1 00:00:02,960 --> 00:00:07,280 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:09,960 --> 00:00:13,840 Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live 3 00:00:13,920 --> 00:00:17,279 Speaker 2: weekdays at ten am Eastern on Applecar playing Android Auto 4 00:00:17,360 --> 00:00:20,279 Speaker 2: with the Bloomberg Business App. Listen on demand wherever you 5 00:00:20,360 --> 00:00:24,520 Speaker 2: get your podcasts, or watch us live on YouTube. 6 00:00:24,960 --> 00:00:26,720 Speaker 3: We want to go to Ala Sabos. I've done him 7 00:00:26,720 --> 00:00:29,960 Speaker 3: for a long time. He's CEO of Compass Diversified. He's 8 00:00:30,000 --> 00:00:33,400 Speaker 3: joining us from California and he has a portfolio of 9 00:00:33,440 --> 00:00:35,199 Speaker 3: companies that he invests in a lot of them are 10 00:00:35,240 --> 00:00:37,280 Speaker 3: retail and a lot of them are in other sectors, 11 00:00:37,280 --> 00:00:38,640 Speaker 3: so we can kind of get to all of them. 12 00:00:38,800 --> 00:00:40,640 Speaker 3: And he's a great person to talk about retail but 13 00:00:40,680 --> 00:00:44,000 Speaker 3: also infleetion. That PC data kind of right in line 14 00:00:44,000 --> 00:00:46,479 Speaker 3: with where we were expecting it, So nothing moving the 15 00:00:46,520 --> 00:00:49,320 Speaker 3: needle either way. When it comes to the fed Alias, 16 00:00:49,360 --> 00:00:51,240 Speaker 3: it's great to see you again. It's been a while. 17 00:00:51,560 --> 00:00:54,400 Speaker 3: Let's just start with retail for a second. What is 18 00:00:54,440 --> 00:00:56,000 Speaker 3: your read on the consumer right now? 19 00:00:57,080 --> 00:00:59,640 Speaker 4: Yeah, good morning, Alex. Nice to see you as well. 20 00:01:00,120 --> 00:01:02,720 Speaker 4: You know, we're seeing the consumer and I hate to 21 00:01:02,920 --> 00:01:04,920 Speaker 4: continue to say the same thing, but we're seeing this 22 00:01:05,000 --> 00:01:09,520 Speaker 4: bifurcation where the more affluent consumer continues to spend and 23 00:01:09,680 --> 00:01:12,760 Speaker 4: spend if there's products that they want or services that 24 00:01:12,800 --> 00:01:17,920 Speaker 4: they like. And the you know, more inflation impacted consumer 25 00:01:18,000 --> 00:01:20,679 Speaker 4: on the lower end is having to make real choices, 26 00:01:20,720 --> 00:01:23,520 Speaker 4: and so that trend continues. But what I would say 27 00:01:23,560 --> 00:01:26,440 Speaker 4: we've seen, you know, kind of in the more recent 28 00:01:26,640 --> 00:01:30,800 Speaker 4: few months is just a steady weakening of kind of activity. 29 00:01:30,840 --> 00:01:33,560 Speaker 4: Our industrial business has seen a little bit of a 30 00:01:33,600 --> 00:01:37,480 Speaker 4: step down. The consumer business is growing quite rapidly, but 31 00:01:37,720 --> 00:01:39,880 Speaker 4: is starting to slow a little bit from where it was. 32 00:01:39,920 --> 00:01:42,319 Speaker 4: So I think the consumer is starting to weaken, and 33 00:01:42,360 --> 00:01:45,040 Speaker 4: we saw that with the you know, kind of retail 34 00:01:45,080 --> 00:01:47,840 Speaker 4: sales data which fell on a real basis today. 35 00:01:48,120 --> 00:01:49,960 Speaker 5: So Elias, a lot of folks are saying, when when 36 00:01:49,960 --> 00:01:52,600 Speaker 5: you look at the consumer out there, there's, boy, there's 37 00:01:52,640 --> 00:01:55,240 Speaker 5: at least two types of consumers out there, the ones 38 00:01:55,280 --> 00:01:57,920 Speaker 5: that are maybe asset rich and they're benefiting from the 39 00:01:58,000 --> 00:02:00,160 Speaker 5: rise in the stock market, the bond market, you know, 40 00:02:00,400 --> 00:02:03,440 Speaker 5: real estate, and those that aren't that are really filling 41 00:02:03,480 --> 00:02:05,240 Speaker 5: the brunt of inflation. Do you see that in kind 42 00:02:05,240 --> 00:02:06,920 Speaker 5: of your companies that you invest in. 43 00:02:08,240 --> 00:02:10,560 Speaker 4: Yeah, Paul, we you know, in the companies we invest 44 00:02:10,600 --> 00:02:14,280 Speaker 4: in mostly skew towards the more affluent consumer, and so 45 00:02:14,360 --> 00:02:17,880 Speaker 4: those are more balance sheet rich customers that we have, 46 00:02:18,120 --> 00:02:22,800 Speaker 4: and we've seen just really robust shopping patterns continue with 47 00:02:23,000 --> 00:02:26,600 Speaker 4: that consumer subset. We have a small portion of our 48 00:02:26,639 --> 00:02:29,720 Speaker 4: business that is more at the lower end and goes 49 00:02:29,760 --> 00:02:32,600 Speaker 4: through the mass market, and for the last couple of years, 50 00:02:32,600 --> 00:02:35,079 Speaker 4: that business has really been under pressure and we're seeing 51 00:02:35,120 --> 00:02:39,120 Speaker 4: that consumer you know, have to make choices, and so, yeah, 52 00:02:39,160 --> 00:02:42,639 Speaker 4: there is a real bifurcation. And right now being at 53 00:02:42,680 --> 00:02:45,480 Speaker 4: the affluent end is where the market is holding up. 54 00:02:45,520 --> 00:02:49,519 Speaker 3: Well, all I ask, what's the inflation and the supply 55 00:02:49,639 --> 00:02:52,600 Speaker 3: chain issue when it comes to retail. Where is it 56 00:02:52,639 --> 00:02:54,480 Speaker 3: now versus say, where it was a year ago? 57 00:02:55,960 --> 00:02:59,720 Speaker 4: Yeah, year ago, Alex, our inflation was principally coming from 58 00:03:00,040 --> 00:03:03,360 Speaker 4: well it's coming from multiple places, but principally from labor, 59 00:03:03,880 --> 00:03:06,880 Speaker 4: and there was a terrible imbalance between the demand for 60 00:03:07,000 --> 00:03:09,880 Speaker 4: labor and the supply of labor. You know, fast forward 61 00:03:09,919 --> 00:03:13,200 Speaker 4: to today, we're actually starting to see that reverse. In fact, 62 00:03:13,680 --> 00:03:15,720 Speaker 4: I just came out of all of our board meetings 63 00:03:15,720 --> 00:03:19,400 Speaker 4: about three weeks ago with our ten subsidiary companies. Nobody's 64 00:03:19,400 --> 00:03:23,880 Speaker 4: complaining about labor problems anymore. You know, we're seeing wage pressures, 65 00:03:24,000 --> 00:03:26,160 Speaker 4: you know, kind of elevated a little bit, maybe up 66 00:03:26,200 --> 00:03:29,640 Speaker 4: fifty basis points from historical norms. You know, if you 67 00:03:29,680 --> 00:03:31,440 Speaker 4: went back a year ago, that was two to three 68 00:03:31,520 --> 00:03:34,520 Speaker 4: hundred basis point. So you know, we're seeing those labor 69 00:03:34,560 --> 00:03:38,760 Speaker 4: pressures really subside right now. Where there are some pressures 70 00:03:38,800 --> 00:03:43,640 Speaker 4: on inflation gets more to distribution costs, so warehousing, transportation. 71 00:03:44,160 --> 00:03:46,720 Speaker 4: But in general, Alex, if there's one thing I would say, 72 00:03:47,200 --> 00:03:50,280 Speaker 4: our view on the street is that inflation is probably 73 00:03:50,320 --> 00:03:53,440 Speaker 4: following faster than what we even saw on today's report. 74 00:03:53,920 --> 00:03:56,440 Speaker 4: And I say that because we have customers that are 75 00:03:56,480 --> 00:04:00,240 Speaker 4: asking us now for price to concessions. We're doing the 76 00:04:00,280 --> 00:04:03,560 Speaker 4: same with our suppliers, and we're seeing just easing of 77 00:04:04,080 --> 00:04:06,520 Speaker 4: pressures across the board. So I think the trend in 78 00:04:06,520 --> 00:04:09,160 Speaker 4: inflation is going to be down and down pretty significantly 79 00:04:09,200 --> 00:04:10,160 Speaker 4: as the year up folds. 80 00:04:10,960 --> 00:04:15,080 Speaker 5: So Elias, I know you you're firm, your compass diversified 81 00:04:15,120 --> 00:04:19,200 Speaker 5: focuses on three verticals branded, consumer, niche, industrial, and healthcare. 82 00:04:19,200 --> 00:04:22,239 Speaker 5: Where are you seeing some of the best opportunities these days? 83 00:04:23,360 --> 00:04:25,640 Speaker 4: Yeah, I would say the best opportunities, Paul, are in 84 00:04:25,720 --> 00:04:29,560 Speaker 4: consumer you know, what we've seen is the more defensive sectors, 85 00:04:29,680 --> 00:04:33,520 Speaker 4: especially healthcare and where we invest as critical outsource services. 86 00:04:33,960 --> 00:04:36,560 Speaker 4: Those have really attracted a lot of demand and so 87 00:04:36,720 --> 00:04:39,279 Speaker 4: there's a lot of trades that are happening there, but 88 00:04:39,320 --> 00:04:43,600 Speaker 4: there are very elevated prices in the consumer business inside. 89 00:04:44,279 --> 00:04:47,600 Speaker 4: What we're seeing is the choppiness of consumer earnings coming 90 00:04:47,640 --> 00:04:50,279 Speaker 4: out of the pandemic has led a lot of financing 91 00:04:50,360 --> 00:04:53,240 Speaker 4: partners to exit that part of the market, and we're 92 00:04:53,240 --> 00:04:56,000 Speaker 4: not seeing private equity be as active. So we're seeing 93 00:04:56,080 --> 00:04:57,720 Speaker 4: good deals come in consumer. 94 00:04:58,080 --> 00:04:58,840 Speaker 6: We closed on. 95 00:04:58,839 --> 00:05:01,599 Speaker 4: A great company called the Honey Pot in January of 96 00:05:01,680 --> 00:05:05,560 Speaker 4: this year, and so this is a perfect opportunity and 97 00:05:05,640 --> 00:05:08,760 Speaker 4: market for us because competition is you know, pretty much 98 00:05:08,800 --> 00:05:12,039 Speaker 4: exited the consumer space right now, or it's you know, 99 00:05:12,240 --> 00:05:14,719 Speaker 4: very weak compared to where it's been, and that means 100 00:05:14,720 --> 00:05:17,440 Speaker 4: pricing comes down as supply of deals comes back into 101 00:05:17,480 --> 00:05:17,880 Speaker 4: the market. 