pointing
when it comes to inflation today, who's responsible and what
really gets us out of it?
Speaker 9 (17:54):
Probably the people who are responsible are the people who
are sitting in the c suites of companies decide what
to charge because at this point, yes, we had a
lot of extra money go into the economy, and yes
we had massive supply chain disruptions, and the literature economic
literature studies basically put most of the blame on the
supply chain disruptions which caused companies to raise prices. But
(18:20):
this is an argument about supply versus demand that is
going to go on and on and on. Both sides
have arguments to make. But we've gotten down to the
three percent level, and it's that last mile that's very difficult,
and that's because we have some unusual or individual categories
that may have a bigger weight than others. Like used
(18:42):
cars and certainly housing that have not performed as you
would expect. You would think that house prices would go down,
but because we had this unusual period of very low
interest rates and everybody locked in at low interestrates and
they don't want to they don't want to sell. And
then you've got problem with not enough new homes being
built because there's a lot of problems at the local
(19:04):
level of zoning and things like that. So all these
things contribute, and it's not something that the national the
president put it that way and or the FED chairman
can solve.
Speaker 5 (19:16):
Well, the president those policies, many would argue, can affect
the inflationary environment. Tariffs, for example, you do have some
economists coming out, many economists saying that tariff's on goods
from Canada and from Mexico and China.
Speaker 9 (19:31):
Would John Williams yesterday the New York Who did he
say that to somebody?
Speaker 10 (19:37):
I know, really good looking guy, modest too Well, Tariffs
are inflationary.
Speaker 9 (19:45):
We know that the question is do they just push
up price levels once or do they keep going up?
And that was the point that Williams was making, is
we know that the price level will rise, but we
don't know how whether it will continue because Trump has
talked about so many different tariffs coming on at many
different times that if that happens, then you could have
an inflation problem. And then you might get an inflation
(20:08):
psychology where companies are saying, well, I keep having to
pay more, so I'm going to raise my prices to
meet this. If it's a one time move, maybe they don't.
So that's the hard part about knowing whether this is
going to contribute or not. It'll contributes something, but is
it something that really underpins inflation going forward?
Speaker 4 (20:28):
All right, great stuff, Thank you so much, really appreciate it,
and should point out if you missed the John Williams
conversation with Mike yesterday from Bloomberg invest worth checking it out.
Speaker 3 (20:37):
It's on the Bloomberg terminal. It's also at Bloomberg dot com.
Speaker 4 (20:40):
Some really great views in terms of the US economy
and Fed policy.
Speaker 3 (20:45):
Thank you, Mike.
Speaker 4 (20:45):
Bloomberg News International Economics and Policy correspondent Michael McKee right
here in studio.
Speaker 2 (20:51):
This is the Bloomberg Business Week podcast. Listen live each
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can also listen live on Amazon Alexa from our flagship
New York station Just Say Alexa played Bloomberg eleven thirty.
Speaker 4 (21:10):
Greenland, it was mentioned last night during President Trump's excuse
me addressed to the Joint Session of Congress, not of course,
the first time that he has talked about it and
about gaining control of the territory. This vast, isolated land
finds itself thrust into the middle of the global security debate.
This says, Greenland faces another election and one that again,
(21:30):
as it has for virtually every election for almost half
a century, is about seeking and promising independence from Denmark.
Speaker 5 (21:38):
And yet this year, because of the interest and by
the US President, independence takes on much more importance. We
decided it was time to really dig into the history
of Greenland and understand more about why we're talking about
it so much. To do that, we had to Berlin
and to a Bloomberg Business Seek Europe editor David Rocks
David Greenland. Why are we talking about it so much?
Speaker 8 (21:58):
Well?
Speaker 10 (21:59):
Because of Trump?
Speaker 8 (22:00):
I mean, you know, nobody has been thought much about
Greenland other than Greenlanders of course, for you know, the
better part of fifty years, and all of a sudden
Trump started talking about it, you know, in his first
term a little bit, but more recently in the past
six months or so, and everybody wants to know what's
going on in Greenland.
Speaker 4 (22:19):
Well, and I have to say, I think it's fair
to say, David that everybody's like Greenland country, territory, who
owns it, who oversees it? Like what's the political history
that we need to kind of understand about Greenland? And
really right now and for what the last three hundred years,
it's relationship with Denmark.
Speaker 8 (22:37):
So it's a territory. It is not a country. It
is controlled by Denmark. It has been for about three
centuries since some Danish missionaries moved in there, you know,
about three hundred years ago, but they've been in relatively independent.
(22:57):
In seventy nine they were given control of domestic issues,
and then since two thousand and nine they've had the
right to oversee almost everything except for defense and foreign policy,
although they don't actually they don't actually do everything that
they have the right to do because there's only like
fifty thousand people there, right.
Speaker 5 (23:16):
Yeah, it's a very sparsely inhabited place. In recent years,
though Greenland's relationship with Denmark has really become strained.
Speaker 8 (23:27):
Why is that, Well, because people in Greenland feel that
they don't get the respect that they deserve. There's still
reports of some degree of kind of Danish people looking
down at Greenlanders, and there's been fairly recent reports of
(23:51):
things like for sterilization and putting Greenland kids into schools
that they take away from their families, and.
Speaker 11 (24:00):
Putting into boarding schools.
Speaker 8 (24:02):
The whole kind of things that have happened in the
US and Canada to native populations have happened in Greenland,
and so people there are not super happy with Denmark.
Speaker 5 (24:13):
There's a question about independence, and there's also certainly the
US question how in the upcoming election, what's the conversation
happening about independence and how has it taken on sort
of a new importance given what we've heard from President Trump.
Speaker 8 (24:30):
Well, all right, so I guess it's virtually certain that
that the winner of the election will be a pro
independence party because all of the major parties are pro independents.
So there's gonna be a pro independence party, whoever it is,
(24:51):
running the place after the election on March eleventh. But
that said, the popular generally is pro independence, but they're
not pro being taken over by the US.
Speaker 3 (25:08):
They want to be Greenlanders, all right.
Speaker 4 (25:11):
So let's roll in the US aspect. The US has
had military base or a military base there, right, So
there has been a.
Speaker 8 (25:21):
Preparation certainly since the seventies eighties when I was growing up.
Speaker 10 (25:25):
It was a big deal back then.
Speaker 8 (25:27):
You know, I can't remember exactly when it started, but
it's been around for a long time, decades and decades,
and it's what it is is it's a place where
there's a lot of technological infrastructure, radar and things like
that that you know, back when we were really worried
about the Soviets sending missiles across, Greenland was going to
(25:48):
be the place where they would be spotted first, as
it were Greenland in northern Canada.
Speaker 4 (25:52):
Well, and I have to say all of us talking
about Greenland has made us roll out our maps or
you know, pull them up on our phones. Having said that,
so why did we And we did this in the
introduction about the importance of the outcome of this the
election and why it means so much for global national security,
So playoff of kind of you know where Greenland is
and why it is maybe such a necessary territory, at
(26:15):
least that's why President Trump says the US should have it.
Speaker 8 (26:18):
Yeah, I mean necessary territory for the US. I'd say
that's highly questionable. But a strategic location, no doubt. Greenland
is a it sits kind of right between the Arctic
and the North Atlantic. It's a place where, you know,
if Russian warships wanted to get you know, head towards
(26:41):
the US, I guess they'd probably have to go past Greenland.
You know, Will that ever happen, highly unlikely, but that
is a consideration. But then also there's a lot of
mineral wealth there, and so it's not just sort of
security in the in the way that you know, we
want to protect ourselves from whatever our perceived in enemies
might be, but rather, you know, to have access to
(27:05):
the kind of mineral wealth, particularly rare earths and things
like that that are needed for electric cars.
Speaker 5 (27:11):
So we have strategic shipping routes an importance when it
comes to defense from a United States perspective. And then
the minerals that you mentioned, David, Realistically, is Greenland becoming
part of the United States something that could even happen.
Speaker 10 (27:35):
You don't want to listen to.
Speaker 8 (27:36):
Me predict what's going to happen, because I never would
have predicted that we'd be where we are right now.
But you know, Greenlanders don't want it. They want independence,
they don't want to be Americans. Then what independence would
look like is not something that they particularly want to say.
(27:57):
You know, it's a lot of people there think, well,
we want to be independent, but we want to still
have close ties to Denmark.
Speaker 10 (28:03):
So will it happen?
Speaker 8 (28:07):
You know, a fully independent Greenland, let's just say, would
be far more susceptible to some to US influence than
a Greenland that sits under Denmark, which some people in
Greenland actually recognize or would say, David.
Speaker 4 (28:23):
I am curious too about what Denmark says in all
of this, or what they've continued to say, and the
importance of they obviously provide financial support to Greenland. Can
Greenland support it on its own, say, you know, survive
on its own, exist on its own without some kind
of financial support from someone.
Speaker 8 (28:44):
I mean, certainly right now it would not appear that
they can. I mean, the economy is the vast majority
of economic output is basically fishing, right, and so they
don't have a particularly stronger dynamic economy, They've got a
lot of mineral wealth. They sit in a place you know,
people sort of want to control them, but it's not
(29:07):
it doesn't create a lot of cash flow right now.
So yeah, Denmark subsidizes Greenland to a huge extent. Denmark
has you know, over the decades, they've been pretty anti
the idea of independence, but the political leadership in Denmark
is starting to come around to okay, maybe we can
(29:30):
sort of create some sort of middle ground, more more
independent than they are now. But we want to be
the country that helps support them. We don't want them
to be to become part.
Speaker 10 (29:43):
Of the US.
Speaker 5 (29:44):
So what you're saying is the endgame here could be
in effect really good for Greenland because they're getting so
much attention, and perhaps they're getting the attention of Denmark.
Speaker 8 (29:57):
Yeah, the chances are they'll get more attention from denm
and you know, by extension, you know, the rest of Europe.
