WEBVTT - Louisiana Prepares For Climate-Linked Flooding, Moving Thousands: Flavelle 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg p m L Podcast. I'm pim Fox. 0:00:08.760 --> 0:00:11.440 Along with my co host Lisa A. Bramowitz. Each day 0:00:11.480 --> 0:00:15.000 we bring you the most important, noteworthy, and useful interviews 0:00:15.040 --> 0:00:17.520 for you and your money, whether you're at the grocery 0:00:17.560 --> 0:00:20.560 store or the trading floor. Find the Bloomberg p m 0:00:20.680 --> 0:00:33.240 L Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com. Well, 0:00:33.360 --> 0:00:36.159 let's sa turn our attention now to climate change and 0:00:36.200 --> 0:00:40.640 its real world implications. Christopher Flavel is our climate policy 0:00:40.680 --> 0:00:44.280 reporter for Bloomberg, and Christopher, thank you for being with me. 0:00:45.000 --> 0:00:48.760 Tell us the story about those people who live in 0:00:48.880 --> 0:00:54.480 certain areas of Louisiana. They're packing up because of the 0:00:54.600 --> 0:00:58.800 changes wrought by climate change. Yeah, and thanks for me 0:00:58.800 --> 0:01:01.560 on the show. Pin. Louise Ana has for a few 0:01:01.640 --> 0:01:05.160 years been the leader in the US in terms of 0:01:05.200 --> 0:01:07.960 dealing with climate change, not because it wants to, because 0:01:07.959 --> 0:01:10.800 it has to. It's land is sinking faster than anywhere 0:01:10.800 --> 0:01:13.000 else in the country, and so their force with these 0:01:13.000 --> 0:01:17.080 really in some cases radical ideas. There's a huge swath 0:01:17.280 --> 0:01:20.920 of Louisiana around the delta of the Mississippi River where 0:01:21.040 --> 0:01:23.880 land is sinking so fast and the sea is rising 0:01:23.959 --> 0:01:27.640 so fast that people have to struggle with flooding almost 0:01:27.720 --> 0:01:29.839 all the time. As a result, the state is trying 0:01:29.840 --> 0:01:34.319 to figure out how and when to move people out 0:01:34.360 --> 0:01:36.680 of those areas, and even more radical, and no one 0:01:36.680 --> 0:01:39.760 else doing this, how to figure out to ensure that 0:01:39.800 --> 0:01:42.720 no one else moves back in. No one, no other 0:01:42.760 --> 0:01:44.720 state that I'm aware of, is trying anything like this. 0:01:45.360 --> 0:01:48.080 Tell us about the money that's involved, because so we'll 0:01:48.080 --> 0:01:50.720 get to the individual stories in a second. But this 0:01:50.840 --> 0:01:54.920 costs money to do, and where does the money come from? 0:01:54.960 --> 0:01:57.800 So I think I think the approach in Louisiana is 0:01:57.920 --> 0:02:02.040 figure out their strategy first and then worry about money 0:02:02.080 --> 0:02:04.760 because it's a long term problem. And I think their 0:02:04.800 --> 0:02:08.080 idea is the cost of inaction would be huge as well, 0:02:08.120 --> 0:02:10.320 So the assumptions they'll find the money, I think that's 0:02:10.320 --> 0:02:12.760 probably true. There'll be a mix of federal funding. It's 0:02:12.760 --> 0:02:16.360 federal funding that that started the program that I was 0:02:16.360 --> 0:02:20.440 writing about, the l A Safe program. They're also getting 0:02:20.440 --> 0:02:23.520 money still from the BP oil spill. And look, Luisa's 0:02:23.560 --> 0:02:26.600 an argument is is they get so much federal disaster 0:02:26.720 --> 0:02:30.800 money from FEMA after hurricanes and from HUD that instead 0:02:30.800 --> 0:02:33.519 of using that money to keep on trying to rebuild 0:02:33.560 --> 0:02:36.560 people's lives where they are, it makes more sense to 0:02:36.600 --> 0:02:38.720 move them out of harm's way. That's a that's sort 0:02:38.720 --> 0:02:40.400 of a cliche. You hear that all around the country, 0:02:40.480 --> 0:02:43.600 especially after this year's hurricane season. Louisiana is really trying 0:02:43.639 --> 0:02:46.320 to make good on that, and say, what would it 0:02:46.360 --> 0:02:49.800 mean on a broad scale? Uh, not just rebuilding in 0:02:49.840 --> 0:02:53.920 different parts of the neighborhood, but really rebuilding miles away 0:02:54.160 --> 0:02:58.040 from where you were and emptying out entire swaths of 0:02:58.080 --> 0:03:01.520 the state. How many people would uh this effect? You 0:03:01.560 --> 0:03:04.400 have any idea? Yeah, I put that question to the 0:03:04.400 --> 0:03:07.960 state officials behind this program. The amount of land they're 0:03:07.960 --> 0:03:12.440 looking at is is enormous. It's it's bigger than Delaware 0:03:12.480 --> 0:03:15.040 and Rhode Island. Uh. And the number of people who 0:03:15.040 --> 0:03:19.079 live on that land, they guess is about sixty people. 