The State of the Cloud

You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio, or watch us on YouTube search Bloomberg Global News. At the start of the year, Bloomberg reported on how the global cloud computing market is expected to reach approximately when and a half trillion by so growing at a compound annual growth rate of nearly sixteen percent. This according to a study by grand View Research. Really pleased to have with us this afternoon, Hillary Hunter,

Chief technology Officer at IBM Cloud. Hillary joins us via zoom from New York City. This afternoon, Hillary, how are you. I am great, Thanks for having me. Thanks so much for joining us. Hey, before you get into the nitty gritty of this report, that you guys did with Harris Poll,

which I think is really interesting. I want to get an idea of the landscape right now because Caroline I talk a lot about you know, cloud spending and tech spending, and I'm wondering, is the volatility that companies are facing higher input costs is that right now affecting their cloud spending. Yeah, you know, I think it's driving a really important conversation that relates to this pole we're going to talk about, which is really looking for value stream generation out of

a cloud transformation. UM. Folks are looking because of the factors you indicated to do something other than just stick the website on a cloud or run the HR application on the cloud. They're looking for where can cloud actually help me address elasticity and grow my business faster and save costs. And that has to do with moving more substantive pieces of a business to the cloud. So, you know,

it's interesting. I just want to kind of push a little bit out on Hillary if I can um on what tim ass because I think one of the things we're trying to figure out where this economy, this global economy goes next, is you know, technology spending so important to companies because I have to, and also it's a

great way in terms of productivity gains. So are you seeing though before we get a little bit deeper into this report, are you guys seeing any slow down or push back UM when it comes to companies and their willingness to spend on anything and everything to do with the cloud. Yeah. Actually, you know, we continue to see strong glow growth and cloud consumption because it is that

part of transformation. It's a part of being able to change a business reach more customers, and so actually, I think in most cases it can actually be a solution to those types of optimizations and cost savings that enterprises are looking to find these days. So interesting, I mean, is it is it seen as like, is it seen

is essential rather than discretionary? Yeah? You know, you you spend to keep the lights on, You spend to address, you know, in a regulated industry what the regulators need you to do, and you spend to continue to run your business efficiently. UM find opportunities for automation and other things like that, and so it really is critical to continue to modernized it in order to be able to

address times like these. When it comes to security, though, I think there is you know, as we've seen some really massive security lapses UM globally over the last few years. How much is being maybe pulled off the cloud and rather keeping you know, being kept more close to home. UM, what are you seeing between that mix of up in the cloud versus you know, on home territory in your

own kind of hardware. Yeah, you know, it's it's such an important question, and it's actually relates to this this pool that we just put out this transformation in Ducks because over of participants and respondents to this pool said that hybrid cloud, which is actually a little bit different than how you just maybe accidentally described cloud. A lot of people think of cloud as this this place that you have to move things to UM, and that can

sometimes be scary. We need to really seriously think about the security, the compliance, the data privacy, data protection in that place when you're moving things to a cloud. But hybrid cloud technologies that we do now we we have

over four thousand customers with IDMS hybrid cloud approach. Hybrid cloud enables you also to use the efficiency of cloud and the deployment optimizations and even the operating model of cloud on your own premises, so you don't have to move the data in order to benefit from everything from automation to AI technologies to the efficient development mechanisms that cloud brings in place. And so hybrid cloud is now increasingly being viewed as a solution to that that challenge

that you mentioned around data protection. So is it about data protection or is more so than it is about speed or latency? I mean, is it is it all because of data protection? Yeah? You know, it's interesting. We see also with public cloud UM that data protection is an increasing topic. Even though you might say, oh, cloud is about elasticity or optionality or global expansion. UM. The data protection factor here is really important because every enterprise

has a responsibility to steward their data. You know, you and I as as as consumer as UH as customers of a bank or retail organization. We want our data protected. And in many jurisdictions, UM organizations have an obligation legally to protect their clients data, not just the reputation with the clients, but also legal and from a regulatory perspective.

