WEBVTT - Sternlicht’s Starwood Gives Up on Malls 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Charle Masser and I'm 0:00:04.480 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanovik. We're here every day bringing 0:00:07.320 --> 0:00:09.840 you the latest news from the world to business and finance, 0:00:09.840 --> 0:00:13.640 plus technology, politics, economics, all purtnising the power of Business 0:00:13.680 --> 0:00:17.159 Week reporters and editors, not to mention our journalists and 0:00:17.120 --> 0:00:20.000 analysts in more than one twenty countries. You can download 0:00:20.000 --> 0:00:23.479 Bloomberg Business Weekend iTunes, SoundCloud, or Bloomberg dot com. You 0:00:23.480 --> 0:00:25.439 can also listen to our radio show at two pm 0:00:25.440 --> 0:00:27.880 Eastern Time on the Bloomberg Radio or watch us on 0:00:27.920 --> 0:00:32.120 YouTube search Bloomberg Global News. And we've been watching a 0:00:32.120 --> 0:00:34.600 couple of the names. When it comes to their results. 0:00:34.640 --> 0:00:36.720 Chippy Morgan is down one point three percent, and a 0:00:36.800 --> 0:00:39.839 quick check on Goldman Sacks again it is down just 0:00:39.840 --> 0:00:41.800 about half percent off its loads of the days. Yeah, 0:00:41.880 --> 0:00:43.600 let's get right into it with Alison at william Senior 0:00:43.640 --> 0:00:46.400 Global Banks Analysts for Bloomberg Intelligence. Okay, so here, we 0:00:46.440 --> 0:00:49.000 are not quite halfway through a big bank earnings. Allison, 0:00:49.120 --> 0:00:51.040 how would you summarize what we know so far based 0:00:51.080 --> 0:00:54.160 on the two banks that reported today? So I think 0:00:54.400 --> 0:00:58.400 no big surprises, but really a sort of a continuation 0:00:58.640 --> 0:01:01.480 of the trend in terms of some of the key 0:01:01.480 --> 0:01:08.559 concerns around that interesting income and higher expenses. So the 0:01:08.200 --> 0:01:12.360 the key for investors that are really focusing on is 0:01:12.440 --> 0:01:16.760 the potential for loan growth to return in the second half. 0:01:17.480 --> 0:01:20.880 Banks really need that to help loose their net interest income. 0:01:21.520 --> 0:01:24.319 Trading was very good in the quarter on the equity 0:01:24.360 --> 0:01:27.080 side of things. Fixed income down as we expected. We 0:01:27.120 --> 0:01:30.480 expect further normalization in the second half. The big surprise 0:01:30.520 --> 0:01:33.560 out of the investment banking arm of the businesses was 0:01:34.080 --> 0:01:38.720 U merger and advisory. We expect that, excuse me, mergers 0:01:38.760 --> 0:01:41.959 and acquisitions. The advised business we expect to continue to 0:01:41.959 --> 0:01:46.560 be strong in the second half UM. But but that's 0:01:46.560 --> 0:01:48.800 a small piece of it. And so in general we 0:01:48.880 --> 0:01:53.840 have the big capital markets piece normalizing. We have UM 0:01:54.000 --> 0:01:58.160 not interesting income a little bit disappointment. Disappointing just because 0:01:58.200 --> 0:02:02.520 consumers are not borrowing. Corporations are using cash to buy companies, 0:02:02.520 --> 0:02:06.320 consumers are using cash to fund their spending. Where well, 0:02:06.520 --> 0:02:10.240 it's interesting. Well when it comes to borrowing, Uh, is 0:02:10.240 --> 0:02:14.320 it just consumers and businesses aren't interested, or is it 0:02:14.400 --> 0:02:17.519 that the banks are picky about who they give loans 0:02:17.560 --> 0:02:22.720 to it's really more about the cash that corporations and 0:02:22.760 --> 0:02:27.639 consumers have on their balancy. For consumers, it's really UM. 0:02:27.760 --> 0:02:32.639 It's been fueled by the stimulus, so UM. Our Economics 0:02:32.639 --> 0:02:37.000 Department of UM Bloomberg and Economics department has calculated over 0:02:37.080 --> 0:02:40.480 two trillion dollars UM. And what we've seen with all 0:02:40.520 --> 0:02:43.600 the stimulants payments that have come so far is consumers 0:02:43.639 --> 0:02:46.000 have used that money to pay down debt. So that's 0:02:46.120 --> 0:02:50.320 healthy UM but UM and they're spending, but