1 00:00:02,520 --> 00:00:07,000 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:09,800 --> 00:00:13,119 Speaker 2: This is your weekly Washington policy Pulse, the Balance of 3 00:00:13,200 --> 00:00:17,640 Speaker 2: Power Podcast. I'm Joe Matthew. Every Monday, Bloomberg Intelligence, senior 4 00:00:17,680 --> 00:00:20,759 Speaker 2: policy analyst and friend of the show, Nathan Dean shares 5 00:00:20,800 --> 00:00:24,160 Speaker 2: his weekly call on upcoming catalysts in the nation's capital. 6 00:00:24,680 --> 00:00:27,320 Speaker 2: Listen for the most recent and relevant policy research from 7 00:00:27,360 --> 00:00:30,840 Speaker 2: our team at Bloomberg Intelligence. Now with today's installment, here's 8 00:00:30,920 --> 00:00:31,520 Speaker 2: Nathan Dean. 9 00:00:32,320 --> 00:00:34,800 Speaker 3: Good morning and good afternoon everybody. 10 00:00:34,800 --> 00:00:35,720 Speaker 4: My name is Nathan Dean. 11 00:00:35,760 --> 00:00:38,279 Speaker 3: I'm a senior policy and host at Bloomberg Intelligence here 12 00:00:38,320 --> 00:00:39,640 Speaker 3: in the Washington, DC Bureau. 13 00:00:39,800 --> 00:00:41,320 Speaker 4: I want to say thank you for joining. 14 00:00:41,159 --> 00:00:44,720 Speaker 3: The BI Washington Policy polse, especially here on March second, 15 00:00:45,120 --> 00:00:47,440 Speaker 3: a couple of days after the United States and Iran 16 00:00:47,840 --> 00:00:51,120 Speaker 3: and now are in conflict, open conflict. And thank you 17 00:00:51,159 --> 00:00:52,600 Speaker 3: to those of you who are joining us via the 18 00:00:52,600 --> 00:00:55,640 Speaker 3: Balance of Power Podcast. We always appreciate you listening in, 19 00:00:55,680 --> 00:00:57,800 Speaker 3: and you know, if you ever have any questions or 20 00:00:57,840 --> 00:01:00,040 Speaker 3: any comments or anything that we talk about in this 21 00:01:00,080 --> 00:01:02,200 Speaker 3: call you need a little deeper dive, feel free to 22 00:01:02,240 --> 00:01:05,800 Speaker 3: reach out. My email is nd ten at Bloomberg dot net. 23 00:01:06,160 --> 00:01:07,880 Speaker 3: So joining me on the call today is our senior 24 00:01:07,880 --> 00:01:12,880 Speaker 3: defense analyst, Wayne Sanders. Wayne just actually is spent many, 25 00:01:12,880 --> 00:01:16,160 Speaker 3: many many years in the US arm Services, so he 26 00:01:16,280 --> 00:01:18,160 Speaker 3: will be a good person to talk to you today. 27 00:01:18,440 --> 00:01:20,920 Speaker 3: Please feel free our clients and friends use the chat 28 00:01:20,920 --> 00:01:23,840 Speaker 3: function the you know, both the Q and A and 29 00:01:24,000 --> 00:01:26,200 Speaker 3: or the chat if you'd like to ask questions, we'll 30 00:01:26,200 --> 00:01:26,800 Speaker 3: get them to you. 31 00:01:26,959 --> 00:01:30,479 Speaker 4: So, Wayne, can you. 32 00:01:30,480 --> 00:01:32,800 Speaker 3: Just tell us what are your initial thoughts at a 33 00:01:32,840 --> 00:01:36,360 Speaker 3: high level of what happened over the weekend with a focus. 34 00:01:36,440 --> 00:01:39,119 Speaker 3: I know that you're focusing on the defense contractors. You know, 35 00:01:39,520 --> 00:01:41,200 Speaker 3: where do you see this conflict going? 36 00:01:41,800 --> 00:01:42,840 Speaker 4: And you know, just. 37 00:01:43,080 --> 00:01:45,160 Speaker 3: Essentially just lay it all down, man, just tell us 38 00:01:45,200 --> 00:01:45,760 Speaker 3: what you're thinking. 