But that said, you know they're yes, they're getting a
lot of attention, but it may not really be the
attention they really really want.
Speaker 4 (30:15):
One thing, I am curious too, because we are talking
a lot lately, certainly with this administration, about mineral rights
and rare earth minerals and the like, whether it's Ukraine,
whether it's Greenland. This story on the Bloomberg, you know,
gets into various mining projects.
Speaker 12 (30:32):
They not.
Speaker 4 (30:33):
At least four mining projects have been halted since twenty
ten following questions about their environmental and financial costs. So
what is the likelihood that you know, these rare earth
minerals are actually unearthed? I mean, does climate change make
it potentially more easier accessible, viable?
Speaker 5 (30:51):
Like?
Speaker 3 (30:52):
Yeah, how and how and how wealthy is this deposit?
Are these deposits?
Speaker 8 (30:57):
So Greenland is you know, the vast majority of it
I can remember is eight percent is covered in ice
and ice that's miles thick. Okay, so you're not going
to get to what's underneath that ice very easily. Obviously
that ice sheet is melting, and it's melting faster than.
Speaker 10 (31:18):
We really want. But those are the facts.
Speaker 8 (31:21):
And so as the ice sheet melts more earth with
minerals underneath it is becoming accessible.
Speaker 10 (31:31):
How accessible is that and.
Speaker 8 (31:33):
Would Greenland really want that? That remains unclear because there's
been some environmental pushback in Greenland to mining projects. You
said that these four mining projects have been canceled. That's
been at least a couple of them have been on
environmental grounds, So you can't you can't count on everybody
in Greenland saying yeah, just dig baby, dig. Well.
Speaker 5 (31:56):
The reason we got to speak to David this afternoon
is because there is this great story in Bloomberg Business Week.
Sanson Sarah Sullan went to Greenland and got to experience
the area, but also talk to folks there. I do
encourage everybody to check out the story on the Bloomberg terminal.
It is in Bloomberg BusinessWeek.
Speaker 4 (32:15):
David, thank you so much. We've been dying to do
this in this deep dive, so thank you.
Speaker 12 (32:19):
Thank you.
Speaker 4 (32:20):
David Rocks, Bloomberg BusinessWeek Europe editor, staying up late for
us out there in Berlin, so appreciate it and do
highly recommend you check it out on the Bloomberg and
at Bloomberg dot com.
Speaker 1 (32:30):
You're listening to the Bloomberg Business Week podcast. Catch us
live weekday afternoons from two to five eas during listen
on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 5 (32:43):
The story from our Bloomberg News team earlier this week,
getting our attention At business schools across the US, graduation
fast approaching the mood, though subdued. NBA programs that once
offered a glide path to lucrative jobs are finding fewer
and fewer seats on Wall Street and in corporate America
for their graduates. At every one of the nation's top
schools known as the mag seven. I didn't know this,
(33:04):
they were known as the Maxie I neither job Blason
outcomes have declined since twenty twenty one, and this year
is looking no better. No joke, Carol, you can attest
to this. As I was writing this intro, I got
an email from Dean mclaris at Columbia Business.
Speaker 3 (33:17):
School right very grad grad.
Speaker 5 (33:19):
The subject says hire CBS and it's like an email
talking about recruiting.
Speaker 4 (33:24):
All right, So that is the view from schools inside
the United States. Let's go outside the US to France.
We've got Emmanuel mctay, dean of the French Business School
Etic Business School with US, as well as Dimitro Cassanides
Bloomberg new senior editor.
Speaker 3 (33:37):
She spearheads our global.
Speaker 4 (33:39):
Business coverage business school coverage, I should say, for Bloomberg
Business Weekend. They're both here in our Bloomberg Interactor Broker studio.
Speaker 3 (33:46):
Welcome, Welcome, Nice to have you here. Hello Dean Mattay.
Speaker 4 (33:51):
Before we get going, we want to ask you about
what you are hearing and seeing from other business school
deans during your visit here to the United States and
other business s goals.
Speaker 3 (34:01):
How much is the job market a topic right now?
Speaker 11 (34:04):
What is striking here is, as always, I mean, the
power of the higher education institutions, their entrepreneurial spirit, the
amount of resources that they have to reach their ambitions.
But also I could feel some kind of anxiety about
you know, research funding, about the capacity of welcoming foreign students,
(34:32):
foreign researchers, foreign professors. So I could feel that it
was kind of mixed feelings as always, and I mean,
the best educational system in the world, especially for business,
but at the same time, some question about tomorrow, uncertainty
about tomorrow.
Speaker 5 (34:51):
I know, you know, I don't want to use the
term frenemies, but you are also competitive with these schools.
Is this only good news for you? If there's an
environment in the United States that's not as conducive to
attracting foreign students, foreign professors, is it just great news for.
Speaker 11 (35:06):
Unfl But I mean, bad news for the US is
bad news for US. And of course, if I was
really egoistic, I would say, yes, it's good news for US.
We will have more foreign students coming to US and
probably will have opportunity to recruit talented professors and researchers
from the US market. But no, I think it's not
(35:27):
good news because we tend to see US in a
very global market, in a very global higher education system,
and we see more and more countries I mean turning
onto themselves, not only the US, I mean the UK, Canada,
I mean, you name them, Scandinavian countries, and they want
(35:47):
less and less immigration and including foreign students, and it's
not good news at all. I mean I visited a
lot of countries all around the world, and what we
can see is that when there is a country which
you know, try to decrease immigration, and especially a student immigration,
it's a disaster for the country and for the schools.
Speaker 10 (36:08):
Wow.
Speaker 12 (36:09):
Yeah, that's not surprising. And I think I'm hearing very
much the same from other people that we're talking to.
I mean, I think it's of great concern because of
just the points that Dema Tase is making and I
think there is a big concern. Sometimes we think, oh,
it's a problem for students in terms of the immigration
challenges that we're confronting, but I think it is a
huge concern on the research and faculty front. When we've
(36:31):
seen the shifts in education on global business schools over
the last decade or two decades, one big thing we've
noticed is a lot of talent coming to this country
to our business schools. Look at the deans of a
lot of our business schools and where they've come from.
So it's a challenge on many fronts, and I think
that there is definitely you know, however openly they're sort
(36:52):
of airing this anxiety. There is a great deal of
anxiety right now and really just kind of wait and
see and where is this all going.
Speaker 4 (36:59):
I have to say one of the things my daughter's
just finishing up an undergraduate degree, but spent a year
over in London at the Lendon School of Economics, and
it was such a great combination of us versus being
overseas for a full year. The importance of partnerships for
you in linking up with US business school talk to
us a little bit about that, how important that is definitely.
Speaker 11 (37:20):
I mean we want our students, wherever they are from,
we want them to go to the best schools all
around the world. So we have here in the US.
Basically we have three hundred partners, academic partners all around
the world, mostly for exchanges double degrees. But we have
among these three hundred ten, let's say, strategic partners, including
(37:42):
one here in the US. So Berkeley has Business School
in California with whom we have launched a joint degree
for quite a large cohort of students or a Master
in Management, and students spend time in Paris, first on
at a campus, and then they go to Seoul koreer
So at SKK Business School, and then they spent one
(38:04):
year at Berkeley Heart. And yes, the graduates from this
programmer I mean great people and fine easily good positions
on the job market. So this is why we are
here today on the Eastern Court coast to find another
strategy partner.
Speaker 5 (38:21):
And who's that strategic partner going to day? I mean,
who do you want that to be?
Speaker 11 (38:29):
So we have already partners here of course, as you
can guess, in New York, in Boston we have a
double degree agreement with the MI T we have Pittsburgh,
so we are talking to all of them and will
I mean find the best partner here just to i
mean join Lounge joint program to probably Lounge initiatives in
(38:50):
terms of entrepreneurship artificial intelligence. So we want to do
more than just exchange and yeah, meter to.
Speaker 4 (38:56):
Do more students, more NBA students and in are we
seeing that they want a program that is not just
US based and they want to have some exposure overseas.
Speaker 12 (39:05):
I mean, anecdotally, we are hearing that. I don't have
a lot of the data on that, but in interviewing
a lot of the students in the last few months
about any number of issues that we've been reaching out on,
that is definitely something that they're seeing. And I think
that there's probably something about what's going on in the
world right now and in our country with the government
and the new administration that's making students and prospective students consider,
(39:26):
you know, it might be that I'm not going to
be working in the US, maybe I will want to
go work abroad. What you know, where are the kinds
of programs that are going to really position me the best?
And I think that some of what Dean Mattase is
describing with their partnerships. Also is something that's seen as
an if you're a student that's coming out having done
one of those programs, there is a competitive advantage to that.
Speaker 3 (39:46):
I also think about oh please jump in.
Speaker 11 (39:49):
Oh, I mean we now welcome every year something like
one hundred American students at EDEK.
Speaker 3 (39:55):
This is how big is your student base?
Speaker 11 (39:58):
All ten thousands, okay, coming from all over the world,
so one hundred and twenty countries. What they are looking
for is probably a good retail on investment because of
course suits and fees in France are not the same
as the one in the US. Also probably lifestyle. And
also something which is very important these days is that,
I mean, the purpose of the school is to put
(40:20):
business at the service of common good and this is
something maybe that these days in the US is going
to be i mean put into questions. So we have
a lot of research on climate finance, on ESG, on sustainability,
and this is something that they are going to learn
still learn in Europe and in France especially, which I
suspect will be less a bit less the case in
(40:41):
the US this day.
Speaker 6 (40:42):
Right.
Speaker 12 (40:42):
That is definitely one piece of it is there some
pulling away from some commitments that we see with our
government right now, and that throwing into question where we
saw business school students wanting to go over the last decade,
wanting to do more good with what they're doing, and
now suddenly you find yourself in an environment where it's
like is that going to be prioritized? Are the company
is going to be prioritizing that?
Speaker 6 (41:01):
Like?
