1 00:00:02,640 --> 00:00:05,320 Speaker 1: Welcome to the Bloomberg Penl podcast. I'm Paul swing you. 2 00:00:05,360 --> 00:00:07,680 Speaker 1: Along with my co host Lisa Brahma Wicks. Each day 3 00:00:07,720 --> 00:00:10,240 Speaker 1: we bring you the most noteworthy and useful interviews for 4 00:00:10,280 --> 00:00:12,520 Speaker 1: you and your money. Whether at the grocery store or 5 00:00:12,560 --> 00:00:15,480 Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple 6 00:00:15,520 --> 00:00:17,959 Speaker 1: podcast or wherever you listen to podcasts, as well as 7 00:00:17,960 --> 00:00:22,960 Speaker 1: at Bloomberg dot com. Well. On April two, a technology 8 00:00:23,000 --> 00:00:27,360 Speaker 1: company plans to go live with a space based aircraft 9 00:00:27,440 --> 00:00:29,960 Speaker 1: surveillance system which will track plans globally in real time 10 00:00:30,000 --> 00:00:33,000 Speaker 1: for the first time ever. Now plans are tracked by radar, 11 00:00:33,080 --> 00:00:36,320 Speaker 1: but sev of the planet is uncovered by radar, which 12 00:00:36,320 --> 00:00:39,199 Speaker 1: is especially problematic over oceans. I did not know that 13 00:00:39,960 --> 00:00:42,320 Speaker 1: joining us here to walk us through this new technology 14 00:00:42,400 --> 00:00:46,280 Speaker 1: is Don Toma, CEO of Arion, based on McClean Virginia. Don, 15 00:00:46,400 --> 00:00:50,479 Speaker 1: this sounds like a game changer technology to me, is it. 16 00:00:51,840 --> 00:00:54,040 Speaker 1: That's great? That's right, Paul, thanks for having having me 17 00:00:54,080 --> 00:00:57,480 Speaker 1: on the program. Now this is really being hailed as 18 00:00:57,560 --> 00:01:02,319 Speaker 1: a major technological advancement in aviation. As you mentioned, your 19 00:01:03,400 --> 00:01:06,479 Speaker 1: of the world is not tracked by any any means 20 00:01:06,560 --> 00:01:08,920 Speaker 1: at this point in real time and meaning there's no 21 00:01:08,959 --> 00:01:13,399 Speaker 1: surveillance for air traffic controllers. And you know, typically the 22 00:01:13,440 --> 00:01:16,759 Speaker 1: world has been using radar technology that has been developed 23 00:01:17,080 --> 00:01:20,000 Speaker 1: back in the nineteen thirties and forties as the primary 24 00:01:20,040 --> 00:01:24,280 Speaker 1: means of of tracking aircraft for air traffic control. But 25 00:01:24,800 --> 00:01:28,679 Speaker 1: the world's air traffic control organizations are in a program 26 00:01:28,720 --> 00:01:31,600 Speaker 1: to upgrade that technology to a g P, a GPS 27 00:01:31,680 --> 00:01:35,000 Speaker 1: based system for tracking the aircraft. And what Arean is 28 00:01:35,000 --> 00:01:38,319 Speaker 1: doing is bringing that technology to the entire world. Currently 29 00:01:38,319 --> 00:01:41,800 Speaker 1: it's limited to some certain regions like the continental US, 30 00:01:42,200 --> 00:01:45,679 Speaker 1: your parts of Europe, parts of Australia, etcetera. But you know, 31 00:01:45,880 --> 00:01:48,480 Speaker 1: starting next week will begin providing this service to air 32 00:01:48,520 --> 00:01:52,080 Speaker 1: traffic controllers all over the world immediately. So, John, when 33 00:01:52,120 --> 00:01:54,560 Speaker 1: I first started reading about this, my my initial question 34 00:01:54,720 --> 00:01:58,360 Speaker 1: was what took so long? Because we've had space satellites 35 00:01:58,360 --> 00:02:00,840 Speaker 1: for a long time that track lot of things, So 36 00:02:00,920 --> 00:02:04,640 Speaker 1: why shouldn't we have some sort of all encompassing surveillance system. 37 00:02:04,640 --> 00:02:07,120 Speaker 1: And then it struck me maybe this is a security 38 00:02:07,120 --> 00:02:10,600 Speaker 1: issue and international issue, and I'm wondering what that challenge 39 00:02:10,720 --> 00:02:13,560 Speaker 1: was like getting this up and running in order to 40 00:02:13,600 --> 00:02:16,519 Speaker 1: get clearance to surveill areas that were not within the 41 00:02:16,600 --> 00:02:19,720 Speaker 1: United States. Yeah, that's a that's a good question. As 42 00:02:19,760 --> 00:02:22,160 Speaker 1: I mentioned, part of this part of the reason why 43 00:02:22,160 --> 00:02:25,960 Speaker 1: this is possible now is first that the world's air 44 00:02:26,000 --> 00:02:28,560 Speaker 1: traffic control organizations are making this upgrade. You may have 45 00:02:28,639 --> 00:02:31,480 Speaker 1: heard next gen for the next gen program, the next 46 00:02:31,520 --> 00:02:35,200 Speaker 1: Generation air traffic Control program within the US UM, but 47 00:02:35,400 --> 00:02:39,320 Speaker 1: the US, Europe, Australia, Singapore, a few other countries have 48 00:02:39,480 --> 00:02:44,560 Speaker 1: mandated that all aircraft by have on board a transponder 49 00:02:44,600 --> 00:02:48,000 Speaker 1: that will broadcast out that GPS information from the aircraft 50 00:02:48,280 --> 00:02:51,680 Speaker 1: at a very frequent, very precise level. So first you 51 00:02:51,720 --> 00:02:54,239 Speaker 1: had to have all the aircraft equip with this new 52 00:02:54,280 --> 00:02:56,960 Speaker 1: technology to make it possible. But then you you have 53 00:02:57,040 --> 00:03:00,680 Speaker 1: the limitations of where you can put towers to receive 54 00:03:00,760 --> 00:03:03,760 Speaker 1: that information. So, as I mentioned, the US has deployed 55 00:03:03,800 --> 00:03:07,679 Speaker 1: six thirty five towers, Australia's air space has covered. Other 56 00:03:07,720 --> 00:03:10,680 Speaker 1: countries have put this this technology in, but it really 57 00:03:10,720 --> 00:03:13,600 Speaker 1: limits the access to it to roughly thirty percent of 58 00:03:13,639 --> 00:03:16,079 Speaker 1: the world that you know that has you know, this 59 00:03:16,120 --> 00:03:19,720 Speaker 1: type of ground based technology. So really the the innovation 60 00:03:19,840 --> 00:03:23,080 Speaker 1: came due to the fact that not only were the 61 