Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along
Speaker 1: with my co host of Bonnie Quinn. Every business day
Speaker 1: we bring you interviews from CEO, market pros, and Bloomberg experts,
Speaker 1: along with essential market moving news. Find the Bloomberg Markets
Speaker 1: Podcast on Apple Podcasts or wherever you listen to podcasts,
Speaker 1: and on Bloomberg dot Com. Jonathan Farrow. They're speaking with
Speaker 1: Larry Cudlow, Director of the National Economic Council, ending it
Speaker 1: with a nice little good luck, I suppose to the
Speaker 1: incoming administration and people who will be in similar posts,
Speaker 1: and pole really obviously what we might have expected, Larry
Speaker 1: downplaying the weak parts of this reward and playing of
Speaker 1: the stronger parts of this reward. And no one is
Speaker 1: doubting that there are some you know strength, yes to
Speaker 1: look at here, Yeah, exactly right. And I think the
Speaker 1: you know we heard from from Larry Cudlow there, you know,
Speaker 1: acknowledging that the you know this, this way of coronavirus
Speaker 1: is impacting the economy, but trying to find, uh, you know,
Speaker 1: some areas of strengthen economy, whether it's housing, whether it's
Speaker 1: consumer spending. Looks like the consumer is going to be
Speaker 1: spending here this holiday season here, But you know, when
Speaker 1: you take a look at the labor market here, it
Speaker 1: remains very, very challenging. And I think a lot of
Speaker 1: the concerns from economists, you know, how much of this is,
Speaker 1: you know a little bit more on the permanent side
Speaker 1: versus temporary in terms of the joblessness. Well, let's ask
Speaker 1: somebody else who we haven't spoken to in Ohile and
Speaker 1: who were excited to have back. Carl Rickadonna joined us.
Speaker 1: What a little present for the end of the year.
Speaker 1: Carl is a chief US economist of course for Bloomberg Economics,
Speaker 1: and Carl, it is fantastic to have you back. Also,
Speaker 1: I have to wonder what you're thinking coming back in
Speaker 1: this kind of environment, with the job market that is very,
Speaker 1: very different from just a few months ago. Absolutely good
Speaker 1: morning at you both, and thanks for having me back
Speaker 1: on You know, I have to draw some real distinctions
Speaker 1: with what Larry cut Low was suggesting, saying that in
Speaker 1: the interview he said that the job number was a
Speaker 1: wee bit below what was expected. That two thousand a
Speaker 1: pretty big number. So the old expression close enough for
Speaker 1: government work, I guess applied to something and you thinks there. Uh,
Speaker 1: and also he said, you know, this is a good
Speaker 1: report for the holiday season, and whatnot. The only the
Speaker 1: only person who liked this for the holiday season is
Speaker 1: the grinch. I mean, we saw a very sharp decline
Speaker 1: in retail hiring. That's such an important job engine at
Speaker 1: this time of year, and that is just endemic of
Speaker 1: or emblematic of, you know, the type of heartbreaking we're
Speaker 1: seeing in the economy right now. The service sector absolutely
Speaker 1: clobbered UH in that today's report, a big down shift.
Speaker 1: We had this reopening boom over the last several months,
Speaker 1: and as we look at the details of this report,
Speaker 1: we can see that basically came to an end in
Speaker 1: today's data. And unfortunately, UH, the November jobs report was
Speaker 1: talied much the recent surge and case counts and UH
Speaker 1: lockdown measures. So whatever November looked like, know already that
Speaker 1: December is going to be far, far weaker. So this
Speaker 1: is the start of a very chilly winter season four
Speaker 1: the labor market in general and also for the economy.
Speaker 1: I don't see holiday cheer in this report, that's to
Speaker 1: be sure. Yeah. One of the really disconcerting aspects of
Speaker 1: it is, you know, the really bad news in the
Speaker 1: unemployment is for those twenty seven weeks or longer. That
Speaker 1: rose to three point nine four million people, and the
Speaker 1: average duration in weeks is now at twenty three point
Speaker 1: two So it really goes to the issue Carl. A
Speaker 1: lot of this unemployment, which maybe we initially thought might
Speaker 1: be temporary at the beginning of the pandemic, is looking
Speaker 1: more and more permanent, and that raises some big issues. Well,
Speaker 1: I do think that that much of that unemployment is
Speaker 1: going to be temporary, but the temporary spell is going
Speaker 1: to last a lot longer. It's going to last until
Speaker 1: basically the spring saw, until we've had a reopening of
Speaker 1: the economy and broad distribution of the vaccine. The alarming
Speaker 1: number there is that twenty six week threshold because as
Speaker 1: unemployed individuals start to approach the twenty six week mark,
Speaker 1: then they start to drop out of state unemployment benefits.
