WEBVTT - Trump Says He Wants a ‘Real End,’ Between Israel and Iran 0:00:02.759 --> 0:00:10.600 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.640 --> 0:00:14.600 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:14.640 --> 0:00:17.880 Eastern on Apple, Cocklay and Android Auto with the Bloomberg 0:00:17.960 --> 0:00:21.080 Business App. Listen on demand wherever you get your podcasts, 0:00:21.400 --> 0:00:23.160 or watch us live on YouTube. 0:00:23.760 --> 0:00:24.000 Again. 0:00:24.040 --> 0:00:26.080 We want to get to sort of the main geopolitical 0:00:26.160 --> 0:00:29.320 risk right now, and that's the fighting between Iran and Israel, 0:00:29.400 --> 0:00:31.920 with President Trump leaving the G seven early to deal 0:00:31.960 --> 0:00:34.920 with that. Ethan Bronner is Bloomberg News Israel bureau Cheap 0:00:34.960 --> 0:00:38.520 and he joins US now. Over here in the US, 0:00:38.560 --> 0:00:41.279 we're trying to understand what the US position is when 0:00:41.280 --> 0:00:43.880 it comes to President Trump and what's happening in the 0:00:43.880 --> 0:00:46.600 Middle East. Where are we where you are in terms 0:00:46.600 --> 0:00:48.919 of what Israel is doing and what its end goal is. 0:00:51.000 --> 0:00:53.480 I say that the confusion over what the United States 0:00:53.520 --> 0:00:55.880 is going to do is equal here as it is there. 0:00:56.800 --> 0:01:00.920 Israel has set up this plan to try to take 0:01:01.000 --> 0:01:05.240 down the Iranian nuclear facilities as well as its ballistic 0:01:05.319 --> 0:01:11.640 missile capacity and its militia ability beyond its borders around Israel. 0:01:12.000 --> 0:01:15.920 So it's launched this plan. It says it can do 0:01:15.959 --> 0:01:18.400 it alone. It would love the United States to help out, 0:01:18.440 --> 0:01:23.160 in particular because there's one huge enrichment facility four DOH, 0:01:23.640 --> 0:01:26.319 which is deep in a mountain that would be best 0:01:26.440 --> 0:01:29.520 got in if you wanted to destroy it with thirty 0:01:29.600 --> 0:01:33.039 thousand pound bunker busters that only the United States has, 0:01:33.319 --> 0:01:35.680 that only its B two planes can lift. 0:01:35.720 --> 0:01:36.520 They're so heavy. 0:01:36.840 --> 0:01:40.319 So right now we're also we're all waiting to see 0:01:40.600 --> 0:01:44.679 might the US decide to join or might this moment 0:01:45.040 --> 0:01:49.680 be one where the Iranians decide to negotiate a degree 0:01:49.720 --> 0:01:52.840 not to enrich uranium Ethan. 0:01:52.920 --> 0:01:56.240 It just seems to me, at least that Israel as 0:01:56.320 --> 0:02:01.160 related to Iran, sees maybe a very rare opportunity to 0:02:01.280 --> 0:02:05.360 really deal almost kind of a death blow to them 0:02:05.400 --> 0:02:08.280 at or at least as a threat maybe even to their government. 0:02:08.760 --> 0:02:11.400 Is that the feeling in Israel that this is maybe 0:02:11.400 --> 0:02:13.799 a special moment of special opportunity for Israel. 0:02:15.080 --> 0:02:17.240 It's one hundred percent of the feeling in Israel, Paul. 0:02:17.360 --> 0:02:19.720 The thing is that, you know, it's one thing to 0:02:19.720 --> 0:02:22.160 say this is a rare moment to go after to 0:02:22.320 --> 0:02:26.440 defange this regime and take away its ability to be 0:02:26.560 --> 0:02:30.360 so destructive. It's another thing to say that therefore it's 0:02:30.440 --> 0:02:34.160 possible to overturn this regime. Look, it might be. It 0:02:34.240 --> 0:02:36.880 certainly would make them very happy in this country. But 0:02:37.040 --> 0:02:40.200 remember the Iran Iraq War went on for eight years 0:02:40.760 --> 0:02:44.440 and the regime in Iran put up with an enormous 0:02:44.480 --> 0:02:47.600 amount of suffering and it is still there forty years later. 