WEBVTT - How Does Wall Street Feel About Trump Now? 0:00:02.720 --> 0:00:12.400 Bloomberg Audio Studios, Podcasts, Radio NEWSOM. I'm Nancy Cook, a 0:00:12.440 --> 0:00:16.560 senior national political correspondent for Bloomberg News, in for Stephanie Flanders. 0:00:16.640 --> 0:00:20.560 This week, Welcome to trump Anomics, the Bloomberg podcast that 0:00:20.600 --> 0:00:23.360 looks at the economic world of Donald Trump, how he 0:00:23.400 --> 0:00:26.160 has already shaped the global economy and what on earth 0:00:26.200 --> 0:00:29.360 is going to happen next. So this week we're bringing 0:00:29.360 --> 0:00:31.880 the focus back from Europe and the Middle East and 0:00:31.960 --> 0:00:34.960 asking a question that centers around the mood on Wall Street. 0:00:35.400 --> 0:00:38.919 Our bankers still celebrating Trump's return. What does the way 0:00:39.000 --> 0:00:41.760 Wall Street is moving money tell us about their feelings 0:00:42.360 --> 0:00:44.519 with me from our offices in New York. Are our 0:00:44.520 --> 0:00:48.760 two star reporters from our finance team, schreidhar naderin our 0:00:48.880 --> 0:00:52.279 chief Wall Street correspondent. Welcome Stree. I thought of you 0:00:52.360 --> 0:00:54.200 as soon as I wanted to do this story because 0:00:54.200 --> 0:00:56.520 we had so much fun together at the Democratic National 0:00:56.520 --> 0:00:57.920 Convention in August. 0:00:58.040 --> 0:00:59.959 And how different was the mood back then. I think 0:01:00.120 --> 0:01:02.560 I remember we were tripsing through that convention floor with 0:01:02.600 --> 0:01:05.959 all the balloons falling down. Unfortunately for the Democrats, that 0:01:06.080 --> 0:01:08.200 mood did not carry over into November. 0:01:08.480 --> 0:01:11.240 You are so right. And then Hannah Lovett, who covers 0:01:11.319 --> 0:01:13.920 JP Morgan and Morgan Stanley and has been speaking with 0:01:13.959 --> 0:01:17.199 a lot of executives in the last few months. Welcome Hannah, Hey, 0:01:17.240 --> 0:01:20.200 thank you for having me. Of course, so it's probably 0:01:20.200 --> 0:01:23.399 worth remembering. We got an early read on how bank 0:01:23.480 --> 0:01:26.360 executives were viewing Donald Trump's return to the White House 0:01:26.400 --> 0:01:29.720 at the World Economic Forum in Davos this year. They were, 0:01:29.760 --> 0:01:32.520 for the most part elated about the prospect of fewer 0:01:32.560 --> 0:01:37.560 regulations and more deals. The consensus was a market focused 0:01:37.560 --> 0:01:40.039 deal maker was at the helm of the US economy 0:01:40.400 --> 0:01:43.120 and that would present a new era of opportunity with 0:01:43.240 --> 0:01:46.120 money to be made. So here we are, roughly one 0:01:46.160 --> 0:01:49.960 month later, and how to finance executives feel now and 0:01:50.080 --> 0:01:53.000 what can we learn beyond the rhetoric and more the 0:01:53.040 --> 0:02:02.440 actual trades. Sree, why don't we start with you? 0:02:03.120 --> 0:02:06.560 If you want a good proxy for feelings and vibes 0:02:06.600 --> 0:02:09.120 on Wall Street, I think the best indicator is obviously 0:02:09.160 --> 0:02:12.120 the stock price for those individual companies and their firms. 0:02:12.160 --> 0:02:14.720 And if you look at what's happened since November fifth, 0:02:14.760 --> 0:02:17.919 since the night of the election, we've pretty much had 0:02:17.960 --> 0:02:20.560 a consistent charge up on some of the major stocks 0:02:20.600 --> 0:02:23.200 Goldman Sachs all time high, JP, Morgan all time high. 0:02:23.560 --> 0:02:26.800 The private equity stocks have also been climbing since November. 0:02:27.000 --> 0:02:29.880 So the feeling there at least the immediate reaction to 0:02:29.960 --> 0:02:33.400 the result has been this will be good for big business, 0:02:33.400 --> 0:02:35.679 This will be good for big Wall Street. One of 0:02:35.720 --> 0:02:39.200 the points you just mentioned was deal making. We've so 0:02:39.400 --> 0:02:43.280 far had about five hundred and sixty billion dollars worth 0:02:43.320 --> 0:02:46.760 of deals announced globally quarter to date, which is a 0:02:46.800 --> 0:02:48.960 decent number. But if I go back to Q one 0:02:49.040 --> 0:02:52.560 twenty twenty four, that number was nine hundred and sixty billion. 