1
00:00:02,720 --> 00:00:08,719
Speaker 1: Bloomberg Audio Studios, podcasts, radio news seconds of why.

2
00:00:08,920 --> 00:00:11,079
Speaker 2: The question is not if thou count interest rights, The

3
00:00:11,160 --> 00:00:12,680
Speaker 2: question is by how much.

4
00:00:13,119 --> 00:00:15,600
Speaker 3: The answer to your question, John, is a quarter percentage

5
00:00:15,600 --> 00:00:19,040
Speaker 3: point cut as expected, but Fed officials also see two

6
00:00:19,160 --> 00:00:22,040
Speaker 3: more cuts this year, in October and December.

7
00:00:22,120 --> 00:00:26,239
Speaker 4: It's Wednesday, September seventeenth. The Federal Open Market Committee has

8
00:00:26,400 --> 00:00:29,240
Speaker 4: just wrapped up their most recent meeting in Washington, DC,

9
00:00:29,720 --> 00:00:33,720
Speaker 4: and after two days of analyzing and debating and forecasting,

10
00:00:34,000 --> 00:00:36,840
Speaker 4: the Committee voted to cut interest rates by twenty five

11
00:00:36,880 --> 00:00:37,600
Speaker 4: basis points.

12
00:00:37,720 --> 00:00:41,159
Speaker 5: I remain squarely focused on achieving our dual mandate goals

13
00:00:41,200 --> 00:00:44,080
Speaker 5: of maximum employment and stable prices for the benefit of

14
00:00:44,120 --> 00:00:48,280
Speaker 5: the American people. While the unemployment rate remains low, it

15
00:00:48,320 --> 00:00:50,479
Speaker 5: has edged up, job gains have slowed.

16
00:00:50,800 --> 00:00:52,919
Speaker 1: Yeah, it's the first time the Fed has cut an

17
00:00:52,960 --> 00:00:56,279
Speaker 1: over a year move coming after months of debate, And

18
00:00:56,320 --> 00:00:58,360
Speaker 1: on the one hand, the labor market is slowing, But

19
00:00:58,400 --> 00:01:00,400
Speaker 1: on the other hand, we're still trying to figure what

20
00:01:00,440 --> 00:01:03,920
Speaker 1: the impact of the tariffs is on prices, and consumer

21
00:01:03,960 --> 00:01:05,199
Speaker 1: spending is still going strong.

22
00:01:05,440 --> 00:01:08,319
Speaker 4: Right, you could make a convincing case for deeper cuts,

23
00:01:08,400 --> 00:01:11,280
Speaker 4: but you could also make a case for even raising

24
00:01:11,400 --> 00:01:14,080
Speaker 4: benchmark rates at this point, and we don't tend to

25
00:01:14,080 --> 00:01:17,040
Speaker 4: get a lot of these types of FED meetings where

26
00:01:17,080 --> 00:01:20,640
Speaker 4: the outcome is, you know, so debatable. So we have

27
00:01:20,720 --> 00:01:23,760
Speaker 4: to ask, how did the Central Bank actually make the

28
00:01:23,800 --> 00:01:27,240
Speaker 4: decision to cut to do that. Let's back up six

29
00:01:27,319 --> 00:01:31,520
Speaker 4: weeks to the beginning of August and head north. In fact,

30
00:01:31,800 --> 00:01:34,080
Speaker 4: we are going three thousand miles north.

31
00:01:39,440 --> 00:01:43,800
Speaker 6: I added to my collection of flies for fly fishing yesterday.

32
00:01:44,040 --> 00:01:46,839
Speaker 4: Oh, I am slightly obsessed with fishing, Lores.

33
00:01:47,000 --> 00:01:47,760
Speaker 3: I don't even fish.

34
00:01:48,000 --> 00:01:49,640
Speaker 6: I don't know I like to fish.

35
00:01:49,760 --> 00:01:52,720
Speaker 4: That's Mary Daily, president of the Federal Reserve Bank of

36
00:01:52,760 --> 00:01:53,480
Speaker 4: San Francisco.

37
00:01:53,680 --> 00:01:55,520
Speaker 6: So here's why I get these flies. I go to

38
00:01:55,600 --> 00:01:58,720
Speaker 6: places all over that have fly fishing, and then I

39
00:01:58,800 --> 00:02:03,160
Speaker 6: buy a fly that's specific to their area to remind you.

40
00:02:03,240 --> 00:02:07,640
Speaker 6: It's sort of geeky, but it reminds me that everybody fishes,

41
00:02:08,080 --> 00:02:10,280
Speaker 6: but that you have to have a local knowledge to fish.

42
00:02:10,320 --> 00:02:12,360
Speaker 4: Well, yeah, you have to have like the fly that's

43
00:02:12,400 --> 00:02:14,519
Speaker 4: in season for that particular location.

44
00:02:14,600 --> 00:02:16,200
Speaker 6: It kind of is why you go to the places

45
00:02:16,240 --> 00:02:18,560
Speaker 6: to visit to learn more about the economy. You sort

46
00:02:18,560 --> 00:02:21,080
Speaker 6: of have to You can understand it, but you don't

47
00:02:21,120 --> 00:02:23,480
Speaker 6: know it until you have the locality, so you don't

48
00:02:23,520 --> 00:02:23,680
Speaker 6: do it.

49
00:02:23,840 --> 00:02:27,000
Speaker 4: Daily oversees the twelfth District of the FED. It's the

50
00:02:27,240 --> 00:02:30,440
Speaker 4: largest of the districts and includes the nine most western

51
00:02:30,560 --> 00:02:34,359
Speaker 4: US states, plus the most northern, the Last Frontier, the

52
00:02:34,360 --> 00:02:39,560
Speaker 4: Great Land, the Sour Dough State. I am talking about Alaska, obviously.

53
00:02:39,960 --> 00:02:43,440
Speaker 1: In early August, Mary Daily visited Anchorage, the largest city

54
00:02:43,440 --> 00:02:45,760
Speaker 1: and biggest port in Alaska. It was actually your third

55
00:02:45,840 --> 00:02:48,639
Speaker 1: visit to the state this year. And she's on a mission.

56
00:02:48,320 --> 00:02:49,799
Speaker 4: Of sorts, an expedition.

57
00:02:50,160 --> 00:02:53,040
Speaker 1: Sure, she's on a northern expedition to try to find

58
00:02:53,080 --> 00:02:55,959
Speaker 1: answers to the questions that everyone in all FED officials,

59
00:02:55,960 --> 00:02:58,919
Speaker 1: everyone else are trying to constantly puzzle out. Right now,

60
00:02:59,320 --> 00:03:02,000
Speaker 1: what is going on with the US economy? Where's it headed.

61
00:03:02,080 --> 00:03:04,600
Speaker 6: I've heard that everywhere we've gone that this city's under

62
00:03:04,680 --> 00:03:07,760
Speaker 6: so much pressure and it's hard to what's your diagnosis

63
00:03:07,760 --> 00:03:08,840
Speaker 6: about how this happened?

64
00:03:09,400 --> 00:03:12,200
Speaker 4: So what was she seeing and how did it actually

65
00:03:12,240 --> 00:03:14,640
Speaker 4: inform the Fed's decision to cut rates A month later,

66
00:03:15,240 --> 00:03:18,280
Speaker 4: on the special edition of the All Thoughts podcast, we

67
00:03:18,400 --> 00:03:21,600
Speaker 4: are going to follow along as Daily tours her district,

68
00:03:21,840 --> 00:03:24,920
Speaker 4: speaking to local business leaders like a factory that makes

69
00:03:24,919 --> 00:03:27,720
Speaker 4: parts for the oil industry, and the airport and the

70
00:03:27,760 --> 00:03:30,480
Speaker 4: port itself to try to get a closer look at

71
00:03:30,480 --> 00:03:42,840
Speaker 4: the giant logistics hub that is the city of Anchorage.

72
00:03:44,200 --> 00:03:46,560
Speaker 1: You know, every town in the world, I think probably

73
00:03:46,640 --> 00:03:50,240
Speaker 1: likes to describe its residents is quote scrappy unquote, But

74
00:03:50,320 --> 00:03:53,080
Speaker 1: this really is like the first place I've been where

75
00:03:53,120 --> 00:03:56,200
Speaker 1: I think that might actually be true. People in Alaska

76
00:03:56,320 --> 00:03:57,440
Speaker 1: really do seem scrappy.

77
00:03:57,600 --> 00:03:59,680
Speaker 4: They have to be to get along up here. We

78
00:04:00,240 --> 00:04:03,560
Speaker 4: are on the edge of this vast wilderness. In fact,

79
00:04:03,960 --> 00:04:06,760
Speaker 4: one thing we learned is that people up here love

80
00:04:06,840 --> 00:04:08,960
Speaker 4: to compare the size of their state to how many

81
00:04:09,120 --> 00:04:10,520
Speaker 4: texases it would fit.

82
00:04:10,360 --> 00:04:13,280
Speaker 1: In which, to be fair, Texans love to do that.

83
00:04:13,240 --> 00:04:13,920
Speaker 7: Stuff as well.

