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Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast. Well, it was the first full trading week of twenty twenty six, A lot already happening, from geopolitical shockwaves in the Americas following the US removal of Venezuela's president Nicholas Maduro one week ago, to the reveal this past week of the latest and greatest gadgets and trends at CES in Las Vegas, and then Tim, we can't forget, Like it was almost hard to keep up the news from President Trump, coming
largely in the way of social media, that he would move to ban institutional investors from buying single family homes as part of a push to address housing affordability. He also had some thoughts about the defense sector.
Yeah, we also don't forget this the final jobs report of twenty twenty five. Those December numbers coming in too. Wrapped up the week with the Supreme Court not weighing in on the legality of President Donald Trump's tariffs. The next opinion day for a potential ruling is this coming Wednesday. For all the latest out on over to the Bloomberg Terminal or Bloomberg dot com as these stories continue to unfold, as we put these weekends interviews to bed.
All right, So this hour we're going to dig into the ramifications for Venezuela and its oil reserves after the surprise US capture of Venezuela's former president now former President Nicholas Maduro. We get into President Donald Trump's emerging new World.
Order, plus connecting the dots on the bigger picture, a world in need of more energy with the CEO of Honeywell Process Technology.
All of that to come. We begin, though, with that fall out from last weekend US raid in Venezuela and the capture of President Nicholas Maduro and his wife.
Eric Shatzker is editorial director of Bloomberg New Economy. He was one of the few to interview Maduro at Mirafulla's palace. That was back in twenty twenty one. He joined us to discuss former Venezuelan President Maduro's journey from palace to a Brooklyn jail and what's next for the country.
People who've been watching Venezuela for decades, much longer than I didn't see this coming. What we knew over the past several weeks and months is that the Trump administration had been putting an increasing amount of pressure on Venezuela and that there was going to have to be some kind of a crystallizing moment, but that it was going to come in the form of US helicopters staging a raid, an attack on Caracas and seizing Madudu. I think was
beyond most people's imagination. From all I could tell, it was a possibility that Maduda himself hadn't fathomed. Well, what was it?
What you mentioned there had to be a crystallization or a crystallizing moment. What were some other scenarios or possibilities that you know three or four weeks ago looked more realistic than this.
Air strikes for example.
That would bring him from power. Well, ultimately unclear.
It wasn't clear. The Trump administration in its first guys, Trump one point zero tried to affect regime change through economic sanctions, and so the idea of regime change being back on the menu wasn't at all surprising. How they were going to affect it was unclear. It's at least seemed to me at the time like asphyxiation was economic
asphyxiation was the method that they were using. Once they moved you know, US aircraft carriers you know, and other craft into the Caribbean and started boarding oil tankers and chasing others away, it seemed it seemed like the plan was to just deprive Venezuela of any external revenue, which is, for all intents and purposes, the only revenue that matters to the Venezuelan economy, and that what would happen next, Well, there would very quickly be an economic crisis in Venezuela
and a popular uprising, and maybe that's what would foment some kind of a regime change that would have taken it the very least weeks, if not months, to unfold. And who knows why at the end of the day,
the Trump administration chose to go with the ray. They are all kinds of theories, right, about, you know, everything ranging from somewhat more obviously try and get control of Venezuela's oil reserves, to something along the lines of needing to box out the Chinese and the Russians and the Iranians who had increasingly been getting involved in Venezuelan critical mineral extraction and manufacturing. And as I say, there there
are there's a wide range of theories. I'm in no position to attach any credibility to any of them.
Well, what I want to think about is what's the future of Venezuela going forward. And I'm just thinking about you know, when you did speak to President Maduro and that's what now four and a half years ago, and he at that time was looking to rebuild the nation's oil industry. He wanted to normalize US relations. How does Venezuela get on the path to long term prosperity in your view? And what's that stick because it sounds like it's still going to be pretty.
The foremost, it needs a government. Doesn't really have a government right now. We have an interim president in the form of Delsi Rodriguez, who was Madudo's vice president. They're going to have to constitute some kind of at the very least caretaker administration. The idea it seems sort of preposterous that they would leave the same regime in place, just without its figurehead in the form of Maduro. And let's not forget that that administration is populated in no
small part by Chavista hardliners. You know, these are people whom the US would classify as communists. I'm not surprised for the time being that they've left this government in place because Venezuela's institutions, such as they are, aren't ready for a democratic administration. So for those who wonder why Gonzalez or Mario Corino Machado aren't actually you know, haven't been named president of Venezuela, that's at least one good
reason for that. But eventually, whether it's to pass a series of or enact a series of policies that are going to help to revive the Venezuelan economy, to restart the oil industry, they're going to have to have and then subsequently restructure the debt, they're going to have to have some form of legitimate government.
The National Assembly inaugurated Delci Rodriguez Az president. You actually spoke to her as well, I did, I did. What were your impressions of her.
She's a very capable individual, very articulate, seemingly whip smart, and most importantly, I think she demonstrated this. It's more important to talk about what she did than what she said. She demonstrated her pragmatism. She's the architect of the economic policies that helped Venezuela climb out of the ditch that it was in in twenty eighteen. We all remember the footage of those empty shelves in Venezuela at the time.
By the time I got Takarakas in twenty twenty one, I wouldn't call it a prosperous place, but the economy had clearly come off of its lows and was actually growing at a fairly decent clip. Inflation was coming down. These are all things that Delsi Rodriguez engineered, not Ma Duo himself.
I keep thinking about the role of China and all of this. Who's watching very closely? How should we be thinking about China?
Well, Venezuela, both for China and for Russia and potentially for Iran and maybe even India as well. Venezuela presented a great opportunity. Here is a resource rich country in the Western hemisphere whose government was open to some kind of a deal with the United States but really wasn't interested in falling back into the American orbit, and welcomed Chinese investment, Russian investment, help from both of those countries, Iran and potentially India as well. You know, if you
look at yes, the map is changing. You know, we've seen a tilt to the right in the southern Cone, and we may see elections tilt more of South America toward the right than to the left in the coming months. But that was a very useful beachhead and presented, you know, sort of in a more let's call it not quite fantastical, but imaginary way, you know, a base from which to launch operations against whether it be American or Western interests
from the Western hemisphere. And so at the very very very least, by taking al Maduro and reaching some at least interim agreement with the Venezuelan government that it be under the influence of the United States, they've boxed out the Chinese. This is right, the national security strategy in action.
It's just fascinating, Eric, Thank you so much. Important perspective in terms of what we've seen over the last few years in Venezuela. Eric Satsker, Editorial director of Bloomberg New Economy.
You're 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.
Now, all of that attention on Venezuela get us kind of thinking a lot about what really is needed to make that country economically viable long term, and also wonder if that's kind of the real goal of US action. We had a lot of questions this past week tim the.
Trump administration has promised billions of investment to rebuild the country's crumbling energy infrastructure and restart exports with China, Russia, Iran and Cuba now effectively cut off from access to Venezuelan oil. For more on what the country really needs to build back its economy, we welcomed Francisco Rodriguez, Senior Research Fellow at the Center for Economics and Policy Research at the University of Denvers Corbel School of International Studies.