0:03:19.200 --> 0:03:22.280 Now they are only looking, at least right now, at 0:03:22.280 --> 0:03:25.880 trying to move those who live outside of the levee system. 0:03:25.919 --> 0:03:29.440 And they don't know what share of that wouldn't be 0:03:29.440 --> 0:03:31.680 in that category will be outside of the levees. It 0:03:31.760 --> 0:03:33.560 could be it could be a few thousand, it could 0:03:33.600 --> 0:03:36.200 be tens of thousands. Um, but you know what, no 0:03:36.200 --> 0:03:38.480 one has tried anything on that scale. So even if 0:03:38.480 --> 0:03:42.040 it's just a thousand people, that would be just a 0:03:42.200 --> 0:03:45.120 groundbreaking idea. And the big question is going to be 0:03:45.160 --> 0:03:48.480 how much pushback will they get where But they get 0:03:48.520 --> 0:03:51.080 the pushback from the individuals, the people who are actually 0:03:51.080 --> 0:03:54.480 going to be displaced. To my great surprise, being down 0:03:54.520 --> 0:03:56.280 there a few days this week and talking to people 0:03:56.280 --> 0:03:58.840 in these areas, I got a pretty strong sense the 0:03:58.880 --> 0:04:02.000 people who who the state is trying to help, they 0:04:02.080 --> 0:04:05.160 realize what's going on. They are not in denial. They 0:04:05.240 --> 0:04:07.840 know that the flooding risk is so bad they're going 0:04:07.880 --> 0:04:10.840 to have to move eventually. Hate the pushback might come 0:04:10.880 --> 0:04:15.960 from developers who probably are aware likewise that in Louisiana's 0:04:16.000 --> 0:04:18.920 is real, but might be concerned about a precedent. It's 0:04:18.960 --> 0:04:21.679 one thing if Louisiana does this. If other states facing 0:04:21.720 --> 0:04:24.240 similar flood risk and is a lot of them start 0:04:24.279 --> 0:04:27.800 saying which parts of our geography should we declare off 0:04:27.839 --> 0:04:30.599 limits to new development, that could be a real issue 0:04:30.600 --> 0:04:35.760 for developers, for realtors, for for commercial industries that want 0:04:35.760 --> 0:04:38.359 to locate here. So I think they'll be wondering, like 0:04:38.440 --> 0:04:41.719 the rest of us. How far will this go? Christopher 0:04:41.800 --> 0:04:45.640 is the is the unintended consequence of hurricanes and flooding 0:04:45.760 --> 0:04:50.600 that people become more aware of whatever the reason for 0:04:50.640 --> 0:04:54.880 these catastrophes, their catastrophies that are going to ruin their lives, 0:04:54.880 --> 0:04:58.640 their property, and as a result, they are more inclined 0:04:58.760 --> 0:05:01.520 to go along with the idea to move out. Yeah. 0:05:01.680 --> 0:05:04.839 I think definitely there's a there's some sort of relationship 0:05:04.880 --> 0:05:08.840 between people being repeatedly hit by these disasters and being 0:05:08.880 --> 0:05:13.560 open to more and more um far reaching solutions. It's 0:05:13.600 --> 0:05:16.960 not a straight line. Often after one big event, people 0:05:17.000 --> 0:05:20.000 will say it happened once, it probably won't happen again. 