April 17, 2025 • 39 mins
Google illegally monopolized some online advertising technology markets, according to a federal judge, whose ruling marked the latest antitrust setback for the company and a challenge to its main source of revenue.
US District Judge Leonie Brinkema found on Thursday that the Alphabet Inc. unit violated antitrust law in the markets for advertising exchanges and tools used by websites to sell ad space, known as ad servers. But she said the company didn’t meet the definition of a monopoly for a third market of tools used by advertisers to buy display ads.
Alphabet shares quickly sank as much as 3.2% on the ruling, then slightly pared their losses. The stock was down 1.1% at $153.78 at 1:10 p.m. in New York.
Brinkema’s decision marked the second time in a year that Google was found by a court to be an illegal monopolist. A trial begins Monday in Washington on a remedy after the company was found to monopolize the online search market. The Justice Department is seeking to force Alphabet to sell off its Chrome browser.
In the ad technology case, Brinkema wrote in her 115-page opinion Thursday that “Google has willfully engaged in a series of anticompetitive acts to acquire and maintain monopoly power in the publisher ad server and ad exchange markets for open-web display advertising.” For over a decade, Google pushed web publishers to use its tools that both placed ads on websites and help manage their advertising business, the judge found.
Today's show features:
- Bloomberg News Legal Team Leader Sara Forden on Google’s Antitrust Case and Supreme Court to Hear Citizenship Case
- Michael McKee, Bloomberg International Economics and Policy Correspondent & Bloomberg Federal Reserve reporter Catalina Saraiva on whether the Fed's independence is in question
- Ken Natori, President of Natori Company, on how tariffs are impacting retail sector
- and we Drive to the Close with ReAnn Mitrione, Founder and CFA at Callan Family Office
Hosts: Carol Massar and Tim Stenovec Producer: Sebastian Escobar
See omnystudio.com/listener for privacy information.
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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 Daily reporting from the magazine
that helps global leaders stay ahead with insight on the people, companies,
and trends shaping today's complex economy. Plus global business finance
and tech news as it happens. The Bloomberg Business Weekdaily
Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 3 (00:32):
A couple legal actions we want to get to you
right now.
Speaker 4 (00:34):
First of all, earlier today Google partially losing a US
advertising tech antitrust case, and just moments ago, the US
Supreme Court saying we'll hear arguments on President Trump's bid
to start enforcing an executive order that would restrict automatic
birthright citizenship and upend a longstanding constitutional right.
Speaker 3 (00:53):
The Court saying today.
Speaker 4 (00:55):
Will keep his restrictions on hold in advance of that
May fifteenth argument.
Speaker 1 (00:58):
I want to bring in Bloomberg News team leader Sarah
Ford and Sarah joins us from our Washington DC bureau.
I want to start with the Supreme Court setting to
hear arguments in the birthright sistemship case. How does this work?
Give us the sort of schoolhouse rock version of how
the Supreme Court could change what is written in the
US Constitution.
Speaker 5 (01:17):
Well, I mean this has been, as you said, a
longstanding belief of constitutional scholars and others that the right
to birthright citizenship is sacrosanct. So the fact that they
are willing to take this up and to start to
parse it and consider the restrictions that are being proposed
by the Trump administration means that this right could potentially
(01:39):
be in play going forward.
Speaker 3 (01:41):
So what's next May fifteenth?
Speaker 5 (01:43):
Is that what we focus So, as you said, the
restrictions are on hold for now, but May fifteenth will
be a closely closely followed arguments. This usually takes several
hours where we listen attentively to what each of the
justices the questions that they're asking and how that might
indicate what they're thinking.
Speaker 3 (02:01):
Is I mean, this.
Speaker 4 (02:01):
Would be a significant change in a policy that's been standing.
Speaker 5 (02:05):
Yeah, I mean this has been sacri saying that the
children of people who are non citizens who are born
in this country have the right to American citizenship. So
this will go to hospitals across the country when babies
are born. Are they going to give those babies a
Social Security number or not? And so this could start
to roll back that, and it's part of the Trump
(02:27):
administration's larger, very aggressive crackdown on immigration to this country
over multiple What.
Speaker 1 (02:33):
Is the legal case here, because in the Section one
of the fourteenth Amendment of the Constitution, it does go
into the fact that all persons born or naturalized in
the US are subject and subject to the jurisdiction thereof
are citizens of the US and the state wherein they reside.
Is the Supreme Court challenging the meaning of that.
Speaker 5 (02:53):
That clause subject to the jurisdiction thereof is the one
that is being put into question, and the questions whether
these non citizens who are here are really subject to
the jurisdiction. And so that is what they're going to
tease out in part during these arguments.
Speaker 3 (03:08):
So I am curious, what did you just happen? Oh,
I'm sorry, there's a lot of stuff happening.
Speaker 1 (03:15):
Yeah, producers are talking to Carol, So I'm jumping in
a little bit. I was asking specifically about Section one
of the fourteenth Defendment, okay, and how that is open
to interpretation with this legal case.
Speaker 4 (03:24):
Sorry, it's one of those kind of days and kind
of these weeks in one of these kind of years.
I want to flip to Google and the case there
of Google partially losing a US advertising tech anti trust case.
This was a federal judge finding Google to have legally
illegally monopolize some online ad technology markets in a blow
to what is a really key part of Google's business.
Speaker 3 (03:47):
Walk us through this one.
Speaker 5 (03:49):
Yeah, absolutely. This is the second major ruling against Google
in a tech anti trust case. And this case has
to do with the pipeline that Underpins's advertising business. So
they control the technology soup to nuts, from the ad
servers to the putting these ads on websites. And this
(04:10):
judge found that Google monopolizes the part that has to
do with the ad server tools. And I know this
is all very wonky, but it goes back to their
acquisition of a company called double Click in two thousand.
Speaker 1 (04:21):
That was so long ago, long ago.
Speaker 5 (04:24):
So the DOJ actually is in the remedy portion of
this case, which will follow today's decision, is DJ is
asking for the judge to order Google to sell off
that double Click unit. But of course, over the years
it has been integrated into their business, and so it's
kind of like trying to unscramble the omelet.
Speaker 3 (04:42):
So is there an appeal coming to we assume so Kenny.
Speaker 5 (04:45):
Google has already said they will appeal this part of
the case. They did win the part of the case
that has to do with display ads, so so they're
safe on that count. But all of this marks a
bigger reckoning for the tech companies that have gotten so powerful,
and it shows that we have a rare little spot
(05:06):
of bipartisan consensus on antitrust and limiting the power of
big tech because these cases have been taken forward both
by the first Trump administration who filed the first Google
case which was about search, and the metacase, which is
currently playing out in another DC courtroom, and they were
(05:29):
carried forward by the Biden administration. So we're not seeing
a lot of light between conservatives and liberals on these cases.
Speaker 4 (05:37):
Just real quickly, just about twenty seconds here, sour. So
that's what I was going to ask, because we know
this was a kind of second major blow to Google
that was already found to have monopolized the online search
market in a separate case.
Speaker 3 (05:48):
Is this all Google.
Speaker 4 (05:49):
Specific or I kind of get the feeling it's a
larger message here for some of those big tech guys.
Speaker 3 (05:53):
Just quickly.
Speaker 5 (05:55):
This is a larger message and we have cases running
now against Amazon, Meta, Apple, and Google. So yes, it's
broad all right.
Speaker 1 (06:03):
Just thinking, I'm just thinking of those CEOs of those
companies were all at the inauguration. I think they were.
I believe they were just making sure.
Speaker 3 (06:11):
Yeah, it's working out well, cool, all right.
Speaker 4 (06:13):
Bloomberg News Legal team leader Sarah Fordon, thank you so much.
We really appreciate you joining us.
Speaker 2 (06:19):
You are listening to the Bloomberg Business Week podcast. Catch
us live weekday afternoons from two to five pm Eastern.
Listen on Apple CarPlay and Android Auto with the Bloomberg
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Speaker 3 (06:33):
We want to stay with the future of j. Powell.
Speaker 4 (06:37):
Of course, the fed share things have just come out
of this press conference that is ongoing here in the
White House again the President making another comment he should
do the right cuts. So we want to kind of
get into this, and we have a great voice we do.
Speaker 1 (06:51):
Let's bring in Katerina Sariva. She joins us from Houston,
also with us as Michael McKee's Bloomberg News International Economics
and Policy correspondent. He joins us here in the studio.
I do want to start with you, because you have
been monitoring these Powell or these Trump comments. I should say,
in the context of what we heard from j. Powell yesterday,
you were there in Chicago, just give me your impression
(07:11):
of what we're hearing from the President right now and
what the message is that he has for the Federal Reserve.
Speaker 6 (07:17):
At the moment, I'm still seeing this as saber rattling,
trying to influence the FED. The President said this morning
he is a word termination. Other White House officials have
told other networks that he didn't mean firing him, And
then today in the Oval office, they said, are you
trying to get rid of him? And he said, yeah, yeah,
But what does that really mean. We know he doesn't
(07:40):
like Powell, and we know he doesn't like the fact
that the FED is not cutting interest rates as the
president would like, but there isn't There's a real debate
about whether the President has any power to get rid
of the FED chair, which we can go into later.
But I don't think that we're necessarily any closer to
(08:01):
Powell being ousted or an attempt to oust him by
the President. But I think that because Powell spoke yesterday
and gave the impression they're not going to cut rates soon,
that he's just venting again on the FED chair.
Speaker 4 (08:13):
I mean, you can't fire a FED chair just because
you don't like their policy, can you.
Speaker 1 (08:16):
Well, is that I don't.
Speaker 3 (08:19):
Know, is that?
Speaker 1 (08:20):
Cause?
Speaker 6 (08:21):
Like I said, we can go into the whole background.
But in theory, legal experts say that's not cause, causes
malfeasance or illegality or something like that. The question is
not so much cause. It's this whole Article two issue
about whether the president has unfettered ability to run everything
in the executive branch, including what are supposed to be
(08:44):
independent agencies.
