WEBVTT - Trump Hints He’ll Hold Off Iran Strike, Give Diplomacy Time

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News. You're listening to the

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<v Speaker 2>Cliff Cupchin, he's chairman of the Eurasia Group. Cliff, thanks

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<v Speaker 2>so much for joining us here again to speak with

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<v Speaker 2>the Ros Mathieson and Bloomberg News.

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<v Speaker 3>The latest news.

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<v Speaker 2>President Trump appears to be taking a little bit of

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<v Speaker 2>a pause here. How do you think this potentially could

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<v Speaker 2>pay out play out? There's a number of scenarios. I

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<v Speaker 2>know you've kind of kind of gamed out.

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<v Speaker 4>Most likely is there's talk for a week, ten days,

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<v Speaker 4>the Europeans lead the way, Aaron refuses to give up

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<v Speaker 4>domestic in Richmond, and the US takes out or tries

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<v Speaker 4>to take out. I think probably can take out the

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<v Speaker 4>flourido inrichment plant, which would you under a mountain? That

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<v Speaker 4>would be escalatory, dramatically escalatory, you big spike in oil.

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<v Speaker 4>There are other scenarios where I don't think you. I

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<v Speaker 4>don't think Iron would try to close the straight straight

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<v Speaker 4>of hor moves. We can come back to that other

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<v Speaker 4>scenarios where this does escalate and in even more in

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<v Speaker 4>response to the US right on floidoh or on tries

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<v Speaker 4>to tick out stop shipping through the straight of horm moves.

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<v Speaker 4>And then there's a small chance, maybe one in five

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<v Speaker 4>twenty percent, I think, is how game that out these

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<v Speaker 4>talks actually work. But it's a really kind of a

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<v Speaker 4>hail Mary, I think by all sides, because there's no

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<v Speaker 4>no size one escalate. But I think it's a really

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<v Speaker 4>a really small chance.

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<v Speaker 5>You know, Cliff, I've seen a lot of sort of

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<v Speaker 5>guess work and estimates regarding how many missiles that Iran

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<v Speaker 5>really has left in their stockpile. You know, they've used

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<v Speaker 5>a lot, a lot have been destroyed by the Israels.

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<v Speaker 5>Is it a possible scenario that in this two weeks

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<v Speaker 5>they that stockpile just runs so low that they are

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<v Speaker 5>unable to keep launching at Israel? And does you know,

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<v Speaker 5>is that enough to sort of bring the temperature down

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<v Speaker 5>on all of this?

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<v Speaker 4>I think the rate of missile salves from Iran is

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<v Speaker 4>already dropping. They are like any country would, I think,

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<v Speaker 4>and it keeps some in strategic reserve, and you know, No,

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<v Speaker 4>I don't know anybody knows, at least the unclassified world

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<v Speaker 4>exactly how many they have left. But I think they're

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<v Speaker 4>all already running low. I mean, iron just doesn't have

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<v Speaker 4>good options right now. We'll see if they you know,

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<v Speaker 4>hold to the hard line or which I think they will,

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<v Speaker 4>or if it actually you know, they run out of

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<v Speaker 4>resolve and they can see cliff.

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<v Speaker 2>Is regime change a policy or a strategy that Israel

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<v Speaker 2>end or the US should proceed, or if follow in

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<v Speaker 2>Iran set even on the table, do you think.

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<v Speaker 4>I don't think it's you know, verbally on the table.

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<v Speaker 4>I think that Trump doesn't want it. It's you know,

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<v Speaker 4>just stepping in too much. I think that Tamiyahu would

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<v Speaker 4>like it if the Iranian people rose up and it

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<v Speaker 4>diated what in his view is finishing finishing the job.

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<v Speaker 4>From a historical perspective, almost every time the US has

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<v Speaker 4>engaged in regime change, something unexpected happens and it doesn't

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<v Speaker 4>work out like we thought it would. Iraq is the

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<v Speaker 4>best example. When we tried to we did take down

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<v Speaker 4>sam Hussein, and we got we got a failed state.