0:02:52.840 --> 0:02:55.400 That explains why. When Wall Street executors were talking at 0:02:55.440 --> 0:02:58.239 a major financial services conference last week, one of the 0:02:58.360 --> 0:03:01.640 questions that analysts kept asking them was, you've all talked 0:03:01.680 --> 0:03:04.560 about this pickup and deal making, Why has it not 0:03:04.639 --> 0:03:08.240 really materialized. It feels slower than it should be, And 0:03:08.280 --> 0:03:10.919 the answer was truly, yes, it is slower. We're having 0:03:10.960 --> 0:03:15.120 a lot more conversations. A lot of these dealmaking discussions 0:03:15.120 --> 0:03:18.360 are at the five yard line. They've just not converted. 0:03:18.520 --> 0:03:21.320 You could have the gusher open anytime. But it does 0:03:21.400 --> 0:03:23.920 go back to the idea that yes, there are a 0:03:23.919 --> 0:03:26.839 lot of things about the Trump administration and the way 0:03:26.880 --> 0:03:29.880 they talk to big business and about big business that 0:03:31.240 --> 0:03:35.280 automatically generates this sense of enthusiasm and hope for these companies. 0:03:36.000 --> 0:03:39.880 But there is also the Trumpian policy uncertainty that they 0:03:39.880 --> 0:03:42.160 have to deal with. When you have all the questions 0:03:42.200 --> 0:03:46.280 about tariffs and it attacks policy changing one day to 0:03:46.320 --> 0:03:50.040 the other, and Trump's attention span going from his one 0:03:50.080 --> 0:03:52.800 favorite subject to perhaps something else the next day, and 0:03:52.840 --> 0:03:55.040 not showing which one will come through and which one 0:03:55.080 --> 0:03:58.640 will fall by the wayside. That does create a little 0:03:58.680 --> 0:04:00.880 bit of an obstacle for business, and they'll have to 0:04:00.880 --> 0:04:02.520 figure out a good way to navigate it. 0:04:02.560 --> 0:04:05.640 On that, Hannah, you've been talking to a lot of executives. 0:04:05.680 --> 0:04:08.640 I wonder how they're feeling about that point that Tree 0:04:08.680 --> 0:04:10.880 brings up about the tariffs. You know, I know that 0:04:10.920 --> 0:04:13.840 they are excited about the possibility of lower taxes and 0:04:13.920 --> 0:04:17.479 less regulation. But the tariff policy, my reporting shows it 0:04:17.520 --> 0:04:20.479 is really uncertain, And I wonder how executives are feeling 0:04:20.520 --> 0:04:20.880 about that. 0:04:21.440 --> 0:04:24.280 Yeah, totally, So, I would say to Shred's point, there's 0:04:24.320 --> 0:04:31.239 still broadly this palpable optimism. Various bank executives have described 0:04:31.279 --> 0:04:33.360 it as animal spirits and all of that. But it's 0:04:33.360 --> 0:04:36.560 a bit more CAVEATD today than it was a couple 0:04:36.680 --> 0:04:40.640 months ago and even a few weeks ago before inauguration, 0:04:41.000 --> 0:04:44.560 and that really stems from just kind of all the 0:04:44.680 --> 0:04:47.880 uncertainty and some of these executives, you know, whether it 0:04:47.920 --> 0:04:52.320 be bank executives or you know, CEOs of companies that 0:04:52.360 --> 0:04:56.400 they bank and things like that, they need more certainty 0:04:56.480 --> 0:04:59.279 before they move forward with these strategic actions like you know, 0:04:59.360 --> 0:05:02.680 deals or IPOs and all of that. And the tariffs 0:05:02.720 --> 0:05:08.360 are an element of that. You know. I covered JP Morgan, 0:05:08.400 --> 0:05:11.239 as you said, and Jamie Diamond, the CEO there, said 0:05:11.800 --> 0:05:15.320 last month that tariffs, if they're properly used, can be 0:05:15.360 --> 0:05:19.520 effective to resolve things like unfair competition, national security things 0:05:19.560 --> 0:05:22.200 like that, but they can also do damage if they're misused. 