This is Bloomberg Business Week. I'm Karl Masser and I'm Bloomberg Quick Takes Tim Stanovk. We're here every day bringing you the latest news from the world to business and finance, plus technology, politics, economics, all purtnising the power of Business Week reporters and editors, not to mention our journalists and analysts in more than one twenty countries. You can download
Bloomberg Business Weekend iTunes, SoundCloud, or Bloomberg dot com. You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio or watch us on YouTube search Bloomberg clovel News. We are keeping a watch on shares of Boeing because we have seen them trading lower, definitely off there at worst levels of the session, but
still done about four and a half percent. This is the company faces a new crisis after a seven thirty seven jet fell out of the sky and shina hundred thirty two people on board, renewing concerns over that best selling family of planes for the company, and as we mentioned, sending the shares tumbling. I mean, this is something that everybody's been talking about that certainly is George Ferguson is senior aerospace, defense and airlines analysts with Bloomberg and Tell Legends.
George joins us on the phone from New Jersey. George, good to have you with us. Uh, some obviously a tragedy here. Um, explain though, why you think that the shares are reacting this way? Because I gotta tell you the seven thirty seven from what I've read, hundred n this is the next generation, the one that preceded the seven thirty seven Max, so completely different version of the seven thirty seven. Uh, this is among the safest airplanes
out there. Yeah, agreed, Thanks thanks for having me on and ye yeah, well we're very you know, we're very mindful the fact that this is a human tragedy. Sorry for the lives that were lost. Here. The airplane, the seven hundred is very safe airplane. You know. One of the ways we think about that is that there's been over five thousand of those airplanes built, the seven thirty seven Dash eight hundred specific variants, and um, there's still
in service five park. I would imagine a bunch of them would come back actually into service as we come out of the pandemic. Um. You know, it's really been. It's the mainstay of a lot of fleets around the world. We see airlines like Ryanair operating a lot of those seven thirty seven eight hundreds at twenty plus years of age. This particular airplane was about six point eight years old from the data we see, which is a fairly young airplane. But you know, there are some seven hundreds that have
been flying in fleets for twenty five years. So we when we look at that, we really think, you know, this doesn't it doesn't look to be a a Boeing systemic kind of manufacturing problem. You know, there's always a lot of things that can create a crash. You can have mechanical problems, you know, maintenance issues, you can have pilot air sadly, and you know that happens everywhere around the world that get pilots sometimes just don't make the
right decisions, many kind of manufacturing defects. But in this case, it's been in service too long, the fleet has been too successful too much in the air. We really think it's probably probably something more discreetly related to that airplane. So how quickly do we probably find out exactly what happened? I mean between the black box and other things. How how quickly would you expect to get more information that maybe clarifies exactly what happened. I mean, I think we'll
start to see information in a couple of days. I don't think it takes a long period of time to start to get that information. UM. I would expect you know, Bowling to go there and be on site as well, to be involved, and hope, you know, the Chinese regulators I think would allow that. And um, you know, I think everybody it may become very obvious pretty quickly when they get to the black box and the scene. UM, it may not, but again I think in a couple
of days you'd know. To us. The bigger challenge right here is, Um, Bowling already has a bit. You know, Bowling's Max isn't allowed to fly in China's aid. Bowing has a very delicate relationship with China right now, but the Max can't fly in China and Russia. UM, And so know that they're they need to be you know, it's an important market for them, and so that they'll I think be very cooperative and be on there, willing to be on the ground and help the Chinese figure
out what has happened. Here because they don't want this, you know, they don't want this to become an issue about the airplane and the mains action. And I wonder what it means for Boeing as a company. You know, in the wake of the seven thirty seven Max tragedy where two planes went down in a very short period of time, the subsequent grounding of those seven thirty seven
Max aircraft, including still in China. When when a lay person sees that a seven thirty seven went down and doesn't understand the nuance, is that the type of issue that that could affect the way that people make decisions about how they travel and what they travel on. Yeah, I mean, I think short term potentially, I'm actually a little bit surprised at the even the market losing the US today and some of the people I've talked to who don't realize that the Max are two different, you know,
two different different airplanes. So I think it's important what we find over time is that, um, it's stages, you know, I think it's in early days it's very front of mine and then you know, in a couple of weeks in a fade away. But again, if you're bowing, you prefer never to have these these kind of you can't
prevent them, but you prefer not to have. Hey, George, bigger picture if we just you know, step back for a second and I think about what's going on with the Russian invasion war in Ukraine, and we keep seeing, you know, what China will say or not say about what's going on, what the US will say or not say about what's going on, and the moves that you know, various NATO nations, including the US, are are taking to support Ukraine. It's just a reminder how complicated this is.
