1 00:00:02,640 --> 00:00:05,320 Speaker 1: Welcome to the Bloomberg Penl Podcast. I'm Paul Sweene. You, 2 00:00:05,360 --> 00:00:07,680 Speaker 1: along with my co host Lisa Brahma wits each day 3 00:00:07,720 --> 00:00:10,240 Speaker 1: we bring you the most noteworthy and useful interviews for 4 00:00:10,280 --> 00:00:12,520 Speaker 1: you and your money, whether at the grocery store or 5 00:00:12,560 --> 00:00:15,480 Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple 6 00:00:15,520 --> 00:00:17,959 Speaker 1: podcast or wherever you listen to podcasts, as well as 7 00:00:17,960 --> 00:00:23,280 Speaker 1: at Bloomberg dot com. Let's go back to the Amazon story. 8 00:00:23,360 --> 00:00:26,720 Speaker 1: I'm sure there was a real estate investors and speculators 9 00:00:26,720 --> 00:00:29,040 Speaker 1: and Queens were screaming into their pillows last night as 10 00:00:29,080 --> 00:00:32,200 Speaker 1: they were trying to process the news that Amazon will 11 00:00:32,280 --> 00:00:35,080 Speaker 1: not be coming to Long Island City. To get a 12 00:00:35,120 --> 00:00:37,440 Speaker 1: sense of what that means for the local real estate 13 00:00:37,479 --> 00:00:40,720 Speaker 1: market over in Queens, let's bring on Ken Weissenberg. Ken 14 00:00:40,800 --> 00:00:43,040 Speaker 1: is a partner in charge of the real estate services 15 00:00:43,080 --> 00:00:46,680 Speaker 1: group at Eisner amper Uh. He is in New York City. 16 00:00:46,840 --> 00:00:50,000 Speaker 1: So Ken, you know what does it really mean short 17 00:00:50,120 --> 00:00:54,520 Speaker 1: term and long term for the Queen's and nyc um 18 00:00:54,720 --> 00:00:58,720 Speaker 1: real estate market. On a short term basis, the speculation 19 00:00:58,800 --> 00:01:01,160 Speaker 1: that was going on in the Long Island City area 20 00:01:01,560 --> 00:01:03,680 Speaker 1: in terms of people buying up the condos that were 21 00:01:03,680 --> 00:01:07,160 Speaker 1: available is going to pretty much stop for the time being. Um. 22 00:01:07,160 --> 00:01:08,920 Speaker 1: I think the contracts that were into the two will 23 00:01:08,959 --> 00:01:10,880 Speaker 1: go through and be completed, but a lot of the 24 00:01:11,000 --> 00:01:13,880 Speaker 1: other transactions that work that were happening were probably going 25 00:01:13,920 --> 00:01:17,240 Speaker 1: to slow down or stop for the time being. The 26 00:01:17,319 --> 00:01:20,080 Speaker 1: overall market in the Long Island City area is continuing 27 00:01:20,120 --> 00:01:23,920 Speaker 1: to show, you know, significant progress and growth. Uh. If 28 00:01:23,920 --> 00:01:25,679 Speaker 1: you look at the site that Amazon was going to pick, 29 00:01:25,720 --> 00:01:28,560 Speaker 1: it's in an opportunity zone. There's huge interest in the 30 00:01:28,600 --> 00:01:31,640 Speaker 1: real estate community and developing an opportunity zones. The site 31 00:01:31,680 --> 00:01:34,840 Speaker 1: happens to be basically on the water on the East River. Um, 32 00:01:34,840 --> 00:01:38,520 Speaker 1: it's a prime for development. I think you'll see a 33 00:01:38,560 --> 00:01:41,560 Speaker 1: project happen there, whether Amazon, it's Amazon or someone else. 34 00:01:42,400 --> 00:01:43,800 Speaker 1: In other words, do you think it's not that big 35 00:01:43,800 --> 00:01:46,360 Speaker 1: of a deal. I think it's a big deal. I mean, 36 00:01:46,400 --> 00:01:50,480 Speaker 1: I think the political ramifications are a big deal to 37 00:01:50,840 --> 00:01:54,000 Speaker 1: two sides within the Democratic Party have to kind of 38 00:01:54,040 --> 00:01:59,120 Speaker 1: work things out. But Umland City is going to continue 39 00:01:59,160 --> 00:02:01,120 Speaker 1: to grow. New York City is going to continue to grow. 40 00:02:01,320 --> 00:02:02,840 Speaker 1: When you look at the number of jobs in New 41 00:02:02,920 --> 00:02:05,680 Speaker 1: York City, Yes, another twenty five thousand jobs would have 42 00:02:05,680 --> 00:02:09,640 Speaker 1: been great um, the construction jobs, you know, to build 43 00:02:09,639 --> 00:02:12,200 Speaker 1: that that project would have been great, But other things 44 00:02:12,240 --> 00:02:15,480 Speaker 1: will be built, other jobs will come in. New York 45 00:02:15,600 --> 00:02:18,760 Speaker 1: is out out growing San Francisco as a tech center. 46 00:02:19,520 --> 00:02:23,280 Speaker 1: UM in Long Island City is seven minutes from Midtown 47 00:02:23,440 --> 00:02:27,360 Speaker 1: by subway. So, Ken, are you concerned, however, that what 48 00:02:27,480 --> 00:02:29,600 Speaker 1: happened here with Amazon in the city, in a state 49 00:02:29,639 --> 00:02:32,200 Speaker 1: of New York perhaps might send a signal to other 50 00:02:32,240 --> 00:02:35,520 Speaker 1: corporations considering New York City, New York City that maybe 51 00:02:35,600 --> 00:02:38,520 Speaker 1: New York is not open for business. I don't think so. 52 00:02:38,800 --> 00:02:45,080 Speaker 1: I think this was a UM targeted political campaign UM 53 00:02:45,280 --> 00:02:49,079 Speaker 1: that ended Amazon. Amazon didn't want to have any controversy 54 00:02:49,080 --> 00:02:53,560 Speaker 1: around this UM with open arms. And then you know, 55 00:02:53,600 --> 00:02:55,120 Speaker 1: there was a lot of a lot of a lot 56 00:02:55,160 --> 00:02:59,880 Speaker 1: of pushback from local politicians. But honestly, Ken, I gotta wonder, 57 00:03:00,120 --> 00:03:02,960 Speaker 1: if Amazon didn't want local pushback, why didn't they do 58 00:03:03,040 --> 00:03:06,000 Speaker 1: more groundwork ahead of this. I mean, it seems kind 59 00:03:06,040 --> 00:03:09,920 Speaker 1: of strange that everybody was shocked by this decision on 60 00:03:09,960 --> 00:03:12,880 Speaker 1: the ground, uh, and that Amazon didn't realize that this 61 00:03:12,919 --> 00:03:15,680 Speaker 1: would be waiting for them. That is kind of strange. 