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Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside my co host Matt Miller.
Every business day we bring you interviews from CEOs, market pros, and Bloomberg experts, along with essential market moven News.
I'm the Bloomberg Markets podcast called Apple Podcasts or wherever you listen to podcasts, and at Bloomberg dot com slash podcast. We can break down this story here on Nike with Putum Goil. She is the retail analyst for Bloomberg Intelligence. She follows this stuff. She's done it for decades. She knows what's happening, so put them. Thanks so much for joining us here. Is this a Nike issue? Is just this reflection of the consumer. What's going on?
It's definitely not a Nike issue. It's more a reflection of the consumer and just the macro environment that we operated. You know, when you look at the results that Nike post did and you just look at the different geographies that they operated, the myss was really in two geographies. One was China and two Baza Mia. Now the China miss consensus is looking for a twelve point five percent increase on sales in constant currency. They posted an eight
percent increase. That's not so bad. I mean, it's definitely, you know, behind consensus, but eight percent growth is still pretty respectable. Now when you look at Emia the negative three percent that we saw there versus an Estama for a little single digit gain there, I think, you know, whether it was really the culprit not apparel sales which
hurt them. And that's something that we wouldn't be too concerned with when we think about Nike for the longer term because those kind of situations have been slow.
All right, So here we go, hold on, let's go to the I'm gonna go back to an earlier We were discussing simone tennis shoes versus sneakers, and Eric Mala, our producer, popped something in the chat. Here a map showing the United States and where people call it tennis shoes and where they call it sneakers. So like the northeast, kind of like from Pennsylvania up to the northeast sneakers, Southern Florida sneakers, the rest of the country, including Alaska tennis shoes.
I don't buy it.
You don't buy that, But pun what do.
You call them?
I call them sneakers, see expert.
Experts.
That must be an interesting conversation to have at industry of.
Well, in Chicago and Cincinnati. You might lace up your quote.
Gym shoes that I've heard.
Actually, I'm sneaks, you know, sneakers. Sneaks, that's the.
Way you go.
I want to get your sense. How much is this a story of sneakers. How much is this a story of apparel? And how much is this, you know, athletic war, and how much is this a story of overall apparel?
Sure? So, I think the bigger story here, which has been in the story for some time, is broader apparel weakness. Now we have seen this across the board because inventories were too high and that's what caused apparel to be marked down. Now, the other thing was apparel is versus footwear. It's for Nike. Nike is dominant in footwear, but when it comes to apparel, they don't have that lead that they have in footwear with rivals. So it's anyone's game when it comes to apparel, and Nike has to fight
for its share. So it's definitely a tougher marketplace. Though when it comes to the footwear, I think they do have a lead. I think it comes back to innovation, which they're pressing the pedal harder on and that will continue to really help them maintain that lead. So footwear, I do think they're very strong in and you could argue that, you know, there's been competition from companies like Foca and on, especially on the running side, but those
brands are very small. When you look at Nike's footwear market and its size there, it's multiple fold of those smaller brands and we don't see them losing that lead, especially with Jordan. Right Jordan's position to be the second largest global footwear brand or at leisure brand in the world, and that says something for the Nike flagship.
But we also heard Nike introducing about two billion dollars worth of cost cuts over the next three years. Will that impact innovation?
I don't think so, because the cost cuts are now going to be to limit innovation or to really reduce spending on innovation. They're really happening on the operation side where they may have had redundancy and they're kind of backstaff where they're just reorganizing to make matters more efficient, more about driving efficiencies. So you could argue that, you know, maybe they were two layered to start with and now
they're just peeling off those layers. I don't think this will impact their roadmap for innovation to drive newness into the business, especially in footware.
So simone, you know, Punham's one of the top retail anamalsts on Wall Street. Her job, a big part of her job is literally going to shopping malls and just watching people. What are they buying, what's hot, where's the traffic going, how are the promotions out there? And we actually pay her to do this stuff. Punum, what are you seeing here on this holiday? Shopping. What's your outlook here for holiday shopping overall?
I think we're gonna have a really good homebase even fall, irrespective of what we have heard about the US consumer and how they're shopping, where they're shopping. The stores are crowded, people are buying stuff online. Trucks are being seen all over the US delivering multiple blocks, so the lobbies are full, so it will be a good holiday. The question is what happens after holiday? Do we go into a lull? Do you have you bought everything that you wanted and
now you're just going to take a break. And that's really what we'll see into twenty twenty four. But for now, people are spending. They're using more buy now, pay later mediums, alternative stayment mediums to facilitate the spend, which is also something we'll be watching for. But holiday spend online in stores looks robust, especially at the key that have done a good job in just you know, harping their value message and also driving the nique product into their stores.
