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Speaker 1: Welcome to the Bloomberg P and L Podcast. I'm Pim Fox.

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Speaker 1: Along with my co host Lisa Abramowitz. Each day we

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Speaker 1: bring you the most important, noteworthy, and useful interviews for

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Speaker 1: you and your money, whether at the grocery store or

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Speaker 1: the trading floor. Find the Bloomberg pm L podcast on iTunes,

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Speaker 1: SoundCloud and at Bloomberg dot com. President Trump has proposed

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Speaker 1: a one trillion dollar infrastructure spending plan. Under this plan,

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Speaker 1: the US would spend about a hundred billion dollars each year.

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Speaker 1: Uh And Connor Sen, portfolio manager for New River Investments

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Speaker 1: in Atlanta, and a Bloomberg View columnist, pointed out that

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Speaker 1: such incredible spending would require five hundred and seventy thousand

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Speaker 1: additional construction workers. I want to bring in Connor. Now, Connor,

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Speaker 1: I thought your column was fascinating and it raised the

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Speaker 1: question can we find five hundred and seventy thousand new

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Speaker 1: construction workers in this currently tight labor market. Probably not

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Speaker 1: five million thousand that you'd want to hire, so you

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Speaker 1: can always find people off the five lines. I've never

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Speaker 1: worked on construction before, but if you paid me enough,

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Speaker 1: I suppose I could give it a shot. For preparing

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Speaker 1: for a career in construction exactly So, it's it's not

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Speaker 1: the kind of thing that you're likely to be able

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Speaker 1: to ramp up in a you know, in the short

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Speaker 1: term open long term, you could get there, but it's

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Speaker 1: not the kind of thing that could happen you're one

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Speaker 1: or two. So companies and investors that are looking to

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Speaker 1: reap the rewards of this infrastructure spending plan should perhaps

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Speaker 1: wait a while to celebrate, exactly So, if you're a company,

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Speaker 1: if you're a construction firm, perhaps you could do a

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Speaker 1: limited amount of production at a in In that way

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Speaker 1: you can keep your costom line. But if you're really

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Speaker 1: trying to ramp up to get the lion share of

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Speaker 1: something like this, you probably have to pay way more

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Speaker 1: than you get back from the government. So the reason

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Speaker 1: why I found this column so intra staying was because

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Speaker 1: a lot of people say, you know, they questioned the

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Speaker 1: idea of this infrastructure plan based on budget issues that

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Speaker 1: can the US pay for it? Is there the ability

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Speaker 1: to do it without raising taxes or increasing the deficit substantially?

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Speaker 1: You're saying from a fundamental perspective, it cannot be implemented,

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Speaker 1: at least not in the near term, is this being

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Speaker 1: priced in anywhere in markets that are currently bidding up

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Speaker 1: the you know, infrastructure and the and the industrial stocks

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Speaker 1: and bonds. Well, one of the questions that investors have

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Speaker 1: right now is what exactly is being pricedman, because you

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Speaker 1: have you do have underlying strong economic fundamental you seeing

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Speaker 1: you know, about a year ago, that's when the industrial

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Speaker 1: and energy cycle was botted me out, that started to recover,

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Speaker 1: and then in that sector inventories which have been drawn

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Speaker 1: down or then being built up to have this kind

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Speaker 1: of lagged demand from just how much industrial demand has fallen,

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Speaker 1: and so that is being pricedon's markets. And then on

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Speaker 1: the policy side, we just don't know yet because it's

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Speaker 1: only been a few months what exactly of people pising

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Speaker 1: in Is it you know, the views on policy, or

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Speaker 1: is it just this underlying economic situation. Connor, you mentioned

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Speaker 1: that there is an economic cycle that we all try

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Speaker 1: to pay attention to, and the last one that we

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Speaker 1: saw big growth for construction employment was between You also

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Speaker 1: write that we are later in this economic cycle. What

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Speaker 1: takes place later typically what happens sort of in the

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Speaker 1: cycles that early on after a session you have reduced

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Speaker 1: production and there's a lot of slack resources in the economy,

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Speaker 1: they can be put back to work. And so after

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Speaker 1: the set cut interest rates and there's potentially ciscal stimulus,

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Speaker 1: you have conditions that are right for strong early cycle growth.

