WEBVTT - Bloomberg Surveillance TV: November 26, 2024 0:00:00.120 --> 0:00:06.800 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.640 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordern. Join us each day 0:00:18.720 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.920 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.960 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:36.959 Terminal and the Bloomberg Business app. We begin this out 0:00:37.000 --> 0:00:39.720 with the equity market rarely losing some steam as President 0:00:39.720 --> 0:00:43.479 atlect Donald Trump's tarif escalation fuel's dollar strength. Stuart Kaiser 0:00:43.600 --> 0:00:46.319 city right in the following. The focus of markets has 0:00:46.360 --> 0:00:49.800 been Trump policy and geopolitical events that have shifted risk 0:00:49.840 --> 0:00:53.160 specific pricing, but not reached critical mass to drive broad 0:00:53.200 --> 0:00:56.360 based de risking. Stuart joined us. Now for more, Stuart 0:00:56.360 --> 0:00:58.840 and Mornick. You see evidence of that again this morning. 0:00:59.080 --> 0:01:01.400 Well, I mean this is what we'll see how futures react, 0:01:01.480 --> 0:01:03.400 you know, to the tariff announcements. The market's kind of 0:01:03.440 --> 0:01:05.440 been on top of this. If you look a whare volatility. 0:01:05.440 --> 0:01:08.280 Marks has been pricing risk premiums. It's been in precious metals, 0:01:08.360 --> 0:01:10.600 it's been in you know, China exposed equities, and it's 0:01:10.600 --> 0:01:12.560 been in the currencies. So I think the market has 0:01:12.640 --> 0:01:15.560 kind of viewed those as key sort of pockets of risk, 0:01:15.600 --> 0:01:17.319 and you know, they're going to be surprised, I think 0:01:17.360 --> 0:01:20.480 by the magnitude of tyrists proposed on what for what 0:01:20.480 --> 0:01:23.120 we're former NAFTA, you know, kind of trade members. So 0:01:23.560 --> 0:01:25.039 without a doubt, you know what, We'll see how the 0:01:25.040 --> 0:01:27.840 futures react, but you know, this is this is what 0:01:27.880 --> 0:01:29.600 we're in for. I think for the next couple of months. 0:01:29.640 --> 0:01:31.880 How credible do you think the threats is additional ten 0:01:31.920 --> 0:01:34.759 percent on China, twenty five percent on Mexico and Canada. 0:01:34.840 --> 0:01:35.679 How credible is that? 0:01:36.040 --> 0:01:37.640 I mean you have to read it as credible. I mean, 0:01:37.680 --> 0:01:39.600 this is the president of the United States. He increased 0:01:39.600 --> 0:01:41.600 tariffs in his in his first h you know, his 0:01:41.680 --> 0:01:44.160 first term, and this was you know, part of his campaign, 0:01:44.360 --> 0:01:46.200 So I think you have to view them as credible. 0:01:46.440 --> 0:01:48.800 You know, I think some of his some of his 0:01:48.960 --> 0:01:51.480 inner circle has talked about these being negotiating tactics, and 0:01:51.560 --> 0:01:53.600 I think that's that's potentially true, but I mean a 0:01:53.640 --> 0:01:56.360 negotiating tactic is only effective if you're willing to use it, 0:01:56.400 --> 0:01:58.120 So I think you have to have to view them 0:01:58.120 --> 0:01:59.920 as as credible threats yet, which is the reason. 0:01:59.720 --> 0:02:01.720 Why line risk is real and the reason why you're 0:02:01.720 --> 0:02:03.840 seeing people trade on this, even if that trade gets 0:02:03.880 --> 0:02:07.520 faded in a couple of hours because of another headline 0:02:07.520 --> 0:02:09.320 that comes out. Is a good time or a bad 0:02:09.320 --> 0:02:10.200 time to be a trader? 0:02:10.800 --> 0:02:12.440 It's a hard time to be a trader. 0:02:12.440 --> 0:02:14.440 I would say, Look, I think it's a good time 0:02:14.480 --> 0:02:15.960 in the sense that you know, good traders like. 0:02:15.880 --> 0:02:17.200 A little bit of market volatility. 