WEBVTT - Eric Cantor Talks US Economy, M&A Deals

0:00:02.520 --> 0:00:07.040
<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

0:00:07.800 --> 0:00:11.440
<v Speaker 2>Former House majority leader Eric Canter joins us now currently

0:00:11.480 --> 0:00:13.840
<v Speaker 2>of Molus, and I want to start on the economy

0:00:13.840 --> 0:00:15.600
<v Speaker 2>and all of these deals that we see going on.

0:00:15.640 --> 0:00:18.840
<v Speaker 2>I mean, is this just an incredibly robust deals pipeline

0:00:18.840 --> 0:00:22.280
<v Speaker 2>on the heels of benign economy and wide open capital markets.

0:00:22.680 --> 0:00:25.239
<v Speaker 3>Yeah, I think you're right. I mean, I know, Molas.

0:00:25.280 --> 0:00:27.400
<v Speaker 3>You know, our bankers are really busy as we come

0:00:27.440 --> 0:00:29.920
<v Speaker 3>into the very end of the year running through the tape,

0:00:30.000 --> 0:00:32.280
<v Speaker 3>and so there's a lot of dialogue. We're in the

0:00:32.320 --> 0:00:36.479
<v Speaker 3>business of advising on transactions. Transactions are a tool for

0:00:36.600 --> 0:00:40.120
<v Speaker 3>companies to accelerate growth, to figure out how to better position,

0:00:40.159 --> 0:00:43.040
<v Speaker 3>to gain efficiencies, and as you say, there are accommodative

0:00:43.080 --> 0:00:46.480
<v Speaker 3>capital markets right now too, and so we are seeing

0:00:46.680 --> 0:00:49.800
<v Speaker 3>just a lot of dialogue, a lot of activity, and

0:00:49.840 --> 0:00:52.239
<v Speaker 3>I think a general optimism as we come to the

0:00:52.600 --> 0:00:53.000
<v Speaker 3>new year.

0:00:53.159 --> 0:00:55.200
<v Speaker 2>What's interesting is in markets right now you're seeing a

0:00:55.200 --> 0:00:58.040
<v Speaker 2>bit of skepticism pushback broadcom perfect example of that. We

0:00:58.040 --> 0:01:00.960
<v Speaker 2>also saw that with Oracle, investors are saying you need

0:01:00.960 --> 0:01:02.600
<v Speaker 2>to pay up a little bit more. As vice chair

0:01:02.640 --> 0:01:04.720
<v Speaker 2>of Molus, so you're seeing that pushback in any way

0:01:04.720 --> 0:01:07.120
<v Speaker 2>shape or form, or deals just coming out of the

0:01:07.160 --> 0:01:10.319
<v Speaker 2>woodwork in ways that keep even your associates really busy,

0:01:10.400 --> 0:01:10.560
<v Speaker 2>you know.

0:01:10.600 --> 0:01:12.160
<v Speaker 3>I think if you look at the if you look

0:01:12.200 --> 0:01:15.400
<v Speaker 3>at the strategic sort of universe, I mean, they are

0:01:15.760 --> 0:01:17.960
<v Speaker 3>and have always had a list of where they're heading

0:01:17.959 --> 0:01:19.920
<v Speaker 3>in terms of targets and the kind of deals they

0:01:19.920 --> 0:01:22.320
<v Speaker 3>want to do. And certainly in the sponsor world, there

0:01:22.319 --> 0:01:24.240
<v Speaker 3>are other sort of forces at work. You know, the

0:01:24.319 --> 0:01:28.279
<v Speaker 3>need to recycle capital, you know, assets that may need

0:01:28.920 --> 0:01:31.240
<v Speaker 3>to be to go into a continuation fund them. There

0:01:31.240 --> 0:01:36.920
<v Speaker 3>are all types of different tools available for clients, investors' sponsors, strategics,

0:01:37.360 --> 0:01:41.400
<v Speaker 3>and as you say, I think overall the framework in

0:01:41.480 --> 0:01:44.960
<v Speaker 3>the environment is more constructive now, certainly Washington, when people

0:01:45.000 --> 0:01:47.840
<v Speaker 3>look to the regulatory impact, we have sort of come

0:01:47.840 --> 0:01:51.840
<v Speaker 3>out from under this very very negative regulatory outlook that

0:01:51.880 --> 0:01:53.240
<v Speaker 3>we had in the prior administration.

0:01:53.320 --> 0:01:55.240
<v Speaker 1>Talk a bit more about that. So when you're talking

0:01:55.240 --> 0:01:58.480
<v Speaker 1>to executives about that regulatory environment, how would you describe it?

