1 00:00:05,800 --> 00:00:08,720 Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm Pim Fox. 2 00:00:08,760 --> 00:00:11,440 Speaker 1: Along with my co host Lisa A. Bramowitz. Each day 3 00:00:11,480 --> 00:00:15,000 Speaker 1: we bring you the most important, noteworthy, and useful interviews 4 00:00:15,040 --> 00:00:17,520 Speaker 1: for you and your money, whether you're at the grocery 5 00:00:17,560 --> 00:00:20,560 Speaker 1: store or the trading floor. Find the Bloomberg p m 6 00:00:20,680 --> 00:00:32,000 Speaker 1: L Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com. 7 00:00:32,040 --> 00:00:36,760 Speaker 1: After the hurricanes that swept through Houston a lot of 8 00:00:36,760 --> 00:00:39,800 Speaker 1: Texas as well as Florida and Puerto Rico, there's a 9 00:00:39,880 --> 00:00:43,560 Speaker 1: question of who is going to rebuild, whether there is 10 00:00:43,720 --> 00:00:46,920 Speaker 1: enough labor to make all of these new homes, and 11 00:00:46,960 --> 00:00:49,239 Speaker 1: whether the supplies are there and here. To answer those 12 00:00:49,360 --> 00:00:52,680 Speaker 1: questions is Cheryl Palmer, President and chief executive officer of 13 00:00:52,760 --> 00:00:57,120 Speaker 1: Taylor Morrison Home Corporation based in Scottsdale, Arizona. And Cheryl, 14 00:00:57,760 --> 00:01:00,640 Speaker 1: one question that I have is a lot of people 15 00:01:00,840 --> 00:01:06,039 Speaker 1: have raised concern about rebuilding in areas that are prone 16 00:01:06,120 --> 00:01:09,800 Speaker 1: to floods should there be another hurricane. What's your view 17 00:01:09,920 --> 00:01:13,759 Speaker 1: on that and how has your company addressed that. It's 18 00:01:13,760 --> 00:01:16,840 Speaker 1: an interesting question. Um, I'll be honest, I don't share 19 00:01:16,920 --> 00:01:19,679 Speaker 1: that same concern. Um. When I look at the market, 20 00:01:19,720 --> 00:01:21,600 Speaker 1: I think if you First of all, I think, yeah, 21 00:01:21,640 --> 00:01:24,880 Speaker 1: it's hard not to recognize the event that we had 22 00:01:24,920 --> 00:01:29,920 Speaker 1: a billion gallons of water fifty inches of rain. I mean, 23 00:01:30,360 --> 00:01:32,800 Speaker 1: I think the stat is something. You know, we designed 24 00:01:32,800 --> 00:01:35,160 Speaker 1: to a hundred and five hundred deer floodplain something like 25 00:01:35,240 --> 00:01:37,800 Speaker 1: forty five thousand years. You have to go back to 26 00:01:37,840 --> 00:01:40,320 Speaker 1: find a similar This is the Houston. This is in 27 00:01:40,440 --> 00:01:43,680 Speaker 1: Houston specifically. So when I look at the you know, 28 00:01:44,080 --> 00:01:45,959 Speaker 1: I look at Houston and I look at six and 29 00:01:45,959 --> 00:01:48,920 Speaker 1: a half million people, I actually don't have concerns. I 30 00:01:48,920 --> 00:01:52,080 Speaker 1: think it's important that we rebuild this city UM as 31 00:01:52,160 --> 00:01:54,280 Speaker 1: quick as we can. And when I look at how 32 00:01:54,360 --> 00:01:57,640 Speaker 1: new construction did UM, I think one of the things 33 00:01:57,640 --> 00:02:00,800 Speaker 1: that was most surprising is, you know, our company and 34 00:02:00,880 --> 00:02:04,200 Speaker 1: our communities across Houston as well as many other new 35 00:02:04,560 --> 00:02:08,120 Speaker 1: home builders didn't have the same level of devastation that 36 00:02:08,200 --> 00:02:10,679 Speaker 1: we had in older community. So I think when you 37 00:02:10,720 --> 00:02:16,280 Speaker 1: think about building sciences and design today, engineering and kind 38 00:02:16,280 --> 00:02:19,080 Speaker 1: of the you know, the way streets are used and 39 00:02:19,160 --> 00:02:24,000 Speaker 1: pads are built up, UM, I think, you know, I 40 00:02:24,040 --> 00:02:26,600 Speaker 1: don't think you're going to see that people are UM 41 00:02:26,680 --> 00:02:28,760 Speaker 1: running from Houston. I think you'll see that they're running 42 00:02:28,800 --> 00:02:32,200 Speaker 1: to new construction. Well let's get onto the new construction. 43 00:02:32,240 --> 00:02:34,760 Speaker 1: Maybe just give people a little hint as to the 44 00:02:34,840 --> 00:02:37,200 Speaker 1: kind of areas that you are focused on. I know 45 00:02:37,280 --> 00:02:40,280 Speaker 1: you just opened door expanded your presence in the South 46 00:02:40,280 --> 00:02:44,520 Speaker 1: Carolina market. Uh, Indian Land, I believe is the location there. 47 00:02:44,680 --> 00:02:47,680 Speaker 1: Maybe just tell people a little bit about Taylor Moore. Absolutely. 48 00:02:47,800 --> 00:02:50,880 Speaker 1: We built in twenty markets across the United States. So 49 00:02:51,040 --> 00:02:54,160 Speaker 1: we do build in Texas and Texas, we build in Houston, Dallas, 50 00:02:54,200 --> 00:02:56,800 Speaker 1: and Austin. UM. We do build to your point in 51 00:02:56,800 --> 00:03:01,360 Speaker 1: the Carolinas, both in Charlotte and Raleigh. We built in Florida, UM, 52 00:03:01,440 --> 00:03:09,160 Speaker 1: and that's Naples, Sara Soda, Tampa, Orlando, UM, Colorado, Georgia, Arizona, 53 00:03:09,240 --> 00:03:11,720 Speaker 1: and then southern and northern California. So really a pretty 54 00:03:11,720 --> 00:03:14,600 Speaker 1: good fit. Print across the United States. Built about eight 55 00:03:14,639 --> 00:03:18,960 Speaker 1: thousand homes a year UM and generally UM. When I 56 00:03:19,000 --> 00:03:21,519 Speaker 1: look at the business across the portfolio, we serve a 57 00:03:21,600 --> 00:03:24,480 Speaker 1: number of consumer groups. About a third of our business 58 00:03:24,760 --> 00:03:27,360 Speaker 1: is first time buyer, a third of it is that 59 00:03:27,440 --> 00:03:29,680 Speaker 1: first second time move up, and a third about the 60 00:03:29,880 --> 00:03:33,120 Speaker 1: you know, fifty plus buyer. All kinds of products and 61 00:03:33,280 --> 00:03:37,560 Speaker 1: different consumers. Have you found that there have been labor shortages, 62 00:03:37,640 --> 00:03:41,600 Speaker 1: not enough people available to actually build the homes? Absolutely, 63 00:03:41,720 --> 00:03:43,600 Speaker 1: So what are you doing to address that and what 64 00:03:43,680 --> 00:03:47,160 Speaker 1: do you attribute the shortage to? That is a very 65 00:03:47,200 --> 00:03:50,400 Speaker 1: big and complicated question. Um, But yeah, you know, this 66 00:03:50,440 --> 00:03:55,760 Speaker 1: has been a concern well before hurricane season. UM. And 67 00:03:55,960 --> 00:03:58,440 Speaker 1: if I think about specifically, business is something we've been 68 00:03:58,440 --> 00:04:01,320 Speaker 1: talking about for years. So maybe will start on why. 69 00:04:01,400 --> 00:04:04,440 Speaker 1: I mean there's so many candidly, there's so many reasons. 