1 00:00:02,640 --> 00:00:05,320 Speaker 1: Welcome to the Bloomberg Penl Podcast. I'm Paul swing you 2 00:00:05,360 --> 00:00:07,680 Speaker 1: along with my co host Lisa Brahma Waits. Each day 3 00:00:07,720 --> 00:00:10,240 Speaker 1: we bring you the most noteworthy and useful interviews for 4 00:00:10,280 --> 00:00:12,520 Speaker 1: you and your money. Whether at the grocery store or 5 00:00:12,560 --> 00:00:15,480 Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple 6 00:00:15,520 --> 00:00:17,959 Speaker 1: podcast or wherever you listen to podcasts, as well as 7 00:00:17,960 --> 00:00:21,920 Speaker 1: at Bloomberg dot com. We got a deal. Maybe we're 8 00:00:21,920 --> 00:00:25,080 Speaker 1: getting all the details as they trickle out. There aren't 9 00:00:25,160 --> 00:00:28,240 Speaker 1: that many of them. We're talking about the US and China. 10 00:00:28,400 --> 00:00:31,240 Speaker 1: The focus now is on all of the iterations of 11 00:00:31,280 --> 00:00:33,199 Speaker 1: phase one, how it's going to be rolled out, and 12 00:00:33,240 --> 00:00:37,720 Speaker 1: people talk about the persisting uncertainty. However, there is some 13 00:00:38,120 --> 00:00:41,080 Speaker 1: detail that has become more concrete, at least for Dan Ives. 14 00:00:41,080 --> 00:00:44,559 Speaker 1: He's Banging director for equity research at web Bush Securities, 15 00:00:44,640 --> 00:00:47,360 Speaker 1: joining us here. Uh. Nice to say in our interactive 16 00:00:47,479 --> 00:00:50,120 Speaker 1: broker studios, thank you for being here. You're saying that 17 00:00:50,200 --> 00:00:52,960 Speaker 1: you do think that the trade deal removes a dark 18 00:00:53,000 --> 00:00:56,280 Speaker 1: cloud over tech stocks. Can you explain why all that 19 00:00:56,320 --> 00:01:01,000 Speaker 1: mattered for tech investors was the December fifteen team percent tariff. 20 00:01:01,320 --> 00:01:03,120 Speaker 1: If that happened, that would have been a gut punch, 21 00:01:03,200 --> 00:01:05,600 Speaker 1: notch Us for Apple, Semis and really across the whole 22 00:01:05,600 --> 00:01:08,160 Speaker 1: supply chain could have taken off about two bits of 23 00:01:08,240 --> 00:01:13,160 Speaker 1: growth once that tariff got removed and no December fifteen, 24 00:01:13,480 --> 00:01:15,959 Speaker 1: that would have been the issue. Right now green light 25 00:01:16,000 --> 00:01:18,399 Speaker 1: for tech stocks. I can tell you from an investor perspective, 26 00:01:18,680 --> 00:01:20,800 Speaker 1: I think we have five December cent rally in the 27 00:01:20,920 --> 00:01:24,640 Speaker 1: year and because now despite all the noise, that was 28 00:01:24,760 --> 00:01:28,000 Speaker 1: remaining risk for names like Apple and Semis to go higher. Alright, 29 00:01:28,040 --> 00:01:29,840 Speaker 1: so you mentioned Apple that's kind of been held out 30 00:01:29,880 --> 00:01:32,840 Speaker 1: as the poster child for the way to play or 31 00:01:32,920 --> 00:01:35,679 Speaker 1: go a long, go short, depending upon your view of 32 00:01:35,840 --> 00:01:37,559 Speaker 1: how this trade will play out. How do you think 33 00:01:37,920 --> 00:01:41,840 Speaker 1: Apple is gonna you know behavior, you know, thriving in 34 00:01:41,880 --> 00:01:44,720 Speaker 1: the world where maybe trade tensions are a little bit lower. Yeah, 35 00:01:44,720 --> 00:01:47,640 Speaker 1: I mean that was in our opinion twenty overhang on 36 00:01:47,680 --> 00:01:49,600 Speaker 1: Apple stock. I think now that's the stock that's going 37 00:01:49,640 --> 00:01:51,520 Speaker 1: to have a three in front of it either by 38 00:01:51,640 --> 00:01:54,160 Speaker 1: year in or into early next year. But it speaks 39 00:01:54,160 --> 00:01:57,360 Speaker 1: to why Cook was such a tactician, a pseudo ambassador 40 00:01:57,560 --> 00:02:00,400 Speaker 1: between US and China, and why he's broken some spred 41 00:02:00,440 --> 00:02:02,960 Speaker 1: with Trump because it came down to. For Apple, they 42 00:02:03,000 --> 00:02:05,440 Speaker 1: bet the farm in China. I think right now they're 43 00:02:05,480 --> 00:02:08,560 Speaker 1: in a sort of goldilocks scenario. I don't think they 44 00:02:08,680 --> 00:02:11,400 Speaker 1: take anything out of China. This was sort of the 45 00:02:11,440 --> 00:02:14,639 Speaker 1: worry for them. You'll see some US manufacturing like Austin 46 00:02:14,639 --> 00:02:18,080 Speaker 1: and others right now. For Apple, it's an early Christmas present. 47 00:02:18,280 --> 00:02:21,920 Speaker 1: I'm trying. I'm just struggling to understand beyond just the 48 00:02:21,960 --> 00:02:26,040 Speaker 1: December fifteen tariffs being lifted or the prospect of them 49 00:02:26,639 --> 00:02:29,000 Speaker 1: being removed from the table. Is there anything else that 50 00:02:29,040 --> 00:02:31,799 Speaker 1: we know concrete, concretely out of this deal? No, I 51 00:02:31,840 --> 00:02:34,520 Speaker 1: mean right now in terms of I P protection, any 52 00:02:34,520 --> 00:02:38,359 Speaker 1: sort of five G specifics that many tax CEOs are 53 00:02:38,360 --> 00:02:41,560 Speaker 1: focused on. Nothing in terms of those specifics. But that's why, 54 00:02:41,639 --> 00:02:43,679 Speaker 1: going back to Friday, you know that there was a 55 00:02:43,680 --> 00:02:45,960 Speaker 1: why noise was that we don't know the specifics of 56 00:02:45,960 --> 00:02:49,200 Speaker 1: the trade deal from an investor perspective in terms of tech, 57 00:02:49,680 --> 00:02:51,880 Speaker 1: all focused on if it was going to happen or 58 00:02:51,880 --> 00:02:54,079 Speaker 1: if not it didn't. Right now that that's what we'll 59 00:02:54,080 --> 00:02:56,640 Speaker 1: see a five sambers and rally attach Apple shares right 60 00:02:56,639 --> 00:02:59,519 Speaker 1: now at about two and eighty dollars per share, up 61 00:03:00,080 --> 00:03:03,280 Speaker 1: one point eight percent today following one point four percent 62 00:03:03,360 --> 00:03:07,080 Speaker 1: gain on Friday. Why aren't the gains bigger If what 63 00:03:07,160 --> 00:03:10,160 Speaker 1: you're saying is the case, It's just like what happened 64 00:03:10,200 --> 00:03:13,280 Speaker 1: a few months ago. It took time that if you 65 00:03:13,400 --> 00:03:16,720 Speaker 1: go back before earning stocks to fifteen to twenty and 66 00:03:16,720 --> 00:03:18,720 Speaker 1: we're trying to pound on the tables. We came away 67 00:03:18,720 --> 00:03:21,440 Speaker 1: from China, it was clear iPhone eleven is much better 68 00:03:21,440 --> 00:03:24,320 Speaker 1: than expected. It took time for that to show up 69 00:03:24,320 --> 00:03:26,200 Speaker 1: in the stock. I think it's the same thing. That's 70 00:03:26,200 --> 00:03:28,919 Speaker 1: why I go into next year. This is a stock. 