WEBVTT - Citi, Alphabet, and Munis 0:00:00.120 --> 0:00:04.360 Bloomberg is now on your dashboard with Apple CarPlay and 0:00:04.360 --> 0:00:08.160 Android Auto. It gives you access to every Bloomberg podcast, 0:00:08.280 --> 0:00:11.560 live audio feeds from Bloomberg Radio, print stories from Bloomberg 0:00:11.640 --> 0:00:14.920 News in audio form, and the latest headlines of the 0:00:14.920 --> 0:00:18.600 click of a button with Bloomberg News. Now it's free 0:00:18.680 --> 0:00:21.439 with the latest version of the Bloomberg Business App. That's 0:00:21.680 --> 0:00:24.400 the Bloomberg Business App. Get it on your phone in 0:00:24.440 --> 0:00:27.760 the Apple App Store or on Google Play. Just download 0:00:27.800 --> 0:00:30.560 the app, connect your phone to your car and get started. 0:00:30.960 --> 0:00:34.400 And it's all presented by our sponsor, Interactive Brokers. 0:00:35.400 --> 0:00:38.600 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:38.640 --> 0:00:39.800 my co host Matt Miller. 0:00:40.200 --> 0:00:44.279 Every business day we bring you interviews from CEOs, market pros, 0:00:44.320 --> 0:00:48.160 and Bloomberg experts, along with essential market movin news. 0:00:48.720 --> 0:00:51.839 I'm the Bloomberg Markets podcast called Apple Podcasts or wherever 0:00:51.960 --> 0:00:55.080 you listen to podcasts, and at Bloomberg dot com Slash podcast. 0:00:55.640 --> 0:00:59.520 A lot going on across Wall Street. One of the 0:00:59.520 --> 0:01:02.280 things that's going on, in particular to City Group, the 0:01:02.320 --> 0:01:05.080 company is shutting down. It's muni business that was once 0:01:05.200 --> 0:01:08.080 the envy of rivals, and right now to discuss that. 0:01:08.120 --> 0:01:11.240 We are going to be talking with Bloomberg Finance team 0:01:11.319 --> 0:01:14.880 leader Sally Bakewell, who has been leading the coverage all 0:01:14.920 --> 0:01:18.840 over everything developing with City. Sally just kind of give 0:01:18.920 --> 0:01:21.640 us a thirty thousand foot look of what this means 0:01:21.640 --> 0:01:25.600 for City Group. As our CEO, Jane Fraser, still continues 0:01:25.640 --> 0:01:28.480 to reshape the company in its operations. 0:01:29.520 --> 0:01:31.199 Right, well, it means a lot of this City Group 0:01:31.200 --> 0:01:32.880 and it means a lot for the muni market there 0:01:32.920 --> 0:01:36.480 because City had really dominated that four trillion space of 0:01:36.600 --> 0:01:39.720 underwriting local and state debt for most of the past decade. 0:01:39.760 --> 0:01:43.039 In fact, it ranked among the two biggest of municipal 0:01:43.080 --> 0:01:46.320 bond underwriters by volume. It's been on deals like the 0:01:46.319 --> 0:01:50.560 rebuilding of the World Trade Center, on rebuilding the portal 0:01:50.600 --> 0:01:55.279 authorities of New York and New Jersey. But as City 0:01:55.360 --> 0:01:58.440 has struggled in recent years through a number of issues 0:01:58.440 --> 0:02:02.720 and including it sort of ability to deliver returns and 0:02:02.760 --> 0:02:06.280 meet financial goals. And so Jane Fraser, who has been 0:02:06.280 --> 0:02:08.080 at the helm for a number of years, her border 0:02:08.120 --> 0:02:11.000 aim is to make City a bank that you know 0:02:11.120 --> 0:02:15.720 serves large multinational corporations but also improves returns which have 0:02:15.919 --> 0:02:21.800 been trailing. So I think the muni business became incompatible 0:02:21.880 --> 0:02:25.760 with that goal for a number of reasons. I think 0:02:26.080 --> 0:02:30.240 a big one being that Hexas is the biggest state 0:02:30.320 --> 0:02:35.120 for muni bond sales. But City, owing to firearms policies, 0:02:35.680 --> 0:02:37.960 got frozen out of a number of big deals there 0:02:38.000 --> 0:02:40.079 and that did crimp a lot of its revenue and 0:02:40.120 --> 0:02:44.720 ability to generate profits. And I think deliberations continued for 0:02:44.760 --> 0:02:48.120 a number of months over this big decision, and they have, 0:02:48.480 --> 0:02:50.880 you know, decided that it would be better for City, 0:02:50.919 --> 0:02:54.880 which is undergoing a number of restructurings in other areas, 0:02:55.040 --> 0:02:56.360 if it was out of this market. 