This is Bloomberg Business Week. I'm Carol Masser and I'm Bloomberg Quick Takes Tim Stanivk. We're here every day bringing you the latest news from the world to business and finance, plus technology, politics, economics, all purtnising the power of Business Week reporters and editors, not to mention our journalists and analyst in more than one twenty countries. You can download
Bloomberg Business Weekend iTunes, SoundCloud, or Bloomberg dot Com. You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio or watch us on YouTube search Bloomberg Clovel News. Let's set the Business week agenda in the house. Abigail Doolittle, she's markets reporter at Bloomberg News. She is in our interactor broker studio, Yolenna, she is our senior US economist, a Bloomberg Economics on the phone
from Long Island. We're going to get to the jobs report in just a moment, but let's talk markets a little bit. Abigail, the trade. How did investors read that job's report, which was really a good one. Yeah, it was a solid report. It's funny. I think everybody's tired after the month. We just had reporter, We just ad stocks are really not doing all that much. The S and P five hundred down slightly, the Dow up slightly, you know, just fluctuating here, a little bit more weakness
for tech. And that of course is because where there was a huge reaction to the Job's report. The bond market. We have yields absolutely spiking. The two year yield currently up ten basis points at two, the ten year yield up three basis points at two thirty seven. We know what that means, an inverted yield curve, and not just for a blip, but right now that to ten yield curve is at its flattest going back to two thousands six,
two thousand seven. Okay, so what's the bond market telling us, abigail that the FED has gotten the go ahead, the green light to go ahead and raise away. I mean, there was one guest on the open this morning that I was talking not just fifty basis point uh yeah, two back to back full point raises in the next two meetings. That's get ahead. Yeah. Alright, So so you Laida, come on in on this. It was a very upbeat report.
How did you see it and then in the context of the broader economic backdrop here in here in the
United States. Absolutely, and one of the biggest things for me in this report was a significant increase in participation rate and apart from a very healty payrolls game, so we saw three tents of an increase in prime age participation, which is just telling me that finally in all these workers who are waiting on the sidelines deciding to come back, whether it is because you know, we don't get any more uh COVID there payments from the government, or just
because the cases are subsiding, so whatever that is. We are seeing significant strong participation in the labor markets. So that is really a good point because that will help, um, you know, keep wage pressures a little bit more contained, even though we will see continue to see a strong wage growth this year, uh, particularly early among um you know, uh professions that have a little bit lower income so satisficion,
hospitality and healthcare. Was there was there anything particularly concerning in there to you well, not not not in the report. Uh, there was a little bit of a disappointment in terms of ours work, but that is expected. You know, in the first quarter, we we are going to see slow down in economic growth and ours work just simply because of uh, you know, a micron in the beginning of the quarter. But other than that, I think the the
employment report today was really really strong in the game. Uh, there are a lot of good signs that you know, the labor market continues to recover and and actually there is quite a lot of room to still recover because we had seven million jobs below where we would have been if jobs continue to grow at trends, so one
point six millions below the February mark, fis. But if we have seven million below where we would have been had grown at the trend, Wow, that's some interesting perspective, right, you know, back out COVID and kind of where we would have been versus uh, you know where we are because of it, um so abigail those treasury yields, like you know, I keep saying, like, you know, have we reached a top with yields and stuff? What did today's moves perhaps maybe remind us about where we still might
go when it comes to higher yields. That is an excellent question, Carol, and I would say that relative to the ten year yield, if you look at a long term chart, and you see in yield the forty or fifty at this point year bull market for bonds, which is represented by that down trend. We right now are hitting up against it. So the question is will that
very strong resistance hold. And uh, it's funny, it has every time over the last forty or fifty years, so there's good reason to think that it will, which would suggest that you're going to see some money go back
into bonds. And it's funny. I was hearing one um from Pigim, an expert bond expert from Pigim saying that right now bonds, the pricing is so attractive that it almost makes sense in the new quarter to rebalance portfolios a little bit, take advantage of the prices and the low bonds, which would suggest that that that trend may may hold. So maybe yields are going to come back in, and some of the near term technicals suggests that as well.