And you just talked about Boeing and how important that Chinese market is. Just give us some context why companies may make some moves, particularly with Russia, but you know, are hesitant to some extent because of a market like China. It's it's crucial to Boeing's growth going forward. And just got about forty seconds. Yeah, totally. You know, before the pandemic, China was probably more than ten airplanes a month of the seven thirty seven. That's why there's potting them flying there.
Bowing wants to go to thirty one. Seven thirty seven's a month, and I didn't think they can sustain it unless they get China to reaccept the max. And it's probably worth eight airplanes a month out of thirty one. So you know, what's that something between twenty five and it's in a very important market. It's massive, and it just reminds us how complicated all of this is and how troubling. UM, George, thank you so much, really appreciate the analysis. George Ferguson joining us on the phone in
New Jersey. He's senior Aerospace, Defense and Airlines analyst for Bloomberg Intelligence. That's our in house group of analysts. And just a reminder, we mentioned BOKU shares are down just down about three percent at their lows, they were down to more than six percent. Surprising to see moves like this, but as George said, there's a lot of nuance here. Yeah, and just remember it's an overall downward market. But Boeing
definitely reacting to that news. This is Bloomberg, Great you, This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. So among the COVID headlines on our radar, the B A two subvariant of O Macron driving up cases in Europe now accounts for about infections here in the United States, where indoor mask and vaccine requirements have largely been rolled back. That is true even in our office space. The glass dividers,
the plastic dividers, they came down, they did. I did go to Broadway this weekend for the first time since the pandemic and they had masking in effect. Vaccination required as well. We had to show our vaccine but it was packed. It was Yeah, it was totally packed. But we all wear masks, right, So that's kind of our
new reality, all right. So that's going on Mainland China, Shanghai reporting a record number of new cases after authorities expanded a mass testing program, and Dr Anthony Faucci tim saying a likely rise in US COVID nineteen cases probably will not amount to a full scale surge or prompt renewal of widespread restriction. So that's today's environment. Also thinking about what all this means for healthcare workers. That's why we have a great voice. Dr Imont abuse Aide, the
co founder and CEO of Incredible Health. It's a marketplace for connecting hospitals to nursing talent for nurses and hospitals to really find one another to actually work. So Dr Abuzaide has some great insight into how these hospitals are doing. Uh, she joins us on the phone from San Francisco. Dr Opposide, how are you. I'm doing well. Thank you so much for having me today. Yeah, it's good to have you
back with us. Um Okay, I want to start with with with burnout here from from healthcare workers, because Carol went over all the headlines we've all been thinking about COVID in the different places where we are. What do you see on Incredible health platform thanks to a survey that you did in terms of of of burnout for nurses and and how much are how concerned are you
about it? Yeah? So we just launched our third annual State of Nursing Report and we you know, it includes data from tem per cent at US nurses or four hundred thousand nurses. So what we're seeing is that over the next twelve months, about one third of nurses UH plans to quit their jobs and the number one reasons it is burnout and there high stress environment. Of nurses are citing burnout as the number as the reason why
they want to leave their current roles. So I am curious, then are they leaving because they just had it and they're stopping work completely, or they also because it's a tight labor market they know they can leave and they can find other jobs. It's actually both. So we definitely have a percent of nurses roughly about that are thinking about permanently leaving the professional together. Uh. You know, that's of course going to exacerbate our ongoing nursing shortage that
we're that we've been facing even before COVID. Uh. And then but then the majority really are just looking for a different role within nursing that will you know, hopefully be less stressful, have better staffing, and therefore they won't get overworked as much. In some ways, that is a little bit wishful thinking, um, because every hospital right that we work with, at least right now is understaffed and is um you know those nurses are are are working
over time as well. UM. But you know, you know, sometimes you think the grass is green. Are right? Incredible too, because we tie back to what we heard from FED chair J Powell about the labor shortage and the labor crunch and the idea of workforce participations still not to levels Carol where they were before the pandemic. And I think to myself, Okay, it's it's it's it's every single
industry here. And if healthcare workers continue to be overburdened, even if hospitals aren't overflowing right now, then that's a huge issue for next time. Hospitals do take on a large number of people. Yeah, exactly, so what does that mean?