71 00:03:28,960 --> 00:03:30,919 Speaker 1: I think it starts with three hundred. You can now 72 00:03:30,960 --> 00:03:35,320 Speaker 1: see three fifty, potentially four hundred into what I believe 73 00:03:35,400 --> 00:03:38,520 Speaker 1: is a five g supercycle. So I think for Apple 74 00:03:38,600 --> 00:03:40,720 Speaker 1: right now, it's not gonna happen overnight. But that's why 75 00:03:40,760 --> 00:03:42,680 Speaker 1: that's a stock. It continues to be your favorite tech 76 00:03:42,800 --> 00:03:45,040 Speaker 1: name into next year. You mentioned five gene. That's one 77 00:03:45,080 --> 00:03:47,320 Speaker 1: of the areas that we hear probably most often when 78 00:03:47,360 --> 00:03:50,000 Speaker 1: people talk about a bullish call for tech throughout the 79 00:03:50,040 --> 00:03:53,800 Speaker 1: tech stack. How does how are you suggesting investors play 80 00:03:53,800 --> 00:03:57,280 Speaker 1: five g other than the handset I e. Apple? Then 81 00:03:57,280 --> 00:03:59,280 Speaker 1: there's so there's three ways to play if there's Apple, 82 00:03:59,280 --> 00:04:01,600 Speaker 1: and then I think on the semi side, you look 83 00:04:01,640 --> 00:04:04,320 Speaker 1: at qual Calm in terms of my opinion, probably the 84 00:04:04,320 --> 00:04:07,360 Speaker 1: best way to play five G, as well as Intel 85 00:04:07,560 --> 00:04:11,280 Speaker 1: in terms of where their position. And then even on cybersecurity, 86 00:04:11,400 --> 00:04:14,000 Speaker 1: there's gonna be a security piece around five G. That's 87 00:04:14,000 --> 00:04:17,120 Speaker 1: the name like Ford net ftn T, which plays its 88 00:04:17,360 --> 00:04:19,880 Speaker 1: early days today. But I think as we go into 89 00:04:19,880 --> 00:04:21,960 Speaker 1: the next six twelve months, that's gonna be a bigger 90 00:04:22,000 --> 00:04:26,040 Speaker 1: focus into what I believe five G transformational technology of 91 00:04:26,080 --> 00:04:29,440 Speaker 1: the next decade. I remember old enough to remember six 92 00:04:29,440 --> 00:04:32,800 Speaker 1: months ago when we were talking about suppliers to Apple 93 00:04:33,000 --> 00:04:35,840 Speaker 1: getting really whipped around on the heels of tariff news. 94 00:04:35,839 --> 00:04:38,440 Speaker 1: I'm wondering which you expect to do the best with 95 00:04:38,480 --> 00:04:41,160 Speaker 1: the removal of the prospects of the December fift tariffs. Yeah, 96 00:04:41,160 --> 00:04:43,159 Speaker 1: I mean we just came away from China, you know, 97 00:04:43,200 --> 00:04:45,320 Speaker 1: over the last few weeks in terms of our checks 98 00:04:45,360 --> 00:04:48,320 Speaker 1: there on the ground, and I from a supplier perspective, 99 00:04:48,800 --> 00:04:51,160 Speaker 1: it's really playing the chip names, you know. I think 100 00:04:51,240 --> 00:04:53,520 Speaker 1: names that are going to be most beneficial or qual 101 00:04:53,640 --> 00:04:57,240 Speaker 1: Calm in telling semis. There's some smaller suppliers that are 102 00:04:57,240 --> 00:04:59,760 Speaker 1: going to benefit in terms of Apple, but I think 103 00:05:00,160 --> 00:05:03,840 Speaker 1: here it's really playing the chip plaise for Apple as 104 00:05:03,880 --> 00:05:06,039 Speaker 1: well as some of the distributors. Is there any chance 105 00:05:06,080 --> 00:05:08,279 Speaker 1: at five g's not gonna live up to what's hype. 106 00:05:09,200 --> 00:05:12,440 Speaker 1: I'd say it's the same view of Lamar Jackson not 107 00:05:12,640 --> 00:05:15,279 Speaker 1: living up to his hype. I don't. I don't see 108 00:05:15,279 --> 00:05:19,760 Speaker 1: it possible, just because it's right now. It's more of 109 00:05:19,800 --> 00:05:23,400 Speaker 1: the most transformational trends and you're seeing whether it's on 110 00:05:23,440 --> 00:05:25,839 Speaker 1: the handset side and Verizon AT and T and others, 111 00:05:26,040 --> 00:05:28,040 Speaker 1: and it's really gonna affect enterprise. So I can tell 112 00:05:28,040 --> 00:05:30,160 Speaker 1: you in terms of five G, I think it's really 113 00:05:30,200 --> 00:05:33,880 Speaker 1: gonna be a seminal movement, similar as cloud in terms 114 00:05:33,920 --> 00:05:36,280 Speaker 1: of how we view tech. Dan, I have thanks so 115 00:05:36,400 --> 00:05:38,560 Speaker 1: much for joining us. Dan, I was equity analyst web 116 00:05:38,600 --> 00:05:41,119 Speaker 1: Bush Security, joining us here in Bloomberg and actor brokerst 117 00:05:41,240 --> 00:05:43,040 Speaker 1: to given us the update on tech. He's bullish. I 118 00:05:43,160 --> 00:05:44,720 Speaker 1: like his calls into the end of the year, as 119 00:05:44,760 --> 00:05:47,240 Speaker 1: like his calls on Apple bullish and on five G 120 00:05:47,680 --> 00:05:49,479 Speaker 1: we're hearing a lot of five GS relates to tech. 121 00:06:02,880 --> 00:06:05,800 Speaker 1: The analysis of the UK election continues, the one that 122 00:06:06,120 --> 00:06:10,280 Speaker 1: led boris Johnson to victory. Also notable though, was the 123 00:06:10,360 --> 00:06:13,479 Speaker 1: incredible majority and the number of seats at the Conservative Party. 