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Speaker 2: No one better than Anastasia Amroso, chief investment strategist at ICAP,
Speaker 2: who was trumpeting large cap growth participate when it was
Speaker 2: a very lonely call. Let's recapitulate right now, I'm hearing
Speaker 2: people come over to the Amoroso side. Is it still
Speaker 2: large cap growth in tech? Look?
Speaker 3: I think so. I think back in March we were
Speaker 3: talking about the sell off being temporary, and of course
Speaker 3: you know you were now in late May and here
Speaker 3: we are. The SAP is up, and actually we talked
Speaker 3: about software, and software is up. AI software in particular
Speaker 3: is up about twelve percent for the year. So yes,
Speaker 3: I think the reasons are still plentiful to continue to
Speaker 3: stick with stocks. And you know, Tom, one of the
Speaker 3: things you have to do is you'll have to look
Speaker 3: at the economy. And while the sentiment around the economy
Speaker 3: fell apart, the hard economic data never did so. As
Speaker 3: a result, we're still looking at two point three percent
Speaker 3: GDP growth this quarter when everybody was worried about the
Speaker 3: tariff impact. So that's the first thing. The second thing
Speaker 3: is the determination you just heard from Peter Navarro to
Speaker 3: cut those deals and continue to negotiate is absolutely there.
Speaker 3: So as long as that's the drum beat, then I
Speaker 3: think we have to discard any sort of data that
Speaker 3: goes against that. And then the last thing I would say,
Speaker 3: tom you know, tomorrow we get the core PC inflation report,
Speaker 3: which is projected to be about two and a half percent,
Speaker 3: and whether it's oil prices that are lower, whether it's
Speaker 3: wages that are lower, all of that is supportive. So
Speaker 3: I still think investors are not tapped out. It's not
Speaker 3: max bullish by any means. So I think we add here.
Speaker 2: I have been brought up the three point ex trillion
Speaker 2: of cash Paul out there.
Speaker 4: Yep, Yes, it's always been out there. I mean earlier
Speaker 4: this year it was out of the US, out of cyclicals,
Speaker 4: out of tech. Now it seems to be if I
Speaker 4: look at the S and P five hundred, if I
Speaker 4: look at nastacy, it seems to be that that trade's
Speaker 4: getting reverse ship hereople coming investments, coming back to the US,
Speaker 4: back into cyclicals, back into tech. Was it just a
Speaker 4: what was that?
Speaker 3: Oh, there's a lot of discussion around that. And first
Speaker 3: of all, the month of May has all been about
Speaker 3: these star reversals back into the US tech and back
Speaker 3: into the US and back into cyclicals. But if you
Speaker 3: actually look at the performance here to date, it's the
Speaker 3: defensive sectors like utilities, for example, that lead the SMP.
Speaker 3: They're up about five or six percent. The semiconductors, for example,
Speaker 3: are down about five to six percent. So I don't
Speaker 3: think it's actually too late for this rotation trade. And look,
Speaker 3: we were never in the camp of the US exceptionalism
Speaker 3: being over, because what's not over, for example, is the
Speaker 3: fact that we have one of the most constructive tax
Speaker 3: policies relative to our developed market peers. The fact that
Speaker 3: the corporate tax rate in the US is twenty one
Speaker 3: percent and with some write offs, maybe is the effective
Speaker 3: one is even eighteen percent. That is a very constructive
Speaker 3: environment to do business in the United States, and obviously
Speaker 3: that's what the administration is trying to foster through terror
Speaker 3: policy as well.
Speaker 4: Do we have to bring the evaluation discussion back on
Speaker 4: the table because boy, when the market's sold off, a
Speaker 4: lot of folks are saying, wait, eighteen times earnings, I'm
Speaker 4: going to go in and buy this thing. But now
Speaker 4: we're back, you know above twenty times, How do you
Speaker 4: think about earnings? Because there still may be some earnings risk.
Speaker 3: In this market, right, So a few weeks ago we
Speaker 3: sort of had when we didn't know what is likely
Speaker 3: to happen with terrorists, we sort of had this binary risk.
Speaker 3: We either have to price in a recession and therefore
Speaker 3: recession or earnings, which could have taken us well, it
Speaker 3: has taken us as low as five thousand, but could
Speaker 3: have taken us lower if we also had to assign
Speaker 3: a recession in multiple. Now we don't have to assign
Speaker 3: a recession in multiple, and we actually have to focus
Speaker 3: on the earnings not only this year but next year,
Speaker 3: which are expected to be around three hundred and seven dollars.
Speaker 3: So if you apply the existing multiple to that, you
Speaker 3: actually do get north of six thousand on the S
Speaker 3: and P five hundred. And that's why to Tom's point,
Speaker 3: I say, large cap stocks are certainly worth staying with.
Speaker 2: What does free cash flow look like? In use of cash?
Speaker 2: I mean back when you were lonely and correct. The
Speaker 2: answer is the free cash flow came in and I'm
Speaker 2: hearing a lot of fancy Well, it's not going to
Speaker 2: be this first second derivative, Da da da da da.
Speaker 2: Do you see sustained free cash flow by the market leaders?
