WEBVTT - US Consumer Sentiment Falls, Bump Stock Ban Tossed 0:00:00.600 --> 0:00:10.799 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.840 --> 0:00:15.040 Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 0:00:15.040 --> 0:00:18.040 Eastern on Apple CarPlay and Android Auto with the Bloomberg 0:00:18.079 --> 0:00:21.400 Business App. Listen on demand wherever you get your podcasts, 0:00:21.640 --> 0:00:24.000 or watch us live on YouTube. 0:00:25.200 --> 0:00:27.560 The market moving event of the morning is University of 0:00:27.600 --> 0:00:30.160 Michigan Sentiment. It is one of my favorite indicators. It's 0:00:30.160 --> 0:00:33.000 definitely my desert island indicator. This is the preliminary read 0:00:33.560 --> 0:00:35.960 for June, and you're looking at the index sixty five 0:00:35.960 --> 0:00:38.920 point six. That's a seven month low, current conditions, low 0:00:39.040 --> 0:00:43.640 expectations falling one, your inflation expectations rising to three point three. 0:00:43.960 --> 0:00:47.479 Joanneshu is the University of Michigan Surveys of Consumers Director 0:00:47.520 --> 0:00:50.880 and she joins us. Now, Joanne, what led this decline? 0:00:52.320 --> 0:00:54.440 I think we need to look back one more month 0:00:54.560 --> 0:00:58.120 to really understand what's going on. Between April and May, 0:00:58.480 --> 0:01:01.440 consumer sentiment dropp about ten ten percent, and between May 0:01:01.480 --> 0:01:05.319 and June it's essentially flat. Yes, it's a little lower 0:01:05.360 --> 0:01:09.040 between June than May, but really it's within this margin 0:01:09.040 --> 0:01:11.200 of era and we should interpret that as no change. 0:01:11.280 --> 0:01:15.600 But what happened this month was that compared to last month, 0:01:15.680 --> 0:01:19.679 consumers were getting rared that labor markets were starting to weekend. 0:01:19.720 --> 0:01:22.160 They were worried that interest rates were not moving in 0:01:22.200 --> 0:01:25.480 the right direction, and that the inflation slowed down wasn't 0:01:25.520 --> 0:01:29.000 really happening high and fast enough. And that's exactly how 0:01:29.040 --> 0:01:33.440 consumers continue to feel right now. Those concerns remain in place, 0:01:33.800 --> 0:01:37.760 and consumers don't really see a material change in the 0:01:37.800 --> 0:01:39.559 economy between last month and this month. 0:01:40.120 --> 0:01:42.760 Joe, and it seems like again, inflation. We hear it 0:01:42.840 --> 0:01:46.000 in you know, some of the political polling that we see, 0:01:46.440 --> 0:01:48.200 and we see it in you know, some of the 0:01:48.400 --> 0:01:52.000 other I think surveys that we see. It's still a big, 0:01:52.000 --> 0:01:55.280 big issue for consumers. Even if the rate of inflation 0:01:55.880 --> 0:01:59.200 is slowing, those higher pricing levels are really problematic, aren't they. 0:02:00.120 --> 0:02:02.680 That's absolutely right. The share of consumers that are telling 0:02:02.800 --> 0:02:05.360 us that high prices are eroding their living standards remains 0:02:05.400 --> 0:02:08.440 quite high, and in fact, it did go up between 0:02:09.200 --> 0:02:13.000 May and June. However, consumers have noticed that inflation has slowed, 0:02:13.040 --> 0:02:15.720 and that bears out in the inflation expectations that that 0:02:15.760 --> 0:02:18.480 have come down quite dramatically over the last two years 0:02:18.480 --> 0:02:23.440 and even in the last last six months or so. However, consumers, 0:02:23.639 --> 0:02:25.760 you know, aren't really sure that inflation is going to 0:02:25.800 --> 0:02:30.280 continue decelerating at at a pace that they would like. 0:02:31.480 --> 0:02:34.519 And you know, there are aspects of inflation that continue 0:02:34.520 --> 0:02:37.840 to be really troublesome, in particular the cost of housing 0:02:37.880 --> 0:02:40.920 and insurance. These are things that are going to continue 0:02:40.960 --> 0:02:43.360 to weigh on consumers even if gas prices come