June 17, 2025 • 35 mins
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
President Donald Trump met with his national security team in Washington on Tuesday to discuss the escalating Middle East conflict, according to people familiar with the matter, fueling fresh speculation that the US is on the verge of joining Israel’s attack on Iran.
The meeting lasted over an hour and the White House provided no immediate statement afterward. Before gathering his advisers in the Situation Room, Trump posted a demand for Iran’s “UNCONDITIONAL SURRENDER” and warned of a possible strike against the country’s leader, Ayatollah Ali Khamenei. “We know exactly where the so-called ‘Supreme Leader’ is hiding. He is an easy target, but is safe there - We are not going to take him out (kill!), at least not for now,” Trump posted on social media.
Israel also sought to ratchet up pressure on Iran, signaling it will intensify a campaign of air strikes that have targeted the country’s nuclear facilities as well as military leaders and infrastructure. US weapons are seen as key to achieving a more complete destruction of the Islamic Republic’s atomic program than anything Israel can do alone.
The escalating war began with an Israeli attack late last week and has seen the sworn enemies trade missile salvos for five days. Trump departed early from the Group of Seven leaders meeting in Canada to deal with the crisis.
Today's show features:
- Bloomberg News Pentagon and National Security Reporter Tony Capaccio
- Dana Telsey, Founder, CEO and Chief Research Officer of Telsey Advisory Group
- Stamatis Tsantanis, Chairman & Chief Executive Officer of global shipping companies Seanergy Maritime and United Maritime
- Travis McCready, JLL’s Head of Industries, Leasing Advisor
See omnystudio.com/listener for privacy information.
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Transcript
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 Week
Daily Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio.
Speaker 3 (00:32):
We're going to stay on the Middle East and to
why the US could be possibly drawn more deeply into
the attacks on Rand's nuclear facilities, and that's where we
want to go next.
Speaker 4 (00:42):
For more, we head to our Washington DC News bureau
into Bloomberg Newspending on in national security reporter Tony Capasio.
First up, Tony, is the US preparing for war right now?
Speaker 5 (00:53):
I think they're positioning what they call assets in the
region for the eventuality of strikes. I'm not sure you
can call it war, but the tanker thing, the twenty
tankers in the region, I think that's a message to
Iran that the US may be preparing for round the
clock bombing campaigns and parts of Iran aided by air
(01:14):
refueling aircraft.
Speaker 3 (01:16):
When is war war and when is it just hostilities
or conflict. Help me out here. I have a hard
time understanding the differences.
Speaker 5 (01:23):
Called declarations of war. Remember Iraq, we were going into
a weapons of mass destruction and then there was regime
change and all the cataclysm that happened from that for
over a decade. A lot of echoes here, regime change,
undeclared war, preemptive strikes, a lot of two thousand and
three echoing through this conflict.
Speaker 3 (01:44):
Why does the US maybe have to make its presence
known in Iran? And I got to say all credit
to Tim who, like on our morning call, was saying,
we got to talk about the bunker Buster, give us
some background on that and what we know and why
that might also pull the US possibly to the conflict
with her.
Speaker 5 (02:03):
On Okay, the bunker Buster is a massive ordinance penetrator.
It's a thirty thousand pound bomb that can only be
dropped from the B two stealth bomber. They are now
based in Whiteman Air Force Base. They were in Diego,
Garcia recently, but they've come back.
Speaker 3 (02:18):
So they would have to do long.
Speaker 5 (02:20):
Refueling missions maybe fifteen hours sixteen hours in flight one
way do their bombing precision bombing of the Farido en
Richmond facility and then probably land to Diego, Garcia. That
is an active war. It's not a preanmptive strike. It's
an active war on an enemy that we don't have
any that hasn't threatened the United States recently, So the
(02:43):
public has to be aware of that. But that would
be the biggest, biggest contribution we can make to destroying
that facility. It's the only bomber that can do that,
and those are the only weapons that really can penetrate
deeply enough and they can fire. They can drop sequentially
behind the other and pound the living daylights out of it.
Speaker 4 (03:03):
Unfortunately, why is it that the US is the only
country that has this bomb and the ability to deliver
this bomb? Why has the US not shared this technology
with other parts of the world, with its allies.
Speaker 5 (03:16):
Well, A, it was secret until the number of years ago.
The Pentagon is still very reticent to talk about it.
But b it was designed around the B two bomber,
the stealth bomber. You know, you can say what you
want about it, but it's had successful mission since its introduction.
Is first attack in Serbia in the nineteenth nineteen ninety six,
I think it was. But it's our technology. It's a
(03:38):
developed it's a classified weapons program on a classified bomb,
a bomber.
Speaker 3 (03:46):
Excuse me, no.
Speaker 5 (03:47):
Other nation in the world really has that capability, that
platform to carry it. Now if we have sold other
bunker busters to Israel and the two two thousand pounds variety,
but thus those can be dropped from F fifteen ease
and some of their other aircraft, but they can't be
dropped from F thirty five's Those bombs are too big
for the F thirty five.
Speaker 3 (04:06):
Your experience on this world covering the Pentagon, understanding national security?
When the president calls his advisors into the situation room,
what's the optics on that? Are there any conclusions we
can make? Or is it just where they go to
have a safe conversation about national security issues.
Speaker 5 (04:24):
I think the optics are that the Joint Chase of Staff,
their job is to present the president with not only
options for military power, but the potential collateral or down
the road impacts that the politicians. The politicians might not
have thought of. I think any talk with Trump would
also discuss the implications going back to Irock, remember the
(04:46):
weapons of mass destruction. All of a sudden, the society
collapsed there over two years and we were sucked into
a ten year conflict. I think that would resonate with
the White House. This President say what you want about it,
but he has not voiced support for long term preemptive
strikes and getting US sucked into Middle East wars.
Speaker 4 (05:06):
I want to go back to the B two spirit
you said, it's that Whiteman Air Force Base right now.
Is where they're being, where they're stationed, where they're based.
Is it possible that these could move to a different
position ahead of some sort of US military action and
that would indicate a certain red line that the US
(05:27):
has crossed.
Speaker 2 (05:28):
It definitely could.
Speaker 5 (05:30):
They could do a high profile flyaway. Basically, they're not
going to fly from white Men without being seen by
local plane watchers and then split plane tracking software which
may or may not be able to pick up every
part of a stealth bomber's flight. But people in the region,
in the area there, they'd be watching for these things
(05:50):
and be flying off and there would be a lot
of chatter about it. But yeah, if we still flow
flew these two uh back to Diego Garcia, that'd be
a very strong signal. If we flew these to Lake
and Heath Air Force Base in England. That would be
a signal too. Those are the I mean, Diego Garcia's
got the ideal location and the hangars, the hangars to
(06:12):
store these valuable airplanes. But I think the US could
send a real message by parading the elephants through the
air these b two elephants and letting the world know.
Speaker 3 (06:21):
You're not expecting boots on the ground by the US though.
Speaker 5 (06:24):
Well, we've got forty We've got about forty thousand airmen,
air women, airmen, naval and Army Navy marines in the region.
It's like like four thousand or so in Iraq and
another two thousand or so in Syria, all for the
counter ISIS campaign. But I'm not expecting more boots on
(06:46):
the ground, if that's what you mean.
Speaker 3 (06:47):
Okay, you said four or forty.
Speaker 5 (06:50):
Forty thousand in the region, Okay, to twenty five hundred
in i Rock, Okay, and about two thousand in Syria.
So the forty thousand would include airman in various bases
around the region. We had many bases, and then the
naval forces, so that'd be the cumulative all right.
Speaker 3 (07:08):
Thank you so much. Can't even tell you how much
we appreciate it. Tony as always Tony Capacio. He's Washington,
DC's man on the ground when it comes to the
Pentagon and national security issues, joining us from our bureau.
They are so appreciated.
Speaker 2 (07:23):
You are listening to the Bloomberg Business Weekdaily Podcast. Catch
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Listen on Apple CarPlay and Android Auto with the Bloomberg
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Speaker 3 (07:37):
In the meantime, we got some headlines this morning, and
it had to do with the retail sector here in
the United States. US retail sales falling for a second
straight month in May, suggesting some anxiety over tariffs and
also finances, prompting maybe consumers to pull back a bit
after an early year spending rush. US retail sales. Here's
the data, zero point nine percent to the downside month
(08:00):
of May. That's the largest decline since the start of
the year, with seven of thirteen categories tim posting declines.