0:02:56.680 --> 0:02:59.000 Yeah, the almost the impeach, well, I guess it was 0:02:59.040 --> 0:03:01.880 in peach. It wasn't really, but the Attorney generaler Ken 0:03:01.960 --> 0:03:04.440 Paxton is kind of in charge of that, taking aim 0:03:04.600 --> 0:03:08.799 at all the big underwriters, all the money center banks 0:03:09.320 --> 0:03:14.160 that have policies with which he disagrees by freezing them 0:03:14.280 --> 0:03:17.639 out of that market. The end result was that it's 0:03:17.720 --> 0:03:21.799 taxpayers who fit the bill because they don't get the 0:03:22.160 --> 0:03:26.560 best pricing for their munis. Is there anybody around to 0:03:26.600 --> 0:03:30.520 pick up the slack or are other banks facing the 0:03:30.560 --> 0:03:33.520 same situation? Is anybody going to be left. 0:03:34.880 --> 0:03:35.000 Oh. 0:03:35.040 --> 0:03:37.360 I think the scrutiny is definitely there on all of 0:03:37.400 --> 0:03:41.200 the banks, but I think there are banks who are 0:03:41.240 --> 0:03:44.520 picking up the slack. In fact, a team of from 0:03:44.600 --> 0:03:51.040 City actually defected to Jeffries just in November after news 0:03:51.120 --> 0:03:53.600 that City was weighing pulling out. 0:03:53.600 --> 0:03:55.200 They saw the writing on the wall. 0:03:56.320 --> 0:03:58.160 I think the writing has been on the wall for 0:03:58.640 --> 0:04:02.080 a little while. In fact, City also shut the its 0:04:02.160 --> 0:04:05.640 muni prop trading desk not too long ago, which that 0:04:05.760 --> 0:04:07.560 was the desk that used the firm's own cash to 0:04:07.640 --> 0:04:10.320 trade and invest in the debt, and that has now 0:04:10.840 --> 0:04:13.640 translated to a complete wind down of the business by 0:04:13.680 --> 0:04:15.760 the end of the first quarter. But you know, City 0:04:15.840 --> 0:04:20.680 ranked number seven in terms of muni bond sale underwriting. 0:04:20.880 --> 0:04:24.000 Bank of America is first, RBC Capital Markets is second. 0:04:24.279 --> 0:04:25.960 Then you of course have the likes of JP Morgan, 0:04:26.040 --> 0:04:29.440 Jeffrey's Morgan, Stanley, Wills Fargo. So in terms of picking 0:04:29.480 --> 0:04:32.160 up the slack, there is still very much a market there. 0:04:32.960 --> 0:04:33.400 I think. 0:04:33.920 --> 0:04:37.839 You know, for City, it represented at one time, you know, 0:04:37.880 --> 0:04:41.359 a very significant business and also the ability of the 0:04:41.440 --> 0:04:45.080 bank to connect to the country on a broader, sort 0:04:45.120 --> 0:04:50.719 of deeper level because it was providing financing for you know, schools, hospitals, 0:04:50.839 --> 0:04:53.640 railroad and so on. And that's an important thing for 0:04:53.680 --> 0:04:55.640 a bank to do and to be seen to be doing. 0:04:56.040 --> 0:04:59.680 And sally, just for a sense of how crucial munis are. 0:04:59.720 --> 0:05:03.039 What how does immunis play into the broader business for 0:05:03.160 --> 0:05:05.360 these banks in terms of generating fees? Just looking at 0:05:05.360 --> 0:05:07.400 the league table that you guys have in the chart, 0:05:07.760 --> 0:05:10.400 Bank of America with an almost thirteen percent market share 0:05:10.440 --> 0:05:13.960 at forty four billion dollars of volume, how does that 0:05:14.000 --> 0:05:16.200 compare two things like IPOs and M and A and 0:05:16.240 --> 0:05:19.320 actually generating fees for these big banks. 0:05:20.360 --> 0:05:23.880 Yeah, I think it's a very substantial part of what 0:05:24.320 --> 0:05:27.280 any any bank that's involved in the market does. I mean, 0:05:28.040 --> 0:05:32.720 there is an sort of unending s figot of material 0:05:32.920 --> 0:05:35.240 and deals to work on if you're in the in 0:05:35.279 --> 0:05:41.479 the municipal space. So it is definitely a blow for 0:05:42.200 --> 0:05:46.320 City that it was unable to really participate, for example, 0:05:46.360 --> 0:05:50.960 in the Texas market specifically, and it's a big it's 0:05:51.000 --> 0:05:54.800 a very substantial change for the company which historically had 0:05:54.800 --> 0:05:58.320 been such a big player in this space going back decades. 