Speaker 3: I mean, look, I do, and the use of free
Speaker 3: cash flow I think certainly would benefit the share repurchases
Speaker 3: and buybacks, and Tom, that's what we're seeing in the market.
Speaker 3: We actually have some of the record authorizations for corporate
Speaker 3: buybacks and that is such a strong presence in the
Speaker 3: market as well, which is why I say market participants
Speaker 3: are not tapped out. It's individual investors, it's hedge funds,
Speaker 3: it's CTAs, but it's also corporate is buying back those shares. Look,
Speaker 3: the beauty of the setup, Tom, is a corporate margins
Speaker 3: are in your highs and so there's a lot of
Speaker 3: room to absorb the potential negative impact of tariffs.
Speaker 2: Just quickly here, how lonely do you feel now? Is
Speaker 2: everybody in the AMRO support I think it's sort of
Speaker 2: a pretty lonely call. There's a lot of fear out there, right,
Speaker 2: you know.
Speaker 3: I still think there's a degree of fear out there.
Speaker 3: But I'll just quote these stats you know that you know,
Speaker 3: back in April you had about sixty six percent of
Speaker 3: investors that were bearish. That is not the number today.
Speaker 3: It's probably closer to thirty percent now, couple. It's a
Speaker 3: big reversal. A couple of weeks ago you probably had
Speaker 3: only twenty percent of investors that were bullish. Today that's
Speaker 3: about thirty seven percent, But it's not fifty It's not
Speaker 3: half of the investors that we're in the bullish camp
Speaker 3: to start the year. So I think we need a
Speaker 3: few more to join the party.
Speaker 2: Don't be a stranger. Come back again to sure of
Speaker 2: visits today. Anastasia am Aroso with that capital, She's been
Speaker 2: courageous about long in the market for years.
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live
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Speaker 2: Now joining US d ives in videos not Cisco right.
Speaker 5: It's almost an insult to in video when you say
Speaker 5: look because the reality is that it's a fourth Industrial
Speaker 5: revolution and it's being led by godfather of AI, Jensen
Speaker 5: and video. There's only one chip in the world, few
Speaker 5: on this and that's why I believe four trillion and
Speaker 5: eventually five trillion is where we're going to see for in.
Speaker 2: Okay, in the ives perspectives on this page forty two
Speaker 2: risk factors. What's the risk factor for the certitude this
Speaker 2: thing's going to work out?
Speaker 5: Look, I mean when you think about China, and obviously
Speaker 5: that's all factored in here. I mean, anything that gets
Speaker 5: a little positive in terms of moves on trade and
Speaker 5: tariffs between US and China is ultimately that that to
Speaker 5: me right now, the biggest risk is just trying to
Speaker 5: and I think Jensen called it out shout across about
Speaker 5: Trump administration. You're essentially giving away the China business because
Speaker 5: of the AH twenty to Huawei, and that's the biggest risk.
Speaker 5: But tom it just comes down to, like it is
Speaker 5: Jensen and Nvidia's world. Everyone else is paying rent when
Speaker 5: it comes to AI.
Speaker 4: So what was the biggest takeaway from the earnings?
Speaker 5: Last night?
Speaker 4: It stocks up five six percent this morning, what's the
Speaker 4: street taken away from it?
Speaker 5: Was a staggering quarter in a bullish way relative to
Speaker 5: the demand. I believe right now, demands that Truman supply
Speaker 5: eight to one.
Speaker 4: You got SOPs supplying supply eight to one.
Speaker 6: Eight to one.
Speaker 4: Wow, So what where does this company go? What does
Speaker 4: Nvidia do now to kind of take advantage of that
Speaker 4: demand out there?
Speaker 5: It's when you think about autonomous robotics physical AI. Eventually
Speaker 5: keen with a robot, you know, in his in his palace.
Speaker 2: You've been talking to Mikey.
Speaker 5: Look, this is the only way it's fueled is by Nvidia.
Speaker 5: So to me, now, the AI revolution coming to Middle
Speaker 5: East sovereigns they want to be online.
Speaker 2: It's on a unit basis. They're selling these things, right,
Speaker 2: do you have a linear I mean, I got seventy
Speaker 2: seven percent up free cash flow, but these numbers we've
Speaker 2: never seen this. How do you extrapolate the unit growth
Speaker 2: into the future. Forget about price, forget about tech boys
Speaker 2: with their fancy shoes and you going out to all
Speaker 2: the conferences you go to on a unit basis? Is
Speaker 2: it a linear extrapolation?
Speaker 5: Look, it's it's unprecedent in terms of what we've seen.
Speaker 5: But to give granted, but if you look, it's almost
Speaker 5: it's linear. But to the point that right now you
Speaker 5: only have three percent of enterprises in the US that
Speaker 5: have actually even gone down the AI path. So when
Speaker 5: you think about the demand trajectory and where we ultimately
Speaker 5: see this playing out, I mean you will be on
Speaker 5: a trajector to ten dollars today.
Speaker 2: Paul knows it. Cold pract and gamble. What in God's
Speaker 2: name is shamp vellow ballsom shampoo. What are they gonna
Speaker 2: do with AI?