Well, the question is what's the alternative, and what was the US willing or able to do. I mean, what we saw was the extraction of Nicolas Maduro, but not a regime change. The regime remains in place. What would have been necessary to change the regime that would have been a very different operation. The US would have had to carry out a land invasion of Venezuela, would have had to occupy the country. It would have needed to get involved in state building, and the US clearly decided
not to do that. So then it has to deal with the authorities that actually have control over the territory. With the US is trying to do is to say, well, what to those authorities, what you're going to do is going to be circumscribed by the pressure that we're putting on you. Will allow you to sell your oil under certain conditions, but you have to comply with what we're asking you to do. For example, you can't sell the
oil to China. You have to sell it to the US, or you have to translate it to the US in some way.
Professors, it notable to you that there aren't necessarily humanitarian elements that are tied to this.
There's humanitarian and democracy. I mean, there's one problem in Venezuela is that this country has undergone a massive economic collapse. It suffered a contraction of seventy one percent of its GDP, the largest ever peacetime economic contraction in world history. And this country has been under a blockade of oil exports by the US, a total blockade for approximately one month. And this country depends only on oil revenue, that's its
only source of revenue to fund its economy. So we could be looking at a situation in which the economy suffers another major humanitarian crisis, another major economic crisis, and we have migration out flows, we have our food shortages, we have quite possibly a famine. Then there's another issue, which is the issue of human rights and democracy. The US government has not talked about human rights, it hasn't
talked about democracy. Secretary of Rubio said, on very vague terms, well, after we stabilize the economy, where there's going to be a transition that can be done by the Venezuelan people. But this is very vague. There was an election, it was won by the opposition last year, but that doesn't seem to be part of the plans of the US government to bring this into the picture.
Yeah, I guess I just do wonder is energy A focus on energy really the path forward to creating a sustainable economy in Venezuela longer term?
Well, I think that right now you have to worry about the short term more than the long term. I mean the Venezulona economy.
So is oil the answer short term? Because we've all talked about the.
Stag it has to be.
The Venezuelan economy has more than ninety percent of its exports have been oil for the last one hundred and ten years. You're not going to transform this overnight. This country is in the midst of a massive humanitarian crisis. What you have to do is recover the economy with the anchor of that economy, which is oil. Venezuela used to produce two and a half billion barrels. I'm not talking about ages ago. You're talking about twenty fifteen, before
sanctions were in post. It was producing two and a half billion barrels. Now it's producing around nine hundred thousand barrels. That is the driver of the Venezuelan economy. You have to increase that oil production and that has to generate royalties and revenues for the Venezuela state, so that it can fund public spending, so that it can fund imports of basics. This is a country that does not produce enough food to feed itself. It buys that food with
the revenues from oil exports. So those oil exports have to be directed primarily at making sure that Venezuela's basic needs are meant.
Francisco, what actions by the US will actually help the company? Do you agree with what they've done so far is big steps forward and will put the company put the company put the country on the right path to economic viability.
Well, we're not sure what they've done right now. I mean, we know that they ated the country and took out the president, but we're not sure what it is that they're doing in terms of this oil deal. The only point is that I want to make is that this money has to come back to Venezuela. This money has to be able to fund the functioning of the Venezuela and economy. Otherwise you are going to have a massive
humanitarian crisis. And what's going to happen is that millions of more Venezuela's are going to show up in other countries and ultimately in US borders unless you stabilize the Venezuela economy.
All right, we got to leave it there. Thank you so much, really appreciate it. Francisco Rodriguez, Senior Research Fellow at the Center for Economic and Policy Research at the Universe of Denver's School of International Studies.
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 during the.
First full trading day after the US strikes in Venezuela. So this past Monday, we saw oil stock surge along with traditional havens like gold and US treasuries, and yet global markets and the US market really didn't come undone. It appears financial markets and investors quickly got used to President Trump's approach to military operations and US actions around the globe.
And so for more on the new world order and global market reaction, we spoke to Peter Cheer, head of Macro's strategy at Academy Securities. It's a firm that includes military generals on its staff to help evaluate the impact of geopolitics and military actions on the investing landscape.
It is kind of wild, Peter, considering how this year has started and the actions in Venezuela and then kind of markets to look past it. I'm just curious your view on this, and I'm curious what kind of calls you were getting from either clients at your firm.
At Academy, we work with thirty retired generals and admirals, So yeah, I think I think the market who's actually do make sense though, I think this is the start of the year stuff, so I'm not surprised that we're kind of rallying away from that. I think on Venezuela, it was a very impressive military operation, whatever else you want to think about it, it was very successful, incredibly fast, you know, this very precision. Now, I think we're not
going to see a lot on oil energy prices. I think there's a lot of building out and what I think this is going to really you know, this is a quick fix. None of this is a quick fix. And I think what this is really going to boil down to is this is our first real confrontation with China away from either's kind of sphere of influence.
Right.
If you think about all the trade negotiation was mainland China versus US. You know, there were some tariffs, but all of a sudden, we're going and saying we're going to take stuff. China's invested a lot of money there, China has a lot of loans to companies. How is that friction going to play out? China's going to use
their lawyers to try and stop things. I think this is really important too for China because if they kind of get pushed out of Venezuela very easily and they lose money, the rest of the world where they put out their Belt and Road initiative starts looking at that and it could be a big role on effects. So I think we're going to see friction. I honestly think we're going to see China first attack with lawyers, and they won't attack anything until they start seeing what we're
actually doing. So far has just spent a lot of talk and noise.
Greenland has become more of a story. Where does that strategy fit in?
That One's a hard one for us. I think when we look at the world, when we kind of view Iran. We could see maybe doing something the IRGC. I don't think we would do anything with the religious side of Iran in any way shape.
Or for what you said, do something, What do you mean, maybe.
With support, you know, to attack some of the irg's facilities or something if the IRGC gets very aggresive against the protesters. I could see something. On Cuba seems a little bit more easier to deal with. We already have the uss Ford is in the Caribbean Sea. It's actually not a very efficient place for it to be. It's too small of an area for an aircraft carrier group, and it's due for some refitting and remodeling. So I think we will try and use it as much as possible.
So that's why we weren't surprised about action in Venezuela. I think we could see activity in around Panama Canal where we try and either buy it or invest in it.
Is that for a China proxy.
I think for a China proxy, And again I think we really want to control shipping through central South America and the Panama Canal is a big part of that. And don't forget Marco Ruby is the first place he went on Greenland. I think we all struggle with why this term annex or take keeps coming up. I think that's a struggle.
So to recap Panama, Venezuela, Cuba, Iran makes sense, Greenland not so much.
I find it very difficult to like play why we would just wrap NATO. And again, I think we've been less thoughtful on NATO and where it's important is but this kind of puts a lot of friction. And even from a business standpoint, I think I can believe that in Venezuela there's a lot of rarest and critical minerals that have been underinvested in. I find it hard to believe someone hasn't been checking out Greenland and saying this
is just economically unviable. I do know, and I think this is interesting because one of our generals is actually now the Undersecretary of War, and before he became Undersecretary of War earlier was still working with us. He did talk about and point out that China has more icebreakers than we do, and so China views themselves as an arctic nation. Russia clearly views themselves as an Arctic nation.
So maybe this is coming something to do with as the polar ice caps are melting that it creates different routes, so we want some more protection there. So maybe something that makes sense. But again that all feels like it could be done within the confines of existing rules and regulations rather than having kind of this annex or take concept.
