1 00:00:02,400 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:08,240 --> 00:00:12,119 Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live 3 00:00:12,200 --> 00:00:14,920 Speaker 2: weekdays at ten am Eastern on Apple card Playing and 4 00:00:15,040 --> 00:00:17,919 Speaker 2: Broid Auto with the Bloomberg Business App. Listen on demand 5 00:00:17,960 --> 00:00:22,280 Speaker 2: wherever you get your podcasts, or watch us live on YouTube. 6 00:00:23,200 --> 00:00:24,439 Speaker 3: Jeffrey Cleveland joints us here. 7 00:00:24,480 --> 00:00:26,960 Speaker 4: He's the chief econosces of Payden and Regal. He's out 8 00:00:26,960 --> 00:00:31,639 Speaker 4: there in La. I have no idea where he is today. Hey, Jeffrey, 9 00:00:31,720 --> 00:00:34,160 Speaker 4: talk to us about inflation. What are you feeling about 10 00:00:34,200 --> 00:00:37,880 Speaker 4: inflation these days? Is it whipped? Is it under controlled? 11 00:00:37,960 --> 00:00:40,000 Speaker 4: Do we have to be concerned about it? What did 12 00:00:40,000 --> 00:00:41,240 Speaker 4: the cpidea to tell you today? 13 00:00:42,880 --> 00:00:45,120 Speaker 5: Well, Hi Paul, first of all, coming to you from London. 14 00:00:45,479 --> 00:00:45,760 Speaker 3: Nice. 15 00:00:45,800 --> 00:00:48,760 Speaker 6: That is the uh pinal name England in the background. 16 00:00:48,920 --> 00:00:52,040 Speaker 6: So yeah, a little bit different than you today. But 17 00:00:52,440 --> 00:00:55,800 Speaker 6: CPI is it dead yet? I don't think inflation is 18 00:00:55,920 --> 00:00:58,040 Speaker 6: dead yet, but we're moving in the right direction. I 19 00:00:58,080 --> 00:01:02,040 Speaker 6: think the key number this morning point three, the month 20 00:01:02,080 --> 00:01:06,440 Speaker 6: to month change in core CPI that rounded up to 21 00:01:06,520 --> 00:01:08,520 Speaker 6: point three, so it was actually unrounded. 22 00:01:08,560 --> 00:01:09,760 Speaker 5: It was like point two eight. 23 00:01:10,600 --> 00:01:13,640 Speaker 6: That implies in our you know, quick math, something like 24 00:01:13,680 --> 00:01:18,160 Speaker 6: a point two reading on the Fed's preferred gauge of inflation, 25 00:01:18,280 --> 00:01:21,039 Speaker 6: the core PCE, which will get later this month. 26 00:01:21,160 --> 00:01:25,360 Speaker 5: So point two percent on core pc is roughly consistent 27 00:01:25,400 --> 00:01:27,319 Speaker 5: with the Fed's inflation target. 28 00:01:27,600 --> 00:01:30,279 Speaker 6: So I think this does keep the FED on track 29 00:01:31,000 --> 00:01:33,520 Speaker 6: to cut again at the December meeting. 30 00:01:33,560 --> 00:01:36,080 Speaker 5: That's the that's the key takeaway from the report for me. 31 00:01:36,959 --> 00:01:41,000 Speaker 7: There's been debate about rate cuts and how they may 32 00:01:41,080 --> 00:01:44,600 Speaker 7: sloan the coming months, possibly to every other meeting pays 33 00:01:44,720 --> 00:01:47,559 Speaker 7: starting in twenty twenty five. We've also had some commentary 34 00:01:47,800 --> 00:01:51,080 Speaker 7: from FED officials this week, like Neil Cashkari talking about 35 00:01:51,120 --> 00:01:54,920 Speaker 7: how high productivity points to higher neutral level. Before they 36 00:01:54,960 --> 00:01:57,640 Speaker 7: were thinking it was around three percent, now could potentially 37 00:01:57,680 --> 00:02:00,240 Speaker 7: be higher than that. Just given that they're way on 38 00:02:00,280 --> 00:02:03,400 Speaker 7: what potential fiscal policy will come out of Washington over 39 00:02:03,400 --> 00:02:05,920 Speaker 7: the next year. Where do you view the pace of 40 00:02:06,000 --> 00:02:07,240 Speaker 7: recuts in the coming months. 41 00:02:08,600 --> 00:02:10,680 Speaker 6: Yeah, we see another one in December, as I said, 42 00:02:10,720 --> 00:02:12,640 Speaker 6: and then I do think they slow the pace of 43 00:02:12,720 --> 00:02:14,959 Speaker 6: cuts in twenty twenty five, so maybe they go to 44 00:02:15,120 --> 00:02:18,440 Speaker 6: once per quarter, so you get four over the balance 45 00:02:18,480 --> 00:02:21,000 Speaker 6: of twenty twenty five. And yeah, I mean as you 46 00:02:21,080 --> 00:02:23,800 Speaker 6: get closer to the range where you think neutral is 47 00:02:23,840 --> 00:02:26,959 Speaker 6: that maybe you can slow down as you approach, as 48 00:02:26,960 --> 00:02:30,360 Speaker 6: you approach the station, something like that. It's really hard 49 00:02:30,400 --> 00:02:34,720 Speaker 6: to say where neutral is. Our guess is somewhere around 50 00:02:34,720 --> 00:02:36,880 Speaker 6: three and a half percent. I think that's a good 51 00:02:36,880 --> 00:02:39,480 Speaker 6: bet at this point, maybe a bit lower. 52 00:02:39,760 --> 00:02:40,480 Speaker 5: We'll have to see. 53 00:02:40,480 --> 00:02:43,560 Speaker 6: That is notably higher than we would have told you 54 00:02:44,320 --> 00:02:46,560 Speaker 6: pre COVID, so we probably would have been around two 55 00:02:46,560 --> 00:02:50,000 Speaker 6: and a half percent at that time. So it's I 56 00:02:50,040 --> 00:02:51,400 Speaker 6: think you can make a good argument that it's a 57 00:02:51,440 --> 00:02:53,440 Speaker 6: little bit higher, But I think you could also argue 58 00:02:53,440 --> 00:02:56,320 Speaker 6: that nobody actually knows with any degree of certainty. 59 00:02:56,360 --> 00:02:57,520 Speaker 5: So we'll have to see. 60 00:02:58,040 --> 00:03:01,240 Speaker 4: Jeffrey, we're going to get retail sales on Friday. A 61 00:03:01,440 --> 00:03:04,840 Speaker 4: what are you looking for there? And B what's your 62 00:03:04,840 --> 00:03:06,040 Speaker 4: sense of the consumer out there? 63 00:03:07,440 --> 00:03:11,440 Speaker 6: I continue to be excited, elated. 64 00:03:11,560 --> 00:03:13,360 Speaker 5: I mean the strength of the consumer. It's holding up 65 00:03:13,440 --> 00:03:13,959 Speaker 5: very nicely. 66 00:03:14,000 --> 00:03:14,240 Speaker 3: Paul. 67 00:03:14,720 --> 00:03:16,640 Speaker 6: Through all the data that we've seen thus far this 68 00:03:16,760 --> 00:03:20,160 Speaker 6: year for US have paid and regal, the most important 69 00:03:20,320 --> 00:03:22,880 Speaker 6: data point is aggregate consumer income. 70 00:03:23,040 --> 00:03:26,280 Speaker 5: I mentioned that probably one hundred times on this program. 71 00:03:26,560 --> 00:03:29,680 Speaker 6: It's still growing, Paul, five percent in nominal terms, five 72 00:03:29,760 --> 00:03:32,680 Speaker 6: percent year on year as of the latest set of data. 73 00:03:33,400 --> 00:03:35,800 Speaker 5: That's important because when the US consumer. 74 00:03:35,400 --> 00:03:39,240 Speaker 6: Has income, they tend to spend and that keeps GDP going, 75 00:03:39,280 --> 00:03:41,840 Speaker 6: and that's what we're seeing we've been seeing, so I 76 00:03:41,840 --> 00:03:44,280 Speaker 6: think you'll see that reflected in retail sales. The only 77 00:03:44,320 --> 00:03:46,520 Speaker 6: caveat that I always give the clients is that retail 78 00:03:46,520 --> 00:03:49,760 Speaker 6: sales is really mostly goods and so it's a subset 79 00:03:49,840 --> 00:03:53,720 Speaker 6: of overall consumer spending, so don't get too fixated on 80 00:03:53,760 --> 00:03:56,840 Speaker 6: any one month of retail sales. We think the US 81 00:03:56,840 --> 00:03:58,840 Speaker 6: consumer is in solid shape. 82 00:03:59,520 --> 00:04:01,880 Speaker 7: Looking at the GDP now model for the fourth quarter, 83 00:04:01,920 --> 00:04:03,600 Speaker 7: I know it can be volatile, but so far it's 84 00:04:03,640 --> 00:04:07,400 Speaker 7: around two and a half percent growth there, and obviously 85 00:04:07,400 --> 00:04:10,160 Speaker 7: we're going to have more earnings that are geared toward 86 00:04:10,240 --> 00:04:13,000 Speaker 7: the consumer next week, including Walmart here when it comes 87 00:04:13,040 --> 00:04:15,240 Speaker 7: to more of the crucial holiday quarter, which usually is 88 00:04:15,280 --> 00:04:19,320 Speaker 7: the gangbuster quarter that powers consumer spending in more than 89 00:04:19,360 --> 00:04:21,640 Speaker 7: two thirds of GDP growth, How are you viewing the 90 00:04:21,680 --> 00:04:22,680 Speaker 7: final months of the year. 91 00:04:24,440 --> 00:04:27,760 Speaker 6: Yeah, I've been pretty upbeat on our US GDB call 92 00:04:27,839 --> 00:04:31,200 Speaker 6: all year relative to consensus. Right now, we think Q 93 00:04:31,279 --> 00:04:33,720 Speaker 6: four to Q four for twenty twenty four, GDP is 94 00:04:33,720 --> 00:04:36,679 Speaker 6: going to be about two point four percent, and if 95 00:04:37,200 --> 00:04:39,520 Speaker 6: the fourth quarter comes in as you say, as that 96 00:04:39,600 --> 00:04:43,599 Speaker 6: now cast implies, there's potentially some upside risk even to 97 00:04:43,800 --> 00:04:47,520 Speaker 6: our optimistic take. So that's very good news, especially if 98 00:04:47,600 --> 00:04:49,680 Speaker 6: you go back to I don't know this time last year, 99 00:04:50,080 --> 00:04:52,800 Speaker 6: a lot of prognosticators, a lot of investors were saying 100 00:04:52,839 --> 00:04:55,760 Speaker 6: that our recession was inevitable, that given the fact that 101 00:04:55,800 --> 00:04:58,080 Speaker 6: the FED had heightd as much as they had that 102 00:04:58,320 --> 00:05:00,320 Speaker 6: with a lag we were going to see a down, 103 00:05:00,760 --> 00:05:03,239 Speaker 6: and we just really have it. The consumers remain resilient 104 00:05:03,279 --> 00:05:06,080 Speaker 6: and GDP growth looks great, So I think, for me, 105 00:05:06,480 --> 00:05:08,640 Speaker 6: what's the moral of the story here? We have a 106 00:05:08,680 --> 00:05:12,400 Speaker 6: situation that we've had maybe five times in the last 107 00:05:12,680 --> 00:05:15,040 Speaker 6: three or four decades, where the FED is cutting rates 108 00:05:15,320 --> 00:05:19,039 Speaker 6: so becoming less restrictive, and the economy is still growing 109 00:05:19,320 --> 00:05:20,360 Speaker 6: at a pretty good clip. 110 00:05:20,920 --> 00:05:23,120 Speaker 5: When those two things are moving in the right. 