84
00:04:14,240 --> 00:04:16,760
Speaker 4: Yeah, the answer is two and a half. By the way,

85
00:04:16,920 --> 00:04:20,000
Speaker 4: Alaska is the size of two and a half texases. Okay,

86
00:04:20,360 --> 00:04:24,080
Speaker 4: so everyone knows Alaska is big, but until you visit,

87
00:04:24,200 --> 00:04:27,679
Speaker 4: it's hard to really appreciate just how big. The only

88
00:04:27,720 --> 00:04:30,520
Speaker 4: way to get from Anchorage, which is the largest city,

89
00:04:30,800 --> 00:04:33,760
Speaker 4: to Juneo, which is the capital, is a two hour

90
00:04:33,920 --> 00:04:36,560
Speaker 4: plane ride. And if you want to haul supplies from

91
00:04:36,600 --> 00:04:39,960
Speaker 4: a place like Fairbanks, which is in the interior to

92
00:04:40,040 --> 00:04:42,919
Speaker 4: the oil fields on the north slope. That is a

93
00:04:43,040 --> 00:04:46,280
Speaker 4: ten hour drive on what is mostly a dirt road

94
00:04:46,520 --> 00:04:48,520
Speaker 4: with one gas station on the way.

95
00:04:49,120 --> 00:04:52,160
Speaker 1: It's really isolated. There's not even a railroad that takes

96
00:04:52,200 --> 00:04:54,520
Speaker 1: you to the Lower forty eight or even to Canada,

97
00:04:54,600 --> 00:04:57,320
Speaker 1: and there are mountains that basically cut off huge sections

98
00:04:57,320 --> 00:04:58,279
Speaker 1: of the state from each other.

99
00:04:58,560 --> 00:05:01,279
Speaker 4: But as we learn during our visit, Alaska is still

100
00:05:01,320 --> 00:05:03,760
Speaker 4: dealing with all the same issues that the rest of

101
00:05:03,800 --> 00:05:09,280
Speaker 4: the US faces, so things like inflation, unemployment, tariffs, housing shortages,

102
00:05:09,520 --> 00:05:10,760
Speaker 4: logistical snarls.

103
00:05:11,240 --> 00:05:13,480
Speaker 1: That's why Mary is here to try to get a

104
00:05:13,480 --> 00:05:16,640
Speaker 1: handle on the broader US economy by looking at a

105
00:05:16,640 --> 00:05:18,839
Speaker 1: place that, at least right now is sort of ground

106
00:05:19,000 --> 00:05:20,440
Speaker 1: zero for a lot of these trends.

107
00:05:20,600 --> 00:05:24,520
Speaker 6: Is to collect information. So we collect information not only

108
00:05:24,560 --> 00:05:27,120
Speaker 6: on the wide array of data that are available, and

109
00:05:27,279 --> 00:05:29,520
Speaker 6: then we have history and models, we have all of

110
00:05:29,560 --> 00:05:32,560
Speaker 6: those things, and then we have conversations.

111
00:05:32,839 --> 00:05:35,120
Speaker 1: Today, Mary is the guest of honor at the Anchorage

112
00:05:35,160 --> 00:05:40,160
Speaker 1: Economic Development Corporation's annual gathering. The Denigna Convention Center downtown

113
00:05:40,279 --> 00:05:44,480
Speaker 1: is overflowing with more than fifteen hundred local business owners, politicians,

114
00:05:44,520 --> 00:05:48,000
Speaker 1: civic leaders, they're here to mingle, network, talk shop, and

115
00:05:48,040 --> 00:05:51,120
Speaker 1: hear Mary's thoughts on where she thinks the economy stands well.

116
00:05:50,960 --> 00:05:54,200
Speaker 6: As counting the cranes is a future looking variable is

117
00:05:54,240 --> 00:05:56,960
Speaker 6: so important. So I just want to thank everybody who's

118
00:05:57,000 --> 00:06:00,320
Speaker 6: ever answered the base book, who's ever met with us.

119
00:06:00,440 --> 00:06:02,520
Speaker 6: If you like the bage book, we'll send you another one.

120
00:06:02,640 --> 00:06:03,920
Speaker 6: It used to be beige, by the way.

121
00:06:03,960 --> 00:06:06,720
Speaker 4: So this is the fact finding portion of the expedition,

122
00:06:06,920 --> 00:06:09,880
Speaker 4: because yes, Mary is giving a speech about what she's

123
00:06:09,920 --> 00:06:12,640
Speaker 4: seeing in the economy, but she's also learning from the

124
00:06:12,680 --> 00:06:14,880
Speaker 4: local businesses who are listening to her.

125
00:06:15,160 --> 00:06:17,919
Speaker 6: And what I've been hearing is that the uncertainty is

126
00:06:17,960 --> 00:06:19,279
Speaker 6: the word of the day. I guess it was on

127
00:06:19,360 --> 00:06:23,239
Speaker 6: the Bingo card, and uncertainty makes it harder for firms

128
00:06:23,240 --> 00:06:25,680
Speaker 6: and households to know what they're doing next, which makes

129
00:06:25,680 --> 00:06:29,680
Speaker 6: it harder for us as policymakers, for a reserve policymakers

130
00:06:29,680 --> 00:06:32,239
Speaker 6: to know exactly how the economy will evolve.

131
00:06:32,800 --> 00:06:35,080
Speaker 1: Mary isn't a voting member of the committee this year,

132
00:06:35,120 --> 00:06:37,719
Speaker 1: but as a Reserve bank president, she still participates in

133
00:06:37,800 --> 00:06:41,200
Speaker 1: all the FMC meetings, where she offers her own assessments

134
00:06:41,200 --> 00:06:44,000
Speaker 1: and opinions. Based on what she's seeing in the economy

135
00:06:44,000 --> 00:06:46,520
Speaker 1: of the twelfth district right now, and so her views

136
00:06:46,560 --> 00:06:48,480
Speaker 1: still do help shape the committee's decision.

137
00:06:48,680 --> 00:06:51,040
Speaker 6: All the states in my district on a regular basis,

138
00:06:51,440 --> 00:06:54,479
Speaker 6: as are my teams, and the reason for that is

139
00:06:54,480 --> 00:06:57,560
Speaker 6: so that we can understand firsthand what you are in

140
00:06:57,600 --> 00:07:00,880
Speaker 6: particularly thinking about what you see as your oppertunities when

141
00:07:00,920 --> 00:07:03,320
Speaker 6: you see your challenges, but also how do you see

142
00:07:03,320 --> 00:07:06,120
Speaker 6: the economy today. You know, there's an interesting statistic we

143
00:07:06,320 --> 00:07:10,160
Speaker 6: just heard that people feel decently pretty good about their

144
00:07:10,200 --> 00:07:14,040
Speaker 6: own situation, but pessimistic about the economy. We need to

145
00:07:14,160 --> 00:07:17,000
Speaker 6: understand why. What are you seeing as you look out?

146
00:07:17,360 --> 00:07:20,040
Speaker 6: Businesses are making decisions today about what they're going to

147
00:07:20,080 --> 00:07:21,680
Speaker 6: do at the end of the year. We need to

148
00:07:21,720 --> 00:07:24,200
Speaker 6: know what those are. We need to know how households

149
00:07:24,240 --> 00:07:26,880
Speaker 6: are feeling. Are they feeling strapped? Are they feeling like

150
00:07:26,920 --> 00:07:31,160
Speaker 6: they have enough disposable income? And the data alone, looking

151
00:07:31,160 --> 00:07:34,720
Speaker 6: at the published data, not all the micro data. You

152
00:07:34,720 --> 00:07:37,200
Speaker 6: could look at a hundred series and you would never

153
00:07:37,280 --> 00:07:38,520
Speaker 6: have the complete picture.

154
00:07:38,960 --> 00:07:41,760
Speaker 4: I'm sure we've all heard the phrase data dependent, and

155
00:07:41,800 --> 00:07:45,080
Speaker 4: the feed leans heavily on the volumes and volumes of

156
00:07:45,200 --> 00:07:50,120
Speaker 4: economic statistics that get released every month when making its decisions,

157
00:07:50,480 --> 00:07:53,880
Speaker 4: but sometimes you can augment that data with things you

158
00:07:53,920 --> 00:07:55,080
Speaker 4: observe on the ground.

159
00:07:55,800 --> 00:07:58,640
Speaker 1: Right, So, just a few days before the Alaska trip,

160
00:07:58,640 --> 00:08:01,240
Speaker 1: we got a jobs report that heavily revised down the

161
00:08:01,280 --> 00:08:04,640
Speaker 1: employment numbers from the earlier months. It was a big surprise,

162
00:08:05,000 --> 00:08:08,160
Speaker 1: huge moment for the markets, but it didn't really surprise Mary.

163
00:08:08,360 --> 00:08:11,040
Speaker 6: And what was interesting about the jobs report on Friday

164
00:08:11,360 --> 00:08:13,600
Speaker 6: is it better matched in the direction of change, not

165
00:08:13,680 --> 00:08:16,040
Speaker 6: in the magnitude. It better matched what I've been hearing.

