1 00:00:02,920 --> 00:00:10,840 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,880 --> 00:00:15,040 Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 3 00:00:15,080 --> 00:00:18,079 Speaker 1: Eastern on Apple Car playing Android Auto with the Bloomberg 4 00:00:18,120 --> 00:00:21,440 Speaker 1: Business App. Listen on demand wherever you get your podcasts, 5 00:00:21,680 --> 00:00:24,520 Speaker 1: or watch us live on YouTube. 6 00:00:25,079 --> 00:00:27,200 Speaker 2: Alex Steele and Paul Sweeney, You're live here in a 7 00:00:27,200 --> 00:00:30,880 Speaker 2: Bloomberger Interactive Brokers studio in sweltering New York City. Are 8 00:00:30,880 --> 00:00:33,360 Speaker 2: also streaming live on YouTube, So head over to YouTube 9 00:00:33,360 --> 00:00:37,280 Speaker 2: dot com search Bloomberg Podcast. A lot of stuff coming out, 10 00:00:37,360 --> 00:00:40,080 Speaker 2: a lot of earnings coming out. We had Eco data today, 11 00:00:40,120 --> 00:00:42,159 Speaker 2: retail sales solid, and on the earnings front, we had 12 00:00:42,200 --> 00:00:45,040 Speaker 2: some of the big investment banks report here, Morgan Stanley 13 00:00:45,040 --> 00:00:47,839 Speaker 2: and Bank of America's Charlie was just reporting stocks at 14 00:00:47,840 --> 00:00:50,879 Speaker 2: fifty two week highs, both of them here today. So 15 00:00:50,960 --> 00:00:52,760 Speaker 2: Allison Williams is going to break it down for She's 16 00:00:52,800 --> 00:00:55,080 Speaker 2: a senior anild. She covers all these big banks for 17 00:00:55,200 --> 00:00:58,720 Speaker 2: Bloomberg Intelligence. She joins us here in our studio. Alison, 18 00:00:58,760 --> 00:01:03,480 Speaker 2: let's start with your former firm, Morgan Stanley. Stocks up 19 00:01:03,480 --> 00:01:05,959 Speaker 2: two and a half percent today, fifty two week high. 20 00:01:05,959 --> 00:01:07,199 Speaker 2: What did the street like here. 21 00:01:07,800 --> 00:01:11,200 Speaker 3: I mean really strong institutional numbers. I mean it was 22 00:01:11,280 --> 00:01:15,320 Speaker 3: a great quarter for trading and investment banking, So equities 23 00:01:15,360 --> 00:01:18,880 Speaker 3: trading really I think a source of strength. Morgan Stanley 24 00:01:18,959 --> 00:01:22,600 Speaker 3: doing better than expected across the board and just really well. 25 00:01:23,520 --> 00:01:26,640 Speaker 3: So equities trading I think was the standout. Fixed income, 26 00:01:27,040 --> 00:01:31,080 Speaker 3: you know, was sort of mixed, but really compared to 27 00:01:31,120 --> 00:01:35,040 Speaker 3: a year ago. I think that's strong that those revenues 28 00:01:35,080 --> 00:01:37,240 Speaker 3: are turning out to be resilient. And on the investment 29 00:01:37,360 --> 00:01:40,959 Speaker 3: banking side, investors are excited that there could be momentum 30 00:01:41,040 --> 00:01:43,440 Speaker 3: coming into the into the next quarter. You know, M 31 00:01:43,520 --> 00:01:48,200 Speaker 3: and A still just historically low, so improving from a 32 00:01:48,240 --> 00:01:51,440 Speaker 3: low base. Same thing with equities, but I think reasons 33 00:01:51,440 --> 00:01:55,400 Speaker 3: for optimism, especially with the stocks in general doing so well. 34 00:01:55,760 --> 00:01:57,920 Speaker 2: Now for Bank of America, when I think a Bank 35 00:01:57,920 --> 00:01:59,680 Speaker 2: of America, I think it a corporate bank, you know, 36 00:01:59,720 --> 00:02:03,639 Speaker 2: making big loans to big corporate customers around the world. 37 00:02:03,760 --> 00:02:06,480 Speaker 3: What did you see there, so, you know, I think 38 00:02:06,520 --> 00:02:09,760 Speaker 3: the demand is for loans is still something that we're 39 00:02:09,800 --> 00:02:12,160 Speaker 3: looking more for the second half. If we do get 40 00:02:12,200 --> 00:02:14,760 Speaker 3: the FED rate cuts, that is definitely going to be 41 00:02:14,800 --> 00:02:16,960 Speaker 3: a help. And I think for Bank of America what 42 00:02:17,000 --> 00:02:19,560 Speaker 3: people are excited about is that it could be the trough. 43 00:02:19,639 --> 00:02:22,280 Speaker 3: So Bank of America saying that it's going to be 44 00:02:22,440 --> 00:02:25,079 Speaker 3: the trough, this will be the weakest quarter. But keep 45 00:02:25,080 --> 00:02:28,280 Speaker 3: in mind that they are baking in the FED rate 46 00:02:28,320 --> 00:02:31,480 Speaker 3: cut expectations and some loan growth in the second half. 47 00:02:31,520 --> 00:02:35,080 Speaker 3: So we'll see if they can deliver that. But definitely 48 00:02:35,520 --> 00:02:37,880 Speaker 3: telling investors what they want to hear today in terms 49 00:02:38,000 --> 00:02:41,000 Speaker 3: of the fourth quarter, a little bit higher entry rate, 50 00:02:41,040 --> 00:02:44,760 Speaker 3: firming that up, and again that the you know, most 51 00:02:44,760 --> 00:02:46,280 Speaker 3: of the weakness could be behind us. 52 00:02:46,400 --> 00:02:48,120 Speaker 4: So does that mean that if we don't get FED 53 00:02:48,160 --> 00:02:51,000 Speaker 4: cuts that were in that Bank of America is going 54 00:02:51,080 --> 00:02:51,960 Speaker 4: to have some problems here. 55 00:02:52,200 --> 00:02:55,200 Speaker 3: I think where the disappointment will come will be loan 56 00:02:55,240 --> 00:02:59,399 Speaker 3: growth spurred by FED cuts. Right, So I think that 57 00:02:59,600 --> 00:03:01,760 Speaker 3: some of the loan growth that they're factoring in is 58 00:03:01,840 --> 00:03:04,400 Speaker 3: based on that we heard from Wells Fargo where they're 59 00:03:04,840 --> 00:03:07,240 Speaker 3: you know, still a lot more cautious on the loan 60 00:03:07,320 --> 00:03:11,680 Speaker 3: growth side. And commercial and industrial has been a weak spot. 61 00:03:12,280 --> 00:03:14,760 Speaker 3: Credit card is has been a strong spot. 62 00:03:15,320 --> 00:03:15,480 Speaker 5: You know. 63 00:03:15,480 --> 00:03:17,800 Speaker 2: When I was in banking, one of our most lucrative 64 00:03:17,800 --> 00:03:20,560 Speaker 2: businesses that the Chase Man had bank was this leverage lending, 65 00:03:20,639 --> 00:03:23,240 Speaker 2: you know, lending to companies that don't have assets or 66 00:03:23,400 --> 00:03:25,600 Speaker 2: inventory and any kind of just lending into cash flow. 67 00:03:25,600 --> 00:03:27,399 Speaker 2: It's a little bit more risky. It's tough to show 68 00:03:27,400 --> 00:03:30,240 Speaker 2: your credit officer where the collateral is for this loan. 69 00:03:30,919 --> 00:03:33,480 Speaker 2: But we made a lot of money doing it's a 70 00:03:33,639 --> 00:03:37,160 Speaker 2: private credit market. How's a private credit market been poaching 71 00:03:37,200 --> 00:03:37,880 Speaker 2: on that business? 72 00:03:37,960 --> 00:03:40,120 Speaker 3: So actually you would have been making this would have 73 00:03:40,120 --> 00:03:42,400 Speaker 3: been a good quarter for you. I know you'd be happy. 74 00:03:43,400 --> 00:03:46,040 Speaker 3: The first quarter was good, second quarter was good. And 75 00:03:46,120 --> 00:03:48,320 Speaker 3: I think that if you look at some of the 76 00:03:48,560 --> 00:03:52,000 Speaker 3: most recent statistics that we've seen, is that banks are 77 00:03:52,120 --> 00:03:54,600 Speaker 3: still doing a lot of that refinancing. Right, So a 78 00:03:54,640 --> 00:03:57,920 Speaker 3: lot of the business that's been happening in the debt markets, 79 00:03:57,960 --> 00:04:00,400 Speaker 3: debt fees, a source of strength across the banks supporter 80 00:04:01,120 --> 00:04:07,080 Speaker 3: has been refinancing, and that leverage lending business has been 81 00:04:07,160 --> 00:04:10,400 Speaker 3: doing well at the bank. So even though private credit 82 00:04:11,880 --> 00:04:14,480 Speaker 3: is certainly raising a lot of funds and a product 83 00:04:14,480 --> 00:04:18,400 Speaker 3: in demand, banks are still getting their share of refinancing 84 00:04:18,440 --> 00:04:21,120 Speaker 3: in their leverage one volumes. And that's you know sort 85 00:04:21,160 --> 00:04:23,640 Speaker 3: of you saw like the huge growth at City Group 86 00:04:24,400 --> 00:04:26,760 Speaker 3: and the numbers at Gold and sachs where they have 87 00:04:26,920 --> 00:04:31,080 Speaker 3: relative strength in those businesses. High yields another area that's 88 00:04:31,120 --> 00:04:31,880 Speaker 3: doing really well. 89 00:04:32,800 --> 00:04:34,840 Speaker 4: Back to the consumer, so we'll have Paul do them 90 00:04:35,000 --> 00:04:38,400 Speaker 4: and banking stuff, all the consumer stuff. What about chargeobs 91 00:04:38,440 --> 00:04:41,359 Speaker 4: on their credit card losses for Bank of America? Was 92 00:04:41,400 --> 00:04:44,000 Speaker 4: that higher lower? Where did that come out in general? 