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tv   Bloomberg Markets Americas  Bloomberg  October 13, 2021 10:00am-11:01am EDT

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>> from the financial centers of the world, this is "bloomberg markets," with alix steel and guy johnson. ♪ guy: wednesday the 13th. 3:00 p.m. in london, 10:00 a.m. in new york, 30 minutes into the trading day in the united states. welcome to "bloomberg markets." inflation is hot. do we know yet whether transitory is a dirty word? alix: according to bostick, it seems like it most definitely is. we don't yet know, is it permanent or is it going to be transitory? the s&p kind of going nowhere here. jp morgan eating hit by over 2%. the nasdaq able to climb its way higher as back in yields come in
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by 0.5%. sap higher for the year on cloud sales. that is really hoping it support the nasdaq 100. the curve is getting flatter because you are getting a little bit of selloff in the front and with yields pushing higher by two or three basis points. on the backend, some pretty strong buying. isn't that what you see when you're are singing you will see stagflation? the vix staying elevated as the buy the dip retail guys haven't been in force as much as they used to. what is going to be the driver of the s&p right now? let's get to some of those earnings. jp morgan is lower, posting third-quarter results. revenue for mergers nearly tripling and having -- and helping to push the bank to 3.5 trillion dollars. joining us as bloomberg's sonali basak. solid numbers. why is the stock down? sonali: even with that decline in fixed income, they more than
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made up for it in equities. a huge boon for jp morgan. but on the other hand, you have a signal that expenses are going to rise into next year. you also have a signal that it will take some time for the consumer to really come back in a lot of different areas. analysts really pressured analysts on what they can expect for loan growth and would not give direct guidance on average lung growth. -- average loan growth. seeing morehead for jobs, higher wages, but they are still worried as we are talking about inflation. guy: the curve is flatter today. with a solid set of numbers, but the stock has come a long way. sonali basak covering jp morgan. the earnings season continues for wall street banks. let's talk more about what
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sonali was talking about. inflationary pressures persisting in the u.s. economy. consumers paying more for food and housing. that was a big component of the pickup we have seen in the latest cpi data. here to give us an understanding of what we've gotten, bloomberg's economics and policy correspondent mike mckee. michael: here you got too low, here you got too high. the headline the burgers up to 5.4%, while the core stays flat at 4%. we will have that argument that goes on between the raphael bostics and richard claridas. the idea is you put this together with this, and maybe that means they can go ahead and taper. you mentioned food and housing. those were the two biggest components that accounted for more than half the rise in the cpi this month.
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food and home in particular up 1.2%. it is really rising quickly. bacon was up 19%. that's my favorite. that is going to be a lot. i put this in here, gasoline prices were up significantly as well, but natural gas is what everybody is talking about. i know guy this is roughly double what it was in august. we will see that continue. used cars, we thought they might go back up again. they continue to go down, and apparel prices, especially for women's suits, fall. so i guess alix and everybody else is still wearing sweatpants to work because of women's dresses not selling at this point, and they're cutting prices. it leaves us with a debate. when do we taper? when do we tighten? what do you wear on casual friday when every day is casual? alix: i have never, ever worn
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sweatpants to work. you should know better. mike mckee, thanks a lot. william shatner and three other passengers will launch into space and just moments on the second crude flight of blue origins -- second crewed flight of blue origin. ed ludlow is with us. ed: they have crossed the gantry. you can see their boarding into the capsule. we are tracking for lift off around 10:30 eastern time from vanhorn, texas, reaching speeds of mach three, geforce three times that of earth, and go into apogee of -- is that william shatner? that is william shatner getting into that capsule. of course, captain kirk. they will experience a few men it's of weightlessness. this is an exact replication of what bezos did in july, and move towards space tourism, an industry that could reach $4
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billion by july. guy: how long does it last? what will we see over the next few minutes? ed: the climb is three to four minutes. they spend two to three minutes in zero g weightlessness. they unbuckle from their seats and after a while of doing somersaults, floating around, if the mission goes successfully, they are instructed to get back into their seats because earth's graduate tatian -- earth's gravitational pull brings the capsule back down. the capsule slows down before deploying a shoot. so this is just very modest compared to what we saw from spacex, which you and i covered in such detail in florida last month. that was a three day trip. this is a three minute trip. care are -- there are two paying passengers on board, two guests, including william shatner.