111 00:05:23,000 --> 00:05:26,520 Speaker 6: Direction, it's good for risk assets, So you know, equities, 112 00:05:26,600 --> 00:05:29,760 Speaker 6: large cap, small cap, whatever you want us equities, but 113 00:05:29,800 --> 00:05:32,120 Speaker 6: also credit sectors in the bond market, and we have 114 00:05:32,120 --> 00:05:34,200 Speaker 6: a very good high yield strategy. I think that will 115 00:05:34,240 --> 00:05:37,360 Speaker 6: continue to do very well given the GDP backdrop and 116 00:05:37,400 --> 00:05:38,680 Speaker 6: the fetter reserves actions. 117 00:05:38,760 --> 00:05:40,560 Speaker 4: All right, Jeffrey, thank you so much for joining us. 118 00:05:40,680 --> 00:05:43,120 Speaker 4: By the way, go to the Royal Arms pub Bank 119 00:05:43,120 --> 00:05:45,320 Speaker 4: Street mentioned my name. They will take good care of you. 120 00:05:45,400 --> 00:05:48,839 Speaker 4: Jeffrey Cleveland, Chief economisce paid in and regal. He's over 121 00:05:48,839 --> 00:05:53,600 Speaker 4: there in London seeing clients and doing the good work there. 122 00:05:54,200 --> 00:05:58,080 Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live 123 00:05:58,160 --> 00:06:01,680 Speaker 2: weekdays at ten am Eastern, Apple card Play and royd 124 00:06:01,720 --> 00:06:04,880 Speaker 2: Otto with a Bloomberg business. You can also listen live 125 00:06:04,960 --> 00:06:08,120 Speaker 2: on Amazon Alexa from our flagship New York station, Just 126 00:06:08,200 --> 00:06:12,520 Speaker 2: Say Alexa playing Bloomberg eleven thirty the type. 127 00:06:12,520 --> 00:06:15,160 Speaker 3: Backdown to Washington, d C. Lard Davison joins us. 128 00:06:15,440 --> 00:06:18,520 Speaker 4: She's a politics editor for Bloomberg NEWSDWN in Washington. 129 00:06:19,120 --> 00:06:20,320 Speaker 3: Laura, A lot to cover here. 130 00:06:20,720 --> 00:06:24,960 Speaker 4: President elect Trump in Washington speaking to lawmakers earlier today. 131 00:06:25,440 --> 00:06:28,240 Speaker 4: What's the feeling in DC as to We're start getting 132 00:06:28,240 --> 00:06:30,800 Speaker 4: more and more information on some of his cabinet picks, 133 00:06:31,120 --> 00:06:34,440 Speaker 4: on some of the people he's appointing to special positions, 134 00:06:34,440 --> 00:06:37,159 Speaker 4: whether it's Elon Musk or you know, in the Tzar 135 00:06:37,360 --> 00:06:38,280 Speaker 4: type positions. 136 00:06:38,320 --> 00:06:40,000 Speaker 3: What's the feeling in DC this morning? 137 00:06:41,040 --> 00:06:43,880 Speaker 8: So there's certainly been a couple surprises. Late last night, 138 00:06:44,000 --> 00:06:46,520 Speaker 8: there was a pick for the Department of Defense, Peter Hegseth, 139 00:06:46,560 --> 00:06:49,040 Speaker 8: who is a Fox News personality. He does have a 140 00:06:49,080 --> 00:06:52,160 Speaker 8: military background, but this one raised a lot of eyebrows 141 00:06:52,200 --> 00:06:54,000 Speaker 8: around the world of people having to actually google and 142 00:06:54,040 --> 00:06:55,680 Speaker 8: figure out who is this guy. 143 00:06:56,240 --> 00:06:57,880 Speaker 3: So that was one of the surprises. 144 00:06:57,920 --> 00:07:00,800 Speaker 8: We also see some other key loyal going into other 145 00:07:00,880 --> 00:07:03,359 Speaker 8: national security posts, someone like John Ratcliffe, who is the 146 00:07:03,360 --> 00:07:07,039 Speaker 8: Director of National Intelligence. During Trump's first term, he will 147 00:07:07,640 --> 00:07:08,000 Speaker 8: take on. 148 00:07:08,000 --> 00:07:08,960 Speaker 3: To lead the CIA. 149 00:07:09,279 --> 00:07:11,200 Speaker 8: Of course, earlier in the week we saw Christy Nome 150 00:07:11,280 --> 00:07:14,360 Speaker 8: installed at DHS, and also Tom Holman, who will be 151 00:07:14,360 --> 00:07:16,000 Speaker 8: in one of those ZAR positions at the White House 152 00:07:16,040 --> 00:07:19,840 Speaker 8: overseeing immigration and sort of these mass deportations that Trump 153 00:07:19,880 --> 00:07:22,760 Speaker 8: has talked about. So where we've seen these appointments go 154 00:07:22,840 --> 00:07:24,000 Speaker 8: is where you can kind of get a sense of 155 00:07:24,000 --> 00:07:25,840 Speaker 8: what Trump wants to do in his early days. So 156 00:07:26,280 --> 00:07:28,720 Speaker 8: immigration is going to be high on that list national security, 157 00:07:29,160 --> 00:07:33,080 Speaker 8: but also this new what they're calling DOGE or the 158 00:07:33,120 --> 00:07:36,280 Speaker 8: Department of Government Efficiencies. Of course, this is the sort 159 00:07:36,320 --> 00:07:38,640 Speaker 8: of position that Elon Musk has dreamed up for himself. 160 00:07:38,760 --> 00:07:41,400 Speaker 8: The Vekraamaswami will be joining him there. This is not 161 00:07:41,520 --> 00:07:44,920 Speaker 8: an actual cabinet job. This isn't an actual department, sort 162 00:07:44,920 --> 00:07:47,440 Speaker 8: of a presidential commission, which means its powers and. 163 00:07:47,480 --> 00:07:48,720 Speaker 3: Scope will be more limited. 164 00:07:49,160 --> 00:07:51,080 Speaker 8: But we can't expect that we'll see Elon Musk around. 165 00:07:51,080 --> 00:07:53,680 Speaker 8: He's actually today with Trump in Washington, and he was 166 00:07:53,720 --> 00:07:56,240 Speaker 8: at a meeting with House Republicans just a couple hours ago. 167 00:07:56,760 --> 00:07:59,480 Speaker 7: I'm glad you brought up a Vicroamaswami, who's also supposed 168 00:07:59,520 --> 00:08:02,960 Speaker 7: to co lead that new Department of Government Efficiency, because 169 00:08:02,960 --> 00:08:05,080 Speaker 7: he said in a post on X this morning that 170 00:08:05,120 --> 00:08:08,200 Speaker 7: a federal government needs a massive downsizing. What type of 171 00:08:08,200 --> 00:08:10,239 Speaker 7: influence do you think he could wield on the president? 172 00:08:11,680 --> 00:08:13,600 Speaker 8: So far, his influence has been massive. You know, he's 173 00:08:13,600 --> 00:08:15,520 Speaker 8: been at mar A Lago helping make some of these 174 00:08:15,560 --> 00:08:18,760 Speaker 8: key picks. He's been joining phone calls with foreign leaders. 175 00:08:19,400 --> 00:08:21,520 Speaker 8: Musk himself says he thinks he can cut about two 176 00:08:21,520 --> 00:08:24,080 Speaker 8: trillion dollars from the federal budget. It's unclear if he 177 00:08:24,120 --> 00:08:25,880 Speaker 8: wants to do that in one year or spread over 178 00:08:26,320 --> 00:08:29,080 Speaker 8: a longer period, but two trillion dollars is a massive amount. 179 00:08:29,080 --> 00:08:31,800 Speaker 8: That would basically be sort of all of the government spending. 180 00:08:32,080 --> 00:08:34,520 Speaker 8: You know that isn't you know, Medicare, Medicaid, some of 181 00:08:34,520 --> 00:08:37,760 Speaker 8: those entitlement programs, you know, financing the debt, those sorts 182 00:08:37,800 --> 00:08:39,760 Speaker 8: of things. So this is a really big task that 183 00:08:39,800 --> 00:08:41,719 Speaker 8: he wants to do, but he'll probably find it's a 184 00:08:41,760 --> 00:08:43,439 Speaker 8: little bit more difficult than what he did at Twitter, 185 00:08:43,480 --> 00:08:45,080 Speaker 8: for example. You can't just kind of come in and 186 00:08:45,120 --> 00:08:47,520 Speaker 8: start firing people. There are This is the federal government, 187 00:08:47,559 --> 00:08:49,920 Speaker 8: so there are more rules and regulations and guardrails in check. 188 00:08:50,920 --> 00:08:55,959 Speaker 4: Okay, from that big picture topic to another one, deportations. 189 00:08:56,280 --> 00:09:00,280 Speaker 4: Is there any plan coalescing around what the score of 190 00:09:00,280 --> 00:09:03,840 Speaker 4: those might look like, how they might actually get it done? 191 00:09:06,200 --> 00:09:09,080 Speaker 8: So far, not much, but there's a lot of questions 192 00:09:09,120 --> 00:09:11,319 Speaker 8: about logistically what this will look like and who is 193 00:09:11,360 --> 00:09:13,080 Speaker 8: going to pay for this. You know, Trump has said 194 00:09:13,240 --> 00:09:16,080 Speaker 8: he wants to deport somewhere between fifteen and twenty million people. 