0:02:17.320 --> 0:02:19.120 I think the hard part about these type of things 0:02:19.240 --> 0:02:21.280 is just the unpredictability of it. It's not you know, 0:02:21.360 --> 0:02:23.440 payrolls are going to be released at a thirty am 0:02:23.480 --> 0:02:25.320 on December sixth, and I can kind of position and. 0:02:25.320 --> 0:02:25.960 Trade around that. 0:02:26.360 --> 0:02:28.280 You know, this is a little more you know, kind 0:02:28.280 --> 0:02:31.800 of random in terms of timing, and also you know, 0:02:31.880 --> 0:02:32.560 coming to you from. 0:02:32.440 --> 0:02:33.160 A lot of directions. 0:02:33.200 --> 0:02:34.679 Right, you have traders that are trying to deal with 0:02:34.760 --> 0:02:37.840 potential impact on healthcare policy, potential impact on food policy, 0:02:37.840 --> 0:02:39.799 and put potential impact on tariffs, et cetera. 0:02:39.840 --> 0:02:42.440 Et cetera. I mean, nobody can say this is totally surprising. 0:02:42.520 --> 0:02:44.520 Again, these were all things that were discussed during the 0:02:44.520 --> 0:02:46.400 election as priorities to deal with. 0:02:46.680 --> 0:02:47.720 But no, it's a. 0:02:47.639 --> 0:02:50.440 Difficult time, I think to be a trader unless you 0:02:50.680 --> 0:02:51.160 get it right. 0:02:51.400 --> 0:02:51.960 To build on that. 0:02:52.000 --> 0:02:54.040 You're talking about how there are specific headlines that have 0:02:54.120 --> 0:02:57.639 affected healthcare and appointments that have affected health care sector 0:02:57.680 --> 0:02:59.960 in particular, and you had a great note talking about 0:03:00.040 --> 0:03:03.679 how different sectors have traded differently from the overall headline 0:03:03.919 --> 0:03:06.720 in tandem with people's belief. Do you think that one 0:03:06.720 --> 0:03:10.399 of those moves is stickier than the other in terms of, say, healthcare, 0:03:10.440 --> 0:03:13.240 given the fact that some of the potential nominees for 0:03:13.280 --> 0:03:17.680 cabinet positions have talked about really disrupting healthcare in America. 0:03:17.919 --> 0:03:19.840 Yeah, I think, you know, toscoing into the election, two 0:03:19.840 --> 0:03:21.960 of the sectors that were a little bit like WILDCARDI 0:03:22.280 --> 0:03:25.040 would have been healthcare and energy, just in the sense 0:03:25.040 --> 0:03:27.800 that it's hard to decide what's going to go on 0:03:27.840 --> 0:03:29.960 at like the gigs level one sectoral level you almost 0:03:30.000 --> 0:03:32.560 have to go down a level, and even within healthcare 0:03:32.560 --> 0:03:34.720 that's the case. You know, do you have pharma being 0:03:34.920 --> 0:03:37.600 impacted in one direction, but then you have biotech potentially 0:03:37.680 --> 0:03:39.600 benefiting from M and A, and then people are trying 0:03:39.600 --> 0:03:42.280 to hide out and bed tech for instance. So it's 0:03:42.320 --> 0:03:44.960 a very complicated sector in terms of the policies that 0:03:45.000 --> 0:03:47.280 are being proposed impact different levels of it. As you 0:03:47.320 --> 0:03:49.840 go around energy, I would say, same way, We're going 0:03:49.880 --> 0:03:51.680 to drill a lot. That might be good for let's 0:03:51.720 --> 0:03:54.120 say pipelines, but it might push the price of oil lower. 0:03:54.160 --> 0:03:57.000 So I think those two sectors in particular are very 0:03:57.000 --> 0:03:59.280 complex right now, going to be very, very difficult to trade. 0:03:59.280 --> 0:04:01.280 In terms of persist I think the markets are telling 0:04:01.280 --> 0:04:03.880 you they think banking is persistent. So I think, you 0:04:03.920 --> 0:04:05.640 know that is the one that people were comfortable being 0:04:05.680 --> 0:04:07.040 long even in a down week. 0:04:07.440 --> 0:04:09.040 Those the banks are rallying. 