Yeah, I mean, I don't know, how are you thinking about this year when it comes to the Trump White House, and especially with midterms looming. I've heard some folks say that, Listen, there's a lot of pressure on the administration to get things done early in the year because as midterms loom, there are expectations that they're might be pushback against the GOP and the Trump administration. But I'm just curious what you're telling your clients.
So what we've really liked is what we've been calling prosec or production for security, and it's kind of along the lines of resilience, and that includes anything from chips, electricity, so Intel for example. I think there's gonna be huge pressure on companies to use US chip manufacturers, right, we have to break away from Taiwan. I think there's realization we're not producing enough electricity. We will deregulate, we'll get
electricity in all forms running. I do think President Trump will give up on his kind of hatred of solar and adapt solar. But you're gonna see solar nuclear I do.
I think it's just wind is a step too far.
I think Win's a step too far.
They really does not like that.
He really does not like I think there's a visceral hatred to it. Partly, I think it does destroy views. I think there's questions about his efficiencies, and it does kill birds and stuff, and that seems to really bother them. So I'm not going to fight the wind.
I do think on solar housecats kill a lot of birds too, truly.
That is probably true. We had one that was very good at that. Yeah, So I think those are all the things that we can invest. And we just saw point seven billion going into uranium companies. So I think you can move away from the AI story and into anything that's going to be part of this building out of infrastructure. You know, you've got Cat, You've got Deer, Navistar, all the heavy equipment makers. I think we're going to see real efforts to become slightly more independent.
Are all nations doing that?
So how I see this starting as the US really jump started this right. The US has been all over this. I think what we're starting to see now is capital is going to follow next, So investors are starting to follow this. We talk to private equity companies who are starting to scour the universe for Hey, who's got mining rights that have been unused, who's got some interesting patents?
And around these rarest and critical minerals, I think you're going to see again these huge buildouts, potentially in electricity production. So it's capital localization dead well. I think other countries are going to figure this out eventually, that they have to do it. I think at some point Europe's going to release like Shell and BP to actually do what they're phenomenally good at. And so far there's still constraints,
but I think everyone's adopting this. I think you have to look much closer when you're thinking about supply chains.
Domestic political risk of this new world order. That's something I've been thinking a lot about, especially in an election year, because we thought that that the Make America Great Again movement was really about keeping within the US's borders, not getting involved in foreign wars. The President has talked about leaving countries outside of the US alone, and that's not really what we've gotten in the last few months.
No, though, I will say I think if prior to you know, Liberation Day and stuff, I think there was a lot of hope that we'd work very closely with Canada because Canada has a lot of things that we need that would be a big part of this. We work closer with Mexico, and we kind of got away from that, So I think this starts. Maybe it's just trying to reshape how these relationships work. Ultimately, I think we're going to need things like podash, We're going to
need to work with Canada. But I do think you know, they laid it out of the National Security Strategy and it's only three nine pages of double space. It's even I could read it. So I would recommend reading it because I think it does form this way. Yeah, we've been telling corporations for years now, and I think now we're getting a lot of incoming calls.
Like we've been.
Saying, if you are manufacturing in Thailand and Vietnam, you're not really disverse because you're going through the same shipping lanes. So I think you've got to be very careful about shipping. If you're looking at building a new plant this year, I think you want to build it in North, South America, or Central America or the US precisely because that's where we have a lot more control. So I think that's where corporations follow into this. And I don't want to
say it's going to be us by ourselves. What I've been trying to say is I think for every single commodity or product, every country is going to have an X amount that they want to do themselves so they can be sufficient. Why you can do with your close neighbors, and then Z or Z you just do on the open market. And I think that's going to vary by country to country what they can do. But I think Europe's behind on this.
I think the.
Sad thing is if I look at what we need to do in the US, you have a pretty good road map. Just look at China's done for the last ten years, right, They've basically done prosec on steroids, and we're just starting to do it. But it's exciting and I think some of it will last past an election cycle. Because Biden did do the Chips Act, right, so Whiden was not immune to like understanding we.
Did a lot of President Trump in his first term is China strategy.
Right, So I think this is now truly going to replace ESG as a major policy tool, as a major way corporations think and how investors think. Right, if everything was ESG, I think where we were really is if you think about Masso's hierarchy of needs one probably you know psych one on one, it proves I took it. But we were kind of at this kind of high self actualization period, like what would we like sustainability look like. But it was all based on the premise that we
had the basics covered. We really have the basics covered if we're dependent on China for those basics. So I think this is a pullback to say, to be truly sustainable and independent and resilient, you need to do some core level of this self yourself. And that's where I think we are. It's that evolution.
What are the implications of that in terms of cost to society, in terms of does it make things more expensive if we're doing more manufacturing in the United States, Well, labor isn't cheap here, so I'm just curious what are the implications What does it mean for economic growth? Maybe in the United States.
So I think it's going to be potentially a little bit higher on some prices. So it's very good that oil and some of these energy costs are coming down that will help on this. At the flip side of that, though, is if people can go back to working for you know, I hate to say the word about say it like national champions right where you feel that your industry, your job is important to the country, you probably go home feeling slightly safer about your job. I think there's a
lot of benefits from this we've been talking about. The Spider Marks is great. He kind of coined the phrase for us by the spider marks general spider marks. He's quite awesome, but he coined the phrase. We're in a pre war environment, and we've always been in a post war environment until recently. And I think pre war sounds a little bit scary, but it's just like deterrence. If you understand that you're in a pre war and you
do the preparation properly, you deter the enemy. And I think the things that to me are really crucial about a pre war is it creates a sense of urgency which we're seeing and self sacrifice.
We're speaking with Peter Cheer, head of macro strategy at Academy Securities. He joins us here in the Bloomberg Interactive Broker's studio. Peter, you mentioned a few We went through a little bit around the globe and we talked about Iran, We talked about Venezuela, We talked about Greenland, Cuba, Panama. What about Mexico and what about Columbia. Have they been put on notice?
I think Colombia has been put on notice. I've been much more focused on Mexico. So one of the things that we believe to some degree is we've been changing the rules of engagement with Venezuela. Right, if you go back four months ago, who would have thought we would shoot a drug boat? We're now doing that. I think the world would have gone ballistic if we did that in the Gulf of Mexico or Golf of America. Now though it's now standard operating procedure. Right, we've attacked some
of the drug facilities. I suspect that somewhere in Q one, Q two, late Q one orly Q two we approach Mexico very serious in Tellson, but I'm like, we can work with you to get rid of your cartels, or we can get rid of the your cartels without you. And to me, the one thing we haven't talked to I know we've been talking about so much oil. If we can solve Venezuela's drug problem and cartel problem and Mexico, it makes both of those countries safer, more viable countries,
Fewer people need to migrate all of those distries. So I think it fits perfectly.
But then in terms of drugs, maybe I'm crazy here and I know we've only got about forty seconds left here. What about China and fentanyl? Like, have we covered that? If we're talking about narco terrorists? I think I might say, wait a minute.
I'm looking at this more from the ability to kind of make those countries safer, where you have some ability to influence it so that people don't want to leave. A lot of people you talk to people for coming from Mexico, their choice is letter sob Yeah, you either fight the cartel and die or you join.
The cart Venezuela eight million people or something.
So I think if you can do that, and on top of that, if you cut the head off the snake, maybe the drug cartels and their activities in the US do slow down.