195 00:09:16,559 --> 00:09:18,520 Speaker 8: You know, there is some money and some things that 196 00:09:18,559 --> 00:09:21,560 Speaker 8: the agencies like Department handle onmeland Security could start doing, 197 00:09:21,800 --> 00:09:23,800 Speaker 8: but it is very likely that they're going to need 198 00:09:23,880 --> 00:09:26,040 Speaker 8: money from Congress to really get this off the ground. 199 00:09:26,440 --> 00:09:28,880 Speaker 8: Of course, Congress is looking like it will be held 200 00:09:28,920 --> 00:09:31,720 Speaker 8: in Republican hands, but still, you know, it's government spending. 201 00:09:32,280 --> 00:09:34,280 Speaker 8: You know, in many cases needs sixty votes in the Senate, 202 00:09:34,320 --> 00:09:35,920 Speaker 8: they might be able to get it by with just fifty, 203 00:09:36,000 --> 00:09:38,520 Speaker 8: meaning they can do it with just Republicans. But spending 204 00:09:38,520 --> 00:09:39,920 Speaker 8: a lot of money, and Trump is said he wants 205 00:09:39,960 --> 00:09:42,040 Speaker 8: to spend as much money as it'll take. That's going 206 00:09:42,080 --> 00:09:43,880 Speaker 8: to be probably one of the first policy fights we 207 00:09:43,920 --> 00:09:47,640 Speaker 8: see play out in Washington Post January twentieth, Lord. 208 00:09:47,559 --> 00:09:49,400 Speaker 4: Davison, thank you so much for joining us, Lord Davison. 209 00:09:49,440 --> 00:09:53,960 Speaker 4: She's a politics editor for Bloomberg News from Washington, DC. 210 00:09:55,440 --> 00:09:59,319 Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live 211 00:09:59,360 --> 00:10:02,480 Speaker 2: weekdays ten am Eastern on Apple card Playing and broun 212 00:10:02,520 --> 00:10:05,600 Speaker 2: Otto with the Bloomberg Business app. Listen on demand wherever 213 00:10:05,679 --> 00:10:09,480 Speaker 2: you get your podcasts, or watch us live on YouTube. 214 00:10:10,559 --> 00:10:15,280 Speaker 4: Jessman, She's sitting in steal outing back Monday, which is 215 00:10:15,280 --> 00:10:17,960 Speaker 4: the good news. Paul Sweeney live here on Bloomberg Interactive 216 00:10:17,960 --> 00:10:21,760 Speaker 4: Broker Studio. We're streaming live on YouTube seever, YouTube dot 217 00:10:21,800 --> 00:10:24,560 Speaker 4: com search Bloomberg Podcast and that's where you will find 218 00:10:24,640 --> 00:10:29,240 Speaker 4: us lots of political discussion this hour. Again, President like 219 00:10:29,320 --> 00:10:32,640 Speaker 4: Trump in Washington, DC, meeting with President Biden in the 220 00:10:32,720 --> 00:10:35,640 Speaker 4: White house. We had a little couple I guess a 221 00:10:35,679 --> 00:10:38,079 Speaker 4: minute or so of some sound from those two great. 222 00:10:38,080 --> 00:10:39,960 Speaker 3: It was brief, brief, but they did do this. 223 00:10:39,960 --> 00:10:43,440 Speaker 4: Being presumably there media behind closed doors and getting things 224 00:10:43,640 --> 00:10:44,240 Speaker 4: done here. 225 00:10:44,360 --> 00:10:45,680 Speaker 3: Henrietta tres joins us. 226 00:10:45,720 --> 00:10:47,920 Speaker 4: She is managing partner and director of Economic Policy at 227 00:10:47,960 --> 00:10:53,320 Speaker 4: Data Partners. Henrietta, what do you make of the last 228 00:10:54,000 --> 00:10:59,120 Speaker 4: I guess eight days from last Tuesday, you know, with 229 00:10:59,280 --> 00:11:01,760 Speaker 4: some perspect to here what happened? 230 00:11:03,040 --> 00:11:05,040 Speaker 1: Well, I think some of the most exciting things to 231 00:11:05,040 --> 00:11:07,320 Speaker 1: happen is coming out from my conversations with folks on 232 00:11:07,320 --> 00:11:10,520 Speaker 1: the Trump transition team as they're trying to staff up, 233 00:11:11,240 --> 00:11:13,520 Speaker 1: really enjoying the sort of parlor game of who's going 234 00:11:13,520 --> 00:11:17,120 Speaker 1: to be nominated in which key positions. I think there 235 00:11:17,320 --> 00:11:21,000 Speaker 1: is a lot of enthusiasm and anticipation around who might 236 00:11:21,040 --> 00:11:23,079 Speaker 1: be the next Treasury Secretary. That's where a lot of 237 00:11:23,120 --> 00:11:26,360 Speaker 1: our clients are focused, a lot of conversation around what 238 00:11:26,720 --> 00:11:30,160 Speaker 1: the role for former Ambassador Lithheiser might be. 239 00:11:30,600 --> 00:11:31,959 Speaker 9: As the new trades. 240 00:11:31,600 --> 00:11:36,160 Speaker 1: Are there's really just sort of this brilliant feel of 241 00:11:36,760 --> 00:11:39,040 Speaker 1: you know, now we get to really put into effect 242 00:11:39,160 --> 00:11:41,800 Speaker 1: all of the things that the Trump campaign hoped they'd 243 00:11:41,840 --> 00:11:46,199 Speaker 1: be able to do. Obviously optimistic and hope or enthusiastic 244 00:11:46,200 --> 00:11:48,640 Speaker 1: about the fact that they got the House at long 245 00:11:48,720 --> 00:11:50,480 Speaker 1: last and declared in their favor. 246 00:11:50,679 --> 00:11:54,439 Speaker 9: So just a lot of enthusiasm and excitement is what. 247 00:11:54,360 --> 00:11:57,320 Speaker 1: I'm getting out of the Trump camp today, Henrietta. 248 00:11:57,400 --> 00:11:59,600 Speaker 7: Of course, there are a lot of questions about tax 249 00:11:59,600 --> 00:12:02,760 Speaker 7: as well as trade policies. When you're speaking with your clients, 250 00:12:02,800 --> 00:12:04,880 Speaker 7: who do they feel like would be best to lead 251 00:12:04,960 --> 00:12:05,960 Speaker 7: the Treasury Department? 252 00:12:08,000 --> 00:12:09,400 Speaker 9: Best is a relative term. 253 00:12:10,040 --> 00:12:14,480 Speaker 1: I think if it came to Bob Lintheiser, for whatever reason, 254 00:12:14,800 --> 00:12:17,200 Speaker 1: he has made pretty clear that he wants that role, 255 00:12:17,240 --> 00:12:19,839 Speaker 1: I think the market would respond very negatively to that. 256 00:12:19,880 --> 00:12:24,600 Speaker 1: He's obviously very supportive of tariffs and extraordinarily competent, as 257 00:12:24,600 --> 00:12:26,520 Speaker 1: we saw from the Section three oh one tariff in 258 00:12:26,559 --> 00:12:29,480 Speaker 1: the trade war with the US and China. That's something 259 00:12:29,480 --> 00:12:31,480 Speaker 1: that they would very much anticipate if he came in 260 00:12:31,520 --> 00:12:33,720 Speaker 1: at Treasury, which is, you know, on the street, the 261 00:12:33,720 --> 00:12:37,240 Speaker 1: most important and powerful position in the entire administration. So 262 00:12:37,320 --> 00:12:40,160 Speaker 1: I think that if Bob Laittheiser were to be Treasury Secretary, 263 00:12:40,360 --> 00:12:43,720 Speaker 1: there would be a lot of trepidation and anxiety on 264 00:12:43,760 --> 00:12:45,920 Speaker 1: the street for Scott Bessett, who has. 265 00:12:45,800 --> 00:12:48,920 Speaker 9: Been making the rounds for months now on Wall. 266 00:12:48,720 --> 00:12:52,440 Speaker 1: Street, there is an understanding that he would prefer sort 267 00:12:52,480 --> 00:12:55,480 Speaker 1: of a gradual approach to tariff's, but it still raises 268 00:12:55,480 --> 00:12:57,800 Speaker 1: a lot of eyebrows when you hear him say directly, 269 00:12:58,080 --> 00:13:01,640 Speaker 1: I think that every month tariff shooting five percent. Those are, 270 00:13:01,679 --> 00:13:04,560 Speaker 1: of course tireffs that are passed directly onto the US consumer. 271 00:13:04,840 --> 00:13:07,640 Speaker 1: So there's there's really a lot of anxiety around tyriffs 272 00:13:07,720 --> 00:13:10,280 Speaker 1: in general. There's also a lot of attention around this 273 00:13:10,360 --> 00:13:15,720 Speaker 1: idea that Elon Musk, with his potential new commission, could 274 00:13:15,720 --> 00:13:18,360 Speaker 1: trim two trillion dollars in federal spending over the next 275 00:13:18,400 --> 00:13:22,199 Speaker 1: four years. That's a non starter. That's not how governing be. 276 00:13:22,320 --> 00:13:25,600 Speaker 1: The appropriations process works. That requires sixty votes in the 277 00:13:25,640 --> 00:13:28,040 Speaker 1: Senate and two hundred and eighteen in the House, neither 278 00:13:28,120 --> 00:13:31,080 Speaker 1: of which are going to be achievable. So there is 279 00:13:31,160 --> 00:13:33,400 Speaker 1: a lot of focus there just on understanding the realm 280 00:13:33,440 --> 00:13:34,080 Speaker 1: of the possible. 281 00:13:34,679 --> 00:13:36,000 Speaker 9: But obviously this is an. 282 00:13:35,840 --> 00:13:41,840 Speaker 1: Ex official committee, and Congress generally doesn't cotton two outside 283 00:13:41,840 --> 00:13:43,520 Speaker 1: committees of out elected officials. 284 00:13:44,120 --> 00:13:46,040 Speaker 4: Henriette with a little bit of hindsight here and Given 285 00:13:46,080 --> 00:13:49,520 Speaker 4: what we know with the House, how much of a 286 00:13:49,559 --> 00:13:53,120 Speaker 4: red wave is this election season. 