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Speaker 1: And so we didn't see that in housing coming out

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Speaker 1: of the huge housing bubble, but we did see that

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Speaker 1: in the end of the sector and just sort of

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Speaker 1: a dead cat bounce and manufacturing, and so we saw

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Speaker 1: that growth early on and then sort of in the

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Speaker 1: middle of the cycle, like you said two thousand thirteen,

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Speaker 1: two fifteen, you had apartment growth, you did have some

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Speaker 1: energy growth, and at that point, I said, was still

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Speaker 1: very easy on the monetary side. What tends to happen

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Speaker 1: later in the cycle is as resource flat diminishes, cost

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Speaker 1: go up, the stead starts becoming more aggressive on hiking

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Speaker 1: interest rates, and that's when you tend to get into

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Speaker 1: problems with overproduction and tighter money. So Connor, at this

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Speaker 1: point in the cycle, can we get a sort of

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Speaker 1: ramp up in construction workers, especially at a time when

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Speaker 1: immigration is being constrained, Yeah, exactly. So the only way

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Speaker 1: to really make this work over the near term would

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Speaker 1: be a big change for more immigration. And it seems

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Speaker 1: like at least on below end for immigration or going

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Speaker 1: the other direction. And so the question is just I

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Speaker 1: think our two choices are either more production at much

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Speaker 1: higher prices or kind of constrained production at lower prices,

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Speaker 1: and either situation is really great. So Connor, given your

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Speaker 1: role as a portfolio manager at New River Investments, have

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Speaker 1: you started to back away from certain securities that have

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Speaker 1: gotten bit up in anticipation of this infrastructure spending. But

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Speaker 1: I mean, going back to your original point where people

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Speaker 1: are trying to understand what actually is being priced into

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Speaker 1: the market. Do you think that the market has gone

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Speaker 1: too far with pricing in too much? That seems implausible

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Speaker 1: at this point, and specifically, where are you looking? I do,

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Speaker 1: because our viue is that if we do get more production,

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Speaker 1: it's going to be at sort of prices and profit

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Speaker 1: margins that are not very compelling for companies. And so

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Speaker 1: our view is that there isn't that much resource black

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Speaker 1: left in economy, especially with immigration policy being where it is,

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Speaker 1: so it's just not going to be a great environment

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Speaker 1: for companies and profit margins. It might be a great

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Speaker 1: environment for workers and wages. Thence the question is what's

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Speaker 1: the best way to take advantage of that. So for

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Speaker 1: that making, the answer is more real estate or kind

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Speaker 1: of just to discussion our consumer spending, but not kind

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Speaker 1: of business fixed investment and and things that are potentially

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Speaker 1: will suffer on the profit Martin side as as interest

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Speaker 1: rates go up and labor gets more expensive. So which

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Speaker 1: companies do you think are overbid at this point? I

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Speaker 1: think anything related to infrastructure in general. Um, you know,

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Speaker 1: you sort of see what's happened to prices over the

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Speaker 1: past year. A company like United Rentals, which is very

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Speaker 1: highly lettered and sort of at the bottom of the

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Speaker 1: industrial cycle. Early last year the stock went down to

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Speaker 1: I think forty five dollars to share. Today it's more

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Speaker 1: like a hundred hundred thirty d and thirty five. I

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Speaker 1: think it's just one of these things where it's a

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Speaker 1: combination of more optimism on policy and then sort of

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Speaker 1: more momentum traders who would just look at charts and

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Speaker 1: prices see how much it's gone up, and they're trying

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Speaker 1: to ride that trend. But it's just tough to see

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Speaker 1: how this is going to work out profitably for companies

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Speaker 1: with the next two or three years. Would it make

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Speaker 1: more sense to build more homes rather than spend time

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Speaker 1: arguing over roads, buildings, tunnels and repairing the highways, because

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Speaker 1: that's not something you just may wave a magic wand

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Speaker 1: and it happens. Yeah, I think you want to try

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Speaker 1: to do both. The issue is just it's a lot

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Speaker 1: easier to sort of get the house and stuff done

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Speaker 1: in a reasonable way. Infrastructure is notoriously slow, with memory

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Speaker 1: review and policymakers and architects and planners and just there's

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Speaker 1: so many different touch points and potential pain points as

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Speaker 1: resources get tight, and so there's just no way to

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Speaker 1: throw a lot of money at it and get good,

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Speaker 1: good value in the short term, no value in the

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Speaker 1: short term. Well, in that case, I guess maybe people

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Speaker 1: will take some profits on on those positions. Just finally,

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Speaker 1: to to connor, you know, we keep hearing that infrastructure

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Speaker 1: spending will then lead to higher and more sustained economic growth.

