WEBVTT - How Labor Revisions Could Impact Equities 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.000 us live on YouTube. 0:00:27.200 --> 0:00:28.600 I'm a laddy with us right now. I had of 0:00:28.680 --> 0:00:32.479 active equity in Milwaukee with Allspring Global Investments. All the 0:00:32.600 --> 0:00:36.639 value heritage is strong over the decades as well. I'm 0:00:36.640 --> 0:00:39.320 going to cut to the chase people that like the 0:00:39.360 --> 0:00:43.879 New York Yankees, would kill for the adult responsibility of 0:00:43.920 --> 0:00:47.559 the Milwaukee Brewers. The Brewers are twenty three out of 0:00:47.640 --> 0:00:51.760 thirty in payroll. Their total payroll is less than Juan 0:00:51.920 --> 0:00:56.400 Soto or Aaron Judge make it's like the capital of Vailue. 0:00:56.920 --> 0:01:00.800 How do you get Milwaukee Brewer performance in the stock market. 0:01:01.440 --> 0:01:06.080 I'm you know, that's a great question, Tom, and we're 0:01:06.120 --> 0:01:09.080 working on it. I would say that's exactly where our 0:01:09.120 --> 0:01:14.080 managers are focused is outside of the meg seven and 0:01:14.240 --> 0:01:18.160 probably the popular areas of the market. We are continuing 0:01:18.240 --> 0:01:20.000 to search for where the value lies. 0:01:20.360 --> 0:01:21.080 Give me a sector. 0:01:21.360 --> 0:01:24.720 Yeah, from a sector standpoint, I think you know one 0:01:24.720 --> 0:01:29.440 of the most probably hated sectors has been healthcare. I 0:01:29.480 --> 0:01:33.280 think there are some real attractive areas in diagnostics in 0:01:33.319 --> 0:01:37.640 the tool space. I know there's been regulatory pressures and 0:01:37.760 --> 0:01:41.119 uncertainty and pharma and in healthcare services. 0:01:41.319 --> 0:01:44.240 Those are you know, less favorable areas for us. 0:01:44.520 --> 0:01:47.400 But as we think about change in the future, I 0:01:47.440 --> 0:01:50.200 think the diagnostics space looks pretty attractive. 0:01:50.200 --> 0:01:52.560 I mean, David, I got you and h off the bottom. 0:01:52.600 --> 0:01:55.400 What a train wreck that's been. It's up twenty eight 0:01:55.440 --> 0:01:58.320 it's up twenty eight percent off the bottom. It's not 0:01:58.400 --> 0:02:02.880 even anywhere near breaching resistance and doc talk. 0:02:02.760 --> 0:02:04.040 That I appreciate. That I appreciate. 0:02:04.080 --> 0:02:04.920 That's man. 0:02:04.960 --> 0:02:08.120 How should investors look at or think about valuation you 0:02:08.120 --> 0:02:10.000 mentioned just just a moment ago. What is it an 0:02:10.040 --> 0:02:12.239 indicator of How should they be thinking of it in 0:02:12.520 --> 0:02:13.519 this broader context. 0:02:13.600 --> 0:02:17.280 It's a great question, David, Like, look, when I look 0:02:17.320 --> 0:02:21.360 at just the market averages and valuation, it is not 0:02:21.520 --> 0:02:24.480 lost on me that we are near historic eyes on 0:02:24.600 --> 0:02:30.080 almost any valuation metric. But when you search underneath the 0:02:30.120 --> 0:02:34.440 broader markets and you look at relative value in certain 0:02:34.480 --> 0:02:39.280 sectors and certain areas, even market caps and different regions, 0:02:39.720 --> 0:02:43.320 there still are attractive areas, and that's what we're kind 0:02:43.360 --> 0:02:47.160 of looking for. And you know, it's not necessarily contrarian, 0:02:47.720 --> 0:02:52.560 it's just relative values to the overall market that appear 0:02:52.639 --> 0:02:57.760 to be you know, uh, hanging back and looking attractive 0:02:57.800 --> 0:02:58.400 to us. 0:02:58.680 --> 0:03:01.639 I'm very curious just how you were thinking about the 0:03:01.919 --> 0:03:05.120 policy picture, the background to all of this, and there 0:03:05.320 --> 0:03:07.960 was at the beginning of President Trump's second term a 0:03:07.960 --> 0:03:10.480 lot of anxiety and apprehension about the way this terist 0:03:10.520 --> 0:03:13.079 policy is can affect a lot of these companies. You've 0:03:13.080 --> 0:03:16.200 sifted through earning supports and listened to calls and thought 0:03:16.240 --> 0:03:18.800 through this. Now, with you know, a couple of months hindsight, 0:03:19.760 --> 0:03:22.520 what have we learned about how much weight these tariffs, 0:03:22.600 --> 0:03:24.720 this trade policy is actually having on a lot of 0:03:24.760 --> 0:03:25.399 these companies. 