As for what that means for stocks, you know, it's interesting were it's hard to you know, we're talking about this the other day. You know, So long as there's the lower highs, it suggests that the buyers aren't as enthusiastic as the sellers, meaning the sellers are willing to sell more than the buyers will buy at higher levels. But if that breaks, you know, who knows, it could be a very different story. And also I would say the meme stocks as a measure of risk on you know, yeah,
game stop today on the idea. Let's see if it's still it was earlier. It's actually it's were first now change. It's really the retail traders. But in any case, if they you know, the stock is up so much since it's low last year, right, yeah, alright, so it's another thing to be looking at. Abigail, Thank you so much, Abigail do Little Markets reporter on the phone is Elena are saying thanks to her as well. Member of our
Bloomberg Economics team. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. We'll talk about firing on all cylinders. As Charlie was talking about the jobs report today, Uh, that US labor market report really just coming in strong, adding close to half a million jobs in the month of Marxi, unemployment rate falling by more than expected, highlighting a robust labor market.
I know you've heard it a lot here on Bloomberg, but it is our top story and it's really strong, Hey, throwing you know, revisions of close to a hundred thousand also the last couple of months also pretty good. Yeah, So let's see what our next guest has to say. Peter Quigley is the president and CEO of Kelly It's safe point five billion dollar revenue global staffing solutions company. Peter, good to have you back with us. Hey, you have some really interesting insight given what you do at Kelly,
and I'm wondering what sticks out to you about today's report. Well, thanks to Tim, it's going to be back with you. UM. Clearly another round of good news. His job growth continued at a solid pace in March. UM labor markets are steadily recovering to pre pandemic level. It's the eleventh straight month of four thousand plus, longest strets since started tracking that UM, so clearly good news. I think there's some
other encouraging signs UM. Carol mentioned the unemployment rate coming down, but every demographic group saw unemployment drop, with the biggest drop among black workers, which is very encouraging. And I took away from the job to report some signs that maybe, uh,
the COVID, the worst of COVID is behind us. You take into account that the number of people prevented from looking for work declined significantly, the number of people who missed work because of COVID declined significantly, UM, the number of people who didn't work because their employer closed or because of business closed declined significantly, and the number of employees that tell worked declined, suggesting that maybe offices are
reopening and people are going back UM to brick and mortar. Alright, So yeah, I mean it just feels so positive. So in terms of particular areas, where are you seeing kind of overwhelming strength and where are you not? Well, today's jobs report revealed that the recovery is broad based. I mean, every almost every vertical UM saw decent job growth. So that's that's positive, and that's reflected in the demand that
we're seeing from our customers. Across all of five of our business units are seeing strong demand UM and in particularly you wouldn't be surprised technology, life sciences, UM, warehousing, manufacturing are all very very strong. Uh. And so you know it's it's broad based. UM. What about when it comes to demographics on your own platform, and I'm glad you pointed out that every demographic groups unemployment drop in
the most recent month. Is that something that you're also seeing when it comes to Kelly, Yeah, wee information, Well, we don't to the extent we can UM when employees volunteer the information. But the thing is with this great jobs report, I recalled that when I came home with a report card that was pretty decent, my mom would always tell me, this is good, but you can do better,
And I think of us. But the I think in the labor market, we can do better by removing barriers that prevent more people from accessing meaningful work UM because despite the record number of job openings, too many barriers exist for hidden workers, including job seekers with non violent UH criminal records. And and just to quantify that for you, more than seventy eight million Americans, so thirty three percent of our working age population have a criminal record. That's
nearly of those are non violent offenders. That's amazing. Well that and the unemployment rate among those workers is it's the highest it's ever been UM. And it's it's just good business to consider opening the funnel in this time of a dire labor shortage, and Americans frankly supported two other three. Americans believed that non violent mistakes in the past should not be an automatic disqualifier for a person
