1 00:00:02,640 --> 00:00:05,320 Speaker 1: Welcome to the Bloomberg Penel Podcast. I'm Paul swing 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 --> 00:00:17,960 Speaker 1: podcast or wherever you listen to podcasts, as well as 7 00:00:17,960 --> 00:00:23,960 Speaker 1: at Bloomberg dot com. One share a price that's not 8 00:00:24,160 --> 00:00:26,480 Speaker 1: entirely flatt ast Nike. Nike shares up about a quarter 9 00:00:26,480 --> 00:00:30,920 Speaker 1: of a percentage point after Tiger Woods one yet again, 10 00:00:31,240 --> 00:00:34,680 Speaker 1: although after more than ten years of a hiatus of 11 00:00:34,720 --> 00:00:37,200 Speaker 1: winning a major golf tournament. Joining us now to talk 12 00:00:37,240 --> 00:00:40,280 Speaker 1: about how this is wonderful news for his sponsors is 13 00:00:40,320 --> 00:00:43,360 Speaker 1: Evan Novihi Williams joining us here in our Bloomberg Interactive 14 00:00:43,360 --> 00:00:46,840 Speaker 1: Broker's Studios. So Evan, first, let's just talk about the 15 00:00:47,040 --> 00:00:50,760 Speaker 1: number of sponsors who stuck with Tiger Woods through an 16 00:00:50,760 --> 00:00:55,360 Speaker 1: incredibly tumultuous period. Who stuck with him? Who dropped away? Yeah, 17 00:00:55,360 --> 00:00:57,720 Speaker 1: it's not a long list of companies, right, Nike is 18 00:00:57,760 --> 00:01:01,200 Speaker 1: one of them, um and Upper Deck the st is 19 00:01:01,240 --> 00:01:02,520 Speaker 1: the other one. So those are the only two that 20 00:01:02,640 --> 00:01:04,800 Speaker 1: stuck with him. You have a long list of companies 21 00:01:04,840 --> 00:01:08,720 Speaker 1: like A Center, A, T and T, Gillette, Gatorade, companies, 22 00:01:08,800 --> 00:01:11,440 Speaker 1: Tag Hoyer that either dropped him or you know, refused 23 00:01:11,440 --> 00:01:14,120 Speaker 1: to renew him when their sponsorship came up, right, So, 24 00:01:14,120 --> 00:01:16,760 Speaker 1: so it's been ten long years for Tiger Woods and 25 00:01:16,800 --> 00:01:19,319 Speaker 1: the company's backing him are a bit different, you know. 26 00:01:19,400 --> 00:01:22,480 Speaker 1: So so Nike upper Deck are still there, Bridge Stone 27 00:01:22,480 --> 00:01:25,520 Speaker 1: makes the balls he uses, Tailor Made makes the clubs 28 00:01:25,560 --> 00:01:28,480 Speaker 1: he uses. Monster Energy is the logo on the bag 29 00:01:28,560 --> 00:01:31,760 Speaker 1: for people who watched over the weekend. So it's a 30 00:01:31,800 --> 00:01:34,080 Speaker 1: it's a kind of a whole different stable of of 31 00:01:34,240 --> 00:01:36,760 Speaker 1: endorsers outside of Nike, you know, which has been the 32 00:01:36,800 --> 00:01:38,800 Speaker 1: mainstay and the company that I think people you know 33 00:01:38,840 --> 00:01:41,800 Speaker 1: most closely associate with Tiger. So have we been able 34 00:01:41,800 --> 00:01:43,759 Speaker 1: to quantify what the impact was, Like what do those 35 00:01:43,760 --> 00:01:47,120 Speaker 1: tigers you know, sponsorship income back in the day when 36 00:01:47,160 --> 00:01:50,160 Speaker 1: he had those A listers too? Maybe today where maybe 37 00:01:50,160 --> 00:01:53,040 Speaker 1: it's not so many, Yeah, it's not. He's certainly he's 38 00:01:53,200 --> 00:01:56,040 Speaker 1: he's still making money off the course, obviously, you know, Um, 39 00:01:56,200 --> 00:01:58,880 Speaker 1: his relationship with Nike was once a thirty million dollar 40 00:01:58,920 --> 00:02:02,400 Speaker 1: a year relationship. That's changed a bit because Nike has 41 00:02:02,520 --> 00:02:05,360 Speaker 1: you know, they no longer make golf equipment, so Nike 42 00:02:05,480 --> 00:02:08,839 Speaker 1: doesn't make the ball and the clubs and the bag anymore. Um. 43 00:02:09,080 --> 00:02:11,400 Speaker 1: And and yeah, he's probably not being paid, you know, 44 00:02:11,440 --> 00:02:13,360 Speaker 1: in total what he was when he was making when 45 00:02:13,400 --> 00:02:16,200 Speaker 1: it's sixty million dollars a year off the course. Um. 46 00:02:16,320 --> 00:02:20,280 Speaker 1: But you know, he has a very successful course design business. 47 00:02:20,720 --> 00:02:23,239 Speaker 1: He still has a number of sponsors that pay him well. 48 00:02:23,520 --> 00:02:25,480 Speaker 1: I imagine the fact that he just won the Masters 49 00:02:25,600 --> 00:02:28,080 Speaker 1: is not going to hurt him, uh in any regard 50 00:02:28,480 --> 00:02:31,560 Speaker 1: in that way either. So you know, it's his portfolio 51 00:02:31,600 --> 00:02:33,440 Speaker 1: is not what it used to be, but he's not 52 00:02:33,520 --> 00:02:36,040 Speaker 1: struggling for cash right now. I'm curious, though, you know, 53 00:02:36,120 --> 00:02:39,320 Speaker 1: beyond just Tiger Woods and Nike, I'm wondering what kind 54 00:02:39,320 --> 00:02:43,800 Speaker 1: of audience, uh, these golf tournaments get because my understanding 55 00:02:43,919 --> 00:02:47,080 Speaker 1: is that the population of people watching these has been 56 00:02:47,120 --> 00:02:49,960 Speaker 1: going down and getting older. Yeah. It's funny. Ten years ago, 57 00:02:50,480 --> 00:02:52,120 Speaker 1: you know, we we always talked about, you know, the 58 00:02:52,120 --> 00:02:55,000 Speaker 1: Tiger bump. What happened, you know, the the amount of 59 00:02:55,000 --> 00:02:57,200 Speaker 1: people that turned in just to watch golf only when 60 00:02:57,240 --> 00:03:00,560 Speaker 1: Tiger Woods was playing well. And eleven years it we're 61 00:03:00,560 --> 00:03:03,880 Speaker 1: having the same conversations. Golf is still reliant on this 62 00:03:04,000 --> 00:03:07,359 