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Speaker 1: Welcome to the Bloomberg P and L Podcast. I'm Pim Fox.

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Speaker 1: Along with my co host Lisa Abramowitz. Each day we

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Speaker 1: bring you the most important, noteworthy, and useful interviews for

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Speaker 1: you and your money, whether you at the grocery store

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Speaker 1: or the trading floor. Find the Bloomberg P L Podcast

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Speaker 1: on iTunes, SoundCloud and at Bloomberg dot com. The White Shark,

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Speaker 1: the great White Shark has landed. Greg Norman, founder of

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Speaker 1: the Greg Norman Company in West Palm Beach, has come

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Speaker 1: to our cold little studio here in New York Studio

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Speaker 1: at New York City. Greg, we're so happy to have

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Speaker 1: you today. You announced a couple of partnerships your company,

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Speaker 1: one with Verizon, and I want to start with the

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Speaker 1: one with Verizon. It is seeking to modernize golf courses

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Speaker 1: in the way that they are designed. Um, can you

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Speaker 1: just describe a little bit about what his agreement really means. Well,

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Speaker 1: let me just touch on the what you just asked

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Speaker 1: me then about modernizing golf courses. When you look at

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Speaker 1: the golf course of design business, it's been pretty much

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Speaker 1: the same cookie cutter standard for generations and generations. What

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Speaker 1: Verizon has done through their IoT platform is, for example,

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Speaker 1: like smart cities, UM, you can learn a lot of

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Speaker 1: things about a lot of individuals and about energy savings

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Speaker 1: by being very, very smart. I actually think that technology

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Speaker 1: works brilliantly in the golf course design business. It creates

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Speaker 1: efficiencies and maintenance, It creates efficiencies and sustainability. So you

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Speaker 1: make these golf courses smart and how do you make

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Speaker 1: them smartest through connectivity and their actech platform? Is that

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Speaker 1: it was really the reason why I fell in love

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Speaker 1: with it when I saw what they were doing with

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Speaker 1: the vineyards in wine districts and it's an automatic flow

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Speaker 1: over into the golf course design business. So just on

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Speaker 1: that one platform a line wasn't the reason why I

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Speaker 1: signed up with Verizon or partner with Verizon. There was

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Speaker 1: because we recognized the space in the golf industry UM

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Speaker 1: that had never been not taking advantage of never being

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Speaker 1: utilized before. The golf industry has gone backwards in the

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Speaker 1: last decade from thirty million golfers in the US down

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Speaker 1: about five may maybe even less twenty four plus million

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Speaker 1: and m So how do we entice these people back

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Speaker 1: to the game. Well, okay, so just to put this

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Speaker 1: into perspective, you have more than one hundred Greg Norman

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Speaker 1: designed golf courses around the world. Uh and and this

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Speaker 1: sort of smart golf courses that Verizon could help plan,

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Speaker 1: would as you were saying, would drive efficiency of course design,

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Speaker 1: maintenance and sustainability. Will you talk about modernizing a golf course?

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Speaker 1: You have to think there still are so many courses

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Speaker 1: that don't allow you to even have your cell phone

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Speaker 1: with you, let alone on. So, I mean we talk

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Speaker 1: about connectivity and golf course, it seems like something that

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Speaker 1: it doesn't drive so well. No, that's true that there

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Speaker 1: is going to be a a segment of the market,

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Speaker 1: which is some golf cup golf courses will not allow

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Speaker 1: that to happen. I get that, I understand it. But

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Speaker 1: how do you grow something? How do you how do

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Speaker 1: you reach down to the millennials who have walked away

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Speaker 1: from the game of golf basically, and how do you

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Speaker 1: bring them back? You bring them back with their devices connectivity. Right,

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Speaker 1: every second you're awake, you have a device in your hand, right,

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Speaker 1: we all do. We're all sitting there, we all look

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Speaker 1: at it. We will play with it, whether it's emails, texting, YadA, YadA, YadA.

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Speaker 1: So at the same time, you have the opportunity of

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Speaker 1: playing your music there. So if a kid wants to

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Speaker 1: go to the golf course and experience some fun times

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Speaker 1: with his other millennial friends, why not let him play music?

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Speaker 1: Why not let him be connected to a device? Do

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Speaker 1: you do you let people play music on your golf courses? Yeah?