Speaker 4 (08:45):
Well, and to that, there are some legal actions that
are out there that are testing the limits of presidential
authority to remove agency officials without cause. I want to
just bring in Bloomberg News Federal Reserve reporter Katerina Sariva,
who's with us from Houston. Katerina, what do we know
about these cases and what it could possibly potentially I
want to be careful here, but what it could mean
(09:05):
in terms of the presidential authority to possibly get rid
of the FED chair.
Speaker 7 (09:10):
Yeah, I mean that's you know, as Mike was just saying,
the big question. So we have a couple cases that
have kind of filtered their way through the federal court
system and will are expected to be taken up by
the Supreme Court soon. So these are kind of They
both have to do with what's called Humphries Executor, which
(09:34):
is a provision from nineteen thirty five, a Supreme Court
ruling that found that the president could not unilaterally fire
members of boards. Now the Supreme Court has already chipped
away at that a little bit. There was a twenty
twenty decision about the CFPB that said, when it's a
(09:56):
single directory, the President does have that authority to to
fire that person. But the open question is kind of
how it applies still to multi member boards. So the
decisions going up to the Supreme the cases going up
to the Supreme Court now are not specifically about the
Federal Reserve. It's other government agencies, but it's a similar
(10:20):
structure where they have multiple people on the board.
Speaker 1 (10:23):
You know, Katerina, we're monitoring what's going on in the
Oval Office right now. The President is with Georgia Maloney,
the Prime Minister of Italy. He's still making more comments.
Just as you were speaking about the Federal Reserve, he said,
interest rates are pretty flat. They should be better. Costs
are down, very little inflation. The Fed owes it to
Americans to get interest rates down. Powell will have a
lot of political pressure and the only thing Powell is
(10:44):
good for is lowering rates. I want to go back
to Mike McKee, International Economics and Policy correspondent. He's here
in our studio too. He's looking at these comments as well.
Just fact check us a little bit with where inflation is,
where costs are, and how you view the comment that
the President said the only thing Paul is good for
is lowering rates.
Speaker 6 (11:03):
Well, it depends on which measure you want to use.
As always, we say with the inflation numbers, but basically
they're getting very close to the Fed's target, the CPI down,
and now we're here after we've had the other numbers
and people plugged in the data. The Fed's target is
the PCE index, and that's now forecast to come in
about two point three percent. So inflation has come down.
(11:27):
The issue is not that inflation is coming down, because
if this were an ordinary time, the Fed would be
probably lining up to cut rates again. I think pretty
much all of them want to, but they can't because
they don't know what is going to happen, and this
may be what set the president off. Powell yesterday saying
(11:49):
that the tariffs as announced were bigger than people thought,
and they will have a bigger impact than people thought.
Inflation will probably go higher than we estimated. And in
that case, because that's a possibility if Ed doesn't want
to move right now, and that makes sense.
Speaker 4 (12:05):
So he also said the president, if Europe has cut rates,
that puts a set in a disadvantage.
Speaker 6 (12:10):
They're not comparable. The European economy is growing barely one percent.
We've been growing two and a half or better. First
quarter may not be great, but there may be some
statistical anomalies there. Their unemployment rate is much higher than ours,
and their interest rates are lower than ours. So at
(12:34):
this point you can't really say that it's a comparable situation.
Speaker 4 (12:38):
And we should point out that the remarks and the
press event in the Oval Office has ended, so that
should be the end of those headlines. Katherine, I want
to go back to you for one more thought. I
mean so legally, I mean how easy would it be
potentially and I guess, depending on how all these rulings go,
could it be for the President to maybe remove Fetcher
(13:01):
J Powell.
Speaker 7 (13:03):
Yeah, I mean if the rulings are broad and not
very narrow, right, if they if they are seen to
apply to basically any multi member agency, then yeah, that
leaves the door wide open for the President to fire
the fet Share. There are some legal scholars and some folks,
and we heard it from Chair Powell yesterday as well,
(13:24):
that think that there is likely to be a carve
out specifically for the FED. We have heard, we had,
we've been in a decision a few years ago. Justice
Alito kind of eluded, you know, talked a little bit
about how the Federal Reserve is a unique entity. So
there there might be appetite for that at the Supreme
(13:46):
Court to kind of carve out the FED. But it
remains to be seen.
Speaker 5 (13:50):
Now.
Speaker 7 (13:51):
I think one of the important factors for Trump, even
if he has the permission to do so, is the
reality of how the markets would react, right, because it
would be quite a reaction in markets, and that may
prevent them from ultimately acting.
Speaker 3 (14:06):
All right, really appreciate you, wangan, Katerina. We're going to
let you go. Thank you so much.
Speaker 4 (14:10):
So, Katerina Saravas, she is Bloomberg News Federal Reserve reporter.
We're going to continue that a little bit more with
Mike in terms of Fetcher J. Powell and his tenure.
Speaker 1 (14:19):
Yeah, so, Mike, I do want to bring you back
in here because and we're going to get to trade
in just a minute, because there were some headlines on
the trade side of things coming from that Oval Office meeting.
But if we think about this in the context of
what we heard from the president in his first term,
he would tweet at the time about the FED lowering
interest rates. The FED chair has in the past addressed
(14:44):
questions about pressure and political pressure. He's talked about maintaining independence.
As of now, though, given what we heard from the
President today, are there any more questions about the pressure
that he must be feeling or he may be feeling.
Speaker 6 (14:56):
Well, he may be feeling pressure, But he is giving
the same answer it was asked yesterday and again he said,
we will do what we do without any regard to
political pressure. Our job is the mandate that Congress gave
us maximum employment and stable prices, and that's what we're
going to do. We'll make our decisions based on what
(15:16):
gets us to those mandates.
Speaker 3 (15:18):
Fetcher J.
Speaker 4 (15:19):
Powell also said yesterday our independence is a matter of law.
Congress has it in our statute. We're not removable except
for cause we serve very long terms, seemingly endless terms,
he said, So we're protected in the law. So you know,
Congress could change that law, but there's I don't think
there's any danger of that. That independence has pretty broad
support across both political parties. I'm going to ask the obvious.
(15:41):
I know the answer, but we've got to ask it.
Maybe for those who are like, well, couldn't you just
get rid of the FED? I mean, if President Trump
just got rid of feedcher J. Powell just kind of
because he wanted to, and there was no real cause,
what would that say potentially to the independence of the Fed?
And again, just why having an independent fact is crucial
(16:02):
and when it doesn't happen, we see what happens two countries.
Speaker 6 (16:05):
That part is easy because there have been many, many
studies that show countries with independent central banks have much
lower interest rates, much lower inflation rates, and it's just
overall better for the economy. And there's no debate among
economists or I think investors, Wall Street Global, Wall Street
(16:26):
kind of people about that. Now if the President tried
to fire Powell, I think there would be a rebellion
on Wall Street. Krishnaghoo, is I ever core said today
if you like the reaction to the tariff announcement, just
wait till you get Trump has fired at US.
Speaker 1 (16:47):
You're saying the bond market could get yippie.
Speaker 6 (16:49):
Yeah, they could get so it's kind of a technical.
Speaker 1 (16:52):
Term, but yeah, okay, that's good to know, Mike. One
last question to you, this one on trade, because we
did hear the President and Prime Minister the Resident just
now saying that they discussed trade other things and that
Italy will have to increase their imports of LNG. Remind
us because the European Union is this block. Remind us
(17:13):
if individual countries can actually go and negotiate their own
trade deals with the US or do they have to
do it as the EU.
Speaker 6 (17:19):
Well, they have to do it as an as the
EU as a block to negotiate a trade agreement. Now,
there's no reason that Italy couldn't buy more of one product.
They could say we want more LNG. We saw that
during the initial phase of the Ukrainian War, countries that
(17:40):
needed natural gas buying more from the United States and
other places. But the idea of an overall trade deal
that would exempt them from tariffs probably has to go
through Brussels. I mean, that's the structure they have set up.
Speaker 4 (17:56):
All right, We're gonna leave it there. Great timing. Thanks
for dropping by.
Speaker 6 (18:01):
And it knows when I'm here to make.
Speaker 1 (18:03):
It a coordinate schedules, right, five o'clock, Balance of power,
five o'clock, talk about it again. To see you next.
Speaker 4 (18:10):
Michael McKee, International Economics and Policy Correspondent, Bloomberg News.
Speaker 2 (18:15):
This is the Bloomberg Business Week podcast. Listen live each
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Speaker 5 (18:33):
Well.
Speaker 1 (18:33):
President Donald Trump said during a meeting with Italian Prime
Minister Georgia Maloney that he expects to reach a trade
deal with the EU, but he indicated he's in no
hurry to finalize tariff agreements.
Speaker 8 (18:44):
We're doing very well with negotiations, I think with all countries,
and Scott could tell you a little bit, but we
are doing very well. We have a lot of countries
that want to make a deal. Frankly, they want to
make deals more than I do. Tariffs are making those rich.
Speaker 7 (19:00):
Well.
Speaker 1 (19:01):
That was President Trump from the Oval Office, alongside Italian
Prime Minister Georgia Maloney. The Scott by the way, he
referred to with Scott Bess and the Treasury Secretary of
the US separately, well not separately, but also I should say,
the EU carol is working on a proposal to introduce
restrictions on some exports to the US as a possible
retaliatory tactic in that expense of trade war that the
President initiated last month.
Speaker 4 (19:22):
All right, for the latest, let's head to Stephanie law.
She's Bloomberg News White House correspondent. She is out there
in our DC bureau. Hey, Stephanie, So, I just want
to cut to the chase. Are things moving forward when
it comes to trade negotiations and should we assume sooner
rather than later that there could be some kind of deals,
better deals maybe perhaps announced that maybe kind of cool
(19:42):
the heat that we've seen and what feels like a
trade war.