Speaker 5: They're gonna look at marketing penetration and customers. They're gonna
Speaker 5: look at all their data, probably seventy percent of it
Speaker 5: that they basically they have not analyzed, and they're gonna
Speaker 5: come up with eight, ten, fifteen use cases for how
Speaker 5: AI agents could be deployed. Which is bullish from Microsoft,
Speaker 5: bullish from MESSI of AI pound tier, bullish ultimately for
Speaker 5: the rest of the food chain.
Speaker 2: Well, I looked at the chart yesterday. I mean the
Speaker 2: quiet story at Q two is the moonshot in Microsoft
Speaker 2: maybe record highs this morning, yep, yep.
Speaker 4: So Nvidia expec's revenue about forty five million in forty
Speaker 4: five billion in the second fiscal quarter despite new export
Speaker 4: restrictions costing about eight billion. That's a headwind.
Speaker 5: Okay, let's just talk Apple, And there's why the stocks
Speaker 5: up Apples to Apples Street, which is say April second,
Speaker 5: you know libration, they didn't happen streets at forty eight billion, yep, okay,
Speaker 5: Apples Apples, it would have been fifty three a five
Speaker 5: billion piece. So Paul, that to me, it's when but
Speaker 5: that speaks apples to apples, and everyone recognizes, I mean
Speaker 5: you are you're looking at something that's really been unpressed
Speaker 5: and I had relative to what we're seeing with them.
Speaker 2: Can I on it?
Speaker 4: Can my chip guys do a workaround whatever the US
Speaker 4: restrictions are?
Speaker 5: Well, that's that the market's basically reading through this saying
Speaker 5: at one point you're gonna have to come to the table.
Speaker 5: Part of negotiations. When you get chips on the table,
Speaker 5: it's in video, it's Apple. When you think about trum administration,
Speaker 5: come to the table. And and that's something where there
Speaker 5: could be some work around eight billion that they've given away,
Speaker 5: maybe half of that they get back.
Speaker 2: Okay, Apple. Unfortunately the chart doesn't look like Microsoft. I
Speaker 2: got Apple right now down twenty two percent from the peak.
Speaker 2: We don't have time for the Why how does Tim
Speaker 2: Cook turn it around?
Speaker 5: I mean he this is continues to be a hall
Speaker 5: of fame moment in terms of how he's now the
Speaker 5: get moment.
Speaker 2: Come on, Paul told me to buy this thing at
Speaker 2: the beginning of the year. I'm down twenty, but not
Speaker 2: a hall of fame moment.
Speaker 5: It's a hall of fame moment relative to the China
Speaker 5: tariffs and getting around in ultimately India being the life raft.
Speaker 5: You're gonna have sixty five seventy percent of assembly coming
Speaker 5: out of India. And I think, look, no company is
Speaker 5: more caught in the storm when it comes tariffs than
Speaker 5: Cook and Cooper. Tina will be at WWDC. It's the
Speaker 5: start of that broader AI strategy. I first said that
Speaker 5: last year, No and Tom. If you take out tariffs,
Speaker 5: this is a stock that's forty to fifty dollars higher.
Speaker 5: So my view is that Cook is ten percent politician,
Speaker 5: nineteen percent CEO. He'll navigate around this. And I think
Speaker 5: we city are six months from now. The name that
Speaker 5: I think is way miss priced is Apple.
Speaker 4: Elon's going back to work. It seems like, what do
Speaker 4: you expect it in the next six six months until.
Speaker 5: I mean the dark chapter is over right, and and
Speaker 5: I think it's bullet because now the autonomous and robotics
Speaker 5: feature is here. And ultimately, look this, it was a
Speaker 5: fork in the road moment he bet on Tasla, And
Speaker 5: now I think, even though there is still some brand
Speaker 5: damage that remains, we weave the path through to a
Speaker 5: two trillion dollar mark out for Tasla is now on
Speaker 5: the table.
Speaker 2: Lisa, if your daughter in her prom, if her date
Speaker 2: shows up in a tuxedo, that's that pink.
Speaker 7: That's the trend.
Speaker 4: Now that's what the kids are doing.
Speaker 2: The kids are doing. The kids going to show up
Speaker 2: in tuxedo with.
Speaker 7: Like no everything like bananas, pineapples, like whatever on this ser.
Speaker 2: Toxedo.
Speaker 5: Because I keep thinking, I keep waiting for the keen
Speaker 5: pink boats tie. We know, I think it's I think
Speaker 5: with AI it could be coming with.
Speaker 2: Today they said ives was here and I went with pink.
Speaker 2: But I think you look I did.
Speaker 5: It's phenomenal in the pink bow tie. I'm just I'm
Speaker 5: just saying.
Speaker 4: You know, I just give my charity yesterday you did
Speaker 4: what Yeah my tux seedo that had I had worn.
Speaker 7: In twenty years.
Speaker 6: Okay, that's why.
Speaker 2: Yeah, the difference, Paul, Paul, you would still get into
Speaker 2: the tex exactly my tuxedo from twenty years ago.
Speaker 5: It happened single best buy Apple, single best buye Here
Speaker 5: to me, it's Tesla, given the given the autonomous path,
Speaker 5: and must recommitted that continues to be front and center.
Speaker 2: You're pro. I'm an amateur. I don't buy it. I
Speaker 2: just can't get there, Paul, can you get there?