Speaker 4 (08:06):
We've got a trusted a voice on retail, somebody who's
analyzed this area through multiple cycles and gets into the
details like no one else. The founder, CEO and Chief
Research Officer of Telsey Advisory Group, Dana Telsea here in
our Bloomberg BusinessWeek studio. I want to start with the
big picture data data. The data that we got earlier today,
the largest decline since the start of the year. Obviously,
(08:27):
people not buying cars has a lot to do with this,
But is it proof that tariffs do affect the way
that customers think about buying things?
Speaker 6 (08:35):
So a couple things you have, Yes, it was one
of the weakest months. You look at cars, which were
the real weak link. It's twenty percent of retail sales.
You've seen some of the other data points where the
sporting goods department stores frankly did a touch better. I
think overall the pull forward of sales, I think we're
seeing some of that. We put out a tracker every
Tuesday of eighty items and how the prices have changed.
(08:57):
We've done this for nine weeks now, We're going to
continue to do it. We haven't seen much change in
prices yet. Expectations are second half of July into back
to school is when you'll see the price upticks and
when you speak to companies it'll more be on some
of the goods that are newer and have more product
or make or embellishment in them. Essentials are going to
be watched very carefully. The phrasing is surgical and select
(09:20):
items where there are price increases. That's where it will happen.
It won't be across everything, but the mood and the sentiment.
Look at the numbers you got Friday from the Sentiment Index.
Those are better than expected. A little surprising given the
headwinds that you're seeing in some of the services. The
restaurant numbers certainly continue to show a downturn.
Speaker 3 (09:39):
So yeah, so add it up for us, like you've
seen cycles, you've seen stress points that we have gone through,
whether you know Great Financial Crisis, COVID, like, there's a
lot of things. How would you describe the retail environment?
And I know it's hard to throw everything in one
bucket because there's so many different verticals.
Speaker 6 (09:53):
I think right now it's more uncertain the change that's
different this retail environment than others. Even luxury has come down,
even your luck, so your high income spender isn't spending
in the same magnitude, and you don't have the flood
of tourists that have come to the United States like
you had in the past to buy those discretionary items.
You're still seeing essentials grocery. That's where the consumer is spending.
(10:15):
They'll spend selectively on some services, but take a look.
We've seen airfares, Loo, Corojet Blue today talk about reduced demand.
So how I added up is it feels a little
bit more uncertain because of the volatility, and it's not
complete down trends across the board. It's very selective and
I think could it come yes, I think it's more
(10:36):
let's go into the summer, through the second half of
the summer and see what these price increases are. But
there's more concern over slowing than growing.
Speaker 4 (10:44):
It's interesting that you brought in tourism here, especially when
it comes to retail. I'm wondering on the other side
of things, we've heard from executives and companies, including Coca
Cola that the crackdown on immigration is actually affecting their sales.
I'm wondering from a retail environment, is the ice on
undocumented immigrants weighing on sales for any retailers out there
at this point. People being afraid to shop, people afraid
(11:06):
to go out.
Speaker 6 (11:07):
That sort of and you think about it for restaurants
in terms of the workers working in restaurants, you've certainly
seen it some of the low end points and the retailers.
It's interesting that the dollar stores performed okay, so that's
where you would think you would, yeah, right, show up,
but it hasn't shown up there as much. And also
you look at Walmart. Walmart's sales were better than expected, so.
Speaker 3 (11:28):
We are seeing I hate to say trading down. I
feel so like not nice, but I just feel like
maybe just people are being smart right, I'm looking for
the best.
Speaker 6 (11:35):
Bar they are trading down. Look where Walmart has talked
about the biggest growth coming from is their highest income consumer.
You've seen it from others. Look at TJ Max on
the off price side, You've seen what they have and
they're an umbrella for pricing, so they'll always be lower
than everyone else. And I think they're going to be
a beneficiary as we go through the back half of
the year.
Speaker 4 (11:54):
When you and I spoke earlier this spring, you mentioned
that we could be seeing some empty shelves later this year.
Has that materialized in anything that you cover and is
that still a possibility.
Speaker 6 (12:05):
It's a possibility. It hasn't materialized yet because the goods
that are on the shelves right now, there's still some
of the lower cost goods. Ordering for holiday is happening
right now, and it would show up frankly first when
you get to the holiday season. But you know what,
you have TJX buyers overseas in China right now looking
to take over and take control of and acquire those
(12:28):
canceled items. So go to the off pricers.
Speaker 3 (12:30):
Yeah, kind of fascinating. Well, you know, and I just wonder,
you know, ultimately in terms of supply chains, right, we
talked about so much of that because of the tariffs, Dana.
When you think about you know, clothes and things like that,
I mean, it's already been moving away from China, correct, Like,
give me some perspective on where all of the stuff
that we are wearing, where it really is manufacting and where.
Speaker 6 (12:51):
Things are coming from. Yes, they've all looked to reduce
their exposure to China. Vietnam has been very popular. Mexico, Cambodia,
Brazil hard to come back into North America and the
US given the high labor costs, but it's been Mexico,
it's been Vietnam it's been Brazil and Cambodia that we
hear goods are going towards. How much is still made
(13:12):
in China depends on which type or retail retailer. Everyone
is trying to get to single digits. No one wants
to stick there at double digits.
Speaker 3 (13:22):
Was that happening ahead of It's been.
Speaker 6 (13:24):
Happening since the last time we had tariffs. Everyone had
accelerated it. But keep in mind one of the beneficies
of China labor costs are compelling, and the make that
they put into the product and the expertise is faster
and better than others. As a long time sourcing executive
always tells me, there's no China like China.
Speaker 3 (13:44):
Wow, Okay, but.
Speaker 4 (13:45):
It seems like Dana, at least for President Trump. It
doesn't matter if it's made in China or it's made
in Vietnam. It's not made in the US. It's going
to be hit with a tariff. Yes, So how are
retailers dealing with that?
Speaker 6 (13:55):
They'll raise prices on some selective goods, and it's a
third to third, a third, a third, they'll verify their sourcing,
a third, they'll share the cost of the manufacture and
a third, they'll raise prices on select goods to the
end consumer.
Speaker 4 (14:07):
When you say select goods, do you mean obviously it's
we can't put them all in the same bucket.
Speaker 3 (14:13):
Higher price goods, higher price.
Speaker 4 (14:14):
Goods because the consumer has a higher willingness to pay
because it's.
Speaker 6 (14:18):
New and different. It's something that isn't a basic okay, which.
Speaker 3 (14:21):
Makes me wonder like which companies are going to see
it hurt in terms of their balance sheets on that
you know, first quarter retail sales. Right, we've seen all
these numbers, So which names do you think stand out
really is the biggest winners? Which are the biggest loser.
You look at.
Speaker 6 (14:34):
Birkenstock with their closed toad shoes, very popular, still doing
really well. I think that there's definitely some moment in there.
You look at Tapestry with the Coach brand. They've been excelling.
They've been able to get better prices on some of
their goods. You look at Ralph Lauren who's been expanding
their purview in terms of the demographics that they appeal
to and it's been working for them. And then you
(14:56):
still see the value players, like the discounters and like
the off pricers continue to win.
Speaker 3 (15:02):
Okay, who doesn't too well.
Speaker 6 (15:04):
We've seen some of the women's apparel retailers be slow,
haven't been able to execute as well. It's definitely been
more challenging. You just had the announcement yesterday of at
Home filing for bankruptcy again. But these empty boxes are
being taken by a lot of the dollar stores and
the off price retailers. The off prices are each opening
one hundred stores a year.
Speaker 4 (15:24):
Data before we let you go, our companies, our retailers
are afraid to communicate two customers that prices are going up
as a result of tariffs, given what we saw from
the White House pushing back on Amazon and on Wiemart.
Speaker 6 (15:37):
Yes, I think you do have that, and I think
that's why the phrasing and the wording select surgical price increases,
and it's not across the board. Look at our price
tracker every Tuesday and you'll see what changes.
Speaker 3 (15:49):
All right, So second half should be interesting.
Speaker 6 (15:51):
Very interesting. Want to see that back to school time period.
Back to school typically is a pathway to the upcoming
holiday season. Look what it was just announced today that
Amazon's Prime day is going to be ninety six hours,
four days longer length. Let's see consumer response, all.
Speaker 3 (16:07):
Right, fascinating stuff. Always always appreciate the deep dove. Thank
you very much. Dana Telsey of course, she's the founder, CEO,
and Research officer of Telsey Advisory Group. Joining us right
here in studio.
Speaker 2 (16:18):
This is the Bloomberg Business Week Daily Podcast. Listen live
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two giant.