93 00:04:44,040 --> 00:04:46,920 Speaker 3: I would say there, So their provisions overall came in 94 00:04:46,920 --> 00:04:50,200 Speaker 3: in line. We did see, you know, charge offs in 95 00:04:50,240 --> 00:04:52,599 Speaker 3: the car business, charge offs and commercial real estate. So 96 00:04:52,600 --> 00:04:56,200 Speaker 3: those are areas that we're watching, but you know, controlled 97 00:04:56,240 --> 00:04:59,560 Speaker 3: and in line with expectations. I think the area of 98 00:04:59,600 --> 00:05:02,039 Speaker 3: weakness that we saw in card this quarter was at 99 00:05:02,160 --> 00:05:05,000 Speaker 3: City Group. They have a private label business that's it 100 00:05:05,080 --> 00:05:07,600 Speaker 3: tends to skew on the lower income side of things. 101 00:05:08,040 --> 00:05:12,000 Speaker 3: You're seeing losses come in above their targeted range. There 102 00:05:12,120 --> 00:05:15,920 Speaker 3: is a seasonal pattern to that, and so there are 103 00:05:16,040 --> 00:05:20,000 Speaker 3: expectations that that could come in, but I would say 104 00:05:20,080 --> 00:05:23,840 Speaker 3: the second quarter did not give us confidence in those expectations. 105 00:05:24,360 --> 00:05:26,400 Speaker 3: So I think that is continues to be an area 106 00:05:26,440 --> 00:05:29,400 Speaker 3: for watching. It's not necessarily a big area for the 107 00:05:29,440 --> 00:05:32,000 Speaker 3: big banks that we're talking about today and the ones 108 00:05:32,000 --> 00:05:34,839 Speaker 3: that I cover, but I think it's important to watch, 109 00:05:35,000 --> 00:05:38,800 Speaker 3: you know, for the overall economy and to some of 110 00:05:38,800 --> 00:05:41,039 Speaker 3: the other card names such as Synchrony. 111 00:05:42,279 --> 00:05:45,039 Speaker 2: CEO at Morgan Stanley, we have a new CEO, Ted Pick, 112 00:05:46,279 --> 00:05:48,160 Speaker 2: I guess with a little bit of hindsight here does 113 00:05:48,600 --> 00:05:51,160 Speaker 2: it seem like it's kind of working and everybody's kind 114 00:05:51,160 --> 00:05:52,200 Speaker 2: of found their place, and. 115 00:05:52,760 --> 00:05:56,440 Speaker 3: So it seems like, you know, he's talking with conviction. 116 00:05:56,560 --> 00:05:59,600 Speaker 3: I think the boldest statement he made today was with 117 00:05:59,640 --> 00:06:02,120 Speaker 3: regard to the margins and the wealth business. So the 118 00:06:02,120 --> 00:06:05,280 Speaker 3: wealth business, as you know under the former CEO and 119 00:06:05,400 --> 00:06:08,279 Speaker 3: a lot of acquisitions, wealth and asset management is the 120 00:06:08,400 --> 00:06:12,560 Speaker 3: predominant revenue and profit engine. It's what investors are watching. 121 00:06:13,120 --> 00:06:16,640 Speaker 3: The wealth margin was something where Pick early in the 122 00:06:16,720 --> 00:06:22,040 Speaker 3: year took off some of the upside under the prior targets, 123 00:06:22,120 --> 00:06:24,720 Speaker 3: and that thirty percent wealth target, I think is a 124 00:06:24,800 --> 00:06:26,880 Speaker 3: question among investors if they can get there. And Ted 125 00:06:27,000 --> 00:06:30,680 Speaker 3: really trying to instill confidence that he is a believer 126 00:06:31,240 --> 00:06:34,440 Speaker 3: the wealth flows at Morganstone I would say, you know, 127 00:06:34,480 --> 00:06:37,360 Speaker 3: that is the probably the number one thing I think 128 00:06:37,560 --> 00:06:40,279 Speaker 3: that that we watch for them, and that did come 129 00:06:40,279 --> 00:06:43,200 Speaker 3: in week this quarter. The fee based part of those 130 00:06:43,200 --> 00:06:47,599 Speaker 3: flows were relatively resilient, so some puts in takes there, 131 00:06:48,880 --> 00:06:50,960 Speaker 3: but I think the wealth flows do bear watching, and 132 00:06:51,000 --> 00:06:54,520 Speaker 3: that that really has been the engine of optimism investors, 133 00:06:54,680 --> 00:06:58,000 Speaker 3: like you know, the tilt towards the recurring fee based business, 134 00:06:58,480 --> 00:07:01,440 Speaker 3: and so I think that the have to continue to 135 00:07:01,600 --> 00:07:06,559 Speaker 3: deliver and deliver on that thirty percent margin that Pick 136 00:07:06,600 --> 00:07:07,960 Speaker 3: is confident, and. 137 00:07:07,920 --> 00:07:09,720 Speaker 4: Then I'll go to sort of what the macro read 138 00:07:09,800 --> 00:07:11,800 Speaker 4: is from Morgan Stanley because also on the call, Ted 139 00:07:11,840 --> 00:07:14,120 Speaker 4: Pick said that you're going to see normal M and 140 00:07:14,160 --> 00:07:16,200 Speaker 4: A return unless there's a full bown recession, and he 141 00:07:16,240 --> 00:07:18,600 Speaker 4: thinks we're in the early stages of multi year investment 142 00:07:18,600 --> 00:07:19,520 Speaker 4: banking leed cycle. 143 00:07:19,640 --> 00:07:22,360 Speaker 3: Oh yeah, oh yeah, but we've been hearing that for 144 00:07:22,440 --> 00:07:26,080 Speaker 3: so many quarters now and you're starting to definitely, you know, 145 00:07:26,160 --> 00:07:28,920 Speaker 3: feel more of the doubt coming from analysts. Right. So 146 00:07:30,960 --> 00:07:35,920 Speaker 3: the twenty twenty one, amazing twenty twenty two disaster, the 147 00:07:35,960 --> 00:07:38,640 Speaker 3: lift that we got last year did not materialize. I 148 00:07:38,640 --> 00:07:41,480 Speaker 3: would say that so far this year EM and A 149 00:07:41,640 --> 00:07:45,280 Speaker 3: has been disappointing again, and you know you can see 150 00:07:45,320 --> 00:07:47,880 Speaker 3: in terms of the reported fees and the announcements, right, 151 00:07:47,960 --> 00:07:51,800 Speaker 3: so both of those have been disappointing. It does tend 152 00:07:51,880 --> 00:07:55,600 Speaker 3: to pick up late in the year. It does tend 153 00:07:55,600 --> 00:07:58,840 Speaker 3: to pick up after elections, so I think it'll be 154 00:07:58,920 --> 00:08:03,480 Speaker 3: hard to get for that particular business line, you know, 155 00:08:03,560 --> 00:08:06,200 Speaker 3: sort of the momentum people are looking for perhaps until 156 00:08:06,200 --> 00:08:10,640 Speaker 3: after the election. But on the underwriting side, I think 157 00:08:10,720 --> 00:08:13,240 Speaker 3: is where you're seeing, you know, perhaps more of the 158 00:08:13,320 --> 00:08:16,800 Speaker 3: momentum and strength. Goldvinzachs, though who is tends to be 159 00:08:16,840 --> 00:08:20,920 Speaker 3: the biggest and reported revenue, did say significant uptick in 160 00:08:20,960 --> 00:08:24,560 Speaker 3: their pipeline, debt, underwriting and advisory where the areas of strength. 161 00:08:25,120 --> 00:08:25,240 Speaker 6: Right. 162 00:08:25,320 --> 00:08:27,560 Speaker 2: Very good, Allison Williams, Thank you so much. We appreciate that. 163 00:08:27,640 --> 00:08:31,480 Speaker 2: Alsa Williams covers all the big banks for Bloomberg Intelligence. 164 00:08:31,560 --> 00:08:34,920 Speaker 2: Joining us here in our New York studio. 165 00:08:35,160 --> 00:08:39,040 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 166 00:08:39,120 --> 00:08:42,640 Speaker 1: weekdays at ten am Eastern on applecar Play and Android 167 00:08:42,679 --> 00:08:45,439 Speaker 1: Auto with the Bloomberg Business app. You can also listen 168 00:08:45,559 --> 00:08:48,679 Speaker 1: live on Amazon Alexa from our flagship New York station, 169 00:08:49,040 --> 00:08:51,800 Speaker 1: Just Say Alexa, playing Bloomberg eleven thirty. 170 00:08:53,360 --> 00:08:56,360 Speaker 4: Alex Steel alongside Paul Sweened is in Bloomberg Intelligence Radio. 171 00:08:56,600 --> 00:08:58,920 Speaker 4: We bring you all the top news and analysis with 172 00:08:58,960 --> 00:09:01,680 Speaker 4: our great Bloomberg Intelligens analyst team. They cover two thousand 173 00:09:01,720 --> 00:09:04,839 Speaker 4: companies and one hundred and thirty industries worldwide, and occasionally 174 00:09:04,880 --> 00:09:07,040 Speaker 4: we go across the pond and check him with Craig Trudell. 175 00:09:07,320 --> 00:09:10,360 Speaker 4: He's Bloomberg Global Autos Editor and he joins us. Now, 176 00:09:10,400 --> 00:09:13,000 Speaker 4: so many fun things to talk about, but let's just 177 00:09:13,000 --> 00:09:14,920 Speaker 4: start with Tesla for a second, because the news was 178 00:09:14,960 --> 00:09:17,360 Speaker 4: quite staggering. They're going to hire nearly eight hundred new 179 00:09:17,400 --> 00:09:21,520 Speaker 4: employees but didn't. Also they just fire a lot of employees. 