0:02:47.760 --> 0:02:49.960 So it's a little bit of an you know, it 0:02:50.000 --> 0:02:52.840 could be an illusion to think that, just like in theory, 0:02:53.280 --> 0:02:57.760 by taking out being so painful in Gaza, that Hamas 0:02:57.800 --> 0:03:01.200 would yield. Hamas hasn't yielded yet, has it exactly? 0:03:01.360 --> 0:03:04.520 Is Israel listening to the United States or will it, 0:03:04.600 --> 0:03:07.040 like once we get clear on what President Trump's position is. 0:03:08.320 --> 0:03:12.240 I think Israel cares enormously about what the United States says, 0:03:12.960 --> 0:03:15.080 and I think it would not I'm certain it would 0:03:15.160 --> 0:03:18.720 not have launched this attack without a cent from Trump 0:03:19.000 --> 0:03:21.840 in a phone call last Monday and generally over these 0:03:21.919 --> 0:03:26.880 last months. So if Trump were to suddenly change, look 0:03:26.880 --> 0:03:28.840 at this point, it's hard to know because Israel's in 0:03:28.880 --> 0:03:31.160 the middle. By the way, if I don't know if 0:03:31.160 --> 0:03:34.040 you're hearing, but we are having an attack on the 0:03:34.080 --> 0:03:37.640 Tel Aviv area right now with Iranian missiles I'm in 0:03:37.760 --> 0:03:42.160 my secure room with a steel door and a steel 0:03:42.200 --> 0:03:45.080 window and reinforced concrete, so I'm as safe as I 0:03:45.080 --> 0:03:47.160 can be, so I can keep talking to you. But 0:03:47.280 --> 0:03:51.160 people across central Israel are running to their bomb shelters. 0:03:52.760 --> 0:03:56.200 So yes, I think what Trump and the United States 0:03:56.200 --> 0:04:00.760 wanted very important to Israel. Absolutely, they've been coordinating very closely. 0:04:00.760 --> 0:04:02.040 So Ethan is there. 0:04:02.080 --> 0:04:04.520 I guess the next step might be, as you suggested, 0:04:04.760 --> 0:04:08.720 use of some military armaments to maybe deal a knockout 0:04:08.760 --> 0:04:11.800 blow to the Iranian nuclear facilities. Is there a sense 0:04:11.840 --> 0:04:14.040 that that is being discussed and if. 0:04:14.560 --> 0:04:17.200 There's no doubt, there's no doubt it's being discussed. There's 0:04:17.200 --> 0:04:20.320 no doubt that. Look, if you look at the Americans 0:04:20.320 --> 0:04:24.600 have moved the Ninnis carrier group to the from the 0:04:24.640 --> 0:04:28.320 Asia to the Mediterranean. That's the second carrier groups. It's 0:04:28.360 --> 0:04:33.479 also sending others. Its sent Thad anti air defense systems 0:04:33.520 --> 0:04:38.040 to Israel. It's moving stuff here in preparation for participating. 0:04:38.080 --> 0:04:40.960 That doesn't mean it will. And there's no question in 0:04:41.000 --> 0:04:45.120 my mind that the Trump administration is examining this possibility 0:04:45.200 --> 0:04:48.200 right now, and I don't know what it's going to decide, 0:04:48.279 --> 0:04:52.000 but we do know that the President left Canada, left 0:04:52.040 --> 0:04:55.240 banf early and said that he needs to deal with 0:04:55.320 --> 0:04:58.120 this issue, and he didn't sound like he was interested 0:04:58.560 --> 0:05:00.000 in some kind of deep negotiation. 0:05:00.520 --> 0:05:03.640 Right well, Ethan, thank you so much for joining us. 0:05:03.680 --> 0:05:06.760 Ethan broun Our, Bloomberg News Israel Bureau Chief, Stay safe, 0:05:06.960 --> 0:05:10.920 good luck, Our thoughts obviously with you as he reports 0:05:11.040 --> 0:05:15.600 during an attack that is something that is tremendously amazing 0:05:15.680 --> 0:05:17.560 and reporting in all of that, Ethan, we thank you 0:05:17.680 --> 0:05:20.680 very much for joining us on that. I will continue 0:05:20.680 --> 0:05:22.920 to follow those headlines as they continued to cross again. 