And when we look at this then in a cloud conversation, it's important both to have hybrid cloud where you can choose to continue to consume cloud technologies while the data remains on premises as well as what we referred to as industry clouds, where in the public cloud, like with IBMS Cloud for financial services, you can have industry leading data protection and data privacy policies even when deploying in

the public cloud. So then you really have optionality. You can have cloud on premises or you can have it safely in public cloud as well. Hey, you know, in your role as chief Technology Officer at IBM, I do under Hillary too. Though, Like kind of going back to where we started a little bit of macro um what kind of environment are you guys getting ready for them? I know we talked a little bit about what you're seeing from your customers, but it is kind of a

tricky time, uh. And you know, we see inflation continuing to be persistent, Supply chains have gotten better, but we still hear about component problems in various industries, worried about a global economic slowdown. How would you best describe kind of our environment? Yeah, you know, I think it's an

environment with a lot of opportunity. Like we're talking about at the beginning, UM cloud in technology, everything from you know, AI technologies to business process automation to the elasticity of cloud. You know, if you don't want to run a business anymore, scale down on the consumption of the I t you you didn't invest in it on your premises, you can scale it down in the cloud. UM as well as continuing also on premises to adopt, you know, faster, more

efficient technologies. All these things are key parts of you know, addressing you know, where enterprises need to be thinking these days. And I think we're just continuing to invest in those those core technologies that are going to help folks UM, you know, go through this this period that we have coming up successfully. I'll also comment you mentioned supply chain UM.

The topic of risk in the supply chain also from a cybersecurity perspective UM is one that definitely came up in this this index that we just released UM, and I think there's there's a lot of really important work going on in that area as well. Hey, Hillary, before we let you go, I mean, you know, we hear from a lot of different companies about the cloud, about the hybrid cloud. When a company is considering who to go with, an IBM IS is one of those choices.

What are the competitive advantages that you offer, Like why choose you rather than you know, another service provider. Yeah, you know this, This index that we just released of over three thousand global leaders cited skills, cited security, and cited compliance as three of the top areas for consideration. And at IBM, that's really what we're trying to address. It's a journey. It's a journey to get to the cloud.

Need to partner with someone who, like IBM Consulting, has in house skills to both look at transformation, find those high value applications and get you to the cloud. You need to partner with someone who both in on premises UM, you know, with with heritage environments as well as with cloud environments, is focused on security and compliance and data protection. And you need to partner with someone that knows your industry.

IBM has long been the I T provider to you know, banks, insurance companies, Tauco's, you name it, healthcare, government UM and so as we work at this next generation of I T, we're also that partner. All right, good to check in with you, and here about your report. We got around Hillary Hunter, chief technology officer at IBM Cloud with us via zoom from New York City. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim

Stinovic on Bloomberg Radio. So there's a story on the Bloomberg Today about how climate change made Hurricane Ian's most extreme rainfall about ten percent worse than would have been without two centuries two centuries of greenhouse gas pollution. This is according to a first take analysis of the storm

by two US climate researchers. Their rapid analysis, which they shared on Twitter, looked only at rainfall and not other critical climate metrics related to hurricanes, such as strength and toesifications, sea level rise. But you know, we know that these storms may be not more frequent, but their intensity has definitely wrapped out because of climate change, and that's something that we obviously need to think about. We've got somebody with us who thinks about this stuff a lot, and

Jason Few is CEO of fuel Cell Energy. It's a publicly traded company. Uh. He joins us this afternoon on the phone from Danbury, Connecticut. Jason, how are you? I am good, Thank you very much. How are you doing? To him, We're doing pretty well. Um. Can you explain how fuel cells work? Because I think a lot of people. Um, you know, we understand batteries, we understand internal combustion, but fuel cells it's something that I think is not necessarily

on all of our radar. It's certainly not on mine. Sure, So I think if you think about it and its most simple terms, and we just use batteries as an analogy, Uh, you know, batteries you put energy in and then you drain it and then you need to recharge the battery.