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Speaker 1: Absolutely absolutely. I have a a very very well known

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Speaker 1: sports figure, probably the number one non sports figure in

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Speaker 1: the United States. At the golf course I designed to

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Speaker 1: build in South Flower. He'll play in a six and

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Speaker 1: like four golf carts and four different individuals with music playing.

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Speaker 1: What kind of music? What are they listen whatever, whatever

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Speaker 1: they want to listen to. It doesn't really matter to

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Speaker 1: people get mad at each other. No, look, I think

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Speaker 1: it's great. I've played a golf course in the Bahamas, barefoot,

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Speaker 1: no shirt on playing music and drinking. Margharita Gregor was wondering,

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Speaker 1: you said, ask him what should I drink while I golf?

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Speaker 1: So there you go, Margharita's is the answer. Just talking

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Speaker 1: about expanding golf courses, which areas around the world and

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Speaker 1: even in the US, do you see as the most

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Speaker 1: ripe for new golf courses and expansion of your business? Great? Question.

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Speaker 1: Take a country like Japan, for example, Japan is no

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Speaker 1: more room for golf. They have twenty five hundred golf clubs,

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Speaker 1: and within a golf club that could be eighteen holes

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Speaker 1: thirty six. They have no ruined to expand because the

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Speaker 1: costability golf course in Japan on the side of the

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Speaker 1: mountains is too prohibitive. Then you get into places like

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Speaker 1: Mexico for example, Mexico's are booming market for golf. It's

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Speaker 1: a it's becoming a golf destination. Now. I've been going

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Speaker 1: building golf course down there for twenty four twenty five years,

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Speaker 1: and it's just increasing, increasing increasing. Take the Middle East.

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Speaker 1: I built golf courses and Omar and I built golf

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Speaker 1: courses in Jordan. We're gonna open up the first eighteen

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Speaker 1: whole golf course in Jordan's. People go Jordan's, you know,

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Speaker 1: and all of a sudden, the golf industry spreading their wings.

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Speaker 1: Here in the United States, we're starting to see golf

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Speaker 1: get a little bit more energy about it. Why. People

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Speaker 1: are getting a little bit more disposable income in their pocket,

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Speaker 1: so therefore they want to go out and enjoy the

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Speaker 1: hobbies they do. And on top of that, it's it's

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Speaker 1: the housing markets pretty much bottomed out, so people are

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Speaker 1: going to look for golf course residential communities coming online

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Speaker 1: in the next three or four years. And obviously the

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Speaker 1: the It's the president of day is very much more

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Speaker 1: pro business and pro development than the past one has been.

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Speaker 1: Greg Norman, thank you so much for us. I should

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Speaker 1: mention that not only do you have this arrangement with Verizon,

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Speaker 1: but also you announced today that you have an agreement

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Speaker 1: with Authentic Brands Group, which is an owner of a

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Speaker 1: global portfolio fashion, sports, celebrity and entertainment brands. Uh, you're

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Speaker 1: gonna be working on managing your brand, So congratulations to you.

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Speaker 1: Thank you so much for joining us. Definitely fascinating to

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Speaker 1: think of how different golf would be if people were

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Speaker 1: driving around carts, blaring music and drinking Margarita's. But perhaps

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Speaker 1: that will be the future as millennials get brought into

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Speaker 1: the fold. Thank you so much, Greg Norman. As founder

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Speaker 1: of the Greg Norman Company in West Palm b I

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Speaker 1: am thrilled to introduce Kathleen Gaffney. She is a giant

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Speaker 1: in the bond world. She's co director of Diversified Fixed

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Speaker 1: Income at Eton Vance, which oversees three billion dollars in

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Speaker 1: assets and is based in Boston, but she asiss here

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Speaker 1: in our Bloomberg eleven three oh studio, Kathleen, So nice

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Speaker 1: to see you. I want to start with how investors

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Speaker 1: remain flexible in the current environment. We were just talking

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Speaker 1: about how it is undergoing so much change, both on

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Speaker 1: an economic and political level h in the US and globally,

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Speaker 1: so you were saying flexibility is particularly important. How do

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Speaker 1: you remain flexible? I think one of the best ways

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Speaker 1: to remain flexible is keeping some dry powder. Having some

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Speaker 1: cash right now makes an awful lot of sense. They're

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Speaker 1: just there isn't a tremendous amount of value out there. Uh.

