WEBVTT - Government Shutdown, Real Estate, and Tesla 0:00:00.120 --> 0:00:04.360 Bloomberg is now on your dashboard with Apple CarPlay and 0:00:04.360 --> 0:00:08.160 Android Auto. It gives you access to every Bloomberg podcast, 0:00:08.280 --> 0:00:11.560 live audio feeds from Bloomberg Radio, print stories from Bloomberg 0:00:11.640 --> 0:00:14.920 News in audio form, and the latest headlines of the 0:00:14.920 --> 0:00:18.600 click of a button with Bloomberg News. Now it's free 0:00:18.680 --> 0:00:21.439 with the latest version of the Bloomberg Business App. That's 0:00:21.680 --> 0:00:24.400 the Bloomberg Business App. Get it on your phone in 0:00:24.440 --> 0:00:27.760 the Apple App Store or on Google Play. Just download 0:00:27.800 --> 0:00:30.560 the app, connect your phone to your car and get started. 0:00:30.960 --> 0:00:34.400 And it's all presented by our sponsor, Interactive Brokers. 0:00:35.400 --> 0:00:38.600 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney. Alongside 0:00:38.640 --> 0:00:39.720 my co host Matt Miller. 0:00:40.200 --> 0:00:44.279 Every business day we bring you interviews from CEOs, market pros, 0:00:44.320 --> 0:00:48.160 and Bloomberg experts, along with essential market movin news. 0:00:48.720 --> 0:00:51.839 Find the Bloomberg Markets podcast called Apple Podcasts or wherever 0:00:51.960 --> 0:00:55.080 you listen to podcasts, and at Bloomberg dot com Slash podcast. 0:00:55.360 --> 0:00:56.360 All right, let's get down. 0:00:56.240 --> 0:01:00.560 To Washington, DC, only because we have to where it's 0:01:00.600 --> 0:01:01.120 all happening. 0:01:01.160 --> 0:01:02.120 Nathan Dean joins us. 0:01:02.120 --> 0:01:05.160 He's a senior policy onis with Bloomberg Intelligence, and Jordan 0:01:05.240 --> 0:01:09.600 Fabian White House reporter with Bloomberg News, Nathan, I just 0:01:09.640 --> 0:01:11.640 want to start with you, are you going to shut 0:01:11.640 --> 0:01:12.600 down our government again? 0:01:12.640 --> 0:01:13.880 What's going on down down there? 0:01:14.480 --> 0:01:16.320 So you know, I may be a little bit out 0:01:16.360 --> 0:01:19.120 of consensus on this, we're still telling folks forty percent 0:01:19.200 --> 0:01:22.240 chance of a shutdown unless you have this like temporary 0:01:22.240 --> 0:01:24.800 shutdown that bleeds over to the weekend. The reason being 0:01:24.920 --> 0:01:27.279 is is that you know, there are so many different 0:01:27.319 --> 0:01:30.520 ideas that being thrown around by House Republicans, by the Senate, 0:01:30.600 --> 0:01:33.000 by Ukraine and Israel and so forth, and none of 0:01:33.000 --> 0:01:36.520 these political cakes are baked. And you know, there's really 0:01:36.600 --> 0:01:39.160 no strategy of why you would have a shutdown at 0:01:39.200 --> 0:01:41.560 this point other than just we want to shut it down. 0:01:41.600 --> 0:01:44.320 And so we Speaker Johnson still and you know what 0:01:44.319 --> 0:01:47.360 you would call the the infancy of his speakership. And 0:01:47.640 --> 0:01:49.920 obviously he made some statements over the weekend that he's 0:01:49.920 --> 0:01:51.960 seeking for more time as he does his letter at 0:01:52.000 --> 0:01:54.480 see our idea and so forth. We're telling folks, you know, 0:01:54.560 --> 0:01:56.000 he may be able to get that, So don't be 0:01:56.040 --> 0:01:58.720 surprised that this goes in the December fifteenth or even 0:01:58.800 --> 0:02:02.040 January February. But ultimately what people should know as they 0:02:02.080 --> 0:02:05.000 approach it from the market perspective is that there really 0:02:05.040 --> 0:02:07.520 isn't all that impact outside of just trying to just 0:02:07.600 --> 0:02:10.160 keep your eye on it. Even the defense contractors aren't 0:02:10.720 --> 0:02:12.880 all that exposed. I mean, we really would have to 0:02:12.880 --> 0:02:15.480 see a two months shutdown, if not longer, for those 0:02:15.520 --> 0:02:18.799 economic impacts to be leading into the market. So unfortunately 0:02:18.800 --> 0:02:21.079 for a lot of the folks just watching, it's one 0:02:21.080 --> 0:02:23.640 of those political popcorn watch events again. 