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It is day four, heading into day five since the surprise Hamas attack on Israel, and in today's Bloomberg Big Take, Bloomberg News Israel bureau chief who we talked to yesterday, Ethan Brauner, writes about a nation in which a political divisions have really driven anti government protesters into the streets for nine months. That's been the backdrop ahead of this and that have now those divisions have now vanished in the face of Hamasa's slaughter at the weekend and fears
that the conflict could spread to Lebanon. You know, we see that this right tim often tough times, conflict can often bring divided sides together.
The question is, I think how long this lasts, especially in a government that has been divided divided for such a long time. With more on how the nation has come together and yet the risks that still face it's politically challenged and questioned. Prime Minister Benjamin net and Yahoo. We've got Bloomberg News economy and government reporter Khalat Alstein joining us on Zoom from Tel Aviv right now. Ghalat,
good to have you with us. First of all, I just want to say thanks for joining us, especially so late and in a time that you know, people are so concerned about their security in Tel Aviv. Just just give us an idea of what you're experiencing right now, what you're seeing, and really what you're doing, so as.
You're asking me on a personal note. So yeah, So, actually Tel Aviv has also been targeted over the past four days. I live in a very northern vicinity of Tel Aviv, so I think it's a little less targeted than other parts of the city. But we did have two missile alerts today, had to go down to the bomb shelter. It is now around ten to thirty pm here, so there were they were saying on the news a bit earlier that missiles were expected to be shot at
Tel Aviv at nine pm. That didn't happen up till now, but some people are still, you know, waiting to see if that happens. And that's basically what's going on on the ground here in Tel Aviv.
Ugalie are you are you? Is it to the point where you're you know, the missiles are coming and they're being intercepted by the Iron Dome defense system.
So yes, hopefully so it is. You know, as you probably will know, this is a very efficient system that that Israel has you know, made up and built and has made operational. But it does, you know, miss sometimes so but most of the times it's it's pretty accurate and it does an amazing job at intercepting the missiles.
Yes, you know, in covering it yesterday here certainly at Bloomberg and during our live broadcast were some of the headlines that came out of Benjamin not in Yahoo's evening televised address the Prime Minister of course and talking about unifying government. Tell us about remind our world about the backdrop that's been Israel for the last nine or ten months.
Yeah so so. Benjamin Ataniel, who's Israel's longest ever reigning prime minister, came back to power at the very end of last year, at the very end of December last year, and he put together a governing coalition that is constituted of very far right nationalist parties and Orthodox parties, Jewish Orthodox parties, making that the I think, you know, you can say that that is like the most some would say the most right leaning government Israel has ever had.
Some would say it is the most extreme government the Israel has ever had. And on that backdrop, after the government transformed, just as Justice Ministerry live Levine, who was a member of Benjamin Ataniella's party that he could, came out and put out an announcement that he is initiating a judicial overhaul which was basically meant to weaken the power of courts, mainly the Supreme Court Israel Supreme Court, and that immediately brought on very intense public protests that
went on until last Saturday. So it went on for forty weeks straight. It got bigger and bigger as time went by and the weeks went on, and it turned out to be the biggest protest movement that Israel had
ever seen. And the division was very, very big, and you know, it was felt everywhere because I think that in my perception and I think many will tell you that that at some point it went away beyond the controversial judicial overhaul, which is always at the foundation of things but you know, it was a very big opposition to Nathaniel's government because a lot of other things that they were trying to pass through in Parliament and in other ways that a big part of the public very much resented.
Here, It's safe to say his political future was much in question now as he seeks a more unified government, and you understand why everyone would be rallying, you know, behind unification, or at least everybody kind of on the same mission, if you will, in terms of any kind of retaliation. Does it change the political course of Benjamin net and Yahoo?
Not necessarily. I mean, I don't think so. You know, there's been a lot of dog that's being pushed back, both by Israeli officials, Israeli politicians, leaders, and also by some you know, people in the general public. So there's been a big pushback, you know on the questions of you know, how this even happened, right, I mean, it's it's pretty amazing that that that even happened to a country like Israel.