Speaker 1: So there have been some extensions and some special programs,
Speaker 1: although those are due to expire for the most part
Speaker 1: at the end of this year unless they get additional
Speaker 1: fiscal support from Congress and the White House. So there
Speaker 1: is a very real problem here that we're approaching an
Speaker 1: income cliff as those who are out of work are
Speaker 1: facing the expiration of benefits and that will be a
Speaker 1: real drag on the economy at a time when really,
Speaker 1: as we look at our models, it's consumer spending that
Speaker 1: is doing all of the heavy lifting for the economy. So, Carl,
Speaker 1: you know, we constantly have people on that are actually
Speaker 1: you know, talking up the economy and and and respected economists.
Speaker 1: I'm not just talking you know, money managers or what
Speaker 1: have you, who are looking at the market itself continuing
Speaker 1: to go up. But very few people are actually sounding
Speaker 1: the alarm on an economic cliff. They're saying that the
Speaker 1: economy is bound see back faster than we thought that. Yeah,
Speaker 1: there may be another short dip into recessionary territory, but
Speaker 1: really it's a K shaped economy and it's only one
Speaker 1: part of the labor force or the economy that will
Speaker 1: feel the worst of this. Do you agree with those sentiments.
Speaker 1: I think the the the incessant rally in the equity
Speaker 1: market has created an inpriating haze over the economic outlaw.
Speaker 1: So the reality is here that we are heading towards
Speaker 1: a second contraction in the economy. It could be starting
Speaker 1: in December. It most likely will be concentrated in the
Speaker 1: first quarter of the year, we are looking for a contraction.
Speaker 1: I know some other big shops are looking for economic
Speaker 1: contractions in the first quarter. So there's this optimism that yes,
Speaker 1: a vaccine is coming, so eventually we'll be out of
Speaker 1: this uh, this muck, this swoon. But the real question,
Speaker 1: for the more pressent question, is how deep of a
Speaker 1: downturn we're going to have in the meantime while we
Speaker 1: wait for the vaccines to be broadly distributed, while we
Speaker 1: wait for economic stimulus to help the economy, and also
Speaker 1: for just the general reopening to happen in the spring.
Speaker 1: If we're talking about a half a percentage point contraction
Speaker 1: in the first quarter, which is our current estimate, that's manageable.
Speaker 1: We can muddle through. But if things go poorly and
Speaker 1: there's no guarantee that will have a perfect execution here,
Speaker 1: you can have a much deeper contraction, and that creates
Speaker 1: a whole additional slew of folks who can't pay rent
Speaker 1: and mortgages. Of it are missed in the financial contraction
Speaker 1: and corporate bankruptcies. So Carl, we saw Jonathan Paraoll just
Speaker 1: minutes ago with UH Larry Cudlow trying to press Mr.
Speaker 1: Cudlow on um stimulus and kind of where are we
Speaker 1: in stimulus and what's the White House perspective. Just from
Speaker 1: my listen, I didn't really get any sense that anything
Speaker 1: is imminent. What do you guys kind of discounting in
Speaker 1: your models as to the stimulus size scope and maybe timing, well,
Speaker 1: the stimulus has to be put in play before the
Speaker 1: end of the year or there's going to be a
Speaker 1: real problem with that household finances, especially those of the unemployed.
Speaker 1: Uh that that's a big issue, but there's also additional
Speaker 1: problems for small businesses, which are the dominant engine of
Speaker 1: job growth. Uh. And also the issue that Larry Cutlo
Speaker 1: really didn't want to address was aid for states and municipalities.
Speaker 1: And it's easy to say, well, we should punish the
Speaker 1: Blue states because they have under funded pension plans and whatnot. Nonetheless,
Speaker 1: the fact of the matter is economic growth over the
Speaker 1: last several decades is driven by urban centers, by cities
Speaker 1: the New York's, the Boston's, and Los Angeles. Uh, those
Speaker 1: cities are are you know, we're moving towards a service sector,
Speaker 1: service dominated economy, and it's all happening in the cities
Speaker 1: in the Tech Center San Francisco, for example. If we
Speaker 1: leave those cities out to drive and their transit systems
Speaker 1: are are impaired and other infrastruct your issues are unresolved
Speaker 1: and they can't fully reopen, that is absolutely going to
Speaker 1: impair the recovery as well. So we have to be
Speaker 1: very careful that we're not too stingy with stimulus, and
Speaker 1: we pay the cost as we did back in two
Speaker 1: thousand in the next couple of years by being too
Speaker 1: stingy and therefore cramping the extent that the pace of
Speaker 1: the economic recuple very briefly, Carl, were out of time.