0:03:25.800 --> 0:03:28.880 I think we haven't seen the full effect yet. And 0:03:29.160 --> 0:03:31.120 when you listen to conference calls and when I talk 0:03:31.200 --> 0:03:36.520 to our portfolio managers, it's clear that company managements are 0:03:36.560 --> 0:03:38.480 still trying to figure it out. I think it's been 0:03:38.720 --> 0:03:40.080 less impactful than. 0:03:39.960 --> 0:03:41.440 They had thought it would be. 0:03:42.080 --> 0:03:45.280 But there's a timing issue right where you know, people 0:03:45.360 --> 0:03:49.280 built up inventory ahead of time. That inventory has been 0:03:49.320 --> 0:03:52.760 worked down. There's been pauses and tariffs along the way. 0:03:52.880 --> 0:03:56.520 Consumer behavior has adjusted for it as well, and so 0:03:57.080 --> 0:04:00.320 I think, you know, the jury's still out on how 0:04:00.360 --> 0:04:03.360 much impact they still have, but to your point, it's 0:04:03.400 --> 0:04:06.800 been less concerning than I would have believed it to be. 0:04:06.920 --> 0:04:09.200 How do you respond into Q three here and into 0:04:09.240 --> 0:04:11.520 Q four. I don't need to do the securitious analyst bit, 0:04:12.000 --> 0:04:14.520 but how do you respond to the idea that the 0:04:14.520 --> 0:04:18.919 growthiness stocks will grow the denominator and catch up to 0:04:19.000 --> 0:04:22.799 a value three years out, four years out, five years out. 0:04:22.839 --> 0:04:25.960 How do you respond to our new terminal value of 0:04:26.040 --> 0:04:26.680 Meg seven? 0:04:27.279 --> 0:04:35.640 You know, Tom is a great question, and look, we're 0:04:35.640 --> 0:04:36.200 doing all right. 0:04:37.800 --> 0:04:40.080 You know, it's the million dollar question in some ways 0:04:40.200 --> 0:04:45.039 because in where I've been wrong, in many cases we 0:04:45.120 --> 0:04:49.880 haven't been absent the Meg seven. But I had thought 0:04:50.800 --> 0:04:52.920 for some time that you'd have the rest of the 0:04:52.960 --> 0:04:56.160 market catch up sooner. And the reality is that the 0:04:56.200 --> 0:05:00.640 cash flow production from those Meg seven have been quite good. 0:05:01.839 --> 0:05:04.200 But the law of large numbers does come into play 0:05:04.320 --> 0:05:07.159 at a certain point, and we've seen some hiccups along 0:05:07.200 --> 0:05:11.760 the way capex. The capex cycle plays well. I think 0:05:11.800 --> 0:05:15.200 I saw a statistic too that said sixty percent of 0:05:15.240 --> 0:05:18.120 the revenue stream from the top ten names in the 0:05:18.160 --> 0:05:22.760 SNP come from AI and so they're very AI dependent. 0:05:22.880 --> 0:05:26.040 Okay, you got a stunning track record, and the Allspring 0:05:26.080 --> 0:05:28.880 Global Dividend Fund and at the top is in video 0:05:28.920 --> 0:05:33.400 Microsoft broadcame. The usual victims is, well you got you 0:05:33.400 --> 0:05:35.400 own a credit down below it's a global fund and 0:05:35.520 --> 0:05:39.600 Italian Bank? Are you levining in the m Meletti stacks 0:05:39.680 --> 0:05:41.880 into MEGS seven portfolios? 0:05:42.240 --> 0:05:44.160 I think that's exactly what you have to do. 0:05:44.240 --> 0:05:46.000 It's about risk versus reward. 