they're just 0:02:50.400 --> 0:02:52.720 paying that out of savings. And then on the corporate 0:02:52.720 --> 0:02:55.799 side of things UM. As you recall a year ago, 0:02:55.840 --> 0:02:59.359 in the pandemic took hold, corporations drew down on their 0:02:59.360 --> 0:03:03.280 credit lines banks. However, when the capital markets opened up, 0:03:03.400 --> 0:03:07.040 especially the large corporates, UM tapped those capital markets. So 0:03:07.040 --> 0:03:11.400 we've seen very strong debt issuance UM over the past 0:03:11.480 --> 0:03:13.640 year and effect in the most recent quarter, very strong 0:03:13.720 --> 0:03:18.200 high yield issuance UM. So they're continuing to to raise 0:03:18.320 --> 0:03:21.840 funds UM. And then what you know on the commercial 0:03:21.919 --> 0:03:26.519 side of things, UM, it's really that UM again, we 0:03:26.520 --> 0:03:28.639 we need the demand side to pick up. So it's 0:03:28.639 --> 0:03:31.800 not the banks are out there, they have tons of deposits, 0:03:32.280 --> 0:03:34.440 tons of liquidity. They want to make lens, but the 0:03:34.520 --> 0:03:36.840 demand is just not there yet. So I wonder what 0:03:36.960 --> 0:03:40.560 what was expected from from shareholders and if their expectations 0:03:41.320 --> 0:03:43.920 were not met, especially when it comes to JP Morgan, 0:03:43.960 --> 0:03:46.160 because shares down by more than one point three percent, 0:03:46.200 --> 0:03:49.960 it doesn't sound like there wasn't that much that was surprising. Well, yes, 0:03:50.200 --> 0:03:52.080 so I would keep in mind it was a very 0:03:52.080 --> 0:03:54.960 strong quarter, but most of the strength that we saw 0:03:55.040 --> 0:03:59.080 were things that UM had been expected. We had a 0:03:59.160 --> 0:04:03.680 huge reserve release UM. Again, that's something that investors are 0:04:03.760 --> 0:04:07.520 expecting that I guess the new news and again that 0:04:07.640 --> 0:04:10.080 interest in come disappointing, but we had sort of, you know, 0:04:10.160 --> 0:04:12.480 been trending that way over the last several quarters. But 0:04:12.520 --> 0:04:15.920 the new news in terms of expenses and expenses I 0:04:15.960 --> 0:04:18.320 think are something we're going to continue to be focusing 0:04:18.320 --> 0:04:21.640 on this week. Across the banks. JP Morgan got into 0:04:21.680 --> 0:04:24.920 sixty eight billion of expenses in January. That's gone up 0:04:25.440 --> 0:04:28.760 UM to sixty nine, to seventy and now today seventy 0:04:28.839 --> 0:04:33.440 one billion. And I do think that, you know, part 0:04:33.440 --> 0:04:35.880 of it is because the revenue is better, but part 0:04:35.920 --> 0:04:38.720 of it is they're investing. And I think that even 0:04:38.760 --> 0:04:43.240 though investors might be disappointed today, JP Morgan has shown 0:04:43.240 --> 0:04:48.040 over the last several years UM this ability to fund 0:04:48.080 --> 0:04:51.320 what we call the virtuous cycle. So they're spending more UM, 0:04:51.320 --> 0:04:55.080 but that's helping them to make more right, it's longer 0:04:55.200 --> 0:04:58.279 term investments. It's you know, we all want management to 0:04:58.320 --> 0:05:00.160 think long term, and so I think we need to 0:05:01.160 --> 0:05:04.560 think long term along with them. And and with the 0:05:04.680 --> 0:05:07.520 incredible trading that we've had over the last couple of years, 0:05:07.520 --> 0:05:10.600 we think it's actually healthy UM that the banks are 0:05:10.640 --> 0:05:14.520 investing this, especially with all the talk about fintech, all 0:05:14.520 --> 0:05:17.760 the competition from fintech UM and everything going on on 0:05:17.760 --> 0:05:21.360 that front. Well exactly, we just talked about city groups specifically, right, like, 0:05:21.520 --> 0:05:23.719 you know, looking at fintech, I mean they're all staring 0:05:23.720 --> 0:05:27.039 at down city city debuting that no fee retail trading 0:05:27.080 --> 0:05:31.640 to compete with you know, others. So a little bit 0:05:31.680 --> 0:05:33.920 of an opener for the rest of the big banks too. 0:05:33.960 --> 0:05:35.800 We're gonna get here from what