Speaker 1: one athlete, and it's great for golf that he's back. Right, 63 00:03:07,440 --> 00:03:10,720 Speaker 1: if you're the Golf Channel, if you're CBS, anyone who's 64 00:03:10,720 --> 00:03:13,080 Speaker 1: going to televise a golf a professional golf tournament in 65 00:03:13,080 --> 00:03:15,160 Speaker 1: the next couple of months, you are thrilled by what 66 00:03:15,280 --> 00:03:17,320 Speaker 1: just happened because people are going to tune in to 67 00:03:17,440 --> 00:03:20,400 Speaker 1: watch uh Tiger Woods to see if he can do 68 00:03:20,440 --> 00:03:24,120 Speaker 1: this again. The bigger underlying issue is the sport still, 69 00:03:24,360 --> 00:03:26,280 Speaker 1: you know, is reliant on a forty three year old 70 00:03:26,320 --> 00:03:28,640 Speaker 1: with a bad back, who is who is not going 71 00:03:28,680 --> 00:03:31,520 Speaker 1: to be this good in another eleven years. Right, there 72 00:03:31,600 --> 00:03:34,120 Speaker 1: is a there is a finite end to Tiger woods dominance. 73 00:03:34,120 --> 00:03:36,720 Speaker 1: It's amazing that he got back to this stage, but 74 00:03:36,880 --> 00:03:38,720 Speaker 1: you know, you can make an argument that it's not 75 00:03:38,760 --> 00:03:41,440 Speaker 1: great for golf that that he is still the number 76 00:03:41,480 --> 00:03:44,200 Speaker 1: one biggest draw. Well, a lot of winners came out 77 00:03:44,200 --> 00:03:47,320 Speaker 1: of yesterday's performance by Tiger Woods, but one of the losers, 78 00:03:47,360 --> 00:03:50,040 Speaker 1: which is the sports betting business. You know what happened 79 00:03:50,040 --> 00:03:51,440 Speaker 1: the book He's had the wrong side of this trade, 80 00:03:51,440 --> 00:03:53,960 Speaker 1: and yeah, it's funny they you know, Tiger Woods, just 81 00:03:54,000 --> 00:03:56,520 Speaker 1: because of his popularity is almost always the most bet 82 00:03:56,640 --> 00:03:59,120 Speaker 1: golfer in the field. And when Tiger Woods was bad, 83 00:03:59,200 --> 00:04:02,440 Speaker 1: that was a great, a great business opportunity for for 84 00:04:02,520 --> 00:04:05,040 Speaker 1: sports books. And you know, now that he won, you 85 00:04:05,080 --> 00:04:07,840 Speaker 1: know it was a bad business opportunity. The William Hill 86 00:04:07,880 --> 00:04:09,760 Speaker 1: had a single bet that they paid out one point 87 00:04:09,760 --> 00:04:12,280 Speaker 1: two million dollars on. It's the biggest single golf bet 88 00:04:12,320 --> 00:04:15,920 Speaker 1: liability they've ever had taking bets in the US. FanDuel 89 00:04:15,960 --> 00:04:18,480 Speaker 1: lost two million dollars. Draft Kings was out a million 90 00:04:18,520 --> 00:04:20,479 Speaker 1: and a half. A lot of sports books took a 91 00:04:20,480 --> 00:04:23,279 Speaker 1: big bath on this. Again, it doesn't come close to 92 00:04:23,320 --> 00:04:25,479 Speaker 1: off setting the money they've made off of Tiger in 93 00:04:25,520 --> 00:04:29,560 Speaker 1: the past ten years. Um. But yeah, in general, being 94 00:04:29,560 --> 00:04:31,640 Speaker 1: a sports book is a pretty darn good business model. 95 00:04:31,960 --> 00:04:35,200 Speaker 1: Occasionally you get burned by individual events, and this was 96 00:04:35,240 --> 00:04:38,400 Speaker 1: certainly one that that burned them. Interesting, but thus, certainly 97 00:04:38,440 --> 00:04:41,920 Speaker 1: a lot of winners yesterday, and uh, you know from 98 00:04:41,960 --> 00:04:45,200 Speaker 1: the broadcast networks just just you know, to the sponsors, 99 00:04:45,200 --> 00:04:46,760 Speaker 1: and you know, I won't be surprised at all to 100 00:04:46,839 --> 00:04:49,599 Speaker 1: see some of those A list sponsors who left Tiger 101 00:04:49,600 --> 00:04:53,200 Speaker 1: Woods when he had those troubles uh, come flocking back, um, 102 00:04:53,240 --> 00:04:54,960 Speaker 1: because you know, you could just tell if you think 103 00:04:54,960 --> 00:04:56,920 Speaker 1: about the uh, if you follow the game up off 104 00:04:56,920 --> 00:04:58,280 Speaker 1: and you just kind of look at your Twitter feed 105 00:04:58,360 --> 00:05:01,560 Speaker 1: or your Facebook. It was just exploding yesterday with Tiger 106 00:05:01,600 --> 00:05:03,960 Speaker 1: Woods in contention at the Master. So it's a it's 107 00:05:04,000 --> 00:05:07,719 Speaker 1: a whole another dynamic. As Evan was mentioning, so uh, Evan, 108 00:05:07,760 --> 00:05:10,600 Speaker 1: we appreciated Evan Wi Williams and Bloomberg News bringing us 109 00:05:10,760 --> 00:05:14,560 Speaker 1: the latest on everything that is Tiger Woods and golf. 110 00:05:14,680 --> 00:05:31,320 Speaker 1: He is back. Well. We are right smack in the 111 00:05:31,360 --> 00:05:33,760 Speaker 1: middle of earning season for the big banks. We had 112 00:05:33,839 --> 00:05:37,560 Speaker 1: JP Morgan on Friday Today, Goldman, Sachs and City Group 113 00:05:37,800 --> 00:05:40,240 Speaker 1: mixed bag across the board to dig in to some 114 00:05:40,360 --> 00:05:41,960 Speaker 1: of these results of what it means for the big 115 00:05:41,960 --> 00:05:45,400 Speaker 1: money center banks. We welcome Ken Leon Kenna's Global director 116 00:05:45,480 --> 00:05:48,880 Speaker 1: of Industry and Equity Research at cfr A Research. He 117 00:05:49,000 --> 00:05:51,400 Speaker 1: joins us on the phone from New York. So, Ken, 118 00:05:51,400 --> 00:05:53,400 Speaker 1: thanks so much for joining us. What are some of 119 00:05:53,480 --> 00:05:57,400 Speaker 1: the takeaways that you are seeing from some of these 120 00:05:57,560 --> 00:06:02,320 Speaker 1: first wave of big bank earnings. JP Morgan headed out 121 00:06:02,320 --> 00:06:05,719 Speaker 1: of the park. You know, the expectations for all these 122 00:06:05,720 --> 00:06:09,920 Speaker 1: banks was dismal performance for the first quarter UM March 123 00:06:10,240 --> 00:06:14,240 Speaker 1: really helped JP Morgan and it provides some glimmer of hope, 124 00:06:14,360 --> 00:06:19,080 Speaker 1: you know for certainly City and Golden Sacks today. You know, 125 00:06:19,160 --> 00:06:23,560 Speaker 1: the capital markets were from the government phrase really hurt 126 00:06:23,680 --> 00:06:28,000 Speaker 1: the underwriting pipeline, both equity and debt, and the I 127 00:06:28,120 --> 00:06:31,359 Speaker 1: p O market really just started to click in March. 