180 00:09:22,760 --> 00:09:28,240 Speaker 6: Yeah, this is very Elon Muskian of Tesla in that 181 00:09:28,320 --> 00:09:30,760 Speaker 6: it sort of you know, depends on the day of 182 00:09:30,760 --> 00:09:34,200 Speaker 6: what's going on at this company. So yes, a few 183 00:09:34,240 --> 00:09:39,400 Speaker 6: months back on the heels of Tesla selling about twenty 184 00:09:39,440 --> 00:09:42,520 Speaker 6: percent fewer cars than it did in the fourth quarter, 185 00:09:43,040 --> 00:09:47,640 Speaker 6: Elon Musk wasn't particularly happy with that. With that quarterly showing, 186 00:09:49,080 --> 00:09:53,920 Speaker 6: he wanted the company to cut headcount by a commensurate amount, 187 00:09:53,920 --> 00:09:58,120 Speaker 6: so roughly twenty percent. So you know, for contexts, you know, 188 00:09:58,160 --> 00:10:00,920 Speaker 6: this is a company that you know, had quite a 189 00:10:00,960 --> 00:10:04,440 Speaker 6: few employees at that time. They started the year with 190 00:10:04,480 --> 00:10:06,559 Speaker 6: around one hundred and forty thousand, so that would mean 191 00:10:06,920 --> 00:10:10,720 Speaker 6: twenty eight thousand people being let go. It's unclear whether 192 00:10:10,760 --> 00:10:13,480 Speaker 6: they got to that, but it is absolutely clear that, 193 00:10:13,600 --> 00:10:16,600 Speaker 6: you know, certain parts of the company were decimated, I 194 00:10:16,600 --> 00:10:19,720 Speaker 6: think most notably the super Charging team that really turned 195 00:10:19,760 --> 00:10:21,600 Speaker 6: a lot of heads because it was a you know, 196 00:10:21,720 --> 00:10:24,160 Speaker 6: aspect of this company that has been looked at as 197 00:10:24,400 --> 00:10:27,280 Speaker 6: you know, such a sort of feather in their cap 198 00:10:27,360 --> 00:10:31,800 Speaker 6: that they really you know, invested where others didn't and 199 00:10:32,040 --> 00:10:35,640 Speaker 6: built a charging network that worked whereas others have not 200 00:10:35,720 --> 00:10:39,280 Speaker 6: worked very well, particularly in the US, and so it 201 00:10:39,360 --> 00:10:41,800 Speaker 6: is kind of shocking to see you know, such a 202 00:10:42,120 --> 00:10:47,800 Speaker 6: significant you know pulling of people followed by a you 203 00:10:47,840 --> 00:10:49,400 Speaker 6: know hiring spree of sorts. 204 00:10:49,920 --> 00:10:52,440 Speaker 3: So do we know kind of what type of roles 205 00:10:52,520 --> 00:10:54,040 Speaker 3: they're hiring for. Are they hiring. 206 00:10:53,840 --> 00:10:56,960 Speaker 2: People to bend metal or are they looking to like 207 00:10:57,000 --> 00:10:59,440 Speaker 2: some software guys for AI and all that, the. 208 00:10:59,480 --> 00:11:04,320 Speaker 7: Robotax for the superpower people, the superhero Yeah, I think, 209 00:11:04,400 --> 00:11:06,880 Speaker 7: you know, we we did report even weeks back that 210 00:11:07,080 --> 00:11:10,360 Speaker 7: some of the Supercharger people, who are you know, a 211 00:11:10,400 --> 00:11:12,760 Speaker 7: part of the team that was really uh you know 212 00:11:12,880 --> 00:11:15,880 Speaker 7: cut to a very significant degree, were brought back. 213 00:11:15,720 --> 00:11:19,920 Speaker 6: Relatively quickly, notably the woman who was running that group, 214 00:11:20,160 --> 00:11:23,040 Speaker 6: uh you know, was has not been brought back. Uh, 215 00:11:23,280 --> 00:11:25,720 Speaker 6: and there were some reports that maybe she you know, 216 00:11:25,880 --> 00:11:29,040 Speaker 6: kind of tried to protect her team and what was 217 00:11:29,520 --> 00:11:33,120 Speaker 6: you know, dismissed as a result of that. So, uh, 218 00:11:33,160 --> 00:11:35,680 Speaker 6: you know, in terms of what parts of the company 219 00:11:35,679 --> 00:11:38,319 Speaker 6: are hiring, it's it's it's pretty broad, but I would say, 220 00:11:38,679 --> 00:11:41,680 Speaker 6: you know, the data that our very own Kara Carlson 221 00:11:42,200 --> 00:11:46,720 Speaker 6: has has crunched. Service is a big aspect, which is 222 00:11:46,760 --> 00:11:49,720 Speaker 6: maybe no surprise in that, you know, the summer season 223 00:11:50,679 --> 00:11:53,920 Speaker 6: is a busy one for Tesla. People are out, you know, 224 00:11:54,040 --> 00:11:57,240 Speaker 6: driving for vacations. It's warm outs, they're running their air conditioners, 225 00:11:57,559 --> 00:11:59,080 Speaker 6: you know, to the extent that you do need the 226 00:11:59,160 --> 00:12:01,560 Speaker 6: service and electric vehicle, that's one of the things that 227 00:12:02,480 --> 00:12:05,200 Speaker 6: is common. So, you know, one of the interesting aspects 228 00:12:05,200 --> 00:12:07,360 Speaker 6: of this story is that you know, we we did 229 00:12:07,400 --> 00:12:10,959 Speaker 6: speak with with people who were a part of this 230 00:12:11,520 --> 00:12:14,600 Speaker 6: job job cutting who you know, said that they were 231 00:12:14,640 --> 00:12:18,120 Speaker 6: surprised that some of the service and salespeople, you know, 232 00:12:18,200 --> 00:12:21,080 Speaker 6: that that the company you know, clearly needs at a 233 00:12:21,120 --> 00:12:25,880 Speaker 6: time of you know, busy service work and you know, 234 00:12:26,000 --> 00:12:29,280 Speaker 6: a company that's struggling to to sell more cars. Uh, 235 00:12:29,480 --> 00:12:32,319 Speaker 6: you know, we're seeing you know, some people being brought 236 00:12:32,400 --> 00:12:35,320 Speaker 6: back there, but it is very widespread, I think notably 237 00:12:35,360 --> 00:12:38,920 Speaker 6: as well. Uh, you know, AI and robotics is definitely 238 00:12:39,160 --> 00:12:41,480 Speaker 6: you know, an area where everybody is you know, looking 239 00:12:41,480 --> 00:12:44,320 Speaker 6: at very closely because of you know what this sort 240 00:12:44,360 --> 00:12:48,360 Speaker 6: of new priority is or or emphasis is on the 241 00:12:48,400 --> 00:12:49,280 Speaker 6: part of Musk. 242 00:12:49,679 --> 00:12:49,840 Speaker 5: You know. 243 00:12:50,240 --> 00:12:52,480 Speaker 2: Craig Bloomberg is also out with a story David Welch 244 00:12:53,280 --> 00:12:56,680 Speaker 2: that GM's Mary Barris says the automaker won't sell a 245 00:12:56,720 --> 00:13:00,400 Speaker 2: million evs next year, So just another story, another data 246 00:13:00,400 --> 00:13:03,400 Speaker 2: point about kind of maybe where the ultimate demand or 247 00:13:03,480 --> 00:13:06,640 Speaker 2: lack of demand may be for EV's. What's the latest 248 00:13:06,640 --> 00:13:09,079 Speaker 2: feeling within the industry about how this thing's going to 249 00:13:09,160 --> 00:13:10,240 Speaker 2: evolve at what pace. 250 00:13:11,240 --> 00:13:14,040 Speaker 6: Yeah, we've we've seen a really dramatic pullback on the 251 00:13:14,080 --> 00:13:16,600 Speaker 6: part of GM and Ford in particular. I feel like, 252 00:13:16,720 --> 00:13:20,920 Speaker 6: you know, Stillantis, you know, formerly FIA Chrysler. They were 253 00:13:21,360 --> 00:13:24,439 Speaker 6: sort of slow in the first place, you know, making 254 00:13:24,480 --> 00:13:29,320 Speaker 6: this transition and have you know, not necessarily had much 255 00:13:29,360 --> 00:13:32,160 Speaker 6: to pull back from. But I would not be surprised 256 00:13:32,160 --> 00:13:34,600 Speaker 6: if they sort of you know, joined the quote unquote 257 00:13:34,600 --> 00:13:39,400 Speaker 6: party in terms of you know, maybe dialing back sort 258 00:13:39,440 --> 00:13:43,079 Speaker 6: of the ramp at which they you know, try to 259 00:13:43,760 --> 00:13:47,559 Speaker 6: you know, produce more electric vehicles and sell them. But 260 00:13:47,559 --> 00:13:50,200 Speaker 6: but it is very interesting to see you know, GM 261 00:13:50,240 --> 00:13:53,880 Speaker 6: and Ford you know, really be sort of welcomed with 262 00:13:53,960 --> 00:13:56,600 Speaker 6: open arms by the White House, you know, Mary Bara 263 00:13:56,760 --> 00:14:00,480 Speaker 6: being lauded by Bidens as leading the EV trans that 264 00:14:00,520 --> 00:14:04,400 Speaker 6: really you know, ticked off Elon Musk and helps explain why, 265 00:14:04,559 --> 00:14:06,360 Speaker 6: you know, in the last few days we've learned that 266 00:14:06,400 --> 00:14:09,920 Speaker 6: he's been you know, planning to spend quite a bit 267 00:14:09,920 --> 00:14:12,800 Speaker 6: of money on you know, contributing to to packs to 268 00:14:12,840 --> 00:14:14,360 Speaker 6: get to Donald Trump reelected. 269 00:14:15,000 --> 00:14:17,720 Speaker 4: Well that was my thing is that the Musk Trump 270 00:14:17,760 --> 00:14:21,400 Speaker 4: love affair I find to be quite interesting because if 271 00:14:21,960 --> 00:14:24,160 Speaker 4: we can just game out that the love affair is 272 00:14:24,200 --> 00:14:29,560 Speaker 4: also so President Trump would be more nice to evs, 273 00:14:30,600 --> 00:14:34,120 Speaker 4: is the huge change that we're expecting with alternative energy 274 00:14:34,160 --> 00:14:36,560 Speaker 4: and the IRA and a Trump administration maybe not going 275 00:14:36,600 --> 00:14:38,520 Speaker 4: to happen. I mean, just looked at solar stocks yesterday. 276 00:14:38,560 --> 00:14:41,600 Speaker 4: They got smoked because of it, but Tesla didn't. 277 00:14:42,640 --> 00:14:46,720 Speaker 6: Yeah, it is surprising. I mean maybe if you're trading Tesla, 278 00:14:46,880 --> 00:14:50,880 Speaker 6: you sort of reckon that, you know, the CEO very 279 00:14:51,000 --> 00:14:54,960 Speaker 6: very publicly endearing himself to the candidate will sort of, 280 00:14:55,000 --> 00:14:58,040 Speaker 6: you know, come back to benefit him down the line, 281 00:14:58,480 --> 00:15:00,560 Speaker 6: and maybe some of these threats to do away with 282 00:15:00,680 --> 00:15:04,120 Speaker 6: electric vehicle tax credits and so forth will fall by 283 00:15:04,120 --> 00:15:04,840 Speaker 6: the wayside. 