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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am

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Speaker 1: Eastern on Applecarplay and Android Auto with the Bloomberg Business App.

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Speaker 1: Listen on demand wherever you get your podcasts, or watch

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Speaker 1: us live on YouTube.

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Speaker 2: I want to switch back to what kind of stay

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Speaker 2: with global trade?

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Speaker 3: Here? Shawn donad Joints is here, Bloomberg News senior economics writer.

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Speaker 3: As President Trump widens the trade fight to include global

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Speaker 3: taxes and regulation, Sean, thanks so much for joining us here.

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Speaker 3: What is the latest from this administration as it relates

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Speaker 3: to global trade, taxes, regulation.

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Speaker 2: It's a wide mix of topics.

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Speaker 4: It's a wide mix of topics. It's also a fast

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Speaker 4: moving topic, as you can appreciate, and your previous guest

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Speaker 4: was talking about. Look, yesterday President Trump announced a plan

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Speaker 4: to come up with what he calls reciprocal tariffs, and

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Speaker 4: that will apply to any country in the world. They're

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Speaker 4: going to start by focusing on countries with which the

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Speaker 4: US has a large trade deficit or economies. So they're

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Speaker 4: looking hard at the European Union, for example. But what

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Speaker 4: was interesting about yesterday in a real departure from what

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Speaker 4: the US has done for decades is that they're going

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Speaker 4: to try and calculate these reciprocal tariffs by looking not

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Speaker 4: just at the tariffs that those other countries charge US goods,

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Speaker 4: but also at taxes, at what they call non tariff barriers,

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Speaker 4: which gets into things like regulation, and as they say

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Speaker 4: in the order that President Trump signed yesterday, any policy

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Speaker 4: that offers any kind of barrier to a US good.

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Speaker 4: As someone I was talking to yesterday pointed out, that

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Speaker 4: could even mean taking on the metric system if you're

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Speaker 4: talking about the EEA, trying costs there. Uh So, it's

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Speaker 4: a real broadening out of what Trump has has had

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Speaker 4: as its kind of central grievances on trade in the past.

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Speaker 4: One big target is the European Union's use of a

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Speaker 4: value added tax, which is effectively a sales tax that

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Speaker 4: all of its member countries operate. That's very different from

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Speaker 4: what we have here in the US. We obviously don't

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Speaker 4: have a national sales tax. We only have state level

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Speaker 4: sales taxes, and so.

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Speaker 5: None are as high as the v A T. So

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Speaker 5: I mean, none are as high as as.

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Speaker 4: The VAT and the real right from from from the

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Speaker 4: Trump administration is that European exporders get to clim back

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Speaker 4: v a T when goods leave the European Union, and

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Speaker 4: that US exporters to the EU have to pay v

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Speaker 4: a T when they arrive there. Now, tax experts say

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Speaker 4: that's kind of a misreading of how how things works.

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Speaker 4: VA T, much as a sales tax in Maine or

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Speaker 4: Maryland would be U is a tax on something that

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Speaker 4: you buy in that in that place. And those US

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Speaker 4: goods that have to pay a v a T in

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Speaker 4: or those US companies have to pay a VAT when

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Speaker 4: they sell in France, say, are selling alongside French goods

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Speaker 4: that also have to pay a VAT. Anyone has to

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Speaker 4: pay VAT in Europe, so it's not quite the competitive disadvantage.

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Speaker 5: It's a little different. I mean, if I order something

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Speaker 5: from Maine, I don't pay main taxes on it, right, but.

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Speaker 4: Right unless you buy it in May.

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Speaker 5: I feel like this was a concept of a plan

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Speaker 5: Sean more than really a plan, and I thought we

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Speaker 5: were going to get it. He tweeted that it was

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Speaker 5: a big day, the big This is the big day, right,

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Speaker 5: and then he said, well, a good one to a plan.

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Speaker 5: And also we're not going to know until April first,

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Speaker 5: like they still have to do studies. Didn't they study

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Speaker 5: during the campaign? I mean, I know which countries have

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Speaker 5: higher tariffs than we do on goods. All he has

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Speaker 5: to do is get chat GPT right or a Bloomberg

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Speaker 5: and he would get the numbers. Why does he need

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Speaker 5: to study until April first? Is he serious about this?

