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Pfizer down more than five percent here their biggest interday loss in more than three and a half years at two at Not So Easy turning out a weight loss drug. And we did have news earlier today Pfizer dropping development of a twice daily version of it's a BCD pill. There were a bunch of side effects. So let's get to it on the beat with us Bloomberg News health reporter Madison Mueller. She's back here in our Bloomberg Interactive Brokers studio here with Balley and myself.
So all right, what do we know about this?
Yeah, So Pfizer has been developing a twice daily weight loss pill and a pill, A pill, a pill. So that's which we've talked about before. Pfizer Astrozenica some of the drug makers that are not yet in this space but want to be, because all of the pharmaceutical companies want to be are looking to pills, you know, as an inroad into this market. Because there's only one pill on the market right now, it's a pill version of
ozembic and it's not very good for weight loss. So this is an opportunity for other drug makers to get in this space. And that's what Peiser sees, especially as Pfizer has really taken a hit this year as demand for its covid product, it's covid shot have sort of faded. It's looking toward the next big thing, that being weight loss.
Forty three percent this year.
Yeah, the opposite of Novo, which is up forty nine percent in Lily, which is up closer to sixty Right.
Yeah, we're definitely saying a shift in the weight of covid to weight loss unintended.
What's crazy is Pfizer is massive. It's one hundred and sixty two billion dollar market cap, and that I get it. They're always doing a lot of R and D and looking for those you know, blockbuster drugs. Having said that, did they really just bet so much on covid that it was going to keep kind of the revenue engine going.
Yeah, And I mean they've they've looked at other infectious disease like RSV and and they're investing more in cancer. But it's just it's not giving the same lift that Covid did, and like these weight loss drugs now are doing for these other companies. So, you know, and what we've seen is the market is reacting so much to
all of the news about these weight loss drugs. Every time there's a new study out, there's ripple effects you know, to far reaching in weight loss drugs this year, right, it's just very disruptive, and so to have a negative result is something that I mean, the company doesn't want
to see, investors don't want to see. And that is what we saw with this twice daily pill in this study, is that the side of there were so many side effects that over half of the patients in the trial had to stop taking it.
And is this a space they have to be in because they still have a single dose daily drug they're studying right.
Right exactly, And so that's sort of what they're pinning their hopes on.
Now.
We're going to get data from that once daily pill study in the first half of twenty twenty four, and you know, we'll see what happens with that.
If it doesn't work, do they have to acquire company because they're still trying to acquire Segon right.
That's a big deal, right right space. And that's the thing.
I mean, some companies are looking to their own pipelines to see what they can advance forward. The analysts that I've spoken to have said that when it comes to Ffiser, they probably will have to do some m and A or have to acquire some company in order to bring a viable asset into their pipeline. Which the good news for them there is there are so many small biotech
companies now that are developing pretty innovative products. I mean, biotechs really see this as a space where they can potentially benefit, and so there are options out there.
But how much are they behind though? If they buy a company that's in phase one study so very early stage, are they still trying to catch up to Lilly, Novo and others.
Yeah, and they are behind, But I think at the end of the day, it's going to be about what is the best product, because right now, the weight loss pills that Novo's developing are not super They're not easy to take. It's like you have to take it in the morning every single day before eating food and then wait thirty minutes to eat. So it's not exactly easier necessarily than a once a week shot. And what we've
seen is just different side effects with the pills. They're not any less expensive right now, at least than the shots, and so there is space for these other drug makers to get into this market, even if it's later. The product is better at the end of the day.
You know, it's interesting.
There's a stack that's on my gainer's list today, Altimmune, right and it's rallying because they gave some top line results and they did amidst stage trial of their GLP one therapy to treeoh PCD. So you're right, like there's these a lot of smaller players out there. Having said that, what's is it trickier in terms of a pill versus a shot?
Yeah?
It is.
It's harder.
It's even though pills are sort of once you have the formula down, they're a little bit easier to manufacture a store transport, but the science behind developing a pill is actually a little bit more difficult. And what we've seen with the pills so far is that they just don't cause as much weight loss as the shots do because of sort of how they're metabolized in the body. There are some more concerns about liver toxicity and things
like that. So it's actually a little bit trickier to develop a pill.
But it's the Holy Grail, isn't it?
For this?