284 00:15:05,240 --> 00:15:05,560 Speaker 1: Uh. 285 00:15:05,760 --> 00:15:09,000 Speaker 6: You know. Elon even went so far, you know, in 286 00:15:09,040 --> 00:15:12,120 Speaker 6: the last day or so to to sort of claim 287 00:15:12,160 --> 00:15:15,560 Speaker 6: that that, you know, doing away with subsidies would only 288 00:15:15,600 --> 00:15:19,560 Speaker 6: help Tesla. I don't know how exactly he squares that circle, 289 00:15:19,920 --> 00:15:23,400 Speaker 6: but perhaps it's a matter of Tesla is you know, 290 00:15:23,720 --> 00:15:26,920 Speaker 6: the strongest of the companies that's trying to make this 291 00:15:27,080 --> 00:15:31,239 Speaker 6: work and is for this along, and so taking subsidies 292 00:15:31,280 --> 00:15:34,600 Speaker 6: away would would hurt you know, competitors even more so 293 00:15:34,680 --> 00:15:37,120 Speaker 6: than it would Tesla. But it certainly wouldn't be good 294 00:15:37,160 --> 00:15:41,160 Speaker 6: for for Tesla to lose access to seventy five hundred 295 00:15:41,160 --> 00:15:43,440 Speaker 6: dollars for a lot of its its customers in the 296 00:15:43,560 --> 00:15:47,280 Speaker 6: US or would be customers. And so, you know, I 297 00:15:47,520 --> 00:15:50,200 Speaker 6: do think it's very interesting and we've we've heard very 298 00:15:50,280 --> 00:15:53,760 Speaker 6: similar sort of intev rhetoric on the on the part 299 00:15:53,840 --> 00:15:57,240 Speaker 6: of jd Vance, his running mate, and so I think 300 00:15:57,240 --> 00:16:00,000 Speaker 6: it's it's not only Trump who's you know, sort of 301 00:16:00,120 --> 00:16:04,760 Speaker 6: campaigned against evs, but but his running made as a yesterday. 302 00:16:05,040 --> 00:16:07,080 Speaker 2: Hey Craig, thanks so much for joining us. Always appreciate 303 00:16:07,160 --> 00:16:09,320 Speaker 2: talking to you. Craig Trudell, He's Global autos editor for 304 00:16:09,320 --> 00:16:12,480 Speaker 2: Bloomberg News, joining us via zoom from our London Queen 305 00:16:12,560 --> 00:16:15,720 Speaker 2: Victoria Street headquarters. How about this, Since April twenty second, 306 00:16:15,760 --> 00:16:19,160 Speaker 2: Tesla stock is up seventy eight percent. Such a move 307 00:16:19,640 --> 00:16:21,880 Speaker 2: had there's such a negative sentiment there for you know, 308 00:16:21,920 --> 00:16:23,840 Speaker 2: four or five quarters here again as the market's trying 309 00:16:23,880 --> 00:16:27,240 Speaker 2: to discount what is the demand I really like for 310 00:16:27,320 --> 00:16:30,600 Speaker 2: evs and going forward, and I think definitely a turn 311 00:16:30,600 --> 00:16:32,640 Speaker 2: around here, So take note of that. Now a big 312 00:16:32,680 --> 00:16:33,840 Speaker 2: marketing cap stock as well. 313 00:16:35,360 --> 00:16:39,240 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 314 00:16:39,320 --> 00:16:42,400 Speaker 1: weekdays at ten am Eastern on Affo card playing Android 315 00:16:42,440 --> 00:16:45,520 Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever 316 00:16:45,600 --> 00:16:49,920 Speaker 1: you get your podcasts, or watch us live on YouTube. 317 00:16:50,360 --> 00:16:52,680 Speaker 4: Okay, So the Eco news of the morning was that 318 00:16:52,720 --> 00:16:56,040 Speaker 4: retail sales number coming and better than estimated. So retail 319 00:16:56,040 --> 00:16:57,800 Speaker 4: sales off you back out auto and gas. It was 320 00:16:57,840 --> 00:17:00,880 Speaker 4: about eight tens of one percent in June. That retail 321 00:17:00,920 --> 00:17:04,040 Speaker 4: sales Control group was up nine tenths of one percent. Sure, 322 00:17:04,320 --> 00:17:07,880 Speaker 4: they're like doing it in areas where prices have come down, 323 00:17:08,000 --> 00:17:09,920 Speaker 4: so there's still some price sensitivity to it, but it 324 00:17:09,960 --> 00:17:11,679 Speaker 4: was pretty strong, So we want to get more on 325 00:17:11,720 --> 00:17:15,199 Speaker 4: that with Jill Blindshard, president of Enterprise Client Solutions of 326 00:17:15,280 --> 00:17:19,080 Speaker 4: Advantage Solutions. She joins us now from Chicago, Illinois. What 327 00:17:19,160 --> 00:17:22,520 Speaker 4: did you make on the numbers, Jill, Yeah. 328 00:17:22,600 --> 00:17:25,320 Speaker 8: It's so first of all high and thanks for having 329 00:17:25,400 --> 00:17:26,480 Speaker 8: me back. Boy. 330 00:17:26,600 --> 00:17:31,600 Speaker 9: I am trying to temper predictions, let's say, because consumer 331 00:17:31,600 --> 00:17:33,600 Speaker 9: demand is still a really big concern in the back 332 00:17:33,600 --> 00:17:36,159 Speaker 9: half of this year. A year ago, eighteen percent of 333 00:17:36,400 --> 00:17:38,399 Speaker 9: CFOs said that they were concerned about the effect of 334 00:17:38,440 --> 00:17:40,000 Speaker 9: consumer demand on their business. 335 00:17:40,240 --> 00:17:42,200 Speaker 8: That is now tripled to fifty. 336 00:17:41,880 --> 00:17:45,639 Speaker 9: Four percent, and so prices are up twenty to forty 337 00:17:45,680 --> 00:17:49,160 Speaker 9: percent plus choose your category. In most cases, the wages 338 00:17:49,240 --> 00:17:51,119 Speaker 9: haven't kept that same pace, and so there is a 339 00:17:51,160 --> 00:17:55,159 Speaker 9: big impact on many households across the country. Consumers have 340 00:17:55,240 --> 00:17:58,800 Speaker 9: been notoriously price sensitive even before the pandemic, and that 341 00:17:58,920 --> 00:18:01,159 Speaker 9: waned a bit with cod when they couldn't spend on 342 00:18:01,480 --> 00:18:03,240 Speaker 9: services and they diverted that to goods. 343 00:18:03,280 --> 00:18:05,479 Speaker 8: But now they're both back, and they're back at higher prices. 344 00:18:05,480 --> 00:18:09,679 Speaker 9: And so consumers have to find less expensive alternatives to 345 00:18:09,880 --> 00:18:13,680 Speaker 9: achieve those same outcomes. They're still traveling, they're still eating out, 346 00:18:13,760 --> 00:18:17,359 Speaker 9: but the overall transactional value for those is down. And 347 00:18:17,440 --> 00:18:20,119 Speaker 9: so I'd say I'm trying to temper my predictions for 348 00:18:20,160 --> 00:18:21,200 Speaker 9: the next six months. 349 00:18:21,600 --> 00:18:22,800 Speaker 2: What is upflation? 350 00:18:24,840 --> 00:18:27,639 Speaker 8: I love that, right, so super you know. 351 00:18:27,720 --> 00:18:29,760 Speaker 9: So first of all, I have fallen prey to this, 352 00:18:29,800 --> 00:18:32,760 Speaker 9: and so I'll give you my confession here. Inflation is 353 00:18:32,760 --> 00:18:36,560 Speaker 9: this concept of finding new uses for existing products. So 354 00:18:36,640 --> 00:18:39,439 Speaker 9: think of things like an all over bodied deodorant, cereal 355 00:18:39,480 --> 00:18:42,640 Speaker 9: as an economic option for dinner, frozen vegetables a liua 356 00:18:42,720 --> 00:18:44,800 Speaker 9: fresh vegetables to save on waste. 357 00:18:44,920 --> 00:18:47,960 Speaker 8: How about this ready pickle cupcakes. That's a thing. And 358 00:18:48,000 --> 00:18:50,480 Speaker 8: it's not just the cake, it's the frosting. I've fallen 359 00:18:50,520 --> 00:18:52,480 Speaker 8: prey to dog wipes. 360 00:18:52,520 --> 00:18:54,160 Speaker 9: I don't know how they're different than a regular wipe, 361 00:18:54,160 --> 00:18:55,920 Speaker 9: but I feel better about putting that on her paws. 362 00:18:57,720 --> 00:19:06,119 Speaker 9: Hair sunscreen and TikTokers explain, this is expensive. It's hair sunscreen, 363 00:19:06,160 --> 00:19:08,160 Speaker 9: so you spray it on your on your hair, so 364 00:19:08,200 --> 00:19:12,480 Speaker 9: it doesn't so so the sun doesn't do change it. 365 00:19:12,840 --> 00:19:15,520 Speaker 9: And uh TikTok is riding the social wave. Check out 366 00:19:15,520 --> 00:19:19,119 Speaker 9: the hashtag late night stack. They are virtually creating a 367 00:19:19,320 --> 00:19:23,320 Speaker 9: fourth meal, and manufacturers are eager to ride the that wave. 368 00:19:23,400 --> 00:19:26,320 Speaker 9: So there's a lot of examples of inflation out there 369 00:19:26,680 --> 00:19:30,040 Speaker 9: as manufacturers get really creative and trying to get their 370 00:19:30,040 --> 00:19:31,600 Speaker 9: products into more places. 371 00:19:32,480 --> 00:19:36,560 Speaker 4: I'm I just I don't understand, Like, isn't the point 372 00:19:36,760 --> 00:19:39,520 Speaker 4: like you want the bleachy sun blonde look like people 373 00:19:39,560 --> 00:19:42,159 Speaker 4: pay for that. I don't know what I'm not This 374 00:19:42,200 --> 00:19:43,600 Speaker 4: is gonna get off topic, but I'm gonna do some 375 00:19:43,680 --> 00:19:45,400 Speaker 4: homework on this. I'm gonna do some research. I'm gonna 376 00:19:45,440 --> 00:19:49,560 Speaker 4: talk about my feelings. Okay, So what about these unusual strategies, 377 00:19:49,600 --> 00:19:52,320 Speaker 4: Like are people willing to actually, you know, pay for that? 378 00:19:52,520 --> 00:19:55,840 Speaker 4: How does a traditional retailer just say, guys come to 379 00:19:55,880 --> 00:19:58,080 Speaker 4: my store and buy stuff like basic stuff? 