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Speaker 4: Well, because that's the business the government, right, There's a

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Speaker 4: process here, and if he's going to invoke some of

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Speaker 4: the authorities that he wants to invoke to apply these tariffs,

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Speaker 4: and they are going to defend it against potential lawsuits

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Speaker 4: from companies and defend it to the public, they have

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Speaker 4: to at least go through a process of doing an

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Speaker 4: official study. You should point out that.

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Speaker 5: What was the point of twenty twenty five? Didn't they

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Speaker 5: already do these studies?

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Speaker 4: The twenty twenty five wasn't his thing. And we should

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Speaker 4: also point out that his main economic officials, his main

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Speaker 4: trade officials, although they were in the Oval Office yesterday,

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Speaker 4: haven't actually been confirmed by the US Senate yet, and

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Speaker 4: that rights Howard lot Make, the Commerce Secretary and incoming

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Speaker 4: Commerce Secretary, and Jason Greer his US Trade.

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Speaker 3: All right, all right, Sean we'll stay on top of this.

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Speaker 3: I know you will as well. Here Sean Dinham, Senior

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Speaker 3: economics writer, Bloomberg News. He's down there in Washington, DC.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Applecarplay and Android Auto

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Speaker 1: with the Bloomberg Business app. Listen on demand wherever you

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Speaker 1: get your podcasts, or watch us live on YouTube.

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Speaker 2: A couple of the big topics that get people's attention.

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Speaker 3: If you're writing a story, put meta and AI into

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Speaker 3: the headline.

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Speaker 2: Oh yeah, you're going to get some reader ship.

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Speaker 5: Did you know that ai in Chinese means love?

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Speaker 2: I did not.

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Speaker 5: Yeah, I guess the word for love in Chinese is AI.

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Speaker 2: I don't know how you pronounce it. But where did

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Speaker 2: you come across this piece of information?

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Speaker 5: David English wrote about it on the Bloomberg terminal.

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Speaker 2: Then it's got to be true. So let's check in here.

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Speaker 2: Man Deep Singh.

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Speaker 3: He's a senior technology analyst at Bloomberg Intelligence. Man Deep,

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Speaker 3: you got a big name, a big company, a leader

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Speaker 3: with deep pockets in meta talking about AI powered humanoid robots.

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Speaker 2: What's your takeaway here?

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Speaker 6: I mean, right now, it looks like everyone thinks that

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Speaker 6: is the next big hardware opportunity, whether it's Apple and

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Speaker 6: now Meta, they seem to be looking at that form factor.

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Speaker 6: And actually Nvidia dropped in that hint back in January

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Speaker 6: when they talked about a new chip or humanoid robots.

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Speaker 6: They released the new chip at CEES and they actually

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Speaker 6: released their own large anguid model for the humanoid form factor.

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Speaker 6: So it's not a surprise that everyone else is also

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Speaker 6: looking at that opportunity. And obviously you have Tessa who

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Speaker 6: already has Optimus as a product and has talked about

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Speaker 6: it almost on all their earnings calls, you know, recently, they.

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Speaker 5: Seem a little late to the party to me, frankly,

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Speaker 5: I think has so much money. You know, they go

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Speaker 5: after Twitter with threads, they go after open Ai with

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Speaker 5: whatever Meta's AI product is called.

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Speaker 2: They go after Tesla with well appleshow you don't have

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Speaker 2: to at first, you just have to be you know,

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Speaker 2: cool and good and all that kind of stuff. True.

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Speaker 3: So, Mandeep, is this something that the street's going to

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Speaker 3: like because it's AI? Or is this something the street's

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Speaker 3: going to say, you know, is this kind of like

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Speaker 3: the metaverse, which we didn't really like house. Do you

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Speaker 3: think the street's going to react to this.

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Speaker 6: Yeah, I think in the case of Meta, I mean,

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Speaker 6: there are question marks on their ability to design a good,

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Speaker 6: compelling hardware and look reband Meta glasses have been successful,

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Speaker 6: but when you look at the overall margin profile for

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Speaker 6: a company like Meta, I mean, ADS is such a

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Speaker 6: high margin business that hardware continues to be a drag

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Speaker 6: on their overall margins. And the fact that they're losing

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Speaker 6: almost twenty billion dollars every year on reality labs makes

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Speaker 6: you wonder if they add more hardware in the form

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Speaker 6: of humanoids, it could have mean bigger losses in that segment.