Of online businesses, Are there any sectors of the broader retail space that may benefit going into next year? What's your take on that.
I think the online retailers are well positioned going into twenty twenty four because now things have normalized where you know, we've were passed the pandemic and people went to stores that wanted to go to stores. They have that experience there.
But now convenience comes back into play. You want to be able to shop from your home, shop from wherever you want, and just have things delivered to you, especially as things are coming faster now with two day shipping, Monday shipping with bio Fine that's being rolled out to companies that don't typically sell on Anthon but to be able to use that service. So we do think that consumers will lean back a little more on digital in twenty twenty four than on stories.
All right, put them Goil, Thank you so much. We appreciate that. Put them Goil. She's a senior retail analyst for Bloomberg Intelligence, one of the best on Wall Street, giving again extent so kind of where the trends are for consumers and what retailers are best position to meet those. So check out Bloomberg's put them's research on Bloomberg Intelligence. You go to Big on the terminal and get all
of the research from Bloomberg Intelligence. Including put them stuff here so it's good stuff, and calling for a decent holiday. Are you doing you?
Which is interesting because you know traffic in store was so lackluster it seemed like one Black Friday. No, I have not done on my holiday.
Shn you need to get going there. I need to click click a few buttons myself. I'm actually waiting for a couple of things that have not been delivered, one by Amazon and one by another retailler, So maybe supply chain issues out there.
You're listening to the Team Can't Live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg dot Com, the iHeartRadio app, and the Bloomberg Business App, or listen on demand wherever you get your podcasts.
We welcome now our Bloomberg television and radio audience. Is the top story of course today. Cooling inflation in the United States call PCEE barely rising in November. You want a cool figure, take a look at the six month annualized number, the core metric. They're up one point nine percent, ie below two percent. Let's get some reaction from Washington.
Leil Break, our director of the National Economic Council at the White House, and of course, former Vice Chair of the Federal Reserve joins us now along with our own Kaylee Lines low Brain. Not great to see you. We've all been anticipating this number and looking forward to seeing exactly what it was going to deliver and what the data are going to deliver. It's a really solid number.
I'm wondering whether we are now at the points where we can declare victory, whether it is time for a victory lap, whether the inflation dragon has now been slain.
Well, look, it is really good to see that we're closing out the year with inflation on a six month basis at two percent. That's the pre pandemic benchmark, and it's a very significant milestone. And if you look back over the course of the year, it is really stunning how much progress the economy has made. Inflations come down faster than even the more optimistic forecasts, and growth has
remained very resilient, along with a strong employment. If you recall a year ago, the consensus projection was that getting inflation down will require a spike in unemployment recession, but in fact, the unemployment rate has remained below four percent for twenty two months in a row, and of course, we're still seeing more data suggesting growth is resilient. But no, it is not time to rest. It is time to
continue working. And that's what the President is determined to do, keep working to keep bringing down prices and improving the economy from the middle out and the bottom up.
Well, and Director brainerd it's Kaylee in Washington. Obviously, he has tried to do that domestically, but geopolitics are a factor here as well. If it's not time yet to declare victory on inflation, if there may still be upside risks to inflation out there, How worried are you about what's happening in the Red Sea and what it could mean for energy prices and supply chains.
Well, the Red Sea situation is one that we are monitoring very closely. Our National security team is in constant contact with partners in the region, with shippers, and we are doing everything we can to make sure that those shipping routes disruptions do not lead to broader disruption supply
chain disruptions in the US economy. And of course we're much better equipped today than we were just two or three years ago, because we have under the presence leadership, done so much to work in partnership with the private sector on supply chain resilience.
Doctor Brenand, are you confident that the current outlook when it comes to wages, it's consistent with let's call it two percent, so the target that we're all shooting for here. Are you confident that some of the deals that have be done this year that are going to take effect next year are going to really take us in that direction.
Well, as you said yourself, that core number, which is the really important number on inflation, is actually slightly below two percent on a six month basis, and that should give everyone a lot of confidence that inflation is sustainably down and we can continue to see good growth in real disposable incomes, in real wages, and in fact, if you look at the real disposable income growth over the past year that we saw today three point seven percent, very strong, and it is coming in the context of
rising productivity. You can see that in the last year, productivity has been nearly two and a half percent. So that gives room for American workers to continue to enjoy that take home pay that allows them to purchase thirty five hundred dollars more today than they could pre pandemic.