380 00:19:59,160 --> 00:19:59,359 Speaker 6: You know. 381 00:19:59,600 --> 00:20:01,880 Speaker 8: So the word of month I think is creative. 382 00:20:01,920 --> 00:20:04,000 Speaker 9: And so we just heard about a very creative strategy 383 00:20:04,040 --> 00:20:07,240 Speaker 9: from manufacturers and retailers as well as consumers are also 384 00:20:07,320 --> 00:20:11,440 Speaker 9: getting very creative. So retailers are doing the things that 385 00:20:11,480 --> 00:20:14,919 Speaker 9: we've seen before. They're pricing their promotion strategies. You know. 386 00:20:15,200 --> 00:20:18,440 Speaker 9: We'll talk today about some of the significant promotion things 387 00:20:18,520 --> 00:20:22,160 Speaker 9: happening this summer. But let's talk about the unlikely business 388 00:20:22,200 --> 00:20:25,720 Speaker 9: pairings and collaborations that we're seeing across retailers today to 389 00:20:25,720 --> 00:20:29,240 Speaker 9: find new business synergies and drive traffics. So, for example, 390 00:20:29,359 --> 00:20:32,560 Speaker 9: look at Uber joining forces with Instacart and Costco. Coles 391 00:20:32,600 --> 00:20:34,040 Speaker 9: is going to put the babies r us stores and 392 00:20:34,080 --> 00:20:36,640 Speaker 9: some of their stores, much like that they did with Sephora. 393 00:20:36,920 --> 00:20:39,680 Speaker 9: McDonald's has a partnership with Krispy Kreme. And these things 394 00:20:39,720 --> 00:20:42,400 Speaker 9: have dual benefit. So first there is these say things 395 00:20:42,440 --> 00:20:46,119 Speaker 9: on labor and real estate of operating multiple stores as 396 00:20:46,200 --> 00:20:49,840 Speaker 9: one store. And then there's that unique in store experience 397 00:20:49,880 --> 00:20:53,880 Speaker 9: that the younger generations really like and they're great traffic drivers. 398 00:20:53,920 --> 00:20:56,360 Speaker 9: I know that when I take an Amazon package back 399 00:20:56,400 --> 00:20:59,600 Speaker 9: to Coles, I have to pass five departments each way 400 00:20:59,680 --> 00:21:03,480 Speaker 9: to take that package back. So really creative solutions by 401 00:21:03,520 --> 00:21:04,400 Speaker 9: retailers too. 402 00:21:05,600 --> 00:21:08,720 Speaker 2: What are consumers doing here? Because we hear about inflation 403 00:21:09,240 --> 00:21:13,439 Speaker 2: really hitting folks that maybe don't own stocks, don't own bonds, 404 00:21:13,440 --> 00:21:16,199 Speaker 2: don't own real estate. Now they're the ones that are 405 00:21:16,200 --> 00:21:20,280 Speaker 2: really being hit by inflation. How does that get reflected 406 00:21:20,320 --> 00:21:22,080 Speaker 2: in a retail sales number that shows some pretty good 407 00:21:22,080 --> 00:21:22,760 Speaker 2: strength this month. 408 00:21:24,560 --> 00:21:27,120 Speaker 9: You know here too, back to my word of the month, 409 00:21:27,200 --> 00:21:30,920 Speaker 9: creativetivity or creative consumers are also getting creative. 410 00:21:31,119 --> 00:21:33,160 Speaker 8: We know that they're getting better and. 411 00:21:33,040 --> 00:21:38,120 Speaker 9: Better at seeking and finding those deals. Here's an interesting 412 00:21:38,160 --> 00:21:41,000 Speaker 9: stat We surveyed over one thousand shoppers to find that 413 00:21:41,119 --> 00:21:45,399 Speaker 9: one third of those shoppers are buying their groceries in bulk, 414 00:21:45,440 --> 00:21:48,120 Speaker 9: and they're sharing with their friends and their neighbors, which 415 00:21:48,160 --> 00:21:50,639 Speaker 9: is a great way for the lower income household to 416 00:21:51,040 --> 00:21:53,320 Speaker 9: enjoy the savings that come with larger products that have 417 00:21:53,359 --> 00:21:56,280 Speaker 9: a better price for counter for ounce. Typically speaking, the 418 00:21:56,280 --> 00:21:59,320 Speaker 9: lower income households on fixed budgets are forced to buy 419 00:21:59,320 --> 00:22:02,480 Speaker 9: those smaller products because of that lower price points. So 420 00:22:02,560 --> 00:22:05,119 Speaker 9: this is a great option for them. And by the way, 421 00:22:05,520 --> 00:22:08,120 Speaker 9: there could soon be an app for that, because there's 422 00:22:08,119 --> 00:22:11,120 Speaker 9: an app for that in South Africa today, so it's 423 00:22:11,160 --> 00:22:13,239 Speaker 9: only a matter of time until it gets here. I 424 00:22:13,240 --> 00:22:15,160 Speaker 9: have no idea how that would work, but we also 425 00:22:15,480 --> 00:22:18,000 Speaker 9: never thought that we would share rides with perfect strangers 426 00:22:18,000 --> 00:22:19,719 Speaker 9: in a car that's driven by a perfect stranger. 427 00:22:19,760 --> 00:22:22,600 Speaker 4: Of what we do that is really interesting and that 428 00:22:22,600 --> 00:22:25,119 Speaker 4: would definitely certainly live in an apartment complex like that 429 00:22:25,119 --> 00:22:28,160 Speaker 4: could make things quite interesting as well. Just so everyone's clear, 430 00:22:28,240 --> 00:22:31,800 Speaker 4: I did research sunscreen for your hair. It's really for 431 00:22:31,880 --> 00:22:33,760 Speaker 4: your scalp. But I still think like why not wear 432 00:22:33,760 --> 00:22:36,400 Speaker 4: a hat? But fair point, this is why it's inflation. 433 00:22:36,800 --> 00:22:38,040 Speaker 4: And I was just looking at you can get a 434 00:22:38,040 --> 00:22:41,560 Speaker 4: twenty five pack of mini pickle cupcakes at Baked by 435 00:22:41,600 --> 00:22:45,520 Speaker 4: Melissa's for thirty seven dollars. Wow, that's like a lot 436 00:22:45,520 --> 00:22:48,040 Speaker 4: of money for little, teeny tiny cupcakes. Anyway, this is 437 00:22:48,119 --> 00:22:51,080 Speaker 4: kind of your point. So, Jill, what have we learned 438 00:22:51,119 --> 00:22:56,159 Speaker 4: though about all the discretionary fun stuff like services, spas, vacations, getaways, 439 00:22:56,240 --> 00:22:57,800 Speaker 4: the stuff that was doing really well. 440 00:22:59,200 --> 00:23:02,840 Speaker 8: You know, sonsumers are have pent up demand for that. 441 00:23:02,840 --> 00:23:06,760 Speaker 9: They're just finding lower cost ways to achieve those, and 442 00:23:06,800 --> 00:23:09,440 Speaker 9: so we might be seeing more in value, but I'll 443 00:23:09,440 --> 00:23:12,240 Speaker 9: go back to the transaction or sorry, in volume, but 444 00:23:12,520 --> 00:23:15,760 Speaker 9: I'll go back to the transactional value typically speaking, that's down. 445 00:23:15,920 --> 00:23:18,919 Speaker 9: So they're doing more of that that we've done before, 446 00:23:19,000 --> 00:23:20,960 Speaker 9: but they're doing it at a lower rate. 447 00:23:22,560 --> 00:23:23,600 Speaker 3: So I see. 448 00:23:23,760 --> 00:23:26,359 Speaker 2: Yeah, Joe, how about the back to school that's probably 449 00:23:26,359 --> 00:23:29,560 Speaker 2: the next shopping season for you that you get a 450 00:23:29,600 --> 00:23:31,760 Speaker 2: sense of how retaillers are doing, how consumers are doing. 451 00:23:31,800 --> 00:23:34,040 Speaker 2: What's the expectation for back to school this year? 452 00:23:35,200 --> 00:23:37,800 Speaker 9: So, you know, kudos to the three big retailers who 453 00:23:37,880 --> 00:23:44,320 Speaker 9: really created a summer of savings and really jumped jumped 454 00:23:44,320 --> 00:23:47,960 Speaker 9: into trying to create a season and what is otherwise 455 00:23:48,000 --> 00:23:50,120 Speaker 9: a lower season right now, So we just got done 456 00:23:50,160 --> 00:23:53,200 Speaker 9: with the Walmart Deal Days, Target Circle Week, Today's the 457 00:23:53,280 --> 00:23:56,480 Speaker 9: kickoff of Amazon's summertime Prime Days. All of those have 458 00:23:56,800 --> 00:23:59,640 Speaker 9: discounts on thousands of items with a focus. 459 00:23:59,200 --> 00:24:00,639 Speaker 8: On that school and no. 460 00:24:00,760 --> 00:24:04,000 Speaker 9: Plus, Amazon is doing things like ropping a new deal 461 00:24:04,359 --> 00:24:06,840 Speaker 9: every five minutes, and so they're really swinging for the 462 00:24:06,880 --> 00:24:11,320 Speaker 9: fences in terms of capturing trips, creating sales, and trying 463 00:24:11,320 --> 00:24:14,240 Speaker 9: to meet the consumer with economic value. 464 00:24:15,359 --> 00:24:17,840 Speaker 4: What do you think will happen if the Fed cuts rates? 465 00:24:18,200 --> 00:24:20,040 Speaker 4: And I say that because if all of a sudden 466 00:24:20,040 --> 00:24:22,240 Speaker 4: we get relief and there's fifty bases points of cuts 467 00:24:22,240 --> 00:24:24,760 Speaker 4: in the next four months, do people have a lot 468 00:24:24,800 --> 00:24:27,960 Speaker 4: more money to spend? Is it actually an increase spending? 469 00:24:29,320 --> 00:24:30,679 Speaker 8: Oh, we talk a lot about this. 470 00:24:30,760 --> 00:24:34,000 Speaker 9: I mean, typically speaking, lower interest rates feel the purchases 471 00:24:34,000 --> 00:24:36,160 Speaker 9: of large things like cars and homes, and so when 472 00:24:36,160 --> 00:24:40,119 Speaker 9: they're making those purchases that might actually trickle down to small, 473 00:24:40,240 --> 00:24:44,399 Speaker 9: smaller spends within the household, but typically speaking initially they 474 00:24:44,400 --> 00:24:46,760 Speaker 9: don't have a near end effect on those smaller spends. 