1 00:00:05,800 --> 00:00:08,720 Speaker 1: Welcome to the Bloomberg P and L Podcast. I'm Pim Fox. 2 00:00:08,760 --> 00:00:11,440 Speaker 1: Along with my co host Lisa A. Bramowitz. Each day 3 00:00:11,480 --> 00:00:15,000 Speaker 1: we bring you the most important, noteworthy, and useful interviews 4 00:00:15,040 --> 00:00:17,520 Speaker 1: for you and your money, whether you're at the grocery 5 00:00:17,560 --> 00:00:20,560 Speaker 1: store or the trading floor. Find the Bloomberg P and 6 00:00:20,680 --> 00:00:32,680 Speaker 1: L Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. 7 00:00:32,680 --> 00:00:35,800 Speaker 1: Looking to prepay those property taxes as a result of 8 00:00:35,880 --> 00:00:39,199 Speaker 1: changes in the tax overhaul plan, Tim Space's partner in 9 00:00:39,320 --> 00:00:43,040 Speaker 1: charge of Eisner Emperor's Personal Wealth Advisors Group, he joins 10 00:00:43,120 --> 00:00:44,960 Speaker 1: us now, Tim, thanks very much for being with us. 11 00:00:44,960 --> 00:00:46,760 Speaker 1: I guess you've got a lot of people waiting on 12 00:00:46,880 --> 00:00:49,239 Speaker 1: hold calling you to ask how do you do this? 13 00:00:49,760 --> 00:00:54,560 Speaker 1: So go ahead tell everybody how do you do this? Well, um, 14 00:00:54,600 --> 00:00:58,000 Speaker 1: if we're in New York, which many of your listeners are, 15 00:00:58,720 --> 00:01:02,400 Speaker 1: many of the minis, totalities and counties have already been 16 00:01:02,720 --> 00:01:06,920 Speaker 1: posting warrants and that's really the magic the trick here. 17 00:01:06,920 --> 00:01:10,399 Speaker 1: Warrants need to be posted on websites for there to 18 00:01:10,480 --> 00:01:14,319 Speaker 1: be posted a liability, and that needs to happen in 19 00:01:14,440 --> 00:01:19,399 Speaker 1: order for taxpayers to first pay taxes this month, but 20 00:01:19,480 --> 00:01:22,280 Speaker 1: then have it recognized as a bona fide payment and 21 00:01:22,440 --> 00:01:25,319 Speaker 1: uh either a shortlist of county than where they are 22 00:01:25,360 --> 00:01:27,479 Speaker 1: with respect to this in New York, I mean Westchester 23 00:01:27,600 --> 00:01:30,320 Speaker 1: is an outlier. At the moment, west Chester is asserting 24 00:01:30,360 --> 00:01:32,039 Speaker 1: they don't have time to do it. But with the 25 00:01:32,040 --> 00:01:35,360 Speaker 1: executive order last week, that's exactly what the governor wants 26 00:01:35,400 --> 00:01:38,680 Speaker 1: them to do. The executive order state of Emergency was 27 00:01:38,720 --> 00:01:42,720 Speaker 1: intended to have those miss Cotton counties post those warrants. Now, 28 00:01:42,720 --> 00:01:46,640 Speaker 1: when you say post those warrants, are those warrants general 29 00:01:46,760 --> 00:01:50,760 Speaker 1: in nature or are they then somehow made specific to 30 00:01:50,800 --> 00:01:56,040 Speaker 1: the individual taxpayer? The ladder the ladder pen they made there, 31 00:01:55,880 --> 00:01:58,200 Speaker 1: they're the actual bill you know that you and I 32 00:01:58,240 --> 00:02:02,560 Speaker 1: would would use and receive. Now you know what the 33 00:02:02,600 --> 00:02:06,480 Speaker 1: discussions we're having now is call them in the musicality, 34 00:02:07,160 --> 00:02:12,000 Speaker 1: try to establish what your liability is. Call your mortgage holder. 35 00:02:12,120 --> 00:02:14,840 Speaker 1: They might have they might actually have notice of the 36 00:02:14,919 --> 00:02:17,680 Speaker 1: warrant sent to them. They might have in their possession already. 37 00:02:18,320 --> 00:02:21,320 Speaker 1: So those are things to to really be doing. I 38 00:02:21,320 --> 00:02:24,720 Speaker 1: would imagine, well, I shouldn't say that, but is it 39 00:02:24,760 --> 00:02:28,800 Speaker 1: possible that this is easier said than done? Because it 40 00:02:29,040 --> 00:02:33,520 Speaker 1: is also important where the money comes from in order 41 00:02:33,760 --> 00:02:38,440 Speaker 1: to prepay these taxes. Correct, correct, so as many of 42 00:02:38,520 --> 00:02:42,920 Speaker 1: us No, I mean as homeowners, we oftentimes make the 43 00:02:42,919 --> 00:02:45,480 Speaker 1: payment through the mortgage payment and that's that's held in 44 00:02:45,480 --> 00:02:49,000 Speaker 1: this crow directly by the mortgage company. Which is why 45 00:02:49,080 --> 00:02:51,840 Speaker 1: you know, I we are proposing that that's another route. 46 00:02:52,240 --> 00:02:56,720 Speaker 1: So um yeah, I mean you can contact the municipality 47 00:02:56,720 --> 00:02:59,000 Speaker 1: for the warrant. Remember that if the warrant exists, it 48 00:02:59,040 --> 00:03:01,639 Speaker 1: would have already been issued also to the mortgage holder. 49 00:03:02,440 --> 00:03:05,919 Speaker 1: So the issue the matter is trying to determine where 50 00:03:05,960 --> 00:03:10,640 Speaker 1: you send in the check, so it's your proper, proper payment, right, 51 00:03:10,680 --> 00:03:12,760 Speaker 1: And when I get getting out in terms of where 52 00:03:12,760 --> 00:03:14,840 Speaker 1: the money comes from, it has to do. For example, 53 00:03:14,919 --> 00:03:18,600 Speaker 1: if you are a joint filer, if the money does 54 00:03:18,680 --> 00:03:25,280 Speaker 1: not come from a joint account, that could be an issue. Um, 55 00:03:25,880 --> 00:03:29,760 Speaker 1: I personally don't think so. I mean, if you're talking 56 00:03:29,800 --> 00:03:32,680 Speaker 1: about a joint account holder, the most simple one, husband 57 00:03:32,680 --> 00:03:36,839 Speaker 1: and wife. If I make the payment, um sure it's 58 00:03:36,920 --> 00:03:40,080 Speaker 1: it's in my spouse's name as well, but that dema payment. 