0:05:59.640 --> 0:06:02.080 But you know, City is currently going through a big 0:06:02.120 --> 0:06:05.880 overhaul that it unveiled in September its biggest overhaul in decades, 0:06:05.920 --> 0:06:09.919 where it's trying to refocus on five core areas. The 0:06:09.960 --> 0:06:12.720 goal is to make it a leaner, more efficient organization, 0:06:12.960 --> 0:06:18.520 to remove layers of management again with that broader, broader 0:06:18.560 --> 0:06:23.480 aim of improving returns, and that is going to spark 0:06:23.520 --> 0:06:25.320 a lot of change at the bank, which we've already 0:06:25.320 --> 0:06:28.119 started to see. We know that there will be job cuts, 0:06:28.120 --> 0:06:29.839 and there have already been some job cuts and we 0:06:29.880 --> 0:06:34.200 can anticipate more next year. But yes, the goal is 0:06:34.240 --> 0:06:37.760 to make City at a lina organization, and I think 0:06:39.000 --> 0:06:44.040 focusing on more higher revenue, higher margin businesses is the 0:06:44.080 --> 0:06:47.800 goal and Immunia business didn't quite align with that anymore. 0:06:47.960 --> 0:06:50.640 Well, yeah, Sally, we had the news earlier in the 0:06:50.640 --> 0:06:53.560 week from our colleagues in London about City offering partial 0:06:53.600 --> 0:06:57.200 early bonuses amid this restructuring. So as you talk about 0:06:57.200 --> 0:07:00.200 and look at what the path forward looks like, does 0:07:00.200 --> 0:07:02.600 twenty twenty four actually look like for City Group to 0:07:03.360 --> 0:07:06.279 rein in their spending and costs and also compete in 0:07:06.320 --> 0:07:09.760 what still seems to be a very hot war for 0:07:09.880 --> 0:07:12.400 talent on Wall Street, right, And. 0:07:12.280 --> 0:07:14.640 That's a really good point to bring up the bonuses 0:07:14.760 --> 0:07:18.080 with City, because yes, it offered a select number of 0:07:18.160 --> 0:07:21.800 staff the ability to take a portion of their guaranteed 0:07:21.880 --> 0:07:28.800 bonus now and leave rather than risk next year potentially 0:07:28.840 --> 0:07:31.920 losing their jobs under this restructuring, but being left with 0:07:32.000 --> 0:07:34.680 no job and no bonus. I think it kind of 0:07:34.800 --> 0:07:39.800 underscores it's a fairly shocking move, you know, to basically 0:07:39.880 --> 0:07:42.640 ask people to do this, And I think it underscores 0:07:42.680 --> 0:07:46.120 the urgency with which Jane Fraser knows she has to 0:07:46.960 --> 0:07:50.280 start to deliver. The bank had already tried to or 0:07:50.360 --> 0:07:54.440 has nearly completed an exit of a number of its 0:07:54.520 --> 0:07:59.560 global retail markets. And I think, you know, it's undertaken 0:07:59.600 --> 0:08:02.280 other men to try and write the ship that perhaps 0:08:02.360 --> 0:08:06.640 weren't deemed to be fully effective, and this latest overhaul 0:08:06.800 --> 0:08:10.239 is a real attempt to show shareholders that it can 0:08:11.200 --> 0:08:15.440 set financial targets and meet them, that it can improve returns. 0:08:15.480 --> 0:08:20.280 And I think for twenty twenty four, actually things possibly 0:08:20.280 --> 0:08:24.480 are looking fairly solid. We just had Mike Mayo, who 0:08:24.520 --> 0:08:26.680 is the Wells Fargo very well known bank analyst. He 0:08:26.680 --> 0:08:30.520 actually named City as his top pick among large cat 0:08:30.640 --> 0:08:33.960 banks heading into twenty twenty four, replacing JP Morgan Chase 0:08:34.000 --> 0:08:38.360 as his favorite. So, you know, he said he's been 0:08:38.720 --> 0:08:41.480 long and wrong on City Group, but he thinks that 0:08:41.520 --> 0:08:45.640 the restructuring is making them more simple, the management is addressing, 0:08:45.800 --> 0:08:47.920 you know, two decade or problems at the banks, and 0:08:47.920 --> 0:08:52.160 that it's seeming to get expenses under wraps. So perhaps 0:08:52.240 --> 0:08:55.880 the subtotal of all of these measures in twenty twenty 0:08:55.920 --> 0:08:58.680 four is when we do start to see them pay off. 0:08:58.760 --> 0:09:01.240 Are going to see similar moves by other banks dropping 0:09:01.320 --> 0:09:04.360 their municipal departments. 