So what that means that what I mean, what we're seeing on the hospital side is that actually, yeah, patients demand continues to increase, right um in COVID of course creates more patient numbers, but there's also many patients that have delayed care throughout the last two years of the pandemic. And so and then many of the hospital and health systems that we work with are expanding. They're adding more locations and more units and so all that requires more staff. Um,
Are they paying more? Are they paying more for the workers that they can get? They are. Yes. We have seen a hundred and increase in in offering up sign
on bonuses when it comes to nurse compensation. UM. We've also seen in you know, in the state of Texas alone, sign on bonuses have doubled in terms of the amount um from fifty five eight hundred to ten thousand, seven hundred dollars average being the sign on bonus in the state of Texas UM and then the state of Florida has had the biggest increase in in in uh in in employers offering sign on bonuses. So we are definitely
seeing compensation increase. You know, it worries me because I feel like this is a supply and demand story that the demand is only get increase for nursing care as we all get older, lived longer, and then the supply is not there, So you do wonder about what that squeeze will mean UM going forward, we get very briefly dr abbusated, how much higher do you see wages going in the next year? Very briefly, over the next twenty four months, we definitely predict wage inflation going up at
least another five to seven percent. That's a lot and that we'll see play out certainly in those inflationary numbers. Drymon Aboz, thank you so much, co founder CEO. She is of incredible health once again joining us on the phone from San Francisco. I mean, that's the reality of the job market. The healthcare situation I think is certainly special, not an anomaly, in that I think there are people, as she just said, that are just so burned out post pandemic. Yeah, they go and switch careers as a
result of what happened over the last two years. Well, and that survey also talks about verbal and physical assault by a patient or a member of a patient's family. To that a lot of members see this is Bloomberg Radio. You're listening to Bloomberg Business Week with Carol Messer and
Bloomberg Quick Takes. Tim Stinovic on Bloomberg Radio. Well, fascinating story online at Bloomberg Business Week about Silicon Valley's wealthiest Russian who built his wealth making lucrative pets on a few names that you know Airbnb, Ali Baba, Twitter, Facebook, and a lot more. He Now, though Tim is distancing himself from President Putin, we're talking about none other than Urie Milner. You may know from firms such as Digital Sky Technology is also known as DST. Max Chafkin, his
features editor at Bloomberg Business Week. He joins us on the phone from Queens, New York. The story by the Way, by Sarah McBride. It's now on the Bloomberg terminal. You can also read it at Bloomberg dot com. Slash business Week also joining us as Joel Weber editor at Bloomberg Business Week. He's with us right now in the Bloomberg Interactive Broker's studio, Joel. Uh. Jurie Milner a name very
familiar to people across Silicon Valley. Uh. He's been involved in some of the most as Carol mentioned, the names that uh, many people are familiar with if they use smartphones. Uh, Airbnb, Facebook and more. Living under a rock, Yeah, exactly who is he? Uh? Really prominent venture capital uh and has long been, as you mentioned, involved in a lot of startups that have gone on and had great success, which
obviously made him very wealthy. Um, the wealthiest Russian in Silicon Valley actually, and obviously you know, all things Russia right now are of great interest. And so when Sarah reached out and said, hey, um, I'm talking to to Uri,
we said, what's he's saying? And that's for hours. Yeah, We've got a lot of great access and and and the and Max who edited the story, I think did a great job pointing out you know this, this risk for for Urie and all this, and how quick he is to attempt to put some distance between he imputin, although not maybe as much distance as one would think. So, so, Max, what what jumped out to you and her reporting? Yeah,
I mean what's interesting about Yuri? So it's it's not just that Youuri Milner is this really important venture capitalist um you know, you know, he's like right up there with like, say, you think about the most important bcs in the last twenty years. It's like Mark and Rees and Peter Keel uh and probably you're a Milner UM and and and what. But it's not just that he's um made a lot of money and made a lot