00:03:23,080 --> 00:03:25,720 Speaker 1: aircraft craft being equipped but a ridium. You know, the 62 00:03:25,760 --> 00:03:29,320 Speaker 1: Satellite Communications Company was in the process of launching their 63 00:03:29,360 --> 00:03:34,160 Speaker 1: next generation satellite network. So part of that innovation came 64 00:03:34,240 --> 00:03:36,480 Speaker 1: when we said, well why don't we when I would 65 00:03:36,560 --> 00:03:38,840 Speaker 1: used to be at a ridium when we were looking 66 00:03:38,880 --> 00:03:41,640 Speaker 1: at the plans for the next generation, and we said, 67 00:03:41,640 --> 00:03:45,720 Speaker 1: why don't we use this global satellite based infrastructure two 68 00:03:46,000 --> 00:03:48,680 Speaker 1: that sees every place on Earth and has connections that 69 00:03:48,880 --> 00:03:52,200 Speaker 1: gets that information back in real time to put these 70 00:03:52,200 --> 00:03:54,880 Speaker 1: A D s B or these these receivers on board 71 00:03:55,040 --> 00:03:58,280 Speaker 1: the satellites to receive the information being transmitted by the aircraft. 72 00:03:58,360 --> 00:04:02,040 Speaker 1: So we put the company together, We raised the investment 73 00:04:02,120 --> 00:04:05,080 Speaker 1: with our partners at nav Canada and the air traffic 74 00:04:05,120 --> 00:04:10,040 Speaker 1: control organizations of Italy, Ireland, Denmark and the UK formed 75 00:04:10,040 --> 00:04:13,720 Speaker 1: the company and seven years later we have completed the 76 00:04:13,800 --> 00:04:15,680 Speaker 1: launch of that system and are now ready to go 77 00:04:15,800 --> 00:04:18,480 Speaker 1: operational live with it. So it's a lot of different 78 00:04:18,480 --> 00:04:21,520 Speaker 1: components that really drove the you know, the implementation of 79 00:04:21,600 --> 00:04:25,000 Speaker 1: this capability. So come April two, talk to us about 80 00:04:25,040 --> 00:04:26,800 Speaker 1: the adoption. Here do you have to go sell it 81 00:04:26,880 --> 00:04:29,719 Speaker 1: kind of country by country? How do you get this 82 00:04:29,760 --> 00:04:32,440 Speaker 1: technology out into the marketplace? Well, it's a it's a 83 00:04:32,440 --> 00:04:36,000 Speaker 1: good question, Paul. Then the issue here is that this 84 00:04:36,040 --> 00:04:39,160 Speaker 1: is such a game changer, you know, in in you know, 85 00:04:39,279 --> 00:04:41,919 Speaker 1: in the aviation that countries have been working with us 86 00:04:42,000 --> 00:04:44,920 Speaker 1: for a very long time. So currently, on April two, 87 00:04:45,040 --> 00:04:48,080 Speaker 1: will go live with the Canadian air traffic control organization 88 00:04:48,160 --> 00:04:52,680 Speaker 1: nav Canada and the UK air Traffic control organization called NETS, 89 00:04:53,200 --> 00:04:56,040 Speaker 1: and we'll begin using this service in northern Canada and 90 00:04:56,120 --> 00:04:58,839 Speaker 1: in the North Atlantic. Now, the North Atlantic is a 91 00:04:58,960 --> 00:05:02,400 Speaker 1: very busy set the air space flights a day, you know, 92 00:05:02,440 --> 00:05:04,680 Speaker 1: it's it's running out of capacity because there's so much 93 00:05:04,680 --> 00:05:07,560 Speaker 1: traffic going back and forth between the Europe, Europe and 94 00:05:07,600 --> 00:05:10,080 Speaker 1: North America, you know, and this is an innovation that 95 00:05:10,120 --> 00:05:12,920 Speaker 1: not only improves the safety of air travel, but also 96 00:05:12,920 --> 00:05:16,440 Speaker 1: allows them to add additional flight paths for aircraft into 97 00:05:16,440 --> 00:05:18,840 Speaker 1: that that airspace. So we'll go live with those two 98 00:05:18,920 --> 00:05:21,120 Speaker 1: right away, but right behind them, we have nine other 99 00:05:21,560 --> 00:05:25,520 Speaker 1: air traffic control organizations representing twenty eight countries around the 100 00:05:25,520 --> 00:05:29,479 Speaker 1: world that will be are currently receiving the data, doing 101 00:05:29,520 --> 00:05:32,560 Speaker 1: their own test and valuation validation of the service, and 102 00:05:32,600 --> 00:05:37,400 Speaker 1: we'll begin operationally using it throughout just in thirty seconds. 103 00:05:37,400 --> 00:05:40,560 Speaker 1: How do you make money. Very very easy to think 104 00:05:40,560 --> 00:05:42,800 Speaker 1: of us as a subscription service. So instead of an 105 00:05:42,800 --> 00:05:47,560 Speaker 1: air traffic control organization deploying your radars or ground based infrastructure, 106 00:05:47,600 --> 00:05:50,000 Speaker 1: we basically collect the data and provided to them as 107 00:05:50,040 --> 00:05:52,840 Speaker 1: a subscription service, so they pay us a fee for 108 00:05:53,040 --> 00:05:57,760 Speaker 1: providing them the surveillance data for their airspace. Really interesting, 109 00:05:58,040 --> 00:05:59,640 Speaker 1: Don Thomas, thank you so much for being with us. 110 00:05:59,680 --> 00:06:02,960 Speaker 1: Don Tom chief executive officer of Arian, which is based 111 00:06:03,000 --> 00:06:09,719 Speaker 1: in McLean, Virginia, offering space based aircraft surveillance tracking planes globally, 112 00:06:09,760 --> 00:06:12,560 Speaker 1: which to me, honestly my first impression. Again, I mean, 113 00:06:12,560 --> 00:06:15,359 Speaker 1: given how many satellites are up there, it's interesting that 114 00:06:15,440 --> 00:06:28,360 Speaker 1: this is the first of its kind. There has been 115 00:06:28,400 --> 00:06:32,680 Speaker 1: a big discussion about how the migration from rural areas 116 00:06:32,720 --> 00:06:36,640 Speaker 1: to urban areas will likely continue in the years to come. 117 00:06:37,000 --> 00:06:39,440 Speaker 1: The question is number one, will it? And number two, 118 00:06:39,640 --> 00:06:42,120 Speaker 1: how does that affect your investments both in real estate 119 00:06:42,160 --> 00:06:45,039 Speaker 1: and beyond. Joining us now, Melissa Reagan, head of research 120 00:06:45,120 --> 00:06:48,760 