1 00:00:01,400 --> 00:00:04,120 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along 2 00:00:04,120 --> 00:00:06,200 Speaker 1: with my co host of Bonnie Quinn. Every business day 3 00:00:06,240 --> 00:00:10,360 Speaker 1: we bring you interviews from CEO, market pros, and Bloomberg experts, 4 00:00:10,400 --> 00:00:13,600 Speaker 1: along with essential market moving news. Find the Bloomberg Markets 5 00:00:13,600 --> 00:00:17,000 Speaker 1: Podcast on Apple Podcasts or wherever you listen to podcasts, 6 00:00:17,000 --> 00:00:20,720 Speaker 1: and on Bloomberg dot Com. Jonathan Farrow. They're speaking with 7 00:00:20,880 --> 00:00:23,400 Speaker 1: Larry Cudlow, Director of the National Economic Council, ending it 8 00:00:23,480 --> 00:00:26,200 Speaker 1: with a nice little good luck, I suppose to the 9 00:00:26,239 --> 00:00:29,440 Speaker 1: incoming administration and people who will be in similar posts, 10 00:00:29,440 --> 00:00:33,360 Speaker 1: and pole really obviously what we might have expected, Larry 11 00:00:33,520 --> 00:00:36,040 Speaker 1: downplaying the weak parts of this reward and playing of 12 00:00:36,280 --> 00:00:38,400 Speaker 1: the stronger parts of this reward. And no one is 13 00:00:38,400 --> 00:00:42,519 Speaker 1: doubting that there are some you know strength, yes to 14 00:00:42,880 --> 00:00:45,199 Speaker 1: look at here, Yeah, exactly right. And I think the 15 00:00:45,479 --> 00:00:48,239 Speaker 1: you know we heard from from Larry Cudlow there, you know, 16 00:00:48,640 --> 00:00:51,640 Speaker 1: acknowledging that the you know this, this way of coronavirus 17 00:00:51,840 --> 00:00:54,440 Speaker 1: is impacting the economy, but trying to find, uh, you know, 18 00:00:54,520 --> 00:00:58,240 Speaker 1: some areas of strengthen economy, whether it's housing, whether it's 19 00:00:58,240 --> 00:01:00,560 Speaker 1: consumer spending. Looks like the consumer is going to be 20 00:01:00,600 --> 00:01:02,959 Speaker 1: spending here this holiday season here, But you know, when 21 00:01:03,000 --> 00:01:04,760 Speaker 1: you take a look at the labor market here, it 22 00:01:04,880 --> 00:01:07,120 Speaker 1: remains very, very challenging. And I think a lot of 23 00:01:07,120 --> 00:01:10,360 Speaker 1: the concerns from economists, you know, how much of this is, 24 00:01:10,680 --> 00:01:12,640 Speaker 1: you know a little bit more on the permanent side 25 00:01:13,200 --> 00:01:15,960 Speaker 1: versus temporary in terms of the joblessness. Well, let's ask 26 00:01:16,040 --> 00:01:18,039 Speaker 1: somebody else who we haven't spoken to in Ohile and 27 00:01:18,040 --> 00:01:20,960 Speaker 1: who were excited to have back. Carl Rickadonna joined us. 28 00:01:21,000 --> 00:01:22,840 Speaker 1: What a little present for the end of the year. 29 00:01:23,160 --> 00:01:26,559 Speaker 1: Carl is a chief US economist of course for Bloomberg Economics, 30 00:01:26,560 --> 00:01:29,360 Speaker 1: and Carl, it is fantastic to have you back. Also, 31 00:01:29,480 --> 00:01:32,880 Speaker 1: I have to wonder what you're thinking coming back in 32 00:01:32,920 --> 00:01:35,480 Speaker 1: this kind of environment, with the job market that is very, 33 00:01:35,680 --> 00:01:39,959 Speaker 1: very different from just a few months ago. Absolutely good 34 00:01:40,040 --> 00:01:42,120 Speaker 1: morning at you both, and thanks for having me back 35 00:01:42,160 --> 00:01:46,240 Speaker 1: on You know, I have to draw some real distinctions 36 00:01:46,640 --> 00:01:52,160 Speaker 1: with what Larry cut Low was suggesting, saying that in 37 00:01:52,200 --> 00:01:54,960 Speaker 1: the interview he said that the job number was a 38 00:01:55,040 --> 00:02:00,080 Speaker 1: wee bit below what was expected. That two thousand a 39 00:02:00,080 --> 00:02:02,680 Speaker 1: pretty big number. So the old expression close enough for 40 00:02:02,760 --> 00:02:06,720 Speaker 1: government work, I guess applied to something and you thinks there. Uh, 41 00:02:07,240 --> 00:02:09,320 Speaker 1: and also he said, you know, this is a good 42 00:02:09,320 --> 00:02:12,800 Speaker 1: report for the holiday season, and whatnot. The only the 43 00:02:12,800 --> 00:02:15,000 Speaker 1: only person who liked this for the holiday season is 44 00:02:15,040 --> 00:02:18,320 Speaker 1: the grinch. I mean, we saw a very sharp decline 45 00:02:18,360 --> 00:02:21,799 Speaker 1: in retail hiring. That's such an important job engine at 46 00:02:21,800 --> 00:02:25,160 Speaker 1: this time of year, and that is just endemic of 47 00:02:25,360 --> 00:02:29,280 Speaker 1: or emblematic of, you know, the type of heartbreaking we're 48 00:02:29,320 --> 00:02:32,519 Speaker 1: seeing in the economy right now. The service sector absolutely 49 00:02:32,639 --> 00:02:36,680 Speaker 1: clobbered UH in that today's report, a big down shift. 50 00:02:37,200 --> 00:02:41,160 Speaker 1: We had this reopening boom over the last several months, 51 00:02:41,560 --> 00:02:43,560 Speaker 1: and as we look at the details of this report, 52 00:02:43,639 --> 00:02:46,680 Speaker 1: we can see that basically came to an end in 53 00:02:46,760 --> 00:02:51,600 Speaker 1: today's data. And unfortunately, UH, the November jobs report was 54 00:02:51,720 --> 00:02:56,480 Speaker 1: talied much the recent surge and case counts and UH 55 00:02:56,680 --> 00:03:01,160 Speaker 1: lockdown measures. So whatever November looked like, know already that 56 00:03:01,280 --> 00:03:03,840 Speaker 1: December is going to be far, far weaker. So this 57 00:03:03,880 --> 00:03:08,119 Speaker 1: is the start of a very chilly winter season four 58 00:03:08,320 --> 00:03:11,480 Speaker 1: the labor market in general and also for the economy. 59 00:03:11,600 --> 00:03:14,240 Speaker 1: I don't see holiday cheer in this report, that's to 60 00:03:14,280 --> 00:03:17,760 Speaker 1: be sure. Yeah. One of the really disconcerting aspects of 61 00:03:17,800 --> 00:03:19,359 Speaker 1: it is, you know, the really bad news in the 62 00:03:19,400 --> 00:03:22,920 Speaker 1: unemployment is for those twenty seven weeks or longer. That 63 00:03:23,000 --> 00:03:26,000 Speaker 1: rose to three point nine four million people, and the 64 00:03:26,080 --> 00:03:29,080 Speaker 1: average duration in weeks is now at twenty three point 65 00:03:29,120 --> 00:03:32,760 Speaker 1: two So it really goes to the issue Carl. A 66 00:03:32,840 --> 00:03:36,160 Speaker 1: lot of this unemployment, which maybe we initially thought might 67 00:03:36,200 --> 00:03:38,480 Speaker 1: be temporary at the beginning of the pandemic, is looking 68 00:03:38,480 --> 00:03:42,360 Speaker 1: more and more permanent, and that raises some big issues. Well, 69 00:03:42,440 --> 00:03:44,560 Speaker 1: I do think that that much of that unemployment is 70 00:03:44,600 --> 00:03:46,880 Speaker 1: going to be temporary, but the temporary spell is going 71 00:03:46,920 --> 00:03:49,400 Speaker 1: to last a lot longer. It's going to last until 72 00:03:49,720 --> 00:03:52,960 Speaker 1: basically the spring saw, until we've had a reopening of 73 00:03:53,000 --> 00:03:56,720 Speaker 1: the economy and broad distribution of the vaccine. The alarming 74 00:03:56,800 --> 00:04:00,240 Speaker 1: number there is that twenty six week threshold because as 75 00:04:00,520 --> 00:04:04,320 Speaker 1: unemployed individuals start to approach the twenty six week mark, 76 00:04:04,760 --> 00:04:07,920 Speaker 1: then they start to drop out of state unemployment benefits. 