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it is about the technology in getting a global audience interested at of a fully commercial rollout. alix: having william shatner go up in space is probably the best marketing scheme i've ever heard of in my entire life. who is jeff bezos talking to with that? ed: it is interesting because there are two feepaying customers. we have no idea how much they are being charged. by comparison, virgin galactic is charging $450,000 a pop for its four minutes of weightlessness. bezos has been really candid the whole time about this being a marketing exercise. he compares it to the early days of aviation, with those stunned pilots would go up in biplanes to demonstrate that the technology worked before it became much more mainstream, and flying on an airplane is very normal today. that is a part of it. it is not just selling high net
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worth customers. that is what the hope is, but it is also getting people interested in space so that it becomes more of a commonplace thing. but as you and i have discussed time and time again, especially in our coverage on the space race show, this is very much a rich man's sport. guy: and if you happen to be the former captain of the enterprise . alix: he's also kind of a rich man, too, but whatever. guy: i appreciate that, but i don't think he's in the same stratospheric orbit some of the others playing this game. ed, come back. i see we got 23 minutes to launch. we will continue to track what is happening on the launchpad. ed will come back as soon as we have started to see things getting a little hotter. we will figure out exact what is happening and how the whole thing is going. let's turn our attention a little closer to earth. how's lawmakers clearing a bill to increase the debt limit yesterday, basically sending the
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message of the president's desk. negotiators aim to delay the debt ceiling deadline until december. here with the latest, courtney rosen of bloomberg government. what happens now? it is going to the president. walk us through the mechanics of this process. courtney: president biden is expected to sign it, so they are good to go until december 3. after that, the situation returns to the same that we have been talking about for weeks now. so far, the arguments on capitol hill are mostly the same debate. republican senate minority told the president that his party will not help with the debt ceiling in december, and speaker pelosi on the democratic side is digging her heels in, saying democrats won't go at it on their own. we are back at the same debate. one difference this time is that speaker pelosi suggested she could support legislation that would allow the treasury department to lift the debt cap on its own. that would keep this all off capitol hill and is something
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they could do themselves. not sure yet if there is broad support in the democratic party to move that across the finish line, so it sets up a busy start to december, and we are back in the same debate once again. alix: courtney rosen of bloomberg government, thank you very much. appreciate it. coming up, earnings are here. they are kicking off. jp morgan's super solid numbers, yet the stock is down. sarah ponczek, ubs private management advisor, joins us next. this is bloomberg. ♪
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laura: let's check in on the bloomberg first word news. president biden turns his focus
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to supply chain transportation bottlenecks today. he will meet with corporate executives, labor leaders, and port officials. the president will highlight they have done to ease distribution backlogs. the congested port of los angeles announce a 24 hours a day, seven days a week effort to confront the squeeze on goods. vladimir putin says russia is ready to supply as much natural gas as europe needs. speaking at an energy forum in moscow, the russian leader said it was very important to stabilize the market. europe faces a gas crisis ahead of the winter due to a surge in prices and a drop in reserves. the european union will offer a fresh round of concessions to the u.k. over northern ireland in the newest brexit negotiations. the eu will propose cutting as much as 50% of the customs checks northern ireland and up to 80% of the sanitary checks on food imports. northern ireland protocol keeps it in the single market, unlike the rest of the u.k.