Is he being held responsible for that? Within sight? What's what's the conversations that you you are hearing there in industry all about his responsibility for missing on the intelligence side of things.
So you know, some people are saying that he has
a big part in it. You know, obviously most people think that there was you know, an intelligence failure here, but there is talk about you know, first of all, him being responsible for for everything that goes on as Prime minister, and also that pressure that the government had put for instance, to shift military powers from the Gaza area to the West Bank, for instance, to secure settlements, especially during the Jewish holidays that they were just you
know coming to an end just last Saturday. So so so they're also saying, you know, it's so so it's not just his overall responsibility for the situation, but actually, you know, some some things that were brought on by his government, by their policies, by you know how much they wanted to go towards the settlements, you know, and allow them to do things in the West Bank that needed a lot of security. So so, yes, he is being blamed for this.
So I just want to clarify. I just want to clarify. Are you saying focusing and instead of focusing on the border with Gaza, potentially moving resources from that area to the West Bank.
Yes, that is that is part of the conversation here in Israel. I want to be clear that it is not, you know, one hundred percent of the conversation that everyone is saying this, and even the people are saying this, you know, are not saying that this is you know, one hundred percent to you know, he's one hundred percent
to be blamed for what happened. But there is talk about the specific point that I was just talking about that because they wanted to allow settlers in Judean and Samaria to have all these ceremonies and all these events during the Jewish holiday season, they did move some military powers. They did shift them to the West Bank, and this left Gaza a little bears, as you know, in relevance to what is usually over there in terms of military powers.
Just got about a minute or so left, forty five seconds, goalie, I can't even imagine, you know, to be in your shoes. What are you thinking at this point as you look at out towards the rest of the week.
Well, you know, if you listen to the rhetoric of everyone you know who's been speaking to US leaders, idea of officials, they're speaking about a very very long military operation that's coming ahead and there's a big question if Lebanon will be joininge and Lebanon will be joining in. And this is you know, this is causing a lot
of concern. I'm speaking now, you know, of the civilians of the general public in Israel, because you know, when there was a war in Israel, then the public is targeted by missiles, and when you look at Prisbella, there are a much bigger threats in that sense than come us. So you know, people are concerned, and you know, it's pretty clear that we're looking at something that's going to be very long, ongoing weeks, maybe months, and we have to see how it plays out.
Yeah, and this is something we talked about yesterday. I think somebody referred to it as Iranian proxies? Was it Lebanon and some other areas in terms of as this size and scope may expand out. Khaleat, stay safe and thank you so much. Galita Alstein on zoom from Tel Aviv, of course, Bloomberg News Economy and Government Reporter.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot com. The iHeartRadio app and the Bloomberg Business app or watch us live on YouTube.
That ipo for burken Stock pricing at forty six dollars a share, coming from Wall Street Journal. It was a range of forty four to forty nine. So just to give an eye da in there point right, they were looking different. Raised about one point six billions. It'll be a little bit below that.
You have burks thirty two.
I have some books. Yeah, they belong to my daughter I had.
Did you Yeah, like probably high school.
Of course you were there, you lived in Califori.
Yeah, they were like they're yeah. I mean they're back now now they're cool. I wasn't cool then. I'm not cool now.
Just wear them because you were kind of a nerdy California kid.
Yeah, that's exactly right.
I wonder if bike CEOs wear them.
It depends on this. Just hanging out, yeah, you know at the beach. Yeah, maybe wearing some berks.
No, you can't see it anyway. We do have big bank earnings coming in your way this week. JP Morgan Chase City Group in Wells Fargo. They do report on Friday the thirteenth. We're focused on the sector, the impact of higher rates we talked about a little bit earlier with Ira Jersey and some of our team just met and also weighing in so important in terms of what they can tell us about the lending environment, whether it's corporate, retail loans, mortgages, like all this good stuff.
Yeah, and keeping with that, we have a member of the banking community joining us right now. Priscilla Sims Brown is CEO of Amalgamated Bank. She joins us on Zoom from Martha's Vineyard this afternoon. Good to have you with us, Priscilla, how are you.