70 00:04:04,480 --> 00:04:07,440 Speaker 1: But you know, we've aged out through the downturn a 71 00:04:07,600 --> 00:04:11,640 Speaker 1: good amount of the workforce. Um. If I look at 72 00:04:11,680 --> 00:04:15,640 Speaker 1: the average plumber electrician, they're in their mid fifties today. UM, 73 00:04:15,640 --> 00:04:18,320 Speaker 1: so we've aged out some real good experience. People also 74 00:04:18,520 --> 00:04:21,960 Speaker 1: left the industry during the downturn. Immigration has had an 75 00:04:22,000 --> 00:04:28,400 Speaker 1: impact on the workforce. Um. We're also not developing new 76 00:04:28,440 --> 00:04:31,839 Speaker 1: talent into our industry. I mean many of the vocational 77 00:04:31,920 --> 00:04:36,280 Speaker 1: programs went away, um through the downturn. So there's a 78 00:04:36,520 --> 00:04:39,240 Speaker 1: it's it's a long journey to kind of rebuild the workforce. 79 00:04:39,600 --> 00:04:42,920 Speaker 1: And I would say there's this cultural kind of underpinning 80 00:04:43,000 --> 00:04:46,279 Speaker 1: that people aren't aspiring to go into the trades today, 81 00:04:46,279 --> 00:04:48,920 Speaker 1: which can be a wonderful you know, really a wonderful 82 00:04:49,000 --> 00:04:52,200 Speaker 1: career because of the shortage not being new news. What 83 00:04:52,320 --> 00:04:54,359 Speaker 1: we've done is, you know, early in the year, we 84 00:04:54,440 --> 00:04:58,240 Speaker 1: actually got very aggressive in getting um new production into 85 00:04:58,279 --> 00:05:02,159 Speaker 1: the ground, stimulating sale so that we were building homes 86 00:05:02,160 --> 00:05:05,680 Speaker 1: that were sold. It really that headstart, as it turns out, 87 00:05:06,080 --> 00:05:09,560 Speaker 1: was very fortunate. Um As I look at the impacts 88 00:05:09,600 --> 00:05:11,680 Speaker 1: that the hurricanes are going to have on so many 89 00:05:11,920 --> 00:05:15,200 Speaker 1: just a couple of data points, you increased the most 90 00:05:15,240 --> 00:05:18,120 Speaker 1: recently increased the stock buy back. I believe a program 91 00:05:18,240 --> 00:05:20,520 Speaker 1: right adding a hundred million dollars and the stock is 92 00:05:20,600 --> 00:05:25,960 Speaker 1: up more than sevent so far this year. What would 93 00:05:26,000 --> 00:05:29,480 Speaker 1: you tell an investor in this particular industry? What are 94 00:05:29,480 --> 00:05:32,800 Speaker 1: the specific things you would want to know before you 95 00:05:32,880 --> 00:05:35,880 Speaker 1: make an investment, either buying you know, as as a 96 00:05:35,880 --> 00:05:39,680 Speaker 1: shareholder buying a home builder, or even as someone that 97 00:05:39,720 --> 00:05:41,800 Speaker 1: wants to make an acquisition of an entire company. How 98 00:05:41,800 --> 00:05:44,560 Speaker 1: do you measure the value? Yeah, it's a really good, 99 00:05:44,560 --> 00:05:47,120 Speaker 1: fair question. You know, I don't think there's one metric, 100 00:05:47,200 --> 00:05:49,880 Speaker 1: but I think it starts with understanding the company strategy 101 00:05:49,880 --> 00:05:54,719 Speaker 1: and methodology and how you operate the business. Um So, 102 00:05:54,920 --> 00:05:58,240 Speaker 1: when I look at kind of our core operating principles, 103 00:05:58,279 --> 00:06:02,040 Speaker 1: it's really around protecting the business through a full cycle. 104 00:06:02,080 --> 00:06:04,400 Speaker 1: When you're when you're investing in real estate, I think 105 00:06:04,400 --> 00:06:07,400 Speaker 1: there's an appreciation that this tends to be a volatile 106 00:06:07,440 --> 00:06:10,240 Speaker 1: sectors and the markets can come and go, and how 107 00:06:10,279 --> 00:06:13,760 Speaker 1: have you really prepared the organization for that? Because it's 108 00:06:13,760 --> 00:06:19,160 Speaker 1: not if, it's when and how the company can perform. 109 00:06:19,240 --> 00:06:21,719 Speaker 1: And so when we look at our strategy around core 110 00:06:21,800 --> 00:06:25,440 Speaker 1: locations and making having a true appreciation that shelters a 111 00:06:25,480 --> 00:06:28,839 Speaker 1: basic need for folks um and understanding that no matter 112 00:06:28,880 --> 00:06:30,960 Speaker 1: what the markets do, we're still going to sell homes 113 00:06:31,200 --> 00:06:33,920 Speaker 1: compared to, for example, operating on the fringe where you 114 00:06:34,000 --> 00:06:37,400 Speaker 1: might have great run ups UM. So you start looking 115 00:06:37,440 --> 00:06:40,479 Speaker 1: at the different strategies that are deployed. But then it's 116 00:06:40,480 --> 00:06:45,000 Speaker 1: really about return um growth. Is it for growth sake? 117 00:06:45,040 --> 00:06:47,960 Speaker 1: Are you in the right places long term that can 118 00:06:48,000 --> 00:06:51,440 Speaker 1: sustain different market impacts? Well, talking about that in particular, 119 00:06:51,480 --> 00:06:53,600 Speaker 1: do you think that there are any large US cities 120 00:06:53,680 --> 00:06:57,560 Speaker 1: that are getting close to saturation that are seeming a 121 00:06:57,640 --> 00:07:01,560 Speaker 1: little bit overbuilt at this point? Now, you know, as 122 00:07:01,680 --> 00:07:04,480 Speaker 1: long as I've been doing this, you always wonder where 123 00:07:04,520 --> 00:07:06,400 Speaker 1: that next piece of land is going to come from, 124 00:07:07,000 --> 00:07:11,280 Speaker 1: but it does kind of regenerate and revigorate. And so no, 125 00:07:11,480 --> 00:07:14,840 Speaker 1: as I mean you think about what really um impacts 126 00:07:14,920 --> 00:07:17,800 Speaker 1: the home building industry, it's about job growth. It's