0:02:24.520 --> 0:02:29.080 All right, So the White House has said that Johnson's 0:02:29.120 --> 0:02:32.760 plan would only lead to future shutdowns, and President Biden 0:02:32.800 --> 0:02:37.120 could issue a formal veto threat today. Jordan Fabian, you 0:02:37.160 --> 0:02:39.480 cover the White House for us. What do we expect 0:02:40.280 --> 0:02:42.560 from President Biden and what's the what are their problems 0:02:42.600 --> 0:02:43.160 with this plan? 0:02:44.800 --> 0:02:46.560 I think we could see a veto threat today or 0:02:46.600 --> 0:02:49.440 something a little short of that, which is basically an 0:02:49.440 --> 0:02:53.760 advisor's recommendation that he not signed. It's these Washington terms 0:02:53.760 --> 0:02:56.480 of craft. But we'll be watching closer to see what 0:02:56.520 --> 0:02:59.919 they say. Look, the White House is frustrated with this 0:03:00.560 --> 0:03:03.520 dragged out process that you know, they thought should have 0:03:03.520 --> 0:03:06.240 been resolved with the debt ceiling agreement back in the spring, 0:03:06.320 --> 0:03:09.639 which sets spending levels. Republicans through that out the window, 0:03:09.960 --> 0:03:12.240 and so they're frustrated over that and the fact that 0:03:12.520 --> 0:03:15.560 there's no Ukraine aid in this package, and the White 0:03:15.600 --> 0:03:18.480 House is getting anxious that maybe this is the last 0:03:18.480 --> 0:03:20.520 bite of the apple, and so they want to exert 0:03:20.520 --> 0:03:23.239 whatever leverage they can to try to get that included. 0:03:23.280 --> 0:03:26.840 And thus you're seeing these statements that are highly critical 0:03:27.040 --> 0:03:28.720 of Speaker Johnson's approach. 0:03:28.440 --> 0:03:29.120 But they would be. 0:03:29.720 --> 0:03:33.840 I mean, if if Biden veto's it shutting down the government, 0:03:34.400 --> 0:03:36.720 then the Democrats get the blame for something that the 0:03:36.720 --> 0:03:39.360 whole country is angry with the Republicans for right now. 0:03:39.840 --> 0:03:42.640 You know, they're in a great situation because the country 0:03:42.800 --> 0:03:46.360 blames all of this on the other party. 0:03:45.440 --> 0:03:47.080 Do they risk that? 0:03:48.360 --> 0:03:48.600 Yeah? 0:03:48.600 --> 0:03:50.720 That's why I think Nathan raises a good point, which 0:03:50.760 --> 0:03:53.160 is that you know, I think you may and you 0:03:53.280 --> 0:03:56.600 raise valid points too, which is Democrats absolutely don't want 0:03:56.600 --> 0:03:59.320 any share of the blame for a government shutdown. So 0:03:59.840 --> 0:04:03.000 my suspicion is if a cr were to reach the 0:04:03.040 --> 0:04:05.240 President's desk, he would sign it and you know, kick 0:04:05.240 --> 0:04:06.640 the can down the road for a couple of months 0:04:06.680 --> 0:04:10.000 and try again in January to get his priorities funded. 0:04:10.480 --> 0:04:14.000 But it's still an open question of whether this laddered 0:04:14.000 --> 0:04:17.360 CR gets through the House. There's still this faction of 0:04:17.560 --> 0:04:22.560 hell no fiscal hawk House Republicans who you don't want 0:04:22.600 --> 0:04:25.160 to take guess for an answer, and Johnson can only 0:04:25.160 --> 0:04:26.200 afford to lose three votes. 0:04:26.240 --> 0:04:26.839 That's not a lot. 0:04:26.920 --> 0:04:30.039 So we'll be watching closely. There's some test votes coming 0:04:30.080 --> 0:04:32.680 up in the next twenty four hours to see what 0:04:32.800 --> 0:04:34.720 level of support there is for this package. 0:04:35.040 --> 0:04:38.600 So Nathan and I guess in the interim, what legislation 0:04:39.080 --> 0:04:41.400 is not getting worked on, it's not getting passed. 