0:05:20.320 --> 0:05:24.080 But after enough repeated disasters, my reporting says there's a 0:05:24.120 --> 0:05:26.479 real shift and what people are willing to accept and 0:05:26.480 --> 0:05:29.480 in what local officials are willing to endorse. A plan 0:05:29.520 --> 0:05:32.120 that might work in Louisiana would for the moment, be 0:05:32.240 --> 0:05:36.200 a really really tough sell in California or Maryland, or 0:05:36.279 --> 0:05:40.080 Virginia or New York State. But as time goes on 0:05:40.400 --> 0:05:43.360 and Louisiana looks less like an outlier uh and more 0:05:43.440 --> 0:05:46.560 like our future, I think there'll be more appetite to say, 0:05:46.760 --> 0:05:48.880 is it working there? In Louisiana, and if it is, 0:05:49.000 --> 0:05:51.560 should we try it where we are? Christopher, isn't there 0:05:51.560 --> 0:05:55.560 a federal designation that would allow people to apply for 0:05:55.640 --> 0:05:59.719 federal assistance if there was some kind of natural disaster, 0:06:00.240 --> 0:06:03.360 and that if that's taken away, that's just another push 0:06:03.560 --> 0:06:06.760 in the direction of leaving. Yeah, there's there. There's a 0:06:06.839 --> 0:06:11.280 designation um called the Under the Coastal Barrier Resources Act 0:06:11.560 --> 0:06:14.040 that was meant to protect areas that haven't been developed 0:06:14.080 --> 0:06:17.560 along the coast and keep them undeveloped. Louisiana saying let's 0:06:17.560 --> 0:06:19.920 apply that to areas that already have homes on them, 0:06:19.920 --> 0:06:22.480 which is a really radical idea, and it would say 0:06:22.680 --> 0:06:24.800 we are not going to help you if you're in trouble, 0:06:24.880 --> 0:06:27.240 so you better leave because if you don't, you'll be 0:06:27.240 --> 0:06:30.480 on your own. It's it's a really a very strong 0:06:30.560 --> 0:06:33.159 push for people to get out of these areas. Thanks 0:06:33.240 --> 0:06:37.200 very much, Christopher Flavelle, our climate policy reporter for Bloomberg, 0:06:37.240 --> 0:06:40.279 on how Louisiana is moving people out of areas that 0:06:40.320 --> 0:06:58.760 are ravaged by climate change. We've got something perhaps more 0:07:00.040 --> 0:07:02.680 were important, which is food. You can't exist without that. 0:07:02.720 --> 0:07:05.599 And Alan Stillman knows a lot about food and serving people. 0:07:05.640 --> 0:07:09.000 He is a restaurateur, is also the founder of Quality 0:07:09.160 --> 0:07:12.160 Branded Partners, and he may be better known as the 0:07:12.160 --> 0:07:15.160 founder of Smith and Wilenski, but he's also the founder 0:07:15.280 --> 0:07:17.920 of t G I. Friday's. Alan, thank you very much 0:07:17.920 --> 0:07:21.560 for coming into the studio. Let I want you to 0:07:21.600 --> 0:07:25.760 begin by telling the story of how you started in 0:07:25.800 --> 0:07:29.880 the business with t G I Friday's. Yeah. My relationship 0:07:29.960 --> 0:07:34.320 to the restaurant business walls exactly zero. But my relationship 0:07:34.360 --> 0:07:36.360 to having a beer on the way home was at 0:07:36.480 --> 0:07:39.480 least once a week. And us called our First Avenue 0:07:39.480 --> 0:07:43.120 in sixty three Street in Manhattan, had a bullet hole 0:07:43.160 --> 0:07:47.400 in the window, typical first avenue bar, And while drinking 0:07:47.400 --> 0:07:49.440 about beer, I said to the bartender, you know, there's 0:07:49.480 --> 0:07:51.920 an awful lot of young people that live in this area. 0:07:51.920 --> 0:07:54.840 You've got stewardess as, you've got models, you've got pilots. 0:07:55.400 --> 0:07:57.160 I wonder if you put some sort of on the 0:07:57.160 --> 0:07:59.679 floor and hung some Tiffany lights, would all those people 0:07:59.720 --> 0:08:02.280 come in here? And he said yeah, hey, yeah, and 0:08:02.320 --> 0:08:05.000 I walked away and walked out. I came back about 0:08:05.040 --> 0:08:08.680 ten days later and he said, hey, aren't you the 0:08:08.680 --> 0:08:10.560 guy that wanted to hang tipp and I said, I 0:08:10.600 --> 0:08:12.880 don't want to hang anything. I suggested it to you 0:08:13.640 --> 0:08:15.320 and he said, well, you ought to do it. I said, 0:08:15.320 --> 0:08:17.200 what do you mean. He said, well, why don't you 0:08:17.280 --> 0:08:19.720 do it? And I said, yeah, it's not a bad idea. 0:08:20.360 --> 0:08:22.760 I said, who was the owner of this corner place? 0:08:22.840 --> 0:08:26.880 He said, that's me, And fifteen minutes later I owned 0:08:26.880 --> 0:08:31.280 the bar and it was called the Good Tavern, and 0:08:31.320 --> 0:08:33.880 I immediately said, in my mind, I now need a name. 0:08:33.920 --> 0:08:36.360 And the name turned out to be t g I Fridays. 