0:05:23.040 --> 0:05:25.480 US President Donald Trump leaving the G seven meeting early 0:05:25.520 --> 0:05:29.119 in Canada to focus on this Israel Iran conflict, sitting 0:05:29.120 --> 0:05:31.520 that he wants a real end to the nuclear dispute 0:05:31.600 --> 0:05:33.800 dispute with Iran and just a ceasefire when no one 0:05:33.839 --> 0:05:36.280 really knows what that real end will be. 0:05:38.040 --> 0:05:41.760 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:05:41.839 --> 0:05:44.919 weekdays at ten am Eastern on Apple, Corplay and Android 0:05:44.920 --> 0:05:48.239 Auto with the Bloomberg Business App. Listen on demand wherever 0:05:48.279 --> 0:05:51.400 you get your podcasts, or watch us live on YouTube. 0:05:52.279 --> 0:05:55.039 Alex ti Al Longside faulse, we need this Bloomberg Intelligence Radio. 0:05:55.080 --> 0:05:58.159 We are broadcasting to you live from our interactive brookrostudio 0:05:58.240 --> 0:06:00.840 right here in midtown manhatt And also check us out 0:06:00.880 --> 0:06:03.120 on YouTube as well as all your streaming device as 0:06:03.160 --> 0:06:06.160 you can check us out on Bloomberg Originals. All right, so, 0:06:06.600 --> 0:06:09.400 late last evening or afternoon, the Senate passed or the 0:06:09.480 --> 0:06:12.760 Senate Republicans laid out its own version of the tax bill. 0:06:12.839 --> 0:06:14.239 Joining us for more as hand made a trace. 0:06:14.279 --> 0:06:17.680 Managing partner and Director of Economic Policy at Beta Partners, 0:06:17.920 --> 0:06:20.080 Henrita for you, what was the biggest surprise. 0:06:21.279 --> 0:06:24.360 The biggest surprise to me had to be the Medicaid components. 0:06:25.160 --> 0:06:28.039 Some of this stuff we know is going to have 0:06:28.120 --> 0:06:31.000 to be negotiated for the next couple of weeks, if 0:06:31.000 --> 0:06:33.799 not month, at least a month from here. 0:06:33.680 --> 0:06:35.440 Given the disparity between the House and the Senate. 0:06:35.440 --> 0:06:38.479 But the Medicaid cuts really have a constituency of no one. 0:06:38.880 --> 0:06:41.400 I'm not sure exactly how they're planning to thread the 0:06:41.440 --> 0:06:43.640 needle just in the Senate, let alone the House with 0:06:43.680 --> 0:06:46.560 this package. They obviously are on a hunt for revenue. 0:06:46.680 --> 0:06:48.920 The tweaks that they made, I think based off our 0:06:49.040 --> 0:06:52.039 estimates which come from my colleague Spencer Pearlman suggests that 0:06:52.040 --> 0:06:54.479 we're looking at like two hundred billion dollars in additional 0:06:54.560 --> 0:06:55.640 revenue for medicaid. 0:06:55.880 --> 0:06:57.880 But I want to be clear, this cuts. 0:06:57.560 --> 0:07:01.200 Off thirty five percent of the entire state of Alaska's 0:07:01.440 --> 0:07:06.080 medicaid recipients. And that's not even the most recent analysis 0:07:06.080 --> 0:07:08.440 and accounting from CBO. So they're gonna have some serious 0:07:08.440 --> 0:07:10.360 problems with this piece. That really surprised me. 0:07:11.480 --> 0:07:13.880 So talk to us about is this. I guess the 0:07:13.920 --> 0:07:16.120 next date that we're all waiting for is kind of 0:07:16.120 --> 0:07:18.160 a July fourth. That's when the Senate wanted to get 0:07:18.200 --> 0:07:20.560 something done. Is that is that still on the table? 0:07:21.480 --> 0:07:21.720 You know? 0:07:21.960 --> 0:07:24.720 I just can't get my head around July fourth. 0:07:24.760 --> 0:07:27.640 I understand optically and emotionally, it sounds good, it's a 0:07:27.640 --> 0:07:29.360 feel good story to have this done by the fourth 0:07:29.360 --> 0:07:32.920 of July. But the only way that members of Congress 0:07:33.040 --> 0:07:37.200 operate and act is with a sword hanging over their heads, 0:07:37.240 --> 0:07:40.920 and that's the debt ceiling. So last week CBO actually 0:07:40.920 --> 0:07:44.200 pushed out the debt ceiling deadline to mid August to 0:07:44.280 --> 0:07:46.880 mid September. I think that's why you're seeing Ron Johnson, 0:07:47.120 --> 0:07:48.920 the Senator from Wisconsin, saying. 0:07:48.640 --> 0:07:49.880 You know we're going to be to go shooting this 0:07:49.920 --> 0:07:50.600 all the way through. 