0:04:41.680 --> 0:04:42.599 What are we missing here? 0:04:43.120 --> 0:04:44.720 Well, I mean there's a lot of stuff that are 0:04:44.800 --> 0:04:46.960 it's more of the sector level. I mean, obviously we've 0:04:46.960 --> 0:04:48.840 talked about pot banking before. You know, there are a 0:04:48.880 --> 0:04:50.799 lot of people would love to see that move forward. 0:04:51.000 --> 0:04:53.360 There's really no work that's being done on it. Crypto 0:04:53.600 --> 0:04:56.320 the NDAA. You know, there's a lot of legislation out 0:04:56.360 --> 0:04:59.040 there that needs to get done and you know, we're 0:04:59.040 --> 0:05:02.120 just talking about c and so ultimately there's still going 0:05:02.200 --> 0:05:04.840 to be enough time to get that stuff done. But 0:05:05.080 --> 0:05:06.960 you know, time's going to run out before we get 0:05:06.960 --> 0:05:08.960 into this election cycle where folks are just going to 0:05:08.960 --> 0:05:11.880 be more paying attention to their districts. I still think 0:05:11.920 --> 0:05:14.599 that a shutdown is coming. I honestly do think that 0:05:14.640 --> 0:05:17.440 we're going to have a multi week shutdown. I just 0:05:17.480 --> 0:05:19.560 think it's going to be in the beginning of next year, 0:05:19.600 --> 0:05:22.800 because there will come a point in which Speaker Johnson 0:05:23.000 --> 0:05:26.200 and the Democrats just will not agree and both sides 0:05:26.240 --> 0:05:28.600 will say, Okay, I think politically it's best for us 0:05:28.600 --> 0:05:30.880 to just you know, have this fight out and let's 0:05:30.960 --> 0:05:33.920 let the chips lie. But ultimately, for the Republicans right now, 0:05:33.920 --> 0:05:36.080 as you recall, you know, last week, they had a 0:05:36.160 --> 0:05:39.400 very bad week in Virginia where I am in Kentucky 0:05:39.400 --> 0:05:41.400 and Ohio and so forth like that, they don't want 0:05:41.400 --> 0:05:44.040 to have that happen twice in the span of two weeks. 0:05:44.400 --> 0:05:47.520 So I think right now that all this uncertainty is 0:05:47.560 --> 0:05:49.680 just going to get pushed into January and we'll be 0:05:49.720 --> 0:05:50.600 talking about it then. 0:05:51.400 --> 0:05:51.679 Jordan. 0:05:51.800 --> 0:05:54.640 Let's talk about, you know, the the upcoming election. We're 0:05:54.640 --> 0:05:59.840 already seeing ads from the Biden administration trying to convince 0:05:59.839 --> 0:06:05.160 Americans that his age isn't a problem, although many people 0:06:05.240 --> 0:06:08.200 polled are concerned about his ability to get through another 0:06:08.279 --> 0:06:11.560 four years. You know, what's their tactic and what do 0:06:11.600 --> 0:06:14.479 they say about I always wonder about Kamala Harris, because 0:06:14.480 --> 0:06:17.559 if you're really worried about the president's age, you should 0:06:17.600 --> 0:06:21.239 be doubly focused on the vice presidential candidate. 0:06:22.960 --> 0:06:25.560 Right Well, the Biding campaign has a lot of money 0:06:25.600 --> 0:06:27.800 right now. They have about ninety one million dollars in 0:06:27.880 --> 0:06:30.440 cash in hand, So they're spending some money now to 0:06:30.560 --> 0:06:34.640 try and get those concerns alaied and try to lay 0:06:34.680 --> 0:06:38.560 the groundwork for a broader and more aggressive pitch later 0:06:38.600 --> 0:06:41.520 next year for reelection. So they're trying to address the 0:06:41.560 --> 0:06:44.880 age question. They're trying to address the Americans' concerns with 0:06:44.920 --> 0:06:47.200 the cost of living. So if you look listen to 0:06:47.240 --> 0:06:50.960 their messaging, there's ads showing Biden walking through Kiev with 0:06:51.000 --> 0:06:53.719 the sunglasses on and talking about these things in the 0:06:53.720 --> 0:06:57.320 Inflation Reduction Act that we're supposed to lower prices. But look, 0:06:57.520 --> 0:07:01.240 it's I think their best hope is not necessarily convincing 0:07:01.560 --> 0:07:04.640 Americans that you know, Biden is this spry young man, 0:07:04.720 --> 0:07:07.960 but that they're going to be possibly running against Donald Trump, 0:07:08.040 --> 0:07:11.000 someone who's very unpopular and someone you know who's also 0:07:11.080 --> 0:07:14.239 up there in age and has shown some propensity for 0:07:14.640 --> 0:07:17.360 gaffs and the like. So you know, it's like Biden 0:07:17.360 --> 0:07:19.560 always says, don't compare me to the almighty, compare me 0:07:19.640 --> 0:07:20.400 to the alternative. 