102 00:05:18,360 --> 00:05:21,440 Speaker 3: What about industrials, niche industrials, what does that mean for 103 00:05:21,520 --> 00:05:23,280 Speaker 3: Alias Sable right now? 104 00:05:23,960 --> 00:05:29,960 Speaker 4: Yeah, mostly or mostly alex we're working in the industrial 105 00:05:30,040 --> 00:05:32,600 Speaker 4: tech side, so you know, think of things that are 106 00:05:32,600 --> 00:05:38,280 Speaker 4: helping with green energy and you know, other technology enabled 107 00:05:38,320 --> 00:05:42,880 Speaker 4: industrial processes. You know, the industrial business. This pricing is 108 00:05:42,920 --> 00:05:45,120 Speaker 4: actually quite high there too, believe it or not, on 109 00:05:45,160 --> 00:05:47,760 Speaker 4: the M and A side, and we're seeing some weakening 110 00:05:47,839 --> 00:05:49,800 Speaker 4: in some of the order books. So it's a little 111 00:05:49,800 --> 00:05:53,040 Speaker 4: bit confounding to us how pricing could be up as 112 00:05:53,120 --> 00:05:56,359 Speaker 4: high as it is with the economy showing some weakness 113 00:05:57,040 --> 00:05:59,880 Speaker 4: and that directly impacts industrial. But you know, I think 114 00:06:00,080 --> 00:06:02,880 Speaker 4: where we are, which is more in the industrial tech side. 115 00:06:03,080 --> 00:06:05,279 Speaker 4: You know, we think that stays in the United States, 116 00:06:05,320 --> 00:06:07,440 Speaker 4: and that is going to be something that grows, especially 117 00:06:07,480 --> 00:06:10,800 Speaker 4: with government policy changing and you know, a lot of 118 00:06:10,839 --> 00:06:13,480 Speaker 4: the advent of AI in the in the you know, 119 00:06:13,600 --> 00:06:17,000 Speaker 4: computing business. I think that's going to drive more manufacturing 120 00:06:17,040 --> 00:06:18,160 Speaker 4: here and we're going to be able to do it 121 00:06:18,160 --> 00:06:22,280 Speaker 4: pretty efficiently, especially in the higher tech industrial space. 122 00:06:22,640 --> 00:06:24,159 Speaker 5: Well, it's just real quickly, I'd love to get your 123 00:06:24,200 --> 00:06:27,320 Speaker 5: perspective here. What's the financing market the capital markets like 124 00:06:27,400 --> 00:06:30,320 Speaker 5: for a company like you'res looking to make acquisition, can 125 00:06:30,360 --> 00:06:33,440 Speaker 5: you fancy your deals here? Obviously rising interest rates makes 126 00:06:33,440 --> 00:06:34,200 Speaker 5: it a little bit tougher. 127 00:06:35,320 --> 00:06:37,400 Speaker 4: Yeah, So, Paul, we're a little bit different in that 128 00:06:37,480 --> 00:06:40,040 Speaker 4: we are a publicly traded company and when we acquire 129 00:06:40,080 --> 00:06:43,839 Speaker 4: we finance at the holding company, not at our subsidiary levels, 130 00:06:43,960 --> 00:06:46,559 Speaker 4: and so the markets have been, you know, fairly open 131 00:06:46,600 --> 00:06:48,599 Speaker 4: to us and have been, you know for the last 132 00:06:48,640 --> 00:06:51,560 Speaker 4: couple of years. You know, we have bonds that publicly trade, 133 00:06:51,920 --> 00:06:54,440 Speaker 4: and the pricing on those bonds have come down. They're 134 00:06:54,480 --> 00:06:58,200 Speaker 4: still up from where we issued in twenty twenty one, 135 00:06:58,240 --> 00:07:00,479 Speaker 4: but we issued sort of at the peak of the market. 136 00:07:01,080 --> 00:07:04,360 Speaker 4: So the capital markets remain very much open for us. 137 00:07:04,400 --> 00:07:06,520 Speaker 4: We've been able to raise capital both in the debt 138 00:07:06,600 --> 00:07:10,440 Speaker 4: markets and on the equity markets to fund our acquisition programs. 139 00:07:10,640 --> 00:07:13,080 Speaker 4: I would say in terms of the M and A markets, 140 00:07:13,120 --> 00:07:16,560 Speaker 4: where you have single asset LBO financing, we're starting to 141 00:07:16,600 --> 00:07:19,400 Speaker 4: see that market come back as well, but it is 142 00:07:19,480 --> 00:07:22,280 Speaker 4: coming back with higher pricing, and so it creates a 143 00:07:22,320 --> 00:07:25,880 Speaker 4: competitive advantage for us in our financing structure. But we 144 00:07:25,960 --> 00:07:29,160 Speaker 4: are seeing financing come back into the middle market M 145 00:07:29,200 --> 00:07:29,760 Speaker 4: and A space. 146 00:07:30,200 --> 00:07:32,240 Speaker 3: ALIAS thanks a lot. We really appreciate it. I love 147 00:07:32,240 --> 00:07:33,840 Speaker 3: that you can hit on all the different industries and 148 00:07:33,840 --> 00:07:36,560 Speaker 3: have a great window into the capital markets. Liasabos, CEO 149 00:07:36,960 --> 00:07:40,520 Speaker 3: of Compass Diversified. That ticker on the NIC is COODI 150 00:07:40,880 --> 00:07:45,520 Speaker 3: joining us from California. Interesting, right, I mean particularly with 151 00:07:45,560 --> 00:07:47,640 Speaker 3: the industrials, like the order books are a little soft, 152 00:07:47,640 --> 00:07:50,320 Speaker 3: but pricing is still strong, like and dislocations. But interesting 153 00:07:50,320 --> 00:07:52,200 Speaker 3: in the inflation read that we're actually going to see 154 00:07:52,200 --> 00:07:56,080 Speaker 3: inflation continue to come down. That could the FED be right? 155 00:07:56,320 --> 00:07:58,600 Speaker 5: Yeah, maybe the Fed does actually have a soft landing. 156 00:07:58,920 --> 00:08:00,440 Speaker 3: I mean that would be them. 157 00:08:02,000 --> 00:08:05,880 Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live 158 00:08:05,960 --> 00:08:09,480 Speaker 2: weekdays at ten am Eastern on applecar Play and Android 159 00:08:09,520 --> 00:08:12,280 Speaker 2: Auto with the Bloomberg Business app. You can also listen 160 00:08:12,400 --> 00:08:15,480 Speaker 2: live on Amazon Alexa from our flagship New York station, 161 00:08:15,880 --> 00:08:18,560 Speaker 2: Just say Alexa, play Bloomberg eleven. 162 00:08:18,360 --> 00:08:22,160 Speaker 3: Thirty Alex Steel alongside Paul So we need. This is 163 00:08:22,200 --> 00:08:24,600 Speaker 3: Bloomberg Intelligence Radio. We bring you all the top news 164 00:08:24,600 --> 00:08:27,720 Speaker 3: in business and finance through a lens of our amazing analysts. 165 00:08:27,760 --> 00:08:29,960 Speaker 3: They cover two thousand companies in one hundred and thirty 166 00:08:29,960 --> 00:08:33,880 Speaker 3: industries worldwide. We also tackle the big topics in the 167 00:08:33,920 --> 00:08:36,440 Speaker 3: world that we all have really big questions on, and 168 00:08:36,480 --> 00:08:39,080 Speaker 3: one of them is commercial real estate. We're all waiting 169 00:08:39,120 --> 00:08:42,160 Speaker 3: for that shoe to drop. Some shoes have dropped. We 170 00:08:42,240 --> 00:08:44,200 Speaker 3: get the news over the last week that s read 171 00:08:44,800 --> 00:08:48,760 Speaker 3: Barry Sternlick's reat is going to pause redemptions, very similar 172 00:08:48,760 --> 00:08:51,840 Speaker 3: to what be redid a few years ago. And where 173 00:08:51,840 --> 00:08:54,040 Speaker 3: are we in that cycle and why are we seeing 174 00:08:54,040 --> 00:08:57,000 Speaker 3: that now? Well? Joining us for his insight, which may 175 00:08:57,000 --> 00:09:00,400 Speaker 3: be a little counterintuitive, is Scott Reckler. He is CEO 176 00:09:00,520 --> 00:09:04,400 Speaker 3: and chairman of our x R Commercial real Estate in 177 00:09:04,440 --> 00:09:06,200 Speaker 3: New York. How you doing, Scott, I'm doing well. 178 00:09:06,240 --> 00:09:07,400 Speaker 6: Thanks for having me, Thanks. 179 00:09:07,200 --> 00:09:09,160 Speaker 3: For coming in. We really appreciate it. When I hear 180 00:09:09,200 --> 00:09:11,800 Speaker 3: a headline that s Reed is halting redemptions, that makes 181 00:09:11,800 --> 00:09:15,360 Speaker 3: me think, oh my goodness, Ciri is going to be toast. 182 00:09:15,440 --> 00:09:16,000 Speaker 3: What's happening? 183 00:09:16,040 --> 00:09:17,000 Speaker 6: What do you see? 184 00:09:17,120 --> 00:09:19,800 Speaker 1: So I think you know, and Barry's been very vocal 185 00:09:19,800 --> 00:09:22,160 Speaker 1: about this for a while, right, which is that there's 186 00:09:22,200 --> 00:09:25,000 Speaker 1: been a day of reckoning coming and it's someone been 187 00:09:25,000 --> 00:09:28,560 Speaker 1: delayed last year as the Federal Reserve got a little 188 00:09:28,559 --> 00:09:30,520 Speaker 1: bit more dubbish in their tone that people thought maybe 189 00:09:30,520 --> 00:09:33,600 Speaker 1: interest rates were coming down. But I think the industry 190 00:09:33,640 --> 00:09:35,800 Speaker 1: is now going through it's five stages of grief and 191 00:09:35,840 --> 00:09:39,240 Speaker 1: they've gone past the denial and are now at acceptance 192 00:09:39,360 --> 00:09:43,160 Speaker 1: and so a recognition that rates aren't going to come down, 193 00:09:43,280 --> 00:09:45,120 Speaker 1: and so it's not going to be some saving grace 194 00:09:45,160 --> 00:09:47,560 Speaker 1: and so they have to deal with these challenges. So 195 00:09:47,600 --> 00:09:51,840 Speaker 1: now the banks, the institutions are busy, you know, taking 196 00:09:51,880 --> 00:09:54,840 Speaker 1: the appropriate marks, taking the appropriate reserves, and now we're 197 00:09:54,840 --> 00:09:56,240 Speaker 1: gonna have to start going through the process. 198 00:09:56,240 --> 00:09:57,000 Speaker 6: It's a big problem. 199 00:09:57,080 --> 00:09:59,440 Speaker 1: Right There's a trillion dollars of debt that's coming due 200 00:10:00,120 --> 00:10:02,400 Speaker 1: this year, two trillion dollars over the next three years. 201 00:10:02,679 --> 00:10:05,480 Speaker 1: And most of this debt has been financed that, you know, 202 00:10:06,000 --> 00:10:10,760 Speaker 1: unofficiently interest rates that are not normal interest rates right there, 203 00:10:10,920 --> 00:10:12,600 Speaker 1: interest rates that are much lower for the last ten 204 00:10:12,640 --> 00:10:14,400 Speaker 1: to fifteen years that aren't going to come back. And 205 00:10:14,440 --> 00:10:16,400 Speaker 1: now we're going to have more normal rates. So we 206 00:10:16,480 --> 00:10:19,200 Speaker 1: have to go through a reequitization. Means that there's going 207 00:10:19,240 --> 00:10:21,040 Speaker 1: to be pain on the equity side, pain on. 208 00:10:21,000 --> 00:10:21,560 Speaker 6: The death side. 209 00:10:21,600 --> 00:10:24,440 Speaker 1: You saw today there's announcement about US Pensions having to 210 00:10:24,440 --> 00:10:27,679 Speaker 1: take more write offs on the commercial real estate. We've 211 00:10:27,720 --> 00:10:30,080 Speaker 1: seen you know, more banks having issues. I think that's 212 00:10:30,080 --> 00:10:32,600 Speaker 1: going to happen as well. So we're just in the 213 00:10:32,640 --> 00:10:35,719 Speaker 1: beginning now of facing this challenge and it's gonna be 214 00:10:35,760 --> 00:10:37,720 Speaker 1: something that's going to work its way through through this 215 00:10:37,800 --> 00:10:38,800 Speaker 1: year and into next year. 216 00:10:39,200 --> 00:10:41,200 Speaker 5: All right, So let's just say I've got a building 217 00:10:41,240 --> 00:10:44,320 Speaker 5: in midtown wherever a part of that two point two 218 00:10:44,320 --> 00:10:48,440 Speaker 5: trillion dollars that's coming. I go to my bank, the 219 00:10:48,480 --> 00:10:51,960 Speaker 5: interust rate's much much higher. The value of my property 220 00:10:52,160 --> 00:10:54,839 Speaker 5: is thirty forty fifty percent lower. I don't know something 221 00:10:54,840 --> 00:10:58,640 Speaker 5: along that magnitude. You only loan to value fifty percent. 