Speaker 6: I can't bet against Elon in this stock.
Speaker 4: It's just been.
Speaker 2: It's just been.
Speaker 4: It's been amazing story. And if he's back, if he's
Speaker 4: really back, that's good for that He's back.
Speaker 2: That's the way we rolled. Dan's Thank you so much.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
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Speaker 2: It is the most important interview of the day, folks,
Speaker 2: Riveting America is with Andrew Gilbert joining us. Now he's
Speaker 2: with ECP, but forget about that, far far more. Andrew
Speaker 2: Gilbert has a massive cred out of stern On Data Centers. Yep,
Speaker 2: you need to be neuutilities. I have seen the collective's
Speaker 2: amount of hot air from people that didn't take thermodynamics
Speaker 2: now is off the chart. Cut to the chase. Is
Speaker 2: retail Electric America going to pay for Microsoft or in
Speaker 2: Video's data center electric bill?
Speaker 6: Well, first, thanks for having me on.
Speaker 9: Happy to be here in really exciting time in our
Speaker 9: industry for nuts for twenty five years, no growth, and
Speaker 9: all of a sudden, we're on TV here after Nvidia earnings.
Speaker 2: It's better than me, so it works. Are we going
Speaker 2: to pay for nvidious data center?
Speaker 7: Yeah?
Speaker 6: So across across it's a great question.
Speaker 9: Across the country, regulators are trying to figure out how
Speaker 9: to make those companies pay for it, How to make Microsoft,
Speaker 9: Amazon pay for it.
Speaker 2: Confidence they will, they will, and.
Speaker 9: I think they're already finding a better way to do
Speaker 9: that in competitive markets. So regulated utilities want you and
Speaker 9: I to pay it on our content bill, But competitive
Speaker 9: markets it's different. Companies like ours invest in competitive generation
Speaker 9: and we take the risk. And I think that's the
Speaker 9: big difference between regulated areas like the southeast of the
Speaker 9: country and competitive markets like the Northeast and Texas.
Speaker 4: So how do we power all these data centers. What's
Speaker 4: the what's the path forward? Because I keep seeing Nvidia
Speaker 4: and other companies from Microsoft and that we're building, We're building,
Speaker 4: we're building, we're building. You've got to power this stuff.
Speaker 4: I mean, I watch landman, I know how the oil
Speaker 4: and gams industry works.
Speaker 2: Oh, here we go.
Speaker 5: Talk to us.
Speaker 6: How we're going to power this stuff with everything?
Speaker 2: Okay?
Speaker 9: This this is an industry that really again hasn't had
Speaker 9: much demand growth, all of a sudden has an explosion
Speaker 9: of it, and so we're going to need electricity from
Speaker 9: all sources. Gas is going to have to be a
Speaker 9: big component of it. Renewables as well, and that stuff
Speaker 9: faces challenges with with tariffs and protectionist policies, with tax
Speaker 9: credit risk on the renewable side. On the gas side,
Speaker 9: it's just industry that for a while was sort of
Speaker 9: adapting to almost no growth. So companies like ge Vernova
Speaker 9: and Siemens are ramping up production capacity, but it's not
Speaker 9: there yet, so it's going to take time.
Speaker 4: Is it a public private partnership here? What's the regulatory
Speaker 4: environment that you guys in on the financial side.
Speaker 5: Need to see?
Speaker 9: Uncertainty has been I think used a lot in the
Speaker 9: show and many shows recently. We need policy certainty. The
Speaker 9: industry is ready to make investment the investments needed the industry.
Speaker 4: What is the industry? Is it just the power industry?
Speaker 2: Is it old?
Speaker 4: Is it exceon Mobile?
Speaker 2: Is electric?
Speaker 9: It's competitive generators like Constellation, Vistra Energy Talent companies like
Speaker 9: that are the companies that going to move more quickly
Speaker 9: than regulated utilities. But regular utilities, the dominions, the southerns,
Speaker 9: they will be part of this too.
Speaker 2: Ge Vernova GV, I really don't know what it is.
Speaker 2: All I know is mister Colp's genius. I got a
Speaker 2: moonshot one fifty to four eighty five. Is that the
Speaker 2: future of your business, whether it's private you know, like
Speaker 2: your shop like ECP or public utilities boring Grammar, stock dominion.
Speaker 2: I need to divo it an increase. Is this total
Speaker 2: return of ge Fornova the future?
Speaker 9: It's all about the shortage of gas turbines. That's what's
Speaker 9: driving gev's performance and that's what we're seeing.
Speaker 2: Yeah, but guess turbines aren't spinning windmules going around. Don't
Speaker 2: give me this renewable energy. Song and dance is traditional energy.
Speaker 2: Dare I say coal going to power Microsoft's need for
Speaker 2: the fourteenth data center.
Speaker 9: Colon not Cole will survive a bit longer, but it's
Speaker 9: declining and that's not going to change. Gas has really changed.
Speaker 9: Gas has been the biggest kind of placement of coal,
Speaker 9: and that's going to accelerate because data centers need twenty
Speaker 9: four to seven electricity. Wind in solar don't provide that,
Speaker 9: but wind in solar are cheap and that they can
Speaker 9: be constructed quickly. So we need all of it to
Speaker 9: meet this challenge. You can't do it with one feel source.