I'm well and I have a pair of Birkenstocks in case.
Okay, I like that. Well, you're also in Martha's vinyard right now, so it kind of makes sense. Hey, I want to talk about the bank in the history of the bank in just a minute, but first I just want to get your view on what you're seeing from the consumer, what you're seeing across your industry right now.
Look, I mean, clearly, as the markets are showing, we have consumers who are having a hard time getting mortgages, trying to figure out what is going to happen to rates overtime. I don't have a crystal ball either on that, But I do feel that the change makers we do business with are really the organizations that are doing good are more important than ever right now because they're sort of helping the underserved, and we try to help the underserved to get access to capital.
When you say, and I want to get into kind of more broadly of who you guys work with on a regular basis, consumers having a hard time, what does that mean? Are they defaulting? Are they what is it? Are they not borrowing? What are you seeing that that that needs you.
Say that, Well, I'm saying that because interest rates are high and it's difficult to get a mortgage for many people. Also, access to capital for businesses, small businesses in particular that are expanding, is more expensive, and so it's you know, the equations are different, the math is different than it used to be for a number of people who are
used to the lower interest rate environment. So how that will affect consumer sentiment over time, How that will affect the sentiment of the small businesses we work with, That's a question yet to be answered. But we certainly do hear about and see that consumers and small businesses are concerned about it.
So what are you seeing in terms of consumer spending.
Well, I don't have a real gauge on consumer spending. I read what you do, but I do think that at least in our universe, which again is we do have some consumers, but we are largely a bank for
change makers. And what I do see there is that there are people feeling more that it's more important than ever as we look around at the status of migrants as a status of the wealth gap and more and more, this division of wealth that you see the median wealth is in this country is something that people are concerned about, and so our change makers are looking to try to help close that gap.
Well, and I so get it. Change makers, you guys, were started back in the early nineteen twenties. It was about serving immigrant women who are working in what was called the needle trades. As somebody whose grandmother sewed a lot and was a seamstress, my grandfather was a tailor. Like I totally get like that economy from which it was created. You talk about change makers, so it's one
thousand plus unions. You're talking about political groups, if you will, so talk to us a little bit about the people that you do work with regularly. And what that tells you the unions I'm really interested in. You know, you've seen an increase, have you, in business when it comes to the one thousand plus unions that you work with, especially as we've seen it, what seems to feel like a resurgence in the unionized workforce here in the United States.
Yeah, that's right. I think it's those are all great observation. We were started one hundred years ago, as you say, by the needle trade. These were textile workers, mostly immigrants, who came to this country and they couldn't get banking. They couldn't find a way to get services everything from savings accounts to loans and for their mortgages, for their homes, to expand their businesses. They couldn't find loans to get their kids in college, those kinds of things, and so
they started their own bank. And here we are almost exactly one hundred years later, and still we care a lot about workers' rights. Forty percent of our publicly traded stock is owned by unions. The rest is owned in the market broadly, like most banks, and we serve people who, as you say, you know, really what they hell have in common is they're trying to make a positive difference
in the world and society forward. It includes everybody from political groups, whether that be candidates or political parties, racial justice organizations, social justice organizations, foundations, and of of course climate organizations and yes, unions.
Well, you know, I think is so interesting about this. You go to your bank's website and there's literally up there with personal, small business, commercial, institutional investing. There's issues we care about a lot of things you just mentioned. Why do you think so many corporations shy away from speaking out about these things, whereas you guys embrace them. Just in the last forty five seconds.
That we have with you.
Yeah, Look, I think the reason we embrace them is because we are proving a concept that you can do well and do good. And we've been doing that for one hundred years and before it was ever fad. And we think that people have a conscience and business leaders have a conscience and they serve the underserved in minor ways. We do it in major ways, and we want to see others do so as well.