475 00:24:47,080 --> 00:24:52,280 Speaker 9: That said, consumers are very attractive to enticing loan options. 476 00:24:52,320 --> 00:24:55,800 Speaker 9: So let's talk about the buy now, pay later market. 477 00:24:55,840 --> 00:24:58,520 Speaker 9: That's up twelve percent on a year over year basis. 478 00:24:58,800 --> 00:25:01,560 Speaker 9: It accounts for eighty seven billion dollars in debt. There's 479 00:25:01,560 --> 00:25:04,080 Speaker 9: lots of different figures out there. It's expected to grow 480 00:25:04,119 --> 00:25:06,800 Speaker 9: at a twenty five percent tagger over the next set 481 00:25:07,040 --> 00:25:10,600 Speaker 9: seven years. So let's hope that consumers can pay those 482 00:25:10,680 --> 00:25:13,760 Speaker 9: back because they come with very very steep late piece 483 00:25:13,800 --> 00:25:16,639 Speaker 9: as well as credit risk. But it's indicative of the 484 00:25:16,680 --> 00:25:20,280 Speaker 9: fact that consumers are enticed by attractive loan options. 485 00:25:20,800 --> 00:25:23,840 Speaker 2: Talks about like trading down. Are people trading down from 486 00:25:24,000 --> 00:25:25,760 Speaker 2: I don't know, Walmart and a target to maybe the 487 00:25:25,840 --> 00:25:29,480 Speaker 2: dollar stores? Do we see that activity or they just 488 00:25:29,520 --> 00:25:31,520 Speaker 2: try to be more frugal within the targets and the 489 00:25:31,520 --> 00:25:32,359 Speaker 2: Walmarts of the world. 490 00:25:33,880 --> 00:25:36,640 Speaker 9: Oh boy, you know, I'm not fine when somebody gives 491 00:25:36,680 --> 00:25:38,080 Speaker 9: the answer mixed, But I'm going to give you the 492 00:25:38,080 --> 00:25:38,720 Speaker 9: answer mixed. 493 00:25:39,440 --> 00:25:41,640 Speaker 8: A lot of households actually are trading down. 494 00:25:42,080 --> 00:25:43,800 Speaker 9: The reason that I see mixed though, is that we 495 00:25:43,960 --> 00:25:46,800 Speaker 9: see some of those mainstream retailers trying to be a 496 00:25:46,840 --> 00:25:47,520 Speaker 9: dollar store. 497 00:25:47,560 --> 00:25:50,399 Speaker 8: So they're trying, so they are, they're. 498 00:25:50,200 --> 00:25:53,840 Speaker 9: Rolling out more and more smaller packages at lower price 499 00:25:53,920 --> 00:25:58,359 Speaker 9: point to be able to capture that dollar, that dollar trip. 500 00:25:58,560 --> 00:26:02,520 Speaker 9: So it's really it's really but overall though a trade down. 501 00:26:02,920 --> 00:26:04,480 Speaker 8: It just varies whether. 502 00:26:04,320 --> 00:26:06,879 Speaker 9: We're talking about trading down in categories like a stage 503 00:26:06,880 --> 00:26:09,399 Speaker 9: to Aposta, treading down in channels from mainstream grows for 504 00:26:09,520 --> 00:26:13,399 Speaker 9: to dollar, or trading down in brands from premium brand 505 00:26:13,480 --> 00:26:15,320 Speaker 9: to a value or even private label. 506 00:26:16,000 --> 00:26:18,359 Speaker 4: So great, Jill, we really appreciate you. That was just 507 00:26:18,440 --> 00:26:21,159 Speaker 4: so interesting. I'm like now deep in the whole of 508 00:26:21,200 --> 00:26:23,399 Speaker 4: all this weird stuff of upflation. So that's going to 509 00:26:23,440 --> 00:26:25,840 Speaker 4: stay with me for a while. Jill Blanchhard, President of 510 00:26:25,960 --> 00:26:31,760 Speaker 4: Enterprise Credit Client Solutions, have Advantage Solutions, Joining us from Chicago, Illinois. 511 00:26:33,359 --> 00:26:37,240 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 512 00:26:37,320 --> 00:26:40,840 Speaker 1: weekdays at ten am Eastern on applecar Play and Android 513 00:26:40,880 --> 00:26:43,639 Speaker 1: Auto with the Bloomberg Business Act. You can also listen 514 00:26:43,760 --> 00:26:46,879 Speaker 1: live on Amazon Alexa from our flagship New York station, 515 00:26:47,240 --> 00:26:50,000 Speaker 1: Just say Alexa playing Bloomberg eleven thirty. 516 00:26:51,640 --> 00:26:54,000 Speaker 4: We are live in the Active broke A studio right 517 00:26:54,040 --> 00:26:58,680 Speaker 4: here in midtown Manhattan. It's like one hundred degrees out today. Yeah, 518 00:26:58,880 --> 00:27:01,040 Speaker 4: are you psyched that you're back in the office? 519 00:27:01,440 --> 00:27:04,040 Speaker 2: Subway platform is gonna beat something I'm looking forward to today. 520 00:27:04,119 --> 00:27:06,800 Speaker 4: Oh yeah, ditto, ditto. And this is when you want 521 00:27:06,800 --> 00:27:09,199 Speaker 4: to be working from home, right you get the breeze Jersey. 522 00:27:09,280 --> 00:27:11,720 Speaker 4: Sure he's broadcasting from the beach there, it is. 523 00:27:11,640 --> 00:27:14,320 Speaker 2: That's my jam, But that's not the case. We are 524 00:27:14,320 --> 00:27:16,320 Speaker 2: here in the city and I want to talk commercial 525 00:27:16,359 --> 00:27:19,080 Speaker 2: real estate because this is just a critical, critical issue 526 00:27:19,080 --> 00:27:22,320 Speaker 2: for the economy, for banks obviously, for the folks involved 527 00:27:22,359 --> 00:27:24,480 Speaker 2: in the real estate business. And there's no better person 528 00:27:24,520 --> 00:27:27,840 Speaker 2: to talk to for commercial real estate than Douglas Durst. 529 00:27:27,920 --> 00:27:30,520 Speaker 2: He's a chairman a Durst Organization. Joining us live here 530 00:27:30,560 --> 00:27:33,840 Speaker 2: on our Bloomberg at Directive Broker studio. We appreciate that, Douglas, 531 00:27:33,880 --> 00:27:36,879 Speaker 2: Thank you so much for joining us here. The party 532 00:27:36,920 --> 00:27:41,679 Speaker 2: line out there is commercial, particularly office real estate in 533 00:27:41,880 --> 00:27:45,640 Speaker 2: urban areas, it's bad and it's going to get worse. 534 00:27:45,640 --> 00:27:48,679 Speaker 2: So maybe we don't know how bad it is, is 535 00:27:48,680 --> 00:27:51,080 Speaker 2: that the case or there are different layers under. 536 00:27:50,840 --> 00:27:52,960 Speaker 5: That, it's certainly the case that you don't know how 537 00:27:52,960 --> 00:27:58,080 Speaker 5: bad it is because it's not bad, Okay. In our portfolio, 538 00:27:58,680 --> 00:28:03,680 Speaker 5: we are almost ninety five percent least across the portfolio 539 00:28:04,080 --> 00:28:08,399 Speaker 5: except for a building that we started construction pre pandemic 540 00:28:08,840 --> 00:28:12,240 Speaker 5: had to stop, and at eight twenty five Third Avenue, 541 00:28:12,640 --> 00:28:17,080 Speaker 5: we're now about forty percent least in a year. Our 542 00:28:17,119 --> 00:28:25,879 Speaker 5: other buildings are mostly fully occupied. At twenty nineteen, pre pandemic, 543 00:28:26,400 --> 00:28:31,080 Speaker 5: we had three large office buildings vacated because tenants moved elsewhere. 544 00:28:31,720 --> 00:28:34,800 Speaker 5: Those buildings are eleven fifty five where we just moved 545 00:28:34,800 --> 00:28:38,520 Speaker 5: to one Bryant Park and building. 546 00:28:38,680 --> 00:28:41,760 Speaker 4: Yeah, I mean, like you have some of the really 547 00:28:41,800 --> 00:28:44,000 Speaker 4: amazing buildings. Do you have thirteen million square feet of 548 00:28:44,040 --> 00:28:47,800 Speaker 4: prime Manhattan office real estate like one Brian Park, like 549 00:28:48,160 --> 00:28:52,600 Speaker 4: one World Trade Center? So how is it like to 550 00:28:52,640 --> 00:28:55,719 Speaker 4: fill those buildings now? And what's the rent like and 551 00:28:55,760 --> 00:28:58,160 Speaker 4: what's their pricing power? Like you just walk us through 552 00:28:58,520 --> 00:29:00,800 Speaker 4: because you prime off this real estate. 553 00:29:01,560 --> 00:29:08,280 Speaker 5: We do, and the rents are higher than a pre pandemic. 554 00:29:11,000 --> 00:29:14,520 Speaker 5: Bank of America just took additional space our space at 555 00:29:14,640 --> 00:29:17,760 Speaker 5: one Bryan Park, So that's why we had to move 556 00:29:17,800 --> 00:29:22,640 Speaker 5: to eleven fifty five. We're signing leases in eleven fifty five, 557 00:29:23,080 --> 00:29:25,360 Speaker 5: which is a building that was built in nineteen eighty 558 00:29:25,400 --> 00:29:30,280 Speaker 5: four was vacated in twenty twenty eighteen by White and Case. 559 00:29:30,760 --> 00:29:36,960 Speaker 5: We completely redid the building, added new windows and new 560 00:29:36,960 --> 00:29:37,800 Speaker 5: air conditioning. 561 00:29:38,600 --> 00:29:40,239 Speaker 4: Is that the one on sixth Avenue. That's the one 562 00:29:40,240 --> 00:29:42,040 Speaker 4: on this so I used to work there. We called 563 00:29:42,040 --> 00:29:44,240 Speaker 4: it to Dusk Star because it was like this huge 564 00:29:44,400 --> 00:29:47,440 Speaker 4: black tower of nothingness. 565 00:29:47,480 --> 00:29:48,600 Speaker 5: The Darth Vader building. 566 00:29:48,920 --> 00:29:49,400 Speaker 3: Exactly. 