1 00:00:02,720 --> 00:00:10,520 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,560 --> 00:00:14,520 Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 3 00:00:14,560 --> 00:00:17,799 Speaker 1: Eastern on Apple Coarcklay and Android Auto with the Bloomberg 4 00:00:17,880 --> 00:00:21,000 Speaker 1: Business App. Listen on demand wherever you get your podcasts, 5 00:00:21,320 --> 00:00:23,080 Speaker 1: or watch us live on YouTube. 6 00:00:23,880 --> 00:00:26,400 Speaker 2: Let's get your earnings and go to GM. So, regardless 7 00:00:26,440 --> 00:00:28,560 Speaker 2: of the quarter, they pulled their guidance and moved their 8 00:00:28,600 --> 00:00:32,280 Speaker 2: earnings call to Thursday. They also froze their share buy back, 9 00:00:32,360 --> 00:00:36,480 Speaker 2: all on issues surrounding tariffs. David Welsh's Bloomberg Detroit Brio 10 00:00:36,640 --> 00:00:39,080 Speaker 2: Chief to recap some of those earnings, David, why did 11 00:00:39,159 --> 00:00:40,680 Speaker 2: they push their call forty eight hours? 12 00:00:40,680 --> 00:00:42,280 Speaker 3: What are they going to learn in those two days? 13 00:00:43,880 --> 00:00:46,520 Speaker 4: As they were preparing last night for today's earnings call, 14 00:00:46,680 --> 00:00:50,559 Speaker 4: there were reports coming out from US and others that 15 00:00:50,800 --> 00:00:53,599 Speaker 4: the Trump administration would relax some of the auto tariffs, 16 00:00:53,640 --> 00:00:57,080 Speaker 4: but there's no detail in there. There's some out there 17 00:00:57,080 --> 00:01:00,000 Speaker 4: that they won't stack metals tariffs on top of auto tariff, 18 00:01:00,120 --> 00:01:02,600 Speaker 4: for example, and there could be some relief on parts, 19 00:01:02,640 --> 00:01:06,240 Speaker 4: but until automakers look at the details and see exactly 20 00:01:06,240 --> 00:01:07,679 Speaker 4: what they're going to have to pay and what they 21 00:01:07,680 --> 00:01:10,400 Speaker 4: won't be paying. It's hard for them to forecast earnings 22 00:01:10,400 --> 00:01:13,480 Speaker 4: and sales and look, they have all kinds of ways 23 00:01:13,520 --> 00:01:15,600 Speaker 4: to try to plan for tariffs and mitigate them and 24 00:01:15,640 --> 00:01:18,160 Speaker 4: also model out the impact on the business, and they 25 00:01:18,160 --> 00:01:19,920 Speaker 4: can't do any of that until they know exactly what 26 00:01:19,959 --> 00:01:23,000 Speaker 4: it's going to say. So I think what GM did 27 00:01:23,080 --> 00:01:25,280 Speaker 4: is they looked at this and they just said, hey, 28 00:01:25,160 --> 00:01:28,480 Speaker 4: the guidance that they had given out did not count 29 00:01:28,600 --> 00:01:33,360 Speaker 4: really for any kind of major tariff scheme here, despite 30 00:01:33,400 --> 00:01:34,959 Speaker 4: the fact that Trump and campaign on it and said 31 00:01:34,959 --> 00:01:37,160 Speaker 4: he was going to levy them. They gave guidance that 32 00:01:37,240 --> 00:01:39,520 Speaker 4: had nothing to do with those tariffs. I think probably 33 00:01:39,560 --> 00:01:42,319 Speaker 4: the tariffs are bigger than GM thought, much more aggressive 34 00:01:42,319 --> 00:01:45,920 Speaker 4: than GM thought. So they've withdrawn the guidance and they 35 00:01:45,920 --> 00:01:48,280 Speaker 4: had a six billion dollar share buyback. Two of it's 36 00:01:48,280 --> 00:01:50,559 Speaker 4: already funded and will be done in the second quarter. 37 00:01:50,600 --> 00:01:53,280 Speaker 4: The other four billions on hold again until they can 38 00:01:53,360 --> 00:01:55,480 Speaker 4: understand what the tariffs will mean for their profits and 39 00:01:55,520 --> 00:01:58,840 Speaker 4: their cash flow. So this is all about finding out 40 00:01:58,880 --> 00:02:01,360 Speaker 4: what the details are, trying to model and plan the 41 00:02:01,400 --> 00:02:04,160 Speaker 4: business going forward, and they just don't feel they can 42 00:02:04,200 --> 00:02:04,840 Speaker 4: do it right now. 43 00:02:05,640 --> 00:02:08,680 Speaker 5: What are GM and some of the other auto manufacturers 44 00:02:09,639 --> 00:02:11,919 Speaker 5: doing now, David, in terms of are they making any 45 00:02:12,000 --> 00:02:16,760 Speaker 5: changes to production, to sales incentives or is it just 46 00:02:16,800 --> 00:02:18,799 Speaker 5: business as usual? As they try to figure out what's going. 47 00:02:18,680 --> 00:02:21,920 Speaker 4: On, there are small changes here and there. It's really 48 00:02:21,960 --> 00:02:24,920 Speaker 4: difficult to change production or change your parts. I mean, 49 00:02:24,919 --> 00:02:25,920 Speaker 4: you can't do that overnight. 50 00:02:25,919 --> 00:02:26,239 Speaker 2: You can't. 51 00:02:26,880 --> 00:02:29,120 Speaker 4: It can take a year to do that, let alone. 52 00:02:29,520 --> 00:02:32,080 Speaker 4: We've been at this for a couple of months. But 53 00:02:32,160 --> 00:02:34,680 Speaker 4: the one thing General Motors has done so they have 54 00:02:34,760 --> 00:02:37,840 Speaker 4: four pickup truck plants. It's their highest volume vehicle that 55 00:02:37,919 --> 00:02:41,320 Speaker 4: the Chevrolet Silverado and gmcc Era. Two of the plants 56 00:02:41,320 --> 00:02:43,320 Speaker 4: are in the US, ones in Canada, ones in Mexico. 57 00:02:43,400 --> 00:02:46,320 Speaker 4: Of course, those vehicles coming from Canada Mexico are subject 58 00:02:46,360 --> 00:02:49,880 Speaker 4: to tariffs at least on the parts, the nine US 59 00:02:49,960 --> 00:02:53,800 Speaker 4: parts inside them, and that's pretty substantial. So what GM 60 00:02:53,840 --> 00:02:57,000 Speaker 4: has done there is they've jacked up production at their 61 00:02:57,160 --> 00:03:00,320 Speaker 4: four Wayne, Indiana plant to get more pickups out of there. 