1 00:00:00,240 --> 00:00:02,440 Speaker 1: This is Bloomberg Wall Street Week. 2 00:00:02,480 --> 00:00:04,400 Speaker 2: I mean may not have an overall recession, We're having 3 00:00:04,400 --> 00:00:06,720 Speaker 2: a rolling recession. To kind of roll looks pretty strongly. 4 00:00:06,720 --> 00:00:08,840 Speaker 2: It is when it comes to jobs. The financial stories 5 00:00:08,920 --> 00:00:11,960 Speaker 2: that shape our world. Three major regional bank failures send 6 00:00:12,000 --> 00:00:14,680 Speaker 2: shockwaves through the banking system. We're all trying to figure 7 00:00:14,680 --> 00:00:17,000 Speaker 2: out what to make of generative AI. 8 00:00:16,920 --> 00:00:19,320 Speaker 1: Through the eyes of the most influential voices. 9 00:00:19,440 --> 00:00:22,400 Speaker 2: Welcome down, Doctor Paul Krugman, Bryan moynihan, a Bank of America, 10 00:00:22,560 --> 00:00:25,279 Speaker 2: deebro Lair of the Paulson Institute, well Then Hubbard of 11 00:00:25,280 --> 00:00:26,280 Speaker 2: the Columbia Business School. 12 00:00:26,280 --> 00:00:30,160 Speaker 1: Bloomberg Wall Street Week with David Weston from Bloomberg Radio. 13 00:00:30,320 --> 00:00:34,080 Speaker 2: The Fed decides not to decide, Reddit goes public and 14 00:00:34,159 --> 00:00:37,640 Speaker 2: former President Trump faces foreclosure. This is Bloomberg Wall Street Week. 15 00:00:37,760 --> 00:00:41,720 Speaker 2: I'm David Weston. This week, Brian dies on what's really 16 00:00:41,760 --> 00:00:43,200 Speaker 2: going on with electric vehicles? 17 00:00:43,320 --> 00:00:46,000 Speaker 3: I think those headlines would make you more concerned than 18 00:00:46,000 --> 00:00:48,960 Speaker 3: you should be. The demise of electric vehicles has greatly exaggerated. 19 00:00:49,080 --> 00:00:51,839 Speaker 2: And Kristin Roth, the Clark of Barclays, on a comeback 20 00:00:51,960 --> 00:00:53,200 Speaker 2: for tech IPOs. 21 00:00:53,520 --> 00:00:56,120 Speaker 4: Investor appetite is as strong as it's been in a 22 00:00:56,240 --> 00:01:09,479 Speaker 4: very long time for IPOs. 23 00:01:10,720 --> 00:01:13,200 Speaker 2: But we begin with our very special contribut Larry Summers 24 00:01:13,240 --> 00:01:15,600 Speaker 2: of Harvard, as we address what the FED decided is 25 00:01:15,600 --> 00:01:17,480 Speaker 2: a week, what we've heard from JPOM, and also maybe 26 00:01:17,520 --> 00:01:20,240 Speaker 2: a little microeconomics before we're done. So Lari, thanks for 27 00:01:20,240 --> 00:01:22,119 Speaker 2: being back with us. Let's start with the FED. Though 28 00:01:22,319 --> 00:01:26,480 Speaker 2: what we heard, I heard more growth, less inflation, low unemployment. 29 00:01:26,520 --> 00:01:28,319 Speaker 2: That sounds pretty good to me. Is it too good 30 00:01:28,400 --> 00:01:29,920 Speaker 2: to be true? 31 00:01:30,200 --> 00:01:30,840 Speaker 5: I don't know. 32 00:01:31,040 --> 00:01:35,080 Speaker 6: Certainly there's been some encouraging data flow during twenty twenty three, 33 00:01:35,200 --> 00:01:38,920 Speaker 6: though the last two months haven't been quite so encouraging. 34 00:01:39,480 --> 00:01:42,319 Speaker 6: It's great and right to hope for the best, but 35 00:01:42,880 --> 00:01:47,880 Speaker 6: hoping isn't planning, And certainly, from that scenario laid out 36 00:01:47,920 --> 00:01:50,440 Speaker 6: in the dot plots, I think there's more room for 37 00:01:50,520 --> 00:01:54,760 Speaker 6: things to surprise on the bad side than to surprise 38 00:01:55,160 --> 00:02:00,840 Speaker 6: on the better side. We may have the path that's 39 00:02:00,920 --> 00:02:05,440 Speaker 6: described there materialized. It's certainly got to be recognized as 40 00:02:05,480 --> 00:02:10,760 Speaker 6: a very real possibility. My sense is still that the 41 00:02:10,760 --> 00:02:15,560 Speaker 6: Fed is itchy fingers to start cutting rates, and I 42 00:02:15,600 --> 00:02:21,080 Speaker 6: don't fully get it. We've got unemployment, if anything, below 43 00:02:21,160 --> 00:02:26,720 Speaker 6: what they think is full capacity, we've got inflation clearly 44 00:02:26,800 --> 00:02:31,079 Speaker 6: even in their forecast for the next two years above target. 45 00:02:31,520 --> 00:02:36,839 Speaker 6: We've got GDP growth rising, if anything, faster than potential. 46 00:02:37,320 --> 00:02:41,840 Speaker 6: We have financial conditions the holistic measure of monetary policy 47 00:02:42,360 --> 00:02:45,560 Speaker 6: at a very loose level. I don't know why we're 48 00:02:45,760 --> 00:02:49,120 Speaker 6: in such a hurry to be talking about moving to 49 00:02:49,400 --> 00:02:52,320 Speaker 6: moving towards the accelerator. 50 00:02:53,280 --> 00:02:55,840 Speaker 2: So we heard from a chair pal that in fact 51 00:02:55,880 --> 00:02:58,920 Speaker 2: he thinks these conditions are restrictive. Right now they are 52 00:02:58,960 --> 00:03:01,360 Speaker 2: decidedly justking even if we're not seeing a lot of restriction. 53 00:03:01,880 --> 00:03:04,120 Speaker 2: But that depends in part on where the neutral rate is, 54 00:03:04,160 --> 00:03:05,840 Speaker 2: something we've talked about before. 55 00:03:06,320 --> 00:03:07,720 Speaker 5: I still don't get a sense. 56 00:03:07,480 --> 00:03:09,200 Speaker 2: From the FED that they figured out where they think 57 00:03:09,240 --> 00:03:11,280 Speaker 2: the neutralit is, and do they need to know that 58 00:03:11,360 --> 00:03:13,160 Speaker 2: before they can decide where they're going. 59 00:03:13,840 --> 00:03:16,760 Speaker 6: They need to take a view, because if you don't 60 00:03:16,800 --> 00:03:21,280 Speaker 6: know what's neutral, you don't know how expansionary or restrictive 61 00:03:22,200 --> 00:03:26,280 Speaker 6: your being. And I find their view that the ultimate 62 00:03:26,440 --> 00:03:31,440 Speaker 6: neutral rate is two point six to be bizarre. In 63 00:03:32,400 --> 00:03:37,720 Speaker 6: current circumstances. Here's what we have relative to a few 64 00:03:37,840 --> 00:03:40,720 Speaker 6: years ago when they said it was two point five. 65 00:03:41,440 --> 00:03:45,280 Speaker 6: We've got fiscal policy in a much much more expansionary 66 00:03:45,400 --> 00:03:50,240 Speaker 6: place with much higher deficits, much larger role of debt 67 00:03:50,600 --> 00:03:54,360 Speaker 6: that puts pressure on credit markets. We've got a huge 68 00:03:54,560 --> 00:03:59,120 Speaker 6: set of new private sector investments going on with respect 69 00:03:59,200 --> 00:04:04,600 Speaker 6: to green investment in the IRA going on with respect 70 00:04:04,680 --> 00:04:12,960 Speaker 6: to resilience and reducing dependence on single sources. We've got 71 00:04:13,040 --> 00:04:18,279 Speaker 6: a potential huge source of demand for chips and for 72 00:04:18,600 --> 00:04:24,720 Speaker 6: electricity coming out of the AI Revolution. And we've got 73 00:04:24,760 --> 00:04:29,000 Speaker 6: a huge wealth effect as markets in for both housing 74 00:04:29,040 --> 00:04:32,840 Speaker 6: and stocks have run way up for the last few years. 75 00:04:33,520 --> 00:04:38,440 Speaker 6: So with all of those impulses to demand, I cannot 76 00:04:38,560 --> 00:04:44,280 Speaker 6: understand why someone would form the view that the neutral 77 00:04:44,360 --> 00:04:48,960 Speaker 6: rate was essentially the same as they thought it was 78 00:04:49,880 --> 00:04:53,719 Speaker 6: four years ago. And I think the neutral rate is 79 00:04:53,839 --> 00:04:56,560 Speaker 6: far more likely to have a fore handle on it 80 00:04:56,680 --> 00:04:59,560 Speaker 6: right now than it is to have a two handle 81 00:05:00,600 --> 00:05:03,880 Speaker 6: on it. And from that perspective, I'm not at all 82 00:05:04,040 --> 00:05:09,640 Speaker 6: sure how restrictive monetary policy really is, and the proofs 83 00:05:09,680 --> 00:05:12,960 Speaker 6: really in the putting monetary policies by now had a 84 00:05:13,120 --> 00:05:17,080 Speaker 6: very long time for the lags to work through. The 85 00:05:17,200 --> 00:05:23,640 Speaker 6: transmission variables, stock prices, interest rates, long term interest rates, 86 00:05:24,080 --> 00:05:32,200 Speaker 6: credit spreads are flashing green and loose, and the economy 87 00:05:32,360 --> 00:05:34,480 Speaker 6: keeps surprising on the high side. 88 00:05:35,000 --> 00:05:38,239 Speaker 5: So either if you look at the fundamental. 