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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am

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Speaker 2: Boeing hitting the market. I'm raising some money up to

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Speaker 2: nineteen large, maybe fourteen billion in common, maybe five billion

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Speaker 2: in preferred. I think they can get this done pretty quickly.

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Speaker 2: Everybody knows the Boeing name. It's been trading in these

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Speaker 2: levels for a long time, so we know where the

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Speaker 2: value is. George Ferguson, he's the analysts responsible for all

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Speaker 2: this stuff. He's a senior airspace, defense and airlines analysts

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Speaker 2: for Bloomberg Intelligence. George, if they are able to get

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Speaker 2: this deal done again, roughly nineteen billion of incremental new equity,

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Speaker 2: what's that going to do for him? How much time

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Speaker 2: is I going to buy him?

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Speaker 3: So we think it probably buys them a couple of quarters, right.

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Speaker 3: So on the call the other day, on the evening's

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Speaker 3: call for three Q, they indicated that they thought they'd

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Speaker 3: burn four four and a half billion dollars in four

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Speaker 3: Q similar to what they burned in two Q at

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Speaker 3: that burn rate, what it gets maybe even you know,

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Speaker 3: three quarters or the burn I wouldn't I would hope

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Speaker 3: they wouldn't need all that, but we did here. Again

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Speaker 3: their outlook that the first half of next year they

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Speaker 3: expect to be largely a cash use scenario and for

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Speaker 3: the full year they'd be cash used'd go sounded like

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Speaker 3: they would go cash positive sometime in the second half,

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Speaker 3: they hoped, so two three quarters.

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Speaker 4: So, George, just in terms of how large this can be,

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Speaker 4: we know that they launched the shelf to raise up

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Speaker 4: to twenty five billion. Do you think that gets close

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Speaker 4: to maxing it out just because it's going and they

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Speaker 4: simply probably can.

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Speaker 3: Well, I guess you know they have to, you know,

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Speaker 3: sort of really, I mean, there's a lot of dilution here, right,

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Speaker 3: so really be concerned about dilution. But you know, last

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Speaker 3: I look, the shares were down a couple percent, so

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Speaker 3: it seemed like the market's not that concerned about whatever

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Speaker 3: delution is going to occur here. I think the bigger

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Speaker 3: amount they have, right, the more staying power, obviously, the

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Speaker 3: more they can look at the union across the negotiating table.

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Speaker 3: And say we can hang out for a long time.

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Speaker 3: We really need you to rethink your idea on let's

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Speaker 3: say something like a pension, right.

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Speaker 5: And so I think, you know, more money helps them there.

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Speaker 3: And look, the aerospace supply chain still isn't stable, right,

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Speaker 3: so Airbus should be sort of moving towards fifty rate

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Speaker 3: on a three twenty as they close out the year.

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Speaker 5: Here, we're not seeing it.

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Speaker 3: We're seeing them in the forties still, so they're sort

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Speaker 3: of proof positive to us.

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Speaker 5: You know, we're.

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Speaker 3: Seeing more noise out of the engine makers. They're still

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Speaker 3: sort of working to get their supply chains fully functioning

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Speaker 3: coming out of the pandemic. So it's not a given

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Speaker 3: that just once they get this strike past them that

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Speaker 3: Bowe's going to have, you know, clear skies ramp up quickly,

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Speaker 3: generate cash and not have any additional problems. So I

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Speaker 3: think raising more, raising above twenty billion, which yeah, I

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Speaker 3: think could certainly happen here, just buys them more time

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Speaker 3: in a world that is just has a lot more

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Speaker 3: variables in it than you know, than most other industries.

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Speaker 5: The airspace industry is more more variables right.

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Speaker 2: Now, George, what are you hearing about this strike here?

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Speaker 2: Has there been any movement here? Have they been able

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Speaker 2: to narrow in on a or a topic or two

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Speaker 2: or three? What are what are you hearing?

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Speaker 3: I'm hearing it has a lot to do about pensions,

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Speaker 3: right I'm still this weekend, I'm hearing noise out of

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Speaker 3: the unions on the on the West coast, and that

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Speaker 3: that noise, you know, not trying to demean it. It's

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Speaker 3: it's the commentary is probably better way of putting it.

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Speaker 3: Out of the union is really around a pension now,

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Speaker 3: you know, I have heard the machinists presidents say that,

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Speaker 3: you know, if they can't give a pension, they should

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Speaker 3: Boeing should be prepared to give somewhere else. So it

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Speaker 3: sounds like there is flexibility, but it sounds like a

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Speaker 3: lot of it has to do with retirement plans and

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Speaker 3: what the union thought they lost a decade ago. They

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Speaker 3: did lose the pension a decade ago, and they think

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Speaker 3: they lost a very valuable benefit. And it sounds like

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Speaker 3: there's a lot of focus on that right now.

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Speaker 4: And we saw the report at the end of last

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Speaker 4: week that the company could sell their Starliner space program.

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Speaker 4: What's your thinking on that? Is a more streamlined Boeing

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Speaker 4: more attractive to equity investors.

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Speaker 3: Look, I think Boeing could potentially do some streamlining. I

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Speaker 3: frankly think the space business isn't necessarily the place.

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Speaker 5: For them to do the streamlining.

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Speaker 3: But I do think they're looking for pieces of the

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Speaker 3: company that aren't core to sort of aircraft, you know,

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Speaker 3: defense aircraft, commercial aircraft, and so space I think stands

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Speaker 3: out for that. The problem I have though with the

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Speaker 3: space business is they've got a launch business called the

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Speaker 3: United Launch a line.

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Speaker 5: It's with Lockheed.

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Speaker 3: It's not as competitive as SpaceX, right, I know from

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Speaker 3: people I talked to in the industry, SpaceX can deliver

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Speaker 3: things into orbit much cheaper. You know, I think the

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Speaker 3: Boeing Lockheed joint venture suffers from I think some of

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Speaker 3: those sort of structural challenges inside any big defense contract

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Speaker 3: that they're not nimble and they're not cheap. And I

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Speaker 3: think you know, star Liner, they took four point six

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Speaker 3: billion to develop a capsule. It's supposed to be the

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Speaker 3: second capsule to the SpaceX capsule, which one as well.

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Speaker 3: You know, NASA wantce redundancy to deliver to the International

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Speaker 3: Space Station.

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Speaker 5: There's a commitment in there. I think they have to.

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Speaker 3: Deliver or at least have to go to the space

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Speaker 3: station at least twice a year for a number of years.

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Speaker 3: I don't see NASA, you know, letting them off that

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Speaker 3: that requirement. So they're gonna have to find someone else

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Speaker 3: to step in to a program they've already developed, to

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Speaker 3: take it over and commit to making you know, deliveries

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Speaker 3: to the space station or shots to the space station

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Speaker 3: twice a year. I think that they're going to be

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Speaker 3: hard pressed to really get much money from that, because again,

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Speaker 3: they don't they don't deliver cheap.

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Speaker 5: They're overruns on Starliner two. So I just think it's.

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Speaker 3: Going to be a real challenge to really generate much

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Speaker 3: cash from that. That's been on the market too for

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Speaker 3: a while, and nobody's bitten so far. I understand Blue

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Speaker 3: Origin looked at it, and now they're going to the

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Speaker 3: equity markets for twenty billion in equity. So I think

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Speaker 3: that's a sign of what they think they can generate

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Speaker 3: for that business just isn't there, I don't think all.

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Speaker 6: Right, George, thanks so much for the update. Appreciate it

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Speaker 6: as always.

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Speaker 2: George Ferguson, Senior Aerospace, Defense and Airlines sentists for Bloomberg Intelligence,

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Speaker 2: Boeing in the market for you know, up to nineteen

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Speaker 2: billion dollars in some equity common stock, preferred stock. We'll

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Speaker 2: see stock's only off one percent years. So, as George

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Speaker 2: was suggesting, it seems like the market's okay with the delution.

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Speaker 2: I mean, it is what it is. You kind of

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Speaker 2: knew this was coming. It's been well telegraphed.

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Speaker 4: We reported it back in early October, so almost four

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Speaker 4: weeks ago. At this point that they were in talks

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Speaker 4: with advisors, that stock was about one point fifty three.

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Speaker 4: Right now it's one fifty three to five. So when

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Speaker 4: you think about it, we're continuing to see the stock

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Speaker 4: move sideways. As you mentioned, the big question is what

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Speaker 4: kind of a discount, How quickly does this deal get done,

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Speaker 4: and what are the terms that actually get agreed upon

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Speaker 4: for that convertible debt, Just because when as George mentioned,

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Speaker 4: when you talk dilution, if you're an equity investor, I'm

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Speaker 4: sure you want to clean balance sheet, but you also

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Speaker 4: don't want to get squeezed out of your position.

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Speaker 2: Yep, it's actually and then presumably that'll strengthen their position

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Speaker 2: with the union. Just in terms of talking about this

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Speaker 2: upcoming contract.

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Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

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Speaker 1: Auto with the Bloomberg Business app. You can also listen

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Speaker 2: Let's switch hears to the global auto industry. A little

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Speaker 2: bit different story there is. The best I could tell

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Speaker 2: the two may your headwinds for the auto industry is

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Speaker 2: one China, which is obviously a huge growth market for

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Speaker 2: the global auto industry. It's slowing and the local brands

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Speaker 2: there are improving dramatically, so they're getting much more competitive there.

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Speaker 2: And then the second thing is, oh, yeah, they got

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Speaker 2: this whole transition to evs and how do you do that?

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Speaker 2: We heard some some really cautious news out of Volkswagen today.

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Speaker 2: Volkswagen eyes closing three German factories in a cost cutting push.

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Speaker 2: Let's check them with Steve Man, he covers the global

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Speaker 2: auto industry for Bloomberg Intelligence. Steve talked to us first

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Speaker 2: about this Volkswagen news here, I mean shutting German factories.

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Speaker 2: They don't typically do that, So how much, how much

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Speaker 2: hurt are they feeling over their VW.

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Speaker 7: Oh, they're in the world of pain at the moment.

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Speaker 7: You kind of mentioned it, Paul. They are hurting around

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Speaker 7: the world in all three major regions of the auto market.

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Speaker 7: You know, US, they're not They're not that big of

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Speaker 7: a they don't have that big of a presence in

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Speaker 7: the US. You're up, you know, it's sales are down.

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Speaker 7: You're not only hearing it from Volkswagen, but also Silentis

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Speaker 7: as well. You know, their stock is down quite a

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Speaker 7: bit over the past few months. And in China, you know, China,

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Speaker 7: the Chinese OEMs are taking a lot of market share

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Speaker 7: in China, They're they're entering the EU market. Like you

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Speaker 7: said earlier, you know, Chinese automaker are just much quicker

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Speaker 7: in transitioning to EVS in that region than any of

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Speaker 7: the foreign OEMs operating in China at the moment. So,

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Speaker 7: you know, Volkswagen is feeling it.