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Speaker 1: Is there any evidence to support that. There's there's sort

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Speaker 1: of hazy long term fundamental growth. It just it's sort

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Speaker 1: of like whether you have just better policy or or

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Speaker 1: more younger hard to measure, given how the economic cycles

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Speaker 1: more bobble than that sort of production increase. One more

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Speaker 1: thing I wanted to point out is something that other

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Speaker 1: people aren't talking about, is that, let's say we found

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Speaker 1: these five thousand construction workers and maybe a million more

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Speaker 1: support staff, what happens after ten years, because then you

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Speaker 1: have a million and a half workers that immediately get

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Speaker 1: run out of work and create this technical assessment right away.

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Speaker 1: The back end of this is also problematic. Thanks very much.

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Speaker 1: Connor Sen is a Bloomberg View columnist and portfolio manager

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Speaker 1: for New River Investments. They're based in Atlanta, and to

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Speaker 1: learn more about what he is doing with other people's

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Speaker 1: money and his own, I want to bring in David Coudla.

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Speaker 1: He is the founder and the chief executive of and

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Speaker 1: he's also the chief investment strategist. I beg your pardon

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Speaker 1: of mainstay Capital Management helps to manage more than two

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Speaker 1: billion dollars of customer assets. David, thank you very much

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Speaker 1: for being with us. Good morning, him, Good morning. You've

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Speaker 1: got a lot of hats to where they're I'm curious

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Speaker 1: if you can tell me whether you're selling anything into

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Speaker 1: this rally. Well, what we have been selling going back

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Speaker 1: into the fourth quarter is our interest rate sensitive bond positions.

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Speaker 1: We've been largely void of interest rate sensitive bond That's

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Speaker 1: probably the most important warning I can give to investors,

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Speaker 1: although once I can interest rate sensitive bonds in other words,

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Speaker 1: bonds invests the vast majority. Well, is it is it

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Speaker 1: just treasuries? Is it an investment grade bonds? Are you

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Speaker 1: also including in that high old bonds emerging markets? Good?

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Speaker 1: Good question and an important distinction. We we've still been

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Speaker 1: in high old bonds emerging market debt, and as Pimp said,

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Speaker 1: floating rate income we think is a is a great

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Speaker 1: opportunity in a rising interest rate environment. Our concern is

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Speaker 1: with yes, specifically treasuries and high grade corporates, those very

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Speaker 1: safe investments for credit risk and default risk, but our

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Speaker 1: interest rate sensitive and actually uh, you know, face negative

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Speaker 1: returns looking at the time of horizon since last year

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Speaker 1: you might be considering over several months and going forward.

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Speaker 1: We just we've we've had uh caution there and continue

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Speaker 1: to have that caution with fiscal policy, tax policy, and

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Speaker 1: monetary policy all pointing towards even higher rates. So, David,

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Speaker 1: people have been talking about a bond market sell off

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Speaker 1: for years, and people have been expecting inflation to pick up.

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Speaker 1: Now the FED is expected, I believe now the chance

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Speaker 1: of a March FED rate hike is nine or something

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Speaker 1: looking at FED funds future, but the yield curve is flattening.