Speaker 1: But if the incoming administration is much more inclined to
Speaker 1: do something like this, will they be able to get
Speaker 1: it through and quickly? Well, I'll answer that question on
Speaker 1: January Stiff, when we know the results of the Georgia
Speaker 1: runoff collection we're looking at split Congress. Then it's going
Speaker 1: to be a very stingy stimulus site here. Isn't that
Speaker 1: really something else? Carl? Thank you those of reality there
Speaker 1: from Carl RICKA Donna telling us that we're heading towards
Speaker 1: a second contraction. We just we just are, and that
Speaker 1: this inebriating haze is the market which keeps going higher,
Speaker 1: and we cannot let that impact what we think of
Speaker 1: the economic fundamentals, which are obvious ball Yeah, they really are.
Speaker 1: And in the job Stata today kind of just put
Speaker 1: an underline to that issue, and you know Carl's analysis,
Speaker 1: you know, suggesting that we really the economy really needs
Speaker 1: fiscal stumius before the end of this calendar year when
Speaker 1: some of these programs do are set to expire. It
Speaker 1: really goes to uh kind of the timing challenge for
Speaker 1: Congress in the White House, and the fact that economic
Speaker 1: growth is driven by urban centers really struck with me too.
Speaker 1: That's what Carl said there, and it's just so true.
Speaker 1: It's a geographic imperative as much as anything else. Well,
Speaker 1: now it is time to have a look at e
Speaker 1: s G Environmental, social and governance investing, and there's so
Speaker 1: much chatter about e s G going on that we
Speaker 1: need to sort of orient ourselves within what part of
Speaker 1: this investment management area we're looking at. Let's bring in
Speaker 1: Christie Hill, who's head of America's Asset Management and global
Speaker 1: head of e s G for PGM real Estate one
Speaker 1: hundred two billion dollars in assets under management. So, Christie,
Speaker 1: help us here, it's great to speak with you. Help
Speaker 1: us understand how you can be a real estate investor
Speaker 1: in the E s G space. What does that mean
Speaker 1: you for? For us in real estate and E SG,
Speaker 1: it really is about, I would say, assessing the risks
Speaker 1: um that we viewed through the through the s G lens.
Speaker 1: So it's about thinking about climate change and understanding not
Speaker 1: just your you know, your impacts or the impacts of
Speaker 1: sea level rise, but really thinking thoughtfully about all of
Speaker 1: the impacts of climate change, your physical, social transitional and
Speaker 1: understanding not only you know how they're going to impact
Speaker 1: you insurance markets and how mass migration is going to
Speaker 1: be impacting our markets, or how evolving regulatory involving environments
Speaker 1: are going to change our environment. It's about understanding the
Speaker 1: impact on the real estate, but also understanding the financial
Speaker 1: impact on the real estate UM. So I think for
Speaker 1: us it's about trying to really intensely do due diligence
Speaker 1: to assess our risk and make sure that we're being
Speaker 1: thoughtful in our approach so that we can devise strategies
Speaker 1: to mitigate it. So, Christie, how have you change your
Speaker 1: investment process as you factor in E s G elements
Speaker 1: into your analysis. You know, it's it's constantly evolving, and
Speaker 1: the more we learn UM, the more that investment process
Speaker 1: evolved with it. So it's about making sure we're you know,
Speaker 1: kind of a little bit too to my comment before
Speaker 1: making sure we're considering all of the proper factors and
Speaker 1: all of the appropriate risks up front UM, so that
Speaker 1: we can not just quantify them prior to prior to
Speaker 1: making that investment, but so that we can allow that
Speaker 1: diligence to inform our strategy operationally moving forward. How has
Speaker 1: the pandemic changed how you look at investments and what
Speaker 1: you do? You know, I think the pandemic has impacted
Speaker 1: the one thing we've been able to see is that
Speaker 1: this pandemic has impacted different sector is very differently UM,
Speaker 1: and we can see that there have been clear winners
Speaker 1: and losers. So I think for us UM, it's it's
Speaker 1: forced us to take a step back and be thoughtful.