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global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm laura wright. this is bloomberg. alix: thanks so much. markets digesting earnings, plus inflation. what is already priced in is the question. joining us is sarah ponczek, ubs private wealth management financial advisor associate. we are headed into earnings. you've got jp morgan with great numbers. that stock is down. what is priced right now? sarah: always great to see you. we have to be careful. yes, we had earnings reports this morning. but 45 minutes into the trading session, we can't take too much of a definitive message away. what has been interesting is heading into this earnings season, markets have really been trading off of the macro. ever since early september, the last time markets hit all-time highs, there has been focus on d.c. drama, focus on the federal
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reserve, a more hawkish than expect it federal reserve and the expectation of higher bond yields, which may be we are not seeing so much this morning. but that is where the focus has really been. so now as we enter earnings season, we get to focus a little more on the fundamentals. we hear that going into every earnings season. but we also good to hear from the executives and get their boots on the ground view. so what are they seeing as it relates to labor shortages, wages, supply chain disruption? these are all the things that matter. these are all the things that markets and investors are focused on, but there are still plenty of questions remaining. guy: what we are expecting is that we are going to hear a lot about that, and there's going to be a lot of chat about the fact that companies' margins are under pressure. what using be topline is going to look like, though? we are focusing on the supply side shortages, but the demand side, the global economy still
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looks superstrong right now. sarah: the top line is expected to be very strong. we still are expecting to see revenue growth in the realm of 15% or so. i do think it is very important to sit back and look at all of this in perspective because even if we look at profits, what are we expecting for s&p 500 profits in the third quarter? we are not going to see anything like we saw any second quarter. the second quarter was very likely the peak. we saw s&p 500 profits grow 90%. that is not normal. yes, they were very easy comps. now the comps get a little more challenging. the environment is a little more challenging. profits are still expected to grow 30%. that is not a small number by any means. that is still very strong growth . revenues are still expect it to be very strong. we also have to keep in mind that in the second quarter, we actually saw record profit margins around 13% or so. so yes, we may see profit
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margins narrow a bit, but have companies been able to pass on costs to consumers? have they been able to absorb those costs? will they continue to do so as supply chain disruptions linger? alix: if they can actually sell them the product becomes the question, which leads me to apple, picking up steam to the downside. they basically say we don't have enough chips to sell the phones we promise we were going to sell. what do you do when apple starts to complain about supply chain issues? sarah: supply chain disruptions are no doubt right now at the forefront. we continue to see inflation i pressures as we did see this morning. it is not just coming from the demand side. is coming from the supply side, too. as we look at the past year or so, this has lingered longer than many economists, investors, markets expected these different options to last. however, at the same time, we are not necessarily of the belief that we will see supply
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chain disruptions remain permanently with us. as we continue to work through the virus, we could see normalization. guy: how do i position for easing of the supply chain story. jamie dimon is talking about it. others are talking about it as well. we are starting to see easing in the european gas story. a number of things are may be starting to come off the boil a little bit. how do i position for inflation to actually be transitory? sarah: we are still optimistic on the economic recovery, supply chain disruptions, inflationary pressures. when you look at a continuation of the economic recovery, we are still optimistic on financials, still optimistic on energy stocks. that is even after the fantastic run we have seen this year. financials up about 30%, roughly double the return we have seen of the s&p 500. energy up a whopping 50%. but i the same time, we still
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expect the yield curve to steepen as the economy does continue to recover. it is important to keep everything in perspective. yes, we are going to see slower growth going forward, but slower growth is not synonymous with slow growth. we are still talking about above trend growth this year, above trend growth next year, and that is an environment where you want to make sure you are embracing companies that are really more so tied to benefit from that. guy: always a pleasure. nice to see you. thank you very much, sarah ponczek, ubs private wealth management. coming up, apple's iphone 13 running into a little bit of trouble. it is starting to ripple down the supply chain. we are going to talk about that next. this is the impact on skyworks, down by 2.3%. on surprise the market reaction is in bigger, but i guess we have been talking about this for a while. this is bloomberg. ♪
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laura: it's time for the bloomberg best -- bloomberg business flash i'm laura wright. airlines has reported the first quarterly profit at a major u.s. carrier since the pandemic began , excluding federal aid. still, delta warns that rising jet fuel prices are a threat to staying in the black. the airline said third-quarter revenue returned to 66% of 2019 levels. opec is sounding a cautious note on the strength of oil demand, despite international crude prices surging above $80 a barrel for the first time in several years. opec has revised down its estimates global oil consumption this year. the cartel also says a spike in natural gas prices could boost petroleum use in some areas, but hurt it in others such as refining. the preferable bets against the housing market was