down, 0:02:43.400 --> 0:02:46.440 our food prices come gas prices come down, and food 0:02:46.440 --> 0:02:47.320 inflation comes down. 0:02:47.400 --> 0:02:49.000 Now, of course it has happened though before the FED 0:02:49.040 --> 0:02:50.959 meeting this week, when we sort of got more insight 0:02:51.040 --> 0:02:53.560 into the dot plot and sort of whatever cuts we 0:02:53.639 --> 0:02:57.400 may get, would consumers feel materially different maybe on your 0:02:57.440 --> 0:02:59.120 second read based off of that or No. 0:03:00.400 --> 0:03:02.920 It's possible that they may feel different at the end 0:03:02.919 --> 0:03:06.400 of the month, but I wouldn't necessarily interpret any change 0:03:06.440 --> 0:03:09.800 between now and the final reading as attributable to uh, 0:03:10.080 --> 0:03:17.040 the FED policy announcements and the FOMC meeting consequences. You know, 0:03:17.080 --> 0:03:20.600 consumers aren't really paying attention to that. What they will 0:03:20.600 --> 0:03:23.639 pay attention to is, you know, if if they're starting 0:03:23.639 --> 0:03:27.760 to feel some relief as they are working through their budgets, 0:03:28.560 --> 0:03:30.800 and if they are starting to see any sort of 0:03:30.800 --> 0:03:35.240 positive developments or continued strength and labor markets. The big 0:03:35.240 --> 0:03:40.440 deterioration in labor market expectations that began in May, you know, 0:03:40.600 --> 0:03:45.640 was on the heels of some weakening jobs reports, and 0:03:45.640 --> 0:03:49.320 and so we'll we'll see what consumers experiences are like 0:03:49.520 --> 0:03:50.520 through the rest of the month. 0:03:50.880 --> 0:03:52.720 Very good, Joanne, Thank you so much for joining us. 0:03:52.760 --> 0:03:56.600 Juan Shoe, She's a Surveys of Consumers director at the 0:03:56.960 --> 0:04:00.400 University of Michigan. Not just good football players, but good 0:04:00.440 --> 0:04:02.520 economists as well. So that's we like at the u 0:04:02.880 --> 0:04:03.800 University of Michigan. 0:04:05.200 --> 0:04:09.080 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:04:09.160 --> 0:04:12.680 weekdays at ten am Eastern on applecar Play and Android 0:04:12.680 --> 0:04:15.480 Otto with the Bloomberg Business Act. You can also listen 0:04:15.600 --> 0:04:18.680 live on Amazon Alexa from our flagship New York station 0:04:19.040 --> 0:04:22.799 Just Say Alexa playing Bloomberg eleven thirty. 0:04:23.600 --> 0:04:26.240 Joining us now, Harold Krent. He is a professor of 0:04:26.320 --> 0:04:28.920 law at Chicago Kank College of Law, the author of 0:04:28.920 --> 0:04:32.600 the book Presidential Powers. Harold, we appreciate you jumping on 0:04:32.680 --> 0:04:36.560 with us. So the news, of course is a bumstock 0:04:36.640 --> 0:04:39.800 ban is tossed out by the Supreme Court walk us 0:04:39.839 --> 0:04:42.839 through what you know, what you've seen, and your reaction. 0:04:44.279 --> 0:04:46.159 Yeah, I mean, I think your discussion of it was 0:04:46.320 --> 0:04:48.880 right on point. There was a nineteen thirty four statute 0:04:49.080 --> 0:04:53.520 called the National Firearms Act, which bans machine guns, and 0:04:53.560 --> 0:04:59.400 so the question is whether this altered semi automatic shotgun 0:05:00.839 --> 0:05:03.000 a machine gun. It does in many ways because it 0:05:03.080 --> 0:05:08.440 fires automatically. However, it looks different and it's trigger mechanism 0:05:08.560 --> 0:05:11.040 is slightly different in terms of how many times you 0:05:11.160 --> 0:05:14.279 have to press it before you can shoot a large 0:05:14.360 --> 0:05:17.880 number of shots. So it functions identically to a machine gun, 0:05:18.160 --> 0:05:23.359 though it works slightly differently. And so the Bureau of Alcohol, Firearms, 0:05:23.360 --> 0:05:27.640 and Tobacco is the agency in charge of regulating guns 0:05:27.920 --> 0:05:31.360 in our federal system, and it has changed its mind 0:05:31.480 --> 0:05:34.440 about whether a bump