city group we've got, 0:05:35.839 --> 0:05:38.640 what Bank of America we've got Wales, UM, tell us 0:05:38.640 --> 0:05:42.240 what you're watching out for. So with city group UM, 0:05:42.360 --> 0:05:46.279 they had actually already got into a higher expenses for 0:05:46.320 --> 0:05:49.360 this particular quarter. We're going to be listening to see 0:05:49.400 --> 0:05:51.480 what the guidance is for the full year. We think 0:05:51.520 --> 0:05:53.760 the expense story there is a little bit more negative 0:05:53.880 --> 0:05:56.120 because a lot of the driver there is that they 0:05:56.160 --> 0:05:59.279 have to spend more UM to get sort of their 0:06:00.000 --> 0:06:03.760 systems and compliance, so they have some regulatory concerns and issues, 0:06:03.800 --> 0:06:08.160 So that UM expense spending where it's not generating revenue 0:06:08.200 --> 0:06:10.400 is a little bit less positive to us, but that 0:06:10.400 --> 0:06:13.520 that's the main thing we're looking for them. Bank America similarly, 0:06:13.560 --> 0:06:16.520 they last quarter guided up expenses for the full year, 0:06:17.160 --> 0:06:20.000 whilst Fargo already has had out of it expenses. We're 0:06:20.000 --> 0:06:22.760 hoping them to come down. For all those banks, we're 0:06:22.760 --> 0:06:25.479 going to be looking in terms of again what is 0:06:25.480 --> 0:06:28.520 the loan growth outlook, what is the nut interesting some outlook, 0:06:28.760 --> 0:06:31.240 and then one thing we didn't touch on quickly, prime 0:06:31.279 --> 0:06:35.760 brokerage business very strong. Will Bank America and City Group 0:06:35.880 --> 0:06:38.479 also show some strength. They're gaining some share in the 0:06:38.480 --> 0:06:41.040 week of start see is pulled back. You did it. 0:06:41.120 --> 0:06:43.960 You cover the universe. You're incredible, Alison, Thank you, thank you. 0:06:44.000 --> 0:06:47.120 Bloomberg Intelligence Senior Global Banks analyst, Allison Williams. This is 0:06:47.120 --> 0:06:49.240 a busy week for her. We know that she's joining 0:06:49.320 --> 0:06:53.960 us on the phone and now earning is often running. 0:06:54.040 --> 0:06:56.400 This is Bloomberg. This story among our most read on 0:06:56.440 --> 0:07:00.240 the Bloomberg about Barry Stern Licks investment firm and given 0:07:00.320 --> 0:07:02.400 up on malls. Yes, Starward Capital Group they owned a 0:07:02.480 --> 0:07:05.160 thirty mills before the COVID nineteen pandemic. It is now 0:07:05.480 --> 0:07:08.440 down to eight. That is a massive decline. Yeah, so 0:07:08.520 --> 0:07:10.360 let's find out what's going on. John Getleson is it 0:07:10.400 --> 0:07:12.600 with us real Estate and Investing Report at Bloomberg News 0:07:12.600 --> 0:07:14.520 on the phone in l a Hey, John, nice to 0:07:14.560 --> 0:07:16.360 have you here with Tim and me. First of all, 0:07:16.560 --> 0:07:19.080 I mean Barrastone looks really well known to our audience. 0:07:19.120 --> 0:07:21.000 I mean this is a guy who is big time 0:07:21.040 --> 0:07:25.160 in different types of commercial real estate. That's right, Yeah, 0:07:25.200 --> 0:07:29.440 I mean Starwood Hotels now part of Marriott anyway, that 0:07:29.520 --> 0:07:34.280 was his original you know, branding opportunity. Um. But yeah, 0:07:34.280 --> 0:07:37.840 he started out and distressed real estate, and uh around 0:07:37.920 --> 0:07:42.800 twelve he started buying up malls. He thought, you know, 0:07:42.960 --> 0:07:44.680 I can get a good deal on these and I 0:07:44.720 --> 0:07:49.120 could make money on him. Uh. But basically the market 0:07:49.160 --> 0:07:51.760 was changing fast and then COVID hit and things got 0:07:51.800 --> 0:07:55.480 even worse. So he got caught basically underwater with a 0:07:55.520 --> 0:07:59.160 lot of these properties, and rather than pay and try 0:07:59.160 --> 0:08:01.600 and revive them, it didn't make sense to him. It 0:08:01.680 --> 0:08:05.200 made more sense essentially, self for loss or walk away 0:08:05.720 --> 0:08:08.400 and look, two billion dollars sounds like a lot of 0:08:08.400 --> 0:08:10.680 money to for most things. But this is a relatively 0:08:10.680 --> 0:08:15.680 small part of star Wars portfolio, right, Well, yeah, I 0:08:15.680 --> 0:08:20.160 mean about five of Star Wars portfolio was in what 0:08:20.200 --> 0:08:25.120 it was is known as Starwood Retail Partners, So um, yeah, 0:08:25.120 --> 0:08:28.520 it's it's I mean, imagine your stock portfolio and you 0:08:28.600 --> 0:08:30.640 have a bunch of companies that you're like, I'm just 0:08:30.680 --> 0:08:33.680 going to get rid of them and focus my energy 0:08:34.080 --> 0:08:38.640 my resources on other opportunities out there that have more upside. 