Speaker 2: See that.
Speaker 4: That's what I've understood.
Speaker 1: You got to have it all.
Speaker 4: Talk to us about nuclear I like the modular nuclear things.
Speaker 4: Pop that baby right next to a data center. Let
Speaker 4: it power it is that realistic?
Speaker 9: Well, if you're willing to pay I don't know, seven
Speaker 9: times the price of gas, maybe really and we think
Speaker 9: it will be a factor that cost will come down
Speaker 9: over time, but it's not ready two years from now.
Speaker 9: It's probably ten years from now.
Speaker 2: Man, I thought that was a cool, Well, this is fascining.
Speaker 2: He's gonna be with us for the next four hours.
Speaker 2: Andrew Gilbert with us. He's partner at ECP. We've been
Speaker 2: dying to do this. Palls in the meeting at three am.
Speaker 2: When are we going to do data centers? We're doing
Speaker 2: it right now. Are the tech companies open or are
Speaker 2: they opaque about their plan? It's like they're like, you know,
Speaker 2: we have to keep our image jump. If you know,
Speaker 2: Cooper Tino, they're out there wearing sneakers and you know,
Speaker 2: you know they're Lulu Lemon and all that. Are they
Speaker 2: Are they transparent about their electrical demand needs?
Speaker 6: Well, what's we mentioned uncertainty.
Speaker 9: What's certain is the top five or six companies are
Speaker 9: going to spend four hundred million dollars a year on
Speaker 9: this stuff. And that's good and that's going to drive
Speaker 9: electricity demand growth.
Speaker 6: Yes, per year.
Speaker 9: On the on the opacity, sure, it's hard to get
Speaker 9: projects connected. So if you're a meta and you have
Speaker 9: a two gigawatt need, you're going to apply for projects
Speaker 9: in different parts of each market and hope that one
Speaker 9: of them kind of gets service, gets connected. So you've
Speaker 9: got to make sure. You've got to have contingency plans.
Speaker 9: So I think they're doing some of that. I think
Speaker 9: they're becoming more transparent.
Speaker 4: You're thirty eight years old, dude, how did you You
Speaker 4: guys are doing some serious stuff at ECPs. What's the
Speaker 4: focus of what you guys are doing. You're investing equity
Speaker 4: credit for power generation? Where's the where's the next five years?
Speaker 9: As I mentioned before, this industry was even the electricity
Speaker 9: I think is the most exciting commodity in the world.
Speaker 6: Nobody cared about it three years ago.
Speaker 2: I've seen you at a bar. The whole bar goes
Speaker 2: to sleep when you start talking gigawatts.
Speaker 6: But that is our focus, and it's an industry all
Speaker 6: of a sudden is growing.
Speaker 4: Is this an administration that wants to support smart energy development,
Speaker 4: whether it's fossil fuels or green I hope.
Speaker 2: So. Okay, how'd you react when Spain went dark? To
Speaker 2: me the heart of the matter. You know, I did
Speaker 2: a little bit of the act. Yes, I survived thermodynamics, folks,
Speaker 2: not quantum mechanics. But that's a different story. Okay, great
Speaker 2: Spain goes dark because of the grid and the rap is.
Speaker 2: I'm speaking out of turn, folks, a bunch of touchy
Speaker 2: feely theory. How does America avoid apearch black Spain for
Speaker 2: two days?
Speaker 9: I think it's about paying and compensating generators for reliability.
Speaker 9: A big challenge in the electricity market is the capacity
Speaker 9: that's not needed most of the time, but is needed
Speaker 9: in that five percent scenario. And you've got to make
Speaker 9: sure those those units are compensated, and they're starting.
Speaker 2: To be and honor Dan Fuss, Boston, Looma's sales. Can
Speaker 2: Quebec Hydro come to the rescue. Can the Canadians be
Speaker 2: a data center conduit to keep us in or is
Speaker 2: it just too far to get it to some data
Speaker 2: center in French Hills, Arkansas?
Speaker 9: They need they need it up there too, need it
Speaker 9: up there up there, especially during the winter. So it's
Speaker 9: it's not twenty four to seven reliable type type generation,
Speaker 9: which is what we need now.
Speaker 2: Lisa emails in, should I put solar panels on my
Speaker 2: garage roof?
Speaker 9: Maybe maybe losing that tax credit soon to do that
Speaker 9: so it could get a little bit more expensive.
Speaker 2: Should we have the text credit? Yes, it's radio. You
Speaker 2: got to talk.
Speaker 4: What's the I mean, just real quickly, what's the what's
Speaker 4: the next investment you guys want to make? Where do
Speaker 4: you want to put capital for your Where do you
Speaker 4: want to put your client's capital?
Speaker 6: Today it's it's powering data centers.
Speaker 9: So it's partnering with the biggest companies in the world
Speaker 9: to supply these needs and to make sure that rate
Speaker 9: payers aren't paying for it so it doesn't show up
Speaker 9: on our electricity bills.
Speaker 2: Unfair question. Final question, Andrew Gilbert, which traditional utility has
Speaker 2: best practices for the future.
