1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,880 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:22,000 Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business App. 4 00:00:22,360 --> 00:00:25,680 Speaker 1: Listen on demand wherever you get your podcasts, or watch 5 00:00:25,760 --> 00:00:27,040 Speaker 1: us live on YouTube. 6 00:00:27,240 --> 00:00:30,480 Speaker 2: Many talk few have to act in. One of them 7 00:00:30,760 --> 00:00:33,519 Speaker 2: is the Governor of Connecticut, and Mettelamont joins us right 8 00:00:33,560 --> 00:00:36,639 Speaker 2: now in our studios this morning. You're wounded. For those 9 00:00:36,640 --> 00:00:38,559 Speaker 2: of you on radio, He's got this sling going in 10 00:00:38,600 --> 00:00:42,360 Speaker 2: that you're on a trade mission to India. How is 11 00:00:42,440 --> 00:00:47,199 Speaker 2: President Trump helping Connecticut with your trade relations with India? 12 00:00:48,400 --> 00:00:52,360 Speaker 3: India was nervous as heck about President Trump. That said, 13 00:00:52,360 --> 00:00:54,320 Speaker 3: we went to Eastern India, which is by far the 14 00:00:54,360 --> 00:00:58,600 Speaker 3: most innovative and entrepreneurial part. We did a trade mission there, 15 00:00:58,760 --> 00:01:01,720 Speaker 3: met with a four your fifty companies, some of which 16 00:01:01,760 --> 00:01:04,280 Speaker 3: you're thinking about getting a foothold in the United States. 17 00:01:04,560 --> 00:01:06,399 Speaker 3: I had to spell Connecticut for them, but now. 18 00:01:06,280 --> 00:01:08,880 Speaker 2: They know you have to spell Connecticut for me as well. 19 00:01:08,959 --> 00:01:12,920 Speaker 2: Governor Laman Blumenthal as well. On this yesterday, you take 20 00:01:13,120 --> 00:01:18,320 Speaker 2: electricity from Canada. If doug Ford of Ontario or Quebec hydro. 21 00:01:18,920 --> 00:01:21,760 Speaker 2: If they pull the plug, what's it mean for Bridgeport. 22 00:01:23,240 --> 00:01:26,200 Speaker 3: We have some very high electric prices throughout New England, 23 00:01:26,200 --> 00:01:29,039 Speaker 3: including Connecticut, and we bring down a lot of hydro 24 00:01:29,240 --> 00:01:32,160 Speaker 3: from Canada. So you put ten percent on there, that 25 00:01:32,200 --> 00:01:34,959 Speaker 3: would add about seventy five million. You put twenty percent 26 00:01:35,000 --> 00:01:37,880 Speaker 3: on there, that'd be one hundred and fifty million additional 27 00:01:37,920 --> 00:01:38,840 Speaker 3: fees paid. 28 00:01:38,560 --> 00:01:39,880 Speaker 4: For by our rate payers. 29 00:01:40,120 --> 00:01:43,199 Speaker 5: Not a great idea, so, Governor, as you've probably seen 30 00:01:43,280 --> 00:01:45,280 Speaker 5: here in the financial markets, which Tom and I and 31 00:01:45,680 --> 00:01:47,680 Speaker 5: deal with every day, a lot of uncertainty in the 32 00:01:47,680 --> 00:01:51,680 Speaker 5: marketplace as it relates to economic policy of this new administration. 33 00:01:51,760 --> 00:01:54,880 Speaker 5: We're seeing that in lower stock prices and weaker dollar. 34 00:01:55,440 --> 00:01:56,520 Speaker 6: How did you see. 35 00:01:56,280 --> 00:02:00,360 Speaker 5: It from Connecticut? How did you and your constituency look 36 00:02:00,400 --> 00:02:01,400 Speaker 5: at this current environment. 37 00:02:01,880 --> 00:02:03,760 Speaker 3: I come out of the business world. The business world 38 00:02:03,880 --> 00:02:06,840 Speaker 3: hates uncertainty. If you know, when I took over Connecticut, 39 00:02:06,840 --> 00:02:09,440 Speaker 3: we were going from boom to bust a bust and 40 00:02:09,639 --> 00:02:13,360 Speaker 3: raising taxes. And we've had six straight balanced budgets trying 41 00:02:13,400 --> 00:02:17,000 Speaker 3: to give people at certainty or unemployment rate is way 42 00:02:17,040 --> 00:02:17,840 Speaker 3: down and job. 43 00:02:17,680 --> 00:02:18,399 Speaker 4: Growth is up. 44 00:02:18,760 --> 00:02:21,519 Speaker 3: But it's just the opposite in Washington, DC, right, now 45 00:02:21,639 --> 00:02:25,359 Speaker 3: all that uncertainty starting with tariffs, are looking at deficits 46 00:02:25,440 --> 00:02:27,000 Speaker 3: a lot of businesses that I think I'm going to 47 00:02:27,080 --> 00:02:29,320 Speaker 3: hold off right now before I make that investment. 48 00:02:29,480 --> 00:02:30,160 Speaker 4: That's not good. 49 00:02:30,960 --> 00:02:33,560 Speaker 5: So in Connecticut, what are the chief issues that you 50 00:02:33,600 --> 00:02:36,120 Speaker 5: guys are dealing with from an economic perspective these days? 51 00:02:37,240 --> 00:02:40,000 Speaker 3: Look, we're going to we're looking at our seventh and 52 00:02:40,040 --> 00:02:44,240 Speaker 3: eighth balance budget. Unless they cut medicaid by a billion dollars, 53 00:02:44,360 --> 00:02:47,239 Speaker 3: you cut Medicaid by a billion dollars, our budget is 54 00:02:47,280 --> 00:02:49,920 Speaker 3: turned upside down. And that's true of forty nine other states. 55 00:02:50,120 --> 00:02:52,400 Speaker 5: What are you hearing from the federal government about some 56 00:02:52,440 --> 00:02:53,600 Speaker 5: of those big ticket items. 57 00:02:53,760 --> 00:02:56,000 Speaker 4: I don't think they know right now. I was down there. 58 00:02:56,040 --> 00:02:59,320 Speaker 3: I met with folks, the secretaries that just come into 59 00:02:59,360 --> 00:03:01,240 Speaker 3: office coming up with their modeling. 60 00:03:01,480 --> 00:03:03,280 Speaker 4: But everything runs through the White House. 61 00:03:03,520 --> 00:03:05,880 Speaker 2: For those of you across the nation in your commune today, 62 00:03:06,200 --> 00:03:09,040 Speaker 2: a Democrat, the governor of Connecticut is with us Ned 63 00:03:09,120 --> 00:03:14,360 Speaker 2: Lamont as he goes through the tiptoes through all this 64 00:03:14,480 --> 00:03:17,480 Speaker 2: different policy changes we're seeing. I'm going to cut to 65 00:03:17,480 --> 00:03:20,240 Speaker 2: the chase. You got to vote of confidence from the people. 66 00:03:20,320 --> 00:03:23,160 Speaker 2: You get forty nine percent of the vote and one 67 00:03:23,400 --> 00:03:26,760 Speaker 2: in twenty eighteen, I'm going to call it barely. You 68 00:03:26,840 --> 00:03:31,200 Speaker 2: improved dramatically in twenty twenty two with fifty seven percent 69 00:03:31,240 --> 00:03:35,480 Speaker 2: of the vote. What do you say, really the polarity 70 00:03:35,520 --> 00:03:37,680 Speaker 2: of the nation on right and left. But what do 71 00:03:37,720 --> 00:03:41,320 Speaker 2: you say to the Democratic Party is they address from 72 00:03:41,480 --> 00:03:46,040 Speaker 2: a left liberal point the reality of a centrist Lamont 73 00:03:46,200 --> 00:03:48,320 Speaker 2: and others as well. 74 00:03:48,440 --> 00:03:51,040 Speaker 3: A centrist Lamont probably is going to disagree with the 75 00:03:51,040 --> 00:03:54,240 Speaker 3: Trump administration on a majority of things. But start with 76 00:03:54,360 --> 00:03:57,320 Speaker 3: areas where we can find some agreement we can work together. 77 00:03:57,720 --> 00:04:00,840 Speaker 3: For me, that starts with energy. The high price of electricity. 78 00:04:01,200 --> 00:04:03,720 Speaker 3: You know, the possibility that we could bring in natural 79 00:04:03,760 --> 00:04:07,640 Speaker 3: gas or expand nuclear in our region would be transformative 80 00:04:07,920 --> 00:04:10,320 Speaker 3: a place where I've been meeting with the secretaries down 81 00:04:10,320 --> 00:04:12,000 Speaker 3: to Washington. Something we can get done together. 82 00:04:12,200 --> 00:04:13,360 Speaker 2: Right, Well, let me let me you know, we're at 83 00:04:13,360 --> 00:04:16,400 Speaker 2: a piece of chalk on our hand at Harvard years ago, Nevlamont. 84 00:04:16,680 --> 00:04:19,880 Speaker 2: Did the Republicans win the election? Did Trump win or 85 00:04:19,920 --> 00:04:22,760 Speaker 2: did the Democrats lose the election because they were too 86 00:04:22,800 --> 00:04:23,800 Speaker 2: far left? 87 00:04:24,760 --> 00:04:27,159 Speaker 3: I think Trump won. He won because it was a 88 00:04:27,240 --> 00:04:30,960 Speaker 3: change election. I look around the world, nobody wanted more 89 00:04:30,960 --> 00:04:33,200 Speaker 3: of the same and I think a little bit Kamala 90 00:04:33,279 --> 00:04:37,240 Speaker 3: got stuck with the Biden legacy, couldn't differentiate herself from there. 91 00:04:37,600 --> 00:04:41,040 Speaker 3: And believe me, Donald Trump represented change. 92 00:04:41,520 --> 00:04:43,440 Speaker 5: When you think about the Democratic Party today, a lot 93 00:04:43,480 --> 00:04:47,320 Speaker 5: of folks are saying, where's the leadership? Because it seems 94 00:04:47,360 --> 00:04:50,520 Speaker 5: like President Trump and his administration taking all the oxygen 95 00:04:50,560 --> 00:04:54,000 Speaker 5: out of the room. Where is the democratic response? Where's 96 00:04:54,000 --> 00:04:56,960 Speaker 5: a democratic policy? Where's the democratic leadership? 97 00:04:57,120 --> 00:04:59,440 Speaker 6: Who do you think is the leader? Does a Democratic 98 00:04:59,440 --> 00:04:59,680 Speaker 6: party have? 99 00:04:59,720 --> 00:04:59,880 Speaker 7: Aly? 100 00:05:00,640 --> 00:05:02,520 Speaker 3: Well, when we're not in power, you tend to have 101 00:05:02,560 --> 00:05:04,880 Speaker 3: a lot of different leaders I start with the governors. 102 00:05:04,920 --> 00:05:08,640 Speaker 3: The governors are not making everything a battle about Donald Trump. 