Speaker 9 (19:46):
Yeah, I mean, I think that's what we've all been
waiting for. But it remains unseen when a deal will
come together. You know, they've mentioned for a couple I
guess about a week now that they have about fifteen
or so offerers and that there are people coming to
the White House make deals.
Speaker 8 (20:00):
You know.
Speaker 9 (20:01):
Notably, nothing really came out of the Japan talks yesterday.
Now it was a preliminary meeting, sure, but the President
still did attend. And so everything we've been hearing from
our sources, from just what's coming out of the White
House is that deals are being made, that they're not
really in a rush. And Trump himself is saying, you know,
repeatedly in the last week that he really doesn't mind
waiting because we're bringing in a bunch of revenue and
(20:24):
money from these exports or the imports that were putting
tariffs on and so he doesn't seem to be in
a rush. It seems like his team is very focused
on making good deals. But you know, one thing that
the Secretary Treasury Secretary Besent mentioned at this Oval meeting
was that South Korea is expected to come next week.
So we're still seeing some trade partners come in. Discussions
(20:46):
are still happening, but in terms of the timing, it
doesn't quite seem like an immediate remedy.
Speaker 1 (20:50):
Okay, South Korea, Japan, something's missing, Yeah, I was gonna say,
and then Italy, of course, what about the big one?
What about China? Is there any movement there?
Speaker 6 (21:00):
Yeah?
Speaker 9 (21:00):
I mean reporters did press the President on this throughout
this last week. He doesn't seem to say that he
has reached out. It's not clear if China has reached out,
and so it doesn't really seem like we've moved from
this impasse that we've already encountered earlier last week, when
the tariffs had started ramping up in this trade war
continued to escalate.
Speaker 4 (21:18):
All right, good to leave it there, Hey, Stephanie, thank
you so much. STEPHANIELI Bloomberg News White House correspondent joining
us from our Washington, DC bureau.
Speaker 1 (21:25):
So that is the latest when it comes to DC
and the trade war. We're also really interested on how
companies that import goods are dealing with this. The Notori
Company is one of those firms that's really caught in
the crosshairs right now. It's a designer fashion brand that
does sleep where lingerie, swimwear, Fragrance, Bridle, fine jewelry, and more.
We've got Kennatory with us. He's the president. We should
note that before his work at Notori, he worked here
(21:47):
at Bloomberg Radio and TV. That was until two thousand
and three. He joins us here in the Bloomberg Interactive
Brokers studio. Good to see you, Ken. You are the
perfect guy to talk to about this because of what
is happening in your world, and I want to know
what has happened in your world because you manufacture in China,
you manufacture in the Philippines. What's going on it is?
Speaker 10 (22:05):
First off, thanks for having me always. Great to be
back at Bloomberg. Feels like I'm coming back home. It's
just it's really challenging right now. There's just not a
lot of visibility in terms of what stuff is going
to be like. Obviously, we had the chaos of the
beginning of the month. There was a time where we
thought places outside of China would be really difficult to
manufacture in because the tariffs in Vietnam Cambodia were much
(22:27):
higher than expected. Then those came down to ten percent,
China went even higher. So you know, we've got plans
for every different scenario, but we don't know what the
scenario is actually going to be So it's really hard.
You know, I think a lot of people in our
industry have just been waiting a little bit to see
how things would shake out. But we're all in a
position now where we have to make decisions and it's
hard to make decisions without visibility.
Speaker 3 (22:48):
Yeah, no, absolutely.
Speaker 4 (22:49):
What's the best and worst case scenarios that you are
kind of planning for?
Speaker 10 (22:55):
So we thought the worst case. So, you know, we
have our own manufacturing facility, our own factory in the Filippines
where we do about seventy percent of our manufacturing of
the collections that we do in how so that is
a tremendous advantage. That said, we still have twenty five
to thirty percent exposure in China, which is a lot.
You know, we have been building models for twenty five
percent out of China, forty five percent, tariffs out of
(23:16):
China one hundred and forty five percent. Yesterday there was
a rumor of going up to two hundred and forty
five percent, which is I mean, how do you plan
business around that? And what's interesting for us is, you know,
we sell direct to consumer onnry dot com, but we
also sell to department stores. Our wholesale partners that we've
been with, you know, throughout our forty eight years as
a company, right and we've got these long term partnerships.
They need to know, like what what are we going
(23:38):
to buy product at? And we have to give they're
asking for a price, and we don't know what the
tariff is going to be when we ship in sixty
to ninety days, So there's so much uncertainty. You know,
we're working very closely with our retail partners to come
up with some way for us both to be protected
because we're you know, we're we have great partnerships, but
with a complete lack of visibility in terms of what
those tariffs are actually going to be, it's just it's
(23:59):
a little bit of a guessing game at this point.
But everybody has to start taking action, and that's where
it gets a little scary.
Speaker 1 (24:03):
The President would say, the point of these tariffs are
to bring manufacturing back to the United States. Is there
a number that you'd see on China or the Philippines
that would cause you to move production to the US?
Speaker 10 (24:15):
I mean, I will say if so, you know, if
tariffs stay at one hundred and forty five percent out
of China. People will not be able to import apparel
from China. It's going to move you know, who knows
what it's going to be in the other countries. If
he puts one hundred and forty five percent tariff on
every single country in the world, then eventually, eventually, I
(24:35):
you know, maybe apparel manufacturing could come back to the
United States. But that's a long process that doesn't happen overnight.
Speaker 3 (24:41):
How long is that process?
Speaker 1 (24:43):
You know, I don't know.
Speaker 10 (24:43):
I like, I've never thought that we would have to
like invest in our own manufacturing.
Speaker 4 (24:46):
There's there's a visiblity you could to say, okay, guys,
you start making it.
Speaker 1 (24:50):
And it's not the facility.
Speaker 10 (24:51):
It's also the skills. Think about like training workers, Like
how many people do you know in the US We're like, oh, yeah,
I know how to do that. It's about training a workforce.
It's about equipment, it's about machinery. So in theory, yeah,
I'd love to bring jobs back to the US, But
like right now, like people are like, how are you
dealing with this? If I sat in my desk and
called every manufacturer in the US that could make apparel
(25:12):
for US, yeah, that would take zero seconds. Because I
don't know, they don't exist for us. Now that's not
to say.
Speaker 1 (25:18):
It couldn't happened down the road.
Speaker 10 (25:19):
I mean, you know, we could come up with any
kind of scenario, but as of right now, like what
we're supposed to do in our seat, it's it's a
little confusing.
Speaker 1 (25:28):
How much would it cost? Do you think to you know,
I don't so the world? Is the world just a
fantasy at this point because the skills don't exist here
in the US, the manufacturing doesn't exist here in the US.
Does my question even? Is my question even relevant?
Speaker 10 (25:43):
So it could be relevant to bigger companies, and I
think you know, you've seen articles where this is really
going to hurt smaller companies, the independent companies like us.
Like if you're a bigger company, like if you want
to go tell Nike or under Armour or Victorious Secret, Hey,
you guys build yourrone manufacturing in the US, Well maybe
they have the money to do that and the ability
to like right, like you know, you know, we're a
(26:05):
privately held business. The idea of like, hey, we're actually
going to invest in you know, building building our own
manufacturing facilities in the US, Like that's that's very difficult,
and it's not like there are these existing factories that
we can tap into to move to domestic production.
Speaker 4 (26:19):
What don't we maybe as a society understand about Chinese manufacturing.
I think we think it's maybe we think of our history,
you know, dirty factories, industrial factory, you know what I mean,
and just kind of but they're very sophisticated. Tell us
a little bit about your experience in terms of time.
I'm assuming you've visited your factories.
Speaker 1 (26:38):
Yeah, yeah, of course.
Speaker 10 (26:39):
So you know, I spent a lot of time at
our own company owned factory in the Philippines, but I
have traveled to China a lot from twenty fifteen to
twenty twenty obviously to meet with our manufacturing partners there.
They are very good, They're very dedicated, and you know,
they know what they're doing and they're willing to do
the work. And this is you know, it's it's tough
work to do. It is it is tough work to do.
Speaker 3 (26:58):
So how sophistic is the technology involved in all of that?
Speaker 10 (27:01):
Well, so it depends, you know, for apparel, it's you
know everything. There are certain parts of making clothes that
can be machine done. Like if you look at socks
or hosiery. That's usually like machines and people looking at
and operating the machines and observing them. But when it
comes to actual like apparel manufacturing, like the cut and so,
that involves a lot of handwork. You know, that involves
(27:23):
sort of detailed work, you know, using a sewing machine,
and it's you know, it's it's hard work. I'm not
sure like to get those skills in the US and
to have legitimate apparel manufacturing and real factories, it would
take a long time of training a workforce and in
a long time of building these facilities.
Speaker 1 (27:40):
So I want to go back to what you're doing
right now, because you essentially described a state of paralysis
where you really are waiting to see what the decision
is or how long these tariffs are in place to
make a decision. How long can you actually wait because
at a certain point you're going to have to make
a decision and your partners are going to have to
get their clothes and you're gonna have to tell the
folks in China and the Philippines UH to start making
these things.
Speaker 10 (27:59):
Yeah, so we were paralysis at the beginning of the month,
and now so for the as I mentioned, we have
our own factory in the Philippines. To the degree we
had some programs in China, we are actively trying to
move those and countersource and move those programs to the Philippines.
We can't do everything there are there is a there's
a lot of industry that cannot be done anywhere outside
(28:19):
of China. And I think that's what's interesting, Like everybody's
trying to move out of China now. But if you
think about something like Christmas ornaments, like it's you know,
I was talking to a department store partner, we were
visiting with them last week. They're like, we might not
even have a Christmas ornament department this holiday season because
that's the only place these things are made. So they're
going to be you know, the consumers is going to
(28:40):
see a lot of consumers is certainly going to see
higher prices, but there could be huge categories of things
that you expect to see this fall that just might
might not be there.