Speaker 6: I think what.
Speaker 9: Some of the western utilities are doing in terms of
Speaker 9: hardening and the efforts they're making around wildfire prevention is excellent.
Speaker 9: It's a huge challenge they face to keep that, to
Speaker 9: keep the wire safe, to keep people safe, and I
Speaker 9: think they're doing a fantastic job turning those businesses around.
Speaker 2: Don't be strange.
Speaker 6: Yeah, I would love to come back.
Speaker 2: Do you pay the congestion tax? Or who figure out
Speaker 2: get around that? It's tough. It's tough, absolutely superb But folks,
Speaker 2: I hope you love this. Somebody said, Lisa or Paul
Speaker 2: came to the rescue and so get some geek on
Speaker 2: all the data center elector stuff. Andrew Gilbert, did you
Speaker 2: do take thermodynamics?
Speaker 10: And I did not.
Speaker 6: I'm not bright enough for that stuff.
Speaker 2: That's all.
Speaker 4: He's a banker.
Speaker 2: Andrew Gilbert, thank you so much. With ECP, we'll do
Speaker 2: This again is the story, huge story.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
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Speaker 2: We are honored to bring you the nation's expert in
Speaker 2: civics or textbooks are absolutely foundational. Wendy Schiller is professor
Speaker 2: at Brown University, the Tubyne Center and such. Wendy, so
Speaker 2: honored to have you here. The document is incredibly detailed
Speaker 2: for a hack like me. Halfway through on page twenty
Speaker 2: five discussion, they go right to the Shiller matter. They
Speaker 2: go right back to seventeen eighty eight, James Madison, Federalists
Speaker 2: number forty eight. Where's the legislature? Whatever you believe in, folks,
Speaker 2: whatever the issue is, pro Trump, anti Trump, etc. Wendy Schiller,
Speaker 2: where is the legislature in this tariff battle?
Speaker 10: Well, it's fascinating that the court, this sort of structure
Speaker 10: for tariff courts, has now intervened and said these are illegal.
Speaker 10: You would have thought the Congress with you know, tariffs
Speaker 10: are import taxes. Congress, particularly the House of Representatives have
Speaker 10: a constitutional authority to generate revenue and to authorize spending.
Speaker 10: Only the House can initiate that, and so they do
Speaker 10: have jurisdiction over tariffs. And the president can suspend the rules,
Speaker 10: you know, indefinitely if he so chooses. But the idea
Speaker 10: was that this is just for an emergency and that
Speaker 10: the power really rests with Congress. But the Republican dominated
Speaker 10: House and Senate has chos and to let the president
Speaker 10: extend this authority literally.
Speaker 8: Chosen to do that.
Speaker 10: They could have repriked it earlier this year, but they didn't.
Speaker 10: So this is really fascinating that now the court that
Speaker 10: is part of the trade, international trade and domestic trade
Speaker 10: system has said no, these are illegal. Where is Congress?
Speaker 2: What will the appeal process looked like? Peter Navarro with
Speaker 2: this year in an hour and a half from sixteen
Speaker 2: hundred Pennsylvania Avenue Professor Schuler, Navarro's going to be apoplectic
Speaker 2: over this. Who does the Trump administration appeal to? Who
Speaker 2: are those guys?
Speaker 10: Well, that's the big question mark, I mean everything. This
Speaker 10: is sort of an embedded government structure. So you know,
Speaker 10: when you think about the final word, who has the
Speaker 10: final word? And the Trump administration is not that interested
Speaker 10: in any other structure in the American piblical system having
Speaker 10: of power over them.
Speaker 2: You know, does everything go to.
Speaker 10: The Supreme Court? And the Supreme Court is interesting to watch.
Speaker 10: We have a lot of decisions coming down in June
Speaker 10: that we can expect, and you know, where do they
Speaker 10: reign in executive power? And the important thing with the
Speaker 10: Supreme Court is to make sure this isn't about Donald Trump.
Speaker 10: This is about the balance of power in the system itself.
Speaker 10: So that's where the education on tariffs lie. In immigration,
Speaker 10: and we've seen the Court say to the President and Congress.
Speaker 10: Congress has authority to make the laws on immigration, make
Speaker 10: the laws. The president cannot just create immigration law. So
Speaker 10: is that the same thing that will be applied to tariffs.
Speaker 10: We're probably about to find out.
Speaker 4: So, Wendy, what happens in the interim here? I mean,
Speaker 4: I feel like the United States negotiating with dozens of
Speaker 4: countries over tariffs. What do I do if I'm I
Speaker 4: don't know, China, Canada, Mexico, What do I do now
Speaker 4: with this ruling?
Speaker 2: Well, I mean, when you think.
Speaker 10: About the other countries, she also think about small businesses.
Speaker 10: Rhode Island is to state with a disproportionate amount of
Speaker 10: small business owners.
Speaker 8: How do they plan? You know, are you paying the tax?
Speaker 10: Are you're not paying the attacks? And I call it
Speaker 10: attacks because it is a tax, a tariff.
Speaker 6: You know, what do you do?
Speaker 10: Do you reach your prices?
Speaker 2: Now? You know? How much do you order?