Speaker 3 (16:36):
Ocean going tankers collided and caught fire off the coast
of the United Arab Emirates near the Strait of Harmu's
energy choke points. Separately to vessels were approached by Iranian
boats near the strait in the last thirty six hours,
which is noteworthy, of course, during all of the tensions
we are seeing in the region now, the incident did
rattle global oil and shipping markets with forward freight agreements,
(16:58):
rallying and oil tank are they served more than fifty
percent due tim to the increased tensions.
Speaker 4 (17:04):
Yeah, the Israeli wrong conflict on the radar of the
global shipping industry, and that's exactly where we want to
go right now. Stas Stemmatist Santanas as chairman and CEO
of the publicly held global shipping company Senergy Maritime. The
ticker is SAHIP. Also United Maritime USAA is the ticker
United was spun off from Synergy back in twenty twenty two.
(17:26):
Stamata is good to have you back in the Bloomberg
BusinessWeek studio here in New York. Last time you joined
us was a few months ago. The conflict between Iran
and Israel was I think not on anybody's radar at
this at that point. What is the backdrop right now
given the regional conflict?
Speaker 7 (17:42):
Well, thank you for having me once again. It's great
to be here. Well, I mean, I don't know what
to say. I mean, every other month you have a
different situation coming up. We started with the Reussian invasion
to the Ukraine, and then we had the Red Sea
who it is? And now we have this so you know,
every little certain that comes up, it's great for you.
Speaker 3 (18:02):
A little uncertainty or is it something more significant?
Speaker 7 (18:04):
It's I want to be confident. I want to stay
like very very optimistic that nothing you know, not a
wider war is going to go around, but it's certainly,
you know, one of the situations where we have to
be really cautious about.
Speaker 4 (18:18):
Have you had to change the routes of any of
your ships as a result of this contract.
Speaker 8 (18:24):
Absolutely.
Speaker 7 (18:24):
I mean we were going through the Red Sea all
the time, connecting let's say Australia to Europe and all that.
Now we have to go around the Cape of Good Hope.
So that has added a lot to the tone mile effect,
and of course the pollution. Because you do more miles,
you emit more co twos, it's more expensive for the
consumers you go longer distance. So the answer is yes,
I mean, every little thing that happens or bigger thing,
(18:46):
it's good for rates.
Speaker 8 (18:47):
But but for the Earth, I guess.
Speaker 4 (18:49):
Do you see it getting worse in the Strait of
Horn Moves anytime in the near future. I know you
said you're optimistic, and you're optimistic by nature, but that's
a real energy choke point. As Carol mentioned, I.
Speaker 7 (18:59):
Want to believe that this nothing serious is going to happen,
and the collision you had today is not.
Speaker 8 (19:04):
Actually a product of wars.
Speaker 7 (19:05):
It's the shadow fleet, you know, the shadow fleet has
been going around since the Russian invasion, and you have
all these undocumented and shadow ships going around, and it's
like a danger and it's only a miracle that we
haven't seen more of these things happening because of the
shadow fleet.
Speaker 3 (19:20):
It's forgiving.
Speaker 7 (19:22):
Yeah, that's a product of the previous war, not like
this war.
Speaker 3 (19:25):
Now, how are you, as someone right who's got to
watch these things so closely determine like or think about, Okay,
this is not such a big issue, this could be
something more substantial.
Speaker 8 (19:34):
Well, we try to.
Speaker 7 (19:35):
Be prepared, I mean, except for the insurance and stuff.
Whenever we see like any conflict arising, we don't want
to put the risk health risk of our crews, of
our people, so we just stay out of that. And
we're lucky to have partnered with some of the world's
biggest chatters. And whenever we tell them that we want
to avoid what areas, they listen to us. So they're
(19:56):
not going to push us to go through the war areas.
Speaker 4 (19:58):
What tools do you have ships to prevent from pirate
attacks or defend from pirate attacks.
Speaker 7 (20:04):
We I mean, if anyone says that they have sophisticated
tools avoiding that they're lying because you know, we just
avoid these areas and whenever we have to cross pirate,
that is, we always have armed guards on board of ships.
Speaker 8 (20:17):
Otherwise there's no other way to do it, no other
way to do it.
Speaker 7 (20:20):
I mean, whoever says that these are commercial ships, slow
going commercial ships, targets and targets.
Speaker 8 (20:27):
Yeah, so you just avoid it all together. It's very big,
but yeah, super big. Okay.
Speaker 3 (20:32):
One thing I want to ask you what's great is
tim and I love to watch money flows, right, money
tells you so much, but I also love to watch
when it comes to transportation. Transportation flows tells us a
lot about what's going on in the world. The US
more protectionist policies. How has that impacted global drive? Ball
to mad What are you seeing in that regard?
Speaker 7 (20:49):
Well, I'm sureful it is what the right that is
on eventually, but so far it has created a lot
of uncertainty. A lot of people are just don't know
what to do. I mean, imports in the United States
have really dropped significantly in the last few months because
of the potential tariffs that I don't even know if
they have kicked in or not kicked in already, So
We need certainty and we need to make sure that
(21:11):
people will be able to trade always for the benefit
of the US consumer and always for the benefit of everybody.
But it really has to be like a dependable and
you know, to know what you expect.
Speaker 8 (21:23):
That's the thing.
Speaker 3 (21:23):
Certain things already changing in terms of you like flows
back to the United States. We have seen changes right already.
Speaker 7 (21:30):
Indeed, yes, I mean what we do, which is aron
oor coal and box site doesn't really change. It's still
super strong the demand for these raw materials because you
need it for infrastructure. As you know, a lot of
investors in including a lot of people here in the government,
have invested significantly in infrastructure in the Middle East. We
have one point six three million dollars of investments happening there,
(21:53):
new nice buildings and all that. So this is going
to happen. They are all fully funded and it's good
for our business.
Speaker 4 (21:59):
I guess the protectionist policies. I'm wondering what you're seeing
in terms of goods flowing to and from China, and
specifically of China is looking elsewhere for commodities that are
typically sourced from the US. I mean, we could talk grains,
we could talk corns, so I being wheat and the like,
or we could talk other commodities too.
Speaker 8 (22:15):
What are you seeing?
Speaker 7 (22:16):
Well, suddenly the last few weeks we saw a surge
in exports from the US golf, the American golf. So
we see a surge in, we see a surge of America.
Speaker 8 (22:27):
Yes, exactly, exactly.
Speaker 7 (22:28):
Well, I just wanted to hear what you So we
say surge in you know, corn products, maze, you know,
grains and all that. So that has been good. Actually
we're not expecting that. And we came into coming from
the US. Yes, and we do a lot of coal,
lot of going where to India and in China as well.
Speaker 8 (22:46):
We see that they're picking up slowly, slowly.
Speaker 3 (22:48):
That's but it was. It did slow down, It did.
Speaker 7 (22:50):
Slow down a load. Yeah, but now it's picking up again.
I don't know if it's going to be there to stay,
but for the time being, it's going quite well the.
Speaker 8 (22:56):
Last few weeks. Let's hope it's going to remain.
Speaker 7 (22:59):
And we do a lot of coal trades out of
India to sorry, Baltimore to India. So we've done a
couple of trades recently which we hadn't done for a while.
Speaker 3 (23:09):
So in terms of any of the flows that have shifted,
is it just in your view, kind of defensive maneuvers
and just a result of maybe short term blips and
you think things are going to go back to the
way it is, or do you see some new long
term trade flows based on the shipping demand.
Speaker 7 (23:25):
Well, China's reliance to the US grains has dropped a lot.
I mean, they learned their lesson in the previous administration,
not the immediate previous, but the previous before that. Yeah,
and they have now dependent They're more dependent now in
South American corpse, you know.
Speaker 8 (23:41):
So that's the corpse, you know. So that's the thing.
Speaker 7 (23:46):
If it ever gets back to, you know, importing more
and more grain products from the US, I hope it does,
but it doesn't really seem like that in the near future.
Speaker 4 (23:55):
Before we let you go just thirty seconds, I think
right now there's a focus on where ships are built
that has ben yes in focus really ever in my career,
specifically Chinese built ships. Are there any Chinese built ships
in your fleet in.
Speaker 7 (24:07):
Our Fluidat of the twenty nine we only have one,
which is basically a Japanese yard based in China. So
I don't know if that qualifies for Chinese altogether, but
the vast, vast majority is made in China, Yes, made
in China, but not really by a Chinese yard. So
the Chinese interesting. So I'm not concerned about us. The
only good thing I need to say is we've been
(24:29):
in discussions with the US administration about that issue, and
they're listening. They're positive, and they're listening. They want to
find a solution, So they're not like totally black or white.