62 00:03:16,040 --> 00:03:20,800 Speaker 1: I would have thought that the political politicians would have 63 00:03:20,800 --> 00:03:24,880 Speaker 1: been lined up, you know, either for against way beforehand. Yeah. 64 00:03:25,040 --> 00:03:27,720 Speaker 1: So here's my question for you, Ken, Um. Focused on 65 00:03:27,760 --> 00:03:29,560 Speaker 1: the real estate sector, you're saying that you don't think 66 00:03:29,560 --> 00:03:31,440 Speaker 1: it's going to have a material effect that there, that 67 00:03:31,560 --> 00:03:34,120 Speaker 1: the area will continue to grow. But we'll put a 68 00:03:34,120 --> 00:03:35,800 Speaker 1: long term, I mean a short term. It's going to 69 00:03:35,880 --> 00:03:38,320 Speaker 1: be a shock to the system, because this was a 70 00:03:38,360 --> 00:03:41,440 Speaker 1: real impetus to grow that that particular section of Long 71 00:03:41,480 --> 00:03:46,760 Speaker 1: Island City could prices decline unreal estate there um from 72 00:03:46,800 --> 00:03:51,280 Speaker 1: the speculative prices that hit recently. Yes, in a long term, 73 00:03:51,320 --> 00:03:54,080 Speaker 1: I think they'll come back. I think they'll be just 74 00:03:54,120 --> 00:03:56,640 Speaker 1: as strong and the growth we will continue. So, Ken, 75 00:03:56,720 --> 00:03:59,080 Speaker 1: does this call into question at all the use of 76 00:03:59,120 --> 00:04:02,400 Speaker 1: incentive to corporations. Let's just focus on New York City 77 00:04:02,400 --> 00:04:04,160 Speaker 1: that seemed to be one of the areas that received 78 00:04:04,160 --> 00:04:06,720 Speaker 1: a lot of pushback. Um. Do you think the city 79 00:04:06,760 --> 00:04:09,560 Speaker 1: and the state will rethink some of the incentives it 80 00:04:09,680 --> 00:04:12,720 Speaker 1: offers for corporations. Well, this this was quite a prize 81 00:04:12,760 --> 00:04:16,760 Speaker 1: for whoever got the headquarters UM, and we were in 82 00:04:16,839 --> 00:04:20,800 Speaker 1: competition with almost every major metropolitan area in the country 83 00:04:21,200 --> 00:04:26,040 Speaker 1: for the H two q UM for h Q two 84 00:04:26,160 --> 00:04:29,320 Speaker 1: rather UM so I think I think they had to 85 00:04:29,360 --> 00:04:32,520 Speaker 1: put together sweeteners to make make the deal happen. But 86 00:04:32,560 --> 00:04:36,240 Speaker 1: that's been going on so you know decades where they 87 00:04:36,279 --> 00:04:40,159 Speaker 1: have been enticing large corporations to move headquarters with with sweeteners. 88 00:04:40,760 --> 00:04:45,679 Speaker 1: I think that will continue. UM. Maybe you know, maybe 89 00:04:45,680 --> 00:04:49,000 Speaker 1: the package was too sweet under the current economic climate, 90 00:04:49,440 --> 00:04:53,560 Speaker 1: UM and political climate. But you know, even without the 91 00:04:53,960 --> 00:04:56,280 Speaker 1: packages that they put together, there was you know, large 92 00:04:56,279 --> 00:05:00,000 Speaker 1: incentives under under existing law that they could have benefited from. 93 00:05:00,000 --> 00:05:02,560 Speaker 1: One thing that I'm wondering is how much of a 94 00:05:02,600 --> 00:05:05,719 Speaker 1: pressure the subway system in New York affected this. In 95 00:05:05,720 --> 00:05:09,239 Speaker 1: other words, that train line that went to Long Island 96 00:05:09,279 --> 00:05:12,800 Speaker 1: City is already very crowded that if Amazon was going 97 00:05:12,839 --> 00:05:15,000 Speaker 1: to come, it would strain the infrastructure more than it 98 00:05:15,040 --> 00:05:17,080 Speaker 1: would help it in the short term, and in the 99 00:05:17,120 --> 00:05:19,400 Speaker 1: long term that could make the city less appealing. What 100 00:05:19,440 --> 00:05:21,240 Speaker 1: do you say to that and sort of what will 101 00:05:21,279 --> 00:05:26,800 Speaker 1: this do to efforts to upgrade the subway system. When 102 00:05:26,800 --> 00:05:29,840 Speaker 1: you look at the overall infrastructure for New York, the 103 00:05:29,920 --> 00:05:32,760 Speaker 1: infrastructure has been in place probably longer than any other 104 00:05:32,800 --> 00:05:36,279 Speaker 1: major major metropolitan area in the United States, UM, and 105 00:05:36,360 --> 00:05:40,880 Speaker 1: it does need refresh and continue rebuild. The first major 106 00:05:40,920 --> 00:05:43,240 Speaker 1: project in the subway system in fifty years was the 107 00:05:43,240 --> 00:05:46,039 Speaker 1: Second Avenue subway line, and that's been going on for 108 00:05:46,080 --> 00:05:50,160 Speaker 1: thirty years and not finished yet. Uh. They do need 109 00:05:50,240 --> 00:05:53,839 Speaker 1: to put significant investment into the infrastructure of New York 110 00:05:53,839 --> 00:05:57,200 Speaker 1: City and the major metropolitan areas around the country. That's 111 00:05:57,240 --> 00:06:01,039 Speaker 1: more of a federal UM and say combined program, and 112 00:06:01,040 --> 00:06:03,599 Speaker 1: I'd like to see that happen. UM. A lot of 113 00:06:03,600 --> 00:06:06,280 Speaker 1: it will be done with private partner you know, public 114 00:06:06,279 --> 00:06:08,800 Speaker 1: private partnerships, like what's going on at the airport's right now. 115 00:06:09,839 --> 00:06:12,880 Speaker 1: So can as New York City in particular continues to 116 00:06:12,920 --> 00:06:15,800 Speaker 1: try to attract a new corporate citizens and they've had 117 00:06:15,800 --> 00:06:19,039 Speaker 1: some tremendous success with technology companies, with Google having a 118 00:06:19,040 --> 00:06:24,720 Speaker 1: big presence in Lower Manhattan, Facebook as well. UM. Talk 119 00:06:24,760 --> 00:06:26,960 Speaker 1: to me about how the city positions its cost of 120 00:06:27,040 --> 00:06:29,880 Speaker 1: living challenges to some of these corporations and how that 121 00:06:29,920 --> 00:06:32,680 Speaker 1: gets balanced, because you know, that has to be a 122 00:06:32,680 --> 00:06:37,360 Speaker 1: big challenge for New York cities that attracts corporations. Our 123 00:06:37,360 --> 00:06:40,120 Speaker 1: rent is cheaper than San Francisco, not by much, but 124 00:06:40,160 --> 00:06:44,000 Speaker 1: it's a little cheaper than San Francisco. UM. I think 125 00:06:44,000 --> 00:06:46,359 Speaker 1: the city is is and and state have to address. 