39 00:01:46,720 --> 00:01:48,440 Speaker 1: Sounds good, Thanks Nathan, Thanks for having me. 40 00:01:49,000 --> 00:01:49,240 Speaker 4: Yeah. 41 00:01:49,280 --> 00:01:51,360 Speaker 1: So when you when you look at this, the the 42 00:01:51,440 --> 00:01:54,960 Speaker 1: amount of military firepower that was brought forward during these 43 00:01:54,960 --> 00:01:58,600 Speaker 1: strikes was was was very telling obviously right that this 44 00:01:58,680 --> 00:02:03,200 Speaker 1: is these are pre Iraq war numbers. In terms of 45 00:02:03,240 --> 00:02:06,280 Speaker 1: the build up, one hundred and twenty plus US aircraft, 46 00:02:06,360 --> 00:02:09,680 Speaker 1: two hundred Israeli aircraft. Over the weekend, over a thousand 47 00:02:09,760 --> 00:02:12,560 Speaker 1: military targets were struck. Most of the focus there was 48 00:02:12,600 --> 00:02:16,840 Speaker 1: on leadership, air defense launchers, missiles, as well as military 49 00:02:16,880 --> 00:02:20,240 Speaker 1: command and control killed. So far, we know Supreme Leader 50 00:02:20,280 --> 00:02:23,800 Speaker 1: Iotola Kamanee as well as the IRGC commander Chief of 51 00:02:23,800 --> 00:02:27,080 Speaker 1: the Armed Forces was killed, as well as over forty 52 00:02:27,120 --> 00:02:32,040 Speaker 1: eight additional senior Iranian officials were also killed. So from 53 00:02:32,880 --> 00:02:35,840 Speaker 1: a military power vacuum perspective and all that, this was 54 00:02:36,000 --> 00:02:39,679 Speaker 1: a fairly successful campaign by US and Israel to be 55 00:02:39,720 --> 00:02:41,800 Speaker 1: able to do that. The focus on the air defense 56 00:02:41,880 --> 00:02:45,680 Speaker 1: becomes very very key obviously because it provided air superiority 57 00:02:45,720 --> 00:02:50,200 Speaker 1: for US and Israeli aircraft, specifically F twenty two s, 58 00:02:50,240 --> 00:02:53,840 Speaker 1: which is a suppression of enemy air defense capability. You 59 00:02:53,919 --> 00:02:59,200 Speaker 1: have F fifteen strike Eagles, which are a deep stride capability, 60 00:02:59,240 --> 00:03:01,560 Speaker 1: and then you have your air dominance with your F 61 00:03:01,639 --> 00:03:05,160 Speaker 1: thirty five's and your F sixteens. So from right there alone, 62 00:03:05,200 --> 00:03:08,520 Speaker 1: you're really looking at the defense primes, especially tied in 63 00:03:08,600 --> 00:03:11,840 Speaker 1: with these aircraft platforms being key. It's also showing the 64 00:03:11,880 --> 00:03:14,920 Speaker 1: proof and the mustard for those. You also have to 65 00:03:14,919 --> 00:03:17,120 Speaker 1: build up of the Navy, which provided a lot of 66 00:03:17,360 --> 00:03:21,120 Speaker 1: air defense capability as well, with like RTX SM six's 67 00:03:21,160 --> 00:03:25,040 Speaker 1: and the SM twos that are on board those as well. 68 00:03:25,200 --> 00:03:27,920 Speaker 1: What we've seen from Iran coming back is more of 69 00:03:28,960 --> 00:03:32,160 Speaker 1: a distributed attack methodology, unlike what they were doing in 70 00:03:32,440 --> 00:03:38,240 Speaker 1: the Israeli Iran conflict twelve Day conflict specifically, because they're 71 00:03:38,240 --> 00:03:41,640 Speaker 1: now going out and hitting different targets instead of focusing 72 00:03:41,760 --> 00:03:45,520 Speaker 1: specific volleys all on one targets. It's more of what 73 00:03:45,600 --> 00:03:48,040 Speaker 1: the military refers to as a spray and pay, spray 74 00:03:48,040 --> 00:03:51,840 Speaker 1: and prey mentality. And the reason why they're doing part 75 00:03:51,880 --> 00:03:53,520 Speaker 1: of that is because they're very limited on number of 76 00:03:53,600 --> 00:03:56,000 Speaker 1: launchers that are left. US n