Speaker 10: What do we think about the economy? It creates and
Speaker 10: generates of course uncertainty. We saw the markets react badly
Speaker 10: to major tariffs, then they come down. Now the market
Speaker 10: is settled, and now there's continued uncertainty. So if you're
Speaker 10: Navarro and you want to make the argument that government
Speaker 10: that businesses should invest in the United States, they need
Speaker 10: a stable, consistent business environment. And right now the trumpinstration
Speaker 10: is not providing a stable and consistent business environment.
Speaker 4: How how hard do you think the Trump administration will
Speaker 4: fight this court ruling and fight for its tariff mandates.
Speaker 10: The instinct to fight comes straight from the top.
Speaker 2: Yep.
Speaker 10: Trump is a fighter and he doesn't like limits on
Speaker 10: his power. You know, he could be talked into lowering them,
Speaker 10: and he has been talked into lowering them. And so
Speaker 10: when you think about this, the president will fight for
Speaker 10: the sake of retaining executive power, and Congress has to
Speaker 10: send him a signal eventually, but they aren't acting on that. Again,
Speaker 10: when we look at this tax bill, once it's out
Speaker 10: of the way, what does Conger doud reserve itself. I
Speaker 10: don't have great expectations for Congress to reserve itself once
Speaker 10: this tax bill is done. I think the Republicans realize
Speaker 10: that's not the only thing they're gonna get done this year.
Speaker 2: And your commute across the nation. A hugely eventful Thursday
Speaker 2: with legal opinions which will brief you on a number
Speaker 2: of times. Yere across the morning. Good Morning on YouTube
Speaker 2: worldwide as well. Wendy Schiller of Brown University is with
Speaker 2: us today. Wendy, I'm just going to cherry pick here.
Speaker 2: And a gentleman from New Jersey, Samuel Alito, is on
Speaker 2: the Supreme Court. Let's assume if it's a decision of
Speaker 2: eight to one, seven to two, nine to one, whatever,
Speaker 2: ninety two, three four, Alito's leading a certain charge to
Speaker 2: support the executive branch. Describe the thinking of the people
Speaker 2: like Judge Alito, who says, wait, you three judge, Court,
Speaker 2: you can't do that. Describe Alito's federalists and Madisonian vial me.
Speaker 10: When you look at Alito and Thomas, they're different, I
Speaker 10: think in the way they vote a lot similarly a
Speaker 10: lot of the time. But Alito truly believes that the
Speaker 10: entire apparatus of the federal government is far too large
Speaker 10: and is completely inconsistent with the constitutional structure and the
Speaker 10: intent of the federal government as it was created, which
Speaker 10: was basically to protect the national defenses and allow an
Speaker 10: economy to flourish, but basically let the original thirteen colonies
Speaker 10: live the way they were. They were very different from
Speaker 10: each other when they entered into the Union. And so
Speaker 10: his argument is, nobody ever built, nobody ever intended for
Speaker 10: this to be so big, nobody wanted it to bill
Speaker 10: out this large. So I'm going to take every opportunity
Speaker 10: to basically reduce the scope of the government. And what
Speaker 10: he believes is that Congress drives the size of the
Speaker 10: federal government, and not the President, that the President executes,
Speaker 10: but that the president can in fact reduce the size
Speaker 10: of the government.
Speaker 2: This is so important, I got to squeeze it in,
Speaker 2: Professor Schuller, I look at a three judge court, Reagan, Trump,
Speaker 2: what was it? Obama? Reagan Trump Obama judges. Nobody's talking
Speaker 2: a regionalist theory here. They're just talking nuts and bolts
Speaker 2: of a nineteen seventy seven agreement. And the huge detail
Speaker 2: in their professionalism is this going to just go back
Speaker 2: to originalist theory a la Thomas and Alito and what
Speaker 2: President Trump supports.
Speaker 10: The problem for Thomas and Aldo to do that is
Speaker 10: that original theory literally in not only the Federalist papers,
Speaker 10: but the Constitution itself, is that the House controls tariff policy.
Speaker 10: That you can't just wake up in the morning and
Speaker 10: say I'm going to impost one hundred and thirty percent
Speaker 10: or forty five percent on an individual country if you're
Speaker 10: the president of the United States, only under extraordinary circumstances.
Speaker 10: And the Constitution and the founders are very clear that
Speaker 10: when you execute these powers as president in extraordinary circumstances,
Speaker 10: those circumstances have to be extraordinary. So this is the
Speaker 10: problem for Ledo on Thomason. Goes completely against their theory
Speaker 10: of originalism to put all this power and opportunity in
Speaker 10: the president's hands, and the Constitution that's quite explicit that
Speaker 10: it should rest with the Congress, particularly the House represent.
Speaker 2: I can't Imagine your day, Wendy Show, Thank you so
Speaker 2: much for being with us this morning with Brown University.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Apple, Cocklay.
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Speaker 1: flagship New York station, Just say Alexa Play Bloomberg eleven
Speaker 1: thirty Lisa Matteo.
Speaker 2: Now with the newspapers, what do you happen?
Speaker 7: All right, I'm starting with this Wall Street Journal exclusive.