126 00:06:46,400 --> 00:06:49,200 Speaker 1: You know that the housing need for affordable housing for 127 00:06:49,240 --> 00:06:56,040 Speaker 1: the workforce. Workforce meaning UM policeman, teachers, UM office workers, 128 00:06:56,480 --> 00:07:02,480 Speaker 1: UM young lawyers and accountants. The prices of Manhattan are 129 00:07:02,800 --> 00:07:07,160 Speaker 1: basically pushing people out. UM. You're seeing development happening in 130 00:07:07,680 --> 00:07:12,080 Speaker 1: the outer boroughs. Brooklyn and Queens are seeing a tremendous 131 00:07:12,080 --> 00:07:15,000 Speaker 1: amount of development interests. The Bronx is atreading to see 132 00:07:15,000 --> 00:07:20,600 Speaker 1: significant development interests and certain companies are developing in the 133 00:07:20,600 --> 00:07:23,280 Speaker 1: transit hubs in the suburbs. So that's going to take 134 00:07:23,320 --> 00:07:25,040 Speaker 1: some sub of the pressure off New York City. But 135 00:07:25,120 --> 00:07:28,600 Speaker 1: that also requires infrastructure because people have to be on 136 00:07:28,600 --> 00:07:34,600 Speaker 1: on accessible and clean, safe transit. Ken Weisenberg, thank you 137 00:07:34,640 --> 00:07:36,760 Speaker 1: so much for being with us. Ken Weisenberg, partner in 138 00:07:36,840 --> 00:07:39,200 Speaker 1: charge of the real estate services group at Eisner Amper 139 00:07:39,560 --> 00:07:44,520 Speaker 1: in New York. Talking about the potential ramifications of Amazon 140 00:07:44,600 --> 00:07:47,800 Speaker 1: withdrawing from the Long Island City site for its headquarters 141 00:07:47,800 --> 00:07:51,840 Speaker 1: to project a HQ two UH seems to be a 142 00:07:52,000 --> 00:07:54,440 Speaker 1: growing feeling that in the short run it might have 143 00:07:54,480 --> 00:07:57,240 Speaker 1: an issue, it might have an impact on prices over 144 00:07:57,240 --> 00:08:00,480 Speaker 1: the long term, a little bit more optimism New York 145 00:08:00,520 --> 00:08:03,680 Speaker 1: and in terms of its tech growth yeah, we've we've 146 00:08:03,720 --> 00:08:06,160 Speaker 1: already seen a lot of tech coming as I mentioned before. 147 00:08:06,200 --> 00:08:09,240 Speaker 1: You know, Facebook and Alphabet is here, and of course 148 00:08:09,280 --> 00:08:12,000 Speaker 1: Cornell has their big tech center UH in the city 149 00:08:12,040 --> 00:08:14,400 Speaker 1: as well, so up and we've seen news reports about 150 00:08:14,400 --> 00:08:16,520 Speaker 1: how you know, New York is adding more tech jobs 151 00:08:16,520 --> 00:08:18,720 Speaker 1: than than San Francisco. So it certainly has a strong 152 00:08:18,800 --> 00:08:21,640 Speaker 1: foundation there. But you have to wonder about the political 153 00:08:21,720 --> 00:08:25,360 Speaker 1: support of you know, making tech even a bigger part 154 00:08:25,360 --> 00:08:27,760 Speaker 1: of the New York City corporate scene. When you think 155 00:08:27,760 --> 00:08:31,800 Speaker 1: about the twenty seven billion dollars of economic value added 156 00:08:31,840 --> 00:08:34,760 Speaker 1: over or created over twenty five year period by this Walmart, 157 00:08:34,960 --> 00:08:37,760 Speaker 1: I mean by the Amazon move against the three billion 158 00:08:37,800 --> 00:08:43,079 Speaker 1: dollars in subsidies. That seems like favorable economics. Yet that 159 00:08:43,160 --> 00:08:57,040 Speaker 1: perhaps wasn't enough. Let's find out a little bit more 160 00:08:57,120 --> 00:09:01,480 Speaker 1: about what is expected to come from this declaration of 161 00:09:01,520 --> 00:09:04,680 Speaker 1: an emergency. And Edgar Tennis joining us now congressional reporter 162 00:09:04,760 --> 00:09:08,240 Speaker 1: for Bloomberg News, joining us from One Studios in Washington, 163 00:09:08,320 --> 00:09:10,800 Speaker 1: d c uh and thank you so much for being 164 00:09:10,840 --> 00:09:14,720 Speaker 1: with us. So talk about what the precedent is for 165 00:09:14,840 --> 00:09:19,120 Speaker 1: declaring a state of emergency, a national emergency to divert 166 00:09:19,200 --> 00:09:22,240 Speaker 1: funds away from other projects towards something that the president 167 00:09:22,280 --> 00:09:25,600 Speaker 1: would like to see. Well, that's that's an interesting question. 168 00:09:25,600 --> 00:09:28,520 Speaker 1: It's kind of two different questions because declaring a national 169 00:09:28,559 --> 00:09:32,360 Speaker 1: emergency is not unheard of. Barack Obama declared a national 170 00:09:32,360 --> 00:09:36,839 Speaker 1: emergency to combat the swine flu. George George W. Bush 171 00:09:36,880 --> 00:09:40,200 Speaker 1: declared and a national emergency after nine eleven, So declaring 172 00:09:40,200 --> 00:09:44,240 Speaker 1: a national emergency happens from time to time. But yours 173 00:09:44,280 --> 00:09:47,000 Speaker 1: the second part of your question, to shift funds from 174 00:09:47,040 --> 00:09:50,480 Speaker 1: one part of the budget to another part is unprecedented. 175 00:09:50,520 --> 00:09:52,680 Speaker 1: And that's where we're going to run into a real 176 00:09:52,760 --> 00:09:56,520 Speaker 1: constitutional challenge because according to Article one of the Constitution, 177 00:09:56,840 --> 00:09:59,040 Speaker 1: it's Congress that has the power of the purse, and 178 00:09:59,040 --> 00:10:02,720 Speaker 1: there's an appropriation process that goes through Congress. And what 179 00:10:02,800 --> 00:10:05,200 Speaker 1: the president is trying to do with this declaration is 180 00:10:05,520 --> 00:10:11,200 Speaker 1: divert taxpayer money to his priority outside the regular appropriation process, 181 00:10:11,240 --> 00:10:14,960 Speaker 1: and that's gonna be challenged on constitutional grounds, clearly, um 182 00:10:15,000 --> 00:10:17,800 Speaker 1: I think, Lisa. The issue here is we know his 183 00:10:17,920 --> 00:10:21,079 Speaker 1: intention is to uh continue to fund the board of Wall. 184 00:10:21,120 --> 00:10:23,640 Speaker 1: The question is what type of uh I think? Uh 185 00:10:24,040 --> 00:10:26,960 Speaker 1: I think challenge will he received various members of Congress 186 00:10:27,000 --> 00:10:29,559 Speaker 1: and over what time frame. Well, I will say this, 187 00:10:29,840 --> 00:10:32,440 Speaker 1: it's interesting to see how he's going to try to 188 00:10:32,520 --> 00:10:35,000 Speaker 1: cast this as a win, and it will be interesting 189 00:10:35,000 --> 00:10:37,600 Speaker 1: to see President Trump's tone. I was interested in the 190 00:10:37,640 --> 00:10:41,400 Speaker 1: Wall Street Journal opinion article that came out today from 191 00:10:41,440 --> 00:10:46,760 Speaker 1: the editorial board talking about how signing declaring a national 192 00:10:46,760 --> 00:10:51,880 Speaker 1: emergency is a problem and is actually basically how he 193 00:10:51,920 --> 00:10:54,079 Speaker 1: painted himself