Speaker 12 (41:01):
What are the opportunities for that? So I think that
the other thing I wanted to quickly touch on Dematist
was you had mentioned a number of the rise and
the number of American students studying now leaving the US
to study business. Is there a number you can attach
to that? I mean, what have you seen over the
last couple of years in terms of not just specific
to a deck, but you know, broadly speaking.
Speaker 11 (41:24):
You mean in terms of American students moving to Europe?
Speaker 2 (41:26):
Yeah?
Speaker 11 (41:27):
Yeah, so's it's been increasing in France. I mean we
are now welcoming I think four thousand and five hundred
American students, I mean amongst four hundred and fifty thousand students,
So it's not so many of them. I remember that
twenty to thirty years ago, we barely could see American
students in our schools. I mean it's the American students
(41:49):
wanted to stay here. And year after year we can
see that the number are increasing and in all of
the programs, so including in the bachelor program. So we
have a young students moving from the US to Europe
and to France to study I mean business. It's the
case for the masterin Management and also at the NBA level.
So yeah, I think over the past two years we
(42:12):
have increased the number of American students by twenty five persons.
Speaker 12 (42:15):
Wow.
Speaker 5 (42:16):
The In certain regions the US, different business schools are
known for different specialties. If we go to Silicon Valley,
we'll talk to a lot of Stanford graduates. For example,
here in New York, you know, the Wall Street sort
of feeds from NYU and from Colombia. Is there an
industry that your business school feeds.
Speaker 11 (42:32):
Into finance and asset management? I mean this is we
were talking about that just before, I mean, and in
a very special way because we have a kind of recipe,
good recipe to monetize the results of our research. So
we launch a research center in asset management twenty years ago,
and the story ended up with EDEK selling a spin
(42:54):
off in Finance for two hundred million euros at the
Stock Exchange of Singapore. We have to compete with American business,
but this is what you teach, yeah, exactly, Yeah, we
have to compete with you guys and you I mean
schools here are a lot of resources, huge endowments. We
don't reach the same amount, so we have to find
other ways to find resources.
Speaker 4 (43:15):
Fascinating and so that helped to finance defin the school education.
Speaker 6 (43:20):
Yea.
Speaker 11 (43:20):
It goes to the foundation, to the edex Foundation, and
thanks to this money we we launch Adventure Fund for
impact startups. We are Finance a research center on climate finance.
Speaker 12 (43:32):
And I mean we see them on a more individual basis.
In the US, you know, you certainly have faculty members
from school to school who are experts and management and
they've become coaches and management you know, gurus. They're doing
it individually and they are benefiting from it. It is
non institutional, whereas we're seeing much more of something like
what the Taste is describing over the last two decades
(43:53):
as ways to fund the school.
Speaker 3 (43:55):
We've got to run come back soon.
Speaker 4 (43:56):
This was really fun. Of course, our Dimitri Cassanides and
of course Dean Mattee of the Edek Business School.
Speaker 3 (44:02):
Thank you, brother Mac.
Speaker 6 (44:06):
I'll about you.
Speaker 7 (44:07):
Let me drive.
Speaker 5 (44:08):
Oh no, no, no, no, this is not a toy.
Speaker 10 (44:10):
He's going to dug honey. Please, I'll do the gravels.
Speaker 2 (44:15):
Let's wait.
Speaker 4 (44:16):
I want to drive.
Speaker 2 (44:16):
It's good question, drives.
Speaker 10 (44:23):
This is the drive to the clothes dot plums for me.
I think we'll Drivin Don on Bloomberg Radio.
Speaker 3 (44:30):
All right, TikTok, everybody.
Speaker 4 (44:31):
We've got by eighteen minutes left in today's trading session.
Just heard Charlie Palette and Dol Maloney breaking down the
trade for you on this Wednesday, and we're bouncing around
near our highs of the session. So that means up
about one and a quarter percent of both the S
and P five hundred, the Dow Jones Industrial average a
little bit higher on a percentage basis. When it comes
to the Nasdaq one hundred, it is up nearly one
(44:53):
and a half percent. Tim but a lot of this
trade has been on I think it's safe to say
the rollback of.
Speaker 3 (45:00):
The tariffs.
Speaker 5 (45:01):
Yeah, you should look at what automakers are doing. I
know it's too late to change your gainers. There are
they including your gears?
Speaker 2 (45:06):
I don't think.
Speaker 1 (45:08):
No, I don't know.
Speaker 3 (45:10):
I didn't put them on.
Speaker 10 (45:11):
Did I do that?
Speaker 5 (45:12):
I wasn't going to say anything, but you.
Speaker 10 (45:14):
Know I just did.
Speaker 8 (45:15):
You're usually so good.
Speaker 10 (45:16):
I know I didn't.
Speaker 5 (45:17):
It was right before we went live. I noticed, and
I'm like, I don't want to throw that at it
right now.
Speaker 3 (45:21):
No, you know what.
Speaker 4 (45:22):
I put him in the chat before Tesla because initially
Tesla wasn't really up on the day and the other
automakers were.
Speaker 12 (45:28):
But all right, all.
Speaker 5 (45:29):
Right, Aaron Kennon's gonna help us make sense of this.
He's a co founder and CEO at Clear Harbor Asset Management,
more than a one point five billion dollars in assets
under management. Aaron back with us from Stanford. Aaron, how
do you make sense of the uncertainty that we're seeing
play out right now? This is like a flashback to
the first trumpet term? Right?
Speaker 6 (45:49):
Well, I think clearly the market's trying to sort out
a bunch of uncertainties. One is the terroriffs that you
just mentioned, and whether or not it's it's bark or
bite or a combination of the two. And you know,
today we saw a little bit of you know, the
scalpel taken out with auto protection on trade or but
there are also other uncertainties of course, Ukraine and how
(46:09):
that's going to settle out, inflation or deflation. Is China
growth back? It was on its heels for a while.
They just announced a big stimulus. How about US growth?
We've seen interest rates, you know, trend lower over the
last several weeks, about fifty basis points since mid mid January.
I think there's a concern about US growth and so
(46:33):
it certainly doesn't help the tariff uncertainty leads I think
investors to reduce their exposures, if their leverage reduced leverage,
if their long only investors, maybe raise a little bit
of cash. Today's an exception to the recent trends of
the downward slope in the markets, and we welcome that,
but that's markets have been technically over sold now for
(46:53):
the last couple of days.
Speaker 4 (46:54):
Hey, Aaron, do you think that there is a Trump
put in the US equity market.
Speaker 10 (47:00):
Question? Carol?
Speaker 6 (47:00):
I think there certainly was one during his first term.
He seems more intent on certainly using tarris as a
tool and maybe not as a tool that's necessarily going
to be temporary in nature. Now would suggests to me
that maybe there's less of a Trump put for Trump
two point oh versus one point oh. But you know,
(47:21):
certainly to the extent that Congress has to be involved
in some of this action, there's a there's at least
a put there. And my suspicion is that they know
that they need to move forward quickly with everything from
tariffs to DOGE to fiscal constraint in these initiatives before
the midterm elections, and so the next few months will
(47:42):
be really critical in that regard.
Speaker 5 (47:45):
Does you know, to sort of follow up on Carroll's question,
we know that the president looks very closely at financial markets.
Is it is it working as a backstop to his policies.
Speaker 6 (47:58):
I think there are a couple of things going on.
I mean, I think think clearly the tariff desire that
he has will have a tendency to weigh on growth
to reduce profitability on average across the economy. And I
think that's the other trend is that we're seeing less
(48:20):
fiscal stimulus here in the US tim in Trump two
point zero. Not only are we seeing Chips Act, Inflation
Reduction Act, which was passed under Biden, but the massive
stimulus even passed under Trump one point zero after COVID struck,
a lot of that's both waning, and then of course,
through executive fiat, he has cut some of the remaining
(48:41):
funding off. And what we're seeing across the pond in
Europe is really just the opposite. Is really a strategic
or structural shift in Europe that we're seeing where Europe's
realizing they have to defend themselves. Jeremy just announced yesterday
they're going to spend twenty percent of GDP over the
next ten years on defense spending that could contribute one
(49:03):
percent of GDP to that economy, third largest economy in
the world, and then the EUS meeting within the next
day or so to talk about spending another five to
six hundred billion dollars over the next three to four years.
We haven't seen that type of not just military spending,
but deficit spending in Europe in our lifetimes. And so
there is a liquidity shift, I believe afoot and we're
(49:26):
seeing that with European equities up in the teens this
year about thirteen percent. And of course the US is
sort of a different story with SPS still down. Yere today,
equal weight smps up a little bit. Mag Seven's on
its heels, actually weighing down the US market rather than
lifting it as we saw in the last two years.
Speaker 4 (49:45):
I so love that you went there, because we really
haven't had a lot of time to spend on the
story that came out of Germany overnight, and you're right, Aaron,
the DAX was up almost three point four percent. Tim
and I have spent a lot of time this year, though,
talking about the outperformance of markets outside of the United States.
As you mentioned Europe, the eurostocks fifty is up about
(50:08):
twelve percent, the CAC forties up eleven percent, the DOX
is up. It looks like about sixteen percent year to date.
This outperformance that we are seeing overseas, that liquidity shift.
Is there something that could happen in the United States
that affects that liquidity shift that you're talking about, that
(50:28):
maybe going outside the US? The US Commerce Secretary Howard
Lutnik earlier on Bloomberg talking about the policies of the
United States being ultimately good for the US stock market,
good for the US bond market.
Speaker 3 (50:40):
How do you see it longer term?
Speaker 6 (50:43):
I think there is a I do believe in American
exceptionalism from a regulatory standpoint. From an ingenuity perspective, we
have a high allocation of technology in our indices, and
so in that regard, I think the liquidity will ebb
and flow here, but always sort of want to flow
rather than ebb. The challenge is valuation in the United
(51:05):
States relative to the rest of the world right now,
and I think that's where some of those liquidity concerns arise.