222 00:10:59,320 --> 00:11:00,440 Speaker 5: Someone's got to get there. 223 00:11:00,720 --> 00:11:02,280 Speaker 6: Right, is exactly right? 224 00:11:02,320 --> 00:11:05,400 Speaker 1: So I mean, I think, and again this is different 225 00:11:05,440 --> 00:11:07,640 Speaker 1: than like the two thousand and eight crisis. Right when 226 00:11:07,640 --> 00:11:11,960 Speaker 1: two thousand and eight came, there was this injection of 227 00:11:12,120 --> 00:11:15,160 Speaker 1: capital that really sort of lifted all values. Right, In 228 00:11:15,200 --> 00:11:18,280 Speaker 1: this case, we have a structural period between the interest rates, 229 00:11:18,320 --> 00:11:20,960 Speaker 1: and then some types of properties aren't going to be competitive. 230 00:11:21,000 --> 00:11:23,440 Speaker 1: So you referenced an office building today, right, and then 231 00:11:23,480 --> 00:11:27,160 Speaker 1: that commentary office not only has the revaluation because of 232 00:11:27,160 --> 00:11:29,800 Speaker 1: interest rates, but people use office buildings differently, and some 233 00:11:29,840 --> 00:11:32,720 Speaker 1: buildings are going to be competitively obsolete. So you have 234 00:11:32,760 --> 00:11:35,520 Speaker 1: to pick the spots correctly, and then you have to 235 00:11:35,559 --> 00:11:39,040 Speaker 1: face that reality. So the bank has to adjust its loan, 236 00:11:39,559 --> 00:11:42,840 Speaker 1: the equity has to write off the equity and inject 237 00:11:42,880 --> 00:11:45,320 Speaker 1: new equity, and you have to pick which buildings are 238 00:11:45,360 --> 00:11:48,920 Speaker 1: going to be successful in this post pandemic world. I think, 239 00:11:49,160 --> 00:11:51,400 Speaker 1: you know, the other piece of this is multifamily, which 240 00:11:51,440 --> 00:11:53,800 Speaker 1: I think to me is more of the Achilles heel 241 00:11:54,080 --> 00:11:58,119 Speaker 1: for the broader regional bank because there's a heavy concentration 242 00:11:58,200 --> 00:12:01,200 Speaker 1: of multifamily in the regional bank around the United States. 243 00:12:02,120 --> 00:12:04,640 Speaker 1: They have something like fifty to sixty percent of their 244 00:12:05,520 --> 00:12:09,400 Speaker 1: book of business as loans, and those loans, even if 245 00:12:09,440 --> 00:12:11,360 Speaker 1: just from an interest rate, even if credit is good, 246 00:12:11,920 --> 00:12:14,160 Speaker 1: is underwater today, right. But now you also have new 247 00:12:14,160 --> 00:12:16,199 Speaker 1: supply coming into the market. So there's going to be 248 00:12:16,240 --> 00:12:19,000 Speaker 1: a couple of years of headwinds on that multi family 249 00:12:19,320 --> 00:12:20,520 Speaker 1: market that I think is gonna put a lot of 250 00:12:20,559 --> 00:12:23,200 Speaker 1: pressure on these regional banks going forward. 251 00:12:23,559 --> 00:12:25,839 Speaker 3: So when there is pressure, are you a buyer? Are 252 00:12:25,840 --> 00:12:26,319 Speaker 3: you a seller? 253 00:12:26,360 --> 00:12:27,360 Speaker 6: What do you do? Yeah? 254 00:12:27,400 --> 00:12:29,520 Speaker 1: It doesn't I think you these are could be a 255 00:12:29,559 --> 00:12:32,280 Speaker 1: generational moment of time to be a buyer, right, and 256 00:12:32,320 --> 00:12:34,000 Speaker 1: so we're active in the market. 257 00:12:34,280 --> 00:12:35,760 Speaker 6: But you need to be very selective. 258 00:12:35,800 --> 00:12:35,920 Speaker 7: Right. 259 00:12:35,960 --> 00:12:37,240 Speaker 6: It's not just about having the capital. 260 00:12:37,320 --> 00:12:39,800 Speaker 1: You have to have the capabilities to choose which are 261 00:12:39,800 --> 00:12:42,079 Speaker 1: the properties that are going to be successful. You need 262 00:12:42,120 --> 00:12:44,319 Speaker 1: to bring down the basis so you're not going to 263 00:12:44,400 --> 00:12:46,000 Speaker 1: do this and think values are going to come back. 264 00:12:46,000 --> 00:12:48,120 Speaker 1: You're not doing this on a bet that interest rates 265 00:12:48,160 --> 00:12:49,960 Speaker 1: are just going to fall and everyone's going to do well. 266 00:12:49,960 --> 00:12:51,280 Speaker 1: So you have to find a way how are you 267 00:12:51,320 --> 00:12:54,120 Speaker 1: going to create value? And you really can't be necessarily 268 00:12:54,240 --> 00:12:56,040 Speaker 1: to try to time the tap or the bottom. 269 00:12:56,120 --> 00:12:56,280 Speaker 6: Right. 270 00:12:56,360 --> 00:12:58,679 Speaker 1: So, we had a company that we sold in January 271 00:12:58,720 --> 00:13:01,000 Speaker 1: of seven, and you know, we didn't know it was 272 00:13:01,040 --> 00:13:03,160 Speaker 1: the top, but it felt frothy, right, so we sold it. 273 00:13:03,200 --> 00:13:05,360 Speaker 1: We came back in the market of August of nine. 274 00:13:05,520 --> 00:13:07,680 Speaker 1: We didn't know where we were in the cycle. It 275 00:13:07,760 --> 00:13:10,040 Speaker 1: just felt like the right time to enter. So moments 276 00:13:10,200 --> 00:13:12,280 Speaker 1: like this is where you want to start entering before 277 00:13:12,360 --> 00:13:15,319 Speaker 1: the all clear signal is sounded. But you have to 278 00:13:15,360 --> 00:13:18,160 Speaker 1: be very selective, but know that there's a lot more 279 00:13:18,200 --> 00:13:20,360 Speaker 1: trouble to come that's going to create more distress in 280 00:13:20,400 --> 00:13:22,200 Speaker 1: the system. 281 00:13:22,360 --> 00:13:25,840 Speaker 5: Scott, do we have a housing shortage in this country? 282 00:13:25,920 --> 00:13:27,559 Speaker 5: And if so, how did we get there? 283 00:13:28,080 --> 00:13:30,280 Speaker 1: Yeah, we definitely have a housing shortage in this country, 284 00:13:30,280 --> 00:13:33,839 Speaker 1: and it really it began to transpire after the last 285 00:13:34,000 --> 00:13:36,680 Speaker 1: financial crisis, right. You ended up being a situation where, 286 00:13:37,320 --> 00:13:40,600 Speaker 1: you know, the ability to build new housing became more challenging. 287 00:13:41,160 --> 00:13:44,000 Speaker 1: People more conservative. So there's you know, estimates about six 288 00:13:44,040 --> 00:13:48,440 Speaker 1: million units of shortages of housing in this country. And 289 00:13:48,520 --> 00:13:51,520 Speaker 1: now you know, because of what the low rates during 290 00:13:51,559 --> 00:13:55,680 Speaker 1: the pandemic, you've had this incredible amount of people buying 291 00:13:55,720 --> 00:13:59,040 Speaker 1: homes financing long so existing home sales aren't trading. 292 00:13:59,080 --> 00:14:00,400 Speaker 6: So we have this weirder nomaly. 293 00:14:00,760 --> 00:14:04,040 Speaker 1: Will interest rates are up, Housing prices have stayed strong, 294 00:14:04,280 --> 00:14:06,720 Speaker 1: and the market it hasn't really weakened in that regard, 295 00:14:07,440 --> 00:14:09,679 Speaker 1: and so you know it's going to exacerbate the problem, 296 00:14:09,720 --> 00:14:12,280 Speaker 1: right because now if you have less construction as we 297 00:14:12,320 --> 00:14:15,000 Speaker 1: get to two twenty twenty six, you're going to have 298 00:14:15,040 --> 00:14:18,280 Speaker 1: less housing today than you have the demand for housing. 299 00:14:18,400 --> 00:14:21,200 Speaker 3: So when you're getting the feeling that you know there's distress, 300 00:14:21,360 --> 00:14:23,640 Speaker 3: it's time to buy, even though they'll be more distressed later. 301 00:14:24,200 --> 00:14:26,120 Speaker 3: How do you get that feeling? Like is there a 302 00:14:26,240 --> 00:14:29,120 Speaker 3: screen that you look through to make sure like okay, 303 00:14:29,160 --> 00:14:31,440 Speaker 3: not that property, but yes this property and if they're 304 00:14:31,440 --> 00:14:33,280 Speaker 3: like right next to each other or something like, how 305 00:14:33,280 --> 00:14:34,360 Speaker 3: does your brain work with that? 306 00:14:34,440 --> 00:14:38,160 Speaker 1: Scott, No, I think you've got to be very concrete 307 00:14:38,200 --> 00:14:40,760 Speaker 1: and have you know then screen is a good word, right. 308 00:14:40,800 --> 00:14:43,400 Speaker 1: We have formulas so like in for office as an example, 309 00:14:43,880 --> 00:14:46,080 Speaker 1: you know, we called we created something called Project Kodak, 310 00:14:46,120 --> 00:14:47,840 Speaker 1: and we said, some buildings are going to be digital 311 00:14:48,120 --> 00:14:50,720 Speaker 1: that are going to be successful in the post pandemic world, 312 00:14:50,840 --> 00:14:52,840 Speaker 1: and some are going to be filmed and they're not going. 313 00:14:52,760 --> 00:14:55,000 Speaker 6: To be successful. And we said, okay, we want to 314 00:14:55,000 --> 00:14:55,840 Speaker 6: invest in digital. 315 00:14:55,880 --> 00:14:57,920 Speaker 1: And we put the whole the other criteria as to 316 00:14:57,960 --> 00:15:00,880 Speaker 1: what is digital and those are the the properties that 317 00:15:00,920 --> 00:15:01,440 Speaker 1: are digital. 318 00:15:01,600 --> 00:15:02,320 Speaker 3: What is digital? 