166
00:08:16,440 --> 00:08:20,200
Speaker 6: And so a discippointing device for data that you don't

167
00:08:20,200 --> 00:08:23,840
Speaker 6: know if they're really accurate is what you hear from people.

168
00:08:23,880 --> 00:08:26,720
Speaker 6: Because people do not tell you I feel really, really

169
00:08:26,720 --> 00:08:29,200
Speaker 6: comfortable getting a job only to find out that the

170
00:08:29,240 --> 00:08:32,480
Speaker 6: job market report is bad. What they will tell you is, boy,

171
00:08:32,520 --> 00:08:35,760
Speaker 6: it looks really worrisome out there. And then you get

172
00:08:35,760 --> 00:08:38,560
Speaker 6: a jobs report that doesn't look like the rapid job

173
00:08:38,600 --> 00:08:40,199
Speaker 6: growth that was the thing that was out of whack,

174
00:08:40,520 --> 00:08:43,120
Speaker 6: the rapid job growth from the month before. Is what

175
00:08:43,320 --> 00:08:45,840
Speaker 6: I said, Well, really, that's not what I'm hearing. What's

176
00:08:45,880 --> 00:08:47,840
Speaker 6: the gap? And we spent a lot of time digging

177
00:08:47,880 --> 00:08:50,920
Speaker 6: in and unpacking that but then when the job's market

178
00:08:50,960 --> 00:08:53,520
Speaker 6: report got revised, I was like, Okay, that makes more

179
00:08:53,559 --> 00:08:54,199
Speaker 6: sense even.

180
00:08:54,000 --> 00:08:56,560
Speaker 4: But of course jobs aren't The only thing that FED

181
00:08:56,600 --> 00:09:01,000
Speaker 4: cares about. It's mandate is low unemployment and stable inflation,

182
00:09:01,400 --> 00:09:04,959
Speaker 4: and these things seem to be operating across currents right now.

183
00:09:05,320 --> 00:09:08,080
Speaker 4: Inflation has been above the FEDS two percent target for

184
00:09:08,120 --> 00:09:11,480
Speaker 4: a while, and the concern is that with tariffs coming

185
00:09:11,480 --> 00:09:15,160
Speaker 4: in from the Trump administration, prices are just going to go.

186
00:09:15,200 --> 00:09:15,920
Speaker 8: Up further.

187
00:09:17,480 --> 00:09:17,720
Speaker 7: Time.

188
00:09:20,960 --> 00:09:23,400
Speaker 1: So to understand the risk here, we're following Mary to

189
00:09:23,440 --> 00:09:26,960
Speaker 1: the offices of Northern Solutions. It's an Alaskan company which

190
00:09:27,000 --> 00:09:30,040
Speaker 1: makes components and parts for the oil industry, which is

191
00:09:30,080 --> 00:09:31,720
Speaker 1: obviously big business in the state.

192
00:09:32,280 --> 00:09:35,520
Speaker 4: Yeah, all the pipes and casings and spools and valves

193
00:09:35,559 --> 00:09:36,360
Speaker 4: and things like that.

194
00:09:39,440 --> 00:09:42,199
Speaker 1: And as you can imagine, steel is a pretty key

195
00:09:42,240 --> 00:09:44,840
Speaker 1: input for a lot of these products. Since June, there's

196
00:09:44,840 --> 00:09:47,719
Speaker 1: been a whopping fifty percent tariff on steel and aluminum

197
00:09:47,720 --> 00:09:48,480
Speaker 1: coming from abroad.

198
00:09:49,120 --> 00:09:52,559
Speaker 9: So we compared twenty one So today it's cheaper inste

199
00:09:52,679 --> 00:09:56,360
Speaker 9: if we prepared today to twenty three twenty four.

200
00:09:56,600 --> 00:09:59,440
Speaker 1: Yeah, it's small and companies like Northern Solutions are trying

201
00:09:59,440 --> 00:10:02,559
Speaker 1: to figure out how to navigate all these new trade restrictions.

202
00:10:02,800 --> 00:10:05,280
Speaker 1: It's not as easy as just say switching to a

203
00:10:05,360 --> 00:10:06,040
Speaker 1: US supplier.

204
00:10:06,760 --> 00:10:09,520
Speaker 2: You do that and you can't get the continuity, well,

205
00:10:09,600 --> 00:10:12,800
Speaker 2: then that's a cost to you that not need back there.

206
00:10:13,240 --> 00:10:16,520
Speaker 2: So it's really helpful for us to think about when

207
00:10:16,520 --> 00:10:19,320
Speaker 2: we try to think out the effects of parrots. Yeah,

208
00:10:19,360 --> 00:10:25,240
Speaker 2: effects of changes on any administration monitor ustory absolutely.

209
00:10:25,280 --> 00:10:28,520
Speaker 9: I mean the terriffs, so the tariffs balanced it so

210
00:10:28,559 --> 00:10:30,800
Speaker 9: I can go to a US mil I can go

211
00:10:30,840 --> 00:10:33,560
Speaker 9: to a foreign mill and I'm going to pay the same.

212
00:10:33,440 --> 00:10:34,640
Speaker 10: Price now with that tariff.

213
00:10:34,960 --> 00:10:37,600
Speaker 9: But it's the industry that mill's here too, and the

214
00:10:37,679 --> 00:10:41,320
Speaker 9: lead time of that steel that's the problem. And honestly,

215
00:10:41,360 --> 00:10:43,640
Speaker 9: we have a lot of small steel mills here in

216
00:10:43,640 --> 00:10:46,160
Speaker 9: this country, a lot of small ones. They're very very

217
00:10:46,200 --> 00:10:48,480
Speaker 9: specific to a certain industry.

218
00:10:49,200 --> 00:10:51,640
Speaker 4: In other words, all steel isn't equal.

219
00:10:52,080 --> 00:10:54,400
Speaker 10: So there's mills all around the world, steel mills all

220
00:10:54,440 --> 00:10:57,439
Speaker 10: around the world. I can't use them all because of that,

221
00:10:57,600 --> 00:11:01,640
Speaker 10: because of their mptrs, not tree of origin, just how

222
00:11:01,720 --> 00:11:04,280
Speaker 10: well they do it. Okay, So we have a lot

223
00:11:04,320 --> 00:11:06,760
Speaker 10: of steel that comes into the US too, mean that

224
00:11:06,760 --> 00:11:11,920
Speaker 10: that comes from brought in as green to he treated

225
00:11:11,960 --> 00:11:15,040
Speaker 10: in the US, so that MTR is generated from the

226
00:11:15,200 --> 00:11:18,760
Speaker 10: US heat treat facility and now it's FO one percent American,

227
00:11:18,840 --> 00:11:20,360
Speaker 10: and then you avloid all this stuff on it.

228
00:11:21,240 --> 00:11:23,640
Speaker 9: So when we talked about metals that I can use

229
00:11:23,679 --> 00:11:25,800
Speaker 9: there all over the place, but I can't use them all.

230
00:11:26,040 --> 00:11:28,440
Speaker 4: This is actually a really good example of the kind

231
00:11:28,480 --> 00:11:32,320
Speaker 4: of information that makes Mary's visits so important. It's the

232
00:11:32,440 --> 00:11:35,199
Speaker 4: kind of thing that you can't really learn from an

233
00:11:35,240 --> 00:11:36,400
Speaker 4: economic data release.

234
00:11:36,440 --> 00:11:37,520
Speaker 3: I'm good use that.

235
00:11:37,760 --> 00:11:40,080
Speaker 6: One of the things that I just to show you

236
00:11:40,120 --> 00:11:43,720
Speaker 6: how you how you use things I've learned is that

237
00:11:44,080 --> 00:11:47,160
Speaker 6: if you think about how likely we gift all of

238
00:11:47,160 --> 00:11:49,800
Speaker 6: our potouction from the United States, are how likely is

239
00:11:49,840 --> 00:11:52,720
Speaker 6: a global market on steel to be able to if

240
00:11:52,720 --> 00:11:54,280
Speaker 6: we put it all back today. I mean, you've taught

241
00:11:54,320 --> 00:11:56,719
Speaker 6: me two things already that not everybody is here during

242
00:11:56,760 --> 00:11:59,800
Speaker 6: your industry, and you can have to have a specific,

243
00:12:00,320 --> 00:12:03,000
Speaker 6: you know, heat strategy in order to even use the tilS.

244
00:12:03,320 --> 00:12:04,880
Speaker 6: They have to be a startin following. So it just

245
00:12:04,920 --> 00:12:07,360
Speaker 6: means that you don't have the open marketplace that I

246
00:12:07,360 --> 00:12:09,320
Speaker 6: think many people would think you have, right, so they

247
00:12:09,320 --> 00:12:12,240
Speaker 6: would just look at the number of manufacturers they'd say, oh, look,

248
00:12:12,280 --> 00:12:17,439
Speaker 6: you could do all of this, but yeah, there's barriers.