128 00:06:32,040 --> 00:06:35,919 Speaker 1: So we think what's unusual here is first quarter tends 129 00:06:35,920 --> 00:06:39,680 Speaker 1: to be the strongest quarter for the banks UM and 130 00:06:39,760 --> 00:06:43,080 Speaker 1: it looks to be a base quarter with improvement every quarter. 131 00:06:43,520 --> 00:06:46,920 Speaker 1: In two thousand nineteen, Ken it seems like big US 132 00:06:47,000 --> 00:06:49,400 Speaker 1: banks are being put to the test. How much can 133 00:06:49,400 --> 00:06:53,440 Speaker 1: they diversify away from trading revenue because that has not 134 00:06:53,720 --> 00:06:56,560 Speaker 1: been the driver that it once was. So can you 135 00:06:56,680 --> 00:06:58,880 Speaker 1: give them a grade? How are they doing in terms 136 00:06:58,960 --> 00:07:05,880 Speaker 1: of turning to advisor to the revenue or consumer consumer profitability? 137 00:07:06,640 --> 00:07:11,680 Speaker 1: So the banks are pretty much agents and not principal 138 00:07:11,760 --> 00:07:15,120 Speaker 1: businesses where they invest for the house and from a 139 00:07:15,160 --> 00:07:20,320 Speaker 1: regulatory standpoint in the capacity of how much capital is 140 00:07:20,360 --> 00:07:23,600 Speaker 1: needed for trading, they have been de risking the last 141 00:07:23,600 --> 00:07:26,000 Speaker 1: few years and even on the Goldmen call today, look, 142 00:07:26,040 --> 00:07:28,800 Speaker 1: we have we have a new management, a new management 143 00:07:28,960 --> 00:07:33,400 Speaker 1: now lad from former executives and investment banking, not trading 144 00:07:33,440 --> 00:07:37,160 Speaker 1: as before, and they're going to size down further thick, 145 00:07:37,240 --> 00:07:40,520 Speaker 1: which is the fixed income, currency and commodity business, so 146 00:07:40,600 --> 00:07:44,120 Speaker 1: they get efficiencies and higher returns. When you look at 147 00:07:44,160 --> 00:07:47,720 Speaker 1: the other banks, UM, the one area that's the bread 148 00:07:47,760 --> 00:07:51,360 Speaker 1: and butter for the large commercial banks is treasury because 149 00:07:51,360 --> 00:07:55,920 Speaker 1: he's tied directly into their corporate relationships and corporate lending. 150 00:07:56,320 --> 00:08:00,680 Speaker 1: So I think um directionally, Um, none of these banks 151 00:08:00,720 --> 00:08:04,160 Speaker 1: want to put that much capital. Um. We also had 152 00:08:04,400 --> 00:08:08,800 Speaker 1: low investor activity, we had low volatility as measured by 153 00:08:08,840 --> 00:08:12,679 Speaker 1: the VIS We'll put that together. You had uh high 154 00:08:13,000 --> 00:08:17,240 Speaker 1: uppertee negative declines in trading. So you want to be 155 00:08:17,240 --> 00:08:21,360 Speaker 1: Another business is that you have confidence can grow. So ken, 156 00:08:21,400 --> 00:08:23,480 Speaker 1: as a former wall streeter, I always take a look 157 00:08:23,480 --> 00:08:25,960 Speaker 1: at the cost line for Cindy's big investment banks because 158 00:08:25,960 --> 00:08:29,600 Speaker 1: that usually goes to head count, into compensation to things 159 00:08:29,680 --> 00:08:31,800 Speaker 1: near and dear to my heart as a former wall streeter, 160 00:08:31,920 --> 00:08:36,640 Speaker 1: but I see for Coleman sacks down twent firm wide expenses. Um. 161 00:08:36,840 --> 00:08:41,320 Speaker 1: Is that just the people's side of the business. So um. 162 00:08:41,520 --> 00:08:44,480 Speaker 1: Part of it is the early stages of efficiencies from 163 00:08:44,679 --> 00:08:49,000 Speaker 1: heavy technology investing. UM, it's not. It is absolutely not 164 00:08:49,320 --> 00:08:54,240 Speaker 1: major head count cuts yet. What's interesting for Goldman of 165 00:08:54,320 --> 00:08:58,280 Speaker 1: their workforces technology and that's what's driving their platforms in 166 00:08:58,320 --> 00:09:04,000 Speaker 1: the business. UM. For the other banks UM, the efficiency 167 00:09:04,120 --> 00:09:09,840 Speaker 1: ratios seem to be more of a UM fading indicator 168 00:09:09,920 --> 00:09:12,320 Speaker 1: that no one has. None of the banks have conviction 169 00:09:12,800 --> 00:09:15,960 Speaker 1: to say that we're going to go from low SI 170 00:09:16,040 --> 00:09:18,880 Speaker 1: to low fifty in the next two years, as they 171 00:09:18,920 --> 00:09:22,400 Speaker 1: did for several quarters, not this one UH, and even 172 00:09:22,440 --> 00:09:25,520 Speaker 1: asked that question City Group today. They kind of backed 173 00:09:25,559 --> 00:09:29,040 Speaker 1: off because they're just there is that uncertainty just about 174 00:09:29,520 --> 00:09:33,720 Speaker 1: global economy and the capital markets. But that's generally part 175 00:09:33,840 --> 00:09:37,559 Speaker 1: parcel for these banks. Can One notable factor also with 176 00:09:37,679 --> 00:09:41,600 Speaker 1: City Groups win on bond trading revenues. They actually UH 177 00:09:41,840 --> 00:09:45,760 Speaker 1: posted an increase you over year after it expected decrease, 178 00:09:45,960 --> 00:09:49,320 Speaker 1: and the other banks that have reported have all seen 179 00:09:49,400 --> 00:09:52,680 Speaker 1: declines in their year of year comps for bond trading. 