0:07:21.360 --> 0:07:23.960 Hey, Jordan, it's going to be a big week for 0:07:24.280 --> 0:07:26.960 President Biden out in San Francisco, who'll be meeting with 0:07:27.320 --> 0:07:31.080 Chinese President Jijiping. What's the White House? What's a kind 0:07:31.080 --> 0:07:34.840 of the game plan? Here's what's the goal? What would 0:07:34.880 --> 0:07:35.560 be a success? 0:07:35.640 --> 0:07:36.720 What are you hearing. 0:07:38.400 --> 0:07:41.320 They want to set a floor under this US China relationship. 0:07:41.320 --> 0:07:42.880 I don't think you're going to see a bunch of 0:07:43.320 --> 0:07:46.000 major deliverables coming out of this meeting, like some sort 0:07:46.040 --> 0:07:49.440 of agreement on Taiwan or broader economic rules of the road. 0:07:49.440 --> 0:07:52.600 Those are the two obviously main concerns in the relationship. 0:07:52.880 --> 0:07:55.920 But you could see things like resumption of military to 0:07:55.960 --> 0:08:01.920 military communication, some incremental things on climate, fentanyl trafficking cutting 0:08:01.960 --> 0:08:04.840 out of this meeting. And I think that again, the 0:08:04.920 --> 0:08:07.920 meaning itself is almost a deliverable for President Biden, who 0:08:08.400 --> 0:08:12.040 wants to reset this relationship in a way that puts 0:08:12.120 --> 0:08:15.240 up guardrails, make sure that tensions don't escalate out of 0:08:15.280 --> 0:08:18.200 control like they did earlier. This year with a spibulin incident. 0:08:20.000 --> 0:08:24.560 So perspective of just greater d C, I mean, what's 0:08:24.600 --> 0:08:27.240 the concern level here just about US China relations? 0:08:27.680 --> 0:08:29.760 Well, I mean, first I want my pandas back. I mean, 0:08:29.920 --> 0:08:34.120 obviously we lost our pandas you know, I'm joking there, 0:08:34.160 --> 0:08:36.079 but you know, obviously, you know, when it comes to 0:08:36.160 --> 0:08:38.240 the US China relations, it comes down to clarity. That's 0:08:38.240 --> 0:08:40.120 what investors want, is they want to know what the 0:08:40.120 --> 0:08:41.960 clarity is and what's going to happen. I mean there's 0:08:42.240 --> 0:08:44.480 you know, all these questions with Taiwan and so forth 0:08:44.559 --> 0:08:46.440 like that, and so I think anytimes you get this 0:08:46.480 --> 0:08:49.439 type of communication between the presidents in the premiere and 0:08:49.520 --> 0:08:51.880 so forth like that, that you get this at least 0:08:51.880 --> 0:08:55.320 get something that you can work with. So I don't 0:08:55.360 --> 0:08:58.800 think Washington in particular, and you know, Jordan can correct 0:08:58.840 --> 0:09:00.880 me if I'm wrong. You know, I don't think Washington 0:09:00.840 --> 0:09:03.080 in particular has any real hopes for this meeting. But 0:09:03.559 --> 0:09:05.480 it's just something that we'd like to see so that 0:09:05.520 --> 0:09:07.680 we can see the communication, we can get information, we 0:09:07.720 --> 0:09:10.200 can get transparency, and at least have a better idea 0:09:10.200 --> 0:09:12.360 of what's happening down the road. Because if anytimes they're 0:09:12.400 --> 0:09:15.880 not talking, then you just get what's happening. Nobody knows, right, all. 0:09:15.840 --> 0:09:17.960 Right, Nathan Hagger, Nathan Dean, thank you so much. We 0:09:18.000 --> 0:09:18.439 appreciate it. 0:09:18.480 --> 0:09:21.480 Nathan Dean, He's a senior policy analyst with Bloomberg Intelligence, 0:09:21.679 --> 0:09:24.600 and Jordan Famian, a White House reporter with Bloomberg News, 0:09:24.640 --> 0:09:26.319 both of them down in DC. 0:09:27.920 --> 0:09:31.319 You're listening to the team Ken's are Live program Bloomberg 0:09:31.360 --> 0:09:34.720 Markets weekdays at ten am Eastern on Bloomberg dot Com, 0:09:34.840 --> 0:09:37.960 the iHeartRadio app, and the Bloomberg Business App, or listen 0:09:38.040 --> 0:09:40.280 on demand wherever you get your podcasts. 