COM beliefs is between 77 00:03:56,040 --> 00:03:58,840 Speaker 1: one hundred and one hundred and fifty launchers left in 78 00:03:58,920 --> 00:04:03,800 Speaker 1: potentially around fifteen one hundred missiles left within Iran's stockpiles 79 00:04:03,840 --> 00:04:07,240 Speaker 1: to be able to affect an impact. That becomes a 80 00:04:07,320 --> 00:04:09,839 Speaker 1: key key point then, because that is the area where 81 00:04:09,880 --> 00:04:12,640 Speaker 1: we're actually where the US and Israel are targeting that 82 00:04:12,680 --> 00:04:16,440 Speaker 1: you're focusing on these specifically, we haven't seen as much 83 00:04:16,440 --> 00:04:19,320 Speaker 1: on the proxies that over the weekend that we thought 84 00:04:19,320 --> 00:04:21,680 Speaker 1: we would see. It's still something that's up there in 85 00:04:21,760 --> 00:04:26,080 Speaker 1: terms of options for surges and proxy activities from hesbalah 86 00:04:26,160 --> 00:04:30,600 Speaker 1: Hamas and higher GC backed militias in the region. For that, 87 00:04:30,920 --> 00:04:34,360 Speaker 1: we have seen threats to the straits and horror moves, 88 00:04:34,400 --> 00:04:36,320 Speaker 1: but we have not seen any type of mining or 89 00:04:36,320 --> 00:04:39,560 Speaker 1: anything of that nature within those areas, and we have 90 00:04:39,640 --> 00:04:43,000 Speaker 1: unconfirmed reports yet in terms of what Iranian you know, 91 00:04:43,080 --> 00:04:44,680 Speaker 1: cyber attacks are going to be able to do on that. 92 00:04:45,520 --> 00:04:47,640 Speaker 3: Have you heard anything from the White House or the 93 00:04:47,640 --> 00:04:50,440 Speaker 3: Defense Department that suggests about an endgame of where the 94 00:04:50,480 --> 00:04:53,080 Speaker 3: timing on this goes. Because President Trump was saying four 95 00:04:53,080 --> 00:04:55,800 Speaker 3: to five weeks, you know, Secretary Hegseth said in his 96 00:04:55,880 --> 00:04:58,320 Speaker 3: press conference this morning something similar. You know, what's your 97 00:04:58,320 --> 00:04:59,080 Speaker 3: thought on the timing. 98 00:04:59,640 --> 00:05:01,760 Speaker 1: Yeah, you know, they're putting out four to five weeks, 99 00:05:01,760 --> 00:05:04,800 Speaker 1: and I would like to believe that they're actually pushing. 100 00:05:04,839 --> 00:05:06,599 Speaker 1: You know, they're going to say that publicly, But where 101 00:05:06,640 --> 00:05:08,159 Speaker 1: I think they're really pushing is they want to have 102 00:05:08,200 --> 00:05:11,200 Speaker 1: this thing done within within two weeks max. And the 103 00:05:11,240 --> 00:05:14,720 Speaker 1: biggest reason why is the farther it gets pushed. Obviously, 104 00:05:14,760 --> 00:05:16,200 Speaker 1: they let you know, they're not going to take their 105 00:05:16,240 --> 00:05:19,080 Speaker 1: foot off the gas. They're not going to allow Iran 106 00:05:19,160 --> 00:05:22,080 Speaker 1: to take a breath. But they need to be able 107 00:05:22,120 --> 00:05:24,440 Speaker 1: to do as much of this as possible right up front, 108 00:05:24,560 --> 00:05:27,320 Speaker 1: just based off of our own US docpiles. You know, 109 00:05:27,400 --> 00:05:31,920 Speaker 1: you still have readiness concerns for our number of munitions. 110 00:05:32,240 --> 00:05:34,520 Speaker 1: You look at the replenishment rate for a lot of 111 00:05:34,560 --> 00:05:37,200 Speaker 1: our capability and all that, normally it's in the hundreds. 