of investments in companies you've heard of. It's that he's kind of put himself at the center of Silicon Valley. You know. He bought this UM hundred million dollar house UM in Los Altos, you know, which is really hard of Silicon Valley has you know, fun spent hundreds of
millions of dollars funding sort of tech focused philanthropy. You know, his events have been sort of hot tickets, not just among among tech types but also in Hollywood and so but of course, basically the seed funding here, as Joel is alluding to, um comes from uh, basically sources connected to to the Kremlin. So um, there there was some money early on from Alisher Usmanoff, who is a sort of a metals magnet, basically a pro Putin oligar. Another
investment in Twitter. There was money from you know, Russian state controlled bank BT beats UM and and and the thing that's pretty interesting here is Milner has spent as as he told Sarah, basically years trying to put some distance between himself and the Kremlin. And and in fact, you know, he shared actually a lot of sort of new information. I mean, he hasn't seen Uzmanoff in five years,
he hasn't been to Russian eight years. Um. So so he's basically making the case like, look, yes, um, there is a lot of money that I had early on that was connected to to Vladimir Putin and the Kremlin. But it's been a very long time since I've taken any money from those guys. And really, you know what, this has nothing to do with me. What I did find so interesting, Max, are uh the number of people
who like came to bat for him. You mentioned, uh, some of the folks who he you know, when you think of the most important Silicon Valley venture capitalist, right Peter Tielmark and Trees uh and by the way, all three of them involved in early relatively early in Facebook. So that'ser Ata least that's something there too. But who who did Sarah speak to you that really went to bat for for euriamil there? Yeah, I mean there's um.
You know, the story has comments from Ryan Peterson, the the CEO of Flex Sports, Max Levchin, who's a you know, well known Ukrainian American UM who's also you know, pretty close to Jeri Milner UM. And you know, there are others that we we didn't include in the story. I mean, the the the kind of Techily has definitely um circled the wagons to some extent, and they said like, look this this guy really has nothing to do UM with
with what's happening in Russia. And and of course you know there is some there's some truth to that, right he didn't he hasn't made his money in the same way that many of these other um, you know, Russian billionaires made their money UM and and and he really has had some business on the other hand right there
that you know, you could imagine this. This does kind of um, you know, color some of some of the stuff that's happened in recent years, and it's definitely gonna be a challenge he has to work through as he raises money for subsequent funds. All Right, I'm gonna just take us away for a moment, because one of the things that jumped out when I was reading and and all this is, you know, disisting from Vladimir Putin, but that investment in SpaceX, like that he got out of
kind of early. Well and exactly, yeah, that's that's previously reported. Um. Yeah, and as we say in the story, in twirteen, Urie
Millner UH put about ten million bucks into SpaceX. Now that would not be a hugely consequential thing, except that at that same time SpaceX was basically going around bragging about how, unlike other UM major defense contractors UM, including like the main one that the Air Force was using UM to to launch rockets UH, SpaceX did not buy Russian engines, and they in fact followed the lawsuit against UH at the Department of Defense saying that that their
competitors were in effect funding, you know, the Russian defense industry, and and so so this was not disclosed, and Milner actually left, um, you know, basically exited investment. Two years later he told us that, you know, it had nothing to do with with this kind of concern over um, you know, Russian money. That was just entirely about you know, his his own judgment of the border directors. But it isn't it is an interesting wrinkle. It's also interesting and
it wasn't previously disclosed. He doubled his money on that one from ten million, and I'm guessing it would be a whole lot more had he held onto it, right, So yeah, and also helping potentially fight Putin in the war since SpaceX has been rather helpful over there to all right, Well it's a great story, uh, and breaking some news there as well. Max Chapkin, thank you so much, really appreciate it. As we mentioned Sarah McBride writing that story.