89 00:05:37,640 --> 00:05:42,360 Speaker 6: Determinants of neutral interest rates or you look at how 90 00:05:42,520 --> 00:05:46,000 Speaker 6: fast the economy is growing, seems to me you've got 91 00:05:46,000 --> 00:05:51,240 Speaker 6: to read a high neutral interest rate. And I just 92 00:05:51,320 --> 00:05:55,160 Speaker 6: can't understand why the FED is talking about two point 93 00:05:55,200 --> 00:05:56,719 Speaker 6: six as a best guess. 94 00:05:57,279 --> 00:05:58,560 Speaker 5: I would be the first to. 95 00:05:58,520 --> 00:06:02,560 Speaker 6: Recognize that this is a number that fluctuates, that we 96 00:06:02,640 --> 00:06:08,520 Speaker 6: can't gauge it precisely that economists don't have great models. 97 00:06:08,560 --> 00:06:10,680 Speaker 6: So I'm not saying that I'm. 98 00:06:10,560 --> 00:06:12,520 Speaker 5: Sure that they're wrong. 99 00:06:12,640 --> 00:06:16,840 Speaker 6: I'm not, but I think the challenge in policy making 100 00:06:17,000 --> 00:06:21,120 Speaker 6: is to try to make best estimates where you're equally 101 00:06:21,279 --> 00:06:23,480 Speaker 6: likely to be wrong in both directions. 102 00:06:23,920 --> 00:06:27,160 Speaker 2: Larry accurs me, there are policies going beyond monetary policy 103 00:06:27,160 --> 00:06:30,160 Speaker 2: that could well affect future inflation. Now I'll mention a 104 00:06:30,200 --> 00:06:33,039 Speaker 2: couple of them, trade and tariffs. What are the other 105 00:06:33,120 --> 00:06:34,839 Speaker 2: factors that might be driving inflation. 106 00:06:35,600 --> 00:06:39,320 Speaker 6: Part of the story of the great moderation of low 107 00:06:39,360 --> 00:06:42,839 Speaker 6: inflation for forty years hash to have been the ways 108 00:06:42,880 --> 00:06:48,640 Speaker 6: in which globalization held down prices, flows of capital that 109 00:06:48,760 --> 00:06:56,480 Speaker 6: promoted productivity, enhancing investment flows of workers, that enhanced labor supply, 110 00:06:57,200 --> 00:07:02,640 Speaker 6: lower priced goods that provided competition. The best forms of 111 00:07:02,720 --> 00:07:07,080 Speaker 6: competition we get in the US economy are often from 112 00:07:07,279 --> 00:07:13,600 Speaker 6: imported goods, and so if globalization held prices down, it 113 00:07:13,680 --> 00:07:18,400 Speaker 6: follows the deglobalization will tend to push prices up, which 114 00:07:18,440 --> 00:07:23,560 Speaker 6: will mean for some interval higher rates of inflation. And 115 00:07:23,760 --> 00:07:31,120 Speaker 6: I don't think the prospects of tariffing, creases of reductions 116 00:07:31,160 --> 00:07:39,080 Speaker 6: and immigration, of more restriction on foreign foreign investment and 117 00:07:39,120 --> 00:07:41,920 Speaker 6: what that means for the dollar. I don't think that's 118 00:07:42,120 --> 00:07:48,800 Speaker 6: reflected in consensus inflation views, and so I think that's 119 00:07:48,840 --> 00:07:53,680 Speaker 6: another upside risk to inflation, and frankly, it's one that 120 00:07:53,720 --> 00:07:59,960 Speaker 6: would be substantially exacerbated if the Trump program economic program, 121 00:08:00,120 --> 00:08:04,120 Speaker 6: at least as it's been described in recent months, were 122 00:08:04,200 --> 00:08:06,120 Speaker 6: to be implemented. 123 00:08:06,520 --> 00:08:08,640 Speaker 2: Larry, thank you so much for being with us. As always, 124 00:08:08,760 --> 00:08:12,720 Speaker 2: that's our special contributor to Larry Summers of Harvard. Higher 125 00:08:12,760 --> 00:08:16,360 Speaker 2: interest rates have taken momentum away from tech IPOs, but 126 00:08:16,440 --> 00:08:18,440 Speaker 2: we've read it up this week and asked Sarah on 127 00:08:18,560 --> 00:08:21,120 Speaker 2: Deck twenty twenty four may be the year of the 128 00:08:21,160 --> 00:08:24,440 Speaker 2: comeback for tech companies going public to take us through it. 129 00:08:24,480 --> 00:08:27,760 Speaker 2: We welcome back Kristin Roth to Clark Barclay's global head 130 00:08:27,760 --> 00:08:30,200 Speaker 2: of Technology Investment Banking. So welcome. It's great to have 131 00:08:30,240 --> 00:08:32,599 Speaker 2: you here in person, say San Francisco. Yes, great to 132 00:08:32,640 --> 00:08:34,080 Speaker 2: be here. So give us a sense we do have 133 00:08:34,080 --> 00:08:36,320 Speaker 2: read It and Asteria right right in front of us 134 00:08:36,360 --> 00:08:39,400 Speaker 2: as we speak this week. But are we seeing perhaps 135 00:08:39,440 --> 00:08:42,400 Speaker 2: a break in the log jam in tech? IPOs? 136 00:08:42,880 --> 00:08:45,520 Speaker 4: Investor appetite is as strong as it's been in a 137 00:08:45,640 --> 00:08:48,560 Speaker 4: very long time for IPOs. Part of that is because 138 00:08:48,840 --> 00:08:51,959 Speaker 4: there really is a dearth of growth technology assets in 139 00:08:52,000 --> 00:08:55,160 Speaker 4: the public market that are at scale today. And if 140 00:08:55,200 --> 00:08:58,280 Speaker 4: you look at all of the public tech companies over 141 00:08:58,400 --> 00:09:01,520 Speaker 4: two billion dollar market cap, less than thirty have growth 142 00:09:01,559 --> 00:09:05,640 Speaker 4: rates over thirty percent. So investors are looking for opportunities 143 00:09:05,679 --> 00:09:07,720 Speaker 4: for growth in the IPO market. 144 00:09:08,000 --> 00:09:08,880 Speaker 7: So is there a. 145 00:09:08,880 --> 00:09:12,040 Speaker 2: Profile for the companies they're most likely be successful. Reddit's 146 00:09:12,120 --> 00:09:14,520 Speaker 2: very different from Astera. Those are two very different companies 147 00:09:14,600 --> 00:09:15,200 Speaker 2: right well. 148 00:09:15,240 --> 00:09:16,880 Speaker 5: Scale matters to investors. 149 00:09:16,920 --> 00:09:19,559 Speaker 4: We saw, you know, some of the carnage a little 150 00:09:19,559 --> 00:09:22,480 Speaker 4: bit from the twenty twenty and twenty twenty one IPO 151 00:09:22,600 --> 00:09:27,840 Speaker 4: classes where IPOs were priced at pretty significant premiums to 152 00:09:28,000 --> 00:09:30,840 Speaker 4: where the you know multiples have been on a historical 153 00:09:30,880 --> 00:09:34,559 Speaker 4: basis and then traded down significantly. The ones that had 154 00:09:35,120 --> 00:09:39,800 Speaker 4: the you know, smaller market caps, smaller float were disproportionately impacted. 155 00:09:39,840 --> 00:09:43,280 Speaker 4: And for that reason, you know, the scale really matters 156 00:09:43,760 --> 00:09:49,240 Speaker 4: in terms of revenue scale. The second piece is you know, 157 00:09:49,360 --> 00:09:52,319 Speaker 4: growth rate and the interplay between growth rate and profitability. 158 00:09:52,760 --> 00:09:55,960 Speaker 4: So it's important to be to have kind of a 159 00:09:56,040 --> 00:09:57,080 Speaker 4: balance that works. 160 00:09:57,320 --> 00:09:57,640 Speaker 5: Growth. 161 00:09:57,679 --> 00:10:00,839 Speaker 4: You get paid more for growth, but that's only if 162 00:10:01,000 --> 00:10:04,439 Speaker 4: the unit economics work and there is a either a 163 00:10:04,520 --> 00:10:07,960 Speaker 4: break even or a very strong near term path the profitability. 164 00:10:08,040 --> 00:10:11,760 Speaker 4: You'll get paid more for growth. If the business is 165 00:10:11,760 --> 00:10:14,680 Speaker 4: not growing you know, thirty percent or north of even 166 00:10:14,720 --> 00:10:21,040 Speaker 4: twenty percent, then having very significant margins and visibility and 167 00:10:21,120 --> 00:10:22,840 Speaker 4: durability of those margins. 168 00:10:22,679 --> 00:10:25,720 Speaker 2: Has the definition of significant growth change. I mean, given 169 00:10:26,200 --> 00:10:28,200 Speaker 2: when you see some of like an Nvidia, some of 170 00:10:28,200 --> 00:10:31,400 Speaker 2: these growth stocks in tech have just been really really strong. 171 00:10:31,679 --> 00:10:34,560 Speaker 4: Yeah, so I think for an IPO, I would say 172 00:10:34,559 --> 00:10:37,880 Speaker 4: a growth stock is something north of twenty percent thirty 173 00:10:37,920 --> 00:10:42,000 Speaker 4: percent plus is really very you know, differentiated growth rate. 174 00:10:42,160 --> 00:10:43,079 Speaker 5: But that's how I would. 175 00:10:42,920 --> 00:10:45,080 Speaker 2: Think about it today. What's your sense of the pipeline 176 00:10:45,080 --> 00:10:48,480 Speaker 2: out there for perspective IPOs in the tech era, I will. 177 00:10:48,280 --> 00:10:51,600 Speaker 4: Tell you we're tracking over two hundred companies that we 178 00:10:51,800 --> 00:10:56,400 Speaker 4: really think have a credible exit in the public market 179 00:10:56,440 --> 00:10:59,200 Speaker 4: or entry into the public market. I guess over the 180 00:10:59,240 --> 00:11:04,000 Speaker 4: next two years they could also be sold to strategics 181 00:11:04,160 --> 00:11:08,480 Speaker 4: or to sponsors. But that's kind of the cohort of 182 00:11:08,559 --> 00:11:12,040 Speaker 4: the private companies that were highly focused on for potential 183 00:11:12,080 --> 00:11:13,400 Speaker 4: IPOs over the next two years. 