0:08:36.880 --> 0:08:39.120 And the rest of the story is as it is 0:08:39.200 --> 0:08:43.240 for about twelve units around the world today. And it's 0:08:43.280 --> 0:08:46.840 not as if this particular venture was your last, obviously, 0:08:46.920 --> 0:08:51.240 because you sold t g I Fridays and you decided 0:08:51.280 --> 0:08:54.200 you liked the business so much you're gonna expand even more. 0:08:54.280 --> 0:08:59.080 Tell us about how that went, like, actually expanded it 0:08:59.160 --> 0:09:02.120 while it was around in New York City, and I 0:09:02.200 --> 0:09:05.040 built uh ten or twelve of them around the country. 0:09:05.040 --> 0:09:07.480 But I also built Sundays, Monday's, Tuesdays, Wednesday. I was 0:09:07.480 --> 0:09:09.360 gonna say, you have an affinity for days of the week, 0:09:09.520 --> 0:09:11.640 and yeah. Then then I got out of the business 0:09:11.640 --> 0:09:14.080 for a while and left those I still owned it, 0:09:14.120 --> 0:09:17.480 but I wanted I lived over the South France and 0:09:17.840 --> 0:09:21.840 that was great. Six months I had gotten married and 0:09:21.880 --> 0:09:24.600 I had our four year old with us, and we 0:09:24.679 --> 0:09:27.559 had a very good time. But I also then learned 0:09:27.600 --> 0:09:30.959 about food and wine, and coming back to New York City, 0:09:31.480 --> 0:09:34.240 I put the two together because I didn't know that 0:09:34.320 --> 0:09:37.080 much about the food end of it, but I did 0:09:37.200 --> 0:09:40.400 learn a lot about wine. And I discovered that all 0:09:40.440 --> 0:09:44.360 the steakhouses in New York City were terrific steakhouses, and 0:09:44.400 --> 0:09:45.960 they were the best in the world, but none of 0:09:45.960 --> 0:09:49.120 them had wine lists. You'd walk in and they'd say, 0:09:49.320 --> 0:09:51.920 what would you like red or white? And it would 0:09:51.920 --> 0:09:54.720 come into tumbler and I said, you know, it doesn't 0:09:54.760 --> 0:09:57.600 really fit for a glass of great red wine they had. 0:09:57.600 --> 0:10:00.480 Don't change that. So I just I was going to 0:10:00.520 --> 0:10:03.720 open up baby steakhouse, and luckily enough, there was a 0:10:03.720 --> 0:10:06.280 big recession. I bought the corner of forty nine Street 0:10:06.280 --> 0:10:08.280 and Third Avenue, and we still in the corner of 0:10:08.320 --> 0:10:11.800 forty nine and third Avenue and Smith. Wilenski is now 0:10:11.840 --> 0:10:16.199 forty years old this year. Happy birthday, congratulators. Much forty 0:10:16.240 --> 0:10:20.040 year old restaurants don't exist very often it's a good 0:10:20.080 --> 0:10:23.560 thing to have and went from there. What do you 0:10:23.640 --> 0:10:26.600 believe to be one of the biggest differences from when 0:10:26.679 --> 0:10:32.120 you started Smith of Wilenski's and the way it operates now. Well, 0:10:32.200 --> 0:10:37.280 certainly wine, because almost every great steakhouse has a good 0:10:37.360 --> 0:10:41.880 to great wine list, and I believe that people associate 0:10:42.080 --> 0:10:46.640 great red wine with great red meat, and that never happened. 0:10:46.679 --> 0:10:49.200 Forty years ago, there was no such thing. So I 0:10:49.240 --> 0:10:52.240 think that's a very very big difference. And I didn't 0:10:52.280 --> 0:10:55.600 you start National Wine Week? Yes? I did National And 0:10:55.720 --> 0:10:58.480 I remember there was a story about you actually transporting 0:10:58.520 --> 0:11:00.360 something like a million dollars worth of line in a 0:11:00.400 --> 0:11:02.960 Brinx armored truck. Yes, we did that too. Well, we 0:11:02.960 --> 0:11:04.680 we We kind of have a lot of fun with 0:11:04.760 --> 0:11:07.199 this stuff. I mean, the restaurant business is one of 0:11:07.280 --> 0:11:10.880 the most difficult businesses in the world, and it's not 0:11:10.920 --> 0:11:13.440 only difficult to make money, but it's difficult just to 0:11:13.480 --> 0:11:17.360 stay open. So you need to come out with ideas 0:11:17.480 --> 0:11:21.679 and with all sorts of public