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immortalized in "the big short," but now he has denounced what he called warfare and challenged the notion that the rich don't pay enough taxes. that is the bloomberg business flash. guy: thank you very much, indeed. let's talk about what is happening with the ripple effect of apple news on the iphone 13. skyworks got a double hit today. got a downgrade from baird and it is sliding on the apple production news. let's find out exact a with this all means. they wilson has all the details. -- dave wilson has all the details. david: baird moving to the equivalent of hold frombuy, and they are focusing on the radio chip frequency business of skyworks. that is basically how cell phones communicate with semiconductors. baird is figuring growth across the industry slows to some thing like 10% this year from more
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than 30% last year, and even more of a slowdown after that. so that is one piece of the puzzle. the other piece is the story we reported out of apple. people familiar with the matter saying there may be cuts coming to iphone production this quarter, as many as 10 million phones. they were targeting 90 million, according to our reporting, talking about an 11% drop. this is a company, when you look at skyworks, that is really dependent on apple. you are talking 50% of revenue, and the second-biggest company, samsung, only about 5%, based on our supply chain data. that tells you how important apple is to skyworks. put it all together, and it does become an issue for this company. alix: what about other apple suppliers? dave: as far as that goes, you
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are seeing kind of a mixed bag. guy was wondering before the break why you haven't seen more of a move in skyworks and the other suppliers. for the most part, chipmakers are up-to-date. but you are seeing weakness in those companies that are most dependent on apple, broadcom, qorvo. qualcomm, as a contrast, they are buying back $10 billion of stock. they laid that out late yesterday, adding there might -- adding that much to their current repurchase program. that would explain why qualcomm is going more with the pack in chipmakers and less with the apple suppliers. alix: appreciate it. something else we are also watching right now is blue origin. it is scheduled to launch from vanhorn, texas. we are a little delayed now, but should be maybe within the next 15 minutes. the countdown clock looks paused
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for the time being. it is going to carry four individuals, two paying guests and two that will fly for free, one of them being william shatner. there's literally no better pr trick then getting the guy up in space. he's 90. guy: he's a nonagenarian. he will be the oldest person ever to go into space. this is a sub-orbital trip, but nevertheless, he will pass the crucial line and therefore become the oldest person ever to make that journey. as we were talking about earlier on, this is a huge pr stunt in some ways. they are trying to drum up future business. but as you say, can you think of a better person then william shatner, captain kirk? this is bloomberg. ♪
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>> there's a lot of talk about stagflation, but really what is going on is we have an inflationary boom. stagflation is when demand is slowing down and prices are remaining firm. right now, one of the reasons why prices are firm's because demand. alix: just as we got the latest u.s. cpi numbers that did come in hot. here with morris o'mara sharif that here was more is -- here with more is omair sharif, inflation insights founder. what was your read? omair: it was a little bit of everything in their, depending on your point of view. you can point to it happened with a big acceleration and rents. you can also look at things like used cars slowing down.
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there is still a lot of noise in this data. if i look at the three-month moving core cpi, we are running about 2.7% annualized right now. that is a big step down from where we were earlier this summer. there's going to continue to be noise over the next several months, but really, the fed is going to have to wait until next spring, early next summer to get a better read on where the underlying trend is in inflation. guy: what do you think they are going to be seen by then? does this continue, or is this a one-off price shock? omair: there's two different sets of things. one is the sticky prices. shelter is going to accelerate. we are running about 2.5% right now. i excite we will probably be closer to 4.5% by mid-2022. you are also going to get a big increase in medical prices going forward because of a quirk in the cpi data. we should start seeing health insurance really firm up and get
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medical care support next year. that is around 50% of core cpi that will be picking up steam. that is what people are pointing to, saying the fed is going to have an inflation problem on their hands. the flipside is you have to expect some sort of normality or normalization in the durables. things like used cars, furnishing. to be fair, that is very dependent on how long it take s supply chains to heal, but if these just flatten out, you will have a huge move down in that part of the inflation basket. so i think they are going to have to weigh these things to figure out what is the offset here. we are going to get higher shelter, weaker durables. where does that leave us? i suspect somewhere around 2.5% to 2.75% on cpi by next summer. alix: as we look for what is sticky and what is not, we are all blaming the supply issues from covid. are there any other supply issues that are maybe more permanent?
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i am thinking more like the trade war that was started years ago, or even the conflict between china and the west taiwan and china. -- the west or taiwan and china. omair: we have some movement where people might get relief, according to the biden administration. it is not clear how that is going to get out. but going back to 2018 when we first had these tariffs slept on to imported goods, from what i saw, there wasn't a massive impact on the u.s. cpi from trade. there were a couple of months where you saw some pop. host parties added 20 to 30 basis points on core cpi. i don't think that was really a huge story. whether we get some relief on that front, i don't know. but whether some of these changes are hunger lasting is sort of unfair. i think right now it is still about the short-term noise in the data. guy: how is this going to work its way into wages?