0:05:46.200 --> 0:05:49.240 And while you don't want to be absent some of 0:05:49.240 --> 0:05:52.920 those names that do have strong fundamentals, including the Meg seven, 0:05:53.400 --> 0:05:57.479 you do have to diversify the risk, especially at this 0:05:57.680 --> 0:06:01.280 point in the market. The market, you know, is not 0:06:01.520 --> 0:06:06.080 priced or sorry, is price for perfection in some ways, 0:06:06.680 --> 0:06:09.920 and you know you want to diversify your risk and 0:06:10.240 --> 0:06:12.279 you have to do that. Outside of those names. 0:06:12.440 --> 0:06:15.080 Tom talks about levining, and I'm curious just how much 0:06:16.040 --> 0:06:20.560 dollar weakness is affecting the overall picture here, especially when 0:06:20.560 --> 0:06:22.880 you look at stocks like Tom brings up this Italian bank. 0:06:23.400 --> 0:06:26.600 Is it making stocks like that more appealing less appealing? 0:06:26.640 --> 0:06:26.800 Haws? 0:06:26.800 --> 0:06:29.840 It shapen your kind of wider aperture of investment now. 0:06:30.520 --> 0:06:34.600 You know, for certain, dollar weakness has been a tailwind 0:06:34.800 --> 0:06:38.640 for international and EM stocks, and it is a theme 0:06:38.760 --> 0:06:42.440 that we stressed late last year headed into this year 0:06:42.440 --> 0:06:45.080 that we believed that that would be the case, just 0:06:45.200 --> 0:06:49.479 given tariffs and other things that we could see coming. 0:06:50.600 --> 0:06:54.000 I don't think it's over. You could have a balance 0:06:54.000 --> 0:06:57.640 in the dollar. I would expect that to happen. But 0:06:57.920 --> 0:07:01.719 I do think the you know, the peak in terms 0:07:01.720 --> 0:07:05.240 of where the dollar has been is probably behind us, 0:07:05.520 --> 0:07:08.120 and you're going to see some of that tailwind continue 0:07:08.160 --> 0:07:10.120 for the EM in international space. 0:07:10.240 --> 0:07:12.840 And a Luddie thank us so much. Ahead of Milwaukee 0:07:12.840 --> 0:07:17.400 Brewer Baseball, Active Equity, all Spring Global, thank you so much. 0:07:17.760 --> 0:07:21.960 Stay with us. More from Bloomberg Surveillance coming up after this. 0:07:29.200 --> 0:07:32.800 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:07:32.880 --> 0:07:36.000 weekday afternoons from seven to ten am Eastern Listen on 0:07:36.120 --> 0:07:39.760 Applecarplay and Android Auto with the Bloomberg Business app, or 0:07:39.920 --> 0:07:41.440 watch us live on YouTube. 0:07:41.560 --> 0:07:45.640 Right now. It's important. Nancy Tangler talk talk talk people do. 0:07:46.200 --> 0:07:48.960 Nancy Tangler does it. Laugh for Tangler where she puts 0:07:49.040 --> 0:07:52.400 money to where you have the most twisted portfolio in 0:07:52.400 --> 0:07:57.000 your ETF up twenty four percent. You're getting nastagg response 0:07:57.240 --> 0:08:00.000 from a much more cautious portfolio. You have the tech 0:08:00.120 --> 0:08:04.840 company JP Morgan, the tech company ABV, the tech company RTX. 0:08:05.000 --> 0:08:08.040 Here's one home dpot it's you've got the room. We 0:08:08.120 --> 0:08:11.760 got the strangest portfolio going. How are you getting the 0:08:11.800 --> 0:08:16.840 results you're getting in tgl R If you don't own Nvidia. 0:08:17.320 --> 0:08:19.559 Thank you? That is this so kind? 0:08:19.880 --> 0:08:21.040 No, but I'm serious. 0:08:21.480 --> 0:08:24.560 Well, I own the poor man's Nvidia tom and that's Broadcom, 0:08:24.720 --> 0:08:26.400 and that's that's been a workhorse. 0:08:26.560 --> 0:08:28.720 So that's a secret is by the poor man's whatever. 0:08:28.920 --> 0:08:33.320 Yeah, and then Oracle the poor man's Hyperscaler. So we're 0:08:33.360 --> 0:08:35.840 focused on dividend growth in that portfolio. We have a 0:08:35.880 --> 0:08:38.800 growth portfolio that owns all the darlings like Nvidia, paths here, 0:08:38.840 --> 0:08:41.960 blah blah. But this strategy is a workhorse, and it's 0:08:42.040 --> 0:08:45.080 over the last ten years. It's just kind of thirteen 0:08:45.120 --> 0:08:47.040 and a half percent annualized with. 0:08:47.040 --> 0:08:48.080 Three bear markets. 