Speaker 1: The last thing that we want to do from an
Speaker 1: investment perspective is the reactionary UM. So I think it's
Speaker 1: caused us to pause UM with the asset classes that
Speaker 1: we think are going to be more affected by this
Speaker 1: in the near term, UM. But it's also hasn't It
Speaker 1: hasn't stopped us from pursuing investments UM where we think
Speaker 1: there's clarity and opportunity. So Christie, you know, one of
Speaker 1: the issues that people are thinking about as it relates
Speaker 1: to real estate resulting from this pandemic is the change
Speaker 1: in the work home a dynamic more people working from home, uh,
Speaker 1: suggesting that maybe the need for office space and the
Speaker 1: big towers and the urban centers is not what it
Speaker 1: was pre pandemic. How are you guys thinking about that? Well,
Speaker 1: certainly the office of the future is topic du jur
Speaker 1: during COVID, and I think it's very much an example
Speaker 1: of UM as cliche as this may sound, example of
Speaker 1: COVID accelerating and already existing trend. We've been talking about
Speaker 1: real remote work dynamics UM for a long time. This
Speaker 1: technology has enabled that, and certainly, you know COVID now
Speaker 1: forcing everybody to be remote is really shining a bright
Speaker 1: light on it. UM. I think it's a little too
Speaker 1: soon to say what that impact is going to be.
Speaker 1: I mean, you hear a lot of alternate, alternate scenarios,
Speaker 1: more more, more square footage with fewer people less square
Speaker 1: footage altogether. UM. We certainly believe there is going to
Speaker 1: be demand for office UM long into the future. This
Speaker 1: is something we're looking into as a tenant as well
Speaker 1: as an owner. UM. But I think we're trying to
Speaker 1: be pragmatic in our approach. We know that there's going
Speaker 1: to be greater flexibility needed in the future. UM, but
Speaker 1: certainly believe that that demand for for office real estate
Speaker 1: is not going away. So I presume you're everywhere, right, Christie.
Speaker 1: You're involved probably all over the world and in most
Speaker 1: United States. But are there geographies that you're considering being
Speaker 1: less bullish on now and others that you're considering, you know,
Speaker 1: moving into UM. You know, for from an E s
Speaker 1: G perspective, certainly my purview is global. From the asset
Speaker 1: management perspective, I'm very much focused in the US. But
Speaker 1: I don't think that, you know, when we think about
Speaker 1: E s G. The concept, you know, when we think
Speaker 1: about E s G resiliency isn't necessarily about saying, because
Speaker 1: there is a challenged area, we're not going to go there.
Speaker 1: It really is about making sure that if we're identifying
Speaker 1: that challenge up front, so that we can identify a
Speaker 1: strategy to mitigate that challenge, and there may be places
Speaker 1: where that presents opportunity. So Christie has as E s G. Uh,
Speaker 1: you know the growth of s G in your analysis
Speaker 1: that caused you to either, uh maybe overweights a sector
Speaker 1: or underweight a sector. Has it really changed how you've
Speaker 1: actually put money to work? You know. E s G
Speaker 1: is something that we think is applicable across all sectors,
Speaker 1: and we want to look at E s Q factors,
Speaker 1: factors and risks across each sector. So I don't think
Speaker 1: it's it's at this point, it's nothing that or nothing
Speaker 1: has come out of it that said we're going to
Speaker 1: do this or we're not going to do this. It's
Speaker 1: about making sure we're applying um kind of that that
Speaker 1: E s G filter equally across all of our asset
Speaker 1: classes to make sure that we have a strong s
Speaker 1: G strategy, despite sector, despite region. Christie Hill, thank you
Speaker 1: so much for joining us. We appreciate it. Christy Hill
Speaker 1: is the head of America's asset management and global head
Speaker 1: of E s G for p JIM Real Estate. They
Speaker 1: have about one two billion dollars and assets under management,
Speaker 1: so they certainly have a good feel for the real
Speaker 1: estate market. And of course as you think about some
Speaker 1: of this commercial real estate, one of the big issues
Speaker 1: is what will be retail footprints um for certain retailers.
Speaker 1: Number one, Number two, what is the work dynamic going
Speaker 1: to be? What is the office dynamic going to look
Speaker 1: like going forward? Is as much real square footage really needed? Well,
Speaker 1: it was a big, big week in the media world.
Speaker 1: Warner Brothers, one of the biggest media companies, one of
Speaker 1: the biggest film and television studios, and announced this week
Speaker 1: that is going to release all of its films on
Speaker 1: HBO Max streaming service the same day they hit theaters.