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Speaker 4: And how does that kind of position a company And

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Speaker 4: you're up one of the biggest automakers trying to compete

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Speaker 4: with US automakers who are having their own issues and

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Speaker 4: as well as kind of the potential pent up demand

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Speaker 4: at least in terms of capacity production capacity in China.

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Speaker 7: Yeah, there, I mean de pent up the capacity in China.

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Speaker 7: It is really not EV capacity. It's actually really ICE capacity,

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Speaker 7: internal combuntion engine vehicle capacity.

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Speaker 8: Uh.

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Speaker 7: There's been a lot of closing of those plants in China.

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Speaker 7: Volkswagen has closed one of its plants in China with

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Speaker 7: his partner Shanghai Auto sai C. You know, Ford has

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Speaker 7: closed a number of plants. Hyundai has closed a number

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Speaker 7: of plants. And these are all companies that have not

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Speaker 7: transitioned to EV as fast as the OEM's companies like

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Speaker 7: GM and BUYD taking huge market share from the foreign automakers.

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Speaker 7: By D is actually the biggest now biggest automaker in

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Speaker 7: terms of volume in China.

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Speaker 2: All right, So what is Global Auto to do about China?

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Speaker 2: What is the strategy?

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Speaker 6: Do you think?

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Speaker 2: Because I think if I've got these Chinese companies that are,

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Speaker 2: you know, getting better and better every day, what do.

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Speaker 1: I do there?

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Speaker 2: Do I walk away from this market? I can't do that.

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Speaker 6: It's too big.

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Speaker 9: Yeah, that's I know.

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Speaker 7: You know, if you look at the four OEMs operating

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Speaker 7: in China five years ago, they were they had market

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Speaker 7: share over fifty percent in the last couple of years,

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Speaker 7: they basically have changed position.

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Speaker 5: Uh.

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Speaker 7: You know, the Chinese OEM has more and more capacity,

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Speaker 7: more and more market share, uh, and it's growing. There's

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Speaker 7: a number of ways they can attack this. They need,

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Speaker 7: you know, they either invest a lot of money uh

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Speaker 7: and and really grow evs and not just evs, but

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Speaker 7: these user interface. Chinese consumers are buying cars because they

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Speaker 7: like the user interface that the Chinese OEMs are offering them.

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Speaker 7: So they need to build more evs. They need to

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Speaker 7: look at revamping their software to cater the local customers

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Speaker 7: in China.

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Speaker 5: Well.

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Speaker 7: The other the other option is really to close shop

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Speaker 7: and you know, focus, refocus their their investments and their costs.

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Speaker 7: They know how to you know, they know how to

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Speaker 7: operate in Europe, they know how to operate in the US.

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Speaker 7: They know how to do, you know, sell more cars

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Speaker 7: in their local markets. That that may be one option

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Speaker 7: is to just retrench. But you know, that's that's not

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Speaker 7: an unfortunate approach if they had to do that in

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Speaker 7: the biggest auto market in the world.

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Speaker 4: When I look at Europe, are there any automakers well positioned?

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Speaker 4: I mean, Stilantis is hitting getting hit by four performance

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Speaker 4: in the US BMW has an expensive recall. Mercedes Bins

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Speaker 4: has been struggling in China, Like is anyone winning well?

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Speaker 7: Relatively speaking, I think the German luxury automakers, the BMW,

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Speaker 7: Mercedes are faring better than the mass market, but they're

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Speaker 7: also feeling the pain, right They're all the luxury brands

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Speaker 7: are also feeling the pain.

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Speaker 5: You know.

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Speaker 7: BMW and Mercedes just reported, you know, lower sales in China.

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Speaker 7: And you know, I also am concerned. And it's a

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Speaker 7: matter of time because there are companies like Neil, there

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Speaker 7: are companies that are xpunk, you know, they're also moving

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Speaker 7: up market competing with the Mercedes and BMW. So I think,

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Speaker 7: relatively speaking, just to answer your question, the luxuries are

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Speaker 7: doing better, but you know, time will tell if they

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Speaker 7: can you know, maintain you know, some of the sales

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Speaker 7: that they have in China.

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Speaker 2: All right, Steve, thanks so much for joining us there.

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Speaker 2: Steve Man, he covers the global global autos and industrials

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Speaker 2: for Bloomberg Intelligency spased down in our Princeton, New Jersey office,

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Speaker 2: So getting the latest on VW closing some plants, cutting

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Speaker 2: some staff, trying to cut some costs here as they

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Speaker 2: face the some headwinds coming out of China, as well

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Speaker 2: as the continued costs of going over to electric vehicles.

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Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on fo Car Playing and

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Speaker 1: Broun Auto with the Bloomberg Business App. Listen on demand

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Speaker 1: wherever you get your podcasts, or watch us live on YouTube.

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Speaker 2: All right, our next guest, let me see if I

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Speaker 2: got this conjugated right. She's in Chicago, though, but she's

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Speaker 2: a Boston native and fan of the Red Sox, which

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Speaker 2: means she's rooting for the Dodgers. I think I've got

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Speaker 2: that rate. Shane Sissel, president and CEO of a ban

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Speaker 2: Rionn Capital Management, joins us here in our Bloomberg Interactive Broker.

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Speaker 6: Studio that I get that right.

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Speaker 10: We totally got that right. I think, guys we were

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Speaker 10: saying before, Dave Roberts has to continue to do everything

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Speaker 10: he can to help the Red Sox, whether it be

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Speaker 10: win a World Series as a player, as give the

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Speaker 10: Red Sox World Series as a manager, and now he

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Speaker 10: needs to make sure.

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Speaker 2: That the Yankees prevent the Yankees. I get the whole

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Speaker 2: concept there, all right, Before we get to your market

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Speaker 2: call which we want to talk about pink ETF. Talk

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Speaker 2: to me about that.

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Speaker 10: Yes, so pink ETF is near and dear to my heart.

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Speaker 10: I am a breast cancer survivor and October is breast

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Speaker 10: cancer Awareness month. The pink ETF is issued by Simplify

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Speaker 10: Asset Management. It is a healthcare ETF. It invests in healthcare,

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Speaker 10: is not specific to cancer or breast cancer in general.

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Speaker 10: It's the only pro bono ETF on the market, meaning

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Speaker 10: the manager does it pro bono and they donate all

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Speaker 10: of the net profits of the fund through its expense

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Speaker 10: ratio to the Susan G. Comen Foundation for Breast Cancer Research.

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Speaker 10: So you know it's October, yeap breast cancer on this month.

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Speaker 10: You can do your part and this is an interesting

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Speaker 10: way to do that. Fund has a great track record.

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Speaker 2: Yeah, absolutely, nice Caaren from Springlake. That's for you. Talk

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Speaker 2: to us about the markets. What do we do here?

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Speaker 2: Do we just sit on the sidelines until the election's

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Speaker 2: over and then become investors again? What are you telling

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Speaker 2: your clients about these markets these days?

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Speaker 5: Well?

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Speaker 10: I mean yeah, I mean the election is the number

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Speaker 10: one most important piece of news that the markets is

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Speaker 10: waiting for we have a virtual tie and almost all

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Speaker 10: the polls and I have opinions on where I think

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Speaker 10: that kind of leans. But in that kind of environment,

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Speaker 10: companies are reluctant to make any big Capex decision, are

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Speaker 10: kind of putting a pause on policy, waiting to see,

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Speaker 10: you know, who wins, because the rules could be substantially

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Speaker 10: different depending on who becomes the victor.

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Speaker 4: Well, what do you make, Shana of the betting market?

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Speaker 4: We talk kind of ad nauseum. It feels like at

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Speaker 4: poly market and predicted and how that impacts it. What

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Speaker 4: the Trump trade is or isn't. If we're still in

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Speaker 4: agreement that it's a coin flip, how are people positioning

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Speaker 4: if we are kind of at least reading about in

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Speaker 4: Bloomberg's reporting about kind of the so called Trump trade,

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Speaker 4: if it still feels kind of like a deadlock.

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Speaker 10: Well, I think there's this one little caveat nuance to this,

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Speaker 10: which is that I think in polls that are showing

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Speaker 10: a deadlocked electorate that is actually pro Trump in my opinion, right,

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Speaker 10: I think we've seen this in every election he's been

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Speaker 10: involved in. The Polls tend to underestimate his voting, his

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Speaker 10: voters because being associated as a Trump voter has some

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Speaker 10: negative connotation in the broad public right, so people are

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Speaker 10: less likely to be honest about it until they get

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Speaker 10: into the the voting booth, and then it doesn't matter

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Speaker 10: because it's truly anonymous or we hope. So in that case,

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Speaker 10: I think that when you see something where it's a

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Speaker 10: virtual tie, it's probably leaning more in Trump's direction.

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Speaker 11: Than it is in Harris's direction.

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Speaker 2: That's just my opinion, all right, So elections aside, it

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Speaker 2: seems like we've got a FED that's accommodative, seems like

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Speaker 2: earnings generally remain fairly strong, the economy remains fairly strong,

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Speaker 2: in inflation coming down.

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Speaker 5: Is that?

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Speaker 2: How constructive is that for you guys in terms of

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Speaker 2: taking risk in this market in place?

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Speaker 10: Well, I think this is a market where you can

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Speaker 10: take risk. So for me, the way I position portfolios

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Speaker 10: is I want to make sure I can get the

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Speaker 10: most upside.

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Speaker 11: I can from the equity markets because I.

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Speaker 10: Think that the probability of upside in the equity markets

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Speaker 10: is quite high, and I think it's also high probability

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Speaker 10: of risk assets outperforming, so I want to be able

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Speaker 10: to take that risk. I'm not as certain about fixed

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Speaker 10: income markets. So I'm taking some of my fixed income

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Speaker 10: allocation and putting it into more alternative strategies, which I

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Speaker 10: think do better than fixed income but allow me to

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Speaker 10: take more risk and equities because they are diversifiers that

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Speaker 10: tend to reduce overall portfolio risk. So that's kind of

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Speaker 10: how I'm positioning myself.

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Speaker 4: Right now within taking on risk. When you say that,

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Speaker 4: do you mean within large caps? Are you skewing out

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Speaker 4: more towards like a small cap? I just am looking

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Speaker 4: at in terms of earnings we're going to hear from

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Speaker 4: this week alone Alphabet, AMD, Microsoft, Meta, Apple, Amazon, and

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Speaker 4: that's really cap X comments have been making up so

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Speaker 4: much of the Nvidia trade. So when you're looking at

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Speaker 4: allocating risks to equities, what does that look like?