77 00:04:07,920 --> 00:04:10,960 Speaker 1: So there have been some extensions and some special programs, 78 00:04:11,240 --> 00:04:14,400 Speaker 1: although those are due to expire for the most part 79 00:04:14,760 --> 00:04:16,960 Speaker 1: at the end of this year unless they get additional 80 00:04:16,960 --> 00:04:20,840 Speaker 1: fiscal support from Congress and the White House. So there 81 00:04:20,960 --> 00:04:23,800 Speaker 1: is a very real problem here that we're approaching an 82 00:04:23,880 --> 00:04:28,080 Speaker 1: income cliff as those who are out of work are 83 00:04:28,120 --> 00:04:30,760 Speaker 1: facing the expiration of benefits and that will be a 84 00:04:31,040 --> 00:04:34,520 Speaker 1: real drag on the economy at a time when really, 85 00:04:34,520 --> 00:04:37,479 Speaker 1: as we look at our models, it's consumer spending that 86 00:04:37,600 --> 00:04:40,640 Speaker 1: is doing all of the heavy lifting for the economy. So, Carl, 87 00:04:40,800 --> 00:04:43,960 Speaker 1: you know, we constantly have people on that are actually 88 00:04:44,000 --> 00:04:47,200 Speaker 1: you know, talking up the economy and and and respected economists. 89 00:04:47,200 --> 00:04:49,960 Speaker 1: I'm not just talking you know, money managers or what 90 00:04:50,000 --> 00:04:51,919 Speaker 1: have you, who are looking at the market itself continuing 91 00:04:51,960 --> 00:04:55,679 Speaker 1: to go up. But very few people are actually sounding 92 00:04:55,680 --> 00:04:59,279 Speaker 1: the alarm on an economic cliff. They're saying that the 93 00:04:59,320 --> 00:05:02,039 Speaker 1: economy is bound see back faster than we thought that. Yeah, 94 00:05:02,040 --> 00:05:05,680 Speaker 1: there may be another short dip into recessionary territory, but 95 00:05:06,200 --> 00:05:08,240 Speaker 1: really it's a K shaped economy and it's only one 96 00:05:08,320 --> 00:05:11,720 Speaker 1: part of the labor force or the economy that will 97 00:05:11,839 --> 00:05:15,680 Speaker 1: feel the worst of this. Do you agree with those sentiments. 98 00:05:16,640 --> 00:05:21,360 Speaker 1: I think the the the incessant rally in the equity 99 00:05:21,400 --> 00:05:25,680 Speaker 1: market has created an inpriating haze over the economic outlaw. 100 00:05:26,160 --> 00:05:30,440 Speaker 1: So the reality is here that we are heading towards 101 00:05:30,560 --> 00:05:33,520 Speaker 1: a second contraction in the economy. It could be starting 102 00:05:33,520 --> 00:05:37,040 Speaker 1: in December. It most likely will be concentrated in the 103 00:05:37,040 --> 00:05:40,480 Speaker 1: first quarter of the year, we are looking for a contraction. 104 00:05:40,520 --> 00:05:43,839 Speaker 1: I know some other big shops are looking for economic 105 00:05:43,839 --> 00:05:47,120 Speaker 1: contractions in the first quarter. So there's this optimism that yes, 106 00:05:47,160 --> 00:05:50,360 Speaker 1: a vaccine is coming, so eventually we'll be out of 107 00:05:50,400 --> 00:05:54,520 Speaker 1: this uh, this muck, this swoon. But the real question, 108 00:05:54,560 --> 00:05:57,160 Speaker 1: for the more pressent question, is how deep of a 109 00:05:57,200 --> 00:05:59,760 Speaker 1: downturn we're going to have in the meantime while we 110 00:05:59,760 --> 00:06:02,480 Speaker 1: wait for the vaccines to be broadly distributed, while we 111 00:06:02,480 --> 00:06:06,599 Speaker 1: wait for economic stimulus to help the economy, and also 112 00:06:06,720 --> 00:06:09,119 Speaker 1: for just the general reopening to happen in the spring. 113 00:06:09,480 --> 00:06:12,000 Speaker 1: If we're talking about a half a percentage point contraction 114 00:06:12,040 --> 00:06:15,960 Speaker 1: in the first quarter, which is our current estimate, that's manageable. 115 00:06:16,120 --> 00:06:18,919 Speaker 1: We can muddle through. But if things go poorly and 116 00:06:18,920 --> 00:06:21,479 Speaker 1: there's no guarantee that will have a perfect execution here, 117 00:06:21,800 --> 00:06:24,200 Speaker 1: you can have a much deeper contraction, and that creates 118 00:06:24,200 --> 00:06:27,719 Speaker 1: a whole additional slew of folks who can't pay rent 119 00:06:27,760 --> 00:06:30,520 Speaker 1: and mortgages. Of it are missed in the financial contraction 120 00:06:30,680 --> 00:06:35,039 Speaker 1: and corporate bankruptcies. So Carl, we saw Jonathan Paraoll just 121 00:06:35,080 --> 00:06:38,360 Speaker 1: minutes ago with UH Larry Cudlow trying to press Mr. 122 00:06:38,400 --> 00:06:41,640 Speaker 1: Cudlow on um stimulus and kind of where are we 123 00:06:41,680 --> 00:06:44,960 Speaker 1: in stimulus and what's the White House perspective. Just from 124 00:06:44,960 --> 00:06:48,159 Speaker 1: my listen, I didn't really get any sense that anything 125 00:06:48,240 --> 00:06:51,160 Speaker 1: is imminent. What do you guys kind of discounting in 126 00:06:51,279 --> 00:06:58,120 Speaker 1: your models as to the stimulus size scope and maybe timing, well, 127 00:06:58,160 --> 00:07:00,560 Speaker 1: the stimulus has to be put in play before the 128 00:07:00,640 --> 00:07:02,080 Speaker 1: end of the year or there's going to be a 129 00:07:02,160 --> 00:07:07,360 Speaker 1: real problem with that household finances, especially those of the unemployed. 130 00:07:07,760 --> 00:07:10,920 Speaker 1: Uh that that's a big issue, but there's also additional 131 00:07:11,000 --> 00:07:14,480 Speaker 1: problems for small businesses, which are the dominant engine of 132 00:07:14,600 --> 00:07:17,920 Speaker 1: job growth. Uh. And also the issue that Larry Cutlo 133 00:07:18,040 --> 00:07:22,760 Speaker 1: really didn't want to address was aid for states and municipalities. 134 00:07:22,800 --> 00:07:25,000 Speaker 1: And it's easy to say, well, we should punish the 135 00:07:25,040 --> 00:07:31,080 Speaker 1: Blue states because they have under funded pension plans and whatnot. Nonetheless, 136 00:07:31,120 --> 00:07:34,200 Speaker 1: the fact of the matter is economic growth over the 137 00:07:34,280 --> 00:07:39,800 Speaker 1: last several decades is driven by urban centers, by cities 138 00:07:39,960 --> 00:07:43,280 Speaker 1: the New York's, the Boston's, and Los Angeles. Uh, those 139 00:07:43,320 --> 00:07:46,600 Speaker 1: cities are are you know, we're moving towards a service sector, 140 00:07:47,200 --> 00:07:50,320 Speaker 1: service dominated economy, and it's all happening in the cities 141 00:07:50,400 --> 00:07:53,440 Speaker 1: in the Tech Center San Francisco, for example. If we 142 00:07:53,560 --> 00:07:57,520 Speaker 1: leave those cities out to drive and their transit systems 143 00:07:57,600 --> 00:08:01,400 Speaker 1: are are impaired and other infrastruct your issues are unresolved 144 00:08:01,720 --> 00:08:04,600 Speaker 1: and they can't fully reopen, that is absolutely going to 145 00:08:04,640 --> 00:08:07,480 Speaker 1: impair the recovery as well. So we have to be 146 00:08:07,560 --> 00:08:10,240 Speaker 1: very careful that we're not too stingy with stimulus, and 