180 00:09:52,720 --> 00:09:56,280 Speaker 1: I'm just wondering where is City getting the volumes? What 181 00:09:56,320 --> 00:10:00,000 Speaker 1: how do they eat this out? They have a very 182 00:10:00,440 --> 00:10:04,280 Speaker 1: UM strong global network in terms of working with corporate 183 00:10:04,360 --> 00:10:07,160 Speaker 1: US treasuries, and they're they're not doing it on the 184 00:10:07,240 --> 00:10:10,320 Speaker 1: high risk side of the curve, which would be derivatives 185 00:10:10,400 --> 00:10:16,000 Speaker 1: or any futures. It's it's mostly UM playing vanilla treasury 186 00:10:16,040 --> 00:10:20,920 Speaker 1: services UM and that continues to be a strength for 187 00:10:20,960 --> 00:10:24,480 Speaker 1: a City also for JP Morgan. What's interesting is Goldman 188 00:10:24,559 --> 00:10:29,360 Speaker 1: Sachs really wasn't in those parts of fixed income trading UH, 189 00:10:29,360 --> 00:10:32,679 Speaker 1: and they have increased their headcount to go there and 190 00:10:32,720 --> 00:10:36,760 Speaker 1: take market share. So can When I think about City Group, 191 00:10:36,760 --> 00:10:38,560 Speaker 1: I'm good at the stock here. It's up almost thirty 192 00:10:38,640 --> 00:10:42,520 Speaker 1: percent year to date. How is this company position globally 193 00:10:42,559 --> 00:10:46,320 Speaker 1: from a franchise perspective, it seems like they have you know, 194 00:10:46,320 --> 00:10:48,240 Speaker 1: they had really had a tough time coming out from 195 00:10:48,240 --> 00:10:52,160 Speaker 1: the financial crisis, but they've seen pretty solid So they 196 00:10:52,160 --> 00:10:55,240 Speaker 1: had a terrific two thousand and eighteen and the first 197 00:10:55,280 --> 00:10:58,920 Speaker 1: quarter as a continuum UM and that's reflected in the stock. 198 00:10:58,960 --> 00:11:02,400 Speaker 1: We raised our target price to seventy from sixty five 199 00:11:02,480 --> 00:11:07,360 Speaker 1: this morning. We do feel um that City Um is 200 00:11:07,400 --> 00:11:10,360 Speaker 1: getting the most out of its global footprint. We have 201 00:11:10,400 --> 00:11:15,560 Speaker 1: a whole recommendation on City buying Goldman simply because we 202 00:11:15,640 --> 00:11:18,840 Speaker 1: think with City it's more now dependent on the global 203 00:11:18,880 --> 00:11:23,640 Speaker 1: economic environment. They had flat first quarter in Europe as 204 00:11:23,640 --> 00:11:27,280 Speaker 1: well as in Asia, Mexico and Latin America is another 205 00:11:27,400 --> 00:11:31,280 Speaker 1: very important franchise for City, and it's likely to be 206 00:11:31,720 --> 00:11:35,600 Speaker 1: flat or low single digit. Look at Goldman Sachs. You've 207 00:11:35,600 --> 00:11:38,120 Speaker 1: got a new management team on board. There's a delta 208 00:11:38,240 --> 00:11:44,080 Speaker 1: for improvement on earnings coming from strategic moves across the 209 00:11:44,120 --> 00:11:48,560 Speaker 1: board in terms of realigning fixed income trading um. They're 210 00:11:48,640 --> 00:11:52,640 Speaker 1: also aligning to get more business and investment banking by 211 00:11:52,720 --> 00:11:57,160 Speaker 1: hiring hundreds of investment bankers for small companies. Never heard 212 00:11:57,160 --> 00:12:00,439 Speaker 1: of that for decades. Well, it seems like that's where 213 00:12:00,440 --> 00:12:03,160 Speaker 1: the profitability is. Ken Leon, thank you so much for 214 00:12:03,160 --> 00:12:05,760 Speaker 1: being with us, Global Director of Industry and Equity Research 215 00:12:05,800 --> 00:12:24,079 Speaker 1: at cf are A Research in New York. Well, there's 216 00:12:24,120 --> 00:12:27,640 Speaker 1: a great story out on the Bloomberg terminal today about taxes. Yes, 217 00:12:27,679 --> 00:12:32,080 Speaker 1: taxes can be interesting. Basically just here is basically President 218 00:12:32,080 --> 00:12:34,520 Speaker 1: Trump gave most Americans a big tax cut last year. 219 00:12:34,520 --> 00:12:37,000 Speaker 1: But the problem is they did not notice it. In fact, 220 00:12:37,040 --> 00:12:40,160 Speaker 1: just one fifth of taxpayers believe that their taxes have 221 00:12:40,440 --> 00:12:42,720 Speaker 1: been cut. So to get a sense of what happened 222 00:12:42,720 --> 00:12:45,240 Speaker 1: here with the messaging, we welcome Lara Davidson one of 223 00:12:45,280 --> 00:12:48,440 Speaker 1: the reporters on this story, larsa congressional tax reporter for 224 00:12:48,480 --> 00:12:52,480 Speaker 1: Bloomberg Tax. She's on Capitol Hill in Washington, d C. Today. Laura, 225 00:12:52,480 --> 00:12:55,000 Speaker 1: thank you so much for joining us. So again, there 226 00:12:55,240 --> 00:12:57,800 Speaker 1: was a tax cut. Not a lot of people believe 227 00:12:57,880 --> 00:12:59,959 Speaker 1: there was a tax cut. So what happened with the mess? 228 00:13:00,760 --> 00:13:02,880 Speaker 1: So really there were there were two big missteps that 229 00:13:02,880 --> 00:13:05,439 Speaker 1: that Republicans made here in One is that the Democrats 230 00:13:05,520 --> 00:13:08,000 Speaker 1: argument that this was going towards the wealthy and towards 231 00:13:08,040 --> 00:13:11,319 Speaker 1: large corporations was just more salient with voters. Um they 232 00:13:11,320 --> 00:13:14,280 Speaker 1: saw the big, big