0:08:48.520 --> 0:08:50.920 So I learned it from the great Tony Spare when 0:08:51.200 --> 0:08:53.320 Art Laffer owned a piece of our company, and we 0:08:53.320 --> 0:08:56.080 we just focus on valuation and then we do the 0:08:56.120 --> 0:08:57.440 work the research. 0:08:57.800 --> 0:09:00.920 You mentioned Oracle today a big day for announcing earnings 0:09:00.920 --> 0:09:02.760 after the bell. What are you looking for there? We 0:09:02.760 --> 0:09:05.960 were talking earlier just about the need for cloud computing 0:09:06.000 --> 0:09:10.040 because of AI, Lisa giving us a brief on a 0:09:10.120 --> 0:09:12.720 Dutch company that's doing business now with with with Microsoft. 0:09:13.160 --> 0:09:15.680 What does Oracle have to prove when it has that 0:09:15.760 --> 0:09:16.280 call today? 0:09:17.160 --> 0:09:20.839 They need to continue the sales growth projector hitting the numbers. Yeah, 0:09:20.880 --> 0:09:23.400 and they have a huge backlog, but the company is 0:09:23.720 --> 0:09:27.600 pretty spotty on hitting their numbers. So if we get 0:09:27.600 --> 0:09:29.520 a sell off, we've been trimming it back because it's 0:09:29.559 --> 0:09:31.640 become a huge part of our portfolio. If we get 0:09:31.679 --> 0:09:34.280 a sell off, we may step back in. But you know, 0:09:34.320 --> 0:09:38.480 it's it's it's the company that everyone loves to hate. 0:09:38.520 --> 0:09:41.760 And the CEO or now the chairman that everyone loves 0:09:41.760 --> 0:09:43.480 to hate. He lives where I live up in Lake 0:09:43.520 --> 0:09:48.080 Tahoe's he's something else. Second wealthiest man in the world. 0:09:48.320 --> 0:09:51.120 He's doing it right, Tom between this portfolio and the 0:09:51.160 --> 0:09:57.560 Tahoe residents, I feel, continued David. You mentioned the history 0:09:58.040 --> 0:09:59.680 the bear markets that we've had. Here we are in 0:09:59.679 --> 0:10:01.960 this book, and I wonder where you think we are 0:10:02.480 --> 0:10:05.440 in that as you survey this market today, as we 0:10:05.720 --> 0:10:07.480 note day in and day out, the records that we 0:10:07.559 --> 0:10:10.640 keep coming close to or hitting, your sense of how 0:10:10.679 --> 0:10:12.880 long that's likely to continue, and the indicators that you're 0:10:12.920 --> 0:10:15.200 looking to that we'll give you some sense of that. 0:10:15.880 --> 0:10:18.120 Yeah, So, David, I've drawn the analogy to the nineties 0:10:18.120 --> 0:10:21.000 when I was not just alive, but I was managing portfolios, 0:10:21.400 --> 0:10:23.480 and there are a lot of similarities. We had high 0:10:23.520 --> 0:10:26.640 inflation three percent, we had a higher ten year at 0:10:26.679 --> 0:10:28.960 seven to eight, and FED funds are eight five to six. 0:10:29.320 --> 0:10:32.240 So what we know is when productivity is driving growth, 0:10:32.679 --> 0:10:35.760 you can sustain robust stock price performance for some time. 0:10:36.200 --> 0:10:40.360 We're just young in this new bull market. The nineties 0:10:40.400 --> 0:10:42.600 had one hundred and twenty month expansion with over four 0:10:42.720 --> 0:10:45.640 hundred percent. But what's important to me is that we 0:10:45.679 --> 0:10:48.440 saw better than expected revenue last quarter. So the earnings 0:10:48.440 --> 0:10:52.040 were great, beat estimates, but revenue beat estimates. And then 0:10:52.080 --> 0:10:55.559 we're seeing cash flow free cash flow corporations at four 0:10:55.600 --> 0:10:58.880 trillion dollars. That's a historic eye margins at historic eyes. 0:10:59.160 --> 0:11:01.760 And then we've got the tailwind of the one big 0:11:01.800 --> 0:11:04.720 beautiful bill, we call it the Obabba bill at Laffer 0:11:04.760 --> 0:11:07.240 Tangler because I feel dumb calling it the one big 0:11:07.280 --> 0:11:11.480 beautiful but the tailwinds are huge for corporate cash float, 0:11:11.679 --> 0:11:14.680 tax savings, cash, and no one's talking about that. 0:11:14.720 --> 0:11:16.800 I want to get in trouble. I've had some wonderful 0:11:16.840 --> 0:11:21.520 conversations with Art Laugher. I think he's been criticized in 0:11:21.559 --> 0:11:26.600 an uninformed way. We've talked about the tangential dynamics first 0:11:26.600 --> 0:11:29.840 and second derivative, the acclaimed Laugher curve in that what 0:11:29.920 --> 0:11:34.400 does Laffer and what does Tangler think of Trump fiscal 0:11:34.559 --> 0:11:35.760 and monetary theory. 