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Speaker 1: In other words, people are expecting growth too slow. What

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Speaker 1: gives you confidence that growth and inflation are going to

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Speaker 1: pick up enough to justify a really truly significant bond

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Speaker 1: sell off this time around? Great question, And there have

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Speaker 1: been so many people that have been forecasting the rising rates,

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Speaker 1: have been shorting bonds going back five years. The difference

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Speaker 1: now is the feed is finally raising rates, and you know,

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Speaker 1: we we ended Keewey started raising rates a little over

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Speaker 1: a year ago, raised in December. We think we'll get

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Speaker 1: at least two rate hikes this year, so we know

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Speaker 1: the short end of the curve is going up. We

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Speaker 1: couple that with President Trump being elected and as I

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Speaker 1: spoke of the reflationary those three things, reflationary policies for

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Speaker 1: the economy, and we're seeing better economic data, so you know,

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Speaker 1: we've we've got a recently, I want to use the

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Speaker 1: word strong economy. Economy that's doing okay, and we think

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Speaker 1: it's going to continue to do well. It's still expanding,

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Speaker 1: and monetary both monetary and fiscal policy pointing towards higher rates.

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Speaker 1: That is a change, you know, largely from what we

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Speaker 1: had over the past let's say four years until until

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Speaker 1: six or seven months ago. So you're not taking any

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Speaker 1: of these signals about how wonderful everything is compared to

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Speaker 1: let's say July of two thousand one, or compare it

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Speaker 1: to two thousand seven. You don't buy that there's a

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Speaker 1: little bit of irrational exuberance out there. I think there's

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Speaker 1: certainly a little bit when we see the DAL rise.

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Speaker 1: For I tell you the sp up six and a

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Speaker 1: half percent. So if you're telling me that we are

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Speaker 1: in March and it's up six and a half more

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Speaker 1: than six and a half per sent what kind of

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Speaker 1: risk are you taking on if you want an extra

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Speaker 1: four for the rest of the year. That's right there.

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Speaker 1: There is there, there's some exuberants. I mean, I think

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Speaker 1: it's I think it's even fair to say that maybe

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Speaker 1: we're starting to approach that u fork stage in the

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Speaker 1: stock market cycle. But we don't see what we don't see.

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Speaker 1: We don't see a recession on the horizon. Remember a

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Speaker 1: year ago, all the analysts, all the market pundits calling

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Speaker 1: talking about recession here or around the globe, talking about

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Speaker 1: inflation here around the globe. That's that's gone. We're now

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Speaker 1: looking at inflation on the rise. We're looking at uh

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Speaker 1: still you know, growth and emic growth, but still growth

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Speaker 1: that we expect to improve at least some and so

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Speaker 1: that's good for stocks. You know, we're positive on stocks

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Speaker 1: and that environment. But look him and Lesta, a correction

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Speaker 1: of of ten or even we can get that at

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Speaker 1: any time. David, what have the call has been like

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Speaker 1: from your clients? What are the biggest concerns at this point? Uh.

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Speaker 1: The the interesting thing is is, you know, we have

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Speaker 1: always in an environment like this, we have those clients

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Speaker 1: that are excited, I want to get more aggressive. We

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Speaker 1: have clients who are concerned with how far the markets

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Speaker 1: come and want to get more conservative. What's interesting is is, uh,

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Speaker 1: and we were talking about this just this week, is

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Speaker 1: how that tends to fall down party lines. Those people

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Speaker 1: that may have voted for Trump believe in Trump, what

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Speaker 1: he's going to do for the economy, believe this continues

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Speaker 1: and gets even better. Uh. Those that have been cautious

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Speaker 1: and have concerns about Trump have only become more cautious.

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Speaker 1: Is the market has gone higher. So it's very interesting

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Speaker 1: how politics and political persuasion has entered into Investor Sentiment

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Speaker 1: Individual Investor Sentiment. David Coola, thank you so much for

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Speaker 1: joining us. Always a pleasure. David coula chief executive officer

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Speaker 1: and chief investment strategist of Mainstay Capital Management with about

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Speaker 1: two billion dollars under management. All right, we want to

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Speaker 1: get smarter about one particular company right now, which is

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Speaker 1: Roche Holdings. Uh, the a d R as the American

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Speaker 1: Depository receipts are trading higher by more than six and

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Speaker 1: a half percent right now here to tell us? Why?