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omair: we saw a little bit of it already working its way into wages. people looking at, for example, fast food chains. we have seen a big pocket of wage growth in that sector over the last several months, and we have seen that filter its way into the cpi. over the last couple of months, we have seen some very big gains in limited service meals, fast food prices. those have started to accelerate. that is at least one sector where we can say it looks like the wage growth we are seeing is actually translating into higher price it -- into higher prices. we really haven't seen wage growth of this magnitude at least in the last 15 or 20 years really impact the cpi, so we have to be on the lookout for that certainly. right now, i still see some sort of limited pass-through from wages. i think there's more of a pass-through from what you are seeing in the ppi, and today's grocery impacts is when exam
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love that. you see product prices increase for the producers. they are passing some of that onto the consumers. you can see it in place is like furnishings as well. i think that is a bigger story for cpi right now than just the wage. alix: fair point. looking at the curve, it is pretty obvious what we are looking at, potentially a stagflation situation, where you have the fed hiking and short-term yields moving higher, but than that is going to create some sort of growth lack of impulse, you will see growth come down. you seeing buying in the long end. do you think that is the best way to be looking at this read? omair: i have a hard time with the stagflation story in general. i understand inflation data is up right now, and that is half of the story. for next year, you're talking about growth somewhere around 4% . to me, that is a pretty far
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price from stagflation. we are talking about fed rate hikes. we are looking for taper announcements starting in november. that is going to work its way through at least june or july of next year. my suspicion is the fed is still on a 2023 path because i still think there's some slack left in the labor market if they want to press on. i am not a huge buyer of the stagflation story just yet. i also think we need to keep in mind that if i am right about the durable story into next year, that is going to be a huge offset for inflation, so we will becoming way off of these numbers to something closer to the fed's target. guy: that is the sweet spot. what do you do if you are the fed at that point? you talked about running the economy hot. you are basically saying that we are going to wait for a fairly symmetrical event to start raising rates. where do you think that puts us?
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omair: it is always difficult to answer the question because there's what the fed should do and what they probably will end up doing. if we get inflation back down to somewhere near 2.5%, probably talking more like 2.25% by next quarter, then you can kind of hold off. if you are only 20 or 30 bps above the 2% target, you have to take stock of where the labor market is. if you believe you are at full employment, that is one thing, but there is evidence to suggest there is still a ways to go on the full implement front. if we continue that pace, it would take as well into 2023 to get back to the early 2020 labor market. if you can get the fed fed back to that range, i think you want to keep pushing on the labor market and trying to get to mass among employment as soon as you can. alix: we side and jolts, there are a lot of people -- we saw it in jolts, there are a lot of
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people quitting their jobs, presumably go into higher wages. is there any evidence that that is happening right now? omair: we have seen the wage growth data. i thing it is more anecdotal at this point. the cpi hasn't really moved dramatically, although it is starting to bubble a little bit. it is not clear that a lot of this movement is necessarily people jumping from one job to the next for that higher wage. there could be some shifts within sectors as well. we are seeing a huge number of quits in the manufacturing sector. they could be moving within manufacturing to other jobs, potentially for higher wages, but i don't know that it is clear yet. i still think the jury is out on that. guy: we will leave it there. thank you very much, indeed. really fantastic to get extra insight into what is happening here. come back next time.
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it would be great to get your take on what is happening as we evolve this story. coming up, just if humans away, 11 minutes away now from the launch of blue origin's second crewed spaceflight. we will figure out exact what is happening. a series of delays, but now it looks like we are back on track. this is bloomberg. ♪
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laura: this is "bloomberg markets." i'm laura wright. you're looking live at the principal room. coming up, aneta markowska. ♪ alix: william shatner and three other passengers will launch into's place -- into space.
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here with some details, bloomberg's ed ludlow. what are they doing? what are we going to see? ed: the four crew memory are sitting in their reclining seats , leading back, facing up to the heavens, waiting launch in around seven minutes. we had a series of holds where they stopped the countdown. basically, the reason blue origin and others like spacex do that is there are lots of different teams that have to land and lift off at the same time. it is a very precise science. much of it is run by artificial intelligence. so if one team is running behind, they simply pause the countdown to wait for it to catch up. it is often nothing sinister. it might just be a delay in some of the cooling systems or venting some of the byproduct gases, for example. they stopped fueling the rocket about three hours before launch. a lot of work has already been done. we are 6.5 minutes away. they will lift off, reach the moment of maximum dynamic pressure and stress on the vessel, and eventually reach a
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speed of about mach three, or 2000 miles or so and our -- or so an hour. on board, you heard me get excited about it earlier, william shatner, once captain kirk. jace bezos genuinely -- jeff bezos genuinely believes he needs to inspire mankind to want to go into space because we have finite resources on earth, and he feels that by looking to commodities in space, we can best ensure the future of our planet. that is the rationale bezos presents, at least. guy: stick around. five minutes 50 seconds to go until launch. also with us, a former nasa employee. what do the insiders think about the fact that we have liam shatner, captain kirk, going into space?