319 00:15:02,520 --> 00:15:06,360 Speaker 1: So digital are buildings like this Bloomberg building right which 320 00:15:06,400 --> 00:15:09,440 Speaker 1: are you know, don't have places where people can collaborate people, 321 00:15:10,000 --> 00:15:12,000 Speaker 1: they don't want to come to work because you can 322 00:15:12,040 --> 00:15:14,680 Speaker 1: engage with people. They're in good communities, they're easy access 323 00:15:14,680 --> 00:15:18,160 Speaker 1: from public transportation, and so that that is something that 324 00:15:18,240 --> 00:15:22,640 Speaker 1: ultimately will be successful of attracting people. And so you 325 00:15:22,720 --> 00:15:25,640 Speaker 1: need digital buildings, but they still may have broken capital structures. 326 00:15:25,640 --> 00:15:29,480 Speaker 1: So our objective on investing is identify the digital buildings 327 00:15:29,880 --> 00:15:33,440 Speaker 1: with the broken capital structures, invest in them, fix the 328 00:15:33,480 --> 00:15:35,840 Speaker 1: broken capital structures. And when you do that, you see 329 00:15:35,840 --> 00:15:38,280 Speaker 1: the leasing. Like last year we least two million square 330 00:15:38,280 --> 00:15:41,240 Speaker 1: feet of space. This year, you know, so far we 331 00:15:41,320 --> 00:15:42,320 Speaker 1: have a million and a half square. 332 00:15:42,160 --> 00:15:43,360 Speaker 6: Feet of the leases out right. 333 00:15:43,440 --> 00:15:45,440 Speaker 1: So if you have the right building with the right 334 00:15:45,480 --> 00:15:47,760 Speaker 1: capital structure, there's a lot of tenants that want to 335 00:15:47,760 --> 00:15:48,280 Speaker 1: be there. 336 00:15:48,200 --> 00:15:50,080 Speaker 5: You know, I keep just stuck in my head from 337 00:15:50,080 --> 00:15:54,640 Speaker 5: maybe eighteen months ago a Bloomberg News article came out 338 00:15:54,680 --> 00:15:57,880 Speaker 5: and looked at Third Avenue, Manhattan between right where we 339 00:15:57,920 --> 00:16:00,520 Speaker 5: are today fifty eighth Street and Grand Central down to 340 00:16:00,560 --> 00:16:04,480 Speaker 5: forty second Street. Virtually you could write that whole part 341 00:16:04,480 --> 00:16:07,280 Speaker 5: of Manhattan off. And that shocked me, because you've got 342 00:16:07,280 --> 00:16:11,440 Speaker 5: some iconic buildings there, the Lipstick Building, just for example, 343 00:16:12,000 --> 00:16:14,200 Speaker 5: what do you those aren't most of them are not 344 00:16:14,320 --> 00:16:17,560 Speaker 5: A buildings. I've learned that term AA plus maybe there're 345 00:16:17,600 --> 00:16:19,720 Speaker 5: be and c. What do you do with something like that? 346 00:16:19,960 --> 00:16:22,560 Speaker 1: Right, So this is really where you need to start 347 00:16:22,560 --> 00:16:25,520 Speaker 1: thinking about adaptive reuse. Right, if a building is going 348 00:16:25,520 --> 00:16:29,200 Speaker 1: to be competitively obsolete and it's an office build and 349 00:16:29,400 --> 00:16:32,520 Speaker 1: what are the alternative uses? And so we as an example, 350 00:16:32,840 --> 00:16:36,280 Speaker 1: we're in the process of converting five office buildings to multifamily. 351 00:16:36,360 --> 00:16:38,720 Speaker 6: Really and I hear that's hard. It's right. 352 00:16:38,800 --> 00:16:40,880 Speaker 1: Some don't work, right, So you need to find ones 353 00:16:40,920 --> 00:16:43,000 Speaker 1: where you have the right type of footprint and the 354 00:16:43,080 --> 00:16:46,800 Speaker 1: right location so you can efficiently you know, adapt those floors, 355 00:16:46,880 --> 00:16:49,160 Speaker 1: and so that's something that is important. 356 00:16:49,200 --> 00:16:52,040 Speaker 6: But there's two caveats of that right. One is the 357 00:16:52,120 --> 00:16:53,000 Speaker 6: value that you. 358 00:16:52,920 --> 00:16:54,840 Speaker 1: Need to be investing in that building needs to be 359 00:16:54,880 --> 00:16:57,160 Speaker 1: almost the equivalent of land value, So you need to 360 00:16:57,160 --> 00:17:00,880 Speaker 1: have the capitulation of value coming down to that in 361 00:17:00,920 --> 00:17:02,960 Speaker 1: that mix there. And then the second you need incentives. 362 00:17:03,040 --> 00:17:06,240 Speaker 1: And so we're fortunate in New York the state just 363 00:17:06,280 --> 00:17:10,040 Speaker 1: passed a tax incentive that about ninety percent of the 364 00:17:10,680 --> 00:17:14,040 Speaker 1: tax that you normally pay is deferred for thirty five years. 365 00:17:14,040 --> 00:17:16,120 Speaker 1: You don't pay it for thirty five years, so if 366 00:17:16,160 --> 00:17:18,760 Speaker 1: you go through that process. So public policy can help 367 00:17:18,800 --> 00:17:21,320 Speaker 1: get that done. And that's something that I think is 368 00:17:21,320 --> 00:17:23,680 Speaker 1: going to be help accelerate this transition. 369 00:17:24,240 --> 00:17:27,920 Speaker 5: That's fascinating stuff. I mean, real estate's always a fascinating business, 370 00:17:27,960 --> 00:17:29,639 Speaker 5: but especially now. I don't know how these guys are 371 00:17:29,640 --> 00:17:29,800 Speaker 5: doing it. 372 00:17:30,400 --> 00:17:34,000 Speaker 3: I love that Kodak one that's might get that use that. 373 00:17:34,040 --> 00:17:35,760 Speaker 5: We're going to use that if we'll give you a 374 00:17:35,760 --> 00:17:39,359 Speaker 5: full attribution. But Scott Reckler, he's a CEO and chairman 375 00:17:39,440 --> 00:17:42,960 Speaker 5: of our XR. We're talking real estate here. Lots of opportunities. 376 00:17:42,960 --> 00:17:44,679 Speaker 5: I'm starting to hear more and more people come in 377 00:17:44,680 --> 00:17:46,879 Speaker 5: here and say, you know, selectively, we think there's some 378 00:17:47,080 --> 00:17:50,320 Speaker 5: time and some opportunities to make some acquisitions. So we 379 00:17:50,359 --> 00:17:52,240 Speaker 5: appreciate checking in with Scott. 380 00:17:54,880 --> 00:17:58,760 Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live 381 00:17:58,840 --> 00:18:01,960 Speaker 2: weekdays at ten am on Affle Car Playing and broun 382 00:18:01,960 --> 00:18:05,040 Speaker 2: Otto with the Bloomberg Business app. Listen on demand wherever 383 00:18:05,080 --> 00:18:08,920 Speaker 2: you get your podcasts, or watch us live on YouTube. 384 00:18:09,920 --> 00:18:12,280 Speaker 5: Ballax Stale, Paul Swiney, We're live here on a Bloomberg 385 00:18:12,280 --> 00:18:16,000 Speaker 5: Interactive Brokers studio. We're streaming live on YouTube each at 386 00:18:16,080 --> 00:18:18,359 Speaker 5: night over YouTube dot com and search Bloomberg Podcast and 387 00:18:18,359 --> 00:18:21,399 Speaker 5: that's where you'll find the video feed. Of course, the 388 00:18:21,440 --> 00:18:24,160 Speaker 5: news of the last twenty four hours, Former President Trump 389 00:18:24,200 --> 00:18:27,240 Speaker 5: found guilty in the hush money case. We've been talking 390 00:18:27,280 --> 00:18:27,920 Speaker 5: about it all day. 391 00:18:28,200 --> 00:18:30,320 Speaker 6: We will bring you more President. 392 00:18:30,440 --> 00:18:33,600 Speaker 5: Former President Trump is scheduled to speak at eleven am 393 00:18:33,680 --> 00:18:35,680 Speaker 5: Wall Street time. We will bring that to you when 394 00:18:35,720 --> 00:18:38,040 Speaker 5: he does speak. The question now, I think for a 395 00:18:38,040 --> 00:18:41,040 Speaker 5: lot of folks is now what happens? And for that 396 00:18:41,040 --> 00:18:44,159 Speaker 5: we're going to check in with Robert Mints, former federal prosecutor. 397 00:18:44,440 --> 00:18:47,080 Speaker 5: He's now a partner at the firm Macarter and English. 398 00:18:47,119 --> 00:18:49,880 Speaker 5: He joins us from beautiful Princeton in New Jersey, home 399 00:18:49,920 --> 00:18:54,080 Speaker 5: of hogy Haven via zoom. So anyway, best Hoby shop 400 00:18:54,080 --> 00:18:56,320 Speaker 5: in the world, hogy Haven, just say laying it out there, 401 00:18:56,359 --> 00:18:59,440 Speaker 5: we never had it. We'll go no blue remote there, Robert, 402 00:18:59,440 --> 00:19:01,520 Speaker 5: thanks so much for joining us here. I guess the 403 00:19:01,600 --> 00:19:05,159 Speaker 5: question on everybody's mind here. Robert is given these convictions 404 00:19:05,200 --> 00:19:09,800 Speaker 5: thirty fourth felon accounts. Well, former President mister Trump, will 405 00:19:09,800 --> 00:19:11,200 Speaker 5: he go to jail at all? 406 00:19:12,840 --> 00:19:15,520 Speaker 8: Well, that really is the big question here, and that's 407 00:19:15,520 --> 00:19:18,719 Speaker 8: the decision that is going to be made solely by 408 00:19:18,800 --> 00:19:21,960 Speaker 8: the trial judge. The way it works in York and 409 00:19:22,000 --> 00:19:25,119 Speaker 8: everywhere else in a criminal case, the jury is the 410 00:19:25,160 --> 00:19:28,119 Speaker 8: finder of fact. They ultimately determine guilt or innocence, and 411 00:19:28,160 --> 00:19:31,080 Speaker 8: we know in this case they convicted the former president 412 00:19:31,080 --> 00:19:33,680 Speaker 8: on all thirty four accounts. Now, the question of sentencing 413 00:19:34,200 --> 00:19:35,920 Speaker 8: is entirely up to the judge and it could be 414 00:19:35,960 --> 00:19:39,880 Speaker 8: anywhere from a probationary sentence to up to four years 415 00:19:39,920 --> 00:19:44,560 Speaker 8: in prison or other possible terms and conditions home confinement. 416 00:19:45,440 --> 00:19:47,200 Speaker 8: There could be a lot of different things the judge 417 00:19:47,240 --> 00:19:50,040 Speaker 8: could do here, but it's a very weighty decision. And 418 00:19:50,080 --> 00:19:53,159 Speaker 8: a very difficult decision for this judge to decide what 419 00:19:53,280 --> 00:19:55,720 Speaker 8: is the right thing to do here, given the gravity 420 00:19:55,720 --> 00:19:59,360 Speaker 8: of this case, given who the defendant is here, and 421 00:19:59,400 --> 00:20:02,720 Speaker 8: given the that the defendant in this case, I think 422 00:20:02,880 --> 00:20:05,680 Speaker 8: we're not going to see former President Trump coming in 423 00:20:05,760 --> 00:20:08,600 Speaker 8: on sentencing day and expressing remorse. 424 00:20:08,320 --> 00:20:09,160 Speaker 4: For what he did. 425 00:20:09,359 --> 00:20:11,879 Speaker 8: Those are all factors that the judge will consider in 426 00:20:12,000 --> 00:20:13,040 Speaker 8: fashioning his sentence. 