249
00:12:17,480 --> 00:12:21,160
Speaker 4: You know, there's another big Alaskan business that's grappling with tariffs,

250
00:12:21,400 --> 00:12:25,880
Speaker 4: and that is the port next stop, the Port of Alaska.

251
00:12:42,200 --> 00:12:45,680
Speaker 6: Maybe have a demand for those ships, the commission message,

252
00:12:46,080 --> 00:12:48,160
Speaker 6: although I'll say that's it in particular.

253
00:12:48,240 --> 00:12:51,240
Speaker 3: So they have three ships that they rotate between, and

254
00:12:52,040 --> 00:12:52,439
Speaker 3: they have.

255
00:12:52,400 --> 00:12:54,360
Speaker 1: The Port of Alaska used to be called the Port

256
00:12:54,400 --> 00:12:56,840
Speaker 1: of Anchorage. By the way, very cool. It's a deep

257
00:12:56,880 --> 00:13:00,720
Speaker 1: water port. The tides here are crazy. Here's a Jim Jagger,

258
00:13:00,800 --> 00:13:03,640
Speaker 1: the ports acting director, explaining what they're having to deal with.

259
00:13:04,000 --> 00:13:07,720
Speaker 3: So Port of Alaska has a variety of issues that

260
00:13:08,080 --> 00:13:12,479
Speaker 3: we're not unique, except that we're unique in the combination.

261
00:13:13,480 --> 00:13:17,280
Speaker 3: So what are our challenges? For instance, we have a

262
00:13:17,520 --> 00:13:20,360
Speaker 3: pretty fast current. We have a thirty foot tide flus

263
00:13:20,880 --> 00:13:24,080
Speaker 3: so between low tide and high tide thirty thirty four.

264
00:13:24,520 --> 00:13:27,080
Speaker 3: And our maximum tide flux between the lowest tide of

265
00:13:27,080 --> 00:13:28,720
Speaker 3: the season and the highest tides twenty.

266
00:13:29,160 --> 00:13:31,440
Speaker 10: I heard the second biggest tide flux in the world.

267
00:13:31,520 --> 00:13:35,280
Speaker 3: Yeah, it's actually depending on it's probably fifth or sixth Okay,

268
00:13:35,280 --> 00:13:38,000
Speaker 3: but in places where people actually do commerce.

269
00:13:37,920 --> 00:13:38,559
Speaker 11: We're number two.

270
00:13:38,920 --> 00:13:41,640
Speaker 4: So because of the harsh growing conditions and the short

271
00:13:41,679 --> 00:13:45,040
Speaker 4: summer season in Alaska, almost all of the state's fresh

272
00:13:45,080 --> 00:13:48,160
Speaker 4: food has to be imported, and the vast majority of

273
00:13:48,200 --> 00:13:52,080
Speaker 4: that food arrives by boat from west coast piers, mostly

274
00:13:52,200 --> 00:13:55,640
Speaker 4: Seattle and Tacoma, and with only four ships coming in

275
00:13:55,679 --> 00:14:00,240
Speaker 4: per week, Alaska's supply lines are stretched very tight, and

276
00:14:00,280 --> 00:14:03,760
Speaker 4: Mary has actually experienced the downside of those stretched supply

277
00:14:03,880 --> 00:14:07,079
Speaker 4: lines before. Here she is talking with Jim about.

278
00:14:06,800 --> 00:14:08,240
Speaker 6: It running out of the things. We ran out of

279
00:14:08,280 --> 00:14:11,360
Speaker 6: this when I was here in May, the hotel ran

280
00:14:11,400 --> 00:14:14,079
Speaker 6: out of coffee because they said the supplier hadn't gotten

281
00:14:14,120 --> 00:14:16,760
Speaker 6: it in and they wouldn't get it until in May.

282
00:14:17,040 --> 00:14:19,880
Speaker 3: We had we lost a ship because of a mechanical

283
00:14:20,480 --> 00:14:23,960
Speaker 3: If your timing was correct, you may have your coffee

284
00:14:24,040 --> 00:14:24,880
Speaker 3: may have been coming down there.

285
00:14:24,960 --> 00:14:26,720
Speaker 6: Yeah, I went down for coffee and she said, we

286
00:14:27,080 --> 00:14:29,200
Speaker 6: don't have any coffee before that.

287
00:14:29,200 --> 00:14:31,680
Speaker 3: That actually demonstrates how skinny are a supply line.

288
00:14:31,840 --> 00:14:34,920
Speaker 6: Yeah, that's why I wanted to talk about it. I'm

289
00:14:34,920 --> 00:14:37,520
Speaker 6: still I'm not traumatized by my lack of cof but

290
00:14:37,800 --> 00:14:41,600
Speaker 6: I just was surprised at how I'm surprised at how

291
00:14:42,080 --> 00:14:43,480
Speaker 6: fragile our vulnerable.

292
00:14:43,880 --> 00:14:45,960
Speaker 3: We have six to ten days worth of food in

293
00:14:46,000 --> 00:14:49,320
Speaker 3: the state, so we import. Depending on whose numbers you believe,

294
00:14:49,400 --> 00:14:51,560
Speaker 3: between ninety four and ninety six percent of the food

295
00:14:51,600 --> 00:14:55,760
Speaker 3: consumed in Alaska is important figure. We're handling three quarters

296
00:14:55,800 --> 00:14:58,760
Speaker 3: of that, so you know, if that's coming in. We

297
00:14:59,280 --> 00:15:02,040
Speaker 3: have four Schedu tool container ships a week, two on Sundays,

298
00:15:02,040 --> 00:15:05,760
Speaker 3: two on Tuesdays. If we lose a ship, you know,

299
00:15:05,880 --> 00:15:08,120
Speaker 3: that's twenty five percent of the food for the next week.

300
00:15:08,920 --> 00:15:11,320
Speaker 3: And it is very realistic that if you walk into

301
00:15:11,320 --> 00:15:14,440
Speaker 3: the fred Meyer grocery store and you go, huh, why

302
00:15:14,480 --> 00:15:19,240
Speaker 3: is there no salad? You know that's why. And you

303
00:15:19,280 --> 00:15:22,280
Speaker 3: know it's an interesting take. If you go down to

304
00:15:22,320 --> 00:15:24,840
Speaker 3: the lower forty eight and say, go to home Depot.

305
00:15:25,360 --> 00:15:29,880
Speaker 3: Home Depot's lower forty eight stores have a restock where

306
00:15:29,880 --> 00:15:32,880
Speaker 3: they can restock an entire store in thirty two hours.

307
00:15:33,200 --> 00:15:34,840
Speaker 3: So if you're on the Gulf Coast and they have

308
00:15:34,880 --> 00:15:37,800
Speaker 3: a hurricane, they completely sell the store out. They're set

309
00:15:37,880 --> 00:15:40,240
Speaker 3: up so that they can come in thirty two hours

310
00:15:40,320 --> 00:15:44,520
Speaker 3: later they're totally restocked. Okay, now apply that model to

311
00:15:44,560 --> 00:15:48,600
Speaker 3: the Alaska where we have no warehousing thirty two hours.

312
00:15:48,680 --> 00:15:51,520
Speaker 3: It means if if we have an earthquake or something

313
00:15:51,560 --> 00:15:54,560
Speaker 3: happens here and they empty out the store, they place

314
00:15:54,640 --> 00:15:58,160
Speaker 3: the order thirty two hours to get a home up

315
00:15:58,200 --> 00:16:01,480
Speaker 3: on the dock. There is then a sixty six and

316
00:16:01,480 --> 00:16:04,960
Speaker 3: a half hour float up the anchorage. And that's assuming

317
00:16:05,000 --> 00:16:06,400
Speaker 3: you're on the right cycle and you don't have to

318
00:16:06,400 --> 00:16:08,280
Speaker 3: wait a couple of days till the next ship leaves.

319
00:16:08,720 --> 00:16:10,440
Speaker 3: So it gets up here in sixty six and a

320
00:16:10,480 --> 00:16:12,840
Speaker 3: half hours, and then it's got to make it from

321
00:16:12,840 --> 00:16:16,280
Speaker 3: anchorage to wherever the final destination is. So if you're

322
00:16:16,560 --> 00:16:19,760
Speaker 3: in midtown Anchorage, well you'll you'll be there this afternoon.

323
00:16:20,600 --> 00:16:23,960
Speaker 3: If it's in Fairbanks, well that's another day. So suddenly

324
00:16:24,000 --> 00:16:27,000
Speaker 3: your thirty two hour restock, you know, could be six

325
00:16:27,120 --> 00:16:27,720
Speaker 3: seven days.

326
00:16:28,200 --> 00:16:30,640
Speaker 4: Can I ask a dumb question? But why don't you

327
00:16:30,640 --> 00:16:32,520
Speaker 4: build some warehousing capacity?

328
00:16:32,560 --> 00:16:33,360
Speaker 9: That was my question.

329
00:16:34,640 --> 00:16:35,480
Speaker 4: I don't think it's dumb.

330
00:16:35,520 --> 00:16:36,320
Speaker 8: I'm just going to ask those.