Speaker 3 (28:50):
Unbelievable.
Speaker 4 (28:52):
It's just I know, it's kind of amazing to get
what go ahead materials.
Speaker 1 (28:57):
Yeah, are those are those from separate countries then China
and the Philippines. We hear a lot about that, and
that the supply.
Speaker 10 (29:03):
A lot so yet know, a lot of the fabrics,
a lot of fabrics come out of China. We get
the higher end fabrics out of out of South Korea,
but a lot of the fabrics do come from China.
And frankly, you know, even as a lot of the
finished goods are coming moving out of China to other places,
a lot of that fabric is still going to come
from China. So it's you know, they do a lot
(29:24):
there that is only done in that country. And could
it eventually move, yes, but all this stuff takes a
lot of time.
Speaker 4 (29:32):
So say, I am curious the fashion industry as a whole,
what kind of you know, uh access do they have
to the White House? And I'm just curious what they
are hearing, getting time with and so and of just
got about thirty seconds left.
Speaker 10 (29:46):
Yeah, I don't have any Yeah, I can tell you that,
you know, I you know, I know there's like the
c FDA which is putting out statements. I'm not sure
what direct access they have. I think their industries is
probably the White House cares a lot more about than
the fashion industry, for for better or worse. But you know,
I think there Wall Street probably has its eyes on
(30:08):
much bigger things. But I can say from my seat
it is it's a very interesting time for us, and
I think everybody's just trying to make the most of it.
Speaker 1 (30:14):
Or just twenty So are you gonna have to lay
anyone off? Do you think?
Speaker 10 (30:17):
I hope not. Yeah, No, I don't know. We'll see,
We'll see what happens. It is, it's a very difficult time.
There's complete uncertainty out there. There's complete uncertainty out there,
so it's it's challenging.
Speaker 4 (30:27):
Well, you open up a window to really understanding kind
of how things are made. I think we just take
things for granted in terms of closing items. Kenna Torrey,
thank you so much, president of the Notory Company. Joining
us here in studio.
Speaker 2 (30:40):
You're listening to the Bloomberg Business Week podcast. Catch us
live weekday afternoons from two to five pm Eastern. Listen
on Apple CarPlay and the Android Auto with the Bloomberg
Business app, or watch us live on YouTube.
Speaker 1 (30:55):
MUCA.
Speaker 8 (30:56):
I'll bet you let me drive.
Speaker 1 (30:57):
Oh no, no, no, no, this is not a toy.
Speaker 11 (31:00):
Who's gone to judge Honday?
Speaker 2 (31:02):
Please, I'll do the gravels wait, I want to drive.
It's a good questions try.
Speaker 1 (31:13):
This is the drive to the close. Now plunks to music.
Speaker 2 (31:16):
We'll drive us Kilda Dawn on Bloomberg Radio.
Speaker 3 (31:20):
All right, TikTok, everybody.
Speaker 4 (31:21):
We've got just about eighteen minutes to go until we
wrap up with the trading day and the trading week. Remember,
of course it's a good Friday holiday, so a holiday
shortened trading week, and we've been bouncing.
Speaker 1 (31:30):
Aroun Land market not even open right now, host it
to close it.
Speaker 3 (31:33):
To early early right now.
Speaker 4 (31:35):
The Dow Jones industrial average, it is down about one
percent as we speak. We know United Health has been
a big drag amy just breaking that down for you
as well. S and P five hundred just up about
four tons of a percent. Nastek one call it flat,
just up about six points.
Speaker 1 (31:49):
I did mention the bond market, so I do want
to say we did see yields rise ever so slightly today,
the tenure at four thirty two, four thirty three, we
can round that up.
Speaker 4 (31:58):
It's been an interesting, mellow, wish kind of week. I
mean really, although what we did see as a movement,
I guess it wasn't.
Speaker 1 (32:08):
Yeah, it's all relative. It wasn't like what we saw
last week, which was just wild in the week before.
Speaker 3 (32:12):
That fix is down about two and a half points.
We're moving. We're trading around thirty.
Speaker 4 (32:18):
Okay, you know, just you know, remember it was just
what last week that we were bopping up to sixty
or so. That was on April seventh, So we've been
moving our way down.
Speaker 3 (32:29):
Okay, look at that calming down ish?
Speaker 1 (32:31):
Yeah, well, I mean again, it's all relative.
Speaker 3 (32:33):
All right, Let's see what our guest has to say.
Speaker 1 (32:35):
Hey, I want to bring in Rayan Mitrioni. She's the
founding partner in CFA at Callan Family Office. She joins
us from West Palm Beach, Florida. Ryan, Good to have
you with us. The firm's got about seven a half
billion dollars in assets under management. You know it is
a wild week. When Carol says this week has been calm,
I should say a wild period of time. I wonder
(32:55):
I want to know what the questions that you're getting
from clients right now are, because we've been hearing a
lot about people rethinking act allocations going more to Europe.
What are you hearing?
Speaker 11 (33:08):
Absolutely? Thank you for having me, and it's it's true,
this week has felt a little calmer, but it is
all relative, very different than the last couple of years.
But yeah, I mean, clients are are We're certainly having
a lot of you know communication. I think that's the
most important thing when you're in a period like this
is staying close to clients, making sure they're feeling okay and.
Speaker 3 (33:30):
That are they feeling are they failing okay?
Speaker 5 (33:34):
It really depends.
Speaker 11 (33:35):
I mean, that's when it's about kind of reconfirming where
risk tolerances are and that allocations are in line with
where they should be because everyone has a high risk tolerance.
When the market's going up right, it's a lot easier then.
So it's like, how do you feel in this period?
And a lot of the clients we work with are
really ultra high net worth investors, so it's a little
bit different.
Speaker 3 (33:55):
So do they say it, do you forget it? Or
do they still are they kind of you know, do
they call you and say what are you doing? Like
should I be worried?
Speaker 8 (34:03):
Exactly?
Speaker 11 (34:04):
They still want to know that we're not just sitting
on our hands and doing nothing when we're in a
period like this, and we're not. I mean, we do
think it's important to stay true to you know, long
term strategic investment plans, you know, and not get caught
up in the emotions of these kind of volatility. But
we can do things like rebalance. I mean, we rebalanced
a lot kind of coming into this year, pulling back
(34:24):
on growth and rebalancing a little towards fixed income, towards value,
rebalancing those exposures. And now we're kind of going a
little bit incrementally in the other direction where we've nded
up a little underweight equity targets on this fullback. So
it gives us the opportunity to do that look at
loss harvesting opportunities to help our clients offset their tax
bills in other areas. So we are being active, and yes,
(34:46):
we are certainly talking to them and telling them what
we're doing as we're going through this period.
Speaker 8 (34:50):
Ran.
Speaker 1 (34:50):
Because you do work with such high net worth individuals,
you describe them as ultra high net worth individuals. Do
they have a higher allocation to alternatives?
Speaker 11 (35:00):
Yes, absolutely we do. When you know, you need to
have a certain level of wealth to access some forms
of alternatives, and so that is a big part of
our investment philosophy and We do believe it's additive to
returns over time that you get a premium over what
you can do well.
Speaker 1 (35:15):
Alternative alternatives it's such a broad category, so you know,
dig into that part of the asset allocation. When we
talk alternatives, what do you think and are you thinking
venture capital, private equity, hedge fund, private credit? What is it?
All the above?
Speaker 11 (35:27):
So we are fully diversified with private capital gets so
private equity all the way, you know, from from venture
to buy out to all sorts of different areas.
Speaker 1 (35:36):
Directly invested or are you doing like funds.
Speaker 11 (35:38):
Of funds direct investments. In some cases we'll do you know,
a secondary strategy that may be more fund of funds
as part of the allocation, but we invest direct in
individual strategies typically and we do that on in the
private credit world. In private real estate, we do allocate
to hedge funds, which have you know a lot of
those with more defensive strategies or market neutral approaches have
(36:00):
held up really well in this environment.
Speaker 3 (36:03):
So kind of across the spectrum, how.
Speaker 4 (36:05):
Are you thinking about the environment, and certainly the news
flow out of Washington, the trade war. I hate to
keep saying war, but I don't know that it's a
trade war. It's just a back and forth of going
to do this, going to do this, going to do this,
and we're just watching very carefully.
Speaker 3 (36:19):
Market's definitely move, as you know on that news.
Speaker 4 (36:23):
But I am curious, are you expecting we get to
the other side and things settle down and we go
back to quote unquote normal for US equities and for
the US business environment and the US macro economic environment,
or are things going.
Speaker 3 (36:40):
To be different.
Speaker 11 (36:42):
We're hoping that we can at least get through this
kind of whipsod back and forth headline driven just complete
focus on tariff situation. I mean, what we're hearing is
that negotiations are in process, and hopefully if we start
to see some trade deals materialize over the next couple
of months, hopefully that will help help the market restabilize,
(37:04):
help the focus kind of shift back to let's see
what are what's happening with company earnings, what's happening with
other things, Like are we going to see like focus
on tax cuts or extending the tax cuts, deregulation, things
that would be more supportive to the narrative. I think this,
you know, tariffs, it's going to be part of the
conversation for a while. But we're hopeful that this kind
(37:24):
of voluntility we've seen over the last few weeks will
at least settle.
Speaker 4 (37:27):
Down your background. You've got a Bachelor of Science degree
in psychology. You've got an MBA as well, but that
degree in psychology, you know, Tim has cut brought up
a lot. And you know, we think about sentiment a
lot in the market, but that University of Michigan consumer
sentiment number that was that plunged to nearly a three
year low, and that.
Speaker 3 (37:46):
Was in the last week or so.
Speaker 4 (37:48):
Sentiment in the markets is does it feel healthy, does
it feel nervous? And how are you? How concerned are you?