about 127 00:07:17,840 --> 00:07:21,800 Speaker 1: some of those very basic services, but really mostly around jobs. 128 00:07:21,840 --> 00:07:23,880 Speaker 1: And when you look at your top twenty markets across 129 00:07:23,880 --> 00:07:26,920 Speaker 1: the US, I would argue just exactly the opposite that 130 00:07:27,080 --> 00:07:30,240 Speaker 1: I think those opportunities are becoming more plentiful. But how 131 00:07:30,360 --> 00:07:34,080 Speaker 1: we the creativity we use in securing new land that 132 00:07:34,240 --> 00:07:37,000 Speaker 1: meet the needs of our consumers at affordable prices is key. 133 00:07:37,440 --> 00:07:39,720 Speaker 1: Thank you very much for spending time with us. Cheryl 134 00:07:39,760 --> 00:07:43,600 Speaker 1: Palmer is the chief executive of Taylor Morrison Holmes. Thanks 135 00:07:43,720 --> 00:07:57,960 Speaker 1: very much, Thank you very much. Uh let's see what's 136 00:07:57,960 --> 00:07:59,600 Speaker 1: going on in the world of Netflix, and for that 137 00:07:59,760 --> 00:08:02,640 Speaker 1: we course bringing the Paul Sweeney. He is our expert 138 00:08:02,680 --> 00:08:06,160 Speaker 1: when it comes to everything internet media. He's our senior 139 00:08:06,200 --> 00:08:10,120 Speaker 1: media Internet analysts for Bloomberg Intelligence. So, Paul Sweeney, eight 140 00:08:10,200 --> 00:08:13,080 Speaker 1: billion dollars can buy you a lot of stuff, can it. Yeah, 141 00:08:13,120 --> 00:08:15,440 Speaker 1: it's gonna buy a lot of programming next year. And 142 00:08:15,480 --> 00:08:18,000 Speaker 1: that's a big jump from six billion dollars that they're 143 00:08:18,000 --> 00:08:21,480 Speaker 1: going to spend this year, uh and off balance sheet. 144 00:08:21,480 --> 00:08:24,400 Speaker 1: They have another seventeen billion dollars of long term liabilities 145 00:08:24,640 --> 00:08:27,640 Speaker 1: UM that they're contracted for, so um. You know, this 146 00:08:27,800 --> 00:08:29,600 Speaker 1: is a business. You know, it's I think from the 147 00:08:29,600 --> 00:08:32,400 Speaker 1: company's perspective, it's kind of a virtuous circle. And that is, 148 00:08:32,720 --> 00:08:36,439 Speaker 1: the more we spend on programming, the more new subscribers 149 00:08:36,760 --> 00:08:39,160 Speaker 1: we can attract, and the more those new subscribers then 150 00:08:39,240 --> 00:08:42,120 Speaker 1: generate revenue and cash flow for us, which then supports 151 00:08:42,280 --> 00:08:45,560 Speaker 1: more programming investments. So that's the business that they feel 152 00:08:45,600 --> 00:08:47,240 Speaker 1: like they're in at this moment. In over the last 153 00:08:47,280 --> 00:08:50,079 Speaker 1: four or five years, it's absolutely played out. You know. 154 00:08:50,200 --> 00:08:53,559 Speaker 1: Paul I was talking with my fellow Gadflight columnist Shira 155 00:08:53,679 --> 00:08:56,079 Speaker 1: Ovid this morning and she was saying, you know, it 156 00:08:56,200 --> 00:09:01,679 Speaker 1: seems like perhaps the underappreciated truth about Netflix is that 157 00:09:01,760 --> 00:09:06,760 Speaker 1: they're mortgaging. They're they're present for the future, and they're 158 00:09:06,840 --> 00:09:10,360 Speaker 1: going deeper and deeper into debt in order to get 159 00:09:10,440 --> 00:09:13,760 Speaker 1: more subscribers and to build out their content. But this 160 00:09:13,960 --> 00:09:16,199 Speaker 1: is this is a high risk proposition, and it's not 161 00:09:16,440 --> 00:09:19,600 Speaker 1: clear that they've reached sort of the warp speed necessary 162 00:09:20,280 --> 00:09:22,920 Speaker 1: to to make them successful over the long term. Now, well, 163 00:09:23,080 --> 00:09:25,839 Speaker 1: you know it's interesting. It's I think read Hastings and 164 00:09:25,920 --> 00:09:28,760 Speaker 1: the Netflix folks that they look at Jeff Bezos and 165 00:09:28,800 --> 00:09:31,560 Speaker 1: Amazon and they see, you know, a visionary there who 166 00:09:31,800 --> 00:09:35,839 Speaker 1: is willing to make huge long term investments based upon 167 00:09:35,960 --> 00:09:38,280 Speaker 1: what is believed as a is a great long term play, 168 00:09:38,360 --> 00:09:40,440 Speaker 1: that is e commerce. And so if you read Hastings, 169 00:09:40,480 --> 00:09:42,600 Speaker 1: you see you see yourself in a similar light, which 170 00:09:42,720 --> 00:09:46,439 Speaker 1: is uh, Internet enabled television or video of viewing is 171 00:09:46,520 --> 00:09:50,680 Speaker 1: a global opportunity. The market is clearly moving to that market, 172 00:09:50,720 --> 00:09:54,480 Speaker 1: to the over the top type of viewing. Um. Netflix 173 00:09:54,559 --> 00:09:57,959 Speaker 1: has always enjoyed first mover advantage. They've always enjoyed the 174 00:09:58,040 --> 00:10:01,280 Speaker 1: best brand name in the business. And if you do 175 00:10:01,440 --> 00:10:03,960 Speaker 1: believe in the long term opportunity here, you spend it now, 176 00:10:04,000 --> 00:10:06,319 Speaker 1: and you spend aggressively to take market share and defend 177 00:10:06,320 --> 00:10:10,480 Speaker 1: off competition. And that's clearly the strategy. But but they're 178 00:10:10,559 --> 00:10:14,400 Speaker 1: raising their prices at a time when Amazon, if you 179 00:10:14,520 --> 00:10:18,960 Speaker 1: have an Amazon Prime membership, you're also accessing their videos 180 00:10:19,080 --> 00:10:21,120 Speaker 1: for free. I put in air quotes because you're paying 181 00:10:21,160 --> 00:10:25,559 Speaker 1: for Amazon Prime. But that's that's a pretty big competitive proposition, 182 00:10:25,800 --> 00:10:28,360 Speaker 1: it is, and and I think, um, what the company 183 00:10:28,720 --> 00:10:30,880 Speaker 1: has really realized over the last really the last year 184 00:10:31,000 --> 00:10:33,120 Speaker 1: or so, I would say, is, you know, they need 185 00:10:33,360 --> 00:10:37,559 Speaker 1: to rely more on originally produced programming as opposed to 186 00:10:37,960 --> 00:10:40,400 Speaker 1: taking some of the content that's already been produced and 187 00:10:40,559 --> 00:10:42,760 Speaker 1: and viewed from the traditional media companies, whether it's a 188 00:10:42,800 --> 00:10:45,440 