331
00:16:37,160 --> 00:16:40,920
Speaker 3: Problem is that we have a very small population spread

332
00:16:40,920 --> 00:16:42,240
Speaker 3: out over a huge area.

333
00:16:42,320 --> 00:16:44,080
Speaker 7: You know, three quarters of a million people in.

334
00:16:44,040 --> 00:16:47,880
Speaker 3: The entire state, so basically a city, right, and our

335
00:16:47,960 --> 00:16:49,880
Speaker 3: state is twenty half times the size of Texas.

336
00:16:50,800 --> 00:16:53,880
Speaker 7: But if you really want to see it, Go to Bushell, Aska.

337
00:16:54,000 --> 00:16:56,400
Speaker 1: That's John Day, an engineer who is leading a big

338
00:16:56,440 --> 00:16:57,920
Speaker 1: modernization effort at the port.

339
00:16:58,040 --> 00:17:00,920
Speaker 7: So go to these remote communities and then you'll really

340
00:17:00,920 --> 00:17:05,600
Speaker 7: see the effect of what you're talking about. It's it's pronounced.

341
00:17:05,680 --> 00:17:09,120
Speaker 7: If they if they get somebody's communities only get three

342
00:17:09,200 --> 00:17:13,600
Speaker 7: four barges a year. Basically, milk is hugely expensive. Anything

343
00:17:13,640 --> 00:17:16,159
Speaker 7: fresh is very expensive. If you go to you know,

344
00:17:16,280 --> 00:17:18,639
Speaker 7: I've worked living here, I've worked in a lot of

345
00:17:18,680 --> 00:17:22,600
Speaker 7: remote places. We're talking Kodiak or Saint Paul Island or

346
00:17:22,720 --> 00:17:26,159
Speaker 7: Bethel or something. Then you really see the end of

347
00:17:26,200 --> 00:17:30,600
Speaker 7: the supply chain and it's super sensitive in those locations.

348
00:17:30,000 --> 00:17:31,840
Speaker 6: So it's very it can be vulnerable here, but it's

349
00:17:31,840 --> 00:17:33,200
Speaker 6: sort of fragile.

350
00:17:33,359 --> 00:17:36,200
Speaker 7: Vulnerable, and we're kind of a hub. It's a hub

351
00:17:36,200 --> 00:17:38,800
Speaker 7: and spoke system, so we're a hub that helps supply

352
00:17:39,160 --> 00:17:42,280
Speaker 7: those areas and if we're sensitive there ten times.

353
00:17:42,640 --> 00:17:42,840
Speaker 9: Yeah.

354
00:17:43,920 --> 00:17:46,680
Speaker 1: Now, just to make things even more complicated, the port

355
00:17:46,760 --> 00:17:49,959
Speaker 1: also has tariffs to contend with. Is the primary import

356
00:17:50,040 --> 00:17:52,119
Speaker 1: hub from the entire state. You can imagine that the

357
00:17:52,119 --> 00:17:54,840
Speaker 1: port thinks about this issue quite a bit. Not only

358
00:17:54,920 --> 00:17:57,800
Speaker 1: could tariff's impact trade all those ships going in and

359
00:17:57,840 --> 00:18:00,959
Speaker 1: out of the harbor, stopping to refuel forth. But they

360
00:18:01,000 --> 00:18:03,040
Speaker 1: could get the first look at how companies choose to

361
00:18:03,040 --> 00:18:04,760
Speaker 1: respond to any increase in costs.

362
00:18:04,880 --> 00:18:06,640
Speaker 6: Also, it's just dis likely to push up the price

363
00:18:06,680 --> 00:18:09,280
Speaker 6: of goods. Oh yeah, so they're gonna face tariffs on goods,

364
00:18:09,280 --> 00:18:11,560
Speaker 6: but they're also going to face port fees on goods,

365
00:18:11,600 --> 00:18:13,360
Speaker 6: and so then it's just more expensive.

366
00:18:13,359 --> 00:18:16,680
Speaker 3: It gets worse though, because we have we have the

367
00:18:17,200 --> 00:18:21,840
Speaker 3: death spiral. So we raise our tariffs and then right now,

368
00:18:21,920 --> 00:18:24,600
Speaker 3: most of the cargoes coming in out our deep water vessels.

369
00:18:24,640 --> 00:18:27,880
Speaker 3: But if we raise our tariffs per ton enough, at

370
00:18:27,880 --> 00:18:30,920
Speaker 3: some point, some folks who are shipping things that are

371
00:18:30,960 --> 00:18:34,679
Speaker 3: non time sensitive new cars, you know, we'll go, you know,

372
00:18:35,119 --> 00:18:36,960
Speaker 3: for the tariff. I'm just going to bring it up

373
00:18:37,000 --> 00:18:40,960
Speaker 3: on a on a barge into Wittier and I'll save

374
00:18:41,000 --> 00:18:45,120
Speaker 3: the tariff. And then what happens is that then reduces

375
00:18:45,160 --> 00:18:48,600
Speaker 3: our overall tonnage. We still have to make our debt payment,

376
00:18:48,880 --> 00:18:52,080
Speaker 3: so we now have to increase our terraffs more. So

377
00:18:52,200 --> 00:18:55,119
Speaker 3: we're getting into the spiral. Food prices just wight not

378
00:18:55,240 --> 00:18:57,399
Speaker 3: be even more And oh, by the way, you know,

379
00:18:57,640 --> 00:19:00,280
Speaker 3: maybe you're not paying the teriff on your truck. You're

380
00:19:00,280 --> 00:19:01,840
Speaker 3: going to get it ten days later than you thought

381
00:19:01,880 --> 00:19:04,840
Speaker 3: you were, you know, so you're getting worse cargo service also,

382
00:19:05,000 --> 00:19:09,320
Speaker 3: So the impact on Alaskans is they're paying more for

383
00:19:09,400 --> 00:19:14,080
Speaker 3: certain things like food and everything else is the cargo

384
00:19:14,119 --> 00:19:15,120
Speaker 3: service is less good.

385
00:19:16,000 --> 00:19:19,560
Speaker 6: Well that the normal way that all of this, any

386
00:19:19,640 --> 00:19:22,560
Speaker 6: kind of extra tax, ships out is you either wait

387
00:19:22,600 --> 00:19:25,320
Speaker 6: longer or you pay more. Yeah, that's that's just how

388
00:19:25,320 --> 00:19:27,480
Speaker 6: it works, I mean, in any of the things. That's

389
00:19:27,520 --> 00:19:31,280
Speaker 6: why I tried to put an optimistic endpoint on the

390
00:19:31,320 --> 00:19:34,000
Speaker 6: speech is because you can I think ultimately it's fair.

391
00:19:34,080 --> 00:19:36,320
Speaker 6: You guys are very enthusiastic about what you're trying to do.

392
00:19:36,800 --> 00:19:38,920
Speaker 6: But there's the other side of it, which can easily

393
00:19:39,000 --> 00:19:39,879
Speaker 6: demoralize people.

394
00:19:39,960 --> 00:19:40,080
Speaker 4: Right.

395
00:19:40,119 --> 00:19:42,760
Speaker 6: It just seems like an insurmountable problem when you think

396
00:19:42,760 --> 00:19:45,040
Speaker 6: of the cost structure here. But we have no option,

397
00:19:45,320 --> 00:19:47,560
Speaker 6: no exactly. So you can either back yourself into corner

398
00:19:47,640 --> 00:19:49,679
Speaker 6: with no option, or you can just say well and

399
00:19:49,760 --> 00:19:53,200
Speaker 6: be sad, right, or you can just get busy with purpose.

400
00:19:53,840 --> 00:19:56,800
Speaker 1: So yeah, it's sort of common knowledge that it's expensive

401
00:19:56,800 --> 00:19:59,040
Speaker 1: to live in Alaska. It just costs more to get

402
00:19:59,080 --> 00:20:02,399
Speaker 1: goods and services pure and reasons. Understand that's part of

403
00:20:02,400 --> 00:20:04,440
Speaker 1: the deal. But there are limits to just how much

404
00:20:04,480 --> 00:20:06,840
Speaker 1: of a premium Alaskans are willing to pay to live here,

405
00:20:07,119 --> 00:20:09,280
Speaker 1: and just how much businesses can get away with when

406
00:20:09,320 --> 00:20:12,280
Speaker 1: it comes to pricing. Cheryl Beckham, director of finance at

407
00:20:12,280 --> 00:20:14,440
Speaker 1: the Port of Alaska, talks about this plant with Mary.

408
00:20:14,760 --> 00:20:18,160
Speaker 6: I'm revealing my economists background, but it just makes sense

409
00:20:18,200 --> 00:20:19,800
Speaker 6: that the price would be higher here because you have

410
00:20:19,840 --> 00:20:22,520
Speaker 6: all these additional costs, right, But you're saying the small

411
00:20:22,520 --> 00:20:24,720
Speaker 6: communities think it should be like it is in the

412
00:20:24,760 --> 00:20:26,840
Speaker 6: lower forty eighth, So you have to put this difference.