147 00:08:10,280 --> 00:08:12,560 Speaker 1: we pay the cost as we did back in two 148 00:08:12,560 --> 00:08:16,480 Speaker 1: thousand in the next couple of years by being too 149 00:08:16,480 --> 00:08:20,760 Speaker 1: stingy and therefore cramping the extent that the pace of 150 00:08:20,800 --> 00:08:23,360 Speaker 1: the economic recuple very briefly, Carl, were out of time. 151 00:08:23,400 --> 00:08:26,840 Speaker 1: But if the incoming administration is much more inclined to 152 00:08:26,880 --> 00:08:28,760 Speaker 1: do something like this, will they be able to get 153 00:08:28,800 --> 00:08:32,280 Speaker 1: it through and quickly? Well, I'll answer that question on 154 00:08:32,360 --> 00:08:34,600 Speaker 1: January Stiff, when we know the results of the Georgia 155 00:08:34,679 --> 00:08:37,560 Speaker 1: runoff collection we're looking at split Congress. Then it's going 156 00:08:37,600 --> 00:08:41,120 Speaker 1: to be a very stingy stimulus site here. Isn't that 157 00:08:41,360 --> 00:08:44,240 Speaker 1: really something else? Carl? Thank you those of reality there 158 00:08:44,320 --> 00:08:47,200 Speaker 1: from Carl RICKA Donna telling us that we're heading towards 159 00:08:47,240 --> 00:08:49,880 Speaker 1: a second contraction. We just we just are, and that 160 00:08:50,000 --> 00:08:53,800 Speaker 1: this inebriating haze is the market which keeps going higher, 161 00:08:53,800 --> 00:08:56,640 Speaker 1: and we cannot let that impact what we think of 162 00:08:56,679 --> 00:09:00,000 Speaker 1: the economic fundamentals, which are obvious ball Yeah, they really are. 163 00:09:00,040 --> 00:09:02,120 Speaker 1: And in the job Stata today kind of just put 164 00:09:02,120 --> 00:09:06,319 Speaker 1: an underline to that issue, and you know Carl's analysis, 165 00:09:06,440 --> 00:09:09,280 Speaker 1: you know, suggesting that we really the economy really needs 166 00:09:09,280 --> 00:09:12,559 Speaker 1: fiscal stumius before the end of this calendar year when 167 00:09:12,600 --> 00:09:14,920 Speaker 1: some of these programs do are set to expire. It 168 00:09:14,920 --> 00:09:18,480 Speaker 1: really goes to uh kind of the timing challenge for 169 00:09:18,640 --> 00:09:21,080 Speaker 1: Congress in the White House, and the fact that economic 170 00:09:21,120 --> 00:09:24,319 Speaker 1: growth is driven by urban centers really struck with me too. 171 00:09:24,360 --> 00:09:27,439 Speaker 1: That's what Carl said there, and it's just so true. 172 00:09:27,440 --> 00:09:34,079 Speaker 1: It's a geographic imperative as much as anything else. Well, 173 00:09:34,080 --> 00:09:36,360 Speaker 1: now it is time to have a look at e 174 00:09:36,559 --> 00:09:41,240 Speaker 1: s G Environmental, social and governance investing, and there's so 175 00:09:41,360 --> 00:09:43,760 Speaker 1: much chatter about e s G going on that we 176 00:09:43,800 --> 00:09:46,800 Speaker 1: need to sort of orient ourselves within what part of 177 00:09:46,840 --> 00:09:51,400 Speaker 1: this investment management area we're looking at. Let's bring in 178 00:09:51,480 --> 00:09:54,040 Speaker 1: Christie Hill, who's head of America's Asset Management and global 179 00:09:54,080 --> 00:09:57,600 Speaker 1: head of e s G for PGM real Estate one 180 00:09:57,640 --> 00:10:01,000 Speaker 1: hundred two billion dollars in assets under management. So, Christie, 181 00:10:01,080 --> 00:10:03,640 Speaker 1: help us here, it's great to speak with you. Help 182 00:10:03,720 --> 00:10:08,640 Speaker 1: us understand how you can be a real estate investor 183 00:10:09,320 --> 00:10:11,320 Speaker 1: in the E s G space. What does that mean 184 00:10:13,040 --> 00:10:15,199 Speaker 1: you for? For us in real estate and E SG, 185 00:10:15,559 --> 00:10:18,959 Speaker 1: it really is about, I would say, assessing the risks 186 00:10:19,200 --> 00:10:22,200 Speaker 1: um that we viewed through the through the s G lens. 187 00:10:22,200 --> 00:10:26,640 Speaker 1: So it's about thinking about climate change and understanding not 188 00:10:26,760 --> 00:10:29,400 Speaker 1: just your you know, your impacts or the impacts of 189 00:10:29,440 --> 00:10:32,560 Speaker 1: sea level rise, but really thinking thoughtfully about all of 190 00:10:32,600 --> 00:10:36,280 Speaker 1: the impacts of climate change, your physical, social transitional and 191 00:10:36,760 --> 00:10:39,880 Speaker 1: understanding not only you know how they're going to impact 192 00:10:39,920 --> 00:10:43,480 Speaker 1: you insurance markets and how mass migration is going to 193 00:10:43,559 --> 00:10:48,280 Speaker 1: be impacting our markets, or how evolving regulatory involving environments 194 00:10:48,320 --> 00:10:51,280 Speaker 1: are going to change our environment. It's about understanding the 195 00:10:51,320 --> 00:10:54,280 Speaker 1: impact on the real estate, but also understanding the financial 196 00:10:54,360 --> 00:10:57,080 Speaker 1: impact on the real estate UM. So I think for 197 00:10:57,160 --> 00:11:01,199 Speaker 1: us it's about trying to really intensely do due diligence 198 00:11:01,240 --> 00:11:03,960 Speaker 1: to assess our risk and make sure that we're being 199 00:11:03,960 --> 00:11:06,599 Speaker 1: thoughtful in our approach so that we can devise strategies 200 00:11:06,640 --> 00:11:10,720 Speaker 1: to mitigate it. So, Christie, how have you change your 201 00:11:10,760 --> 00:11:14,800 Speaker 1: investment process as you factor in E s G elements 202 00:11:15,160 --> 00:11:19,640 Speaker 1: into your analysis. You know, it's it's constantly evolving, and 203 00:11:19,640 --> 00:11:22,480 Speaker 1: the more we learn UM, the more that investment process 204 00:11:22,520 --> 00:11:25,679 Speaker 1: evolved with it. So it's about making sure we're you know, 205 00:11:25,760 --> 00:11:28,160 Speaker 1: kind of a little bit too to my comment before 206 00:11:28,320 --> 00:11:32,720 Speaker 1: making sure we're considering all of the proper factors and 207 00:11:32,760 --> 00:11:35,840 Speaker 1: all of the appropriate risks up front UM, so that 208 00:11:35,920 --> 00:11:39,200 Speaker 1: we can not just quantify them prior to prior to 209 00:11:39,280 --> 00:11:41,800 Speaker 1: making that investment, but so that we can allow that 210 00:11:41,960 --> 00:11:46,520 Speaker 1: diligence to inform our strategy operationally moving forward. How has 211 00:11:46,559 --> 00:11:49,480 Speaker 1: the pandemic changed how you look at investments and what 212 00:11:49,559 --> 00:11:55,840 Speaker 1: you do? You know, I think the pandemic has impacted 213 00:11:55,840 --> 00:11:57,200 Speaker 1: the one thing we've been able to see is that 214 00:11:57,240 --> 00:12:01,800 Speaker 1: this pandemic has impacted different sector is very differently UM, 215 00:12:01,920 --> 00:12:04,400 Speaker 1: and we can see that there have been clear winners 216 00:12:04,440 --> 00:12:07,920 Speaker 1: and losers. So I think for us UM, it's it's 217 00:12:07,960 --> 00:12:10,920 Speaker 1: forced us to take a step back and be thoughtful. 