stock is equivalent to a machine 0:05:34.440 --> 0:05:37.640 gun or not. Originally it's said that it was distinct 0:05:37.720 --> 0:05:40.599 from a machine gun, and so it did not outlaw 0:05:41.440 --> 0:05:44.880 use of the bump stock under the National Firearms Act. 0:05:45.040 --> 0:05:48.720 But after the Las Vegas tragedy, as you suggested, it 0:05:48.760 --> 0:05:53.200 was indeed the agency under the Trump administration which had 0:05:53.240 --> 0:05:58.520 a fresh look and on the qualities and characteristics of 0:05:58.560 --> 0:06:02.400 this bump stock and said, you know, because it functions 0:06:02.480 --> 0:06:04.880 so similarly to a machine gun, we are going to 0:06:04.920 --> 0:06:07.320 classify it as a machine gun and therefore consider it 0:06:07.400 --> 0:06:10.520 banned under the Act. And the six ' three conservative 0:06:10.560 --> 0:06:16.279 majority basically was not persuaded and red machine gun in 0:06:16.360 --> 0:06:19.839 that sort of narrow context, gave no deference to the 0:06:19.960 --> 0:06:24.680 agency whatsoever, and concluded therefore that a bump stock was 0:06:24.720 --> 0:06:27.679 not a machine gun and therefore the agency had overset 0:06:27.720 --> 0:06:29.880 its bounds in trying to ban it. 0:06:30.320 --> 0:06:33.320 So, Professor, I know we're just minutes into this, but 0:06:33.400 --> 0:06:37.839 I mean, what are the practical ramifications of this decision today? 0:06:39.000 --> 0:06:43.960 Well, if we want to ban bump stocks, it has 0:06:44.000 --> 0:06:47.720 to be from Congress. Congress is only then. I don't 0:06:47.720 --> 0:06:49.960 think that there would be an issue under the Second Amendment. 0:06:50.000 --> 0:06:52.960 Obviously somebody could raise it, but I think, you know, 0:06:53.120 --> 0:06:56.400 grenades and machine guns are not the kind of usual 0:06:56.440 --> 0:06:59.520 weapons that were around at the founding, and so therefore 0:07:00.080 --> 0:07:03.160 presumably they can be banned by Congress, but they can't 0:07:03.200 --> 0:07:06.719 be through an act of an administration. It has to 0:07:06.760 --> 0:07:09.600 be from our elected representatives themselves. 0:07:10.440 --> 0:07:12.760 Do we learn anything about how the court voted and 0:07:12.800 --> 0:07:14.960 what the opinion looks like in relation to the other 0:07:15.040 --> 0:07:17.360 gun case that is on the docket for. 0:07:17.320 --> 0:07:20.000 Them, I don't think so. I don't think there any 0:07:20.080 --> 0:07:22.120 kind of seeds or any kind of clues about what's 0:07:22.120 --> 0:07:24.360 going to happen in Raheemi, which you know, I agree 0:07:24.480 --> 0:07:29.160 is far more controversial case. But this is sort of 0:07:29.240 --> 0:07:32.080 a you know, if you look at this case from 0:07:32.120 --> 0:07:35.320 on high, it's sort of remarkable, right, I mean, a 0:07:35.360 --> 0:07:41.160 bumpstock converts a shotgun into something that is automatically firing 0:07:41.360 --> 0:07:45.000 and has the same characteristics as a machine gun. And 0:07:45.040 --> 0:07:47.680 if we can ban machine guns because we don't think 0:07:47.680 --> 0:07:50.800 that's needed for you know, hunting or any other kind 0:07:50.800 --> 0:07:54.640 of lawful use of a weapon, then I don't understand. 0:07:54.800 --> 0:07:57.600 It sort of defies belief that six of our justices 0:07:58.080 --> 0:08:01.520 rejected an agency decision under the Trump administration that have 0:08:01.600 --> 0:08:06.120 classifies these bump stocks as converting a shotgun into a 0:08:06.160 --> 0:08:06.720 machine gun. 0:08:07.400 --> 0:08:11.800 So, Professor, how rare or unusual are six to three 0:08:11.840 --> 0:08:15.560 decisions like this in terms of party lines being so 0:08:15.960 --> 0:08:19.240 you know, rigidly followed. How do you think about that? 0:08:19.440 --> 0:08:21.480 Just in the history of the Supreme Court? 