0:05:22.400 --> 0:05:26.000 And he's described Trump as a negotiator and said that 0:05:26.040 --> 0:05:27.919 tariff talk will get people to the table. But I 0:05:27.960 --> 0:05:30.720 think there's a bit of a wait and see attitude 0:05:30.800 --> 0:05:32.800 as far as how all of that shakes out now. 0:05:32.839 --> 0:05:35.640 On the market side, though, the you know, these banks 0:05:35.640 --> 0:05:39.160 have these huge trading desks, and it spells more of 0:05:39.160 --> 0:05:43.120 an opportunity on that, you know, market moves, volatility, you 0:05:43.160 --> 0:05:47.480 know that that translates generally into banks making money on 0:05:47.560 --> 0:05:50.200 those trades. So that has continued. We saw some of 0:05:50.240 --> 0:05:52.560 that in the fourth quarter, and it seems like that's 0:05:52.600 --> 0:05:53.800 continued into the first quarter. 0:05:54.040 --> 0:05:56.080 And if I could quickly jump in and thinking back 0:05:56.120 --> 0:05:58.159 to the time when Hannah and I started working together 0:05:58.200 --> 0:06:02.200 about seven years ago, now there was this predominant concept, 0:06:02.240 --> 0:06:04.479 you know, when we talked about volatility in markets and 0:06:04.520 --> 0:06:07.320 how it impacted the trading desk, the markets businesses of 0:06:07.400 --> 0:06:10.719 these big banks. The talk was always around whether it's 0:06:11.040 --> 0:06:15.040 good volatility or bad volatility. Funnily enough, I think in 0:06:15.040 --> 0:06:16.880 the last couple of years, especially with a lot of 0:06:17.000 --> 0:06:20.320 changes that have been made, banks have gotten themselves into 0:06:20.360 --> 0:06:22.960 a position where and look, if there is a massive 0:06:23.000 --> 0:06:25.800 market correction, yes, they would also be affected because they're 0:06:25.839 --> 0:06:28.279 in the business of buying from one party and selling 0:06:28.279 --> 0:06:30.520 to another party. So if there are massive moves, they 0:06:30.560 --> 0:06:33.640 will be affected. But the businesses have been structured in 0:06:33.680 --> 0:06:39.400 a way that it's almost their ability to make money, 0:06:39.600 --> 0:06:43.800 their ability to transact and the revenue is almost dependent 0:06:43.839 --> 0:06:46.320 on the volume and less so on the direction of markets. 0:06:46.360 --> 0:06:49.920 And upmarket obviously helps so in general, if you look 0:06:49.960 --> 0:06:53.239 at this idea that you will have a higher uptick 0:06:53.279 --> 0:06:56.120 in volatility over the next few months, next few quarters, 0:06:56.240 --> 0:07:00.000 or perhaps throughout Trump two point zero, that will generally 0:07:00.160 --> 0:07:02.000 be good for a lot of these trading businesses. And 0:07:02.040 --> 0:07:05.000 for the biggest Wall Street firms, that is a big 0:07:05.120 --> 0:07:08.040 source of revenue, That is a major source of earnings 0:07:08.080 --> 0:07:08.400 for them. 0:07:08.600 --> 0:07:11.320 Absolutely, And I would just say JP Morgan, which has 0:07:11.360 --> 0:07:14.360 the biggest trading business on Wall Street, they had their 0:07:14.440 --> 0:07:18.120 highest fourth quarter trading revenue ever when they reported in 0:07:18.240 --> 0:07:21.320 mid January. And so that's the level of momentum that 0:07:21.480 --> 0:07:24.720 executives have since described as continuing. And I was speaking 0:07:24.760 --> 0:07:29.440 to a bank executive earlier today actually who said market 0:07:29.480 --> 0:07:32.400 movements are generally good for Wall Street unless it's a shock. 0:07:32.480 --> 0:07:34.520 So I think that really sums up, you know, ratifies 0:07:34.560 --> 0:07:35.360 what she was saying. 0:07:35.640 --> 0:07:38.200 And then I'm also curious, sort of who are the 0:07:38.840 --> 0:07:42.680 Wall Street whispers in the Trump White House. I know 0:07:42.720 --> 0:07:44.760 a big complaint of the Biden White House was that 0:07:44.800 --> 0:07:47.160 they did not have a lot of connections to Wall Street, 0:07:47.200 --> 0:07:50.280 and so I'm wondering what you're hearing about those two things. 