62 00:03:00,360 --> 00:03:02,480 Speaker 4: They've just increased when they were already running three shifts, 63 00:03:02,520 --> 00:03:04,440 Speaker 4: but they've increased the line speed, so they're working at 64 00:03:04,440 --> 00:03:07,440 Speaker 4: faster to get more vehicles out. It'll add about fifty 65 00:03:07,480 --> 00:03:12,000 Speaker 4: thousand trucks a year, and that's one way to offset 66 00:03:12,080 --> 00:03:16,880 Speaker 4: tariff production of trucks and sell American made vehicles. And 67 00:03:16,919 --> 00:03:19,680 Speaker 4: you're seeing stuff like that. You know, I think some 68 00:03:19,800 --> 00:03:22,720 Speaker 4: companies may be slowing production of some vehicles that have 69 00:03:22,760 --> 00:03:25,280 Speaker 4: tariffs on them because they either can't pass the cost 70 00:03:25,400 --> 00:03:28,920 Speaker 4: on to consumers or it's no longer as profitable to 71 00:03:28,960 --> 00:03:31,360 Speaker 4: sell so many of them. So you may be seeing 72 00:03:31,400 --> 00:03:33,919 Speaker 4: some of that stuff, but a lot of it's been 73 00:03:33,960 --> 00:03:36,440 Speaker 4: business as usual, but you're seeing some small moves like 74 00:03:36,480 --> 00:03:38,080 Speaker 4: GM has made really. 75 00:03:37,960 --> 00:03:40,080 Speaker 3: Interested to hear that that call on Thursday, David, Thanks 76 00:03:40,120 --> 00:03:40,400 Speaker 3: so much. 77 00:03:40,480 --> 00:03:43,560 Speaker 2: David Welsh, Bloomberg, Detroit via Chief Joining us there. 78 00:03:45,280 --> 00:03:49,000 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 79 00:03:49,080 --> 00:03:52,160 Speaker 1: weekdays at ten am Eastern on Apple, Coarclay, and Android 80 00:03:52,160 --> 00:03:55,480 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 81 00:03:55,520 --> 00:03:58,640 Speaker 1: you get your podcasts, or watch us live on YouTube. 82 00:03:59,040 --> 00:04:01,680 Speaker 2: All right, let's add to can Now you have Mark 83 00:04:01,720 --> 00:04:05,640 Speaker 2: Carney's edge slips as Canada's election comes to a hectic end. 84 00:04:05,680 --> 00:04:09,440 Speaker 2: He won yet by a very very very thin margin. 85 00:04:09,520 --> 00:04:13,000 Speaker 2: David Gerr's correspondent for Bloomberg, host a Big Take podcast 86 00:04:13,000 --> 00:04:15,320 Speaker 2: I should say to his party one, but walk us 87 00:04:15,320 --> 00:04:15,960 Speaker 2: through the results. 88 00:04:15,960 --> 00:04:16,279 Speaker 3: What we know. 89 00:04:16,480 --> 00:04:18,800 Speaker 6: Yeah, an incredibly close race. So Mark Carney emerges here 90 00:04:18,800 --> 00:04:21,279 Speaker 6: with the mandate, but it is not a majority mandate, 91 00:04:21,320 --> 00:04:23,360 Speaker 6: which is what he and his party wanted. So what 92 00:04:23,400 --> 00:04:25,160 Speaker 6: that means an effect, is in the coming days, he's 93 00:04:25,160 --> 00:04:26,599 Speaker 6: going to have to figure out how he's going to 94 00:04:26,640 --> 00:04:29,200 Speaker 6: work with other political parties in this country to pass 95 00:04:29,240 --> 00:04:32,400 Speaker 6: his ambitious legislative agenda, so much of which centers on 96 00:04:32,440 --> 00:04:34,720 Speaker 6: the economic predicament this country is in, and of course 97 00:04:34,760 --> 00:04:38,080 Speaker 6: the trade this country's engaged with the US on. And 98 00:04:38,120 --> 00:04:39,800 Speaker 6: so what Mark Carney said over the course of this 99 00:04:39,880 --> 00:04:42,400 Speaker 6: campaign is he intends to win that trade war. He 100 00:04:42,440 --> 00:04:45,080 Speaker 6: intends to go to Washington present himself in a meeting 101 00:04:45,080 --> 00:04:47,120 Speaker 6: with President Trump as somebody who's not going to back 102 00:04:47,160 --> 00:04:49,360 Speaker 6: down on Canada's position in that trade war. That's what 103 00:04:49,360 --> 00:04:51,320 Speaker 6: we're going to be watching for here in the coming days. 104 00:04:51,360 --> 00:04:53,480 Speaker 6: One effect that that meeting takes place again, it's something 105 00:04:53,520 --> 00:04:56,159 Speaker 6: that he promised would happen in shorter We'll see if 106 00:04:56,160 --> 00:04:58,760 Speaker 6: that's in days or weeks. But two things sort of 107 00:04:58,839 --> 00:05:00,600 Speaker 6: up ended the course of this race over the last 108 00:05:00,600 --> 00:05:02,200 Speaker 6: couple of months. The first of which, of course is 109 00:05:02,240 --> 00:05:04,880 Speaker 6: Mark Arney becoming the leader of the Liberal Party. The 110 00:05:04,920 --> 00:05:06,880 Speaker 6: second of which was Donald Trump returned into the White 111 00:05:06,880 --> 00:05:10,000 Speaker 6: House in Washington and attacking this country really on two fronts, 112 00:05:10,000 --> 00:05:12,280 Speaker 6: one on the side of trade in the economy, the other, 113 00:05:12,320 --> 00:05:14,960 Speaker 6: of course, on the country's sovereignty. And Mark Karney has 114 00:05:14,960 --> 00:05:16,720 Speaker 6: said from the get go here he never found those 115 00:05:16,720 --> 00:05:19,840 Speaker 6: remarks from President Trump about Canada becoming the fifty first 116 00:05:19,800 --> 00:05:21,839 Speaker 6: state as any kind of a joke. He took it seriously, 117 00:05:22,080 --> 00:05:23,600 Speaker 6: and that is something he said over and over again, 118 00:05:23,600 --> 00:05:25,280 Speaker 6: Alex and Paul is not negotiable. 119 00:05:26,040 --> 00:05:29,040 Speaker 5: So talk to us about conservatism in Canada. Is it 120 00:05:29,080 --> 00:05:31,880 Speaker 5: as vibrant as it is in the United States, as 121 00:05:31,880 --> 00:05:34,680 Speaker 5: it is in some European countries like Germany. Is it 122 00:05:34,720 --> 00:05:37,839 Speaker 5: to the point where anybody in Canada will be okay 123 00:05:37,839 --> 00:05:40,120 Speaker 5: with being referred to as a fifty first state. 