This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio watching shares of Berkshire Hathaway certainly today because uh, mr Buffett has been doing some deal something he hasn't been doing it some time. Berkshire Hathaway putting money to work, this time Tim buying Allegheny for liven point six billion in cash. As we said, you know, Warren Buffett has really shied away from doing dealmaking in the last few years, which is something he's
so known for. He's got he's got the cash to do it. The company is gonna acquire all out Any and Allegheny shares eight forty eight dollars and two cents each in cash. It's a premium to the insures average stock price over the last thirty days. Matthew Palazola is Property and Casualty insurance senior analyst. He also covers Berkshire Hathaway, so a perfect voice to have on this afternoon with Bloomberg Intelligence. U, Matt take us into this deal here.
Carol mentioned that it's kind of a you know, back to what Berkshire has done, but you know, hasn't done in a few years. What sticks out to you about this deal because you write that Buffets buying a mini me? Yeah, I mean I've always looked at Allegheny as kind of a mini Berkshire Hathaway. In two thousand twelve, they started buying other businesses like Berkshire does with using the insurance float to buy these non financials businesses and generate a
return off them. It's only in recent years where those businesses have started to give a nice return. But uh, it was very complimentary to the insurances, and it was kind of a surprising deal for me because I wouldn't have thought they would have bought a mini me. I thought they would buy something else use that because they have so much money that why not just put it
to work or what I thought. One I thought the next somebody they were gonna buy is gonna be something we never heard of, or I never heard of some company that makes you know, unique parts for machines that's the only one in the world, or something like that. Um buying an insurance company, I was completely surprised because they have ten seventy billion dollars of insurance premiums themselves. Alleghany has about ten seven to ten right, so it's
very small. So I was I was surprised they would want to do something, you know, in their in their kind of lane. But the Alleghany business is actually very complementary. There's there's small parts of it, like small commercial insurance. A lot of companies are getting into Um and this excess and surplus or specialty lines insurance where pricing is really good. So it's actually a nice little bolt on for their insurance business. Why is this classic buffet classic buffet?