59 00:03:40,080 --> 00:03:43,640 Speaker 1: We're jointly liable. Um. You know the funds. The funds 60 00:03:43,680 --> 00:03:46,400 Speaker 1: are rather fungible in that regard, right, but I'm saying 61 00:03:46,400 --> 00:03:52,880 Speaker 1: if the funds exist in a single payer account, right, yes, yeah, okay, 62 00:03:53,160 --> 00:03:56,520 Speaker 1: yeah yeah. I mean if it's a single payer account 63 00:03:56,760 --> 00:04:00,400 Speaker 1: and that single payer is the mortgage holders, that's I 64 00:04:00,440 --> 00:04:02,400 Speaker 1: believe it. Where you're going with this is where your 65 00:04:02,400 --> 00:04:05,320 Speaker 1: example is going to be is going to be critical. Right. 66 00:04:05,520 --> 00:04:07,200 Speaker 1: It has to be the same person, has to be 67 00:04:07,240 --> 00:04:09,520 Speaker 1: the same person. In other words, if you are not 68 00:04:09,600 --> 00:04:12,240 Speaker 1: the mortgage holder, if it's held in a third party 69 00:04:12,320 --> 00:04:14,480 Speaker 1: name or in the name of a spouse, many people 70 00:04:14,520 --> 00:04:17,240 Speaker 1: for tax planning purposes, they might have already moved it 71 00:04:17,240 --> 00:04:20,360 Speaker 1: into someone else's name. Uh, the money has to come 72 00:04:20,400 --> 00:04:25,800 Speaker 1: from that same named to count. Correct. Do you foresee 73 00:04:25,880 --> 00:04:31,080 Speaker 1: this being a bigger issue in from people who tried 74 00:04:31,120 --> 00:04:35,040 Speaker 1: to pay, thought they paid and aren't going to get 75 00:04:35,080 --> 00:04:38,719 Speaker 1: the full deduction because in many cases you're gonna get 76 00:04:38,760 --> 00:04:44,279 Speaker 1: that warrant or that bill once again in that's that's correct. 77 00:04:44,760 --> 00:04:49,000 Speaker 1: We could foresee that that kind of confusion. Now for 78 00:04:49,160 --> 00:04:52,240 Speaker 1: many many of our clients, we get involved in these matters, 79 00:04:52,279 --> 00:04:55,320 Speaker 1: you know, to our our family office practice or so forth. 80 00:04:55,360 --> 00:05:01,359 Speaker 1: So so matching up payments absolutely, um, having discussions about 81 00:05:01,360 --> 00:05:06,480 Speaker 1: payments that were made weren't credited properly. Absolutely, they'll they'll 82 00:05:06,520 --> 00:05:09,480 Speaker 1: be there'll be a number of discussions around this and 83 00:05:09,640 --> 00:05:12,080 Speaker 1: and you're right, I mean the rest of the week 84 00:05:12,360 --> 00:05:14,560 Speaker 1: it's going to be a state of flux in in 85 00:05:14,720 --> 00:05:17,440 Speaker 1: first knowing that there's the lives of those has been 86 00:05:17,480 --> 00:05:20,080 Speaker 1: posted and getting it to the right recipient, whether that's 87 00:05:20,120 --> 00:05:23,440 Speaker 1: Nescrow account, the mortgage company, the actual innicipality. All of 88 00:05:23,480 --> 00:05:25,400 Speaker 1: that will be going on. And yes, many things will 89 00:05:25,440 --> 00:05:27,599 Speaker 1: be sorted out or have to be sorted out into 90 00:05:27,680 --> 00:05:30,839 Speaker 1: one of eighteen. Is it also the case that if 91 00:05:30,960 --> 00:05:33,520 Speaker 1: you are, let's say, in an apartment house or a 92 00:05:33,560 --> 00:05:38,600 Speaker 1: condominium coop or whatever, that because those taxes typically are 93 00:05:38,680 --> 00:05:43,760 Speaker 1: paid on a monthly basis, and they are paid from 94 00:05:43,800 --> 00:05:46,920 Speaker 1: one corporation to another. In other words, the managing agent 95 00:05:46,920 --> 00:05:51,200 Speaker 1: would pay the property tax. Uh, that it can be 96 00:05:51,240 --> 00:05:54,039 Speaker 1: a challenge to even find out how much is the 97 00:05:54,080 --> 00:06:00,200 Speaker 1: property tax. All that that's correct as well, we've been 98 00:06:00,520 --> 00:06:04,039 Speaker 1: we've been receiving emails and responding to just those things 99 00:06:04,080 --> 00:06:08,960 Speaker 1: with co op boards this week. From a practical perspective, 100 00:06:09,600 --> 00:06:13,480 Speaker 1: a co op board, if if if the seven team 101 00:06:13,640 --> 00:06:16,440 Speaker 1: monthly bills as you're pointing out, are going to be 102 00:06:16,520 --> 00:06:18,880 Speaker 1: fairly the same as twenty eight team. It actually might 103 00:06:18,920 --> 00:06:22,839 Speaker 1: be more might be easier to send checks. In this case, 104 00:06:22,880 --> 00:06:24,680 Speaker 1: you're talking about a co op board co op where 105 00:06:24,720 --> 00:06:29,480 Speaker 1: we would have a treasurer homeowners, unit holders and could 106 00:06:29,520 --> 00:06:33,080 Speaker 1: cut checks to that individual persons the treasurer. That actually 107 00:06:33,160 --> 00:06:36,880 Speaker 1: might be the more easy scenario. But but paying twelve 108 00:06:36,880 --> 00:06:40,880 Speaker 1: months in advance could also be allowed because it's the 109 00:06:41,000 --> 00:06:44,440 Speaker 1: fix the terminal liability. It's under the agreement with the 110 00:06:44,480 --> 00:06:47,080 Speaker 1: co op and the resident. You know that's that's a 111 00:06:47,120 --> 00:06:51,200 Speaker 1: bona fide debt, that's an obligation. It is no now 112 00:06:51,279 --> 00:06:54,200 Speaker 1: you could pay that in December and have a taxi duction. 113 00:06:54,720 --> 00:06:56,200 Speaker 1: I have a feeling you're going to be busy for 114 00:06:56,240 --> 00:06:58,640 Speaker 1: the rest of the week, if not for the rest 115 00:06:58,800 --> 00:07:02,840 Speaker 1: of If it was just a week, then it would 116 00:07:02,880 --> 00:07:08,360 Speaker 1: be fine. Indeed, it is always taxes. Thanks very much. 117 00:07:08,560 --> 00:07:12,200 Speaker 1: Tim Space's partner in charge of Personal Wealth Advisors Group 118 00:07:12,240 --> 00:07:14,480 Speaker 1: for Eisner Emperor, and of course you can follow them 119 00:07:15,560 --> 00:07:18,520 Speaker 1: on Twitter at eisener amper telling us about how to 120 00:07:19,160 --> 00:07:41,000 Speaker 1: attempt to prepay your property taxes for that deduction. The 121 00:07:41,120 --> 00:07:43,960 Speaker 1: US dollar has had the worst year in more than 122 00:07:44,120 --> 00:07:46,880 Speaker 1: a decade, so the question then becomes what's going to 123 00:07:47,000 --> 00:07:49,960 Speaker 1: happen next year. Here to help us answer this question 124 00:07:50,280 --> 00:07:53,960 Speaker 1: is Land and New in our FX reporter for Bloomberg News. 125 00:07:54,000 --> 00:07:56,040 Speaker 1: She joins me here in our eleven three oh studio. 