0:09:06.840 --> 0:09:08.760 It's hard to say. I think it depends on the 0:09:09.120 --> 0:09:13.319 level of scrutiny from Paxton. It will depend on the 0:09:13.960 --> 0:09:18.120 economic viability of the business under that scrutiny. The other 0:09:18.160 --> 0:09:21.160 banks don't have the same issues as City, though, they 0:09:21.160 --> 0:09:25.600 don't have to make these dramatic moves to kind of 0:09:25.760 --> 0:09:30.120 really reshape the organizations. So that I think is why 0:09:30.320 --> 0:09:34.400 City was slightly unique in feeling the impact of the 0:09:35.440 --> 0:09:39.280 situation in Texas and having to weigh up the viability 0:09:39.280 --> 0:09:42.520 of its business. It is doing this against this backdrop of, 0:09:43.280 --> 0:09:45.560 as Mike mos said, a decades long sort of problem 0:09:45.600 --> 0:09:48.679 at the bank of not being able to generate the 0:09:48.760 --> 0:09:50.920 kind of returns that the other banks were able to 0:09:50.920 --> 0:09:53.880 do so. I think there will be under scrutiny, but 0:09:53.960 --> 0:09:57.120 they probably won't feel that need to act in the 0:09:57.120 --> 0:09:58.360 same way that city has. 0:09:58.640 --> 0:10:04.120 City dropping its municipal business. Sally bankwell with the story 0:10:04.160 --> 0:10:07.560 for Bloomberg News. Sally, thanks very much, appreciate your time. 0:10:09.120 --> 0:10:12.520 You're listening to the team. Can's a live program Bloomberg 0:10:12.559 --> 0:10:15.960 Markets weekdays at ten am Eastern on Bloomberg dot Com, 0:10:16.040 --> 0:10:19.160 the iHeartRadio app and the Bloomberg Business App, or listen 0:10:19.240 --> 0:10:21.360 on demand wherever you get your podcasts. 0:10:23.520 --> 0:10:28.440 Making the energy transition no easy tasks as we try 0:10:28.480 --> 0:10:32.920 to decarbonize utilities across the United States. Let's bring in 0:10:32.960 --> 0:10:36.040 our next guest. Maria Pope is the CEO of Portland 0:10:36.520 --> 0:10:40.200 General Electric. We got a picture of just how difficult 0:10:40.280 --> 0:10:43.599 that transition is. I think it was today or yesterday 0:10:43.800 --> 0:10:47.679 with California the governor there in his attempts to recommission 0:10:47.720 --> 0:10:53.880 the Diablo Nuclear Power Plant Diablo Canyon because they need it. Basically, 0:10:54.000 --> 0:10:58.240 they can't just do it alone with renewable sources. So Maria, 0:10:58.520 --> 0:11:02.280 what is the timeline for you guys with your utility, 0:11:03.200 --> 0:11:07.560 Portland General Electric to decarbonize and are on track at 0:11:07.559 --> 0:11:08.120 this point. 0:11:09.320 --> 0:11:13.400 So we're looking to decarbonize the energy supply eighty percent 0:11:13.880 --> 0:11:17.319 by twenty thirty and then net zero by twenty forty. 0:11:17.600 --> 0:11:20.760 Obviously we'll need new technologies by twenty forty, but we 0:11:20.840 --> 0:11:24.720 are on track with forty percent of our customer's energy 0:11:24.760 --> 0:11:26.760 coming from renewable sources today. 0:11:27.440 --> 0:11:30.000 And with that technology transition, is that developed in house, 0:11:30.040 --> 0:11:32.640 are you licensing it from startups or kind of how 0:11:32.679 --> 0:11:33.400 does that play out? 0:11:34.320 --> 0:11:38.320 It really comes from a variety of sources, first legacy hydro, 0:11:38.800 --> 0:11:42.280 then we take solar and wind, battery storage. We have 0:11:42.360 --> 0:11:46.319 the second largest installation of battery storage outside of California 0:11:46.400 --> 0:11:50.240 taking place right now, and we use a lot of 0:11:50.280 --> 0:11:55.480 technologies to integrate all of those renewables for safe, reliable, affordable, 0:11:55.520 --> 0:11:56.920 clean energy for our customers. 