0:04:09.040 --> 0:04:10.640 But I think healthcare and energy of the two that 0:04:10.680 --> 0:04:12.960 are going to be a little bit more more pulled 0:04:12.960 --> 0:04:15.240 than in multiple directions at the same time. 0:04:15.320 --> 0:04:18.279 When it comes to healthcare, though, changing policy in Washington, 0:04:18.360 --> 0:04:21.039 d C. Is like moving a massive tank. It takes 0:04:21.080 --> 0:04:23.000 a really long time. Would now potentially be a good 0:04:23.160 --> 0:04:25.919 entry point given how they have fallen with some of 0:04:25.920 --> 0:04:27.359 these announcements. 0:04:27.080 --> 0:04:27.880 You know it's possible. 0:04:27.920 --> 0:04:30.800 I think, you know, our view on healthcare has been 0:04:31.200 --> 0:04:33.200 that it was going to be difficult trade goingty election. 0:04:33.279 --> 0:04:34.880 We do think it's a beneficiary of M and A. 0:04:35.120 --> 0:04:36.720 I think at the top one of the question is 0:04:36.760 --> 0:04:39.200 in this in you know, the releatant for the credibility 0:04:39.279 --> 0:04:41.479 question is you know, how much of this stuff is 0:04:41.480 --> 0:04:43.560 is sort of more pie in the sky or maybe 0:04:43.680 --> 0:04:45.520 RF kids, you and your personality, things you'd like to 0:04:45.520 --> 0:04:46.600 get done, versus what are. 0:04:46.480 --> 0:04:48.039 They actually going to kind of push through. 0:04:48.360 --> 0:04:50.840 I think there is potentially the you know, the there's 0:04:50.880 --> 0:04:52.800 going to be a time to fade this stuff. I 0:04:52.880 --> 0:04:54.760 think right now, when things are just kind of so 0:04:55.640 --> 0:04:59.599 kind of uncertain and more of I don't know, wish 0:04:59.640 --> 0:05:02.480 lists that actual policy might not be the time. I think, 0:05:02.520 --> 0:05:04.920 you know, argue on the election. It's three stages. It's 0:05:04.960 --> 0:05:07.839 the initial risk on reaction to the election. Then you 0:05:07.880 --> 0:05:10.720 have what we're in now, which is nominees and policy proposals. 0:05:10.880 --> 0:05:12.880 Then you have phase three, which is probably next year, 0:05:12.920 --> 0:05:16.120 which is actually policy implementation. I think as we get 0:05:16.120 --> 0:05:17.760 closer to that is when you can think about kind 0:05:17.800 --> 0:05:18.839 of fading some of these things. 0:05:18.920 --> 0:05:22.480 Well in this phase to this transition, Why are US 0:05:22.480 --> 0:05:25.280 markets taking it and shried, and European markets are down 0:05:25.320 --> 0:05:25.960 across the board. 0:05:26.760 --> 0:05:27.720 That's a great question. 0:05:28.120 --> 0:05:30.479 US markets are, I think, are still benefiting from like 0:05:30.560 --> 0:05:32.760 the risk on repositioning part. I think a lot of 0:05:32.800 --> 0:05:35.320 the policies we've discussed, particularly on the tariff side, are 0:05:35.800 --> 0:05:37.840 viewed as more you know, pro us and and kind 0:05:37.839 --> 0:05:39.920 of hurt your you know, to some extent. And then 0:05:39.960 --> 0:05:41.880 you have the geopolitical risk you know, coming out of 0:05:42.160 --> 0:05:44.440 coming out of both the Middle East and Russia Ukraine. 0:05:44.520 --> 0:05:47.040 So look, I mean, if there's one thing that Trump 0:05:47.080 --> 0:05:51.800 administration is probably focused on is domestic growth, right America 0:05:51.880 --> 0:05:54.840 first type situation. So if you believe he is going 0:05:54.880 --> 0:05:57.200 to be successful at that, then almost by definition, US 0:05:57.279 --> 0:05:59.000 markets should benefit a bit more. 0:06:00.200 --> 0:06:00.360 You know. 0:06:01.240 --> 0:06:02.800 Will that actually come out, you know, in the wash, 0:06:02.839 --> 0:06:04.719 We'll have to see, but I think that's part of it. 0:06:04.800 --> 0:06:05.120 Right now. 0:06:05.200 --> 0:06:07.520 What you'll read on domestic growth to retat, it's just 0:06:07.560 --> 0:06:10.360 reporting moments ago one is cast the other is best 0:06:10.440 --> 0:06:13.000 by both triming their roundlok down ground in their round block. 