184 00:11:13,400 --> 00:11:16,400 Speaker 2: Structure, we might be looking at two very different revenue models. 185 00:11:16,559 --> 00:11:19,320 Speaker 2: If you have a consumer facing products such as Reddit, 186 00:11:19,360 --> 00:11:22,560 Speaker 2: for example, what the consumer can do, what they can afford, 187 00:11:22,559 --> 00:11:24,199 Speaker 2: how much they spend could really affect it. On the 188 00:11:24,240 --> 00:11:26,560 Speaker 2: other hand, if you're over in the artificial intelligence if 189 00:11:26,559 --> 00:11:29,400 Speaker 2: I can mentioned that term area that's more of a 190 00:11:29,440 --> 00:11:32,560 Speaker 2: business of business and need for semiconductors and things, are 191 00:11:32,559 --> 00:11:34,120 Speaker 2: there two different revenue models here? 192 00:11:34,400 --> 00:11:37,959 Speaker 4: Yeah, I'd say that the I mean investors right now 193 00:11:38,040 --> 00:11:42,480 Speaker 4: are anything that's AI and anything that is security related 194 00:11:42,559 --> 00:11:46,800 Speaker 4: are probably the two areas that have the strongest bid. 195 00:11:46,920 --> 00:11:49,680 Speaker 4: The consumer facing stuff is a little bit more challenged 196 00:11:50,000 --> 00:11:51,880 Speaker 4: in terms of a multiple. You're just not getting the 197 00:11:51,920 --> 00:11:54,079 Speaker 4: same multiple as you get for an enterprise sale that 198 00:11:54,679 --> 00:11:59,080 Speaker 4: has those two kind of end markets AI. We're just 199 00:11:59,120 --> 00:12:02,360 Speaker 4: at the beginning of a decade long you know, shift 200 00:12:02,480 --> 00:12:06,439 Speaker 4: and change to what we can do from a productivity standpoint. 201 00:12:06,559 --> 00:12:08,880 Speaker 4: And so we've seen a lot of the stocks that 202 00:12:08,920 --> 00:12:12,120 Speaker 4: are being you know, that are really being driven by 203 00:12:12,200 --> 00:12:16,439 Speaker 4: the advancements in AI trade up significantly and that will continue. 204 00:12:16,480 --> 00:12:18,319 Speaker 4: I think there are going to be the fits and 205 00:12:18,360 --> 00:12:20,560 Speaker 4: starts and play times where investors think, Okay, this has 206 00:12:20,559 --> 00:12:22,720 Speaker 4: been a little bit overbought take, you know, a little 207 00:12:22,720 --> 00:12:24,839 Speaker 4: bit of profit taking. But I think by and large, 208 00:12:24,880 --> 00:12:29,560 Speaker 4: this is a decade long plus shift. 209 00:12:29,760 --> 00:12:31,719 Speaker 2: Kristin, really great to have you on and particularly here 210 00:12:31,720 --> 00:12:33,240 Speaker 2: in New York. Thank you for coming to New York. 211 00:12:33,440 --> 00:12:38,080 Speaker 2: That is Kristin Roth to Clark of Barclay's. Coming up, 212 00:12:38,160 --> 00:12:39,920 Speaker 2: we go through the week in the Markets with Chris 213 00:12:39,960 --> 00:12:43,440 Speaker 2: Harvey of Wells Fargo. That's next on Wall Street Week 214 00:12:43,600 --> 00:12:44,400 Speaker 2: on Bloomberg. 215 00:12:45,679 --> 00:12:49,920 Speaker 1: This is Bloomberg Wells Street Week with David Weston from 216 00:12:50,040 --> 00:12:50,960 Speaker 1: Bloomberg Radio. 217 00:12:57,040 --> 00:12:59,559 Speaker 2: This is Wall Street Week. I'm David Weston. Market's found 218 00:12:59,559 --> 00:13:01,600 Speaker 2: a lot to like and what the Fed did and 219 00:13:01,720 --> 00:13:04,000 Speaker 2: said this week as the SMP five hundred was up 220 00:13:04,040 --> 00:13:06,400 Speaker 2: another two point three percent to end at fifty two 221 00:13:06,520 --> 00:13:09,240 Speaker 2: thirty four, saying well above the medium projection of the 222 00:13:09,280 --> 00:13:11,720 Speaker 2: Bloomberg ls for a year and number of only fifty 223 00:13:11,760 --> 00:13:15,640 Speaker 2: one hundred. The Nasdaq added two point sixty five percent, 224 00:13:15,720 --> 00:13:18,760 Speaker 2: while the yield on the tenure was down sixteen basis 225 00:13:18,760 --> 00:13:21,520 Speaker 2: points to end the week at four point four point 226 00:13:21,559 --> 00:13:24,120 Speaker 2: two percent. To take us through where we are, welcome 227 00:13:24,160 --> 00:13:26,840 Speaker 2: back now one of the Bloomberg Alves himself, Chris Harvey, 228 00:13:26,840 --> 00:13:29,840 Speaker 2: Wells Fargo's securities equity analysts. Great to have you back, Chris, 229 00:13:29,880 --> 00:13:32,320 Speaker 2: good to be back. So give us your sense of 230 00:13:32,320 --> 00:13:35,120 Speaker 2: how the markets interpreted what they heard from J Powell 231 00:13:35,200 --> 00:13:35,600 Speaker 2: this week. 232 00:13:35,640 --> 00:13:40,120 Speaker 8: Oh, it was game on. So what they heard was, Hey, 233 00:13:40,160 --> 00:13:44,000 Speaker 8: the macro backdrop is hotter than we expected on a 234 00:13:44,040 --> 00:13:46,480 Speaker 8: growth and an inflation side, but we're going to keep 235 00:13:46,520 --> 00:13:50,319 Speaker 8: the same accommodation we had before. So the only thing 236 00:13:50,360 --> 00:13:52,920 Speaker 8: that's going to change are equity prices, and they're going 237 00:13:52,920 --> 00:13:55,240 Speaker 8: to move higher. What that was is to a lot 238 00:13:55,280 --> 00:13:57,520 Speaker 8: of investors, I need to put on I'm not going 239 00:13:57,600 --> 00:13:59,000 Speaker 8: to be penalized for risks, so I'm going to put 240 00:13:59,040 --> 00:14:01,760 Speaker 8: more risk on. I probably won't be penalized for leverage. 241 00:14:01,760 --> 00:14:04,520 Speaker 8: I'm going to put more leverage on and things got 242 00:14:05,640 --> 00:14:07,520 Speaker 8: We had a pretty healthy move, let's just say that. 243 00:14:07,960 --> 00:14:10,240 Speaker 2: So one of the things that I find surprising is 244 00:14:10,280 --> 00:14:12,120 Speaker 2: at the beginning of the year we expected something like 245 00:14:12,160 --> 00:14:15,200 Speaker 2: six countries. We've gone from six to three. I feel 246 00:14:15,200 --> 00:14:17,360 Speaker 2: there may be less than that, and yet the equity 247 00:14:17,360 --> 00:14:19,840 Speaker 2: markets didn't really discount to that. And why is that? 248 00:14:20,160 --> 00:14:20,240 Speaker 7: So? 249 00:14:21,120 --> 00:14:24,320 Speaker 8: I agree with that, and that's something we've been talking about, 250 00:14:24,360 --> 00:14:27,720 Speaker 8: but there's more than one equity market. So higher rates 251 00:14:27,720 --> 00:14:30,640 Speaker 8: did affect smaller caps, it affected value, and it held 252 00:14:30,640 --> 00:14:32,560 Speaker 8: those back. But when you look at the S and 253 00:14:32,600 --> 00:14:34,920 Speaker 8: P five hundred, the S and P five hundred is 254 00:14:34,920 --> 00:14:38,080 Speaker 8: really a growth index, and growth has just been lackluster. 255 00:14:38,520 --> 00:14:40,640 Speaker 8: And the fact that you're actually pulling it back to 256 00:14:40,760 --> 00:14:44,760 Speaker 8: an odd degree actually helps because you're not accelerating the economy. 257 00:14:44,760 --> 00:14:46,240 Speaker 8: You're keeping the economy right where it. 258 00:14:46,240 --> 00:14:48,200 Speaker 5: Is, which is perfect for gross stocks. 259 00:14:48,480 --> 00:14:50,280 Speaker 8: And the last thing I would say is that you 260 00:14:50,440 --> 00:14:53,640 Speaker 8: have this amazing secular growth story in AI that's not 261 00:14:53,680 --> 00:14:54,600 Speaker 8: going anywhere fast. 262 00:14:54,640 --> 00:14:56,440 Speaker 2: Well, that's what exactly what I was going to ask about, 263 00:14:56,480 --> 00:14:58,840 Speaker 2: because it's great we have AI, at least for the moment. 264 00:14:58,880 --> 00:15:01,560 Speaker 2: We hope it's all going to improve out as brilliantly 265 00:15:01,600 --> 00:15:03,680 Speaker 2: as people think it is. But is there a risk 266 00:15:03,760 --> 00:15:05,600 Speaker 2: there in the narrowness of the market because it's so 267 00:15:05,680 --> 00:15:08,440 Speaker 2: tied into high tech and AI. 268 00:15:09,040 --> 00:15:10,360 Speaker 5: There is a risk to it. 269 00:15:10,480 --> 00:15:10,680 Speaker 2: Right. 