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reporter: well, you always need a good pitch man identified with the product, and i cannot think of a better person than william shatner, a.k.a. captain kirk,. -- captain kirk, full stop. alix: what does this do to the industry? keith: the model brought up is how commercial airlines started, where it was first barnstormers which you wondered if they were crazy. and then they found a way with bigger airlines to hopscotch across the pacific, and someone said, i can build a bigger plane . they served champagne, and said i can do it cheaper. it is a certain classic thing where you hope that people will say i want to do that. since it is all private, you want the classic competition seem to come into play where someone says i can fly more people for cheap.
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here's where you buy the ticket. guy: in terms of what this becomes, there was an endgame in terms of what happened with the aviation industry. it was about the journey, but it was about getting from a to b. what does the a to b look like with this industry? i appreciate the journey into space is epic, and the earth from their will be something i hope i get to experience. but nevertheless, is there a second iteration, i.e., this becomes art of the transport infrastructure -- i.e. this becomes part of the transport infrastructure? i am just curious whether tourism is an end in itself. keith: absently. just a few miles away, spacex is building the starship. it is sort of like having a tractor-trailer that can drive across country. the idea behind starship is that
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not only can it launch large payloads into space, to the moon or to mars, but the same vehicle could do what is called a ballistic hop so you can have flights from london to sydney in 50 minutes. given that these are completely reusable and built in the airline servicing mode, you could be launching these things not much different than a large airliner. alix: wow, that would be crazy. we are about t -30 right now for that launch. that brings up an excellent point. what is the business model? you mentioned a lot of different things. is the end goal low orbit space, to get satellites up there efficiently? is it going to be some kind of transport? the fact that we are all going to wind up living on mars and renting a condo, that is probably not going to happen. keith: well, you pretty much answered your own question in terms of it is more than one thing. it is launching satellites,
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launching people, taking things up, bringing them back, sending things out, and exporting the universe. it just comes back to, you can imagine the existing infrastructure model, whether it is airlines worshiping or automobiles. you just got to think, do i want to be a one trick pony? so far, it would seem these companies are not. if you look at blue origin, look at the history of amazon. this was a loss leader for decades, singing that eventually this would turn to a profit, and here you go. alix: keith, really appreciate it. we are looking at the launch beginning here. we are about one minute. thank you so much for joining us. let's take a listen in, about 90 seconds away from the launch.
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[no audio] >> all right, everybody. william shatner is off to go where very few have gone before. ladies and gentlemen, it is time to launch this rocket.
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godspeed, new shepard. >> t -10, nine, eight, 7, 6, 5, 4, 3, 2, 1. [rocket engines] >> she has cleared the tower. she is on to space with the second human spaceflight crew. what a launch. we are on our way to the first milestone on its flight to space.
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you can follow along with the altai at the base of this -- with the altimeter at the base of the screen, as well as these pedometer. we have confirmed max q, when the aerodynamic stresses on the vehicle were at their maximum.