0:07:50.640 --> 0:07:53.640 Let me first start with the second part of your question, Nancy, So, 0:07:53.720 --> 0:07:55.760 I think when we think about some of the key 0:07:55.840 --> 0:07:59.960 characters in the Trump orbit, Susie Wilds played a massive 0:08:00.160 --> 0:08:03.280 role in sort of the campaign and now at the 0:08:03.280 --> 0:08:06.040 White House. She is perhaps one of the few people 0:08:06.120 --> 0:08:08.720 in that immediate Trump circle, in that immediate group of 0:08:09.040 --> 0:08:12.840 decision makers and Trump world, who's not that well known 0:08:13.080 --> 0:08:15.560 to Wall Street. She doesn't really come from that background. 0:08:15.600 --> 0:08:17.360 Not a lot of people have had time to build 0:08:17.400 --> 0:08:21.120 connections with her. But if you move past Susie Wills, 0:08:21.360 --> 0:08:24.080 you look at the cost of other characters, Howard Lutnik, 0:08:24.360 --> 0:08:27.680 extremely well known to Wall Street, Scott Besson creature of 0:08:27.720 --> 0:08:30.280 Wall Street, extremely well known to all the major players, 0:08:30.280 --> 0:08:33.520 that even folks like Doug Bergham have been like big 0:08:33.600 --> 0:08:36.280 clients of firms like Goldman Sachs over the years. So 0:08:36.320 --> 0:08:40.080 there are enough folks in that orbit that you're very, 0:08:40.280 --> 0:08:43.439 very unlikely to hear the same complaint about this administration 0:08:43.480 --> 0:08:47.000 as you heard about the Biden administration about not having 0:08:47.040 --> 0:08:50.439 someone in there who would take their phone call, who 0:08:50.440 --> 0:08:52.800 would take a meeting with them. That's not going to 0:08:52.840 --> 0:08:56.480 be a problem in terms of what these folks are doing, 0:08:56.520 --> 0:08:58.560 what these players are doing. I was just thinking about 0:08:59.280 --> 0:09:01.360 a few memes. Hannah and I were swapping over the 0:09:01.440 --> 0:09:04.520 last couple of days about Jamie Diamond going down to 0:09:04.559 --> 0:09:07.360 Capitol Hill, and you know, folks wanted him to comment 0:09:07.440 --> 0:09:10.440 on the dismantling of the CFPB, I think, and he said, 0:09:10.480 --> 0:09:13.680 no comment, and then he pulled out this chart that 0:09:13.760 --> 0:09:17.280 he carries with him, his famous spaghetti chart that shows 0:09:17.679 --> 0:09:22.320 this wide area of regulators and the oversight they have 0:09:22.440 --> 0:09:25.520 over JP Morgan. That has been Jamie Diamond's pet pee 0:09:25.679 --> 0:09:28.079 for a long time. And it's funny that it almost 0:09:28.160 --> 0:09:31.280 has a printed outslide that he carries with him every 0:09:31.280 --> 0:09:33.240 time he goes from New York to DC. In fact, 0:09:33.280 --> 0:09:36.360 I know Hannah has some interesting color on the backstory 0:09:36.360 --> 0:09:36.880 of this chart. 0:09:37.320 --> 0:09:39.760 Well, yeah, he does bring it with him, and it's 0:09:39.800 --> 0:09:43.640 funny because it was actually originally in his twenty eleven 0:09:44.280 --> 0:09:47.720 letter to shareholders, so you know, it's more than ten 0:09:47.800 --> 0:09:50.080 years that he's had this with him. They call it 0:09:50.160 --> 0:09:54.560 the spaghetti chart kind of informally, and it has all 0:09:54.600 --> 0:09:57.960 these agencies and what they oversee and all the kind 0:09:58.000 --> 0:10:00.480 of interconnecting lines, and you know, I'm looking it right now, 0:10:00.520 --> 0:10:04.720 it's quite clear why it's called the spaghetti chart. But yeah, 0:10:04.760 --> 0:10:07.960 you know, the complaint on Wall Street over the years 0:10:07.960 --> 0:10:10.400 has been that there are too many cooks in the 0:10:10.480 --> 0:10:14.199 kitchen basically on Wall Street overside. And so yeah, when 0:10:14.200 --> 0:10:16.800 they went, when the bank CEOs went to DC last week, 0:10:16.800 --> 0:10:18.760 it is not surprising to me at all that Jamie 0:10:18.760 --> 0:10:19.600 had this chart with him. 0:10:19.920 --> 0:10:22.160 Yeah, that's one thing that I would like to think about. 0:10:22.200 --> 0:10:25.600 And it's something that maybe too if you can weigh on, 0:10:25.920 --> 0:10:29.680 is I think the biggest firms on Wall Street, the 0:10:30.000 --> 0:10:34.599 biggest banks, for instance, had gotten used to Jamie Diamond's 0:10:34.920 --> 0:10:37.960 ten year old beef a side with the regulatory agenda, 0:10:38.160 --> 0:10:40.200 had gotten used to this idea that they had to 0:10:40.320 --> 0:10:44.920 invest a lot for the regulatory needs, for the regulatory requirements. 