124 00:06:13,560 --> 00:06:17,320 Speaker 1: One joining us now Marian Harkin, former European Union of 125 00:06:17,400 --> 00:06:22,279 Speaker 1: Parliament member representing Ireland UH and she joins us by phone. Marian, 126 00:06:22,320 --> 00:06:25,560 Speaker 1: I want to start there is there a broader takeaway 127 00:06:25,720 --> 00:06:29,440 Speaker 1: from the UK election given the fact that some of 128 00:06:29,560 --> 00:06:35,640 Speaker 1: the most liberal neighborhoods that always went for for that 129 00:06:35,920 --> 00:06:42,080 Speaker 1: party voted Conservative. Well, I think it's a generalization to 130 00:06:42,200 --> 00:06:44,880 Speaker 1: say at Lisa, but you know a lot of people 131 00:06:45,360 --> 00:06:49,600 Speaker 1: disliked Johnson, but they couldn't tolerate Corbon. And if you 132 00:06:49,720 --> 00:06:52,279 Speaker 1: look at what happened to the collapse of the labor 133 00:06:52,400 --> 00:06:56,599 Speaker 1: vote in the north of England, in particular the Midlands, 134 00:06:56,680 --> 00:06:59,320 Speaker 1: what they're called the red walls, I mean that bought 135 00:06:59,440 --> 00:07:04,800 Speaker 1: just Upston one after another. Labor supporters were saying they 136 00:07:04,920 --> 00:07:08,760 Speaker 1: just couldn't bring themselves to vote for Corbin. I think 137 00:07:08,800 --> 00:07:10,520 Speaker 1: that was one part of that. I think the other 138 00:07:10,680 --> 00:07:17,120 Speaker 1: part was the simple message get Brexit done, three words. 139 00:07:17,840 --> 00:07:22,000 Speaker 1: It resonated with people after three years people want to 140 00:07:22,160 --> 00:07:26,280 Speaker 1: see progress of some kind and I think put those 141 00:07:26,360 --> 00:07:31,200 Speaker 1: two things together and that really for me gives you 142 00:07:31,920 --> 00:07:35,320 Speaker 1: the bare bones, if you like, of of what happened 143 00:07:35,720 --> 00:07:39,240 Speaker 1: in this election. So Marian, now that it appears that 144 00:07:39,600 --> 00:07:43,120 Speaker 1: the Brexit deal will go through, UM, give us a sense. 145 00:07:43,200 --> 00:07:47,280 Speaker 1: One of the stumbling big stumbling blocks was Ireland Northern Ireland. Um, 146 00:07:47,840 --> 00:07:50,880 Speaker 1: you know the boundaries. Where is zach? How's that going 147 00:07:50,920 --> 00:07:54,360 Speaker 1: to play out? Do you think? Well? The agreements that 148 00:07:54,560 --> 00:07:58,960 Speaker 1: was reached between Boris Johnson and our own Prime Minister 149 00:07:59,560 --> 00:08:06,160 Speaker 1: Ratkar the Withdrawl Agreement and has three main items, citizens rights, 150 00:08:06,600 --> 00:08:09,800 Speaker 1: the divorce settlement, but the real one was the Irish 151 00:08:09,880 --> 00:08:12,680 Speaker 1: border and force was agreed. They got rid of what 152 00:08:12,960 --> 00:08:17,280 Speaker 1: was called the backstop, which was an insurance policy in 153 00:08:17,440 --> 00:08:23,120 Speaker 1: case there was divergence in standards between the Republic and 154 00:08:23,680 --> 00:08:27,320 Speaker 1: Northern Ireland. But what they haven't placed now is a 155 00:08:27,400 --> 00:08:32,040 Speaker 1: guarantee from the UK that there will be no checks 156 00:08:32,400 --> 00:08:37,600 Speaker 1: at the border between the Republic of Ireland and Northern Ireland, 157 00:08:38,080 --> 00:08:41,680 Speaker 1: but there will be some checks in the Irish Sea 158 00:08:42,080 --> 00:08:48,360 Speaker 1: between goods traveling from the UK to Northern Ireland. So 159 00:08:48,480 --> 00:08:52,200 Speaker 1: in many ways this is a perfect scenario for Northern 160 00:08:52,240 --> 00:08:57,439 Speaker 1: Ireland because they have access to the UK market and 161 00:08:57,559 --> 00:09:02,160 Speaker 1: they have access to the EU market. But because obviously 162 00:09:02,559 --> 00:09:06,880 Speaker 1: the UK wouldn't have the same access. That's why there 163 00:09:06,920 --> 00:09:10,160 Speaker 1: has to be checks in the Irish Sea. And you'll 164 00:09:10,280 --> 00:09:14,160 Speaker 1: be well aware that the DUP, which is the Democratic 165 00:09:14,320 --> 00:09:21,199 Speaker 1: Unionist Party, were fiercely opposed to this. Boris Johnson promised 166 00:09:21,280 --> 00:09:25,480 Speaker 1: them it wouldn't happen, but subsequently he agreed to that. 167 00:09:25,960 --> 00:09:29,320 Speaker 1: There still remain fiercely opposed. But that's where we are 168 00:09:29,440 --> 00:09:32,400 Speaker 1: now and if the deal is signed by the thirty 169 00:09:32,480 --> 00:09:37,319 Speaker 1: one of January, we move on from there. Let's talk 170 00:09:37,360 --> 00:09:40,160 Speaker 1: about moving on from there, Marian. You know, given your 171 00:09:40,200 --> 00:09:43,840 Speaker 1: experience with the European Union as a member of the Parliament, 172 00:09:44,120 --> 00:09:46,079 Speaker 1: can you give us a sense of their approach and 173 00:09:46,160 --> 00:09:48,920 Speaker 1: dealing with Boris Johnson, given the fact that not only 174 00:09:48,960 --> 00:09:51,400 Speaker 1: did he win, but that he has such a big 175 00:09:51,440 --> 00:09:56,719 Speaker 1: Conservative majority behind him. Well, actually it matures that he 176 00:09:56,800 --> 00:10:00,280 Speaker 1: has such a big majority because that means he does 177 00:10:00,360 --> 00:10:03,679 Speaker 1: not need to be looking over his shoulder. There's a 178 00:10:03,800 --> 00:10:07,280 Speaker 1: small group in the Tories called the e r G 179 00:10:07,720 --> 00:10:11,520 Speaker 1: European Reform Group who are all in favor of a 180 00:10:11,720 --> 00:10:17,360 Speaker 1: heart Brexit, and they are smallish number. They will not 181 00:10:17,800 --> 00:10:21,040 Speaker 1: bother him the way they is too. Nigel for Age 182 00:10:21,480 --> 00:10:25,440 Speaker 1: didn't have any MP selected. To be fair, he did 183 00:10:25,559 --> 00:10:28,959 Speaker 1: stand back in most constituencies are his his party did. 184 00:10:29,360 --> 00:10:33,960 Speaker 1: So Boris now is in charge. Basically, he's a man 185 00:10:34,080 --> 00:10:38,120 Speaker 1: at the helm and that makes a big difference when 186 00:10:38,200 --> 00:10:42,439 Speaker 1: it comes to negotiating and the sense, I think in 187 00:10:42,559 --> 00:10:47,880 Speaker 1: many European capitals and the fact that he won the 188 00:10:47,960 --> 00:10:52,319 Speaker 1: election and wanted well was a positive rather than a 189 00:10:52,400 --> 00:10:55,719 Speaker 1: negative because it means