Even the nervousness you're getting from some of your clients
that that turns into actions and people saying, I want
to pull back.
Speaker 3 (38:02):
I'm not comfortable.
Speaker 11 (38:04):
That's a very fair question. And we saw a sentiment
surge following the election, and we've gone the complete opposite direction,
and we've seen it both on the consumer side and
the business side that it's just come down so much
and it is in a concerning spot and that people
are not feeling good right now. And when you're in
that spot, then you're having people are spending less, businesses
(38:27):
are holding off on making investments or doing any hiring,
and you're kind of coming this in this period where
we're just on hold and got it when you're not
kind of a bad spot though, any kind of positive
news or even halfwic positive news can really help market
to move up. It's looking for a reason at this point.
Speaker 4 (38:47):
All right, going to leave it there, have a good weekend,
Ryan Bittrioni. She's founding partner, Founder, Partner and CFA over
at Callan Family Office. They've got about seven and a
half billion in assets under management.
Speaker 2 (38:58):
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Speaker 2 (00:08):
This is Bloomberg business Week Daily reporting from the magazine
that helps global leaders stay ahead with insight on the people, companies,
and trends shaping today's complex economy. Plus global business finance
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Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 3 (00:32):
A couple legal actions we want to get to you
right now.
Speaker 4 (00:34):
First of all, earlier today Google partially losing a US
advertising tech antitrust case, and just moments ago, the US
Supreme Court saying we'll hear arguments on President Trump's bid
to start enforcing an executive order that would restrict automatic
birthright citizenship and upend a longstanding constitutional right.
Speaker 3 (00:53):
The Court saying today.
Speaker 4 (00:55):
Will keep his restrictions on hold in advance of that
May fifteenth argument.
Speaker 1 (00:58):
I want to bring in Bloomberg News team leader Sarah
Ford and Sarah joins us from our Washington DC bureau.
I want to start with the Supreme Court setting to
hear arguments in the birthright sistemship case. How does this work?
Give us the sort of schoolhouse rock version of how
the Supreme Court could change what is written in the
US Constitution.
Speaker 5 (01:17):
Well, I mean this has been, as you said, a
longstanding belief of constitutional scholars and others that the right
to birthright citizenship is sacrosanct. So the fact that they
are willing to take this up and to start to
parse it and consider the restrictions that are being proposed
by the Trump administration means that this right could potentially
(01:39):
be in play going forward.
Speaker 3 (01:41):
So what's next May fifteenth?
Speaker 5 (01:43):
Is that what we focus So, as you said, the
restrictions are on hold for now, but May fifteenth will
be a closely closely followed arguments. This usually takes several
hours where we listen attentively to what each of the
justices the questions that they're asking and how that might
indicate what they're thinking.
Speaker 3 (02:01):
Is I mean, this.
Speaker 4 (02:01):
Would be a significant change in a policy that's been standing.
Speaker 5 (02:05):
Yeah, I mean this has been sacri saying that the
children of people who are non citizens who are born
in this country have the right to American citizenship. So
this will go to hospitals across the country when babies
are born. Are they going to give those babies a
Social Security number or not? And so this could start
to roll back that, and it's part of the Trump
(02:27):
administration's larger, very aggressive crackdown on immigration to this country
over multiple What.
Speaker 1 (02:33):
Is the legal case here, because in the Section one
of the fourteenth Amendment of the Constitution, it does go
into the fact that all persons born or naturalized in
the US are subject and subject to the jurisdiction thereof
are citizens of the US and the state wherein they reside.
Is the Supreme Court challenging the meaning of that.
Speaker 5 (02:53):
That clause subject to the jurisdiction thereof is the one
that is being put into question, and the questions whether
these non citizens who are here are really subject to
the jurisdiction. And so that is what they're going to
tease out in part during these arguments.
Speaker 3 (03:08):
So I am curious, what did you just happen? Oh,
I'm sorry, there's a lot of stuff happening.
Speaker 1 (03:15):
Yeah, producers are talking to Carol, So I'm jumping in
a little bit. I was asking specifically about Section one
of the fourteenth Defendment, okay, and how that is open
to interpretation with this legal case.
Speaker 4 (03:24):
Sorry, it's one of those kind of days and kind
of these weeks in one of these kind of years.
I want to flip to Google and the case there
of Google partially losing a US advertising tech anti trust case.
This was a federal judge finding Google to have legally
illegally monopolize some online ad technology markets in a blow
to what is a really key part of Google's business.
Speaker 3 (03:47):
Walk us through this one.
Speaker 5 (03:49):
Yeah, absolutely. This is the second major ruling against Google
in a tech anti trust case. And this case has
to do with the pipeline that Underpins's advertising business. So
they control the technology soup to nuts, from the ad
servers to the putting these ads on websites. And this
(04:10):
judge found that Google monopolizes the part that has to
do with the ad server tools. And I know this
is all very wonky, but it goes back to their
acquisition of a company called double Click in two thousand.
Speaker 1 (04:21):
That was so long ago, long ago.
Speaker 5 (04:24):
So the DOJ actually is in the remedy portion of
this case, which will follow today's decision, is DJ is
asking for the judge to order Google to sell off
that double Click unit. But of course, over the years
it has been integrated into their business, and so it's
kind of like trying to unscramble the omelet.
Speaker 3 (04:42):
So is there an appeal coming to we assume so Kenny.
Speaker 5 (04:45):
Google has already said they will appeal this part of
the case. They did win the part of the case
that has to do with display ads, so so they're
safe on that count. But all of this marks a
bigger reckoning for the tech companies that have gotten so powerful,
and it shows that we have a rare little spot
(05:06):
of bipartisan consensus on antitrust and limiting the power of
big tech because these cases have been taken forward both
by the first Trump administration who filed the first Google
case which was about search, and the metacase, which is
currently playing out in another DC courtroom, and they were
(05:29):
carried forward by the Biden administration. So we're not seeing
a lot of light between conservatives and liberals on these cases.
Speaker 4 (05:37):
Just real quickly, just about twenty seconds here, sour. So
that's what I was going to ask, because we know
this was a kind of second major blow to Google
that was already found to have monopolized the online search
market in a separate case.
Speaker 3 (05:48):
Is this all Google.
Speaker 4 (05:49):
Specific or I kind of get the feeling it's a
larger message here for some of those big tech guys.
Speaker 3 (05:53):
Just quickly.
Speaker 5 (05:55):
This is a larger message and we have cases running
now against Amazon, Meta, Apple, and Google. So yes, it's
broad all right.
Speaker 1 (06:03):
Just thinking, I'm just thinking of those CEOs of those
companies were all at the inauguration. I think they were.
I believe they were just making sure.
Speaker 3 (06:11):
Yeah, it's working out well, cool, all right.
Speaker 4 (06:13):
Bloomberg News Legal team leader Sarah Fordon, thank you so much.
We really appreciate you joining us.
Speaker 2 (06:19):
You are listening to the Bloomberg Business Week podcast. Catch
us live weekday afternoons from two to five pm Eastern.
Listen on Apple CarPlay and Android Auto with the Bloomberg
Business app, or watch us live on YouTube.
Speaker 3 (06:33):
We want to stay with the future of j. Powell.
Speaker 4 (06:37):
Of course, the fed share things have just come out
of this press conference that is ongoing here in the
White House again the President making another comment he should
do the right cuts. So we want to kind of
get into this, and we have a great voice we do.
Speaker 1 (06:51):
Let's bring in Katerina Sariva. She joins us from Houston,
also with us as Michael McKee's Bloomberg News International Economics
and Policy correspondent. He joins us here in the studio.
I do want to start with you, because you have
been monitoring these Powell or these Trump comments. I should say,
in the context of what we heard from j. Powell yesterday,
you were there in Chicago, just give me your impression
(07:11):
of what we're hearing from the President right now and
what the message is that he has for the Federal Reserve.
Speaker 6 (07:17):
At the moment, I'm still seeing this as saber rattling,
trying to influence the FED. The President said this morning
he is a word termination. Other White House officials have
told other networks that he didn't mean firing him, And
then today in the Oval office, they said, are you
trying to get rid of him? And he said, yeah, yeah,
But what does that really mean. We know he doesn't
(07:40):
like Powell, and we know he doesn't like the fact
that the FED is not cutting interest rates as the
president would like, but there isn't There's a real debate
about whether the President has any power to get rid
of the FED chair, which we can go into later.
But I don't think that we're necessarily any closer to
(08:01):
Powell being ousted or an attempt to oust him by
the President. But I think that because Powell spoke yesterday
and gave the impression they're not going to cut rates soon,
that he's just venting again on the FED chair.
Speaker 4 (08:13):
I mean, you can't fire a FED chair just because
you don't like their policy, can you.
Speaker 1 (08:16):
Well, is that I don't.
Speaker 3 (08:19):
Know, is that?
Speaker 1 (08:20):
Cause?
Speaker 6 (08:21):
Like I said, we can go into the whole background.
But in theory, legal experts say that's not cause, causes
malfeasance or illegality or something like that. The question is
not so much cause. It's this whole Article two issue
about whether the president has unfettered ability to run everything
in the executive branch, including what are supposed to be
(08:44):
independent agencies.
Speaker 4 (08:45):
Well, and to that, there are some legal actions that
are out there that are testing the limits of presidential
authority to remove agency officials without cause. I want to
just bring in Bloomberg News Federal Reserve reporter Katerina Sariva,
who's with us from Houston. Katerina, what do we know
about these cases and what it could possibly potentially I
want to be careful here, but what it could mean
(09:05):
in terms of the presidential authority to possibly get rid
of the FED chair.