218 00:12:10,960 --> 00:12:12,560 Speaker 1: The last thing that we want to do from an 219 00:12:12,600 --> 00:12:16,600 Speaker 1: investment perspective is the reactionary UM. So I think it's 220 00:12:16,600 --> 00:12:20,000 Speaker 1: caused us to pause UM with the asset classes that 221 00:12:20,040 --> 00:12:22,160 Speaker 1: we think are going to be more affected by this 222 00:12:22,240 --> 00:12:25,200 Speaker 1: in the near term, UM. But it's also hasn't It 223 00:12:25,240 --> 00:12:28,439 Speaker 1: hasn't stopped us from pursuing investments UM where we think 224 00:12:28,480 --> 00:12:31,800 Speaker 1: there's clarity and opportunity. So Christie, you know, one of 225 00:12:31,800 --> 00:12:34,640 Speaker 1: the issues that people are thinking about as it relates 226 00:12:34,679 --> 00:12:38,240 Speaker 1: to real estate resulting from this pandemic is the change 227 00:12:38,240 --> 00:12:42,199 Speaker 1: in the work home a dynamic more people working from home, uh, 228 00:12:42,280 --> 00:12:45,040 Speaker 1: suggesting that maybe the need for office space and the 229 00:12:45,080 --> 00:12:47,640 Speaker 1: big towers and the urban centers is not what it 230 00:12:47,720 --> 00:12:52,280 Speaker 1: was pre pandemic. How are you guys thinking about that? Well, 231 00:12:52,400 --> 00:12:55,800 Speaker 1: certainly the office of the future is topic du jur 232 00:12:56,040 --> 00:12:58,880 Speaker 1: during COVID, and I think it's very much an example 233 00:12:58,960 --> 00:13:02,280 Speaker 1: of UM as cliche as this may sound, example of 234 00:13:02,280 --> 00:13:06,199 Speaker 1: COVID accelerating and already existing trend. We've been talking about 235 00:13:06,679 --> 00:13:09,319 Speaker 1: real remote work dynamics UM for a long time. This 236 00:13:09,440 --> 00:13:12,839 Speaker 1: technology has enabled that, and certainly, you know COVID now 237 00:13:12,880 --> 00:13:15,560 Speaker 1: forcing everybody to be remote is really shining a bright 238 00:13:15,640 --> 00:13:18,240 Speaker 1: light on it. UM. I think it's a little too 239 00:13:18,240 --> 00:13:20,960 Speaker 1: soon to say what that impact is going to be. 240 00:13:21,160 --> 00:13:24,719 Speaker 1: I mean, you hear a lot of alternate, alternate scenarios, 241 00:13:25,240 --> 00:13:28,000 Speaker 1: more more, more square footage with fewer people less square 242 00:13:28,000 --> 00:13:31,760 Speaker 1: footage altogether. UM. We certainly believe there is going to 243 00:13:31,800 --> 00:13:35,000 Speaker 1: be demand for office UM long into the future. This 244 00:13:35,040 --> 00:13:37,280 Speaker 1: is something we're looking into as a tenant as well 245 00:13:37,320 --> 00:13:39,480 Speaker 1: as an owner. UM. But I think we're trying to 246 00:13:39,559 --> 00:13:43,000 Speaker 1: be pragmatic in our approach. We know that there's going 247 00:13:43,040 --> 00:13:46,000 Speaker 1: to be greater flexibility needed in the future. UM, but 248 00:13:46,080 --> 00:13:48,920 Speaker 1: certainly believe that that demand for for office real estate 249 00:13:49,040 --> 00:13:52,679 Speaker 1: is not going away. So I presume you're everywhere, right, Christie. 250 00:13:52,679 --> 00:13:56,360 Speaker 1: You're involved probably all over the world and in most 251 00:13:56,440 --> 00:14:01,040 Speaker 1: United States. But are there geographies that you're considering being 252 00:14:01,120 --> 00:14:04,440 Speaker 1: less bullish on now and others that you're considering, you know, 253 00:14:04,520 --> 00:14:08,480 Speaker 1: moving into UM. You know, for from an E s 254 00:14:08,559 --> 00:14:11,320 Speaker 1: G perspective, certainly my purview is global. From the asset 255 00:14:11,360 --> 00:14:14,200 Speaker 1: management perspective, I'm very much focused in the US. But 256 00:14:14,760 --> 00:14:16,640 Speaker 1: I don't think that, you know, when we think about 257 00:14:16,679 --> 00:14:19,120 Speaker 1: E s G. The concept, you know, when we think 258 00:14:19,120 --> 00:14:23,520 Speaker 1: about E s G resiliency isn't necessarily about saying, because 259 00:14:23,560 --> 00:14:26,480 Speaker 1: there is a challenged area, we're not going to go there. 260 00:14:26,800 --> 00:14:30,200 Speaker 1: It really is about making sure that if we're identifying 261 00:14:30,200 --> 00:14:33,000 Speaker 1: that challenge up front, so that we can identify a 262 00:14:33,040 --> 00:14:35,840 Speaker 1: strategy to mitigate that challenge, and there may be places 263 00:14:35,840 --> 00:14:41,400 Speaker 1: where that presents opportunity. So Christie has as E s G. Uh, 264 00:14:41,480 --> 00:14:43,960 Speaker 1: you know the growth of s G in your analysis 265 00:14:43,960 --> 00:14:47,920 Speaker 1: that caused you to either, uh maybe overweights a sector 266 00:14:48,080 --> 00:14:50,720 Speaker 1: or underweight a sector. Has it really changed how you've 267 00:14:51,000 --> 00:14:54,400 Speaker 1: actually put money to work? You know. E s G 268 00:14:54,520 --> 00:14:57,680 Speaker 1: is something that we think is applicable across all sectors, 269 00:14:57,760 --> 00:14:59,960 Speaker 1: and we want to look at E s Q factors, 270 00:15:00,320 --> 00:15:04,440 Speaker 1: factors and risks across each sector. So I don't think 271 00:15:04,440 --> 00:15:07,440 Speaker 1: it's it's at this point, it's nothing that or nothing 272 00:15:07,440 --> 00:15:08,920 Speaker 1: has come out of it that said we're going to 273 00:15:08,960 --> 00:15:10,360 Speaker 1: do this or we're not going to do this. It's 274 00:15:10,360 --> 00:15:14,320 Speaker 1: about making sure we're applying um kind of that that 275 00:15:14,440 --> 00:15:17,400 Speaker 1: E s G filter equally across all of our asset 276 00:15:17,440 --> 00:15:19,400 Speaker 1: classes to make sure that we have a strong s 277 00:15:19,480 --> 00:15:23,320 Speaker 1: G strategy, despite sector, despite region. Christie Hill, thank you 278 00:15:23,360 --> 00:15:25,200 Speaker 1: so much for joining us. We appreciate it. Christy Hill 279 00:15:25,240 --> 00:15:28,440 Speaker 1: is the head of America's asset management and global head 280 00:15:28,480 --> 00:15:31,440 Speaker 1: of E s G for p JIM Real Estate. They 281 00:15:31,440 --> 00:15:35,440 Speaker 1: have about one two billion dollars and assets under management, 282 00:15:35,480 --> 00:15:38,600 Speaker 1: so they certainly have a good feel for the real 283 00:15:38,720 --> 00:15:40,920 Speaker 1: estate market. And of course as you think about some 284 00:15:40,960 --> 00:15:42,960 Speaker 1: of this commercial real estate, one of the big issues 285 00:15:43,080 --> 00:15:47,440 Speaker 1: is what will be retail footprints um for certain retailers. 286 00:15:47,480 --> 00:15:50,080 Speaker 1: Number one, Number two, what is the work dynamic going 287 00:15:50,120 --> 00:15:52,040 Speaker 1: to be? What is the office dynamic going to look 288 00:15:52,080 --> 00:15:58,040 Speaker 1: like going forward? Is as much real square footage really needed? Well, 289 00:15:58,080 --> 00:16:01,960 Speaker 1: it was a big, big week in the media world. 290 00:16:02,360 --> 00:16:04,360 Speaker 1: Warner Brothers, one of the biggest media companies, one of 291 00:16:04,360 --> 00:16:07,080 Speaker 1: the biggest film and television studios, and announced this week 292 00:16:07,120 --> 00:16:10,920 Speaker 1: that is going to release all of its films on 293 00:16:11,240 --> 00:16:15,720 Speaker 1: HBO Max streaming service the same day they hit theaters. 