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Speaker 6: So I'm not sure if that's the right strategy for Meta.

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Speaker 6: Given they've had so much success, you know, with their apps,

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Speaker 6: family of apps, and how good they have been in

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Speaker 6: deploying AI across their apps, why would you want to

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Speaker 6: spend too much time on hardware. But I think Mark

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Speaker 6: Zuckerberg's view has always been he wants to control the

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Speaker 6: ecosystem from the hardware. I have that vertical integration, and

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Speaker 6: that's why they're doing it well.

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Speaker 3: MetaStock, just to give you a sense, up one percent

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Speaker 3: today a twenty five percent year to date in a

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Speaker 3: fifty five percent on a trailing twelve month basis.

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Speaker 2: So the market likes what's happening at Metal. Yeah, they're

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Speaker 2: killing it, but.

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Speaker 5: They don't control the ecosystem, right, I mean, where does

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Speaker 5: Facebook have any hardware other than that virtual reality glasses

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Speaker 5: thing that I don't think anyone bought.

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Speaker 6: Well, okay, I think it just goes to show that

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Speaker 6: Meta obviously is dependent on these app stores for their

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Speaker 6: apps to be successful, and they are. You know, they

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Speaker 6: have three of the most popular apps on both Android

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Speaker 6: and iOS app stores. So anytime Apple or Google makes

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Speaker 6: a change, that is where they got impacted with the

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Speaker 6: IDFA changes, and look, that's what they want to avoid

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Speaker 6: the next time it happens. Given every you know of

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Speaker 6: the software vendors is trying to infuse AI lllms at

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Speaker 6: the operating system level. So what does that mean for

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Speaker 6: a company like Meta, which has its own LLM and

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Speaker 6: wants to deploy it across more places. So owning the

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Speaker 6: hardware does have some potential over there.

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Speaker 5: I've upgraded to the pro model of chat GPT.

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Speaker 2: Now, oh yeah, that's not working. Were hanging for it?

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Speaker 5: Well, I kept getting cut off because I was asking

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Speaker 5: too many questions, but I use it locked Really how

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Speaker 5: much you pay twenty dollars a month? Sure, yeah, and

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Speaker 5: it's pretty pretty sweet, But I wonder if it costs

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Speaker 5: less to develop and run a large language model than

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Speaker 5: we thought.

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Speaker 2: I haven't.

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Speaker 5: I realized it's a couple of days old the story,

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Speaker 5: or a couple of weeks. But I haven't got your take, man,

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Speaker 5: deep is deep Seek full of it? I mean? Were

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Speaker 5: they just using illegally procured you know, Hopper chips or

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Speaker 5: Blackwell chips, or did they really like make an LLM

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Speaker 5: with six million bucks?

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Speaker 6: Look, that was their last training round. That wasn't inclusive

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Speaker 6: of all their training costs. But the bigger thing here

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Speaker 6: is Apple, you know, partnering with Ali Baba to deploy

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Speaker 6: LLLAM on their phone, and that's part of Apple intelligence.

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Speaker 6: So to me, you know, it's not just deep Seek anymore.

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Speaker 6: All the other companies over there in China, whether it's

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Speaker 6: Ali Baba or you know, the other ones I do,

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Speaker 6: et cetera, they all have their llms. They may not

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Speaker 6: be as capable as deep Seat, but this thing is

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Speaker 6: getting commoditized in my view, given every LLLM provider is

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Speaker 6: improving their reasoning capabilities and now Apple partnering. I think

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Speaker 6: that's a big step in terms of deploying their technology

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Speaker 6: and Apple I think did note at their last Drugs

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Speaker 6: call that Apple Intelligence was a big driver of refresh

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Speaker 6: refreshers wherever it was available.

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Speaker 2: All right, well, I'll like bob.

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Speaker 3: It's up three percent today, it's hitting a fifty two

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Speaker 3: week high, still below it's all time high from back

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Speaker 3: in twenty twenty, but it's up sixty eight percent over

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Speaker 3: the trailing twelve months. So certainly getting some love there.

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Speaker 3: Min deep Sink, thanks so much for joining us. Man

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Speaker 3: deep Sink, he's a senior.

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Speaker 2: Technology analyst for Bloomberg Intelligence.

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Speaker 2: Isabelle's sitting in for Alex Steel on Paul Sweeney.