Speaker 7 (09:10):
Yeah, I mean that's you know, as Mike was just saying,
the big question. So we have a couple cases that
have kind of filtered their way through the federal court
system and will are expected to be taken up by
the Supreme Court soon. So these are kind of They
both have to do with what's called Humphries Executor, which
(09:34):
is a provision from nineteen thirty five, a Supreme Court
ruling that found that the president could not unilaterally fire
members of boards. Now the Supreme Court has already chipped
away at that a little bit. There was a twenty
twenty decision about the CFPB that said, when it's a
(09:56):
single directory, the President does have that authority to to
fire that person. But the open question is kind of
how it applies still to multi member boards. So the
decisions going up to the Supreme the cases going up
to the Supreme Court now are not specifically about the
Federal Reserve. It's other government agencies, but it's a similar
(10:20):
structure where they have multiple people on the board.
Speaker 1 (10:23):
You know, Katerina, we're monitoring what's going on in the
Oval Office right now. The President is with Georgia Maloney,
the Prime Minister of Italy. He's still making more comments.
Just as you were speaking about the Federal Reserve, he said,
interest rates are pretty flat. They should be better. Costs
are down, very little inflation. The Fed owes it to
Americans to get interest rates down. Powell will have a
lot of political pressure and the only thing Powell is
(10:44):
good for is lowering rates. I want to go back
to Mike McKee, International Economics and Policy correspondent. He's here
in our studio too. He's looking at these comments as well.
Just fact check us a little bit with where inflation is,
where costs are, and how you view the comment that
the President said the only thing Paul is good for
is lowering rates.
Speaker 6 (11:03):
Well, it depends on which measure you want to use.
As always, we say with the inflation numbers, but basically
they're getting very close to the Fed's target, the CPI down,
and now we're here after we've had the other numbers
and people plugged in the data. The Fed's target is
the PCE index, and that's now forecast to come in
about two point three percent. So inflation has come down.
(11:27):
The issue is not that inflation is coming down, because
if this were an ordinary time, the Fed would be
probably lining up to cut rates again. I think pretty
much all of them want to, but they can't because
they don't know what is going to happen, and this
may be what set the president off. Powell yesterday saying
(11:49):
that the tariffs as announced were bigger than people thought,
and they will have a bigger impact than people thought.
Inflation will probably go higher than we estimated. And in
that case, because that's a possibility if Ed doesn't want
to move right now, and that makes sense.
Speaker 4 (12:05):
So he also said the president, if Europe has cut rates,
that puts a set in a disadvantage.
Speaker 6 (12:10):
They're not comparable. The European economy is growing barely one percent.
We've been growing two and a half or better. First
quarter may not be great, but there may be some
statistical anomalies there. Their unemployment rate is much higher than ours,
and their interest rates are lower than ours. So at
(12:34):
this point you can't really say that it's a comparable situation.
Speaker 4 (12:38):
And we should point out that the remarks and the
press event in the Oval Office has ended, so that
should be the end of those headlines. Katherine, I want
to go back to you for one more thought. I
mean so legally, I mean how easy would it be
potentially and I guess, depending on how all these rulings go,
could it be for the President to maybe remove Fetcher
(13:01):
J Powell.
Speaker 7 (13:03):
Yeah, I mean if the rulings are broad and not
very narrow, right, if they if they are seen to
apply to basically any multi member agency, then yeah, that
leaves the door wide open for the President to fire
the fet Share. There are some legal scholars and some folks,
and we heard it from Chair Powell yesterday as well,
(13:24):
that think that there is likely to be a carve
out specifically for the FED. We have heard, we had,
we've been in a decision a few years ago. Justice
Alito kind of eluded, you know, talked a little bit
about how the Federal Reserve is a unique entity. So
there there might be appetite for that at the Supreme
(13:46):
Court to kind of carve out the FED. But it
remains to be seen.
Speaker 5 (13:50):
Now.
Speaker 7 (13:51):
I think one of the important factors for Trump, even
if he has the permission to do so, is the
reality of how the markets would react, right, because it
would be quite a reaction in markets, and that may
prevent them from ultimately acting.
Speaker 3 (14:06):
All right, really appreciate you, wangan, Katerina. We're going to
let you go. Thank you so much.
Speaker 4 (14:10):
So, Katerina Saravas, she is Bloomberg News Federal Reserve reporter.
We're going to continue that a little bit more with
Mike in terms of Fetcher J. Powell and his tenure.
Speaker 1 (14:19):
Yeah, so, Mike, I do want to bring you back
in here because and we're going to get to trade
in just a minute, because there were some headlines on
the trade side of things coming from that Oval Office meeting.
But if we think about this in the context of
what we heard from the president in his first term,
he would tweet at the time about the FED lowering
interest rates. The FED chair has in the past addressed
(14:44):
questions about pressure and political pressure. He's talked about maintaining independence.
As of now, though, given what we heard from the
President today, are there any more questions about the pressure
that he must be feeling or he may be feeling.
Speaker 6 (14:56):
Well, he may be feeling pressure, But he is giving
the same answer it was asked yesterday and again he said,
we will do what we do without any regard to
political pressure. Our job is the mandate that Congress gave
us maximum employment and stable prices, and that's what we're
going to do. We'll make our decisions based on what
(15:16):
gets us to those mandates.
Speaker 3 (15:18):
Fetcher J.
Speaker 4 (15:19):
Powell also said yesterday our independence is a matter of law.
Congress has it in our statute. We're not removable except
for cause we serve very long terms, seemingly endless terms,
he said, So we're protected in the law. So you know,
Congress could change that law, but there's I don't think
there's any danger of that. That independence has pretty broad
support across both political parties. I'm going to ask the obvious.
(15:41):
I know the answer, but we've got to ask it.
Maybe for those who are like, well, couldn't you just
get rid of the FED? I mean, if President Trump
just got rid of feedcher J. Powell just kind of
because he wanted to, and there was no real cause,
what would that say potentially to the independence of the Fed?
And again, just why having an independent fact is crucial
(16:02):
and when it doesn't happen, we see what happens two countries.
Speaker 6 (16:05):
That part is easy because there have been many, many
studies that show countries with independent central banks have much
lower interest rates, much lower inflation rates, and it's just
overall better for the economy. And there's no debate among
economists or I think investors, Wall Street Global, Wall Street
(16:26):
kind of people about that. Now if the President tried
to fire Powell, I think there would be a rebellion
on Wall Street. Krishnaghoo, is I ever core said today
if you like the reaction to the tariff announcement, just
wait till you get Trump has fired at US.
Speaker 1 (16:47):
You're saying the bond market could get yippie.
Speaker 6 (16:49):
Yeah, they could get so it's kind of a technical.
Speaker 1 (16:52):
Term, but yeah, okay, that's good to know, Mike. One
last question to you, this one on trade, because we
did hear the President and Prime Minister the Resident just
now saying that they discussed trade other things and that
Italy will have to increase their imports of LNG. Remind
us because the European Union is this block. Remind us
(17:13):
if individual countries can actually go and negotiate their own
trade deals with the US or do they have to
do it as the EU.
Speaker 6 (17:19):
Well, they have to do it as an as the
EU as a block to negotiate a trade agreement. Now,
there's no reason that Italy couldn't buy more of one product.
They could say we want more LNG. We saw that
during the initial phase of the Ukrainian War, countries that
(17:40):
needed natural gas buying more from the United States and
other places. But the idea of an overall trade deal
that would exempt them from tariffs probably has to go
through Brussels. I mean, that's the structure they have set up.
Speaker 4 (17:56):
All right, We're gonna leave it there. Great timing. Thanks
for dropping by.
Speaker 6 (18:01):
And it knows when I'm here to make.
Speaker 1 (18:03):
It a coordinate schedules, right, five o'clock, Balance of power,
five o'clock, talk about it again. To see you next.
Speaker 4 (18:10):
Michael McKee, International Economics and Policy Correspondent, Bloomberg News.
Speaker 2 (18:15):
This is the Bloomberg Business Week podcast. Listen live each
weekday starting at two pm Eastern on Apple car Play
and the 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 5 (18:33):
Well.
Speaker 1 (18:33):
President Donald Trump said during a meeting with Italian Prime
Minister Georgia Maloney that he expects to reach a trade
deal with the EU, but he indicated he's in no
hurry to finalize tariff agreements.
Speaker 8 (18:44):
We're doing very well with negotiations, I think with all countries,
and Scott could tell you a little bit, but we
are doing very well. We have a lot of countries
that want to make a deal. Frankly, they want to
make deals more than I do. Tariffs are making those rich.
Speaker 7 (19:00):
Well.
Speaker 1 (19:01):
That was President Trump from the Oval Office, alongside Italian
Prime Minister Georgia Maloney. The Scott by the way, he
referred to with Scott Bess and the Treasury Secretary of
the US separately, well not separately, but also I should say,
the EU carol is working on a proposal to introduce
restrictions on some exports to the US as a possible
retaliatory tactic in that expense of trade war that the
President initiated last month.
Speaker 4 (19:22):
All right, for the latest, let's head to Stephanie law.
She's Bloomberg News White House correspondent. She is out there
in our DC bureau. Hey, Stephanie, So, I just want
to cut to the chase. Are things moving forward when
it comes to trade negotiations and should we assume sooner
rather than later that there could be some kind of deals,
better deals maybe perhaps announced that maybe kind of cool
(19:42):
the heat that we've seen and what feels like a
trade war.
Speaker 9 (19:46):
Yeah, I mean, I think that's what we've all been
waiting for. But it remains unseen when a deal will
come together. You know, they've mentioned for a couple I
guess about a week now that they have about fifteen
or so offerers and that there are people coming to
the White House make deals.
Speaker 8 (20:00):
You know.
Speaker 9 (20:01):
Notably, nothing really came out of the Japan talks yesterday.
Now it was a preliminary meeting, sure, but the President
still did attend. And so everything we've been hearing from
our sources, from just what's coming out of the White
House is that deals are being made, that they're not
really in a rush. And Trump himself is saying, you know,
repeatedly in the last week that he really doesn't mind
waiting because we're bringing in a bunch of revenue and
(20:24):
money from these exports or the imports that were putting
tariffs on and so he doesn't seem to be in
a rush. It seems like his team is very focused
on making good deals. But you know, one thing that
the Secretary Treasury Secretary Besent mentioned at this Oval meeting
was that South Korea is expected to come next week.