0:11:57.320 --> 0:12:02.360 Hey, Maria, just how vulnerable is your utility to droughts? 0:12:02.400 --> 0:12:07.080 You mentioned hydro power and even wildfires with the transmission lines. 0:12:08.520 --> 0:12:10.680 You know, it's something a lot of people ask. We're 0:12:10.720 --> 0:12:13.800 in actually a drought period right now in the Pacific Northwest, 0:12:13.800 --> 0:12:16.520 and we've actually been relying a lot more on energy 0:12:16.559 --> 0:12:19.960 from markets outside of this region. Much of that is 0:12:20.040 --> 0:12:24.520 renewable solar and other sources. That come into this area, 0:12:25.200 --> 0:12:29.360 but also being able to construct new wind resources, new 0:12:29.400 --> 0:12:34.240 solar resources is augmenting our legacy Hydro. As we look 0:12:34.520 --> 0:12:38.280 going forward, we will need ever increasing amounts of renewable energy, 0:12:38.320 --> 0:12:41.320 which are today price competitive with other sources. 0:12:41.679 --> 0:12:43.840 And how much does that cost? What's your capex looking 0:12:43.920 --> 0:12:45.880 like to make some of these investments. 0:12:46.880 --> 0:12:49.320 You know, we have taken our investment up over time, 0:12:49.400 --> 0:12:53.040 and in the last three years, our invested asset base 0:12:53.080 --> 0:12:57.040 has actually grown about thirty percent overall. Our revenues are 0:12:57.080 --> 0:13:01.640 also up about thirty seven percent. As we see customer growth. 0:13:01.679 --> 0:13:04.200 We have five percent more customers today than we did 0:13:04.240 --> 0:13:07.360 three years ago, and they're using ten percent more energy. 0:13:08.440 --> 0:13:11.960 In terms of the total return opportunity for the stock 0:13:12.040 --> 0:13:14.320 based on the earnings per share. I mean, you guys 0:13:14.360 --> 0:13:18.280 have been beaten up to some extent because of worries 0:13:18.320 --> 0:13:22.880 over the things that we mentioned. Where do you hint from? 0:13:23.280 --> 0:13:25.360 What's your message to investors at this point? 0:13:26.160 --> 0:13:28.920 You know, we're committed to growing at five to seven percent. 0:13:29.080 --> 0:13:33.400 We've been leaders actually in addressing wildfire. While one can 0:13:33.480 --> 0:13:37.280 never predict what will happen, we've invested tremendously in reducing 0:13:37.320 --> 0:13:40.240 those risks. And again are committed to the five percent 0:13:40.320 --> 0:13:41.599 earnings growth projectory. 0:13:42.240 --> 0:13:44.719 And when you look at expectations for twenty twenty four 0:13:44.760 --> 0:13:47.760 and even beyond, looking at some of the energy transition 0:13:48.840 --> 0:13:50.800 mission there or goals that you guys have in the 0:13:50.800 --> 0:13:53.200 state of Oregon and really broadly around the world has 0:13:53.280 --> 0:13:55.960 laid out, how does that How does twenty twenty four 0:13:56.440 --> 0:13:57.800 look for your business? 0:13:58.960 --> 0:14:01.160 You know, twenty twenty four looks really good. We actually 0:14:01.160 --> 0:14:05.000 will see revenues probably about fourteen to fifteen percent higher 0:14:05.400 --> 0:14:08.600 year on years we turn into twenty twenty four. I'd 0:14:08.679 --> 0:14:11.600 also say that we're focused on meeting our customers' needs, 0:14:11.640 --> 0:14:16.200 whereas the largest semiconductors and global manufacturers to small startups 0:14:16.240 --> 0:14:20.120 and over two million residential customers who are focused on 0:14:20.160 --> 0:14:23.520 the clean energy transformation and ensuring that we do so 0:14:23.640 --> 0:14:25.000 with a smart integrated grid. 0:14:25.400 --> 0:14:28.000 Yeah, as we make that transition, I mean, overall the 0:14:28.080 --> 0:14:31.760 grids in the United States, are they prepared for all this? 0:14:32.120 --> 0:14:36.720 And what sort of infrastructure upgrades do they need? And 0:14:37.560 --> 0:14:39.480 you know, are you getting any help from the Biden 0:14:39.520 --> 0:14:40.840 administration on that front. 