0:09:42.280 --> 0:09:45.000 Looking at the stock of Boeing up four percent, looks 0:09:45.000 --> 0:09:48.600 like they sold a bunch of aircraft to the Emirates Airlines. 0:09:48.600 --> 0:09:50.440 That sounds like a good deal. Let's break that down 0:09:50.440 --> 0:09:51.480 in Everything. 0:09:51.360 --> 0:09:56.360 Aerospace with George Ferguson, senior aerospace, defense and airline analysts 0:09:56.400 --> 0:10:01.319 for Bloomberg Intelligence. Former militi sorry intelligence officer in the 0:10:01.400 --> 0:10:05.720 US Army. So we think mister Ferguson for his service here. George, 0:10:05.880 --> 0:10:09.360 talk us first about this Emirates deal. The number got 0:10:09.360 --> 0:10:12.319 my attention, like a lot of billions of dollars. 0:10:13.440 --> 0:10:16.560 Yeah, no, it's a big order, right, So there's about 0:10:16.640 --> 0:10:21.520 ninety five airplanes, nine of them Triple sevens. But that 0:10:21.559 --> 0:10:24.920 triple seven, yeah, they already had the largest order. 0:10:24.720 --> 0:10:26.199 In the book for that airplane. 0:10:27.000 --> 0:10:30.080 Emirates likes to refresh their fleet sort of every fifteen years. 0:10:30.080 --> 0:10:32.319 They don't like to go much further than a fifteen 0:10:32.400 --> 0:10:35.120 year old airplane. They've been waiting for this Triple seven 0:10:35.160 --> 0:10:38.040 to show up, so they're adding more to that backlog. 0:10:38.080 --> 0:10:38.960 I don't know that that. 0:10:40.000 --> 0:10:44.240 Significantly boosts Bowing profit because my guess is that airplane 0:10:44.280 --> 0:10:46.880 comes out the door in the mid twenty twenties once 0:10:46.920 --> 0:10:51.240 it gets certified at low rates, you know, at threes or. 0:10:51.240 --> 0:10:52.480 Fives kind of per month. 0:10:53.160 --> 0:10:55.520 So I mean, every order is a great order, but 0:10:56.559 --> 0:10:59.240 that order probably takes a fair amount of time to fulfill. 0:11:00.800 --> 0:11:02.839 Seventy eight seven was interesting to see them order as well. 0:11:02.840 --> 0:11:03.760 They would have five. 0:11:03.600 --> 0:11:06.520 More, not a lot. They already had an order on 0:11:06.559 --> 0:11:09.360 the book for some seven eight sevens. They have orders 0:11:09.360 --> 0:11:11.840 in the books for seventy sevens and eight three fifties, 0:11:12.400 --> 0:11:15.439 which you know, I see is sort of two competing airplanes, 0:11:16.000 --> 0:11:19.000 the Boeing and the Airbus version of that smaller long 0:11:19.040 --> 0:11:22.760 haul airplane. Typically Emirates tries to run a cleaner fleet. 0:11:22.800 --> 0:11:26.240 They run a fleet of usually two types, so I'm 0:11:26.240 --> 0:11:29.080 a little surprised to see them keep that airplane on 0:11:29.120 --> 0:11:30.800 the order books. I thought they might have placed an 0:11:30.840 --> 0:11:34.760 order for triple seven and rationalized that because I think 0:11:34.800 --> 0:11:36.800 that when they're done, they're going to want to go 0:11:36.880 --> 0:11:39.480 back to again a sort of a two airplane fleet, 0:11:39.520 --> 0:11:40.679 and I thought it was going to be a three 0:11:40.720 --> 0:11:43.520 point fifty triple seven. So that was pretty interesting to 0:11:43.520 --> 0:11:46.319 see them go back for five more seven eight sevens. 0:11:46.320 --> 0:11:50.079 Not a lot splashy order long period of time before 0:11:50.080 --> 0:11:50.880 we deliver all those. 