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Speaker 10: So I do think it involved some of the high

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Speaker 10: flyer growth stocks. We haven't had an environment that's conducive

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Speaker 10: to small caps or value in a while. Jason Trendert

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Speaker 10: from STRTIGAZ did a great piece last week called ten

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Speaker 10: Things I Think, I Think, and one of the things

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Speaker 10: he talked about is in since two thousand and nine,

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Speaker 10: we've been in this perpetual QE cycle where companies haven't

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Speaker 10: been permitted to fail, and we've been in this perpetual

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Speaker 10: late cycle business cycle. The business cycles kind of disappeared,

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Speaker 10: and in doing that, it's been a complete headwind to

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Speaker 10: anything that would benefit from things winning and losing and

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Speaker 10: not allowing companies to fail has kind of also increased

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Speaker 10: the haves and have nots. So I'm willing to take

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Speaker 10: more risk in those larger cap names. That's where I

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Speaker 10: actually think there is more risk, but also things like bitcoin,

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Speaker 10: which is not a stock obviously, but is a risk asset.

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Speaker 10: In my opinion, I would argue small caps could be

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Speaker 10: considered a risk asset, but value wouldn't be right. So

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Speaker 10: you're probably staying away from some of your cyclicals and

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Speaker 10: you're going with your more risk growth beta names.

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Speaker 11: Is where I would be paying attention right.

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Speaker 2: Now, Shane. I know you have a lot of experience

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Speaker 2: in alternatives, and I've been surprised when I talk to

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Speaker 2: retail advisors how willing they are to embrace alternatives and

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Speaker 2: to a much higher percentage of their portfolio than I

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Speaker 2: would have thought. Where do you see opportunities in alternatives

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Speaker 2: these days? Private equity, private credit has becomes so big.

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Speaker 2: Hedge funds where do you see alternatives? How do you

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Speaker 2: talk your clients about that?

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Speaker 10: So private credit is credit, it's correlated to credit markets.

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Speaker 10: Private equity is equity, it's correlated to equity markets. So

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Speaker 10: they belong in equity and fixed income. And while they

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Speaker 10: are alternatives in the sense that their liquidity terms and

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Speaker 10: not available to everyone, they're not necessarily diverse fying alternatives.

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Speaker 10: I think the opportunities lie in those diverse fying alternatives,

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Speaker 10: things like hedge equity, and there's a million different ways

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Speaker 10: to slice that pie. That's a pro and a con

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Speaker 10: of that asset class. It's you know, they all kind

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Speaker 10: of get thrown in together, but you can do hedge

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Speaker 10: equity a million different ways, market neutral, managed future is

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Speaker 10: global macro, more those hedge fund type strategies, but also

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Speaker 10: looking at you know, things like sports rights. I've talked

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Speaker 10: about this a million times because I'm a huge sports

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Speaker 10: fan and it resonates with me. But there's real opportunity

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Speaker 10: here for you to be able to bring diversification into

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Speaker 10: your portfolio using things like that. And while advisors are

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Speaker 10: definitely more open to alternatives than they've been before, it's

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Speaker 10: mostly because their clients are demanding it.

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Speaker 11: Right.

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Speaker 10: It's because if they don't, then they could lose those relationships.

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Speaker 10: And ALTS, I would argue, is a relationship builder because

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Speaker 10: you can really I mean, it's such a huge universe,

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Speaker 10: you can really find things that will resonate with your

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Speaker 10: client on a million different levels. So they're seeing that,

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Speaker 10: but seventy five percent advisors still don't use alts and

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Speaker 10: the vast majority are allocating something like five percent, where

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Speaker 10: institutions is more like twenty five to thirty. So there's

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Speaker 10: a huge gap there. Still, it's going to take a

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Speaker 10: long time to get there, and we as an industry

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Speaker 10: have not done advisors any favor by making investing in

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Speaker 10: any sort of alternative incredibly difficult, operationally cumbersome, and in some.

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Speaker 11: Cases just annoying.

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Speaker 10: Like just a trade BTL, which is an alternative ETF.

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Speaker 10: If you tried to do that in your Fidelity or

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Speaker 10: Schwab account, you'd get a pop up saying that you

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Speaker 10: need to change your risk tolerance to aggressive. And I

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Speaker 10: would argue, if I am an aggressive investor, i am

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Speaker 10: definitely not doing hedge, dequity or market neutral like that's

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Speaker 10: like completely counterintuitive. But because of that, it sort of

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Speaker 10: makes people shy away because you've got to change your

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Speaker 10: client's risk tolerance and it's not reflective of reality just

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Speaker 10: to be able to make a trade.

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Speaker 4: And when you talk sports diversification sports rights, like, I

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Speaker 4: immediately think of the fact that the Atlanta Braids are

437
00:22:53,280 --> 00:22:55,399
Speaker 4: publicly traded. Is that what you mean or how do

438
00:22:55,480 --> 00:22:59,440
Speaker 4: you think about allocation to sports is an alternative investment?

439
00:22:59,560 --> 00:23:01,919
Speaker 11: No, I think the private equity aspect of it.

440
00:23:02,040 --> 00:23:06,120
Speaker 10: So my favorite fund in that space is the one

441
00:23:06,160 --> 00:23:10,960
Speaker 10: managed by Avenue Capital because I think that what they're

442
00:23:10,960 --> 00:23:13,120
Speaker 10: doing is really interesting. They weren't one of the high

443
00:23:13,119 --> 00:23:16,200
Speaker 10: flyers that was approved by the NFL, but they invest

444
00:23:16,240 --> 00:23:18,320
Speaker 10: in MLB and NBA and things of that.

445
00:23:18,840 --> 00:23:22,320
Speaker 11: Mark Lazari is the kind of founder of that firm.

446
00:23:22,400 --> 00:23:23,120
Speaker 11: He used to own the.

447
00:23:23,040 --> 00:23:28,600
Speaker 10: Box, but he talks about it also in the credit sense.

448
00:23:29,000 --> 00:23:31,639
Speaker 10: Most people don't realize that banks won't lend to sports

449
00:23:31,680 --> 00:23:35,920
Speaker 10: teams because the goal to have a franchise that's worth

450
00:23:35,960 --> 00:23:38,479
Speaker 10: anything is based on whether or not you win, and

451
00:23:38,480 --> 00:23:40,960
Speaker 10: you don't win if you don't spend, and banks don't

452
00:23:41,000 --> 00:23:44,200
Speaker 10: like that so much. So, you know, teams, when they

453
00:23:44,240 --> 00:23:46,919
Speaker 10: need access to the credit markets, they don't really have

454
00:23:46,960 --> 00:23:49,360
Speaker 10: any place to go, so that fund does that. They

455
00:23:49,400 --> 00:23:52,720
Speaker 10: also do what they call emerging sports. So I've done

456
00:23:52,720 --> 00:23:56,320
Speaker 10: a bunch of interviews talking about cricket, Like, cricket is

457
00:23:56,320 --> 00:23:59,000
Speaker 10: an incredibly interesting area of private equity is looking at

458
00:23:59,040 --> 00:24:00,320
Speaker 10: buying cricket teams.

459
00:24:01,200 --> 00:24:02,760
Speaker 11: Women's sports is huge.

460
00:24:03,080 --> 00:24:06,000
Speaker 10: You know, you have the yacht league that's out there

461
00:24:06,080 --> 00:24:08,840
Speaker 10: and some of this as we have the proliferation of

462
00:24:08,840 --> 00:24:11,800
Speaker 10: streaming services and everybody trying to get live events because

463
00:24:11,800 --> 00:24:13,840
Speaker 10: that's really the only way you can get ad dollars.

464
00:24:14,200 --> 00:24:15,840
Speaker 11: You're seeing this more and more.

465
00:24:15,840 --> 00:24:19,800
Speaker 10: Which gives you more and more opportunity to make money

466
00:24:19,800 --> 00:24:21,679
Speaker 10: in sports that maybe we wouldn't have paid attention for.

467
00:24:21,800 --> 00:24:22,320
Speaker 11: A while back.

468
00:24:22,400 --> 00:24:25,440
Speaker 2: Yeah, lots of different opportunities out there. Shana Sisil, thank

469
00:24:25,440 --> 00:24:27,240
Speaker 2: you so much for joining us. Shane Sisil, She's a

470
00:24:27,280 --> 00:24:31,640
Speaker 2: president and CEO of ban reON Capital Management based in Chicago,

471
00:24:32,119 --> 00:24:35,479
Speaker 2: but originally from Boston. We've got that all cleared up.

472
00:24:37,119 --> 00:24:41,000
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

473
00:24:41,080 --> 00:24:44,639
Speaker 1: weekdays at ten am Eastern on applecar Play and Android

474
00:24:44,640 --> 00:24:47,399
Speaker 1: Auto with the Bloomberg Business app. You can also listen

475
00:24:47,520 --> 00:24:50,639
Speaker 1: live on Amazon Alexa from our flagship New York station

476
00:24:51,000 --> 00:24:54,720
Speaker 1: just say Alexa playing Bloomberg eleven thirty.

477
00:24:55,600 --> 00:24:58,439
Speaker 2: Let's switch gears and touch base on the ever changing

478
00:24:58,680 --> 00:25:02,159
Speaker 2: situation in the Middle East. Kirsten Fulton Rose joins as

479
00:25:02,200 --> 00:25:06,840
Speaker 2: president of Red six Solutions. Kirsten, I guess the most

480
00:25:06,840 --> 00:25:09,399
Speaker 2: recent data point that everyone's trying to digest here is

481
00:25:09,800 --> 00:25:14,560
Speaker 2: the Israeli response in its attack on Iran. How would

482
00:25:14,560 --> 00:25:19,440
Speaker 2: you characterize Israel's response sending approximate one hundred fighter jets

483
00:25:19,440 --> 00:25:23,720
Speaker 2: to attack some key logistical targets. What do you make

484
00:25:23,720 --> 00:25:24,640
Speaker 2: of that move?

485
00:25:26,280 --> 00:25:28,600
Speaker 12: It's interesting. One hundred fighter jets sounds like a lot.

486
00:25:29,119 --> 00:25:31,560
Speaker 13: They were sent in three waves, but this response was

487
00:25:31,600 --> 00:25:35,640
Speaker 13: actually designed to allow Iran to declare it requires no response.

488
00:25:35,880 --> 00:25:39,840
Speaker 13: Israel only hit military sites. They hit outside densely populated areas.

489
00:25:40,200 --> 00:25:43,879
Speaker 13: They had it most one civilian casualty. The Israeli defense

490
00:25:43,880 --> 00:25:47,240
Speaker 13: forces say that they targeted border radar systems with very

491
00:25:47,320 --> 00:25:51,640
Speaker 13: light warheads direct quote to remove Aroan's early warning capability,

492
00:25:51,720 --> 00:25:54,800
Speaker 13: and then they followed with the jets that struck carefully

493
00:25:54,840 --> 00:25:55,800
Speaker 13: selected sites.