0:14:42.280 --> 0:14:45.880 So we've been investing in grid technologies as well as 0:14:45.920 --> 0:14:48.920 infrastructure for a long time, where the fourth largest electric 0:14:49.000 --> 0:14:51.920 vehicle market is an example, and have been thinking about 0:14:51.960 --> 0:14:56.520 those new technologies for years. From the Biden administration, We're 0:14:56.680 --> 0:15:00.760 very fortunate to have received several very significant grand one 0:15:00.800 --> 0:15:04.520 in particular around technology is a partnership with Nvidia and 0:15:04.640 --> 0:15:07.920 the startup Utili Data, the three of us coming together 0:15:08.040 --> 0:15:12.920 and bringing our unique capabilities to deliver for customers, to 0:15:13.040 --> 0:15:17.160 grow earnings, and to ensure really a solid clean energy 0:15:17.200 --> 0:15:19.760 future is attainable in a very short period of time. 0:15:20.240 --> 0:15:22.720 That sounds like the intersection of artificial. 0:15:22.680 --> 0:15:26.480 Bringing an AI. It's everything. I well, I guess this 0:15:26.600 --> 0:15:29.360 is my question, Maria. We've been talking about this transition 0:15:29.680 --> 0:15:32.040 and we've seen some things happen. I guess are you 0:15:32.240 --> 0:15:34.640 surprised with where we are going into twenty twenty four, 0:15:34.720 --> 0:15:37.760 with how quickly or slowly things have evolved? And do 0:15:37.800 --> 0:15:40.600 you expect that to kind of pick up in the 0:15:40.640 --> 0:15:41.200 coming years. 0:15:42.120 --> 0:15:45.520 You know, it's interesting. We're very optimistic about the future. 0:15:45.520 --> 0:15:48.080 I mean, when we come together in partnership, we're able 0:15:48.120 --> 0:15:51.640 to do great things. And the acceleration of clean energy 0:15:52.080 --> 0:15:55.680 has been remarkable not only for our company but across 0:15:55.680 --> 0:15:59.040 the entire United States and really globally. But we'll see 0:15:59.080 --> 0:16:01.960 coming out of There's no question that this will continue 0:16:01.960 --> 0:16:05.440 to accelerate and then we'll work together on new technologies. 0:16:05.680 --> 0:16:08.600 One of the other grants that we received was part 0:16:08.640 --> 0:16:12.320 of the Northwest Hydrogen a billion dollars to invest in hydrogen. 0:16:12.600 --> 0:16:14.640 And then we also have received two hundred and fifty 0:16:14.640 --> 0:16:17.920 million dollars on a consortium with the Confederated Tribes of 0:16:17.920 --> 0:16:20.880 the Warm Springs where we have worked together with them 0:16:21.200 --> 0:16:25.840 co owning a four hundred and fifty megawatt facility hydro 0:16:26.000 --> 0:16:28.640 power that we will now be able to increase the 0:16:28.720 --> 0:16:32.040 transmission with a two hundred and fifty million dollars grant 0:16:32.480 --> 0:16:36.120 enabling further renewable energy development on the reservation for the 0:16:36.160 --> 0:16:40.800 benefit of the future employment of the tribes as well 0:16:40.840 --> 0:16:42.800 as renewable energy across the state. 0:16:43.120 --> 0:16:46.320 Is climate change the far and away the biggest risk 0:16:46.480 --> 0:16:48.960 or that you face in the future. 0:16:50.240 --> 0:16:52.160 Oh, I think we were facing a lot of risk 0:16:52.200 --> 0:16:55.320 as we go through a transformation. Clearly, we're using technologies, 0:16:55.360 --> 0:16:58.720 we're changing at a pace that is unusual for utilities 0:16:58.760 --> 0:17:02.600 but very exciting, and so as we manage everything from 0:17:02.920 --> 0:17:07.560 a changing and warming climate to changing expectations by customers 0:17:07.920 --> 0:17:11.879 to new technologies at what ares Managing risks is also 0:17:11.960 --> 0:17:13.160 managing opportunities. 