0:07:50.520 --> 0:07:53.239 August is because they don't have a hard and fast 0:07:53.240 --> 0:07:55.360 deadline until they need to hike the debt ceiling, at 0:07:55.360 --> 0:07:58.200 which point the debt ceiling will be what like forty 0:07:58.240 --> 0:08:01.600 two trillion dollars and get us through November. 0:08:01.200 --> 0:08:04.080 Of twenty twenty six. So they've got a long way 0:08:04.120 --> 0:08:04.280 to go. 0:08:04.400 --> 0:08:07.880 I think going to my world, and that's the energy world. 0:08:07.920 --> 0:08:11.000 I was really interested in how wind and solar got 0:08:11.040 --> 0:08:14.320 no relief in this. I can imagine I neither hydrogen. 0:08:14.560 --> 0:08:17.200 I can imagine that the alternative energy lobbyists were going 0:08:17.240 --> 0:08:20.120 hardcore for weeks in terms of the Senators. And I'm 0:08:20.120 --> 0:08:22.920 just wondering, like why, like why keep tax breaks for 0:08:23.040 --> 0:08:25.640 utilities and purchase power agreements for wind and solar but 0:08:25.720 --> 0:08:26.680 not for consumers? 0:08:27.680 --> 0:08:27.880 Right? 0:08:27.960 --> 0:08:30.280 And I think, Alex, you're really nailing my sentiment. 0:08:30.320 --> 0:08:32.240 Right now, I'm trying to talk with as many staffers 0:08:32.280 --> 0:08:35.520 as I can to understand why behind this package. The 0:08:35.600 --> 0:08:41.480 IRA tax credits are extremely popular in Republican states. Specifically, 0:08:41.520 --> 0:08:44.680 they seventy percent of the flow is going to those districts, 0:08:45.280 --> 0:08:48.800 so that is really important for a lot of Senators 0:08:48.800 --> 0:08:51.439 who are for reelection next cycle. I'd highlight Tom Tillis 0:08:51.679 --> 0:08:55.280 most particularly on this one. I think that the IRA 0:08:55.559 --> 0:08:59.319 tax components need to be adjusted from here. It's plane 0:08:59.480 --> 0:09:01.880 from the fact fact that the saltcap, for example, is 0:09:01.920 --> 0:09:03.360 not even addressed by this package. 0:09:03.400 --> 0:09:05.480 It's just kept at the ten K rate. That they're 0:09:05.480 --> 0:09:06.520 going to do more tweaks. 0:09:06.720 --> 0:09:09.720 So I'm expecting some pretty substantial changes to the IRA side, 0:09:10.040 --> 0:09:11.800 to the residential stuff. 0:09:11.800 --> 0:09:13.480 And when we knew some things were going to come out, like. 0:09:13.480 --> 0:09:17.240 The electric vehicles tax credit is standard operating procedure. 0:09:17.280 --> 0:09:18.440 We knew that was going to come out. 0:09:18.559 --> 0:09:21.360 And there's some understanding to get to your specific question 0:09:21.440 --> 0:09:23.439 that there's a duplicative component. 0:09:23.080 --> 0:09:26.400 To the residential and commercial building. 0:09:27.600 --> 0:09:29.960 Tax credits that already exist at the state level, so 0:09:30.000 --> 0:09:32.080 why does the federal government need to layer them on. 0:09:32.520 --> 0:09:36.120 So that's one piece, but really I can't bet the 0:09:36.120 --> 0:09:37.960 needle and get you the votes for this package right now. 0:09:39.280 --> 0:09:42.160 Universities kind of surprised to me. They came out a 0:09:42.200 --> 0:09:45.160 little bit of a winner here. Reduced excise tax on 0:09:45.320 --> 0:09:48.679 university endowments. That's a big one. Where did that come from? 0:09:49.280 --> 0:09:50.199 Yeah, that's a big one. 0:09:50.200 --> 0:09:52.719 There's actually a lot of really random stuff that is 0:09:52.800 --> 0:09:55.000 and is not in this build. The university piece obviously 0:09:55.080 --> 0:09:58.920 is very much an audits with the public projection that 0:09:58.960 --> 0:10:01.840 the administration is take towards universities, and I think that 0:10:02.040 --> 0:10:05.800 is pretty widely supported by Republican lawmakers and voters. 