0:06:13.400 --> 0:06:16.520 What she'll read on things right now, I understand landmine 0:06:17.080 --> 0:06:19.120 big inventry problem. I've got that. You can sit here 0:06:19.120 --> 0:06:21.080 and say that's a target problem. What are you seeing 0:06:21.120 --> 0:06:23.039 across the other resat it's what are we learning about 0:06:23.080 --> 0:06:25.200 consumption and how good US growth actually is. 0:06:25.600 --> 0:06:27.000 I mean, it looks fairly solid. 0:06:27.040 --> 0:06:29.760 You know, our our retail folks, you know, did a 0:06:29.760 --> 0:06:32.159 big survey pre holiday spending. It looks like holiday season 0:06:32.200 --> 0:06:34.560 is going to look pretty solid. So that's that's a 0:06:34.600 --> 0:06:36.520 good story. On that side, I think was Williams and 0:06:36.560 --> 0:06:38.760 Oma actually put up put up pretty decent numbers on 0:06:38.800 --> 0:06:41.279 their earnings. So it looks like, you know, I think 0:06:41.560 --> 0:06:44.880 how it's been, which is the underlying growth momentum, seems 0:06:44.880 --> 0:06:47.920 pretty positive. But you're sort of at that level where 0:06:47.920 --> 0:06:50.440 you get some good news and bad news, and you know, 0:06:50.520 --> 0:06:52.520 I think because of that that the bad news stuff 0:06:52.560 --> 0:06:54.720 is getting punished pretty bad. So I think over the 0:06:54.720 --> 0:06:57.720 summer we were trading decelerating growth. I think you still 0:06:57.760 --> 0:07:00.120 have to be trading this as you are at a 0:07:00.160 --> 0:07:03.200 solid growth level, but you're close enough to borderlines that 0:07:03.279 --> 0:07:05.640 when you get bad news you get a ton of reaction. 0:07:05.680 --> 0:07:08.320 But payrolls are going to be massive. On December sixth, 0:07:08.560 --> 0:07:11.680 my read would be growth is solid, but you know, 0:07:12.200 --> 0:07:14.880 not exemplary, and we just kind of have to trade 0:07:14.920 --> 0:07:17.120 it that way, and in those environments you have a 0:07:17.160 --> 0:07:19.160 lot of kind of risk reward and volatility because you're 0:07:19.200 --> 0:07:21.440 close to you're close to trigger points in a lot 0:07:21.440 --> 0:07:21.880 of spots. 0:07:21.960 --> 0:07:24.360 You talk about how they're winners and losers, the winners 0:07:24.400 --> 0:07:26.880 being the Walmarts of the world, the winners being some 0:07:26.960 --> 0:07:29.200 of the big tech names. I want to read some 0:07:29.320 --> 0:07:30.520 of the commentary from. 0:07:30.400 --> 0:07:31.200 The Coal CEO. 0:07:31.280 --> 0:07:32.480 I thought this was interesting. 0:07:32.840 --> 0:07:35.000 We are approaching our financial outlook for the year more 0:07:35.000 --> 0:07:39.040 conservatively given the third quarter underperformance and our expectation for 0:07:39.120 --> 0:07:41.600 a highly competitive high holiday season. 0:07:42.240 --> 0:07:43.720 Is this a new time. 0:07:43.640 --> 0:07:45.640 Where the big are going to get bigger that anyone 0:07:45.680 --> 0:07:48.560 who has that platform to basically dominate when it comes 0:07:48.640 --> 0:07:51.440 to data, when it comes to some of the technological 0:07:51.480 --> 0:07:54.640 advancements and deliveries are going to outperform at a time 0:07:54.640 --> 0:07:58.840 where they can offer maybe better price, competitive competition than 0:07:59.280 --> 0:08:02.000 some of the other companies that haven't had the scope 0:08:02.040 --> 0:08:03.360 to really expand in that way. 0:08:03.720 --> 0:08:05.000 Yeah, I mean, I