126 00:07:56,680 --> 00:07:59,440 Speaker 1: Thanks very much for being here. Let's start off with 127 00:07:59,560 --> 00:08:02,520 Speaker 1: the Let's start off in Japan. What is the outlook 128 00:08:02,520 --> 00:08:04,760 Speaker 1: for the Japanese yenn? We're trading around what a hundred 129 00:08:04,800 --> 00:08:07,000 Speaker 1: and thirteen to the dollar right now, Yeah, that's right. 130 00:08:07,040 --> 00:08:09,400 Speaker 1: And it seems like opinions are a little bit more 131 00:08:09,440 --> 00:08:11,640 Speaker 1: divided on the yen. Some people think that the b 132 00:08:11,760 --> 00:08:14,640 Speaker 1: o J might start hinting towards a change in policy 133 00:08:14,680 --> 00:08:16,720 Speaker 1: by the end of next year. Others are saying no, 134 00:08:16,840 --> 00:08:19,760 Speaker 1: they're nowhere near doing that. So opinions are a little 135 00:08:19,760 --> 00:08:21,520 Speaker 1: bit more mixed on the end. I would say we've 136 00:08:21,520 --> 00:08:24,640 Speaker 1: got about not quite half and half bullish bearish. But 137 00:08:24,880 --> 00:08:27,200 Speaker 1: these two. Anybody who talks about the end that they 138 00:08:27,240 --> 00:08:31,880 Speaker 1: still regarded as the risk off trade, that when things 139 00:08:31,920 --> 00:08:35,360 Speaker 1: go badly, you go to the end. Yes, people are 140 00:08:35,360 --> 00:08:37,559 Speaker 1: still talking about the end as a risk off trade, 141 00:08:37,720 --> 00:08:40,600 Speaker 1: but they're more keen to look at whether the bo 142 00:08:40,679 --> 00:08:43,360 Speaker 1: J is going to be changing monetary policy anytime soon. 143 00:08:43,480 --> 00:08:45,800 Speaker 1: And it doesn't look like they're going to change next year, 144 00:08:45,840 --> 00:08:49,120 Speaker 1: but maybe watching for some signals or some cues from 145 00:08:49,120 --> 00:08:51,320 Speaker 1: the boj that that might happen. Well, you provide the 146 00:08:51,320 --> 00:08:55,720 Speaker 1: perfect segue, because signals from the European Central Bank they 147 00:08:55,720 --> 00:08:58,000 Speaker 1: seem to be ahead of the Bank of Japan. There 148 00:08:58,080 --> 00:09:01,720 Speaker 1: is signaling that perhaps this old experiment with quantitative using 149 00:09:01,720 --> 00:09:04,880 Speaker 1: in the purchases of bonds maybe coming to an end 150 00:09:04,880 --> 00:09:06,840 Speaker 1: of the economy is stronger. What's the outlook for the 151 00:09:06,880 --> 00:09:09,480 Speaker 1: euro exactly? And that is what is propping up the 152 00:09:09,520 --> 00:09:12,680 Speaker 1: outlook for the euro. We see the analysts see that 153 00:09:12,800 --> 00:09:15,800 Speaker 1: the euro might rise about one point seven percent next year. 154 00:09:15,840 --> 00:09:18,319 Speaker 1: That's based on a median forecast. And so it seems 155 00:09:18,360 --> 00:09:21,560 Speaker 1: like everyone is really bullish euro and very barished dollar 156 00:09:21,679 --> 00:09:23,800 Speaker 1: next year. So that's kind of been the reversal of 157 00:09:23,800 --> 00:09:26,640 Speaker 1: what we saw in sentiment at the beginning of this year. Right, 158 00:09:26,679 --> 00:09:29,040 Speaker 1: But the dollar did have a terrible year apparently, right 159 00:09:29,040 --> 00:09:31,240 Speaker 1: it did. It got crushed. Um. Dollar bulls are really 160 00:09:31,240 --> 00:09:34,200 Speaker 1: crushed this year. It's down almost eight percent UM and 161 00:09:34,360 --> 00:09:36,800 Speaker 1: all those hopes for a tax reform and infrastructure and 162 00:09:36,840 --> 00:09:39,440 Speaker 1: stimulus in the US kind of been dashed, you know, 163 00:09:39,559 --> 00:09:42,080 Speaker 1: they they the tax reform plan or the tax cuts 164 00:09:42,440 --> 00:09:44,920 Speaker 1: haven't really had that shot in the arm for the 165 00:09:45,000 --> 00:09:48,040 Speaker 1: U s economy that people are expecting. The FED is slowly, 166 00:09:48,080 --> 00:09:51,080 Speaker 1: slowly and gradual, and everything is pretty goldilocks. So there 167 00:09:51,160 --> 00:09:53,160 Speaker 1: isn't that kind of sense of the raging bull in 168 00:09:53,160 --> 00:09:55,920 Speaker 1: the US market anymore. Does anybody find that that's an 169 00:09:55,960 --> 00:09:59,080 Speaker 1: irony when you can get more by investing in a 170 00:09:59,240 --> 00:10:03,320 Speaker 1: US treasure, Ay, then you can investing in just about 171 00:10:03,400 --> 00:10:08,160 Speaker 1: anything else, any other government paper, particularly in Europe, and 172 00:10:08,360 --> 00:10:11,920 Speaker 1: that we haven't seen this big flood of money going 173 00:10:11,960 --> 00:10:15,560 Speaker 1: into the dollar to grab the equity returns that are 174 00:10:15,760 --> 00:10:19,840 Speaker 1: already you know, for the sp sure. I think in 175 00:10:19,880 --> 00:10:22,160 Speaker 1: the foreign exchange market that's kind of a tired story. 176 00:10:22,320 --> 00:10:25,320 Speaker 1: People price that in two years ago or you know, 177 00:10:25,520 --> 00:10:28,560 Speaker 1: last year, and so, uh, those gains that are to 178 00:10:28,600 --> 00:10:30,960 Speaker 1: be had by buying the US dollar have kind of 179 00:10:31,000 --> 00:10:33,080 Speaker 1: dissipated because everyone says, Okay, we know what the FED 180 00:10:33,200 --> 00:10:35,200 Speaker 1: is doing, we know that the US economy is strong, 181 00:10:35,240 --> 00:10:37,520 Speaker 1: but not gonna you know, go through the roof. So 182 00:10:37,880 --> 00:10:40,720 Speaker 1: what's next? I guess long term in the FX market 183 00:10:40,840 --> 00:10:46,040 Speaker 1: is by lunchtime something like that. Alright, a few seconds, well, 184 00:10:46,400 --> 00:10:48,880 Speaker 1: let's you know, this is an outlier, I guess, but 185 00:10:48,920 --> 00:10:54,400 Speaker 1: the Canadian can't even pronounce it today. Scandinavian currency Swedish 186 