Speaker 1: movie or a TV series. So you see them really 189 00:10:45,480 --> 00:10:49,839 Speaker 1: stepping up in about that the eight billion dollars will 190 00:10:49,840 --> 00:10:52,000 Speaker 1: be spent on original programming, and that number they expect 191 00:10:52,000 --> 00:10:54,640 Speaker 1: to go to fifty. So it really goes to the 192 00:10:54,760 --> 00:10:56,839 Speaker 1: fact that in order they know that they have to 193 00:10:56,920 --> 00:11:01,280 Speaker 1: differentiate themselves in an increasingly competitive marketplace is from the Amazons, 194 00:11:01,280 --> 00:11:03,280 Speaker 1: from the Hulus, but also from just think about what 195 00:11:03,320 --> 00:11:05,120 Speaker 1: happened to Walt Disney Company a few weeks ago. They 196 00:11:05,120 --> 00:11:08,640 Speaker 1: announced that they are taking ESPN and the Disney channels 197 00:11:08,679 --> 00:11:12,920 Speaker 1: direct to consumer. Much like Net Netflix has offered directed 198 00:11:12,920 --> 00:11:15,160 Speaker 1: the consumers. So we're seeing a lot more competition in 199 00:11:15,240 --> 00:11:17,640 Speaker 1: the marketplace outside of the U S. There's a lot 200 00:11:17,679 --> 00:11:22,440 Speaker 1: of local competition that Netflix faces, um, but yet they 201 00:11:22,480 --> 00:11:26,199 Speaker 1: continue to put up a very strong subscriber gains, and 202 00:11:26,559 --> 00:11:29,319 Speaker 1: the company believes that the primary driver for that is 203 00:11:29,520 --> 00:11:32,720 Speaker 1: its high quality original programming, Paul, what's with the sweater? 204 00:11:33,559 --> 00:11:36,920 Speaker 1: What's with the Red Hastings, Stranger Things sweater? What is that? 205 00:11:37,200 --> 00:11:41,080 Speaker 1: Is sort of into it from Well, I think they're right. 206 00:11:41,120 --> 00:11:42,920 Speaker 1: So we put on a kind of a funny sweater 207 00:11:43,360 --> 00:11:45,280 Speaker 1: from one of the shows that that that airs on 208 00:11:45,440 --> 00:11:48,400 Speaker 1: net Netflix on the earnings conference call last night. The 209 00:11:48,520 --> 00:11:52,560 Speaker 1: video portion basically signaling that much like the Walt Disney 210 00:11:52,640 --> 00:11:55,560 Speaker 1: Company does so well, uh, they're gonna be to get 211 00:11:55,559 --> 00:11:58,319 Speaker 1: into the merchandizing business and get into the merchandizing of 212 00:11:58,440 --> 00:12:01,079 Speaker 1: some of their original content that they own and that 213 00:12:01,200 --> 00:12:03,439 Speaker 1: they can license and try to build out, you know, 214 00:12:03,920 --> 00:12:07,520 Speaker 1: different revenue streams um and we saw DreamWorks try to 215 00:12:07,559 --> 00:12:09,720 Speaker 1: do it, but really nobody does it nearly as well 216 00:12:09,760 --> 00:12:12,920 Speaker 1: as the Walt Disney Company. You keep mentioning the Disney Company, 217 00:12:12,960 --> 00:12:15,000 Speaker 1: which makes me think of ESPN, which makes me think 218 00:12:15,040 --> 00:12:18,040 Speaker 1: of the NFL controversy of late and I'm wondering if 219 00:12:18,080 --> 00:12:21,800 Speaker 1: you could just quickly touch on ratings for football games 220 00:12:21,960 --> 00:12:25,679 Speaker 1: and viewership. Has it gone down since the eruption of 221 00:12:25,920 --> 00:12:30,480 Speaker 1: the kneeling anthem controversy. Ratings over the last season and 222 00:12:30,559 --> 00:12:34,080 Speaker 1: a half in particular, have been flatted down for most 223 00:12:34,200 --> 00:12:37,000 Speaker 1: of the broadcast. Now we have so many broadcasts Sunday afternoon, 224 00:12:37,080 --> 00:12:40,960 Speaker 1: Sunday evening, Thursday evening, Monday night. Um, they all do differently, 225 00:12:41,040 --> 00:12:43,360 Speaker 1: but generally the trend has been down. And the question 226 00:12:43,480 --> 00:12:45,280 Speaker 1: is that just simply a function of what's happening in 227 00:12:45,360 --> 00:12:49,680 Speaker 1: traditional television where everybody's audience is deep declining as people 228 00:12:49,920 --> 00:12:51,960 Speaker 1: cut the court and spend more time on the internet. 229 00:12:52,240 --> 00:12:54,040 Speaker 1: Or is it something specific to the NFL? And I 230 00:12:54,080 --> 00:12:57,320 Speaker 1: think most observers I feel like there is something specific 231 00:12:57,400 --> 00:13:00,480 Speaker 1: to the NFL. The the political political z a of 232 00:13:00,679 --> 00:13:03,160 Speaker 1: the NFL and football has really been a net negative 233 00:13:03,240 --> 00:13:05,439 Speaker 1: for them and has hurt them in terms of audience. 234 00:13:05,480 --> 00:13:07,319 Speaker 1: And we kind of hear that from the players, the 235 00:13:07,400 --> 00:13:10,800 Speaker 1: owners as well as the broadcast partners. It can't be 236 00:13:10,880 --> 00:13:13,520 Speaker 1: good for Disney, but no. So the question is is 237 00:13:13,600 --> 00:13:15,800 Speaker 1: this a long term trenders this is something kind of 238 00:13:15,800 --> 00:13:18,000 Speaker 1: a bumping the road, that's something will you know? Presumably 239 00:13:18,040 --> 00:13:20,320 Speaker 1: we will pass. Thank you so much for joining us. 240 00:13:20,400 --> 00:13:23,160 Speaker 1: Always a pleasure to hear your insights. Paul Sweeney, US 241 00:13:23,240 --> 00:13:26,800 Speaker 1: Director of Research and Senior Senior Media and Internet Analyst 242 00:13:26,880 --> 00:13:32,200 Speaker 1: for Bloomberg Intelligence, talking about Netflix, NFL, all Things media, 243 00:13:44,120 --> 00:13:48,600 Speaker 1: Our topic now is gold and bank regulation. Ruth Crowle 244 00:13:48,880 --> 00:13:52,640 Speaker 1: is chief executive of the London Bullion Market Association and 245 00:13:52,960 --> 00:13:55,040 Speaker 1: she joins us now. Ruth, thank you very much for 246 00:13:55,120 --> 00:13:57,920 Speaker 1: being with us. UH. You know, one of the things 247 00:13:58,000 --> 00:14:00,679 Speaker 1: that I learned in preparing to speak with you is 248 00:14:00,920 --> 00:14:04,360 Speaker 1: that the new rules that are being set forth by 249 00:14:05,000 --> 00:14:09,720 Speaker 1: Basel three for central by central banks, for UH commercial 250 00:14:09,840 --> 00:14:14,600 Speaker 