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Speaker 3: We are live in the Bloomberg Interactive Brooker Studio in

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Speaker 3: New York City, streaming live on YouTube's ahead of to

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Speaker 3: YouTube dot com. That's the internet thing. Search Bloomberg Podcast now,

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Speaker 3: and that's where you will find us, all right. I've

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Speaker 3: been in this business since nineteen eighty six, and since then,

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Speaker 3: in my mind, Morgan Stanley has been the dominant franchise

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Speaker 3: when it comes to all things real estate, real estate finance,

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Speaker 3: and they still are today. Everywhere you go in the

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Speaker 3: supply chain in terms of real estate financing to find

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Speaker 3: ex Morgan Stanley people.

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Speaker 4: So we're really.

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Speaker 3: Appreciative to have our next guest, Lauren Hockfelder. She's the

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Speaker 3: co CEO of Morgan Stanley Real Estate Investment. She joins

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Speaker 3: us here in her Bloomberg Interactive Brooker studio. When I

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Speaker 3: talk about commercial real estate, I think the first lesson

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Speaker 3: I learned is don't just think about office space because

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Speaker 3: there's so much other stuff out there. Where are you

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Speaker 3: guys at Morgan Stanley seeing the best opportunities today?

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Speaker 7: Yeah, So we start with what's driving demand, and so

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Speaker 7: we invest behind long term mega trends. Trends we're focused

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Speaker 7: on today are e commerce, the supply chain, realignment, aging, demographics.

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Speaker 7: So where does that bring us? That brings us to

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Speaker 7: industrial warehouses, that brings us to senior living places that

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Speaker 7: are really going to be propelled not by cyclical up

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Speaker 7: and downs, but by these long term trends, which.

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Speaker 8: Do you see as leading right now? Because we've seen

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Speaker 8: a huge shift in commercial real estate, some people have

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Speaker 8: said it's bottom, but what are your views on that?

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Speaker 7: Well, Look, commercial real estate or private real estate values

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Speaker 7: in the US are down what twenty five plus percent

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Speaker 7: over the last two and a half years, while the

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Speaker 7: equity markets are up sixty plus percent over the same period.

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Speaker 7: We feel really good about the entry part point to

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Speaker 7: a lot of real estate today. We think that, you know,

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Speaker 7: we've seen a bottom start to form. Liquidity increasing, transaction volume,

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Speaker 7: increasing costic capital really coming in, spreads compressing. So we

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Speaker 7: really feel like twenty four was about moderation. Twenty five

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Speaker 7: twenty six, we may see the transition into an up cycle.

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Speaker 3: All right, what we got here, let's get an informed opinion.

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Speaker 3: Commercial office, real estate, New York, San Francisco, Chicago, Boston.

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Speaker 3: Have we seen the bottom that I can't remember seeing

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Speaker 3: too many transactions out there that would suggest we've seen

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Speaker 3: the bottom.

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Speaker 2: I don't know.

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Speaker 7: Divergence, So I think for the best of the best,

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Speaker 7: we've probably.

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Speaker 2: Seven thirty one lection to avenue best.

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Speaker 7: I mean absolutely, for the best of the best, you

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Speaker 7: are seeing not just resilience from some of the headwinds,

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Speaker 7: but actually the best of the best assets are benefiting

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Speaker 7: from what's going on right now, massive consolidation into these

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Speaker 7: top tier buildings. They've become like an oasis in the

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Speaker 7: office desert. Everyone only wants to be in these assets.

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Speaker 7: And so yes, you're seeing leasing pickup in our San

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Speaker 7: Francisco office assets. We are commanding all time high rents,

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Speaker 7: signing long term, high quality leases at way abou pre COVID.

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Speaker 7: That's stunning when the market's almost forty percent vacant.

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Speaker 3: So what happens to that forty percent is it just

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Speaker 3: have to find the bottom somewhere.

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Speaker 7: So look, I think yes, you're going to have some

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Speaker 7: conversions to alternative uses. There are major complexities with that,

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Speaker 7: both sort of zoning wise and physical construction wise. Some

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Speaker 7: of it will get converted, a lot of it's just

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Speaker 7: going to be cost prohibitive to really release in a

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Speaker 7: meaningful way. You have to retrofit for sustainability conditions and amenitization.

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Speaker 7: Demand has changed what it wants.