494
00:25:56,320 --> 00:25:57,760
Speaker 12: If we look at those sites.

495
00:25:58,280 --> 00:26:01,760
Speaker 13: According to some experience US analysts who were looking at

496
00:26:01,880 --> 00:26:05,359
Speaker 13: unclassified imagery, Israel struck buildings in a couple of places,

497
00:26:05,359 --> 00:26:09,280
Speaker 13: including in Parchen and in Klojure, and there are two

498
00:26:09,280 --> 00:26:13,400
Speaker 13: reasons why these locations matter. One, Israel hit Clgier, which

499
00:26:13,440 --> 00:26:16,159
Speaker 13: is a large missile production site that's near Tehran but

500
00:26:16,240 --> 00:26:19,560
Speaker 13: not in it. The reports back in July that Hadro

501
00:26:19,760 --> 00:26:22,639
Speaker 13: was being expanded, So according to these analysts looking at

502
00:26:22,640 --> 00:26:26,880
Speaker 13: the imagery, Israel's pinpointed strikes could have significantly reduced Iran's

503
00:26:26,880 --> 00:26:29,919
Speaker 13: capacity to produce missiles, which then make it less apt

504
00:26:30,200 --> 00:26:32,720
Speaker 13: to want to continue this fight with Israel right now.

505
00:26:33,280 --> 00:26:37,440
Speaker 13: Second Partschen is a large military complex near Tehran as well,

506
00:26:37,520 --> 00:26:40,200
Speaker 13: so capital pays attention, but it's not actually feeling the hit.

507
00:26:40,560 --> 00:26:43,199
Speaker 13: The satellite imagery analysts tell us that Israel hit a

508
00:26:43,200 --> 00:26:46,160
Speaker 13: building there that was used for testing in an old

509
00:26:46,280 --> 00:26:49,440
Speaker 13: nuclear weapon weapons program that was called the Ahmad Plan.

510
00:26:49,680 --> 00:26:52,760
Speaker 13: This program was shut down about twenty years ago according

511
00:26:52,800 --> 00:26:56,439
Speaker 13: to international watchdogs, but Iran denied it ever worked on

512
00:26:56,440 --> 00:26:59,320
Speaker 13: a nuclear weapon there. So this target, we think was

513
00:26:59,359 --> 00:27:03,080
Speaker 13: a message to Tehran. We hit an old facility without personnel,

514
00:27:03,119 --> 00:27:07,960
Speaker 13: without nuclear material present this time, but we can reach

515
00:27:07,960 --> 00:27:10,760
Speaker 13: your nuclear facilities without you being able to prevent it

516
00:27:10,800 --> 00:27:11,440
Speaker 13: in the future.

517
00:27:11,720 --> 00:27:13,479
Speaker 12: If we think it's necessary.

518
00:27:13,880 --> 00:27:17,040
Speaker 4: And Kirsten, you have more than two decades of experience

519
00:27:17,040 --> 00:27:19,480
Speaker 4: working in our security with a focus in the Middle

520
00:27:19,520 --> 00:27:21,560
Speaker 4: East and Africa. One of the things that stood out

521
00:27:21,600 --> 00:27:24,560
Speaker 4: to me was that Israel distributed videos of Prime Minister

522
00:27:24,640 --> 00:27:28,080
Speaker 4: Benjamin n Yahoo and military chiefs coordinating the defense from

523
00:27:28,119 --> 00:27:33,639
Speaker 4: a ministry bunker, which was a rare acknowledgment of an

524
00:27:33,640 --> 00:27:36,480
Speaker 4: attack on Islamic Republican expansion what had been mostly a

525
00:27:36,520 --> 00:27:39,040
Speaker 4: shadow war. What do you make of the video being

526
00:27:39,080 --> 00:27:42,439
Speaker 4: distributed and how does that potentially impact kind of the

527
00:27:42,480 --> 00:27:43,119
Speaker 4: path forward.

528
00:27:44,240 --> 00:27:47,000
Speaker 13: I think the reason for distributing the video was to

529
00:27:47,040 --> 00:27:49,800
Speaker 13: make it clear to the international community that Israel is

530
00:27:49,920 --> 00:27:52,800
Speaker 13: in a real war, that it is truly the existential

531
00:27:52,840 --> 00:27:55,320
Speaker 13: threat it feels it wants the international community to have

532
00:27:55,400 --> 00:27:57,879
Speaker 13: a sense of as well. While we're planning our response

533
00:27:57,920 --> 00:28:01,520
Speaker 13: on Israel on Iran, we are still taking hits from

534
00:28:01,560 --> 00:28:05,080
Speaker 13: Hazbala and from Hemas and perhaps from the Huthis. So

535
00:28:05,119 --> 00:28:08,080
Speaker 13: they're trying to let the international community know that this

536
00:28:08,200 --> 00:28:11,120
Speaker 13: is not something they're taking lately, that they're being arrogant,

537
00:28:11,119 --> 00:28:14,159
Speaker 13: that they really see the threat as serious. So that

538
00:28:14,200 --> 00:28:16,800
Speaker 13: means US support needs to stay high, that means Europe

539
00:28:16,800 --> 00:28:18,800
Speaker 13: needs to stay behind them. They're trying to make sure

540
00:28:18,800 --> 00:28:22,679
Speaker 13: that they continue to maintain this level of support and

541
00:28:22,760 --> 00:28:26,439
Speaker 13: this level of attention on the threat from their international

542
00:28:26,440 --> 00:28:30,639
Speaker 13: partners while they stage these responses, sometimes without listening closely

543
00:28:30,680 --> 00:28:32,040
Speaker 13: to their international partners.

544
00:28:33,119 --> 00:28:35,600
Speaker 2: Kirsen, what do you think the end game is now

545
00:28:35,640 --> 00:28:38,440
Speaker 2: for Israel and maybe the timing associated with that.

546
00:28:40,240 --> 00:28:42,520
Speaker 12: For Israel? The endgame is not with the international community

547
00:28:42,560 --> 00:28:43,320
Speaker 12: you would like to hear.

548
00:28:43,520 --> 00:28:47,200
Speaker 13: The arguments for a ceasefire are ongoing from almost every

549
00:28:47,240 --> 00:28:52,240
Speaker 13: corner except from inside Israel, and often except from inside

550
00:28:52,280 --> 00:28:54,040
Speaker 13: parts of Hamas and parts of Habeala.

551
00:28:54,320 --> 00:28:54,800
Speaker 12: For instance.

552
00:28:54,840 --> 00:28:56,840
Speaker 13: You see that Hasbala right now is saying it will

553
00:28:56,840 --> 00:28:59,880
Speaker 13: not negotiate less it's not under attack, and their own

554
00:29:00,080 --> 00:29:02,680
Speaker 13: speaker of the parliament in Lebanon is negotiating for them.

555
00:29:02,880 --> 00:29:05,240
Speaker 12: So Israel saying, look, we don't.

556
00:29:05,000 --> 00:29:08,080
Speaker 13: Have space to talk about a ceasefire unless it's short

557
00:29:08,280 --> 00:29:10,320
Speaker 13: we get some of our hostages back so that we

558
00:29:10,360 --> 00:29:13,360
Speaker 13: can reduce the domestic pressure on us to bring hostages home.

559
00:29:13,680 --> 00:29:16,320
Speaker 13: But this conflict is not over as long as there

560
00:29:16,360 --> 00:29:18,480
Speaker 13: is still a threat, As long as all of these

561
00:29:18,480 --> 00:29:20,960
Speaker 13: groups continue to say one of their primary objectives is

562
00:29:21,000 --> 00:29:24,360
Speaker 13: to eliminate our state from the map. This threat will

563
00:29:24,400 --> 00:29:27,640
Speaker 13: continue to face us. We will continue to fight this

564
00:29:27,920 --> 00:29:31,120
Speaker 13: kind of onslaught every few years like we have for

565
00:29:31,200 --> 00:29:34,760
Speaker 13: decades now, unless we do something decisive. So they're looking

566
00:29:34,800 --> 00:29:38,520
Speaker 13: to uproot Hamas, uproot Hu's Baalah, shut down the Khuthi's

567
00:29:38,560 --> 00:29:43,160
Speaker 13: ability or will to fight this war on behalf of Hamas,

568
00:29:43,200 --> 00:29:45,040
Speaker 13: and to put Yourn on the back foot where it

569
00:29:45,120 --> 00:29:48,320
Speaker 13: is no longer has the capacity to strike and perhaps

570
00:29:48,360 --> 00:29:50,480
Speaker 13: no longer the will. It certainly does not have the

571
00:29:50,520 --> 00:29:54,600
Speaker 13: domestic support, but the hardliners in Iran's leadership are going

572
00:29:54,640 --> 00:29:56,960
Speaker 13: to push that fight going forward as well.

573
00:29:57,000 --> 00:29:57,720
Speaker 12: This is not over.

574
00:29:58,400 --> 00:30:00,680
Speaker 2: Yep, all right, That's kind of what what we're hearing

575
00:30:00,680 --> 00:30:02,960
Speaker 2: across the board. Kirsten, thank you so much for joining us.

576
00:30:03,040 --> 00:30:07,520
Speaker 2: Kirsten fontin Rose, she is the president of Red six Solutions,

577
00:30:08,120 --> 00:30:10,440
Speaker 2: joining us in Washington, DC via zoom kind of getting

578
00:30:10,480 --> 00:30:13,600
Speaker 2: the latest there. But again, it seems like this is

579
00:30:13,600 --> 00:30:16,720
Speaker 2: Israel saying, you know, we're going to settle everything here.

580
00:30:16,960 --> 00:30:18,719
Speaker 2: That's kind of our goal as opposed to maybe when

581
00:30:18,760 --> 00:30:20,800
Speaker 2: we started out a year ago, which is, you know,

582
00:30:21,400 --> 00:30:25,200
Speaker 2: neutralize Hamas and get her hostages back. This obviously is

583
00:30:25,280 --> 00:30:26,400
Speaker 2: much broader, much wider.

584
00:30:27,920 --> 00:30:31,800
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

585
00:30:31,880 --> 00:30:35,400
Speaker 1: weekdays at ten am Eastern on applecar Play and Android

586
00:30:35,440 --> 00:30:38,200
Speaker 1: Auto with the Bloomberg Business App. You can also listen

587
00:30:38,320 --> 00:30:41,400
Speaker 1: live on Amazon Alexa from our flagship New York station,

588
00:30:41,800 --> 00:30:44,480
Speaker 1: Just Say Alexa Play Bloomberg eleven.