124 00:05:43,120 --> 00:05:44,839 Speaker 6: That is definitely not the case. But you bring up 125 00:05:44,880 --> 00:05:47,120 Speaker 6: a really interesting question that is where does the Conservative 126 00:05:47,160 --> 00:05:49,400 Speaker 6: Party in this country go from here? So Peer PAULIV, 127 00:05:49,480 --> 00:05:51,599 Speaker 6: the leader of the Conservative Party, who is in effect 128 00:05:51,760 --> 00:05:55,039 Speaker 6: running against Mark Karney, actually lost his seat last night 129 00:05:55,040 --> 00:05:56,920 Speaker 6: in a district just about thirty or forty five minutes 130 00:05:57,200 --> 00:05:59,320 Speaker 6: from where I'm standing, So that kind of throws things 131 00:06:00,120 --> 00:06:01,720 Speaker 6: up in the air in terms of will he continue 132 00:06:01,720 --> 00:06:03,960 Speaker 6: to lead the Conservative Party. Is there going to be 133 00:06:03,960 --> 00:06:05,880 Speaker 6: a situation in which he can kind of convince somebody 134 00:06:05,920 --> 00:06:07,840 Speaker 6: else in the party who was elected to step down 135 00:06:07,839 --> 00:06:09,680 Speaker 6: so that he could run in a by election for 136 00:06:09,720 --> 00:06:12,719 Speaker 6: that seat. That's all up in the air here, and 137 00:06:12,760 --> 00:06:14,920 Speaker 6: you ask just kind of about the breed of conservatism 138 00:06:14,960 --> 00:06:17,320 Speaker 6: that we see here. Peer Polyev is somebody who has 139 00:06:17,360 --> 00:06:20,080 Speaker 6: been compared in terms of political style to Donald Trump, 140 00:06:20,120 --> 00:06:22,279 Speaker 6: the president of the United States. If there's make America 141 00:06:22,320 --> 00:06:24,719 Speaker 6: great again in the United States, there's make Canada grade 142 00:06:24,720 --> 00:06:28,640 Speaker 6: again here in Canada, as sort of headlined by Peer Polyev. 143 00:06:28,720 --> 00:06:31,760 Speaker 6: So they had an amazing showing yesterday. By all kind 144 00:06:31,760 --> 00:06:34,640 Speaker 6: of historical records, they did extremely well, if they still 145 00:06:34,640 --> 00:06:37,280 Speaker 6: didn't best the Liberals, And that's really extraordinary again when 146 00:06:37,320 --> 00:06:39,240 Speaker 6: you look at kind of the not so long ago history. 147 00:06:39,720 --> 00:06:41,880 Speaker 6: Just a few months ago, before Mark Carney entered this race, 148 00:06:41,920 --> 00:06:44,599 Speaker 6: the Conservatives had a twenty plus point lead over the 149 00:06:44,640 --> 00:06:47,240 Speaker 6: Liberal Party and that was squandered here over the last 150 00:06:47,279 --> 00:06:48,839 Speaker 6: few months. So there'll be a lot of soul searching. 151 00:06:48,880 --> 00:06:51,200 Speaker 6: Paul and alex within the party about what went wrong 152 00:06:51,200 --> 00:06:52,920 Speaker 6: and what the party can do differently going forward. 153 00:06:53,200 --> 00:06:56,120 Speaker 2: So your's an insanely unfair question, considering that your reporter. 154 00:06:56,240 --> 00:06:57,679 Speaker 2: So you know, I'll take this for the grand salt. 155 00:06:58,000 --> 00:07:02,000 Speaker 2: But if President Trump had not come aggressively after Canada, 156 00:07:02,040 --> 00:07:04,360 Speaker 2: either in terms of tariffs or more importantly making it 157 00:07:04,440 --> 00:07:08,600 Speaker 2: a fifty first state, would this election have been different? 158 00:07:09,560 --> 00:07:12,160 Speaker 2: Were there other issues that got kind of sidelined at 159 00:07:12,160 --> 00:07:12,600 Speaker 2: this point? 160 00:07:15,240 --> 00:07:17,960 Speaker 6: I think no doubt the fact that Donald Trump talked 161 00:07:18,000 --> 00:07:19,760 Speaker 6: about Canada as much as he did and made those 162 00:07:19,800 --> 00:07:22,480 Speaker 6: threats with something that Mark Karney, who is a career 163 00:07:22,560 --> 00:07:24,720 Speaker 6: technocrat he headed the Bank of Canada and the Bank 164 00:07:24,720 --> 00:07:26,960 Speaker 6: of England for a time, to serve as the chair 165 00:07:27,000 --> 00:07:31,400 Speaker 6: of bloomberg Ingk's board and Brookfield Asset Management. This gave 166 00:07:31,480 --> 00:07:33,760 Speaker 6: him an opening to present himself as kind of a 167 00:07:33,800 --> 00:07:35,920 Speaker 6: foil to Donald Trump, to be a foil to that 168 00:07:36,000 --> 00:07:37,840 Speaker 6: kind of breed of populism that we've seen in the 169 00:07:37,840 --> 00:07:40,640 Speaker 6: president of the United States, and it really changed the polling, 170 00:07:41,200 --> 00:07:44,760 Speaker 6: changed Canadian's engagement with this election. So yes, as that 171 00:07:44,840 --> 00:07:46,840 Speaker 6: soul searching takes place among the Conservative Party, I think 172 00:07:46,840 --> 00:07:48,320 Speaker 6: there's also an awareness of the fact that this is 173 00:07:48,360 --> 00:07:50,960 Speaker 6: a very unique circumstance and the Canadians, as a result 174 00:07:51,000 --> 00:07:53,080 Speaker 6: of what Donald Trump said and did, really kind of 175 00:07:53,080 --> 00:07:55,520 Speaker 6: galvanized the electorate here in Canada in a way that 176 00:07:55,520 --> 00:07:57,480 Speaker 6: they might not have three four five months ago. 177 00:07:58,160 --> 00:08:00,960 Speaker 5: David, you've been up in Ottawa for a few days now, 178 00:08:01,640 --> 00:08:03,720 Speaker 5: what's the feeling of the person on the street here, 179 00:08:03,760 --> 00:08:06,560 Speaker 5: because as it relates to their relationship with the US, 180 00:08:06,600 --> 00:08:08,720 Speaker 5: because I don't think I've ever come across anybody in 181 00:08:08,720 --> 00:08:11,080 Speaker 5: my life that has anything negative to say about Canada. 