And of course tariffs don't help. And to the extent
that there's a resolution to the war in Ukraine and
in a way that provides a level of fairness to
Ukraine and to Europe, that could put a halt on
(51:26):
the margin to this sort of trend that I'm talking about,
which is massive military spending in Europe. And then you know,
looking further across the pond to China, you have a
lot of fiscal stimulus that was just announced there recently
as well, spending up to ten percent of deficit to
GDP to try to create five percent of growth. So
there's opportunity in that part of the world as well.
Speaker 4 (51:47):
Yeah, it's getting interesting around the globe.
Speaker 3 (51:50):
All of a sudden, aerin thank you.
Speaker 12 (51:52):
Good to check in with you.
Speaker 3 (51:53):
Aaron Kennon, co founder, chief.
Speaker 4 (51:54):
Executive officer of Clear Harbor Asset Management. They've got over
one and a half billion dollars in assets under management.
You're in joining us once again from Stanford, Connecticut.
Speaker 2 (52:03):
This is the Bloomberg Business Week podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live weekday
afternoons from two to five pm 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
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Speaker 2 (00:08):
This is Bloomberg Business Week Insight from the reporters and
editors that bring you America's most trusted business magazine, plus
global business, finance and tech news. The Bloomberg Business Week
Podcast with Carol Masser and Tim Stenovek on Bloomberg Radio,
Well General.
Speaker 3 (00:27):
Motors and ford Man.
Speaker 4 (00:28):
They have led a rally across automakers after US COMMAS
Secretary Howard Lutnik had initially teased an update related to
the trades standoff between the US, Canada and Mexico, and
we've had headlines since showing that we will see some
kind of rollback, it seems when it comes to tariff.
So watching that go on and play out, and we
have seen, as I mentioned, those two names go hire.
(00:48):
Tessa right now is up about one point six percent
as well, but that's today because the stock is down
a lot, in fact, from its high back in mid December,
down roughly forty percent ince and then giving back much
of its ninety percent gain since that November election here
in the United States, and today a bunch of headlines
about the company the ev maker, offering up some perks
(01:10):
to drum up sales, and we'll explain why maybe they
are looking to do that because they've had some disappointing
sales numbers. Tim We'll get into that in just a moment.
Speaker 5 (01:17):
Okay, Well, here to go through the flurry of headlines
on Tesla today is Bloomberg New senior technology reporter and
a contributor to the Elon Inc. Podcast, Dana Hole. She
joins us from San Francisco. Dana some of the headlines
that Carol mentioned. In addition to those, Tesla sales plunged
seventy six percent in Germany last month. China sales slumped
in February to the lowest monthly figure in more than
two and a half years, President Trump pulling the plug
(01:39):
on support for EV subsidies. And then there's the perks
that Tesla is now offering up to drive sales. How
is Tesla's business doing.
Speaker 6 (01:48):
So?
Speaker 7 (01:48):
The core business? So I guess big picture, the first
quarter is typically slow for Tesla. You know, they had
a very strong fourth quarter. First quarter is always sort
of slow for them. But you are definitely seeing a
lot of backlash against the brand because of Elon Musk
and his politics, particularly in regions where he has been
very vocal. So for example, you know, in the US,
(02:10):
he spoke at inauguration. Tesla sales in the US are
not doing so great. You've seen protests at Tesla showrooms
across the country. In Germany, where Musk got very involved
vocally in the German elections, you're also seeing a bit
of a backlash there. And you know, the proof will
just really be in early August when we actually get
first quarter sales. But I would note that Tesla also
(02:32):
has a kind of older lineup and even though they
are in the process of refreshing the model, why the
cars are not particularly new, and the cyber truck is
not doing super great. So all of these things are
weighing on sales.
Speaker 5 (02:44):
I thought the cyber truck was doing pretty well.
Speaker 7 (02:47):
I mean it's doing okay, it's just not like F
one fifty, you know level sales. And I think also
economic anxiety, like a car is a huge purpose purchase.
Right now, we have you know, interest rates are still high,
a lot of people are losing their jobs, people are
worried about the economy in general, Like like, you know,
(03:08):
you're seeing a lot of I mean, you know, it's
too early to say, but typically people pull back on
making big purchases when they're worried, and that's going to
impact the auto industry as a whole.
Speaker 4 (03:19):
Hey, Dan, It remind us in terms of Tesla where
most of the revenues come, It's the US market, And
is that where the growth is the Yeah.
Speaker 7 (03:28):
Go ahead, Yeah, the US has always been strongest market,
followed by China and then like other international markets, are
you know, roughly a third and you're seeing, you know,
Tesla is definitely always entering new markets. Their global footprint
it continues to expand, but their brand is mostly well
known here in the US and in China.
Speaker 5 (03:48):
At what point do shareholders at Tesla and look, it's
still had an amazing run, especially over the last year.
We were just showing the chart there. At what point, though,
do shareholders say, okay, elon time in Washington, d C.
It's time to go back to Texas, or to go
to Fremont, or to go wherever and focus on Tesla.
Speaker 7 (04:08):
I mean, this has been a perennial problem with Tesla
for a long time, right, Like Tesla's shareholders have always
spot to have Musks full attention. When he bought Twitter,
Tesla's shareholders were very upset about that, but Elon is
going to do what he wants to do. The board
has been completely silent and less you know, unless the
(04:29):
board makes a move or big institutional shareholders really raise
a rucus, it's hard for me to see that anything
is going to change. At some point. You could presume
that the shares would fall low enough that Elon would
kind of like wake up and refocus his attention. But
he is very squarely in Washington. He's in Washington today,
and you know the company. I mean, so is anyone's
(04:51):
guess as to like what would shake him into action?
Speaker 4 (04:54):
Yeah, I keep thinking about that, and I did you know,
it's taking a look at some of the major holders.
He of course is the biggest holder right of Tesla's stock,
but it's.
Speaker 3 (05:02):
In a lot of index funds.
Speaker 4 (05:04):
We all own Tesla, right because it's just such a
massive company, and it's owned by, as you said, a
lot of the big institutional investors. At the same time,
you say, you know, he does continue to expand I
was reading something about signing a five year lease Tesla
that is for its first India showroom. What's the potential
of this market for Tesla?
Speaker 7 (05:27):
I think, you know, obviously. I mean, India is a
growing economy. It would be it would be great to
have a foothold there. You know, the real competition at
Tesla bases globally is with BOID and China. So anything
that Tesla can do to kind of grow its brand
and its footprint in India would be a hedge against
China's influence. But I think that you're seeing, you know,
(05:48):
BYD is expanding globally also, and Tesla just doesn't have
the kind of product pipeline with a really new electric
car or that lower cost vehicle that everyone is waiting for.
And to be clear, like the market is still very confused.
Is Teesla coming out with a twenty five thousand dollars
car or is it just a cheaper version of the
existing model Y and three or is it the robotaxi?
(06:10):
And like you know, we, I mean, investors are very
eager to hear what is actually next. But Musk is
not even really tweeting about Tesla all that much. I mean,
his posts are largely about Doge. But this has been
like the sort of catch twenty two that Tesla shareholders
have been in for a long time.
Speaker 5 (06:28):
You know, this is somebody you followed for years. You know,
I don't want to say you know him well, Dan,
I'm not going to like, you know, go there, but
you do know what he does very well. You know
his patterns very well in the way he works. If
you think about what he did during the Model three
development at Tesla's headquarters, you know, sleeping on the floor there.
He did the same thing when he bought Twitter a
(06:49):
few years ago, he moved a cot into headquarters there.
We've heard he's doing that or has done that at Doge.
He sort of seems to go be really intense and
then sort of move on to the next thing. Do
you think he'll move on from Doge?
Speaker 7 (07:03):
I think at some point he might lose interest. I mean,
this is clearly where his focus is right now. But
he has a lot of demands on his time. He's
overseeing six companies. He's clearly very interested in Starship and
the next Starship launch when it comes to Tesla, has
you know, he's My sense of him is that he's
sort of bored of just the car business in general.
He sees the future of the company as being on
(07:25):
AI robotics and the robotaxi. We reported exclusively last week
that Tesla has applied for a permit in California to
begin some kind of ride hailing service where they would
oversee the fleet. It's not a robotaxi yet because they
don't have like approval to actually operate a robotaxi, but
they are making moves to get into the ride hailing
(07:46):
business in California. And so you know, he, I mean,
he hasn't completely given up the reins. It's just like
it's just wild as always that, Like you have a
company as large as Tesla, with so many thousands of employees,
and they don't have a full time CEO, and they
don't have a clear number two.
Speaker 8 (08:05):
Yeah.
Speaker 4 (08:05):
I was going to ask you that, like who's the
number two? But you know, I look at the dees page,
the description page on the Bloomberg and he's the CEO
Elon Musk, right, And so it is interesting to see
him spread as he often is, along so many different things. Dana,
thanks so much shedding some light a lot of light
on Tesla on this Wednesday. Bloomberg New Senior Technology reporter,
(08:26):
contributor to the Elon Inc.
Speaker 3 (08:27):
Podcast.
Speaker 2 (08:28):
You're listening to the Bloomberg Business Week podcast. Catch US
live weekday afternoons from two to five pm Eastern. Listen
on Applecarplay and Android Auto with the Bloomberg Business app,
or watch US live on YouTube.
Speaker 4 (08:42):
All right, let's get to it. Let's get more on
those fed Page Book headlines that just crossed the Bloomberg terminal.
We also had a ADP jobs report earlier today showed
a slowdown in the US labor market. So rolling it
all together, as we like to do with our Mike
McKee's Bloomberg News International Economics and Policy correspondent right here
in studio.
Speaker 9 (08:59):
Yes, I'm smiling because of reading the summary of the
Beige Book. And if there were three words that would
describe the Trump administration policies right now, I think they
would be tariffs, immigration, and eggs. All three make it
into the Beige Book. You mentioned overall activity rising slightly.