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thank you again, everybody, for joining us for new shepard's second flight with william shatner on board. they are well on their way to space. so far, a clean burn on our blue engine 3 -- [indiscernible] alix: you are looking at a live shot of blue origin's second launch, ticking william shatner and three other individuals to space. that's get the update with
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bloomberg's ed ludlow. what are we looking at right now? ed: they are traveling to a distance of 62 miles above the apogee, their highest point. the capsule that sits on top of the booster carry them on the rest of that journey. that happens at around 47 miles above the earth. you can see that they are traveling at a speed of around 1600 miles an hour, under intense ge -- intense g force. the crew will be able to unbuckle from their seats from a couple of minutes, just a few minutes of weightlessness. as we know from the previous mission in july with jeff bezos, his brother, wally funk, and oliver damon, they will have the opportunity to do somersaults, high-five each other, whatever one wants to do in space when one is up there for a couple of minutes. but it is very short, and the critical safety element that when the control room signals in and the crewmember on the ground
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chimes in that they have to get back into their seats, that they do. 62 miles above the earth is technically in space, but still within earth's gravitational pull. the capsule will start to descend back down to earth and then start to pick up speed at even greater force than it did on the way up. so it will be under immense stress, and it is important they are back in their seats at that point. guy: william shatner is in his 90's. if he can tolerate this, i am assuming most people can tolerate this. this isn't completely debilitating stress they are coming under. 3g is quite a lot, but nevertheless manageable. i'm wondering what that tells us about the available pool of people that could potential ago up and replicate what they are doing today. ed: this is the product. this is what blue origin designed this to be. they want anyone to be able to fly with minimal training up to
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that 62 mile apogee. the crew arrives about three days before launch. the training largely involves the basics, getting in and out of the seat, doing the harness, how to respond in the event of an emergency. that said, in an emergency, the system is largely autonomous. it is designed to jettison the capsule to a safe distance from the booster. one of the requirements is that any crewmember can climb seven flights of stairs in under 90 seconds. i am not entirely sure that i can climb seven flights of stairs in under 90 seconds. but that was the minim standard in order to be able to go up. so you can imagine that william shatner was able to pass that. in terms of the demand, we simply don't know. we know from spacex that they are supply constrained. they basically said after the mission in florida, a three-day mission at a much higher altitude, that they hope to potentially do four to six lights over the next 12 to 18
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months, but that they had a massive backlog of willing paying customers. we just don't know. aboard this capsule, two are paying caps -- paying customers. the other two are being subsidized by amazon or jeff bezos -- by blue origin or jeff bezos. alix: just to refresh again, what are we looking at? ed: on the left-hand side of your screen, you have the booster coming down to earth. we are approaching several minutes into the mission, and around the 7:30 mark, you will see the booster land. at the moment it is using aerodynamics. you can see they position the rocket to slow it down using earth's atmosphere, the atmospheric resistance, and when it reaches a few thousand feet above the earth, it will deploy those engines. you will see that any moment now as the engines reignite with a quick burst to slow it down.
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the clamps will then deploy on the bottom of the booster, and it will land on the landing pad. let's listen in for a quick second. [booster engines] there you have it, like cgi, landing back in vanhorn texas on the landing pad. meanwhile, the capsule will have begun its dissent back down from that sub-orbital level, back down to earth. guy: let's bring back into the cover tatian keith ash the conversation -- into the conversation. this all seems to be very metronomic. the whole process seems to be very easy to understand and handle. in terms of the bottlenecks to
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getting this whole process to be accelerated, so there is maybe one of these things every month, what are the bottlenecks we need to overcome to change the rate of change in terms of getting this to become a bigger, wider industry that more people can participate in? keith: william shatner has son that anybody -- has shown that anybody can go up. i was over trained compared to what they did. i did six g's and i was in my late 50's. i think what you will find is that every time this happens, it becomes more of a familiar thing. nonprofits such as space for humanity are offering various ways, either contests or other things, to get what you would call a regular person, a non-millionaire, somebody to experience this because at the end of the day, it is marketing,
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but perhaps in a less overtly commercial way. a lot of this is psychological, but this vehicle is clearly designed, as you mentioned, it is automated. it is pretty difficult to do anything wrong with it, and it is designed to be scaled up. that was the point. we'll see many more of these vehicles as the demand increases, just like you see jetliners lined up at an airport. alix: there you have it comedy second successful space tourism launched by blue origin -- have it, the second successful based tourism launch by blue origin. there you see the capsule coming down. ed: this is a leisurely few miles an hour dissent back down to earth. you see what happened was the initial drag shoots deployed to slow down initially, and the bigger shoots deployed. it literally touches the capsule back down in vanhorn just a couple of miles from where it lifted off at a speed of a couple of miles an hour. it is a gentle landing.
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as far as we know from the communications from blue origin on twitter and what we are seeing on the live feed, everything was nominal, normal. the crew, including william shatner, were able to ask. just a few minutes of weightlessness and take in the views of earth. that was the selling point blue origin tried to get across. he windows you see on the capsule, there you have the touchdown, safely it seems, but we will wait for those live pics of the crew to actually exit the capsule. but the second successful crewed mission for blue origin. everyone forgets the blue origin successfully managed to land and reuse the booster before spacex did, but then encountered endless engineering struggles. they pumped money into this company at a rate, an extraordinary rate, and they have been playing catch-up, but this is certainly a substantive step forward. guy: what

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