0:08:22.400 --> 0:08:25.160 Yeah, And I don't have great statistics going back in 0:08:25.240 --> 0:08:28.600 terms of the set sort of you know, conservative liberal 0:08:29.760 --> 0:08:34.439 fissures within the Supreme Court. But we've certainly seen periods 0:08:34.480 --> 0:08:38.520 of time where the voting structures are comparable to this, 0:08:38.760 --> 0:08:40.560 where there is a block on one side and a 0:08:40.559 --> 0:08:43.240 block on the other, and only in the cases are 0:08:43.280 --> 0:08:47.320 more interesting, of course, when their decides come together or 0:08:47.480 --> 0:08:51.839 they have sort of innovative decisions that bridge the gap 0:08:51.920 --> 0:08:56.280 and you can get a majority of liberal conservative together. 0:08:56.400 --> 0:08:59.880 So it does reflect the fact that there's polarization. There's 0:09:00.240 --> 0:09:03.600 question about it, and the six ' three is you know, 0:09:03.640 --> 0:09:06.280 obviously was true on the Dodds case and the abortion 0:09:06.400 --> 0:09:09.520 case and many others, and we'll continue to see that. 0:09:09.640 --> 0:09:12.080 There was another case deciding today that had to do 0:09:12.240 --> 0:09:16.080 with the rights of immigrants to get a second hearing 0:09:16.360 --> 0:09:19.199 at an asylum and it was not a major case 0:09:19.240 --> 0:09:21.439 on the asylum law because they had to do with how 0:09:21.640 --> 0:09:25.080 defective the notice was for a defective notice for a hearing, 0:09:25.360 --> 0:09:28.480 whether or not they should be allowed if it's defective 0:09:28.559 --> 0:09:32.520 to have another notice for a hearing before they're reported. 0:09:33.320 --> 0:09:36.120 But once again sixth to be split. So it's not 0:09:36.240 --> 0:09:38.120 surprising and I think we're going to see more of 0:09:38.160 --> 0:09:40.520 these and with the next twenty or so opinions that 0:09:40.559 --> 0:09:41.000 are to come. 0:09:42.000 --> 0:09:43.400 When you take a look at the rest of the 0:09:43.440 --> 0:09:46.520 docket for the Supreme Court, what are you focused on 0:09:46.640 --> 0:09:49.320 most in terms of how what it will tell you 0:09:49.360 --> 0:09:53.199 either about the court makeup or the ramifications. 0:09:53.200 --> 0:09:57.200 Well, to me, and since I do focus on the 0:09:57.200 --> 0:10:01.600 administrative law of how set that this court is to 0:10:01.640 --> 0:10:06.679 dismantle our traditional notion of what administrative agencies are and 0:10:06.720 --> 0:10:12.080 how administrations can regulate the environment and regulate the business sector. 0:10:12.400 --> 0:10:17.120 Those there are at least three extremely important cases that 0:10:17.120 --> 0:10:20.040 are pending, and they have the seeds in them of 0:10:20.120 --> 0:10:24.200 radically reshaping how our government works, because if you take 0:10:24.240 --> 0:10:27.640 away the powers of these governing administrative agencies, there'll be 0:10:27.720 --> 0:10:33.120 a lot less regulation. And a lot less regulation can mean, obviously, 0:10:33.120 --> 0:10:37.480 in most people, more pollution, more practices by businesses that 0:10:37.600 --> 0:10:42.040 hurt individuals, and that's what is really gaining my focus. 0:10:43.200 --> 0:10:48.280 So, Professor here, presumably does the Supreme Court do they 0:10:48.360 --> 0:10:51.040 care how the public views them? Or are they really 0:10:51.160 --> 0:10:54.480 just pure independent, they're there for life type of thing. 0:10:56.400 --> 0:10:59.199 You know, it's a great question. I think that Careen 0:10:59.240 --> 0:11:02.200 once one way, I mean Chief Justice Roberts in particular 0:11:02.280 --> 0:11:05.680 has been known for trying to shore the institutional respect 0:11:06.360 --> 0:11:08.640 of the Court. But a lot of the members of 0:11:08.679 --> 0:11:11.480 the Court, and obviously it's if you want to name names. 