Okay, so let's talk about American workers, or perhaps more specifically, Director Brainerd American voter. So you've mentioned a few times here the work the president has done on addressing supply chains, on trying to bring inflation down, and clearly the economic data supports this idea that the economy is held in there even as price pressures have eased. Whatever it is not reflected, though, is in the President's approval in consistent
pulling we are seeing. It's not really a question of whether there is a disconnect, because clearly there is one. But how do you advise the president as an economic advisor, how to address it? What does he need to do?
Yeah, so when I talked to the President, he has focused on one thing. He always wants to know what does the strong data, the strong economy mean for American workers,
What does it mean for their wages, their wallets. We've already noted that American consumers are now seeing declines in prices over the year on things that really matter to them a gallon of gas, a gallon of milk, toys for the holiday season, appliances and you know for the holidays, car rentals and airfaress are all down over the year. Wealth is up thirty seven percent since before the pandemic. Home ownership is up, Housing wealth is up, retirement accounts,
as you know, is up. And today we saw a consumer sentiment jumping and that's the biggest jump we have seen in years, which suggests that Americans may finally beginning to feel a little bit more confident, a little bit more secure. But the President is going to continue to push us to work to lower costs for American families and to keep these gains over the course of the next year and years.
Do you think these gains and inflation should be taken for granted? Dr Brain not. The financial markets are pricing in six rate cuts for next year. Do you think this is an economy that needs that level of easing.
Look, this is a president who respects the independence of the Federal Reserve, so I won't comment on Federal reserve policy making. What I can say is that the conditions are very favorable in the sense that inflation has come down to two percent on a six month basis, much earlier than people predicted at a time where the labor
market is in much better balance. And why it's because supply chains have healed, and workers are coming back into the labor force at much larger numbers three point three million over the last year alone. So that work on supply chains that the President has really pushed forward since the first month of his presidency is showing up in those lower inflation prints, and the market does seem to be taking that to a more benign set of interest rates.
I mean, you look at mortgage rates one and a half percentage point DCRE and mortgage rates just over the last few months.
It's very welcome.
So I understand the restraint around what you can say on the monetary policy side, but I wonder what all of this means on the fiscal policy side of the equation as well, Knowing when Congress returns in January, there is going to be a massive spending fight that has to take place in terms of the budget. Are we looking at a US economy right now that is able to withstand greater fiscal restraint.
Well, this economy has proven to be remarkably resilient, defying all the predictions, and looks to close out this year certainly on a much stronger level of growth than had been anticipated in terms of the fiscal trajectory. President Biden really wants to see the agreement that he put in place that would cut an additional one trillion in spending, a bipartisan budget deal the Fiscal Responsibility Act to and
put into place. Congress needs to move forward and do its job, And of course he's already seen a one trillion reduction in depths, it's just in the time since he's been in office. So we'll continue to work with Congress on a bipartisan basis. The President is really very focused on being fiscally sustainable.
Does big physically sustainable mean as well that we need lower interest rates. There's a growing discussion about the interest bill that the American economy now carries. That the federal government now carries. Significantly lower interest rates obviously would make
that challenge much much easier to handle. Do you think there is a case of fiscal dominance beginning to emerge in the United States that the economy is not capable of sustaining itself unless it has lower interest rates given the interest bill that has now been built up.
Well, I would come at it from the reverse direction and simply say that the benign data that we are seeing that suggests that inflation really is sustainably coming down on the back of these great improvements and supply chains. With the inflation on a six month basis now at the two percent pre pandemic benchmark, that's a benign outlook that will be much better for our fiscal outlook all around in terms of growth, revenues and the longer run
physcal sustainability. So this is a benign outlook, and yes, it's very positive I think for the fiscal trajectory, but there's more work to do there.
I'd like to switch topics if we can, to something else that you've addressed this week, which is the proposed takeover of a Japanese steel company, Nipon Steel and US Steel. You have written in response to this at the purchase of an iconic American owned company by a foreign entity, even one from a closed ally, deserves serious scrutiny. Why does a US ally as close as Japan deserve the scrutiny.
Well, I think it is longstanding position of the US government and longley held, long held view of President Biden that steel is a very vital sector for US national security and for critical supply chain resilience. And we've seen that in past policies that have been undertaken by this president. So it is important to review or to make sure that there is serious scrutiny of these kinds of transactions from the perspective of national security and supply chain resilience.