into a corner. Kind of interesting the Wall 194 00:10:54,120 --> 00:10:58,520 Speaker 1: Street Journal editorial page, usually a conservative place with his 195 00:10:58,679 --> 00:11:02,959 Speaker 1: conservative opinions, but really highlighting this fissure in the Republican 196 00:11:03,000 --> 00:11:05,840 Speaker 1: party over declaring a national emergency? Will this give a 197 00:11:05,880 --> 00:11:09,559 Speaker 1: precedent to the Democrats to do the same if there 198 00:11:09,640 --> 00:11:13,200 Speaker 1: is a Democratic president? Also trying to figure out what 199 00:11:13,280 --> 00:11:16,839 Speaker 1: kinds of lawsuits this exposes the Trump administration to not 200 00:11:16,960 --> 00:11:21,200 Speaker 1: only from opponents of some of these funding read diversions, 201 00:11:21,440 --> 00:11:24,800 Speaker 1: but also frankly, the residents that would have to exit 202 00:11:24,880 --> 00:11:27,560 Speaker 1: their homes due to eminent domain in order to allow 203 00:11:27,640 --> 00:11:30,400 Speaker 1: this wall to be built. So a lot of issues here. 204 00:11:30,440 --> 00:11:31,960 Speaker 1: This is going to get tied up in the courts 205 00:11:32,000 --> 00:11:35,000 Speaker 1: for a while. Uh. Also a question of where the 206 00:11:35,040 --> 00:11:37,480 Speaker 1: money is going to come from, and you know what 207 00:11:37,520 --> 00:11:40,440 Speaker 1: projects will have to be jeopardized as a result of that. 208 00:11:40,840 --> 00:11:44,080 Speaker 1: But that said, there still is a core of President 209 00:11:44,120 --> 00:11:46,480 Speaker 1: Trump supporters who would like to see the wall. He 210 00:11:46,559 --> 00:11:49,960 Speaker 1: has made this a campaign speech issue, he has made 211 00:11:49,960 --> 00:11:53,440 Speaker 1: this one of the hallmarks of his tenure, and he 212 00:11:53,640 --> 00:11:55,880 Speaker 1: doesn't want to go down without this victory, even if 213 00:11:55,880 --> 00:11:58,560 Speaker 1: it's just on paper. Yeah, it could be a puperic victory, 214 00:11:58,600 --> 00:12:02,000 Speaker 1: but clearly looks President Trump and the administration is going 215 00:12:02,040 --> 00:12:03,520 Speaker 1: to fight very hard for this. We do have Anna 216 00:12:03,559 --> 00:12:06,520 Speaker 1: Edgerton back Coggression, reporter for Bloomberg News, calling from our 217 00:12:06,520 --> 00:12:08,960 Speaker 1: Bloomberg ninety nine one studio in Washington, d C. Anna, 218 00:12:09,440 --> 00:12:11,640 Speaker 1: thanks for coming back up. I guess the question here 219 00:12:11,720 --> 00:12:13,520 Speaker 1: now is just kind of next steps. How does this 220 00:12:13,520 --> 00:12:16,160 Speaker 1: play out in your opinion there? So, there are two 221 00:12:16,200 --> 00:12:19,120 Speaker 1: things that we're looking for from the democratically led House 222 00:12:19,120 --> 00:12:22,000 Speaker 1: to Representatives. The first is a legal challenge. I spoke 223 00:12:22,080 --> 00:12:25,559 Speaker 1: with Jerry Nadler, he's the Democrat in charge of the 224 00:12:25,640 --> 00:12:29,800 Speaker 1: Judiciary Committee, and he said that the House Council will 225 00:12:29,960 --> 00:12:33,520 Speaker 1: pursue legal challenges to this. The other avenue to challenge 226 00:12:33,559 --> 00:12:37,040 Speaker 1: this is a joint resolution that would start in the 227 00:12:37,080 --> 00:12:40,520 Speaker 1: House of Representatives. So, uh, Nadler has already said that 228 00:12:40,559 --> 00:12:44,840 Speaker 1: he is going to put question this, this National Emergency 229 00:12:44,880 --> 00:12:48,200 Speaker 1: declaration in a resolution now that's privileged, so that means 230 00:12:48,240 --> 00:12:50,880 Speaker 1: it will go through the Judiciary Committee, it will go 231 00:12:51,040 --> 00:12:53,600 Speaker 1: put on the floor of the House. It will probably 232 00:12:53,679 --> 00:12:56,760 Speaker 1: pass a Democratic House, and within fifteen days it has 233 00:12:56,800 --> 00:12:59,000 Speaker 1: to be voted in the Senate. So it's not up 234 00:12:59,000 --> 00:13:01,760 Speaker 1: to Mitch McConnell, the Senate majority leader, whether or not 235 00:13:01,800 --> 00:13:03,720 Speaker 1: to put it on the floor. So it's gonna be 236 00:13:03,760 --> 00:13:07,640 Speaker 1: really interesting to see if all Democrats vote against this 237 00:13:07,760 --> 00:13:11,120 Speaker 1: National Emergency declaration and some Republicans who have kind of 238 00:13:11,320 --> 00:13:15,240 Speaker 1: constitutional qualms with this um, it could pass because it 239 00:13:15,280 --> 00:13:17,360 Speaker 1: only needs to be one votes. If it's privilege, it 240 00:13:17,400 --> 00:13:20,000 Speaker 1: doesn't have to get past the filibuster. I think it's 241 00:13:20,040 --> 00:13:26,360 Speaker 1: interesting though, Mitch McConnell supports declaration of a national emergency, 242 00:13:26,440 --> 00:13:30,200 Speaker 1: and we've seen this, uh, just the leadership of the 243 00:13:30,240 --> 00:13:32,880 Speaker 1: Republicans seems to be behind President Trump. What can you 244 00:13:32,960 --> 00:13:36,280 Speaker 1: draw from that? That was a really interesting development, and 245 00:13:36,520 --> 00:13:39,920 Speaker 1: he almost kind of used that as a way to 246 00:13:40,080 --> 00:13:44,000 Speaker 1: encourage some of his hesitant members to vote for the 247 00:13:44,240 --> 00:13:46,959 Speaker 1: spending bill yesterday, to say, you know, there will be 248 00:13:47,040 --> 00:13:49,280 Speaker 1: wall money coming from elsewhere, the President will declare a 249 00:13:49,360 --> 00:13:52,640 Speaker 1: national emergency. I think this is a political calculation from 250 00:13:52,679 --> 00:13:55,320 Speaker 1: Mitch McConnell. He knows that this is a very strong 251 00:13:55,600 --> 00:13:59,000 Speaker 1: campaign promise from the President and in order to kind 252 00:13:59,040 --> 00:14:01,720 Speaker 1: of keep that core base with them, they need to 253 00:14:01,760 --> 00:14:04,920 Speaker 1: do more than they were allowed to do under the 254 00:14:05,080 --> 00:14:08,720 Speaker 1: normal appropriations process and divided government. So it definitely looks 255 00:14:08,760 --> 00:14:12,040 Speaker 1: like a kind of a a political move the McConnell 256 00:14:12,120 --> 00:14:15,600 Speaker 1: might not like, but kind of weighing what's at stake, 257 