tax breaks go to corporations, and 233 00:13:14,360 --> 00:13:17,000 Speaker 1: when they saw the changes that we're going to to 234 00:13:17,040 --> 00:13:19,800 Speaker 1: them as individuals, it didn't seem as big. The second 235 00:13:19,800 --> 00:13:21,920 Speaker 1: thing is that the way people got their tax cuts, 236 00:13:21,920 --> 00:13:23,920 Speaker 1: so instead of getting a big refund at the end 237 00:13:23,920 --> 00:13:26,360 Speaker 1: of the year, which is what many people expected, they 238 00:13:26,400 --> 00:13:29,640 Speaker 1: got basically they paid less throughout the year, so there 239 00:13:29,679 --> 00:13:32,120 Speaker 1: was less taken out of their paycheck. But in most cases, 240 00:13:32,160 --> 00:13:38,439 Speaker 1: once you spread that out over over paychecks over the year, 241 00:13:38,559 --> 00:13:40,800 Speaker 1: it wasn't that much. So by the time that people 242 00:13:40,840 --> 00:13:43,840 Speaker 1: got to you know today to April fifte uh, they 243 00:13:43,840 --> 00:13:46,240 Speaker 1: either had a much smaller refund or in some cases 244 00:13:46,280 --> 00:13:48,120 Speaker 1: they owed money because they had too much taken out 245 00:13:48,160 --> 00:13:50,200 Speaker 1: over the year. And uh, you know, even though they 246 00:13:50,559 --> 00:13:52,440 Speaker 1: ended up getting more money that they still felt like 247 00:13:52,480 --> 00:13:54,800 Speaker 1: they owed more. So what is the truth here as 248 00:13:54,840 --> 00:13:57,240 Speaker 1: far as who got the biggest tax cuts? Right? Because 249 00:13:57,240 --> 00:13:59,120 Speaker 1: if you're saying that the Democrats kind of one on 250 00:13:59,160 --> 00:14:03,640 Speaker 1: their messaging, they went on the facts, Well, it really depends. 251 00:14:03,640 --> 00:14:06,520 Speaker 1: So you look, our our tax system is progressive, so 252 00:14:06,600 --> 00:14:09,480 Speaker 1: that means that there are higher rates for people at 253 00:14:09,480 --> 00:14:12,480 Speaker 1: the higher end of the income spectrum. So people who 254 00:14:12,880 --> 00:14:16,000 Speaker 1: make more uh also pay more, but they also got 255 00:14:16,000 --> 00:14:18,599 Speaker 1: a bigger tax cut in comparison overall. So it's a 256 00:14:18,600 --> 00:14:21,520 Speaker 1: little bit tricky to say, you know who definitively want 257 00:14:21,520 --> 00:14:24,520 Speaker 1: and lost. But particularly in a lot of U states 258 00:14:24,560 --> 00:14:27,520 Speaker 1: where where Democrats are who already uh disinclined to like 259 00:14:27,640 --> 00:14:29,840 Speaker 1: this tax cut, New York, New Jersey, they were also 260 00:14:29,920 --> 00:14:32,320 Speaker 1: limited by these state and local tax deductions. Used to 261 00:14:32,320 --> 00:14:33,800 Speaker 1: be able to write off all of your state and 262 00:14:33,800 --> 00:14:36,560 Speaker 1: local taxes that's now capped at ten thousand dollars to 263 00:14:36,720 --> 00:14:39,480 Speaker 1: lots of voters in the in the northeastern California are 264 00:14:39,480 --> 00:14:42,680 Speaker 1: finding that they actually saw a tax increase. Overall, it's 265 00:14:42,680 --> 00:14:44,880 Speaker 1: a relatively small portion. You know, about five ten percent 266 00:14:44,920 --> 00:14:48,760 Speaker 1: of people actually had their taxes increase, but they're mostly 267 00:14:48,800 --> 00:14:50,960 Speaker 1: in Democratic leaning places and they feel that they were 268 00:14:50,960 --> 00:14:53,600 Speaker 1: targeted by this law. Boy, you can count me as 269 00:14:53,600 --> 00:14:56,720 Speaker 1: one of those people who paid lost on the sought deduction. 270 00:14:56,840 --> 00:15:00,320 Speaker 1: So here being the metro New York area. UM Laura 271 00:15:00,400 --> 00:15:04,360 Speaker 1: Trump's top economic advisor, Larry Cudlow last week, I believe, 272 00:15:04,400 --> 00:15:07,920 Speaker 1: said that the tax cut package had largely already paid 273 00:15:07,920 --> 00:15:10,720 Speaker 1: for itself. Is that accurate? That is not. We have 274 00:15:10,800 --> 00:15:13,920 Speaker 1: seen that there's been some economic feedback from the law, 275 00:15:13,960 --> 00:15:15,880 Speaker 1: but it's really only paid for a fraction of the 276 00:15:15,880 --> 00:15:19,480 Speaker 1: one point five trillion dollars that this cost over a decade. 277 00:15:19,480 --> 00:15:21,080 Speaker 1: And once you throw on you know, what it costs 278 00:15:21,120 --> 00:15:23,600 Speaker 1: to service this debt um, it's even more than that 279 00:15:23,600 --> 00:15:26,240 Speaker 1: one point five trillion, approaching almost two trillion. So the 280 00:15:26,680 --> 00:15:29,120 Speaker 1: that's simply simply not the case. And and when you 281 00:15:29,120 --> 00:15:31,280 Speaker 1: look at the Republicans have been a little bit um 282 00:15:31,280 --> 00:15:33,960 Speaker 1: inconsistent on their messaging about this. You know, at times 283 00:15:33,960 --> 00:15:35,480 Speaker 1: they've said, oh, look, we never said this was going 284 00:15:35,520 --> 00:15:37,800 Speaker 1: to pay for it for itself. Cudlow said, it would 285 00:15:37,800 --> 00:15:39,840 Speaker 1: pay for itself, but the facts and the numbers that 286 00:15:39,880 --> 00:15:41,920 Speaker 1: have so far been coming in have shown that it 287 00:15:42,000 --> 00:15:44,080 Speaker 1: has not paid for itself, and it probably will not 288 00:15:44,200 --> 00:15:46,080 Speaker 1: over the course of the next decade. Laura, I want 289 00:15:46,080 --> 00:15:47,920 Speaker 1: to go back to the salt the state and local 290 00:15:47,920 --> 00:15:51,720 Speaker 1: tax deductions