0:11:37.440 --> 0:11:43.760 So I think doctor Laffer is always diplomatic, and as 0:11:43.800 --> 0:11:48.839 a former member of not just Reagan but Nixon and 0:11:49.880 --> 0:11:53.439 an advisor to Trump one point zero, I think they're 0:11:53.440 --> 0:11:57.760 doing a lot of things correctly. But I hate this 0:11:58.040 --> 0:12:01.880 takeover of private sector company and doctor Laffer's come out 0:12:01.920 --> 0:12:03.880 and said, well, if anyone can do it, it's President Trump. 0:12:03.920 --> 0:12:05.880 And that may well be, but I think it's bad 0:12:05.920 --> 0:12:10.040 precedent and I think they're overstepping the executive. 0:12:10.040 --> 0:12:12.360 Then respond to the gloom crew that says there'll be 0:12:12.400 --> 0:12:16.160 a jump condition where the smooth curves of our equity 0:12:16.200 --> 0:12:21.160 bolishness break. How do you invest given the shock potential 0:12:21.800 --> 0:12:23.800 of a Trump policy gone wrong. 0:12:24.480 --> 0:12:26.160 Well, we'll do what we did in April. 0:12:26.480 --> 0:12:27.240 We'll buy more. 0:12:27.559 --> 0:12:31.160 So were you know we were stepping in on April third, 0:12:31.240 --> 0:12:35.400 April first, and March. Because you see these dislocations and 0:12:35.440 --> 0:12:38.079 you say it is the AI trade over, it isn't. 0:12:38.160 --> 0:12:40.160 I've heard so many people say, oh, well there's that 0:12:40.320 --> 0:12:41.160 MIT study. 0:12:41.880 --> 0:12:43.280 Nobody's making money with AI. 0:12:43.520 --> 0:12:45.440 That is not what we're hearing from the companies on 0:12:45.480 --> 0:12:49.360 the conference calls. We're seeing margin expansion, We're seeing less hiring, 0:12:49.559 --> 0:12:53.960 which I think is a paradigm shift that is distorting. 0:12:53.440 --> 0:12:55.520 Things like the ism manufacturing numbers. 0:12:55.679 --> 0:12:57.040 David, get one more in here. But I want to 0:12:57.040 --> 0:12:59.280 make this clear, folks. People look at Nancy Tangler and 0:12:59.280 --> 0:13:02.640 they're like, she's out at Lake Tihoe like a starter home. 0:13:02.679 --> 0:13:07.080 Your homestead is like twelve million dollars and she's retired. 0:13:07.280 --> 0:13:09.680 How many hours a day are you working? Me? I 0:13:09.760 --> 0:13:11.199 work about twelve to fourteen. 0:13:12.080 --> 0:13:14.920 She's as nuts as she was, or she was, or 0:13:16.160 --> 0:13:19.959 he's nuts. Eighty five says he's going to live to 0:13:19.960 --> 0:13:21.000 one hundred and thirty. 0:13:21.800 --> 0:13:23.800 I can't resist going back to something you said, which 0:13:23.840 --> 0:13:25.800 is that you are wary of or you don't like 0:13:25.880 --> 0:13:27.520 the fact that the government is getting involved with these 0:13:27.520 --> 0:13:29.840 private companies. What does it mean as you sort of 0:13:29.840 --> 0:13:32.400 think through the ramifications of this, If you have the 0:13:32.480 --> 0:13:35.160 US government taking a stake in, say in Intella, what 0:13:35.200 --> 0:13:38.600 does that do to your or an investor's appetite for 0:13:38.640 --> 0:13:40.720 that company? Does it provide a sense of security that 0:13:40.720 --> 0:13:44.000 the US government is getting involved? When you hear doctor 0:13:44.040 --> 0:13:47.559 Hassett saying this could happen with other companies and other sectors, 0:13:48.160 --> 0:13:50.000 how does it sort of shape your outlook knowing that 0:13:50.040 --> 0:13:51.840 this might be something that would be more regular than 0:13:51.960 --> 0:13:54.319 certainly it has been before you got to study history. 