00:14:15,840 --> 00:14:18,320 Speaker 1: it felt like he had to so, and what's the 258 00:14:18,360 --> 00:14:22,480 Speaker 1: sense of where the rank and file Republican Party, particularly 259 00:14:22,520 --> 00:14:25,040 Speaker 1: in the in the Senate, where are they falling down 260 00:14:25,160 --> 00:14:28,520 Speaker 1: on this issue? Are they really willing to go uh 261 00:14:28,560 --> 00:14:32,160 Speaker 1: and stand behind the president on this. It's pretty divided 262 00:14:32,240 --> 00:14:34,920 Speaker 1: right now and senators yesterday we're a little wary to 263 00:14:35,000 --> 00:14:37,240 Speaker 1: kind of get ahead of their skis before the national 264 00:14:37,280 --> 00:14:41,360 Speaker 1: declaration is the emergency declaration is actually declared, and also 265 00:14:41,400 --> 00:14:44,040 Speaker 1: to see which pots of money will be tapped for this. 266 00:14:44,560 --> 00:14:48,000 Speaker 1: But with there was one really interesting response from Mike 267 00:14:48,120 --> 00:14:52,200 Speaker 1: Simpson that I wanted to highlight. He said that he 268 00:14:52,280 --> 00:14:55,360 Speaker 1: does think the president has pretty broad legal authority to 269 00:14:55,400 --> 00:14:58,400 Speaker 1: do this the way that the National Emergency Statute is written. 270 00:14:58,880 --> 00:15:01,800 Speaker 1: But he does worry about the precedent, and he said, 271 00:15:02,120 --> 00:15:04,840 Speaker 1: you know, I do think the president has legal to 272 00:15:04,880 --> 00:15:09,080 Speaker 1: do this. Maybe it's the best course of action since 273 00:15:09,120 --> 00:15:11,960 Speaker 1: he couldn't get Wall money any other way. But the 274 00:15:12,040 --> 00:15:14,320 Speaker 1: next time we have a democratic president, we could have 275 00:15:14,400 --> 00:15:17,080 Speaker 1: a healthcare national emergency that gets us Medicare for all. 276 00:15:17,400 --> 00:15:20,120 Speaker 1: We could have a climate emergency that gets us the 277 00:15:20,280 --> 00:15:23,520 Speaker 1: Green New Deal. So, you know, kind of opening this 278 00:15:24,200 --> 00:15:28,240 Speaker 1: up as an acceptable practice really kind of changes the 279 00:15:28,280 --> 00:15:31,080 Speaker 1: way to two bridges of government interact. We're speaking with 280 00:15:31,120 --> 00:15:35,640 Speaker 1: Anna Edgerton, uh congressional reporter for Bloomberg News as we 281 00:15:35,680 --> 00:15:39,680 Speaker 1: await President Trump to make comments after his expected signing 282 00:15:39,920 --> 00:15:43,000 Speaker 1: of the bill to stave off another government shutdown, as 283 00:15:43,040 --> 00:15:45,960 Speaker 1: well as a declaration of a national emergency, which he's 284 00:15:46,000 --> 00:15:49,280 Speaker 1: also expected to do. And I'd love to get your sense, 285 00:15:49,520 --> 00:15:52,840 Speaker 1: just going forward, where would the money actually come from. 286 00:15:52,880 --> 00:15:55,640 Speaker 1: Can you give us a sense of the projects that 287 00:15:55,720 --> 00:15:59,480 Speaker 1: could get delayed, postponed, not happen as a result of 288 00:15:59,560 --> 00:16:03,120 Speaker 1: money diverted to the Wall. Should this happen? Yeah, My 289 00:16:03,600 --> 00:16:07,520 Speaker 1: colleague Margaret's talent reported yesterday that the president has identified 290 00:16:07,760 --> 00:16:11,440 Speaker 1: eight billion dollars, almost eight billion dollars that could be 291 00:16:11,560 --> 00:16:14,520 Speaker 1: directed for this purpose, and the kind of pots of 292 00:16:14,560 --> 00:16:18,080 Speaker 1: money we're looking at our unobligated funds that could come 293 00:16:18,080 --> 00:16:22,000 Speaker 1: from military accounts, although speaking with Jerry Nadler, a Democratic 294 00:16:22,080 --> 00:16:24,680 Speaker 1: chair of the Judiciary Committee yesterday, he said, you can't 295 00:16:24,760 --> 00:16:28,680 Speaker 1: use military money for this purpose because military money can 296 00:16:28,720 --> 00:16:32,000 Speaker 1: only be directed to military uses, and by law, the 297 00:16:32,120 --> 00:16:36,320 Speaker 1: military can't enforce domestic law, so that could be one snag. 298 00:16:36,360 --> 00:16:40,680 Speaker 1: We could also see money being moved from UH funds 299 00:16:40,760 --> 00:16:44,000 Speaker 1: to rebuild an air base in Florida that was damaged 300 00:16:44,040 --> 00:16:47,800 Speaker 1: by the hurricane, and also in Campbell June in North 301 00:16:47,840 --> 00:16:50,600 Speaker 1: Carolina that was damaged by the floods. So there are 302 00:16:50,600 --> 00:16:53,200 Speaker 1: a few different things that the president's looking at, but um, 303 00:16:53,280 --> 00:16:56,680 Speaker 1: we expect that to be clear pretty much before the 304 00:16:56,680 --> 00:17:01,080 Speaker 1: beginning of next week. So Anna, Obviously, this border wall 305 00:17:01,200 --> 00:17:06,359 Speaker 1: is a arguably the foundational element of the Trump presidency, 306 00:17:06,400 --> 00:17:08,679 Speaker 1: at least to this point. But is there any sense 307 00:17:08,800 --> 00:17:12,640 Speaker 1: that you know, fatigue as setting in within the administration 308 00:17:12,720 --> 00:17:15,880 Speaker 1: that maybe it's just not worth it. Too many roadblocks 309 00:17:15,920 --> 00:17:17,520 Speaker 1: here and it doesn't seem to be a clear path 310 00:17:18,320 --> 00:17:22,240 Speaker 1: to get this funding. I don't know if there's I mean, 311 00:17:22,400 --> 00:17:24,240 Speaker 1: I think there's a kind of a constant fatigue in 312 00:17:24,280 --> 00:17:27,560 Speaker 1: the administration just because it's just, you know, kind of happens. 