1: banks has some interesting and nuances. If you're a gold investor, 251 00:14:14,679 --> 00:14:17,160 Speaker 1: could you describe what they are and what you believe 252 00:14:17,240 --> 00:14:21,160 Speaker 1: the effects would be on the market. Sure, m hi, 253 00:14:21,320 --> 00:14:23,040 Speaker 1: and thanks so much for inviting me to speak to 254 00:14:23,080 --> 00:14:27,040 Speaker 1: you guys. This UM this afternoon UM basically the net 255 00:14:27,120 --> 00:14:30,960 Speaker 1: stable funding ratio, it's liquidity rules put in place for 256 00:14:31,040 --> 00:14:33,680 Speaker 1: commodities and in this case gold has been treated as 257 00:14:33,680 --> 00:14:37,760 Speaker 1: a commodity um. Which is one of the main issues 258 00:14:37,840 --> 00:14:40,400 Speaker 1: with not is the high cost um. And this is 259 00:14:40,440 --> 00:14:43,400 Speaker 1: going to have two major effects. One will be a 260 00:14:43,520 --> 00:14:47,400 Speaker 1: loss of the liquidity as banks are unable to reach 261 00:14:47,480 --> 00:14:50,120 Speaker 1: the higher costs, as well as an effect on what 262 00:14:50,280 --> 00:14:52,720 Speaker 1: we call the real economy, so the people who don't 263 00:14:52,760 --> 00:14:56,400 Speaker 1: have the option to get out of precious metals, so 264 00:14:56,560 --> 00:15:00,440 Speaker 1: the miners, the refiners, the jewelry manufacturers, they're going to 265 00:15:00,520 --> 00:15:05,640 Speaker 1: see big increases as well as uh a lack of financing. Well, 266 00:15:05,760 --> 00:15:08,520 Speaker 1: let's let's take a step back. So basically these les 267 00:15:08,600 --> 00:15:13,880 Speaker 1: BOSL three, which is looking to create a better and 268 00:15:14,000 --> 00:15:20,880 Speaker 1: stricter banking regulatory framework, includes different waitings for risky assets 269 00:15:21,000 --> 00:15:24,360 Speaker 1: that banks hold on their balance sheets. And basically, under 270 00:15:24,440 --> 00:15:28,960 Speaker 1: this proposal, gold would get a very high well we'll 271 00:15:29,000 --> 00:15:30,840 Speaker 1: get a very low risk waiting and others be considered 272 00:15:30,840 --> 00:15:35,360 Speaker 1: a very risky asset, making it UH valuable for banks 273 00:15:35,440 --> 00:15:38,160 Speaker 1: to hold as a liquid asset um. And you were 274 00:15:38,200 --> 00:15:40,640 Speaker 1: saying in in some of the in some of the 275 00:15:40,760 --> 00:15:43,520 Speaker 1: comments coming out of this latest in the conference, this 276 00:15:43,640 --> 00:15:48,280 Speaker 1: could potentially tank the prices of gold, right, No, I 277 00:15:48,320 --> 00:15:51,240 Speaker 1: mean absolutely, I think there could be real disruption to 278 00:15:51,360 --> 00:15:54,720 Speaker 1: the market um, not only in terms of loss of 279 00:15:54,800 --> 00:15:58,360 Speaker 1: liquidity um, but also in terms of a disruption to 280 00:15:59,200 --> 00:16:02,080 Speaker 1: the clear ring facility that happens for gold each day 281 00:16:02,120 --> 00:16:05,720 Speaker 1: in London. All Right, So if that were to happen, 282 00:16:06,800 --> 00:16:10,840 Speaker 1: what do you believe would be the reaction of large banks, 283 00:16:10,960 --> 00:16:13,040 Speaker 1: but also what would you believe would be the reaction 284 00:16:13,120 --> 00:16:18,080 Speaker 1: of the gold price. Well, I think we remain price neutral, 285 00:16:18,120 --> 00:16:20,920 Speaker 1: but in terms of the banks themselves. I mean, we've 286 00:16:20,920 --> 00:16:23,880 Speaker 1: already seen this start to happen in terms of banks 287 00:16:24,000 --> 00:16:26,800 Speaker 1: deciding to to pull out of precious metals UM. And 288 00:16:26,920 --> 00:16:30,040 Speaker 1: certainly there has been some departures. I mean, I think 289 00:16:30,120 --> 00:16:34,360 Speaker 1: there's a larger commodity story there too. UM. But certainly, UM, 290 00:16:34,880 --> 00:16:38,720 Speaker 1: the fact that gold perform performed extremely well during the crisis, 291 00:16:39,040 --> 00:16:41,720 Speaker 1: it's sort of ironic now that it's being considered this 292 00:16:41,920 --> 00:16:46,840 Speaker 1: risky asset that needs this um disproportional funding ratio. Is 293 00:16:46,920 --> 00:16:50,760 Speaker 1: this a done deal? I hope not. I think we're 294 00:16:50,840 --> 00:16:52,880 Speaker 1: working hard to make sure that we're raising it with 295 00:16:52,960 --> 00:16:55,720 Speaker 1: the right people. I think, as I said, because gold 296 00:16:55,760 --> 00:16:58,600 Speaker 1: did so well, UM, certainly it's to go to asset 297 00:16:58,680 --> 00:17:01,680 Speaker 1: in times of crisis. UM. It seems strange that you're 298 00:17:01,720 --> 00:17:03,880 Speaker 1: going to put it in a position where that could 299 00:17:03,960 --> 00:17:06,440 Speaker 1: no longer be the case because you have disruptions in 300 00:17:06,480 --> 00:17:10,200 Speaker 1: the market. Although in fairness, gold is or at least 301 00:17:10,320 --> 00:17:14,560 Speaker 1: gold prices have been rather volatile and uh. And you know, 302 00:17:14,880 --> 00:17:19,080 Speaker 1: if you're thinking about liquid assets that have predictable prices 303 00:17:19,240 --> 00:17:21,520 Speaker 1: when you want to get out of them, that could 304 00:17:21,800 --> 00:17:23,960 Speaker 1: that could be the issue, right, I mean, that's that's 305 00:17:24,080 --> 00:17:29,360 Speaker 1: that's sort of the reasoning behind UM the regulatory push here. Right. Well, 306 00:17:29,400 --> 00:17:31,680 Speaker 1: I think one of the major issues is the lack 307 00:17:31,760 --> 00:17:34,600 Speaker 1: of information on gold, and that's something that we've been 308 00:17:34,640 --> 00:17:38,119 Speaker 1: trying to address. UM. We've been working to get trade 309 00:17:38,320 --> 00:17:42,320 Speaker 1: statistics and reporting for the OTC market. UM. You might 310 00:17:42,359 --> 00:17:44,600 Speaker 1: not be aware of that the London OTC market is 311 00:17:44,640 --> 00:17:47,359 Speaker 1: actually the largest financial market in the world for gold. 312 00:17:47,600 --> 00:17:49,920 Speaker 1: I think people focus a lot on the futures because 313 00:17:49,960 --> 00:17:53,960 Speaker 1: you've got those