Speaker 1: for New Vine Real Estate, overseeing a hundred billion dollars 121 00:06:48,760 --> 00:06:50,840 Speaker 1: of assets in New York, Joining us here in our 122 00:06:50,839 --> 00:06:53,560 Speaker 1: Bloomberg Interactive Broker Studios. Melissa, thank you so much for 123 00:06:53,600 --> 00:06:56,400 Speaker 1: being with us, Let's just start with this premise that 124 00:06:56,480 --> 00:07:00,280 Speaker 1: there will be increased urbanization where you do see people 125 00:07:00,320 --> 00:07:04,479 Speaker 1: moving from urban and suburban areas into cities. How much 126 00:07:04,480 --> 00:07:07,760 Speaker 1: do you think that will continue? Yeah? Sure, thinks um 127 00:07:07,800 --> 00:07:10,320 Speaker 1: you know, listen, we believe it will continue. And this 128 00:07:10,400 --> 00:07:11,880 Speaker 1: is not just in the next couple of years, but 129 00:07:11,920 --> 00:07:15,160 Speaker 1: really over the coming decades. Uh and and why so 130 00:07:15,280 --> 00:07:19,680 Speaker 1: think about what cities offer. They offer an economic based jobs. 131 00:07:19,840 --> 00:07:22,520 Speaker 1: It's where the vibrancy of these cities, it's where people 132 00:07:22,560 --> 00:07:25,800 Speaker 1: want to live. It's where when you think about what's 133 00:07:25,800 --> 00:07:28,320 Speaker 1: a what's a really growing area right now? Technology right, well, 134 00:07:28,360 --> 00:07:31,440 Speaker 1: we know that that is actually cluster based. Right so 135 00:07:31,520 --> 00:07:33,440 Speaker 1: once you're not in your this technology coming that techno, 136 00:07:33,520 --> 00:07:35,640 Speaker 1: you're like, y'all want to cluster together. And that's happened. 137 00:07:35,640 --> 00:07:37,880 Speaker 1: That happens in cities. And so we think this is 138 00:07:37,920 --> 00:07:41,680 Speaker 1: a decades long trend that will continue. Well, one of 139 00:07:41,720 --> 00:07:43,800 Speaker 1: the things that I think is a concern for some 140 00:07:43,840 --> 00:07:47,840 Speaker 1: people is just infrastructure through cities today. Some of the 141 00:07:47,920 --> 00:07:51,520 Speaker 1: largest cities that are you know, maybe drawing populations, do 142 00:07:51,600 --> 00:07:55,520 Speaker 1: they have the infrastructure to support it? Uh? Yes, and no, 143 00:07:55,920 --> 00:07:58,400 Speaker 1: so I would say, but also with that as an opportunity. 144 00:07:58,440 --> 00:08:00,000 Speaker 1: So when you think about a place like New York 145 00:08:00,120 --> 00:08:02,400 Speaker 1: and you think about its mass transit, one of the 146 00:08:02,400 --> 00:08:05,239 Speaker 1: best probably mess transit systems across the entire world in fact. 147 00:08:05,400 --> 00:08:10,400 Speaker 1: But but it's from a but but but you missed 148 00:08:10,400 --> 00:08:13,200 Speaker 1: the butt. But it's but it's aging. But it's aging, 149 00:08:13,360 --> 00:08:18,080 Speaker 1: and therein is the opportunity kind and therein lies the 150 00:08:18,120 --> 00:08:20,000 Speaker 1: opportunity right when you think about how to how to 151 00:08:20,040 --> 00:08:25,120 Speaker 1: invest around infrastructure, municipal financing and things like that. So, um, 152 00:08:24,920 --> 00:08:27,240 Speaker 1: I would say there's there's yes and no, and there's 153 00:08:27,240 --> 00:08:29,600 Speaker 1: opportunities within that. I will just say that I was 154 00:08:29,640 --> 00:08:31,480 Speaker 1: on the train the other day and it was stopped 155 00:08:31,560 --> 00:08:34,319 Speaker 1: and my nine year old son called the m t 156 00:08:34,480 --> 00:08:38,760 Speaker 1: A to complain, saying that it was unacceptable. Because yes, anyway, 157 00:08:38,800 --> 00:08:41,320 Speaker 1: moving right along, I will say a lot of the 158 00:08:41,679 --> 00:08:45,400 Speaker 1: investing strategy also depends on real estate valuations. And there's 159 00:08:45,440 --> 00:08:50,360 Speaker 1: a question especially is the affordability uh question rises it's 160 00:08:50,360 --> 00:08:53,800 Speaker 1: getting harder for people to buy homes in cities. How 161 00:08:53,800 --> 00:08:57,800 Speaker 1: does that affect your thesis here? Actually pretty well? Uh 162 00:08:57,840 --> 00:09:00,160 Speaker 1: so from a from a commercial real estate person back 163 00:09:00,200 --> 00:09:02,160 Speaker 1: to think about it, I mean, we're not in the home. 164 00:09:02,240 --> 00:09:04,800 Speaker 1: We're not in buying homes, We're buying apartment buildings, right, 165 00:09:04,800 --> 00:09:07,320 Speaker 1: and so the demand for apartments and we've seen this, 166 00:09:07,360 --> 00:09:10,559 Speaker 1: I mean, vacancy rates for apartments are your twenty year lows. 167 00:09:10,600 --> 00:09:13,080 Speaker 1: Why is that? Because home prices are are are high 168 00:09:13,160 --> 00:09:15,520 Speaker 1: and so it's an affordability issue and so it's really 169 00:09:15,600 --> 00:09:19,760 Speaker 1: driven demand, particularly in the urban cores for apartments. So, 170 00:09:19,800 --> 00:09:22,400 Speaker 1: given your urbanization theme, what are some of the markets 171 00:09:22,480 --> 00:09:25,880 Speaker 1: that surprised you were attractive markets? Iman? I know people 172 00:09:25,880 --> 00:09:27,319 Speaker 1: think of New York, San Francisco, but what were some 173 00:09:27,360 --> 00:09:29,120 Speaker 1: of the markets that kind of surprised you as boy 174 00:09:29,120 --> 00:09:32,720 Speaker 1: these are interesting? Yeah, So that's been fascinating in fact, 175 00:09:32,760 --> 00:09:34,480 Speaker 1: and so we have this sort of way we look 176 00:09:34,480 --> 00:09:36,760 Speaker 1: at cities kind of globally and we take that into 177 00:09:36,760 --> 00:09:37,959 Speaker 1: the U S and we think about, you know, where 178 00:09:37,960 --> 00:09:41,280 Speaker 1: are people moving to millennials, concentration of wealth and places 179 00:09:41,280 --> 00:09:43,679 Speaker 1: like Salt Lake City pop up Nashville, but even in 180 00:09:43,720 --> 00:09:47,360 Speaker 1: places like Orlando, these are not places that an institutional 181 00:09:47,360 --> 00:09:49,880 Speaker 1: real estate investor would have thought of twenty years ago. 182 00:09:49,960 --> 00:09:53,280 Speaker 1: It just there was a nope, not interested. But given 183 00:09:53,320 --> 00:09:55,480 Speaker 1: our analysis and the way we see the world moving, 184 00:09:55,880 --> 00:09:57,559 Speaker 1: this is where millennials want to be There's a quality 185 00:09:57,559 --> 00:09:59,959 Speaker 1: of life there, there's a connectivity there. And so those 186 00:10:00,080 --> 00:10:02,360 Speaker 1: are the cities that actually and there's I could name 187 00:10:02,520 --> 00:10:04,280 Speaker 1: ten more of those that would be like, really, that's 188 00:10:04,400 --> 00:10:08,800 Speaker 1: that's really interesting. So this all makes sense. I buy it. 189 00:10:09,080 --> 00:10:12,040 Speaker 1: I'm buying the picture that you set out there for 190 00:10:12,160 --> 00:10:15,040 Speaker 1: a longer term. Is now the time to be getting 191 00:10:15,080 --> 00:10:17,880 Speaker 1: in given where we are in the housing cycle. So 192 00:10:17,920 --> 00:10:20,520 Speaker 1: I think there's two components that in terms of the 193 00:10:21,120 --> 00:10:24,040 Speaker 1: you know, there's the residential site, there's the residential market. 194 00:10:24,440 --> 00:10:27,000 Speaker 1: Um and and already there there's been softening. But from 195 00:10:27,040 --> 00:10:31,560 Speaker 1: a commercial perspective, which is entirely different. Um, we actually 196 00:10:31,600 --> 00:10:33,760 Speaker 1: look at it from a very long term perspective, right, 197 00:10:33,800 --> 00:10:36,719 Speaker 1: and so kind of almost outside of a cycle perspective 198 00:10:36,720 --> 00:10:39,200 Speaker 1: and saying that these are the cities people want to 199 00:10:39,280 --> 00:10:42,600 Speaker 1: be in that is not going to end and thereby 200 00:10:42,640 --> 00:10:45,000 Speaker 1: that is the opportunity. Okay, fair enough. Although in New 201 00:10:45,080 --> 00:10:47,400 Speaker 1: York City, which is a very vibrant city, it's the 202 00:10:47,440 --> 00:10:50,840 Speaker 1: most populous city in the United States, we have storefront 203 00:10:50,840 --> 00:10:54,600 Speaker 1: after storefront that's empty, that's vacant, that is eating into 204 00:10:54,760 --> 00:10:57,480 Speaker 1: the value of that commercial real estate. So I have 205 00:10:57,600 --> 00:11:01,120 Speaker 1: to wonder how this thesis square is worth retail worth 206 00:11:01,120 --> 00:11:05,559 Speaker 1: the model is completely shifting. Yeah, absolutely, Listen agreed a 207 00:11:05,640 --> 00:11:09,280 Speaker 1: hundred percent that in retail land there are structural shifts 208 00:11:09,320 --> 00:11:12,240 Speaker 1: under way. Winners and losers there, and so that what 209 00:11:12,360 --> 00:11:14,160 Speaker 1: you're seeing when you walk through New York City and 210 00:11:14,200 --> 00:11:18,080 Speaker 1: the vacant storefront losers, but then there's a whole other winner, right, 211 00:11:18,120 --> 00:11:21,600 Speaker 1: But but think about it, there's a winner. But that's 212 00:11:21,600 --> 00:11:23,959 Speaker 1: just the world is divided in retail, right, and that's 213 00:11:24,000 --> 00:11:26,079 Speaker 1: where it's going. But but here's the hard part of that. 214 00:11:26,240 --> 00:11:28,160 Speaker 1: So you're saying, that's great, there's winners and losers. Who's 215 00:11:28,200 --> 00:11:29,920 Speaker 1: going to be the winner, right, And so most of 216 00:11:29,960 --> 00:11:32,800 Speaker 1: my day is spend thinking about who's who is the 217 00:11:32,800 --> 00:11:34,600 Speaker 1: winner in that in retail And so when we think 218 00:11:34,600 --> 00:11:37,719 Speaker 1: about it, we think about necessity, think about a single tenant, right, 219 00:11:38,080 --> 00:11:40,520 Speaker 1: or you think about grocery, or you think about what 220 00:11:40,720 --> 00:11:45,480 Speaker 1: serves an urban community from a necessity local sustainable, authentic, 221 00:11:45,559 --> 00:11:49,000 Speaker 1: like what what does the millennial want? And they want 222 00:11:49,080 --> 00:11:54,240 Speaker 1: that authentic, local, sustainable offering. So the winners and losers, 223 00:11:54,400 --> 00:11:56,559 Speaker 1: and it's picking the right winner, which is not which 224 00:11:56,640 --> 00:12:01,200 Speaker 1: is the day job and is really hard right. Well, Melissa, 225 00:12:01,240 --> 00:12:03,040 Speaker 1: one of the things that I've noticed you mentioned Salt 226 00:12:03,120 --> 00:12:04,720 Speaker 1: Lake and I was just kind of going through that 227 00:12:04,760 --> 00:12:08,560 Speaker 1: market recently in that airport and they're building a huge, 228 00:12:08,800 --> 00:12:14,400 Speaker 1: brand new airport and it's still there's silicon slopes. I 229 00:12:14,480 --> 00:12:16,680 Speaker 1: was just about to say, and it's technology. When I 230 00:12:16,679 --> 00:12:20,720 Speaker 1: think about it, technology Austin, Texas, it was technology. Is 231 00:12:20,760 --> 00:12:24,800 Speaker 1: technology kind of what you look for to see sustainable, 232 00:12:24,800 --> 00:12:28,480 Speaker 1: long term growth. It's certainly that's one component of it. 233 00:12:28,480 --> 00:12:30,480 Speaker 1: I wouldn't say that's the only component, because there can 234 00:12:30,520 --> 00:12:32,880 Speaker 1: be other things that you know, there's finance and certainly 235 00:12:32,920 --> 00:12:35,320 Speaker 1: just business professional jobs. But technology has become at the 236 00:12:35,320 --> 00:12:37,360 Speaker 1: forefront because I think about it. Used to be when 237 00:12:37,360 --> 00:12:39,400 Speaker 1: you thought about technology, it was really Sanrancisco in Austin, 238 00:12:39,480 --> 00:12:41,719 Speaker 1: but that's not true. Today. It's New York, it's it's 239 00:12:41,720 --> 00:12:45,079 