0:10:06.280 --> 0:10:08.280 Obviously, the Senators are indicated that maybe they're not all 0:10:08.280 --> 0:10:09.079 the way there yet. 0:10:09.320 --> 0:10:11.000 But there's other pieces that are not in this bill, 0:10:11.040 --> 0:10:13.280 Like there was a proposal to tax cruise lines that 0:10:13.320 --> 0:10:17.120 you'll maybe remember Commerce Secretary Lutnik came out in wholehearted 0:10:17.120 --> 0:10:17.720 support for. 0:10:18.000 --> 0:10:19.880 But again, you know, not to harp on Alaska. 0:10:19.880 --> 0:10:21.360 I don't know why I keep talking about them, but 0:10:21.679 --> 0:10:23.600 you know that would have been a hit to Alaska. 0:10:23.679 --> 0:10:26.920 So they chose not to use that component to generate revenue. 0:10:26.920 --> 0:10:29.679 But they did choose to cut the Medicaid stuff and 0:10:29.800 --> 0:10:32.240 kick I think the late assessment is sixteen million people 0:10:32.240 --> 0:10:35.200 off Medicaid. So there's a lot of confusing pieces here. 0:10:35.920 --> 0:10:37.920 I'm again, I'm really just trying to thread the needle 0:10:37.960 --> 0:10:39.920 to find the fifty one votes for this package right now, 0:10:39.960 --> 0:10:40.800 and I can't get to it. 0:10:40.880 --> 0:10:42.920 Okay, So then what happens? So you can't get the 0:10:42.920 --> 0:10:45.200 fifty one votes. We don't even know if the House 0:10:45.240 --> 0:10:47.600 Republicans are going to like what this bill is, So 0:10:47.640 --> 0:10:48.400 what happens now? 0:10:49.120 --> 0:10:52.560 Yeah, So you know, let's talk about maybe the underreported 0:10:52.559 --> 0:10:55.240 component here, which is the potential that this doesn't pan out. 0:10:55.440 --> 0:10:57.480 We still have thirty percent odds that they kick this 0:10:57.559 --> 0:11:02.040 into September. Excuse me into Senator Lindsay Graham is the 0:11:02.080 --> 0:11:04.640 chairman of the Budget Committee, and he's being really clear 0:11:05.000 --> 0:11:08.120 that Republicans have four bites at the apple and reconciliation, 0:11:08.200 --> 0:11:11.120 and he's entirely correct. They don't need to have this 0:11:11.400 --> 0:11:15.160 entire comprehensive package ready for prime time, especially with Israel 0:11:15.240 --> 0:11:18.240 lebron and the one hundred and seventy five billion dollars 0:11:18.280 --> 0:11:21.600 in this package that goes to large military preparedness, another 0:11:21.640 --> 0:11:24.480 one hundred and fifty billion that goes to immigration. There's 0:11:24.520 --> 0:11:27.080 a lot of ways for Republicans to operate for the 0:11:27.120 --> 0:11:29.200 next year and a half going into the midterms that 0:11:29.240 --> 0:11:30.280 doesn't have to be this. 0:11:30.160 --> 0:11:31.280 One big package. 0:11:31.360 --> 0:11:33.960 So I think there's going to be some renewed discussion, 0:11:34.080 --> 0:11:37.199 especially as we're talking about delays for forward progress, about 0:11:37.200 --> 0:11:39.760 maybe breaking this bill into pieces. The five trillion dollar 0:11:39.840 --> 0:11:43.280 debt ceiling hike alone loses you ran Paul's vote. So 0:11:43.400 --> 0:11:45.520 there had already been to conversations about cutting that back 0:11:45.559 --> 0:11:47.640 down to two and a half trillion and maybe passing 0:11:47.640 --> 0:11:48.600 these bills piecemeal. 0:11:48.760 --> 0:11:49.520 That is an option. 0:11:49.600 --> 0:11:51.920 It's a low odds prospect, but it's nothing to be 0:11:51.960 --> 0:11:53.120 mindful of as an investor. 0:11:53.720 --> 0:11:56.440 So just thirty seconds on that raising that tax ceiling 0:11:56.480 --> 0:11:59.559 by five trillion. I can't do that in my balance sheet. 0:12:00.200 --> 0:12:01.560 But does it seem to be a problem for the 0:12:01.559 --> 0:12:02.240 federal government. 0:12:03.000 --> 0:12:03.240 Uh? 0:12:03.320 --> 0:12:05.240 Yeah, I mean I wish I had that kind of checkbook. 