103 00:05:08,640 --> 00:05:11,080 Speaker 3: But when it comes to medicaid, we're gonna hit hard. 104 00:05:11,279 --> 00:05:14,440 Speaker 3: We're going to work with Republican governors to say, you know, 105 00:05:15,320 --> 00:05:18,359 Speaker 3: unensuring these poor people is just going to drive a 106 00:05:18,400 --> 00:05:22,320 Speaker 3: wedgeendo Era hospitals as well, make a difference, Find areas 107 00:05:22,360 --> 00:05:25,919 Speaker 3: of specific is interest and focus on that, you know, 108 00:05:26,000 --> 00:05:27,760 Speaker 3: rather than just make everything about Trump. 109 00:05:28,800 --> 00:05:32,479 Speaker 5: Congestion pricing, We've got a congestion pricing corresponding right here. 110 00:05:33,040 --> 00:05:33,440 Speaker 7: What is. 111 00:05:34,960 --> 00:05:39,279 Speaker 5: Yes, New Jersey has a particular view of congestion pricing 112 00:05:39,360 --> 00:05:39,720 Speaker 5: against it? 113 00:05:39,800 --> 00:05:41,240 Speaker 6: How does the folks in Connecticut. 114 00:05:41,320 --> 00:05:42,160 Speaker 4: I just think you have. 115 00:05:42,080 --> 00:05:44,320 Speaker 3: To pay your bills, and New York City's got to 116 00:05:44,320 --> 00:05:47,520 Speaker 3: pay their bills. You've got a pretty antiquated subway system. 117 00:05:48,000 --> 00:05:50,400 Speaker 3: Does anybody have a better idea of how to pay 118 00:05:50,440 --> 00:05:53,360 Speaker 3: for things? It's so easy to say no, and right 119 00:05:53,360 --> 00:05:54,920 Speaker 3: now there are a lot of people say no. So 120 00:05:54,960 --> 00:05:56,799 Speaker 3: I'm a little sympathetic to Katy Ohlklum. 121 00:05:56,880 --> 00:06:02,880 Speaker 2: This you represent vantaged America, with the heritage of JP 122 00:06:03,040 --> 00:06:06,279 Speaker 2: Morgan and all that you've done in your life. How 123 00:06:06,320 --> 00:06:10,920 Speaker 2: does America find the center again? We are whatever anybody's 124 00:06:10,960 --> 00:06:13,880 Speaker 2: politics on this show, we can all admit it's a 125 00:06:14,000 --> 00:06:18,320 Speaker 2: fractured America. How do we find the center? Back to 126 00:06:18,440 --> 00:06:21,680 Speaker 2: your family in STSK four years ago and others, how 127 00:06:21,680 --> 00:06:25,000 Speaker 2: do we get back to the center? Governor Lamont, I. 128 00:06:24,920 --> 00:06:28,320 Speaker 3: Think we found in Connecticut Republicans and Democrats find places 129 00:06:28,320 --> 00:06:32,120 Speaker 3: we can agree. Let's say we did the biggest tax 130 00:06:32,160 --> 00:06:35,640 Speaker 3: cut ever last year, but it was middle class people and. 131 00:06:36,360 --> 00:06:38,040 Speaker 4: Beyond, it was not for rich people. 132 00:06:38,160 --> 00:06:40,960 Speaker 3: That was an area where Republicans and Democrats could get together. 133 00:06:41,120 --> 00:06:45,080 Speaker 3: Five hundred million dollar tax cut. What we're doing in 134 00:06:45,160 --> 00:06:48,000 Speaker 3: terms of making sure that we educate people for the 135 00:06:48,120 --> 00:06:50,599 Speaker 3: jobs that are out there right now, there's a disconnect. 136 00:06:50,920 --> 00:06:54,680 Speaker 3: I'm finding pretty good balance between Republicans and Democrats there. Look, 137 00:06:54,680 --> 00:06:56,880 Speaker 3: there's a certain incentive to say no, that's what the 138 00:06:56,960 --> 00:06:59,600 Speaker 3: nature of the opposition party is. I don't think that's 139 00:06:59,640 --> 00:07:01,880 Speaker 3: good for Democrats at the national level, and I don't 140 00:07:01,880 --> 00:07:04,359 Speaker 3: think that's good for Republicans at our state level. 141 00:07:05,640 --> 00:07:07,960 Speaker 5: Foreign policy, it's another area that is front and center 142 00:07:08,000 --> 00:07:11,320 Speaker 5: for better or worse for the United States, both in 143 00:07:11,320 --> 00:07:13,920 Speaker 5: the Middle East and in the Ukraine. Just start with Ukraine. 144 00:07:14,000 --> 00:07:17,480 Speaker 5: There seems to be I guess, a willingness to find 145 00:07:17,560 --> 00:07:20,320 Speaker 5: some solution over there, and then that's question how you 146 00:07:20,360 --> 00:07:23,520 Speaker 5: get there. And President Trump has a certain focus here. 147 00:07:23,520 --> 00:07:26,920 Speaker 5: How would you approach what's happening in Ukraine trying to 148 00:07:26,960 --> 00:07:28,120 Speaker 5: find some type of piece there? 149 00:07:28,520 --> 00:07:30,960 Speaker 3: Not the way Donald Trump is doing it. Look, he 150 00:07:31,000 --> 00:07:32,800 Speaker 3: wrote the Art of the Deal. You go in, you 151 00:07:32,880 --> 00:07:36,520 Speaker 3: negotiate from a position to strength. Instead, Pete Hesa just 152 00:07:36,600 --> 00:07:39,679 Speaker 3: pulled the rug out from under Zelenski, put in place 153 00:07:39,760 --> 00:07:41,880 Speaker 3: a whole list of concessions, a sense that we're not 154 00:07:41,920 --> 00:07:43,960 Speaker 3: going to be there to back them. I think that's 155 00:07:44,000 --> 00:07:46,160 Speaker 3: a terrible way to do it, and our allies around 156 00:07:46,200 --> 00:07:48,800 Speaker 3: the world are watching how we treat Ukraine. I heard 157 00:07:48,840 --> 00:07:50,800 Speaker 3: that when I was in India as well. I'm glad 158 00:07:50,840 --> 00:07:53,360 Speaker 3: they're sitting down. I think they're negotiating. I think that's 159 00:07:53,400 --> 00:07:56,720 Speaker 3: long overdue, but negotiate from a position of strength. 160 00:07:57,200 --> 00:07:59,680 Speaker 2: But I look Governor Laban at Connecticut and I think 161 00:07:59,680 --> 00:08:02,160 Speaker 2: there's so many stereotypes out there, and folks, you can 162 00:08:02,200 --> 00:08:04,760 Speaker 2: come up with your own stereotype. It probably starts with 163 00:08:04,800 --> 00:08:08,360 Speaker 2: the Hinckley picnic voter at Grand Banks. Yeah, but the 164 00:08:08,400 --> 00:08:13,680 Speaker 2: reality is Connecticut's got an incredible polarity, including sixteen seventeen 165 00:08:14,320 --> 00:08:19,040 Speaker 2: percent foreign born migrants. You know, whatever those numbers are. 166 00:08:19,200 --> 00:08:22,080 Speaker 2: Last time we talked, you said you're managing it. It's 167 00:08:22,120 --> 00:08:24,320 Speaker 2: not the crisis of New York State and what Mayor 168 00:08:24,360 --> 00:08:28,080 Speaker 2: Adams is facing. But give us an update, and Connecticut 169 00:08:28,520 --> 00:08:31,240 Speaker 2: is tackling this polarizing issue. 170 00:08:32,840 --> 00:08:36,880 Speaker 3: Connecticut is a diverse state. We represent the diversity of 171 00:08:36,880 --> 00:08:38,400 Speaker 3: the United States of America. 172 00:08:38,520 --> 00:08:40,280 Speaker 4: When I go to India, I. 173 00:08:40,240 --> 00:08:42,760 Speaker 3: Have to say, look, the stereotype of Connecticut is a 174 00:08:42,760 --> 00:08:46,120 Speaker 3: bunch of Fairfield County guys in these voats you're talking about. 175 00:08:46,240 --> 00:08:47,679 Speaker 4: Is not the reality. 176 00:08:48,120 --> 00:08:51,880 Speaker 3: Our biggest percentage of international students are Indian born students 177 00:08:52,280 --> 00:08:54,559 Speaker 3: and that we welcome that. I think that's a great 178 00:08:54,600 --> 00:08:56,760 Speaker 3: strength for our state, and I think is a great 179 00:08:56,800 --> 00:08:58,640 Speaker 3: strength for our country. And I think we're getting away 180 00:08:58,640 --> 00:08:58,920 Speaker 3: from that. 181 00:09:00,080 --> 00:09:02,400 Speaker 5: You come from business, you have a business background. President 182 00:09:02,440 --> 00:09:04,679 Speaker 5: Trump today is addressing the business roundtable. 183 00:09:06,280 --> 00:09:08,120 Speaker 6: What do you think the message should be from. 184 00:09:07,920 --> 00:09:10,440 Speaker 5: Trump to the business leaders and from the business leaders 185 00:09:10,640 --> 00:09:11,600 Speaker 5: to President Trump. 186 00:09:12,480 --> 00:09:15,160 Speaker 3: I think from the business leaders to President Trump, you're 187 00:09:15,200 --> 00:09:19,360 Speaker 3: seeing the incredible anxiety and uncertainty reflected in a collapsing 188 00:09:19,400 --> 00:09:24,120 Speaker 3: stock market and a rising unemployment rates. Look, I agree 189 00:09:24,120 --> 00:09:26,240 Speaker 3: with you in terms of wanting to do big things, 190 00:09:26,240 --> 00:09:28,719 Speaker 3: but you don't have to do them overnight with a chainsaw. 191 00:09:29,080 --> 00:09:30,880 Speaker 4: Give us a direction of where you want to go, 192 00:09:30,960 --> 00:09:33,920 Speaker 4: and we can invest accordingly. I hope the President listens 193 00:09:33,960 --> 00:09:34,160 Speaker 4: to that. 194 00:09:34,320 --> 00:09:37,440 Speaker 2: I'm fascinated with a Supreme Court decision the other day 195 00:09:38,080 --> 00:09:41,080 Speaker 2: with Amy Cony Barrett going over. There seems to be 196 00:09:41,120 --> 00:09:47,719 Speaker 2: a primal scream of the judiciary solving legislative problems. You're 197 00:09:47,880 --> 00:09:50,760 Speaker 2: part of that as an executive in Connecticut, but also 198 00:09:50,800 --> 00:09:55,600 Speaker 2: almost like a legislature to Washington. Anor is a governor 199 00:09:56,160 --> 00:09:59,080 Speaker 2: is a legislatures just giving up the ghost in Washington. 200 00:09:59,600 --> 00:10:03,160 Speaker 2: I mean, does Congress even part of the debate anymore. 