00:10:54,480 --> 00:10:57,760 Speaker 1: crona Norwegian corona of course, the Norwegian corona linked to 187 00:10:57,920 --> 00:11:04,480 Speaker 1: their oil and uh well they're petro rich economy. What's 188 00:11:04,520 --> 00:11:08,360 Speaker 1: the outlook for Scandinavian currencies. Well, again, these are looking 189 00:11:08,360 --> 00:11:10,840 Speaker 1: pretty good. If you're looking for winners in the G 190 00:11:10,960 --> 00:11:14,440 Speaker 1: ten currencies, the candies are looking pretty nice just because 191 00:11:14,880 --> 00:11:18,679 Speaker 1: their emergency monetary policy settings are no longer needed. We 192 00:11:18,800 --> 00:11:22,559 Speaker 1: got this synchronized global growth. Economies are doing better around 193 00:11:22,600 --> 00:11:25,400 Speaker 1: the world, and so as central banks catch up to 194 00:11:25,440 --> 00:11:28,600 Speaker 1: the US as a central banks start to change policy, 195 00:11:28,679 --> 00:11:32,160 Speaker 1: decide to tighten. People think that these currencies are gonna strengthen. 196 00:11:32,360 --> 00:11:36,600 Speaker 1: But doesn't Sweden have negative interest rates? Sure, and so 197 00:11:36,640 --> 00:11:39,560 Speaker 1: then if negative interest rates are no longer needed, if 198 00:11:39,559 --> 00:11:43,520 Speaker 1: Sweden's economy is doing better. M Dara Mayor from HSBC says, look, 199 00:11:44,280 --> 00:11:47,000 Speaker 1: this emergency setting is not needed anymore, so why are 200 00:11:47,040 --> 00:11:48,800 Speaker 1: they doing it. They've got to change, all right, so 201 00:11:48,840 --> 00:11:51,600 Speaker 1: they in other words, it's all about whether they are 202 00:11:51,679 --> 00:11:54,960 Speaker 1: going to change their policy based on the performance of 203 00:11:55,000 --> 00:11:57,960 Speaker 1: the economy, and that would then speak to a stronger 204 00:11:58,280 --> 00:12:02,400 Speaker 1: Swedish chronup. All right, let's talk about something closer to home, 205 00:12:02,559 --> 00:12:07,280 Speaker 1: and the Canadian dollar, uh really connected to what's going 206 00:12:07,320 --> 00:12:10,559 Speaker 1: on in energy markets. Yes, as you mentioned before with Norway, 207 00:12:10,679 --> 00:12:13,880 Speaker 1: Canada is also a beneficiary of those stronger energy prices. 208 00:12:13,920 --> 00:12:17,600 Speaker 1: So if the energy prices stay around sixty bucks where 209 00:12:17,600 --> 00:12:20,880 Speaker 1: they are right now, Canada does better. Again, the Bank 210 00:12:20,920 --> 00:12:23,800 Speaker 1: of Canada doesn't need to you know, keep rates as 211 00:12:23,800 --> 00:12:25,880 Speaker 1: low as as they are, so it's going to think 212 00:12:25,880 --> 00:12:27,920 Speaker 1: about tightening and the but the estimate was that they 213 00:12:27,960 --> 00:12:30,800 Speaker 1: were going to raise maybe twice next year compared to 214 00:12:30,880 --> 00:12:33,440 Speaker 1: the Federal Reserve, which would be a three time or 215 00:12:33,480 --> 00:12:36,440 Speaker 1: maybe even a four time event. Sure and um, but 216 00:12:37,080 --> 00:12:40,000 Speaker 1: relative to other central banks elsewhere, that's still on the 217 00:12:40,000 --> 00:12:42,520 Speaker 1: active side. That's still on the kind of more firm, 218 00:12:42,600 --> 00:12:45,400 Speaker 1: solid side, So that would be bullish for the currency. 219 00:12:45,920 --> 00:12:48,240 Speaker 1: Medium forecasts are for it to rise about two point 220 00:12:48,280 --> 00:12:51,679 Speaker 1: seven percent, so that's pretty strong. Alright, So things getting 221 00:12:51,679 --> 00:12:54,720 Speaker 1: a little better for the looney. What about the Australian, 222 00:12:54,760 --> 00:12:57,480 Speaker 1: the Aussie dollar and the New Zealand dollar. Again we're 223 00:12:57,480 --> 00:13:00,719 Speaker 1: talking about commodity currencies here, so Australia again is going 224 00:13:00,760 --> 00:13:03,640 Speaker 1: to do better as the commodity complex sort of picks 225 00:13:03,800 --> 00:13:07,439 Speaker 1: up that central bank story again. You know, if the 226 00:13:07,559 --> 00:13:11,480 Speaker 1: r b A doesn't feel those emergency settings are necessary anymore, 227 00:13:11,600 --> 00:13:13,720 Speaker 1: it's going to catch up with the rest of the 228 00:13:13,840 --> 00:13:16,000 Speaker 1: central banks around the world and start to you know, 229 00:13:16,080 --> 00:13:19,720 Speaker 1: lean towards a more tightening posture just so quickly. What's 230 00:13:19,760 --> 00:13:22,680 Speaker 1: the most challenging aspect of covering the FX markets is 231 00:13:22,679 --> 00:13:25,240 Speaker 1: that it changes so quickly. I think it is that 232 00:13:25,320 --> 00:13:27,560 Speaker 1: it changes very quickly. We saw, you know, these kind 233 00:13:27,559 --> 00:13:30,320 Speaker 1: of flash moves in the euro over the Christmas period. 234 00:13:30,679 --> 00:13:32,880 Speaker 1: We can see things move very very fast, and so 235 00:13:32,920 --> 00:13:36,840 Speaker 1: that is pretty challenging, especially around you know, non liquid 236 00:13:36,840 --> 00:13:39,280 Speaker 1: periods like we're talking end of year. You know, a 237 00:13:39,320 --> 00:13:43,079 Speaker 1: little move um can then be exacerbated by a low 238 00:13:43,120 --> 00:13:46,240 Speaker 1: liquid conditions. Thank you very much for coming in, spending 239 00:13:46,240 --> 00:13:48,960 Speaker 1: time with us, and looking forward to much more because 240 00:13:48,960 --> 00:13:51,200 Speaker 1: we didn't even get to the Mexican pace. I would 241 00:13:51,240 --> 00:13:53,600 Speaker 1: like to talk to you about the political story. Yes, indeed, 242 00:13:53,880 --> 00:13:57,280 Speaker 1: Land and New in our FX reporter for Bloomberg News 243 00:13:57,360 --> 00:14:16,960 Speaker 1: much appreciate it. Tobacco sales well, that includes cigarettes but 244 00:14:17,040 --> 00:14:19,840 Speaker 1: also smokeless tobacco and here to help us understand the 245 00:14:19,920 --> 00:14:22,360 Speaker 1: dynamic at work in