0:12:05.240 --> 0:12:09.599 That'd be pretty fantastic. This is a absolute record by a 0:12:09.720 --> 0:12:12.160 magnitude that I can't even do the math on. I 0:12:12.160 --> 0:12:13.960 think the last time we increase the debt scented by 0:12:13.960 --> 0:12:17.120 a specific dollar figure, it was like one point two trillion, 0:12:17.120 --> 0:12:18.640 and that got us almost a year and a half 0:12:18.640 --> 0:12:21.720 worth of functionality. Now we're talking about a five trillion 0:12:21.800 --> 0:12:23.800 dollar hike, which by the way, is a trillion dollars 0:12:23.800 --> 0:12:24.680 more than the House. 0:12:24.520 --> 0:12:27.040 Is authorized, and it only gets us through the midterms. 0:12:27.320 --> 0:12:30.679 That's pretty exorbitant, and that really speaks to the sheer. 0:12:30.520 --> 0:12:33.600 Volume of deficit increases that's in this package. 0:12:33.720 --> 0:12:34.800 And it is also, you. 0:12:34.720 --> 0:12:38.839 Know, the most regressive and substantially underwater bill that has passed. 0:12:38.880 --> 0:12:41.880 It's a negative twenty nine percent approval. Right now, that's 0:12:41.920 --> 0:12:42.480 pretty rough. 0:12:43.160 --> 0:12:44.720 I mean, I think rough is like an understatement. 0:12:44.720 --> 0:12:46.320 I mean, I've been a citizen in this country for 0:12:46.400 --> 0:12:48.840 sixty one years. I have no idea how they do that. 0:12:48.960 --> 0:12:51.320 I mean, I guess you just it's just kicked the 0:12:51.360 --> 0:12:54.120 can down the road at the highest level. I guess, yeah. 0:12:54.280 --> 0:12:54.560 I know. 0:12:56.040 --> 0:12:58.800 Also, it's like a holy definition to like the whip, 0:12:58.880 --> 0:12:59.800 Like what are you whipping? 0:13:00.120 --> 0:13:00.200 Like? 0:13:00.200 --> 0:13:02.480 No one's going to be whipped? All right, Henrietta things lot, 0:13:02.480 --> 0:13:04.240 we really appreciate. Jump back on those phones. Let us 0:13:04.240 --> 0:13:04.880 know what you find out. 0:13:04.920 --> 0:13:08.160 Henrita Trice, Managing partner and director of Economic Policy over 0:13:08.160 --> 0:13:09.040 at Beta Partners. 0:13:10.720 --> 0:13:14.439 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:13:14.520 --> 0:13:17.560 weekdays at ten am Eastern on Apple, Cocklay and Android 0:13:17.600 --> 0:13:20.920 Auto with the Bloomberg Business App. Listen on demand wherever 0:13:20.960 --> 0:13:24.080 you get your podcasts, or watch us live on YouTube. 0:13:24.720 --> 0:13:26.240 All right, let's get a look in on the markets. 0:13:26.280 --> 0:13:27.959 Then what do you do when their headlines like this? 0:13:28.040 --> 0:13:31.240 Shelby McFadden is investment analyst and Motley Full Asset Management 0:13:31.280 --> 0:13:34.600 to discuss her outlook. How much risk Shelby do you 0:13:34.600 --> 0:13:36.240 think you should have in the markets? 0:13:36.760 --> 0:13:39.520 Well, I will start off with saying we are staying invested. 0:13:39.640 --> 0:13:41.800 Right there are points and in certain portfolio where we 0:13:41.840 --> 0:13:43.840 have a little bit more cash than we would like to. 0:13:44.000 --> 0:13:46.120 And it's not because we're sort of taking that step 0:13:46.120 --> 0:13:48.040 back approach and saying let's get out of this, we 0:13:48.040 --> 0:13:49.560 don't want a part of it. It's more so that 0:13:49.640 --> 0:13:52.800 we're seeing that some of these pullbacks along with the rallies, 0:13:52.840 --> 0:13:55.480 are really broad based, and so the opportunity for buying 0:13:55.520 --> 0:13:58.040 in terms of getting in at a price that would 0:13:58.040 --> 0:14:00.720 favor us in terms of that long term return, it's 0:14:00.720 --> 0:14:03.240 not showing up as in a way that we would like, right. 0:14:03.320 --> 0:14:05.959 So where there are higher cash balances is because we're 0:14:05.960 --> 0:14:09.080 sort of waiting for those fair valuation opportunities, but going 0:14:09.120 --> 0:14:12.600 ahead and staying invested because we can't control these sort 0:14:12.640 --> 0:14:15.720 of big market shocks, right, and it is a bit uncomfortable. 