0:11:11.520 --> 0:11:17.160 I mean, it's no secret that Alido in particular is 0:11:17.160 --> 0:11:19.560 that the view that I have power. I don't know 0:11:19.559 --> 0:11:21.120 how long I'm going to have this power. This is 0:11:21.120 --> 0:11:23.719 a unique moment in history where we can really contribute 0:11:24.040 --> 0:11:28.360 to the rearranging the way the government works. And he'll 0:11:28.360 --> 0:11:30.120 do that and it doesn't care at all about what 0:11:30.160 --> 0:11:32.520 people think of him. So I think there is a 0:11:32.559 --> 0:11:36.320 split amongst the and I think Justice Barrett is probably 0:11:36.320 --> 0:11:38.400 with Chief Justice Roberts so that they do care about 0:11:38.400 --> 0:11:41.640 the institutional legitimacy of the court. But there are some 0:11:42.040 --> 0:11:43.840 members of the Court who just want to take the 0:11:43.880 --> 0:11:46.720 moment in the sun and use the power to the 0:11:46.720 --> 0:11:49.400 best way they can to shape America in their image. 0:11:50.000 --> 0:11:50.120 Right. 0:11:50.120 --> 0:11:52.520 Well, we really appreciate your incident analysis here for us. 0:11:52.520 --> 0:11:55.480 Harold Krentt, he's professor of law at Chicago Kent College 0:11:55.760 --> 0:11:58.680 of Law and author of the book Presidential Powers. Again, 0:11:58.760 --> 0:12:01.280 that breaking news that in a six 't three vote 0:12:01.320 --> 0:12:05.160 along ideological lines, the Supreme Court voted a criminal prohibition 0:12:05.200 --> 0:12:09.320 put in place by the Trump administration to ban bump 0:12:09.360 --> 0:12:13.480 stocks is thrown out. That bam tossed out by the 0:12:13.520 --> 0:12:14.840 Supreme Court. 0:12:15.840 --> 0:12:19.720 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:12:19.800 --> 0:12:22.880 weekdays at ten am Eastern on Apple Car playing Android 0:12:22.920 --> 0:12:26.000 Otto with the Bloomberg Business App. Listen on demand wherever 0:12:26.080 --> 0:12:29.920 you get your podcasts, or watch us live on YouTube. 0:12:31.200 --> 0:12:33.800 Let's get to Tesla back in the news again. It 0:12:33.840 --> 0:12:35.760 looks like our good friend Elon Musk is going to 0:12:35.800 --> 0:12:38.760 get that pay reward that he believes and now his 0:12:38.800 --> 0:12:42.200 shareholders believe that he deserves. David Waltz joins us Detroit 0:12:42.240 --> 0:12:46.240 Bureau chief for Bloomberg News. David talk to us about 0:12:46.320 --> 0:12:49.960 what this pay package is from Tesla for Elon Muskin 0:12:50.040 --> 0:12:52.520 and kind of what does it mean for the company. 0:12:52.640 --> 0:12:55.400 So that this was a big package negotiated in bombing 0:12:55.480 --> 0:13:00.400 stock stock options going back I think twenty eighteen. And 0:13:00.440 --> 0:13:03.640 the controversy is that shareholders said that this is a 0:13:03.679 --> 0:13:06.240 rubber stand board put in place by Elon. They didn't 0:13:06.280 --> 0:13:09.200 really have a great view into what they were getting. 0:13:09.280 --> 0:13:13.720 So spurred a bunch of lawsuits, and Delaware Chancery Court 0:13:13.840 --> 0:13:18.000 ruled in the shareholder's favor it's expected to be under appeal, 0:13:18.559 --> 0:13:21.720 but shareholders approved it, and so that really complicates things 0:13:21.920 --> 0:13:24.960 as we get into the appeal that shareholders who feel 0:13:24.960 --> 0:13:27.679 aggrieved are going to go into court saying that they 0:13:27.679 --> 0:13:30.120 didn't know what they were getting and it's not a 0:13:30.120 --> 0:13:33.400 good deal, even though the majority of shareholders who hold 0:13:33.400 --> 0:13:36.720 the stock now approved the deal. The other thing that 0:13:36.760 --> 0:13:41.080 they passed is that Tesla will change its domicile to Texas, 0:13:41.120 --> 0:13:45.319 where the headquarters already is more business friendly laws there. 