112 00:05:37,320 --> 00:05:40,720 Speaker 1: If you look at PAC three interceptors somewhere between, you know, 113 00:05:40,760 --> 00:05:44,240 Speaker 1: five fifty to seven hundred Pack three interceptors per year. Well, 114 00:05:44,240 --> 00:05:47,000 Speaker 1: if we use over seven hundred of those, you've now 115 00:05:47,040 --> 00:05:49,479 Speaker 1: lost year's worth of supply. So as we try and 116 00:05:49,520 --> 00:05:53,080 Speaker 1: look forward to a potential China Taiwan contingency in twenty 117 00:05:53,120 --> 00:05:56,320 Speaker 1: twenty seven or beyond any other global contingencies, they want 118 00:05:56,360 --> 00:05:57,760 Speaker 1: to make sure that they have as many of those 119 00:05:57,800 --> 00:05:59,800 Speaker 1: as possible. But what they're not willing to do is 120 00:05:59,800 --> 00:06:01,479 Speaker 1: they are not willing to take their foot off the 121 00:06:01,480 --> 00:06:03,960 Speaker 1: gas here and allow Iran to breathe and look at 122 00:06:04,000 --> 00:06:06,600 Speaker 1: somewhere else because they're not trying to put boots on 123 00:06:06,640 --> 00:06:08,520 Speaker 1: the ground. This is going to continue to remain an 124 00:06:08,560 --> 00:06:12,800 Speaker 1: aerial campaign as well as naval strike capability, which obviously 125 00:06:12,839 --> 00:06:15,919 Speaker 1: puts defense contractors that are tied in general dynamics, electric 126 00:06:15,920 --> 00:06:19,400 Speaker 1: boat huntings and angles and others in their suppliers for 127 00:06:19,520 --> 00:06:21,920 Speaker 1: a lot of the naval platforms, and then obviously RTX 128 00:06:21,960 --> 00:06:26,680 Speaker 1: Lockheed and Northrop for not only the aerial platforms, but 129 00:06:26,760 --> 00:06:30,000 Speaker 1: also then the munitions they're using in great numbers at 130 00:06:30,040 --> 00:06:30,600 Speaker 1: this point. 131 00:06:30,760 --> 00:06:33,360 Speaker 3: Can and this is a simple question, but candid defense 132 00:06:33,400 --> 00:06:37,000 Speaker 3: contractors increase production to the point where things will change 133 00:06:37,000 --> 00:06:39,679 Speaker 3: for them or are they sort of sticky in terms. 134 00:06:39,480 --> 00:06:40,920 Speaker 4: Of how many they can produce per year. 135 00:06:41,400 --> 00:06:43,960 Speaker 1: Yeah, They're definitely sticky with how many they can produce 136 00:06:44,000 --> 00:06:45,840 Speaker 1: per year. You've already seen a ramp up right now. 137 00:06:45,880 --> 00:06:47,839 Speaker 1: The DD has put the demand signal out there for 138 00:06:47,920 --> 00:06:52,000 Speaker 1: two x to four x from a munitions production perspective, 139 00:06:52,080 --> 00:06:54,480 Speaker 1: you saw Lockey get the nine point eight billion dollar 140 00:06:55,240 --> 00:06:58,640 Speaker 1: munitions deal for pack free interceptors. But from the ramp 141 00:06:58,720 --> 00:07:00,560 Speaker 1: up perspective, they can only do that based off of 142 00:07:00,600 --> 00:07:03,520 Speaker 1: the production lines. That can only expand those production lines 143 00:07:03,600 --> 00:07:06,039 Speaker 1: so fast. And if you're looking at it right now 144 00:07:06,080 --> 00:07:08,560 Speaker 1: in terms of we're one year out or even less 145 00:07:08,560 --> 00:07:11,640 Speaker 1: than a year out from a potential continuency within twenty 146 00:07:11,680 --> 00:07:13,800 Speaker 1: twenty seven, it really asks the question as to how 147 00:07:13,840 --> 00:07:16,239 Speaker 1: many do you want to expend now at the expensive 148 00:07:16,280 --> 00:07:19,480 Speaker 1: military readiness for a twenty twenty seven scenario. I think 149 00:07:19,520 --> 00:07:21,640 Speaker 1: the defense industrial base is going in the right direction 150 00:07:21,680 --> 00:07:23,600 Speaker 1: to be able to fix this problem for the future, 151 00:07:23,640 --> 00:07:25,520 Speaker 1: but I think it's more of a twenty twenty nine, 152 00:07:25,640 --> 00:07:28,960 Speaker 1: twenty thirty solution at this point in time in terms 153 00:07:28,960 --> 00:07:29,960 Speaker 1: of what we can actually throw. 