0:14:15.800 --> 0:14:19.120 It is something that requires a very long term orientation 0:14:19.280 --> 0:14:22.640 in order to sort of suffer through it. But it's 0:14:22.720 --> 0:14:26.040 not putting us on the sidelines of anything, We're much 0:14:26.080 --> 0:14:29.680 more active. We're spending a lot more time filling up 0:14:29.720 --> 0:14:33.280 the universe, even when the price opportunity doesn't necessarily present itself, 0:14:33.680 --> 0:14:36.520 and just adjusting according to that sort of geopolitical risk 0:14:36.560 --> 0:14:37.240 as necessary. 0:14:37.760 --> 0:14:40.320 Are there certain sectors that screen well for you guys? 0:14:40.680 --> 0:14:42.880 A lot of folks we're saying ahead now I have 0:14:42.920 --> 0:14:45.280 an opportunity to buy the mag seven when they sold off. 0:14:45.120 --> 0:14:45.840 Earlier in the year. 0:14:46.680 --> 0:14:48.320 What sector screen well for you guys? 0:14:48.520 --> 0:14:51.840 I think right now we have surprisingly actually taken a 0:14:51.840 --> 0:14:55.280 closer look at certain financials, and in terms of some 0:14:55.360 --> 0:14:58.400 of our core and income oriented strategies, trying to get 0:14:58.400 --> 0:15:01.840 a better look at certain consumer stable companies that are 0:15:01.880 --> 0:15:04.119 just good at what they do and have been overlooked 0:15:04.120 --> 0:15:06.680 and sort of punished for where we are in the cycle. 0:15:07.440 --> 0:15:09.359 In terms of tech. 0:15:09.160 --> 0:15:11.280 We've taken another We've taken a look at Service Now, 0:15:11.600 --> 0:15:15.080 which has remained a bit expensive, but they're very mature 0:15:15.120 --> 0:15:18.040 in their space. They have high quality leadership, great retention, 0:15:18.480 --> 0:15:22.560 fantastic cross selling opportunity, and if the runway for agentic 0:15:22.600 --> 0:15:24.640 ai has been pulled forward the way we think it has, 0:15:24.960 --> 0:15:27.400 it's a great opportunity. If we sort of see any 0:15:27.440 --> 0:15:29.000 sort of market dip that allows us to enter that 0:15:29.000 --> 0:15:29.720 position sooner. 0:15:29.920 --> 0:15:33.520 Now, you were stalwarts of say Costco and Walmart, and 0:15:33.520 --> 0:15:35.680 I'm assuming you still are. But if I'm max on 0:15:35.760 --> 0:15:37.440 that position, what do I do? 0:15:37.480 --> 0:15:39.640 You max out on Costco and Walmart and you're already 0:15:39.640 --> 0:15:42.400 maxed out on MasterCard, you can do what we've been 0:15:42.400 --> 0:15:43.760 trying to do. You can go ahead and play that 0:15:43.800 --> 0:15:46.080 cow position that we've seen coming up this the past 0:15:46.080 --> 0:15:49.080 week or so, which has been Costco, O'Reilly Autoparts, and Walmart. 0:15:49.200 --> 0:15:51.640 So we got, yeah, I do coin Cow. I did 0:15:51.680 --> 0:15:52.760 not coin Cow, and I. 0:15:52.680 --> 0:15:55.480 Was devastated that I didn't see it's a Costco, Costco, 0:15:55.560 --> 0:15:58.280 O'Reilly Auto Parts and then Walmart. So O'Reilly had been 0:15:58.280 --> 0:16:00.440 something that we were looking at because when you think 0:16:00.440 --> 0:16:02.360 about it, and this has been something that's been ongoing 0:16:02.440 --> 0:16:04.760 since we had a lot of that inflation and autos 0:16:04.760 --> 0:16:06.200 in twenty two to twenty three. 