think that's true, and I think 0:08:05.000 --> 0:08:06.920 you know that also brings the tariff discussion into is 0:08:06.960 --> 0:08:09.560 you know, which are these bigger companies more better set 0:08:09.600 --> 0:08:11.600 up to deal with any potential tariffs than kind of 0:08:11.600 --> 0:08:15.000 smaller competitors. So yeah, I think, you know, the big 0:08:15.040 --> 0:08:16.960 winning you know, that's hard to say. You still have 0:08:17.000 --> 0:08:18.800 to get it right. I mean, Target's a big company 0:08:18.880 --> 0:08:21.280 and they clearly got something wrong, you know, just just 0:08:21.320 --> 0:08:23.400 based on the stock price reaction. So yeah, I think 0:08:23.440 --> 0:08:26.520 it gives maybe a wal Mart on Amazon a little 0:08:26.560 --> 0:08:29.000 bit of an advantage, but there's still execution risk, right, 0:08:29.040 --> 0:08:30.360 and you do need to do it and. 0:08:30.840 --> 0:08:31.440 Do it well. 0:08:31.840 --> 0:08:33.520 I mean, I don't I'm not under the impression that 0:08:33.559 --> 0:08:36.160 this is a more competitive holiday season than last holiday season, 0:08:36.200 --> 0:08:37.800 for instance. I mean, I feel like these things are 0:08:37.800 --> 0:08:38.840 always pretty competitive. 0:08:39.679 --> 0:08:41.520 But yeah, you know, there's inventors there. 0:08:41.559 --> 0:08:43.840 I guess that the question, the bigger question is how 0:08:43.920 --> 0:08:46.600 much of a macro tell are any of these stories 0:08:46.760 --> 0:08:48.800 given the fact that there are winners, but there are 0:08:48.800 --> 0:08:52.080 some pretty big losers who are appointing to competition, who 0:08:52.120 --> 0:08:56.600 are appointing to a real unwillingness for consumers to buy 0:08:56.640 --> 0:08:58.920 things if the prices are perceived as too higher of 0:08:59.000 --> 0:09:00.920 the quality isn't received as enough. 0:09:01.280 --> 0:09:03.680 Yeah, I think the macro reave has been really tricky. 0:09:03.720 --> 0:09:06.160 I think because you had a period last quarter when 0:09:06.679 --> 0:09:09.600 the dollar stores did really, really poorly, and that would 0:09:09.600 --> 0:09:10.880 seem to have reflected. 0:09:10.520 --> 0:09:12.160 Hey, you're having a lot of pressure on that lower 0:09:12.200 --> 0:09:12.720 end consumer. 0:09:13.040 --> 0:09:15.760 But that's saying in that same period Walmart did great, 0:09:16.520 --> 0:09:19.520 and you know they were you know, there was some discussion, well, 0:09:19.600 --> 0:09:21.720 that's just because people are trading down to Walmart, and 0:09:21.760 --> 0:09:23.640 that's that is actually all bad news. 0:09:23.640 --> 0:09:25.160 I have my lower and consumer under pressure. 0:09:25.160 --> 0:09:27.600 I've met medium and high income consumer having to trade 0:09:27.640 --> 0:09:29.600 down and didn't need to be worried about that. But 0:09:29.640 --> 0:09:31.880 then you get your retail sales numbers and they're okay. 0:09:31.880 --> 0:09:33.400 And I think this gets back to you know, you 0:09:33.400 --> 0:09:36.480 know John's question, which is economic growth is fine, but 0:09:36.559 --> 0:09:38.400 it is slowing down to a level where you're going 0:09:38.440 --> 0:09:40.000 to get some good results, you're going to get some 0:09:40.040 --> 0:09:42.760 bad results, and that's going to kind of create volatility 0:09:42.760 --> 0:09:44.280 in the market and you just kind of need to 0:09:44.520 --> 0:09:46.400 excuse me, you need to risk risk manage around that 0:09:46.400 --> 0:09:46.880 a little bit. 0:09:47.040 --> 0:09:49.800 Is there more though anecdotes that more and more consumers 0:09:49.840 --> 0:09:52.640 are trading down and potentially that's the start of something bigger. 