0:13:45.760 --> 0:13:51.480 And so if Tesla wins its appeal, or even if 0:13:51.520 --> 0:13:56.360 they lose it, Elon and the board could just create 0:13:56.400 --> 0:14:00.400 another similar pay package for him in tex Is under 0:14:00.440 --> 0:14:02.640 Texas law, and then it would probably start this cycle 0:14:02.640 --> 0:14:04.080 all over again, but it would be in a different 0:14:04.080 --> 0:14:06.679 court that could be more friendly to the company and 0:14:06.720 --> 0:14:10.240 to Elon Musk. So you know this, this is far 0:14:10.280 --> 0:14:13.199 from over, this whole fight over the pay package. What 0:14:13.200 --> 0:14:15.240 it does mean for a near term right now is 0:14:15.600 --> 0:14:19.200 the shareholders are endorsing Elon Musk and they're saying, we 0:14:19.720 --> 0:14:21.240 you know, this is the guy we want to stick with. 0:14:22.080 --> 0:14:24.320 Wind loser draw on the legal actions. 0:14:24.920 --> 0:14:27.880 So are we done talking about it now? Like I mean, 0:14:28.040 --> 0:14:29.320 are we done? 0:14:31.520 --> 0:14:35.280 Well, what else does it mean for Tesla? You know 0:14:35.960 --> 0:14:38.000 the bigger issues I think for this company? 0:14:38.360 --> 0:14:39.880 Well sure, but now I know the bigger issues. But 0:14:39.880 --> 0:14:41.480 before we move on, like in terms of the pay 0:14:41.520 --> 0:14:44.040 package drama, that book has closed. 0:14:45.080 --> 0:14:49.480 No, it's far from closed because the Delaware so Tesla 0:14:49.520 --> 0:14:51.800 appealed the judge's ruining. So there's going to be another 0:14:51.920 --> 0:14:54.920 round of litigation on this thing, and who knows how 0:14:54.960 --> 0:14:57.840 far it could go. Now that's what I mean. Let's 0:14:57.840 --> 0:15:01.280 suppose the shareholders win and Elon doesn't get his pay 0:15:01.280 --> 0:15:05.720 package because the court overturns it. What would probably happen 0:15:06.080 --> 0:15:10.520 is the Tesla board would come up with another similar package, 0:15:10.560 --> 0:15:12.360 so it would be an all new one, maybe of 0:15:12.440 --> 0:15:16.360 similar value structure. However you want to do it for 0:15:16.400 --> 0:15:19.760 Elon Musk, but they would do it now that the 0:15:19.800 --> 0:15:22.680 company is domiciled in Texas. They'd do it under Texas law. 0:15:22.920 --> 0:15:25.440 The fact that they changed their domicile the Texas doesn't 0:15:25.480 --> 0:15:29.840 matter for this lawsuit because the pay package was done 0:15:29.840 --> 0:15:33.280 when Texas was a Delaware or Tesla was a Delaware corporation, 0:15:34.040 --> 0:15:37.440 and so the pay package, what the board did, and 0:15:37.480 --> 0:15:42.520 the litigation involved is all done under Delaware law Testya's 0:15:42.560 --> 0:15:45.680 leaving Delaware. Elon's taken a couple of his companies, including X, 0:15:45.720 --> 0:15:49.440 out of Delaware, and he's all, he doesn't like being regulated, 0:15:49.440 --> 0:15:51.560 he doesn't like the laws there, so he's left. He's 0:15:51.560 --> 0:15:54.040 even going to send them a cake with a parting 0:15:54.080 --> 0:15:58.760 shot that he's leaving Delaware. But so if you, you know, 0:15:58.880 --> 0:16:01.760 even if you you have this next round of litigation, 0:16:02.400 --> 0:16:04.840 even if the shareholders win, they could just come up 0:16:04.880 --> 0:16:06.720 with another package that rewards him and you could have 0:16:06.720 --> 0:16:09.400 this fight all over again. So many more chapters to 0:16:09.520 --> 0:16:13.520 go in the pay package dispute. Who care? Yeah? 0:16:13.640 --> 0:16:15.760 So okay, you were trying to then talk about the 0:16:15.800 --> 0:16:18.720 broader industry and I made you go into the lawsuit again. 0:16:19.280 --> 0:16:20.560 So how do they tie together? 