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Speaker 8: Apart from the example you gave, uncertain things they lingers.

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Speaker 8: We have investors, they'll cautious about jumping in. What do

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Speaker 8: you tell them or how do you convince them?

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Speaker 7: Look, it depends where there are certainly areas I would

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Speaker 7: not jump in. But when you look across the globe,

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Speaker 7: for example, we find the US to be the most

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Speaker 7: interesting market in which to invest today. The US is

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Speaker 7: always fifho right, first in, first out, it's correct to

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Speaker 7: the sharpest. It tends to rebound the quickest. So this

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Speaker 7: is a market for the right sectors, for things like

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Speaker 7: senior housing, industrial, certain other spaces. We find it really compelling.

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Speaker 7: There are other parts of the world, and frankly other

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Speaker 7: sectors that we don't think have bottomed yet. For those

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Speaker 7: lower quality assets, you still have a wall of maturities

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Speaker 7: that's coming. And don't mistake delaying with fixing the problem.

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Speaker 7: There's still some pain to come there.

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Speaker 3: Talk to us about the capital markets, the financing for

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Speaker 3: real estate. If you want to go buy a building,

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Speaker 3: do whatever you want to do in your real estate portfolio,

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Speaker 3: where do you get the capital?

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Speaker 7: So debt capital is absolutely coming back. So we saw

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Speaker 7: a period of time where there was just total illiquidity.

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Speaker 7: We've seen CMBs picked up very materially so, and we've

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Speaker 7: seen spreads compress very materially so. Of course, base rates

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Speaker 7: are moving around, maybe more than we'd all like, but

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Speaker 7: spreads have compressed, so you're seeing a return to some

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Speaker 7: of the from some of the balance sheet lenders, you're

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Speaker 7: seeing CMBs, and you're seeing really this massive rise in

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Speaker 7: non bank lenders. So these alternative asset management, private credit,

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Speaker 7: private credit, private real estate credit.

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Speaker 8: Interesting you mentioned that twenty twenty five or twenty twenty

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Speaker 8: six maybe the year of reckoning.

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Speaker 9: There was a big Bloomberg piece late.

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Speaker 8: Last year around November quoting a lot of people saying that, yes,

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Speaker 8: twenty twenty five will be our year. But then hindsight

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Speaker 8: that may look like wishful thinking, especially with the rates

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Speaker 8: they'll elevated. How are you squaring your thoughts on that?

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Speaker 7: Absolutely well, Look, we think this cycle is not going

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Speaker 7: to be about rate compression. So coming out of the GFC,

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Speaker 7: one of the ways we all did very well is

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Speaker 7: you know, rates fell, you had cheap debt, you had

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Speaker 7: cap rate compression. That was how a lot of appreciation

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Speaker 7: was created. We think this cycle is different, so we

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Speaker 7: do expect to see moderation and rates. Perhaps it's a

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Speaker 7: bumpy road down, but ultimately that's not what we're betting on.

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Speaker 7: We think this cycle is much more about cash flow growth,

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Speaker 7: and so what that means is you need to be

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Speaker 7: in those sectors that have those mega trends driving demand

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Speaker 7: and in those sectors where supply has just fallen off

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Speaker 7: a cliff. That's how you get cash flow growth and frankly,

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Speaker 7: owning assets that you can really improve. So not just

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Speaker 7: buy and hold, but buy and change.

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Speaker 3: If you had the chance to buy a B level

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Speaker 3: building on Third Avenue on forty eighth Street at fifty

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Speaker 3: cents on the dollar, would you buy it?

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Speaker 7: It really depends. So I think what people sort of

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Speaker 7: people tend to homogenize real estate, and I think there's

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Speaker 7: a big difference between a forty thousand square foot floorplate

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Speaker 7: and a twenty thousand square foot floor plate in terms

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Speaker 7: of what it wants to be and what it's sort

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Speaker 7: of highest and best use is. So it's just you

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Speaker 7: need to think about how that specific asset. It's not

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Speaker 7: bs B as B.

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Speaker 3: Okay, how about right across the street, can you lease

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Speaker 3: out some of that commercial space because it hasn't been

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Speaker 3: leased since the pandemic.

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Speaker 2: I don't know what's going on there, so we need.

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Speaker 3: That's commercial real estate. I don't know across the street

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Speaker 3: from us. Still after the pandemic, it was.