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Speaker 1: We're going through a period where the central banks are

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Speaker 1: going to be handing over passing the baton to the politicians. Uh,

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Speaker 1: and so that makes for a very interesting environment. Um

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Speaker 1: QUEWI took everything that was risk oriented. Uh, two levels

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Speaker 1: that we haven't seen in a long time. So there's

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Speaker 1: not a lot of value, but the fundamentals are not bad.

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Speaker 1: So it's a good time to fare it around for

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Speaker 1: good long term opportunities and have some cash for when

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Speaker 1: the volatility picks up. Because it's certainly well. Have your

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Speaker 1: cash allocations been going up in your funds. We've been

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Speaker 1: holding it rather steady and around ten percent or so,

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Speaker 1: which is pretty high on average, because average two, two

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Speaker 1: to five would be more of a normal level. But

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Speaker 1: that ten percent gives us that dry powder, so that

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Speaker 1: if there is a reaction in the market, and we

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Speaker 1: had a little bit of risk off last week, UM,

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Speaker 1: that we're able to take advantage of it. But we're

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Speaker 1: being patient about deploying that cash. It's not just every

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Speaker 1: cell off that we're finding great opportunities. UM. We we're

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Speaker 1: taking our time. You know. I was looking at one

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Speaker 1: fund that you helped manage, the EAT Advanced Multisector Income Fund,

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Speaker 1: which is performed better than percent of its peers according

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Speaker 1: to Bloomberg data over the past year to date as

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Speaker 1: well as the past three years. So UM, I was

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Speaker 1: looking at some of the allocations. It looks like energy

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Speaker 1: has contributed contributed to some of those gains. UM. Going forward,

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Speaker 1: you're talking about looking for those ferreting around for those

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Speaker 1: longer term opportunities, where are they? Uh? Excellent, excellent question,

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Speaker 1: because I think what what I'm excited about is that

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Speaker 1: with multisector we do have that flexibility to look into

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Speaker 1: areas such as emerging markets. Also with currency. Credit is

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Speaker 1: a big component as well. But I'm so glad not

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Speaker 1: to be tied to a specific benchmark because then I

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Speaker 1: can avoid the expensive securities because I don't need to

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Speaker 1: own them, so I can own exactly what I think

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Speaker 1: is going to generate good total return. So it was

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Speaker 1: interesting that you say that because carl I Staid, who

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Speaker 1: is a bond fund manager at Western Has Management, came

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Speaker 1: on yesterday and he said that there's been sort of

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Speaker 1: this recession going through different industries in the bond markets.

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Speaker 1: He says that the next hit could be in telecommunications

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Speaker 1: because some of the big behemoths have have levered up

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Speaker 1: so much. We're talking to a T and T, we're

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Speaker 1: talking Verizon. Do you agree with him? Uh? I think

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Speaker 1: that that's quite possible because you do have an industry

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Speaker 1: that is under pressure in terms of pricing. There's not

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Speaker 1: a lot of flexibility in terms of what they can

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Speaker 1: charge consumers, and you've got a lot of different technologies

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Speaker 1: going on that are competing in the same areas. So

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Speaker 1: it's ripe for some kind of uh uh switch or

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Speaker 1: transition to a new technology. So I can see that

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Speaker 1: they've been made, that we've seen some acquisitions, and yes,

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Speaker 1: the leverages is going up at a time when if

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Speaker 1: you can't grow out of it or UH receive better pricing,

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Speaker 1: it's going to be challenging. So are you avoiding those

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Speaker 1: bonds to A T and T and Verizon. Uh, they

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Speaker 1: don't offer They definitely do not offer a lot of value,

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Speaker 1: so we have no exposure there. UM. One other thing,

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Speaker 1: you were talking about emerging markets, and we've seen a

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Speaker 1: lot of new issuance from a lot of UH developing

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Speaker 1: markets in the dollar bond market. Um. There was news

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Speaker 1: over the past few days that Papua New Guinea, one

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Speaker 1: of the weakest Asian economies, is playing its debut issuance

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Speaker 1: five million dollars in dollar denominated debt. Does this concern

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Speaker 1: you at all? Uh, it does a little bit, because

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Speaker 1: it's not as if emerging markets is the place to be.