relation and marketing gimmicks, 0:11:21.720 --> 0:11:24.680 if you will, in order to keep people interested in 0:11:24.720 --> 0:11:28.040 who you are what you are. And about a year 0:11:28.080 --> 0:11:31.640 after we opened, uh Smith of Lensky. We discovered somebody 0:11:31.640 --> 0:11:35.320 who was trying to sell a wine collection, which we bought, 0:11:36.080 --> 0:11:39.000 and after we've spent the billion dollars on the wine collection, 0:11:39.040 --> 0:11:42.000 we decided, well, why don't we transported by Brinks truck 0:11:42.040 --> 0:11:45.160 to the front of Smith and Lensky, which worked, and 0:11:45.200 --> 0:11:47.600 we got a couple of million dollars worth of publicity 0:11:47.640 --> 0:11:49.880 for it, along with the million dollars worth of wine. 0:11:50.720 --> 0:11:53.760 That whole idea of being a showman and an entertainer 0:11:53.840 --> 0:11:58.120 and a host that has become a much more important factor, 0:11:58.160 --> 0:12:01.600 it seems in the restaurant industry. I'm not sure that 0:12:01.600 --> 0:12:06.839 that's true anymore. It was going back before all of 0:12:06.880 --> 0:12:12.440 the new technology. The new technology has taken away a 0:12:12.480 --> 0:12:17.640 lot from the showmanship of the restaurant business, because the 0:12:17.760 --> 0:12:21.640 methodology of putting it together a restaurant, to making a reservation, 0:12:22.160 --> 0:12:25.679 to how you get a reservation, to getting into restaurants 0:12:25.840 --> 0:12:29.600 has taken away quite a bit from the showmanship of restaurateuring. 0:12:30.080 --> 0:12:34.400 It hasn't taken away from the showmanship of cheffing. The 0:12:34.520 --> 0:12:39.400 chefs still rule the market, and that is quite interesting 0:12:39.400 --> 0:12:43.240 there sort of the artists of the food world. Tell 0:12:43.320 --> 0:12:47.600 us about your son Michael, and why did he decide 0:12:47.600 --> 0:12:50.040 to follow in your footsteps or did you not not 0:12:50.160 --> 0:12:53.240 able to dissuade him from entering. No, it's actually the opposite. 0:12:53.400 --> 0:12:58.000 There was no there was no persuasion involved. Michael graduated 0:12:58.000 --> 0:13:02.280 from Brown University and is looking around for something autistic 0:13:02.320 --> 0:13:05.320 to do, and he was definitely not interested in the 0:13:05.320 --> 0:13:08.680 restaurant business. And a couple of years later he came 0:13:08.679 --> 0:13:10.320 to me and he said, you don't beginning to think 0:13:10.320 --> 0:13:12.480 maybe there's a little bit of art form in the 0:13:12.520 --> 0:13:14.959 restaurant business. And I said, well, if you don't have 0:13:15.000 --> 0:13:17.760 any art form, the restaurant business will not be in it, 0:13:17.840 --> 0:13:21.400 because we're in the high end of the restaurant business. 0:13:21.600 --> 0:13:25.840 And Michael decided he wanted to come on in. I 0:13:25.920 --> 0:13:28.560 then turned to my good friend Danny Myers and said, 0:13:28.640 --> 0:13:30.520 Danny put him to work for a year or so, 0:13:30.679 --> 0:13:33.600 which he did. Michael then came with us. He traveled 0:13:33.640 --> 0:13:37.040 around the United States opening up Smith of Wilenski's, and 0:13:37.240 --> 0:13:40.840 for the last ten years he has run a restaurant 0:13:40.920 --> 0:13:44.960 company that he sort of transferred from what we had 0:13:45.120 --> 0:13:49.640 into the Quality Restaurant Group and he's opening his own 0:13:49.880 --> 0:13:53.959 take on high end restaurants Quality meets quality Italian and 0:13:54.040 --> 0:13:56.760 he is also running around the country. He's opened in Denver, 0:13:56.880 --> 0:14:01.160 He's about to open up in Chicago. So uh, he 0:14:01.200 --> 0:14:04.760 did it by mistake, as I did it by mistake, 0:14:05.040 --> 0:14:07.520 and so far it's worked out wonderfully. He loves what 0:14:07.559 --> 0:14:10.160 he's doing and he's fantastic at it. Well, you're getting 0:14:10.200 --> 0:14:13.000 us ready for lunch, thanks very much. Alan Stillman is 0:14:13.000 --> 0:14:16.200 a restaurants whore, of course, a founder, Quality branded partner, 0:14:16.240 --> 0:14:19.320 founder of Smith and Wilinski's, founder of t g I Friday's. 0:14:19.840 --> 0:14:37.120 He knows all about the restaurant industry. Well, we want 0:14:37.120 --> 0:14:40.040 to know the real intentions of Bowing and whether they 0:14:40.040 --> 0:14:43.240 will be acquiring Ember Air. Here to help us understand 0:14:43.240 --> 0:14:46.800 the situation is George Ferguson, our senior Aerospace and Defense 0:14:46.840 --> 0:14:50.520 and Airlines analyst for Bloomberg Intelligence. George always a pleasure. 