294 00:16:15,800 --> 00:16:18,280 Speaker 1: This is a big, big change for the movie business. 295 00:16:18,320 --> 00:16:20,120 Speaker 1: Let's get some details. We can do that with Tara 296 00:16:20,200 --> 00:16:24,160 Speaker 1: La Chapelle, Bloomberg Opinion media columnists. So, Tara, big news 297 00:16:24,240 --> 00:16:27,360 Speaker 1: from Warner What do you think their strategy is here? Well, 298 00:16:27,400 --> 00:16:29,720 Speaker 1: you know, I think right now, with theaters still a 299 00:16:29,760 --> 00:16:32,480 Speaker 1: lot of them being closed because of COVID, they're looking 300 00:16:32,480 --> 00:16:35,320 Speaker 1: at next year and saying, yes, there's vaccines around the corner, 301 00:16:35,440 --> 00:16:38,480 Speaker 1: but it's still too students really have any visibilities. So 302 00:16:39,000 --> 00:16:40,880 Speaker 1: you want people to see these movies that you spend 303 00:16:40,880 --> 00:16:43,000 Speaker 1: a ton of money on. You want people to subscribe 304 00:16:43,040 --> 00:16:45,320 Speaker 1: to HBO Max. So if your a T n T 305 00:16:45,480 --> 00:16:47,880 Speaker 1: and you're looking at that, you're thinking, well, I should 306 00:16:47,920 --> 00:16:50,160 Speaker 1: just put the movies on HBO Max. And I think 307 00:16:50,200 --> 00:16:52,080 Speaker 1: that's a really smart decision. It's it's going to be 308 00:16:52,080 --> 00:16:55,880 Speaker 1: painful for movie theaters because those that are open. I 309 00:16:55,880 --> 00:16:57,200 Speaker 1: think a lot of people are probably just going to 310 00:16:57,320 --> 00:16:59,280 Speaker 1: choose to watch from home if they have that option. 311 00:16:59,360 --> 00:17:02,400 Speaker 1: And HBO Max costs fifteen dollars a month. If you're 312 00:17:02,400 --> 00:17:04,560 Speaker 1: getting a new movie every few weeks, I mean that 313 00:17:04,640 --> 00:17:06,520 Speaker 1: starts to look like a pretty good value, you know, 314 00:17:06,760 --> 00:17:09,960 Speaker 1: from being really expensive to being kind of compelling. So 315 00:17:10,200 --> 00:17:11,960 Speaker 1: I think what they're doing is smart, but it's just 316 00:17:12,040 --> 00:17:13,560 Speaker 1: it is going to be painful for the movie theater 317 00:17:13,600 --> 00:17:16,280 Speaker 1: industry and to be cure of these movies only stay 318 00:17:16,280 --> 00:17:18,879 Speaker 1: on for a month, so you have a limited viewing window, 319 00:17:19,119 --> 00:17:21,919 Speaker 1: let's say, and they're also in theaters at the same time. 320 00:17:22,240 --> 00:17:24,240 Speaker 1: The question I think, Tara is whether this is going 321 00:17:24,240 --> 00:17:26,919 Speaker 1: to be a permanent move on the part of Warner Brothers, 322 00:17:27,000 --> 00:17:29,520 Speaker 1: or whether they will revert to having, you know, a 323 00:17:29,560 --> 00:17:33,160 Speaker 1: theatrical window first once vaccines are available to the whole world. 324 00:17:34,240 --> 00:17:37,040 Speaker 1: Warner Brothers is saying that this is a unique one 325 00:17:37,200 --> 00:17:40,400 Speaker 1: year thing. I I just don't see it being bad. 326 00:17:40,400 --> 00:17:43,160 Speaker 1: I think even if they are planning it that way now, 327 00:17:43,640 --> 00:17:45,840 Speaker 1: by this time next year, it's going to be pretty 328 00:17:45,840 --> 00:17:50,119 Speaker 1: clear that streaming is the most important product. It's something 329 00:17:50,160 --> 00:17:52,720 Speaker 1: they really have to keep pushing with, especially with all 330 00:17:52,760 --> 00:17:55,840 Speaker 1: the competition they have from Disney, Netflix and others. So 331 00:17:55,880 --> 00:17:57,520 Speaker 1: I think by this time next year, we're going to 332 00:17:57,560 --> 00:17:59,320 Speaker 1: be looking at this and saying this is probably going 333 00:17:59,400 --> 00:18:01,640 Speaker 1: to be permanent. Maybe it doesn't look exactly this way, 334 00:18:01,640 --> 00:18:04,720 Speaker 1: and maybe they have to bend sousastrical windows a little 335 00:18:04,720 --> 00:18:07,960 Speaker 1: bit to keep that relationship. But I just I think 336 00:18:08,400 --> 00:18:10,720 Speaker 1: more and more people want to watch movies from home, 337 00:18:10,800 --> 00:18:12,800 Speaker 1: and it would just be silly for these companies to 338 00:18:12,880 --> 00:18:16,560 Speaker 1: ignore that. So Tarrett seems to me. I'm not sure 339 00:18:16,560 --> 00:18:18,560 Speaker 1: if they've released any the economics here, but it seems 340 00:18:18,560 --> 00:18:20,640 Speaker 1: to me they're Warner is going to take a big 341 00:18:20,680 --> 00:18:23,240 Speaker 1: financial hit here, at least in the near term. It 342 00:18:23,320 --> 00:18:25,480 Speaker 1: seems like if they spend a hundred million dollars on 343 00:18:25,520 --> 00:18:28,399 Speaker 1: a movie, Okay, I pay fifteen bucks through HBO Max 344 00:18:28,440 --> 00:18:30,199 Speaker 1: and my family could sit in on the sofa and 345 00:18:30,240 --> 00:18:32,000 Speaker 1: see it. But if I were taking a family of 346 00:18:32,080 --> 00:18:34,560 Speaker 1: four to the theater, they'd be fifty in revenue as 347 00:18:34,560 --> 00:18:38,600 Speaker 1: opposed to fifteen. What are they saying about the profitability 348 00:18:38,800 --> 00:18:42,520 Speaker 1: impact for the strategy for next year. Well, they're avoiding 349 00:18:42,560 --> 00:18:44,560 Speaker 1: saying too much of anything about it, but you're right, 350 00:18:44,600 --> 00:18:46,080 Speaker 1: it's clear that they're going to lose a lot of 351 00:18:46,080 --> 00:18:48,280 Speaker 1: money on this, but I think they see it as 352 00:18:48,320 --> 00:18:51,879 Speaker 1: probably worth it. You know, it's very expensive to even 353 00:18:51,920 --> 00:18:55,040 Speaker 1: just promote these movies, and the box office really helps off. 354 00:18:55,040 --> 00:18:56,399 Speaker 1: That's that and that's how they make a lot of 355 00:18:56,440 --> 00:18:58,879 Speaker 1: their money. But if you're putting it on a streaming service, 356 00:18:58,920 --> 00:19:00,320 Speaker 1: it makes me wonder if you need get to do 357 00:19:00,400 --> 00:19:02,400 Speaker 1: so much promoting. If if people kind of just get 358 00:19:02,400 --> 00:19:04,320 Speaker 1: in the habit of knowing there's always going to be 359 00:19:04,359 --> 00:19:06,560 Speaker 1: a new big movie on HBO Max, maybe you don't 360 00:19:06,560 --> 00:19:09,200 Speaker 1: need to spend as much. Maybe over time this becomes 361 00:19:09,200 --> 00:19:12,359 Speaker 1: a little bit more of a feasible, practical strategy. But 362 00:19:12,520 --> 00:19:14,640 Speaker 1: for next year, certainly this is going to be very 363 00:19:14,680 --> 00:19:17,199 Speaker 1: costly for the company. I just don't think that shareholders 364 00:19:17,200 --> 00:19:19,520 Speaker 1: will be so worried about it because Disney is doing 365 00:19:20,040 --> 00:19:23,560 Speaker 1: similar things. They're really prioritizing streaming, even though it is 366 00:19:23,640 --> 00:19:26,040 Speaker 1: losing money, and I think it's just because people know 367 00:19:26,240 --> 00:19:29,360 Speaker 1: over time the goal is get as many subscribers as 368 00:19:29,400 --> 00:19:32,199 Speaker 1: you can, increase engagement as much as you