0:13:54.520 --> 0:13:56.040 I mean, I was, I was alive. 0:13:56.120 --> 0:13:58.520 I wasn't managing money when the Chrysler deal where we 0:13:58.559 --> 0:14:00.439 bailed them out for a billion and a half Jimmy 0:14:00.480 --> 0:14:02.920 Carter nineteen seventy nine. Then we had to bail them 0:14:02.920 --> 0:14:05.600 out again, and that was in two thousand and eight, 0:14:05.640 --> 0:14:07.400 two thousand and nine for twelve and a half minens. 0:14:07.559 --> 0:14:10.280 It doesn't work and there's nothing in it for the taxpayer. 0:14:10.360 --> 0:14:13.440 So what happened to Intel shareholders? They got diluted. The 0:14:13.480 --> 0:14:17.400 government also has warrants, so that could further deleute them 0:14:17.760 --> 0:14:18.760 and they have no business. 0:14:18.760 --> 0:14:19.640 They're not good at it. 0:14:20.120 --> 0:14:23.280 Obama Clindra, I mean, I don't know what else to say, 0:14:23.360 --> 0:14:26.440 but bad, bad policy, very bad answer. 0:14:26.480 --> 0:14:28.800 Don't be a stranger. Nancy Tangler. Thanks so I can 0:14:28.840 --> 0:14:32.000 see the remote. She'll do a remote like in January, 0:14:32.040 --> 0:14:33.920 will be out in her Dad love that before we 0:14:34.000 --> 0:14:37.320 too below zero. Nancy Tanglar, thank you so much. Huge 0:14:37.360 --> 0:14:41.720 performance out of some of her ETF portfolio's. Check that out. 0:14:41.840 --> 0:14:46.000 Stay with us. More from Bloomberg Surveillance coming up after this. 0:14:53.240 --> 0:14:56.840 You're listening to the Bloomberg Surveillance podcast. Catch US live 0:14:56.920 --> 0:14:59.880 weekday afternoons from seven to ten am e's durn Listen 0:15:00.040 --> 0:15:03.560 on Applecarplay and Android Otto with the Bloomberg Business app, 0:15:03.720 --> 0:15:05.440 or watch US live on YouTube. 0:15:05.680 --> 0:15:08.880 Joining us from Trinity the PhD in economics, Colin, how 0:15:08.960 --> 0:15:12.440 would you like to chime in, sir? On US economic data? 0:15:12.680 --> 0:15:16.200 We avoid the US is at a very instant juncture. 0:15:16.200 --> 0:15:20.280 You obviously have an increase in inflation pressures, the signs 0:15:20.280 --> 0:15:22.520 of the labor market is weakening. So this is a 0:15:23.000 --> 0:15:25.920 uncomfortable moment for policymakers. I suspect We're welcome you. 0:15:25.960 --> 0:15:28.640 From Allied Irish Bank. Colin Hunt with us here and 0:15:28.680 --> 0:15:31.560 of course with all of his trinity economics. Let's first 0:15:31.600 --> 0:15:35.000 identify AIB right now. Is is safe to say you're 0:15:35.080 --> 0:15:38.120 owned by the Irish government. How do you answer that question? 0:15:39.200 --> 0:15:40.440 We were owned by the Irish government. 0:15:40.520 --> 0:15:44.320 The Irish government came to our rescue post to the GFC, 0:15:45.000 --> 0:15:47.720 and for a period of about fifteen years, the Irish 0:15:47.720 --> 0:15:50.720 government had a presence on our share register. And in 0:15:51.000 --> 0:15:55.600 June just gone, we marked the Irish government's exit. And 0:15:55.720 --> 0:15:59.960 once again the organization is one hundred percent privately owned. 0:16:00.400 --> 0:16:02.360 And in fact one of the reasons that I'm here 0:16:02.640 --> 0:16:06.680 this week with the Barclay's Financials Conference yesterday and meeting 0:16:06.680 --> 0:16:09.320 a lot of our investors. Most of our very significant 0:16:09.360 --> 0:16:11.280 investors are based here in the United States. 0:16:11.280 --> 0:16:13.240 Well, this is very important. We'd like to have some 0:16:13.320 --> 0:16:16.600 news here. Jennifer Dugan's waiting in Dublin for this. Can 0:16:16.640 --> 0:16:19.160 we suggest that there would be some form of public 0:16:19.240 --> 0:16:22.840 offering of shares of Allied Irish Bank in the coming 0:16:22.920 --> 0:16:25.600 weeks quarters Can you make an announcement today? 