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Speaker 1: Is Max Neeson here is our Gadfly columnist. He covers biotech, pharmaceuticals,

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Speaker 1: and healthcare. He can be followed on Twitter at Max

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Speaker 1: Neeson Max Neeson. So tell us what is up with

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Speaker 1: this new breast cancer drug and Roche Holdings. So this

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Speaker 1: was a really closely watched trial for the company. The

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Speaker 1: drugs called Projetta, and the company was sessing whether this

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Speaker 1: drug added on to its existing drug hercepting helped more

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Speaker 1: women survive or made it less likely that their breast

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Speaker 1: cancer would come back. Um, so this was a really

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Speaker 1: difficult trial for them to have success in because hercepting

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Speaker 1: works really really well already, and you kind of see

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Speaker 1: that reflected in the share price boost. This is a

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Speaker 1: really big company to move six percent or seven percent

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Speaker 1: market cap move like fourteen billion, so really good news

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Speaker 1: for the company. Well, so could you walk us through

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Speaker 1: first of all, what this drug, how much it helps

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Speaker 1: extend people's lives or you know, just whether it improves

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Speaker 1: their quality of life, extends their life. Uh, and also

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Speaker 1: how much more it would cost for the patient I'm

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Speaker 1: talking about, so that that's always the question with cancer drugs.

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Speaker 1: Often you see where even really expensive cancer drugs cannot

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Speaker 1: only a couple of months. But the really good news

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Speaker 1: here is when combined with surgery and and her sept

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Speaker 1: in um, women actually have a really good chance of

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Speaker 1: surviving in the long run. We don't know the precise

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Speaker 1: benefit that this adds on top of her sceptin but um,

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Speaker 1: the fact that the trial succeeded suggests that it's really significant.

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Speaker 1: So it's something like already, um, you know, four out

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Speaker 1: of five women see a really good result and this

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Speaker 1: could even add on top of that. And is this

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Speaker 1: late stage breast cancer or is this throughout the differ

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Speaker 1: front stages. This is early stage when you when you

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Speaker 1: catch it pretty early, you kind of have really good results,

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Speaker 1: but I believe the drug is being tested in later

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Speaker 1: stages as well. What kind of market are we talking about,

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Speaker 1: It depends on who you ask, but I've seen a

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Speaker 1: peak sales estimate of about five point five billion, and

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Speaker 1: that that's really significant for Roche, which is seeing its

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Speaker 1: three biggest drugs of asking her up in and I'll

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Speaker 1: starting to see biosimilar competition over the next few years.

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Speaker 1: Those stories are expected to sell twenty billion this year.

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Speaker 1: So having something that kind of props up one of

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Speaker 1: those franchises adds some more sales is really significant for

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Speaker 1: the company. Okay, biosimilar that's generic. Basically you're you're going

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Speaker 1: to have some of these really lucrative drugs become eligible

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Speaker 1: for generic rip offs that can then take away profits

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Speaker 1: corrected a sort of lower cost margins. That's sort of

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Speaker 1: the idea, right, Yeah, So it's it's slightly trickier with

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Speaker 1: these drugs. It's it's like a bit more complicated of

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Speaker 1: a process to get a biosimilar proper regular generic, So

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Speaker 1: the sales drop off is likely to be slower, but

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Speaker 1: just the sales still are going to drop pretty significantly

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Speaker 1: in the next five years. So that brings me back

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Speaker 1: to the price. Do we have a sense of how

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Speaker 1: much this could cost this new drug that they that

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Speaker 1: they passed the test. It'll probably add some you know,

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Speaker 1: an additional maybe ten dollars to the monthly list priced

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Speaker 1: cost of treating a patient, although we don't know for

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Speaker 1: sure until we see the actual combo on the market.

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Speaker 1: And the other thing that makes us an advantage that

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Speaker 1: when you have a BYR solar similar competitor, Roach can

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Speaker 1: offer this too drug package, perhaps at a discount, so

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Speaker 1: it might also protect sales of their older drug I

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Speaker 1: which you know, the boo boost for the company. Can

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Speaker 1: you give me up an up to date version of

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Speaker 1: what's going on at Valiant Pharmaceuticals and what Joe Papa

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Speaker 1: is up to, because I mean the stock is up

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Speaker 1: about three and a quarter percent today, but I mean

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Speaker 1: this is a fourteen dollar stock that well, it wasn't

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Speaker 1: always a fourteen dollar stock, and a lot of people

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Speaker 1: are feeling the pain. I mean as of a couple

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Speaker 1: of days ago, it was something like an eighteen dollar stocks. Yeah,

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Speaker 1: it's had a pretty rough couple of days go back,

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Speaker 1: a couple of go back just a year or so

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Speaker 1: in March and we're talking and you know, at least

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Speaker 1: that it's been it's been pretty incredible. Um, what's happened?