589
00:30:44,280 --> 00:30:48,560
Speaker 2: Thirty Billy Lipschild sitting in for Alex steel On Paul Sweeney.

590
00:30:48,720 --> 00:30:50,760
Speaker 2: We're live here on O Bloomberg in Arrector Brokers Studio,

591
00:30:50,760 --> 00:30:53,240
Speaker 2: streaming live on YouTube as well. Boy, if you we're

592
00:30:53,280 --> 00:30:56,000
Speaker 2: paying attention, the ten year treasury just in the last

593
00:30:56,040 --> 00:30:58,680
Speaker 2: five weeks has gone from a yield of three point

594
00:30:58,840 --> 00:31:02,400
Speaker 2: six percent to four point two six percent. Kind of

595
00:31:02,400 --> 00:31:05,160
Speaker 2: where we are today, that's a big time move here.

596
00:31:05,600 --> 00:31:06,840
Speaker 2: I don't know what's going on out there in the

597
00:31:06,880 --> 00:31:09,240
Speaker 2: bond market, but our next guest does. R J Gallow.

598
00:31:09,320 --> 00:31:11,680
Speaker 2: He's a senior portfolio manager of fixed income and Federated

599
00:31:11,680 --> 00:31:15,320
Speaker 2: at Hermes, coming to us from Pittsburgh, PA. No, they

600
00:31:15,360 --> 00:31:17,520
Speaker 2: do not have a team in the World Series, but

601
00:31:17,560 --> 00:31:20,800
Speaker 2: they have a good football team. So r J, thanks

602
00:31:20,840 --> 00:31:22,760
Speaker 2: so much for joining us here. My giants are coming

603
00:31:22,760 --> 00:31:26,360
Speaker 2: out to Pittsburgh tonight. It'd be nice to them. What's

604
00:31:26,360 --> 00:31:27,600
Speaker 2: going on in fixed income market?

605
00:31:27,600 --> 00:31:27,840
Speaker 6: Again?

606
00:31:27,880 --> 00:31:29,840
Speaker 2: That ten year treasury kind of got me by surprise

607
00:31:29,920 --> 00:31:32,680
Speaker 2: that the moves we've seen in rates, what's going on

608
00:31:32,720 --> 00:31:33,040
Speaker 2: out there?

609
00:31:34,360 --> 00:31:38,280
Speaker 9: Yeah, well, good morning, Yeah, steals giants side always excited

610
00:31:39,040 --> 00:31:42,480
Speaker 9: in terms of the rates market. There's been quite a

611
00:31:42,520 --> 00:31:46,520
Speaker 9: turn of events basically since the Fed's ease. The fedies

612
00:31:46,640 --> 00:31:50,080
Speaker 9: fifty basis points, and you might recall leading into that meeting,

613
00:31:50,200 --> 00:31:53,080
Speaker 9: the expectation was twenty five. The Fed seemed to use

614
00:31:53,160 --> 00:31:56,720
Speaker 9: media outlets to lay the groundwork for a fifty basis

615
00:31:56,720 --> 00:31:59,680
Speaker 9: point ease, a bold move when the economy isn't back

616
00:31:59,720 --> 00:32:02,920
Speaker 9: doing well. Since the data, excuse me, since the FED

617
00:32:02,920 --> 00:32:05,040
Speaker 9: meeting and the fifty basis point ees, the data has

618
00:32:05,040 --> 00:32:07,880
Speaker 9: in fact affirmed that the economy is doing pretty well.

619
00:32:08,240 --> 00:32:11,920
Speaker 9: So you have the Fed layering in a large first

620
00:32:12,000 --> 00:32:14,520
Speaker 9: move in what will be a path of easing, and

621
00:32:14,560 --> 00:32:17,719
Speaker 9: an economy that has been quite resilient on the on

622
00:32:17,760 --> 00:32:20,400
Speaker 9: the labor and growth front, terms of things like retail

623
00:32:20,440 --> 00:32:23,480
Speaker 9: sales and CPI came in a little firmer than expected.

624
00:32:23,840 --> 00:32:26,360
Speaker 9: So you have an economy that's not showing signs of recession,

625
00:32:26,600 --> 00:32:31,960
Speaker 9: a FED that's committed to landing the economy outside of recession,

626
00:32:31,960 --> 00:32:33,959
Speaker 9: a soft landing as we've all come to call it.

627
00:32:34,880 --> 00:32:38,240
Speaker 9: And then you have the election coming up. All those

628
00:32:38,280 --> 00:32:41,840
Speaker 9: factors have leaned towards a significant repricing hire and yield.

629
00:32:41,920 --> 00:32:44,520
Speaker 9: You mentioned the ten year treasury I think if you

630
00:32:44,520 --> 00:32:48,560
Speaker 9: take a look at the implied rate on SOFA futures

631
00:32:49,480 --> 00:32:53,680
Speaker 9: out in June of twenty twenty six, the implied rate

632
00:32:53,840 --> 00:32:57,520
Speaker 9: has risen almost eighty basis points since September tenth. It

633
00:32:57,560 --> 00:33:00,480
Speaker 9: is now three point fifty five. It was one below

634
00:33:00,520 --> 00:33:01,120
Speaker 9: to eighty.

635
00:33:01,680 --> 00:33:02,000
Speaker 5: Wow.

636
00:33:02,040 --> 00:33:05,040
Speaker 9: So all those factors have really hit the bond market

637
00:33:05,040 --> 00:33:08,320
Speaker 9: pretty hard. It's now priced i think for perhaps an

638
00:33:08,360 --> 00:33:11,600
Speaker 9: inflationary election outcome, and that's the next big focus the

639
00:33:11,640 --> 00:33:12,400
Speaker 9: election itself.

640
00:33:12,680 --> 00:33:15,320
Speaker 4: Well within that, we're eight days from the election. How

641
00:33:15,400 --> 00:33:18,960
Speaker 4: should investors be positioning just given the polls that we've

642
00:33:19,000 --> 00:33:21,520
Speaker 4: been seeing and how kind of markets have seemingly been

643
00:33:21,560 --> 00:33:22,280
Speaker 4: moving ahead of it.

644
00:33:23,920 --> 00:33:26,840
Speaker 9: Yeah, well, the markets certainly have been moving, and by markets,

645
00:33:27,040 --> 00:33:30,480
Speaker 9: I'm sort of speaking broadly, the betting markets, starting probably

646
00:33:30,480 --> 00:33:34,280
Speaker 9: in the first week of October, just started shifting in

647
00:33:34,320 --> 00:33:36,959
Speaker 9: the direction of a Trump win and a red sweep

648
00:33:37,000 --> 00:33:40,239
Speaker 9: as the most probable of outcomes according to some of them,

649
00:33:40,280 --> 00:33:42,880
Speaker 9: you know, forty five to fifty percent probability of a

650
00:33:42,920 --> 00:33:45,440
Speaker 9: red sweep. That's a big change from where they were

651
00:33:45,440 --> 00:33:49,320
Speaker 9: in September. The financial markets, including the impact on rates,

652
00:33:49,560 --> 00:33:52,440
Speaker 9: I think the economy's resilience that I just described, and

653
00:33:52,800 --> 00:33:55,640
Speaker 9: the unwind of expectations to some degree of a deep

654
00:33:55,680 --> 00:33:58,800
Speaker 9: fed easing path, those were the primary drivers. But the

655
00:33:58,880 --> 00:34:02,360
Speaker 9: election risk and the prospect of an inflationary setup policies

656
00:34:02,400 --> 00:34:05,960
Speaker 9: from a Trump two point zero, we're secondary factors there.

657
00:34:06,640 --> 00:34:08,440
Speaker 9: I think it's safe to say that the market now

658
00:34:08,560 --> 00:34:11,279
Speaker 9: is leaning heavily in the direction that we just described,

659
00:34:12,320 --> 00:34:14,759
Speaker 9: but I would still think some caution is warranted. We're

660
00:34:14,840 --> 00:34:18,279
Speaker 9: leaning a little bit short, not aggressively. So there's a

661
00:34:18,280 --> 00:34:21,279
Speaker 9: lot of other complex factors out there. Kamala Harris could

662
00:34:21,280 --> 00:34:23,480
Speaker 9: surprise us on election day. We could actually have an

663
00:34:23,480 --> 00:34:27,000
Speaker 9: indeterminate election outcome. You go back to two thousand, a

664
00:34:27,080 --> 00:34:31,200
Speaker 9: highly indeterminate outcome between Gore and George W. Bush led

665
00:34:31,239 --> 00:34:34,160
Speaker 9: to yields falling, in flight to quality demand and risk

666
00:34:34,200 --> 00:34:37,399
Speaker 9: assets struggling. If we have prolonged and decision this time,

667
00:34:37,440 --> 00:34:39,720
Speaker 9: you might see a rerun of that script.

668
00:34:40,640 --> 00:34:43,040
Speaker 2: So when you guys get together for your Monday morning

669
00:34:43,040 --> 00:34:45,799
Speaker 2: meeting plot out the week, where do you guys see

670
00:34:45,880 --> 00:34:49,680
Speaker 2: value these days?

671
00:34:49,719 --> 00:34:51,320
Speaker 9: A great question, you know. So we started off the

672
00:34:51,400 --> 00:34:53,239
Speaker 9: year thinking the bond market was going to produce us

673
00:34:53,239 --> 00:34:56,759
Speaker 9: pretty good total returns, and then that was sort of

674
00:34:56,800 --> 00:34:59,640
Speaker 9: tempered earlier in twenty twenty four by the fact that

675
00:34:59,680 --> 00:35:02,960
Speaker 9: Inflame had a bit of a resurgence and started getting

676
00:35:03,160 --> 00:35:06,719
Speaker 9: a little sticky. We had a great run there from

677
00:35:06,760 --> 00:35:10,480
Speaker 9: say April all the way up through the expectations of

678
00:35:10,520 --> 00:35:13,240
Speaker 9: the FED easing, but now the total returns are getting

679
00:35:13,239 --> 00:35:15,160
Speaker 9: diminished yet again. So for example, if you look at

680
00:35:15,200 --> 00:35:18,080
Speaker 9: the aggregate index, your today's total return is just up

681
00:35:18,080 --> 00:35:21,600
Speaker 9: two percent over the last three months, it's just one

682
00:35:21,640 --> 00:35:25,239
Speaker 9: point two And it's been a brutal October. Over the

683
00:35:25,320 --> 00:35:27,320
Speaker 9: last thirty days we've lost two and a half percent.

684
00:35:27,320 --> 00:35:29,280
Speaker 9: A month to day, we've lost two point three percent.