the industry. Is Ken Say, our 246 00:14:22,440 --> 00:14:27,640 Speaker 1: senior analyst Global Food, Beverages and Tobacco for Bloomberg Intelligence. Ken, 247 00:14:27,680 --> 00:14:30,200 Speaker 1: thanks for being with us. Let's start off by just 248 00:14:30,360 --> 00:14:34,360 Speaker 1: describing the global cigarette market. We'll get the smokeless products 249 00:14:34,360 --> 00:14:37,760 Speaker 1: in a moment. How big is the market, who are 250 00:14:37,800 --> 00:14:41,200 Speaker 1: the leaders and what are the challenges? Yeah, him, I'm 251 00:14:41,200 --> 00:14:44,680 Speaker 1: happy holidays. Thanks for having me aboard here. Okay, We've 252 00:14:44,680 --> 00:14:46,920 Speaker 1: been looking at the global tobacco industry for years, and 253 00:14:47,200 --> 00:14:49,320 Speaker 1: the report we put out the other day is that 254 00:14:49,840 --> 00:14:53,640 Speaker 1: we're getting concerned that this industry is showing a decline 255 00:14:53,720 --> 00:14:56,840 Speaker 1: in cigarette sales after many, many years of increases. It's 256 00:14:56,880 --> 00:14:59,640 Speaker 1: now it could be a reflection point. It's a large 257 00:14:59,640 --> 00:15:03,080 Speaker 1: industry globally, it's about a six eight billion dollars in 258 00:15:03,240 --> 00:15:08,080 Speaker 1: US dollar business. The challenge for these companies, though, it's 259 00:15:08,160 --> 00:15:11,560 Speaker 1: tobacco products sales and it's on the decline. So if 260 00:15:11,600 --> 00:15:14,360 Speaker 1: it's on the decline, what are the tobacco companies doing 261 00:15:14,520 --> 00:15:17,160 Speaker 1: in order to make up for that shortfall? So what 262 00:15:17,200 --> 00:15:19,640 Speaker 1: they've been doing in recent years is investing heavily what 263 00:15:19,680 --> 00:15:22,600 Speaker 1: they what they call next generation products, of which are 264 00:15:22,640 --> 00:15:29,360 Speaker 1: basically noncombustible devices might see noncombustible. Health advocates have for 265 00:15:29,480 --> 00:15:32,360 Speaker 1: a while now stated that it's not the nicotine that 266 00:15:32,400 --> 00:15:36,320 Speaker 1: causes harm, but it's actually the the combustion and the 267 00:15:36,720 --> 00:15:40,440 Speaker 1: smoke that consumers inhale. So the idea is, with the 268 00:15:40,520 --> 00:15:44,080 Speaker 1: FDA and health officials prodding to some degree, Uh, these 269 00:15:44,160 --> 00:15:48,000 Speaker 1: companies are moving to versions where that they have nicotine 270 00:15:48,480 --> 00:15:52,120 Speaker 1: but there don't cause smoke, so they deliver some of 271 00:15:52,160 --> 00:15:56,280 Speaker 1: the satisfaction smokers crave. Uh, these products like e cigarettes, 272 00:15:56,360 --> 00:15:58,480 Speaker 1: and now you're seeing these things called heat not burns, 273 00:15:59,240 --> 00:16:02,360 Speaker 1: which are basically a similar thing except has tobacco and 274 00:16:02,960 --> 00:16:07,400 Speaker 1: instead of nicotine flavored oils. So they're turned into those 275 00:16:07,480 --> 00:16:09,360 Speaker 1: kind of products as well as snuff, which has been 276 00:16:09,400 --> 00:16:13,960 Speaker 1: around a long time, uh smoking tobacco and pipes. Um. 277 00:16:14,600 --> 00:16:17,520 Speaker 1: But collectively they only comprise you know, about ten percent 278 00:16:18,120 --> 00:16:21,240 Speaker 1: of sales. So the idea here is, well, the full 279 00:16:21,360 --> 00:16:26,760 Speaker 1: in cigarette consumption uh outweigh uh the rise in these 280 00:16:26,840 --> 00:16:30,560 Speaker 1: other products which are still small in total. Is the 281 00:16:30,680 --> 00:16:36,200 Speaker 1: market in China really the defining market? It is from 282 00:16:36,760 --> 00:16:40,800 Speaker 1: a total you know, global perspective, I mean China consumed 283 00:16:40,840 --> 00:16:44,880 Speaker 1: over of world cigarettes and so what you're seeing there 284 00:16:45,160 --> 00:16:49,440 Speaker 1: is um a more restrictive policy there in China about 285 00:16:49,920 --> 00:16:53,960 Speaker 1: where smokers can light up. Um, they are you know, 286 00:16:54,440 --> 00:16:59,040 Speaker 1: keeping them have public places, at workplaces and so on, 287 00:16:59,360 --> 00:17:01,160 Speaker 1: because they wreck even I think down the road that 288 00:17:01,320 --> 00:17:04,680 Speaker 1: the health care costs of treating you know, the smoker 289 00:17:04,880 --> 00:17:08,160 Speaker 1: and related harm, there's a real problem on their society. 290 00:17:08,840 --> 00:17:12,560 Speaker 1: So in addition also raising prices, um, you know, the 291 00:17:12,600 --> 00:17:15,760 Speaker 1: condundrum is that the cigarette industry over there, it's it's 292 00:17:15,800 --> 00:17:20,119 Speaker 1: a monopoly. It contributes about ten of tax revenues. So 293 00:17:20,320 --> 00:17:22,399 Speaker 1: they're mindful of that as well. They want to reduce 294 00:17:22,480 --> 00:17:25,080 Speaker 1: smoking in the country, but at the same time, I 295 00:17:25,160 --> 00:17:29,240 Speaker 1: think a manageable reduction is probably ideal for them. Is 296 00:17:29,359 --> 00:17:35,120 Speaker 1: the case similar in Japan where Japan tobacco pays high 297 00:17:35,200 --> 00:17:37,879 Speaker 1: taxes and therefore it becomes, as you say, a kind 298 00:17:37,920 --> 00:17:39,760 Speaker 1: of catch twenty two. You don't want to put them 299 00:17:39,800 --> 00:17:42,399 Speaker 1: out of business because they pay the taxes, yet the 300 00:17:42,640 --> 00:17:46,600 Speaker 1: products that they sell are known to cause cancer. Yeah, 301 00:17:46,680 --> 00:17:49,479 Speaker 1: that's exactly right, and it's actually a big issue right 302 00:17:49,520 --> 00:17:53,800 Speaker 1: now because in Japan. Actually in Japan, sales for cigarettes 303 00:17:53,800 --> 00:17:55,840 Speaker 1: are going to be probably down close a ten percent 304 00:17:55,960 --> 00:17:59,520 Speaker 1: this year and a lot of it is, uh, because 305 00:17:59,600 --> 00:18:02,520 Speaker 1: consumers