I mean, they want to find a solution.
Speaker 4 (24:40):
Stematis love it when you join us yet Antanas, chairman
and CEO of the public held global shipping company Synergy.
Speaker 2 (24:48):
You are listening to the Bloomberg Business Weekdaily podcast. Catch
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Speaker 4 (25:03):
When the word uncertainty is used over and over, we
lean on other factors and metrics to help define a
time period that includes something like global real estate carol,
which of course is sensitive to macro factors like geopolitics,
and yes, the interest rate environment, which we just discussed
with Mike McKee.
Speaker 3 (25:20):
Yeah, one company with a view on all of this
is JLL former Jones Lang LaSalle, the publicly held global
professional services firm specializing in real estate investment management. Travis
McCready is the head of Industries Leasing Advisory in the
Americas for JLL. It's also chair of the JLL Global
Life Sciences Advisory Board. He oversees brokerage and advisory for
(25:41):
the company's key global industry vertical. So we're talking about
life sciences, healthcare, data centers, energy, security and defense, technology,
and higher education. There's a lot going on, So let's
get to it. He joins us from Boston. You've got
to be a busy individual, or maybe you're not. This
is what I want to ask you. You're not busy?
Speaker 8 (26:00):
Of course he's busy.
Speaker 4 (26:00):
He's got screens on screens in there.
Speaker 1 (26:02):
It's very busy, screens on screens. I'm busy.
Speaker 3 (26:06):
Well, listen as we As Tim mentioned in the in
the lead up to you that when there's uncertainty and
folks are saying uncertainty, a lot heads of companies are
saying are One of our conversations on global shipping, uncertainty
came up a lot. You know, where are you the
busiest region of the world area of the United States
category of real estate. Give us a picture, and where
(26:27):
are you not busy?
Speaker 9 (26:30):
Wow, I'd say uncategorically, without doubt.
Speaker 1 (26:35):
We're busiest in data centers, which.
Speaker 9 (26:40):
Is an area that affects pretty much every aspect of
the economy, every vertical and technology vertical that we cover
in real estate. Our ability to bring online additional data
centers across the United States is a rate limiting factor
to the growth of pretty much all our verticals.
Speaker 8 (27:02):
In that regard.
Speaker 9 (27:04):
Data centers are popping up anywhere that there's a correlation
between access to power, access to the right amounts of land,
and cooling infrastructure, which would include of course water and wastewater.
So that's my area of biggest activity levels. Second being
(27:27):
advanced manufacturing, and that's manufacturing, whether it's for semiconductors or
for biologicals.
Speaker 1 (27:35):
We're seeing a nice steady clip of activity around advanced
manufacturing across the United States.
Speaker 4 (27:40):
I'm wondering how you look at the protectionist policies that
the Trump administration, I won't even say toying with the
protectionist policies that the Trump administration has established or has
actually put into action at this point, we're talking tariffs,
we're talking about other ways to keep jobs here in
the United States and keep manufacturing here in the United States.
Has that affected your business.
Speaker 1 (28:02):
Yeah, I think there's.
Speaker 8 (28:04):
Uh.
Speaker 9 (28:04):
These policies are still a lot of them are still
in theory. So it's the uncertainty around these policies and
how they'll play themselves out in practice, which is really
driving a lot of decision making or in many cases,
lack of decision making by a lot of our businesses.
From a real estate standpoint, we definitely have felt post COVID,
(28:26):
in particular, the desire for businesses to control their supply chain,
and this is and this desire is really what's driving
the advanced manufacturing sector. We've definitely felt a desire for
increased employment around advanced manufacturing, particularly as it relates to
(28:46):
semiconductors and energy and the like. So these policies are
haven't really had the type of effect that we think
that we've we've wanted them to have, partially just because
they haven't been implemented in many cases as of yet.
The one policy that's really gotten a lot of our
(29:08):
folks in the life sciences in particular spoot is the
most favored Nation's clause in this notion around MFN pricing
really shifts the algebra around pharmaceutical prices and then in terms,
shifts the discussion about profitability and plowing some of those.
Speaker 1 (29:27):
Profits back into the R and D enterprise.
Speaker 9 (29:29):
That's really having a deep structural effect on how our
pharma companies are thinking about manufacturing here in the United States.
Speaker 3 (29:38):
So play it out so meaning that they're going to
You mentioned the number two busiest area is advanced biological
So the thinking is, okay, especially pharmaceuticals doing more manufacturing
more in the United States. And what about Puerto Rico.
I thought at one point we were doing a ton
of manufacturing there is there.
Speaker 1 (29:57):
Oh, we continue to do a ton of manufacturing and
import Rico.
Speaker 9 (30:00):
In fact, next time you go to the drug store
to buy tail and all, thank the Puerto Rican manufacturing
ecosystem because that's where eighty to eighty five percent of
all of the tile known in the United States comes from.
Speaker 1 (30:14):
The advanced manufacturing. However, we're talking about proteins.
Speaker 9 (30:20):
Biologics, selling gene therapy, manufacturing. A lot of that's happening
in a smaller scale, and it happening domestically while within
the continues forty eight that's you know, the type of
manufacturing we've seen the announced post tariff conversation, we had
(30:41):
about twenty seven billion dollars worth of those announcements.
Speaker 1 (30:44):
The degree to which those announcements come to fruition, however,
is what we're waiting to see.
Speaker 9 (30:50):
There's still a lot of uncertainty around the both the
tariff conversation and MFN conversation, and that will drive the
degree to which, or the rate at which those manufacturing
facilities are actually executed.
Speaker 4 (31:04):
You know, I wanted to talk geographically a little bit
with you because you've got such a great view on
what happens around the country and around the world. For
the last actually ever since I've been doing this job,
the Sun Belt, we've been talking about it growing and growing, growing,
and I'm starting finally to see a shift when it
comes to the Sun Belt. Some weakness happening there right now.
And I know you don't specialize in residential. That's where
(31:26):
we're starting to see some weakness, but certainly commercial is
tied to residential. Tell me what you're seeing in the
sun Belt.
Speaker 9 (31:34):
Yeah, the sun belts in it both an exciting and
slightly risky part of the United States right now from
a real estate standpoint.
Speaker 1 (31:44):
On the one hand, you're absolutely right.
Speaker 9 (31:46):
We're seeing demographic shifts into the Sunbelt into the southern
United States, and with that flow comes commercial activity. On
the other hand, we're also seeing and we're also seeing
UH structural weaknesses in the in.
Speaker 1 (32:04):
The grid in particular. In particular, and.
Speaker 10 (32:07):
The energy needs that these advanced technologies, whether it's UH
semiconductors or even our healthcare clients, the energy needs that
they're that they're demanding, we're increasingly having difficulty finding those sites,
finding that power infrastructure in order to be to satisfy
(32:30):
the commercial demand.
Speaker 1 (32:32):
So you're absolutely right.
Speaker 9 (32:35):
The point of signal strength obviously that we'll see first
is around residential, but the safety, security strength and growth
of the grid will dictate whether or not we can
continue this this growth pattern going forward.
Speaker 3 (32:51):
You know, we've actually had some really deep reporting on
this here at Bloomberg. This idea of you know, folks
that play into kind of the electrification play, the power demand,
whether it's through data centers, that we just don't have
the skilled workers to do it. And it's not just
a US thing. It's actually a global thing. And I'm
just curious from your perspective, which is the real estate
(33:12):
play are you seeing You said data centers, that's your
busiest area, But are you seeing somewhat any kind of
pulling back or slowing down because there isn't either the
labor to supply it and what's needed to be done,
or there's not the power there to supply it.
Speaker 9 (33:30):
We have this this section of our of our business
we call location analytics or location advisory, which basically is
a fancy, fancy way of saying that people's decision making
is very complicated and there are a lot of variables
that go into where to site a business or where
which state to locate a business. It's not always about
(33:51):
tax incentives or other sort of cash incentives.
Speaker 1 (33:54):
It's really about access to two or three core variables.
It's all.
Speaker 9 (33:57):
They're always at the top of a One is power,
and the second is people human capital. And it's our
ability to be able to train the workforce of tomorrow
that we'll be working in these advanced facilities.
Speaker 1 (34:14):
Again, that's the.
Speaker 9 (34:15):
Second great limiting factor of our growth. And here is
where we need the technical schools, We need the community colleges,
and we need higher education to be able to support
that thirst that we have for trained human capital for
these roles.
Speaker 1 (34:32):
So we have a very.