0:16:25.800 --> 0:16:28.360 There's certainly no announcement to be made because we are 0:16:28.360 --> 0:16:31.560 a we're one hundred percent free floating at this stage. 0:16:31.600 --> 0:16:36.120 So the government has exited the register. They came to 0:16:36.160 --> 0:16:39.040 our rescue with about twenty almost twenty one billion euro. 0:16:39.360 --> 0:16:42.240 We repaid that and now we are one hundred percent 0:16:42.280 --> 0:16:42.880 privately owned. 0:16:42.920 --> 0:16:45.800 This started well, it started very well, doctor, How do 0:16:45.840 --> 0:16:48.200 you give us some perspective ons of the appetite for 0:16:48.440 --> 0:16:51.080 cross border transactions at this point in time. So here 0:16:51.080 --> 0:16:53.520 we're living this day in day out, the ambiguity or 0:16:53.600 --> 0:16:58.360 uncertainty about trade policy and economic policy. More broadly, what 0:16:58.440 --> 0:17:01.160 do companies domiciled outside of the United States think of 0:17:01.200 --> 0:17:03.720 this environment and how's that affecting business as you see it? 0:17:04.800 --> 0:17:06.840 Well, I suppose the environment we had a period of 0:17:06.880 --> 0:17:10.280 uncertainty earlier on this year, very very warmly welcomed the 0:17:10.280 --> 0:17:12.479 fact that we have come to an agreement between President 0:17:12.520 --> 0:17:16.040 Trump and President vonder lyin which was announced in Scotland 0:17:16.080 --> 0:17:19.000 a few weeks ago. Businesses, you know, hates uncertainty. We 0:17:19.119 --> 0:17:20.120 have certainty. 0:17:20.160 --> 0:17:20.440 Now. 0:17:21.119 --> 0:17:24.000 Would you pick a twer level of fifteen percent? You 0:17:24.000 --> 0:17:25.679 wouldn't necessarily, but that's the reality. 0:17:25.720 --> 0:17:26.439 That's what we're dealing with. 0:17:26.440 --> 0:17:30.280 And at least the uncertainty now has been has been eliminated. 0:17:31.000 --> 0:17:33.240 The United States is a hugely important market for Arland, 0:17:34.040 --> 0:17:37.560 not only as a source for our exports, but also 0:17:37.920 --> 0:17:41.399 as a place where Irish businesses invests. So typically Irish 0:17:41.400 --> 0:17:46.120 businesses when they outgrow a market that is growing quite 0:17:46.200 --> 0:17:48.560 robustly but still quite small, they typically go to the 0:17:48.640 --> 0:17:51.359 UK first and then they go to the United States. 0:17:51.760 --> 0:17:55.479 So that was the path we followed. We've been here 0:17:55.520 --> 0:17:59.359 in New York for fifty years this year and we 0:17:59.440 --> 0:18:02.000 still a way through the crisis we maintained and all 0:18:02.040 --> 0:18:04.399 the way through our period of government ownership, we maintained 0:18:04.440 --> 0:18:05.719 our physical presidence here. 0:18:06.280 --> 0:18:07.840 It's a really important. 0:18:07.440 --> 0:18:09.520 Place from us from an investment perspective, but it's also 0:18:09.520 --> 0:18:13.359 a really important country for deployment of our loan book. 0:18:13.480 --> 0:18:16.000 And of course other Irish businesses followed us as well, 0:18:16.119 --> 0:18:18.960 So you have the likes of c RH, the likes 0:18:18.960 --> 0:18:23.600 of Smurfoot, WestRock, the likes of Kerry Group, all having very. 0:18:23.440 --> 0:18:25.400 Significant exposures to the United States. 0:18:25.640 --> 0:18:28.440 Notwithstanding the uncertainty we had earlier this year, it's still 0:18:28.520 --> 0:18:32.000 a hugely important market and it's a hugely important provider 0:18:32.040 --> 0:18:32.800 of external capital. 0:18:33.160 --> 0:18:36.760 How is the Irish economy doing today when you look 0:18:36.800 --> 0:18:39.840 at the housing market, commercial investments through what's the relative 0:18:39.840 --> 0:18:42.520 health of the Irish economy in twenty twenty five. 0:18:42.520 --> 0:18:46.120 College is doing quite well. Like Irish GDP numbers. 