0:01:58.520 --> 0:02:00.800
<v Speaker 1>I mean, we see some of these agencies where there's

0:02:00.840 --> 0:02:04.160
<v Speaker 1>not a full panoply of commissioners. For instance, we heard

0:02:04.160 --> 0:02:06.000
<v Speaker 1>it from the Treasury sectory. There's be some new corporate

0:02:06.040 --> 0:02:08.680
<v Speaker 1>tax policies coming here into effect in the coming weeks.

0:02:08.880 --> 0:02:10.560
<v Speaker 1>How much of it is still in cod or clear

0:02:10.600 --> 0:02:13.280
<v Speaker 1>for you at this point of where it's headed regulatorily.

0:02:12.760 --> 0:02:16.519
<v Speaker 3>You know, I think with this president and this administration,

0:02:16.600 --> 0:02:19.560
<v Speaker 3>and I think there is just sort of an acceptance

0:02:19.560 --> 0:02:22.840
<v Speaker 3>that you're never really going to know for certain anything

0:02:22.960 --> 0:02:26.000
<v Speaker 3>because of the way that you know, the rapidity that

0:02:26.160 --> 0:02:29.400
<v Speaker 3>things are about in Washington, the way that President Trump

0:02:29.480 --> 0:02:33.239
<v Speaker 3>sort of approaches, you know, the power he's got in

0:02:33.320 --> 0:02:36.560
<v Speaker 3>the position very unique. But I think on the whole,

0:02:36.600 --> 0:02:40.760
<v Speaker 3>it's a much more constructive regulatory environment, and you just

0:02:40.880 --> 0:02:43.960
<v Speaker 3>don't have this overhang that you had in the prior

0:02:44.040 --> 0:02:47.680
<v Speaker 3>Biden administration, where you know, there was really an anti

0:02:47.800 --> 0:02:50.919
<v Speaker 3>business sentiment and if you just remember that we'd select

0:02:51.520 --> 0:02:54.440
<v Speaker 3>eons ago. But with the likes of Lena Kahn and

0:02:54.520 --> 0:02:56.920
<v Speaker 3>Jonathan Canner, they were sitting in these spots in the

0:02:56.960 --> 0:03:01.600
<v Speaker 3>head of the anti trust regulators and they really definitionally said,

0:03:01.680 --> 0:03:05.760
<v Speaker 3>if you are bigger, that is bad, and therefore we're

0:03:05.880 --> 0:03:08.239
<v Speaker 3>not really inclined to allow you to do it. Whereas

0:03:08.280 --> 0:03:12.160
<v Speaker 3>this administration, it's not like it was under the Bush administration,

0:03:12.320 --> 0:03:14.840
<v Speaker 3>but it's certainly much more constructive than they like to

0:03:14.880 --> 0:03:15.440
<v Speaker 3>do deals.

0:03:15.480 --> 0:03:17.680
<v Speaker 1>As you've watched that parade of executives going through the

0:03:17.680 --> 0:03:19.760
<v Speaker 1>Oval Office, some of whom are giving up equity stakes

0:03:19.800 --> 0:03:22.760
<v Speaker 1>to the US government. What are you thinking, as a

0:03:22.800 --> 0:03:25.920
<v Speaker 1>lifelong Republican this kind of new new breed of Trump

0:03:25.960 --> 0:03:29.960
<v Speaker 1>Republicanism that involves again, it's not derogism, but it's sort

0:03:29.960 --> 0:03:32.000
<v Speaker 1>of like the state is having a heavier hand in

0:03:32.040 --> 0:03:32.680
<v Speaker 1>the way that these.

0:03:32.520 --> 0:03:35.920
<v Speaker 3>Pals are not. I know, David, I still remain a

0:03:36.000 --> 0:03:40.200
<v Speaker 3>limited government, free market Republican and conservative. So it's obviously

0:03:40.240 --> 0:03:42.600
<v Speaker 3>something very new to me to see that the government

0:03:42.640 --> 0:03:45.160
<v Speaker 3>wants to take a stake in a business and or

0:03:45.200 --> 0:03:47.680
<v Speaker 3>a toll if it's an export. That is something that

0:03:47.840 --> 0:03:50.320
<v Speaker 3>is obviously and I think for the majority of the

0:03:50.360 --> 0:03:53.480
<v Speaker 3>members that are in the Congress now, it is something

0:03:53.520 --> 0:03:55.960
<v Speaker 3>that's very new. But I do think it's much more