Speaker 9 (34:34):
Yes, we're real estate and we focus on infrastructure, but
increasingly we have to focus on our ability to be
able to deliver skilled workforce to be able to work
in our facilities.
Speaker 3 (34:46):
So relevant to our times right and for all the
investors who are listening right when we see these go
go sectors, whether it's data centers AI, there's a huge
technical equipment, but human capital in for structure that's needed
to power it going forward. And it's something we need
to think about about the momentum, how strong it can
ultimately be. Travis Great checking in with you. Travis McCready,
(35:08):
who's head of Industries Leasing Advisory and chair of the
JLL Global Life Sciences Advisory Board, joining us from Boston
on this Tuesday.
Speaker 2 (35:17):
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(35:38):
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Speaker 2 (00:08):
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Speaker 3 (00:32):
We're going to stay on the Middle East and to
why the US could be possibly drawn more deeply into
the attacks on Rand's nuclear facilities, and that's where we
want to go next.
Speaker 4 (00:42):
For more, we head to our Washington DC News bureau
into Bloomberg Newspending on in national security reporter Tony Capasio.
First up, Tony, is the US preparing for war right now?
Speaker 5 (00:53):
I think they're positioning what they call assets in the
region for the eventuality of strikes. I'm not sure you
can call it war, but the tanker thing, the twenty
tankers in the region, I think that's a message to
Iran that the US may be preparing for round the
clock bombing campaigns and parts of Iran aided by air
(01:14):
refueling aircraft.
Speaker 3 (01:16):
When is war war and when is it just hostilities
or conflict. Help me out here. I have a hard
time understanding the differences.
Speaker 5 (01:23):
Called declarations of war. Remember Iraq, we were going into
a weapons of mass destruction and then there was regime
change and all the cataclysm that happened from that for
over a decade. A lot of echoes here, regime change,
undeclared war, preemptive strikes, a lot of two thousand and
three echoing through this conflict.
Speaker 3 (01:44):
Why does the US maybe have to make its presence
known in Iran? And I got to say all credit
to Tim who, like on our morning call, was saying,
we got to talk about the bunker Buster, give us
some background on that and what we know and why
that might also pull the US possibly to the conflict
with her.
Speaker 5 (02:03):
On Okay, the bunker Buster is a massive ordinance penetrator.
It's a thirty thousand pound bomb that can only be
dropped from the B two stealth bomber. They are now
based in Whiteman Air Force Base. They were in Diego,
Garcia recently, but they've come back.
Speaker 3 (02:18):
So they would have to do long.
Speaker 5 (02:20):
Refueling missions maybe fifteen hours sixteen hours in flight one
way do their bombing precision bombing of the Farido en
Richmond facility and then probably land to Diego, Garcia. That
is an active war. It's not a preanmptive strike. It's
an active war on an enemy that we don't have
any that hasn't threatened the United States recently, So the
(02:43):
public has to be aware of that. But that would
be the biggest, biggest contribution we can make to destroying
that facility. It's the only bomber that can do that,
and those are the only weapons that really can penetrate
deeply enough and they can fire. They can drop sequentially
behind the other and pound the living daylights out of it.
Speaker 4 (03:03):
Unfortunately, why is it that the US is the only
country that has this bomb and the ability to deliver
this bomb? Why has the US not shared this technology
with other parts of the world, with its allies.
Speaker 5 (03:16):
Well, A, it was secret until the number of years ago.
The Pentagon is still very reticent to talk about it.
But b it was designed around the B two bomber,
the stealth bomber. You know, you can say what you
want about it, but it's had successful mission since its introduction.
Is first attack in Serbia in the nineteenth nineteen ninety six,
I think it was. But it's our technology. It's a
(03:38):
developed it's a classified weapons program on a classified bomb,
a bomber.
Speaker 3 (03:46):
Excuse me, no.
Speaker 5 (03:47):
Other nation in the world really has that capability, that
platform to carry it. Now if we have sold other
bunker busters to Israel and the two two thousand pounds variety,
but thus those can be dropped from F fifteen ease
and some of their other aircraft, but they can't be
dropped from F thirty five's Those bombs are too big
for the F thirty five.
Speaker 3 (04:06):
Your experience on this world covering the Pentagon, understanding national security?
When the president calls his advisors into the situation room,
what's the optics on that? Are there any conclusions we
can make? Or is it just where they go to
have a safe conversation about national security issues.
Speaker 5 (04:24):
I think the optics are that the Joint Chase of Staff,
their job is to present the president with not only
options for military power, but the potential collateral or down
the road impacts that the politicians. The politicians might not
have thought of. I think any talk with Trump would
also discuss the implications going back to Irock, remember the
(04:46):
weapons of mass destruction. All of a sudden, the society
collapsed there over two years and we were sucked into
a ten year conflict. I think that would resonate with
the White House. This President say what you want about it,
but he has not voiced support for long term preemptive
strikes and getting US sucked into Middle East wars.
Speaker 4 (05:06):
I want to go back to the B two spirit
you said, it's that Whiteman Air Force Base right now.
Is where they're being, where they're stationed, where they're based.
Is it possible that these could move to a different
position ahead of some sort of US military action and
that would indicate a certain red line that the US
(05:27):
has crossed.
Speaker 2 (05:28):
It definitely could.
Speaker 5 (05:30):
They could do a high profile flyaway. Basically, they're not
going to fly from white Men without being seen by
local plane watchers and then split plane tracking software which
may or may not be able to pick up every
part of a stealth bomber's flight. But people in the region,
in the area there, they'd be watching for these things
(05:50):
and be flying off and there would be a lot
of chatter about it. But yeah, if we still flow
flew these two uh back to Diego Garcia, that'd be
a very strong signal. If we flew these to Lake
and Heath Air Force Base in England. That would be
a signal too. Those are the I mean, Diego Garcia's
got the ideal location and the hangars, the hangars to
(06:12):
store these valuable airplanes. But I think the US could
send a real message by parading the elephants through the
air these b two elephants and letting the world know.
Speaker 3 (06:21):
You're not expecting boots on the ground by the US though.
Speaker 5 (06:24):
Well, we've got forty We've got about forty thousand airmen,
air women, airmen, naval and Army Navy marines in the region.
It's like like four thousand or so in Iraq and
another two thousand or so in Syria, all for the
counter ISIS campaign. But I'm not expecting more boots on
(06:46):
the ground, if that's what you mean.
Speaker 3 (06:47):
Okay, you said four or forty.
Speaker 5 (06:50):
Forty thousand in the region, Okay, to twenty five hundred
in i Rock, Okay, and about two thousand in Syria.
So the forty thousand would include airman in various bases
around the region. We had many bases, and then the
naval forces, so that'd be the cumulative all right.
Speaker 3 (07:08):
Thank you so much. Can't even tell you how much
we appreciate it. Tony as always Tony Capacio. He's Washington,
DC's man on the ground when it comes to the
Pentagon and national security issues, joining us from our bureau.
They are so appreciated.
Speaker 2 (07:23):
You are listening to the Bloomberg Business Weekdaily 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 (07:37):
In the meantime, we got some headlines this morning, and
it had to do with the retail sector here in
the United States. US retail sales falling for a second
straight month in May, suggesting some anxiety over tariffs and
also finances, prompting maybe consumers to pull back a bit
after an early year spending rush. US retail sales. Here's
the data, zero point nine percent to the downside month
(08:00):
of May. That's the largest decline since the start of
the year, with seven of thirteen categories tim posting declines.
Speaker 4 (08:06):
We've got a trusted a voice on retail, somebody who's
analyzed this area through multiple cycles and gets into the
details like no one else. The founder, CEO and Chief
Research Officer of Telsey Advisory Group, Dana Telsea here in
our Bloomberg BusinessWeek studio. I want to start with the
big picture data data. The data that we got earlier today,
the largest decline since the start of the year. Obviously,
(08:27):
people not buying cars has a lot to do with this,
But is it proof that tariffs do affect the way
that customers think about buying things?
Speaker 6 (08:35):
So a couple things you have, Yes, it was one
of the weakest months. You look at cars, which were
the real weak link. It's twenty percent of retail sales.
You've seen some of the other data points where the
sporting goods department stores frankly did a touch better. I
think overall the pull forward of sales, I think we're
seeing some of that. We put out a tracker every
Tuesday of eighty items and how the prices have changed.