0:09:53.440 --> 0:09:55.199 It does feel that way, but I mean I can 0:09:55.240 --> 0:09:57.839 think back to last all the previous to August August 0:09:58.240 --> 0:10:00.520 twenty twenty three, when you had some you know, weak 0:10:00.600 --> 0:10:02.440 data out of some of the retailers on their on 0:10:02.440 --> 0:10:05.160 their private label credit cards, and folks were saying, this 0:10:05.200 --> 0:10:07.240 is the moment. You know, these private level credit cards 0:10:07.240 --> 0:10:10.400 are under under pressure and credit balances are rising. 0:10:10.520 --> 0:10:11.679 So I mean the. 0:10:11.640 --> 0:10:15.160 Anecdotes, yes, they are stacking up, but I feel like 0:10:15.200 --> 0:10:17.839 people have been trying to fade this for an extended 0:10:17.880 --> 0:10:19.880 period of time, and it's always been a little bit 0:10:19.920 --> 0:10:23.120 too early. So you know, I think, yes, yes, yes, 0:10:23.160 --> 0:10:25.480 the anecdotes are stacking up, but I'm not sure that that's, 0:10:26.120 --> 0:10:27.480 you know, out of the blue. I think this is 0:10:27.480 --> 0:10:29.280 something people have been expecting. It has been kind of 0:10:29.280 --> 0:10:32.120 an ongoing process, and we're just gonna have to, I 0:10:32.160 --> 0:10:33.760 hate to say, just wait on the data. 0:10:33.559 --> 0:10:34.079 At this point. 0:10:34.200 --> 0:10:36.120 Jobless Claims has been a great example of the same thing. 0:10:36.240 --> 0:10:39.319 So many headfakes of the last compless summits. We're coming 0:10:39.360 --> 0:10:41.280 into September oc Tiber. Every single time we're waiting for 0:10:41.360 --> 0:10:43.600 this thing to slow down, and then it just doesn't happen. 0:10:43.679 --> 0:10:43.839 Too. 0:10:44.080 --> 0:10:45.640 It's good to see you. Thank you, have a happy 0:10:45.640 --> 0:10:47.600 thanksgiving you to catching up with this. Thank you, Stu. 0:10:47.679 --> 0:11:00.920 A kinds of that of City tending to Tenessla California Conveny, 0:11:00.920 --> 0:11:02.960 I can have a new some excluding Elon Musk Company 0:11:02.960 --> 0:11:05.719 from a proposal that would oft for EV rebates to 0:11:05.800 --> 0:11:09.559 buy us if a federal subsidy is repealed. Newsom's office 0:11:09.600 --> 0:11:13.720 telling Bloomberg it's due to the plan's market share limitations 0:11:14.120 --> 0:11:17.160 must call in the proposal insane. In a post on x, 0:11:17.240 --> 0:11:19.880 Danas of wet Buss saying this, with the majority of 0:11:19.920 --> 0:11:22.800 evs sold in California being Tesla's, this would be a 0:11:22.880 --> 0:11:25.760 risky political move in our view. Dan joins us from 0:11:25.760 --> 0:11:27.640 more thank in Morning Creazy to be here. Do you 0:11:27.679 --> 0:11:28.600 agree it's insane? 0:11:29.240 --> 0:11:32.040 Look, yeah, Jig, Paul and Tyson, now you got news 0:11:32.240 --> 0:11:34.400 and Musk. I mean, this is going to be a battle, 0:11:34.520 --> 0:11:35.760 right like, and. 0:11:35.760 --> 0:11:37.920 Ultimately it's a political battle. 0:11:38.000 --> 0:11:43.080 But the only evs that are made in California Tasselas. 0:11:43.120 --> 0:11:45.640 So if you ALTERO, if they actually go down this path, 0:11:46.200 --> 0:11:48.719 I believe this could be some threat to where more 0:11:48.760 --> 0:11:52.439 and more jobs moved from Freemont to sex Coustin. 0:11:52.720 --> 0:11:53.680 But at the end of the. 0:11:53.720 --> 0:11:56.240 Day, federal attacks, as we've talked about, that's going to 0:11:56.280 --> 0:11:57.719 get ripped away. 0:11:57.960 --> 0:12:01.080 That's bullsh for Tesla. You're just going to see this 0:12:01.160 --> 0:12:01.839 back and forth. 0:12:01.920 --> 0:12:03.520 Before we get into that, let's just take into this 0:12:03.559 --> 0:12:06.600 relationship what it's behind it. We know what was behind 0:12:06.640 --> 0:12:09.040 it with Biden. What this basically came down to was 0:12:09.600 --> 0:12:11.960 union workers not being a tenser in a way that 0:12:11.960 --> 0:12:14.840 they were at GM and Ford. What's this one about? 