313 00:17:27,600 --> 00:17:31,600 Speaker 1: It's such a high frequency. But there's certainly as a 314 00:17:31,800 --> 00:17:35,400 Speaker 1: kind of political concern that the more the president kind 315 00:17:35,400 --> 00:17:40,280 Speaker 1: of sacrifices or puts himselves out there to pursue this 316 00:17:40,320 --> 00:17:43,199 Speaker 1: one priority, the more damage she could be doing in 317 00:17:43,359 --> 00:17:47,480 Speaker 1: other areas. Like for example, the government shut down, you know, 318 00:17:47,680 --> 00:17:51,200 Speaker 1: was supported by those who really really want to build 319 00:17:51,200 --> 00:17:55,000 Speaker 1: a border wall, but it really made the president's approval 320 00:17:55,080 --> 00:17:57,040 Speaker 1: ratings take a hit, and you kind of see him 321 00:17:57,080 --> 00:17:59,280 Speaker 1: compensating for that a little bit. There was an really 322 00:17:59,320 --> 00:18:02,919 Speaker 1: interesting peace in political last week kind of highlighting the 323 00:18:03,640 --> 00:18:08,600 Speaker 1: overt embrace of pro life priorities and kind of really 324 00:18:08,640 --> 00:18:11,680 Speaker 1: attacking the state laws that have been in the news 325 00:18:11,720 --> 00:18:14,880 Speaker 1: recently about abortion. And that's the president trying to shore 326 00:18:14,960 --> 00:18:18,399 Speaker 1: up his evangelical basis. So even as he pursues the 327 00:18:18,480 --> 00:18:21,159 Speaker 1: wall and does everything he can, maybe even you know, 328 00:18:21,240 --> 00:18:23,400 Speaker 1: using some of his political capital to do that, he's 329 00:18:23,400 --> 00:18:26,560 Speaker 1: trying to kind of shore up his coalition and other 330 00:18:26,600 --> 00:18:30,600 Speaker 1: areas as well, and adgertain we will please be speaking 331 00:18:30,600 --> 00:18:44,800 Speaker 1: with you soon. Well, lots of news coming out of Washington, 332 00:18:44,880 --> 00:18:48,120 Speaker 1: d c is. We just listened to President Trump's press 333 00:18:48,200 --> 00:18:53,320 Speaker 1: conference about the government funding UH for border security, talking 334 00:18:53,359 --> 00:18:56,359 Speaker 1: about China trade. It's got a sense of how a 335 00:18:56,359 --> 00:18:59,840 Speaker 1: lot of these geopolitical issues are impacting the US and 336 00:19:00,040 --> 00:19:02,680 Speaker 1: global credit market. We bring in Michael Temple. Michael's a 337 00:19:02,760 --> 00:19:06,000 Speaker 1: director of Corporate Credit US and portfolio manager for a 338 00:19:06,080 --> 00:19:09,640 Speaker 1: Mundy Pioneer. A Mundy Pioneer has approximately eighty billion dollars 339 00:19:09,720 --> 00:19:13,240 Speaker 1: under management. Michael joins us here in our Bloomberg Interactive 340 00:19:13,520 --> 00:19:17,560 Speaker 1: Broker studio. Michael, thanks for being with us. UM A 341 00:19:17,600 --> 00:19:21,120 Speaker 1: lot of geopolitical noise out there, news out there, whether 342 00:19:21,160 --> 00:19:23,560 Speaker 1: it is China, whether it is the US government shutdown, 343 00:19:23,560 --> 00:19:27,080 Speaker 1: whether it's Brexit. How does that factor into your analysis 344 00:19:27,160 --> 00:19:30,000 Speaker 1: of the credit markets? Well, you know, I think it's 345 00:19:30,000 --> 00:19:32,280 Speaker 1: a top down factor that we have to think about. 346 00:19:32,880 --> 00:19:35,840 Speaker 1: How it might affect um consumer confidence, how it might 347 00:19:35,880 --> 00:19:39,400 Speaker 1: affect business confidence, and whether or not at the margin 348 00:19:39,880 --> 00:19:43,320 Speaker 1: it's going to create a slower economic activity, either in 349 00:19:43,359 --> 00:19:45,760 Speaker 1: the US or overseas. So if you look at the 350 00:19:45,800 --> 00:19:49,080 Speaker 1: bottom up, you see companies that still have pretty high leverage, 351 00:19:49,119 --> 00:19:51,480 Speaker 1: even though there's some d leveraging going on. You see 352 00:19:51,720 --> 00:19:54,760 Speaker 1: YO bond yields that have come down dramatically more than 353 00:19:54,800 --> 00:19:57,760 Speaker 1: five percent returns so far this year. Are we out 354 00:19:57,760 --> 00:19:59,720 Speaker 1: of the woods with respect to another credit crisis or 355 00:19:59,720 --> 00:20:02,080 Speaker 1: could we see another one? Well? I think a lot 356 00:20:02,080 --> 00:20:05,959 Speaker 1: of it depends on whether or not the slowdown that 357 00:20:06,000 --> 00:20:09,879 Speaker 1: we're seeing globally, in particular in Europe and you just 358 00:20:09,960 --> 00:20:14,360 Speaker 1: heard about China, whether or not that ends up causing 359 00:20:14,359 --> 00:20:17,080 Speaker 1: a much more rapid deceleration of growth in the US. 360 00:20:17,480 --> 00:20:20,400 Speaker 1: If it does, then we're going to revisit this problem 361 00:20:20,720 --> 00:20:23,320 Speaker 1: sometime in the near future. If it doesn't, if the 362 00:20:23,359 --> 00:20:27,320 Speaker 1: fedbacking away causes an improvement and confidence and the economy 363 00:20:27,359 --> 00:20:31,280 Speaker 1: is fine, then uh, I think we've probably seen seen 364 00:20:31,320 --> 00:20:33,360 Speaker 1: this for the last time for a while. Okay, So, 365 00:20:33,480 --> 00:20:37,080 Speaker 1: if the economy does slow materially in the US, what 366 00:20:37,160 --> 00:20:40,520 Speaker 1: will be the epicenter of the next credit crisis? Well, 367 00:20:41,480 --> 00:20:42,960 Speaker 1: you know, it's a good question. A lot of people 368 00:20:43,000 --> 00:20:46,840 Speaker 1: are looking at the US credit markets as the point 369 00:20:46,880 --> 00:20:49,320 Speaker 1: of a problem, and of course everybody looks back to 370 00:20:49,359 --> 00:20:53,879 Speaker 1: the last cycle when bank loans are doing really poorly 371 00:20:53,920 --> 00:20:56,880 Speaker 1: and had enormous defaults in the US I actually don't 372 00:20:56,920 --> 00:20:58,879 Speaker 1: think it's necessarily going to be the U S as 373 00:20:58,920 --> 00:21:03,040 Speaker 1: the epicenter. I think it's going to be overseas UM. Clearly, 374 00:21:03,320 --> 00:21:06,600 Speaker 1: growth is a lot slower in Europe right now, and 375 00:21:06,720 --> 00:21:10,160 Speaker 1: you're seeing a number of countries in recession. So could 376 00:21:10,160 --> 00:21:14,520 Speaker 1: you see defaults and increasing problems in Europe that ultimately 377 00:21:14,560 --> 00:21:17,560 Speaker 1: cycle back to the US. And what about China? What 378 00:21:17,680 --> 00:21:23,959 Speaker 1: if China cannot reinvigorate growth with its current stimulus program, um, 379 00:21:24,040 --> 00:21:27,360 Speaker 1: then we can start to see problems coming out of China. 