he's in charge and he can 190 00:10:55,840 --> 00:11:00,200 Speaker 1: now negotiate and move forward because just like the UK, 191 00:11:00,679 --> 00:11:04,640 Speaker 1: the truth is many European citizens as well, while many 192 00:11:04,720 --> 00:11:09,199 Speaker 1: of them had wished at Brexit wouldn't happen, now that 193 00:11:09,360 --> 00:11:12,040 Speaker 1: it's going to happen, they want to get on with 194 00:11:12,480 --> 00:11:16,360 Speaker 1: looking at the trade deal talks and seeing what kind 195 00:11:16,760 --> 00:11:20,480 Speaker 1: of a future relationship we can manage. So Maryan, one 196 00:11:20,520 --> 00:11:24,079 Speaker 1: of the items arguments that the Brexiteers made is as 197 00:11:24,160 --> 00:11:27,240 Speaker 1: in outside of the Union, the UK can make h 198 00:11:27,720 --> 00:11:30,719 Speaker 1: bilateral deals with the U S and the EU. What 199 00:11:30,920 --> 00:11:33,480 Speaker 1: is the expectation that of what they can get done 200 00:11:33,480 --> 00:11:35,000 Speaker 1: with the US Because we're seeing here with the U 201 00:11:35,080 --> 00:11:38,440 Speaker 1: S and China it's no easy, you know task negotiating 202 00:11:38,440 --> 00:11:42,400 Speaker 1: with the US. At this point, well, you know, there's 203 00:11:42,440 --> 00:11:45,520 Speaker 1: a couple of things here. First of all, Charles Michelle, 204 00:11:45,640 --> 00:11:48,839 Speaker 1: who is the President of the European Council, he's the 205 00:11:48,920 --> 00:11:52,800 Speaker 1: former Prime Minister of Belgium, said immediately after the election 206 00:11:52,920 --> 00:11:58,599 Speaker 1: results that he's looking forward to open negotiations on the 207 00:11:58,720 --> 00:12:01,400 Speaker 1: trade deal, but he ad about a level playing pitch, 208 00:12:01,480 --> 00:12:05,720 Speaker 1: and what he means is he's talking about environmental standards, 209 00:12:05,840 --> 00:12:11,839 Speaker 1: social legislation, workers rights, data rules, etcetera. And that's where 210 00:12:11,920 --> 00:12:15,600 Speaker 1: we start from. It's an unusual trade agreement. We're starting 211 00:12:15,760 --> 00:12:21,040 Speaker 1: from complete regulatory alignment and seeing where we go from there. 212 00:12:21,800 --> 00:12:24,760 Speaker 1: It's it's always the other way around in any trade deal. 213 00:12:25,240 --> 00:12:30,040 Speaker 1: So the question then becomes if the UK and when not. 214 00:12:30,320 --> 00:12:35,720 Speaker 1: It's when the UK negotiates trade deals with other countries 215 00:12:36,320 --> 00:12:41,320 Speaker 1: and what kind of standard regulatory alignment will be involved. 216 00:12:41,800 --> 00:12:46,040 Speaker 1: And it's the divergence from those standards that are in 217 00:12:46,160 --> 00:12:49,720 Speaker 1: the you that's what will cause the problems, if there 218 00:12:49,760 --> 00:12:54,040 Speaker 1: are problems. So it's it's hugely complicated and I think 219 00:12:54,200 --> 00:12:58,199 Speaker 1: what most people want and hopefully Bars Johnson will follow 220 00:12:58,240 --> 00:13:00,920 Speaker 1: this line as well. It could be some kind of 221 00:13:01,040 --> 00:13:06,360 Speaker 1: prioritizing sequencing to deal with some of the most important 222 00:13:06,600 --> 00:13:10,080 Speaker 1: issues first that we can put some sort of framework 223 00:13:10,720 --> 00:13:13,600 Speaker 1: in place because there are so many issues, I mean 224 00:13:13,760 --> 00:13:20,000 Speaker 1: fishing rights for example, that is fraught with difficulty, absolutely fraught. 225 00:13:20,360 --> 00:13:23,520 Speaker 1: So we need to put some sort of framework in 226 00:13:23,640 --> 00:13:27,600 Speaker 1: place and work from there. Twelve months is too short, 227 00:13:27,840 --> 00:13:29,880 Speaker 1: but we have to do the best we can within 228 00:13:30,040 --> 00:13:32,719 Speaker 1: that period of time. Marian Harkin thanks so much for 229 00:13:33,000 --> 00:13:35,040 Speaker 1: joining us. Marian is a former member of the European 230 00:13:35,160 --> 00:13:37,760 Speaker 1: Parliament and of the Irish Parliament as well, giving us 231 00:13:37,800 --> 00:13:42,079 Speaker 1: her thoughts on the election win by bar Johnson what 232 00:13:42,160 --> 00:13:44,280 Speaker 1: it means for the Brexit process. We now go on 233 00:13:44,400 --> 00:13:47,559 Speaker 1: to actually getting this deal done for the folks in 234 00:13:47,640 --> 00:14:05,240 Speaker 1: the UK. They will be moving forward on that. We've 235 00:14:05,280 --> 00:14:08,640 Speaker 1: got a bunch of manufacturing data around the world coming 236 00:14:08,679 --> 00:14:14,200 Speaker 1: out this morning Europe disappointed in the US manufacturing also 237 00:14:14,840 --> 00:14:18,920 Speaker 1: slightly underwhelmed, but interestingly services p m I came in 238 00:14:19,280 --> 00:14:21,520 Speaker 1: a little bit of head of expectations joining us now. 239 00:14:21,600 --> 00:14:25,480 Speaker 1: Lindsay piigsa chief economist at Siful Financial, joining us on 240 00:14:25,600 --> 00:14:29,400 Speaker 1: the phone from Chicago. Lindsay, before we get into sort 241 00:14:29,440 --> 00:14:32,520 Speaker 1: of the nitty gritty, how important is it to watch 242 00:14:32,680 --> 00:14:35,400 Speaker 1: the data that we're getting over the next few weeks. 