All right, we've run out of time, but do you come back soon. I love to get you, need the conversation with you. Priscilla Sims Brown CEO of Amalgamated Bank, joining us on the phone from Arthur's vineyard. And you know, interesting, a very different take on a financial institution in terms of how they were creating what they've all about, and they kind of they continue that that mission if you I mean.
These are these are issues that corporations run away from. Let alone, you know, highlight them on their website.
Yeah, it's really cool. We'll get our back real soon. You're listening and watching Bloomberg Business Week on this Tuesday, Carol Master, Tim Stenevik, and this is Bloomberg Radio.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Easter on Bloomberg Radio, the Bloomberg Business app and YouTube. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa playing Bloomberg eleven thirty a Bromarco a journal.
Now about you let me drive Oh no, no, no.
No, jug honey please gravels.
Let's I want to try it.
It's a good question.
This is the drive to the globe. Do a thing well around other Don on Bloomberg Radio.
All right, how many of you are attempted to just like I don't know, call into bed and then come come back and wake up in about three or four months?
Are you asking me, hyber me to hibernate, hibernate.
And then come back and I think the markets of like three or four months from now?
Fine, sign me up.
Why does that not surprise me?
You know how I roll?
All right, Well, let's see how our next guest rolls. Doug Sioak is back with a CEO and partner at Kavar Capital on Zoom and Leewood, Kansas. Doug, so good to have you back with us. There's a lot going on geopolitically, as you know, and you know we've been covering, but a lot coming out investors, just uh generally speaking. Having said that, what do you think if we all went to bed and then came back in three or four months, did the hibernation thing? Well, actually that would
be like more like five or six months. What kind of environment might we have in four months or six months from now?
Yeah, that's a great question, and thank you for having me back on. You know, I think we would have an environment that we've missed a lot of fantastic opportunities. You know, I think, like you kind of mentioned, there's been a lot of negativity. Obviously, the emotional weight of what transpired in Israel over the weekend is heavily on
everyone's hearts and minds. And you know, the markets historically don't really know how to calibrate prospects of geopolitical escalation right there, knee jerk reactions into haven's and out of risk. But then there's a realization that conflict galvanizes government interventions and that could be an increase in capital and liquidity.
And so it's kind of an emotional tension between I should say, it's sort of a tension point between emotion and economic and that kind of defines what the market's been but for various reasons throughout the year, No question.
I like that combination between emotion and economic. That makes a lot of sense.
Well, so where are we right now, because it it seems like it's less emotional at least today in terms of what's what's driving the market, because it seems like it's a sort of a well maybe it's maybe it is emotional, but maybe it's just dubvish.
Yeah, I think, Tim, you could say, well, today's the Rafio Bastik or Philip Jefferson rally, you get a little attribution to Mary Daily because her acknowledgment of race efficiency was a bit more of a reversal than the end.
Because our Lisa bramo Its did the most conversation, the most amazing conversation with her at the New York Economic Club. I have to just put a shout out for Lisa because it was pretty amazing. But anyway, go ahead, well great, and then go on top of that, I mean, lastly, a well elevated Chinese stimulus.
And then I saw something interesting this morning from beastpoke and talking about the dollar has been in a bit of a decline over the last couple of weeks, and even in spite of the haven demand that eminated over the weekend. So today's a pretty good day, particularly you consider that the equit A S and P is outperforming the market cap waited by about thirty basis points for those that are concerned about an absence of breath, and no doubt this forty level the SMP has held pretty solidly.
It's last week.
Yeah, just Bett was talking about a week or dollar two impacking the trade.
So Doug, do you think. I mean, it's hard to I don't even look back on the declines we saw last week and then see the surge we saw this week. I'm wondering if we're going to test those lows again, not just the lows from last week, but last October this cycle.
It's a great question.
You know.
It's interesting, tim like essimists have been spewing this pretty well worn narrative, right, like, expect these brisistently high interest rates to number one, deccellerrate the economy, number two, undermind consumer competence, number three, rerate mark multiples and then lastly shift capital and or conservative corners, and all of that makes sense, right. And I also have said for a while, I don't know that the market is getting credit for
time served last year. Right, Yes, we had a nice bounce, We're we're still not taken out the prior period highs, right, even though we've had the bounce in the one year university in a couple of days ago of those lows, but historically right, when you just look at where we are at current real yields, it's actually a coin toss between stock and bond performance. Looking out twelve months, both are positive. Again. This is historically not predictive, just perspective.