0:16:05.960 --> 0:16:07.240 People were fixing their cars. 0:16:07.400 --> 0:16:10.000 Right now, when we look at that savings being depleted, 0:16:10.240 --> 0:16:12.520 people are doing that again. And then you add on 0:16:12.600 --> 0:16:16.160 top of savings depletion, student loan resumption, and tariffs. You're 0:16:16.200 --> 0:16:18.400 definitely choosing to fix your car. If you can, right, 0:16:18.480 --> 0:16:20.880 and so that has been something that has been periodically 0:16:20.960 --> 0:16:24.960 a little bit more expensive, but very much staple oriented, 0:16:25.160 --> 0:16:27.440 similar to how people are fixing their homes instead of 0:16:27.720 --> 0:16:29.600 trying to sell in buying new ones. So if you 0:16:29.640 --> 0:16:32.360 can't get into some of those staples already, and you're 0:16:32.400 --> 0:16:34.840 still not able to get into the toll takers MasterCard, 0:16:35.080 --> 0:16:37.160 you could wait for something like an O'Reilly to pop up, 0:16:37.280 --> 0:16:39.520 or you could look in some of those other consumer 0:16:39.560 --> 0:16:42.640 staples that are more in sort of the health and 0:16:42.680 --> 0:16:45.000 beauty sort of space. Can View is a great option 0:16:45.120 --> 0:16:48.120 for that. We've seen that white label has not penetrated 0:16:48.120 --> 0:16:50.000 that sort of consumer health space the way that we 0:16:50.000 --> 0:16:52.240 would expect it too. It's kind of hanging out, kind 0:16:52.240 --> 0:16:52.600 of flat. 0:16:53.480 --> 0:16:57.600 The average age of US cars and light trucks twelve 0:16:57.640 --> 0:17:00.400 point six years. I'm looking at John Tucker when I say. 0:17:00.280 --> 0:17:02.360 This, Well, have you looked under the hood of your car? 0:17:02.560 --> 0:17:03.680 I mean, there's nothing in there. 0:17:03.680 --> 0:17:06.760 I recognize that I used to be able to change 0:17:06.760 --> 0:17:09.360 out a carburetor, fire. 0:17:09.080 --> 0:17:10.000 YouTube videos for that. 0:17:10.440 --> 0:17:14.160 Well, it's basically my new car, a twenty twenty four vehicle, 0:17:14.240 --> 0:17:19.399 is I've been saying, it's basically my iPhone it's an 0:17:19.400 --> 0:17:21.479 iPhone with four wheels, That's what it is. It is 0:17:22.000 --> 0:17:25.360 it's crazy. Is the FED going to help us out 0:17:25.359 --> 0:17:27.239 this year? Or should we not rely on that? 0:17:28.480 --> 0:17:30.040 They could help us out this year? 0:17:30.359 --> 0:17:32.560 But I wouldn't expect it to be until the end 0:17:32.640 --> 0:17:35.000 of the year, and as a result, I would not 0:17:35.080 --> 0:17:38.280 rely on it. I've coined in my team this is 0:17:38.280 --> 0:17:41.120 something I have coined frozen fed summer. I think that's 0:17:41.119 --> 0:17:44.160 what we're going to see because there's so much murkiness 0:17:44.160 --> 0:17:46.800 in the data. Right we're about to enter a period 0:17:47.400 --> 0:17:48.880 where there's not going to be too. 0:17:48.720 --> 0:17:52.400 Too much promo shopping. We will have a little bit of. 0:17:52.359 --> 0:17:54.960 Promo in July fourth, but a lot of the vacations 0:17:54.960 --> 0:17:57.320 have been booked right once we start to get into August, 0:17:57.640 --> 0:17:59.800 it gets a little bit more promo activity for back 0:17:59.840 --> 0:18:02.520 to So there's a short window for June and July 0:18:02.680 --> 0:18:04.560 where we can probably have a look at the data 0:18:04.640 --> 0:18:07.800 and say, are people still spending? Is kind of just 0:18:07.840 --> 0:18:10.000 the weather? What are we going to get here? And 0:18:10.080 --> 0:18:12.119 so that'll help us out a little bit. But shortly 0:18:12.119 --> 0:18:15.080 after that we'll have murky data again from promo from 0:18:15.160 --> 0:18:16.600 Labor Day and then all of a sudden, it'll be 0:18:16.640 --> 0:18:17.600 promo from Christmas. 0:18:18.000 --> 0:18:19.199 So I'm not sure the Fed's going to. 0:18:19.240 --> 0:18:21.640 Have a great idea what we're looking at. Unless there's 0:18:21.680 --> 0:18:24.520 a really huge swing in employment in a negative direction. 0:18:24.680 --> 0:18:27.719 I would probably bet that employment would push them faster 0:18:28.520 --> 0:18:31.400 than just sort of retail and NCPI data. 0:18:31.680 --> 0:18:35.160 How do you guys look at the international trade? Right 0:18:35.240 --> 0:18:37.199