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<v Speaker 4>So I don't think it's very good policy. I think

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<v Speaker 4>it's really risky policy. If you're Israel, you have a

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<v Speaker 4>chance to take down the dell right now. History's on

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<v Speaker 4>your side for the first time in decades. And I

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<v Speaker 4>think for these Raelis this is a period of maximum

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<v Speaker 4>baby of you know, the wins at our back and

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<v Speaker 4>this is a generational chance to takedown are you know

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<v Speaker 4>arch enemy? So tricky policy. I think Israel would like it,

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<v Speaker 4>may go for it. The US, No, no, it's not

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<v Speaker 4>what's on the table for drum.

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<v Speaker 5>You know, Cliff, you mentioned the strait of who is

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<v Speaker 5>like such an important part of global shipping and a

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<v Speaker 5>potential bottleneck there, and you said you don't think I.

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<v Speaker 3>Ran will try to shut that down. Why what makes

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<v Speaker 3>you think that.

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<v Speaker 4>It's a lose lose for them? They need to get

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<v Speaker 4>their oil out tremendously depending on a little revenues one

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<v Speaker 4>hundred percent chance the US comes into wear in a

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<v Speaker 4>major way, they probably get the golf armies, French, UK involved.

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<v Speaker 4>And you know, the writing leadership is smart and I've

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<v Speaker 4>been there in a while, but I used to go

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<v Speaker 4>a number of times. They're smart, they get it, and

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<v Speaker 4>I think they know they couldn't keep the straight open

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<v Speaker 4>for a long time.

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<v Speaker 6>They couldn't close it for a long time.

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<v Speaker 4>The thing I worry about is that when regimes get desperate,

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<v Speaker 4>they do irrational things. And if the US takes down Florid,

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<v Speaker 4>though and the nuclear assets Richmond are really blown up

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<v Speaker 4>across the board, the regime could get desperate and we

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<v Speaker 4>could see that would be interrational act. They could do that,

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<v Speaker 4>and that's what I fear the most. That's the scenario

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<v Speaker 4>that I fear most about, the straight and foremost.

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<v Speaker 2>Okay, Cliff, thank you so much for that. We appreciate

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<v Speaker 2>your perspective. Clip Chen, he is chairman e RAS, your

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<v Speaker 2>group joining us here to give us kind of gaming

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<v Speaker 2>out some of the options on base case kind of

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<v Speaker 2>a bad case and then maybe a stand down case

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<v Speaker 2>everybody just kind of goes back.

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<v Speaker 3>So lots of options out there.

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<v Speaker 2>The next seems to be the role that President Trump

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<v Speaker 2>decides that the US will play, if any, in any

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<v Speaker 2>future action. So we will have continued reporting on that.

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<v Speaker 2>When we talk about commercial real estate, I often make

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<v Speaker 2>the mistake of just thinking about commercial real estate offices

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<v Speaker 2>and stuff like that, when it's really it's a lot

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<v Speaker 2>more than just office. It's industrial, it's retail and multifamily,

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<v Speaker 2>all that kind of stuff, and each of those sub

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<v Speaker 2>sectors have different fundamentals driving it. So we'd like to

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<v Speaker 2>talk to some people who do this stuff.

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<v Speaker 3>For a living, who are experts.

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<v Speaker 2>Liz hard Joins is President Leasing North America at New March.

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<v Speaker 2>She's in Cali at the moment, Liz, in the broader

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<v Speaker 2>spectrum of commercial real estate, where do you guys see

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<v Speaker 2>maybe the best value these days?

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<v Speaker 7>Well, I think what's really interesting right now. I mean

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<v Speaker 7>the demand is really up, and that's the thing to

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<v Speaker 7>talk about first, and then we can talk about where

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<v Speaker 7>the value is created. So demand is up thirty percent

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<v Speaker 7>year over year on a national basis. That's tenants touring

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<v Speaker 7>the market and looking to expand. Of those tenants that

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<v Speaker 7>are touring, two thirds of them are looking for the

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<v Speaker 7>same or more space. And it's really shifted where in

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<v Speaker 7>the last quarter it went up by twenty percent. More

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<v Speaker 7>tenants that are looking to expand, and I think when

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<v Speaker 7>you see that kind of demand. Going back to your

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<v Speaker 7>question about value, you want to look at those markets

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<v Speaker 7>that have been a little bit more distressed but are

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<v Speaker 7>now starting to see tenants that are touring again, looking

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<v Speaker 7>for space and willing to commit to a longer term

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<v Speaker 7>home lis.