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Speaker 1: You really have to be very selective. And it was

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Speaker 1: interesting to note that this issuance, the supply that we

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Speaker 1: started to see happened at the beginning of the year,

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Speaker 1: with a big wave of it coming just prior to

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Speaker 1: the inauguration. So I think there was a sense that, uh,

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Speaker 1: some of these issuers, countries and companies wanted to get

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Speaker 1: in ahead of the new administration in case there was

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Speaker 1: going to be volatility. But actually what we've seen is

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Speaker 1: a much brighter global growth story and less of what

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Speaker 1: we were most afraid about in terms of protectionism with

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Speaker 1: the new administration, and so there there are some really

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Speaker 1: positive stories. In fact, i'd almost say that emerging markets

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Speaker 1: are going more mainstream and offer better upside than the

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Speaker 1: developed world. We're really struggling to get our act together

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Speaker 1: in terms of handling the politics and getting growth going.

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Speaker 1: Which three countries do you think offer the greatest promise

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Speaker 1: in emerging markets? Mexico, Brazil and India. And then going

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Speaker 1: back to what you're initially saying about this transition for

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Speaker 1: monetary policy to fiscal policy, do you think that President

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Speaker 1: Trump has enough political will to put forward his one

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Speaker 1: trillion dollar infrastructure spending plan and if he does in

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Speaker 1: give some kind of fiscal stimulus in that scale, well

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Speaker 1: we see some kind of retraction, some kind of like

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Speaker 1: you know, retracement in the in the stock and bond markets. Well,

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Speaker 1: my thoughts about what the new administration can do um

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Speaker 1: infrastructure is something that the market has already started to

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Speaker 1: price in, and it does seem that that would be

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Speaker 1: a good way to get UH folks at work the

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Speaker 1: jobs that he so often talks about. UH. I think

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Speaker 1: prior to the election there really was a mandate coming

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Speaker 1: from the country to get growth and jobs going. UM.

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Speaker 1: So that is out there and it needs to be addressed.

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Speaker 1: The challenge is going to be how do we pay

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Speaker 1: for it? UH. With the UH failure of the healthcare

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Speaker 1: to repeal and replace, that was going to be some savings,

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Speaker 1: and the other sources to help out with paying for

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Speaker 1: the infrastructure are not as positive for the economy. So

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Speaker 1: I think that's going to struggle. But I do think

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Speaker 1: there's a momentum on both sides of the aisle to

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Speaker 1: get infrastructure going real quick. Twenty seconds. What's the weakest

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Speaker 1: part of credit markets right now? Oh, great question. I

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Speaker 1: would say high yield UM. Both investment grade and high

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Speaker 1: yield look expensive in the US. In the US, but

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Speaker 1: I do think that high yield has become a lot

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Speaker 1: more rate sensitive, and for that reason, you've got folks

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Speaker 1: who have shortened up duration wise and aren't prepared for

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Speaker 1: what UH kind of downside risk exists there Kathleen Gaffney,

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Speaker 1: Come back anytime. Always a thrill to speak with you.

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Speaker 1: Kathleen Gaffney, co director of Diversified Fixed Income at Eaton Vans,

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Speaker 1: which oversees three billion dollars. Well, we heard a lot

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Speaker 1: about the company Carrier, which makes heaters uh and as

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Speaker 1: part of United Technology Companies, we heard a lot about

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Speaker 1: it or United Technology Corporation. I should say we heard

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Speaker 1: a lot of it last year when President Trump touted

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Speaker 1: his plan to save almost a thousand jobs at a

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Speaker 1: plant in Indianapolis. But since then, Carrier could kind of

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Speaker 1: be seen as a small lens into a very big

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Speaker 1: issue of globalization and the tensions that have emerged. Brian Gruley,

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Speaker 1: a Business Week reporter, highlighted some of these in a

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Speaker 1: recent Business Week piece. That is really terrific. Brian, thank

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Speaker 1: you so much for joining us. I just want to

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Speaker 1: start with what has happened since President Trump did help

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Speaker 1: negotiate this deal to keep certain jobs in the US

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Speaker 1: for a Carrier. The main thing is the plant continues

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Speaker 1: to churn out ten thousand furnaces, gas furnaces, and their

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Speaker 1: electric cousins band coils a day um. But at the

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Speaker 1: same time they're moving some of the fan coil production.