So are you positive about the year?
Are you upbeat? I am? Actually I'm very positive. I think again, this buildout's going to be very interesting. The biggest risk to me is China threatening and doing something about rarest and critical minerals because we're not there yet where we need to be.
Ten seconds, if President Trump wasn't in the White House again for a second term, will we be having this conversation.
No. I think he actually really kind of planned ahead of this though some of it. I think we would have finally seen because we've been talking about rarest critical minerals for years and years. We're finally realizing the Chips Act realize.
Some of this. This is what progression.
How we're doing it is just stronger and more aggressive.
Such a great conversation. Peter Cheer over at Macro Strategy and Academy Securities.
You're 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.
Energy markets oil specifically in focus this past week because of US actions on Venezuela culminating, as you know, in the removal of now former president Nicholas Maduro. That all just happening one week ago. Now, the US did say throughout the week it would take control of oil from that country indefinitely and also split up the proceeds between the two countries.
It also feels like we're talking a lot about energy demand again, both supply and demand actually generally, and against the backdrop of AI and the build of global data centers. So oil is one part of the conversation, Carol, certainly, and it's obviously an increasingly important part of the conversation given what happened in Venezuela last weekend and what's going to happen moving forward. But the question about demand moving forward, not just for oil but for energy also on our minds.
It's such a big part of what we've been talking about. And on that last month, Trump Media and Technology Group, the company behind True Social, announced a merger with Tae Technology. It's a fusion developer with plans to build the world's first utility scale fusion power plant. This is all largely related to the power grab when it comes to the buildout of AI and those necessary data centers.
Someone with thoughts on the energy markets. Ken West. He's president and CEO of Honeywell Process Technology. It's formally known as Honeywell Energy and Sustainability Solutions. We should note that conversation we had with Ken that was last month before the US takeover of Venezuelan Oil.
So at Honeywell, we're continuing to focus on the evolution of energy and how we can provide end in solutions
for our customers. In Energy and Sustainability Solutions, we bring more than one hundred years of technology across the decades of development in determining how we can help solve those world's problems, from originally processing some of the first gasoline, to developing unleaded gasoling and now today developing some of the the new renewable fuels that are providing sustainable and affordable options for energy expansion for tomorrow.
You know, we look at and we talk about this each and every day. But the challenges that we're seeing, at least with energy production and demand here in the United States and the grid certainly not being able to keep up. Where is the bottleneck? From where you sit, You know, to take a.
Look and first You're absolutely right. The need on energy is greater today than it has ever been, and as we look out into the long term, we see the need just continuing to grow. You know, many forecasts would put it at anywhere from twenty to forty percent growth over the next twenty years or so out to twenty fifty. When we take a look at that bottleneck, it really is and being able to develop the infrastructure behind the
scenes that can produce that power. And so one of the first areas that we address that challenge is really inefficiencies, and we really come together at the intersection of the technology needed to produce power and then digital and optimization capabilities with Honeywell Forge that we use to provide sustainable and reliable solutions that allow those refineries to produce even
more power than they did before. So if you take case in point a refinery that we are able to help become five percent more efficient, do that across twenty refineries. We've created a refinery without having to put any brick and mortar into the ground.
Yeah, is that?
I feel like that's you know, ken the next focal point, right, we went, especially when it comes to the AI build out, we went to you know, chips, the chip play and the data center play, and then it was all of a sudden like the power demands and building that out. But now I think, whether it's chips, whether it's power centers, we're thinking about how to make all of this much more productive because that will help everybody meet the energy demand.
It truly is.
It both meets the near term and long term energy demand and also does it in a way that's economically viable, which is just as important as coming up with a solution. So one of the airways that we're able to do that is by able to connecting to our plants. And when we create a connected plant, we're bringing in billions of data points every day, and we're connected today to
more than one thousand process units around the world. And we take those billions of data points and we can provide predictive potential solutions for those customers to improve reliability for tomorrow and to augment their workforce. As I travel around the world, one of the things that I clearly hear from all of our customers is a challenge in getting experienced workforce there to operate these facilities.
We're able to.
Take our connected plant solutions that run on Honeywell Forge and augment that existing workforce. So we can take a control room operator that may have a few years of experience that provide them the capabilities of a control room operator that may have had forty years of experience. That in itself allows our customers to become more efficient and continues to improve both reliability and safety of the expansion of energy.
What's the payout that your sales folks have calculated here investing in this solution upfront and then the efficiencies that it creates, how long does it take to pay for itself?
Many of these solutions are very fast paybacks. In fact, we have had opportunities where we can save millions of dollars in operating cost and energy costs that are going into a refinery for a very small fee that goes into our connected and engineering services. I've seen some of these be anywhere from less than a year to just a couple of years of payback. It's some of the projects that we've provided for our customers. I'll give you a perfect example. One of the things that we've been
able to do. We provide catalysts to refineries and petrochemical plants. These are key in making the chemical reaction that actually produces the induced product. When you take a look at these catalysts, they degrade over time and need to be replaced. In the past, you used to have to take a sample of the catalyst from the refinery send it to our labs in Chicago. We would do microscopy on those samples to determine the color, the size, how much gradation
has happened. Today, we can do this with a digital image right on the plant. We can get an image every day and let that refinery know exactly the right day to change that catalyst over so that they can maintain reliable operations.
All right, That totally makes sense. The more deity of coming at you in real time. We talked about that with economic data. Hey, one of the things I wanted to ask you, Ken, Tim and I spoke with Neil Chatterjee yesterday, chief of Governmental Affairs at Palmetto, former commission and chairman Commissioner, i should say, and chairman of the AFIRK Federal Energy Regulatory Commission. He was during President Trump's term and then it carried over a little bit into
President Biden's term. We talked though about the energy mix that's going to be needed for AI data centers, for increased manufacturing coming back to the US. But it's also
this is a global story. What's the energy mix that you guys are planning for, And I'm curious when it comes to carbon based fuels, when it comes to win, when it comes to solar, maybe coal, fusion, fission, nuclear, like, help me understand what you see as the dominant energy mix going forward, because you guys have to provide the tools to meet all of those different industries potentially.
No, you're absolutely right. One thing is clear and that the world needs more at energy and aggregate and what we believe is that it's going to take a number of different potential options to be able to meet that overall demand. So we're really focused in three areas. First, we're focused on the optimization of the existing infrastructure that's there so that we can make the existing infrastructure more efficient.
Second is that we see a number of transition fuels that are helping bridge that gap that we need in both the near term and long term, and LNG becomes one of those liquefied natural gas and in fact, we've put a significant investment with two recent acquisitions, one for the liquefaction process unit that we purchased from Air Products, and the other in a company called Sundine that does pumps and compressors that are targeted at expansions in the
LNG space that are helping to drive expansions in liquefied natural gas. And then the third is to broaden the entire realm of feedstocks that are available. And this not only allows responsible and sustainable expansion, but it also allows countries that may not have access to fossil fuels to also have access to the production of power and energy. This can include anything from biomass and other renewable resources.
So we see it really as being across all three and our technologies and solutions are focused at driving the entire aggregate up.
Hey, Ken, just very briefly, we only have twenty seconds left with you. But geographically, the areas of opportunity for twenty twenty six and twenty twenty seven, what are they.