201 00:10:05,760 --> 00:10:10,679 Speaker 3: I'm sort of glad to see the judiciary standing up 202 00:10:10,760 --> 00:10:14,520 Speaker 3: to some of the intrusions from the Trump administration. You 203 00:10:14,559 --> 00:10:18,240 Speaker 3: know that said they haven't passed a darn thing down 204 00:10:18,240 --> 00:10:23,880 Speaker 3: in Congress in the last two exactly. Maybe the judiciary 205 00:10:23,920 --> 00:10:26,160 Speaker 3: is stepping in there, But I think the judiciary right 206 00:10:26,200 --> 00:10:28,319 Speaker 3: now is the guardrails protecting our democracy. 207 00:10:28,400 --> 00:10:30,280 Speaker 2: One of the great themes here, and it's the theme 208 00:10:30,320 --> 00:10:34,280 Speaker 2: of your life, is we've expanded our federal mandate away 209 00:10:34,320 --> 00:10:38,600 Speaker 2: from states like a Connecticut. I mean, there's a swing 210 00:10:38,679 --> 00:10:41,600 Speaker 2: back here where we've said enough on a titlements. When 211 00:10:41,640 --> 00:10:45,160 Speaker 2: you see the policy from your advisors, we're going to 212 00:10:45,200 --> 00:10:48,400 Speaker 2: pull back from agriculture, We're going to pull back from Congress. 213 00:10:48,520 --> 00:10:50,920 Speaker 2: We're going to pull back FAA and all the rest 214 00:10:50,960 --> 00:10:54,160 Speaker 2: of the DOCH stuff and all the rest. It's a 215 00:10:54,200 --> 00:11:00,520 Speaker 2: primal scream of a smaller Washington. Is that feasible right now? 216 00:11:00,559 --> 00:11:03,120 Speaker 3: It's popular because it sounds like Dose is getting rid 217 00:11:03,160 --> 00:11:05,600 Speaker 3: of a bunch of bureaucrats who are just leaning on 218 00:11:05,640 --> 00:11:09,000 Speaker 3: their shovels. But every day in our state level, you're 219 00:11:09,040 --> 00:11:11,920 Speaker 3: seeing how it's hitting people starting with healthcare. I think 220 00:11:11,960 --> 00:11:14,320 Speaker 3: that pushback is going to get louder and louder, and. 221 00:11:14,440 --> 00:11:16,800 Speaker 2: Ded Lebama with us the governor of Connecticut, we continue 222 00:11:16,840 --> 00:11:19,439 Speaker 2: our conversation. We welcome all of you, Paul with the 223 00:11:19,520 --> 00:11:20,800 Speaker 2: Governor of Connecticut. 224 00:11:20,960 --> 00:11:23,280 Speaker 5: Governor, you and the state of Connecticut, as you mentioned, 225 00:11:23,280 --> 00:11:26,800 Speaker 5: have been able to balance your budget. We're coming up 226 00:11:26,840 --> 00:11:30,000 Speaker 5: to some budget discussions then in Washington, d C. What 227 00:11:30,080 --> 00:11:33,920 Speaker 5: is your advice to folks in Congress about these upcoming 228 00:11:34,000 --> 00:11:37,160 Speaker 5: negotiations and trying to balance the budget and trying to. 229 00:11:37,160 --> 00:11:39,480 Speaker 6: Push that part of the policy through. 230 00:11:40,240 --> 00:11:43,280 Speaker 3: Governors are so frustrated with Washington. We all have to 231 00:11:43,280 --> 00:11:46,040 Speaker 3: balance our budget down to Washington. It's an afterthought. I 232 00:11:46,160 --> 00:11:50,200 Speaker 3: understand that deficits are not politically that charged an issue, 233 00:11:50,280 --> 00:11:52,320 Speaker 3: but you got to do the right thing. You don't 234 00:11:52,360 --> 00:11:54,680 Speaker 3: have to solve it overnight, but you've got to directionally 235 00:11:54,760 --> 00:11:57,960 Speaker 3: start showing that you're getting your budget under control. I 236 00:11:58,000 --> 00:12:00,040 Speaker 3: don't see that happening in Washington. 237 00:12:00,000 --> 00:12:03,360 Speaker 5: The price there's not more political pressure to do that 238 00:12:03,400 --> 00:12:07,520 Speaker 5: because I think the message I've taken is that unless 239 00:12:08,040 --> 00:12:12,160 Speaker 5: people force Washington to do that, either to lower expenses, 240 00:12:12,400 --> 00:12:15,800 Speaker 5: raise revenue, whatever they have to do, unless there's political pressure, 241 00:12:16,040 --> 00:12:17,920 Speaker 5: there's no really no incentive to do anything. 242 00:12:19,200 --> 00:12:21,480 Speaker 4: Look here at Bloomberg, we care about that deeply. 243 00:12:21,559 --> 00:12:23,959 Speaker 3: We know if you don't have an honestly balanced budget, 244 00:12:24,040 --> 00:12:26,880 Speaker 3: a bad things happen in the future. I've paid down 245 00:12:26,920 --> 00:12:30,400 Speaker 3: our debt by over ten billion dollars. People don't care 246 00:12:30,520 --> 00:12:33,360 Speaker 3: that much. You know, they have real needs every day. 247 00:12:33,440 --> 00:12:34,760 Speaker 3: How can you not taken care of that? 248 00:12:36,120 --> 00:12:38,080 Speaker 6: So how do you think about that? I mean, is 249 00:12:38,120 --> 00:12:38,439 Speaker 6: this the. 250 00:12:40,040 --> 00:12:41,480 Speaker 5: How do you think if you were to balance the 251 00:12:41,559 --> 00:12:44,840 Speaker 5: US budget? Where would you go expenses, revenue both? How 252 00:12:44,880 --> 00:12:45,800 Speaker 5: would you think about it? 253 00:12:45,920 --> 00:12:48,440 Speaker 3: I don't think I'd have the biggest tax cut in 254 00:12:48,600 --> 00:12:51,280 Speaker 3: history for the wealthiest folks. I think that sends the 255 00:12:51,360 --> 00:12:54,240 Speaker 3: wrong signal, takes us in the wrong direction. I think 256 00:12:54,320 --> 00:12:57,800 Speaker 3: I would be going after efficiency, not the way Doze 257 00:12:57,840 --> 00:12:59,920 Speaker 3: is doing, but in a serious way. And you can 258 00:13:00,200 --> 00:13:01,240 Speaker 3: disregarding titlements. 259 00:13:01,320 --> 00:13:03,840 Speaker 2: I got two questions left. They're both really really important. 260 00:13:03,960 --> 00:13:06,600 Speaker 2: One with im Men's respect to your family, the heritage 261 00:13:06,640 --> 00:13:09,600 Speaker 2: of the Lamont family on all of Wall Street? Is 262 00:13:09,640 --> 00:13:12,520 Speaker 2: this a new gilded age? Have we skewed things so 263 00:13:12,679 --> 00:13:16,920 Speaker 2: far over to billionaire mania that we're really reliving? I mean, 264 00:13:17,280 --> 00:13:21,440 Speaker 2: Trump has this fixation over McKinley and tariffs. Are we 265 00:13:21,440 --> 00:13:23,600 Speaker 2: reliving McKinley as a society. 266 00:13:24,360 --> 00:13:25,480 Speaker 4: I think we are a little bit. 267 00:13:25,559 --> 00:13:28,320 Speaker 3: I think in flighting the money supply and all the 268 00:13:28,360 --> 00:13:31,360 Speaker 3: deficits have made the rich a lot richer, probably the 269 00:13:31,440 --> 00:13:33,600 Speaker 3: richest they've been since nineteen twenty nine. 270 00:13:34,400 --> 00:13:37,480 Speaker 2: I got one final question. It's credible. Paul emails in 271 00:13:37,880 --> 00:13:41,720 Speaker 2: and says it's just simple. Finally Big East basketball is back. 272 00:13:42,160 --> 00:13:45,240 Speaker 2: I mean, I'm looking at Yukon Saint John's. This could 273 00:13:45,240 --> 00:13:45,840 Speaker 2: be a bid. 274 00:13:45,960 --> 00:13:49,160 Speaker 3: Is going to be a great Big East game. Yukon 275 00:13:49,320 --> 00:13:51,640 Speaker 3: is playing better and better than men, and women are 276 00:13:51,720 --> 00:13:52,240 Speaker 3: top flights. 277 00:13:52,320 --> 00:13:55,559 Speaker 2: Women are top flight. But in men's basketball, Yukon's won 278 00:13:55,559 --> 00:13:57,800 Speaker 2: four in a row. Are they saving it for Saint 279 00:13:57,840 --> 00:13:58,520 Speaker 2: John's here? 280 00:13:59,160 --> 00:14:01,679 Speaker 3: Hey, look we're too I'm national championship. We know what 281 00:14:01,720 --> 00:14:02,120 Speaker 3: we're doing. 282 00:14:02,280 --> 00:14:07,040 Speaker 2: Okay, Finally, after four hundred years, we get new Amtrak trains. 283 00:14:07,440 --> 00:14:11,440 Speaker 2: Everybody blames Connecticut for the worst wires. We fixed it. 284 00:14:11,640 --> 00:14:13,400 Speaker 2: You know, forget about the tunnels. We fixed it in 285 00:14:13,440 --> 00:14:16,199 Speaker 2: New York to Washington. Give us an update on your 286 00:14:16,280 --> 00:14:21,400 Speaker 2: unspeakable relationship with Amtrak to give us better, cheaper train service. 287 00:14:21,920 --> 00:14:22,600 Speaker 4: I will tell you. 288 00:14:23,520 --> 00:14:26,560 Speaker 3: We're gonna be able to speed up Amtrak dramatically over 289 00:14:26,600 --> 00:14:29,360 Speaker 3: the next five years. We got significant resources from the 290 00:14:29,360 --> 00:14:30,400 Speaker 3: Biden administration. 291 00:14:30,960 --> 00:14:31,960 Speaker 4: We are a choke point. 292 00:14:31,960 --> 00:14:33,760 Speaker 3: We got a lot of little towns, a lot of 293 00:14:33,760 --> 00:14:36,560 Speaker 3: stops along the way, a lot of twisting turns around 294 00:14:36,560 --> 00:14:37,920 Speaker 3: Missus O'gillicutti's home. 295 00:14:38,200 --> 00:14:39,240 Speaker 4: We're going to speed that up. 296 00:14:39,360 --> 00:14:41,400 Speaker 2: Is the President going to cut your submarine effort? 297 00:14:42,120 --> 00:14:42,720 Speaker 4: I don't think so. 298 00:14:42,920 --> 00:14:46,840 Speaker 3: It's the strategic piece of our triad. It's still undecipherable, folks. 299 00:14:46,880 --> 00:14:48,760 Speaker 2: For those that don't know it. You take the train 300 00:14:48,920 --> 00:14:51,320 Speaker 2: up and you're there and there's like a submarine over 301 00:14:51,360 --> 00:14:54,680 Speaker 2: in a window. Explain to people what's going on. It's 302 00:14:54,680 --> 00:14:58,400 Speaker 2: your submarine base in Connecticut. It's top top, top secret. 