I think that's how that's how the drugmakers see it, Yeah, exactly, because I mean not everyone wants to take an injection every week or every day.
So have you gotten a sense from analysts and investors if they do? See I mean just thinking if I have to take a shot, but at least I'm losing far more weight that weighs into the risk reward.
No, yeah, I mean that's what ELI Lilly thinks. I mean, they really still see a market in injectibles for them, you know, for their business, and they have said, even though Lily has struggled with supply shortages primarily due to the injector puts that they use, and so pills for them is something that actually could help with their supply issues. But they're you know, there's their executives are saying, We're not waiting for a pill to sort of save us
from these supply problems. We're investing billions of dollars now, and we still really see a market for these injectibles.
Talk to us about your beat, because you just came back from Eli Lilly, you spent some time with them, you know, tell us if you can what you can share about the visit.
Yeah, in this space.
Yeah, I mean, it's it's interesting because Lily is one of the oldest pharmaceutical companies. I mean, they've been around for over one hundred years. They really got their start commercializing insulin in nineteen twenty three, so they've been in this diabetes space for forever, and that's why they're at
them and no Vote nineteen twenty three commercialized insulin. So for a century, these drug makers have been head to head in diabetes, continuing to innovate, and that's sort of why we're in That's why we are where we are today with both of them being at the forefront of this weight loss market because the science and the investment that they've put into diabetes has led to these weight loss drugs.
It makes so much sense because if you think about is it forty fifty percent of the population right that are either diabetic or pre diabetic. I mean, it's just massive. And that's just I think the United States alone. So you understand why all of these drug companies have been in that space because it's a massive market. But their continuation of R and D has led us to kind of where we are today.
Yeah, and it's interesting because you know, I don't know if everyone knows this, but Lily is the company that had Prozac, and so it's interesting to hear Lily talk about the comparison between Prozac and now their weight loss drugs, zet Bound because they said, you know, when we brought
prozac to market. There was a lot of stigma and controversy around depression, and people thought depression wasn't a real disease and that it was, you know, something that could just be fixed with, you know, making yourself feel better or whatever, going for a walk outside didn't really There was a lot of that enigmas. Yeah, and they were saying same thing with obesity. So we're sort of like
at the forefront. We were at the forefront of depression treatments and now obesity treatments and trying to break the stigma around that is part of this as well.
Did you get a chance to ask them their thoughts on whether they're reshaping McDonald's business model and Krispy Kreme and whether or not requested? Yeah, airlines are going to make more money because they require less fuel.
Yeah.
I mean they all kind of laugh it off, especially like the airlines comments and the Walmart comments. I think to these drug makers and to like I've talked to a lot of the scientists that discovered these you know, peptides and gut hormones back in the seventies and eighties, and they're like, we never would have thought that this would have turned into what it is today. You know, back in the seventies and eighties is literally no one
cared about what we were doing. And then now the CEO of Walmart is saying that it's affecting, you know, the weight of baskets and stores like this is unbelievable, but you know that's science.
I think it also cut all of us off guard. You have people also talking about apparel makers that you know, you're gonna lose weight and you have to go out and you know, buy a new wardrobe and stuff. So it's kind of coming out in some very very different ways. Fascinating beat, fascinating story. Love hearing about it. And it sounds like Pfizer's not done yet.
Yeah, they're not done yet. We'll wait to see what happens in the first half of twenty twenty four.
I guess one of our big themes, as I like to say, TVD, TBD, about a lot of things right now in our world. All right, Carol Master Alone with Bailly Lipshelt, Madison Muller, Bloomberg News Health reporter, Thank you so much.
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, so you would.
Get tip too, a messets raging. What's up with that NonStop rallies. I mean, even you look at the strength, and this was before the market rally in November. We saw it popping off in the second half of October, going from about twenty seven thousand dollars a token to north of thirty four thousand.
It's quite a pop. And I'm even just looking at the trade today.
You know, Bitcoin's Epithereum's up, Cardono's up, Solana's up. If you look at the Bloomberg Galaxy Crypto Index at eighteen percent November, Bitcoin up about nine percent this past month, and it's at its highest level of the year.
Hi run, highest level since May of last year. So we're seeing it really continuing to hit its strident trading back towards that forty thousand dollars level.