270 00:15:10,760 --> 00:15:12,800 Speaker 8: We don't like to see the market this narrow, but 271 00:15:12,840 --> 00:15:15,720 Speaker 8: it does make sense. Right when we see a market 272 00:15:15,760 --> 00:15:18,440 Speaker 8: that's a bit broader, typically see different things. We see 273 00:15:18,440 --> 00:15:21,920 Speaker 8: an economy that's moving from contraction to expansion. We're pretty 274 00:15:22,000 --> 00:15:24,680 Speaker 8: much in this what I would call economic malaise where 275 00:15:24,720 --> 00:15:27,160 Speaker 8: things aren't great, but they're not terrible, and you should 276 00:15:27,200 --> 00:15:30,320 Speaker 8: expect a pretty narrow market. And again, the real story here, 277 00:15:30,320 --> 00:15:32,440 Speaker 8: and I don't want to be too repetitive with it, 278 00:15:32,480 --> 00:15:35,000 Speaker 8: is this this secular growth story that's in play, and 279 00:15:35,040 --> 00:15:37,760 Speaker 8: the fact that the FED is adding a significant amount 280 00:15:37,760 --> 00:15:40,520 Speaker 8: of accommodation to a period or a situation that really 281 00:15:40,520 --> 00:15:41,320 Speaker 8: doesn't need it. 282 00:15:41,360 --> 00:15:45,360 Speaker 2: So you like momentum, we do explain that to us. 283 00:15:45,400 --> 00:15:47,560 Speaker 2: What do you like in this picture that really tells 284 00:15:47,600 --> 00:15:48,840 Speaker 2: you momentum is a way to go. 285 00:15:49,120 --> 00:15:52,840 Speaker 8: So it's not what do we really like about it? 286 00:15:52,920 --> 00:15:55,320 Speaker 8: Because the market's so narrow, because there's not a ton 287 00:15:55,320 --> 00:15:58,640 Speaker 8: of opportunities, everyone's chasing the same names, and so what 288 00:15:58,800 --> 00:16:03,080 Speaker 8: happens is you get stocks that do well continue to 289 00:16:03,120 --> 00:16:05,640 Speaker 8: do well, and people say, well, Chris, that's kind of 290 00:16:05,640 --> 00:16:08,320 Speaker 8: a silly way to invest, and it's kind of naive, 291 00:16:08,360 --> 00:16:10,280 Speaker 8: and I understand that. But if you look at the 292 00:16:10,320 --> 00:16:13,720 Speaker 8: fundamentals for the stocks that are doing very well, the fundamentals. 293 00:16:13,240 --> 00:16:14,520 Speaker 2: Are actually quite good. 294 00:16:14,640 --> 00:16:16,760 Speaker 8: And what we keep saying is people are very scared 295 00:16:16,760 --> 00:16:18,160 Speaker 8: about momentum because momentum. 296 00:16:18,200 --> 00:16:19,080 Speaker 2: If you go back to. 297 00:16:20,880 --> 00:16:24,840 Speaker 8: Financial crisis, say March of nine, momentum or momentum factors 298 00:16:24,840 --> 00:16:27,000 Speaker 8: turned on their head and people lost a lot of 299 00:16:27,000 --> 00:16:30,280 Speaker 8: money playing momentum. Same thing with the pandemic. But what 300 00:16:30,280 --> 00:16:32,440 Speaker 8: we're saying right here, right now, a lot of the 301 00:16:32,520 --> 00:16:35,640 Speaker 8: macro factors that would cause a point of inflection just 302 00:16:35,720 --> 00:16:38,480 Speaker 8: aren't there be a credit spreads, be the economy going 303 00:16:38,520 --> 00:16:42,080 Speaker 8: from contraction to expansion, or the fact that the contrarian 304 00:16:42,160 --> 00:16:44,440 Speaker 8: basket or a lot of broken stocks just don't have 305 00:16:44,600 --> 00:16:46,960 Speaker 8: very good valuations and good fundamentals. 306 00:16:47,120 --> 00:16:49,880 Speaker 2: So momentum is good, tell me about valuation, at what 307 00:16:49,920 --> 00:16:51,920 Speaker 2: point are they fully valued? And tie that back in 308 00:16:51,960 --> 00:16:53,800 Speaker 2: if you would to earnings, what we're expecting out of 309 00:16:53,800 --> 00:16:56,040 Speaker 2: earnings is that could take care of the valuation problem. 310 00:16:56,120 --> 00:16:58,560 Speaker 8: So, David, what I would say is that we don't 311 00:16:58,720 --> 00:17:01,200 Speaker 8: have I talk a lot of about valuation, but our 312 00:17:01,200 --> 00:17:04,280 Speaker 8: clients aren't talking about valuation all that much. And I 313 00:17:04,359 --> 00:17:06,760 Speaker 8: understand why we're in a relative We're in a chart 314 00:17:06,760 --> 00:17:10,560 Speaker 8: looks good relative growth type market, and so if growth 315 00:17:10,600 --> 00:17:12,800 Speaker 8: is going higher, you're going to be rewarded by that. 316 00:17:13,200 --> 00:17:16,480 Speaker 8: At some point valuation will matter. But because growth is 317 00:17:16,520 --> 00:17:19,840 Speaker 8: moving so quickly for a select number of stocks, there's 318 00:17:19,880 --> 00:17:22,440 Speaker 8: really just one game in town and that will continue. 319 00:17:22,080 --> 00:17:22,560 Speaker 2: For a while. 320 00:17:23,280 --> 00:17:25,240 Speaker 8: What I think, and what you have to worry about 321 00:17:25,320 --> 00:17:27,760 Speaker 8: with the rotation or brought out in the market is 322 00:17:27,840 --> 00:17:31,560 Speaker 8: will the economy accelerate faster than we expect and that 323 00:17:31,600 --> 00:17:33,480 Speaker 8: could cause a rotation and we just don't see that 324 00:17:33,560 --> 00:17:34,000 Speaker 8: right now. 325 00:17:34,040 --> 00:17:36,399 Speaker 2: One last one with another game in town coming out 326 00:17:36,400 --> 00:17:38,960 Speaker 2: with in November. It's called an election. Do we take 327 00:17:38,960 --> 00:17:40,600 Speaker 2: that into account at all as we take a look 328 00:17:40,600 --> 00:17:42,040 Speaker 2: at investing in the stock market right now? 329 00:17:42,080 --> 00:17:42,440 Speaker 5: We do. 330 00:17:42,960 --> 00:17:46,679 Speaker 8: I don't know how to handicap the presidential election, and 331 00:17:46,760 --> 00:17:49,080 Speaker 8: luckily I don't have to. The real game in town 332 00:17:49,160 --> 00:17:52,439 Speaker 8: here is the Senate. Who wins the Senate, and it 333 00:17:52,480 --> 00:17:54,680 Speaker 8: looks like the GOP has a better than a fifty 334 00:17:54,720 --> 00:17:57,720 Speaker 8: to fifty chance at winning the Senate. Why is this important? 335 00:17:58,000 --> 00:18:01,280 Speaker 8: This is important because this could chase is a regulatory environment. 336 00:18:02,119 --> 00:18:04,960 Speaker 8: The M and A market is improving, and if the 337 00:18:05,000 --> 00:18:07,680 Speaker 8: GOP does take the Senate, we would expect an acceleration 338 00:18:08,200 --> 00:18:09,880 Speaker 8: of the M and A market later on the year 339 00:18:09,960 --> 00:18:12,320 Speaker 8: because of the potential change with regulation. 340 00:18:12,520 --> 00:18:14,760 Speaker 2: So you think the antitrust enforcement policy of the BODOM 341 00:18:14,800 --> 00:18:16,159 Speaker 2: is to have held back some M and A. 342 00:18:16,240 --> 00:18:19,080 Speaker 8: That's part of the reason we've seen is absolutely there's 343 00:18:19,080 --> 00:18:21,800 Speaker 8: not a question. It has absolutely held back some m and. 344 00:18:21,760 --> 00:18:24,639 Speaker 2: A last one taxes because there's a question we're renewing 345 00:18:24,640 --> 00:18:26,840 Speaker 2: the Trump's tax cuts. How important is that in the Senate. 346 00:18:27,840 --> 00:18:29,840 Speaker 8: It's important, but it's not something a lot of people 347 00:18:29,880 --> 00:18:31,600 Speaker 8: are talking to us right now. So I think it's 348 00:18:31,720 --> 00:18:34,520 Speaker 8: more of a twenty five to twenty six issue. It's 349 00:18:34,600 --> 00:18:36,960 Speaker 8: not really a big issue in top of mind for 350 00:18:37,040 --> 00:18:38,680 Speaker 8: many investors at this point in time. 351 00:18:38,840 --> 00:18:41,080 Speaker 2: Infascinating, but you don't want to handicap the election. You sure, 352 00:18:42,000 --> 00:18:43,359 Speaker 2: we can still do that if you want. You can 353 00:18:43,359 --> 00:18:44,119 Speaker 2: tell us who's going to win. 354 00:18:44,160 --> 00:18:46,919 Speaker 8: If you want, I'll just say we'll have we'll have 355 00:18:46,960 --> 00:18:47,480 Speaker 8: a president. 356 00:18:47,560 --> 00:18:50,280 Speaker 5: We'll have just go and vote. I'm going to vote. 357 00:18:50,600 --> 00:18:52,480 Speaker 2: We go, I can handicap. Well, we'll have a president, 358 00:18:52,480 --> 00:18:54,359 Speaker 2: which is good news. Thank you so much, Chris for 359 00:18:54,359 --> 00:18:57,879 Speaker 2: being back with us. Chris Harvey of Wells Fargo. Electric 360 00:18:58,000 --> 00:19:00,719 Speaker 2: vehicles are a policy priority in the United States, in Europe, 361 00:19:00,720 --> 00:19:03,280 Speaker 2: and in China, even as automakers, at least the United 362 00:19:03,280 --> 00:19:06,639 Speaker 2: States trim back their ambitious goals. Brian Deese has been 363 00:19:06,680 --> 00:19:08,879 Speaker 2: at the center of auto policy in the United States, 364 00:19:08,920 --> 00:19:11,399 Speaker 2: first as a member of the Obama administration team that 365 00:19:11,520 --> 00:19:14,360 Speaker 2: rescued the industry during the Great Financial Crisis, and then 366 00:19:14,400 --> 00:19:17,760 Speaker 2: more recently as director of President Biden's National Economic Council. 