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<v Speaker 3>I wonder what explains that uptick in demand?

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<v Speaker 6>Is it?

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<v Speaker 5>You know, My guess is it's that era of the

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<v Speaker 5>work from home job is over.

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<v Speaker 3>Is that part of it?

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<v Speaker 7>That's certainly a part of it. But I think the

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<v Speaker 7>other part to talk about is the resurgence of the

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<v Speaker 7>tech sector. So during the you know, last five years,

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<v Speaker 7>tech went from being a pretty major player in demand

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<v Speaker 7>to being a little bit weaker. But now tech tenants

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<v Speaker 7>are back to being twenty percent of the overall demand,

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<v Speaker 7>just behind financial services as the top at twenty two percent.

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<v Speaker 7>So you're back to seeing tech back in the market,

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<v Speaker 7>and you're seeing, particularly out of the San Francisco and

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<v Speaker 7>New York markets, tech that's taking a lot more space

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<v Speaker 7>year over year. You're seeing that growth from AI companies,

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<v Speaker 7>So you know, no one talks about AI having less space,

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<v Speaker 7>but it's interesting that the AI companies seem to be

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<v Speaker 7>very committed to the office and being in person talk

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<v Speaker 7>to us.

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<v Speaker 3>About San Francisco.

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<v Speaker 2>That was a market that arguably a poster child for

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<v Speaker 2>you know, what can really go wrong in the post

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<v Speaker 2>COVID world on so many different levels.

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<v Speaker 3>What's your view of that market right now.

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<v Speaker 7>I'm feeling very good about the San Francisco market right now.

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<v Speaker 7>I mean it's always been a boombus market. That's something

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<v Speaker 7>that real estate investors have known for years. But what's

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<v Speaker 7>really positive again is we're seeing a couple things. First

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<v Speaker 7>of all, the demand at pre pandemic levels. Keep in mind,

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<v Speaker 7>right before the pandemic, there were two one million square

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<v Speaker 7>foot requirements that were there. Do we have those again? No,

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<v Speaker 7>we're not at a million square feed in big, big tenants.

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<v Speaker 7>We have some really good one hundred thousand square footers

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<v Speaker 7>that are out there, and we have a lot of

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<v Speaker 7>growth from companies that are under twenty thousand square feet

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<v Speaker 7>and in the tech industry, you know that's just a

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<v Speaker 7>couple more years until they grow again. So we're seeing

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<v Speaker 7>a lot of resiliency. We're also seeing great commitment from

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<v Speaker 7>companies that have been.

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<v Speaker 6>There for a long time.

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<v Speaker 7>JP Morgan just renewed their lease. Morgan Lewis just had

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<v Speaker 7>a big move into the Trans America pyramid. So those

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<v Speaker 7>are more traditional industries that are also committing to that market,

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<v Speaker 7>showing the resiliency across more than just the tech sector.

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<v Speaker 3>How about that retail sector.

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<v Speaker 5>I mean, it's obviously been under pressure for years now

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<v Speaker 5>with the shift to e commerce. Has that sort of

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<v Speaker 5>bottomed out to some degree? Is retail firming up at all?

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<v Speaker 7>Well? I think what's interesting and might laugh at this,

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<v Speaker 7>is you know, malls are back class A malls ninety

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<v Speaker 7>five percent occupied that smaller format high Street performing exceptionally well,

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<v Speaker 7>So we're excited about what we're seeing on that front

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<v Speaker 7>as well. I mean, Americans love their brand. The whole

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<v Speaker 7>world loves their brands right, and we like to go

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<v Speaker 7>and experience it in person. And the other trend we're

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<v Speaker 7>seeing is a shift more experiential retail. So when you

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<v Speaker 7>have that retail format, you are there to shop. You're

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<v Speaker 7>also there sometimes to do your returns, but you're really

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<v Speaker 7>there to interact with that brand and amplify your experience

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<v Speaker 7>with it.