0:11:50.800 --> 0:11:53.040 Airport George walk us through. The difference is, you know, 0:11:53.080 --> 0:11:55.880 people who don't cover Boeing for a living may not 0:11:56.400 --> 0:11:58.640 and people don't fly as much as Paul Sweeney might 0:11:58.679 --> 0:12:03.920 not know what all these aircraft are. We we know 0:12:04.000 --> 0:12:06.760 the seven three seven and the A three twenties. They're 0:12:06.800 --> 0:12:12.600 the narrow body single aisle aircraft that really blow to 0:12:12.679 --> 0:12:15.600 actually be a passenger on because there's no room at all. 0:12:16.080 --> 0:12:21.719 But is the seven seven seven Is that a bigger airplane? 0:12:23.000 --> 0:12:23.240 Yeah? 0:12:23.280 --> 0:12:25.680 So you know, since the pandemic, we saw the eight 0:12:25.679 --> 0:12:28.480 three eighty and the seven four seven, the big four 0:12:28.520 --> 0:12:30.560 engine airplanes. We see them, We got to see them 0:12:30.760 --> 0:12:33.560 taken out of production. And so after those airplanes come 0:12:33.559 --> 0:12:36.199 out of production, Triple seven will be the largest airplane 0:12:37.000 --> 0:12:40.120 in the skies. Really, you know, the sizes of that 0:12:40.160 --> 0:12:43.000 Triple seven are starting to actually not even starting. 0:12:43.000 --> 0:12:44.760 They're rivaling the seven four to seven. 0:12:45.400 --> 0:12:48.080 You can get four hundred mid four hundred kind of 0:12:48.440 --> 0:12:50.840 numbers of people on that airplane, depending on how you 0:12:50.880 --> 0:12:51.559 can figure it. 0:12:52.640 --> 0:12:53.880 There is big is the Triple seven? 0:12:53.920 --> 0:12:55.600 I'm sorry? Is the Triple seven as big as the 0:12:55.600 --> 0:12:57.800 seven eighty seven? I thought the seven eighty seven, the 0:12:57.880 --> 0:13:00.120 Dreamliner was like the biggest one. 0:13:00.600 --> 0:13:03.800 No, sorry, seventy seven is smaller. Seventy seven and A 0:13:03.960 --> 0:13:07.600 three fifty are both smaller. A three fifty nine hundred 0:13:07.880 --> 0:13:11.360 are both smaller than Triple seven, and they fit between 0:13:11.400 --> 0:13:13.840 that narrow body class that you seem to love so much, 0:13:14.200 --> 0:13:16.760 you know, the three twenty and seven three seven and 0:13:16.800 --> 0:13:19.600 that Triple seven. Really, those are the most in favor 0:13:19.679 --> 0:13:23.400 airplanes right now. Right they're at three hundred ish seed 0:13:24.720 --> 0:13:27.679 you know, kind of twin aisles, and the ranges are great. 0:13:27.720 --> 0:13:30.040 On the three fifteen to seven eighty seven, they can 0:13:30.080 --> 0:13:33.600 get you, you know, really far around the world, so 0:13:33.640 --> 0:13:35.400 you could do a lot of non stops, try to 0:13:35.400 --> 0:13:38.040 pull in the best kind of firs, you know, fairs 0:13:38.080 --> 0:13:41.280 possible from those business travelers that don't want to connect anywhere. 0:13:41.720 --> 0:13:44.679 Triple seven has pretty good range as well, But that's 0:13:44.720 --> 0:13:46.520 going to be the largest airplane in the sky when 0:13:46.800 --> 0:13:48.920 seven four seven and eight three eighty are gone. 0:13:49.000 --> 0:13:51.480 Nice, I want to fly that Triple seven. Where are 0:13:51.480 --> 0:13:53.480 the routes? Where can I get on one of those things? 0:13:54.440 --> 0:13:56.040 I think if you go to Dubai, they got a 0:13:56.080 --> 0:13:57.920 lot of them in the fleet. If you go to 0:13:58.000 --> 0:14:00.480 kat Tar you find a lot of them too. United 0:14:00.480 --> 0:14:00.960 flies them. 0:14:01.000 --> 0:14:03.720 I mean they're really you know, they're a component of 0:14:03.800 --> 0:14:06.640 most of the major, big full service airlines around the world. 0:14:07.040 --> 0:14:09.640 All Right, the seven three seven Max, it was so 0:14:09.840 --> 0:14:11.520 in the news for the bad. 0:14:11.320 --> 0:14:12.720 Reasons, patches all the time. 0:14:13.080 --> 0:14:14.719 They fixed that. Now I feel like it's the same 0:14:14.760 --> 0:14:17.800 as plane on the planet. Sure they did. They fixed it, 0:14:17.880 --> 0:14:19.400 so just a little software fixed. 