367 00:19:17,880 --> 00:19:20,000 Speaker 2: And we welcome them down to Wall Street week. Brian, welcome. 368 00:19:20,000 --> 00:19:20,800 Speaker 2: It's good to have you here. 369 00:19:20,920 --> 00:19:21,720 Speaker 5: I'm happy to be here. 370 00:19:21,960 --> 00:19:23,960 Speaker 2: It brings up to speed on electric vehicles, says they 371 00:19:24,000 --> 00:19:25,760 Speaker 2: were all the rage just a couple of years ago, 372 00:19:25,920 --> 00:19:28,400 Speaker 2: and now when you're reading the press, maybe not quite 373 00:19:28,440 --> 00:19:31,280 Speaker 2: so much. Maybe the consumers are not rushing to buy them. 374 00:19:31,440 --> 00:19:33,840 Speaker 2: You see some US automakers cutting back on their goals. 375 00:19:33,880 --> 00:19:34,480 Speaker 2: What's going on? 376 00:19:34,880 --> 00:19:38,040 Speaker 3: Well, I think those headlines would make you more concerned 377 00:19:38,040 --> 00:19:40,560 Speaker 3: than you should be that the demise of electric vehicles 378 00:19:40,600 --> 00:19:41,640 Speaker 3: has greatly exaggerated. 379 00:19:41,840 --> 00:19:43,200 Speaker 5: So let's start with the number. 380 00:19:43,280 --> 00:19:46,960 Speaker 3: So in twenty twenty three, there were about one point 381 00:19:47,000 --> 00:19:49,760 Speaker 3: four million electric vehicles sold in the United States. That 382 00:19:49,880 --> 00:19:53,119 Speaker 3: was almost ten percent of overall sales. That was up 383 00:19:53,160 --> 00:19:56,320 Speaker 3: fifty percent from a year before, so really significant growth. 384 00:19:56,720 --> 00:19:57,720 Speaker 5: First couple of months of. 385 00:19:57,720 --> 00:20:02,000 Speaker 3: This year, EV sales are up about fifteen to twenty percent. 386 00:20:02,480 --> 00:20:06,120 Speaker 3: So the rate of growth is slowing, but I think 387 00:20:06,119 --> 00:20:09,879 Speaker 3: that that's actually reasonablely what you would expect. This is 388 00:20:09,920 --> 00:20:12,640 Speaker 3: a market that as it matures and as it becomes 389 00:20:12,680 --> 00:20:16,960 Speaker 3: a larger share of overall vehicle sales, expecting year on 390 00:20:17,119 --> 00:20:21,719 Speaker 3: year fifty percent growth rates was never realistic, and so 391 00:20:21,760 --> 00:20:26,200 Speaker 3: I think the question is where will this growth trajectory 392 00:20:26,760 --> 00:20:30,920 Speaker 3: lead out, and also when will the appetite for those 393 00:20:30,960 --> 00:20:35,440 Speaker 3: electric feels butt up against consumer concerns and consumer adoption. 394 00:20:35,720 --> 00:20:37,719 Speaker 3: I don't think we're there yet, and so, you know, 395 00:20:37,760 --> 00:20:40,199 Speaker 3: a rate of growth that's twenty percent year over year 396 00:20:40,240 --> 00:20:42,560 Speaker 3: would be pretty good for a lot of industries, but 397 00:20:42,640 --> 00:20:45,120 Speaker 3: we're certainly seeing a slow and compared to the rate 398 00:20:45,119 --> 00:20:47,000 Speaker 3: to pick up in twenty twenty two and twenty twenty three, 399 00:20:47,000 --> 00:20:48,320 Speaker 3: which was really quite extraordinary. 400 00:20:49,040 --> 00:20:51,920 Speaker 2: Overall, the demand for EVS in the United States continues 401 00:20:51,960 --> 00:20:55,280 Speaker 2: to go up, even if more slowly, but different makers 402 00:20:55,320 --> 00:21:00,240 Speaker 2: are taking different approaches to stimulating that demand. 403 00:21:00,240 --> 00:21:04,520 Speaker 9: For example, cut prices significantly on the Mustang Marquee as 404 00:21:04,520 --> 00:21:08,680 Speaker 9: a response to demand. All eyes will be on Tesla, 405 00:21:08,760 --> 00:21:12,040 Speaker 9: of course, because Tesla is the market incumbent. 406 00:21:11,640 --> 00:21:13,240 Speaker 5: The pure playev name. 407 00:21:13,600 --> 00:21:17,159 Speaker 9: How it fares in the first court will be critically important. 408 00:21:17,280 --> 00:21:20,680 Speaker 9: You know, there is something happening where the early adopters 409 00:21:20,680 --> 00:21:23,240 Speaker 9: in America have been and gone in terms of the consumer, 410 00:21:23,760 --> 00:21:26,879 Speaker 9: and there is still an assessment to be done on 411 00:21:27,359 --> 00:21:31,320 Speaker 9: how impactful the incentives provided by the Inflation Reduction Act 412 00:21:31,400 --> 00:21:32,240 Speaker 9: are going to be. 413 00:21:32,960 --> 00:21:36,160 Speaker 2: And it's not just the traditional Big three US automakers 414 00:21:36,200 --> 00:21:39,560 Speaker 2: seeking to take advantage of those incentives, raising the spectra 415 00:21:39,680 --> 00:21:43,080 Speaker 2: of the US being left behind by overseas producers the 416 00:21:43,119 --> 00:21:45,119 Speaker 2: way we saw in the nineteen seventies. 417 00:21:45,680 --> 00:21:48,080 Speaker 3: I think there's a risk. I think you listen to 418 00:21:48,119 --> 00:21:52,000 Speaker 3: what the leadership of Ford in GM INSTALLMENTUS as well 419 00:21:52,080 --> 00:21:57,119 Speaker 3: are saying, they recognize there behind that this is fundamentally 420 00:21:57,160 --> 00:22:01,440 Speaker 3: a technology play electric vehicles. It's a it's a fundamental 421 00:22:01,440 --> 00:22:04,240 Speaker 3: shift in technology. It's not just an incremental shift in 422 00:22:04,720 --> 00:22:11,200 Speaker 3: vehicle technology, and they were behind. Tesla Hanbakia are both ahead. 423 00:22:12,000 --> 00:22:14,639 Speaker 3: That said, I think you're seeing a certainly GM and 424 00:22:14,880 --> 00:22:17,879 Speaker 3: four both invest a lot in saying we need to 425 00:22:18,119 --> 00:22:19,520 Speaker 3: we need to catch up, and we need to catch 426 00:22:19,560 --> 00:22:22,479 Speaker 3: up quickly. I would say Ford's CEO Jim Farley has 427 00:22:22,520 --> 00:22:24,960 Speaker 3: been very blunt about this in saying, we're going to 428 00:22:25,040 --> 00:22:27,159 Speaker 3: need to remake this company. We're going to need to 429 00:22:27,600 --> 00:22:30,320 Speaker 3: do things differently in terms of how we organize ourselves 430 00:22:30,359 --> 00:22:33,840 Speaker 3: to drive innovation, to actually catch up and catch up 431 00:22:33,920 --> 00:22:38,320 Speaker 3: quickly in a growing global market as well. So I 432 00:22:38,359 --> 00:22:41,400 Speaker 3: am hopeful that what we'll see is that that kind 433 00:22:41,480 --> 00:22:44,560 Speaker 3: of commitment actually manifests in the marketplace, and we've certainly 434 00:22:44,640 --> 00:22:50,320 Speaker 3: seen some we're seeing those companies increase their sales sequentially 435 00:22:50,400 --> 00:22:55,760 Speaker 3: as well. But I think that that's always a risk, right, We're. 436 00:22:55,000 --> 00:22:56,560 Speaker 5: Going to have to stay ahead and it's a dynamic 437 00:22:56,600 --> 00:22:57,200 Speaker 5: global marketing. 438 00:22:57,359 --> 00:22:59,320 Speaker 2: Is there a challenge in the price point, because certainly 439 00:22:59,359 --> 00:23:01,440 Speaker 2: a GM for will started out with the more expensive 440 00:23:01,480 --> 00:23:04,480 Speaker 2: vehicles made sense because they needed to cover the costs 441 00:23:04,720 --> 00:23:07,040 Speaker 2: at the same time, Again, going back to my recollection 442 00:23:07,119 --> 00:23:09,080 Speaker 2: of when Japan really made in rows, they start out 443 00:23:09,119 --> 00:23:13,640 Speaker 2: pretty inexpensively. You have some less expensive models coming forwardseas. Yeah. 444 00:23:13,880 --> 00:23:17,879 Speaker 3: Look, there's different different approaches to this electric vehicle market 445 00:23:17,880 --> 00:23:21,240 Speaker 3: that are really fascinating. Where I think the dominant approach 446 00:23:21,280 --> 00:23:23,520 Speaker 3: is to start at the very high price point, try 447 00:23:23,520 --> 00:23:26,520 Speaker 3: to capture that margin, and then drive prices down across 448 00:23:26,600 --> 00:23:30,280 Speaker 3: the board. I would argue that actually, learning from history, 449 00:23:30,400 --> 00:23:34,840 Speaker 3: there's a real opportunity to own the lower cost segment 450 00:23:34,920 --> 00:23:37,760 Speaker 3: of this market, right, to be the electric vehicle provider 451 00:23:37,840 --> 00:23:41,240 Speaker 3: for typical middle class folks across the country. We've seen 452 00:23:41,280 --> 00:23:45,000 Speaker 3: some innovation on that front. GM introduced the Chevy Bolt 453 00:23:45,000 --> 00:23:47,880 Speaker 3: and for part of last year it was the fastest 454 00:23:47,920 --> 00:23:52,160 Speaker 3: growing electric vehicle in the country, and. 455 00:23:52,119 --> 00:23:54,480 Speaker 5: So I think it's possible. 