Bloomberg writing that bitcoins chances of hitting forty thousand dollars top of mine crypto speculators they hit into the final stretch of the year, so they're thinking can it go even further, so something to kind of think about. There's a lot going on though, and we are definitely see as everybody expects, maybe the FED is done even thinking about rates cutting. The risk trade is definitely on that includes crypto. So what might twenty twenty four brings. So
let's get to it with our next guest. Corey Clipston is CEO at Swan Bitcoin. It's the bitcoin only accumulation platform, and he is back with us on Zoom from La Corey, good to have you here with Bailey myself.
How are you.
I'm doing well, Carol, and thank you so much for having me on and Bailey. Nice to be here with you as well. I missed Tim. That's my usual guy.
Say he's your guy, I will say hello. Talk to us about the activity you guys have been seeing as of late, especially as we've seen a move up. It feels like across the board when it comes to crypto.
Yeah, I mean we're in the good fortune to have customers who like to buy when the price is down as well, kind of the true believer crowd in the bitcoin space. But absolutely influx of new users and big spike in volumes. Really over the last two months. When you saw that rise that you guys were just talking about from twenty five to call it thirty five thirty six, and now it seems like we might have some legs. Feels very related to the latest round of news comeing
out of SEC whisperers about an ETF in January. But yeah, this move seems to have some legs up above thirty eight k head into forty.
Yeah, and we saw Bloomberg Intelligence expects that ETF approvals are starting mid January. Is that your expectation and kind of how does that change the game for bitcoin?
Yeah, it is probably my base case is that window that now seems to have been narrowed to January eighth, ninth, tenth, something in there. And that seems to make a lot of sense given all the signals that we've gotten out of the SEC and folks in the know. And I
think it changes quite a bit for bitcoin. And primarily the story that I'm looking at is for the past six years, from twenty seventeen through twenty twenty three, the top of funnel for people looking to get into bitcoin has been extremely noisy, polluted by all of the crypto marketing schemes funded by fifty billion dollars of venture capital
trying to essentially market and dump crypto token. And now you're replacing that with signal coming from the largest, most trusted financial institutions on the globe, who are going to be talking about the real signal in the space, which is bitcoin very distinct from the rest of non bitcoin crypto and that is now the top of funnel for bitcoin. And it's a decent product. It's an IOU into an ETF and it's kind of you know, it is paper bitcoin, but it is backed. They have to buy the bitcoin,
it's not futures based. And I think that's a great top of funnel for people to get into bitcoin and then if they want to go a little deeper and explore it and hold more. What we've seen historically is that as people buy more and learn more, they take self custody, and so they're going to graduate from that ETF product into holding real bitcoin core.
What do you know about who's buying the demographics of actually crypto buyers, bitcoin buyers in particular.
Yeah, so the buying public is, as you can imagine, very widespread. It's easier to make the pitch two gen z and millennials who aren't as encumbered by historical understandings and kind of receive knowledge about the financial system. But then when you look at it from an actual dollars in, it obviously skews toward the boomers and the gen X that actually have more money to be able to put in.
So you see more customers coming from the youth of the country, but more dollars coming from those that are more established and have more money today.
How much more volumes up? You said you've noticed some significant trends, but give us an idea. Can you give us some numbers? I'm just curious about.
Yeah, sure, because it gives us an idea.
You're kind of one of the kind of feel like ultimate risk trades, So it gives us an idea of kind of what's an investor's mind, because we just had what was it, money market funds?
Was it yesterday? Hit a record high?
So I'm just curious in trying to make sense of kind of the investment environment overall, not apples to apples.
First, I think I do have to address this idea of bitcoin being a risk on trade, because that's counter to how it's being marketed by the ETF guys. They're talking about it as a safe haven and risk off, so that narrative is being changed. And again it's all around. It's not an inflation hedge in the terms of CPI, but it's an inflation hedge in the terms of monetary inflation. It's a hedge against printing more money, the original definition of inflation. So I think that is a really interesting
thing to note. As far as volumes up about one hundred percent, I would say in the last couple of months, if you kind of just looked at September versus November, which we're closing right now, it was probably up about two x November over September.
Is there a risk that this can be a sell the news event, though, with so much excitement and that jump that you were talking about from October to now.