243 00:14:35,560 --> 00:14:38,440 Speaker 1: Is this so messy and so noisy that it's hard 244 00:14:38,480 --> 00:14:41,640 Speaker 1: to count, or is this is this significant data? Well, 245 00:14:41,760 --> 00:14:44,480 Speaker 1: Dad has always done messy and difficult to count. But 246 00:14:44,560 --> 00:14:46,360 Speaker 1: I do think it takes a very important picture of 247 00:14:46,440 --> 00:14:49,480 Speaker 1: what we're experiencing here at the US as well as 248 00:14:49,520 --> 00:14:51,560 Speaker 1: overseas as we head into the end of the year, 249 00:14:51,600 --> 00:14:54,120 Speaker 1: and it sets the tone for what we can expect 250 00:14:54,240 --> 00:14:57,800 Speaker 1: then looking out to the new year. Of all right, 251 00:14:57,840 --> 00:15:00,720 Speaker 1: so lindsay, it looks like just first like us on trade, 252 00:15:00,840 --> 00:15:03,080 Speaker 1: we look like we have a phase one deal. Of course, 253 00:15:03,160 --> 00:15:06,360 Speaker 1: we've seen nothing on paper yet, which is kind of 254 00:15:06,480 --> 00:15:08,800 Speaker 1: a part of the course, it seems. But assuming that 255 00:15:08,960 --> 00:15:11,400 Speaker 1: what's been reported is actually in a phase one deal, 256 00:15:11,480 --> 00:15:16,080 Speaker 1: does that change or impact your outlook in any way? Well, 257 00:15:16,320 --> 00:15:18,480 Speaker 1: it's difficult to say, because, like you said, we haven't 258 00:15:18,560 --> 00:15:21,720 Speaker 1: seen anything put to paper as of yet, and we've 259 00:15:21,840 --> 00:15:25,880 Speaker 1: obviously seen the evans flow of trade negotiations before, and 260 00:15:25,960 --> 00:15:28,520 Speaker 1: while a phase one deal has been agreed to in principle, 261 00:15:28,960 --> 00:15:32,560 Speaker 1: those principles have not yet been signed into text that 262 00:15:32,640 --> 00:15:35,000 Speaker 1: we won't see that for at least another month, so 263 00:15:35,120 --> 00:15:37,800 Speaker 1: there still is plenty of time for further disruptions as 264 00:15:37,840 --> 00:15:41,480 Speaker 1: further tweaks to negotiations to occur between now and then. 265 00:15:42,160 --> 00:15:45,760 Speaker 1: There's also a question of enforceability aside from adhering to 266 00:15:46,040 --> 00:15:49,040 Speaker 1: a specific level of purchases. China did say that it 267 00:15:49,080 --> 00:15:53,080 Speaker 1: would quote crack down on intellectual property, staff of force, 268 00:15:53,160 --> 00:15:56,240 Speaker 1: technology transfers, et cetera. Some of the key issues that 269 00:15:56,280 --> 00:15:59,320 Speaker 1: the Trumble administration has been focused on for the past 270 00:15:59,360 --> 00:16:02,840 Speaker 1: twelve to eight seen months, but there's few specifics that 271 00:16:02,920 --> 00:16:06,880 Speaker 1: have really been hammered out. So there is some skepticism 272 00:16:07,040 --> 00:16:11,280 Speaker 1: regarding the country's willingness to actually follow through when it 273 00:16:11,360 --> 00:16:14,320 Speaker 1: comes to these ladder issues, or or really how the 274 00:16:14,440 --> 00:16:17,760 Speaker 1: US can even enforce such efforts, because we have heard 275 00:16:17,800 --> 00:16:21,920 Speaker 1: from China many times before saying they would address these issues. 276 00:16:22,000 --> 00:16:24,880 Speaker 1: So I don't know if I'm necessarily convinced that this 277 00:16:25,080 --> 00:16:28,440 Speaker 1: time really will be different. So, given that we do 278 00:16:28,680 --> 00:16:32,040 Speaker 1: have a trade truce of sorts, but one that keeps 279 00:16:32,040 --> 00:16:35,000 Speaker 1: a lot of the uncertainty for the C suite, and 280 00:16:35,080 --> 00:16:37,040 Speaker 1: given the fact that we're getting a bunch of economic 281 00:16:37,160 --> 00:16:41,080 Speaker 1: data that shows ongoing strength in the US economy, albeit 282 00:16:41,560 --> 00:16:45,600 Speaker 1: UH an ongoing concern about manufacturing, how are we setting 283 00:16:45,680 --> 00:16:50,760 Speaker 1: up heading into well? I think that is going to 284 00:16:50,840 --> 00:16:54,240 Speaker 1: bring a lot of continued uncertainty and volatility. I do 285 00:16:54,400 --> 00:16:57,680 Speaker 1: think the market right now is looking at the positive. 286 00:16:57,720 --> 00:17:00,240 Speaker 1: They're looking at the economy through a glass half full ends. 287 00:17:00,280 --> 00:17:03,600 Speaker 1: They're focused on train negotiations taking a step in the 288 00:17:03,680 --> 00:17:05,800 Speaker 1: right direction. But I do think that the market is 289 00:17:05,880 --> 00:17:08,800 Speaker 1: really disregarding a lot of the red flags that we're 290 00:17:08,840 --> 00:17:13,600 Speaker 1: still seeing in fundamentals. We're still seeing business investment trend negatives. 291 00:17:13,640 --> 00:17:17,919 Speaker 1: We're still seeing manufacturing deep into contractionary territory. We're now 292 00:17:18,040 --> 00:17:22,480 Speaker 1: beginning to see signs of unevenness in part of the consumer, 293 00:17:22,560 --> 00:17:24,639 Speaker 1: which has been and we need to. We need the 294 00:17:24,680 --> 00:17:29,800 Speaker 1: consumer to continue to be the primary support to growth 295 00:17:30,000 --> 00:17:32,840 Speaker 1: going forward. So even if we do see this phase 296 00:17:32,880 --> 00:17:36,639 Speaker 1: of one trade deal signed into a certainty within a 297 00:17:36,760 --> 00:17:39,480 Speaker 1: month's time, there still is a lot of pain that 298 00:17:39,560 --> 00:17:42,160 Speaker 1: the U. S economy has experience that will take time 299 00:17:42,440 --> 00:17:47,399 Speaker 1: to unwind going into So given that backdrop, lindsay, do 300 00:17:47,480 --> 00:17:51,480 Speaker 1: you expect the FED too maybe cut rates once in 301 00:17:52,520 --> 00:17:55,000 Speaker 1: or prefer to stay on the sidelines, assuming the data 302 00:17:55,040 --> 00:17:57,800 Speaker 1: can support that. Well, I think both. I think the 303 00:17:57,880 --> 00:18:00,640 Speaker 1: FED does prefer to move to the sidelawe and stay 304 00:18:00,680 --> 00:18:03,720 Speaker 1: there indefinitely, but the FETE has also set the bar 305 00:18:03,880 --> 00:18:07,240 Speaker 1: relatively high. The FETE has essentially committed the U. S 306 00:18:07,320 --> 00:18:11,200 Speaker 1: economy to a perpetual two percent growth rate and a 307 00:18:11,359 --> 00:18:14,720 Speaker 1: return to two percent inflation in the near to medium term. 308 00:18:15,200 --> 00:18:17,520 Speaker 1: So if the U. S. Economy fails to meet the 309 00:18:17,720 --> 00:18:21,879 Speaker 1: feds set expectations, I do think the Committee has painted 310 00:18:21,920 --> 00:18:24,359 Speaker 1: themselves into a corner where they will have to act. 311 00:18:24,880 --> 00:18:27,520 Speaker 1: And because the trajectory of the data suggests we will 312 00:18:27,640 --> 00:18:31,560 Speaker 1: not meet the feds optimistic expectations, I do see the 313 00:18:31,600 --> 00:18:35,240 Speaker 1: Committee cutting once twice, if not three times next year. 314 00:18:35,440 --> 00:18:38,760 Speaker 1: Lindsay in in a recent research piece, you seem to 315 00:18:38,920 --> 00:18:42,800 Speaker 1: agree with Minneapolis Fed President Neil cush Kari that the 316 00:18:43,200 --> 00:18:47,840 Speaker 1: civilian unemployment rate is basically meaningless. How do you interpret 317 00:18:48,080 --> 00:18:50,760 Speaker 1: what we're seeing in the labor market in terms of 318 00:18:51,160 --> 00:18:54,440 Speaker 1: how strong or not strong? Uh? The U. S. Employment 319 00:18:54,520 --> 00:18:57,560 Speaker 1: market is? Well, I will say those are his words, um, 320 00:18:57,640 --> 00:18:59,760 Speaker 1: but I do echo his sentiment that the civilian on 321 00:18:59,840 --> 00:19:01,960 Speaker 1: his with it rates does a disservice to the average 322 00:19:02,000 --> 00:19:05,000 Speaker 1: American looking at those numbers, as it doesn't tell the 323 00:19:05,040 --> 00:19:08,840 Speaker 1: whole story. The civilian unemployment rate fails to capture all 324 00:19:08,880 --> 00:19:11,879 Speaker 1: of the millions of Americans that have been sidelined, pushed 325 00:19:11,880 --> 00:19:15,400 Speaker 1: out of the labor market that are no longer actively participating. 326 00:19:15,760 --> 00:19:17,359 Speaker 1: And what I mean by that is, in order to 327 00:19:17,440 --> 00:19:20,080 Speaker 1: be included in the unemployment rate, you have to be 328 00:19:20,200 --> 00:19:23,639 Speaker 1: actively seeking a job. So if you're not looking, if 329 00:19:23,720 --> 00:19:27,400 Speaker 1: you're taking a break from from seeking gainful employment, even 330 00:19:27,440 --> 00:19:31,720 Speaker 1: if you're not employed, you're not technically counted as unemployed. 331 00:19:32,200 --> 00:19:35,359 Speaker 1: So it really does a poor job of giving us 332 00:19:35,440 --> 00:19:39,439 Speaker 1: a true sense of the jobless level in the United States, 333 00:19:39,480 --> 00:19:42,600 Speaker 1: again with those millions Americans sitting on the sideline, not 334 00:19:42,760 --> 00:19:46,560 Speaker 1: actively participating in the labor market. Hey, Lindsay, just real quickly, 335 00:19:46,640 --> 00:19:49,440 Speaker 1: do you have a recession US recession in your model 336 00:19:49,560 --> 00:19:53,560 Speaker 1: in your forecast? I don't have a technical recession priced 337 00:19:53,600 --> 00:19:56,360 Speaker 1: into the model. My bigger concern is a longer run, 338 00:19:56,600 --> 00:20:00,680 Speaker 1: non accelerating economic scenario for the US a otomy falls 339 00:20:00,720 --> 00:20:02,959 Speaker 1: to a top line GDP rate of less than one 340 00:20:03,080 --> 00:20:06,120 Speaker 1: percent for an extended period of time. To me, that's 341 00:20:06,160 --> 00:20:09,520 Speaker 1: the scarier forecast than an outright you're special, Lindsay, thanks 342 00:20:09,520 --> 00:20:12,159 Speaker 1: so much for joining us. Lindsay Piega, chief economist for 343 00:20:12,240 --> 00:20:15,160 Speaker 1: Stipo Financial, joining us on the phone from Chicago, getting 344 00:20:15,600 --> 00:20:19,520 Speaker 1: her thoughts on the economic outlook. Generally, the economy remains 345 00:20:19,600 --> 00:20:23,000 Speaker 1: a quite strong slower growth, certainly relative to the prior 346 00:20:23,080 --> 00:20:26,159 Speaker 1: two years, but most forecasters looking for a two percent 347 00:20:26,440 --> 00:20:30,840 Speaker 1: ish type of growth in led by the consumer. We 348 00:20:30,920 --> 00:20:34,760 Speaker 1: are maybe seeing some stabilization in manufacturing business investment, but 349 00:20:34,840 --> 00:20:37,560 Speaker 1: still the weaker of the two. The consumer continues to 350 00:20:37,680 --> 00:20:55,200 Speaker 1: drive the US economy PG and E. That has been 351 00:20:55,359 --> 00:20:58,439 Speaker 1: a huge question for a lot of BEAT people as 352 00:20:58,520 --> 00:21:01,600 Speaker 1: they look to the biggest utility in California and wonder 353 00:21:01,720 --> 00:21:07,320 Speaker 1: what is the future facing bankruptcy, facing a bankruptcy restructuring. Luckily, 354 00:21:07,400 --> 00:21:11,720 Speaker 1: at Kit Conteledge has been monitoring all of the iterations 355 00:21:12,000 --> 00:21:16,080 Speaker 1: of this dragged out deal. Kit Contoledge is senior Industrials 356 00:21:16,080 --> 00:21:19,480 Speaker 1: and Utilities analyst for Bloomberg Intelligence. Just to sort of 357 00:21:19,840 --> 00:21:22,639 Speaker 1: give a sense of the latest pg N he shares 358 00:21:22,720 --> 00:21:27,720 Speaker 1: are sinking today after California rejected their restructuring proposal, Kit, 359 00:21:28,040 --> 00:21:32,159 Speaker 1: bring us up to speed. Why did California reject this um? I? 360 00:21:32,600 --> 00:21:37,800 Speaker 1: You know, it's it's such a detailed letter that the 361 00:21:37,880 --> 00:21:40,800 Speaker 1: governor sent to pg NY that there's there's a lot 362 00:21:40,880 --> 00:21:42,760 Speaker 1: of reasons. Let's put it that way. It sounds like 363 00:21:42,880 --> 00:21:48,320 Speaker 1: the governor wants uh kind of new corporate governance. Uh. 364 00:21:48,400 --> 00:21:53,719 Speaker 1: He wants uh stronger sounds like much stronger, uh financial 365 00:21:53,920 --> 00:21:58,040 Speaker 1: structure to the company. Uh. He wants guarantees that if 366 00:21:58,080 --> 00:22:00,960 Speaker 1: things go wrong, the state can take it over. I 367 00:22:01,040 --> 00:22:03,440 Speaker 1: think there's a lot of things there that it's hard 368 00:22:03,520 --> 00:22:07,880 Speaker 1: to say how they would be structured. And so where 369 00:22:07,960 --> 00:22:09,880 Speaker 1: we go from here. So he's put out a lot 370 00:22:10,000 --> 00:22:15,040 Speaker 1: of of markers and targets, but exactly how it gets 371 00:22:15,160 --> 00:22:17,600 Speaker 1: resolved in a way that the company can run in 372 00:22:17,640 --> 00:22:21,239 Speaker 1: the future is is very puzzling to me. So, Kate, 373 00:22:21,320 --> 00:22:24,720 Speaker 1: you've color covered the utility utility industry for many many years. 