Speaker 1: Salt Lake City, it's Chicago, it's it's Atlanta, it's natural 240 00:12:45,120 --> 00:12:47,400 Speaker 1: it's everywhere. Um So it is one thing we look 241 00:12:47,440 --> 00:12:49,640 Speaker 1: at it and say it's like the only factor, but 242 00:12:49,679 --> 00:12:52,200 Speaker 1: it's definitely one thing we look at. Do you think 243 00:12:52,240 --> 00:12:57,160 Speaker 1: that the interest in warehouses and in uh aging homes 244 00:12:57,160 --> 00:13:00,319 Speaker 1: and facilities that that has gone too far? Are at 245 00:13:00,320 --> 00:13:02,880 Speaker 1: this point. It is now where the opportunity lies anymore 246 00:13:03,320 --> 00:13:08,000 Speaker 1: in the warehouse sector. Yeah, oh no, I think so. 247 00:13:08,120 --> 00:13:09,920 Speaker 1: I get that common a lot of seeing well, isn't 248 00:13:09,960 --> 00:13:12,600 Speaker 1: warehouse sort of you know, it's it's it's peak pricing, 249 00:13:12,760 --> 00:13:15,560 Speaker 1: or isn't all the demand you know, fully baked in um? 250 00:13:15,760 --> 00:13:19,120 Speaker 1: Actually no, I think they're if you believe remember my 251 00:13:19,200 --> 00:13:21,840 Speaker 1: retail comment winners and losers. What is driving that the 252 00:13:21,840 --> 00:13:24,559 Speaker 1: e commerce rate of retail sales? And I don't think 253 00:13:24,600 --> 00:13:26,680 Speaker 1: that's going away, Like I think people are going to 254 00:13:26,720 --> 00:13:29,880 Speaker 1: continue to shop online. It creates winners and losers in retail, 255 00:13:29,920 --> 00:13:34,200 Speaker 1: but it is a long term structural winner behind industrial um. 256 00:13:34,240 --> 00:13:36,560 Speaker 1: And I don't see if that tail wind stops then 257 00:13:36,679 --> 00:13:38,520 Speaker 1: then yes, we've got issues we need to look at 258 00:13:38,520 --> 00:13:40,880 Speaker 1: in the industrial space, but I don't see that stopping. 259 00:13:41,240 --> 00:13:44,480 Speaker 1: Interesting Melissa, Thank you so much. Melissa Reagan ahead of 260 00:13:44,480 --> 00:13:47,320 Speaker 1: research for Neuvin Real Estate, joining us in our Bloomberg 261 00:13:47,320 --> 00:13:50,760 Speaker 1: Interactive Broker's studio talking about urbanization and it's at least 262 00:13:50,800 --> 00:13:52,559 Speaker 1: it's one of the things you know, you think about it. 263 00:13:52,760 --> 00:13:54,760 Speaker 1: I hear about it in so many different cities, whether 264 00:13:54,800 --> 00:13:57,400 Speaker 1: it's in Atlanta or a Richmond, because you know, not 265 00:13:57,480 --> 00:14:00,680 Speaker 1: necessarily big top ten markets, but if they've got a 266 00:14:00,720 --> 00:14:04,000 Speaker 1: technology hub or maybe healthcare hub, um, that is what 267 00:14:04,040 --> 00:14:06,160 Speaker 1: can drive growth in some of those markets. Look, it's 268 00:14:06,320 --> 00:14:08,760 Speaker 1: for the younger people, it's the jobs. For the older people, 269 00:14:08,800 --> 00:14:13,120 Speaker 1: it's access to healthcare and easy you know, food and transportation. 270 00:14:13,240 --> 00:14:31,360 Speaker 1: So a lot of arguments for this. Well, interest rates 271 00:14:31,400 --> 00:14:34,920 Speaker 1: globally continue to grind lower. We actually have negative interest 272 00:14:35,000 --> 00:14:39,640 Speaker 1: rates and major economies such as Japan, Germany, Switzerland. So 273 00:14:39,760 --> 00:14:41,640 Speaker 1: help us get a sense of how to navigate through 274 00:14:41,680 --> 00:14:45,440 Speaker 1: this unique environment. We welcome Dr Brendan Brown. Dr Brown 275 00:14:45,520 --> 00:14:47,960 Speaker 1: is a Senior fellow at the Hudson Institute and publisher 276 00:14:48,000 --> 00:14:51,640 Speaker 1: of the newsletter Monetary Scenarios UH and he is based 277 00:14:51,640 --> 00:14:54,120 Speaker 1: in London. Dr Brown, thank you so much for joining us. 278 00:14:54,480 --> 00:14:58,520 Speaker 1: So what do you make of this persistent negative yields 279 00:14:58,520 --> 00:15:03,360 Speaker 1: in against some major markets like Switzerland, Germany and Japan. Well, 280 00:15:03,400 --> 00:15:07,160 Speaker 1: the negative rates in Europe and Japan essentially are are 281 00:15:08,200 --> 00:15:13,840 Speaker 1: result of serious monetary manipulation, and the central banks in 282 00:15:13,840 --> 00:15:17,040 Speaker 1: Europe and Japan have made it clear in response to 283 00:15:17,240 --> 00:15:21,000 Speaker 1: the softening of the global economy that we're going to 284 00:15:21,960 --> 00:15:28,200 Speaker 1: go even further into these radical monetary policies um in 285 00:15:28,200 --> 00:15:32,720 Speaker 1: in the total picture. It's difficult to see these negative 286 00:15:32,800 --> 00:15:36,280 Speaker 1: rates is telling you or anything seriously about the real economy, 287 00:15:36,320 --> 00:15:39,040 Speaker 1: because it's a long time since bond markets in those 288 00:15:39,080 --> 00:15:44,160 Speaker 1: countries have had any economic meaning. Well, Brennan, one thing 289 00:15:44,200 --> 00:15:46,960 Speaker 1: that I'm struck by is the fact that, yes, this 290 00:15:47,240 --> 00:15:50,640 Speaker 1: is a symptom of central bank policies in the region. 