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Speaker 1: It's essentially two assembly lines to Mexico, and that will

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Speaker 1: result in the loss of five hundred some jobs, while

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Speaker 1: another seven hundred seven and fifty will remain in Indianapolis

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Speaker 1: UM building gas furnaces for quite some time, and United

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Speaker 1: Technologies will be UH investing about sixteen million dollars and

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Speaker 1: upgrading that plant, including some automation. Brian, did you spend

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Speaker 1: time in Indianapolis when you were writing the story. I

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Speaker 1: did a couple of times. I was down there. It's

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Speaker 1: a nice town. What was the mood like among some

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Speaker 1: of the factory workers that you spoke with. Do they

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Speaker 1: seem to be less angry about some of the shifts

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Speaker 1: that the presidentship was talking about. Well, I think, um,

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Speaker 1: certainly they would rather have their jobs than not. Some

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Speaker 1: of them were of an age where they decided, you know,

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Speaker 1: there's there's been a buyout of sorts negotiated, so they thought,

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Speaker 1: I'm going to move on. Some We're gonna take the

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Speaker 1: money and go, thinking they might get UH fired anyway.

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Speaker 1: And um, there were some who were keeping their jobs.

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Speaker 1: I remember one I spoke with who said, I'm happy

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Speaker 1: for the people who keep their jobs. I'm happy to

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Speaker 1: have my job, but it's not just about me and

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Speaker 1: the people who kept them. It's about all of us,

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Speaker 1: and that just the whole thing just makes me sad. Yeah. Well, Brian,

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Speaker 1: I thought that your story was really compelling because it

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Speaker 1: highlighted how carriers business doesn't have a lot of ways

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Speaker 1: to innovate other than being cheaper. Uh, and that carrier,

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Speaker 1: despite some of the political rhetoric, will continue to ride

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Speaker 1: the globalization wave. Can you talk a little bit about that? Yeah, sure,

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Speaker 1: you know the furnace industry, Leasa, it's uh, the furnace,

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Speaker 1: while it's evolved over the years, is still a pretty

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Speaker 1: basic appliance. It's not like, um, you know, Apple has

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Speaker 1: a secret phone that can outdo Samsung or Ice versa.

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Speaker 1: They're all pretty much the same. And so people rely

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Speaker 1: on mostly on the people who the contractors and retailers

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Speaker 1: who sell the furnaces. That's that's where they find the competition.

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Speaker 1: And of course people look for the lowest price from

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Speaker 1: the most reliable workers. So that puts the manufacturers in

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Speaker 1: the position of having to build as as good a

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Speaker 1: product as they can but keeping prices low, and there's

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Speaker 1: certain things they cannot control the price steal, the price

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Speaker 1: of aluminum, price of copper, etcetera. Um, but they can't

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Speaker 1: control their labor. Labor costs for one thing, and so

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Speaker 1: you can go seek lower, much lower labor costs, for instance,

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Speaker 1: by going to Mexico where many of the furnace and

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Speaker 1: air conditioner makers have gone. Yeah, you highlighted in your

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Speaker 1: article that carriers unionized workers in Indianapolis are paid on

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Speaker 1: average about twenty three dollars an hour. That compares to

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Speaker 1: about three dollars an hour UH for their Mexican counterparts.

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Speaker 1: How big of a proportion of the cost of carrier

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Speaker 1: furnaces comes from that labor, Well, we don't know exactly, Lisa,

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Speaker 1: but um, we do have information suggests that labor is

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Speaker 1: somewhere between twenty the cost of the furnace, and so

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Speaker 1: you know that's that's a pretty sizeable chunk. Whereas, for instance,

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Speaker 1: on an elevator again technologies also builds otus elevators, labor

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Speaker 1: only represents about three percent of the cost and so

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Speaker 1: you can eat some higher wages wage levels there when

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Speaker 1: it's a less of a big percentage of of your

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Speaker 1: overall costs. You know, another thing that you highlighted that

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Speaker 1: I thought was really interesting was that most of Carrier's

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Speaker 1: key arrivals we're talking about Lennox International, Ingersol, rand Re

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Speaker 1: Manufacturing in NorTech all manufacture most of their products outside

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Speaker 1: of the US. Have they come under political pressure to

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Speaker 1: keep factories here or move jobs back? No? Well, they

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Speaker 1: still manufacture quite a bit here, but they've also moved

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Speaker 1: quite a bit, uh to Mexico in particular, and they

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Speaker 1: buy a lot from other countries. But the answer to

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Speaker 1: your question is no, Uh, they've They've come under no

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Speaker 1: political pressure. And interestingly, when I called those companies for

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Speaker 1: some help with the story, they wanted nothing to do

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Speaker 1: with it. Were you surprised? No, Um, wouldn't you talk

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Speaker 1: to employees in Indianapolis? What did they think would be

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Speaker 1: the solution? Because clearly, I mean, it's nice to keep

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Speaker 1: a factory open, but longer term, the globalization wave isn't

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Speaker 1: going away so quickly. Well, the United Steelworkers who represent

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Speaker 1: those workers, UM, they have some pretty specific ideas. Um.