0:14:50.880 --> 0:14:55.000 Why would Boeing be interested in acquiring this Brazilian manufacturer 0:14:55.000 --> 0:14:58.960 of aircraft? Hey, Pam, Yeah, So as we look at it, 0:14:59.000 --> 0:15:04.320 we think that the Bombardier air bus uh sort of 0:15:04.320 --> 0:15:07.240 tie up with the C series earlier this year would 0:15:07.240 --> 0:15:11.640 be the reason. You know, So if you recall Bombardier 0:15:12.320 --> 0:15:14.640 face with tariffs and bringing the C series into into 0:15:14.640 --> 0:15:19.600 the US. Basically, you know, gave the program to Airbus, 0:15:19.640 --> 0:15:21.840 and now Airbus can go out and market airplanes to 0:15:21.960 --> 0:15:25.280 airlines from about a hundred forty to just over two 0:15:25.360 --> 0:15:29.040 hundred seats. That's there, and they can offer the C series, 0:15:29.080 --> 0:15:33.240 which which an airline can use for a hundred forty seats. 0:15:33.720 --> 0:15:36.200 We think that you know, what what Boeing might be 0:15:36.240 --> 0:15:39.920 doing here is looking to blunt Airbus' ability to market 0:15:40.440 --> 0:15:42.360 two airplanes like that. You know, if they had to 0:15:42.400 --> 0:15:45.760 tie up with embry Are, they could they can market 0:15:45.760 --> 0:15:50.160 two airlines and airplanes, two airplanes, one two families, I 0:15:50.160 --> 0:15:52.880 should say, one that would go from to about a 0:15:52.960 --> 0:15:58.200 hundred and ten fifteen seats and another that could go 0:15:58.320 --> 0:16:01.880 from a hundred and thirty up to you know, two hundreds. 0:16:01.960 --> 0:16:03.680 So we think it gives them sort of the same 0:16:03.720 --> 0:16:06.920 product palette as as Airbus. Okay, we would that be 0:16:07.040 --> 0:16:09.360 like the in terms of products we're talking about what 0:16:09.400 --> 0:16:12.400 the ember air one, the different variants of that, and 0:16:12.440 --> 0:16:16.040 then maybe even the smaller the one s. Yeah, I 0:16:16.040 --> 0:16:19.120 mean any thing about embry Are is that Embry's um 0:16:19.720 --> 0:16:23.200 their primary airplane, the E jet has the one seventy five, 0:16:23.240 --> 0:16:25.480 like you said to the one in the middle of 0:16:25.560 --> 0:16:28.160 refreshing it. So they're putting new engines on it and 0:16:28.240 --> 0:16:32.120 making it slightly larger. And yeah, that that airplane can 0:16:32.560 --> 0:16:36.120 can operate from seats two hundred and thirty. The other 0:16:36.120 --> 0:16:39.280 really neat thing about it is that one seventy five 0:16:39.360 --> 0:16:43.280 is very very successful selling into regional airlines in the 0:16:43.360 --> 0:16:46.920 United States. They buy the majority of airplanes I would 0:16:46.960 --> 0:16:49.400 say that are less than a hundred and thirty seats. 0:16:49.720 --> 0:16:53.360 They can only operate airplanes that are seventy six seats 0:16:53.360 --> 0:16:56.200 are less due to clauses in the pilot contracts that 0:16:56.280 --> 0:16:59.520 the main airlines that they fly four and so that 0:16:59.600 --> 0:17:02.200 airplane the one that is very successful because of its 0:17:02.880 --> 0:17:06.160 its product placement, and that would be potentially in Boeing 0:17:06.640 --> 0:17:09.560 lineup to market the airlines well Air Canada Express, I 0:17:09.600 --> 0:17:11.800 think they all they fly as just one example, the 0:17:12.240 --> 0:17:16.320 ember Air one seventy five. Does Boeing really need this 0:17:16.400 --> 0:17:18.440 deal because I thought that Boeing was putting a lot 0:17:18.440 --> 0:17:21.960 of effort behind the new seven three seven, the Max 0:17:22.480 --> 0:17:26.280 and the focus has been on not just the aircraft 0:17:26.560 --> 0:17:29.919 but on making it more fuel efficient and reducing the 0:17:29.960 --> 0:17:34.760 cost of operating the actual aircraft. Agreed, you know, agreed 0:17:34.800 --> 0:17:37.639 on that's what the focus has been. It's interesting. I 0:17:38.359 --> 0:17:41.920 wouldn't think this would have been this interesting to Boeing. So, 0:17:42.400 --> 0:17:44.840 you know, really what we've seen demand in the marketplace 0:17:44.880 --> 0:17:48.800 has been that airlines have been looking to fly larger airplanes. 