from work. More agree companies should do more to eliminate discriminatory hiring practices, and um more than say they prefer to work for a company that UM doesn't have discriminatory hiring practices. So um it's a good business. Yeah, No, absolutely, Peter. You know, but as this is a do as I say, not as I do, because I feel like most of most people would say absolutely they should be included, and that you know, when it comes down to it, you
don't see it put into practice. We certainly have talked to CEOs in various heads of institutions who who have put that into action and are hiring people, you know, with as you said, UM, you know, maybe questionable backgrounds or non violent offenders. Um. When you have conversations with heads of companies and CEOs who are all dealing with these tight labor markets, how many of them are actually
taking steps to to hire those individuals. I would say there's a lot more conversations happening, and and the best way to promote it is to show them the proof. So we had UM PROGRAMM in Toyota with Toyota in Lexington, Kentucky. We screened more than a thousand applicants of them are clear to apply for jobs. UM in Toyota increased its talent flow by increased its diversity by almost ten percent, and it reduced turnover by SEU. And it's in just one example, but more companies need to do. Uh to
do that. In April is National Second Chances Month, so it's a perfect time to start. Yeah. No, it's something for certainly people to think about in generally tight labor market or not. Peter quickly, thank you so much, President and chief executive officer over at Kelly joining us on
the phone from Michigan. You know this is where others would argue in terms of immigration, right, UM, Because I do wonder one of the big macro things that I'm thinking about, Tim is that if indeed you don't get the labor participation that we saw pre pandemic, that not everybody comes back. You know, where are companies going to line workers? And if they can't find workers, how does that then slow down profit growth? Revenue growth? And how
does that slow down the economy. Look how many jobs are open versus how many people are available to work exactly exactly, so something will continue to cover. All right, So getting started on this Friday. It is Friday, and this is Bloomberg. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. There's a story in the new issue of Bloomberg Business Week that's just out on the Bloomberg at Bloomberg dot com,
business Week dot com and of course on newsstands. Is what about cash less a t m s that have grown into a seven billion dollar marijuana loophole? Cash less a t m s? Do you get that? No, that's why we gotta talk to Tiffany carry All about it. She's consumer reporter for Bloomberg News. She's with us on the phone from Westchester, New York. Also joining us is Joel Webber, editor at Bloomberg Business Week. He joins us
on the access line from Brooklyn. Joel, this is really interesting. UM. I want to hear though, before we get into the story, how it came together and and you know, in terms of UM, really what Tiffany had to do in order to understand of the cash less ATMs. Did it involve getting people to buy marijuana? Uh? No comment, Yes, UM the story. I honestly found out about this one late. UM. But if you make a legal transaction for cannabis and
most of the country but um our reporting was in Massachusetts. UM. If you go to pay cash is not encouraged because they don't want to have a whole lot of cash on hand. UM. And you will find that you can make a payment with plastic, except that it doesn't know at the point of sale, they'll basically say, by the way, you're not gonna this isn't gonna show up as a credit card transaction. We're gonna have an a t M fee.
And it's all very confusing, it's all very legal, but it turns out that it it basically is masking the transactions that so that the banking system, which is all trying to be in compliance with federal law, UH, is basically this massive workaround. UM. And it also turns out that there's a number of providers who are making a
lot of money on this how much money diviny. You look at the fact that you know we've got eight billion in marijuana sales expected this year, and a lot of folks I spoke with estimated you know that these cash of a t m s are a quarter probably of those. You know, this is bringing seven billion dollars
into the banking system disguised as something else. And then you know what people are profiting from in this industry really is the fees every time you use one of these technologies, you're paying you know, anywhere from to to three fifty for the privilege of using your debit card in this, you know, potentially illegal form of transaction. And then, um, you know, someone is making the profits off those. And what I found in this story is this whole high
risk payment processing industry which exists side of cannabis. Um. You know, it's pretty hard to to figure out who's who's doing it, but there are a lot of players that are becoming more well known in the space. Tiffany How, how is this Okay? It's it jold, you know, use some terminology, use some terminology, but the fact is is that it's the marijuana industry. It's billions of dollars a year.