0:10:45.120 --> 0:10:50.040 But effectively what they did was also build this wide, 0:10:50.240 --> 0:10:54.480 deep moat because most other people cannot come in and 0:10:54.640 --> 0:10:58.200 play on your turf. They if the cost of entering 0:10:58.240 --> 0:11:02.040 that business is prohibitively high. That has helped especially and 0:11:02.120 --> 0:11:05.000 I think about like the key trading businesses and some 0:11:05.040 --> 0:11:08.040 of the other key businesses that are two, three, four 0:11:08.160 --> 0:11:11.880 top players. Everyone else sort of sits outside that mode. 0:11:11.880 --> 0:11:14.920 So they've benefited greatly from that. So if you have 0:11:15.400 --> 0:11:20.040 a rapid unraveling of the regulatory agenda, doesn't it in 0:11:20.160 --> 0:11:22.640 some way backfire for these biggest players. 0:11:22.760 --> 0:11:24.720 That's a wonderful point, Hannah. Do you have any insight 0:11:24.760 --> 0:11:25.520 into them? 0:11:25.720 --> 0:11:27.840 The way that I've heard it described over the years 0:11:28.040 --> 0:11:30.520 is kind of death by a thousand cuts from the banks, 0:11:30.640 --> 0:11:33.200 which is perhaps a bit dramatic, but basically, if you 0:11:33.240 --> 0:11:38.040 go business by business, there are companies, non banks that 0:11:38.200 --> 0:11:41.560 have been able to play in that realm in a 0:11:41.600 --> 0:11:44.120 big way, but not you know, there haven't been new 0:11:44.320 --> 0:11:48.600 entrance to the kind of full on big bank systemically 0:11:48.640 --> 0:11:52.720 important category. So yeah, I think it's kind of tbd 0:11:52.880 --> 0:11:54.800 how that all shakes out, you know, in a world 0:11:54.800 --> 0:11:58.120 where there's a lot of deregulation, which you know, lets 0:11:58.120 --> 0:12:00.840 the banks do more but also lowers those barrier centry. 0:12:01.000 --> 0:12:02.720 That's a great point. And just from where I sit 0:12:02.760 --> 0:12:05.400 in Washington, you know, having done a lot of reporting 0:12:05.440 --> 0:12:08.480 in the last week on elon mus stoge efforts, so 0:12:08.640 --> 0:12:11.240 much of that group is staff by you know, tech 0:12:11.280 --> 0:12:14.120 people who I think do want to you know, less regulation, 0:12:14.200 --> 0:12:17.400 but they also want to sort of upset establish business 0:12:17.400 --> 0:12:19.760 and the status quo, and so that is quite interesting. 0:12:19.840 --> 0:12:21.640 I think that you know, just the idea that it 0:12:21.679 --> 0:12:23.760 would make it easier for other companies to come in. 0:12:24.120 --> 0:12:26.320 One of you brought up Scott Besson, who is a 0:12:26.360 --> 0:12:30.120 former hedge funder and who is now Treasury Secretary. That's 0:12:30.160 --> 0:12:32.080 going to be such a key role this year as 0:12:32.120 --> 0:12:35.120 I think about cutting taxes again, I wonder how his 0:12:35.240 --> 0:12:38.520 tenure is being viewed so far by by finance executives. 0:12:39.480 --> 0:12:41.800 I think so far they have no complaints. Scott Besson's 0:12:41.840 --> 0:12:44.000 proved to be exactly what they thought he would be. 0:12:44.640 --> 0:12:46.960 They see him as a bit of a moderating influence 0:12:47.000 --> 0:12:49.959 in Trump World. Of course, that might not really win 0:12:50.000 --> 0:12:52.840 you a lot of kudos and Trump World itself, and 0:12:52.880 --> 0:12:55.240 Scott Besson will perhaps have to do more to prove 0:12:55.320 --> 0:12:59.160 himself in Trump's in a circle, make sure he's spending 0:12:59.160 --> 0:13:01.320 more of his weekends now mar Lago instead of back 0:13:01.320 --> 0:13:03.960 at home in South Carolina. But for Wall Street and 0:13:03.960 --> 0:13:08.920 for markets in general, Scott Bessen was a choice that 0:13:08.960 --> 0:13:11.840 they all cheered, that they all welcome. They realize this 0:13:11.920 --> 0:13:15.199 is someone whose business