0:17:13.640 --> 0:17:17.119 Ria Pleasure, Thanks for stopping by. Appreciate it. Maria Poulp, 0:17:17.160 --> 0:17:21.320 the CEO of a Portnam General Electric, the ticker symbol 0:17:21.359 --> 0:17:24.000 por and as they look at it right now among 0:17:24.000 --> 0:17:27.960 the analysts, seven buys, five holes, and zero sales. The 0:17:28.160 --> 0:17:31.480 average price target for the stock, according to data compiled 0:17:31.480 --> 0:17:34.320 by Bloomberg, forty eight dollars per Sure. 0:17:34.280 --> 0:17:37.439 Just recently got upgraded this week over at Barclays talking 0:17:37.480 --> 0:17:41.320 about the upside and despite it being a wildfire stock, 0:17:41.400 --> 0:17:44.600 they kind of point out that we're exiting wildfire season, 0:17:44.640 --> 0:17:46.919 and as someone who's spent the first eighteen years of 0:17:46.920 --> 0:17:50.000 my life in California, were season is the thing. 0:17:50.520 --> 0:17:53.040 You're listening to The tape cats a our live program, 0:17:53.080 --> 0:17:57.040 Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, 0:17:57.200 --> 0:18:00.320 the tune in app, Bloomberg dot Com, and the Bloomberg Business. 0:18:00.600 --> 0:18:03.440 You can also listen live on Amazon Alexa from our 0:18:03.440 --> 0:18:08.399 flagship New York station, Just say Alexa, play Bloomberg eleven thirty. 0:18:10.160 --> 0:18:13.879 Let's switch to fixed income right now. Alex Batrand, our 0:18:13.920 --> 0:18:18.440 next guest, the director of Fixed Income at Rockefeller Asset Management. 0:18:18.760 --> 0:18:22.119 I missed out on five percent, But is what are 0:18:22.119 --> 0:18:25.240 we looking at four forty one or three ninety two 0:18:25.320 --> 0:18:27.680 right now in the ten are those screaming buys? 0:18:27.920 --> 0:18:30.800 I mean three ninety two is the new five percent? 0:18:30.920 --> 0:18:31.080 Right? 0:18:31.160 --> 0:18:33.359 Isn't that how we we shift? 0:18:33.440 --> 0:18:36.879 And if you want spicy and not sleepy into the 0:18:37.040 --> 0:18:39.920 end of the year, that is what we have right now. 0:18:40.000 --> 0:18:44.800 Quite clearly, rates drive in the market. The FED FOMC. J. 0:18:45.040 --> 0:18:48.960 Powell Williams happy to unpack that, making it fun for 0:18:49.080 --> 0:18:49.879 us into your act. 0:18:50.040 --> 0:18:52.439 With all That'speiag and Williams today, I mean, how do 0:18:52.480 --> 0:18:56.280 you set strategy with all these different narratives out there? 0:18:56.480 --> 0:18:56.680 Yeah? 0:18:56.680 --> 0:18:57.720 Absolutely great question. 0:18:57.760 --> 0:19:00.919 I mean, we are long term investors have said for 0:19:01.000 --> 0:19:03.399 quite some time as we think about what was driving 0:19:03.400 --> 0:19:05.760 markets in twenty twenty three, it was the rate story 0:19:06.200 --> 0:19:08.879 driving Muni's driving Corporus in twenty twenty four. That is 0:19:08.920 --> 0:19:12.359 going to be no different from here. The message is 0:19:12.480 --> 0:19:16.520 quite clear this week from the FED, even with Williams today. 0:19:16.920 --> 0:19:19.600 Williams came in and tried to walk back some of 0:19:19.640 --> 0:19:24.280 this dubvish interpretation of what was a dubvish meeting. Three 0:19:24.359 --> 0:19:26.919 cuts instead of two. Many people were caught off guards 0:19:26.920 --> 0:19:27.280 by that. 0:19:27.840 --> 0:19:30.240 The view from me, he was walking it back at 0:19:30.240 --> 0:19:34.040 the instructions of mister Powell. He was walking in the 0:19:34.119 --> 0:19:35.119 instructions from. 0:19:35.160 --> 0:19:36.959 Someone or he's a loose canon. 0:19:37.080 --> 0:19:39.240 Whether that is the case is not for us to 0:19:39.320 --> 0:19:42.960 necessarily try to decide. But if you unpack what Williams 0:19:43.080 --> 0:19:46.000 said is he said that we are not talking about 0:19:46.040 --> 0:19:49.720 cuts right now. That doesn't mean that they're not talking 0:19:49.760 --> 0:19:50.200 about cuts. 0:19:50.200 --> 0:19:51.280 So when you look at the summary of. 0:19:51.280 --> 0:19:54.000 Economic projections, the dot pot, what does it tell us? 0:19:54.160 --> 0:19:56.320 It tells us three cuts, doesn't tell us when. And 0:19:56.359 --> 0:19:58.040 so the market feels like it got a little bit 0:19:58.040 --> 0:20:01.800 of itself pricing in sick. Some people calling for March, 0:20:01.840 --> 0:20:05.320 some people calling for June. What the FED is telling 0:20:05.400 --> 0:20:08.160 us is they are comfortable with this level of employment. 