182 00:08:11,800 --> 00:08:15,840 Speaker 5: But you know, so, I'm not sure how how President's comments, 183 00:08:15,880 --> 00:08:18,120 Speaker 5: how reflective they are of US folks, But how did 184 00:08:18,120 --> 00:08:19,160 Speaker 5: the people in Canada feel? 185 00:08:22,680 --> 00:08:24,800 Speaker 6: Just as Mark Carney didn't find the comments from the 186 00:08:24,840 --> 00:08:26,840 Speaker 6: President about the fifty first state as a joke, nobody 187 00:08:26,840 --> 00:08:29,040 Speaker 6: with whom I've spoken has found them funny as well, 188 00:08:29,120 --> 00:08:31,240 Speaker 6: So they've taken it as a real serious threat also, 189 00:08:31,640 --> 00:08:33,280 Speaker 6: And there's a sensus you talk to people here as 190 00:08:33,320 --> 00:08:35,319 Speaker 6: I have over the last few days, of just kind 191 00:08:35,320 --> 00:08:37,800 Speaker 6: of bewilderment why the circumstances are that the way they are. 192 00:08:38,200 --> 00:08:40,240 Speaker 6: They listened to President Trump, they listened to that rhetoric, 193 00:08:40,280 --> 00:08:41,800 Speaker 6: and they wonder sort of how they got here in 194 00:08:41,880 --> 00:08:44,400 Speaker 6: light of what you're talking about, Paul, which is this 195 00:08:44,440 --> 00:08:46,840 Speaker 6: is an allyship. This is a partnership that's existed for 196 00:08:47,280 --> 00:08:50,360 Speaker 6: a couple centuries now, a very happy and important allyship 197 00:08:50,360 --> 00:08:51,079 Speaker 6: of two nations. 198 00:08:51,320 --> 00:08:51,959 Speaker 3: And to see it. 199 00:08:51,960 --> 00:08:54,360 Speaker 6: Kind of changed in fundamentally in the way that it 200 00:08:54,400 --> 00:08:56,680 Speaker 6: has been over the last few months has really astounded 201 00:08:56,679 --> 00:08:58,320 Speaker 6: people here. And I'm going back to what the Prime 202 00:08:58,360 --> 00:09:01,559 Speaker 6: Minister has said here. We're surprised by that rhetoric to 203 00:09:01,600 --> 00:09:03,800 Speaker 6: begin with, but they've moved past that, as Mark Karney says, 204 00:09:03,800 --> 00:09:05,360 Speaker 6: and now they have to kind of plot a new 205 00:09:05,400 --> 00:09:08,319 Speaker 6: path forward that's going to take place in those negotiations 206 00:09:08,320 --> 00:09:10,480 Speaker 6: in the White House, but also in just the way 207 00:09:10,559 --> 00:09:13,599 Speaker 6: that the Liberal Party government here under Mark Karney is 208 00:09:13,640 --> 00:09:16,960 Speaker 6: looking at the world and kind of rethinking relationships with 209 00:09:17,080 --> 00:09:19,520 Speaker 6: other countries. And we've seen that over his rather short 210 00:09:19,520 --> 00:09:21,720 Speaker 6: prime ministership so far. He's made trips to Europe of 211 00:09:21,720 --> 00:09:24,079 Speaker 6: course into England as well. He's trying to find new 212 00:09:24,120 --> 00:09:26,920 Speaker 6: outlets for Canadian products and sort of new arrangements, new 213 00:09:26,920 --> 00:09:30,120 Speaker 6: relationships for Canada engage in as the US kind of falls. 214 00:09:29,880 --> 00:09:30,280 Speaker 3: To the side. 215 00:09:30,400 --> 00:09:32,959 Speaker 2: All Right, David really great reporting. Thank you so very much. 216 00:09:33,040 --> 00:09:36,040 Speaker 2: David Gert. He's the host of Bloomberg a Big Take podcast, 217 00:09:36,080 --> 00:09:39,080 Speaker 2: also a correspondent for a Bloomberg News. 218 00:09:40,880 --> 00:09:44,560 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 219 00:09:44,640 --> 00:09:47,760 Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android 220 00:09:47,760 --> 00:09:51,079 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 221 00:09:51,120 --> 00:09:54,240 Speaker 1: you get your podcasts, or watch us live on YouTube. 222 00:09:54,720 --> 00:09:56,600 Speaker 2: So for the broader markets, the question is where are 223 00:09:56,600 --> 00:09:59,080 Speaker 2: those IPOs? Where's all the M and A. What happens 224 00:09:59,120 --> 00:10:01,720 Speaker 2: to private markets? We heard that report? Was it over 225 00:10:01,760 --> 00:10:04,080 Speaker 2: the weekend that Harvard wants to be offloading? Was a 226 00:10:04,080 --> 00:10:07,959 Speaker 2: Harvard or Yale, I'll fload their private equity slots because 227 00:10:07,960 --> 00:10:10,760 Speaker 2: they really need the liquidity. Joining us now is Ted Swimmer, 228 00:10:10,800 --> 00:10:14,560 Speaker 2: head of Capital Markets and Advisory at Citizens Bank. Ted, 229 00:10:14,840 --> 00:10:16,360 Speaker 2: what's your world like right now? 230 00:10:16,400 --> 00:10:16,480 Speaker 5: Like? 231 00:10:16,520 --> 00:10:18,760 Speaker 3: What are the concerns? What are the positives? 232 00:10:19,040 --> 00:10:22,920 Speaker 7: Well, good morning Alex and good morning Paul. Things have 233 00:10:23,160 --> 00:10:25,840 Speaker 7: certainly slowed over the last couple of months. From an 234 00:10:25,920 --> 00:10:29,559 Speaker 7: M and A perspective. As we entered the year, we thought, 235 00:10:29,559 --> 00:10:34,360 Speaker 7: with lower regulation, potential upbeats and earnings, that we were 236 00:10:34,360 --> 00:10:35,880 Speaker 7: going to get off to a really good start in 237 00:10:36,040 --> 00:10:38,319 Speaker 7: M and A, and it started out that way. There 238 00:10:38,360 --> 00:10:40,360 Speaker 7: was a lot of really good activity going on. But 239 00:10:40,480 --> 00:10:43,400 Speaker 7: since Liberation Day we've certainly seen things slow down a 240 00:10:43,480 --> 00:10:45,600 Speaker 7: little bit. It's hard to find a buyer and a 241 00:10:45,640 --> 00:10:48,760 Speaker 7: seller who can agree on what the next six months 242 00:10:48,800 --> 00:10:51,400 Speaker 7: of the year two years look like and therefore get 243 00:10:51,440 --> 00:10:55,080 Speaker 7: concerned about whether they should ink a deal or not. 244 00:10:55,400 --> 00:10:58,880 Speaker 7: After saying that it is still very orderly out there, 245 00:10:58,920 --> 00:11:01,320 Speaker 7: we're not seeing We're still seeing a fair amount of 246 00:11:01,320 --> 00:11:05,040 Speaker 7: conversations going on. We're still we're still our pipelines a 247 00:11:05,160 --> 00:11:08,200 Speaker 7: citizens have never been bigger. So there still feels like 248 00:11:08,240 --> 00:11:11,000 Speaker 7: a lot of activity, a lot of discussions going on. 249 00:11:11,679 --> 00:11:14,080 Speaker 7: It just feels like at the moment it's hard to 250 00:11:14,120 --> 00:11:17,480 Speaker 7: get to a actual final contract on a deal. But 251 00:11:17,840 --> 00:11:22,280 Speaker 7: it does not feel like the world the ground is crumbling. 