685
00:35:30,120 --> 00:35:33,400
Speaker 9: So just betting on rates has not been compelling. But

686
00:35:33,440 --> 00:35:35,920
Speaker 9: that's not all that we do. We obviously look at

687
00:35:35,960 --> 00:35:38,440
Speaker 9: and actively managed duration, but we realize calling rates is

688
00:35:38,440 --> 00:35:41,920
Speaker 9: a dicey prospect, so we focus very heavily on other variables.

689
00:35:42,000 --> 00:35:45,440
Speaker 9: So the yield curve has steepened sharply in relation to

690
00:35:45,719 --> 00:35:49,320
Speaker 9: the FEDS easing and the prospect of inflationary policies to come.

691
00:35:50,160 --> 00:35:53,280
Speaker 9: We've played that rather well in our number of our portfolios,

692
00:35:53,520 --> 00:35:56,239
Speaker 9: positioning for YELD curve steepening, and that's been a way

693
00:35:56,280 --> 00:36:00,239
Speaker 9: to generate alpha within a fixed income portfolio. When it

694
00:36:00,239 --> 00:36:03,680
Speaker 9: comes to credit, we've been overweight mortgages. We remain cautious

695
00:36:03,719 --> 00:36:05,480
Speaker 9: on how you in corpus where we think spreads are

696
00:36:05,520 --> 00:36:08,600
Speaker 9: just not enticing enough. But the good news about a

697
00:36:08,640 --> 00:36:11,799
Speaker 9: fixed income portfolio, a highly diversified one is you can

698
00:36:11,840 --> 00:36:14,520
Speaker 9: move across sectors to look for opportunities. You can move

699
00:36:14,600 --> 00:36:16,759
Speaker 9: up and down the YOK curve for changes and it's

700
00:36:16,760 --> 00:36:19,960
Speaker 9: slope and shape in addition to taking some positions on duration.

701
00:36:20,080 --> 00:36:23,440
Speaker 9: So all in all, we've been deploying all those different

702
00:36:23,480 --> 00:36:26,560
Speaker 9: tools to varying degrees throughout what's been a moderate return

703
00:36:26,600 --> 00:36:27,799
Speaker 9: but a positive return year.

704
00:36:28,520 --> 00:36:30,520
Speaker 2: All right, Urjie, thanks so much for joining us as always.

705
00:36:30,600 --> 00:36:30,719
Speaker 5: R J.

706
00:36:30,840 --> 00:36:33,279
Speaker 2: Gallow, Senior Portfolio Manager Fixed and come over there at

707
00:36:33,280 --> 00:36:34,600
Speaker 2: Federated Hermes.

708
00:36:35,719 --> 00:36:39,600
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

709
00:36:39,680 --> 00:36:43,200
Speaker 1: weekdays at ten am Eastern on Applecar Play and Android

710
00:36:43,200 --> 00:36:46,000
Speaker 1: Auto with a Bloomberg Business app. You can also listen

711
00:36:46,120 --> 00:36:49,200
Speaker 1: live on Amazon Alexa from our flagship New York station.

712
00:36:49,560 --> 00:36:52,320
Speaker 1: Just say Alexa Play Bloomberg eleven thirty.

713
00:36:53,440 --> 00:36:56,879
Speaker 2: All right, you're listening to Bloomberg Intelligence Belly Lipschultz sitting

714
00:36:56,920 --> 00:36:58,600
Speaker 2: in for alexel On Paul Sweeney live here in our

715
00:36:58,600 --> 00:37:01,520
Speaker 2: Bloomberg Interactive Brooker Studio, streaming live on YouTube as well.

716
00:37:01,560 --> 00:37:04,600
Speaker 2: We're eight days away from the election, and one aspect

717
00:37:04,600 --> 00:37:06,440
Speaker 2: the election we haven't really had to think about up

718
00:37:06,520 --> 00:37:09,440
Speaker 2: until the most cycled, most recent cycle or two is

719
00:37:09,480 --> 00:37:13,480
Speaker 2: just ensuring that we have safe and secure elections. That

720
00:37:13,719 --> 00:37:16,440
Speaker 2: is now a big deal, particularly with early voting and

721
00:37:16,440 --> 00:37:18,759
Speaker 2: mail and voting and all those things that came out

722
00:37:18,760 --> 00:37:21,040
Speaker 2: of the pandemic. Somebody who does think about that is

723
00:37:21,080 --> 00:37:24,279
Speaker 2: Rhet Buddle. He's the CEO of the Public Private Strategies

724
00:37:25,120 --> 00:37:28,800
Speaker 2: joining us here via zoom sod. How are you thinking

725
00:37:29,960 --> 00:37:33,399
Speaker 2: these elections are going to go next Tuesday and then

726
00:37:33,480 --> 00:37:37,160
Speaker 2: Wednesday and then Thursday? Are you what is your concern

727
00:37:37,280 --> 00:37:39,800
Speaker 2: level that we will in fact have safe and secure elections?

728
00:37:41,520 --> 00:37:43,319
Speaker 8: Well, great to be with you. So, first of all,

729
00:37:43,360 --> 00:37:45,319
Speaker 8: I mean you know, America, as we know, you know,

730
00:37:45,360 --> 00:37:48,440
Speaker 8: over the last you know, set of election cycles has

731
00:37:48,480 --> 00:37:51,239
Speaker 8: primarily had very safe and secure elections, and I think

732
00:37:51,239 --> 00:37:54,960
Speaker 8: we're feeling confident about all the elections to date, and

733
00:37:55,120 --> 00:37:57,919
Speaker 8: many of the you know, state local officius have worked

734
00:37:58,000 --> 00:38:00,760
Speaker 8: very hard to prepare. I think, you know, one of

735
00:38:00,480 --> 00:38:04,640
Speaker 8: the bigger questions is, you know, we probably will not

736
00:38:04,880 --> 00:38:07,520
Speaker 8: have the exact results of the election on election night,

737
00:38:08,040 --> 00:38:10,080
Speaker 8: and so you know, it might be until Saturday or

738
00:38:10,080 --> 00:38:12,480
Speaker 8: Sunday until we know an official winner. And so one

739
00:38:12,480 --> 00:38:14,400
Speaker 8: of the pieces that we've been thinking a lot about

740
00:38:14,480 --> 00:38:17,000
Speaker 8: is really making sure that folks are preparing for that,

741
00:38:17,000 --> 00:38:19,200
Speaker 8: that they know that every vote is still being counted

742
00:38:19,719 --> 00:38:21,520
Speaker 8: and that the process might just take a while. But

743
00:38:21,600 --> 00:38:24,279
Speaker 8: that is the important role of democracy, making sure every

744
00:38:24,320 --> 00:38:28,200
Speaker 8: vote gets counted, and particularly for business owners, understanding that

745
00:38:28,280 --> 00:38:31,440
Speaker 8: this sort of period of uncertainty is a really important

746
00:38:31,480 --> 00:38:34,080
Speaker 8: moment for businesses to be able to you know, bring

747
00:38:34,120 --> 00:38:36,160
Speaker 8: some calm to the market, to be able to say

748
00:38:36,160 --> 00:38:38,680
Speaker 8: this is how democracy plays out, not just in the

749
00:38:38,719 --> 00:38:40,160
Speaker 8: role that they play in the markets, but also in

750
00:38:40,200 --> 00:38:42,360
Speaker 8: the role that they play as community leaders. You know,

751
00:38:42,400 --> 00:38:44,600
Speaker 8: for a lot of CEOs who have employees this can

752
00:38:44,640 --> 00:38:47,399
Speaker 8: be a fraught time, for example, and so it's really

753
00:38:47,400 --> 00:38:50,560
Speaker 8: important to know that, you know, every vote will be counted.

754
00:38:50,719 --> 00:38:53,120
Speaker 8: The elections are on part of be very safe and secure,

755
00:38:53,560 --> 00:38:55,840
Speaker 8: but we may have a period of uncertainty and that's okay,

756
00:38:56,160 --> 00:38:58,960
Speaker 8: and we just need to understand that that might be

757
00:38:59,000 --> 00:39:02,160
Speaker 8: the case. But it's an important part of letting democracy

758
00:39:02,160 --> 00:39:02,520
Speaker 8: play out.

759
00:39:02,800 --> 00:39:05,239
Speaker 4: Well, I think back to twenty twenty when it took

760
00:39:05,280 --> 00:39:07,440
Speaker 4: a few days, but we were still in the midst

761
00:39:07,440 --> 00:39:10,120
Speaker 4: of the pandemic. Now in twenty twenty four, people will

762
00:39:10,160 --> 00:39:12,640
Speaker 4: be back into the office, back at work, back on

763
00:39:12,960 --> 00:39:15,800
Speaker 4: subways here in the New York and commuting around the country.

764
00:39:16,160 --> 00:39:20,440
Speaker 4: How does that actually kind of impact a delayed ruling

765
00:39:20,520 --> 00:39:23,160
Speaker 4: or delayed decision on who in fact will win the election,

766
00:39:23,280 --> 00:39:26,600
Speaker 4: especially as we see a number of contested seats across

767
00:39:26,880 --> 00:39:27,640
Speaker 4: the House and Senate.

768
00:39:28,800 --> 00:39:29,040
Speaker 6: Yeah.

769
00:39:29,080 --> 00:39:31,400
Speaker 8: Look, we're so used to having everything, you know, be

770
00:39:31,560 --> 00:39:34,760
Speaker 8: so instant instantaneous. We're used to obviously having a result,

771
00:39:34,880 --> 00:39:37,239
Speaker 8: you know, called on election night. The reality is, at

772
00:39:37,320 --> 00:39:40,440
Speaker 8: least for the national presidential election, we expect it to

773
00:39:40,440 --> 00:39:43,080
Speaker 8: be very close, and there's a number of states that

774
00:39:43,239 --> 00:39:45,520
Speaker 8: probably will take a few days to make sure that

775
00:39:45,560 --> 00:39:49,239
Speaker 8: every ballot is counted, and so you know, unlike where

776
00:39:49,239 --> 00:39:51,240
Speaker 8: we were all sort of huddled in our homes around

777
00:39:51,280 --> 00:39:54,880
Speaker 8: zoom screens or around TV screens, before you know, we

778
00:39:54,920 --> 00:39:56,840
Speaker 8: are going to have people going back into the office

779
00:39:57,239 --> 00:39:59,560
Speaker 8: and we know want the things we learned in twenty

780
00:39:59,600 --> 00:40:02,920
Speaker 8: sixty was that elections can invoke a lot of emotions

781
00:40:02,920 --> 00:40:06,000
Speaker 8: with employees and start a lot of conversation. And the

782
00:40:06,040 --> 00:40:09,280
Speaker 8: reality is is the workplace has become a really important

783
00:40:09,320 --> 00:40:11,840
Speaker 8: square for civic engagement. Right It's one of the places