Yeah, Well, we definitely see significant new opportunities right here in the United States and particularly in areas like the Golfer. We're seeing expansions of LNG projects. We see need for energy security, and a number of new geographies around the world where countries want to have their own access to energy. This is across areas like Sub Saharan Africa and the Middle East, and we continue to see growth in in Asia.
So I would say across to our business, we really are well represented as about a third in the America, is a third in Europe, Middle Eastern Africa, and a third in Asia.
Fascinating, really cool stuff. I hope I hope you'll come back because I'd love we both would love to. This is something we talk about a lot in terms of kind of our energy transition, our energy demands and needs. Ken, thank you so much. Have a great holiday season. Ken West, President and CEO of Honeywell Energy and Sustainability Solutions. As we said this is this unit's going to be renamed as Process Automation and Technology, so we'll be talking about that in.
The new year.
This is the Bloomberg Business Week Daily 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.
So some news back in December, the ev tallmaker Archer Aviation, announced it partnered with cities across the US to submit multiple applications to launch initial air taxi operations. The FA set to review applications submitted during this initial phase of what's called the EIPP, the ev Tall Integration Pilot Program. I'm mentioning this because it's important for a conversation with Adam Goldstein.
I appreciate that, right, there's a process to all.
Of this, right, Yeah, Adams the founder and CEO of Archer Aviation. It's the five point six billion dollar market cap ev tall company. He joins us from San Jose, California. You were last on with us in early November. A lot has happened since then, and I want to start with this EPP. You've mentioned in the past plans in California, Texas, Florida, Georgia, and New York, but we don't know much beyond exclusivity
in Huntington Beach, so one part of California. Have any more partnerships emerged at this point?
Well?
The EPP program was put in place from an executive order from President Trump, which really was to ensure that America takes a leading position in this new advanced year ability space, and so as an industry, we had to submit the different cities that we wanted to launch into, and those cities are being reviewed and there's discussions being had now on where the ultimate launch will take place.
It's expected that five cities will ultimately get named and then ultimately we'll start flying later this year in the summer time period. So it's not that they're new partnerships, it's we all submitted as an industry for these individual cities and we expect that to launch coming up here soon.
Okay, can you talk about a little more about like partnerships that you're working on or the structure of them, what they look like, what the opportunities are.
Sure you should think about this as the industries almost like a way mow moment, right. So we have to put these aircrafts in the air, get the local communities comfortable with them, prove that they're safe, prove that they're quiet, and really show that the technologies here and it's ready. That's really what this is all about. It's giving everybody comfort so we can have the community acceptance so we
can really launch this thing forward. So of course we're looking at some of the biggest cities that makes sense, the New York cities, the Los Angeles, those type of cities, but also cities that are really leaned in that might have some you know, practical type of you know, a situation coming up. So, for example, the Los Angeles twenty twenty eight Olympics, where Archer was named the exclusive air
taxi partner was really in our sites. And so we did that by partnering with Huntington as a way to really put us close to the area, allow us start flying it, to know that environment, that airspace really really well, start to set up all the infrastructure, and then ultimately scale as we get into and closer to the Olympics.
All right, so let's talk a little bit about finances and money, because you know, we certainly like to do that kind of stuff. Talk to us. The operations are generating, from what we understand, little or no revenue. What would that mean from a cash burn point of view, because that's certainly important in terms of viability.
Yeah, So if you look at the whole industry, the industry, according to pretty much any analysts, expected to be very very big. I think Morgan Stanley's probably the most bullish they had a multi trillion dollar evaluation on the industry. Now, it's different than autos in the sense that there are only a few players. Like in aviation you typically have
like a Boeing in an airbus type of situation. So there's a couple of leading companies in the ebtall industry, and it's likely that there's only a few companies that ultimately end up getting to market and ultimately scale to some very very large numbers, and my guess would be larger than any one individual automaker has been excluding Tesla, which is more of a a pure AI company in my view. So you have this kind of scenario here where it's all about surviving to get through certification and
then scaling into a business that's economically attractive. So that's really the goal in the game that we're playing. So we have an aircraft we've built that's become very mature, we're taking it through the certification process then ultimately going to launch it. So how are we going to launch that? We start very slowly and methodically. That's what the EPP is about. It's a slow, methodical launch, very similar to what Weaimo did was it's a slow launch into these
cities gaining the acceptance. So it's really about proving those points today rather than generating revenue today. The revenue will come. There has been an overwhelming amount of inbound interest from countries all over the world that want these aircrafts there, and there's a very few OEMs that actually can deliver against that. So the focus really is about the certification side.
Now, I get it. I get it, and I'm looking though, and I get it. Why you guys have a free cash flow that's negative by a lot, But I'm just I guess I'm just trying to understand from a perspective though, as everybody's jockeying for position, what is your cash burn? And just is it manageable?
Sure, so Archer is in a fortunate position where you know, we finished the year with nearly two billion dollars of cash on hand, so I think the most in the industry, you know, by a long shot. We also had lower burn than our competitors. But as we've been ramping up into you know, closer to the certification production phase, you know that burn does go up as we're buildings and so we are at a very comfortable position today, but it's not something that we're sitting back and getting you know,
you lazy about or getting too excited about. We are still driving every single day to make sure we can hit our timelines and actually get these aircrafts to market.
So if I look at you know, the EPP starting in twenty twenty six, and then I look at the Olympics in twenty twenty eight, we'll get certified hopefully sometime in between that time period, and we have plenty of cash to last us, you know, through that time period into the commercialization phase, and then ultimately as the aircrafts are getting sold and deployed, we can start kind of reducing our cash burn and becoming I think, you know, a long term vible business.
What happens if you're not certified by the Olympics.
Well, we also do have an international strategy as well, and so we launched last year in Abu Dhabi. We have a great relationship with the with the UAE, two of the suffern Wealth funds, our investors in our chure, and so we have a secondary path that we're going through in certifying those aircrafts around and so it gives us a sort of an alternate as well. But then there's the other side of the business, which is the defense business. And so we announced a partnership with Androl.
We've been working on new vertical lift aircraft with them, signed for defense out.
This is the OMEN Autonomous air Vehicle, right.
The OMEN is A is not the big aircraft that I was talking about. The OMEN is a smaller drone project that Androl has designed that we are providing the power for. We are building a new full scale vertical lift hybrid aircraft that's designed for defense applications that we do expect a program to get announced into the many, many billions of dollars, tens of billions of dollars type size. We're hopeful that can happen soon. But of course that's you know, you know, also not within our control.
Hey, Adam, you've you've you made a reference earlier in our conversation to sort of the Boeing and Airbus, do you opoly? And the way those companies of course work is they sell or or you know, they sell aircraft to the airlines. Uh, and then those airlines then operate the aircraft. Are you going to be is archer going to be operating the aircraft in addition to manufacturing the aircraft, or when you say you're going to sell the aircraft, who do you sell that too?
Yeah, we will focus primarily on the sales side of things for the i'll call it from you know, the early or maybe even really for the first decade, the early years of this industry. And so I think you have to earn the right to operate, meaning that is
going to be a very expensive journey to operate. And so by selling the aircraft, it enables us to put you know, production through the factory, get the pricing down to something that's very affordable for us, and ultimately, over the long term, when autonomy comes, you know, we can really then think about, you know, considering, you know, scaling our own internal airline. We will of course do things very small on the airline's side of things to begin with,
learn the overtime and grow that. So I really think it's it's all about sales now. The question that you asked is who do we sell that to? So there's a couple of different categories. But you can think about where vertical lift aircraft exists today, so helicopters, where they're used, hospitals, tourism, the IP is one category, and then The new category that we're going to add is really the sort of air helicopter airport transfer. So we've talked a lot about that.