That's sort of the headline word, with six districts reporting
(09:22):
no change, for reporting modest or moderate growth, and two
noting slight contractions, consumer spending lower. On balance, we've seen
some data to that effect, although they do attribute a
little bit of it to unusually bad weather. Manufacturing slight
to modest increases, But the part that caught my eye
(09:43):
was some contacts in the construction sector expressed nervousness around
the impact of potential tariffs on the price of lumber
and other materials. So that does make it into the
comments that businesses are giving to the FED labor markets
slightly higher on balance.
Speaker 6 (10:03):
UH.
Speaker 10 (10:04):
Many districts citing job growth.
Speaker 9 (10:06):
In healthcare and finance, which is unusual because today we
saw ADP report big decline in healthcare hiring, so I'm
not sure what the sense that makes. Contacts in multiple
districts also said rising uncertainty over immigration and other matters
influencing current and future labor demand.
Speaker 10 (10:27):
So those immigrations R well.
Speaker 9 (10:30):
This is basically sort of the anecdotal backup to the statistics.
And then I were just talking about prices increasing modestly
moderately in most districts.
Speaker 10 (10:41):
Many districts noted that higher prices for.
Speaker 9 (10:43):
Eggs and other food ingredients for impacting food processors and restaurants.
Speaker 10 (10:48):
So people are all these things that we laugh about.
People are feeling out there.
Speaker 4 (10:53):
I have to say, I didn't even know, because I
know people here at work have said twelve to thirteen
dollars a dozen.
Speaker 3 (10:57):
I said, honey, what are we paying for eggs? Is
like seven books?
Speaker 5 (11:00):
Do oh, I got to come to New Jersey get
my eggs.
Speaker 9 (11:03):
I guess that's what I got eighteen for eight dollars
about a week ago.
Speaker 5 (11:07):
Sounds like a Wegman's deal. That's why I hear No,
I hear eighteen at Wegmans is the way to go.
Speaker 10 (11:14):
But well, you grab eighteen when you can.
Speaker 5 (11:16):
Yeah, hey, Mike, speaking of eggs, I do see it
mentioned four times in the Beige Book. In this current
Beige book. When you see something like that, give us
some context as to like when the surveys were taken,
so we can have an understanding of timing, because a
lot is changed in a very short time.
Speaker 9 (11:31):
Well, the Fed puts basically surveys the in between period,
the period in between meetings, and in this case, what
they're saying is the report was information on or before
February twenty fourth, and that was right at the height
of the There are no eggs concerns, so.
Speaker 10 (11:50):
It's relatively timely here.
Speaker 9 (11:52):
The thing about eggs, of course, is that it's a
it's because of bird flu, so interest rates are going
to fix that problem one way or another. But it
does show the psyche of what people are thinking.
Speaker 5 (12:05):
Interest rates aren't going to fix lumber prices either.
Speaker 9 (12:07):
Nope, although they could have an effect on housing, but
they're not going to make lumber any cheaper. And that
was one of the things when I was down at
the NAME National Association for Business Economics meeting on Monday,
people were talking about commodity prices going on, particularly lumber,
because there was a whole session on how do we
ease the crisis in housing, and the concerns were that
(12:31):
you need to build more homes, but if the price
is going up a lot, then people aren't going to
be buying them anyway, even if interest rates come down.
Speaker 3 (12:40):
Right, if you build them, they won't come if they're unaffordable.
Speaker 4 (12:43):
Hey, listen, One thing I want to ask you before
we get into kind of a bigger story about the
US economy is the ADP Jobs report. Hiring is companies
slowing in February, the lowest patents July? What do we
need to know?
Speaker 10 (12:56):
It's a kind of a weird report.
Speaker 9 (12:58):
We don't know exactly whether you never know with ADP
whether it is giving you a good read or not.
But the interesting things about it were that we've heard
bad things about manufacturing, and manufacturing gained eighteen thousand jobs.
Speaker 10 (13:14):
We haven't seen anything like that in a long time.
Speaker 9 (13:16):
How bad was the weather? Everybody talks about the weather
effects on all the data. Well, construction went up by
twenty six thousand jobs. How does this happen? Service industries
were the weak part of the report instead of the
manufacturing side. As I said, health and education, which is
usually the biggest job creator in the country, lost.
Speaker 10 (13:35):
A lot of jobs.
Speaker 9 (13:35):
So I'm not sure how much stock people are going
to put in ADP this month.
Speaker 5 (13:39):
Does it well? I mean, I guess we'll find out
on Friday if it actually gave us some sort of
read through to Friday.
Speaker 10 (13:43):
Yeah, does it? Can it? It usually does not.
Speaker 9 (13:46):
Sometimes it gives you a direction, but the magnitudes are
never anything near which and they claim we're not supposed.
Speaker 10 (13:54):
To be predicting. This is just what ADP found, all right.
Speaker 4 (13:56):
So we've talked to you about the recent flow of
US data, and we've talked about weakness consumer sentiment, consumer spending.
We did talk about the manufacturing data that was recently weak.
It's also a topic that came up this morning in
Bloomberg Surveillance. They hosted the US Commerce Secretary Howard Lutnik.
We wanted to play a little bit of the conversation
between the secretary and Surveillance co host Jonathan Ferrell on
(14:17):
the recent signs of a US slowdown. So listen up, everybody,
you're looking at data that's Biden data.
Speaker 2 (14:24):
Do not try to besmirch my President Trump with Biden's nonsense.
Speaker 6 (14:30):
Do you think the manufacturing number is Biden date?
Speaker 10 (14:32):
So I just want to be very clear, that's your opinion.
You're incito to it. You think that's his dates?
Speaker 2 (14:37):
My opinion?
Speaker 10 (14:37):
Okay, what possible could change?
Speaker 2 (14:40):
Seriously, we are in early March. My president took over
January twentieth. You think economic data coming out in early
March is Donald Trump related data monthly, mister secretary?
Speaker 4 (14:55):
All right, of course, US Commerce Secretary Howardlutton, but Bloomberg
Jonathan Farroll earlier on Bloomberg Surveillance. So the Biden economy
versus the Trump economy, is the Commerce secretary fair to
say that this isn't yet indicative of policies coming out
of the Trump White House.
Speaker 9 (15:11):
Yeah, give Howard credit on one side and ding him
on the other side, because it is largely still the
Biden economy. Trump only took over on the twentieth of January,
and the data we're getting is largely from January, although
the ism numbers that we got this week are for
(15:35):
February and he was president during February. But the part
where Secretary Lutnik is completely wrong is that Biden when
he says Biden left us a mess of an economy,
the economy was very strong.
Speaker 10 (15:47):
So you know, it's politics.
Speaker 5 (15:51):
It's everything is politics, Mike.
Speaker 10 (15:53):
It seems like politics is apple sauce. I think that
was will Rod.
Speaker 5 (15:56):
But let's try to cut through that a little bit.
Is there a certain point with certain data where this
can become Trump's economy? Like when can we start.
Speaker 9 (16:05):
Selling It's it's really psychological. It's when do people voters
start associating the president with the economy.
Speaker 10 (16:13):
There's always a debate when we do those tables that.
Speaker 9 (16:16):
Say, you know, how many jobs were created under the
Biden administration versus the Trump administration versus the Bush administration,
because they take over on the twentieth, so you of January,
so you and the survey for January payrolls has taken
before that, So there's always an argument, Well, do you
include January in the previous presidents or you just start
with the calendar year whatever. None of that really matters.
(16:40):
It's once you get to the February data, which we're
getting into now. You can argue that's the current president
because he's the president. But the thing is, presidents always
get credit for things that go right in the economy,
even though they probably had very little to do with it,
and conversely, they get to blame for things that go badly,
(17:02):
even if they had nothing to do with it.
Speaker 4 (17:03):
There's also lags and policies, so there can be policy
from a previous president that you don't really see the
results of it.
Speaker 10 (17:08):
That's the little bit the harder thing.
Speaker 9 (17:10):
Yeah, you know, a lot of presidents pass some measures
to increase hiring during their terms and then you see
a bump in hiring and that you can definitely attribute
to them. But it's really a vibe to use. To
use a word that people have used a lot about
the economy these days.
Speaker 3 (17:25):
Inflation.
Speaker 4 (17:26):
I know we've talked about it at nauseam with you,
but I want to go back there because regarding the
inflation during the Biden economy, you know exactly what caused it.
And why it's still been sticky because I think there
is a blame game that goes around. There is a
lot of money slashing around coming off the pandemic, and
had a lot of money chasing stuff that certainly put pressure,
and there were supply chains disrupted.
Speaker 3 (17:45):
Is that you know?
Speaker 4 (17:46):
So help me understand when we're kind of finger pointing
when it comes to inflation today, who's responsible and what
really gets us out of it?
Speaker 9 (17:54):
Probably the people who are responsible are the people who
are sitting in the c suites of companies decide what
to charge because at this point, yes, we had a
lot of extra money go into the economy, and yes
we had massive supply chain disruptions, and the literature economic
literature studies basically put most of the blame on the
supply chain disruptions which caused companies to raise prices. But
(18:20):
this is an argument about supply versus demand that is
going to go on and on and on. Both sides
have arguments to make. But we've gotten down to the
three percent level, and it's that last mile that's very difficult,
and that's because we have some unusual or individual categories
that may have a bigger weight than others. Like used
(18:42):
cars and certainly housing that have not performed as you
would expect. You would think that house prices would go down,
but because we had this unusual period of very low
interest rates and everybody locked in at low interestrates and
they don't want to they don't want to sell. And
then you've got problem with not enough new homes being
built because there's a lot of problems at the local
(19:04):
level of zoning and things like that. So all these
things contribute, and it's not something that the national the
president put it that way and or the FED chairman
can solve.