Speaker 1: This is a big, big change for the movie business.
Speaker 1: Let's get some details. We can do that with Tara
Speaker 1: La Chapelle, Bloomberg Opinion media columnists. So, Tara, big news
Speaker 1: from Warner What do you think their strategy is here? Well,
Speaker 1: you know, I think right now, with theaters still a
Speaker 1: lot of them being closed because of COVID, they're looking
Speaker 1: at next year and saying, yes, there's vaccines around the corner,
Speaker 1: but it's still too students really have any visibilities. So
Speaker 1: you want people to see these movies that you spend
Speaker 1: a ton of money on. You want people to subscribe
Speaker 1: to HBO Max. So if your a T n T
Speaker 1: and you're looking at that, you're thinking, well, I should
Speaker 1: just put the movies on HBO Max. And I think
Speaker 1: that's a really smart decision. It's it's going to be
Speaker 1: painful for movie theaters because those that are open. I
Speaker 1: think a lot of people are probably just going to
Speaker 1: choose to watch from home if they have that option.
Speaker 1: And HBO Max costs fifteen dollars a month. If you're
Speaker 1: getting a new movie every few weeks, I mean that
Speaker 1: starts to look like a pretty good value, you know,
Speaker 1: from being really expensive to being kind of compelling. So
Speaker 1: I think what they're doing is smart, but it's just
Speaker 1: it is going to be painful for the movie theater
Speaker 1: industry and to be cure of these movies only stay
Speaker 1: on for a month, so you have a limited viewing window,
Speaker 1: let's say, and they're also in theaters at the same time.
Speaker 1: The question I think, Tara is whether this is going
Speaker 1: to be a permanent move on the part of Warner Brothers,
Speaker 1: or whether they will revert to having, you know, a
Speaker 1: theatrical window first once vaccines are available to the whole world.
Speaker 1: Warner Brothers is saying that this is a unique one
Speaker 1: year thing. I I just don't see it being bad.
Speaker 1: I think even if they are planning it that way now,
Speaker 1: by this time next year, it's going to be pretty
Speaker 1: clear that streaming is the most important product. It's something
Speaker 1: they really have to keep pushing with, especially with all
Speaker 1: the competition they have from Disney, Netflix and others. So
Speaker 1: I think by this time next year, we're going to
Speaker 1: be looking at this and saying this is probably going
Speaker 1: to be permanent. Maybe it doesn't look exactly this way,
Speaker 1: and maybe they have to bend sousastrical windows a little
Speaker 1: bit to keep that relationship. But I just I think
Speaker 1: more and more people want to watch movies from home,
Speaker 1: and it would just be silly for these companies to
Speaker 1: ignore that. So Tarrett seems to me. I'm not sure
Speaker 1: if they've released any the economics here, but it seems
Speaker 1: to me they're Warner is going to take a big
Speaker 1: financial hit here, at least in the near term. It
Speaker 1: seems like if they spend a hundred million dollars on
Speaker 1: a movie, Okay, I pay fifteen bucks through HBO Max
Speaker 1: and my family could sit in on the sofa and
Speaker 1: see it. But if I were taking a family of
Speaker 1: four to the theater, they'd be fifty in revenue as
Speaker 1: opposed to fifteen. What are they saying about the profitability
Speaker 1: impact for the strategy for next year. Well, they're avoiding
Speaker 1: saying too much of anything about it, but you're right,
Speaker 1: it's clear that they're going to lose a lot of
Speaker 1: money on this, but I think they see it as
Speaker 1: probably worth it. You know, it's very expensive to even
Speaker 1: just promote these movies, and the box office really helps off.