427 00:20:14,000 --> 00:20:16,239 Speaker 3: How does a judge come up with a sentence? How 428 00:20:16,280 --> 00:20:16,960 Speaker 3: does that work? 429 00:20:18,760 --> 00:20:21,679 Speaker 8: Well, typically what a judge does is he or she 430 00:20:22,160 --> 00:20:26,000 Speaker 8: will look at the way similarly situated defendants have been 431 00:20:26,000 --> 00:20:28,320 Speaker 8: treated in the past. So people who have been convicted 432 00:20:28,560 --> 00:20:31,199 Speaker 8: of the same type of types of offenses, do they 433 00:20:31,240 --> 00:20:34,359 Speaker 8: typically go to jail? If so, for how long In 434 00:20:34,400 --> 00:20:37,840 Speaker 8: this kind of case, it's a record keeping case. Usually 435 00:20:37,920 --> 00:20:40,879 Speaker 8: for a first defender, they will not be jail time. 436 00:20:41,160 --> 00:20:44,000 Speaker 8: But there's also other factors that the court will consider 437 00:20:44,160 --> 00:20:47,160 Speaker 8: the age of the defendant. As I mentioned earlier too, 438 00:20:47,480 --> 00:20:52,080 Speaker 8: whether the defendant expresses remorse, acknowledges that they committed a crime, 439 00:20:52,480 --> 00:20:55,320 Speaker 8: that they've done something wrong. And I think the judge 440 00:20:55,480 --> 00:20:58,680 Speaker 8: will also take into account, at least in some manner, 441 00:20:58,880 --> 00:21:01,720 Speaker 8: the fact that there are other pending criminal cases out there, 442 00:21:01,960 --> 00:21:05,480 Speaker 8: and also the way in which former President Trump conducted 443 00:21:05,520 --> 00:21:08,680 Speaker 8: himself during the trial. As you remember, the judge imposed 444 00:21:08,680 --> 00:21:11,919 Speaker 8: a gag order that he was found in contempt several 445 00:21:11,960 --> 00:21:14,480 Speaker 8: times for making statements that the judge found to have 446 00:21:14,560 --> 00:21:17,640 Speaker 8: crossed the line. All of that may factor into this, 447 00:21:17,960 --> 00:21:20,520 Speaker 8: and the judge will have to decide does he or 448 00:21:20,560 --> 00:21:23,399 Speaker 8: does he not send former President Trump to jail, If so, 449 00:21:23,520 --> 00:21:24,160 Speaker 8: for how long. 450 00:21:25,680 --> 00:21:27,679 Speaker 5: That's kind of where I wanted to go, Robert. We're 451 00:21:27,880 --> 00:21:31,600 Speaker 5: waiting comments from former President Trump at eleven a m 452 00:21:31,840 --> 00:21:34,600 Speaker 5: from Trump Tower. So my question is is he still 453 00:21:34,600 --> 00:21:37,040 Speaker 5: subject to the gag rule because it doesn't appear that 454 00:21:37,119 --> 00:21:39,639 Speaker 5: he's going to hold back on any commentary about the 455 00:21:39,720 --> 00:21:40,960 Speaker 5: judge or the trial itself. 456 00:21:42,240 --> 00:21:44,399 Speaker 8: Well, that's a great question, and I think it's a 457 00:21:44,440 --> 00:21:48,520 Speaker 8: little bit unclear, but generally probably not. Because the gag 458 00:21:48,640 --> 00:21:52,040 Speaker 8: order was really imposed so that former President Trump would 459 00:21:52,080 --> 00:21:55,520 Speaker 8: not make comments that might have affected witnesses or might 460 00:21:55,560 --> 00:21:58,080 Speaker 8: have affected jurors. None of that really is relevant at 461 00:21:58,080 --> 00:22:00,920 Speaker 8: this point. The case is over, there's been a conviction, 462 00:22:01,320 --> 00:22:03,600 Speaker 8: So I think we're going to see former President Trump 463 00:22:03,680 --> 00:22:05,960 Speaker 8: speak freely. I don't think we're going to see the 464 00:22:06,119 --> 00:22:09,679 Speaker 8: judge in any way react to those comments unless it 465 00:22:09,720 --> 00:22:13,560 Speaker 8: gets very personal with court personnel or with the judge. 466 00:22:13,600 --> 00:22:15,520 Speaker 8: But otherwise I think the judges is going to let 467 00:22:15,560 --> 00:22:18,040 Speaker 8: it go, but he will be watching. And I do 468 00:22:18,080 --> 00:22:21,280 Speaker 8: think those issues on statements that are made by former 469 00:22:21,320 --> 00:22:25,080 Speaker 8: President Trump may ultimately factor into his decision about whether 470 00:22:25,160 --> 00:22:27,720 Speaker 8: or not to send former President Trump to jail. 471 00:22:27,760 --> 00:22:28,840 Speaker 6: And if so, for how long. 472 00:22:29,760 --> 00:22:32,200 Speaker 3: If this trial had been held in any other state 473 00:22:32,280 --> 00:22:35,000 Speaker 3: but say California or New York, would it have gone 474 00:22:35,040 --> 00:22:38,000 Speaker 3: any differently or would it be reasonable to have expected 475 00:22:38,080 --> 00:22:42,920 Speaker 3: this outcome in the majority of durors and trials. 476 00:22:44,359 --> 00:22:48,480 Speaker 8: You know, that's a great question and obviously impossible to answer. 477 00:22:48,680 --> 00:22:52,160 Speaker 8: I mean, I do think we saw a fairly diverse 478 00:22:52,320 --> 00:22:55,440 Speaker 8: jury in the sense that you had people from various 479 00:22:55,480 --> 00:23:01,199 Speaker 8: backgrounds socioeconomically, people who were from different parts of the city. 480 00:23:01,520 --> 00:23:03,359 Speaker 8: So there was some balance to that. And you do 481 00:23:03,440 --> 00:23:06,080 Speaker 8: have to remember that both the prosecution on the defense 482 00:23:06,440 --> 00:23:08,920 Speaker 8: played a role in picking this jury. They were able 483 00:23:08,960 --> 00:23:11,480 Speaker 8: to exercise what it's called peremptory challenges, which means to 484 00:23:11,560 --> 00:23:14,280 Speaker 8: strikers who they did not want on the jury for 485 00:23:14,359 --> 00:23:17,760 Speaker 8: whatever reason, and so they both jointly ended up picking 486 00:23:17,800 --> 00:23:19,879 Speaker 8: this jury. But you're correct in that there is a 487 00:23:19,960 --> 00:23:22,640 Speaker 8: jury pool the limited number of people that you'd find 488 00:23:22,640 --> 00:23:24,400 Speaker 8: in Manhattan, And the question is would they be any 489 00:23:24,440 --> 00:23:27,800 Speaker 8: different than a jury pool in some other state. The 490 00:23:27,840 --> 00:23:30,440 Speaker 8: answer is, we really don't know. The reality is that 491 00:23:30,600 --> 00:23:34,280 Speaker 8: probably is different from state to state. But that happens 492 00:23:34,320 --> 00:23:37,160 Speaker 8: in every criminal case across the country, no matter where 493 00:23:37,160 --> 00:23:39,359 Speaker 8: it's tried, whether you're in federal court or state court, 494 00:23:39,600 --> 00:23:42,400 Speaker 8: there's going to be a difference, perhaps, for example, if 495 00:23:42,400 --> 00:23:44,600 Speaker 8: you try the case in Florida, or if you try 496 00:23:44,640 --> 00:23:46,800 Speaker 8: a case in New York. Then even within a state, 497 00:23:46,840 --> 00:23:49,200 Speaker 8: for example, if you try a case in Miami versus 498 00:23:49,200 --> 00:23:51,760 Speaker 8: in the northern part of Florida, you may find different 499 00:23:51,800 --> 00:23:54,800 Speaker 8: jurors there. So that does happen all the time. But 500 00:23:54,920 --> 00:23:58,040 Speaker 8: bear in mind that jurors are instructed, and if we 501 00:23:58,080 --> 00:24:00,639 Speaker 8: assume they follow the instructions of the Corps, they are 502 00:24:00,640 --> 00:24:03,320 Speaker 8: supposed to simply put all their biases aside. They're supposed 503 00:24:03,320 --> 00:24:05,879 Speaker 8: to make a decision based solely on the evidence that's 504 00:24:05,920 --> 00:24:09,239 Speaker 8: presented to them during the process of the trial, and 505 00:24:09,280 --> 00:24:12,040 Speaker 8: that's how they make their decision. But obviously they bring 506 00:24:12,080 --> 00:24:15,199 Speaker 8: their backgrounds, they bring common sense to it, and jurors 507 00:24:15,240 --> 00:24:17,800 Speaker 8: are different, So it is quite possible that as this 508 00:24:17,880 --> 00:24:19,920 Speaker 8: case has been tried in some other part of the country, 509 00:24:20,000 --> 00:24:21,280 Speaker 8: there might have been a different result. 510 00:24:21,480 --> 00:24:24,200 Speaker 9: Hey, Bob John Tucker here real quick, just got a 511 00:24:24,600 --> 00:24:28,600 Speaker 9: less than a minute left. Has Trump now violated the 512 00:24:28,640 --> 00:24:32,879 Speaker 9: pre trial conditions of release in the Georgia case? 513 00:24:35,640 --> 00:24:38,640 Speaker 8: That's a good question. I don't actually know the answer 514 00:24:38,720 --> 00:24:42,440 Speaker 8: to that. The fact that there's a conviction here and 515 00:24:42,440 --> 00:24:45,199 Speaker 8: whether that how that may play into his terms of 516 00:24:45,240 --> 00:24:48,400 Speaker 8: release in other states. It is something that those judges 517 00:24:48,720 --> 00:24:51,600 Speaker 8: may consider, but I don't think it's going to ultimately 518 00:24:51,600 --> 00:24:54,479 Speaker 8: affect his conditions of release. I don't think you're going 519 00:24:54,560 --> 00:24:58,200 Speaker 8: to see anything more stringent being imposed upon and based 520 00:24:58,240 --> 00:24:59,000 Speaker 8: upon this conviction. 521 00:25:00,080 --> 00:25:03,560 Speaker 3: So my final question for you, why do we have 522 00:25:03,600 --> 00:25:06,480 Speaker 3: to wait so long to get a sentencing here? Like 523 00:25:06,520 --> 00:25:09,120 Speaker 3: it just seems to prolong it in all the angst 524 00:25:09,720 --> 00:25:11,120 Speaker 3: in the political sphere. 525 00:25:12,600 --> 00:25:15,840 Speaker 8: Well, it's really not unusual for the time between a 526 00:25:15,920 --> 00:25:18,639 Speaker 8: conviction and a sentencing to be at least a couple months. 527 00:25:18,640 --> 00:25:21,560 Speaker 8: In federal court is often even longer than that because 528 00:25:21,560 --> 00:25:25,560 Speaker 8: what happens is there is a report that's prepared by 529 00:25:25,640 --> 00:25:28,359 Speaker 8: the court system they ask all kinds of questions about 530 00:25:28,359 --> 00:25:31,080 Speaker 8: the defendant, the background of the defendant. And this is 531 00:25:31,080 --> 00:25:34,159 Speaker 8: an unusual case. Obviously, everybody knows who foreign President Trump is, 532 00:25:34,320 --> 00:25:36,679 Speaker 8: they know his background. But it's going to be treated 533 00:25:36,800 --> 00:25:38,600 Speaker 8: like any other case. And so it has to go 534 00:25:38,640 --> 00:25:42,160 Speaker 8: through the same processes and procedures that any other defendant would, 535 00:25:42,280 --> 00:25:44,520 Speaker 8: and the report has to be prepared. The defense has 536 00:25:44,520 --> 00:25:47,280 Speaker 8: an opportunity to submit information, and this is generally how 537 00:25:47,320 --> 00:25:49,960 Speaker 8: long it takes, at least a couple months before actual 538 00:25:50,000 --> 00:25:51,320 Speaker 8: sentencing after the conviction. 