The way you can think about a fuel cell is that we use an input feedstock for the fuel cell, and that allows the fuel cell to run and operate on a continual basis, you know, seven days a week, twenty four hours a day, without the need to recharge the battery. And because it's a fuel cell, it actually uses a chemical reaction to actually take a fuel and air and effectively make hydrogen and then to use that

hydrogen to produce power. And so it works very different than a traditional combustion engine that you know takes and and basically combust the fuel. With a fuel cell, the fuel is not combusted, so you don't produce things like socks and knox and other particulars that play very heavily on you know climate as well as air quality, what are the byproducts that it does end up releasing that it does produce, So it really depends on what is

the actual feedstock that you're using. So in a case where you know, we're working to commercialize our solid oxide fuel cell, and in that case, we could use hydrogen, and that hydrogen could be made from all renewable energy sources. So in that case, there are no byproducts that are

produced other than water, you know, from the hydrogen. The second way we're if we're using a traditional fuel, let's say a biofuel or renewable natural gas or even um uh natural gas, then the byproduct is you do have some carbon emissions. But if you're using biofuels are R and G right, that's considered carbon neutral, and again there's no combustion of the fuel uh. And then we also have the ability to do things like carbon capture or what we refer to as well as carbon separation to

significantly reduce or eliminate those carbon emissions. And when you think about it in total, when you when you look at fuel cells versus renewable energy sources, let's say like wind and solar, because the fuel cells are more efficient and they run twenty four by seven, and you think about just overall avoided emissions because you know, you actually end up with greater emission reductions with fuel cells in most cases than you do when you're using renewable energy

because you may only be getting twenty to thirty percent efficiency from those resources and then you need to get power from somewhere else. So, you know, it's interesting we all have a lot of conversations about what is ultimately the solution um to climate change, and as we move towards an alternative energy you know, uh, world if you will, and hydrogen doesn't. It doesn't it feel like there's momentum

building um in general. But talk to us about some of the concerns when it comes to fuel cells, and some of it is the cost, the durability, some of it is concerns about flammability. Feel so, what what is it the thing, the nut that you feel like we still have to crack before we get kind of mass adoption. Well, that's a great question, and I feel cell Energy we do two things as a company. We decarbonized power and we produce hydrogen. Those are the two things we do

with our platform technology. When you think about some of those concerns or areas that you raise. You know, we've had commercial available products since two thousand and three, and in fact, our first commercial fuel cell was sold actually in Japan to the Cairn and Beer Company using biofuels, So you know, it just shows the fuel flexibility of the platform when it comes to hydrogen and some of the concerns that you know get raised around hydrogen. You know,

hydrogen is used widely, you know, around the world. You know, ninety minute metric tons of year of hydrogen are used. There's some forecast that suggests that you know, of the world's energy will ultimately come from hydrogen, if not greater than that. We tend to think that hydrogen is going to be an important part of the solution, the same way we think carbon capture will be an important part of the solution to achieving the one and a half

degree scenario in terms of climate change itself. And and from a safety standpoint, like I said, you know, hydrogen widely used today, it's very safe and unlike a battery, which contains everything that you need inside the battery to actually start a fire, that's not the case with hydrogen. So it's actually quite today. So why isn't adopted more widespread?

Why will it maybe only of energy um production in the years to come, Why not more Well, I think part of it is, UH, there's a cost question right in terms of this this desire to have green hydrogen.

One of the things that I'm really excited about is the move not only in the United States, but I'm I'm seeing in countries around the world and the conversations we're having and in the conversation I actually just got to participate in UH in Pittsburgh with Secretary Grant Home and energy ministers from around the world at a CEO Hydrogen roundtable. The conversation is shifted from using colors to really talk about carbon intensity, and I think that's one

big change that's going to help drive accelerated adoption. Another change or thing that's happening that's going to help drive adoption is the work that you're seeing that's going to get done as a result of the i ra A in the United States. You have similar legislation in markets like Korea and Japan and across the EU. And we've seen this movie play out before. We saw how incentives, whether it's I T C production, tax credits, those kind