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<v Speaker 2>What interest rates are one of the reasons that we're

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<v Speaker 2>not seeing a lot of activity in a residential real estate.

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<v Speaker 2>How are higher rates impacting commercial real estate.

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<v Speaker 7>Look, rates are one of the things that impact the

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<v Speaker 7>overall commercial real estate market. I think the thing that

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<v Speaker 7>we're looking at a little bit more closely right now

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<v Speaker 7>is the labor trends and the business formation trends, especially

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<v Speaker 7>on the leasing side. But you know, I think people

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<v Speaker 7>are adjusting to the reality that we're living in with

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<v Speaker 7>higher rates than we were used to traditionally. And at

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<v Speaker 7>this point, you have to move your business forward, and

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<v Speaker 7>to do that, you need to have your commercial real estate.

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<v Speaker 7>You need to have a place for your people to go.

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<v Speaker 5>You know, Liz, the tariff policies and the sort of

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<v Speaker 5>austerity policies under the Trump administration have had an effect,

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<v Speaker 5>a trickle down effect on pretty much every aspect of

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<v Speaker 5>the economy, or at least people are bracing for that.

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<v Speaker 5>I'm wondering if there's any knock on effects for cre

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<v Speaker 5>from everything going on.

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<v Speaker 7>Yeah, absolutely, I mean I think, look, the terarfs have

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<v Speaker 7>been a catalyst for some and a constraint for others.

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<v Speaker 7>Right it's going to be a little bit of a

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<v Speaker 7>mixed bag. But I think, you know, probably the place

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<v Speaker 7>you're feeling at the most is the industrial sector, and

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<v Speaker 7>you will see some contraction in those West coast port cities,

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<v Speaker 7>you know, just based on the tariffs and what's expected.

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<v Speaker 7>But what's interesting is you're seeing a couple shifts. As

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<v Speaker 7>an example, Phoenix, Salt Lake City, places that have great

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<v Speaker 7>intermodal infrastructure, they're doing exceptionally well right now. Another thing

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<v Speaker 7>we're seeing that I'm kind of fascinated by is a

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<v Speaker 7>lot of corporates committing to buy their industrial real estate.

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<v Speaker 7>So I think that you know, we're seeing more than

0:11:30.720 --> 0:11:33.559
<v Speaker 7>we've ever seen, and that's just a commitment to having,

0:11:33.640 --> 0:11:35.880
<v Speaker 7>you know, more stable supply chains within the US.

0:11:37.160 --> 0:11:37.960
<v Speaker 3>Here in New York.

0:11:37.840 --> 0:11:40.640
<v Speaker 2>City, Liz, what's the call in this market right now?

0:11:40.640 --> 0:11:42.840
<v Speaker 2>Mike and I are working in an A plus quality

0:11:42.880 --> 0:11:44.800
<v Speaker 2>building here at Bloomberg, fully leased.

0:11:45.120 --> 0:11:46.559
<v Speaker 3>How about the rest of the market.

0:11:47.200 --> 0:11:48.840
<v Speaker 7>Well, you have one of the best buildings in the

0:11:48.960 --> 0:11:51.640
<v Speaker 7>entire country. But the good thing about New York is

0:11:51.640 --> 0:11:54.240
<v Speaker 7>New York demand is also back at pre pandemic levels.

0:11:54.440 --> 0:11:56.559
<v Speaker 7>It's twenty seven million squre feet. It was twenty million

0:11:56.640 --> 0:11:59.080
<v Speaker 7>right before the pandemic, So I think it's heading the

0:11:59.120 --> 0:12:02.040
<v Speaker 7>right direction. Trophy has definitely been one of the more

0:12:02.120 --> 0:12:04.719
<v Speaker 7>dominant stories in New York, and we think that it

0:12:04.760 --> 0:12:07.720
<v Speaker 7>will continue to be a dominant story going forward post

0:12:07.760 --> 0:12:11.320
<v Speaker 7>twenty nineteen. Construction is definitely what a lot of the

0:12:11.400 --> 0:12:14.960
<v Speaker 7>trophy tenants gravitate to, and we may even see a

0:12:14.960 --> 0:12:17.600
<v Speaker 7>couple of new buildings pop up, you know, given that demand,

0:12:17.679 --> 0:12:20.680
<v Speaker 7>right because that part of the market is exceptionally tight.