So we're still seeing some trade partners come in. Discussions
(20:46):
are still happening, but in terms of the timing, it
doesn't quite seem like an immediate remedy.
Speaker 1 (20:50):
Okay, South Korea, Japan, something's missing, Yeah, I was gonna say,
and then Italy, of course, what about the big one?
What about China? Is there any movement there?
Speaker 6 (21:00):
Yeah?
Speaker 9 (21:00):
I mean reporters did press the President on this throughout
this last week. He doesn't seem to say that he
has reached out. It's not clear if China has reached out,
and so it doesn't really seem like we've moved from
this impasse that we've already encountered earlier last week, when
the tariffs had started ramping up in this trade war
continued to escalate.
Speaker 4 (21:18):
All right, good to leave it there, Hey, Stephanie, thank
you so much. STEPHANIELI Bloomberg News White House correspondent joining
us from our Washington, DC bureau.
Speaker 1 (21:25):
So that is the latest when it comes to DC
and the trade war. We're also really interested on how
companies that import goods are dealing with this. The Notori
Company is one of those firms that's really caught in
the crosshairs right now. It's a designer fashion brand that
does sleep where lingerie, swimwear, Fragrance, Bridle, fine jewelry, and more.
We've got Kennatory with us. He's the president. We should
note that before his work at Notori, he worked here
(21:47):
at Bloomberg Radio and TV. That was until two thousand
and three. He joins us here in the Bloomberg Interactive
Brokers studio. Good to see you, Ken. You are the
perfect guy to talk to about this because of what
is happening in your world, and I want to know
what has happened in your world because you manufacture in China,
you manufacture in the Philippines. What's going on it is?
Speaker 10 (22:05):
First off, thanks for having me always. Great to be
back at Bloomberg. Feels like I'm coming back home. It's
just it's really challenging right now. There's just not a
lot of visibility in terms of what stuff is going
to be like. Obviously, we had the chaos of the
beginning of the month. There was a time where we
thought places outside of China would be really difficult to
manufacture in because the tariffs in Vietnam Cambodia were much
(22:27):
higher than expected. Then those came down to ten percent,
China went even higher. So you know, we've got plans
for every different scenario, but we don't know what the
scenario is actually going to be So it's really hard.
You know, I think a lot of people in our
industry have just been waiting a little bit to see
how things would shake out. But we're all in a
position now where we have to make decisions and it's
hard to make decisions without visibility.
Speaker 3 (22:48):
Yeah, no, absolutely.
Speaker 4 (22:49):
What's the best and worst case scenarios that you are
kind of planning for?
Speaker 10 (22:55):
So we thought the worst case. So, you know, we
have our own manufacturing facility, our own factory in the Filippines
where we do about seventy percent of our manufacturing of
the collections that we do in how so that is
a tremendous advantage. That said, we still have twenty five
to thirty percent exposure in China, which is a lot.
You know, we have been building models for twenty five
percent out of China, forty five percent, tariffs out of
(23:16):
China one hundred and forty five percent. Yesterday there was
a rumor of going up to two hundred and forty
five percent, which is I mean, how do you plan
business around that? And what's interesting for us is, you know,
we sell direct to consumer onnry dot com, but we
also sell to department stores. Our wholesale partners that we've
been with, you know, throughout our forty eight years as
a company, right and we've got these long term partnerships.
They need to know, like what what are we going
(23:38):
to buy product at? And we have to give they're
asking for a price, and we don't know what the
tariff is going to be when we ship in sixty
to ninety days, So there's so much uncertainty. You know,
we're working very closely with our retail partners to come
up with some way for us both to be protected
because we're you know, we're we have great partnerships, but
with a complete lack of visibility in terms of what
those tariffs are actually going to be, it's just it's
(23:59):
a little bit of a guessing game at this point.
But everybody has to start taking action, and that's where
it gets a little scary.
Speaker 1 (24:03):
The President would say, the point of these tariffs are
to bring manufacturing back to the United States. Is there
a number that you'd see on China or the Philippines
that would cause you to move production to the US?
Speaker 10 (24:15):
I mean, I will say if so, you know, if
tariffs stay at one hundred and forty five percent out
of China. People will not be able to import apparel
from China. It's going to move you know, who knows
what it's going to be in the other countries. If
he puts one hundred and forty five percent tariff on
every single country in the world, then eventually, eventually, I
(24:35):
you know, maybe apparel manufacturing could come back to the
United States. But that's a long process that doesn't happen overnight.
Speaker 3 (24:41):
How long is that process?
Speaker 1 (24:43):
You know, I don't know.
Speaker 10 (24:43):
I like, I've never thought that we would have to
like invest in our own manufacturing.
Speaker 4 (24:46):
There's there's a visiblity you could to say, okay, guys,
you start making it.
Speaker 1 (24:50):
And it's not the facility.
Speaker 10 (24:51):
It's also the skills. Think about like training workers, Like
how many people do you know in the US We're like, oh, yeah,
I know how to do that. It's about training a workforce.
It's about equipment, it's about machinery. So in theory, yeah,
I'd love to bring jobs back to the US, But
like right now, like people are like, how are you
dealing with this? If I sat in my desk and
called every manufacturer in the US that could make apparel
(25:12):
for US, yeah, that would take zero seconds. Because I
don't know, they don't exist for us. Now that's not
to say.
Speaker 1 (25:18):
It couldn't happened down the road.
Speaker 10 (25:19):
I mean, you know, we could come up with any
kind of scenario, but as of right now, like what
we're supposed to do in our seat, it's it's a
little confusing.
Speaker 1 (25:28):
How much would it cost? Do you think to you know,
I don't so the world? Is the world just a
fantasy at this point because the skills don't exist here
in the US, the manufacturing doesn't exist here in the US.
Does my question even? Is my question even relevant?
Speaker 10 (25:43):
So it could be relevant to bigger companies, and I
think you know, you've seen articles where this is really
going to hurt smaller companies, the independent companies like us.
Like if you're a bigger company, like if you want
to go tell Nike or under Armour or Victorious Secret, Hey,
you guys build yourrone manufacturing in the US, Well maybe
they have the money to do that and the ability
to like right, like you know, you know, we're a
(26:05):
privately held business. The idea of like, hey, we're actually
going to invest in you know, building building our own
manufacturing facilities in the US, Like that's that's very difficult,
and it's not like there are these existing factories that
we can tap into to move to domestic production.
Speaker 4 (26:19):
What don't we maybe as a society understand about Chinese manufacturing.
I think we think it's maybe we think of our history,
you know, dirty factories, industrial factory, you know what I mean,
and just kind of but they're very sophisticated. Tell us
a little bit about your experience in terms of time.
I'm assuming you've visited your factories.
Speaker 1 (26:38):
Yeah, yeah, of course.
Speaker 10 (26:39):
So you know, I spent a lot of time at
our own company owned factory in the Philippines, but I
have traveled to China a lot from twenty fifteen to
twenty twenty obviously to meet with our manufacturing partners there.
They are very good, They're very dedicated, and you know,
they know what they're doing and they're willing to do
the work. And this is you know, it's it's tough
work to do. It is it is tough work to do.
Speaker 3 (26:58):
So how sophistic is the technology involved in all of that?
Speaker 10 (27:01):
Well, so it depends, you know, for apparel, it's you
know everything. There are certain parts of making clothes that
can be machine done. Like if you look at socks
or hosiery. That's usually like machines and people looking at
and operating the machines and observing them. But when it
comes to actual like apparel manufacturing, like the cut and so,
that involves a lot of handwork. You know, that involves
(27:23):
sort of detailed work, you know, using a sewing machine,
and it's you know, it's it's hard work. I'm not
sure like to get those skills in the US and
to have legitimate apparel manufacturing and real factories, it would
take a long time of training a workforce and in
a long time of building these facilities.
Speaker 1 (27:40):
So I want to go back to what you're doing
right now, because you essentially described a state of paralysis
where you really are waiting to see what the decision
is or how long these tariffs are in place to
make a decision. How long can you actually wait because
at a certain point you're going to have to make
a decision and your partners are going to have to
get their clothes and you're gonna have to tell the
folks in China and the Philippines UH to start making
these things.
Speaker 10 (27:59):
Yeah, so we were paralysis at the beginning of the month,
and now so for the as I mentioned, we have
our own factory in the Philippines. To the degree we
had some programs in China, we are actively trying to
move those and countersource and move those programs to the Philippines.
We can't do everything there are there is a there's
a lot of industry that cannot be done anywhere outside
(28:19):
of China. And I think that's what's interesting, Like everybody's
trying to move out of China now. But if you
think about something like Christmas ornaments, like it's you know,
I was talking to a department store partner, we were
visiting with them last week. They're like, we might not
even have a Christmas ornament department this holiday season because
that's the only place these things are made. So they're
going to be you know, the consumers is going to
(28:40):
see a lot of consumers is certainly going to see
higher prices, but there could be huge categories of things
that you expect to see this fall that just might
might not be there.
Speaker 3 (28:50):
Unbelievable.
Speaker 4 (28:52):
It's just I know, it's kind of amazing to get
what go ahead materials.
Speaker 1 (28:57):
Yeah, are those are those from separate countries then China
and the Philippines. We hear a lot about that, and
that the supply.
Speaker 10 (29:03):
A lot so yet know, a lot of the fabrics,
a lot of fabrics come out of China. We get
the higher end fabrics out of out of South Korea,
but a lot of the fabrics do come from China.
And frankly, you know, even as a lot of the
finished goods are coming moving out of China to other places,
a lot of that fabric is still going to come
from China. So it's you know, they do a lot
(29:24):
there that is only done in that country. And could
it eventually move, yes, but all this stuff takes a
lot of time.