0:08:38.880 --> 0:08:40.880 It's a lot of work to deal with these malls. 0:08:41.160 --> 0:08:45.240 If you want to redevelop them, you take time, patient 0:08:45.440 --> 0:08:48.559 skill sets that maybe, if I'm very stern lick, I'd 0:08:48.640 --> 0:08:50.640 rather be spending my time on something that I can 0:08:50.720 --> 0:08:53.760 make money on faster. Is this someone who's cutting their 0:08:53.840 --> 0:08:56.720 losses before they get worse? Like seeing the writing on 0:08:56.760 --> 0:08:58.880 the wall. Let me think what other little cool phrases, 0:08:58.880 --> 0:09:00.920 pity phrases. Can I say, but you know what I'm saying, 0:09:00.960 --> 0:09:05.000 like saying, this is just not a good commercial space anymore. 0:09:05.040 --> 0:09:09.280 And does it speak to a bigger larger story here, John, Well, 0:09:09.320 --> 0:09:11.560 it's definitely a bigger larger story. I mean we've all 0:09:11.600 --> 0:09:16.760 seen ghost malls have been developing for decades now, um, 0:09:16.880 --> 0:09:21.160 and it's accelerated since COVID, since you know, e commerce, 0:09:21.760 --> 0:09:25.640 um and and since shopping habits changed, Like Carol you 0:09:25.640 --> 0:09:27.360 were saying earlier, you haven't been to a mall in 0:09:27.360 --> 0:09:31.600 a while. Malls were built around department stores, and department 0:09:31.679 --> 0:09:36.239 stores are like the biggest casualties you know of shoppers 0:09:36.520 --> 0:09:40.880 who can go to Amazon or go to Walmart and 0:09:41.200 --> 0:09:42.920 all those other kind of things. But John, I do 0:09:42.960 --> 0:09:44.920 you always wonder and forgive me because I do feel 0:09:44.920 --> 0:09:47.320 like the coasts, you know, especially in New York, were like, 0:09:47.720 --> 0:09:50.880 all right, I'm just shop online constantly. But if I 0:09:50.920 --> 0:09:53.840 go across the country and I've been in different states 0:09:54.080 --> 0:09:56.040 where I'm traveling and you do go to a mall 0:09:56.160 --> 0:09:58.200 or you have to go to a store for like 0:09:58.280 --> 0:10:01.400 you just you shop different? Is that true the case? 0:10:01.440 --> 0:10:03.760 I just don't want to be so East Coast centric 0:10:04.520 --> 0:10:06.760 or is it? I mean, yeah, are they breaking down 0:10:06.840 --> 0:10:10.000 kind of all over the country. I would say it's 0:10:10.040 --> 0:10:12.400 all over the country. I mean because these malls that 0:10:12.720 --> 0:10:15.679 Barry Sternly gones, they're sort of like secondary malls and 0:10:15.800 --> 0:10:19.760 secondary markets. If you have a good mall. I live 0:10:19.840 --> 0:10:26.800 in southern California, in Beverly Hills, UH in Orange County, 0:10:27.200 --> 0:10:29.520 UH in the right parts of you know, the San 0:10:29.520 --> 0:10:33.880 Francisco Bay Area, Silicon Valley outside Seattle. Those those are 0:10:33.880 --> 0:10:36.720 doing great and people are still going to them, and 0:10:36.760 --> 0:10:41.520 they're now eating outside, They're going to movies, they're starting 0:10:41.559 --> 0:10:43.440 to do all of the other kind of activities on 0:10:43.520 --> 0:10:46.120 top of buying clothes that used to do it a mall, 0:10:46.600 --> 0:10:50.480 but there's so many malls in the United States. We 0:10:50.559 --> 0:10:55.040 are overstored, over retailed compared everywhere else and on Earth's 0:10:55.559 --> 0:10:57.439 And then there are places that are really easy to 0:10:57.440 --> 0:11:00.640 get to. I mean a Walmart or It's Target is 0:11:00.679 --> 0:11:03.400 like a mall in one place for a lot of people, 