While we continue, of course to welcome investment from abroad and have seen record foreign direct investment in the US economy.
Doctor Brandon, have you spoken to has the administration spoken to the United steel Workers on this issue? Have you got any feedback from them? And is that feedback influencing in any way you're thinking.
Well, I will say that the steel workers are a vital part of our steel strength here in the US. They are partners with industry, and they are at the center of President Biden's vision for growing the economy from the middle out and the bottom up. So it is important to continue to see strong, good union jobs continuing to sustain our steel industry, which is US manufacturing, vital to our supply chains, vital to our national security.
We really appreciate your time today, have a very happy holiday. We end on a good note with that data.
LEL.
Brighter, Director of the National Economic Council, and of course I thanks to bloombergs Kdie Lines.
You're listening to the tape. Can's our live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, the tune in app, Bloomberg dot Com, and the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty.
Lots of economic data today, personal income PC, deflator on the inflation front, durable goods, you know you mish coming in a little bit better than expected. They don't just have a good football team, they have good economists over there at the University of Michigan. So some pretty solid data coming across. Let's check in with Stuart Paul, another good economists, another good economist, Bloomberg Economics. Now he usually joins us in studio, but he's joining us via zoom
here today. So I'm going to go out on a limb and say he might be at Windham Mountain. Now, he's got this kind of cheesy background on a zoom, which I'm not buying whatsoever, because I think we really had the real background. It would be like the slopes of Windom Mountain, Stuart, I gotta ask you, where are you, dude.
I'm in Wyndom. Yeah, he got a light dusting of snow, and as soon as I hang up with you guys, I'm going out for a hike. All the data is out.
The data was a gift to Jay Powell.
I'm taking it personally as a gift for the holidays, and after this I'm done.
And just full disclosure on behalf of Stuart. He is an all mountain ski patroller at Windham Mountain Resort. He's been doing that for many years. So that's good stuff there. So Stuart, what did you take away from again, a lot of this data this morning? It seems, I guess, give a little bit more leeway for the FED to be a little dovershare. Maybe it does.
It does, But the real question that we need to be thinking about the background is just why does the data look as good as it does. So we saw headline PC inflation actually deflation during the month of November because energy price is globally declined, so we got ten basis points of deflation for the headline. Core PC inflation slowed to just ten bases points, allowing the six month annualized pace of core inflation to decline to one point
nine percent. So if the FED is thinking about what trend core inflation looks like, they're thinking, oh, wow, it's actually at our target. But in the background, we have
a lot of core goods deflation during the month. And if you think, as we do, that destocking of inventories will allow firms, particularly goods producers and retailers, to avoid price cuts in the future, then that drag that we're getting from core goods would be set to reverse, at which point we would have about three percent annualized core inflation. So if that inventory d stocking takes place, it's not really the case that the FED can declare mission accomplished on inflation quite yet.
So then if they if we see that, does that threaten the three cuts next year that we outlook that we heard from the Fed? Or does it simply threaten the potential timeline?
As far as I'm concerned, it does not threaten the Fed's forecast of three of three cuts. What it does threaten is the market pricing that's showing, you know, nearly double that. So that's what's going on in the inflation front. If the fundamentals that that we think are going on in the background in addition to inflation. If we think that the labor market, for example, starts loosening more materially, which we expect, but let's face it, others out there don't.
If that starts taking place, then we expect the Fed's going to revise its inflation forecast show actually more cuts than it currently is showing, even if it means that inflation has yet to fully reach the target. It's just the case that the last mile of disinflation is difficult.
So my personal Paul Swiney daily inflation gauge is gasoline three dollars and twelve cents a gallon. That's down just big time, just over the past a few months here, So talk to us about it. You mentioned before the impact on energy, and you got to adjust for that, don't you, And I guess when you do, maybe you're a little bit less sanguine about the inflation abating.