413
00:20:26,960 --> 00:20:29,800
Speaker 3: So there's a similar So they understand that there's a

414
00:20:29,840 --> 00:20:30,760
Speaker 3: transportation cost.

415
00:20:30,880 --> 00:20:33,600
Speaker 6: But what is that margin, Okay, if they're willing.

416
00:20:33,400 --> 00:20:36,359
Speaker 11: To accept, right, So as costs go up and fuel

417
00:20:36,400 --> 00:20:38,840
Speaker 11: goes up, and the you know, the fuel bars and

418
00:20:38,920 --> 00:20:41,679
Speaker 11: tankers that bring it, they cost more, so.

419
00:20:41,640 --> 00:20:44,280
Speaker 6: You're probably always having a little less margin up here.

420
00:20:44,320 --> 00:20:46,680
Speaker 4: Right, yes, right, so you do This is the really

421
00:20:46,760 --> 00:20:49,640
Speaker 4: big question. How much of the extra cost coming from

422
00:20:49,640 --> 00:20:52,879
Speaker 4: the tariffs is going to be absorbed by the companies themselves,

423
00:20:53,160 --> 00:20:58,040
Speaker 4: whether it's importers or the transportation businesses. Or middlemen like

424
00:20:58,080 --> 00:21:00,440
Speaker 4: the port, and how much of the cost is going

425
00:21:00,480 --> 00:21:04,440
Speaker 4: to be passed on to consumers, which would basically risk

426
00:21:04,600 --> 00:21:05,879
Speaker 4: fanning inflation again.

427
00:21:06,160 --> 00:21:08,080
Speaker 1: And that is a big deal for a state which

428
00:21:08,080 --> 00:21:10,960
Speaker 1: already has a very high cost of living, precisely because

429
00:21:11,000 --> 00:21:13,640
Speaker 1: all this stuff needs to be imported and often sent

430
00:21:13,720 --> 00:21:16,840
Speaker 1: on to really remote locations within the state. And even

431
00:21:16,840 --> 00:21:20,160
Speaker 1: if you're not necessarily importing foreign goods, tariffs can still

432
00:21:20,160 --> 00:21:22,040
Speaker 1: push up the price of what's made domestically.

433
00:21:22,320 --> 00:21:30,119
Speaker 6: Question that we're grappling with making monetary policies. There's taxes, immigration, deregulation, tariffs,

434
00:21:30,440 --> 00:21:33,399
Speaker 6: and those things have different likely effects, et cetera. So

435
00:21:33,400 --> 00:21:36,040
Speaker 6: one of the questions I've been asking people when we

436
00:21:36,080 --> 00:21:39,160
Speaker 6: meet is do any of those things? Can you see

437
00:21:39,160 --> 00:21:43,240
Speaker 6: any of those effects immediately affecting your business here? And

438
00:21:43,280 --> 00:21:46,359
Speaker 6: do you have any sense if they will immediately?

439
00:21:47,359 --> 00:21:50,439
Speaker 7: Well, the terrible things come up in our construction. So

440
00:21:50,480 --> 00:21:53,280
Speaker 7: we have a lot of big construction coming up, like

441
00:21:53,320 --> 00:21:56,240
Speaker 7: a couple of billion dollars worth of infrastructure.

442
00:21:57,640 --> 00:22:01,520
Speaker 11: Is that port specific Yeah, that's our doc okay, And

443
00:22:02,119 --> 00:22:06,159
Speaker 11: most of that is by America because we're trying to

444
00:22:06,160 --> 00:22:09,400
Speaker 11: get betteral bonding, and that comes with a territory, so the.

445
00:22:09,280 --> 00:22:12,800
Speaker 7: Tariffs are not directly affecting that because theoretically that's on

446
00:22:12,920 --> 00:22:17,960
Speaker 7: foreign goods. However, it floats the whole the whole harbor up.

447
00:22:18,040 --> 00:22:21,479
Speaker 7: So the price is steel by America, steel by America,

448
00:22:21,560 --> 00:22:24,480
Speaker 7: this buy America. That all goes up. So it has

449
00:22:24,800 --> 00:22:27,040
Speaker 7: a large effect on that.

450
00:22:27,359 --> 00:22:30,000
Speaker 6: How much of you seeing prices rise maybe from when

451
00:22:30,040 --> 00:22:31,919
Speaker 6: you were originally planning it?

452
00:22:32,000 --> 00:22:34,600
Speaker 7: I mean, no, by one, We admit that number, but

453
00:22:34,760 --> 00:22:39,280
Speaker 7: it's a large number. We started off ten years ago

454
00:22:39,359 --> 00:22:43,439
Speaker 7: with something that was four hundred million dollars billion.

455
00:22:43,520 --> 00:22:46,159
Speaker 4: Now right the Port of Alaska is in the middle

456
00:22:46,200 --> 00:22:49,960
Speaker 4: of a two and a half billion dollar modernization program,

457
00:22:50,040 --> 00:22:52,560
Speaker 4: so it's a pretty bad time for the cost of

458
00:22:52,600 --> 00:22:56,320
Speaker 4: materials to be going up. And there's also the financing costs.

459
00:22:56,400 --> 00:23:00,240
Speaker 4: Right if interest rates go up because inflation is rising,

460
00:23:00,400 --> 00:23:04,080
Speaker 4: that also adds to the cost, possibly exponentially.

461
00:23:04,320 --> 00:23:06,560
Speaker 6: So can I ask a question about from all three

462
00:23:06,600 --> 00:23:09,160
Speaker 6: of you, is like, if you think about the work

463
00:23:09,200 --> 00:23:11,800
Speaker 6: you do here and the things that are facing Alaska

464
00:23:11,880 --> 00:23:15,200
Speaker 6: with all the just the economy, the changes in policy,

465
00:23:15,560 --> 00:23:19,119
Speaker 6: interest rates, et cetera, what's worrying you right now?

466
00:23:21,080 --> 00:23:27,760
Speaker 7: Well, worries me is financing our project billion dollar project, right,

467
00:23:27,800 --> 00:23:30,920
Speaker 7: and we have some state and federal funds. The rest

468
00:23:30,920 --> 00:23:35,080
Speaker 7: of it is slated for local revenue bonds.

469
00:23:35,280 --> 00:23:37,720
Speaker 6: Okay, now do you think does pass.

470
00:23:38,320 --> 00:23:42,359
Speaker 7: They've given us authority to issue those. But the question

471
00:23:42,480 --> 00:23:47,000
Speaker 7: is how much can you push into the market once

472
00:23:47,240 --> 00:23:49,959
Speaker 7: and it puts our debt load front and whatever it

473
00:23:50,000 --> 00:23:53,840
Speaker 7: is fifty million, we have now up to billions from

474
00:23:53,880 --> 00:23:54,560
Speaker 7: one point one.

475
00:23:54,720 --> 00:23:56,800
Speaker 8: We have authority for one point on it.

476
00:23:56,800 --> 00:23:59,200
Speaker 7: It greatly increases our debtloads. So that's the biggest.

477
00:23:59,440 --> 00:24:03,560
Speaker 3: So our goal is one third one third, one third,

478
00:24:03,640 --> 00:24:06,720
Speaker 3: one third federal money, one third state money, one third

479
00:24:06,760 --> 00:24:10,400
Speaker 3: local money. For our next DOC, it's going to be

480
00:24:10,600 --> 00:24:14,359
Speaker 3: roughly nine hundred million dollars right at this point, we

481
00:24:14,520 --> 00:24:19,040
Speaker 3: have ninety percent is going to be local, five percent state,

482
00:24:19,280 --> 00:24:24,240
Speaker 3: five percent federal. If we go forward to finance the

483
00:24:24,400 --> 00:24:29,360
Speaker 3: ninety percent, that's the local share after forty years, two

484
00:24:29,359 --> 00:24:35,080
Speaker 3: point two two point two eight billion dollars is what

485
00:24:35,080 --> 00:24:37,479
Speaker 3: we're going to pay back for nine hundred billion. So

486
00:24:37,640 --> 00:24:41,119
Speaker 3: you know, with that, the cost of financing it's going

487
00:24:41,200 --> 00:24:43,080
Speaker 3: to be huge. And what is that going to do

488
00:24:43,520 --> 00:24:46,399
Speaker 3: to overall cargo range? Remember, one of our things is

489
00:24:46,480 --> 00:24:51,680
Speaker 3: We're trying to maintain a cost effective cargo system, and

490
00:24:52,119 --> 00:24:53,399
Speaker 3: boyd when do we get crushed?

491
00:24:54,160 --> 00:24:57,960
Speaker 4: Speaking of effective cargo systems, a huge chunk of Alaska's

492
00:24:58,000 --> 00:25:01,040
Speaker 4: imports go through the port, as we've been discussing, but

493
00:25:01,320 --> 00:25:03,960
Speaker 4: it is not the only logistics hub in town.

494
00:25:05,560 --> 00:25:10,600
Speaker 7: Right.

495
00:25:10,760 --> 00:25:12,880
Speaker 1: To get a complete picture, we've got to check out

496
00:25:12,880 --> 00:25:15,240
Speaker 1: the airport, which is exactly where Mary is heading.