287 00:13:54,320 --> 00:13:57,360 Speaker 1: Well, the House is definitely a huge problem, especially since, 288 00:13:57,360 --> 00:13:59,440 Speaker 1: as you just mentioned, Trump is taking at least two 289 00:13:59,600 --> 00:14:02,480 Speaker 1: of the House members with him to the White House. 290 00:14:02,840 --> 00:14:05,320 Speaker 1: So based on the numbers that we have right now, 291 00:14:05,360 --> 00:14:08,079 Speaker 1: the majority for the Republicans in the House is going 292 00:14:08,120 --> 00:14:10,040 Speaker 1: to be even smaller than it was this last cycle. 293 00:14:10,720 --> 00:14:12,920 Speaker 1: I think two three four seats is what we're looking 294 00:14:13,000 --> 00:14:15,680 Speaker 1: at this point. So governing is going to be incredibly difficult, 295 00:14:15,679 --> 00:14:18,480 Speaker 1: and they have some really heavy lifts to tackle. One 296 00:14:18,480 --> 00:14:20,280 Speaker 1: of the things that we're focused on a lot right 297 00:14:20,320 --> 00:14:22,080 Speaker 1: now is how much can they do? How much can 298 00:14:22,120 --> 00:14:24,720 Speaker 1: they do on the tariffront in terms of collecting revenue 299 00:14:24,760 --> 00:14:27,600 Speaker 1: in from tariffs and factoring that into the tax bill. 300 00:14:28,560 --> 00:14:32,640 Speaker 1: It's worth remembering that Congress has not legislated on tariffs 301 00:14:32,680 --> 00:14:35,000 Speaker 1: in eighty years, and there's a reason for that. 302 00:14:35,040 --> 00:14:35,960 Speaker 9: It's really difficult. 303 00:14:36,040 --> 00:14:39,200 Speaker 1: It leads to material ramifications and trade wars with not 304 00:14:39,240 --> 00:14:42,080 Speaker 1: just China, but also retaliation from the EU and other 305 00:14:42,160 --> 00:14:46,280 Speaker 1: nations that we impose tariffs on. By actually voting on tariffs, 306 00:14:46,600 --> 00:14:50,240 Speaker 1: that puts House members in particular in a unique position 307 00:14:50,320 --> 00:14:54,400 Speaker 1: to be railed against by their voters in the upcoming 308 00:14:54,440 --> 00:14:57,920 Speaker 1: midtorm election. So there's going to be a really hard 309 00:14:58,040 --> 00:15:01,760 Speaker 1: road ahead to pull a tax together just in general. 310 00:15:02,040 --> 00:15:04,440 Speaker 1: And once you or if you do add terrifts to 311 00:15:04,520 --> 00:15:07,720 Speaker 1: the equation, it becomes even more difficult. With scant majorities 312 00:15:07,760 --> 00:15:10,160 Speaker 1: of two, three four seats, you're really going to struggle 313 00:15:10,200 --> 00:15:10,680 Speaker 1: on that one. 314 00:15:10,800 --> 00:15:13,160 Speaker 7: What about when it comes to the debt ceiling because 315 00:15:13,200 --> 00:15:16,000 Speaker 7: a lot of this won't transition until early next year, 316 00:15:16,160 --> 00:15:19,160 Speaker 7: So when you're coming up against potential deadlines around the holidays, 317 00:15:19,200 --> 00:15:20,240 Speaker 7: how could this shape out? 318 00:15:21,400 --> 00:15:21,680 Speaker 5: Yeah? 319 00:15:21,720 --> 00:15:24,359 Speaker 1: So I think early discussion that I've had with Republican 320 00:15:24,440 --> 00:15:26,840 Speaker 1: Senate staff in particular, is that they would join the 321 00:15:26,880 --> 00:15:28,480 Speaker 1: debt ceiling with the tax bill. 322 00:15:28,800 --> 00:15:31,440 Speaker 9: That has some advantages and some disadvantages. 323 00:15:31,520 --> 00:15:33,920 Speaker 1: The biggest advantage is that it gives you a deadline 324 00:15:34,080 --> 00:15:37,280 Speaker 1: of probably July of next year to pass the tax bill. 325 00:15:37,320 --> 00:15:39,800 Speaker 1: If you combine the two of those issues together, you 326 00:15:39,880 --> 00:15:42,560 Speaker 1: can pass a bil via reconciliation that does not require 327 00:15:42,680 --> 00:15:46,680 Speaker 1: any Democratic votes. So Republicans can forego any negotiations with 328 00:15:46,720 --> 00:15:50,040 Speaker 1: Democrats and pass a debt ceiling bill on their own terms. 329 00:15:50,360 --> 00:15:53,720 Speaker 1: That is, of course something that House Republicans have not 330 00:15:53,840 --> 00:15:57,360 Speaker 1: acted to do in almost two decades. They have perpetually 331 00:15:57,400 --> 00:16:01,840 Speaker 1: relied on majority support for debt seil hikes and appropriations 332 00:16:01,880 --> 00:16:05,080 Speaker 1: bills from the Democratic Conference, even when they're in the minority. 333 00:16:05,600 --> 00:16:08,040 Speaker 1: We've seen that play out repeatedly in the last couple 334 00:16:08,080 --> 00:16:11,640 Speaker 1: of years. So I think the debt ceiling potentially riding 335 00:16:11,680 --> 00:16:13,960 Speaker 1: along with the tax bill has the advantage of making 336 00:16:14,000 --> 00:16:17,600 Speaker 1: the tax bill an urgent must pass thing much earlier 337 00:16:17,600 --> 00:16:20,880 Speaker 1: in the year than otherwise would be achievable July versus December. 338 00:16:21,440 --> 00:16:24,000 Speaker 9: But it is a very heavy political lift. 339 00:16:24,160 --> 00:16:27,000 Speaker 1: And to do the debt ceiling be a reconciliation, you 340 00:16:27,080 --> 00:16:29,920 Speaker 1: must increase an authorization by a specific dollar figure. 341 00:16:30,120 --> 00:16:33,480 Speaker 9: You cannot suspend it through May twenty twenty eight. 342 00:16:33,640 --> 00:16:35,960 Speaker 1: You have to provide a one and a half two 343 00:16:36,040 --> 00:16:40,040 Speaker 1: trillion dollar debt ceiling hikes specifically, and that will equate 344 00:16:40,080 --> 00:16:42,880 Speaker 1: to a debt ceiling of thirty four thirty five trillion dollars, 345 00:16:42,880 --> 00:16:46,360 Speaker 1: which is a very hard vote for, in particular Republican 346 00:16:46,440 --> 00:16:47,960 Speaker 1: members of the House to take. 347 00:16:48,760 --> 00:16:51,760 Speaker 4: Henryetta my civics is a little rusty here. Remind us, 348 00:16:52,480 --> 00:16:56,920 Speaker 4: how do we replace a member of the House or 349 00:16:56,960 --> 00:16:59,200 Speaker 4: the Senate that joins an administration. 350 00:17:00,000 --> 00:17:00,720 Speaker 3: How does that happen. 351 00:17:01,760 --> 00:17:04,399 Speaker 1: It's different for every state. They have different rules around 352 00:17:04,440 --> 00:17:06,959 Speaker 1: when it has to be achieved. Whether there's a special election, 353 00:17:07,040 --> 00:17:08,760 Speaker 1: that depends how close you are to the election, But 354 00:17:08,840 --> 00:17:11,200 Speaker 1: in general, it's up to the state and the local 355 00:17:11,240 --> 00:17:13,840 Speaker 1: governing officials in that state at the governor's level, to 356 00:17:13,920 --> 00:17:17,200 Speaker 1: pick up a replacement in the interim. They will also 357 00:17:17,280 --> 00:17:20,280 Speaker 1: call special elections. That's going to be in each state's 358 00:17:20,359 --> 00:17:20,840 Speaker 1: by laws. 359 00:17:22,080 --> 00:17:25,399 Speaker 7: That's interesting. So as far as what that means moving forward, 360 00:17:25,440 --> 00:17:29,360 Speaker 7: what's the timetable on when those seats would be filled. 361 00:17:30,400 --> 00:17:31,760 Speaker 1: Well, they're going to want to get them filled as 362 00:17:31,760 --> 00:17:34,280 Speaker 1: fast as possible, particularly in states where there's going to 363 00:17:34,280 --> 00:17:37,040 Speaker 1: be a Republican replacement. I think the easiest way to 364 00:17:37,040 --> 00:17:39,800 Speaker 1: look at this is probably from the United States Senate standpoint, 365 00:17:40,240 --> 00:17:42,480 Speaker 1: because so many Senators are likely to go up to 366 00:17:42,560 --> 00:17:45,040 Speaker 1: the administration, not just JD. Vance, who's obviously now the 367 00:17:45,119 --> 00:17:48,680 Speaker 1: Vice president elect, but also a whole host of senators 368 00:17:48,720 --> 00:17:53,000 Speaker 1: like Marco Rubio, potentially Tom Cotton, Bill Haggerty, Marsha Blackburn, 369 00:17:53,480 --> 00:17:57,840 Speaker 1: every one of those state officials who's in a position 370 00:17:57,920 --> 00:18:02,640 Speaker 1: to replace or with a special interim appointment, a senator. 371 00:18:02,400 --> 00:18:03,639 Speaker 9: Is going to be in a position to do that. 372 00:18:03,680 --> 00:18:07,000 Speaker 1: So, whether that's maybe Ron De Santis, the speculation right 373 00:18:07,000 --> 00:18:08,879 Speaker 1: now is that Laura Trump is in the offing to 374 00:18:08,920 --> 00:18:10,639 Speaker 1: replace Rubio, those are going to be things that they 375 00:18:10,640 --> 00:18:12,840 Speaker 1: want to do quickly, because even on the Senate side, 376 00:18:13,040 --> 00:18:16,320 Speaker 1: you only have fifty three seat majority for Republicans. If 377 00:18:16,359 --> 00:18:19,800 Speaker 1: they lose a whole host of members that go probably 378 00:18:19,800 --> 00:18:22,200 Speaker 1: in January and February up to the White House when 379 00:18:22,200 --> 00:18:25,639 Speaker 1: they get confirmed, you're going to need those replacements immediately, 380 00:18:25,800 --> 00:18:29,359 Speaker 1: otherwise you won't have functional majorities. So they're going to 381 00:18:29,400 --> 00:18:32,000 Speaker 1: all do that very quickly on the House side in particular. 