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Speaker 1: You know, they would be in favor of some of

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Speaker 1: President Trump's own proposals or his own ideas for levying

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Speaker 1: border taxes on imports, for making other other countries who

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Speaker 1: are who are taking our jobs pay more money to

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Speaker 1: get the products sent back to here. Um. Of course,

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Speaker 1: they're big on currency fluctuations and how China has supposedly

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Speaker 1: manipulated its currency to give itself an advantage in trade.

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Speaker 1: And the steel workers and other unions for that matter

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Speaker 1: are big on those ideas, and President Trump has endorsed

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Speaker 1: some of them. Brian, really, thank you so much for

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Speaker 1: joining us. A really fascinating story that really highlights the

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Speaker 1: broader issue that goes beyond one company and one factory.

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Speaker 1: Brian Grooley is Business Week reporter, and he spoke with

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Speaker 1: us from Chicago. Yesterday. President Trump signed an executive order

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Speaker 1: to roll back climate change policies that were implemented under

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Speaker 1: former President Barack Obama. Uh, this will have pretty wide

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Speaker 1: spread ramifications, but in particular for power plant carbon regulations.

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Speaker 1: And to get more details on what this may mean,

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Speaker 1: let's bring in Rob Barnett. He's senior energy policy analyst

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Speaker 1: for Bloomberg Intelligence. Rob, thank you so much for joining us.

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Speaker 1: So what are the implications for power plant carving regulations

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Speaker 1: that were I guess tightened under under former President Obama

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Speaker 1: but had been in place before that. Right, Well, the

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Speaker 1: basic answer is, we just don't know yet. The timing

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Speaker 1: of the announcement yesterday has been expected for a while.

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Speaker 1: We we knew President Trump was going to take some

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Speaker 1: of this kind of action, and yesterday's executive order gives

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Speaker 1: us a little bit of a sense of their playbook.

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Speaker 1: But frankly, it's going to take years in all likelihood

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Speaker 1: for everything to play out. So most immediately yesterday, UH

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Speaker 1: lawyers for the Department of Justice asked the U. S.

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Speaker 1: Circuit Court of Appeals to UH suspend an ongoing case

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Speaker 1: against the Clean Power Plan, basically descend it back to

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Speaker 1: the Environmental Protection Agency so that they could revisit the

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Speaker 1: rule and craft it in a way that's UH certainly

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Speaker 1: more lenient for electric utilities and folks who want to

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Speaker 1: use coal, But there's no guarante hee that the courts

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Speaker 1: are gonna do that, and ultimately the U. S. Court

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Speaker 1: system is going to be the arbiter of what happens,

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Speaker 1: and the courts are pretty slow moving into ties, so

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Speaker 1: I think it's going to be a while before we

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Speaker 1: have a true sense of what's actually going to happen. Well,

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Speaker 1: can you just break down what we're talking about with

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Speaker 1: some of these regulations that have tamped down the release

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Speaker 1: of carbon by coal mining companies, for example in West Virginia, Kentucky, Pennsylvania,

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Speaker 1: and others. I mean specific companies, specific actions. What have

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Speaker 1: these regulations meant. Absolutely, So the grand irony of all

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Speaker 1: of this is that the Clean Power Plan was actually

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Speaker 1: stayed by the Supreme Court, so it's actually not an

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Speaker 1: effect right now. Many of the coal regulations that are

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Speaker 1: that have been drivers of coal retirements and the decline

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Speaker 1: and coal use actually relate to conventional pollutants, so mercury requirements,

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Speaker 1: ozone requirements, sulfur, nitrogen oxides, I could go on. There's

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Speaker 1: a whole portfolio of those regular lations that nobody is

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Speaker 1: talking about. President Trump administration is not looking at rescinding

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Speaker 1: any of those, and those have been a big driver

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Speaker 1: of the decline and coal use we've seen here in

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Speaker 1: the United States over the past decade. Now, the Clean

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Speaker 1: Power Plan, if it were to stay on the books,

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Speaker 1: would sort of continue that trend into the next decade

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Speaker 1: if it were to stay around, But broadly in the

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Speaker 1: near term, it's these other regulations in our view, that

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Speaker 1: have been really the key driver of the big changes

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Speaker 1: we've seen in the coal industry. Well, so you talk

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Speaker 1: with a lot of people and lobbyists and regulators, and

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Speaker 1: I mean, is there any push to get some of

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Speaker 1: these other regulations overthrown or addressed by President Trump's administration.