291 00:15:51,000 --> 00:15:54,360 Speaker 1: True has been for a long time, not necessarily free 292 00:15:54,360 --> 00:15:57,840 Speaker 1: market kind of gauge there. That said, the fact that 293 00:15:57,880 --> 00:16:00,280 Speaker 1: the European economy is not taking off, in fact that 294 00:16:00,400 --> 00:16:04,160 Speaker 1: is slowing down in many measurable ways, is raising a 295 00:16:04,240 --> 00:16:07,440 Speaker 1: really existential question. Here are negative rates hurting more than 296 00:16:07,440 --> 00:16:09,400 Speaker 1: they're helping, And so far the e c B is 297 00:16:09,480 --> 00:16:11,400 Speaker 1: kind of saying, well, the jury is sort of out, 298 00:16:11,680 --> 00:16:15,320 Speaker 1: but they're starting to play with the idea that perhaps 299 00:16:15,320 --> 00:16:18,200 Speaker 1: helping out banks in different ways. Can you speak a 300 00:16:18,200 --> 00:16:20,400 Speaker 1: little bit about them and do you think that they 301 00:16:20,440 --> 00:16:23,880 Speaker 1: are addressing the issue of the dutchmental effects of negative 302 00:16:23,920 --> 00:16:28,000 Speaker 1: yields in an expedient way right now? Well, the main 303 00:16:28,200 --> 00:16:33,160 Speaker 1: effect of negative rates on the economies comes through the currency, 304 00:16:33,520 --> 00:16:39,400 Speaker 1: and the yen and the euro have been seriously depressed 305 00:16:39,400 --> 00:16:44,720 Speaker 1: by this negative rate regime. The puzzle here is, given 306 00:16:44,800 --> 00:16:49,120 Speaker 1: the cheapness of the currencies, why investment in the export 307 00:16:49,200 --> 00:16:53,240 Speaker 1: sectors in Germany in particular and Japan has only been 308 00:16:53,840 --> 00:16:57,000 Speaker 1: lukewarm even at the peak of a boom last year. 309 00:16:57,000 --> 00:16:59,880 Speaker 1: And I think what we're seeing there is that businesses 310 00:17:00,040 --> 00:17:04,600 Speaker 1: realize that this is an artificial situation, and so they're 311 00:17:04,600 --> 00:17:07,560 Speaker 1: not prepared to rev up fully and haven't been prepared 312 00:17:07,600 --> 00:17:11,800 Speaker 1: to rev up fully on what may be a transitory 313 00:17:12,000 --> 00:17:16,159 Speaker 1: manipulated rate. Now, on top of that, we've got the 314 00:17:16,240 --> 00:17:20,040 Speaker 1: position of the banks, and you mentioned Europe. In Japan 315 00:17:20,240 --> 00:17:23,960 Speaker 1: in many ways, I think there's a greater hidden problem there. 316 00:17:24,040 --> 00:17:29,359 Speaker 1: The Japanese banks and Japanese financial institutions, to escape negative rates, 317 00:17:30,000 --> 00:17:34,840 Speaker 1: have been involved in more and more risky particularly cross 318 00:17:34,920 --> 00:17:40,199 Speaker 1: border lending, and that could create a serious funding is 319 00:17:40,240 --> 00:17:42,960 Speaker 1: to particularly in dollar funds, if we get into another 320 00:17:43,320 --> 00:17:47,560 Speaker 1: period of financial market downturnal stress. So Dr Brown, we've 321 00:17:47,560 --> 00:17:49,760 Speaker 1: been talking about the weakness in Europe, and certainly the 322 00:17:49,960 --> 00:17:54,800 Speaker 1: Brexit uncertainty has certainly been a contributor to that weakness. 323 00:17:54,920 --> 00:17:57,600 Speaker 1: I have to ask you, you know you're based in London, 324 00:17:57,640 --> 00:17:59,920 Speaker 1: You're right there in ground zero what is your sense 325 00:18:00,040 --> 00:18:01,920 Speaker 1: of how this thing is going to play out in 326 00:18:02,040 --> 00:18:05,880 Speaker 1: terms of Brexit over the next several days. I think 327 00:18:05,880 --> 00:18:09,639 Speaker 1: it's leaning more and more towards no deal. But no 328 00:18:09,800 --> 00:18:12,439 Speaker 1: deal doesn't mean crash out or anything else. It probably 329 00:18:12,480 --> 00:18:18,200 Speaker 1: means everyone staying where they are until there's a bit 330 00:18:18,240 --> 00:18:21,680 Speaker 1: more clarity on the political direction. In particular, I would 331 00:18:21,720 --> 00:18:24,879 Speaker 1: imagine that there could be a temporary standstill of the 332 00:18:24,960 --> 00:18:28,280 Speaker 1: clock turned back to allow time for a leadership election 333 00:18:28,359 --> 00:18:31,320 Speaker 1: to take place in the Conservative Party, and then we 334 00:18:31,400 --> 00:18:34,119 Speaker 1: see what happens. If I had to plot a central 335 00:18:34,119 --> 00:18:36,960 Speaker 1: scenario through all that, it's going to be that we 336 00:18:37,480 --> 00:18:40,840 Speaker 1: get a new leader of a Conservative party more in 337 00:18:40,920 --> 00:18:45,120 Speaker 1: the Brexit side, and that new leader will want to 338 00:18:45,160 --> 00:18:50,000 Speaker 1: start negotiations again on a deal rather than just taking 339 00:18:50,040 --> 00:18:52,320 Speaker 1: the May Deal as it is. So there will be 340 00:18:52,359 --> 00:18:56,600 Speaker 1: a period most likely of so called no deal Brexit. 341 00:18:56,680 --> 00:18:59,280 Speaker 1: To me, reminds me of like a Monty Python sketch. 342 00:18:59,600 --> 00:19:01,639 Speaker 1: I mean, as Lee at a certain point, you know, 343 00:19:02,080 --> 00:19:04,119 Speaker 1: let's vote on the vote of the vote of maybe 344 00:19:04,240 --> 00:19:07,280 Speaker 1: meeting and maybe we can discuss something that might actually happen, 345 00:19:07,320 --> 00:19:09,520 Speaker 1: and maybe we can extend the deadline a little bit further. 346 00:19:10,080 --> 00:19:12,719 Speaker 1: But Brendan. I do have to wonder, especially as German 347 00:19:12,720 --> 00:19:15,600 Speaker 1: bond yields continue to decline. Today they're they're taking a 348 00:19:15,600 --> 00:19:17,920 Speaker 1: bit of a breather. But right now ten year bond 349 00:19:18,000 --> 00:19:22,520 Speaker 1: yields in Germany lower than similarly dated bonds in Japan. 350 00:19:22,680 --> 00:19:26,480 Speaker 1: Are we seeing the full on Japanification of the Eurozone, 351 00:19:26,640 --> 00:19:29,600 Speaker 1: in particular Germany, and what are the implications for raids 352 00:19:29,640 --> 00:19:34,160 Speaker 1: going forward. I don't think with the Japanification, partly because 353 00:19:34,160 --> 00:19:36,720 Speaker 1: I think that Japanification is a myth. Anyhow, Japan, if 354 00:19:36,760 --> 00:19:40,000 Speaker 1: you adjusted of a democratic demographic factor, has been doing 355 00:19:40,040 --> 00:19:42,320 Speaker 1: remarkably well and on some measures even better than the 356 00:19:42,400 --> 00:19:46,159 Speaker 1: US in terms of employed person per head. But I 357 00:19:46,200 --> 00:19:51,040 Speaker 1: think when you look at the German negative yields, why 358 00:19:51,080 --> 00:19:54,240 Speaker 1: are there minus nor point one zero? I would say 359 00:19:54,240 --> 00:19:58,920 Speaker 1: the critical factor there is that the market has discounted 360 00:19:59,480 --> 00:20:05,000 Speaker 1: consider r or likelihood of Italy leaving European monetary Union 361 00:20:05,320 --> 00:20:07,760 Speaker 1: at some point in the next few years, if not sooner. 