Speaker 5 (19:16):
Well, the president those policies, many would argue, can affect
the inflationary environment. Tariffs, for example, you do have some
economists coming out, many economists saying that tariff's on goods
from Canada and from Mexico and China.
Speaker 9 (19:31):
Would John Williams yesterday the New York Who did he
say that to somebody?
Speaker 10 (19:37):
I know, really good looking guy, modest too Well, Tariffs
are inflationary.
Speaker 9 (19:45):
We know that the question is do they just push
up price levels once or do they keep going up?
And that was the point that Williams was making, is
we know that the price level will rise, but we
don't know how whether it will continue because Trump has
talked about so many different tariffs coming on at many
different times that if that happens, then you could have
an inflation problem. And then you might get an inflation
(20:08):
psychology where companies are saying, well, I keep having to
pay more, so I'm going to raise my prices to
meet this. If it's a one time move, maybe they don't.
So that's the hard part about knowing whether this is
going to contribute or not. It'll contributes something, but is
it something that really underpins inflation going forward?
Speaker 4 (20:28):
All right, great stuff, Thank you so much, really appreciate it,
and should point out if you missed the John Williams
conversation with Mike yesterday from Bloomberg invest worth checking it out.
Speaker 3 (20:37):
It's on the Bloomberg terminal. It's also at Bloomberg dot com.
Speaker 4 (20:40):
Some really great views in terms of the US economy
and Fed policy.
Speaker 3 (20:45):
Thank you, Mike.
Speaker 4 (20:45):
Bloomberg News International Economics and Policy correspondent Michael McKee right
here in studio.
Speaker 2 (20:51):
This is the Bloomberg Business Week podcast. Listen live each
weekday starting at two pm e stern up on applecar
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 played Bloomberg eleven thirty.
Speaker 4 (21:10):
Greenland, it was mentioned last night during President Trump's excuse
me addressed to the Joint Session of Congress, not of course,
the first time that he has talked about it and
about gaining control of the territory. This vast, isolated land
finds itself thrust into the middle of the global security debate.
This says, Greenland faces another election and one that again,
(21:30):
as it has for virtually every election for almost half
a century, is about seeking and promising independence from Denmark.
Speaker 5 (21:38):
And yet this year, because of the interest and by
the US President, independence takes on much more importance. We
decided it was time to really dig into the history
of Greenland and understand more about why we're talking about
it so much. To do that, we had to Berlin
and to a Bloomberg Business Seek Europe editor David Rocks
David Greenland. Why are we talking about it so much?
Speaker 8 (21:58):
Well?
Speaker 10 (21:59):
Because of Trump?
Speaker 8 (22:00):
I mean, you know, nobody has been thought much about
Greenland other than Greenlanders of course, for you know, the
better part of fifty years, and all of a sudden
Trump started talking about it, you know, in his first
term a little bit, but more recently in the past
six months or so, and everybody wants to know what's
going on in Greenland.
Speaker 4 (22:19):
Well, and I have to say, I think it's fair
to say, David that everybody's like Greenland country, territory, who
owns it, who oversees it? Like what's the political history
that we need to kind of understand about Greenland? And
really right now and for what the last three hundred years,
it's relationship with Denmark.
Speaker 8 (22:37):
So it's a territory. It is not a country. It
is controlled by Denmark. It has been for about three
centuries since some Danish missionaries moved in there, you know,
about three hundred years ago, but they've been in relatively independent.
(22:57):
In seventy nine they were given control of domestic issues,
and then since two thousand and nine they've had the
right to oversee almost everything except for defense and foreign policy,
although they don't actually they don't actually do everything that
they have the right to do because there's only like
fifty thousand people there, right.
Speaker 5 (23:16):
Yeah, it's a very sparsely inhabited place. In recent years,
though Greenland's relationship with Denmark has really become strained.
Speaker 8 (23:27):
Why is that, Well, because people in Greenland feel that
they don't get the respect that they deserve. There's still
reports of some degree of kind of Danish people looking
down at Greenlanders, and there's been fairly recent reports of
(23:51):
things like for sterilization and putting Greenland kids into schools
that they take away from their families, and.
Speaker 11 (24:00):
Putting into boarding schools.
Speaker 8 (24:02):
The whole kind of things that have happened in the
US and Canada to native populations have happened in Greenland,
and so people there are not super happy with Denmark.
Speaker 5 (24:13):
There's a question about independence, and there's also certainly the
US question how in the upcoming election, what's the conversation
happening about independence and how has it taken on sort
of a new importance given what we've heard from President Trump.
Speaker 8 (24:30):
Well, all right, so I guess it's virtually certain that
that the winner of the election will be a pro
independence party because all of the major parties are pro independents.
So there's gonna be a pro independence party, whoever it is,
(24:51):
running the place after the election on March eleventh. But
that said, the popular generally is pro independence, but they're
not pro being taken over by the US.
Speaker 3 (25:08):
They want to be Greenlanders, all right.
Speaker 4 (25:11):
So let's roll in the US aspect. The US has
had military base or a military base there, right, So
there has been a.
Speaker 8 (25:21):
Preparation certainly since the seventies eighties when I was growing up.
Speaker 10 (25:25):
It was a big deal back then.
Speaker 8 (25:27):
You know, I can't remember exactly when it started, but
it's been around for a long time, decades and decades,
and it's what it is is it's a place where
there's a lot of technological infrastructure, radar and things like
that that you know, back when we were really worried
about the Soviets sending missiles across, Greenland was going to
(25:48):
be the place where they would be spotted first, as
it were Greenland in northern Canada.
Speaker 4 (25:52):
Well, and I have to say all of us talking
about Greenland has made us roll out our maps or
you know, pull them up on our phones. Having said that,
so why did we And we did this in the
introduction about the importance of the outcome of this the
election and why it means so much for global national security,
So playoff of kind of you know where Greenland is
and why it is maybe such a necessary territory, at
(26:15):
least that's why President Trump says the US should have it.
Speaker 8 (26:18):
Yeah, I mean necessary territory for the US. I'd say
that's highly questionable. But a strategic location, no doubt. Greenland
is a it sits kind of right between the Arctic
and the North Atlantic. It's a place where, you know,
if Russian warships wanted to get you know, head towards
(26:41):
the US, I guess they'd probably have to go past Greenland.
You know, Will that ever happen, highly unlikely, but that
is a consideration. But then also there's a lot of
mineral wealth there, and so it's not just sort of
security in the in the way that you know, we
want to protect ourselves from whatever our perceived in enemies
might be, but rather, you know, to have access to
(27:05):
the kind of mineral wealth, particularly rare earths and things
like that that are needed for electric cars.
Speaker 5 (27:11):
So we have strategic shipping routes an importance when it
comes to defense from a United States perspective. And then
the minerals that you mentioned, David, Realistically, is Greenland becoming
part of the United States something that could even happen.
Speaker 10 (27:35):
You don't want to listen to.
Speaker 8 (27:36):
Me predict what's going to happen, because I never would
have predicted that we'd be where we are right now.
But you know, Greenlanders don't want it. They want independence,
they don't want to be Americans. Then what independence would
look like is not something that they particularly want to say.
(27:57):
You know, it's a lot of people there think, well,
we want to be independent, but we want to still
have close ties to Denmark.
Speaker 10 (28:03):
So will it happen?
Speaker 8 (28:07):
You know, a fully independent Greenland, let's just say, would
be far more susceptible to some to US influence than
a Greenland that sits under Denmark, which some people in
Greenland actually recognize or would say, David.
Speaker 4 (28:23):
I am curious too about what Denmark says in all
of this, or what they've continued to say, and the
importance of they obviously provide financial support to Greenland. Can
Greenland support it on its own, say, you know, survive
on its own, exist on its own without some kind
of financial support from someone.
Speaker 8 (28:44):
I mean, certainly right now it would not appear that
they can. I mean, the economy is the vast majority
of economic output is basically fishing, right, and so they
don't have a particularly stronger dynamic economy, They've got a
lot of mineral wealth. They sit in a place you know,
people sort of want to control them, but it's not
(29:07):
it doesn't create a lot of cash flow right now.
So yeah, Denmark subsidizes Greenland to a huge extent. Denmark
has you know, over the decades, they've been pretty anti
the idea of independence, but the political leadership in Denmark
is starting to come around to okay, maybe we can
(29:30):
sort of create some sort of middle ground, more more
independent than they are now. But we want to be
the country that helps support them. We don't want them
to be to become part.
Speaker 10 (29:43):
Of the US.
Speaker 5 (29:44):
So what you're saying is the endgame here could be
in effect really good for Greenland because they're getting so
much attention, and perhaps they're getting the attention of Denmark.
Speaker 8 (29:57):
Yeah, the chances are they'll get more attention from denm
and you know, by extension, you know, the rest of Europe.
But that said, you know they're yes, they're getting a
lot of attention, but it may not really be the
attention they really really want.
Speaker 4 (30:15):
One thing, I am curious too, because we are talking
a lot lately, certainly with this administration, about mineral rights
and rare earth minerals and the like, whether it's Ukraine,
whether it's Greenland. This story on the Bloomberg, you know,
gets into various mining projects.
Speaker 12 (30:32):
They not.
Speaker 4 (30:33):
At least four mining projects have been halted since twenty
ten following questions about their environmental and financial costs. So
what is the likelihood that you know, these rare earth
minerals are actually unearthed? I mean, does climate change make
it potentially more easier accessible, viable?
Speaker 5 (30:51):
Like?
Speaker 3 (30:52):
Yeah, how and how and how wealthy is this deposit?
Are these deposits?
Speaker 8 (30:57):
So Greenland is you know, the vast majority of it
I can remember is eight percent is covered in ice
and ice that's miles thick. Okay, so you're not going
to get to what's underneath that ice very easily. Obviously
that ice sheet is melting, and it's melting faster than.
Speaker 10 (31:18):
We really want. But those are the facts.