0:03:55.960 --> 0:03:58.120
<v Speaker 3>in keeping with what President Trump is about and what

0:03:58.240 --> 0:04:01.440
<v Speaker 3>his career has been about about deal making. And I

0:04:01.480 --> 0:04:03.800
<v Speaker 3>think if you look at sort of the Intel situation

0:04:04.000 --> 0:04:07.559
<v Speaker 3>and what happened there, it was more of a response

0:04:07.640 --> 0:04:10.880
<v Speaker 3>to the disdain that the White House had for the

0:04:10.960 --> 0:04:15.280
<v Speaker 3>Chip Sack and just giving away moneies and instead say, hey,

0:04:15.280 --> 0:04:17.359
<v Speaker 3>we need to do something for the taxpayers. Now, where

0:04:17.400 --> 0:04:20.600
<v Speaker 3>I have an issue is the governance rights. You know

0:04:20.680 --> 0:04:22.880
<v Speaker 3>that is you know, it's not as if the federal

0:04:22.960 --> 0:04:25.560
<v Speaker 3>government has not stepped in before. I mean, you and

0:04:25.600 --> 0:04:29.120
<v Speaker 3>I were down there when the Great Financial Crisis happened

0:04:29.160 --> 0:04:33.520
<v Speaker 3>and a lot of bailouts. You look at the airline industry,

0:04:33.560 --> 0:04:35.560
<v Speaker 3>you look at the GSCs. I mean, there's a lot

0:04:35.600 --> 0:04:40.440
<v Speaker 3>of history. But the difference this Before there was always

0:04:40.480 --> 0:04:42.520
<v Speaker 3>sort of a path and a known path to an

0:04:42.520 --> 0:04:44.520
<v Speaker 3>excess and now not so clear.

0:04:44.600 --> 0:04:47.520
<v Speaker 2>Well, this is sort of the concern is that right now,

0:04:47.600 --> 0:04:51.000
<v Speaker 2>if you're putting an empersistent deal making, deregulation and potentially

0:04:51.160 --> 0:04:53.240
<v Speaker 2>job owning the FED to cut rates more aggressively at

0:04:53.240 --> 0:04:56.200
<v Speaker 2>a time that the economy is still chugging along, at

0:04:56.200 --> 0:04:57.560
<v Speaker 2>what point are you setting up the risk of that

0:04:57.640 --> 0:04:59.640
<v Speaker 2>kind of scenario once again in twenty twenty seven or

0:04:59.680 --> 0:05:00.440
<v Speaker 2>twenty eight.

0:05:01.520 --> 0:05:05.039
<v Speaker 3>Well, listen, I think this president has been very consistent

0:05:05.160 --> 0:05:09.080
<v Speaker 3>his message of growth and he wants growth, and that

0:05:09.279 --> 0:05:11.240
<v Speaker 3>is the way, and that is where sort of the

0:05:12.680 --> 0:05:16.080
<v Speaker 3>more traditional sort of conservative Republican can come along with

0:05:16.160 --> 0:05:19.160
<v Speaker 3>the agenda, because it is we've always been about real

0:05:19.160 --> 0:05:21.680
<v Speaker 3>growth comes from the private sector. And if you look

0:05:21.680 --> 0:05:25.280
<v Speaker 3>at where the administration has been taking stakes, it's really

0:05:25.320 --> 0:05:28.240
<v Speaker 3>in these industries that are critical to the national security.

0:05:29.240 --> 0:05:32.159
<v Speaker 3>It is about AI related, it is about the rare

0:05:32.240 --> 0:05:35.520
<v Speaker 3>earth's minerals. It is all about how do we go

0:05:35.600 --> 0:05:38.919
<v Speaker 3>and continue to take the lead in these critical sectors

0:05:39.000 --> 0:05:41.039
<v Speaker 3>Visa China and other bad actors.

0:05:41.160 --> 0:05:43.080
<v Speaker 2>How do you think this administration is done with respect

0:05:43.120 --> 0:05:46.160
<v Speaker 2>to messaging around affordability? This is something that has been

0:05:46.400 --> 0:05:48.880
<v Speaker 2>dogging the administration quite a bit. Now we're talking about

0:05:48.880 --> 0:05:52.080
<v Speaker 2>dolls and Christmas presents, but there's this issue of people

0:05:52.120 --> 0:05:54.640
<v Speaker 2>aren't feeling great even though the economy is chugging around.

0:05:55.360 --> 0:05:56.880
<v Speaker 2>What do you think, What do you think the Congress

0:05:56.880 --> 0:05:58.440
<v Speaker 2>should be doing? How do you think the president should

0:05:58.440 --> 0:05:59.320
<v Speaker 2>be messaging this? Well?