252 00:11:22,360 --> 00:11:25,200 Speaker 7: It still feels like there's activity. We saw a couple 253 00:11:25,200 --> 00:11:28,640 Speaker 7: of deals get announced last week, so it's not the 254 00:11:28,679 --> 00:11:30,160 Speaker 7: end of the world, but it's still not as busy 255 00:11:30,160 --> 00:11:31,160 Speaker 7: as we'd hoped it would be. 256 00:11:31,360 --> 00:11:32,560 Speaker 3: Tedday, I know it's Citizens Bank. 257 00:11:32,600 --> 00:11:35,640 Speaker 5: You guys Target, and a lot of your clients are 258 00:11:35,880 --> 00:11:38,240 Speaker 5: middle size businesses and a lot of folks are saying, 259 00:11:38,440 --> 00:11:40,439 Speaker 5: you know, in the mid to smaller companies, they might 260 00:11:40,520 --> 00:11:43,760 Speaker 5: feel the tariff impact more than the larger companies, the 261 00:11:43,800 --> 00:11:47,360 Speaker 5: Amazons of the world, the Ibms of the world. Are 262 00:11:47,360 --> 00:11:49,559 Speaker 5: you hearing that from your clients that, boy, we're a 263 00:11:49,600 --> 00:11:51,840 Speaker 5: little bit more. This is going to be an issue. 264 00:11:51,920 --> 00:11:54,840 Speaker 7: It's certainly industry specific as we talk about it. I mean, 265 00:11:54,840 --> 00:11:57,280 Speaker 7: we're in the data center space and they're not all 266 00:11:57,320 --> 00:12:01,400 Speaker 7: that concerned about tariffs, but certainly those who work with China, 267 00:12:01,440 --> 00:12:05,360 Speaker 7: we have customers who have drawn on their lines to 268 00:12:05,440 --> 00:12:09,480 Speaker 7: try to build up inventory pre pre teriff effect. So 269 00:12:09,559 --> 00:12:12,600 Speaker 7: we've seen some higher loan utilization as a result of that. 270 00:12:13,679 --> 00:12:16,520 Speaker 7: So yes, we're seeing and feeling some of that, but 271 00:12:16,679 --> 00:12:19,280 Speaker 7: truly very industry specific on who's having that impact on 272 00:12:19,280 --> 00:12:20,200 Speaker 7: who isn't. 273 00:12:20,440 --> 00:12:22,360 Speaker 2: So what do you make of where the private markets 274 00:12:22,559 --> 00:12:24,600 Speaker 2: are going to go? I just was mentioning how Yale 275 00:12:24,760 --> 00:12:26,719 Speaker 2: wants to offload some of their private equity stake in 276 00:12:26,840 --> 00:12:28,960 Speaker 2: order to get some funding and get liquidity. What are 277 00:12:28,960 --> 00:12:29,719 Speaker 2: you hearing on that end? 278 00:12:30,320 --> 00:12:32,640 Speaker 7: This is a good market for private for private capital, 279 00:12:32,720 --> 00:12:36,040 Speaker 7: especially on the on the loan side, with the banks 280 00:12:36,080 --> 00:12:38,520 Speaker 7: backing up a little bit on being able to give 281 00:12:38,760 --> 00:12:42,280 Speaker 7: certainty on underwriting positions. We're seeing, uh, we're seeing some 282 00:12:42,400 --> 00:12:44,840 Speaker 7: private capital reverse trends that we saw in the first 283 00:12:44,880 --> 00:12:47,880 Speaker 7: quarter when the syndicated market was going more banks. Now 284 00:12:47,960 --> 00:12:51,920 Speaker 7: private capital has a little bit more certainty on their deals, 285 00:12:51,960 --> 00:12:55,800 Speaker 7: So we're seeing that that impacts the leverage loan market. 286 00:12:55,960 --> 00:12:58,440 Speaker 7: What on the offset, it gives banks a lot of 287 00:12:58,880 --> 00:13:01,120 Speaker 7: a lot of ability to len to the direct lenders, 288 00:13:01,200 --> 00:13:04,560 Speaker 7: lend to the private capital, do equity issuances, do bond 289 00:13:04,600 --> 00:13:07,640 Speaker 7: issuances as those markets come back, So it works in 290 00:13:07,679 --> 00:13:10,360 Speaker 7: both ways. But we're seeing private capital have a really 291 00:13:10,400 --> 00:13:13,800 Speaker 7: good opportunity to put some loans to work on deals 292 00:13:13,800 --> 00:13:17,000 Speaker 7: that are more difficult time getting done the syndicated market 293 00:13:17,080 --> 00:13:18,880 Speaker 7: right now. So there's some good and some bad, I 294 00:13:18,920 --> 00:13:20,960 Speaker 7: think with everything with what's going on in the market 295 00:13:21,000 --> 00:13:21,440 Speaker 7: right now. 296 00:13:21,840 --> 00:13:24,760 Speaker 5: You know, for my Wall Street days, I remember being 297 00:13:24,760 --> 00:13:28,720 Speaker 5: taught early early on that MNY activity in large part 298 00:13:29,120 --> 00:13:33,560 Speaker 5: is based upon confidence and certainty. The more a c 299 00:13:33,640 --> 00:13:36,800 Speaker 5: suite and a board feels about their business, more confident 300 00:13:36,840 --> 00:13:40,160 Speaker 5: they feel about the trends in the industry, more aggressive 301 00:13:40,160 --> 00:13:41,920 Speaker 5: they can be in terms of making a big capital 302 00:13:41,960 --> 00:13:45,280 Speaker 5: commitment or making a big m and a trade that 303 00:13:45,320 --> 00:13:49,240 Speaker 5: doesn't seem like the environment we're in today. 304 00:13:49,280 --> 00:13:53,360 Speaker 7: Again, it's industry specific, so I would agree with you, Paul. 305 00:13:53,360 --> 00:13:58,280 Speaker 7: In certain areas where tariffs or policy may have an impact, 306 00:13:58,720 --> 00:14:01,280 Speaker 7: it seems like the the M and A processes are 307 00:14:01,280 --> 00:14:04,000 Speaker 7: being delayed a little bit till there's more certainty around 308 00:14:04,080 --> 00:14:07,600 Speaker 7: what's going on. In other places, we feel very good 309 00:14:07,640 --> 00:14:11,400 Speaker 7: about people need to transact. What's different about what's going 310 00:14:11,440 --> 00:14:13,160 Speaker 7: on here than we've seen in a lot of other 311 00:14:13,240 --> 00:14:17,200 Speaker 7: markets is the loan market, the bomb market are acting orderly. 