154 00:07:29,800 --> 00:07:30,160 Speaker 4: At them now. 155 00:07:30,560 --> 00:07:32,080 Speaker 3: So the last question, I'm going to ask you to 156 00:07:32,120 --> 00:07:34,040 Speaker 3: take your Bloomberg head off and put on your former 157 00:07:34,160 --> 00:07:34,600 Speaker 3: army hat. 158 00:07:34,800 --> 00:07:36,520 Speaker 4: And this is a load of questions. 159 00:07:36,520 --> 00:07:39,200 Speaker 3: So obviously, if there's no good answer here, just say 160 00:07:39,360 --> 00:07:42,680 Speaker 3: we don't have a good answer. But I'm curious, what 161 00:07:42,720 --> 00:07:46,480 Speaker 3: do you think the White House's objectives are for this? 162 00:07:46,680 --> 00:07:49,720 Speaker 3: Because President Trump spent some time over the weekend talking 163 00:07:49,720 --> 00:07:52,000 Speaker 3: about objectives and I was just curious, what do you 164 00:07:52,000 --> 00:07:53,080 Speaker 3: think those objectives are. 165 00:07:53,200 --> 00:07:54,920 Speaker 1: Yeah, I would say, you know, if I was if 166 00:07:54,920 --> 00:07:57,160 Speaker 1: I'm putting my military commander have back on, I would 167 00:07:57,160 --> 00:07:58,920 Speaker 1: look at it in terms of what are considered my 168 00:07:59,000 --> 00:08:01,000 Speaker 1: high value targets that are remaining that are tied to 169 00:08:01,040 --> 00:08:03,320 Speaker 1: center of gravity, and then I would also look at 170 00:08:03,360 --> 00:08:05,600 Speaker 1: the high value individuals that are also tied into this. 171 00:08:05,960 --> 00:08:09,040 Speaker 1: So I would continue everything that I possibly could. And 172 00:08:09,080 --> 00:08:12,240 Speaker 1: I think the administrations looking for a complete annihilation of 173 00:08:12,280 --> 00:08:16,040 Speaker 1: air defense capability as well as missile stockpiles and the 174 00:08:16,120 --> 00:08:19,520 Speaker 1: launchers that are capable so that whatever government comes in 175 00:08:19,680 --> 00:08:23,600 Speaker 1: and starts to work on the diplomacy side, the US 176 00:08:23,600 --> 00:08:25,320 Speaker 1: is in a much better position from leverage to be 177 00:08:25,360 --> 00:08:27,680 Speaker 1: able to say, hey, all right, I'm not going to 178 00:08:27,760 --> 00:08:29,640 Speaker 1: let you guys do your missile stockpiles anymore, and I'm 179 00:08:29,680 --> 00:08:33,360 Speaker 1: not going to let you guys pursue nuclear proliferation. And 180 00:08:33,400 --> 00:08:35,120 Speaker 1: so I think that becomes a key piece of it. 181 00:08:35,200 --> 00:08:37,600 Speaker 1: But in order to do that, you have to maintain 182 00:08:38,040 --> 00:08:41,120 Speaker 1: the pressure on that. I think the Trump administration is 183 00:08:41,120 --> 00:08:43,680 Speaker 1: going to look for somebody the remaining part of the 184 00:08:43,720 --> 00:08:45,920 Speaker 1: power vacuum leadership with an Iran and then say who 185 00:08:45,960 --> 00:08:47,960 Speaker 1: are the people that we can most likely work with, 186 00:08:48,080 --> 00:08:50,079 Speaker 1: and then continue to do a press to make sure 187 00:08:50,160 --> 00:08:53,760 Speaker 1: those individuals that are in place. Much more difficult to 188 00:08:53,760 --> 00:08:56,079 Speaker 1: do when you don't have boots on the ground, So 189 00:08:56,120 --> 00:08:57,600 Speaker 1: it does end up being a lot more on the 190 00:08:57,600 --> 00:09:02,040 Speaker 1: diplomatic front and beside behind the scenes, you know, intelligence 191 00:09:02,040 --> 00:09:05,240 Speaker 1: community work and all that stuff, as well as frontline 192 00:09:05,280 --> 00:09:07,880 Speaker 1: messaging as the military continues to bombard. 