(08:57):
We've done this for nine weeks now, We're going to
continue to do it. We haven't seen much change in
prices yet. Expectations are second half of July into back
to school is when you'll see the price upticks and
when you speak to companies it'll more be on some
of the goods that are newer and have more product
or make or embellishment in them. Essentials are going to
be watched very carefully. The phrasing is surgical and select
(09:20):
items where there are price increases. That's where it will happen.
It won't be across everything, but the mood and the sentiment.
Look at the numbers you got Friday from the Sentiment Index.
Those are better than expected. A little surprising given the
headwinds that you're seeing in some of the services. The
restaurant numbers certainly continue to show a downturn.
Speaker 3 (09:39):
So yeah, so add it up for us, like you've
seen cycles, you've seen stress points that we have gone through,
whether you know Great Financial Crisis, COVID, like, there's a
lot of things. How would you describe the retail environment?
And I know it's hard to throw everything in one
bucket because there's so many different verticals.
Speaker 6 (09:53):
I think right now it's more uncertain the change that's
different this retail environment than others. Even luxury has come down,
even your luck, so your high income spender isn't spending
in the same magnitude, and you don't have the flood
of tourists that have come to the United States like
you had in the past to buy those discretionary items.
You're still seeing essentials grocery. That's where the consumer is spending.
(10:15):
They'll spend selectively on some services, but take a look.
We've seen airfares, Loo, Corojet Blue today talk about reduced demand.
So how I added up is it feels a little
bit more uncertain because of the volatility, and it's not
complete down trends across the board. It's very selective and
I think could it come yes, I think it's more
(10:36):
let's go into the summer, through the second half of
the summer and see what these price increases are. But
there's more concern over slowing than growing.
Speaker 4 (10:44):
It's interesting that you brought in tourism here, especially when
it comes to retail. I'm wondering on the other side
of things, we've heard from executives and companies, including Coca
Cola that the crackdown on immigration is actually affecting their sales.
I'm wondering from a retail environment, is the ice on
undocumented immigrants weighing on sales for any retailers out there
at this point. People being afraid to shop, people afraid
(11:06):
to go out.
Speaker 6 (11:07):
That sort of and you think about it for restaurants
in terms of the workers working in restaurants, you've certainly
seen it some of the low end points and the retailers.
It's interesting that the dollar stores performed okay, so that's
where you would think you would, yeah, right, show up,
but it hasn't shown up there as much. And also
you look at Walmart. Walmart's sales were better than expected, so.
Speaker 3 (11:28):
We are seeing I hate to say trading down. I
feel so like not nice, but I just feel like
maybe just people are being smart right, I'm looking for
the best.
Speaker 6 (11:35):
Bar they are trading down. Look where Walmart has talked
about the biggest growth coming from is their highest income consumer.
You've seen it from others. Look at TJ Max on
the off price side, You've seen what they have and
they're an umbrella for pricing, so they'll always be lower
than everyone else. And I think they're going to be
a beneficiary as we go through the back half of
the year.
Speaker 4 (11:54):
When you and I spoke earlier this spring, you mentioned
that we could be seeing some empty shelves later this year.
Has that materialized in anything that you cover and is
that still a possibility.
Speaker 6 (12:05):
It's a possibility. It hasn't materialized yet because the goods
that are on the shelves right now, there's still some
of the lower cost goods. Ordering for holiday is happening
right now, and it would show up frankly first when
you get to the holiday season. But you know what,
you have TJX buyers overseas in China right now looking
to take over and take control of and acquire those
(12:28):
canceled items. So go to the off pricers.
Speaker 3 (12:30):
Yeah, kind of fascinating. Well, you know, and I just wonder,
you know, ultimately in terms of supply chains, right, we
talked about so much of that because of the tariffs, Dana.
When you think about you know, clothes and things like that,
I mean, it's already been moving away from China, correct, Like,
give me some perspective on where all of the stuff
that we are wearing, where it really is manufacting and where.
Speaker 6 (12:51):
Things are coming from. Yes, they've all looked to reduce
their exposure to China. Vietnam has been very popular. Mexico, Cambodia,
Brazil hard to come back into North America and the
US given the high labor costs, but it's been Mexico,
it's been Vietnam it's been Brazil and Cambodia that we
hear goods are going towards. How much is still made
(13:12):
in China depends on which type or retail retailer. Everyone
is trying to get to single digits. No one wants
to stick there at double digits.
Speaker 3 (13:22):
Was that happening ahead of It's been.
Speaker 6 (13:24):
Happening since the last time we had tariffs. Everyone had
accelerated it. But keep in mind one of the beneficies
of China labor costs are compelling, and the make that
they put into the product and the expertise is faster
and better than others. As a long time sourcing executive
always tells me, there's no China like China.
Speaker 3 (13:44):
Wow, Okay, but.
Speaker 4 (13:45):
It seems like Dana, at least for President Trump. It
doesn't matter if it's made in China or it's made
in Vietnam. It's not made in the US. It's going
to be hit with a tariff. Yes, So how are
retailers dealing with that?
Speaker 6 (13:55):
They'll raise prices on some selective goods, and it's a
third to third, a third, a third, they'll verify their sourcing,
a third, they'll share the cost of the manufacture and
a third, they'll raise prices on select goods to the
end consumer.
Speaker 4 (14:07):
When you say select goods, do you mean obviously it's
we can't put them all in the same bucket.
Speaker 3 (14:13):
Higher price goods, higher price.
Speaker 4 (14:14):
Goods because the consumer has a higher willingness to pay
because it's.
Speaker 6 (14:18):
New and different. It's something that isn't a basic okay, which.
Speaker 3 (14:21):
Makes me wonder like which companies are going to see
it hurt in terms of their balance sheets on that
you know, first quarter retail sales. Right, we've seen all
these numbers, So which names do you think stand out
really is the biggest winners? Which are the biggest loser.
You look at.
Speaker 6 (14:34):
Birkenstock with their closed toad shoes, very popular, still doing
really well. I think that there's definitely some moment in there.
You look at Tapestry with the Coach brand. They've been excelling.
They've been able to get better prices on some of
their goods. You look at Ralph Lauren who's been expanding
their purview in terms of the demographics that they appeal
to and it's been working for them. And then you
(14:56):
still see the value players, like the discounters and like
the off pricers continue to win.
Speaker 3 (15:02):
Okay, who doesn't too well.
Speaker 6 (15:04):
We've seen some of the women's apparel retailers be slow,
haven't been able to execute as well. It's definitely been
more challenging. You just had the announcement yesterday of at
Home filing for bankruptcy again. But these empty boxes are
being taken by a lot of the dollar stores and
the off price retailers. The off prices are each opening
one hundred stores a year.
Speaker 4 (15:24):
Data before we let you go, our companies, our retailers
are afraid to communicate two customers that prices are going up
as a result of tariffs, given what we saw from
the White House pushing back on Amazon and on Wiemart.
Speaker 6 (15:37):
Yes, I think you do have that, and I think
that's why the phrasing and the wording select surgical price increases,
and it's not across the board. Look at our price
tracker every Tuesday and you'll see what changes.
Speaker 3 (15:49):
All right, So second half should be interesting.
Speaker 6 (15:51):
Very interesting. Want to see that back to school time period.
Back to school typically is a pathway to the upcoming
holiday season. Look what it was just announced today that
Amazon's Prime day is going to be ninety six hours,
four days longer length. Let's see consumer response, all.
Speaker 3 (16:07):
Right, fascinating stuff. Always always appreciate the deep dove. Thank
you very much. Dana Telsey of course, she's the founder, CEO,
and Research officer of Telsey Advisory Group. Joining us right
here in studio.
Speaker 2 (16:18):
This is the Bloomberg Business Week Daily Podcast. Listen live
each weekday starting at two pm Eastern on Apple car
Play and Android Auto with the Bloomberg Business app. You
can also listen live on Amazon Alexa from our flagship
New York station, just Say Alexa played Bloomberg eleven thirty
two giant.
Speaker 3 (16:36):
Ocean going tankers collided and caught fire off the coast
of the United Arab Emirates near the Strait of Harmu's
energy choke points. Separately to vessels were approached by Iranian
boats near the strait in the last thirty six hours,
which is noteworthy, of course, during all of the tensions
we are seeing in the region now, the incident did
rattle global oil and shipping markets with forward freight agreements,
(16:58):
rallying and oil tank are they served more than fifty
percent due tim to the increased tensions.
Speaker 4 (17:04):
Yeah, the Israeli wrong conflict on the radar of the
global shipping industry, and that's exactly where we want to
go right now. Stas Stemmatist Santanas as chairman and CEO
of the publicly held global shipping company Senergy Maritime. The
ticker is SAHIP. Also United Maritime USAA is the ticker
United was spun off from Synergy back in twenty twenty two.