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Speaker 1: It's certainly something that many folks in the coal industry

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Speaker 1: would like to see. But to go back and touch

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Speaker 1: some of those other regulations, which we view as somewhat

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Speaker 1: more important here in the near term, uh, you have

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Speaker 1: to rewrite the Clean Air Act. Congress is very busy.

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Speaker 1: This is not something we expect to see, uh, serious

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Speaker 1: efforts on in the Congress. So really we're likely in

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Speaker 1: a situation where we've still got all of these conventional

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Speaker 1: pollutant requirements and so maybe there's some relief on carbon,

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Speaker 1: but in our broadest assessment, we think it's going to

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Speaker 1: be very difficult to reboot the coal industry. And you've

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Speaker 1: got to keep in mind that a big factor is

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Speaker 1: an even policy related cheap shale natural gas has really

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Speaker 1: been giving coal a run for its money, and that's

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Speaker 1: a big part of the narrative. I mean, we continue

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Speaker 1: to track and observe coal power plant retirements even since

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Speaker 1: Trump won election last November. Well, you know, I'm Looking

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Speaker 1: at Peabody shares right now, which is a big coal

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Speaker 1: company cold producer, UH shares are up, you know, more

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Speaker 1: than twenty three percent today. You have to think it

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Speaker 1: has something to do with the news that President Trump

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Speaker 1: is trying to make good on his promises to make

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Speaker 1: coal great again and to and to bring back a

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Speaker 1: lot of these energy sources that have been beaten down own.

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Speaker 1: I mean, what are what are these shareholders seeing UH

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Speaker 1: that that that you're not maybe with respect to how

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Speaker 1: promising these the rollback really could be simply the way

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Speaker 1: markets work. I mean that. I think there's clearly a

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Speaker 1: sense of optimism on the executive order and and the

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Speaker 1: news that we saw yesterday. But keep in mind that

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Speaker 1: there are twenty two gigawatts of announced coal retirements here

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Speaker 1: in the United States, about eight percent of the capacity

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Speaker 1: in the US. Utilities say they're going to retire. And

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Speaker 1: by the way, that hasn't slowed down since President Trump

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Speaker 1: was elected. A big plant out in Arizona, the Navajo Plant,

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Speaker 1: earlier this year in February said they were going to

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Speaker 1: retire that plant. It's the one of the largest in

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Speaker 1: the US. And in an in in Ohio, a state

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Speaker 1: that Trump won. Uh. The Dayton Empower and Light Utility

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Speaker 1: said just a week ago they're going to retire their J. M.

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Speaker 1: Stewart plant, and they're killing coal plants. So we continue

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Speaker 1: to see these big shifts in the type of fuel

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Speaker 1: that utilities want to use to generate electricity. And ultimately

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Speaker 1: the big driver of coal demand is power sector use.

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Speaker 1: And so if utilities are switching to other fuels, it's

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Speaker 1: gonna be hard to see uh demand out there for coal. Uh,

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Speaker 1: you know, even if there is a rollback of the

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Speaker 1: Clean Power Plan or of some of the other greenhouse

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Speaker 1: gas rules that President Trump has been targeting. Rob Burnett,

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Speaker 1: thank you so much for joining us. Fascinating as always. Rubbernett,

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Speaker 1: Senior Energy policy analyst for Bloomberg Intelligence. Thanks for listening

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Speaker 1: to the Bloomberg P and L podcast. You can subscribe

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Speaker 1: and listen to interviews at iTunes, SoundCloud, or whatever podcast

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Speaker 1: platform you prefer. I'm pim Fox. I'm out there on

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Speaker 1: Twitter at pim Fox. I'm out there on Twitter at

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Speaker 1: Lisa Abramo. It's one before the podcast. You can always

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Speaker 1: catch us worldwide on Bloomberg Radio. The d