statistics. UM, but certain London is certainly 314 00:17:54,040 --> 00:17:58,480 Speaker 1: within the industry seen as the epicenter. Can you explain 315 00:17:58,600 --> 00:18:01,880 Speaker 1: what is bullion banking and why people who are invested 316 00:18:02,119 --> 00:18:04,840 Speaker 1: in gold or thinking about investing in gold, whether that 317 00:18:04,920 --> 00:18:08,600 Speaker 1: be a gold miner or as you said, a jewelry 318 00:18:08,640 --> 00:18:11,200 Speaker 1: company or anybody that deals with gold, why is bullion 319 00:18:11,280 --> 00:18:15,439 Speaker 1: banking relevant? Well, I think there's two issues there. I mean, 320 00:18:15,960 --> 00:18:19,040 Speaker 1: within the same market, you have speculation, so gold is 321 00:18:19,080 --> 00:18:22,240 Speaker 1: treated as a currency and traded like a currency is 322 00:18:22,320 --> 00:18:25,080 Speaker 1: in the four x OTC markets. And then you also 323 00:18:25,200 --> 00:18:28,640 Speaker 1: have as I described, the real economy. So, UM, let's 324 00:18:28,680 --> 00:18:32,240 Speaker 1: say a mining company who needs financing or a jewelry 325 00:18:32,280 --> 00:18:36,360 Speaker 1: manufacturing who doesn't want to be exposed to the prey sensitivity. 326 00:18:36,880 --> 00:18:40,160 Speaker 1: As the metal goes through the plant, they will take 327 00:18:40,240 --> 00:18:43,400 Speaker 1: climate thing from a bullion bank, and the bullion bank 328 00:18:43,480 --> 00:18:47,360 Speaker 1: has that centered liquidity from the combination of the speculation 329 00:18:47,800 --> 00:18:52,040 Speaker 1: as well as the real economy financing. So you know, 330 00:18:52,119 --> 00:18:55,600 Speaker 1: one big question that I hear from people is sort 331 00:18:55,600 --> 00:18:59,320 Speaker 1: of this conflation between gold and bitcoin, that, in other words, 332 00:18:59,520 --> 00:19:03,520 Speaker 1: these crypt docurrencies are becoming the new gold and superseding 333 00:19:03,600 --> 00:19:08,439 Speaker 1: the precious metal as this sort of haven role. Ironically, uh, 334 00:19:08,680 --> 00:19:12,200 Speaker 1: considering the incredible volatility there, have you heard about that 335 00:19:12,400 --> 00:19:17,400 Speaker 1: or how is the organization kind of addressing that at all? Sure, 336 00:19:17,480 --> 00:19:19,640 Speaker 1: it's certainly about a topic. I mean, I'm actually calling 337 00:19:19,720 --> 00:19:24,480 Speaker 1: you live from Barcelona, the main LBBA industry conference. UM. 338 00:19:24,600 --> 00:19:26,679 Speaker 1: And what's been really interesting is how much we've been 339 00:19:26,680 --> 00:19:32,000 Speaker 1: talking about cryptocurrencies. Gold tends to be a rather conservative industry. UM. 340 00:19:32,160 --> 00:19:34,440 Speaker 1: So I was a bit surprised actually in terms of 341 00:19:34,800 --> 00:19:37,480 Speaker 1: how much interest there was in the crypto side of things. 342 00:19:37,840 --> 00:19:40,800 Speaker 1: And I think that's because fundamentally, UM, a lot of 343 00:19:40,800 --> 00:19:44,359 Speaker 1: people who are attracted to investing in gold, UM see 344 00:19:44,480 --> 00:19:48,879 Speaker 1: the benefit having the lack of government intervention because it 345 00:19:49,119 --> 00:19:53,000 Speaker 1: is no one's liability UM. Gold is gold, So there's 346 00:19:53,040 --> 00:19:56,800 Speaker 1: an interesting combination between crypto and gold, and that's something 347 00:19:56,880 --> 00:19:59,880 Speaker 1: we've certainly been hearing talked about in the last few days. 348 00:20:00,600 --> 00:20:03,720 Speaker 1: Does the increased participation on the part of governments or 349 00:20:03,800 --> 00:20:07,200 Speaker 1: bank regulators in the gold market, does that make it 350 00:20:07,320 --> 00:20:12,280 Speaker 1: less attractive? Um? It certainly makes it more frustrating UM. 351 00:20:13,000 --> 00:20:16,520 Speaker 1: From our side of things, UM, I think ultimately we 352 00:20:16,640 --> 00:20:19,080 Speaker 1: need some clarity when it comes to Basil three and 353 00:20:19,200 --> 00:20:23,760 Speaker 1: these rules that ultimately gold, having failed to become a 354 00:20:23,880 --> 00:20:27,720 Speaker 1: high quality liquid asset by their determination, has been lumped 355 00:20:27,760 --> 00:20:31,600 Speaker 1: in really wholesale with everything else and not been treated 356 00:20:32,440 --> 00:20:34,880 Speaker 1: um differently as it really should be given its role 357 00:20:34,960 --> 00:20:38,800 Speaker 1: as a currency as well. And just real quick, you 358 00:20:38,960 --> 00:20:42,040 Speaker 1: see that gold is probably going to climb six percent 359 00:20:42,800 --> 00:20:46,399 Speaker 1: by this time next year. Is that correct? I think 360 00:20:46,440 --> 00:20:48,960 Speaker 1: we're saying five and a bit, but yes, yes, we 361 00:20:49,080 --> 00:20:51,280 Speaker 1: had a prediction of going up about five and a 362 00:20:51,280 --> 00:20:54,840 Speaker 1: half percent UM in time for our conference in Boston 363 00:20:55,160 --> 00:20:58,120 Speaker 1: in October next year. Ruth Coral, thank you so much 364 00:20:58,119 --> 00:21:00,240 Speaker 1: for joining us. Ruth Coral as chief executive of the 365 00:21:00,359 --> 00:21:16,440 Speaker 1: London Bullion Market Association, which is based in London. We 366 00:21:16,560 --> 00:21:20,040 Speaker 1: were talking earlier about reports that Mexico and Canada will 367 00:21:20,080 --> 00:21:24,399 Speaker 1: reject us and after proposals, as reported by CNBC. Following 368 00:21:24,440 --> 00:21:27,159 Speaker 1: that report, the Canadian dollar and the Mexican pay so 369 00:21:27,359 --> 00:21:30,320 Speaker 1: fell sharply to session lows. They were traced a lot 370 00:21:30,400 --> 00:21:33,800 Speaker 1: of that move. But this highlights the perception that frankly, 371 00:21:33,920 --> 00:21:37,880 Speaker 1: Canada and Mexico have more to lose should NAFTA get 372 00:21:38,000 --> 00:21:41,720 Speaker 1: torn up or should negotiations deteriorate further. To discuss his 373 00:21:41,880 --> 00:21:45,760 Speaker 1: Josh wing Grove, Canada politics reporter for Bloomberg News, coming 374 00:21:45,800 --> 00:21:48,920 Speaker 1: to us from Ottawa