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Speaker 4: The victorious secret across.

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Speaker 3: This Not that I don't know what's going on there,

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Speaker 3: but Lauren, thank you so much for joining us. Lauren Hotfelder,

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Speaker 3: she's the co CEO of Morgan Stanley Real Estate Investing,

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Speaker 3: joining us live here in our Bloomberg Inactive Broker studio.

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Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple, Coarclay, and Android

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Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 3: A lot of towers talk around the fireplace these days.

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Speaker 3: It seems to be the economic policy of choice for

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Speaker 3: President Trump and his administration, so industries around the world

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Speaker 3: are trying to figure out what impact it will have

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Speaker 3: on their.

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Speaker 2: Business, and that includes the luxury business.

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Speaker 3: Ronnie set Home joins and she's managing partner at set

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Speaker 3: hom Lag Group.

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Speaker 2: Ronnie, when you think about.

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Speaker 3: The luxury business, high priced items, by and large, different

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Speaker 3: price points, different types of consumers. But again, if they're

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Speaker 3: going to be subject to terraces, whether it's from Mexico

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Speaker 3: or China or anywhere.

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Speaker 2: How does that play out in the luxury business.

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Speaker 10: I'm not sure it's going to vote very well for

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Speaker 10: the luxury business. I mean, there is some stagnation already

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Speaker 10: with consumers purchasing luxury for the top one percent, none

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Speaker 10: of these tariffs will really have an effect on their

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Speaker 10: purchasing power. But there are a lot of Henry's out

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Speaker 10: there which are high earners, not rich yet, and they

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Speaker 10: may pause if they have to spend an extra ten

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Speaker 10: to twenty five percent on the same item Henry's.

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Speaker 9: I had to explain that to my parents.

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Speaker 2: I just heard it for the first time.

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Speaker 3: Here.

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Speaker 9: It's a thing, all right, high earners but not rich yet.

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Speaker 10: Okay, so yes, it is a thing.

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Speaker 8: Which industry in the luxury sector will be hardest hit, though.

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Speaker 10: I think the fast fashion will be the hardest hit.

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Speaker 10: I mean, right now, the tariffs that are going to

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Speaker 10: be imposed on China are not just a regular ten

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Speaker 10: percent tariff, but there's also a loophole which currently allows

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Speaker 10: fast fashion retailers from China like She and that probably

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Speaker 10: is one of the top ones that come to mind,

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Speaker 10: allows them to ship products to the United States tax

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Speaker 10: free if the total sale is less than eight hundred

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Speaker 10: dollars and if that goes away, I'm sure that that

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Speaker 10: industr will be hit very hard.

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Speaker 3: So I think a lot of retailers Ronnie are trying

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Speaker 3: to think about their strategy about to what extent can

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Speaker 3: they pass increased tariff costs along to their consumers or

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Speaker 3: how that gets absorbed within the supply chain. What are

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Speaker 3: the luxury companies thinking about how much can they pass

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Speaker 3: through to their consumers?

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Speaker 10: Well, I mean, as of January, a lot of the

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Speaker 10: luxury retailers have already increased their prices by as much

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Speaker 10: as ten percent, and consumers are used to increases every

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Speaker 10: January from luxury you know, good makers. However, I'm not

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Speaker 10: sure if you tack on another ten or twenty five

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Speaker 10: percent that they'll stick around. I mean, I'm I'm worried

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Speaker 10: about you know, Canada goose for example, as the name implies,

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Speaker 10: you know it's from Canada. They are very expensive jackets.

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Speaker 10: They're great jackets. But who's going to pay an extra

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Speaker 10: twenty five percent or more? It's unclear. So I'm not

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Speaker 10: sure if all of the tariffs can be really pushed

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Speaker 10: down at the consumer level, I think there's gonna be

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Speaker 10: some pain sharing here. But you know, that's just my opinion.

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Speaker 8: Where do you think consumers will shift their attention to.

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Speaker 8: We have some analysting maybe emerging markets like India or

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Speaker 8: the Middle East.

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Speaker 9: Is that what you're seeing as well?

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Speaker 7: Well?

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Speaker 10: Since about I think twoenty and nineteen, a lot of

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Speaker 10: companies that rely heavily on China, we're starting to diversify,

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Speaker 10: and right now Vietnam and Bangladesh are like second and

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Speaker 10: third in line. But yes, I do see some additional

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Speaker 10: diversification coming.