0:20:08.520 --> 0:20:11.560 But how how independent will the FED be in an 0:20:11.560 --> 0:20:14.720 election year, in a year where there's expectations that looking 0:20:14.760 --> 0:20:15.040 at the. 0:20:14.960 --> 0:20:16.120 World, Oh, it's that fantasy. 0:20:16.200 --> 0:20:19.200 I mean, well, listen, we are here to think about 0:20:19.280 --> 0:20:24.399 market volatility relative value. I can have many cocktail discussions 0:20:24.440 --> 0:20:27.639 around the independence of the FED. That is a fun 0:20:27.800 --> 0:20:31.440 topic to really go down a rabbit hole. Or maybe 0:20:31.560 --> 0:20:34.120 Abigail mentioned Twitter. I'm sure there's plenty of things there. 0:20:34.480 --> 0:20:38.120 Our goal simply is, to your point, John three ninety two, 0:20:38.240 --> 0:20:39.960 relative value or not fair value. 0:20:40.040 --> 0:20:42.720 And what we start to look at is where do we. 0:20:42.680 --> 0:20:45.320 See the trend line over the next three months, six months, 0:20:45.560 --> 0:20:49.320 twelve months across the rates market? And then most importantly, 0:20:49.600 --> 0:20:51.639 how is that going to impact a municipal market on 0:20:51.680 --> 0:20:52.639 a go forward basis? 0:20:53.000 --> 0:20:56.159 How is it going to be impact market on a 0:20:56.200 --> 0:20:56.760 EKO forward? 0:20:56.960 --> 0:20:59.360 Thank you for letting me continue that. I think from 0:20:59.359 --> 0:21:03.639 our perspective it's quite simple. Ratios continue to matter here. 0:21:04.119 --> 0:21:07.440 With this move lower in rates, you have a tremendous 0:21:07.480 --> 0:21:10.359 amount of demand that's come back into the market. So 0:21:10.440 --> 0:21:12.639 we look at rates, we look at technical supply and 0:21:12.680 --> 0:21:16.800 demand supply driven by new issuers stepping into the market, 0:21:17.119 --> 0:21:20.679 supply driven by whether retail is a net buyer net seller, 0:21:21.040 --> 0:21:23.159 retail is stepped back in there a net buyer. 0:21:23.480 --> 0:21:26.119 Tangential to that? Can I just ask go quick with 0:21:26.440 --> 0:21:31.560 the city group story dropping of their municipal department, how 0:21:31.720 --> 0:21:35.040 looney is the municipal market getting when you take into 0:21:35.080 --> 0:21:38.200 context the whole ken Paxton, Texas thing. 0:21:38.600 --> 0:21:42.159 Another key risk factor that we really think about is 0:21:42.200 --> 0:21:45.919 liquidity dynamics in the municipal market. What you've seen since 0:21:46.080 --> 0:21:52.080 my early days PREGFC till now is this consolidation of 0:21:53.520 --> 0:21:57.440 desks across the street. When we look at that as 0:21:57.480 --> 0:22:00.800 the dealer community shrinks, it is a really fortunate thing 0:22:01.000 --> 0:22:05.320 for the UNI market. For investors. Liquidity dynamics change. There 0:22:05.400 --> 0:22:09.040 is more friction in those periods of mentioning technicals where 0:22:09.040 --> 0:22:12.280 there are outflow cycles and you have fewer people stepping 0:22:12.359 --> 0:22:15.280 in to provide liquidity. It can create some more challenges 0:22:15.320 --> 0:22:17.640 for those who need liquidity. It can create a lot 0:22:17.680 --> 0:22:20.520 more opportunities for those who are looking to be the 0:22:20.560 --> 0:22:23.240 source of liquidity. So while we don't like to see it, 0:22:23.240 --> 0:22:27.720 it's looking through that and really emphasizing managing the liquidity. 0:22:27.560 --> 0:22:30.320 For a new homeowner like Bailey. It's just like probably 0:22:30.320 --> 0:22:32.560 means is taxes are going to go up at some point. 0:22:32.640 --> 0:22:35.600 I mean it's right if you're having trouble doing these 0:22:35.640 --> 0:22:39.920 deals or having an underwriter and the market is impacted 0:22:39.920 --> 0:22:42.639