0:12:21.640 --> 0:12:24.160
<v Speaker 7>Tech is also coming back in New York City. It's

0:12:24.240 --> 0:12:26.480
<v Speaker 7>much bigger than it has been before. You know, there's

0:12:26.520 --> 0:12:29.320
<v Speaker 7>a bigger tech concentration of tech talent in New York

0:12:29.400 --> 0:12:31.800
<v Speaker 7>than anywhere outside of the Bay Area, so I'd expect

0:12:31.840 --> 0:12:33.480
<v Speaker 7>to see some booming there too.

0:12:34.040 --> 0:12:36.199
<v Speaker 2>Liz, thank you so much. Appreciate it as always. Liz Harp,

0:12:36.240 --> 0:12:41.520
<v Speaker 2>President for Leasing for Newmark. She's out there in California.

0:12:41.720 --> 0:12:45.400
<v Speaker 1>You're listening to the Bloomberg Intelligence Podcast. Catch us live

0:12:45.480 --> 0:12:48.600
<v Speaker 1>weekdays at ten am Eastern on Apple, Cocklay and Android

0:12:48.600 --> 0:12:51.920
<v Speaker 1>Auto with the Bloomberg Business App. Listen on demand wherever

0:12:51.960 --> 0:12:55.319
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0:12:55.800 --> 0:12:57.880
<v Speaker 2>We heard from the FED this week. I would say

0:12:57.880 --> 0:12:59.920
<v Speaker 2>it kind of came in line with expectations, that.

0:12:59.920 --> 0:13:03.120
<v Speaker 3>Is that it's not looking to do a whole lot

0:13:03.280 --> 0:13:03.760
<v Speaker 3>right now.

0:13:03.800 --> 0:13:05.800
<v Speaker 2>It's going to wait and see, maybe continue to take

0:13:05.840 --> 0:13:08.400
<v Speaker 2>a look at the data, and that seems to be

0:13:08.720 --> 0:13:12.120
<v Speaker 2>the play there. Ira Jersey, chief US interest rates strategist

0:13:12.120 --> 0:13:15.360
<v Speaker 2>to Bloomberg Intelligence. He joins us from the cam down

0:13:15.440 --> 0:13:19.000
<v Speaker 2>in Princeton, New Jersey. Ira, any takeaway SHM you from

0:13:19.920 --> 0:13:23.880
<v Speaker 2>President FED Chairman J Powell and maybe his commentary or

0:13:23.880 --> 0:13:26.160
<v Speaker 2>the reading of the note.

0:13:26.240 --> 0:13:27.560
<v Speaker 6>Yeah, I think a little bit.

0:13:28.080 --> 0:13:30.920
<v Speaker 8>You know that the Fed is still neutral right now,

0:13:30.960 --> 0:13:33.199
<v Speaker 8>but they are I think prepared to cut if they

0:13:33.240 --> 0:13:36.040
<v Speaker 8>need to. And certainly we learned a little bit more

0:13:36.040 --> 0:13:38.760
<v Speaker 8>about the reaction function that we might get.

0:13:38.800 --> 0:13:43.360
<v Speaker 6>But you know, there's still this overhang of what will tariffs.