497
00:25:15,280 --> 00:25:15,560
Speaker 8: Next.

498
00:25:16,480 --> 00:25:18,919
Speaker 6: I'm sort of plane like that cost three million.

499
00:25:19,160 --> 00:25:22,240
Speaker 3: Yeah, that's you lightly used.

500
00:25:25,080 --> 00:25:26,800
Speaker 9: We have we have a we have a handful of those.

501
00:25:26,880 --> 00:25:29,720
Speaker 11: Yuh what are the planes to go out?

502
00:25:30,720 --> 00:25:35,520
Speaker 8: I'm Susan Alton, the Alaska International air of course system controller,

503
00:25:36,200 --> 00:25:38,840
Speaker 8: and we're all glad to have you here today to

504
00:25:39,000 --> 00:25:44,080
Speaker 8: show off our system. Uh so I'll go ahead and

505
00:25:44,320 --> 00:25:48,399
Speaker 8: get Okay, So what is the Alaska International Airport System

506
00:25:48,480 --> 00:25:51,720
Speaker 8: also known as ai a S. It is made up

507
00:25:51,760 --> 00:25:56,320
Speaker 8: of Ted Stevens Anchorage International Airport, which is the largest

508
00:25:56,320 --> 00:25:59,760
Speaker 8: passenger airport in the state of Alaska. It's also the

509
00:25:59,800 --> 00:26:03,000
Speaker 8: four our busiest cargo airport in the world and the

510
00:26:03,080 --> 00:26:07,399
Speaker 8: second busiest in the United States. Anchorage is impact is

511
00:26:07,440 --> 00:26:11,120
Speaker 8: the largest airport in Alaska. Passenger activity for fiscal year

512
00:26:11,160 --> 00:26:14,520
Speaker 8: twenty five and that's four point excuse me, five point

513
00:26:14,680 --> 00:26:19,720
Speaker 8: four million passengers served air cargo for twenty twenty five.

514
00:26:20,160 --> 00:26:24,760
Speaker 8: We had three point seven million tons for twenty twenty five.

515
00:26:25,400 --> 00:26:27,639
Speaker 8: And again, as I said, we're number two in the

516
00:26:27,760 --> 00:26:30,919
Speaker 8: USA and number four in the world with regards to cargo.

517
00:26:32,280 --> 00:26:35,719
Speaker 8: We support one in seven jobs in the Anchorage area

518
00:26:36,080 --> 00:26:40,080
Speaker 8: and provide one point eight billion in annual economic impact

519
00:26:40,160 --> 00:26:43,199
Speaker 8: to the state. And you can see on the screen

520
00:26:43,320 --> 00:26:47,840
Speaker 8: about the direct jobs and wages impact versus the indirect

521
00:26:47,840 --> 00:26:53,760
Speaker 8: and induced jobs and wages. So we're pretty significant economic

522
00:26:53,840 --> 00:26:55,960
Speaker 8: mood for the state of Alaska.

523
00:26:56,040 --> 00:26:58,919
Speaker 1: Air Transport is huge for Alaska, and the Anchorage Airport

524
00:26:58,960 --> 00:27:01,440
Speaker 1: basically acts like a truck stop for the whole state

525
00:27:01,480 --> 00:27:05,240
Speaker 1: and really global trade. Fully loaded cargo planes moving stuff

526
00:27:05,240 --> 00:27:08,160
Speaker 1: from Asia, the Mid East, parts of Europe will stop

527
00:27:08,200 --> 00:27:10,000
Speaker 1: here to refuel on their way to the rest of

528
00:27:10,000 --> 00:27:13,439
Speaker 1: North America. And for Alaskans it's the main depot for

529
00:27:13,520 --> 00:27:15,800
Speaker 1: most of the goods they order from elsewhere, which are

530
00:27:15,840 --> 00:27:18,920
Speaker 1: sorted in the huge FedEx and UPS hangars before being

531
00:27:18,960 --> 00:27:20,120
Speaker 1: distributed throughout the state.

532
00:27:20,520 --> 00:27:23,360
Speaker 4: It's also a commuter hub. Many of the oil workers

533
00:27:23,359 --> 00:27:25,560
Speaker 4: on the North Slope work in two week on two

534
00:27:25,600 --> 00:27:28,359
Speaker 4: week off shifts, they catch a small plane up to

535
00:27:28,440 --> 00:27:30,960
Speaker 4: the fields where they live in company housing while on

536
00:27:31,040 --> 00:27:33,359
Speaker 4: the job, and then they return to their families and

537
00:27:33,440 --> 00:27:35,040
Speaker 4: hometown for the rest of the month.

538
00:27:36,640 --> 00:27:39,000
Speaker 10: It's effectively use that as a suburb.

539
00:27:42,119 --> 00:27:45,720
Speaker 12: Yeah, so this is the iconical Philips you come from

540
00:27:45,760 --> 00:27:48,600
Speaker 12: the airplane that's going up too. So if you're a slopeworker,

541
00:27:52,200 --> 00:27:54,879
Speaker 12: I have a nice Alaska lifestyle over there, pop on

542
00:27:54,920 --> 00:27:59,320
Speaker 12: a grand at the door, you walk over the next terminal,

543
00:27:59,520 --> 00:27:59,960
Speaker 12: get on your.

544
00:28:00,640 --> 00:28:04,320
Speaker 4: Like the rest of the country, housing is a major issue,

545
00:28:04,640 --> 00:28:08,320
Speaker 4: even in a state with say it with me, Joe twice,

546
00:28:08,400 --> 00:28:09,960
Speaker 4: the land of Texas.

547
00:28:10,320 --> 00:28:13,400
Speaker 1: Yeah, as we've seen over and over, Alaska faces all

548
00:28:13,480 --> 00:28:15,560
Speaker 1: the issues that the rest of the US does, only

549
00:28:15,600 --> 00:28:17,760
Speaker 1: at least right now more acutely.

550
00:28:17,520 --> 00:28:19,840
Speaker 6: There's a variety of other things going on. And if

551
00:28:19,840 --> 00:28:23,480
Speaker 6: you're already your infrastructure is already a little vulnerable, then

552
00:28:23,240 --> 00:28:26,280
Speaker 6: you can imagine any shock we get into the United States.

553
00:28:26,320 --> 00:28:28,680
Speaker 6: Just in that, I mean, sorry to the United States.

554
00:28:28,800 --> 00:28:29,800
Speaker 6: You get it amplified.

555
00:28:30,000 --> 00:28:31,680
Speaker 3: Yeah, no, that's absolutely true.

556
00:28:31,680 --> 00:28:35,320
Speaker 6: And she's treating indicator which helps me make good decisions.

557
00:28:35,359 --> 00:28:36,280
Speaker 6: When I talk to all of you.

558
00:28:41,000 --> 00:28:43,880
Speaker 1: Mary is going straight from the airport to the airport,

559
00:28:43,920 --> 00:28:46,080
Speaker 1: I guess she's flying to the lower forty eight. And

560
00:28:46,080 --> 00:28:48,560
Speaker 1: there's obviously a lot of possible takeaways from the trip.

561
00:28:49,080 --> 00:28:52,120
Speaker 6: The cost structure of Alaska was something I think we

562
00:28:52,280 --> 00:28:54,840
Speaker 6: learned the most about today, just why are the prices

563
00:28:54,880 --> 00:28:57,680
Speaker 6: so much higher? And where would you ever try to

564
00:28:57,720 --> 00:29:00,320
Speaker 6: mitigate that? And of course the things that are going

565
00:29:00,320 --> 00:29:04,719
Speaker 6: on like inflation or just changes in how goods are

566
00:29:04,760 --> 00:29:08,480
Speaker 6: shipped or supply chain challenges, they're just magnified in Alaska,

567
00:29:08,640 --> 00:29:11,440
Speaker 6: and I think we also learned, you know, I learned

568
00:29:11,440 --> 00:29:14,480
Speaker 6: that they happen here first. It really is sort of

569
00:29:14,480 --> 00:29:16,920
Speaker 6: this canary in the coal mine almost that when you

570
00:29:16,960 --> 00:29:19,280
Speaker 6: see it here, you know it's coming elsewhere. It's going

571
00:29:19,320 --> 00:29:21,680
Speaker 6: to be lower in all likelihood because there's other ways

572
00:29:21,720 --> 00:29:24,280
Speaker 6: to ensure yourselves, but you're going to see it.

573
00:29:24,760 --> 00:29:27,280
Speaker 4: We don't know exactly what was discussed at the FED

574
00:29:27,320 --> 00:29:30,640
Speaker 4: September meeting, or at least we don't know until the

575
00:29:30,680 --> 00:29:34,640
Speaker 4: transcript is published in like twenty thirty, but I think

576
00:29:34,680 --> 00:29:37,120
Speaker 4: you can get a good sense of what a trip

577
00:29:37,240 --> 00:29:40,760
Speaker 4: like this actually adds to the conversation. When FED governors

578
00:29:40,800 --> 00:29:43,120
Speaker 4: are all sitting around the table trying to figure out

579
00:29:43,160 --> 00:29:43,960
Speaker 4: what to do next.