of things really help drive the cost curve down. We're gonna see that same thing happen with fuel cells and with hydrogen as an effective way to get us to the cost that everyone's targeting, you know, which is you know, as low as a dollar a telegram for hydrogen, and that's going to make it highly competitive. And I think as you look around the world to day and you're

seeing increased energy prices, those sparks spreads are narrowing. Uh and and so I think you're going to see adoption start to accelerate with hydrogen as one of the answers to solving this climate crisis we have today. From an infrastructure perspective, when it comes to generating power, explained to us how you take a facility and allow it to

create power using hydrogen using fuel cells versus using fossil fuels. Yeah, So when you think about um an input fuel, and you think about hydrogen, hydrogen just becomes the input fuel that we would be using with our solid oxide platform for instance, in which we would take that hydrogen and we use that hydrogen as the feedstock to create electricity. That hydrogen interacts with the fuel cell right, and and the chemistry that we use in this case of solid

oxide technology to produce that power. And if that hyd ygen was produced by you know, a zero carbon source of electricity. Let's say you're using electrolysis, so you're taking electricity and water and you're converting at the hydrogen, then you're using that hydrogen to produce power. That hydrogen has zero carbon intensity, then the power being produced from our

platform is zero carbon. But we also have the ability to use blended hydrogen and natural gas for example, which even lowers you know, the carbon intensity of the fuel in that case. But in all cases, whether it's hydrogen, renewval, natural gas, or bio fuels, that serves as the input fuel that the fuel cell needs to then convert that to power, whether it's for the grid or for a commercial industrial customer. Uh and delivering that power as a as a product. Hey, I'm curious, Jason um about the

business and the business outlook and the growth. And I know earlier this month you came out with your latest update quarterly update. I think there was a wider than expected loss for the quarter, strongest quarterly revenue in five years. Um, and you guys talked about an increase in marketing and consulting costs because you had raised headcount for rebranding, accelerated

and accelerating your sales and commercialization efforts. Give us some more color, if you will, in terms of the business who's buying um You guys have you know customers, certainly in the energy space and the corporate space, But give us an idea of where the growth is coming from

from your business. Sure, so are the customers that we target largely cut across the utility sector where we're providing grid based power, and we might be providing that power purely is just a power resource on the grid, or we might be providing that power and using the thermal energy where we might be connected to a district heating system and we're providing that thermal energy in addition to

the power. Or we might be an in a microgrid configuration where we're providing power to the grid and in the power outage, we go into what we refer to as island mode and we provide power to a dedicate a set of resources, keeping those critical resources powered while

the grid is down. We also serve commercial and industrial customers, and in many of those cases we're providing power to those customers, and again we might be providing the thermal energy such that they're using steam from our platform in their manufacturing process. Uh. And we also have the ability

to do things like provide carbon to those customers. So when you think about carbonated beverage companies, are you think about food processing where carbon is really important to not only processing proteins, but then extending shelf life by keeping those proteins chilled. Uh. Those are always in which we

leverage our platforms to deliver value to our customers. In addition, the hydrogen and we're going to projects for Toyota today we will deliver hydrogen to Toyota Power and water all from the same platform at the Port of Long Beach in California. Go go ahead. A very quick question. I just want to know about price increases, Jason. When it comes to the commodities that you actually use, are you seeing the prices come down at all? We were seeing

different reactions to different commodities. So for example, if you take nickel as a commodity, we've seen price decreases there. We're seeing obviously price increases for natural gas. So as we look across our supply chain. We've had a very focused approach on managing those price increases to minimize the impacts for us in terms of pricing to our customers. But we are seeing some price improvements across the supply chain. Well. Really great to check in with you and really appreciate

your time. Jason, take care of Jason fu chief executive officer at fuel Cell Energy. They are a one point for a billion dollar market cap company and great to have him join us from I believe their corporate offices in Connecticut. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. We talked about earlier how we buried the lead at the top of the show because Kim Kardashian it is