382 00:18:32,560 --> 00:18:35,760 Speaker 4: So, Henriette, given what we know about the makeup of 383 00:18:35,800 --> 00:18:37,480 Speaker 4: both houses of Congress, what do you think is on 384 00:18:37,520 --> 00:18:40,760 Speaker 4: the to do list for Congress in twenty twenty five. 385 00:18:42,600 --> 00:18:44,440 Speaker 1: Well, we're going to get through the lame duck session here, 386 00:18:44,440 --> 00:18:46,679 Speaker 1: We're going to do an emergency spending bill for the 387 00:18:46,840 --> 00:18:51,080 Speaker 1: hurricanes Helene and Milton. There's still going to be an NDAA, 388 00:18:51,320 --> 00:18:54,240 Speaker 1: there's still a farm bill component. There's going to be 389 00:18:54,280 --> 00:18:58,200 Speaker 1: efforts to pass a very small focused tax bill providing 390 00:18:58,240 --> 00:18:59,639 Speaker 1: tax and senates for home rebuilding. 391 00:18:59,680 --> 00:19:00,680 Speaker 9: After disasters. 392 00:19:01,000 --> 00:19:03,760 Speaker 1: But into next year, you should expect Congress to do 393 00:19:04,680 --> 00:19:07,200 Speaker 1: really the two things that they have to do, which 394 00:19:07,240 --> 00:19:10,360 Speaker 1: is the debt ceiling and a tax bill, and then 395 00:19:10,400 --> 00:19:12,480 Speaker 1: beyond that very little. It's very much going to be 396 00:19:12,480 --> 00:19:15,520 Speaker 1: focused on the appropriations process, which, as I mentioned, does 397 00:19:15,560 --> 00:19:18,280 Speaker 1: not leave room for cutting federal spending because you're going 398 00:19:18,359 --> 00:19:21,000 Speaker 1: to have to get ten to twenty Democrats in the 399 00:19:21,040 --> 00:19:24,200 Speaker 1: Senate and maybe as many as eighty to one hundred. 400 00:19:23,880 --> 00:19:24,439 Speaker 9: In the House. 401 00:19:24,800 --> 00:19:28,080 Speaker 1: So it's going to be pass the debt ceiling, pass 402 00:19:28,119 --> 00:19:30,360 Speaker 1: a tax bill, and then just work on a bipartisan 403 00:19:30,440 --> 00:19:32,520 Speaker 1: way to keep the government open for the rest of 404 00:19:32,520 --> 00:19:36,080 Speaker 1: the last three years of the Trump term. It's effectively 405 00:19:36,080 --> 00:19:37,920 Speaker 1: a repeat of what we saw from his first term 406 00:19:38,160 --> 00:19:40,960 Speaker 1: tax tax in the first year, and then trade for 407 00:19:41,000 --> 00:19:43,320 Speaker 1: the next three years after that. In this case, I 408 00:19:43,359 --> 00:19:46,680 Speaker 1: think tarriffs will start almost immediately, but that's not going 409 00:19:46,680 --> 00:19:47,439 Speaker 1: to be up to Congress. 410 00:19:47,440 --> 00:19:49,360 Speaker 9: That's going to be up to Ambassador. 411 00:19:48,960 --> 00:19:51,440 Speaker 1: Leithheiser, who will be sort of a trade zar for 412 00:19:51,560 --> 00:19:55,639 Speaker 1: the current conversation. And then Congress will do the backbreaking 413 00:19:55,680 --> 00:19:59,520 Speaker 1: work of passing a budget, passing appropriations bills, hyping the 414 00:19:59,520 --> 00:20:01,840 Speaker 1: debt ceiling. In the tax bill, and I suspect that's 415 00:20:01,920 --> 00:20:02,359 Speaker 1: largely it. 416 00:20:02,440 --> 00:20:04,399 Speaker 4: All right, Henrietta, thank you so much for joining us. 417 00:20:04,440 --> 00:20:08,000 Speaker 4: We've learn so much speaking with you. Henrietta tres Managing partner, 418 00:20:08,000 --> 00:20:10,720 Speaker 4: director of Economic Policy for Beta Partners. 419 00:20:12,320 --> 00:20:16,200 Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live 420 00:20:16,280 --> 00:20:19,800 Speaker 2: weekdays at ten am Eastern on applecard Play and Android 421 00:20:19,840 --> 00:20:22,600 Speaker 2: Auto with the Bloomberg Business App. You can also listen 422 00:20:22,720 --> 00:20:25,800 Speaker 2: live on Amazon Alexa from our flagship New York station, 423 00:20:26,200 --> 00:20:28,960 Speaker 2: Just Say Alexa, playing Bloomberg eleven thirty. 424 00:20:30,400 --> 00:20:32,160 Speaker 4: Jess meant and sitting in for Alex Steel on Paul 425 00:20:32,200 --> 00:20:34,800 Speaker 4: Sweeney Live here in our Bloomberg Interactive Brokers studio, or 426 00:20:34,800 --> 00:20:36,920 Speaker 4: streaming live on YouTube as well, So head over to 427 00:20:36,960 --> 00:20:40,600 Speaker 4: YouTube dot com search Bloomberg Podcast. All right, Jess, I'm 428 00:20:40,600 --> 00:20:44,440 Speaker 4: looking at the Mortgage Bankers Association thirty year fixed contract 429 00:20:44,440 --> 00:20:46,240 Speaker 4: for mortgages six point. 430 00:20:46,040 --> 00:20:49,159 Speaker 3: Eighty six percent. Dude, we were at six percent recently. 431 00:20:49,400 --> 00:20:51,119 Speaker 3: I thought I was going to refive the mortgage on 432 00:20:51,160 --> 00:20:52,560 Speaker 3: the Jersey Shore. 433 00:20:52,680 --> 00:20:53,880 Speaker 9: You haven't been able to do that. 434 00:20:53,960 --> 00:20:55,879 Speaker 3: Not happening. I don't know what's going on. 435 00:20:56,000 --> 00:20:59,080 Speaker 7: Alex Steel's able to get a great before. 436 00:20:58,920 --> 00:21:02,880 Speaker 3: speA never ever moving we want to talk. 437 00:21:03,000 --> 00:21:05,119 Speaker 4: We love talking real estate here, both commercial real estate 438 00:21:05,520 --> 00:21:07,240 Speaker 4: and residential real estate, and. 439 00:21:07,040 --> 00:21:08,879 Speaker 3: We can do that today with some good, good folks. 440 00:21:08,960 --> 00:21:12,440 Speaker 4: Best Freeman, chief executive officer for Brown, Harris Stevens and 441 00:21:12,480 --> 00:21:16,440 Speaker 4: Abigail do Little, chief market strategists, are correspondent for Bloomberg News, 442 00:21:16,440 --> 00:21:18,320 Speaker 4: both of them joining us here in our Bloomberg Interactive 443 00:21:18,320 --> 00:21:21,920 Speaker 4: Brokers studio. Best talk to us just about Let's start 444 00:21:21,960 --> 00:21:24,640 Speaker 4: with New York City. How's the New York residential real 445 00:21:24,800 --> 00:21:26,240 Speaker 4: estate market these days? 446 00:21:26,880 --> 00:21:30,119 Speaker 10: You know, the New York City market has been challenged lately. 447 00:21:30,600 --> 00:21:33,120 Speaker 10: The last few years, I would say two have been 448 00:21:33,160 --> 00:21:37,040 Speaker 10: slower than usual. Volume is down, and I think inflation 449 00:21:37,200 --> 00:21:40,159 Speaker 10: is a part of that. And obviously rates that you know, 450 00:21:40,359 --> 00:21:43,320 Speaker 10: top nearly eight percent for a thirty year, they have 451 00:21:43,359 --> 00:21:46,240 Speaker 10: asolutely been coming down. Inflation has been coming down, but 452 00:21:46,320 --> 00:21:48,440 Speaker 10: it's you know, all the stuff that's been going on 453 00:21:48,560 --> 00:21:52,000 Speaker 10: and the economy has kind of created this challenged housing market. 454 00:21:52,200 --> 00:21:55,040 Speaker 7: And I know you also are looking at your Connecticut, 455 00:21:55,119 --> 00:21:57,680 Speaker 7: New Jersey as well as Florida. Where do you see 456 00:21:57,800 --> 00:22:00,880 Speaker 7: different divergences between if you're looking more the South versus 457 00:22:00,920 --> 00:22:02,240 Speaker 7: where you're looking in the Northeast. 458 00:22:02,480 --> 00:22:05,080 Speaker 10: You know, the challenge in the South is more one 459 00:22:05,119 --> 00:22:08,480 Speaker 10: of inventory, So we lack inventory there and anything that 460 00:22:08,560 --> 00:22:11,680 Speaker 10: comes on, you know, it moves pretty quickly. And places 461 00:22:11,720 --> 00:22:15,240 Speaker 10: like Connecticut where we have offices, same thing, And people, 462 00:22:15,720 --> 00:22:17,920 Speaker 10: as Paul had said, don't want to put their homes 463 00:22:17,960 --> 00:22:20,000 Speaker 10: on the market because they locked in such a low rate. 464 00:22:20,359 --> 00:22:22,679 Speaker 10: So we're kind of doing the stance with buyers and 465 00:22:22,720 --> 00:22:25,600 Speaker 10: sellers and that's starting to come apart a little bit 466 00:22:25,680 --> 00:22:28,040 Speaker 10: now and we're hoping to get more fluidness as we 467 00:22:28,080 --> 00:22:29,960 Speaker 10: move into twenty twenty five. 468 00:22:30,320 --> 00:22:32,080 Speaker 11: So last week, we of course had a little bit 469 00:22:32,119 --> 00:22:34,879 Speaker 11: of news in this country the election of Donald's Trump. 