So think like a Manhattan to Newark, a San Jose to San Francisco.
Sign me up? Maybe maybe really yeah, yeah, if this thing is approved.
There's really like, if you think about it from a safety perspective, this is a significantly safer helicopter. That's the easiest way for you to think about that. And that's not an atom statement or even an archer statement.
That's an FAA statement.
Right. We're certifying them at very high levels of safety. So you know, from a perception, a consumer perception perspective, you know, if you were willing to take a helicopter, this is just a safer version of that. In fact, you know, be certifying that levels similar to the big commercial airliners.
All right, So I have to first get ready to be willing to take a helicopter just before we let you go the cost that you would get this too once it is certified per unit? What are you thinking?
So our goal is to get the cost of the aircraft down to two and a half million we sell them. That's the target price, and when you do the math and translate that through to the end user cost where the operator can make money. You get down to prices that are similar to the high end of ride share. So think like uber Black. So that's really what we're targeting, and that can be achieved through volume, of course, and so that's not going to happen year one. That's going
to take several years to get there. And so we think once you sort of get across the five hundred, six hundred, seven hundred aircraft units, you can get these aircrafts to something that becomes very affordable. It even looks cheaper than ride share, and ultimately can become a mass scale product.
So you're talking maybe like a ride from Midtown to LaGuardia that would cost maybe under one hundred dollars.
Similar to like a ride share type of price. So if you think like Manhattan to JFK Uber Black, that probably costs you one hundred and fifty two hundred dollars, so somewhere around those type of prices.
All right, looking forward to it. Good stuff, Adam, stay in touch. We love getting the updates from you. Adam Goldstein, founder and CEO of Archer Aviation, joining us.
You're 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.
All right, Plenty of luxury and innovation on the road in twenty twenty five, but only one. Only one gets the crown and can stand out as the absolute favorite for our Bloomberg News auto columnist Hannah Elliott.
Her top pic a two hundred thousand dollars Mercedes Benz Hybrid. It's a car with an eight hundred and five horsepower hybrid V eight engine, agile all wheel drive, and useful back seats. Hannah joined us from the perfect place to talk about cars, a garage in downtown LA.
Yes, yes, this is.
This is a garage in downtown LA and Rainy LA. And it's kind of the perfect spot to talk about cars. I have to say, I think it's perfect.
So talk to us.
First of all, talk to us about the year that was. I mean, you cover really that high end, that luxury space. What kind of year was it?
It was for luxury cars? It was a great year.
That's that's kind of the theme from twenty to twenty five the fact that we have seen luxury sales become a bigger portion of overall car sales for the year, and that means cars above fifty thousand dollars. You know, earlier this fall, the average new price of a car beat fifty thousand dollars for the first time ever, and luxury cars and electric vehicles did have something to do with that. I have to say my favorite car of the year though, was a hybrid, which is also a
big theme. If we want to get into it, we can get into it. We amg AMG sixty three se Performance.
Awkward name, but it's a great car.
It's a hybrid, all wheel drive V eight over eight hundred horse power.
I really loved it.
But it also touches on the theme of the year, which is hybrids are doing really well.
Surprisingly.
I got to ask you, though, did you have range anxiety at all?
No, not at all. That's one of the best things about the hybrid.
You know, evs have, as everybody knows, you know, have slowed a little bit. We've lost incentive, et cetera, et cetera, and hybrids in particular have really filled that space and that's just the thing. You don't have range anxiety. You get all of the performance, you get better fuel efficiency, but you still get to use the car like you do quote unquote a normal car. And I think that still does matter for a lot of consumers.
Not all hybrids are created equal. What's the experience driving this hybrid? I think people have the idea of a hybrid. You know, it's like at low speeds it uses the electric motor, or maybe it turns off when you get to a stoplight, that sort of thing. What's the experience driving this this hybrid?
It is phenomenal. It's so it's such a fast car. It's such a powerful car.
This car is faster than the Ferrari Amalfi that I drove earlier in the year. And it's this isn't anything to say against the Ferrari at all that the Ferrari is a great car too, But this Mercedes is less expensive, more powerful, faster, and it's a hybrid with better gas mileage.
It's a two hundred thousand dollars car.
That's a lot of money, but when you're talking about this level of performance, it's a good value. You get a lot of bank for your Buck And to answer your question, Tim, it drives incredibly, It's so fun.
How does the hybrid work though? Does it? Does it work as a supplement to does the gas engine supplement?
Like?
How does it work exactly?
Its switch it You can switch off between them. You can choose which mode you want to drive in.
If you want to drive in electric only mode, you can do that. You can share electric and gas, or you can go just for gas too. If you're if the battery is done for that drive and you don't want to do it anymore, you can pick which is also great. There are lots of options. You can save the hybrid if you want and use it. You know, if you want to, like when you're leaving early in the morning and you don't want to wake your neighbors, you can stealthily leave your driveway.
Quietly sneaking around.
Yeah, I mean, yeah, we're not.
Gonna say that, but sure it gives you options. And that's what I really love about this car.
You know, you said it was a great year for the luxury market, and I always do wonder, Hannah, you know, do high end luxury car buyers do they want to have in their collection? If you will an EV or a hybrid that is, you know, that kind of matches our meets with the rest of their collection, if you will.
That's a great question, and I think the jury is still out on that. We are seeing that for high end dvs, the really expensive ones, people are not buying them, and I think that's because of a combination of factors. But what we're really seeing is the hybrids are attainable, accessible, they're desirable. The high end EV's people aren't wanting as much. I just think they don't have to buy People don't have to buy them, so we're not you know, that's
kind of where what it comes down to. There's so many options, and it's nice to feel a little bit virtuous about driving an electric vehicle, but let's not forget they're a little bit politically polarizing now there are lots of other factors involved, So the jury is still out, and it'll be very interested interesting to see what happens in twenty twenty six, because there's a lot of change happening and eve's at the end of the day haven't taken off as quickly as we thought they might.
Yeah, interesting to see. Even in my own family, it's not an ev but it was a hybrid that somebody bought, you know, my sister and her husband. Hey, I want to ask you about kind of the ones to watch in twenty twenty six. You have another great story on the Bloomberg Hanna. You talk about some of the brands such as Tesla, Lucid and Porsche struggling in twenty twenty five for some different reasons. We talked about Tesla big
time with Ross Gerber earlier. Take us through what you're kind of watching for twenty twenty six.
Okay, I'm watching two brands that I'm actually very excited about, Audi and Cadillac, and I admit a big reason is because both of them are joining Formula one, which means that they are there's going to be so much hype and excitement and just thrill behind both Audi and Cadillac. It also means they're they are going to be pushing so hard to be sexy, glamorous, relevant. They've both got new product coming out that will sort of coincide with this big push into motorsport for each of them.
Each of them have motorsport.
Backgrounds, but F one is a completely different level of course, so I'm really looking forward to it, and Audi in particular has said, and this touches on another theme for the year, that they're going to go back to some simplicity inside their cars, and that might also mean some analog touches.