362 00:20:08,160 --> 00:20:10,280 Speaker 1: So what you're seeing in the German bond market is 363 00:20:10,280 --> 00:20:13,560 Speaker 1: in fact an option that what you might have there 364 00:20:13,680 --> 00:20:15,680 Speaker 1: if you hold the German government bond at some point 365 00:20:16,119 --> 00:20:19,760 Speaker 1: is a reincarnated Deutsche Mark. Now that that's that's why 366 00:20:19,800 --> 00:20:23,240 Speaker 1: we are where we are. But nonetheless, negative bond deals 367 00:20:23,280 --> 00:20:27,840 Speaker 1: are a huge incentive to real estate speculation in Germany, 368 00:20:28,000 --> 00:20:30,280 Speaker 1: and in a recent note I put out, I do 369 00:20:30,440 --> 00:20:33,240 Speaker 1: draw attention to the construction boom and the real estate 370 00:20:33,359 --> 00:20:37,679 Speaker 1: boom in Germany as being an important offset all the 371 00:20:37,680 --> 00:20:41,080 Speaker 1: bad news we're getting on the export side. So do 372 00:20:41,119 --> 00:20:43,040 Speaker 1: you feel well, let's just push it out there. In 373 00:20:43,160 --> 00:20:45,399 Speaker 1: terms of the European Union, you talked about Italy maybe 374 00:20:45,400 --> 00:20:48,639 Speaker 1: falling out. What is your view of the European Union 375 00:20:48,720 --> 00:20:50,960 Speaker 1: in general over the next five to ten years. Is 376 00:20:51,000 --> 00:20:55,800 Speaker 1: it going to look materially different than today? Very much so. 377 00:20:56,080 --> 00:20:58,440 Speaker 1: I think first a lot of that would will turn 378 00:20:58,640 --> 00:21:04,040 Speaker 1: on the key developments in Germany and Italy, and I 379 00:21:04,040 --> 00:21:08,160 Speaker 1: would say in particular that any sort of Brexit crisis 380 00:21:08,240 --> 00:21:13,000 Speaker 1: or hard breakout or whatever could accelerate that through leading 381 00:21:13,119 --> 00:21:19,000 Speaker 1: to political quake Germany. In particular, middle sized businesses who 382 00:21:19,000 --> 00:21:23,879 Speaker 1: are very dependent on the UK market may take what's 383 00:21:23,920 --> 00:21:28,720 Speaker 1: happening here as a reason to push harder vote against 384 00:21:28,840 --> 00:21:33,120 Speaker 1: Merkel as soon as the European elections in in late May. 385 00:21:33,400 --> 00:21:38,080 Speaker 1: So I do see a growing divergence coming about between 386 00:21:38,400 --> 00:21:41,199 Speaker 1: the German and Italian situation and that being crucial to 387 00:21:41,280 --> 00:21:44,840 Speaker 1: how you pant out. Dr Brendon Brown, thank you so 388 00:21:44,920 --> 00:21:47,080 Speaker 1: much for being with us. Dr Brendon Brown, Senior Fellow 389 00:21:47,119 --> 00:21:51,600 Speaker 1: at the Hudson Institute and publisher of the newsletter Monetary Scenarios. 390 00:21:51,680 --> 00:22:08,960 Speaker 1: Joining us from London, I want to talk about one 391 00:22:09,000 --> 00:22:12,080 Speaker 1: particular financial issue in New York City, and that is 392 00:22:12,119 --> 00:22:15,960 Speaker 1: congestion pricing. It does seem like that plan is moving 393 00:22:16,000 --> 00:22:19,439 Speaker 1: closer to reality. Joining us now, Henry Goldman, government importer 394 00:22:19,600 --> 00:22:22,959 Speaker 1: for Bloomberg News. Joining us from New York City Hall. Henry, 395 00:22:23,040 --> 00:22:26,800 Speaker 1: what is the latest on the congestion pricing proposals currently 396 00:22:26,840 --> 00:22:31,040 Speaker 1: working its way through state n city legislatures. Well, the 397 00:22:31,800 --> 00:22:35,280 Speaker 1: there's sort of an agreement in principle between the Assembly, 398 00:22:35,480 --> 00:22:38,840 Speaker 1: the Senate, and the governor that this is the way 399 00:22:38,840 --> 00:22:41,879 Speaker 1: to go. UH. Why is it the way to go? 400 00:22:42,000 --> 00:22:46,640 Speaker 1: Because New York City UH is facing a twin crisis 401 00:22:46,760 --> 00:22:51,520 Speaker 1: where we've got traffic congestion in Midtown Manhattan. It's costing 402 00:22:52,160 --> 00:22:57,280 Speaker 1: the city economy maybe twenty billion dollars a year according 403 00:22:57,320 --> 00:23:01,080 Speaker 1: to the Partnership for New York City. At the same time, 404 00:23:01,520 --> 00:23:06,000 Speaker 1: we've got a matched transit crisis where we need an 405 00:23:06,000 --> 00:23:09,560 Speaker 1: infusion of billions and billions of dollars, and so we 406 00:23:09,640 --> 00:23:13,640 Speaker 1: need the revenue that congestion pricing could bring us. So 407 00:23:13,720 --> 00:23:19,639 Speaker 1: that's basically why this thing is developed with such urgency. So, Henry, 408 00:23:19,680 --> 00:23:22,440 Speaker 1: what is actually the timing here? It seems to have 409 00:23:22,480 --> 00:23:25,240 Speaker 1: been put on the fast track here. What's the timing? Well, 410 00:23:25,720 --> 00:23:29,800 Speaker 1: this the state has a budget that needs to be 411 00:23:30,400 --> 00:23:35,119 Speaker 1: approved by the legislature by April one, So April fools 412 00:23:35,200 --> 00:23:39,879 Speaker 1: Day is the day when the legislature comes up budget 413 00:23:40,560 --> 00:23:43,960 Speaker 1: that's too much. That's Rich April Fool's Day. We passed 414 00:23:43,960 --> 00:23:47,080 Speaker 1: congestion pricing. Just kidding. Uh, this was a proposal that 415 00:23:47,119 --> 00:23:49,880 Speaker 1: has been out there and floated for a long time. 416 00:23:49,880 --> 00:23:52,280 Speaker 1: There are many other cities that have done at Singapore, Stockholm, 417 00:23:52,280 --> 00:23:55,920 Speaker 1: London is thinking of expanding or increasing the costs. Why 418 00:23:56,160 --> 00:23:59,000 Speaker 1: is the opposition so much less powerful this time around? 