193 00:09:08,320 --> 00:09:10,840 Speaker 4: Okay, sounds good. Thank you very much. Wayne. Will let 194 00:09:10,880 --> 00:09:12,720 Speaker 4: you get back because I know you're extremely busy. 195 00:09:13,520 --> 00:09:15,280 Speaker 3: Thanks for attending, and if you can ever have any 196 00:09:15,360 --> 00:09:18,199 Speaker 3: questions for Wayne or for the defense team. You can 197 00:09:18,240 --> 00:09:20,680 Speaker 3: find all of our information that we're writing about at 198 00:09:20,679 --> 00:09:24,000 Speaker 3: b I Iran Go. You can go on there, and 199 00:09:24,080 --> 00:09:27,320 Speaker 3: it's not just defense, but it's also commodities, currencies, you 200 00:09:27,400 --> 00:09:30,520 Speaker 3: name it, some ESG stuff is in there already, So 201 00:09:31,000 --> 00:09:32,960 Speaker 3: you know B I I Ran is where everything is. 202 00:09:33,000 --> 00:09:35,719 Speaker 3: So thank you again, Wayne, real quickly, just a couple 203 00:09:35,760 --> 00:09:37,800 Speaker 3: of other things. You know, we talked about the the 204 00:09:37,920 --> 00:09:41,199 Speaker 3: energy Exchange call that's happening right now. Just real quickly. 205 00:09:42,800 --> 00:09:46,840 Speaker 3: I put on a note this morning on congressional tariffs. Essentially, 206 00:09:47,040 --> 00:09:49,480 Speaker 3: this note which was going to be widely read before 207 00:09:49,840 --> 00:09:53,040 Speaker 3: the conflict this weekend essentially so that you're going to 208 00:09:53,120 --> 00:09:55,120 Speaker 3: hear probably not this week or next week due to 209 00:09:55,240 --> 00:09:57,240 Speaker 3: the conflict, but you know in the next few weeks 210 00:09:57,480 --> 00:09:59,959 Speaker 3: you're going to hear statements from Republicans essentially say they 211 00:10:00,000 --> 00:10:02,760 Speaker 3: you either want to codify President Trump's authority to do tariffs, 212 00:10:02,920 --> 00:10:06,400 Speaker 3: be a reconciliation or for the Section one twenty two tariff, 213 00:10:06,400 --> 00:10:09,520 Speaker 3: which would need congressional authorization one hundred and fifty days. 214 00:10:09,760 --> 00:10:11,680 Speaker 3: My point is is that a I don't think that 215 00:10:11,760 --> 00:10:14,120 Speaker 3: Congress is ever going to get President Trump authorization to 216 00:10:14,160 --> 00:10:17,520 Speaker 3: do more tariffs and b I don't think we'll even 217 00:10:17,600 --> 00:10:19,480 Speaker 3: see a Section one twenty two vote come up in 218 00:10:19,480 --> 00:10:22,360 Speaker 3: one hundred and fifty days. Just as a reminder, Section 219 00:10:22,400 --> 00:10:24,560 Speaker 3: one twenty two allows up to a fifteen percent tariff 220 00:10:24,800 --> 00:10:27,679 Speaker 3: for one hundred and fifty days. Did he need congressional authorization? 221 00:10:28,040 --> 00:10:30,120 Speaker 3: I don't think President Trump's plan is to ever get 222 00:10:30,160 --> 00:10:32,160 Speaker 3: to that point. I think they'll convert it from a 223 00:10:32,160 --> 00:10:34,000 Speaker 3: Section one twenty two to a Section three oh one. 224 00:10:34,160 --> 00:10:37,320 Speaker 4: So great. Just the last thing to talk about. 