can, and 369 00:19:32,240 --> 00:19:35,159 Speaker 1: then eventually the profits will follow. So it's kind of 370 00:19:35,200 --> 00:19:38,800 Speaker 1: a long term that. Does it force other studios to 371 00:19:38,800 --> 00:19:41,760 Speaker 1: do the same? MC down twenty now in the last 372 00:19:41,760 --> 00:19:44,879 Speaker 1: two days. Yeah, I think it's a shot across about 373 00:19:44,880 --> 00:19:49,000 Speaker 1: at Disney, especially UM. I think that there's definitely something 374 00:19:49,040 --> 00:19:53,280 Speaker 1: to being first here and first to something inevitable. Uh So, 375 00:19:53,320 --> 00:19:55,720 Speaker 1: I think that other companies will have to do something similar, 376 00:19:55,720 --> 00:19:57,840 Speaker 1: and a lot of them were moving in that direction 377 00:19:57,920 --> 00:20:01,160 Speaker 1: in some ways. You know, Mulan went straight to Disney 378 00:20:01,160 --> 00:20:04,879 Speaker 1: Plus for a thirty dollar fee. Earlier this year, Comcast 379 00:20:04,920 --> 00:20:09,080 Speaker 1: shortened it's um NBC universal window with AMC theaters, So 380 00:20:09,200 --> 00:20:11,480 Speaker 1: I think the theater is probably kind of expected something 381 00:20:11,520 --> 00:20:14,760 Speaker 1: like this, but it's still it's still painful, and there's 382 00:20:14,800 --> 00:20:17,640 Speaker 1: not really much they can do right now. Yeah, it's 383 00:20:17,640 --> 00:20:20,639 Speaker 1: just you know, is pointing out these theater stocks have 384 00:20:20,680 --> 00:20:22,920 Speaker 1: really been under pressure for a long time now, particularly 385 00:20:22,960 --> 00:20:25,560 Speaker 1: with some of this most recent news. Is there any 386 00:20:25,640 --> 00:20:27,920 Speaker 1: scenario I just kind of wonder what the future is 387 00:20:28,440 --> 00:20:33,560 Speaker 1: for theaters. Does every town need multiplexes throughout town? I mean, 388 00:20:33,600 --> 00:20:36,760 Speaker 1: what's the expectation. Is this kind of the the death knell, 389 00:20:36,840 --> 00:20:40,399 Speaker 1: if you will, for I guess the theater footprint in 390 00:20:40,400 --> 00:20:43,160 Speaker 1: this country as we know it now. Yeah, I think 391 00:20:43,200 --> 00:20:46,520 Speaker 1: everyone kind of wants some sort of decision made on that, 392 00:20:46,600 --> 00:20:48,920 Speaker 1: like is this the end of theaters or or are 393 00:20:48,920 --> 00:20:50,399 Speaker 1: they going to be sign And I think it's somewhere 394 00:20:50,400 --> 00:20:52,320 Speaker 1: in the middle, Like it's not so black and white. 395 00:20:52,320 --> 00:20:56,960 Speaker 1: It's that theaters. Probably we don't need forty thousand screens 396 00:20:57,000 --> 00:20:59,760 Speaker 1: around the country, you know, six thousand theaters. We don't 397 00:20:59,800 --> 00:21:02,159 Speaker 1: need all of that, But a lot of people do 398 00:21:02,240 --> 00:21:04,400 Speaker 1: like going to the movies. They probably don't go frequently 399 00:21:04,520 --> 00:21:06,800 Speaker 1: enough to support the industry at the size of that 400 00:21:07,000 --> 00:21:09,520 Speaker 1: and the amount of investment that these theater companies have 401 00:21:09,600 --> 00:21:12,080 Speaker 1: put into their cinemas to upgrade them. So it was 402 00:21:12,160 --> 00:21:14,480 Speaker 1: kind of a mistake over the years that theaters expanded 403 00:21:14,520 --> 00:21:17,399 Speaker 1: as rapidly as they did. But I imagine there's always 404 00:21:17,400 --> 00:21:19,440 Speaker 1: going to be theaters of some kind. They're probably just 405 00:21:19,480 --> 00:21:21,560 Speaker 1: won't be one in every city and they'll just be 406 00:21:21,640 --> 00:21:24,919 Speaker 1: fewer and far between. But I think that maybe the 407 00:21:24,960 --> 00:21:27,119 Speaker 1: way that they survived. Next year is probably going to 408 00:21:27,160 --> 00:21:29,720 Speaker 1: be a big downsizing for the industry, where a lot 409 00:21:29,760 --> 00:21:32,000 Speaker 1: of theaters that were closed because of the pandemic will 410 00:21:32,000 --> 00:21:36,200 Speaker 1: probably be permanently closed because it's because of streaming. I 411 00:21:36,280 --> 00:21:38,200 Speaker 1: also want to be to ask you about another column 412 00:21:38,240 --> 00:21:42,160 Speaker 1: that you wrote this week about President Trump's potential future. 413 00:21:42,800 --> 00:21:44,639 Speaker 1: Where do you see it? There's a lot of speculation 414 00:21:44,720 --> 00:21:48,480 Speaker 1: that there might be some TV in the works. Oh gosh, 415 00:21:48,560 --> 00:21:51,679 Speaker 1: it's so fascinating, isn't it. You know, they're saying Trump 416 00:21:51,800 --> 00:21:54,639 Speaker 1: is looking at doing some sort of streaming service, you know, 417 00:21:54,640 --> 00:21:57,879 Speaker 1: a monthly subscription, a lot like Fox Nation kind of 418 00:21:57,920 --> 00:22:01,680 Speaker 1: sticking at the Fox as new enemy, and it's hard 419 00:22:01,720 --> 00:22:03,200 Speaker 1: to know what's going to happen with that. But I 420 00:22:03,280 --> 00:22:05,840 Speaker 1: think what we're definitely seeing is some pressure on Fox 421 00:22:05,880 --> 00:22:09,040 Speaker 1: News because you know, they were so aligned with Trump 422 00:22:09,200 --> 00:22:12,720 Speaker 1: that with him telling his supporters now to ditch Fox 423 00:22:12,760 --> 00:22:15,520 Speaker 1: and watch News Max or O A N or potentially 424 00:22:15,640 --> 00:22:18,439 Speaker 1: some Trump TV service, that they need to kind of 425 00:22:18,520 --> 00:22:21,080 Speaker 1: shift gears and figure out what they're talking points are 426 00:22:21,080 --> 00:22:23,560 Speaker 1: going to be. Um. But as I noted this week, 427 00:22:23,640 --> 00:22:26,359 Speaker 1: Fox is kind of protected because of their affiliate deals 428 00:22:26,400 --> 00:22:28,720 Speaker 1: that they have with companies like Comcast and Charter that 429 00:22:28,760 --> 00:22:31,760 Speaker 1: were only recently renewed in those last multiple years, so 430 00:22:31,800 --> 00:22:34,080 Speaker 1: they've kind of lost in their profits for now. But 431 00:22:34,119 --> 00:22:36,960 Speaker 1: there's definitely this big, like headline risk that people are 432 00:22:36,960 --> 00:22:39,439 Speaker 1: looking and saying, wow, Fox has competition for kind of 433 00:22:39,480 --> 00:22:42,240 Speaker 1: the first time and it's in. It's for real. Is 434 00:22:42,240 --> 00:22:45,520 Speaker 1: there any sense about thirty seconds left that Fox is 435 00:22:45,640 --> 00:22:47,920 Speaker 1: concerned about this? Are they seeing erosion in the ratings? 436 00:22:49,000 --> 00:22:51,040 Speaker 1: They're saying a little bit. I mean it's it's small 437 00:22:51,080 --> 00:22:52,640 Speaker 1: in the grand scheme of things, but I think they've 438 00:22:52,640 --> 00:22:54,840 Speaker 1: got to be concerned. You know, you can't ignore that, 439 00:22:54,920 --> 00:22:57,480 Speaker 1: and they definitely have to think about, you know, what's 440 00:22:57,520 --> 00:23:00,760 Speaker 1: their narrative now we have a different president office, different party. 