539 00:25:51,600 --> 00:25:53,639 Speaker 5: Robert, thank you so much for joining us. Really appreciate it. 540 00:25:53,720 --> 00:25:56,440 Speaker 5: Robert Mints. He's a former federal prosecutor. He's also partner 541 00:25:56,480 --> 00:26:00,760 Speaker 5: now with McCarter and English. Joining us from Princeton, New Jersey. 542 00:26:01,040 --> 00:26:04,920 Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live 543 00:26:05,000 --> 00:26:08,040 Speaker 2: weekdays at ten am Eastern on Apple card Play and 544 00:26:08,040 --> 00:26:11,320 Speaker 2: androyd Otto with The Bloomberg Business. You can also listen 545 00:26:11,440 --> 00:26:14,520 Speaker 2: live on Amazon Alexa from our flagship New York station, 546 00:26:14,880 --> 00:26:18,399 Speaker 2: Just Say Alexa playing Bloomberg. Eleven thirty. 547 00:26:19,040 --> 00:26:22,840 Speaker 5: Former President Donald Trump speaking at Trump Tower in Middon 548 00:26:23,160 --> 00:26:28,159 Speaker 5: and press conference in response to the finding being found 549 00:26:28,359 --> 00:26:29,159 Speaker 5: guilty of. 550 00:26:30,200 --> 00:26:31,800 Speaker 3: For thirty four accounts, thirty four. 551 00:26:31,640 --> 00:26:34,960 Speaker 5: Counts of felony. So again some of the typical response. 552 00:26:35,000 --> 00:26:37,760 Speaker 5: I guess we would expect he's calling this a sham 553 00:26:38,520 --> 00:26:42,560 Speaker 5: and kind of being railroaded, so not certainly supporting. 554 00:26:42,080 --> 00:26:42,679 Speaker 6: What is going on. 555 00:26:42,720 --> 00:26:44,480 Speaker 5: Let's go to Joe Matthew right here, he's co host 556 00:26:44,480 --> 00:26:47,760 Speaker 5: of the Bloomberg Balance of Power. Joe, I guess nothing 557 00:26:48,200 --> 00:26:50,760 Speaker 5: new in the comments from former President Trump. 558 00:26:50,920 --> 00:26:51,960 Speaker 6: What are your thoughts here? 559 00:26:53,320 --> 00:26:56,320 Speaker 7: No, this is a pretty much rehash of the stump speech, 560 00:26:56,400 --> 00:26:58,480 Speaker 7: to be honest, although he's going deep now, all the 561 00:26:58,560 --> 00:27:01,080 Speaker 7: way back to January sixth, whether he attacked the Secret 562 00:27:01,160 --> 00:27:04,920 Speaker 7: Service in the car. He started with the border, which 563 00:27:05,000 --> 00:27:07,000 Speaker 7: was interesting. Of course, this was built as a press 564 00:27:07,040 --> 00:27:10,639 Speaker 7: conference on his conviction. Yesterday, he's still in over a 565 00:27:10,680 --> 00:27:13,199 Speaker 7: half an hour, has not taken one question. He's just 566 00:27:13,760 --> 00:27:16,159 Speaker 7: going off the cough on a list of grievances. The 567 00:27:16,160 --> 00:27:18,320 Speaker 7: one thing I'll point out here you can fact check 568 00:27:18,359 --> 00:27:20,040 Speaker 7: this stuff all day long, is that when he gets 569 00:27:20,080 --> 00:27:22,400 Speaker 7: into as he said, quote, this is all done by 570 00:27:22,400 --> 00:27:26,160 Speaker 7: Biden and his people. This is done by Washington. This 571 00:27:26,240 --> 00:27:28,280 Speaker 7: is a state case. You guys are sitting in New 572 00:27:28,359 --> 00:27:31,800 Speaker 7: York and it actually has no direct connection to the administration. 573 00:27:31,280 --> 00:27:36,639 Speaker 3: Or Washington, meaning that it's a right, yes, understood. So 574 00:27:37,640 --> 00:27:39,879 Speaker 3: what else really stands out though, in terms of what 575 00:27:39,880 --> 00:27:43,359 Speaker 3: we can then expect in that campaign trail as we 576 00:27:43,440 --> 00:27:45,840 Speaker 3: go forward, and this is being used as a political 577 00:27:45,880 --> 00:27:48,600 Speaker 3: pinball within that well. 578 00:27:48,480 --> 00:27:51,080 Speaker 7: I think we've seen it already. Political prisoner is how 579 00:27:51,119 --> 00:27:56,440 Speaker 7: he's billing himself, retribution towards how the campaign began. And look, 580 00:27:56,520 --> 00:27:59,240 Speaker 7: if this comes down to a jailhouse call into the 581 00:27:59,280 --> 00:28:02,600 Speaker 7: Republican convention in Milwaukee, and we don't know if that's 582 00:28:02,640 --> 00:28:04,880 Speaker 7: going to be the case or not, he will probably 583 00:28:04,920 --> 00:28:07,640 Speaker 7: find a way to spend that to his advantage. I mean, look, 584 00:28:07,680 --> 00:28:11,480 Speaker 7: he's been selling mugshot t shirts for months and months now, 585 00:28:11,520 --> 00:28:14,240 Speaker 7: making money on it. So this is someone who, as 586 00:28:14,240 --> 00:28:16,480 Speaker 7: we see here in the process, he's making people laugh 587 00:28:16,800 --> 00:28:18,960 Speaker 7: the way that he's making fun of Joe Biden. But 588 00:28:19,440 --> 00:28:21,960 Speaker 7: the questions that we have are about the long term 589 00:28:22,080 --> 00:28:27,000 Speaker 7: corrosive impact that this could have, particularly on independent voters, 590 00:28:27,040 --> 00:28:29,119 Speaker 7: suburban women and folks who are looking now at a 591 00:28:29,119 --> 00:28:31,840 Speaker 7: convicted felon. And we'll see what happens after he meets 592 00:28:31,880 --> 00:28:34,320 Speaker 7: with his probation officer and is eventually sentenced. 593 00:28:35,119 --> 00:28:36,280 Speaker 6: So, Joe, I guess yeah, you. 594 00:28:36,359 --> 00:28:39,640 Speaker 5: Raised the political question is what the impact will be 595 00:28:39,760 --> 00:28:44,120 Speaker 5: on I guess just folks that are not in either camp, 596 00:28:44,160 --> 00:28:46,120 Speaker 5: some of those moderates, that people in the middle. Have 597 00:28:46,160 --> 00:28:48,040 Speaker 5: we seen any polling on that, Joe. 598 00:28:49,480 --> 00:28:52,400 Speaker 7: We have, and some of it is right here at Bloomberg. 599 00:28:52,400 --> 00:28:54,680 Speaker 7: We were asking in January in our Bloomberg Swing state 600 00:28:54,720 --> 00:28:57,880 Speaker 7: pole what a conviction would do or an incarceration, and 601 00:28:57,920 --> 00:29:01,400 Speaker 7: we did find within single digits the number of folks 602 00:29:01,520 --> 00:29:03,680 Speaker 7: who said that they in fact would change their vote 603 00:29:03,680 --> 00:29:06,600 Speaker 7: on that. But it's different when it's hypothetical. We didn't 604 00:29:06,600 --> 00:29:09,040 Speaker 7: even know what trial we'd be talking about then, And 605 00:29:09,080 --> 00:29:10,959 Speaker 7: there are posters in the field right now who are 606 00:29:10,960 --> 00:29:12,720 Speaker 7: going to have an interesting look at what we see here. 607 00:29:12,760 --> 00:29:15,280 Speaker 7: You could actually see a pop, almost a post state 608 00:29:15,320 --> 00:29:17,920 Speaker 7: of the Union, in this case, a post verdict pop 609 00:29:18,000 --> 00:29:21,440 Speaker 7: for Donald Trump. But does he keep that also fundraising? 610 00:29:21,640 --> 00:29:24,040 Speaker 7: This does not seem to be bothering the mega donors 611 00:29:24,080 --> 00:29:27,320 Speaker 7: who are gravitating toward Donald Trump, as well as the 612 00:29:27,400 --> 00:29:30,640 Speaker 7: small dollar donors. As I mentioned before he started here, 613 00:29:30,680 --> 00:29:34,280 Speaker 7: thirty five million dollars raised online since the beginning of 614 00:29:34,320 --> 00:29:36,440 Speaker 7: this whole thing, since the verdict less than twenty four 615 00:29:36,480 --> 00:29:39,640 Speaker 7: hours ago. They crashed the win red system that Trump 616 00:29:39,720 --> 00:29:41,960 Speaker 7: uses to raise money last night. You couldn't even get 617 00:29:42,000 --> 00:29:43,719 Speaker 7: on that app to raise money for a while if 618 00:29:43,720 --> 00:29:46,360 Speaker 7: you wanted to. So this has been a mobilizing event. 619 00:29:46,480 --> 00:29:48,960 Speaker 7: Let's see where it goes days and weeks from now. 620 00:29:49,360 --> 00:29:51,320 Speaker 3: I actually, this is a great point that you made 621 00:29:51,360 --> 00:29:53,800 Speaker 3: that when you guys did the polling in terms of 622 00:29:53,800 --> 00:29:56,360 Speaker 3: if Trump is convicted, will people still vote for him? 623 00:29:56,560 --> 00:30:01,440 Speaker 3: That didn't specify which conviction. I think I missed that detail, 624 00:30:01,880 --> 00:30:05,280 Speaker 3: meaning that maybe the Georgia election case a conviction, they're 625 00:30:05,640 --> 00:30:07,480 Speaker 3: very different than a hush money trial. 626 00:30:08,720 --> 00:30:10,720 Speaker 7: Well, I guess that's true. I think the idea of 627 00:30:10,840 --> 00:30:13,760 Speaker 7: convicted felon right when we think about the rhetoric or 628 00:30:13,800 --> 00:30:15,640 Speaker 7: just sort of the aura that that brings. It's not 629 00:30:15,680 --> 00:30:19,560 Speaker 7: a good thing not to mention someone incarcerated. That's just 630 00:30:19,640 --> 00:30:23,000 Speaker 7: a different look too if you're someone behind bars. Not 631 00:30:23,040 --> 00:30:26,360 Speaker 7: that either would keep him from running on a legal level. 632 00:30:27,040 --> 00:30:29,520 Speaker 7: But so this is kind of the unknown. He's dealing 633 00:30:29,560 --> 00:30:31,720 Speaker 7: with the cards. He's been Dealty's good at that. Joe 634 00:30:31,720 --> 00:30:33,520 Speaker 7: Biden has been pretty good at staying out of it. 635 00:30:33,520 --> 00:30:36,600 Speaker 7: Outside of his one decision recently to send Robert de 636 00:30:36,680 --> 00:30:39,840 Speaker 7: Niro to the Lower Manhattan Courthouse. I'm not sure what 637 00:30:39,880 --> 00:30:42,400 Speaker 7: else they have up their sleeve right now other than 638 00:30:42,400 --> 00:30:44,680 Speaker 7: to let Donald Trump keep talking. I think that's Joe 639 00:30:44,720 --> 00:30:46,320 Speaker 7: Biden's strategy as we speak. 