312 00:14:17,240 --> 00:14:20,240 Speaker 7: There's still there. We're not seeing a time where there's 313 00:14:20,240 --> 00:14:22,280 Speaker 7: not execution of deals. We've seen people go to the 314 00:14:22,280 --> 00:14:24,360 Speaker 7: bomb market today, we're seeing them go, we saw them 315 00:14:24,400 --> 00:14:26,960 Speaker 7: go last week. So that we're not in a frozen 316 00:14:27,000 --> 00:14:30,040 Speaker 7: period of time, and so if you're in an industry 317 00:14:30,160 --> 00:14:32,480 Speaker 7: where it's not going to be impacted by terraffs, we're 318 00:14:32,520 --> 00:14:35,760 Speaker 7: still seeing not robust M and A flow by any 319 00:14:35,760 --> 00:14:37,800 Speaker 7: stretch of the imagination, but we're certainly not seeing us 320 00:14:37,800 --> 00:14:39,360 Speaker 7: shut down of the market altogether. 321 00:14:40,160 --> 00:14:42,600 Speaker 2: What do you think brings back the animal spirits? Like 322 00:14:42,600 --> 00:14:45,160 Speaker 2: what specifically what we need to see And I know 323 00:14:45,280 --> 00:14:47,640 Speaker 2: everyone's going to say clarity on tariffs but in theory, 324 00:14:47,720 --> 00:14:50,800 Speaker 2: like what is that that your clients are like, press. 325 00:14:50,600 --> 00:14:51,240 Speaker 3: The go button. 326 00:14:52,480 --> 00:14:54,200 Speaker 7: I won't say what you just said not to say, 327 00:14:54,240 --> 00:14:55,640 Speaker 7: which is clarity. 328 00:14:55,640 --> 00:14:57,560 Speaker 3: Everyone's like that, but something more more. 329 00:14:57,480 --> 00:14:59,680 Speaker 7: Pots I think as more of this goes on, look 330 00:14:59,720 --> 00:15:02,760 Speaker 7: there there's still a lot of money sitting on the sidelines, 331 00:15:03,280 --> 00:15:07,040 Speaker 7: looking to make acquisitions, looking to expand businesses. I think 332 00:15:07,120 --> 00:15:10,400 Speaker 7: corporates have a decent I mean, we saw Global Payments 333 00:15:10,480 --> 00:15:14,000 Speaker 7: last week make a very nice acquisition, and so we're 334 00:15:14,040 --> 00:15:17,000 Speaker 7: seeing some of that still go on in today's market. 335 00:15:18,680 --> 00:15:22,280 Speaker 7: I think we will continue to see those non tariff 336 00:15:22,320 --> 00:15:26,920 Speaker 7: related businesses continue to make acquisitions. The headlines our M 337 00:15:26,920 --> 00:15:29,800 Speaker 7: and A is down, and that is factually correct, but 338 00:15:29,920 --> 00:15:33,760 Speaker 7: it is still we are still seeing and feeling conversations 339 00:15:33,760 --> 00:15:37,040 Speaker 7: going on in a lot of different industries, which I 340 00:15:37,080 --> 00:15:38,800 Speaker 7: don't think it's going to take a lot to bring 341 00:15:38,880 --> 00:15:43,280 Speaker 7: those deals to completion and continue to build some momentum 342 00:15:43,280 --> 00:15:44,680 Speaker 7: into the M and A markets. I think they are 343 00:15:44,680 --> 00:15:47,240 Speaker 7: going to be certain industries we won't see things happen 344 00:15:47,360 --> 00:15:49,560 Speaker 7: for six months to a year or maybe longer, but 345 00:15:50,680 --> 00:15:54,000 Speaker 7: I don't know that that's going to impact the whole 346 00:15:54,120 --> 00:15:56,680 Speaker 7: M and A market like it did in during COVID, 347 00:15:56,760 --> 00:15:58,720 Speaker 7: or it did in twenty twenty three right after the 348 00:15:58,720 --> 00:16:01,120 Speaker 7: banks filed, or it did out in the Great Recession. 349 00:16:01,640 --> 00:16:03,560 Speaker 7: I think we're in a different market and we're feeling 350 00:16:03,600 --> 00:16:08,880 Speaker 7: different things right now. Again, we've seen transactions getting get 351 00:16:08,920 --> 00:16:11,280 Speaker 7: announced even last week during all the noise that was 352 00:16:11,320 --> 00:16:12,760 Speaker 7: going on about. 353 00:16:12,480 --> 00:16:14,920 Speaker 5: The IPO market. Let's look at one stub hub. You 354 00:16:14,920 --> 00:16:16,800 Speaker 5: guys are named a co manager on that deal. That 355 00:16:16,800 --> 00:16:18,240 Speaker 5: seems like a deal that would walk out the door. 356 00:16:18,320 --> 00:16:20,720 Speaker 5: Give us talk to us about stuff up as just 357 00:16:20,760 --> 00:16:22,320 Speaker 5: emblematic of what's happening in the IO. 358 00:16:22,480 --> 00:16:24,760 Speaker 7: I think you need in the IPO market to really 359 00:16:24,800 --> 00:16:27,160 Speaker 7: take off. That's where you really need confidence and you 360 00:16:27,240 --> 00:16:30,680 Speaker 7: need consistency. There are a couple of insurance deals that 361 00:16:30,720 --> 00:16:33,200 Speaker 7: we hope to get announced shortly that we think would 362 00:16:33,240 --> 00:16:36,080 Speaker 7: be another area that we could see the I P 363 00:16:36,200 --> 00:16:38,800 Speaker 7: O markets start to pick up. But it's still very 364 00:16:39,080 --> 00:16:41,920 Speaker 7: tough to test the markets right now with the fear 365 00:16:41,960 --> 00:16:44,720 Speaker 7: that you know, something in the middle of your your 366 00:16:44,880 --> 00:16:47,640 Speaker 7: your issue, your issuance day, would would hurt creater the stock. 