567 00:29:49,560 --> 00:29:51,920 Speaker 4: Yes, okay, so and you fixed it, you made it pretty. 568 00:29:52,120 --> 00:29:52,520 Speaker 1: We did. 569 00:29:53,640 --> 00:29:56,640 Speaker 5: We actually we were there until we moved to one 570 00:29:56,680 --> 00:30:00,200 Speaker 5: Bryant Park and we were all a little worried about 571 00:30:00,240 --> 00:30:03,520 Speaker 5: moving back because it had been very dark. But it's 572 00:30:03,600 --> 00:30:07,680 Speaker 5: now very bright and as I said, it's ninety five 573 00:30:07,720 --> 00:30:12,240 Speaker 5: percent full. I just toured the space of Global Relay. 574 00:30:13,320 --> 00:30:15,800 Speaker 5: Most people have not heard of it. It's a fintech 575 00:30:15,840 --> 00:30:22,240 Speaker 5: company and they're moving from Northwest Canada. They took the 576 00:30:22,280 --> 00:30:26,720 Speaker 5: top of the building. They made a spectacular build out. 577 00:30:27,320 --> 00:30:29,400 Speaker 5: I think it's one of the best in the city. 578 00:30:29,560 --> 00:30:34,800 Speaker 5: It certainly equals space here at Bloomberg, which is terrific space. 579 00:30:36,640 --> 00:30:39,240 Speaker 5: And they're going to be hiring over three hundred people 580 00:30:39,640 --> 00:30:42,160 Speaker 5: for their new office. This was their first office in 581 00:30:42,200 --> 00:30:46,160 Speaker 5: New York City. Fintech is a big movement mover in 582 00:30:46,240 --> 00:30:50,680 Speaker 5: the office economy. The other issue that people don't realize 583 00:30:50,760 --> 00:30:57,040 Speaker 5: is the tech companies start out very small, but as 584 00:30:57,040 --> 00:31:00,160 Speaker 5: soon as they move in, they're expanding. We started what 585 00:31:00,200 --> 00:31:04,000 Speaker 5: we call durst Ready, which allows tenants to move right 586 00:31:04,040 --> 00:31:09,560 Speaker 5: in small space short term leases, and most of them 587 00:31:09,840 --> 00:31:14,560 Speaker 5: stay and expand. Some some don't work out, obviously, but uh, 588 00:31:15,360 --> 00:31:18,600 Speaker 5: it's it's the new companies, the new industries that are 589 00:31:18,600 --> 00:31:25,280 Speaker 5: really growing in New York. The older industries are just 590 00:31:25,360 --> 00:31:27,240 Speaker 5: not growing and that's not an issue. 591 00:31:27,600 --> 00:31:30,000 Speaker 2: So what I guess what I've learned about the commercial 592 00:31:30,000 --> 00:31:32,320 Speaker 2: real estate market over the last several years, and I've learned, 593 00:31:32,760 --> 00:31:36,520 Speaker 2: you know, exponentially what I knew before is that if 594 00:31:36,560 --> 00:31:40,160 Speaker 2: you have a quality buildings, and like the Bloomberg building 595 00:31:40,200 --> 00:31:42,840 Speaker 2: here is in a quality buildings not a plus. Fine, 596 00:31:43,120 --> 00:31:47,040 Speaker 2: your your least your occupant occupancies are great. But if 597 00:31:47,040 --> 00:31:50,280 Speaker 2: you're anything less B or C, those are challenging. And 598 00:31:50,360 --> 00:31:53,200 Speaker 2: those are some that people are concerned about the values, 599 00:31:53,240 --> 00:31:56,840 Speaker 2: concerned about the debt associated with those buildings. How do 600 00:31:56,880 --> 00:31:58,600 Speaker 2: you see that part of the New York market, the 601 00:31:58,680 --> 00:31:59,040 Speaker 2: B and C. 602 00:31:59,280 --> 00:32:05,000 Speaker 5: Level, the B levels, it really depends on the ownership 603 00:32:05,080 --> 00:32:09,120 Speaker 5: and what they've done. We have buildings I don't I 604 00:32:09,120 --> 00:32:14,200 Speaker 5: would consider as okay, okay, but the first building we 605 00:32:14,280 --> 00:32:18,280 Speaker 5: built six fifty five Third Avenue. When we built it, 606 00:32:18,280 --> 00:32:23,040 Speaker 5: it was two hundred East forty second Street. You know, 607 00:32:23,360 --> 00:32:26,360 Speaker 5: preferences for address has changed, so it's now a third 608 00:32:26,400 --> 00:32:32,800 Speaker 5: Avenue address. It was vacated to about forty percent two 609 00:32:32,880 --> 00:32:36,280 Speaker 5: years ago. It's now eighty percent least as I said 610 00:32:36,280 --> 00:32:41,600 Speaker 5: it was built in. I didn't say nineteen fifty five. 611 00:32:42,400 --> 00:32:46,680 Speaker 5: And we keep investing in our buildings, keep modernizing them, 612 00:32:47,160 --> 00:32:51,320 Speaker 5: and that way we add, we add tenants or keep tenants. 613 00:32:51,800 --> 00:32:54,640 Speaker 4: So when we talk about in a macro sense, ah, 614 00:32:54,680 --> 00:32:57,680 Speaker 4: the Fed's gonna lower rates, et cetera. Does that What 615 00:32:57,760 --> 00:32:59,640 Speaker 4: does that mean to you? When you're already in a 616 00:32:59,680 --> 00:33:03,160 Speaker 4: position where your buildings are mostly occupied, you can raise 617 00:33:03,200 --> 00:33:04,760 Speaker 4: your rents. What does that mean? 618 00:33:07,440 --> 00:33:11,560 Speaker 5: Well, it means that the office market is not a monolith. 619 00:33:11,600 --> 00:33:14,400 Speaker 5: There are buildings that are going to continue to do 620 00:33:14,480 --> 00:33:19,080 Speaker 5: well and others that are going to fail. But those 621 00:33:19,120 --> 00:33:21,680 Speaker 5: buildings that don't survive are going to be purchased at 622 00:33:21,760 --> 00:33:25,040 Speaker 5: a lower cost, people are going to invest in them, 623 00:33:25,080 --> 00:33:27,800 Speaker 5: and they're going to come back. Because the office market 624 00:33:27,840 --> 00:33:32,520 Speaker 5: is continuing to grow and expand, where we leased a 625 00:33:32,560 --> 00:33:36,600 Speaker 5: million square feet last year, which is the highest we 626 00:33:36,760 --> 00:33:42,320 Speaker 5: leased in the past six years. So the office market 627 00:33:42,360 --> 00:33:47,560 Speaker 5: is good. There are buildings that for because mostly interest rates. 628 00:33:48,240 --> 00:33:52,240 Speaker 5: When when interest rates triple I think close to triple, 629 00:33:53,280 --> 00:33:57,600 Speaker 5: the values go down. And that's if you have If 630 00:33:57,600 --> 00:34:02,160 Speaker 5: you're financed at seven you're eighty percent. We only we 631 00:34:02,440 --> 00:34:05,080 Speaker 5: try and stay under fifty percent. All of a sudden, 632 00:34:05,120 --> 00:34:09,040 Speaker 5: your building is worth half of or not half, but yeah, 633 00:34:09,080 --> 00:34:11,799 Speaker 5: considerably less than what it was and you cannot refinance. 634 00:34:12,160 --> 00:34:13,319 Speaker 3: So that's kind of where I want to go. 635 00:34:13,440 --> 00:34:17,320 Speaker 2: What is the lending market like today for commercial real estate? 636 00:34:17,520 --> 00:34:19,880 Speaker 2: Does it depends? I mean, I assume your relationship with 637 00:34:19,880 --> 00:34:23,160 Speaker 2: your bankers are very strong. But for the average commercial 638 00:34:23,200 --> 00:34:24,759 Speaker 2: real estate, how are things up there? 639 00:34:25,000 --> 00:34:28,640 Speaker 5: For the average commercial real estate and even for us, 640 00:34:29,480 --> 00:34:34,440 Speaker 5: it's very, very tough. The FED has really clamped down 641 00:34:34,760 --> 00:34:39,840 Speaker 5: on all commercial real estate and they do not realize 642 00:34:39,840 --> 00:34:42,880 Speaker 5: that it's not monolithic, that not all buildings are in 643 00:34:42,920 --> 00:34:47,520 Speaker 5: bad shape. We had to struggle for some of our 644 00:34:47,560 --> 00:34:55,640 Speaker 5: loans to me put it that way, we had to 645 00:34:56,080 --> 00:35:01,960 Speaker 5: really push to get our loans renewed right, and no 646 00:35:02,000 --> 00:35:04,960 Speaker 5: matter how much we showed that we were in good shape, 647 00:35:04,480 --> 00:35:08,719 Speaker 5: it's the FED that's pushing the reserves for banks that 648 00:35:08,760 --> 00:35:11,280 Speaker 5: make it difficult for them to make these loans. 649 00:35:11,760 --> 00:35:14,560 Speaker 4: Before we let you go, Are you buying right now? 650 00:35:15,200 --> 00:35:21,640 Speaker 5: No, No, there's We're continuing to improve our buildings to 651 00:35:21,680 --> 00:35:25,239 Speaker 5: invest our money in new buildings. There are a lot 652 00:35:25,280 --> 00:35:27,799 Speaker 5: of people out there, a lot of these funds which 653 00:35:27,880 --> 00:35:31,640 Speaker 5: we don't have at this moment, who are going to 654 00:35:31,640 --> 00:35:35,640 Speaker 5: be picking up properties. So the market for the buildings 655 00:35:35,640 --> 00:35:37,359 Speaker 5: that don't work is very strong. 656 00:35:38,120 --> 00:35:40,040 Speaker 4: Really great to get your perspective. Thank you so much 657 00:35:40,080 --> 00:35:43,120 Speaker 4: for coming in. There's one hundred degree degree day. We 658 00:35:43,200 --> 00:35:46,759 Speaker 4: really appreciate that. Douglas Durst, chairman of the Durst Organization, 659 00:35:47,200 --> 00:35:50,120 Speaker 4: resides in my former employment. I mean, we're going back 660 00:35:50,160 --> 00:35:52,399 Speaker 4: twenty years, but still, yeah, I worked at White and Case. 661 00:35:52,440 --> 00:35:55,560 Speaker 4: I was a paralegal man. Oh oh yeah, I worked 662 00:35:55,560 --> 00:35:58,400 Speaker 4: at night. I worked from four pm until midnight. 