784
00:40:11,840 --> 00:40:14,279
Speaker 8: where people interact, they talk to each other, and so

785
00:40:14,320 --> 00:40:17,520
Speaker 8: it's become increasingly important that business leaders and CEOs think

786
00:40:17,560 --> 00:40:19,400
Speaker 8: about the role they can play and sort of setting

787
00:40:19,400 --> 00:40:21,440
Speaker 8: the tone of the role that they can play in

788
00:40:21,440 --> 00:40:24,160
Speaker 8: sort of depoliticizing things and making sure that there's a

789
00:40:24,200 --> 00:40:26,920
Speaker 8: safe space. We've see in a lot of companies with

790
00:40:27,040 --> 00:40:30,080
Speaker 8: employee research groups that there's the opportunity to provide space

791
00:40:30,120 --> 00:40:32,600
Speaker 8: for dialogue. And so part of the work that we've

792
00:40:32,640 --> 00:40:34,920
Speaker 8: been doing under an initiative we created it's called the

793
00:40:34,920 --> 00:40:37,920
Speaker 8: Business and Democracy Initiative, is we've been working with business

794
00:40:37,960 --> 00:40:40,719
Speaker 8: leaders to help them prepare for this election to not

795
00:40:40,760 --> 00:40:42,880
Speaker 8: only sort of raise their voice in their communities to

796
00:40:42,880 --> 00:40:45,279
Speaker 8: talk about how this is the normal part of democracy,

797
00:40:45,520 --> 00:40:48,680
Speaker 8: but also to play an important role in sort of depolarizing,

798
00:40:48,800 --> 00:40:51,560
Speaker 8: de escalating and making sure that everyone's voices are heard

799
00:40:52,080 --> 00:40:53,920
Speaker 8: in this process over the next few weeks.

800
00:40:54,560 --> 00:40:57,560
Speaker 2: And the business leaders that you do speak to, what

801
00:40:57,680 --> 00:40:59,640
Speaker 2: is a concern level, if at all, that we have

802
00:40:59,840 --> 00:41:03,560
Speaker 2: a recreation of something like January sixth to that level.

803
00:41:04,880 --> 00:41:07,160
Speaker 8: Look, I think overall people feel that the election is

804
00:41:07,160 --> 00:41:08,719
Speaker 8: going to be safe and secure and that every vote

805
00:41:08,800 --> 00:41:11,719
Speaker 8: is counted. So that's that is a good point, you know.

806
00:41:11,840 --> 00:41:14,719
Speaker 8: I think generally what I hear from business leaders is,

807
00:41:14,760 --> 00:41:18,480
Speaker 8: you know, increasingly, you know, risk has become an issue

808
00:41:18,680 --> 00:41:22,080
Speaker 8: with just instability, and so even beyond the elections, you know,

809
00:41:22,280 --> 00:41:24,840
Speaker 8: there's a broader issue with the government, for example, not

810
00:41:25,040 --> 00:41:27,440
Speaker 8: being able to pass you know, funding bills that go

811
00:41:27,520 --> 00:41:30,520
Speaker 8: on for years, or the debate over the debt selling

812
00:41:30,560 --> 00:41:33,440
Speaker 8: for example, and not being able to reach resolution. So

813
00:41:33,440 --> 00:41:36,720
Speaker 8: there's that broader sort of risk level. You know, America,

814
00:41:36,760 --> 00:41:38,520
Speaker 8: as we all know, is the most important economy in

815
00:41:38,560 --> 00:41:41,040
Speaker 8: the world, and so having that certainty is really important

816
00:41:41,040 --> 00:41:43,760
Speaker 8: for business leaders. And I think over the last few years,

817
00:41:43,800 --> 00:41:47,239
Speaker 8: businesses have become increasingly frustrated that the government hasn't been

818
00:41:47,239 --> 00:41:50,960
Speaker 8: able to provide more stability and that partisanship is continued

819
00:41:51,000 --> 00:41:53,480
Speaker 8: to sort of really you know, make it difficult for

820
00:41:53,520 --> 00:41:56,879
Speaker 8: business leaders to make decisions, especially businesses who rely upon

821
00:41:56,920 --> 00:41:59,640
Speaker 8: the government for you know, a wide variety of factors.

822
00:41:59,640 --> 00:42:02,640
Speaker 8: So it's a broader sort of risk appetite rather than

823
00:42:02,800 --> 00:42:05,640
Speaker 8: just in this moment. But it's definitely something that boardrooms

824
00:42:05,640 --> 00:42:07,360
Speaker 8: and businesses are starting to look at.

825
00:42:07,920 --> 00:42:11,560
Speaker 2: All right, fascinating times. And we'll have election day eight

826
00:42:11,640 --> 00:42:13,359
Speaker 2: days and then we'll have to see how many days

827
00:42:13,360 --> 00:42:16,960
Speaker 2: are for that it takes to get a declared winner

828
00:42:17,160 --> 00:42:20,440
Speaker 2: and loser. Redbuttle, he's the CEO of the Public PRIVCT Strategies,

829
00:42:20,440 --> 00:42:22,799
Speaker 2: that's the name of the firm there, and again eight

830
00:42:22,880 --> 00:42:24,759
Speaker 2: days away, so we'll have to see.

831
00:42:24,800 --> 00:42:26,000
Speaker 9: Here.

832
00:42:26,520 --> 00:42:30,399
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

833
00:42:30,480 --> 00:42:33,560
Speaker 1: weekdays at ten am Eastern on Apple car Play and

834
00:42:33,560 --> 00:42:36,480
Speaker 1: Android Auto with the Bloomberg Business app. You can also

835
00:42:36,520 --> 00:42:40,040
Speaker 1: listen live on Amazon Alexa from our flagship New York station,

836
00:42:40,400 --> 00:42:43,160
Speaker 1: Just say Alexa Play Bloomberg eleven thirty.

837
00:42:44,880 --> 00:42:47,319
Speaker 2: We got an election coming up, so I'm told next

838
00:42:47,400 --> 00:42:51,360
Speaker 2: week one of the major issues from a policy perspective

839
00:42:51,360 --> 00:42:54,719
Speaker 2: that might see us a big difference depending upon who's

840
00:42:54,719 --> 00:42:59,120
Speaker 2: in the White House. Is kind of renewable energy, electric vehicles,

841
00:42:59,160 --> 00:43:01,680
Speaker 2: all that kind of stuff. So let's check out Corey

842
00:43:01,719 --> 00:43:05,359
Speaker 2: Kantra joins us, the lead US electric vehicle analysts. Yes,

843
00:43:05,400 --> 00:43:07,520
Speaker 2: we have one of those. He's at bn EF. Those

844
00:43:07,520 --> 00:43:10,400
Speaker 2: are the new energy finance people. He's in our Bloomberg

845
00:43:10,480 --> 00:43:14,800
Speaker 2: Interactive Broker's studio. Corey, how does your market, the electric

846
00:43:14,880 --> 00:43:17,600
Speaker 2: vehicle market looking at this election as to a Trump

847
00:43:17,640 --> 00:43:20,640
Speaker 2: presidency versus the potential Harris presidency is it?

848
00:43:20,800 --> 00:43:21,880
Speaker 6: Are there material differences?

849
00:43:21,960 --> 00:43:23,879
Speaker 14: Yeah, they're pretty big differences and great to be here

850
00:43:23,880 --> 00:43:25,719
Speaker 14: with you again. Paul and Bailey, still still doing the

851
00:43:25,760 --> 00:43:29,520
Speaker 14: EV thing. We basically are one week out of a

852
00:43:29,560 --> 00:43:32,919
Speaker 14: pretty pivotal moment of implementation of some pretty major US

853
00:43:33,000 --> 00:43:37,279
Speaker 14: federal policies. So everything from federal fuel economy standards that's

854
00:43:37,320 --> 00:43:39,719
Speaker 14: the kind of miles per gallon of new vehicles which

855
00:43:39,760 --> 00:43:44,000
Speaker 14: electric vehicles help automakers achieve, to the implementation of the

856
00:43:44,520 --> 00:43:47,120
Speaker 14: Inflation Reduction Act. So even though the law has passed

857
00:43:47,120 --> 00:43:49,759
Speaker 14: now over two years ago, you're going to see those

858
00:43:49,840 --> 00:43:52,640
Speaker 14: loans and grants from the federal government impacted all the

859
00:43:52,680 --> 00:43:55,600
Speaker 14: way up to the seventy five hundred dollars Clean Car

860
00:43:55,680 --> 00:43:58,839
Speaker 14: ev tax credit that people know and love in some

861
00:43:58,880 --> 00:44:02,279
Speaker 14: cases depending on who wins. Obviously, with the IRA, you're

862
00:44:02,280 --> 00:44:04,200
Speaker 14: going to need Congresses input on that, but there are

863
00:44:04,239 --> 00:44:06,919
Speaker 14: things that the Trump administration could do very early on

864
00:44:06,920 --> 00:44:09,440
Speaker 14: on the implementation side to make those credits a bit

865
00:44:09,480 --> 00:44:12,719
Speaker 14: more restrictive. So it's going to be big, but also

866
00:44:12,880 --> 00:44:14,920
Speaker 14: a split decision could have an impact too if you have,

867
00:44:15,280 --> 00:44:19,640
Speaker 14: say a Republican Congress with Kamala Harris's president or vice versa.

868
00:44:19,480 --> 00:44:22,040
Speaker 4: And how does that actually impact the ability for these

869
00:44:22,160 --> 00:44:25,440
Speaker 4: car makers to sell cars? When I look at targets

870
00:44:25,480 --> 00:44:28,279
Speaker 4: of Biden administration having a certain number of evs. I'm

871
00:44:28,280 --> 00:44:31,680
Speaker 4: from California, where they lay out these overly ambitious goals five, six,

872
00:44:31,760 --> 00:44:34,160
Speaker 4: seven years down the road and then seemingly chop them

873
00:44:34,160 --> 00:44:35,360
Speaker 4: down when they get closer.