456 00:23:54,920 --> 00:23:57,840 Speaker 3: And the other thing that's good news for consumers is, 457 00:23:57,880 --> 00:24:00,639 Speaker 3: in addition to seeing this electric vehicle growth, prices are 458 00:24:00,680 --> 00:24:03,479 Speaker 3: coming down very significantly. We've seen a twenty percent reduction 459 00:24:04,040 --> 00:24:07,440 Speaker 3: in the cost the purchase price of electric vehicles just 460 00:24:07,480 --> 00:24:08,200 Speaker 3: over the course of the. 461 00:24:08,160 --> 00:24:09,480 Speaker 5: Last several months. 462 00:24:09,720 --> 00:24:12,000 Speaker 3: That presents a constructive challenge to the auto companies, but 463 00:24:12,000 --> 00:24:14,159 Speaker 3: it's good news for consumers that we're seeing more and 464 00:24:14,200 --> 00:24:16,760 Speaker 3: more of these vehicles get into a price point which 465 00:24:16,800 --> 00:24:20,280 Speaker 3: is really in many ways, you know, comparable, particularly when 466 00:24:20,320 --> 00:24:22,480 Speaker 3: you take into account the overall cost of ownership. 467 00:24:23,000 --> 00:24:26,520 Speaker 2: Finally, it talks about the labor consequences of electric vehals. 468 00:24:26,680 --> 00:24:29,440 Speaker 2: As I understand, it takes significantly fewer workers to produce 469 00:24:29,480 --> 00:24:32,840 Speaker 2: an electric vehicle than an internal combustion engine car. What 470 00:24:32,880 --> 00:24:35,040 Speaker 2: does this mean for the auto worker, which is very 471 00:24:35,119 --> 00:24:36,440 Speaker 2: much on everyone's mind right now. 472 00:24:36,800 --> 00:24:38,400 Speaker 3: Well, look, I think what you need to look at 473 00:24:38,440 --> 00:24:42,359 Speaker 3: is the entire value chain. And so the electric vehicle 474 00:24:42,359 --> 00:24:46,440 Speaker 3: itself from an assembly perspective has fewer parts and therefore 475 00:24:46,560 --> 00:24:49,240 Speaker 3: less labor. The building of the batteries and the whole 476 00:24:49,320 --> 00:24:53,120 Speaker 3: upstream supply chain there creates new opportunity and new opportunity 477 00:24:53,160 --> 00:24:55,960 Speaker 3: for workers and for labor. So that whole battery supply 478 00:24:56,080 --> 00:24:58,360 Speaker 3: chain that I was just talking about, it's referred now 479 00:24:58,640 --> 00:25:01,359 Speaker 3: often as the battery belt from Michigan down to Georgia. 480 00:25:01,400 --> 00:25:05,440 Speaker 3: We're seeing this investment in the manufacturing and the processing 481 00:25:05,440 --> 00:25:09,160 Speaker 3: and these upstream components as well. Taken together, that creates 482 00:25:09,200 --> 00:25:12,920 Speaker 3: real new opportunities for American workers, American labor. I think 483 00:25:12,920 --> 00:25:15,479 Speaker 3: it's one of the reasons why these things aren't easy. 484 00:25:15,760 --> 00:25:21,080 Speaker 3: But you've seen even the UAW come around and recognize 485 00:25:21,240 --> 00:25:22,960 Speaker 3: that this is the future of the industry and the 486 00:25:23,000 --> 00:25:27,760 Speaker 3: opportunity is to effectively organize that whole value chain, and 487 00:25:27,800 --> 00:25:29,920 Speaker 3: they're seeing more opportunity than threat from that. 488 00:25:30,119 --> 00:25:31,560 Speaker 2: I'm happy to say that Brian is going to be 489 00:25:31,560 --> 00:25:33,800 Speaker 2: staying with us as we turn to what this false 490 00:25:33,840 --> 00:25:38,520 Speaker 2: presidential election could mean for the US economy. That's next time, 491 00:25:38,560 --> 00:25:40,000 Speaker 2: Wall Street Week on Bloomberg. 492 00:25:41,240 --> 00:25:45,480 Speaker 1: This is Bloomberg Wall Street Week with David Weston from 493 00:25:45,600 --> 00:25:46,520 Speaker 1: Bloomberg Radio. 494 00:25:53,080 --> 00:25:55,439 Speaker 2: This is Wall Street Week. I'm David Weston. Former National 495 00:25:55,440 --> 00:25:58,280 Speaker 2: Economic Council Director Brian Deese has stayed with us to 496 00:25:58,320 --> 00:26:00,600 Speaker 2: talk about the economy. So, Brian, we've got an election 497 00:26:00,640 --> 00:26:03,040 Speaker 2: coming up. You may not have noticed it coming in November, 498 00:26:03,320 --> 00:26:05,520 Speaker 2: and it looks like it's going to be Joe Biden 499 00:26:05,600 --> 00:26:09,359 Speaker 2: versus Donald Trump. Once again, give us your sense, having 500 00:26:09,400 --> 00:26:11,840 Speaker 2: been in the White House, what difference does it make? 501 00:26:11,840 --> 00:26:13,760 Speaker 2: Because it occurs to me sometimes I think we put 502 00:26:13,800 --> 00:26:16,399 Speaker 2: too much pressure on the president in the White House. 503 00:26:16,680 --> 00:26:18,760 Speaker 2: They can't control everything in the economy. How much of 504 00:26:18,760 --> 00:26:19,760 Speaker 2: a difference does it really make? 505 00:26:21,040 --> 00:26:24,800 Speaker 3: Well, Look, I don't know if this election is going 506 00:26:24,840 --> 00:26:28,800 Speaker 3: to be decided on policy and policy differences but it 507 00:26:28,840 --> 00:26:31,600 Speaker 3: should be because if you look at the difference between 508 00:26:32,000 --> 00:26:36,520 Speaker 3: these two candidates, the differences are as stark as certainly 509 00:26:36,520 --> 00:26:38,399 Speaker 3: any election in modern history. 510 00:26:38,680 --> 00:26:41,360 Speaker 5: We've got President Biden's. 511 00:26:40,920 --> 00:26:43,199 Speaker 3: Got a basic approach to the economy that he has 512 00:26:43,280 --> 00:26:46,280 Speaker 3: laid out, and now you can see we're talking about 513 00:26:46,480 --> 00:26:51,199 Speaker 3: significant investment in industrial renewal in the United States, a 514 00:26:51,240 --> 00:26:54,440 Speaker 3: commitment to the idea that public investment and things like infrastructure, 515 00:26:54,480 --> 00:26:57,040 Speaker 3: things like clean energy, build out of a semiconductor industry 516 00:26:57,080 --> 00:27:01,879 Speaker 3: will help to expand productive capacity ultimately expand real wage growth. 517 00:27:02,119 --> 00:27:03,320 Speaker 5: And that's his strategy. 518 00:27:03,359 --> 00:27:05,560 Speaker 3: And then frankly, it's consistent with who he is and 519 00:27:05,600 --> 00:27:11,800 Speaker 3: how he's approached the economy for some time. Candidate Trump, 520 00:27:12,080 --> 00:27:17,040 Speaker 3: on the other hand, is dramatic, dramatic departure. And the 521 00:27:17,119 --> 00:27:20,600 Speaker 3: thing that I think we're probably paying insufficient attention to 522 00:27:20,920 --> 00:27:24,400 Speaker 3: is at a moment where prices are the top issue 523 00:27:24,440 --> 00:27:28,040 Speaker 3: on Americans minds, and we've finally seen real progress and 524 00:27:28,080 --> 00:27:31,639 Speaker 3: bringing inflation down and bringing prices down. The basic Trump 525 00:27:31,680 --> 00:27:36,000 Speaker 3: approach of protectionism across the board, in discriminated tariff, shutting 526 00:27:36,000 --> 00:27:39,840 Speaker 3: down immigration, and raising costs like health care costs by 527 00:27:39,960 --> 00:27:42,920 Speaker 3: getting rid of pharmaceutical regulations. Getting rid of the Affordable 528 00:27:42,960 --> 00:27:47,639 Speaker 3: Care Act is a recipe for significant inflationary pressures in 529 00:27:47,680 --> 00:27:51,320 Speaker 3: the economy and price increases for typical families. So I 530 00:27:51,359 --> 00:27:54,840 Speaker 3: think that that's a real short term effect and a 531 00:27:54,880 --> 00:27:56,280 Speaker 3: real difference between these two candidates. 532 00:27:56,280 --> 00:27:58,080 Speaker 2: So let's talk about a couple of those if we could. 533 00:27:58,320 --> 00:28:01,280 Speaker 2: And they are immigration and they are protectionism as you 534 00:28:01,359 --> 00:28:05,240 Speaker 2: put it. On trade, President Biden has not really dialed 535 00:28:05,280 --> 00:28:08,439 Speaker 2: back substantially on the tariffs put in place under President Trump, 536 00:28:08,560 --> 00:28:10,840 Speaker 2: as I recall, and certainly when it comes to China, 537 00:28:10,880 --> 00:28:12,879 Speaker 2: it doesn't sound like they have a very different position. 