470 00:22:34,880 --> 00:22:37,840 Speaker 11: And I've been dying to ask different real estate people, 471 00:22:37,840 --> 00:22:39,800 Speaker 11: and you happen to be the first. What do you 472 00:22:39,840 --> 00:22:44,560 Speaker 11: think the impact of his potential administration? Just right now? 473 00:22:44,560 --> 00:22:47,000 Speaker 11: There's so many different asset classes outside of real estate 474 00:22:47,000 --> 00:22:49,240 Speaker 11: that are moving, and then his actual administration, there's this 475 00:22:49,440 --> 00:22:52,840 Speaker 11: expectation of inflation, even though his last administration didn't have 476 00:22:52,880 --> 00:22:56,919 Speaker 11: that inflation. Are you hearing or feeling what might be 477 00:22:56,960 --> 00:23:00,000 Speaker 11: ahead for real estate based on the new administration coming in? 478 00:23:00,359 --> 00:23:02,639 Speaker 10: I mean, the one thing that Trump mentioned was that 479 00:23:02,680 --> 00:23:05,280 Speaker 10: he was going to remove the cap for the salt deduction, 480 00:23:05,440 --> 00:23:08,000 Speaker 10: which he actually put in place in twenty seventeen, So 481 00:23:08,040 --> 00:23:11,080 Speaker 10: that could be a good thing. But I think we're 482 00:23:11,200 --> 00:23:15,560 Speaker 10: open to collaborate and create a good environment. As you 483 00:23:15,640 --> 00:23:19,359 Speaker 10: probably know, there is something passing in city Council today 484 00:23:19,920 --> 00:23:22,320 Speaker 10: that will be deeply damaging, we believe, to the real 485 00:23:22,400 --> 00:23:25,639 Speaker 10: estate industry. So we're hoping to be able to collaborate, 486 00:23:25,680 --> 00:23:28,960 Speaker 10: work together. And I hope that Trump coming into office 487 00:23:29,000 --> 00:23:32,920 Speaker 10: doesn't push this far left agenda further left because that 488 00:23:32,960 --> 00:23:34,800 Speaker 10: would create more problems for us well. 489 00:23:34,840 --> 00:23:38,200 Speaker 11: So talking about what is the vote today, the Fair Act, 490 00:23:38,240 --> 00:23:42,240 Speaker 11: my understanding on it is essentially to eradicate broker fees 491 00:23:42,400 --> 00:23:48,119 Speaker 11: for renters, and the stated purpose is to lower moving 492 00:23:48,160 --> 00:23:51,960 Speaker 11: costs for those renters. You know at some point though 493 00:23:52,040 --> 00:23:55,440 Speaker 11: as somebody who has you know and still am a renter, 494 00:23:55,720 --> 00:23:57,520 Speaker 11: you know, it always gets passed along at some point. 495 00:23:58,359 --> 00:24:02,439 Speaker 11: So what is your view on this. It sounds as 496 00:24:02,440 --> 00:24:05,520 Speaker 11: though you're not necessarily so favorable. But it's not as 497 00:24:05,560 --> 00:24:09,120 Speaker 11: though brokers are gonna not take fees, no, of. 498 00:24:09,080 --> 00:24:11,320 Speaker 10: Course, And what you said, I mean you're not in 499 00:24:11,400 --> 00:24:14,359 Speaker 10: the real estate industry per se, but you get it. 500 00:24:14,400 --> 00:24:16,320 Speaker 10: What's gonna happen is that landlords are gonna have to 501 00:24:16,440 --> 00:24:19,320 Speaker 10: raise rent and there will be unintended consequences to this 502 00:24:19,520 --> 00:24:23,920 Speaker 10: legislation that the city Council just refuses to take into account. 503 00:24:24,600 --> 00:24:28,680 Speaker 10: We've had discussions, we testified there a whole bunch of people, landlords, 504 00:24:28,720 --> 00:24:31,920 Speaker 10: people from the industry. We talk to them. We expected collaboration, 505 00:24:32,600 --> 00:24:35,919 Speaker 10: and instead of that, a few weeks ago, they basically 506 00:24:36,040 --> 00:24:40,359 Speaker 10: jammed this legislation down our throats without any discussion. And 507 00:24:40,400 --> 00:24:44,320 Speaker 10: I think that is creating the challenges because without discussion, 508 00:24:44,400 --> 00:24:49,520 Speaker 10: collaboration and creating responsible legislation, you know you're gonna ostracize 509 00:24:49,920 --> 00:24:52,480 Speaker 10: communities and you're gonna actually hurt the people you're trying 510 00:24:52,520 --> 00:24:55,160 Speaker 10: to protect, which is they're missing the point. 511 00:24:55,880 --> 00:25:00,800 Speaker 7: So I also rent sixty five percent of Yorkers do, 512 00:25:00,920 --> 00:25:02,920 Speaker 7: because that's a big part of the market. I somehow 513 00:25:02,920 --> 00:25:04,680 Speaker 7: I was able to get a rent stabilize a purban. 514 00:25:04,760 --> 00:25:06,360 Speaker 7: So I feel like I'll probably end up dying there 515 00:25:06,400 --> 00:25:07,600 Speaker 7: because I'm not gonna want. 516 00:25:07,440 --> 00:25:08,080 Speaker 3: To give it up. 517 00:25:08,400 --> 00:25:10,920 Speaker 7: But I mean, it's just so expensive to try to 518 00:25:10,960 --> 00:25:13,080 Speaker 7: find other options, especially even when you're trying to rent. 519 00:25:13,200 --> 00:25:15,960 Speaker 7: So when you had so many people leave New York 520 00:25:16,000 --> 00:25:18,040 Speaker 7: right during COVID, but then so many people come back. 521 00:25:18,160 --> 00:25:19,760 Speaker 7: I mean, what do you do with the kind of 522 00:25:19,760 --> 00:25:21,479 Speaker 7: conundrum with it becomes the rent prices. 523 00:25:21,720 --> 00:25:24,320 Speaker 10: I mean that's the challenge. The market sort of sorts 524 00:25:24,359 --> 00:25:28,639 Speaker 10: that out, you know, and real estate professionals work with renters, 525 00:25:28,640 --> 00:25:31,320 Speaker 10: they work with landlords, they work with everybody. So I 526 00:25:31,320 --> 00:25:34,119 Speaker 10: think you want to work with your community. Look, the 527 00:25:34,240 --> 00:25:38,000 Speaker 10: city council doesn't have a monopoly on caring about their community. 528 00:25:38,040 --> 00:25:41,280 Speaker 10: We all care about our community and working together is 529 00:25:41,320 --> 00:25:44,159 Speaker 10: the best way to get things done. So listen, Rental 530 00:25:44,160 --> 00:25:47,720 Speaker 10: prices are a challenge. I get it. It's an expensive city. 531 00:25:47,760 --> 00:25:50,960 Speaker 10: New York is so as Boston. Many places are. But 532 00:25:51,040 --> 00:25:53,440 Speaker 10: that's about the market, and that's how things sort of 533 00:25:53,480 --> 00:25:54,720 Speaker 10: sort themselves out. 534 00:25:54,880 --> 00:25:56,879 Speaker 4: Where do you think thirty year mortgage rates need to 535 00:25:56,920 --> 00:26:00,159 Speaker 4: go to before the marginal seller will come on to 536 00:26:00,200 --> 00:26:02,160 Speaker 4: the market and say, okay, now it's not so bad 537 00:26:02,240 --> 00:26:03,920 Speaker 4: the costs for me to move here. 538 00:26:03,960 --> 00:26:06,879 Speaker 3: What do you think that is it? Low? Six percent? 539 00:26:07,160 --> 00:26:07,679 Speaker 3: Five percent? 540 00:26:07,840 --> 00:26:10,480 Speaker 10: I've been what i've I mean, the below six is 541 00:26:10,520 --> 00:26:13,439 Speaker 10: what we hear is like where people feel comfortable. Again, 542 00:26:13,600 --> 00:26:17,320 Speaker 10: mortgage rates are still historically low. Remember they were in 543 00:26:17,480 --> 00:26:20,760 Speaker 10: before my time in this business or anything, they were 544 00:26:20,760 --> 00:26:23,960 Speaker 10: in the double digits, So a six percent thirty year 545 00:26:24,160 --> 00:26:26,879 Speaker 10: and you know what, you can refinance if rates, you know, 546 00:26:27,000 --> 00:26:29,679 Speaker 10: dip further. So that's what I've heard is that if 547 00:26:29,680 --> 00:26:32,080 Speaker 10: they dip below six, people are getting into the market. 548 00:26:32,200 --> 00:26:34,159 Speaker 7: And so I was watching that. 549 00:26:34,480 --> 00:26:37,600 Speaker 10: It sounds like everybody's watching that because you know, most 550 00:26:37,920 --> 00:26:41,439 Speaker 10: I think sixty percent of people who own homes have mortgages, 551 00:26:41,680 --> 00:26:42,880 Speaker 10: So it has a big impact. 552 00:26:43,440 --> 00:26:43,639 Speaker 3: You know. 553 00:26:43,680 --> 00:26:45,320 Speaker 11: One thought that comes to mind in terms of this 554 00:26:45,440 --> 00:26:47,240 Speaker 11: fair act, if it is passed, I think that the 555 00:26:47,280 --> 00:26:50,000 Speaker 11: average price for a one bedroom doorman apartment here in 556 00:26:50,000 --> 00:26:52,720 Speaker 11: Manhattan is more than four thousand and maybe forty two 557 00:26:52,760 --> 00:26:54,720 Speaker 11: hundred or something like that. So if all of a 558 00:26:54,760 --> 00:26:57,639 Speaker 11: sudden that five to twelve percent fee gets passed along 559 00:26:57,720 --> 00:27:00,760 Speaker 11: through rent, are we going to see the average rent 560 00:27:00,880 --> 00:27:03,119 Speaker 11: in New York a year from now be you know, 561 00:27:03,280 --> 00:27:04,880 Speaker 11: closer to five thousand or something. 