374 00:22:25,080 --> 00:22:27,520 Speaker 1: Give us a sense of how long can a utility 375 00:22:27,600 --> 00:22:31,240 Speaker 1: continue to operate under bankruptcy? Like can they just kind 376 00:22:31,240 --> 00:22:33,360 Speaker 1: of do this in perpetunity as long as I'm still 377 00:22:33,400 --> 00:22:35,440 Speaker 1: paying my bill and the other folks in californiare paying 378 00:22:35,440 --> 00:22:38,360 Speaker 1: their bill. Boy, That's that's a tough one. Uh. I mean, 379 00:22:38,640 --> 00:22:42,639 Speaker 1: I think clearly, Uh, nobody has an interest in a 380 00:22:42,760 --> 00:22:47,639 Speaker 1: utility just go and belly up and you know, not running. 381 00:22:47,840 --> 00:22:51,080 Speaker 1: Somebody's got to run the operation. And I think when 382 00:22:51,160 --> 00:22:53,960 Speaker 1: push comes to shove, the governor knows that PG and 383 00:22:54,040 --> 00:22:58,400 Speaker 1: he knows that, the financial people know that and so on. So, uh, 384 00:22:58,840 --> 00:23:01,040 Speaker 1: you know, it's not going to go on forever, but 385 00:23:01,359 --> 00:23:04,800 Speaker 1: I think there's a lot of game playing that can 386 00:23:05,000 --> 00:23:07,760 Speaker 1: go on here. And the governor wants to establish how 387 00:23:08,119 --> 00:23:10,360 Speaker 1: tough he is on the utility. The utility does don't 388 00:23:10,359 --> 00:23:13,120 Speaker 1: want to give away the store so that the shareholders 389 00:23:13,160 --> 00:23:16,280 Speaker 1: have have nothing left. And then you have the bond 390 00:23:16,359 --> 00:23:20,760 Speaker 1: holder position, which would basically wipe out the equity in 391 00:23:20,840 --> 00:23:24,119 Speaker 1: the utility and they'd take it over. But whether the 392 00:23:24,160 --> 00:23:28,400 Speaker 1: governor wants out of state hedge funds running the utility 393 00:23:28,520 --> 00:23:31,600 Speaker 1: is also a question. So you know, it's a question 394 00:23:31,680 --> 00:23:35,480 Speaker 1: of what's the least bad outcome. Maybe here kit just 395 00:23:35,600 --> 00:23:38,159 Speaker 1: to sort of paint the picture here, we see p 396 00:23:38,640 --> 00:23:42,520 Speaker 1: g N shares down today more than thirtent. Obviously, it's 397 00:23:42,560 --> 00:23:45,119 Speaker 1: been a terrible year for pg NY and the stems 398 00:23:45,200 --> 00:23:48,720 Speaker 1: from the wildfires and the liability that potentially will stem 399 00:23:49,040 --> 00:23:54,080 Speaker 1: from that. So that's the sort of company side of things. 400 00:23:54,359 --> 00:23:57,239 Speaker 1: There's also the investor side of things, and this has 401 00:23:57,280 --> 00:24:00,520 Speaker 1: been one of the top bets for distress debt investors. 402 00:24:00,800 --> 00:24:03,000 Speaker 1: A lot of different players getting involved here. Can you 403 00:24:03,040 --> 00:24:05,479 Speaker 1: give us a sense of who they are and how 404 00:24:05,600 --> 00:24:09,280 Speaker 1: much money is at stake here? Well, the um you know, 405 00:24:09,840 --> 00:24:13,120 Speaker 1: total enterprise value of the company is of course goes 406 00:24:13,200 --> 00:24:15,040 Speaker 1: up and down with the stock market every day, but 407 00:24:15,320 --> 00:24:18,480 Speaker 1: UH in the range of fifty billion dollars something like that. 408 00:24:18,600 --> 00:24:23,240 Speaker 1: So there are some very big bets by players like 409 00:24:23,920 --> 00:24:28,879 Speaker 1: Elliott UH for example, and on on the equity side. 410 00:24:29,040 --> 00:24:34,800 Speaker 1: There's UH Abrams and Pimco is involved on the debt side. 411 00:24:34,920 --> 00:24:39,520 Speaker 1: So UH, it's a big position where if you have 412 00:24:39,760 --> 00:24:44,320 Speaker 1: a strong ability to analyze this situation, you can make 413 00:24:44,400 --> 00:24:46,480 Speaker 1: a lot of money or potentially lose a lot of money. 414 00:24:46,480 --> 00:24:49,760 Speaker 1: And we don't know exactly where everybody's position is because 415 00:24:49,800 --> 00:24:52,919 Speaker 1: obviously you can be long or short or heads along 416 00:24:53,000 --> 00:24:56,000 Speaker 1: the way. So, Kid, one of the big issues that 417 00:24:56,320 --> 00:24:58,960 Speaker 1: that I learned about when this story first broke is 418 00:24:59,000 --> 00:25:02,520 Speaker 1: this whole concept that you know, there's these utilities in 419 00:25:02,720 --> 00:25:07,040 Speaker 1: California with the wildfires. There's really nothing to protect them. 420 00:25:07,200 --> 00:25:09,359 Speaker 1: I mean, so these fires keep coming every year, and 421 00:25:09,760 --> 00:25:12,680 Speaker 1: these guys are on the hook, and it seems like 422 00:25:13,359 --> 00:25:14,800 Speaker 1: you know, and and a lot of its just active 423 00:25:14,880 --> 00:25:18,520 Speaker 1: god kind of stuff. But is there a scenario during 424 00:25:18,560 --> 00:25:21,080 Speaker 1: this restructuring where maybe from a legal perspective, they get 425 00:25:21,080 --> 00:25:23,760 Speaker 1: a little bit of protection that if a lightning strikes 426 00:25:23,800 --> 00:25:26,760 Speaker 1: and or even if one of our equipments puts a 427 00:25:26,800 --> 00:25:29,240 Speaker 1: spark out there and burns down, that we're not you 428 00:25:29,280 --> 00:25:31,240 Speaker 1: can't put us out of business. Every single year we 429 00:25:31,359 --> 00:25:34,600 Speaker 1: keep coming back to this place. Well, ideally from the 430 00:25:34,760 --> 00:25:38,680 Speaker 1: utilities viewpoint, they would like an end to this inverse condemnation. 431 00:25:39,000 --> 00:25:43,840 Speaker 1: That's legal the legal rule where which says basically, if 432 00:25:43,920 --> 00:25:47,399 Speaker 1: their equipment can be connected in any way with the fire, 433 00:25:47,480 --> 00:25:49,160 Speaker 1: and it doesn't have to be proved that they did 434 00:25:49,240 --> 00:25:53,200 Speaker 1: anything wrong quote unquote, but just it was there when 435 00:25:53,240 --> 00:25:55,359 Speaker 1: the fire started kind of things. So it's easy for 436 00:25:55,480 --> 00:25:59,119 Speaker 1: the lawyers to prove that they were somehow part of 437 00:25:59,520 --> 00:26:03,359 Speaker 1: the problem them. Then everything is is their financial burden. 