538 00:28:13,359 --> 00:28:14,120 Speaker 5: Is there really a. 539 00:28:14,080 --> 00:28:16,480 Speaker 2: Difference when it comes to trade between these two men. 540 00:28:16,840 --> 00:28:17,439 Speaker 5: I think there is. 541 00:28:17,480 --> 00:28:21,080 Speaker 3: I think it's pretty stark. President Biden has had a 542 00:28:21,119 --> 00:28:23,000 Speaker 3: sort of a basic two part approach when it comes 543 00:28:23,040 --> 00:28:26,439 Speaker 3: to trade, which is, one, have a very targeted approach 544 00:28:26,480 --> 00:28:31,280 Speaker 3: to protecting American interests, economic and national security when it's warranted, 545 00:28:31,680 --> 00:28:34,880 Speaker 3: and two really committing to work with partners and allies 546 00:28:34,920 --> 00:28:38,800 Speaker 3: to try to build more capability and effectiveness when that 547 00:28:38,880 --> 00:28:41,080 Speaker 3: is the case. So if you look at something like semiconductors, 548 00:28:41,760 --> 00:28:44,440 Speaker 3: the Trump administration really didn't take any action when we're 549 00:28:44,480 --> 00:28:49,040 Speaker 3: looking at sensitive dual use technologies that were potentially getting 550 00:28:49,040 --> 00:28:51,240 Speaker 3: in the hands of the Chinese or other adversaries. 551 00:28:51,880 --> 00:28:53,080 Speaker 5: The Biden administration came in. 552 00:28:53,120 --> 00:28:54,800 Speaker 3: President Biden came in and said, I am going to 553 00:28:54,800 --> 00:28:56,320 Speaker 3: put a stop to that, but I'm going to work 554 00:28:56,360 --> 00:28:58,880 Speaker 3: with my allies and partners to do so because otherwise 555 00:28:58,920 --> 00:29:04,200 Speaker 3: it's fundamentally ineffective. You contrast that with the Trump approach, 556 00:29:04,240 --> 00:29:06,560 Speaker 3: which it's still emerging, so we have to see what 557 00:29:06,600 --> 00:29:08,640 Speaker 3: happens on the campaign. But if it does turn out 558 00:29:08,640 --> 00:29:11,520 Speaker 3: that what we're talking about is a ten percent across 559 00:29:11,560 --> 00:29:14,520 Speaker 3: the board tariff on all products coming into the United 560 00:29:14,560 --> 00:29:18,560 Speaker 3: States from allied countries, from countries or from products where 561 00:29:18,600 --> 00:29:20,120 Speaker 3: we don't produce anything here in the. 562 00:29:20,200 --> 00:29:21,680 Speaker 5: United States, a cup of coffee. 563 00:29:22,520 --> 00:29:27,560 Speaker 3: That is a very extreme and new step. You talk 564 00:29:27,600 --> 00:29:32,920 Speaker 3: about completely eliminating permanent, normal trade relationships to China. Candidate 565 00:29:32,960 --> 00:29:35,640 Speaker 3: Trump has said at times, I want to literally eliminate 566 00:29:35,680 --> 00:29:40,200 Speaker 3: all imports from China, period and stuff. The macroeconomic impact 567 00:29:40,320 --> 00:29:44,160 Speaker 3: of those steps would be significant, potentially a couple of 568 00:29:44,200 --> 00:29:47,320 Speaker 3: points off at GDP, and the practical impact on those 569 00:29:47,360 --> 00:29:49,360 Speaker 3: for families would be quite significant too. 570 00:29:49,360 --> 00:29:50,720 Speaker 5: People would start to see. 571 00:29:50,480 --> 00:29:54,880 Speaker 3: It, and I think that general Trump approach is one 572 00:29:54,880 --> 00:29:58,400 Speaker 3: of core isolationism, which is not only to wreck those barriers, 573 00:29:58,440 --> 00:30:03,000 Speaker 3: but basically to alienate our alley in the process that creates, 574 00:30:03,040 --> 00:30:06,840 Speaker 3: you know, potentially larger risks across the board. So I 575 00:30:06,920 --> 00:30:09,720 Speaker 3: think that the top line, well, you know, there's not 576 00:30:09,760 --> 00:30:13,840 Speaker 3: that much difference in them on trade is a complicated 577 00:30:13,880 --> 00:30:15,600 Speaker 3: position when you unpack it. 578 00:30:15,640 --> 00:30:18,120 Speaker 2: And what about immigration. There was a time there seemed 579 00:30:18,120 --> 00:30:20,880 Speaker 2: to be a very big difference between them. Former President 580 00:30:20,920 --> 00:30:22,840 Speaker 2: Trump certainly would say there's a big difference, But it 581 00:30:22,880 --> 00:30:25,880 Speaker 2: feels like President Biden has moved toward the position of 582 00:30:25,920 --> 00:30:27,840 Speaker 2: President Trump. Is there a big difference to this point, 583 00:30:27,960 --> 00:30:30,440 Speaker 2: isn't any president going to have to address that southern 584 00:30:30,440 --> 00:30:31,240 Speaker 2: board no matter. 585 00:30:31,080 --> 00:30:33,080 Speaker 3: What, one hundred percent the border will need to be addressed, 586 00:30:33,080 --> 00:30:36,040 Speaker 3: and don't need to be addressed in a appropriate and 587 00:30:36,120 --> 00:30:38,600 Speaker 3: aggressive way. I think the big difference in what I 588 00:30:39,360 --> 00:30:42,360 Speaker 3: worry about is with respect to the legal immigration system. 589 00:30:42,440 --> 00:30:44,440 Speaker 3: So one of the significant things we've seen over the 590 00:30:44,440 --> 00:30:47,760 Speaker 3: past couple of years, the reason why we've seen significant 591 00:30:47,800 --> 00:30:51,280 Speaker 3: increases in labor supply and labor force participation, it's legal 592 00:30:51,320 --> 00:30:54,440 Speaker 3: immigration has come back after COVID and after the Trump 593 00:30:54,560 --> 00:30:57,200 Speaker 3: administration as well as more women coming into the workforce. 594 00:30:57,520 --> 00:31:01,160 Speaker 3: That process of legal immigration that is now normalized, and 595 00:31:01,200 --> 00:31:04,719 Speaker 3: the Biden administration prioritized, for example, working down visa backlogs 596 00:31:04,720 --> 00:31:07,560 Speaker 3: and trying to get to a more normal system. I 597 00:31:07,600 --> 00:31:10,840 Speaker 3: think under a Trump administration you could expect that to revert. 598 00:31:11,480 --> 00:31:13,640 Speaker 3: And I think in addition to that being bad for 599 00:31:13,800 --> 00:31:19,080 Speaker 3: innovation and bad for broader economic growth, it could also 600 00:31:19,200 --> 00:31:22,120 Speaker 3: be quite inflationary in the short term, because what you're 601 00:31:22,160 --> 00:31:25,000 Speaker 3: doing is constricting labor supply at a moment. 602 00:31:24,720 --> 00:31:27,080 Speaker 5: Where we need more. We need more workers in the 603 00:31:27,160 --> 00:31:27,720 Speaker 5: United States. 604 00:31:27,840 --> 00:31:31,800 Speaker 3: Our legal immigration system has been an engine for growth 605 00:31:31,960 --> 00:31:34,800 Speaker 3: for decades. For a long time, I think that there 606 00:31:34,840 --> 00:31:36,680 Speaker 3: would be a big difference on that front, because I 607 00:31:36,680 --> 00:31:38,880 Speaker 3: think you're right with respect to the southern border, it 608 00:31:38,920 --> 00:31:40,600 Speaker 3: will need to be addressed. It will need to be 609 00:31:40,640 --> 00:31:43,120 Speaker 3: addressed in a realistic but aggressive way. 610 00:31:43,440 --> 00:31:45,960 Speaker 2: What about fiscal policy, and as you said, present Biden 611 00:31:46,000 --> 00:31:49,800 Speaker 2: is really pursued a policy of investment, which is a 612 00:31:49,800 --> 00:31:52,480 Speaker 2: mounded to fiscal stimulus as a practicmaty, so's a paramoida. 613 00:31:52,520 --> 00:31:54,200 Speaker 2: It's still to be expressed. It hasn't come through the 614 00:31:54,200 --> 00:31:57,040 Speaker 2: system yet. Is there a big difference in addressing the 615 00:31:57,080 --> 00:31:58,640 Speaker 2: deficit and the debt because a lot of people at 616 00:31:58,680 --> 00:32:01,160 Speaker 2: least on Wall Street are concerned about at this point. 617 00:32:01,280 --> 00:32:04,200 Speaker 5: Yeah, well, and I think there's reason for concern. 618 00:32:04,280 --> 00:32:06,840 Speaker 3: The big different the biggest difference here is with respect 619 00:32:06,880 --> 00:32:10,240 Speaker 3: to tax policy, and there the numbers are very large. 620 00:32:10,240 --> 00:32:11,440 Speaker 5: So if you look at. 621 00:32:11,440 --> 00:32:13,400 Speaker 3: There's a reason analysis of what would it look like 622 00:32:14,040 --> 00:32:16,320 Speaker 3: for Trump policy to go into effect. If you're talking 623 00:32:16,360 --> 00:32:21,080 Speaker 3: about both extending the Trump tax cuts that were put 624 00:32:21,120 --> 00:32:23,320 Speaker 3: in place in twenty seventeen, many of which expire in 625 00:32:23,320 --> 00:32:25,720 Speaker 3: twenty twenty five, and then you add on to that 626 00:32:26,160 --> 00:32:28,280 Speaker 3: things that Trump has been talking about to include a 627 00:32:28,280 --> 00:32:32,480 Speaker 3: reduction in the corporate tax rate to fifteen percent. All told, 628 00:32:32,480 --> 00:32:35,000 Speaker 3: that would be about four point six trillion dollars in 629 00:32:35,040 --> 00:32:37,080 Speaker 3: additional tax cuts over a decade. 