Speaker 1: That's that and that's how they make a lot of
Speaker 1: their money. But if you're putting it on a streaming service,
Speaker 1: it makes me wonder if you need get to do
Speaker 1: so much promoting. If if people kind of just get
Speaker 1: in the habit of knowing there's always going to be
Speaker 1: a new big movie on HBO Max, maybe you don't
Speaker 1: need to spend as much. Maybe over time this becomes
Speaker 1: a little bit more of a feasible, practical strategy. But
Speaker 1: for next year, certainly this is going to be very
Speaker 1: costly for the company. I just don't think that shareholders
Speaker 1: will be so worried about it because Disney is doing
Speaker 1: similar things. They're really prioritizing streaming, even though it is
Speaker 1: losing money, and I think it's just because people know
Speaker 1: over time the goal is get as many subscribers as
Speaker 1: you can, increase engagement as much as you can, and
Speaker 1: then eventually the profits will follow. So it's kind of
Speaker 1: a long term that. Does it force other studios to
Speaker 1: do the same? MC down twenty now in the last
Speaker 1: two days. Yeah, I think it's a shot across about
Speaker 1: at Disney, especially UM. I think that there's definitely something
Speaker 1: to being first here and first to something inevitable. Uh So,
Speaker 1: I think that other companies will have to do something similar,
Speaker 1: and a lot of them were moving in that direction
Speaker 1: in some ways. You know, Mulan went straight to Disney
Speaker 1: Plus for a thirty dollar fee. Earlier this year, Comcast
Speaker 1: shortened it's um NBC universal window with AMC theaters, So
Speaker 1: I think the theater is probably kind of expected something
Speaker 1: like this, but it's still it's still painful, and there's
Speaker 1: not really much they can do right now. Yeah, it's
Speaker 1: just you know, is pointing out these theater stocks have
Speaker 1: really been under pressure for a long time now, particularly
Speaker 1: with some of this most recent news. Is there any
Speaker 1: scenario I just kind of wonder what the future is
Speaker 1: for theaters. Does every town need multiplexes throughout town? I mean,
Speaker 1: what's the expectation. Is this kind of the the death knell,
Speaker 1: if you will, for I guess the theater footprint in
Speaker 1: this country as we know it now. Yeah, I think
Speaker 1: everyone kind of wants some sort of decision made on that,
Speaker 1: like is this the end of theaters or or are
Speaker 1: they going to be sign And I think it's somewhere
Speaker 1: in the middle, Like it's not so black and white.
Speaker 1: It's that theaters. Probably we don't need forty thousand screens
Speaker 1: around the country, you know, six thousand theaters. We don't
Speaker 1: need all of that, But a lot of people do
Speaker 1: like going to the movies. They probably don't go frequently
Speaker 1: enough to support the industry at the size of that
Speaker 1: and the amount of investment that these theater companies have
Speaker 1: put into their cinemas to upgrade them. So it was
Speaker 1: kind of a mistake over the years that theaters expanded
Speaker 1: as rapidly as they did. But I imagine there's always
Speaker 1: going to be theaters of some kind. They're probably just
Speaker 1: won't be one in every city and they'll just be
Speaker 1: fewer and far between. But I think that maybe the
Speaker 1: way that they survived. Next year is probably going to
Speaker 1: be a big downsizing for the industry, where a lot
Speaker 1: of theaters that were closed because of the pandemic will
Speaker 1: probably be permanently closed because it's because of streaming. I
Speaker 1: also want to be to ask you about another column
Speaker 1: that you wrote this week about President Trump's potential future.
Speaker 1: Where do you see it? There's a lot of speculation
Speaker 1: that there might be some TV in the works. Oh gosh,
Speaker 1: it's so fascinating, isn't it. You know, they're saying Trump
Speaker 1: is looking at doing some sort of streaming service, you know,
Speaker 1: a monthly subscription, a lot like Fox Nation kind of
Speaker 1: sticking at the Fox as new enemy, and it's hard
Speaker 1: to know what's going to happen with that. But I
Speaker 1: think what we're definitely seeing is some pressure on Fox
Speaker 1: News because you know, they were so aligned with Trump
Speaker 1: that with him telling his supporters now to ditch Fox
Speaker 1: and watch News Max or O A N or potentially
Speaker 1: some Trump TV service, that they need to kind of
Speaker 1: shift gears and figure out what they're talking points are
Speaker 1: going to be. Um. But as I noted this week,
Speaker 1: Fox is kind of protected because of their affiliate deals
Speaker 1: that they have with companies like Comcast and Charter that
Speaker 1: were only recently renewed in those last multiple years, so
Speaker 1: they've kind of lost in their profits for now. But
Speaker 1: there's definitely this big, like headline risk that people are
Speaker 1: looking and saying, wow, Fox has competition for kind of
Speaker 1: the first time and it's in. It's for real. Is
Speaker 1: there any sense about thirty seconds left that Fox is
Speaker 1: concerned about this? Are they seeing erosion in the ratings?
Speaker 1: They're saying a little bit. I mean it's it's small
Speaker 1: in the grand scheme of things, but I think they've
Speaker 1: got to be concerned. You know, you can't ignore that,
Speaker 1: and they definitely have to think about, you know, what's
Speaker 1: their narrative now we have a different president office, different party.