0:14:19.960 --> 0:14:21.760 But the big thing is China. I mean, I got 0:14:21.760 --> 0:14:24.040 to start selling some of these planes to China. 0:14:24.280 --> 0:14:25.000 Where are we there? 0:14:26.360 --> 0:14:29.480 Yeah, so nothing has been shipped into China. We keep 0:14:29.520 --> 0:14:32.920 waiting eminently to see the Chinese take the airplanes that 0:14:32.960 --> 0:14:36.080 have already been built for them and you know, are 0:14:36.080 --> 0:14:39.800 awaiting sort of delivery. Going has been remarketing. 0:14:39.240 --> 0:14:41.480 Some of those airplanes, So it kind of tells. 0:14:41.240 --> 0:14:43.520 You that whatever discussions they're happening with the Chinese about 0:14:43.720 --> 0:14:47.440 taking those airplanes was kind of stalling lately. It feels 0:14:47.480 --> 0:14:50.640 like there might be a thawing up coming. I think 0:14:50.680 --> 0:14:55.080 if you're China, China pre pandemic took almost three hundred 0:14:55.120 --> 0:14:57.600 or about three hundred hour bodies a year, and it 0:14:57.680 --> 0:15:00.640 was something not one company could do, not just Airbus, 0:15:00.760 --> 0:15:05.359 not just Boeing. Now post pandemic, as they have reutilized 0:15:05.400 --> 0:15:08.400 their fleets and such, they just haven't needed deliveries in 0:15:08.440 --> 0:15:09.680 that of that size. 0:15:09.840 --> 0:15:11.720 Last year. I think it was about one hundred narrow 0:15:11.720 --> 0:15:14.360 bodies they took. But if the Chinese look down the 0:15:14.440 --> 0:15:18.200 road and they think they're a three hundred plus narrow 0:15:18.240 --> 0:15:21.280 body delivery kind of market in the future and their 0:15:21.280 --> 0:15:23.680 COMACC nine one nine is not going to be ready 0:15:24.080 --> 0:15:29.120 to backfill or to supplant some of that Airbus and 0:15:29.160 --> 0:15:32.960 Boeing deliveries, they need to start thinking about having a 0:15:32.960 --> 0:15:36.320 better relationship with Boeing because Airbus won't be able to 0:15:36.320 --> 0:15:38.840 fill all of their needs. Plus, if you're going to 0:15:38.880 --> 0:15:43.200 negotiate with Airbus and you're not buying Boeing airplanes, you're 0:15:43.200 --> 0:15:47.240 not really in a very good negotiating space, right, and 0:15:47.320 --> 0:15:50.160 so I think they need to start to thaw that relationship. 0:15:50.400 --> 0:15:52.720 We'll see how big an order comes out. These order 0:15:52.760 --> 0:15:56.120 books are long right now, They're six, seven, eight years long. 0:15:56.240 --> 0:15:57.480 So they got to start to get in the back 0:15:57.520 --> 0:15:58.960 of the queue if they want some airplanes. 0:15:59.000 --> 0:16:03.080 I'm Boeing take to build a triple seven planes start 0:16:03.120 --> 0:16:05.560 to finish, Like if I put my order in now, 0:16:05.680 --> 0:16:06.720 when am I getting this plane? 0:16:08.400 --> 0:16:09.800 Well, I mean the challenge, like I said, is this 0:16:09.840 --> 0:16:12.000 airplane's not certified yet. We've got to get the FA 0:16:12.080 --> 0:16:15.520 to certify it. We think it's sort of twenty twenty 0:16:15.560 --> 0:16:18.640 five ish, right. I think there's two hundred and fifty 0:16:18.720 --> 0:16:22.240 three hundred ish kind of orders on the books right now, 0:16:22.480 --> 0:16:24.680 a bunch of them emirates. If they what if they 0:16:24.720 --> 0:16:28.120 build five a month, you'd be getting sixty out the door, 0:16:28.320 --> 0:16:30.920 you know, per year. We got five years of backlog. 0:16:31.280 --> 0:16:33.920 Golling will want to increase that if they see orders 0:16:33.960 --> 0:16:36.480 build and if you know, if they get enough of 0:16:36.640 --> 0:16:39.600 a backlog, nobody wants to ramp up production and ramp 0:16:39.640 --> 0:16:40.600 back down production. 0:16:41.040 --> 0:16:44.240 So they like to see a couple of years or 0:16:44.280 --> 0:16:47.880 more before they start thinking about increasing those rates. 