focus, whose markets focus, and they 0:13:15.200 --> 0:13:19.720 could get behind this pick. Scott Pasant in that position 0:13:20.280 --> 0:13:22.640 is good for Wall Street, And when you think about 0:13:22.679 --> 0:13:26.760 the key proposals about taxes, lowering tax rates. Yes, Scott 0:13:26.800 --> 0:13:30.120 Bessand will champion that. The question though, is is it 0:13:30.160 --> 0:13:32.920 going to be Scott Besant who makes sure that the 0:13:32.960 --> 0:13:36.440 tax cut policy actually makes its way through Congress. I 0:13:36.480 --> 0:13:38.160 don't know how much of a say in power he 0:13:38.240 --> 0:13:41.760 will have that, especially when you consider a Congress where, 0:13:41.840 --> 0:13:44.760 especially in the House, the Republicans have a very very 0:13:44.800 --> 0:13:48.280 slim majority, and you've already seen that there are various 0:13:48.360 --> 0:13:52.959 factions today's GOP. There half the times they're battling the Democrats, 0:13:52.960 --> 0:13:55.560 but most of the times in America, majority of the 0:13:55.559 --> 0:13:59.240 time they're battling their own different factions within the GOP. 0:13:59.640 --> 0:14:01.480 And they have to figure out a way to put 0:14:01.559 --> 0:14:04.880 forward a unified front. And that is important for Wall Street. 0:14:04.920 --> 0:14:08.040 I was just looking at some numbers before coming on here. 0:14:08.360 --> 0:14:10.360 When you look at pre tax earnings that a Goldman 0:14:10.440 --> 0:14:12.760 Sachs at a Morgan Stanley, that's about twenty billion dollars 0:14:12.800 --> 0:14:17.240 a year. Let's say you can cut corporate tax rates, 0:14:17.520 --> 0:14:20.280 their effective tax rate can go down by five percent, 0:14:20.360 --> 0:14:23.000 you know, just making up a scenario which a nice 0:14:23.160 --> 0:14:26.200 round number like Donald Trump would prefer, that's about a 0:14:26.200 --> 0:14:29.200 billion dollars in savings. A billion dollars in savings is 0:14:29.320 --> 0:14:32.720 you could have a twenty thirty forty percent slow down 0:14:32.880 --> 0:14:36.280 in deal making and therefore the fees that they make 0:14:36.320 --> 0:14:38.880 from that advisory business that you know, one of the 0:14:38.960 --> 0:14:41.160 key components they've been talking about when they talk about 0:14:41.160 --> 0:14:44.640 this turbocharge deal making environment. You could still have a big, 0:14:44.760 --> 0:14:48.520 massive slow down there, and yet that savings from the 0:14:48.600 --> 0:14:52.440 tax cuts could offset that. That's how important the tax 0:14:52.480 --> 0:14:55.400 cut agenda will be for these big banks. So they 0:14:55.440 --> 0:14:58.560 would hope that Scott Besson could work his magic. More importantly, 0:14:58.600 --> 0:15:01.320 they would pray for unity within GP ranks for that 0:15:01.360 --> 0:15:01.920 to come through. 0:15:02.280 --> 0:15:05.160 Howard Lutnik is the Commerce Secretary. He wanted to be 0:15:05.240 --> 0:15:08.600 Treasury Secretary, but Trump passed him over. He has given 0:15:08.680 --> 0:15:10.720 him a powerful perch where he's in charge of all 0:15:10.720 --> 0:15:13.840 the tariffs. Howard Lutnik is a very familiar character to 0:15:14.560 --> 0:15:17.680 you all because he ran Canter Fitzgerald. But what should 0:15:17.760 --> 0:15:21.119 Washington d C. Know about the way Howard Lutnik operates 0:15:21.280 --> 0:15:23.920 as he sort of takes over a huge portfolio here. 0:15:24.280 --> 0:15:27.160 The most interesting dynamic about Howard Lutnik was how he 0:15:27.200 --> 0:15:30.920 almost Dick cheneyed himself in the leading the hunt for 0:15:30.960 --> 0:15:33.000 the Treasury secretary, only to say maybe I would be 0:15:33.000 --> 0:15:35.880 the best Treasury secretary. So the first few weeks, especially 0:15:35.960 --> 0:15:37.720 during the transition months, a lot of the talk in 0:15:37.920 --> 0:15:41.960 town was about this warring dynamic between Scott Bessant and 0:15:41.960 --> 0:15:45.440 Howard Lutnik. That's obviously not a good look in an 0:15:45.480 --> 0:15:49.040 administration that's so focused on these items