Speaker 1: What are they talk about now? If they can't talk
Speaker 1: about Trump? Well, if you think about half the voters
Speaker 1: paying you know, somebody maybe five dollars a month, that's
Speaker 1: a nice little monthly salary for anybody who who does that.
Speaker 1: So you have to, you know, you have to consider
Speaker 1: that to Tara's thank you so much. Tara's columns are
Speaker 1: so well worth reading, so satisfying and thought provoking. Tara
Speaker 1: Lasha Palaces, Bloomberg Opinion Hollum is covering the business of
Speaker 1: entertainment and communications as well as broader deals. Of course,
Speaker 1: used to write an m Day column for Bloomberg News.
Speaker 1: All right, where are we at with the election lawsuits?
Speaker 1: Let's ask somebody who follows them really to a t.
Speaker 1: Justin levet is, professor of law, Loyola Law School, and Justin,
Speaker 1: I hope that's correct. I hope you're as glued to
Speaker 1: all of this as the rest of us. I'm sure
Speaker 1: you are, because it only happens every four years. Right,
Speaker 1: what is the current status of all of the lawsuits? Well,
Speaker 1: there are some that are still lingering, but they're not
Speaker 1: going much of anywhere. Fact Um, the courts have been
Speaker 1: at a uniform across the board. They've granted some extremely
Speaker 1: minor procedural relief in the early going, but since then
Speaker 1: has pretty much rejected all of the claims that have
Speaker 1: been made uniformly and in multiple states. There are a
Speaker 1: few cases that are still less to sort of wease
Speaker 1: their way out, but that's the way most of them
Speaker 1: are going is slowly in with a whimper, So Professor.
Speaker 1: President Trump is also reportedly considering pardons for himself maybe
Speaker 1: his children. Um. What kind of legal jeopardy could he
Speaker 1: face from these actions? Well, from the pardons themselves, there's
Speaker 1: not much unless he dangled the bribe in order to
Speaker 1: produce these parts. That's something that we received word that
Speaker 1: the Justice Department had actually been investigating a few weeks ago.
Speaker 1: And UM, that is not okay. So holding out the
Speaker 1: prospect of the pardon in exchange for something value is
Speaker 1: not okay. But beyond that, UM, the president has extremely
Speaker 1: broad power to pardon for any federal criminal activity. UM.
Speaker 1: That runs up against two limits. One, it's generally acknowledged
Speaker 1: that the president can't pardon himself, that you need to
Speaker 1: be partnering somebody else and not yourself in order referred
Speaker 1: to be effective. And to the president can't pardon individuals
Speaker 1: of state criminal activity. UM. There are a number of
Speaker 1: state investigations that we know of, including a tax frawd
Speaker 1: another business liability from before the president's time as president. UM.
Speaker 1: And he can't as president get himself or others out
Speaker 1: of any trouble they may have run into with the states.
Speaker 1: What is your prediction for how it goes once you
Speaker 1: know the president elect is in office and the current
Speaker 1: president is not. Even though Kenny mcnetnie has just said
Speaker 1: that he's going to remain leader of the Republican Party.
Speaker 1: Is it possible that, after investigations and you know, presumably
Speaker 1: criminal overseedings, that a former president could actually go to prison.
Speaker 1: It's possible, it's exceedingly unlikely. There are reasons that it
Speaker 1: hasn't happened before. UM. Of course, this president has found
Speaker 1: pleasure in breaking a lot of norms, and it would
Speaker 1: be ironic if that were among the norms that he
Speaker 1: would have broken. UM. Look, in terms of federal liability,
Speaker 1: even if the president doesn't affectuate all of the pardoners
Speaker 1: that he's claimed to UM, there's going to have to
Speaker 1: be a really hard call on the part of the
Speaker 1: new administration about what sort of accountability to seek. UM.
Speaker 1: And we obviously have accountability through the criminal justice system,
Speaker 1: but that's not the only form of accountability we have UM.