580
00:29:44,520 --> 00:29:46,880
Speaker 6: So one of the things that is challenging right now

581
00:29:47,240 --> 00:29:49,320
Speaker 6: was challenging back in the days where we're trying to

582
00:29:49,360 --> 00:29:52,680
Speaker 6: fight high inflation, and it's definitely challenging today when you're

583
00:29:52,680 --> 00:29:55,880
Speaker 6: trying to figure out the real impact of tariffs not

584
00:29:55,920 --> 00:30:01,840
Speaker 6: only on growth but on inflation. As just wanting unpacking

585
00:30:01,880 --> 00:30:05,200
Speaker 6: what's happening in Alaska and knowing at whatever point how

586
00:30:05,240 --> 00:30:07,840
Speaker 6: long this is going to take. Because of the non

587
00:30:07,880 --> 00:30:11,560
Speaker 6: fungibility of steel, the interoperability of some of the supply

588
00:30:11,680 --> 00:30:15,480
Speaker 6: chain networks, all of those things give me insights that

589
00:30:15,520 --> 00:30:17,720
Speaker 6: I can then take back to the meeting, and then

590
00:30:17,760 --> 00:30:20,320
Speaker 6: it's not just us exchanging forecast. I think they're going

591
00:30:20,400 --> 00:30:21,720
Speaker 6: to be like this long. I think they're going to

592
00:30:21,760 --> 00:30:25,760
Speaker 6: take this long. It provides evidence underlying evidence that you

593
00:30:25,800 --> 00:30:29,800
Speaker 6: can't find in your statistics because the statistics the statistics,

594
00:30:29,840 --> 00:30:32,560
Speaker 6: we just don't know. All we're doing is projecting, But

595
00:30:32,640 --> 00:30:35,680
Speaker 6: now we have our projections filled out by data and information,

596
00:30:36,040 --> 00:30:38,400
Speaker 6: and that makes a huge difference when you're trying to

597
00:30:38,400 --> 00:30:46,200
Speaker 6: make good policy.

598
00:30:51,720 --> 00:30:54,480
Speaker 1: That's it for our special Alaska episode. We hope you

599
00:30:54,560 --> 00:30:58,680
Speaker 1: enjoyed tagging along with us and Mary on the Anchorage expedition.

600
00:30:58,720 --> 00:31:00,000
Speaker 4: Joe, what stuck out to you?

601
00:31:00,920 --> 00:31:04,440
Speaker 1: So many things stuck out to me from that trip,

602
00:31:04,640 --> 00:31:08,120
Speaker 1: you know, like being in Alaska, it really did feel

603
00:31:08,160 --> 00:31:10,000
Speaker 1: like the end of the world, didn't it, Like the

604
00:31:10,120 --> 00:31:10,800
Speaker 1: edge of the Empire.

605
00:31:11,000 --> 00:31:12,840
Speaker 4: Yeah, it definitely felt frontier.

606
00:31:13,040 --> 00:31:16,040
Speaker 1: Like for sure, I've been in rural areas before, even

607
00:31:16,080 --> 00:31:19,240
Speaker 1: more rural obviously than an urban area like Anchorage, but

608
00:31:19,240 --> 00:31:22,200
Speaker 1: I've never just felt distant like I did in Alaska,

609
00:31:22,240 --> 00:31:25,240
Speaker 1: and so it's very easy to understand why it's a

610
00:31:25,240 --> 00:31:28,760
Speaker 1: state permanently in a state of sort of supply chain stress.

611
00:31:28,920 --> 00:31:31,160
Speaker 4: Yeah, that's what really stood out to me as well,

612
00:31:31,240 --> 00:31:33,960
Speaker 4: because when you go to a place like Anchorage, I

613
00:31:34,000 --> 00:31:37,800
Speaker 4: mean there are a lot of the same restaurants and

614
00:31:37,920 --> 00:31:40,400
Speaker 4: chain stores that you would see in any other place

615
00:31:40,440 --> 00:31:44,040
Speaker 4: in America. The difference is all that stuff has to

616
00:31:44,080 --> 00:31:46,960
Speaker 4: be transported thousands and thousands of miles to get there.

617
00:31:47,440 --> 00:31:47,680
Speaker 6: Yeah.

618
00:31:47,800 --> 00:31:51,680
Speaker 1: No, it's a constant strain, just extraordinary. You know, I

619
00:31:51,760 --> 00:31:55,160
Speaker 1: knew these things about how far flong everything was, but

620
00:31:55,200 --> 00:31:58,000
Speaker 1: then say, going to the airport and seeing how small

621
00:31:58,040 --> 00:32:01,440
Speaker 1: planes serve the just sort of worker commuter system was

622
00:32:01,440 --> 00:32:03,920
Speaker 1: really eye opening. Or just the sheer number of people

623
00:32:03,920 --> 00:32:08,440
Speaker 1: who own planes themselves. Yeah, like they have these pontoon

624
00:32:08,480 --> 00:32:11,080
Speaker 1: planes in the water that in another state would be

625
00:32:11,200 --> 00:32:13,800
Speaker 1: how people would have their boats in the marina. Except Alaska.

626
00:32:13,880 --> 00:32:17,960
Speaker 1: Its plans like, it's just it's permanently it's permanently stretched.

627
00:32:18,320 --> 00:32:21,280
Speaker 4: Do you think we could go to Hawaii next? That's

628
00:32:21,280 --> 00:32:22,640
Speaker 4: in the twelfth district.

629
00:32:22,320 --> 00:32:23,560
Speaker 10: Right, Let's do it.

630
00:32:23,600 --> 00:32:24,000
Speaker 7: I'm down.

631
00:32:24,160 --> 00:32:24,920
Speaker 4: Shall we leave it there?

632
00:32:25,000 --> 00:32:25,760
Speaker 1: Let's leave it there.

633
00:32:26,040 --> 00:32:28,600
Speaker 4: This has been another episode of the All Thoughts podcast.

634
00:32:28,720 --> 00:32:32,160
Speaker 4: I'm Tracy Alloway. You can follow me at Tracy Alloway.

635
00:32:31,880 --> 00:32:34,840
Speaker 1: And I'm Joe Wisenthal. You can follow me at the Stalwart.

636
00:32:35,040 --> 00:32:37,040
Speaker 1: Thank you to Mary Daily and everyone at the San

637
00:32:37,040 --> 00:32:40,120
Speaker 1: Francisco FED, including Jen Chamberlain, for letting us come along

638
00:32:40,120 --> 00:32:42,600
Speaker 1: on their fact finding journey. Thank you also to the

639
00:32:42,600 --> 00:32:46,160
Speaker 1: Port of Alaska, the Alaska International Airport System, and Northern

640
00:32:46,200 --> 00:32:48,640
Speaker 1: Solutions for the tour of their facilities. Thank you to

641
00:32:48,720 --> 00:32:52,240
Speaker 1: Ashley Ebnett of the Anchorage Economic Development Corporation, And a

642
00:32:52,240 --> 00:32:54,440
Speaker 1: final thank you to all the Alaskans who took the

643
00:32:54,480 --> 00:32:56,800
Speaker 1: time to talk to us about their state. Everyone was

644
00:32:56,800 --> 00:32:59,719
Speaker 1: so friendly and don't forget scrappy. You can follow our

645
00:32:59,720 --> 00:33:03,160
Speaker 1: Purdue users Carmen Rodriguez at Carmen armand Dashel Bennett at

646
00:33:03,240 --> 00:33:06,600
Speaker 1: dashbot and kill Brooks at Kilbrooks. From our odd Loots content,

647
00:33:06,640 --> 00:33:08,880
Speaker 1: go to Bloomberg dot com slash odd Lots. We have

648
00:33:08,880 --> 00:33:11,560
Speaker 1: a daily newsletter and all of our episodes, and you

649
00:33:11,560 --> 00:33:13,680
Speaker 1: can chat about all of these topics twenty four seven

650
00:33:13,760 --> 00:33:16,920
Speaker 1: in our discord discord dot gg slash.

651
00:33:16,560 --> 00:33:19,440
Speaker 4: Od lots And if you enjoy Oudlots, if you like

652
00:33:19,520 --> 00:33:21,880
Speaker 4: it when we go to far flung places, then please

653
00:33:21,960 --> 00:33:25,000
Speaker 4: leave us a positive review on your favorite podcast platform.

654
00:33:25,240 --> 00:33:28,200
Speaker 4: And remember, if you are a Bloomberg subscriber, you can

655
00:33:28,240 --> 00:33:31,600
Speaker 4: listen to all of our episodes absolutely ad free. All

656
00:33:31,640 --> 00:33:33,600
Speaker 4: you need to do is find the Bloomberg channel on

657
00:33:33,680 --> 00:33:37,400
Speaker 4: Apple Podcasts and follow the instructions there. Thanks for listening,

658
00:34:01,800 --> 00:34:03,000
Speaker 4: Stood in a