It just seems like it's kind of existing in this really strange space between something that is being hidden but at the same time allowed. That's right, And I think a lot of people think that, you know, safe banking legislation or other legislation might pass this year, and maybe this problem is going to go away. But the problem has been around for quite a few years, and as the cannabis industry grows, these transactions continue to grow, which I think is why they're getting more on visa and
master cards radar. So, you know, a lot of the folks I spoke with who are not lawyers to the company's involve said, you know, trying to look at it objectively. I mean, if you're lying to a bank, how is that not fraught on the bank, or how is this not a form of transaction laundering because you're essentially disguising the nature of the transaction. So this is very legal
interesting legal issues here. It'll be interesting to see, you know, if this problem sort of quietly goes away, or if it gets considered as as the Senate decides what to do about legislation, and as the industry evaluates the alternative, if it's not going to be a while until we get safe banking and no clues as to who's setting
this up and kind of putting this in place. You know, this is part of the fascination of the story is that, um, you know, there's so many different companies in this space, and they all operate through something called an ISO, which is like a reseller. So in essence, I was finding a lot of the names of the companies who seem to offer the payment processing are actually repelling it for someone else who's maybe even reselling it from someone else
who licensed it from someone else. So that's what you have to maybe read the story as it goes into it and see what how that whole industry works. It's so hazy, hazy, hazy ha um. But but Tiffically, I mean, I just come out and there's like so many jokes that we made here, but um, Tiffany. And I'm also curious because a number of companies have really um shown that they can thrive in this hazy little space, right, Who are some of the providers and and how are
they competing with one another? Well, you know, ultimately, when I spoke to people in the industry, they talked a lot about companies UM Transact first and Michael Schwartzman UM, who founded the company is not clear what his role is now uh and pabotic. But then what happens is there's been this whole rise in the pop fintech world
of these companies like Duchy and slow Hub. They have some very famous investors like Jay Z and Snoop Dogg, and they end up doing what they integrating with these payments processors because they want to offer the marijuana dispensaries like holistic software to manage everything from tax accounting to
how they run the cash registers. So, you know, some folks said, look, you know, they're basically promoting the payment processes by integrating with them, and in some cases, I'm not sure if they know all the details about how the industry works. So it'll be interesting to see. I think a lot of companies have new technologies that they're planning on launching, and I'll actually be writing more about
that next week. Hey, tiffany um, can you explain a little bit about how these transactions are misidentified in some cases as businesses that are adjacent to the actual weed shop. You still you share a story of a McDonald's that is looks like it's getting credit for at M transactions, but they're actually being bought at a weed store next door.
That's right. Yeah, So that was sort of the foundation of the story, was actually trying to trade a single transaction or in this case, we looked at eight transactions um and finding that when they show up on the customer's bank statements, they show up under an address. But if you google the address, it's not the address of the dispensary, it's the address of the McDonald's next door, or the piece of shop next door, or in one case, the business called New Dude Food clearly not a marijuana
um shops. And then you know, when you look at at those you can see clearly there's some mis labeling or miss cooding going on. But in general they do show up as a t M withdrawals on customers bank statements, and in fact, that's so effective at disguising them that in some of the instances we saw City Bank and Bank of America, we're reimbursing the people the three dollars and fifty cents or the two dollars and cents or
their purchase. So here you have this crazy technology that is, you know, existing in this weird legal intersown and then you have these big banks actually reimbursing customers for using it, which just seemed like the ultimate irony here. But McDonald's glad to have them nearby the dispensary because you're right. Great story, Tiffany Carry, Thank you so much, Consumer reporter of Bloomberg News, Jill Weber, Editor Business Week, or thanks
to you as well. Check out the new issue of Bloomberg Business Week on newsstands, online and on the Bloomberg This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Among today's crypto headlines, one is on the U s SEC leaning on crypto firms to report assets that they are holding on behalf
of customers on their balance sheets. And then to myself one about India basically saying it's going to frame cryptocurrency law only after a global consensus emerges on regulating such assess According to a person familiar, I mean that is the world we are in. It absolutely is, and we've got a great voice. Bill Hind, the co founder of
Soma Finance, joining us on the phone from Connecticut. We should note Soma Finance it's a FINNRA registered multi asset token issuance platform also a deck decentralized exchange for digital assets, not just for retail investors, but for institutional investors as well. Bill, good to have you with us. Great to be here, Thanks for having me on. I think a lot of people would have just you know, he heard me read that and said, wow, that was quite a mouthful. Uh. So,
explain what some of Finance does in lay persons terms. Yeah, so, um, Some of Finance is a joint venture with Tritorian Capital and another firm called Montre Dao. Tritorian Capital as a registered broker dealer, as you mentioned, UM, and through the joint venture, we're able to offer UM or. We're going to offer a decentralized platform like crypto traders like, but
in a regulated and compliant fashion. Okay, So give us an idea I'm always curious about We're all still trying to figure a way through anything to do with crypto and f t s and so on. But give us an idea of the growth that you're seeing on your platform,
where the most activity is uh and so on. So we the platform has yet to launch to the launch in a couple of months, but where we're seeing a ton of interest is in UM gaming UM n f t s obviously, and one of the things we're hoping to offer very soon would be token ized versions of public equities UM, and that's drawn a lot of interest.
What does that mean? A tokenized version of like equity? So, in effect, if you wanted to be able to trade UM a public shafer site tesla UM, you could bring the share itself onto our platform, into our broken dealer accounts, and be issued a corresponding cryptographic token that you could then trade the same way you would UM in an automatiumatic market maker UM as if we're a token, so you could do all the fun things people like to do with crypto, you know, yield farming, staking in those things,
but still own the underlying UH stock asset. We'll go through some of those reasons why someone would want to do that, because I think for a lot of our audience that's still getting up to speed on crypto, they're staying to themselves. Wait a second, if I can just trade a stock on a platform, you know, a retail trading platform, why do I want to token eze it?
Of course, And that's all that's been a bit of the rub to date is why right with crypto y um And here's this and this is a situation where you would remain the owner of that share, so you would get all the benefits of owning the underlying share, dividends, voting rights, all of those things that people want and need from their their equity ownership. But you could then also stake it into yield pools like people do on sushi swap or unit swap, which are unfortunately not compliant,
but we can do it in a compliant manner. So in effect, you're not only getting the benefit of the underlying investment, but you're getting an additional investment additional return on top of it. Wait, so you're basically able to leverage it then, is that what you're saying? Correct? Yes? Um, so you know um stoke token staking is is actually very similar to fully paid stock lending, which Wall Street has been doing for decades. Obviously, how did you there's
demand for that? Although I say that kind of naively because we know when it comes to the financial markets, Uh, anyway, we can kind of dice and slice and come up with some new things. There's a way to play it, like people are ready for it, but anyway, what do you know about the demand to be able to play the market this way. So we're hearing a lot from the communities that were involved in that this is something
that would be of interest. And then you look at things like the meme stock phenomenon that's come on, and retail investors obviously are very interested in getting involved in the market in a broader way, and we think this
is a great way for them to do it. The system will be built so it's easy and comfortable to use, it will be completely safe and compliant and UM and in this respect you'll effectively be able to I don't want to say double dip, but in a certain way you are because you're getting the benefit of the underlying security but also the additional yield on the crypto platform. UM would this be for all investors, approvative investors or what so the goal is to have as many investors
as possible. So UM we're going to go globally and each investor as they come onto the platform and our k y C M L then checked will be effectively tiered so that if you con is investor, you'll be able to see certain offerings but not other offerings. But if you came, want to say, an accredited investor, you might have access to different different offerings. We had some a little bit of jargon in there, KYC know your customer m l Anti money launderings. For those people who
heard that and we're maybe scratching their heads. Um, Bill, how I know that you're set to begin offering free transfer of assets from some retail brokerages, including robin Hood and each Trade. Um, how do you break into that competitive space? Well, we're just gonna get the word out there.
We're gonna go market and explain to people. Um, we've got to It's gonna be a tough heild to climb, no doubt, but we want to get the word out that this is for anybody who wants to enhance the experience of being an investor in these these stocks in the compliant regulated way can do so on our platform and in terms of tokenization, especially in the any side of things. Is this just in terms of giving ease and access to being able to kind of trade at any time? Is that also part of it? The goal
is absolutely to offer trade. Um, there are obviously a lot of issues to deal with their you know, obviously during the day when nastac is open, it's not a problem at all. But at night when they're closed, Um, there are some challenges there and that's part of what we're working through to make sure we can do that in a safe and complying fashion. Bill, very briefly, when do you think you can do that? We're looking towards the end of the summer is sort of the goal.
But with something that's technologically complex, obviously that's a that's not not a hard date. Just quickly ten seconds. You having conversations with regulators about all of this. Absolutely, we love the regulators, the SEC and finer are. They're they're doing great work out there. Um, they're what makes this place safe. So we talked them all the time. All right, Bill Ham, we gotta go keep in touch. Bill Hid, co founder of Soma Finance, joining us on the phone
in connect. Get you're listening to Bloomberg Radio. I'm road Yeah, how bebout you let me drive? Oh no, no, no, home honey, please, I'll I don't want to drive. It's a good question, he's good. Drive to the clothes on Bloomberg Radio. All right, what a week and we've just got about ten minutes left to wrap up the Friday trading day, the first trading day of the second quarter, and as you know, as we broke down yesterday, it was quite a first quarter. Bouncing around again today on
a big jobs report. Yeah, I was going to make a joke about the quarter, but it's not that funny that we're you know, on pace for a winning quarter at this point. Higher by just let's get into it with Cole Smeade, President and portfolio manager at Smead Capital Management. He joins us on the phone from Phoenix, Arizona. Cole, how are you doing well? How about you guys? We're doing all thanks? Hey, um, how is the quarter for you? Guys?
It was a great quarter. It was quite a bit of fun because when when everyone thought that energy is the problem of the world and they wake up finding out that it's it's what creates h order and security. You can make a lot of money when those changes take place. So what did you see in your in the quarter? In your portfolio? What can you talk about about?
How how you did at the quarter? Yeah, so, I mean, we we're the largest energy owner you practically could find out there in the mutual fund space, both in our US fund and our international fund um and you know that that means in a prior time you had to look stupid or feel stupid as you wanted to be a buyer those things, and you finally started to see some of the reward. But I think what investors are still completely missing is, you know they just use use
what Warren's doing right now. You know, buffets up buying Accidental and he controls close to twenty pcent the business, and he's just looking at what the capital structure looks like versus you know, what it looked at a prior time.
And he's looking at the free cash creation versus what it looks like at the prior time, and the return of equity and things like that, and it's like a Bend Graham exercise occidentals producing return in equity like Coca Cola did an eight eight when he bought Coca Cola at much higher prices than you could have boughttom in the ten prior years. And investors are unwilling to follow Warrant into that. And it just goes to show you
how despise the energy spaces today. But as people raising capital and you know, seeking out new capital from investors and our funds. It's great because we got great companies, great prices and money coming in. So do you think there's still room to move higher on these commodities, on these energy stocks or is the turbulence and disruption that we anticipate lasting for you know, X number of months
into the future. Is that pricedn already? Yeah? From a from a historical framework, this looks a lot like the price shocks of the nineteen seventies. And what those did is they became the new The prices you moved to became the new floor. Okay, so nineties the new floor. That's how I think about it. And Um, in the inn room, you're you're we could see squeezes that continue to take us high because there's just not there's not
supply out there. So if you're Vicky Hall of running Occidental Petroleum, who I consider maybe the best in the business, or you're like Derek Evans who runs Meg Energy up in Canada, you have the greatest oil salesman in the history of presidents right now. Where he comes in, he does what he wants to do, and that just drives the price oil high. Um. And it's a great environment
for these producers so it's it's it's wonderful. Now that being said, you know, people are using what's going on in that world to say, oh, you know, share of wallet and the consumers to be really hurting them. Um, we're nowhere near the share of wallet that we had back in O eight because cars are more cost you know, fuel effective. Um. And then secondly we're just not back at a hundred forty seven dollars a barrel. Yeah, I thought I just saw something that the president was doing too.
Even force companies are push them in that direction to be even more fuel efficient. So there's there's a lot of inesting dynamics. But you're right in terms of right the transition to a non fossil fuel world, it is going to take time. And so as as we move, as we recalibrate, as we readjust to maybe embracing more to alternative energy that fossil fuel world, maybe there won't be as much investment into it. And those you do feel like there's going to be a floor, a higher
floor under certainly the price of various energy commodities. The more alternative energy we want to do or green energy that we want to do, the higher it takes oil prices because those things, unsubsidized, compete at higher price levels. So at sixty dollars a barrel, your wind and solar look really stupid economically speaking. At a hundred dollars or a hundred fifty dollars a barrel, those compete more in the open market. So if you want to transition sooner,
you want actually higher oil prices. So when the president says, hey, I want to bring the price down, well, that actually does not go well with a green future, because you want high oil prices for a green future. Hey, let's go from energy to home elders. Because Carol and I've been talking about them all week. With rising interest rates for mortgages, they've been getting beat up a little bit, but you're still bullish on them. Why because it's a
secular growth story. I mean, we have millennials who have you know, really decided post pandemic in a meaningful way that they want own homes. And what Yeah, what the traders are doing is really and saying, oh, if the tenure goes up, you know, mortgage has increased, no one's
gonna want to buy a house. But what they're under assuming is the confidence that group now has in housing and the net worth that they've built up looking back anywhere from two years ago, if they bought early on in that process, or I'm thirty eight, I had kids younger, I've been a homeowner for quite a long time. Now. Is that net worth they've built up. Um. When you build up that net worth, you look and say, well, I want to go get a bigger house, in a
nicer house, and that is a huge multiplier in the economy. Um. But like I said, most people are looking saying if rates go higher, that's not gonna work. The problem is the seventies were a boom era for housing, and they were terribly unaffordable. And that's where we think the markets wrong. We see it also in our international We own lumber companies, right, so watch lumber paying around right now. We saw four dollars in the quarter and at those prices you can
get fabulously wealthy in the lumber of business. You know. It's interesting too, is even an older population. You know, I think everybody thought they'd all go to retirement communities or wouldn't want to own it, and they didn't. And and actually I just know from anecdotally even members of my families and my older siblings who are still either working or something, but they're not going into retirement communities.
They're buying homes and they're just going to places where there's lower taxes or nicer weather basically, or warmer weather. So it's interesting Boomers like their houses. And I think the other dynamic that brings up to Caroline, he is really important. The person in control right now of the economy in so many respects is a working mother with two kids. I say that because if she doesn't want to go back into you know, downtown to go work, congratulations,
office has got a shift. If if her parents, um don't aren't going to be as far away as they used to, They're going to move closer to her, you know, otherwards. I think the economics are moving to that type of consumer and household and that decision maker. And so I look and say, hey, we got these malls. They've got great property. But you know, to your point, there's boomers
the health character growing malls. Office could grow on malls because there's suburban locations close to her all right, really quickly twenty seconds. If you have new money to commit, where do you put it? Very quickly? Uh? Absolutely love the energy business. It's the most underallocated space. It's the easiest game in town. Go buy Oxy, Go buy some oil fans business in Canada, Go buy Continental. It's just too much fun. Well, and it's been such an help
performer in the last year. It's a help performer this year. We certainly saw it in the quarter as well. Hey Cole, great to have you back with us. Cost Meat. He's present portfolio manager. It's Meat Capital Management. Their value fund, the Speed Value Fund, by the way, beating beating just about all of its peers of the past five years, returning on average nearly annually. Thanks for listening to Bloomberg
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