that were eliminated basically or kept at ten 291 00:15:51,800 --> 00:15:56,360 Speaker 1: thousand dollars. Is there any evidence that residents of some 292 00:15:56,440 --> 00:15:58,880 Speaker 1: of the high tax states New York, New Jersey, California 293 00:15:59,160 --> 00:16:03,040 Speaker 1: have been moving to lower tax states in response to 294 00:16:03,160 --> 00:16:06,600 Speaker 1: this tax lot change. There has not been great evidence yet, 295 00:16:06,640 --> 00:16:08,480 Speaker 1: and we're only you know, a year in um and 296 00:16:08,520 --> 00:16:10,600 Speaker 1: it would be a pretty drastic move to to move 297 00:16:10,680 --> 00:16:13,600 Speaker 1: somewhere across the country just for a lower tax rate. 298 00:16:13,640 --> 00:16:15,360 Speaker 1: On the margins, you're seeing a little bit of that. 299 00:16:15,400 --> 00:16:18,240 Speaker 1: In particular on the higher end, you're seeing um condo 300 00:16:18,320 --> 00:16:20,720 Speaker 1: developers and and real estate agents who are trying to 301 00:16:20,760 --> 00:16:22,760 Speaker 1: target some of these high earners and convince them to 302 00:16:22,800 --> 00:16:25,440 Speaker 1: move to Miami or you know, in California, to move 303 00:16:25,440 --> 00:16:28,280 Speaker 1: across the state line to Nevada. So far that that's 304 00:16:28,280 --> 00:16:31,160 Speaker 1: not necessarily going to be economist or looking at this 305 00:16:31,320 --> 00:16:34,480 Speaker 1: not a huge driving factor, just because there's so many 306 00:16:34,480 --> 00:16:36,280 Speaker 1: reasons to be in New York and your business is there, 307 00:16:36,320 --> 00:16:38,560 Speaker 1: your kids are there, your your network is there. Uh. 308 00:16:38,600 --> 00:16:40,680 Speaker 1: That that uh in New York State also makes it 309 00:16:40,760 --> 00:16:43,400 Speaker 1: very hard to leave. They will look very closely if 310 00:16:43,440 --> 00:16:45,880 Speaker 1: you can have a home in Florida. They look at 311 00:16:45,880 --> 00:16:48,240 Speaker 1: how many nights you're spending in Florida versus New York 312 00:16:48,240 --> 00:16:50,120 Speaker 1: and really sort of this teddy bear test of where 313 00:16:50,160 --> 00:16:51,960 Speaker 1: does your teddy bear at night? Do as you do 314 00:16:51,960 --> 00:16:55,320 Speaker 1: you have your dentists? Do you have your that is 315 00:16:55,440 --> 00:16:57,040 Speaker 1: that's a very technical term. You can look that up 316 00:16:57,080 --> 00:17:00,200 Speaker 1: in the tax coak just real quickly. What is What 317 00:17:00,200 --> 00:17:01,720 Speaker 1: do you think the Democrats are going to do here 318 00:17:01,720 --> 00:17:03,760 Speaker 1: with this tax issue? Are they're gonna try to use 319 00:17:03,760 --> 00:17:05,840 Speaker 1: this as something to really be a positive for them 320 00:17:05,840 --> 00:17:09,520 Speaker 1: and go against the Republicans. So far they were successful 321 00:17:09,560 --> 00:17:12,359 Speaker 1: in that and really ran hard on the tax issue. 322 00:17:12,400 --> 00:17:15,800 Speaker 1: And you've seen so far a lot of Democrats campaigning 323 00:17:15,840 --> 00:17:18,280 Speaker 1: on on raising taxes, particularly for the wealthy. So you know, 324 00:17:18,320 --> 00:17:20,800 Speaker 1: Elizabeth Warren and Bernie Sanders have talked about you know, 325 00:17:20,800 --> 00:17:24,600 Speaker 1: expanding the estate tax or or paying um uh, you know, 326 00:17:24,680 --> 00:17:27,720 Speaker 1: having the wealth the wealthy pay an annual tax on 327 00:17:27,760 --> 00:17:30,080 Speaker 1: their on their total wealth, and and they're saying, look, 328 00:17:30,080 --> 00:17:32,919 Speaker 1: this will pay for you know, um costs for childcare, 329 00:17:33,000 --> 00:17:35,439 Speaker 1: or for free college tuition or medicare for all. And 330 00:17:35,480 --> 00:17:38,399 Speaker 1: that's where they're really seeing that these ideas are polling 331 00:17:38,440 --> 00:17:42,440 Speaker 1: really well, you know in some cases. Laura Davison, thank 332 00:17:42,440 --> 00:17:44,240 Speaker 1: you so much for being with us. Laura Davison is 333 00:17:44,280 --> 00:17:48,359 Speaker 1: Congressional tax reporter for Bloomberg Tax, joining us from Washington, 334 00:17:48,520 --> 00:18:06,080 Speaker 1: d C. Well, it looks like the on again, off 335 00:18:06,119 --> 00:18:08,520 Speaker 1: again trade talks between the US and China are most 336 00:18:08,520 --> 00:18:11,560 Speaker 1: certainly back on again. To get the latest, we welcome 337 00:18:11,640 --> 00:18:15,000 Speaker 1: Mike McDonough. Mike is a chief economist for financial Products 338 00:18:15,000 --> 00:18:17,600 Speaker 1: at Bloomberg. He joined us live here in Bloomberg eleven 339 00:18:17,640 --> 00:18:21,159 Speaker 1: three oh studios in New York. So, Mike, is China 340 00:18:21,280 --> 00:18:24,120 Speaker 1: just gonna buy more soybeans from US? Or is there 341 00:18:24,160 --> 00:18:26,399 Speaker 1: something more substantive coming down the pike? You know, I 342 00:18:26,440 --> 00:18:28,480 Speaker 1: think I think we're going to see something far more 343 00:18:28,520 --> 00:18:32,359 Speaker 1: substantive than China buying more soybeans. I think the reason 344 00:18:32,400 --> 00:18:34,760 Speaker 1: we haven't seen a deal yet, well, there's many reasons, 345 00:18:35,280 --> 00:18:37,080 Speaker 1: but one of them is they are trying to do 346 00:18:37,160 --> 00:18:40,360 Speaker 1: something that is a little bit more holistic that answers 347 00:18:40,400 --> 00:18:44,720 Speaker 1: for some of the UH investor access into China, some 348 00:18:44,880 --> 00:18:48,879 Speaker 1: of the intellectual property UH issues. UH. And of course, 349 00:18:48,920 --> 00:18:51,200 Speaker 1: you know China buying more stuff, trying to buying more 350 00:18:51,200 --> 00:18:53,560 Speaker 1: stuff is actually the easiest thing to tackle it. If 351 00:18:53,600 --> 00:18:55,240 Speaker 1: that was it, this would have been done months ago. 352 00:18:55,600 --> 00:18:57,439 Speaker 1: It's trying to figure out how do you open up 353 00:18:57,440 --> 00:19:00,879 Speaker 1: more of China's economy to foreign investors, how do you 354 00:19:00,920 --> 00:19:03,920 Speaker 1: deal with intellectual property? And what is the enforcement mechanism 355 00:19:04,000 --> 00:19:06,840 Speaker 1: put in place to make sure that that happens well. 356 00:19:07,000 --> 00:19:10,040 Speaker 1: Talking about the enforcement mechanism, Steve mcnuch in, the Treasury 357 00:19:10,080 --> 00:19:12,479 Speaker 1: Secretary in the United States, said over the weekend at 358 00:19:12,480 --> 00:19:14,360 Speaker 1: the I m F meetings that the US is open 359 00:19:14,400 --> 00:19:17,080 Speaker 1: to facing repercussions if it doesn't live up to its 360 00:19:17,119 --> 00:19:19,960 Speaker 1: commitments and a potential trade deal with China. So this 361 00:19:20,160 --> 00:19:25,040 Speaker 1: actually speaks to the mechanism of enforcement. And my question 362 00:19:25,160 --> 00:19:28,479 Speaker 1: is how significant is that statement by Treasure Secretary monution. 363 00:19:28,640 --> 00:19:31,040 Speaker 1: You know, I know there had been some debate over 364 00:19:31,240 --> 00:19:34,919 Speaker 1: what if it was decided China wasn't following through with 365 00:19:35,040 --> 00:19:37,280 Speaker 1: part of the deal, what would happen. The US wanted 366 00:19:37,320 --> 00:19:40,480 Speaker 1: to put sanctions back on China. China wanted to be 367 00:19:40,520 --> 00:19:43,320 Speaker 1: able to reciprocate. I think that that was a line 368 00:19:43,320 --> 00:19:45,000 Speaker 1: in the sand that had been drawn that the US 369 00:19:45,119 --> 00:19:47,720 Speaker 1: was saying no. So it would indicate that there has 370 00:19:47,760 --> 00:19:50,040 Speaker 1: been some progress made on that front. But I'd be 371 00:19:50,119 --> 00:19:54,440 Speaker 1: really really interested to hear President Trump's comments on that 372 00:19:54,520 --> 00:19:58,480 Speaker 1: suggestion to see if they're a line there. So, Mike, 373 00:19:58,520 --> 00:20:00,480 Speaker 1: when you take a look at the both sides, I'm 374 00:20:00,480 --> 00:20:03,360 Speaker 1: thinking about China here, who is more incentive to get 375 00:20:03,400 --> 00:20:06,320 Speaker 1: a real deal done as a one as opposed to 376 00:20:06,320 --> 00:20:09,680 Speaker 1: one is more of a kind of a headline like deal. Uh. Well, 377 00:20:09,720 --> 00:20:12,119 Speaker 1: I think you know, China would like to see a 378 00:20:12,160 --> 00:20:15,320 Speaker 1: deal that kind of makes this go away this problem. 379 00:20:15,840 --> 00:20:17,640 Speaker 1: But I think you know what what China is worried 380 00:20:17,640 --> 00:20:19,840 Speaker 1: about right now is not just getting this deal done. 381 00:20:20,119 --> 00:20:22,200 Speaker 1: They're looking further ahead, and I think they're worried about 382 00:20:23,320 --> 00:20:25,320 Speaker 1: you know what if the economy starts to slow in 383 00:20:26,280 --> 00:20:28,240 Speaker 1: what is the situation going to be? Right if they 384 00:20:28,240 --> 00:20:32,639 Speaker 1: pass a holistic deal, you have these enforcement mechanisms in place. Uh, 385 00:20:32,680 --> 00:20:36,639 Speaker 1: will the bluster continue from the administration, as you know? 386 00:20:36,640 --> 00:20:39,280 Speaker 1: If growth is slowing ahead of the election and China 387 00:20:39,320 --> 00:20:42,359 Speaker 1: becomes another target despite this deal, so I think that 388 00:20:42,560 --> 00:20:44,679 Speaker 1: is a bit of a concern. I think that on 389 00:20:44,720 --> 00:20:49,120 Speaker 1: the U S side, the trade negotiators, the lighthousers of 390 00:20:49,240 --> 00:20:52,199 Speaker 1: the administration, um, they have a certain bar they'd like 391 00:20:52,280 --> 00:20:54,560 Speaker 1: to see. They view this as an opportunity to do 392 00:20:54,640 --> 00:20:58,000 Speaker 1: something meaningful with China. I think though, as growth has 393 00:20:58,040 --> 00:21:00,320 Speaker 1: slowed in the U S a little bit or become yeah, 394 00:21:00,400 --> 00:21:03,200 Speaker 1: that's growth is slowed, markets have become a little bit 395 00:21:03,200 --> 00:21:07,280 Speaker 1: more sang wine, I think that you have, um, the 396 00:21:07,320 --> 00:21:10,720 Speaker 1: President Trump's bar may have actually gone down below that 397 00:21:10,800 --> 00:21:12,720 Speaker 1: of his own trade negotiators. That's why I was saying 398 00:21:12,760 --> 00:21:16,320 Speaker 1: it would be interesting to get his comments on Stephen 399 00:21:16,320 --> 00:21:20,320 Speaker 1: Minusian statement of the China being able to put tariffs 400 00:21:20,359 --> 00:21:22,240 Speaker 1: on the U S if they don't follow through with 401 00:21:22,280 --> 00:21:26,480 Speaker 1: the deal. I I it's all very interesting to me that, well, here, 402 00:21:26,520 --> 00:21:29,400 Speaker 1: here's my here's my question. I'm trying to understand the 403 00:21:29,520 --> 00:21:33,159 Speaker 1: China U S trade negotiations in the context of the 404 00:21:33,240 --> 00:21:36,040 Speaker 1: latest salvos with the European Union in the United States, 405 00:21:36,040 --> 00:21:40,439 