0:11:03.640 --> 0:11:08.560 and they're really you know, discount good prices and easy 0:11:08.640 --> 0:11:11.080 and easy out. Hey, John, just in the last thirty 0:11:11.080 --> 0:11:13.439 seconds we have with you, who's buying these malls and 0:11:13.679 --> 0:11:18.280 what are they doing with them? Well, basically, people who 0:11:18.360 --> 0:11:21.200 are getting them are getting them at very low cost, 0:11:21.679 --> 0:11:25.120 And it really depends on the location. You can take 0:11:25.160 --> 0:11:28.240 out a department store, turn it into an apartment, You 0:11:28.280 --> 0:11:31.040 can turn it into maybe an office. You can turn 0:11:31.080 --> 0:11:34.640 it into a medical office or a school, or you 0:11:34.640 --> 0:11:38.040 could turn it into a sort of last mild distribution place. 0:11:38.520 --> 0:11:41.560 But you have to get the cost of the property 0:11:41.640 --> 0:11:46.840 down and an owner who has patient money so that 0:11:46.920 --> 0:11:49.200 they could take time because it takes a long time 0:11:49.720 --> 0:11:52.760 to get all the approvals that are involved with re 0:11:53.640 --> 0:11:56.800 purposing a mall like this, right, It's it's not so 0:11:56.880 --> 0:11:58.720 easy to just make a quick quick stetch. What what 0:11:58.760 --> 0:12:01.080 are you thinking? Yeah, it's just like such a small 0:12:01.080 --> 0:12:04.040 portion of the portfolio, It's crazy. Yeah, And I do 0:12:04.080 --> 0:12:06.719 think there's something to be like top tier versus secondary tier. 0:12:06.720 --> 0:12:08.840 I think that's a good point that John made. Um 0:12:08.920 --> 0:12:11.160 John kittleson Thank You so Much, real estate and investing 0:12:11.160 --> 0:12:13.800 reporter at Bloomberg News from l A, joined him on 0:12:13.840 --> 0:12:18.880 Twitter at John gitt This is Bloomberg Business Week with 0:12:19.000 --> 0:12:23.720 Carol Messer and Bloomberg Quick Takes. Tim Stinovich from Bloomberg Radio. 0:12:23.960 --> 0:12:25.959 We are highlighting another one of our most read stories 0:12:25.960 --> 0:12:29.040 on the Bloomberg Today, This one about the NFL player 0:12:29.080 --> 0:12:32.199 turn lawmaker that was a rising star in the Republican 0:12:32.240 --> 0:12:35.200 Party tim until he wasn't. It's in the upcoming issue 0:12:35.200 --> 0:12:37.840 of the magazine. It's written by Josh Green, National correspondent 0:12:37.840 --> 0:12:40.360 for Bloomberg Business Week. Joel Weber is joining us as 0:12:40.400 --> 0:12:42.800 well editor for Bloomberg Business Leeak. He's with us in 0:12:42.800 --> 0:12:45.319 the Interactive Broker studio in New York. Josh is joining 0:12:45.400 --> 0:12:49.720 us on the phone from Washington. D c Um, who 0:12:49.880 --> 0:12:55.400 is Anthony Gonzolison? Why why isn't he a national name? Well, 0:12:55.480 --> 0:12:58.800 he is a national name, I think, um, And I 0:12:58.800 --> 0:13:01.480 guess it's well, I guess in the Cheney I guess 0:13:01.480 --> 0:13:04.640 I would say, well, he's he's actually kind of purposely 0:13:04.760 --> 0:13:08.640 kept his profile slightly lower, I think, than than Cheney did. 0:13:08.679 --> 0:13:12.120 And you know, Cheney obviously it's like pretty prominent position 0:13:12.240 --> 0:13:15.120 in the GOP. But I think what's really interesting about 0:13:15.160 --> 0:13:21.600 Josh's story is there were people pre January six who 0:13:21.679 --> 0:13:23.760 who really kind of looked like the future of the 0:13:24.040 --> 0:13:27.079 of the GOP right, and and Gonzalez was one of those. 