303 00:14:58,560 --> 00:15:00,880 Speaker 2: They don't even know if they leave her because they 304 00:15:00,960 --> 00:15:04,640 Speaker 2: leave underwater. But explain the commitment of Connecticut to our 305 00:15:04,760 --> 00:15:05,800 Speaker 2: United States Navy. 306 00:15:06,120 --> 00:15:09,440 Speaker 3: Yeah, electric boat part of General Dynamics makes most of 307 00:15:09,480 --> 00:15:13,400 Speaker 3: our submarines here and down in Virginia. It's the last 308 00:15:13,400 --> 00:15:16,480 Speaker 3: piece of our triad that is still undetectable. So it's 309 00:15:16,600 --> 00:15:19,880 Speaker 3: really important in terms of our strategic deterrence. If you 310 00:15:19,920 --> 00:15:22,440 Speaker 3: think the Soviets are coming in from the North Sea. 311 00:15:22,880 --> 00:15:24,800 Speaker 3: You know they're going to come right by New England. 312 00:15:24,840 --> 00:15:26,760 Speaker 3: It's very important what we got there in the Groton, 313 00:15:26,800 --> 00:15:27,760 Speaker 3: New London areas. 314 00:15:28,080 --> 00:15:31,200 Speaker 2: Governor, thank you for joining Bloomberg today, Grant, I appreciate it. 315 00:15:31,200 --> 00:15:34,600 Speaker 2: I'm still a mount of the state of Connecticut. 316 00:15:40,520 --> 00:15:44,120 Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live 317 00:15:44,160 --> 00:15:47,320 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 318 00:15:47,400 --> 00:15:51,080 Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or 319 00:15:51,240 --> 00:15:52,680 Speaker 1: watch us live on YouTube. 320 00:15:52,840 --> 00:15:55,800 Speaker 2: A time of conversation with someone seeing this a few 321 00:15:55,800 --> 00:15:59,720 Speaker 2: times before, Margui Petateel on correction, Mark you Pattel of course, 322 00:16:00,080 --> 00:16:03,200 Speaker 2: offspring Margie, you're going to tell me to find quality, 323 00:16:03,280 --> 00:16:05,960 Speaker 2: free cash flow. You're going to tell me to find 324 00:16:06,000 --> 00:16:10,600 Speaker 2: dividend and dividend growth. Where is it? Well? 325 00:16:10,640 --> 00:16:12,720 Speaker 8: I think really, with this kind of correction we've had, 326 00:16:12,760 --> 00:16:15,080 Speaker 8: you really have to look more at the growthy orient 327 00:16:15,560 --> 00:16:19,120 Speaker 8: rather than so called defensive high dividend kind of stocks 328 00:16:19,120 --> 00:16:21,560 Speaker 8: that a lot of people have said to be popular. 329 00:16:21,800 --> 00:16:24,240 Speaker 8: Simply because you've had such a big correction in many 330 00:16:24,280 --> 00:16:27,560 Speaker 8: of the large cap growth stocks, they actually look rather 331 00:16:27,640 --> 00:16:31,280 Speaker 8: reasonably priced, maybe even about the same price earnings ratio 332 00:16:31,320 --> 00:16:33,200 Speaker 8: as the average stock in the marketplace. 333 00:16:34,240 --> 00:16:37,040 Speaker 5: So how do you when you talk to your clients. 334 00:16:37,120 --> 00:16:39,200 Speaker 5: Is this a we don't want to be catching a 335 00:16:39,240 --> 00:16:41,000 Speaker 5: falling knife scenario, or. 336 00:16:41,480 --> 00:16:43,480 Speaker 6: Hey, we could be selective here in some names we like. 337 00:16:44,840 --> 00:16:45,080 Speaker 4: Well. 338 00:16:45,160 --> 00:16:47,160 Speaker 8: The thing is when you when the market has a 339 00:16:47,200 --> 00:16:51,320 Speaker 8: lot of volatility, short term volatility senseless, it's not really 340 00:16:51,360 --> 00:16:52,640 Speaker 8: related to the fundamentals. 341 00:16:53,320 --> 00:16:54,080 Speaker 9: In fact, I think we. 342 00:16:54,040 --> 00:16:56,040 Speaker 8: Ought to bring back the uptick rule, and that might 343 00:16:56,240 --> 00:16:58,320 Speaker 8: mute some of the volatility that we see. You go, 344 00:16:59,160 --> 00:17:04,320 Speaker 8: but when you look at the economy itself, it's chugging 345 00:17:04,320 --> 00:17:06,840 Speaker 8: along at a low rate. We may have a negative quarter, 346 00:17:06,960 --> 00:17:09,480 Speaker 8: many people are thinking, But we actually had a negative 347 00:17:09,560 --> 00:17:12,320 Speaker 8: quarter when the Fed began to raise short rates a 348 00:17:12,359 --> 00:17:14,760 Speaker 8: couple of years ago, and after that quarter we were 349 00:17:14,800 --> 00:17:17,040 Speaker 8: off to the races again. So I think that after 350 00:17:17,040 --> 00:17:19,679 Speaker 8: we get through this choppy uncertainty, we may have a 351 00:17:19,680 --> 00:17:20,840 Speaker 8: better market for the rest. 352 00:17:20,680 --> 00:17:21,080 Speaker 10: Of the year. 353 00:17:21,240 --> 00:17:23,840 Speaker 2: What is the character of this pullback? I mean, I mean, 354 00:17:23,880 --> 00:17:26,399 Speaker 2: when you're talking, Mark, you telling the uptick rule, we 355 00:17:26,480 --> 00:17:28,119 Speaker 2: could stop the show and go for an hour and 356 00:17:28,160 --> 00:17:32,240 Speaker 2: a half on does piece of legislation? Sure? Ever, Marguie, 357 00:17:32,400 --> 00:17:35,480 Speaker 2: what's the character of this pullback versus in any other 358 00:17:35,560 --> 00:17:38,679 Speaker 2: fourteen vanilla corrections. Is it just all political? 359 00:17:40,040 --> 00:17:43,280 Speaker 8: Well, I think for this cycle, as opposed to say 360 00:17:43,840 --> 00:17:48,440 Speaker 8: seven eight, that you have many, many more short term traders, 361 00:17:48,520 --> 00:17:51,360 Speaker 8: and that's contributed to the extreme volatility that we see, 362 00:17:51,359 --> 00:17:55,280 Speaker 8: short term volatility that we've seen, rather than fundamentals. So 363 00:17:55,359 --> 00:17:57,480 Speaker 8: I think that's really the issue. But as I said, 364 00:17:57,520 --> 00:17:59,480 Speaker 8: when you look at the economy, it looks pretty good. 365 00:17:59,520 --> 00:18:03,320 Speaker 8: The FED is committed to not tightening up financial conditions, 366 00:18:03,359 --> 00:18:06,000 Speaker 8: and this is actually kind of a weak period right 367 00:18:06,040 --> 00:18:08,840 Speaker 8: before people do tax is the uncertainty about the budget. 368 00:18:08,880 --> 00:18:11,240 Speaker 8: So I think we have a little bit to slosh 369 00:18:11,280 --> 00:18:13,040 Speaker 8: through and then the market will stabilize. 370 00:18:13,160 --> 00:18:15,800 Speaker 2: See how she's calming. Sure she should come over for 371 00:18:15,840 --> 00:18:21,359 Speaker 2: dinner tonight. Yeah, everybody Venville's portfolios got of hammered. Mark, 372 00:18:21,359 --> 00:18:22,080 Speaker 2: you should come. 373 00:18:21,920 --> 00:18:22,880 Speaker 6: Over, Margie. 374 00:18:23,040 --> 00:18:26,080 Speaker 5: A lot of folks in President Trump's economic team are 375 00:18:26,119 --> 00:18:29,159 Speaker 5: acknowledging that some of his policies could result in some 376 00:18:29,200 --> 00:18:32,160 Speaker 5: short term pain, whether it's slow in growth or higher inflation, 377 00:18:32,240 --> 00:18:34,720 Speaker 5: but longer term, and I think they define longer term 378 00:18:34,800 --> 00:18:37,399 Speaker 5: as the back half of this year, there should be 379 00:18:37,400 --> 00:18:40,480 Speaker 5: some gains, whether it's from you know, extended tax cuts 380 00:18:40,520 --> 00:18:43,280 Speaker 5: or maybe some other pro pro growth initiatives. 381 00:18:43,880 --> 00:18:44,919 Speaker 6: Are you buying into that? 382 00:18:45,040 --> 00:18:47,040 Speaker 5: Is that short term game, longer term gain? 383 00:18:47,280 --> 00:18:48,600 Speaker 6: Is that something that makes sense? 384 00:18:49,520 --> 00:18:50,320 Speaker 9: Well, yes, I think so. 385 00:18:50,400 --> 00:18:53,000 Speaker 8: I think the big risk with the with the change 386 00:18:53,040 --> 00:18:58,720 Speaker 8: in administration, would the temporary tax cuts expire and then 387 00:18:58,800 --> 00:19:02,000 Speaker 8: tax rates for corporations and individuals would jump up, and 388 00:19:02,040 --> 00:19:03,840 Speaker 8: I think that would have been very, very negative for 389 00:19:03,880 --> 00:19:05,840 Speaker 8: the stock market. So now we have a lot of 390 00:19:05,880 --> 00:19:09,359 Speaker 8: uncertainty about our terrorists good or terrorist's bad. And how 391 00:19:09,440 --> 00:19:11,440 Speaker 8: much can they cut from the government. I think it's 392 00:19:11,680 --> 00:19:14,360 Speaker 8: pretty modest at the margin that they'll actually be able 393 00:19:14,400 --> 00:19:17,280 Speaker 8: to cut. But any improvement and efficiency in the government 394 00:19:17,320 --> 00:19:20,400 Speaker 8: is just what business does every day, so that's pretty good. Mainly, 395 00:19:20,400 --> 00:19:22,560 Speaker 8: I think the tax cut is a number one issue 396 00:19:22,760 --> 00:19:25,640 Speaker 8: that will benefit the economy and the market this year. 397 00:19:26,040 --> 00:19:28,600 Speaker 2: Margaret Patel with us and we will continue with Margui 398 00:19:28,680 --> 00:19:32,760 Speaker 2: Patel of Allspring Global Investments in Boston. Good morning ninety 399 00:19:32,760 --> 00:19:35,960 Speaker 2: two nine FM in Boston. Good morning across the nation 400 00:19:36,080 --> 00:19:39,920 Speaker 2: and community. Thank you Nedlamnt for some real wisdom there 401 00:19:39,960 --> 00:19:45,119 Speaker 2: from Connecticut, the Democrat from Connecticut, particularly on the hydro power, 402 00:19:45,119 --> 00:19:48,320 Speaker 2: if you will. From Canada, Market Patel's with us with 403 00:19:48,400 --> 00:19:51,280 Speaker 2: all spring and we continue market. Do you own bonds 404 00:19:51,280 --> 00:19:55,680 Speaker 2: still or you just gone all divining growth? No? 405 00:19:56,119 --> 00:19:58,480 Speaker 8: In my portfolio I have about actually i've raised a 406 00:19:58,520 --> 00:20:02,000 Speaker 8: little over the last month. It's about sixteen seventeen percent 407 00:20:02,000 --> 00:20:04,200 Speaker 8: of the portfolio, which is a bit higher than it's 408 00:20:04,240 --> 00:20:07,199 Speaker 8: been for a while, simply because if you think this 409 00:20:07,280 --> 00:20:09,440 Speaker 8: is going to be a so so year for equities, 410 00:20:09,480 --> 00:20:12,719 Speaker 8: I'm thinking eight to maybe ten percent. High old bonds, 411 00:20:12,760 --> 00:20:15,119 Speaker 8: say yielding six and a half percent, looks like a 412 00:20:15,119 --> 00:20:16,320 Speaker 8: pretty reasonable trade. 