Speaker 8 (31:21):
And so as the ice sheet melts more earth with
minerals underneath it is becoming accessible.
Speaker 10 (31:31):
How accessible is that and.
Speaker 8 (31:33):
Would Greenland really want that? That remains unclear because there's
been some environmental pushback in Greenland to mining projects. You
said that these four mining projects have been canceled. That's
been at least a couple of them have been on
environmental grounds, So you can't you can't count on everybody
in Greenland saying yeah, just dig baby, dig. Well.
Speaker 5 (31:56):
The reason we got to speak to David this afternoon
is because there is this great story in Bloomberg Business Week.
Sanson Sarah Sullan went to Greenland and got to experience
the area, but also talk to folks there. I do
encourage everybody to check out the story on the Bloomberg terminal.
It is in Bloomberg BusinessWeek.
Speaker 4 (32:15):
David, thank you so much. We've been dying to do
this in this deep dive, so thank you.
Speaker 12 (32:19):
Thank you.
Speaker 4 (32:20):
David Rocks, Bloomberg BusinessWeek Europe editor, staying up late for
us out there in Berlin, so appreciate it and do
highly recommend you check it out on the Bloomberg and
at Bloomberg dot com.
Speaker 1 (32:30):
You're listening to the Bloomberg Business Week podcast. Catch us
live weekday afternoons from two to five eas during listen
on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 5 (32:43):
The story from our Bloomberg News team earlier this week,
getting our attention At business schools across the US, graduation
fast approaching the mood, though subdued. NBA programs that once
offered a glide path to lucrative jobs are finding fewer
and fewer seats on Wall Street and in corporate America
for their graduates. At every one of the nation's top
schools known as the mag seven. I didn't know this,
(33:04):
they were known as the Maxie I neither job Blason
outcomes have declined since twenty twenty one, and this year
is looking no better. No joke, Carol, you can attest
to this. As I was writing this intro, I got
an email from Dean mclaris at Columbia Business.
Speaker 3 (33:17):
School right very grad grad.
Speaker 5 (33:19):
The subject says hire CBS and it's like an email
talking about recruiting.
Speaker 4 (33:24):
All right, So that is the view from schools inside
the United States. Let's go outside the US to France.
We've got Emmanuel mctay, dean of the French Business School
Etic Business School with US, as well as Dimitro Cassanides
Bloomberg new senior editor.
Speaker 3 (33:37):
She spearheads our global.
Speaker 4 (33:39):
Business coverage business school coverage, I should say, for Bloomberg
Business Weekend. They're both here in our Bloomberg Interactor Broker studio.
Speaker 3 (33:46):
Welcome, Welcome, Nice to have you here. Hello Dean Mattay.
Speaker 4 (33:51):
Before we get going, we want to ask you about
what you are hearing and seeing from other business school
deans during your visit here to the United States and
other business s goals.
Speaker 3 (34:01):
How much is the job market a topic right now?
Speaker 11 (34:04):
What is striking here is, as always, I mean, the
power of the higher education institutions, their entrepreneurial spirit, the
amount of resources that they have to reach their ambitions.
But also I could feel some kind of anxiety about
you know, research funding, about the capacity of welcoming foreign students,
(34:32):
foreign researchers, foreign professors. So I could feel that it
was kind of mixed feelings as always, and I mean,
the best educational system in the world, especially for business,
but at the same time, some question about tomorrow, uncertainty
about tomorrow.
Speaker 5 (34:51):
I know, you know, I don't want to use the
term frenemies, but you are also competitive with these schools.
Is this only good news for you? If there's an
environment in the United States that's not as conducive to
attracting foreign students, foreign professors, is it just great news for.
Speaker 11 (35:06):
Unfl But I mean, bad news for the US is
bad news for US. And of course, if I was
really egoistic, I would say, yes, it's good news for US.
We will have more foreign students coming to US and
probably will have opportunity to recruit talented professors and researchers
from the US market. But no, I think it's not
(35:27):
good news because we tend to see US in a
very global market, in a very global higher education system,
and we see more and more countries I mean turning
onto themselves, not only the US, I mean the UK, Canada,
I mean, you name them, Scandinavian countries, and they want
(35:47):
less and less immigration and including foreign students, and it's
not good news at all. I mean I visited a
lot of countries all around the world, and what we
can see is that when there is a country which
you know, try to decrease immigration, and especially a student immigration,
it's a disaster for the country and for the schools.
Speaker 10 (36:08):
Wow.
Speaker 12 (36:09):
Yeah, that's not surprising. And I think I'm hearing very
much the same from other people that we're talking to.
I mean, I think it's of great concern because of
just the points that Dema Tase is making and I
think there is a big concern. Sometimes we think, oh,
it's a problem for students in terms of the immigration
challenges that we're confronting, but I think it is a
huge concern on the research and faculty front. When we've
(36:31):
seen the shifts in education on global business schools over
the last decade or two decades, one big thing we've
noticed is a lot of talent coming to this country
to our business schools. Look at the deans of a
lot of our business schools and where they've come from.
So it's a challenge on many fronts, and I think
that there is definitely you know, however openly they're sort
(36:52):
of airing this anxiety. There is a great deal of
anxiety right now and really just kind of wait and
see and where is this all going.
Speaker 4 (36:59):
I have to say one of the things my daughter's
just finishing up an undergraduate degree, but spent a year
over in London at the Lendon School of Economics, and
it was such a great combination of us versus being
overseas for a full year. The importance of partnerships for
you in linking up with US business school talk to
us a little bit about that, how important that is definitely.
Speaker 11 (37:20):
I mean we want our students, wherever they are from,
we want them to go to the best schools all
around the world. So we have here in the US.
Basically we have three hundred partners, academic partners all around
the world, mostly for exchanges double degrees. But we have
among these three hundred ten, let's say, strategic partners, including
(37:42):
one here in the US. So Berkeley has Business School
in California with whom we have launched a joint degree
for quite a large cohort of students or a Master
in Management, and students spend time in Paris, first on
at a campus, and then they go to Seoul koreer
So at SKK Business School, and then they spent one
(38:04):
year at Berkeley Heart. And yes, the graduates from this
programmer I mean great people and fine easily good positions
on the job market. So this is why we are
here today on the Eastern Court coast to find another
strategy partner.
Speaker 5 (38:21):
And who's that strategic partner going to day? I mean,
who do you want that to be?
Speaker 11 (38:29):
So we have already partners here of course, as you
can guess, in New York, in Boston we have a
double degree agreement with the MI T we have Pittsburgh,
so we are talking to all of them and will
I mean find the best partner here just to i
mean join Lounge joint program to probably Lounge initiatives in
(38:50):
terms of entrepreneurship artificial intelligence. So we want to do
more than just exchange and yeah, meter to.
Speaker 4 (38:56):
Do more students, more NBA students and in are we
seeing that they want a program that is not just
US based and they want to have some exposure overseas.
Speaker 12 (39:05):
I mean, anecdotally, we are hearing that. I don't have
a lot of the data on that, but in interviewing
a lot of the students in the last few months
about any number of issues that we've been reaching out on,
that is definitely something that they're seeing. And I think
that there's probably something about what's going on in the
world right now and in our country with the government
and the new administration that's making students and prospective students consider,
(39:26):
you know, it might be that I'm not going to
be working in the US, maybe I will want to
go work abroad. What you know, where are the kinds
of programs that are going to really position me the best?
And I think that some of what Dean Mattase is
describing with their partnerships. Also is something that's seen as
an if you're a student that's coming out having done
one of those programs, there is a competitive advantage to that.
Speaker 3 (39:46):
I also think about oh please jump in.
Speaker 11 (39:49):
Oh, I mean we now welcome every year something like
one hundred American students at EDEK.
Speaker 3 (39:55):
This is how big is your student base?
Speaker 11 (39:58):
All ten thousands, okay, coming from all over the world,
so one hundred and twenty countries. What they are looking
for is probably a good retail on investment because of
course suits and fees in France are not the same
as the one in the US. Also probably lifestyle. And
also something which is very important these days is that,
I mean, the purpose of the school is to put
(40:20):
business at the service of common good and this is
something maybe that these days in the US is going
to be i mean put into questions. So we have
a lot of research on climate finance, on ESG, on sustainability,
and this is something that they are going to learn
still learn in Europe and in France especially, which I
suspect will be less a bit less the case in
(40:41):
the US this day.
Speaker 6 (40:42):
Right.
Speaker 12 (40:42):
That is definitely one piece of it is there some
pulling away from some commitments that we see with our
government right now, and that throwing into question where we
saw business school students wanting to go over the last decade,
wanting to do more good with what they're doing, and
now suddenly you find yourself in an environment where it's
like is that going to be prioritized? Are the company
is going to be prioritizing that?
Speaker 6 (41:01):
Like?
Speaker 12 (41:01):
What are the opportunities for that? So I think that
the other thing I wanted to quickly touch on Dematist
was you had mentioned a number of the rise and
the number of American students studying now leaving the US
to study business. Is there a number you can attach
to that? I mean, what have you seen over the
last couple of years in terms of not just specific
to a deck, but you know, broadly speaking.
Speaker 11 (41:24):
You mean in terms of American students moving to Europe?
Speaker 2 (41:26):
Yeah?
Speaker 11 (41:27):
Yeah, so's it's been increasing in France. I mean we
are now welcoming I think four thousand and five hundred
American students, I mean amongst four hundred and fifty thousand students,
So it's not so many of them. I remember that
twenty to thirty years ago, we barely could see American
students in our schools. I mean it's the American students
(41:49):
wanted to stay here. And year after year we can
see that the number are increasing and in all of
the programs, so including in the bachelor program. So we
have a young students moving from the US to Europe
and to France to study I mean business. It's the
case for the masterin Management and also at the NBA level.
So yeah, I think over the past two years we
(42:12):
have increased the number of American students by twenty five persons.
Speaker 12 (42:15):
Wow.