0:12:15.200 --> 0:12:17.800 Look, I think first of all, I mean Musk was 0:12:18.080 --> 0:12:20.120 iced out of the Biden administration per year. 0:12:20.280 --> 0:12:22.640 I was really focused on Detroit and from the GM four. 0:12:22.720 --> 0:12:27.640 Another's if you look here is that there's regulars. There's 0:12:27.640 --> 0:12:32.040 a beef qlearly between Musk Newsome. But essentially what this 0:12:32.080 --> 0:12:34.240 is really about is that you're going to have these 0:12:34.280 --> 0:12:38.680 tax pap from a federal perspective taken away. California clearly 0:12:38.760 --> 0:12:40.599 trying to do something. 0:12:40.360 --> 0:12:42.920 To stop there. But the reality is is that this ran. 0:12:43.120 --> 0:12:47.000 The money ran out on this program in California. 0:12:47.160 --> 0:12:50.080 So Dan, this is important. The support at a federal 0:12:50.160 --> 0:12:52.560 level is clearly with Elon Musk. At a state level, 0:12:52.559 --> 0:12:55.440 in places like California, it looks like because of this 0:12:55.520 --> 0:12:59.040 tension he's losing it. How important is that relationship of 0:12:59.080 --> 0:13:01.280 both the state and level when it comes to things 0:13:01.360 --> 0:13:03.480 like autonomus driving state. 0:13:03.720 --> 0:13:07.000 We view it as much less than from a federal 0:13:07.040 --> 0:13:10.480 perspective because the golden goose here is autonomous. You know, 0:13:10.600 --> 0:13:14.320 we believe the autonomous piece is worth a trillion dollars 0:13:14.360 --> 0:13:19.439 alone to Tesla. Federal regulatory spiderweb essentially gets ripped away, 0:13:19.480 --> 0:13:22.920 and I think that's significant. Now California, Newsom queerly will 0:13:22.920 --> 0:13:25.000 try to fight some of the autonomous, some of the 0:13:25.080 --> 0:13:28.880 unsupervised FSD, but this is going to be something that's 0:13:28.920 --> 0:13:32.040 really going to continue. But I believe Tesla is going 0:13:32.120 --> 0:13:36.200 to have significant sort of room to what I view 0:13:36.280 --> 0:13:39.400 is elevate themselves within autonomous and that's. 0:13:39.200 --> 0:13:41.360 Really what I believe is the key to this Tesla story. 0:13:41.400 --> 0:13:45.199 It's about AI and autonomous what Newsom's doing here when 0:13:45.240 --> 0:13:48.600 it comes to California, this is essentially almost a side 0:13:48.600 --> 0:13:51.920 show to the broader story here with Tesla, which is 0:13:51.920 --> 0:13:55.240 why it's really been a Cinderella story since Trump got 0:13:55.280 --> 0:13:56.800 in because of the must bet. 0:13:56.920 --> 0:13:59.920 But when it comes to autonomous driving and the federal regulations, 0:13:59.760 --> 0:14:00.760 it's a light switch. 0:14:01.160 --> 0:14:02.679 This has to go through Congress. 0:14:03.000 --> 0:14:07.000 Elon Musk and his proximity to power cannot just basically 0:14:07.559 --> 0:14:08.800 get this over the finish. 0:14:08.559 --> 0:14:12.000 Line of course not in itself, but could move it 0:14:12.160 --> 0:14:15.440 significantly toward the finish line. So okay, he gets into 0:14:15.480 --> 0:14:17.640 the two yard line. Right now, it's at the forty 0:14:17.720 --> 0:14:21.360 yard line. Okay, fifty midfield, so he gets to a 0:14:21.440 --> 0:14:24.000 two yard line. But that's also why with the red 0:14:24.040 --> 0:14:26.560 sweep and just relative to what we see with coming 0:14:26.600 --> 0:14:28.400 out of the beltwayh you know, being there over the 0:14:28.480 --> 0:14:31.880 last week, we feel like there's a ground swell for autonomous, 0:14:31.880 --> 0:14:34.040 but no doubt when it comes to EVS, you. 0:14:34.000 --> 0:14:36.040 Feel there's a ground swell in Congress as well. 0:14:36.160 --> 0:14:38.240 I believe there's a groundswell. For the reason I think 0:14:38.240 --> 0:14:41.080 there's a ground swell based on our of you and 0:14:41.120 --> 0:14:43.680 what we hear is because of what's happened in China, 0:14:43.840 --> 0:14:47.160 because China is now going so far ahead of the 0:14:47.320 --> 0:14:49.800 US when it comes to autonomous because of the lack 0:14:50.200 --> 0:14:50.840 of really. 