413 00:20:16,480 --> 00:20:18,919 Speaker 9: What's as good as a dividend income anyway? 414 00:20:19,119 --> 00:20:21,679 Speaker 2: There you go, what's the duration? You're buying forty year paper? 415 00:20:23,600 --> 00:20:25,560 Speaker 8: Well, that you know, the duration of the high old 416 00:20:25,600 --> 00:20:28,560 Speaker 8: market is shortened up a lot, and it's now about 417 00:20:28,600 --> 00:20:31,679 Speaker 8: a little over three years. My duration is a bit longer, 418 00:20:31,720 --> 00:20:35,159 Speaker 8: maybe three and three quarter years. That's really it's shortened 419 00:20:35,240 --> 00:20:36,520 Speaker 8: up quite a bit in the whole market. 420 00:20:36,640 --> 00:20:39,440 Speaker 2: I think a lot of people listening, Paul, they think 421 00:20:39,480 --> 00:20:42,480 Speaker 2: a high yield is like, seriously, eight year, ten years, 422 00:20:42,520 --> 00:20:44,680 Speaker 2: twelve year duration? There are three and a half years. 423 00:20:44,760 --> 00:20:46,520 Speaker 6: Wow, that's what we've heard, yeap, Margie. 424 00:20:46,600 --> 00:20:49,040 Speaker 5: So as we step back here and if someone were 425 00:20:49,040 --> 00:20:51,840 Speaker 5: to ask you, is this a healthy pullback in an 426 00:20:51,840 --> 00:20:56,000 Speaker 5: otherwise decent equity market or is this something more? 427 00:20:56,600 --> 00:20:58,080 Speaker 6: What do you tell them? 428 00:20:58,720 --> 00:21:00,280 Speaker 9: I don't think it's anything more. 429 00:21:00,960 --> 00:21:03,560 Speaker 8: Even last fall, when we had the market really just 430 00:21:03,640 --> 00:21:07,600 Speaker 8: spike up to really incredible levels, I think most people 431 00:21:07,640 --> 00:21:10,760 Speaker 8: felt the market was a little top, a little overpriced, 432 00:21:11,040 --> 00:21:13,520 Speaker 8: so it was really set up perfectly for all the 433 00:21:13,680 --> 00:21:17,399 Speaker 8: uncertainties and negative things have appeared in this part of 434 00:21:17,440 --> 00:21:20,080 Speaker 8: the year. So you've had a big correction and non 435 00:21:20,160 --> 00:21:22,399 Speaker 8: Nasdaq is down I think about ten percent year to 436 00:21:22,480 --> 00:21:25,720 Speaker 8: day standard and Poor is about five percent, So that's 437 00:21:25,760 --> 00:21:30,080 Speaker 8: not really bargain territory yet yet. But considering that the 438 00:21:30,080 --> 00:21:33,760 Speaker 8: Fed is basically said we'll have stability was likely cups. 439 00:21:34,200 --> 00:21:36,719 Speaker 9: That's really not a bad level to look at the market. 440 00:21:37,000 --> 00:21:39,080 Speaker 8: The average pe is I think about twenty two to 441 00:21:39,160 --> 00:21:40,160 Speaker 8: twenty four times. 442 00:21:40,560 --> 00:21:42,680 Speaker 2: Margie, generous for you to be with us today. Thank 443 00:21:42,720 --> 00:21:46,120 Speaker 2: you so much for Boston with Allspring, Margie Kutel. 444 00:21:46,520 --> 00:21:50,440 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 445 00:21:50,480 --> 00:21:53,760 Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto 446 00:21:53,880 --> 00:21:56,840 Speaker 1: with the Bloomberg Business app. You can also listen live 447 00:21:56,920 --> 00:22:00,520 Speaker 1: on Amazon Alexa, from our flagship New York station. Just 448 00:22:00,560 --> 00:22:03,040 Speaker 1: say Alexa play Bloomberg eleven thirty. 449 00:22:03,119 --> 00:22:05,240 Speaker 2: We wanted to nail the math of the moment. You 450 00:22:05,320 --> 00:22:07,640 Speaker 2: do that with Stephanie Ross. She says wolf right now. 451 00:22:08,000 --> 00:22:11,520 Speaker 2: And let's go to partial differentials here. The core equation 452 00:22:11,680 --> 00:22:15,320 Speaker 2: is why well see pluscyplus G plus NX. You told 453 00:22:15,320 --> 00:22:18,639 Speaker 2: me off the mic. The consumer matters, tell me about 454 00:22:18,680 --> 00:22:22,639 Speaker 2: the dynamics of the consumer into a sub two percent 455 00:22:22,760 --> 00:22:23,560 Speaker 2: GDP call. 456 00:22:23,920 --> 00:22:26,520 Speaker 7: So if we think about the drivers of upside growth 457 00:22:26,520 --> 00:22:28,480 Speaker 7: in the past couple of years, it's been on consumption, 458 00:22:28,920 --> 00:22:31,600 Speaker 7: partially driven by the wealth effect. Now that's going the 459 00:22:31,600 --> 00:22:33,760 Speaker 7: other way to some extent. And even though it's not 460 00:22:33,800 --> 00:22:36,639 Speaker 7: all erodent, I mean it's been trillions of dollars, there 461 00:22:36,720 --> 00:22:38,399 Speaker 7: still is that sentiment. And then on top of that, 462 00:22:38,440 --> 00:22:41,280 Speaker 7: we're starting to get hit by tariffs. We basically had 463 00:22:41,400 --> 00:22:44,159 Speaker 7: double the China trade war in the last two months, 464 00:22:44,600 --> 00:22:46,879 Speaker 7: then from the twenty eighteen trade war, and that's kind 465 00:22:46,880 --> 00:22:49,000 Speaker 7: of going unoticed to some extent. And then that doesn't 466 00:22:49,040 --> 00:22:52,400 Speaker 7: confector Canada. Mexico doesn't affector reciprocal tariffs, which are likely. 467 00:22:52,200 --> 00:22:52,920 Speaker 10: Coming next month. 468 00:22:53,160 --> 00:22:55,720 Speaker 7: So this tariff thing is is a big deal likely 469 00:22:55,760 --> 00:22:58,120 Speaker 7: to knock off fifty basis points off GDP this year. 470 00:22:58,359 --> 00:22:58,560 Speaker 6: Yeah. 471 00:22:58,560 --> 00:23:01,280 Speaker 5: We just saw this this morning of the companies's reporting 472 00:23:01,320 --> 00:23:04,000 Speaker 5: earning to day. The consumer facing companies like the sporting 473 00:23:04,000 --> 00:23:08,160 Speaker 5: good stores, Dick's, Cohle's, a big department store, the airlines 474 00:23:08,880 --> 00:23:11,959 Speaker 5: all reporting weaker than expected outlook forecast. 475 00:23:12,680 --> 00:23:14,439 Speaker 6: Is that already reflecting some of. 476 00:23:14,440 --> 00:23:16,119 Speaker 5: The uncertain people we're seeing in the marketplace? 477 00:23:16,280 --> 00:23:18,800 Speaker 7: Yeah, I think it's it's certainly starting to The data 478 00:23:18,840 --> 00:23:22,280 Speaker 7: so far shouldn't have a material impact, but looking ahead, 479 00:23:22,520 --> 00:23:23,400 Speaker 7: that's definitely the case. 480 00:23:23,480 --> 00:23:24,440 Speaker 10: Uncertainty is high. 481 00:23:24,600 --> 00:23:26,960 Speaker 7: It's a problem for consumer facing companies, and it's also 482 00:23:27,080 --> 00:23:29,280 Speaker 7: a problem on the capital spending side of the economy. 483 00:23:29,320 --> 00:23:31,440 Speaker 7: How do you invest you don't know the tariff rates 484 00:23:31,560 --> 00:23:33,199 Speaker 7: and you don't know what the fate of the economy 485 00:23:33,280 --> 00:23:34,320 Speaker 7: is going to be in the next twelve months. 486 00:23:34,480 --> 00:23:37,080 Speaker 2: I want to emphasize when Stephanie Roth, the heavyweight, comes 487 00:23:37,080 --> 00:23:39,760 Speaker 2: in here and she says, we knack half a percentage 488 00:23:39,760 --> 00:23:42,600 Speaker 2: putting off on tariffs. I'm using a lower number out 489 00:23:42,600 --> 00:23:46,720 Speaker 2: of Yale University. But the answer is you take point five, folks, 490 00:23:47,240 --> 00:23:50,600 Speaker 2: and divide it by whatever your guestimate was before so 491 00:23:50,760 --> 00:23:54,080 Speaker 2: point five divided by two point five, this is stan 492 00:23:54,160 --> 00:23:57,800 Speaker 2: Fisher one oh one is a twenty percent marked down 493 00:23:58,600 --> 00:24:01,320 Speaker 2: in the growth rate. That's a lot of angs. Can 494 00:24:01,359 --> 00:24:04,119 Speaker 2: you bring that over to the labor economy. Are you 495 00:24:04,160 --> 00:24:06,520 Speaker 2: willing to give me a five percent unemployment rate? 496 00:24:06,720 --> 00:24:08,560 Speaker 7: No, I'm not willing to give you that. I think 497 00:24:08,600 --> 00:24:10,960 Speaker 7: what we'll see is we will see a bit of 498 00:24:10,960 --> 00:24:12,639 Speaker 7: an uptick in the unemployment rate. I don't think we're 499 00:24:12,680 --> 00:24:14,320 Speaker 7: getting to five percent. I think at that point the 500 00:24:14,359 --> 00:24:16,439 Speaker 7: FED is going to certainly be stepping in. And then 501 00:24:16,480 --> 00:24:19,879 Speaker 7: the dog layoffs are not that big. They add a 502 00:24:19,880 --> 00:24:24,400 Speaker 7: couple of tents at most, so it should be let 503 00:24:24,400 --> 00:24:26,000 Speaker 7: it should be more just a stall speed in terms 504 00:24:26,040 --> 00:24:28,040 Speaker 7: of hiring, which is why we're not forecasting our session. 