0:05:59.320 --> 0:06:02.719
<v Speaker 3>You know, it's interesting after the off year elections, one

0:06:02.800 --> 0:06:05.960
<v Speaker 3>of which was in my state of Virginia, and the

0:06:06.040 --> 0:06:10.320
<v Speaker 3>party didn't farewell, President was fairly nimble and ten days

0:06:10.400 --> 0:06:13.520
<v Speaker 3>later turning around and taking the steps he did in

0:06:14.839 --> 0:06:18.360
<v Speaker 3>lifting the tariffs on two hundred food items and which

0:06:18.520 --> 0:06:21.719
<v Speaker 3>directly impact people when they go into the grocery store

0:06:21.800 --> 0:06:25.440
<v Speaker 3>to look to prepare for the holiday meals, including not

0:06:25.800 --> 0:06:28.080
<v Speaker 3>just the things that we don't grow here, but like

0:06:28.160 --> 0:06:32.480
<v Speaker 3>beef right in Brazilian beef, And there's a real inflationary

0:06:32.680 --> 0:06:35.120
<v Speaker 3>pressure in the beef industry in this country. And I

0:06:35.160 --> 0:06:38.920
<v Speaker 3>think the administration took the steps necessary to provide the relief.

0:06:38.960 --> 0:06:40.799
<v Speaker 3>So I think you're going to see a lot more

0:06:41.120 --> 0:06:43.839
<v Speaker 3>accommodation in terms of that as we head into the

0:06:43.880 --> 0:06:47.239
<v Speaker 3>new year. And look, the President's also this is something

0:06:47.320 --> 0:06:50.040
<v Speaker 3>also very novel, David, back to your original point about

0:06:50.080 --> 0:06:52.920
<v Speaker 3>the kinds of things that administration's doing. He's talking about

0:06:52.960 --> 0:06:55.640
<v Speaker 3>a dividend from the tariffs. I mean, but that is

0:06:55.680 --> 0:07:00.159
<v Speaker 3>something directly related to the issue, Lisa, that you bring up,

0:07:00.800 --> 0:07:04.200
<v Speaker 3>and that is how is a presence supposed to bring

0:07:04.240 --> 0:07:06.080
<v Speaker 3>down prices when we're in a free market.

0:07:06.240 --> 0:07:07.440
<v Speaker 1>Don't have a whole lot of time left, but I

0:07:07.480 --> 0:07:09.920
<v Speaker 1>want to ask you about the prospects of the fiscal

0:07:09.920 --> 0:07:12.040
<v Speaker 1>stimulus in the new year from the tax bill. I

0:07:12.040 --> 0:07:13.800
<v Speaker 1>mean that the President talks about so much, maybe he

0:07:13.800 --> 0:07:16.000
<v Speaker 1>hasn't been focused enough sort of on the potential benefits

0:07:16.040 --> 0:07:18.400
<v Speaker 1>of that for ordinary Americans. How do you see that's

0:07:18.440 --> 0:07:19.480
<v Speaker 1>laying out in the year head.

0:07:19.320 --> 0:07:22.800
<v Speaker 3>Look on what's going on with AI and with cap

0:07:22.800 --> 0:07:27.160
<v Speaker 3>ax necessary to bring about this infrastructure, not just in

0:07:27.200 --> 0:07:29.480
<v Speaker 3>the data center piece and all that, but on the

0:07:29.640 --> 0:07:33.239
<v Speaker 3>power end of things. I mean, there is a tremendous

0:07:33.280 --> 0:07:36.800
<v Speaker 3>tailwind we're going to experience from the ability to completely

0:07:36.880 --> 0:07:41.680
<v Speaker 3>you know, write off the expense upfront. So you know,

0:07:41.760 --> 0:07:44.000
<v Speaker 3>I do think, and I think most economists will say,

0:07:44.080 --> 0:07:47.200
<v Speaker 3>there will be an uptick in terms of what that

0:07:47.280 --> 0:07:50.920
<v Speaker 3>will do to increase people's willingness to go and put capital.

0:07:50.600 --> 0:07:54.360
<v Speaker 2>To work by share. Eric Canter of Molus and Company,

0:07:54.440 --> 0:07:57.040
<v Speaker 2>also the former House majority leader, thank you so much

0:07:57.040 --> 0:07:57.960
<v Speaker 2>for being with us this morning.

0:07:58.360 --> 0:07:58.560
<v Speaker 3>Hollow