Speaker 1: and evidently talks are ongoing between those two regions to 406 00:21:40,480 --> 00:21:42,840 Speaker 1: try to come to some sort of agreement on everything 407 00:21:43,000 --> 00:21:48,639 Speaker 1: from whiskey to motorcycles to wine. And cheese. I'm just 408 00:21:48,680 --> 00:21:51,320 Speaker 1: trying to figure out why is that happening at the 409 00:21:51,359 --> 00:21:53,800 Speaker 1: same time that we're also hearing about the China talks. Well, 410 00:21:53,800 --> 00:21:56,600 Speaker 1: it's interesting, right, I think that the Europeans are concerned 411 00:21:56,640 --> 00:21:59,320 Speaker 1: at the moment that if there is closure on the 412 00:21:59,440 --> 00:22:01,960 Speaker 1: US trying a trade talks, that they are going to 413 00:22:02,000 --> 00:22:04,560 Speaker 1: become the next target of the administration. And I guess 414 00:22:04,560 --> 00:22:08,119 Speaker 1: you're starting to see some some signs of that. So, um, 415 00:22:08,160 --> 00:22:11,520 Speaker 1: you know, maybe it's a precursor for something more uh 416 00:22:12,040 --> 00:22:14,840 Speaker 1: more direct targeting Europe. But we're all gonna have to 417 00:22:14,920 --> 00:22:17,119 Speaker 1: kind of wait and see. I think, Mike wonder if 418 00:22:17,119 --> 00:22:19,800 Speaker 1: you could give your comments or your thoughts on this. 419 00:22:19,920 --> 00:22:23,600 Speaker 1: But it seems like, you know that the tariffs as 420 00:22:23,640 --> 00:22:26,480 Speaker 1: it relates to China actually worked. It brought them to 421 00:22:26,720 --> 00:22:29,760 Speaker 1: the table, and it has them maybe negotiating in a 422 00:22:29,800 --> 00:22:31,360 Speaker 1: way that's maybe a little bit more than we even 423 00:22:31,400 --> 00:22:34,080 Speaker 1: anticipated initially. Yeah, So, I mean I was talking about 424 00:22:34,080 --> 00:22:35,720 Speaker 1: the bar in the US. I think the bar for 425 00:22:35,840 --> 00:22:38,720 Speaker 1: China also went down, right, So when when the trade 426 00:22:38,720 --> 00:22:41,320 Speaker 1: war really started you were starting to see a deceleration 427 00:22:41,359 --> 00:22:43,920 Speaker 1: of China's economy, it wasn't due to the trade war. 428 00:22:44,400 --> 00:22:47,160 Speaker 1: It was due to the leveraging cycle they were having 429 00:22:47,200 --> 00:22:49,760 Speaker 1: at home. They misjudged the impact that would have. But 430 00:22:49,840 --> 00:22:52,719 Speaker 1: then coming into this year, you had that slowdown. Then 431 00:22:52,760 --> 00:22:55,000 Speaker 1: you had the kind of the bad sentiment of okay, 432 00:22:55,000 --> 00:22:56,720 Speaker 1: we are going into a trade war. So it's kind 433 00:22:56,720 --> 00:22:59,359 Speaker 1: of a double whammy. Uh. So they were eager to 434 00:22:59,720 --> 00:23:01,560 Speaker 1: come to the table and maybe make a little bit 435 00:23:01,560 --> 00:23:04,399 Speaker 1: more concessions than they had before. So I mean, really, 436 00:23:04,680 --> 00:23:08,000 Speaker 1: both sides bars are lower. I think that it is 437 00:23:08,040 --> 00:23:10,840 Speaker 1: imminent in my view, that we do get a deal. 438 00:23:11,000 --> 00:23:14,680 Speaker 1: I think that the reason we don't have a deal yet. Uh, 439 00:23:14,720 --> 00:23:17,600 Speaker 1: it's unrelated. But it's interesting when you look at when 440 00:23:17,600 --> 00:23:21,480 Speaker 1: President Trump had the summit with Kim jongun for North Korea, 441 00:23:21,520 --> 00:23:24,000 Speaker 1: when he went to Hanoi, I think everyone was surprised 442 00:23:24,040 --> 00:23:26,160 Speaker 1: that he just kind of walked away from that. Everybody 443 00:23:26,160 --> 00:23:28,400 Speaker 1: had assumed work had been done, the would at least 444 00:23:28,400 --> 00:23:30,199 Speaker 1: be some sort of friendly handshake and would end on 445 00:23:30,240 --> 00:23:34,240 Speaker 1: positive terms for the Chinese. Um they're fearful that if 446 00:23:34,240 --> 00:23:37,080 Speaker 1: they send President she to Marrow Lago and that repeats 447 00:23:37,119 --> 00:23:39,480 Speaker 1: that would not that would be a very unacceptable outcome 448 00:23:39,520 --> 00:23:42,160 Speaker 1: for the Chinese. So I think that they're making sure, 449 00:23:42,240 --> 00:23:44,760 Speaker 1: before that data is said, every eye is dotted and 450 00:23:44,840 --> 00:23:47,160 Speaker 1: every t is crossed. So for me, the moment that 451 00:23:47,280 --> 00:23:49,680 Speaker 1: date is set in my mind, I think that means 452 00:23:49,680 --> 00:23:51,040 Speaker 1: that deal has been done and they're just going to 453 00:23:51,160 --> 00:23:53,600 Speaker 1: kind of go through the motions. Mike mcdonnald, thank you 454 00:23:53,600 --> 00:23:55,560 Speaker 1: so much for being with us. Always love having you. 455 00:23:55,640 --> 00:23:59,320 Speaker 1: Mike mcdona, chief economist covering financial products for us here 456 00:23:59,320 --> 00:24:03,399 Speaker 1: at Bloomberg, joining us in our interactive broker's studio. Thanks 457 00:24:03,400 --> 00:24:05,560 Speaker 1: for listening to the Bloomberg P and L podcast. You 458 00:24:05,600 --> 00:24:08,240 Speaker 1: can subscribe and listen to interviews at Apple Podcasts or 459 00:24:08,280 --> 00:24:11,280 Speaker 1: whatever podcast platform you prefer. I'm Paul Sweeney, I'm on 460 00:24:11,320 --> 00:24:13,960 Speaker 1: Twitter at pt Sweeney. I'm Lisa abram Woyit's I'm on 461 00:24:14,000 --> 00:24:16,840 Speaker 1: Twitter at Lisa abram woits one before the podcast. You 462 00:24:16,880 --> 00:24:19,399 Speaker 1: can always catch us worldwide on Bloomberg Radio.