505 00:24:28,520 --> 00:24:30,960 Speaker 5: So and that kind of goes to the administration is 506 00:24:31,000 --> 00:24:33,800 Speaker 5: making the points these days when they're challenged on some 507 00:24:33,840 --> 00:24:37,000 Speaker 5: of these economic uncertainties that are in the marketplace near 508 00:24:37,119 --> 00:24:40,480 Speaker 5: term pain for some longer term gain. Are you fact 509 00:24:40,760 --> 00:24:43,320 Speaker 5: whether it's extension of the tax cuts or just some 510 00:24:43,359 --> 00:24:46,119 Speaker 5: other economic policies that are drive growth in the back 511 00:24:46,160 --> 00:24:48,760 Speaker 5: half of twenty twenty five, Are you reflecting that in 512 00:24:48,800 --> 00:24:51,119 Speaker 5: any of your GDP work The. 513 00:24:51,480 --> 00:24:55,040 Speaker 7: Problem is the short term pain doesn't necessarily make obvious 514 00:24:55,080 --> 00:24:58,040 Speaker 7: long term gains in the sense that the tariff policies, 515 00:24:58,040 --> 00:24:59,600 Speaker 7: a lot of the tariffs that are putting put in 516 00:24:59,600 --> 00:25:02,720 Speaker 7: places are not going to bring forward manufacturing into the US. 517 00:25:03,040 --> 00:25:05,960 Speaker 7: We don't really have the capacity nor the desira ability 518 00:25:05,960 --> 00:25:08,240 Speaker 7: to produce low cost goods. Putting tariffs on that, putting 519 00:25:08,240 --> 00:25:10,920 Speaker 7: tariffs on agg it doesn't really produce long term gain, 520 00:25:10,960 --> 00:25:13,639 Speaker 7: and we still feel the near term pain. And then 521 00:25:13,680 --> 00:25:16,000 Speaker 7: when we're talking about the tax cuts, it's not really 522 00:25:16,080 --> 00:25:16,560 Speaker 7: tax cuts. 523 00:25:16,560 --> 00:25:17,760 Speaker 10: We're just extending. 524 00:25:17,320 --> 00:25:19,840 Speaker 7: Current policy with maybe a little bit of tax cuts 525 00:25:19,840 --> 00:25:22,000 Speaker 7: on tips and a couple other things. 526 00:25:22,000 --> 00:25:24,800 Speaker 10: But it's net growth negative. 527 00:25:24,600 --> 00:25:26,960 Speaker 2: Servaining wrong through this on your morning Commune with Wolf 528 00:25:26,960 --> 00:25:30,560 Speaker 2: Research across the Nation on YouTube. Thank you for subscribing 529 00:25:30,560 --> 00:25:35,159 Speaker 2: to Bloomberg Podcast. T RC first time caller out on YouTube. 530 00:25:35,160 --> 00:25:38,960 Speaker 2: We're up to forty two listeners. It's it's amazing. TRC says, 531 00:25:38,960 --> 00:25:40,720 Speaker 2: good morning, all right to Stephanie Wroth. 532 00:25:41,080 --> 00:25:43,480 Speaker 5: So, Stephanie, what do you how do you think the 533 00:25:43,520 --> 00:25:46,960 Speaker 5: Federal Reserve is kind of monitoring these developments here as 534 00:25:46,960 --> 00:25:52,840 Speaker 5: it relates to potential slowing economic growth, potential for higher inflation. 535 00:25:52,960 --> 00:25:54,239 Speaker 6: How do you think they're looking at that? 536 00:25:54,440 --> 00:25:57,040 Speaker 7: Well, certainly this week's CPI print is probably not going 537 00:25:57,080 --> 00:25:59,359 Speaker 7: to be that important for them because it doesn't factor 538 00:25:59,400 --> 00:26:01,800 Speaker 7: in that. They're going to be thinking forward, forward, ahead 539 00:26:01,840 --> 00:26:02,560 Speaker 7: at this point. 540 00:26:02,840 --> 00:26:03,920 Speaker 10: So the things they're going. 541 00:26:03,840 --> 00:26:05,800 Speaker 7: To be looking at are going to be unemployment rate, 542 00:26:05,920 --> 00:26:07,320 Speaker 7: is that starting to rise? Are they going to get 543 00:26:07,320 --> 00:26:10,040 Speaker 7: are they getting uncomfortable with that? The pace of hiring? 544 00:26:10,400 --> 00:26:12,960 Speaker 7: And then inflation expectations is going to be another key one. 545 00:26:13,080 --> 00:26:15,960 Speaker 7: And what's different this time versus the last one trade 546 00:26:16,000 --> 00:26:19,280 Speaker 7: war in twenty eighteen is inflation expectations long term are 547 00:26:19,359 --> 00:26:23,000 Speaker 7: driven mostly by your recent experience with inflation in twenty eighteen, 548 00:26:23,119 --> 00:26:24,600 Speaker 7: recent experience with inflation. 549 00:26:24,400 --> 00:26:25,119 Speaker 10: Was we had none. 550 00:26:25,480 --> 00:26:27,119 Speaker 7: This time people are going to be a lot more 551 00:26:27,200 --> 00:26:29,080 Speaker 7: concerned about inflation because they just experience. 552 00:26:29,280 --> 00:26:34,480 Speaker 2: How do you measure inflation expectations and the anchoring of 553 00:26:34,640 --> 00:26:37,760 Speaker 2: said expectations. Do you do it with Michigan or do 554 00:26:37,800 --> 00:26:38,840 Speaker 2: you look at it another way? 555 00:26:39,440 --> 00:26:41,240 Speaker 10: I mean, the Fed does look at Michigan. 556 00:26:41,280 --> 00:26:43,840 Speaker 7: The survey is not great, but they'll be looking at it, agreed, 557 00:26:43,920 --> 00:26:46,200 Speaker 7: They'll be looking at New York Fed and then market 558 00:26:46,200 --> 00:26:49,720 Speaker 7: based inflation expectations will be important too, so it'll be 559 00:26:49,840 --> 00:26:53,520 Speaker 7: a whole host of inflation expectations measures. I do imagine 560 00:26:53,560 --> 00:26:56,360 Speaker 7: you miss will still get attention, even though perhaps it's 561 00:26:56,400 --> 00:26:58,920 Speaker 7: not the best reflection. 562 00:26:59,280 --> 00:27:00,840 Speaker 10: New York Fed is probably a better one. 563 00:27:01,720 --> 00:27:04,040 Speaker 5: So where do we go from here? In terms of 564 00:27:04,080 --> 00:27:10,760 Speaker 5: thinking about this economy? Here are you forecasting that a 565 00:27:10,880 --> 00:27:13,080 Speaker 5: recession is possible? 566 00:27:13,119 --> 00:27:13,359 Speaker 2: Here? 567 00:27:13,520 --> 00:27:14,600 Speaker 6: What are your odds of that? 568 00:27:15,080 --> 00:27:17,800 Speaker 7: Odds of recession right now is about thirty five percent, 569 00:27:18,480 --> 00:27:21,119 Speaker 7: so certainly not the base case. I think the market 570 00:27:21,160 --> 00:27:24,359 Speaker 7: is just pricing in the more elevated chance of recession. 571 00:27:24,359 --> 00:27:27,320 Speaker 7: I don't think it's it's necessarily going to price in 572 00:27:27,359 --> 00:27:29,880 Speaker 7: a full recession, but right now, wasting our models, we're 573 00:27:29,880 --> 00:27:32,080 Speaker 7: looking at the market pricing in a recession about twenty 574 00:27:32,080 --> 00:27:34,280 Speaker 7: four percent. I think it probably has to get closer 575 00:27:34,280 --> 00:27:37,239 Speaker 7: to our thirty five percent before the cell offs. 576 00:27:37,280 --> 00:27:41,720 Speaker 2: On policy, I mean, your calls, which are brilliant, can 577 00:27:41,760 --> 00:27:45,960 Speaker 2: they all be amended adjusted by one comment from the 578 00:27:45,960 --> 00:27:48,520 Speaker 2: White House? That's sort of where we are, aren't we 579 00:27:48,720 --> 00:27:49,320 Speaker 2: to some extent? 580 00:27:49,359 --> 00:27:51,240 Speaker 7: And that's why we had to have make such big 581 00:27:51,359 --> 00:27:53,199 Speaker 7: changes to our forecast in the first place, Because this 582 00:27:53,240 --> 00:27:55,560 Speaker 7: is all policy related. The thing is what we're hearing, 583 00:27:55,600 --> 00:27:57,440 Speaker 7: and the actions that we've seen so far are that 584 00:27:57,680 --> 00:28:00,400 Speaker 7: they really believe in the tariffs. They're going big on them, 585 00:28:00,720 --> 00:28:03,919 Speaker 7: unlikely for them to reverse in a big way, and 586 00:28:03,960 --> 00:28:07,359 Speaker 7: they don't seem to have much concern about the market 587 00:28:07,480 --> 00:28:09,040 Speaker 7: or near term pain. I mean Trump has said this 588 00:28:09,080 --> 00:28:11,119 Speaker 7: over and over again over the past couple of weeks. 589 00:28:11,480 --> 00:28:13,240 Speaker 6: So it talk to us about the inflation. 590 00:28:14,080 --> 00:28:16,760 Speaker 5: Well, I don't know, like you know when I'm going 591 00:28:16,760 --> 00:28:18,880 Speaker 5: back and forth with Eric right now saying I want 592 00:28:18,880 --> 00:28:21,359 Speaker 5: to get an economist on who really believes and it 593 00:28:21,400 --> 00:28:25,840 Speaker 5: can articulate that Trump policy, because that is there's the 594 00:28:25,880 --> 00:28:28,760 Speaker 5: story is you know, okay, near term pain for some 595 00:28:28,840 --> 00:28:31,200 Speaker 5: longer term again, and that's great. 596 00:28:31,880 --> 00:28:33,520 Speaker 6: I just want to see how it's going to play out. 597 00:28:33,440 --> 00:28:36,280 Speaker 2: Here, brilliantly said Instep, The heart of the matter is 598 00:28:36,760 --> 00:28:41,400 Speaker 2: we've run out of capacity to do growthiness because of 599 00:28:41,440 --> 00:28:44,960 Speaker 2: our debt and deficit. That's the fundamental difference from eighty 600 00:28:45,040 --> 00:28:45,520 Speaker 2: years ago. 601 00:28:45,640 --> 00:28:49,000 Speaker 10: Right, Yeah, we're not able to do tax cuts from 602 00:28:49,080 --> 00:28:50,880 Speaker 10: degrees of freedom exactly. 603 00:28:51,080 --> 00:28:53,040 Speaker 7: I mean Trump was able to do massive tax cuts 604 00:28:53,040 --> 00:28:55,600 Speaker 7: the last time. So the setup is very different. They're 605 00:28:55,600 --> 00:28:57,520 Speaker 7: not good, They're just trying to extend them which is 606 00:28:57,560 --> 00:29:00,440 Speaker 7: costs four trillion dollars to do, just just to prevent 607 00:29:00,480 --> 00:29:02,560 Speaker 7: a large tax increase on the consumer. 