It's not just about having a bunch of sk in the car.
Thank god.
Yeah, that's gonna be We're going to see more of that. Mercedes has done that as well, and so has Ferrari. The automakers are listening to consumers who are saying, we don't want tech just for tech's sake, We would like some analog touches that make the car still feel engaging for a human. Audi is taking that to heart. They've said they're going to be doing that with some of
their new product. So I'm watching Audi and of course Cadillact just because we've got an American F one racing team now, so not that Hawes doesn't count, but we've got another one. So those are the two that I'm really excited about.
Does it matter still for selling cars that these are F one teams?
I say yes.
Why there are some people who because all news and marketing and a glamour can only reflect well on the brand, and I think a rising tide lifts all ships. If your brand is doing well on the track and is involved with all of these celebrities and really cool people who are at F one races. We've got three F one races in the US now. That can't help but
elevate the brand just in general across pop culture. When you've got jay Z and Beyonce at the Las Vegas Grand Prix, like F one is transcending pop culture and just culture in general, and it can't do anything but help boost brand awareness, which I think does in turn lead at least to people coming in to the dealer and looking at cars, and that's ultimately what you want.
That's Hanna Elliott, Bloomberg News auto columnist.
All right, so it makes us wonder for how many years, right over the last few years we've been talking about everybody all in on EV and.
We know, well, it's change a little bit.
Right, It's changed a lot. Having said that, BMW is going to unveil three new electric vehicles in India as the German carmaker looks to grow it's already dominant share of the luxury segment in the world's third largest auto market. So you know, when we think about the car market.
It's global. We think about what's going on in the US, but as you and I know, when we've had conversations with global leaders, what's going on in Europe and in the emerging world, especially when it comes to EV, it's kind of a different story.
Yeah, it is. This is all part of a push to have EV's account for a quarter of BMW sales in the South Asian nation. That's this year, up from twenty one percent last year. This according to Hardeep Singh Brar, President and CEO of BMW's India business, BMW sold about eighteen thousand units in twenty twenty five. It's already close to that goal. EV's made up about twenty three percent of the sales for the three months that ended December thirty first.
And I think what's interesting is BMW has really withstood the high profile entry of Tesla into the Indian market a few months back. You know, they've talked about the company that is BMW, about their rising EV volumes and faster overall growth in the December quarter. So the EV market in India some perspectives, all but growing rapidly and it is bringing in and attracting big time those global players such as Tesla, Wid and VinFast, who are seeing
sluggish demand elsewhere. So it kind of goes against growth in global EV sales, which is expected to slow this year as China winds down some subsidies, Europe waivers on its phase out of combustion engines, and US producers and policymakers make a U turn from the EV segment.
But these are expensive cars, especially in a country like India, which has an emerging middle class, but certainly not on par with what you see in other nations. Listen to this. For example, Yeah, the average selling price of BMW's evs in India is close to six million rupees, so that's about sixty six six hundred dollars, Oh my god, similar to the starting price for Tesla's model why standard range. Both companies face the hefty one hundred percent tariff on
vehicles they import to the country. This is for a small number of very wealthy people in the country.
Listen, that's a high price in the US market, So you think about that. Yeah, this is what's going to you know, everybody keeps talking about a cheaper EV model. It sounds like China's doing it, So it does sound like global automakers in general need to get a little bit more aggressive when it comes to that. You can read more just check out all of these stories top Auto on the Bloomberg Still to come on Bloomberg business Week. Gold cheaper than.
Platinum, the rare pricing value that has watch collectors and investors talking. This is Bloomberg.
This is the Bloomberg Business Week Daily 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 Play.
Bloomberg eleven thirty twenty twenty five was an excellent year for watches, with major debuts and innovations. Keep in mind a story out on the Bloomberg Too that prices in the secondary market for luxury time pieces rose to the highest in more than two years, boosted primarily by demand for dress watches favored by celebrities like Taylor Swift.
Brands at every price point began to embrace bold color and shapes, a trend of stone dials and design forward watches inspired by the nineteen sixties, seventies, and eighties, so writes Bloomberg Pursuits Editor at Large Chris Rousing, watchlover, time piece, lover, time, peace, lover.
Sorry.
Chris joins us here to talk about the best watches of twenty twenty five, along with Felix Salmon, who's Bloomberg News senior writer for Ideas and Culture. Welcome.
I have a watch.
Okay, Felix should tell you briefly about the name of his watch.
Oh yeah, my watch. My watch has called the Felix Salmon. How did that happen, Chris? How did that happen?
Well, it's a salmon colored dial.
And it's so literally shopping right into it.
Watch is the Felix.
Yeah, it's this.
Micro brand in Austria called Hubbring Squared and they that entry level watch is called the Felix and it comes in black, white and salmon. So this is the Felix Salmon.
Would you have bought it if it weren't the Felix Salmon? No?
Did you buy Salmon?
Because but I do like the watch.
And it has a colored, colorful dial, which is one of the biggest trends from this past year, which was very fun for me because you know, we talk a lot about watches that are very complicated and you look at it and it doesn't look so exciting, but they're like, no, inside it's doing all of these things, and I like that. But it's sometimes it's just great to wear a watch where you walk by in someone who doesn't know anything about watches, just like, WHOA, that's cool.
What is that?
Hence the Avocado watch.
Hens the Avocado watch, which I'm not wearing because I broke it yesterday.
Is there any sort of warranty?
There is a warranty, which is so it's fine. I was not upset, but I did it bounced off my hand. Was I was trying to put on the strap and a crystal breck, so I couldn't wear it unfortunately, but I will wear it for you guys. I was hoping the studio Underdog. Avocado is one of this really cool British brand's fruit watches. So they have pineapple and they have watermelon, and when they can't they do these drops and you have to wait and like pounce just to
buy it. Because they only make like a couple hundred of them.
The supreme of watches, it's.
Not they don't do a ton of partnerships. This is what I think of like supreme as being what people really want.
But yeah, they are.
There's like a lot of brand if some brands, indie brands do these big drops, And Studio Underdog did one at this watch fair in New York and when I went, there were like lines around. They had these red carpet lines around the fair and you got a ticket and people who didn't get the tickets were so mad. Anyways, Studio Underdog very cool.
So can I actually get something like this or one of these or a variation of this. Yeah, they're actually going and waiting in Lino's store.
They do drops every like six months or so, and they have a permanent collection of cool, colorful watches and it's not impossible to get them when they do the drop.
The reason I'm asking specifically about this one is because I would venture to say, this is probably the one that's most within my price range. Yeah, they're usually like sub seven hundred dog. Yeah, I love these.
Okay, where else do we go?
Well?
So, a huge trend from last year and a bit the year before and going into this coming year are precious stones or semi precious stone dials, which means styles that are turquoise or malachite or Tiger's eye or something even more strange or random that you've never heard of. And sometimes those can be very very expensive because the big brands do them, but there's also cheap versions. So I picked out this Baltic pink prismic watch, which is very cool. It's pink albite, but pink dial watches are
very cool. Right now, Rolex makes one that everybody wants, but you can get this one for about sixteen hundred dollars, which is way less expensive than the Rolex.
If I could get any watch on this list, it would probably be the Warhol ask watch that's on there. That's pretty cool, that is very cool, very interesting about you.