225 00:10:37,600 --> 00:10:39,400 Speaker 3: Just an update on the Basil three end game for 226 00:10:39,400 --> 00:10:42,400 Speaker 3: those of you who are in the banking space. Last week, 227 00:10:43,160 --> 00:10:45,560 Speaker 3: FED Vice chair Michelle Bowman testified to the Senate Banking 228 00:10:45,600 --> 00:10:47,839 Speaker 3: Committee and she confirmed that the Bosal three end game 229 00:10:47,840 --> 00:10:50,400 Speaker 3: proposal will be out before the end of March. She 230 00:10:50,520 --> 00:10:52,320 Speaker 3: also said that there is going to be a GESIP 231 00:10:52,400 --> 00:10:55,439 Speaker 3: surcharge proposal, just as a reminder, the Bossle three n game, 232 00:10:55,440 --> 00:10:57,480 Speaker 3: according to our friends over a Bloomberg News, is going 233 00:10:57,480 --> 00:10:59,959 Speaker 3: to increase CAPO requirement somewhere between three to seven percent. 234 00:11:00,000 --> 00:11:01,719 Speaker 3: And what the federal want you to do is to 235 00:11:01,760 --> 00:11:04,959 Speaker 3: actually look holistically to this together and when you take 236 00:11:05,000 --> 00:11:07,480 Speaker 3: the g SIB surcharged proposal into account. While we don't 237 00:11:07,480 --> 00:11:09,960 Speaker 3: know the specifics of it, I think the thinking here 238 00:11:10,080 --> 00:11:13,160 Speaker 3: is is that that proposal is going to dramatically decrease 239 00:11:13,320 --> 00:11:16,679 Speaker 3: capital requirements, so that any increase is well negated in 240 00:11:16,760 --> 00:11:19,360 Speaker 3: our back end. The Napkin math is showing around forty 241 00:11:19,400 --> 00:11:22,400 Speaker 3: to fifty billion dollars in total in terms of the impact, 242 00:11:22,440 --> 00:11:26,360 Speaker 3: but again that's still to be determined. Last thing is 243 00:11:26,360 --> 00:11:27,800 Speaker 3: is that I should have mentioned, is that we are 244 00:11:27,840 --> 00:11:32,200 Speaker 3: going to see a I'll get to the question a second. 245 00:11:32,640 --> 00:11:34,720 Speaker 3: I will see that we're going to see a War 246 00:11:34,800 --> 00:11:38,120 Speaker 3: Powers resolution vote come up in Congress this week. I 247 00:11:38,160 --> 00:11:40,200 Speaker 3: will have my thoughts out on that tomorrow. So if 248 00:11:40,200 --> 00:11:42,360 Speaker 3: you have any questions in the War Powers resolution, feel 249 00:11:42,360 --> 00:11:45,080 Speaker 3: free to reach back to me tomorrow. The housing stuff 250 00:11:45,160 --> 00:11:49,120 Speaker 3: is still going forward. This is President Trump's idea of 251 00:11:49,200 --> 00:11:53,400 Speaker 3: banning corporations from purchasing single family homes. Right now, there 252 00:11:53,480 --> 00:11:55,360 Speaker 3: is this bipartisan bill we've talked about in the past 253 00:11:55,400 --> 00:11:56,080 Speaker 3: called the Road Act. 254 00:11:56,120 --> 00:11:56,880 Speaker 4: It's a housing bill. 255 00:11:56,920 --> 00:11:59,400 Speaker 3: It's bipartisan, and honestly, it's not all that exciting for 256 00:11:59,400 --> 00:12:01,479 Speaker 3: those of us who look at it from the markets perspective. 