0:17:48.840 --> 0:17:51.800 Pilot salary salaries have been going up, and they'd like 0:17:51.960 --> 0:17:55.280 to you know, um, expense it over more seats in 0:17:55.320 --> 0:17:56.879 the airplane. That's one of the ways they're sort of 0:17:56.880 --> 0:18:00.720 combating rising expenses. And so we've seen airlines again moving 0:18:00.720 --> 0:18:04.000 to larger and larger airplanes. We haven't seen a lot 0:18:04.040 --> 0:18:06.560 of orders for airplanes from a hundred to a hundred 0:18:06.600 --> 0:18:09.000 and thirty seats, So it kind of looks like a 0:18:09.080 --> 0:18:13.560 market to us that is betwixt and between. It's not 0:18:13.600 --> 0:18:16.440 there yet maybe yeah, And you know, but they keep 0:18:16.520 --> 0:18:19.439 stretching the size of the seven and eight three twenties, right, 0:18:19.440 --> 0:18:22.200 the latest iterations of those two narrow bodies that Boeing 0:18:22.200 --> 0:18:26.520 and Airbus are larger than their predecessors, and therefore the 0:18:26.560 --> 0:18:30.760 efficiency um, you know, the efficiency point gets pushed higher. 0:18:31.440 --> 0:18:33.399 So this might be a response to sort of that 0:18:33.520 --> 0:18:37.119 continuing increase of seven thirty seven and eight three twenty airlines. 0:18:37.200 --> 0:18:40.040 May you know if they're if they're running to less 0:18:40.119 --> 0:18:44.520 dense markets, they may really need something more efficient underneath 0:18:45.040 --> 0:18:49.000 that hundred and fifty seat point and in the Embry 0:18:49.080 --> 0:18:54.359 air and the C Series one three hundred could be 0:18:54.440 --> 0:18:56.760 that answer. So I think Boeing might be looking a 0:18:56.760 --> 0:18:58.960 little further down the road than you know. We we 0:18:59.000 --> 0:19:02.720 see evidence in order is at you know, the ability 0:19:02.760 --> 0:19:05.000 to compete in that space and offer a product. Okay, 0:19:05.000 --> 0:19:06.680 you gotta give me your thoughts though on the fact 0:19:06.680 --> 0:19:10.480 that the Brazilian government is still involved in ember Air. 0:19:10.560 --> 0:19:15.440 It started as a government financed company military contracts. For example, 0:19:16.160 --> 0:19:19.000 the government of Brazil is said already, at least according 0:19:19.040 --> 0:19:23.640 to one Brazilian newspaper, that majority control from Boeing not 0:19:23.800 --> 0:19:26.720 necessarily going to happen. Yeah, I think this is going 0:19:26.800 --> 0:19:29.040 to be a really hard deal to put together, and 0:19:29.080 --> 0:19:31.880 it's not going to look like a wholesale takeover by anybody. 0:19:31.880 --> 0:19:34.880 It's if it gets done, it will look like a venture. 0:19:34.920 --> 0:19:37.720 And that's exactly that. The reason you know it's uh 0:19:37.800 --> 0:19:42.960 Embry is Brazil's most important defense contractor they're they're aerospace 0:19:43.200 --> 0:19:47.120 national champion. The Brazilian government does have a golden share 0:19:47.160 --> 0:19:50.119 in it, so they can decide, you know, what the 0:19:50.119 --> 0:19:52.359 fate of the company is, and you know, they want 0:19:52.400 --> 0:19:56.000 it for high tech aerospace jobs. They want to foster 0:19:56.119 --> 0:19:59.720 high tech aerospace jobs in Brazil. Obviously, letting Boeing buy 0:19:59.800 --> 0:20:02.119 the whole thing and take it home isn't going to 0:20:02.200 --> 0:20:03.720 help them much. I don't think Bowing wants to take 0:20:03.760 --> 0:20:06.080 it home anyways. Um, I think it's going to be 0:20:06.160 --> 