There is no such thing in any asset, including bitcoin, of a straight walk up in a straight line to some price that everyone expects in the future, because people will always front run that and get exuberant and then
it'll always crash down. There has never been a large bowl market swing in bitcoin that hasn't had a pullback along the way of forty or fifty percent down, So you know, I do believe that we are in the early stages of what is very likely, given macroeconomic factors and given domestic factors with the ETFs, et cetera, and just kind of more people understanding what bitcoin is, that we'll see another big bowl market at some time in the future. And I think it's very likely that it
happens over the next couple of years. But hearing that, we will absolutely see big drawdowns.
Too, you know, career one of the things, you know, kind of we kicked off talking about the expectations for a spot a US pot Bitcoin ETF next year, and so that has certainly given some enthusiasm back to the market. But I also think about the legal overhang, and we got rid of two big things SBF and FTX, and also Binance, big deal, big settlement. I'm just curious there's crack and still out there, right, there's some legal concerns.
I just wonder how you think about some of the legal woes or surprises that could still certainly creep up when it comes to this market.
Yeah, it seems that bitcoin stands apart from everything that's been going on in the crypto space, right, every single non bitcoin crypto runs the risk of being targeted as a security by the SEC in the United States, and any crypto platform that isn't playing by the rules, let's say as they exist on the books, runs the risk
of running a foul of a MLKYC violations money laundering. Essentially, if they've been too loose with their customer onboarding and monitoring, then it's very likely that they, whether purposefully or accidentally, have facilitated bad people doing bad things on their platform, as the DOJ has made very clear with respect to finance.
So really, in your view, bitcoin is insulated from those concerns and issues and bad actors, and that the clearing out is bullish for the token.
So if you're a bitcoin only company and you do things on the up and up just like any other company, you don't really have to worry about these sorts of things. As far as Bitcoin as a monetary technology and payment rails, it's technology, just like the dollar is technology, and bad people will do bad things with money. So they can use bitcoin, they can use dollars, they can use euros, you on and yen to make transactions. There's nothing you can do about that. It's just technology.
It's neutral.
What is you know, we just got about thirty forty seconds left here, Corey, as we wrap up, as you look ahead to twenty twenty four, you sound optimistic. I hear it, no doubt about it, and it's it is your book. But what is it that you do get concerned about when it comes to the crypto environment. What is the one possible downside that maybe might be top of mind for you? Just about thirty forty seconds.
I mean, honestly, the most interesting challenge I'm really looking forward to taking on is to figure out how to talk to people about our frenemies. Right, We're already being used, Our people are already giving webinars inside of these large trad five firms educated their people about bitcoin as they ramp up their knowledge and their understanding. But at the same time, we sell a competing product with selling real
bitcoin while they sell paper bitcoin. So I think just figuring out that dance and being kind of all on the same team and rising tide lifts all boats, and knowing that this is going to be very good for our business, but also understanding that as people get more deeply educated and more financially invested in bitcoin, they're going to want to own the real thing. And not an IOU, and they're going to want to pay for it once
instead of having to pay for it every year. I think that will be a winning message in the market as well.
All right, well listen, Happy New Year, Happy holidays, and look forward to talking to you in twenty twenty four. Corey Clipston of course, CEO. It's one bitcoin. Joining us from LA.
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.
Bailly Sauce story kind of was on my raidars I was getting ready to prep for this guest Bezos Earth Fun. They're going to put fifty seven million into climate food solutions that include developing low methane livestock to curb emissions of the potent greenhouse gas. Andy Jarvis is director of the Future of Food program, and he talked about this
in a video interview from Dubai Food Systems. They when it comes to growing, it, processing, distributing, consumed or thrown away account for about a third of global greenhouse gas emissions. Much of that footprint is linked to livestock farming, a major source of methane, deforestation, biodiversity laws. So it's a big contributor to climate change.
Big deal.
And that's one of those things when you debate almond milk versus regular milk. Is almonds take a lot of water, but also there are a lot of things that come out of feeding in kind of milking account.
Yeah, and I feel like that was a later discussion, but livestock is really front and center. COP twenty eight underway will be for the next couple of weeks, and with that in mind, we welcome in our guest Benjamin Walcon. He's founding partner at Muse Climate Partners. It's a venture capital arama use and company. Its website says it invests at the convergence of climate solutions and high tech applications.
He's on Zoom in New York City.
Ben, great to have you here. Tell us about your firm and your investment philosophy.