438 00:26:03,560 --> 00:26:06,200 Speaker 1: And so obviously in a state the size of California, 439 00:26:06,280 --> 00:26:09,280 Speaker 1: that can be a very big number very quickly. Um, 440 00:26:10,520 --> 00:26:14,399 Speaker 1: that's a killer. Uh. It's partly mitigated now by the 441 00:26:14,480 --> 00:26:19,399 Speaker 1: fact that the state has put out a future rule 442 00:26:19,720 --> 00:26:25,280 Speaker 1: where beginning middle of next year, UH, twenty one billion 443 00:26:25,400 --> 00:26:28,160 Speaker 1: dollars some from the utilities, some from the state will 444 00:26:28,160 --> 00:26:30,960 Speaker 1: be in a fund UH that will go to the utilities. 445 00:26:31,000 --> 00:26:33,920 Speaker 1: If there is a big fire, So you know, the 446 00:26:34,040 --> 00:26:36,680 Speaker 1: state's trying to set up and and I think the 447 00:26:36,760 --> 00:26:39,680 Speaker 1: market has gotten a little bit comfortable with that setup 448 00:26:39,760 --> 00:26:42,840 Speaker 1: of there's at least some protection so that they you know, 449 00:26:42,920 --> 00:26:45,320 Speaker 1: it's not one year everything has wiped out your back 450 00:26:45,359 --> 00:26:48,320 Speaker 1: in bankruptcy. Has it ever been more exciting to cover utilities? 451 00:26:48,359 --> 00:26:51,720 Speaker 1: So I'll tell you that, well cover one utility anyway, 452 00:26:51,960 --> 00:26:55,120 Speaker 1: or or the California utilities. I guess that there's also 453 00:26:55,400 --> 00:26:57,560 Speaker 1: there was a lot of talk initially about having some 454 00:26:57,680 --> 00:27:00,760 Speaker 1: sort of state operated utility. That seems to not be 455 00:27:00,840 --> 00:27:03,480 Speaker 1: on the table anymore. No one wants to actually take responsibility. 456 00:27:04,000 --> 00:27:09,120 Speaker 1: I think that you know, the cooler heads might realize 457 00:27:09,280 --> 00:27:14,680 Speaker 1: that having local governments run a gigantic utility like this, 458 00:27:14,840 --> 00:27:19,800 Speaker 1: it's not impossible. It's done. Los Angeles has a local utility, 459 00:27:20,200 --> 00:27:24,320 Speaker 1: Sacramento has a local utility. Whether San Jose would have 460 00:27:24,400 --> 00:27:28,800 Speaker 1: a local utility in San Francisco, uh, it would. It 461 00:27:28,880 --> 00:27:31,679 Speaker 1: would be a huge issue. There are still people who 462 00:27:31,800 --> 00:27:35,560 Speaker 1: own these wires and power plants that would have to 463 00:27:35,600 --> 00:27:39,560 Speaker 1: be paid off, and so the complexity gets, you know, 464 00:27:39,880 --> 00:27:43,040 Speaker 1: to levels of magnitude if if you also have somebody 465 00:27:43,119 --> 00:27:45,840 Speaker 1: buying the assets while you have a bankruptcy to work 466 00:27:45,880 --> 00:27:49,359 Speaker 1: out any sense of timing how this we get a 467 00:27:49,600 --> 00:27:53,480 Speaker 1: conclusion to this um. Everybody wants to see it done 468 00:27:54,119 --> 00:27:57,960 Speaker 1: by next June because that's when that wildfire fund I 469 00:27:58,040 --> 00:28:02,120 Speaker 1: was talking about kicks in. So the governor, clearly, I think, 470 00:28:02,240 --> 00:28:05,320 Speaker 1: would would like to see that happen. You know, on 471 00:28:05,359 --> 00:28:06,880 Speaker 1: the one hand, he wants to be tough on these 472 00:28:06,920 --> 00:28:09,359 Speaker 1: guys and get the right deal from his point of view. 473 00:28:09,400 --> 00:28:11,320 Speaker 1: On the other hand, uh, he doesn't want it to 474 00:28:11,400 --> 00:28:14,840 Speaker 1: drag him forever. That would be uh an ugly situation 475 00:28:14,920 --> 00:28:18,439 Speaker 1: for him politically too, So I think there's some urgency 476 00:28:19,320 --> 00:28:22,359 Speaker 1: on the part of all parties. Now that doesn't mean that, 477 00:28:22,800 --> 00:28:25,520 Speaker 1: you know, any one step that somebody takes might not 478 00:28:25,760 --> 00:28:29,560 Speaker 1: push it out further, and you know it's an unintended consequence. 479 00:28:30,160 --> 00:28:33,800 Speaker 1: Thanks so much, Ki. He's a senior industrials and utilities 480 00:28:33,800 --> 00:28:36,879 Speaker 1: analysts rock and job these days to utilities analysts. Lots 481 00:28:36,920 --> 00:28:38,959 Speaker 1: of fun out, I mean on every level though, I mean, yes, 482 00:28:39,040 --> 00:28:40,959 Speaker 1: it's P G and E, but it's also this has 483 00:28:41,000 --> 00:28:43,280 Speaker 1: been the hotspot because bond yields have been going downs, 484 00:28:43,400 --> 00:28:46,240 Speaker 1: utilities have been in fire, so much excitement, so kick 485 00:28:46,280 --> 00:28:48,480 Speaker 1: Conlge Bloomberg Intelligence, thanks so much for joining us here 486 00:28:48,480 --> 00:28:51,280 Speaker 1: in our Bloomberg Interactive Broker Studios, we looked at Pacific 487 00:28:51,320 --> 00:28:53,880 Speaker 1: guests and Electrics. They try to resolve the crisis there. 488 00:28:53,880 --> 00:28:56,360 Speaker 1: They're in bankruptcy, trying to forge a deal to get 489 00:28:56,400 --> 00:28:59,280 Speaker 1: out of bankruptcy, but it is now a political process. 490 00:28:59,320 --> 00:29:01,840 Speaker 1: The governor California Governor Newsom has to sign off on 491 00:29:01,880 --> 00:29:04,160 Speaker 1: the deal and they're in the midst of negotiations. We 492 00:29:04,200 --> 00:29:06,960 Speaker 1: will continue to cover that story. Thanks for listening to 493 00:29:07,000 --> 00:29:09,400 Speaker 1: the Bloomberg P and L podcast. You can subscribe and 494 00:29:09,480 --> 00:29:12,600 Speaker 1: listen to interviews at Apple Podcasts or whatever podcast platform 495 00:29:12,640 --> 00:29:15,680 Speaker 1: you prefer. I'm Paul Sweeney. I'm on Twitter at pt Sweeney. 496 00:29:15,760 --> 00:29:18,040 Speaker 1: I'm Lisa abram Woy. It's I'm on Twitter at Lisa A. 497 00:29:18,080 --> 00:29:20,640 Speaker 1: Bram wits one before the podcast, you can always catch 498 00:29:20,760 --> 00:29:22,520 Speaker 1: us worldwide. I'm Bloomberg Radio.