among the most red storaking news. We talked about with our TV colleagues recently about her one point three million dollar SEC fine. Uh. We also know the chairman of the SEC weighed in on it earlier, but we'll get to that in just a moment. The medtime, we want to talk to our own Scarlet Food. She is a Bloomberg Business of Sports host. You also know her as a Bloomberg Quick Take correspondent. She's with us right now in the Bloomberg Interactive a broker's studio. Scar Uh, what

do we need to know about this fine? Because you know, I hear one point three million dollars in the context of any Kardashian and I think to myself, that's like the change, That's like the change they find in the couch. Well, yes, and she also did not admit or deny any wrong, but she paid, she did pay up, and she's cooperating with the sec. What's significant here is that she got paid two hundred fifth eight thousand dollars by theorym of Max to tout emacs tokens, and so this fine is

five times what she got paid. So it's significant in that regard. We have a question for all of you, both of your have you heard have you heard of this spoken before? Carol? You know I had neither. So I'm thinking to myself, this was not money well spent because we didn't even hear about this. That's a good point, and she posted this on Instagram to her many millions of followers. But what's interesting here is that's a big spack.

Go back to that you said she was paid two dollars and she's now paying a fine at one point there one point to six millions, so five times the amount she got paid. But what's interesting when I talked to Bloomberg Intelligence's senior policy analyst Nathan Dean about this is the way that the SEC made this announcement, because they often will penalize someone or um accused someone of touting something like a cryptocurrency and announces enforcement actions on

their Twitter feed. But they did this with a lot of splash. They did it on a Monday morning before the market opened. They had like a splash here than usual Twitter post with a video on YouTube that went along with it, explaining why investors need to be protected. So they kind of went out of their way. Interesting, okay, but there's a distinction here. I think that's important. This was UM she was pushing a security or what. I don't know. I mean, it wasn't a lipliner or something exactly.

I think, you know, Caroline made that point on on our simulcast earlier, and I think it's an important distinction, right because she's not you know, we see, we see I don't know. Depending on who you guys follow on Instagram. But it's like anyone who has a following of like twenty or thirty thousand or more can participate in these programs where you know they're essentially being paid to post

something and at the end they say hashtag AD. Well she did do hashtag AD, I believe, but she needed to say that she was being paid for this promotion and that's what was missing here. Gary Ganser is all about transparency and disclosure, especially when it comes to crypto assets. And you mentioned a good thing an important point which is is it a security? Is it a not a security?

Because bitcoin and ethereum ether sorry, are not securities. There are commodities, but these other digital assets, the SEC argues our securities, which means it falls under the SEC's purview.

I know we're getting really technical, rain hurt, No, but it's interesting, especially when you start to get into you know, people will follow, you know, celebrities who are tatting certain financial investments, and you want to make sure the disclosures are very, very and that's what Gary Gunstler is saying. They're doing by making sure that celebrity pitchmen and pitch women know that they are influencing Uh, investors, ordinary investors who may not have all the information that others do.

The sophisticated investors, they need to make really clear. Hey, by the way, I'm getting paid for this, so you know, you move forward, be careful, and you know, move forward with caution. Okay, another important distinction here. We're not talking to Matt Damon. What was did he do? Crypto dot Com? I don't remember which, Yeah, for an exchange Larry David during the Super Bowl, you know, all these celebrities. That wasn clearly different than then what the SEC alleges that

Kim Kardashian did. Yes, that was different because I mean, I think we get really technical here, and I wouldn't be surprised if lawsuits start popping up with all of this, because we've already seen lawsuits with the SEC versus Ripple. But what the SEC is alleging here is that all she needed to do was say that she was paid to promote this, And I think if you look at an ad with Matt Damon, it'll be clear that he

was paid to to promote something. So she, when she posts on Instagram maybe made it look like, Hey, a friend told me about this. I just want you to know right right, I feel like socialists a weird space. It's very the lines are blurred, yes, and people play on that exactly. And I am curious about the momentum that this token god as a result, like we I

don't know if we know that or you know, yeah. No, it did get a bit of a pop after she published her post, and then it continued to fall, So it's it's not as if this was a sound investment, if people were investing in it. So the big question is what what does this mean moving forward for the SEC and for celebrities endorsing things right now? This was definitely a shot across about from the SEC from Gary Gunsler. It was a sign that the SEC intends to crackdown