0:20:09.080 you know, there's always a lot of politics around defense 0:20:09.119 --> 0:20:12.479 contractors and things like that. The defense business doesn't make 0:20:12.520 --> 0:20:14.760 a lot of money, and Embry are also as a 0:20:14.800 --> 0:20:16.560 bust business that doesn't make a lot of money, and 0:20:16.600 --> 0:20:19.800 I don't think Bowing really wants those businesses. So I 0:20:19.840 --> 0:20:22.119 think this has to become sort of some sort of 0:20:22.280 --> 0:20:26.960 complex structure that might get the Brazilian government the aims 0:20:27.000 --> 0:20:29.600 they want out of this company and give Boeing the 0:20:29.600 --> 0:20:34.600 opportunity to market the Embry air you know aircraft. Well, 0:20:34.600 --> 0:20:36.720 thanks very much, it makes a lot of sense, and 0:20:37.000 --> 0:20:39.000 thanks for keeping an eye on this topic, and we 0:20:39.000 --> 0:20:40.399 know we're going to come to you in the future 0:20:40.440 --> 0:20:43.919 about it. Much appreciated. George Ferguson is our senior Aerospace, 0:20:43.960 --> 0:21:02.399 Defense and Airlines analyst for Bloomberg Intelligence. Well, here to 0:21:02.440 --> 0:21:05.199 help us understand what's going on in the housing market 0:21:05.240 --> 0:21:08.240 as it relates to the tax overhaul bill that the 0:21:08.240 --> 0:21:10.879 President has just signed is Jonathan Miller. He is the 0:21:10.920 --> 0:21:15.840 president and chief executive of Miller Samuel Jonathan. Great to 0:21:15.880 --> 0:21:18.960 have you with us. What do you make what do 0:21:19.000 --> 0:21:22.320 you make of the future for the UH? Well, let's 0:21:22.320 --> 0:21:26.119 start with the high end, high cost markets such as Manhattan, 0:21:26.640 --> 0:21:30.160 Westchester County and also other areas around the country, whether 0:21:30.200 --> 0:21:33.680 they be in Connecticut or in the state of Massachusetts 0:21:33.800 --> 0:21:38.960 or California high cost property. What's going to happen as 0:21:38.960 --> 0:21:42.320 a result of this tax overhaul plan? So I think 0:21:42.320 --> 0:21:46.920 they'll be downward pressure on housing prices, UH, as you 0:21:47.040 --> 0:21:52.720 stew higher in price across the US. The basic theme 0:21:52.800 --> 0:21:57.920 of this bill as it relates to housing favors being 0:21:57.960 --> 0:22:02.480 a landlord over HOMEO worship in general. And you know, 0:22:02.560 --> 0:22:04.280 I think I think the way to think of it 0:22:04.359 --> 0:22:08.920 is that, um, you know, someone that's buying a home 0:22:09.880 --> 0:22:13.600 has a certain safe financial footprint in terms of that 0:22:13.680 --> 0:22:16.080 they can afford as a payment. And so if you 0:22:16.119 --> 0:22:18.439 could just think of it is that you're adding some 0:22:18.560 --> 0:22:23.520 additional costs, meaning reduced UM deductions in the context of 0:22:23.760 --> 0:22:28.760 mortgage interest of seven hundred fifty thousand dollars of ten 0:22:28.800 --> 0:22:32.239 thousand dollar cap on real pay taxes, those sort of 0:22:32.359 --> 0:22:36.560 creep into that payment as a share, and we reduces 0:22:36.640 --> 0:22:40.000 principle and interest. UM. I don't think it's catastrophic in 0:22:40.080 --> 0:22:42.399 terms of I don't mean to exaggerate it, but it 0:22:42.520 --> 0:22:46.320 certainly applies downward pressure to these higher end housing markets 0:22:46.359 --> 0:22:49.240 far more than it would say in the middle in 0:22:49.280 --> 0:22:51.600 the Midwest, where you know a home price might be 0:22:51.920 --> 0:22:55.400 a hundred seventy five thousand dollars Jonathan, Will that pressure 0:22:55.600 --> 0:22:59.240 actually turn into lower prices or will it just be 0:22:59.480 --> 0:23:04.320 a argaining chip when it comes to negotiations. So it's 0:23:04.359 --> 0:23:07.680 interesting because one of the things that came out of 0:23:07.720 --> 0:23:10.600 the discussions on the tax bill was at the yet, 0:23:10.800 --> 0:23:13.879 you know, the higher cost markets, you know that the 0:23:13.960 --> 0:23:18.119 higher cost of housing would be offset by the uh, 0:23:18.160 --> 0:23:23.159