are moving to what I mentioned before, the heat 306 00:18:02,600 --> 00:18:06,919 Speaker 1: not burn products, so basically non combustible version of cigarettes, 307 00:18:07,520 --> 00:18:10,440 Speaker 1: which Philip Morris International is leading the charge on in 308 00:18:10,600 --> 00:18:13,440 Speaker 1: Japan for that matter. And so what you're seeing is 309 00:18:13,480 --> 00:18:16,520 Speaker 1: a lot of the consumers are moving from conventional cigarettes 310 00:18:16,680 --> 00:18:21,720 Speaker 1: to these devices, and so it's leaving the governments to 311 00:18:21,800 --> 00:18:23,600 Speaker 1: try to figure out what is the appropriate level of 312 00:18:23,680 --> 00:18:27,320 Speaker 1: taxation to put on these noncombustible devices. They want to 313 00:18:27,320 --> 00:18:30,960 Speaker 1: be mindful of, you know, improving societal health, but at 314 00:18:31,000 --> 00:18:33,399 Speaker 1: the same time, they don't want to give up a 315 00:18:33,440 --> 00:18:35,280 Speaker 1: lot of tax revenue. So it's a it's a real 316 00:18:35,359 --> 00:18:39,000 Speaker 1: important issue right now. Is there any evidence that suggests 317 00:18:39,119 --> 00:18:43,000 Speaker 1: that these heat not burn or the vapor products do 318 00:18:43,240 --> 00:18:45,960 Speaker 1: not cause the same kinds of health problems that we 319 00:18:46,080 --> 00:18:51,120 Speaker 1: know come from smoking tobacco. Well, I there's no definitive proof, 320 00:18:51,240 --> 00:18:54,960 Speaker 1: but I think there's a growing body of scientists, um, 321 00:18:57,240 --> 00:19:02,080 Speaker 1: you know, endorsement that these products can certainly improve upon 322 00:19:02,560 --> 00:19:05,840 Speaker 1: conventional cigarettes. Another important issue, you know, is the whole 323 00:19:05,880 --> 00:19:09,000 Speaker 1: notion with the industry experts or industry followers called the 324 00:19:09,160 --> 00:19:12,720 Speaker 1: continuum of risk. Basically, in plain English, that means each 325 00:19:12,880 --> 00:19:16,040 Speaker 1: product has a relative risk associated with it. You know, 326 00:19:16,200 --> 00:19:18,440 Speaker 1: on one end, think of the highest harm, which is 327 00:19:18,480 --> 00:19:22,240 Speaker 1: conventional cigarettes. On the far right, you could think of 328 00:19:22,359 --> 00:19:26,320 Speaker 1: non combustible cigarettes or smoke with tobacco, because there's no combustion. 329 00:19:27,160 --> 00:19:31,080 Speaker 1: And while those latter products are not perfectly safe. Um, 330 00:19:31,720 --> 00:19:37,119 Speaker 1: the idea is that because they could help societal health 331 00:19:37,280 --> 00:19:40,640 Speaker 1: in general, if, if, if consumers gravitate towards them, isn't 332 00:19:40,680 --> 00:19:44,199 Speaker 1: that a good thing? And so some some nations are 333 00:19:44,520 --> 00:19:47,440 Speaker 1: grappling with that issue faster than others. And I would 334 00:19:47,440 --> 00:19:50,320 Speaker 1: get a guess that the combination the the consolidation rather 335 00:19:50,359 --> 00:19:54,640 Speaker 1: than the tobacco industry makes pricing something that they can control. Yeah, 336 00:19:54,680 --> 00:19:57,400 Speaker 1: that's right. You know, you have a market that's controlled 337 00:19:57,480 --> 00:20:01,600 Speaker 1: by essentially three four depending on market you're in producers 338 00:20:01,680 --> 00:20:04,200 Speaker 1: as opposed to you think like a consumer good like 339 00:20:04,320 --> 00:20:07,359 Speaker 1: a breakfast cereals or bakery product or something like that. 340 00:20:08,000 --> 00:20:12,920 Speaker 1: You know, you have more control and support over pricing activity, 341 00:20:13,160 --> 00:20:16,280 Speaker 1: particularly in the US. You know, the top three producers 342 00:20:16,359 --> 00:20:22,040 Speaker 1: control plus market share. They tend to move in tandem, 343 00:20:22,080 --> 00:20:25,440 Speaker 1: not always, but you know, pricing tends to be on 344 00:20:25,560 --> 00:20:29,400 Speaker 1: the rise. You don't see tobacco, cigarette prices falling much. Indeed, 345 00:20:29,600 --> 00:20:32,920 Speaker 1: thanks very much. Ken Shay, Senior analyst for Global Food, 346 00:20:32,960 --> 00:20:51,159 Speaker 1: Beverages and Tobacco for Bloomberg Intelligence. It all began in 347 00:20:51,280 --> 00:20:54,280 Speaker 1: two thousand and three and in two thousand and seven 348 00:20:54,520 --> 00:20:58,120 Speaker 1: the effort next Gen, it's supposed to create the next 349 00:20:58,240 --> 00:21:02,080 Speaker 1: generation air traffic control system for the U. S. Here 350 00:21:02,119 --> 00:21:04,720 Speaker 1: to help us understand this issue and what's next for 351 00:21:04,840 --> 00:21:07,960 Speaker 1: it is Poncho Kinney, former director of Strategy at the 352 00:21:08,040 --> 00:21:11,600 Speaker 1: White House Drug Policy Office and a former policy director 353 00:21:11,640 --> 00:21:14,880 Speaker 1: at the White House Office of Homeland Security. Mr Kenny, 354 00:21:14,920 --> 00:21:17,720 Speaker 1: thanks very much for being with us. Currently, you're at 355 00:21:17,800 --> 00:21:21,160 Speaker 1: the g S i S, the Global Security and Innovative 356 00:21:21,240 --> 00:21:25,960 Speaker 1: Strategies consulting business. What would they say if they were 357 00:21:26,040 --> 00:21:29,640 Speaker 1: presented if if your company, the consulting company, was presented 358 00:21:29,720 --> 00:21:34,320 Speaker 1: with this plan in a kind of clean slate approach, 359 00:21:34,600 --> 00:21:38,920 Speaker 1: would it have really focused on this multi billion dollar 360 00:21:39,080 --> 00:21:43,160 Speaker 1: and more than a decade long project. Well, we would 361 00:21:43,160 --> 00:21:46,680 Speaker 1: say that it's not in the interest of most Americans 362 00:21:46,800 --> 00:21:50,960 Speaker 1: to have a de facto privatization of the air traffic 363 00:21:51,040 --> 00:21:55,359 Speaker 1: control system in the United States. Why is that because 364 00:21:55,400 --> 00:21:59,040 Speaker 1: what would happen is when you have the airlines directing 365 00:21:59,119 --> 00:22:02,720 Speaker 1: investments and air traffic control system. They are going to 366 00:22:03,080 --> 00:22:05,719 Speaker 1: direct the investments where they're going to get the largest 367 00:22:05,800 --> 00:22:09,600 Speaker 1: return under investment, and those are on the larger airports. 