0:13:27.559 --> 0:13:31.520 And now he finds himself in a very difficult role 0:13:31.760 --> 0:13:35.840 of being a kind of once future leader of GOP, 0:13:36.000 --> 0:13:40.400 potentially a rising star, but mired by what has become 0:13:40.520 --> 0:13:46.040 from the Trump Um supporting GOP. Uh and and Josh's 0:13:46.080 --> 0:13:48.280 brtting you in a little bit to talk about that. 0:13:48.320 --> 0:13:51.920 What what has been his his tactic to date and 0:13:51.920 --> 0:13:55.920 and how does that put him um with his constituents, 0:13:56.640 --> 0:13:58.720 you know, I mean, what's passing about Gonzalez is that 0:13:58.840 --> 0:14:02.600 he is every he embodies everything the Republican Party has 0:14:02.640 --> 0:14:05.800 wanted itself to be for the last twenty five years. Uh, 0:14:05.800 --> 0:14:09.040 he's young, he has the son of a Cuban immigrant, 0:14:09.160 --> 0:14:11.720 he was the first round draft pick of the Indianpolis 0:14:11.800 --> 0:14:14.760 called he's got a business school degree, you know, serious 0:14:14.840 --> 0:14:17.640 young hip, all that kind of stuff. Clearly marked as 0:14:17.679 --> 0:14:20.360 a rising star. And then Trump came along and and 0:14:20.440 --> 0:14:23.120 Gonzalez became one of the ten people who had voted 0:14:23.200 --> 0:14:26.880 who voted to impeach him, and practically overnight, that's sort 0:14:26.880 --> 0:14:30.320 of eclipsed everything else there is about Anthony Gonzalez and 0:14:30.360 --> 0:14:33.680 the reason I picked this race as as somebody said earlier, 0:14:33.800 --> 0:14:36.560 he's not as prominent as Liz Cheney, who also voted 0:14:36.560 --> 0:14:38.640 doing peach Trump and has made that the entire like 0:14:38.800 --> 0:14:41.880 centerpiece of her political life. Uh, he's just a guy 0:14:41.920 --> 0:14:44.840 who who voted on his conscious voted in peach Trump, 0:14:45.160 --> 0:14:47.920 but is still a conservative congressman with what he thinks 0:14:48.000 --> 0:14:50.640 of a successful record. So what it sets up is 0:14:50.680 --> 0:14:54.560 this wonderful test case. It's almost like a laboratory experiment 0:14:54.800 --> 0:15:00.280 in whether a serious Republican conservative can get reelected after 0:15:00.360 --> 0:15:03.600 voting for Donald Trump. And and what what's so interesting 0:15:03.640 --> 0:15:06.160 about this is that it's not just Republicans. The Democrats 0:15:06.200 --> 0:15:10.040 too are fascinated by this race because we think it's 0:15:10.080 --> 0:15:12.040 going to be a sort of a gauge about how 0:15:12.240 --> 0:15:16.400 strong Trump's influence continues to be. One of my consultants, 0:15:16.440 --> 0:15:19.720 i quote in Peace, likened it to groundhog Day. That 0:15:19.800 --> 0:15:23.840 you know, if if if the Trump challenger to Gonzalez's wins, 0:15:23.880 --> 0:15:26.000 then we know it's gonna be another season of Trump 0:15:26.040 --> 0:15:30.360 dominating Republican Party. But if Gonzalez manages to hold onto 0:15:30.360 --> 0:15:33.360 his seat, then maybe spring has arrived and we've begun 0:15:33.400 --> 0:15:37.320 to move beyond Donald Trump and who's he gonna be 0:15:37.320 --> 0:15:41.160 in a showdown with who's the lukie at their faces? 0:15:41.200 --> 0:15:43.840 So his main challenge has got named Max Miller, who 0:15:43.960 --> 0:15:47.360 is a former Trump aide um from the local area. 0:15:48.000 --> 0:15:50.880 Immediately one Trump's endorsement as soon as he jumped in 0:15:50.920 --> 0:15:54.600 the race. Because Trump, as we all know, revels in 0:15:54.720 --> 0:15:59.440 punishing his enemies, especially Republicans, and has gone after Gonzalez 0:15:59.520 --> 0:16:04.200 with Avenger. It's his first big rally. Trump's post election. 0:16:04.240 --> 0:16:07.200 At the end of June, he flew to Ohio, right 0:16:07.240 --> 0:16:10.880 outside gonzalez district to trash him and tell Republicans to 0:16:11.000 --> 0:16:13.240 vote against him. So that's a bit of a millstone 0:16:13.280 --> 0:16:15.840 if you're a Republican congressman running for re election. But 0:16:15.920 --> 0:16:18.440 that's what Gonzalez has to deal with. I love that 0:16:18.520 --> 0:16:21.800 you write in your story that he Gonzalez appears to 0:16:21.840 --> 0:16:25.320 have a healthy relationship with his own political mortality. So 0:16:25.520 --> 0:16:28.880 he understands. He's a football player. Sometimes you win, sometimes 0:16:28.920 --> 0:16:32.160 you lose. Sometimes you're gonna play and be a star player, 0:16:32.200 --> 0:16:35.400 and sometimes you're gonna have another career after it tell 0:16:35.480 --> 0:16:38.800 us a little bit about his his kind of approach. Yeah, well, 0:16:38.840 --> 0:16:41.240 I mean, what's what's been so I think disconcerting to 0:16:41.360 --> 0:16:43.920 a lot of you know, Republicans and just just sort 0:16:43.920 --> 0:16:47.280 of Americans general. I think is is the the number 0:16:47.320 --> 0:16:50.000 of Republicans who have kind of truckled to Trump and 0:16:50.040 --> 0:16:53.360 gone along with, you know, whatever the conspiracy theory or 0:16:53.400 --> 0:16:56.480 why is that that he's sort of pushing. One name 0:16:56.520 --> 0:17:00.000 that gets mentioned a lot as South Carolina Senator Lindsey Graham, 0:17:00.200 --> 0:17:06.040 who who sort of reinvents himself according to whatever politics necessitates. 