of tariff's, tax's, 0:15:49.080 --> 0:15:51.960 deregulations and whatnot. You know that this person in the 0:15:52.000 --> 0:15:54.600 Commerce seat and the person in the Treasury seat have 0:15:54.720 --> 0:15:56.920 to work hand in hand. They've even been given this 0:15:57.000 --> 0:16:00.280 mandate of figuring out how to create this sovereign wealth 0:16:00.320 --> 0:16:04.120 fund that also involves a lot of Scott Beson and 0:16:04.160 --> 0:16:06.920 Lutnick working together. And I think Kevin has it involved 0:16:06.960 --> 0:16:10.520 there as well. So more than how he operates on 0:16:10.520 --> 0:16:13.040 Wall Street, which again he will say and do things 0:16:13.480 --> 0:16:17.360 that are generally appreciated by Wall Street. He is from 0:16:17.440 --> 0:16:20.280 New York. He's an old time fixture. He knows everyone 0:16:20.280 --> 0:16:22.360 in the city, so he knows all of Wall Street. 0:16:22.800 --> 0:16:25.520 That all works just fine. In fact, much like Trump, 0:16:25.560 --> 0:16:28.480 he was also a one time Hillary Clinton fundraiser and 0:16:28.520 --> 0:16:31.720 now he's Team Trump. Much like Donald Trump is now 0:16:31.720 --> 0:16:34.920 Team Trump after once being a Hillary Currenton fundraiser. But 0:16:35.480 --> 0:16:39.840 the fact remains that Wall Street will have no issues 0:16:40.000 --> 0:16:44.520 with Lutnick. It's more whether Lutnik can navigate the dynamics 0:16:44.560 --> 0:16:48.760 of getting along with everyone in Team Trump, especially someone 0:16:48.880 --> 0:16:51.640 like Scott Beson, to be able to push through the agenda, 0:16:51.960 --> 0:16:55.680 the ambitious agenda that they need to push through, in 0:16:55.720 --> 0:16:58.200 a way that does not rattle markets, in a way 0:16:58.240 --> 0:17:02.120 that also is fiscally responsible. You know, they talk about 0:17:02.120 --> 0:17:04.800 the ballooning debt burden, but when you think about the 0:17:04.920 --> 0:17:08.280 deregulatory agenda and the massive tax cuts that they're trying 0:17:08.320 --> 0:17:11.440 to push through, that will have an impact on the deficits. 0:17:11.480 --> 0:17:13.199 So how do you offset for all of that? It 0:17:13.280 --> 0:17:16.720 will require a lot of careful planning with the rank 0:17:16.720 --> 0:17:19.520 and file of the GOP in Congress, with the various 0:17:19.680 --> 0:17:23.200 administration members, and with the various cabinet members. That's the 0:17:23.320 --> 0:17:26.080 dynamic that Lutnik will have to be focused on, because 0:17:26.200 --> 0:17:27.600 that will be a difficult needle to thread. 0:17:27.920 --> 0:17:31.520 Steve Minuchin was Treasury Secretary in Trump's first term, and 0:17:32.800 --> 0:17:37.560 Wall Street executives liked him then, and they looked back 0:17:37.600 --> 0:17:39.720 fondly on his tenure. You know, he was there the 0:17:39.720 --> 0:17:41.360 whole time. He was seen as kind of a steady 0:17:41.840 --> 0:17:45.440 presence in that world, and it's someone who they recognize 0:17:45.680 --> 0:17:47.760 and that goes a long way. And so I would 0:17:47.760 --> 0:17:50.520 say that with both Bessen and Lutnik now it's a 0:17:50.560 --> 0:17:51.840 similar dynamic. 0:17:52.200 --> 0:17:54.600 I'm so curious to see how Lutink fares because just 0:17:54.640 --> 0:17:57.520 as a political reporter, he made a bunch of Trump people, 0:17:57.840 --> 0:17:59.919 you know, on the politics side of things, quite angry 0:18:00.040 --> 0:18:03.160 during the transition when he sort of ran roughshot over 0:18:03.240 --> 0:18:05.760 things and put his own name up for Treasury secretary. 0:18:05.880 --> 0:18:08.160 So I am I asked, because I am really watching 0:18:08.560 --> 0:18:11.880 sort of how he operates in a political environment. One 0:18:11.920 --> 0:18:14.320 final question, and Hannah, I want to go to you first. 