368 00:22:09,640 --> 00:22:12,960 Speaker 1: And there's thirty some large hubs in the United States, 369 00:22:13,119 --> 00:22:16,680 Speaker 1: ranging from the busiest Atlanta with fifty million employments, down 370 00:22:16,720 --> 00:22:21,439 Speaker 1: to Portland or PDX, which has approximately nine million employments. 371 00:22:21,760 --> 00:22:25,960 Speaker 1: They're going to direct investment in air traffic control systems 372 00:22:26,400 --> 00:22:29,600 Speaker 1: in those airfields where they fly the greatest number of passengers. 373 00:22:29,680 --> 00:22:32,800 Speaker 1: So this would potentially result in the degrading of the 374 00:22:32,800 --> 00:22:37,480 Speaker 1: air traffic control system at the lesser served airports, smaller 375 00:22:37,520 --> 00:22:39,920 Speaker 1: ones across the United States. All right, well, let's just 376 00:22:40,000 --> 00:22:43,600 Speaker 1: go through some of the portions of this plant next 377 00:22:43,640 --> 00:22:49,000 Speaker 1: generation project. For example, integrated flight planning right allows immediate 378 00:22:49,040 --> 00:22:52,959 Speaker 1: access to weather information through one data source. I mean, 379 00:22:53,119 --> 00:22:56,960 Speaker 1: is that something that don't we already have that? Well, 380 00:22:57,000 --> 00:23:01,639 Speaker 1: I think the next Generation is absolutely ra solid proposal. Uh. 381 00:23:01,880 --> 00:23:04,399 Speaker 1: The point that I wanted to focus on today was 382 00:23:04,560 --> 00:23:09,800 Speaker 1: the proposed privatization of air traffic control system and place 383 00:23:09,920 --> 00:23:13,440 Speaker 1: in and under a private board that's dominated by commercial airlines. 384 00:23:13,480 --> 00:23:16,000 Speaker 1: In fact, what that would do is it would probably 385 00:23:16,080 --> 00:23:19,240 Speaker 1: result in delays of implementation the next gen, which is 386 00:23:19,320 --> 00:23:22,560 Speaker 1: absolutely a good policy. Well, I was just going to 387 00:23:22,840 --> 00:23:25,200 Speaker 1: go through the list only because this is something that 388 00:23:25,280 --> 00:23:29,480 Speaker 1: has been paid for by the taxpayer, whether it's the 389 00:23:29,520 --> 00:23:35,520 Speaker 1: integrated flight planning or departure management, cruise management, the rival management, 390 00:23:35,560 --> 00:23:39,639 Speaker 1: and so on, uh, surface traffic at airports. This is 391 00:23:39,720 --> 00:23:44,199 Speaker 1: all something that was put together by the administration, by 392 00:23:44,240 --> 00:23:47,960 Speaker 1: the Federal Aviation Administration. Why would it Why would you 393 00:23:48,000 --> 00:23:51,159 Speaker 1: want to give private control over something that the public 394 00:23:51,240 --> 00:23:54,399 Speaker 1: has paid for. Well, that's exactly the point. You wouldn't 395 00:23:54,400 --> 00:23:57,240 Speaker 1: want to do that. It just as counterintuitive to do that. 396 00:23:58,040 --> 00:24:00,520 Speaker 1: So this is what an effort on the part of 397 00:24:00,560 --> 00:24:04,760 Speaker 1: the airline industry in order to mold the air traffic 398 00:24:04,840 --> 00:24:08,720 Speaker 1: control system to their liking. I would think that's a 399 00:24:08,800 --> 00:24:11,920 Speaker 1: good way of phasing it. Yes, sir, okay, what's the 400 00:24:12,080 --> 00:24:15,920 Speaker 1: alternative that you foresee, Because let's say that they are 401 00:24:15,960 --> 00:24:19,000 Speaker 1: going to move ahead with this privatization because of current 402 00:24:19,040 --> 00:24:23,560 Speaker 1: political issues. Is there a way to save what's good 403 00:24:23,640 --> 00:24:27,960 Speaker 1: about the old system as well as introducing the new system. Yes, 404 00:24:28,160 --> 00:24:31,080 Speaker 1: there is, and and that is to reauthorize the Federal 405 00:24:31,160 --> 00:24:36,800 Speaker 1: Aviation Administration and enabling it to maintain its role as 406 00:24:36,840 --> 00:24:41,440 Speaker 1: the controller of the national air traffic control system. Explain 407 00:24:41,520 --> 00:24:44,680 Speaker 1: to people why that has not this this, this secure 408 00:24:44,760 --> 00:24:48,440 Speaker 1: and steady and reliable funding source hasn't been granted to 409 00:24:48,600 --> 00:24:53,480 Speaker 1: the f a A and also access for capital to 410 00:24:53,680 --> 00:24:58,720 Speaker 1: do infrastructure projects. What is the current limitation? Well, the limitation, 411 00:24:58,840 --> 00:25:00,840 Speaker 1: first of all, is that the airline have been pushing 412 00:25:00,960 --> 00:25:05,560 Speaker 1: relentlessly to privatize air traffic control. I know that there's 413 00:25:05,600 --> 00:25:08,960 Speaker 1: some that that refer to Washington as a swamp um. 414 00:25:09,359 --> 00:25:12,600 Speaker 1: I won't necessarily agree to that terminology, but I think 415 00:25:12,640 --> 00:25:15,280 Speaker 1: that it is true that there are lobbyists and there 416 00:25:15,320 --> 00:25:20,520 Speaker 1: are individuals and organizations that by access and gain influence 417 00:25:21,040 --> 00:25:25,080 Speaker 1: so that their concerns and their interests are reflected in legislation. 