Speaker 5 (42:16):
The In certain regions the US, different business schools are
known for different specialties. If we go to Silicon Valley,
we'll talk to a lot of Stanford graduates. For example,
here in New York, you know, the Wall Street sort
of feeds from NYU and from Colombia. Is there an
industry that your business school feeds.
Speaker 11 (42:32):
Into finance and asset management? I mean this is we
were talking about that just before, I mean, and in
a very special way because we have a kind of recipe,
good recipe to monetize the results of our research. So
we launch a research center in asset management twenty years ago,
and the story ended up with EDEK selling a spin
(42:54):
off in Finance for two hundred million euros at the
Stock Exchange of Singapore. We have to compete with American business,
but this is what you teach, yeah, exactly, Yeah, we
have to compete with you guys and you I mean
schools here are a lot of resources, huge endowments. We
don't reach the same amount, so we have to find
other ways to find resources.
Speaker 4 (43:15):
Fascinating and so that helped to finance defin the school education.
Speaker 6 (43:20):
Yea.
Speaker 11 (43:20):
It goes to the foundation, to the edex Foundation, and
thanks to this money we we launch Adventure Fund for
impact startups. We are Finance a research center on climate finance.
Speaker 12 (43:32):
And I mean we see them on a more individual basis.
In the US, you know, you certainly have faculty members
from school to school who are experts and management and
they've become coaches and management you know, gurus. They're doing
it individually and they are benefiting from it. It is
non institutional, whereas we're seeing much more of something like
what the Taste is describing over the last two decades
(43:53):
as ways to fund the school.
Speaker 3 (43:55):
We've got to run come back soon.
Speaker 4 (43:56):
This was really fun. Of course, our Dimitri Cassanides and
of course Dean Mattee of the Edek Business School.
Speaker 3 (44:02):
Thank you, brother Mac.
Speaker 6 (44:06):
I'll about you.
Speaker 7 (44:07):
Let me drive.
Speaker 5 (44:08):
Oh no, no, no, no, this is not a toy.
Speaker 10 (44:10):
He's going to dug honey. Please, I'll do the gravels.
Speaker 2 (44:15):
Let's wait.
Speaker 4 (44:16):
I want to drive.
Speaker 2 (44:16):
It's good question, drives.
Speaker 10 (44:23):
This is the drive to the clothes dot plums for me.
I think we'll Drivin Don on Bloomberg Radio.
Speaker 3 (44:30):
All right, TikTok, everybody.
Speaker 4 (44:31):
We've got by eighteen minutes left in today's trading session.
Just heard Charlie Palette and Dol Maloney breaking down the
trade for you on this Wednesday, and we're bouncing around
near our highs of the session. So that means up
about one and a quarter percent of both the S
and P five hundred, the Dow Jones Industrial average a
little bit higher on a percentage basis. When it comes
to the Nasdaq one hundred, it is up nearly one
(44:53):
and a half percent. Tim but a lot of this
trade has been on I think it's safe to say
the rollback of.
Speaker 3 (45:00):
The tariffs.
Speaker 5 (45:01):
Yeah, you should look at what automakers are doing. I
know it's too late to change your gainers. There are
they including your gears?
Speaker 2 (45:06):
I don't think.
Speaker 1 (45:08):
No, I don't know.
Speaker 3 (45:10):
I didn't put them on.
Speaker 10 (45:11):
Did I do that?
Speaker 5 (45:12):
I wasn't going to say anything, but you.
Speaker 10 (45:14):
Know I just did.
Speaker 8 (45:15):
You're usually so good.
Speaker 10 (45:16):
I know I didn't.
Speaker 5 (45:17):
It was right before we went live. I noticed, and
I'm like, I don't want to throw that at it
right now.
Speaker 3 (45:21):
No, you know what.
Speaker 4 (45:22):
I put him in the chat before Tesla because initially
Tesla wasn't really up on the day and the other
automakers were.
Speaker 12 (45:28):
But all right, all.
Speaker 5 (45:29):
Right, Aaron Kennon's gonna help us make sense of this.
He's a co founder and CEO at Clear Harbor Asset Management,
more than a one point five billion dollars in assets
under management. Aaron back with us from Stanford. Aaron, how
do you make sense of the uncertainty that we're seeing
play out right now? This is like a flashback to
the first trumpet term? Right?
Speaker 6 (45:49):
Well, I think clearly the market's trying to sort out
a bunch of uncertainties. One is the terroriffs that you
just mentioned, and whether or not it's it's bark or
bite or a combination of the two. And you know,
today we saw a little bit of you know, the
scalpel taken out with auto protection on trade or but
there are also other uncertainties of course, Ukraine and how
(46:09):
that's going to settle out, inflation or deflation. Is China
growth back? It was on its heels for a while.
They just announced a big stimulus. How about US growth?
We've seen interest rates, you know, trend lower over the
last several weeks, about fifty basis points since mid mid January.
I think there's a concern about US growth and so
(46:33):
it certainly doesn't help the tariff uncertainty leads I think
investors to reduce their exposures, if their leverage reduced leverage,
if their long only investors, maybe raise a little bit
of cash. Today's an exception to the recent trends of
the downward slope in the markets, and we welcome that,
but that's markets have been technically over sold now for
(46:53):
the last couple of days.
Speaker 4 (46:54):
Hey, Aaron, do you think that there is a Trump
put in the US equity market.
Speaker 10 (47:00):
Question? Carol?
Speaker 6 (47:00):
I think there certainly was one during his first term.
He seems more intent on certainly using tarris as a
tool and maybe not as a tool that's necessarily going
to be temporary in nature. Now would suggests to me
that maybe there's less of a Trump put for Trump
two point oh versus one point oh. But you know,
(47:21):
certainly to the extent that Congress has to be involved
in some of this action, there's a there's at least
a put there. And my suspicion is that they know
that they need to move forward quickly with everything from
tariffs to DOGE to fiscal constraint in these initiatives before
the midterm elections, and so the next few months will
(47:42):
be really critical in that regard.
Speaker 5 (47:45):
Does you know, to sort of follow up on Carroll's question,
we know that the president looks very closely at financial markets.
Is it is it working as a backstop to his policies.
Speaker 6 (47:58):
I think there are a couple of things going on.
I mean, I think think clearly the tariff desire that
he has will have a tendency to weigh on growth
to reduce profitability on average across the economy. And I
think that's the other trend is that we're seeing less
(48:20):
fiscal stimulus here in the US tim in Trump two
point zero. Not only are we seeing Chips Act, Inflation
Reduction Act, which was passed under Biden, but the massive
stimulus even passed under Trump one point zero after COVID struck,
a lot of that's both waning, and then of course,
through executive fiat, he has cut some of the remaining
(48:41):
funding off. And what we're seeing across the pond in
Europe is really just the opposite. Is really a strategic
or structural shift in Europe that we're seeing where Europe's
realizing they have to defend themselves. Jeremy just announced yesterday
they're going to spend twenty percent of GDP over the
next ten years on defense spending that could contribute one
(49:03):
percent of GDP to that economy, third largest economy in
the world, and then the EUS meeting within the next
day or so to talk about spending another five to
six hundred billion dollars over the next three to four years.
We haven't seen that type of not just military spending,
but deficit spending in Europe in our lifetimes. And so
there is a liquidity shift, I believe afoot and we're
(49:26):
seeing that with European equities up in the teens this
year about thirteen percent. And of course the US is
sort of a different story with SPS still down. Yere today,
equal weight smps up a little bit. Mag Seven's on
its heels, actually weighing down the US market rather than
lifting it as we saw in the last two years.
Speaker 4 (49:45):
I so love that you went there, because we really
haven't had a lot of time to spend on the
story that came out of Germany overnight, and you're right, Aaron,
the DAX was up almost three point four percent. Tim
and I have spent a lot of time this year, though,
talking about the outperformance of markets outside of the United States.
As you mentioned Europe, the eurostocks fifty is up about
(50:08):
twelve percent, the CAC forties up eleven percent, the DOX
is up. It looks like about sixteen percent year to date.
This outperformance that we are seeing overseas, that liquidity shift.
Is there something that could happen in the United States
that affects that liquidity shift that you're talking about, that
(50:28):
maybe going outside the US? The US Commerce Secretary Howard
Lutnik earlier on Bloomberg talking about the policies of the
United States being ultimately good for the US stock market,
good for the US bond market.
Speaker 3 (50:40):
How do you see it longer term?
Speaker 6 (50:43):
I think there is a I do believe in American
exceptionalism from a regulatory standpoint. From an ingenuity perspective, we
have a high allocation of technology in our indices, and
so in that regard, I think the liquidity will ebb
and flow here, but always sort of want to flow
rather than ebb. The challenge is valuation in the United
(51:05):
States relative to the rest of the world right now,
and I think that's where some of those liquidity concerns arise.
And of course tariffs don't help. And to the extent
that there's a resolution to the war in Ukraine and
in a way that provides a level of fairness to
Ukraine and to Europe, that could put a halt on
(51:26):
the margin to this sort of trend that I'm talking about,
which is massive military spending in Europe. And then you know,
looking further across the pond to China, you have a
lot of fiscal stimulus that was just announced there recently
as well, spending up to ten percent of deficit to
GDP to try to create five percent of growth. So
there's opportunity in that part of the world as well.
Speaker 4 (51:47):
Yeah, it's getting interesting around the globe.
Speaker 3 (51:50):
All of a sudden, aerin thank you.
Speaker 12 (51:52):
Good to check in with you.
Speaker 3 (51:53):
Aaron Kennon, co founder, chief.
Speaker 4 (51:54):
Executive officer of Clear Harbor Asset Management. They've got over
one and a half billion dollars in assets under management.
You're in joining us once again from Stanford, Connecticut.
Speaker 2 (52:03):
This is the Bloomberg Business Week podcast, available on Apple, Spotify,
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afternoons from two to five pm Eastern on Bloomberg dot com,
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