562 00:27:05,040 --> 00:27:07,280 Speaker 10: I mean, I think that's what the impact of something 563 00:27:07,320 --> 00:27:10,600 Speaker 10: like this would be. Well, because you know, landlords sometimes 564 00:27:10,680 --> 00:27:12,679 Speaker 10: pay the fee, sometimes they don't. If you look on 565 00:27:12,720 --> 00:27:16,680 Speaker 10: aggregator sites, fifty percent of time roughly they pay the fee, 566 00:27:16,680 --> 00:27:18,840 Speaker 10: and fifty percent of the time, they don't, and so 567 00:27:19,320 --> 00:27:22,040 Speaker 10: this is sort of burdening them with that. And then 568 00:27:22,280 --> 00:27:25,119 Speaker 10: there's a lack of transparency because consumers aren't going to 569 00:27:25,200 --> 00:27:28,520 Speaker 10: know what's available because agents won't be marketing and posting 570 00:27:28,520 --> 00:27:30,119 Speaker 10: the floor plan and the photo, so you're not going 571 00:27:30,200 --> 00:27:32,600 Speaker 10: to know what's out there. It's not a good way 572 00:27:32,640 --> 00:27:34,080 Speaker 10: to go about doing business. 573 00:27:34,320 --> 00:27:35,679 Speaker 3: Yet it's being signed in today. 574 00:27:36,320 --> 00:27:39,159 Speaker 10: It's being signed in today. The mayor has spoken about it. 575 00:27:39,240 --> 00:27:42,600 Speaker 10: He's been vocal. He believes obviously they have good intentions, 576 00:27:42,640 --> 00:27:45,240 Speaker 10: as we all should proceed like that, but he thinks 577 00:27:45,240 --> 00:27:48,200 Speaker 10: it will have negative and negative impact. He's he's been 578 00:27:48,280 --> 00:27:49,959 Speaker 10: encouraging them to reconsider it. 579 00:27:50,160 --> 00:27:52,240 Speaker 3: Best Friedman, thank you so much for joining us. Best Freedman. 580 00:27:52,280 --> 00:27:55,639 Speaker 4: She's the chief executive officer Brown, Harris Stevens and Abel 581 00:27:55,680 --> 00:27:58,600 Speaker 4: the Little chief markets correspondent for Bloomberg News. Joining us 582 00:27:58,600 --> 00:27:59,840 Speaker 4: here in our Bloombergin directed brokers. 583 00:28:01,600 --> 00:28:05,480 Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live 584 00:28:05,560 --> 00:28:08,600 Speaker 2: weekdays at ten am Eastern on Apple, card Play and 585 00:28:08,600 --> 00:28:11,879 Speaker 2: Android Otto with the Bloomberg Business. You can also listen 586 00:28:12,000 --> 00:28:15,080 Speaker 2: live on Amazon Alexa from our flagship New York station 587 00:28:15,440 --> 00:28:18,560 Speaker 2: Just Say Alexa playing Bloomberg eleven thirty. 588 00:28:19,520 --> 00:28:21,439 Speaker 4: Just meant sitting in for Alex steel on Paul Swinging. 589 00:28:21,480 --> 00:28:24,760 Speaker 4: We're live here in on our Bloomberg Interactive broke the studio, streaming. 590 00:28:24,359 --> 00:28:26,040 Speaker 3: Live on YouTube as well. 591 00:28:26,080 --> 00:28:28,080 Speaker 4: One of the more fascinating things to come out of 592 00:28:29,080 --> 00:28:34,480 Speaker 4: President like Trump's election is the role of Elon Musk. 593 00:28:34,240 --> 00:28:36,000 Speaker 7: The world's wealthiest individual. 594 00:28:36,000 --> 00:28:38,840 Speaker 4: Apparently he's been with the president ever since the election. 595 00:28:39,480 --> 00:28:42,280 Speaker 4: Joe Matthews just reporting he's in DC todays in mar 596 00:28:42,280 --> 00:28:45,800 Speaker 4: A Lago before Yep, exactly, fascinating, fascinating. 597 00:28:45,360 --> 00:28:46,200 Speaker 3: The story developing. 598 00:28:46,240 --> 00:28:49,080 Speaker 4: So guess what our big take people on top of 599 00:28:49,240 --> 00:28:52,200 Speaker 4: always as always, Max Chaplin joints a senior reporter for 600 00:28:52,320 --> 00:28:55,600 Speaker 4: Bloomberg BusinessWeek. Max, You've got a story out here. Elon 601 00:28:55,680 --> 00:28:59,720 Speaker 4: Musk has a new project to run Donald Trump's government. 602 00:29:00,240 --> 00:29:01,640 Speaker 3: What do we know about his role here? 603 00:29:02,240 --> 00:29:04,920 Speaker 12: Well, yesterday, I mean we learned a little bit more 604 00:29:04,960 --> 00:29:08,080 Speaker 12: just after this story was published. Donald Trump made something 605 00:29:08,120 --> 00:29:11,000 Speaker 12: official that he had teased and that Elon Musk hand 606 00:29:11,040 --> 00:29:14,200 Speaker 12: teased repeatedly on the campaign trail. Elon Musk will be 607 00:29:14,480 --> 00:29:19,600 Speaker 12: the person charged with providing advice on the streamlining of government. Now, 608 00:29:19,600 --> 00:29:22,400 Speaker 12: that could mean any number of things. It could mean, 609 00:29:22,560 --> 00:29:25,880 Speaker 12: I think very little. It could also mean that as 610 00:29:26,040 --> 00:29:30,080 Speaker 12: Donald Trump prepares to enact his you know, very ambitious agenda, 611 00:29:30,800 --> 00:29:33,040 Speaker 12: that Elon Musk will be at his side, and that'll 612 00:29:33,040 --> 00:29:35,880 Speaker 12: be my bad. I mean, I think the job thing 613 00:29:36,600 --> 00:29:39,800 Speaker 12: is probably a distraction. You know, the most important question 614 00:29:40,120 --> 00:29:42,400 Speaker 12: in the Trump White House is who has Trump's ear, 615 00:29:42,800 --> 00:29:45,880 Speaker 12: and right now that's Elon Musk. And I think as 616 00:29:45,880 --> 00:29:47,880 Speaker 12: we put together the story and as I've been thinking 617 00:29:47,920 --> 00:29:51,120 Speaker 12: about this, you know, Elon Musk throws him into these companies, 618 00:29:51,120 --> 00:29:54,560 Speaker 12: and famously he has six different companies, you know, Tesla 619 00:29:54,640 --> 00:29:57,200 Speaker 12: and SpaceX, his car company and rocket company being the 620 00:29:57,240 --> 00:29:57,720 Speaker 12: big ones. 621 00:29:57,960 --> 00:29:59,240 Speaker 3: I think we need to start. 622 00:29:58,960 --> 00:30:02,600 Speaker 12: Thinking about polyt and in particular Elon Musk's role in 623 00:30:02,680 --> 00:30:06,040 Speaker 12: right wing politics, whether it's the Trump the next Trump administration, 624 00:30:06,360 --> 00:30:10,000 Speaker 12: or even beyond that as his other big company, as 625 00:30:10,000 --> 00:30:11,960 Speaker 12: something that he is going to be devoting a lot 626 00:30:11,960 --> 00:30:15,320 Speaker 12: of time to and trying to use it, frankly to 627 00:30:15,440 --> 00:30:17,120 Speaker 12: benefit his other interests. 628 00:30:17,200 --> 00:30:19,600 Speaker 7: We were just chatting with Joe Matthew about this, and 629 00:30:19,680 --> 00:30:22,560 Speaker 7: so we were discussing about how by leading a commission 630 00:30:22,560 --> 00:30:26,000 Speaker 7: specifically outside of government, Elon Musk doesn't have to divest 631 00:30:26,200 --> 00:30:29,160 Speaker 7: his personal and financial holdings when making recommendations to the 632 00:30:29,160 --> 00:30:31,960 Speaker 7: White House on federal spending and regulations that he wants 633 00:30:32,000 --> 00:30:33,760 Speaker 7: to cut. I mean, what sort of precedents do we 634 00:30:33,840 --> 00:30:36,200 Speaker 7: have for something that's created sort of that's supposed to 635 00:30:36,200 --> 00:30:39,600 Speaker 7: be specifically outside government, and what power can he yield 636 00:30:39,640 --> 00:30:41,160 Speaker 7: and not yield? Do we have any indication? 637 00:30:41,320 --> 00:30:45,000 Speaker 12: Sure, I have been lots of presidential commissions. You know, 638 00:30:45,080 --> 00:30:47,840 Speaker 12: this kind of thing is not necessarily anything new. 639 00:30:48,160 --> 00:30:48,960 Speaker 3: It's really just. 640 00:30:48,960 --> 00:30:53,160 Speaker 12: A question of how closely is Donald Trump listening to it? 641 00:30:53,440 --> 00:30:56,200 Speaker 12: And when elon Musk, he suggested all kinds of very 642 00:30:56,280 --> 00:31:00,440 Speaker 12: radical things, things that are likely to be either difficult achieve, 643 00:31:00,560 --> 00:31:04,360 Speaker 12: like practically working within the confines of government, or wildly 644 00:31:04,440 --> 00:31:08,000 Speaker 12: unpopular or both. So you know, he's said he suggested, 645 00:31:08,080 --> 00:31:11,040 Speaker 12: for instance, that he's going to twitter the US government, 646 00:31:11,120 --> 00:31:14,000 Speaker 12: suggesting you know, massive layoffs. Remember he laid off eighty 647 00:31:14,040 --> 00:31:16,560 Speaker 12: percent of the Twitter staff. He is not going to 648 00:31:16,640 --> 00:31:18,800 Speaker 12: lay off eighty percent of the US government. I think 649 00:31:18,840 --> 00:31:21,840 Speaker 12: that would be a very very very surprising thing if 650 00:31:21,840 --> 00:31:25,840 Speaker 12: it were to happen. That said, you know, Trumps has 651 00:31:25,920 --> 00:31:29,160 Speaker 12: is going to try to defund aspects of the government, 652 00:31:29,400 --> 00:31:31,720 Speaker 12: and it really seems like Elon Musk is going to 653 00:31:31,720 --> 00:31:35,200 Speaker 12: play a role in deciding what gets defunded, which is 654 00:31:35,320 --> 00:31:37,920 Speaker 12: of course, is going to raise all sorts of ethical 655 00:31:37,960 --> 00:31:42,120 Speaker 12: concerns and questions. And because because there are ways that 656 00:31:43,240 --> 00:31:45,560 Speaker 12: President Trump, president elect Trump is going to be in 657 00:31:45,560 --> 00:31:50,160 Speaker 12: a position to say, squash investigations into Elon Musk companies, 658 00:31:50,280 --> 00:31:53,760 Speaker 12: or direct funds to Elon musk companies, or slow down 659 00:31:53,760 --> 00:31:58,120 Speaker 12: some of Elon Musk's competitors, and and so you know, 660 00:31:58,160 --> 00:32:00,880 Speaker 12: it's it's going to keep journalists busy. It's gonna I'm 661 00:32:00,920 --> 00:32:04,760 Speaker 12: sure that the left is going to be very focused 662 00:32:04,800 --> 00:32:08,040 Speaker 12: on this over the next couple of years because Elon Musk, 663 00:32:08,080 --> 00:32:09,920 Speaker 12: who's a polarizing guy, is going to be tied to 664 00:32:09,920 --> 00:32:11,280 Speaker 12: this administration very closely. 