640 00:30:46,520 --> 00:30:50,720 Speaker 5: And Joe, I guess we had some conflicting legal opinions 641 00:30:50,840 --> 00:30:54,000 Speaker 5: today as to whether former President Trump is still under 642 00:30:54,440 --> 00:30:57,440 Speaker 5: the gag rule. He seemed to say clearly in his 643 00:30:57,480 --> 00:30:58,920 Speaker 5: remarks that he believes he is. 644 00:31:00,080 --> 00:31:00,280 Speaker 2: Yeah. 645 00:31:00,280 --> 00:31:03,479 Speaker 7: I talked to criminal defense attorney Robert mcwherterer about this. 646 00:31:03,560 --> 00:31:06,680 Speaker 7: He said that technically, yes, this trial is technically not 647 00:31:06,880 --> 00:31:10,800 Speaker 7: over until sentencing. So therefore Judge murshawn could in fact 648 00:31:10,920 --> 00:31:13,720 Speaker 7: enforce the gag order if he wanted to. And I'll 649 00:31:13,760 --> 00:31:16,440 Speaker 7: remind everybody that we're waiting to hear from the Supreme Court. Still, 650 00:31:16,480 --> 00:31:19,000 Speaker 7: the fact that this is done now brings us to June, 651 00:31:19,000 --> 00:31:21,040 Speaker 7: when we could get a ruling on this presidential and 652 00:31:21,120 --> 00:31:24,680 Speaker 7: expect to this presidential immunity claim. That would then potentially 653 00:31:24,840 --> 00:31:28,600 Speaker 7: unlock the next trial, that's the January sixth trial with 654 00:31:28,640 --> 00:31:30,120 Speaker 7: Special Counsel Jack Smith. 655 00:31:30,960 --> 00:31:32,040 Speaker 6: That could be a. 656 00:31:32,120 --> 00:31:36,520 Speaker 7: Very major game changer for this campaign, and it would 657 00:31:36,600 --> 00:31:41,320 Speaker 7: likely coincide with the final throes of the election. Imagine 658 00:31:41,320 --> 00:31:43,800 Speaker 7: a world in which that trial was happening when the 659 00:31:43,800 --> 00:31:46,680 Speaker 7: election took place, or in fact, was held between the 660 00:31:46,760 --> 00:31:49,960 Speaker 7: election and the inauguration. Could we have a president elect 661 00:31:50,520 --> 00:31:54,240 Speaker 7: on criminal trial and federal trial here in Washington. All 662 00:31:54,240 --> 00:31:57,320 Speaker 7: of these remain questions and distinct possibilities. 663 00:31:58,280 --> 00:32:01,000 Speaker 3: So we have the benefit. I've talked about this for 664 00:32:01,120 --> 00:32:02,760 Speaker 3: just half an hour. You're going to be talking about 665 00:32:02,760 --> 00:32:05,760 Speaker 3: this for three more hours today as you did yesterday 666 00:32:05,800 --> 00:32:08,840 Speaker 3: for three hours. What are going to be your questions? Like, 667 00:32:08,880 --> 00:32:10,960 Speaker 3: how do you walk this forward now? And there's so 668 00:32:11,080 --> 00:32:12,840 Speaker 3: many things we don't. 669 00:32:12,560 --> 00:32:17,320 Speaker 7: Know these are This is the moment I think they 670 00:32:17,320 --> 00:32:19,200 Speaker 7: get granular. What are the next steps here for Donald 671 00:32:19,200 --> 00:32:22,240 Speaker 7: Trump's defense? What is that appointment? What is his first 672 00:32:22,280 --> 00:32:24,440 Speaker 7: meeting with his probation officer going to look like? 673 00:32:24,480 --> 00:32:25,440 Speaker 6: What will be the venue? 674 00:32:25,520 --> 00:32:28,080 Speaker 7: What is the Secret Service talked about with New York 675 00:32:28,120 --> 00:32:33,240 Speaker 7: Corrections officials about a potential incarceration. We heard Nick Ackerman, 676 00:32:33,320 --> 00:32:36,880 Speaker 7: the former Watergate prosecutor, talk about a presidential suite potentially 677 00:32:36,920 --> 00:32:39,280 Speaker 7: being built at Riker's Island. But I also want to 678 00:32:39,280 --> 00:32:40,920 Speaker 7: know about the jurors. There are a couple of folks, 679 00:32:40,920 --> 00:32:43,680 Speaker 7: including our own Eric Larson and his team at Bloomberg. 680 00:32:43,920 --> 00:32:46,040 Speaker 7: Mark Caputo's another one at the Bulwark, is going to 681 00:32:46,080 --> 00:32:48,080 Speaker 7: join us at noon to talk about who these people 682 00:32:48,160 --> 00:32:50,000 Speaker 7: actually were, what they were going through. Now that we 683 00:32:50,040 --> 00:32:53,560 Speaker 7: want to reveal identities, but what did these Americans experience? 684 00:32:53,680 --> 00:32:55,680 Speaker 7: What were their expressions, what did they hear, and what 685 00:32:55,760 --> 00:32:57,400 Speaker 7: might have gone on inside that jury room? 686 00:32:57,440 --> 00:32:58,480 Speaker 6: Those are all questions I. 687 00:32:58,440 --> 00:33:00,680 Speaker 5: Have, all right, Joe, thank you so very much. We 688 00:33:00,720 --> 00:33:03,920 Speaker 5: appreciate it. Joe Matthew, he's co host of Bloomberg Balance 689 00:33:03,920 --> 00:33:07,120 Speaker 5: of Power, joining us from the Washington DC Bureau. And 690 00:33:07,160 --> 00:33:08,840 Speaker 5: as you mentioned, Alex, he's gonna be he and his 691 00:33:08,880 --> 00:33:10,479 Speaker 5: team will be spending a lot of time looking at 692 00:33:10,520 --> 00:33:13,840 Speaker 5: this in this landmark court case from yesterday. Then some 693 00:33:13,880 --> 00:33:16,000 Speaker 5: of the comments from the former president today, who is 694 00:33:16,600 --> 00:33:21,240 Speaker 5: just finished speaking, so he's walking away from the lectern 695 00:33:21,320 --> 00:33:24,239 Speaker 5: there so interesting. 696 00:33:25,120 --> 00:33:29,000 Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live 697 00:33:29,080 --> 00:33:32,120 Speaker 2: weekdays at ten am Eastern on Apple car Play and 698 00:33:32,120 --> 00:33:35,080 Speaker 2: Android Outo with the Bloomberg Business Act. You can also 699 00:33:35,120 --> 00:33:38,640 Speaker 2: listen live on Amazon Alexa from our flagship New York station, 700 00:33:39,000 --> 00:33:41,680 Speaker 2: Just Say Alexa playing Bloomberg eleven. 701 00:33:41,480 --> 00:33:46,040 Speaker 5: Thirty Big Take story today related to the news of 702 00:33:46,080 --> 00:33:50,200 Speaker 5: the day regarding former President Trump. Wall Street billionaires rush 703 00:33:50,400 --> 00:33:53,400 Speaker 5: to back Trump. Verdict be damned. A growing number of 704 00:33:53,440 --> 00:33:56,360 Speaker 5: financial elites are throwing their weight behind Trump, who's found 705 00:33:56,400 --> 00:34:00,120 Speaker 5: guilty in the first criminal trial of a former US 706 00:34:00,000 --> 00:34:01,680 Speaker 5: as an entry Naa Rajen joins just one of the 707 00:34:01,720 --> 00:34:04,640 Speaker 5: reporters on that story, Senior finance reporter Bloomberg News, joining 708 00:34:04,720 --> 00:34:08,360 Speaker 5: us here in our Bloomberg Interactive Brokers studio. What is behind? 709 00:34:08,360 --> 00:34:10,520 Speaker 5: What did you find in your reporting tree about what 710 00:34:10,640 --> 00:34:12,840 Speaker 5: some of these billionaires or what are they thinking? Is 711 00:34:12,840 --> 00:34:15,600 Speaker 5: they think about supporting former President Trump at the next election? 712 00:34:16,200 --> 00:34:18,560 Speaker 10: In some ways, it's not a surprise, but in some ways, 713 00:34:18,600 --> 00:34:21,800 Speaker 10: in many ways, it's extraordinary. In almost any other generation, 714 00:34:22,200 --> 00:34:24,960 Speaker 10: any other era, any other candidate, you would have assumed 715 00:34:24,960 --> 00:34:27,560 Speaker 10: that there will be this entire crowd of supporters that 716 00:34:27,640 --> 00:34:31,600 Speaker 10: will be looking to distance themselves from this individual. In 717 00:34:31,680 --> 00:34:36,520 Speaker 10: this case, most of Trump's deep pocketed donors are actually 718 00:34:36,800 --> 00:34:40,560 Speaker 10: rallying around him and using this guilty verdict as a 719 00:34:40,680 --> 00:34:43,920 Speaker 10: rallying cry to get more support for him. And that 720 00:34:44,000 --> 00:34:46,279 Speaker 10: has been the trend that we've seen. Those who have 721 00:34:46,360 --> 00:34:49,719 Speaker 10: been trumped backers and have stood by him through all 722 00:34:49,800 --> 00:34:53,319 Speaker 10: these years, continue to stand by him. Those who have 723 00:34:53,360 --> 00:34:56,719 Speaker 10: been reluctant travelers don't seem to be getting swayed by 724 00:34:56,719 --> 00:34:59,160 Speaker 10: the verdict, and in fact they're using it as an 725 00:34:59,200 --> 00:35:03,520 Speaker 10: opportunity to more people into the Trump fold, and that's extraordinary. 726 00:35:03,560 --> 00:35:06,359 Speaker 10: A lot of what they're attacking is is what they 727 00:35:06,400 --> 00:35:09,719 Speaker 10: claim is the misuse of the legal system. These are 728 00:35:09,800 --> 00:35:13,560 Speaker 10: titans of the industry. These are people who've used the 729 00:35:13,680 --> 00:35:18,000 Speaker 10: legal system, the bedrock of capitalism in this country, in 730 00:35:18,040 --> 00:35:21,680 Speaker 10: some ways to build grow a quie accumulate wealth. These 731 00:35:21,680 --> 00:35:24,040 Speaker 10: are the very same people who look at this verdict 732 00:35:24,200 --> 00:35:27,600 Speaker 10: and suddenly have a number of grave concerns about the 733 00:35:27,640 --> 00:35:30,080 Speaker 10: carriage of justice or what they call miscarriage of justice 734 00:35:30,120 --> 00:35:30,640 Speaker 10: in this case. 735 00:35:31,120 --> 00:35:34,560 Speaker 3: So in my world, the first kind of turn was 736 00:35:34,560 --> 00:35:38,840 Speaker 3: Harold Ham, billionaire owns cnnental Resources, right, and he supported 737 00:35:38,920 --> 00:35:42,080 Speaker 3: Nicki Haley, and he was saying he was not going 738 00:35:42,120 --> 00:35:44,759 Speaker 3: to support President Trump because he just felt like he 739 00:35:44,800 --> 00:35:48,040 Speaker 3: just said he wasn't electable. And then slowly, as the 740 00:35:48,120 --> 00:35:51,919 Speaker 3: momentum couldn't pick up for a moderate like a Nikki Haley, 741 00:35:51,960 --> 00:35:55,160 Speaker 3: if we'll just call her a moderate that eventually the 742 00:35:55,239 --> 00:35:58,799 Speaker 3: rhetorics started to turn. And I'm wondering how many are 743 00:35:58,920 --> 00:36:02,920 Speaker 3: similar like that on Wall Street, where in terms of electability, 744 00:36:03,000 --> 00:36:06,360 Speaker 3: in terms of likability, in terms of focus, they don't 745 00:36:06,400 --> 00:36:09,200 Speaker 3: want President Trump, but because they weren't able to rally 746 00:36:09,200 --> 00:36:12,040 Speaker 3: the support behind a moderate, I were seen as a moderate, 747 00:36:12,440 --> 00:36:14,279 Speaker 3: they have no choice. How much of it is that 748 00:36:15,000 --> 00:36:17,520 Speaker 3: versus an actual support. 