Because you know, he had recently talked about the market. Nothing was interesting to him, so I was very surprised for him to do anything right. And when you look at the gaming stock, it never actually recovered all the way back from its pandemic low, so it never even reached where it was pre pandemic. Uh. In addition, they did pay on a price to book basis a little bit more, but it was trading at the same price to book in two thousand nineteen, so I actually think
it's a great value deal. So you kind of see this unique asset trading at a good price and pick it up. Okay, So that back to the like you know, Graham and Dodd value investing. When it for buffett Um, what does uh Berkshire Hath Theway do with it? So Berkshire's m O is they buy companies and they let them run. They buy the managers, they buy the teams, they let it go. I'd be very surprised if you have a ginormous insurance business that you just have another
little insurance business on the side. But I think that's what's That's what I'm asking the question. I mean, are there I hate to use the term synergies because classically, when you have an acquisition of a company, you see it being folded into another company. You know, it doesn't make sense to actually buy a company if you're not going to if you know, one and one doesn't equal three, right. But in the in Buffett's case, how what does he
typically do? So I don't think he doesn't. He hates the word synergies and they never buy anything for synergy. But I hate it too because I hate when executives use it because it's because it justs and it just means laoffs. Right, Yeah, they're not They're not going to take costs out. It's not a cost play. It's not a synergy play. It's a great company, uh that they got at a decent price. The CEO of Allegheny used to work for Buffett, so uh, he had even said
I'm glad to have him on board. So they're not going to chop out the management team or anything like that. Matt. The deal includes a ghost shop period, so they ensure can solicit consider other acquisition proposals for twenty five days. Do we have to be concerned that somebody else might come in here? It was a decent premium right and the ship prices I think trading around there, it's training around that. I don't I don't think so. I don't see a natural buyer necessarily want that. Then why not
just be one and done? I think it had to do it for for governance reasons. Okay, was Alleghany on your radar as as you know at Bloomberg Intelligence in one of the companies that you cover. We didn't cover it, but definitely on our radar as as kind of a sizeable company out there. It's mostly a reinsurance company, which is insurance for insurance companies. UM, so we paid attention to it in that way, but we we actually didn't cover it. Was like insurance reinsurance, like how many levels
do we go down? Matures the reinsurance, the retro reinsurers come on, who insures the retro reinsures? Well, I just get about a minute here and I'm thinking, you know, we're not quite sure what the outlook is. Everybody's been thrown into a tizzy because of J. Powell maybe being more aggressive, you know, insurance business and a rising rate environment. Good bad? Like, how do we think about this going forward? Good?
I mean, the interest rates will help investment income as long as you have this kind of Goldilock scenario of not too much inflation, interest rates going up, that's good for insurance companies. All right, we're gonna leave it there. I really appreciate it. Matt Palazola, of course, of our Bloomberg intelligence team. Yeah, I bet you let me drive. Oh no, no, no no, no, all right, please, I'll do the right I want to drive. A good question. This
is the drive to the Globe on Bluebird Radio. All Right, just got about ten and a half minutes left in today's trading session. We've been bouncing around, certainly on the equity trade. Uh, we're near our worst levels of the session. But bonds man, no doubt about it. Uh, selling off and yields moving up. That has been pretty consistent here, Tim. Let's get into it with Abbe Desponde, founder and ce IO at Center Stone Investors, joined us on the phone
from New York City. Abbe, how are you all right? How you doing doing well, thanks, we gotta talk Powell. I mean, fifty basis points essentially back on the table right now. The Central Bank is prepared to raise interest rates at its next meeting by half a percentage point if needed, deploying that more aggressive tone towards curbing inflation then he used just a few days earlier, Carol gave us an update on the equity market in the bond market as a result. What are your takeaways from what
you heard from Powell today? I mean everyone has an opinion about about this, and most people think that wait, I was a little nervous where you were going to go with that. Well, I'll say something that's probably not uh shared by a lot of people, which is they don't have the ability to go as high as they as people think they're going to go a three percent,
four percent or whatever. And the main reason is because the debt to GDP ratio is it climbs highers, it has climbed higher since the two thousands make financial crisis. It's required lower and lower peak rates in order to really install the economy. I mean, the last rate hike cycle ended it two and a half percent short then, and debt to GDP is now higher than it was in two thousand eighteen. So if they can get much