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Speaker 3: Secondary market circular cost for the luxury business, secondary markets

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Speaker 3: material how does that going to be impacted?

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Speaker 10: Yes, I think it's going to really change everything about

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Speaker 10: the secondary market. I mean, if you try to purchase

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Speaker 10: a handbag, which is, you know, one of the main

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Speaker 10: goods that people are looking for bargains for because not

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Speaker 10: everyone has twelve thousand dollars or something to spend on

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Speaker 10: a handbag, they go to places like eBay, and a

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Speaker 10: lot of individuals selling on eBay are international. And if

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Speaker 10: there's a tariff, likely if you're not paying attention, your beat,

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Speaker 10: your bag or whatever good you're buying is going to

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Speaker 10: be held up in customs awaiting a payment. And for

438
00:23:58,040 --> 00:24:01,320
Speaker 10: those consumers who are paying attention to how much the

439
00:24:01,320 --> 00:24:04,040
Speaker 10: tariff could be, they may be dissuaded from purchasing at

440
00:24:04,119 --> 00:24:10,920
Speaker 10: least online. Then you have secondary good providers that are

441
00:24:11,040 --> 00:24:13,400
Speaker 10: local in some places, like you know, the Real Real

442
00:24:13,560 --> 00:24:16,960
Speaker 10: or Fashion File. You can go into the store. But again,

443
00:24:17,000 --> 00:24:21,320
Speaker 10: depending on where the item came from, people may be dissuaded.

444
00:24:21,400 --> 00:24:24,560
Speaker 10: They just may not have enough money to spend an

445
00:24:24,560 --> 00:24:27,480
Speaker 10: extra ten to twenty five or whatever the percentages end.

446
00:24:27,400 --> 00:24:30,000
Speaker 8: Up being on the part of the company. What do

447
00:24:30,040 --> 00:24:32,760
Speaker 8: you think about the strategy of shifting some production to

448
00:24:32,880 --> 00:24:34,960
Speaker 8: the US. I mean, this would allow brands to avoid

449
00:24:35,000 --> 00:24:38,919
Speaker 8: TIFF's entirely, or maybe cut costs. For instance, energy prices

450
00:24:38,920 --> 00:24:41,840
Speaker 8: in the US are significantly lower than in Europe, so

451
00:24:41,880 --> 00:24:43,040
Speaker 8: maybe that would be one thing.

452
00:24:44,440 --> 00:24:48,080
Speaker 10: I think it really depends upon what good we're talking about. So,

453
00:24:48,200 --> 00:24:53,200
Speaker 10: for example, the beauty industry, it is heavily reliant on packaging.

454
00:24:53,760 --> 00:24:57,480
Speaker 10: Many people may not know, but oftentimes the formulas are

455
00:24:57,800 --> 00:25:00,800
Speaker 10: pretty much identical from brand to brand, and what you're

456
00:25:00,840 --> 00:25:02,840
Speaker 10: really paying for is the packaging. And of course, you

457
00:25:02,880 --> 00:25:05,679
Speaker 10: know the color people do have unique colors, and there

458
00:25:05,680 --> 00:25:08,800
Speaker 10: are so many reds, you know, I'm sure anyone trying

459
00:25:08,800 --> 00:25:11,640
Speaker 10: to purchase red lipstick has gotten the experience that they

460
00:25:11,640 --> 00:25:13,359
Speaker 10: had to try on thirty of them before they found

461
00:25:13,359 --> 00:25:17,240
Speaker 10: the perfect red. However, it's the packaging and the mold.

462
00:25:17,359 --> 00:25:20,159
Speaker 10: The creation of the mold is very expensive, so I

463
00:25:20,200 --> 00:25:23,280
Speaker 10: don't know, for example, if the beauty industry will be

464
00:25:23,280 --> 00:25:26,440
Speaker 10: able to pivot to us made immediately.

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00:25:26,720 --> 00:25:27,800
Speaker 2: It might cost you much.

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00:25:28,160 --> 00:25:29,760
Speaker 3: All right, Ronnie, thank you so much for joining us.

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00:25:29,800 --> 00:25:33,920
Speaker 3: Ronnie set Home. She's managing partner at Sethom Law Group

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00:25:34,000 --> 00:25:34,440
Speaker 3: as well.

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