441 00:23:00,960 --> 00:23:03,680 Speaker 1: What are they talk about now? If they can't talk 442 00:23:03,720 --> 00:23:06,440 Speaker 1: about Trump? Well, if you think about half the voters 443 00:23:06,520 --> 00:23:09,000 Speaker 1: paying you know, somebody maybe five dollars a month, that's 444 00:23:09,040 --> 00:23:11,399 Speaker 1: a nice little monthly salary for anybody who who does that. 445 00:23:11,480 --> 00:23:13,960 Speaker 1: So you have to, you know, you have to consider 446 00:23:14,000 --> 00:23:16,960 Speaker 1: that to Tara's thank you so much. Tara's columns are 447 00:23:17,000 --> 00:23:20,840 Speaker 1: so well worth reading, so satisfying and thought provoking. Tara 448 00:23:20,880 --> 00:23:23,520 Speaker 1: Lasha Palaces, Bloomberg Opinion Hollum is covering the business of 449 00:23:23,640 --> 00:23:27,120 Speaker 1: entertainment and communications as well as broader deals. Of course, 450 00:23:27,240 --> 00:23:29,840 Speaker 1: used to write an m Day column for Bloomberg News. 451 00:23:32,720 --> 00:23:36,000 Speaker 1: All right, where are we at with the election lawsuits? 452 00:23:36,080 --> 00:23:38,840 Speaker 1: Let's ask somebody who follows them really to a t. 453 00:23:39,320 --> 00:23:43,680 Speaker 1: Justin levet is, professor of law, Loyola Law School, and Justin, 454 00:23:43,760 --> 00:23:45,480 Speaker 1: I hope that's correct. I hope you're as glued to 455 00:23:45,520 --> 00:23:47,120 Speaker 1: all of this as the rest of us. I'm sure 456 00:23:47,200 --> 00:23:49,919 Speaker 1: you are, because it only happens every four years. Right, 457 00:23:50,280 --> 00:23:54,040 Speaker 1: what is the current status of all of the lawsuits? Well, 458 00:23:54,080 --> 00:23:56,440 Speaker 1: there are some that are still lingering, but they're not 459 00:23:56,520 --> 00:23:59,520 Speaker 1: going much of anywhere. Fact Um, the courts have been 460 00:24:00,000 --> 00:24:04,080 Speaker 1: at a uniform across the board. They've granted some extremely 461 00:24:04,200 --> 00:24:07,600 Speaker 1: minor procedural relief in the early going, but since then 462 00:24:08,320 --> 00:24:11,240 Speaker 1: has pretty much rejected all of the claims that have 463 00:24:11,280 --> 00:24:15,600 Speaker 1: been made uniformly and in multiple states. There are a 464 00:24:15,600 --> 00:24:19,159 Speaker 1: few cases that are still less to sort of wease 465 00:24:19,240 --> 00:24:21,600 Speaker 1: their way out, but that's the way most of them 466 00:24:21,600 --> 00:24:26,120 Speaker 1: are going is slowly in with a whimper, So Professor. 467 00:24:26,200 --> 00:24:30,639 Speaker 1: President Trump is also reportedly considering pardons for himself maybe 468 00:24:30,640 --> 00:24:34,639 Speaker 1: his children. Um. What kind of legal jeopardy could he 469 00:24:34,720 --> 00:24:40,680 Speaker 1: face from these actions? Well, from the pardons themselves, there's 470 00:24:40,720 --> 00:24:45,520 Speaker 1: not much unless he dangled the bribe in order to 471 00:24:45,680 --> 00:24:49,040 Speaker 1: produce these parts. That's something that we received word that 472 00:24:49,040 --> 00:24:53,080 Speaker 1: the Justice Department had actually been investigating a few weeks ago. 473 00:24:53,840 --> 00:24:57,600 Speaker 1: And UM, that is not okay. So holding out the 474 00:24:57,680 --> 00:25:00,520 Speaker 1: prospect of the pardon in exchange for something value is 475 00:25:00,520 --> 00:25:04,960 Speaker 1: not okay. But beyond that, UM, the president has extremely 476 00:25:05,040 --> 00:25:10,160 Speaker 1: broad power to pardon for any federal criminal activity. UM. 477 00:25:10,240 --> 00:25:13,440 Speaker 1: That runs up against two limits. One, it's generally acknowledged 478 00:25:13,440 --> 00:25:16,119 Speaker 1: that the president can't pardon himself, that you need to 479 00:25:16,160 --> 00:25:19,080 Speaker 1: be partnering somebody else and not yourself in order referred 480 00:25:19,080 --> 00:25:23,919 Speaker 1: to be effective. And to the president can't pardon individuals 481 00:25:23,960 --> 00:25:27,399 Speaker 1: of state criminal activity. UM. There are a number of 482 00:25:27,400 --> 00:25:30,880 Speaker 1: state investigations that we know of, including a tax frawd 483 00:25:30,880 --> 00:25:34,800 Speaker 1: another business liability from before the president's time as president. UM. 484 00:25:34,840 --> 00:25:38,280 Speaker 1: And he can't as president get himself or others out 485 00:25:38,280 --> 00:25:40,280 Speaker 1: of any trouble they may have run into with the states. 486 00:25:42,440 --> 00:25:46,520 Speaker 1: What is your prediction for how it goes once you 487 00:25:46,560 --> 00:25:49,879 Speaker 1: know the president elect is in office and the current 488 00:25:49,880 --> 00:25:54,080 Speaker 1: president is not. Even though Kenny mcnetnie has just said 489 00:25:54,080 --> 00:25:56,200 Speaker 1: that he's going to remain leader of the Republican Party. 490 00:25:56,600 --> 00:26:00,560 Speaker 1: Is it possible that, after investigations and you know, presumably 491 00:26:00,600 --> 00:26:03,960 Speaker 1: criminal overseedings, that a former president could actually go to prison. 492 00:26:05,440 --> 00:26:09,919 Speaker 1: It's possible, it's exceedingly unlikely. There are reasons that it 493 00:26:10,000 --> 00:26:15,080 Speaker 1: hasn't happened before. UM. Of course, this president has found 494 00:26:15,119 --> 00:26:17,800 Speaker 1: pleasure in breaking a lot of norms, and it would 495 00:26:17,840 --> 00:26:20,800 Speaker 1: be ironic if that were among the norms that he 496 00:26:20,840 --> 00:26:25,080 Speaker 1: would have broken. UM. Look, in terms of federal liability, 497 00:26:25,160 --> 00:26:27,800 Speaker 1: even if the president doesn't affectuate all of the pardoners 498 00:26:27,840 --> 00:26:30,080 Speaker 1: that he's claimed to UM, there's going to have to 499 00:26:30,080 --> 00:26:33,800 Speaker 1: be a really hard call on the part of the 500 00:26:33,840 --> 00:26:38,400 Speaker 1: new administration about what sort of accountability to seek. UM. 501 00:26:38,480 --> 00:26:42,119 Speaker 1: And we obviously have accountability through the criminal justice system, 502 00:26:42,119 --> 00:26:45,440 Speaker 1: but that's not the only form of accountability we have UM. 503 00:26:45,480 --> 00:26:48,639 Speaker 1: And there are lots of reasons why, even if the 504 00:26:48,680 --> 00:26:52,320 Speaker 1: facts justified it, a new administration might choose to pursue 505 00:26:52,320 --> 00:26:56,680 Speaker 1: accountability in some other realm outside of criminal justice. So, Professor, 506 00:26:56,680 --> 00:27:00,560 Speaker 1: it's been I think speculated that the President Trump perhaps 507 00:27:00,760 --> 00:27:03,800 Speaker 1: the biggest legal liability after he leaves office is from 508 00:27:03,840 --> 00:27:06,399 Speaker 1: the Southern District of New York. There's a number of 509 00:27:06,440 --> 00:27:10,760 Speaker 1: investigations on going. Is that you're reading as well. I 510 00:27:10,800 --> 00:27:13,280 Speaker 1: think it's a combination of the Southern District and the 511 00:27:13,280 --> 00:27:17,280 Speaker 1: New York Attorney General's Office. So as mentioned, there are 512 00:27:17,480 --> 00:27:21,080 Speaker 1: different political considerations and their different legal considerations when it 513 00:27:21,119 --> 00:27:24,600 Speaker 