higher than two, I'd be shocked. Are you saying, because the servicing and the cost or what yeah, I mean in the the normous amount of leverage, it takes less and less an interest hype to really spread the pain across a large part of the economy. So wait, so I just want to sure I understand this. I'm a little slow on a Monday. Uh. But obviously what you're saying is that the debt to GDP ratio is higher than it was, and as the Fed raises rates, right, the cost of servicing that debt will go up and
that will be problematic. It is, and it's not just in the said but you know corporate Uh, corporations are highly indebted, much more so than they they've ever been UM. And you know, you can see already the credit indicators are starting to even with a twenty five basis point federal funds federal funds rate, you can see the credit markets already starting to kind of you know, smiff out
some potential problem. Credit yields are hot, or how yield spreads or you know four percentage points or something like that. And you know, don't forget now half or more of the corporate bond market is around junk or worse rated, So it's an enormous problem. And you also have you know, some of the other kind of factors here of mortgage rates are not three percent or for an ad percent
now on the bank rate martyrs. So there's plenty of already, um, you know, head winds building that are just going to prevent the FED from getting anywhere close to that three or four percent numbers, my guess. And what we're left the is with a you know, people have been wondering for for a long time, when is the US going to have negative interest rates? Well, you're gonna have them soon. Can have negative real interest rates by um, well, they're
already negative and they're gonna peek out at negative. Can I just ask you something in terms of the corporate debt that you said that we're that you know, corporations are also highly indebted. But help me explain something or help me understand something here too, because we've talked about a lot of corporate debt restructuring, especially as rates were low, right, we saw companies tapping debt markets to restructure that debt.
You're ing though that debt will come um true or what will be, they'll have to reservice it, you're saying soon and that, and they'll be forced to do higher rates. And so that's problematic because I'm a most problematic Yeah. But also the fact that such a large part of the corporate debt market is that John, and when you're talking about junk bonds, you're talking about default rates of you know, four percent just in a on average over
a long period of time. So as the economy slows, there's a larger part of the economy that is exposed to potential default and that you know, of course is a self reinforcing cycle potentially on the downside as the economy slows down. So all of these factors kind of prevent the Fed from raising rates, you know, to the degree that would be required to offset the inflation rates, in other words, to get to that four or five rate, which would be kind of where inflation probably is in May, June, July.
It's just gonna be very difficult for them to get there. So that, you know, the good and bad of that is that, you know, those that are expecting a bear market stocks go down or whatever. I don't think it's going to happen. That it could get people could get that fear. But um, more than likely that said, it's going to be prevented from raising rates to the extent that it would cause a major major stock I mean stocks can still go down, but not like a you know, wipeout.
So what does this mean for inflation? Uh, Inflation remains a cyclical phenomena at this point, Um, except for you know, the horrific things going on in Europe and the effect on oil food prices. You know, for the different parts
of the world, the inflation matters in different ways. In the United States are basically a self sufficient economy as far as food, so it comes out of the pocketbooks of US uh, you know, households, but it goes into the pocketbooks of chemical producers and farmers and what have you that does not and also food in the United States and developed markets. You know, it's a small portion of the total bill of the product that you pay.
Everything else is marketing and transportation and brand building and all that stuff. If you're in Northern Africa, we prices go up by your cost of eating went up three that's a major problem for those parts of the world, So inflation is going to affect different parts of the world in different ways. Um And I don't think anything that I've just said is really revolutionary or all that original.
It's just kind of reflecting that the realities from what's happening in Ukraine, so all kind of games that inflation is a little bit more sticky. Yeah, then I would have thought even you know, six months ago, I thought it is much more of just a sickle phenomena because of the supply issues in the shutdowns. But there's there's some tail ones here. You gave us some really smart things to think aboutespecially in a week we're going to
hear from a lot of fit speakers. Already heard from j Powell today as we as we've discussed all we've got to run. But hopefully we get to back real soon. I'llbe desponde. He's found and chief investment officer Centerstone Investors, on the phone from New York City. I thought that was you know, you do wonder what will maybe prevent the FED from being as aggressive? Um or every meeting they're going to go and they're going to see what
the world is like. Right if he says the FED isn't able to raise interest rates as much as they want to, then what does it mean for prices and stable prices right? And does that does that correct? Maybe as demand you know, ultimately goes down, we will see.
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