630 00:32:37,200 --> 00:32:39,080 Speaker 5: It's almost two percentage points of GDP. 631 00:32:39,120 --> 00:32:42,400 Speaker 3: It would take our revenue down below fifteen percent of GDP. 632 00:32:43,040 --> 00:32:45,440 Speaker 5: Very different from what a President Biden is. 633 00:32:45,400 --> 00:32:49,000 Speaker 3: Talking about, where he's talking about actually trying to increase taxes, 634 00:32:49,640 --> 00:32:51,960 Speaker 3: raise that corporate tax rate back up from twenty one 635 00:32:52,040 --> 00:32:55,440 Speaker 3: closer to twenty eight percent, Increase taxes on the very 636 00:32:55,480 --> 00:32:58,920 Speaker 3: wealthy by a significant amount. That could raise a couple 637 00:32:58,920 --> 00:33:02,120 Speaker 3: of trillion dollars. That gap between the two is well 638 00:33:02,120 --> 00:33:07,120 Speaker 3: over five trillion dollars. That will be a line of 639 00:33:07,160 --> 00:33:09,800 Speaker 3: debate and a line of demarcation in twenty twenty five. 640 00:33:09,880 --> 00:33:12,520 Speaker 5: But given the fiscal backdraft we have, I think if. 641 00:33:12,400 --> 00:33:15,720 Speaker 3: The market actually internalizes the idea that we're not going 642 00:33:15,760 --> 00:33:18,760 Speaker 3: to do anything about the Trump tax cut extension, and 643 00:33:18,800 --> 00:33:20,080 Speaker 3: in fact we're going to come and we're going to 644 00:33:20,160 --> 00:33:22,840 Speaker 3: layer on that with additional tax cuts, then I think 645 00:33:22,840 --> 00:33:26,160 Speaker 3: that you'll start to see that in impact on long 646 00:33:26,200 --> 00:33:28,320 Speaker 3: to borrowing costs, because it will send a signal that 647 00:33:28,360 --> 00:33:31,480 Speaker 3: we don't really have any serious plan to address the 648 00:33:31,600 --> 00:33:33,320 Speaker 3: revenue short falls we have in this country. 649 00:33:33,720 --> 00:33:35,600 Speaker 2: Rian, thank you so much for being on Wilsher. Really 650 00:33:35,600 --> 00:33:38,160 Speaker 2: good to have you here. That is former National Economic 651 00:33:38,160 --> 00:33:42,680 Speaker 2: Council Director Brian Deese Socrates said, my friend, care for 652 00:33:42,720 --> 00:33:46,240 Speaker 2: your psyche, know thyself. For once we know ourselves, we 653 00:33:46,280 --> 00:33:49,480 Speaker 2: may learn how to care for ourselves. And let's face it, 654 00:33:49,600 --> 00:33:51,959 Speaker 2: just about all of us could take better care of ourselves, 655 00:33:52,160 --> 00:33:54,680 Speaker 2: like getting enough sleep and reducing stress. 656 00:33:55,080 --> 00:34:01,480 Speaker 10: We see that these five daily behaviors of sleep, food, move, month, stress, 657 00:34:01,520 --> 00:34:08,080 Speaker 10: and connection dramatically affect our health and our longevity. 658 00:34:08,480 --> 00:34:11,520 Speaker 2: People who've run big companies, like Indra Nui of PEPSI 659 00:34:11,800 --> 00:34:14,080 Speaker 2: see a greater need than ever to care for the 660 00:34:14,120 --> 00:34:15,799 Speaker 2: psyches of their employees. 661 00:34:16,280 --> 00:34:19,440 Speaker 11: I think post pandemic, we're seeing more and more people 662 00:34:19,480 --> 00:34:21,280 Speaker 11: say I have to worry about me as a person. 663 00:34:21,320 --> 00:34:24,080 Speaker 11: I have to worry about my family, worry about my 664 00:34:24,160 --> 00:34:27,320 Speaker 11: well being, my mental health. So we've got to start 665 00:34:28,120 --> 00:34:31,799 Speaker 11: encompassing people as holistic humans, as opposed to a tool 666 00:34:31,880 --> 00:34:32,759 Speaker 11: of the trade. 667 00:34:32,800 --> 00:34:37,040 Speaker 2: Some of us turn to psychotherapists, as mob boss Tony Soprano. 668 00:34:36,600 --> 00:34:39,359 Speaker 7: Did any thoughts at all on WHYU planted out? 669 00:34:39,880 --> 00:34:43,360 Speaker 2: I don't know, stress maybe, But for some it's not 670 00:34:43,560 --> 00:34:46,480 Speaker 2: enough to get more sleep, or have a more thoughtful boss, 671 00:34:46,600 --> 00:34:48,839 Speaker 2: or have someone to talk to. Some of us turn 672 00:34:48,960 --> 00:34:52,120 Speaker 2: to chemistry, like Elon Musk, who is talking about his 673 00:34:52,320 --> 00:34:53,640 Speaker 2: use of ketamine. Again. 674 00:34:53,880 --> 00:34:55,120 Speaker 5: There are times when I have. 675 00:34:57,400 --> 00:34:57,840 Speaker 2: Sort of a. 676 00:35:01,040 --> 00:35:04,520 Speaker 12: I don't know, like a negative chemical state in my brain, 677 00:35:05,000 --> 00:35:08,640 Speaker 12: like depression, I guess, you know, or like depression that's 678 00:35:09,080 --> 00:35:14,080 Speaker 12: not linked to any negative views. And then keadomy is 679 00:35:14,120 --> 00:35:17,640 Speaker 12: helpful for getting getting one outside out of a negative 680 00:35:17,800 --> 00:35:18,439 Speaker 12: frame of mind. 681 00:35:19,000 --> 00:35:21,760 Speaker 2: And now there's a new game in town, or really 682 00:35:21,800 --> 00:35:25,360 Speaker 2: an old game that some of us may remember, perhaps hazily, 683 00:35:25,600 --> 00:35:30,080 Speaker 2: from the nineteen sixties. Yes, there's a return to magic mushrooms. 684 00:35:30,360 --> 00:35:32,920 Speaker 2: Mike Tyson does it, even when he was partying in 685 00:35:32,920 --> 00:35:35,200 Speaker 2: Saint Bart's with Jake Paul the Man He's due to 686 00:35:35,200 --> 00:35:36,160 Speaker 2: fight this July. 687 00:35:36,760 --> 00:35:39,360 Speaker 5: Are you taking shrooms before the workout just because. 688 00:35:39,120 --> 00:35:40,759 Speaker 2: You like the space of thinking? 689 00:35:40,800 --> 00:35:44,480 Speaker 6: It comes up absolutely, of the focusedness of shrooms. 690 00:35:44,480 --> 00:35:47,759 Speaker 2: It can't. It compared nothing. Now, Chelsea Handler does it 691 00:35:47,800 --> 00:35:48,799 Speaker 2: with her employees. 692 00:35:49,239 --> 00:35:51,560 Speaker 5: You took them camping and everyone took mushroom. I didn't 693 00:35:51,600 --> 00:35:53,720 Speaker 5: provide the mushrooms just for legal reasons. 694 00:35:53,760 --> 00:35:55,359 Speaker 2: I want that to be stated very soon. 695 00:35:55,960 --> 00:35:58,480 Speaker 5: Where in the budget is that is that craft service. 696 00:36:00,680 --> 00:36:02,560 Speaker 8: People can pick mushrooms in the forest. 697 00:36:02,760 --> 00:36:06,160 Speaker 2: Bloomberg this week reported on so called magic mushrooms being 698 00:36:06,200 --> 00:36:09,319 Speaker 2: touted by executive coaches, and the Wall Street Journal had 699 00:36:09,320 --> 00:36:12,440 Speaker 2: a piece on these magic mushrooms being quote the working 700 00:36:12,440 --> 00:36:16,120 Speaker 2: woman's newest life hack. Steve Cohen has doubled down on 701 00:36:16,200 --> 00:36:20,040 Speaker 2: his investment in cybin That's a biopharmaceutical firm in clinical 702 00:36:20,120 --> 00:36:23,480 Speaker 2: trials for a medicine to handle serious depression. A medicine 703 00:36:23,480 --> 00:36:26,640 Speaker 2: that uses you guessed it. The active element found in 704 00:36:26,760 --> 00:36:30,799 Speaker 2: magic mushrooms. Given all the buzz, maybe this really is 705 00:36:30,920 --> 00:36:33,560 Speaker 2: the way to go. But as my wife could tell you, 706 00:36:33,719 --> 00:36:36,279 Speaker 2: I'm pretty conservative and back in the nineties when I 707 00:36:36,320 --> 00:36:39,200 Speaker 2: was General counsel of Capsudy's ABC, we had a big 708 00:36:39,200 --> 00:36:42,520 Speaker 2: commitment to the Partnership for a Drug Free America. That's 709 00:36:42,520 --> 00:36:45,160 Speaker 2: a charity founded by J and J CEO Jim Burke, 710 00:36:45,320 --> 00:36:47,480 Speaker 2: who just happened to be the brother of my boss, 711 00:36:47,600 --> 00:36:50,400 Speaker 2: Dan Burr, and the PSAs we ran on ABC had 712 00:36:50,440 --> 00:36:53,160 Speaker 2: a decidedly different approach to psychedelics. 713 00:36:54,000 --> 00:37:03,799 Speaker 7: This is your brain, this is drugs, This is your 714 00:37:03,840 --> 00:37:05,719 Speaker 7: brain on drug that does it. 715 00:37:05,760 --> 00:37:08,080 Speaker 2: For this episode of Wall Street Week, I'm David Weston 716 00:37:08,200 --> 00:37:16,400 Speaker 2: This is Bloomberg. See you next week.