367 00:16:47,760 --> 00:16:50,720 Speaker 7: So there's a lot there on the siland is there 368 00:16:50,760 --> 00:16:52,400 Speaker 7: a lot there ready to go? Stub Hub is a 369 00:16:52,400 --> 00:16:55,800 Speaker 7: good example of something that may go could go. I 370 00:16:55,840 --> 00:16:57,479 Speaker 7: don't have no even. 371 00:16:57,320 --> 00:16:59,120 Speaker 3: Maybe going could be going for how long. 372 00:16:59,080 --> 00:17:05,040 Speaker 7: Now, But there are industries that are not going to 373 00:17:05,040 --> 00:17:07,480 Speaker 7: be impacted like this that I think you will see 374 00:17:07,840 --> 00:17:10,040 Speaker 7: as soon as there's a little more stability in the market, 375 00:17:10,119 --> 00:17:12,800 Speaker 7: tests the markets and bring the markets out all. 376 00:17:12,760 --> 00:17:14,560 Speaker 3: Right, Ted, really appreciate it. Thank you for coming in. 377 00:17:14,640 --> 00:17:16,879 Speaker 2: Also great to see you, Ted Swimmer, head of Capital 378 00:17:16,880 --> 00:17:20,240 Speaker 2: Markets and Advisory at Citizens Bank, joining us in capital markets, 379 00:17:20,240 --> 00:17:22,800 Speaker 2: IPO private, all the good stuff. 380 00:17:24,359 --> 00:17:28,080 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 381 00:17:28,160 --> 00:17:31,199 Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android 382 00:17:31,240 --> 00:17:34,560 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 383 00:17:34,600 --> 00:17:37,720 Speaker 1: you get your podcasts, or watch us live on YouTube. 384 00:17:37,920 --> 00:17:39,720 Speaker 5: If you listen to this programming, know Alex and I 385 00:17:39,760 --> 00:17:41,399 Speaker 5: really like to stay on top of the commercial real 386 00:17:41,480 --> 00:17:44,080 Speaker 5: estate business, certainly one of the businesses that was impacted 387 00:17:44,119 --> 00:17:49,000 Speaker 5: dramatically by COVID and in denounce long long recovery. Here 388 00:17:49,040 --> 00:17:51,399 Speaker 5: now in the midst of higher interest rates. Today we're 389 00:17:51,440 --> 00:17:54,480 Speaker 5: going to check out with Ben Miller, CEO of fund Rise, 390 00:17:54,840 --> 00:17:58,280 Speaker 5: joining us Washington, DC via zoom. Ben, I think when 391 00:17:58,320 --> 00:18:00,199 Speaker 5: you look at the stock market, the bond mark, at 392 00:18:00,240 --> 00:18:01,240 Speaker 5: the commodity markets. 393 00:18:01,480 --> 00:18:01,920 Speaker 1: You know, the. 394 00:18:02,000 --> 00:18:07,120 Speaker 5: Common word is probably just uncertainty out there, volatility out there. 395 00:18:07,320 --> 00:18:09,360 Speaker 5: How about the commercial real estate market? What's the last 396 00:18:09,359 --> 00:18:11,240 Speaker 5: three months been in that space? 397 00:18:12,520 --> 00:18:15,239 Speaker 8: The irony for real estate is bad news is good 398 00:18:15,320 --> 00:18:18,480 Speaker 8: news because interest rates have been higher for longer, for 399 00:18:18,520 --> 00:18:21,280 Speaker 8: the last few years, that's been weighing on real estate, 400 00:18:21,480 --> 00:18:25,080 Speaker 8: especially commercial real estate, and so anything that brings down 401 00:18:25,160 --> 00:18:27,600 Speaker 8: rates is going to be a boon for commercial real 402 00:18:27,720 --> 00:18:32,760 Speaker 8: estate owners. And so uncertainty, tariffs, recession, those are all great, 403 00:18:33,119 --> 00:18:34,800 Speaker 8: great words for real estate industry. 404 00:18:35,840 --> 00:18:39,840 Speaker 5: So where so that driven primarily by lower rates? I 405 00:18:39,880 --> 00:18:42,480 Speaker 5: get that, Where do you think the best opportunities are 406 00:18:42,520 --> 00:18:44,480 Speaker 5: here in commercial real estate? 407 00:18:45,920 --> 00:18:51,239 Speaker 8: Well, so, the functional effect of tariffs is that it 408 00:18:51,320 --> 00:18:54,760 Speaker 8: makes existing assets worth more. So my analogy is always 409 00:18:54,840 --> 00:18:57,040 Speaker 8: if I had one thousand cars on my lot, If 410 00:18:57,080 --> 00:18:58,600 Speaker 8: I was a dealer car dealer, and I had a 411 00:18:58,640 --> 00:19:01,280 Speaker 8: thousand cars on my lot, put a fifty percent tariffs 412 00:19:01,280 --> 00:19:04,639 Speaker 8: on all new cars, right, all those existing cars, all 413 00:19:04,680 --> 00:19:07,480 Speaker 8: the car inventory on my lots across the country be 414 00:19:07,520 --> 00:19:09,720 Speaker 8: worth more because the price just went up. And so 415 00:19:09,760 --> 00:19:13,280 Speaker 8: all the existing inventory of apartments and other assets are 416 00:19:13,280 --> 00:19:15,640 Speaker 8: going to be worth a lot more with tariffs, and 417 00:19:15,680 --> 00:19:19,000 Speaker 8: so it's a tax on flow and as a gift 418 00:19:19,040 --> 00:19:20,720 Speaker 8: to stock, if you know what I mean. 419 00:19:21,320 --> 00:19:24,280 Speaker 3: But what about the volatility? So rates are one thing, 420 00:19:25,040 --> 00:19:25,840 Speaker 3: stock is another. 421 00:19:25,920 --> 00:19:29,120 Speaker 2: But the volatility and uncertainty, how does that affect sentiment 422 00:19:29,200 --> 00:19:29,800 Speaker 2: in your market? 423 00:19:30,840 --> 00:19:31,080 Speaker 7: Yeah? 424 00:19:31,119 --> 00:19:33,880 Speaker 8: I mean real estate is a much slower moving asset. 425 00:19:33,960 --> 00:19:37,479 Speaker 8: It's it doesn't trade very often. People don't reorder their 426 00:19:37,560 --> 00:19:43,040 Speaker 8: leases very often, so it's much more It has much 427 00:19:43,040 --> 00:19:47,720 Speaker 8: more installation from volatility. I mean, because you can't really 428 00:19:47,760 --> 00:19:50,760 Speaker 8: trade it. That volatility doesn't matter as much as it 429 00:19:50,800 --> 00:19:52,200 Speaker 8: does for stocks or bonds. 430 00:19:53,320 --> 00:19:57,000 Speaker 5: But if the uncertainty, not necessarily the terifts per se, 431 00:19:57,000 --> 00:20:00,440 Speaker 5: but at the uncertainty push it or slows this economy ramatically, 432 00:20:00,480 --> 00:20:02,080 Speaker 5: maybe even pushes us into a recession. 