0:13:42.960 --> 0:13:46.200
<v Speaker 8>Do to inflation inflation expectations That was brought up again

0:13:46.360 --> 0:13:50.600
<v Speaker 8>on Wednesday by by Fed chair Powell. So you know,

0:13:50.679 --> 0:13:53.680
<v Speaker 8>until we wind up with probably two maybe three more

0:13:54.120 --> 0:13:58.280
<v Speaker 8>kind of inflation prints to see how inflation is kind

0:13:58.280 --> 0:14:02.320
<v Speaker 8>of adjusting itself because of these tariffs, we probably won't

0:14:02.920 --> 0:14:06.400
<v Speaker 8>hear much from the FED now importantly, and this is

0:14:06.400 --> 0:14:09.319
<v Speaker 8>something that he did talk a lot about, was about

0:14:09.320 --> 0:14:13.640
<v Speaker 8>their policy framework. So it's possible in August or September

0:14:13.679 --> 0:14:18.240
<v Speaker 8>we'll wind up hearing from about changes to their communications policy.

0:14:18.600 --> 0:14:20.160
<v Speaker 6>Do they make changes to the DoD plot?

0:14:20.200 --> 0:14:22.720
<v Speaker 8>Do they make changes to the summary of economic projections,

0:14:23.080 --> 0:14:25.960
<v Speaker 8>all of those things might come out, and he gave

0:14:26.000 --> 0:14:27.960
<v Speaker 8>us a lot of information about that, a lot more

0:14:28.000 --> 0:14:31.680
<v Speaker 8>than we had anyway previously about how those discussions are

0:14:31.680 --> 0:14:32.320
<v Speaker 8>shaping up.

0:14:32.920 --> 0:14:33.120
<v Speaker 6>You know.

0:14:33.200 --> 0:14:35.920
<v Speaker 5>I then this morning we had FED Governor Chris Waller.

0:14:36.240 --> 0:14:39.640
<v Speaker 5>He was on CNBC sounding very dovish, which I guess

0:14:39.680 --> 0:14:42.040
<v Speaker 5>is not such a surprise for him. He is considered,

0:14:42.200 --> 0:14:44.720
<v Speaker 5>you know, one of the sort of uber dubs at

0:14:44.760 --> 0:14:49.200
<v Speaker 5>the FED. But he mentioned possibly cutting as soon as July.

0:14:49.720 --> 0:14:52.080
<v Speaker 5>I wonder what you make of that? Is that really

0:14:52.120 --> 0:14:54.600
<v Speaker 5>a far out there outlier of an opinion. Is he

0:14:54.920 --> 0:14:57.640
<v Speaker 5>auditioning for President Trump's for the next FED?

0:14:57.840 --> 0:14:58.520
<v Speaker 6>What do you make of it?

0:14:59.360 --> 0:15:02.920
<v Speaker 8>So's that he's auditioning for to be the FED chair,

0:15:03.320 --> 0:15:05.160
<v Speaker 8>you know, And he'd be an interesting choice because he

0:15:05.280 --> 0:15:07.600
<v Speaker 8>is kind of a Yes, he's on the duvish side,

0:15:07.600 --> 0:15:11.760
<v Speaker 8>but he's also a mainstream kind of FED thinker in general. Now,

0:15:11.840 --> 0:15:14.160
<v Speaker 8>the fact that he's dubvish is because of his view

0:15:14.160 --> 0:15:16.520
<v Speaker 8>of the economy and the outlook. And you know, the

0:15:16.560 --> 0:15:19.240
<v Speaker 8>thing that Governor Waller has brought up is, look, we

0:15:19.280 --> 0:15:21.560
<v Speaker 8>need to do things in advance because of you know,

0:15:21.600 --> 0:15:25.800
<v Speaker 8>the long legs that monetary policy takes to takes to

0:15:25.840 --> 0:15:29.120
<v Speaker 8>affect things, it winds up being, you know, six months

0:15:29.160 --> 0:15:33.000
<v Speaker 8>to eighteen months before an interest rate cut. One interest

0:15:33.080 --> 0:15:36.640
<v Speaker 8>rate cut, much less several actually filter through the overall economy.

0:15:36.680 --> 0:15:39.600
<v Speaker 6>So I think his view is, hey, the economy is going.