But inflation has come down a bunch off the peak. And this is what we know, and I read this from Golden Sacks last week. Since nineteen forty five, the S and P is there isn't twenty one percent on average, and then two years after LUISA data showing a peak and CPI, if you take out episodes with a recession, that means you're looking at more like a twenty eight
percent game over that two year period. So I do think because the wall of warry is so steep, a lot of that is reflected in valuations, and there's some pretty attracted places to put money right now, and there's some pretty important inflection points that are building.
So when you say market getting credit for time served, you're talking equity market specifically.
And fixed income, right, Carolcause you figure last year is what the seventh worst year in the history of stocks, the first worst year of the history of bonds. It was a single worst year for bonds, the single worse three year period of monds, seven, five and ten year period in bonds. Don't why I said those out of the chronologic order, but so there was a lot of time served, a lot of unwine, a lot of slack and access left both both markets, which needed to happen.
Right.
There was just so much liquidity that has now come out of the market, and it's still coming out of the market, and it's one of the reasons why we're seeing the back end of the curve rising as it hass.
So in other words, both stocks and bonds have gotten the heck beaten out of them, and so let's remember that in terms of when we look at the trade today.
Absolutely, that's a much better and more concise way to say that.
I could have used another four letter word, but you know, we are Bloomberg and I like to keep it clean anyway, But it's no, that's a really good point. So, having said that, it's an interesting week, Doug with bank earnings, and we're looking for a lot of guidance and understanding of kind of where we go from here from the big bank CEO. So who can tell us a lot right about the lending environment, especially when you've got the
FED concerned about tightening financial conditions. That's why I think what we get from the banks is even more important. But you've also got some FED minutes and those inflation prints is this potentially a very important for you and maybe how you think about the markets and where it goes from here or what you know.
I think every piece is incremental, right, what we've had this obsession with and likely because it's been big center point over the media, but then also feeling questions from our clients is is there a chance for a soft landing? And to your point here, when we're going to get some aspects of that case that can be affirmative or counter and we think there's a chance for a soft landing.
And if you really think about we have stable and accelerating economic growth, do you realize that the GDP and out the Atlanta Federate is protecting a third quarter GDP of four point nine percent? Do you believe it so a GDP? Say it again?
I was going to say, I mean, they have a pretty good track record.
They do have a pretty good track record, right, And you have stable to falling CPI and PCE. And we saw on Friday last Friday this ridiculously strong headline at a P number but also with significant dry up and this name it in its drop of our average all yearnings.
So you've got an economy that's resilient. A consumer that's still spending even though they've lost some leverage and celerityed negotiations, which we saw on the quits rate as well, is actually okay, is some of the stuff that they're buying is dropping in price.
Ryes I clumbate, So Stabler accelerating growth, a consumer who's still spending. What else is on the team self planning?
Yeah?
What else is on team self landing?
Well, it got to consider the consumer so importantly because it's sixty eight percent of GDP is wrapped up in consumers contribution. So you still have a strong employment pick that I mentioned, you have low leverage, it's percentage of household net worth. And then this is really fascinating art on Wall Street Journal over the weekend talked about the shifting and the burden of purchasing from the younger of
the older cohort in this country. And I didn't realize that people aged sixty five and up spend twenty two percent of all the dollars in this country annually. That's up from fifteen percent in twenty ten. And American the seventy in higher control twenty six percent of the household wealth. So you have this cohort of people that is also going through this emotional catharsis of you know what, we went through the pandemic. You know what life can be short.
You know what I'm gonna spend right, it seems five to seven percent elevation and I've spending it very.
I got family members who are doing that and traveling and doing all that kind of things. Doug Sioka, thank you so much of Kavar Capital. This is Bloomberg.
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