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Speaker 1: More recently? They reported fourth quarter earnings and it was

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Speaker 1: the same sort of kind of grim news that that

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Speaker 1: we've come to be used to for Valiant. Uh, some

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Speaker 1: of like a five million dollar loss. Um, what was

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Speaker 1: this thing about SALEX, SALEX Pharmaceuticals. It was some report

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Speaker 1: that was not really accurate. Yeah, So someone I think

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Speaker 1: took a look at the ten k so an sec

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Speaker 1: investigation really to SALEX and kind of you know, pumped

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Speaker 1: out a tweet. Maybe, but this is something that the

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Speaker 1: company's is already disclosed and is close to settling. They've

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Speaker 1: already said some cash side But but I think it

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Speaker 1: does highlight, you know, beyond the fact that the results

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Speaker 1: were disappointing, the debt still looms in an increasingly terrifying way,

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Speaker 1: that the company is the subject that beyond SALEX fairly

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Speaker 1: digging array of lawsuits and investigations that might eat into

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Speaker 1: its pretty minimal pile of cash. That's it, just a

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Speaker 1: monumental pile of debt, monumental pile of investigations. I mean,

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Speaker 1: you know, Max Deeson Love talking to you as always.

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Speaker 1: He's a Gadfly columnist covering biotech, pharma, and healthcare of

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Speaker 1: Bloomberg News. You can find gad Flight columns on the

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Speaker 1: terminal at NI gad Fly or on the Bloomberg website.

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Speaker 1: President Trump has pledged to cut the e p a's budget.

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Speaker 1: Environmental Protection Agency's budget by twenty five percent. That is

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Speaker 1: part of President Trump's overall budget for the US, and

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Speaker 1: we're gonna dig a little bit into what this might

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Speaker 1: mean for specific programs within the e p A. I

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Speaker 1: want to bring in Rob Barnett, senior energy policy analyst

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Speaker 1: with Bloomberg Intelligence. Rob which areas of the e p

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Speaker 1: A are likely to get cut most under President Trump's proposal. Well,

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Speaker 1: I would keep in mind that it's just a proposal

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Speaker 1: at this point, but we certainly expect that whether the

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Speaker 1: budget truly gets cut or not, which is ultimately a

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Speaker 1: matter for Congress to decide, that the Environmental Protection Agency

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Speaker 1: is going to do a whole lot less rulemaking under

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Speaker 1: President Trump than it did under former President Barack Obama.

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Speaker 1: So this includes everything from greenhouse gas regulations UH to

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Speaker 1: potentially even conventional pollutant regulations. So we expect a big

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Speaker 1: slowdown in terms of agency process under the leadership of

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Speaker 1: Scott Pruitt. Whether or not we have these budget cuts

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Speaker 1: or not rob the the e p A is an

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Speaker 1: eight billion dollar budget agency. It has fifteen thousand employees.

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Speaker 1: Who is a Scott Pruitt give us an idea of

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Speaker 1: his backers and his background. Well, he's the former Attorney

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Speaker 1: general from Oklahoma, and he has had a pretty anti

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Speaker 1: e p A stance from his prior perch. He's one

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Speaker 1: of these attorney generals that sued the e p A

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Speaker 1: numerous times under former President Barack Obama to try to

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Speaker 1: block regulations. And so we see a very fundamental shift

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Speaker 1: from how President Barack Obama viewed the e p A

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Speaker 1: versus how we expected to be viewed under President Trump

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Speaker 1: and Scott Pruett. Their goal is to really slow put

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Speaker 1: the brakes on anything related to greenhouse gases. So the

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Speaker 1: first and foremost that means they're going to try to

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Speaker 1: tackle this regulation called the Clean Power Plan and actually

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Speaker 1: take it off the books. Now that process could take

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Speaker 1: a few years, but instead of taking the staff for

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Speaker 1: the agency and having them craft new regulations, they're probably

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Speaker 1: going to use the staff to actually kind of put

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Speaker 1: the brakes on, putts on existing regulations, and try and

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Speaker 1: walk them back a little bit. So it's a really

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Speaker 1: different type of agency and their Donald Trump. So given that, Rob,

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Speaker 1: are we already starting to see a lot of departures

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Speaker 1: from the e p A of long standing members of

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Speaker 1: the agency, potentially even career employees leaving. You know, there

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Speaker 1: have there are always departures of professional staff when you

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Speaker 1: have a new administration come in. By and large, the

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Speaker 1: rank and file of e p A probably isn't going

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Speaker 1: to be necessarily departing just because you've got a new administration.