608 00:29:02,720 --> 00:29:05,280 Speaker 2: Remember the exam where you had degrees of freedom and 609 00:29:05,360 --> 00:29:10,520 Speaker 2: Kai squared on the same exam. You did it all 610 00:29:10,600 --> 00:29:15,200 Speaker 2: later and finishing vodka right like titos, Stephanie, that was brilliant. 611 00:29:15,200 --> 00:29:17,920 Speaker 2: Thank you so much. Don't be a changing Stephanie Roth 612 00:29:18,120 --> 00:29:21,320 Speaker 2: driving the market lower here with Wolf Research right now. 613 00:29:21,360 --> 00:29:22,440 Speaker 2: We thank her for that. 614 00:29:29,560 --> 00:29:33,480 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 615 00:29:33,480 --> 00:29:36,520 Speaker 1: starting at seven am Eastern on Apple Corplay and Android 616 00:29:36,520 --> 00:29:39,520 Speaker 1: Auto with the Bloomberg Business app. You can also watch 617 00:29:39,600 --> 00:29:42,560 Speaker 1: us live every weekday on YouTube and always on the 618 00:29:42,600 --> 00:29:43,680 Speaker 1: Bloomberg terminal. 619 00:29:44,000 --> 00:29:47,480 Speaker 2: This guy is Frankly, who Doug Ford should talk to 620 00:29:47,920 --> 00:29:51,280 Speaker 2: in Ontario. He is expert on trucks. Paul, why don't 621 00:29:51,280 --> 00:29:53,360 Speaker 2: you bring in our esteemed guests. 622 00:29:53,400 --> 00:29:55,840 Speaker 5: Absolutely, but there's all this talk about trade tariffson, the 623 00:29:55,880 --> 00:29:59,640 Speaker 5: impact on growth and the uncertainty being injected into the 624 00:29:59,680 --> 00:30:02,240 Speaker 5: e comm One of the areas we're likely to see 625 00:30:02,280 --> 00:30:05,800 Speaker 5: it initially will be in just the supply chain. I'm 626 00:30:05,800 --> 00:30:08,720 Speaker 5: thinking about the ships coming over from Asia. I'm thinking 627 00:30:08,720 --> 00:30:12,239 Speaker 5: about the railroads, the trucks, the air freight. What are 628 00:30:12,280 --> 00:30:14,480 Speaker 5: those folks saying, Well, we've got somebody who's an expert 629 00:30:14,520 --> 00:30:17,000 Speaker 5: in all that kind of stuff. Lee Clascal, Senior Transport 630 00:30:17,000 --> 00:30:19,360 Speaker 5: analysts for Bloomberg Intelligence Joints, is here in our Bloomberg 631 00:30:19,400 --> 00:30:22,680 Speaker 5: and Director Brokers studio. Lee, what are you hearing from 632 00:30:22,920 --> 00:30:26,800 Speaker 5: some of your transportation companies as they think about how 633 00:30:26,840 --> 00:30:28,840 Speaker 5: this economy may unfold for the remainder of the year. 634 00:30:28,960 --> 00:30:32,360 Speaker 11: It's really about uncertainty unfortunately. I mean, after the election, 635 00:30:32,480 --> 00:30:35,120 Speaker 11: I think the animal spirits will woke it up. People 636 00:30:35,160 --> 00:30:37,320 Speaker 11: thought that the economy was going to be humming along, 637 00:30:37,400 --> 00:30:40,680 Speaker 11: lower taxes, less regulations. Obviously that's good for the economy, 638 00:30:40,680 --> 00:30:44,720 Speaker 11: good for freight. Fast forward to today, it's Tarris Tarris, Tarris, 639 00:30:44,840 --> 00:30:47,240 Speaker 11: tarrifs on tarras offs, you know, and people don't know 640 00:30:47,240 --> 00:30:49,560 Speaker 11: how to plan and that's really difficult. And we're not 641 00:30:49,600 --> 00:30:52,240 Speaker 11: even talking about you know, like your last guests mentioned 642 00:30:52,240 --> 00:30:55,400 Speaker 11: the inflationary impact on the economy and the consumer, and 643 00:30:55,440 --> 00:30:58,160 Speaker 11: the consumer really appears to be buckling, which really is 644 00:30:58,200 --> 00:31:02,720 Speaker 11: not good for freight to man. And it's kind of 645 00:31:03,120 --> 00:31:05,640 Speaker 11: giving us some concern about the outlook because in the 646 00:31:05,720 --> 00:31:08,480 Speaker 11: beginning of the year. We're pretty optimistic that truckload rates 647 00:31:08,480 --> 00:31:10,040 Speaker 11: could increase by mid single digits. 648 00:31:10,080 --> 00:31:13,120 Speaker 2: You're expert at this, we're not. Paul and I are clueless. 649 00:31:13,160 --> 00:31:16,959 Speaker 2: Tucker's even worse. Okay, we are. Our idea far west 650 00:31:17,080 --> 00:31:20,240 Speaker 2: is the border of Pennsylvania New Jersey. Right, let's go 651 00:31:20,400 --> 00:31:25,360 Speaker 2: to I forty two North Carolina, Goldsboro to Kinston to 652 00:31:25,440 --> 00:31:28,440 Speaker 2: Newbern and then down on south from there. There are 653 00:31:28,480 --> 00:31:34,040 Speaker 2: these manufacturing corridors, and your World Trucks makes them go. 654 00:31:34,920 --> 00:31:37,640 Speaker 2: What do the tariffs mean to the I forty two 655 00:31:37,800 --> 00:31:40,800 Speaker 2: manufacturing corridor in North Carolina? 656 00:31:41,280 --> 00:31:45,120 Speaker 11: Well, interesting enough. Like you know, there is a long 657 00:31:45,360 --> 00:31:49,120 Speaker 11: secular trend of bringing more manufacturing back to the United States, 658 00:31:50,880 --> 00:31:53,400 Speaker 11: and that's obviously a good thing, but it takes time. 659 00:31:53,560 --> 00:31:55,920 Speaker 11: So just because tariffs go on doesn't mean there's going 660 00:31:55,960 --> 00:31:58,200 Speaker 11: to be a light switch and manufacturing is going to start, 661 00:31:58,440 --> 00:32:01,440 Speaker 11: and that's going to just increase demand for trucking. So 662 00:32:01,520 --> 00:32:04,440 Speaker 11: what you're going to have really is not so much 663 00:32:04,880 --> 00:32:07,800 Speaker 11: the industrial sector. The industrial sector is going to be 664 00:32:07,840 --> 00:32:10,040 Speaker 11: impacted because of lack of demand, and we're seeing that 665 00:32:10,080 --> 00:32:13,080 Speaker 11: in flatbed rates. So flatbed rates are usually tied to 666 00:32:13,120 --> 00:32:17,600 Speaker 11: the industrial economy, and they've been pretty weak uh recently. 667 00:32:17,760 --> 00:32:19,040 Speaker 5: So that's what I was I was going to go 668 00:32:19,040 --> 00:32:22,479 Speaker 5: to because in your world, probably the shortest duration stuff 669 00:32:22,600 --> 00:32:25,680 Speaker 5: is trucking rates, right as opposed to long term freight 670 00:32:26,520 --> 00:32:29,840 Speaker 5: type negotiations. So in that spot market, are you seeing 671 00:32:29,920 --> 00:32:30,280 Speaker 5: that yet? 672 00:32:30,320 --> 00:32:31,400 Speaker 6: Are you seeing kind of? 673 00:32:31,920 --> 00:32:34,560 Speaker 11: So spot rates are up, like excluding fuel search charges 674 00:32:34,600 --> 00:32:36,440 Speaker 11: a year of year by like two or three percent, 675 00:32:36,560 --> 00:32:39,760 Speaker 11: So yeah, but you know they're still they've been coming 676 00:32:39,800 --> 00:32:42,280 Speaker 11: down recently and and that is has to do with 677 00:32:42,360 --> 00:32:45,280 Speaker 11: some seasonal weakness, but it's also I think has to 678 00:32:45,320 --> 00:32:47,280 Speaker 11: do with what's going on in the overall economy. 679 00:32:47,600 --> 00:32:50,800 Speaker 2: So I'm Mountain Ariel Tuna, Pennsylvania where there's that big. 680 00:32:52,480 --> 00:32:53,760 Speaker 6: It's like great in there, and. 681 00:32:53,680 --> 00:32:55,800 Speaker 2: There's like two trucks and I'm going to get sandwiched. 682 00:32:55,960 --> 00:32:59,440 Speaker 2: You know, are those trucks profitable now? Are? 683 00:33:00,160 --> 00:33:02,880 Speaker 11: It depends who's running them. So if it's an owner 684 00:33:02,920 --> 00:33:06,200 Speaker 11: operator they got into the business during the pandemic when 685 00:33:06,320 --> 00:33:09,640 Speaker 11: rates were five or six dollars a mile, those people 686 00:33:09,680 --> 00:33:12,360 Speaker 11: aren't making money because they've bought a very expensive truck 687 00:33:12,400 --> 00:33:15,520 Speaker 11: and now rates are two dollars a mile, and that 688 00:33:15,640 --> 00:33:18,760 Speaker 11: is obviously impacts your operating costs. A lot of those 689 00:33:18,800 --> 00:33:21,920 Speaker 11: kind of truckers have been on life support in part 690 00:33:22,040 --> 00:33:27,160 Speaker 11: because of the stimulus that was available to them from 691 00:33:27,240 --> 00:33:30,320 Speaker 11: the government during the pandemic and the savings that they 692 00:33:30,360 --> 00:33:34,120 Speaker 11: were able to create during those boom times. And so 693 00:33:34,160 --> 00:33:37,280 Speaker 11: we're seeing that capacity slowly leave the market. You know, 694 00:33:37,320 --> 00:33:39,720 Speaker 11: the Nights of the world and the JV Hunts of 695 00:33:39,720 --> 00:33:41,280 Speaker 11: the world. Yes, they're making money. 696 00:33:41,680 --> 00:33:45,120 Speaker 5: What are the big the maritime shippers, the global you 697 00:33:45,160 --> 00:33:48,719 Speaker 5: know shippers that you talk to, are they expecting that 698 00:33:48,720 --> 00:33:51,400 Speaker 5: these tariffs are going to be on on for a 699 00:33:51,440 --> 00:33:55,000 Speaker 5: long period of time and in fact will impact global shipping. 700 00:33:55,520 --> 00:33:58,640 Speaker 11: I was at a major Transpacific conference last week. It's 701 00:33:58,720 --> 00:34:02,440 Speaker 11: TPM every it's held every week and every year in 702 00:34:02,480 --> 00:34:04,120 Speaker 11: Long Beach, and I got to speak to a lot 703 00:34:04,120 --> 00:34:06,160 Speaker 11: of shippers and really they don't know. 704 00:34:06,280 --> 00:34:06,560 Speaker 3: Wow. 705 00:34:06,680 --> 00:34:09,560 Speaker 11: And that's what that's the problem. No one knows because 706 00:34:09,760 --> 00:34:11,640 Speaker 11: you know, in the morning there's a tariff, and then 707 00:34:11,719 --> 00:34:13,360 Speaker 11: the afternoon it's there's no tariff. 