0:16:47.920 --> 0:16:50.600 But you're still talking, you know, four or five years 0:16:50.640 --> 0:16:51.960 of backlog in the airplane. 0:16:52.000 --> 0:16:54.320 And then here's my long held opinion, which I express 0:16:54.400 --> 0:16:56.320 every time we talk about Boeing. They never should have 0:16:56.360 --> 0:16:59.880 left Seattle. Yeah, lost their engineering chops and the left Seattle. 0:17:00.000 --> 0:17:00.960 This is my personal opinion. 0:17:01.000 --> 0:17:02.120 Sure, hurt the culture. 0:17:02.960 --> 0:17:06.040 Yeah, you could argue though they're now in Virginia. I 0:17:06.080 --> 0:17:08.080 know they're close to one of their biggest customers. 0:17:08.280 --> 0:17:11.160 Yeah, I mean people come out to Seattle to see tech. 0:17:11.320 --> 0:17:13.000 That's a great part of the world. And then go 0:17:13.080 --> 0:17:15.080 down that highway that takes you back down to Seattle. 0:17:15.080 --> 0:17:17.680 From the airport. On the left hand side of the highway, 0:17:17.680 --> 0:17:20.679 it's all Boeing as far as I can see plane 0:17:20.760 --> 0:17:21.320 stack up. 0:17:21.640 --> 0:17:24.760 You're listening to the tape Cat's are live program Bloomberg 0:17:24.800 --> 0:17:28.399 Markets weekdays at ten am Eastern on Bloomberg Radio, the 0:17:28.480 --> 0:17:31.680 tune in app, Bloomberg dot Com, and the Bloomberg Business app. 0:17:31.720 --> 0:17:34.560 You can also listen live on Amazon Alexa from our 0:17:34.560 --> 0:17:39.800 flagship New York station, Just Say Alexa playing Bloomberg eleven thirty. 0:17:40.720 --> 0:17:43.840 Let's talk commercial real estate. Where are we in the 0:17:43.920 --> 0:17:47.560 cycle here? Margaret McKnight joins us here. She's a partner 0:17:47.560 --> 0:17:50.600 and head of real Estate Portfolio Solutions at Stepstone Group 0:17:50.920 --> 0:17:54.280 and Nasdak created stock symbil step to put into your 0:17:54.280 --> 0:17:57.520 Bloomberg terminal. She joins us live here in our New 0:17:57.600 --> 0:18:00.320 York studio. So, Margaret, this is how I frame out 0:18:00.560 --> 0:18:04.639 questions about our discussions about commercial real estate. The Lipstick Building, 0:18:05.200 --> 0:18:09.440 Third Avenue, I'm gonna call it fifty fourth Street or something. 0:18:09.480 --> 0:18:12.280 I don't know where it is iconic building, but it's 0:18:12.280 --> 0:18:15.919 third Avenue. It's not Park Avenue, it's not Fifth Avenue. 0:18:16.680 --> 0:18:19.560 When not Thing Trades, is it going to be a 0:18:19.600 --> 0:18:22.800 twenty percent discount, a forty percent discount, a sixty percent 0:18:22.840 --> 0:18:24.439 discount to pre pandemic levels? 0:18:24.920 --> 0:18:27.000 How bad is it out there for commercial real estate? 0:18:27.280 --> 0:18:29.000 So the first thing I want to do is say 0:18:29.040 --> 0:18:32.320 that there's office and all other office is getting hit 0:18:32.359 --> 0:18:35.560 by a cyclic pullback, especially the tech tenants pulling back 0:18:36.040 --> 0:18:38.919 and bi secular problems because of work from home, so 0:18:39.000 --> 0:18:42.520 it is materially worse than any other property type. The 0:18:42.600 --> 0:18:45.159 other property types, while dealing with the cycle, also have 0:18:45.280 --> 0:18:49.080 secular lift and we can talk about that, Okay. Right now, 0:18:49.200 --> 0:18:52.600 office is really struggling and the capital markets have pulled back, 0:18:52.640 --> 0:18:54.600 and most of what's going on in real estate is 0:18:54.600 --> 0:18:55.840 a capital market pullback. 0:18:56.240 --> 0:19:01.960 So but also retail, right, I mean, we've heard a 0:19:01.960 --> 0:19:05.400 few cases of malls and you're from San Francisco, where 0:19:06.320 --> 0:19:09.399 you know, the owner just says we're out, We're done, 0:19:09.840 --> 0:19:12.680 like Westfield did out out at that retail center. 0:19:12.760 --> 0:19:12.960 Right. 0:19:13.480 --> 0:19:17.000 So, just like office is getting hit by technology change 0:19:17.040 --> 0:19:19.200