418 00:25:25,680 --> 00:25:27,520 Speaker 1: And that is one of the problems that we face, 419 00:25:27,680 --> 00:25:32,520 Speaker 1: is that the airlines have been relentlessly supporting the privatization 420 00:25:32,880 --> 00:25:36,640 Speaker 1: of air traffic control system. And the House re authorization 421 00:25:36,720 --> 00:25:40,600 Speaker 1: built for the Federal Aviation Administration UH there was championed 422 00:25:40,640 --> 00:25:44,440 Speaker 1: by Representative Schuster, did include the privatization or a traffic 423 00:25:44,440 --> 00:25:49,399 Speaker 1: control system. The Senate bill did not. So what is 424 00:25:49,440 --> 00:25:52,960 Speaker 1: your alternative? What are you gonna do? Well? The alternative 425 00:25:53,040 --> 00:25:57,639 Speaker 1: I think is for communities that stand to lose in 426 00:25:57,760 --> 00:26:01,840 Speaker 1: the privatization, and those would be the communities that that 427 00:26:02,000 --> 00:26:05,959 Speaker 1: have commercial airports, that have small hubs and and non hubs, 428 00:26:06,560 --> 00:26:10,280 Speaker 1: to go to their representatives under senators and say this 429 00:26:10,600 --> 00:26:12,879 Speaker 1: is not in the interests of our communities to have 430 00:26:13,000 --> 00:26:16,800 Speaker 1: this privatization occur. But having said that, I believe that 431 00:26:16,920 --> 00:26:21,040 Speaker 1: the Next Gen Advisory Committee, which was actually formed at 432 00:26:21,080 --> 00:26:25,040 Speaker 1: the request of the f A a UH, it's been 433 00:26:25,440 --> 00:26:30,160 Speaker 1: chaired by an airline CEO since it was created, Well, 434 00:26:30,280 --> 00:26:32,520 Speaker 1: I think that that probably is not a bad thing 435 00:26:32,600 --> 00:26:36,160 Speaker 1: because what it does the results in common sense solutions 436 00:26:36,640 --> 00:26:40,240 Speaker 1: that will enable aircraft control and airspace management to be 437 00:26:40,720 --> 00:26:44,560 Speaker 1: more effective. But when you have a board, a private 438 00:26:44,680 --> 00:26:48,359 Speaker 1: board that's dominated by the commercial airlines, directing investment in 439 00:26:48,440 --> 00:26:52,520 Speaker 1: the aircraft control system as opposed to providing advice on 440 00:26:52,680 --> 00:26:56,560 Speaker 1: modernization and next gen types of solutions, then I think 441 00:26:56,600 --> 00:26:58,879 Speaker 1: you've got another problem right, and that makes it just 442 00:26:59,040 --> 00:27:02,000 Speaker 1: more difficult to implement this because the spending seems to 443 00:27:02,119 --> 00:27:07,080 Speaker 1: be controlled at a very micro level. Isn't that true? Well, 444 00:27:07,280 --> 00:27:10,120 Speaker 1: it could be, and I think that what you'll find. 445 00:27:10,359 --> 00:27:12,680 Speaker 1: What you may find is that the spending will be 446 00:27:12,800 --> 00:27:17,399 Speaker 1: directed towards the larger airports, and so there will be 447 00:27:17,600 --> 00:27:20,560 Speaker 1: winners at the larger level, at the macro level, and 448 00:27:20,680 --> 00:27:24,399 Speaker 1: at the micro level, those hundreds of commercial airliners that 449 00:27:24,480 --> 00:27:28,800 Speaker 1: are vital, whether it's in Fayetteville, North Carolina, or Dothan, Alabama, 450 00:27:29,359 --> 00:27:35,240 Speaker 1: they will stand a possibility of having less investment, lesser, 451 00:27:35,560 --> 00:27:39,200 Speaker 1: lesser modernization or traft control systems and the possibility of 452 00:27:39,280 --> 00:27:42,520 Speaker 1: increased usurphies. And and just to make it clear, you're 453 00:27:42,600 --> 00:27:46,800 Speaker 1: not against any of the technological improvements that are being 454 00:27:47,000 --> 00:27:50,200 Speaker 1: offered as part of next gen. What you're focused on 455 00:27:50,520 --> 00:27:55,760 Speaker 1: is who will actually control this next gen system? Yes, 456 00:27:55,880 --> 00:28:00,960 Speaker 1: it's who how will the investments be decided? That's the 457 00:28:01,000 --> 00:28:03,359 Speaker 1: main concern. I think it's not it's not the technology. 458 00:28:03,520 --> 00:28:06,680 Speaker 1: It's not the modernization, which is required and a good 459 00:28:06,760 --> 00:28:09,720 Speaker 1: thing uh and reflects new technologies that that are that 460 00:28:09,760 --> 00:28:13,520 Speaker 1: are available. But it's the decisions on where those investments 461 00:28:13,560 --> 00:28:16,359 Speaker 1: are going to be made and what do you have 462 00:28:16,680 --> 00:28:18,800 Speaker 1: a percentage whether you think that this is going to 463 00:28:19,920 --> 00:28:23,399 Speaker 1: change the sort of political zeitguys to make this happen, 464 00:28:23,560 --> 00:28:28,000 Speaker 1: or are you kind of at the last innings. I 465 00:28:28,160 --> 00:28:31,480 Speaker 1: think that there's still an opportunity we're probably you know, 466 00:28:31,560 --> 00:28:33,399 Speaker 1: like in the seventh inning, so to speak, because the 467 00:28:33,480 --> 00:28:38,280 Speaker 1: fact that the f a a S Authorization expires in March, 468 00:28:39,440 --> 00:28:43,520 Speaker 1: which means that there's still time for members of Congress 469 00:28:43,560 --> 00:28:46,680 Speaker 1: and Senators to to get engaged and to protect the 470 00:28:47,240 --> 00:28:51,480 Speaker 1: you know, the core interests of their communities. UM. But 471 00:28:51,760 --> 00:28:53,960 Speaker 1: as as may often happen, things make it, you know, 472 00:28:54,000 --> 00:28:55,840 Speaker 1: they can may get kicked down the road over here 473 00:28:55,920 --> 00:28:59,240 Speaker 1: and um, and there could be some interim measure that 474 00:28:59,320 --> 00:29:02,440 Speaker 1: just phones well, such as Washington. Thank you very much. 475 00:29:02,720 --> 00:29:13,600 Speaker 1: Poncho Kenny, Director of Operations g S I S. Thanks 476 00:29:13,640 --> 00:29:16,240 Speaker 1: for listening to the Bloomberg P and L podcast. You 477 00:29:16,320 --> 00:29:20,040 Speaker 1: can subscribe and listen to interviews at Apple Podcasts, SoundCloud, 478 00:29:20,200 --> 00:29:23,640 Speaker 1: or whatever podcast platform you prefer. I'm Pim Fox. I'm 479 00:29:23,720 --> 00:29:27,720 Speaker 1: on Twitter at pim Fox. I'm on Twitter at Lisa Abramo. 480 00:29:27,840 --> 00:29:30,400 Speaker 1: It's one before the podcast. You can always catch us 481 00:29:30,480 --> 00:29:32,000 Speaker 1: worldwide on Bloomberg Radio.