663 00:35:58,760 --> 00:35:59,080 Speaker 6: Wow. 664 00:35:59,320 --> 00:36:03,279 Speaker 4: Yeah, okay, I did really great, amazing things like FedExing 665 00:36:03,320 --> 00:36:08,160 Speaker 4: documents and faxing things. Fact, because that was still a thing. 666 00:36:08,719 --> 00:36:10,640 Speaker 4: Page and look. 667 00:36:10,440 --> 00:36:12,799 Speaker 3: At me now looking up. 668 00:36:14,360 --> 00:36:18,280 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 669 00:36:18,360 --> 00:36:21,840 Speaker 1: weekdays at ten am Eastern on applecar Play and Android 670 00:36:21,880 --> 00:36:24,680 Speaker 1: Auto with the Bloomberg Business Act. You can also listen 671 00:36:24,800 --> 00:36:27,879 Speaker 1: live on Amazon Alexa from our flagship New York station 672 00:36:28,239 --> 00:36:32,000 Speaker 1: Just Say Alexa playing Bloomberg eleven thirty. 673 00:36:32,400 --> 00:36:34,200 Speaker 4: All right, let's go to Jody Schneider, now a political 674 00:36:34,239 --> 00:36:36,799 Speaker 4: news director for Bloomberg Television and Radio. She's standing by 675 00:36:37,280 --> 00:36:41,200 Speaker 4: in Milwaukee. Jody, the event, obviously last night was President 676 00:36:41,280 --> 00:36:43,239 Speaker 4: former President Trump walking in with the bandage on his 677 00:36:43,280 --> 00:36:46,320 Speaker 4: ear and then declaring that VP pick of JD. Vance, 678 00:36:46,600 --> 00:36:50,319 Speaker 4: Senator from Ohio, walk me through what you learned last night? 679 00:36:51,600 --> 00:36:56,399 Speaker 10: Well, yesterday we did have that on the announcement of JD. 680 00:36:56,520 --> 00:36:59,719 Speaker 10: Vance as the pick was done in the afternoon, and 681 00:36:59,760 --> 00:37:03,279 Speaker 10: then he showed up at the at the venue here 682 00:37:03,480 --> 00:37:06,920 Speaker 10: at the convention Hall earlier in the evening. And then 683 00:37:07,040 --> 00:37:11,120 Speaker 10: last night we did see former President Trump, uh, the 684 00:37:11,480 --> 00:37:15,359 Speaker 10: almost nominee he will well he's been he's been now 685 00:37:15,480 --> 00:37:17,680 Speaker 10: designated as a nominee who just has to give a 686 00:37:17,719 --> 00:37:21,120 Speaker 10: speech on Thursday night, but he and JD. Vance were 687 00:37:21,160 --> 00:37:25,160 Speaker 10: shown together. Neither of them spoke their speeches will be 688 00:37:25,200 --> 00:37:28,560 Speaker 10: Wednesday and Thursday night. But it is clearly a passing 689 00:37:28,600 --> 00:37:32,480 Speaker 10: of the torch to a new generation, making sure that 690 00:37:33,280 --> 00:37:38,319 Speaker 10: this is the Uh, the whole philosophy of MAGA and 691 00:37:38,719 --> 00:37:43,080 Speaker 10: president former President Trump's philosophy has been given now to 692 00:37:43,800 --> 00:37:47,880 Speaker 10: a new generation because the vice presidential pick jd Vance 693 00:37:48,080 --> 00:37:50,560 Speaker 10: espouses those same principles. 694 00:37:50,920 --> 00:37:53,239 Speaker 2: Well, he didn't always espouse those same principles. Did he 695 00:37:53,280 --> 00:37:55,319 Speaker 2: give us a little sense of kind of how jd 696 00:37:55,440 --> 00:37:58,600 Speaker 2: Vance has evolved over the last several years as a politician. 697 00:37:59,480 --> 00:38:02,080 Speaker 10: Yeah, that's right, he said, And he said some well 698 00:38:02,120 --> 00:38:06,080 Speaker 10: noted differences with former President Trump. He once called him noxious. 699 00:38:07,120 --> 00:38:12,680 Speaker 10: He has. He's somebody who was a First of all, 700 00:38:12,719 --> 00:38:16,239 Speaker 10: he had a business career before he was a politician. 701 00:38:16,480 --> 00:38:20,080 Speaker 10: He was a venture capitalist. He wrote a best selling book, 702 00:38:20,160 --> 00:38:23,000 Speaker 10: Hill Billy Elogy, which is said to be, Uh, some 703 00:38:23,120 --> 00:38:25,680 Speaker 10: of the principles in there about how he grew up 704 00:38:25,680 --> 00:38:30,120 Speaker 10: poor in Ohio and kind of overcame that. It's been 705 00:38:30,160 --> 00:38:32,880 Speaker 10: said to be a populist book, trying to reach out 706 00:38:33,120 --> 00:38:37,759 Speaker 10: to more working class voters. Uh. He evolved from that 707 00:38:37,840 --> 00:38:41,279 Speaker 10: and then became a United States Senator from Ohio. In 708 00:38:41,600 --> 00:38:45,960 Speaker 10: recent years he has honed very closely to the principles 709 00:38:45,960 --> 00:38:49,520 Speaker 10: that Donald Trump UH talks about, and he is said 710 00:38:49,560 --> 00:38:53,080 Speaker 10: to have been a favorite UH that Donald Trump's sons 711 00:38:53,239 --> 00:38:57,600 Speaker 10: Eric and Donald Trump Junior pushed for him because they 712 00:38:57,680 --> 00:39:02,720 Speaker 10: saw him as would he would continue the magabrand Donald 713 00:39:02,719 --> 00:39:03,919 Speaker 10: Trump's brand. 714 00:39:03,640 --> 00:39:04,440 Speaker 3: Into the future. 715 00:39:04,800 --> 00:39:07,680 Speaker 10: He's notably, he's thirty nine years old, not even forty 716 00:39:07,760 --> 00:39:13,760 Speaker 10: years old, you know, a whole different generation than Donald Trump. 717 00:39:14,560 --> 00:39:17,880 Speaker 4: It was interesting, Jody, because part of the rhetoric yesterday 718 00:39:17,920 --> 00:39:20,880 Speaker 4: after the potential assassination was that President Trump was speaking 719 00:39:20,920 --> 00:39:23,200 Speaker 4: about unity, which is something he doesn't do very often. 720 00:39:23,600 --> 00:39:23,839 Speaker 3: JD. 721 00:39:23,960 --> 00:39:26,879 Speaker 4: Vance, however, went to the far right and was saying, look, 722 00:39:27,120 --> 00:39:31,000 Speaker 4: blaming President Biden for the attack on President Trump, very 723 00:39:31,080 --> 00:39:33,879 Speaker 4: very divisive, and so some of people were talking about 724 00:39:33,880 --> 00:39:37,040 Speaker 4: the fact that would President Trump pick a United vice president? 725 00:39:37,080 --> 00:39:40,080 Speaker 4: He didn't. Did he do that because he also will 726 00:39:40,120 --> 00:39:42,680 Speaker 4: stay divisive? Or does it give now President Trump the 727 00:39:42,719 --> 00:39:45,360 Speaker 4: ability to be more of a unifier of the Republican 728 00:39:45,400 --> 00:39:48,560 Speaker 4: Party while JD. Vans holds the holds the core. 729 00:39:50,080 --> 00:39:52,239 Speaker 10: Yeah, that's a good question, and I think there is 730 00:39:52,320 --> 00:39:54,680 Speaker 10: some of that. You know, Donald Trump now can sort 731 00:39:54,680 --> 00:39:57,160 Speaker 10: of say, okay, you know, we don't want. You know, 732 00:39:57,200 --> 00:39:59,680 Speaker 10: he can come out, especially since he was a target 733 00:39:59,680 --> 00:40:02,520 Speaker 10: of an assassination attempt. He can come out and say 734 00:40:02,680 --> 00:40:06,520 Speaker 10: there's no place for political violence. And Jade Vance can 735 00:40:06,600 --> 00:40:08,680 Speaker 10: kind of, you know, be the tougher one on that right. 736 00:40:08,760 --> 00:40:10,319 Speaker 10: He can be the one that says the things that 737 00:40:10,520 --> 00:40:13,239 Speaker 10: Donald Trump, the top of the ticket doesn't want to say. 738 00:40:13,560 --> 00:40:17,200 Speaker 10: But clearly there had been some talk of perhaps, you know, 739 00:40:17,239 --> 00:40:19,879 Speaker 10: Donald Trump was going to pick somebody who could reach 740 00:40:19,920 --> 00:40:25,640 Speaker 10: out more, say to women voters, to racial minorities for instance, 741 00:40:25,719 --> 00:40:27,920 Speaker 10: you know, trying to get some of these swing state voters. 742 00:40:28,120 --> 00:40:31,360 Speaker 10: But this is very much a doubling down on the brand, 743 00:40:32,160 --> 00:40:36,560 Speaker 10: doubling down on you the core of their constituency, the 744 00:40:36,600 --> 00:40:38,640 Speaker 10: white male, working class voters. 745 00:40:38,920 --> 00:40:40,719 Speaker 2: All right, Jody, thank you so much for joining us. 746 00:40:40,760 --> 00:40:43,680 Speaker 2: Jody Schneider, she's a political news director for Bloomberg Television 747 00:40:43,680 --> 00:40:47,880 Speaker 2: and News. Joining us remotely from Milwaukee, Wisconsin, the site 748 00:40:47,920 --> 00:40:50,200 Speaker 2: of the Public National Convention. 749 00:40:50,760 --> 00:40:55,279 Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apples, Spotify, 750 00:40:55,520 --> 00:40:58,399 Speaker 1: and anywhere else you can get your podcasts. Listen live 751 00:40:58,520 --> 00:41:02,120 Speaker 1: each weekday ten am to Eastern on Bloomberg dot com, 752 00:41:02,200 --> 00:41:05,560 Speaker 1: the iHeartRadio app, Tune in and the Bloomberg Business App. 753 00:41:05,719 --> 00:41:08,760 Speaker 1: You can also watch us live every weekday on YouTube 754 00:41:08,960 --> 00:41:10,840 Speaker 1: and always on the Bloomberg terminal