Thanks for having me on. At Muse Climate Partners, We're focused on areas where technology can help us decarbonize the economy faster. When we talk about the sectors that need to go to net zero, we're talking about electric power, transportation, buildings, industry, and agriculture. We need rapid scaling of technologies that can replace dirtier incumbents with cleaner solutions, and we're looking at investing in companies that can create those solutions in real time.
All right, so where have you been investing.
What do you think are some of the top investment ideas that you've really been committing money too.
Well, right now, we're really excited about the innovation that's happening in home heating. As we know, heating is a major cause of climate change. You have a lot of homes that are powered by gas and by oil, but there's this quiet revolution that's happening right now in heat pumps,
electric efficient systems that are much lower emissions. We're really excited to be backing a company called Harvest Thermal, for example, that's not only deploying heat pumps, but pairing those with smart controls that can draw power from the grid when renewables are online and match clean energy supply to home energy demand. So that's one of those examples where analytics and advanced software can be paired with a known climate solution to make it even better, a better value proposition
around it, and something that can scale more rapidly. So home heating is one thing that we're excited about, but there's a lot of other invasion across electric power and others.
I think this whole idea is really interesting when you talk about what you guys are investing kind of smart thermal, if you will, storage and heating. Having said that, how expensive is it for like a home to do it?
Well, it depends exactly on where you are. One thing that we're really excited about is IRA, the Inflation Reduction Act that passed a year ago a little over a year ago, helps with incentives for homes. But even with or without IRA, the payback of it is actually quite rapid because you've reduced your energy builds so dramatically by having such a more efficient system in place.
So payback in four years, five years, three years, two years.
It really depends on where you are geographically.
Interesting, well, Ben, I guess looking at your portfolio broadly though, what stage are some of these companies in, like how big are they are? They producing these products in a number of houses, are they still kind of early stage and really more in like that study phase.
Yeah, In in ventor Capital, the alphabet game has gotten a little bit jumbled, where series A, series B, series
C could mean a lot of different things. So we try to be very specific and say that right now we're investing at the cusp of commercialization, which means we're investing when companies have a great team in place, a great early product in place, and they've either signed up their first customers or they have credible, verifiable line of sight to those first customers, and they're looking for a funding ground that can help them accelerate and scale.
Well, with the funding environment that we're in, it's difficult for companies to get cash. How has that changed for you guys putting money to work? Just given where we are with rates as high as they are and they kind of dearth of offerings both publicly and privately over the last two years, I.
Would say that we're sort of blown away by the resilience of climate tech. Even with everything that's happening in the broader market environment, there continues to be a great deal of enthusiasm around the space. A lot of new dry powder sort of popped up in the last two or three years, and that really catalyzed a lot of entrepreneurial talent coming into the space. People want to be working on this solution. They want to be building things
that can help address climate change. So while I know there's some data out there saying on a quarter to quarter basis there might be some slowdowns, seeing as much talent and as many opportunities in the space as we.
Ever have, ben what about the EV space. I mean, obviously we know all the big players.
We've talked a lot about, you know, Elon Musk today because of a cyber truck. But nonetheless there's you know, global manufacturers increasingly have ramped up EV offerings, but it does feel like the demand part of the equation has fallen off. And I feel like we were just talking about everybody kind of almost a tipping point, but it just feels like, all of a sudden, there's a pullback. What are you seeing in that space?
You know, it's interesting because I have read those headlines, So I looked into the data, and every quarter so far in twenty twenty three has had higher EV sales than that same quarter in twenty twenty two. And I think we're just shy of four million EV sales per quarter right now. So the market is growing and you're hearing a number of individual auto makers saying that they're hitting new records. I think the Ford F one fifty Lightning was an example. So we're really excited about what
we're seeing there. From our standpoint at MUSE, Climate Partners were looking at earlier stage opportunities. So for example, we were an early investor in a company that's become the number one electric farm tractor in the world, that's Monarch Tractor. And we're also looking at opportunities of AI applications that can help large corporations and large cities scale and manage their electric vehicle fleets.
Ben, we got about forty forty five seconds left here. Obviously, I think everyone can agree that climate change getting away from fossil fuels is a big next step. But getting to those materials for batteries mining is poor, bad for the environment. What do you do with batteries afterwards? How do you strike a balance in terms of kind of cleaner energy but with the cost that come to produce those goods.