in Canada, and Josh, you know, 375 00:21:49,119 --> 00:21:52,800 Speaker 1: right now naft negotiations are ongoing. The chatter that we 376 00:21:53,119 --> 00:21:57,480 Speaker 1: keep getting seems rather negative as far as reaching some 377 00:21:57,680 --> 00:21:59,720 Speaker 1: kind of new agreement. Can you just give us a 378 00:21:59,760 --> 00:22:03,399 Speaker 1: state of play of where things are right now? Yeah? Absolutely, 379 00:22:03,440 --> 00:22:05,080 Speaker 1: I mean we're we're sort of have our heads spinning 380 00:22:05,119 --> 00:22:08,920 Speaker 1: here this morning because that CNBC report you mentioned there's 381 00:22:08,960 --> 00:22:10,879 Speaker 1: nothing new in it. I mean, this has been going 382 00:22:11,359 --> 00:22:13,480 Speaker 1: for a week and what it really is saying is 383 00:22:13,520 --> 00:22:17,639 Speaker 1: that there are five core proposals that Mexico and Canada 384 00:22:17,680 --> 00:22:21,960 Speaker 1: have repeatedly and publicly rejected, and all kinds of observers 385 00:22:22,000 --> 00:22:23,840 Speaker 1: are saying if the US wants a deal, which of 386 00:22:23,880 --> 00:22:25,359 Speaker 1: course no one really knows if they do or not, 387 00:22:26,160 --> 00:22:28,040 Speaker 1: that they're going to have to water down their wine. 388 00:22:28,600 --> 00:22:31,400 Speaker 1: So CNBC, uh, you know, I'm here in Washington covering 389 00:22:31,440 --> 00:22:34,040 Speaker 1: the talks right now. This this, this report sort of 390 00:22:34,920 --> 00:22:38,240 Speaker 1: wrapped up what many of including Bloomberg, have been reporting 391 00:22:38,280 --> 00:22:41,040 Speaker 1: for quite some time, is that you know, they're meeting 392 00:22:41,080 --> 00:22:44,120 Speaker 1: today and what Robert lighthis are the US trade representative 393 00:22:44,160 --> 00:22:46,560 Speaker 1: who is slowly sort of losing power to Wilburgh Ross 394 00:22:47,040 --> 00:22:49,560 Speaker 1: on this file is going to hear from the Mexicans 395 00:22:49,600 --> 00:22:53,040 Speaker 1: and Canadians that on these five things, you know you're 396 00:22:53,040 --> 00:22:55,320 Speaker 1: going to have to do some soul searching on there's 397 00:22:55,400 --> 00:22:58,720 Speaker 1: essentially two negotiations going on, one on those five with 398 00:22:59,119 --> 00:23:02,280 Speaker 1: no progress and one on about two dozen other things 399 00:23:02,359 --> 00:23:04,719 Speaker 1: that is essentially modernizing the after bringing it into an 400 00:23:04,760 --> 00:23:07,240 Speaker 1: Internet era, and that that's going well. So you know, 401 00:23:07,400 --> 00:23:09,520 Speaker 1: it's it's ah, I feel like a little bit of 402 00:23:09,520 --> 00:23:13,160 Speaker 1: whiplash today here on this kind of thing. Yeah, it's 403 00:23:13,160 --> 00:23:15,920 Speaker 1: a long time coming that trade negotiations have this kind 404 00:23:15,960 --> 00:23:21,680 Speaker 1: of tension and an excitement. Josh, is there an undertone 405 00:23:21,880 --> 00:23:26,280 Speaker 1: to these back and forth because you mentioned the shift 406 00:23:26,359 --> 00:23:30,399 Speaker 1: of power in terms of the US negotiating team. What 407 00:23:30,680 --> 00:23:33,399 Speaker 1: you know, if even on an anecdotal basis, what's the 408 00:23:33,560 --> 00:23:37,040 Speaker 1: undertone to this about whether the US administration really wants 409 00:23:37,080 --> 00:23:39,240 Speaker 1: a deal or is really just looking for an excuse 410 00:23:39,320 --> 00:23:41,960 Speaker 1: to say goodbye? You know. I think the one thing 411 00:23:42,080 --> 00:23:44,480 Speaker 1: the Mexicans and Canadians have said is we're not going 412 00:23:44,520 --> 00:23:46,639 Speaker 1: to walk away. And what you can read into that 413 00:23:46,960 --> 00:23:50,040 Speaker 1: is they might think that the US is trying to 414 00:23:50,160 --> 00:23:52,000 Speaker 1: bait them into walking away and they're not going to 415 00:23:52,080 --> 00:23:54,160 Speaker 1: do that. Uh that you know, they're going to stay 416 00:23:54,320 --> 00:23:58,120 Speaker 1: at the table. But they are also saying that they're 417 00:23:58,119 --> 00:24:00,760 Speaker 1: not going to take just any deal, you know, the 418 00:24:01,320 --> 00:24:03,959 Speaker 1: on anything. And so I think the mood here has 419 00:24:04,000 --> 00:24:07,560 Speaker 1: certainly changed. The fourth round has been more tense than 420 00:24:07,640 --> 00:24:10,359 Speaker 1: the third, second and first. However, some people thought the 421 00:24:10,440 --> 00:24:12,399 Speaker 1: US would walk away at the fourth round to begin with, 422 00:24:12,600 --> 00:24:15,639 Speaker 1: and so that hasn't happened. Uh So, you know it, 423 00:24:16,000 --> 00:24:19,080 Speaker 1: I don't know things that things are always complicated. Christia Freeland, 424 00:24:19,080 --> 00:24:22,639 Speaker 1: the Canadian minister, did walk out of Canada EU trade 425 00:24:22,720 --> 00:24:25,399 Speaker 1: talks last year. Guess what the deal kicked in the 426 00:24:25,480 --> 00:24:27,760 Speaker 1: last month. You know, they said that'sn't necessarily kill a 427 00:24:27,840 --> 00:24:30,040 Speaker 1: deal that people walk out. Josh, let's talk about the 428 00:24:30,160 --> 00:24:34,280 Speaker 1: five aspects, the most controversial points of discussion right now? 429 00:24:34,359 --> 00:24:36,399 Speaker 1: What are they? Yeah, I'll give you the Cole's notes, 430 00:24:36,520 --> 00:24:39,040 Speaker 1: because you know, take it from me. Sometimes these talks 431 00:24:39,080 --> 00:24:43,159 Speaker 1: are like watching paint dry. Autos is probably the biggest 432 00:24:43,160 --> 00:24:45,800 Speaker 1: one you think of Donald Trump's lens on this. He 433 00:24:45,920 --> 00:24:50,000 Speaker 1: wants to bring back manufacturing jobs from Mexico. They've proposed 434 00:24:50,080 --> 00:24:52,880 Speaker 1: what are called rules of origin changes that would essentially 435 00:24:52,920 --> 00:24:55,000 Speaker 1: mean more of a car has to be built in 436 00:24:55,200 --> 00:24:58,520 Speaker 1: North America and in the US specifically. Automakers have warned 437 00:24:58,600 --> 00:25:00,600 Speaker 1: that no one would even