Speaker 1: And there are lots of reasons why, even if the
Speaker 1: facts justified it, a new administration might choose to pursue
Speaker 1: accountability in some other realm outside of criminal justice. So, Professor,
Speaker 1: it's been I think speculated that the President Trump perhaps
Speaker 1: the biggest legal liability after he leaves office is from
Speaker 1: the Southern District of New York. There's a number of
Speaker 1: investigations on going. Is that you're reading as well. I
Speaker 1: think it's a combination of the Southern District and the
Speaker 1: New York Attorney General's Office. So as mentioned, there are
Speaker 1: different political considerations and their different legal considerations when it
Speaker 1: comes to the federal government holding somebody to account versus
Speaker 1: the state government. UM. I'll note that the New York
Speaker 1: Attorney General's Office has already very publicly come down on
Speaker 1: the Trump organization charity, the Trump Foundation, UM, and they
Speaker 1: have been looking into business dealings with the Trump organization
Speaker 1: elsewhere as well. UM. So I think it's it is
Speaker 1: certainly true that the activity that might cause him the
Speaker 1: most concern is happening within the jurisdiction of the Southern
Speaker 1: District of New York. But there are state actors there
Speaker 1: as well who also see at least some traces of
Speaker 1: facts they want to follow up to find out if
Speaker 1: there's been criminal wrongdoing. But when this is all over
Speaker 1: an you know, in our memories, I don't just mean
Speaker 1: the last four years, but also maybe the next eight
Speaker 1: or twelve years, will there be legal president that would
Speaker 1: have been created thanks to this period in time, Oh,
Speaker 1: no question, Um. But even more important, I think there
Speaker 1: will have been political or normative president UM. So some
Speaker 1: of the courts have issued opinions on what it is
Speaker 1: the president Kenner cannot do. They include opinions on what
Speaker 1: it is the president must or must not turn over
Speaker 1: when investigative agencies asking. All of that will be precedent
Speaker 1: for the future. But I think even as important as
Speaker 1: that are informal rules about how we treat the office
Speaker 1: of the presidency and what requires or demands a response
Speaker 1: from other elected officials, um, And those I can see
Speaker 1: running one of two ways, either learning the lessons in
Speaker 1: the last four years that we like how we treated
Speaker 1: this and so should continue to treat further president who
Speaker 1: might break norms in a similar fashion, or something I
Speaker 1: actually suspect more likely, UM, that we'll see a backlash
Speaker 1: that will realize that some of the ways in which
Speaker 1: norm breaking has been not only tolerated but encouraged in
Speaker 1: this presidency are more destructive long term to the health
Speaker 1: of the country, and that will turn a page on
Speaker 1: this and and sort of suggest I would hope never again.
Speaker 1: So Professor President Trump, I guess has not conceded. Yet,
Speaker 1: what are the constitutional laws surrounding this transfer of power?
Speaker 1: Do we need him to technically concede. No, it's just
Speaker 1: that every president since the mid nineteenth century has um,
Speaker 1: so we're not used to a president who doesn't concede.
Speaker 1: But in short, the president is not in control of
Speaker 1: whether he acknowledges a loss at all. UM. The state
Speaker 1: and local governments count up the ballots. That's something that
Speaker 1: we've seen over the last couple of weeks. A lot
Speaker 1: of Americans are now more attuned to than ever. UM
Speaker 1: they announced final results, governors or other executives of the
Speaker 1: state certify those results. The electors vote on December fourteenth
Speaker 1: in the electoral college, Congress counts the ballots. Butecial notice,
Speaker 1: I haven't mentioned the president once in all of that,
Speaker 1: and that's because he's not in control of whether he
Speaker 1: remains as president or not, if he chooses to concede,
Speaker 1: if he chooses not to concede either way around. The
Speaker 1: other actors in the system who count the ballots that
Speaker 1: have been cast decide whether on January at twelve oh one,
Speaker 1: President elect Joe Biden will be sworn in. He will
Speaker 1: be and if the president hasn't conceded by twelve oh one, Um,
Speaker 1: then he'd better find a new address, because at twelve
Speaker 1: o one, the Secret Service will establish the rule of
Speaker 1: the President elect, and anybody who's not that person will
Speaker 1: be kindly after the boy house. Very easy. We will
Speaker 1: follow that clearly, of course. Justin Leavitt, Professor of Law
Speaker 1: at the Loyal Law School, thank you so much for
Speaker 1: joining us based in Los Angeles. So again, Vonnie, the
Speaker 1: next six weeks here I'll be interesting to see, you know.
Speaker 1: President Biden continues to build out his cabinet and prepare
Speaker 1: for the transfer of power, so we will obviously watch that.
Speaker 1: Thanks for listening to Bloomberg Markets podcast. You can subscribe
Speaker 1: and listen to interviews at Apple Podcasts or whatever podcast
Speaker 1: platform you prefer. I'm Bonnie Quinn. I'm on Twitter at
Speaker 1: Bonnie Quinn, and I'm Paul Sweeney. I'm on Twitter at
Speaker 1: pt Sweeney. Before the podcast, you can always catch us
Speaker 1: worldwide at Bloomberg Radio.