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Speaker 1: You know, these these career staff folks work typically through

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Speaker 1: republic him and democratic administrations. The nature of their work

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Speaker 1: changes though, So while we won't expect as much rulemaking

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Speaker 1: related to greenhouse gases, there probably will still be enforcement

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Speaker 1: of most standard e p A protection So things like

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Speaker 1: mercury ozone, sulfur, those things aren't going away no matter

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Speaker 1: who's in the White House. And then going back to

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Speaker 1: the budget you were saying you started the conversation, Rob

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Speaker 1: saying that these are just proposals. How much political will

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Speaker 1: is there in Congress to pass the budget as is

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Speaker 1: with respect to the cut in the e PAS budget.

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Speaker 1: I think there is very little likelihood that Congress will

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Speaker 1: simply take up President Trump's proposal and pass it as

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Speaker 1: it is. That's just not how Congress works. While I

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Speaker 1: wouldn't expect Congress to pass a budget that gives a

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Speaker 1: big boost and spending to e p A, something like

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Speaker 1: a cut like that like President Trump has proposed is

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Speaker 1: very unlikely. There will be defenders of the e p

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Speaker 1: A in Congress who will seek to assure that the

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Speaker 1: agency isn't dismantled under President Trump. And there will probably

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Speaker 1: even be some Republican members of Congress who would not

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Speaker 1: want to see the agency completely undone. So very low

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Speaker 1: chance of this kind of cut on this order of

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Speaker 1: magnitude occurring. Robbie. Also, we're talking about Scott Pruitt and

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Speaker 1: how he was not really for the e p A

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Speaker 1: before he became head of the agency. How much autonomy

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Speaker 1: does he have with respect to rolling back some of

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Speaker 1: the mandates that the e p A took on under

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Speaker 1: President Obama. Former President Obama. Well, you know, he has

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Speaker 1: a shared vision with President Trump in terms of the

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Speaker 1: kind of changes that they want to make to the agency.

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Speaker 1: So there's no surprise eyes that Scott Pruett and President

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Speaker 1: Trump want to roll back regulations. They campaigned on that,

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Speaker 1: so they're going to try to achieve it. The problem is,

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Speaker 1: in some sense for them, is that there's a lot

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Speaker 1: of process to doing that. Just because you became the

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Speaker 1: president and just because he had a new head of

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Speaker 1: ep A doesn't mean you get a blank check, very

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Speaker 1: very strong procedural steps that Scott Prue it's going to

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Speaker 1: have to take to achieve his goals. In every step

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Speaker 1: along the way, there will be legal challenges. So no

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Speaker 1: matter what he hopes to achieve, he's gonna essentially need

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Speaker 1: confirmation of rolling back rules from the d C. Circuit

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Speaker 1: Court of Appeals or potentially even the Supreme Court. All

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Speaker 1: of these things will be heavily heavily litigated, So nothing

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Speaker 1: is don't expect any quick win, all right, Well we won't,

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Speaker 1: but we're going to expect you to keep us up

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Speaker 1: to date. Rob Barnet at senior energy policy analyst, Bloomberg Intelligence.

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Speaker 1: Thanks for listening to the Bloomberg pien L podcast. You

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Speaker 1: can subscribe and listen to interviews at iTunes, SoundCloud, or

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Speaker 1: whatever podcast platform you prefer. I'm Pim Fox. I'm out

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Speaker 1: there on Twitter at pim Fox. I'm out there on

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Speaker 1: Twitter at Lisa Abramo. It's one before the podcast. You

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Speaker 1: can always catch us worldwide on Bloomberg Radio