380 00:21:27,600 --> 00:21:31,040 Speaker 1: So if if the FED is on the sidelines, which 381 00:21:31,040 --> 00:21:33,240 Speaker 1: it appears to be, does that imply that we're in 382 00:21:33,320 --> 00:21:36,040 Speaker 1: a trading range here, if at least for the short term. 383 00:21:36,080 --> 00:21:38,920 Speaker 1: I think so. You know, you've seen a tremendous rebound 384 00:21:38,960 --> 00:21:42,320 Speaker 1: in credit spreads. So the question will be, now that 385 00:21:42,320 --> 00:21:44,880 Speaker 1: the Feds off the table, what will be the next 386 00:21:44,920 --> 00:21:48,639 Speaker 1: factor that could potentially either cause credit what credit spreads 387 00:21:48,680 --> 00:21:51,520 Speaker 1: to tighten or widen? UM. I think now the market 388 00:21:51,600 --> 00:21:55,400 Speaker 1: is going to be focused on the um earnings growth. 389 00:21:55,440 --> 00:21:57,720 Speaker 1: So you know, I coined a phrase fed up with 390 00:21:57,760 --> 00:22:00,520 Speaker 1: the Fed. I think the market's done trying to figure 391 00:22:00,520 --> 00:22:01,760 Speaker 1: out what the FED is going to do. The FED 392 00:22:01,880 --> 00:22:03,840 Speaker 1: is basically said, we're on hold for some period of time, 393 00:22:03,880 --> 00:22:06,719 Speaker 1: so everyone's going to be focusing on different things. So 394 00:22:07,000 --> 00:22:08,840 Speaker 1: is the market fed up with the Fed? They are 395 00:22:08,880 --> 00:22:11,199 Speaker 1: for right now. Next week though, the Federal meet, and 396 00:22:11,240 --> 00:22:14,680 Speaker 1: I'm sure everybody will be laser focused on them once again, 397 00:22:14,680 --> 00:22:17,680 Speaker 1: im parsing every word of FED speak. Michael Temple, thank 398 00:22:17,680 --> 00:22:19,560 Speaker 1: you so much for being with us. Michael Temple, director 399 00:22:19,560 --> 00:22:23,359 Speaker 1: of Corporate Credit US and portfolio manager for a Moondy 400 00:22:23,400 --> 00:22:27,720 Speaker 1: Pioneer which oversees eighty billion dollars. Definitely interesting to think 401 00:22:27,880 --> 00:22:29,600 Speaker 1: are we out of the woods of the FED is 402 00:22:29,680 --> 00:22:31,800 Speaker 1: on hold? People still want to know that what they're 403 00:22:31,800 --> 00:22:34,199 Speaker 1: going to do with their balance sheet, and certainly there 404 00:22:34,280 --> 00:22:36,800 Speaker 1: is a lot of discussion about whether we have seen 405 00:22:36,880 --> 00:22:51,800 Speaker 1: the last rate hike of the credit cycle. Amazon dot 406 00:22:51,840 --> 00:22:55,639 Speaker 1: Com project scuttled in Long Island City raises a lot 407 00:22:55,720 --> 00:22:59,760 Speaker 1: of questions about the municipal bond market and frankly, infrastructure 408 00:22:59,800 --> 00:23:03,600 Speaker 1: to all using those funds. Focus on MUTIS is brought 409 00:23:03,600 --> 00:23:06,560 Speaker 1: to you by Build American Mutual BAM Green Star Bonds 410 00:23:06,600 --> 00:23:09,800 Speaker 1: finance projects that were protect and restore the environment with 411 00:23:09,840 --> 00:23:13,879 Speaker 1: more renewable energy and efficient transportation and buildings visit build 412 00:23:13,880 --> 00:23:18,440 Speaker 1: America dot com, slash green Star BAM Building America joining 413 00:23:18,560 --> 00:23:22,040 Speaker 1: us as he does to talk munis every week. Joe Maisak, 414 00:23:22,200 --> 00:23:25,159 Speaker 1: editor for The bloom Brief, focused on the muni bond market. 415 00:23:25,400 --> 00:23:27,800 Speaker 1: So I want to start there with Amazon, the idea 416 00:23:28,040 --> 00:23:31,080 Speaker 1: that you know, there was all of this activity that 417 00:23:31,119 --> 00:23:33,200 Speaker 1: was supposed to be coming there a lot of money 418 00:23:33,280 --> 00:23:36,560 Speaker 1: from tax revenues, albeit not the extra three billion dollars 419 00:23:36,560 --> 00:23:39,080 Speaker 1: of tax breaks that they did get. Are there any 420 00:23:39,200 --> 00:23:41,879 Speaker 1: projects that you know of that have actually been scuttled 421 00:23:42,000 --> 00:23:45,120 Speaker 1: or seriously called into question by Amazon's exit from Long 422 00:23:45,160 --> 00:23:51,320 Speaker 1: Island City? Uh, just from the Amazon effect or nationally, 423 00:23:52,840 --> 00:23:55,800 Speaker 1: I mean, I don't think there's been any you know, 424 00:23:55,920 --> 00:23:59,240 Speaker 1: New York projects that people have decided, no, forget about it, 425 00:23:59,320 --> 00:24:01,960 Speaker 1: let's not do it. But I guess that then on 426 00:24:02,040 --> 00:24:06,200 Speaker 1: a national level, has it been anything, uh, any movement 427 00:24:06,480 --> 00:24:11,280 Speaker 1: with respect to cities cities uh and sort of inviting 428 00:24:11,359 --> 00:24:14,280 Speaker 1: businesses in with with the potential for rebates and things 429 00:24:14,359 --> 00:24:17,119 Speaker 1: like that. No, this is the way it's done, you know, 430 00:24:17,200 --> 00:24:21,560 Speaker 1: the providing these tax subsidies, and it's not cash, it's 431 00:24:21,600 --> 00:24:23,560 Speaker 1: you know, it's kind of a tax cut. If you 432 00:24:23,600 --> 00:24:27,320 Speaker 1: will over a period of years is an acceptable way 433 00:24:27,960 --> 00:24:30,280 Speaker 1: and it has been an acceptable way of doing business 434 00:24:30,359 --> 00:24:33,679 Speaker 1: now for decades. I want to say, and you know, 435 00:24:33,720 --> 00:24:36,439 Speaker 1: I think it's going to go away because of Fox 436 00:24:36,520 --> 00:24:39,760 Speaker 1: Con in Wisconsin. We've had some very good coverage to 437 00:24:39,880 --> 00:24:44,560 Speaker 1: that this week, much bigger disaster than this Amazon business. 438 00:24:44,680 --> 00:24:48,160 Speaker 1: And of course the Amazon business, Uh, that's not going away. 439 00:24:48,440 --> 00:24:50,960 Speaker 1: Every once in a while you'll hear about a city 440 00:24:51,240 --> 00:24:57,280 Speaker 1: rejecting the idea of subsidies for a sports stadium, but otherwise, now, yeah, 441 00:24:57,280 --> 00:24:58,800 Speaker 1: that's what I want to go to, Joe. I mean, 442 00:24:58,840 --> 00:25:01,439 Speaker 1: the subsidies issues. Will was one of the issues that 443 00:25:01,480 --> 00:25:03,680 Speaker 1: I think some of the folks that came out against 444 00:25:03,720 --> 00:25:06,600 Speaker 1: the Amazon deal cited, Um, you know, why should New 445 00:25:06,680 --> 00:25:08,919 Speaker 1: York City provide three billion dollars of subsidies to the 446 00:25:09,200 --> 00:25:10,960 Speaker 1: you know, the biggest company in the world, the wealthiest 447 00:25:10,960 --> 00:25:13,639 Speaker 1: person in the world. But that is a key part 448 00:25:13,720 --> 00:25:16,560 Speaker 1: of how these deals are done. Do you see any 449 00:25:16,640 --> 00:25:21,320 Speaker 1: change to that, man? You know, I I have I 450 00:25:21,359 --> 00:25:27,600 Speaker 1: have two words for municipalities out there who all of 451 00:25:27,640 --> 00:25:30,000 Speaker 1: a sudden decide that, yeah, they're not going to play 452 00:25:30,000 --> 00:25:37,919 Speaker 1: the subsidy game anymore, and that is Brooklyn Dodgers Brooklyn. 