419 00:24:00,160 --> 00:24:03,800 Speaker 1: Probably because of the compelling nature of these twin crises. 420 00:24:03,880 --> 00:24:10,000 Speaker 1: We've got just a city in Manhattan that's just congested 421 00:24:10,080 --> 00:24:13,840 Speaker 1: to the point where people can't move, so appointments are 422 00:24:13,880 --> 00:24:18,160 Speaker 1: missed and people are sitting in their cars, and gasoline 423 00:24:18,280 --> 00:24:22,680 Speaker 1: is burning and asthma is getting you're making it sound 424 00:24:22,720 --> 00:24:25,280 Speaker 1: like we're living in accessful It's really not that bad. 425 00:24:25,720 --> 00:24:31,000 Speaker 1: It is bad. The congestion in midtown Manhattan is costing 426 00:24:31,040 --> 00:24:37,359 Speaker 1: the city's economy billions of dollars in missed appointments, in 427 00:24:38,080 --> 00:24:43,159 Speaker 1: work that doesn't get done, in UH, wasted fuel, in 428 00:24:43,520 --> 00:24:47,920 Speaker 1: medical costs of pollution. That's all on the congestion side. 429 00:24:48,000 --> 00:24:51,560 Speaker 1: Then beyond that, we have a subway system that's a 430 00:24:51,600 --> 00:24:55,280 Speaker 1: hundred years old. We went through a Summer of Hell 431 00:24:55,480 --> 00:25:01,040 Speaker 1: last year where subway breakdowns became the routine. All of 432 00:25:01,160 --> 00:25:07,639 Speaker 1: this has gigantic economic costs and health consequences. So it's 433 00:25:07,680 --> 00:25:12,639 Speaker 1: it's not a it's not a minor or trivial thing. So, Henry, 434 00:25:12,680 --> 00:25:15,399 Speaker 1: how does actually work? Am I gonna be paying higher 435 00:25:15,440 --> 00:25:22,160 Speaker 1: tolls now? Well? Uh, yes, the details have not been 436 00:25:22,320 --> 00:25:26,040 Speaker 1: worked out, but yes, when you raise revenue, somebody pays. 437 00:25:26,160 --> 00:25:32,040 Speaker 1: Now who pays? People who are entering Manhattan's UH congestion 438 00:25:32,480 --> 00:25:36,280 Speaker 1: zone south of sixty one Street, there will be electronic 439 00:25:37,200 --> 00:25:42,480 Speaker 1: scanners or transponders or some technology that will scan licenses 440 00:25:42,600 --> 00:25:45,960 Speaker 1: or use an easy path like device, and once you 441 00:25:46,080 --> 00:25:49,800 Speaker 1: cross that boundary, you will be told a certain amount 442 00:25:49,840 --> 00:25:52,199 Speaker 1: of money that yet to be determined. There was a 443 00:25:52,280 --> 00:25:56,720 Speaker 1: study a few years ago that said it at eleven 444 00:25:56,760 --> 00:25:59,920 Speaker 1: dollars and fifty two cents that was enough to raise 445 00:26:00,080 --> 00:26:03,680 Speaker 1: is maybe a billion dollars in revenue, and that billion 446 00:26:03,720 --> 00:26:07,280 Speaker 1: dollars in revenue could then be leveraged in municipal bonds 447 00:26:07,720 --> 00:26:12,080 Speaker 1: to borrow maybe fifteen billion dollars uh and pay the 448 00:26:12,119 --> 00:26:15,960 Speaker 1: debt service on that. So that's the kind of money. Uh, 449 00:26:16,000 --> 00:26:19,439 Speaker 1: that's a start. It's only a start in facing the 450 00:26:19,480 --> 00:26:24,239 Speaker 1: transit needs of the city and the region because there 451 00:26:24,280 --> 00:26:29,360 Speaker 1: are commuter rail needs that must be taken care of. Now, 452 00:26:29,480 --> 00:26:32,320 Speaker 1: So who's paying the people who drive south of sixty 453 00:26:32,440 --> 00:26:35,119 Speaker 1: one Street. Now, let's say you're taking a bus into 454 00:26:35,160 --> 00:26:38,760 Speaker 1: New York City. I'm sorry, that's a you're taking a 455 00:26:38,840 --> 00:26:44,600 Speaker 1: car and you're gonna cross a bridge into New York City. Uh. 456 00:26:44,880 --> 00:26:47,720 Speaker 1: Those people who are already paying eleven dollars or more 457 00:26:47,760 --> 00:26:51,000 Speaker 1: on the bridge, they don't want to pay another eleven 458 00:26:51,000 --> 00:26:55,040 Speaker 1: dollars or more to get into Midtown Manhattan. And there 459 00:26:55,040 --> 00:26:59,720 Speaker 1: will probably be some system of credits that will allow 460 00:26:59,800 --> 00:27:04,440 Speaker 1: them to offset the price of taking that bridge. But 461 00:27:04,560 --> 00:27:07,280 Speaker 1: the bottom line is, Henry, it seems like this is 462 00:27:07,320 --> 00:27:10,320 Speaker 1: coming people are gonna pay um one way or the other. 463 00:27:10,359 --> 00:27:13,000 Speaker 1: And uh again, it's been tried, as Lisa mentioned, in 464 00:27:13,040 --> 00:27:15,080 Speaker 1: other parts of the world, and so this might be, 465 00:27:15,560 --> 00:27:17,520 Speaker 1: you know, this might, Lisa, just be the perfect storm. 466 00:27:17,600 --> 00:27:19,720 Speaker 1: So we'll have to see. Henry Goldman, thank you so much. 467 00:27:19,720 --> 00:27:22,199 Speaker 1: Henry's a government reporter for Bloomberg News calling us from 468 00:27:22,200 --> 00:27:24,280 Speaker 1: New York City Hall. But it just seems like, you know, 469 00:27:24,359 --> 00:27:26,000 Speaker 1: with what's going on with the mass transit and how 470 00:27:26,040 --> 00:27:28,960 Speaker 1: much money Mass Transit needs, this just might be the 471 00:27:29,080 --> 00:27:31,480 Speaker 1: revenue solution. So it might be a perfect storm where 472 00:27:31,480 --> 00:27:33,879 Speaker 1: things can actually get done here. Thanks for listening to 473 00:27:33,880 --> 00:27:36,320 Speaker 1: the Bloomberg P and L podcast. You can subscribe and 474 00:27:36,320 --> 00:27:39,480 Speaker 1: listen to interviews at Apple Podcasts or whatever podcast platform 475 00:27:39,520 --> 00:27:42,600 Speaker 1: you prefer. Paul Sweeney, I'm on Twitter at pt Sweeney 476 00:27:42,680 --> 00:27:45,520 Speaker 1: and Lisa bram Woyd's I'm on Twitter at Lisa Bramwoyit's 477 00:27:45,600 --> 00:27:48,440 Speaker 1: one before the podcast. You can always catch us worldwide. 478 00:27:48,440 --> 00:27:49,439 Speaker 1: I'm Bloomberg Radio.