bother. They would just pay 438 00:25:00,640 --> 00:25:03,359 Speaker 1: the w t O tariff and import more cars to 439 00:25:03,440 --> 00:25:07,320 Speaker 1: the US and actually decrease US production. Other big ones 440 00:25:07,400 --> 00:25:10,280 Speaker 1: are on a sunset clause that would essentially spike nafter 441 00:25:10,400 --> 00:25:12,399 Speaker 1: after five years unless people stepped in to save it. 442 00:25:12,520 --> 00:25:15,159 Speaker 1: You can imagine how many businesses would love the idea 443 00:25:15,200 --> 00:25:17,440 Speaker 1: of that making a long term investment decision with a 444 00:25:17,480 --> 00:25:21,520 Speaker 1: potential five year runway. Uh not great government procurement. The 445 00:25:21,560 --> 00:25:24,199 Speaker 1: US wants to basically close off nearly all of its 446 00:25:24,240 --> 00:25:27,040 Speaker 1: market to Mexico and Canada. Dispute panels. These are sort 447 00:25:27,040 --> 00:25:29,240 Speaker 1: of like the NAFTA cops. The US want US wants 448 00:25:29,240 --> 00:25:31,760 Speaker 1: to get rid of them entirely. And dairy that's always 449 00:25:31,800 --> 00:25:34,760 Speaker 1: a hot button issue, particularly for Canada. The US has 450 00:25:34,800 --> 00:25:38,399 Speaker 1: proposed essentially dismantling Canada's entire dairy system. That would be 451 00:25:39,000 --> 00:25:42,320 Speaker 1: just absolute political nonstarter for any Canadian government. And so 452 00:25:42,400 --> 00:25:44,000 Speaker 1: those are those are the big ones. And so the 453 00:25:44,040 --> 00:25:47,560 Speaker 1: the US proposals are so far out of out of 454 00:25:47,680 --> 00:25:50,439 Speaker 1: what the three countries agreed to enter the Trans Pacific 455 00:25:50,520 --> 00:25:53,880 Speaker 1: Partnership that you know, the other two countries are saying, 456 00:25:53,920 --> 00:25:56,600 Speaker 1: you know, like that's they're they're they're calling it a nonstarter. 457 00:25:56,760 --> 00:26:00,320 Speaker 1: They're saying phrases like flatly reject, completely reject, and they're 458 00:26:00,359 --> 00:26:02,240 Speaker 1: not leaving a lot of wiggle rold Well, But Josh, 459 00:26:02,320 --> 00:26:04,399 Speaker 1: you know, I was I thought it was compelling the 460 00:26:04,520 --> 00:26:07,720 Speaker 1: market response to the reports, even though they were old news, 461 00:26:07,840 --> 00:26:11,880 Speaker 1: but the idea that things were falling apart, it's interesting 462 00:26:12,000 --> 00:26:15,520 Speaker 1: to me to think that that created a fall in 463 00:26:15,680 --> 00:26:18,280 Speaker 1: both the luney and the pace. So is it expected 464 00:26:18,320 --> 00:26:20,840 Speaker 1: that if there is some kind of devolution of talks 465 00:26:20,920 --> 00:26:24,159 Speaker 1: here that will be negative most negative for Canada and 466 00:26:24,280 --> 00:26:27,840 Speaker 1: Mexico more than even the US. I think that's true. 467 00:26:27,880 --> 00:26:29,440 Speaker 1: I think that's true. You know, one of the things 468 00:26:29,520 --> 00:26:32,200 Speaker 1: that has really characterized the early rounds of talk is 469 00:26:32,320 --> 00:26:36,000 Speaker 1: there's been almost no American media interests. There's been almost 470 00:26:36,000 --> 00:26:39,119 Speaker 1: other than like Bloomberg and Writer's there's been almost no 471 00:26:39,960 --> 00:26:43,399 Speaker 1: UH stakeholder interest is the word I'm looking for in 472 00:26:43,440 --> 00:26:45,800 Speaker 1: the US. And so we we saw the US chambers 473 00:26:45,840 --> 00:26:49,200 Speaker 1: speak out this last week. The Canadians think that that 474 00:26:49,359 --> 00:26:51,800 Speaker 1: is less about the US Chamber thinking O G. Things 475 00:26:51,840 --> 00:26:53,760 Speaker 1: are going off the rails, and they are waking up 476 00:26:53,800 --> 00:26:55,480 Speaker 1: to the fact that things could go off the rails. 477 00:26:55,960 --> 00:26:58,639 Speaker 1: And so there's there's a tiered effect here the U 478 00:26:58,800 --> 00:27:01,440 Speaker 1: s if it pulls out, you know, um, there would 479 00:27:01,440 --> 00:27:04,400 Speaker 1: be all kinds of ripple effects are at the economy. 480 00:27:04,840 --> 00:27:07,920 Speaker 1: Canada has a safety net that Mexico does not. Canada 481 00:27:07,960 --> 00:27:10,920 Speaker 1: has a bilateral f t A with the US. It 482 00:27:11,040 --> 00:27:13,639 Speaker 1: was a predecessor of NAFTA, and they would hope to 483 00:27:13,720 --> 00:27:15,440 Speaker 1: sort of dust that off and see if it could 484 00:27:15,440 --> 00:27:19,720 Speaker 1: start up again if NAFTA and NAFTA collapse. So so 485 00:27:19,880 --> 00:27:22,239 Speaker 1: this sort of you know, like Mexico has has has 486 00:27:22,320 --> 00:27:25,120 Speaker 1: less of a safety net as I say it in Canada, Josh, 487 00:27:25,160 --> 00:27:28,000 Speaker 1: any chance you can do air Bus and the Bombardier 488 00:27:28,119 --> 00:27:31,800 Speaker 1: in less than fifteen seconds. Yeah, air Bus took half 489 00:27:32,000 --> 00:27:36,520 Speaker 1: of Bombardi's prized jewel for free because Bombarge was desperate 490 00:27:36,600 --> 00:27:38,959 Speaker 1: and needed a partner. They were talking with the Chinese. 491 00:27:39,040 --> 00:27:42,520 Speaker 1: They chose air Bus, balls and Boeing's court. Now alright, 492 00:27:42,640 --> 00:27:44,680 Speaker 1: well we're gonna be following this as well. Thank you 493 00:27:44,840 --> 00:27:48,600 Speaker 1: very much, Josh WiNDroVe. He is our Canadian politics reporter 494 00:27:48,760 --> 00:27:54,040 Speaker 1: reporting from Washington, d C, site of the continuing NAFTA talk. 495 00:27:57,119 --> 00:27:59,600 Speaker 1: Thanks for listening to the Bloomberg P and L podcast. 496 00:28:00,040 --> 00:28:03,840 Speaker 1: You can subscribe and listen to interviews at Apple Podcasts, SoundCloud, 497 00:28:04,000 --> 00:28:07,440 Speaker 1: or whatever podcast platform you prefer. I'm pim Fox. I'm 498 00:28:07,480 --> 00:28:11,000 Speaker 1: on Twitter at pim Fox. I'm on Twitter at Lisa 499 00:28:11,080 --> 00:28:14,000 Speaker 1: Abramo wits one. Before the podcast, you can always catch 500 00:28:14,119 --> 00:28:15,800 Speaker 1: us worldwide on Bloomberg Radio