0:18:46.680 --> 0:18:50.200 Because of the scale of the international sector in the 0:18:50.240 --> 0:18:53.520 economy can be wild and volatile, so we tend not 0:18:53.560 --> 0:18:55.840 to look at GDP. We tend to look at modified 0:18:55.880 --> 0:18:58.440 domestic demand. So this year we're talking about growth summer 0:18:58.480 --> 0:19:00.840 of the order about two point three two five percent 0:19:00.880 --> 0:19:05.840 in real terms, unemployment about four percent, and total employment 0:19:06.040 --> 0:19:08.159 in the state now running a two point eight million. 0:19:08.520 --> 0:19:10.800 That sounds small, but when I was in college all 0:19:10.880 --> 0:19:14.000 those many many years ago, thirty five years ago, so we. 0:19:13.920 --> 0:19:15.400 Had one million people at work. 0:19:15.640 --> 0:19:19.000 So this is an economy usherly transformed right and now 0:19:19.040 --> 0:19:20.160 one of the best of forming in Europe. 0:19:20.200 --> 0:19:22.440 Colin hunt with us with the aled Irish Bank, and 0:19:22.520 --> 0:19:25.920 we continue. We're commercial free with you across America, in 0:19:25.960 --> 0:19:29.160 Ireland and around the world. Here is through this important 0:19:29.160 --> 0:19:33.480 economic report. In fourteen minutes ed Ludlow's schedule to be 0:19:33.560 --> 0:19:36.480 with us here in a bit on the important Apple meetings. 0:19:36.600 --> 0:19:38.840 I was talking with Olivia Fletcher. She calls me up. 0:19:38.840 --> 0:19:41.720 Olivia calls Kay, she just did I wait you It's 0:19:41.800 --> 0:19:46.040 three am. I'm like Olivia tiny hey, Colin, I got 0:19:46.080 --> 0:19:49.359 like an hour conversation with you, and I think frankly 0:19:49.440 --> 0:19:52.480 President Trump could have an hour conversation with you. Let's 0:19:52.520 --> 0:19:58.119 talk about this strange corporate boom in Dublin and the 0:19:58.200 --> 0:20:02.880 fact that people sophisticated Blackstone are literally giving the keys 0:20:02.960 --> 0:20:06.680 back and office buildings. What is the state of commercial 0:20:06.720 --> 0:20:11.280 real estate and, as you say, a completely rebuilt Irish acanemy. 0:20:11.760 --> 0:20:15.480 So the commercial real estate market had a very good run, 0:20:15.880 --> 0:20:18.560 and then once we had the turn in the official 0:20:18.640 --> 0:20:21.160 rate cycle, you began to see valuations coming back. 0:20:21.440 --> 0:20:22.000 Quite a bit. 0:20:22.880 --> 0:20:25.800 Of course, you had the COVID impact and the impact 0:20:25.840 --> 0:20:30.640 on commercial valuations because of working from home that would 0:20:30.680 --> 0:20:33.160 have added it led to a dumbward adjustment as well. 0:20:33.200 --> 0:20:35.520 But we have seen quite a different step back in 0:20:35.600 --> 0:20:38.439 valuation market clearing. I think the market is clearing, and 0:20:38.440 --> 0:20:42.520 certainly we're beginning to see signs of people of higher 0:20:42.560 --> 0:20:45.600 degrees of interest in the market. There are trades taking place. 0:20:46.400 --> 0:20:49.719 The valuation adjustment seems to be behind us. If anything, 0:20:49.720 --> 0:20:51.480 I would have expected that to happen a little bit 0:20:51.520 --> 0:20:54.320 earlier because of the turn in the rate cycle. 0:20:54.400 --> 0:20:56.000 But I do think we are at the bottom of 0:20:56.000 --> 0:20:56.639 the cycling through it. 0:20:56.640 --> 0:20:59.200 A related question, perhaps closer to home. I'm wondering what 0:20:59.240 --> 0:21:01.520 your office is are are looking like. I remember reading 0:21:02.000 --> 0:21:04.200 you're trying to get employees back three days a week. 0:21:04.520 --> 0:21:06.120 Some pushback to that, as I know, there was here 0:21:06.119 --> 0:21:08.320 in the States with a number of financial institutions and 0:21:08.640 --> 0:21:10.639 other businesses. Here we are at the end of the 0:21:10.680 --> 0:21:13.600 summer looking to the fall. Where does that process stand? 0:21:13.600 --> 0:21:15.399