749 00:36:18,680 --> 00:36:20,960 Speaker 10: That's sort of a very interesting point. And I'd like 750 00:36:21,000 --> 00:36:24,080 Speaker 10: to actually point to two important voices in the story today. 751 00:36:24,080 --> 00:36:27,279 Speaker 10: One of them Dan Lufkin. He's ninety two today, but 752 00:36:27,360 --> 00:36:30,839 Speaker 10: he is one of the co founders of DLJ. He 753 00:36:31,160 --> 00:36:35,440 Speaker 10: therefore had one of the most prominent positions in the industry. 754 00:36:35,920 --> 00:36:36,160 Speaker 3: Right. 755 00:36:36,560 --> 00:36:39,280 Speaker 10: And here's a man who comes out and says, look, 756 00:36:39,560 --> 00:36:43,200 Speaker 10: Wall Street has never been known and this is important 757 00:36:43,239 --> 00:36:45,000 Speaker 10: the way he frames it. He says, Wall Street has 758 00:36:45,040 --> 00:36:48,759 Speaker 10: never been known for its values. Is there a willingness 759 00:36:48,760 --> 00:36:50,920 Speaker 10: to support Trump if it looks like he's on the 760 00:36:51,000 --> 00:36:53,960 Speaker 10: right track. Yes, he says, I'm not proud of that, 761 00:36:54,280 --> 00:36:56,560 Speaker 10: and I'm not part of that either, because he was 762 00:36:56,600 --> 00:37:00,720 Speaker 10: a Nicki Hayley supporter, and he's definitely staying never Trumper. 763 00:37:01,000 --> 00:37:03,560 Speaker 10: But he's saying that is definitely visible. And we have 764 00:37:03,680 --> 00:37:06,279 Speaker 10: Whitney Tilson, former HETG fund manager ran a two hundred 765 00:37:06,280 --> 00:37:09,160 Speaker 10: million dollar hatch fund, who says the industry does attract 766 00:37:09,200 --> 00:37:12,719 Speaker 10: its own crowd of opportunists, and that sort of extends 767 00:37:12,840 --> 00:37:15,840 Speaker 10: to Trump's backers in the upper rungs of the business 768 00:37:15,880 --> 00:37:19,000 Speaker 10: community who've come out publicly right now. And his point 769 00:37:19,120 --> 00:37:21,839 Speaker 10: is they've concluded Trump is going to win. They don't 770 00:37:21,840 --> 00:37:24,240 Speaker 10: believe this is a dead heat. They are pretty certain 771 00:37:24,280 --> 00:37:28,000 Speaker 10: and convinced themselves that Trump is going to win come November, 772 00:37:28,360 --> 00:37:31,040 Speaker 10: and if he is the next president, then it is 773 00:37:31,080 --> 00:37:34,239 Speaker 10: in their self interest to support him early. And you 774 00:37:34,280 --> 00:37:35,560 Speaker 10: can't discount that logic. 775 00:37:36,000 --> 00:37:39,000 Speaker 5: You know, what I see in your story is, you know, 776 00:37:39,120 --> 00:37:44,160 Speaker 5: kind of self made billionaires, Steven Schwartzman, Harold Lutnick. 777 00:37:45,360 --> 00:37:46,440 Speaker 7: What I don't see. 778 00:37:46,239 --> 00:37:49,680 Speaker 5: Is corporate CEOs, the CEO of Coca Cola or Procter 779 00:37:49,760 --> 00:37:54,560 Speaker 5: and Gamble or something like that that probably says something 780 00:37:54,719 --> 00:37:56,759 Speaker 5: as well. I mean, if I've got my billions, I 781 00:37:56,800 --> 00:37:58,839 Speaker 5: don't really care what people think. I can maybe be 782 00:37:58,920 --> 00:37:59,800 Speaker 5: more open with who. 783 00:37:59,760 --> 00:38:03,680 Speaker 10: Just yes, absolutely. But at the same time, I will 784 00:38:03,680 --> 00:38:06,360 Speaker 10: also point out that a lot of these corporate CEOs 785 00:38:06,680 --> 00:38:10,760 Speaker 10: were loud and vocal in twenty seventeen. In August twenty seventeen, 786 00:38:10,800 --> 00:38:15,520 Speaker 10: after the white supremacist rallies in Charlottesville, Virginia, they were 787 00:38:15,760 --> 00:38:20,239 Speaker 10: loud and vocal after jan six, twenty twenty one. What 788 00:38:20,280 --> 00:38:24,000 Speaker 10: you have seen, in some ways is in a historic 789 00:38:24,080 --> 00:38:27,120 Speaker 10: moment like this, right first have a former president to 790 00:38:27,160 --> 00:38:30,040 Speaker 10: be tried in the for sort of in criminal counts 791 00:38:30,080 --> 00:38:32,440 Speaker 10: to be found guilty. You would have thought that there 792 00:38:32,480 --> 00:38:34,760 Speaker 10: would be more in the upper rungs of the business 793 00:38:34,800 --> 00:38:37,280 Speaker 10: class so would be able to come out and point 794 00:38:37,360 --> 00:38:40,320 Speaker 10: that out. But they are choosing to remain silent or 795 00:38:40,320 --> 00:38:43,160 Speaker 10: at least don't want to express an opinion, and their 796 00:38:43,280 --> 00:38:47,680 Speaker 10: silence in this case speaks as much as their comments 797 00:38:47,680 --> 00:38:48,880 Speaker 10: in some of the previous instances. 798 00:38:49,000 --> 00:38:50,560 Speaker 3: No, I'm glad you brought that up, because something that 799 00:38:50,560 --> 00:38:53,160 Speaker 3: we saw back in twenty and sixteen is it was 800 00:38:53,560 --> 00:38:56,759 Speaker 3: silent supporters that people voted for Trump on Wall Street 801 00:38:56,800 --> 00:38:59,319 Speaker 3: in particular, but no one said anything, and that that 802 00:38:59,440 --> 00:39:02,160 Speaker 3: was in us why polls were so wrong and why 803 00:39:02,160 --> 00:39:05,080 Speaker 3: I caught everyone else so off guard. Is it something 804 00:39:05,080 --> 00:39:07,239 Speaker 3: the same way, like, hey man, I make a lot 805 00:39:07,280 --> 00:39:09,359 Speaker 3: of money and I want lower taxes straight up, I'm 806 00:39:09,360 --> 00:39:10,880 Speaker 3: going to vote for Trump, but I can't say excel 807 00:39:10,960 --> 00:39:12,520 Speaker 3: lose clients. 808 00:39:12,200 --> 00:39:14,960 Speaker 10: And some of those who are backing and kind of 809 00:39:15,000 --> 00:39:17,880 Speaker 10: also making that point publicly. But yes, in twenty sixteen, 810 00:39:18,120 --> 00:39:20,040 Speaker 10: there was a I think it's fair to say, at 811 00:39:20,120 --> 00:39:21,840 Speaker 10: least on Wall Street, there was a lot more stigma 812 00:39:21,960 --> 00:39:24,040 Speaker 10: in being able to come out and openly say I 813 00:39:24,160 --> 00:39:27,480 Speaker 10: back Donald Trump. Doesn't feel like that so much in 814 00:39:27,520 --> 00:39:28,359 Speaker 10: twenty twenty four. 815 00:39:29,120 --> 00:39:31,560 Speaker 5: All right, so we haven't heard from JP. Have you 816 00:39:31,640 --> 00:39:35,120 Speaker 5: heard from Jamie Diamond, CEOs or Brian moy in a 817 00:39:35,160 --> 00:39:38,040 Speaker 5: hand you know, anything like that from Big Wall Street? 818 00:39:38,200 --> 00:39:41,320 Speaker 10: Not particularly, But it is interesting that yesterday Jamie Diamond 819 00:39:41,440 --> 00:39:43,760 Speaker 10: was sort of the star attraction at this JP Morgan 820 00:39:43,800 --> 00:39:46,960 Speaker 10: alumni event. This this is held at the Morgan Library 821 00:39:47,000 --> 00:39:48,600 Speaker 10: every year. It's a bit of a tradition among the 822 00:39:48,680 --> 00:39:50,880 Speaker 10: JP Morgan crowd. And a couple of years ago he 823 00:39:50,920 --> 00:39:52,920 Speaker 10: did create quite a bit of a stir where he 824 00:39:53,000 --> 00:39:56,280 Speaker 10: went on this sort of expletive laid and tirade against 825 00:39:56,400 --> 00:39:58,760 Speaker 10: Donald Trump. That is Jamie Diamond, the Dean of Finance. 826 00:39:59,120 --> 00:40:01,440 Speaker 10: This was back when m Jansick was still top of 827 00:40:01,480 --> 00:40:05,520 Speaker 10: everyone's mind. Yesterday they're meeting a mere two hours after 828 00:40:05,560 --> 00:40:09,000 Speaker 10: this guilty verdict, and Jamie doesn't even reference it to 829 00:40:09,080 --> 00:40:12,279 Speaker 10: a tangential question about politics and the outlook. He talks 830 00:40:12,320 --> 00:40:15,719 Speaker 10: about the need to respect the seventy four million voters 831 00:40:15,760 --> 00:40:18,000 Speaker 10: who voted for Trump because they must have seen that 832 00:40:18,080 --> 00:40:21,840 Speaker 10: he had done some good things. All fair points, but 833 00:40:21,920 --> 00:40:25,840 Speaker 10: again interesting to note what he's choosing to remain silent 834 00:40:25,960 --> 00:40:28,800 Speaker 10: on at this moment versus what he was vocal about 835 00:40:28,960 --> 00:40:29,919 Speaker 10: just a couple of years ago. 836 00:40:30,320 --> 00:40:32,359 Speaker 5: All Right, Sree, thanks so much for jourinning a Shrinana Rojen. 837 00:40:32,400 --> 00:40:34,800 Speaker 5: He is a senior financial reporter for Bloomberg News. Journey 838 00:40:34,880 --> 00:40:37,319 Speaker 5: us here in our Bloomberg Interactive Brokers studio. The Big 839 00:40:37,360 --> 00:40:38,960 Speaker 5: Takes story of the day. We love the Big Takes 840 00:40:39,000 --> 00:40:42,440 Speaker 5: stories so well, deeply sourced and reported, lots of COO 841 00:40:42,520 --> 00:40:46,120 Speaker 5: graphics for people like me, Wall Street billionaires, Rush Tobac 842 00:40:46,200 --> 00:40:49,760 Speaker 5: Trump verdict be Damned is the headline on that story. 843 00:40:49,800 --> 00:40:51,400 Speaker 5: So yeah, Wall Street has following the money. 844 00:40:51,840 --> 00:40:56,439 Speaker 2: This is the Bloomberg Intelligence Podcast, available on Apples, spotder Pye, 845 00:40:56,560 --> 00:40:59,719 Speaker 2: and anywhere else you'll get your podcasts. Listen live each 846 00:40:59,719 --> 00:41:03,200 Speaker 2: week ten am to noon Eastern on Bloomberg dot Com. 847 00:41:03,280 --> 00:41:04,840 Speaker 6: The iHeartRadio app. 848 00:41:04,680 --> 00:41:07,360 Speaker 2: Tune In, and the Bloomberg Business app. You can also 849 00:41:07,440 --> 00:41:10,799 Speaker 2: watch us live every weekday on YouTube and always on 850 00:41:10,840 --> 00:41:11,880 Speaker 2: the Bloomberg terminal