0:14:50.640 --> 0:14:52.040 Regulatory spider web. 0:14:52.360 --> 0:14:54.800 That's why Trump, you have an ais are come in, 0:14:55.040 --> 0:14:58.480 But who's going to be From an AI's our perspective, 0:14:59.120 --> 0:15:01.080 Musk is going to have have a front row seat 0:15:01.240 --> 0:15:04.520 to really everything here. And that's why it continues to 0:15:04.600 --> 0:15:08.480 be the poker bet for the ages for Musk. 0:15:08.680 --> 0:15:09.680 You betting on Trump. 0:15:09.800 --> 0:15:12.520 So basically, and this sort of goes to the heart 0:15:12.680 --> 0:15:16.040 in some ways of the beef between Newsom and Musk. 0:15:16.160 --> 0:15:18.200 The idea that it's one thing to. 0:15:18.080 --> 0:15:20.960 Be transactional in your policies if you're in the White 0:15:21.000 --> 0:15:22.880 House in your Washington, DC. It's another for sitting at 0:15:22.880 --> 0:15:25.600 the state and the White House will probably trump that. 0:15:25.760 --> 0:15:27.800 There is just a question of how far that will go. 0:15:28.000 --> 0:15:31.560 Do you actually believe that there will be policies crafted 0:15:31.800 --> 0:15:35.960 specifically to benefit Tesla over some of the rivals in 0:15:36.000 --> 0:15:39.480 the United States because of Musk's closeness to the White House. 0:15:39.680 --> 0:15:43.000 I think, look clearly, well, Tesla is just a much 0:15:43.040 --> 0:15:46.160 different situation relative to Autonomous. So they at first that 0:15:46.240 --> 0:15:48.160 they have the scale and scope on EV so you 0:15:48.200 --> 0:15:50.520 pull the tax credit, gives them a huge advantage is 0:15:50.640 --> 0:15:54.520 relative to federal subsidies, but aren't autonomous. 0:15:54.680 --> 0:15:57.440 It's their world. Everyone else pays rent along with Weymouth. 0:15:57.840 --> 0:16:00.760 So when you look at this relative to other auto makers, 0:16:00.960 --> 0:16:03.960 they're essential almost going to have to license from Tessa 0:16:04.080 --> 0:16:06.720 when it comes to the state level. You look in Newsom, 0:16:07.080 --> 0:16:09.120 look does this end up in a UFC fight? 0:16:09.280 --> 0:16:09.800 I don't know. 0:16:10.000 --> 0:16:13.080 I mean, this is going to continue to play. 0:16:12.800 --> 0:16:15.040 Out between this beef Newsom and Musk. 0:16:15.200 --> 0:16:18.240 This goes beyond just Tesla. There was a report out 0:16:18.240 --> 0:16:22.160 of the Information saying that Google CEO called Donald Trump 0:16:22.280 --> 0:16:24.840 and Elon Musk was on the phone with him and he. 0:16:24.880 --> 0:16:25.880 Was surprised by that. 0:16:26.400 --> 0:16:27.560 You talk about. 0:16:27.640 --> 0:16:30.200 Space and some of the space exploration and what's going 0:16:30.240 --> 0:16:33.120 to happen with the NASA budget, how much can you 0:16:33.160 --> 0:16:36.560 extrapolate out that the Musk halo is really something that 0:16:36.600 --> 0:16:38.640 you have to sort of get on the bandwagon as 0:16:39.440 --> 0:16:42.280 as an investor, simply because there are going to be 0:16:42.760 --> 0:16:46.160 certain policies that will just to facto benefit him because 0:16:46.160 --> 0:16:47.280 of his closeness with the president. 0:16:47.440 --> 0:16:49.280 I mean, I think you said as best as I 0:16:49.320 --> 0:16:52.920 can say. I mean this Musk and Trump, this is 0:16:52.960 --> 0:16:55.280