0:17:06.080 --> 0:17:09.280 And Gonzalez is adamant that he's not going to do that. Um, 0:17:09.320 --> 0:17:12.000 and I think the impeachment vote backs that up. But 0:17:12.040 --> 0:17:13.199 as he put it to me, I mean, he was 0:17:13.200 --> 0:17:16.600 a first round draft pick with a great NFL career going. Uh, 0:17:16.640 --> 0:17:19.400 he tore up his knee, that that career ended abruptly, 0:17:19.760 --> 0:17:22.320 but he was able to reinvent himself, went to business school, 0:17:22.400 --> 0:17:25.320 got elected as a congressman. So he doesn't fear his 0:17:25.359 --> 0:17:28.320 own political mortality and quite the way I think a 0:17:28.400 --> 0:17:32.040 lot of other UH politicians do, and that makes him interesting. 0:17:32.160 --> 0:17:34.320 He's willing to kind of speak the truth, stand up 0:17:34.320 --> 0:17:36.440 for what he believes in, and let the chips fall 0:17:36.480 --> 0:17:38.359 where they may. You also make the point, Josh, that 0:17:38.400 --> 0:17:41.240 he's set out to do and he's actually getting done 0:17:41.320 --> 0:17:44.240 exactly what he set out to do, from infrastructure to 0:17:44.240 --> 0:17:48.080 to COVID relief, to vaccines. And also he's had a 0:17:48.119 --> 0:17:51.680 pretty good couple of quarters of fundraising, so he's been 0:17:51.680 --> 0:17:54.480 pretty successful thus far. Yeah. I mean the other fast 0:17:54.520 --> 0:17:55.840 thing you think about this is like back in the 0:17:56.040 --> 0:17:58.960 times before Trump, Um, you know, congressman used to get 0:17:58.960 --> 0:18:01.240 measured for re election on hey did you do what 0:18:01.320 --> 0:18:04.080 your campaigned and and said you had set out to do? 0:18:04.200 --> 0:18:07.240 The two two big components of of Gonzalz's last race 0:18:07.280 --> 0:18:09.480 where he said, look, we want to produce vaccine and 0:18:09.520 --> 0:18:12.960 distribute to everybody who wants it. That's obviously happening now. 0:18:13.359 --> 0:18:17.360 And I want to push for a big bipartisan infrastructure bill. Uh. 0:18:17.400 --> 0:18:18.920 You know, and in a couple of weeks ago, Biden 0:18:18.960 --> 0:18:23.040 came out and announced big bipartisan infrastructure agreement the Gonzals 0:18:23.119 --> 0:18:25.720 had had a hand in negotiating. So, you know, by 0:18:25.720 --> 0:18:27.679 the old measure of whether or not you're you're an 0:18:27.720 --> 0:18:30.760 effective congressman, Gonzalas has a really good case to make 0:18:30.840 --> 0:18:33.320 and he is a believer. Not everybody is, but he 0:18:33.440 --> 0:18:36.119 is a believer that that will still count for something 0:18:36.119 --> 0:18:39.600 with the Republican voters when primary time comes next spring. 0:18:40.080 --> 0:18:42.720 So next spring still feels like a long way away. 0:18:43.280 --> 0:18:44.800 When when are we going to start to get a 0:18:44.840 --> 0:18:48.119 sense of what even the polls might suggest in this 0:18:48.160 --> 0:18:50.959 case study, Josh, I don't think we're gonna note for 0:18:51.000 --> 0:18:55.280 a long time. By the early measures Gonzalaz is doing, okay. 0:18:55.359 --> 0:18:58.440 I mean, his favorability ratings are strong, as you mentioned, 0:18:58.480 --> 0:19:01.320 you know, he had He's had two quarters very strong fundraising. 