(17:26):
Stamata is good to have you back in the Bloomberg
BusinessWeek studio here in New York. Last time you joined
us was a few months ago. The conflict between Iran
and Israel was I think not on anybody's radar at
this at that point. What is the backdrop right now
given the regional conflict?
Speaker 7 (17:42):
Well, thank you for having me once again. It's great
to be here. Well, I mean, I don't know what
to say. I mean, every other month you have a
different situation coming up. We started with the Reussian invasion
to the Ukraine, and then we had the Red Sea
who it is? And now we have this so you know,
every little certain that comes up, it's great for you.
Speaker 3 (18:02):
A little uncertainty or is it something more significant?
Speaker 7 (18:04):
It's I want to be confident. I want to stay
like very very optimistic that nothing you know, not a
wider war is going to go around, but it's certainly,
you know, one of the situations where we have to
be really cautious about.
Speaker 4 (18:18):
Have you had to change the routes of any of
your ships as a result of this contract.
Speaker 8 (18:24):
Absolutely.
Speaker 7 (18:24):
I mean we were going through the Red Sea all
the time, connecting let's say Australia to Europe and all that.
Now we have to go around the Cape of Good Hope.
So that has added a lot to the tone mile effect,
and of course the pollution. Because you do more miles,
you emit more co twos, it's more expensive for the
consumers you go longer distance. So the answer is yes,
I mean, every little thing that happens or bigger thing,
(18:46):
it's good for rates.
Speaker 8 (18:47):
But but for the Earth, I guess.
Speaker 4 (18:49):
Do you see it getting worse in the Strait of
Horn Moves anytime in the near future. I know you
said you're optimistic, and you're optimistic by nature, but that's
a real energy choke point. As Carol mentioned, I.
Speaker 7 (18:59):
Want to believe that this nothing serious is going to happen,
and the collision you had today is not.
Speaker 8 (19:04):
Actually a product of wars.
Speaker 7 (19:05):
It's the shadow fleet, you know, the shadow fleet has
been going around since the Russian invasion, and you have
all these undocumented and shadow ships going around, and it's
like a danger and it's only a miracle that we
haven't seen more of these things happening because of the
shadow fleet.
Speaker 3 (19:20):
It's forgiving.
Speaker 7 (19:22):
Yeah, that's a product of the previous war, not like
this war.
Speaker 3 (19:25):
Now, how are you, as someone right who's got to
watch these things so closely determine like or think about, Okay,
this is not such a big issue, this could be
something more substantial.
Speaker 8 (19:34):
Well, we try to.
Speaker 7 (19:35):
Be prepared, I mean, except for the insurance and stuff.
Whenever we see like any conflict arising, we don't want
to put the risk health risk of our crews, of
our people, so we just stay out of that. And
we're lucky to have partnered with some of the world's
biggest chatters. And whenever we tell them that we want
to avoid what areas, they listen to us. So they're
(19:56):
not going to push us to go through the war areas.
Speaker 4 (19:58):
What tools do you have ships to prevent from pirate
attacks or defend from pirate attacks.
Speaker 7 (20:04):
We I mean, if anyone says that they have sophisticated
tools avoiding that they're lying because you know, we just
avoid these areas and whenever we have to cross pirate,
that is, we always have armed guards on board of ships.
Speaker 8 (20:17):
Otherwise there's no other way to do it, no other
way to do it.
Speaker 7 (20:20):
I mean, whoever says that these are commercial ships, slow
going commercial ships, targets and targets.
Speaker 8 (20:27):
Yeah, so you just avoid it all together. It's very big,
but yeah, super big. Okay.
Speaker 3 (20:32):
One thing I want to ask you what's great is
tim and I love to watch money flows, right, money
tells you so much, but I also love to watch
when it comes to transportation. Transportation flows tells us a
lot about what's going on in the world. The US
more protectionist policies. How has that impacted global drive? Ball
to mad What are you seeing in that regard?
Speaker 7 (20:49):
Well, I'm sureful it is what the right that is
on eventually, but so far it has created a lot
of uncertainty. A lot of people are just don't know
what to do. I mean, imports in the United States
have really dropped significantly in the last few months because
of the potential tariffs that I don't even know if
they have kicked in or not kicked in already, So
We need certainty and we need to make sure that
(21:11):
people will be able to trade always for the benefit
of the US consumer and always for the benefit of everybody.
But it really has to be like a dependable and
you know, to know what you expect.
Speaker 8 (21:23):
That's the thing.
Speaker 3 (21:23):
Certain things already changing in terms of you like flows
back to the United States. We have seen changes right already.
Speaker 7 (21:30):
Indeed, yes, I mean what we do, which is aron
oor coal and box site doesn't really change. It's still
super strong the demand for these raw materials because you
need it for infrastructure. As you know, a lot of
investors in including a lot of people here in the government,
have invested significantly in infrastructure in the Middle East. We
have one point six three million dollars of investments happening there,
(21:53):
new nice buildings and all that. So this is going
to happen. They are all fully funded and it's good
for our business.
Speaker 4 (21:59):
I guess the protectionist policies. I'm wondering what you're seeing
in terms of goods flowing to and from China, and
specifically of China is looking elsewhere for commodities that are
typically sourced from the US. I mean, we could talk grains,
we could talk corns, so I being wheat and the like,
or we could talk other commodities too.
Speaker 8 (22:15):
What are you seeing?
Speaker 7 (22:16):
Well, suddenly the last few weeks we saw a surge
in exports from the US golf, the American golf. So
we see a surge in, we see a surge of America.
Speaker 8 (22:27):
Yes, exactly, exactly.
Speaker 7 (22:28):
Well, I just wanted to hear what you So we
say surge in you know, corn products, maze, you know,
grains and all that. So that has been good. Actually
we're not expecting that. And we came into coming from
the US. Yes, and we do a lot of coal,
lot of going where to India and in China as well.
Speaker 8 (22:46):
We see that they're picking up slowly, slowly.
Speaker 3 (22:48):
That's but it was. It did slow down, It did.
Speaker 7 (22:50):
Slow down a load. Yeah, but now it's picking up again.
I don't know if it's going to be there to stay,
but for the time being, it's going quite well the.
Speaker 8 (22:56):
Last few weeks. Let's hope it's going to remain.
Speaker 7 (22:59):
And we do a lot of coal trades out of
India to sorry, Baltimore to India. So we've done a
couple of trades recently which we hadn't done for a while.
Speaker 3 (23:09):
So in terms of any of the flows that have shifted,
is it just in your view, kind of defensive maneuvers
and just a result of maybe short term blips and
you think things are going to go back to the
way it is, or do you see some new long
term trade flows based on the shipping demand.
Speaker 7 (23:25):
Well, China's reliance to the US grains has dropped a lot.
I mean, they learned their lesson in the previous administration,
not the immediate previous, but the previous before that. Yeah,
and they have now dependent They're more dependent now in
South American corpse, you know.
Speaker 8 (23:41):
So that's the corpse, you know. So that's the thing.
Speaker 7 (23:46):
If it ever gets back to, you know, importing more
and more grain products from the US, I hope it does,
but it doesn't really seem like that in the near future.
Speaker 4 (23:55):
Before we let you go just thirty seconds, I think
right now there's a focus on where ships are built
that has ben yes in focus really ever in my career,
specifically Chinese built ships. Are there any Chinese built ships
in your fleet in.
Speaker 7 (24:07):
Our Fluidat of the twenty nine we only have one,
which is basically a Japanese yard based in China. So
I don't know if that qualifies for Chinese altogether, but
the vast, vast majority is made in China, Yes, made
in China, but not really by a Chinese yard. So
the Chinese interesting. So I'm not concerned about us. The
only good thing I need to say is we've been
(24:29):
in discussions with the US administration about that issue, and
they're listening. They're positive, and they're listening. They want to
find a solution, So they're not like totally black or white.
I mean, they want to find a solution.
Speaker 4 (24:40):
Stematis love it when you join us yet Antanas, chairman
and CEO of the public held global shipping company Synergy.
Speaker 2 (24:48):
You are listening to the Bloomberg Business Weekdaily 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 Watch us Live on YouTube.
Speaker 4 (25:03):
When the word uncertainty is used over and over, we
lean on other factors and metrics to help define a
time period that includes something like global real estate carol,
which of course is sensitive to macro factors like geopolitics,
and yes, the interest rate environment, which we just discussed
with Mike McKee.