708 00:34:13,400 --> 00:34:15,239 Speaker 2: If your journey I saw across the nation in your 709 00:34:15,280 --> 00:34:19,239 Speaker 2: morning career, Lee Clasgow, where this is absolutely definitive for 710 00:34:19,280 --> 00:34:23,360 Speaker 2: Bloomberg Intelligence and all this infrastructure stuff led by trucking. 711 00:34:23,440 --> 00:34:25,920 Speaker 2: I think it was I'm going to say Prudential or 712 00:34:26,040 --> 00:34:29,480 Speaker 2: Biche or both, I can't remember. It would publish and 713 00:34:29,520 --> 00:34:31,080 Speaker 2: I would just look at it and just stop, and 714 00:34:31,120 --> 00:34:33,520 Speaker 2: you'd read every word of Classgo. This is a few 715 00:34:33,560 --> 00:34:37,320 Speaker 2: years ago, folks. What would you say to Doug Ford 716 00:34:37,840 --> 00:34:42,040 Speaker 2: of Toronto, Ontario, the leader of Ontario. He holds the 717 00:34:42,120 --> 00:34:46,680 Speaker 2: electrical switch for I think three states? Do they have powered? 718 00:34:46,719 --> 00:34:49,239 Speaker 2: When you when you look forget about you Carne and 719 00:34:49,280 --> 00:34:51,719 Speaker 2: the election and all that, when you look at the 720 00:34:51,760 --> 00:34:56,000 Speaker 2: provinces what are they called? The states? The provinces, the 721 00:34:56,040 --> 00:34:59,320 Speaker 2: provinces of Canada, Do they have a lot of strings. 722 00:34:58,920 --> 00:34:59,880 Speaker 4: So much this morning? 723 00:35:00,160 --> 00:35:05,040 Speaker 11: Yes, in relation to the President Trump and tariffs, that's 724 00:35:05,120 --> 00:35:07,560 Speaker 11: that's that's way above my pay grade. I have no 725 00:35:07,680 --> 00:35:10,319 Speaker 11: idea about that. I mean, obviously, you know, if you're 726 00:35:10,360 --> 00:35:12,799 Speaker 11: if you're willing to charge a lot more for electricity, 727 00:35:12,960 --> 00:35:14,680 Speaker 11: it's going to annoy a lot of your voters. So 728 00:35:14,840 --> 00:35:16,040 Speaker 11: I think they do have some power. 729 00:35:16,200 --> 00:35:18,960 Speaker 5: Warren Buffet owns a railroad, he does, and his railroad 730 00:35:19,120 --> 00:35:22,120 Speaker 5: is really predicated upon that trade from Canada through the 731 00:35:22,239 --> 00:35:23,880 Speaker 5: US down in New Mexico. 732 00:35:25,320 --> 00:35:27,000 Speaker 6: What are we hearing from that company. 733 00:35:28,600 --> 00:35:31,759 Speaker 11: Burlington Northern Santa Fe. They are more exposed to the 734 00:35:31,800 --> 00:35:35,200 Speaker 11: Transpacific trade, so they're big with stuff coming into the 735 00:35:35,239 --> 00:35:38,640 Speaker 11: Port of La and Long Beach bringing that stuff across 736 00:35:38,680 --> 00:35:41,560 Speaker 11: the country. Also, they're obviously big in coal an ag. 737 00:35:42,440 --> 00:35:47,320 Speaker 11: You know, the rails have been doing okay. We've seen 738 00:35:47,400 --> 00:35:50,160 Speaker 11: some volume growth of low single digits. 739 00:35:49,840 --> 00:35:51,000 Speaker 6: Which is which is good. 740 00:35:51,600 --> 00:35:54,160 Speaker 11: The railroads, whether it's you know, Bien or the other 741 00:35:54,800 --> 00:35:58,160 Speaker 11: class ones, they have pricing power still, so that's good. 742 00:35:58,280 --> 00:35:59,719 Speaker 6: The one that's most exposed to the. 743 00:35:59,719 --> 00:36:03,680 Speaker 11: Tower noise is really Canadian Pacific, Kansas City, that's the one. 744 00:36:03,840 --> 00:36:08,600 Speaker 11: They have a network that spans Canada into Mexico. It's 745 00:36:08,640 --> 00:36:11,399 Speaker 11: an incredible network. They have a lot of growth opportunities 746 00:36:11,480 --> 00:36:13,960 Speaker 11: relative to their peers. But that's really going to depend 747 00:36:14,040 --> 00:36:17,120 Speaker 11: on tariffs. And you know, I personally think that tariffs 748 00:36:17,120 --> 00:36:19,440 Speaker 11: will be more transitory. I think I said that in 749 00:36:19,640 --> 00:36:23,160 Speaker 11: that inflation a couple of years ago. But yeah, so 750 00:36:23,239 --> 00:36:24,759 Speaker 11: don't quote me on that, but you know, it just 751 00:36:24,800 --> 00:36:25,960 Speaker 11: feels like they're not going. 752 00:36:25,840 --> 00:36:26,680 Speaker 6: To be here forever. 753 00:36:26,760 --> 00:36:29,560 Speaker 11: It's more or of a negotiating tactic that is to 754 00:36:29,560 --> 00:36:31,919 Speaker 11: create noise and havoc within the supply chain. 755 00:36:32,000 --> 00:36:36,520 Speaker 2: So Canadian National with that wonderful acquisition down the Mississippi River. Yeah, 756 00:36:36,600 --> 00:36:39,719 Speaker 2: it's a big t folks, it's across Canada and it's 757 00:36:39,760 --> 00:36:43,799 Speaker 2: down the Mississippi River. How are they affected by tariffs? 758 00:36:44,120 --> 00:36:46,920 Speaker 2: And for you is not. I don't want to buy hotel, 759 00:36:47,040 --> 00:36:48,919 Speaker 2: but there is there an opportunity there. 760 00:36:49,680 --> 00:36:52,759 Speaker 11: Well, you know, whether it's CP or CN, you know, 761 00:36:52,800 --> 00:36:55,160 Speaker 11: they are exposed to cross border business. I would say 762 00:36:55,520 --> 00:36:59,640 Speaker 11: roughly thirty percent percent of their businesses cross border. So 763 00:36:59,800 --> 00:37:03,479 Speaker 11: you know, it has a big impact on where trade goes. 764 00:37:04,200 --> 00:37:07,200 Speaker 11: You know, obviously if we're if if we're if Canada 765 00:37:07,239 --> 00:37:11,080 Speaker 11: is importing less Jack Daniels, Uh, and we're and we're 766 00:37:11,080 --> 00:37:13,920 Speaker 11: we're importing less maple syrup, then that's going to impact 767 00:37:13,960 --> 00:37:14,680 Speaker 11: freight flows. 768 00:37:14,880 --> 00:37:15,080 Speaker 3: You know. 769 00:37:15,280 --> 00:37:15,839 Speaker 10: The thing that. 770 00:37:15,760 --> 00:37:19,440 Speaker 11: Concerns me the most, uh, from from my coverage is 771 00:37:19,440 --> 00:37:21,920 Speaker 11: is the forest products. You know, those tariffs on on 772 00:37:22,000 --> 00:37:25,560 Speaker 11: forest products are not are really going to impact the 773 00:37:25,600 --> 00:37:28,960 Speaker 11: cost of housing. And if houses are more expensive, less 774 00:37:28,960 --> 00:37:30,279 Speaker 11: people are going to be able to afford them. That 775 00:37:30,280 --> 00:37:31,479 Speaker 11: means they're going to be building less. 776 00:37:31,480 --> 00:37:32,720 Speaker 6: That means they're going to be less freight. 777 00:37:33,040 --> 00:37:36,360 Speaker 11: So this is really you know, obviously, I know you 778 00:37:36,360 --> 00:37:39,000 Speaker 11: guys know this. But tariffs are taxes. They're there and 779 00:37:39,080 --> 00:37:41,040 Speaker 11: somebody has to pay for it, and eventually it's the 780 00:37:41,080 --> 00:37:43,759 Speaker 11: consumer and that's going to eat up on what they. 781 00:37:43,640 --> 00:37:47,000 Speaker 2: Set for John Tucker, sheet of plywood in home depot 782 00:37:47,120 --> 00:37:47,919 Speaker 2: is going to cost more. 783 00:37:48,040 --> 00:37:52,080 Speaker 6: Probably. See there you go ce d X, I don't know. 784 00:37:52,160 --> 00:37:54,239 Speaker 2: I only use c d X if I pick up 785 00:37:54,239 --> 00:37:57,000 Speaker 2: a hammer, people run, that's what I do. 786 00:37:57,000 --> 00:38:00,400 Speaker 12: Do you want to do? Trucking terms, Bob have all 787 00:38:00,440 --> 00:38:05,640 Speaker 12: these questions, reefer, bobtail, deadhead. Yeah, all the trucking terms. 788 00:38:05,520 --> 00:38:09,759 Speaker 11: Refer a refrigerated truck so that will haul produce or 789 00:38:10,000 --> 00:38:13,680 Speaker 11: maybe even pharmaceuticals and sometimes even electronics. It doesn't have 790 00:38:13,719 --> 00:38:15,760 Speaker 11: to be cold, it just needs to be a certain temperature, 791 00:38:16,080 --> 00:38:20,160 Speaker 11: so you know, So that's reefer. It's also I guess 792 00:38:20,200 --> 00:38:20,640 Speaker 11: you can. 793 00:38:20,600 --> 00:38:23,040 Speaker 6: Well we know, yeah, and then deadhead. You know that 794 00:38:23,160 --> 00:38:24,200 Speaker 6: has a good segue. 795 00:38:24,400 --> 00:38:27,200 Speaker 12: Refer to deadhead what an empty truck? 796 00:38:27,239 --> 00:38:30,439 Speaker 11: I guess right, yeah, yes, the deadhead. The dead head 797 00:38:30,680 --> 00:38:33,840 Speaker 11: is how the distance that a truck travels without freight. 798 00:38:34,120 --> 00:38:36,520 Speaker 12: And then a bobtail is are you done? 799 00:38:36,840 --> 00:38:36,920 Speaker 2: No? 800 00:38:37,880 --> 00:38:40,040 Speaker 12: This is what we go on forever. Bobtail is without 801 00:38:40,040 --> 00:38:41,920 Speaker 12: a trailer, just a cab itself. 802 00:38:42,080 --> 00:38:45,160 Speaker 2: Okay, there you go. Thank you. That's the most important, 803 00:38:46,840 --> 00:38:47,400 Speaker 2: so much. 804 00:38:47,520 --> 00:38:52,360 Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify, 805 00:38:52,480 --> 00:38:56,760 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 806 00:38:56,880 --> 00:39:00,000 Speaker 1: seven to ten am Easter and on Bloomberg dot com, 807 00:39:00,280 --> 00:39:04,080 Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app. 808 00:39:04,360 --> 00:39:07,480 Speaker 1: You can also watch us live every weekday on YouTube 809 00:39:07,760 --> 00:39:09,800 Speaker 1: and always on the Bloomberg terminal.