0:19:01.720 --> 0:19:04.560 But he also has the loudest, most important voice in 0:19:04.600 --> 0:19:07.960 the Repulican Party, Donald Trump's going against him. So I 0:19:07.960 --> 0:19:10.520 think part of it will depend, you know, is Trump 0:19:11.040 --> 0:19:14.160 as powerful and influenced, you know, nine months from now 0:19:14.200 --> 0:19:16.800 as he is today. If so, I think Gonzalas is 0:19:16.840 --> 0:19:19.320 gonna have a tough time getting reelected. But a lot 0:19:19.400 --> 0:19:22.560 can happen between now and then, and Gonzalas has enough 0:19:22.600 --> 0:19:24.880 money to make a good case for himself publicly. So 0:19:25.160 --> 0:19:26.640 you know, we're going to get just what I said, 0:19:26.640 --> 0:19:28.040 We're going to get into this piece, which is a 0:19:28.080 --> 0:19:31.000 measure of Trump's effectiveness. Um. And I think that's why 0:19:31.040 --> 0:19:32.720 everybody in the country is gonna be looking at this 0:19:32.840 --> 0:19:34.760 race come next spring. Yeah. I did also think, as 0:19:34.760 --> 0:19:37.560 you pointed out, that it's he's had some strong fundraising 0:19:37.600 --> 0:19:39.240 kind of the strongest that he's ever seen, and maybe 0:19:39.280 --> 0:19:41.679 it's an early indication. Hey, Josh, thank you so much. 0:19:41.800 --> 0:19:44.080 Josh Green, National correspondent, Bloomberg Business Week on the phone 0:19:44.080 --> 0:19:47.040 from Washington, d C. Joel Da have a last thought. Well, 0:19:47.080 --> 0:19:49.840 I'm also you know, this is one of many races 0:19:49.880 --> 0:19:54.160 where there were people who voted again for impeachment, and 0:19:54.680 --> 0:19:56.359 I just am also going to be very curious to 0:19:56.400 --> 0:19:58.880 what happens in all those other districts and do they 0:19:58.880 --> 0:20:01.320 go one way or is it like half and half 0:20:01.400 --> 0:20:03.520 or something? You know, Yeah, it'll be really telling in 0:20:03.600 --> 0:20:05.160 terms of what it means for how much just Trump 0:20:05.240 --> 0:20:08.040 hit the road ahead of that too. Yeah, well, I'm 0:20:08.080 --> 0:20:16.760 guessing a lot. You're listening to Bloomberg Business Week with 0:20:16.840 --> 0:20:21.159 Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg 0:20:21.240 --> 0:20:24.919 Radio on the Wall. I couldn't wait to get to 0:20:25.000 --> 0:20:27.399 our next This is what's so great about having everyone 0:20:27.440 --> 0:20:30.000 come back to work. We can like talk during the breaks. 0:20:30.119 --> 0:20:31.960 I love it all right, so let's get to it. 0:20:32.480 --> 0:20:34.320 She is in our studio with Tim and myself. It's 0:20:34.440 --> 0:20:36.719 one of our most read stories about those that are 0:20:36.720 --> 0:20:39.919 speaking out pushing for more aggressive government policies to address 0:20:39.960 --> 0:20:42.480 societal problems. Let's get more on the X E s 0:20:42.520 --> 0:20:46.200 G insiders who are dissing and dismissing corporate cream goals 0:20:46.240 --> 0:20:49.480 as hype on this story. Bloomberg NEWSSG reporter Sagel Kashan, 0:20:49.600 --> 0:20:51.720 she is with us in our Interactor Broker studio. I 0:20:51.720 --> 0:20:55.119 do love this story, So tell us about the individual. 0:20:55.480 --> 0:20:59.639 Um Tarik Fancy. Yeah, well, he was well in the 0:20:59.680 --> 0:21:01.320 hospital the b so to speak. He should be at 0:21:01.359 --> 0:21:06.040 Black Rock, the world's biggest black cute UM. And as 0:21:06.040 --> 0:21:08.160 you remember last year, Life Fink came out and said 0:21:08.200 --> 0:21:10.000 he was going to put climate at the center of 0:21:10.040 --> 0:21:14.480 its investments and its investment strategy. Um Tarret was actually there. 0:21:14.480 --> 0:21:18.800 He actually left before black really ramped up. But you know, 0:21:19.080 --> 0:21:21.640 he talked about his experiences and it wasn't so much 0:21:21.680 --> 0:21:24.840 about being at Black Rocket. His experiences were more broadly 0:21:25.400 --> 0:21:29.960 directed at the sort of the sustainable investment of investing world. UM. 0:21:30.000 --> 0:21:32.919 And yeah, he talked about how it's great having all 0:21:32.960 --> 0:21:36.320 these like low carbon funds, these climate friendly friends E 0:21:36.400 --> 0:21:39.520 s g. E. T f s and exchange traded funds, 0:21:39.960 --> 0:21:42.200 but they're not really enough to move the needle when 0:21:42.200 --> 0:21:44.960