Yeah, the entrepreneurial talent that's come to bearing climate tech is also focused on this, and at MUSE Climate Partners, we've backed a couple of companies that are looking at the battery economy of the future. One of those is a company called nth Cycle, which I believe has been featured in Bloomberg a number of times, which is made a next generation factory to reuse and reintroduce right metals into the battery economy. Yeah, we've looked at a number of others as well.
Well.
Come back soon, love to continue this conversation, Ben Walcon, He's founding partner at News Climate Partners. Joining us on zoom in New York City, Carol Masser along with Bailly Lipsheltz. You are listening and watching Bloomberg BusinessWeek, and this is Bloomberg Radio.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern.
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The United States.
You know you'd be hard pressed to find a Chinese made car on the road. We're gonna talk about AI a little bit later on, so we want to talk a little bit about what's going on in the auto world. You might see a rare pollstar here or there, but in general, you're not seeing Chinese cars in the United States. But you travel Bailey to our neighbor to the south, quite a different story.
Yeah, and that was the big finding from a terrific story, terrifically reported story, basically diving into the fact that Mexico is buying up a whole lot of Chinese cars, in Chinese vehicles broadly.
Yeah, who knew, right, It's one of those kind of stories, which is what Bloomberg BusinessWeek does so well. Amy Stillman is Mexico business reporter for Bloomberg News. She writes about China's dominance in the soaring Mexican auto market the new issue of Bloomberg Business Week, which is on newstands, online and of course on the Bloomberg Amy, thank you so much. You are joining us on zoom from Mexico City, So tell us exactly what's going on and how dramatic it is.
Thank you, Carol. Yeah, So, what we've been seeing is that Chinese car sales have really been ticking up pretty much since the pandemic. So really twenty twenty one twenty twenty two, twenty twenty three, we're seeing a really big increase this year alone, for the first ten months we saw a fifty one percent increase in sales, and now car sales are roughly about twenty sorry, Chinese car sales are roughly about twenty percent of total sales in the market.
So it's really been a very, very big increase in the last few years. And you know, part of the motivation for that is that, you know, when you did have the pandemic, you saw a lot of the Western carmakers running into difficulty with inventories and issues around chip shortages, and the Chinese automakers were really able to, you know, come in there meet that demand and really have been meeting a lot of consumers expectations on price and improvements and quality as well.
And how how has this shifted though, I'm looking at a terrific chart that you have in this story that China basically was not even remotely a player by any stretch just a few years ago.
Exactly exactly what we can say is that the Chinese automakers have very aggressively been moving into into Mexico. You know, it does give them a foothold in North America. It has been traditionally very very difficult for the Chinese to get into the US, so the fact that they have been able to really expand in Mexico without much resistance has really been a boon for the for the Chinese
car makers. At the same time, you know, what we're seeing is that in China, while you've had this big surge of electric vehicles, the regular gas powered vehicles aren't in as much demand, and so there's actually an oversupply issue. So a lot of those cars, the gas powered vehicles are now coming over to Mexico. You know, you've seen real differences in price, which here in Mexico that's a
very big deal for consumers. They don't have as much access to financing as consumers in the US, for instance, and so that's been very very attractive as well.
Yeah, it's kind of interesting that it's all gasoline powered vehicles when we are so obsessed with the ev world. But that's not what's happening. But I get it in terms of the market. But you do wonder if ultimately Amy gives China and Chinese auto manufacturer is kind of a leg up as the world increasingly moves towards evs.
That certainly seems to be the next step. You've seen also Chinese EV makers, like the biggest Chinese EV maker, by D, has started to uh sell cars here in Mexico, electric vehicles here. They've been negotiating deals with some of the biggest Mexican conglomerates to to sell fleets of electric trucks.
They've also uh you know, launched a new deal with a big retailer over here Liverpool to sell their cars and as well as uh you know, install charging stations, which is really speaking to you know, some of the bottlenecks in Mexico around charging infrastructure. So certainly there's definitely a push by the Chinese in the electric vehicle market as well.
And Amy, do you notice the shift. I feel like when I see a Rivian, I'm like, oh, there's a Rivian truck, or if I see Lucid Air it stands out to me. Have you noticed really this penetration, this jump in China made cars.