0:16:22.040 --> 0:16:26.280 Well, what the shareholders are basically saying is despite the 0:16:26.280 --> 0:16:29.280 fact that that Tesla as a growth company has kind 0:16:29.280 --> 0:16:32.160 of stalled out, they still believe Elon Musk is the 0:16:32.200 --> 0:16:35.240 guy to take them there. And the challenge that he 0:16:35.320 --> 0:16:39.240 faces now to deliver on Tesla still being a tech company, 0:16:39.280 --> 0:16:41.880 still being a growth company, is you do either have 0:16:42.000 --> 0:16:45.680 to recharge so to speak. They're electric vehicle sales and 0:16:45.720 --> 0:16:47.640 they've stalled out for a number of reasons, particularly in 0:16:47.680 --> 0:16:50.960 the US. One is the cars are old and kind 0:16:50.960 --> 0:16:53.000 of stale. They all have the same look to them 0:16:53.000 --> 0:16:55.440 and they haven't freshened it up. The Modelsques looked the 0:16:55.440 --> 0:16:57.960 same for twelve years now, and everything else is sort 0:16:57.960 --> 0:17:00.680 of a derivative of that stylistically. And then there's just 0:17:00.720 --> 0:17:03.360 a lot more competition. You have four General motors BMW, 0:17:03.440 --> 0:17:07.600 Mercedes very aggressive in the US, and you have the 0:17:07.720 --> 0:17:11.960 Chinese ev makers in China in Europe very aggressive as well. 0:17:12.440 --> 0:17:15.280 So he's got a lot more competition than he had 0:17:15.359 --> 0:17:17.240 a few years ago on all these markets, so it's 0:17:17.280 --> 0:17:19.639 tougher to get growth, which is why he's moving to this. 0:17:19.720 --> 0:17:23.480 We're an autonomous vehicle AI company and we'll see what 0:17:23.520 --> 0:17:26.840 happens in August when they show us that. But that's 0:17:26.880 --> 0:17:28.160 going to be a tough one. I mean, you've got 0:17:28.200 --> 0:17:30.440 crews and you've got Weimo out there for years now 0:17:30.480 --> 0:17:32.920 trying to show that they can develop robotexti's and it's 0:17:33.200 --> 0:17:36.080 it's really tough to make that work. But that's what's 0:17:36.520 --> 0:17:39.560 going to con and shareholders that it's a tech company. 0:17:39.560 --> 0:17:41.359 All right, David, thank you so much. We appreciate that. 0:17:41.440 --> 0:17:44.760 As always David Welsch, Detroit bureau chief for Bloomberg News, 0:17:44.760 --> 0:17:47.639 giving us the latest update on our good friend Elon 0:17:47.760 --> 0:17:52.359 Musk and Tesla working towards getting that pay package passed 0:17:52.400 --> 0:17:54.800 form fifty six billion dollars. That gets your attention. 0:17:56.400 --> 0:17:59.840 You're listening to the Bloomberg Intelligence Podcast. 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They cover 0:18:22.480 --> 0:18:26.399 two thousand companies and one hundred and thirty industries worldwide. 0:18:27.000 --> 0:18:28.480 I just want to point out here that the CAC 0:18:28.560 --> 0:18:31.480 forty is down another three percent today, so we are 0:18:31.520 --> 0:18:33.760 picking up some steam as we're about a one hour 0:18:33.800 --> 0:18:36.479 away from the close of European trading, so keep your 0:18:36.520 --> 0:18:39.040 eye on that on very high volume as well. In 0:18:39.080 --> 0:18:41.359 the botto market, you're seeing a continued bid into the 0:18:41.400 --> 0:18:43.560 bar market. Is it the FED is it safe haven. 0:18:43.600 --> 0:18:46.000 There are lots of different theories out there as well, 0:18:46.000 --> 0:18:48.800 but over the whole week so far, the tenure is 0:18:48.840 --> 0:18:51.880 down twenty two basis points. That's a pretty solid move, 0:18:51.960 --> 0:18:53.359 So we want to get more on that with Pria 0:18:53.520 --> 0:18:57.280 Israe Fixed and Come portfolio manager JP Morgan Asset Management. 0:18:57.480 --> 0:19:00.880 She joins us. Now, Pria, I think Barclays came out 0:19:00.880 --> 0:19:03.199 and said, like, look, it's gone too far, like like 0:19:03.240 --> 0:19:05.200 we want to store it here a little bit. This 0:19:05.280 --> 0:19:07.200 buying move has gone too far. What do you think? 0:19:08.520 --> 0:19:09.160 I don't agree. 0:19:09.200 --> 0:19:12.040 I mean, I think there's been a perfect storm the 0:19:12.119 --> 0:19:16.119 last couple of weeks. Growth is slowing, inflation is finally decelerating. 