on crypto. And what Nathan Dean of b I told me is that, um, what Gary ginst are saying to the crypto world is you need to come in and register. You need to register as an exchange or a broker, and then we can move forward. But the crypto world is very resistant to doing that. They feel that today's regulations do not work for the crypto, which is decentralized bitcoin and ether commodities. That's a done deal. You know, we're not securities either, so we shouldn't have to play

by these rules. Um and in fact, we should be treated as commodities where enforcement is a different beast completely. It's the wild, wild West, and we see regulators continue to try and figure this out, right, and you just want to make and it's a it's a mess because you look all over the world and it's just as patchworky as it is here. Kim Kay, I think she had a bad day because of this. No, I don't

think one point three million dollars matters at all. I mean, she her lawyer said that she's cooperating and they're doing everything they can to move forward. Yeah. I'm not a lawyer, Yeah, but I feel like we need to be when we talk about this. No, I need to disclaim it that I'm not a lawyer, and there's a responsibility to people, especially when you talk about any kind of investment, right or investment. I mean again, Matt Damon clear that he

got paid right, Yeah, yeah, yeah, all right. I can't talk enough about kim Ka scarlet food. Thank you so much, Bloomberg Business of Sports host on Blomberg Radio, Bloomberg Quick Take correspondent and anchor here in our studio room a journal. Yeah, but you let me drive? No, no, no no, honey, please, I'll do I want to drive. It's a good question. D This is the Drive to the Globe up on

Bloomberg Radio. All right, we are counting down at the clothes was on this Monday, the first trading day of the fourth quarter, October two, and we've just got about ten minutes left to today's trading session. So let's talk about the markets. Let's get to our drive to the closed. Guest, we've got Abbe Deshpondi with us, the founder and a chief investment officer at center Stone Investors. Abbe joins us once again on the phone from New York City. Abbey,

it's been a while. It's good to have you back with us. How are you. I'm doing great, Thanks for having me good? Is um? Are we out of the woods? I mean, today's trade certainly seems to think that. Uh yeah, investors are pretty happy today. Yeah, we're picking above the trees today. Um. But if you know, if we kind of look back at the starting conditions for two, you had, um, the was you know, more overvalued versus its intrinsic value.

Since before the global financial crisis, you had fundamentals kind of weakening, and you had the catalyst, which you know, for many years now it has just been monetary policy working against the market and continuing to do so. Right now, with a decline that we've had, valuations obviously that it looks better, but the fundamentals are still deteriorating, and despite the um optimism from today's economic reports, the monetary policy is likely not to change anytime soon. So I don't know,

I'd say we're still in the woods. Well, especially if you listen to and believe kind of the consensus that we are hearing, you know, from FED policymakers, despite maybe similarly signs of something like your vice chairman, little Brian Brainard, you know, watching kind of some of the broader impacts maybe of the tightening that we're getting here in the United States, but in general, everybody is saying, right that, okay, we're gonna get high rates, We're gonna get igh rates.

It's all we're hearing. And at that point that's really truly what the market has to be understanding, Yeah, higher rates, and of course you know, no one really knows. I mean a little over a year ago that we thought that interest rates going to stay We're gonna stay low for you know, an extended period of time. Um. And so the next big question mark is one, does inflation you know, get to a point where the Fed can stop raising rates or even reverse And that's you know,

just doesn't look like that happen anytime. I mean, inflation did peak according to the PC number that the Fed looks like inflation peaked in February and the core rate. So I mean, one could argue that you know you're you're having that disinflation. Um. The big question mark is, well, words it go. And so the stickiness of rents and some of these underlying kind of you know, uh inflation factors that don't really move that much, UM, suggests that you know you're going to have a pretty you know,

an interest rate policy. It's gonna be fairly restrictive for for you know, at least another six months. But that's just my guess. No one, like I said, no one really knows. Hey, Listen, we've often talked small cap space