453 00:25:38,240 --> 00:25:43,080 Speaker 1: Brooklyn's heart was ripped out for decades when the Dodgers left. 454 00:25:43,920 --> 00:25:47,359 Speaker 1: In theory, I mean, arguably you could say they never 455 00:25:47,400 --> 00:25:52,520 Speaker 1: recovered it, never recovered. The Dodgers should still be in Brooklyn. However, 456 00:25:53,560 --> 00:25:56,720 Speaker 1: the game wasn't played, and this is what happens. So fine, 457 00:25:57,119 --> 00:25:58,760 Speaker 1: you know you're happy now? I mean I want to 458 00:25:58,760 --> 00:26:02,840 Speaker 1: ask some of these politicians, particularly generous, I guess, uh, 459 00:26:02,880 --> 00:26:05,480 Speaker 1: you're happy now. You're not getting these jobs, You're not 460 00:26:05,560 --> 00:26:09,040 Speaker 1: getting this revenue. Huh what was the trade? Three billion 461 00:26:09,160 --> 00:26:13,960 Speaker 1: for billion and probably higher? Yeah. Well, I think this 462 00:26:14,080 --> 00:26:18,040 Speaker 1: definitely will will cause some soul searching among a variety 463 00:26:18,080 --> 00:26:20,920 Speaker 1: of different New Year political figures. I do want to 464 00:26:20,920 --> 00:26:22,960 Speaker 1: shift gears a little bit from one coast to another. 465 00:26:23,000 --> 00:26:28,000 Speaker 1: California scaling back its plans for a high speed rail line. 466 00:26:28,440 --> 00:26:30,560 Speaker 1: What's the deal here? And uh, you know, are there 467 00:26:30,600 --> 00:26:34,639 Speaker 1: any financing plans or expectations that are going to be 468 00:26:34,680 --> 00:26:39,040 Speaker 1: affected by this? Well, the state of voters approved ten 469 00:26:39,240 --> 00:26:44,960 Speaker 1: billion dollars for high speed rail in California, and that money, 470 00:26:45,440 --> 00:26:47,919 Speaker 1: those bonds will be sold, some of them already have 471 00:26:48,000 --> 00:26:53,520 Speaker 1: been sold, and they will use that authorization on a 472 00:26:53,680 --> 00:26:56,240 Speaker 1: much scaled back, so you're not getting Los Angeles to 473 00:26:56,280 --> 00:27:00,159 Speaker 1: San Francisco, You're getting more like a central valley. Uh 474 00:27:00,560 --> 00:27:07,200 Speaker 1: you know, uh link if you will. Um. Yeah, it's 475 00:27:07,320 --> 00:27:10,040 Speaker 1: very disheartening. I mean, I think the whole, the whole 476 00:27:10,119 --> 00:27:12,920 Speaker 1: high speed rail thing. You know, sometimes I almost wonder 477 00:27:13,040 --> 00:27:16,680 Speaker 1: that this is really more of a federal project than 478 00:27:16,720 --> 00:27:19,520 Speaker 1: anything else. Yeah. I think in the state of California 479 00:27:19,560 --> 00:27:22,280 Speaker 1: that loves the automobile, I'm not sure how embrace the 480 00:27:22,400 --> 00:27:24,680 Speaker 1: train would be, but they could certainly use some help 481 00:27:24,720 --> 00:27:27,720 Speaker 1: with the congestion there. So Joe in Florida, you have 482 00:27:27,840 --> 00:27:32,359 Speaker 1: the that's no longer called bright Line. They cancel the 483 00:27:32,880 --> 00:27:34,960 Speaker 1: cancel the I p O and said, well, we have 484 00:27:35,280 --> 00:27:38,480 Speaker 1: other sources of money. It's a railroad game is very 485 00:27:38,520 --> 00:27:41,680 Speaker 1: difficult to It's a very difficult game costly. So let's 486 00:27:41,680 --> 00:27:43,520 Speaker 1: go to another area that seems to be doing a 487 00:27:43,560 --> 00:27:45,920 Speaker 1: little bit better from a municipal bomb perspective. And that's 488 00:27:45,920 --> 00:27:48,840 Speaker 1: my favorite muni bond topic, which is Puerto Rico. Puerto 489 00:27:48,920 --> 00:27:51,920 Speaker 1: Rico had a good week last week with the senior 490 00:27:52,280 --> 00:27:56,320 Speaker 1: secured bonds. What are next steps for Puerto Ricos that 491 00:27:56,359 --> 00:27:59,520 Speaker 1: tries to dig out from this bankruptcy. Man, they gotta 492 00:27:59,640 --> 00:28:02,720 Speaker 1: di on the on on whether or not they're going 493 00:28:02,800 --> 00:28:06,160 Speaker 1: to go through this repudiation of six billion dollars. I 494 00:28:06,160 --> 00:28:08,199 Speaker 1: imagine this is something that has to be decided in 495 00:28:08,280 --> 00:28:13,440 Speaker 1: court over perhaps the rest of this year. But you know, we'll, 496 00:28:13,480 --> 00:28:16,240 Speaker 1: I mean, we'll certainly see how they move along, because 497 00:28:16,520 --> 00:28:19,159 Speaker 1: the geos are next. That's the next logical thing, and 498 00:28:19,320 --> 00:28:21,760 Speaker 1: I think there's seventeen billion in geos. They want to 499 00:28:21,800 --> 00:28:26,560 Speaker 1: repudiate six billion that were sold because they thought that 500 00:28:26,600 --> 00:28:30,800 Speaker 1: those bonds ran into the debt limit on the common volt. 501 00:28:31,560 --> 00:28:33,600 Speaker 1: Joe Mesac, thank you so much for being with us 502 00:28:33,680 --> 00:28:36,679 Speaker 1: as always. Joe masak uh He is editor of the 503 00:28:36,680 --> 00:28:40,440 Speaker 1: Bloomberg Brief, focused onymous of the bond market, checking out 504 00:28:40,480 --> 00:28:44,200 Speaker 1: all things in the muni world, which has been hot recently, 505 00:28:44,320 --> 00:28:48,880 Speaker 1: especially as a number of Congress members talk about a 506 00:28:48,920 --> 00:28:53,600 Speaker 1: possible revival of an infrastructure deal. Thanks for listening to 507 00:28:53,640 --> 00:28:56,400 Speaker 1: the Bloomberg Penl podcast. You can subscribe and listen to 508 00:28:56,440 --> 00:28:59,640 Speaker 1: interviews at Apple Podcasts or whatever podcast platform you prefer. 509 00:29:00,120 --> 00:29:02,800 Speaker 1: Paul Sweeney, I'm on Twitter at pt Sweeney. I'm Lisa 510 00:29:02,840 --> 00:29:05,480 Speaker 1: abram Wohits. I'm on Twitter at Lisa Abram woits one 511 00:29:05,680 --> 00:29:08,320 Speaker 1: before the podcast. You can always catch us worldwide. I'm 512 00:29:08,320 --> 00:29:09,160 Speaker 1: Bloomberg Radio.