874
00:44:35,560 --> 00:44:37,759
Speaker 14: Yeah, Bailey, I mean even beyond that, there's been a

875
00:44:37,840 --> 00:44:40,040
Speaker 14: kind of back and forth between California and the rest

876
00:44:40,040 --> 00:44:42,040
Speaker 14: of the country for a long time, known as you know,

877
00:44:42,080 --> 00:44:46,960
Speaker 14: the California Advanced Clean Cars to policy, which aims to

878
00:44:46,960 --> 00:44:48,879
Speaker 14: have one hundred percent of all new sales by twenty

879
00:44:48,920 --> 00:44:51,720
Speaker 14: thirty five is electric eighty percent fully electric, twenty percent

880
00:44:52,000 --> 00:44:54,600
Speaker 14: plug in hybrid. And so last time Trump was elected,

881
00:44:54,960 --> 00:44:57,239
Speaker 14: there is a lot of lawsuits, a lot of uncertainty

882
00:44:57,239 --> 00:44:59,440
Speaker 14: in the market. Makes it very difficult from an automaker

883
00:44:59,480 --> 00:45:03,040
Speaker 14: perspective actually planned. And so these automakers for a long

884
00:45:03,080 --> 00:45:05,359
Speaker 14: time have wanted both the carrots, which are these IRA

885
00:45:05,600 --> 00:45:08,560
Speaker 14: kind of subsidies and incentives on grants and loans, and

886
00:45:08,560 --> 00:45:10,279
Speaker 14: then they'd be willing to take the stick, which is

887
00:45:10,280 --> 00:45:11,719
Speaker 14: the fuel economy standards.

888
00:45:11,960 --> 00:45:13,719
Speaker 6: So we have to see how it shapes out.

889
00:45:13,760 --> 00:45:16,319
Speaker 14: But from the automakers that we speak to, it's a

890
00:45:16,360 --> 00:45:19,800
Speaker 14: pretty confusing policy environment. But given that the globe is

891
00:45:19,840 --> 00:45:22,759
Speaker 14: moving towards electric vehicles and cleaner cars in general, they

892
00:45:22,800 --> 00:45:24,960
Speaker 14: have to kind of prepare to move that way regardless.

893
00:45:24,960 --> 00:45:26,920
Speaker 14: And it's just how quickly in the US are they

894
00:45:26,960 --> 00:45:27,920
Speaker 14: going to move in that direction?

895
00:45:28,520 --> 00:45:31,680
Speaker 2: The Chinese are moving very aggressively. How do you expect

896
00:45:31,680 --> 00:45:35,040
Speaker 2: them to do outside of China? Will there be market

897
00:45:35,080 --> 00:45:37,440
Speaker 2: for Chinese evs in Europe?

898
00:45:37,640 --> 00:45:40,160
Speaker 6: In the US? Yeah, it's a really good question, Paul.

899
00:45:40,239 --> 00:45:42,080
Speaker 14: And you know, looking at the data which we do

900
00:45:42,120 --> 00:45:45,680
Speaker 14: at BNEF, you can see Chinese automakers like BYD making

901
00:45:45,880 --> 00:45:49,200
Speaker 14: upground in places like Brazil, in places like Latin America,

902
00:45:49,280 --> 00:45:51,279
Speaker 14: in places like Israel, you know where you might not

903
00:45:51,400 --> 00:45:55,640
Speaker 14: expect to see Chinese automakers. They've been moving into Europe

904
00:45:55,880 --> 00:45:57,759
Speaker 14: and there's been a pushback with all the tariffs and

905
00:45:57,800 --> 00:45:59,719
Speaker 14: back and forth there. I think that's also why the

906
00:45:59,800 --> 00:46:01,919
Speaker 14: US election does have a big impact, because if there's

907
00:46:01,920 --> 00:46:04,960
Speaker 14: no kind of counter bailing force coming out of the US.

908
00:46:05,080 --> 00:46:07,480
Speaker 14: You see what's going on with Volkswagen on the European

909
00:46:07,520 --> 00:46:10,200
Speaker 14: side today, it's going to maybe make the road easier

910
00:46:10,239 --> 00:46:13,440
Speaker 14: for those Chinese automakers on electric to kind of shift

911
00:46:13,440 --> 00:46:16,440
Speaker 14: into those export markets, because if Tesla isn't focused on

912
00:46:16,520 --> 00:46:19,560
Speaker 14: making more affordable evs, then there's really only going to

913
00:46:19,600 --> 00:46:21,880
Speaker 14: be one major player in town. It doesn't mean, you

914
00:46:21,920 --> 00:46:24,399
Speaker 14: know that Chinese automakers are going to be the only

915
00:46:24,480 --> 00:46:27,400
Speaker 14: ones who are making mass evs, but it's a pretty

916
00:46:27,440 --> 00:46:30,759
Speaker 14: big transformation at the global auto market level, just like

917
00:46:30,800 --> 00:46:32,879
Speaker 14: when the Japanese automakers came onto the scene.

918
00:46:32,880 --> 00:46:34,120
Speaker 6: So I think that's the way I like to think

919
00:46:34,160 --> 00:46:34,520
Speaker 6: about it.

920
00:46:34,520 --> 00:46:36,520
Speaker 14: It doesn't mean that you know evs are going to

921
00:46:36,560 --> 00:46:39,399
Speaker 14: be sold everywhere overnight, but without a kind of other

922
00:46:39,520 --> 00:46:41,279
Speaker 14: major automaker, that's where I.

923
00:46:41,280 --> 00:46:42,680
Speaker 6: Think a lot of these countries are going to turn.

924
00:46:43,120 --> 00:46:46,960
Speaker 4: And if we do see tariffs on some magnitude, yeah,

925
00:46:47,360 --> 00:46:50,560
Speaker 4: what does that actually mean for the market for Elon

926
00:46:50,680 --> 00:46:53,760
Speaker 4: Musk's Tesla who he's had a very prominent role campaign

927
00:46:53,840 --> 00:46:55,760
Speaker 4: for Donald Trump as well as other companies.

928
00:46:56,200 --> 00:46:58,520
Speaker 14: I think when it comes to US tariffs, you know

929
00:46:58,560 --> 00:47:00,960
Speaker 14: that could buy you. I think some time you look

930
00:47:01,000 --> 00:47:03,920
Speaker 14: at the one hundred percent tariff that the Buying Administration

931
00:47:04,000 --> 00:47:06,520
Speaker 14: put on Chinese EV makers. While there weren't that many

932
00:47:06,600 --> 00:47:09,879
Speaker 14: Chinese EV makers selling electric vehicles here currently, Jili Group,

933
00:47:09,920 --> 00:47:12,880
Speaker 14: which owns Volvo and Pollstar, was pretty much the major

934
00:47:13,200 --> 00:47:14,280
Speaker 14: automaker impacted.

935
00:47:14,360 --> 00:47:15,800
Speaker 6: So that's why you saw those prices.

936
00:47:15,880 --> 00:47:18,160
Speaker 14: Or the Volvo Ex thirty, which is a really popular

937
00:47:18,200 --> 00:47:22,120
Speaker 14: model globally not sold here yet. It's keeping BYD out

938
00:47:22,120 --> 00:47:24,600
Speaker 14: for a little bit longer. But if the automakers like

939
00:47:24,680 --> 00:47:27,759
Speaker 14: GM or Stillantis or Ford aren't helped or don't move

940
00:47:27,800 --> 00:47:30,520
Speaker 14: towards electric vehicles, you know, maybe it buys you two, three,

941
00:47:30,600 --> 00:47:33,560
Speaker 14: four years. But all the while BYD and other Chinese

942
00:47:33,600 --> 00:47:36,719
Speaker 14: automakers are making more investments in battery technology, and I

943
00:47:36,760 --> 00:47:38,759
Speaker 14: think regardless of who wins, you need to see more

944
00:47:38,800 --> 00:47:41,359
Speaker 14: of those investments here on batteries because those are going

945
00:47:41,400 --> 00:47:43,600
Speaker 14: to be important not only for electric vehicles but for

946
00:47:43,680 --> 00:47:45,440
Speaker 14: the grid as well, and you're letting China get a

947
00:47:45,480 --> 00:47:46,879
Speaker 14: major competitive advantage.

948
00:47:47,080 --> 00:47:50,319
Speaker 2: What are the US manufacturers doing? Have they pulled back

949
00:47:50,360 --> 00:47:51,440
Speaker 2: on their EV investments.

950
00:47:51,760 --> 00:47:54,200
Speaker 14: We've definitely seen at the global level those EV targets

951
00:47:54,239 --> 00:47:56,960
Speaker 14: moving back. I think Ford in particular, you saw them

952
00:47:57,000 --> 00:47:58,800
Speaker 14: move their new EV models.

953
00:47:58,520 --> 00:47:59,319
Speaker 6: Out a couple of years.

954
00:47:59,360 --> 00:48:01,560
Speaker 14: So it's let's so on the dollar amount and more

955
00:48:01,560 --> 00:48:04,919
Speaker 14: pushing it back. GM has seen better EV sales. In fact,

956
00:48:04,920 --> 00:48:06,719
Speaker 14: the third quarter this year was the best in the

957
00:48:06,800 --> 00:48:09,080
Speaker 14: US that they had seen to date, with the Equinox

958
00:48:09,080 --> 00:48:12,440
Speaker 14: and Blazer and Lyric really taking off. To make one

959
00:48:12,480 --> 00:48:15,080
Speaker 14: bright point, Bailey, your home state of California actually saw

960
00:48:15,120 --> 00:48:17,360
Speaker 14: in that third quarter the best EV share of sales

961
00:48:17,360 --> 00:48:20,440
Speaker 14: they've ever had at twenty seven percent, So that's twenty

962
00:48:20,480 --> 00:48:23,400
Speaker 14: three percent, about almost twenty four percent fully electric, the

963
00:48:23,440 --> 00:48:24,400
Speaker 14: rest plug in hybrid.

964
00:48:25,360 --> 00:48:27,760
Speaker 2: So it's pretty good calif Like, what's the US average?

965
00:48:27,960 --> 00:48:31,160
Speaker 14: US average has been at about ten percent now nine

966
00:48:31,160 --> 00:48:34,880
Speaker 14: and a half ten percent. Yeah, far California twice twice

967
00:48:34,880 --> 00:48:37,759
Speaker 14: the average. But what's significant about that is California had

968
00:48:37,800 --> 00:48:41,160
Speaker 14: been stuck at about twenty five percent. Tesla actually for

969
00:48:41,200 --> 00:48:43,760
Speaker 14: four quarters in a row in California has seen decline

970
00:48:43,920 --> 00:48:47,719
Speaker 14: in deliveries because of I think some of the kind

971
00:48:47,719 --> 00:48:51,200
Speaker 14: of Tesla or musk fatigue, and so to see California

972
00:48:51,280 --> 00:48:53,719
Speaker 14: begin to grow again from the other automakers, even as

973
00:48:53,760 --> 00:48:55,560
Speaker 14: Tesla's pullback is pretty significant.

974
00:48:55,760 --> 00:48:58,600
Speaker 2: All right, Corey, good stuff. As always Corey Canter. He's

975
00:48:58,640 --> 00:49:02,080
Speaker 2: a lead US electric Vehicle analyst at b n e F.

976
00:49:02,400 --> 00:49:06,920
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977
00:49:07,080 --> 00:49:10,279
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978
00:49:10,320 --> 00:49:13,720
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979
00:49:13,800 --> 00:49:17,200
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980
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981
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