Speaker 4 (29:32):
So say, I am curious the fashion industry as a whole,
what kind of you know, uh access do they have
to the White House? And I'm just curious what they
are hearing, getting time with and so and of just
got about thirty seconds left.
Speaker 10 (29:46):
Yeah, I don't have any Yeah, I can tell you that,
you know, I you know, I know there's like the
c FDA which is putting out statements. I'm not sure
what direct access they have. I think their industries is
probably the White House cares a lot more about than
the fashion industry, for for better or worse. But you know,
I think there Wall Street probably has its eyes on
(30:08):
much bigger things. But I can say from my seat
it is it's a very interesting time for us, and
I think everybody's just trying to make the most of it.
Speaker 1 (30:14):
Or just twenty So are you gonna have to lay
anyone off? Do you think?
Speaker 10 (30:17):
I hope not. Yeah, No, I don't know. We'll see,
We'll see what happens. It is, it's a very difficult time.
There's complete uncertainty out there. There's complete uncertainty out there,
so it's it's challenging.
Speaker 4 (30:27):
Well, you open up a window to really understanding kind
of how things are made. I think we just take
things for granted in terms of closing items. Kenna Torrey,
thank you so much, president of the Notory Company. Joining
us here in studio.
Speaker 2 (30:40):
You're listening to the Bloomberg Business Week podcast. Catch us
live weekday afternoons from two to five pm Eastern. Listen
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Speaker 1 (30:55):
MUCA.
Speaker 8 (30:56):
I'll bet you let me drive.
Speaker 1 (30:57):
Oh no, no, no, no, this is not a toy.
Speaker 11 (31:00):
Who's gone to judge Honday?
Speaker 2 (31:02):
Please, I'll do the gravels wait, I want to drive.
It's a good questions try.
Speaker 1 (31:13):
This is the drive to the close. Now plunks to music.
Speaker 2 (31:16):
We'll drive us Kilda Dawn on Bloomberg Radio.
Speaker 3 (31:20):
All right, TikTok, everybody.
Speaker 4 (31:21):
We've got just about eighteen minutes to go until we
wrap up with the trading day and the trading week. Remember,
of course it's a good Friday holiday, so a holiday
shortened trading week, and we've been bouncing.
Speaker 1 (31:30):
Aroun Land market not even open right now, host it
to close it.
Speaker 3 (31:33):
To early early right now.
Speaker 4 (31:35):
The Dow Jones industrial average, it is down about one
percent as we speak. We know United Health has been
a big drag amy just breaking that down for you
as well. S and P five hundred just up about
four tons of a percent. Nastek one call it flat,
just up about six points.
Speaker 1 (31:49):
I did mention the bond market, so I do want
to say we did see yields rise ever so slightly today,
the tenure at four thirty two, four thirty three, we
can round that up.
Speaker 4 (31:58):
It's been an interesting, mellow, wish kind of week. I
mean really, although what we did see as a movement,
I guess it wasn't.
Speaker 1 (32:08):
Yeah, it's all relative. It wasn't like what we saw
last week, which was just wild in the week before.
Speaker 3 (32:12):
That fix is down about two and a half points.
We're moving. We're trading around thirty.
Speaker 4 (32:18):
Okay, you know, just you know, remember it was just
what last week that we were bopping up to sixty
or so. That was on April seventh, So we've been
moving our way down.
Speaker 3 (32:29):
Okay, look at that calming down ish?
Speaker 1 (32:31):
Yeah, well, I mean again, it's all relative.
Speaker 3 (32:33):
All right, Let's see what our guest has to say.
Speaker 1 (32:35):
Hey, I want to bring in Rayan Mitrioni. She's the
founding partner in CFA at Callan Family Office. She joins
us from West Palm Beach, Florida. Ryan, Good to have
you with us. The firm's got about seven a half
billion dollars in assets under management. You know it is
a wild week. When Carol says this week has been calm,
I should say a wild period of time. I wonder
(32:55):
I want to know what the questions that you're getting
from clients right now are, because we've been hearing a
lot about people rethinking act allocations going more to Europe.
What are you hearing?
Speaker 11 (33:08):
Absolutely? Thank you for having me, and it's it's true,
this week has felt a little calmer, but it is
all relative, very different than the last couple of years.
But yeah, I mean, clients are are We're certainly having
a lot of you know communication. I think that's the
most important thing when you're in a period like this
is staying close to clients, making sure they're feeling okay and.
Speaker 3 (33:30):
That are they feeling are they failing okay?
Speaker 5 (33:34):
It really depends.
Speaker 11 (33:35):
I mean, that's when it's about kind of reconfirming where
risk tolerances are and that allocations are in line with
where they should be because everyone has a high risk tolerance.
When the market's going up right, it's a lot easier then.
So it's like, how do you feel in this period?
And a lot of the clients we work with are
really ultra high net worth investors, so it's a little
bit different.
Speaker 3 (33:55):
So do they say it, do you forget it? Or
do they still are they kind of you know, do
they call you and say what are you doing? Like
should I be worried?
Speaker 8 (34:03):
Exactly?
Speaker 11 (34:04):
They still want to know that we're not just sitting
on our hands and doing nothing when we're in a
period like this, and we're not. I mean, we do
think it's important to stay true to you know, long
term strategic investment plans, you know, and not get caught
up in the emotions of these kind of volatility. But
we can do things like rebalance. I mean, we rebalanced
a lot kind of coming into this year, pulling back
(34:24):
on growth and rebalancing a little towards fixed income, towards value,
rebalancing those exposures. And now we're kind of going a
little bit incrementally in the other direction where we've nded
up a little underweight equity targets on this fullback. So
it gives us the opportunity to do that look at
loss harvesting opportunities to help our clients offset their tax
bills in other areas. So we are being active, and yes,
(34:46):
we are certainly talking to them and telling them what
we're doing as we're going through this period.
Speaker 8 (34:50):
Ran.
Speaker 1 (34:50):
Because you do work with such high net worth individuals,
you describe them as ultra high net worth individuals. Do
they have a higher allocation to alternatives?
Speaker 11 (35:00):
Yes, absolutely we do. When you know, you need to
have a certain level of wealth to access some forms
of alternatives, and so that is a big part of
our investment philosophy and We do believe it's additive to
returns over time that you get a premium over what
you can do well.
Speaker 1 (35:15):
Alternative alternatives it's such a broad category, so you know,
dig into that part of the asset allocation. When we
talk alternatives, what do you think and are you thinking
venture capital, private equity, hedge fund, private credit? What is it?
All the above?
Speaker 11 (35:27):
So we are fully diversified with private capital gets so
private equity all the way, you know, from from venture
to buy out to all sorts of different areas.
Speaker 1 (35:36):
Directly invested or are you doing like funds.
Speaker 11 (35:38):
Of funds direct investments. In some cases we'll do you know,
a secondary strategy that may be more fund of funds
as part of the allocation, but we invest direct in
individual strategies typically and we do that on in the
private credit world. In private real estate, we do allocate
to hedge funds, which have you know a lot of
those with more defensive strategies or market neutral approaches have
(36:00):
held up really well in this environment.
Speaker 3 (36:03):
So kind of across the spectrum, how.
Speaker 4 (36:05):
Are you thinking about the environment, and certainly the news
flow out of Washington, the trade war. I hate to
keep saying war, but I don't know that it's a
trade war. It's just a back and forth of going
to do this, going to do this, going to do this,
and we're just watching very carefully.
Speaker 3 (36:19):
Market's definitely move, as you know on that news.
Speaker 4 (36:23):
But I am curious, are you expecting we get to
the other side and things settle down and we go
back to quote unquote normal for US equities and for
the US business environment and the US macro economic environment,
or are things going.
Speaker 3 (36:40):
To be different.
Speaker 11 (36:42):
We're hoping that we can at least get through this
kind of whipsod back and forth headline driven just complete
focus on tariff situation. I mean, what we're hearing is
that negotiations are in process, and hopefully if we start
to see some trade deals materialize over the next couple
of months, hopefully that will help help the market restabilize,
(37:04):
help the focus kind of shift back to let's see
what are what's happening with company earnings, what's happening with
other things, Like are we going to see like focus
on tax cuts or extending the tax cuts, deregulation, things
that would be more supportive to the narrative. I think this,
you know, tariffs, it's going to be part of the
conversation for a while. But we're hopeful that this kind
(37:24):
of voluntility we've seen over the last few weeks will
at least settle.
Speaker 4 (37:27):
Down your background. You've got a Bachelor of Science degree
in psychology. You've got an MBA as well, but that
degree in psychology, you know, Tim has cut brought up
a lot. And you know, we think about sentiment a
lot in the market, but that University of Michigan consumer
sentiment number that was that plunged to nearly a three
year low, and that.
Speaker 3 (37:46):
Was in the last week or so.
Speaker 4 (37:48):
Sentiment in the markets is does it feel healthy, does
it feel nervous? And how are you? How concerned are you?
Even the nervousness you're getting from some of your clients
that that turns into actions and people saying, I want
to pull back.
Speaker 3 (38:02):
I'm not comfortable.
Speaker 11 (38:04):
That's a very fair question. And we saw a sentiment
surge following the election, and we've gone the complete opposite direction,
and we've seen it both on the consumer side and
the business side that it's just come down so much
and it is in a concerning spot and that people
are not feeling good right now. And when you're in
that spot, then you're having people are spending less, businesses
(38:27):
are holding off on making investments or doing any hiring,
and you're kind of coming this in this period where
we're just on hold and got it when you're not
kind of a bad spot though, any kind of positive
news or even halfwic positive news can really help market
to move up. It's looking for a reason at this point.
Speaker 4 (38:47):
All right, going to leave it there, have a good weekend,
Ryan Bittrioni. She's founding partner, Founder, Partner and CFA over
at Callan Family Office. They've got about seven and a
half billion in assets under management.
Speaker 2 (38:58):
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