433 00:20:02,640 --> 00:20:05,760 Speaker 8: That can't be good for real estate. Well, it depends 434 00:20:05,880 --> 00:20:07,960 Speaker 8: on the kind of real estate you mean. So office, 435 00:20:08,440 --> 00:20:11,199 Speaker 8: which has already been hit by work from home, is 436 00:20:11,359 --> 00:20:15,359 Speaker 8: very pro cyclical, so people only expand office space and 437 00:20:15,480 --> 00:20:18,120 Speaker 8: new leases when the economy's hot. The economy's cold, office 438 00:20:18,200 --> 00:20:20,560 Speaker 8: is going to get hit again. I think office could 439 00:20:20,600 --> 00:20:25,879 Speaker 8: go from bad to worse. But consumer staples like food groceries. Housing, 440 00:20:26,280 --> 00:20:28,640 Speaker 8: you've got to live somewhere, you gotta eat something. Those 441 00:20:28,720 --> 00:20:31,000 Speaker 8: actually end up doing pretty well in a recession, and 442 00:20:31,080 --> 00:20:34,840 Speaker 8: so multi family housing I think will really outperform. And 443 00:20:35,000 --> 00:20:39,000 Speaker 8: low rates rates matter a lot more than the economy, 444 00:20:39,040 --> 00:20:41,040 Speaker 8: and so if rates come down like I think they will, 445 00:20:41,520 --> 00:20:44,720 Speaker 8: it's going to be a win for most commercial estate. 446 00:20:45,359 --> 00:20:48,080 Speaker 2: Yeah, and then in terms of construction and new building 447 00:20:48,080 --> 00:20:50,159 Speaker 2: and materials like either that's going to get a lot 448 00:20:50,200 --> 00:20:52,480 Speaker 2: more expensive or as we're talking about, that's going to 449 00:20:52,520 --> 00:20:55,720 Speaker 2: get a lot tighter, which then if you own already 450 00:20:55,720 --> 00:20:56,720 Speaker 2: those buildings, that's better. 451 00:20:56,800 --> 00:20:56,919 Speaker 8: Right. 452 00:20:56,920 --> 00:20:58,360 Speaker 3: What are you seeing right now currently? 453 00:20:59,320 --> 00:20:59,520 Speaker 4: Right? 454 00:20:59,560 --> 00:21:03,200 Speaker 8: I mean, there was a absolute housing boom in twenty 455 00:21:03,240 --> 00:21:06,119 Speaker 8: twenty one twenty twenty two there because rates were so 456 00:21:06,200 --> 00:21:09,719 Speaker 8: low and demand was so high, and so we just 457 00:21:09,920 --> 00:21:12,240 Speaker 8: are working on our way through I think the largest 458 00:21:12,240 --> 00:21:16,800 Speaker 8: supply of new housing in decades. So that that hit 459 00:21:16,840 --> 00:21:20,159 Speaker 8: the market last year, it'll be sort of done by 460 00:21:20,160 --> 00:21:21,879 Speaker 8: the end of this year, and then we'll kind of 461 00:21:21,920 --> 00:21:23,600 Speaker 8: fall off a cliff and we'll end up with no 462 00:21:23,720 --> 00:21:30,359 Speaker 8: new construction, high rates, expensive construction costs, tariffs, uncertainty. Bank 463 00:21:30,440 --> 00:21:33,320 Speaker 8: lending is still pretty tight. I think we'll see sort 464 00:21:33,320 --> 00:21:36,880 Speaker 8: of the end of new construction for maybe this decade. 465 00:21:36,920 --> 00:21:40,400 Speaker 8: And that's again that's great for owners and maybe bad 466 00:21:40,440 --> 00:21:41,320 Speaker 8: for renters. 467 00:21:41,840 --> 00:21:44,200 Speaker 5: Ben talk to us about Florida. It's been a market 468 00:21:44,200 --> 00:21:46,160 Speaker 5: that really just goes up and down. It's had such 469 00:21:46,240 --> 00:21:50,520 Speaker 5: a multi year growth spurt coming out of the pandemic. 470 00:21:50,760 --> 00:21:52,600 Speaker 5: What's the state of the Florida I don't know the 471 00:21:52,640 --> 00:21:54,520 Speaker 5: apartment market any of that kind of stuff. 472 00:21:55,240 --> 00:21:57,280 Speaker 8: Yeah, I mean Florida I got hit by a climate 473 00:21:57,400 --> 00:22:00,480 Speaker 8: change too. I mean it was a really big hit 474 00:22:00,560 --> 00:22:04,040 Speaker 8: on insurance costs. It caused a lot of owners to 475 00:22:04,280 --> 00:22:09,080 Speaker 8: have second thoughts. The short term effect of a lot 476 00:22:09,119 --> 00:22:11,560 Speaker 8: of new supply in the market and insurance costs hit 477 00:22:11,640 --> 00:22:13,639 Speaker 8: Texas to Texas had a lot of challenges. So those 478 00:22:13,680 --> 00:22:16,160 Speaker 8: two markets have sort of the most growth and had 479 00:22:16,160 --> 00:22:19,360 Speaker 8: the most negatives. And in the short term, I think 480 00:22:19,400 --> 00:22:23,120 Speaker 8: Florida really, you know, doesn't doesn't look as good as 481 00:22:23,119 --> 00:22:24,800 Speaker 8: some of the other parts of the of the Sun Belt, 482 00:22:24,840 --> 00:22:29,639 Speaker 8: like you know, North Carolina, South Carolina, Georgia. But in 483 00:22:29,760 --> 00:22:33,960 Speaker 8: the more medium term, Florida and Texas just gets so 484 00:22:34,080 --> 00:22:36,600 Speaker 8: much more population growth in any other state. I mean, 485 00:22:36,600 --> 00:22:37,960 Speaker 8: some between the two of them that get over a 486 00:22:38,000 --> 00:22:41,159 Speaker 8: million people a year moving there, and over that like 487 00:22:41,240 --> 00:22:44,479 Speaker 8: three to five year period between migration and population growth. 488 00:22:44,840 --> 00:22:47,639 Speaker 8: I think that Florida and Texas will be just fine, 489 00:22:47,760 --> 00:22:52,320 Speaker 8: But in the short term is not that pretty all right. 490 00:22:52,240 --> 00:22:55,160 Speaker 2: Well, we appreciate the update. Let's keep talking and see 491 00:22:55,240 --> 00:22:57,160 Speaker 2: kind of how this all evolves. Ben Miller, co founder 492 00:22:57,200 --> 00:23:00,440 Speaker 2: and CEO at fund Rise, on the state of commercial illstate. 493 00:23:00,760 --> 00:23:05,480 Speaker 1: This is the Bloomberg Intelligence podcast, available on Apple, Spotify, 494 00:23:05,640 --> 00:23:09,120 Speaker 1: and anywhere else you get your podcasts. Listen live each 495 00:23:09,160 --> 00:23:12,920 Speaker 1: weekday ten am to noon Eastern on Bloomberg dot Com, 496 00:23:13,040 --> 00:23:16,560 Speaker 1: the iHeartRadio app tune In, and the Bloomberg Business app. 497 00:23:17,000 --> 00:23:19,880 Speaker 1: You can also watch us live every weekday on YouTube 498 00:23:20,320 --> 00:23:22,560 Speaker 1: and always on the Bloomberg terminal.