So Andy Warhol was a watch person and he had about seven pha watches and he liked this style, which is like this big, chunky, semi ovoid style. It used to be called the black Tie. Now it's called the Andy Warhol And they and PJA, the brand, has a partnership with andwarf Hall Foundation, and so they make the watches together. And these are more expensive. They're like seventy eight grand and they're limited, but they're very cool.
Interesting watch.
But I think my daughter did some more work like that.
Oh oh, I my child could do that. Yeah, you know you're not really okay, Murphy brown.
Out out out.
Where shall we go next?
Well, you know, I have to say there was one watch this year that we wrote about in BusinessWeek that I really like, which is a new version of the Chanel J twelve watch, which is an all ceramic watch. Sanelle was really out in front on making these all ceramic watches. People don't always regard Chanel as being like a serious watchmaker because it's a fashion brand, but the
movements inside are Kanisi. It's solid watchmaking. And this year they've only made the watch in black or white, like all white including the bracelet, or all black, and this year they made it in a beautiful dark blue, and I got very excited about it, and Felix came over to me at my desk and said, I'm sorry, I just want to be clear on this. What's exciting about the this watch is that it's blue. And I was like, yeah, God, Felix, du don't you get it?
Yeah?
I remember when it came out in white, and then everyone got very excited that it came out in black, and now I guess we have to get excited to get into this.
So many years later, it's like twenty years before they had another color. It's just a beautiful color. It wears really well. And now you know some of the watch people who throw a poop poo to that model over the years because it was a fashion watcher coming around to respecting it because it's blue, because there's always been a good watch, but it helps that it's blue.
Perhaps that's a perfect segue to talk about colors of watches versus metals of watches, and about one of Felix's recent stories that I would argue is finally we're valuing watches the correct way. Just the metal that's on your wrist, nothing else.
Wait, it's super interesting that there's a huge number of gold watches out there from like the tier of grands, of brands that don't have a lot of resaler value, which are genuinely trading for their meltdown fit value because gold has become so expensive. It's well over four thousand dollars announce. Now, if you have a watch with a gold bracelet that is likely to have five, six seven
ounces of gold in it, you do the math. It's you know, that's way more than the watch would be worth just as a watch, And so yeah, I think a lot of these watches are actually being melted down and turned into gold.
I love that you kind of went through though, because I think as a world we think about platinum and being that as the top, and yet you kind.
Of because it was. It was for a good part, it was for a good right.
But now as gold on a per around basis is worth like roughly twice as much as platinum, and gold has been worth more than platinum for well over a decade. So the idea that you get like a gold card and then you want an upgrade, you get a platinum card. That still works in your mind that platinum is like a higher level, but in terms of actual value, it hasn't been true for a long time.
And so go ahead.
Chris so Felix points out that there's this like sort of ephemeral ideas like yes, like the goal now I'm platinum on delta. But also a platinum is heavier, so it feels it has a sense of feeling more weighty, it's harder to work with and that's a lot of you know, a lot of watch people talk about like, oh, it's.
So hard to work with, but I'm.
Just gonna come out and say that platinum like, no human being can tell the difference between the weight of gold and weight of platinum. They're right next to each other on a periodic table. Platinum is a lot heavier than white gold because white gold has a bunch of extra I believe the technical term is umskia in it that isn't gold. But yeah, the piece that I wrote was really about let's compare a white gold watch to a platinum watch, mainly because they just look the same.
And I remember before I even wrote this piece, I went up to Gus, I'm right about this, right, they look the same, And yeah, they're exactly the same.
Yeah, I mean, you have a picture of the two versions of Rolex's day date watch in this piece. To me, they look completely indistinguishable. Talk about the difference in prices at least on the primary market, and then we can get into the secondary market.
Secondary market, weirdly is kind of also the same. They don't really trade any different on the secondary market. Platinum is sixty eight thousand, the gold is fifty one.
Yeah, exactly. Yeah, So okay, so in terms of the value of the metals, though, what's the difference there.
Platinum has just increased quite a lot over the past few weeks and so, but roughly speaking, there's twice as much metal value in the gold watched and then in the cheaper watch than there isn't the more expensive one.
Is it just sacrilegious to talk about watches this way?
Chris No, This is so interesting, And when Felix brought this up to me, I was like, you know, I have a lot of these like ingrained under like sort of prejudices about why things are priced away their price, and it was so interesting to go into it and really look at it and in terms of like value for what you're getting, and I think a lot of people just don't think about it that way, and it's I think it's actually valuable and instructive to think of
it that way. And honestly, there's a lot of things in the world watch business that people just sort of do and pricing because it's pricing is based on perception obviously, and maybe it's time to look at that.
So the way I think about these watches in particular is that you have the metal and then you have something that I call rolexness. You know that you're buying the brand, you're buying the day they you're buying the history or whatever, the marketing. The value of the metal
plus the rolexness is the value of the watch. That doesn't work because the amount you're paying for the rolexness is twice as much in the platinum watched than it is in the gold watch, and the rolexness, surely, Chris is the same in both cases.
Yes, And the rolexness really is how it makes you feel to wear it. This watch is unusual because it's it's identical, but in other models of the brand there's certain tells where you can tell it's platinum from looking from afar. So they have like an ice blue dial that only exists on platinum watches, which means if you see that and you're a rolex person, you know, oh, that person paid a lot more for that watch than someone else who's wearing the watch.
We should mention that the day they has its own like if you know, you know thing, which is that not only does white gold look exactly the same as platinum, but both of them look exactly the same as steel. Rolex just doesn't make a steal day date. If it did, it would be a lot cheaper. But that's one of those things that if you see the day of the week at the top of the rolex, then you know it's precious metal.
You make the point felix and the piece that the color gold to some people, it's not as attractive necessarily as the silverish color of platinum or white gold. And there's this idea that it's polarizing to some people.
There are definitely people who just like I don't like wearing gold. But let's put this in context. Gold jewelry, like yellow gold jewelry, is orders of magnitude more popular than platinum or white gold. It is the baseline from which everything else is just an afterthought.
It's just fascinating though, like I think about I know we have to wrap up, but like I go back to like the fifties when my parents got married, like she had a platinum like platinum rings, Like there were certain eras where like you wanted things to be in platin.
Well, when Cardier I started using platinum, like the early teens, like it was it became everything everything was was based on platinum. Yeah, and uh, and now I will say gold watches all gold watches are kind of coming are becoming the thing that people sort of want, even though it's pretty gaudy.
You know what, I really want to know the era we live in the world.
We just had a whole segment on what is it getting good?
Yes? Are you going to buy a new watch this year?
I mean, don't tell my husband.
That's a that's a yes, baby.
I think he'll probably find out that you buying a new watch this year.
I was telling Chris there was well, there's I was gonna I'm thinking about buying a watch as a present for a friend of mine. But again, this seems to be one of these things that exists only in techto wins the world on TikTok And then how do I find this? We can't get it. We'll look it, Chris christ people, I have people.
A big thank you to Felix Samon and Chris Rouser. Felix is Bloomberg New Senior writer for Ideas and Culture, Chris Rouser Bloomberg Pursuits Editor at Large.
And that wraps up our weekend edition oft Bloomberg Business Week from Bloomberg Radio. Thank you so much for joining us.
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