1: comes to the federal government holding somebody to account versus 514 00:27:24,640 --> 00:27:28,040 Speaker 1: the state government. UM. I'll note that the New York 515 00:27:28,080 --> 00:27:31,919 Speaker 1: Attorney General's Office has already very publicly come down on 516 00:27:32,119 --> 00:27:36,080 Speaker 1: the Trump organization charity, the Trump Foundation, UM, and they 517 00:27:36,080 --> 00:27:38,879 Speaker 1: have been looking into business dealings with the Trump organization 518 00:27:39,000 --> 00:27:42,119 Speaker 1: elsewhere as well. UM. So I think it's it is 519 00:27:42,119 --> 00:27:45,000 Speaker 1: certainly true that the activity that might cause him the 520 00:27:45,000 --> 00:27:47,520 Speaker 1: most concern is happening within the jurisdiction of the Southern 521 00:27:47,520 --> 00:27:49,880 Speaker 1: District of New York. But there are state actors there 522 00:27:49,920 --> 00:27:53,960 Speaker 1: as well who also see at least some traces of 523 00:27:54,040 --> 00:27:55,639 Speaker 1: facts they want to follow up to find out if 524 00:27:55,640 --> 00:27:59,640 Speaker 1: there's been criminal wrongdoing. But when this is all over 525 00:27:59,800 --> 00:28:02,560 Speaker 1: an you know, in our memories, I don't just mean 526 00:28:02,680 --> 00:28:04,639 Speaker 1: the last four years, but also maybe the next eight 527 00:28:04,720 --> 00:28:08,480 Speaker 1: or twelve years, will there be legal president that would 528 00:28:08,480 --> 00:28:11,960 Speaker 1: have been created thanks to this period in time, Oh, 529 00:28:12,080 --> 00:28:15,880 Speaker 1: no question, Um. But even more important, I think there 530 00:28:15,920 --> 00:28:20,479 Speaker 1: will have been political or normative president UM. So some 531 00:28:20,560 --> 00:28:23,760 Speaker 1: of the courts have issued opinions on what it is 532 00:28:23,800 --> 00:28:28,280 Speaker 1: the president Kenner cannot do. They include opinions on what 533 00:28:28,320 --> 00:28:30,760 Speaker 1: it is the president must or must not turn over 534 00:28:31,200 --> 00:28:34,440 Speaker 1: when investigative agencies asking. All of that will be precedent 535 00:28:34,480 --> 00:28:38,080 Speaker 1: for the future. But I think even as important as 536 00:28:38,120 --> 00:28:44,480 Speaker 1: that are informal rules about how we treat the office 537 00:28:44,600 --> 00:28:49,600 Speaker 1: of the presidency and what requires or demands a response 538 00:28:49,680 --> 00:28:53,400 Speaker 1: from other elected officials, um, And those I can see 539 00:28:53,440 --> 00:28:55,320 Speaker 1: running one of two ways, either learning the lessons in 540 00:28:55,360 --> 00:28:57,360 Speaker 1: the last four years that we like how we treated 541 00:28:57,360 --> 00:29:00,160 Speaker 1: this and so should continue to treat further president who 542 00:29:00,240 --> 00:29:03,960 Speaker 1: might break norms in a similar fashion, or something I 543 00:29:04,000 --> 00:29:07,640 Speaker 1: actually suspect more likely, UM, that we'll see a backlash 544 00:29:07,840 --> 00:29:10,800 Speaker 1: that will realize that some of the ways in which 545 00:29:10,920 --> 00:29:14,000 Speaker 1: norm breaking has been not only tolerated but encouraged in 546 00:29:14,040 --> 00:29:17,640 Speaker 1: this presidency are more destructive long term to the health 547 00:29:17,640 --> 00:29:20,640 Speaker 1: of the country, and that will turn a page on 548 00:29:20,720 --> 00:29:23,920 Speaker 1: this and and sort of suggest I would hope never again. 549 00:29:24,960 --> 00:29:30,160 Speaker 1: So Professor President Trump, I guess has not conceded. Yet, 550 00:29:30,160 --> 00:29:34,480 Speaker 1: what are the constitutional laws surrounding this transfer of power? 551 00:29:34,560 --> 00:29:39,200 Speaker 1: Do we need him to technically concede. No, it's just 552 00:29:39,320 --> 00:29:43,320 Speaker 1: that every president since the mid nineteenth century has um, 553 00:29:43,600 --> 00:29:46,520 Speaker 1: so we're not used to a president who doesn't concede. 554 00:29:46,600 --> 00:29:49,680 Speaker 1: But in short, the president is not in control of 555 00:29:49,680 --> 00:29:55,200 Speaker 1: whether he acknowledges a loss at all. UM. The state 556 00:29:55,280 --> 00:29:58,560 Speaker 1: and local governments count up the ballots. That's something that 557 00:29:58,600 --> 00:30:00,320 Speaker 1: we've seen over the last couple of weeks. A lot 558 00:30:00,320 --> 00:30:03,160 Speaker 1: of Americans are now more attuned to than ever. UM 559 00:30:03,240 --> 00:30:07,120 Speaker 1: they announced final results, governors or other executives of the 560 00:30:07,160 --> 00:30:11,360 Speaker 1: state certify those results. The electors vote on December fourteenth 561 00:30:11,400 --> 00:30:14,720 Speaker 1: in the electoral college, Congress counts the ballots. Butecial notice, 562 00:30:14,760 --> 00:30:17,200 Speaker 1: I haven't mentioned the president once in all of that, 563 00:30:17,680 --> 00:30:20,400 Speaker 1: and that's because he's not in control of whether he 564 00:30:20,440 --> 00:30:23,640 Speaker 1: remains as president or not, if he chooses to concede, 565 00:30:23,640 --> 00:30:26,480 Speaker 1: if he chooses not to concede either way around. The 566 00:30:26,640 --> 00:30:29,320 Speaker 1: other actors in the system who count the ballots that 567 00:30:29,400 --> 00:30:34,120 Speaker 1: have been cast decide whether on January at twelve oh one, 568 00:30:34,880 --> 00:30:38,200 Speaker 1: President elect Joe Biden will be sworn in. He will 569 00:30:38,240 --> 00:30:42,880 Speaker 1: be and if the president hasn't conceded by twelve oh one, Um, 570 00:30:43,400 --> 00:30:45,560 Speaker 1: then he'd better find a new address, because at twelve 571 00:30:45,560 --> 00:30:49,400 Speaker 1: o one, the Secret Service will establish the rule of 572 00:30:49,440 --> 00:30:52,240 Speaker 1: the President elect, and anybody who's not that person will 573 00:30:52,280 --> 00:30:55,040 Speaker 1: be kindly after the boy house. Very easy. We will 574 00:30:55,040 --> 00:30:58,440 Speaker 1: follow that clearly, of course. Justin Leavitt, Professor of Law 575 00:30:58,560 --> 00:31:00,520 Speaker 1: at the Loyal Law School, thank you so much for 576 00:31:00,640 --> 00:31:03,600 Speaker 1: joining us based in Los Angeles. So again, Vonnie, the 577 00:31:03,640 --> 00:31:06,680 Speaker 1: next six weeks here I'll be interesting to see, you know. 578 00:31:06,720 --> 00:31:10,120 Speaker 1: President Biden continues to build out his cabinet and prepare 579 00:31:10,160 --> 00:31:12,920 Speaker 1: for the transfer of power, so we will obviously watch that. 580 00:31:14,160 --> 00:31:17,600 Speaker 1: Thanks for listening to Bloomberg Markets podcast. You can subscribe 581 00:31:17,640 --> 00:31:21,120 Speaker 1: and listen to interviews at Apple Podcasts or whatever podcast 582 00:31:21,200 --> 00:31:24,440 Speaker 1: platform you prefer. I'm Bonnie Quinn. I'm on Twitter at 583 00:31:24,440 --> 00:31:26,800 Speaker 1: Bonnie Quinn, and I'm Paul Sweeney. I'm on Twitter at 584 00:31:26,800 --> 00:31:29,680 Speaker 1: pt Sweeney. Before the podcast, you can always catch us 585 00:31:29,720 --> 00:31:31,160 Speaker 1: worldwide at Bloomberg Radio.