257 00:12:01,960 --> 00:12:06,440 Speaker 3: But this idea of banning corporations from owning single family 258 00:12:06,480 --> 00:12:09,720 Speaker 3: homes is getting thrown into that debate. Last I heard 259 00:12:09,760 --> 00:12:11,720 Speaker 3: over the weekend, and there's been some reporting to this 260 00:12:11,920 --> 00:12:15,960 Speaker 3: is that rather than banning corporations, they're talking about changing 261 00:12:15,960 --> 00:12:19,840 Speaker 3: some tax codes to make corporations less inclined to buy 262 00:12:19,880 --> 00:12:22,960 Speaker 3: single family homes. And remember, this is really exposuring the 263 00:12:23,000 --> 00:12:26,840 Speaker 3: single family reads like AMH and imitation homes. The folks, 264 00:12:26,880 --> 00:12:28,960 Speaker 3: the private equity folks like Blackstone. I mean, we were 265 00:12:28,960 --> 00:12:31,360 Speaker 3: talking zero point five percent of their total assets, so 266 00:12:31,400 --> 00:12:34,160 Speaker 3: single family homes isn't all that much. I think this 267 00:12:34,320 --> 00:12:36,400 Speaker 3: actually is going to get postponed this week. They may 268 00:12:36,400 --> 00:12:38,840 Speaker 3: push that to next week, but I will be keeping 269 00:12:38,880 --> 00:12:41,120 Speaker 3: an eye on it. And then, lastly to the question 270 00:12:41,240 --> 00:12:44,160 Speaker 3: about you know, anthropic was used in the initial strikes, 271 00:12:44,640 --> 00:12:47,000 Speaker 3: my colleague Match Schettenhelm actually just put out a note 272 00:12:47,040 --> 00:12:52,200 Speaker 3: this morning talking about Anthropic in greater detail, and specifically 273 00:12:52,280 --> 00:12:54,560 Speaker 3: the decision by the Department of Defense over the weekend 274 00:12:54,600 --> 00:12:59,560 Speaker 3: to label a supply chain risk. His essentially his theory, 275 00:12:59,600 --> 00:13:01,000 Speaker 3: and this is what I'll just say right here, is 276 00:13:01,000 --> 00:13:03,680 Speaker 3: that he can likely bring anthropic can likely bring a 277 00:13:03,679 --> 00:13:07,200 Speaker 3: successful court challenge to the February twenty seventh, exclusion from 278 00:13:07,240 --> 00:13:10,280 Speaker 3: all work from military related contracts if the US defends 279 00:13:10,280 --> 00:13:14,400 Speaker 3: its actions. We believe that the rationale by the Department 280 00:13:14,440 --> 00:13:17,600 Speaker 3: of Defense focused on anthropoloics refusal to change the terms 281 00:13:17,640 --> 00:13:20,600 Speaker 3: of its Delight Defense contract. It's probably too flimsy as 282 00:13:20,640 --> 00:13:23,199 Speaker 3: a basis to support such a drastic action. So Matt 283 00:13:23,200 --> 00:13:25,800 Speaker 3: Shennhelm and to the client there, Matt Schennhelm is our 284 00:13:25,840 --> 00:13:28,360 Speaker 3: anthropic expert, so he will be the one to talk 285 00:13:28,400 --> 00:13:30,760 Speaker 3: to you greater detail. So I'm going to say thank 286 00:13:30,800 --> 00:13:33,199 Speaker 3: you very much. We really appreciate your time. As always, 287 00:13:33,640 --> 00:13:35,760 Speaker 3: if you ever have any questions, please feel free to 288 00:13:35,800 --> 00:13:37,000 Speaker 3: reach out and we will talk soon. 289 00:13:37,080 --> 00:13:37,360 Speaker 4: Thank you. 290 00:13:39,679 --> 00:13:43,600 Speaker 2: Our thanks to Nathan Dean, Bloomberg Intelligence Senior policy Analysts, 291 00:13:43,640 --> 00:13:47,280 Speaker 2: bringing you the latest installment of his weekly Washington Policy Pulse. 292 00:13:47,679 --> 00:13:50,480 Speaker 2: For more from BI or to join this call live 293 00:13:50,679 --> 00:13:54,400 Speaker 2: each week, you can email Nathan at Ndean at Bloomberg 294 00:13:54,440 --> 00:13:58,320 Speaker 2: dot net. That's nd Ea n at Bloomberg dot net. 295 00:13:58,559 --> 00:14:01,240 Speaker 2: Come back to the podcast later today for the latest 296 00:14:01,360 --> 00:14:02,640 Speaker 2: edition of Balance of Power.