Speaker 7: This is about Paramount Global. They're offering reportedly offering President
Speaker 7: Trump fifteen million dollars to settle that lawsuit he had
Speaker 7: against Paramount CBS News, But sources are telling the journal
Speaker 7: that the President feels it's not enough. He wants more
Speaker 7: than twenty five million. He also reportedly wants an apology
Speaker 7: from CBS. If you remember that lawsuit, it was it
Speaker 7: all surrounds how the network supposedly edited a sixty minutes
Speaker 7: interview with Kamala Harris to make her sound better. CBS
Speaker 7: says that's not true, but they're all also saying that
Speaker 7: the President's team has dreatened another lawsuit against CBS related
Speaker 7: to bias on its news coverage. But there's supposed to
Speaker 7: be a session today like where this is unprecedented.
Speaker 2: I mean, isn't CBS supposed to fight back? Is the news?
Speaker 4: The reason they're not fighting back is they have a
Speaker 4: planned merger with Skydance Media and they want.
Speaker 2: That to go through.
Speaker 4: They need the FCC approval and presumably there's some concerns
Speaker 4: that the government will use this suit as a reason
Speaker 4: not to approve the deal. Sherry Redstone needs the merger
Speaker 4: to go through so she can get paid out. It's
Speaker 4: as simple as that. So it's uh, you know, they'll
Speaker 4: come to something.
Speaker 2: We've seen some just point out separate from this news.
Speaker 2: We've seen resignations at CBS.
Speaker 6: Yeah, I mean, yep.
Speaker 2: There's a lot, a lot going on.
Speaker 4: There, a lot going on there, and it's all because
Speaker 4: they need to get this deal approved and get it through.
Speaker 4: So it's all about money as it just as it
Speaker 4: always is.
Speaker 7: Neclas Okay, all right, we'll take you to luxury okay,
Speaker 7: lvmh Okay. They said they could increase the price bits
Speaker 7: goods by about three percent to office at tariffs. But
Speaker 7: there are two things that they say they cannot raise
Speaker 7: a price on and that is cognac and lower priced
Speaker 7: beauty products, the lower priced end.
Speaker 2: Uh.
Speaker 7: They say things like jewelry, those high end jewelry they
Speaker 7: can withstand the price increases because their buyers can take
Speaker 7: on the price increases.
Speaker 8: But they've had a.
Speaker 7: Tough time with the alcohol sales. Apparently the Konnak Spirits
Speaker 7: division they've dipped in the past year. They're selling fewer
Speaker 7: champagne bottles on top of it too, so they're saying
Speaker 7: those are the things they can't.
Speaker 5: I don't think I've ever had.
Speaker 4: Cognac is a variety of brandy named after the Commune
Speaker 4: of Cognac, France.
Speaker 6: All right, it's not bad, Yeah, yes, Cognac.
Speaker 7: I did a little Hennessy sometimes.
Speaker 6: In the desk.
Speaker 4: It's the Hennessy Cognac, all.
Speaker 7: Right, it has and Champagne.
Speaker 2: I can't remember the name of the company now, but
Speaker 2: it's a small, secure French thing, and like one third
Speaker 2: of their business is Cognac or whatever. And it ain't happening.
Speaker 2: I mean, it's not just LV, it's overall. So they're
Speaker 2: not lowering the price of all the merch that sundry Keenes.
Speaker 7: Look at of the cognac and the spirits of the
Speaker 7: other high end jewelry and that kind of stuff.
Speaker 2: Lewis Viewton shoes too much for the prom.
Speaker 7: Yes, definitely, that was a discussions. You can't even see
Speaker 7: the feet with the dress, so don't even think about it. Next,
Speaker 7: we've been talking a lot about AI and will they
Speaker 7: replace jobs, right, so this story about salesforce kind of
Speaker 7: puts that into perspective a little bit. They said they're
Speaker 7: reducing the hiring for some roles because of its AI tools.
Speaker 7: So its CFO gave this example and she said five
Speaker 7: hundred customer service workers will be moved to different positions
Speaker 7: within the company and that'll save them about fifty million dollars.
Speaker 7: Also said they're hiring fewer engineers on top of it.
Speaker 7: They say they hope it's going to make their staff
Speaker 7: more productive. But at the same time, where they're increasing
Speaker 7: are the ranks of its salesforce. So that's where they're
Speaker 7: starting to see the difference. But we've seen it, you know,
Speaker 7: different companies like Microsoft told.
Speaker 4: Offspring number three, get to a business where you have
Speaker 4: a revenue number next to your.
Speaker 2: Name, that's it.
Speaker 4: That's my strategy, that's my advice. You know, get to
Speaker 4: a business, and so salesforce?
Speaker 2: Do you do you believe equipment? We don't have the
Speaker 2: time here, but like all these jobs are going to
Speaker 2: go away, I just don't buy it.
Speaker 4: Well, I think a lot of them are. I mean,
Speaker 4: I just think of my investment banking business. I mean,
Speaker 4: do I need three analysts staffed on a deal to
Speaker 4: draft inspect models. I don't think so.
Speaker 6: I don't think so.
Speaker 4: So I think there's gonna be an issue there.
Speaker 2: The newspaper SAIDY Lisa Matteo, thank you so much.
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