0:19:16.480 --> 0:19:19.120 I think we can put that first quarter high inflation 0:19:19.200 --> 0:19:22.200 prints behind us. We realize that was an outlier, not 0:19:22.680 --> 0:19:25.000 the start of a reacceleration. So you have growth and 0:19:25.080 --> 0:19:28.480 inflation both slowing. You know, I think the market is 0:19:28.520 --> 0:19:30.879 really pricing for growth to slow down to a little 0:19:30.880 --> 0:19:33.760 below potential, but we don't know, you know, the jury 0:19:33.840 --> 0:19:36.640 is out there. Plus we have this political risk which 0:19:36.680 --> 0:19:39.440 is out there, and we're heading into an illiquid summer. 0:19:39.480 --> 0:19:41.320 I mean next week itself, we have a holiday in 0:19:41.320 --> 0:19:44.119 the middle of the week. I think people are getting 0:19:44.160 --> 0:19:46.680 nervous about the carry trade online and that's what we've 0:19:46.720 --> 0:19:48.040 seen a little bit this week. 0:19:48.240 --> 0:19:49.679 So I'm not sure it's done. 0:19:49.760 --> 0:19:52.199 I would not be selling into this, but you know, 0:19:52.200 --> 0:19:54.840 particularly when it comes to treasuries, I actually think people 0:19:54.840 --> 0:19:57.640 who've been positioned for a soft landing, which we have been, 0:19:57.720 --> 0:20:01.399 we've been owning high quality spread product, risky assets. I 0:20:01.400 --> 0:20:04.560 think actually owning some treasuries is a good hedge because 0:20:04.720 --> 0:20:07.240 there is really only one safe haven asset in a 0:20:07.280 --> 0:20:10.280 world wide inflation is declining, and that's still treasuries, and 0:20:10.320 --> 0:20:11.440 we're not pricing. 0:20:11.040 --> 0:20:11.520 In that much. 0:20:11.560 --> 0:20:14.560 We're still above, you know, north of four percent on 0:20:14.600 --> 0:20:16.960 the tenure. So I actually think you're supposed to own 0:20:17.040 --> 0:20:20.960 those hedges. You're supposed to have liquid assets alongside any 0:20:21.000 --> 0:20:22.960 of those soft landing traits that you have on. 0:20:23.760 --> 0:20:26.200 What is a high quality spread product. 0:20:28.080 --> 0:20:30.440 So I'm glad you asked that because it is across 0:20:30.480 --> 0:20:33.399 the you know, whether it's investment rate, credit, high yield. 0:20:33.440 --> 0:20:35.160 I think they're parts of high yield that I would 0:20:35.200 --> 0:20:38.439 say are high quality securitize credit. 0:20:38.560 --> 0:20:40.959 So within the ABS C MBS sector. 0:20:41.280 --> 0:20:42.800 So I think you dig in, you look at what 0:20:42.880 --> 0:20:46.439 the companies or structures. You know, what is that money 0:20:46.440 --> 0:20:48.960 being used for if there's good cash flow. We looked 0:20:48.960 --> 0:20:51.200 at some of these single family rental you know there 0:20:51.240 --> 0:20:53.840 it's a business model where you're earning cash flow based 0:20:53.920 --> 0:20:57.280 on people paying rent, which we know that rent. 0:20:57.600 --> 0:20:59.159 You know, rents are are high. 0:20:59.800 --> 0:21:02.480 So I think making sure you know the business model 0:21:02.480 --> 0:21:06.359 there's free cash flow, there's no releveraging of the company 0:21:06.440 --> 0:21:09.840 or the structure. I think owning that in a diversified way, 0:21:09.920 --> 0:21:12.919 so we own you know, IG credit, so investment grate credit, 0:21:13.000 --> 0:21:14.840 high yield credit, securitize credit. 0:21:15.240 --> 0:21:16.760 I think that's what we would call. 0:21:17.359 --> 0:21:19.639 You know, most of them in the index, many of 0:21:19.680 --> 0:21:21.480 them not in the aggregate index. 0:21:21.840 --> 0:21:23.960 So these would be bonds where. 0:21:23.800 --> 0:21:27.040 You're earning that spread for the fact that you're taking 0:21:27.080 --> 0:21:30.320 on some credit risks, some less liquidity risk, that's what 0:21:30.359 --> 0:21:33.879 you're giving up, but you're picking up that spread because 0:21:33.960 --> 0:21:37.720 corporate fundamentals are still very, very strong, and so that's 0:21:37.760 --> 0:21:40.320 what we're That's why we still like high quality spread 0:21:40.320 --> 0:21:43.440 product because this is not like other times when there's 0:21:43.440 --> 0:21:46.359 been a lot of leveraging up or companies are not 0:21:46.400 --> 0:21:48.040