0:18:14.600 --> 0:18:18.600 I am curious. You know, there's so much political geo 0:18:18.720 --> 0:18:21.560 instability right now. You know, we are trying to figure 0:18:21.600 --> 0:18:24.080 out what's going to happen with the end of the 0:18:24.119 --> 0:18:27.600 war in Ukraine. As Trump thinks about that, it's very 0:18:27.640 --> 0:18:30.280 uncertain what his relationship with Heran will be like. He 0:18:30.320 --> 0:18:33.359 has said that he wants all the Palestinians to leave Gaza. 0:18:33.440 --> 0:18:36.879 There's just a lot of big foreign policy questions right now, 0:18:37.200 --> 0:18:40.840 and I'm wondering if that concerns the finance executives that 0:18:40.920 --> 0:18:42.920 you speak to at all and just sort of how 0:18:42.920 --> 0:18:45.520 they're factoring that into their plans for the next year 0:18:45.600 --> 0:18:45.800 or so. 0:18:46.480 --> 0:18:48.239 Yeah, it absolutely does. I think the way that that 0:18:48.320 --> 0:18:51.439 translates to the business side of things, or one of 0:18:51.440 --> 0:18:53.560 the ways that that translates is, you know, when you 0:18:53.600 --> 0:18:56.479 look at deals like M and A and the cross 0:18:56.480 --> 0:18:59.879 border aspect of that, are cross border deals getting done. 0:19:00.119 --> 0:19:03.359 And we were talking earlier about the post election euphoria 0:19:03.760 --> 0:19:06.880 that continued, but I was speaking to a bank executive 0:19:06.920 --> 0:19:09.159 last week who was describing it as US firms are 0:19:09.200 --> 0:19:11.679 waiting for the dust to settle. So you know that 0:19:11.680 --> 0:19:15.600 euphoria hasn't been immediately translating. But in Europe there was 0:19:15.800 --> 0:19:18.679 apprehension immediately post election that has turned a bit more 0:19:18.720 --> 0:19:22.119 into how can we get in on US economic growth? 0:19:22.160 --> 0:19:25.280 And then you know in Asia, especially China and Hong Kong, 0:19:25.320 --> 0:19:27.560 there's a sense of it's not as bad as it 0:19:27.600 --> 0:19:30.159 could have been in the early days and weeks. So 0:19:30.200 --> 0:19:32.159 I think that as you're looking across kind of the 0:19:32.160 --> 0:19:37.720 different regions, there are different expectations and then reactions to 0:19:38.359 --> 0:19:40.200 you know, the things that are happening as they happen, 0:19:40.280 --> 0:19:42.640 but it is there is still broad sense that it's 0:19:42.680 --> 0:19:44.880 early days in this administration. People are kind of waiting 0:19:44.920 --> 0:19:45.880 to see how things shake out. 0:19:46.880 --> 0:19:49.520 I would go back and look at the world economic 0:19:49.640 --> 0:19:52.080 order and say, perhaps since the two thousand and eight 0:19:52.160 --> 0:19:55.520 financial crisis, if you look at different parts of the world, 0:19:55.600 --> 0:19:58.520 Europe massively struggled. Africa is still a growth story but 0:19:58.560 --> 0:20:01.719 has now not hit the breakout phase. Middle East has 0:20:01.760 --> 0:20:04.879 been a bright spot. That have been strong emerging economies 0:20:04.880 --> 0:20:08.040 in Asia, which have had their stumbles once in a while, 0:20:08.440 --> 0:20:10.600 but in general, over the last decade or so, the 0:20:10.640 --> 0:20:14.720 American growth story in some ways has been unparalleled. And 0:20:15.359 --> 0:20:19.119 perhaps that leads to this assumption that America has an 0:20:19.119 --> 0:20:21.760 island onto itself and what happens in the rest of 0:20:21.800 --> 0:20:26.800 the world doesn't necessarily affect the country, And you could 0:20:26.840 --> 0:20:32.119 assume that in a America first focused administration that is 0:20:32.160 --> 0:20:36.080 the predominant thought. But I feel that the world is 0:20:36.400 --> 0:20:41.360 way too interconnected that you can't just overnight snap your 0:20:41.400 --> 0:20:46.000 fingers and say, you know, each one to himself. That 0:20:46.080 --> 0:20:49.520 will be very difficult. So from that perspective, when you 0:20:49.520 --> 0:20:53.720 think about how the geopolitical situation is playing out worldwide. 0:20:53.760 --> 0:20:57.640 If you have a scenario where your enemies remain your 0:20:57.760 --> 0:21:02.280 enemies and you turn your allies into your enemies Que Canada, Q, 0:21:02.720 --> 0:21:05.840 European Union and the big speech from JD Vans or 0:21:05.880 --> 0:21:09.920