with you. UM. I was looking at the Russell two thousand and it is down about from that high back in November eight or Gina Martin Adams talking a little bit about UM maybe some more downside, I believe she said, for that space in particular, how do you see the small caps which are so closely, of course tied the Russell two thousand, tied to the US domestic economy. Yeah, it's tied to domestic economy. It tends to be a little bit more cyclical. There's more banks. There's a lot

of banks in there, UM and financials. So really I think that um it will continue to you know, soften. I guess the indexes. I don't expect any a huge run up until the US market kind of you know, show some signs of stabilization or contradicts the worst case scenarios that people are trying to or seeming to factor in now. And that's that's the good news, which is that as you know, recessions their markets, it's it's just part of the landscape. They happen frequently, and you know,

we survived and we get through it. The big um, you know, the big event that we don't want to see is a financial crisis. UM. And right now the banking system is in very good shape in the United States. UM. You have loan loss provisions are an excessive loan losses and people and here and you in your end in Europe, the banking you know, I guess executives are taking some precautions now so that there's not such volatility in their

and their earnings UM and their capital positions. So the fundamentals, as far as um, the groundwork for a new bull market are there, you just don't have I don't think the valuations are quite there yet. And he's certainly don't know the catalyst yet. But I don't see. I don't see you know, a huge collapse or a calamity or anything like that. Like I said, this to me, just looks well, partly it's just a um, you know, we're still in the after shocks of the COVID responses, and

beyond that it looks sort of running the mill to me. Interesting. So so the people who say this time is different,

you say it's not. Well, it's always different that I mean, you know, this time is very different because we have so many of these external factors that are not related to you know, just a normal economic cycle, right, I mean, the feder Reserve at this point, they're just they're correcting for the previous corrections, you know, pilot induced oscillation, and that that can create its own unintended consequences, like it

has inflation, for instance. But um, you know, the economy, it's a dynamic organism and it's adaptable and it will adapt to whatever the conditions are and it'll it'll go beyond that, but it takes time. But you said, fundamentals are there for a new bowl market, we just don't have the catalyst. And what else, don't we have evaluation? You know? No, In other words, you don't have the situation where like financial crisis, where you have massive amounts

of you know, leverage, you don't have. Corporations aren't massively leverage. I mean, there are leverage, of course from all the buy backs, but not to not to a point where they're at major risk. They've distributed their maturities across times, so there's not a you know, it's even though interest rates are up right now, it's not going to kill us corporations. And there's certainly going to be some you know,

some roadkill, but um, not the entire economy. So the you know, the basics are there, and of course you still have fairly strong um if you look at the industrial sector pretty I mean pretty record, pretty close to record backlogs and orders. But even if there is a reduction in economic growth, there's there's a year at least of orders that they have to work through just to get back to UM like a normal supply demand. You look at cars with at airplanes and the boats, like

the high ticket items. Um, you know, So that that's what I mean by the fund amount was like, I don't see over supply of something. I don't you know, if anything, you just saw too much demand too quickly, and that's what needs to get UM pulled back a little bit. And that's what's happening. So that to me just looks like an EBB and flow. Um. You know. Granted, the pod reserve can all the screw things up they have in the past, right, but yeah, um, but I

think there's a way to go for that still. Just in the last twenty seconds that we have with you, can you give us a pick a place where you have invested during this tumultuous time. You know, um, we continue to move off shore as much as the US, the fun evaluations aren't there. The non US markets, Europe, you know, Asia, the valuations they are approaching another decliner, so which is you know, it wouldn't be totally surprising would put those markets that close to nineteen seventies valuations.

You know you're getting through, if you can look through the next six months and the kind of volatility, you're getting to a point where you're able to price in and capture long term double digit returns between the stock prices and currency. All Right, we've got to run forgive us, um, but good to check in with you as Bonde, founder and chief investment officer of Centerstone Investors joining us on the phone from New York City. Thanks for listening to

Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg dot com, and you can also listen to our radio show at two pm East in on Bloomberg Radio, or watch us on YouTube search Bloomberg Global News. H