Well, you know what's very interesting here is that if you go to get an Uber, there's a good chance that you're gonna be in a BYD electric vehicle, a company here. Vemo has partnered with Uber and using BYD electric vehicles to transport people around Mexico City. So if you're in the city, if you take Uber, yeah, there's a good chance that you're going to see the penetration of some of these electric vehicles from the Chinese car
makers Jack as well. You're also seeing more of these cars on the road, So there's certainly certainly a noticeable presence.
So have you you've written in one then if they're primarily ride sharing, did you like it?
Yeah, yeah, you know, they're they're very uh, they're very interesting. I spoke with the driver. She told me, you know, it's great because you know, the vehicle won't start until you buckle up, so it's a nice safety reminder. And you know, in general, you know, they're very they seem like very efficient, very very good cars.
It does sound like that China has to watch. We just got about twenty seconds left. Competition Amy is coming from US manufacturers, Global manufacturers for Mexico.
That's correct, that's correct. There are a lot of companies, Western companies that are looking to build plants here. Of course, the biggest one is Tesla. There's a lot of expectation that that Tesla will launch in Mexico in the next few years, and people are very excited about that as well. So the Chinese car makers will certainly need to watch for the competition.
Very cool.
Like I say, it's one of those Business Week stories is like, wait, what I didn't know this was going on? Amy Stillman, thank you so much, Mexican business reporter at Bloomberg News joining us on zoom from Mexico City. It's in the new issue, on newsstands, online and on the Bloomberg.
This is Bloomberg Radio.
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All right, everybody, just about eighteen minutes left in today's trading session. And I'm not sure if you saw this Bailey about Bloomberg Opinion columnist former CEO PIMCO Mohammad al Arian writes today on the Bloomberg on how uncertainty looms over this November to remember more specifically how investors and Alice risk underestimating the challenges ahead during the period of understandable market euphoria. I mean, it's been quite a run up in November.
Fascinating piece from miss el Aery and the interesting thing, Carol, to your point, we saw the dow s and p Russell all up about nine percent. ARC. Remember ARC, ARC had its best month on percentage basis e ever thirty one percent. I mean massive rallies cryptos, crypto, Bitcoin is continuing to rally, and we.
Started off today pretty red hot. I'm curious what our next guest has to say.
I know, and with that in mind, let's get to the Drive to the Clothes with Carol Schleife. She is the CIO at BEMO Family Office. Back with us in the Bloomberg Interactive Brokers studio. Carol, how are.
You doing great?
It's lovely to be here and I love to see the activity in downtown New York.
It is nice, right, It's really great.
It feels like the city is back in a big way.
Especially on a Friday. I feel like my commute was busy ghost Town. Then I get to the city coming from the New Jerseys that I get here and everyone.
There are a lot of tourists here for the weekend Christmas in New York. What's not to love?
It's the best.
They just let up the tree here.
Well, so let's say, you know, Mohammad al Arian seems to be a little like, don't get ahead of yourself.
How do you feel about that? Do you agree with him?
Yeah?
I would definitely agree with him, And especially it was listening to the lead in about Paul saying we may not be done and we're going to keep them highing at the markets, like, oh no, they're done, We're actively.
We're a little confused by that.
Again, I actually think the only analogy it can come with is when my teenagers sort of go, mom didn't say no, she said maybe yeah, yeah, yeah, and and maybe means yes yeah.
I was going to say with that in mind, So that's more of like because he was balanced, that inherently is Dubvish.
Yeah, exactly. And I think the markets, being discounting mechanisms and looking ahead, are really trying to get towards it endgame. We think it's premature. We do think they'll start to cut at some point next year, definitely not in the first quarter, and there's a lot of first half though my own suspicion of our house view is we're not
going to peg it that close. But my suspicion is it's later in the year because Chairman Paul can't be very happy with the fact that the tenure came from five and is down now flirting with four point two, because they need they still need that inflation. The core inflation is still running it twice what they wanted to run.
I laugh because I feel like I've certainly been talking about this other people.
I'm like, don't worry, you'll get there, you know, refinance it.
Like all of a sudden, we're watching the rates come down, and I do wonder what kind of activity will come out of this.
And I do think because when you look at the demographics of it, there's a whole bunch of pent up demand demographically, and if you could get the prices of the houses to come down, because a year and a half ago, if you had said, we suspect they'll see a huge upticket mortgage rates hit six percent, but right now, if they hit six or six and a half percent, I think you would get a lot of people coming
up out of the margins. Because there's you know, when you get to the point where you start having kids, or you have more kids and you out grow the house and you want to be a bit philly.