0:15:39.560 --> 0:15:42.120
<v Speaker 8>To be much weaker this fall than I think most

0:15:42.160 --> 0:15:45.160
<v Speaker 8>forecasters and his peers think, so therefore we should start

0:15:45.160 --> 0:15:47.160
<v Speaker 8>cutting in July. Now he's in the minority with that

0:15:47.960 --> 0:15:52.160
<v Speaker 8>very clearly, but there are these you know, the median

0:15:52.560 --> 0:15:54.480
<v Speaker 8>suggests that we're going to have fifty basis points of

0:15:54.520 --> 0:15:56.440
<v Speaker 8>cuts by year end, But there's also this whole other

0:15:56.520 --> 0:15:58.800
<v Speaker 8>camp that thinks they shouldn't be cutting at all, right,

0:15:58.840 --> 0:16:02.200
<v Speaker 8>and we can't discount them because that's a large minority

0:16:02.400 --> 0:16:03.960
<v Speaker 8>of the committee.

0:16:04.520 --> 0:16:07.000
<v Speaker 6>So Chris Waller, yes, he's on the divers side.

0:16:07.000 --> 0:16:09.680
<v Speaker 8>But remember there's also these more you know, neutral to

0:16:09.720 --> 0:16:13.040
<v Speaker 8>hawkish members that are suggesting, hey, we should really wait

0:16:13.080 --> 0:16:14.920
<v Speaker 8>and see because the economy is not that bad and

0:16:14.960 --> 0:16:18.760
<v Speaker 8>our outlook isn't terrible yet. So I do think that

0:16:18.840 --> 0:16:21.320
<v Speaker 8>he's certainly the minority. July is off the table. There's

0:16:21.360 --> 0:16:22.640
<v Speaker 8>no way that they're going to cut in July.

0:16:23.400 --> 0:16:25.560
<v Speaker 2>You know, one of the issues obviously facing the FED

0:16:25.640 --> 0:16:28.200
<v Speaker 2>is inflation, and FED Chairman j Palace said that he

0:16:28.280 --> 0:16:31.040
<v Speaker 2>believes higher prices are coming as a result of tariffs,

0:16:31.040 --> 0:16:34.040
<v Speaker 2>but we just haven't seen it in the data yet. Ira,

0:16:34.280 --> 0:16:36.640
<v Speaker 2>I mean, how do you think the Fed's thinking about

0:16:36.680 --> 0:16:40.080
<v Speaker 2>tariffs thinking about possible inflation, because again, we just really

0:16:40.080 --> 0:16:40.880
<v Speaker 2>haven't seen it yet.

0:16:41.800 --> 0:16:45.080
<v Speaker 8>Well, goods prices in some categories were a little bit

0:16:45.160 --> 0:16:48.200
<v Speaker 8>higher in the if you look at the May CPI report.

0:16:48.240 --> 0:16:50.520
<v Speaker 8>But keep in mind there's a couple of things. Part

0:16:50.520 --> 0:16:52.480
<v Speaker 8>of this is timing, Like we always expect things to

0:16:52.520 --> 0:16:55.560
<v Speaker 8>happen in a thirty minute sitcom type of situation on

0:16:55.640 --> 0:16:58.200
<v Speaker 8>TV or now maybe a five minute YouTube video, right, So,

0:16:58.680 --> 0:16:59.400
<v Speaker 8>but that's not the.

0:16:59.360 --> 0:17:00.640
<v Speaker 6>Way that the real world works.

0:17:00.920 --> 0:17:05.359
<v Speaker 8>We're still working through inventories that companies had prior to

0:17:05.920 --> 0:17:08.920
<v Speaker 8>tariff's being implemented, so and then it takes a month

0:17:09.040 --> 0:17:12.560
<v Speaker 8>or two for the new goods to come into the

0:17:12.600 --> 0:17:16.600
<v Speaker 8>country and for those tariffs actually affect the prices of

0:17:16.640 --> 0:17:19.080
<v Speaker 8>those imported goods. So we're only going to start really

0:17:19.080 --> 0:17:22.280
<v Speaker 8>seeing that in the June data. So that's why the

0:17:22.320 --> 0:17:24.720
<v Speaker 8>next two I think inflation reports are going to be

0:17:24.800 --> 0:17:28.000
<v Speaker 8>key to how much of the tariffs are being passed

0:17:28.040 --> 0:17:31.960
<v Speaker 8>through to the consumer via you know, via higher prices,

0:17:32.200 --> 0:17:36.080
<v Speaker 8>how much is being is being absorbed by both wholesalers

0:17:36.080 --> 0:17:40.840
<v Speaker 8>and retailers in terms of or even manufacturers and in

0:17:40.880 --> 0:17:44.359
<v Speaker 8>them lowering prices versus the higher tariffs. So all of

0:17:44.400 --> 0:17:46.560
<v Speaker 8>these things are still question marks that we don't have

0:17:46.680 --> 0:17:49.160
<v Speaker 8>in any of the macro data. On the other side

0:17:49.200 --> 0:17:51.120
<v Speaker 8>of that, Paul, you have to remember there were other

0:17:51.160 --> 0:17:56.080
<v Speaker 8>things like service services and housing that actually saw slower

0:17:56.119 --> 0:17:58.480
<v Speaker 8>price gains, and that's one of the reasons why you

0:17:58.600 --> 0:18:02.360
<v Speaker 8>didn't see an aggregate uh CPI spike up at all

0:18:02.400 --> 0:18:04.240
<v Speaker 8>because of the slightly higher goods prices.

0:18:04.320 --> 0:18:06.600
<v Speaker 2>All right, it's the summertime, which means I don't have

0:18:06.680 --> 0:18:08.800
<v Speaker 2>to worry about soccer and all that stuff.

0:18:09.080 --> 0:18:12.480
<v Speaker 3>But now you got the Club World Cup. What is this?

0:18:14.440 --> 0:18:17.520
<v Speaker 8>The Club World Cup is a kind of a thing

0:18:17.560 --> 0:18:20.639
<v Speaker 8>that FIFA made to try to make money and bringing

0:18:20.880 --> 0:18:25.040
<v Speaker 8>bringing in basically regional champions of from all around the world.

0:18:25.280 --> 0:18:29.639
<v Speaker 8>It's really not been a particularly good competition because you

0:18:29.760 --> 0:18:33.280
<v Speaker 8>have you know, European teams are absolutely slaughtering teams from

0:18:33.480 --> 0:18:34.960
<v Speaker 8>other places around the world.

0:18:35.320 --> 0:18:36.800
<v Speaker 3>Hey, hey, Miami did beat Porto.

0:18:36.920 --> 0:18:38.680
<v Speaker 6>That's yeah, that's true.

0:18:38.680 --> 0:18:41.439
<v Speaker 8>And actually PSG had what was upset as well, so

0:18:41.560 --> 0:18:44.159
<v Speaker 8>there have been some good games, but I don't know.

0:18:44.200 --> 0:18:45.520
<v Speaker 6>I'm watching the Gold Cup.

0:18:45.560 --> 0:18:49.679
<v Speaker 8>The US men's national team beat Sordi Arabia last night,

0:18:49.720 --> 0:18:52.840
<v Speaker 8>one nail, and you know, because that's that's a warm

0:18:52.920 --> 0:18:55.200
<v Speaker 8>up to the actual World Cup, the real thing that's

0:18:55.240 --> 0:18:56.320
<v Speaker 8>going to happen next summer.

0:18:56.359 --> 0:18:56.520
<v Speaker 6>Here.

0:18:56.640 --> 0:19:00.480
<v Speaker 2>I just can't there's so many tournaments in their clubs, THEES.

0:19:00.560 --> 0:19:03.000
<v Speaker 3>I just I can't keep tractors too much stuff. That's

0:19:03.040 --> 0:19:04.119
<v Speaker 3>why we have Ira Jersey.

0:19:04.119 --> 0:19:05.639
<v Speaker 2>He does the interest rate thing on the side, but

0:19:05.640 --> 0:19:08.439
<v Speaker 2>he's really our god to person on all things global soccer.

0:19:08.480 --> 0:19:11.720
<v Speaker 2>Ira Jersey, Chief US interest rate Strategists for Bloomberg Intelligence.

0:19:12.160 --> 0:19:16.840
<v Speaker 1>This is the Bloomberg Intelligence podcast, available on Apple, Spotify,

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