Speaker 3 (25:20):
Yeah, one company with a view on all of this
is JLL former Jones Lang LaSalle, the publicly held global
professional services firm specializing in real estate investment management. Travis
McCready is the head of Industries Leasing Advisory in the
Americas for JLL. It's also chair of the JLL Global
Life Sciences Advisory Board. He oversees brokerage and advisory for
(25:41):
the company's key global industry vertical. So we're talking about
life sciences, healthcare, data centers, energy, security and defense, technology,
and higher education. There's a lot going on, So let's
get to it. He joins us from Boston. You've got
to be a busy individual, or maybe you're not. This
is what I want to ask you. You're not busy?
Speaker 8 (26:00):
Of course he's busy.
Speaker 4 (26:00):
He's got screens on screens in there.
Speaker 1 (26:02):
It's very busy, screens on screens. I'm busy.
Speaker 3 (26:06):
Well, listen as we As Tim mentioned in the in
the lead up to you that when there's uncertainty and
folks are saying uncertainty, a lot heads of companies are
saying are One of our conversations on global shipping, uncertainty
came up a lot. You know, where are you the
busiest region of the world area of the United States
category of real estate. Give us a picture, and where
(26:27):
are you not busy?
Speaker 9 (26:30):
Wow, I'd say uncategorically, without doubt.
Speaker 1 (26:35):
We're busiest in data centers, which.
Speaker 9 (26:40):
Is an area that affects pretty much every aspect of
the economy, every vertical and technology vertical that we cover
in real estate. Our ability to bring online additional data
centers across the United States is a rate limiting factor
to the growth of pretty much all our verticals.
Speaker 8 (27:02):
In that regard.
Speaker 9 (27:04):
Data centers are popping up anywhere that there's a correlation
between access to power, access to the right amounts of land,
and cooling infrastructure, which would include of course water and wastewater.
So that's my area of biggest activity levels. Second being
(27:27):
advanced manufacturing, and that's manufacturing, whether it's for semiconductors or
for biologicals.
Speaker 1 (27:35):
We're seeing a nice steady clip of activity around advanced
manufacturing across the United States.
Speaker 4 (27:40):
I'm wondering how you look at the protectionist policies that
the Trump administration, I won't even say toying with the
protectionist policies that the Trump administration has established or has
actually put into action at this point, we're talking tariffs,
we're talking about other ways to keep jobs here in
the United States and keep manufacturing here in the United States.
Has that affected your business.
Speaker 1 (28:02):
Yeah, I think there's.
Speaker 8 (28:04):
Uh.
Speaker 9 (28:04):
These policies are still a lot of them are still
in theory. So it's the uncertainty around these policies and
how they'll play themselves out in practice, which is really
driving a lot of decision making or in many cases,
lack of decision making by a lot of our businesses.
From a real estate standpoint, we definitely have felt post COVID,
(28:26):
in particular, the desire for businesses to control their supply chain,
and this is and this desire is really what's driving
the advanced manufacturing sector. We've definitely felt a desire for
increased employment around advanced manufacturing, particularly as it relates to
(28:46):
semiconductors and energy and the like. So these policies are
haven't really had the type of effect that we think
that we've we've wanted them to have, partially just because
they haven't been implemented in many cases as of yet.
The one policy that's really gotten a lot of our
(29:08):
folks in the life sciences in particular spoot is the
most favored Nation's clause in this notion around MFN pricing
really shifts the algebra around pharmaceutical prices and then in terms,
shifts the discussion about profitability and plowing some of those.
Speaker 1 (29:27):
Profits back into the R and D enterprise.
Speaker 9 (29:29):
That's really having a deep structural effect on how our
pharma companies are thinking about manufacturing here in the United States.
Speaker 3 (29:38):
So play it out so meaning that they're going to
You mentioned the number two busiest area is advanced biological
So the thinking is, okay, especially pharmaceuticals doing more manufacturing
more in the United States. And what about Puerto Rico.
I thought at one point we were doing a ton
of manufacturing there is there.
Speaker 1 (29:57):
Oh, we continue to do a ton of manufacturing and
import Rico.
Speaker 9 (30:00):
In fact, next time you go to the drug store
to buy tail and all, thank the Puerto Rican manufacturing
ecosystem because that's where eighty to eighty five percent of
all of the tile known in the United States comes from.
Speaker 1 (30:14):
The advanced manufacturing. However, we're talking about proteins.
Speaker 9 (30:20):
Biologics, selling gene therapy, manufacturing. A lot of that's happening
in a smaller scale, and it happening domestically while within
the continues forty eight that's you know, the type of
manufacturing we've seen the announced post tariff conversation, we had
(30:41):
about twenty seven billion dollars worth of those announcements.
Speaker 1 (30:44):
The degree to which those announcements come to fruition, however,
is what we're waiting to see.
Speaker 9 (30:50):
There's still a lot of uncertainty around the both the
tariff conversation and MFN conversation, and that will drive the
degree to which, or the rate at which those manufacturing
facilities are actually executed.
Speaker 4 (31:04):
You know, I wanted to talk geographically a little bit
with you because you've got such a great view on
what happens around the country and around the world. For
the last actually ever since I've been doing this job,
the Sun Belt, we've been talking about it growing and growing, growing,
and I'm starting finally to see a shift when it
comes to the Sun Belt. Some weakness happening there right now.
And I know you don't specialize in residential. That's where
(31:26):
we're starting to see some weakness, but certainly commercial is
tied to residential. Tell me what you're seeing in the
sun Belt.
Speaker 9 (31:34):
Yeah, the sun belts in it both an exciting and
slightly risky part of the United States right now from
a real estate standpoint.
Speaker 1 (31:44):
On the one hand, you're absolutely right.
Speaker 9 (31:46):
We're seeing demographic shifts into the Sunbelt into the southern
United States, and with that flow comes commercial activity. On
the other hand, we're also seeing and we're also seeing
UH structural weaknesses in the in.
Speaker 1 (32:04):
The grid in particular. In particular, and.
Speaker 10 (32:07):
The energy needs that these advanced technologies, whether it's UH
semiconductors or even our healthcare clients, the energy needs that
they're that they're demanding, we're increasingly having difficulty finding those sites,
finding that power infrastructure in order to be to satisfy
(32:30):
the commercial demand.
Speaker 1 (32:32):
So you're absolutely right.
Speaker 9 (32:35):
The point of signal strength obviously that we'll see first
is around residential, but the safety, security strength and growth
of the grid will dictate whether or not we can
continue this this growth pattern going forward.
Speaker 3 (32:51):
You know, we've actually had some really deep reporting on
this here at Bloomberg. This idea of you know, folks
that play into kind of the electrification play, the power demand,
whether it's through data centers, that we just don't have
the skilled workers to do it. And it's not just
a US thing. It's actually a global thing. And I'm
just curious from your perspective, which is the real estate
(33:12):
play are you seeing You said data centers, that's your
busiest area, But are you seeing somewhat any kind of
pulling back or slowing down because there isn't either the
labor to supply it and what's needed to be done,
or there's not the power there to supply it.
Speaker 9 (33:30):
We have this this section of our of our business
we call location analytics or location advisory, which basically is
a fancy, fancy way of saying that people's decision making
is very complicated and there are a lot of variables
that go into where to site a business or where
which state to locate a business. It's not always about
(33:51):
tax incentives or other sort of cash incentives.
Speaker 1 (33:54):
It's really about access to two or three core variables.
It's all.
Speaker 9 (33:57):
They're always at the top of a One is power,
and the second is people human capital. And it's our
ability to be able to train the workforce of tomorrow
that we'll be working in these advanced facilities.
Speaker 1 (34:14):
Again, that's the.
Speaker 9 (34:15):
Second great limiting factor of our growth. And here is
where we need the technical schools, We need the community colleges,
and we need higher education to be able to support
that thirst that we have for trained human capital for
these roles.
Speaker 1 (34:32):
So we have a very.
Speaker 9 (34:34):
Yes, we're real estate and we focus on infrastructure, but
increasingly we have to focus on our ability to be
able to deliver skilled workforce to be able to work
in our facilities.
Speaker 3 (34:46):
So relevant to our times right and for all the
investors who are listening right when we see these go
go sectors, whether it's data centers AI, there's a huge
technical equipment, but human capital in for structure that's needed
to power it going forward. And it's something we need
to think about about the momentum, how strong it can
ultimately be. Travis Great checking in with you. Travis McCready,
(35:08):
who's head of Industries Leasing Advisory and chair of the
JLL Global Life Sciences Advisory Board, joining us from Boston
on this Tuesday.
Speaker 2 (35:17):
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(35:38):
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