Yeah, So declining energy prices does allow for declining headline inflation. More importantly, probably for the FED, is that declining energy prices matters a lot for consumers and their inflation expectations, and inflation expectations matter a lot for consumer behavior. So, for example, if folks think that prices are going to be much higher in the future, they go out and rush and buy goods and services today, and that act
begets inflation in the future. Seeing declining gasoline prices helps consumers to slow their role a little bit, and it does allow for softening consumer inflation expectations, which we saw in umish today, particularly in year ahead inflation expectations, and it does allow them to sort of slow the pace of their spending, which we've seen there has been a little bit of a shift from consumer spending on goods for which they have any elastic demand to nerd out
a little bit. But it allowed them to get a little bit of savings on gasoline that was directed actually a little bit more to holiday shopping we saw in the PCE report, But we don't think that that really has legs. If you look at credit card data through December rather than just the November piece report is sales
are a little bit more tepid. Consumers are taking that gasoline savings and just kind of sitting on it a little bit in December, So we're not fully out of the woods in terms of an economic slowdown quite yet.
This has been a political I guess issue that's come up. You know, Biden very unhappy according to reports that people aren't feeling the impact of his economic policies, people seemingly trusting the Republicans more on the economy than the current Democratic administration. Now, I'm not going to ask you to weigh on politics, but what kind of indicators do you need to see to think, Hey, well, consumers actually think that the economy is good. Now, how far are we from that point?
So, at least in terms of election outcomes. And I'm not speaking as a political analyst, but strictly as a statistician, as an economist, it really matters where the economy is three to six months before the election. There's still a lot of the game to be played before then. There's still a lot of data that we're going to see before then. And if we start getting rate cuts in Q one, that could help to avoid the worst case economic scenarios, and that could be helpful for the administration
in the twenty twenty four election cycle. But again, it depends why we're getting those rate cuts. Potentially in Q one, if we're getting those rate cuts, because we see the unemployment rate inching up, not just inching up, but gapping up, which tends to be the case once Salm's rule is triggered.
If we see the unemployment rate gapping up, and that's why we get those rate cuts, it probably would not be enough to offset any sort of alleviation of of interest rate pressures in financing costs that consumers might find helpful. That softening the labor market would be more influential in determining election outcomes than say, the change in interest rates.
So Stewart bottom line, Bloomberg Economics, what is your GDP call for twenty twenty four?
Well, so for Q four specifically, we have an estimated one point one percent qver q annualized. Again, you know, that's better than we would have been anticipating. As we do more of the bottoms up work and as we get more of the data, things are looking a bit better than we would have expected, especially a year ago.
But we're not quite out of the woods yet. We are still expecting a bit of a slowdown, and you know, we think that that's the reason why the Fed is going to have to start cutting rates in twenty twenty four.
What's the black swan for you? Looking ahead? To next year.
Look, I think that there's still a lot of risk around commercial real estate. I don't know if that's totally a black swan, because you know, it is what a lot of folks are keeping their eye on. But in terms of what could be a major shock to the system,
I think that that's probably it. The ability of banks to work with their bar works so that they don't have to take back keys, The ability for banks to work with their regulators perhaps to allow those banks to lend to borrowers at below market rates, that those borrowers could then cash flow any sort of dead obligations that they have, which regulators frankly don't love. They don't love
when banks are lending it below market rates. Those are the sort of those are the sort of financial conditions issues that are a bit orthogonal to most of the economic data that we think about day to day, and so it could catch some folks by surprise, just because it's sort of retreated to the back of everybody's minds.
All right, Stuart, thanks so much for joining us. Really appreciate it.
Now.
It's been a busy morning for you with all the economic data hitting the tape. Here Stuart Paul. He's a US economist for Bloomberg Economics. Go hit the mountain and enjoy the day.
You're listening to the tape catcher are live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, the tune in app, Bloomberg dot Com, and the Bloomberg Business app. You can also listen Hello, I've on Amazon Alexa from our flagship New York station. Just say Alexa, play Bloomberg eleven thirty.
Everything seems to be going to the cloud, all types of applications. Why not space. Our next guest is he's there already. Peter Platzer, CEO and founder Spire Global, which is a New York Stock Exchange list of company spir Go based in Boulder, Colorado. As a parent of a you see graduate, I spent a lot of time in Boulder. Great town there, Peter, Thanks so much for joining us. Tell us what Spire Global does. What's your biz?
One of bull excited to be here. Spire collects hearts to acquire data from space through satellites that helps humanity tackle some of our greatest challenges, often related to climate change and global security. And we do this with the world's largest multipurpose satellite fleete over one hundred space draft that covered the Earth every fifteen minutes, every spot on Earth.
What is driving various different companies to want to have a satellite, like, what are the key trends behind this market at the moment, and who are you trying to sell your space as a service as it were modeled to.
One hundred percent.