665 00:32:11,360 --> 00:32:14,360 Speaker 4: I mean, Elon Musk you cited in your article and 666 00:32:14,360 --> 00:32:18,560 Speaker 4: you just mentioned here all the companies he runs, Tesla, Spacexally, 667 00:32:18,680 --> 00:32:19,440 Speaker 4: on and on and on. 668 00:32:20,200 --> 00:32:21,680 Speaker 3: How many hours in a day does this guy have? 669 00:32:22,120 --> 00:32:24,080 Speaker 3: I mean, I mean, I mean. 670 00:32:24,000 --> 00:32:27,320 Speaker 7: You know, when you think about how many companies to. 671 00:32:27,840 --> 00:32:30,920 Speaker 12: Plays a lot of video games, which you know is 672 00:32:31,000 --> 00:32:34,880 Speaker 12: one of the many head scratchers with this extraordinary man. 673 00:32:35,320 --> 00:32:38,920 Speaker 12: Uh I, I think we've seen investors in some of 674 00:32:38,920 --> 00:32:42,680 Speaker 12: these other companies get concerned. And you know, right now 675 00:32:42,920 --> 00:32:45,480 Speaker 12: we're in the middle of this kind of honeymoon phase. 676 00:32:45,800 --> 00:32:46,480 Speaker 3: You know, there's a. 677 00:32:46,640 --> 00:32:49,960 Speaker 12: Mania to the way Elon Musk is talking about this stuff. 678 00:32:50,000 --> 00:32:52,280 Speaker 12: He's he's at the White He's in mar A Lago, 679 00:32:52,320 --> 00:32:53,120 Speaker 12: he's in Washington. 680 00:32:53,160 --> 00:32:53,400 Speaker 3: Now. 681 00:32:54,080 --> 00:32:56,480 Speaker 12: You know, Trump family members are referring to him as 682 00:32:56,600 --> 00:32:59,720 Speaker 12: uncle Elon. You gotta think that this is not. 683 00:33:00,040 --> 00:33:01,040 Speaker 3: Going to last. 684 00:33:01,200 --> 00:33:03,240 Speaker 12: And if it were to last, that there would be 685 00:33:03,280 --> 00:33:05,920 Speaker 12: a bit of a comdown because because, as you say, 686 00:33:06,240 --> 00:33:10,600 Speaker 12: Tesla is a big, complicated company with lots of challenges, 687 00:33:10,760 --> 00:33:12,480 Speaker 12: and right now we're seeing a lot of investors bid 688 00:33:12,560 --> 00:33:15,680 Speaker 12: up the stock, but there isn't a ton of It's 689 00:33:15,680 --> 00:33:18,760 Speaker 12: not like there's a clear rationale for why Tesla is 690 00:33:18,800 --> 00:33:21,760 Speaker 12: suddenly worth like forty percent more than it was before 691 00:33:21,800 --> 00:33:24,880 Speaker 12: the election, except that, hey, maybe Trump's gonna make things better. 692 00:33:25,320 --> 00:33:27,320 Speaker 12: But but you know, there are gonna be challenges and 693 00:33:27,480 --> 00:33:30,240 Speaker 12: the and distraction is going to be something that we're 694 00:33:30,240 --> 00:33:30,960 Speaker 12: gonna be looking at. 695 00:33:31,160 --> 00:33:33,680 Speaker 7: And what about ev policies, because it seemed like they 696 00:33:33,680 --> 00:33:37,320 Speaker 7: were more beneficial toward Tesla maybe under the Biden administration 697 00:33:37,440 --> 00:33:40,040 Speaker 7: rather than the prior Trump administration, So how does this 698 00:33:40,080 --> 00:33:42,360 Speaker 7: sort of shift and you have kind of the Trump 699 00:33:42,400 --> 00:33:43,280 Speaker 7: two point zero coming down. 700 00:33:43,320 --> 00:33:45,200 Speaker 12: And this is one of the things that's so strange 701 00:33:45,280 --> 00:33:50,120 Speaker 12: because Elon Musk became much more conservative during the Biden years, 702 00:33:50,360 --> 00:33:54,280 Speaker 12: but the Biding years were incredibly good to Tesla. Tesla's value, 703 00:33:54,640 --> 00:33:57,920 Speaker 12: you know, shot way up. It went from being kind 704 00:33:57,960 --> 00:34:00,600 Speaker 12: of a niche player to one of the large American 705 00:34:00,720 --> 00:34:05,720 Speaker 12: car companies. And you know, Trump, as you kind of hint, 706 00:34:06,000 --> 00:34:10,080 Speaker 12: was very critical about electric vehicles on the campaign trail. Now, now, 707 00:34:10,120 --> 00:34:12,239 Speaker 12: there are two things here that are probably worth bringing up. 708 00:34:12,520 --> 00:34:14,640 Speaker 3: One is where Tesla is now. 709 00:34:14,480 --> 00:34:16,959 Speaker 12: Is very different than it was four or five years ago. 710 00:34:17,239 --> 00:34:19,600 Speaker 12: And you could make an argument that these electric vehicle 711 00:34:19,640 --> 00:34:22,840 Speaker 12: subsidies actually do more for Tesla's competitors than they do 712 00:34:22,880 --> 00:34:23,800 Speaker 12: for Tesla itself. 713 00:34:23,960 --> 00:34:26,040 Speaker 5: So like, if you were to remove all these. 714 00:34:25,960 --> 00:34:29,960 Speaker 12: Subsidies, yes, it might cost Tesla investors money, but it 715 00:34:30,000 --> 00:34:33,080 Speaker 12: would also sort of help Tesla lock in it's very, 716 00:34:33,200 --> 00:34:36,040 Speaker 12: very dominant position in the market. And the second thing, 717 00:34:36,040 --> 00:34:38,600 Speaker 12: probably the more important thing, is that Elon Musk is 718 00:34:38,640 --> 00:34:41,839 Speaker 12: desperately trying to move beyond the auto business. He wants 719 00:34:41,880 --> 00:34:44,120 Speaker 12: to Tesla to be an AI company. He wants to 720 00:34:44,120 --> 00:34:47,880 Speaker 12: have robotaxis. There is no regulatory regime there, and I 721 00:34:47,920 --> 00:34:50,560 Speaker 12: think what investors are hoping, and again I don't know 722 00:34:50,600 --> 00:34:53,239 Speaker 12: that they have much sort of clear factual basis for 723 00:34:53,280 --> 00:34:55,560 Speaker 12: this hope. But this is the rationale that Trump will 724 00:34:55,600 --> 00:34:59,319 Speaker 12: basically legalize this business, that he will take a very 725 00:34:59,360 --> 00:35:03,080 Speaker 12: dicey regular situation and make it less dicey, and that 726 00:35:03,120 --> 00:35:05,239 Speaker 12: will be worth a lot of money to Tesla and 727 00:35:05,320 --> 00:35:06,600 Speaker 12: ultimately to a shareholders. 728 00:35:06,680 --> 00:35:09,839 Speaker 4: Thirty seconds left, Max, how much time do we think 729 00:35:09,960 --> 00:35:13,520 Speaker 4: Elon Musk is going to allocate to the government stuff? 730 00:35:13,680 --> 00:35:14,399 Speaker 3: Convince Well? 731 00:35:14,480 --> 00:35:16,719 Speaker 12: Right now, it seems like he's, yeah, he's it's a 732 00:35:16,719 --> 00:35:18,799 Speaker 12: full time job, right, I mean, he seems to be 733 00:35:18,840 --> 00:35:22,520 Speaker 12: there quite a lot. I think this is going to 734 00:35:22,600 --> 00:35:25,719 Speaker 12: be something that he's very very focused on, you know, 735 00:35:25,840 --> 00:35:29,480 Speaker 12: probably as long as it lasts, which which maybe that's 736 00:35:29,520 --> 00:35:31,480 Speaker 12: only going to be a couple of months. 737 00:35:32,080 --> 00:35:33,360 Speaker 3: Maybe it's going to be longer. 738 00:35:33,520 --> 00:35:35,960 Speaker 12: You know, he did he has signaled that he wants 739 00:35:35,960 --> 00:35:39,600 Speaker 12: to play in politics beyond this, beyond twenty twenty four, 740 00:35:39,680 --> 00:35:42,640 Speaker 12: but he's talking about the midterms already, so interest you'll see, all. 741 00:35:42,600 --> 00:35:45,560 Speaker 4: Right, very good, Max Chaffkin really appreciated. Max Chefckin, He's 742 00:35:45,560 --> 00:35:49,040 Speaker 4: senior reporter Bloomberg BusinessWeek. In our Bloomberg Interactive Broker Studio's 743 00:35:49,080 --> 00:35:52,759 Speaker 4: got the Big Take story this week, and you can 744 00:35:52,800 --> 00:35:56,440 Speaker 4: read that story on the Bloomberg and at Bloomberg dot Com. 745 00:35:56,480 --> 00:35:59,040 Speaker 4: Slash a Big Take where big fans and big take stories. 746 00:36:00,120 --> 00:36:04,840 Speaker 2: The Bloomberg Intelligence Podcast available on apples, Spotify, and anywhere 747 00:36:04,840 --> 00:36:08,160 Speaker 2: else you get your podcasts. Listen live each weekday, ten 748 00:36:08,200 --> 00:36:12,200 Speaker 2: am to noon Eastern on Bloomberg dot com, the iHeartRadio app, 749 00:36:12,320 --> 00:36:15,000 Speaker 2: tune In, and the Bloomberg Business App. You can also 750 00:36:15,080 --> 00:36:18,440 Speaker 2: watch us live every weekday on YouTube and always on 751 00:36:18,480 --> 00:36:19,560 Speaker 2: the Bloomberg terminal