I just bought at six and an eighth and felt like an idiot at the time, but now I feel like, if you're lucky, I guess I don't really have.
To I mean, here, I'm dating myself. My first mortgage was twelve percent, and a year later I thought I died to heven when I got to refinance at eight.
Do we get anywhere near five rate cuts next year like the market's pricing in.
I don't know if we get five rate cuts, but I think what the market will focus on is not the number, but the trend and the fact. And I think that's what the markets are really key in on. But they got a bit ahead of themselves. We suspect, just especially in the near term, both stock and bond markets, with the exuberance you've got, because you do have a lot of head ones that you're facing, and by the time we get to January February, we're still facing again.
Can we keep the government open top to bottom?
Do you think a recession's part of this?
And I guess my other question is can we have a recession with a decent job market, and then is it a different type of recession which maybe is still support.
Of See we've never this trade.
Yeah, we've never been in the recession camp. We said soft landing from the beginning on and continued to talk about that and actually done when the whole rest of the world jumped on soft landing. We were like, oh, but there's a whole lot of things out there now that might make this a little rocky, but there you do have the underpinnings. The thing that goes unrecognized a lot is we have so much fiscal stimulus coming into
the system still. Now, if that were to get reversed because you had regime change, if you will, in terms of after the elections next year, and you start appeeling some of that back, that could put pressure on it. And we do have to figure out how we're going to pay for all of it, because that you know, those concerns haven't gone away. They're a bit easier if you don't have five percent ten years, you've got four
point two in terms of refinancing the debt. But we were at the point where we were adding a trillion dollars just to service the debt.
And one question I have looking ahead to next year. Nasac's re turning forty seven percent this year, sm P twenty two percent, equal weight just eight, Right, what does the market look like in twenty four given the dispersion we saw in twenty three.
We do think you get more broadening out. You have to in order to sustain this ready, aren't we Yeah, we are. And you saw it hinted at in the spring, because through May it was the Magnificent seven, and then in June into July you had a broadening and then you had three really bad months and you're getting a
bit more broadening. But to your question about recession, we have had rolling recessions underneath the surface, and we've seen periods like that before, and I think if you step back from it too, it's also indicative of the fact that when you've got secular change going on in the markets, in terms of initially I think people thought we were going to go back to zero percent neutral rate, We're not.
That was the anomaly was the last ten or twelve years, and so when you go through a period where you're trying to reset expectations and anchor to new things. You get a lot of this rolling around like we had, where you get one trend that'll play for four to six weeks and then it'll pull back and it'll go
a different direction. But if we can get this leveling off in here where the economy does okay, interest rates are reasonable and people have pricing power, I mean the key will be to watch too in the next couple of months with what happens with the consumers, because when those credit card bills start coming due in January, the heads yeah.
Buying all the buy now, pay lead later, which which you know, our intelligence analyst was saying that people feel confident that they can pay it off in the couple of months before rates.
But it's just kind of interesting.
Yeah, it is nerve wracking. And I suppose if you get a December bonus and you're putting a few of that on, I get them tucked.
Away early, but you can take care of it.
But I've also heard a lot of the stories too about trying to get you know, the retailers are trying to get that spending early because they're not sure people are going to be able to sustain it through the season, and it's been a long time since I've seen the forty to fifty sixty percent offers starting around Halloween continuing oh only through Black Friday. Oh, we'll extend it beyond it.
I agree with you.
The emails are content here real quickly twenty five thirty seconds. You like industrials, healthcare, technology, technology? What do you like in technology?
Just quickly? I'm curious.
I think they're figuring out the impact and where artificial intelligence is going to play this piece of it, cybersecurity, the buildout of infrastructure, it's all undergirded with technology.
So it'll continue to be a themed next year. Great, no doubt about it. Thank you. So do you have a last one?
No?
No, I was just going to say, yeah, I guess are you looking for like kind of tangential second para derivative AI play?
Yeah?
I think so, especially because it's really interesting when you think through what will it do for diagnostic imaging so you don't have a radiologist looking through.
I love that idea experience. Yeah, I think that's going to be Powerful's huge. Carol's life, Happy holidays.
Mary Christmas, chief investment Officer at VIMA Family Office and Studio, This is Bloomberg.
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