So companies that want to help humanity, for example, tackle wildfires or measure greenhouse gases, those are companies that leverage our space as a service model, which you can think of is like Amazon Ews.
But for space.
So if you got a cool application, but you don't want to learn about quaternions and licensees and rockets and everything else that makes space complicated and very very hard to tackle, then you come to us and in a few weeks, a few months, maybe a year, you have
your application running. So those are then companies that really have their own application or payload netfor example, can detect a tiny wildfire, or can see where greenhouse gases are omitted, or if you are someone who has long pipelines and you have like little senses that measure where something might go wrong, you know they do that you know, that's an Internet of Thing application.
So all of those come to.
Us because it's fast, it's easy, it's cost effective, and they're listening to, you know, maybe the report that McKinsey send out recently saying that if you don't have a space strategy today, you better get one.
Interesting. So, Peter, does your company do you own the satellites or do you lease capacity on other satellites.
No, they are all our.
Own spacecraft, our own technology. So everything we do is invented by Spire. This is why it works so well and so reliably, and we can make those offers at a very very competitive economic price point for our customers and we get to scale very very efficiently because it is in house. So those are our own spacecraft, our own technology. It's also our own ground station network. It is our own operations system that manages this very very complex infrastructure.
And it's not like a single satellite for a single company. Necessarily you've got a lot of satellites. You can run a lot of different operations and use that network to back companies. Am I right in thinking that.
You are one hundred percent spot on? Quite the opposite, So our space off on multi purpose so they serve not just a particular customer, but they serve many, many customers across many many industries because one of the power of that infrastructure is is that you collect the data sitt once and then you sell it an almost unlimited amount of time, serving a large number of use cases.
We had a very very well known partner assess how many major use cases they could find, and after one hundred and seventy five they said, Peter, we're going to stop counting here.
There is a massive amount of use cases. But for us to serve. In addition, on the.
Use case, it's not a new spacecraft, it's not a new satellite. It's not more spacecraft, more satellites. It is the same data that is already collected, just packaged in a different way to serve another use case for a different type of customer.
So, Peter, who's the typical customer of spire, Like getting a sense of kind of the use cases here?
Yeah, So about fifty percent of our business is commercial and about fifty percent of our businesses government.
So if you are a company that.
For example, is in charge of logistics, well, one of the big things you need to know is, like where is all this stuff, which means you needn't know where are all the ships and where are all the planes? Well, you know, Aspires a company that can help you with that.
If you are in the energy business, you know it's a particularly renewable energy, but also you know electricity, you need to understand what is the weather going to be On one hand, to understand demand for electricity, but on the other hand, you also want to understand, okay, what's kind of like the risk of something going wrong because of high winds or because a fire breaking out from lightning.
Well, then you come to Spire.
If you are a maritime insurance company that wants to know, well, where are all the assets that you ensure.
Well, you come to Inspire.
If you're a commodity trader that really tries to get a handle of supply and demand for many commodities, in particular oil and gas, but also others, then you come to Spire.
If you're an.
Airline that needs to run better and smoother operations, or an airport that wants to improve his throughput and have a really really smooth and efficient ground operation, then you come to Spire.
I could keep on.
Going probably for a couple of hours some use cases, but maybe you get a sense now.
I do, Peter, I think anything any business that sends ships or rockets or airplanes into the air is extremely capital intensive. I know you guys have been on a mission to get cash flow positive by year end. That's according to a final last month. A is that still in the cards? And B I guess how do you how do you deal with the extraordinary capital intensity of running a business like this?
So the first thing is that you stop making a capital expensive and you make a capital efficient. So for Aspire, as we have published to build all of our infrastructure and maintain it and run it in the space and underground is just a fixed amound there somewhere between seven and nine million dollars a year. So it's a very manageable small amount that supports it CAUs an unlimited amount of revenue because we keep on collecting this data and
then sell it aquosity unlimited amount of time. And the reason why Spire is able to do this because we are a fully vertically integrated company.
It is our ip our technology.
We build it ourselves in our facilities and that has allowed us to take the capital intense out of an operation like space and make it very very capital lines, very very capital efficient, just the same way as you would look at how the subscription businesses that collect a very very valuable data source and then monetize it. For us, it's a small amount of money on an annual basis that is fixed, supporting.
A very large revenue.
Peter, thanks so much for joining us. Peter Platzer, CEO and founder of Spire Global. Spir is the ticker.
Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews at Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller nineteen seventy three and on Paul Sweeney.
I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio